GRUMA, S.A.B. de C.V.
GRUMA, S.A.B. de C.V. is a Public Company trading in the New York Stock Exchange (NYES) with the ticker GMK. The headquarters are located on San Pedro Garza Garcia in the state of Nuevo Leon, Mexico. GRUMA was founded in 1949 and is engaged primarily in the production of corn flour, tortillas, and wheat flour; being one of the world's leading tortilla and corn flour producers.
GRUMA has subsidiaries located in Mexico, the United States of America, Central America, Venezuela, Europe, Asia and Oceania; and exports to more than 100 countries worldwide. In the United States the company operates 23 plants, in Europe 4 plants, Mexico 22 plants, Asia 3 plants and 12 plants located trough Central America.
The financial performance of GRUMA may be affected by the price and availability of corn, wheat and wheat flour as each of these raw materials represented 38%, 9% and 7%, respectively, the costs of sales. At December 31, 2013, the Company had foreign exchange derivative instruments for a nominal amount of U.S. $65 million maturing in January 2014. The purpose of these instruments is to hedge the risks related to exchange rate variations on corn price, which is denominated in U.S. dollars.
Also the Company is exposed to a variety of financial risks: market risk (including currency risk, interest rate risk, and commodity price risk), credit risk and liquidity risk. The group’s overall risk management focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on financial performance. The Company uses derivative financial instruments to hedge some of these risks.
Regarding foreign currency, the company operates internationally and is exposed to currency risks, particularly wit...
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...tiations will be successful or will result in the Investors receiving adequate compensation, if any, for their investments subject to the Expropriation Decree. Additionally, the Company cannot predict the results of any arbitral proceeding, or the ramifications that costly and prolonged legal disputes could have on its results of operations or financial position, or the likelihood of collecting a successful arbitration award. For this kind of risk the company can’t protect itself, because these situations are out of its control.
Works Cited
GRUMA, S.A.B. de C.V., SEC form 20-F, Filling date: 2014-04-30 http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001053947&owner=exclude&count=40
GRUMA, S.A.B. de C.V. “Consolidated Financial Statements”. http://www.gruma-en.com/media/341622/annual_report_2012_in_pdf_format.pdf
http://finance.yahoo.com/q?s=GMK
Ralph Nader, Mark Green and Joel Seligman, in an excerpt from Taming the Giant Corporation (1976, found in Honest Work by Ciulla, Martin and Solomon), take the current role of the company board of directors and suggest changes that should be made to make the board to be efficient. They claim the current makeup of the board does not necessarily do justice to the company because “in nearly every large American business…there exists a management autocracy” (Nader, Green and Seligman, 1976, p.570). The main resolution they present is to make the board more democratic with the betterment of the company as its first priority. Currently the board no longer oversees operations, or elects top company executives and they are no longer involved in the business operations to the extent they should be. Nadar, Green and Seligman argue that that all of these things need to be changed. For a corporation so large to be successful there must be separation of powers just as there is in any current government system ( p.571). They claim this is the only and best way to success (Nader, Green and Seligman, 1976, p.570-571).
strong global presence tha t dates back to 1882 when it opened a plant in
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