GfK. Growth from Knowledge

GfK. Growth from Knowledge Understanding the consumer the key to sustained market success GfK Group: Annual Report 2005

Contents GfK. Growth from Knowledge Understanding the consumer the key to sustained market success III Our corporate values IV Mission statement GfK Group 2005 in figures 1 Financial year 2005: an outstanding year in the company s history 2 2005 at a glance 4 The Supervisory Board 5 Report by the Supervisory Board 8 To our shareholders and business associates 12 The Management Board 14 Corporate Governance 19 GfK shares 26 GfK Special: Understanding the consumer the key to sustained market success 28 Germany: Caught between fear of the future and a sense of happiness 34 Western and Southern Europe: Italy bridging world cultural heritage and corporate globalization 40 Northern Europe: uk black humor and living for the present 46 Central and Eastern Europe: Russia from socialist state to modern market economy 52 America: usa from freedom of choice to consumer enthusiasm 58 Asia and the Pacific: Japan an unusual blend of cultural tradition and economic power Management report and financial statements of the GfK Group 65 Management report 98 Financial statements 102 Notes to the consolidated financial statements 143 Auditors report Additional information 146 Overview of years 150 Glossaries V List of GfK company abbreviations used in the management report VI Index VII Financial calendar VII Acknowledgements II

Our corporate values Client-driven Our clients needs drive our business. We continuously seek to better understand our clients needs, improve all aspects of existing research products, offer innovative products and to be an integral part of our clients information systems. Accuracy, sound methodology, excellent client service, flexibility, timely delivery and cost effectiveness all ensure that we meet and even exceed our clients expectations. We build long-term partnerships with our clients, contributing to their success. Our people People are our main asset. Development through training, sharing ideas and sound experience is essential to our business. Our people have the freedom to explore and develop their talents and are empowered to achieve our common goals. We encourage and reward initiative, dedication and hard work. Fairness, good communication and working relationships at all levels and locations are key to our success. Innovation We recognize that investing in continuous innovation in both the process and the end product is a prerequisite to meeting clients requirements. Our aim is to be at the cutting edge with our key business activities. Clients needs, evolving markets, new technology and the expertise and ideas of our people throughout the world are what drive innovation. Global expertise local knowledge We respect and learn from local business practices and cultures and provide knowledge tailored to local needs. Our global network comprises international teams, tools and products to provide multinational clients with consistent services. As proud members of the GfK Group, we share local and international expertise to continually improve all aspects of our business. Growth Profitable growth results in greater opportunities. As individuals, teams and business units, we are aware of the impact of our decisions and actions at all levels. We use financial and nonfinancial measurements to review and improve performance on an ongoing basis. Our growth provides investors with a fair return on the financial resources they have entrusted to us. III

Mission Statement GfK. Growth from Knowledge Companies need to make decisions. Knowledge is the basis for decision-making. Our business information services provide the essential knowledge that industry, retail, the service sector and the media need in order to make their decisions. As a knowledge provider, we aim to be at the top in all the global markets in which we operate in the interests of our clients, our employees, our company, our shareholders and the general public. GfK Group 2005 in figures 1) Change 2004 2005 in % Sales in eur m 669.1 937.3 + 40.1 ebitda in eur m 107.8 153.5 + 42.4 Adjusted operating income 2) in eur m 82.9 125.1 + 50.9 Margin 3) in % 12,4 13.3 Operating income in eur m 77.6 80.7 + 3.9 Income from ongoing business activity in eur m 81.4 92.2 + 13.3 Consolidated total income in eur m 53.1 67.5 + 27.1 Tax ratio in % 34.7 26.8 Cash flow from operating activity in eur m 92.1 128.9 + 40.0 Earnings per share in eur 1.35 1.77 + 31.1 Dividend per share 4) in eur 0.30 0.33 + 10.0 Total dividend in eur m 9.4 11.6 + 23.4 No. of employees at year-end full-time 5,539 7,515 + 35.7 1) Financial reporting in accordance with ifrs 2) Adjusted operating income is calculated from operating income. The following expenses and earnings have been eliminated: integration costs arising in connection with the acquisition of companies, amortization on disclosed hidden reserves as part of purchase price allocation, personnel expenses for share-based payments and long-term incentives, other operating income and remaining other operating expenses including, in particular, currency effects resulting from the reporting date valuation. 3) Adjusted operating income in relation to sales in % 4) Proposal to the Annual General Meeting on June, 29, 2006 IV

Financial year 2005: An outstanding year in the company s history GfK GROUP Growth from Knowledge has attained a new dimension. With the acquisition of nop World on April 15, we have re-defined our position in the premier league of market research: We have enhanced our opportunities in terms of expanding our corporate network and services rapidly at global level and to a degree that would have been impossible for GfK alone. We have positioned ourselves well in the traditional marketing and market research markets in the usa and Europe and the fast growing markets of Asia, Latin America and Central and Eastern Europe, creating a strong basis for future growth. We have improved our potential in terms of meeting the high requirements of our clients with efficient cutting edge metering and analysis instruments that can be used internationally. We help clients to arrive at innovative solutions in their marketing decision-making by providing up-to-the-minute market and consumer analysis. We have taken this opportunity to define our strategic aims for the coming years in our 5 Star Initiative which covers five milestones: Fact-based Consultancy, top 3, Global Reach, Full Service and Excellent Financials. In financial terms, 2005 was also the most successful year in the company s history. Together with the former nop World companies consolidated since June 1, 2005, we achieved sales in excess of 937 million euros. This represents growth of 40%. At more than 125 million euros, income was up by over 50%. We also increased our margin from 12.4% to 13.3%. With organic growth of 6.5%, we outperformed sector growth once again. Our work and success have always been driven by supplying clients with the essential knowledge they need about markets and consumers. We supply this knowledge because we know that understanding consumers, their requirements and attitudes are key to the sustained success of our clients in their markets. GfK_1

2005 at a glance January GfK Belgrade is awarded the prize for best business partner by The Coca-Cola Company. Dr. Richard B. Vanderveer, ceo of GfK v2 in Pennsylvania, is voted Executive of the Year by trade magazine, The Pharmaceutical Market Research Report. The stake in us e-commerce and database marketing specialist, Caribou Lake Software, increases to 69.8%. February GfK Praha and GfK Slovakia receive the Golden Ducat Award at the Czech Retail Summit for their outstanding contribution to the sector. Employees, managers and associates of GfK join together to donate a total of 300,000 euros towards building a hospital in memory of the late Management Board member, Heinrich a. Litzenroth. March Establishment of GfK Bulgaria s data production center, which provides production services to GfK companies operating in the Custom Research division. Launch of InterAct!, an international exchange program for GfK employees. April GfK s most significant acquisition to date is nop World with operations in the usa, uk and Italy. Majority acquisition of the custom research service, GfK Research Dynamics in Canada. May Majority acquisition of Adimark, Chile s No. 1 custom research com pany. Data collection of multimedia equipment in 22,000 French households carried out by GfK and associate, Médiamétrie. June Following the approval of the acquisition of nop World by the cartel authorities in Germany and the usa, 3.1 million GfK shares are placed with institutional investors. Acquisition of 33% of the shares in Swiss pharmaceutical research company, Research Matters. Increase of stake in GfK v2 to 100 %. Pooling of HealthCare activities in the usa under the name GfK us HealthCare Companies. GfK s Growth from Knowledge campaign receives BoB Best of Business to Business Communication Award from the German trade press and Association of Communications. Stock exchange award for GfK Investor Relations by Börse Online: ranked No. 2 on the SDax. GfK Polonia, ranked No. 3 in Poland, celebrates its 15th anniversary. First Nuremberg stock exchange day of GfK, Börse München and Münchner Investment Club, visited by 1,000 investors. 2_GfK

2005 at a glance GfK GROUP 2005 at a glance July The Growth from Knowledge advertising campaign receives the reddot design award placing it among the 22 prize winners selected from a total of 3,000 competitors for top quality design. At the 2005 GfK Conference in Nuremberg, entitled The silver generation: marketing for the markets of tomorrow, around 700 marketing experts from across the world discuss the consequences of demographic change for marketing and advertising in the consumer goods industry. August GfK-Nürnberg funds chair in marketing intelligence (mi) at the Friedrich-Alexander-Universität in Erlangen-Nuremberg. The chair is the first of its kind at a German university. Launch of HealthCare operations in South East Asia with the acquisition of SoHealthAsia in Hong Kong. The Over the Rainbow relief fund is set up to support GfK nop employees in New Orleans affected by Hurricane Katrina. GfK and nop World companies operating in the Custom Research division in the usa and Canada join to form GfK nop North America. September Martin Hamblin uk and the British nop companies merge to become GfK nop; reorganization of activities in the Custom Research, Media and HealthCare divisions. GfK Annual Report is ranked No. 3 among SDax companies by publication, manager magazin. With the GfK Post Merger Integration Guide, Excellence Team iv presents current guidelines for the integration of newly acquired companies. GfK is a sponsor of the Du bist Deutschland (You are Germany) advertising campaign, the biggest multimedia initiative to enhance Germany s image. October Delivery of 4,000 electronic metering devices to measure tv ratings in India. Official launch ceremony of the GfK Academy, founded by GfK-Nürnberg e.v., where middle managers from industry, the media, retail and the service sector learn about inter national management. 170 GfK employees take part in the 10 th Nuremberg city run, of which GfK is the main sponsor. November Majority shareholding acquired in Israeli research institute, GfK rt Israel, in the Retail and Technology division. GfK-rus is the key participant in setting up a specialist market research department at the State University Higher School of Economics (hse) in Moscow. December The Supervisory Board approves the 5 Star Initiative developed by the Management Board, which determines GfK s strategic mile - stones for the next five years. Construction work begins on the Heinrich a. Litzenroth Memorial District Hospital Ward in Sri Lanka. A total of 30,000 euros is donated to three homes for orphans in Germany, Chile and Sri Lanka. GfK_3

The Supervisory Board Hajo Riesenbeck Chairman of the Supervisory Board Director at McKinsey & Company, Düsseldorf, Germany Dr. Christoph Achenbach Management spokesman for Robert Klingel GmbH & Co. kg, Pforzheim Jörg Bandt until May 24, 2005 Scope Data Collection Manager at GfK Aktiengesellschaft Dr. Wolfgang C. Berndt Member of the Board of Directors of the Institute for the Future, Menlo Park, California, usa hr Committee Hajo Riesenbeck (Chairman) Dr. Wolfgang C. Berndt Kerstin Döpfert Audit Committee Dr. Arno Mahlert (Chairman) Dr. Christoph Achenbach Stefan Pfander Dieter Wilbois Kerstin Döpfert Independent Works Council representative at GfK Aktiengesellschaft, Nuremberg, Germany Sandra Hofstetter from May 24, 2005 Senior Research Assistant at GfK Aktiengesellschaft, Nuremberg, Germany Dr. Arno Mahlert Member of the Management Board of Tchibo Holding ag, Hamburg, Germany Stefan Pfander from May 24, 2005 Consultant at Wm. Wrigley Jr. Company, Chicago, usa Werner Spinner Business consultant Dieter Wilbois Independent Works Council representative (Chairman) at GfK Aktiengesellschaft, Nuremberg, Germany Peter Zühlsdorff until May 24, 2005 ordinary member Honorary Chairman of the Supervisory Board Managing shareholder of dih Deutsche Industrie- Holding GmbH, Frankfurt/Main, Germany 4_GfK

Report by the Supervisory Board GfK GROUP Report by the Supervisory Board In financial year 2005, the Supervisory Board kept itself informed on a regular basis of the GfK Group s business development, income and financial position, its personnel situation and impending investments. It has monitored and advised on the activities of the company s Management Board and discussed all significant business events with the Management Board. The Supervisory Board met seven times in financial year 2005. At these meetings, the Management Board s reports and the company s prospects for development were discussed in depth. The main topics here were the strategic direction of the GfK Group and its international acquisitions activity, the annual accounts for 2004, the development of business during 2005 and the budget for financial year 2006. Also included were the adoption of the annual accounts for 2004 and the budget for 2006. In financial year 2005, the Chairman of the Supervisory Board maintained constant contact with the Management Board. In particular, the Supervisory Board was involved in the preparation and completion of the acquisition of nop World. Since closing the deal, in addition to the regular meetings, the Management Board has advised the Supervisory Board in detail of the status of the integration process in four conference calls. The term corporate governance stands for responsible company management and control geared towards long-term value added. The Supervisory Board has dealt exhaustively with the rules of the German Corporate Governance Code and on December 14, 2005, issued a declaration of compliance pursuant to Section 161 of the German Stock Corporation Act (AktG). The company complies with almost all of the relevant mandatory and voluntary regulations. The few deviations are indicated on page 14ff. of the present Annual Report, where they are discussed in the Corporate Governance Report. The Supervisory Board has formed two committees. The Audit Committee (Finance Committee), which met four times in the reporting period, dealt with the company s business development, income and financial position as well as impending investments. Additional focal points were the investment policy for the company s liquid funds, issues of financing, as well as questions pertaining to the accounting system including interim reporting. As part of the acquisition of nop World, financing models were discussed, in particular, the division of selffinancing and borrowing. The Personnel Committee met five times in 2005. The focal points were the remuneration of the Management Board and the appointment and remuneration of the Chief Financial Officer. The initial appointment of Christian Weller von Ahlefeld as Chief Financial Officer on June 1, 2005 is effective for three years in accordance with the rules of the German Corporate Governance Code. Christian Weller von Ahlefeld has gained experience in a range GfK_5

Report by the Supervisory Board of management positions working for well-known international investment banks and a major industrial concern. On June 1, 2005, Christian Weller von Ahlefeld took on responsibility for Finances, Financial Controlling and Accounting as well as hr and Administration, which the Chief Executive Officer of the GfK Group, Professor Dr. Klaus l. Wübbenhorst, had assumed in the interim since April 2004. On October 11, 2005, the Supervisory Board extended the appointment of Management Board member, Wilhelm R. Wessels, by five years. Hajo Riesenbeck is the Chairman of the Personnel Committee and the Audit Committee is headed by Dr. Arno Mahlert. In December 2005, the Supervisory Board commissioned external consultants to monitor the efficiency of the Supervisory Board of GfK. This involved members of the Supervisory Board carrying out a self-assessment in the form of a written questionnaire in January 2006. The results were compared with similar questionnaires of other companies. The investigation is evidence of the good per formance of the Supervisory Board of GfK ag. It was noted that the relationship with the Management Board is based on trust and facilitates a constructive dialogue with the focus on core issues and advice and a forward-looking approach. The committee has a sufficient number of members and the number of Supervisory Board meetings is appropriate. Cooperation among members is considered to be open and solution-oriented. Consultation between the Supervisory Board Chairman and the Chief Executive Officer is close. Concrete suggestions are used and incorporated into the continued cooperation. With effect from May 24, 2005, Peter Zühlsdorff voluntarily resigned his seat. He retains his connection with the company as Honorary Chairman. The Annual General Meeting appointed Stefan Pfander, former Vice President and Europe Chairman of Wm. Wrigley Jr. Company, Chicago, as his successor. The Supervisory Board is therefore extending its experience in the consumer goods industry and looks forward to a successful cooperation. In a meeting held on February 22, 2005, the Supervisory Board resolved that for financial year 2004, it would decline a component of the variable remuneration which is linked to the level of the dividend. This reflects that the Supervisory Board is prepared to treat the increase in dividend separately from its remuneration. The Supervisory Board therefore commissioned an examination of the remuneration regulations by an independent external specialist. The proposal was resolved by the Annual General Meeting on May 24, 2005. In future, remuneration will comprise a fixed component and a variable remuneration component. The variable component is dependent on the net income of the Group. As a benchmark, earnings per share will be examined as a three-year average. Further details on this can be found on page 14ff. of the Corporate Governance Report. 6_GfK

GfK GROUP Report by the Supervisory Board The annual financial statements and management report for GfK ag and the GfK Group for financial year 2005 have been audited by kpmg Deutsche Treuhandgesellschaft Aktiengesellschaft, Wirtschaftsprüfungsgesellschaft, Nuremberg, taking into account the book-keeping and provided with an unqualified auditors report. All members of the Supervisory Board received copies of the auditors report in good time ahead of the accounts meeting. The Audit Committee of the Supervisory Board discussed these documents at its preparatory meeting, as did the Supervisory Board plenum in its accounts meeting. Both these meetings were attended by the auditors, who signed the annual and consolidated financial statements. They reported on the audit in general and on the key points stipulated in the audit mandate and also gave detailed responses to questions from the members of the Supervisory Board. The Supervisory Board has noted the audit report and, following its own examination of the annual financial statements prepared by the Management Board, has given its approval. The financial statements are therefore adopted. The Supervisory Board has seconded the proposal of the Management Board for appropriation of the profits. The Supervisory Board would like to thank the members of the Management Board, the Works Councils, all GfK ag staff and the staff of affiliated companies for their hard work and commitment, in particular for the high level of involvement in the successful integration of nop World. Nuremberg, April 25, 2006 Hajo Riesenbeck GfK_7

To our shareholders and business associates Professor Dr. Klaus L. Wübbenhorst Chief Executive Officer Dear shareholders and business associates, 2005 was an exceptional year in the history of the GfK Group. The acquisition of the nop World companies marked the most important milestone since the company s ipo in 1999. Growth from Knowledge, the claim expressed by the letters of our company name which defines our services, acquired a new dimension in 2005. 1. Advance into the top league of market research companies Together with nop World, GfK has advanced into the top league of global market research groups. We are now one of the sales billionaires of the market research sector, with a worldwide market share of around 5%. We are represented in over 70 countries on all continents. In most of these countries, we are among the leading market researchers. Having our own subsidiaries in these countries enables us to ensure a high level of quality and provide clients with key information and advisory services. This in turn contributes to their success in the relevant markets. We have significantly enhanced our positioning in three of the ten key market research markets in the world. In the usa, by far the biggest, most mature and competitive national market for marketing and market research, which we entered as little as six years ago, we have rapidly advanced to be the No. 8 company in the sector. In the uk, the world s second largest national market, we are now the No. 2 market research group and in Italy, which is the sixth biggest market, we are ranked in third place among competitors. Our staff complement was also significantly expanded in 2005 and provides us with a unique and valuable pool of talented, knowledgeable and creative employees. This applies in terms of basic methodological knowledge relating to market research and marketing expertise as well as knowledge of local markets and practice. We count some leading lights in the industry among our staff. With the new GfK companies, we can offer a range of data collection and analysis instruments, which the old and new GfK companies have carefully developed over years and which have proved highly successful, especially at international level. In addition, we provide a number of innovative methods and technological developments. This means that we are well placed to respond efficiently and precisely to any traditional and new issues on which our clients base their marketing decision-making. 8_GfK

GfK GROUP Letter to shareholders Once the monopolies commissions in Germany and the usa had checked and approved the merger, on June 1, 2005, we immediately started the integration process of the new companies into our divisions and network. The high level of motivation and willingness to cooperate shown by our colleagues from the former nop World have contributed to keeping the rapid integration on schedule and within budget. 2. Strategy for the coming years: 5 Star Initiative Following the expansion of the Group to include the former nop World companies, we have reconsidered our strategy for the coming years. The 5 Star Initiative defines the strategic milestones we consider to have priority. The first initiative, Fact-based Consultancy, aims to expand our service offering consistently to provide quality, information-based continuous advisory services for the top managers of our clients. In addition to providing up-to-date, accurate information, more than ever, we intend to be the essential partner for the market decision-making of our clients. The second initiative, top 3, is based on the ambitious aim of becoming the No. 3 market research company. On this basis, we will make a concerted effort to achieve at least a No. 3 ranking in any of the divisions and countries in the regions of Europe, North, South and Central America as well as Asia and the Pacific where this is not already the case. The third initiative, Global Reach, is aimed at further expanding our existing network that comprises more than 70 countries to include countries which are key market research markets and where we do not already have our own subsidiaries. The fourth initiative, Full Service, is designed to strengthen our position as a specialist service provider with a focus on market research that offers a wide range of information, analysis and advisory services in all marketing segments of the consumer goods, pharmaceuticals, media and services markets. The fifth initiative, Excellent Financials, defines our medium-term financial targets. We are working on approaching the 1.5 billion euro mark quickly and achieving a margin of 13 % to 15 % in the next few years. We have also set clear targets for reducing debt and the same applies to the tax ratio for the Group. 3. Human Resources: international focus The change to a much more international workforce puts high demands on those involved in global hr-related matters. In order to promote our strategic aims by working together with our subsidiaries, we launched the 5 Star Incentive as a long-term incentive for managers. The success of the incentive for managers is based on two criteria that impact directly on corporate success: the average growth in operating income of GfK for the next three years and the performance of GfK shares compared with shares on the Dow Jones Euro Stoxx Media Index. Whether participants qualify for the program is dependent on the achievement of individually agreed targets. GfK_9

To our shareholders and business associates The global hr strategy which has been approved comprises everything from regular employee questionnaires on innovative concepts to actively promoting information exchange between employees. In early November 2005, the fifth Excellence Team launched a new project on the GfK brand. Excellence has two objectives. It is a program to promote young talent and form future GfK managers and at the same time, a think tank where cross-divisional issues that affect the corporate culture and management principles can be taken up. In the past few years, over 50 managers have addressed and implemented the following issues successfully: our corporate values, the principles of employee management and leadership, the basic principles on sharing knowledge and rules on the integration of newly acquired companies. 4. A year of success - financial year 2005 Last but not least, the results for financial year 2005 should be highlighted. There was plenty of good news in a year in which we clearly exceeded our targets. Sales of more than 937 million euros were significantly higher than the target of around 900 million euros. Similarly, adjusted operating income reported according to ifrs in excess of 125 million euros was considerably higher than the original target figure. In the international comparison of margins, GfK s achievement of 13.3% is excellent. All of this has been possible thanks to the outstanding work and commitment of our managers and employees worldwide and I should like to take this opportunity to thank them on behalf of the Management Board. 5. Scheduled increase in dividend Of course, we intend to let shareholders participate appropriately in our success. The Management Board and Supervisory Board will propose a dividend of 0.33 euros per share for financial year 2005 to the Annual General Meeting on June 29, 2006. I am pleased that, once again, we are in a position to pay our shareholders a higher dividend as has been the case each year since our ipo and that this is possible despite the major challenges and investment that have been necessary in view of globalization and technological progress. 6. Financial year 2006 a year of integration and above-average growth in income The continued integration of the former nop World companies will be our focus in the current financial year. We also intend to progress business consistently. We anticipate total sales in excess of 1.1 billion euros. On the basis of the scope of consolidation of the year just ended, this corresponds to growth of around 18 %. Organic growth is once again expected to outperform sector growth in market research, which experts estimate at around 5%. In addition, as in prior years, we intend to achieve a higher growth rate in income than in sales. 10_GfK

GfK GROUP Letter to shareholders As in the past, we will continue to report promptly on performance. The publication of details about our strategy and the targets for the GfK Group and the individual divisions ensure transparent reporting that enables you to make an informed assessment of our performance. Growth from Knowledge, our claim to clients will continue to represent the biggest challenge and opportunity for the GfK Group and its staff. Our corporate culture is convincing and we pool vast knowledge that is more varied and has been enriched by the arrival of the new companies and their employees. We combine a wealth of talent and experience in our highly motivated employees and managers who will ensure that most of the Group s growth is still ahead of us. This is in line with our claim and applies to clients, the company and the people working for it as well as the value of our shares, in which you as shareholders have placed your trust over many years. Let me thank all of you and ask you to continue to support our future growth. Professor Dr. Klaus L. Wübbenhorst Chief Executive Officer GfK_11

12_GfK From left to right: Dr. Gérard Hermet, Petra Heinlein, Professor Dr. Klaus L. Wübbenhorst, Christian Weller von Ahlefeld, Wilhelm R. Wessels

The Management Board GfK GROUP The Management Board Professor Dr. Klaus L. Wübbenhorst born February 23, 1956 in Linnich Chief Executive Officer (ceo) responsible for Strategy, Internal Audit, Method and Product Development, Public Affairs and Communications and it Services Professional background Since 1998 Spokesman and, since 1999, ceo of GfK ag, appointed until 2007 Since 2005 President of the Chamber of Industry and Commerce for Middle Franconia in Nuremberg 1992 1997 Member of the Management Board of GfK ag, responsible for Finances, Accounting, Financial Controlling, Personnel, Purchasing, Production and it 1991 1992 Member of the Management Board of kba-planeta ag, Radebeul near Dresden 1984 1991 Employee of Bertelsmann ag, Gütersloh, becoming Managing Director of the Druck- und Verlagsanstalt Wiener Verlag, Himberg near Vienna Education 2005 Awarded the title of Honorary Professor by the Friedrich-Alexander-Universität in Erlangen- Nuremberg 1984 Doctorate from the Technische Hochschule, Darmstadt 1981 Graduated in Business Administration from the Universität/Gesamthochschule, Essen Christian Weller von Ahlefeld born June 6, 1958 in Flensburg Chief Financial Officer, responsible for Finances, Financial Controlling and Accounting, Personnel and Administration Professional background Since June 1, 2005 Member of the Management Board of GfK ag; appointed until 2008 2000 2005 cfo of the Tele-München Group 1996 2000 Director and Head of Group Finance at Siemens ag; founder and manager of Siemens Financial Services 1995 1996 Executive Director at sbc Warburg and member of the Group Management 1983 1995 j. p. Morgan in New York, London and Frankfurt, becoming Vice President and member of the European Corporate Finance Executive Committee 1982 1983 Assistant to the management at Heinrich d. Hansen in Flensburg Education 1981 Graduated in Business Administration from the Freie Universität Hamburg Petra Heinlein née Dengler, born October 7, 1958 in Bad Staffelstein Responsible for the Custom Research division Professional background Since 2002 Member of the Management Board of GfK ag, appointed until 2012 2001 Integration management on behalf of GfK ag for the GfK Martin Hamblin Group and GfK Great Britain, uk 2000 Integration Management on behalf of GfK ag for GfK Custom Research Inc. in the usa 1992 2000 Managing Director of contest census in Frankfurt 1985 Joined GfK as project manager with GfK Marktforschung 1984 Research Assistant at the Arnold- Bergstraesser-Institut, Freiburg im Breisgau Education 1984 Graduated in Political Science from the University of Bamberg Dr. Gérard Hermet born January 19, 1951 in Montpellier, France Responsible for the Retail and Technology division Wilhelm R. Wessels born October 12, 1952 in Haren Responsible for the Consumer Tracking, Media and HealthCare divisions Professional background Since 1999 Member of the Management Board of GfK ag, appointed until 2008 1998 2000 Chairman of the French Marketing Association (afm) 1988 1998 General Manager of GfK Sofema, France 1984 1998 Managing Director of GfK France, then General Manager GfK Marketing Services, France 1978 1984 Employee of Burke Marketing Research, Paris, France Education 1978 Doctorate from the University of Grenoble 1975 mba from the French Business School (icn) Professional background Since 1996 1996 Member of the Management Board of GfK AG, appointed until 2011 1991 1996 Managing Director of GfK ag Gesundheitsforschung/i+g Gruppe Gesundheitsund Pharma-Marktforschung 1986 1996 Managing Director of gpi 1978 Joined GfK, working for gpi Kommunikationsforschung Gesellschaft für Pharma- Informationssysteme, Nuremberg/Frankfurt Education 1977 Graduated in Business Administration from the University of Saarbrücken GfK_13

Corporate Governance Since 2002, the German Corporate Governance Code ( Code ), with its recommendations and suggestions, has been added to the statutory regulations. Recognition of these principles will promote and strengthen the confidence of shareholders, clients, employees and the public in the national and international stock markets. The Management Board and the Supervisory Board support responsible management and control of the GfK Group all geared towards increasing value added. In the past, GfK already largely complied with the recommendations and suggestions of the Code. For over ten years, there have been standing rules for the Management Board and the Supervisory Board. Since its stock market flotation in 1999, GfK has issued quarterly reports and broadcast its Annual General Meeting and accounts press conference on the Internet. In order to make it easier for private and institutional shareholders to exercise their voting rights, GfK has appointed a proxy since 2003. Further details can be found on the website or can be discussed with Investor Relations. GfK will continue to improve and expand the information supplied on the Internet. The Supervisory Board and the Management Board have resolved to disclose their remuneration components from financial year 2004 onwards. Since the end of financial year 2005, GfK has also complied with the statutory publication obligations relating to quarterly reports. From 2006 onwards, GfK intends to publish its Annual Report within the given deadline where possible. The first publication deadline after this is April 4, 2007. With these measures, the company will comply with almost all mandatory and voluntary regulations. Since the initial publication of the Code, GfK has gradually reduced the number of deviations from its regulations. This applies not only to the mandatory recommendations, but also the voluntary suggestions. Total remuneration and shareholdings of the Management Board and Supervisory Board The individual remuneration components of the Supervisory Board and the Management Board have been disclosed from financial year 2004 onwards. In 2005, these comprised: Remuneration of the Management Board* in eur 000 Fixed components Variable components 1) Total remuneration Stock options Prof. Dr. Klaus L. Wübbenhorst (ceo) 539.9 1,228.2 1,768.1 40,000 Petra Heinlein 319.2 756.5 1,075.7 26,666 Dr. Gérard Hermet 371.0 752.5 1,123.5 26,666 Christian Weller von Ahlefeld 2) 189.7 385.0 574.7 26,666 Wilhelm R. Wessels 361.1 603.5 964.6 26,666 2005 1,780.9 3,725.7 5,506.6 146,664 2004 1,709.1 2,492.8 4,201.9 122,221 * This financial information also forms an integral part of the information given in the Notes to the consolidated financial statements as of December 31, 2005. 1) The calculation of the variable component is based on certain key figures in the consolidated financial statements. 2) From June 1, 2005 Further information on the remuneration of members of the Management Board can be found in the Notes to the financial statements in the present Annual Report on page 135. In financial year 2005, members of the Management Board executed five share transactions with a total of 49,517 shares. This comprises two transactions (47,117 shares) for the exercising of options 14_GfK

GfK GROUP Corporate Governance and subsequent sale of shares and three purchases comprising 2,400 shares overall. As of the reporting date of December 31, 2005, members of the Management Board held a total of 389,287 GfK shares and 717,424 GfK stock options. The remuneration of the Supervisory Board in 2005 comprised: Remuneration of the Supervisory Board* in eur 000 Fixed components Variable components Total remuneration Hajo Riesenbeck (Chairman) 27.0 18.0 45.0 Dr. Arno Mahlert (Deputy Chairman) 18.0 12.0 30.0 Dr. Christoph Achenbach 11.3 7.5 18.8 Jörg Bandt 1) 3.5 2.4 5.9 Dr. Wolfgang C. Berndt 11.3 7.5 18.8 Kerstin Döpfert 10.3 6.9 17.2 Sandra Hofstetter 2) 5.5 3.6 9.1 Stefan Pfander 2) 5.5 3.6 9.1 Werner Spinner 10.7 7.2 17.9 Dieter Wilbois 11.3 7.5 18.8 Peter Zühlsdorff 1) 3.5 2.4 5.9 2005 117.9 78.6 196.5 2004 69.1 157.6 226.7 * This financial information also forms an integral part of the information given in the Notes to the consolidated financial statements as of December 31, 2005. 1) until May 24, 2005 2) from May 24, 2005 No further remuneration was granted. In 2005, the remuneration system of GfK ag, which was resolved by the Annual General Meeting last year, was used for the Supervisory Board for the first time. It focuses on the roles and the responsibilities of the Supervisory Board members and the financial performance of GfK. Essentially, the following elements are included: In addition to expenses, members of the Supervisory Board receive fixed remuneration of eur 9,000 payable at the end of the financial year. They also receive annual remuneration which is performance-based and dependent on earnings per share. A threshold value of eur 0.30 per share (in accordance with ifrs) was determined in 2005. If this value is achieved, each beneficiary receives a sum of eur 500. For every eur 0.10 that earnings per share exceed this value, each beneficiary receives a further eur 500. The threshold value increases eur 0.10 every year. Three financial years are taken into consideration when calculating the earnings per share value. The current financial year and the two preceding years are used to establish an average. Performance-related remuneration may only amount to one and a half times the fixed annual remuneration. The Chairman of the Supervisory Board receives two and a half times the fixed and variable amounts mentioned above, and the Deputy Chairman receives one and a half times this amount. Remuneration increases by 25% per membership of a committee and by 50% per chair of a committee, up to a maximum of 100% of the total of the fixed and variable remuneration. GfK_15

Corporate Governance GfK compensates every Supervisory Board member for any vat applying to their remuneration and reimbursement of expenses. Supervisory Board members who have only held their position for part of the financial year are compensated on a pro rata basis. The Supervisory Board and/or their dependents have carried out 7 share transactions altogether, totaling 2,523 GfK shares. This involved a purchase of a total of 1,024 shares and six sales of a total of 1,499 shares. The Supervisory Board owns a total of 6,689 GfK shares. Details of the individual transactions by members of the Supervisory Board and Management Board are published on the website in accordance with the Code. Explanations for deviations from the Corporate Governance Code Pursuant to Section 161 of the German Stock Corporation Act (AktG), the management and supervisory boards of listed companies must declare each year, the extent to which they have complied with and will continue to comply with the recommendations of the Government Commission German Corporate Governance Code published by the Federal Ministry of Justice in the official section of the online Federal Gazette and which recommendations have not been or will not be complied with. The declaration must be made available to shareholders at all times. The Code contains regulations, some of which are binding. In addition to outlining the prevailing company law, it also includes recommendations from which companies may deviate, although such companies are then obliged to publish information on such deviations each year. The Code also contains suggestions which may be deviated from without the need for this to be disclosed. GfK ag has been publishing details of deviations from recommendations and suggestions since 2002. These are reported separately below. I. Recommendations The Management Board and Supervisory Board of GfK ag declare that they have complied with and will continue to comply with the recommendations of the Government Commission German Corporate Governance Code in the version of June 2, 2005 published by the German Ministry of Justice on July 20, 2005 in the official section of the online Federal Gazette. Only the following recommendations will not be applied: 1) Point 4.2.3. deals with variable remuneration components for the Management Board. With regard to stock options, there is a request for the Supervisory Board to agree a limitation option (cap) for extraordinary, unforeseeable developments. GfK s stock option program expired on December 31, 2004, i.e. this was the last date on which eligible persons had the option of choosing to receive cash or stock options. There is currently no cap on this program. Tranches already issued or still to be issued may be exercised up to and including December 31, 2011. Further details are available on page 121ff. On December 12 and 14, 2005, the Management Board and the Supervisory Board agreed a new program which complies with the requirements of point 4.2.3, and includes a cap option. 16_GfK

GfK GROUP Corporate Governance The new 5 Star Incentive program has the following objectives: The program continues on the same basis as the current stock option program, without issuing new shares. As with the previous incentive program, the intention is to bind management staff to the long-term, operational and strategic corporate goals. The life of each tranche is three years. Payment will contain a cash benefit in place of shares. The decision of an employee to waive part of the variable remuneration components creates an entitlement vis-à-vis GfK to allocation of virtual GfK shares. The number of virtual shares acquired is calculated on the amount of substituted remuneration and the GfK share price, which is based on the average price of the last 20 trading days before the year-end. For every virtual GfK share acquired, the employee initially receives a further performance share. However, the number of performance shares granted by GfK may change. The two performance criteria governing this are the increase in operating income and the development of the GfK share price, both over a period of three years. For the first tranche: if operating income increases by only 4% during the allotted time period, the performance shares linked to this target expire. If operating income increases by an average of at least 14 %, the number of performance shares doubles. Profit forecasts of 15 Dow Jones Euro Stoxx Media index-listed companies for the coming three years were used to determine the target. The GfK share price performance is measured against that of companies listed in the Dow Jones Euro Stoxx Media index. If the GfK share price falls within the best 25%, the number of performance shares linked to this target is doubled. If the share price falls in the lower 50%, performance shares expire. In line with the target achievement, GfK issues up to a maximum of two performance shares for each virtual share allocated in place of variable remuneration. In accordance with the Corporate Governance Code, this is limited to five times the variable component waived by the employee. 2) Point 7.1.2 regulates the publication of the consolidated financial statements within 90 days and interim reports within 45 days GfK has complied with the 45-day period for the publication of the quarterly results since January 1, 2005. The Annual Report was published 101 days after the year-end in 2005. In 2006, GfK will be unable to meet the 90-day target. This is due to the acquisition of nop World on June 1, 2005. Based on sales in 2004, nop World is around half the size of GfK. nop World also previously used uk gaap accounting standards. As of the 2005 year-end, GfK switched from us gaap to ifrs. For this reason, GfK announced in its quarterly report as of September 30, 2005 that it would publish its 2005 financial statements on May 2, 2006. This corresponds to a period of 122 days. GfK will shorten publication time significantly in 2007. GfK_17

Corporate Governance II. Suggestions (note: there is no obligation to explain any deviations from suggestions) The Management Board and Supervisory Board of GfK ag declare that they have complied with and will continue to comply with the suggestions of the Government Commission German Corporate Governance Code in the version of June 2, 2005 published by the German Ministry of Justice on July 20, 2005 in the official section of the online Federal Gazette. Only the following recommendations will not be applied: 1) Point 2.3.3: the Management Board should ensure the appointment of a representative to exercise the voting rights for shareholders in accordance with instructions; such person should also be contactable during the Annual General Meeting. In the past, the GfK has appointed a representative to exercise the voting rights before the Annual General Meeting and will continue to do so in the future. The representation of the shares is assumed in accordance with the regulations listed in the notification of the Annual General Meeting. The details are published in the agenda and on GfK s website at www.gfk.com/investor. Voting during the Annual General Meeting is currently difficult for technical reasons. As soon as a practicable solution has been found for the secure transmission of the votes, the company will look at introducing such a system. 2) Point 2.3.4: pursuant to point 2.3.4 of the Code, the company should enable shareholders to follow the Annual General Meeting using modern communication media (e. g. the Internet) Since GfK has been listed on the stock exchange, the Annual General Meeting has been broadcast on the Internet. The webcast lasts until the end of the report by the Management Board. The company has refrained from broadcasting more of the meeting in order to protect the privacy rights of the shareholders and will continue to refrain from doing so. A corresponding declaration is also available at www.gfk.com/investor/corporate Governance. The Compliance Officer monitors compliance with the principles and reports back on this to the Supervisory Board at least once a year. Since the beginning of 2005, GfK employees have had the opportunity of passing information to the Chairman of the Finance Committee, Dr. Arno Mahlert, via the GfK ag Intranet. Plans to externalize this process are currently under consideration. GfK will continue to improve communication with shareholders and dealers as well as with the public. The aim is full compliance with the Code. Compliance Officer: Bernhard Wolf Tel. + 49 911 395 2012 Fax + 49 911 395 4075 bernhard.wolf@gfk.com 18_GfK

GfK shares GfK GROUP GfK shares 2005 financial year: global increase in share prices The trend in the stock markets last year awakened memories of the stock market euphoria around the new millennium. Almost all the major global stock market indices showed a very positive trend and growth. This was particularly true of the stock markets in Europe, Asia and the Arab countries. In contrast, the usa and China were major losers last year. Demand for German equities was very buoyant in 2005, not only from domestic, but also international investors. Low company valuations, successful restructuring activities and generally stronger corporate earnings growth compared to the usa are some of the reasons why liquidity from abroad flooded into the German equity market. This made the Deutscher Aktienindex (Dax), which rose by 27%, one of the winners amongst the European stock markets. Two German stocks are heading the ranking list of stocks included in the Euro-Stoxx-50. GfK shares: key data German Securities Code 587530 isin (International Stock Identification Number) DE0005875306 Reuters Bloomberg Datastream First Call GFK.DE GFK GR D:GFKX GFK.DE As in the previous year, 2005 was once again a year for second-tier stocks in Germany. These clearly outperformed the Dax. The MDax, which consists of 50 stocks, rose more strongly than the Dax throughout the whole of 2005, increasing by 36% and giving it the edge over the other important German indices. The SDax followed with growth of around 35%. The TecDax brought up the rear, moving upwards by only 15 %. The European index for media stocks, the Dow Jones Euro Stoxx Media, also turned in a fairly disappointing performance, rising by just under 13 % in 2005. Highest and lowest values of GfK shares from January 2005 to March 2006 in eur 37 38.50 37.21 34 34.25 34.50 31 30.00 29.90 32.64 32.32 31.59 33.05 31.00 32.90 31.78 31.45 31.50 31.80 33.40 31.60 28 25 27.50 28.42 29.50 27.25 29.69 28.72 27.77 28.99 25.90 27.00 28.00 28.30 Jan 05 Feb 05 Mar 05 Apr 05 May 05 Jun 05 Jul 05 Aug 05 Sep 05 Oct 05 Nov 05 Dec 05 Jan 06 Feb 06 Mar 06 Highest and lowest share price Monthly closing price GfK_19

GfK shares GfK share price performance from January 1, 2005 to March 31, 2006 in eur 1) 50 45 40 35 30 25 January 2005 April 2005 July 2005 October 2005 January 2006 1) All values are indexed to the GfK share price GfK SDax Performance Dax 30 Performance dj Euro Stoxx Media In addition to the upturn in the German economy, four other factors were significant for trends in the European stock markets: The loss of investors confidence in the European Union. The main reasons for this were the rejection by the French and the Dutch of the draft joint European constitution, and the failure of European politicians to reach agreement on financial policy at the Brussels eu summit. The us dollar strengthened by around 15 % compared to the euro over the year. The further increase in unemployment figures, which exceeded five million at the beginning of the year for the first time in the history of the Federal Republic of Germany. It was only through bringing forward the new elections to the second half of the year and the election of Angela Merkel as Chancellor that the confidence of international investors in Germany was strengthened. Natural disasters such as Hurricane Katrina in the usa and the earthquake in Kashmir as well as renewed terrorist attacks led to a sharp rise in oil prices around the world. In the usa, trends on the Dow Jones and nasdaq stock market indices were hampered by the continuing strict interest rate policy of the us central bank. Key lending rates were raised in seven stages over the year from 2.25% to 4% at year-end. Investors also avoided the us markets as a result of the anticipated lower earnings growth of American companies compared to Europe. The stock market year 2005 even ended with a minus of 0.6% for the Dow Jones, placing it at the bottom of the league compared to the various global indices. 20_GfK

GfK GROUP GfK shares GfK shares: consolidation at a high level Having risen steadily for about two and a half years, and shown overall upward movement of around 50% in 2004, 2005 was a year of consolidation for the GfK shares. At the end of the last financial year, the market value went out of trading limits down 1% at around eur 28.30. However, it was also possible for investors to generate profits from GfK during this period. The share price continued to rise until mid-2005 and at the end of June it was trading at 20% above the closing price of year-end 2004. GfK share price performance comparison From ipo to in 2005 08.03.2006 1) GfK 1.2 % + 85.5 % Dax + 27.1 % + 2.1 % SDax + 35.2 % + 46.4 % dj Euro Stoxx- Media + 12.5 % 28.2 % 1) Compared with the ipo of eur 15.42 as of September 23, 1999 (adjusted for the capital increase from company funds) The trend was only reversed when GfK published its half-year results in mid-august. The unsatisfactory business trend at the English subsidiary GfK Martin Hamblin and in the Consumer Tracking division in Switzerland prompted GfK to reduce its earnings forecast for the GfK Group (excluding nop World) from eur 120 to eur 110 million. Although the overall forecast, including nop World, remained unchanged, the share price slipped back significantly in the following weeks. It fluctuated between eur 26 and eur 32 and did not depart from its sideways trend again until the year-end. GfK shares: key indicators Unit 2004 2005 High eur 28.80 34.25 Low eur 18.75 25.90 Closing price eur 28.65 28.30 Average daily volume traded No. 14,517 19,383 No. of no-par shares (weighted) No. 31,366,611 33,486,383 No. of no-par shares as of Dec 31 No. 31,474,522 35,047,692 Stock market capitalization as of Dec 31 eur m 898.7 991.8 Ranking in the S-Dax by sales by market capitalization Index weighting by market capitalization in % 17 2 4.7 21 2 4.0 Dividend 1) eur 0.30 0.33 Total dividend 1) eur m 9.4 11.6 Earnings per share eur 1.35 1.77 Free cash flow per share 2) eur 2.22 2.79 1) Proposal to the Annual General Meeting on June 29, 2006 2) Figures adjusted for the capital increase GfK_21

GfK shares For shareholders who acquired their shares at the time of flotation in 1999 and have since held them, there was a price gain of around 84% as of the end of 2005. This corresponds to an annual return on capital employed of 10.5%. Investors who reinvested the dividend which included a corporation tax credit up to 2000 in the stock on the day of the payout, achieved a return of 12.7% per annum in the same period. By comparison, an alternative investment in German government bonds during the same period would have generated an average return of almost 4.0% per annum. Analysts recommendations: ten investment banks follow GfK As in 2004, GfK was closely observed and evaluated by a number of equity analysts in the last financial year. The total of ten was unchanged from the previous year. Given the high level of personnel turnover in investment banking in 2005, this cannot be assumed to remain unchanged. However, the rotation of analysts also creates opportunities for GfK. The change in analysts extends the circle of banks with proven expertise with regard to GfK. Frequently, a bank resumes coverage after an analyst has left. At the same time, the analysts who have left the bank continue to cover GfK on behalf of their new employers. According to a current survey by dirk (German Investor Relations Association), the average number of active analysts following a stock is currently about 7 per company in the SDax. GfK is much better placed with 10 analysts. In 2006, GfK will seek to establish close contact with as many investment banks as possible in order to extend the coverage further. 2005 Annual General Meeting well attended As in previous years, the Annual General Meeting in Nuremburg on May 24, 2005 was well attended. With 479 shareholders and representatives, the number of participants was up slightly on the previous year. Overall, 72.1% of the voting capital was represented. Many other investors also followed the Annual General Meeting live on the Internet. The most important decisions related to the extension of the share buyback program until November 23, 2006 and the creation of new authorized capital. The authorization relates to up to 10.8 million shares and is valid until May 23, 2010. The shareholders also approved the adjustment of the remuneration of the Supervisory Board. In future, the performance-related element of the remuneration will be linked to earnings per share and not, as was previously the case, to the dividend per share. 22_GfK

GfK GROUP GfK shares Dividend total: 23% up on the previous year The Management Board and the Supervisory Board will propose an increase in the dividend to eur 0.33 per share to the agm. This represents a 10 % increase on the previous year s figure of eur 0.30. The total payout has risen by as much as 23% from eur 9.4 million to eur 11.6 million as a result of the increased number of shares. Since flotation in 1999, GfK has steadily improved its dividend. During this period the payout per share has risen by 200%. Capital increase: share capital increased by 10 % On June 2, 2005 GfK undertook a 10 % capital increase with no subscription rights. 3,146,689 shares were therefore placed with institutional investors as part of an accelerated bookbuilding process at a price of eur 28.70 per share. Issue revenue totaling eur 90.3 million was used to partly refinance the costs of acquiring nop World. The purchase was completed on the previous day, following approval by the monopolies commission in Germany and the usa. As part of the transaction, the share capital of GfK ag was raised from eur 133.7 million to eur 147.1 million against a cash contribution. The market reacted very positively to the transaction. The shares were placed after about an hour and a half. When the bookbuilding process ended after five hours, the capital increase had been oversubscribed three times. Because demand for the new shares was only partly satisfied, the share price rose again immediately after the transaction was completed and closed up above the previous day s level. Shareholder structure: great interest in English-speaking countries The composition of the shareholder base has altered significantly compared to the previous year. The main reasons for this are the capital increase in June and the exercising of options as part of the stock options program for the company s managers. The proportion of the company owned by the largest single shareholders in the company has therefore declined again. Since GfK-Nürnberg e.v. did not participate in the capital increase, its proportion of the share capital has been reduced from 63.8% to 57.3%. The proportion of shares in free float rose from 36.2% to 42.7%. The Management Board and the Supervisory Board hold around 1.1% of the shares. GfK_23

GfK shares GfK shareholder structure as at March 31, 2006 GfK-Nürnberg e.v. 57.3 % Management Board and Supervisory Board 1.1 % Private investors 13.8 % Institutional investors 27.8 % of which usa 11.4 % of which uk 8.6 % of which France 2.5 % of which Germany 2.4 % of which other 2.9 % Interest from institutional investors in the company has increased again sharply. To a certain extent the capital increase met increasing demand. Compared to the prior year, their proportion of the share capital increased from 20.6% to 27.8%. us investment funds in particular became more heavily involved than before. At year-end they held 11.4 % of the shares (prior year: 6.2%) followed by investment funds in the uk with 8.6% (prior year: 5.7%) and France with 2.5% (prior year: 3.1%). In contrast, the proportion held by German investment funds increased to 2.4% (prior year: 2.2%). One likely reason for the considerable interest from Anglo-Saxon and French investors is that GfK s listed competitors are based in these countries. The proportion held by private investors fell slightly from 14.1% in the prior year to 13.8%. Placing in the SDax: index heavyweight GfK has further strengthened its position in the SDax. Over a long period the shares even had the heaviest index weighting. At year-end they ranked No. 2 again, as in the previous year. In contrast, the GfK shares slightly improved their position in relation to market capitalization from No. 48 to No. 47. In relation to average market trading volume of the last 12 months, GfK ranked No. 74 at the year-end (prior year: No. 67). Average trading volume on the Frankfurt stock market and on xetra increased on a cumulative basis to 19,400 shares per day (corresponding period in the prior year: 14,500 shares). 24_GfK

GfK GROUP GfK shares Communications: further improved GfK attaches great importance to detailed, comprehensible communications on the same level with investors, analysts, and financial journalists. It regards dialogue with institutional and private investors as the crucial means of explaining GfK s business model and activities clearly and comprehensibly. Prompt, but more importantly, relevant information for all interested parties is key to the communications strategy. In addition to the Annual General Meeting, the company gave presentations last year at 10 international investor conferences, 2 dvfa analysts meetings, 8 roadshows in the usa, England, France, Germany and Austria, 9 conference calls, 175 individual conversations with fund and sales managers, the Munich Stock Exchange Day attended by more than 3,000 investors and the first Nuremburg Stock Exchange Day, initiated by GfK and attended by around 1,000 delegates. Investor relations work: award-winning In 2005, GfK once again received an award for its commitment to communications with its shareholders. The bird (Best Investor Relations Germany) award from investment magazine, Börse Online, represents the views of many private investors on how well the 160 largest listed public limited companies perform in relation to their capital market communications. Having been honoured last year with first place in the overall ranking, the company has this year come second in the Small Caps category with a total of 70.41 points, very close behind the No. 1 with 70.50 points. GfK is very pleased to receive so much recognition and also regards this as a further incentive to continue on its course of open and reliable communications in future and to steadily develop and improve its efforts in this area. GfK_25

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GfK Special Understanding the consumer the key to sustained market success Knowing what consumers want, think and feel is the key to ensuring corporate success and sustainability. In increasingly competitive markets, marketing and sales decision-makers are becoming more dependent on detailed and target group-based information to identify different consumer attitudes and behavior. GfK provides knowledge relating to markets, brands and people in more than 70 countries in all economically relevant regions of the world. Reports from six countries highlight the differences in lifestyles, behavior and attitudes between the populations. GfK SPECIAL Germany Page 28 Caught between fear of the future and a sense of happiness. Germans and reunification 17 years on. Western and Southern Europe Page 34 Italy bridging world cultural heritage and corporate globalization. Living the dream: the population of the perfect tourist destination face up to current economic reality. Northern Europe Page 40 uk black humor and living for the present. The Brits maintain their unique lifestyle despite the effects of globalization. Central and Eastern Europe Page 46 Russia from socialist state to modern market economy. The population is adapting its attitudes and requirements to the advanced market and fast-moving economy. America Page 52 usa from freedom of choice to consumer enthusiasm. American consumers are combining their constitutional right to freedom of choice with an infinite passion for consumption. Asia and the Pacific Page 58 Japan an unusual blend of cultural tradition and economic power. The hallmark of this rich, mature market is the demanding consumer who focuses on quality. usa consumption nirvana. Nowhere else do consumer goods manufacturers, service providers, retailers and the media invest more in attracting and retaining customers. GfK_27

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Germany: Caught between fear of the future and a sense of happiness 17 years after reunification, Germany is still searching for a common self-image. This is mostly evident in the various discussions regarding German identity and mentality at a time where Europe and the global economy are dominating forces. The search for this new German identity is also reflected in consumer behavior, with the latest trends revealed by market researchers and opinion pollsters. GfK SPECIAL Germany Christoph Metzelder plays defense for Borussia Dortmund and Germany s national football team. In Germany s Zeitwissen magazine, he asked the most important of all German questions: What is considered to be typically German? There were many highly interesting answers, one of which was offered by geographical and cultural expert, Hans-Dieter Gelfert, author of Was ist deutsch? (What is German?): The most German characteristic of the Germans is their concern that they cannot be as German as they would like to be. They complain about their lack of national pride and at the same time object to every form of nationalism. However, according to Hermann Brusinger, also a geographical and cultural expert and author of Typisch deutsch (Typically German): It is impossible to define typical in any case, the German population is far too varied for that. In fact, the image of the Germans differs through the eyes of geographical and cultural experts. In his masterpiece, The Man Without Characteristics, Robert Musil has the perfect explanation. In the words of the great Austrian author: It is always wrong to simply explain a country s traits by the character of its population. This is because even just one member of the country s population has at least nine roles one professional, one national, one state, one class, one geographical, one gender, one conscious, one subconscious and maybe even one more private character. This final observation is shared by many of today s identity thinkers who claim that we cannot refer to just one private identity, since every person indeed has several. Highly developed culture of whining According to Musil, an individual s identity and character remain stable for only a relatively short period in relation to the overall passage of time. And this is precisely the problem faced by market researchers today when displaying the opinions and behavior of an entire nation as precise facts and figures. It is also why market research needs to be repeatedly updated. The results are not always surprising: sometimes they fall almost exactly in line with the general preconceptions. Responses to the question How happy are you with your life? asked by Roper Reports Worldwide, often confirm the typical notion of whining Germans. Only 7% put a tick against very happy, which is 13 % lower than the international average. The Japanese claim to be less satisfied with 4% and the Russians with 6%, while the Americans are among the happiest people in the world with 40%. So is the whining culture in Germany a question of mentality? If you ask Germans what bothers them the most, the answer will nearly always be unemployment. This was the result of the Challenges of Europe study conducted by GfK-Nürnberg e.v. The highest priority by far for Germans is the creation of new jobs, with 81% believing that this is paramount. The average figure for this in Europe stands at just 37%. There are, however, six other European countries in which unemployment is on the population s list of worries. Nowhere in Europe do consumers pay more attention to the price of food than in Germany. GfK_29

»While the Americans prefer sightseeing, the Germans enjoy lazing around in the sun (48%) and eating out.«population and country Population density Per capita gdp/ disposable income Average age/household size German values post materialistic Overall, there is very little separating the common set of values held by the Germans and their neighbors. 86% consider individuality to be the most important general value in their lives and want to remain true to themselves. The same applies to 90% of Italians and 89 % of Britons, according to the findings of a study entitled Consumers in Central and Eastern Europe, carried out by GfK Lebensstilforschung. Around 76% of Germans renounce materialism, stating that character development is more important than earning a lot of money. Even in the acid test, where respondents had to decide between character development and the materialistic value of striving for success and prosperity, the post materialistic outlook scored 62%. What they think and how they live Germany Over 82 million in an area of 357,000 km 2. 87% live in urban areas. 230 per km 2. Berlin 3,804 per km 2, Munich 4,149 per km 2. eur 25,500/eur 17,700. 42.2/2.1 81% of Germans say unemployment is the most important challenge facing their country, compared to a European average of 37%. With a savings ratio of nearly 11%, Germans are among the best savers, along with the Belgians, French, Irish, Italians and Portuguese. The corresponding figure for Australia is minus 2.2%. Germans work an average of 22.8 hours a week, nearly five hours less than Russians. They listen to an average of 11.5 hours of radio a week, compared to an international average of 8 hours. 62% say price is the most important factor when buying food. The international average is 54%. 52% spend their vacations at the seaside, compared to an international average of 38%. 7% describe themselves as very happy, compared to an international average of 20%. 78% say financial security is important to them, compared to an international average of 64%. Sources: GfK Custom Research Worldwide, GfK European Consumer Study, GfK Challenges of Europe study, Roper Reports Worldwide, GfK Regional Research. The European Consumer Study carried out by the GfK-Nürnberg e.v. found that German consumers were more concerned about price than quality and favored traditional products rather than the latest trends. This reflects another discovery by GfK Lebensstilforschung (Lifestyle Research), which stated that 63% even wanted to reduce their consumption. Individuality also appeared to be losing ground when it came to purchasing habits. Just 24% of consumers want to buy things that others do not have, while this is an irrelevant consideration for 76 %. Germans like relaxing holidays Much more important for a happy life is travel. This is true of almost all countries, with the exception of Russia, where only 26% expressed an interest in the activity. Yet 40% of Americans, 53% of Japanese and 46% of Germans would not want to give up this right. A study conducted by GfK and The Wall Street Journal Europe on holiday conventions in Europe and the usa uncovered some interesting information. The Greeks, Fins and Austrians like to go on activity holidays and, while the Americans prefer sightseeing, the Germans enjoy lazing around in the sun (48%) and eating out (36%). Between these two activities comes walking (41%). What about those aged 50+, the silver generation? These gray-haired individuals are lively and affluent and have an important role to play and not just in terms of tourism. The proportion of fast moving consumer goods purchased by this group has risen from 29.2% to stand at 32.2%. The average purchasing power of Germans aged 50+ currently totals 21,244 euros, which is over 2,000 euros more than that of those aged 50 and under. Disproving the long-held prejudices, members of the silver generation are happy to part with their money. And they are living longer, as it is expected that today s average 60 year-old woman will live for another 24 years and an average 60 year-old man for another 20 years. As to how Germans live and think, it appears that Musil s theory was right and that new definitions and studies are necessary to describe what is regarded as being typically German. For many years, 4 in 5 Germans have believed that unemployment is the country s biggest problem. 30_GfK

GfK_31 GfK SPECIAL Germany

32_GfK Germany: A leading force in the local and global markets

GfK is Germany s oldest market research company, established 72 years ago at the University of Erlangen-Nuremberg. This is where professional market research in Germany originated and Nuremberg is still the main center of market research in the country, thanks in no small part to the success of GfK, which has been the market leader for more than twenty years. The Group has always been a pioneer of professional innovation in German and European market research. In 1936 it carried out the country s first brand study, on the cross logo of pharmaceutical company Bayer, and a year later it published the first German purchasing power figures, which are now also produced for the rest of Europe and overseas. In the mid-1950s, GfK joined the European frontrunners when it adopted consumer panel research after its development in the United States. It also began expanding its international network at a very early stage, and in 1960 co-founded Europanel, which, together with British partner Taylor Nelson Sofres, it today uses to carry out continuous studies of consumer purchasing patterns in 26 European countries. The GfK consumer climate study, launched in Germany in 1983, now covers Britain, Denmark, Austria, Sweden, and a series of central and eastern European countries. In 1985, the company began producing German tv ratings, first for the state-owned broadcasters and later for the Television Research Partnership (agf). Today, GfK is the country s undisputed market leader, with a market share of well over 25%. Awards Investor Relations was ranked second in the S-Dax by investors surveyed by the German business magazine, Börse Online The Annual Report was the third best of any S-Dax company according to Manager Magazin GfK s international Growth from Knowledge advertising campaign won the global reddot award At 7%, very few Germans would say that they were very happy. GfK SPECIAL Germany 2005 and 2006 highlights The most important event of the year for German employees was GfK s acquisition of nop World. After the acquisition of GfK nop, Germany is the country that still accounts for the largest part of GfK s sales. In the first quarter of 2006, GfK Fernsehforschung was asked by agf to switch to a new measuring methodology for its tv household panel in mid-2007. Selected companies Germany Segment market rating Custom Research No. 2 GfK Marktforschung GfK prisma GfK macon Retail and Technology No. 1 GfK Marketing Services encodex International Beyen Marktforschung media control GfK international Consumer Tracking No. 1 GfK Panel Services Media No. 1 GfK Fernsehforschung Media Markt Analysen enigma GfK HealthCare No. 1 GfK HealthCare GPI Kommunikationsforschung GfK_33

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Italy: Bridging world cultural heritage and corporate globalization Italy continues to be a dream destination for travelers from every corner of the world. But like all other countries, the home of the Roman Empire, the Renaissance and Rossini has had to face up to the political and economic reality of the 21 st century. Here, market researchers share their insight into the life and habits of modern Italians. GfK SPECIAL Italy For centuries, crowds of writers and artists, musicians, sculptors, journalists and columnists from across the globe have led the way to this magnificent country that is defined by the peaks of the Dolomites in the North and Sicily s Capo delle Correnti in the South. People come here to seek the spiritual and cultural soul of Europe, admire the most exquisite pieces of art, or simply in search of happiness. I can truthfully say only in Rome did I feel what it is to be a human being. Never since, have I felt these dizzy heights, this joyous sensation, said Johann Wolfgang von Goethe, Germany s most famous traveler to Italy. It is in Verona that Romeo and Juliet find their short but perfect happiness and enter world literature. The quick-witted Mark Twain expressed some simple truths in his The Innocents Abroad: I would like to remain here. I had rather not go any further. A rich heritage of art and design No other country boasts as many Unesco world heritage sites of cultural and natural beauty as Italy a comparatively small country with a surface area of less than 300,000 km 2. Concentrated in such a limited space are 42 such sites. In total, 812 monuments in 137 countries across the world have been given the much sought after Unesco recognition. Italy is in the fortunate and privileged position of having inherited an extraordinary and immense wealth of cultural and historical value, accumulated over centuries. The country has traces and precious proof of the wealthiest and most prolific movements in the history of European and Mediterranean art. Population and country Population density Per capita gdp/ disposable income Average age/household size What they think and how they live Italy 58.5 million people in an area of 301,000 km 2. 67% live in urban areas. 194 per km 2. Rome 1,987 per km 2, Milan 7,500 km 2, Naples 8,486 km 2. eur 17,500/eur 15,800. 41.8/2.6. Reducing unemployment is the number one priority for Italians. 38% say this is their greatest concern, compared to 81% of Germans and a European average of 37%. 34% say they are worried about terrorism, as against 34% in the us, 37% in Russia, and an international average of 23%. 25% are concerned about price and purchasing power trends, compared to a European average of 15 %. Italians work an average of 21.5 hours a week, well below the international average of 23.8 hours. 63% say quality is the most important criterion when buying food. The inter national average is only 46%. 9% say they are very happy, compared to an international average of 20%. Only 7% say that luxury and a second car are important to them. The inter national average is 19 %, and the us figure is 25%. Sources: GfK Custom Research Worldwide, GfK European Consumer Study, GfK Challenges of Europe study, Roper Reports Worldwide, GfK Regional Research The quality of food is more important to Italians than to any other European nation. GfK_35

»Italy is in the fortunate and privileged position of having inherited an extraordinary and immense wealth of cultural and historical value, accumulated over centuries.«these were the words of Giovanna Melandri, Italy s Minister of Culture and Sport until 2001, in an article for Germany s Die Zeit weekly newspaper, in which she went on to admonish that this rich cultural heritage must not be squandered. Italians have also championed modern product design and become world-renowned for it. The Design Dictionary Italy states that design has become synonymous with Italy. Furthermore: No other country boasts anywhere near as many designers and designs in such a small region. And nowhere else are there as many companies that have pursued their designs unswervingly, in many cases over several decades. The Museum of Modern Art in New York described Italian design as a global force originating from a country whose culture has always been based on the pursuit and tradition of the beaux arts and sophisticated craftsmanship. Italy is also the foremost contender in the global fashion arena, with fashion houses such as Versace, Ferré, Gucci, Armani and Prada flying the flag for this country. Italians are non-conformists Italian culture largely forms the self image and collective identity of this nation, but equally in fluential are the sharing of a common set of values, family and region of origin. Market and opinion researchers come across these correlations over and over again in their work. In the 21 st century, an era of collaboration on developing the European Union, the collective values of the different nations only vary in terms of their weighting. Almost all Europeans agree on the subject of individuality. 90% of Italians are opposed to conformity of any kind and want to stay true to themselves. In Germany, 86% expressed this opinion. These are the results of a European study carried out by GfK Lebensstilforschung (Lifestyle Research) which included questions about life and wealth. Post-materialistic values such as cultivating their individuality was more important to 73% of Italians than earning a lot of money. Mastering the challenges of globalization The day-to-day problems of Italians are not dissimilar to those of their European neighbors. According to the Challenges of Europe GfK survey, unemployment, huge price increases and the feeling of having little purchasing power are shared concerns. As a result bargains are becoming increasingly popular with Italians, accompanied by a boom in retail brands. At the same time, consumer spending is decreasing. In Italy, the clear divide between the wealthy north of the country and the predominantly poor south, or mezzogiorno, persists with politicians failing to close the gap. Italy largely faces the same challenges that globali zation produces for all traditional industrialized nations. The Italy of the days of Goethe or Twain has long paid its dues to modernization. German journalist Joachim Fest wrote reassuringly: To the outside world it may seem as though Italy has been harder hit by the devastation of our age than other countries. But as if by miracle, or perhaps merit, the country has succeeded in retaining its soul. Roma Eterna and Italy s eternal monuments with European flair will continue to attract visitors from all corners of the world who trust in the wisdom Georg Christoph Lichtenberg put into words: No matter how old, knowledgeable, wise and sophisticated you are, a journey to Italy will always provide inspiration for mind and spirit. Very few Italians believe that luxury and fashion are important to their quality of life. 36_GfK

GfK_37 GfK SPECIAL Italy

38_GfK Western and Southern Europe: The regional number 1

For the first time ever, the Western and Southern Europe region exceeded GfK s home country, Germany, in terms of sales and number of employees. This was mainly because the nop World acquisition meant that the Italian com pany GfK Eurisko was added to the regional network. It was here that GfK began its international expansion in 1960 by establishing a subsidiary in Austria. In the late 1970s, it set up further companies in the Netherlands, France and Switzerland. Today, it is the leading market research company in Germany, the Netherlands, Austria and Switzerland, the second largest in Belgium and Italy (since 2002), and the third or fourth largest in France, Greece, Italy and Portugal. GfK s Retail and Technology and Media divisions are the regional market leaders, with continuous tv and radio audience research contracts in Belgium, France, the Netherlands and Switzerland. The electronic measuring technology used in this type of media research was developed by GfK subsidiary Telecontrol, while more recently GfK Eurisko created a similar tool for measuring radio audiences electronically. 2005 and 2006 highlights The custom research company GfK cbi is being incorporated into the newly consolidated GfK Eurisko, making GfK Italy s leading custom research provider. GfK initially acquired 33% of the Swiss pharmaceutical research company GfK Research Matters, which specializes in custom and tracking studies of cancer medication and therapy. Since January 1, 2006, the Group has owned 88% of this company. The Group has also begun measuring Belgian radio station and program reaches for cim, the radio research committee. It began using Mediawatch technology, used to electronically measure radio audiences, in October 2005. GfK is bidding for the electronic radio ratings contract in uk using the GfK Radiometer, and this technology is on a shortlist of three for a radio research contract in the United States. On average, Italians work 2 hours per week less than other Europeans, North Americans and the Japanese. GfK SPECIAL Western and Southern Europe Western and Southern Europe Market Selected rating companies Belgium No. 2 GfK Audimetrie GfK Benelux Marketing Services Division Belgium GfK Custom Research Worldwide Significant GfK France No. 4 audimedia GfK Marketing Services France GfK Custom Research France ifr France, m2a, MarketingScan Greece No. 3 GfK Market Analysis Italy No. 3 GfK Eurisko, iha Italia GfK Marketing Services Italia Netherlands No. 1 GfK Benelux Marketing Services GfK Panelservices Benelux Intomart GfK Austria No. 1 fessel-gfk Institut für Marktforschung mmo Media-Market-Observer Portugal No. 3 GfK Portugal Marketing Services Intercampus, Metris GfK Switzerland No. 1 iha-gfk, Telecontrol GfK Research Matters Spain No. 5 GfK emer Ad Hoc Research GfK Marketing Services España Business divisions Custom Research Retail and Technology Consumer Tracking Media HealthCare GfK_39

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UK: Black humor and living for the present Ascot and the Royal Family, Big Ben and Tower Bridge, raincoats and umbrellas, Guinness and afternoon tea are not the only elements of what is considered very British. The most famous, perhaps, is black humor. The uk lifestyle, which is measured by a scale of personal and consumerbased values, differs in fact from that of the rest of Europe. Yet the effects of globalization are even being felt in the uk. GfK SPECIAL UK Having a sense of humor means looking on the bright side. But sometimes it seems that travelers to the uk lose their sense of humor. A short, sharp example of British humor: Patient to doctor: Doctor, how long have I got? Doctor: 10. Patient: 10 what? Days? Weeks? Years? Doctor: 9... The British sense of humor is a brand with a long tradition. Her Britannic Majesty s government even goes to the trouble of including a reference on its ambassadorial webpage. Trouble indeed: The British sense of humour is often a source of mystification for other nations, and visitors to Britain may claim that our humour is incomprehensible. But what is typical British humor exactly? According to British government experts, it is a particular attitude of mind which accentuates the absurd, the offbeat and even the grotesque. They continue to describe it a national virtue: Possessing a sense of humour is usually regarded as a favourite virtue of the British. Of course, the fact that this very specific virtue has a long and glorious history should not go unmentioned. As a tax collector in the Port of London, Geoffrey Chaucer (1340 1400) was very well-informed about his fellow citizens. In his famous Canterbury Tales, he introduced smutty slapstick humor to the canon of world literature. The next biggest literary giant of all time after Homer was William Shakespeare, who left his own lasting impression on British humor. Society with high purchasing power Having a sense of humor means looking on the bright side. Yet the majority of Brits are not among the world s happiest people. In a survey carried out in the uk by GfK nop on quality of life satisfaction, the findings were that just under one third professed to be very happy. In Australia, a member of the Commonwealth since 1931, the figure was 46%, followed by the usa with 40%. However, Britons remain far above the international average of 20%. The uk has a population of around 60 million, of whom just over 50 million live in England, almost 3 million in Wales, 5.1 million in Scotland and 1.7 million in Northern Ireland. The social structure of the population is clearly divided. The 2005 GfK European Consumer Study recorded the typical social divisions of a class society, with a lower working class representing 26% of the population and the middle class and above account ing for 20%. One third of Britons would say they were very happy far more than other Europeans. GfK_41

»Unlike in most other countries in Europe, in the uk unemployment is not currently an important subject.«population and country Population density Per capita gdp/ disposable income Average age/household size However, uk consumers are still among those with the greatest purchasing power in Europe. With exchange-adjusted purchasing power of 17,700 euros, the Brits are in fifth place in the European league table. The fact that the uk s capital city, London, is Europe s major financial market place contributes significantly to the uk s high purchasing power. All the big international banks are represented there, and this also applies to insurance companies, major management consultants, accountants and auditors and lawyers. The British are also successful in global high-tech industries such as telecommunications, it, biotechnology, chemicals and pharmaceuticals, as well as automotive and electronics. What they think and how they live 42% of Britons say crime is their country s biggest problem, compared to a European average of 13 %. 32% say they are very concerned about the health service, whereas the European average is 14 %. uk Some 60 million people, living in an area of 243,000 km 2. 88% live in urban areas. 247 per km 2. London: 4,700 per km 2. eur 21,5000/eur 17,700. 41.8/2.4. 39% describe sightseeing as one of their three favorite vacation activities. The international average is 32%. 48% visit a bar or pub once a week, as against an international average of 22%. 11 % go clubbing at least once a week. The international average is 5%. 32% describe themselves as very happy. The international average is 20%. 58% say having control over their own lives is most important to them, compared to an international average of 47%. Sources: GfK Custom Research Worldwide, GfK European Consumer Study, GfK Challenges of Europe study, Roper Reports Worldwide, GfK Regional Research. Unlike in most other countries in Europe, in the uk unemployment is not currently an important subject. According to the Challenges of Europe GfK survey, only 4% of the population are worried about unemployment at the moment. Of the nine countries surveyed, the uk is by far the least exercised by unemployment. In comparison, 81% of responses constitute dramatic evidence that the subject of unemployment is clearly at the top of the current list of German worries. Featuring at the top of the British list of worries are completely different concerns from those expressed by the majority of other European countries. The Brits worry less about finances and more about social problems: the growing crime rate, an inefficient health system, immigration from former colonies and eu countries, the tax system and education. The majority are easy going As consumers, above all, the Brits want to stay true to themselves: rated by 89%, individuality is given top priority. In the post-materialistic cult of the individual, with 68%, the British have given a distinct thumbs down to earning a lot of money. With 70% saying they prefer to play it safe than to go in for risks, the Consumers in Central and Eastern Europe study conducted by GfK-Lebensstilforschung (Lifestyle Research) also shows a high level of living for the present: 74% take things as they come, 65% are enjoying life here and now and don t think about tomorrow. This reflects the fact that 65% of Brits are less career and more leisure minded, believing that leisure time is more important than a high salary. British consumers consider quality to be more important than price. There is no demand for instant gratification and bargain goods, which emphasizes an element of loyalty to the inherently British lifestyle. Raincoats and umbrellas have never gone out of fashion in the uk. How very British! 42_GfK Like most of their Western and Southern European neighbors, the majority of Britons feel that leisure is more important than a career.

GfK_43 GfK SPECIAL UK

Northern Europe: On course for expansion GfK s business in Northern Europe expanded particularly strongly in 2005, mainly as a result of the nop World acquisition. The Group became one of the biggest market research companies in Britain, which is Europe s biggest market and the second largest in the world. GfK nop, which incorporates the business of GfK Martin Hamblin, GfK Media and GfK Marketing Services, ranks second in the uk overall. Sweden was the first country in Northern Europe which GfK used as a platform to expand its international network. GfK Sverige was established in 1981 following the launch of companies in Denmark and Norway. Today, studies in Estonia, Finland and Lithuania are carried out from Sweden, while studies are carried out in Ireland from the uk. 2005 and 2006 highlights GfK s operations under the GfK nop umbrella were reorganized. Following the integration of GfK Martin Hamblin and GfK Media, GfK nop s services are provided by three divisions: Custom Research, Media and HealthCare. 44_GfK

GfK Media has begun a three-year project for the bbc to measure the popularity and acceptance of radio and television programs. Each day, 15,000 adults and 1,500 four to fifteen-yearolds are surveyed in the largest custom media research project of its kind in the uk. A new contract began with itv, the uk s largest tv broadcaster, to carry out data collection in a survey of 5,000 adults, similar to that carried out for the bbc. GfK Sverige s consumer climate survey contract with Sweden s National Institute for Economic Research has been extended by a further three years. Awards At the Automotive Conference 2006 in Lausanne, Switzerland, organized by international market research association, esomar, GfK nop uk won the Best Paper award. Britons believe that being in control contributes to a good quality of life. Northern Europe Market Selected rating companies Denmark No. 3 GfK Danmark Finland GfK Marketing Services Nordic uk No. 2 GfK nop GfK Marketing Services GfK Animal Health uk Norway No. 10 GfK Norge Sweden No. 4 GfK Sverige Business divisions Custom Research Retail and Technology Consumer Tracking Media HealthCare GfK SPECIAL Northern Europe GfK_45

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Russia: From socialist state to modern market economy Since the Russian Federation, or the Rossiskaja Federacija, took the plunge into the market economy, fast and furious developments have happened in Russia, with all the attendant social and economic implications of a change of such epic proportions. Despite this, Russia is fast becoming a major market for western companies and consequently, professional market and opinion research has become an important marketing tool. GfK SPECIAL Russia Even in the unsentimental world of business, the merest mention of business in relation to Russia often prompts a quotation from the romantic poet and friend of Heinrich Heine, Fyodor Tyutchev (1803 1873), which roughly translates as Don t try to understand Russia, just believe in it. But bosses know that simply believing is not enough to be economically successful in Russia. It is essential to know as much as possible about the people of this vast country. Population and country Population density Per capita gdp/ disposable income Average age/household size Russia Around 145 million people live in an area of 17,075,000 km 2. 74 % live in urban areas. 8,5 per km 2. Moscow: 9,485 per km 2. eur 1,800/eur 1,400. 38.2/2.8. Covering over 17 million km 2, the country is almost twice as large as the usa. More than 145 million people live here (usa: 296 million), of whom two thirds live in the European area. Almost 80% are Russian nationals while the rest of the population consists of over 100 minority nationalities. There are dramatic economic differences between the capital Moscow and its suburbs, home to around 16.8 million citizens, and the country s 88 other regions. Almost three quarters of the country s capital is concentrated in and around Moscow and almost all large corporations have their offices on the banks of the Moskva. The current gdp stands at around 380 billion euros. Russia is expecting an increase in gdp of 5% for 2005. As a comparison, gdp in 2004 for the usa, the single most powerful economy, stood at 8.621 billion euros. What they think and how they live 39% of Russians are worried about not having enough money to pay their bills, compared to 25% of Italians and an international average of 30%. 32% are concerned about price and purchasing-power trends, compared to the European average of 20%. 25% are concerned about their housing situation. The international average is 11%. With an average working week of 27.8 hours, the Russians are well above the international average of 23.8 hours and the Italian figure of 21.5 hours. 42% spend their vacations at home. The international average is 19 %. 26% enjoy reading when on vacation, compared to an international average of 15 %. Only 6% describe themselves as very happy, whereas the international average is 20%. 53% say that having an interesting job is the most important quality of life indicator, compared to an international average of 46%. Sources: GfK Custom Research Worldwide, GfK European Consumer Study, GfK Challenges of Europe study, Roper Reports Worldwide, GfK Regional Research A particularly large proportion of Russians say they don t have enough money to live on and pay their bills. GfK_47

»The fact of having to cope with many more products, services, individual brands and brand groups has quickly led to the creation of a modern consumer group.«consumption in the land of poets, thinkers and composers Russia, like Germany, is a land of poets, thinkers and composers, honored and valued by citizens. It is therefore to be expected that culture and education are rated very highly. Value systems, religion and philosophy are popular topics of conversation, how ever, it is no longer only spiritual fulfillment that Russians strive for. After many years of going with out, according to GfK market researchers, consumption has now become a channel for self fulfillment, along with the search for personal individuality. Russians demand higher functionality from the products they buy, but they also seek an emotional element. The fact of having to cope with many more products, services, indi vidual brands and brand groups has quickly led to the creation of a modern consumer group. A multitude of consumer types As with consumers in the west, Russian consumers cannot be pigeonholed. GfK rus has, in fact, identified seven types of consumers among the Russian population. With 18 %, the settled consumers account for the largest group. These people believe reliability and quality are the most important. They are not particularly interested in innovation and tend to go for established brands, although they are price conscious. The second place is shared by the demanding consumers and traditional consumers, each with 17 %. For the group of demanding con sumers, prestige is more important than reliability and quality. They are attracted by innovation and have above-average susceptibility to media influence. The traditional consumers, on the other hand, like tried and trusted products, but have little concern for quality. They prefer to shop in the old shops of the Soviet era and like to stock up on goods. This group mainly comprises older men and pensioners and generally has a below average income. In third place with 16 %, the GfK researchers have discovered the innovative consumers. The innovative consumers are quick to embrace the new. They also devote a lot of time to leisure activities and spend a great deal on health and social status. With 13 %, the next group comprises the self realized consumers. They have mostly fulfilled their consumer needs. Very conservative in their consumer behavior, this group has little interest in new things. The spontaneous consumers with 12 % and the thrifty consumers with 7% bring up the rear of the Russian consumer typology. A mix of old and new ideals In the rapid swing towards a modern market eco nomy, the people of Russia have kept their values which, as a consequence of the years of alliance, are identical in many ways to those of Eastern Europe. These values mainly include puritanism, family focus and individuality. Perhaps the Russians interpret the concept of individuality differently from consumers in other countries which have been veering more towards the American way of life since the end of the Second World War. Dr. Yevgeny Yasin, economist and Russian Minister of Finance from 1994 to 1997, points out that in Russia, the significance of community has a long tradition in which modern individualists still believe. Collectivity remains a central bond and will clearly never quite be overcome by the desire for self realization. There is still a great deal to learn about Russia. Even the experts have not ventured to speculate on whether Fyodor Tyutchev s thoughts on un fathomable Russia will be consigned to literary history anytime soon. 48_GfK Russians are more likely to stay at home during their vacations and are also more likely to read for enjoyment than their European and American counterparts.

GfK_49 GfK SPECIAL Russia

50_GfK Central and Eastern Europe: Early presence pays off

Fifteen years ago, Central and Eastern Europe were a terra incognita for many in the west. While the gap between east and west has narrowed since then, the effects of decades of separation are still apparent. As global corporations established a strong presence in the region and their local competitors made immediate efforts to adapt to the new market situation, the market research sector inevitably expanded. GfK was among the first to move into this region. The Group opened its first office there before the fall of the iron curtain in 1989, in the form of GfK Hungária. This was only the second foreign-owned company of any kind to be established in Hungary, and was followed in rapid succession by GfK Polonia in Warsaw, GfK Praha in the Czech Republic and GfK-rus in Russia. The region now comprises 20 companies in 16 countries. Today, GfK is the biggest market re search company in Romania, Slovakia, Slovenia and the Ukraine; the second largest in Bulgaria, Croatia, Russia, the Czech Republic and Turkey; and ranks third or fourth in Bosnia-Herzegovina, Poland, Serbia and Montenegro, and Hungary. 2005 and 2006 highlights The newly established GfK Kazakhstan has launched its Custom Research and Consumer Tracking operations. GfK Polonia celebrated its 15 th anniversary with a client conference and gala event, while employees and clients of GfK-rus will be celebrating its 15 th year in the first half of 2006. A market research course was estab lished at the Higher School of Economics in Moscow, thanks to the initiative and cooperation of GfK-rus. Awards GfK Belgrade has won the Coca-Cola Company s Strategic Consumer Insights award for excellence in marketing consultancy. Russia s consumer protection association has granted an award to GfK-rus for its outstanding contribution to the creation of a modern consumer market. GfK Praha and GfK Slovakia won Golden Ducat awards at the Czech business summit for their services to industry and retail. Central and Eastern Europe Market Selected rating companies Baltic Rim: GfK Marketing Services Nordic Estonia, Latvia, Lithuania Bosnia- No. 3 GfK Bosnia Herzegowina Herzegovina Bulgaria No. 2 GfK-Bulgaria Kazakhstan GfK Kazakhstan Croatia No. 2 GfK Croatia Poland No. 3 GfK Polonia Romania No. 1 GfK Romania Russia No. 2 GfK-rus Serbia and No. 4 GfK Belgrade Montenegro Slovakia No. 1 GfK Slovakia Slovenia No. 1 GfK Gral-Iteo Czech Republic No. 2 GfK Praha incoma Research incoma Consult Turkey No. 2 GfK Türkiye Ukraine No. 1 GfK Ukraine Hungary No. 3 GfK Hungária Business divisions Custom Research Retail and Technology Consumer Tracking Media HealthCare GfK SPECIAL Central and Eastern Europe The majority of Russians say an interesting job is important to them. GfK_51

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USA: Freedom of choice and consumer enthusiasm The unreserved belief in individualism has made the United States of America the most dominant political and economic superpower and has raised consumption to a central position within the commonly held set of values. Consumption is paramount to American consumers, whatever their ethnic differences. GfK SPECIAL USA The Americans are world champion consumers. According to the us Census Bureau, an average household spends over 1,200 euros per week, and not just on fast moving consumer goods. According to Peter Francese s article in the trade magazine, Advertising Age, Americans would rather spend any spare money than save it. They shop because they enjoy it. Consumption in the usa is about more than just shopping. It is a manifestation of the basic right to life, freedom and happiness, as promised to all citizens in the United States Declaration of Independence. This apparently everyday activity reflects elements of a collective American identity which is usually hard to define in a culture with such ethnic and religious diversities. American identity based on freedom of choice In most societies, the common history and the common religion are what form the basis of the collective understanding among citizens. The American identity, however, is cut from an entirely different cloth. For many, America is still the land of endless opportunity, the country where everyone is in control of their own destiny, and could go from washing dishes to becoming a millionaire. Regardless of which religion or community you belong to and whether you were born in this country or not, the crucial fact is that you have freely made the decision to be an American. According to Marc Pachter, Head of the National Portrait Gallery of the Smithsonian Institute in Washington d.c., this right to freedom of choice embodies the central dynamic and the actual value of society as a whole. It bridges all the cultural differences in this most traditional of immigrant countries. The belief in the opportunity of striving for a better life is also a prominent feature of any consumer culture. Consumer enthusiasm strengthens the economy With their passion for consumption, Americans make a considerable contribution to their national economy, which produces around a fifth of global income. gdp is around three times higher than in Japan, which holds second place in world rankings, and around five times higher than Germany, in third place. The us service sector makes the most prominent contribution another fundamental basis for the country s economic power, which puts the significance of the formerly domineering manu facturing industry sharply into perspective. Today, 296 million inhabitants live on almost 9.9 million square kilometers. 63 million people arrived in America between 1820 and the end of the 20 th century alone. Of those, over seven million were German, over five million were British and over five million were Italian. At 14 %, Latin Americans are now the largest ethnic minority within the population. In 2000, they overtook the African Americans and Australians are more likely than any other nationality to describe themselves as very happy. GfK_53

»The belief in the opportunity of striving for a better life is also a prominent feature of any consumer culture.«population and country Population density Per capita gdp/ disposable income Average age/household size Americans, who are currently Number 2 with 13 %. White Americans currently account for almost 70% of the us population. The population consists of 112 million households, which mainly comprise the traditional family struc ture of parents plus one or two children. 85% of Americans over 25 have a high school diploma, 53% have been to university and 36% have graduated from university. The average net household income is around 36,600 euros. Here, the gap between rich What they think and how they live USA 296 million in an area of 9,931,000 km 2. Of these, 77% live in urban areas. 30 per km 2. Los Angeles 3,004 per km 2, New York 10,359 per km 2, Manhattan 25,835 per km 2. eur 31,700/eur 24,600. 36.3/2.6. 37% of Americans are concerned about not having enough money to live on, a figure exceeded only by Russians, at 39%. The international average is 30%. The us, Canada and Australia are the only oecd countries with negative savings ratios. Americans spend more of their waking hours with their spouses than any other nationality, at 27.7 hours a week compared to the international average of 23.4 hours. They also watch more tv than people in any other country: 19 hours a week, compared to an international average of 16.6 hours. They are also more likely to describe themselves as very happy than people in any other country. 40% say this is true of them, while the international average is 20%. 72% say owning their own home is important to them, compared to an inter national average of 60%. Sources: Roper Reports Worldwide, GfK Regional Research and poor is not as pronounced as in Russia or China, but statistics show that 20% of households earn 50% of the country s total income and the lowest 20%, just 3%. The American dream lives on So how much are traditional values such as the American dream or the right to the pursuit of happiness, quoted in the Declaration of Independence, still relevant today? The survey results are clear: the vast majority of Americans, almost 80%, still firmly believe in the American dream. 55% believe they are on their way to fulfillment and 10 % say they have already achieved it. In matters of attitude to life and personal circumstances, it appears that despite some unifying ideals, rifts have emerged within the population which challenge the concept of the American dream, such as the issue of the current financial situation of consumers: 21% of whites claimed to simply live from day to day, compared with 33% of African Americans and 38% of Latin Americans. Although the consumer culture is often a contentious issue, the fact remains that it is part of the innate sense of American national pride. No other than Andy Warhol, icon of American pop culture, once pinpointed the roots of this: What s great about this country is that America started the tradition where the richest consumers buy essentially the same things as the poorest. This was echoed only recently by an l.a. Times columnist s opinion that it is easy to criticize the American consumer culture, but we should not overlook the fact that it was precisely those loyal American consumers that carried the American economy through the burst of the dotcom bubble, 9/11 and a series of major hurricanes. Shopping and consuming are a passion in the United States, which is one of the few countries with a negative savings rate. 54_GfK

GfK_55 GfK SPECIAL USA

America: In the league of the top ten companies Barely seven years ago, GfK had no presence in America in the United States, which has the world s biggest market ing and market research industries. This has radically changed: the Group now has around 1,250 employees in 10 countries and a presence in North and South America. Following the integration of the nop World companies, GfK became the eighth largest company in the sector in 2006. The Group came one step closer to its long-held aim of gaining a foothold in the us with its flotation in September 1999. In the same year, GfK Custom Research became the Group s first us research company. This was followed in 2003 by v2 GfK and a year later by GfK Arbor. However, the most important step in GfK s us business development strategy was the acquisition of nop World in April 2005. This means that all of its divisions except Consumer Tracking now have a us presence. 2005 and 2006 highlights As part of the integration and reorganization of the nop World subsidiaries in the usa, GfK nop Custom Research and GfK Automotive, the world s leading automobile research specialist, are now incorporated in the Custom Research division. Together with the newly acquired majority interest in GfK Research Dynamics, Canada, GfK cri and GfK Arbor, these businesses have been combined as GfK Custom Research North America. The acquisition of nop World has also proved a strategic success in the HealthCare division. Since GfK v2 and the former nop companies, GfK Market Measures and GfK Strategic Marketing, were grouped together under the name of GfK us Healthcare Companies, GfK has been the world s leading specialist in custom pharmaceutical research. The us company Mediamark Research, another new member of the GfK network and a leading force in the media research market with its print circulation surveys, was one of three companies shortlisted for a us radio ratings contract. GfK Equity Research and GfK Audits and Surveys, which provide services in the Retail and Technology division in the usa, launched operations. GfK also has set up networks in 8 Latin American countries. 56_GfK

More than one in three Americans is worried about not having enough money to live on and pay their bills. GfK SPECIAL America America Market Selected rating companies Argentina GfK Kleiman Sygnos GfK Marketing Services Bolivia Adimark GfK Brazil No. 4 GfK Indicator GfK Marketing Services Chile No. 1 (Custom Adimark GfK Research) GfK Chile Marketing Services Ecuador Merc GfK Canada No. 14 GfK Research Dynamics Colombia Merc GfK Mexico No. 13 Merc GfK Paraguay GfK Kleiman Sygnos Peru Adimark GfK usa No. 8 GfK nop Custom Research, GfK Automotive, GfK Custom Research, GfK arbor, GfK Audits & Surveys, GfK Equity Research, Mediamark Research, GfK us Health Companies: GfK v2, GfK Market Measures, GfK Strategic Marketing Venezuela Merc GfK Business divisions Custom Research Retail and Technology Consumer Tracking Media HealthCare GfK_57

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Japan: Cultural tradition and economic power Japan is back in the select circle of booming economies. The characteristic hallmark of this rich, mature market is the demanding consumer, with individual peculiarities. In the highly modern media and information age of Japan, cultural traditions are still very much alive. Japan has proved its economic capacity time and again. At the moment, after years of recession and stagnation, the country is right back at the top of the league of booming economies. The Confederation of German Industry (bdi) confirmed: Japan is the biggest market in Asia, with by far the greatest purchasing power. By way of evidence, it points out that personal savings in the land of the rising sun amount to 9.4 billion euros. With the second highest gdp in the world, after the usa and ahead of Germany, Japan represents a huge, rich market, as the Japan External Trade Organization (jetro) surmises. But it is also a demanding and mature market. However, this is not representative of Japan as a whole. Even the well respected Hamburg-based anthropologist, Professor Dr. Wulf Köpke is amazed after a visit to the country: This spontaneous, boisterous humor which many Japanese are now displaying is an entirely new experience for me. I fear that they all too often leave it at home when they travel abroad, but in the country itself, I felt its full impact, the great man recorded in 1999 in the information leaflet of the Japanese General Consulate in Hamburg after his first trip to Japan. Japanese open to challenges Such impressions are hard to find in descriptions of Japan. More often, the talk is of the enigmatic Japanese and their culture. Indeed, it is not only the soul of the population of around 127 million of this island nation consisting of 3,922 islands, which is proving mysterious. On the one hand, the firmly entrenched traditions have merged with an extraordinary openness to current international trends to forge a highly idiosyncratic outlook. On the other, these most demanding of consumers are willing to accept only top quality products and customer services Population Population density Per capita gdp/ disposable income Average age/household size What they think and how they live Japan 127 million in an area of 378,000 km 2. 79% live in urban areas. 342 per km 2. Tokyo: 13,650 per km 2. eur 30,500/eur 11,200. 42.6/2.7. Only 23% of Japanese citizens expect their finances to improve in the future, compared to an international average of 59% and a us figure of 68%. 62% are concerned about crime, whereas the international average is 45%. 34% say the environment is one of the most important problems, compared to an international average of 21%. 32% are concerned about mistakes made by the government, as against an international average of 18 % and a uk figure of only 7%. Japanese people spend more time with their children and grandchildren, at 16.9 hours a week compared to an international average of 15.2 hours. Only 4% describe themselves as very happy. The international average is 20%. 72% say spiritual enrichment is important to them, compared to an international average of 36%. However, only 37% believe that owning their own home is important; the inter national average is 60%. Sources: Roper Reports Worldwide, GfK Regional Research GfK SPECIAL Japan The Japanese spend more time with their children and grandchildren than Europeans and Americans. GfK_59

»In Germany, the pressure to reform comes mainly from countries with low production costs, whereas in Japan, there is a more innate grasp of the impact of factors such as China and globalization and a willingness to adapt to the new situation.«which do not simply pay lip service to the term customer satisfaction for advertising purposes, but where the concept constitutes a corporate philosophy in practical daily use. Marketing strategists can make good use of the highly developed national infrastructure, from transport through to retail organization, the low rate of unemployment and people who, under the circumstances, are more open to today s tougher challenges than their counterparts in other highly developed industrial nations. According to Martin Schulz from the Fujitsu Economic Research Institute: The Japanese are not just prepared to take tough measures, they demand them. In Germany, the pressure to reform comes mainly from countries with low production costs, whereas in Japan, there is a more innate grasp of the impact of factors such as China and globalization and a willingness to adapt to the new situation. The Japanese cultivate an unusually close association with the media. Japan even has a worldwide reputation as the land of the mass media. Every day, around 120 newspapers with a combined total circulation amounting to in excess of 71 million copies are published, some with circulations European publishers can only dream about. The circulation density of all the dailies comprises 647 copies per 1,000 inhabitants aged 14 +. Only Norway and its 651 copies beats Japan into second place and in the middle comes Germany, with 313 copies per 1,000 head of population. However, the electronic media remain firmly in first place in Japan, as is the case in all countries today, with 71.5% of respondents saying their favorite leisure time pastimes were watching tv, listening to the radio, surfing the net or emailing by computer or cell phone. The radio and tv landscape is correspondingly diverse. Some 350 private radio and tv stations are battling it out alongside public service broadcasters, Nippon Hoso Kyokai (nhk) for the time and attention of their fellow nationals. Global progress of a form of Japanese poetry Market and opinion researchers concluded that Japan is quite typical of a modern media and information society, however, without any compromise of its uniform cultural identity. The same applies to lifestyle, art, music and literature. Haiku poetry remains infinitely popular in Japan and is even on the road to conquering the rest of the world, as the German Haiku Association confirms. They define the form as: Haiku is the shortest acknowledged literary form of poetry in the world and there is hardly a language or a country in which haiku is not written and read. Haiku is the only form of poetry which is cultivated by so many associations all over the world and it is the most popular form of poetry on the Internet. In Japan, its country of origin, it is by no means only poets and writers who compose these three-line offerings, but the entire population: From emperor to farmer, from university professor to elementary school pupil, there is hardly a Japanese person who has not yet written a poem, was the claim made 50 years ago in the sophisticated little book: Full moon and the sound of the cicadas. The founder of the classical haiku movement, Matsuo Bashô (1643 1694), the reader is informed, was a lay Zen Buddhist monk. In an entirely Japanese way and with gentle irony, almost pre-empting the advent of a busy information and media era, he managed to distil the brevity of the human encounter with the infinite nature of time into just three lines: Stillness of the pond Froglet leaping in from bank Ripple in water. And so with just these few words, questions concerning the humor and mysteries of the Japanese soul can be resolved. Only one in four Japanese people believe that their future financial situation will be better in the future than it is now. 60_GfK

GfK_61 GfK SPECIAL Japan

Asia and the Pacific: Untapped market potential Experts predict that over the next ten years, an affluent middle class of around 800 million people will emerge in Asia ten times the population of Germany and 2.7 times that of the United States. This means that Asia and the Pacific are well on the way to becoming the biggest consumer region in the world. The marketing and market research sectors are already benefiting from this growth, but they have a long way to go before catching up with the highly developed western economies. In 2004, market research in this region accounted for 13.3% of global sector sales. Japan is by far the largest research market in Asia and the Pacific, followed by Australia and China. The GfK Group has been active here for 20 years, starting in Japan, where it acquired its first minority interest in 1985. It now has subsidiaries in nearly all of the region s key economies, including Australia and New Zealand. In 2005, GfK had subsidiaries in 15 countries and although GfK was only active in the Retail and Technology division until 2005, it is already the region s fifth largest market research company. 2005 and 2006 highlights The Group has launched its HealthCare business in Asia in the form of subsidiaries in Singapore, Hong Kong and Thailand and the former nop World company, GfK Healthcare, in China. It now has a presence in Asia s key markets. GfK Marketing Services China held its first client conference in Shanghai, on the theme of convergence and digitalization. This was attended by some 250 representatives of over fifty Chinese and international retailers and manufacturers. 62_GfK

GfK SPECIAL Asia and the Pacific Three in four Japanese people believe that tradition and spiritual development are important. Australia China Hong Kong Indonesia Japan Cambodia Korea Malaysia New Zealand Philippines Singapore Taiwan Thailand Vietnam Asia and the Pacific Selected companies GfK Marketing Services Australia Oz Toys Marketing Services Informark GfK Market Research (Shanghai) GfK Asia (Peking) GfK HealthCare Asia (China) GfK Marketing Services (Hong Kong) GfK HealthCare Asia (Hong Kong) GfK Marketing Services Indonesia GfK Marketing Services Japan Encodex Japan GfK Asia (Cambodia) GfK Marketing Services Korea GfK Marketing Services Malaysia GfK Marketing Services Australia GfK Asia (Philippines) GfK Asia GfK HealthCare Asia GfK Marketing Services (Taiwan) GfK Marketing Services Thailand GfK HealthCare Asia (Thailand) GfK Asia (Vietnam) Business divisions Custom Research Retail and Technology Consumer Tracking Media HealthCare GfK_63

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Management Report of the GfK Group 1. The economy 66 1.1 Overall economic development: growth stabilizes 66 1.2 Market research sector: on the upturn 67 2. Event of the year 2005: acquisition of nop World 69 3. 5 Star Initiative: strategic milestones for the next few years 70 4. Economic and financial development 71 4.1 Introduction 71 4.2 GfK Group: excellent financial year 71 4.3 Business divisions: focusing on consumers and markets 74 4.4 Regions: competence in local markets around the world 79 5. Research and development 83 6. Human Resources 84 7. Organization and administration 86 8. Purchasing 86 9. Environmental protection 86 10. Marketing and corporate communications 87 11. Risks 88 11.1 Basic principles of risk management: an integrated system 88 11.2 Assessing the risk situation: individual risks 89 11.3 Assessment of overall risk 91 12. Major events since the end of the financial year 91 13. Outlook 92 13.1 Macro-economic situation: robust with slight trend to slowing down 92 13.2 Market research sector: additional potential for growth 92 13.3 Opportunities: further growth through building on achievements 92 13.4 Research and development: pooling expertise 93 13.5 Human Resources: promoting the integration of the nop World companies 93 13.6 Organization and administration: continuing the streamlining process 93 13.7 Marketing and corporate communications: harmonizing the websites 93 13.8 Investment and financing: reducing debt 93 13.9 Corporate growth at the GfK Group: exceeding the 1.1 billion euro sales mark 93 13.10 Divisional trends: continuing the optimization and integration process 94 MANAGEMENT REPORT GfK_65

Management Report of the GfK Group 1. The economy 1.1 Overall economic development: growth stabilizes The global economy continued to develop positively in 2005. The upturn that began in the previous year was sustained. However, without any major turbulence being recorded, the speed of global economic growth slowed from approximately 5% in 2004 to a good 4% in 2005. At the same time, prices remained moderate to a large extent. Inflation rates were just slightly higher than in 2004, a good 2% in the industrialized countries and 6% in developing countries and emerging economies. gdp growth in regions and countries important to GfK 1) In % 2004 2005 4) 2006 5) 2007 5) Germany 1.6 3) 0.9 3) 1.7 1.2 France 2.1 1.6 2.0 2.2 uk 3.2 1.6 2.3 2.8 Euro-zone 2.1 1.4 2.1 1.9 eu 15 2.3 1.5 2.1 2.1 eu accession countries 5.1 4.3 4.7 4.6 eu 25 2.4 1.7 2.2 2.2 usa 4.2 3.6 3.4 3.1 Latin America 5.9 4.0 3.5 n.a. South East Asia 7.9 6.7 7.2 n.a. China 9.5 9.0 8.2 7.9 Japan 2.6 2.4 2.5 2.5 World 2) 5.1 4.6 4.7 4.4 1) Source: diw reports Grundlinien der Wirtschaftsentwicklung 2006/2007 (baseline of economic development 2006/2007), Die Lage der Weltwirtschaft und der deutschen Wirtschaft im Herbst 2005 (state of the global economy and German economy in autumn 2005) and Grundlinien der Wirtschaftsentwicklung 2005/2006 (baseline of economic development 2005/2006), based on oecd figures 2) The Euroframe Spring Report 2006 3) Federal Statistical Office, Wiesbaden. After elimination of calendar effects, the gdp growth rate is 1.1% for both 2004 and 2005. 4) Estimated, except figure for Germany 5) Forecast Overall, the global economy was in a robust condition as of the end of 2005. A year ago, many experts assumed that crude oil prices of over usd 50 would lead to a global recession. Since then, this mark has been exceeded by far without leaving behind any significant economic traces. The crucial difference in comparison with developments after the oil price shock of the 1970s and 1980s is due to changes since then in countries monetary policy. At that time, the central banks had already set a restrictive course in monetary policy in the run-up to the oil price rise. This was to prevent the economy from overheating and to combat any acceleration of the upsurge in prices. When the inflation rates increased further as a result of oil prices, the central banks again raised interest rates con siderably. The policy of the central banks over the last few years has been completely different. By the end of 2005, the moderate monetary policy continued to have a favorable effect on demand. In the second half of 2004, the central banks began cautiously to tighten monetary policy, a course which they continued in 2005. Many countries, especially English-speaking countries, increased interest rates. However, to date these have remained both in nominal and real terms significantly below the long-term average interest rate level. An important reason for the continuation of the global economic upturn was China s sustained economic dynamism. On the one hand, it contributed significantly to the sharp rise in demand for raw materials and, therefore, to increases in their prices. At the same time, however, the boom in China and the reinforced integration of the Chinese economy in the global economy has given global trade clear impetus. A tenth of the growth in global trade in the years from 1999 to 2004 is attributable to the expansion of China s export trade. The national economies in regions and countries important to GfK performed as follows: In the usa the economy has been very stable over the last two years. Gross domestic product (gdp) has risen continuously since spring 2003, though the rate of increase slowed somewhat in 2005. Growth was recorded at 3.6% in the financial year just ended, compared with 4.2% in the previous year. Private consumption was particularly growth-enhancing, while the damage caused by hurricanes in the Caribbean failed to restrict the region s positive performance. In latin america economic growth has been slightly weaker following strong growth in prior years. However, the economic situation is still very robust. Asian countries have ensured that the global economy has remained strong. After japan experienced an economic recovery in 2004, growth continued in 2005. In particular, exports increased thanks to positive economic performance in neighboring countries. Contrary to expectations, the boom in the national economies of the most populated countries in the world, china and india, did not slow down in 2005. By contrast, the smaller countries of south east asia witnessed more of a slowdown in 2005 than in the prior year mainly due to the rise in crude oil prices and the decline in domestic demand. Nevertheless, the region still recorded an above-average growth rate. In the member countries of the european union growth in gdp remained slightly below the prior year s level. This was mainly attributable to continued weak economic performance in the member countries of the european monetary union. While exports in this region continued to rise sharply, domestic demand was curbed in particular due to increases in energy prices. This mainly affected private consumption, but it also 66_GfK

affected private investments. By contrast, economic development in the new member countries of the European Union remained very robust and at times, the economy gained even further momentum - especially as a result of the continued rise in foreign demand in these countries. The german economy closed 2005 without any notable upturn. Economic growth remained below the 1% mark. Unemployment continued to rise. Domestic demand, especially private consumption, stagnated. Growth in exports alone, which was supported by the favorable global economic situation, ensured an increase in gdp. Consumer climate in Germany: Stabilization in the second half of the year 1) Month January February March April May June July Opinion trend Optimism grows Recovery despite growing skepticism Uncertainty spreads to consumers Consumer mood worsens Uncertainty remains No. 1 concern Possible new election does not trigger new sense of optimism Private consumption remains weak Propensity to buy 2) Change from previous month Consumer climate indicator 3) Change from previous month 14.4 + 7.9 3.4 + 0.7 12.2 + 2.2 4.4 + 1.0 12.3 0.1 4.9 + 0.5 27.1 14.8 5.0 + 0.1 21.3 + 5.8 4.7 0.3 25.8 4.5 4.2 0.5 13.1 + 12.7 3.6 0.6 August New confidence 4.5 + 8.6 3.2 0.4 September October November December Return to uncertainty Hope for an economic upturn Low mood in the West optimism in the East Consumer climate has not been as good as this for a long time 13.4 8.9 3.2 0.0 10.2 + 3.2 3.3 + 0.1 8.1 + 2.1 3.5 + 0.2 + 2.1 + 10.2 3.5 0.0 1) These are the findings of the survey, GfK-Wirtschaftsdienst Konsum- und Sparklima (GfK financial services, consumer and savings climate), published by GfK Marktforschung. The results are based on monthly consumer interviews, which GfK has been carrying out on behalf of the eu Commission since 1980. In the first half of each month, around 2,000 representatively selected people are asked about their perceptions of the overall economic situation, their propensity to buy and their income expectations. 2) The consumer confidence or propensity to buy indicator is based on the following question to consumers: Do you think it is advisable to make major purchases at the moment? (good time neither good nor bad time bad time). The values shown above are deviations from the long-term average value. The historic maximum value for the whole of Germany is + 36.5 in April 1999, whilst the historic minimum value is 55.5 in November 2002. 3) The consumer climate indicator describes private consumption. Key factors are income expectations and buying propensity. The economic outlook has a more indirect effect on the consumer climate, generally as a result of income expectations. The historic maximum value for the indicator was 27.9 in March 1999, whilst the historic minimum value was 8.7 in February 1994. This is demonstrated by the results of GfK s monthly consumer climate survey. After an initial rise in consumers propensity to buy at the beginning of the year, the indicator dropped towards the middle of the year, and then gradually began to recover in the second half of the year. 1.2 Market research sector: on the upturn The market research sector also profited from the sustained positive development of the national economies. After having recorded average annual growth rates of around 10 % in the 1990s, performance stagnated in the first few years of the new millennium. Since 2003 the sector has recovered, in particular due to the clear increase in momentum witnessed in the sector in the usa. After growth of 2.7% in 2003, the sector grew by 5% in 2004. Experts estimate that the sector grew by between 4% and 5% in the financial year just ended. Market share by region In % 2003 2004 Europe eu 15 eu accession countries Rest of Europe America North America Latin America 43.8 40.1 1.3 2.4 41.5 37.7 3.8 44.9 41.1 1.4 2.5 40.4 36.5 3.9 Growth 2003/2004 3.2 3.0 6.0 6.1 As in previous years, trends in the sector varied widely in the global regions and individual countries. For example, the sector continued to grow strongly, especially in the regions Asia and the Pacific, Latin America, and Central and Eastern Europe. With a growth rate of 7%, compared to 3.3% in the previous year, the usa also performed positively in 2004. It is estimated that sectoral growth in the usa and the region North America was just as strong in the financial year just ended as in 2004. By contrast, growth in the European Monetary Union was more modest. After 0.7% growth in 2003, market research sales increased by 3% in 2004. Experts estimate that sales in this region for 2005 were similarly strong. 6.7 8.2 Asia/Pacific 13.3 13.3 5.2 Middle East/Africa 1.3 1.4 6.3 Market research sales in usd million 18,928 21,501 5.0 Source: esomar Industry Study, 2005 MANAGEMENT REPORT GfK_67

Event of the year 2005: acquisition of nop Market research sector in comparison with gdp and advertising industry 1) (in %) 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 100 100 100 Market research Advertising gdp 112.0 108.1 103.5 123.3 113.7 106.3 133.5 123.7 109.6 113.9 142.8 131.6 114.9 149.2 131.3 116.7 153.2 135.2 119.1 160.9 145.2 123.0 126.4 138.9 137.5 168.1 152.4 1) Basis: 1996 values = 100% for 1996, the 1997 conversion factor for the euro to the us dollar was used: eur 1 = usd 1.1346 Sources: esomar for market research, Zenith Optimedia 2005/2006 for advertising and Euroframe 2006 and oecd 2004 for gdp. Generally, market research is less affected by economic fluctuations than the media and advertising industry. This is partly due to the fact that clients still require continuous research into consumer habits, retail figures and media reach even in times of slow eco nomic growth. The advertising industry has now recovered. According to experts, growth in the advertising industry, recorded at 5.2% in 2005, was slightly higher than global economic growth and higher than the estimated growth in the market research sector. The largest national market research market is the usa, followed by the uk, Germany, France and Japan. After the usa, China is the strongest-growing country of the ten largest national market research markets. And, taking into account the rate of growth, China ranks number 3 in the world. Nearly 81% of the sector s global business is generated in the ten countries with the strongest market research sales. Top 10 national market research markets: sales and share of the sector s overall sales Real growth 2003/2004 1) in % Share of sector s over all sales 2004 in % 2) In usd million Sales 2003 Sales 2004 usa 6,660 7,319 7.0 34.0 uk 1,997 2,362 2.5 11.0 Germany 1,805 2,084 3.2 9.7 France 1,580 1,836 3.4 8.5 Japan 1,190 1,294 1.5 6.0 Italy 581 671 2.6 3.1 Canada 477 534 2.2 2.5 Spain 395 472 5.4 2.2 Australia 383 456 2.7 2.1 China 306 371 20.0 1.7 Top 10 as a whole 15,374 17,399 80.8 World 18,928 21,501 5.0 100.0 1) The growth rates are inflation-adjusted and based on national currencies. 2) Rounding differences may occur. Source: esomar Industry Study, 2005 Among the top 10 market research countries, the per-capita spending on advertising is particularly high in the usa and uk. These are followed by Japan, then Germany, Canada and Australia as well as France. In respect of per-capita spending on market research, the uk and France are the market leaders, followed by Germany, the usa and Australia. Spending on market research in comparison with spending on advertising mainly varies between 5% and 10 %. The only exception among the world s ten leading market research markets is China, which still lags far behind other countries in respect of its per-capita spending on advertising and on market research. Top 10 of the national market research markets: per-capita spending on advertising and market research Per-capita spending on market research Spending on market research as % of spending on advertising Per-capita spending on in usd advertising usa 495 25 5.0 uk 410 40 9.7 Germany 246 25 10.3 France 202 31 15.1 Japan 282 10 3.6 Italy 182 12 6.4 Canada 235 17 7.2 Spain 182 11 6.3 Australia 233 23 9.9 China 18 0 1.5 Source: esomar Industry Study, 2005 The most important client segment, which generates 46% of overall market research sales, is the consumer goods industry (2003: 45%), followed by the media and agencies operating in the communications sector, which generate approximately 22% of overall market research sales and have a growth rate of 10 %. 68_GfK

2. Event of the year 2005: acquisition of nop World On April 14, 2005, the GfK Group signed the contract to acquire nop World, the No. 9 in the market research sector. This set the seal on GfK s most important decision since its ipo in 1999. With the acquisition, the GfK Group has considerably strengthened its position as the No. 5 among market research institutes. Top 10 of the market research sector 2005 Company name Sales 2005 1) Growth in % 2) 1 vnu, Netherlands 3,518.0 5.0 2 Taylor Nelson Sofres, uk 1,810.1 5.7 3 ims Health, usa 1,754.8 12.0 4 Kantar Group, uk 1,468.4 8.8 5 GfK Group, Germany 1,160.3 40.1 3) 6 Ipsos, France 888.6 18.7 7 Synovate, uk 598.8 21.3 8 Information Resources, usa 4) 598.6 4.5 9 Westat, usa 4) 415.7 4.5 10 Arbitron, usa 310.0 4.5 1) In usd million; conversion rate: eur 1 = usd 1.2379, gbp 1 = usd 1.8119 (annual average 2005) 2) Growth in local currency 3) Consolidation of the former nop World Companies as of June 1, 2005 4) Based on estimated growth in the sector of 4.5% GfK has set the course to position itself and advance in the premier league of market research companies generating sales worth billions. Moreover, it has significantly strengthened its position in three of the largest market research markets: moving up from 15 th to 8 th place in the usa, the world s most important market for marketing and the market research sector, from 7 th to 2 nd place in the uk, the No. 2 in the marketing and market research sector, and from 4 th to 3 rd place in Italy, the sixth largest market in the sector. As a result of this important step, around 1,570 former nop World employees are now employed by GfK. With them they bring great potential in the form of research and market experience and client contacts. 2.1. Business divisions and local presence: a perfect match The services provided by the former nop World companies, especially in the business divisions Custom Research, Media, HealthCare, and the instruments and services of GfK complement each other perfectly: With the new companies, GfK has risen to the sector s number 5 in Custom Research. In particular, GfK has secured an outstanding position in the automobile market, due in part to its acquisition of Allison Fisher International, the world leader in this specialist market research segment. In addition, GfK has reinforced its position in the following areas: financial market research, technology and business-to-business research, research on consumer trends and in mystery shopping. In the Media division, GfK acquired two market leaders in media research: Mediamark Research (mri) in the usa and Eurisko in Italy. mri is the leading provider of print media research in the usa. Its information on the reach of newspapers and magazines is regarded as definitive in the usa when it comes to advertising in print media. The new Italian subsidiary, which has been trading under the name of GfK Eurisko since October 2005, belongs in media research to the exclusive circle of providers that have developed equipment to electronically measure radio reach through to time-to-market. GfK is number 4 in the world. With GfK Market Measures and GfK Strategic Marketing, the two former nop World subsidiaries operating in the HealthCare division, the GfK Group is now the No. 1 in custom research into pharmaceuticals worldwide. 2.2. Financing of the acquisition: own and external funds The purchase price for the nop World companies which were fully consolidated as of June 1, 2005 was approximately eur 570 million. GfK financed the purchase price using own and external funds. GfK raised external funds via a syndicated credit facility of eur 530 million and usd 170 million. This has already been repaid in part and has a term of 5 years. GfK minimized the interest rate risk associated with the external funds largely through interest rate hedges. In addition, GfK placed 3.15 million shares at a price of eur 28.70 with institutional investors and raised eur 90.3 million. The capital increase was carried out within the framework of accelerated book - building, excluding subscription rights. This procedure is targeted directly at institutional investors. The transaction was completed within a few hours. At the end of the day, the GfK share price was higher than on the previous day. 2.3 Integration of nop World: on schedule After the us and German cartel authorities had checked and approved the company merger, work on the integration of nop World began on June 1, 2005. For this purpose, GfK formed project teams made up of managers from GfK and the former nop World. Their task was to create structures to assist the subsidiaries of GfK and nop World integrate with each other as quickly and efficiently as possible, in terms of range of services, production and administration. The members of the Management Board of GfK responsible for Custom Research, Media and HealthCare are responsible for managing the teams. Integration, which has been pushed ahead intensively, has to date run on schedule. MANAGEMENT REPORT GfK_69

Strategy for the next few years: 5 Star Initiative The result of restructuring the entire company network in the usa, uk and Italy is as follows: usa: GfK activities in four business divisions The us subsidiaries active in the Custom Research division are combined under the GfK Custom Research North America Board. In addition to GfK arbor, GfK Caribou Lake and GfK cri, this now covers GfK nop Custom Research and GfK Automotive. In HealthCare, the two former nop World companies, GfK Market Measures and GfK Strategic Marketing, are managed, together with GfK v2, under the GfK us Healthcare Board. The former nop World company mri operates in the Media division. Audits and Surveys, also a former nop World company, was assigned to the Retail and Technology division. Under the name GfK Audits and Surveys, the company carries out retail surveys in the usa. uk: GfK activities of three business divisions brought together under GfK nop The former nop World companies and GfK companies in the Custom Research, Media and HealthCare divisions were brought together as GfK nop. After restructuring, GfK Martin Hamblin was integrated into the two GfK nop divisions, GfK Custom Research and GfK HealthCare. In the Media division, preparations were made to integrate the nop World division of Print Media Research into GfK Media uk. Since January 1, 2006 the merged business division has been operating under the name of GfK nop Media. GfK Marketing Services, long-established in the Retail and Technology division, is part of GfK s uk network of companies. Italy: consolidation of activities in the Custom Research division GfK Eurisko, which originated from the former nop World network, is active in the divisions of Custom Research, Media and HealthCare. The business of GfK cbi, an Italian subsidiary of GfK also assigned to Custom Research, was integrated into GfK Eurisko. Moreover, GfK maintains its business interests with GfK iha Italia in Consumer Tracking and GfK Marketing Services Italia in Retail and Technology. 3. 5 Star Initiative: strategic milestones for the next few years As the No. 5 in the world, GfK is among the leading global market research companies. Its success is mainly based on the commitment of its employees, many of whom count among the most capable people in the sector in respect of knowledge, experience and creativity. GfK is one of the market leaders in the development of methods and technology for modern market research. Moreover, as a result of its worldwide network of own subsidiaries and branches, the Group has a high level of local market knowledge and marketing expertise. The acquisition of nop World was strategically the most important step in pushing ahead globalization of the company network, which has been pursued intensively since GfK s ipo in 1999. It also provided the opportunity to redefine GfK s strategic aims. The Management Board and Supervisory Board adopted the 5 Star Initiative at a strategy meeting in October 2005. This initiative sets out five milestones designed to steer the activities of the GfK Group over the course of the next five years. The first initiative Fact-based Consultancy concerns the consistent expansion of the GfK Group s range of high-quality long-term consulting services based on market research findings and targeted at decision-makers in companies. The GfK Group offers advice on innovative and complex market research instruments and analyses and assists in the decision-making process with respect to strategic and operational marketing questions. The second initiative top 3 defines where GfK aims to be positioned in the global market research sector. GfK aims to become number 3 in the sector and, at the same time, at least the number 3 in each of its business divisions and in the key market research regions. It is pursuing this aim worldwide for the divisions, Custom Research, Retail and Technology and HealthCare and, especially in the European region, for Consumer Tracking and Media. Thirdly, with the Global Reach initiative, GfK aims to further expand its global network and be present in all countries important to market research through its own subsidiaries. Fourthly, with the Full Service initiative, GfK will continue to position itself as a company that specializes exclusively in market research services. This covers knowledge of the commodity markets of GfK s clients and the regional and national conditions in the countries in which GfK s clients operate. This also includes an innovative and international range of services and the use of state-of-the-art technological instruments and complex data collection, analysis and management procedures. The fifth initiative, Excellent Financials, defines GfK s financial targets for the next few years. GfK has set itself the ambitious goal of approaching the mark of eur 1.5 billion with its sales and achieving a margin of between 13 % and 15 %. In addition, GfK wants to significantly reduce its net indebtedness and lower the ratio of net indebtedness to ebitda to a value of around 100%. GfK also aims to achieve a tax ratio, before one-off effects, of around 30%. 70_GfK

4. Economic and financial development 4.1 Introduction From 2005 onwards, the GfK Group will publish its financial statements in accordance with International Financial Reporting Standards (ifrs). The financial data for the divisions and regions originate from the Management Information System. In the figures for income set out below, adjusted operating income as reported in the income statement is discussed as a key performance indicator. The management uses it to steer GfK s operational business Group-wide. Adjusted operating income is based on operating income. The following income and expense components are not taken into account in adjusted operating income: integration costs resulting from the acquisition of companies, amortization of disclosed hidden reserves as part of purchase price allocation, share-based and long-term incentive staff payments, other operating income and remaining other operating expenses, including in particular currency effects arising from the valuation as of the balance sheet date. GfK is confident that the notes on business performance in conjunction with adjusted operating income facilitate the interpretation of the GfK Group s business development and enhance the informative value in comparison with other major companies operating in the market research sector. Where income is mentioned below, this income is the adjusted operating income. The margin is the ratio of adjusted operating income to sales. The overview in the following table shows GfK s performance excluding figures for nop World as well as GfK s performance after acquisition and consolidation. GfK Group: including and excluding nop World 1) In eur million 2004 GfK old 2005 GfK old Absolute change Change in % 2005 NOP World 2005 GfK Group Sales 669.1 737.5 + 68.6 + 10.2 199.8 937.3 Operating costs 586.2 634.9 + 48.9 + 8.3 177.3 812.2 Income 82.9 102.6 + 19.7 + 23.7 22.5 125.1 Margin in % 12.4 13.9 11.3 13.3 1) It should be noted that the nop World companies were only consolidated for the latter seven months of 2005. As is the case for GfK, the sales and income trend for these companies is generally significantly better in the second half of the year than the first six months. Accordingly, the income of nop World cannot be extrapolated for 12 months on a straight line basis. The notes on the economic and financial development of the GfK Group as well as the divisions and regions relate to the whole GfK Group including the newly consolidated subsidiaries of the former nop World. Changes in 2005 compared with the previous year are only explained explicitly if the changes do not relate to the acquisition of nop World. Where statements refer to the number of employees, in principle, this represents the total number of full-time posts, irrespective of whether the individual posts are part-time or full-time posts. The figures reported and any changes expressed as percentages in the details relating to the GfK Group s business performance are based on figures in eur 1,000. Accordingly, rounding differences may occur. Companies mentioned in the management report are referred to by their abbreviated names. The Additional information section of the Annual Report includes a list of all companies indicated in the management report and their full names. 4.2 GfK Group: excellent financial year Sales and income In 2005, the GfK Group generated sales of eur 937.3 million. This represents a 40.1% increase on the prior year. Earnings 1) In eur million 2004 2005 Change in % Sales 669.1 937.3 + 40.1 Cost of sales 451.4 638.3 + 41.4 Gross income from sales 217.7 299.0 + 37.3 Selling and general administrative expenses 141.0 202.6 + 43.7 Other operating income 10.6 10.3 2.8 Other operating expenses 9.7 26.0 + 169.0 eb itda 107.8 153.5 + 42.4 as a percentage of sales 16.1 16.4 Adjusted operating income 82.9 125.1 + 50.9 as a percentage of sales 12.4 13.3 Highlighted items 5.3 44.4 + 737.7 Operating income 77.6 80.7 + 3.9 as a percentage of sales 11.6 8.6 Income from participations 4.4 28.3 + 550.2 ebit 82.0 109.0 + 32.9 as a percentage of sales 12.2 11.6 Financial income 4.1 2.3 43.2 Financial expenses 4.7 19.1 + 306.1 Income from ongoing business activity 81.4 92.2 + 13.3 Tax on income from ongoing business activity 28.3 24.7 12.6 Consolidated total income 53.1 67.5 + 27.1 Attributable to equity holders of the parent 42.3 59.3 + 40.2 Attributable to minority interests 10.8 8.2 24.3 Consolidated total income 53.1 67.5 + 27.1 1) Rounding differences may occur MANAGEMENT REPORT GfK_71

Economic and financial development: GfK Group income increased by 50.9% from eur 82.9 million to eur 125.1 million. This rise is mainly attributable to the excellent performance of the GfK Group and the first-time consolidation of nop for the months June to December 2005. The Group s margin reached the impressive level of 13.3%. Taking nop into account on a like-for-like basis over the year as a whole and including the fact that the first half of the year is generally weaker in market research, the Group achieved a margin of 12.6% on a 12-month basis. The highlighted items include nop World integration costs of eur 15.7 million, amortization on disclosed hidden reserves as part of purchase price allocation of eur 15.9 million and expenses for staff options of eur 2.6 million. All costs that relate directly to the acquisition of nop World, either in material terms or in terms of time, are integration costs. The balance of other income and expenses is down from eur 0.9 million in the prior year to a deficit of eur 15.7 million. This includes losses from currency effects of eur 5.3 million (2004: profit of eur + 2.8 million). This item also includes the above-mentioned impairment of eur 8.3 million (prior year: eur 1.5 million). Compared with the prior year, operating income rose by eur 3.1 million, or 4%. Even the sharp increase in the negative balance of other operating income and expenses was more than compensated for by the positive impact from the operating division. The personnel cost ratio, defined as the ratio of personnel expenses to sales, was down from 42.3% in the prior year to 39.8%. In absolute terms, personnel expenses amounted to eur 373.1 million (prior year: eur 282.7 million). Scheduled depreciation and amortization, particularly on software and fixtures and fittings, rose from eur 24.3 million to eur 36.2 million. The GfK Group increased ebit by 32.9% from eur 82.0 million in the prior year to eur 109.0 million in 2005. net income from participations increased from eur 4.4 million in the prior year to eur 28.3 million in 2005. The increase is largely attributable to profit from the sale of participations in the Swiss companies, iha ims and mmxi. After a deficit of eur 0.6 million in 2004, net financial income, which is the balance of financial income and expenses, was down to a deficit of eur 16.8 million in the financial year just ended. This development resulted primarily from the increase in interest expenses connected with the financing of the acquisition of nop World. The factors described above, together brought about an increase in income from ongoing business activity of 13.3% from eur 81.4 million in the prior year to eur 92.2 million in 2005. The income tax ratio fell from 34.7% in 2004 to 26.8% in the financial year just ended. This exceptionally low ratio is influenced by the tax-exempt profit from the above-mentioned sale of participations in two Swiss companies. After adjustment for this special effect, the tax ratio amounts to 36.7%. The main reason for the increase is the expansion of us business, where the tax rate is higher than the Group s average. The GfK Group increased its consolidated total income by eur 14.4 million from eur 53.1 million in the prior year to eur 67.5 million in 2005. GfK Group: income and consolidated total income 2002 2005 in eur million 1) In accordance with us gaap + 47.3 2002 + 30.0 + 67.3 2003 + 41.1 + 86.1 2004 + 63.5 In accordance with ifrs + 82.9 2004 + 53.1 + 125.1 2005 + 67.5 in accordance with us gaap: operating income, in accordance with ifrs: income in accordance with us gaap: consolidated total income before minority interests, in accordance with ifrs: consolidated total income 1) Prior to 2002, accounting was in accordance with the German Commercial Code (hgb). Therefore only four years Asset and capital situation Compared with the prior year, the GfK Group s total assets increased by eur 932.5 million to eur 1,495.8 million. On the assets side of the balance sheet, eur 545.6 million of the increase was attributable to growth in goodwill and eur 170.6 million was attributable to a rise in other intangible assets. Both effects are almost entirely connected with the first-time consolidation and purchase price allocation of the nop World companies. Under current assets, this acquisition was mainly noticeable in the increase in trade receivables of eur 115.0 million to eur 253.2 million. 72_GfK

Balance sheet growth 1) In eur million 31.12.2004 31.12.2005 Assets Changes on the liabilities side of the balance sheet are mainly attributable to the financing of the acquisition of nop World. As a result of the capital increase, GfK s equity rose by eur 90.3 million. External financing mainly affected the level of long-term financial liabilities, which rose by eur 508.3 million. The increase in short-term external capital was primarily due to the following factors: the rise in trade payables by eur 52.5 million, liabilities arising from work in progress of eur 32.2 million and the increase in other short-term external capital of eur 83.4 million. The effects of acquiring nop World are reflected in these three items. The equity ratio as of December 31, 2005 was 28.5% (prior year: 45.6%). Investment and financing Change in % Share of total assets in % Non-current assets 347.6 1,104.3 + 217.7 73.8 Current assets 215.6 391.5 + 81.6 26.2 Equity and liabilities Total equity 2) 256.7 426.6 + 66.1 28.5 Non-current liabilities 99.4 699.0 + 603.0 46.7 Current liabilities 207.1 370.2 + 78.8 24.8 Total assets 563.2 1,495.8 + 165.6 100.0 1) Rounding differences may occur 2) Including equity attributable to minority interests Development of equity ratio 2002 2005 in percent 1) In accordance with us gaap 2002 + 38.7 2003 + 40.7 2004 + 44.3 In accordance with ifrs 2004 2) + 45.6 2005 2) + 28.5 1) Prior to 2002, accounting was in accordance with the German Commercial Code (hgb). Therefore only four years are shown here. 2) In accordance with ifrs, this includes equity attributable to minority interests. In 2005, GfK investments totaled eur 681.9 million (prior year: eur 84.6 million). Of this, eur 643.5 million related to the acquisition of consolidated companies and other business units and eur 35.4 million related to the purchase of software, fixtures and fittings and other tangible assets. Capital expenditure was fully financed out of cash flow from operating activity of eur 128.9 million (prior year: eur 92.1 million). Taking into account these expenses of eur 35.4 million, free cash flow amounted to eur 93.5 million. In 2004, it totaled eur 69.7 million. This means that acquisitions and other financial investments could only be financed in part out of cash flow from operating activity in the year under review. Change in free cash flow 1) In eur million 31.12.2004 31.12.2005 Change in % Cash flow from operating activity 92.1 128.9 + 40.0 Capital expenditure 22.4 35.4 + 58.2 Free cash flow before acquisitions, other investments and asset disposals 69.7 93.5 + 34.1 Acquisitions 59.6 645.3 + 982.1 Other financial investments 2.6 1.2 52.6 Asset disposals 2.0 28.4 + 1,289.8 Free cash flow after acquisitions, other investments and asset disposals 9.5 524.6 1) Rounding differences may occur Due to the high volume of acquisitions, GfK s financial liabilities increased considerably in the financial year just ended. Accordingly, in net terms, eur 550.3 million is attributable to funds from financing activities. net indebtedness, defined as the balance of cash, cash equivalents and short-term securities less interest-bearing liabilities and pension obligations, increased by eur 483.7 million to eur 523.0 million (prior year: eur 39.3 million). Change in net indebtedness 1) In eur million 31.12.2004 31.12.2005 Change in % Liquid funds 48.7 79.6 + 63.5 Short-term securities and time deposits 6.5 5.5 14.9 Liquid funds, short-term securities and time deposits 55.2 85.1 + 54.2 Liabilities to banks 45.3 548.4 + 1,109.2 Pension obligations 27.6 38.4 + 39.5 Liabilities under finance leases 16.4 15.2 7.1 Other interest-bearing liabilities 5.2 6.1 + 17.5 Interest-bearing liabilities 94.5 608.1 + 543.8 Net indebtedness 39.3 523.0 + 1,231.5 1) Rounding differences may occur MANAGEMENT REPORT GfK_73

Economic and financial development: business divisions Gearing, which is the ratio of net indebtedness to equity, rose accordingly above-average from 15.3% in the prior year to 122.6% in 2005. The ratio of net indebtedness to ebit, ebitda and free cash flow also shows a marked increase on the prior year. Gearing and ratio of net indebtedness 1) to ebit, ebitda, free cash flow In % 2004 2005 Gearing (net indebtedness/equity) 15.3 122.6 Net indebtedness/ebit 47.9 480.1 Net indebtedness/ebitda 36.4 340.6 Net indebtedness/free cash flow 56.3 559.2 1) Rounding differences may occur Expenses classified as soft facts are not capitalized, but are charged directly to the income statement. They mainly include non-capitalized expenses for setting up and maintaining panels, for in-house software as well as for staff training and continuous professional development. These investments play a crucial role in securing the company s future success, as they help to raise market entry barriers against possible competitors. Investments in soft facts increased by 32.9% to eur 45.1 million in the financial year just ended. Of this, eur 10.5 million resulted from newly consolidated companies Expenses for soft facts 1) In eur million 2004 2005 excluding newly consolidated companies 2005 including newly consolidated companies Change in % Costs of maintaining panels (incl. recruitment) 21.5 22.9 30.9 + 43.3 Software development costs 6.6 5.6 7.0 + 6.5 Training and continuous professional development 5.3 5.5 6.2 + 17.4 Other 0.5 0.6 1.0 + 90.9 Total 33.9 34.6 45.1 + 32.9 1) Rounding differences may occur 4.3 Business divisions: focusing on consumers and markets Service offering: comprehensive and cross-border GfK offers its clients from the consumer goods and pharmaceuticals industry, retail, media and the service sector a comprehensive range of information and consulting services in five business divisions. Clients use these services to aid the decision-making process in the areas of product and pricing policy, logistics and sales as well as marketing and advertising. custom research: through around 50 subsidiaries in more than 30 countries and via partnerships in another 60 countries, GfK s Custom Research division provides information services on operational and strategic marketing decisions. These services include tests and studies on product and pricing policy, on brand positioning and brand management, on traditional and modern forms of communication with consumers and users, on optimizing distribution as well as on customer loyalty issues. retail and technology: GfK s Retail and Technology division provides clients from trade and industry with regular information services based on continuous surveys and analyses of sales of technical consumer goods in the retail sector in more than 60 countries worldwide. Among the market segments in which GfK surveys and analyses data are office communication, photographic technology and optics, electrical household appliances, information technology, telecommunications, sports equipment, tourism, consumer electronics and entertainment media. consumer tracking: GfK s Consumer Tracking division provides its clients with regular information services based on continuous surveys and analyses of the purchasing decisions and behavior patterns of consumers in 26 European countries. The information and consulting services cover nearly all fast-moving consumer goods as well as numerous other consumer goods and services. media: GfK s Media division provides information services on the intensity and nature of media usage and acceptance. The services are directed at clients from media companies, agencies and the branded goods industry in more than 20 European countries and since 2005 in the usa too. These services relate to information about both traditional media like television, radio, print, film and outdoor advertising as well as the Internet and online and offline media. healthcare: GfK s HealthCare division provides its clients from the pharmaceuticals and healthcare industry worldwide with information and consulting services for special health markets covered by GfK s network in America, Europe and Asia. The services include analyses of product development and market communication, image cultivation and price control of medicines, market positioning, customer satisfaction and information on the sales volumes of products used in the dental and veterinary sectors and in laboratories. 74_GfK

GfK Group: breakdown of growth in sales and income in % 1) Total growth Growth from acquisitions Organic growth Currency effects Sales Income 1) Rounding differences may occur + 0.4 + 0.3 + 6.5 Proportion of divisional sales to total sales 1) + 21.2 + 33.2 + 29.5 + 40.1 + 50.9 other: the business divisions are supplemented by the Other division, which covers in particular GfK s central services for its subsidiaries and participations as well as their partners. The division mainly includes GfK Data Services, GfK Methodenund Produktentwicklung as well as the departments of GfK s Group Services. Up until the end of 2005, GfK Business Solutions & Processing was included in this division. However, after deliveries and services to the company Information Resources were terminated, GfK Business Solutions & Processing was integrated into GfK Data Services. Acquisition of nop World: three business divisions affected The acquisition of the nop World companies essentially affected three of GfK s five business divisions: Custom Research, whose share of GfK s overall sales rose from 37.3% to 44.4%, Custom Research 44.4 % Retail and Technology 22.4 % HealthCare 11.4 % Consumer Tracking 10.7% Media 10.3 % Other 0.8 % Media, whose share of sales increased from 9.3% to 10.3%, HealthCare, whose share of sales grew from 10.2% to 11.4%. 1) Rounding differences may occur Proportion of divisional income to income 1) Custom Research 32.7 % Consumer Tracking 3.6 % MANAGEMENT REPORT Retail and Technology 43.1 % HealthCare 9.6 % Media 15.7 % Other 2) 4.8 % 1) Rounding differences may occur 2) Not taken into account in chart Margin by business division in % 1) Custom Research 9.8 Retail and Technology 25.7 Consumer Tracking 4.5 Media 20.4 HealthCare 11.2 1) Income in relation to sales, excluding Other GfK_75

Economic and financial development: business divisions Economic development: Sales up in all business divisions In financial year 2005, all business divisions recorded growth in sales. custom research: In 2005, Custom Research generated the highest growth in sales of all GfK s business divisions. Sales increased by 67.0% from eur 249.4 million to eur 416.4 million. Of this, 59.7 percentage points were acquisition-related. 6.5 percentage points of the growth in sales were of an organic nature. This was especially due to the good business performance of companies in Western and Southern Europe and Central and Eastern Europe. retail and technology: The Retail and Technology division increased its sales by 12.1% to eur 209.6 million. With growth of 7.9 percentage points, it was once again the leading GfK business division in terms of organic growth. Its success is mainly due to three factors: firstly, the much expanded network, which makes it possible to gather market research data on technical consumer goods on all continents. In 2005, the expansion of this network was pushed ahead in new regions. Secondly, the range of services was expanded and thirdly, the frequency with which market reports are delivered to clients was increased. The growth through acquisitions of 4.2 percentage points resulted primarily from the consolidation of Beyen Marktforschung and GfK Audits and Surveys. Retail and Technology: key figures 1) Custom Research: key figures 1) In eur million 2004 2005 Change in % Sales 249.4 416.4 + 67.0 Income 20.1 40.9 + 104.0 Margin in % 2) + 8.0 + 9.8 + 1.8 3 ) Number of employees 1,961 3,401 + 73.4 of which abroad 1,577 3,020 + 91.5 1) Rounding differences may occur 2) Income in relation to sales 3) Percentage points In eur million 2004 2005 Changes in % Sales 187.0 209.6 + 12.1 Income 47.1 54.0 + 14.5 Margin in % 2) + 25.2 + 25.7 + 0.5 3 ) Number of employees 1,692 1,876 + 10.9 of which abroad 1,378 1,508 + 9.4 1) Rounding differences may occur 2) Income in relation to sales 3) Percentage points Custom Research: breakdown of growth in sales and income % 1) Total growth Growth from acquisitions Organic growth Currency effects Sales Income 1) Rounding differences may occur + 0.7 + 0.8 + 6.5 + 37.4 + 67.0 + 104.0 + 59.7 + 65.8 The business division s income rose by 104.0% to eur 40.9 million. First-time consolidations were responsible for 65.8 percentage points of the growth in income. 37.4 percentage points of growth in income were organic growth. This pleasing increase also resulted from good business in the region Western and Southern Europe. The successful restructuring of GfK Intomart played a crucial role in this. Currency effects boosted income by 0.8%. At 9.8%, the margin was significantly higher than in the prior year (8.0%). Retail and Technology: breakdown of growth in sales and income 1) Total growth Growth from acquisitions Organic growth Currency effects Sales Income 1) Rounding differences may occur + 4.2 + 0.1 + 0.0 + 0.1 + 7.9 + 12.1 + 14.5 + 14.2 The business division s income increased very pleasingly by 14.5% to eur 54.0 million. This growth is almost exclusively of an organic nature and is attributable not only to the division s good order book situation, but also to the use of cost synergies resulting from successful implementation of the production system startrack. Growth through acquisitions and currency effects each comprised 0.1 percentage points of the total growth in income. At 25.7%, the business division s margin was once again very good and exceeded the prior year s level of 25.2% in 2005. 76_GfK

consumer tracking: Sales in GfK s Consumer Tracking division rose by 6.3% to eur 100.3 million (prior year: eur 94.4 million). 5.9 percentage points of the growth were of an organic nature and 0.4 percentage points resulted from currency effects. The household panel ConsumerScan performed particularly well in Germany. In the financial year just ended, it was expanded by 3,000 households to 20,000 households. Thus, GfK succeeded in increasing the order volume of existing contracts and also in winning new clients. In addition, GfK Panel Services, Netherlands, improved its business significantly compared with the prior year, mainly in the ConsumerScope area. Consumer Tracking: key figures 1) In eur million 2004 2005 Change in % Sales 94.4 100.3 + 6.3 Income 5.8 4.5 22.3 Margin in % 2) + 6.2 + 4.5 1.7 3) Number of employees 849 875 + 3.1 of which abroad 590 602 + 2.0 1) Rounding differences may occur 2) Income in relation to sales 3) Percentage points Consumer Tracking: breakdown of growth in sales and income in % 1) media: As demonstrated as early as 2004 and despite moderate economic performance of the media industry, the demand for information and consulting services in the Media division saw a further increase. In the financial year just ended, this business division continued on its successful course. Sales rose very sharply from eur 62.2 million in 2004 to eur 96.2 million, which is equivalent to a 54.5% growth. Of this, 47.5 percentage points were attributable to acquisition-related growth and 6.7 percentage points were of an organic nature. In particular, the German subsidiaries performed very well. Furthermore, additional orders for television viewer ratings as well as an order for the delivery of 4,000 GfK meters to measure tv reach to India contributed to this growth. Currency effects boosted sales by 0.3%. Media: key figures 1) In eur million 2004 2005 Change in % Sales 62.2 96.2 + 54.5 Income 8.1 19.6 + 143.8 Margin in % 2) + 12.9 + 20.4 + 7.5 3) Number of employees 348 476 + 36.8 of which abroad 210 333 + 58.6 1) Rounding differences may occur 2) Income in relation to sales 3) Percentage points Total growth Growth from acquisitions Organic growth Currency effects Sales Income 1) Rounding differences may occur 22.3 17.4 5.4 0.0 + 0.4 + 0.5 + 6.3 + 5.9 Media: breakdown of growth in sales and income in % 1) Total growth Growth from acquisitions Organic growth Currency effects + 0.3 + 0.0 + 6.7 + 30.9 + 54.5 + 143.8 + 47.5 + 112.9 MANAGEMENT REPORT Sales Income By contrast, income performance was unsatisfactory: it fell by 22.3% to eur 4.5 million. Of this, 17.4 percentage points were of an organic nature. This decline is mainly attributable to the reorganization of the panel business in Switzerland, which became necessary after both supply and demand in the retail sector had changed, according to sales information gathered on a continuous basis. Acquisition-related effects caused the business division s income to drop by 5.4%. The main reason for this was the unsatisfactory income generated by the company GfK Gral-Iteo, Slovenia, which was consolidated for the first time in 2005. Since then, this company has suspended its service in this area. Currency effects boosted income by 0.5%. After 6.2% in the prior year, the Consumer Tracking division achieved a margin of 4.5% in the financial year just ended. 1) Rounding differences may occur The Media division s income increased at an above-average rate of 143.8% to eur 19.6 million. Of this growth, 112.9 percentage points were attributable to newly consolidated companies. Organic growth was very positive at 30.9%. This was partly due to the business success of those GfK companies operating in the media sector in Germany. The margin rose correspondingly sharply from 12.9 to 20.4%. GfK_77

Economic and financial development: regions healthcare: GfK s HealthCare division increased its sales by an impressive 57.6% to eur 107.3 million. Of this, 52.4 percentage points were due to acquisitions. 4.7 percentage points of the growth in sales were of an organic nature. Currency effects amounted to 0.4 percentage points. HealthCare: key figures 1) In eur million 2004 2005 Changes in % Sales 68.1 107.3 + 57.6 Income 7.8 12.0 + 54.9 Margin in % 2) + 11.4 + 11.2 0.2 3) Number of employees 246 440 + 78.9 of which abroad 177 361 + 104.0 1) Rounding differences may occur 2) Income in relation to sales 3) Percentage points HealthCare: breakdown of growth in sales and income 1) others: At eur 7.5 million, sales generated by the Other division were down slightly on the prior year (eur 7.9 million). The drop in sales was of an exclusively organic nature and is mainly attributable to the reduced volume of services provided by GfK Business Solutions & Processing to the company, Information Resources. At the end of the year, GfK Business Solutions & Processing was integrated into GfK Data Services. Others: key figures 1) In eur million 2004 2005 Changes in % Sales 7.9 7.5 4.8 Income 6.0 6.0 0.7 Margin in % 2) 75.6 80.0 4.4 3) Number of employees 443 447 + 0.9 of which abroad 105 104 1.0 1) Rounding differences may occur 2) Income in relation to sales 3) Percentage points Total growth Growth from acquisitions Organic growth Currency effects Sales Income 1) Rounding differences may occur + 4.7 + 0.4 + 0.5 + 22.0 + 32.4 + 57.6 + 54.9 + 52.4 Others: breakdown of growth in sales and income 1) Total growth 4,8 0,7 Growth from acquisitions 0.0 2.7 Organic growth 4.7 + 1.9 Currency effects 0.1 0.0 Sales Income The HealthCare division s income rose by 54.9%. Of this, 32.4 percentage points were attributable to the acquisition of companies, while 22.0 percentage points were of an organic nature. The latter is essentially thanks to the good income generated by GfK v2, usa, as well as the German companies, GfK HealthCare and gpi Kommunikationsforschung. By contrast, the unsatisfactory business of the HealthCare divisions of GfK Martin Hamblin had a negative effect. As a result, these were integrated into GfK nop, uk, and into GfK v2, usa, as of September 1, 2005. The margin of 11.2% remained almost unchanged from the prior year (11.4%). 1) Rounding differences may occur The deficit in income of eur 6.0 million resulted firstly from Group services that could not be offset. Secondly, income was reduced by expenses for the restructuring of the field research team in the Panel area of GfK Business Solutions and Processing. Despite these one-off expenses, income was virtually at the prior year s level. 78_GfK

4.4 Regions: competence in local markets around the world Company network strongly expanded The GfK Group operates a network consisting of its own subsidiaries in over 70 countries throughout the world and on every continent. In terms of organization, the business is divided up into six regions: germany, the home of the GfK Group, western and southern europe, where the GfK network has successively expanded to 12 countries since the early 60s, northern europe, where it has also established itself in 5 countries since the early 60s, central and eastern europe, where GfK founded its first subsidiaries in 1989, america, where GfK first established itself following the stock market flotation in September 1999, has since become active in four business divisions and ten countries, asia and the pacific, where it has been running the Retail and Technology business division since the early 80s and is now present in 15 countries. It has also been running the HealthCare division there since 2005. In addition to the acquisition of nop World, GfK has also acquired or incorporated other companies in Western and Southern Europe and America within its network. The table above contains all major company acquisitions and sales as well as the newly established businesses of strategic importance in 2005. Economic development: market share expanded All the regions increased their sales and, apart from Asia and the Pacific, income in financial year 2005 compared to the prior year. Regional breakdown of total sales 1) Germany 27.1 % Western and Southern Europe 27.5 % Northern Europe 13.6 % 1) Rounding differences may occur Central and Eastern Europe 5.6 % America 22.1 % Asia and the Pacific 4.2 % The acquisition of the nop World companies resulted in a marked change to the regions shares of total sales. The regions Western and Southern Europe, Northern Europe and America expanded appreciably. Following the inclusion of the nop World companies in the scope of consolidation as from June 1, 2005, Germany, with a share of 27.1% (prior year: 35.3%), relinquished its position as the region with the highest volume of sales since GfK s incorporation. The region Western and Southern Europe is now the leader which, following 32.2% in the prior year, has a share of 27.5%. The sales share for the region America has increased from 12.3% in 2004 to 22.1% in financial year 2005. Regional breakdown of income 1) Germany 25.2 % Western and Southern Europe 33.4 % Northern Europe 6.5 % 1) Rounding differences may occur Central and Eastern Europe 4.4 % America 25.3 % Asia and the Pacific 5.1 % MANAGEMENT REPORT Changes in the GfK network Margin by region in % 1) Company nop World, uk GfK Research Matters, Switzerland iha ims health, Switzerland GfK Research Dynamics, Canada Adimark, Chile GfK v2, usa GfK Equity Research, usa Caribou Lake Software, usa Beyen Marktforschung, Germany Investment activity Share purchase/ Change in % Sale From 50 to 0 Acquisition Acquisition Acquisition Acquisition Increase in shareholding Incorporation Increase in shareholding Acquisition Business division 100 Custom Research, Retail and Technology, Media, HealthCare Region Western and Southern Europe, Northern Europe, America 33 HealthCare Western and Southern Europe HealthCare 51 Custom Research 51 Custom Research From 51 to 100 HealthCare 100 Retail and Technology From 19.9 to 69.8 Custom Research 100 Retail and Technology Western and Southern Europe America America America America America Germany, America Germany 12.4 Western and Southern Europe 16.2 Northern Europe 6.4 Central and Eastern Europe 10.5 America 15.3 Asia and the Pacific 16.1 1) Income in relation to sales GfK_79

Economic and financial development: regions germany: In 2005 GfK increased its sales in its home market of Germany by 7.3% to eur 253.6 million (prior year: eur 236.3 million). 6.0 percentage points of growth were of an organic nature. This can be attributed, in particular, to the outstanding business performance of GfK Marketing Services, Germany, which is part of the Retail and Technology business division. Nearly all the other business divisions in Germany also achieved an increase in sales. On the other hand, the drop in the volume of services provided by GfK Business Solutions & Processing which has now been intergrated into GfK Data Services had an adverse effect on the growth in sales. The new consolidation of Beyen Marktforschung increased sales by 1.3%. Germany: key figures 1) In eur million 2004 2005 Changes in % Sales 236.3 253.6 + 7.3 Income 25.1 31.5 + 25.9 Margin in % 2) + 10.6 + 12.4 + 1.8 3) Number of employees 1,502 1,587 + 5.7 1) Rounding differences may occur 2) Income in relation to sales 3) Percentage points Germany: breakdown of growth in sales and income 1) Total growth Growth from acquisitions Organic growth Currency effects Sales Income 1) Rounding differences may occur + 1.3 + 0.9 + 0.0 + 0.0 + 7.3 + 6.0 + 25.9 + 24.9 Income increased by 25.9% to eur 31.5 million (prior year: eur 25.1 million) and, in percentage terms, this increase was more than three times higher than that for sales. 24.9 percentage points were organic in origin. The margin increased from 10.6% in 2004 to 12.4% in financial year 2005. western and southern europe: The region Western and Southern Europe increased its sales by 19.4% to eur 257.5 million (prior year: eur 215.7 million). A good 8.6 percentage points of these were of an organic nature and almost all of the GfK companies based in the region contributed to these figures. 10.8 percentage points of the increase in sales resulted from acquisitions. Currency effects were not relevant. Western and Southern Europe: key figures 1) In eur million 2004 2005 Changes in % Sales 215.7 257.5 + 19.4 Income 32.1 41.8 + 30.2 Margin in % 2) + 14.9 + 16.2 + 1.3 3) Number of employees 1,849 2,070 + 12.0 1) Rounding differences may occur 2) Income in relation to sales 3) Percentage points Western and Southern Europe: breakdown of growth in sales and income 1) Total growth Growth from acquisitions Organic growth Currency effects Sales Income 1) Rounding differences may occur + 0.0 + 0.0 + 10.8 + 6.7 + 8.6 + 19.4 + 23.5 + 30.2 The total income for the region increased by 30.2% from eur 32.1 million to eur 41.8 million. 23.5 percentage points were organic in origin. This positive trend is attributable in particular to the healthy order book position and the efficient cost management by the companies in this region. In addition, the restructuring of GfK Intomart contributed to this. Only the reorganization of the panel business in Switzerland put a curb on an otherwise successful trend. 6.7 percentage points of the increase in total income were related to acquisitions. The margin increased by 1.3 percentage points to a pleasing 16.2%. 80_GfK

northern europe: Sales in Northern Europe increased by an impressive 128.8%, taking them from eur 55.6 million to eur 127.2 million. This resulted exclusively from acquisitions. Growth through acquisitions totaled 131.2 percentage points, while there was an organic drop in sales of 1.9%. This is mainly due to the poor business performance of GfK Martin Hamblin, uk, which was integrated into GfK nop on September 1, 2005. Currency effects reduced sales by 0.6%. central and eastern europe: GfK increased its sales in Central and Eastern Europe by 31.2 %, taking them to eur 52.7 million. The organic growth in sales totaling 22.3% is the highest of all the regions. The subsidiaries based in Russia and in Turkey, in particular, increased their sales. 4.2 percentage points resulted from sales by GfK Gral-Iteo, Slovenia, which had been consolidated for the first time. Currency effects resulted in a 4.7% increase in sales. Northern Europe: key figures 1) In eur million 2004 2005 Changes in % Sales 55.6 127.2 + 128.8 Income 2.9 8.2 + 182.9 Margin in % 2) + 5.2 + 6.4 + 1.2 3) Number of employees 484 1,033 + 113.4 1) Rounding differences may occur 2) Income in relation to sales 3) Percentage points Central and Eastern Europe: key figures 1) In eur million 2004 2005 Change in % Sales 40.2 52.7 + 31.2 Income 4.5 5.5 + 23.0 Margin in % 2) + 11.2 + 10.5 0.7 3) Number of employees 826 1,004 + 21.5 1) Rounding differences may occur 2) Income in relation to sales 3) Percentage points Northern Europe: breakdown of growth in sales and income 1) Central and Eastern Europe: breakdown of growth in sales and income 1) Total growth + 128.8 + 182.9 Total growth + 23.0 + 31.2 Growth from acquisitions Organic growth Currency effects Sales Income 1) Rounding differences may occur 1.9 0.6 0.4 + 37.9 + 131.2 + 145.4 Growth from acquisitions 7.1 % Organic growth Currency effects Sales Income 1) Rounding differences may occur + 4.2 + 4.7 + 4.7 + 22.3 + 25.4 MANAGEMENT REPORT GfK increased its total income in Northern Europe by 182.9% to eur 8.2 million (prior year: eur 2.9 million). The bulk of the growth (145.4 percentage points) is due to acquisitions. The above-average organic growth in income amounting to 37.9 percentage points is due, in particular, to the healthy business performance of GfK Marketing Services, uk, which is part of Retail and Technology and efficient cost management in Sweden. As a result of the reorganization and subsequent integration of GfK Martin Hamblin into GfK nop, uk, GfK succeeded in paving the way for income to improve further in this region. Currency effects reduced total income by 0.4%. The margin increased in Northern Europe by 1.2 percentage points to 6.4%. In 2005 total income increased by 23.0% to eur 5.5 million (prior year: eur 4.5 million). Once again, it was the companies in Russia and Turkey which contributed to this excellent organic growth in total income with an above-average contribution of 25.4 percentage points. The reduction in income of 7.1 percentage points, which is attributable to acquisitions, ensued from charges, as already mentioned, for GfK Gral-Iteo, Slovenia, in Consumer Tracking. Currency effects increased total income by 4.7%. Compared to the prior year, the margin dropped by 0.7 percentage points to 10.5%. GfK_81

Research and development america: With an increase of 152.4% from eur 82.0 million to eur 207.0 million, in America, GfK achieved the highest growth in sales of all the regions in financial year 2005. The largest share of this, 147.6 percentage points, was due to acqusitions. In addition to the acquisition of nop World, the acquisition of the majority shareholdings in the companies Adimark, Chile, GfK Research Dynamics, Canada and Beyen Marktforschung, usa and Canada contributed to this increase. Organic growth accounted for 3.5% of the increase in sales and currency for 1.2%. America: key figures 1) In eur million 2004 2005 Change in % Sales 82.0 207.0 + 152.4 Income 11.3 31.7 + 180.1 Margin in % 2) + 13.8 + 15.3 + 1.5 3) Number of employees 367 1,258 + 242.8 1) Rounding differences may occur 2) Income in relation to sales 3) Percentage points asia and the pacific: In financial year 2005, sales totaling eur 39.4 million hovered at around the same level as the previous year. Slight organic growth of 0.3 percentage points was due on the one hand to weaker business in Japan and on the other to an increasing number of international orders being processed from Germany. If this factor were not taken into account, sales would have increased by almost 6% compared to the previous year. Asia and the Pacific: key figures 1) In eur million 2004 2005 Change in % Sales 39.3 39.4 + 0.3 Income 7.0 6.3 9.5 Margin in % 2) + 17.8 + 16.1 1.7 3) Number of employees 511 563 + 10.2 1) Rounding differences may occur 2) Income in relation to sales 3) Percentage points Asia and the Pacific: breakdown of growth in sales and income 1) America: breakdown of growth in sales and income 1) Total growth Growth from acquisitions Organic growth Currency effects Sales Income + 3.5 + 19.4 + 1.2 + 0.4 + 152.4 + 180.1 147.6 + 160.2 Total growth Growth from acquisitions Organic growth Currency effects Sales Income 1) Rounding differences may occur 9.5 9.7 + 0.3 0.0 0.0 + 0.3 0.0 + 0.2 1) Rounding differences may occur Total income increased by 180.1% to eur 31.7 million. Just as for sales, the growth in income, totaling 160.2 percentage points, was mainly due to the scope of consolidation which had expanded compared to the prior year. However, with 19.4 percentage points, organic growth in income was also decidedly encouraging. This is thanks, in particular, to the healthy order book position and the efficient cost management of GfK v2, usa. The margin increased from 13.8 to 15.3%. Asia and the Pacific was the only region not to increase its income compared to the prior year. Income decreased by 9.5% from eur 7.0 million to eur 6.3 million. For reasons described above, there was a reduction in organic income totaling 9.7%. On the other hand, currency effects improved income slightly by 0.2%. Despite a slight drop compared to the prior year, the companies in Asia and the Pacific achieved a margin of 16.1% which was the second highest of all the regions. 82_GfK

5. Research and development The development of innovative methods as well as the systematic updating of tried and tested research instruments are of paramount importance to GfK if it wants to stand its ground when confronting the competition and to secure and expand future business opportunities. Innovative research instruments, for example new survey and analysis instruments, are developed and implemented by GfK mainly in cooperation with its clients, but also with university institutions and management consultancy companies. GfK Methoden- und Produktentwicklung (method and product development) carries out central work in instrument development and basic research. In addition, the business divisions and GfK subsidiaries carry out projects on a decentralized basis which serve, in particular, to establish information services in new consumer goods markets, countries and regions. 5.2 Multivariate methods: new procedure in market segmentation and product research In 2005 GfK Methoden- und Produktentwicklung was involved in the further development and optimization of multivariate analysis procedures. Together with a management consultancy company and the marketing chair at Hohenheim University, GfK continued to develop the conjoint analysis procedure, hilca (Hierarchical Individualized Limit Conjoint Analysis), until it was ready to market. The instrument is used to measure the qualities and characteristics which a product or service should have from the point of view of its user. It is primarily intended for research methods in the Custom Research division. The procedure can take into account a higher number of qualities and characteristics and provides results which are more valid than conventional standard procedures. 5.1 GfK Methoden- und Produktentwicklung: center for innovative methodical projects GfK s central research and development department is GfK Methoden- und Produktentwicklung (method and product development) in Nuremberg. It is responsible for the following areas: lifestyle research relating to consumer and market segmentation issues, two statistics departments which offer advice, training and support to GfK companies and their clients in specialized statistical and methodical issues, particularly regarding multivariate methods. These departments also develop new instruments and improve existing ones, a department responsible for defining populations and the optimization and quality improvement of sample surveys, a department which develops and implements program concepts for the survey and analysis software for new instruments. GfK s GfK Methoden- und Produktentwicklung (method and product development) and basic research department are staffed by a total of 22 statisticians and method specialists. In the larger GfK subsidiaries, there are also specialists and experts who advise the consultants and their clients on location. In 2005, GfK was essentially involved in three core activities: Currently, various tools are produced for the purposes of optimizing prices. These can be used for new products and for products which can be configured by clients (for example, cars or computers). In addition, together with GfK Panel Services, Germany, new methods are currently being tested to model the purchase behavior of private households more precisely in order to further improve the existing marketing mix model, Brand Simulator. Also, together with GfK Panel Services, Germany, work has been and is still being carried out on the further development of special analyses. These facilitate a better segmentation of households according to their purchase behavior or provide a better explanation as to how the profit or loss on a brand can be traced back to an intensification or extension of consumption and to profits or losses on other brands. 5.3 Survey instruments and analysis software: new research concepts and technologies In 2005 the Consumer Tracking division focused on the following areas of development: The current traditional consumer panels describe the purchase behavior of households particularly in relation to their consumer habits at home. What is not taken into account is the significant out-of-home consumption. GfK has devoted increased attention to this area in its panels since 2005. MANAGEMENT REPORT the further development of multivariate analysis procedures which can be used both in the analysis of custom research data and that of panel data, the development of survey instruments in panel research, setting up new and expanding existing consumer and retail panels. Reporting by the panel households in the Consumer Tracking division has progressively switched from transfer by telephone modem to transfer via the Internet. This applies both to ConsumerScan and the ConsumerScope panel. In addition, in the Consumer Tracking division, GfK increased the sample survey of its ConsumerScan consumer panel in Germany from 17,000 to 20,000 households. GfK_83

Human Resources In 2005, software specialists in the Consumer Tracking division started to develop a new online analysis instrument. By means of the new software, which is expected to be ready in 2006, the time lag between data collection and its delivery to the client will be drastically reduced. The new instrument will also provide a very flexible opportunity for data querying, which can be used particularly in the causal analysis of market changes and the change in purchase behavior patterns. Some of GfK s major clients are directly involved in this project. 5.4 Panel set-up: expansion of the business in new markets Following the establishment of the retail panel business in the Retail and Technology division in Brazil and Chile in the prior year, GfK proactively progressed the development of a retail panel in Argentina in 2005. Through GfK Sverige, GfK expanded its activities in the Retail and Technology division in the Baltic countries of Estonia, Latvia and Lithuania. This primarily involved extending the retailer network via which the sales data on electronic consumer goods is collected and expanding the quantity and quality of the sales data relating to electronic consumer goods in these countries accordingly. 6. Human Resources GfK and its Human Resources Services department were faced with new challenges following the acquisition of nop World and its numerous new subsidiaries. This essentially involved the further development of the framework conditions that constitute the international staff management policy, which is a necessary requirement for the success of the employees in the companies belonging to the GfK Group. As part of this policy, it is important that concepts are already in place and that cultural differences are respected. 6.1 Management remuneration: 5 Star Incentive developed By means of its 5 Star Incentive, GfK has developed a long-term remuneration plan for top executives, which will replace the prior stock options program from 2006 onwards. It is based on two performance elements: the increase in GfK s total income over a three-year period the Total Shareholder Return (tsr) of GfK shares compared to the tsr of shares in companies listed on the dj Euro Stoxx Media Index The remuneration plan is linked directly with the 5 Star Initiative and the financial targets of GfK and can also be directly compared to the performance of competitors. This new program rewards the personal performance of executives for the success of their companies, contributing to the sustained success of the GfK Group overall. It serves, in particular, to strengthen the management team s commitment to the company. 6.2 International Human Resources strategy: start of implementation In 2005, Human Resources launched the global implementation of the new international Human Resources strategy which had been adopted by the Management Board. It is based on the five Corporate Values Client-driven, Our people, Innovation, Global expertise - local knowledge and Growth and defines standards for staff management and development. It also provides executives across the world with tools for sustained staff management. Central points include conducting regular staff surveys in Germany and other countries as well as the development of national innovation strategies. The development of national innovation strategies encompasses new ways of creating internal suggestion schemes as well as a suitable reward scheme for employees whose ideas and suggestions can be put into practice with direct benefit to the company. The ongoing exchange of experiences which takes place at international human resources conferences and the global monitoring of personnel, in terms of quality and quantity, also constitute some of the key responsibilities of the Human Resources strategy. 84_GfK

6.3 Employees: launch of international exchange program InterAct! Number of employees by division 1) Implementation of the Human Resources strategy is supported by the InterAct! program with which GfK intends to promote the international exchange of staff. Its remit is to strengthen the transfer of knowledge and to promote cross-border and cross-divisional cooperation. Target groups are GfK consultants/ specialists and senior consultants/senior specialists. Custom Research 45.3 % Retail and Technology 25.0 % Consumer Tracking 11.6 % Media 6.3 % HealthCare 5.9 % Others 5.9 % A member of staff may stay with a company in another country for up to three months. The first InterAct! exchange took place from September 2005 to November 2005 between Brazil and Germany. Total 100% 7,515 full-time positions 1) Rounding differences may occur Number of employees by region 1) 6.4 Number of employees: growth mainly due to acquisitions As of December 31, 2005, the staff complement of the GfK Group totaled 7,515, representing a 35.7% increase on the prior year. Over half the growth in Germany (5.7%) was of an organic nature. Outside Germany, the increase of 46.8% in the workforce is mainly due to the 1,572 employees from nop World. This alone accounts for 38.9 percentage points of the growth. The other companies which have been consolidated for the first time contributed 5.9 percentage points to growth in 2005. The high level of growth ensuing from acquisitions was witnessed primarily in the Custom Research, Media and HealthCare divisions. The Custom Research division recorded the highest increase in staff levels, up 73.4% to stand at 3,401 employees (prior year: 1,961). 45.3% of all GfK staff now work in this business division. Northern Europe and America were the regions most affected by the increase in the workforce and, to a lesser extent, Western and Southern Europe. In America, the figure more than tripled compared to the prior year while in Northern Europe, the figure more than doubled. Germany 21.1 % Western and Southern Europe 27.5 % Northern Europe 13.7 % Total 100% 7,515 full-time positions 1) Rounding differences may occur Central and Eastern Europe 13.4 % America 16.7 % Asia and the Pacific 7.5 % MANAGEMENT REPORT 6.5 Staff turnover: a slight increase The staff turnover rate at the GfK Group is expressed as the ratio of employee resignations in relation to the total number of employees. In particular, competition in the highly competitive markets of Central and Eastern Europe and Asia and restructuring measures as part of the integration of nop World caused this indicator to rise from 8.7% to 10.4%. In Germany, which has the lowest staff turnover rate overall, the rate increased slightly, although it remained at 2.1% (prior year: 1.7%). Compared to other German companies, this is still a very low level. GfK_85

Organization and administration 7. Organization and administration GfK s business model focuses on providing information services that specialize exclusively in market research. The company has consistently geared its organization and administration to the standards which support the global growth of GfK. These predominantly include the decentralization of functions which ensure an optimum business performance at the individual companies. In addition to the parent company, the GfK Group s network comprises 27 affiliated companies and one participation in Germany. Outside Germany, GfK has a total of 172 subsidiaries, offices and participations in 70 countries. GfK ag acts both as a holding company and as an active operating unit. The Group is based in Nuremberg. 7.1 Management Board and divisional executive bodies: matrix organization Until May 31, 2005, the company was run by a Management Board consisting of four members. The number of Management Board members subsequently increased to five. The Chief Executive Officer (ceo) is responsible for Strategy, Internal Audit, Product and Methodology Development, Corporate Communications and it Services. Before May 31, 2005, the ceo also managed Financial Services, Human Resources and Central Services. As of June 1, 2006, these responsibilities were taken over by the new Chief Financial Officer (cfo). The operating business is organized on a matrix basis. In 2005, two of the three Management Board members with responsibility for operations were each responsible for one business division and certain GfK companies. The third Management Board member, also responsible for the subsidiaries, was responsible for the Consumer Tracking, Media and HealthCare divisions. Each business division also has its own executive body consisting of the responsible Management Board member and selected executives. The members of these executive bodies have the task of coordinating work in the divisions efficiently. Sales and income are collated along divisional and regional lines. Hurdle rates for operating income in relation to sales serve as target and management indicators for each business division. The Chief Information Officer (cio) advises the Management Board on the global harmonization of it services, in particular, standards for optimizing procedures and costs for the purchase of hardware and software as well as the organization of the network. The cio reports directly to the ceo. 7.2 Administration: centralized services within the Group The Financial Accounting and Operational Accounting departments of Financial Services as well as Central Services are responsible for most of the companies in Germany. Outside Germany, responsibility for the functions of the latter departments rests with the individual GfK companies. 7.3 Sub-holdings: cross-regional and cross-country duties As locally-based centers, sub-holdings assume national and international functions for the operating business. These subholdings include GfK Asia, Singapore, which is responsible for the Asian companies, and fessel-gfk, Austria, which is responsible for the majority of subsidiaries in Central and Eastern Europe. Since expansion of the alliance with the npd Group in the Retail and Technology division, GfK has set up two holding companies according to region. These comprise the Non-Food Tracking holding for Europe and Asia and the GfK Latinoamerica holding for Latin America. In the usa, the majority of companies active in the HealthCare division and mri are grouped together under the GfK us holding. Companies operating in the HealthCare division are integrated in the GfK u.s. Healthcare Companies sub-holding. In addition, the organization of operations in the Custom Research division is monitored by the GfK Custom Research North America Board. 8. Purchasing As an information service provider, purchasing in the traditional capital goods markets is of secondary importance to GfK. In Germany, Central Services, which form part of GfK Group Services, and it Services, which belong to GfK Data Services, control and monitor the purchase of work materials and standard equipment. Similar central purchasing departments have been established in other countries. 9. Environmental protection In line with the company s proactive approach, all GfK employees are urged to comply with environmental and recycling standards when purchasing, using and disposing of work materials and office equipment. Employees are supported in this endeavor by the GfK environmental officer and Central Services and it Services, which are responsible for the purchase and disposal of materials. GfK ag s Group Services comprise the following centralized administrative departments: Investor Relations, Public Affairs and Communications and Financial Services, which includes Group Accounting, Group Controlling, Treasury, Tax, Legal Services and Transactions and Human Resources; all of these have global responsibility. 86_GfK

10. Marketing and corporate communications For companies providing market information services to clients from the consumer goods and pharmaceutical industries, retail, the media and the services sector, regular direct contact with existing and potential new clients is the most important marketing instrument. Accordingly, all GfK subsidiaries are responsible for organizing and running their own marketing activities in close consultation with Public Affairs and Communications. The high degree of decentralization gives GfK subsidiaries the necessary flexibility to carry out client-oriented marketing appropriate to the respective market environment and local conditions. 10.1 Marketing: dialogue comes first Key account management and new business development All business divisions include cross-divisional marketing activities, which facilitate the strategic planning and consistent promotion of business operations with existing and potential new clients. The tasks focus primarily on the increasing number of clients who carry out international studies or require information from several countries or whole regions. Major clients are looked after by key account managers and their teams. Conferences and other events The trade conferences and client events organized by GfK, and the company s active participation in events hosted by German and international marketing and market research associations, play a key role in maintaining contact with existing clients and establishing relationships with potential new clients. Examples of events organized or co-organized by GfK in 2005 are: the Best Brands 2005 event in Munich in January 2005 organized by GfK Marktforschung, WirtschaftsWoche, Serviceplan, Seven One Media and the Markenverband (German branded goods association), which are all based in Germany the Retail and Technology conference in March organized by GfK rus, Moscow the Research Summit on the topic Innovative Solutions to Optimize Return on Marketing Investment, held in June in Berlin and organized by GfK Custom Research Worldwide the Financial Markets Conference in November in Vienna organized by Fessel-GfK the client conference on the qualitative market research topic Diving Deep, held in November in London and organized by GfK nop the client conference on the topic of the booming consumer electronics markets in China, held at the end of November in Shanghai and organized by GfK Marketing Services China In addition, the GfK Academies in the Custom Research and Consumer Tracking divisions offered their clients a total of more than 20 seminars and workshops on special instruments and services. Finally, both the GfK Group and individual GfK companies contributed to numerous conferences, sector events and trade fairs held by German and international marketing and market research associations, by delivering specialist lectures and company presentations. 10.2 Public Affairs and Communications: Group-wide competence Public Affairs and Communications, which is tasked with corporate communications at Group level, is essentially responsible for three areas: external communications, internal communications and the design of the corporate image (corporate identity, corporate design). One of the main focuses for 2005 was the revision of the existing sections of the Corporate Design guidelines and their expansion through the incorporation of new elements. A second focal point was the new design of the GfK website. This work is continuing in 2006 and aims to create a website which is modern, not only visually but also in terms of content, for the GfK Group and all the subsidiaries across the world. A third focus launched in the second half of financial year 2005 was providing the numerous subsidiaries new to the GfK network and particularly those from the former nop World with new documentation and presentation material as quickly as possible, and supporting them in terms of the new design of publications and other means of communication. MANAGEMENT REPORT the conference for Central and Eastern Europe on the topic Communications in Transition, held in June in Vienna and organized by Fessel-GfK the conference The digital world, held in June in Sydney and organized by GfK Marketing Services Australia the annual conference of GfK Marketing Services Thailand on market trends in the countries of South-East Asia, held in August in Bangkok the conference held by GfK Marketing Services Vietnam in October in Ho Chi Minh City GfK_87

Risks 11. Risks All aspects of risk management at the GfK Group are integrated into a comprehensive early warning system, which is continuously developed. As in prior years, in 2005 the Group s external and internal auditors confirmed the effectiveness of the system. 11.1 Basic principles of risk management: an integrated system principles of risk management policy: As a basis for positive risk management, the GfK Group applies principles of risk management policy on which the risk management systems in all the divisions must be based. The main principles are: You can only manage risks that are known. As a result of constantly changing circumstances and demands, identifying risks is one of the ongoing tasks that form an integral part of daily working practices. Risk management is an early warning system which enables appropriate measures to be implemented at an early stage to avert any negative impact on business growth. GfK s horizontal organizational structure and the culture of open communication also increase transparency and facilitate the identification and management of potential risks. Risks are systematically assessed. Not all risks are of equal importance. To ensure efficient risk management, any risks identified must be assessed systematically in terms of the potential damage and the probability of the risk occurring. The potential damage is measured in terms of the estimated negative impact on the company s income over the next two years. The aim of the risk assessment is to ascertain which risks could materially jeopardize the company s success. To this end, GfK has specified standard quantitative and qualitative threshold values for all business divisions. In addition to the materiality of a risk, another criterion is whether a risk might endanger the company s existence. By applying the threshold values, it is possible to define when such a risk would be present for the GfK Group. Risk management is everyone s responsibility. It is the responsibility of every employee to avert potential damage to the company. In addition to basic knowledge of the risk management system, this requires a high level of risk awareness among employees. GfK uses targeted information material and holds workshops to raise risk awareness among its workforce. responsibilities and functions: Due to the Group s decentralized structure, direct responsibility for the early identification, management and communication of risks rests locally with the operating management of the individual GfK companies. Risk management coordinators at the companies ensure that the central regulations are applied in the respective organization and they also promote risk awareness. As part of its overall responsibility for the risk management system, the Management Board has appointed a risk management committee which continually expands and updates the Group s arrangements for efficient and effective risk management. This committee is responsible for the planning and ongoing development of the system s methodology and for ensuring its effectiveness. Its key tasks include identifying risks relevant to the GfK Group and informing the Management and Supervisory Boards about the current risk situation within the GfK Group. processes: In order to take full account of risks, the GfK Group applies an integrated risk management approach. This involves identifying and managing strategic and operating risks at the level of the various companies and at regional, divisional and Group level. GfK Group integrated risk management system Group level GfK integrated risk management system Divisional level Company level The core of this system is the annual risk inventory carried out by the risk management coordinators, which covers developments relating to risks identified in the prior year and new risks that have emerged. Using a checklist which contains all the areas to be monitored in terms of risk, risks are assessed according to the probability of their occurrence and the extent of potential damage, so that concrete measures can be specified to manage them. If new risks emerge during the year, or if the risk situation changes significantly, ad hoc reporting ensures that the Management Board is informed immediately. In addition, a standardized reporting system, which is based on Group-wide standard criteria, guarantees that financial risks relating to current and future business trends are monitored. Based on the commercial data provided by the various business units of the company, Group Controlling produces monthly internal reports which provide information at an early stage about any possible risks to business performance. In addition, forecasts and budgets during the year provide important indicators of any imminent commercial risks. A continuously updated set of guidelines, which specifies all mandatory approval processes, also forms part of the internal controlling process. In 2005, authorization guidelines came into force, which apply internationally and which stipulate on a mandatory basis the framework for powers and authorities. 88_GfK

Elements of the risk management system Reporting system management system with special loyalty programs for major clients, GfK intends to minimize the risk of losing major accounts. By taking measures to reduce costs, the business division has, as in prior years, taken considerable additional precautions. Guidelines Risk management handbook Risk inventory Exceptional risk reporting documentation and monitoring: All principles, functions and processes of the GfK Group s risk management system are documented in a handbook, which applies throughout the Group. Every employee can access the handbook on the Intranet. The Internal Audit department regularly reviews the structure and effectiveness of the risk management system. Risk management is also assessed as part of all audits carried out at subsidiaries in Germany and abroad. The findings of such audits, combined with advice from the auditors, help to improve the early warning risk management system. 11.2 Assessing the risk situation: individual risks Other (e.g. security standards, integration concepts etc.) macro-economic risks: For financial year 2006, GfK expects additional impetus from slight economic growth. GfK does not currently anticipate substantial risks from the macro-economic trend, which could result in significant order setbacks or a decline in sales at Group level. Bad debts due to insolvency were minimal and did not affect the GfK Group s liquidity. sector risks: The past few decades have shown that, unlike other segments of the marketing and advertising sector, market research is relatively unaffected by economic fluctuations. In addition, as a full-service provider offering a vast range of studies and analyses and on the basis of its corporate network, the GfK Group is in a position to compensate for regional and sector-related fluctuations. The risks detailed below relating to the individual business divisions do not therefore pose any major threat to the GfK Group s business performance. The market research segment in which the custom research division provides services is characterized by the presence of large international suppliers as well as many smaller local suppliers. Market entry barriers are significantly lower on account of the much lower investment costs compared to continuous consumer, media user and retail panel research. With its range of innovative products and methods and a key account The expansion of the network is a further targeted measure designed to meet the requirements of international clients. A decisive step was made in this direction with the acquisition of nop World. The retail and technology division s excellent market position in the countries where it today operates its own companies makes a major contribution to the overall success of the GfK Group. GfK is by far the leading supplier of information on the consumer electronics and durables markets worldwide. Its strength lies in the vast market knowledge, the competence of its local management and the use of cutting edge instruments, which enable the division to provide global clients with up-to-date services. The systematic expansion into economically relevant countries in all regions of the world and the consistent broadening of the range of services are the strategic cornerstones for further enhancing this market position. The worldwide introduction of the modern analysis and production system, startrack, was another important measure in this respect. In the consumer tracking division, the reorganization of retail panel research in Switzerland, which took place in the last financial year, adversely affected performance. This was a necessary step resulting from changes in the supply and demand structure of tracking data on the part of retail. By working together with large retail companies, this risk should be reduced in the future. However, fierce international competition persists and is making market conditions difficult. In order to continue to be successful in this highly competitive environment, GfK is working very hard to ensure that the quality and level of innovation of its services remain high. In 2005, 36% of sales in the media division resulted from longterm contracts with fixed order volumes relating to continuous tv and radio ratings research. Accordingly, the greatest risk in this division is the fact that it depends heavily on major clients. The acquisition of nop World especially strengthened multi-client business in the print media and made a significant contribution towards minimizing this risk. With the development of a uniform, efficient production and reporting system which can be used internationally, GfK ensures that it can provide clients with quality data based on a flexible approach. Compared to other sectors, healthcare operates in a tightly regulated market. This presents both risks and opportunities for the division. By acquiring nop World, GfK s international presence in the HealthCare division was expanded. This is a decisive factor, particularly for major global clients from the pharmaceutical industry. MANAGEMENT REPORT GfK_89

Risks Mergers and acquisitions affect all business divisions, because they diminish the client base. As a result, there is a risk of marketing budgets being consolidated and reduced. To compensate for the concentration process, GfK has increased investment in new client business and key account management, and offers innovative and more differentiated technologies and methods. This also includes consistent quality management. GfK s overall dependence on major clients remains low. When compared to the prior year, the share of GfK Group sales attributable to the top 10 clients decreased from 15 % to 12 %. Operating risks are restricted by the fact that no more than 10 % of consolidated Group sales are transacted with a single client in any of the divisions. The GfK Group s global presence ensures that no regional dependencies arise that may represent a relevant risk. operating risks: Last year, the pressure resulting from costs continued to increase in all the GfK divisions and companies. The number of cut-price suppliers who use dumping prices to gain a foothold in the market or who attempt to squeeze competitors out of the market is growing. Clients are very priceconscious but at the same time, they are increasing their demand for cost-intensive consultancy services and integrated information solutions. As in prior years, in 2005 GfK continued to invest substantially in the ongoing optimization of processes, costcutting measures and innovation in order to strengthen its competitiveness. GfK monitors the progress of major, cost-intensive innovation projects by means of a regular reporting system. At present, no material risks associated with research and development activities have been identified. personnel risks: Staff turnover increased slightly in Germany and at global level as a result of the economic upturn. GfK s success depends largely on the qualifications, motivation, performance and loyalty of its employees. In order to attract, integrate and retain specialists and managers long-term, GfK offers a differentiated qualification and continued professional development program and works towards improving its Human Resources policies on an ongoing basis. financial risks: In order to finance the acquisition of nop World in June 2005, GfK ag arranged for a syndicated loan facility amounting to eur 530 million and usd 170 million, which runs up until April 2010. As of the cut-off date, GfK had utilized almost 89% of this. In addition, GfK ag has access to bilateral credit lines totaling around eur 70 million, of which approximately 12 % had been taken up as of the year-end. The financing elements referred to, as well as cash holdings amounting to eur 85.1 million as of the cut-off date, secure the financing of the Group. There are currently no financial risks. foreign currency risk: As a global company, the GfK Group is exposed to transaction and currency translation risks. The transaction risk results from the sale and purchase of goods and services which are not paid for in the local currency of the respective business unit. Due to the fact that all GfK operating companies have sales and expenses in the local currency, the currency risk at GfK is restricted at operational level. Intra-Group guidelines also regulate that all GfK units monitor their currency risks and hedge against currency fluctuations for foreign currency projects of a certain size. As a rule, GfK provides in-house financing in the local currency of the subsidiary. The ensuing currency risks in the Group s Treasury are hedged using derivatives. Hedging transactions usually run for 12 months maximum. The offsetting effects of the underlying transaction and the currency hedge are recognized in the income statement and are therefore identifiable. The currency translation risk is due to the fact that many GfK companies are outside the euro-zone but GfK produces its accounts in euros. In the consolidated financial statements, the balance sheets and the income statements of companies outside the eurozone must be converted into euros. The translation-related effects from changes in exchange rates are shown in Equity and liabilities on the GfK consolidated financial statements. As the participations are generally of a long-term nature, GfK dispenses with hedging directly for net assets. Instead, the Group tries to use natural hedges to provide cover for participations. To do this, the financing is in the currency of the respective company so that currency fluctuations are kept to a minimum. In order to eliminate volatility in the income statement relating to the cut-off date valuation of currency liabilities, GfK uses hedge accounting according to ifrs and pursuant to ias 39 for long-term financing. Accordingly, valuation effects are reported under Equity and liabilities. interest rate risks. At GfK, interest rate risks mainly arise for financial liabilities. GfK has used the favorable interest rate conditions to safeguard interest rates on a long-term basis and ensure greater accuracy when calculating financing requirements. For this reason, as of the cut-off date, GfK ag had hedged the majority of its financial liabilities by interest rate swaps, which are reflected as cash flow hedges in accordance with ias 39 and impact on the income statement like fixed-rate loans. The above explanations on currency and interest rate risks comprise information that, in principle, is to be supplied in the notes to the financial statements. 90_GfK

legal risks: The concept of apparent self-employment is still a matter of debate in numerous countries. GfK avoids additional costs by adjusting the employment terms to the respective state legislation. As a result of the tightening up of legal regulations within the context of carrying out surveys, risks may arise for the whole of the market research sector. As part of its disaster recovery plan, GfK monitors other risks arising outside the it area on a continuous basis. Essential risks from compensation claims and liability issues are covered either locally or on a Group-wide basis by umbrella insurance policies. No major it or other risks have currently been identified at the GfK Group. GfK is involved in civil law proceedings in a number of countries which have various causes in law. Material risks from compensation claims or the above legal proceedings which are not already covered by provisions, do not exist at the present time. As a result of the marked increase in business volume in the usa, GfK has set up a separate legal department there. risks ensuing from acquisitions: The acquisition of new companies and their integration into the Group are associated with risks. GfK prepares for such risks with extensive due diligence checks prior to any acquisition and through measures which support the acquisition process. In addition, the Supervisory Board of GfK ag plays an active role in the acquisition process. As a result of many years of experience of buying companies, GfK is aware of the risks associated with the acquisition of nop World, which has been GfK s biggest acquisition to date. GfK has set up project teams that comprise managers from GfK and the nop World companies. Their tasks include creating structures which will result in a swift fusion of the two corporate groups and harmonization of the service offering, production processes and administrative duties at organizational level. it and other risks: Setting up, maintaining and developing security measures to protect information systems and the data stored in them is crucial for a market research company such as GfK whose services are based on providing information about markets, consumers and brands. Precautions to secure information technology and associated applications have always been given the highest priority. From 2002 to 2004, GfK carried out additional security checks at its head office in Nuremberg. Since 2002, it has organized systematic it security checks as part of routine annual audits at other GfK subsidiaries. In 2004 and 2005, mandatory it security standards were drawn up by GfK for all companies within the Group and an it Security Policy was developed based on British Standard 7799. A start has been made in 2006 to implement the it Security Policy throughout the Group and this work is expected to be completed in 2007. The Chief Information Officer (cio) coordinates Group-wide it strategies and security concepts, working alongside the it security specialists from the company headquarters in Nuremberg and the it managers in the GfK companies outside Germany. 11.3 Assessment of overall risk An assessment of GfK s overall risk situation shows that the risks are limited and manageable and do not materially affect the assets, financial position and income situation of the GfK Group. No lasting damage to business growth at the GfK Group is currently anticipated due to individual risks or the interaction or accumulation of risks. Due to its size, the integration of the former nop World represents a major challenge for GfK. The development of the subsidiaries of the former nop World to date and the process of incorporating them into business operations shows that GfK is on the right path and is making good progress. In summary, the overall risk situation of the GfK Group continues to be regarded as a low risk situation. At present, there are no risks that could endanger the continued existence of the GfK Group. 12. Major events since the end of the financial year In its meeting on February 21, 2006, the Supervisory Board extended the contract of Petra Heinlein, member of the Management Board, by 5 years. In April of this year, GfK signed a contract with agf covering the gradual switch of the tv viewer panel to a new technology as from 2007. This agreement, which is additional to the current contract covering tv ratings, will run from 2007 to 2011. Like the other contract, it contains the option to extend it until 2013. The order volume up to 2011 totals eur 19 million. In addition, GfK has expanded its network in Argentina, Israel, Mexico and Switzerland in the first few months of 2006. Expansion of the GfK network 2006 Company Merc, Mexico KleimanSygnos, Argentina GfK rt Israel, Israel GfK Research Matters, Switzerland Investment activity Acquisition Acquisition Established Increase in shareholding Share purchase/ change in % Business division Region 51 Custom Research America 80 Custom Research America 65 Retail and Technology from 33 to 66 HealthCare Western and Southern Europe Western and Southern Europe MANAGEMENT REPORT GfK_91

Outlook 13. Outlook 13.1 Macro-economic situation: robust with slight trend to slowing down According to economic research institutes, the global economic trend continues to show strong form at the beginning of 2006. In the initial months of the current year, the economic expansion will once more be very strong. However, during the course of the year, it will gradually lose momentum. This is not indicative of an actual cyclical downturn. According to the experts, this applies in particular to the usa where increased interest rates are likely to result in private households spending less. In addition, the growth rate of production will probably decline. For Japan and the European Union, that is in the euro-zone and in particular in the eu accession countries, the upturn is expected to continue into next year, despite a slight slowdown in the economy due to less expansionary monetary policy, more restrictive fiscal measures and a slight downturn in the global economy. For the industrialized countries overall, economic researchers are expecting an increase in actual gdp of 2.7% in 2006 and 2.6% the following year. Overall, inflation is expected to remain moderate in 2006 and 2007. In the threshold countries of Asia and South America, production is increasing at a slower pace. However, growth rates remain above average. This applies in particular to the economic trend in China, which is only cooling down gradually. It is expected that the other Asian countries will also continue to expand rapidly, especially since domestic demand is of paramount importance for the economies of these countries. Since early 2006, the German economy has seen an upward trend. For the first time in five years, domestic demand is also increasing, especially private consumption. Experts expect that the increase in vat, higher interest rates and the slower global economic growth will have a dampening effect next year. 13.2 Market research sector: additional potential for growth The market research sector is a growth market with above-average potential. For 2006, experts expect sector growth of around 5%. Key growth drivers for the next few years are: tougher competition in many national markets between global and locally-based companies following globalization, increasing demand for market research services in the Central and Eastern European countries as well as in the emerging markets of Latin America and Asia, continued growing demand from small and medium-sized companies for market information, tougher competition as a result of the deregulation of markets and the associated increased demand for market and customer information, demand for information on new product and service markets which have emerged mainly as a result of innovative communication and information technology. 13.3 Opportunities: further growth through building on achievements Two developments represent new challenges for the market research sector. At the same time, they bring with them opportunities never seen before in the industry: the continued globalization of our clients and the associated consolidation of the markets they operate in, and the rapid development of information and communication technology that provide the sector with new, efficient and cost-effective opportunities for collecting, analyzing and managing data. Following the acquisition of nop World, GfK has considerably enhanced its capabilities for mastering these challenges and turning them into success: GfK has created the basis for further and sustained globalization of its network and services to an extent that neither the GfK Group nor nop World could have achieved alone. The Group is well positioned in the traditional marketing and market research markets of Western, Southern and Northern Europe and North America, as well as in the rapidly growing markets of Asia, Latin America and Central and Eastern Europe. This provides GfK with a strong basis for continued growth. In addition, GfK has expanded its technological and investment horizon, enabling the Group to meet client requirements by providing innovative and efficient metering and analysis instruments that can be used at global level and support clients in their decision-making processes with first-class information and consultancy services. 92_GfK

13.4 Research and development: pooling expertise In Research and Development, integration is one of the tasks given priority both this year and next year: at present, crosscompany teams are being set up for research-intensive tasks such as the development and improvement of market seg - mentation and forecast models. These teams will include statisticians and specialists in methodology from the various GfK subsidiaries. In addition, the ongoing development of electronic metering technology and analysis software continues to take high priority. Another focus is the further development of information systems and analysis instruments available to clients, which will provide clients with increasingly flexible options for carrying out analyses by directly accessing GfK s databases. 13.5 Human Resources: promoting the integration of the nop World companies Based on an unchanged scope of consolidation, GfK expects the number of staff to increase slightly in 2006. GfK is focusing heavily on integrating the nop World companies and other companies acquired in 2005. In addition, an increasing number of project teams are being set up which are staffed at international level. These will promote the networking of the various locations and ensure the comprehensive transfer of knowledge. The deployment of GfK staff to locations in other countries is intended to facilitate the transfer of expertise and to develop the experience of senior executives as fully as possible. In addition to interesting continuous professional development opportunities presented by a successful market research company, GfK offers its staff the option of choosing an international career within the company. 13.7 Marketing and corporate communications: harmonizing the websites In 2006, the complete revamping of the GfK website has top priority. The website, which was first developed in 1999 at the time of GfK s ipo and has since seen many changes, is being replaced by a solution that is new in terms of structure and visual display and is based on state-of-the-art technology and design. The cornerstone of the rework is a Content Management System which can be used on a centralized or a decentralized basis. It ensures that the design is harmonized throughout the entire corporate network. 13.8 Investment and financing: reducing debt Future investments are focused on enhancing and further developing technical resources, such as the panels and production software, and expanding human resources. Investments in the day-to-day business are financed by the inflow of funds from cash flow. Any additional capital requirement would only exist to ensure the financing of acquisitions. Major company acquisitions are not planned at present. With authorized capital of around 12.6 million no-par shares and relevant credit facilities, GfK is also able to provide adequate finance using its own and external funds. GfK intends to reduce the debt incurred for financing the acqui sition of nop World. For this purpose, the Group will use the free cash flow to significantly lower the ratio of net indebtedness to ebitda. The Group Treasury department supports this by using cash pools. GfK is set to expand this central instrument for controlling liquidity, particularly in the usa. MANAGEMENT REPORT 13.6 Organization and administration: continuing the streamlining process The decentralized corporate structure will be maintained in 2006. Project teams are working on streamlining the company structures in the uk and usa. From 2006 onwards, the Custom Research activities in Latin America will be combined to form GfK Custom Research Latam Holding. 13.9 Corporate growth at the GfK Group: exceeding the 1.1 billion euro sales mark In 2006, the GfK Group aims to significantly increase sales and income again. With the same scope of consolidation, GfK expects sales to total eur 1.1 billion. This equates to an increase of almost 18 %. As in prior years, GfK assumes that it will out - perform the market and gain market share. In addition, the Group aims to increase income at a rate which is higher than that for sales. GfK anticipates that the integration of the nop World companies will entail additional expenses of eur 2 million to eur 3 million. These expenses relate mainly to the following factors: optimizing the it environment, harmonizing methods, streamlining the lease portfolio and, to a limited extent, lay-offs following the restructuring of workflows. GfK_93

Outlook In the next few years, charges ensuing from the amortization of disclosed hidden reserves as part of purchase price allocation are likely to remain at the level of 2005. From now on, personnel expenses for share-based payments and long-term incentives will be shown directly in the income statement in accordance with ifrs. The Stock Option Program, which was last offered in 2004, will expire in 2011. The expenses associated with this accounted for around eur 2 million in 2004 and approximately eur 2.6 million in 2005. In 2005, the system was replaced by the 5 Star Incentive Program which, as required in the German Corporate Governance Code, provides for a restriction on pay-outs. The expenses are calculated on the basis of option models and take into account a variety of market factors. The amount depends mainly on company performance and the GfK share price. Other expense and income components also contain the foreign currency results. The loans raised in connection with the acquisition of the nop World companies were structured in such a way that in future the currency effect on the income statement would only be minor. The high level of internal financial interlinking in the former nop World has been almost completely removed in the meantime and the associated foreign currency impact on other income will be reduced considerably. In its forecast, GfK assumes that the euro will not change significantly in relation to the main currencies, the us dollar and the pound sterling. Accordingly, the currency effects from the operating business will only have a minimal impact on income. GfK expects income from participations to be an amount in the lower one-digit million range. Although GfK generates the majority of its sales volume in countries with a high tax ratio, such as Germany, the uk, Italy and the usa, it is endeavoring to bring the group tax ratio excluding one-off effects close to the 30% mark. The increased interest payments from the financing of the nop World acquisition will reduce tax expenses. 13.10 Divisional trends: continuing the optimization and integration process GfK expects all five business divisions to increase sales and income. The marked increase in sales in the Custom Research, Media and HealthCare divisions is mainly due to the full-year consolidation of the nop World subsidiaries in 2006. GfK business divisions: guidance 2006 Growth in sales in % 2006 1) In eur million Sales 2005 2005 Custom Research 416.4 > 21.0 ~ 8.8 > 8.5 Retail and Technology 209.6 > 6.0 ~ 25.5 > 25.0 Consumer Tracking 100.3 > 7.0 4.5 ~ 6.0 Media 96.2 > 20.0 ~ 23.8 ~ 22.0 HealthCare 107.3 > 33.0 ~ 7.6 ~ 12.0 GfK Group 937.3 3) ~ 18.0 ~ 12.6 > 13.0 The comparison between the 2005 and 2006 margins must take into account that the nop World companies were only consolidated for the last seven months of 2005. Just as for GfK, growth in income for these companies in the second half of the year is, as a rule, significantly better than in the first few months. Accordingly, the income of nop World cannot simply be extrapolated on a straightline basis. In the table, in which a 12-month consolidation of nop World was simulated (like-for-like), this is taken into account when calculating the margins for 2005. GfK anticipates the following individual trends: Like-for-like margin in % 2) 1) Expectation 2) Assumption: sales and income of nop World companies for the whole of 2005 3) Including Other Margin 1) in % 2006 In the custom research division, GfK expects an increase in sales of more than 21%. Two tasks are top of the agenda in 2006: firstly, GfK plans to further harmonize its extensive range of services and integrate these into a service system. Secondly, the company plans to drive forward expansion in Latin America and Asia and the Pacific. The target margin is above 8.5%. In the retail and technology division, GfK expects sales to increase by at least 6% and the margin to be higher than 25%. Opportunities in this business division are based mainly on innovation and dynamic growth of consumer technology markets. Accordingly, GfK aims to extend further its range of services in this division. In the consumer tracking division, GfK expects sales to be up by more than 7% and anticipates that this business division will increase its margin to around 6.0% in the current year. In this way, the business division will succeed in improving its income following disappointing setbacks in 2005. 94_GfK

In the media division, GfK anticipates that sales will rise by more than 20% and that the margin will be around 22%. The slight decrease on 2005 is due to expenses relating to setting up a uniform production system for tv audience research. Long-term contracts for continuous tv and radio ratings provide a good order basis for the media division. The trend in custom media research in the current year will depend on how the upturn experienced by the print media market continues to develop. In addition, GfK assumes that it will generate additional business by winning tenders for radio listener and tv viewer ratings. In the healthcare division, GfK aims to increase sales by more than 33% and achieve a margin of around 12 %. The Group also intends to strengthen its presence further in the global pharmaceutical markets of the usa and Europe and rapidly expand business in Asia. In the other division, GfK expects sales to remain at the same level as for the prior year and anticipates that once more a loss will be recorded which should, however, be lower than in the past. The deficit is attributable, in particular, to Group services which cannot be further offset. GfK is confident that it is excellently placed as a specialist market research company and regards its focus on the provision of related services as a crucial competitive advantage. The Group will therefore continue to fully exploit and extend market opportunities in this sector. Nuremberg, April 12, 2006 Prof. Dr. Klaus L. Wübbenhorst Christian Weller von Ahlefeld At the end of March GfK had already achieved 51% of its sales target for this year in terms of existing orders, incoming orders and sales invoiced. This amount is almost the same as the prior year s level. At GfK, the structure of orders that are relevant to sales has changed following the acquisition of nop World. The proportion of Custom Research business, in particular, has increased. Due to this shift in the portfolio of orders, the figures are only comparable with the prior year to a limited extent. Petra Heinlein Dr. Gérard Hermet MANAGEMENT REPORT Wilhelm R. Wessels GfK_95

96_GfK

Financial statements for the GfK Group Consolidated income statement 98 Consolidated balance sheet 99 Consolidated cash flow statement 100 Consolidated statement of recognized income and expense 101 Notes to the consolidated financial statements for 2005 102 General information 102 Consolidation principles 103 Accounting policies 104 Scope of consolidation and major acquisitions 109 Notes to the consolidated income statement 112 Notes to the consolidated balance sheet 115 Proposed appropriation of profits 123 Segment reporting 128 Pro forma statements in accordance with ifrs 3 130 Notes to the transition from us gaap to ifrs 130 Supervisory Board 136 Management Board 137 Shareholdings of the GfK Group 138 Auditors report 143 FINANCIAL STATEMENTS GfK_97

Consolidated income statement in accordance with ifrs in eur 000 for the period January 1 to December 31, 2005 Note 2004 2005 Sales 1., 29. 669,071 937,335 Cost of sales 451,354 638,321 Gross income from sales 217,717 299,014 Selling and general administrative expenses 141,022 202,607 Other operating income 2. 10,591 10,296 Other operating expenses 3. 9,677 26,030 Adjusted operating income 5. 82,855 125,055 Integration costs in connection with acquisitions 5. 0 15,658 Amortization and impairment of additional assets identified on acquisitions 5. 5,614 15,902 Personnel expenses for share-based payments and long-term incentives 5. 1,958 2,597 Other operating income 2. 10,591 10,296 Remaining other operating expenses 5. 8,265 20,521 Operating income 77,609 80,673 Income from associates 4,533 3,182 Other income from participations 6. 184 25,097 ebit 81,958 108,952 Financial income 7. 4,106 2,333 Financial expenses 8. 4,700 19,085 Income from ongoing business activity 81,364 92,200 Tax on income from ongoing business activity 9. 28,229 24,683 Consolidated total income 53,135 67,517 Attributable to equity holders of the parent 42,345 59,352 Attributable to minority interests 10,790 8,165 Consolidated total income 53,135 67,517 Basic earnings per share (eur) 10. 1.35 1.77 Diluted earnings per share (eur) 10. 1.34 1.75 FINANCIAL STATEMENTS 98_GfK GfK_98

Consolidated balance sheet in accordance with ifrs in eur 000 as of December 31, 2005 Assets Note 31.12.2004 31.12.2005 Goodwill 11. 190,153 735,771 Other intangible assets 11. 54,605 225,193 Tangible assets 12. 65,024 80,721 Investments in associates 13. 12,420 11,488 Other investments 13. 11,324 4,346 Deferred tax assets 9. 10,085 43,186 Other non-current assets and deferred items 14. 3,988 3,581 Total non-current assets 347,599 1,104,286 Inventories 1,172 852 Trade receivables 15. 138,176 253,211 Securities and fixed-term deposits 16. 6,488 5,522 Liquid funds 17. 48,697 79,599 Other current assets and deferred items 18. 21,090 52,282 Total current assets 215,623 391,466 Total assets 563,222 1,495,752 Equity and liabilities Subscribed capital 133,734 148,917 Capital reserve 92,000 174,402 Retained earnings 19,487 68,669 Income and expense recognized directly in equity -7,381 12,402 Equity attributable to equity holders of the parent 237,840 404,390 Minority interests 18,910 22,167 Total equity 19. 256,750 426,557 Long-term provisions 20. 33,811 54,292 Long-term interest-bearing financial liabilities 21. 50,999 559,341 Deferred tax liabilities 9. 13,372 84,764 Other long-term liabilities and deferred items 1,240 556 Non-current liabilities 99,422 698,953 Short-term provisions 22. 7,375 8,012 Short-term interest-bearing financial liabilities 21. 15,901 10,366 Trade payables 23. 30,445 82,920 Liabilities on orders in progress 66,286 98,524 Other short-term liabilities and deferred items 24. 87,043 170,420 Current liabilities 207,050 370,242 FINANCIAL STATEMENTS Total liabilities 306,472 1,069,195 Total equity and liabilities 563,222 1,495,752 GfK_99

Consolidated cash flow statement in accordance with ifrs in eur 000 for the period January 1 to December 31, 2005 Note 2004 2005 Consolidated total income 53,135 67,517 Write-downs/write-ups of intangible assets 11. 11,212 26,604 Write-downs/write-ups of tangible assets 12. 14,636 17,993 Write-downs/write-ups of other investments 2,358 431 Total write-downs/write-ups 23,490 45,028 Increase/decrease in inventories, trade receivables and other assets, not attributable to investment or financing activity 9,995 36,669 Increase/decrease in trade payables, other liabilities and deferred items, not attributable to investing or financing activity 16,655 55,062 Total changes in working capital 6,660 18,393 Profit/loss from the disposal of non-current assets 39 24,540 Non-cash income from associates 585 1,301 Increase/decrease in long-term provisions 2,545 5,304 Other non-cash income/expenses 1,335 7,897 Net interest income 7., 8. 2,684 16,257 Change in deferred taxes 2,274 3,420 Current income tax expense 9. 26,055 28,142 Taxes paid 22,857 32,950 a) Cash flow from operating activity 25. 92,105 128,929 Cash outflows for investments in intangible assets 9,341 14,013 Cash outflows for investments in tangible assets 13,028 21,385 Cash outflows for acquisition of consolidated companies and other business units, net of cash acquired 59,136 643,489 Cash outflows for other investments 3,121 3,055 Cash inflows from disposal of intangible assets 26 54 Cash inflows from disposal of tangible assets 681 1,177 Cash inflows from disposal of consolidated companies and other business units, net of cash disposed of 0 1,497 Cash inflows from disposal of other investments 1,339 25,708 Interest received 1,612 1,752 b) Cash flow from investing activity 25. 80,968 651,754 Cash inflows from equity contributions 2,623 94,988 Cash outflows to shareholders of parent 6,531 9,442 Cash inflows from/outflows to minority interests 6,625 7,708 Cash inflows from loans raised 30,231 557,928 Cash outflows for repayment of loans 28,737 64,562 Interest paid 4,960 20,950 FINANCIAL STATEMENTS c) Cash flow from financing activity 25. 13,999 550,254 Changes in liquid funds 2,862 27,429 (total of a), b) and c)) Changes in liquid funds owing to exchange gains/losses, scope of consolidation and valuation 1,682 3,473 Liquid funds at the beginning of the period 17. 53,241 48,697 Liquid funds at the end of the period 17. 48,697 79,599 100_GfK GfK_100

Consolidated statement of recognized income and expense in accordance with ifrs in eur 000 for the period January 1 to December 31, 2005 Note 2004 2005 Currency translation differences 8,444 24,182 Change in fair value of equity securities available-for-sale 14 10 Change in fair value of cash flow hedges (effective portion) 28. 116 3,732 Valuation of hedges of net investments in foreign subsidiaries 28. 3,745 Actuarial gains/losses on defined benefit plans 20. 672 3,401 Income and expense recognized directly in equity 7,874 20,758 Consolidated total income 53,135 67,517 Total recognized income and expense 45,261 88,275 Attributable to: Equity holders of the parent 34,860 79,135 Minority interests 10,401 9,140 Total recognized income and expense 45,261 88,275 FINANCIAL STATEMENTS GfK_101

Notes to the consolidated financial statements for 2005 General information GfK Aktiengesellschaft (GfK ag) is a listed joint stock company under German law with its registered office on Nordwestring 101, Nuremberg, Germany. GfK ag and its subsidiaries (GfK Group) are among the world s leading market research companies. The GfK Group provides information services for its clients in the consumer goods, pharmaceuticals, retail and services industries and media information services, which they use in marketing decision-making. The consolidated financial statements of GfK ag include the company itself and all consolidated subsidiaries. For the first time as of December 31, 2005, they have been prepared in compliance with the International Financial Reporting Standards (ifrs) as they must be applied within the eu. ifrs 1, First-time adoption of International Reporting Standards, has been applied. All International Financial Reporting Standards (ifrs) binding for 2005 and the announcements of the International Financial Reporting Interpretations Committee (ifric) have been applied where they have been adopted by the European Union. Additionally, the accounting principles set out in 315a sub-section 1 of the German Commercial Code (hgb) have been considered when preparing the consolidated financial statements. All periods reported in the present financial statements are represented in accordance with the ifrs valid as of December 31, 2005. Section 33 of these notes explains how the conversion to ifrs has affected the net assets, financial position and results of operations as well as the inflow and outflow of funds of the GfK Group. In December 2004, the iasb published an amendment to the International Accounting Standard (ias) 19, Employee Benefits. The amendment Actuarial Gains and Losses, Group Plans and Disclosures included the introduction of an option dealing with actuarial gains and losses. According to the amendment, actuarial gains or losses existing as of the reporting date, which have occurred during the accounting period, may be recorded as equity without impacting on the income state ment. The option in the amendment to ias 19 may be applied to financial years ending on or after December 16, 2004. The European Union adopted the amendment to ias 19 in November 2005. The GfK Group has made use of the option to record actuarial gains and losses in the financial statements for 2004 and 2005 without impacting on income to convey vital information to recipients of the financial statements on the current level of pension obligations. The amount of actuarial gains and losses recorded without affecting the result is shown in the statement of recognized income and expense. The consolidated financial statements have been prepared in euros and rounded up to the nearest thousand euros. All figures are specified in thousand euros, unless otherwise indicated. The annual financial statements of the parent company, GfK ag, have been prepared in accordance with hgb and are filed with the Commercial Register at the district court of Nuremberg under hr b 9398. Standards, interpretations and amendments which have been published but not yet applied In August 2005, the iasb published the amendment to ias 1 ( Presentation of Financial Statements ), Capital Disclosures. The amendments to ias 1 require additional information on company equity and become compulsory for financial years starting on or after January 1, 2007. The iasb encourages earlier adoption. The amendment to ias 1 was recognized by the European Union in January 2006. As the amendment to ias 1 deals with compulsory information to be disclosed on targets, guidelines and procedures for equity management, it is not expected to have any fundamental impact on the financial statements of the GfK Group. The amendment to ias 21 ( The Effects of Changes in Foreign Exchange Rates ), Net Investment in a Foreign Operation, was published by the iasb in December 2005 and has not yet been recognized by the European Union. The iasb provides for compulsory application for reporting periods starting on or after January 1, 2006. The amendment to ias 21 sets out in concrete form the requirements of ias 21 relating to investments in a foreign business operation and should simplify conversion differences in monetary items. Application of the amendment to ias 21 is not expected to have any fundamental effects on the net assets, financial position and results of operations of the GfK Group. The amendment to ias 39 ( Financial Instruments: Recognition and Measurement ), Cash Flow Hedge Accounting of Forecast Intragroup Transactions, published by the iasb in April 2005, was recognized by the European Union in December 2005 and is compulsory for financial years starting on or after January 1, 2006. The iasb encourages earlier adoption. According to the amendment to ias 39 foreign exchange risks from an expected, highly probable, intra-group transaction may be entered in the consolidated financial statements as a hedged item. The prerequisite for this is that the transaction would need to be entered concluded in a currency other than the functional currency of the company which concludes the transaction, and the associated exchange risk would need to be entered in the consolidated financial statements according to ifrs. Application of this amendment to ias 39 will be unlikely to have any effect on the net assets, financial position and results of operations of the GfK Group. The amendment to ias 39 ( Financial Instruments: Recognition and Measurement ), The Fair Value Option, was published by the iasb in June 2005 and recognized by the European Union in November 2005. The amendment is compulsory for financial years starting on or after January 1, 2006. The iasb encourages earlier adoption. The amendment to ias 39 restricts the option on the valuation of financial assets and financial liabilities at fair value, known as the Fair Value Option, to financial instruments which meet certain criteria. The GfK Group has decided not to use the Fair Value Option so the amendment to ias 39 does not apply. FINANCIAL STATEMENTS 102_GfK GfK_102

The amendment to ias 39 ( Financial Instruments: Recognition and Measurement ) and ifrs 4 ( Insurance Contracts ), Financial Guarantee Contracts, was published by the iasb in August 2005. It is compulsory for financial years starting on or after January 1, 2006 but earlier adoption is encouraged by the iasb. The amendment provides for financial guarantees to principally come under the scope of ias 39 and to be stated at the fair value when first entered. Where the guarantor has already stated prior to the amendment to ias 39 that he regards a relevant contract as an insurance contract pursuant to ifrs 4, it is either possible to continue entering the financial guarantee on the balance sheet in accordance with ifrs 4 or apply ias 39. The amendment to ias 39 and ifrs 4 was recognized by the European Union in January 2006. The amendment is unlikely to have any impact on the financial statements of the GfK Group. The ifrs 7 ( Financial Instruments: Disclosures ) published by the iasb in August 2005 replaces ias 30 ( Disclosures in the Financial Statements of Banks and Similar Financial Institutions ) and parts of ias 32 ( Financial Instruments: Disclosures and Presentation ). Therefore, many of the disclosures previously covered by ias 32 have been adopted into ifrs 7. ifrs 7 requires information on the importance of financial instruments to the net assets, financial position and results of operations of the company and also includes new requirements on qualitative and quantitative reporting of risks associated with financial instruments. ifrs 7 must principally be applied by companies in all sectors so the scope of the required reporting focuses on the degree to which financial instruments are used and their risk contribution. The standard was recognized by the European Union in January 2006 and becomes compulsory for financial years starting on or after January 1, 2007 but earlier adoption is encouraged by the iasb. Since the GfK Group already publishes comprehensive details on financial instruments as part of risk reporting, it is not expected to have any fundamental effect on reporting. The ifric 4 ( Determining whether an Arrangement contains a Lease ) published in December 2004 was recognized by the European Union in November 2005 and is compulsory for financial years starting on or after January 1,2006. Earlier adoption is encouraged by the iasb. ifric 4 takes account of the fact that in practice contracts are frequently concluded which are not legally drawn up in the form of a lease contract but do represent a concessionary use against payment on account based on their economic sense. There are currently no circumstances within the GfK Group to which ifric 4 would apply. ifric 7 ( Applying the Restatement Approach under ias 29 Financial Reporting in Hyperinflationary Economics ) was published in November 2005 and deals with two concrete application issues relating to ias 29. The interpretation makes it clear how comparative figures in financial statements prepared according to ifrs are to be adjusted when the functional currency of the company preparing the financial statements or the country in which this currency is listed meet the criteria for hyperinflation. ifric 7 also rules on how deferred tax items are to be adjusted in the opening balance sheet. ifric 7 is compulsory for financial years starting on or after March 1, 2006. Recognition of the interpretation by the European Union is currently still awaited. There are unlikely to be any fundamental consequences for the financial statement of the GfK Group arising from ifric 7. ifric 8 ( Scope of ifrs 2 ), published in January 2006, in elaboration of ifrs 2 ( Share-based Payment ) establishes that ifrs 2 also applies to agreements in which the company offers equity-based remuneration for no or inadequate service in return. ifric 8 is compulsory for financial years starting on or after May 1, 2006. Recognition of the interpretation by the European Union is currently still awaited. There are unlikely to be any consequences for the financial statements of the GfK Group arising from ifric 8 as no relevant agreements exist at present. ifric 9 ( Reassessment of Embedded Derivatives ) was published by the ifric in March 2006 but has yet to be recognized by the European Union. The interpretation sets out in concrete terms certain aspects of how embedded derivatives are dealt with on the balance sheet according to ias 39 and is compulsory for financial years starting on or after June 01, 2006. There are unlikely to be any consequences for the financial statements of the GfK Group arising from ifric 9. In addition to the outlined published but not yet applied standards, interpretations and amendments, the following, as yet noncom pulsory, statements have been issued by the iasb or ifric: ifrs 6 ( Exploration for and Evaluation of Mineral Resources ) Amendments to ifrs 1 ( First-time Adoption of International Financial Reporting Standards ) and ifrs 6 ( Exploration for and Evaluation of Mineral Resources ) ifric 5 ( Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds ) These accounting principles are not relevant to the financial statements of the GfK Group and are therefore not explained in detail here. Consolidation principles The annual financial statements of GfK ag and all material sub - sidiaries whose financial and operating policies are controlled directly or indirectly are included in the consolidated financial statements of GfK ag. The financial statements of all companies included in the consolidated financial statements have been prepared according to uniform accounting principles. Companies in which the GfK Group has a participation of not more than 50%, but over which significant influence can be exercised, are generally accounted for at equity as associates. All other companies in the GfK Group are reported at acquisition cost. A list of shareholdings of GfK ag is attached in these notes. Capital consolidation is carried out in accordance with the International Financial Reporting Standard (ifrs) 3, Business Combinations, on the basis of the purchase method, whereby the acquisition costs of the participation are charged against the parent company s pro rata share in the revalued equity of the subsidiary at the acquisition date. Intangible assets acquired in business combinations are entered on the balance sheet at fair value. Any difference arising on the assets side after this crediting and purchase price allocation is reported under non-current assets as goodwill. FINANCIAL STATEMENTS GfK_103

Accounting policies All transactions and balances between the companies of the GfK Group which are included in the consolidated financial statements are eliminated when preparing the consolidated financial statements. Differences arising from debt consolidation are recorded in the income statement. Intercompany results and asset movements are eliminated with impact on the income statement if they are significant. Associates that are included at equity (one-line consolidation) are included for the first time at the acquisition date. Any difference on the assets side arising from offsetting the carrying amount of the participation against the pro rata equity capital at initial valuation is included in the equity book value. The consolidation on transition from equity valuation to full consolidation takes place with no impact on the income statement but is carried out separately for every part-acquisition. The acquisition costs included in capital consolidation comprise the equity net book value and the acquisition costs for the majority acquisition. Profits or losses from mergers arising from the merger of two consolidated companies in the GfK Group are eliminated. Mergers therefore have no impact on the income statement of the GfK Group. Company mergers involving external minority shareholders do not cause any change in the total minority interests or the consolidated total income. If further shares are acquired in already fully consolidated companies, the purchase price of the additional acquisition is credited with the proportionate additionally acquired equity without impact on the income statement. Any difference on the assets side arising from the entry is shown as goodwill. Shares in the equity of subsidiaries attributable to minority interests are shown separately under equity. Shares in the sub sidiaries results attributable to minority interests are shown as a separate item in the income statement. Accounting policies Currency translation Transactions in foreign currencies are translated into the functional currency of the reporting company at the exchange rate on the date on which they were carried out. As of the balance sheet date, monetary items are translated at the exchange rate on that date and non-monetary items are valued at the historical rate on the transaction date. Differences resulting from these conversions are, in principle, reported with an impact on the income statement. The balance sheets of foreign subsidiaries not prepared in euros are translated into euros in accordance with the functional currency concept, based on the average exchange rates on the reporting date. The annual average euro exchange rate, calculated as the mean of all month-end exchange rates, is applied to the income statements of these subsidiaries. Exceptions to this are the income statements of the nop World companies, which are translated into euros at a rate calculated as the average of month-end exchange rates from June to December, as nop World was first consolidated as of June 1, 2005. Differences arising from the translation of asset and liability items at the exchange rate on the reporting date compared with the translation on the previous reporting date, and differences arising from translation of the annual result in the balance sheet (reporting date rate) and the consolidated income statement (average rate) are reported in equity without impact on the income statement. Exchange rate differences arising from capital consolidation are reported in income and expense recognized directly in equity. The exchange rates against the euro of the key currencies for the GfK Group are as follows: Recognition of sales Euro mean rate on balance sheet date Euro average rate during reporting period Main currencies Unit of Country currency 31.12.2004 31.12.2005 2004 2005 usa usd 1 0.74 0.85 0.80 0.81 uk gbp 1 1.41 1.46 1.47 1.46 Switzerland chf 100 64.70 64.29 64.75 64.61 Japan jpy 100 0.71 0.72 0.75 0.73 The method of recognizing sales is determined according to ias 18 and depends on the nature of the underlying transaction: For business involving panels, the GfK Group recognizes its sales pro rata temporis according to the progress of the project. Thus, the sales for a project are distributed evenly over its duration. Each month during the term of a contract, the same sales are recognized in terms of amount. ad hoc research business is valued by the percentage of completion method. Progress on the project is determined as the ratio of the actual costs incurred to the overall anticipated costs of the project. The estimate of total cost is continuously checked during the life of the project. Changes in the estimate of total cost flow into the calculation of recognizable sales at the time at which they can be anticipated. The costs to be included in this calculation comprise all direct personnel expenses and other cost of sales as well as pro rata indirect costs. Provisions are set up for anticipated losses on orders in progress when they can be anticipated. In syndicated business the method of recognizing sales depends on the empirical estimate of the profitability of the respective survey: If a profit from the survey is probable, it is evaluated as an ad hoc research order. If it is not yet sufficiently certain that enough purchasers will be found for a survey, the sale is recognized corresponding to the accumulated costs. As soon as it is certain that the value in orders exceeds the costs, there is a switch to the above method of recognizing sales. If there is no empirical data for the relevant survey or a comparable survey and there are also no orders from clients to ensure that costs are covered, no sale is recognized. The costs are taken to the income statement. As soon as clients have subscribed to the survey, there is a switch to the above method of recognizing sales. FINANCIAL STATEMENTS 104_GfK GfK_104

In all other business transactions sales are only recognized once the work has been completed and invoiced. Cost of sales, selling and general administrative expenses In addition to personnel expenses, services rendered and scheduled depreciation/amortization of tangible and intangible assets, the cost of sales, selling and general administrative expenses comprise all other costs directly linked to the operational activity of the GfK Group. They also include personnel expenses from the stock option program and scheduled amortization on additional assets identified on acquisitions from purchase price allocation. Impairments of non-current assets are included under other operating expenses. Research and development Research and development costs are recorded as expenses at the time they are incurred and shown under cost of sales due to their secondary importance. Development costs incurred within the GfK Group, particularly in setting up new panels, are shown under other intangible assets if the recognition criteria are met. Internally generated intangible assets are only capitalized if they have resulted from the development phase and not the research phase and if further precisely defined preconditions have been cumulatively fulfilled. These include the technical viability of project completion, the scheduled completion and use and the usefulness to the company or saleability of the intangible asset. Future economic benefits and the availability of the necessary technical, financial and other resources to complete the project should also be reported. Reliable calculation of the costs associated with the intangible asset during its development phase is also a precondition for capitalization of internally generated intangible assets. Operating income Operating income in the GfK Group comprises the gross income from sales, less cost of sales, selling and general administrative expenses, and net other income comprising other operating income and other operating expenses. To determine adjusted operating income, items which are not included in the income-based management variable of the GfK Group, are excluded from operating income. Other financial income and expenses Other financial income and expenses include interest income and expenses and remaining financial income. Interest expense is not capitalized in the GfK Group. Interest is recorded as income or expense at the time it is incurred. Tax on income from ongoing business activity Tax on income from ongoing business activity comprises current and deferred taxes. Current taxes are calculated by the companies within the GfK Group according to current tax law in their country of registration. Deferred taxes are calculated according to the liability method whereby deferred tax assets and liabilities are entered on the balance sheet for temporary differences between the carrying amounts attributed in the consolidated financial statements and the tax basis of the assets and liabilities. Any effects on deferred taxes from changes in tax law are incorporated in the income statement from the date on which the tax law is passed. Deferred tax assets are only entered on the balance sheet if it is probable that they can be recognized at a future date. This is generally the case where the relevant company is sufficiently likely to achieve enough taxable profit to use the tax benefit. If deferred tax assets already recorded are not expected to be recognized within the foreseeable future, carrying values are adjusted. Tax on items recognized directly in equity are not included in the income statement. Earnings per share The earnings per share (eps) reported in the consolidated income statement show the proportion of consolidated total income attributable to equity holders of the parent which relates to the weighted average number of shares in the reporting period. To calculate the diluted earnings per share, the average number of shares is adjusted by the options as yet not exercised and which are in the money as of the reporting date. Stock options for employees and executives of the GfK Group Selected executives of the GfK Group are entitled to convert part of their variable remuneration into share options in GfK ag (stock options). The option term is five years; options cannot be exercised until two years after issue. The GfK Group applies ifrs 2 for stock options issued after November 7, 2002 which had not yet lapsed as of January 1, 2005. This remuneration which is to be settled with equity instruments, is valued at the fair value at the grant date. The obligation is entered as expense in the income statement whilst the counter entry is made under capital reserve. FINANCIAL STATEMENTS GfK_105

Accounting policies Intangible assets Goodwill Goodwill arising from the capital consolidation of subsidiaries and that transferred from subsidiaries financial statements into the consolidated financial statements is reported by the GfK Group under intangible assets. For goodwill arising before January 1, 2004, the GfK Group has made use of the option in ifrs 1 whereby, under the transition to ifrs, goodwill which was accounted for according to the accounting principles previously applied, can be adopted. Before converting to ifrs, the GfK Group prepared its financial statements according to the United States Generally Accepted Accounting Principles (us gaap). In business combinations, goodwill represents the remaining difference in assets after the costs of acquisition of the participation are offset against the proportion of acquired revalued equity. Goodwill from the acquisition of companies which do not report in euros is recorded in the reporting currency of the acquired subsidiary. The exchange rate at the time of first consolidation is used to calculate the goodwill at initial recognition. Subsequent measurements are based on the mean rate as of the reporting date. The GfK Group checks the recoverability of its cash generating units, including goodwill, as part of an impairment test once a year or when triggering events or changed circumstances arise. For this purpose, goodwill is allocated to six cash generating units corresponding to the business areas, matching the internal Group control. The cash generating units are Custom Research, Retail and Technology, Consumer Tracking, Media, HealthCare and Other. Recoverability of goodwill is indicated when the recoverable amount is not less than the carrying amount of the cash generating unit. The recoverable amount corresponds to the attributable fair value less costs to sell or the value in use if higher. These are calculated by using the discounted cash flow procedure based on anticipated future cash flow from the relevant current five-year plan. The growth in cash flow after the five-year period is taken into account by reducing the discount rate by one percentage point. The discount rate is determined by carrying out a weighted average capital costs calculation, taking into account the standard industry capital structure and standard industry financing costs. The resulting discount rate is 6.65% on average. The discount rate takes into account the respective equity and country risks as well as tax advantages from the external financing of the cash generating unit concerned. Other intangible assets Other intangible assets are entered in the balance sheet at amortized cost and are subject to scheduled, straight line amortization. The useful life of software and other intangible assets is generally three to ten years. Interest on borrowing is not capitalized. Intangible assets with an indefinite useful life are subject to an impairment test at least once a year. Software As a rule, software developed by companies in the GfK Group is used internally for analyzing and processing marketing research data. In some cases, it is destined for external users and was written specifically to meet user requirements. Internal costs of software development are capitalized under non-current assets if the criteria according to ias 38 are met. Amortization commences on completion of the software. In addition to internally generated software, the item software also includes software acquired for internal use. Miscellaneous intangible assets Miscellaneous intangible assets mainly include licenses and panel set-up costs. Panel set-up costs involve capitalized development costs for setting up new panels or extending an existing panel. Capitalized panel set-up costs include: Spending on materials and services used in constructing panels Wages and salaries and other employment expenses for staff directly involved in setting up panels. Overheads necessarily incurred in panel set-up and which can reasonably and regularly be allocated to this based on cost accounting. Costs from the preparation and application phases and mainten ance costs for current panels cannot be capitalized. They are included in expenses. The amortization period is measured by the contract term or the useful life, whichever is shorter. Panel set-up costs are only subject to scheduled amortization if they are directly incurred in conjunction with a specific, fixed-term current client order. Other panel set-up costs are not subject to any scheduled amortization; their useful life is indefinite. These intangible assets are subjected to an impairment test at least once a year. Impairments on intangible assets are recorded if the recoverable amount falls below the amortized costs. The recoverable amount is defined as the higher of the two sums of the attributable fair value less costs to sell or value in use of an asset. FINANCIAL STATEMENTS 106_GfK GfK_106

Tangible assets Tangible assets are valued at cost less cumulative depreciation. Interest on borrowing is not capitalized. Cumulative depreciation includes scheduled straight line depreciation up to the balance sheet date and any impairments recorded. The depreciation period corresponds to the useful life. Assets in the course of set-up are not subject to scheduled depreciation. The GfK Group normally applies the useful life periods shown in the following table: Useful life Asset in years Administrative buildings 50 it equipment 3 to 5 Cars and other vehicles 5 Office equipment 3 to 5 Office furniture 10 to 13 Lease arrangements are entered on the balance sheet according to ias 17 with either a finance or an operating lease depending on the type of contract. Finance leases are characterized by the fact that risks and rewards of leased assets are generally transferred to the lessee. With a finance lease the leased item is capitalized by the lessee and a corresponding leasing liability is recorded. The leasing liability is equivalent to either the present value of the minimum lease payments or the fair value of the leased asset at the start of the lease arrangement if lower. The leasing asset is subject to scheduled straight line depreciation. The depreciation period is the lease term or the economic useful life whichever is shorter. Subject to the fulfillment of the preconditions, an impairment is recorded. The lease liability is amortized over the contractual period through lease payments. Discounts are written up by applying a constant interest rate to the remaining debt and recorded in interest expenses within other financial expenses. With an operating lease, the leased asset is entered on the balance sheet of the lessor. The lessee records the regular payments as rental expenses. Financial instruments Pursuant to ias 32 and ias 39, financial instruments are contracts which result in a financial asset with one company and a financial liability or an equity instrument with another. In the GfK Group, financial instruments are entered on the balance sheet as bought or sold on the trade date, i.e. on the date on which the obligation to buy or sell a financial instrument was entered into. Borrowing costs are recorded as expenses within the period in which they were incurred. Primary financial instruments, particularly securities Loans issued, receivables and liabilities are valued at amortized costs where these are not linked to hedge transactions. Shares in companies which do not qualify as subsidiaries or associated companies are also shown as primary financial instruments at cost. Available-for-sale securities Available-for-sale securities are securities which are not treated as part of the trading securities. The GfK Group only shows trading securities under short-term securities; all other securities are reported under other financial assets as available-for-sale securities. GfK has resolved not to report any securites as held to maturity. Available-for-sale securities are initially stated at acquisition cost plus transaction costs if any. Subsequent measurement is based on the fair value as at the reporting date, whereby each security is considered separately. The change in value based on the subsequent measurement at fair value is not entered on the income statement but offset directly against income and expense recognized directly in equity. This applies to changes in value due to fluctuations in fair price to which securities are generally subject. However, if there are any objective signs of impairment, impairment must be recorded. An objective sign of impairment may be, for example, the inability of the securitor to pay. In this case, unrecognized losses previously shown under equity are transferred from equity into total income for the period. The impairment is included in the item, other financial expenses in the income statement. Short-term securities and fixed-term deposits Securities held as current assets represent the trading securities destined for short-term sale. They are valued at fair value on the balance sheet date. Unrealized profits and losses are taken to income and reported under other financial income or expenses on the income statement. Fixed-term deposits have a remaining term of more than three months but less than a year. Fixed-term deposits with a remaining term of less than three months are shown under liquid funds; fixedterm deposits with a remaining term of over a year are shown under other financial assets. They are entered at fair value. Derivative financial instruments, hedge accounting The GfK Group concludes transactions throughout the world in various international currencies, which may involve currency risks. In addition, short-term investments, investment in securities and borrowing from banks take place in various currencies and can result in risks due to changes in exchange rates, rates of interest and market prices. FINANCIAL STATEMENTS GfK_107

Accounting Policies More detailed information on currency and interest rate risks is provided in the risk report, which is part of the management report. The GfK Group uses currency forward transactions, combined interest rate and currency swaps as well as interest rate swaps to hedge against currency and interest rate risks. No derivative financial instruments are held for trading purposes. Derivative financial instruments are reported at cost as asset or liability at the time of the transaction and subsequently valued at fair value. Changes in the fair value of derivative financial instruments used in hedge accounting are recorded differently, depending on whether the instrument is a fair value hedge, cash flow hedge or net investment hedge. If the derivate financial instrument is used to hedge against the risk of changes in the value of assets or liabilities, it represents a fair value hedge. In this case, changes in the fair value of both the hedged item and the derivative financial instrument are taken to the income statement. With changes in the fair value of cash flow hedges used to hedge transactions against risks from fluctuations in future payment flows, the unrecognized profits and losses are initially entered in the income and expense recognized directly in equity. However, this is only permissible if the derivative is intended and suitable for hedging cash flow. Once the hedged transaction affects the income statement, the profits and losses accumulated in the income and expense recognized directly in equity must be released with impact on the income statement. Net investment hedges can be used to secure net investment in foreign subsidiaries. This may, for example, involve a foreign currency loan in the local currency of the acquired participation. Any exchange gains or losses resulting from the cut-off date valuation of the foreign currency loan are recorded in income and expense recognized directly in equity as is the case for cash flow hedges. The prerequisite for using any hedge accounting is that the link between the hedged item and the hedging instrument must be accurately documented. It must also be recorded how the hedging instrument used compensates the risk relating to the hedged item highly effectively and which methods are used to substantiate the effectiveness. If the hedge is considered highly effective, the unrecognized exchange gains and losses from the hedging instrument are posted in the income and expense recognized directly in equity. The release with impact on the income statement of this item does not occur at the end of term of the hedging instrument but only upon sale or liquidation of the hedged item. Generally, the part of the changes in fair value not covered by the hedged item is taken to the income statement. If the prerequisites for reporting an item as a hedging instrument (hedge accounting) are not met as per the regulations in ias 39, the changes in fair value of the derivatives are immediately charged to the income statement. Fair values of forward currency transactions, combined interest rate and currency swaps and interest rate swaps are determined on the basis of market conditions as of the reporting date. Inventories Inventories are valued at the lower of cost and net realizeable value. Trade receivables Trade receivables include both invoiced and non-invoiced receivables. They are stated at nominal value or, in the case of specific risks, at the lower attributable value taking into account a valuation allowance. Non-invoiced receivables can arise in the context of the valuation of sales. Impairment If an asset is impaired and is therefore depreciated, the cost of impairment is included in the income statement. Liquid funds The liquid funds contain cash on hand and in banks as well as liquid investments with a remaining term of less than three months. Income and expense recognized directly in equity Income and expense recognized directly in equity include changes in Group equity which have no impact on the income statement and which do not involve deposits by shareholders or distributions to shareholders. These changes result from exchange rate differences from capital consolidation and valuation at equity, unrecognized profits and losses from available-for-sale securities, actuarial gains and losses from provisions for pensions and unrecognized income and expenses from derivative financial instruments. Provisions In principle, provisions are set up when an obligation to a third party, will probably result in an outflow of funds. In addition, the level of the obligation needs to be estimated reliably. Long-term provisions are discounted if they are interest-free or low-interest and the discount sum is material. Provisions for pensions are valued in accordance with the projected unit credit method, in which future compensation increases are taken into account. The amount shown on the balance sheet represents the present value of the obligation adjusted by the unrecognized past-service costs after offsetting the fair value of the plan assets. The discount rate is based on the interest rate for prior-ranking fixed-income corporate bonds. Payments for defined contribution plans are stated as expenses when they occur. FINANCIAL STATEMENTS 108_GfK GfK_108

Actuarial gains and losses on defined benefit plans are recorded directly in income and expense recognized directly in equity in exercise of the option in ias 19. Financial liabilities Financial liabilities include interest-bearing liabilities relating to financing, particularly loans from banks and other lenders, liabilities under financial leases and other interest-bearing liabilities. They are stated at the present value if they are interest-free or low-interest. Further valuation is carried out at amortized cost using the effective interest rate method. As regards reporting on the business combination due to the acquisition of nop World as of June 1, 2005, it may be necessary to carry out a significant adjustment to assets and liabilities within a year of the date of first consolidation, i.e. by May 31, 2006, based on updated estimates. Any such adjustment will have no effect on the income statement. It would affect other liabilities which include balances owed to the previous owners of nop World, and compensation claims and liabilities against the previous owners linked to current taxes relating to the period prior to the date on which the GfK Group acquired nop World. The maximum necessary adjustment is 4.8% of the purchase price of nop World. Trade payables, other liabilities Trade payables and other liabilities are stated at repayment value. Interest-free or low-interest non-current liabilities are discounted and stated at present value, where the discount amount is significant. Liabilities on orders in progress Liabilities on orders in progress comprise payments on account and accrued amounts from the recognition of sales. Within this item, sales are accrued which have arisen from contractually agreed invoices for prepayments or payments on account, but cannot yet be recognized as sales according to the above described sales recognition methods. Consolidated cash flow statement Scope of consolidation and major acquisitions Fully consolidated companies As at December 31, 2005, the scope of consolidation in accordance with ifrs includes 16 (2004: 13) German and 127 (2004: 87) foreign subsidiaries in addition to the parent company. The table below shows the changes in fully consolidated subsidiaries between January 1, 2005 and December 31, 2005: Fully consolidated subsidiaries (No.) 01.01.2005 Additions Disposals 31.12.2005 Germany 13 3 0 16 Abroad 87 45 5 127 Total 100 48 5 143 The cash flow statement shows the changes to the balance sheet item Liquid funds resulting from cash flows from operating activity, investing activity and financing activity. The cash flow from operating activity is derived indirectly from changes to balance sheet entries. These are adjusted for the effects of currency translation and changes in the scope of consolidation. As a consequence, only a limited reconciliation is possible between the changes in the balance sheet items according to the consolidated cash flow statement and the arithmetical changes in the consolidated financial statements, the schedule of movements in non-current assets and other information in the notes to the financial statements. Estimates To a certain extent, estimates and assumptions cannot be avoided in the consolidated financial statements. They may affect assets and liabilities as well as contingencies on the balance sheet date and the income and expenses for the financial year. These estimates were made by the management, taking into account all known facts to the best of their knowledge. Nevertheless, the actual amounts may deviate from such estimates. As of January 1, 2005, Beyen Marktforschung GmbH, Düsseldorf, Beyen Corporation of America, Inc., Niagara Falls, usa and Beyen Corp of Canada Inc., Niagara Falls, Canada, were fully acquired. These companies operate in the Retail and Technology division. gfk gral-iteo tržne raziskave d.o.o., Ljubljana, Slovenia, GfK Belgrade d.o.o., Belgrade, Yugoslavia and GfK bh d.o.o., Sarajevo, Bosnia-Herzegovina, were included in the consolidated financial statements for the first time as of January 1, 2005. These companies were not previously consolidated and operate in the Custom Research division. GfK Media Research Services GmbH (formerly mmo Media-Market- Observer GmbH), Vienna, Austria, was also consolidated for the first time on January 1, 2005 and included in the con solidated financial statements. This company belongs to Media. The participation in Caribou Lake Software, llc, Minneapolis, usa, was increased in January 2005 from 19.9% to 69.8%. It has been included in the consolidated financial statements as an affiliated company since January 1, 2005. The company, which operates in the Custom Research division, was previously reported as an associated company. FINANCIAL STATEMENTS The key estimates on future development of the GfK Group and its economic environment are shown in the Outlook section of the management report. GfK Equity Research Inc., Boston, usa, which operates in the Retail and Technology division was established on February 28, 2005. A 51% participation in GfK Research Dynamics, Inc., Mississauga, Ontario, Canada, which operates in the Custom Research division, was acquired in April 2005. GfK_109

Scope of consolidation and major acquisitions In addition, in April 2005 GfK North America Investment GmbH, Nuremberg was founded. GfK North America Holding GmbH, Nuremberg, (formerly GfK Erste Vermögensverwaltungs GmbH) was included in the consolidated financial statements for the first time on June 1, 2005. Both companies operate as holding companies for North American business. On May 1, 2005, a 51% participation was acquired in Adimark s.a., Providencia, Santiago, Chile, and its Chilean subsidiaries, Adimark Investigaciones de Mercado Ltda., Providencia, Santiago, and Collect Investigaciones de Mercado s.a., Providencia, Santiago. The Adimark Group belongs to the Custom Research division. The acquisition of the nop World on June 1, 2005 is dealt with in a separate section below. The total purchase price for the acquisitions mentioned here was eur 8,221 thousand over the reporting period; this figure includes incidental acqusition costs. The purchase price was covered by liquid funds. This produced goodwill of eur 4,708 thousand relating to the Custom Research and Retail and Technology divisions. Goodwill represents mainly the expertise of the employees of these companies, which cannot be capitalized separately as such. Previously unreported intangible assets totaling eur 8,080 thousand were disclosed as part of the acquisition procedures outlined. The assets and liabilities which were adopted during the acquisition of these consolidated companies are shown in the following table. Prior to the merger As of the acquisition date Non-current assets 1,184 9,264 Current assets 2,675 2,675 Liquid funds 788 788 Liabilities and provisions 5,627 5,627 Acquisition of nop World With effect from June 1, 2005, GfK acquired nop World with a 100% participation. The group comprises 47 companies with the main registered offices in the uk, usa and Italy. Of these, 30 companies are fully consolidated. The following companies are grouped under Custom Research: afi Holdings llc, Wilmington, Delaware, usa afi Investments Limited, London, uk asw Delaware llc, Wilmington, Delaware, usa asw Investments, Inc., Wilmington, Delaware, usa Barterstore Limited, London, uk Dealtalk Limited, London, uk E. Friedman Marketing Services, Inc., Harrison, New York, usa GfK Automotive, llc, Southfield, Michigan, usa GfK nop, llc, New York, New York, usa GfK nop Field Interviewing Services Limited, London, uk GfK nop Mystery Shopping Services Limited, London, uk GfK nop Services Limited, London, uk GfK nop Telephone Interviewing Services Limited, London, uk Interactive Research Limited, London, uk mil Research Group Limited, London, uk National Opinion Polls Limited, London, uk nop Automotive, Inc., Farmington Hills, Michigan, usa nop World Limited, London, uk Numbers Data Processing Limited, London, uk Numbers (Holdings) Limited, London, uk The cumulative income from these companies for the period during which they belonged to the GfK Group totals eur 718 thousand. GfK do brasil ltda., São Paulo, Brazil, was merged with indicorp participações s.a., São Paulo, Brazil with effect from January 1, 2005. Also with effect from January 1, 2005, var finance et reinvestissement v.f.r. sas, La Valette-du-var, France, was merged with Institut Français de Recherche-i.f.r. s.a., Viroflay, France. In December 2005, indicator gfk consultoria e processamento de informações ltda., Santana do Pamaíba, Brazil, was merged with indicator gfk s.a. São Paulo, Brazil. Aspemar-GfK Société Anonyme, Brussels, Belgium was deconsolidated because it was liquidated on December 23, 2005. Inform Business Development Pty. Ltd., Sydney, Australia, was deconsolidated on December 31, 2005 as it no longer conducts any operating business. Numbers Market Research Limited, London, uk Roperasw Europe Limited, Leatherhead/Surrey, uk Roper Starch Worldwide, llc, Harrison, New York, usa GfK us Holdings, Inc., Wilmington, Delaware, usa, acts as a holding for the American nop companies. GfK us Healthcare Companies lp, East Hanover, New Jersey, usa, and Strategic Marketing Asia, Ltd., Bala Cynwyd, Pennsylvania, usa, belong to the HealthCare division. Mediamark Research Inc., New York, New York, usa, operates in the Media division. GfK Eurisko S.r.l. and Risposta Srl, both of Milan, Italy, and GfK nop Limited, London, uk, operate in Custom Research, Media and HealthCare. As part of the acquisition of nop World, GfK Malta Holding Limited and GfK Malta Services Limited, both of Floriana, Malta, and GfK nop u.k. Holding Limited, London, uk, were founded and were consolidated for the first time with effect from June 1, 2005. They operate as holding or financing companies for the British, Italian and German nop companies. FINANCIAL STATEMENTS 110_GfK GfK_110

In addition, the following three minority holdings were acquired as part of the purchase of nop World and are reported under associated companies: ggc-nop Limited, London, uk Infotab Research GmbH, Munich Starch Research Services Limited, Toronto, Ontario, Canada The purchase price for the acquisition of nop World totaled eur 578,792 thousand. This includes eur 10,434 thousand in incidental acquisition costs. eur 583,983 thousand was covered by liquid funds, while additional discounts on acquisition costs totaling eur 5,191 thousand will be refunded. This amount is reported under other current assets. The resulting goodwill totals eur 467,519 thousand and relates to the segments listed above. As a result of additional adjustments to the purchase price until May 31, 2006, adjustments may occur regarding the initial reporting of the merger in the balance sheet. The level of the purchase price is mainly due to the staff of nop World who have been taken over by the GfK Group through the acquisition. Also acquired were mainly well established, profitable surveys, brands and customer relations. As the workforce does not represent a capitalizable asset, most of the purchase price has been shown as goodwill. Previously unreported long-term intangible assets totaling eur 163,552 thousand and current assets amounting to eur 931 thousand were disclosed as part of the acquisition of nop World. The assets and liabilities which were assumed during the acquisition of nop World are shown in the following table. Prior to the merger As of the acquisition date Non-current assets 707,305 870,857 Current assets 143,295 144,226 Liquid funds 5,977 5,977 Liabilities and provisions 444,589 444,589 Companies of minor importance The GfK Group did not include 56 (2004: 42) companies in the consolidated financial statements during the reporting year because they were of minor significance for the net assets, financial position and income of the Group. External sales, total assets and annual income from these companies together total less than 4% of the corresponding values in the consolidated financial statements. Associated companies The consolidated financial statements as of December 31, 2005 report on participations in 22 (2004: 21) associated companies. The following table shows the changes in associated companies between January 1, 2005 and December 31, 2005. Associated companies (No.) 01.01.2005 Additions Disposals 31.12.2005 Germany 1 1 0 2 Abroad 20 3 3 20 Total 21 4 3 22 A minority participation was acquired in Research Matters ag, Basel, Switzerland, on June 1, 2005. Three associated companies were also added through the acquisition of nop World. These are shown in a separate section. The participation in Caribou Lake Software, llc, Minneapolis, usa, was increased in January 2005 from 19.9% to 69.8%. It is now included in the consolidated financial statements as a consolidated affiliated company. The participation in iha ims Health GmbH, Hergiswil, Switzerland, was sold. European Flash Surveys eeig, Brussels, Belgium was liquidated on September 30, 2005. As nop World was consolidated for the first time on June 1, 2005, it is covered for seven months in the consolidated financial statements as of December 31, 2005. It contributed around eur 200 million to the consolidated sales of the GfK Group in 2005, while net income of nop World for the same period totals eur 4,925 thousand. GfK ag largely funded the purchase price from borrowing. It also raised equity through a 10 % increase in capital with no subscription right. On June 2, 2005, GfK placed 3.15 million shares with institutional investors at a price of eur 28.70, as part of accelerated bookbuilding. This raised eur 90.3 million. Other participations The number of other participations fell by comparison with the prior year from eight to seven. FINANCIAL STATEMENTS GfK_111

Notes to the consolidated income statement Notes to the consolidated income statement The income statement was prepared according to the cost of sales method. Expenses are shown by operations. 1. Sales Sales are broken down according to type as shown in the table below. 2004 2005 Sales in respect of third parties, invoiced 659,646 916,360 Sales in respect of third parties, not yet invoiced 3,769 17,435 Sales in respect of related parties and groups 1,243 1,794 Sales in respect of affiliated companies 1,612 992 Sales in respect of associated companies 2,801 754 Sales 669,071 937,335 The breakdown of sales according to division and region is shown under segment reporting under 29. 2. Other operating income The breakdown of other operating income is shown in the following table. Non-operating depreciation/amortization primarily includes impairments on hidden reserves from purchase price allocation and impairments on software. Miscellaneous other expenses mainly include expenses on courses, conferences and seminars (eur 158 thousand), charitable donations (eur 156 thousand) and maintenance (eur 128 thousand). 4. Personnel expenses The expense items in the income statement include the personnel expenses listed in the table below. 2004 2005 Wages and salaries 233,128 310,861 Social security contributions and expenses for pensions 49,596 62,287 Personnel expenses 282,724 373,148 5. Adjusted operating income Adjusted operating income is the internal management indicator for the GfK Group. It is derived from the operating income whereby the following items are excluded. 2004 2005 Exchange gains 6,537 8,184 Further offsetting and transitory items 208 422 Income under rental and lease agreements 553 419 Income from share and asset deals 145 396 Income from previous reporting periods 650 231 Income from related parties and groups 0 186 Income from insurance recoveries 151 126 Income from the cancellation of valuation adjustments on other assets 572 11 Income from legal liability, fines, compensation 1,295 16 Miscellaneous 480 305 Other operating income 10,591 10,296 Miscellaneous other operating income mainly includes income from the disposal of tangible and intangible assets (eur 135 thousand). 3. Other operating expenses Other operating expenses includes the items shown in the table below. 2004 2005 Exchange losses 3,894 13,448 Non-operating depreciation/amortization 2,121 8,319 Expenses by related parties and groups 0 746 Losses from the disposal of tangible and intangible assets 113 683 Expenses under rental and lease agreements 284 552 Expenses from prior reporting periods 1,251 342 Expenses from legal liability, fines and compensation 6 244 Expenses on bank charges 264 225 Expenses from indemnity payments 1,086 0 Miscellaneous 658 1,471 Other operating expenses 9,677 26,030 Integration costs in connection with acquisitions Integration costs of eur 15,658 thousand were reported as expenses which are connected both materially and time-wise with the acquisition of nop World. These include primarily settlements and bonuses as well as travel costs, expenses, rental obligations and auditing and advisory costs. The integration costs are split across the items in the income statement as shown in the table below. 2005 Cost of sales 725 Selling and general administrative expenses 14,024 Other operating expenses 909 Integration costs 15,658 Amortization and impairment of additional assets identified on acquisitions Amortization on disclosed hidden reserves from purchase price allocation breaks down into scheduled amortization of eur 11,302 thousand, which is included in the cost of sales, and impairments totaling eur 4,600 thousand, which are included under other operating expenses. Further details are given in Note 11 under Other intangible assets. FINANCIAL STATEMENTS 112_GfK GfK_112

Personnel expenses for share-based payments and long-term incentives Personnel expenses shown here include tranches 4, 5 and 6 of the stock option program for GfK Group managers. The total value of each tranche is notified two years to the day after the options are issued, which corresponds to the period between issue and the initial right to exercise options. The rise in interest payments to banks is mainly linked to borrowing to acquire nop World. 9. Tax on income from ongoing business activity The main elements of the Group s tax on income are shown in the table below. Remaining other operating expenses The derivation of remaining other operating expenses from other operating expenses is shown in the table below. 2005 Other operating expenses 26,030 less: Unscheduled amortization on disclosed hidden reserves as part of purchase price allocation 4,600 Integration costs 909 Remaining other operating expenses 20,521 6. Other income from participations Other income from participations includes earnings from the disposal of the participation in iha ims Health GmbH, Switzerland, totaling eur 24,285 thousand and earnings from the disposal of the participation in mmxi Switzerland GmbH, Switzerland, amounting to eur 775 thousand. 7. Financial income Financial income breaks down as shown in the following table: 2004 2005 Current tax expenses/income: Taxes on income from other periods 391 324 Taxes based on tax losses not previously utilized 226 459 Taxes based on temporary differences previously unaccounted 34 46 Other expenses on tax on income 26,706 28,971 Current tax expenses 26,055 28,142 Deferred tax expenses/income: From the the formation or conversion of temporary differences 3,671 3,676 From changes in tax rate/new taxes 5 47 Based on previously non-utilized tax losses 30 137 Based on previously unaccounted temporary differences 6 1 Other deferred tax expenses 1,456 6,950 Deferred tax expenses/income 2,174 3,459 Taxes on income from ongoing business activity 28,229 24,683 The tax advantage from the utilization of tax loss carryforwards during financial year 2005 amounts to eur 2,760 thousand (2004: eur 652 thousand). The balance sheet for 2005 records a deferred tax claim due to non-utilized tax losses totaling eur 14,167 thousand (2004: eur 4,097 thousand). In addition, there is a deferred tax claim from deductible tax credit amounting to eur 9,210 thousand. 2004 2005 Interest income from bank balances 885 1,135 Other interest income from third parties 369 690 Interest income from related parties 170 51 Interest income from affiliated companies 16 20 Interest income from associated companies 215 0 Interest income 1,655 1,896 Other financial income 2,451 437 Financial income 4,106 2,333 In the prior year, other financial income comprised write-ups on loans to bwv Holding ag, St. Gallen, Switzerland, totaling eur 2,358 thousand. 8. Financial expenses Financial expenses break down as shown in the table below. The rate used to calculate deferred taxes for the German companies with registered offices in Nuremberg comprise corporation tax of 25% plus the solidarity surcharge of 5.5% on the corporation tax debt paid as well as the effective trade tax rate of 13.449%. As in 2004, this results in a tax rate of 39.824% as of December 31, 2005. The deferred taxes of the remaining German companies are calculated according to the relevant municipal factor of the trade tax rate. The deferred taxes of the companies outside Germany are calculated according to the respective country-specific tax rates. FINANCIAL STATEMENTS 2004 2005 Interest and similar expenses due to banks 2,804 16,324 Interest expenses under finance lease agreements 925 814 Other interest expenses due to third parties 456 607 Write-ups on discounted debts 44 286 Interest expenses due to related parties 77 117 Interest expenses due to affiliated companies 33 5 Interest expenses 4,339 18,153 Other financial expenses 361 932 Financial expenses 4,700 19,085 GfK_113

Notes to the consolidated income statement The table below contains a reconciliation of the anticipated income tax expense and the income tax expense stated in financial year 2005. To calculate the anticipated tax expense, the tax rate of the parent company, GfK ag, valid during the financial year and which corresponds to that used for the calculation of deferred tax for the German companies with registered offices in Nuremberg, is multiplied by the pre-tax result. 2004 2005 Total tax rate 39.824% 39.824% Expected income tax 32,403 36,718 Increase/reduction in income tax debt resulting from: Differences in tax rates 4,866 10,040 Tax-exempt income from the disposal of participations 0 3,954 Change in permanent differences 152 1,470 Other tax-exempt income 2,009 565 Change in temporary differences not recognized as deferred tax assets 245 229 Additional tax payments or refunds from previous years 391 60 Adjustment of deferred tax due to tax rate changes 5 47 Income from participations valued at equity, not eligible for tax 148 41 Other non-deductible expenses 527 864 Consolidation of taxable income from participations 330 997 Deviating tax base 944 1,206 Other 1,047 1,222 Tax expenses reported 28,229 24,683 The deferred taxes result from the balance sheet items shown in the following table: 31.12.2004 31.12.2005 Goodwill 1,590 741 Other intangible assets 1,936 2,454 Tangible assets 769 1,565 Financial assets 189 5,246 Other non-current assets and deferred items 0 175 Non-current assets 4,484 10,181 Inventories 1,366 1,549 Receivables and other current assets 160 1,739 Securities and fixed-term deposits 0 0 Liquid funds 45 0 Current assets 1,571 3,288 Long-term provisions 4,141 6,125 Other long-term liabilities and deferred items 7,030 6,922 Non-current liabilities 11,171 13,047 Short-term provisions 144 1,978 Other short-term liabilities and deferred items 29,460 29,945 Current liabilities 29,604 31,923 Tax loss carryforwards and tax credits 4,097 23,377 Deferred tax assets 50,927 81,816 Goodwill 3,828 71,706 Other intangible assets 4,586 5,871 Tangible assets 8,624 8,868 Financial assets 888 6,084 Other non-current assets and deferred items 57 1,584 Non-current assets 17,983 94,113 Inventories 102 49 Receivables and other current assets 16,631 26,185 Securities and fixed-term deposits 5 3 Liquid funds 212 236 Current assets 16,950 26,473 Long-term provisions 1,169 36 Other long-term liabilities and deferred items 1,731 810 Non-current liabilities 2,900 846 Short-term provisions 16,059 847 Other short-term liabilities and deferred items 322 1,115 Current liabilities 16,381 1,962 Deferred tax liabilities 54,214 123,394 Net deferred tax liabilities 3,287 41,578 Deferred taxes are reported in the balance sheet as shown in the following table. 31.12.2004 31.12.2005 Deferred tax assets 10,085 43,186 Deferred tax liabilities 13,372 84,764 Net deferred tax liabilities 3,287 41,578 FINANCIAL STATEMENTS Taxes on items posted directly to equity amounted to eur 967 thousand (2004: eur 57 thousand). As of December 31, 2005, the Group had domestic tax loss carryforwards amounting to eur 4,559 thousand (2004: eur 1,944 thousand) and foreign tax loss carryforwards of eur 43,075 thousand (2004: eur 16,797 thousand). The domestic loss carryforwards can be carried forward without restriction in terms of 114_GfK GfK_114

date and amount. Of the foreign loss carryforwards, the amount of eur 19,305 thousand may be carried forward without limit or for a period of more than 15 years, and the amount of eur 6,265 thousand is available for carryforward until 2015. The estimate of their future realizability governs the recognition and valuation of deferred tax assets. This is dependent on the generation of future taxable profits during accounting periods in which tax valuation differences are reversed and tax loss carryforwards can be applied. In view of expected future performance, it is assumed probable that the relevant benefits of the recognized deferred tax assets will be realized according to the provisions of ifrs. Deferred tax assets are also stated for companies which have been or are in a loss-making situation, if there is sufficient assumption of future profits. The items for which no deferred tax assets have been stated are shown in the table below. 31.12.2004 31.12.2005 Temporary differences 173 324 Tax losses as yet not utilized 5,782 5,570 5,955 5,894 Of these tax losses not recognized as deferred tax assets, an amount of eur 3,773 thousand lapses within the next five years; the remaining eur 1,797 thousand has no time limit on its use. The GfK Group reports deferred tax liabilities on retained profits from foreign subsidiaries where these profits are distributable and are not to remain permanently invested in the subsidiaries. 10. Earnings per share Earnings per share are shown in the table below. Notes to the consolidated balance sheet 11. Intangible assets The movement in intangible assets is shown in the table below. Acquisition and manufacturing costs Goodwill Other intangible assets Total: intangible assets Brought forward as of January 1, 2004 202,942 69,048 271,990 Exchange rate changes 3,498 2,469 5,967 Change in scope of consolidation 4,475 30,265 34,740 Additions 29,121 9,861 38,982 Disposals 642 7,994 8,636 Reclassifications 700 700 0 As of December 31, 2004 231,698 99,411 331,109 As of January 1, 2005 231,698 99,411 331,109 Exchange rate changes 17,543 10,534 28,077 Change in scope of consolidation 513,411 178,353 691,764 Additions 16,154 14,776 30,930 Disposals 1,085 1,085 Reclassifications 6 6 As of December 31, 2005 778,806 301,995 1,080,801 Cumulative amortization Brought forward as of January 1, 2004 41,257 41,643 82,900 Exchange rate changes 655 351 1,006 Change in scope of consolidation 1,000 190 1,190 Additions 9,734 9,734 Disposals 7,945 7,945 Impairment 1,478 1,478 Reclassifications 57 57 0 As of December 31, 2004 41,545 44,806 86,351 2004 2005 Consolidated total income attributable to equity holders of the parent 42,345 59,352 Weighted average of shares outstanding non-diluted 31,366,611 33,486,383 Weighted average of shares outstanding diluted 31,680,182 33,965,548 Earnings per share in eur 1.35 1.77 Earnings per share (diluted) in eur 1.34 1.75 The average number of shares is diluted by 479,165 shares from issued, not yet exercised options under tranches 3 to 6, which are in the money as at the reporting date. This results in a dilution effect of eur 0.02 per share. As of January 1, 2005 41,545 44,806 86,351 Exchange rate changes 1,179 1,177 2,356 Change in scope of consolidation 311 5,008 5,319 Additions 18,963 18,963 Disposals 794 794 Impairment 7,641 7,641 Reclassifications 1 1 As of December 31, 2005 43,035 76,802 119,837 Carrying amounts As of January 1, 2004 161,685 27,405 189,090 As of December 31, 2004 190,153 54,605 244,758 As of January 1, 2005 190,153 54,605 244,758 As of December 31, 2005 735,771 225,193 960,964 FINANCIAL STATEMENTS GfK_115

Notes to the consolidated balance sheet Goodwill The allocation of goodwill to cash-generating units is shown in the table below. 31.12.2004 eur m 31.12.2005 eur m Custom Research 60.6 351.1 Retail and Technology 45.7 57.4 Consumer Tracking 3.6 3.6 Media 34.0 167.0 HealthCare 46.3 156.7 Other 0.0 0.0 Goodwill 190.2 735.8 An impairment test is carried out at least once a year to determine whether and to which extent existing goodwill is to be impaired. No impairment adjustment was required as a result of the impairment test for 2004 and 2005. There were therefore no impairment expenses for either financial year. Other intangible assets The breakdown of other intangible assets is shown in the table below. 31.12.2004 31.12.2005 Disclosed hidden reserves from purchase price allocation Surveys 0 90,914 Brands 167 44,352 Customer relations 23,389 41,087 Panels 1,198 4,990 Contracts 0 3,287 Order book 0 1,734 Software 24,874 29,779 Panel set-up costs 338 3,003 Sundry intangible assets 4,639 6,047 Other intangible assets 54,605 225,193 The item Software includes software developed internally totaling eur 13,022 thousand (2004: eur 10,049 thousand). Expenses for research activities is recorded as expenses for the reporting period. Development costs which did not result in a capitalizable intangible asset are also recorded as expenses. Panel set-up costs only have a limited useful life if the panel was created for a specific, fixed-term client order. Capitalized panel set-up costs amounting to eur 2,571 thousand have an unlimited useful life. Brands which have been identified and capitalized as part of the purchase price allocation, also have an unlimited useful life, as they are established brands with a high degree of brand recognition. The recoverability of panel set-up costs and brands with an unlimited useful life was reviewed as part of an impairment test. This indicated no need for an impairment adjustment. The amortization and impairment expenses charged on intangible assets are included in the following items on the income statement: 2004 2005 Cost of sales 8,192 18,112 Selling and general administrative costs 899 851 Other operating expenses 2,121 7,641 Total 11,212 26,604 Impairment expenses total eur 7,641 thousand (2004: eur 1,478 thousand). eur 3,041 thousand relates to impairment losses for software: during the year under review, it was discovered that the economic life of a software license in the HealthCare division is no longer applicable. In addition, an impairment loss of eur 3,877 thousand relates to customer relations which had been stated as part of the purchase price allocation; this relates to the reduction in the volume of orders from major clients in the Custom Research and HealthCare divisions. In order to assess the recoverable value, the higher of the attributable fair value less costs to sell and service value is determined and compared with the carrying value. The impairment is recognized in the income statement under other operating expenses. Intangible assets of major importance are shown in the table below. 31.12.2004 31.12.2005 Goodwill 137,425 515,892 Software 6,040 7,430 Surveys 0 86,192 Customer relations 22,849 29,735 Brands 0 29,196 The above table shows the sum total of all intangible assets with an individual value of more than eur 5 million. The major portion of goodwill refers to nop World companies. The useful life of goodwill is indefinite and it is not subject to scheduled amortization. Software mainly involves internally developed startrack analysis and production system in the Retail and Technology division. The remaining useful life amounts to nine years. The surveys, customer relations and brands stem primarily from the purchase price allocation as part of the acquisition of nop World. The remaining useful life for the surveys is ten years. The customer relations are written down over 12 or 19 years at an individually determined customer churn rate of between 7.5 % and 15 %. Brands have an unlimited useful life and are not subject to scheduled amortization. The allocation of brands to the divisions is shown in the table below. 31.12.2004 31.12.2005 Custom Research 0 26,454 Media 0 14,188 HealthCare 167 3,710 Brands 167 44,352 FINANCIAL STATEMENTS 116_GfK GfK_116

12. Tangible assets The movement in tangible assets is shown in the table below. Acquisition and manufacturing costs Land and buildings and assets in course of constructions Fixtures and fittings Tangible assets Brought forward as of January 1, 2004 47,822 136,230 184,052 Exchange rate changes 290 193 97 Changes in scope of consolidation 687 687 Additions 751 13,217 13,968 Disposals 74 6,925 6,999 Reclassifications 122 122 0 As of December 31, 2004 48,667 143,138 191,805 As of January 1, 2005 48,667 143,138 191,805 Exchange rate changes 25 2,178 2,153 Changes in scope of consolidation 815 36,236 37,051 Additions 4,737 18,216 22,953 Disposals 61 8,720 8,781 Reclassifications 1,075 1,069 6 As of December 31, 2005 53,058 192,117 245,175 Leasing The GfK Group leases office premises and business equipment under long-term lease agreements. As a rule, the lease installments consist of a minimum lease payment plus a contingent lease payment whose level is governed by the level of use of the leased assets. In cases in which the GfK Group bears the risks and opportunities arising from the use of the leased assets to a substantial extent, these are capitalized (finance lease). Otherwise the lease installments are carried as an expense (operating lease). Operating lease The payments listed in the table below under operating lease agreements were carried as expenses: 2004 2005 Minimum lease payments 15,237 20,632 Contingent lease payments 342 352 Less sub-lease payments received 519 627 Lease payments 15,060 20,357 Cumulative depreciation Brought forward as of January 1, 2004 13,823 104,220 118,043 Exchange rate changes 90 125 35 Changes in scope of consolidation 394 394 Additions 1,293 13,343 14,636 Disposals 74 6,183 6,257 Reclassifications 9 9 0 As of December 31, 2004 15,123 111,658 126,781 As of January 1, 2005 15,123 111,658 126,781 Exchange rate changes 9 1,288 1,279 Changes in scope of consolidation 117 25,544 25,661 Additions 1,262 16,053 17,315 Disposals 28 7,231 7,259 Impairment 678 678 Reclassifications 154 153 1 As of December 31, 2005 16,311 148,143 164,454 Carrying amounts As of January 1, 2004 33,999 32,010 66,009 As of December 31, 2004 33,544 31,480 65,024 As of January 1, 2005 33,544 31,480 65,024 As of December 31, 2005 36,747 43,974 80,721 Impairment expenses relating to tangible assets total eur 678 thousand (2004: eur 0 thousand). These related to impairments on leasehold improvements due to moving to new premises. The expense is shown in the income statement under other operating expenses. A land charge has been entered on a piece of land with company buildings in Nuremberg with a carrying value of eur 9,992 thousand for a bank guarantee on a loan. The carrying value of the secured liability as at the reporting date was eur 3,942 thousand. The future minimum lease payments under non-terminable agreements are due as of December 31, 2005 as shown in the table below. Payable 31.12.2005 Within one year 27,339 Between one and five years 64,936 After more than five years 35,713 Future minimum lease payments under operating leases 127,988 The main operating leases in the GfK Group involve leases on land and buildings, some with options to extend the lease. They have differing future expiry dates. Where contingent lease payments are to be made, these are determined based on energy costs incurred. Finance lease The carrying values of capitalized leased items as of December 31, 2005 are shown in the table below. 31.12.2004 31.12.2005 Land 141 659 Buildings 11,323 10,693 Fixtures and fittings 1,987 1,290 Capitalized leased items 13,451 12,642 The determination of the present value and due date of future minimum lease payments as of December 31, 2005 is shown in the table below. Payable Minimum lease installment Less interest Present value minimum lease installment Within one year 2,188 677 1,511 Between one and five years 7,002 2,455 4,547 After more than five years 9,971 796 9,175 Future minimum lease installment 19,161 3,928 15,233 FINANCIAL STATEMENTS GfK_117

Notes to the consolidated balance sheet In the reporting year there were no conditional lease instalments to be recognized as expenses. There were no sublease arrangements under finance leases. The main finance leases held by the GfK Group are for buildings and part buildings as well as fixtures and fittings. In April 1992, GfK ag entered into a sale-and-leaseback agreement for part of the office building at Nordwestring 101, Nuremberg, which qualifies as a finance lease. The lease was concluded for 30 years with an original obligation amounting to eur 13,012 thousand. The lease agreement can be terminated in March 2012 with the option to acquire the building. The finance lease liability is eur 15,233 thousand (2004: eur 16,391 thousand) of which eur 1,511 thousand (2004: eur 1,582 thousand) has a remaining term of under one year. 13. Investments Investments in associates The GfK Group s investments in associates are shown in the list of shareholdings attached to these Notes as an appendix. The table below gives a summary of financial information on the key investments in associates which have been valued at equity in the consolidated financial statements. 2004 2005 Assets 44,381 42,350 Liabilities 20,153 16,969 Sales 70,784 56,220 Total income for period 15,119 10,823 During the reporting period there were no pro rata losses on investments in associates. The equity valuation was based on financial statements with differing reporting dates for the following associated companies: Media Focus (arge), Hergiswil, Switzerland (November 30, 2005) Other investments The breakdown of other investments is shown in the table below. 31.12.2004 31.12.2005 Shares in affiliated companies 3,566 1,478 Other participations 385 295 Loans to affiliated companies 4,064 1,682 Loans to associated companies 618 0 Other loans 1,952 138 Available-for-sale securities 739 652 Long-term fixed deposits 0 101 Other investments 11,324 4,346 Shares in affiliated companies, other participations Participations in affiliated, non-consolidated companies and other participations are reported at amortized cost as no market prices exist for them and other methods of realistically estimating the fair value are not practicable. Further information on the GfK Group s shares in affiliated companies and other participations is provided in the list of shareholdings in the appendix to the Notes. Loans Loans to affiliated companies include value-adjusted loans with a disbursed amount of eur 2,978 thousand (2004: loans to affiliated and associated companies eur 5,118 thousand). The accumulated write-downs on these loans amount to eur 2,341 thousand (2004: loans to affiliated and associated companies eur 3,276 thousand). There were no impairment expenses in the year under review. Securities The table below shows an overview of the acquisition costs, fair value and unrealized profits and losses of the portfolio of availablefor-sale securities. org-gfk Marketing Services (India) Private Limited, Mumbai, India (March 31, 2005) Sports Tracking Europe, b.v., Amstelveen, Netherlands (September 30, 2005) npd Intelect, l.l.c., Port Washington, New York, usa (September 30, 2005). The carrying amount for these investments and the income from associates are not materially affected by including these financial statements with differing reporting dates. Preparing interim financial statements for this purpose would therefore have been uneconomical. Bearer instruments 31.12.2004 31.12.2005 Acquisition costs 736 654 Fair value 739 652 Unrealized profit 54 38 Unrealized loss 10 13 The bearer instruments held in the portfolio at the end of the year have a remaining term of more than one year. Each security is valued separately. FINANCIAL STATEMENTS 118_GfK GfK_118

14. Other non-current assets and deferred items The breakdown of other non-current assets and deferred items is shown in the table below. 31.12.2004 31.12.2005 Receivables from insurance companies 1,683 1,631 Deferred items 930 740 Guarantee deposits 681 607 Assets from pension plans 409 440 Amounts owed by related parties 155 71 Other assets 130 92 Other non-current assets and deferred items 3,988 3,581 15. Trade receivables Trade receivables break down as shown in the table below. 17. Liquid funds A breakdown of liquid funds is shown in the table below. 31.12.2004 31.12.2005 Credit with banks 43,587 72,345 Cash equivalents and fixed-term deposits with a remaining term of less than 3 months 4,383 6,640 Cash and cheques 727 614 Liquid funds 48,697 79,599 The rise in liquid funds is largely due to the companies in nop World joining the GfK Group. Of the liquid funds, eur 2,551 thousand (2004: eur 220 thousand) are not freely available. The restriction on availability is mainly due to the fact that these liquid funds serve as rental deposits. 31.12.2004 31.12.2005 Invoiced trade receivables owed by third parties 118,055 214,017 owed by affiliated companies 1,277 765 owed by associated companies 308 127 owed by other participations 334 0 owed by related parties 7 75 119,981 214,984 Non-invoiced trade receivables 23,157 43,649 143,138 258,633 Less: valuation allowances 4,962 5,422 Trade receivables 138,176 253,211 Impairment expenses amounted to eur 1,643 thousand (2004: eur 1,465 thousand). They are shown in the income statement under the item selling and general administrative expenses. 16. Securities and fixed-term deposits A breakdown of securities and fixed-term deposits is shown in the table below. 31.12.2004 31.12.2005 Securities 6,488 3,762 Fixed-term deposits with a remaining term of between 3 and 12 months 0 1,760 Securities and fixed-term deposits 6,488 5,522 The trading securities reported under current assets are carried at fair value. During the year under review, write-downs of eur 5 thousand (2004: eur 69 thousand) and write-ups of eur 118 thousand (2004: eur 21 thousand) were recognized in the income statement under the item Other financial expenses and income. 18. Other current assets and deferred items The other current assets and deferred items break down as shown in the table below. 31.12.2004 31.12.2005 Deferred items 5,473 10,806 Advance payments, credit balances and refund claims 240 10,013 Short-term income tax receivables 6,800 8,683 Derivative financial instruments 35 6,172 Prepayments made on tangible and intangible assets 2,605 4,595 Receivables from tax and other authorities 1,275 3,668 Amounts owed by debtors (Suppliers with debit balances) 874 1,388 Guarantee deposits 847 1,092 Other amounts owed by affiliated companies 1,350 1,033 Other amounts owed by associated companies 633 825 Amounts owed by employees 466 699 Amounts owed by related parties 516 639 Other receivables under share and asset deals 185 491 Stationery and office supplies and gifts 223 437 Receivables from insurance companies 109 177 Other current assets 523 2,598 22,154 53,316 Less: valuation allowance 1,064 1,034 Other current assets and deferred items 21,090 52,282 The increase in deferred items is mainly due to supplier invoices paid in advance for which the service has not yet been provided. In the period under review, advance payments, credits and refund claims include refund claims against the previous owners of nop World. These include, for example, tax payments relating to the period before nop World belonged to the GfK Group. FINANCIAL STATEMENTS GfK_119

Notes to the consolidated balance sheet The increase in derivative financial instruments is also due to the acquisition of nop World. They serve to hedge interest rate risks and are valued according to the marking-to-market method as at the reporting date. The derivatives reported here are part of a cash flow hedge. Prepayments made largely relate to internally developed software under development. Upon completion of the software, which is planned for 2007, it will be reclassified under other intangible assets and subject to scheduled amortization. Impairment expenses on other current assets and deferred items amounted to eur 27 thousand (2004: eur 39 thousand). This is included under other operating expenses. 19. Total equity Subscribed capital The subscribed capital of GfK Aktiengesellschaft was increased on the basis of the capital increase and by exercising stock options. Based on the resolution of the Supervisory Board dated June 2, 2005, the subscribed capital was increased by eur 13,370 thousand from authorized capital. In the stock option program, in 2005, the holders of option rights from tranches 2002/2007 and 2003/2008 were entitled to acquire new no-par shares in GfK ag in the ratio 1:1.2 against submission of the option rights. In 2005, 147,848 options were exercised from the tranche 2002/2007 for the acquisition of 177,417 no-par shares at the price of eur 20.11. From the tranche 2003/2008, 207,554 options were exercised for the acquisition of 249,064 no-par shares at the price of eur 15.44. As a result of the measures above, the subscribed capital, capital reserve and the number of no-par bearer ordinary shares issued developed as shown in the table below. Subscribed capital eur 000 Capitalreserve eur 000 Number of no-par shares issued Units As of January 1, 2005 133,734 92,000 31,474,522 Capital increase through issue of new shares 13,370 76,939 3,146,689 Costs of capital increase 2,735 Issue of new shares through conversion of options from contingent capital 1,813 5,601 426,481 Cumulative personnel expenses for stock options 2,597 As of December 31, 2005 148,917 174,402 35,047,692 The 35,047,692 no-par shares are fully paid-up. Each shareholder is entitled to receive dividends on his shares in accordance with the respective profit distribution resolution. Each share grants one vote at the Annual General Meeting. GfK Aktiengesellschaft has authorized capital 2002 and authorized capital 2005 i. By resolution of the Annual General Meeting on June 13, 2002, the Management Board was authorized, with the consent of the Supervisory Board, to increase the capital against cash and/or contributions in kind on one or more occasions by up to a total amount of eur 21,000 thousand until June 12, 2007 (authorized capital 2002). At the Annual General Meeting on May 24, 2005, the Management Board was authorized, with the consent of the Supervisory Board, to increase the capital against cash and/or contributions in kind on one or more occasions by up to a total amount of eur 45,867 thousand until May 23, 2010, whereby the shareholders subscription rights may be excluded (authorized capital 2005 i). A part sum of eur 13,370 thousand has been utilized from the authorized capital 2005 i by the capital increase in 2005 excluding subscription rights. A sum of eur 32,497 thousand therefore remains from the authorized capital 2005 i. FINANCIAL STATEMENTS 120_GfK GfK_120

Contingent capital In June 1999, the shareholders passed a resolution for a contingent increase of eur 5,120 thousand in the company s subscribed capital by issuing up to 2,000,000 new no-par bearer shares. At the Extraordinary General Meeting of September 3, 1999, a resolution was passed to relate profit entitlement to the start of the financial year in which options are exercised. The aim of the contingent capital increase is to grant option rights to the senior management team of the company and its affiliated companies within the meaning of Section 15 ff. of the German Stock Corporation Act. Acquiring option rights is contingent on the achievement of a minimum target, to be agreed with each individual entitled person, for their immediate area of responsibility. The number of options available to each entitled person is based on the variable salary component advised to each entitled person in an individual letter, which can be replaced by options in the ratio of 1:2.5 by waiving a portion of the promised bonus. The actual number of options for all seven tranches (2000/2005, 2001/2006, 2002/2007, 2003/2008, 2004/2009, 2005/2010, 2006/2011) results from division of this figure by a factor of 4.5. The option right can be exercised at the earliest two years after issue and only within the defined exercise windows. The exercise price is 120% of the average price of GfK shares in the Xetra closing auction on the five trading days prior to the issue of the option rights, or 120% of the price of GfK shares in the Xetra closing auction on the date of issue if this is higher than the aforementioned average price. The term of the option rights of the 2000/2005 tranche ended on December 31, 2005. During this term this tranche was not in the money and therefore no options were exercised. They lapsed on December 31, 2005. In June 2002, the shareholders consented to cancel the existing authorization to grant option rights and approved a new authorization and an adjustment of the contingent capital. The new option terms deviate from those of the first two tranches of the programme as follows: Members of the Management Board of GfK ag may hold a maximum of 30% of the option rights being granted (previously 20%). Options may not be exercised during the 14 days before publication of quarterly, half-yearly, annual or provisional annual figures. In addition, the company may set further periods at its discretion during which options may not be exercised. For each of the tranches to be issued, the exercise price to acquire a share is the share s average Xetra price between the respective previous accounts press conference and the Annual General Meeting or, if higher, the price of the share in the Xetra closing auction on the trading day on which the respective tranche is issued, plus a premium of 5%. Trading days are those days on which the Frankfurt stock exchange determines a price for the company s shares. The application of the new option terms has been resolved for tranche 3 (issue and exercise) and for all subsequent tranches. At the start of 2005, the contingent capital for exercising options amounted to eur 12,768 thousand, equivalent to 3,004,204 no-par bearer shares. In 2005, a total of 426,481 no-par shares were issued through the exercise of 147,848 options from the 2002/2007 tranche and 207,554 options from the 2003/2008 tranche. As a result of these transactions, the company s contingent capital reduced to eur 10,954 thousand as at December 31, 2005, corresponding to 2,577,723 no-par bearer shares. Stock options As a result of the capital increase in 2004 out of company funds and the issue of bonus shares in the ratio 5:1, the subscription right in respect of the issued options of tranches one to six increased from one share to 1.2 shares per option. The exercise prices were adjusted accordingly. As of tranche 7, to which GfK executives were invited to subscribe after the capital increase in 2004, one option again corresponds to one subscription right. Detailed information on the individual tranches is given in the table below. Tranche Term Total options Of which Management Board Exercise price Exercisable in eur from to Options exercised Shares issued 1 2000/ 2005 380,130 76,512 46.00 2002 1) 2005 1) expired expired 2 2001/ 2006 366,690 85,215 34.75 2003 1) 2006 1) 3 2002/ 2007 380,300 85,215 20.11 2004 2) 2007 2) 256,544 305,545 4 2003/ 2008 457,319 149,999 3) 15.44 2005 2) 2008 2) 207,554 249,064 5 2004/ 2009 418,720 128,110 3) 25.81 2006 2) 2009 2) 6 2005/ 2010 454,141 122,221 3) 31.92 2007 2) 2010 2) 7 2006/ to be announced 2008 2) 2011 2) 2011 585,366 4) 146,664 4) 1) Exercise of options commences after the Annual General Meeting. Options may be exercised during the following periods: from the third trading day on the Frankfurt stock exchange after the Annual General Meeting of GfK ag until June 30, (inclusive) and from the first day after publication of the half-yearly figures until September 30, (inclusive) and from the first day after publication of q3 figures until 14 days before the financial year ends (inclusive). 2) Exercise of options commences after the Annual General Meeting. Options may not be exercised during the 14 days before publication of quarterly, half-yearly, annual or preliminary annual figures. The company may set further periods during which options may not be exercised. 3) Including members of the Management Board who have since left the company. 4) Subscribed; entitlement to options does not yet exist; options not yet issued. FINANCIAL STATEMENTS GfK_121

Notes to the consolidated balance sheet The development of the stock options issued is shown in the table below. Number of options 2004 2005 Weighted average price in eur/share Number of options Weighted average price in eur/share Balance at start of year 1,610,764 28.43 1,897,548 27.55 Options granted 421,805 25.81 454,141 26.60 Exercised 108,696 20.11 355,402 17.39 Forfeited 26,325 32.56 1,000 25.82 Expired 380,130 46.00 Repayments Balance at year-end 1,897,548 27.55 1,615,157 25.19 Exercisable at year-end 1,018,424 35.04 740,211 27.37 During financial year 2005, the stock options program involved personnel expenses of eur 2,597 thousand (2004: eur 1,958 thousand). The fair value of the stock options issued by GfK in the years 2000 to 2005 was calculated as at the date of granting on the basis of a Black-Scholes option pricing model which takes account of the issue terms and conditions. The parameters considered when calculating the fair value and the overall amounts based on it are shown in the table below. Tranche 1 2 3 4 5 6 Implicit volatility on issue date 33 % 39 % 39 % 51 % 34 % 26 % Risk-free investment interest 1) 5.2 % 4.8 % 4.7 % 2.2 % 3.2 % 2.5 % Term in years 5.58 5.59 5.55 5.55 5.54 5.55 Fair value per option right in eur 16.42 12.92 7.63 5.70 6.66 5.04 Total value per program 6,390 4,854 2,902 2,654 2,809 2,289 1) Current yield to maturity on German bearer debentures issued by the public sector, mean remaining terms of over five years up to and including six years The average weighted remaining term for the stock options amounted to 3.1 years (2004: 3.1 years) as of December 31, 2005. The development in the individual items of equity capital is shown in the table below. Attributable to equity holders of the parent Income and expense recognized directly in equity Subscribed capital Capital reserve Retained earnings Foreign exchange translation differences Change in fair value of equity securities availablefor-sale Change in fair value of cash flow hedges (effective portion) Valuation of hedges of net investments in foreign subsidiaries Actuarial gains/losses on defined benefit plans Total Minority interests As of January 1, 2004 66,872 87,944 49,851 14 90 204,771 19,016 223,787 Total recognized income and expense 42,345 8,075 14 116 692 34,860 10,401 45,261 Shares issued 525 2,098 2,623 2,623 Capital increase from company funds 66,337 66,337 Dividends to shareholders 6,531 6,531 6,625 13,156 Other changes 1,958 159 2,117 3,882 1,765 As of December 31, 2004 133,734 92,000 19,487 8,075 28 26 692 237,840 18,910 256,750 As of January 1, 2005 133,734 92,000 19,487 8,075 28 26 692 237,840 18,910 256,750 Total recognized income and expense 59,352 23,194 10 3,732 3,745 3,388 79,135 9,140 88,275 Shares issued 15,183 79,805 94,988 94,988 Dividends to shareholders 9,442 9,442 7,708 17,150 Other changes 2,597 728 1,869 1,825 3,694 As of December 31, 2005 148,917 174,402 68,669 15,119 18 3,706 3,745 2,696 404,390 22,167 426,557 Total equity FINANCIAL STATEMENTS 122_GfK GfK_122

Proposed appropriation of profits In accordance with the German Stock Corporation Act, the dividend that may be distributed is determined by the retained profit reported in the annual financial statements of GfK ag. These are prepared under the provisions of the German Commercial Code (hgb). The retained earnings and the retained profit of GfK ag reported under the pro visions of the hgb are available for distribution in their entirety to shareholders. The capital reserve may not be distributed to shareholders. A proposal will be made to the General Meeting to distribute a dividend of eur 11,566 thousand (eur 0.33 per no-par share) to shareholders out of the retained profit for 2005 of eur 50,016 thousand and to transfer eur 38,450 thousand to retained earnings. Discrepancies between the actual values and these estimated values are expressed as actuarial gains or losses. The GfK Group is utilizing the option under ias 19 retrospectively from January 1, 2004 whereby actuarial gains and losses are not recognized in the income statement but in income and expenses recognized directly in equity. In the year under review, actuarial losses of eur 4,839 thousand (2004: gains eur 745 thousand) were reported in this way. The amount of income and expenses recognized directly in equity totaled eur 4,087 thousand (2004: gains eur 750 thousand) as of December 31, 2005. The figures do not include deferred taxes. The calculation of obligations and, in certain cases, associated plan assets, is based on the actuarial and statistical assumptions listed in the table below (weighted averages). 20. Long-term provisions The breakdown of long-term provisions is shown in the table below: 31.12.2004 31.12.2005 Pension provisions 27,565 38,443 Other long-term provisions 6,246 15,849 Long-term provisions 33,811 54,292 Pension provisions Pension provisions within the GfK Group are based on both defined contribution plans and defined benefit plans for each company. For defined contribution plans, which are entirely funded by external resources, there are no further obligations for GfK companies other than paying contributions. Expenses for defined contribution plans also include employer contributions to statutory pension plans. Pension commitments are based on statutory or contractual arrangements or are on a voluntary basis. The basis of assessment for contributions to defined contribution plans is mainly the length of service with the company and the wage or salary level of the employee. However, the benefits can vary depending on the legal, fiscal and economic framework conditions of the country concerned. The pension expenses for defined contribution plans amounted to eur 12,267 thousand (2004: eur 6,700 thousand) in financial year 2005. The pension obligations arising from defined benefit plans are reported according to the projected unit credit method. Actuarial reports are produced annually by independent actuaries for defined benefit plans. The actuaries apply statistical and actuarial calculations to determine the assets and provisions to be carried on the balance sheet. Determining the fair value of defined benefit plans and pension assets is based on empirical and statistical estimated values such as, for example, future wage rises, mortality rates or expected long-term returns on the plan assets. 2004 2005 Discount rate 4.01 % 3.59 % Rate of salary increase 2.12 % 2.29 % Fluctuation rate 0.29 % 0.35 % Expected growth in pensions 1.10 % 1.07 % Expected long-term return on plan assets 4.27 % 4.21 % The mortality rates for the GfK companies in Germany were taken from the 2005g guideline tables by Dr. Klaus Heubeck. The breakdown of pension provisions reported in the balance sheet is shown in the table below. 31.12.2004 31.12.2005 Present value of unfunded obligations 25,070 36,358 Present value of funded obligations 36,255 41,473 Present value of overall obligations 61,325 77,831 Fair value of plan assets 33,760 39,388 Net present value of obligations 27,565 38,443 Pension provisions 27,565 38,443 Other assets 0 0 Net amount reported on balance sheet 27,565 38,443 The movement in the present value of the defined benefit obligation during the period under review is shown in the table below. 2005 Present value of defined benefit obligation as of January 1 61,325 Changes in the scope of consolidation 5,582 Current service cost 3,045 Interest cost 2,599 Participant contributions 949 Actuarial gains and losses 5,352 Exchange rate changes 462 Benefits paid 2,373 Past service cost 1,814 Present value of defined benefit obligation as of December 31 77,831 FINANCIAL STATEMENTS GfK_123

Notes to the consolidated balance sheet The table below shows the movement in plan assets: 2005 Fair value of plan assets as of January 1 33,760 Changes in the scope of consolidation 2,360 Expected return on plan assets 1,582 Actuarial gains/losses 831 Exchange rate changes 122 Employer contributions 1,604 Participant contributions 949 Benefits paid 1,576 Fair value of plan assets as of December 31 39,388 The plan assets for funded pension obligations comprise shares, fixed-rate securities and real estate. They do not include either financial instruments issued by GfK companies or real estate used by consolidated companies. The fair value of plan assets essentially includes financial instruments amounting to eur 28,917 thousand and real estate not utilized by GfK or other assets worth eur 6,282 thousand. General projected return on plan assets were determined based mainly on empirical data from the past 10 years. The projected return in 2005 on plan assets reported in the financial statement is an average 4.21%. The actual yield from plan assets in 2005 amounted to eur 2,413 thousand. According to GfK estimates, contributions of around eur 1,335 thousand will be paid into funded pension plans over the coming year. The amounts reported in the income statement break down as shown in the table below. 2004 2005 Service cost 2,141 3,045 Interest costs 2,176 2,599 Expected return on potential plan assets 1,320 1,582 Past service cost 2,181 1,814 Profit/loss from curtailment or discontinuation of the pension plan 536 0 Pension expenses 4,642 5,876 Other long-term provisions The movement in other long-term provisions in the period under review is shown in the table below. Personnel Potential contractual losses Sundry Total As of 01.01.2005 5,590 656 6,246 Currency effects 3 334 19 356 Change in the scope of consolidation 51 7,955 29 8,035 Write-ups to discounted provisions 263 263 Additions/transfers 2,488 668 3,156 Utilization 757 39 796 Release 10 29 39 Reclassifications 425 974 27 1,372 As at 31.12.2005 6,940 7,578 1,331 15,849 Personnel provisions comprise mainly commitments relating to employees leaving and from provisions for anniversary expenses based on contractual agreements. The provision for potential contractual losses relates to two longterm rental contracts at non-standard terms. The larger contract in terms of amount has been in place since 2002 at a company in nop World. The remaining term is 10 years. The agreed rent has been compared with current and estimated future market rates and the amount in excess has been recognized in the provision. As this is an interest-free commitment, the present value has been used. The discount was calculated at an interest rate of 7%. The net amount of the commitment as at the reporting date was eur 11,151 thousand (usd 13,197 thousand). In 2005, a write-up on this discount amounting to eur 263 thousand was applied. If the future market price for rents does not follow the trend assumed for recognition of this provision, the provision will be adjusted accordingly. Sundry other long-term provisions mainly include commitments to authorities and insurance companies amounting to eur 1,235 thousand (2004: eur 601 thousand). The pension expenses are included mainly in cost of sales, selling and general administrative expenses and in other financial expenses. The funding status is shown in the table below. 2004 2005 Pension liabilities 61,325 77,831 Pension assets 33,760 39,388 Funding status 27,565 38,443 Empirical adjustment in liabilities 26.92 % Empirical adjustment in assets 16.67 % FINANCIAL STATEMENTS 124_GfK GfK_124

21. Long-term and short-term interest-bearing financial liabilities The breakdown of financial liabilities is shown in the table below. There is collateral amounting to eur 510,678 thousand (2004: eur 9,102 thousand) for amounts due to banks and liabilities under leases of eur 563,652 thousand (2004: eur 61,746 thousand). The collateral breakdown is as shown in the following table: 31.12.2004 31.12.2005 Amounts due to banks 45,355 548,419 of which with a remaining term of less than 1 year 9,865 3,984 of which with a remaining term of between 1 and 5 years 32,329 543,011 of which with a remaining term of over 5 years 3,161 1,424 Liabilities under finance leases 16,391 15,233 of which with a remaining term of less than 1 year 1,582 1,511 of which with a remaining term of between 1 and 5 years 4,654 4,547 of which with a remaining term of over 5 years 10,155 9,175 Other financial liabilities 5,154 6,055 of which with a remaining term of less than 1 year 4,454 4,871 of which with a remaining term of between 1 and 5 years 423 905 of which with a remaining term of over 5 years 277 279 Financial liabilities 66,900 569,707 of which with a remaining term of less than 1 year 15,901 10,366 of which with a remaining term of between 1 and 5 years 37,406 548,463 of which with a remaining term of over 5 years 13,593 10,878 Other financial liabilities contain loan liabilities totaling eur 5,126 thousand (2004: eur 5,043 thousand) as of December 31, 2005, of which eur 4,670 thousand (2004: eur 4,417 thousand) concerned related parties. Notes payable of eur 333 thousand (2004: eur 0 thousand) are included under other financial liabilities. As of December 31, 2005, the weighted average interest rate for amounts due to banks was 3.93% (2004: 3.73%). The financial liabilities become due in the next five years and thereafter, as shown in the table below: 2006 1) 10,366 2007 110,270 2008 100,381 2009 97,968 2010 239,844 Subsequent years 10,878 Financial liabilities 569,707 1) contains current account liabilities payable on demand in the context of credit lines As of December 31, 2005, the GfK Group had confirmed credit lines of eur 689,992 thousand (2004: eur 142,635 thousand), of which eur 137,279 thousand (2004: eur 95,430 thousand) has not been used. The weighted average rate of interest on the credit lines is 3.95% (2004: 3.79%). 31.12.2004 31.12.2005 Amounts due to banks secured by mortgages 5,821 3,942 assignment of receivables 1,199 821 transfer of investments 0 505,803 other collateral 17 0 Liabilities under leases secured by transfer of movable assets 87 87 transfer of inventories 0 25 assignment of receivables 1,978 0 Secured liabilities 9,102 510,678 To secure liabilities to banks amounting to eur 505,803 thousand relating to funds borrowed for the acquisition of nop World, participations in companies of nop World were transferred as collateral to a security agent. In addition to the collateralization of liabilities to banks, the GfK Group has undertaken to meet certain covenants as part of a syndicated credit facility. The key indicators measure net indebtedness in relation to ebitda as well as interest expenses in relation to ebitda. Both covenants were met by the GfK Group as of December 31, 2005. 22. Short-term provisions The movement in short-term provisions during the year under review is shown in the table below. Personnel Potential contractual losses Authorities and insurance companies Sales Sundry Total As of 01.01.2005 2,918 2,605 266 1,586 7,375 Currency effects 54 45 15 6 51 171 Change in scope of consolidation 752 12 72 836 Additions/ transfers 1,247 1,338 535 546 3,666 Utilized 1,619 752 1,463 211 1,049 5,094 Release 5 293 11 5 314 Reclassifications 455 974 27 30 1,372 As of 31.12.2005 3,050 1,019 2,214 558 1,171 8,012 The short-term personnel provisions comprise commitments relating to employees leaving and from provisions for anniversary expenses as well as on other commitments to employees. The short-term provisions for authorities and insurance companies encompass mainly tax risks and commitments to social security agencies. FINANCIAL STATEMENTS Sundry other short-term provisions mainly comprise commitments to suppliers and risks of litigation. GfK_125

Notes to the consolidated balance sheet 23. Trade payables Trade payables break down as shown in the table below. 31.12.2004 31.12.2005 Trade payables owed to third parties 28,801 82,276 owed to affiliated companies 1,188 403 owed to associated companies 427 241 owed to other participations 29 0 Trade payables 30,445 82,920 24. Other short-term liabilities and deferred items The breakdown of the other short-term liabilities and deferred items is shown in the table below. 31.12.2004 31.12.2005 Accounts payable to employees 36,176 58,237 Short-term liabilities from income taxes 19,377 29,675 Outstanding invoices from suppliers 3,556 25,153 Liabilities from other taxes 8,414 22,450 Other operating liabilities 8,503 17,484 Non-operating liabilities 3,379 9,761 Interest owed 664 3,766 Liabilities arising from special contracts 6,331 1,700 Other accounts payable to related parties 194 693 Other accounts payable to affiliated companies 204 382 Other accounts payable to associated companies 79 79 Sundry liabilities 166 1,040 Other short-term liabilities and deferred items 87,043 170,420 25. Notes to the consolidated cash flow statement The cash flow statement is presented at the front of these notes. It shows the changes in the GfK Group balance sheet item liquid funds in 2005. In accordance with ias 7, a distinction is made between cash flows from operating activity and from investing and financing activity. The funding sources covered in the cash flow statement comprise liquid funds. These encompass cash in hand, cheques, cash equivalents and fixed-term deposits where they are available within three months. The cash flow from operating activity amounted to eur 128,929 thousand (2004: eur 92,105 thousand). It was used in full for investments which totaled eur 681,942 thousand (2004: eur 84,626 thousand). Of this eur 643,489 thousand (2004: eur 59,136 thousand) related to the acquisition of affiliated companies and other business units. The main portion related to the acquisition of nop World. To finance this investment, funds were raised so that the cash flow from financing activity was significantly positive at eur 550,254 thousand (2004: cash outflow of eur 13,999 thousand). Dividends totaling eur 17,150 thousand (2004: eur 13,156 thousand) were paid to shareholders of GfK ag and to minority shareholders in subsidiaries. The liquid funds in the balance sheet rose by eur 30,902 thousand (2004: down by eur 4,544 thousand). During the year under review, interest totaling eur 1,752 thousand (2004: eur 1,612 thousand) was received and interest totaling eur 20,950 thousand (2004: eur 4,960 thousand) was paid. Interest received is included in cash inflows/outflows from investing activity whilst interest paid is allocated to financing activity. Tax on income and earnings in financial year 2005 resulted overall in a cash outflow of eur 32,950 thousand (2004: eur 22,857 thousand). Short-term liabilities against employees mainly comprise liabilities for the payment of bonuses (eur 22,962 thousand), holiday and flexitime claims (eur 13,384 thousand), social security (eur 9,582 thousand) and wages and salaries (eur 4,341 thousand). Other liabilities from operating business mainly comprise amounts owed to clients (eur 3,974 thousand), to interviewers (eur 3,829 thousand) and to households and respondents (eur 2,980 thousand). This item also includes liabilities arising from projects amounting to eur 2,993 thousand. Liabilities from non-operating business mainly include rent (eur 3,270 thousand), external costs associated with the financial statements and legal and consultancy costs (eur 3,075 thousand), outstanding invoices from non-operating business (eur 1,218 thousand) and liabilities to authorities (eur 1,102 thousand). Liabilities arising from special contracts mainly comprise liabilities from share and asset deals (eur 1,182 thousand) and commission (eur 423 thousand). The Group received payments totaling eur 1,497 thousand (2004: eur 0 thousand) from the disposal or liquidation of subsidiaries. This referred to GfK Belgium s.a. in Belgium and mmxi Switzerland GmbH in Switzerland. Funds acquired through the purchase of subsidiaries amount to eur 7,071 thousand (2004: eur 641 thousand). 26. Related parties Related parties are persons or groups which could be influenced by the GfK Group or could have an influence on the GfK Group. On the basis of loans to GfK Group companies, there were liabilities to The npd Group, Inc., Port Washington, New York, usa, a cooperation partner of the GfK Group, amounting to eur 433 thousand as at the reporting date. This figure includes a loan obligation of eur 385 thousand with a remaining term of more than one year. In the reporting year, interest on loans totaled eur 24 thousand. As at the reporting date there was also compensation obligation towards The npd Group of eur 588 thousand. Total expenses for compensation obligations amounted to eur 746 thousand. FINANCIAL STATEMENTS 126_GfK GfK_126

There were mainly loan obligations amounting to eur 4,130 thousand due to GfK-nürnberg, Gesellschaft für Konsum-, Markt- und Absatzforschung e.v., Berlin, the majority owner of GfK ag. The corresponding interest expenses amounted to eur 83 thousand. Sales of eur 1,154 thousand were achieved in 2005 with GfK-nürnberg, Gesellschaft für Konsum-, Markt- und Absatzforschung e.v. As of December 31, 2005, trade receivables totaled eur 238 thousand. Unless stated otherwise, amounts owed to and by related parties have a remaining term of less than one year. Receivables, liabilities, income and expenses with non-consolidated affiliated companies, associated companies and with other participations of the GfK Group are specified in the notes under the respective item. 27. Contingent liabilities and other financial commitments The contingent liabilities and other financial commitments that are not carried as liabilities in the consolidated balance sheet are reported at nominal values and break down as shown in the following table: 31.12.2004 31.12.2005 Commitments arising from maintenance, service and license agreements 6,738 1,522 guarantees and sureties 131 2,158 order commitments 2,574 1,816 As of December 31, 2005, liabilities from maintenance, service and license agreements, guarantees and sureties as well as order commitments break down according to maturity as shown in the following table. In the years 2006 to 2011, purchase price payment obligations for additional shares and purchase price adjustments of eur 33.203 thousand (2004: eur 66,326 thousand) will result from purchase contracts concluded in connection with the acquisition of participations. bwv Holding ag, St. Gallen, Switzerland, an affiliated, nonconsolidated company in the GfK Group, sold holdings in two Swiss and one Austrian joint stock company by a contract dated July 28, 2004. GfK ag has assumed a purchase price payment obligation of up to eur 5,464 thousand (chf 8,500 thousand) to cover acquisition claims arising from contractual infringements. From July 28, 2009 the guarantee drops to eur 4,822 thousand (chf 7,500 thousand) and ends by December 31, 2014 at the latest. The future commitments arising from lease agreements are described in the section on leases under fixed assets. 28. Financial instruments and derivatives The risk of default linked to the positive fair values of the derivatives is estimated to be low as transactions are only concluded with renowned German and foreign banks with a first rate credit-standing. Furthermore, the default risk is reduced by spreading the transactions across several banks. The maximum default risk of the GfK Group amounts essentially to the carrying value of all financial assets. The global activities of the GfK Group and the large number of customers, which include many renowned major companies, also reduce the concentration of the default risk. The carrying amount and fair value of the derivative financial instruments of the GfK Group are shown in the table below. 31.12.2004 31.12.2005 < 1 year > 1 year Commitments arising from maintenance, service and license agreements 163 1,359 guarantees and sureties 0 2,158 order commitments 1,014 802 In addition, there are the following contingent liabilities and financial commitments: GfK Aktiengesellschaft has given a guarantee vis-à-vis The npd Group Inc., Port Washington, New York, usa, corresponding to its participation in npd Intelect l.l.c., Port Washington, New York, usa, held since January 1, 2001 via GfK Holding, Inc., Wilmington, usa, to the effect that it assumes 25% of the liability for the contractual fulfillment of any commitments that may arise for The npd Group, Inc. from the credit guarantee issued to a bank. This credit guarantee was given by The npd Group, Inc. vis-à-vis the bank in favor of npd Intelect, l.l.c., to secure a loan for usd 8,950 thousand. The loan commitment as at December 31, 2005 amounts to eur 882 thousand (usd 1,044 thousand) and has a remaining term of more than a year. Carrying amount Fair value Carrying amount Fair value Assets Currency hedging contracts 33 33 4 4 Interest rate hedging contracts 2 2 6,168 6,168 Liabilities Currency hedging contracts 199 199 25 25 Interest rate hedging contracts 254 254 70 70 The carrying values of the primary financial instruments correspond to the fair values. The derivative financial instruments are valued on a marking-tomarket basis in accordance with the market conditions as at the reporting date. In addition, the Group s own calculations are checked for plausibility by the market assessments provided by the banks. As of December 31, 2005, the GfK Group s portfolio included currency hedging contracts to hedge against the Hungarian forint and British pound. The nominal amount of the currency hedging contracts totaled eur 7,173 thousand, whereby all contracts have a residual term of less than one year. The currency hedging transactions have a negative fair value of eur 25 thousand as of the reporting date. FINANCIAL STATEMENTS GfK_127

Segment reporting In addition, as of the end of the financial year, the GfK Group had a combined interest rate and currency swap with a nominal volume of eur 5,667 thousand. Of this amount, eur 4,767 thousand has a residual term of over one year. The fair value amounts to eur 4 thousand. As of the year-end, the GfK Group also held interest rate hedging contracts in a total nominal amount of eur 441,982 thousand and a positive attributable fair value of eur 6,098 thousand. Of this, interest rate swaps totaling a nominal amount of eur 436,097 thousand were classified as cash flow hedges. The total interest rate swaps mature in the next five years as shown in the table below. 2006 2,648 2007 97,691 2008 97,376 2009 92,482 2010 151,785 Nominal volume of interest rate swaps 441,982 In the case of derivatives utilized for cash flow hedging, changes in fair value are reported as income and expenses recognized directly in equity. For the year under review, the amount booked under income and expenses recognized directly in equity amounted to eur 6,202 thousand before tax (eur 3,732 thousand after tax). In the Retail and Technology division, GfK provides its clients in the retail and industrial sectors with regular information services gained from ongoing surveys and analyses of sales from electronic and technical consumer goods in the retail industry in over 60 countries in the world. In the Consumer Tracking division, GfK provides its clients with regular information services on consumer goods and services based on continuous surveys and analyses of consumer buying decisions and habits in 26 European countries. In the Media division, GfK provides clients in over 20 European countries and in the usa with information services based on continuous studies as well as custom research surveys on the intensity and nature of media usage and media offerings as well as media acceptance. In the HealthCare division, GfK provides its clients with information and advisory services for the special pharmaceuticals and healthcare markets in all countries in which the GfK network is present. These divisions are complemented by Other which comprises, in particular, the head office services of GfK for its subsidiaries and participations as well as its partners. In the GfK Group, the internal control and reporting are largely based on the same accounting and valuation methods as the consolidated financial statements. To hedge net investments in foreign subsidiaries, the GfK Group used the hedging instrument, net investment hedge. In the year under review, effective changes in value of a loan in us dollars, which was concluded as part of the acquisition of nop World, as well as existing us dollar loan for the financing of GfK arbor, llc and GfK v2, llc amounting to eur 6,223 thousand before tax (eur 3,745 thousand after tax) was reported in income and expenses recognized directly in equity. Gains or losses from derivative financial instruments which are not reported as part of the hedge accounting are posted in other financial income or expenses. In total, the income from these financial instruments amounted to eur 369 thousand, while expenses amounted to eur 36 thousand. 29. Segment reporting The primary classification of the GfK Group into segments is based on the organization of the divisions corresponding to the products and services offered. The secondary classification is by region. The GfK Group provides services in the segments Custom Research, Retail and Technology, Consumer Tracking, Media, HealthCare as well as in Other. In the Custom Research division, GfK and its around 50 subsidiaries in more than 30 countries provides its clients across the world with information services for their operating and strategic decisions relating to all areas of the marketing mix. The Group measures the success of its segments by reference to the adjusted operating income. The adjusted operating income of a segment is determined on the basis of the operating income net of the following income and expenses: integration costs linked to company acquisitions, amortization on disclosed hidden reserves from purchase price allocation, personnel expenses from sharebased payments and long-term incentives, other operating income and the remaining other operating expenses. However, according to ifrs, the operating income must be presented by segment. In the following table, the column marked Reconciliation shows those items which cannot be allocated to the individual segments. These mainly include central functions such as administrative and financial departments at the Group Head Office. Assets, liabilities, income and expenses due to the nature of which no definite allocation to segments is possible are also shown in the Transition column. Intersegment sales are covered exclusively by the area of Other. Their elimination is also reported in the Reconciliation column. In principle, internal Group transactions are recorded at the same conditions as for third parties. Information on segments for financial years 2004 and 2005 is shown in the two tables below. FINANCIAL STATEMENTS 128_GfK GfK_128

Custom Research Retail and Technology Consumer Tracking Media 2004 2005 2004 2005 2004 2005 2004 2005 Sales to third parties 249,432 416,444 187,001 209,618 94,405 100,334 62,237 96,150 Internal sales 0 0 0 0 0 0 0 0 Operating income 16,338 14,481 47,237 52,504 5,845 3,823 8,083 14,519 Assets 176,390 650,465 98,957 110,652 32,822 42,370 61,432 271,225 Liabilities 74,658 186,886 53,714 62,389 32,334 39,030 16,575 79,629 Asset additions 46,862 470,238 17,271 20,544 5,451 10,280 3,900 82,151 Scheduled amortization/depreciation 6,144 11,668 5,053 5,778 2,394 3,068 2,586 7,141 Impairment 0 4,194 65 0 0 0 0 611 Material non-cash expenses 324 6,764 242 3,411 123 1,636 80 1,555 Income from associates 271 235 2,007 2,539 0 0 186 16 Investments in associates 7,042 5,372 2,154 3,440 0 0 245 94 HealthCare Other Reconciliation Group 2004 2005 2004 2005 2004 2005 2004 2005 Sales to third parties 68,094 107,267 7,902 7,522 0 0 669,071 937,335 Internal sales 0 0 18,517 22,083 18,517 22,083 0 0 Operating income 6,089 4,846 5,983 9,500 0 0 77,609 80,673 Assets 68,523 215,656 32,817 30,969 92,281 174,415 563,222 1,495,752 Liabilities 16,343 41,412 12,594 13,378 100,254 646,471 306,472 1,069,195 Asset additions 14,542 69,257 351 130,228 0 0 88,377 782,698 Scheduled amortization/depreciation 1,775 2,774 6,418 5,849 0 0 24,370 36,278 Impairment 1,413 3,514 0 0 0 0 1,478 8,319 Material non-cash expenses 89 1,734 10 123 0 0 868 15,223 Income from associates 2,309 258 240 134 0 0 4,533 3,182 Investments in associates 2,459 2,059 520 523 0 0 12,420 11,488 Segment assets include all capitalized assets which can be assigned to segments. These mainly involve tangible and intangible assets and trade receivables. Assets which cannot be assigned mainly include liquid funds, securities and tax amounts receivable. Segment liabilities mainly comprise trade payables, liabilities on orders in progress, provisions and other liabilities. Financial and tax liabilities are not split into segments. Segment information by region for financial years 2004 and 2005 is shown in the table below. Sales to third parties Assets Additions to assets 2004 2005 2004 2005 2004 2005 Germany 236,337 253,599 404,422 867,418 10,143 20,493 Northern Europe 55,581 127,198 7,561 179,257 15,014 236,405 Western and Southern Europe 215,720 257,489 107,658 46,863 27,411 136,771 Central and Eastern Europe 40,153 52,663 15,954 23,446 2,009 5,916 America 82,026 206,995 12,986 364,206 31,771 380,369 Asia and the Pacific 39,254 39,391 14,641 14,562 2,017 2,739 Group 669,071 937,335 563,222 1,495,752 88,365 782,693 FINANCIAL STATEMENTS GfK_129

Notes to the transition from us gaap to ifrs During the reporting year, as in the prior year, none of the segments recorded sales with any single client exceeding 10 % of consolidated sales. 30. Pro forma statements in accordance with ifrs 3 Due to company acquisitions, the prior year s figures cannot be compared directly with the figures for the consolidated financial statements as at December 31, 2005. To facilitate a comparison, the influences resulting from changes are eliminated in the following pro forma statements in accordance with ifrs 3. The pro forma statement in the table below shows sales and the consolidated total income for 2005 on the assumption that all significant acquisitions concerning affiliated companies which took place during the past financial year had already taken place on January 1, 2005. In the pro forma statement, the following transactions are taken into account: First-time consolidation of nop World (see note on Acquisition of nop World ) 33. Notes to the transition from us gaap to ifrs The consolidated financial statements for financial year 2005 are the first GfK Group financial statements to be prepared according to the International Financial Reporting Standards (ifrs). The GfK Group previously reported according to us gaap. The principles of ifrs have been applied to the financial statements as of December 31, 2005 and the comparative information as of December 31, 2004 as well as to the opening balance sheet as of January 1, 2004 (date of conversion). The following overviews show a reconciliation of the total equity and net income for the period at the date of conversion to ifrs as applicable in the European Union and at the end of the last financial period reported according to us gaap. The first two tables show the reconciliation of the balance sheet while the third table shows the reconciliation of net income for the period. First-time consolidation of GfK Research Dynamics, Inc., Mississauga, Canada. First-time consolidation of the Adimark Group comprising Adimark s.a., Adimark Investigaciones de Mercado Ltda. and Collect Investigaciones de Mercado s.a., all registered in Providencia, Santiago, Chile. 2005 Deviation Actual Pro forma Absolute Percentage Sales 937,335 1,057,526 120,191 12.8 Total consolidated income 67,517 61,964 5,553 8.2 31. Pending litigation and claims for compensation Neither GfK ag nor any of its subsidiaries were involved in any significant legal disputes as at December 31, 2005. 32. Events after the balance sheet date In its meeting on February 21, 2006 the Supervisory Board extended the contract of Management Board member Petra Heinlein by 5 years. In April 2006, GfK signed a contract with agf on the gradual switch of the tv audience panel to a new technology from 2007 onwards. The additional agreement to the ongoing contract for tv audience research runs from 2007 to 2011. As with the existing contract, the agreement has an extension option to 2013. FINANCIAL STATEMENTS 130_GfK GfK_130

Assets US GAAP Reconciliation IFRS US GAAP Reconciliation IFRS 01.01.2004 31.12.2004 Goodwill 161,773 88 161,685 b), e), l) 216,480 26,327 190,153 Other intangible assets c), g), h) 27,363 43 27,406 a), c), g), h), l) 29,160 25,445 54,605 Tangible assets g), h) 66,095 87 66,008 a), g), h) 64,621 403 65,024 Investments in associates 13,689 0 13,689 e), g) 12,621 201 12,420 Other investments g) 16,071 72 15,999 g) 11,321 3 11,324 Deferred tax assets h) 8,327 2,216 6,111 h) 7,962 2,123 10,085 Other non-current assets and deferred items f), g), h) 3,002 290 3,292 f), g), h) 3,803 185 3,988 Total non-current assets 296,320 2,130 294,190 345,968 1,631 347,599 Inventories 1,406 0 1,406 1,172 0 1,172 Trade receivables g) 125,487 357 125,844 g) 138,128 48 138,176 Securities and fixed-term deposits 7,538 0 7,538 6,488 0 6,488 Liquid funds 53,241 0 53,241 48,697 0 48,697 Other current assets and deferred items g), h) 18,011 171 17,840 g), h) 19,842 1,248 21,090 Total current assets 205,683 186 205,869 214,327 1,296 215,623 Total assets 502,003 1,944 500,059 560,295 2,927 563,222 Equity and liabilities US GAAP Reconciliation IFRS US GAAP Reconciliation IFRS 01.01.2004 31.12.2004 Subscribed capital 66,872 0 66,872 133,734 0 133,734 Capital reserve m) 87,098 846 87,944 m) 89,196 2,804 92,000 Retained earnings c), d), f), g), h), m), n), o), p) 53,062 3,211 49,851 a), b), c), d), f), g), h), j), k), l), m), o) 33,730 14,243 19,487 Income and expense recognized directly in equity q) 2,887 2,990 103 e), h), k) 8,221 840 7,381 Equity attributable to equity holders of the parent 204,145 625 204,770 248,439 10,599 237,840 Minority interests c), d), f), g), o), p) 25,488 6,472 19,016 c), d), e), f), g), o) 16,347 2,563 18,910 Total equity 229,633 5,847 223,786 264,786 8,036 256,750 Long-term provisions f), h), n) 23,987 8,499 32,486 f), h) 26,809 7,002 33,811 Long-term interest-bearing financial liabilities g) 44,485 39 44,524 g), h) 50,960 39 50,999 Deferred tax liabilities c), d), e), f), g), h), j), n) 9,088 2,993 6,095 a), c), d), e), f), g), h), j), l) 13,759 387 13,372 Other long-term liabilities and deferred items g), h) 171 609 780 h), l) 997 243 1,240 Non-current liabilities 77,731 6,154 83,885 92,525 6,897 99,422 Short-term provisions h), n) 50,755 44,064 6,691 h) 58,140 50,765 7,375 Short-term interest-bearing financial liabilities f), g) 22,122 54 22,176 g), h) 15,893 8 15,901 Trade payables g), p) 28,156 88 28,244 30,444 1 30,445 Liabilities on orders in progress 62,677 0 62,677 66,286 0 66,286 Other short-term liabilities and deferred items g), h) 30,929 41,671 72,600 h) 32,221 54,822 87,043 FINANCIAL STATEMENTS Current liabilities 194,639 2,251 192,388 202,984 4,066 207,050 Total liabilities 272,370 3,903 276,273 295,509 10,963 306,472 Total equity and liabilities 502,003 1,944 500,059 560,295 2,927 563,222 GfK_131

Notes to the transition from us gaap to ifrs US GAAP Reconciliation IFRS 2004 Sales b), g) 671,735 2,664 669,071 Costs of sales a), b), c), f), g), i), k), l) 447,199 4,155 451,354 Gross income from sales 224,536 6,819 217,717 Selling and general administrative expenses b), c), f), g), i), m), n) 138,447 2,575 141,022 Other operating income a), g), i), n), p) 9,078 1,513 10,591 Other operating expenses c), g), i), l), n), p) 8,300 1,377 9,677 Operating income 86,867 9,258 77,609 Income from associates 4,528 5 4,533 Other income from participations g) 253 69 184 ebit 91,142 9,184 81,958 Financial income 4,107 1 4,106 Financial expenses g) 4,705 5 4,700 Income from ongoing business activity 90,544 9,180 81,364 Tax on income from ongoing business activity a), b), c), f), g), j), k), l), p) 31,080 2,851 28,229 Net extraordinary income a) 4,038 4,038 0 Consolidated total income 63,502 10,367 53,135 Attributable to equity holders of the parent 52,592 10,247 42,345 Attributable to minority interests a), c), f), g), l), o), p) 10,910 120 10,790 Consolidated total income 63,502 10,367 53,135 FINANCIAL STATEMENTS 132_GfK GfK_132

Notes on the main changes from us gaap in consolidation, valuation and accounting principles a) Consolidation of capital and definition of equity Differences arising on the liabilities side of the balance sheet must be eliminated immediately and charged to the income statement in accordance with ifrs 3. There is no provision for breaking down assets as under us gaap. The profit-sharing certificates without voting rights of iha-gfk ag, Hergiswil, Switzerland are classified as equity according to us gaap whereas according to ifrs they are classified as liabilities. According to us gaap, therefore, the acquisition of participation certificates by GfK ag triggered a capital consolidation process which led to the valuation reduction of assets and to the recognition of the aforementioned difference in the income statement. However, under ifrs this is not a process which triggers consolidation of capital. Due to the differences mentioned, an adjustment of eur 1,565 thousand was carried out in tangible and other intangible assets under ifrs as of December 31, 2004. The impact on income for the 2004 period was eur 4,038 thousand. Minority interest in consolidated total income was down by eur 361 thousand under ifrs. b) Date of first-time consolidation According to ifrs, the date of acquisition and therefore the date of first-time consolidation is the point at which financial control is gained over the acquired asset and business activity. The legal date of transfer is irrelevant. The simplification rule applied under us gaap, according to which the date of acquisition may be shifted forward to the end of the prior reporting period subject to the fulfillment of certain preconditions, does not exist under ifrs 3. An adjustment of the goodwill in accordance with ifrs of eur 536 thousand was therefore made on December 31, 2004. Consolidated total income in 2004 fell by eur 584 thousand in comparison to us gaap. c) Capitalization of development costs (panel set-up costs) as internally generated intangible assets; additionally, capitalization of overheads under ifrs Under us gaap internally generated intangible assets may not be capitalized, unless they involve software. Under ias 38, development costs must be capitalized as an intangible asset where it is technically possible and there is an intention to complete and utilize the asset. Evidence must be produced to support a probable, future utilization of the intangible asset and it must be possible to reliably determine and attribute development costs. Under ifrs, unlike us gaap, directly attributable overheads are included in manufacturing costs. This means that under ifrs, directly attributable overheads are additionally capitalized. Owing to the additional capitalization, intangible assets as of December 31, 2004 increased by eur 2,110 thousand (January 1, 2004: eur 900 thousand); consolidated total income for 2004 rose by eur 387 thousand under ifrs. e) Goodwill According to ias 21, goodwill and disclosed hidden reserves must always be carried in the functional currency of the foreign business operation. Under us gaap, these were carried in the Group currency of the euro. Conversion at the exchange rate as of the reporting date produces currency effects which have been recognized directly in equity (December 31, 2004: eur 3,187 thousand). f) Pension provisions and provisions for partial retirement Changes in pension obligations between us gaap and ifrs result from the actuarial opinions available for these. Under ifrs, provisions for amounts in excess of current remuneration as part of partial retirement are created in full at present value as soon as the obligation exists. By contrast, under us gaap, these amounts accrued at the same rates over the remaining period of service from the date that the commitment arose. This resulted in differences in the provisions between us gaap and ifrs of amounting to eur 5,968 thousand as of December 31, 2004 (January 1, 2004: eur 5,455 thousand). Consolidated total income for 2004 therefore fell by eur 1.555 thousand. g) Inflation-linked revaluation The differing methods of recording effects from inflation-linked valuation resulted in differences between us gaap and ifrs as of December 31, 2004 in various balance sheet items, each of a maximum amount of eur 154 thousand (January 1, 2004: eur 449 thousand). The impact on income for 2004 amounts to eur -333 thousand. h) Reclassifications on the balance sheet Under us gaap, provisions totaling eur 49,728 thousand (January 1, 2004: eur 41,669 thousand) were shown on the balance sheet as of December 31, 2004 which, under ifrs, qualify as other liabilities. Prepaid expenses shown under us gaap amounting to eur 7,406 thousand (January 1, 2004: eur 7,816 thousand) as of December 31, 2004 are included under other assets according to ifrs. Under ifrs, advance payments made on tangible and other intangible assets of eur 2,606 thousand (January 1, 2004: eur 1,192 thousand) as of December 31, 2004 have been shown as other current assets. i) Reclassifications on the income statement Under us gaap, additions and releases from valuation allowances on all types of receivables in the income statement were shown under selling and general administrative expenses. Under ifrs, only those on trade receivables are recorded under this item; the changes in valuation allowances on other receivables are shown under other operating income or expenses (2004: respectively eur 39 thousand and eur 572 thousand). FINANCIAL STATEMENTS d) Deferred tax on intercompany result Under us gaap, deferred tax on intercompany result from intra- Group disposals of assets must be calculated at the tax rate applicable to the seller. By contrast, under ifrs deferred tax is calculated at the tax rate applicable to the purchaser. This led to a discrepancy in deferred tax liabilities between us gaap and ifrs of eur 113 thousand as of December 31, 2004 (January 1, 2004: eur 217 thousand). j) Recognition of deferred tax liabilities under ias 12 In 2004, eur 601 thousand (January 1, 2004: eur 533 thousand) was reported as deferred tax liabilities for temporary differences due to undistributed dividends from subsidiaries. Tax expenses for 2004 therefore rose by eur 68 thousand. GfK_133

Supplementary disclosures k) Actuarial gains/losses Under us gaap, actuarial gains/losses from the valuation of pension provisions were reported with impact on the result, where these exceeded specific threshold values. By contrast, according to ias 19, the option exists of recording these gains and losses directly in income and expense recognized directly in equity. The impact on income for 2004 totaled eur 236 thousand. l) Purchase price allocation for company mergers Under ifrs, the amount of intangible assets capitalized as part of company mergers was eur 8,915 more than under us gaap. Owing to a higher level of amortization, the ifrs consolidated total income for 2004 was eur 3,397 thousand lower compared to us gaap. m) Stock options expenses Under us gaap, no expenses were recognized for employee options based on apb 25. By contrast, under ifrs there is an obligation to report expenses for employee options directly as expenses (2004: eur 1,958 thousand) and to record them in the equity (December 31, 2004: eur 2,804 thousand; January 1, 2004: eur 846 thousand). n) Provisions Under ias 37, provisions must be created where the probability of the event occurring is greater than the probability of it not occurring ( more likely than not ; > 50%). By contrast, under us gaap the occurrence of the event had to be approximately 80% probable to warrant the creation of a provision. This resulted in differences in the provisions amounting to eur 641 thousand as of January 1, 2004. Consolidated total income for 2004 therefore rose by eur 572 thousand. o) Negative minority interest According to ifrs, under certain circumstances negative minority interest is not to be shown under minority interest but reported as equity attributable to equity holders of the parent (December 31, 2004: eur 658 thousand; January 1, 2004: eur 1,051 thousand). p) Change in the scope of consolidation In 2004, two companies were deconsolidated retrospectively as of January 1, 2004 under us gaap. They therefore do not come under the scope of consolidation under ifrs from the start. This resulted in differences amounting to eur 1,023 thousand in the balance sheet. The impact on consolidated total income amounted to eur 62 thousand. q) Accumulated exchange differences With the first-time adoption of ifrs, according to ifrs 1, there is the option of not classifying accumulated conversion differences as a separate element of equity (eur 2,984 thousand). The cumulative exchange differences for all foreign operations are deemed to be zero at the date of transition. Reconciliation of the cash flow statement us gaap Reconciliation ifrs 2004 Cash flow from operating activity 92,298 193 92,105 Cash flow from investing activity 83,043 2,075 80,968 Cash flow from financing activity 12,117 1,882 13,999 Changes in liquid funds 2,862 0 2,862 Other changes in liquid funds 1,682 0 1,682 Liquid funds at the beginning of the period 53,241 0 53,241 Liquid funds at the end of the period 48,697 0 48,697 All reconciliation elements in the balance sheet and income statement are also reflected in the cash flow statement. In addition, according to ifrs, the GfK Group reports interest received under cash flow from investing activity and interest paid under cash flow from financing activity. According to us gaap, the balance of interest income/expenses with impact on payments was reported under cash flow from financing activity. In the cash flow statement under us gaap, changes in provisions were treated collectively as an adjustment item to total consolidated income. In the cash flow statement under ifrs, this only applies to long-term provisions whereas short-term provisions have been included in the change in working capital. 34. Supplementary disclosures Auditors service fee In 2005, eur 730 thousand was reported as expenses for the fee for the auditors of GfK ag. The fee covers auditing the financial statements of GfK ag according to the German Commercial Code (hgb), the consolidated reporting package according to ifrs and the consolidated financial statements according to ifrs. The fee also includes the audit of the financial statements of German subsidiaries according to hgb and their ifrs reporting packages. eur 260 thousand were spent on tax advice from the auditor and eur 1,440 thousand on other services by the auditor, particularly relating to the acquisition of nop World. Exemption of a subsidiary from the obligation to prepare financial statements Pursuant to Section 264b of the German Commercial Code (hgb), GfK Marketing Services GmbH & Co. kg, Nuremberg, is exempt from preparing, having audited and publishing financial statements and a management report according to the provisions for joint stock companies as per Section 264ff. Number of staff In the year under review, 6,806 staff (2004: 5,417) staff were employed on average. The annual average number of staff was determined on the basis of full-time employees. The average was calculated using the key dates of March 31, June 30, September 30 and December 31. FINANCIAL STATEMENTS 134_GfK GfK_134

The allocation of staff to segments is shown in the following table. 2004 2005 Custom Research 1,862 2,834 Retail and Technology 1,612 1,813 Consumer Tracking 834 861 Media 330 397 HealthCare 238 352 Other 405 394 5,281 6,651 Managing directors/management Board members 84 98 Trainees 52 57 Full-time employees 5,417 6,806 Total remuneration and shares of the Management Board and Supervisory Board The following information is supplemented by the tables under the headings Remuneration of the Management Board and Remuneration of the Supervisory Board on page 14f. of the Corporate Governance section. The transfer to pension provisions for Management Board members in office totaled eur 3,841 thousand for financial year 2005. The amount of the transfer is due, in part, to the switch to the Dr. Klaus Heubeck mortality tables 2005g. In total, the Management Board holds 389,287 shares and 717,424 options to shares. The Supervisory Board owns 6,689 shares. The members of the Supervisory Board hold no options to shares. Income for the year of major subsidiaries The following table lists the income for the year of major GfK Group companies in accordance with the German Corporate Governance Code. Income for Name and registered office of the company the year fessel-gfk Institut für Marktforschung Ges.m.b.H., Vienna, Austria 1,831 GfK arbor, llc, Media, usa 4,721 GfK Asia Pte Ltd., Singapore, Singapore 2,250 GfK Automotive, llc, Southfield, Michigan, usa 4,187 gfk custom research france sarl, Rueil-Malmaison, France 1,267 GfK Custom Research Inc., Minneapolis, usa 1,183 GfK emer Ad Hoc Research, s.l., Valencia, Spain 1,193 GfK Eurisko S.r.l., Milan, Italy 199 g.f.k. marketing services france sas, Rueil-Malmaison, France 3,528 GfK Marketing Services GmbH & Co. kg, Nuremberg, Germany 10,740 GfK Marketing Services Japan k.k., Tokyo, Japan 1,154 GfK Marketing Services Ltd., West Byfleet/Surrey, uk 3,976 GfK nop Limited, London, uk 1,843 GfK nop, llc, New York, New York, usa 5,377 GfK Panelservices Benelux b.v., Dongen, Netherlands 1,535 GfK u.s. Healthcare Companies lp, East Hanover, New Jersey, usa 2,790 GfK v2, llc, Blue Bell, Pennsylvania, usa 6,174 iha-gfk ag, Hergiswil, Switzerland 29,583 Intomart b.v., Hilversum, Netherlands 1,719 Mediamark Research Inc., New York, New York, usa 6,095 Former members of the management of GfK GmbH, Nuremberg, and of the Management Board of GfK ag received total remuneration of eur 1,056 thousand (2004: eur 1,901 thousand). An amount of eur 10,202 thousand (2004: eur 8,538 thousand) was set aside by GfK ag for pension obligations to former members of the Management Board and Managing Directors. There were no loans or advances to members of the Management Board or Supervisory Board, and no contingent liabilities were incurred for this group of persons. FINANCIAL STATEMENTS GfK_135

Supervisory Board Hajo Riesenbeck Chairman Business consultant Kerstin Döpfert Independent Works Council representative at GfK Aktiengesellschaft, Nuremberg Director at McKinsey & Company, Düsseldorf President of GfK-nürnberg Gesellschaft für Konsum-, Markt- und Absatzforschung e.v., Berlin Sandra Hofstetter (from May 24, 2005) Senior Research Assistant at GfK Aktiengesellschaft, Nuremberg Dr. Arno Mahlert Deputy Chairman Member of the Management Board of Tchibo Holding ag, Hamburg Seats held on other Supervisory Boards and comparable supervisory bodies: Springer Science + Business Media s.a., Luxembourg (Chairman) Saarbrücker Zeitung GmbH, Saarbrücken (Deputy Chairman) Beiersdorf ag, Hamburg Stefan Pfander (from May 24, 2005) Consultant at Wm. Wrigley Jr. Company, Chicago, usa Seats held on other Supervisory Boards and comparable supervisory bodies: International Chewing Gum Ass. (jcga), Brussels, Belgium (Chairman) Sweet Global Network e.v., Munich (Deputy Chairman) Tchibo Holding ag, Hamburg Barry Callebaut ag, Zurich, Switzerland Werner Spinner Dr. Christoph Achenbach Management spokesman for Robert Klingel GmbH & Co. kg, Pforzheim Business consultant Seats held on other Supervisory Boards and comparable supervisory bodies: Jörg Bandt (until May 24, 2005) Scope Data Collection Manager at GfK Aktiengesellschaft, Nuremberg Dalli GmbH, Stollberg (Chairman) Grünenthal GmbH, Aachen (Chairman) csm n.v., Diemen, Netherlands Merz GmbH Holding, Frankfurt/Main Dr. Wolfgang C. Berndt Member of the Board of Directors of the Institute for the Future, Menlo Park, California, usa Seats held on other Supervisory Boards and comparable supervisory bodies: Cadbury Schweppes plc, London, uk Lloyds tsb Bank plc, London, uk Lloyds tsb Group plc, London, uk Dieter Wilbois Independent Works Council representative (Chairman) at GfK Aktiengesellschaft, Nuremberg Peter Zühlsdorff (until May 24, 2005 ordinary member) Honorary Chairman of the Supervisory Board Managing shareholder of dih Deutsche Industrie- Holding GmbH, Frankfurt/Main FINANCIAL STATEMENTS 136_GfK GfK_136

Management Board Professor Dr. Klaus L. Wübbenhorst Chief Executive Officer Responsible for Strategy, Internal Audit, Method and Product Development, Public Affairs and Communications and it-services Seats held on Supervisory Boards and comparable supervisory bodies: bu Holding GmbH & Co. kg, Nuremberg (Deputy Chairman) ergo Versicherungsgruppe ag, Düsseldorf Neckermann Versand ag, Frankfurt/Main Quelle ag, Fürth Declaration on the German Corporate Governance Code The declaration prescribed by Section 161 of the German Stock Corporation Act has been issued by the Management Board and Supervisory Board and made permanently available to shareholders. Release for publication The Management Board of GfK ag released the consolidated financial statements for passing on to the Supervisory Board on April 12, 2006. It is the duty of the Supervisory Board to check the consolidated financial statements and to declare whether it approves the consolidated financial statements. Christian Weller von Ahlefeld (from June 1, 2005) Chief Financial Officer Responsible for Finances, Controlling, Accounting, Personnel and Administration Seats held on Supervisory Boards and comparable supervisory bodies: Nuremberg, April 12, 2006 Professor Dr. Klaus L. Wübbenhorst Brauns Heitmann GmbH & Co. kg, Warburg Petra Heinlein Christian Weller von Ahlefeld Responsible for Custom Research Dr. Gérard Hermet Petra Heinlein Responsible for Retail and Technology Seats held on Supervisory Boards and comparable supervisory bodies: npd Intelect, l.l.c., New York, usa Wilhelm R. Wessels Responsible for Consumer Tracking, Media and HealthCare Seats held on Supervisory Boards and comparable supervisory bodies: Dr. Gérard Hermet Wilhelm R. Wessels FINANCIAL STATEMENTS Research Matters ag, Basel, Switzerland (Deputy Chairman) GfK_137

Shareholdings of the GfK Group As of December 31, 2005 Company name and registered office Share in the capital in % Financial year Equity (eur 000) Affiliated companies (Germany) included in the consolidated financial statements (all details according to hgb commercial balance sheet i) Beyen Marktforschung GmbH, Düsseldorf 100.00 3) 2005 1,884 encodex International GmbH, Nuremberg 95.00 2005 55 enigma GfK Medien- und Marketingforschung GmbH, Wiesbaden 100.00 2005 614 GfK cee Finance GmbH, Nuremberg 100.00 3) 2005 3,351 GfK macon GmbH, Waghäusel 100.00 2005 75 GfK Marketing Services GmbH & Co. kg, Nuremberg 100.00 3) 2005 560 GfK Non-Food Tracking Holding GmbH, Nuremberg 95.00 2005 134,842 GfK North America Holding GmbH, Nuremberg 100.00 2005 160,400 GfK North America Investment GmbH, Nuremberg 100.00 3), 7) 2005 210,652 GfK prisma Institut für Handels-, Stadt- und Regionalforschung GmbH & Co. KG, Hamburg 100.00 2005 405 GfK u.s. Equity GmbH, Nuremberg 100.00 2005 11,512 GfK us Custom Research Holding GmbH, Nuremberg 100.00 2005 11,480 gpi Kommunikationsforschung Gesellschaft für Pharma- Informationssysteme mbh, Nuremberg 100.00 2005 56 media control GfK international GmbH, Baden-Baden 51.00 4) 2005 2,258 Media Markt Analysen GmbH & Co. kg, Frankfurt/Main 100.00 2005 25 Modata GmbH, Berlin 100.00 3) 2005 109 Affiliated companies (abroad) included in the consolidated financial statements (all details according to ifrs commercial balance sheet ii) Adimark Investigaciones de Mercado Ltda., Providencia, Santiago, Chile 99.00 3) 2005 1,739 Adimark s.a., Providencia, Santiago, Chile 50.90 2005 95 Adware Media Solutions b.v., Hilversum, Netherlands 100.00 3) 2005 133 afi Holdings llc, Wilmington, Delaware, usa 100.00 3) 2005 45,587 afi Investments Limited, London, uk 100.00 3) 2005 38,191 asw Delaware llc, Wilmington, Delaware, usa 100.00 3) 2005 5,425 asw Investments, Inc., Wilmington, Delaware, usa 100.00 3) 2005 7,000 audimedia sarl, Issy les Moulineaux, France 100.00 3) 2005 1,331 Audimetrie n.v., Brussels, Belgium 100.00 3) 2005 1,146 Barterstore Limited, London, uk 100.00 3) 2005 40,476 Beyen Corp of Canada Inc., Niagara Falls, Canada 100.00 3) 2005 90 Beyen Corporation of America, Inc., Niagara Falls, usa 100.00 3) 2005 57 Caribou Lake Software, llc, Minneapolis, usa 69.80 3) 2005 1,187 Collect Investigaciones de Mercado s.a., Providencia, Santiago, Chile 100.00 3) 2005 343 Dealtalk Limited, London, uk 100.00 3) 2005 3,882 E. Friedman Marketing Services, Inc., Harrison, New York, usa 100.00 3) 2005 8,972 Eiphos Holding ag, Hergiswil, Switzerland 100.00 3) 2005 5,569 Encodex Japan k.k., Osaka, Japan 63.00 3) 2005 67 fessel-gfk Institut für Marktforschung Ges.m.b.H., Vienna, Austria 94.80 2005 9,101 Financière isl Société Anonyme, Issy les Moulineaux, France 71.90 3) 2005 3,651 g.f.k. marketing services france sas, Rueil-Malmaison, France 100.00 3) 2005 5,012 GfK - Centar za istrazivanje trzista d.o.o., Zagreb, Croatia 100.00 3) 2005 396 FINANCIAL STATEMENTS 1) Profit and loss transfer agreement 2) Details as per commercial balance sheet II 3) Fully indirect shareholding 4) Partially indirect shareholding 5) Details not available 6) Details as per provisional financial statements drawn up under national law 7) Newly established in 2005 8) In liquidation 138_GfK GfK_138

Company name and registered office Share in the capital in % Financial year Equity (eur 000) GfK - memrb Marketing Services Limited, Nicosia, Cyprus 60.00 3) 2005 320 GfK (u.k.) Ltd., West Byfleet/Surrey, uk 100.00 3) 2005 7,242 GfK Animal Healthcare Limited, West Byfleet/Surrey, uk 100.00 2005 9,345 GfK arbor, llc, Media, usa 100.00 3) 2005 53,729 GfK Asia Pte Ltd., Singapore, Singapore 89.50 3) 2005 5,495 GfK Automotive, llc (formerly Allison-Fisher International llc), Southfield, Michigan, usa 100.00 3) 2005 34,280 GfK Belgrade d.o.o., Belgrade, Federal Republic of Yugoslavia 100.00 3) 2005 295 GfK Benelux Marketing Services b.v., Amstelveen, Netherlands 100.00 3) 2005 3,715 GfK bh d.o.o., Sarajevo, Bosnia-Herzegovina 100.00 3) 2005 11 GfK consumer and business information italy S.p.A., Milan, Italy 100.00 3) 2005 11,888 GFK custom research france sarl, Rueil-Malmaison, France 100.00 2005 6,690 GfK Custom Research Inc., Minneapolis, usa 100.00 3) 2005 5,393 GfK Danmark a/s, Frederiksberg, Denmark 87.00 2005 852 GFK emer ad hoc research, s.l., Valencia, Spain 50.10 2005 3,758 GfK Equity Research Inc., Boston, usa 100.00 3). 7) 2005 120 GfK Eurisko S.r.l., Milan, Italy 100.00 3) 2005 14,388 GFK gral-iteo tržne raziskave d.o.o., Ljubljana, Slovenia 100.00 3) 2005 149 GfK Holding, Inc., Wilmington, usa 100.00 3) 2005 151,991 GfK Hungaria Piackutató Kft., Budapest, Hungary 100.00 3) 2005 1,312 GfK Immobilier Société a responsabilité limitée, Rueil-Malmaison, France 100.00 3) 2005 69 GfK Indicator Ltda. (formerly indicator gfk ltda.), São Paulo, Brazil 100.00 3) 2005 957 GfK Malta Holding Limited, Floriana, Malta 100.00 7) 2005 250,814 GfK Malta Services Limited, Floriana, Malta 100.00 3). 7) 2005 179,941 GfK market analysis e.p.e., Athens, Greece 99.50 4) 2005 176 GfK Market Research (Shanghai) Co. Ltd., Shanghai, China 100.00 3) 2005 502 GfK Marketing Services (Malaysia) Sdn. Bhd., Kuala Lumpur, Malaysia 100.00 3) 2005 421 GfK Marketing Services (Thailand) Limited, Bangkok, Thailand 100.00 3) 2005 0 GfK Marketing Services Australia Pty. Ltd., Sydney, Australia 100.00 3) 2005 1,228 GFK marketing services españa, sociedad anonima, Valencia, Spain 50.10 3) 2005 7,936 GfK Marketing Services Hong Kong Limited, Hong Kong, China 89.50 3) 2005 227 GfK Marketing Services Indonesia, pt, Jakarta, Indonesia 100.00 3) 2005 55 GfK Marketing Services Italia S.r.l., Milan, Italy 100.00 3) 2005 3,355 GfK Marketing Services Japan k.k., Tokyo, Japan 84.20 3) 2005 6,297 GfK Marketing Services Korea Limited, Seoul, Korea 100.00 3) 2005 619 GfK Marketing Services Ltd., Hong Kong, China 100.00 3) 2005 1,460 GfK Marketing Services Ltd., West Byfleet/Surrey, uk 100.00 3) 2005 7,443 GfK Marketing Services South Africa (Proprietary), Sandton, South Africa 100.00 3) 2005 58 GfK Martin Hamblin Inc., Hartford, Connecticut, usa 100.00 2005 479 GfK Martin Hamblin Limited, London, uk 100.00 2005 0 GfK Media Ltd., London, uk 100.00 2005 701 GfK Media Research Services GmbH, Vienna, Austria 100.00 3) 2005 984 GfK nop Field Interviewing Services Limited, London, uk 100.00 3) 2005 4,261 GfK nop Limited, London, uk 100.00 3) 2005 46,525 GfK nop Mystery Shopping Services Limited, London, uk 100.00 3) 2005 1,067 GfK nop Services Limited, London, uk 100.00 3) 2005 1,554 GfK nop Telephone Interviewing Services Limited, London, uk 100.00 3) 2005 5,384 GfK nop u.k. Holding Limited, London, uk 100.00 3) 2005 45,728 GfK nop, llc (formerly Roperasw llc), New York, New York, usa 100.00 3) 2005 30,138 GfK Norge a/s, Oslo, Norway 100.00 2005 404 GfK Panelservices Benelux b.v., Dongen, Netherlands 100.00 3) 2005 7,459 FINANCIAL STATEMENTS 1) Profit and loss transfer agreement 2) Details as per commercial balance sheet II 3) Fully indirect shareholding 4) Partially indirect shareholding 5) Details not available 6) Details as per provisional financial statements drawn up under national law 7) Newly established in 2005 8) In liquidation GfK_139

Shareholdings of the GfK Group Company name and registered office Share in the capital in % Financial year Equity (eur 000) GfK Panelservices Benelux Holding b.v., Dongen, Netherlands 100.00 2005 6,427 GfK Polonia Sp. z o.o., Warsaw, Poland 100.00 3) 2005 2,435 GfK portugal Marketing Services, Limitada, Lisbon, Portugal 80.00 3) 2005 1,922 GfK Research Dynamics, Inc., Mississauga, Canada 51.00 2005 843 GfK Romania-Institut de Cercetare de Piata Srl, Bucharest, Romania 100.00 3) 2005 340 GfK Slovakia Inštitút pre prieskum trhu s r.o., Bratislava, Republic of Slovakia 100.00 3) 2005 532 GfK Sverige Aktiebolag, Lund, Sweden 100.00 2005 1,395 GfK u.s. Healthcare Companies lp, East Hanover, New Jersey, usa 100.00 3) 2005 1,722 GfK us Holdings, Inc. (formerly GfK Americas, Inc., formerly nop World Inc.), Wilmington, Delaware, usa 100.00 3) 2005 83,634 GfK v2, llc, Blue Bell, Pennsylvania, usa 100.00 3) 2005 7,115 GfK-Bulgaria, Institut für Marktforschung EGmbH, Sofia, Bulgaria 100.00 3) 2005 243 GfK-Memrb Marketing Services fz-llc, Dubai, United Arab Emirates 100.00 3) 2005 495 GfK-Praha, spol s r.o., Prague, Czech Republic 100.00 3) 2005 1,830 GfK-rus Gesellschaft mbh, Moscow, Russia 100.00 3) 2005 1,244 GfK-Ukrainian Surveys & Market Research (usm), Kiev, Ukraine 100.00 3) 2005 1,505 ifr Europe Ltd., London, uk 93.01 3) 2005 786 ifr France s.a., Viroflay, France 100.00 3) 2005 1,180 ifr Italia S.r.L., Milan, Italy 93.01 3) 2005 642 ifr Marketing España s.a., Madrid, Spain 93.00 3) 2005 378 iha Italia S.p.A., Milan, Italy 100.00 3) 2005 11,634 iha-gfk ag, Hergiswil, Switzerland 100.00 2005 45,332 incoma Research, s.r.o., Prague, Czech Republic 75.00 3) 2005 284 indicorp participações s.a., São Paulo, Brazil 95.00 2005 1,469 Informark Pty. Ltd., Braddon, Australia 100.00 3) 2005 240 Institut de Recherche d Informations statistiques (irdis) sarl, Montigny le Bretonneux, France 95.00 3) 2005 84 Institut de Sondage Lavialle (isl) s.a., Issy les Moulineaux, France 99.94 3) 2005 2,814 Institut Français de Recherche-i.f.r. s.a., Viroflay, France 75.79 2005 11,928 Interactive Research Limited, London, uk 100.00 3) 2005 823 intercampus-recolha, tratamento e distribuição de informação, Limitada, Lisbon, Portugal 50.10 3) 2005 576 Intomart b.v., Hilversum, Netherlands 100.00 3) 2005 6,244 Intomart GfK Belgium n.v., Brussels, Belgium 100.00 3) 2005 2,241 Intomart GfK Group b.v., Hilversum, Netherlands 100.00 2005 2,897 Liechti ag, Kriegstetten, Switzerland 100.00 3) 2005 3,025 m2a s.a., Saint Aubin, France 100.00 2005 103 Mediamark Research Inc., New York, New York, usa 100.00 3) 2005 33,544 metris-métodos de recolha e investigação social, lda, Lisbon, Portugal 51.00 3) 2005 701 mil Research Group Limited, London, uk 100.00 3) 2005 717 mmo Media-Market-Observer GmbH & Co kg, Vienna, Austria 54.55 3) 2005 687 Modata ag, Hergiswil, Switzerland 100.00 3) 2005 618 National Opinion Polls Limited, London, uk 100.00 3) 2005 3,527 nop automotive, inc., Farmington Hills, Michigan, usa 100.00 3) 2005 133 nop World Limited, London, uk 100.00 3) 2005 49,174 Numbers (Holdings) Limited, London, uk 100.00 3) 2005 333 Numbers Data Processing Limited, London, uk 100.00 3) 2005 323 Numbers Market Research Limited, London, uk 100.00 3) 2005 523 Orange Interactive Research ab, Stockholm, Sweden 100.00 3) 2005 480 Oz Toys Marketing Services Pty. Ltd., Sydney, Australia 51.00 3) 2005 381 Procon GfK Arastirma Hizmetleri a.s., Istanbul, Turkey 100.00 2005 1,975 FINANCIAL STATEMENTS 1) Profit and loss transfer agreement 2) Details as per commercial balance sheet II 3) Fully indirect shareholding 4) Partially indirect shareholding 5) Details not available 6) Details as per provisional financial statements drawn up under national law 7) Newly established in 2005 8) In liquidation 140_GfK GfK_140

Company name and registered office Share in the capital in % Financial year Equity (eur 000) Risposta Srl, Milan, Italy 100.00 3) 2005 179 Roper Starch Worldwide, llc, Harrison, New York, usa 100.00 3) 2005 14 Roperasw Europe Limited, Leatherhead/Surrey, uk 100.00 3) 2005 4,759 Significant GfK bvba, Heverlee, Belgium 100.00 3) 2005 1,651 Strategic Marketing Asia, Ltd., Bala Cynwyd, Pennsylvania, usa 100.00 3) 2005 704 Strateji GfK Research Services A.S., Istanbul, Turkey 99.60 3) 2005 27 Telecontrol ag, Hergiswil, Switzerland 100.00 3) 2005 2,005 Affiliated companies (Germany), not included in the consolidated financial statements (all details according to hgb commercial balance sheet i) dm-plus Direktmarketing GmbH, Nuremberg 100.00 3) 2005 58 GfK Data Services GmbH, Nuremberg 100.00 2005 28 GfK Dritte Vermögensverwaltung GmbH, Nuremberg 100.00 7) 2005 25 GfK Fernsehforschung GmbH, Nuremberg 100.00 2005 28 GfK Marketing Services Verwaltungs-GmbH, Nuremberg 100.00 3) 2005 28 GfK Marktforschung GmbH, Nuremberg 100.00 2005 28 GfK Panel Services Deutschland GmbH, Nuremberg 100.00 2005 28 GfK prisma Verwaltungs-GmbH, Hamburg 100.00 2005 34 Media Markt Analysen Verwaltungs-GmbH, Frankfurt/Main 100.00 2005 28 mil Handels- und Investitions GmbH, Cologne 100.00 3) 2005 383 nop Automotive GmbH, Cologne 100.00 3) 2005 34 Affiliated companies (abroad), not included in the consolidated financial statements Adfinders b.v., Hoofddorp, Netherlands 100.00 3) 2005 654 6) bdi Research Limited, London, uk 100.00 3) 2005 5) bem Limited, London, uk 100.00 3) 2005 5) bwv Holding ag, St. Gallen, Switzerland 100.00 3) 2005 257 6) caticall - recolha de informação assistida por computador, lda., Lisbon, Portugal 100.00 3) 2005 6 dragon eye Ltd., Hergiswil, Switzerland 100.00 3) 2005 1,077 6) Eurisko nopworld rom s.r.l., Iasi, Romania 100.00 3) 2005 1 GeoAdimark S.A., Providencia, Santiago, Chile 100.00 3) 2005 119 GfK - european opinion research centre eeig, Brussels, Belgium 85.00 2005 3 GfK Custom Research worldwide gie, Brussels, Belgium 81.00 4) 2005 0 6) GfK Custom Research Latam Holding, s.l., Valencia, Spain 95.00 2005 5) GfK Great Britain Ltd., London, uk 100.00 3) 2005 5) GfK HealthCare Asia Pte Ltd., Singapore, Singapore 100.00 7) 2005 17 gfk holding mexico, s.a. de c.v., Mexico City, Mexico 100.00 2005 5) GfK Kasachstan too, Almaty, Kazakhstan 100.00 3) 2005 5) gfk latinoamerica holding, s.l., Valencia, Spain 51.00 3) 2005 279 6) GfK Market Consulting (Beijing) Co. Ltd., Beijing, China 90.00 3) 2005 5) GfK Marketing Service Chile Limitada, Santiago, Chile 99.00 3) 2005 206 6) GfK Marketing Services Eastern Europe Holding spol. z o. o., Warsaw, Poland 100.00 3) 2005 13 GfK marketing services ltda., São Paulo, Brazil 99.00 3) 2005 437 6) GfK Marknadsundersökning Sverige ab, Lund, Sweden 100.00 3) 2005 625 2) GfK memrb Marketing Services Maroc, Casablanca, Morocco 100.00 3) 2005 142 6) GfK nop Field Marketing Services Limited, London, uk 100.00 3) 2005 5) GfK npd Marketing Services Worldwide b.v., Amstelveen, Netherlands 75.00 2005 21 6) GfK Panel Arastirma Hizmetleri a.s., Istanbul, Turkey 95.00 3) 2005 8) GfK Stratégie et développement Groupement d intérêt Economique, Rueil-Malmaison, France 100.00 3) 2005 96 6) ifr Field sarl, Viroflay, France 100.00 3) 2005 44 6) FINANCIAL STATEMENTS 1) Profit and loss transfer agreement 2) Details as per commercial balance sheet II 3) Fully indirect shareholding 4) Partially indirect shareholding 5) Details not available 6) Details as per provisional financial statements drawn up under national law 7) Newly established in 2005 8) In liquidation GfK_141

Shareholdings of the GfK Group Company name and registered office Share in the capital in % Financial year Equity (eur 000) ifr Nederland b.v., Amsterdam, Netherlands 100.00 3) 2005 58 6) ifr Polska Sp. z o.o., Warsaw, Poland 100.00 3) 2005 20 6) ifr u.k. Ltd., London, uk 93.01 3) 2005 0 6) Inform Business Development Pty. Ltd., Sydney, Australia 100.00 3) 2005 0 International Research Associates, Inc., Harrison, New York, usa 100.00 3) 2005 5) Intomart DataCall b.v., Hilversum, Netherlands 100.00 3) 2005 285 6) Media Control ag, Zurich, Switzerland 100.00 3) 2005 26 Media Control Marketing Research España, s.l., Madrid, Spain 100.00 3) 2005 117 6) Mediametrics Limited, London, uk 100.00 3) 2005 79 nop Consumer Market Research Limited, London, uk 100.00 3) 2005 0 nop Market Research Limited, London, uk 100.00 3) 2005 204 nop Mystery Shopping Limited, London, uk 100.00 3) 2005 0 nop Surveymaster Limited, London, uk 100.00 3) 2005 0 nopw Limited, London, uk 100.00 3) 2005 1 Procon GfK Ltd., Baku, Azerbaijan 100.00 3) 2005 8) ps - Martin Hamblin Limited, London, uk 100.00 3) 2005 5) Radio Research Limited, London, uk 100.00 3) 2005 0 Server s.a., Providencia, Santiago, Chile 100.00 3) 2005 8 Associated companies (Germany) (all details according to hgb commercial balance sheet I) Ernst und GfK Grundstücksgesellschaft, Nuremberg 50.00 2005 817 Infotab Research GmbH, Munich 20.00 3) 2005 5) Associated companies (abroad) agb Nielsen, medijske raziskave, d.o.o., Ljubljana, Slovenia 21.00 3) 2005 523 Brand Index vof, Hilversum, Netherlands 33.30 3) 2005 5) Common Technology Centre eeig, London, uk 25.00 3) 2005 5) Europanel Raw Database gie, Brussels, Belgium 50.00 4) 2005 5) GfK-Media Research Middle East ag, Hergiswil, Switzerland 49.00 3) 2005 35 2) ggc-nop Limited, London, uk 25.00 3) 2005 5) i + g Infratest Medical Research Inc., Rhode Island, usa 50.00 2005 5) incoma Consult s.r.o., Prague, Czech Republic 19.50 3) 2005 60 2) Jan Schipper Compagnie b.v., Bussum, Netherlands 20.00 3) 2005 5) MarketingScan snc, Rueil-Malmaison, France 50.00 2005 2,868 2) Media Focus (arge), Hergiswil, Switzerland 50.00 3) 2005 52 2) npd Intelect, l.l.c., Port Washington, New York, usa 25.00 3) 2005 5) org-gfk Marketing Services (India) Private Limited, Mumbai, India 40.00 3) 2005 5) Research Matters ag, Basel, Switzerland 33.00 2005 1,147 Sports Tracking Europe b.v., Amstelveen, Netherlands 25.00 2005 41 2) St. Mamet Saisie Informatique (smsi) sarl, St Mamet la Salvetat, France 20.00 3) 2005 470 2) Starch Research Services Limited, Toronto, Ontario, Canada 20.00 3) 2005 5) ufo Veld b.v., Amsterdam, Netherlands 50.00 3) 2005 5) Unified Fieldwork Organisation ufo v.o.f., Amsterdam, Netherlands 50.00 3) 2005 5) v.o.f. Projectbureau Politiemonitor, Hilversum, Netherlands 50.00 3) 2005 5) FINANCIAL STATEMENTS Other participations (abroad) Bureau voor Reclame Statistiek Hoofddorp b.v., Hoofddorp, Netherlands 49.00 3) 2005 33 iri Infoscan Ltd., Maidenhead/Berkshire, uk 5.80 4) 2005 5) 1) Profit and loss transfer agreement 2) Details as per commercial balance sheet II 3) Fully indirect shareholding 4) Partially indirect shareholding 5) Details not available 6) Details as per provisional financial statements drawn up under national law 7) Newly established in 2005 8) In liquidation 142_GfK GfK_142

Auditors report We have audited the consolidated financial statements prepared by the GfK Aktiengesellschaft, Nuremberg, comprising the balance sheet, the income statement, statement of changes in equity, cash flow statement and the notes to the consolidated financial statements, together with the Group management report for the business year from 1 January 2005 to 31 December 2005. The preparation of the consolidated financial statements and the Group management report in accordance with ifrs, as adopted by the eu, and the additional requirements of German commercial law pursuant to 315a section 1 hgb [Handelsgesetzbuch, German Commercial Code] and supplementary provisions of the articles of incorporation are the responsibility of the parent company s management. Our responsibility is to express an opinion on the consolidated financial statements and on the Group management report based on our audit. We conducted our audit of the consolidated financial statements in accordance with 317 hgb [Handelsgesetzbuch, German Commercial Code] 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 misstatements materially affecting the presentation of the net assets, financial position and results of operations in the consolidated financial statements in accordance with the applicable financial reporting framework and in the Group management report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the Group and expectations as to 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 consolidated financial statements and the Group management report are examined primarily on a test basis within the framework of the audit. The audit includes assessing the annual financial statements of those entities included in consolidation, the determination of entities to be included in consolidation, the accounting and consolidation principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements and Group management report. We believe that our audit provides a reasonable basis for our opinion. Our audit has not led to any reservations. In our opinion, based on the findings of our audit, the consolidated financial statements comply with ifrs, as adopted by the eu, the additional requirements of German commercial law pursuant to 315a section 1 hgb and supplementary provisions of the articles of incorporation and give a true and fair view of the net assets, financial position and results of operations of the Group in accordance with these requirements. The Group management report is consistent with the consolidated financial statements and as a whole provides a suitable view of the Group s position and suitably presents the opportunities and risks of future development. Nuremberg, 13 April 2006 kpmg Deutsche Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprüfungsgesellschaft Kozikowski (German Public Auditor) Renner (German Public Auditor) FINANCIAL STATEMENTS GfK_143

FINANCIAL STATEMENTS 144_GfK GfK_144

Additional information Overview of years 146 Glossary of financial terminology 150 Glossary of specialist GfK terms 152 List of GfK company abbreviations used in the management report Index Financial calendar Acknowledgements V VI VII VII GfK_145 ADDITIONAL INFOTRMATION

Overview of years 1) Financial reporting for 2002 to 2004 as per us gaap and for 2004 and 2005 as per ifrs us gaap Key figures income statement eur million/percent 2002 2003 2004 2004 2005 ifrs Key figures income statement eur million/percent Sales 559.4 595.3 671.7 669.1 937.3 Sales Change in % on prior year + 10.6 + 6.4 + 12.8 + 40.1 Change in % on prior year Personnel expenses 244.1 256.6 280.7 282.7 373.1 Personnel expenses Change in % on prior year + 9.4 + 5.1 + 9.4 + 32.0 Change in % on prior year Depreciation/amortization 2) 24.9 24.8 22.0 25.8 44.6 Depreciation/amortization 2) Change in % on prior year 11.7 0.4 11.3 + 72.5 Change in % on prior year Operating income 47.2 67.3 86.1 82.9 125.1 Adjusted operating income Change in % on prior year + 36.4 + 42.4 + 27.9 + 50.9 Change in % on prior year ebitda 68.5 91.2 108.9 107.8 153.5 ebitda 3) Change in % on prior year + 18.2 + 33.0 + 19.5 + 42.4 Change in % on prior year ebitda margin in % 3) 12.2 15.3 16.2 16.1 16.4 ebitda margin in % 3) ebit 43.6 66.4 86.9 77.6 80.7 Operating income Change in % on prior year + 46.6 + 52.1 + 30.9 + 3.9 Change in % on prior year Margin in % 7.8 11.1 12.9 11.6 8.6 Margin in % Income from participations 3) 6.4 3.1 4.3 4.4 28.3 Income from participations 3) Change in % on prior year + 119.6 51.3 + 37.5 + 550.2 Change in % on prior year ebit after income from participations 50.0 69.5 91.1 82.0 109.0 ebit Change in % on prior year + 53.1 + 38.9 + 31.2 + 32.9 Change in % on prior year Margin in % 8.9 11.7 13.6 12.2 11.6 Margin in % Result from ongoing business activity 45.3 66.3 90.5 81.4 92.2 Income from ongoing business activity Change in % on prior year + 165.9 + 46.4 + 36.6 13.3 Change in % on prior year Consolidated total income before minority interests 30.0 41.1 63.5 53.1 67.5 Consolidated total income Change in % on prior year + 449.6 + 36.9 + 54.7 27.1 Change in % on prior year Tax ratio in % 33.7 38.0 34.3 34.7 26.8 Tax ratio in % 1) Prior to 2002, financial reporting was in accordance with the German Commercial Code (hgb). This year s table therefore only includes 4 years. 2) In tangible and intangible assets 3) Including income from associates and other income from participations 146_GfK

Overview of years 1) Financial reporting for 2002 to 2004 as per us gaap and for 2004 and 2005 as per ifrs us gaap Key indicators balance sheet eur million/percent 2002 1) 2003 2004 2004 2005 ifrs Key indicators balance sheet eur million/percent Fixed assets 263.8 285.0 334.2 347.6 1,104.3 Non-current assets Change in % on prior year + 26.5 + 8.0 + 17.3 + 217.7 Change in % on prior year Current assets 189.8 200.9 210.7 215.6 391.5 Current assets Change in % on prior year 0.1 + 5.9 + 4.9 + 81.6 Change in % on prior year Asset structure in % 139.0 141.9 158.6 161.2 282.1 Asset structure in % Investments 76.6 47.7 85.1 84.6 681.9 Investments Change in % on prior year 29.3 37.7 + 78.4 + 705.8 Change in % on prior year thereof in tangible assets 2) 28.6 20.9 22.8 22.4 35.4 thereof in tangible assets 2) Change in % on prior year 8.1 27.0 + 8.9 + 58.2 Change in % on prior year thereof in financial assets 48.0 26.8 62.3 62.2 646.5 thereof in financial assets Change in % on prior year 37.8 44.2 + 132.7 + 938.5 Change in % on prior year Shareholders equity 181.5 204.1 248.4 256.7 426.6 Equity 3) Change in % on prior year + 11.3 + 12.5 + 21.7 + 66.1 Change in % on prior year Borrowings 281.2 288.2 297.9 306.5 1,069.2 Borrowings Change in % on prior year + 15.6 + 2.5 + 3.4 + 248.9 Change in % on prior year Total assets 469.6 502.0 560.3 563.2 1,495.8 Total assets Change in % on prior year + 13.7 6.9 + 11.6 + 165.6 Change in % on prior year Net indebtedness 39.6 24.9 31.7 39.3 523.0 Net indebtedness Change in % on prior year 67.3 37.2 + 27.3 + 1,231.5 Change in % on prior year us gaap Key indicators funds statement eur million/percent 2002 2003 2004 2004 2005 Cash flow from ongoing business activity 69.3 69.2 92.3 92.1 128.9 ifrs Key indicators cash flow statement Cash flow from operating activity eur million/percent Change in % on prior year 8.8 0.1 + 33.3 + 40.0 Change in % on prior year Cash flow from investment activity 73.2 42.7 83.0 81.0 651.8 Cash flow from investing activity Change in % on prior year 29.8 41.7 + 94.3 + 705.0 Change in % on prior year Cash flow from financing activity 2.9 16.2 12.1 14.0 550.3 Cash flow from financing activity Change in % on prior year 82.6 652.3 25.3 + 4,030.7 Change in % on prior year Free cash flow 40.7 48.3 69.5 69.7 93.5 Free cash flow Change in % on prior year 9.2 + 18.5 + 44.0 + 34.1 Change in % on prior year 1) Prior to 2002, financial reporting was in accordance with the German Commercial Code (hgb). This year s table therefore only includes 4 years. 2) In tangible and intangible assets 3) Including equity attributable to minority interests GfK_147 ADDITIONAL INFORMATION Overview of years

Overview of years 1) Financial reporting for 2002 to 2004 as per us gaap and for 2004 and 2005 as per ifrs us gaap Key indicators profitability 2002 2003 2004 2004 2005 Capex as a percentage of sales 5.1 3.5 3.4 3.3 3.8 ifrs Key indicators profitability Capex as a percentage of sales Return on capital employed in % 11.3 14.3 17.2 15.4 10.6 Return on capital employed in % Profit to sales ratio in % 5.4 6.9 9.5 7.9 7.2 Profit to sales ratio in % Ratio of net indebtedness to cash flow, in years 1.0 0.5 0.5 0.6 5.6 Ratio of net indebtedness to cash flow, in years Pay-out ratio in % 20.2 19.5 17.9 17.7 17.2 Pay-out ratio in % us gaap Key indicators company valuation 2002 2003 2004 2004 2005 Earnings per share in eur 2) 0.82 1.06 1.68 1.35 1.77 Earnings per share in eur 2) ifrs Key indicators company valuation Change in % on prior year + 310.0 + 29.3 + 57.8 + 31.1 Change in % on prior year Free cash flow per share in eur 2) 1.30 1.54 2.22 2.22 2.79 Free cash flow per share in eur 2) Change in % on prior year + 18.5 + 44.0 + 25.7 Change in % on prior year Gearing in % 21.8 12.2 12.7 15.3 122.6 Gearing in % Net indebtedness in relation to Net indebtedness in relation to ebit in % 90.8 37.5 36.5 47.9 480.1 ebit in % ebitda in % 57.8 27.3 29.1 36.4 340.6 ebitda in % Free cash flow in % 97.2 51.5 45.6 56.3 559.2 Free cash flow in % Dividend per share in eur 0.17 0.21 0.30 0.30 0.33 Dividend per share in eur Total dividend 5.2 6.5 9.4 9.4 11.6 Total dividend Change in % on prior year + 18.2 + 25.0 + 44.8 + 23.4 Change in % on prior year Dividend yield in % 1.56 1.10 1.05 1.05 1.17 Dividend yield in % Year-end share price in eur 2) 10.68 19.02 28.65 28.65 28.30 Year-end share price in eur 2) Weighted number of shares (in thousand) 31,346 31,346 31,367 31,367 33,486 Weighted number of shares (in thousand) Number of shares as of Dec 31 31,346 31,346 31,475 31,475 35,048 Number of shares as of Dec 31 1) Prior to 2002, financial reporting was in accordance with the German Commercial Code (hgb). This year s table therefore only includes 4 years. 2) Adjusted for capital increase 148_GfK

Overview of years 1) Financial reporting for 2002 to 2004 as per us gaap and for 2004 and 2005 as per ifrs us gaap Sales by division and region eur million/percent 2002 2003 2004 2004 2005 ifrs Sales by division and region eur million/percent Division 2) Division 2) Custom Research 224.5 220.8 252.1 249.4 416.4 Custom Research Change in % on prior year + 14.8 1.6 + 14.2 + 67.0 Change in % on prior year Retail and Technology 137.3 166.7 187.0 187.0 209.6 Retail and Technology Change in % on prior year + 12.4 + 21.4 + 12.2 + 12.1 Change in % on prior year Consumer Tracking 86.0 89.8 94.4 94.4 100.3 Consumer Tracking Change in % on prior year + 1.4 + 4.4 + 5.2 + 6.3 Change in % on prior year Media 61.3 58.3 62.2 62.2 96.2 Media Change in % on prior year 2.1 4.9 + 6.8 + 54.5 Change in % on prior year HealthCare 35.8 49.3 68.1 68.1 107.3 HealthCare Change in % on prior year n.a. + 37.7 + 38.2 + 57.6 Change in % on prior year Region 2) Region 2) Germany 204.7 221.7 236.3 236.3 253.6 Germany Change in % on prior year + 6.4 + 8.3 + 6.6 + 7.3 Change in % on prior year Western and Southern Europe 196.7 204.7 215.7 215.7 257.5 Western and Southern Europe Change in % on prior year + 14.4 + 4.1 + 5.4 + 19.4 Change in % on prior year Northern Europe 59.1 54.1 55.6 55.6 127.2 Northern Europe Change in % on prior year + 13.8 8.4 + 2.7 + 128.8 Change in % on prior year Central and Eastern Europe 28.5 31.8 40.1 40.2 52.7 Central and Eastern Europe Change in % on prior year + 21.1 + 11.6 + 26.0 + 31.2 Change in % on prior year America 40.4 48.6 84.8 82.0 207.0 America Change in % on prior year + 9.7 + 20.4 +74.5 + 152.4 Change in % on prior year Asia and the Pacific 30.1 34.3 39.3 39.3 39.4 Asia and the Pacific Change in % on prior year + 3.1 + 14.1 + 14.3 + 0.3 Change in % on prior year Number of employees at year-end 4,879 5,066 5,539 5,539 7,515 Number of employees at year-end Change in % on prior year + 4.9 + 3.8 + 9.3 + 35.7 Change in % on prior year 1) Prior to 2002, financial reporting was in accordance with the German Commercial Code (hgb). This year s table therefore only includes 4 years. 2) Figures from the Management Information System GfK_149 ADDITIONAL INFORMATION Overview of years

Glossary of financial terminology A Adjusted operating income (ifrs) Adjusted operating income does not take into account highlighted items. The management uses this financial indicator in the Group-wide management of GfK s operating business. Affiliated companies Companies which are controlled by the parent. As a rule, the parent holds the majority of the voting rights and capital of the company. Assets (ifrs) Resources that are at the disposal of the company as a result of events in the past and which should represent an economic benefit in the future. Asset structure (us gaap) The asset structure describes the relationship between non-current assets and current assets. It is determined by multiplying the ratio of fixed assets to current assets by 100. Associated companies Minority participations in companies on whose business or company policy a decisive, but not controlling influence is exercised. Associated companies are in principle valued at equity. Borrowings Total assets less equity. B C Cash flow Balance of funds inflow and outflow affecting payment. Consolidated total income (ifrs) Consolidated total income attributable to the equity holders plus consolidated total income attributable to minority interests; also referred to as consolidated total income before minority interests. Consolidated total income (us gaap) Consolidated total income attributable to equity holders of the parent; also referred to as consolidated total income after minority interests. Cost of sales Total of all types of operating costs which can be directly allocated to clients orders. These include in particular costs for external data procurement, costs for interviewees and interviewers. Cost of sales accounting Form of income statement which shows the income achieved in the market during the accounting period. Opposite: total cost accounting. Here the total operating income for the period is shown, whereby the sales and changes in inventories are shown against the total cost. Both forms of accounting produce the same income for the accounting period. Current assets (ifrs) The total of all short-term receivables, deferrals, funds, securities and inventories reported on the assets side of the balance sheet. Current assets (us gaap) Assets intended for short-term use in business operations. Current liabilities (ifrs) The total of all short-term provisions, liabilities and deferrals reported on the liabilities side of the balance sheet. D Deferred taxes Tax assets or liabilities reported in the balance sheet to equalize the difference between the tax debt actually assessed and the commercial tax burden based on the financial reporting in accordance with ifrs for the commercial balance sheet. The basis for determining deferred taxes is the difference between the value of the assets and liabilities reported in the balance sheet in accordance with ifrs and the local tax balance sheet. Dividend yield Dividend per share in relation to the annual closing price. ebit (ifrs) Abbreviation for earnings before interest and taxes calculated as operating income plus income from associates plus other income from participations. ebit (us gaap) Abbreviation for earnings before interest and taxes calculated as operating income plus other income less other expenses. E ebitda Earnings before interest, taxes, depreciation and amortization, calculated as ebit plus depreciation and amortization charges. Equity (ifrs) Equity comprises funds from the equity holders available to the company as capital contributions and/or deposits and retained profits as well as equity attributable to minority interests. Equity (us gaap) Equity comprises funds from the equity holders available to the company as capital contributions and/or deposits and retained profits. Equity ratio Balance sheet equity in relation to total assets. The higher the indicator, the lower the level of indebtedness. Fixed assets (us gaap) Assets intended for ongoing use in business operations. Fixed assets comprise intangible assets, tangible assets and financial assets. F Financial expenses (ifrs) Financial expenses that do not result directly from participating interests. These are calculated as interest expenses plus other financial expenses. Financial income (ifrs) Financial income that does not result directly from participating interests. This is calculated as interest income plus other financial income. Free cash flow Cash flow from ongoing business activity less capex. G Goodwill Intangible business asset that represents the value of the intangible assets of a company at the time of its acquisition that are not separately capitalizable, such as the expertise of staff. This is calculated as the purchase price of the company less re-valued equity on a pro rata basis. Gross income from sales Sales less cost of sales. H Highlighted items The costs that are not taken into account in adjusted operating income: integration costs, amortization on disclosed hidden reserves as part of purchase price allocation, share-based payments and long-term incentives, other income and expenses including, in particular, currency effects from the valuation on the reporting date. 150_GfK

Glossary of financial terminology I O R ias The International Accounting Standards (ias) were developed and published by the iasc from 1973 to 2000. Unless specific standards have been revoked, they are still valid in full today. Since the reworking of ias 1 in 2003, the old ias have been collectively referred to as ifrs. Any existing standards are developed further as ias and all new standards are known as ifrs. ifrs The International Financial Reporting Standards (ifrs) are accounting principles developed and published by the iasb. In addition to the actual ifrs, the ias that are still valid and the interpretations of the ifric and sic are grouped under the ifrs. Income (ifrs) adjusted operating income. Income from ongoing business activity ebit plus other financial income less other financial expenses. Income from participations Contains the items income from participations, profits and losses on the disposal of participations and depreciation on participations. Majority participations Affiliated companies. M Margin A margin represents the relationship of an indicator (income, ebit, ebitda etc.) to sales. Minority participations Generic term for associated companies and other participations. The participation quota is below 50%. Operating income (ifrs) Gross income from sales less selling and general administrative expenses plus other operating income less other operating expenses. Operating income (us gaap) Gross income from sales less selling and general administrative expenses. Operating profit (us gaap) Sales of the divisions and regions less operating costs according to the Management Information System. The most important internal income indicator under us gaap. Other income from participations Income from affiliated companies not included in the scope of consolidation and other participations as well as expenses and income from disposals or write-downs of book values of investments plus gains/losses from the disposal of participations. Other operating expenses Expenses in connection with ongoing business activity, excluding financial expenses, not attributable to cost of sales or selling and general administrative expenses. Examples are impairments losses from the disposal of fixed assets and exchange losses. Other operating income Income from ongoing business activity, excluding financial income, which does not represent sales. Examples are profits on the disposal of fixed assets and exchange gains. Other participations Companies in which a participation is held but on whose business policy no decisive influence is exercised. The participation quota is below 20%. P Ratio of net indebtedness to cash flow Net indebtedness in relation to free cash flow. Return on equity Consolidated total income in relation to average shareholders equity. T Tax ratio (ifrs) Tax on income from ongoing business activity in relation to income from ongoing business activity. Tax ratio (us gaap) Taxes on income and earnings in relation to result from ongoing business activity. Total return on equity (ifrs) ebit in relation to average total assets. Total return on equity (us gaap) ebit after income from participations in relation to average total assets. U us gaap Abbreviation for United States Generally Accepted Accounting Principles. N Net indebtedness (ifrs) Liquid funds and securities less pension liabilities and financial liabilities. Net indebtedness (us gaap) Financial resources and securities held as current assets less pension liabilities and financial liabilities. Non-current liabilities (ifrs) Total of all long-term provisions, liabilities, deferred tax liabilities and other deferrals reported on the liabilities side of the balance sheet. Non-current assets (ifrs) Assets that benefit business operations in the long term. In addition to intangible assets, tangible assets and investments, these include deferred tax assets and other non-current receivables and deferrals. Pay-out ratio Total dividend in relation to consolidated total income. Profit to sales ratio (ifrs) Consolidated total income in relation to sales. Profit to sales ratio (us gaap) Consolidated total income before minority interests in relation to sales. Purchase price allocation Allocation of the purchase price when companies are acquired to assets and liabilities not previously reported or not in such amounts. GfK_151 ADDITIONAL INFORMATION Glossaries

Glossary of specialist GfK terms Ad Hoc Research Custom Research. A agf Television Research Partnership The body for which GfK Fernsehforschung carries out continuous television audience research in Germany. Founded in 1988, the agf now comprises the tv networks ard, ProSiebensat.1 Media ag, rtl and zdf: tv panel. Automotive research Qualitative and quantitative analysis of vehicle markets as a basis for the successful development and launch of vehicles and accessories. B Brand Simulator A model based on consumer panel data, used to optimize the marketing mix. Business-to-business research Surveys which focus on companies as the target group. The respondents are company representatives who are in a position to provide information on the basis of their post within the relevant company. C Challenges of Europe Annual GfK study, as part of which respondents in 15 European countries are asked about what they think are the most important issues that need addressing in their country. Concept test, concept research Tool used to assess acceptance of a new product, brand or advertising campaign based on a verbal description or picture, carried out before a product test. Conjoint analysis multivariate analysis method to determine complex patterns of consumer preferences. Consumers, Challenges Challenges of Europe. Consumers, European European Consumer Study. Consumer climate Indicator that is calculated on the basis of the findings of a monthly consumer survey carried out on behalf of the European commission. It gives insight into the level and general trends of private consumption overall. Consumers in Europe A GfK survey carried out in two waves in 2005 on consumer values, preferences and lifestyle in 17 European countries. The survey was based on the international lifestyle segmentation Euro-Socio-Styles, Lifestyle research. Consumer panel A sample of households which provide regular information on their purchases. Consumer- Scan, ConsumerScope, panel ConsumerScan Consumer panel in which the purchasing behavior of households and individuals is recorded. Covers purchases of nearly all fast moving consumer goods. Panel, household panel. ConsumerScope Mail panel, carrying out continuous surveys of purchases of consumer goods with slowermoving acquisition cycles and the use of services. Panel, consumer panel. Consumer Tracking A survey of households and individual consumers that is repeated at regular intervals; Consumer Tracking is one of GfK s business divisions. Household panel panel tracking. Consumer typology Identification of a group of people based on psychological and other individual characteristics that encompass more than socio-demographic factors. Euro-Socio-Styles, lifestyle research, social groups. Customer segmentation Market segmentation. Custom Research Custom Research is one of GfK s business divisions (formerly: Ad Hoc Research). Ad Hoc Research. E Europanel Continuous consumer research cooperation which has been in place since the 1960s and involves 24 European countries. GfK works in partnership with British market researchers, tns. Panel, consumer panel. European Consumer Study GfK study which provides information on a range of private consumer trends in nine European Union countries. The survey is representative of around 300 million private consumers aged 14 and over. Euro-Socio-Styles A lifestyle typology developed by GfK Methodenforschung (method research). Lifestyle research, consumer typology H HealthCare HealthCare is one of GfK s business divisions, which supplies information services on product development, communications, image and nba for medication: pharma market research. Household panel A representative sample of households which regularly report on their purchases. Consumer- Scan, Consumer Tracking, panel. Lifestyle research Surveys which encompass more than individual markets by aiming to divide the population into categories based on typical behavior. The categories describe behavioral types. Euro- Socio-Styles. L M Mailpanel A postal survey of units of the same sample which is repeated at regular intervals. ConsumerScope Marketing mix Specific combination of marketing tools and individual campaign parameters derived from product, distribution, contractual and communications policy. Brand Simulator. Market segmentation Division of an overall market into sub-markets using different categories. Segmentation can be by product type, price classes, geographic split or psychological and socio-economic lifestyle features and value categories of consumers. Lifestyle research. Media Media is one of GfK s business divisions, which provides information services on reach, intensity and type of use of media and media offering and their acceptance: tv panel, media research, print media research, reach research. 152_GfK

Glossary of specialist GfK terms Media planning Media planning involves decisions about what advertising media to use in marketing communication by selecting the media that best match the intended marketing aims and creating the optimum mix based on the use of different techniques. The aim of all media planning is to find the ideal solution for one or more communication aims. Media research. Media research Systematic, empirical research used as a basis for media planning by media companies and their advertising clients. tv audience research, Media, print media research, portable people meter, reach, reach research. MediaWatch An electronic metering device incorporated into a wristwatch, used to measure usage of various media. Radiocontrol, reach research, media research, portable people meter, Media. Modeling Modeling is used to illustrate complex reality in a simplified form, taking into account key elements and correlations. The resultant model is used to analyze, simulate and forecast different scenarios. Multi client study A study that is commissioned by several purchasers jointly. Multivariate analysis Method which is used to analyze the interaction of a minimum of three features (variables) at the same time. Key multivariate methods include multiple correlation and regression analysis, multidimensional scaling, factor analysis and conjoint analysis. O Out-of-home consumption Out-of-home consumption comprises all food and drink consumed outside the home, e.g. in restaurants, diners, pubs and bars and from kiosks. The term out-of-home consumption also covers ready meals and other fully prepared meals that are taken home for consumption. P Panel A survey of individuals, households, companies etc. to obtain data on a single subject at regular intervals over a longer period, using the same sample and carried out using the same methods each time. ConsumerScan, ConsumerScope, household panel, tracking. Path analysis Path analysis examines the assumed cause and effect correlations of different features on the basis of data that has been collected by statistical methods. Pharma market research Specialist segment of market research for pharmaceutical and healthcare companies, covering human and veterinary medicine and dentistry. HealthCare. Portable people meter Metering devices which are used in reach research and worn at all times. Typical portable people meters are Radiocontrol, Media Watch, media research, Media. PriceChallenger International price simulation model which is used to quantify consumer response to changes in prices. Price test, price research Tests used in establishing the optimum price. PriceChallenger. Print media research Systematic, empirical research which focuses on various print media. It is used, in particular, as a basis for media planning by media companies and their advertising clients. Media. Product test, product research Instrument used to check acceptance of new products and advertising campaigns based on a verbal description or picture. Concept test. Purchasing power GfK calculates purchasing power in terms of all net income per region. The calculation is based on official income tax statistics. Agricultural income (farmers), income support and pensions are added to this. Income such as that of entrepreneurs from partnerships, which is not relevant to consumption, is deducted. The result is then projected for the current year and re-calculated for different regional levels. R Radiocontrol Electronic meter, incorporated into a wristwatch, that measures radio listening. Reach, reach research, media research, portable people meter. Radio research Measuring the listening habits of radio listeners. Portable people meter, Radiocontrol, Media. Reach The percentage of the total population or a specific target group reached by a medium. A central concept in media planning and media research. Reach research, tv panel, Radiocontrol, portable people meter, print media research. Reach research The continuous recording of media usage; part of media research. Reach, portable people meter, Radiocontrol, Media. Retail and Technology GfK business division which provides retail information about consumer technology markets. Formerly Non-Food Tracking. retail tracking, retail panel. Retail panel, retail research Regular recording of sales, product categories and products via a representative sample of retailers with different retail types and sales channels. retail tracking, Retail and Technology, tracking. Retail tracking, retail research Continuous, systematic monitoring of sales in the markets of consumer technology goods and services. These product movements are recorded in all relevant sales channels and distribution forms in the retail trade. retail panel, Retail and Technology, tracking. Roper Reports us consumer study which provides information about consumer behavior, lifestyle, values and attitude based on 20,000 interviews a year. The Roper Reports Worldwide cover consumer trends in more than 30 countries. S Sample The observation data and/or survey units which are selected from all of the units and included in a specific survey. Segmentation Market segmentation. Social groups The social group typology is based on differentiat ing groups according to cultural or social features. Depending on the approach, the people may also be grouped by financial status, life stage and other social criteria. startrack A host-free it platform for the production and analysis of data from the GfK Retail and Technology division. GfK_153 ADDITIONAL INFORMATION Glossaries

Glossary of specialist GfK terms T Telecontrol xl The latest generation of tv meters produced by GfK subsidiary, Telecontrol. tv audience research, tv panel, tv meter. Tracking Surveys of individuals, households and companies, repeated at regular intervals and using the same interview method each time. Unlike a panel, the data is not necessarily collected from the same sources each time, but the structure of the sample is the same in each case. Consumer Tracking, retail tracking. tv audience research TV audience research is used to determine audience share. Media planning, media research reach. tv meter An electronic instrument that measures a person s tv viewing at regular intervals; in Germany and Austria this is done on a second-by-second basis. tv panel, Media, Telecontrol xl. tv panel A representative group of households whose tv viewing is continuously metered by GfK Fernsehforschung and used as the basis for audience share and ratings figures. Panel, reach, tv meter. tv reach The percentage of the total population or a specific target group that is reached by tv. Media, reach, reach research. 154_GfK

List of GfK company abbreviations used in the management report and financial statements Adimark, Chile Adimark s.a., Providencia, Adimark Investigaciones de Mercado Ltda, Collect Investigaciones de Mercado s.a., GeoAdimark s.a., Server s.a. Allison Fisher International, usa GfK Automotive llc (formerly Allison-Fisher International llc) Beyen Marktforschung, Germany Beyen Marktforschung GmbH Beyen Marktforschung, usa Beyen Corporation of America Inc. Beyen Marktforschung, Canada Beyen Corp of Canada Inc. Caribou Lake Software, usa Caribou Lake Software, llc GfK ag, Germany GfK Aktiengesellschaft GfK Arbor, usa GfK arbor, llc GfK Asia, Singapore GfK Asia Pte Ltd. GfK Audits and Surveys, usa asw Delaware, llc GfK Automotive, usa GfK Automotive, llc (formerly Allison-Fisher International llc) GfK Business Solutions & Processing, Germany GfK Data Services GmbH, GfK Business Solutions & Processing GfK Custom Research Worldwide GfK Custom Research worldwide gie GfK cri, usa GfK Custom Research Inc. GfK cbi, Italy GfK consumer and business information italy S.p.A GfK Data Services, Germany GfK Data Services GmbH, Nuremberg, Germany GfK Equity Research, usa GfK Equity Research Inc. GfK Eurisko, Italy GfK Eurisko S.r.l. (formerly Eurisko S.r.L.) GfK Gral-Iteo, Slovenia gfk gral-iteo tržne raziskave d.o.o., Ljubljana, Slovenia GfK Group Services, Germany GfK Aktiengesellschaft, GfK Group Services, Nuremberg, Germany GfK HealthCare, Germany GfK Aktiengesellschaft, HealthCare, Nuremberg, Germany GfK HealthCare Asia, Singapore GfK HealthCare Asia Pte Ltd. GfK iha Italia, Italy iha Italia S.p.A GfK Intomart, Netherlands Intomart GfK Group b.v GfK Latinoamerica Holding, Spain GfK latinoamerica holding s. l. GfK Market Measures, usa GfK u.s. Healthcare Companies lp (formerly nop World Health l.p.) GfK Marketing Services Australia, Australia GfK Marketing Services Australia Pty. Ltd. GfK Marketing Services China, China GfK Asia Pte. Ltd., Office Shanghai GfK Marketing Services, Germany GfK Marketing Services GmbH & Co. kg GfK Marketing Services, uk GfK Marketing Services Ltd. GfK Marketing Services Italia, Italy GfK Marketing Services Italia S.r.l. GfK Marketing Services Thailand, Thailand GfK Marketing Services (Thailand) Limited GfK Marketing Services Vietnam, Vietnam GfK Asia Pte. Ltd., Office Vietnam GfK Marktforschung, Germany GfK Marktforschung GmbH GfK Martin Hamblin, uk GfK Martin Hamblin Limited GfK Martin Hamblin Inc (usa) GfK Media, uk GfK Media Ltd. GfK Non-Food Tracking Holding, Germany GfK Non-Food Tracking Holding GmbH GfK nop, usa GfK nop, llc (formerly Roperasw llc) GfK nop Custom Research, uk GfK nop Limited, Custom Research GfK Panel Services, Germany GfK Panelservices Deutschland GmbH GfK Panel Services, Netherlands GfK Panelservices Benelux b.v. GfK Research Dynamics, Canada GfK Research Dynamics, Inc. GfK Research Matters, Switzerland See Research Matters GfK rt Israel, Israel GfK Retail & Technology Ltd., Ramat Gan, Israel GfK-Rus, Russia GfK-rus Gesellschaft mbh GfK Strategic Marketing GfK u.s. Healthcare Companies lp (formerly nop World Health l.p.) GfK Sverige, Sweden GfK Sverige Aktiebolag GfK us Healthcare Companies GfK u.s. Healthcare Companies lp (formerly nop World Health l.p.) GfK us Holding, usa GfK us Holdings, Inc. (formerly GfK Americas, Inc., prior to this nop World Inc.) GfK v2 GfK v2, llc, Blue Bell, Pennsylvania, usa gpi Kommunikationsforschung, Germany gpi Kommunikationsforschung Gesellschaft für Pharma-Informationssysteme mbh iha ims health, Switzerland iha ims Health GmbH KleimanSygnos, Argentina Kleiman Sygnos Research s.a. Mediamark Research Mediamark Research Inc. Merc, Mexico merc Analistas de Mercados s.a. de c.v. merc Analistas de Mercados c.a. nop World Core companies: afi Holdings llc, usaafi Investments Ltd., uk asw Delaware llc, usa asw Investments, Inc., usa Barterstore Ltd., uk Dealtalk Ltd., uk E. Friedman Marketing Services, Inc., usa GfK Automotive, llc, usa GfK nop, llc, usa GfK nop Field Interviewing Services Ltd., uk GfK nop Mystery Shopping Services Ltd., uk GfK nop Services Ltd., uk GfK nop Telephone Interviewing Services Ltd., uk Interactive Research Ltd, uk mil Research Group Ltd, uk National Opinion Polls Ltd., uk nop Automotive, Inc., usa nop World Ltd., uk Numbers Data Processing Ltd., uk Numbers (Holdings) Ltd., uk Numbers Market Research Ltd., uk Roperasw Europe Ltd., uk Roper Starch Worldwide, llc, usa Research Matters, Switzerland Research Matters ag V

Index 5 Star Initiative see Management Board renumeration see Strategy 104ff. Accounting and valuation methods 1, 8, 69f., 71, 73, Acquisitions 78, 85, 91, 109f. Ad Hoc Research see Custom Research Adjused operating income see income 135ff. Affiliated companies 56f., 79, 82, 149 America 62f., 79, 82, 149 Asia and the Pacific 73, 147 Assets 106f., 115 intangible assets 111 Associated companies 72f., 99 Balance sheet 115 Balance sheet, notes to the 72, 99, 147 Total assets 69, 73, 99, 147 Borrowings 74ff., 94ff. Business Divisions see also Consumer Tracking, Custom Research, HealthCare, Media, Retail and Technology 69 Capital increase Cash flow 100, 147 from investing activity IV, 73, 100, 147 from operating activity 73, 93, 147 Free cash flow 73, 100 Cash flow statement 126 Notes to the cash flow statement 134 Transition ifrs 50f., 79, 81, 149 Central and Eastern Europe Consolidated 97ff. financial statements IV, 71f., 98, 146 total income Consolidation 103f. Methods of consolidation 109 Scope of consolidation 103f., 109 Consumer Tracking 127 Contingencies 87, 93 Corporate Communications 14ff. Corporate Governance 74, 76, 89, 94, 149 Custom Research 79, 101, 104, Currency translation 113f. Deferred taxes IV, 11, 23, 148 Dividend 71, 146 ebit IV, 71, 146 ebitda IV, 84ff., 134, 149 Employees 86 Environmental protection 73, 99, 120, 147 Equity 73, 99 Change in shareholders equity 73 Equity ratio 73, 90, 93 Financing 107, 127 Financial instruments 118 Financial assets 125 Financial liabilities 107, 117 Fixed assets 74 Gearing 28ff., 32f., 79., 149 Germany 106, 116 Goodwill 74, 77, 89, 94, 149 HealthCare 72 Highlighted items 84f., 93 Human Resources IV, 71f., 93ff., 98, Income 112f., 146 Income IV, 71f. 98, 146 from ongoing business activity operating income see Operating income 71f., 146 Income from participations 71, 98, 146 Income statement 112ff. Notes to the income statement 25 Investor Relations 73, 93, 147 Investment 117f. Leases 12ff., 14, 86, 135, 137 Management Board 10, 84, 17, 105 Management Board remuneration IV Margin 87, 93 Marketing 74, 77, 89, 94, 149 Media Net income for the year see Consolidated total income 73, 147 Net indebtedness 1, 8, 69f., 75, 79, 85, nop World 93, 110 44f., 79, 81, 149 Northern Europe Operating income see Income 71, 72, 105 Operating profit 1, 75, 93f. Organic growth 86, 93 Organization and administration 148 Pay-out ratio 130 Pro forma statements (ifrs 3) 148 Profit to sales ratio 123 Proposed appropriation of profits 108, 123f., 125 Provisions 83 Purchasing 148 Ratio of net indebtedness to cash flow 24ff., 78f. Regions see also America, Asia and the Pacific, Germany, Northern Europe, Western and Southern Europe, Central and Eastern Europe 74, 76, 89, 94 Retail and Technology Return see Margin 148 Return on capital employed 83f., 93, 105 Research and development 88ff. Risk report IV, 71, 93f., 98,112, Sales 146 74ff., 94ff., 128ff. Segment report see also Business divisions, Regions 19ff., 69 Shares IV, 21, 105, 115, 148 Earnings per share 21, 148 Key indicators 19ff. Share price performance 23 Shareholder structure 138ff. Shareholdings 74 Soft facts Staff see Employees 8, 70, 84 Strategy 86, 93 Sub-holdings 4ff., 15, 135f. Supervisory Board Tax see Tax on income and earnings IV, 72, 105, 113f., Tax on income and earnings 146 130ff. Transition from us gaap to ifrs 38f., 79f., 149 Western and Southern Europe VI

Provisional key dates in the financial calendar May 2, 2006 Accounts press conference, Nuremberg May 2, 2006 Analysts conference, Frankfurt/Main May 15, 2006 Quarterly report as of March 31 1) June 29, 2006 Annual General Meeting, Fürth August 14, 2006 Interim report as of June 30 1) November 14, 2006 Quarterly report as of September 30 1) February 28, 2007 Provisional result for financial year 2006 1) April 4, 2007 Accounts press conference, Nuremberg April 4, 2007 Analysts conference, Frankfurt/Main May 15, 2007 Quarterly report as of March 31 1) May 23, 2007 Annual General Meeting August 14, 2007 Interim report as of June 30 1) November 14, 2007 Quarterly report as of September 30 1) 1) Publication is scheduled for before the start of the trading session Acknowledgements The Annual Report 2005 was published in German and English on May 2, 2005. Information regarding the GfK Group s commitment to the community is provided in the form of a special issue of the company s publication, gfk insite, a copy of which is available on request. If you wish to order further copies of the Annual Report and press releases or the latest information about GfK studies and companies, please contact: Public Affairs and Communications Dr. Ulrike Schöneberg Tel. +49 (0) 911-395-2645 Fax +49 (0) 911-395-4041 public.affairs@gfk.com For copies of interim reports and the latest financial information about the GfK Group and its subsidiaries, please contact: Investor Relations Bernhard Wolf Tel. +49 (0) 911-395-2012 Fax +49 (0) 911-395-4075 bernhard.wolf@gfk.com Most of the above information is also available on GfK s website at www.gfk.com Publisher GfK ag Nordwestring 101 D-90319 Nuremberg http://www.gfk.com Editorial support services: Medienservice Peter Reichard, Ebersberg Design Scheufele Kommunikationsagentur GmbH, Frankfurt/Main Photography Annette Hornischer, Frankfurt/Main We should like to thank the families and GfK employees in Germany, the uk, Italy, Japan, Russia and the usa who helped with the photos. Lithography 607er Druckvorlagen, Darmstadt Translation ask Translation, London, www.translate.co.uk Printing Mediahaus Biering GmbH, Munich This Annual Report is also available in German. VII