Scholz & Friends - ADAPT

The Orchestra of Ideas ® Annual Report 2002
The Orchestra of Ideas ®
Annual Report 2002

The Orchestra of Ideas in Berlin for Mercedes-Benz (examples: see page 52). From left to right, top row: Tim Stübane (advertising),
Holger Gerecke (CRM), Thomas Caprano (advertising), Philipp Wöhler (advertising), Sandra Schilling (design), Jörg Hoppenstedt
(advertising); second row: Birgit van den Valentyn (advertising), Yvonne Laubach (event), Matthias Schmidt (advertising), Christiane
Schmid (advertising), Janina Rahaus (advertising), Robert Krause (advertising), Christina Kloss (advertising); third row: Eva Scholze
(advertising), Anke Specht (advertising), Ulf Cerning (dialogue); bottom row: Stefanie Wurst (advertising), Holger Oppolzer (advertising);
not shown: Sebastian Turner (advertising), Martin Pross (advertising), Esther Braun (advertising), Claudia Knipping (advertising),

Mathis Rekowski (advertising), Michael Winterhagen (advertising), Malte Fischer (advertising), Michael Wagner (advertising), Ijeoma
Ugwuanyi (advertising), Susanne Hirsch (advertising), Charlotte Meyer (advertising), Fei Hupfer (advertising), Susi Schulz (advertising),
Peter Quester (advertising), Alexandra Roth Belkova (advertising), Julia Schmidt (advertising), Ingo Höntschke (advertising), Gerald
Meilicke (advertising), Anne Schöber (advertising), Maja Mack (advertising), Gregory French (advertising), Melanie Carels (advertising),
Dagmar Klose (advertising), Sabine Bäsler (advertising), Stefan Schmidt (advertising), Nina Falk (advertising), Frigga Schmidt (advertising),
Adriana Meneses (advertising), Stefan Flessner (advertising), Jens Stein (advertising).

Financial Highlights, Mission Statement
4 Financial Highlights, Mission Statement
l
Tapple 2002 2001
Billings 460,050 496,515
Net sales 68,973 74,440
EBIT (9,656)* 1,421
EBITA 2,751 6,568
EBITDA 6,472 10,451
Total assets 68,754 99,446
Fixed assets 31,762 46,119
Liquid funds as of 31 December 2002 12,035 17,735
Equity 26,867 37,747
Equity-to-assets ratio (in %) 39.1% 38.0 %
Number of employees as of 31 December 2002 665 744
* Conditional on one-time unscheduled depreciation of the goodwill, which is non-cash effective (see page 56).
What is at the core of communication?
People, of course.
How can we fascinate them?
By ideas.
But then, what is an idea?
An idea is new. It touches you.
It is relevant. It makes you think.
Or dream. Or both.
An idea challenges
what you thought before.
Everyone can have ideas. You can.
But: An idea is weak if its power is limited.
If an idea is not orchestrated, it’s noise.
Imagine an orchestra where all talent
is combined to one end:
the performance of ideas, to move people.
Scholz & Friends:
The orchestra of ideas.

Table of Contents
Financial Highlights, Mission Statement . . . . . . . . . . . . . . 4
Letter to Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Supervisory Board Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
The Orchestra of Ideas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Efficiency booster 1:
Push and pull – Full blast on all channels . . . . . . . . 13
Efficiency booster 2:
Orchestration – Every instrument follows the
conducting idea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Efficiency booster 3:
International network – The ensemble performs
in 18 countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Efficiency booster 4:
Creativity – Ideas generate value . . . . . . . . . . . . . . . . . . 19
The Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Creative Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Research and Development . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
The Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Consolidated Financial Report (IFRS) . . . . . . . . . . . . . . . . 53
Annual Financial Report (HGB) . . . . . . . . . . . . . . . . . . . . . 107
Directors and Supervisory Board . . . . . . . . . . . . . . . . . . . . 132
Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
Chronology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138
Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
Contacts, Key Dates and Imprint . . . . . . . . . . . . . . . . . . . . 144
Annual Report – English version
The original version of this Annual Report is in German. In the event that there are
differences between the two versions, the German version shall prevail.
Wolf for every day: Scenes from
everyday life show how Wolf
Bergstrasse snacks fit into anyone’s
life. Scholz & Friends Praha.
5 l Table of Contents

Letter to Shareholders
Thomas Heilmann
and Sebastian Turner
6 Letter to Shareholders
l
Our product is ideas. They alone have the power to move people. But amidst
today’s deluge of advertising, it is just as important to make sure that good ideas
actually reach their intended audience. How do we get the idea to the housewife? Our
answer is the integrated use of all relevant channels of communication, in a process of
orchestration. So we have responded to the urgent need for integrated communication
by restructuring Scholz & Friends around a new principle: the Orchestra of Ideas,
whereby all communication measures derive from a single, shared creative idea. The
brand idea thus assumes the role of the conductor while the instruments – events, classic
advertising, PR and programming to name a few – make up the orchestra. The result
is orchestrated communication – achieving maximum impact for the brand and a
competitive advantage for our clients. Resulting in a powerful competitive edge for
Scholz & Friends, too. This principle also works inwardly, stimulating cooperation within
the group.
Thus Scholz & Friends has armed itself for persistently difficult market conditions.
Because 2002 was by no means a good year for the industry. 91% of GWA agencies
announced that their clients further reduced their advertising spends (GWA Autumn
Monitor 2002). Scholz & Friends reported turnover of apple 69.0 million for 2002 according
to IAS/IFRS. Turnover including acquisitions was apple 81.5 million. As expected,
operating profit for the year was positive and in line with our published forecasts.
EBITA was apple 2.8 million and EBITDA apple 6.5 million. Unscheduled depreciation was
written off as goodwill to avoid burdening future years.
As such, Scholz & Friends comfortably achieved its 2002 targets – thanks in part
to a good new business result. Both in Germany and internationally, a large number of
new customers have come to Scholz & Friends, while many relationships with existing
clients have been broadened and deepened. Furthermore, we were able to complete a
greater degree of restructuring than had been anticipated. Nevertheless, the value of
Scholz & Friends shares fell by 68.6% in the course of the year, reflecting neither the
value of the business nor the potential of the agency network. In order to ensure that
we continue to provide investors with the greatest possible transparency, we issued our
Declaration of Conformity on the German Corporate Governance Code in November
2002 – becoming the first German advertising and media company ever to do so and
underlining our commitment to responsible, value-building-oriented leadership and
supervision of the company.
Despite the difficult market situation, 2002 provided opportunities to continue
with our expansion strategy, with further additions made to our comprehensive range
of communication services via acquisitions and fresh start-ups. For the first time in the
industry, specialists in both push communication (e.g. advertising) and pull communication
(e.g. entertainment) are working together under one roof. 2002 saw us further
consolidating our position in this fast-moving field and profiting from the demand for
integrated communication. Our European expansion also continued apace, with new

offices opened in Zurich, Skopje, Ljubljana and Belgrade. Now Scholz & Friends is
the best established network in southeast Europe.
The new business successes in the first quarter of 2003 are certainly a reason to feel
encouraged, and although our targets for the present year are conservative, we believe
that the bottom has been reached and that it is now just a matter of time until the upturn
gets underway. We aim to achieve positive, significantly increased group earnings before
interest and taxes (EBIT) on a stable turnover as capacity adjustments undergone in
2002 take effect. Scholz & Friends will continue to concentrate on the expansion of the
network in the coming year, in terms of both countries and disciplines.
In early 2003 the market welcomed the news that our parent company, Cordiant
Communications plc., intends to sell its stake in Scholz & Friends AG. The split will free
Scholz & Friends from Cordiant’s restrictions, enabling us to accelerate expansion. Overall,
the sale provides Scholz & Friends with a tremendous opportunity to move forward.
We always see building value for you, the shareholders, as a top priority. This is
why creating good ideas continues to be our most important task, as it is our ideas
that underpin our business. Scholz & Friends is one of Europe’s foremost creative
agencies, and has long held the lead in Germany: last year Scholz & Friends was named
best German agency at the Cannes Lions International Advertising Festival for the fifth
year running. We were also Germany’s most successful participant at the Clio Awards,
the ADC of New York and the London International Advertising Festival. Our International
Creative Committee (ICC) has the task of maintaining and further improving
these outstanding achievements of the international offices. Last year, the ICC helped
raise the number of prize-winning works throughout the network and broaden the
creative talent base. As a result, more awards were won for more clients by more offices,
both domestically and internationally. In addition to our creative expertise, we have
strengthened our leadership team by hiring the respected communication strategist
and network manager Frank-Michael Schmidt to take on the newly created position
of Germany Manager of Scholz & Friends AG.
Ideas come from people, and we would first and foremost like to thank all our
colleagues for their marvellous ideas and hard work throughout the year. And, furthermore,
for their dedicated efforts for the victims of the terrible flooding that struck
Germany in the summer, when they set up an aid portal for the “Ich helfe dir” (I help
you!) appeal in just five days. The portal mobilised 40,000 donations in kind to the
appeal run by Scholz & Friends, the TV station ZDF and the Internet service provider
T-Online. Once the greater part of the damage had been rectified, our colleagues
proved that Dresden is ready to receive visitors once more with the “Dresden leuchtet
wieder” (Dresden shines again) light extravaganza. The event, under the artistic
direction of Gert Hof, was experienced by 100,000 people in the Theaterplatz, in the
heart of Dresden, and the good news was beamed by 400 TV stations to an audience
of 500 million world-wide.
In the following pages we have much more to tell you about the news and ideas
of 2002 at Scholz & Friends. So please read on. And we have saved the best for last on
page 146.
Thomas Heilmann Sebastian Turner
CEO CEO
“Enjoy the chill” limited edition
for Coca-Cola. Packaging adaption
by Scholz & Friends Antwerp.
Nalu from Coca-Cola – an energy
drink containing caffeine from
green coffee beans, with a visual
foretaste by Scholz & Friends
Antwerp.
7 l Letter to Shareholders

Supervisory Board Report
Peter Martin Schöning
8 Supervisory Board Report
l
The previous fiscal year has been an eventful one. It was characterised by a continued
strong global economic decline. The advertising industry in Germany also suffered
as a result of a continuing decline in the volume of contracts. Despite these factors, we
were nonetheless successful in achieving satisfactory results in the 2002 fiscal year. For
Scholz & Friends AG the year 2002 saw the implementation of various steps designed
to increase the value of the company. These steps were planned in 2001 on the basis of
the merger with United Visions Entertainment AG and the subsequent launch of the
company on the stock exchange.
The Supervisory Board met a total of ten times during the course of the 2002
fiscal year. We carried out the tasks specified in the applicable provisions of the law and
the articles of association of the company and supervised, advised and accompanied
the Board of Directors in the management of the company. The Supervisory Board was
regularly informed about the course of business, company planning and the planning
of financial matters, investments and staff matters. The Board of Directors informed
the Supervisory Board separately and directly of any individual transactions that were
of particular importance to the group. Any actions of the Board of Directors that
required the prior consent of the Supervisory Board were presented for consideration
and in all cases the decisions taken were unanimously agreed upon. Outside the Supervisory
Board meetings, the Chairman of the Supervisory Board was in close and constant
contact with the Board of Directors at all times.
At the first Supervisory Board meeting on 31 January 2002, the Supervisory Board
approved a set of internal rules of procedure for the Supervisory Board and Board of
Directors. No committees were set up during the course of the 2002 fiscal year but
certain committees are being planned to bring the company into line with the requirements
of the Corporate Governance Code.
Important themes that were discussed in the Supervisory Board meetings in the
2002 fiscal year included the strategic and operative development of the agency
network, the risk situation and the financial position of the company, as well as the
implementation of the German Corporate Governance Code.
•The strategic expansion policy of the company was discussed in depth. Besides
strengthening the international agency network, this has also led to the expansion of
the national presence of the company, above all in the area of non-classic communication.
There was further investment in the expansion of the network and the range of
services offered by the group. These investments included the acquisition of 51% of the
company Couch Potatoes Fernsehproduktions GmbH in Cologne and the increase of
the shareholding in deepblue networks AG, Hamburg, to 49%, which in the meantime
now comes to 100 %. These acquisitions have meant the expansion of the range of
services on offer in the area Entertainment (pull communication) and the considerable
strengthening of our business relations with one of our most important key customers.
•Another significant event in the 2002 fiscal year was the implementation of the Corporate
Governance Code through the introduction of our own Corporate Governance
Principles. After careful preparation and revision, these principles were made accessible

to the general public on the Scholz & Friends AG website at the end of the fiscal year.
This means that Scholz & Friends AG has now committed itself to a method of management
and control orientated around the creation of wealth.
Other themes discussed by the Supervisory Board included the current general
political and economic framework conditions, the strategic and operative development
of the area of classical advertising, the economic situation of the various group companies
and the safeguarding of a staffing policy that is in line with market conditions.
The Scholz & Friends AG annual accounts drawn up by the Board of Directors for
the 2002 fiscal year, including the management report and Consolidated Financial
Statement (in accordance with IFRS), have been audited by the auditing company KPMG
Deutsche Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprüfungsgesellschaft in
Hamburg, which was selected by the General Meeting. These documents were issued
with an unqualified audit certificate and forwarded to the Supervisory Board for
approval.
The annual auditor was also present at the Supervisory Board’s discussion of the
audited documents and reported to the Supervisory Board on the major results of his
audit. Furthermore, the annual auditor also adequately answered all of the questions of
the individual members of the Supervisory Board concerning the audited documents.
The Supervisory Board approved the results of the audit and no objections were raised.
The Supervisory Board also carried out its own examination of the annual accounts
of Scholz & Friends AG, the Consolidated Financial Statement, the management report
and the proposal put forward by the Board of Directors for the disposal of the retained
year-end earnings. The results of the Supervisory Board’s own examination also led to
no objections being raised. The Supervisory Board has approved and officially verified
the annual accounts drawn up by the Board of Directors. The Supervisory Board also
approved the proposal put forward by the Board of Directors for the disposal of the
retained year-end earnings, as well as the statements made in the management report
concerning the prospects for further development of the company. The proposal for
the disposal of the retained year-end earnings, which suggests the carryforward of the
balance sheet losses of apple 10,459,995.99 to a new account, was also approved.
Dr. Rüdiger Rönck gave up his position on the Supervisory Board on 4 July 2002.
The Supervisory Board would like to take this opportunity to thank him for his valuable
work and his helpful and knowledgeable advice. Dr. Rönck was replaced on 4 July 2002
by Mr Klaus Droste, who was appointed to the Supervisory Board upon ratification by
the General Meeting.
The Supervisory Board would also like to thank the Board of Directors and all of the
employees of Scholz & Friends AG and affiliated companies for their dedicated commitment
to the company and for all the successful work carried out over the last year.
Berlin, 28 March 2003
The Supervisory Board
Peter Martin Schöning
Chairman
“Acting while others are still turning
pages.” With the campaign for
FINANCIAL TIMES DEUTSCH-
LAND, Scholz & Friends Hamburg
confirms that the newspaper’s
readers are always a decisive step
ahead.
9 l Supervisory Board Report

The Orchestra of Ideas in Hamburg for Tchibo Non Food (examples: see page 46). From left to right, top row: Susanne Klee (advertising),
Günter Spandau (design), Julia Blanke (advertising), Tjard Hansen (CRM); centre: Anja Semrau (advertising), Claudia Severin (advertising),
Barbara König (advertising), Sandra Römmeler (design), Heidi Bosin (advertising), Marc Schröter (advertising), Günter Wischmann
(advertising), Sven Jarck (advertising); bottom row: Wolfgang Bark (advertising), Andreas Natter (advertising), Daniela Klenk (advertising
and promotion), Ulrich Althofen (advertising); not shown: Annette Röskau (advertising), Tatjana Henschel (advertising).

The Orchestra of Ideas
The Four Roads to Greater Efficiency
Increase in advertising pressure, 1992–2002
. . . . . . . . . . . . . . . . . . . .
. . 1,300 . . freesheets . . . . . . . . . 415,000 . . . Billboards . . . .
(+30 %)
. . . . . . . . . . . . . . . (+46 . %) . . . .
. . . . . . . . . . . . . . . . . . . .
. 5.5 . million . . .de . domains . . . . . . . . 820 . magazines . . . (+45 . %) . .
(+4,897 %)
. . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . .
60,000 brands advertised
2.4 million commercials
. . . . . . . . . . . . . . . (+220 . %) . . . .
. . . . . . . . . . . . . . . . . . . .
. . . . . Over . 3,000 . . advertising . . . signals . . each . day! . . . . . .
. . . . . . . . . . . . . . . . . . . .
Source: Annual panel by ZAW, dmmv, IVW, GfK
12 l The Orchestra of Ideas
The cost of brand communication continues to escalate, but its effectiveness is
in decline. New, efficient means have to be found to reach and have any meaningful
effect on the public. The Scholz & Friends network uses four “efficiency boosters” to
achieve really effective results for its clients: push and pull communication, orchestration,
the international network and – of course – outstanding creativity. Why does brand
communication increasingly depend on these boosters? And how do they work?
The growing expense of awareness
Steadily declining reach is costing steadily more money. One major cause of this
trend is the ongoing fragmentation of the media. The number of TV stations, newspapers,
magazines, websites, events and flyers is multiplying, while the audience of
each one is getting smaller and smaller. The age of a whole nation sitting down to
watch the same TV programmes is long gone: consumers now fashion a personalised
media world for themselves. To make a permanent impression on them, advertisers
have to approach them from many different angles.
Thus the explosion of media has led to a corresponding explosion of advertising.
And you may add the media that carry no editorial content at all, existing for advertising
purposes alone – billboards, flyers, brochures, mailshots and promotion teams.
Consumers are switching off
. . . . . . . . . . . . . . . . . . . .
Only 8 %
. . . . . . On average . . . . . . . remember . . . . . . .
adverts are read
commercials
for less than
they have
. . . . . . two seconds. . . . . . . . seen.
. . . . . . .
. . . . . . . . . . . . . . . . . . . .
Only
75 % of all
7 % watch
advertising
. . . a whole . . . . . . . . . . . . . efforts . fizzle . . .
commercial
out without
break.
effect.
. . . . . . . . . . . . . . . . . . . .
. . . . . 19 % . switch.
. . . . . . . . . . . . .
stations during
commercial
67 % say:
. . . . . breaks. . . . . . . . . . Advertising . . . . . .
is
annoying.
. . . . . . . . . . . . . . . . . . . .
. . . . . Brand . . communication . . . costs . more . . and . more . . . . . .
but achieves less and less.
. . . . . . . . . . . . . . . . . . . .
Source: Annual surveys by ZAW, GfK

Unfortunately, the public’s readiness actually to pay attention to this growing swell
of advertising has failed to increase. The efforts made by the 60,000 brands out there
to get their messages across tend to be treated as nothing other than a nuisance.
Under these conditions, only a handful of brands can afford to gain attention by
means of sheer advertising pressure. Constant repetition is not just expensive – it is
boring, too, making viewers even more immune to the message. Scholz & Friends
makes use of four “efficiency boosters” to avoid this vicious circle.
Efficiency booster 1: Push and pull – Full blast on all channels
Brands communicate far more efficiently if they do not just rely on “push”
methods – such as spots in commercial breaks or sponsorship notices on the periphery
of a programme – but actually use the programme itself to convey their message. The
multiplication of print media, TV and web-based channels along with the growing
demand for participation events opens up new opportunities to capture the attention
of the public via “pull” communication such as programming, events and publishing.
Pull communication achieves much higher levels of attention if it is consumed
voluntarily with a far higher degree of emotional involvement, making it a prized addition
to the communication mix.
Push and pull multi-channelling is more effective
. . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . .
Advertising
Programming
. . . . . Sponsoring . . . . . . Entertainment
Push
. . . . . . . . .
Design
Event-Marketing Pull
. . . . . Promotion . . . . . . . Public . Affairs . . . . . . .
CRM/Dialogue Public Relations
. . . . . Trademarketing . . . . . . . . . . . . . . .
. . . . . . . . . Interactive . . . . . . . . . . .
Consulting
. . . . . . . . . . . . . . . . . . . .
. . . . . . . . . Brand . . . . . . . . . . .
Merging with United Visions Entertainment in 2001, Scholz & Friends added
expertise in the innovative pull disciplines of entertainment and programming to its
network. This step represents a major advantage over competitors, many of which –
like many clients – have yet to enter this uncharted territory. Scholz & Friends’ lead in
the field provides its clients with a decisive competitive edge.
13 l The Orchestra of Ideas

A design as exciting as its contents:
Formula 1 simulator featuring real
racing circuits and F1 competitors.
Created for West by Scholz &
Friends Sensai.
14 l The Orchestra of Ideas
The brand creating content
Scholz & Friends has embraced this new area of business, developing and finding
slots for a large number of programme concepts for its clients over the past year. In the
field of entertainment, the life of Stephanie Gräfin von Pfuel, the face of Eduscho’s
Gala brand, was made the subject of various domestic stories for magazine-style TV
programmes. At the other end of the scale, a six-part reportage series on the n-tv news
network, “Wirstschaftswunder International”, supported by the Initiative Neue Soziale
Marktwirtschaft (New Social Market Economy Initiative), advocated economic reforms
in Germany by highlighting successful examples of reform in neighbouring countries.
In addition to entertainment and programming, Scholz & Friends has offered
further pull disciplines over the past year. Gert Hof, the world-renowned lighting artist,
joined our new events agency, Light Monuments, to stage spectacular events reaching
millions both live and via media coverage.
Meanwhile Scholz & Friends Sensai, a 3D communication agency, has been creating
encounters between people and brands since June 2002, working at trade fairs, exhibitions,
events and points of sale. The combination of architecture and product design
with the latest media technologies creates intense sensory experiences.
The group extended its competence in PR and public affairs with the founding of
Scholz & Friends Agenda. Its objective is to bring the fields and messages of its clients
onto the public agenda with the help of various communication tools, such as press
campaigns, TV programming, multimedia and advertising (agenda setting).
Efficiency booster 2: Orchestration – Every instrument follows the conducting idea
Good use of a range of push and pull channels, fully engaging the senses of the
consumer, boosts the efficiency of brand communication. But with so many lines of
communication open, there is a danger that coherence will be lost, and that the overall
image of the brand that ultimately forms in the consumer’s mind is no longer what
was intended. How can we safeguard against this?
Every brand needs to be credible, coherent and distinctly recognisable. Protecting
these qualities is much more than an aesthetic exercise – it is economically essential.
A dissonant message devours a marketing budget on its journey to the consumer.
More and more channels are complementing classic advertising
Over the past 30 years, the call for an holistic approach has been answered with a
notion of “integrated communication”. But there are far more examples of its failure
than success stories. In the past this mattered little – as long as classic advertising was
so dominant, discrepancies in brochure, event and shop design could be overlooked.
These days, however, classic advertising accounts for only 40 % of the total volume of
communication in the United States. The balance is closer to 50:50 in Germany, but
the downward trend is inexorable.

Orchestration succeeds where integration fails
The term “integration” itself contains the cause of its own failure. If integration
simply means complementing one communication channel with a number of others,
the path to fragmentation is clear – because then the idea is forced to follow the
structure. This is the fundamental mistake. The structure must follow the idea.
This simple but basic necessity also applies to all other creative disciplines. One
might think of an architect trying to design a house by first designing walls, floors and
ceilings which are then integrated to form a house. Fools build houses this way. Of
course the architect actually develops an overall concept of a building – be it a house,
a power station or an underground car park – and develops each individual element
according to this conducting idea: the structure follows the idea! Likewise in music,
composers do not try to integrate sixty independent musicians – they write a musical
theme and the score gives it a voice – not reversed. Each instrument is chosen to play
the strands of the piece best suited to it. Examples can be found in every creative field
revolving around ideas: You cannot integrate around ideas – the idea has to set the
pace, tone and rule over all details. Like in an orchestra, with a conductor at its
heart.
Every instrument follows the leitmotif
. . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . .
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Scholz & Friends: The orchestra model
What can we, in communications, learn from this example? The first lesson of the
orchestra model teaches us to play as a team. From this perspective, there is no longer
one dominant discipline – the conducting idea is now supreme. Furthermore, the
orchestra depends on a conductor independent of the various groups of instruments –
in our case, the brand manager with overall responsibility.
Scholz & Friends has been restructuring along these lines over the past year. In the
first step, Brand Management Groups (BMG) were established. They oversee the
brand concept, implement it across all instruments and conduct the specialists in the
orchestra.
West’s Easter reinvention: Scholz
& Friends Hamburg introduces
Easter Edition bunny packaging.
And thanks to deepblue networks’
web expertise, West’s Internetbased
promotion sets hearts
beating faster under the same
motto.
15 l The Orchestra of Ideas

Messy structure: A cacophony
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16 l The Orchestra of Ideas
This new model highlights another valuable insight: individual virtuosos can play in
an orchestra, too. The solos follow the score: what matters is the overall performance.
It is so simple and yet so difficult, for many agency networks suffer from incentive
systems that obstruct cooperation. If every agency component is seen as its own profit
centre, instruments from other parts of the network are inevitably seen as a threat to
local income. Passing on tasks to those best suited to them is effectively punished.
Structures like this reward conflict more than they do constructive progress.
Orchestration: The Scholz & Friends solution
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Singing from the same songsheet
The solution is simpler than it at first may seem. After all, legal firms and
management consultants, for example, dealt with similar issues long ago – giving
employees a stake in the success of the overall organisation. In the past year, Scholz &
Friends has been preparing the establishment of a Partners’ Board, modelled on
similar bodies in other consulting businesses. Members of any subsidiary can become
partners and are nominated according to performance, account volume and feedback
from their colleagues. Their annual bonus is proportional to the results of the whole
Scholz & Friends Group, so their first interest is to serve the orchestrated cooperation
between every member agency in order to benefit the client. They can even benefit by
passing on new business to other specialist members of the group.
Scholz & Friends’ restructuring around the orchestra model extends throughout
the business. Responsibility and expertise are distributed clearly, and employees from
differing disciplines recognise their respective contributions. Internal seminars and
other events are used regularly to improve team play still further.

The early successes of the Orchestra of Ideas are hugely encouraging. The new
model was used to conduct the campaign for Hapag-Lloyd Express, the new no-frills
airline, with even better results than we had hoped for. The taxi design concept (developed
by Interbrand Zintzmayer & Lux) set the tone, and very soon – and at little expense
– a striking, friendly and, most important, successful new airline took off. From
billboard to pizza box, from press event to trade fair, every strand of communication
faithfully followed the New York taxi motif and the tagline “Fly for the price of a taxi.”
Efficiency booster 3: International network – The ensemble performs in 18 countries
Orchestrated communication helps not only in managing multiple communication
channels but also in achieving results on an international level. Encouraged by the
ongoing integration in the Euro zone, fewer and fewer companies are restricting
themselves to a single national market; most operate internationally after reaching a
given size.
From the client’s point of view, it is inefficient and often even destructive to the
brand’s image to employ a different agency for each country, because in acting like this
orchestrated communication is very difficult to achieve. But a centralised implementation
of communication operations can be just as risky; even in a united Europe there
are just as many national distinctions as similarities. The best solutions are offered by
agency networks that are familiar with local markets and consumers and at the same
time can ensure orchestrated brand messages that span beyond national borders.
European locations of Scholz & Friends
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Moscow
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London
Hamburg
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. . . . . . . . . . . . Antwerp . . . . . . . . Warszawa . . . . . . . . . .
Praha
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Zürich
Budapest . . . . .
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. . . . . . . . . . . Milano . . . Ljubljana . . . . . . Beograd . . . . . . . . . .
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Madrid
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Skopje
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Athens
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Adrenaline-fuelled: an ad for West
by Scholz & Friends Moscow.
Light cigarettes, powerful engines.
West Race Day: a chance to feel
the power of West Lights at the
wheel of a Formula 1 car.
Billboard by Scholz & Friends
Moscow.
17 l The Orchestra of Ideas

Presso: the new, shorter, fatter lifestyle
cigarette from West, boasting
a powerful flavour. In a word:
“Kurzdickdoll” (“shortfat’n’phat”).
A campaign by Scholz & Friends
Brand Affairs, realised on the
Internet by deepblue networks.
18 l The Orchestra of Ideas
They alone are in a position to confront the challenges of a changing market with highquality
services; they alone have the size and expertise that enable them to provide the
security that clients have a right to expect.
This insight is neither new nor surprising. Nevertheless, Scholz & Friends is the first
German communications company to put it into practice. Our Europe-wide network is
an important success factor and plays an important part in our strategy for the future.
Quality throughout Europe
In 1995 Scholz & Friends opened its first offices outside Germany, in Athens,
Brussels, Budapest, Madrid, Warsaw and Vienna. With London and Paris, branches in
important European centres followed, and from 1997 Scholz & Friends was the first
German communications agency to establish offices in Prague, Kiev and Moscow.
Scholz & Friends now offers a unique strategic advantage in Central and Eastern
Europe. In addition to its Austrian operations, Scholz & Friends Wien manages business
in Slovakia, Hungary and the Balkans; “S Team Scholz & Friends” provides international
network clients a tailor-made solution in the former Yugoslavia and the
broader Balkan region. Scholz & Friends is currently serving network clients in Serbia
and Montenegro, Slovenia, Bosnia-Herzegovina, Croatia, Albania, Romania and
Bulgaria.
In February 2003 Scholz & Friends closed its last gap in German-speaking Europe
by opening an office in Zurich. The branch is managed by Günther Schneider and
Christian Binder. Yvonne Hodel, the internationally renowned creative, is a member
of its administrative board.
The guiding principle behind our international expansion is achieving qualitative
and enduring growth. Every Scholz & Friends agency has strong local roots, working
for domestic brands as well as for international accounts. It has thus been possible to
manage close network ties while avoiding the disadvantages of a rigid, over-centralised
structure. Our international work also follows the needs of the brand in question. For
example, Scholz & Friends London is world-wide lead agency for Imperial Tobacco’s
international Davidoff account.
The impressive growth in our international offices’ creative performance over the
last years presents another competitive advantage for Scholz & Friends. For decades,
clients had to decide between having a creative agency or an international network.
Today, this kind of restrictive choice is neither acceptable nor necessary.

Efficiency booster 4: Creativity – Ideas generate value
Along with orchestration, creativity is one of the most effective efficiency boosters
in brand communication. In the light of the growing flood of advertising out there,
even a perfectly orchestrated campaign will barely get noticed if its creative idea fails
to seize the imagination.
Which spots stand out and attract interest? Which spots do we pay attention to
and even talk about? It is precisely those that people even choose to watch in the
cinema inplace of a normal movie – the Cannes Reel, showing the world’s most creative
spots, finds a big audience every year. And the TV-show “The world’s wittiest ads”
runs every week.
Surprise, entertain and persuade
How do we escape from the crisis of awareness? By surprising people, countering
their expectations, entertaining them and persuading them. An ad or a spot has to be
different – better, more creative – in order to stand out from the rest and be remembered
right from the first or second viewing. Today’s consumers are extremely well versed in
advertising. If, as rarely happens, they are entertained by a spot in the cinema, they will
clap. They consciously base their opinion of a brand on its advertising. Thus, relying
solely on sheer force of advertising rather than on creativity does not just waste
money – it jeopardises the sympathy of the consumer.
Worth its weight in gold
The connection between creativity and efficiency in advertising is backed up by
many scientific studies. The winners of creative competitions have been scrutinised to
see whether they really perform better on the market, whereas efficiency award-winners
have been assessed for their creative content. The results are clear. Highly creative
campaigns show above-average efficiency. Likewise, highly efficient campaigns are
more creative than those representing the norm.
Andy Farr and Sue Gardiner of Millward Brown, the international market research
institute, also researched how creative advertising goes on to create value. Their study,
10 years among the top five – Scholz & Friends in the creative rankings
Rank
1
5
10
15
20
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Scholz & Friends’ annual results in creative rankings. Source: Horizont 1993–2002
T-shirts for Presso seize the rhythm
of the tagline and play with clichés
about German cities. By Scholz &
Friends Brand Affairs.
19 l The Orchestra of Ideas

Winning creative awards in more and more markets
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. . Scholz . & Friends . award-winning . . . markets
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Scholz & Friends offices
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20 l The Orchestra of Ideas
“Creative Enough for the Financial Director”*, found that “By its sheer creative power,
advertising can change the way you think about a brand. Love the ad, then you may
come to love the brand. Values can be transferred from ad to brand. The interest,
saliency and excitement produced by the ad can make the brand seem more popular
and appealing, directly feeding into sales.”
* M. Brown, S. Gardiner, A. Farr: Creative Enough for the Financial Director, Henley-on-Thames 2001
Creativity is booming
Evidence is mounting that more and more businesses are seeing the poor economic
climate as grounds to invest more heavily in creative solutions. In fact, for the first time
large companies are encouraging their agencies to increase their efforts to win creative
competitions. Heading this trend is Procter & Gamble. And at the German Effie
awards for advertising efficiency, creative campaigns won a landslide victory: every Goldwinning
campaign, and most of the Silver and Bronze recipients, had already been
decorated for creative quality.
Accordingly, international networks hitherto not known for their creative prowess
now list creative performance among their top corporate priorities. They will, however,
take quite some time to catch up with the creative agencies. Scholz & Friends is the
first German player to offer both: outstanding creativity as well as an international
network.
Consistently among the top of the creative field
Scholz & Friends has been one of Germany’s foremost creative agencies for many
years. 2002 was no exception: once again, our creative network was Germany’s most
successful entrant at the Cannes Lions International Advertising Festival, winning four
of the six German Lion awards for press ads as well as 12 shortlists. This result earns
Scholz & Friends a place among the international elite, and, for the fifth year in succession,
the agency proved itself to be Germany’s best at the world’s premiere creative
competition. This success was mirrored at other major international festivals, with
Scholz & Friends leading the German pack with five Clio Statues and 20 shortlists at
More awards for more honoured clients
180
160
140
120
100
80
60
40
20
0
13
2000 2002
54
Clients Shortlists/Winner Clients Shortlists/Winner
Shortlists and winner based on manager magazin, creative index
30
146

The Orchestra of Ideas for Baden-Württemberg
Full view on page 24
Good image advertising works
inwardly, too.The tagline does more
than simply attract investors – it
has been hugely popular as a sticker
within Baden-Württemberg itself.
Not every Baden-Württemberg
resident is remembered for their
accent: Natalie Lumpp has
slurped, gulped and …
Objective: Baden-Württemberg should become the
most attractive German state for potential investors,
domestic and international work forces, visitors and
its own population.
Conducting idea: The success of the people of Baden-
Württemberg lies in their humanity. We present people
who achieve great things but retain an endearing sense
of perspective.
Tagline: Wir können alles. Außer Hochdeutsch.
(We are perfect. If you ignore our accent.)
Results: The campaign obtained recognition levels of
up to 86% among the specific target groups (investors,
travel agents, opinion-formers). The popularity of the
state among German citizens who knew the tagline
leapt to first place. One in four Germans was familiar
with the tagline, and almost 50% of Baden-Württemberg
residents use it in private conversation.
Scholz & Friends Berlin wishes
investors sweet dreams. And the
agency knows that the sweetest
of all are to be had in Baden-
Württemberg.
… gargled her way to becoming
one of Germany’s foremost wine
experts. Winner of a Clio creative
award.
The sweet smell of success in
Baden-Württemberg: chocolate
from Scholz & Friends Berlin lures
investors and their children.
Scholz & Friends Berlin marks
Baden-Württemberg’s 50th
anniversary with a TV spot in
which the whole state takes part
in a serenade.
Sven Hannawald, the ski-jump
star, lives in Baden-Württemberg.
Who better to promote the state’s
aerospace capabilities?
A follow-up on TV: Factual Films,
a Scholz & Friends subsidiary,
documents the making of the
anniversary spot.
21 l The Orchestra of Ideas

Factual Films accompanies the
meteoric rise of the Chinese
economy with the first Western
lifestyle programme to be broadcast
by a Chinese station.
22 l The Orchestra of Ideas
the Clio Festival, four medals and seven distinctive merits at the ADC of New York and
two “winners” and 60 shortlist placements at the London International Advertising
Awards (LIAA).
Horizont, the marketing trade magazine, placed Scholz & Friends third in its 2002
creative rankings – the tenth year in which Scholz & Friends has been at the top of the
creative game.
Award-winning ideas do not grow on trees. Sustained creative performance can,
however, be cultivated and planned. Scholz & Friends established the International
Creative Committee (ICC) two years ago to serve exactly this purpose, making quarterly
evaluations of every work by Scholz & Friends offices world-wide and giving awards to
the best.
Turnover by sector
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Others 29%
Tobacco 17%
Efficiency always helps
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Cars, holidays, potato crisps – as varied
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as our work may be, the tools remain the
. . . . . . . . . . . . . . . . . . . Retail . . 11% . . . . . . . . . . . . . . . . . . .
same. Our efficiency boosters are a help
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
to all our clients, as is the depth of our
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
experience in every major sector, a benefit
. . . Telco/IT . . . 2% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
to both existing and new clients. Our
Tourism 3%
. . . . . . . . . . . . . . . . . . Food . . and . . . . . . . . . . . . . . . . . . . .
Media 3%
beverages 11% shareholders also benefit from the broad
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Entertainment 3%
financial base of the business.
. . Corporate/Government . . . . . . . 5% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Automotive
. . . . . . . . . . Finance . . 6% . . . and . Acc. . 10% . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The jury for this internal competition consists of seven leading creatives from
Scholz & Friends agencies in all regions, together with invited clients, journalists and
prominent advertising colleagues. The permanent members of the ICC are Yvonne Hodel
(Scholz & Friends Zürich), Sebastian Turner (director, CEO of Scholz & Friends AG),
Angel Campanero (Scholz & Friends Madrid), Peter Galik (Scholz & Friends Budapest),
Martin Pross (Scholz & Friends Berlin), Marc Schwieger (Scholz & Friends Hamburg)
and Steve Spence (Scholz & Friends London). Among the guests at the first ICC meeting
was Michael Conrad, then Chief Creative Officer of Leo Burnett Worldwide, who put
forward some important suggestions for the concept.

Each office ranks its own work on a scale of 1 to 10 before submitting it. The
projects are then evaluated by the jury during a two-day meeting. The extensive
documentation of every ICC session provides an accurate reflection of the network’s
entire creative achievements and enables each office to classify its own. On the basis
of these results, target figures are set for each office.
After two years of continued work, the ICC enjoys a high acceptance within the
whole network. The number of entries has grown from 147 at its inauguration to 390
at its last meeting in Berlin. At the fifth meeting, the Belgrade office came second after
Berlin, and Ljubljana shone last time round, winning top honours in an outstanding
performance. The establishment of the ICC has yielded the following, strategically
valuable achievements:
•The ICC 1-to-10 point scale has become the standard measure of the creative quality of
work throughout the company, making creativity a better understood, transparent
product in itself.
•This rating system has also fed through to everyday work. Each office’s creatives meet
regularly to discuss current projects. Before a work reaches the client it is assessed using
the 1-to-10 scale at least once. Works that fail to pass muster are discarded or heavily
revised according to concrete proposals.
•Award-quality works are evaluated internally before submission, helping to improve the
efficiency of participation in competition.
•The number of prize-winning works – internally and externally – has increased across all
offices. Overall, creativity has gained breadth throughout the network: more awards
have been won for more clients by more offices.
Holidays with Factual Films:
“Gute Reise TV” (“Happy Travels
TV”), a new format shown on the
German stations MDR and SFB.
23 l The Orchestra of Ideas

The Orchestra of Ideas in Berlin for Baden-Württemberg (examples: see page 21). From left to right, top row: Stefanie Wurst (advertising),
Martin Pross (advertising), Jens Heyken (programming); second row: Josephine Rahns (advertising), Iris Mittelberg (advertising),
Simone Roggel (advertising), Jens Stein (advertising); third row: Mathis Rekowski (advertising), Alexa Montag (advertising), Ingo
Höntschke (advertising), Christine Winter (advertising); bottom row: Claudia Knipping (advertising), Julia Schmidt (advertising),
Anke Specht (advertising); not shown: Sebastian Turner (advertising), Dagmar Klose (advertising), Katharina Heidschmidt (advertising),
Henk Knaupe (event), Malte Mählmann (event), Thomas Krecker (event), Philipp Wöhler (advertising).

The Instruments
From Classic Advertising to Programming
A complexion as pure as the page
thanks to Kozmetika Kancilja.
A prize-winning ad concept by
S Team Scholz & Friends Ljubljana.
26 l The Instruments
The introduction of the Orchestra of Ideas was of great importance for all Scholz &
Friends Group companies, establishing a clear group profile both outwardly and
inwardly. One year on, the new model has already made its mark on Scholz & Friends’
culture and grown into a platform for collective new business and cross-selling
initiatives. A visible result is the newly designed Internet portal introduced in 2002 to
represent every Scholz & Friends office (see www.s-f.com).
Furthermore, the ensemble of Scholz & Friends agencies was extended last year to
ensure that the network is able to offer expertise in every major communications
discipline. And happily, all subsidiaries signed new business despite the poor conditions
in the industry, helping to absorb the effects of cyclical account cutbacks made by
existing customers.
Classic advertising: New accounts in Hamburg and Berlin
The core business of classic advertising is handled by the Scholz & Friends offices
in Hamburg and Berlin along with international bureaux in 18 other countries.
Twenty-two years ago, a group of around fifty friends founded a new agency.
Scholz & Friends quickly won clients such as Reemtsma, Tchibo and Doppelherz, for
whom many successful campaigns have continued to be developed ever since. The
Hamburg Friends also handle major brands such as Chio, AXA, RWE Gas, Eduscho’s
Gala brand and AWD, as well as institutions such as the Federal Ministry for Family
Affairs, Senior Citizens, Women and Youth, and the Hamburger Schauspielhaus theatre.
In addition, the Hamburg Friends also handle international campaigns for numerous
clients. Scholz & Friends Hamburg has also won important new accounts over the
course of the year, including the FINANCIAL TIMES DEUTSCHLAND, VELUX and
Oase Pumpen (pumps).
The fall of the Berlin Wall made Scholz & Friends Berlin possible. In February
1990, Thomas Heilmann, Olaf Schumann and Sebastian Turner founded an agency in
Dresden. It moved to Berlin in 1992 and grew to become the capital’s largest. Scholz &
Friends Berlin now works for major clients such as DaimlerChrylser, the Süddeutsche
Zeitung, Ministry of the State of Baden-Württemberg, Messe Frankfurt (trade fair) and
Meissen Porcelain. New clients added in the past year include The Boston Consulting
Group, the TV station N24, Hapag-Lloyd Express and the Ecumenical Kirchentag 2003.
The Berlin Friends also won the account for the international launch of Mercedes-Benz’s
successor to the V-Class.
International: Expansion in Eastern Europe and Switzerland
In 1995 Scholz & Friends opened its first offices outside Germany, in Athens,
Brussels, Budapest, Madrid, Warsaw and Vienna. With London and Paris, branches
in important European centres followed, and from 1997 Scholz & Friends was the first
German communications agency to establish offices in Prague, Kiev and Moscow. The
group has continued to develop its European presence ever since. Scholz & Friends

Moscow is run as a joint venture with local partners, and a 30% stake was acquired
in Scholz & Friends Kyiv. The Brussels office, seeking to handle both Dutch and Belgian
clients, moved to Antwerp.
Scholz & Friends prepared itself last year for the forthcoming expansion of the EU.
In addition to its Austrian operations, Scholz & Friends Wien manages business in
Slovakia, Hungary and the Balkans; “S Team Scholz & Friends” provides international
network clients a tailor-made solution in the former Yugoslavia and the broader Balkan
region. Scholz & Friends is currently serving network clients in Serbia and Montenegro,
Slovenia, Bosnia-Herzegovina, Croatia, Albania, Romania and Bulgaria.
Scholz & Friends opened an office in Zurich in February 2003. The new bureau
closes the gap in the group’s coverage of German-speaking Europe, and looks forward
to benefiting from the strength of the Swiss economy.
New international business for 2003
Our international offices fortified the position of Scholz & Friends in Europe by
winning a great deal of new business in the reporting year. New clients included Nestlé
Purina PetCare; Coca-Cola’s Cappy, Mezzomix and Mickey’s Abenteuer Drink brands;
Bosch; and Ferrero. A promising start to 2003 followed, with further important accounts
won in the first few months: the Cyprus Tourism Organisation handed its
international account to the network with Scholz & Friends London as lead agency,
Scholz & Friends Zürich took on Coca-Cola AG Schweiz and the music channel Viva-TV,
and Scholz & Friends Hamburg will handle the Siemens Home Appliances account
from the middle of the year.
Pull expertise – The competitive edge
In 2001 the merger with United Visions, the established entertainment production
company, added important specialist disciplines to Scholz & Friends’ range of capabilities.
The merger and restructuring of the new field of business was successfully
completed in 2002, with three companies emerging with clear profiles tailored to the
needs of the market. They take their seats in the orchestra while continuing to work
independently for their clients.
Factual Films (Berlin), a broadcaster-independent media company, produces and
markets TV magazine programmes, documentaries and reports, features and segments,
and PR films. It has produced many image films for the top brands in the automotive
industry, including the presentation to the media of the new Mercedes-Benz CLK
Convertible. The magazine editorial team, set up at the beginning of 2002, produces
TV segments, documentaries and reports for public and private TV stations, with its
editorial team researching lifestyle, science and cultural topics every day. It also
journalistically developed and slotted many programming ideas for Scholz & Friends
network clients. TV segments covering the fiftieth anniversary of the State of Baden-
Württemberg represent an example of this closely cooperative work. TV segments
were also produced, and suitable programming slots found, for clients such as Tchibo,
Doppelherz, Eduscho’s Gala brand and DaimlerChrysler.
Factual Films’s economics editors formulated a comprehensive TV concept for the
Initiative Neue Soziale Marktwirtschaft (New Social Market Economy Initiative) in 2002.
Last year also saw the company achieving the long-term establishment of a brand
communication platform on China’s second-largest TV station.
Neusiedler’s new copier paper
enables reproductions that fool
the keenest eagle’s eye. Ad by
Scholz & Friends Wien.
An intelligent representation of
environmental protection: packaging
design for IQ color recycled
paper by Scholz & Friends Wien.
Ad for Neusiedler recycled paper
by Scholz & Friends Wien.
27 l The Instruments

Millions are switching from bikes
to cars in China. With Car Visions,
Factual Films produces China’s
first international motoring
programme for Beijing TV 7.
28 l The Instruments
Live Line Entertainment (based in Wiesbaden/Eltville) develops and produces
mass-market TV programmes with an emphasis on events, linking brand messages to
entertaining content. The company moulded the New Year’s Eve celebrations at
Berlin’s Brandenburg Gate into a communication platform for Deutsche Post AG.
The broadcast of the event on the SAT.1 TV station attracted 26% of 14–49-year-old
viewers, making it the night’s most successful celebration broadcast. Around a million
people also watched the event on location, while the Federal Ministry of Education and
Research used the platform to declare the new year the “Year of Chemistry”. Brands
such as Bitburger beer and Rotkäppchen sparkling wine also tied their messages to this
successful event.
United Visions Interactive Entertainment (Berlin) develops interactive online and
offline entertainment formats and operates the K1010.de game show portal. K1010
was successfully relaunched in August 2002, when users were asked to re-register and
supply a detailed profile. The portal now boasts more than 170,000 registered users,
enabling it to offer tailor-made target group segments to advertising partners. The
K1010 club was introduced at the same time, a paid, ad-free entertainment product
that won 4,000 users by the end of 2002.
The expansion into the field of entertainment is proving to be a marked strategic
success, with the merger handing Scholz & Friends the continued competitive advantage
of being the only German communication business to provide a one-stop-shop
for all push and pull disciplines. Intra-network cooperation has been improved for
Scholz & Friends clients, and the combination of disciplines has become a major factor
in winning new business. However, the cross-selling potential between push and pull
fields has yet to be fully tapped – and promises to contribute still more to Scholz &
Friends’ growth in the future.
New pull instruments strengthen the orchestra
Scholz & Friends added further important pull disciplines to the orchestra in
2002, completing the range of non-classic communication instruments.
In June 2002 Gert Hof, the internationally renowned light artist, joined our newly
established event agency Light Monuments GmbH (Berlin). The result is a unique offer
to Scholz & Friends clients – the director combines lighting, pyrotechnics, neon, lasers,
helium balloons, fireworks and other special effects into spectacular visual experiences.
His events attract audiences of millions, with TV coverage all over the world. Hof was
the first foreigner ever to direct a state ceremony in China, when over a billion people
watched his light spectacle and choreography of 5,000 extras. He has also staged
enormous events in Athens and Budapest and was described on one of Germany’s
most important news programmes, Tagesthemen, as “the world’s most sought-after
lighting and pyrotechnics architect”. So far, these events have been the reserve of states
and governments. Hof’s joining the Scholz & Friends group now enables companies and
brands to communicate emotionally to audiences of millions world-wide. Company
anniversaries, international brand launches and introductions of new products can be
communicated in this spectacular – and efficient – fashion.
Hof proved the extraordinary effect of his events once more on 7 December 2002
with the light extravaganza “Dresden leuchtet wieder” (Dresden shines again). Performed
in front of the city’s famous Semperoper opera house, the event was designed
to undo damage done to the public perception of Dresden by the catastrophic floods
seen earlier in the year and to send a positive signal to tourists and potential investors.

The event was made possible by financial support from Deutsche Bank and many other
sponsors. One hundred thousand people watched the show on location, and images
were beamed world-wide by approximately 400 TV stations. In Germany alone, over 100
million media impressions were made, and the international reach was estimated to be
500 million impressions.
The founding of Scholz & Friends Sensai (Berlin) in June 2002 added a further
important discipline to the Orchestra of Ideas. The new agency develops communicationand
participation-oriented ambient concepts to present companies and brands at
trade fairs, exhibitions, points of sale and events. Its role in the orchestra is to turn the
brand idea into a three-dimensional experience. Thus Scholz & Friends will take part
in one of the communication industry’s growth segments: the market for participatory
experiences and brandlands such as VW’s Autostadt and Nike Town was estimated to
be worth apple 3.1 billion in 2001, with continued growth anticipated. Scholz & Friends
Sensai’s success in its first few months speaks for itself, with projects realised in its first
half-year for many network clients, including the brands Tchibo, West, Davidoff and
The Boston Consulting Group.
PR specialists enjoy above-average success
Scholz & Friends meets the strong demand for PR services with three agencies,
each with a profile tailored to particular client requirements.
Scholz & Friends Agenda (Berlin), founded in April 2002, bridged a gap by
marrying traditional PR with special expertise in multi-channel communication and
agenda-setting. The latter technique increases the effectiveness of a campaign by
preparing a communicative culture for new themes to feed from. Instruments such as
press relations, issue management and programming are used to generate public consciousness
of a problem so that other means of communication, such as advertising,
have a more lasting effect. Examples include Scholz & Friends Agenda’s orchestrated
work for the Initiative Neue Soziale Marktwirtschaft (New Social Market Economy
Initiative), which, with the help of many high-profile advocates, underlined the necessity
of comprehensive reforms and submitted concrete proposals. Media cooperations for
Hapag-Lloyd Express had the aim, among others, of presenting unusual reasons for
spontaneous short-haul flights in the press, thereby readying the public for the destinations
and low prices (Europe-wide from apple 19.99) that the new airline offers.
Germany and China have enjoyed
diplomatic relations for thirty
years. Cause for celebration at
Scholz & Friends Brand Affairs
Beijing, organiser of the official
celebrations in Beijing.
29 l The Instruments

Rare delicacies from the best
growing regions: Raritäten von
Privat Kaffee. Ads for Kenya
Pearls, Guatemala Acatenango
and Papua New Guinea Bunum
Wo, seasonally available roasts
from Tchibo. By Scholz & Friends
Hamburg.
30 l The Instruments
Plato Kommunikation (Berlin), the political communication and public relations
consultancy founded in 1999, continued to make progress in the 2002 fiscal year. Its
range of political communication services covers the monitoring and appraisal of
planned legislation, forming dialogue between decision-makers in ministries and
political parties, and developing media strategies for political and social policy topics.
In the PR field, the agency supports its clients in classic press relations along with
speechwriting and the production of presentations, annual reports and image
brochures. Furthermore, Plato advises companies, associations and ministries on
internal communication; devises websites; and organises conferences, panel discussions
and roundtable meetings. All four current Plato units – Finance and Corporate, Europe,
Life Sciences and Media – expanded their activities considerably last year and won a
number of important new clients, including the logistics company Röhlig & Co., the
European Commission’s German Representation, the German Medical Technology
Association, the Verband Deutscher Biodieselhersteller e.V. (German Biodiesel Producers’
Association), Cisco Systems GmbH and the VDI Technology Centre.
Scholz & Friends Brand Affairs (Hamburg, Budapest, Beijing), the agency for
brand PR and active brand presentation within the Scholz & Friends Group, offers PR,
promotion, events and sponsoring and is expanding into an international network of
its own. The first office was opened on 1 December 2001 in Hamburg and handles
accounts for Reemtsma’s West, Davidoff, Polo, Cabinet and R1 brands and Intersnack’s
Chio Chips. In January 2002, Scholz & Friends Brand Affairs opened a branch in
Beijing to sound out the Chinese market for German companies, and since February
2002 the agency has held an office in Budapest to handle the Reemtsma account in
Hungary. New additions to the client roster last year included Mercedes-Benz and
Buena Vista International.
Scholz & Friends Brand Affairs comprehensively manages brands in the fields of
PR, promotion, events and sponsoring. For example, last year the agency organised
“Chio Kick 2002”, a national table football competition, for Chio, in order to engage
a young, trend-conscious target group with the brand. And an international below-theline
campaign for the cigarette brand West enabled consumers from seven countries
to enter a multi-stage selection procedure to win a drive in a genuine Formula 1 car
from the West McLaren Mercedes team. The campaign, which lasted several months,
ended with a memorable finale on the Brno circuit in the Czech Republic, where the
Hungarian winner drove the West McLaren Mercedes and joined the rarefied ranks of
Formula 1 drivers.
Broadening the Hamburg portfolio
In July 2002 Scholz & Friends bolstered its presence in Hamburg with the fullscale
takeover of deepblue networks AG. The agency had been founded in 2000 with
Scholz & Friends as a shareholder, it unifies expertise in above- and below-the-line
communication with outstanding digital media capabilities. deepblue networks has
handled the online account for Reemtsma’s West brand since mid-2002, and it became
the lead agency for West’s overall brand communication within the group upon its
acquisition by Scholz & Friends. West, now available in 72 countries and Germany’s
second-largest cigarette brand, has been looked after by Scholz & Friends since the
mid-1980s. deepblue networks’ other clients include Universal Music, Germanischer
Lloyd WindEnergie, Wenco GmbH, “Diddl – die Springmaus” for Depesche, and
Nordzucker.

Since 1999 Scholz & Friends NeuMarkt (Hamburg) has specialised in retail clients,
handling areas of strategy, packaging design, magazine/point of sale/print, dialogue,
TV and the Internet. One example is its work for Tchibo, with the planning and execution
of the brand’s entire non-food segment marketing. The agency brought Tchibo Non-
Food to the UK in 2001 and gained another major retail client last year, establishing a
new shop concept for the private ferry operator TT-Line.
Scholz & Friends Consulting (Berlin) offers strategic advice covering the whole
process of brand management prior to communication. Scholz & Friends Consulting
assesses the strengths and weaknesses of a brand according to a thorough analysis of
the company, competition and target group, determining the optimal positioning on
the market and developing a coherent communication strategy. The consultants work
closely with the network’s classic and specialist agencies when it comes to implementing
the results. Last year, for example, Scholz & Friends Consulting conducted a
comprehensive brand study for Liechtenstein Global Trust. On this basis the consultants
drew up an umbrella brand concept, helping with the naming, positioning and
communication strategy. Subsequently, a claim and classic campaign were produced
in cooperation with Scholz & Friends Berlin for the private banking brand LGT Bank
in Liechtenstein.
Outlook
Last year Scholz & Friends both consolidated and extended its international
network. This process will continue in the future, beginning with the strengthening of
coverage of the European market. The expansion will occur both in the form of
acquisitions – in some cases using our stocks as currency – and through opening new
branches abroad.
In the field of classic advertising we shall above all focus on winning new clients
and accounts, despite the tense economic background. Our classic agencies’ continued
creative performance and our efforts to make the most of cross-selling opportunities
within the network will form the bedrock of this effort.
With “Frische Ernte” (“Fresh
Harvest”), Tchibo offers the latest,
freshest crop of coffee three times
per year – but supplies are limited
by the size of the harvest. Launch
spot for TV by Scholz & Friends
Hamburg.
Budapest enjoys Tchibo’s best
coffee, too: Scholz & Friends
Hamburg relaunches the flagship
“Tchibo Exclusive” variety
throughout Eastern Europe.
31 l The Instruments

Creative Awards
Provides energy: a sandwich
container from RWE Gas gives
school beginners a great start.
In the process, it also conveys
the origin of the new brand
RWEnaturgas ® . Gold for Scholz
& Friends Hamburg at the 2003
Deutscher Direktmarketingpreis
(German Direct Marketing Prize).
32 l Creative Awards
Art Directors Club,
Germany
1 Gold
1 Silver
5 Bronze
13 Shortlists
Art Directors Club
Nachwuchswettbewerb,
Germany
1 Shortlist
Art Directors Club of
Europe, London
1 Nomination
Art Directors Club of
New York
2 Gold
2 Silver
2 Distinctive Merits
5 Merits
AdForum Creative Award,
www.adforum.com
1 Eastern Europe
Bronze Hit
AdForum Dove Award,
www.adforum.com
1 Bronze
International Advertising
Festival Cannes
5 Bronze
12 Shortlists
Creative Club Austria,
Vienna
1 Shortlist
Scholz & Friends Berlin can even
come up with a good idea for a
plastic bag, turning milk products
from Hoppenstedt into the talk of
the town. The ADC awarded the
refreshing package design with a
Bronze.
Caucasus International
Festival of Advertising,
Tbilisi
2 1 st Place
1 2 nd Place
3 3 rd Place
1 Special Prize
Clio Award, Chicago
5 Bronze
20 Shortlists
Corporate Media Award,
Germany
1 Award of Master
2 Shortlists
Das Plakat, Germany
1 Mention with Honour
Schröder and Stoiber as pistolswinging
outlaws. These prizewinning
TV commercials for the
six-week trial subscription to the
Süddeutsche Zeitung by Scholz &
Friends Berlin guarantee an
unusual angle on the national
elections.

Deutscher
Dialogmarketing Preis,
Germany
1 Shortlist
Die Anzeige, Germany
1 Bronze
1 Shortlist
International Echo Awards,
New York
1 Semi-Finalist
National Hungarian Effie
Award, Budapest
1 Silver
flash-camp 2002,
Germany
1 1 st Place
2 in 1: the brochure for the
smallest special vehicle in the world
fits into a normal-sized format
twice. ADC Bronze for two good
ideas by Scholz & Friends Berlin in
this campaign for smart ® .
International Newspaper
Marketing Association,
Dallas
1 1 st Place
Journalistenpreis für
wegweisende Printwerbung,
Germany
2 Mentions with Honour
Lisbon Erotic Advertising
Festival, Portugal
1 Silver
London International
Advertising Award
2 Winner
60 Shortlists
Nutcracker, Prague
1 Winner
The game never ends – even in the
men’s room. Scholz & Friends
Hamburg with a prize-winning
promotional idea for Video World.
Even commercial vehicles can move
your heart: a large format newspaper
insert for Mercedes-Benz
shows how they enrich our world.
An idea by Scholz & Friends Berlin
which captured several awards.
33 l Creative Awards

Employees
Cultivating a Climate of Cooperation
Scholz & Friends Hamburg
presents the benefit of being an
AXA customer: individual concepts
tailored to people, not statistics.
34 l Employees
The central challenge to personnel management last year was readying our
employees for the demands of orchestrated communication. In addition, adjustments
to staffing levels were necessary due to the continued weakness of the communication
market.
The entire sector has experienced a marked reduction in personnel, as the autumn
evaluation of the German Association of Communications Agencies (GWA) verifies.
From January to December 2001, 42% of the agencies surveyed had already reduced a
personnel by an average of 6.1%. From January 2001 to the end of September 2002,
64% of these agencies made reductions in staff of 10%. At the end of 2002, Scholz &
Friends AG employed a European staff of 665, approximately 10.6% less than the
previous year. This figure was due to the sales of individual business units as well as a
reduction in staff, which was absorbed by normal turnover of personnel.
In the specialised services division, the number of employees was formally reduced
by 6.7% to 208. However, in real terms, the business division grew according to its
strategic orientation: the sale of the PR agency Bönig & Yamaoka was balanced in
terms of staff by the complete acquisition of the specialist deepblue networks. Due to
standards in place for the year 2002, deepblue employees may not be counted for the
purposes of this report. In real terms, specialised services grew organically by 9%.
Approximately one third of the Scholz & Friends Group is employed in the specialised
services division.
In the classic agencies, both domestically and abroad, the number of employees
shrank by 12.3% to 457. International offices declined in size by 19.3%, mainly due to
restructuring measures. In this process, profitability was reviewed and costs were cut,
creating a strong starting position for healthy growth.
Scholz & Friends becomes The Orchestra of Ideas
Over the course of the past year, Scholz & Friends began to align its internal structures
to the requirements of orchestrated communication. Modelled on a conductor,
the first Brand Management Groups were installed in Scholz & Friends Hamburg. The
BMGs consist of a top creative director and an experienced consultancy team which, in
collaboration with the client, maintains watch over the brand idea and directs it using
all instruments at its disposal. The groups oversee the work of all network agencies, in
special disciplines as well as in the international offices.
In order to optimise the collaboration of the individual agencies under the roof
of Scholz & Friends, a regular “rehearsal day” takes place for the entire orchestra: the
Cross Selling Day is a one-day employee event with lectures and discussions, dedicated
to the intensive exchange between disciplines. Best-practice examples from the network
are used to illustrate how divisions can continue to learn from each other.
In order to develop this process even further, the Scholz & Friends Intranet was
also redeveloped for international, network-wide use. The first international tools have
been online in German and English since 1 January 2003, with overall integration to be

completed by the first half of 2003. The Intranet has been designed to increase the
transparency and efficiency of network-wide collaboration. It offers all subsidiaries
and units a platform for presentation and provides uniform administrative tools, such
as a media database, an image and award archive, a contract database, company
guidelines and digital templates for numerous work processes.
A culture of openness
The introduction of the orchestra concept has met fertile ground in the corporate
culture of Scholz & Friends. Existing company values, such as openness, mutual respect,
thoroughness and enthusiasm for details, are the ideal prerequisites for orchestral
harmony. For a producer of ideas, a successfully functioning corporate culture is one
of the most important ingredients of success. The corporate climate must encourage
creativity, and not only in the creative departments. Scholz & Friends has therefore
developed a system of rules and structures to positively influence the creative process.
These include flat hierarchies, an open-door policy and the encouragement of dialogue.
In the end, it all comes down to a good idea and efficient cooperation.
Encouraging initiative
In addition to the corporate culture, each individual employee remains in focus.
To create a closer bond with good employees and also acquire new ones, Scholz &
Friends must be an attractive employer. Our guiding principles are to create as much
room as possible for personal development and self-initiative, define collective goals
and as orient a part of the salary to performance.
Together, supervisors and employees look for opportunities to bring both staff
and the company ahead collectively. New challenges often arise within the network and
managers are asked to use their own initiative for expansion into new business areas.
In this way, Scholz & Friends was able to utilise its own employees for newly founded
subsidiaries, including Scholz & Friends Agenda and Scholz & Friends Zürich – further
enhancing seamless agency collaboration in the sense of orchestral communication.
Advanced training at the Friends Academy
Employee satisfaction depends strongly on the opportunity for further personal
development. Employees who hope to grow with their work are sponsored by the
advanced Friends Academy training programme. Within the framework of the Friends
Academy, both instructors from the Scholz & Friends network and external specialists
pass their knowledge on to others. The courses support key qualifications such as
foreign languages, computer literacy, rhetoric skills and presentation practice. Furthermore,
special seminars such as “Creative Copywriting”, “Creative Planning” or “Brand
Technology” are regularly held.
Thanks to a database system introduced in 2002, advanced training has been
able to be designed more efficiently and on a more individual basis. Over the course of
the year, 72 Friends Academy courses were attended by 653 participants. On average,
almost every Friend took part in at least one course. In addition, the Friends Academy
organises regular, modular-based intensive seminars for managers, as well as individual
coaching. In this way, managerial competence has been systematically developed across
the company and top positions have been able to be filled internally.
Little players, big fun. Scholz &
Friends Hamburg develops trailers
for the media cooperation
between AXA and the ran-SAT.1-
Bundesliga.
35 l Employees

Scholz & Friends Berlin presents
25 tips from the Deutsche
Energie-Agentur (German Energy
Agency), proving that it’s this easy
to save the climate.
36 l Employees
Partner Board and baby boom
An important instrument for the creation of close bonds with executive managers
is the new Partner Board, a practice familiar to that found in law firms and corporate
consultancies. In order to obtain commitment from executive managers over the long
term, Scholz & Friends has made them co-employers. Partners are eligible from all subsidiaries
and are nominated and elected based on performance, customer responsibility
and employee feedback. They receive corporate responsibilities, genuine opportunities
to shape the company, and are offered a financial stake in the overall success of the
Scholz & Friends Group. Their economic interest is thus related to the orchestral collaboration
of all special agencies for the good of the client. And partners also benefit from
handing over tasks to other disciplines.
An ongoing baby boom has brought about changes to Scholz & Friends during the
past years (see page 146). The agency would not like to forego the experience and knowhow
of its young mothers and fathers. As far as possible, therefore, we have created
tailored work-time and workstation models for these employees in order to create a
compatible situation for family and career. While often requiring small additional
administrative efforts, this also leads to a high degree of employee satisfaction in the
long run.
Overall, we have achieved a flexible work force, displaying a level of engagement
which is well above average. Our employees take on responsibility earlier and change
employers less frequently than is common in the sector. Still, Scholz & Friends is constantly
on the lookout for new talent.
Opportunities for young talent
Each year Scholz & Friends agencies take on numerous interns, apprentices and
trainees in order to give them insight into the working day of a communications firm.
For us, this is much more than simply an investment in the future. Scholz & Friends
also profits in the training phase from the ideas and enthusiasm of our new Friends.
Indeed, many are hired full time or return to us at a later date.
During the past year, the agency trained 14 apprentices in our Hamburg and
Berlin bases alone in the positions of account executive and media designer. In order
to nurture creative talent, the Creative Village programme has been continued:
students of all faculties with intermediate diplomas can spend half a year broadening
their horizons at Scholz & Friends Berlin, the daily newspaper taz and the multi-media
service provider Pixelpark. In order to maintain a theoretical basis, participants also
visit courses at the Henri Nannen School Berlin, as well as the Adolf Grimme Academy.
The project has now run for twelve semesters, with 150 to 200 programme applicants
per semester.

Environment
Careful Consideration Helps to Save
Sometimes a campaign can have an important effect even before the advertisement
appears – on the people who create it. After all, if you want to convince others,
you must first be convinced yourself. For the Deutsche Energie-Agentur (German
Energy Agency), Scholz & Friends developed a four-year communication model for the
“Climate Protection” campaign. It is designed to inform citizens about the basic effects
of climate change while motivating them to save energy – simply, concretely, emotionally
and without a moralising undertone. The campaign was centred around the two
penguins “Prima” and “Klima” (“Great” and “Climate”), who picket for climate
protection (“We’re getting too warm!”) and inspire others with creative tips. The
penguins can see everything – so it is best to turn off the lights and scale down both
refrigerator and heating. Through work on the campaign, environmental concern grew
at Scholz & Friends. Employees sought opportunities not only to save energy but also
for the more efficient use of other resources. Thus, for example, house photocopiers
now use ecological paper, printed on both sides. With the help of refill materials,
packaging waste has been reduced. Where rubbish cannot be avoided, it is separated
carefully and disposed of in an environmentally friendly fashion. An in-house paper press
is utilised to recycle paper, with printing cartridges being returned to the manufacturer.
As a result of an employee initiative, ecological toilet paper and biologically decomposable
cleaning materials are used.
As digital technology advances, the work processes of a communication service
provider also become increasingly environmentally friendly. Today, a print or television
advertisement can exist solely as a computer data record, spanning from the initial
order to its printing or transmission. Scholz & Friends is firmly committed to digital
communication both within the agency network and with clients and service providers.
Many processes are already computer-based, leading to a considerable reduction in
material, transport and travel expenses.
Such investments can quickly lead to considerable financial savings, as careful use
of resources can save money as well as the environment. Scholz & Friends will continue
to be committed to environmental protection in all its activities.
Climate change hits the Antarctic
biosphere first, so two penguins
are the ideal mascots for the
Deutsche Energie-Agentur climate
protection campaign. By Scholz &
Friends Berlin.
The sight of the cute little penguins
“Prima” and “Klima” (“Great”
and “Climate”) demonstrating for
climate protection makes joining in
irresistible. A campaign by Scholz
& Friends Berlin.
37 l Environment

The Orchestra of Ideas in Berlin and London for Hapag-Lloyd Express (examples: see page 123). From left to right, outer row: Sebastian
Wilke (trade marketing and CRM), Johannes Bohnen (PR), Matthias Spaetgens (advertising), Jörg Mayer (trade marketing and CRM),
Stephan Goldemund (trade marketing and CRM), Jan Leube (advertising), Tim Stockmar (advertising), Sebastian Turner (advertising);
centre: Cathleen Michaelis (advertising), Kay Lübke (advertising), Verena Winkler (trade marketing and CRM), Harald Koonert (trade

marketing and CRM), Dirk Haase (advertising), Nina Krasemann (PR); front row: Katharina Heidschmidt (advertising), Iris Mittelberg
(advertising), Penelope Winterhager (advertising), Wolfgang Schlutter (advertising); not shown: Michael Häußler (advertising), Alexa
Montag (advertising), Torsten Lindner (advertising), Detlef Arnold (event), Heidrun Funk (event), Stephan Koltai (advertising), Steve
Spence (advertising), Pamela Erdmann (advertising), Sabine Bäsler (advertising).

Research and Development
Knowledge and Putting It to Good Use
An ad by S Team Scholz & Friends
Ljubljana simply and vividly shows
how to make the trip home after a
night out drinking.
40 l Research and Development
In a communication company “research and development” does not mean a lab
full of scientists or engineers. All creative and account management employees are
also researchers and developers in their own right: analysis and creative solutions are
their daily bread. Or, as the advertising legend Bill Bernbach put it, “Creative is not a
department.”
Theory from day to day
Nevertheless, Scholz & Friends also integrates theoretical discourse in its daily work,
as this frequently yields new ideas for practical application. One of our main research
emphases has always been to deepen our understanding of the connection between
creativity and efficiency. The aim is to put empirical findings – that creative campaigns
are more efficient – on an objective and academically sound basis. One result has been
a prominent 2001 study by the Technical University Berlin, co-sponsored by Scholz &
Friends.* Many additional studies have contributed to a widespread appreciation of
the efficiency of creative advertising in the industry.
* V. Trommsdorf and J. Becker: Werbekreativität und Werbeeffektivität – eine empirische Untersuchung,
in: transfer, Werbeforschung und Praxis, 3/2001
A second study also initiated at the Technical University Berlin researched the
effectiveness of pretests as forecasting tools. Entitled “Ways out of the misery of
testing”,* the study made a broad assessment of how pretesting helps agencies and
marketing departments to predict the success of a campaign. The results provided
valuable pointers on how cooperation between agencies, clients and testing institutes
can be optimised. Two insights were of particular interest: the creative quality of a
campaign is the strongest indicator of success on the market, and pretests tend to
yield a high percentage of misleading results.
* V. Trommsdorf: Werbe-Pretests – Praxis- und Erfolgsfaktoren, in: stern Bibliothek, Gruner+Jahr, Hamburg 2003
Scholz & Friends’ latest subject is the critical debate between theory and practice in
integrated communication. Scholz & Friends has developed its own model, “Orchestrated
Communication”, and discussed it in many publications. This new buzzword has
already entered the industry’s vocabulary, and the model is the subject of lively discussion,
for example on the Deutsche Effizienz-Tag 2002 in Berlin.*
* Dokumentation zum Deutschen Effizienz-Tag 2002 in Berlin, Spiegel-Verlag
Exchanging knowledge and passing it on
Our theoretical work extends beyond these topics. Further contents under discussion
at Scholz & Friends and presented at teaching events and conferences include:
•“Good advertising, or how to organise awareness” – Marc Schwieger, lecture at the
Mid Ruhr Chamber of Commerce and Industry, Bochum
•“Easy come, easy go. Fashion as a principle of value creation” – Marc Schwieger, lecture
at the radio drama forum of the NRW Film Foundation, Cologne

•“Communication in China and Germany. On the occasion of the 30th anniversary of
German-Chinese diplomatic relations” – Sebastian Turner, lecture at the Chinese
reception, Konzerthaus am Gendarmenmarkt, Berlin, April 2002
•“Sex tells. What erotic advertising says about the product and the advertiser” –
Sebastian Turner/Christian Schmuck, lecture at the advertising business conference,
Publica April 2002, Messezentrum Vienna
•“Agency of the future: Orchestrate your brand idea” – Sebastian Turner, lecture at the
Reemtsma Marketing Academy, Hamburg, May 2002
•“Agency of the future: don’t just push, pull!” – Sebastian Turner, lecture at the Clio
Festival, Miami, May 2002
•“We are not in the advertising business, we are in the idea business” – Sebastian Turner,
lecture on the occasion of Clio Ad China, Shanghai, September 2002
•“Developing and assessing creative advertising concepts” – Sebastian Turner, guest
professorial seminar at the Institut für Visuelle Kommunikation, Berlin University of
the Arts
•“Managing an advertising agency” – Thomas Heilmann, guest professorial seminar at the
Institut für Gesellschafts- und Wirtschaftskommunikation, Berlin University of the Arts
Teaching positions at educational establishments have enabled us to promote young
talent and generate interest in the agency. Scholz & Friends co-founded the student
agency “Töchter und Söhne” at the Berlin University of the Arts and works closely with
it. We also continue to support the Texterschmiede Hamburg (copywriting academy)
and the student initiative “MTP – marketing between theory and practice” in Hamburg
and Berlin.
Scholarship for young creative talent from across Europe
With the “Jürgen Scholz Scholarship for Creative Excellence”, Scholz & Friends
supports young creative talents from all over Europe, while paying tribute to the agency
founder, Jürgen Scholz. Students with a creative major at a European academy or
university, who are in their last year of studies and who are either working on or
preparing their thesis, may apply.
Creating space for ideas
Van Gogh, Hemingway and Matisse used them, so Scholz & Friends thought it
would be nice to see what creatives could do with a pocket moleskine notebook.
Our black special edition in English, with a calendar and all sorts of goodies,
such as “22 favourite presentation one-liners” and a glossary of advertising jargon
in 13 languages – from Spanish to Mandarin. But above all we want it to be a
place for ideas. We hammer it home with a checkbox at the bottom of each page:
“Idea: yes/no?”, reflecting our agency philosophy of throwing out all the bad
suggestions until the right idea comes along. The first edition is now sold out, but
the new run for 2004 will be available from the autumn at selected bookshops
and via e-mail from www.s-f.com.
41 l Research and Development

Do you speak the language of advertising?
42 l Research and Development
The agency supports the holders of the scholarship with apple 500 per month until the
end of their studies. The maximum period for financial support is one year. In addition,
their progress is accompanied by the counsel of a top creative from one of the agency
offices.
Members of the jury are Mark Featherstone-Witty (CEO, Liverpool Institute of
Performing Arts, LIPA), Professor Wolfgang Schönholz (Hochschule für Angewandte
Wissenschaft Hamburg), Peter Martin Schöning (Chairman of the Supervisory Board,
Scholz & Friends AG) and Sebastian Turner.
The second of these scholarships was awarded in January of this year to Peter
Stauch, a 27-year-old film student from Munich whose two subtly composed and
humorous short films convinced the jury. Young creatives submitted entries from
twelve countries: Australia, Austria, Belgium, Bosnia-Herzegovina, the Czech Republic,
Germany, Hungary, Israel, Poland, Ukraine, the UK and Yugoslavia. The closing date
for next year’s submissions is 15 November 2003 (scholarship@s-f.com).
Development: Setting new standards
The challenge of creative communication is to develop something new and exciting
out of every briefing. Achieving this raises the chances of both success on the market
and recognition at creative competitions. The Gold Medal of the Art Directors Club of
Germany, for example, is awarded for “an outstanding creative innovation of international
class”. One such award was won by Scholz & Friends’ campaign last year for the
Ecumenical Kirchentag 2003. Many more innovations of this kind in 2002 confirmed
the agency’s continued position at the top of German creative rankings.
However, as an all-encompassing communication service provider, Scholz &
Friends does not just develop groundbreaking creative campaigns. We also find new
means and instruments of communication. Last year we brought many to fruition:
•Europe on the factory floor
Plato Kommunikation developed a new dialogue format, “Werkhallen Talks” (factory
talks), for the European Commission and the European Parliament, in cooperation with
various corporate partners. Representatives of business, politics, employees’ groups and
the media come together in authentic industrial surroundings to discuss the regional
Understanding advertising lingo is not a problem with Scholz & Friends’ indispensable
“Werbisch-Deutsch” (Advertising German – German) dictionary. The new edition
for 2003 is dedicated to all those who live and thrive in the world of German advertising,
who want to understand advertising German, or who need such a dictionary
for their academic pursuits. Scholz & Friends delivers translations for single terms
and turns of phrase: from “ABC-Kunden-Analyse”, “Cocooning” and “Eiertanz” to
“rumhühnern” and “Zweitnutzen”, consult the dictionary to find out more. It
makes a good read, providing scintillating insights into a wealth of findings culled
from everyday life in an international agency network. The dictionary is published
by Redline Wirtschaft bei Ueberreuter and is available in bookshops for apple 15.90.

implications of EU enlargement with the work force. Media partners host the talks and
provide them with extensive coverage. Thanks to their popularity among workers and
regional multipliers, Werkhallen Talks will continue in 2003.
•Lifestyle for China
Last year Factual Films secured long-term scheduling for two programming projects
on China’s second-largest TV station. Now being produced together with commercial
breaks in Berlin by a Chinese/German team, the motoring and lifestyle magazine shows
are transmitted on Beijing TV. A large number of German companies are taking advantage
of this unique platform to bring their brand messages to a Chinese audience.
•100 days, 100 ads
From the entrepreneur to the trainee, from the professor to the student, from the shop
steward to the umemployed person: for the first time people from every imaginable
walk of life are taking part in an advertising campaign. They are presenting suggestions
for solving Germany’s pressing economic problems under the motto “Aufbruch jetzt!”
(action now!) in a daily ad on the back page of the tabloids Bild and Bild am Sonntag.
The forum for the 100-day campaign was created by Scholz & Friends Agenda and
Scholz & Friends Berlin for the Vereinigung der Bayerischen Wirtschaft (vbw) and the
Verband der Bayerischen Metall- und Elektro-Industrie e.V. (VBM). These institutions
representing industry and commerce in Bavaria seized the frustration felt by many over
the slow progress of reform and gave the federal government an extra 100 days after their
first 100 to get moving with some substantial action. The campaign is also represented
on the Internet at www.aufbruch-jetzt.de. High-profile contributors have included
the historian Arnulf Baring, the editor in chief of manager magazin Wolfgang Kaden,
the celebrity hairdresser Gerhard Meir, the two-time Olympic cycling champion Jens
Lehmann, the pop singer Bernhard Brink, the former footballer Manfred Burgsmüller,
the President of the German Institute of Economic Research Klaus Zimmermann, the
Olympic dressage champion Nicole Uphoff, the designer Willy Bogner, the comedian
Pit Krüger, the President of TSV 1860 München Karl-Heinz Wildmoser, Tobias Künzel
of the pop band “Die Prinzen” and the publicist Hugo Müller-Vogg.
•A market for donations in kind
More than 370,000 people were affected by the German floods of summer 2002. The
flooding destroyed many households, but people were eager to help. So Scholz & Friends
developed a concept that, for the first time, made it possible to give donations in kind –
of items or services – to victims quickly and easily. At the heart of the “Ich helfe dir”
(I help you!) promotion was a web portal where contributors offered their donation
and those affected by the flood could search for the items or services they needed. The
portal matched donations with requests. The promotion was conducted in partnership
with T-Online and the TV station ZDF, with German president Johannes Rau
acting as patron. The marketplace was accessible via www.ich-helfe-dir.t-online.de and
www.ich-helfe-dir.zdf.de, and those without Internet access could use a free hotline run
by Deutsche Telekom. Items up to 31.5 kg in weight were delivered by Hermes delivery
service free of charge, while heavier deliveries were handled by the logistics company
GEL. More than 46,000 offers were received, 13,391 donations brokered and 11,000 of
them delivered free of charge during the course of the promotion. The market principle
of the portal also ensured a high degree of efficiency: only donations for which there
was a genuine need were delivered. All donations went to the benefit of those affected
by the floods (see also page 141).
Sugar is not just about sweetness,
as charmingly shown in an image
campaign for Nordzucker, one of
Europe’s leading sugar producers,
by the Scholz & Friends subsidiary
deepblue networks.
43 l Research and Development

Branding people
44 l Research and Development
•Artistry in light draws a line under the flooding crisis
Images of the flooding crisis dominated the media for a whole week, and not just in
Germany. After the waters had ebbed away and the worst of the damage had been
rectified, a new problem emerged. Pictures of the destruction had been so vivid that
tourism and investment in Dresden and throughout Saxony were failing to recover. So
Scholz & Friends developed an idea with the world-renowned artist Gert Hof: the imagery
of the floods could only be erased by a new imagery – one that showed Dresden shining
brightly once again. Hof, supported by Scholz & Friends Group, Deutsche Bank, the
publishing house Gruner+Jahr and other sponsors, realised a light extravaganza within a
matter of weeks, to maximum image-building effect. Shortly before Christmas, 100,000
people saw the epic display on location at the city’s Semperoper opera house, with
approximately 400 TV stations broadcasting the scene around the world. In Germany
alone, over 100 million media impressions were made via print and TV reports, and
the world-wide reach was estimated to be around 500 million impressions. End-of-year
reviews and documentaries highlighted the images showing the return to normality,
emphasiting that “Dresden shines again” (see also page 141).
Artists, politicians, sports stars and even jobseekers and one-man companies are
active in markets where they have to present themselves in a compelling light. And
as is the case for many products, these markets are largely saturated, and abilities
are often interchangeable. In this light, it is becoming more important for many
people to build up a distinctive, enduring image. Perhaps they might also profit from
the extensive insights of modern brand management? This collection of essays,
“Der Mensch als Marke” (People as brands), a scholarly and entertaining look at the
subject, was produced mainly by contributors from the Berlin University of the Arts,
and published by Verlag Business Village, Göttingen. The project was supported by
Scholz & Friends. In addition to the editor, Prof. Dr. Dieter Herbst, and other academic
staff and students of the Berlin University of the Arts, contributors included pop star
Thomas Anders of “Modern Talking” and “Der Spiegel” columnist Matthias Matussek.
Copies can be ordered at www.der-mensch-als-marke.de.

Corporate Governance
Our Principles
In December 2002 Scholz & Friends AG issued through its Board of Directors and
Supervisory Board as the first German advertising company their own Corporate
Governance Principles. The company Scholz & Friends AG attaches a high level of importance
to the concept of corporate governance. Our Corporate Governance Principles
illustrate to the public how we as a company want to achieve responsible, value driven
management and control of the company. The establishment and observance of our own
corporate governance system is an intrinsic part of the conscious image and philosophy
of our company. The Board of Directors, the Supervisory Board and the employees
of Scholz & Friends AG all identify with the principles, which we have introduced on a
corporate-wide basis.
We trade in the knowledge that it is the shareholder that has provided the equity
capital of the company and therefore the shareholder that bears the entrepreneurial
risk. Our Corporate Governance Principles are designed to stabilise and increase the
level of trust of our present and future shareholders, customers, employees, business
partners and the public on national and international markets.
In order to ensure that the company’s Corporate Governance Principles are observed,
the Board of Directors and the Supervisory Board have appointed Mr Christian
Tiedemann (CFO) as corporate governance supervisor. He will be responsible for reporting
to the Board of Directors and the Supervisory Board on all matters concerning
corporate governance.
The specific principles set out by Scholz & Friends AG are designed to regulate the
relationship of the company to its shareholders, the tasks and obligations of the Board
of Directors and the Supervisory Board, the specific tasks of the Chairman of the Supervisory
Board, the cooperation between the Board of Directors and the Supervisory
Board, the transparency disclosed by the company and the company’s reporting and
auditing procedures.
Special emphasis should be placed on the facts that:
1 In the interest of the equal treatment of shareholders and the fair disclosure of
information, all important company publications and disclosures will be posted on our
website.
2 Members of the Board of Directors and the Supervisory Board are obliged to observe
the company’s Corporate Governance Principles at all times in order to avoid
any potential conflicts of interest. The Board of Directors and Supervisory Board will
work very closely together to the benefit of the company.
3 We intend to create more transparency by providing information on the individual
ownership of shares in Scholz & Friends AG by members of the Board of Directors and
Supervisory Board, including any existing option rights.
4 Further Corporate Governance Principles have been included in the internal rules
of procedure of both the Board of Directors and the Supervisory Board. These include
the obligation of the Board of Directors to submit regular reports to the Supervisory
Board, a description of the business transactions of the Board of Directors that will
“Not what you expect.” The Jewish
Museum is always good for a
surprise: with its architecture, with
a new museum concept and with
this campaign by Scholz & Friends
Berlin.
45 l Corporate Governance

The Orchestra of Ideas for Tchibo Non Food
Full view on page 10
A successful UK premiere:
Scholz & Friends NeuMarkt issues
the first English version of TCM
Magazine.
A print campaign accompanies
Tchibo to the UK, highlighting the
unique nature of the Tchibo shop
concept.
46 l Corporate Governance
require the consent of the Supervisory Board and the definition of the jurisdiction of
the Board of Directors and Supervisory Board.
You can download the complete Corporate Governance Report of Scholz & Friends AG
as well as the Corporate Governance Declaration of Conformity and Corporate
Governance Principles from our homepage at www.s-f.com under the category Investor
Relations/Corporate Governance.
Objective: Tchibo shops’ weekly-changing product
groups should be brought together under a single
brand.
Conducting idea: Product changes form the basis of
the campaign: every week a new, unique and inspiring
world of Tchibo products is born.
Tagline: A new experience every week
Results: Growth in sales and market share (countering
the general market trend); successful expansion into
the UK and Switzerland; increased brand awareness.
The weekly TCM Magazine
presents the product range and
the key visual of the week.
Opening decoration of Tchibo
shops in the UK.
Multiple media, simultaneously:
the world of Tchibo as seen on TV.
Ads on the theme of the week
provide further information.
Product packaging: orchestrated
in line with the conducting idea.
Orchestrated communication
right down to the window displays,
where the theme of the week is
revealed.

The Share
Difficult Environment Affects the Share Price
Trends in the financial markets during 2002
The German capital market was badly affected in 2002 by the continuing uncertainties
arising from the threat of military conflicts, new scandals in American and German
financial markets and persistent weakness of the economy.
The main German share index, DAX, was down by around 44% over the full year
and thus chalked up a loss for the third year in succession. The MDAX index put up a
generally better performance during the course of the year but still finished 30% down.
The SDAX and the CDAX were 28% and 40% down respectively. The worst loss was
suffered by the NEMAX 50, which slumped by nearly 70%.
Despite the hesitant mood prevailing on the capital market in 2002, one encouraging
sign was that the number of persons directly owning shares had started to rise
again by the end of the year. Attractively low share prices and the increasing readiness
of many corporate managements to disclose more information on their operations
helped to fuel investor interest.
The dominant mood in 2003 is one of muted confidence. Realism has returned to
the market, and investors are back with their feet on the ground. The uncertain geopolitical
situation and the stagnant global economy remain the dominant issues at the
start of 2003. Attempts were made during 2002 to restore investor confidence with
new regulations and reorganisation of the stock market. The year 2003 will show what
effect these actions will have.
Share price development
Comparison of Scholz & Friends AG with the CDAX-Media-Index 2002
Market value of Scholz & Friends share in apple
5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
Date 2/1 2/2 2/3 2/4 2/5 2/6 2/7 2/8 2/9 2/10 2/11 2/12
Scholz & Friends AG CDAX-Media-Index
Summer 2002: Dresden’s
cultural treasure is under water.
Scholz & Friends Berlin commits
itself spontaneously with a call
for donations.
47 l The Share

With this image campaign, the
Süddeutsche Zeitung discovers
new readers. The German Art
Directors Club discovered this
idea by Scholz & Friends Berlin:
prize in “Newspaper” category.
48 l The Share
The weak market environment did not deter Scholz & Friends AG from pressing
ahead during 2002 with its plans to transform the company into a pan-European
communication services provider. The management has declared itself satisfied with the
restructuring, but emphasised that the share price at the end of the year reflects neither
the company’s net worth nor the potential now available in the agency network.
With trading generally running at a low level, the Scholz & Friends share price fell
by 68.6% during 2002 from apple 4.52 to apple 1.42. Performance of the CDAX-Media-Index
was also negative, falling by around 50% during 2002.
Main shareholder planning to sell out
The announcement early in 2003 that the parent company Cordiant Communications
plc. was planning to sell its shares in Scholz & Friends AG was welcomed by the
market. This separation will release Scholz & Friends from the restrictions imposed by
Cordiant’s stringent austerity programme and enable it to speed up progress with its
expansion plans. The sale of the shares will open up some potentially big opportunities
for the Scholz & Friends Group. Cordiant’s announcement pushed up the Scholz &
Friends share price by a few percentage points.
Scholz & Friends shares at a glance
Initial capital apple 21,460,000 apple 21,460,000
Number of shares 21,460,000 21,460,000
Market capitalisation* apple 30,473,200 apple 96,999,200
Close of the year price apple 1.42 apple 4.52
Highest variable price apple 4.50 apple 6.30
Lowest variable price apple 1.40 apple 3.60
Earnings per share apple (0.52) apple (0.15)
Earnings per share after DVFA/SG apple (0.52) apple (0.15)
Cash flow per share after DVFA/SG apple 0.31 apple 0.85
Equity per share apple 1.25 apple 1.76
Free float** 13.92% 14.68%
* On 31 December 2002 and 2001, respectively, related to the end-of-year price
** In conformity with the free float definition of Deutsche Börse AG
2002 2001
Market segment Geregelter Markt (General Standard)
Type of share Individual shares
Security code no. 697 280
ISIN Code DE 000 697 280 5
Stock exchange contraction SFA
Reuters contraction SFAG.F
Bloomberg contraction SFA GR
Market locations Xetra, Frankfurt, Berlin, Hamburg, Munich, Stuttgart

The Scholz & Friends AG share was listed for trading on Frankfurt Stock Exchange’s
regulated market (Geregelter Markt) on 26 November 2001 and has been included in
Deutsche Börse AG’s General Standard as from the beginning of 2003. Scholz & Friends
AG will comply not only with the General Standard’s legal requirements but also with
the following obligations imposed on shares included in the Prime Standard: voluntary
presentation of consolidated annual financial statements prepared in accordance with
IAS, annual analysts’ conferences, publication of a financial calendar and publication
(as in the past) of ad hoc announcements in German and English.
Shareholder structure on 31 December 2002
Shareholder Number of shares %
BATES Deutschland Holding GmbH 16,589,000 77.30
Millennium Venture Capital AG 1,883,000 8.78
Media Port Beteiligungs- und Verwaltungs GmbH 1,011,185 4.71
Penk Pannier Beteiligungsgesellschaft mbH 551,960 2.57
Wolfgang Boyé* 76,200 0.36
Ekkehard Streletzki** 43,916 0.20
Tewe Pannier* 37,623 0.18
Thomas Heilmann* 8,400 0.04
Sebastian Turner* 8,400 0.04
Further free float 1,250,316 5.82
Total 21,460,000 100.00
* Member of the Board of Directors
** Member of the Supervisory Board
BATES Deutschland Holding GmbH is a wholly-owned subsidiary of Cordiant Holdings GmbH of Frankfurt/Main,
which is itself a wholly-owned subsidiary of Cordiant Communications Group plc. of London.
Thomas Heilmann and Sebastian Turner, both of whom are Chairmen of the Board of Directors of Scholz & Friends
AG, each own a 50% interest in Millennium Venture Capital AG.
Ekkehard Streletzki, a member of the Scholz & Friends AG Supervisory Board, indirectly owns a 50% interest in
Media Port Beteiligungs- und Verwaltungs GmbH.
Tewe Pannier and Wolfgang Penk each own a 50% interest in Penk Pannier Beteiligungsgesellschaft mbH. Tewe
Pannier has resigned his position as a member of the Board of Directors of Scholz & Friends AG with effect from
31 December 2002.
As of 31 December 2002, the members of the Board of Directors directly owned 130,623 shares in the company.
Deutsche Börse AG defines the term “free float” as the total number of shares in the possession of shareholders
whose direct interest in a company’s share capital is less than 5%.
According to this definition, the free float in Scholz & Friends AG totalled 13.92% at the end of 2002.
“You’ve never experienced the
World Cup like this before.”
This statement applies not only
to the advertisement concept by
Scholz & Friends Berlin but also
to the first-class reports in the
sports section of the Süddeutsche
Zeitung.
49 l The Share

For the consumer goods trade fair
Tendence, Scholz & Friends Berlin
was inspired by the best designer
in the world: nature.
50 l The Share
Share segment changes by Deutsche Börse AG
In the autumn of 2002 Deutsche Börse AG announced details of its plans to
rearrange its share segments. The new stock exchange regulations (BörsO neu) entered
into force on 1 January 2003. They include the creation of two new segments – Prime
Standard and General Standard – and the reorganisation of the index systems to cater
for the needs of investors. Deutsche Börse AG’s objectives in making these changes are,
firstly, to give the capital market more integrity and make it more attractive to both
investors and companies planning share issues and, secondly, to create a transparent
and attractive stock market in Europe.
Directors’ Dealings
Many companies accorded high priority in 2002 to the task of regaining investor
confidence. The Fourth Financial Market Development Act passed by the German
parliament sought to support this objective and includes provisions stipulating disclosure
of so-called directors’ dealings. These relate to trading in a company’s shares by
members of its executive or supervisory bodies. During the period under review there
were no directors’ dealings in Scholz & Friends AG shares requiring disclosure under
the new regulations.
Corporate Governance
The German Corporate Governance Code contains important regulations for the
management and supervision of companies listed on German stock exchanges and lists
generally recognised standards of good, responsible corporate governance.
Among the many companies signing declarations of conformity with the German
Corporate Governance Code in 2002, Scholz & Friends AG was in December 2002 the
first German advertising and media company to issue such a declaration after approval
by its Board of Directors and Supervisory Board. The wording of the Declaration of
Conformity, the Corporate Governance Principles and the Corporate Governance
Report can be found on the company’s website at www.s-f.com. Additional information
on corporate governance at Scholz & Friends can be found on page 45 of this report.
Intensification of investor relations activities
The Investor Relations Department at Scholz & Friends is part of the company’s
communications team. Together with the Public Relations and New Business teams, it
is responsible for dissemination of clear, detailed information on the Scholz & Friends
agency network.
Scholz & Friends intensified its investor relations activities considerably over the
past year as part of its policy of satisfying the needs of its shareholders and strengthening
their confidence in the company.

The capital market sets high standards, irrespective of the segment to which a
company belongs. Scholz & Friends AG regards it as one of its key duties to create, maintain
and strengthen shareholder confidence. This is why the company has undertaken
to comply with the Corporate Governance Code and to make voluntary announcements
on its financial situation.
The e-mail newsletter circulated in 2002 contained detailed reports on the Scholz
& Friends communications network. Anyone interested was able to obtain regular,
up-to-date news of recent campaigns and productions and information on the share.
Scholz & Friends also published voluntary ad hoc announcements and made its annual
report available in German and English. It will continue to do this in the future as a
way of ensuring that international investors can obtain clear, detailed information on
the company.
The Investor Relations pages at the www.s-f.com website were redesigned last year.
They now provide all relevant information on the share and the company and explain
how to obtain copies of the annual report and place an order for the newsletter, both
of which can also be downloaded in German or English.
Analyst and media conferences were held during 2002, at which the management
made presentations of Scholz & Friends AG and held interviews with individual analysts,
institutional investors and representatives of the financial press. Scholz & Friends AG’s
first Annual General Meeting was held on 4 July 2002 in Berlin and was attended by
over one hundred shareholders, employees and other interested persons. 18,787,325
votes, equivalent to 87.55% of the subscribed capital, were present or represented at
the meeting. The next Annual General Meeting will be held in Berlin on 27 August 2003.
New pages have been added to the website at www.s-f.com, from which shareholders
can obtain all relevant information and documents as well as proxy forms granting
powers of attorney to vote at the meeting.
51 l The Share

The Orchestra of Ideas for Mercedes-Benz Commercial Vehicles
Full view on page 2
Buyers of the Actros with the
most powerful V8 engine get this
revision of the “long vehicle” sign
for free.
Mercedes-Benz looked a little
closer at the everyday problems of
motoring, and answered them
with the Vaneo.
When Mercedes-Benz does
particularly well in a magazine
readers’ poll, the vehicles themselves
bask in the glory.
52 l The Share
Objective: Add emotional value to all Mercedes-Benz
Commercial Vehicles, from the Transporter right up to a
40-tonne HGV.
Conducting idea: All advertising material should demonstrate
what it is that Mercedes-Benz shares with its customers,
whether tradesmen, truckers, hauliers or building
contractors: the passion to achieve perfect results.
Results: In every segment, market leadership was either
consolidated or even extended. Communication for
commercial vehicles has become an important part of
Mercedes-Benz’s overall brand presentation. Many
awards have been won at creative competitions, including
a Golden Lion at Cannes.
The Mercedes-Benz Axor has the
largest payload in its class, and
thus quite a predilection for extralarge
cargo.
An image campaign for the
Mercedes-Benz Transporter by
Scholz & Friends Berlin shows
how to win the hearts of the
tradesmen.
A nice surprise at the trade fair:
child-friendly giveaways for travel
enthusiasts to promote Mercedes-
Benz recreational vehicles.
The Mercedes-Benz Atego is so
easy to handle that delivery men
get almost anywhere.
The laundry’s not real, of course.
Just an amusing reference to
driving-school vehicles from
Mercedes-Benz.
Communicating at the point of
sale: “Caution! Falling prices!”
Special versions of the smart ® are
available – as a police car, for
example.
Not a good place to get stranded.
Thanks to the Mercedes-Benz
mobility guarantee, there’s no
problem for the driver, the haulier,
or the fish.
Making light of heavy loads:
dumbbells pointing to the HGV
“Tyre service for heavyweights”.

Consolidated Financial Report
53 l Consolidated Financial Report

Group Management Report
Scholz & Friends Sensai designed
a trade fair stand for The Boston
Consulting Group using bold
campaign motifs to create an
appropriate space for interviews.
54 l Consolidated Financial Report
Stagnation of the global economy
The outlook on the global economy grew increasingly sombre over the course of
fiscal year 2002, particularly in the face of an impending war with Iraq.
The impact of the weak economy in North America and Europe affected Germany
in particular; one clear indication of this impact was that economic growth in Germany
was again very low, as in the previous year, with an increase in gross domestic product
(GDP) of significantly less than 1%.
Difficult global market situation for the advertising industry
Consolidation continued to shape the international communication industry in
2002, and the level of competition within the industry intensified considerably. In
particular, fiscal year 2002 saw increasing pressure exerted on agency fees and
remuneration. As in the previous year, the key factors which contributed towards this
situation included the weak international demand of important markets and a sustained
reduction in advertising outlay, leading to a decline in capacity utilisation. In an
attempt to balance out short-term fluctuations in marketing outlay the international
agency networks reacted with headcount adjustments and enhanced cost flexibility.
Advertising environment in Germany
The SCHOLZ & FRIENDS Group earned 83% (PY 81%) of its turnover in Germany,
where the 2002 fiscal year saw the average outlay of trade and industry on advertising
decline by approximately 4%, as in the previous year (source: Nielsen Media Research
GmbH). The biggest cutbacks in advertising outlay were made by the office, IT, telecommunications
and banking industries. Other industries, such as personal hygiene and
cosmetics and the tourism industry, recognised the opportunity to promote attractive
products with countercyclical advertising investments, thereby influencing the market
structure in the coming years, and increased their outlay on advertising accordingly.
However, the increased outlay from these industries was not sufficient to compensate
for the cutbacks made by the majority of market participants.
Many advertising agencies were forced to lay off qualified employees. Unemployment
in the advertising industry reached an all-time high of nearly 5%.
The market environment of SCHOLZ & FRIENDS Group
For the SCHOLZ & FRIENDS Group the 2002 fiscal year saw the implementation of
a number of measures designed to increase the value of the company. These measures
were planned in 2001 on the basis of the merger with United Visions Entertainment AG
and the subsequent flotation of the company on the stock exchange. The merger of
SCHOLZ & FRIENDS and UVE has created a good strategic positioning for the group’s

services. One of our main objectives is to continue to reinforce and expand this position.
Increasing media convergence is constantly placing higher demands on the creative
and communicative abilities of advertising agencies, and it is becoming more and more
difficult and expensive to grab and keep the attention of the consumer and the target
group in the face of predatory competition. The resulting rise in marketing costs makes
the diversification of brand communication, the integration of marketing procedures
and the development of new formats absolutely imperative. The integration of United
Visions Group means that SCHOLZ & FRIENDS Group has now expanded its range of
services to include the promising segments event marketing and entertainment, thus
creating an excellent basis to develop new platforms for brand advertising.
These platforms enable us to powerfully communicate our clients’ brands to
potential consumers. The brand is the most important distinguishing characteristic of
a product, and it can only be successfully and profitably established if it is carefully
positioned, systematically nurtured and professionally managed.
SCHOLZ & FRIENDS is one of the most attractive addresses for creative services
in Germany; the company is eminently well equipped to satisfy customer needs. After
holding the number one spot in the creative rankings published by the respected
specialist publication for the advertising industry, werben & verkaufen, in the previous
year, SCHOLZ & FRIENDS again occupied one of the top spots this year, thus underscoring
the position we have held for many years as a leading creative force in the
marketing industry.
Share price development
Shares in SCHOLZ & FRIENDS AG have been quoted on the regulated market of
the German stock exchange in Frankfurt since 26 November 2001 under the securities
identification number 697 280. In comparison to the general development of the stock
market, the development of our shares over the fiscal year was unsatisfactory. The
shares lost 68.6% of their market value during the 2002 fiscal year.
Company situation 2002
Group structure: Integration of the UVE Group and consistent expansion of the network
After its merger with UVE in the previous year, SCHOLZ & FRIENDS Group is the
first group of agencies to offer its clients integrated push- and pull-communication
services under the same roof, that is, the strategic combination of advertising and
entertainment formats. This allows us to communicate our clients’ brand messages
efficiently and consistently.
The 2002 fiscal year saw the founding of Light Monuments GmbH in Berlin and
Mar.s Communications GmbH in Munich. The Berlin-based company Light Monuments
GmbH organises events involving creative light shows and pyrotechnics. We intend to
incorporate SCHOLZ & FRIENDS brands into these global events and thus generate
increased levels of product recognition. Mar.s Communications GmbH in Munich was
set up to service the needs of regional clients.
Furthermore, at the end of the fiscal year we also made the first part payment for
the purchase of 51% of the company COUCH POTATOES Fernsehproduktions GmbH
in Cologne (hereafter referred to as “CP”). This company is one of the leading TV
production companies in Germany and will bring even more strength to our range of
services in the area of entertainment (pull communication). CP produces more than
400 hours of televisual entertainment every year. Customers include RTL, RTL II,
Thinking is doing. Scholz & Friends
Berlin created this tagline for The
Boston Consulting Group’s
recruitment campaign. Different
artworks by Keith Haring, Horst
Antes and Felix Reidenbach show
how consultants need both brains
and hands to develop ideas that
have a substantial positive impact
on their clients’ performance.
55 l Consolidated Financial Report

This calendar with collectable
images from the cigarette brand
Prima Optima caused quite a
sensation in the Ukraine.
A below-the-line campaign by
Scholz & Friends Kyiv.
56 l Consolidated Financial Report
ProSieben and TV 3. The founding shareholders Bärbel Schäfer, a well-known television
presenter, and Martin Schäfer, managing director, will remain with the company and
continue to be shareholders.
In the area of push communication SCHOLZ & FRIENDS AG has strengthened its
business relationship with one of its key clients by increasing the company’s equity
investment in deepblue networks AG from 19% to 49%. Preparations are being made
for the purchase of the remaining shares in the company.
Furthermore, the shares of the minority shareholder of Metagate GmbH in Hamburg
were purchased at the end of the first half of the 2002 fiscal year, and our interest in
the company Bönig & Yamaoka GmbH Int. Public Relations in Hamburg was sold.
A further acquisition was the purchase of 30% of the company DDB (Ukraine) Ltd.
in Nikosia, Cyprus, through which we now have an indirect interest in SCHOLZ &
FRIENDS Kyiv, a limited company under Ukrainian law.
Earnings situation: In line with the general market environment
•Net sales
In comparison to the Consolidated Profit and Loss Account for the previous year,
turnover has fallen from Tapple 74,440 to Tapple 68,973. This is mainly due to the phasing
out of unprofitable business fields and the generally poor development of the advertising
market. The increased pressure on margins is also reflected slightly in these figures.
•Earnings before interest, taxes, depreciation and amortisation (EBITDA)
The EBITDA fell from Tapple 10,451 to Tapple 6,472. The decline in turnover of Tapple 5,467 was
absorbed by savings in personnel expenses. However, other operating expenses increased
by Tapple 1,843. This is largely attributable to the allocation of accruals for contingent losses
from leasing agreements. Furthermore, other operating income also fell by Tapple 1,002.
This is largely due to a lower level of reversal of accruals than in the previous year.
•Earnings before interest and taxes (EBIT)
The EBIT fell from Tapple 1,421 to Tapple (9,656). In addition to the aforementioned
influences on the EBITDA, this can be attributed to unscheduled depreciation of the
goodwill of the UVE Group of Tapple 8,039 due to adjustment of our services portfolio, as
well as two capitalised goodwills from agency acquisitions at our subsidiary company
SCHOLZ & FRIENDS London Ltd. in London (Tapple 567).
•Financial results
The financial results improved by Tapple 355 in comparison to the previous year. This
is mainly attributable to the repayment of existing financing loans of apple 2 million to
Cordiant Holdings GmbH, Frankfurt/Main.
•Taxes on income and earnings
The reduction in tax expenditure of Tapple 642 is primarily due to offsetting the tax
loss carry-forward of our subsidiary company SCHOLZ & FRIENDS London Ltd.,
London, with the positive tax results of other British companies of the Cordiant Group.
The resulting tax saving of Tapple 883 gives our company a claim to the payout of the tax
advantage. Only Tapple 336 of deferred tax assets were accrued in the previous year for the
tax loss carry-forward of our London subsidiary deferred in the fiscal year.
Equity situation: High equity-to-assets ratio maintained
In comparison to the Consolidated Balance Sheet of the previous year, the balance
sheet total has fallen by apple 30.7 million. Our equity-to-assets ratio has improved from
38.0% in 2001 to 39.1% in the year under review. This is due to the extensive reduction

of the debts of the group. Short-term liabilities have been reduced by apple 9 million and
long-term liabilities by apple 7 million. As a countermove fixed assets have been reduced
by apple 14.4 million, and other assets to the value of apple 5.4 million have been realised.
Resources of liquid funds amounted to apple 12 million on the balance sheet date. This puts
SCHOLZ & FRIENDS Group in a position, at least for the foreseeable future, to
operate independently without having to rely on borrowed capital.
Financial position: Liquidity excellent
The net change in cash and cash equivalents of Tapple (5,703) was substantially
lower than the cash flow statement for the previous year (Tapple 17,683). However, as
the cash flow statement for the previous year was based on the annual accounts of
NetFree AG from 31 December 2000, these figures are not wholly comparable due to
the fact that the high influx of funds in the previous year resulted from the merger of
the UVE Group with NetFree AG. The financial resources available at the beginning of
the fiscal year and the influx of funds from operative activities (Tapple 607) were used for
investments (an amount of Tapple 2,585 (PY Tapple 3,971)) and for the reduction of financial
liabilities (an amount of Tapple 3,725 (PY Tapple 4,270)). The resources of cash and
cash equivalents at the end of the fiscal year were excellent at a level of Tapple 12,035
(PY Tapple 17,735), meaning that, as well as being able to guarantee our debt service, we
have flexibility to make investments and are in a position to achieve additional earnings
through the investment of these funds.
Risks to future development
The Act on Control and Transparency in the Company Sector (KonTraG) obliges
us as a public limited company to set up an internal system of supervision within the
group in order to detect and highlight any significant risks to future development that
could have a detrimental effect or considerable influence on the company’s equity,
earnings or financial situation.
The risk management system of SCHOLZ & FRIENDS Group is an integral component
of the entire planning, control and reporting process and ensures the systematic
identification, assessment, control and communication of any possible risk factors.
A comprehensive management system has been established for the swift recognition
of any significant risks to the company. This system comprises two separate components.
The management of all the company’s operative units systematically registers and
assesses all risks to the company. Risks are classified in accordance with the probability
of occurrence and expected level of damages incurred. This is an effective and standardised
benchmark for the assessment of risks.
The risk assessment system is closely linked with the controlling procedure. All
the company’s units regularly examine whether there have been any changes to risk
expectations and whether any anticipated risks have actually occurred.
Amongst the risks that could possibly affect the future development of the
company, the following merit particular emphasis:
Economic risks
Should the downswing of the European economy continue on a long-term basis,
the resulting reticence in awarding international advertising budgets could have a
direct impact on SCHOLZ & FRIENDS Group. We are currently combating this risk
Fierce yet sweet, a hot combination.
Just like this advertisement
by Scholz & Friends Kyiv for a
new vodka with honey and pepper
flavouring from Nemiroff.
57 l Consolidated Financial Report

A, D, H, I, O, P and S.
Continues on the next page.
58 l Consolidated Financial Report
through the expansion of our range of services, the expansion of our network and the
consistent strengthening of our market position.
Sector-related risks
When creating advertising concepts SCHOLZ & FRIENDS Group are subject to
restriction by certain legal stipulations, in particular concerning the protection of
minors, the protection of privacy and personal rights and the prevention of unfair
competition. At the same time SCHOLZ & FRIENDS’ clients and the products and
services that are being advertised are sometimes subject to other advertising restrictions,
including the following:
Impending prohibition of advertising for tobacco products
(European SCHOLZ & FRIENDS companies)
One advertising budget held by SCHOLZ & FRIENDS is that of the Reemtsma Group,
which makes the company dependent to a certain extent on net sales from tobacco advertising.
These revenues are threatened by the tobacco advertising guidelines submitted by
the EU Council of Ministers in 2002 and approved by the EU Minister for Health at the
start of 2003. These guidelines impose considerable restrictions on the advertising of tobacco
products. The new guidelines state that advertising of cigarettes and other tobacco
products will no longer be permitted in newspapers and magazines, on the radio, on the
Internet and at international sporting events. Tobacco products may still be advertised on
billboards and hoardings and in cinemas. The advertising ban does not affect holidays,
shoes and cosmetics that are marketed by the tobacco companies. The EU Member States
must implement the new tobacco advertising guidelines until 31 July 2005. A separate
transitional period has been granted for tobacco advertising at sporting events, which
runs until 1 October 2006. After voting against the proposed guidelines in the EU Council
of Ministers, the governments in Germany and Great Britain have announced their
intention to bring an action against the guidelines at the European Court of Justice.
Nonetheless, the implementation of the new tobacco advertising guidelines, as well as
tighter legal obligations in other areas, constitutes a risk for SCHOLZ & FRIENDS Group.
However, current assessment of the risk indicates that it will have only a limited effect
in Germany because only interregional media are affected by the ban and advertising in
cinemas and on regional billboards and hoardings (Citylight) will still be permitted.
Decision on copyright contract law (German SCHOLZ & FRIENDS companies)
A bill has now been passed to reinforce the contractual position of authors and
performing artists. This bill grants more rights to the originators of a creative work but
also takes into account the requirements of the advertising industry. The main concern
of the reform is to guarantee authors and freelance artists an appropriate amount of
remuneration for the use of their work in the future.
Because the legislators do not want to, nor are able to, regulate the multitude of
forms of use of a creative work, the relevant parties (associations of authors and users
of original works, such as advertising agencies and film producers) will determine the
amount of remuneration that is appropriate for the use of the work themselves on the
basis of a procedural code (common payment regulations). This will then form a mutual
and binding basis for the appropriateness of an amount of remuneration.
In the event that the parties involved in the aforementioned procedure fail to agree
on the stipulations of the payment regulations, the new bill makes provision for an

arbitration procedure between the parties with the aim of reaching a settlement. If the
arbitration ruling proves to be unacceptable to both parties, it will have no binding
effect. The arbitration ruling should certainly be seen as an indicator for the calculation
of an appropriate price. Advertising agencies and film producers will have three months
in which to object to a settlement on the amount of remuneration payable as a result
of the use of a work. We will have to wait and see the extent to which such settlements
are tacitly established in practice as models for the amount of remuneration payable to
authors and actors in the industry.
Dependency on important clients
To a large extent we have become dependent on current business relationships
with our most important clients, who at the moment include Reemtsma, Tchibo,
DaimlerChrysler, Activest, Hapag-Lloyd, Coca-Cola and the Ministry of the State of
Baden-Württemberg. In the event that some of these clients choose to take their business
elsewhere, this would have a considerable effect on the business operations of
SCHOLZ & FRIENDS. We are combating this risk by ensuring that we provide top-quality
services from qualified personnel, by making every effort to ensure the satisfaction of
our clients and by expanding our clientele to include new clients.
Financial situation of our parent company/Possible change of the majority shareholder
SCHOLZ & FRIENDS AG is an indirect subsidiary company of the Cordiant
Communications Group plc., London (hereafter referred to as “Cordiant”). Due to the
strained financial position of our current parent company, plans have been made to
sell its 77% interest in SCHOLZ & FRIENDS AG. In the event that this sale does not
take place and Cordiant becomes illiquid, there is a danger that the loan granted to
our company, which at the moment stands at apple 8.9 million, will mature. In order to
combat this risk we have made sure that we have sufficient liquid funds to cover the
repayment of the loan. Furthermore, if the shares in our company are sold, there is a
good chance that our expansion plans could be implemented better under a new parent
company, leading to a more significant increase in the value of the company.
Dependence on qualified personnel
The entire advertising and entertainment industry is characterised by its high requirement
for qualified, and in particular creative, personnel. Due to the poor economic
environment and the current situation in the advertising industry the staff turnover rate
has decreased considerably and the number of qualified personnel applying for jobs
has increased. As the future success of SCHOLZ & FRIENDS is dependent to a large extent
on the quality of its work force and managerial staff, the company intends to build
long-term working relationships with these employees through participation in share
ownership schemes for partners and employees.
Other risks
We do not foresee any significant legal risks. In our branch of industry there is
always the possibility of risks arising due to the infringement of utilisation rights or
privacy and personal rights. We protect ourselves against such risks by employing a
system to safeguard our interests. Other risks, for example in the area of IT, are not
considered significant.
The alphabet, composed of typical
views from Berlin. Scholz &
Friends Berlin created this cinema
commercial to convey what is in
the Berliner Zeitung: No other city
has more to say.
59 l Consolidated Financial Report

60 l Consolidated Financial Report
We are convinced that we deal with and protect ourselves against all possible risks
adequately. At the moment there are no risks that could possibly endanger the existence
of SCHOLZ & FRIENDS Group.
Outlook
The research institutes predict growth (GDP) in the world economy of between 3%
and 4% in the year 2003. The mainstay for this economic recovery will be growth in the
United States. However, this predicted growth in 2003 is dependent on avoiding the
negative effects that would result from a possible war with Iraq and further terrorist
attacks. The current economic weakness will continue in the European Union. Experts
predict growth of the GDP in the EU of about 1.5%. In the opinion of the research
institutes, growth within the German economy will be below average. Current estimates
state that growth (GDP) will be around 1.0%, and the outlook remains cautious. One
factor that has an impact is the rising euro. Furthermore, ongoing discussions on
amendments to taxation law make it difficult to draw up definite plans. Stock markets
and capital markets put pressure on growth, as does the increased price of oil. These
factors have a detrimental effect on employment and consumption expenditure.
These unfavourable economic framework conditions are also having an effect on the
communication industry. The Central Association of German Advertisers (ZAW) predicts
growth of a mere 1% for the German advertising market in 2003. The mood continues to
be restrained on all three levels of the advertising industry – advertising companies, advertising
agencies and advertising media – although the outlook is by no means pessimistic.
Along with the other significant operatives in the advertising market, we assume that we
have already reached rock bottom and that it is only a matter of time before recovery
starts. However, we still expect a sluggish market and therefore an unchanged level of
turnover in 2003. At the same time we also expect an improvement in the amount of
earnings on account of the restructuring measures that have already been implemented.
We have been focusing on preparations for further company acquisitions during
the course of the fiscal year. This refers in particular to the purchase of the remaining
shares in the company deepblue networks AG in Hamburg and the takeover of the
majority shareholding in the company COUCH POTATOES Fernsehproduktions GmbH
in Cologne. Both companies are operating with above-average profit at the moment
and will be in a position to further increase their yield through the synergy effect
generated by the merger with SCHOLZ & FRIENDS.
Despite the negative economic data, we expect to be able to improve considerably
on the net loss in the 2002 fiscal year before interest and tax (EBIT) of apple (9.7) million
and, with stable turnover, achieve positive results.
This forecast already takes into account the Exposure Draft 3 of the International
Accounting Standards Board (IASB), which states that as of the 2003 fiscal year it will
no longer be permitted to carry out scheduled depreciation on any goodwill that results
from company mergers in accordance with IAS 22. In the event that, contrary to our
expectations, the aforementioned exposure draft does not lead to an amendment of the
current legal structure, we intend to carry out scheduled depreciation of apple 2.7 million
whilst maintaining a positive EBIT.
Despite the aforementioned negative influences, we view SCHOLZ & FRIENDS’
business prospects with confidence. The advertising budgets secured in the first two
months of the current fiscal year back up this positive outlook. The improved networking

of all of our company’s communicative activities should lead to higher proceeds and a
greater level of synergy. Targeted acquisitions in both national and international growth
areas (e.g. customer relationship management/CRM and PR) will allow us to fulfil the
requirements of our clients and enable us to safeguard and strengthen our position on
the market. The profitability of SCHOLZ & FRIENDS Group in the 2003 fiscal year will
benefit from the elimination of certain extra burdens from the 2002 fiscal year, mainly
attributable to unscheduled depreciation on goodwill.
Corporate Governance Code
On 20 August 2002 the government commission appointed by the Federal Ministry
of Justice to draw up Corporate Governance Principles issued the “German Corporate
Governance Code”. A revised version of the code was published on 25 November 2002
on the Federal Gazette Web site, which can be found under www.ebundesanzeiger.de.
SCHOLZ & FRIENDS AG, as parent company of SCHOLZ & FRIENDS Group, issued its
own Corporate Governance Principles in December 2002 (www.s-f.com). As far as possible
these company principles are in line with the principles of the German Corporate
Governance Code. The members of the Board of Directors and Supervisory Board of
SCHOLZ & FRIENDS AG, as well as the managerial staff of SCHOLZ & FRIENDS
Group, are committed to observing the Corporate Governance Principles of SCHOLZ
& FRIENDS AG during the performance of their duties for the company. SCHOLZ &
FRIENDS AG has issued the declaration stipulated in section 161 of the German Stock
Corporation Act (Aktiengesetz [AktG]) and provided access to these documents for
the shareholders through publication on the company’s Web site (www.s-f.com).
Reference to the dependent company report
The dependent company report drawn up by the Board of Directors of SCHOLZ &
FRIENDS AG in accordance with section 312 of the German Stock Corporation Act
(AktG) concludes with the following declaration:
“Our company receives appropriate compensation for all legal transactions cited
in the report concerning relations with affiliated companies. We are not disadvantaged
in any way as a result of the undertaking or forbearance of any of the actions listed in
the report. This assessment is based on our knowledge of circumstances at the time of
carrying out the transactions listed in the report.”
Significant events after the end of the 2002 fiscal year
With the exception of the current negotiations for the sale of the majority shareholding
in our company by Cordiant, as described above, there have been no other
occurrences after the end of the 2002 fiscal year that hold any particular significance
for SCHOLZ & FRIENDS AG or that could lead to changes to the assessment of the
company’s current situation.
Berlin, 28 February 2003
SCHOLZ & FRIENDS AG
The Board of Directors
First class! The fan advertisements
by Scholz & Friends Hamburg for
the AWD Arena allude to the
national football division as well
as AWD’s financial strategy.
61 l Consolidated Financial Report

Consolidated Balance Sheet (IFRS)
as of 31 December 2002
ASSETS Actual Actual
Tapple Appendix 31 Dec. 2002 31 Dec. 2001
A Fixed assets
I Intangible assets
1 Concessions, industrial and similar rights and
assets and licences in such rights and assets
V.1.1 354 495
2 Goodwill V.1.1 19,504 31,179
3 Payments on account 104 11
4 Leased software V.1.1 47 116
II Tangible assets
1 Technical equipment and machines 196 617
2 Other equipment, factory and office equipment 3,729 4,671
3 Fixtures and reconstructions 4,749 5,413
4 Payments on account and assets under construction 0 369
5 Capital leases 929 1,795
III Financial assets
1 Shares in affiliated enterprises V.1.2 0 25
2 Participations V.1.2 58 58
3 Investment in associated enterprises V.1.2 1,476 998
4 Long-term investments V.1.2 8 3
5 Other loans V.1.2 317 369
6 Payments on account V.1.2 291 0
62 l Consolidated Financial Report
31,762 46,119
B Deferred tax assets V.5 5,067 5,852
C Current assets
I Inventories
1 Raw materials and supplies 7 0
2 Work in progress V.2 849 504
3 Finished products V.2 0 779
4 Payments on account 5 0
II Receivables and other assets
1 Billable prodution orders V.3 1,108 4,952
2 Trade receivables 12,544 14,559
3 Receivables from affiliated enterprises V.3 1,909 793
4 Receivables from associated enterprises V.3 850 7
5 Other assets V.3 2,235 7,668
III Cash in hand, bank balances and cheques V.4 12,035 17,802
31,542 47,064
D Prepaid expenses 383 411
Total assets 68,754 99,446

EQUITY AND LIABILITIES Actual Actual
Tapple Appendix 31 Dec. 2002 31 Dec. 2001
A Equity
1 Subscribed capital 21,460 21,460
2 Capital reserves 16,965 16,965
3 Revenue reserves 70 79
4 Foreign currency translation adjustment 252 (83)
5 Retained earnings year-end (11,880) (674)
26,867 37,747
B Minority interest VI.2 47 393
C Grants related to assets VI.3 384 486
D Accruals
1 Tax accruals 1,072 1,916
2 Other accruals VI.4 10,461 11,824
E Long-term liabilities
11,533 13,740
1 Leasing liabilities 527 1,056
2 Trade payables VI.5 1,718 3,486
3 Payables to affiliated enterprises VI.5 2,000 6,455
4 Deferred tax liabilities VI.7 64 180
F Short-term liabilities
4,309 11,177
1 Leasing liabilities 511 990
2 Liabilities to banks 0 67
3 Payments received on accounts of orders 1,151 5,207
4 Trade payables VI.5 6,905 8,393
5 Payables to affiliated enterprises VI.5 9,817 7,411
6 Payables to associated enterprises VI.5 295 1,326
7 Other liabilities,
of which taxes: Tapple 1,850 (PY: Tapple 5,647),
of which relating to social security and
similar obligations Tapple 902 (PY: Tapple 1,196)
VI.5 4,351 8,641
23,030 32,035
G Deferred income VI.6 2,584 3,868
Total equity and liabilities 68,754 99,446
63 l Consolidated Financial Report

Consolidated Profit and Loss Account (IFRS)
1 January until 31 December 2002
Actual Actual
Tapple Appendix 2002 2001
1 Net sales III.1 68,973 74,440
2 Decrease in work in progress (202) (352)
3 Other operating income III.2 4,078 5,080
4 Cost of materials
a) Cost of raw materials, consumables and supplies (497) (1,520)
b) Cost of purchased services III.3 (11,256) (8,176)
5 Personnel expenses
a) Wages and salaries III.4 (30,009) (36,208)
b) Social security and other pension costs,
of which in respect of old age pensions:
Tapple 6 (PY: Tapple (5))
(5,294) (5,414)
6 Depreciation and amortisation III.5 (16,128) (9,030)
of intangible and tangible assets
7 Other operating expenses III.6 (19,381) (17,538)
8 Income from participations
of which from affiliated enterprises: Tapple 0 (PY: Tapple 0)
III.7 0 43
9 Income from associated enterprises III.8 60 96
10 Other interest and similar income
of which from affiliated enterprises: Tapple 55 (PY: Tapple 101)
III.9 336 316
11 Interest and similar expenses
of which to affiliated enterprises:
Tapple (642) (PY: Tapple (646))
III.9 (1,096) (1,431)
12 Result from ordinary activities (10,416) 306
13 Taxes on income payable – current III.10 311 (2,574)
14 Taxes on income payable – deferred III.10 (677) 1,566
15 Other taxes payable (389) (47)
16 Minority interests in net income III.11 (44) (677)
17 Consolidated net loss for the year (11,215) (1,426)
18 Beginning retained earnings (674) 5,586
19 Dividends paid 0 (4,834)
20 Transfer from capital reserves 0 0
21 Transfer from revenue reserves 9 0
22 Retained earnings year-end (11,880) (674)
Earnings per share VI.1 apple (0.52) apple (0.15)
64 l Consolidated Financial Report

Consolidated Cash Flow Statement (IFRS)
1 January until 31 December 2002
Actual Actual
Tapple 2002 2001
Cash flows from operating activities
Net loss for the year (11,215) (1,426)
+ Depreciation and amortisation expenses 16,128 9,030
+ Increase in provisions for doubtful accounts 119 257
+/– Income/loss on disposal of fixed assets (156) 692
+/– Taxes from income payable - current 677 (1,566)
+/– Minority interests in net income 44 (328)
– Other non-cash items (60) (53)
+ Change in operating assets 9,857 3,909
– Change in operating liabilities (14,787) (7,038)
Net cash from operating activities 607 3,477
Cash flows from investing activities
– Investments in intangible assets (1,893) (114)
– Additions to fixed assets (1,649) (1,174)
+/– Cash flow from disposal/acquisition of subsidiaries/
other business units
(590) 19,115
+ Proceeds from sale of fixed assets 1,547 119
Net cash from investing activities (2,585) 17,946
Cash flows from financing activities
– Dividends paid 0 (4,834)
+ Proceeds from borrowings 0 7,059
– Repayments of funds (2,678) (4,096)
– Payments of finance lease liabilities and similar obligations (1,047) (1,869)
Net cash used in financing activities (3,725) (3,740)
Net increase in cash and cash equivalents (5,703) 17,683
Effect of foreign currency translation on cash 3 0
Cash and cash equivalents at beginning of period 17,735 52
Cash and cash equivalents at end of period 12,035 17,735
65 l Consolidated Financial Report

Movement in Equity Shareholders’ Fund (IFRS)
Foreign
Retained currency
Subscribed Capital Revenue earnings translation
Tapple capital reserve reserve year-end adjustment Equity
At beginning of year 2001 (NetFree AG) 50 0 0 0 0 50
Recapitalisation through investment
in kind of shares SCHOLZ & FRIENDS
Group GmbH by BATES Deutschland
Holding GmbH (reverse acquisition)
15,877 (4,919) 79 5,586 (30) 16,593
Recapitalisation through investment 1,833 0 0 0 0 1,833
in kind of shares SCHOLZ & FRIENDS
Group GmbH by Millennium Venture
Capital AG
Merger with United Visions 3,700 21,884 0 0 0 25,584
Entertainment AG,
including recapitalisation
Net loss for the year 0 0 0 (1,426) 0 (1,426)
Foreign currency translation 0 0 0 0 (53) (53)
Dividends 0 0 0 (4,834) 0 (4,834)
At end of year 2001 21,460 16,965 79 (674) (83) 37,747
At beginning of year 2002 21,460 16,965 79 (674) (83) 37,747
Transfer from revenue reserves 0 0 (9) 9 0 0
Net loss for the year 0 0 0 (11,215) 0 (11,215)
Foreign currency translation 0 0 0 0 335 335
At end of year 2002 21,460 16,965 70 (11,880) 252 26,867
66 l Consolidated Financial Report

Reconciliation of Accruals (IFRS)
for the fiscal year 2002
Changes in
companies to be
consolidated,
foreign currency Used Reserved Made
At start of adjustment, during during during At end of
Tapple year 2002 reclassifications the year the year the year year 2002
Tax Accruals
Other Accruals
1,916 0 1,175 116 447 1,072
Accruals for impending losses 0 0 0 0 2,041 2,041
Outstanding invoices 2,935 (47) 2,120 517 1,361 1,612
Outstanding holiday 1,056 24 146 263 302 973
Acquisition of company shares 2,108 (71) 1,574 0 458 921
Repayment requirements 836 0 0 0 0 836
Director’s fee 690 (4) 509 131 597 643
Audit and consultancy fee 402 (8) 297 49 520 568
Addtl. taxes from a tax audit 0 0 0 0 370 370
Termination pay 1,149 (10) 1,062 77 289 289
Employee bonuses 284 2 77 159 107 157
Write-off adjustments 578 (38) 540 0 138 138
Contributions to professional
associations
60 21 80 1 117 117
Restructuring 242 0 162 80 0 0
Other 1,484 (98) 644 194 1,248 1,796
11,824 (229) 7,211 1,471 7,548 10,461
13,740 (229) 8,386 1,587 7,995 11,533
67 l Consolidated Financial Report

Summary of Fixed Assets
(Gross figures)
Acquisition and production costs
Balance brought
forward to Reclassi- As of
Tapple 1 Jan. 2002 Additions fications Disposals 31 Dec. 2002
I Intangible assets
1 Concessions, industrial and similar rights
and assets and licences in such rights
and assets
694 137 0 50 781
2 Goodwill 36,317 1,642 0 871 37,088
3 Payments on account 252 93 0 0 345
4 Leased software 225 21 0 4 242
37,488 1,893 0 925 38,456
II Tangible assets
1 Technical equipment and machines 760 96 0 85 771
2 Other equipment, factory and office
equipment
5,722 707 0 565 5,864
3 Fixtures and reconstructions 6,006 202 247 437 6,018
4 Payments on account and assets under
construction
369 0 (247) 122 0
5 Capital leases 2,948 0 0 125 2,823
15,805 1,005 0 1,334 15,476
III Financial assets
1 Shares in affiliated enterprises 25 0 0 21 4
2 Loans in affiliated enterprises 53 0 0 53 0
3 Participations 58 0 0 0 58
4 Investment in associated enterprises 998 620 0 142 1,476
5 Long-term investments 3 5 0 0 8
6 Other loans 369 16 0 64 321
7 Payments on account 0 291 0 0 291
1,506 932 0 280 2,158
Total 54,799 3,830 0 2,539 56,090
68 l Consolidated Financial Report

Accumulated depreciation Net book value
Balance brought Depreciation
forward to of the Reclassi- As of Currency As of As of
1 Jan. 2002 period fications Disposals 31 Dec. 2002 differences 31 Dec. 2002 31 Dec. 2001
199 250 0 24 425 (2) 354 495
5,138 12,407 0 1 17,544 (40) 19,504 31,179
241 0 0 0 241 0 104 11
109 87 0 3 193 (2) 47 116
5,687 12,744 0 28 18,403 (44) 20,009 31,801
143 456 0 16 583 8 196 617
1,051 1,303 1 301 2,054 (81) 3,729 4,671
593 783 0 107 1,269 0 4,749 5,413
0 0 0 0 0 0 0 369
1,153 834 (1) 92 1,894 0 929 1,795
2,940 3,376 0 516 5,800 (73) 9,603 12,865
0 4 0 0 4 0 0 25
53 0 0 53 0 0 0 0
0 0 0 0 0 0 58 58
0 0 0 0 0 0 1,476 998
0 0 0 0 0 0 8 3
0 4 0 0 4 0 317 369
0 0 0 0 0 0 291 0
53 8 0 53 8 0 2,150 1,453
8,680 16,128 0 597 24,211 (117) 31,762 46,119
69 l Consolidated Financial Report

The Orchestra of Ideas in Hamburg, Budapest, Kiev and Prague for Chio (examples: see page 73). From left to right, top row: Michael
von Bach (advertising), Stefanie Zimmermann (advertising), Martina Haut (advertising), Henk Knaupe (event); centre: Birgit Puklitzsch
(PR), Malte Mählmann (event), Gregor Stute (advertising), Achim Krempel (advertising); bottom row: Christian Stegemann (PR), Stefan
Setzkorn (advertising), Joachim Vornkahl (advertising); not shown: Nicole Drabsch (advertising), Nina Herrmann (advertising), Juliane

Schröter (advertising), Silke Schneider (advertising), Rudolf Rodenburg (advertising), Emese Foldhazi (advertising), Serge Lavrentyev
(advertising), Sona Lorenzova (advertising), Yana Gorelina (advertising), Stas Muhin (advertising), Sveta Tkachenko (advertising),
Alena Shramchenko (advertising), Olesya Poludnenko (advertising), Melanie Bienemann (event), Christian Ringel (advertising), Peter
Galik (advertising).

Appendix (IFRS)
I Standards for the Consolidated Financial Statement
in accordance with International Financial Reporting
Standards (IFRS)
1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
2 Statement of currency . . . . . . . . . . . . . . . . . . . . . . . 74
3 Changes to the method of portrayal . . . . . . . . . 74
4 Significant differences between HGB and
IFRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
5 Use of estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
6 Value clarification . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
7 Principles of consolidation . . . . . . . . . . . . . . . . . . 75
8 Companies included in the consolidation . . . . 76
9 Founding, acquisition and sale of subsidiary
companies and other business entities . . . . . . . 76
10 Companies that make use of the exemption
granted in section 264 subsection 3 of
German Commercial Code (HGB) . . . . . . . . . . . 78
11 Currency conversion . . . . . . . . . . . . . . . . . . . . . . . . . 78
II Accounting methods and valuation principles
1 General principle . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
2 Fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
2.1 Industrial and similar rights and assets and
licences in such rights and assets . . . . . . . . . . . . 79
2.2 Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
2.3 Depreciation and amortisation of the
fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
2.4 Leasing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
2.5 Shares of subsidiary companies/participations . 80
2.6 Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
2.7 Payments on account . . . . . . . . . . . . . . . . . . . . . . . 80
3 Deferred tax from income . . . . . . . . . . . . . . . . . . . 80
4 Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
5 Receivables and other net assets . . . . . . . . . . . . . 80
6 Short-term investments . . . . . . . . . . . . . . . . . . . . . . 81
7 Liquid funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
8 Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
9 Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
10 Grants related to assets . . . . . . . . . . . . . . . . . . . . . 81
11 Accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
12 Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
13 Deferred income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
72 l Consolidated Financial Report
14 Market value of financial instruments . . . . . . . 82
15 Revenue
a) Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
b) Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
16 Expenses
a) Operating lease payments . . . . . . . . . . . . . . . . 82
b) Tax on income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
III Notes to the Consolidated Profit and Loss Account
1 Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
2 Other operating income . . . . . . . . . . . . . . . . . . . . . 84
3 Cost of materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
4 Personnel expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 84
5 Depreciation and amortisation of tangible
and intangible assets . . . . . . . . . . . . . . . . . . . . . . . . 85
6 Other operating expenses . . . . . . . . . . . . . . . . . . . 86
7 Income from participations . . . . . . . . . . . . . . . . . 86
8 Income from associated enterprises . . . . . . . . . 86
9 Interest and similar income/expenses . . . . . . . . . 86
10 Tax on income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
11 Minority interests in net income . . . . . . . . . . . . . 90
IV Notes to the Consolidated Cash Flow Statement
1 Income from associated enterprises . . . . . . . . . 90
2 Change in operating assets . . . . . . . . . . . . . . . . . . 90
3 Change in operating liabilities . . . . . . . . . . . . . . . 90
4 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
5 Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
6 Proceeds from/repayment of borrowings . . . . . 91
7 Effects of changes to exchange rates on
liquid funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
8 Liquid funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
9 Interest and tax payments . . . . . . . . . . . . . . . . . . . 92
V Notes to the Consolidated Balance Sheet – Assets
1 Fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
1.1 Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
1.2 Financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
2 Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
3 Receivables and other assets . . . . . . . . . . . . . . . . . 94
4 Cash and cash equivalents . . . . . . . . . . . . . . . . . . . 94
5 Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . 95

VI Notes to the Consolidated Balance Sheet –
Equity and Liabilities
1 Earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . 95
2 Minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
3 Grants related to assets . . . . . . . . . . . . . . . . . . . . . 96
4 Accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
5 Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
6 Deferred income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
7 Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . 98
VII Segment information
1 Business fields . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
2 Regions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
VIII Miscellaneous information
1 Operating lease payments . . . . . . . . . . . . . . . . . . . 99
The Orchestra of Ideas for Chio
Full view on page 70
Participate at your own risk!
Scholz & Friends Hamburg and
Scholz & Friends Brand Affairs
realised the Chio Kick 2002
promotion event.
Chio’s own font is an important
part of coherent corporate identity.
Designed by Scholz & Friends
Hamburg with FontShop Berlin.
Objective: Brand extension from a classic potato chips
brand to a snack brand
Conducting idea: Chio snacks are so irresistibly spicy
that you’d risk everything to get them.
Tagline: Würze auf eigene Gefahr! (Spiciness at your
own risk!)
Results: Acceptance of the brand in the youth target
group significantly increased. Market leadership consolidated
in the tortilla chips and dips segment.
A large audience crowded around
the spectacle at the Chio Kick
event.
Thanks to a TV commercial created
by Scholz & Friends Kyiv, even
people in the Ukraine are aware of
the dangers of the spicy Chio Chips.
2 Contingencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
3 Employee benefit programme/Stock option plan 100
4 Capitalisation of SCHOLZ & FRIENDS AG . . . . . . . . 101
5 Board of Directors and Supervisory Board . . . 101
6 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
7 Related parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
7.1 Companies: Cordiant Group . . . . . . . . . . . . . . . . 103
7.2 Natural persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
7.3 Relationship of the UVE Group to related
parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
8 Declaration of Conformity with the
Corporate Governance Code . . . . . . . . . . . . . . . . 104
9 Significant events after the end of the
fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
Auditors’ Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Chio Jumbo Flips not only taste
great, they are also much bigger
than other peanut flips. Billboard
designed by Scholz & Friends
Hamburg.
Scholz & Friends Hamburg also
warns German television viewers
of the perils of eating while
driving …
A classic ad motif for Chio’s
“Curry Ketchup” flavoured chips,
by Scholz & Friends Hamburg.
… the red splatters are luckily only
drips from Chio’s “Dip!”.
73 l Consolidated Financial Report

Appendix (IFRS)
Crocodiles are killed to produce
crocodile bags. This advertisement
by Scholz & Friends Budapest
reinforces this idea for the animal
protection organisation Cites.
74 l Consolidated Financial Report
I Standards for the Consolidated Financial Statement in accordance with
International Financial Reporting Standards (IFRS)
1 General
The Consolidated Financial Statement of the SCHOLZ & FRIENDS Group (SCHOLZ
& FRIENDS) dated 31 December 2002 has been drawn up in accordance with the standards
issued by the International Accounting Standards Board (IASB) in London, as well
as the interpretations of these standards issued by the Standing Interpretations Committee
(SIC, since December 2001 known as the International Financial Reporting Interpretations
Committee [IFRIC]) of the IASB. The annual accounts of the companies included
in the Consolidated Financial Statement have been drawn up in accordance with the
applicable conditions and standards in the countries in which the companies are based
and adjusted accordingly to comply with the IFRS accounting principles and valuation
methods. This Consolidated Financial Statement satisfies the requirements of section
292a of German Commercial Code (HGB). In accordance with the requirements of
section 292a of German Commercial Code (HGB), the accounting principles and valuation
methods used during the preparation of this Consolidated Financial Statement in
accordance with IFRS are compatible with the conditions of the Seventh EC guideline.
All of the individual annual accounts included in this Consolidated Financial
Statement have the same balance sheet date as the Consolidated Financial Statement.
2 Statement of currency
This Consolidated Financial Statement has been drawn up in euros. All amounts are
shown in thousands of euros. Excepted from this rule are figures relating to earnings
per share.
3 Changes to the method of portrayal
Due to its negligible level of significance, the item reinsurance claims, which in the
previous year was listed as a separate item under financial assets, is shown this fiscal year
together with other loans. The previous year’s figures have been adjusted accordingly.
The reductions to operating lease payments due to the granting of rent-free periods
for business premises in both Hamburg and Berlin, which were shown under trade
payables, have been shown this fiscal year under deferred income. The previous year’s
figures have been adjusted accordingly.
4 Significant differences between HGB and IFRS
For SCHOLZ & FRIENDS the following differences exist between the accounting
principles and valuation methods stipulated in the German Commercial Code (HGB) and
those in the International Financial Reporting Standards (IFRS):
•Formation of deferred taxes on the basis of balance-sheet-orientated liability methods
whilst taking into account tax loss carry-forward (IAS 12)
•Periodic allocation of received investment grants to the corresponding balance sheet
item grants related to investment (IAS 20)

•Change to the allocation of economic ownership from finance leasing contracts (IAS 17)
•Treatment of goodwill from capital consolidation (IAS 22)
•Prohibition of the formation of expense accruals, as well as no formation of other
accruals if the probability of recourse to such accruals is less than 50% (IAS 37)
•Consideration of leasing-incentive agreements (landlord subsidies, rent-free periods,
graduated rent) for the entire term of the rental contract (SIC 15)
•Consideration of the cost of flotation on the stock exchange with no effect on the
operating results as a reduction of the capital reserves after deduction of effects of tax
on income (SIC 17)
5 Use of estimates
During the course of the preparation of both the individual annual accounts and the
Consolidated Financial Statement in accordance with IFRS, the company had to make
certain estimates and assumptions, which influence the valuation and assessment of
the assets and liabilities shown on the balance sheet, the details concerning possible
liabilities and contingent claims on the date of the balance sheet and estimated income
and expenses for the fiscal year. The actual amounts could possibly deviate from these
estimates.
6 Value clarification
All value-clarifying events between the date of the balance sheet and the preparation
of the financial statements have been taken into account.
7 Principles of consolidation
The Consolidated Financial Statement of the group of companies includes the
figures of SCHOLZ & FRIENDS AG and the enterprises under its control. An enterprise is
usually described as under the control of a group if the group holds more than 50% of
the voting rights of the enterprise. The equity attributable to minority shareholders and
the annual results of subsidiary companies included in the group are shown separately
on the Consolidated Balance Sheet and the Consolidated Profit and Loss Account.
The capital consolidation of SCHOLZ & FRIENDS was carried out on 1 January
1998, or at a later date of purchase, in accordance with the purchase method. The
consolidation of the SCHOLZ & FRIENDS Group GmbH with SCHOLZ & FRIENDS AG
occurred through reverse acquisition on 1 January 2001. There are no considerable
differences between the first consolidation on 1 January 1998 and the consolidation to
be carried out in accordance with IFRS at the earlier time of purchase, because all the
companies involved in the consolidation are companies founded by SCHOLZ & FRIENDS.
The differences that arise on the asset side of the balance sheet due to the offset of the
acquisition costs of the company or of the subsidiary companies included in the Consolidated
Financial Statement against the current value of the net assets of the company,
either in their entirety or in proportion to the shareholding of the group in the company,
are shown as goodwill and are depreciated on a linear basis over an estimated useful
life of ten years.
Receivables and liabilities between companies included in the consolidation have
been set off against each other. Accruals, accumulated depreciation and valuation
allowances that have been formed by consolidated companies for intra-group risks have
been reversed to the benefit of the annual net income and/or the profit/loss carried
Last year 957 homeless dogs found
a home with the help of the animal
protection organisation Rex Dog
Shelter Foundation. Reason
enough to thank the helpers for
their support with this campaign
from Scholz & Friends Budapest.
75 l Consolidated Financial Report

A promotion with tradition:
rallies featuring Mercedes-Benz
classic cars. Atmospheric
advertising material created
by Scholz & Friends Berlin.
76 l Consolidated Financial Report
forward, insofar as the group as an economic unit does not expect any disadvantages
as a result of such a reversal.
Interim results from intra-group payment transactions have been eliminated for
the benefit of the current assets. There have been no sales of fixed assets within the
reporting period. Shares in associated enterprises have been assessed in accordance
with the equity accounting method. The proportional income from associated enterprises
is shown separately on the Consolidated Profit and Loss Account under the
balance sheet item income from associated enterprises. If the group’s proportional loss
from an associated company exceeds the net book value of the participation, this is
reduced to zero and further losses are not taken into account. Associated enterprises
are companies on which the group has a significant influence. This is usually the case
when the group holds a proportional shareholding of between 20% and 50%.
8 Companies included in the consolidation
In accordance with the aforementioned principles of consolidation, in addition to
SCHOLZ & FRIENDS AG, the Consolidated Financial Statement of 31 December 2002
includes 29 (PY 28) subsidiary companies, of which 18 (PY 17) are based within Germany
and 11 (PY 11) are based in countries outside Germany by way of full consolidation.
Furthermore, another 3 (PY 3) companies were included on the balance sheet on the
basis of the equity accounting method (see table below).
9 Founding, acquisition and sale of subsidiary companies and other business entities
The group’s share of Metagate GmbH, Hamburg, was increased from 80% to 100%
in the 2002 fiscal year. The purchase price was Tapple 130. This has resulted in goodwill of
Tapple 98. The two companies Light Monuments GmbH, Berlin, and Mar.s Communications
GmbH, Munich, were founded in the 2002 fiscal year and are therefore included in the
Consolidated Financial Statement for the first time. Bönig & Yamaoka GmbH Int. Public
Relations, Hamburg, which was included in the Consolidated Financial Statement as a
result of its full consolidation in the group, was sold on 30 April 2002 along with this
company’s significant shareholding in John Warning GmbH, Hamburg. The shareholding
in Lentz Entertainment GmbH, Berlin, which was shown on the previous year’s Consolidated
Financial Statement as an associated company, was written off due to the
opening of insolvency proceedings against assets of the company; this balance sheet
entry has been reposted to the balance sheet item participations.
Companies of the SCHOLZ & FRIENDS Group made the following investments in
the following associated companies in the 2002 fiscal year:
Tapple Purchase price
SCHOLZ & FRIENDS Group GmbH, Hamburg 379
DDB (Ukraine) Ltd., Nicosia/Cyprus, 30%
SCHOLZ & FRIENDS AG 149
deepblue networks AG, Hamburg, 19%
The company DDB (Ukraine) Ltd. in Cyprus is the sole shareholder of SCHOLZ &
FRIENDS Kyiv/Ukraine. This acquisition is shown on the Consolidated Financial Statement
in accordance with the equity accounting method. The amount of the goodwill
resulting from these acquisitions and the useful life of these acquisitions are described
in subsection V.1.1 of these notes. The income achieved by these acquisitions in the

Affiliated and associated enterprises Subscribed Share
Since capital in Tapple in %
Affiliated enterprises in Germany
SCHOLZ & FRIENDS Group GmbH, Hamburg 1999 570 100.0
SCHOLZ & FRIENDS Hamburg GmbH, Hamburg 1999 50 100.0
SCHOLZ & FRIENDS International GmbH, Hamburg 1986 26 100.0
SCHOLZ & FRIENDS NeuMarkt GmbH, Hamburg 1995 51 100.0
SCHOLZ & FRIENDS Berlin (formerly Dresden) GmbH, Berlin 1991 51 100.0
Light Monuments GmbH, Berlin 2002 25 100.0
Mar.s Communications GmbH, Munich 2002 25 100.0
Bönig & Yamaoka GmbH Int. Public Relations, Hamburg
(deconsolidated 30 April 2002)
1997 51 80.0
Metagate GmbH, Hamburg 1997 51 100.0
SCHOLZ & FRIENDS Agenda GmbH
(formerly SCHOLZ & FRIENDS Consulting AG), Berlin
1998 52 100.0
Plato GmbH, Berlin 2000 25 84.0
LIVE LINE Entertainment GmbH
(formerly Live Line TV Productions GmbH), Berlin
2000 381 100.0
SCHOLZ & FRIENDS Brand Affairs GmbH
(formerly CULTNET AG), Hamburg
2001 50 100.0
Appel Grafik Berlin GmbH, Berlin (subsidiary since 2001) 2001 153 51.0
Factual Films GmbH (formerly UNITED VISIONS
TV und Filmproduktionsgesellschaft mbH), Berlin
2001 26 100.0
UV Interactive Entertainment GmbH, Berlin 2001 25 100.0
United Visions GmbH, Berlin 2001 100 100.0
UV Interactive Services GmbH, Berlin
Affiliated enterprises – abroad
2001 25 100.0
SCHOLZ & FRIENDS Athens S.P. Llc., Athens/Greece 1995 118 100.0
SCHOLZ & FRIENDS Antwerp S.A./N.V., Antwerp/Belgium 1995 62 100.0
SCHOLZ & FRIENDS Budapest Kft., Budapest/Hungary 1995 21 100.0
SCHOLZ & FRIENDS London Ltd., London/Great Britain 1997 0 100.0
SCHOLZ & FRIENDS Madrid S.A.L., Madrid/Spain 1995 60 70.0
SCHOLZ & FRIENDS Paris S.A.R.L., Paris/France 1999 8 100.0
SCHOLZ & FRIENDS Praha s.r.o., Prague/Czech Republic 1997 3 100.0
SCHOLZ & FRIENDS Singapore Pte. Ltd., Singapore/Singapore 1997 11 100.0
SCHOLZ & FRIENDS Warszawa Sp.z.o.o., Warsaw/Poland 1995 1 100.0
SCHOLZ & FRIENDS Wien Ges.m.b.H., Vienna/Austria 1995 36 100.0
SCHOLZ & FRIENDS Milano S.r.l., Milan, Rome/Italy
Associated enterprises in Germany
2000 26 100,0
deepblue networks AG, Hamburg 2000 50 49.0
John Warning GmbH, Hamburg (until 30 April 2002) 2000 51 32.0
DDB (Ukraine) Ltd., Nicosia/Cyprus 2002 17 30.0
Perfect camouflage is everything.
An advertisement for German
army commercial vehicles by
Mercedes-Benz. Scholz & Friends
Berlin.
77 l Consolidated Financial Report

78 l Consolidated Financial Report
proportion of the fiscal year remaining after the completion of purchase is described in
subsection III.8 of these notes.
10 Companies that make use of the exemption granted in section 264 subsection 3
of German Commercial Code (HGB)
In accordance with section 264 subsection 3 of the German Commercial Code
(HGB), the following subsidiary companies of SCHOLZ & FRIENDS AG are exempted
from the obligation to prepare, audit and disclose annual accounts and a management
report in accordance with the applicable regulations for companies limited by shares:
SCHOLZ & FRIENDS Group GmbH, Hamburg
SCHOLZ & FRIENDS Berlin GmbH, Berlin
SCHOLZ & FRIENDS Hamburg GmbH, Hamburg
SCHOLZ & FRIENDS International GmbH, Hamburg
SCHOLZ & FRIENDS NeuMarkt GmbH, Hamburg
Metagate GmbH, Hamburg
11 Currency conversion
In accordance with IFRS, the annual accounts of group companies based abroad
have been converted to euros on the basis of the concept of functional currency. This
concept states that, because group companies based abroad are economically separate
subunits of the group, the value of these companies’ assets and liabilities should be
converted for the purposes of the Consolidated Financial Statement using the mean rate
on the balance sheet date and that items on the Profit and Loss Account should be
converted using the average exchange rate over the consolidation period. This method
does not lead to significant differences with respect to conversion on the basis of the
exchange rate at the time at which a transaction took place. The equity capital components
of the subsidiary companies are converted on the basis of the relevant historical
exchange rate at the time of coming into existence. The resulting currency differences
are posted with no effect to the operating results as balancing items for foreign currency
conversion within the equity or the minority interest in the equity.
II Accounting methods and valuation principles
The following section describes the accounting methods and valuation principles
used during the preparation of the Consolidated Financial Statement. More detailed
explanations of the individual items of the Consolidated Profit and Loss Account and
the Consolidated Balance Sheet can be found in sections III, V and VI of these notes.
1 General principle
The Consolidated Financial Statement of the SCHOLZ & FRIENDS Group has been
prepared on the basis of a set of accounting methods and valuation principles that is
uniform throughout the group. These methods and principles have not been amended
since the previous year (continuity).

2 Fixed assets
2.1 Industrial and similar rights and assets and licences in such rights and assets
These assets are evaluated on the basis of acquisition and production costs minus
scheduled linear depreciation.
2.2 Goodwill
Differences resulting from capital consolidation, from the acquisition of agencies
or from conversion transactions are shown as goodwill. This is subject to linear
depreciation affecting expenses over an estimated useful life of 10 years.
2.3 Depreciation and amortisation of the fixed assets
The acquisition costs of intangible assets and tangible assets are subject to linear
depreciation over the period of their anticipated useful life.
Differences between the useful lives of assets arise as a result of differences in the
type and intensity of the use of an asset. The following useful lives are used:
Useful lives Years
Licences 2 to 15
Goodwill 10
Technical equipment and machinery 3 to 10
Fixtures and fittings 5 to 10
Data processing hardware and software 3 to 4
The useful lives and the methods of depreciation are examined for each reporting
period in order to ensure that they correspond to the anticipated commercial benefit
of the fixed asset in question. In the event that the net book value exceeds the anticipated
“attainable amount” (the higher amount of the net saleable value and the utility value of
an asset), the “attainable value” will be made subject to unscheduled depreciation. Lowvalue
fixed assets of German companies are written off in full in the year of acquisition.
2.4 Leasing
Leasing agreements are divided into operating leases and financial leases. A leasing
agreement is classified as an operating lease if it does not transfer all the risks and
opportunities connected with ownership. All other leasing agreements completed with
a company within the group as lessee are classified as financial leases.
In the case of financial leases, assets and liabilities are assessed at the ascribed
current value of the subject matter of the lease at the start of the leasing agreement or
the cash value of the minimum leasing payment if this is lower. When calculating the cash
value, the marginal interest rate for borrowed capital was used because that the actual
interest rate for the leasing agreements could not be established. Leasing payments are
divided into financing costs and the amortisation component of the remaining debt.
Because that there are no existing leasing agreements involving the transfer of ownership
of the leased object to the group and no existing leasing agreements with a term of
contract that exceeds the anticipated useful life of the leased object, the subject matter
of the lease is written off over the term of the leasing agreement. The full amount of all
leasing payments for operative leases is posted as expenses within the relevant
accounting period.
Less is more: this applies not only
to the ultra-light R1 Minima, but
also to the campaign created by
Scholz & Friends Hamburg for
the cigarette’s market launch in
Eastern Europe.
79 l Consolidated Financial Report

Classic shoes by Migato are
suitable for any wardrobe.
Product communication by
Scholz & Friends Athens.
80 l Consolidated Financial Report
2.5 Shares of subsidiary companies/participations
Shares of subsidiary companies that are not included in the consolidation and
participations are shown on the balance sheet at acquisition cost or as evaluated on
the basis of the equity accounting method.
2.6 Loans
Loans are evaluated at nominal value.
2.7 Payments on account
Payments on account are shown at acquisition cost.
3 Deferred tax from income
Deferred taxes from income are accrued for any temporary differences arising on
the Consolidated Balance Sheet between the taxable value of an asset or liability and
its net book value. Temporary differences are subject to the rates of taxation that are
expected at the anticipated time of the reversal of the temporary differences. In this
case the tax rates that are valid or announced on the date of the balance sheet are used.
Excluded from this accrual are deferred taxes on temporary differences for goodwill for
which depreciation is not tax deductible.
Furthermore, deferred tax assets are accrued for tax loss carry-forward.
The formation of a deferred tax asset is dependent on the extent to which it is
probable that sufficient taxable income will be available in the near future in order to
be in a position to take advantage of a deferred tax asset. On the other hand, deferred
tax assets that have not been shown on the balance sheet up to now are formed to the
extent to which it is probable that future taxable income will allow the realisation of
the deferred tax asset.
Deferred tax assets and liabilities are liquidated/amortised if the relevant group
company has an enforceable right to set off actual tax assets and liabilities and if the
deferred tax assets and liabilities pertain to tax on income that is collected by the same
tax authority.
4 Inventories
Raw materials and supplies are evaluated at acquisition cost or, if lower, at net
sale value on the date of the balance sheet.
Incomplete services are evaluated at group acquisition or production costs or a
lower ascribed value. The group production costs include the cost of individual materials,
individual production costs and any special production costs, as well as any indirect
costs and overheads incurred for materials or production and the cost of any deterioration
to the value of fixed assets as a result of production.
5 Receivables and other net assets
Receivables and other net assets are evaluated at their nominal value. Recognisable
individual risks connected with trade receivables are taken into account in valuation
allowances for losses on receivables. Uncollectable receivables were written off. Foreigncurrency
receivables of German group companies are evaluated on the basis of the
valid buying rate at the time at which they arose. Any unrealised income due to subsequent
exchange rate fluctuations is credited to income.

6 Short-term investments
Short-term investments are evaluated on the basis of the relevant stock market
prices on the date of the balance sheet. All income and expenses resulting from shortterm
investments are credited to income.
7 Liquid funds
For the purpose of the Cash Flow Statement, liquid funds include cash in hand
and any bank balances that are available at a short notice (original term of max. three
months) minus any current account obligations to banks and financial institutions.
There were no cash equivalents in the reporting period. Cash equivalents are shortterm,
highly liquid investments that can be easily converted into cash at short notice,
which have original terms of three months or less and are not subject to any significant
risk of loss of value.
8 Equity
The capital reserves contained within the equity were reduced by expenses that are
directly connected with the flotation of UVE AG on the stock exchange in 2000 and of
SCHOLZ & FRIENDS AG in 2001 and that are not classified as expenses on the Consolidated
Profit and Loss Account. This set-off was net taking into account the fiscal
effects in accordance with Interpretation SIC 17 of the IASB.
9 Minority interest
In accordance with IFRS, minority interests in the equity and in the year-end results
of a group company are shown separately on the balance sheet (separate to borrowed
capital and equity) and on the Profit and Loss Account. Minority interests are evaluated
at the time of the acquisition or founding of the company as the share of the net book
value of the assets and liabilities of the acquired/founded enterprise that is allocated to
the minority shareholder. Proportional year-end results increase or decrease this item,
dividends paid out to the minority shareholders reduce it.
10 Grants related to assets
Public grants in accordance with the German Investment Grant Act (InvZulG) and
the sponsorship programme of the Investitionsbank Berlin are transferred to the item
“Grants related to assets” in the full amount of the grant in the year of acquisition (allowances)
or award (grants) and reversed over the useful life of the acquired asset.
11 Accruals
Accruals are formed for legal and de facto obligations that have their origins in the
past if it is probable that the fulfilment of these obligations will lead to a drain on
group resources and if it is possible to reliably estimate the size of the obligation.
Accruals take into account all recognisable risks and contingent liabilities.
12 Liabilities
Liabilities are evaluated at the repayment amount. Short-term liabilities include
those liabilities that will become due for repayment within one year. Long-term interestfree
or low-interest liabilities are evaluated at their cash value. Foreign-currency liabilities
of group companies based in Germany are evaluated on the basis of the selling rate on
the date of the balance sheet. Unpaid dividends are only shown as liabilities once they
have been proposed by the Board of Directors and approved by the General Meeting.
A risk analysis by F. Van Lanschot
Bankiers could have prevented
passengers on the Titanic from
investing in a ticket. Scholz &
Friends Antwerp publicises the
bank’s consulting services using
well-known works of art.
81 l Consolidated Financial Report

The sign is playing on the German
saying “like an elephant in a
porcelain shop”, which is equivalent
to “like a bull in a china shop”. An
award-winning sticker by Scholz &
Friends Berlin for Meissen
Porcelain.
82 l Consolidated Financial Report
13 Deferred income
Individual group companies that relocated during the course of the fiscal year were
granted rent subsidies on business premises for lessee improvements. In accordance
with SIC 15, all incentive agreements within operative leasing contracts (i.e. incl. rental
contracts) must be shown on the balance sheet as a component of net return agreed for
the use of a leased asset, regardless of the form of the incentive or the form and point
in time of the payments. The lessee is obliged to record the amount of benefit due to
incentives as a reduction of rental expenses on a linear basis over the term of the lease.
As term of lease we have used the term of the rental contract because the improvements
made will probably still be useful for the entire duration of this period.
14 Market value of financial instruments
As a result of their liquidity, cash in hand, bank balances and cheques, trade
receivables, trade payables and accrued advance payments have a market value that
corresponds to the net book value. In the case of long-term liabilities, the net book
value on the date of the balance sheet approximately corresponds to the market value.
The exact market value is established by way of the discounting of payment flows.
Marketable securities are evaluated at market value.
15 Revenue
a) Net sales
Net sales are only recorded once it is probable that the economic benefit of a
business transaction will be accrued by the company and once the amount of the
revenue from the sale can be reliably estimated. Net sales are achieved through the
performance of services. As a rule services are carried out within a defined individual
period; accounts can therefore generally be settled close to the expiry of this period.
With larger customers a monthly, lump-sum payment is generally agreed.
b) Grants
Grants are recorded as deferred income upon issuance once the receipt of the grant
is guaranteed and it is guaranteed that the company fulfils all the conditions required
for the issuance of the grant. Grants awarded to the company as compensation for the
acquisition costs of assets are systematically recorded as income over the anticipated
useful life of the asset.
16 Expenses
a) Operating lease payments
Operating lease payments are spread on a linear basis over the term of the rental/
leasing contract. Incentives such as graduated rental/leasing payments, rent-free
months, and so on, are treated as an integral component of the total leasing expenses.
b) Tax on income
Tax on income includes current and deferred taxes. Tax on income is recorded on
the Profit and Loss Account, except for the fiscal effects of business transactions,
which are posted directly in the equity.
Current tax expenses is the anticipated amount of taxation to pay on income for
the fiscal year. The amount of tax is calculated on the basis of the applicable rates of
taxation for that fiscal year.
Deferred tax expenses is described in more detail in subsection II.3 of these notes.

III Notes to the Consolidated Profit and Loss Account
1 Net sales
The business fields of the SCHOLZ & FRIENDS Group are “Classic Communication”,
“Public Relations” and “Technical Services”, as well as the services performed via the
UVE Group in the areas of the production and marketing of entertainment programmes
for television and the Internet and the production of television programmes in the
areas of entertainment and non-fiction.
The business field Classic Communication incorporates classic advertising concepts,
such as mass communication via television, cinema, radio, newspapers, consumer
publications and outdoor advertising. Furthermore, this business field also includes
the area of integrated communication, encompassing all the relevant communication
disciplines (e.g. direct-response marketing, sales promotion, trade marketing, merchandising),
strategic brand consultancy and communication-orientated management
consultancy.
Classic Communication is the most central and traditional business field and
accounts for around 86% (PY 89%) of net sales. This business field is operated primarily
by the full-service offices, that is, the offices of SCHOLZ & FRIENDS Hamburg
GmbH, Hamburg, and of SCHOLZ & FRIENDS Berlin GmbH, Berlin, as well as the
various subsidiary companies outside Germany.
The Classic Communication business field is supplemented by the company’s
second business field, Public Relations. This subdivision of the communication services
offered by the company deals specifically with the systematic creation and care of a
relationship between a company and/or organisation and the public and was an area
of continued growth during the 2002 fiscal year. This business field was responsible for
about 7% (PY 4%) of net sales in the 2002 fiscal year.
The business field Technical Services deals with the various technical support
services offered by SCHOLZ & FRIENDS for the support of the advertising and
production industry. This area of the company was responsible for 7% (PY 7%) of total
sales in the 2002 fiscal year. These technical support services were used by both the
companies of the SCHOLZ & FRIENDS Group and other companies in the advertising
industry.
The strategically most important business field of the UVE Group is the area
Entertainment Shows, which has its main focus on the development and marketing of
events. This business field was responsible for around 35% (PY 41%) of the net sales of
the UVE Group in the 2002 fiscal year. We define the term “event” as a large-scale
happening that is broadcast live on television or via another medium. The UVE Group
develops, produces and markets entertainment events for both television and the
Internet. The main source of revenue in this area comes from the licensing and royalty
payments of the TV broadcasters.
In the business field TV and Film Production, which contributed roughly 48%
(PY 50%) of the net sales in the 2002 fiscal year, the UVE Group produces high-quality
films and upmarket magazine programmes promoting the corporate image and brand
articles of companies and public-law organisations.
The business field Interactive Entertainments was responsible for 11% (PY 7%) of the
net sales in the 2002 fiscal year. The remaining 6% (PY 2%) of net sales is attributable
to miscellaneous services.
For 300 years Meissen Porcelain
has been one of the best forms of
private retirement provision. This
campaign shows how modern a true
classic can be. Scholz & Friends
Berlin.
83 l Consolidated Financial Report

84 l Consolidated Financial Report
The total net sales of the entire group can be broken down as follows:
Tapple 2002 2001
Classic advertising 46,120 55,946
Public relations 4,598 2,729
Technical services 4,125 4,943
TV and film productions 3,678 1,727
Event marketing 2,815 1,445
Direct-response/interactive marketing 2,226 1,044
New media (online marketing) 871 558
Sales promotion/merchandising 247 190
Other 4,293 5,858
68,973 74,440
The increases in the areas of event marketing and TV and film production can be
attributed to the fact that in the previous year only the net sales from these areas for the
fourth quarter were taken into account in the figures due to the fact that the merger of
the UVE Group with SCHOLZ & FRIENDS AG was completed on 30 September 2001.
A breakdown of net sales revenue for business fields and regions can be found in
section VII of these notes (segment information).
2 Other operating income
Other operating income for the 2002 fiscal year amounts to Tapple 4,078 (PY Tapple 5,080).
This can largely be attributed to the reversal of accruals formed in the previous year in
the amount of Tapple 1,471 (PY Tapple 1,939). This can be seen in more detail in the presentation
of the development of the group’s accruals. In the previous year other operating
income was primarily due to the renunciation of the applicable bonus regulations by
several of the group’s managing directors as of the 2001 fiscal year.
Revenue of Tapple 82 (PY Tapple 158) came about as a result of the reversal of the special
balance sheet item public-sector grants. Other significant balance sheet items were
income from other services in the amount of Tapple 433 (PY Tapple 199), which does not
count as net sales; rental income of Tapple 232 (PY Tapple 183); compensation from insurance;
proceeds from the sale of fixed assets; income from trade discounts and proceeds from
the reversal of valuation allowances.
3 Cost of materials
The cost of materials refers predominantly to purchased services. These are primarily
non-reimbursable, customer-related services from outside the group, fees for freelancers
employed for the performance of either creative or technical services, film production
services within the UVE Group or expenses for presentations.
4 Personnel expenses
Personnel expenses for the 2002 fiscal year included Tapple 677 (PY Tapple 1,912) in termination
pay.

5 Depreciation and amortisation of tangible and intangible assets
Depreciation and amortisation in the 2002 fiscal year can be broken down as
follows:
Tapple 2002 2002 2001 2001
Licences, software 250 645
Goodwill 3,801 2,465
Intangible assets 4,051 3,110
Tangible assets 3,463 3,185
Total scheduled depreciation 7,514 6,295
Goodwill 8,606 2,682
Financial assets 8 53
Total unscheduled depreciation 8,614 2,735
16,128 9,030
Depreciation of goodwill in the 2002 fiscal year can be broken down as follows:
Tapple
Scheduled depreciation
2002 2001
SCHOLZ & FRIENDS Berlin GmbH, Berlin 1,985 1,424
Herman Beasley Ltd. and CKMP Ltd., both London 314 372
Kennedy Communications Sp.z.o.o., Warsaw 169 169
UVE Group, Berlin 1,233 262
SCHOLZ & FRIENDS Madrid S.A.L., Madrid 17 189
Other goodwill depreciation
Unscheduled depreciation
83 49
Herman Beasley Ltd. and CKMP Ltd., both London 567 2,682
UVE Group, Berlin 8,039 0
12,407 5,147
The unscheduled depreciation of the goodwill of Herman Beasley Ltd. and CKMP
Ltd. in London and the UVE Group were due to the decreased profit expectations from
these companies.
In order to determine the required depreciation for the UVE Group, the net book
value of the company’s goodwill was compared to the total cash value of future net
income.
Active and vital despite one’s
age – or perhaps because of it?
The power of the double heart is
evident in this commercial by
Scholz & Friends Hamburg for
the brand Doppelherz.
85 l Consolidated Financial Report

Winter shoes with special soles
create publicity for a winter tyre
exchange service. Scholz & Friends
Berlin.
86 l Consolidated Financial Report
6 Other operating expenses
Other operating expenses can be broken down as follows:
Tapple 2002 2001
Office and administrative expenses 4,068 3,943
Expenditure on office space 5,708 5,180
Travel and accommodation expenses 1,271 2,104
Staff costs 403 1,085
Car pool costs 862 1,034
Consultancy and auditing expenses 1,834 932
House advertising 1,098 752
Accruals for impending losses 1,213 0
Presentation costs 515 164
Other expenses 2,409 2,344
19,381 17,538
7 Income from participations
The income from participations shown in the previous year can be attributed to the
distribution of dividends from the unconsolidated subsidiary company ADSERVICE
GmbH (see subsection I.7 of these notes, “Principles of consolidation”).
8 Income from associated enterprises
The income from associated companies can be broken down as follows:
Tapple 2002 2001
deepblue networks AG 5 105
John Warning GmbH 0 (9)
DDB (Ukraine) Ltd. 55 0
60 96
The size of the shareholding in each of the aforementioned associated companies
can be seen in subsection I.8 of these notes, “Companies included in the consolidation”.
9 Interest and similar income/expenses
Interest and similar income/expenses can be broken down as follows:
Tapple 2002 2001
Interest and similar income 336 316
Interest and similar expenses (1,096) (1,431)
(760) (1,115)
Interest income was accrued primarily as a result of the short-term investment of
the liquidity from the flotation of UVE AG on the stock exchange.
Interest revenue was significantly influenced by interest expenditure for investments
in fixed assets because that these investments were financed almost entirely by
investment loans and hire/purchase agreements.

Interest income from affiliated companies of Tapple 55 (PY Tapple 101) resulted primarily
from the granting of a loan to the company n.a.s.a.2.0 GmbH, which was taken over
within the fiscal year by Cordiant Holdings GmbH, Frankfurt/Main.
Interest expenditure from affiliated companies of Tapple 642 (PY Tapple 646) resulted
primarily from loans agreed with Cordiant Holdings GmbH, Frankfurt/Main, as well as
from the existing cash-pooling agreement with BATES UK Ltd., London (see subsection
VI.5 of these notes, “Liabilities”).
10 Tax on income
As a rule German companies were obliged to pay corporate income tax in the
years 2001 and 2002 at a rate of 25%, as well as commercial rates, the amount of
which is dependent on the rates of assessment used by the local authority responsible
for the area in which the company has its business premises. The amount of the commercial
rates paid by group companies varied between 13% and 20% of trade income.
Furthermore, German companies also have to pay a solidarity surcharge of 5.5% of the
amount of the corporate income tax.
These rates of taxation were also used to calculate the deferred tax of group
companies within Germany.
Tax on income can be broken down as follows:
Tapple 2002 2001
Tax on income – current (311) 2,574
Tax on income – deferred 677 (1,566)
366 1,008
The following summary shows the connection between the amount of tax expenditure
determined on the basis of the actual rate of taxation in Germany of 41.2%
(PY 41.2%) of the company’s income before income tax, other taxes and minority
interests and the effective tax expenditure shown on the Consolidated Financial
Statement.
Tapple 2002 2001
Computed tax expenditure (4,291) 107
Fiscal effects on non-deductible expenses:
Depreciation of goodwill from consolidation
4,658 715
Tax-free book profit from the sale of the interest
in Bönig & Yamaoka GmbH Int. Public Relations
(17) 0
Effect of deviating rates of taxation and the impossibility
of loss compensation between group companies
16 186
366 1,008
Scholz & Friends Kyiv invites
consumers to discover a world in
which technological perfection,
exemplary service and skilful design
enjoy a long tradition. Launch
brochure for the first Mercedes-
Benz subsidiary in the Ukraine.
87 l Consolidated Financial Report

The Orchestra of Ideas in London, Hamburg, Vienna, Budapest, Madrid, Antwerp, Prague,
Athens, Warsaw, Moscow and Kiev for Davidoff (examples: see page 106). From left to
right, top row: Roger Parkyn (advertising), Daniel Floyed (advertising), Dirk Rossbach
(advertising), Trevor Kennedy (advertising); second row: Anette Schubert (advertising),
Gorden Mross (advertising), Bettina Kornau (PR); third row: Tina Allerheiligen (PR),
Remo Gschwend (advertising); bottom row: Marcus Korell (advertising), Axel Diegel
(advertising), Bettina Heinz (advertising); not shown: Melanie Bienemann (event),
Dunja Piwkowski (advertising), Henk Knaupe (event), Mathieu Diette (advertising),
Michael Tönnis (advertising), Luc Bridel (advertising), Rudolf Rodenburg
(advertising), Roman Stubics (advertising), Nicole Reicher (advertising),
Christian Ringel (advertising), Gabor Kovacs (advertising), Magdalena
Ringel (advertising), Mate Olah (advertising), Bernadett
Dubovszky (advertising), Katarzyna Pikul (advertising),
Izabela Gramburg (advertising), Bartek Dylinski (advertising),
Piotr Kowalczyk (advertising), Garegin Brutens (advertising),
Sergey Sintsov (advertising), Dmitriy Boldinov (advertising),
Alyona Slipchenko (advertising), Frederic Tassin (advertising),
Michael Chamberlain (advertising), Tara Wright (advertising),
Angel Campanero (advertising), Penny Vlachou (advertising), George
Botsos (advertising), Ivan Hulik (advertising), Petr Bejsovec (advertising),
Jan Horak (advertising), Dominique Joye (advertising),
Jeremy Blezard (advertising).

On behalf of the Office of the
Federal President and the
Bertelsmann Foundation, Scholz
& Friends Berlin stands up for
the integration of immigrants.
On behalf of the European
Commission, Plato, the consultancy
for political communication and
public relations, organised a panel
discussion with prominent EU
experts in Berlin. The opening
speech was held by EU commissioner
Günter Verheugen.
90 l Consolidated Financial Report
11 Minority interests in net income
The minority interests in net income of Tapple 44 (PY Tapple 677) are distributed proportionally
between the following companies:
Tapple 2002 2001
Appel Grafik Berlin GmbH 142 568
SCHOLZ & FRIENDS Madrid S.A.L. (175) 0
Bönig & Yamaoka GmbH Int. Public Relations 10 (10)
Metagate GmbH 19 39
Plato GmbH 48 80
44 677
The losses at SCHOLZ & FRIENDS Madrid S.A.L., Madrid, are the result of a sale
and transfer agreement for shares completed with the shareholders, in which it was
agreed that the purchase price for the shares guaranteed to the minority shareholders
would be dependent on the future results of the company.
IV Notes to the Consolidated Cash Flow Statement
The Consolidated Cash Flow Statement shows the changes that have occurred to
the liquid funds of the SCHOLZ & FRIENDS Group in the 2002 fiscal year and the
previous year (on the basis of stocks of cash and cash equivalents of NetFree AG on
1 January 2001) as a result of the influx and outflow of funds. The payment flows
included in this Cash Flow Statement are divided into cash flows from operating
activities, investment activities and financing activities. The Cash Flow Statement has
been drawn up using the indirect method. This means that the results for the period
under review are adjusted in order to eliminate the effects of non-cash business transactions;
changes to the levels of inventories, receivables, liabilities and deferred items;
and other items that relate to cash flows from investment activities or financing activities.
The following individual items appear on the Consolidated Cash Flow Statement:
1 Income from associated enterprises
Please refer to subsection III.8 of these notes.
2 Change in operating assets
Operating assets include inventories, receivables and other assets, as well as prepaid
expenses. Trade receivables are reduced by valuation allowances for uncollectable
accounts. Any changes to valuation allowances are shown separately.
3 Change in operating liabilities
Operating liabilities include grants related to assets, accruals, payments received
on account of orders, trade payables, payables to affiliated enterprises, other liabilities
and deferred income.

4 Investments
Investments include investments in intangible assets, tangible assets and financial
assets.
The net effect of the sale of all shares held in Bönig & Yamaoka GmbH Int. Public
Relations, Hamburg, is shown in the item disposal of subsidiary companies and business
units. In the previous year this item involved the acquisition of subsidiary companies and
business units, including the merger with the UVE Group (see explanation in subsection
V.1.1) and the initial inclusion of two companies in accordance with the full consolidation
method (SCHOLZ & FRIENDS Brand Affairs GmbH [formerly CULTNET AG],
Hamburg, and Appel Grafik Berlin GmbH, Berlin).
This had the following effect on the assets and liabilities of the group:
Disposal Acquisition
Tapple 2002 2001
Intangible, tangible and financial assets (448) 28,502
Inventories 5 1,705
Trade receivables, receivables from affiliated
enterprises and participations
(245) 28,327
Other assets, deferred tax assets (199) 8,682
Cash and cash equivalents (672) 19,644
Minority interests (4) 721
Grants related to assets, accruals (95) 14,267
Trade payables, payments received on account (1,106) 35,051
Other liabilities, deferred income and deferred
tax liabilities
(326) 13,597
Net assets (28) 23,224
Goodwill resulting from acquisitions 0 12,351
Total purchase price (82) 35,575
Less increase in the share capital and capital
reserves through the issue of own shares
0 (33,643)
Less deferred and contingent purchase price instalments 0 (1,403)
Part of the purchase price received (PY paid) in cash or
cash equivalents
(82) 529
Stock of cash and cash equivalents sold with subsidiary
companies and business units
(PY assumed from subsidiary companies and business units)
672 (19,644)
Net cash decrease (+), net cash increase (–) 590 (19,115)
5 Dividends paid
The item dividends paid includes all the dividend payments made to companies
outside the group in the previous year.
6 Proceeds from/repayment of borrowings
This item includes granted and repaid loans of Cordiant Holdings GmbH (see
subsection VI.5 of these notes).
Greetings from hell: with this free
postcard, Ärzte ohne Grenzen e.V.
(MEDICINS SANS FRON-
TIERES) creates publicity for its
work in areas of conflict. ADC
Bronze for Scholz & Friends Berlin.
91 l Consolidated Financial Report

This print campaign by Scholz &
Friends Hamburg for VELUX roof
windows shows how to bring the
sky into your home.
92 l Consolidated Financial Report
7 Effects of changes to exchange rates on liquid funds
The item effects of changes to exchange rates on liquid funds shows the extent to
which fluctuations between the exchange rates on the first day of the fiscal year and
the last day of the fiscal year affected the stock of cash and cash equivalents available
at the beginning of the fiscal year. Exchange rate fluctuations affect our subsidiary
companies SCHOLZ & FRIENDS Budapest Kft., SCHOLZ & FRIENDS London Ltd.,
SCHOLZ & FRIENDS Praha s.r.o. and SCHOLZ & FRIENDS Warszawa Sp.z.o.o.
8 Liquid funds
The item liquid funds includes cash in hand, bank balances and cheques reduced
by the amount of outstanding overdrafts of Tapple 0 (PY Tapple 67).
9 Interest and tax payments
Net interest in the amount of Tapple 216 (PY Tapple 131) was paid in the fiscal year. In the
same period a reimbursement of tax on income was received in the amount of Tapple 259
(PY Tapple 4,687 paid).
V Notes to the Consolidated Balance Sheet – Assets
1 Fixed assets
Please refer to the separate summary of fixed assets.
1.1 Intangible assets
The item concessions, industrial and similar rights and assets and licences in such
rights and assets in the amount of Tapple 354 (PY Tapple 495) primarily capitalises purchased
software products.
A significant item of the intangible assets is goodwill in the amount of Tapple 19,504
(PY Tapple 31,179), which is the result of company mergers and is capitalised in accordance
with IAS 22.
The main individual items of goodwill are as follows:
Tapple 31 Dec. 2002 31 Dec. 2001
SCHOLZ & FRIENDS Berlin GmbH, Berlin 13,855 15,834
UVE AG, Berlin 2,500 10,227
SCHOLZ & FRIENDS Madrid S.A.L., Madrid 829 1,697
Kennedy Communications Sp.z.o.o., Warsaw 1,353 1,522
Herman Beasley Ltd., CKMP Ltd., both London 230 1,171
Others 737 728
19,504 31,179
All of the individual items of goodwill are subject to depreciation over a period of
10 years.
Goodwill resulting from the merger of UVE AG and SCHOLZ & FRIENDS AG was
subject to unscheduled depreciation during the fiscal year. Furthermore, goodwill from
the purchase of Herman Beasley Ltd. and CKMP Ltd., both in London, was also subject
to unscheduled depreciation. Goodwill from the purchase of E.S.C. COMUNICACION
EISEN SAN MARTIN CAMINA, S.A.L., Madrid, was recalculated due to a change of

the purchase price in 2002. Additions in the fiscal year result from the purchase of 20%
of Metagate GmbH, Hamburg. The net book value on the date of the balance sheet
was Tapple 93. This goodwill will also be subject to depreciation over a period of 10 years.
The capitalised software from leasing contracts is subject to depreciation over the
term of the applicable leasing contract. As a rule this is three years.
1.2 Financial assets
In the previous year the item shares in affiliated enterprises included shares of
companies that were not included in the Consolidated Financial Statement. These
shares were primarily in the company Imagerefinery GmbH (Tapple 25), which was
founded in the year 2000 as a 100% subsidiary of Metagate GmbH. This company was
sold in the 2002 fiscal year for Tapple 25.
There are existing participations in the company Immobilienfonds Rosenthaler Weg 8
GbR, Berlin, of Tapple 53 and in the company Partner für Berlin GmbH, Berlin, of Tapple 5.
Furthermore, the shareholding in Lentz Entertainment GmbH was also reposted to this
item.
The following shares in associated companies have been evaluated in accordance
with the equity accounting method:
Tapple 31 Dec. 2002 31 Dec. 2001
deepblue networks AG 1,042 990
DDB (Ukraine) Ltd. 434 0
John Warning GmbH 0 8
1,476 998
The group’s participation in deepblue networks AG was increased in the 2002
fiscal year by 19% to 49%. Furthermore, we also purchased a 30% shareholding in
DDB (Ukraine) Ltd. The shares held in the company John Warning GmbH were sold
together with the shareholding in the fully consolidated subsidiary company Bönig &
Yamaoka GmbH Int. Public Relations. Shares in Lentz Entertainment GmbH were made
subject of depreciation and reposted to participations due to the initiation of insolvency
proceedings on the assets of this company.
Long-term investments of Tapple 8 (PY Tapple 3) are held by SCHOLZ & FRIENDS Wien
Ges.m.b.H.
The financial assets also include other loans of Tapple 317 (PY Tapple 369). These are
essentially deposits for rented business premises in Berlin.
The part payment of the purchase price for the shareholding in COUCH POTATOES
Fernsehproduktions GmbH, Cologne, is posted under the item payments on account in
financial assets because the beneficial ownership of this shareholding had not yet been
transferred to the purchaser, SCHOLZ & FRIENDS AG, on the date of the balance
sheet.
2 Inventories
The item inventories primarily shows orders still in progress, which are listed
under incomplete services, such as services of the UVE Group in the area of car and
travel formats.
The first air-conditioning system
with 500 different designs: window
shades and blinds by VELUX.
A television commercial by Scholz
& Friends Hamburg.
93 l Consolidated Financial Report

Flat, located 30 cm from the train
station. Only to be found in the
world’s largest model railway
system. Scholz & Friends Hamburg
with an extremely cost-effective
classified ad campaign for the
Miniatur Wunderland.
94 l Consolidated Financial Report
Finished products includes services completed in the previous year that have not
yet been invoiced, primarily services for the festival at the Brandenburg Gate by Live
Line Entertainment GmbH, Berlin.
3 Receivables and other assets
Uninvoiced production costs includes external services, which are evaluated on the
basis of existing received invoices. This refers to invoiced services related to customer
orders that can only be on-charged to the customer after the date of the balance sheet.
The risk of not being able to on-charge invoiced services to the customer is taken into
account through the formation of individual valuation allowances.
Uninvoiced production costs of Tapple 1,108 (PY Tapple 4,952) are offset by payments
received on account of Tapple 1,151 (PY Tapple 5,207).
Receivables from affiliated companies exist primarily against Cordiant Holdings
GmbH, Frankfurt/Main, as a result of the assumption of the loan made to n.a.s.a.2.0
GmbH, Hamburg, which left the Cordiant Group in the fiscal year. Furthermore, there
is also an existing claim to the benefit of subsidiary SCHOLZ & FRIENDS London Ltd.,
London, against the Cordiant Communications Group plc., London, arising as a result
of the fiscal unity of these companies.
Tapple 31 Dec. 2002 31 Dec. 2001
Non-consolidated subsidiaries of the
SCHOLZ & FRIENDS Group
0 13
n.a.s.a.2.0 GmbH, Hamburg 0 610
Cordiant Holdings GmbH, Frankfurt/Main 1,121 39
Cordiant Communications Group plc., London/Great Britain 662 26
Other companies of the Cordiant Group 126 105
1,909 793
Receivables from associated companies of Tapple 850 (PY Tapple 7) result primarily from
trade with deepblue networks AG, Hamburg.
Other assets include the following:
Tapple 31 Dec. 2002 31 Dec. 2001
Tax receivables 1,651 7,059
Supplies with debit balances 57 58
Receivables from employees 58 74
Receivables from Media Port 0 210
Other assets 469 267
2,235 7,668
Tax receivables result primarily from the overpayment of tax on income by the
German SCHOLZ & FRIENDS companies.
Receivables from Media Port GmbH, Berlin, have been written off.
4 Cash and cash equivalents
Cash and cash equivalents on 31 December 2001 resulted primarily from the
influx of funds as a result of the flotation of UVE AG on the stock exchange.

5 Deferred tax assets
Deferred tax assets resulted from the following temporary differences:
Tapple 31 Dec. 2002 31 Dec. 2001
Finance leasing 86 270
Loss carry-forward 4,484 5,056
Long-term liabilities 387 417
Grants related to assets 113 113
Other (3) (4)
5,067 5,852
Loss carry-forward is not subject to time limits. Deferred tax assets on tax loss
carry-forward are, however, only formed to the extent that it is probable that they can
be set off against positive fiscal results within two to three fiscal years of the date of
the Financial Statement. For this reason the deferred tax assets of the companies
SCHOLZ & FRIENDS Budapest Kft., Budapest/Hungary (Tapple 36), SCHOLZ & FRIENDS
Paris S.A.R.L., Paris/France (Tapple 149) and SCHOLZ & FRIENDS London Ltd., London/
Great Britain (Tapple 346) were reversed in the fiscal year to the benefit of income.
VI Notes to the Consolidated Balance Sheet – Equity and Liabilities
1 Earnings per share
The undiluted earnings per share were determined on the basis of the consolidated
net loss for the year of Tapple 11,215 (PY Tapple 1,426) and the weighted average of the
number of 21,460,000 (PY 9,677,250) ordinary shares:
2002 2001
Consolidated net loss for the year in Tapple (11,215) (1,426)
Weighted average of the number of ordinary shares 21,460,000 9,677,250
Earnings per share in apple – undiluted (0.52) (0.15)
2 Minority interests
Minority interests refers exclusively to the minority shareholders of the following
subsidiary companies:
Tapple 31 Dec. 2002 31 Dec. 2001
Appel Grafik Berlin GmbH, Berlin 148 266
SCHOLZ & FRIENDS Madrid S.A.L., Madrid (153) 0
Bönig & Yamaoka GmbH Int. Public Relations 0 (5)
Plato GmbH, Hamburg 52 84
Metagate GmbH, Hamburg 0 48
47 393
With regard to the losses at SCHOLZ & FRIENDS Madrid S.A.L., Madrid, please
refer to the comment made in subsection III.11 of these notes.
Communication for the young
generation. The well-known Diddl
mouse needed a new website.
deepblue networks created one of
the largest German children’s
communities for this purpose.
95 l Consolidated Financial Report

At the consumer goods trade fair
Ambiente, dealers discover which
products will be fought over by
their customers during the coming
season. An advertising campaign
by Scholz & Friends Berlin.
96 l Consolidated Financial Report
3 Grants related to assets
The average useful life for subsidised assets, for which this special account was
formed, is 5 years.
4 Accruals
Please refer to the supplement to the notes on the Consolidated Financial Report.
Accruals for impending losses were primarily formed for losses from rental contracts
for business premises incurred by our London-based subsidiary (Tapple 1,167) and
UV GmbH (Tapple 789).
Group companies also set up accruals for claims arising from unused holidays.
This makes provision for holiday allowances and pro rata social welfare contributions.
An accrual of Tapple 921 has been set up for the acquisition of shares in the company
Kennedy Communications Sp.z.o.o. in Warsaw.
Repayment obligations refers to grants issued to the former UVE AG by the State
of Berlin.
Accruals for director’s fees refers primarily to bonus agreements completed with
the managing directors of SCHOLZ & FRIENDS companies.
The increase in the accruals for legal fees and consultancy costs is due to the
increased requirements resulting from the flotation of the company on the stock
exchange.
Accruals for additional taxes from a tax audit were set up for probable claims
against SCHOLZ & FRIENDS Berlin GmbH, Berlin.
Accruals for termination pay have been formed primarily for the laying off of
several employees of SCHOLZ & FRIENDS Hamburg GmbH, Hamburg, and SCHOLZ &
FRIENDS Berlin GmbH, Berlin.
Accruals for bonus payments for employees were set up for bonus payments for
managing directors and bonuses for individual employees.
Accruals for valuation adjustments to orders on hand refers to SCHOLZ &
FRIENDS London Ltd., London/Great Britain.
Accruals for restructuring measures were formed in the previous year within the
UVE Group primarily for personnel matters.
Other accruals have been set up by the group companies for other recognisable
risks.
5 Liabilities
Long-term trade payables in the fiscal year are primarily due to liabilities of Tapple 947
(PY Tapple 1,584) from the purchase of fixtures and fittings by SCHOLZ & FRIENDS
Hamburg GmbH, Hamburg. Furthermore, this item also includes liabilities from the
purchase of E.S.C. COMUNICACION EISEN SAN MARTIN CAMINA, S.A.L. of Tapple 720
(PY Tapple 1,817) by SCHOLZ & FRIENDS Madrid S.A.L.
Long-term liabilities to affiliated companies includes liabilities from loans with a
residual term to maturity of more than one year. One such loan is that granted by
Cordiant Holdings GmbH to the SCHOLZ & FRIENDS Group GmbH, Hamburg, in the
amount of Tapple 4,000 (PY Tapple 6,000), of which Tapple 2,000 (PY Tapple 2,000) is repayable in
2003. Interest is charged at the three-monthly EURIBOR rate plus a margin of 2%.
The loan of Tapple 7,289 that was granted to SCHOLZ & FRIENDS London Ltd.,
London/Great Britain, by BATES UK Ltd., London, in the previous year was integrated
into the cash-pooling agreement existing between the British companies of the

Cordiant Group in the fiscal year. As a result of this agreement there were short-term
liabilities on the date of the balance sheet of Tapple 7,546 (PY Tapple 2,835).
Short-term trade payables refers primarily to liabilities for transitory production
costs.
Short-term liabilities to affiliated companies can be broken down as follows:
Tapple 31 Dec. 2002 31 Dec. 2001
Cordiant Holdings GmbH 2,058 4,141
BATES companies 7,546 2,835
Cordiant Communications Group plc. 29 28
Subsidiary companies not included in the
SCHOLZ & FRIENDS Group
0 41
Other companies of the Cordiant Group 184 366
9,817 7,411
As in the previous year, payables to associated companies primarily exist with
regard to deepblue networks AG and are a result of a shareholder contribution of
Tapple 281 (PY Tapple 281), which is to be paid in by SCHOLZ & FRIENDS Group GmbH in
instalments. Furthermore, there are also trade payables of Tapple 14 (PY Tapple 157). In the
previous year there were liabilities from cash pooling of Tapple 888.
Other short-term liabilities in the fiscal year include the following:
Tapple
Tax liabilities:
2002 2002 2001 2001
from profit distribution
(capital gains tax/solidarity surcharge)
563 767
from sales tax 533 4,073
from wage and church tax 697 763
from other tax 57 44
Total tax liabilities 1,850 5,647
Liabilities relating to social security and similar obligations 902 1,196
Customers with credit balances 230 13
Liabilities to employees 70 90
Other liabilities 1,299 1,695
4,351 8,641
6 Deferred income
The largest individual item is in connection with the relocation to new business
premises. This refers to the company SCHOLZ & FRIENDS Hamburg GmbH, Hamburg.
The deferral of the subsidies for lessee improvements has led to a total consideration
for the fiscal year of Tapple 1,387 (PY Tapple 1,762).
The reduction of expenditure on rent due to the granting of rent-free periods for the
business premises in Hamburg and Berlin in the year 2000, which in accordance with
IFRS must be recorded on a linear basis over the term of the rental contract, is shown
on the balance sheet as Tapple 969 (PY Tapple 1,056).
Summer, sun and Schwarzkopf:
Scholz & Friends Athens develops
promotional material for the hair
styling festival “The Rhythm of
Cuba”.
97 l Consolidated Financial Report

Cabinet shows how to invest money
in cigarettes economically – with
a wink. A trade-marketing idea by
Scholz & Friends Hamburg.
98 l Consolidated Financial Report
7 Deferred tax liabilities
The deferred tax liabilities are a result of the following temporary differences:
Tapple 2002 2001
Finance leasing 64 180
Fixtures 0 62
Deferred income 0 (62)
Deferred tax liabilities 64 180
VII Segment information
In accordance with the conditions of IAS 14, certain information is given in the
following on the basis of individual business fields and regions.
1 Business fields
2002 2001
Tapple Push Pull Group Push Pull Group
Sales 43,083 25,890 68,973 53,905 20,535 74,440
Depreciation/amortisation 5,434 10,694 16,128 8,002 1,028 9,030
Operating results I (EBIT) (2,139) (7,517) (9,656) (2,105) 3,526 1,421
Operating results II (EBITA) 927 1,824 2,751 2,750 3,818 6,568
Segment assets* 50,090 13,597 63,687 80,269 13,325 93,594
Segment liabilities** 34,318 5,968 40,286 51,324 7,358 58,682
* Segment assets = fixed assets + current assets + prepaid expenses
** Segment liabilities = other accruals + long-term liabilities (without deferred tax liabilities) + short-term
liabilities + deferred income
The division of push communications shall primarily continue with classic advertising
under the name of SCHOLZ & FRIENDS. This will continue to be the most
important field of business in the future with a share of around three-quarters of the
turnover.
In the area of pull communication emphasis is being placed on the areas of
entertainment shows, interactive entertainment and TV and film production within
the company UNITED VISIONS. SCHOLZ & FRIENDS will supplement this business
area with its range of services in the area of integrated brand communication and
trade marketing, public relations, communications-orientated business consulting and
production.
The segment assets of the push communication business field include additions
to the fixed assets of Tapple 2,233 (PY Tapple 16,839). A further Tapple 1,597 (PY Tapple 13,192) has
been added to the business field of pull communications.
The operating results (EBIT and EBITA) for the segment of push communication
includes non-cash expenditure from the formation of the accruals for impending losses
of Tapple 1,167 (PY Tapple 0) and from the formation of accruals for termination pay of Tapple 619
(PY Tapple 1,899). The pull communication segment includes accruals for impending
losses of Tapple 985 (PY Tapple 0) and for termination pay of Tapple 58 (PY Tapple 13).

Unscheduled depreciation of goodwill of Tapple 567 (PY Tapple 2,682) and Tapple 8,039
(PY Tapple 0) had an affect on the push communication and pull communication segments,
respectively.
The push communication segment includes income from associated companies of
Tapple 55 (PY Tapple 0). The pull communication segment includes income from associated
companies of Tapple 5 (PY Tapple 96). The segment assets of the push communication segment
includes shares in associated companies to the value of Tapple 434 (PY Tapple 0). The segment
assets of the pull communication segment includes shares in associated companies to
the value of Tapple 1,042 (PY Tapple 998).
2 Regions
2002 2001
Tapple Inland Abroad Group Inland Abroad Group
Sales 57,356 11,617 68,973 60,396 14,044 74,440
Depreciation/amortisation 14,734 1,394 16,128 5,286 3,744 9,030
Operating results I (EBIT) (6,763) (2,893) (9,656) 7,551 (6,130) 1,421
Operating results II (EBITA) 4,732 (1,981) 2,751 9,436 (2,868) 6,568
Segment assets* 53,177 10,510 63,687 80,362 13,232 93,594
Segment liabilities** 25,898 14,388 40,286 41,189 17,493 58,682
* Segment assets = fixed assets + current assets + prepaid expenses
** Segment liabilities = other accruals + long-term liabilities (without deferred tax liabilities) + short-term
liabilities + deferred income
The inland segment includes all German-based companies and associated companies
(see “Companies included in the consolidation”). Correspondingly, the abroad segment
includes all affiliated companies outside Germany. The main emphasis of foreign
activity is in Europe. Only one subsidiary company is located in Asia.
The segment assets and corresponding segment liabilities are classified according
to geographic location. The classification of segment revenue is based on the geographic
location of the company performing the services, which is the company whose
location corresponds best with the location of the customer on the basis of the existing
group network organisation.
The segment assets of the inland segment include additions to the fixed assets of
Tapple 3,533 (PY Tapple 29,593). A further Tapple 297 (PY Tapple 438) has been added to the abroad
segment.
VIII Miscellaneous information
1 Operating lease payments
Obligations from rental/leasing contracts, which are treated as “operating leases”,
are as follows:
Tapple 2003 2004–2007 After 2007 Total
4,152 11,332 6,134 21,618
The above rental/leasing obligations are shown up to the earliest point of termination
of contract. The leasing liabilities from leasing contracts that are shown in the Consoli-
Finding and experiencing a
community – this is what Cabinet
stands for. A campaign for the
most successful East German
cigarette brand of Reemtsma,
by Scholz & Friends Hamburg.
99 l Consolidated Financial Report

Small drops. Big effects! Health
that you really do get used to:
Béres Drops Plus strengthen the
immune system. A campaign by
Scholz & Friends Kyiv.
100 l Consolidated Financial Report
dated Financial Statement are based on the cash value of the leasing instalments for
leased software and equipment. These are payable as follows:
Payments Interest Reduction of lease liability
Tapple 2002 2001 2002 2001 2002 2001
Within one year 569 1,098 58 108 511 990
Within 1–5 years 566 1,151 39 95 527 1,056
Total 1,135 2,249 97 203 1,038 2,046
2 Contingencies
SCHOLZ & FRIENDS AG owns a shareholding in the company Immobilienfonds
Rosenthaler Weg 8 GbR. In addition to the joint property, SCHOLZ & FRIENDS AG is
also proportionally liable, based on the percentage of shares held, with its other assets.
The company Penk Pannier Beteiligungsgesellschaft mbH has indemnified SCHOLZ &
FRIENDS AG against these risks.
On 31 December 2002 there were financial obligations of Tapple 51 (PY Tapple 51) as a
result of co-liability for the company Lentz Entertainment GmbH towards the company
Deutsche Leasing AG.
3 Employee benefit programme/Stock option plan
The General Meeting of UVE AG on 30 May 2000 authorised the Board of Directors
and Supervisory Board to introduce a share option scheme for members of the Board of
Directors and employees of the company and made a corresponding amount of conditional
capital available. A total of 67,500 share options were issued for the share option
scheme, which granted subscription rights to a total of 67,500 individual shares in the
company UVE AG. The striking price of the options corresponds to the issue price on
20 June 2000 of apple 24.00 per share. Of these options 25% could be exercised at the earliest
after two years, a further 25% at the earliest after 3 years and the final 50% could be
exercised after 4 years of being issued. Now that the merger has come into effect, the
shares in UVE AG no longer exist. Therefore the options to purchase these shares have
perished. Upon the completion of the merger SCHOLZ & FRIENDS AG therefore offered
the holders of share options for UVE AG shares the equivalent subscription rights to
shares in the company SCHOLZ & FRIENDS AG. These share options must be exercised
before 30 May 2006. Options can only be exercised within 14 banking days of the publication
of the operational figures for the third calendar quarter or, in case these figures
are not published, within 14 banking days of the end of the third calendar quarter if at
this time the General Meeting for the expired fiscal year has already been held, or within
4 banking days of the General Meeting. The preferential price for these share options is
apple 24.00, apart from 1,493 options that have a preferential price of apple 5.40.
Various employees of the SCHOLZ & FRIENDS Group already participate in the
stock option plan introduced by the parent company of SCHOLZ & FRIENDS AG,
Cordiant Communications Group plc. For further details please refer to subsection
VIII.7.3 of these notes.
Board of Directors member Christian Tiedemann has a share option for the
purchase of up to 214,599 shares in SCHOLZ & FRIENDS AG within three years from
the company BATES Deutschland Holding GmbH at a total price of 1.00 German mark.
Chairman of the Supervisory Board Peter Martin Schöning has an option to
purchase 214,500 shares in the company from BATES Deutschland Holding GmbH.

The number of existing share options did not change in the fiscal year. No further
options were granted, no options were exercised and no option rights expired.
It was not necessary to form any special accruals in the Consolidated Financial
Statement for the option obligations to be fulfilled by BATES Deutschland Holding
GmbH due to the lack of financial burden.
The option obligations assumed as a result of the merger with UVE AG (see above),
which have led to obligations being imposed on our company, did not necessitate the
forming of accruals due to the high preferential price for the options in relation to the
current stock exchange price.
Otherwise, there are no holders of any other special rights (i.e. holders of option
certificates, convertible bonds or profit participation rights, etc.).
4 Capitalisation of SCHOLZ & FRIENDS AG
The share capital of the company has been conditionally increased by a total of
Tapple 67.5 through the issue of 67,500 shares on the basis of the decision made at the
General Meeting on 28 August 2001 to introduce an employees’ stock option plan.
This conditional increase of the share capital will only be carried out insofar as share
options have been issued granting subscription rights to these new shares and as the
bearers of these share options choose to exercise their subscription rights. The new
shares will give the holder the right to participate in the profits of the company as of
the beginning of the year in which they are issued.
Furthermore, section 6 of the articles of association of SCHOLZ & FRIENDS AG
authorises the Board of Directors, with the prior consent of the Supervisory Board, to
increase the share capital once or more than once before 1 June 2006, if necessary under
exclusion of the legally stipulated subscription rights, by up to Tapple 8,500 through the issue
of new bearer shares in return for cash payments or payment in kind (authorised capital).
The Board of Directors, with the consent of the Supervisory Board, is also authorised
to determine the exact conditions for the issue of new shares. Furthermore, the Board
of Directors is authorised, with the consent of the Supervisory Board, to preclude the
subscription rights of existing shareholders in certain cases, for example in order to
issue the new shares to the employees of the company as part of a stock option plan.
5 Board of Directors and Supervisory Board
Members of the Board of Directors of SCHOLZ & FRIENDS AG in the 2002 fiscal
year were:
•Mr Wolfgang Boyé, Berlin, businessman,
•Mr Thomas Heilmann (Chairman), Berlin, advertising expert
Chairman of the Supervisory Board of Ampere AG, Berlin
Chairman of the Supervisory Board of Econa AG, Berlin
Chairman of the Supervisory Board of MHH AG, Hamburg
Chairman of the Supervisory Board of Aperto AG/cell network Germany, Berlin
•Mr Tewe Pannier, Berlin, journalist,
•Mr Christian Tiedemann, Hamburg, businessman,
Chairman of the Supervisory Board of deepblue networks AG, Hamburg
•Mr Sebastian Turner (Chairman), Berlin, advertising expert.
The total amount of wages paid to the members of the Board of Directors
amounted to Tapple 1,502 (PY Tapple 553) plus 5,000 (PY 5,000) subscription rights to shares
in the company as part of the company’s stock option plan.
What do healthy skin, eyes,
muscles and bones require? Not
skin cream, but milk, cheese and
yogurt from Northern Ireland.
A television commercial by Scholz
& Friends London for the Dairy
Council of Northern Ireland.
101 l Consolidated Financial Report

How to save money and motivate
employees at the same time?
Easy enough with Mercedes-Benz
communal service vehicles.
Scholz & Friends Berlin.
102 l Consolidated Financial Report
For one member of the Board of Directors there is an existing accrual for pension
of Tapple 22 (PY Tapple 22).
No loans have been granted to any members of the Board of Directors, nor any
related parties, by the company or by any of its subsidiary companies.
Supervisory Board
The following table contains a list of all the members of the Supervisory Board
and their main professions:
Name Profession
Peter Martin Schöning Chairman Advertising expert
Andrew Boland Deputy Chairman Businessman
Michael Bungey Businessman
Klaus Droste since 4 July 2002 Investment banker
Prof. Dr. Ronald Frohne Lawyer and chartered accountant
Dr. Rüdiger Rönck until 4 July 2002 Lawyer
Ekkehard Streletzki Graduate engineer
The members of the Supervisory Board also have positions in the supervisory
boards and/or other control boards of the following companies.
Supervisory Board Membership in other legally Supervisory and
Control Boards
Peter Martin Schöning SCHOLZ & FRIENDS Brand Affairs GmbH (formerly CULTNET AG),
Chairman
Andrew Boland (Only positions within the Cordiant Group)
Michael Bungey (Only positions within the Cordiant Group)
Klaus Droste None
Prof. Dr. Ronald Frohne 8SensBiognostic AG, Agicoa Association (Member of the Executive Board),
CAB (Member of the Board), Eckart & Ziegler Medizintechnik AG,
GE Rückversicherungs-Beteiligungs AG, Filmboard Berlin-Brandenburg
GmbH, Kirch Stiftung (Member of the Board of Trustees), McDonald’s
Deutschland Inc. (Member of the Board), TAG Immobilien- und Beteiligungs
AG, Tellux-Beteiligungs GmbH, Würzburger Versicherung AG
(Chairman)
Dr. Rüdiger Rönck bbv AG Consultants for Finance and Technology (Chairman),
BRANDERS Marken AG, Millennium Venture Capital AG,
traveljames.com AG, Venture Werk AG, Xx-well.com AG (Chairman)
Ekkehard Streletzki None
None of the members of the Supervisory Board have been granted loans by the
company.
In the 2002 fiscal year the Supervisory Board received a total amount of wages of
Tapple 56 (PY Tapple 0).
6 Employees
On 31 December 2002 SCHOLZ & FRIENDS employed a total work force of 665
(PY 744).

7 Related parties
Companies and persons are considered to be related parties if the possibility exists
of one of the parties controlling the other party or having a significant influence over
the financial and business policies of the other party.
7.1 Companies: Cordiant Group
The company SCHOLZ & FRIENDS AG is a company of the Cordiant Group. The
English parent company of the Cordiant Group, Cordiant Communications Group plc.,
has its registered office in London and is quoted on the London and New York stock
exchanges. Via Cordiant Holdings GmbH, this company is the indirect holder of all shares
in the company BATES Deutschland Holding GmbH, which owned 77.30% (PY 76.54%)
of SCHOLZ & FRIENDS AG on 31 December 2002.
Legal relationship between Cordiant and SCHOLZ & FRIENDS
SCHOLZ & FRIENDS acts on the market under its own name, independently of the
other companies of the Cordiant Group. There are only a few legal relations between
SCHOLZ & FRIENDS and the Cordiant Group. This includes primarily the following:
•Cordiant Holdings GmbH granted the SCHOLZ & FRIENDS Group GmbH the loan
described in more detail in subsection VI.5 of these notes.
•SCHOLZ & FRIENDS Group GmbH has agreed to stand surety for an amount of GBP
2.8 million in favour of BATES UK Ltd. for the loans taken up by SCHOLZ & FRIENDS
London Ltd.
•Various employees of the SCHOLZ & FRIENDS Group participate in the stock option plan
offered by the parent company of SCHOLZ & FRIENDS AG, the Cordiant Communications
Group plc. There are two types of stock option plan in which the employees of the
SCHOLZ & FRIENDS Group participate: the “Equity Participation Plan (EPP)” and the
“Performance Share Option Scheme (PSOS)”. More details of these equity participation
programmes can be found in the Group Management Report of the Cordiant Communications
Group plc., which was translated into German together with the Consolidated
Financial Statement dated 31 December 2000 and disclosed in the Federal Gazette, as
well as being filed in the commercial register of the SCHOLZ & FRIENDS Group GmbH,
Hamburg.
7.2 Natural persons
Mr Eisen, Mr San Martín and Mr Camina are managing directors of SCHOLZ &
FRIENDS Madrid S.A.L. There are outstanding obligations to these gentlemen of
Tapple 720 (PY Tapple 1,817) from the acquisition of the company E.S.C. COMUNICACION
EISEN SAN MARTIN CAMINA, S.A.L. by SCHOLZ & FRIENDS Madrid S.A.L. These
obligations are posted under the item long-term trade payables.
7.3 Relationship of the UVE Group to related parties
The company UNITED VISIONS GmbH, Berlin, has rented studio and administrative
facilities of approximately 2,280 square metres in Brunnenstraße 154/155, Berlin.
These premises are rented from the company Scholz/Diobos GbR. The partners of
Scholz/Diobos GbR are Mr Hans-Peter Scholz as direct partner and Mr Ekkehard
Streletzki, member of the Supervisory Board, as indirect partner. The rental costs for
these premises amounted to Tapple 111 (PY Tapple 187) in the fiscal year.
What could speak more for a
Vaneo with anti-slip mats for dogs
than a flat snout? Scholz & Friends
Berlin.
103 l Consolidated Financial Report

Featuring popular hits of the 70s,
80s and 90s, Scholz & Friends
Warszawa’s advertising campaign
for Radio Kolor 103 FM promoted
the station’s versatile musical
programme.
104 l Consolidated Financial Report
Moreover, UNITED VISIONS GmbH also rents approximately 1,789 square metres
of premises in Linienstraße 214, Berlin, as well as three car-parking spaces, from the
company Linienstraße GbR. The annual rental costs for these premises amounts to
Tapple 226. Mr Hans-Peter Scholz has an interest in the company Linienstraße GbR of
4.2% and an interest in the company Media Port Berlin GmbH of 16.6%. During the
course of the merger these leases were transferred to SCHOLZ & FRIENDS AG, who
then transferred them to UNITED VISIONS GmbH.
For several years the company UVE AG had a cooperation agreement with the
company K.M.C. GmbH, Berlin, concerning the joint marketing of meetings and
events. As a result of this relationship between the two companies, UVE AG acquired
rights to a total value of Tapple 1,329 of K.M.C. GmbH. The aforementioned contract can
be terminated at the earliest on 30 June 2002, with a period of notice of three months.
The Supervisory Board member Mr Ekkehard Streletzki holds 100% of the stock of
K.M.C. GmbH.
8 Declaration of Conformity with the Corporate Governance Code
SCHOLZ & FRIENDS AG has issued the declaration stipulated in section 161 of the
German Stock Corporation Act (AktG) and provided access to these documents for the
shareholders through publication on the company’s Web site (www.s-f.com).
9 Significant events after the end of the fiscal year
With the exception of the current negotiations for the sale of the majority shareholding
in our company by Cordiant, there have been no other occurrences after the
end of the 2002 fiscal year that hold any particular significance for SCHOLZ &
FRIENDS AG or that could lead to changes to the assessment of the company’s current
situation.
Berlin, 28 February 2003
The Board of Directors of
SCHOLZ & FRIENDS AG
In der Lokfabrik
Chausseestraße 8/E
10115 Berlin, Germany
Wolfgang Boyé Thomas Heilmann Christian Tiedemann Sebastian Turner

Auditors’ Report
We have audited the Consolidated Financial Statements, comprising the Balance
Sheet, the Profit and Loss Account and the Statements of Changes in Shareholders’
Equity and Cash Flow Statement as well as the Notes to the financial statements prepared
by the SCHOLZ & FRIENDS AG for the fiscal year from 1 January to 31 December
2002. The preparation and the content of the Consolidated Financial Statements in
accordance with International Financial Reporting Standards (IFRS) are the responsibility
of the company’s management. Our responsibility is to express an opinion on
these Consolidated Financial Statements based on our audit.
We conducted our audit of the Consolidated Financial Statements in accordance
with German auditing regulations and German generally accepted standards for the
audit of financial statements promulgated by the Institut der Wirtschaftsprüfer (IDW).
Those standards require that we plan and perform the audit such that it can be
assessed with reasonable assurance whether the Consolidated Financial Statements are
free of material misstatements. Knowledge of the business activities and the economic
and legal environment of the group and evaluations of possible misstatements are
taken into account in the determination of audit procedures. The evidence supporting
the amounts and disclosures in the Consolidated Financial Statements is examined
on a test basis within the framework of the audit. The audit includes assessing the
accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the Consolidated Financial Statements. We
believe that our audit provides a reasonable basis for our opinion.
In our opinion, the Consolidated Financial Statements give a true and fair view of
the net assets, financial position, results of operations and cash flows of the group for
the fiscal year in accordance with International Financial Reporting Standards.
Our audit, which also extends to the Group Management Report prepared by the
company’s management for the fiscal year from 1 January to 31 December 2002, has
not led to any reservations. In our opinion on the whole the Group Management
Report provides a suitable understanding of the group’s position and suitably presents
the risks of future development. In addition, we confirm that the Consolidated Financial
Statements and the Group Management Report for the fiscal year from 1 January to
31 December 2002 satisfy the conditions required for the company’s exemption from
its duty to prepare Consolidated Financial Statements and the Group Management
Report in accordance with German law.
Hamburg, 28 February 2003
KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft
Ditting Gries
Wirtschaftsprüfer Wirtschaftsprüfer
In case of publication or transmission of the Consolidated Financial Statements in a version different to the
version confirmed by us (including translations into other languages), in so far as our audit opinion is quoted
or our review referred to, a new statement is to be obtained from us. Please refer to section 328 HGB.
The durable hole punchers by
Herlitz are perfect for filing. And
with a bit of fantasy, they are also
perfect for a confetti parade.
Scholz & Friends Berlin.
105 l Consolidated Financial Report

The Orchestra of Ideas for Davidoff Cigarettes
Full view on page 88
Celebrities enjoy the culinary
skills of their friends on “Davidoff
Cooking for Friends” – and
Davidoff its media profile.
Scholz & Friends Brand Affairs.
The consistent and atmospheric
presentation of Davidoff
Cigarettes in cinema spots.
106 l Consolidated Financial Report
Objective: Develop a concise, world-wide brand image
for Davidoff Cigarettes, positioning the brand as the
world’s best cigarette in the premium price segment.
Conducting idea: Charismatic protagonists embody the
promise and aura of the brand. The tagline cements the
brand’s three critical facets: connoisseurship, prestige
and ultimate quality.
Tagline: the more you know
Results: Uninterrupted growth in sales, against market
trends; a leading position among international premium
tobacco brands in Eastern Europe and Asia; the brand
image is absorbed by consumers as an entirely coherent
and independent whole.
The Davidoff print campaign has
created a unique and identifiable
brand image. By Scholz & Friends
London.
Cigarette advertising is strictly
regulated in Slovakia. But good
ideas are allowed. Scholz & Friends
Wien establishes the Prestige Car
of the Year poll.
Promotional installations by
Scholz & Friends Sensai make the
world of Davidoff Cigarettes all
the more tangible.
The conducting idea of
“stylish men” is used in Russia,
too – adapted to local ideals of
beauty.
Solid foundations: Reemtsma is
building on the success of the
established brand campaign for
the introduction of Davidoff line
extenders.

Annual Financial Report
107 l Annual Financial Report

Management Report
Management Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Economic environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Stagnation of the global economy . . . . . . . . . . . . . . 109
Difficult global market situation for the
advertising industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Advertising environment in Germany . . . . . . . . . . . . . . . . 109
The market environment of
SCHOLZ & FRIENDS AG . . . . . . . . . . . . . . . . . . . . . . . . 110
Equity, profitability and financial position for
the 2002 fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Annual income increased considerably . . . . . . . . . . 110
Excellent liquidity situation . . . . . . . . . . . . . . . . . . . . . . 111
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
Personnel and social security . . . . . . . . . . . . . . . . . . . . 111
Risks to future development . . . . . . . . . . . . . . . . . . . . . . . . . 112
Economic risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
Sector-related risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
Impending prohibition of advertising for
tobacco products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
Ruling on copyright contract law . . . . . . . . . . . . . . . . 113
Dependence on important clients . . . . . . . . . . . . . . . 113
Dependence on qualified personnel . . . . . . . . . . . . . 114
Financial situation of our parent company/
Possible change of the majority shareholder . . . . . 114
Affiliated companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
Other risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
Reference to the dependent company report . . . . 115
Significant events after the end of the
2002 fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
108 l Annual Financial Report
Annual Financial Statement AG . . . . . . . . . . . . . . . . . . . . . . 116
Balance Sheet – Assets . . . . . . . . . . . . . . . . . . . . . . . . . . 116
Balance Sheet – Equity and Liabilities . . . . . . . . . . . . 117
Profit and Loss Account . . . . . . . . . . . . . . . . . . . . . . . . 118
List of Equity Interests . . . . . . . . . . . . . . . . . . . . . . . . . . 119
Summary of Fixed Assets . . . . . . . . . . . . . . . . . . . . . . . . 120
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
Auditors’ Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129

SCHOLZ & FRIENDS AG has participations in SCHOLZ & FRIENDS Group GmbH
and UV GmbH, under which all of the subsidiary companies, both within Germany and
abroad, are subordinated. With the consent of the General Meeting on 4 July 2002,
the company completed a profit and loss transfer agreement with SCHOLZ & FRIENDS
Group GmbH with retroactive effect to the start of the 2002 fiscal year.
Shares in SCHOLZ & FRIENDS AG have been quoted on the regulated market of
the German stock exchange in Frankfurt since 26 November 2001 under the securities
identification number 697 280. The development of our shares over the fiscal year was
unsatisfying, as was the development of the stock market in general. Shares in our
company lost 68.6% of their market value over the course of the year (see page 47).
Economic environment
Stagnation of the global economy
The outlook on the global economy grew increasingly sombre over the course of
fiscal year 2002, particularly in the face of an impending war with Iraq.
The impact of the weak economy in North America and Europe affected Germany
in particular; one clear indication of this impact was that economic growth in Germany
was again very low, as in the previous year, with an increase in gross domestic product
(GDP) of significantly less than 1%.
Difficult global market situation for the advertising industry
Consolidation continued to shape the international communication industry in
2002, and the level of competition within the industry intensified considerably. In
particular, fiscal year 2002 saw increasing pressure exerted on agency fees and remuneration.
As in the previous year, the key factors which contributed towards this situation
included the weak international demand of important markets and a sustained reduction
in advertising outlay, leading to a decline in capacity utilisation. In an attempt
to balance out short-term fluctuations in marketing outlay the international agency
networks reacted with headcount adjustments and enhanced cost flexibility.
Advertising environment in Germany
At present the advertising industry is suffering as a result of an enduring decline in the
volume of contracts. The 2002 fiscal year saw the average outlay of trade and industry on
advertising decline by approximately 4%, as in the previous year (source: Nielsen Media
Research GmbH). The biggest cutbacks in advertising outlay were made by the office,
IT, telecommunications and banking industries. Other industries, such as personal
hygiene and cosmetics and the tourism industry, recognised the opportunity to promote
attractive products with countercyclical advertising investments, thereby influencing
the market structure in the coming years, and increased their outlay on advertising
accordingly. However, the increased outlay from these industries was not sufficient to
compensate for the cutbacks made by the majority of market participants.
Many advertising agencies were forced to lay off qualified employees. Unemployment
in the advertising industry reached an all-time high of nearly 5%.
To invest money wisely, you don’t
have to be a financial expert.
Advertisements by Scholz & Friends
Berlin visualise different Activest
funds, using scenes from everyday
life.
109 l Annual Financial Report

Who says that capital goods have
to be boring? Scholz & Friends
Berlin makes Linde forklifts look
as aesthetic as sports cars.
110 l Annual Financial Report
The market environment of SCHOLZ & FRIENDS AG
For SCHOLZ & FRIENDS AG the 2002 fiscal year saw the implementation of a
number of measures designed to increase the value of the company. These measures
were planned in 2001 on the basis of the merger with United Visions Entertainment AG
and the subsequent flotation of the company on the stock exchange. The merger of
SCHOLZ & FRIENDS and UVE has created a good strategic positioning for the group’s
services. One of our main objectives is to continue to reinforce and expand this position.
Increasing media convergence is constantly placing higher demands on the creative
and communicative abilities of advertising agencies, and it is becoming more and more
difficult and expensive to grab and keep the attention of the consumer and the target
group in the face of predatory competition. The resulting rise in marketing costs makes
the diversification of brand communication, the integration of marketing procedures
and the development of new formats absolutely imperative. The integration of United
Visions Group means that SCHOLZ & FRIENDS Group has now expanded its range of
services to include the promising segments event marketing and entertainment, thus
creating an excellent basis to develop new platforms for brand advertising.
These platforms enable us to powerfully communicate our clients’ brands to
potential consumers. The brand is the most important distinguishing characteristic of
a product, and it can only be successfully and profitably established if it is carefully
positioned, systematically nurtured and professionally managed.
SCHOLZ & FRIENDS is one of the most attractive addresses for creative services
in Germany; the company is eminently well equipped to satisfy customer needs. After
holding the number one spot in the creative rankings published by the respected
specialist publication for the advertising industry, werben & verkaufen, in the previous
year, SCHOLZ & FRIENDS again occupied one of the top spots this year, thus underscoring
the position we have held for many years as a leading creative force in the
marketing industry.
Equity, profitability and financial position for the 2002 fiscal year
Annual income increased considerably
The annual income of the financial holding company SCHOLZ & FRIENDS AG for
the 2002 fiscal year amounted to Tapple 2,124. This figure was largely influenced by the
profit and loss transfer agreement completed with the SCHOLZ & FRIENDS Group and
is therefore only to a very limited extent comparable with the previous year’s loss of
Tapple 12,584. The loss incurred in the previous year was largely attributable to extraordinary
expenses (Tapple 10,010). The results for the 2002 fiscal year were also affected by
extraordinary expenses of approximately apple 2 million as a result of the depreciation of
assets during the course of restructuring measures. Despite these expenses, the annual
income of Tapple 2,124 is very positive and is a good indication of the success of the
restructuring measures carried out over the course of the year.
In order to establish and safeguard the profitability of SCHOLZ & FRIENDS Group
on a long-term basis, despite the increasingly tough market conditions, and improve
the company’s competitiveness, we spent last year implementing the comprehensive
restructuring measures planned in 2001. These include preparations for the sale of
non-profitable business fields in order to avoid encumbrances to the operative results.

The concentration of UV Group on the business fields Entertainment and TV and
Film Production in the fiscal year has led to constantly improving positive results. In
future, business fields will focus more stringently on profitability instead of increasing
market shares.
The net sales of SCHOLZ & FRIENDS Group decreased in comparison to the
Consolidated Profit and Loss Account of the previous year, from Tapple 74,440 to
Tapple 68,973. This is largely attributable to the phasing out of non-profitable business
fields and the generally poor development of the advertising market.
The EBIT of SCHOLZ & FRIENDS Group in the 2002 fiscal year failed to match
the EBIT of Tapple 1,421 achieved in the previous fiscal year. It decreased to Tapple (9,656),
attributable largely to restructuring measures and unscheduled depreciation of goodwill
(Tapple 8,606). Taking into account the additional scheduled depreciation of goodwill
that was also carried out, the EBITA was clearly positive at a level of Tapple 2,751.
Excellent liquidity situation
The financial resources available to SCHOLZ & FRIENDS AG at the beginning of
the fiscal year were used for ongoing business activities (Tapple 10,715, of which apple 3 million
was used for the repayment of debts and the rest primarily for the financing of group
companies) and investments (Tapple 1,218).
The equity ratio of SCHOLZ & FRIENDS AG was increased from 84.5% to 91.6%.
This is a very gratifying development.
On 31 December 2002, SCHOLZ & FRIENDS Group had a stock of liquid funds of
Tapple 12,035. This means that the group has a very satisfactory amount of funds available
and is in a good position to achieve our challenging goals.
Investments
During the course of the 2002 fiscal year Tapple 927 was invested in the expansion of
the network and the range of services offered by the group. These acquisitions can be
broken down as follows:
1. Acquisition of 51% of the company COUCH POTATOES Fernsehproduktions
GmbH in Cologne (hereafter referred to as “CP”) for Tapple 778 (part payment). CP
is one of Germany’s leading television production companies. This acquisition is
intended to further strengthen our range of services in the area of integrated push
and pull communications. CP produces more than 400 hours of televisual entertainment
every year. Customers include RTL, RTL II, ProSieben and TV3. The
founding shareholders Bärbel Schäfer, a well-known television presenter, and
Martin Schäfer, managing director, will remain with the company and continue to
be shareholders.
2. Increase of our shareholding in the company deepblue networks AG in Hamburg
by 19% from 30% to 49% (Tapple 149). This acquisition was designed to strengthen
our business relations with one of our key customers.
Further investments were made in office equipment, fixtures and fittings and
in software.
Personnel and social security
As at 31 December 2002, only the members of the Board of Directors were employed
by SCHOLZ & FRIENDS AG. SCHOLZ & FRIENDS Group was forced to lay off a further
79 employees during the course of the fiscal year as a result of the slight decline in
In its image campaign for RWE
Gas, Scholz & Friends Hamburg
uses expressive fossil motifs to
visualise the million-year-old history
of the product RWEnaturgas ® .
111 l Annual Financial Report

Germany needs reform. With
advertisements and PR, Scholz &
Friends Berlin and Scholz &
Friends Agenda create a striking
message for Initiative Neue Soziale
Marktwirtschaft.
112 l Annual Financial Report
business, as well as the synergy effects and organisational changes brought about by
restructuring measures. The number of employees had decreased by the end of the
fiscal year to a total of 665 (PY 744).
Risks to future development
The Act on Control and Transparency in the Company Sector (KonTraG) obliges us
as a public limited company to set up an internal system of supervision within the group
in order to detect and highlight any significant risks to future development that could
have a detrimental effect or considerable influence on the company’s equity, earnings
or financial situation.
The risk management system of SCHOLZ & FRIENDS AG is an integral component
of the entire planning, control and reporting process and ensures the systematic
identification, assessment, control and communication of any possible risk factors.
A comprehensive management system has been established for the swift recognition
of any significant risks to the company. This system comprises two separate components.
The management of all the company’s operative units systematically registers
and assesses all risks to the company. Risks are classified in accordance with the
probability of occurrence and expected level of damages incurred. This is an effective
and standardised benchmark for the assessment of risks.
The risk assessment system is closely linked with the controlling procedure. All the
company’s units regularly examine whether there have been any changes to risk expectations
and whether any anticipated risks have actually occurred.
Amongst the risks that could possibly affect the future development of the company,
the following merit particular emphasis:
Economic risks
Should the downswing of the European economy continue on a long-term basis, the
resulting reticence in awarding international advertising budgets could have a direct
impact on SCHOLZ & FRIENDS Group. We are currently combating this risk through
the expansion of our range of services, the expansion of our network and the consistent
strengthening of our market position.
Sector-related risks
When creating advertising concepts the company is subject to restriction by certain
legal stipulations, in particular concerning the protection of minors, the protection of
privacy and personal rights and the prevention of unfair competition. At the same time
SCHOLZ & FRIENDS’ clients and the products and services that are being advertised
are sometimes subject to other advertising restrictions, including the following.
Impending prohibition of advertising for tobacco products
One advertising budget held by SCHOLZ & FRIENDS is that of the Reemtsma Group,
which makes the company dependent to a certain extent on net sales from tobacco
advertising. These revenues are threatened by the tobacco advertising guidelines submitted
by the EU Council of Ministers in 2002 and approved by the EU Minister for
Health at the start of 2003. These guidelines impose considerable restrictions on the
advertising of tobacco products. The new guidelines state that advertising of cigarettes

and other tobacco products will no longer be permitted in newspapers and magazines,
on the radio, on the Internet and at international sporting events. Tobacco products
may still be advertised on billboards and hoardings and in cinemas. The advertising
ban does not affect holidays, shoes and cosmetics that are marketed by the tobacco
companies.
EU Member States must implement the new tobacco advertising guidelines until
31 July 2005. The transitional period for the elimination of tobacco advertising at
sporting events runs until 1 October 2006. After voting against the proposed guidelines
in the EU Council of Ministers, both Germany and Great Britain intend to bring an
action against the guidelines at the European Court of Justice. Nonetheless, the implementation
of the new tobacco advertising guidelines, as well as tighter legal obligations
in other areas, constitutes a risk for SCHOLZ & FRIENDS AG.
Ruling on copyright contract law
A bill was passed in 2001 to reinforce the contractual position of authors and
performing artists. This bill grants more rights to the originators of a creative work but
also takes into account the requirements of the advertising industry. The main concern
of the reform is to guarantee authors and freelance artists an appropriate amount of
remuneration for the use of their work in the future.
Because the legislators do not want to, nor are able to, regulate the multitude of
forms of use of a creative work, the relevant parties (associations of authors and users
of original works, such as advertising agencies and film producers) will determine the
amount of remuneration that is appropriate for the use of the work themselves on the
basis of a procedural code (common payment regulations). This will then form a
mutual and binding basis for the appropriateness of an amount of remuneration.
In the event that the parties involved in the aforementioned procedure fail to agree
on the stipulations of the payment regulations, the new bill makes provision for an
arbitration procedure between the parties with the aim of reaching a settlement. If the
arbitration ruling proves to be unacceptable to both parties, it will have no binding
effect. The arbitration ruling should certainly be seen as an indicator for the calculation
of an appropriate price. Advertising agencies and film producers will have three months
in which to object to a settlement on the amount of remuneration payable as a result
of the use of a work. We will have to wait and see the extent to which such settlements
are tacitly established in practice as models for the amount of remuneration payable
to authors and actors in the industry.
Dependence on important clients
To a large extent we have become dependent on current business relationships
with our most important clients, who at the moment include Reemtsma, Tchibo,
DaimlerChrysler, Activest, Hapag-Lloyd, Coca-Cola and the Ministry of the State of
Baden-Württemberg. In the event that some of these clients choose to take their
business elsewhere, this would have a considerable effect on the business operations
of SCHOLZ & FRIENDS. We are combating this risk by ensuring that we provide
top-quality services from qualified personnel, by making every effort to ensure the
satisfaction of our clients and by expanding our clientele to include new clients.
How to help hungry children? By
enjoying a picnic in the park and
supporting the aid organisation
Pozywienie Darem Serca Foundation
through the entrance fee. TV
commercial by Scholz & Friends
Warszawa.
113 l Annual Financial Report

With this unusual promotion for
the magazine mare, Scholz &
Friends Hamburg reaches its
target group at the perfect location:
the fish counter.
114 l Annual Financial Report
Dependence on qualified personnel
The entire advertising and entertainment industry has a high requirement for
qualified personnel, and accordingly there is a high staff turnover rate. As the future
success of SCHOLZ & FRIENDS is dependent to a large extent on the quality of its
work force and managerial staff, the company intends to build long-term working
relationships with these employees through participation in share ownership schemes
for partners and employees.
Financial situation of our parent company/Possible change of the majority shareholder
SCHOLZ & FRIENDS AG is an indirect subsidiary company of the Cordiant
Communications Group plc., London (hereafter referred to as “Cordiant”). Due to the
strained financial position of our current parent company, plans have been made to sell
its 77% interest in SCHOLZ & FRIENDS AG. In the event that this sale does not take
place and Cordiant becomes insolvent, there is a danger that the loan granted to our
company, which at the moment stands at apple 8.9 million, will mature.
In order to combat this risk we have made sure that we have sufficient liquid funds
to cover the repayment of the loan. Furthermore, we could stand to benefit if the
shares in our company are sold, as Cordiant has adopted a rigid cost-saving strategy
which is in direct conflict with our expansion plans.
Affiliated companies
Through our subsidiary companies we are indirectly exposed to the respective risk
factors affecting these subsidiary companies. We may be made subject to certain
encumbrances as a result of liabilities and financing arrangements assumed by us through
the relationships we have to our subsidiary companies. This includes in particular the
further development of business at SCHOLZ & FRIENDS London Ltd. and SCHOLZ &
FRIENDS Paris S.A.R.L., as well as at our subsidiary company UV GmbH.
Other risks
We do not foresee any significant legal risks. In our branch of industry there is always
the possibility of risks arising due to the infringement of utilisation rights or privacy
and personal rights. We protect ourselves against such risks by employing a system to
safeguard our interests. Other risks, for example in the area of IT, are not considered
significant.
We are convinced that we deal with and protect ourselves against all possible risks
adequately. The punctual reporting of all essential information to the Board of Directors,
including information concerning consolidated affiliated companies, is guaranteed at
all times and takes into consideration the size of the company and nature of the business
of the individual units of the company.
In the 2002 fiscal year we were not aware of any significant defects in the management
system which would necessitate the introduction of correctional procedures to
our system of control. At the moment there are no risks that could possibly endanger
the existence of the SCHOLZ & FRIENDS Group.
Outlook
In the opinion of the research institutes, growth (GDP) in the German economy
will be around 1.0% in the 2003 fiscal year. Hence, outlook remains cautious. One
factor for this is the rising euro. Furthermore, ongoing discussions on amendments to

taxation law make it difficult to make definite plans. Stock markets and capital markets
put pressure on growth, as does the increased price of oil. These factors have a detrimental
effect on production volume and consumption expenditure.
These unfavourable economic framework conditions are also affecting the communication
industry. The Central Association of German Advertisers (ZAW) predicts
growth of a mere 1% in 2003. The mood continues to be restrained on all three levels
of the advertising industry – advertising companies, advertising agencies and advertising
media – although the outlook is by no means pessimistic. Along with the other significant
operatives in the advertising market, we assume that we have already reached rock
bottom and that it is only a matter of time before recovery starts. However, we still
expect a sluggish market and therefore an unchanged level of turnover in 2003. At the
same time we also expect an improvement in the amount of earnings on account of the
restructuring measures that have already been implemented.
We welcome the decision of our British parent company Cordiant to sell its shareholding
in SCHOLZ & FRIENDS AG. With the help of an investor we intend to become a
complete service provider on the market within two years through further acquisitions
and growth. International expansion and the inclusion of further specialist branches
of the advertising industry into the group are priorities. In particular we see further
possibilities in the areas of direct marketing, the Internet and event marketing.
The Group is continuing its course of expansion with the founding of the Swiss
company SCHOLZ & FRIENDS Zürich AG at the beginning of the 2003 fiscal year. The
new office in Zurich is designed to capitalise on the economic strength of the Swiss
market and fill the international group of agencies’ remaining gap on the Germanspeaking
market. The new office started superbly by acquiring its first internationally
known customer Coca-Cola AG Schweiz.
Reference to the dependent company report
The dependent company report drawn up by the Board of Directors of SCHOLZ &
FRIENDS AG in accordance with section 312 of the German Stock Corporation Act
(AktG) concludes with the following declaration:
“Our company receives appropriate compensation for all legal transactions cited
in the report concerning relations with affiliated companies. We are not disadvantaged
in any way as a result of the undertaking or forbearance of any of the actions listed in
the report. This assessment is based on our knowledge of circumstances at the time of
carrying out the transactions listed in the report”.
Significant events after the end of the 2002 fiscal year
With the exception of the current negotiations for the sale of the majority shareholding
in our company by Cordiant, as described above, there have been no other
occurrences after the end of the 2002 fiscal year that hold any particular significance
for SCHOLZ & FRIENDS AG or that could lead to changes to the assessment of the
company’s current situation.
Berlin, 28 February 2003
SCHOLZ & FRIENDS AG
The Board of Directors
The big eat the small – in front
of the television and in the TV
programme. Advertisement and
poster for mareTV by Scholz &
Friends Hamburg.
115 l Annual Financial Report

Balance Sheet (HGB)
as of 31 December 2002
ASSETS
apple 31 Dec. 2002 31 Dec. 2001
A Fixed assets
I Intangible assets
1 Concessions, industrial and similar rights
and assets and licences in such rights
and assets
49,779.92 25,363.59
2 Payments on account on software 61,754.00 0.00
111,533.92 25,363.59
II Tangible assets
1 Factory and office equipment 98,937.73 69,076.27
2 Fixtures and reconstructions 347,545.13 0.00
3 Payments on account 0.00 246,663.22
446,482.86 315,739.49
III Financial assets
1 Shares in affiliated enterprises 27,251,012.84 26,473,294.38
2 Participations 207,134.99 58,223.74
3 Reinsurance claims 7,780.71 7,012.36
27,465,928.54 26,538,530.48
28,023,945.32 26,879,633.56
B Current assets
I Receivables and other assets
1 Trade receivables 15,626.28 0.00
2 Receivables from affiliated enterprises 16,157,128.73 5,792,937.09
3 Receivables from enterprises in which
participations are held
47,228.42 0.00
4 Other assets 630,412.22 805,031.50
16,850,395.65 6,597,968.59
II Cash in hand, bank balances and cheques 42,307.83 11,975,161.40
116 l Annual Financial Report
16,892,703.48 18,573,129.99
C Prepaid expenses 16,568.44 0.00
Total assets 44,933,217.24 45,452,763.55

EQUITY AND LIABILITIES
apple 31 Dec. 2002 31 Dec. 2001
A Equity
I Subscribed capital
Conditional capital apple 67,500.00
21,460,000.00 21,460,000.00
II Capital reserve 29,540,921.20 29,540,921.20
III Beginning retained earnings (12,584,002.15) 0.00
IV Net profit for the year
(PY: Net loss for the year)
2,124,006.16 (12,584,002.15)
40,540,925.21 38,416,919.05
B Contribution made for the implementation
of the approved share capital increase
486,818.00 0.00
C Accruals
1 Accruals for pensions and similar
obligations
21,817.33 21,817.33
2 Tax accruals 185,100.19 185,100.19
3 Other accruals 1,432,248.08 1,106,874.34
1,639,165.60 1,313,791.86
D Liabilities
1 Trade payables of which apple 147,968.59
(PY: apple 783,629.84) with a residual term
up to one year
147,968.59 783,629.84
2 Payables to affiliated enterprises of which 1,838,735.72 4,918,004.35
apple 1,838,735.72 (PY: apple 4,918,004.35) with a
residual term up to one year
3 Other liabilities of which apple 279,604.12 279,604.12 20,418.45
(PY: apple 20,418.45) with a residual term up
to one year, of which apple 49,496.34
(PY: apple 17,812.66) from taxes, of which
apple 57.39 (PY: apple 57.39) for social security
2,266,308.43 5,722,052.64
Total equity and liabilities 44,933,217.24 45,452,763.55
117 l Annual Financial Report

Profit and Loss Account (HGB)
1 January until 31 December 2002
apple 2002 2001
1 Net sales 1,081,291.80 1,170,492.21
2 Other operating income 34,131.64 74,454.91
3 Cost of materials
a) Cost of goods purchased 0.00 (110,708.95)
b) Cost of purchased services (231,055.27) (346,403.01)
4 Personnel expenses
118 l Annual Financial Report
(231,055.27) (457,111.96)
a) Wages and salaries (1,502,367.55) (856,327.71)
b) Social security of which apple 6,389.16
(PY: apple 2,323.31) for pension costs
(6,666.79) (91,848.64)
(1,509,034.34) (948,176.35)
5 Depreciation and amortisation
of intangible and tangible assets
(75,431.63) (433,814.08)
6 Other operating expenses (2,271,434.52) (2,783,635.93)
7 Income from profit transfer agreements 8,142,162.54 231,042.73
8 Other interest and similar income of which
apple 400,875.55 (PY: apple 53,779.70)
from affiliated enterprises
487,010.58 670,331.37
9 Expenses from loss transfer (1,353,654.33) 0.00
10 Interest and similar expenses of which
apple 17,497.18 (PY: apple 0.00) to affiliated
enterprises
(18,219.80) (18,917.29)
11 Result from ordinary activities 4,285,766.67 (2,495,334.39)
12 Extraordinary charges/results (2,157,088.56) (10,010,036.64)
13 Taxes on income payable 0.00 (46,455.93)
14 Other taxes payable (4,671.95) (32,175.19)
15 Net income for the year
(PY: Net loss for the year)
2,124,006.16 (12,584,002.15)
16 Beginning retained earnings (12,548,002.15) 0.00
17 Retained earnings year-end (10,459,995.99) (12,584,002.15)

List of Equity Interests (HGB)
as of 31 December 2002
Held Share of equity Annual
Company directly via capital in % Currency Equity profit
1. SCHOLZ & FRIENDS AG, Berlin apple 40,540,925.21 2,124,006.16
2. SCHOLZ & FRIENDS Group GmbH, Hamburg 1) 1. 100.00 apple 5,507,035.38 0.00
3. SCHOLZ & FRIENDS International GmbH, Hamburg 2) 2. 100.00 apple 25,564.95 0.00
4. SCHOLZ & FRIENDS Hamburg GmbH, Hamburg 2) 2. 100.00 apple 2,626,448.02 0.00
5. SCHOLZ & FRIENDS NeuMarkt GmbH, Hamburg 2) 2. 100.00 apple 51,129.19 0.00
6. SCHOLZ & FRIENDS Berlin GmbH, Berlin 2) 2. 100.00 apple 5,220,869.31 0.00
7. Appel Grafik Berlin GmbH, Berlin 6. 51.00 apple 427,921.97 266,837.42
8. SCHOLZ & FRIENDS Brand Affairs, Hamburg
(formerly CULTNET AG)
2. 100.00 apple (452,501.31) (17,999.66)
9. deepblue networks AG, Hamburg 3) 1./2. 49.00 apple 1,036,417.73 122,302.98
10. SCHOLZ & FRIENDS Agenda GmbH, Berlin
(formerly SCHOLZ & FRIENDS Consulting AG)
6. 100.00 apple 169,773.99 302,166.37
11. Metagate GmbH, Hamburg 2) 2. 100.00 apple 51,129.19 0.00
12. United Visions GmbH, Berlin 1. 100.00 apple 619,965.03 (994,072.28)
13. Live Line Entertainment GmbH, Berlin 1) 12. 100.00 apple 894,662.40 0.00
14. Factual Films GmbH (formerly UNITED VISIONS TV
und Filmproduktionsgesellschaft mbH), Berlin
12. 100.00 apple 1,031,981.86 (40,045.15)
15. UV Interactive Entertainment GmbH, Berlin 12. 100.00 apple (2,154,566.18) (209,674.38)
16. UV Interactive Service GmbH, Berlin 15. 100.00 apple (27,882.05) (5,759.06)
17. Plato GmbH, Berlin 6. 84.00 apple 321,277.38 296,277.38
18. Light Monuments GmbH, Berlin 2. 100.00 apple (405,070.42) (430,070.42)
19. Mar.s Communications GmbH, Munich 2. 100.00 apple 48,280.78 23,280.78
20. COUCH POTATOES Verwaltungs GmbH, Hamburg 1. 51.00 apple 25,000.00 –
21. COUCH POTATOES Fernsehproduktions GmbH, Cologne 1. 51.00 apple 737,050.47 687,050.20
22. SCHOLZ & FRIENDS Athens S.P. Llc., Athens/Greece 2. 100.00 apple 181,000.00 (50,000.00)
23. SCHOLZ & FRIENDS Antwerp S.A./N.V., Antwerp/Belgium 2./3. 100.00 apple (80,000.00) 96,000.00
24. SCHOLZ & FRIENDS Budapest Kft., Budapest/Hungary 2. 100.00 HUF (86,906,000.00) (70,940,000.00)
25. SCHOLZ & FRIENDS London Ltd., London/Great Britain 2. 100.00 GBP (5,074,000.00) (1,499,000.00)
26. SCHOLZ & FRIENDS Madrid S.A.L., Madrid/Spain 2. 70.00 apple (810,000.00) (34,000.00)
27. SCHOLZ & FRIENDS Milano S.r.l., Milan, Rome/Italy 2. 100.00 apple 24,842.00 0.00
28. SCHOLZ & FRIENDS Paris S.A.R.L., Paris/France 2. 100.00 apple (864,000.00) (427,000.00)
29. SCHOLZ & FRIENDS Praha s.r.o., Prague/Czech Republic 2. 100.00 CZK 7,068,000.00 94,000.00
30. SCHOLZ & FRIENDS Singapore Pte. Ltd., Singapore/Singapore 2. 100.00 S$ 52,000.00 (10,000.00)
31. SCHOLZ & FRIENDS Warszawa Sp.z.o.o., Warsaw/Poland 2. 100.00 PLZ 3,658,000.00 1,114,000.00
32. SCHOLZ & FRIENDS Wien Ges.m.b.H., Vienna/Austria 2. 100.00 apple 567,000.00 32,000.00
33. DDB (Ukraine) Limited, Nikosia/Cyprus 2. 30.00 C-Pound 10,000.00 –
34. SCHOLZ & FRIENDS Kyiv, Kiev/Ukraine 2. 30.00 US$ 38,711.00 291,616.03
35. Immobilienfonds Rosenthaler Weg 8 GbR, Berlin 1. 1.32 apple 4,023,867.11 –
36. Lentz Entertainment GmbH, Berlin (in insolvency proceedings) 1. 37.00 apple – –
37. Partner für Berlin Gesellschaft für Hauptstadt-
Marketing mbH, Berlin
1. 0.22 apple – –
1) SCHOLZ & FRIENDS AG concluded profit and loss transfer agreements with these shareholdings.
2) SCHOLZ & FRIENDS Group GmbH concluded profit and loss transfer agreements with these shareholdings.
3) SCHOLZ & FRIENDS Group GmbH has a 30% stake and SCHOLZ & FRIENDS AG a 19% stake in deepblue networks AG.
119 l Annual Financial Report

Summary of Fixed Assets (HGB)
(Gross figures)
Acquisition and production costs
Balance brought
forward to Reclassi- As of
apple 1 Jan. 2002 Additions fications Disposals 31 Dec. 2002
I Intangible assets
1 Concessions, industrial and similar rights
and assets and licences in such rights
and assets
26,968.50 46,253.34 0.00 0.00 73,221.84
2 Payments on account on software 0.00 61,754.00 0.00 0.00 61,754.00
26,968.50 108,007.34 0.00 0.00 134,975.84
II Tangible assets
1 Factory and office equipment 87,699.93 43,736.70 0.00 0.00 131,436.63
2 Fixtures and reconstructions 0.00 140,601.29 246,663.22 0.00 387,264.51
3 Payments on account 246,663.22 0.00 (246,663.22) 0.00 0.00
334,363.15 184,337.99 0.00 0.00 518,701.14
III Financial assets
1 Shares in affiliated enterprises 30,918,644.46 777,718.46 0.00 0.00 31,696,362.92
2 Participations 428,223.23 148,911.25 0.00 0.00 577,134.48
3 Reinsurance claims 7,012.36 768.35 0.00 0.00 7,780.71
31,353,880.05 927,398.06 0.00 0.00 32,281,278.11
31,715,211.70 1,219,743.39 0.00 0.00 32,934,955.09
120 l Annual Financial Report

Accumulated depreciation Net book value
Balance brought
forward to Depreciation As of As of As of
1 Jan. 2002 of the period Disposals 31 Dec. 2002 31 Dec. 2002 31 Dec. 2001
1,604.91 21,837.01 0.00 23,441.92 49,779.92 25,363.59
0.00 0.00 0.00 0.00 61,754.00 0.00
1,604.91 21,837.01 0.00 23,441.92 111,533.92 25,363.59
18,623.66 13,875.24 0.00 32,498.90 98,937.73 69,076.27
0.00 39,719.38 0.00 39,719.38 347,545.13 0.00
0.00 0.00 0.00 0.00 0.00 246,663.22
18,623.66 53,594.62 0.00 72,218.28 446,482.86 315,739.49
4,445,350.08 0.00 0.00 4,445,350.08 27,251,012.84 26,473,294.38
369,999.49 0.00 0.00 369,999.49 207,134.99 58,223.74
0.00 0.00 0.00 0.00 7,780.71 7,012.36
4,815,349.57 0.00 0.00 4,815,349.57 27,465,928.54 26,538,530.48
4,835,578.14 75,431.63 0.00 4,911,009.77 28,023,945.32 26,879,633.56
121 l Annual Financial Report

Notes
“How do I explain it to my neighbour?”
This and other questions
posed by potential Mercedes-Benz
customers in East Germany are
answered by Scholz & Friends
Berlin with emotional and rational
argumentation.
What could one possibly advertise
with an oversized air freshener?
The roomy cabin of the Mercedes-
Benz Actros. A dialogue marketing
idea by Scholz & Friends Berlin,
awarded with an ADC Silver in
Germany.
122 l Annual Financial Report
I General information
The annual accounts for the 2002 fiscal year have been drawn up in accordance
with the applicable regulations for companies limited by shares stipulated in the
German Commercial Code (HGB), as well as the applicable conditions of the German
Stock Corporation Act (AktG).
The legally applicable regulations for the layout and organisation of accounts, as
specified in sections 266 and 275 of the German Commercial Code (HGB), have been
observed. The type-of-expenditure format (section 275 subsection 2, HGB) has been
observed when drawing up the Profit and Loss Account.
The SCHOLZ & FRIENDS AG General Meeting of 4 July 2002 approved the profit
and loss transfer agreement completed between SCHOLZ & FRIENDS AG and SCHOLZ &
FRIENDS Group GmbH in Hamburg on 24 May 2002. This agreement has a retroactive
effect to 1 January 2002.
II Accounting methods and valuation principles
Intangible assets and tangible assets are shown on the balance sheet at acquisition
cost less scheduled linear depreciation. Unscheduled depreciation was carried out in
cases of permanent diminution in value.
Any additions to movable assets are subject to pro rata temporis depreciation on
a linear basis. The company does not make use of the voting rights granted in section 6
subsection 2 of the German Income Tax Law (EStG).
Financial assets are evaluated at acquisition cost. In the event of anticipated permanent
diminution in value, these assets are made the subject of unscheduled depreciation.
Receivables and other assets are evaluated at acquisition cost or at a lower ascribed value
in accordance with section 253 subsection 3 of the German Commercial Code (HGB).
Accruals for pensions are evaluated at the value of the individual asset as part of
the enterprise in accordance with section 6a of the German Income Tax Act (EStG),
which is calculated according to established actuarial principles on the basis of the
applicable fiscal legislation with an interest rate of 6%.
When forming accruals, all recognisable risks and contingent liabilities are taken
into account to an appropriate and sufficient extent. Accruals are formed in the amount
of the total sum that is necessary on the basis of a reasonable commercial assessment.
Liabilities are evaluated at the amount of repayment. Foreign-currency liabilities
are evaluated on the basis of the selling rate on the date on which they arose or, if
higher, the selling rate on the date of the balance sheet.
III Notes to the Balance Sheet
a Fixed assets
The development of the fixed assets can be seen in the enclosed Summary of Fixed
Assets (see page 120). The shareholdings shown under financial assets are presented in
a separate section (see page 119).

Receivables and other assets
All receivables and other assets are due within one year.
Receivables from affiliated companies includes loans (Tapple 722), receivables from
the cash management system (Tapple 6,556), receivables from profit and loss transfer
agreements (Tapple 8,142) and receivables from ongoing set-off transactions (Tapple 737).
Receivables from enterprises in which the company has a participating interest
includes receivables from ongoing business transactions.
The Orchestra of Ideas for Hapag-Lloyd Express
Full view on page 38
Bringing a fresh, unconventional
presence to the travelling public –
right at the airport.
The new airline’s first flight was
from Cologne to Berlin. The event
was supported by Scholz & Friends
Agenda.
Objective: Build up and increase brand awareness and
likeability; communicate the Internet address; generate
bookings.
Conducting idea: Hapag-Lloyd Express cites a popular
means of transportation: Flying with HLX is as easy and
affordable as taking a taxi.
Tagline: Fly for the price of a taxi
Results: Best-known low-cost airline in Germany (53%)*;
900,000 bookings in the first six months; over 75,000
registered newsletter subscribers; the Internet address is
directly entered by 90% of users.
*“Reisetrends 2003” stern-Trendprofile
Promotions at the pub: taking the
airborne taxi can cost less than
some evening’s beers.
Present at the special occasion:
Wolfgang Kurth of HLX, Michael
Frenzel of TUI and the actress,
Mariella Ahrens.
Fly for the price of a taxi: a natural
fit on taxis in Berlin, Hamburg
and Cologne.
Subway trains convey the message
to residents of Berlin and Cologne.
Successfully preparing the new
airline for take-off. With a clear
look and a bold campaign to whip
up enthusiasm for budget flights,
centred around the tagline
“Fly for the price of a taxi”.
Calling all Italy lovers – promotional
pizza boxes spread the word
of HLX’s Italian destinations.
123 l Annual Financial Report

In this image campaign, Scholz &
Friends Antwerp shows how one
can quickly find natural pleasures:
with a cigarette from Bastos
Classic.
124 l Annual Financial Report
Other assets primarily includes receivables from the tax authorities (Tapple 473).
Credits with banks and financial institutions are investments with short-term
availability.
c Equity
The subscribed capital on 31 December 2002 was Tapple 21,460 and is divided into
21,460,000 no par bearer shares, each with a proportional value of the share capital of
apple 1.00.
The capital reserves are Tapple 29,541.
The balance sheet deficit developed as follows:
Tapple
Status 1 January 2002 (12,584)
Net annual income 2002 2,124
Status 31 December 2002 (10,460)
On 31 December 2002 the conditional capital was apple 67,500.00, which was divided
into 67,500 individual share certificates. In accordance with section 192 subsection 2
no. 3 of the German Stock Corporation Act (AktG), the purpose of the conditional
capital is to safeguard the subscription rights granted to members of the Board of
Directors, to employees of the company and to members of affiliated companies
(members of the management boards and other employees of affiliated companies).
The only parties entitled to exercise share options on the aforementioned shares are
those parties that were formerly granted subscription rights on the basis of the stock
option plan approved by the General Meeting of United Visions Entertainment AG on
30 May 2000. These options will expire on 30 May 2006.
With the prior consent of the Supervisory Board, the Board of Directors is
authorised to increase the share capital once or more than once before 1 June 2006 by
up to apple 8,500,000.00 through the issue of new no par bearer shares in return for cash
payments or payment in kind (authorised capital). With the prior consent of the
Supervisory Board, the Board of Directors is also authorised to determine the exact
conditions for the issue of new shares.
Furthermore, with the prior consent of the Supervisory Board, the Board of
Directors is authorised to preclude the subscription rights of existing shareholders in
the following cases:
•where fractional amounts arise;
•where this is necessary in order to give holders of convertible bonds a subscription
right equivalent to that which they would have as shareholders after exercise of their
conversion rights;
•where a share capital increase is used for the issue of shares to pay for the acquisition
of an interest in another company;
•where a share capital increase is used for the issue of shares to pay for the acquisition
of other companies or parts of companies;
•where shares are issued for the purpose of distribution to employees of the company
as staff shares;
•where a share capital increase against cash subscription does not exceed 10% of the
total nominal share capital and the issue price of the new shares does not significantly
fall below the current stock market quotation;

•where the share issue is intended for placement on a German or foreign stock exchange.
The Board of Directors made a decision on 19 December 2002, which was approved
by the Supervisory Board on 20 December 2002, to take advantage of the available
authorised capital in order to increase the share capital of SCHOLZ & FRIENDS AG by
apple 486,818.00 in return for contributions in kind in the form of a shareholding in the
company COUCH POTATOES Fernsehproduktions GmbH in Cologne with a nominal
value of apple 5,100.00. The increase in the share capital was brought about through the
issue of 486,818 new bearer shares in SCHOLZ & FRIENDS AG, with each share having
an arithmetical proportion of the share capital of apple 1.00.
The new shares entitle the bearers to participate in the profits for the 2002 fiscal
year. In the event that the share capital increase is first registered after the decision has
been made on the disposition of the profits for the 2002 fiscal year, the bearers of the
new shares will be entitled to participate in the profits for the year in which they are
issued. Only the contributing shareholders will be entitled to subscribe for the 486,818
new shares in SCHOLZ & FRIENDS AG. The subscription rights of the other shareholders
have been expressly precluded with regard to these 486, 818 shares.
Because the issue of these new shares has still not been registered in the commercial
register, this has been posted on the balance sheet as a contribution made for the
implementation of the approved share capital increase.
d Accruals
The company has accruals for the pension of one member of the Board of Directors
of Tapple 22. There is also employer’s pension liability insurance of Tapple 8, the redemption
value of which is posted under fixed assets. The employer’s pension liability insurance
is fully paid-up. In accordance with an agreement made on 11 July 2000, the party
entitled to the pension has expressly renounced his entitlement to the continued
accrual of company pension. The claim to the pension accrued up to 31 July 2000 is
not affected by this agreement.
Tax accruals include accruals for possible non-deductible input tax for the costs
incurred for flotation on the stock exchange (Tapple 150), as well as for deferred taxes
(Tapple 35) attributable to the fact that the fiscal treatment of the participation in the
company Immobilienfonds Rosenthaler Weg 8 GbR differs from that on the commercial
balance sheet.
Other accruals can be broken down into accruals for the impending repayment of
investment grants (Tapple 836), accruals for legal and consultancy fees (Tapple 338), accruals
for a possible financial burden as a result of a guarantee to the benefit of United Visions
Media Services GmbH, Berlin (Tapple 54), and accruals for outstanding holidays (Tapple 60),
outstanding wages (Tapple 96) and other outstanding invoices (Tapple 48).
e Liabilities
All liabilities have a residual term of less than one year.
Liabilities are not secured by liens or similar rights.
Liabilities from affiliated companies includes liabilities from profit and loss transfer
agreements (Tapple 1,354) and liabilities from ongoing set-off transactions (Tapple 485).
Sooner or later, those who want to
concentrate on the basics will find
the new cigarette brand Red and
Blue by Bastos. A campaign by
Scholz & Friends Antwerp.
125 l Annual Financial Report

Nothing could be clearer: a simple
transformation of the wheelchairuser
symbol publicises automobiles
that are suitable for the disabled.
Scholz & Friends Berlin.
126 l Annual Financial Report
IV Notes to the Profit and Loss Account
Net sales primarily includes the on-charging of services to affiliated companies
(Tapple 1,041). In the previous year this was shown under other operating income (Tapple 246).
The previous year’s figures have been adjusted accordingly.
Other operating income includes income from outside the accounting period
(Tapple 31) arising from the reversal of accruals.
Cost of purchased services primarily includes the expense incurred as a result of
the purchase of services from affiliated companies (Tapple 205). In the previous year this
was shown under other operating income (Tapple 124). The previous year’s figures have
been adjusted accordingly.
Other operating expenses primarily includes the costs incurred as a result of the
on-charging of the staff costs of affiliated companies (Tapple 606), other entertainment
expenses (Tapple 442) and legal and consultancy fees (Tapple 382).
The income from the profit and loss transfer agreement only includes income from
the profit and loss transfer agreement completed with the SCHOLZ & FRIENDS Group
GmbH, Hamburg (Tapple 8,142).
Expenses from loss assumptions is a result of the profit and loss transfer agreement
with Live Line Entertainment GmbH, Berlin (Tapple 1,354).
Extraordinary expenses primarily includes allocations to individual value allowances
on receivables from affiliated companies (Tapple 1,985), in particular from UV Interactive
Entertainment GmbH, Berlin.
V Other information
a Contingencies
SCHOLZ & FRIENDS AG owns a shareholding in the company Immobilienfonds
Rosenthaler Weg 8 GbR. In addition to the joint property, SCHOLZ & FRIENDS AG is
also proportionally liable, based on the percentage of shares held, with its other assets.
The company Penk Pannier Beteiligungsgesellschaft mbH has indemnified SCHOLZ &
FRIENDS AG against these risks.
Furthermore, the company is also jointly and severally liable for a sum of up to
Tapple 51 as a result of obligations from leasing contracts completed by the company
Lentz Entertainment GmbH.
b Other financial liabilities
On 31 December 2002 there were the following financial liabilities from rental and
leasing contracts:
Tapple 2003 2004 2005 2006 ≥ 2007 Total
459 280 276 197 414 1,626
c Declaration of conformity with the Corporate Governance Code
SCHOLZ & FRIENDS AG has issued the declaration stipulated in section 161 of the
German Stock Corporation Act (AktG) and provided the shareholders with access to
these documents through publication on the company’s Web site (www.s-f.com).

d Organs of the company
The Supervisory Board is composed as follows:
Member of Positions held in other statutory supervisory boards and
Name Supervisory Board Main profession control boards in the sense of section 125 AktG
Peter Martin Schöning since 28 August 2001 Advertising None
Chairman expert
Dr. Rüdiger Rönck until 3 July 2002 Lawyer bbv AG Consultants for Finance and Technology (Chairman),
BRANDERS Marken AG, Millennium Venture Capital AG, travel
james.com AG, Venture Werk AG, Xx-well.com AG (Chairman)
Andrew Boland since 28 August 2001 Businessman (only positions within the Cordiant Group)
Prof. Dr. Ronald Frohne since 23 November 2001 Lawyer and 8SensBiognostic AG, Agicoa Association (Member of the
chartered Executive Board), CAB (Member of the Board), Eckart & Ziegler
accountant Medizintechnik AG, GE Rückversicherungs-Beteiligungs AG, Filmboard
Berlin-Brandenburg GmbH, Kirch Stiftung (Member of the
Board of Trustees), McDonald’s Deutschland Inc. (Member of the
Board), TAG Immobilien- und Beteiligungs AG, Tellux-Beteili
gungs GmbH, Würzburger Versicherungs AG (Chairman)
Michael Bungey since 23 November 2001 Businessman (only positions within the Cordiant Group)
Ekkehard Streletzki since 23 November 2001 Graduate engineer None
Klaus Droste since 4 July 2002 Investment banker None
In the period of the report the Supervisory Board received remuneration of Tapple 56
in total. None of the members of the Supervisory Board were granted loans by the
company in the 2002 fiscal year.
Since the merger came into effect, Mr Ekkehard Streletzki holds 43,916 shares in
the company. Furthermore, Mr Streletzki also owns 50% of the company Media Port
Beteiligungs- und Verwaltungs GmbH, which holds 1,011,185 shares in the company
since the merger came into effect. Altogether this equates to an equity interest of about
2.55%. The other members of the Supervisory Board have no direct or indirect shareholding
in the company. Mr Peter Martin Schöning has an option to buy 214,500
shares in the company from BATES Deutschland Holding GmbH.
The Board of Directors is composed as follows:
•Mr Wolfgang Boyé, businessman
•Mr Thomas Heilmann, advertising expert (Chairman)
•Mr Tewe Pannier, journalist (until 31 December 2002)
•Mr Christian Tiedemann, businessman
•Mr Sebastian Turner, advertising expert (Chairman)
The total amount of wages paid to the members of the Board of Directors in the
period of the report amounted to Tapple 1,447 plus 5,000 subscription rights to shares in
the company as part of the company’s stock option plan.
For one member of the Board of Directors there is an existing accrual for pension
of Tapple 22.
On 31 December 2002 the members of the Board of Directors directly held a
total of 130,623 shares in the company. The company Millennium Venture Capital AG,
in which Thomas Heilmann and Sebastian Turner hold 50% each, holds a further
1,883,000 shares in the company. Christian Tiedemann has an option to purchase
214,599 shares in the company from BATES Deutschland Holding GmbH. No loans
have been granted to any members of the Board of Directors, nor any related parties,
by the company or by any of its subsidiary companies.
A special full-size sticker on the
Mercedes-Benz Atego reveals a
view of the interior – advertising
the advantages of the vehicle’s
superior brake system. Scholz &
Friends Berlin.
127 l Annual Financial Report

A graffiti artist has written “It
doesn’t matter who is president.”
An opinion shared by Magyar
Hírlap journalists – who are only
interested in the facts. A campaign
by Scholz & Friends Budapest.
128 l Annual Financial Report
e Employees
In the period of the report SCHOLZ & FRIENDS AG employed an average of 5 fulltime
employees.
f Group companies
SCHOLZ & FRIENDS AG is the parent company of various companies both within
Germany and abroad. The company itself is an indirect subsidiary company of the
Cordiant Communications Group plc. SCHOLZ & FRIENDS AG is included, along with all
of its subsidiary companies, in the Cordiant Consolidated Financial Statement. The place
of disclosure of the original English-language version of this Consolidated Financial Statement
is: Companies Registration Office, Crown Way, Maindy, Cardiff/Great Britain.
The company makes use of the exemption granted in section 292a of the German Commercial
Code (HGB), as the Consolidated Financial Statement of SCHOLZ & FRIENDS
AG is drawn up in accordance with the International Accounting Standards (IAS).
g Proposal for the disposition of profits
With the consent of the Supervisory Board, the Board of Directors proposes to the
General Meeting that the balance sheet deficit of apple 10,459,995.99 is carried forward
to a new account.
h Shareholders of SCHOLZ & FRIENDS AG
On 31 December 2002 the following parties had shareholdings in SCHOLZ &
FRIENDS AG:
Shareholder Number %
1 BATES Deutschland Holding GmbH 16,589,000 77.30
2 Millennium Venture Capital AG 1,883,000 8.78
3 Media Port Beteiligungs- und Verwaltungs GmbH 1,011,185 4.71
4 Penk Pannier Beteiligungsgesellschaft mbH 551,960 2.57
5 Thomas Heilmann 8,400 0.04
6 Sebastian Turner 8,400 0.04
7 Tewe Pannier 37,623 0.18
8 Wolfgang Boyé 76,200 0.36
9 Ekkehard Streletzki 43,916 0.20
10 Free Float 1,250,316 5.82
Total 21,460,000 100.00
1 BATES Deutschland Holding GmbH is a 100% subsidiary company of Cordiant Holdings GmbH, Frankfurt/
Main, which is 100% owned by the Cordiant Communications Group plc.
2 Thomas Heilmann and Sebastian Turner, who are both members of the SCHOLZ & FRIENDS AG Board of
Directors, each own 50% of Millennium Venture Capital AG.
3 Ekkehard Streletzki, who is a member of the SCHOLZ & FRIENDS AG Supervisory Board, indirectly holds
50% of the shares of Media Port Beteiligungs- und Verwaltungs GmbH.
4 Penk Pannier Beteiligungsgesellschaft mbH is jointly owned by Tewe Pannier and Wolfgang Penk, with each
holding 50% of the shares. Mr Pannier resigned from the Board of Directors on 31 December 2002.
5–8Thomas Heilmann, Sebastian Turner, Wolfgang Boyé and Tewe Pannier (until 31 December 2002) are
members of the Board of Directors of SCHOLZ & FRIENDS AG.
9 Ekkehard Streletzki is a member of the Supervisory Board of SCHOLZ & FRIENDS AG.
Berlin, 27 February 2003
The Board of Directors
Wolfgang Boyé Thomas Heilmann Christian Tiedemann Sebastian Turner

Auditors’ Report
We have audited the annual financial statements, together with the bookkeeping
system, and the management report of the SCHOLZ & FRIENDS AG, Berlin, for the
fiscal year from 1 January to 31 December 2002. The maintenance of the books and
records and the preparation of the annual financial statements and management report
in accordance with German Commercial Law are the responsibility of the company’s
management. Our responsibility is to express an opinion on the annual financial
statements, together with the bookkeeping system, and the management report based
on our audit.
We conducted our audit of the annual financial statements in accordance with
section 317 HGB [“Handelsgesetzbuch”: “German Commercial Code”] and German
generally accepted standards for the audit of financial statements promulgated by the
Institut der Wirtschaftsprüfer in Deutschland (IDW). Those standards 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 annual
financial statements in accordance with [German] principles of proper accounting and
in the management report are detected with reasonable assurance. Knowledge of the
business activities and the economic and legal environment of the company and
evaluations of possible misstatements are taken into account in the determination of
audit procedures. The effectiveness of the accounting-related internal control system
and the evidence supporting the disclosures in the books and records, the annual
financial statements and the management report are examined primarily on a test
basis within the framework of the audit. The audit includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating
the overall presentation of the annual financial statements and 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, the annual financial statements give a true and fair view of the net
assets, financial position and results of operations of the SCHOLZ & FRIENDS AG in
accordance with [German] principles of proper accounting. On the whole the management
report provides a suitable understanding of the company’s position and suitably
presents the risks of future development.
Hamburg, 28 February 2003
KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft
Ditting Gries
Wirtschaftsprüfer Wirtschaftsprüfer
In case of publication or transmission of the financial statements and/or the management report in a version
different to the version confirmed by us (including translations into other languages), in so far as our audit opinion
is quoted or our review referred to, a new statement is to be obtained from us. Please refer to section 328 HGB.
Die Zeit is chosen as the
world’s best-designed newspaper.
Scholz & Friends Berlin congratulates
with an advertisement that
gives viewers a fresh look at its
impeccable design.
129 l Annual Financial Report

The Orchestra of Ideas in Berlin and Hamburg for “Dresden leuchtet wieder” (Dresden shines again) and “Ich helfe dir” (I help you!)
(examples: see page 141). From left to right, top row: Andreas Heine (event and PR), Stefan Setzkorn (advertising), Sven Sochaczewsky
(advertising), Klaus Dittko (PR); bottom row: Ulrike Peckskamp (programming), Raphael Brinkert (advertising), Gert Hof (event),
Thomas Heilmann (PR); not shown: Sebastian Turner (advertising), Karin von Hülsen (PR), Asteris Koutoulas (event), Christian Schmuck

(promotion), Evelyn Simon (PR), Dominik Thesing (PR), Cornelie Kunkat (PR), Pedro Sydow (advertising), Stefanie Zimmermann
(advertising), Stephanie Völzow (advertising), Daniel Richter (advertising), Ulrike Eßlinger (promotion), Simone Düker (advertising),
Jana Ulrich (PR), Stefanie Frey (PR), Marc Schwieger (advertising), Hendrik Schulze (advertising).

Directors and Supervisory Board
132 l Directors and Supervisory Board
Wolfgang Boyé
Wolfgang Boyé (33) is currently a member of the Board of Directors and in charge
of the international activities of the Scholz & Friends Group.
Boyé was born in Munich in 1969. He studied business management at University
of St. Gallen and ESSEC (Paris). After the completion of his studies he was employed
at The Boston Consulting Group in Munich, Moscow and Düsseldorf, working his way
up to the position of project manager. Before the merger came into effect he was
employed at United Visions and was responsible for the areas of Production and
Finance & Controlling (investor relations, personnel, controlling, finance/accounting)
as well as for the game show project K1010. From 2000 to 2001 he was employed at
United Visions as Chief Financial Officer. He was responsible for the launch of United
Visions Entertainment AG on the stock exchange in the year 2000.
Thomas Heilmann, CEO
Thomas Heilmann, 38, is currently Chairman of the Board at Scholz & Friends AG
and responsible in particular for the areas of strategy and expansion of the group.
Prior to this position, he spent over ten years as a managing partner of Scholz & Friends
Berlin in collaboration with Sebastian Turner. He is visiting professor at the Berlin
University of the Arts.
Heilmann was born in Dortmund in 1964. He studied jurisprudence in Bonn and
Munich whilst simultaneously working as a freelance journalist for, among others, the
Frankfurter Allgemeine Zeitung and Tagesthemen. The qualified lawyer was also
employed at the management consultancy company McKinsey in Munich and in the
marketing department of Lufthansa New York. Together with Sebastian Turner, he was
voted the “Agent of the Year 1999” by the magazine new business.
Tewe Pannier
Tewe Pannier, 42, was a member of the Board of Directors of Scholz & Friends AG
and responsible for the group’s entertainment division through the end of 2002. In 2003
he founded Mitte-Media GmbH, and since then has been running the firm as producer
and managing director.
Pannier was born in Nebel on the island Amrum in 1961. He studied journalism
and was employed initially as the Bonn correspondent for Bild-Zeitung. He then
changed to television and worked as managing director and producer for Frank Elstner.
After other positions as editor in chief at Burda TV and in the editor in chief’s office of
SAT.1, he was employed in 1995 as a producer at Live Line. Before the merger came
into effect he was employed at United Visions as head of the organisational department
for content management. The area included marketing/PR, interactive entertainment,
talent management and non-fiction.

Christian Tiedemann, CFO
Christian Tiedemann, 37, is the company’s Chief Financial Officer and is head of
the areas finance and controlling as well as the IT and legal departments. Prior to this,
he was the chief financial officer of the Scholz & Friends Group.
Tiedemann was born in Gehrden near Hanover in 1966. He was trained as an industrial
business executive at Philips GmbH in Hamburg between the years 1985 and 1987
and worked there until 1989 in the areas of controlling and sales coordination. After
spending a period working in controlling at Feldmuehle UK, London, Mr Tiedemann
started studying for his diploma in business management in 1993. Upon completing
his study he was employed in the International Marketing & Controlling department at
the British American Tobacco cigarette factory. Three years later he was employed by
A&M management consultancy company and advertising agency as managing director
in charge of finance and controlling. He has been employed at Scholz & Friends since
1998 and is managing director (CFO) of Scholz & Friends Group GmbH, in charge of
the areas finance and controlling.
Sebastian Turner, CEO
Sebastian Turner, 36, is currently Chairman of the Board at Scholz & Friends AG,
responsible for the creative product of the agency and head of the International Creative
Committee (ICC). He is also the management board spokesman of the Art Directors
Club and is a visiting professor at the Berlin University of the Arts.
Turner was born in Clausthal-Zellerfeld in 1966. He founded MediumMagazin,
which has since become the leading magazine for journalists, back in 1985. He obtained
a Master of Arts degree from Duke University (USA), in 1990 in Political Science,
Business Administration and Economic History. Turner is one of the most celebrated
creative minds in Germany and has won many awards. Together with Thomas Heilmann,
he was voted the “Agent of the Year 1999” by the magazine new business. He was the
first German citizen to be appointed Chairman of the Clio Jury in New York.
Peter Martin Schöning, Chairman of the Supervisory Board
Peter Martin Schöning, 57, is Chairman of the Supervisory Board of Scholz &
Friends AG.
Born in 1945 in Bad Elster, Schöning graduated from Hamburg’s Advertising Academy
and then went on to work for various advertising agencies in Munich, Paris and Hamburg.
His last post in Hamburg was at Lintas. In 1984 Schöning joined Scholz & Friends as a
managing director and became managing partner three years later. In 1993 he was
appointed CEO of Scholz & Friends Hamburg and in 1995 Chairman/CEO of Scholz &
Friends Group, taking responsibility for all the group’s domestic and international offices.
He is Executive Board Director of Cordiant Communications Group plc., the majority
shareholder of Scholz & Friends, since 1997. After the flotation of Scholz & Friends in
2001, he also became Chairman of the Supervisory Board of the newly listed company.
He was named “Ad Man of the Year” in 1996 by the German trade magazine
Horizont.
Everyday objects reveal their true
faces with the help of Krass glasses.
An eye-catching print campaign by
Scholz & Friends Berlin.
133 l Directors and Supervisory Board

Glossary A to M
Above-the-line communication
This term comprises all classic advertising media which
pay media commission to advertising agencies buying
space or time from them. This includes print advertisements,
billboards, TV commercials and radio commercials.
Antonym: | Below-the-line communication
Advertising
Process by which an enterprise seeks to shift consumer
attitudes and if possible induce them to change their
behaviour using a range of | Marketing communication
tools.
Advertising awareness
Degree to which a campaign has managed to get into
the mind of consumers. Also serves as an indicator of
advertising pressure.
Advertising message
The underlying message of | Advertising. An advertising
message should be relevant, unique and credible. It
needs to promote the | Benefit of an offer and substantiate
it. It is essential to focus on a benefit that will
get the attention of a given target group.
Below-the-line communication
Below-the-line communication comprises all advertising
media which do not pay media commission to advertising
agencies buying space or time from them. In practice
the term usually refers to | Sponsoring, | Promotion
and | Event marketing.
Antonym: | Above-the-line communication
Benefit
A consumer’s assessment of the ability of a product or a
| Brand to satisfy his or her individual needs. A distinction
is made between emotional and rational benefit.
Brand
An aid to orientation in markets. A network of emotions
and associations linked in the minds of consumers to a
branded product. A brand comes alive in the hearts and
minds of consumers.
134 l Glossary
Brand awareness
Percentage of people in a | Target group who know a
given brand. A distinction is made between aided and
unaided brand awareness.
Brand management
The systematic process of building and maintaining a
brand and managing the brand/consumer relation.
A distinction is made between operative and strategic
brand management. Strategic brand management
defines the fundamental structure of a brand and its
position in the market | Positioning. Operative brand
management involves the actual implementation of
policies with regard to marketing communication,
products, prices and distribution.
Synonym: Branding
Brand profile
The desired and, if possible, distinct brand image that
distinguishes the brand from its competitors.
Brand strategy
The brand strategy charts a course of action and defines
an overall goal for the brand. This goal is binding for all
operative activities.
Communication policy
The policy applied by a company to all information
targeted on a given sales market which aims to influence
the behaviour of existing and potential clients.
Company brand
The name of a company provides the name for the
| Brand. In some cases the company brand is used
discreetly to indicate the sender of a branded message
(e.g. Nestlé, Henkel). In others, the company brand is
used as a dominant umbrella brand (e.g. Allianz,
Dr. Oetker).
Cross-selling
Cross-selling is the process of selling additional or
complementary products or services to clients who
already use part of one’s product range.

Dialogue marketing
A form of | Direct marketing that aims to collect
information on clients and enter into a genuinely twoway
dialogue with your | Target group.
| One-to-one marketing
Direct marketing
All those marketing activities that enable a business to
make direct contact with consumers or potential clients.
| Dialogue marketing
Entertainment
Formats such as TV shows, sitcoms, etc.
Event
In terms of marketing an event is defined as an occurrence
capable of arousing people’s interest or emotions on a
large scale. An event can be transmitted live or at a later
time via TV or other media.
Event marketing
The staging and management of such events for
marketing purposes.
Fiction
TV formats of a predominantly entertaining (noninformative)
character.
Antonym: | Non-fiction
Final artwork
Preparation of artwork for | Lithography and printing.
Full-service agency
Classic advertising agency offering the full range of
services, i.e. creative work, consultancy, media planning
and production.
Image
The entirety of ideas and concepts formed of a product,
product group or a company.
Integrated communication
An approach to corporate communication that aims to
combine different communication disciplines such as
| Public Relations, classic advertising, | Sponsoring,
| Events and | Direct marketing. See also under:
| Orchestrated communication.
Interactive entertainment
Entertainment formats broadcast via interactive media
such as the Internet.
International Creative Committee (ICC)
International body set up by Scholz & Friends, which
evaluates and promotes the quality of creative work.
Investor Relations
Communication aimed at investors, analysts and
financial experts in the media.
Lithography
The process by which films are produced for offset.
Marketing communication activity
The actual implementation of a strategic course of
action devised to solve a clearly defined marketing
communication requirement. Communication activity
is geared to the needs and demands of given | Target
groups and conveys the specifically developed | Advertising
message.
Marketing communication tool
A tool designed to reach and appeal to | Target
groups. In addition to classic advertising this comprises
| Direct marketing, | Sales promotion and | Public
Relations as well as | Sponsoring, | Event marketing,
| Programming and fairs and exhibitions.
135 l Glossary

Glossary M to Z
Merchandising
The sale of merchandise – often under licence and linked
to an | Event – to a wide clientele by utilising a given
| Brand.
Non-fiction
Formats and topics such as sports, cars, travel, etc., that
provide information or are of predominantly documentary
character.
Antonym: | Fiction
One-to-one marketing
A form of | Dialogue marketing that looks at each
client or potential client as an individual segment of the
market and addresses them individually.
The Orchestra of Ideas
Tagline of the Scholz & Friends Group.
Orchestrated communication
The most efficient form of brand communication:
| Integrated communication on the basis of a consistently
applied idea.
Point of sale (POS)
Location where a purchase is made, e.g. supermarkets,
petrol stations, department stores.
Positioning
The process of defining a position for one’s products or
services in the market which is distinctly different from
the competition and promoting it in such a way as to reinforce
the consumer’s favourable perception of it.
Programming
Programming is a form of | Pull communication, in
which | Brands are integrated into existing programme
schedules or new programmes are created around
them.
Promotion
| Sales promotion
136 l Glossary
Public Affairs
Political communication directed predominantly at
opinion leaders and decision-makers in the public
sector.
Public Relations
Systematic development and management of a company’s
or organisation’s relations with the public. Its ultimate
goal is to create a positive image of the company or
organisation in the minds of its suppliers, clients, employees
and shareholders, and to inspire an atmosphere
of mutual trust.
Pull communication
Pull communication places advertising messages of
| Brands within a context that audiences actively seek.
E.g. SKL-Show, Formula 1
Antonym: | Push communication
Push communication
Any form of communication unsolicited by the audience
at which it is directed, e.g. classic advertising.
Antonym: | Pull communication
Sales promotion
| Marketing communication activity, intended to
generate immediate sales.
Sponsoring
Sponsoring of sporting, cultural or social events/institutions.
The sponsor provides funds, know-how or
materials for these causes to gain or maintain an image.
Target group
A clearly defined group of people targeted by advertising.
A target group should be defined not only in
socio-demographic but also in psychological terms and
according to motivational qualities.
Testimonial advertising
A form of advertising that builds up or uses the appeal
of celebrities to convey branded messages.

Tonality
The “tone” or “register” of communication activities.
The tonality needs to possess a distinct, individual
character and be compatible with the brand identity.
Umbrella brand
This unites the complete range of a company’s products
under one unified brand. An umbrella brand does not
necessarily have to be identical with the | Company
brand, e.g. Dr. Oetker, Siemens.
USP (Unique Selling Proposition)
A unique property of a product that can be used to
distinguish a product from its competitors.
The Süddeutsche Zeitung turns its
readers into discoverers. Advertisements
in 17 different Munich
subway stations each tell one part
of a serial by the SZ columnist
Axel Hacke. Scholz & Friends
Berlin.
137 l Glossary

Chronology
Using the tagline “Werden Sie
Augenzeuge” (Be an eyewitness)
along with provocative headlines
and famous protagonists, Scholz &
Friends Berlin helped the TV
station N24 stimulate the public
appetite for up-to-date news and
solid reportage.
138 l Chronology
The Scholz & Friends history
1981 Agency founded in Hamburg with 48 Friends. The German trade magazine
Horizont called it the agency to watch in the coming decade.
1982 Scholz & Friends is ranked one of the most creative agencies in Germany by
trade magazines, a status it has held on to ever since.
1986 Continuous growth leads Scholz & Friends to innovate in the realm of
corporate structure, introducing the family system. Soon this would become an industry
standard.
1987 Scholz & Friends enters the international Cordiant Communications Group,
joining the likes of Bates, Zenith Media, Diamond Ad and Fitch.
1990 After the fall of the Berlin Wall, Scholz & Friends is the first agency to
venture into former East Germany. Starting in Dresden, then onwards to Berlin where
the agency quickly became No.1 in the capital. And it still is.
1995 Scholz & Friends lays the cornerstones of its international network, opening
offices in Athens, Antwerp, Budapest, Madrid, Vienna and Warsaw. Bureaux in
Prague, London, Moscow, Kiev, Milan and Paris follow.
1998 Scholz & Friends Consulting is founded in Berlin, offering strategic advice
for brands prior to communication.
1999 Scholz & Friends NeuMarkt (Hamburg) is established, specialising in the
retail business. Plato Kommunikation, a Scholz & Friends subsidiary in Berlin, opens its
doors for public affairs and political communication.
2000 An independent survey in the German trade magazine werben & verkaufen
reveals that Scholz & Friends achieves the highest levels of client satisfaction in the
industry.
2001 Scholz & Friends merges with the TV production company United Visions
Entertainment and is floated on the Frankfurt Stock Exchange. Contemporaneous,
orchestrated communication is taking on a more and more central position in the
network’s services. The newly founded Scholz & Friends Brand Affairs adds to the
network’s brand-PR expertise.
2002 Scholz & Friends is ranked top creative agency in Germany by the trade
magazine werben & verkaufen. FINANCIAL TIMES DEUTSCHLAND presents the
agency with the IPO Management Award of “Best Newcomer”.
Scholz & Friends Agenda is set up in Berlin as a PR and agenda-setting agency.
Hot on its heels and also in Berlin, Scholz & Friends Sensai and Light Monuments are
founded, offering 3D communication and light/music extravaganzas respectively.
Scholz & Friends Brand Affairs opens branches in Budapest and Beijing. In the
Balkans, offices are opened in Belgrade, Ljubljana and Skopje.
Scholz & Friends boosts its presence in Hamburg with the complete acquisition of
deepblue networks AG, an agency combining expertise in above- and below-the-line
communication with a deep knowledge of digital media.
Klaus Droste is elected to the Supervisory Board at the first AGM of Scholz &
Friends AG. The Board of Directors publishes Corporate Governance Principles and
commits itself to the obligations of the German Corporate Governance Code.

The first Jürgen Scholz Scholarship for Creative Excellence is awarded to three
young creatives from London, Kiev and Hamburg.
With a team of 665 Friends and billings of apple 460 million, Scholz & Friends AG is
Germany’s seventh largest agency group and one of Europe’s top twenty.
2003 Scholz & Friends expands into Switzerland, with Yvonne Hodel on the new
office’s Administrative Board and Coca-Cola AG Schweiz among its clients.
Scholz & Friends classics
“Ist die Katze gesund, freut sich der Mensch” – If the cat’s healthy, the people are happy
Kitekat
“Die Kraft der zwei Herzen” – The power of two hearts
Doppelherz
“Ich rauche gern!” – I love to smoke!
R1
“Test it”
West
“Der Norden taut auf” – The North’s loosening up
Astra Pilsener
“Come together”
Peter Stuyvesant
“Innen gut, außen mit Hut” – It’s good, and it wears a hat
Sierra Tequila
“Heute ein König” – A king for today
König Pilsener
Photo series “Dahinter steckt immer ein kluger Kopf” –
There is always a clever mind behind it
F.A.Z.
“Jede Woche eine neue Welt” – A new experience every week
Tchibo Non Food
“the more you know”
Davidoff Cigarettes
“Deutschland geht T-Online” – Germany’s going T-Online
T-Online
“Ein schönes Leben noch” – Have a nice life
Activest
“Wir können alles. Außer Hochdeutsch.” – We are perfect. If you ignore our accent.
Baden-Württemberg
“Entdecker gesucht” – Keep exploring
Süddeutsche Zeitung
“Fliegen zum Taxipreis” – Fly for the price of a taxi
Hapag-Lloyd Express
Good advertising need not be
expensive. The Deutsches Museum
showed off its collection of classic
cars right where budding mechanics
look most closely: in the classified
sections of daily newspapers. By
Scholz & Friends Berlin.
139 l Chronology

Locations of Scholz & Friends
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140 l Chronology

The Orchestra of Ideas for “Dresden leuchtet wieder” (Dresden shines again) and “Ich helfe dir” (I help you!)
Full view on page 130
Summer 2002: images of the
flooding are beamed around the
world, dominating the media for
an entire week.
Light Monuments, a Scholz &
Friends subsidiary, created a new
media image …
Objective: After the flooding crisis, two things were of
crucial importance. Firstly, collecting donations. Secondly,
boosting tourism and investment once the worst was over.
Conducting idea: On the Internet, victims and donors can
request and offer donations respectively, free of charge. A
major event marked the end of the crisis on an optimistic
note.
Taglines: “Ich helfe dir” (I help you!) (Internet platform)
“Dresden leuchtet wieder” (Dresden shines again) (event)
Results: More than 46,000 donations offered
(approximately 400 per day); free delivery of over 11,000
donations in kind. Over 100 million impressions in Germany
alone thanks to coverage of the Dresden light gala on TV
and in the press both before and after the event; worldwide
transmission by over 400 TV channels with a range
of approximately 500 million people; very good quality of
impressions due to high proportion of serious media
involved and credible reporting of events.
In the print campaign, Scholz &
Friends let those affected speak for
themselves. (“My kids now have to
sleep at the supermarket. At least
it’s dry there.”)
… of Dresden under the direction
of the artist Gert Hof. The
extravaganza of light …
The innovative concept aimed to
make use of the willingness to help
that was seen all around Germany.
… finally drove images of the
flood disaster out of the minds
of tourists and investors.
The Internet-based exchange
system enabled the direct donation
of goods and services for the first
time.
The world-wide media coverage
acted as free advertising for the
newly recovered city of Dresden.
141 l Chronology

Offices
Scholz & Friends AG
In der Lokfabrik
Chausseestraße 8/E, 10115 Berlin, Germany
Tel.: +49-(0)30-59 00 53-0
Fax: +49-(0)30-59 00 53-299
info@s-f.com
Scholz & Friends Agenda
In der Dampfbrotbäckerei
Wöhlertstraße 12/13, 10115 Berlin, Germany
Tel.: +49-(0)30-285 35-500
Fax: +49-(0)30-285 35-584
agenda@s-f.com
Scholz & Friends Berlin
In der Dampfbrotbäckerei
Wöhlertstraße 12/13, 10115 Berlin, Germany
Tel.: +49-(0)30-285 35-300
Fax: +49-(0)30-285 35-599
berlin@s-f.com
Scholz & Friends Brand Affairs
Hanseatic Trade Center
Am Sandtorkai 76, 20457 Hamburg, Germany
Tel.: +49-(0)40-376 81-0
Fax: +49-(0)40-376 81-147
brandaffairs@s-f.com
Scholz & Friends Consulting
In der Dampfbrotbäckerei
Wöhlertstraße 12/13, 10115 Berlin, Germany
Tel.: +49-(0)30-285 35-300
Fax: +49-(0)30-285 35-599
consulting@s-f.com
Scholz & Friends Hamburg
Hanseatic Trade Center
Am Sandtorkai 76, 20457 Hamburg, Germany
Tel.: +49-(0)40-376 81-0
Fax: +49-(0)40-376 81-681
hamburg@s-f.com
Scholz & Friends NeuMarkt
Große Reichenstraße 27, 20457 Hamburg, Germany
Tel.: +49-(0)40-302 12-0
Fax: +49-(0)40-302 12-100
neumarkt@s-f.com
Scholz & Friends Sensai
In der Lokfabrik
Chausseestraße 8/F, 10115 Berlin, Germany
Tel.: +49-(0)30-28 44 97-10
Fax: +49-(0)30-28 44 97-99
sensai@s-f.com
142 l Offices
Couch Potatoes
Am Coloneum 1, 50829 Cologne, Germany
Tel.: +49-(0)221-250 51-00
Fax: +49-(0)221-250 51-01
info@couch-potatoes.de
deepblue networks
Phoenixhof
Schützenstraße 21, 22761 Hamburg, Germany
Tel.: +49-(0)40-28 40 88-0
Fax: +49-(0)40-28 40 88-111
contact@deepblue-networks.com
Factual Films
Linienstraße 214, 10119 Berlin, Germany
Tel.: +49-(0)30-240 86-0
Fax: +49-(0)30-240 86-200
office@united-visions.de
Light Monuments
An den Treptowers 1, 12435 Berlin, Germany
Tel.: +49-(0)30-530 00-20
Fax: +49-(0)30-530 00-215
info@light-monuments.com
Live Line Entertainment
Walluferstraße 3a, 65343 Eltville, Germany
Tel.: +49-(0)61 23 -79 34-0
Fax: +49-(0)61 23 -79 34-24
info@live-line.tv
Plato Kommunikation
Reinhardtstraße 19, 10117 Berlin, Germany
Tel.: +49-(0)30-72 62 67-60
Fax: +49-(0)30-72 62 67-61
mail@plato.de
United Visions Interactive Entertainment
Erkelenzdamm 59, Portal 3a, 10999 Berlin, Germany
Tel.: +49-(0)30-69 59 79-50
Fax: +49-(0)30-69 59 79-20
contact@k1010.com
International Offices
Scholz & Friends International
Hanseatic Trade Center
Am Sandtorkai 76, 20457 Hamburg, Germany
Tel.: +49-(0)40-376 81-0
Fax: +49-(0)40-376 81-681
international@s-f.com
Scholz & Friends Antwerp
Lange Nieuwstraat 68, 2000 Antwerp, Belgium
Tel.: +32-(0)3-234 87-20
Fax: +32-(0)3-234 87-31
antwerp@s-f.com

Scholz & Friends Athens
47 Agiou Konstandinou Str., 15124 Maroussi, Greece
Tel.: +30-2-(0)1-0-80 60 34-0
Fax: +30-2-(0)1-0-806 26 05
athens@s-f.com
Scholz & Friends Brand Affairs Beijing
Fengdanlishe Garden C7-2-302
Haidian District, 100096 Beijing, P.R. China
Tel.: +86-(0)10 -82 9510-17
Fax: +86-(0)10 -82 9510-17
beijing@s-f.com
S Team Scholz & Friends Beograd
c/o New Moment Ideas Group
Hilandarska 14, 11000 Belgrade, Yugoslavia
Tel.: +381-(0)11-322 99 92
Fax: +381-(0)11-334 65 60
belgrade@s-f.com
Scholz & Friends Budapest
Tapolcsányi utca 18, 1022 Budapest, Hungary
Tel.: +36-(0)1-326 57 76
Fax: +36-(0)1-326 50 10
budapest@s-f.com
Scholz & Friends Brand Affairs Budapest
Tapolcsányi utca 18, 1022 Budapest, Hungary
Tel.: +36-(0)1-326 62 62
Fax: +36-(0)1-326 50 10
budapest@s-f.com
Scholz & Friends Kyiv
19 Predslavinska Str., 3 floor, 03150 Kiev, Ukraine
Tel.: +380-(0)44-201 02-78
Fax: +380-(0)44-201 02-77
kyiv@s-f.com
S Team Scholz & Friends Ljubljana
Bezigrad 10, 61000 Ljubljana, Slovenia
Tel.: +386-(0)1-436 25-33
Fax: +386-(0)1-436 25-21
ljubljana@s-f.com
Scholz & Friends London
80 Clerkenwell Road, London EC1M 5RJ, United Kingdom
Tel.: +44-(0)20-7-961 40-00
Fax: +44-(0)20-7-961 40-40
london@s-f.com
ESC/Scholz & Friends Madrid
Cristóbal Bordiú 22, 28003 Madrid, Spain
Tel.: +34-91-451 47-00
Fax: +34-91-442 31 84
madrid@s-f.com
Scholz & Friends Milano
Via Paleocapa 7, 20121 Milan, Italy
Tel.: +39-02-722 23-0
Fax: +39-02-805 61 26
milano@s-f.com
Scholz & Friends Moscow
25 Ul-Akademika Pavlova, Moscow 121359, Russia
Tel.: +7-(0)95-232 94-21/23
Fax: +7-(0)95-232 94-25
moscow@s-f.com
Scholz & Friends Paris
68, rue Léon Frot, 75011 Paris, France
Tel.: +33-(0)1-53 27 66 90
Fax: +33-(0)1-53 27 66 99
paris@s-f.com
Scholz & Friends Praha
Na Moráni 5, 1200 Prague 2, Czech Republic
Tel.: +42-(0)2-24 91 52-39/41
Fax: +42-(0)2-24 91 52-40
praha@s-f.com
S Team Scholz & Friends Skopje
Gjuro Gjakovic 67, 1000 Skopje, Macedonia
Tel.: +389-(0)2-313 02 76
Fax: +389-(0)2-329 85 52
account@steam.com.mk
Scholz & Friends Warszawa
ul. Malczewskiego 24, 02-612 Warsaw, Poland
Tel.: +48-(0)22-646 56 22
Fax: +48-(0)22-627 46 57
warszawa@s-f.com
Scholz & Friends Wien
Zirkusgasse 13, 1020 Vienna, Austria
Tel.: +43-(0)1-21 85 40-0
Fax: +43-(0)1-21 85 40-0-054
wien@s-f.com
Scholz & Friends Zürich
Seefeldstraße 301, 8008 Zurich, Switzerland
Tel.: +41-(0) 43-499 95 88
Fax: +41-(0) 43-499 95 22
zurich@s-f.com
143 l Offices

Contacts, Key Dates and Imprint
144 l Contacts, Key Dates and Imprint
For up-to-date and comprehensive information on the Scholz & Friends share, the
company or new campaigns and productions, simply sign up for our e-mail newsletter
on our homepage or write an e-mail to ir@s-f.com.
This Annual Report is available in German and English. Both versions can be
ordered directly from Scholz & Friends AG or downloaded from www.s-f.com.
Current press releases are also available online at www.s-f.com. Please contact
one of the following representatives should you have any questions:
Scholz & Friends Investor Relations
Please contact: Stefanie Frey
Tel.: +49-(0)30- 59 00 53-114
Fax: +49-(0)30- 59 00 53-298
stefanie.frey@s-f.com
ir@s-f.com
Scholz & Friends Corporate Communications
Please contact: Karin von Hülsen
Tel.: +49-(0)30- 59 00 53-115
Fax: +49-(0)30- 59 00 53-298
karin.huelsen@s-f.com
pr@s-f.com
Scholz & Friends New Business
Please contact: Roland Bös
Tel.: +49-(0)30- 59 00 53-112
Fax: +49-(0)30- 59 00 53-298
roland.boes@s-f.com
group@s-f.com
Key Dates
Annual General Meeting: 27 August 2003, Berlin

Imprint
Published by: Scholz & Friends AG
“The orchestra of ideas.” is a registered wordmark
of Scholz & Friends AG.
Editors: Stefanie Frey, Karin von Hülsen, Marion Kuka
Layout: Scholz & Friends Berlin
Image rights: Scholz & Friends AG
Final artwork: GrafikDesign Bettina Fortak, Berlin
Lithography: Appel Grafik Berlin
Printed by: Ruksaldruck, Berlin
The devil’s feeling rather lonely
because organ donors go to heaven.
A TV spot by Scholz & Friends
London for the British Organ
Donor Society.
145 l Contacts, Key Dates and Imprint

And finally, our best ideas of all from 2002.
Carl, son of Christiane Hoffmann
(Scholz & Friends Hamburg), born 21.8.2002
Caspar Thomas, son of Thomas Heilmann
(Scholz & Friends AG Hamburg/Berlin),
born 30.10.2002
Justina, daughter of Bozidar Kale Kacunkovic
(S Team Scholz & Friends Beograd),
born 10.4.2002
Maja, daughter of Izabella Gramburg
(Scholz & Friends Warszawa), born 2.5.2002
Jona Tove Lina, daughter of Stefan Willm
(Scholz & Friends Berlin), born 6.9.2002
Philipp, son of Andreas Rehm (Plato Kommunikation
Berlin), born 19.9.2002
Ivo, son of Moritz Pietzcker
(Scholz & Friends AG Hamburg/Berlin),
born 26.6.2002
Leonid Mika, son of Aleksandra Roth-Belkova
(Scholz & Friends Berlin), born 10.3.2002
Luis, son of Pia Kempen
(Scholz & Friends Hamburg), born 8.3.2002

Carl Philipp, son of Michael Emmermann
(deepblue networks Hamburg), born 23.9.2002
Ben Joshua, son of Christine Ameskamp
(Scholz & Friends Brand Affairs),
born 27.9.2002
Emilia Mercedes, daughter of Kristin Brunner
(Scholz & Friends Hamburg), born 22.10.2002
Marlon, son of Dirk Bartel
(Scholz & Friends Hamburg), born 2.2.2002
Eliˇska, daughter of Milan Kadlec
(Scholz & Friends Praha), born 25.8.2002
Michalina, daughter of Beata Sitek
(Scholz & Friends Warszawa), born 20.6.2002
Lucy, daughter of Britta Dias
(Scholz & Friends Hamburg), born 16.5.2002
Grzegorz, son of Hania Bielawska-Koc
(Scholz & Friends Warszawa), born 23.8.2002
Janne Clara, daughter of Wolfgang Boyé
(Scholz & Friends AG Hamburg/Berlin),
born 24.9.2002

Scholz & Friends AG I In der Lokfabrik I Chausseestraße 8/E I 10115 Berlin I www.s-f.com