Related party transactions

12 Months Ended

Dec. 31, 2012

Related party transactions

19. Related party transactions

Pursuant to the SPA and the Amended SPA as described in Note 3, on May 7, 2012, Roust Trading acquired 5,714,286 shares of the Company’s common stock. Mr. Roustam Tariko who indirectly controls Roust Trading has been appointed to CEDC’s Board of Directors as a non-Executive Chairman of the Board. Effectively all entities controlled by Mr. Tariko are as of now related parties of CEDC, including Russian Standard Bank, Russian Standard Corporation, Roust Inc., Russian Standard Vodka (USA), Inc., Russian Standard Vodka, Union Trust Story and F.Lli Gancia.

As disclosed in Note 3 and Note 13 above, on May 7, 2012, the Company issued $70 million principal amount of senior notes due March 18, 2013, bearing on interest rate of 3% to Russian Standard Bank. The details of this transaction are described in Note 13 above.

In the ordinary course of business, the Company is involved in transactions with entities controlled by Mr. Tariko (“Roust”) that resulted in recognition of revenues, expenses, assets and liabilities by the Company.

The following table summarizes the transactions with Roust as included in the Company’s Consolidated Financial Statements:

Related party transactions (in thousands)
Consolidated Statement of Operations and Comprehensive Loss for the period	Period from May 7 till December 31, 2012
Net Sales	$	1,518
Cost of goods sold		1,863
Selling, general and administrative expenses	$	1,059

Consolidated Balance Sheet (in thousands)	December 31, 2012
Current Assets
Accounts receivable	$	57
Other current assets		2,291
Total due from Roust	$	2,348
Current Liabilities
Trade accounts payable	$	1,946
Other accrued liabilities		317
Total due to Roust	$	2,263

Net sales revenue comprises revenue from sales of Gancia products to Roust, SG&A constitutes mainly of: $0.2 million for holding inventory under the purchase agreement with Roust described in Note 7, $0.4 million for rent of office premises from Union Trust Story and Russian Standard Vodka, and $0.2 million for the cost of bank guarantees from Russian Standard Bank.