MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL POSITION AND RESULTS OF OPERATIONS
The financial year of Ajax runs from July 1 through June 30. The financial position and
operating results discussed in this chapter relate to and should be regarded in connection
with the financial information as stated elsewhere in this Prospectus.
The pro forma financial statements have been derived from the annual accounts of the
Association for the financial years 1994/1995, 1995/1996, 1996/1997 and the interim results
of the financial year 1997/1998. The information regarding the 1996/1997 financial year and
the first half of the 1997/1998 financial year is consolidated. An auditors' report for the pro
forma consolidated financial statements has been received from Price Waterhouse
See the chapter 'Pro Forma Consolidated Financial Statements'.
The most important valuation principles and principles for determination of the results
apply to Transfer and Signing Fees and treatment of taxation. Transfer and signing fees are
capitalised for the amounts paid to third parties and are depreciated over the period of
the contract. Corporation tax is calculated on the basis of the Profit and Loss account,
allowing for the difference between the commercial result and the fiscal result. The pro
forma consolidated financial statements are based on the assumption that the Company
already existed in previous years.
The interim results of Ajax are influenced by the programme of the National competition.
Turnover from season tickets is recorded according to the number of matches played in
that competition. Premiums from the national competition, the Amstel Cup and friendly
matches, premiums from the European Cup, together with match costs and premiums for
players are allocated to the period in which the matches are played.
Net turnover for the 1994/1995, 1995/1996 and 1996/1997 financial years was strongly
influenced by the succesful participation of Ajax in the Champions League and the move
to the Amsterdam ArenA and 'De Toekomst'. Turnover from football activities have
therefore increased considerably in the financial years concerned.
As a result of the above opportunities for sponsoring and advertising have strongly
improved. The success of Ajax has led to an increase in the number of sub-sponsors and a
better relationship with existing sponsors.
The exploitation of television rights and merchandising has developed rapidly in recent
years. The contract that KNVB has made for the collective exploitation of tv rights has
improved from a financial point of view. In addition Ajax has made non-recurring television
contracts with respect to the matches in the European Supercup and the World Cup for
club teams in 1995/1996. Turnover from merchandising activities has increased as a result