Adidas 2003 Annual Report Download - page 132

NOTES ///
adidas-Salomon AG, a listed German stock corporation, and its subsidiaries design, develop, pro-
duce and market a broad range of athletic and sports lifestyle products. The Group’s headquarters
are located in Herzogenaurach, Germany. adidas-Salomon has divided its operating activities by
major brands into three segments: adidas, Salomon and TaylorMade-adidas Golf.
adidas branded products include footwear, apparel and hardware, such as bags and balls. The
products are designed and developed by adidas and are almost exclusively manufactured by sub-
contractors on behalf of adidas. erima products include teamsport apparel.
Salomon branded products include ski and snowboard equipment (skis, snowboards, boots and
bindings), technical outdoor apparel as well as hiking boots and inline skates which are designed
and manufactured mainly in France, Italy and Romania. Mavic products include rims and wheels for
mountain bikes and road racing as well as gears. The Bonfire brand offers snowboard apparel and
streetwear. Cliché is the brand for skateboard equipment and apparel. Arc’Teryx is specialized in
technical outerwear, performance backpacks and climbing equipment.
TaylorMade develops and assembles or manufactures high-quality golf clubs, balls and acces-
sories. adidas Golf branded products include footwear, apparel and accessories. Maxfli is special-
ized in golf balls and golf accessories.
1 /// GENERAL
The accompanying consolidated financial statements of adidas-Salomon AG (in the following also
the “Company”) and its subsidiaries (collectively the “adidas-Salomon Group”, “adidas-Salomon”
or the “Group”) are prepared in accordance with accounting principles adopted by the International
Accounting Standards Board (International Financial Reporting Standards – “IFRS”). The Group
applied all International Financial Reporting Standards and Interpretations of the International
Financial Reporting Interpretations Committee effective as at December 31, 2003 and 2002
respectively.
In 2003, no new or revised standards were adopted.
Compared to the prior year presentation, short- and long-term financial assets are now reported
separately on the balance sheet. Comparative figures have been adjusted to conform with the
changes in presentation in the current year. The relevant positions are cash and cash equivalents
and other non-current assets.
German Statutory Reporting
The Company does not prepare consolidated financial statements under accounting principles
generally accepted in Germany (German GAAP) pursuant to the exemption in § 292a of the German
Commercial Code (HGB).
2 /// SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements are prepared in accordance with the consolidation, account-
ing and valuation principles described below.
Principles of Consolidation
The consolidated financial statements include the accounts of adidas-Salomon AG and its signifi-
cant direct and indirect subsidiaries, which are prepared in accordance with uniform accounting
principles.
A company is a subsidiary if adidas-Salomon AG directly or indirectly controls the financial and
operating policies of the respective enterprise.
The number of consolidated companies evolved as follows for the years ending December 31,
2003 and 2002 respectively:
NUMBER OF CONSOLIDATED COMPANIES
2003 2002
January 1 106 100
Newly founded/consolidated companies 64
Merged companies (1) –
Purchased companies –2
December 31 111 106
Four subsidiaries have not been included in the consolidated financial statements in 2003
(2002: eight subsidiaries), since they have little or no active business and are insignificant to the
Group’s financial position, results of operations and cash flows. The shares in these companies are
accounted at cost.
A schedule of the shareholdings of adidas-Salomon AG is shown in Attachment I to these
notes. A collective listing of these shareholdings in accordance with § 285 No. 11 and § 313 section
2 and 3 of the German Commercial Code will be filed with the Commercial Register at the Local
Court in Fürth (Bavaria).
Consolidation of equity is made in compliance with the book value method by offsetting the
initial investments in subsidiaries against the relevant equity portion at fair value held by the parent
company as at acquisition date.
All significant intercompany transactions and balances, and any unrealized gains and losses
arising from intercompany transactions are eliminated in preparing the consolidated financial
statements.
128 FINANCIAL ANALYSIS CONSOLIDATED FINANCIAL STATEMENTS (IFRS) NOTES