Cemex 1999 Annual Report Download - page 53

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For purposes of disclosure, when reference is made to pesos or “$”, it means Mexican pesos, likewise, when reference
is made to dollars or U.S. dollars, it means currency of the United States of America.
When reference is made to “CPO’s”, it is the Ordinary Participation Certificates of the Company, which include two
series “A” shares and one series “B” share per each CPO. When reference is made to “ADS’s”, it is the “American
Depositary Shares” of the Company. Each ADS includes 5 CPO’s.
B) PRESENTATION OF COMPARATIVE FINANCIAL STATEMENTS
In accordance with Bulletin B-15 “Foreign Currency Transactions and Translation of Foreign Currency Financial
Statements”, the inflation restatement factors applied to the financial statements of prior periods were calculated
based upon a weighted average index, which takes into consideration the inflation rates of the countries in which the
subsidiaries operate, and the fluctuations in the exchange rate of each country vis-a-vis the Mexican peso. The
inflation restatement factors for the Parent Company-only financial statements of prior periods were calculated based
upon the inflation in Mexico.
1999 1998
Inflation restatement factor using weighted average index 1.0011 1.2581
Inflation restatement factor for inflation in Mexico 1.1232 1.1861
The inflation restatement adjustments for common stock and additional paid-in capital are determined by using the
Mexican inflation. The weighted average restatement index was used for all other inflation restatement adjustments
to stockholders’ equity.
C) PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include those of Cemex and the subsidiary companies in which Cemex holds
a majority interest and/or has control. All significant intercompany balances and transactions have been eliminated in
consolidation.
The main subsidiaries are:
• Cemex México, S. A. de C.V.
• Beeston Investments Holdings Limited
• Compañía Valenciana de Cementos Portland, S.A.
• Corporación Venezolana de Cementos, S.A.C.A.
• Cemex USA, Inc.
• Cementos Diamante, S.A.
• Cemento Bayano, S.A.
• Cementos Nacionales, S.A.
• Rizal Cement Company, Inc.
• APO Cement Corporation
• Assiut Cement Company
• Cementos del Pacífico, S.A.
• Turismo Cemex, S.A. de C.V.
D) ADMINISTRATIVE IMPROVEMENT PROGRAM DURING 1999
During 1999, as part of an administrative improvement program, the Company integrated within the structure of one
entity the cement and concrete operations in Mexico in order to eliminate redundant processes and take advantage
of synergies. This administrative process included mergers, as well as sales-purchases of companies within the Group,
for which the following actions were taken:
1) Effective July 31, 1999, the Company changed the legal name of Cemex Control, S.A. de C.V. (“Control”) to
Empresas Tolteca de México, S.A. de C.V. (“ETM”).
2) Effective December 31, 1999, a merger took place of most of the cement subsidiaries in Mexico, including
Tolmex, S.A. de C.V. (“Tolmex”). The merging entity was Serto Construcciones, S.A. de C.V. (“Serto”),
company which before the merger was a direct subsidiary of Tolmex. Likewise, on December 10, 1999, the legal
name of Serto was changed to Cemex México, S.A. de C.V. (“Cemex México”).
3) Effective December 31, 1999, a merger took place of most of the concrete subsidiaries in México into one sole
entity. The merging entity was Cemex Concretos, S.A. de C.V., before named Concretos de Alta Calidad y
Agregados, S.A. de C.V.