iesy Repository GmbH - Irish Stock Exchange

I. Basis of Presentation
The consolidated financial statements of iesy Repository GmbH for the financial year from January 1 to December 31,
2004 have been prepared in compliance with German Commercial Code.
The consolidated profit and loss account is presented in the cost of sales format pursuant section 275 para. 2 of HGB.
The consolidated financial statements for the year ending December 31, 2004 have been prepared assuming the group
will continue as a going concern.
II. Scope of Consolidation
The consolidated financial statements include the direct investment in New iesy GmbH and the indirect stakes in iesy
Hessen GmbH & Co. KG, iesy Hessen Finanz Management GmbH, iesy Hessen Verwaltungs-GmbH, iesy Services GmbH
and DeTe Kabelservice Hessen Beteiligungs GmbH.
III. Consolidation Principles
The book value method is used for the capital consolidation by setting off the acquisition costs for shares in the
subsidiaries at the time of acquisition against the equity portion related to these companies. As much as their current value
differs from their book value the emerging difference increases assets and liabilities. Remaining active differences have been
disclosed as goodwill and are amortised using the straight-line method over the anticipated useful life of 15 years.
In prior year the balance of minority interest reflected equity share in consolidated companies held by shareholders not
belonging to the group. At closing date no shareholders not belonging to the group are included. With the contribution of the
shares through the hitherto minority shareholders of New iesy, iesy Repository is the sole shareholder of New iesy.
Intercompany payables and receivables are eliminated within the framework of debt consolidation.
Other income and expenses from intercompany transactions are eliminated within the framework of income and
expense consolidation.
Intercompany profits are eliminated.
IV. Accounting and Valuation Principles
The financial statements of consolidated companies are prepared in compliance with uniform accounting and valuation
principles.
Intangible assets acquired are valued at acquisition costs, reduced by ordinary amortization. The company applies
straight-line depreciation based on the anticipated useful life of intangible assets. The useful life of software is 2 to 4 years, of
the customer base it is 10 years (indirect customer base and customer base of former DeTeKabelService GmbH & Co. KG)
respectively 20 years (direct customer base) and of goodwill it is 15 years. While there is a straight contractual relationship
between the group and end customers for the direct customer base indirect customers have a contractual relationship with one
single network provider. The calculation of the anticipated useful life of the customer base considered the contractual
relationship with the client and therefore the possibility to influence the relationship with the end customer. Net book value
and remaining useful life for the indirect customer base amounts to € 11.0 Mio respectively 5.5 years and for the direct
customer base as well as the customer base of DeTeKabelService GmbH & Co. KG to € 71.1 Mio respectively 8 to 15.5
years.
The goodwill in the amount of € 85.0 Mio includes € 17.4 Mio from the acquisition of shares of New iesy in 2003 and
€ 67.6 Mio from the contribution of the shares of New iesy by the minority shareholders into iesy Repository in November
2004.
Tangible assets are carried at acquisition costs, reduced by ordinary depreciation at the amount permissible under tax
law. The company applies straight-line depreciation based on the anticipated useful life of tangible assets, starting in the
month of acquisition. The anticipated useful life of technical plant and machinery is 10 to 15 years and of other plant,
furniture and office equipment it is 3 to 10 years.
Due to the lapse of the tax simplification rule pursuant to R 44 EStR, this fiscal year movable fixed assets are
depreciated pro-rata-temporis, starting in the month of acquisition. The effect of this change in valuation is not precisely
determinable.
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