iesy Repository GmbH - Irish Stock Exchange

part of settling arbitration proceedings, iesy became a party to this agreement. As a result, iesy’s accruals increased and a
payment was made to cover the periods from January 1, 2003.
Some other collecting societies represented by ARGE Kabel have claimed additional royalty payments from iesy.
ARGE Kabel, an association of three German collecting societies, did not fully accept the GEMA settlements and claims that
it is entitled to additional royalty payments from iesy. Although ARGE Kabel has not filed a lawsuit against iesy, it has
threatened to sue iesy to recover these royalties. iesy intends to vigorously defend itself against this claim. Meanwhile,
ARGE Kabel has sued KDG. The case is pending at the arbitration court in Munich.
For the three months ended March 31, 2005, total copyright fees paid by iesy under the GEMA and the VG Media
agreements amounted to €1.5 million, and for the year ended December 31, 2004, they amounted to €5.6 million.
The German legislator is currently considering a reform of the German Copyright Act. As part of the reform, the
obligation of operators of telecommunications cable networks to pay royalties for the transmission of radio and television
programs is under scrutiny. Despite the submission of legal studies and the support of the Federal Ministry of Economics and
Labor, the Ministry of Justice has not yet changed the relevant provision of the Copyright Act to the benefit of cable
operators by providing a respective amendment of the Copyright Act in the official draft. The reform process is ongoing. A
proposal for separate royalties for broadcasters, however, has so far not been integrated into the current official draft
amending the Copyright Act.
Properties
The following table sets forth certain information with respect to the facilities iesy currently operates and which iesy
believes are of importance to its operations. All the following facilities are leased to iesy.
Location
167
Approximate Area
(Square Meters) Use of Facility
Frankfurt, Kleyerstrasse 88 4,200 Headquarters
Frankfurt, Bernerstrasse 117 1,500 Branch office
Kassel 1,300 Branch office
Marburg 2,200 Branch office
iesy believes that its facilities meet its present needs and that its properties are generally well maintained and suitable
for their intended use. iesy believes that it generally has sufficient capacity to satisfy the demand for its products in the
foreseeable future.
Employees
The following table sets forth the number of permanent employees iesy employed as of December 31, 2002, 2003 and
2004:
2002 2003 2004
Sales and marketing 9 26 36
Network and technology 208 152 159
Customer operations 103 69 63
Finance and administrative 68 48 39
Total number of employees 388 295 297
iesy restructured certain aspects of its workforce in 2003, as reflected above in the reduction in the numbers of
employees in 2003. Network operations were restructured to facilitate the centralized management of all network planning
and construction activities. The Customer Care and Information Technology divisions were merged, resulting in a Customer
Operations division with a single level of management. In comparison, iesy has continued to increase the resources dedicated
to its sales and marketing functions, increasing permanent headcount from 26 at December 31, 2003 to 36 at December 31,
2004.
Approximately 43% of iesy’s employees are former DTAG employees and have the right to return to DTAG, a right
they were given with DTAG’s divestiture of its cable television business. For 18% of iesy’s employees, included in the above
percentage of 43%, the right to return to DTAG terminates at the end of 2005, but under certain circumstances and subject to
negotiations the return right may be extended. 25% of iesy’s employees, included in the above percentage of 43%, have a
civil servant status. These employees have a permanent right to return to DTAG upon giving iesy prior notice.