Adidas 1996 Annual Report Download - page 58

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17. Cash flow statement Effective October 1, 1996, the Company acquired 51% of the shares of Jewoo
Trading Co. Ltd. in South Korea. The fair value of assets acquired and liabilities
assumed were as follows:
(in DM 000)
Cash 41,347
Inventories 14,049
Receivables and other current assets 67,774
Property, plant and equipment 13,186
Intangibles and other assets 15,005
Minority interests (11,510)
Accounts payable and other liabilities (78,954)
Short-term borrowings (35,177)
Total acquisition cost 25,720
less: cash of newly consolidated subsidiaries (41,347)
less: purchase price not yet paid (25,720)
Cash flow of newly consolidated subsidiaries net of cash acquired (41,347)
Cash and cash equivalents represent cash and short-term, highly liquid investments
purchased with maturities of three months or less.
The increase in cash and cash equivalents from DM 41 million at the end of 1995 to
DM 84 million at the end of 1996 is primarily due to the inclusion of the new joint
venture company Jewoo Trading Co. Ltd. (in future adidas Korea), which held cash
of DM 30 million at the end of 1996. Furthermore, Jewoo Trading Co. Ltd. held cash
with maturities of 12 months or less in the amount of DM 24 million, which is
included in other current assets (see Note 5), and cash with maturities exceeding 12
months in the amount of DM 23 million, which is included in other long-term assets
(see Note 7). Totally, DM 50 million of these DM 77 million was pledged mainly in
support of credit line arrangements.
18. Commitments and As of December 31, 1996, the Company has bills discounted in the amount of
contingencies approximately DM 9 million and is contingently liable for guarantees of indebtedness
for liabilities due to banks in the amount of approximately DM 5 million.
The Company has other financial commitments for promotion and advertising con-
tracts, together with fixed asset investment commitments for the succeeding five
years 1997 through 2001 of approximately DM 164 million, DM 131 million, DM 100
million, DM 82 million and DM 56 million, respectively. Amounts of future payments
after 2001 are approximately DM 62 million. These commitments have remaining
terms of up to 8 years from December 31, 1996.
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