Cemex 2013 Annual Report Download - page 121
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Please find page 121 of the 2013 Cemex annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Notes to the consolidated financial statements
• OnJanuary20,2012,theUnitedKingdomCompetitionCommission(the“UKCommission”),commencedamarketinvestigation(“MIR”)
intothesupplyoracquisitionofcement,ready-mixconcreteandaggregates.ThereferraltotheUKCommissionwasmadebytheOfce
ofFairTrading,followinganinvestigationbythemoftheaggregatessector.Thosecompaniesandpersonsinvitedtoparticipateinthe
MIRarerequiredbylawtocomplywithcertainrequestsforinformationand,ifnecessary,toattendhearings.CEMEX’ssubsidiariesinthe
UKwereinvitedtoparticipateintheMIRandfullycooperated.TheUKCommissionissueditsfullProvisionalFindingsReportonMay23,
2013,inwhichitprovisionallyfoundthattherewasacombinationofstructuralandconductfeaturesthatgaverisetoanadverseeffect
oncompetitionintheGreatBritaincementmarketsandanadverseeffectoncompetitionasaresultofcontractsinvolvingcertainmajor
producersforthesupplyofgranulatedblastfurnaceslagandforthesupplyofgroundgranulatedblastfurnaceslag.TheUKCommission
hasnotidentiedanyproblemswiththemarketsforaggregatesorreadymixconcrete.ThepossibleremediestheUKCommission
listedinclude,amongothers,thedivestitureofcementproductioncapacityand/orreadymixconcreteplantsbyoneormoreofthetop
threecementproducersandthecreationofacementbuyinggroup.OnOctober8,2013theUKCommissionannounceditsprovisional
decisiononremedieswhichshouldnotrequireCEMEXtodivestanyofitsassetsintheUnitedKingdom.Othermajorparticipantsinthe
MIRcouldberequiredtodivestcertainoftheirassetsintheUnitedKingdom.Basedontheprovisionalremedies,as,asofDecember31,
2013,CEMEXdoesnotexpectanymaterialadverseimpactonitsresultsofoperations,liquidityandnancialconditionfromtheFinding
andRemediesnalreportthatistobesubmittedbytheUKCommissionbyJanuary17,2014.
• OnDecember8,2010,theEuropeanCommission(the“EC”)informedCEMEXthatithasdecidedtoinitiateformalproceedingsinrespect
ofpossibleanticompetitivepracticesinAustria,Belgium,theCzechRepublic,France,Germany,Italy,Luxembourg,theNetherlands,
Spainand theUnitedKingdom,which includeCEMEXand sevenothercompanies.Theseproceedingsmayleadtoan infringement
decisionor,iftheobjectionsraisedbytheECarenotsubstantiated,thecasemightbeclosed.OnApril2011,theECrequestedCEMEX
todeliverasubstantialamountofinformationanddocumentation.CEMEXledanappealbeforetheGeneralCourtoftheEuropean
Unionfortheannulmentofsuchrequestforinformationanddocumentationonthegroundsthatitiscontrarytoseveralprincipalsof
EuropeanUnionLaw.Nonetheless,therequestwasfullledbyCEMEXonAugust2,2011.OnSeptember16,2011,withoutdiscussing
themainargumentsoftheclaim,theECrejectedtheclaimfromCEMEXaskingfortheannulmentoftherequest.OnDecember15,
2011,CEMEXcompliedwiththetermsofthisdecisionandsubmittedanewreplywiththeamendmentsandclaricationsidentied
intherevisionandauditprocess.OnDecember21,2011,CEMEXleditsreplytotheEC’srejection.TheECleditsrejoinderon
March27,2012.AhearingwithrespecttotheproceedingsagainstCEMEXwasheldonFebruary6,2013,andthehearingsforall
othercompaniesbeinginvestigatedwereheldduringApril2013.CEMEXestimatesthatthejudgmentwillbeissuedduring2014.If
theallegedinfringementsaresubstantiated,theECmayimposeamaximumneofupto10%ofthetotalturnoveroftherelevant
companiesforthelastyearprecedingtheimpositionoftheneforwhichthenancialstatementshavebeenapproved.CEMEXintends
todefenditspositionvigorouslyinthisproceedingandisfullycooperatingandwillcontinuetocooperatewiththeECinconnection
withthismatter.AsofDecember31,2013,theextentofthechargesandtheallegedinfringementsareunknown,anditisnotclear
whichrevenueswouldbeusedforthedeterminationofthepossiblepenalties.Asaresult,CEMEXcannotassessthelikelihoodofan
adverseresultortheamountofthepotentialne,but,ifadverselyresolved,itmayhaveamaterialadverseimpactonCEMEX’sresults
ofoperations,liquidityandnancialcondition.
• OnOctober26,2010,CEMEX,Inc.,oneofCEMEX’ssubsidiariesintheUnitedStates,receivedanAntitrustCivilInvestigativeDemand
fromtheOfceoftheFloridaAttorneyGeneral,whichseeksdocumentsandinformationinconnectionwithanantitrustinvestigationby
theFloridaAttorneyGeneralintotheready-mixconcreteindustryinFlorida.AsofDecember31,2013,CEMEXInc.hascompliedwith
theOfceoftheFloridaAttorneyGeneralwithrespecttothedocumentsandinformationrequestedbythecivilinvestigativedemand,
anditisunclear,asofDecember31,2013,whetheranyformalproceedingwillbeinitiatedbytheOfceoftheFloridaAttorneyGeneral,
orifsuchproceedingsareinitiated,ifadversedecisionagainstCEMEXresultingfromtheinvestigationwouldbemadeorifsuchdecision
wouldhaveornotamaterialadverseimpactonCEMEX’sresultsofoperations,liquidityornancialcondition.
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