Cemex 2013 Annual Report Download - page 126

Notes to the consolidated financial statements
25) Related parties
AllsignicantbalancesandtransactionsbetweentheentitiesthatconstitutetheCEMEXgrouphavebeeneliminatedinthepreparationof
theconsolidatednancialstatements.Thesebalanceswithrelatedpartiesresultedprimarilyfrom:(i)thesaleandpurchaseofgoodsbetween
groupentities;(ii)thesaleand/oracquisitionofsubsidiaries’shareswithintheCEMEXgroup;(iii)theinvoicingofadministrativeservices,
rentals,trademarksandcommercialnamerights,royaltiesandotherservicesrenderedbetweengroupentities;and(iv)loansbetweenrelated
parties.Transactionsbetweengroupentitieswereconductedonarm’slengthtermsbasedonmarketpricesandconditions.
ThedenitionofrelatedpartiesincludesentitiesorindividualsoutsidetheCEMEXgroup,which,pursuanttotheirrelationshipwithCEMEX,
maytakeadvantageofbeinginaprivilegedsituation.Likewise,thisappliestocasesinwhichCEMEXmaytakeadvantageofsuchrelationships
and obtain benets in its nancial position or operating results. CEMEX’s transactions with related parties are executed under market
conditions.CEMEXhasidentiedthefollowingtransactionsbetweenrelatedparties:
• Mr.JoséAntonioFernándezCarbajal,formermemberoftheboardofdirectorsofCEMEX,S.A.B.deC.V.untilFebruary23,2012,
ispresidentandchief executiveofcerofFomentoEmpresarialMexicano,S.A.B.deC.V.(“FEMSA”),alargemultinationalbeverage
company.Moreover,Mr.FranciscoJavierFernándezCarbajal,brotherofMr.JoséAntonioFernándezCarbajal,wasappointedtothe
boardofdirectorsofCEMEX,S.A.B.deC.V.effectiveMarch21,2013.Intheordinarycourseofbusiness,CEMEXpaysandreceives
variousamountstoandfromFEMSAforproductsandservicesforvaryingamountsonmarketterms.Mr.FernándezCarbajalisthe
actualchairmanoftheboardofConsejodeEnseñanzaeInvestigaciónSuperior,A.C.(themanagingentityofInstitutoTecnológicoyde
EstudiosSuperioresdeMonterreyorITESM).Mr.LorenzoH.Zambrano,ChairmanoftheBoardofDirectorsandChiefExecutiveOfcer
ofCEMEX,S.A.B.deC.V.,waschairmanoftheboardofITESMuntilFebruary13,2012.ITESMhasreceivedcontributionsfromCEMEX
foramountsthatwerenotmaterialintheperiodspresented.
• Mr.RafaelRangelSostmann,amemberoftheboardofdirectorsofCEMEX,S.A.B.deC.V.,wasthedeanofITESMuntilSeptember12,
2011.
• Mr.BernardoQuintanaIsaac,formermemberoftheboardofdirectorsofCEMEX,S.A.B.deC.V.,untilMarch20,2013isthechairman
oftheboardofdirectorsofEmpresasICA,S.A.B.deC.V.(“EmpresasICA”).EmpresasICAisoneofthemostimportantengineeringand
constructioncompaniesinMexico.Intheordinarycourseofbusiness,CEMEXextendsnancingtoEmpresasICAinconnectionwiththe
purchaseofCEMEX’sproducts,onthesamecreditconditionsthatCEMEXawardstoothercustomers.
• Mr.LorenzoH.ZambranoisamemberoftheboardofdirectorsofIBM.Asmentionedinnote23C,intheordinarycourseofbusiness,IBM
providesCEMEXwithbusinessprocessesservicesandIT,including:dataprocessingservices(backofce)innance,accountingandhuman
resources;aswellasITinfrastructureservices,supportandmaintenanceofITapplicationsinthecountriesinwhichCEMEXoperates.
• Mr.KarlH.WatsonJr.isthePresidentofCEMEX’soperationsintheU.S.Intheordinarycourseofbusiness,CEMEX’sU.S.operations
paysfeestoFloridaAggregateTransport,avendorbasedinFlorida,forfreightservices.KarlH.WatsonJr.’sstepbrotherispartofFlorida
AggregateTransport’sownershipandseniormanagement.Theamountofthoseservices,whicharenegotiatedonmarketterms,are
notsignicanttoCEMEX’sU.S.operations.
• OnApril 12,2011,Juan Pablo SanAgustínRubio wasappointedtothe role ofexecutivevicepresidentforstrategicplanning and
businessdevelopment,whichispartofCEMEX’sseniormanagement.In2007,incompliancewithCEMEX’sthenapplicablepolicies,
CEMEXextendedaloantoMr.SanAgustínRubiofortheconstructionofahouse.Duringtherstquarterof2012,theloanwasrepaid
infull.Theloanboreinterestatanannualrateof1.2%andthelargestamountoutstandingfromJanuary1,2011untilitwasrepaidwas
approximately€275thousand.Exceptforthepreviouslydescribedloan,during2013,2012and2011,therewerenoloansbetween
CEMEXanditsboardmembersorothermembersofitstopmanagement.
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