CRH Annual Report 2007 PERFORMANCE AND GROWTH

Notes on Financial Statements34. Related Party TransactionsThe principal related party relationships requiring disclosure in the consolidated financial statements of the Group under IAS 24 Related Party Disclosurespertain to: the existence of subsidiaries, joint ventures and associates; transactions with these entities entered into by the Group; and the identification andcompensation of key management personnel.Subsidiaries, joint ventures and associatesThe consolidated financial statements include the financial statements of the Company (CRH plc, the ultimate parent) and its subsidiaries, joint ventures andassociates as documented in the accounting policies on pages 61 to 67. The Group’s principal subsidiaries, joint ventures and associates are disclosed onpages 120 to 125.Sales to and purchases from, together with outstanding payables to and receivables from, subsidiaries and joint ventures are eliminated in the preparationof the consolidated financial statements in accordance with IAS 27 Consolidated and Separate Financial Statements. Loans extended by the Group tojoint ventures and associates are included in financial assets (whilst the Group’s share of the corresponding loans payable by joint ventures are included ininterest-bearing loans and borrowings due to the application of proportionate consolidation in accounting for the Group’s interests in these entities). Salesto and purchases from associates during the financial year ended 31st December 2007 amounted to €19 million (2006: €17 million) and €497 million (2006:€438 million) respectively. Amounts receivable from and payable to associates (arising from the aforementioned sales and purchases transactions) as at thebalance sheet date are included as separate line items in notes 18 and 19 to the consolidated financial statements.Terms and conditions of transactions with subsidiaries, joint ventures and associatesIn general, the transfer pricing policy implemented by the Group across its subsidiaries is market-based. Sales to and purchases from other relatedparties (being joint ventures and associates) are conducted in the ordinary course of business and on terms equivalent to those that prevail in arm’s-lengthtransactions. The outstanding balances included in receivables and payables as at the balance sheet date in respect of transactions with associates areunsecured and settlement arises in cash. No guarantees have been either requested or provided in relation to related party receivables and payables. Loansto joint ventures and associates (the respective amounts being disclosed in note 15) are extended on normal commercial terms with interest accruing and,in general, paid to the Group at predetermined intervals.Key management personnelFor the purposes of the disclosure requirements of IAS 24, the term “key management personnel” (i.e. those persons having authority and responsibility forplanning, directing and controlling the activities of the Company) comprises the Board of Directors which manages the business and affairs of the Company.As identified in the Report on Directors’ Remuneration on pages 48 to 55, the Directors, other than the non-executive Directors, serve as executive officers ofthe Company. Full disclosure in relation to the compensation entitlements of the Board of Directors is provided in the Report on Directors’ Remuneration.35. Board ApprovalThe Board of Directors approved and authorised for issue the financial statements on pages 58 to 112 in respect of the year ended 31st December 2007on 3rd March 2008.112 CRH