Tradition • Passion •...

Tradition • Passion • SuccessT r a d i t i o n • P a s s i o n • S u c c e s s

Business Report Borussia Dortmund, July 2007 – June 2008

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CONTENTS

KEY FIGURES AT A GLANCE 2

PROLOGUE 3

MANAGEMENT'S GREETING 13

REPORT OF THE SUPERVISORY BOARD 14

GOVERNING BODIES AND CORPORATE STRUCTURE 19

THE BVB SHARE 20SHARE PRICE PERFORMANCE

SHAREHOLDER STRUCTURE 22SHAREHOLDINGS BY MEMBERS OF GOVERNING BODIES

INVESTOR RELATIONS

CORPORATE GOVERNANCE REPORT 24

THE DFB CUP – BIRTH OF A BVB LEGEND 34

THE 2007/2008 SEASON 38

THE DFB CUP – EMOTION PURE 40

GROUP MANAGEMENT REPORT

BUSINESS AND FRAMEWORK CONDITIONS 44FINANCIAL YEAR 2007/2008 IN REVIEW

DEVELOPMENT OF THE MARKET AND COMPETITIVE ENVIRONMENT IN GERMAN PROFESSIONAL FOOTBALL 46GROUP STRUCTURE AND BUSINESS 49ORGANISATION OF MANAGEMENT AND CONTROL 53INTERNAL MANAGEMENT SYSTEM 56

CORPORATE STRATEGY 57

POSITION OF THE GROUP 59RESULTS OF OPERATIONS

SALES DEVELOPMENT 60Development of s ignif icant operat ing expenses

FINANCIAL CONDITION 64Analysis of capital structure / Analysis of investments / Analysis of l iquidity

NET ASSETS 65OVERALL SUMMARY OF RESULTS OF OPERATIONS, FINANCIAL CONDITION AND NET ASSETS

THE DFB CUP – MERCHANDISING LEAVING ITS (TRADE)MARK 66

COMPENSATION REPORT 70

RISK REPORT 71RISK MANAGEMENT

SPECIFIC RISKS 72Strategic r isks / Personnel r isks / Competit ive r isks / Sales r isks / Financial r isks / Risks jeopardising performance and cont inued existence

THE RISK SITUATION IN SUMMARY 74

REPORT ON EXPECTED DEVELOPMENTS 75ANTICIPATED DEVELOPMENT OF THE COMPANY

EXPECTED GENERAL ECONOMIC ENVIRONMENT

RESULTS OF OPERATIONSAntic ipated earnings development / Ant ic ipated development of revenuesAntic ipated development of s ignif icant operat ing expenses / Expected div idends

EXPECTED FINANCIAL CONDITION 76Financial planning / Capital expenditure planning / Antic ipated development of l iquidity

OPPORTUNITIES 77DEVELOPMENT FORECAST IN SUMMARY

THE DFB CUP – SPONSOR ADVERTISING 78

REPORT ON POST BALANCE SHEET DATE EVENTS 82

OTHER DISCLOSURES 83

THE DFB CUP – AN EYE ON DORTMUND… 86

CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEET 92

CONSOLIDATED INCOME STATEMENT 93

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 94

STATEMENT OF CHANGES IN NON-CURRENT ASSETS

CONSOLIDATED CASH FLOW STATEMENT 96

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 97BASIC PRINCIPLES

NOTES TO THE CONSOLIDATED BALANCE SHEET 106NOTES TO THE CONSOLIDATED INCOME STATEMENT 115OTHER DISCLOSURES 119

THE DFB CUP – WINNING OVER HEARTS 124

AUDITORS’ REPORT 128

EDITORIAL INFORMATION / FINANCIAL CALENDAR 129

EPILOGUE 130

2


PROLOGUE 3






INVESTOR RELATIONS



THE 2007/2008 SEASON 38


















EXPECTED FINANCIAL CONDITION 76Financial planning / Capital expenditure planning / Ant ic ipated development of l iquidity

















EPILOGUE 130

INHALT

K E Y F I G U R E S AT A G L A N C E

2007/2008 2006/2007EUR millions 30 June 2008 30 June 2007

Equity 80.8 86.5

Investments 4.8 16.3

Gross revenue 116.3 106.0

Operating profit/loss (EBIT) 5.4 15.6

Financial result (investment income and net interest expense) -10.1 -8.5

Net profit/loss for the period -3.9 10.1

Earnings before interest, taxes, depreciation and amortisation (EBITDA) 20.9 29.1

Cash flows from operating activities 56.6 12.1

Number of shares (in thousands) 61,425 61,425

Earnings per share (in EUR) -0.07 0.17

Borussia Dortmund GmbH & Co. KGaA

2

3

T H E D F B C U P – M O R E T H A N A C O M P E T I T I O N

A packed Olympic Stadium in Berlin during a match – albeit without players.Front cover of BVB's Spieltag match day programme, 26 February 2008.

PROLOGUE

5

Ausgabe 2 I 26. Februar 2008 I 0,50 E

S P I E L T A G

BERLIN,BERLIN,wir träumen von

BERLIN!

Die letzten Infos vor dem Anpfiff

DFB-POKALBVB – HOFFENHEIM

TSG Hoffenheim

Von der A-Klasse in die zweite Liga

Interview: Philipp Laux

„Tolle Zeiten bei Borussia!“

Historie

Der BVB und die Pokal-Endspiele

DFB-POKAL 2007/2008: ZAHLEN DATEN FAKTEN

The empty Olympic Stadium before a DFB Cup final match, under a yellow sky.Front cover of BVB's Spieltag match day programme, 18 March 2008.

Ausgabe 3 I 18. März 2008 I 0,50 E

S P I E L T A G

90MINUTENbis

BERLIN


DFB-POKALBVB – JENA

FC Carl Zeiss Jena

Verein mit einergroßen Tradition

Interview: Michael Zorc

„Chance nicht nehmen lassen!“

BVB im Halbf inale

Zu Hause hat esimmer geklappt!

DFB-POKAL 2007/2008: ZAHLEN DATEN FAKTEN

Noch

PROLOGUE

7

9

PROLOGUE

Tinga after his goal for a 3:0 victory over Jena, qualifying the team for the final in the DFB Cup.Front cover of “BORUSSIA aktuell” stadium magazine, 22 March 2008.

Next to the football Bundesliga, the DFB Cup is

the second national competition in which pro-

fessional clubs participate. And from an athlet-

ic point of view, it is the shortest path to qualifi-

cation for play at the international level. Just

five wins could be enough to send the team to

the UEFA Cup.

In the editorial section of this annual report,

Borussia Dortmund takes a look back on the

competitive cup which has time and again tak-

en the team on a journey down just that path.

Following a 19-year absence, Borussia Dort-

mund again made it to the national Cup finals in

April 2008, where it fought a close match with

FC Bayern Munich only to lose 1:2 in overtime.

However, the team's automatic 2008/2009 UEFA

Cup qualification made this defeat more palat-

able. The listed football Bundesliga team's

return to the international scene goes hand-in-

hand with sporting prestige, as well as with

lucrative financial returns that will also be

reflected in the financial statements for the

2008/2009 financial year.

10

P R O L O G U E

THE DFB CUP

11

THE DFB CUP – BIRTH OF A BVB LEGEND

Page 34

THE DFB CUP – EMOTION PURE

Page 40

THE DFB CUP – MERCHANDISING LEAVES ITS (TRADE)MARK

Page 66

THE DFB CUP – SPONSOR ADVERTISING

Page 78

THE DFB CUP – AN EYE ON BERLIN, … DORTMUND

Page 86

THE DFB CUP – . . . WINNING OVER HEARTS

Page 124

EPILOGUE

0

GREETING

proven accurate, and we are posting an operat-

ing profit for this financial year.

Together with Jürgen Klopp, our new head coach

we signed at the end of the financial year, we will

strive for athletic development that emphasises

“sustainability before speed”. Given the outlook

that our financial flexibility is going to increase

significantly in the coming years, we are opti-

mistic about our potential.

We are confident that with your patient support

and your enduring faith in us, we can achieve our

goals.

Yours faithfully,

Today the Borussia Dortmund Group presents

you this report on financial year 2007/2008 with

the knowledge that our financial restructuring

has been brought to completion.

Three and a half years after facing the very real

threat of insolvency, Borussia Dortmund has

regained a solid economic foothold and is so

sound that we no longer need to worry about

financial problems, not to mention problems that

would threaten our continued existence.

Undoubtedly, the most important step taken in

that direction last year was the repayment of our

loan from Morgan Stanley. We also successfully

extended a number of key agreements to lay an

even broader foundation for our future plans. We

are pleased that our economic forecast has

13

Hans-Joachim WatzkeManaging Director (Chairman)

Thomas TreßManaging Director

Dear Shareholders,



directors were regularly advised and monitored

by the Supervisory Board in their management

of the Company. Based on reports provided by

the management, and on enquiries thereto,

advice thereon and discussion thereof, the

Supervisory Board confirms the validity and pro-

priety of the Com pany’s management and the

effectiveness of its risk management and corpo-

rate structure as well as its profitability.

During the reporting period, the Supervisory

Board was kept informed in a timely and com-

prehensive manner through the provision of reg-

ular oral and written reports by the management

within the meaning of § 90 German Stock

Corporation Act (AktG). The reports related pri-

marily to the liquidity and financial condition,

planned investments, corporate planning (finan-

cial, investment and human resources planning)

and the risk situation and risk management of the

Company and the Group. Deviations in the

course of business from plans and objectives

were explained in detail to the Supervisory

Board, which then reviewed and discussed these

with management. The Supervisory Board

reviewed and discussed in detail transactions of

significance to the Company based on reports by

the management. Reports and discussions also

dealt with questions regarding athletic perform-

ance, which, (with the exception of the men-

tioned participation in the DFB Cup final), was

not satisfactory with a view to the team's ranking

For Borussia Dortmund GmbH & Co. KGaA, the

2007/2008 financial year was marked by three

important and pleasing factors. First of all, as had

also been the case last year, our single-entity

financial statements showed that we have once

again achieved profitability. Secondly, the

Group's (gross) financial liabilities have been

substantially reduced; the credit from Morgan

Stanley Bank International Limited arranged by

the credit agreement dated 6 June 2006 was ful-

ly repaid. The third, especially significant point

is the success of our Bundesliga team in reaching

the DFB Cup final, which at the same time quali-

fied it for one of the top European competitions

of the 2008/2009 season, the UEFA Cup, for the

first time since the 2003/2004 season.

The restructuring process, which commenced at

the turn of year 2004/2005, was therefore com-

pleted in only three years. We want to both

expand what we have achieved and to continue

on course.

WORK OF THE SUPERVISORY BOARD,MEETINGSIn the 2007/2008 financial year, the Supervisory

Board closely monitored the condition and per-

formance of the Company and the Group, exer-

cising its rights and duties under the law and the

Company's Articles of Association without

restriction. The general partner and its managing

14

R E P O R T O F T H E S U P E R V I S O R Y B O A R D

14

sons in order to have quorum, no committees

were created in view of the size of the

Supervisory Board.

The Supervisory Board dealt intensively with the

full repayment of the loan under the credit

agreement with Morgan Stanley and approved (i)

the conclusion of the new agency licensing agree-

ment between Borussia Dortmund GmbH & Co.

KGaA and SPORTFIVE GmbH & Co. KG, (ii) a

credit to be taken out by Borussia Dortmund

GmbH & Co. KGaA from Westdeutsche

Immobilienbank AG, (iii) the full repayment of

the credits from Morgan Stanley and, (iv) in con-

nection with this, the distribution of capital

reserves to goool.de Sportswear GmbH (hence-

forth: BVB Stadion Holding GmbH). Additional

resolutions of the Supervisory Board during the

reporting period essentially related to its motions

to the ordinary General Shareholders' Meeting

on 27 November 2007 and the approval of the

agreement between Borussia Dortmund GmbH

& Co. KGaA and Ballspielverein Borussia 09 e.V.

Dortmund for the leasing of the premises in SIG-

NAL IDUNA PARK for operating the “BORUS-

SEUM”. The Supervisory Board also dealt with

the accounting principles applied in the

2006/2007 financial year, with management’s

report on risk management in the 2007/2008

financial year and with the preparation of the

General Shareholders' Meeting in the previous

year.

in the Bundesliga table, which saw it at number

13 at the end of the season. The Supervisory

Board was also kept informed between its meet-

ings by means of written documentation. This

information and the subsequent discussion and

review by the Supervisory Board particularly con-

cerned the interim financial reports, i.e. the half-

year financial report as well as the quarterly finan-

cial reports, which were published for the first

time in the reporting period. Outside of meetings,

the chairman of the Supervisory Board was also

in regular contact with management and was kept

apprised of developments in the business as well

as material events and transactions as they

occurred. In the opinion of the Supervisory

Board, management fulfilled its duty to inform

completely, continuously and in a timely manner.

The Supervisory Board met four times in the

2007/2008 financial year (on 6 September 2007,

27 November 2007, 11 March 2008 and 3 June

2008). Except for Supervisory Board Member

Christian Kullmann, who took part in fewer than

half of all meetings, all Supervisory Board

Members participated in these meetings. Reso -

lutions of the Supervisory Board were adopted in

accordance with the relevant statutory provisions

and provisions of the Company's Articles of

Association. Discussions and the adoption of res-

olutions were always carried out by the entire

Supervisory Board, which is composed of six per-

sons. Since committees must consist of three per-

REPORT OF THE SUPERVISORY BOARD

1515

2008 as well as the management report for the

Company and for the Group (each including an

explanatory report on the figures in accordance

with §§ 289 (4) and 315 (4) German Commercial

Code (HGB)), which were prepared and submit-

ted within the prescribed time by management,

were audited along with the accounts in accor-

dance with statutory provisions by the appointed

auditor, BDO Westfalen-Revision GmbH Wirt-

schaftsprüfungsgesellschaft, Dortmund, and were

issued with an unconfined opinion (unein -

geschränkter Bestätigungsvermerk). Regarding

the existing early-warning risk management sys-

tem, the auditor came to the conclusion that man-

agement had carried out the measures required

under § 91 (2) AktG, particularly the establish-

ment of a monitoring system, in a suitable man-

ner, and that the monitoring system is suitable for

identifying developments which could endanger

the Company as a going concern at an early stage.

The annual financial statements, the consolidated

financial statements, the management report for

the Company and the Group including the risk

report and the corresponding auditor's reports

were provided to all members of the Supervisory

Board. They were explained in detail, discussed

and reviewed by the Supervisory Board together

with management in the auditor's presence at the

Supervisory Board's meeting held on 16 Sep -

tember 2008. During this meeting, the auditor

CORPORATE GOVERNANCEThe Supervisory Board and management of the

general partner also dealt with the issue of corpo-

rate governance in the reporting period. The

Supervisory Board also reviewed the efficiency of

its own work, particularly the frequency of its

meetings as well as their preparation and imple-

mentation. In November 2007, the Supervisory

Board and management issued a Statement of

Compliance (Entsprechenserklärung) with the

German Corporate Governance Code, taking into

account the amendments in the version dated 14

June 2007. The updated Statement of Com pliance

dated 6 June 2008, which was based on the ver-

sion of the Code published on 8 August 2008, was

adopted at the same time as the resolution con-

cerning this report. Both statements were made

permanently available through publication on the

Internet under http://eng.borussia-aktie.de. Other

details and information in this regard will be pro-

vided in a separate section of the Annual Report

(Corporate Governance Report) in accordance

with Section 3.10 of the Code.

SINGLE-ENTITY AND CONSOLIDATEDANNUAL FINANCIAL STATEMENTS2007/2008The annual financial statements of Borussia

Dortmund GmbH & Co. KGaA and the consoli-

dated annual financial statements as at 30 June

1616

1717

3. with respect to the reported actions taken, no

facts or circumstances exist that would argue

for any assessment substantially different than

that made by management.”

The auditor's report regarding the dependent

company report was also made available to the

Supervisory Board. These documents were also

discussed and reviewed together with the auditor

and management in the above-mentioned Super -

visory Board meeting. Based on the final result of

its review, the Supervisory Board raised no objec-

tion to the general partner's statement at the con-

clusion of the dependent company report. The

Supervisory Board approved and took note of the

results of the auditor's review of the dependent

Company report.

The Supervisory Board recommends that the

General Shareholders' Meeting adopt the annual

financial statements as at 30 June 2008. The

Supervisory Board also discussed and reviewed the

general partner's proposal for the appropriation of

profit taking into account the interests of limited

liability shareholders and the Company's condition

(specifically, its financing and capital structure) at

its meeting on 16 September 2008; the Supervisory

Board agreed with the management's proposal to

carry the net retained profits for the 2007/2008

financial year of EUR 1,063,842.42 forward. The

Supervisory Board also recommends that the

reported on the material results of the audit,

explained these results and, together with man-

agement, answered questions posed by the

Supervisory Board.

The Supervisory Board is in agreement with the

results of the auditor's review and, based on the

final result of its own examination, has no objec-

tions. The Supervisory Board adopted the annual

financial statements of Borussia Dortmund

GmbH & Co. KGaA and the consolidated finan-

cial statements as at 30 June 2008 at its meeting

on 16 September 2008.

Furthermore, the Supervisory Board conducted

its own independent audit of the report prepared

by the general partner pursuant to § 312 AktG

concerning relationships with affiliated enterpris-

es (dependent company report) for the 2007/2008

financial year. The dependent company report was

also reviewed by the auditor and the following

auditor's opinion was issued thereon:

“Pursuant to our duly conducted audit and evalu-

ation we hereby confirm that

1. the factual information in the report is accu-

rate;

2. with respect to the reported transactions, the

consideration paid by the Company was not

unreasonably high, or any disadvantages have

been compensated for;


actions of the general partner, Borussia Dort-

mund Geschäftsführungs-GmbH, to be ratified

(Entlastung) for the 2007/2008 financial year.

PERSONNEL MATTERSMr. Christian Kullmann, resident in Hamminkeln

and head of Corporate Communications and

Board Office at the headquarters of Evonik

Industries AG in Essen, was elected to the

Supervisory Board of Borussia Dortmund GmbH

& Co. KGaA by the General Shareholders'

Meeting on 27 November 2007 for the period

until the end of the General Shareholders'

Meeting that ratifies the actions of the 2009/2010

financial year. The number of Supervisory Board

members therefore meets the requirements of the

Articles of Association.

The Executive Committee of the Advisory Board

of Borussia Dortmund Geschäftsführungs-GmbH

reached an agreement with the managing direc-

tor, Thomas Treß, in February 2008 to extend his

managing director's appointment agreement (the

1818


term of which was originally limited until 31

December 2008) by a further three years, i.e. until

31 December 2011.

The Supervisory Board wishes to thank the man-

agement, the works council and all the employees

for their once again successful work over the past

financial year and for their exceptional efforts on

behalf of the Company. Many thanks also to the

business partners, shareholders and fans of

Borussia Dortmund for the confidence they have

shown in us.

Dortmund, 16 September 2008

The Supervisory Board

Gerd Pieper

Chairman

19

BV. BORUSSIA 09 e.V. DORTMUND

Management BoardDr. Reinhard Rauball President

Dr. Albrecht Knauf Vice President

Dr. Reinhold Lunow Treasurer

BORUSSIA DORTMUND GmbH & Co. KGaA

Supervisory BoardGerd Pieper Chairman Proprietor and Managing Director of Stadtparfümerie Pieper GmbH, Herne

Harald Heinze Deputy Chairman

Ruedi Baer Consultant, B + B Beratungs AG, Watt (Switzerland)

Othmar Freiherr von DiemarProprietor and manager of Othmar von Diemar Vermögensverwaltung + Beratung, Cologne

Bernd GeskeManaging partner of Bernd Geske Lean Communication, Meerbusch

Christian KullmannHead of the management board office and group communications of EVONIK Industries AG, Essen

BORUSSIA DORTMUND GESCHÄFTSFÜHRUNGS-GmbH

Hans-Joachim Watzke Managing Director (Chairman)

Thomas Treß Managing Director


100.00% BVB Stadionmanagement GmbH

100.00% BVB Stadion Holding GmbH(formerly: goool.de Sportswear GmbH)

100.00% Sports & Bytes GmbH

100.00% BVB Merchandising GmbH(formerly: Borussia Dortmund Beteiligungs-GmbH)

99.74% BVB Stadion GmbH (formerly: Westfalenstadion Dortmund GmbH & Co. KG)

94.90% BVB Beteiligungs GmbH

51.00% B.E.S.T. - Borussia Euro Lloyd Sports Travel GmbH

33.33% Orthomed GmbH

GOVERNING BODIES

CORPORATE STRUCTURE

GOVERNING BODIES AND CORPORATE STRUCTURE

19

Homm and which sold its BVB shares during the re-

porting period. The last notification of voting rights

to date was made on 28 September 2007, in which

our Company was informed of a remaining share-

holding of only 1,242,523 shares (2.023% of the Com-

pany's share capital). On 16 October 2007, Absolute

Capital Management Holdings Ltd. notified us by

telephone that it had finally sold all of its shares. In

contrast, the company still held 9.85% of the share

capital on 29 August 2007. As a result, the BVB share

price fell under considerable pressure; however, it

has since risen thanks to positive athletic perform-

ances. On 11 October 2007, the share price was listed

at € 1.59 and rose to € 1.78 on 22 October 2007.

However, in November 2007, the share price then

floated in a range of between € 1.70 and € 1.60. On

the day of the General Shareholders' Meeting on 27

November 2007, the share price was € 1.59. In De-

cember 2007, the share price finally ranged between

€ 1.60 and € 1.50. On 28 December 2007, the BVB

shares closed the stock exchange year at € 1.52. The

background for this renewed downward trend was

not only a lack of sporting success, but also (and to a

greater extent) the initial impacts of the subprime cri-

sis in the US, which is increasingly being felt. More-

over, second-tier stocks such as the BVB share always

suffer from share price volatility towards the end of

the year, since institutional investors in particular of-

ten purge their portfolios of these second-tier stocks

at year's end. Nonetheless, high turnovers and the

corresponding liquidity and tradability of the BVB

share remain positive highlights. The BVB shares

started the new 2008 calendar year at € 1.49 on 2 Jan-

uary 2008 and closed each trading day until 14 Jan-

Share price performance during the 2007/2008 fi-

nancial year (1 July 2007 – 30 June 2008) was influ-

enced by positive company releases, by the exit of the

major shareholder Absolute Capital Management

Holdings Ltd., which was finalized as at 16 October

2007, by the effects of the subprime crisis on the

global financial markets, which were particularly

strongly felt towards the end of 2007, and by the ath-

letic rollercoaster ride (with the DFB Cup at the

zenith and the championship at the nadir).

Borussia Dortmund GmbH & Co. KGaA’s shares

(BVB shares) started financial year 2007/2008 at

€ 1.75 and hit their peak for the reporting period on

23 July 2007, at € 2.26. This trend continued until the

beginning of the season on 10 August 2007. Positive

company releases, such as the all-time high of 50,549

season tickets sold and the successful run-up to the

season, provided a backdrop for this development.

Initial sporting setbacks in the form of a three-match

losing streak subsequently led to a modest down-

wards trend, with the share price slipping to € 1.85 by

21 August 2007. On 6 September 2007, Borussia

Dortmund GmbH & Co. KGaA announced its results

for the 2006/2007 financial year. Despite a record

profit of € 10.3 million (€ 10.1 million Group-wide),

the share price subsequently declined from € 1.95 on

that day, reaching a low of € 1.58 on 27 September

2007. The average daily turnovers during this phase

of the reporting period were considerably higher

than 250,000 shares traded. This share price per-

formance and turnover development was caused by

the exit of Absolute Capital Management Holdings

Ltd., which was founded by fund manager Florian

SHARE PRICE PERFORMANCE

20

T H E B V B S H A R E

THE BVB SHARE

21

1.00

1.20

1.40

1.60

1.80

2.00

2.20

2.40

2.7.07 1.8.07 1.9.07 1.10.07 1.11.07 1.12.07 1.1.08 1.2.08 1.3.08 1.4.08 1.5.08 1.6.08 30.6.08

EUR

O

BVB share price performance from July 2007 to June 2008

2008 after Borussia Dortmund had defeated Carl

Zeiss Jena on the day before, thus qualifying for the

DFB Cup final in Berlin on 19 April 2008. However,

profit-taking then caused the share price to fluctuate

continuously between € 1.55 and € 1.59. This trend

also marked the fourth quarter. Following the DFB

Cup loss against FC Bayern München on 19 April

2008 and the subsequent apparent solidification of a

place in the double-digit region of the championship

table, the price of BVB shares again experienced a

downward trend, slumping to € 1.39 on 30 April

2008. Once it was confirmed that FC Bayern

München won the championship and that the Mu-

nich-based team was assured a slot in the UEFA

Champions League, Borussia Dortmund also quali-

fied to play in the UEFA Cup since it had been a

DFB Cup finalist. For this reason, BVB shares re-

covered noticeably, quoting at € 1.67 on 26 May

2008. On 30 June 2008, the BVB shares closed the

2007/2008 financial year at € 1.55.

uary 2008 at exactly the same price. However, down-

wards market trends increasingly eroded BVB's share

price in the subsequent period. This occurred mainly

as a result of increasing numbers of negative reports

in relation to the US subprime crisis and its impacts

on the national and European credit and banking

landscape. On 22 January 2008, the share price fell to

€ 1.36, and bottomed out at € 1.35 on 7 February

2008. The share price then trended sideways until the

end of February within a range of between € 1.35 and

€ 1.42. It rebounded significantly after Borussia Dort-

mund qualified for the DFB Cup semi-final by beat-

ing TSG Hoffenheim 1899 on 26 February 2008 and

once the second-division club Carl Zeiss Jena

emerged on 2 March 2008 as Borussia's semi-final

opponent: BVB shares were € 1,58 on 6 March 2008

and were named "Chart of the Week" on 12 March

2008 by "Der Aktionär" magazine (12/08) following

this comeback and the breakthrough of the 38-day

line. The share price reached € 1.80 on 19 March

22

• Morgan Stanley International Ltd.: 16.25%

• Blue Bay Asset Management plc.: 14.99%

• Bernd Geske: 7.30%

• BV. Borussia 09 e.V. Dortmund: 7.24%

• Free float: 54.22%

At the balance sheet date 30 June 2008, Borussia

Dortmund GmbH & Co. KGaA's share capital

amounts to € 61,425,000, divided into the same num-

ber of no-par value shares. Based on the notifications

we have received, the shareholder structure of Borus-

sia Dortmund GmbH & Co. KGaA as of 30 June 2008

is as follows:

SHAREHOLDER STRUCTURE

of management and the Supervisory Board consti-

tute 4,492,310 shares and therefore more than 1% of

the shares issued by Borussia Dortmund GmbH &

Co. KGaA.

As at 30 June 2008, one member of management

held 4,545 shares in our Company. As at the same

date, the members of the Supervisory Board held a

total of 4,487,765 shares. The (total) shareholdings

SHAREHOLDINGS BY MEMBERS OF GOVERNING BODIES

ing, long-term rapport with market participants and to

provide a true fair view of the Company.

Communication online is our central medium, offer-

ing the best conditions for equal opportunities and up-

to-date information. Therefore, Borussia Dortmund

publishes all annual and interim financial reports for

download at http://eng.borussia-aktie.de. Mandatory

disclosures and announcements under capital market

law, such as ad hoc disclosures, corporate news, di-

rectors' dealings and/or advance notice are published

here in a timely manner. At the same time, our serv-

ice provider DGAP ensures that these notices are

The aim of our Company’s Investor Relations is to ob-

tain an appropriate valuation of the BVB share on the

capital market. This is founded on continuous and

open communication with all the market players. In-

vestor Relations is thus the ideal interface between in-

stitutional investors, financial analysts and private in-

vestors. The Company seeks to strengthen investor

and public confidence through the timely and trans-

parent communication of its financial results, busi-

ness transactions and strategy, as well as risks and op-

portunities. We are committed to communications

principles such as openness, stability, equality and

credibility, thus making it possible to develop a trust-

INVESTOR RELATIONS

23

THE BVB SHARE

General & Entry Standard Conference in Frankfurt

am Main on 30 April 2008. Following the Company

presentation, the management was available for one-

on-one meetings with analysts, private investors and

representatives of institutional investors, many of

whom took advantage of this opportunity.

Finally, we successfully increased our independent cap-

ital market coverage during the reporting period.

Bankhaus Lampe KG, Düsseldorf, launched its re-

search coverage, publishing a study of the BVB shares

on 12 March 2008 with a "Hold" recommendation.

Prior to this, GSC Research GmbH, also based in Düs-

seldorf, published a research report on 30 January 2008.

This report also contained a "Hold" recommendation. In

its latest update, dated 23 June 2008, Bankhaus Lampe

again issued a "Hold" recommendation. More detailed

information can be found under "Capital markets view"

at our website http://eng.borussia-aktie.de.

BVB shares are thus enjoying continuous and strong

capital market coverage.

distributed throughout Europe. Further detailed in-

formation, such as investor presentations or in-depth

information on implementing the recommendations

of the German Corporate Governance Code, are

made available on our website. All information is

available in German and in English.

Our primary goal for the 2007/2008 financial year was

to improve our communication with the capital mar-

kets through investor events, such as roadshows, and

to expand our research coverage. We were successful

in attaining both goals during the reporting period:

Our Company began collaborating with HSBC

Trinkhaus Burkhardt AG as a designated sponsor on 1

October 2007. In addition to providing "traditional"

market making services, our designated sponsor ac-

tively supported us in marketing the BVB share, for ex-

ample by organising investor meetings in Düsseldorf

in September and October 2007 and in Frankfurt am

Main in April 2008. In addition, Managing Director

and Chairman Hans-Joachim Watzke and CFO

Thomas Treß represented Borussia Dortmund at the

0

200000

400000

600000

800000

1000000

1200000

1400000

1600000

1800000

2000000

2.7.07 1.8.07 1.9.07 1.10.07 1.11.07 1.12.07 1.1.08 1.2.08 1.3.08 1.4.08 1.5.08 1.6.08 30.6.08

Turnover from July 2007 to June 2008

due regard to shareholders' interests, openness,

and transparent corporate communication. The

management of Borussia Dortmund Geschäfts-

führungs-GmbH as the general partner of Borus-

sia Dortmund GmbH & Co. KGaA (the "Com-

pany") and the Supervisory Board of our Company

are guided by these principles.

Having corporate governance that is clearly struc-

tured and strictly followed is very important at

Borussia Dortmund. Corporate Governance stands

for transparent and responsible corporate man-

agement and supervision aimed at achieving long-

term shareholder value. Key aspects of good cor-

porate governance include efficient co-operation

between management and the Supervisory Board,

GENERAL INFORMATION ON CORPORATE GOVERNANCEAT BORUSSIA DORTMUND GmbH & Co. KGaA

24

to boost the confidence of international and na-

tional investors, customers, employees and the gen-

eral public in the management and supervision of

German listed companies.

Many of the Code's recommendations ("should"

provisions) are tailored exclusively to stock corpo-

rations and are at most applicable by analogy to

partnerships limited by shares (Kommanditge-

sellschaften auf Aktien, "KGaA"), i.e. to our Com-

pany.

A KGaA is a hybrid corporate form combining el-

ements of a German stock corporation (Aktienge-

sellschaft) and a limited partnership (Kommandit-

gesellschaft). It is a separate legal entity whose

share capital is divided into shares which are held

by at least one shareholder (the general partner)

that has unlimited liability as against creditors of the

Company and by limited liability shareholders

(Kommanditaktionäre) that are not personally li-

able for the debts of the Company (§ 278 (1) AktG).

Section 161 of the German Stock Corporation Act

(Aktiengesetz "AktG") requires the management

board and supervisory board of any listed com-

pany to issue an annual statement as to whether and

to what extent recommendations by the "Govern-

ment Commission for the German Corporate Gov-

ernance Code" (Regierungskommission Deutscher

Corporate Governance Kodex) contained in the

German Corporate Governance Code (the "Code")

as published in the official section of the Elec-

tronic Federal Gazette (elektronischer Bunde-

sanzeiger) were followed in the past and are being

or will be followed now or in the future.

As a rule, the Code is reviewed once annually and

amended as required. It contains basic statutory

provisions on the management and supervision of

German listed companies as well as internationally

and nationally recognised standards for good and

responsible corporate governance. The Code aims

to make the German system of corporate gover-

nance transparent and understandable in an effort

C O R P O R AT E G O V E R N A N C E R E P O R T

a Statement of Compliance (Entsprechenser-

klärung) pursuant to § 161 AktG, taking into ac-

count the organisational distinctions of the legal

form of a KGaA and their expression in the Articles

of Association. The Statement of Compliance must

be made permanently available to the shareholders.

This is done by publication on our Company's In-

vestor Relations website (http://eng.borussia-aktie.de,

under the heading "Corporate Governance [CG]").

The Statements of Compliance (including explana-

tions of any deviations from the Code's recom-

mendations) provided in November 2007 and Sep-

tember 2008 are reproduced in the annex to this

Corporate Governance Report.

This Corporate Governance Report herewith sub-

mitted by our Company will be published in the An-

nual Report for the 2007/2008 financial year and on

our website at http://eng.borussia-aktie.de under

the heading "Publications".

TransparencyOur Company informs the limited liability share-

holders and shareholder associations, financial an-

alysts and the interested public regularly as to the

Company's condition and any material changes in

its business. In particular, the ad hoc notices, cor-

porate news and directors' dealings disclosures we

receive and the current version of the Articles of

Association and the financial calendar are all pub-

lished on our website. The Annual Document re-

quired by § 10 German Securities Prospectus Act

(Wertpapierprospektgesetz, “WpPG”), which is

also available on the website http://eng.borussia-

aktie.de under "Corporate Governance", provides

an overview of the Company's key publications

during the 2007/2008 financial year.

The key differences between a KGaA and a German

stock corporation can be characterised as follows:

• Borussia Dortmund GmbH & Co. KGaA has no

Management Board. Instead, the general part-

ner, Borussia Dortmund Geschäftsführungs-

GmbH, is solely responsible for its manage-

ment and representation. This company, in

turn, is represented by one or more managing

directors; Ballspielverein Borussia 09 e.V. Dort-

mund is the sole shareholder of this company.

• The rights and duties of the Supervisory Board

of the KGaA elected by the General Sharehold-

ers' Meeting are limited. Specifically, it has no

authority with respect to matters involving per-

sonnel, i.e., no authority to appoint and dismiss

managing directors at Borussia Dortmund

Geschäftsführungs-GmbH or to stipulate the

terms of their contracts. Nor is the Supervisory

Board authorised to adopt internal rules of pro-

cedure for the general partner or any list of trans-

actions requiring its consent. Rather, such rights

and duties are vested in the governing bodies of

Borussia Dortmund Geschäftsführungs-GmbH,

namely its Advisory Board and the Executive

Committee created by the Advisory Board.

• Additional distinctions exist with respect to the

General Shareholders' Meeting of the KGaA,

which are primarily controlled by §§ 285 and

286 (1) AktG and the Articles of Association of

our Company.

Consequently, the management of the general part-

ner and the Supervisory Board of Borussia Dort-

mund GmbH & Co. KGaA are required to provide

CORPORATE GOVERNANCE REPORT

25

Management compensationCompensation for members of management is

not stipulated by the Supervisory Board of our

Company but rather by the Executive Committee

of the general partner’s Advisory Board. Manage-

ment compensation comprises two components: a

fixed amount and a variable component. The fixed

compensation component is stipulated by con-

tract and is paid out in twelve equal monthly in-

stalments. The variable compensation component

is based on the performance of the business and

is granted as a bonus contingent on net income for

the year before taxes and managing directors'

compensation. Any additional non-cash or ancil-

lary benefits granted primarily include insurance

benefits at standard market conditions and the

provision of a company car. There are no stock op-

tion plans or similar incentive plans. The com-

pensation components provided are reasonable

in and of themselves and overall. Compensation

benefits paid to members of management are set

out in the notes to the annual and consolidated fi-

nancial statements in the aggregate and broken

down by individual.

Supervisory Board compensationPursuant to § 13 (1) of the Articles of Association,

members of the Supervisory Board receive only a

fixed compensation, which is set at a compara-

The financial calendar contains key Company events

and can also be viewed on the website

http://eng.borussia-aktie.de under "Financial Cal-

endar".

Interested parties were able to watch the press

conference on financial statements in real time via

live streaming for the first time in the last financial

year. Borussia Dortmund GmbH & Co. KGaA's or-

dinary General Shareholders' Meeting will be held

on 25 November 2008 in Dortmund. The interim

financial statements are expected to be published

within the timeframes recommended in the Code.

Our Company will provide further details via pre-

liminary announcements. The consolidated finan-

cial statements and the interim financial reports are

prepared in accordance with IFRS accounting prin-

ciples. The annual financial statements of Borussia

Dortmund GmbH & Co. KGaA were and will con-

tinue to be prepared in accordance with the provi-

sions of the German Commercial Code ("HGB").

Following the Code's suggestion, we have pub-

lished and will continue to publish information in

English on our website. Other means of commu-

nicating with market participants include the

newsletter, "Borussia Invest" and the publication of

analysts' recommendations and research studies

on our website at http://eng.borussia-aktie.de under

the heading "Capital markets view".

26


Disclosures relating to the ownershipof shares in the Company by manage-ment or the Supervisory BoardZum 30.06.2008 hielt ein Mitglied der Geschäfts-

führung 4.545 Stückaktien unserer Gesellschaft.

Die Mitglieder des Aufsichtsrates besaßen zum

gleichen Zeitpunkt insgesamt 4.487.765 Stückak-

tien. Der (Gesamt-)Aktienbesitz von Mitgliedern

der Geschäftsführung und des Aufsichtsrats ergibt

in Summe 4.492.310 und somit mehr als 1 % der

von der Borussia Dortmund GmbH & Co. KGaA

ausgegebenen Aktien.

tively low amount of EUR 7,000 annually; the

chairman receives twice this amount and the

deputy chairman receives one and a half times

this amount. Supervisory Board members' com-

pensation is set out in the notes to the consolidated

financial statements. In the interest of simplicity

and in view of the information presented above,

this information is provided only as an aggregated

amount rather than being broken down by indi-

vidual. In the 2007/2008 financial year, the Com-

pany did not pay members of the Supervisory

Board any additional compensation or grant them

any additional benefits.

Dortmund, September 2008

On behalf of the Supervisory Board On behalf of Borussia Dortmund Geschäftsführungs-GmbH

Gerd Pieper Hans-Joachim Watzke Thomas Treß

27

the purview of the Executive Committee of Borussia

Dortmund Geschäftsführungs-GmbH. Since January

2006, the management has comprised Hans-Joachim

Watzke (managing director/chairman) and Thomas

Treß (managing director). As their areas of responsi-

bility have been adequately defined in their respective

contracts and the managing directors otherwise exer-

cise their statutory powers and powers under the Ar-

ticles of Association in close co-operation, the com-

petent governing bodies of Borussia Dortmund

Geschäftsführungs-GmbH have not in the past re-

garded it as necessary to also enact separate rules of

procedure for management.

As to Sections 4.2.2 (1), 4.2.3 (3, 6), 4.2.5 (2)

sentence 2 and 7.1.3: Section 7 of Borussia Dort-

mund GmbH & Co. KGaA's Articles of Association

provides that the general partner is entitled to reim-

bursement of personnel costs and the cost of materi-

als incurred in connection with managing the Com-

pany, plus compensation equivalent to 3 % of any

otherwise accruing net income for the year of the

Company. Compensation and the compensation sys-

tem for managing directors of Borussia Dortmund

Geschäftsführungs-GmbH are otherwise determined

by its Executive Committee (deviation from the pow-

ers of the Supervisory Board stipulated under Section

4.2.2 (1) due to the Company's legal form). Com-

pensation for the managing directors consisting of

components that are long-term or risk-based in na-

The management of the general partner (Borussia

Dortmund Geschäftsführungs-GmbH) and the Su-

pervisory Board of Borussia Dortmund GmbH & Co.

KGaA hereby state in accordance with § 161 AktG that

since the last Statement of Compliance issued in No-

vember 2006, Borussia Dortmund & Co. KGaA has

complied with the recommendations of the German

Corporate Governance Code ("DCGK") dated 12 June

2006 up until publication of the new version of the

DCGK in the electronic Federal Gazette on 20 July

2007, and has also complied with the recommenda-

tions of the DCGK dated 14 June 2007 from the time

of its publication in the electronic Federal Gazette on

20 July 2007, and the recommendations in the

amended version dated 14 June 2007 will be complied

with in the future; excepted herefrom are the follow-

ing deviations, which in part are due to organisational

distinctions specific to the legal form of the KGaA and

their expression in the Articles of Association:

As to Section 3.8 (2): The D&O insurance does not

provide for any deductible. Based on our under-

standing, such an agreement would not be suitable as

an incentive, nor would it strengthen the sense of re-

sponsibility with which members of corporate bodies

conduct their duties and functions.

As to Section 4.2.1 sentence 2: The Supervisory

Board of Borussia Dortmund GmbH & Co. KGaA has

no authority with respect to personnel matters; this is

I. STATEMENT OF COMPLIANCE BY THE MANAGEMENT AND SUPERVISORYBOARD OF BORUSSIA DORTMUND GMBH & CO. KGAA UNDER § 161 AKTG (NOVEMBER 2007)

28

the long term (in accordance with Section 5.1.2 (1)

sentence 2). The Executive Committee of the Advi-

sory Board of Borussia Dortmund Geschäftsführungs-

GmbH reached an agreement with the managing di-

rector and chairman, Hans-Joachim Watzke, in June

2007, which was earlier than required, to extend his

managing director's agreement (the term of which

was originally limited until 31 December 2008) by a

further three years, i.e. until 31 December 2011. This

was in order to show continuity in terms of who would

head up management (in deviation from Section 5.1.2

(2) sentence 2). The Executive Committee has and

will have in the future the discretion to decide in the

case of pending (re)appointments of managing di-

rectors on the age limit for managing directors of the

general partner, without this generally needing to be

stipulated (in deviation from Section 5.1.2 (2) sen-

tence 3).

As to Sections 5.2 (2), 5.3.1 sentence 1, 5.3.2

and 5.3.3: Committees, specifically an audit com-

mittee, were not and are not being established by the

Supervisory Board, because it has only 6 members,

and committees would have to consist of 3 members

in order to have quorum.

The Company intends to retain its existing practice in

this regard, in other words, all pending matters will be

dealt with by the full Supervisory Board. It is for the

same reason that the Supervisory Board does not

have a nomination committee as is now recom-

mended by the Code. In any case, if a nomination

committee is established, the Code requires that it

comprise shareholder representatives only; however,

that is already the case with regard to the Supervisory

Board.

ture, such as stock options, was not and is not being

provided, nor are pension commitments, and thus no

further disclosures or explanations primarily relating

to these issues were or will be made (deviation from

Section 4.2.3 (3, 6), Section 4.2.5 (2) sentence 2 and

Section 7.1.3).

As to Section 4.3.4 sentence 3: Material transac-

tions between the general partner and certain related

parties on the one hand, and the Company on the

other, within the meaning of §§ 89, 112 in conjunction

with § 278 (3), 283 No. 5 AktG (e.g., loans) require the

involvement of the Supervisory Board. In this re-

spect, the recommendation was and is being followed.

The Supervisory Board is not otherwise authorised to

adopt a list of transactions requiring its consent for the

general partner or its managing directors.

As to Section 4.3.5: Because the Supervisory Board

lacks authority in matters involving personnel, the

Advisory Board of Borussia Dortmund Geschäfts-

führungs-GmbH is responsible for approving any side

activities of the managing directors of the general

partner. Subject to this proviso, the recommenda-

tions have been and are being complied with mutatis

mutandis.

As to Section 5.1.2: These Code recommendations

directed at the supervisory boards of stock corpora-

tions are at most applicable by analogy to our Com-

pany, whose Supervisory Board does not have any

authority with respect to personnel matters. The man-

aging directors and the Executive Committee of

Borussia Dortmund Geschäftsführungs-GmbH are

responsible for making successor arrangements over


29

30

man receives one and a half times this amount. It was

and is considered sufficient to provide the informa-

tion on the Supervisory Board's compensation only as

an aggregate figure in the Corporate Governance

Report as well as in the notes to the consolidated fi-

nancial statements.

As to Section 5.5.3 sentence 1: The recommenda-

tion that the Supervisory Board inform the General

Shareholders' Meeting in its report of any conflicts of

interest that have arisen and how these were or are

being handled has not been and is not being followed.

The principle of confidentiality of discussions within

the Supervisory Board (see, § 116 sentence 2 AktG

and Section 3.5 (1) sentence 2 of the Code) is ac-

corded priority over this.

As to Section 7.1.2 sentence 3: The interim reports

were and will be published within a reasonable pe-

riod, which may in the specific case exceed 45 days af-

ter the end of the reporting period.

As to Section 5.4.1 sentence 2: There has been no

set age limit for Supervisory Board members to date,

nor will there be any in the future. The Supervisory

Board feels that such a limitation is not justified as

against other criteria for proposed candidates for the

election of Supervisory Board members.

As to Section 5.4.3 sentence 3: Proposals for can-

didates for the chair of the Supervisory Board have

not been made public in the past, nor will they be

made public in the future, because the Supervisory

Board feels that the individual election of its members

is sufficient and does not feel that a vote at the Gen-

eral Shareholders' Meeting for or against a given can-

didate is practicable in view of his/her position on the

Supervisory Board.

As to Section 5.4.7 (2, 3): Pursuant to § 13 (1) of

the Articles of Association, the members of the Su-

pervisory Board receive only a comparatively low

fixed annual compensation of EUR 7,000; the chair-

man receives twice this amount and the deputy chair-

Dortmund, November 2007




31

Watzke (managing director/chairman) and Thomas

Treß (managing director). As their areas of responsi-

bility have been adequately defined in their respective

contracts and the managing directors otherwise exer-

cise their statutory powers and powers under the Ar-

ticles of Association in close co-operation, the com-

petent governing bodies of Borussia Dortmund

Geschäftsführungs-GmbH do not regard it and have

not in the past regarded it as necessary to also enact

separate rules of procedure for management.

As to Sections 4.2.2 (1), 4.2.3 (3, 6) 4.2.5 (2) sen-

tence 2 and 7.1.3: Section 7 of Borussia Dortmund

GmbH & Co. KGaA's Articles of Association pro-

vides that the general partner is entitled to reim-

bursement of personnel costs and the cost of materi-

als incurred in connection with managing the

Company, plus compensation equivalent to 3 % of any

otherwise accruing net income for the year of the

Company. Compensation and the compensation sys-

tem for managing directors of Borussia Dortmund

Geschäftsführungs-GmbH have been and are other-

wise determined and regularly reviewed by its Exec-

utive Committee. This has previously been the case

for advising (deviation from the powers of the Su-

pervisory Board stipulated under Section 4.2.2 (1)

due to the Company's legal form). Compensation for

the managing directors consisting of components that

are long-term or risk-based in nature, such as stock

options, was not and is not being provided, nor are

pension commitments, and thus no further disclo-

sures or explanations primarily relating to these issues

were or will be made (deviation from Section 4.2.3 (3,

6), Section 4.2.5 (2) sentence 2 and Section 7.1.3).

The management of the general partner (Borussia

Dortmund Geschäftsführungs-GmbH) and the Su-

pervisory Board of Borussia Dortmund GmbH & Co.

KGaA hereby state in accordance with § 161 AktG that

since the last Statement of Compliance issued in No-

vember 2007, Borussia Dortmund & Co. KGaA has

complied with the recommendations of the German

Corporate Governance Code (the "Code") dated 14

June 2007 up until publication of the new version of

the Code in the electronic Federal Gazette on 8 Au-

gust 2008, and has also complied with the recom-

mendations of the Code dated 6 June 2008 from the

time of its publication in the electronic Federal

Gazette on 8 August 2008, and the recommendations

in the amended version dated 6 June 2008 will be

complied with in the future; excepted herefrom are

the following deviations which in part are due to or-

ganisational distinctions specific to the legal form of

the KGaA and their expression in the Articles of As-

sociation of our Company:

As to Section 3.8 (2): The D&O insurance does not

provide for any deductible and no modification of this

provision is planned. Based on our understanding,

such an agreement would not be suitable as an incen-

tive, nor would it strengthen the sense of responsibil-

ity with which members of corporate bodies conduct

their duties and functions.

As to Section 4.2.1 sentence 2: The Supervisory

Board of Borussia Dortmund GmbH & Co. KGaA has

no authority with respect to personnel matters; this is

the purview of the Executive Committee of Borussia

Dortmund Geschäftsführungs-GmbH. Since January

2006, the management has comprised Hans-Joachim

II. STATEMENT OF COMPLIANCE BY THE MANAGEMENT AND SUPERVISORYBOARD OF BORUSSIA DORTMUND GMBH & CO. KGAA UNDER § 161 AKTG (16 SEPTEMBER 2008)

32

matters, the managing directors and the Executive

Committee of Borussia Dortmund Geschäftsführungs-

GmbH are responsible for making successor arrange-

ments over the long term. Subject to this proviso, the

recommendations have been and are being complied

with mutatis mutandis.

As to Section 5.1.2 (2) sentence 3: The Executive

Committee of Borussia Dortmund Geschäftsführungs-

GmbH has and will have in the future the discretion

to decide in the case of pending (re)appointments of

managing directors on the age limit for managing di-

rectors of the general partner; without this generally

needing to be stipulated.

As to Sections 5.2 (2), 5.3.1 sentence 1, 5.3.2 and

5.3.3: Committees, specifically an audit committee,

were not and are not being established by the Super-

visory Board, because it has only 6 members, and

committees would have to consist of 3 members in or-

der to have quorum. The Company intends to retain

its existing practice in this regard, in other words, all

pending matters will be dealt with by the full Super-

visory Board. It is for the same reason that the Super-

visory Board does not have a nomination committee as

is now recommended by the Code. In any case, if a

nomination committee is established, the Code re-

quires that it comprise shareholder representatives

only; however, that is already the case with regard to

the Supervisory Board.

As to Section 5.4.1 sentence 2: There has been no

set age limit for Supervisory Board members to date,

nor will there be any in the future. The Supervisory

Board feels that such a limitation is not justified as

against other criteria for proposed candidates for the

election of Supervisory Board members.

As to Section 4.2.3 (4) sentences 1, 2 and 5: The

new recommendations concerning compliance with

severance pay caps (Abfindungs-Caps) when con-

cluding management board employment agreements

for cases of an early termination of employment on the

management board without cause or as a result of a

change of control that were introduced in the new ver-

sion of the Code on 8 August 2008 are intended for su-

pervisory boards of stock corporations. For Borussia

Dortmund GmbH & Co. KGaA, whose Supervisory

Board does not have any authority with respect to

personnel matters, the recommendations can be ap-

plied by analogy to apply to the Executive Committee

of Borussia Dortmund Geschäftsführungs-GmbH.

As to Section 4.3.4 sentence 3: Material transac-

tions between the general partner and certain related

parties on the one hand, and the Company on the

other, within the meaning of §§ 89, 112 in conjunction

with §§ 278 (3), 283 No. 5 AktG (e.g., loans) require

the involvement of the Supervisory Board. In this re-

spect, the recommendation was and is being followed.

The Supervisory Board is not otherwise authorised to

adopt a list of transactions requiring its consent for the

general partner or its managing directors.

As to Section 4.3.5: Because the Supervisory Board

lacks authority in matters involving personnel, the Ex-

ecutive Committee of Borussia Dortmund Geschäfts-

führungs-GmbH is responsible for approving any side

activities of the managing directors of the general

partner. Subject to this proviso, the recommendations

have been and are being complied with mutatis mu-

tandis.

As to Section 5.1.2 (1) sentence 2: As the Supervi-

sory Board has no authority with respect to personnel


33

dation that the Supervisory Board inform the General

Shareholders' Meeting in its report of any conflicts of

interest that have arisen and how these were or are

being handled. The principle of confidentiality of dis-

cussions within the Supervisory Board (see, § 116

sentence 2 AktG and Section 3.5 (1) sentence 2 of the

Code) has been and is regularly accorded priority

over this.

As to Section 7.1.2 sentence 2: This new recom-

mendation, which appeared in the new edition of the

Code published on 8 August 2008, is not being fol-

lowed, as the goal of management publishing interim

financial reports immediately after publication is be-

ing given priority over the Code's recommendation

that interim financial reports be discussed by the Su-

pervisory Board together with management before

publication. Otherwise, these financial reports are dis-

cussed and reviewed by the Supervisory Board.

As to Section 7.1.2 sentence 4: Interim reports

were and will be published within a reasonable period,

which may in the specific case exceed 45 days after the

end of the reporting period.

As to Section 5.4.3 sentence 3: Proposals for can-

didates for the chair of the Supervisory Board have not

been made public in the past, nor will they be made

public in the future, because the Supervisory Board

feels that the individual election of its members is

sufficient and does not feel that a vote at the General

Shareholders' Meeting for or against a given candidate

is practicable in view of his/her position on the Su-

pervisory Board.

As to Sections 5.4.6 (2) sentence 1 and (3) sen-

tence 1: Pursuant to § 13 (1) of the Articles of Asso-

ciation, the members of the Supervisory Board re-

ceive only a comparatively low fixed annual

compensation of EUR 7,000; the chairman receives

twice this amount and the deputy chairman receives

one and a half times this amount. It was and is con-

sidered sufficient to provide the information on the Su-

pervisory Board's compensation only as an aggregate

figure in the Corporate Governance Report as well as

in the notes to the consolidated financial statements.

As to Section 5.5.3 sentence 1: It remained and will

remain possible to elect not to follow the recommen-

Dortmund, 16 September 2008



34

T H E D F B C U P – B I R T H O F A B V B L E G E N D

35

THE DFB CUP

24 June 1989: Norbert Dickel celebrates the first of two goals he scoredduring the DFB Cup final match against Werder Bremen. BVB wins 4:1.

36

championship wins in 1956, 1957, and 1963. All

the same, BVB missed its chance at twin champi-

onship and Cup victories in summer 1963, losing

3:0 against Hamburger SV at the Cup final.

After four vain attempts in 1975, 1980, 1983 and

1986, Borussia Dortmund fought its way back

The DFB Cup has a special place in Borussia

Dortmund's history. In the 1965/1966 season,

this trophy paved the way for the first ever victo-

ry by a German football team in a European club

competition: On 5 May 1966, the DFB Cup win-

ners BVB celebrated a 2:1 overtime victory at the

European Cup Winner's Cup at Hampden Park in

Glasgow, thus crowning the second “golden

decade” in the club's history.

The first “golden decade” also saw the team par-

ticipate in DFB Cup finals following German

T H E D F B C U P – B I R T H O F A B V B L E G E N D

German Federal PresidentHeinrich Lübke presents teamcaptain Alfred Schmidt withthe trophy (22 May 1965).

A crowd of 250,000 give ahero's welcome to BorussiaDortmund, the 1989 DFBCup champions.

The triumphant champions: BV. Borussia 09 e.V. Dortmund,the winner of the 1965 DFB Cup.

There's no telling what positive benefits will

arise from the team's qualification for the 2008

DFB Cup finals. At any rate, the euphoria and

excitement are reminiscent of 1989.

into the DFB Cup finals on 24 June 1989. Werder

Bremen was their opponent and the clear

favourite in this final match. Yet the Borussia

Dortmund squad rose above expectations to

claim a 4:1 win, with Norbert Dickel scoring two

goals and Frank Mill and Michael Lusch each

scoring once.

The club's first title victory in 23 years woke a

“sleeping giant”, ringing in the team's third

“golden decade”. Fuelled by its Cup victory,

Borussia Dortmund escaped the lower regions of

the Bundesliga table. Three years later, in 1992,

the team took second place in the German cham-

pionship; 12 months later, it made it to the UEFA

Cup final match. In 1995 and 1996, it became the

German champion. The team's crowning achieve-

ment came a year later, as it became the first

German football club to win the UEFA Champions

League and then the Intercontinental Cup.

THE DFB CUP

The day before, Michael Zorcholds the Cup high for all tosee in Berlin. The trophy ismade of fire-gilt sterling silver.Before 1991, it was 47 cm talland weighed 12 and a halfpounds.

Friedensplatz square bursts at the seams the day after the team's 4:1 Cup final victory against Werder Bremen (25 June 1989).

37

form against the best clubs and the relegation teams,

it failed to pick up points against teams in the league's

“grey zone”.

The stats are noteworthy. BVB scored six points

against last year's champion, VfB Stuttgart, and

turned out its best away performance in a 2:1 match

at Gottlieb-Daimler-Stadium. The team's 3:2 match

at SIGNAL IDUNA PARK was also tremendous, es-

pecially given the fact that the line-ups for that match

did not bode well for black and yellow.

Borussia Dortmund won two out of three matches in

the Bundesliga and in the DFB Cup against Werder

Bremen, although the team's Bundesliga match de-

feat in Bremen was ushered in by a bad call on the

part of a referee. Both in their league home game

(0:0) and in the Cup final (1:2 in overtime), Borussia

also came closer to victory than favourite Bayern

Munich. And finally, Bayer Leverkusen, a team that

was long one of the top in the league, also picked up

only one point out of a possible six against BVB.

Borussia Dortmund also held up its own against the

five teams in the relegation competition at the end of

The 2007/2008 Bundesliga season will not be re-

membered fondly in the history of Borussia Dort-

mund. 13th place is far short of the expectations raised

in the beginning of the season.

However, there was still some cause for joy. Although

BVB had not had much of a presence at the DFB

Cup since the last time it claimed the championship

in 1989, the team turned out brilliant performances

this year, as it defeated Magdeburg, Frankfurt, Bre-

men, Hoffenheim and Jena to make it to the April

2008 final in Berlin.

Despite its heartbreaking loss to FC Bayern Munich

at the final, the team qualified to compete interna-

tionally. The reason for this is that Bayern Munich,

which also won the German championship, has se-

cured a spot in the Champions League, meaning

that the opponent they defeated at the DFB final

qualifies for the UEFA Cup. After long years of with-

drawal, Dortmund again looks forward to taking part

in international matches. “Europe, here we come!”

Yet on the other hand, BVB's Bundesliga play was

more mixed: Although Borussia Dortmund was in top

ONLY 13TH IN THE BUNDESLIGA – BUT DFB CUP PUTS BVB BACK ON THE EUROPEAN SCENE

Borussia Dortmund

38

S P O R T I N G D E V E L O P M E N T

THE 2007/2008 SEASON

39

This is one of the main problems to be resolved by

Jürgen Klopp, the club's popular new coach and

great white hope. The sale of nearly 50,000 season

tickets again for 2008/2009 is proof that the fans are

prepared to follow BVB along this new path.

the season. In the matches against Rostock, Duis-

burg, Nuremberg, Bielefeld and Cottbus, the team

gained 18 out of a possible 30 points – an average of

1.8 points per game. To place this in perspective,

even though it ended the season nine spots higher on

the table than BVB, Hamburger SV fared similarly.

Borussia's tendency to generally play well and score

high only against the teams in the top and bottom

thirds of the table was one of the key issues dis-

cussed in the team's post-season analysis.

It was the team's performance against clubs pre-

sumed in the run-up to the season to be in the “grey

zone” that put Borussia Dortmund in the lower half

of the Bundesliga table for the first season in eight

years. Borussia only gained four out of a possible 30

points on the table in their matches against Wolfs-

burg, Hanover, Berlin, Karlsruhe and Frankfurt. All

too often, there was a lack of consistency in the team

of coach Thomas Doll, who left BVB at the end of the

season. And all too seldom did the team show the will

to triumph in less prestigious matches.

Coach Jürgen Klopp.

40

T H E D F B C U P – E M O T I O N P U R E

18 March 2008: The Borussia Dortmund team celebrates its qualificationfor the final after defeating Carl Zeiss Jena 3:0.

41

THE DFB CUP

42

On 19 April 2008, 50,000 BVB supporters trav-

elled to Berlin to be there live for the final,

although only 22,000 of them were able to get

advance sale tickets. Ultimately, some 30,000

managed to get their hands on one of the covet-

ed tickets for the DFB Cup final – the remaining

20,000 watched the final on the big screens at

Brandenburg Gate or along Ku'damm boulevard,

once again proving to be excellent ambassadors

for their club and their city.

Even sociologists are scratching their heads:

Borussia Dortmund's fan base behaves in a way

that resembles a mass movement. A “distinct

sense of community” is often cited as a reason

for this urge to travel.

Whether for the crucial 1986 relegation match in

Düsseldorf, which decided the fate of the team in

the league, or for the 1989 and 2008 DFB Cup

finals: Tens of thousands of fans travelled with

their team.

T H E D F B C U P – E M O T I O N P U R E

Even before the semi-final, BVB fans are getting excited.

But where were the Bayern Munich fans? You

had to look hard to find red and white in Berlin.

Black and yellow were clearly the dominant

colours in the capital on that cold April weekend.

The 30,000 Borussia supporters in the Olympic

Stadium not only kept up a party atmosphere,

they also made considerably more noise than

their “opponents” from Munich, letting the BVB

squad know that it was responsible for a sport-

ing sensation. “The mood in the stadium was

unique. For 120 minutes, all you could hear was

our fans. You also played a role in pushing the

ball across the line in the 92nd minute – the

crowd just went wild”, wrote the team later in an

open letter to thank its fans.

19 April 2008: More than 15,000 fansfill Dortmund'sFriedensplatz squareto watch the broadcastfrom Berlin. There wasno end to the cheeringafter the 1:1 equaliser.

More than 30,000BVB followers man-aged to get a ticket tothe final matchagainst BayernMunich. Berlin'sOlympic Stadium isa sea of black andyellow.

43

THE DFB CUP

44

This means that the critical framework conditions for

the future of the Borussia Dortmund Group are in

place. However, we will continue to need patience

and perseverance – especially in driving forward our

sporting development, which is the basic foundation

of future economic success.

The signing at the end of the financial year of Jürgen

Klopp to be head coach starting next season embod-

ies the maxim “sustainability before speed”. This man

had long been in Borussia Dortmund's sights as their

top choice for coach. By signing him, the team hopes

to bring to life the fundamentals of the sporting phi-

losophy that had been defined together with the man-

agement.

That philosophy entails building up a strong team of

young, ambitious and talented players – not neces-

sarily from our own youth teams – backed up by

experienced “pillars”. Over the medium term, that

team will be able to hold its own again against the

top teams in the German Bundesliga and interna-

tionally.

In view of the agreements described above that were

concluded in the 2007/2008 financial year, and given

The trust that Borussia Dortmund GmbH & Co.

KGaA's shareholders placed in us in 2007/2008 was

reflected in their vote at the General Shareholders'

Meeting to approve the actions of the management

and the Supervisory Board by over 99%, and has pro-

vided us the tail-wind needed to bring the restruc-

turing of our Company to completion.

The crucial step at this juncture was the early repay-

ment of the loan from Morgan Stanley, which was

made possible by entering into an agreement with our

marketing partner Sportfive, extending our partner-

ship until 2020. Furthermore, a number of key agree-

ments were extended with partners who will assure

the stability of our future business development.

The early extension of our partnership with our pri-

mary sponsor EVONIK Industries until 2011 is just

one example. This followed the – also early – exten-

sion until 2016 of our agreement with SIGNAL

IDUNA concerning the stadium name “SIGNAL

IDUNA PARK”. The newly signed agreement with

the Radeberger Group will remain in force until

2011 and stipulates that from now on, the only beer

served in SIGNAL IDUNA PARK will be the

Dortmunder “Brinkhoff's No. 1”.

FINANCIAL YEAR 2007/2008 IN REVIEW

B U S I N E S S A N D F R A M E W O R K C O N D I T I O N S

Tinga and Co. had a harder time withMagdeburg than the final score suggests.

DFB Cup 4 August 2007

1. FC Magdeburg 1:4 BVB

Match day 1 12 August 2007

BVB 1:3 MSV Duisburg

BVB stumbles over the “Zebras” at kick-off: Sebastian Kehl going head to headwith Manasseh Ishiaku.

45

the team fought for and won a spot in a European

competition through to its successful performance in

the DFB Cup, where it went all the way to the finals

in Berlin.

In the new financial year, our return to the European

sporting scene will serve to motivate us to continue

patiently on the successful path we have chosen. The

fact that nearly 50,000 season tickets were again sold

for the 2008/2009 season is confirmation that BVB's

fans are prepared to accompany us along this path.

the fact that the Group's financial leeway will contin-

ue to grow, this goal appears quite realistic.

The team's further sporting development will go

hand-in-hand with the further development of its atti-

tude, performance and confidence. This team, this

club, this Company identifies with Dortmund, with

the region in which we live and work, in fundamental

ways that are clear for all: it is driven to succeed, it is

unpretentious, it has a fighting spirit, it is sincere.

Our 13th place ranking in the Bundesliga made the

last sporting season a disappointing one. Nonetheless,

2007/2008 2006/2007EUR millions 30 June 2008 30 June 2007

Equity 80.8 86.5

Investments 4.8 16.3

Gross revenue 116.3 106.0

Operating profit (EBIT) 5.4 15.6

Financial result (investment income and net interest expense) -10.1 -8.5

Net profit/loss for the period -3.9 10.1

Earnings before interest, taxes, depreciationand amortisation (EBITDA) 20.9 29.1

Cash flows from operating activities 56.6 12.1

Number of shares (in thousands) 61,425 61,425

Earnings per share shares ( in EUR ) -0.07 0.17

Match day 2 18 August 2007FC Schalke 4:1 BVB

Match day 3 25 August 2007BVB 3:0 Cottbus

Whatever Gerald Asamoah is doingwith Robert Kovac in this scene, itdoesn't look gentle...

He came, he saw, he scored – twice!In as a substitute, Diego Klimowiczscores two goals.

Key financial indicatorsOverview of the key financial figuresBorussia Dortmund Group

MANAGEMENT REPORT

46

Giovanni Federico celebrates his first goal forBVB. The former Karlsruhe player scored thegoal in the 1:0 victory over FC Hansa.

Match day 41 September 2007

Hansa Rostock 0:1 BVB

Match day 514 September 2007

BVB 3:0 Werder Bremen

Mladen Petric: Double scorer in thematch against Bremen.

With an average of 38,975 (previous year: 39,547)

spectators per match, the Bundesliga held its posi-

tion as number one internationally. In order to

improve comparability with the other leagues, DFL

Deutsche Fußball Liga has decided, with immediate

effect, to report absolute spectator numbers. Until

now, spectator reports only accounted for tickets

sold. Henceforth, the comparative figures will also

include complimentary and free tickets. 11,926,395

fans attended Bundesliga matches during the

2007/2008 season. Borussia Dortmund welcomed

1,218,054 spectators to its matches, placing it at the

top of the list, followed by FC Bayern Munich

(1,181,709) and FC Schalke 04 (1,040,901). Just

under 55% of the tickets sold were season tickets.

According to DFL Deutsche Fußball Liga, this was

due not least to solid infrastructure, state-of-the-art

stadiums and the lowest admission prices compared

to all other top European leagues.

TV marketingThe three-year contract for TV marketing entered

into in December 2005 for a total amount of over

€ 1.2 billion expires on 30 June 2009.

In October 2007, DFL Deutsche Fußball Liga nego-

tiated a follow-up agreement with Sirius SportMedia

GmbH intended to cover at least € 3 billion in

domestic marketing alone for the coming six years.

This arrangement represents a fundamentally new

TicketingAlthough the 2008/2009 Bundesliga season has yet

to begin, one record has already been broken: The

eighteen first division clubs have sold well more

than 400,000 season tickets before the first kick-off

of the new season. This figure has never been

reached before in Bundesliga history. One can only

guess how strong the demand for season tickets real-

ly is since many clubs have suspended season ticket

sales after reaching their maximum limit.

With 49,500 season tickets sold, Borussia Dortmund

has once again taken the lead, arriving at just below

its record for last year due to the fact that it has held

back a number of standing-room-only tickets.

During the 2007/2008 season, the Bundesliga

recorded a 1.5% drop in spectators. However,

licence football – comprising both the Bundesliga

and the Second Bundesliga – recorded a 1.38%

increase in spectators. This is attributable to the fact

that teams with a long-standing tradition and those

drawing large numbers of spectators – such as

Borussia Mönchengladbach, TSV 1860 München,

1. FC Kaiserslautern and 1. FC Köln – were in the

Second Bundesliga. Furthermore the three teams

that were relegated to the Second Bundesliga in the

2006/2007 season hosted roughly 100,000 spectators

more at home matches last season than the three

teams that were promoted.

DEVELOPMENT OF THE MARKET AND COMPETITIVE ENVIRONMENT IN GERMAN PROFESSIONAL FOOTBALL

47

Match day 622 September 2007Hertha BSC 3:2 BVB

Match day 7 25 September 2007BVB 0:3 Hamburger SV

An acrobatic bicycle kick: DiegoKlimowicz sizes up the situation inHertha BSC Berlin's penalty box.

In a tight squeeze: Christian Wörns andDede (right) allow Paolo Guerrero nopassage.

marketing model that avoids dependencies and

opens up new options. This marketing model rests

on three pillars:

• DFL will commission an agency to award media

rights in German-speaking countries from 2009 to

2015

• Bundesliga will produce its own, journalistically

independent programme for live pay-per-view tel-

evision

• DFL will form a separate company to market

international media rights

The German Federal Cartel Office (Bundes -

kartellamt) has initiated investigations into the

agreement with Sirius SportMedia GmbH, as well

as the centralised marketing of media rights. As a

result, it has not yet been possible to proceed with

the awarding of media rights as planned by DFL.

The Bundeskartellamt rejected the league associa-

tion's plans in July 2008 on the basis that the model

did not sufficiently satisfy the requirements of

antitrust law.

However, the Bundeskartellamt did not raise objec-

tion to the German Football Association's (Deutscher

Fußball-Bund, “DFB”) centralised marketing of the

DFB Cup in 2011/2012.

International playersThe founding of the European Club Association

(ECA) and the signing of a memorandum of under-

standing between UEFA and the new organisation,

which represents the clubs' interests at the European

level, signalled the launch of a new era in football.

According to the joint declaration of FIFA and

UEFA, the formation of the ECA will restore har-

mony between the governing bodies and the clubs.

The signing of the joint memorandum of under-

standing means that UEFA will consider the ECA as

a single body that may represent the interests of the

clubs at the European level, while the ECA recog-

nises UEFA as the supreme body for football in

Europe and FIFA as the supreme body for football

worldwide.

The ECA, which is expected to comprise a total of 103

clubs from the 53 UEFA member countries, is an inde-

pendent, autonomous body that represents European

clubs and their interests vis-à-vis FIFA and UEFA. The

first joint resolution stipulates that in the coming six

years, funds will paid to those clubs sending interna-

tional athletes to the World and European Cups.

The unauthorised dispatch of Bundesliga athletes to

the Olympic Games caused a stir recently. These ath-

letes had been nominated to represent their countries

at the Olympic Games, although they had not

obtained permission from their employers. After

some confusion and differences of opinion between

associations and governing bodies, it was decided that

Bundesliga clubs were not required to release their

players for the Olympic football tournament. This

final ruling was pronounced by the international

Court of Arbitration for Sport.

MANAGEMENT REPORT

48

Delron Buckley races with Karlsruheplayer Timo Staffelt for the ball: Rarelyhas the BVB looked so determined.

Match day 8 29 September 2007

Karlsruher SC 3:1 BVB

Match day 9 5 October 2007

BVB 2:1 VfL Bochum

Celebrating Giovanni Federico's long-range shot to win the match 2:1.

sequences of a breach of contract by a player. This is

relevant solely to international transfers; player trans-

fers within the Bundesliga are not affected by the

CAS ruling. DFL Deutsche Fußball Liga GmbH is

currently scrutinising the precise consequences of

this ruling.

In cooperation with the German Football Association

(DFB) and under the aegis of the European

Professional Football Leagues (EPFL), the League

Association (Ligaverband) will be working out a joint

position of the football community. Moreover, FIFA

has announced that it plans to revise the ambiguous

wording of Article 17 of the FIFA Statutes. It is fur-

thermore advisable that the clubs include legal sanc-

tions in new player contracts for the event of a breach

of contract on the part of the player. In the event of a

dispute, clubs do have recourse to the regular nation-

al courts in order to enforce claims for injunctive

relief and damages.

Transfer systemA good 12 years after the groundbreaking Bosman

ruling, the CAS ruling in the case of the Scottish play-

er Andy Webster has caused an uproar in profession-

al football. Although he was under contract with the

Scottish club Heart of Midlothian, Webster trans-

ferred to Wigan Athletic in the English Premier

League. The Court of Arbitration for Sport (CAS) has

now ruled that Webster was in breach of contract, and

ordered him to pay damages to his former club in

accordance with Article 17 of the FIFA Statutes.

Immediately following this ruling, some had initially

feared that the professional football transfer system

would again have to cope with fundamental changes

as it did in the aftermath of the Bosman case.

However, when considered rationally, such fears are

unfounded since Article 17 of the FIFA Statutes does

not stipulate any right of termination for players wish-

ing to transfer to other teams. The CAS explicitly con-

firmed this. The Statute merely lays out the legal con-

49

Match day 1020 October 2007Leverkusen 2:2 BVB

Match day 11. 28 October 2007BVB 0:0 FC Bayern

Head to head race for the ball betweenDiego Klimowicz and Hans Sarpei.

Fight for the ball: Toni and the formida-ble Tinga (right).

Group legal structureThe Group management report is based on the con-

solidated group of Borussia Dortmund GmbH &

Co. KGaA. In addition to its core activities of foot-

ball and the marketing of SIGNAL IDUNA PARK,

Borussia Dortmund is involved in lines of business

related to football. At present, the Company holds

direct and indirect interests in the following

companies: BVB Stadionmanagement GmbH

(100.00%), BVB Stadion Holding GmbH (formerly

goool.de Sportswear GmbH) (100.00%), Sports &

Bytes GmbH (100.00%), BVB Merchandising

GmbH (100.00%), BVB Stadion GmbH (99.74%),

BVB Beteiligungs-GmbH (94.90%), B.E.S.T.

Borussia Euro Lloyd Sports Travel GmbH (51.00%)

and Orthomed GmbH (33.33%).

Some of these companies have concluded mutual

control and/or profit and loss transfer agreements.

GROUP STRUCTURE AND BUSINESS

MANAGEMENT REPORT

BVB StadionHolding GmbH

BVB Stadionmanagement GmbH

BVB Merchandising GmbH

Sports & Bytes GmbH

B.E.S.T. Borussia Euro Lloyd Sports Travel GmbH

Orthomed GmbH

Consolidated tax group


100%

100%

BVB Stadion GmbH

BVB Beteiligungs-GmbH

BV. Borussia 09e.V. Dortmund

5.10%

5,10%

94.90%

94.90%

100%

100%

51.00%

33.33%

Hogg Robinson GermanyGmbH & Co. KG

Orthomed Management

49.00%

66.67%

50

A head above the rest: Scorer MarkusBrzenska against Marco Russ.

DFB Cup 31 October 2007

BVB 2:1 Frankfurt

Match day 123 November 2007

Hanover 96 2:1 BVB

Robert Kovac makes a last minute savejust before Hanover's Szabolcs Husztishoots.

BVB Merchandising GmbHBVB Merchandising GmbH, a wholly-owned sub-

sidiary of Borussia Dortmund GmbH & Co. KGaA,

was again a key income driver in the past financial

year. The company finished the financial year with a

profit of € 0.30 million before profit transfer, beat-

ing its prior-year result by € 0.44 million. This was

due to the increase in the company's total revenues

by approximately 51.4% to € 7.97 million.

BVB Merchandising GmbH even generated a

record profit from its core business of selling and

marketing merchandise, with revenues amounting

to € 7.37 million. (previous year: € 4.63 million)

This is attributable largely to the proceeds from the

jersey exchange promotion with EVONIK

Industries. In three days, roughly 40,000 jerseys

were distributed to season ticket holders in an

unprecedented promotion. The primary sponsor of

Borussia Dortmund GmbH & Co. KGaA, EVONIK

Industries AG, promised every season ticket holder

a jersey as a token of thanks for their support last

season and in anticipation of EVONIK’s upcoming

IPO. The jersey distribution promotion was just as

great a challenge for EVONIK Industries as it was

for the Dortmund-based company, and although

neither partner had had any previous experience in

implementing such a promotion, both partners were

congratulated after the successful execution of the

campaign.

However, notwithstanding the jersey promotion,

BVB Merchandising GmbH increased its revenues

from the sale of merchandise by 21%. Merchandise

sales in particular reflect the emotions of the fans,

with revenues and sporting success being strongly

correlated. This growth is attributable to the team's

participation in the Cup finals and the merchandise

that was created specifically for this special occasion

and the Cup competition, as well as unique sales

promotions such as the “Steh drauf” – attending the

local derby “up close and personal” campaign.

The fan shop that opened in January 2007 in the

August Lenz building has proven to be another rev-

enue driver, and has meanwhile established itself as a

key component in the Merchandising sales structure.

Sports & Bytes GmbHIn the period from 1 July to 30 June 2008, Sports &

Bytes GmbH recorded a profit of € 0.009 million.

The key mission of the wholly-owned subsidiary

Sports & Bytes comprised IT process implementa-

tion and video reporting on Bundesliga and DFB

Cup matches on BVB TV and live broadcasts on

BVB Netradio.

BVB Netradio premiered on Holy Saturday 1999.

Sophisticated technology and ever larger data

servers allow it to reach a broader public every year.

The current average number of listeners for

Bundesliga matches is between 70,000 and 90,000.

On 26 February 2008, the station reached a record

125,000 users listening in on BVB's 3:1 DFB Cup

quarterfinal victory against TSG 1899 Hoffenheim.

This match was not broadcast live on TV. Fans lis-

tened in from around the world: the US, Canada,

Japan, China, India, Indonesia, Thailand, Nicaragua,

Sri Lanka and Tanzania, as well as almost every

country in Europe.

51

Match day 13 10 November 2007BVB 1:1 Frankfurt

Match day 1425 November 2007Nuremberg 2:0 BVB

Close your eyes and go for it: FlorianKringe, here battling Patrick Ochs, scoresa point against Eintracht.

Brzenska (left) knows what's coming:Galasek shoots past Petric and Kovac tobring the score to 1:0.

MANAGEMENT REPORT

With effect from 30 June 2008, the liabilities to the

KGaA were transferred to the capital reserves of

BVB Stadion Holding GmbH.

BVB Stadion Holding concluded the financial year

with a loss of € 4.25 million prior to loss absorption

by the KGaA. The results were impacted for the last

time by the negative financial result of € 3.75 mil-

lion to finance the stadium shares.

BVB Stadion GmbHBVB Stadion GmbH, which is the legal successor

company to Westfalenstadion Dortmund GmbH &

Co. KG, owns the stadium property.

The BVB Group holds a 99.74% interest in BVB

Stadion GmbH through BVB Stadion Holding

GmbH and BVB Beteiligungs – GmbH; BV.

Borussia 09 e.V. Dortmund holds a 0.26% interest.

The company entered into a lease agreement with

Borussia Dortmund GmbH & Co. KGaA for the use

of the stadium property with a fixed term until 30

June 2027.

Additionally, a profit and loss transfer agreement

was entered into with BVB Stadion Holding GmbH.

BVB Stadion GmbH's net loss before loss absorp-

tion by BVB Stadion Holding GmbH for the finan-

cial year in accordance with IFRS amounted to

€ 3.39 million (previous year: € 3.48 million loss).

BVB Beteiligungs-GmbHBVB Beteiligungs-GmbH was founded and entered

into the commercial register on 2 May 2006. The com-

pany holds a 5.1% interest in BVB Stadion GmbH.

BVB TV is part of the BVB CLUB and has been a

fixed component of the BVB homepage since

November 2003. A video recap of every Borussia

match can be accessed here shortly after the end of

play. But the BVB CLUB offers even more: Fans

have access to their own BVB e-mail address, exclu-

sive news, downloads and a wide range of communi-

cations tools, from chat to star chat and through the

forum.

Sports & Bytes GmbH is currently developing an elec-

tronic player passport on behalf of Borussia Dortmund

GmbH & Co. KGaA's sports management.

BVB Stadion Holding GmbH (formerly goool.de Sportswear GmbH)Pursuant to the resolution of the Shareholders'

Meeting on 10 June 2008 and the entry into the

commercial register on 13 June 2008, the wholly

owned subsidiary goool.de Sportswear GmbH will

henceforth operate under the name BVB Stadion

Holding GmbH.

At the same time, the purpose of the company was

changed: Going forward, the object of BVB Stadion

Holding GmbH will be to make equity investments

in other companies.

The company's original business of manufacturing

and selling sports and leisure attire was suspended

and the remaining merchandise held in inventory

was sold to BVB Merchandising GmbH.

In the current financial year, the loan granted by

Morgan Stanley was repaid in full by Borussia

Dortmund GmbH & Co. KGaA. The Company is

hence free from financial liabilities.

52

Sebastian Kehl doesn't let Pavel Pardothrow him off track: He led the BVB tovictory against VfB.

Match day 151 December 2007

VfB Stuttgart 1:2 BVB

Match day 167 December 2007

BVB 6:1 Arm. Bielefeld

A shooting match against Bielefeld:Florian Kringe can also add his name tothe list of scorers in this game.

B.E.S.T. Borussia Euro Lloyd SportsTravel GmbHBorussia Dortmund GmbH & Co. KGaA has a 51%

interest in Borussia Euro Lloyd Sports Travel

GmbH.

In addition to general travel agency services, B.E.S.T.

offers the conception, planning and implementation

of events, conferences and congresses. BVB provides

B.E.S.T. above all with the contacts and business rela-

tions it has with numerous enterprises.

B.E.S.T. Borussia Euro Lloyd Sports Travel GmbH

closed the financial year with a profit of € 0.17 mil-

lion (previous year: € 0.12 million).

Orthomed GmbH Borussia Dortmund has a 33.33% interest in Ortho -

med Medizinisches Leistungs- und Rehabilitations -

zentrum GmbH. Orthomed offers an all round con-

cept for medical rehabilitation, particularly for

competitive athletes. The service package offered is

divided into prophylactic measures and training-

related measures. It goes without saying that all of

Borussia Dortmund's sporting departments are also

attended to by Orthomed.

Orthomed recorded a profit for the year of € 0.15

million as at 31 December 2007 (previous year:

€ 0.06 million).

In the current financial year, Borussia Dortmund

GmbH & Co. KGaA repaid in full the loan granted

by Morgan Stanley to finance the stadium shares,

meaning that the interest expense from this loan

impacted net profit and loss for the year for the last

time in 2007/2008.

Against the backdrop of the financing of the shares,

BVB Beteiligungs-GmbH closed the financial year

with a loss of € 0.37 million before loss absorption by

BVB Stadion Holding (previous year: € 0.32 million

loss).

BVB Stadionmanagement GmbHThe object of BVB Stadionmanagement GmbH is

the provision of personnel and other services for the

management and administration of the operating

facilities of Borussia Dortmund GmbH & Co.

KGaA, in particular SIGNAL IDUNA PARK.

The company entered into a profit and loss transfer

agreement with the KGaA in October 2006.

In the last financial year, net income for the year was

€ 0.06 million (previous year: € 0.12 million).

53

Match day 1715 December 2007VfL Wolfsburg 4:0 BVB

DFB Cup (second round)29 January 2008BVB 2:1 Werder Bremen

This is the only scene in the last gamebefore the winter break in whichBorussia was on top (Valdez/Simunek).

BVB faces Werder Bremen in the secondround: Tinga and Co. prevail 2:1.

MANAGEMENT REPORT

holder is Ballspielverein Borussia 09 e.V. Dortmund.

The following chart shows the structures and

responsibilities as between Ballspielverein Borussia

09 e.V. Dortmund, Borussia Dortmund GmbH &

Co. KGaA and Borussia Dortmund Geschäfts -

führungs-GmbH.

The general partner, Borussia Dortmund Geschäfts -

führungs-GmbH, is responsible for management and

representation of Borussia Dortmund GmbH & Co.

KGaA. This limited liability company (“GmbH”) is

in turn represented by its Managing Directors Hans-

Joachim Watzke and Thomas Treß; its sole share-

ORGANISATION OF MANAGEMENT AND CONTROL

No right of appointment, only right of supervisionNo right of appointment, only right of supervision

BallspielvereinBorussia 09 e.V. Dortmund

appointsappoints

Members Meeting

Executive Board

Council ofeconomic affairs


Supervisory Board

General Shareholders’ Meeting

appoints and supervisesappoints and supervises

Advisory Board Managing Directors

No right of appointment, only right of supervisionNo right of appointment, only right of supervision

(Consisting of members of the Executive Board, Council of economic affairs and non-voting, associated members)

(Consisting of members of the Executive Board, Council of economic affairs and non-voting, associated members)

electselects

electselectsBorussia Dortmund

Geschäftsführungs-GmbH(General Partner)

54

Diego Klimowicz' two goals late in thegame secured BVB a point in thematch against MSV Duisburg.

Match day 182 February 2008

MSV Duisburg 3:3 BVB

Match day 1910 February 2008

BVB 2:3 Schalke 04

Dede sees red in the derby: JermaineJones from Schalke tries to calm theBorussian.

The rights and duties of the KGaA's Supervisory

Board, which is appointed by the General

Shareholders' Meeting, are limited. Specifically, it

has no authority with respect to matters involving

personnel, i.e., no authority to appoint and dismiss

managing directors at Borussia Dortmund Ge -

schäftsführungs-GmbH or to stipulate the terms of

their contracts. Nor is the Supervisory Board autho-

rised to adopt internal rules of procedure for the

general partner or issue any list of transactions

requiring its consent. Rather, such rights and duties

are vested in the governing bodies of Borussia

Dortmund Geschäftsführungs-GmbH, namely its

Advisory Board and the Executive Committee cre-

ated by the Advisory Board.

The members of the Supervisory Board are as follows:

Gerd Pieper (Chairman)Proprietor and Managing Director of

Stadtparfümerie Pieper GmbH, Herne

Harald Heinze (Deputy Chairman)

Ruedi BaerConsultant, B + B Beratungs AG, Watt

(Switzer land)

Othmar Freiherr von DiemarProprietor and manager of Othmar von Diemar

Vermögensverwaltung + Beratung, Cologne

Bernd GeskeManaging partner of Bernd Geske Lean

Communication, Meerbusch

Christian KullmannHead of the management board office and group

communications of EVONIK Industries AG,

Essen

55

Match day 2016 February 2008Energie Cottbus 0:2 BVB

Match day 2123 February 2008BVB 1:0 Hansa Rostock

Double-scorer Mladen Petric removes alldoubt with this shot – goalie Tremmel can'tquite reach.

Delron Buckley, shown here in an aerialduel with Kai Bülow, was the strongestplayer in the field.

MANAGEMENT REPORT


Within Borussia Dortmund GmbH & Co. KGaA,

there are four independent areas of responsibility

below the management level, namely, “Commu -

nications”, “Sport”, “Finance” and “Organisation”.

The responsible employees and the divisions for

which they are responsible can be seen from the fol-

lowing chart.

Hans-Joachim Watzke[Chairman]

J. Schneck

Corporate communications

Sport communications

Publications

Professional football Finances and accounting

General organisation

Stadium management

Match organisation

V.I.P. – Hospitality

Events

DFB/DFL

Ticketing

Real estate

Third party events

Sportfive(sponsors)

Controlling

Investor Relations

Personnel

Merchandising

Risk Management

Affiliates

Sportfive (Commission processing)

IT (InformationTechnology)

Amateurs

Youth

Training fieldsFan support

Stadium announcements and program

PR work

Complaints management

M. Zorc M. Knipping Dr. C. Hockenjos

Management

Communications Sport Finance Organisation

Thomas Treß

Management

56

Giovanni Federico and Co. didn't treattheir opponents (Gustavo) lightly in thequarter finals.

DFB Cup QF26 February 2008

BVB 3:1 Hoffenheim

Match day 221 March 2008

Werder Bremen 2:0 BVB

Duel between Sebastian Kehl andMarkus Rosenberg, a striker fromWerder Bremen.

mise cash flow by concentrating on the impacting

factors of “operating results” and “investments”.

The operating result is the most important indica-

tor for measuring success. For us, the operating

result means earnings before interest and taxes

(EBIT). Therefore we are constantly monitoring the

operating results in all lines of business and areas of

responsibility based on monthly comparisons

between the budget and the actual situation. The

most important drivers for the operating result are

further improvement in sales revenues in the major

income areas of ticketing, sponsorship, TV market-

ing and merchandising, and disciplined manage-

ment of operating expenses.

In coming years we will concentrate on successively

generating sales growth while limiting operating

expenditure. In this respect, the decisive factor is

qualifying for international competitions.

Capital managementThe management's capital management responsi-

bilities include stabilising and increasing the con-

solidated equity as determined in accordance with

IFRS We will reach these targets, in particular, by

improving the operating result and through effec-

tive investments.

Sports managementDespite the successful restructuring and the eco-

nomically stable results, in the future the focus will

be on playing football successfully with a cost-opti-

mised budget. In order to achieve this aim, BVB will

continue to have a competitive team going forward

which is made up of young, promising players.

The sporting objectives will be aligned with the

financial circumstances, meaning that the makeup

of the squad and its cost structure will continue to

depend on foreseeable variables on the income

side. Qualifying for and successfully playing in

international competitions would provide the finan-

cial flexibility for acquiring additional reinforce-

ments. The medium-term goal must therefore be

for the team to establish itself at the European lev-

el of competition.

Financial managementOne of the main aims of BVB's management is to

increase profitability in the long-term and thus to

further improve the Borussia Dortmund Group's

equity resources. In addition, there is a focus on

financial strength. As well as a constant improve-

ment in the operating result, generating positive

cash flow is therefore the most important financial

objective of our Company. We are seeking to opti-

INTERNAL MANAGEMENT SYSTEM

57

Match day 237 March 2008BVB 1:1 Hertha BSC

Match day 2415 March 2008Hamburger SV 1:0 BVB

The match against Hertha was hard-fought: Wörns attacks Berlin's scorerPantelic.

Hamburg's scorer Paolo Guerrero takesoff the kid gloves with Borussia's MartinAmedick.

MANAGEMENT REPORT

• Germany continues to be Europe's largest football

market, which, however, is behind some other

European markets in financial terms. This provides

great growth potential.

All financial activities at Borussia Dortmund are ori-

ented around the target groups that are relevant for a

football club: Its fans, members and business partners.

Products and services should be tailored to these

groups in the best way possible. Through its existing

brand potential, Borussia Dortmund wants to utilise

all commercial opportunities presented by profes-

sional club football in an international context.

The current business strategy can principally be sum-

marised as follows:

• Sustainable adjustment of sporting perspectives

• Intensifying the promotion of up and coming talent

• Fan involvement

• Utilisation of the “Borussia Dortmund” brand

However, financial and business development is

largely dependent on sporting success. Since sport-

ing success can only be planned to a very limited

degree, the best management can do is to create a

foundation for success. Investments, particularly in

the professional squad, are therefore a necessary

prerequisite for achieving sporting objectives, such

as qualifying for the UEFA Cup. However, in order

to meet financial goals, planned investments and

decisions must under certain circumstances be post-

Borussia Dortmund's continues to pursue the aim of

establishing itself over the medium-term as one of the

leading German football clubs after FC Bayern

Munich. Following the successful implementation of

the reorganisation, the restructuring of our financial

liabilities and investments in the professional squad,

we consider ourselves to be on the right path.

The financial foundations of the first and to date only

listed German football company have been expanded

with the exclusive marketing right for SIGNAL

IDUNA PARK, more effective use of the “Borussia

Dortmund” brand and the establishment of football-

related lines of business. However, the core business

will in future also be professional football together

with its classic income sources of TV marketing, spon-

sorship, ticketing and merchandising. For the follow-

ing reasons, BVB is convinced that it will be able to

further stabilise and expand its position:

• Borussia Dortmund is in sporting terms one of the

most successful, well known and most popular

German football clubs with an outstanding fan base

that provides BVB with one of the highest average

numbers of spectators in Europe.

• A football company can only be financially success-

ful if it enjoys sporting success in the long term. In

order to make its financial performance less

dependent on short-term sporting success in the

future, Borussia Dortmund will push ahead further

with national and international marketing of its

brand name.

CORPORATE STRATEGY

58

Tinga scores in the 13th minute for anearly 1:0 lead for BVB.

DFB Cup SF18 March 2008

BVB 3:0 Carl Zeiss Jena

Match day 2522 March 2008

BVB 1:1 Karlsruher SC

Borussia – as here with Rukavina againstIashvili – were clearly the better team,but managed to score only one goal.

The first steps in bringing us closer to this goal have

been taken with the marketing of the stadium name –

the agreement with the SIGNAL IDUNA Group was

extended early by five years to at least 2016 –, the new

principal sponsor agreement with EVONIK

Industries AG – extended until 2011 – and conclusion

of the new television agreement by DFL. Moreover,

further significant revenue potential is available, espe-

cially by successfully qualifying for international com-

petitions, which would have a positive effect on all

Borussia Dortmund's revenue sources.

Positive operating results and investments, main-

ly in the professional squad, depending on those

results, are expected to enable stable, positive cash

flows to be achieved over the long term.

poned to the extent these would only be possible by

incurring new debt. Moreover, a player may be sold

based on financial considerations in cases where this

would not have happened had the decision been

made based solely on sporting criteria.

A conflict, or a situation where sporting considera-

tions and financial considerations affect each other

adversely, therefore arises between the pursuit of

financial interests and sporting interests, particular-

ly if the club continually falls short of its sporting

goals. In such cases, management weighs up the

opportunities and risks to find a solution that is

broadly in line with our strategic objectives from a

medium-term point of view.

59

Match day 2629 March 2008VfL Bochum 3:3 BVB

Match day 276 April 2008BVB 1:2 Leverkusen

Nelson Valdez (here tackling Imhof) earnshis “miles” in the match against Bochumas well.

These two beat Leverkusen almost single-handedly: Dede and Alex Frei, who alter-nately set up goals for each other.

MANAGEMENT REPORT

Gross revenue amounted to € 116.28 (previous year:

€ 105.98 million). The result from operating activi-

ties (EBIT) was again positive, at € 5.40 million (pre-

vious year: € 15.60 million).

Although the Borussia Dortmund Group generated

revenues of € 107.56 million, thus topping the pre-

vious year's figure by € 10.44 million and breaking

through the € 100 million ceiling for the first time,

the Group closed the 2007/2008 financial year with

a € 3.94 million loss in accordance with IFRS (pre-

vious year: € 10.12 million).

RESULTS OF OPERATIONS

P O S I T I O N O F T H E G R O U P

Borussia Dortmund Group – Revenues in %

60

Disappointed Borussians (Dede, Wörns,Tinga) and jubilant Munich players(Podolski, Sagnol).

Match day 2813 April 2008

FC Bayern 5:0 BVB

Match day 2916 April 2008

BVB 1:3 Hanover 96

Höttecke celebrates his Bundesliga debutin the match versus Hanover but waspowerless to stop this shot by Huszti.

increased revenues in ticketing (23.7%), sponsorship

(10.9%) and TV marketing (22.5%).

The revenues for the individual segments are bro-

ken down as follows:

In spite of its sporting performance in the Bun -

desliga, the Borussia Dortmund Group again

increased its revenues by 10.8%. This growth is pri-

marily attributable to the success in the DFB Cup

competition, which contributed considerably to

Revenues in EUR million

SALES DEVELOPMENT

61

DFB Cup finals19 April 2008BVB 1:2 FC Bayern in overtime

Match day 3025 April 2008Frankfurt 1:1 BVB

The equaliser in the 92nd minute: Kahnlooks on dumbfounded as Lahm won'tbe able to stop it.

Kuba scores his first goal for BVB at the1:1 tie in Frankfurt – and makes a greatplay.

MANAGEMENT REPORT

cessfully qualified for the DFB Cup finals this season

for the first time in nineteen years. Of the six rounds,

four were played at the home stadium, SIGNAL

IDUNA PARK. Due to the high stadium capacity,

this meant that it was possible to host a larger num-

ber of spectators than at away matches. It should be

noted that in the national cup, ticket income does not

flow solely to the home team. Rather, a share of tick-

et sales also goes to the guest team.

Match operations generated an additional € 1.78

million from friendly matches and from regional

match operations.

Income from sponsorshipBorussia Dortmund's sponsoring income amounted

to € 33.89 million, beating the prior-year figure by a

further € 3.34 million.

In addition to EVONIK Industries AG, the team’s

committed primary sponsor who not only grabbed

attention with the first ever jersey campaign in the

history of the Bundesliga, but also extended its com-

mitment early until 2011, Borussia Dortmund can

continue to count on established partners such as

Nike, SIGNAL IDUNA, Warsteiner and Sparda

Bank this season. In order to strengthen these part-

nerships and to underpin the trust and the con-

structive co-operation between Borussia Dortmund

and its partners, the agreement with the SIGNAL

IDUNA Group was also extended early by an addi-

tional five years. Germany's largest football stadium

will therefore be called SIGNAL IDUNA PARK at

least until 2016. Sparda Bank also expressed its con-

fidence in us in February by extending its Champion

Partner agreement by three years.

Details of the performance of the individual revenue

sources are provided in the following paragraphs.

Income from ticketingWith income from the sale of tickets for Bundesliga

matches, the DFB Cup and from other football

matches, Borussia Dortmund generated € 22.59 mil-

lion in revenues, representing a € 4.33 million

increase over the previous year.

Income from the sale of admissions tickets to

Bundesliga matches amounted to € 16.72 million

last year, a € 0.22 million decline. In spite of the dis-

appointing sporting performance in Bundesliga

matches, leading the team to rank 13th nationally,

Borussia Dortmund can boast that it leads the chart

in ticket sales as compared to the other Bundesliga

clubs. Already at the beginning of the season,

Borussia Dortmund set the overall Bundesliga

record for the amount of season tickets sold: 50,549.

On average, 71,650 spectators (including those hold-

ing free and complimentary tickets) attended

Borussia Dortmund's home matches. However,

Borussia Dortmund was less fortunate with regard

to the Bundesliga match schedule, as each of the

three midweek match days scheduled was set as a

BVB home match. The matches against Hamburger

SV, Hannover 96 and VfB Stuttgart confirmed again

that midweek matches draw smaller crowds, thus

generating weaker income.

Above all, DFB Cup ticket sales contributed to the

positive earnings. With sales amounting to € 4.08 mil-

lion, this represented an increase by € 3.88 million.

Whereas Borussia Dortmund was already disqualified

in the second main round in the previous year, it suc-

62

Though Mladen Petric managed tobreak free of Andreas Wolf in this pic-ture, he ran out of luck in the end.

Match day 312 May 2008

BVB 0:0 Nuremberg

Match day 326 May 2008

BVB 3:2 Stuttgart

Alexander Frei (shown here battlingMatthieu Delpierre) scores the 2nd and3rd goals against VfB Stuttgart.

For Bundesliga match operations, this amount was

€ 20.76 million, the same level as the previous year

despite our final 13th-place ranking. This was attribu-

table to the fact that the budget for the distribution

by DFL Deutsche Fußball Liga GmbH of income

from marketing across all media in Germany for the

2007/2008 season was € 15.00 million higher.

The increase in TV revenues is therefore mainly

due to the team's success in the national cup cham-

pionships. A total of € 4.91 million was generated in

the six rounds played, including the Cup final in

Berlin. The German Football Association determines

the distribution of the income from the marketing of

media rights for each round prior to the competition.

The only distinction drawn for this purpose is

whether the matches are broadcast live or as a

roundup.

At € 0.36 million, TV marketing for the regional

league team fell just € 0.05 million short of the pre-

vious year's level.

Transfer incomeIn the past financial year, transfer income declined

by € 1.37 million to € 5.40 million.

The core components of this revenue category were

the transfers of Ebi Smolarek to Real Racing Club

de Santander and Steven Pienaar to FC Everton. In

summer 2007, FC Everton borrowed Pienaar from

BVB, initially for a one-year term. In March 2008,

the club exercised an option to buy Pienaar, who

received a contract until 2011.

In addition, the hospitality suites around the west-

ern, northern and eastern stands made a substantial

contribution to the positive results. In addition to

the suites at the regulars’ level (Stammtischebene)

and the “Rote Erde Club”, which had already been

at full capacity in previous years, the Business 09

Club was also completely sold out for all of this year.

Incentives packages are also gaining in popularity.

In recent years, these packages have been used

more and more frequently by companies who would

like to play host to their guests on individual match

days at SIGNAL IDUNA PARK independently of

season packages. An increasing number of compa-

nies who support the guest teams are also taking

advantage of the opportunity to share the SIGNAL

IDUNA PARK experience with business associates.

In order to satisfy all the requests in this segment

and in accordance with past practice, the golf area

located at the south of SIGNAL IDUNA PARK and

the Conference Center added in early 2007 were

converted into hospitality suites on match days dur-

ing the current financial year.

In addition, our DFB Cup success and the resulting

qualification for the UEFA Cup in the following sea-

son helped lift revenues from advertising income.

Income from TV marketingIncome from TV marketing in the past financial year

amounted to € 26.02 million, or € 4.77 million more

than the previous year.

63

Match day 3310 May 2008Bielefeld 2:2 BVB

Match day 3417 May 2008BVB 2:4 Wolfsburg

Retreat: Kuba, Wörns and Kovac givechase after Bielefeld's Zuma.

On the last day of play, the Wolvesshowed they were not all bark. SaschaRiether cleanly cuts the Brazilian Tingaoff from the ball.

MANAGEMENT REPORT

As in previous years, catering in SIGNAL IDUNA

PARK’s circulation levels and hospitality suites, as

well as for non-match events, made a significant con-

tribution to sales. € 7.44 million was generated here,

representing an increase by € 0.77 million resulting

primarily from the three additional home matches.

It should be noted that average consumption per

customer at Bundesliga matches rose year on year by

€ 0.28 net; excluding the three midweek matches,

this amount rose by € 0.37 net.

Retail, catering and licences including other income

also includes proceeds from rentals and leases, the

rights of use for all companies and advance booking

fees from ticketing, totalling € 4.13 million (previous

year: € 7.64 million). The rental and lease proceeds

generated last financial year as a result of the 2006

FIFA World Cup that were recognised under this

item on a one-off basis explain the € 3.51 million

decline in this area.

Other operating income fell by € 0.23 million to

€ 8.63 million in the past financial year. Again, this

decline is primarily attributable to the earnings

recognised in the prior year period in relation to the

2006 FIFA World Cup. Next to the remuneration

received for the first time for clubs that sent inter-

national players to the 2008 European Cup, this item

primarily comprises the sale of the swap transaction

with Deutsche Bank AG as part of the retirement of

the credit facility with Morgan Stanley International

Bank Limited, London.

Income from retail, catering andlicences including other incomeIn the past financial year, Borussia Dortmund gen-

erated € 19.65 million in revenues from retail, cater-

ing and licences including other income. This

amount was € 0.63 million lower than the prior-year

figure.

The revenues are broken down individually into the

following lines of business:

Revenues from merchandising amounted to € 8.09

million, up € 2.10 million on the previous year. In

addition to BVB Stadion Holding GmbH (formerly

goool.de Sportswear GmbH), which generated rev-

enues from operating activities of € 0.72 million as

at 31 May 2008, BVB Merchandising GmbH gener-

ated record revenues in the amount of € 7.37 million.

The wholly owned subsidiary lifted merchandise

sales by approximately 59%.

This is attributable largely to the proceeds from the

jersey exchange promotion with EVONIK In -

dustries, which accounted for approximately 23% of

overall volume. Notwithstanding the jersey promo-

tion, the revenues generated exceeded the previous

year's level by 21%. In addition to the team's suc-

cessful performance in the DFB Cup competition

and the related demand for items created specifical-

ly for this event, other special sales and promotions,

such as the “Steh drauf” campaign contributed to the

positive results.

64

Stanley amounting to € 79.2 million and the new

loan taken out in this context.

Liabilities amounted to € 175.80 million as at the

balance sheet date and were thus € 4.18 million

higher than the previous year's level. This increase

was the result of greater payment obligations for

professional players and the increase in value added

tax in connection with the new marketing agree-

ment.

Analysis of capital structureAfter taking into account the net loss for the year,

the Borussia Dortmund Group's equity amounted

to € 80.80 million as at 30 June 2008. This corre-

sponds to an equity ratio of 31.49%.

In the past financial year, Borussia Dortmund's debt

structure was impacted by the signing of a new mar-

keting agreement with Sportfive, the Group-wide

retirement in full of the line of credit with Morgan

Depreciation and amortisation Depreciation and amortisation increased year on

year by € 1.95 million to € 15.50 million, primarily

due to reinforcements made to the professional

squad.

Other operating expenses Other operating expenses amounted to € 45.31 mil-

lion in the 2007/2008 financial year compared with

€ 36.64 million in the previous year.

This increase was primarily the result of the three

additional home matches, the resulting increased

expense for match operations and the increase in

marketing commissions and association dues in con-

nection with the successful outcome of the DFB

Cup.

DEVELOPMENT OF SIGNIFICANT OPERATING EXPENSES

Cost of materials The cost of materials increased by € 1.49 million to

€ 4.71 million. This was primarily attributable to the

increase in merchandising revenue, which included

the jersey exchange promotion with EVONIK.

Personnel expenses Personnel expenses rose year on year to € 45.36 mil-

lion (previous year: € 36.98 million). This increase

was primarily attributable to the budget of the

Bundesliga squad, which had already been increased

at the beginning of the season, the premiums paid

out upon qualifying for the DFB Cup finals and the

early qualification for the UEFA Cup Championship

for the 2008/2009 season.

FINANCIAL CONDITION

Match-winner Nelson Valdez and scorerFlorian Kringe celebrate the goal for a2:1 victory over Rot-Weiss Essen.

DFB Cup09 August 2008

RW Essen 1:3 BVB

Match day 116 August 2008

Leverkusen 2:3 BVB

Kringe, Hummels, Kehl and Subotic cele-brate Subotic's first goal in theBundesliga.

65

MANAGEMENT REPORT

Match day 223 August 2008BVB 1:1 FC Bayern

Match day 330 August 2008Cottbus 0:1 BVB

“Gimme a hug”: Goal provider NelsonValdez pursues Kuba, the scorer. Right:Munich's Christian Lell.

This is how Borussia celebrates its 1:0victory in the “stadium of friendship”.

funds from the new marketing agreement with

Sportfive. The funds were used in full to repay the

Morgan Stanley loan. Further information can be

found in the notes to the cash flow statement.

The repayment of the net credit obligation in the

amount of approximately € 59.2 million resulted in

the release of formerly pledged collateral. This will

increase future financial flexibility to make moder-

ate investments.

Analysis of investments Payments for investments in player assets amounted

to € 3.06 million and investments in tangible assets

amounted to € 1.69 million.

Analysis of liquidity As at 30 June 2008, the Borussia Dortmund Group

held cash of € 7.91 million, none of which was sub-

ject to restrictions. Furthermore, € 2.50 million in

overdraft facilities is available in full.

In 2007/2008, the completion of a non-recourse sale

of receivables made it possible to generate advance

amortisation. In contrast, current assets rose by € 4.14

million as against receivables, which rose year on

year. Cash and cash equivalents fell by € 5.99 million.

Net assets fell year on year by € 1.56 million to

€ 256.59 million as at the balance sheet date.

The reduction in non-current assets by a total of

€ 5.70 million is due primarily to depreciation and

NET ASSETS

tion with the restructuring of the liabilities side, the

room for manoeuvre in strengthening the profes-

sional squad for the future has increased.

The Borussia Dortmund Group again generated an

operating profit without having played in any lucra-

tive international competitions and can continue to

boast a solid equity ratio. Given this, and in connec-

OVERALL SUMMARY OF RESULTS OF OPERATIONS, FINANCIAL CONDITION AND NET ASSETS

66

T H E D F B C U P – M E R C H A N D I S I N G L E A V E S I T S ( T R A D E ) M A R K

67

THE DFB CUP

19 April 2008: In the photographers' sights: The BVBsquad before kick-off.

68

turing the club's colours in exactly equal pro-

portions. It goes without saying that this jer-

sey was a hot seller among fans, especially

due to the fact that it was a limited edition.

Borussia Dortmund's merchandising depart-

ment also designed a T-shirt that was soon

sold out. The bright yellow T-shirt was an eye

catcher, featuring the slogan “We're going to

Berlin” and the date of the final match, with

the BVB logo flanked by two Berlin bears. In

addition, special game day scarves and pen-

nants featuring the logos of the two clubs

To mark the day, the team's equipment

provider, Nike, created a limited-edition jer-

sey. Borussia Dortmund came to the DFB Cup

final match on 19 April 2008 in uniforms fea-

T H E D F B C U P – M E R C H A N D I S I N G L E A V E S I T S ( T R A D E ) M A R K

Up to twelve million television viewers watched the62nd DFB Cup final.

The run on admission tickets was co-ordinated by a largeteam of BVB employees. Tickets were allocated accordingto a distribution key agreed with the fan clubs.

69

were created for the final match against Bayern

Munich, as well as for the preceding semi-final

match against FC Carl Zeiss Jena and the

quarter-final against TSG 1899 Hoffenheim.

But additional sales generated by Borussia's

fan shops were not limited to textiles. The CD

“50,000 Borussians on the Spree”, which was

recorded specially to commemorate the

team's taking part in the final, was a smash hit

– and made the cash tills sing.

THE DFB CUP

Johannes B. Kerner welcomed TV viewers. His prediction that theywere in for an exciting match was no understatement.

Strong together: Brazilians Tinga and Dede (left picture) wearingthe exclusive final-jersey. Midfielders Sebastian Kehl and FlorianKringe (below right) wearing the Berlin T-shirt.

70

taxes. In addition, special payments can be made on

the basis of resolutions approved by the Executive

Committee of the Advisory Board.

The component not related to performance com-

prises a fixed annual salary and benefits in kind,

mainly derived from the amounts required to be tak-

en into account in accordance with tax regulations

e.g. for the use of company cars.

The Supervisory Board's compensation is governed

by § 13 of the Articles of Association, pursuant to

which each member of the Supervisory Board

receives fixed compensation amounting to € 7,000;

the Chairman receives twice that amount, while the

Deputy Chairman receives one and a half times that

amount. Value added tax is reimbursed to the mem-

bers of the Supervisory Board.

The structure of the compensation system for man-

agement is determined and regularly reviewed by

the Executive Committee of the Advisory Board.

The Executive Committee is also responsible for

determining the compensation of management in

detail and sets the appropriate amount of compen-

sation. The principal criteria for determining the

appropriate amount of compensation are the

responsibilities of the particular member of man-

agement, their personal performance and the finan-

cial condition, success and future prospects of

Borussia Dortmund.

As well as annual payments not related to perform-

ance and based on market rates at comparable com-

panies, the compensation includes a performance-

related component that is based on the consolidated

earnings of Borussia Dortmund GmbH & Co.

KGaA before the fixed annual salary and income

C O M P E N S AT I O N R E P O R T

71

MANAGEMENT REPORT

In order to ensure the highest possible level of trans-

parency, risk management has been incorporated

into the organisational structure of the entire Group.

Every department and division is required to report

to the management on any market-relevant changes

to the risk portfolio.

In order to ensure that the existing risks that have

already been captured are kept up to date and to

record identifiable risks, the proven risk inventory

process of previous years is being kept. At regular

intervals, every individual risk is highlighted, dis-

cussed and reviewed in terms of current circum-

stances, both in individual meetings and in plenary

meetings. Depending on the classification of the

risks by amount of loss they may cause and their like-

lihood of occurring, the necessary measures are

derived or adapted. Furthermore, a functioning risk

management system is in a position to identify weak-

nesses in the Company's internal processes, thus

With its diverse lines of business, Borussia Dort -

mund takes business decisions that allow it to seize

the opportunities offered to the Group. However,

there are risks inherent in many opportunities. While

most of these risks are of no significance to the

Company, some may jeopardise its existence. Given

the fact that certain risks must be taken in order to

sufficiently leverage opportunities, it is vital to have

a functioning control and monitoring system.

It is the responsibility of the Group's internal risk

management system to recognise, assess, monitor

and control these risks, as well as the associated

opportunities.

Borussia Dortmund's risk management system is

based on principles and guidelines laid out by the

management which are designed to enable uncer-

tainties to be identified and countermeasures to be

taken in good time.

identification, assessment and management of these

dangers define the areas of responsibility of a com-

pany's risk management system.

In the course of its business activities, the Borussia

Dortmund Group is constantly exposed to risks

which may negatively impact its operations. The

R I S K R E P O R T

RISK MANAGEMENT

7272

PERSONNEL RISKS

The commitment and performance of employees

are essential pillars of successful company develop-

ment. Quality and employee motivation will play a

decisive role in future sporting and financial success.

The professional squad and the quality thereof form

the bedrock enabling Borussia Dortmund to suc-

ceed as a company in its core business. Bad invest-

ments in relation to hiring new players can have far-

reaching effects on sporting, and thus, financial

objectives. Additionally, a lack of identification with

the Company, insufficient willingness to be part of

the team, and a lack of commitment negatively

impact performance – particularly in terms of sport

– and hence earnings. To some extent, it may how-

ever also not be possible to make up for the loss of

key players as a result of injury and, as a result, the

ability to meet internally defined objectives may be

endangered.

Yet in the economic sector as well, the use of quali-

fied specialists and executives is essential for BVB.

STRATEGIC RISKS

A key management responsibility in a football com-

pany is to appropriately balance sporting and financial

targets in terms of risk, to ensure that financial and

corporate planning are performed independently of

athletic success, and to maintain the company's prof-

itability, bringing it in line with sporting objectives.

Long-term affiliations and partnerships ensure a

certain level of planning security, independently of

sporting success. The pursuit of athletically driven

aims and the necessary measures to achieve those

aims may potentially conflict with the financial

objectives, such as ensuring adequate liquidity. The

achievement of one company objective may there-

fore make it necessary to abandon or modify anoth-

er objective. In such cases, management will weigh

up the risks and opportunities and attempt to find a

solution that is broadly in line with the strategic

objectives from a medium-term point of view, while

remaining within the range of defined company per-

formance indicators in order not to jeopardise the

financial objectives.

SPECIFIC RISKS

The governing bodies of Borussia Dortmund

received regular reports on the risk inventories per-

formed in the past year, and the results thereof, and

were thus kept informed of the Company's current

risk situation. The efficiency and effectiveness of the

risk management system is examined as part of the

audit carried out by the Company's auditors.

offering the opportunity to counter these weakness-

es through early recognition.

The observance of targets is monitored using a

system of regular reporting. Particular emphasis is

placed here on high priority risks which could sig-

nificantly jeopardise the continuing existence of

Borussia Dortmund.

73

MANAGEMENT REPORT

73

collaboration with Sportfive GmbH & Co. KG,

which is a leader in marketing sporting rights

throughout Europe and has access to an interna-

tional network – reduces the risk that it will not be

possible to win over new sponsors, keep existing

ones and maintain sponsor relationships.

SALES RISKS

The success of the individual lines of business

depends on demand, which in turn depends heavily

on sporting success or is based on sympathy with

those involved. In order to reduce the risk of a lack

of demand, Borussia Dortmund extended agree-

ments early with key partners, thus following the

strategy of securing long-term relationships with

business partners in order to create together a foun-

dation for the future and to ensure a basis for plan-

ning security.

However, the Company can do little to counteract

the reduction in demand caused by statutory provi-

sions (ban on advertising certain products, smoking

ban, ban on alcohol at sporting events). It can mere-

ly consider possible solutions to the problem in

advance in order to prepare appropriate measures.

Additionally, the Federal Cartel Office's rejection of

the German Football Association's marketing mod-

el for broadcasting Bundesliga matches beginning

in 2009/2010 will also have an effect on the amount

of future revenues. Borussia Dortmund will not be

in a position to influence this circumstance.

The League Association and the umbrella associa-

tion DFL are also aware of these risks. It will be

important in the coming years to systematically

Taking the right strategic decisions and thus laying

the groundwork early on for a secured future inde-

pendent of sporting success is the basis for the

Company's success. The ability to act with foresight

is a testament to the quality of the employees used.

Borussia Dortmund's organisational structure, with

clear structures and areas of responsibilities was

designed to ensure the separation of the specialist

departments. This enables business decisions to be

analysed and prepared in individual departments

with the relevant expertise before a decision is made

for the Company as a whole. The constant exchange

between the corporate divisions is essential to opti-

mising the quality of the decisions made and avoid-

ing conflicts of objectives.

COMPETITIVE RISKS

Especially in recent years, the playing field for foot-

ball clubs has been levelled out, in both sporting and

economic terms. The economic discrepancy in size

that exists in other European leagues can be more or

less ruled out, e.g. by centralised TV marketing,

since every club is guaranteed a minimum amount.

The table rankings in recent years have also shown

that the presumed smaller clubs are certainly able

to hold their own in competition. The increasing

balance within the league means that potential cus-

tomers will increasingly be spread thinner over a

larger group, with competition for sponsors growing

fiercer. To complicate matters further for some

clubs, sponsors are assessed differently according to

region. This could mean that a partnership is for-

bidden for one club but permitted for its competi-

tors. Extending co-operations with professional

partners – such as the extension until 2020 of the

7474

called liquidity risk. This risk is continuously moni-

tored and mitigated as part of the Company's liquid-

ity policy and planning under consideration of expect-

ed cash flows.

RISKS JEOPARDISING PERFORMANCEAND CONTINUED EXISTENCE

In order to participate in Bundesliga matches, every

club – and hence Borussia Dortmund as well –

requires a licence from Deutsche Fußball Liga for at

least one season. Financial performance is linked to

e.g. the presumption of positive equity and proof of

sufficient liquidity to ensure match operations for the

duration of the season in question. If the licence

were to be revoked or denied because of failure to

comply with conditions or evidence of inability to

meet financial criteria, this would result in automat-

ic relegation.

But relegation to the Second Bundesliga can also

result from lack of sporting success. The effects of

relegation on earnings and liquidity could materially

and lastingly adversely affect the Company's net

assets, financial position and results of operations.

implement the prepared strategies. In that regard,

the political arena is gaining importance. Central

issues of media marketing, transfer conditions and

match operation itself are subject to increasing

political influence. The internationalisation of the

media, advertising, labour and capital markets does

not stop at borders. Each of these factors will affect

the future of professional football.

FINANCIAL RISKS

Interest rate riskAfter the repayment of the line of credit with

Morgan Stanley International Bank Limited and due

to the fixed-interest credit agreements entered into

for the coming years, the Group is not subject to any

interest rate risk.

Credit riskThe Group companies conduct business exclusively

with third parties of high credit standing. Credit risk

can arise in the context of a player transfer and from

long-term sponsorship agreements, as well as from

centralised marketing agreements.

Liquidity riskThe danger of at some point not being able to meet

payment obligations in a timely manner and in full is

THE RISK SITUATION IN SUMMARY

the existence of the Group or the individual compa-

nies in the past year. No concrete development is

presently identifiable that could materially and last-

ingly impact Borussia Dortmund's net assets, finan-

cial position and results of operations or continued

existence in the future.

There have been no material changes to the Group's

risk situation since the last report. Thanks to its risk

management system, Borussia Dortmund is in a

position to meet the statutory provisions with regard

to control and transparency in the Company.

A review of the overall risk situation has concluded

that in the past year, no risks existed that jeopardised

75

MANAGEMENT REPORT

75

ANTICIPATED DEVELOPMENT OF THE COMPANY

R E P O R T O N E X P E C T E D D E V E L O P M E N T S

again to qualify for slots in international competitions

over the medium term.

We will maintain the course we have been following

for several seasons now – one of striving for sporting

success from a sound equity base while avoiding finan-

cial risks – in order to re-establish ourselves at the top

ranks of the Bundesliga over the medium term.

After having entered into the agreement with its

marketing partner Sportfive and repaying the

Morgan Stanley loan, Borussia Dortmund believes

that it is in a position to invest more in its profes-

sional squad, as well as to finance its personnel

expenses from operating activities long-term, with-

out needing to take on additional debt. Borussia

Dortmund expects that this will put it in a position


as well as the familiar faces of Jürgen Klopp and Ralf

Rangnick – the new Bundesliga season already pro-

mises to be a suspenseful and entertaining one.

Even though it will be necessary to rethink the struc-

ture of the new TV marketing agreement to bring it

in line with legal rulings, the product on offer is still

top-notch and its market value is unquestionably

high. The sound financial decision-making of the

Bundesliga clubs puts them in a position to draw star

athletes into the league, and will surely enable them

to make a big play every now and again, as well.

The trend of rising popularity of the football

Bundesliga observed in recent years seems to be con-

tinuing into the 2008/2009 season. Based on season

ticket sales, the first division clubs are already head-

ed towards record spectator numbers for the season

that has just begun.

This trend is impressive proof of how attractive the

Bundesliga is. Given high level of quality and per-

formance of all of the teams in the league and the new

generation of coaches – featuring new faces such as

Jürgen Klinsmann, Fred Rutten and Bruno Labbadia,

EXPECTED RESULTS OF OPERATIONS

The management generally expects to generate a

consolidated operating profit (EBIT) for 2008/2009.

ANTICIPATED EARNINGS DEVELOPMENT

In 2008/2009, earnings will again depend heavily on

the key factor of sporting success. In particular, suc-

cessful participation in the UEFA Cup can impact

earnings for the year accordingly.

76

EXPECTED FINANCIAL CONDITION

CAPITAL EXPENDITURE PLANNING

Going forward, the focus of our investing activities

will lie on strengthening the professional squad and

in further upgrading SIGNAL IDUNA PARK.

Construction of the “Borusseum” extension in the

northeast corner of the stadium, where the history of

Borussia Dortmund will be housed, has made much

progress. The Borusseum will celebrate its grand

opening in 2009. This renovation/construction project

also includes a bridge linking the fan shop in the

August Lenz building to the corner of the stadium.

FINANCIAL PLANNING

We will continue to reduce our liabilities as sched-

uled in financial year 2008/2009 by repaying in instal-

ments the long-term stadium financing. We do not

intend to take on new liabilities.

The amount of the other liabilities in the context of

our operating activities will be relatively unchanged.

76

Equally, the Company expects that expenses for mar-

keting commissions paid to Sportfive will increase,

in particular as a result of expected increases in rev-

enues, which cause expenses to rise proportionately.

Borussia Dortmund is intent on maintaining all oth-

er operating expenses at the same level, or even low-

ering them, in order to comply with savings meas-

ures introduced in previous years.

EXPECTED DIVIDENDS

Following its repayment of the Morgan Stanley loan,

the KGaA still reports liabilities in the amount of

€ 68.76 million on its balance sheet. In spite of the

resulting potential rise in earnings power and the pos-

itive results of recent years, a dividend payment would

not be appropriate until Borussia Dortmund has re-

established itself on the international sporting scene

and generated long-term, substantial profits.

ANTICIPATED DEVELOPMENT OF REVENUES

As a result of our successful performance in the DFB

Cup competition, revenues in the past season rose to

€ 107.56 million – a result that will be difficult to

repeat without a similar sporting success, even con-

sidering the strong demand for season tickets, sold-

out hospitality suites in the stadium and the success-

ful marketing of advertising space in and around

SIGNAL IDUNA PARK.

As in previous years, we would like to point out here

that sporting success or increased transfer activities

could cause this level to rise considerably.

ANTICIPATED DEVELOPMENT OF SIGNIFICANT OPERATING EXPENSES

Expenses for professional players will be increased

in the 2008/2009 season in order to further guaran-

tee and increase the competitiveness of the profes-

sional squad.

77

MANAGEMENT REPORT

These surpluses will continue to provide us with the

leeway needed to strengthen the professional team,

as well as to repay the long-term stadium financing

on schedule.

ANTICIPATED DEVELOPMENT OF LIQUIDITY

Due to the consolidated operating profit and the

repayment of the Morgan Stanley loan, Borussia

Dortmund will continue to be in a position in the

future to generate substantial financial surpluses.

OPPORTUNITIES

against. Particularly in the UEFA Cup, BVB could

face a tough opponent in the first round for which it

must rely on fate in the drawing.

No discussion of the sporting aspects would be com-

plete without mention of the youth of the squad.

Despite the fact that in comparison with the previ-

ous season the average age of the squad has fallen,

the squad still possesses considerable potential.

Furthermore, many key players, such as Sebastian

Kehl, have signed long-term commitments with

BVB.

In addition to the increased earnings mentioned

above resulting from sporting success, the profes-

sional squad offers tremendous transfer potential for

the future.

Its involvement in international competition will pro-

vide the young Borussia team an opportunity to gen-

erate additional revenues again for the first time,

attributable to TV, sponsorship and ticketing revenues.

In addition, the 2007/2008 season demonstrated that

the successful participation in the national DFB Cup

can lead to strong additional revenues. Both compe-

titions represent a major opportunity for Borussia

Dortmund to increase its consolidated net profit.

Additionally, a successful sporting season can also be

expected to translate into higher merchandising sales,

leading in turn to rising revenues for this division.

However, these opportunities also depend to a great

extent on which teams Borussia Dortmund is drawn

DEVELOPMENT FORECAST IN SUMMARY

in making these investments. Thanks to our

increased financial flexibility, however, we have

already been able to sign key players this season,

such as Neven Subotic, Tamas Hajnal, Patrick

Owomoyela and Mohamed Zidan.

We will continue to strive to reclaim our place among

the leading Bundesliga clubs in the medium term.

The extension of our partnership with the marketing

agency Sportfive and the subsequent repayment of

financial liabilities to Morgan Stanley have again

placed Borussia Dortmund in the comfortable posi-

tion to be able to invest more in its professional

squad in order to systematically improve its compet-

itiveness. In keeping with our policy of previous

years, we assumed no unforeseeable financial risks

78

T H E D F B C U P – S P O N S O R A D V E R T I S I N G

79

THE DFB CUP

Three of BVB's six Cup matches in the 2007/2008 seasonwere broadcasted live on public television, offering sponsorsa massive platform.

80

verbundene Qualifikation für den UEFA-Cup auch

in Leistungsprämien für das börsennotierte

Unternehmen niederschlägt.

Drei der sechs Partien wurden live im öffent-

Durch das Erreichen des DFB-Pokal-Endspiels

hat Borussia Dortmund in der vergangenen Sai-

son auch seinen Partnern und Sponsoren einen

Mehrwert verschafft, der sich durch die damit

D E R D F B - P O K A L – W E R B U N G F Ü R S P O N S O R I N G

Die BVB-Partner ins rechteLicht gesetzt: Dede und derBremer Diego tragen ihr Duellvor dem Schriftzug der Signal-Iduna-Gruppe aus.

80

the listed company in the form of performance

bonuses.

Three of the six matches were broadcast live on

public television: Over six million viewers, on

Reaching the DFB Cup final last season meant

that Borussia Dortmund also created value for its

partners and sponsors. The automatic qualifica-

tion for the UEFA Cup also meant added value for

T H E D F B C U P – S P O N S O R A D V E R T I S I N G

BVB's partners in the spotlight:Dede and Bremen's Diego duelit out in front of the SignalIduna Group's logo.

81

Das Endspiel zwischen Borussia Dortmund und

dem FC Bayern München verfolgten im Schnitt

10,3 und in der Spitze sogar zwölf Millionen

Zuschauer. Die Quoten entsprachen Marktanteilen

von 33,7 bzw. 39,8 Prozent, womit laut Kress-

Report der höchste Marktanteil eines DFB-Pokal-

finales seit 1987 erreicht wurde.

lich-rechtlichen Fernsehen ausgestrahlt: Das

Achtelfinale gegen Werder Bremen, das Borus-

sia Dortmund mit 2:1 gegen Werder Bremen

gewann, verfolgten im Durchschnitt über sechs

Millionen TV-Zuschauer. Beim Halbfinale gegen

Carl Zeiss Jena saßen durchschnittlich 5,5 Mil-

lionen Deutsche vor ihren Fernsehschirmen.

ww

w.e

voni

k.de

Wir stehen hinter dem BVB.

Sponsoren nutzen die BVB-Medien BORUSSIA aktuell sowie BVB-SPIELTAGund BORUSSIA online zur Platzierung

ihrer Marketingkommunikation. Die direkteZielgruppenansprache ist ihnen gewiß.

81

10.3 million viewers, with as many as 12 million

watching at the peak. These numbers represen-

ted market shares of 33.7% and 39.8%, respec-

tively, thus representing the greatest market

share for any DFB Cup final since 1987, according

to the Kress Report.

average, watched the second round match

against Werder Bremen, which Borussia Dort-

mund won 2:1. 5.5 million Germans, on average,

were glued to their screen watching the semi-

final against FC Carl Zeiss Jena.

The final, which pitted Borussia Dortmund

against FC Bayern Munich, drew an average of

DER DFB-POKAL

ww

w.e

voni

k.de

Wir stehen hinter dem BVB.

Sponsors use BVB publications such as BORUSSIAaktuell, BVB-SPIELTAG and BORUSSIA online toplace their marketing communications, which offersure-fire access to the target group.

8282

R E P O R T O N P O S T B A L A N C E S H E E T D AT E E V E N T S

with an attractive opponent in the form of Hertha

BSC Berlin, also a Bundesliga club. The match is

expected to be played on 23 or 24 September 2008 at

SIGNAL IDUNA PARK.

After the second match day in the football

Bundesliga, Borussia Dortmund was in fourth place,

providing a good start into the 2008/2009 season. No

one expected an away win against Bayer 04

Leverkusen and a tie against FC Bayern Munich at

SIGNAL IDUNA PARK, when the match schedule

was published for the first half of the season. Coach

Jürgen Klopp's team laid a good foundation for the

current season.

Borussia Dortmund got off to a good start in the sea-

son from a financial perspective as well, since adding

Brilliance Motors as a new Champion Partner. The

partners are planning a long-term alliance above and

beyond the current term of their agreement until

2010.

Just prior to the end of the transfer period for the

first half of the 2008/2009 season, BVB signed strik-

er Mohamed Zidan from Hamburger Sportverein.

The player signed a four-year contract expiring on 30

June 2012.

In return, HSV signed Mladen Petric. The clubs

have agreed to maintain confidentiality over the

terms of release.

Borussia Dortmund is pleased to announce that it

has sold 49,500 season tickets for 2008/2009, once

again underscoring Dortmunders' high level of

enthusiasm for and excitement in anticipation of

football in SIGNAL IDUNA PARK.

From the sporting point of view, things are looking

distinctly encouraging. The additions of Lukas

Kruse, Felipe Santana, Patrick Owomoyela, Neven

Subotic, Tamas Hajnal, Bajram Sadrijaj and

Mohamed Zidan to the roster of coach Jürgen Klopp

mean that the team is quantitatively und qualitative-

ly even better positioned than in the prior season.

“We have succeeded in giving the squad more depth,

and the sense of competition within the team has

increased,” concluded sport director Michael Zorc.

Head coach Jürgen Klopp is also convinced that this

will result in an ability to produce better perform-

ances and more attractive football. He hopes that his

team will provide “positive surprises in all three com-

petitions”.

Already before the start of the 2008/2009 Bundesliga

season, Borussia Dortmund has given a positive sign

of its sporting potential. Coach Jürgen Klopp's team

beat Rot-Weiss Essen in the DFB Cup. In addition

to scorers Hajnal and Kringe, Nelson Valdez also

scored a goal in the match with a final score of 1:3.

The draw for the 2nd main round of the DFB Cup

on 24 August 2008 provided Borussia Dortmund

83

MANAGEMENT REPORT

5. There is no control of voting rights in cases where

employees are shareholders.

6. Because of its legal form as a partnership limited

by shares, Borussia Dortmund GmbH & Co.

KGaA does not have a management board.

Instead, the Company's management and repre-

sentation is the responsibility of the general part-

ner. The terms of § 6 No. 1 of the Articles of

Association provide that this executive body of the

Company is Borussia Dortmund Geschäfts -

führungs-GmbH, whose registered office is in

Dortmund, on a permanent basis and not for a

limited period of time, by virtue of its status as a

shareholder. The appointment and removal of

managing directors of Borussia Dortmund

Geschäftsführungs-GmbH is governed by § 8 No.

6 of its shareholders' agreement and is the

responsibility of the Executive Committee of its

Advisory Board, and therefore not of the

Supervisory Board of Borussia Dortmund GmbH

& Co. KGaA.

In principle, changes may be made to the Articles

of Association of Borussia Dortmund GmbH &

Co. KGaA only by a resolution of its General

Shareholders' Meeting, which must be passed, in

accordance with § 133 (1) AktG, by a simple

majority of votes and also, in accordance with § 15

No. 3 of the Articles of Association of the

Company together with § 179 (1) and (2) AktG, by

a simple majority of the capital represented at the

passing of the resolution, except to the extent that

there are mandatory statutory provisions to the

contrary or the Articles of Association provide oth-

The Company gives the following information in

response to the requirements of § 315 (4) Nos. 1 to

9 HGB:

1. The share capital of Borussia Dortmund GmbH

& Co. KGaA amounts to € 61,425,000.00 and is

divided into 61,425,000 no-par value ordinary

bearer shares. All of the shares have been admit-

ted to trading on the Official Market (General

Standard) of the Frankfurt Stock Exchange and

in the over-the-counter markets (Regulated

Unofficial Markets) in Berlin, Bremen, Stuttgart,

Munich, Hamburg and Düsseldorf. Each no-par

value share entitles the holder to one vote at the

General Shareholders' Meeting. The Company

therefore has only one class of shares and all

shares carry the same rights and obligations.

Additional rights and responsibilities attaching to

the Company's shares are determined in accor-

dance with the German Stock Corporation Act

(Aktiengesetz, “AktG”).

2. There are no restrictions affecting the voting

rights or transfer of the shares.

3. As of 30 June 2008, the Company had been noti-

fied of the following interests in the share capital

of Borussia Dortmund GmbH & Co. KGaA in

excess of 10% of the voting rights:

– Morgan Stanley International Limited: 16.25%

– Blue Bay Asset Management: 14.99%

4. There are no shares with special rights which con-

fer powers of control.

REPORT IN ACCORDANCE WITH § 315 (4) HGB

O T H E R D I S C L O S U R E S

8484

from the beginning of the financial year in which

they are issued. The general partner is further

authorised, with the approval of the Supervisory

Board, to disapply the statutory subscription right

of the limited liability shareholders in certain cir-

cumstances.

In addition, by a resolution of the General

Shareholders' Meeting held on 22 November

2005, the share capital of Borussia Dortmund

GmbH & Co. KGaA has been conditionally

increased by up to € 14,625,000.00 by the issue of

up to 14,625,000 new no-par value ordinary bear-

er shares. The general partner is authorised until

31 October 2010, with the approval of the

Supervisory Board, to issue bearer bonds with

warrants and/or convertible bonds with a total

nominal amount of up to € 40,000,000.00 and a

maximum maturity of 25 years on one or more

occasions. The holders of bonds with warrants may

be granted rights to subscribe for, and the holders

of convertible bonds may be granted rights to con-

vert into, a total of up to 14,625,000 new no-par

value ordinary bearer shares of the Company in

accordance with the detailed terms and conditions

of the bonds with warrants and/or convertible

bonds.

In the event of a takeover offer for shares issued

by the Company and admitted to trading on an

organised market, general statutory responsibili-

ties and powers also apply to the general partner.

For example, if a takeover offer were to be

received, the general partner and the Supervisory

Board would be required to issue and publish a

response to the offer, giving their reasons, in

accordance with § 27 of the German Securities

Acquisition and Takeover Act (Wertpapierer -

werbs- und Übernahmegesetz, “WpÜG”), so that

the limited liability shareholders can make a deci-

sion on the offer on an informed basis. Moreover,

in accordance with § 33 WpÜG, once a takeover

offer has been announced, the general partner

erwise. It is a mandatory provision of statute that

a resolution of the General Shareholders' Meeting

passed by a majority of three-quarters of the share

capital represented at the passing of the resolution

is required for changes to the Articles of

Association relating to the objects of the Company

(§ 179 (2) sentence 2 AktG), the issuance of non-

voting preferred shares (§ 182 (1) sentence 2

AktG), capital increases where subscription rights

have been disapplied (§ 186 (3) AktG), the cre-

ation of conditional capital (§ 193 (1) AktG), the

creation of authorised capital (§ 202 (2) AktG) –

where appropriate with authorisation to disapply

subscription rights (§ 203 (2) sentence 2 together

with § 186 (3) AktG) –, the ordinary or simplified

reduction of capital (§ 222 (1) sentence 2 and/or

§ 229 (3) AktG) or a change of legal form (§ 233

(2) and/or § 240 (1) German Reorganisation Act

(Umwandlungsgesetz, “UmwG”)). In addition,

capital increases, other changes to the Articles of

Association and other decisions of a fundamental

nature may only be resolved with the approval of

the general partner, in accordance with § 285 (2)

sentence 1 AktG. The Supervisory Board is autho-

rised in accordance with § 12 No. 5 of the Articles

of Association to resolve changes to the Articles of

Association which relate only to their wording, in

particular in connection with the amount of capi-

tal increases out of authorised and conditional

capital.

7. In accordance with § 5 No. 4 of the Articles of

Association of Borussia Dortmund GmbH & Co.

KGaA, the general partner is authorised until 31

July 2011, with the approval of the Supervisory

Board, to increase the share capital by the issue of

up to 21,937,500 new no-par value ordinary bear-

er shares against cash or non-cash contributions

on one or more occasions, but by a maximum of

€ 21,937,500.00 in total (Authorised Capital 2006).

In all cases, the new shares participate in profits

85

MANAGEMENT REPORT

85

§§ 33a – 33c WpÜG (European prohibition on

frustrating action, European breakthrough rule,

reservation of reciprocity).

8. The Company is not a party to any material agree-

ments which are conditional on a change of con-

trol following a takeover offer for the issued shares

of Borussia Dortmund GmbH & Co. KGaA.

9. The Company is not a party to any compensation

agreements applying in the event of a takeover

offer.

may not take any actions outside the ordinary

course of business which could frustrate the suc-

cess of the offer, unless those actions have been

authorised by the General Shareholders' Meeting,

or the Supervisory Board has given its approval to

the actions or the actions relate to obtaining a

competing offer. In making their decisions, the

general partner and the Supervisory Board are

bound to have regard to the interests of the

Company, its employees and its shareholders. At

the balance sheet date, there were no provisions of

the Articles of Association within the meaning of

that was in each case reasonable under the circum-

stances known to us at the time such transactions

were entered into. In all other cases, the Company

has been compensated for any disadvantages having

arisen. No other measures within the meaning of

§ 312 (1) AktG were taken or omitted during the

financial year.

Dortmund, 29 August 2008


Borussia Dortmund Geschäftsführungs- GmbH

The Dependent Company Report prepared by

Borussia Dortmund GmbH & Co. KGaA pursuant

to § 312 AktG sets out the relations with BV. Borussia

09 e.V. Dortmund as the controlling entity and its

affiliated companies. The general partner – repre-

sented by its Managing Directors – issued the fol-

lowing concluding statement:

With respect to the transactions set out in the report

concerning relations with affiliated companies, the

Company received consideration in the financial year

STATEMENT OF THE GENERAL PARTNER CONCERNING RELATIONS WITH AFFILIATED COMPANIES



86

T H E D F B C U P – A N E Y E O N B E R L I N …

87

THE DFB CUP

19 April 2008: An almost unbearable tension before kick-off –the singing of the national anthem.

88

. . . A N E Y E O N D O R T M U N D

89

THE DFB CUP

19 April 2008: In Dortmund, thousands gather together towatch the deciding moment.

90

Of course, there is no comparison with such fig-

ures for the DFB Cup. Yet, when people speak of

BVB, they also mean Dortmund. The hotel indus-

try profited from the four evening matches

against Frankfurt, Bremen, Hoffenheim and Jena,

with away fans booking overnight stays. Quarter-

finalist opponent Hoffenheim alone drew over

7,000 fans to Dortmund at the end of February.

Many of them enjoyed dining out in Dortmund.

The image factor and advertising effect of foot-

ball are well known. The City of Dortmund esti-

mates that the 2006 FIFA World Cup brought in

¤200 million in advertising revenue.

THE DFB CUP – AN EYE ON BERLIN, AN EYE ON DORTMUND

The DFB Cup final gives rise to a festiveatmosphere in Dortmund. Entertainment isguaranteed.

... fans packed Friedensplatz inDortmund to root for theirteam.

A tale of two cities: While half of the Olympic Stadium in Berlin cheered Borussia Dortmund on…

91

The public viewing on the day of the final and the

team's return 24 hours later on Friedensplatz,

with over 20,000 visitors in total, were the high

points of last year's cup season. The local econ-

omy also benefited from these events – from

restaurants and pubs to street vendors.

THE DFB CUP

Franco-Brazilian duel in Berlin's Olympic Stadium: Dortmund'sTinga attacks Munich's Ribery.

"We are proud of this team and nothing can stop

us from celebrating it.", said Lord Mayor Dr.

Gerhard Langemeyer. The name of his city was

once again on everyone's lips in Germany.

Thanks to BVB.

BVB bench in Berlin: President Dr. Reinhard Rauball (2nd from left)and Hans-Joachim Watzke, Managing Director and Chairman (r.),greeted former Chancellor and honorary BVB member Dr. GerhardSchröder (2nd from right), as well as his friend, the CEO of AWDHolding AG, Carsten Maschmeyer (l.).

Even the Lord Mayor is deckedout in black and yellow:

Dr. Gerhard Langemeyer.

92

* The relevant sections in the notes can be found on the following pages: (1) (2) – p. 106, (3) – p. 107, (4), (5) – p. 108, (6) – p. 109, (7), (8) – p. 110, (9) – p. 112, (10) – p. 113, (16) – p. 116.

C O N S O L I D AT E D B A L A N C E S H E E T

A S S E T S Note* 30 June 2008 30 June 2007in EUR thousands in EUR thousands

Non-current assets

Intangible assets (1) 15,398 14,866Property, plant and equipment (2) 189,719 195,485Investments in associates (3) 184 189Financial assets (4) 309 253Trade receivables and other assets (5) 7,013 7,608Deferred tax assets (16) 6,495 6,420

219,118 224,821

Current assets

Inventories (6) 1,713 1,724Trade receivables and other assets (5) 27,851 17,700Cash and cash equivalents (7) 7,912 13,905

37,476 33,329

256,594 258,150

E Q U I T Y A N D L I A B I L I T I E S

Equity (8)

Subscribed capital 61,425 61,425Reserves 19,187 24,939Own shares -140 -142Equity attributable to shareholders 80,472 86,222Minority interest 332 314

80,804 86,536

Non-current liabilities

Non-current financial liabilities (9) 63,596 122,652Non-current trade payables 1,150 245Other non-current liabilities (10) 51,165 6,124Non-current income tax liabilities (16) 3,232 4,232Deferred tax liabilities (16) 0 1,934

119,143 135,187

Current liabilities

Current financial liabilities (9) 5,220 6,288Current trade payables 10,685 5,022Other current liabilities (10) 39,030 21,448Current income tax liabilities (16) 1,712 3,669

56,647 36,427

256,594 258,150

* The relevant sections in the notes can be found on the following pages: (11), (12), (13) – p. 115, (14), (15), (16) – p. 116, (20) – p. 120.

93


C O N S O L I D AT E D I N C O M E S TAT E M E N T

Note* 2007/08 2006/07in EUR thousands in EUR thousands

Revenues (11) 107,559 97,115

Other work performed by the Company and capitalised 90 0

Other operating income 8,626 8,864

Cost of materials -4,707 -3,218

Personnel expenses (12) -45,355 -36,981

Depreciation and amortisation (13) -15,501 -13,546

Other operating expenses (14) -45,306 -36,639

Profit from operating activities 5,406 15,595

Income from investments in associates 45 13

Other interest and similar income 935 1,065

Interest and similar expenses -11,089 -9,595

Financial result (15) -10,109 -8,517

Profit/loss before income taxes -4,703 7,078

Income taxes (16) 759 3,037

Consolidated net profit/loss for the year -3,944 10,115

- of which attributable to shareholders: -4,018 10,067

- of which minority interest: 74 48

Earnings per share: (20) -0.07 0.17

94

C O N S O L I D AT E D S TAT E M E N T O F C H A N G E S I N E Q U I T Y

S TAT E M E N T O F C H A N G E S I N N O N - C U R R E N T A S S E T S

Subscribed Capital Other revenue Revaluation OwnCapital reserves reserves reserve shares

30 June 2006 43,875 14,230 -20,642 0 -143

Distributions 0Capital increase 17,550 19,548Sale of own shares 1

61,425 33,778 -20,642 0 -142Consolidated net profitfor the year 10,067Cashflow hedges, net of tax 1,736

Total comprehensive income 0 0 10,067 1,736 0

30 June 2007 61,425 33,778 -10,575 1,736 -142

Distributions 0Sale of own shares 2 2

61,425 33,780 -10,575 1,736 -140Consolidated net profit/loss for the year -4,018Cashflow hedges, net of tax -1,736

Total comprehensive income 0 0 -4,018 -1,736 0

30 June 2008 61,425 33,780 -14,593 0 -140

in EUR thousands

Reserves

CostAt At

1 July 2007 Additions Disposals Reclassifications 30 June 2008

Intangible assets

Player registrations 31,172 7,815 1,463 3,671 41,195

Industrial property rights and similar rights 1,499 0 339 0 1,160

Payments on account 3,671 0 0 -3,671 0

36,342 7,815 1,802 0 42,355

Property, plant and equipment

Land, land rightsand buildings including buildings onthird-party land 207,887 199 1,474 0 206,612

Other equipment, operating and office equipment 26,631 2,490 1,132 0 27,989

Payments on account and assets under construction 0 301 0 0 301

234,518 2,990 2,606 0 234,902

Investments in associates 189 0 5 0 184

Financial assets 253 85 29 0 309

271,302 10,890 4,442 0 277,750

in EUR thousands


95

Equityattributable to Minority Consolidatedshareholders interest equity

37,320 304 37,624

-38 -3837,098 37,098

1 174,419 266 74,685

10,067 48 10,1151,736 1,736

11,803 48 11,851

86,222 314 86,536

-56 -564 4

86,226 258 86,484

-4,018 74 -3,944-1,736 -1,736

-5,754 74 -5,680

80,472 332 80,804

Depreciation and amortisation Carrying amountsAt At At At

1 July 2007 Additions Disposals 30 June 2008 30 June 2008 30 June 2007

20,005 6,762 955 25,812 15,383 11,167

1,471 12 338 1,145 15 28

0 0 0 0 0 3,671

21,476 6,774 1,293 26,957 15,398 14,866

26,728 6,829 1,474 32,083 174,529 181,159

12,305 1,898 1,103 13,100 14,889 14,326

0 0 0 0 301 0

39,033 8,727 2,577 45,183 189,719 195,485

0 0 0 0 184 189

0 0 0 0 309 253

60,509 15,501 3,870 72,140 205,610 210,793

96

Borussia Dortmund

* see Note (17) – p. 118.

see Note (17) 2007/08 2006/07

Profit/loss for the period before taxes -4,703 +7,078

Depreciation and amortisation of non-current assets +15,501 +13,546

Loss from disposals of non-current assets -4,281 -6,767

Interest income -935 -1,065

Interest expense +11,089 +9,595

Income from investments in associates -45 -13

Changes in other assets not classified as from investing

or financing activities -11,701 +3,639

Changes in other liabilities not classified as from investing

or financing activities +63,338 -6,634

Interest received +478 +251

Interest paid -9,130 -9,504

Income taxes paid -3,055 -1,590

Change in restricted funds +19 +3,589

Cash flows from operating activities +56,575 +12,125

Payments for investments in intangible assets -3,056 -13,619

Proceeds from disposals of intangible assets +4,543 +6,065

Payments for investments in property, plant and equipment -1,693 -2,578

Payments for investments in financial assets -84 -78

Proceeds from financial assets +29 +26

Dividends received +50 0

Cash flows from investing activities -211 -10,184

Cash receipts from the issue of capital 0 +15,135

Proceeds from the sale of own shares +4 +1

Dividends paid to minority shareholders -56 -38

Proceeds from finance raised +19,690 0

Repayments of financial liabilities -81,773 -32,447

Repayments of liabilities from the finance lease -203 -99

Cash flows from financing activities -62,338 -17,448

Net change in cash funds -5,974 -15,507

Cash funds at beginning of period +13,886 +29,393

Cash funds at end of period +7,912 +13,886

in EUR thousands

CONSOLIDATED CASH FLOW STATEMENT


• IFRS 7 “Financial Instruments: Disclosures”

• IFRIC 10 “Interim Financial Reporting and

Impairment”

• IFRIC 11 “IFRS 2: Group and Treasury Share

Transactions”

The first-time adoption of IFRS 7 has led to addi-

tional disclosures in the notes in connection with

financial instruments. The remaining accounting

standards adopted for the first time had no effect

on the assets, liabilities, financial position and

profit or loss of the Group.

The IASB has also issued the following standards,

interpretations and amendments to existing stan-

dards that have completed the official EU

endorsement process but whose adoption is not

yet mandatory. No use has been made of the

option of early adoption. The future application of

the following standard is not expected to have any

effect on the consolidated financial statements:

• IFRS 8 “Operating Segments”

In order to improve the clarity and usefulness of

the financial information, certain items in the

income statement and the balance sheet have

been combined. These items are reported sepa-

rately and explained in the notes. The income

statement was prepared in accordance with the

nature of expense method.

The consolidated financial statements are pre-

sented in thousands of euros.

By a resolution dated 29 August 2008, the con-

solidated financial statements and the Group

management report were authorised by the

Company's management for submission to the

Supervisory Board.

POLICIES AND METHODS

Borussia Dortmund GmbH & Co. KGaA (“BVB”)

has its headquarters at Rheinlanddamm 207-209,

Dortmund, Germany. BVB's professional team

has participated in the 1stBundesliga for more

than three decades. In addition, BVB Group

companies are engaged in the sale of merchan-

dise, the provision of internet and travel agency

services, the running of a medical rehabilitation

centre and the operation of the football stadium

in Dortmund, trading under the name SIGNAL

IDUNA PARK.

These consolidated financial statements of BVB

for the financial year from 1 July 2007 to 30 June

2008, including the prior-year information, were

prepared in accordance with International

Financial Reporting Standards (IFRS), as adopt-

ed in the European Union and in force at the bal-

ance sheet date, and the supplementary provi-

sions of German commercial law required to be

observed in accordance with § 315 HGB and

§ 315a (1) HGB. The term “IFRS” includes the

recent International Financial Reporting

Standards (IFRS) and the International Account -

ing Standards (IAS) issued by the International

Accounting Standards Board (IASB) in London

as well as the interpretations of the International

Financial Reporting Interpretations Committee

(IFRIC) and the Standing Interpretations

Committee (SIC).

The following accounting standards and interpre-

tations, or amendments of existing standards,

were required to be adopted for the first time in

the past financial year:

• Amendments to IAS 1 “Presentation of

Financial Statements”

97

BASIC PRINCIPLES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Orthomed GmbH, in which the Group holds

33.33% of the shares and of the voting rights, has

been included in the consolidated financial state-

ments as an investment in associates under the

equity method in accordance with IAS 28.

98

Borussia Dortmund

SCOPE OF CONSOLIDATION

In addition to Borussia Dortmund GmbH & Co.

KGaA, the consolidated financial statements

include seven (prior year: seven) fully consolidat-

ed subsidiary companies and one associated com-

pany accounted for using the equity method.

company. Where companies consolidated had a

different balance sheet date in the previous finan-

cial year, interim financial statements were pre-

pared as at the reporting date of the parent com-

pany. The investment in the associate Orthomed

GmbH was measured on the basis of annual

financial statements for the calendar year. Interim

CONSOLIDATION PRINCIPLES

The annual financial statements of the companies

included in BVB's consolidated financial state-

ments are prepared in accordance with IFRS

using consistent accounting policies.

The reporting date for the consolidated financial

statements is the reporting date of the parent

The list of shareholdings as at 30 June 2008 and 30 June 2007 was as follows:

Company Registered Shareholdingoffice (%)

BVB Stadionmanagement GmbH Dortmund 100.00

BVB Stadion Holding GmbH

(formerly: goool.de Sportswear GmbH) Dortmund 100.00

Sports & Bytes GmbH Dortmund 100.00

BVB Merchandising GmbH Dortmund 100.00

BVB Stadion GmbH Dortmund 99.74

BVB Beteiligungs GmbH Dortmund 94.90

B.E.S.T. Borussia Euro Lloyd Sports Travel GmbH Dortmund 51.00

Orthomed GmbH Medizinisches Leistungs- und

Rehabilitationszentrum GmbH Dortmund 33.33

using the equity method and initially recognised

at cost. The Group's share of profits and losses of

associates is recognised in the income statement

from the date of acquisition, while the share of

changes in reserves is reflected in consolidated

reserves. The carrying amount of the investment

is adjusted to reflect the cumulative changes since

the date of acquisition. There were no unrealised

gains at any date from transactions between

Group companies and associates which would

have been required to be eliminated on consoli-

dation.

ACCOUNTING POLICIES

The significant accounting policies used in the

preparation of these consolidated financial state-

ments are presented below. The policies

described were applied consistently for the

reporting periods shown, unless otherwise indi-

cated.

Intangible assetsPurchased intangible assets are measured at cost

less amortisation based on their expected useful

lives or at the lower fair value. Player registrations

reported in these financial statements are meas-

ured at cost, taking into account the FIFA

Regulations for the Status and Transfer of Players

contained in circular no. 769 of 24 August 2001

which came into force on 21 September 2001,

and are amortised on a straight-line basis in accor-

dance with the term of the individual contracts

for professional players. The cost of player regis-

trations includes transfer payments made and the

costs of advisers directly attributable to the par-

ticular transfer.

financial statements were not prepared because

the company is not material in the context of the

information conveyed by the consolidated finan-

cial statements of BVB, and because there were

no material transactions or other events in the

business of this company between its own year-

end and that of the Group.

Intercompany revenues, income and expenses,

and all receivables and liabilities between com-

panies included in the consolidated financial

statements are eliminated on consolidation and

provisions relating to other Group companies are

reversed.

On the initial consolidation of subsidiaries, the

cost of the investment is netted against the

Group's share of the carrying amount of the net

assets of the relevant company. The difference

between the cost of the investment and the share

of the net assets is allocated in full to the assets

and liabilities of the subsidiary, to the extent that

it represents unrecognised gains or losses. Any

remaining positive difference is recognised as

goodwill. Subsidiaries are fully consolidated from

the date on which the Group obtains control. The

inclusion of subsidiaries in the consolidated finan-

cial statements ends as soon as the parent com-

pany ceases to have control.

Minority interests represent the share of net

assets that is not attributable to the Group.

Accordingly, minority interests are reported sep-

arately within consolidated equity and the con-

solidated income statement.

Associates over which the Group has a significant

but not a controlling influence are accounted for

99


buildings in the balance sheet represents the car-

rying amount as at 1 July 2004 less depreciation

charged subsequently.

Land, the other buildings and the remaining

items of property, plant and equipment are meas-

ured at cost less depreciation. Borrowing costs

are recorded as an expense in the period in which

they are incurred. Repair and maintenance costs

are recognised in the income statement as

expenses in the current period.

100

Borussia Dortmund

Computer software for commercial and technical

applications is amortised on a straight-line basis

over three years.

Property, plant and equipmentThe SIGNAL IDUNA PARK stadium buildings

were measured at their fair value amounting to

€ 177,200 thousand in the IFRS opening balance

sheet as at 1 July 2004, in accordance with the

option permitted by IFRS 1.16. This valuation is

based on the opinion of an independent external

expert. The carrying amount of the stadium

Depreciation, mainly on a straight-line basis, is based on the following useful lives:

Significant parts of the stadium building are depreciated over their respective specific useful lives (com-

ponent approach).

Useful life in years

Stadium 30

Other buildings 25 to 50

Technical equipment and machinery 4.5 to 15

Other equipment, operating and office equipment 7 to 15

The payment obligations resulting from finance

lease agreements are recognised as a liability. The

lease payments are apportioned between the

finance charges and the element representing the

repayment of the remaining liability in such a way

that a constant rate of interest is charged on the

outstanding lease obligation over the period of the

lease (effective interest method). Interest charges

are expensed immediately. If substantially all the

risks and rewards of ownership remain with the

lessor (operating lease), the lease payments are

recognised as an expense in the financial year.

Financial instrumentsAt the balance sheet date and in the comparable

period, the Group held no financial instruments

accounted for at fair value through profit or loss.

Held-to-maturity investments are non-derivative

financial assets with fixed payments and maturi-

ties that the Group intends to hold to maturity.

Held-to-maturity investments are measured at

amortised cost after their initial recognition. As at

30 June 2008, held-to-maturity investments

amounted to € 309 thousand (30 June 2007:

€ 253 thousand).

Loans and receivables are financial assets or lia-

bilities with fixed or determinable payments that

are not quoted in an active market. Receivables

are recognised at amortised cost less any valua-

tion allowances required for impairment. Loans

are measured on initial recognition at the amount


Impairment testingThe useful lives of intangible assets and items of

property, plant and equipment are all finite. If

there are specific indications of possible impair-

ment, individual assets are tested for impairment.

In the case of intangible assets, the useful life and

the method of amortisation are reviewed at least

at the end of each financial year. An impairment

loss is recognised for the amount by which the

carrying amount exceeds the recoverable amount.

The recoverable amount is the higher of net dis-

posal proceeds and value in use. If the reason for

an impairment write-down recognised in prior

years no longer exists, the impairment loss is

reversed until the carrying amount of the asset,

net of depreciation and amortisation, equals the

amount that would have been determined if an

impairment loss had not been recognised.

LeasesThe Group's leases relate in particular to devel-

oped land and operating and office equipment.

Leased assets in respect of which substantially all

the risks and rewards of ownership have been

transferred to the Group (finance lease) are recog-

nised at the present value of the lease payments

or at the lower fair value in accordance with IAS

17 and depreciated over the useful life or the

shorter lease term. In the case of leases of land

and buildings, the components of the land and

buildings are considered separately for the pur-

pose of the classification of the leases.

101

loan from Morgan Stanley & Co. Int. Ltd.,

London. This interest rate swap was measured at

fair value using recognised pricing models. The

swap was recognised as an asset if the fair value

was positive and as a liability if the fair value was

negative. The interest rate swap was recorded in

accordance with the requirements of IAS 39

relating to the accounting treatment of cash flow

hedges. The effective portion of the gain or loss

on the interest rate swap was recognised direct-

ly in equity net of deferred taxes, while the inef-

fective portion was recognised immediately in

profit or loss. At the most recent balance sheet

date, the interest rate swap was determined to be

fully effective. When the loan was repaid ahead

of schedule, the interest rate swap was also sold,

and the proceeds recognised directly in equity

were eliminated from the balance sheet.

Deferred taxesDeferred taxes are recognised for all temporary

differences between the tax base of assets and lia-

bilities and their carrying amounts in the IFRS

financial statements (liability method). However,

if in the course of a transaction which is not a

business combination a deferred tax asset or lia-

bility arises from the initial recognition of an

asset or liability which, at the time of the trans-

action, affects neither the accounting nor the tax-

able profit or loss, the deferred tax asset or lia-

bility is neither recognised at the date of initial

recognition nor afterwards.

Deferred tax assets are recognised to the extent

that it is probable that taxable profits will be

102

of the consideration received less transaction

costs attributable to the issue of the liability. After

initial recognition, interest-bearing loans are

measured at amortised cost using the effective

interest method net of repayments made.

Liabilities from finance leases are reported under

other liabilities at their present values, calculated

using the effective interest method. At 30 June

2008, there were no financial liabilities designat-

ed at fair value through profit or loss (30 June

2007: € 0).

Available-for-sale financial assets are measured

at their fair value. Unrealised gains and losses

from subsequent remeasurement are recognised

directly in equity net of deferred taxes until the

financial instrument is sold or suffers permanent

impairment. If evidence of impairment is estab-

lished in the course of regular impairment test-

ing, the relevant expense is recognised immedi-

ately in profit or loss. At the balance sheet date

and in the comparable period, the Group held no

available-for-sale financial assets.

If the maturity of a financial instrument is less

than 12 months after the balance sheet date, it is

reported in the balance sheet under current

assets or liabilities.

Derivative financial instruments and hedgingUntil June 2008, the Group used only one deriv-

ative financial instrument for the purpose of

hedging the cash flow risks from interest rate

changes arising from the variable-rate long-term

resale in excess of cost are added to capital

reserves, while shortfalls are taken to revenue

reserves.

Provisions and contingent liabilitiesIn accordance with IAS 37, provisions are recog-

nised where a present obligation exists to third

parties arising from a past event, which is expect-

ed to result in an outflow of resources and whose

amount can be reliably estimated. No provisions

have been reported in these consolidated finan-

cial statements because it was possible to deter-

mine the amount and timing of all obligations

with sufficient certainty, with the result that these

obligations have been reported under liabilities.

Contingent liabilities which do not meet the cri-

teria for recognition as a provision are disclosed in

the notes, unless the probability of an obligation

occurring is remote.

Recognition of income and expensesRevenues are recognised when it is probable that

the economic benefits will flow to the Group and

the amount of income can be measured reliably.

Revenues are measured at the fair value of the

receivable or consideration received and repre-

sent amounts for goods delivered and services

provided in the ordinary course of business, less

rebates, VAT and other taxes arising in relation to

revenues.

Interest income and expenses are allocated to the

period to which they relate, taking into account

the outstanding amount of the loan and the effec-

available against which the temporary difference

can be utilised. Deferred tax assets are also

recognised for tax loss carry-forwards that can be

utilised in subsequent periods, provided it is suf-

ficiently probable that the deferred tax asset will

be recoverable.

Deferred taxes relating to items recognised direct-

ly in equity are also recognised directly in equity.

Deferred tax assets and liabilities are netted

against each other where the Group has a legally

enforceable right to set off current tax assets

against current tax liabilities, and the deferred tax

assets and liabilities relate to income taxes levied

by the same taxation authority on the same tax-

able entity.

Deferred tax assets and liabilities are measured

on the basis of the tax laws in force at the balance

sheet date using a rate of income tax of 31.6%

(previous year: 39.9%).

InventoriesInventories consist principally of merchandising

articles and goods held by the subsidiary compa-

ny BVB Merchandising GmbH. Inventories are

measured at cost less any individual allowances

for goods whose cost may not be recoverable.

Own sharesThe full amount paid for the purchase of own

shares is reported as an item deducted from equi-

ty. The Company has the right to reissue own

shares purchased by it at a later date. Proceeds of

103


significant currency risks. The methods of man-

aging the individual types of risk are described in

the following.

Interest rate risksThe Group's financial liabilities at the balance

sheet date consist mainly of fixed-interest loans.

The Group is therefore not exposed to any sig-

nificant interest-rate-related cash flow risks as at

the balance date or over the medium term.

Credit riskThe Group conducts business exclusively with

third parties of high credit standing. Concen -

trations of credit risk can arise in the context of a

player transfer and from long-term sponsorship

agreements. Such concentrations of risk are mon-

itored in the course of the Group's operating

activities.

The maximum credit risk in the event of coun-

terparty default is equal to the carrying amount of

these instruments.

Liquidity riskThe Group constantly monitors the risk of possi-

ble liquidity bottlenecks, taking into account the

probable maturities of its financial liabilities and

the timing of the expected cash flows from oper-

ating activities. The Group counters potential liq-

uidity risk by taking up largely long-term financ-

tive interest rate to be applied. The effective

interest rate is the discount rate at which the

present value of the estimated future cash

receipts over the term of the financial asset is

equal to its net carrying amount.

Operating expenses are recognised when the

goods or services are utilised or at the date the

expenses are incurred.

RevenuesIn accordance with the classification prescribed

by the German Football League (Deutsche

Fußball Liga GmbH, “DFL”) for the licensing

procedure, income from the sale of transfer

rights for player registrations is reported under

revenues. The expenses associated with the

transfer activities such as the book values of

assets sold and incidental costs of disposal are

reported as other operating expenses.

MANAGEMENT OF FINANCIAL RISKS

The BVB Group finances itself primarily from

long-term bank loans, finance leases, trade

payables, season tickets paid for in advance and

payments from sponsors. The related risks aris-

ing comprise interest-rate-related cash flow risks,

market risks, liquidity risks and credit risks. On

the other hand, the Group is not exposed to any

104

ing. Appropriate corporate planning is used to

constantly monitor short-term financing compo-

nents.

SIGNIFICANT DECISIONS SUBJECT TOJUDGMENT AND ESTIMATES

The collectability of trade receivables is assessed

based on the estimated probability of default.

Specific valuation allowances are calculated for

overdue receivables using individually deter-

mined percentages. In the event that the finan-

cial situations of our partners worsen, the

amounts actually written down may exceed the

amount of the valuation allowances recognised.

This could negatively impact the results of oper-

ations.

Deferred tax assets are recognised in respect of

tax loss carry-forwards to the extent that it is

probable that taxable income will be available to

enable the loss carry-forwards actually to be

utilised. In order to determine the amount of the

deferred tax assets required to be recognised in

this context, management makes significant

assumptions with respect to the expected timing

and amount of future taxable income. As at 30

June 2008, deferred tax assets recognised in

respect of tax loss carry-forwards amounted to €

6,151 thousand (30 June 2007: € 6,264 thousand).

SEGMENT REPORTING

BVB's business activities consist of the operation

of a football club including a professional foot-

ball team. There are no further business seg-

ments with distinguishable components and risks

and rewards different from those of other busi-

ness segments. The business activities of the sub-

sidiary companies do not meet the criteria for

reportable segments in IAS 14 as a result of their

lack of economic significance and are therefore

not subject to the obligation to prepare segment

reporting.


105

106

Borussia Dortmund

NOTES TO THE CONSOLIDATED BALANCE SHEET

(1) Intangible assets

term of the significant player registrations

amounted to 3.1 years (30 June 2007 3.1 years).

Changes in intangible assets are presented in a

separate overview forming part of the notes to

the consolidated financial statements.

Intangible assets consist of purchased player reg-

istrations and computer software. The increase

in player registrations is mainly due to the trans-

fer payments in respect of the new signings

Petric, Rukavina and Klimowicz. At the balance

sheet date, the weighted remaining contractual

(2) Property, plant and equipment

Property, plant and equipment consists princi-

pally of the stadium and former offices and the

adjoining area “Am Luftbad”, and also the facili-

ties at the training ground in Dortmund-Brackel,

the youth centre, catering extensions and items

of operating and office equipment at these facil-

ities and at the administrative headquarters.

Additions to property, plant and equipment

primarily consist of further investments in the

Dortmund-Brackel training ground and the com-

plete renovation of the Conference Centre,

Business Club and Borussia Park located in the

circulation levels of SIGNAL IDUNA PARK.

Additional investments were made in the techni-

cal equipment of the stadium, parking spaces and

advance payments made for the Borusseum.

in EUR thousands 30 June 2008 30 June 2007

Player registrations 15,383 11,167

Industrial property rights and similar rights 15 28

Payments on account for player registrations 0 3,671

15,398 14,866


Land, land rights and buildings including

buildings on third-party land 174,529 181,159

Other equipment, operating and office equipment 14,889 14,326

Payments on account and assets under construction 301 0

189,719 195,485


107

sponding increase in the carrying amount of prop-

erty, plant and equipment subject to finance leas-

es and in the liabilities from finance leases. The

Company has an option to purchase the entire site

following the expiry of the lease term in 2022.

Changes in property, plant and equipment are

presented in a separate overview forming part of

the notes to the consolidated financial statements.

Property, plant and equipment include the following assets not legally owned by the Group and subject

to finance leases:

The Group's share of the profits of its associated company Orthomed GmbH and its share of the assets

and liabilities are as follows:

The items of property, plant and equipment recog-

nised in the balance sheet as a result of finance

leases consist of buildings and other facilities at

the Dortmund-Brackel training ground; the lease

in respect of the land at the training ground, on

the other hand, is classified as an operating lease.

In the current financial year, the completion of the

second phase of construction resulted in a corre-

(3) Investments in associates

Net carrying amounts


Buildings 2,999 3,244

Operating and office equipment 3,640 2,698

6,639 5,942


At the beginning of the year 189 176

Share of profits 45 13

Distributions -50 +0

At the end of the year 184 189

in EUR thousands 31 Dec. 2007 31 Dec. 2006

Share of assets 275 219

Share of liabilities 94 66

Share of revenues 1,099 1,074

Share of profit for the year 50 19

108

Borussia Dortmund

Non-current trade receivables are discounted

using the effective interest method and measured

at amortised cost. The carrying amounts of trade

receivables generally reflect their market values.

When the loan from Morgan Stanley & Co. Int.

Ltd., London, was repaid ahead of schedule, the

interest rate swap was also sold. The proceeds

recognised directly in equity were eliminated

from the balance sheet.

Other assets and prepaid expenses consist princi-

pally of prepayments relating to the professional

squad and insurance premiums. The amounts are

reversed rateably over the terms/lives of the indi-

vidual items.

(4) Financial assets

(5) Trade receivables and other assets


Trade receivables 48 4,290

Interest rate swap 0 2,888

Receivables from related parties 1,389 0

Other assets and prepaid expenses 5,576 430

7,013 7,608

Non-current


Trade receivables 24,661 12,345

less: allowances -1,200 -544

Trade receivables - net 23,461 11,801

Receivables from related parties 0 1,394

Other assets 4,390 4,505

27,851 17,700

Current

Financial assets consist mainly of a tenant's loan relating to an operating lease agreement and various

employee loans.

The carrying amounts generally reflect market values.


109

During the current and previous financial year,

no impairment write-downs to net realisable val-

ue were recognised in cost of materials.

(6) Inventories


Inventories 1,624 1,737

- impairment losses -16 -63

Payments on account 105 50

Inventories - net 1,713 1,724

Changes in the allowance account were as follows:


As at 1 July 2007 544 590

Transfers recognised through profit and loss 744 293

Use 0 -234

Reversal -88 -105

As at 31 December 2008 1,200 544

residual purchase price (value added tax) in con-

nection with the marketing agreement entered

into with SPORTFIVE GmbH & Co. KG,

Hamburg, which is described in greater detail

under note 10.

Trade receivables and other assets do not bear

interest and mostly have a maturity of up to 3

months. The carrying amounts of trade receiv-

ables generally reflect their market values.

Trade receivables rose as at the balance sheet

date, primarily as a result of the outstanding

year: € 9,440 thousand) were due from a single

debtor. In addition, current receivables from

SPORTFIVE GmbH & Co. KG amounted to

€ 9,500 thousand at the balance sheet date.

General

As in the previous year, no current receivables

were overdue as at the balance sheet date and

none were fully or partially impaired.

Non-current and current trade receivables

amounting in total to € 4,725 thousand (previous

110

15 August 2006, the general partner resolved to

increase the share capital by up to € 17,550,000 to

up to € 61,425,000 by the issue of up to 17,550,000

new bearer shares with subscription rights for

shareholders. The limited liability shareholders

exercised their subscription right in the ratio of 5:2

for a total of 7,567,585 new shares at an issue price

of € 2.00 per no-par value share. The 9,982,415

new shares not subscribed for by the existing

shareholders were acquired by Morgan Stanley &

Co. International Ltd., London, at a price of € 2.20

In the period between the date of admission of

the Company's shares to trading (31 October

2000) and the balance sheet date, the Company

acquired a total of 34,000 no-par value shares and

sold 10,365 no-par value shares off-market in the

form of printed physical share certificates. At the

balance sheet date, the Company held 23,290 no-

par value shares, representing 0.038% of the

share capital.

On the basis of the authorisation granted by the

extraordinary General Shareholders' Meeting on

(7) Cash and cash equivalents

Balances with banks bear interest at variable rates of interest applying to demand deposits.

Of the cash and cash equivalents reported at the balance sheet date, € 0 thousand (previous year: € 19

thousand) were subject to restrictions on the right of disposal.


Bank balances and cash-in-hand 7,912 13,905

shares with a notional share in the share capital of

€ 1.00 per share. The shares are fully paid-up; the

number of shares issued and the number of shares

outstanding changed as follows:

(8) EquityThe development of equity and minority interests

is presented in the statement of changes in equity.

Subscribed capital

The subscribed capital of Borussia Dortmund

GmbH & Co. KGaA is divided into no-par value

OwnNumber of shares Issued shares Outstanding

1 July 2006 43,875,000 -23,871 43,851,129

Capital increase 2006 17,550,000

Change in holding of own shares 236

30 June 2007 61,425,000 -23,635 61,401,365

Change in holding of own shares 345

30 June 2008 61,425,000 -23,290 61,401,710


111

The remaining reserves consist entirely of other

revenue reserves. Revenue reserves comprise

profits generated and not distributed by Group

companies in the current year and previous years

and accumulated losses. In addition, the net

effect, taking account of subsequent adjustments,

of the remeasurement of SIGNAL IDUNA PARK

in accordance with IFRS 1.16 is reported under

this item.

The revaluation reserve reported at the last bal-

ance sheet date related to the positive fair value of

the interest rate swap entered into at that time

amounting to € 2,888 thousand net of deferred tax-

es of € 1,152 thousand. When the loan was repaid

ahead of schedule, the interest rate swap was also

sold, and the proceeds recognised directly in equi-

ty were eliminated from the balance sheet.

Capital management

The objective of capital management is to ensure

the Group's long-term ability to function on a

going concern basis and to generate appropriate

returns for shareholders. Debt management steers

the raising of debt, particularly with regard to

financing with matching maturities.

per share in return for a non-cash contribution

consisting of loans from the BVB Group. The pre-

mium of € 19,548 thousand over the nominal

amount of the issue was added to capital reserves.

The capital increase was entered in the commer-

cial register on 19 September 2006.

At the balance sheet date, as in the previous year,

conditional capital expiring on 31 October 2010

for the purpose of issuing convertible bonds and

bonds with warrants amounted to € 14,625 thou-

sand. The extraordinary General Share holders'

Meeting held on 15 August 2006 also authorised

the general partner until 31 July 2011, with the

approval of the Supervisory Board, to increase the

share capital by the issue of up to 21,937,500 new

no-par value shares for cash or non-cash contri-

butions.

Reserves

Capital reserves consist exclusively of transfers in

respect of premiums on the issue of new shares

after deducting the net costs of the placement and

the Company's share of revenues from the sale of

its own shares.

The capital structure at the balance sheet date was as follows:


Equity attributable to BVB shareholders 80,472 86,222

Share of net assets 53.9% 40.1%

Non-current financial liabilities 63,596 122,652

Current financial liabilities 5,220 6,288

Total financial liabilities 68,816 128,940

Share of net assets 46.1% 59.9%

Net assets 149,288 215,162

Stanley & Co. International Ltd., London,

England discussed in greater detail under note 9.

The reduction in total capital is mainly attributable

to the early repayment of the loan from Morgan

112

(9) Financial liabilities

30 June 2008 30 June 2007

weighted Carrying weighted Carryingaverage amount average amount

interest rate EUR thou. interest rate EUR thou.

non-current

Loan from Morgan Stanley & Co. Int. Ltd. 0 6.5% 73,525

Liabilities to other banks 6.1% 59,241 5.7% 44,243

Other loans 9.5% 4,355 9.4% 4,884

63,596 122,652

current

Loan from Morgan Stanley & Co. Int. Ltd. 0 6.5% 3,716

Liabilities to other banks 6.3% 4,692 5.7% 2,171

Other loans 8.3% 528 9.1% 401

5,220 6,288

68,816 128,940

maturity dates between 2020 and 2026; fixed-

interest periods apply until 2016.

As a result of the existing fixed-interest periods

applying to all loans, the BVB Group is not

exposed to any significant risk from changes in

interest rates, even in the medium and long term.

Pledged collateral:

Items of property, plant and equipment with a

remaining book value of € 159.457 thousand

(30 June 2007: € 182,342 thousand) have been

pledged as security for financial liabilities.

As in the previous year, future claims, not reflect-

ed in the financial statements, from season ticket

sales (excluding the hospitality area), were

assigned. In addition, future claims from the

agreement for the rights to the stadium name

were also assigned in the previous year.

In June 2008, the existing long-term loan from

Morgan Stanley & Co. International Ltd.,

London, England, was repaid ahead of schedule.

The loan was refinanced mainly using payments

received in relation to the agency licensing agree-

ment entered into with SPORTFIVE GmbH &

Co. KG, Hamburg, regarding the marketing of

BVB and discussed in greater detail under note

10. In addition, the Company took out a fixed-

interest loan with a nominal amount of € 20,000

thousand with Westdeutsche ImmobilienBank

AG, Mainz. This fixed-interest loan will fall due

in June 2013. The loan conditions include

covenants relating to the consolidated equity

ratio and the interest coverage ratio (EBIT-

DA/interest expense) in the consolidated finan-

cial statements.

The other liabilities to banks consist of a number

of loans repayable in instalments. The loans have


113

(10) Other liabilities


non-current

Advance payments received for agency licence and marketing rights 44,000 0

Liabilities from finance leases 7,165 6,124

51,165 6,124

current

Advance payments received from season ticket sales 7,097 7,965

Advance payments received for agency licence and marketing rights 4,000 0

Advance payments received from sponsors 494 200

Other taxes 13,972 5,638

Outstanding salaries 7,129 2,619

Social security 15 5

Holiday entitlements 150 200

Liabilities from finance leases 247 194

Other 5,926 4,627

39,030 21,448

Other liabilities, total 90,195 27,572


Between 1 and 5 years 35,738 31,513

Over 5 years 27,858 91,139

63,596 122,652

The maturities of non-current financial liabilities were as follows:

On the basis of the general level of interest rates

at the balance sheet date, the fair value of the

financial liabilities is around € 1,126 thousand (30

June 2007: € 873 thousand) below their carrying

amounts. All financial liabilities are denominated

in euros.

Pursuant to an agency licensing agreement dated

18 June 2008, responsibility for the marketing of

BVB was transferred to SPORTFIVE GmbH &

Co. KG, Hamburg. The agreement has a term

expiring on 30 June 2020 and replaces the origi-

nal agreement (expiring on 30 June 2010) early

against payment of a total € 50,000 thousand. The

payments received for the 12-year term of the

agreement were recognised as deferred income

and will be carried through profit or loss on a pro

rata basis over the term of the agreement.

114

The minimum lease payments from finance leases are due for payment as follows:

The change in the maturity structure of the present values of liabilities from finance leases is as follows:


Up to 1 year 752 656

Over 1 year and up to 5 years 3,076 2,480

Over 5 years 8,536 7,695

12,364 10,831

Future finance charges from finance leases -4,952 -4,513

Present value of liabilities from finance leases 7,412 6,318


Up to 1 year 247 194

Over 1 year and up to 5 years 1,240 2,392

Over 5 years 5,925 3,732

7,412 6,318


115

Amortisation of intangible assets in the year under

review includes a write-down to the lower fair val-

ue of € 0 thousand (previous year: € 54 thousand).

NOTES TO THE CONSOLIDATED INCOME STATEMENT

(11) Revenues

(12) Personnel expenses

(13) Depreciation and amortisation

in EUR thousands 2007/08 2006/07

Ticketing 22,591 18,262

Sponsorship 33,894 30,549

TV marketing 26,024 21,250

Transfer income 5,398 6,767

Merchandising, catering, licences 17,715 14,379

Other 1,937 5,908

107,559 97,115


Amortisation of intangible assets 6,774 4,974

Depreciation of property, plant and equipment 8,727 8,572

15,501 13,546


Wages and salaries 42,923 34,844

Social security contributions 2,432 2,137

45,355 36,981

Average number of employees 304 295

No defined benefit pension entitlements have

been granted to employees of the BVB Group.

Payments to the state pension scheme are report-

ed under social security contributions.

This amount relates to the write-down of a player

registration to the lower transfer price already

agreed at the balance sheet date.

116

Borussia Dortmund

(16) Income taxes and deferred taxes

in TEUR 2007/08 2006/07

Income tax liabilities

non-current 3,232 4,232

current 1,712 3,669

4,944 7,901

Income tax liabilities developed as follows:

(14) Other operating expenses


Match operations 19,488 12,884

Advertising 12,360 10,752

Transfers 1,973 1,967

Media and printing, postage 1,828 1,198

Leasing 2,943 2,073

Administration 4,856 7,132

Other 1,634 622

Other taxes 224 11

45,306 36,639

(15) Net finance costs


Income from investments in associates (see Note (3)) 45 13

Other interest and similar income

Interest income from bank balances 166 251

Other interest income 60 0

Interest rate swap: Cash flow hedge, transfer from equity 252 0

Income from the unwinding of financial instruments 457 814

935 1,065

Interest and similar expenses

Loans and bank overdrafts -8,751 -8,683

Interest rate swap: Cash flow hedge, transfer from equity 0 -528

Repayment of loan from Morgan Stanley & Co. Int. Ltd. -1,804 0

Expenses from finance leases -534 -384

-11,089 -9,595

-10,109 -8,517


117

portion of the amount due for payment in finan-

cial year 2008/2009 is reported accordingly under

current liabilities.

Non-current income tax liabilities relate to trade

tax resulting from the sale of limited partners'

shares in WFS KG to Molsiris in 2002. These lia-

bilities are paid in equal annual instalments; the

The changes in deferred taxes were as follows:

30 June 2008 30 June 2007

in EUR thousands Assets Liabilities Assets Liabilities

Recognition and measurement of non-current assets 344 0 156 0

Trade receivables andother assets 0 0 0 1,152

Financial liabilities 0 0 0 782

Tax loss carry-forwards 6,151 0 6,264 0

6,495 0 6,420 1,934


At the beginning of the year

+ deferred tax assets 6,420 3,672

- deferred tax liabilities -1,934 -1,103

Net amount of deferred taxes at the beginning of the year 4,486 2,569

Deferred taxes recognised directly in equity 1,152 -1,152

Tax benefit recognised in the consolidated income statement 857 3,069

Net amount of deferred taxes at the balance sheet date 6,495 4,486

The deferred tax assets and liabilities reported in the consolidated balance sheet relate to the following

items:

The income tax benefit was made up as follows:


Income taxes for the current period -98 -32

Deferred taxes 857 3,069

759 3,037

The changes in the tax rates implemented in the

2008 corporate taxation reform resulted in a € 469

thousand tax expense arising from the remea-

surement of deferred taxes in the financial year.

The recognition of deferred tax assets in respect

of tax loss carry-forwards resulted in an increase

in the tax expense of € 113 thousand (prior year:

reduction by € 2,633 thousand).

118

Borussia Dortmund

Cash and cash equivalents reported in the balance sheet are reconciled to cash funds in the consolidated

cash flow statement as follows:

(17) Consolidated cash flow statement


Consolidated loss before taxes -4,703 7,078

Theoretical tax rate in % 31.6% 39.9%

Expected income tax expense/income 1,485 -2,824

Effects of changes in tax rates -469 0

Effects from tax additions and subtractions -541 -1,126

Taxes relating to earlier periods -92 38

Effect from supplementary tax balance sheets -57 -156

Use of current tax losses and loss-carryforwards 447 7,100

Tax effects from the application of the equity method -14 5

Tax benefit recognised in the consolidated income statement 759 3,037

Actual tax rate in % 16.1% -42.9%


Cash and cash equivalents 7,912 13,905

- cash and cash equivalents pledged 0 -19

Cash funds 7,912 13,886

no deferred tax assets have been recognised.

Under current tax law, tax loss carry-forwards may

be carried forward for an indefinite period.

At the balance sheet date, the BVB Group had

corporation tax loss carry-forwards amounting to

€ 136,902 thousand and trade tax loss carry-for-

wards amounting to € 142,635 thousand for which

The expected income tax expense which would theoretically result from applying the weighted average

tax rate of 31.6% (previous year: 39.9%) can be reconciled with the actual income tax benefit reported

in the consolidated income statement as follows:

have been adjusted accordingly for reasons of

comparability.

Cash flows from operating activities in 2007/2008

include cash inflows from the agency licensing

agreement with SPORTFIVE GmbH & Co. KG,

Hamburg, in the amount of € 50,000.

Interest income was recognised in cash flows

from operating activities for the first time in the

2007/2008 financial year. The prior-year figures

have been adjusted accordingly.

The cash flow statement was presented according

to net profit/loss for the period for the first time

in the current financial year; prior-year figures

119

OTHER DISCLOSURES

(18) Auditors' fees

(19) Other financial obligations


Audit of the financial statements 281 365

Other audit-related work 24 0

Tax advice 87 62

Other services 37 198

Dortmund-Brackel and the offices on the expiry

of the lease agreements in 2017 and 2022 respec-

tively. Rental payments from the non-cancellable

period of a sublease are expected to amount to

€ 125 thousand (previous year: € 605 thousand).

The minimum lease payments from operating

leases relate mostly to lease agreements for

offices, the land at the Dortmund-Brackel train-

ing ground and various motor vehicles. The

Company has an option to purchase the land at

Due after

Up to 1 1 to 5 more than30 June 2008 (in EUR thousands) Total year years 5 years

Rental and lease payments (operating lease) 16,480 1,833 6,726 7,921

Purchase commitments for investments in intangible assets 10,340 10,340 0 0

Marketing fees 148,913 10,304 50,029 88,580

Other obligations 2,042 45 178 1,819

177,775 22,522 56,933 98,320

Due after

Up to 1 1 to 5 more than30 June 2007 (in EUR thousands) Total year years 5 years

Rental and lease payments (operating lease) 17,962 1,871 6,624 9,467

Purchase commitments for investments in intangible assets 4,700 2,600 2,100 0

Marketing fees 24,972 8,324 16,648 0

Other obligations 2,087 45 178 1,864

49,721 12,840 25,550 11,331


120

Borussia Dortmund

Earnings per share are calculated in accordance

with IAS 33 (Earnings per share) by dividing the

net profit or loss for the period attributable to the

shareholders by the weighted average number of

shares in circulation. The earnings per share

relate only to shares in the parent company. The

prior-year bonus element included in the August

2006 capital increase has been taken into account

in calculating the weighted average number of

shares in issue. Since there are no potential ordi-

nary shares, the diluted and undiluted earnings

per share are the same.

The general partner in Borussia Dortmund

GmbH & Co. KGaA is Borussia Dortmund

Geschäftsführungs-GmbH. The latter is respon-

sible for the management and legal representa-

tion of Borussia Dortmund GmbH & Co. KGaA.

The power to appoint and remove members of

staff thus rests with Ballspielverein Borussia 09

e.V., Dortmund, in its capacity as the sole share-

holder in Borussia Dortmund Geschäfts führungs-

GmbH. Both Borussia Dortmund Geschäfts -

führungs-GmbH and Ballspielverein Borussia 09

e.V., Dortmund, and all their affiliated companies,

therefore qualify as related parties within the

meaning of IAS 24.

(21) Transactions with related parties

2007/08 2006/07

Weighted average number of shares outstanding 61,401,538 58,665,483

Consolidated net profit/loss for the year after taxes (in EUR thousands) -3,944 10,115

Earnings attributable to minority shareholders 74 48

Earnings attributable to BVB Group shareholders -4,018 10,067

Earnings per share EUR -0.07 0.17


Transactions with BVB 09 e.V.Rental income 13 25Income from other services 62 47Interest income 41 0Expense from costs recharged for youth department -227 0

Transactions with Borussia Dortmund Geschäftsführungs-GmbHExpense from costs recharged -1,214 -1,485

Transactions with Orthomed GmbHExpense from other services -180 -202

Transactions with related parties:

(20) Earnings per share

121

Outstanding items in respect of related parties:

The management received the following remunera-

tion in the past financial year:

The remuneration paid to the Company's manage-

ment consists exclusively of short-term benefits.

(22) Management


Dipl.-Kfm. Hans-Joachim Watzke (Chairman)

fixed components

fixed remuneration 600 400

other remuneration 15 14

variable component

bonus 67 232

Dipl.-Kfm. Thomas Treß

fixed components

fixed remuneration 400 400

other remuneration 26 26

variable component

bonus 45 155

1,153 1,227


Other current and non-current assetsIntercompany account with BVB 09 .eV. 1,389 1,394Orthomed GmbH 1 1

Other current liabilitiesIntercompany account with Borussia Dortmund Geschäftsführungs-GmbH 252 32


The members of the Supervisory Board of the Company,

their occupations and further responsibilities in other man-

agement bodies are listed below. In the past financial year,

the Supervisory Board received remuneration amounting to

€ 52.5 thousand (previous year: € 52.5 thousand).

122

Borussia Dortmund

(23) Supervisory Board

Other responsibilities

Occupations

Dipl.-Kfm. Gerd Pieper

Chairman

Proprietor andManaging Director ofStadtparfümerie PieperGmbH, Herne

Member of theSupervisory Board ofBeauty AllianceDeutschland GmbH &Co. KG, Bielefeld

Member of theSupervisory Board ofHerner Sparkasse,Herne

Harald Heinze

Deputy Chairman

Chairman of theManagement Board(Rtd.) of DortmunderStadtwerke AG (DSW 21)

Member of theSupervisory Board of e-m-s new media AG,Dortmund

Member of theSupervisory Board ofWV Energie AG, Frankfurt am Main

Member of theSupervisory Board of M-Exchange AG, Frankfurt/Main

Othmar Freiherr von Diemar

Proprietor and managerof Othmar von DiemarVermögensverwaltung +Beratung, Cologne

Chairman of theSupervisory Board ofInformium AG, Cologne

Member of theSupervisory Board of004 Beratungs- undDienstleistungs-GmbH,Aschaffenburg

Substitute member ofthe Supervisory Boardof Arques Industries AG,Starnberg

Bernd Geske

Managing partner ofBernd Geske LeanCommunication,Meerbusch

Ruedi Baer

Consultant, B + BBeratungs AG, Watt(Switzerland)

Vice Chairman of the

Board of Directors of

mobilzone Holding AG,

Regensdorf

(Switzerland)

Chairman of the Board

of Directors of eyezone

AG, Watt (Switzerland)

Member of the Board of

Directors of Swisshome

Real Estate AG, Zug

(Switzerland)


of Directors of

Destination Travel AG,

Liebefeld (Switzerland)


of Directors of B + B

Beratungs AG, Watt

(Switzerland)


of Directors of

Bablo Immobilien AG,

Niederscherli

(Switzerland)

Member of the Board of

Directors of Immoplaza

AG, Regensdorf

(Switzerland)


of Directors of AP

Fashion AG, Watt

(Switzerland)

Christian Kullmann

Head of the manage-ment board office andgroup communicationsof EVONIK IndustriesAktiengesellschaft,Essen

(26) Corporate Governance

The management and Supervisory Board of

Borussia Dortmund GmbH & Co. KGaA issued the

statement of compliance with the German

Corporate Governance Code required by § 161 of

the German Stock Corporation Act (Aktiengesetz)

in November 2007 and made it permanently avail-

able to shareholders on the BVB website at

www.bvb.de.



Borussia Dortmund Geschäftsführungs-GmbH

After the reporting date, Borussia Dortmund

enhanced its professional squad, in terms of both

quantity and quality. In July 2008, Lukas Kruse,

Felipe Santana, Patrick Owomoyela, Neven

Subotic, Tamas Hajnal, Bajram Sadrijaj and

Mohamed Zidan were signed for the new season.

Mladen Petric was transferred to Hamburger SV

in exchange for Mohamed Zidan.

Coach Jürgen Klopp's team beat Rot-Weiss Essen

3:1 in the DFB Cup in August. Following an away

win against Bayer 04 Leverkusen and a tie against

FC Bayern Munich, Borussia Dortmund was in

fourth place in the Bundesliga.

(25) Notifiable shareholdings under § 21of the German Securities Trading Act(Wertpapierhandelsgesetz, "WpHG")

We have been informed of the following notifi-

able shareholdings:

1. Morgan Stanley International Ltd., London(16.25%)

2. Blue Bay Asset Management (14.99%)

3. Bernd Geske (7.30%)

4. BV. Borussia 09 e.V., Dortmund (7.24%)

123

(24) Events after the balance sheet date

Hans-Joachim Watzke Thomas Treß

Managing Director (Chairman) Managing Director

Responsibility Statement of the Management

To the best of our knowledge, and in accordance

with the applicable reporting principles, the con-

solidated financial statements give a true and fair

view of the assets, liabilities, financial position and

profit or loss of the Group, and the management

report of the Group includes a fair review of the

development and performance of the business and

the position of the Group, together with a descrip-

tion of the principal opportunities and risks associ-

ated with the expected development of the Group.



Borussia Dortmund Geschäftsführungs-GmbH

Hans-Joachim Watzke Thomas Treß

Managing Director (Chairman) Managing Director


124

T H E D F B C U P – L O S I N G T H E F I N A L , W I N N I N G O V E R H E A R T S

125

THE DFB CUP

19. April 2008: The team spirit wins: Borussia stands proudand pugnacious infront of the public.

126

Munich team triumphantly paraded around

Olympic Stadium.

For thirty minutes, Bayern Munich was the supe-

rior team, no doubt about it. But then BVB got in

the game. Shortly after Kringe missed a huge

opportunity in the 41st minute, Lucio came up

with a save against Tinga. Kringe kept coming

back, getting blocked by Kahn in the 66th minute,

and hitting the side netting in the 68th minute. It

appeared to be all over in the 87th minute when

Klimowicz – wide open in front of the goal –

They gave their best, brought a vague dream to

life, and were the better team between the 30th

and 103rd minutes of the match. But it all ended

in tears. Borussia Dortmund lost the 65th DFB

Cup 1:2 against the strongly favoured Bayern

Munich. It was a close match that ended in BVB's

heartbreaking defeat in overtime. Although the

team did not win the title, it did win over the

hearts of many in Germany.

“It hurts”, said Sebastian Kehl, shaking his

head. All eyes were on the cup, which the

THE DFB CUP – LOSING THE FINAL, WINNING OVER HEARTS

Shock at an unhappy loss. Not even thewords of Germany's Federal President

Dr. Horst Köhler offer much consolation.

FC Bayern took the lead in theeleventh minute: Lucio and vanBommel (r.) cheer, Petric (No.10) is disappointed.

The 1:1 equaliser – Munich goalieOliver Kahn (r.) watches the ballgo by. Tinga (No. 7) and Valdez(behind Tinga) are ready to cheer.

Munich goalie Kahn parried. His coach Ottmar

Hitzfeld commented: “That could have set us

back.” Munich counterattacked and was lucky

that Podolski's shot didn't miss the goal by much,

instead being deflected by Toni, bringing the

match to 2:1.

missed Kringe's pass, but Petric pushed Wörns'

header into the goal in stoppage time. It was the

reward for the strong performance. “After

evening it up, victory seemed sure”, said scorer

Petric. With the score at 1:1, goalie Ziegler

thought: “There's no stopping us now.”

The team's fate of triumph or tragedy was sealed

by two back-to-back plays. In the 100th minute,

Kringe fired a shot from the 18 meter line, but

THE DFB CUP

127

A hero's welcome for the losing team: Dede (left pic-ture) and Kringe and Gordon (right) bask in the posi-tive atmosphere.

Dortmunders descended on Berlin on the final matchweekend, celebrating peacefully at Brandenburg Gate.

Group and expectations of possible misstatements

are taken into account in the determination of

audit procedures. The effectiveness of the internal

accounting control system and the evidence

supporting the disclosures in the consolidated

financial statements and the Group management

report are examined primarily on a test basis within

the framework of the audit. The audit includes the

assessment of the annual financial statements of

the companies included in the consolidated finan-

cial statements, the definition of the group of

consolidated companies, the accounting and con-

solidation principles used and significant estimates

made by the legal representatives, as well as the

evaluation of the overall presentation of the

consolidated financial statements and the Group

management report. We believe that our audit

provides a reasonable basis for our opinion.

Our audit has not led to any reservations.

In our opinion, based on the results of our audit,

the consolidated financial statements comply with

IFRS as adopted in the EU and the additional

requirements of commercial law to be applied

under § 315a (1) HGB as well as the supplemen-

tary provisions in the Articles of Association and

give a true and fair view of the net assets, finan -

cial position and results of operations of the Group

in accordance with these requirements. The

Group management report is consistent with the

consolidated financial statements, provides as a

whole a suitable view of the Group's position and

suitably presents the opportunities and risks of

future development.

We have audited the consolidated financial state-

ments – consisting of the balance sheet, income

statement, statement of changes in equity, cash

flow statement and notes – prepared by Borussia

Dortmund GmbH & Co. KGaA, Dortmund

and the Group management report for the finan-

cial year from 1 July 2007 to 30 June 2008. The

preparation of the consolidated financial state-

ments and Group management report in accor-

dance with IFRS as adopted in the EU and

the additional requirements of commercial law to

be applied under § 315a (1) of the German

Commercial Code (Handelsgesetzbuch, “HGB”)

as well as the supplementary provisions in the

Articles of Association is the responsibility of the

Company’s legal representatives. Our responsibi -

lity is to express an opinion on the consolidated

financial statements and the Group management

report, based on our audit.

We conducted our audit of the consolidated finan-

cial statements in accordance with § 317 HGB and

the generally accepted standards for the audit of

financial statements in Germany promulgated by

the German Institute of Chartered Accountants

(Institut der Wirtschaftsprüfer, IDW). Those stan-

dards require that we plan and perform the audit

such that misstatements materially affecting the

presentation of the net assets, financial position

and results of operations in the consolidated finan-

cial statements in accordance with the relevant

financial reporting standards and in the Group

management report are detected with reasonable

assurance. Knowledge of the business activities

and the economic and legal environment of the

128

Borussia Dortmund


BDO WESTFALEN-REVISION GmbH

Wirtschaftsprüfungsgesellschaft

R. Schepers ppa. J. KönigshovenAuditor Auditor


A U D I T O R S ’ R E P O R T

EDITORIAL INFORMATION / FINANCIAL CALENDAR 2008/2009

129

Published by:


Rheinlanddamm 207-209,

44137 Dortmund

Internet: www.borussia-aktie.de

E-Mail: aktie @borussia-dortmund.de

Responsible party:

Marcus Knipping

Communication design/

Concept:

K-werk, Uwe Landskron,

Agentur für Kommunikation,

www.K-werk.de

Editors Prologue,

DFB Cup:

Boris Rupert

Photos:

Ralf Rottmann, Stefan Reinke,

Matthias Graben, Knut Vahlensiek

Copyright by

the photographers

Printed by:

Hitzegrad medien – druck GmbH & Co. KG

18. November 2008 Quarterly Financial Report for the first quarter of the 2008/2009 financial year

23. November 2008 Members Meeting of BV. Borussia 09 e.V. Dortmund, Dortmund

25. November 2008 Annual General Meeting of Borussia Dortmund GmbH & Co. KGaA

for the 2007/2008 financial year, Dortmund

28. Februar 2009 Half-year report for the 2008/2009 financial year

Further information is available online at: http://eng.borussia-aktie.de

E D I T O R I A L I N F O R M AT I O N

F I N A N C I A L C A L E N D A R 2 0 0 8 / 2 0 0 9

Firo sportphoto,

Title: Andreas Wegener.

.

130

1998, all 18 first league teams survived the

first round this season.

BVB is looking forward to its home-field

advantage in the second round. Its opponent at

the end of September will be Hertha BSC

Berlin.

With only six of BVB's 31 cup matches played

out in Dortmund between 1990 and 2004, the

Westphalian city's fortunes have turned in the

draw: In the last nine drawings where the

home-field advantage was not automatic – the

“amateurs” are automatically privileged –

Borussia Dortmund was selected eight times

to play host.

The last season proved how short the path to

the final in Berlin is.

A home-field advantage is extremely impor-

tant in K.O. competitions such as the DFB Cup.

Unlike in Bundesliga matches or the UEFA

Cup group phase, there is no fix for sporting

“gaffes”. Also in contrast to international

competitions, the DFB Cup does not involve a

second leg. The make-or-break decision on a

team's advancement in the competition or

departure from the field is made in 90 min-

utes, with possible overtime and a penalty

shoot-off.

This means that the draw for each next round

is vital to the fates of the teams. Particularly

at a time when all Bundesliga teams have

rediscovered the economic and athletic signif-

icance of the DFB Cup. For the first time since

E P I L O G U E

Ausgabe 2 24. September 2008 0,50 E

S P I E L T A G

DFB-POKAL: ZAHLEN DATEN FAKTEN

Hertha BSCDrei Asse fürBerlins Angriff

Rückbl ickEndspiel verloren,Sympathien gewonnen

DFB-POKALBVB – HERTHA

BORUSSIA WILL ÜBER BERLIN NACH BERLIN

DER

TRAUMVOMCUP

Borussia 09Wie Klopp die BVB-Elf wieder auf Kurs bringt


Front cover of BVB's Spieltagmatch day programme,

24 September 2008.

131

THE DFB CUP

T H E D F B C U P – M O R E T H A N A C O M P E T I T I O N

Tradition • Passion • SuccessT r a d i t i o n • P a s s i o n • S u c c e s s

Business Report Borussia Dortmund, July 2007 – June 2008

Bu

sin

ess

Rep

ort

Bor

uss

ia D

ortm

un

d, J

uly

200

7 -

Jun

e 20

08

CONTENTS


PROLOGUE 3






INVESTOR RELATIONS



THE 2007/2008 SEASON 38


















EXPECTED FINANCIAL CONDITION 76Financial planning / Capital expenditure planning / Antic ipated development of l iquidity

















EPILOGUE 130

Tradition • Passion •...

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