F I E R A M I L A N O. annual report as at 31 december 2007 FIERA MILANO

Transcription

1 F I E R A M I L A N O annual report as at 31 december 2007 FIERA MILANO annual report as at 31 december 2007

2

3

4 F I E R A M I L A N O annual report as at 31 december 2007 This document contains a true translation into English of the original report in Italian Relazione e bilancio al 31 dicembre However, for information about Fiera Milano Group reference should be made exclusively to the original report in Italian. The Italian version of the Relazione e bilancio al 31 dicembre 2007 shall prevail upon the English version. Fiera Milano SpA Registered office: Piazzale Carlo Magno, Milan - Italy Operating and administrative office: SS del Sempione, Rho (Milan) Share capital: 33,891,778.00, wholly paid-in Companies Register, Tax Code and VAT no R.E.A Rho (Milan), 26 March 2008

5 Table of contents FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER TABLE OF CONTENTS Summoning of Shareholders Meeting 6 Corporate bodies and Independent auditor 7 Group Structure 8 Fiera Milano in the Stock Market 10 CONSOLIDATED ANNUAL REPORT FIERA MILANO GROUP Board of Directors Management Report Foreword 16 Performance overview and major events in year 16 Macroeconomic and sector scenario 21 Business and financial performance in the financial year as at 31 December Operating performance by business segment 30 Significant events after year-end 35 Future estimated business trend 37 Consolidated financial statements at 31 December 2007 Group Consolidated Financial Statements: - Consolidated balance sheet 40 - Consolidated income statement 41 - Consolidated cash flow statement 42 - Statement of changes in consolidated equity 43 Explanatory and supplementary notes to consolidated financial statements: - Accounting standards and consolidation policies 44 - Segment reporting 57 - Notes on items in consolidated accounts 60 Attachments: - List of consolidated companies and other investments 106 Declaration pursuant to Article 81-ter of CONSOB Regulation Independent Auditors Report 110

6 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Table of contents 5 FIERA MILANO SPA PARENT COMPANY Board of Directors Management Report Foreword 116 Performance overview 116 Business and financial performance in the financial year as at 31 December Performance of subsidiary companies 121 Significant events after year-end 134 Future estimated business trend 134 Other information 1. Shareholdings owned by Members of Corporate Management and Control Bodies, by General Managers, and by Managers with Strategic Responsibilities Treasury shares Privacy and data protection 136 Annual report on Corporate Governance as at 31 December Proposals for the Ordinary Shareholders Meeting 158 (Report pursuant to art. 3 of Ministry of Justice Decree no. 437 of 5 November 1998) Statutory Financial Statements of the Direct Parent Company Fiera Milano SpA at 31 December 2007 Statutory Financial statements: - Balance sheet Income statement Cash flow statement Statement of changes in equity 169 Explanatory and supplementary notes to the statutory financial statements: - Accounting standards Notes on statutory financial statements items Attachments: 1. List of equity investments in subsidiary companies at 31 December Summary of key figures of last financial statements of consolidated subsidiary and associated companies (Article 2429 of Italian Civil Code) 228 Declaration pursuant to Article 81-ter of CONSOB Regulation Report of Statutory Auditors Committee 234 Independent Auditors Report 242 Resolutions passed by the Ordinary Shareholders Meeting 244

7 Summoning of Shareholders Meeting FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Summoning of Shareholders Meeting FIERA MILANO SpA Registered office: Piazzale Carlo Magno, 1 Milan, Italy Operating and administrative location: SS del Sempione 28 Rho (Milan), Italy Share capital: 33,891, fully paid up Milan Companies Register, Tax Code and VAT no Shareholders are summoned to attend the Ordinary General Shareholders Meeting in Rho (Milan) at the Auditorium of the Service Centre (Centro Servizi) at the new Exhibition Centre, Strada Statale del Sempione 28 (reserved parking space available with entry from the South Gate (Porta Sud) at 3 p.m. on 28 April 2008 on first call and, if a second call is necessary, on 29 April 2008 at the same time and place, to discuss and vote on the following: Agenda 1. Year-end financial statements as at 31 December 2007, Board of Directors Management report and Statutory Auditors Report; related and consequent resolutions; 2. Authorisation to purchase and dispose of own treasury shares; related and consequent resolutions. Pursuant to law and to the Company By-laws, Shareholders for whom the necessary documentation issued by their respective appointed intermediaries of their share ownership has been received at the Company s registered headquarters or, preferably, at the operating and administrative office in Rho (Milan), SS del Sempione 28 at the office reception area of the Service Centre (Centro Servizi), at least two working days before the date fixed for the meeting, have the right to attend the Shareholders Meeting. Documentation relating to the items on the agenda will be made available at the company s registered office, at the operating and administrative office in Rho (Milan), SS del Sempione 28 at the office reception area of the Service Centre (Centro Servizi), c/o Borsa Italiana SpA, and on the Company s website ( within legally established deadlines, as required by current regulations. Shareholders have the right to obtain a copy of all the aforementioned documentation. Rho (Milan), 26 March 2008 Chairman of the Board of Directors Michele Perini (notice published in daily newspaper Il Sole 24 Ore on 27 March 2008)

8 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Corporate Bodies and Independent Auditor 7 Corporate bodies and Independent auditor BOARD OF DIRECTORS Michele Perini Chairman Carlo Edoardo Valli Senior Vice President* Carlo Sangalli Vice President Claudio Artusi Chief Executive Officer Renato Borghi Director* Giovanni Deodato Director* Francesco Milone Director Romeo Robiglio Director* Fabrizio Viola Director *Independent director STATUTORY AUDITORS COMMITTEE Damiano Zazzeron Chairman Pier Andrea Chevallard Statutory auditor Alfredo Mariotti Statutory auditor Francesco Arancio Substitute auditor Pietro Pensato Substitute auditor INTERNAL CONTROL & AUDIT COMMITTEE Carlo Edoardo Valli Romeo Robiglio Giovanni Deodato Fabrizio Viola COMPENSATION COMMITTEE Carlo Sangalli Giovanni Deodato Renato Borghi Carlo Edoardo Valli SUPERVISORY BOARD (ITALIAN L.D. 231/01) Michele Perini Romeo Robiglio Renato Borghi Andrea Pizzoli Francesco Milone Gianpaolo Del Sasso MANAGER CHARGED WITH PREPARING THE COMPANY S FINANCIAL REPORTS (Law 262/2005) Bruno Boffo The mandate of the Board of Directors and of the Statutory Auditors Committee will expire on the date of the Shareholders Meeting called to approve the financial statements for the year ending 31 December The Board of Directors is vested with the widest possible powers for ordinary and extraordinary management of the Company, with the sole exception of those deeds which, by law, are the prerogative of the Shareholders Meeting. The Chairman is responsible for supervising national and international institutional relationships, institutional communication, strategy co-ordination, and internal control activities (auditing); for checking implementation of the Board of Directors resolutions; and for assisting the Chief Executive Officer (CEO) in the Group s internationalisation activities. The CEO holds the powers of ordinary management with the exception of certain specific activities; i.e., the purchase or sale of equity investments, the taking out of loans exceeding 30% of the Company s equity, stipulation of contracts concerning property assets, with the exception of rental contracts for the performance of corporate business and of less than 6-year duration, approval of the operating budget, and the granting of guarantees to third parties. Independent auditor PricewaterhouseCoopers SpA The assignment was conferred by the Shareholders in their meeting of 28 October It was reorganised by the shareholders in their meeting of 10 January 2007 following the change in financial year-end date. It was extended for a further six financial years (FYs) by the shareholders in their meeting of 27 April It refers to the FY ended on June 30th 2006 and to the FYs ending on 31 December

9 Group Structure FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Group Structure The consolidated financial statements of the Fiera Milano Group have been prepared in compliance with International Accounting Standards (IASs) and International Financial Reporting Standards (IFRSs). IAS 14 requires a twofold approach to segment reporting, both by business and geographical segments, and companies must decide which of these two approaches should be considered primary and which should be considered secondary for the purposes of disclosure requirements. The Fiera Milano Group s business segments have thus been defined as follows: - Venues & Related Services (VRS): this business consists of hosting exhibitions and other events, promoting and providing equipped exhibition spaces, and also offering design support and related services. This business segment is led by the direct parent company Fiera Milano SpA. - Value-Added Services (VAS): this business includes the supply of services mainly for the exhibition and congress segment. The following companies carry out the activities of this segment: Nolostand, active in the stand-fitting segment; Fiera Food System, active in the catering and banqueting sector; Edizioni Fiera Milano, active in the publishing and advertising sector; Expopage, active in the Internet field. The subsidiary Eurofairs International Consultoria e Participações Ltda, headquartered in Sao Paulo, Brazil, will supervise the activities that the Fiera Milano Group may begin in that country, but the company is not currently operational. - Exhibition & Congress Organisation (ECO): this business consists of organisation and management of exhibitions, conferences, and congresses. The following companies carry out the activities of this segment: Fiera Milano International, ExpoCTS, Fiera Milano Tech, TL.TI Expo, and SIFA, which provide exhibition organisation services (the subsidiary Rassegne is not currently operational); Fiera Milano Congressi, which handles organisation of conferences and congresses. In 2007, the Fiera Milano Group had no significant operations abroad. Given this, for the time being, it has not adopted a secondary reporting structure by geographical segment. Compared with 31 December 2006, the structure of the Group has changed due to Eurostands SpA s exit from the Group and to the merger of Italian System for Business SpA into Fiera Milano SpA As discussed in greater detail below, at 31 December 2007, the company Rassegne is no longer operational. The chart on the following page shows the Fiera Milano Group s structure by business segment as at 31 December 2007.

10 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Group Structure 9 GROUP FIERA MILANO VENUES AND RELATED SERVICES (VRS) VALUE-ADDED SERVICES (VAS) 100% 100% 74% 100% 5% EXHIBITION & CONGRESS ORGANISATION (ECO) 100% 9% 100% 51% 100% 53% 51% The present chart does not include subsidiaries currently not operational

11 Fiera Milano in the Stock Market FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Fiera Milano in the Stock Market On 12 December 2002, Fiera Milano SpA s ordinary shares were listed in the STAR segment of the market regulated by Borsa Italiana SpA. The STAR (Segmento Titoli con Alti Requisiti) segment is the segment of Milan s Electronic Equity Market that trades stocks with market capitalisations of between 40 million and 1 billion issued by companies that undertake to meet high standards of corporate governance and market information. The chart below shows the trend of Fiera Milano s stock compared with the trends of the MIBTEL and All STARS indexes. Beginning last summer, the financial markets fell sharply as a result of the crisis affecting the credit industry. This had an even greater effect on the small-cap stocks and, in particular, on the shares of companies, such as Fiera Milano, at the lower end of this category. Indeed, during periods of crisis, investors tend to prefer securities that have a broader market and are therefore more easily sold when necessary.

12 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano in the Stock Market 11 FIERA MILANO STOCK PERFORMANCE AND PERFORMANCE OF MAIN INDEXES (Index basis = 100) In data 12 dicembre 2002, le azioni ordinarie di Fiera Milano SpA sono state ammesse alla quotazione nel segmento STAR del mercato regolamentato di Borsa Italiana SpA. 120 Il segm e n t o 110 S T A R 100 Fiera Milano All STARS MIBTEL /01/ /01/ /02/ /03/ /03/ /04/ /05/ /05/ /06/ /07/ /07/ /08/ /09/ /10/ /10/ /11/ /12/ /12/ /01/ /02/ /02/ /03/2008 STOCK PRICES AND MARKET CAPITALISATION From to Per-share prices (euro) Market capitalisation (milions of euro) as at Maximum Minimum as at as at Maximum Minimum as at Fiera Milano

13

14 C O N S O L I D AT E D A N N U A L R E P O R T F I E R A M I L A N O G R O U P

15

16 B O A R D O F D I R E C T O R S M A N A G E M E N T R E P O R T

17 Fiera Milano Group Consolidated Annual Report Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Foreword The Shareholders of Fiera Milano SpA, in their meeting of 10 January 2007, passed a resolution changing the year-end financial statement date, moving it from 30 June to 31 December, and similar resolutions were also passed by the subsidiaries. Given this change in financial year, in the Board of Directors management report, the Income Statement for FY 2007 is compared with the progressive data for the same period of the previous year (which were not, therefore, subjected to independent audit, given that they are presented solely for the purpose of comparison). The Balance Sheet is compared with the figures as at 31 December 2006, which therefore refers to a period of just six months (1 July to 31 December 2006). For the Group Consolidated Financial Statements and the Explanatory and Supplementary Notes to the Consolidated Financial Statements, both the balance sheet and income statement as at 31 December 2007 are compared with the figures of the financial statements as at 31 December Performance overview and major events in year The following table shows the Group s main balance sheet and income statement figures. FIERA MILANO GROUP - SUMMARY OF KEY FIGURES FY (Amounts in 000) FY FY* 31/12/06 at 31/12/07 at 31/12/06 (6 months) 106,269 Revenues from sales and services 302, ,215 (22,783) Gross Operating Margin (GOM) 7,131 30,055 (40,114) Net Operating Margin (NOM) (10,985) 3,247 (31,937) Net profit/(loss) from continuing operations (16,452) (3,769) (1,808) Net profit/(loss) from discontinued operations 1,396 (1,040) (33,745) Total net profit/(loss): (15,056) (4,809) (30,916) - attributable to the Group (16,685) (8,141) (2,829) - attributable to Minority Interest 1,629 3,332 (16,414) Cash flow - Group and Minority Interest 3,060 21, ,500 Net capital employed 78, ,500 covered by: 82,626 Equity attributable to Group 65,239 82,626 11,061 Equity attributable to Minority Interest 8,866 11,061 27,813 Net financial position (cash) 4,154 27,813 12,693 Investments (continuing operations and discontinued operations) 13,150 33, Employees (number of permanent employees at end of period) continuing operations Employees (number of permanent employees at end of period) discontinued operations *Figures not audited

18 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Board of Directors Management Report 17 Due to the sale of the subsidiary Eurostands, completed on 22 March 2007, the figures for the year do not include those that relate to this company, whilst for comparative data, the bottom-line result has been restated as required by IFRS 5 and split into results from continuing operations and from discontinued operations. The scope of consolidation changed from the previous year as a result of both the aforementioned sale of Eurostands and the merger of Italian System for Business into Fiera Milano SpA. When assessing the numbers, one should take account of the fact that the Group s operations are cyclical in two ways, due to: (i) a greater concentration of exhibitions in the six-month period from January to June; and (ii) the multiannual exhibitions. Because of the latter in particular, it is difficult to compare one year with the next. No abnormal and/or unusual operations took place during the financial year, nor were any significant one-off events and operations reported. However, bearing in mind the overall amount of the balance sheet positions and income statement items, the Group decided to set the threshold of significance for the separate indication of these operations at 2 million. For the Fiera Milano Group FY2007 was a turning-point year, during which many actions indicated in the Industrial Plan were implemented already, creating a sound base for future growth and a return to profitability. Important actions aimed at achieving the objectives of the Plan were developed and in particular: the development of new initiatives and the optimisation of the exhibition portfolio; cost optimisation and organisational rationalisation; the internationalisation of the Group. A number of these activities were completed in the first part of January, as described below. Of particular note in the area of new initiatives and the efforts to optimise the exhibition portfolio, were the launches of the two new exhibitions, Build Up Expo, for the construction industry, and Tuttofood, for the food and beverage industry. Until this time, these two industries were not a part of the Fiera Milano exhibition portfolio, despite their importance within the Italian economy. From a commercial point of view, the two events were quite successful, and the foundations have been laid for their further development in subsequent editions. With the launch of Build Up Expo in particular, the Fiera Milano Group has responded to a specific market requirement to organise an exhibition dedicated to the world of building and architecture, a requirement not fully satisfied by the three exhibitions in the building sector hosted at the Bologna site. It was therefore decided to host an exhibition through the Rassegne subsidiary in Milan, and it was, of course, called Build Up Expo. The first exhibition was held in February 2007, with a net occupied area of over 42,000 sqm. Then, following Federlegno-Arredo s decision to terminate the contract it held with Bologna Fiere for the exhibition Saie 2, the Fiera Milano Group proposed that Federlegno-Arredo take advantage of the assets of the two organisations by means of the following transaction:

19 Fiera Milano Group Consolidated Annual Report Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER sale to Made Eventi of the company branch of Rassegne involved in the organisation of Build Up Expo, for a fee of 3 million; agreement to host a new exhibition organised by Federlegno-Arredo at the new Rho venue as from 2008, with a guaranteed net area of at least 80,000 sqm. Last February, the first edition of MADE (Milano Architettura Design Edilizia) was held. By taking advantage of the experience of Build Up Expo, this exhibition exceeded net exhibition space of 100,000 sqm, thereby laying the groundwork for becoming one of the flagship events held at the Fiera Milano site. As regards the significant financial outlay that the Group incurred to launch these new initiatives, Fiera Milano Foundation decided to support these efforts by paying the Group a contribution to launch and promotional expenses of some 4.2 million for Within the scope of these efforts there was also the transfer of exhibition trademarks by Fiera Milano Foundation. The industrial plan called for the acquisition of the exhibition trademarks division, currently owned by the Foundation, by a sale to be settled in cash. This company branch includes all trademarks owned by the Foundation and managed by the Fiera Milano Group, including the trademark for the important MACEF exhibition. After in-depth discussion, the parties determined that the transfer of the company branch would be the best way to execute the transaction, which is to be settled through a reserved increase in share capital. The transaction represents an important part of the industrial plan in that the full availability of the trademarks will make it possible to manage the entire exhibition value chain and, in particular, to better focus on exhibition strategy, marketing and brand management, including the use of the trademarks abroad. The transaction is expected to be completed before the summer holidays and, in any event, before the autumn edition of MACEF, which is scheduled for September. Other development initiatives completed in 2007 included the acquisition of two company branches (formerly of the VNU group), one related to exhibitions and one to technical publications. The exhibitions branch was acquired via the Fiera Milano Tech subsidiary and consists of two important professional exhibitions, i.e. Bias (an international biennial exhibition of industrial automation, instruments, microelectronics, and ICT) and Fluidtrans Compomac (an international biennial exhibition in the oil hydraulic, pneumatic, and industrial components sectors). Only 60% of the latter event was acquired, with the remaining 40% being owned by the industry association. The trade press unit, now known as Technology, was acquired via the Edizioni Fiera Milano subsidiary and consists of seven technical publications and a website: Automazione oggi, Elettronica oggi, Inquinamento, Progettare, Rivista di meccanica oggi, Automazione e strumentazione, EO News, and B2B.it.

20 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Board of Directors Management Report 19 Finally, in order to take advantage of expected development opportunities in the congress sector by broadening and diversifying the range of services provided, Fiera Milano SpA, through its subsidiary Fiera Milano Congressi, has launched a preliminary project to create an international congress centre at fieramilanocity, with the estimated investment of some 40 million expected to be incurred by the owner of the site, the ultimate parent entity, the Fiera Milano Foundation. By combining the existing congress centre with the one that could be created using the Portello area, the project would permit the creation of a centre with over 16,000 congress seats, available as from With regard to the main actions concerning cost optimisation and rationalisation of the organisation, of particular note, first of all, is what the industrial plan referred to as the partial release of the downtown site, which remained operational even after the move to the new site. The ultimate parent entity, the Foundation, has essentially agreed to the requests of Fiera Milano SpA, with the following clarifications: (i) the effective start date is to be shifted from 1 April to 1 October 2008; and (ii) Fiera Milano SpA will pay the security and routine maintenance expenses of the part vacated early until identification of a new use for the site and in any case not beyond the rental contract s expiry date. With this transaction, the Fiera Milano Group will be able to significantly reduce its overhead costs, thereby definitively lowering its breakeven point. The process of rationalising the organisation focused on a series of transactions concerning the Group s structure, including: the early termination of the joint venture with the Reed group, which was completed immediately after year-end. With this transaction, the two groups recognised the changing conditions of the marketplace and felt it would be more productive for both to go their separate ways. In addition, the agreement reached led to the definitive closure of the legal disputes and arbitration that were under way between the parties. Following the termination, Fiera Milano SpA took control of 100% of the share capital in Fiera Milano International (for further details on the transaction, see the section Significant events after year-end ); sale of the Eurostands subsidiary, in the stand-fitting sector. The decision to sell this subsidiary was made based on the consideration that it was the only one with industrial activities (stand production), compared with all the other Group companies which operate in the service sector. Nolostand, the other subsidiary in the stands business, given the type of activity performed (assembly of fitted stands), is an operator in the service sector whose business is very close to the sale of exhibition space, which may be bare or fitted. The sale of Eurostands therefore allows the Group to focus on the service industry in its strictest sense; the acquisition of the remaining 49% equity interest in Fiera Milano Tech from the ANIE Federation. The parties have, in fact, decided to continue their co-operation on a purely operational basis, without any company-related ties. This means that, today, Fiera Milano owns 100% of its subsidiary, which has made it possible to continue the course of action featuring corporate rationalisation as indicated in the industrial plan. As such, Fiera Milano Tech has acquired the residual company branch concerning exhibition organisation form the subsidiary Rassegne. Following the sale of this unit, Rassegne is no longer operational, but it is expected to serve as a vehicle for future Group operations;

21 Fiera Milano Group Consolidated Annual Report Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER the merger of the subsidiary Italian System for Business into Fiera Milano SpA. This subsidiary controls the Palazzo Italia initiative in Berlin, and analyses are currently being conducted for an alternative use of the site. Rationalising the organisation also entailed the creation of new trademarks for the subsidiaries, which have now all incorporated the Fiera Milano name, with the aim of characterising their Group membership more effectively. The last, but certainly not least important, transaction on which the Fiera Milano Group focused its efforts during the year was that of internationalisation. In that regard, the agreement with Deutsche Messe in Hannover is seen as a starting point for long-term, broad-reaching growth abroad. The Group intends to extend these efforts to all areas of its business, which means not only acquiring local exhibition organisers or exporting Italian events to markets in which they can be properly developed, but also strengthening the loyalty of exhibitors and visitors to the Group s events in order to increase the internationalisation of exhibitions organised in Milan (for more information, see the section Significant events after year-end ). In September 2007, Fiera Milano SpA also signed an agreement with UniCredit Banca d Impresa, which calls for the joint launch of initiatives designed to facilitate the participation in the Milanese exhibitions for operators coming from countries where UniCredit is present and, similarly, to support the participation of Italian companies in events organised by Fiera Milano abroad. During the year ended 31 December 2007, the Parent Company Fiera Milano SpA in view of the weakness of international financial markets purchased 138,550 treasury shares at an average price of 5.43 per share for a total amount of 752 thousand. As at 31 December 2007, Fiera Milano SpA held, either directly or indirectly, a total of 433,943 treasury shares, equal to 1.28% of share capital.

22 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Board of Directors Management Report 21 Macroeconomic and sector scenario Macroeconomic trends The European economy posted a slowdown in 2007, one which was perhaps less than expected, but nonetheless affected by high oil prices and a global economy weakened by the crisis in the U.S. The European Central Bank, in particular, points to weak growth and high inflation. In 2007, the main European economies all slowed, after a 2006 that had shown signs of recovery. The German economy grew more slowly than in 2006, affected by weakness in consumption in response to high inflation. Consumer prices are currently rising at a rate of 3% annually. Other indicators, however, performed better, with investments continuing to increase and exports continuing to make a positive contribution in the fourth quarter of 2007, although forecasts for the coming months are for a decline in foreign demand, particularly from the U.S. France posted a slight worsening in GDP growth. In particular, fears of inflation have led to a worsening in private consumption to the extent that the erosion of personal buying power is expected to reduce the contribution of private consumption to GDP. In Italy, after the summer of 2007, industrial production posted a noticeable decline, with the seasonallyadjusted index declining for four consecutive months (September to December), and the drop at year-end caused a sharp decline in production for the fourth quarter. On average for 2007, production returned to zero growth (-0.2%), as compared to the solid growth of 2006 (+2.6%). The slowdown for Italian industry was, once again, more sensitive than the other eurozone nations. Increases in the prices of oil and raw materials and the reduced competitiveness of Italian industry related to the strengthening of the euro both weighed on production and GDP. Italian businesses would appear to be at a disadvantage compared with those of other eurozone nations due to structural factors, such as the stagnant production and the consequent increase in per-unit costs. Current and forecast demand also point to certain critical issues, with business and consumer confidence indicators declining and expected to continue falling throughout the year. The modest growth in real disposable income and the rise in inflation, along with the elevated fiscal pressures and rising oil prices, have led to a worsening in private consumption. The overvalued euro against the dollar has also limited exports in a context of increasing difficulties in global commerce (with a weakening of consumption in all of the main eurozone economies). The slowdown is expected to affect corporate investment, beginning with the construction industry, which is being held back by the completion of the recovery cycle and the credit squeeze. According to initial estimates, the eurozone nonetheless managed to perform better that the U.S. in 2007, increasing by 2.6%, compared with 2.2% in the U.S., but for 2008 economists have lowered their forecasts to expected growth of 1.6% for both economies. According to estimates, the U.S. economy, which saw a 2007 marked by significant losses on the stock market in 2007, crisis in the real estate market, and difficulties in private consumption, is expected to go through a period of recession in the second and third quarters of 2008 before returning to positive growth by year-end. For the moment, it appears that the recession will not have a significant impact on the Japanese economy, the exports of which depend largely on the U.S.

23 Fiera Milano Group Consolidated Annual Report Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER GDP TRENDS IN THE MAIN GEOGRAPHICAL AREAS GDP Change - % Italy Germany France Eurozone USA Japan Source: calculations by the Fiera Milano Foundation s Research unit Trends in the Exhibition and Congress Sectors in Europe According to the most recent data available, in 2006, the international exhibition business in the main European countries featured a trend towards stabilisation: SQM SOLD IN INTERNATIONAL EXHIBITIONS 7,000,000 Italy Germany France Spain 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000, Source: calculations by the Fiera Milano Foundation s Research unit Italy posted positive trends across all parameters thanks to positive cyclical effects for the multiannual exhibitions that occur primarily in even-numbered years. In particular, there was growth in direct foreign exhibitors and foreign visitors of 13% and 6%, respectively. For international exhibitions in Germany, 2006 closed with a stabilisation in surface area occupied and in visitors, while exhibitors posted strong performance both on aggregate and in terms of foreign presence. France posted a decline in surface area, which was affected by unfavourable cyclical effects for evennumbered years.

24 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Board of Directors Management Report 23 According to forecasts for the industry and the early numbers on 2007 business, which are still incomplete, performance is expected to be essentially stable, affected by both the maturity of the exhibition segment in the leading nations of western Europe and the cyclical nature of the leading multiannual exhibitions, which may be concentrated in either odd or even-numbered years, depending on the country. The following items are of note in relation to the congress market: In 2006, the international itinerant congress sector posted a decline in the number of events held in European countries, whereas, unlike in previous years, there was an increase in the market share of medium and largescale congresses and a drop in smaller events (of less than 250 participants). As a result, the average number of participants for international itinerant congresses increased slightly. The average duration of the events, on the other hand, continues to decline, confirming a trend that began early this decade. In 2006, the overall Italian congress market consisting of association and corporate congresses (typically company conventions) posted a slight decline in the main indicators (number of participants, days of stay), although remaining at levels higher than those reported in 2004, whilst the number of events continues to decline. However, a positive signal came from the greater degree of international openness, i.e. the greater number of international events hosted in Italy, thanks to greater visibility and the creation of specific facilities that better meet the complex organisational needs of this type of event. The initial data available for 2007, concerning the first half of the year, show encouraging signs when compared with the numbers for the same period of the previous year. In particular, the number of participants and length of stay are both stronger, while the average event duration has increased slightly, unlike what we have seen for international association congresses alone. Convergence of exhibitions and congresses: results of the UFI study One of the issues promoted by the European Chapter of UFI, the Global Association of the Exhibition Industry (comprising exhibition venues, event organisers, and service providers), for the period concerns the convergence of exhibitions and congresses. This began with the recognition that exhibitions are increasingly being accompanied by a rich schedule of convention activities, while congresses promoted by scientific associations are being supplemented with exhibition space for the event s sponsors. In addition, exhibition venues are seeking to meet the demand from the two segments by creating congress areas near exhibition pavilions, both of which are managed by offices or special-purpose companies that are a part of the same group. The study involved the UFI-associated European exhibition venues and was presented at the European Chapter Meeting in Saint Petersburg on 6 March. A structural analysis of the supply of European exhibition venues showed that 54% of the UFI-associated exhibition sites manage at least one congress centre. Most of the congress centres are small to medium-sized (with more than 60% of the facilities having a plenary auditorium of less than 1,000 seats and less than 15 convention halls), but, in order to support the capacity of these congress centres, companies are using rooms within the exhibition pavilions, both fixed facilities and specially fitted, thanks to the convertible nature and the flexibility of many exhibition areas. As many as 45% of the sites have halls with capacities of greater than 1,000 seats, so it is assumed that entire pavilions are often used and fitted to house conventions, plenary

25 Fiera Milano Group Consolidated Annual Report Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER sessions for large-scale international congresses, and also concerts, shows, and sporting events. An analysis of the management of congress spaces shows that, in more than 10% of the cases, these spaces belong to companies of the same group that handles the exhibition spaces, which confirms the leading role played by congresses and conventions in the management of exhibitions. Furthermore, 21% of the companies studied also have multifunctional areas (arenas, theatres, etc.) located near the pavilions and used, above all, for shows and sporting events. Finally, 9% also manage congress/event spaces in other areas of the city or even in other cities. The focus of the study of demand was the organisation of conventions during exhibitions, association congresses, and B2C events (concerts, shows and competitions, organised separately from the exhibition schedule). According to the exhibition venues surveyed, the exhibitions that organise a programme of convention activities to supplement the exhibition itself increased over the last five years, while the number of conventions and related participants was either stable or slightly lower. These numbers can be explained by an increase in the need to provide added value to the exhibitions with a product that focuses on specific, welldefined themes. Association congresses increased, as did participants and exhibition space. In particular, the space occupied has doubled over the last 5 years. For the most part, association congresses are of the itinerant variety in order to give all associates an opportunity to participate, and the selection of the location often depends on the existence of a scientific community (hospitals, research centres, universities) in the area in the field of the association promoting the event. Judging from the survey, it would appear that the organisation of an exhibition related to the given topics can also be a determinant factor in selecting the location. Indeed, more than 60% of those surveyed stated that there is a connection between the organisation of an exhibition in an exhibition venue and the selection of that venue (or of the related congress centre) to host a congress. Two-thirds of those surveyed also indicated that the exhibition organisers also organise congresses at their venues, particularly for private organisers as compared with associations. Therefore, activities vary based on technical and organisational capabilities, which do not deal with the scientific content, but which are essential in coordinating the various parties involved in the organisation process. This overlap can also be seen in the service providers, which are virtually the same in 83% of the cases. Services such as catering, fitting, ICT, hotel bookings, and security are being provided by the same organisations that serve the exhibitions, although to higher quality standards.

26 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Board of Directors Management Report 25 Business and financial performance in the financial year as at 31 December 2007 Business performance The consolidated income statement is presented below. For the purposes of comparison, the income statement for financial year 2007 (1 January to 31 December 2007) is shown alongside the progressive data for the same period of the previous year (1 January to 31 December 2006). The Fiera Milano Group did not conduct any significant activities abroad during the reference period of the accounts at 31 December CONSOLIDATED INCOME STATEMENT at 31/12/07 at 31/12/06 (Amounts in 000) FY (12 months)* % % Revenues from sales and services 302, , Costs of materials 6, , Costs for services 163, , Costs for use of 3rd-party assets 74, , Payroll & employee benefit costs 52, , Other operating expenses 6, , Total operating costs 303, , Other revenues 7, , Gross Operating Margin (GOM) 7, , Depreciation & amortisation 13, , Allowance for doubtful accounts & other provisions (Uses) 2, , Adjustments to asset value 1, , Net Operating Margin (NOM) (10,985) (3.6) 3, Finance income/(expense) , Profit/(loss) of equity-accounted companies Profit/(loss) before income tax: (10,824) (3.6) 5, Income tax 5, , Profit/(loss) for period from continuing operations (16,452) (5.4) (3,769) (1.1) Profit/(loss) for period from discontinued operations 1, (1,040) (0.3) Profit/(loss) for period: (15,056) (5.0) (4,809) (1.4) - Profit/(loss) attributable to the Group (16,685) (5.5) (8,141) (2.4) - Profit/(loss) attributable to Minority Interest 1, , Cash flow before taxes for the Group and Minority Interest 3, , *figures not audited Revenues from sales and services settled at 302,536 thousand, for a decline of 31,679 thousand from the 334,215 thousand for the same period of This decrease is due primarily to the different calendar of exhibitions that enabled 2006 to exceed 1.9 million square metres of exhibition space, thanks to the presence of a number of important biennial and triennial events.

27 Fiera Milano Group Consolidated Annual Report Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER The Gross Operating Margin (GOM) amounts to 7,131 thousand vs. 30,055 thousand for the same period of 2006, underlining a decline of 22,924 thousand. This decrease is due primarily to the factors mentioned above in relation to revenues, but was partially offset by the cost reduction and optimisation efforts in 2007, particularly by the direct parent company. The Net Operating Margin (NOM) amounts to a negative 10,985 thousand, as compared with the positive 3,247 thousand for the same period of 2006, and was affected both by the negative GOM recorded during the year and by depreciation and amortisation of 13,838 thousand, allowance for doubtful accounts and other provisions less related uses of 2,854 thousand and adjustments of asset value of 1,424 thousand. The allowance for doubtful accounts and other provisions includes provisions for risks and charges, less related uses, in the amount of 1,865 thousand, divided as follows: - 1,000 thousand for the additional net provision for the updated valuation of the potential use of Palazzo Italia in Berlin; thousand for other provisions, net of uses, for risks and current disputes. The impairment tests on intangible assets of an indefinite useful life resulted in value adjustments in the amount of 844 thousand for the goodwill of the subsidiary TL.TI Expo given the greater difficulties encountered for the move to Milan for the Transpotec&Logitec exhibition from its traditional location. Finally, adjustments of asset value include the elimination of the residual costs for leasehold improvements in the amount of 412 thousand related to the property in Berlin, as well as a number of minor items in the amount of 168 thousand. Net financial income amounted to 161 thousand due to the trend in interest rates. The loss before income tax amounts to 10,824 thousand vs. the income of 5,063 thousand for 2006 progressive data. Net profit from discontinued operations amounted to 1,396 thousand, and is related to the capital gain made on the sale of Eurostands, as compared with the net loss of 1,040 thousand from operations made by the subsidiary in the previous year. The net loss amounts to 15,056 thousand, after current and deferred taxes in the amount of 5,628, and is attributable to the following: - a negative 16,685 thousand attributable to the Group; and - 1,629 thousand attributable to minority interests.

28 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Board of Directors Management Report 27 Balance sheet and financial performance: The following table shows a reclassified consolidated balance sheet. RECLASSIFIED CONSOLIDATED BALANCE SHEET 31/12/07 31/12/06 (Amounts in 000) FY FY (6 months) Goodwill and other intangible assets with indefinite life 113, ,853 Other intangible assets 10,315 11,645 Tangible fixed assets 43,487 48,788 Other non-current assets 30,729 31,906 Non-current assets 197, ,192 Inventories and work in progress 5,999 9,678 Trade and other receivables 77,825 75,304 Other current assets - - Current assets 83,824 84,982 Trade payables 50,889 47,930 Payments received on account 77,432 65,111 Tax liabilities 4,177 5,893 Other current liabilities 32,718 28,135 Current liabilities 165, ,069 Net working capital (81,392) (62,087) Gross capital employed 116, ,105 Employee benefit provisions 9,641 11,311 Provisions for risks and charges and other non-current liabilities 28,329 27,233 Non-current liabilities 37,970 38,544 NET CAPITAL EMPLOYED (continuing operations) 78, ,561 NET CAPITAL EMPLOYED (discontinued operations) - 20,939 TOTAL NET CAPITAL EMPLOYED 78, ,500 covered by: Equity attributable to Group 65,239 82,626 Equity attributable to Minority Interest 8,866 11,061 Total equity 74,105 93,687 Cash & cash equivalents (17,378) (14,592) Current financial (assets)/liabilities 9,612 11,161 Non-current financial (assets)/liabilities 11,920 14,319 Net financial position (continuing operations) 4,154 10,888 Net financial position (discontinued operations) - 16,925 Total net financial position 4,154 27,813 EQUITY AND NET FINANCIAL POSITION 78, ,500 The total net capital employed as at 31 December 2007 amounts to 78,259 thousand, 43,241 thousand lower than at 31 December As at 31 December 2007, the non-current assets amount to 197,621 thousand vs. 201,192 thousand as at 31 December The net working capital, which is the balance between current assets and current liabilities, went from a negative 62,087 thousand as at 31 December 2006 to a negative 81,392 thousand as at 31 December

29 Fiera Milano Group Consolidated Annual Report Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER The Fiera Milano Group features structurally negative working capital due to the favourable cash cycle typical of both exhibitions and congresses, which features payment on account of registration fees by customers. Fiera Milano SpA also manages this activity on behalf of third-party exhibition organisers, meaning that the sale of exhibition space also benefits from this favourable cash inflow. With regard to the net financial position, the Group has a net debt balance of 4,154 thousand at 31 December 2007, compared to net debt of 27,813 thousand at 31 December 2006, of which 16,925 thousand relates to discontinued operations. Therefore, net financial position for continuing operations for the year improved by 6,734 thousand. Details of the net financial position are shown in the Explanatory and Supplementary notes to consolidated financial statements. Investments: For the financial year ended 31 December 2007, investments were made for a total of 13,150 thousand, divided as follows: INVESTMENTS (Amounts in 000) Assets held Total Total for sale at 31/12/07 at 31/12/06 at 31/12/06 (12 months) (6 months) (6 months) Intangible fixed assets 7,834 2, Tangible fixed assets 5,316 10,020 1,268 Other fixed assets Total investments in non-current assets 13,150 12,693 1,337 The investments in intangible assets amount to 7,834 thousand and mainly concern the acquisition of the Technology publications and the Bias and Fluidtrans Compomac exhibitions. The remainder concerns further development of the new information system, including the purchase of software and licences, and improvements to the portal managed by the subsidiary Expopage. Investments in tangible assets amount to 5,316 thousand and concern work to complete the systems for the new fieramilano exhibition site, furnishings and equipment to support exhibition activities, and restaurant facilities. For further details on investments, refer to the explanatory and additional notes to the consolidated accounts.

30 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Board of Directors Management Report 29 Employees: As at 31 December 2007, permanent employees of the Group numbered 689, for an increase of 57 people over the number of people employed in continuing operations as at 31 December GROUP EMPLOYEES (headcount of indefinite-term employees) at 31/12/07 at 31/12/06 Managers Middle managers and white-collar workers Blue-collar workers 6 6 Total continuing operations Total discontinued operations Total The increase for continuing operations includes 37 additions through the Technology publications company branch, which was acquired during the year, with the remainder being mainly related to the conversion of temporary contracts into permanent positions. The increase posted for upper management is only transitory, given that five employees of the direct parent company left the company on 1 January 2008, as compared with four new managers hired during the latter part of 2007.

31 Fiera Milano Group Consolidated Annual Report Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Operating performance by business segment The Fiera Milano Group s operations are structured in three business segments, i.e.: Venues and Related Services (VRS), Value-Added Services (VAS) and Exhibition and Congress Organisation (ECO). The following table summarises key data for the three business segments. The revenues from sales and services, before adjustments for transactions between business segments, during the financial year ended 31 December 2007 amounted to 391,011 thousand, of which 43.7% relates to Venues and Related Services, 15.9% to Value-Added Services, and 40.4% to Exhibition and Congress Organisation. There were no significant changes in the breakdown of revenues by business segment compared with the progressive data as at 31 December As stated, the Gross Operating Margin (GOM) of 7,131 thousand for the total Group shows a fall of 22,924 thousand compared with the same period of the previous year, attributable as follows by business segment: - Venues & Related Services: GOM at a negative 440 thousand ( 10,120 thousand as at 31 December 2006). As stated earlier, the change is essentially explained by lower margins caused in large part by the cyclical nature of the exhibition calendar, which was partially offset by the cost optimisations achieved; - Value-Added Services: GOM amounts to 4,696 thousand, for an increase from the figure for the same period of the previous year of 1,288 thousand ( 3,408 thousand). This improvement is attributable to nearly all of the companies in this segment, in part due to the significant cost optimisation efforts; - Exhibition & Congress Organisation: GOM amounts to 2,875 thousand vs. 16,913 thousand for the progressive numbers as at 31 December The change is mainly attributable to the company Fiera Milano International owing to the lack of the biennial Mostra Convegno Expocomfort exhibition. The Net Operating Margin (NOM) amount to a negative 10,985 thousand, as compared with the positive 3,247 thousand for the same period of 2006, and were affected, in the Venues & Related Services and Exhibition and Congress Organisation segments, by the decline in GOM; whereas the performance for the Value-Added Services segment improved significantly in that 2006 included the provision for risks and charges allocated by the subsidiary Italian System for Business. The 689 Group Employees as at the end of the financial year may be divided into the three areas as follows: 53% Venues & Related Services; 16% Value-Added Services; and 31% Exhibition and Congress Organisation.

32 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Board of Directors Management Report 31 SUMMARY FIGURES BY BUSINESS SEGMENT (Amounts in 000) 12 months 12 months at 31/12/07 at 31/12/06* Revenues from sales and services % % Venues & Related Services (VRS) 170, , Value-Added Services (VAS) 62, , Exhibition & Congress Organisation (ECO) 158, , Total revenues from sales and services 391, , Adjustments for inter-segment transaction (88,475) (89,059) Total revenues from sales and services 302, ,215 Gross operating margin (GOM) Venues & Related Services (VRS) (440) 10,120 % on revenues (0.3%) 5.3% Value-Added Services (VAS) 4,696 3,408 % on revenues 7.5% 4.9% Exhibition & Congress Organisation (ECO) 2,875 16,913 % on revenues 1.8% 10.3% Adjustments for inter-segment transaction - (386) Total GOM 7,131 30,055 % on revenues 2.4% 9.0% Net operating margin (NOM) Venues & Related Services (VRS) (12,687) (1,036) % on revenues (7.4%) (0.5%) Value-Added Services (VAS) 1,923 (5,654) % on revenues 3.1% (8.1%) Exhibition & Congress Organisation (ECO) 2,655 5,860 % on revenues 1.7% 3.6% Adjustments for inter-segment transaction (2,876) 4,077 Total NOM (10,985) 3,247 % on revenues (3.6%) 1.0% Employees (indefinite-term employees headcount at year-end) Venues & Related Services (VRS) Value-Added Services (VAS) Exhibition & Congress Organisation (ECO) Discontinued operations Total Employees *Figures not audited

33 Fiera Milano Group Consolidated Annual Report Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Operating data In this section, we show the data concerning exhibitions held in the financial year ended 31 December 2007 compared with the previous two years. The data provided indicates the net square metres (sqm) of exhibition space occupied and the number of exhibitors. Exhibitions are classified according to their frequency, i.e. annual, biennial, and multiannual, and for each of the financial years compared, figures are also indicated for exhibitions directly organised by the Group. FIERA MILANO GROUP - SUMMARY OPERATING FIGURES FY ending on 12 months as at 12 months as at 31/12/ /12/ /12/2005 Organised Organised Organised Total by the Group Total by the Group Total by the Group Number of exhibitions: annual biennial multiannual Number of congresses with related exhibition areas: Net sqm of exhibition space sold: 1,767, ,070 1,920, ,350 1,514, ,110 annual (a) 1,292, ,270 1,196, ,445 1,138, ,580 biennial 399, , , , , ,410 multiannual 75, ,260 20,460 10,120 10,120 Number of exhibitors: 29,980 11,720 31,107 12,185 26,050 10,810 annual (b) 23,290 8,540 21,207 8,310 20,880 7,840 biennial 5,060 3,180 6,840 3,575 4,975 2,775 multiannual 1,630-3, of which congresses with related exhibition areas: (a) 62,200-21,810-36,020 - (b) 2,239-1,067-1,330 - The table shows that, for financial year 2007, the annual events reached nearly 1.3 million sqm of net exhibition space, for an increase of roughly 8% over the same period of 2006 and of 14% over This increase is mainly due to the new directly organised exhibitions, such as Build Up, MilanoCheckUp, and Meet Milano, as well as to the increase in congresses with related exhibition space. At 31 December 2007, the share of the total square metres for annual exhibitions amounted to around 73%. The following tables show, for the three periods compared, the portfolio of exhibitions hosted by the Group, indicating the net exhibition sqm occupied and the number of exhibitors, subdivided by frequency, and highlighting exhibitions directly organised (the numbers have been rounded off for ease of reading and comparison).

34 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Board of Directors Management Report 33 FIERA MILANO GROUP - EXHIBITION PORTFOLIO Net sqm of exhibition space Number of exhibitors FY ending 12 months 12 months FY ending 12 months 12 months Annual exhibitions: on 31/12/07 31/12/06 31/12/05 on 31/12/07 31/12/06 31/12/05 Directly organised - Macef primavera 135, , ,650 2,270 2,550 2,540 - Macef autunno/bijoux 108, , ,300 1,870 2,020 2,055 - Bit/Travel& Motion 59,800 58,300 61, G come Giocare Festivity 16,700 16,400 15, Visual communication 16,000 14,740 13, Miart 11,900 11,400 10, La mia casa a) 7,090 11,250 a) Build Up* 42, Milano Check Up* 5, Milanovendemoda (Spring) 7,300 9,300 10, Milanovendemoda (Autumn) 7,070 7,500 9, Plusize (Spring)* 2, Plusize (Autumn) 1,800 1, Meet Milano* 10, I.C.I. a) 1,670 - a) La campionaria delle qualità italiane* 9, La piazza dei mercanti 4,500 4, Wellness 6,900 6, More b) 9,360 - b) Chibidue-Chibimart 7,200 8,200 8, Expotrade (Franchising & Partnership) 5,700 6,415 8, Sposa Italia 8,400 7,600 7, MAM Antiquaria 1,800 1,760 5, Chibimart 4,200 4,600 4, Infosecurity 2,800 2,600 3, Cartoomics - Anteprima Salone Cioccolato e Birra 2,900 1,050 1, Stock e Volume a) a) 740 a) a) 30 Total annual directly organised exhibitions 477, , ,580 8,540 8,310 7,840 Hosted - Salone del mobile/ Complemento d'arredo 161, , ,700 1,320 1,500 1,460 - Eicma Moto 88,500 70,150 85, Micam primavera 73,500 72,650 54,400 1,575 1,580 1,360 - Micam autunno 73,900 73,000 69,400 1,560 1,580 1,540 - Artigiano in fiera 49,500 48,860 49,100 1,450 1,480 1,560 - Mido 56,400 47,500 48, Eicma Bici 23,600 29,200 32, Milano Unica primavera (previous Moda in tessuto & accessori) 31,750 30,000 14, Milano Unica autunno (previous Moda in tessuto & accessori) 33,200 32,500 26, Smau 12,800 12,810 25, Mifur 27,200 23,400 23, Mipel (March) 18,600 19,200 18, Mipel (September) 19,100 18,300 18, Expo italia real estate 14,800 12, Expodental 8,600 9,940 9, Fa la cosa giusta* 2, Promotion Expo 6,700 8,100 6, Io sposa (Spring) 6,900 6,700 6, Io sposa (Autumn)** 7, Expo dei sapori a) a) 6,330 a) a) Promotion trade exibition 6,150 5,100 4, Expo dell'educazione e lavoro a) 4,700 7,300 a) Scoperta 4,500 4, La Primavera in Fiera 6,300 3, Milano Moda Donna (October) 2,200 3,000 3, Milano Moda Donna (February) 2,800 3,000 3, Modaprima (December) 2,500 2,500 2, Modaprima (June) 2,500 2,500 2, Salone del Libro Usato 1,300 a) 1, a) Esposizione Internazionale Canina 8,600 10, Animal Show a) a) 800 a) a) 15 Total hosted annual exhibitions 753, , ,620 12,511 11,830 11,710 Total annual exhibitions: 1,230,570 1,174,455 1,102,200 21,051 20,140 19,550

35 Fiera Milano Group Consolidated Annual Report Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER FIERA MILANO GROUP - EXHIBITION PORTFOLIO Net sqm of exhibition space Number of exhibitors FY ending 12 months 12 months FY ending 12 months 12 months Biennial exhibitions: on 31/12/07 31/12/06 31/12/05 on 31/12/07 31/12/06 31/12/05 Directly organised - Lift c) 6,445 c) c) 175 c) - Enermotive*** 15, Livin Luce*** 44, Intel*** , Tuttofood* 27, Host 103,600 c) 97,660 1,180 c) 1,400 - Rich & Mac 8,100 c) 11, c) MIPPP* 3, Sicurezza c) 26,100 c) c) 400 c) - Mostra Convegno Expocomfort (Servitis) c) 153,700 c) c) 1,740 c) - Sicurtech Expo c) 9,400 c) c) 170 c) - Tau Expo c) 4,600 c) c) 130 c) - MIwine c) 8,500 c) c) 230 c) - Transpotec 56,300 73, Internazionale Antiquariato c) 2,900 c) c) 90 c) - TTS a) c) 25,900 a) c) 190 Total directly organised biennial exhibitions 259, , ,410 3,180 3,575 2,775 Hosted - Xylexpo c) 73,000 c) c) 810 c) - Simei 40,200 c) 37, c) Eurocucina c) 37,880 c) c) 140 c) - Vitrum 29,300 c) 26, c) Eimu c) 19,800 c) c) 130 c) - Venditalia c) 10,400 c) c) 210 c) - Sasmil c) 7,000 c) c) 160 c) - Bimec 3,200 c) 4, c) Enovitis 6,000 c) 4, c) Bias c) 17,670 c) c) 440 c) - Sfortec c) 1,030 c) c) 50 c) - Bimu c) 64,340 c) c) 985 c) - Fluidtrans Compomac c) 17,400 c) c) 340 c) - Euroluce 50,300 c) 35, c) Progetto Città (includes Expo Real Estate) a) a) 26,400 a) a) Photoshow 10,400 c) 11, c) 140 Total hosted biennial exhibitions 139, , ,410 1,880 3,265 2,200 Total biennial exhibitions: 399, , ,820 5,060 6,840 4,975 Multiannual exhibitions/other initiatives: Directly organised - IKME d) d) 10,120 d) d) Expodetergo International d) 14,740 d) d) 210 d) - Shop Project* d) 5,720 d) d) 90 d) Total directly organised multiannual exhibitions 0 20,460 10, Hosted - AB Tech* 11, Plast d) 65,600 d) d) 1,120 d) - Ipack-Ima d) 63,600 d) d) 1,060 d) - Grafitalia d) 26,800 d) d) 330 d) - Converflex d) 13,800 d) d) 250 d) - CPHI 57,900 d) d) 1,400 d) d) - Samab 6,520 d) d) 70 d) d) Total hosted multiannual exhibitions 75, , ,630 2,760 0 Total multiannual exhibitions: 75, ,260 10,120 1,630 3, TOTAL EXHIBITIONS 1,705,190 1,898,680 1,478,140 27,741 30,040 24,720 - Congresses with related exhibition areas 62,200 21,810 36,020 2,239 1,067 1,330 TOTAL 1,767,390 1,920,490 1,514,160 29,980 31,107 26,050 *First edition of exhibition a) The exhibition did not take place **First Autumn edition of exhibition b) The exhibition took place jointly with Macef Autumn ***The Intel exhibition in 2007 is split into Enermotive and LivinLuce c) Biennial exhibition d) Multiannual exhibition

36 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Board of Directors Management Report 35 Significant events after year-end In 2008, as mentioned above, a number of important efforts to optimize and redevelop the Group were completed in accordance with the guidelines set forth in the industrial plan. On 14 January 2008, the Fiera Milano Group and the Reed Group signed an agreement authorising the early termination of the joint venture in Fiera Milano International SpA. The agreement with the Reed Group was reached in acknowledgement of a change in the conditions that led to the partnership confirmed in November The Fiera Milano Group has now defined a business model focusing on commitment to the exhibition organisation industry and the provision of specialised services, and not solely to renting out exhibition space. The profound changes under way in the landscape of international competition have led to the belief that it would now be more appropriate to regain autonomy in order to achieve the growth targets of both Fiera Milano and Reed. Following the early termination of the joint venture, the exhibitions of the Reed Group (Mostra Convegno Expocomfort, Visual Communication, and Infosecurity), which are currently being managed by Fiera Milano International by way of a company branch rental, have returned under the management of their owner. The agreement was finalised upon the conclusion of the consultation procedure of the trade union representatives called for by Article 47 of Italian law no. 428 of 29 December The termination became effective on 15 January 2008, and Reed has paid the Fiera Milano Group a lump sum of 7.65 million. At the same time, Fiera Milano acquired the 47% stake held by Reed in Fiera Milano International at the estimated carrying value as at 31 December 2007 of roughly 556 thousand. Fiera Milano International will continue to manage the exhibitions belonging to the Fiera Milano division, namely spring and autumn editions of Macef, Festivity, Miart, Chibidue-Chibimart Estate, Chibimart Autunno, Lift, and IKME. Fiera Milano and Reed have confirmed their interest in working together and have decided to extend the space rental contract for the Mostra Convegno Expocomfort exhibition, which is currently held at the Milan exhibition site, until at least On 16 January 2008, as part of the Group s process of internationalisation, Fiera Milano SpA and Deutsche Messe AG (owner of the Hannover exhibition site) began the first strategic alliance between these two leaders in Europe s exhibition industry. The joint venture calls for the development of exhibition activities for the two partners in four markets outside Europe, beginning with China. Fiera Milano has acquired a 49% stake in HM Global Germany GmbH ( HM Global ) from Deutsche Messe AG. HM Global operates in China with around 60 employees and through two companies, Hannover Fairs Shanghai Ltd (based in Shanghai) and Hannover Fairs China Ltd (based in Hong Kong), and two permanent offices in Guangzhou and Beijing. Fiera Milano s Shanghai office will now be a part of HM Global. The purchase price was set at 8.8 million up front and 2.6 million in five subsequent instalments based on the pre-tax profit expected by the industrial plan guaranteed by Deutsche Messe for the financial years ending 31 December Average pre-tax profit for HM Global for the period is expected to be 3.3 million on average annual revenues of 15 million. In the event that pre-tax profits should fail to reach this guaranteed minimum, the instalment for that year is to be reduced proportionately.

37 Fiera Milano Group Consolidated Annual Report Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Procedures have begun in order to merge within the first semester 2008 the company SIFA (Società Italiana Fiere Agroalimentari) into Fiera Milano International after the latter has become a wholly-owned subsidiary following the termination of the joint venture with the Reed Group. The purpose of this transaction is to rationalise the structure of the Fiera Milano Group, while at the same time making it possible to create an even stronger exhibition organiser with a diversified exhibition portfolio, in which Macef and Tuttofood will play a leading role. During the early part of 2008, the buy-back process continued, and the direct parent company purchased 291,450 treasury shares at an average price of 4.23, for a total of some 1,234 thousand. As of the date of this report, Fiera Milano SpA now holds, either directly or indirectly, a total of 725,393 treasury shares, which equals 2.14% of share capital.

38 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Board of Directors Management Report 37 Future estimated business trend On 21 December 2007, the Board of Directors of Fiera Milano SpA approved the Group s budget for 2008 and issued a related press release to the market. The optimisation and redevelopment efforts launched at the start of 2007 are beginning to bear fruit, and the expected return to profitability in 2008 not only confirms the targets of the industrial plan, but exceeds these targets at the level of NOM. The 2008 budget confirms the strategic guidelines of the industrial plan aimed at strengthening Fiera Milano s position as an international leader for the quality of its exhibitions and the excellence of the services the organisation provides. Net exhibition space sold in 2008 is expected to come to roughly 1.7 million square metres, which is lower than the 1.8 million sqm target for 2008 based on the plan due to continuing difficulties in the marketplace, particularly with the cancellation of a number of new exhibitions. Consolidated revenues for 2008 are expected to exceed 320 million, as compared with the 400 million target of the industrial plan. This reduction is the effect of the aforementioned decline in net exhibition space sold, as well as the lower revenues from a number of acquisition projects which were expected to be completed in 2007 in order to have their full effect in Consolidated GOM for 2008 should reach some 28 million, for a sharp increase over Despite the decline in revenues, GOM for 2008 is expected to be only slightly lower that the target of 31 million set by the industrial plan, thanks to the rationalisation and development efforts of 2007 and in consideration of the fact that the plan introduced a contingency of 10 million in order to face potential variations in the execution of the plan. GOM attributable to the Group (i.e. excluding minority interests) should also reach roughly 28 million, thereby increasing by more than 15% over the target set by the industrial plan. Consolidated NOM is expected to come to roughly 15 million, improving by 30% over the forecasts of the industrial plan, due in part to efforts to control investments and to the consequent decline in depreciation and amortisation. Development investments, which are expected to total some 40 million in 2008, are to focus on the acquisition of exhibitions and on the growth of the Group in the technical publishing sector, thereby confirming the guidelines of the industrial plan. Rho (Milan), 26 March 2008 On behalf of the Board of Directors Michele Perini Chairman

39

40 CO N S O L I D AT E D F I N A N C I A L S TAT E M E N T S AT 3 1 D E C E M B E R Group Consolidated Financial Statements Explanatory and supplementary notes to consolidated financial statements Attachments: - List of consolidated companies and other investments

41 Fiera Milano Group Consolidated Annual Report Financial Statements FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER CONSOLIDATED BALANCE SHEET 31/12/07 31/12/06 ( 000) Notes ASSETS Non-current assets 1-44 Property, plant, and equipment 43,472 48,770 2 Property, plant, and equipment - leased Investment property Goodwill and other intangible assets of an indefinite life 113, ,853 4 Other intangible assets 10,315 11,645 5 Investments Other financial assets Trade and other receivables 14,430 12, of which vis-à-vis related parties 12,618 12,618 7 Deferred tax assets 16,239 19,220 Total 197, ,192 Current assets 8 Trade and other receivables 77,825 75, of which vis-à-vis related parties 3,061 3, Inventories 5,999 9,678 Assets under construction for customers Current financial assets 63,389 92, Cash and cash equivalents 17,378 14,592 Total 164, ,363 Assets held for sale Assets held for sale - 34,426 Total assets 362, ,981 EQUITY AND LIABILITIES 13 Share capital and reserves Share capital 33,457 33,596 Share premium reserve 43,145 65,738 Revaluation reserve - - Other reserves 8,851 8,801 Retained earnings/(losses) -3,529 5,407 Profit/(loss) for period -16,685-30,916 Total Group Equity 65,239 82,626 Minority Interest 8,866 11,061 Total Equity 74,105 93,687 Non-current liabilities Bonds outstanding Bank borrowings 11,916 18, Other financial liabilities Provisions for risks and charges 6,054 7, Employee benefit provisions 9,641 11, Deferred tax liabilities 17,835 16, Other non-current liabilities 216 2,067 Total 45,666 55,449 Current liabilities Bonds outstanding Bank borrowings 72,989 97, Trade payables 50,889 47, Down payments received 77,432 65, Other financial liabilities 12 6, of which vis-à-vis related parties - 5, Current provisions for risks and charges 4,224 1, Current tax liabilities 4,177 5, Other current liabilities 32,718 28, of which vis-à-vis related parties 11,379 13,676 Total 242, ,708 Liabilities held for sale Liabilities held for sale - 26,137 of which vis-à-vis related parties - 2,668 Total Liabilities 362, ,981

42 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Financial Statements 41 CONSOLIDATED INCOME STATEMENT 31/12/07 31/12/06 ( 000) (6 months) Notes 28 Revenues from sales and services 302, , of which vis-à-vis related parties 3,354 1,326 Total revenues 302, , Costs of materials 6,110 3, Costs for services 163,562 66, of which vis-à-vis related parties 12,124 5, Costs for use of 3rd-party assets 74,343 33, of which vis-à-vis related parties 68,119 33, Payroll & employee benefit costs 52,797 23, Other operating expenses 6,569 3,183 Total operating costs 303, , Other revenues 7,976 1, of which vis-à-vis related parties 4, Gross Operating Margin (GOM) 7,131-22, Depreciation of property, plant, and equipment 9,984 5,248 Depreciation of investment property Amortisation of intangible assets 3,854 1, Adjustments to asset value 1,424 2, Allowance for doubtful accounts and other provisions 2,854 8,286 Net Operating Margin (NOM) -10,985-40, Finance income 5,333 2, Finance expense 5,172 1,922 Valuation of financial assets - - Profit/(loss) of equity-accounted companies - - Profit/(loss) before income tax -10,824-39, Income tax 5,628-7,699 Profit/(loss) for period from continuing operations -16,452-31, Profit/(loss) for period from discontinued operations 1,396-1,808 Profit/(loss) for period -15,056-33,745 Profit/(loss) attributable to Minority Interest 1,629-2,829 Profit/(loss) attributable to the Group -16,685-30, Earning (loss) per share ( ) Base Diluted

43 Fiera Milano Group Consolidated Annual Report Financial Statements FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER CONSOLIDATED CASH FLOW STATEMENT 31/12/07 31/12/06 ( 000) Initial net cash & cash equivalents 14,592 15,059 Cash flow from operating activities Adjustments for non-cash items: Net profit/(loss) attributable to Group from continuing operations (18,081) (29,108) Net profit/(loss) attributable to Minority Interest 1,629 (2,829) Depreciation & amortisation 13,838 6,970 Provisions, write-downs and adjustments to value 4,278 10,361 Net change in provision for post-employment benefits (1,670) 311 Change in deferred taxes 4,488 (8,266) Net impact of discontinued operations (including profit/loss)* Operating profit before changes in Net Working Capital 4,784 (21,798) Sources/uses originating from change in Net Working Capital 6,452 55,054 inventories and work in progress 3,679 (3,438) trade and other receivables (3,510) (5,623) trade payables and down payments received 15,280 6,448 tax liabilities (1,716) (3,606) provisions for risks and other current liabilities 5,012 (6,243) of which vis-à-vis related parties (2,297) (3,323) current financial assets/liabilities (1,549) 66,231 Net impact of discontinued operations* (10,744) 1,285 Total 11,236 33,256 Cash flow from investing activities Investments in non-current assets: Tangible (5,316) (8,752) Intangible (7,834) (2,604) of which company branches (4,936) - Other non-current assets (1,806) - Decreases Net impact of discontinued operations* 20,432 (2,140) Total 5,760 (13,453) Cash flow from financing activities Change in Group share capital and reserves (702) 468 Change in Minority Interest share capital and reserves (3,759) - Change in non-current financial assets/liabilities (6,674) (3,269) Change in Provisions for risks and Other non-current liabilities (2,705) (101) Dividends paid out (65) (16,790) Reclassifications to assets held for sale* (537) (346) Total (14,442) (20,038) Cash flow in the period 2,554 (235) Net cash & cash equivalents of discontinued operations 232 (232) Net cash and cash equivalents at end of period 17,378 14,592 Additional information 31/12/07 31/12/06 Income taxes paid 74 1,618 Interest paid (a) 3,818 1,383 Interest earned (a) 1, *Assets and liabilities held for sale were sold during FY 2007 (a) Data as at 31/12/06 has been restated

44 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Financial Statements 43 STATEMENT OF CHANGES IN CONSOLIDATED EQUITY ( 000) Minority Minority Share Profit/ Interest Interest Total Share premium Legal Other Retained (loss) for Total capital & profit/(loss) Minority Total capital reserve reserve reserves earnings period Group reserve for period Interests Equity Balance as at 30 June ,583 65,650 6,728 1,820-3,716 19, ,153 14,106 6,329 20, ,588 Allocation of earnings at 30/06/06: 19,088-19,088-6,329-6, Legal reserve Dividend distribution -10,079-10,079-6,711-6,711-16,790 Paid capital increase Fair value of stock option for the year ended on 31 December Cancellation of Italian Sistem for Business SpA put option Buy-out of I.S.B. SpA minorities Translation reserve Net profit/(loss) at 31/12/06-30,916-30,916-2,829-2,829-33,745 Balance as at 31 December ,596 65,738 6,778 2,023 5,407-30,916 82,626 13,724-2,663 11,061 93,687 Allocation of earnings at 31/12/06: -30,916 30, ,663 2, Use of share premium reserve -21,980 21, Dividend distribution Adjustments for treasury shares Fair value of stock option for the year ended on 31 December Buy-out of Fiera Milano Tech SpA minorities - -1, ,107-2,107 Sale of investments - -2,334-2,334-2,334 Translation reserve Capital increases Net profit/(loss) at 31/12/07-16,685-16,685 1,629 1,629-15,056 Balance as at 31 December ,457 43,145 6,778 2,073-3,529-16,685 65,239 7,676 1,190 8,866 74,105

45 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Explanatory and supplementary notes to consolidated financial statements The consolidated financial statements of the Fiera Milano Group, for the financial year ended 31 December 2007, were approved by the Board of Directors on 26 March 2008, which authorised their publication. The Shareholders of Fiera Milano SpA, in their meeting of 10 January 2007, passed a resolution changing the year-end financial statement date, moving it from 30 June to 31 December, and similar resolutions were also passed by the subsidiaries. Consequently, the income statement as at 31 December 2006 only refers to a six-month period, with the resulting effects on the comparability of figures. The Fiera Milano Group covers all typical phases of the exhibition and congress industry, presenting itself as one of Europe s largest integrated players. For greater detail on Group structure, reference should be made to the specific section in the Management Report. Accounting standards and consolidation policies These financial statements have been prepared in accordance with the International Accounting Standards (IASs) and International Financial Reporting Standards (IFRSs) in force at 31 December 2007, issued by the International Accounting Standard Board (IASB) and endorsed by the European Union. The requirements of CONSOB (Italian securities & exchange commission) resolution no of 27 July 2006 and of CONSOB memorandum no of 28 July 2006 have also been taken into account. The financial year ended 31 December 2007 is the first in which IFRS 7, Financial Instruments: Disclosures, has been applied. These explanatory notes thereby reflect the requirements of said document. FORM AND CONTENT OF THE CONSOLIDATED FINANCIAL STATEMENTS As regards the format of consolidated financial statements, the Group has made the following choices: - The consolidated balance sheet is presented in facing sections with a separate indication of Assets, Liabilities, and Equity. Assets and Liabilities are in turn shown in the consolidated Balance Sheet classified as current, non-current, and held for sale; - The consolidated income statement is shown in a multiple-step format and items are analysed by nature since this approach provides reliable information that is more relevant than classification by function; - The cash flow statement is presented using the indirect method; - The statement of changes in equity is presented with separate indication of the period s results and of each revenue and cost that has not gone through profit or loss but has instead been allocated directly to equity on the basis of specific IASs and IFRSs.

46 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments 45 Numerical data are shown in thousands of euro as allowed by current regulations unless specifically indicated otherwise. The independent auditor, PricewaterhouseCoopers SpA, has audited the annual report and accounts. BASIS AND AREA OF CONSOLIDATION Consolidated accounts include the direct parent company Fiera Milano SpA and its subsidiary companies. The present set of accounts has been prepared on the basis of financial statements as at 31 December 2007 approved by consolidated companies Board of Directors and prepared according to Group accounting policies, which refer to IASs/IFRSs. The list of companies consolidated as at 31 December 2007 is shown on page 106. Compared with 31 December 2006 the consolidation area has changed due to Eurostands SpA s exit from the Group and to the merger of Italian System for Business SpA into Fiera Milano SpA. Subsidiary companies Subsidiaries, i.e. companies controlled, are consolidated from the date when control was effectively transferred to the Group and cease to be consolidated on the date when control is transferred to third parties. The carrying value of consolidated investments is eliminated against the corresponding portion of equity as at acquisition date, against the taking into accounts via 100% line-by-line consolidation of assets and liabilities shown in the respective balance sheets. For recognition and measurement of acquisitions and subsidiaries the purchase method is used, as required by IFRS 3 (see the section Business Combinations below). The amount of subsidiaries capital and reserves pertaining to third-party minority interest is booked in the equity item Minority interest. Similarly, the portion of the consolidated profit or loss pertaining to minority interest is shown in the item called Profit or loss attributable to minority interest. Joint ventures The carrying value of investments in jointly-controlled companies that are proportionally consolidated in consolidated accounts is eliminated against the relevant part of equity pertaining to the Group against inclusion of assets and liabilities for the amount corresponding to the Group s percentage of ownership. Similarly, each profit and loss item is posted in consolidated accounts for the amount corresponding to the Group s percentage of ownership. Payable and receivable items and all other transactions between the associate company and Group companies are eliminated for the portion corresponding to Group ownership. The remaining balances are shown in the balance sheet and income statement as minority interest. Intercompany transactions Profits and losses not yet realised stemming from transactions between consolidated companies are eliminated as are all payable and receivable items and all other transactions between consolidated companies.

47 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Conversion of non-euro financial statements At the end date of the year, the assets and liabilities of consolidated companies whose accounting currency is not the euro are converted into the presentation currency of the Group s consolidated accounts at the exchange rate in force on that date. Income-statement items are converted at the year s average exchange rate. Differences stemming from adjustment of opening equity to end-of-year exchange rates are posted in a specific equity account, together with the differences between the results in the statement of income and in the balance sheet. BUSINESS COMBINATIONS Business combinations are recognised in accounts using the purchase method envisaged by IFRS 3. Acquisition cost is equal to the fair value, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity instruments issued by the acquirer, in exchange for control of the acquiree, plus any costs directly attributable to the business combination. Consistently with the requirements of IFRS 3, when the acquisition is initially recognised in accounts price adjustments contingent upon future events are immediately included as part of purchase cost if they are likely to occur and can be reliably estimated. A business combination s cost is allocated by recognising, as at acquisition date, the fair value of assets and liabilities identified at the time of purchase. The positive difference between purchase cost and the portion of the fair value of assets and liabilities identifiable at the time of purchase is recognised as goodwill among assets. If the difference is negative it is directly recognised as a gain in the income statement. Consistently with this, minority interest s share of equity is calculated according to the fair value set on assets and liabilities at the date when control is taken over, excluding any related goodwill. In attributing the cost of business combinations, the Fiera Milano Group draws on the information available and, for the more important business combinations, on external valuations. Business combinations achieved in stages If a business combination is created in several steps with subsequent share exchanges, each transaction is treated separately, using the cost of the transaction and fair-value information as at the date of each transaction to determine the amount of any goodwill associated with that transaction. When a subsequent purchase makes it possible to gain control of an entity, the stake previously owned is revalued according the fair value of identifiable assets and liabilities determined as at the subsequent purchase date. The corresponding amount of this revaluation is recorded in equity attributable to the Group. Transactions concerning minority interests The Group has opted, as regards accounting treatment, to treat transactions concerning minority interests as transactions with third parties.

48 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments 47 In the case of sale of a minority interest any income and costs stemming from the transaction go through profit and loss. Purchases after control has been gained no longer give rise to fair-value revaluation of identified assets and liabilities. The positive or negative difference between purchase cost and the relevant share of book equity is either recognised as an increase of the goodwill recognised at the time of acquisition of control or is booked to the income statement. ACCOUNTING POLICIES Tangible Assets Property, plant and equipment Property, plant and equipment are recognised at purchase or production cost, inclusive of directly allocable costs, and adjusted by their respective cumulative depreciation. Tangible assets are systematically depreciated in each accounting period at straight-line rates, based on economic/technical rates determined according to assets residual possibilities of use. Routine maintenance costs are charged to the income statement when they are incurred. The replacement cost of identifiable components of complex assets is allocated to the asset and depreciated over their useful lives. The residual carrying value of the component being replaced is posted in the income statement. The leasehold improvements are classified in property plant and equipment based on the nature of the cost borne; the depreciation period corresponds to the lower of the residual useful life of the tangible assets and the residual period of the rental contract. The depreciation rates applied are those listed below: - Buildings 33.33% - Office furniture and machinery 12.00% - Exhibition furniture and equipment 27.00% - Restaurant equipment 25.00% - Metal items for hiring out 13.50% - Sundry machinery and equipment 15.00% - Motor vehicles 25.00% - Site motor vehicles 20.00% - Electronic machines 20.00% - Plant and machinery 10.00% - Telephone systems 20.00% - Alarm systems 30.00% - Furnishings 12.00%

49 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER If there are signs of deterioration, tangible assets are subjected to impairment testing using the procedure illustrated in the section Impairment of assets. Property, plant, and equipment (leased) There are two types of lease contracts, i.e. finance leases and operating leases. A lease is considered to be a finance lease when it transfers a significant and substantial part of the risks and rewards associated with the asset s ownership to the lessee. Given this, as envisaged by IAS 17 ( Leases ), a leasing deal is considered to be a finance lease when the following factors are individually or jointly present: - The lease transfers ownership of the asset to the lessee at the end of the lease term; - The lessee has the option to purchase the asset at a price which is expected to be sufficiently lower than fair value at the date the option becomes exercisable so that, at the inception of the lease, it is reasonably certain the option will be exercised; - The lease term covers most of the asset s economic life, even if title is not transferred; - At the inception of the lease, the present value of minimum lease payments amounts to at least the fair value of the leased asset; - The lease assets are of such a specialised nature that only the lessee can use them without major modifications being made. Assets at Group companies disposal thanks to finance lease contracts are recognised in accounts as tangible assets at their fair value as at purchase date and are depreciated throughout their estimated useful life. The relevant liability to the lessor is posted in the balance sheet as a current or non-current liability depending on whether the due date occurs within or after 12 months. Lease instalment payments are split between principal, which goes to reduce financial liabilities, and interest, charged to the income statement as finance expense. In the case of operating leases, instalments are recorded in the income statement on a prorated basis throughout contract duration. Intangible assets An intangible asset is recognised in accounts only if it is identifiable, controllable, expected to generate future economic benefits, and if its cost can be reliably measured. Goodwill and intangible assets with an indefinite useful life Goodwill and other intangible assets with an indefinite useful life basically relating to exhibition trademarks and publishing titles are not amortised. Goodwill Goodwill is the excess of the purchase cost over the acquirer s share of fair value relating to the net value of

50 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments 49 the acquired entity s identifiable assets and liabilities. After initial recognition in accounts, goodwill is measured at cost less any loss of value stemming from impairment testing (see the section Impairment of assets ). Trademarks and similar rights with an indefinite useful life Consistently with the requirements of IFRS 3 ( Business Combinations ) and IAS 38 ( Intangible Assets ), acquisitions of exhibitions and/or publishing titles are assessed to see whether the trademark via which the business activity is performed qualifies for recognition separately from goodwill. In addition, trademarks of exhibitions (meaning exhibitor lists, visitor lists, and the exhibition s actual trademark) and of publishing titles are deemed to have an indefinite useful life when no factors of a general economic, regulatory or legal nature or factors specific to the entity or to the sector in which it is active emerge such as to set a foreseeable limit on the period during which the asset is expected to generate net cash inflows. Other intangible assets Intangible assets with a finite life are measured at purchase or production cost, including any ancillary costs, and systematically amortised at straight-line rates for the rest of their projected future usefulness. If there are signs of deterioration, tangible assets are subjected to impairment testing as illustrated in the section Impairment of assets. Industrial patents and rights to use intellectual properties, licenses, and concessions are amortised over a period ranging from 3 to 10 years, starting in the year when their cost is incurred. Research costs are charged to expense when they are incurred. In compliance with IAS 38, development costs relating to specific projects including the launch of new exhibitions - are capitalised when their future benefit is considered reasonably certain and when such costs can be reliably measured. They are amortised for the period when expected future benefits emerge against the same project. In the case of capitalised costs relating to the new information system, amortisation has been calculated over a 5- year period. The carrying value of costs is reviewed annually at year-end, or more often if there are any particular reasons for doing so, to analyse fair value for the purposes of recognising any impairment of value. Impairment of assets Goodwill and other intangible assets with an indefinite life are subjected to regular impairment testing on an annual basis, at year-end, or more often if indications of impairment of value emerge. Tangible and intangible assets with a finite life, which are subjected to depreciation and amortisation, are tested for impairment, only when there are indications of impairment of value. The recoverability of amounts posted is checked by comparing carrying value with the highest between the asset s net selling price and its value in use. Net selling price is the amount obtainable from sale of an asset in a transaction between independent, informed, and willing parties, less the costs of disposal. In the absence of binding agreements, it is necessary to use the prices expressed by an active market, or the best information available taking into account factors such as recent transactions for similar assets completed in the same business sector. Value in use is calculated on the basis of discounting to present value at an appropriate

51 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER interest rate expressing the cost of equity of a debt-free entity with a similar risk profile of cash flows expected to be generated by the asset (or by a group of assets the so-called cash-generating units (CGUs)) and by its disposal at the end of its useful life. With the exception of goodwill, when an asset s impairment ceases or decreases, the asset s carrying value is reinstated only up to the new estimate of recoverable value. The reinstated value cannot exceed the value that would have been measured if there had been no impairment. Reversal of impairment is recognised as income in the income statement. Financial assets In accordance with the requirements of IASs 39 and 32, financial assets are classified in the following four categories: 1. Financial assets at fair value through profit or loss; 2. Held-to-maturity (HTM) investments; 3. Loans and receivables; 4. Available-for-sale (AFS) financial assets. Classification depends on the purpose for which assets are purchased and held. Management decides on their initial classification at the time of their initial recognition in accounts, subsequently checking this classification at each balance-sheet date. Financial assets are initially recognised at cost, which is equal to fair value plus ancillary transaction costs. Subsequent measurement depends on the type of instrument concerned. Financial assets at fair value through profit or loss which include held-for-trading (HFT) financial assets and financial assets designated as such at the time of initial recognition - are classified among current financial assets and measured at fair value, with the gains or losses stemming from this valuation recognised in the income statement. HTM assets are classified among current financial assets if they mature in less than 12 months and among noncurrent financial assets if maturity exceeds that period, and are subsequently measured according to amortised cost. The latter is calculated using the effective interest rate method, taking any purchase discounts or premiums into account to spread them over the entire period up to maturity, less any impairment. Loans and receivables are measured at amortised cost based on the financial assets original effective rate of return. Short-term loans and receivables are recognised at face value because their present value would not be significantly different. At each balance sheet date, Group companies measure the recoverable amount of such loans and receivables, taking expected future cash flows into account. AFS assets are classified among non-current assets, unless the company intends to sell them within 12 months after balance-sheet date, and are measured at fair value. The gains or losses arising from such measurement are posted in a separate equity account until the items are sold or recovered or in any case cease, or until it is ascertained that they have suffered impairment, in which case the gains or losses accumulated until that moment in equity are posted in the income statement.

52 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments 51 Investments in other companies In accordance with the requirements of IASs 32 and 39, investments in companies other than subsidiaries and associates are classified as AFS (available for sale) and are measured at fair value except for cases when fair value is not available. In such cases the cost method is used. Gains and losses stemming from adjustments of value are recognised in a specific equity reserve. In the case of permanent impairment or of sale, the gains and losses recognised until then in equity are posted in the income statement. Other financial assets The capital redemption insurance policies held by the Group and shown among current financial assets were designated at the time of initial recognition as financial assets at fair-value posted in the income statement. Gains and losses stemming from fair valuing are shown in the income statement. Receivables Loans and receivables are initially recognised at their fair value. After that they are measured at amortised cost based on the financial asset s original effective rate of return. Short-term loans and receivables are recognised at face value because their present value would not be significantly different. At each balance sheet date, Group companies measure the recoverable amount of such loans and receivables, taking expected future cash flows into account. Inventories Inventories are measured at the lowest out of purchase or production cost, inclusive of ancillary costs, calculated according to the FIFO method, and the presumable net realisable cost based on market trends. Group inventories consist mainly of suspended costs relating to activities pertaining to future accounting periods, together with consumables and products under construction for subsequent sale. Construction contracts Construction contracts for customers are measured based on the amounts agreed upon in relation to construction completion status using the cost-to-cost method. Advances from customers are deducted from inventory value within the limit of the revenues accruing, and the remainder is recognised as a liability. Any losses on such contracts are recognised in the income statement in their entirety when they become known. Cash & cash equivalents Cash and cash equivalents comprise cash to hand, bank demand deposits and cash investments with an original maturity of not more than three months. The definition of cash and cash equivalents in the cash flow statement is the same as that of the balance sheet.

53 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Assets and liabilities held for sale This category includes assets and liabilities (or asset and liability disposal groups/discontinued operations) whose carrying value will be recovered primarily via sale rather than via continued utilisation. For this to happen, the following conditions must be met: - The assets (or disposal group) must be available for immediate sale in their present conditions; - The sale must be highly probable, i.e. the company must be committed to a programme for their disposal; activities to identify a buyer must have been initiated; and completion of sale must be scheduled to take place within one year of the date of classification in this category. Assets held for sale are measured at the lowest between their net carrying value and their fair value less costs to sell. If an asset that is depreciated or amortised is reclassified to this category, the depreciation or amortisation process is discontinued at the time of reclassification. In compliance with IFRS 5, data relating to discontinued operations are presented as follows: in two specific balance sheet accounts: Held-for-sale assets and Held-for-sale liabilities; in a specific income statement account: Net income/(loss) for period from discontinued operations. Equity Treasury shares The par value of treasury shares is deducted from share capital and any amount in excess of par value is deducted from the share premium reserve. Gains and losses on trading of treasury shares are shown in a specific equity reserve. Costs for capital transactions Costs directly attributable to operations on capital are recognised as a direct reduction of equity. Trade payables, tax liabilities, down payments received, and other liabilities Payables, advances and other liabilities are initially recognised at their fair value. After that, they are measured at amortised cost. Payables are derecognised when underlying financial obligations have been discharged. Liabilities, if they have a due date in excess of twelve months, are discounted to present value using an interest rate reflecting market assessments of the time value of money and specific risks connected with the liability concerned. Discounting interest is classified in finance expense.

54 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments 53 Derivative instruments A derivative or any other contract with the following characteristics: (i) its value changes in response to the change in an interest rate, the price of a financial instrument, a commodity price, a foreign-exchange rate, a price or rates index, creditworthiness, or another preestablished underlying variable; (ii) it requires no net initial investment or, if initial investment is required, one that is smaller than would be required for a contract from which a similar response to changes in market factors would be expected; (iii) it is settled at a future date, it is classified as a financial instrument and consequently fair-valued at the end of each accounting period. The effects of fair-value measurement are recognised in the income statement as finance income/expense. Put options on minority interest In accordance with IAS 32, the sale of put options attributed to minority interest results in a contractual obligation to purchase the stake. Initial recognition of this requires posting of a financial liability for the present amount to be repaid set against equity attributable to minority interest and, if this is insufficient, against equity attributable to the Group. Consistently with this, the relevant liability is measured at the fair value corresponding to the option s estimated exercise price based on the best information available. The change in fair value between accounting periods is posted in the income statement as finance expense/income. Provisions for risks and charges Provision is made for risks and charges when the Group must meet a present obligation (legal or constructive) stemming from a past event, the amount of which can be reliably estimated and for settlement of which an outflow of resources is likely to be necessary. If expectations of resource outflow go beyond the next financial year, the obligation is recognised at its present value via discounting of future cash flows at a rate that also considers the time value of money and the liability s risk. Risks for which manifestation of a liability is only possible, not probable, are disclosed in the specific section for Guarantees given, commitments, and other contingent liabilities and no provisions are allocated. Bank borrowings and other financial liabilities Financial liabilities are initially recognised at cost as represented by fair value of the funds received net of related costs incurred to receive the loan. After initial recognition, borrowings are measured according to amortised cost calculated via application of the effective interest rate. Amortised cost is calculated taking into account issuance costs and any discount or premium envisaged at the time of settlement.

55 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Employee benefits Employee benefits paid out upon or after cessation of the employment relationship consist mainly of what in Italy is called trattamento di fine rapporto (or TFR, which is often translated as employee severance indemnities ), which is governed by Article 2120 of the Italian civil code. In accordance with IAS 19, employee severance indemnities are considered a defined-benefit plan, i.e. a plan consisting of benefits provided after cessation of employment, which constitutes a future obligation for which the Group assumes actuarial risks and relative investments. As required by IAS 19, the Group uses the projected unit credit method to determine the present value of its defined-benefit obligations and the related current service costs. This calculation requires the application of objective and mutually compatible actuarial assumptions concerning demographic variables (mortality rate, employee turnover) and financial variables (discount rate, future increases of salary levels). The Fiera Milano Group has opted for immediate recognition in the income statement of any gains or losses stemming from changes in actuarial assumptions, without using the corridor method, which allows recognition in the income statement based on employees expected average residual working life of the cumulative net value of actuarial gains and losses that exceed 10% of the highest between any assets servicing the plan and the present value of the obligation as at balancesheet date. As of 1 January 2007, following social security reform, accumulating employee severance indemnities are to be allocated to pension funds, to the INPS treasury fund, or, in the case of companies with fewer that 50 employees, may remain within the company as has been done in previous years. Employees have been given the option to choose the destination of their severance indemnities through 30 June In that regard, the allocation of accumulating employee severance indemnities to pension funds or to INPS means that a portion of these indemnities will be classified as a defined-contribution plan in that the company s obligation is solely the payment of contributions to either the pension fund or to INPS. The liability related to past severance indemnities continues to be a defined-benefit plan to be measured on an actuarial basis. More specifically, the change in the nature of the benefit has made in necessary to recalculate the value of the provision for past severance indemnities accumulated through 31 December 2006 due, essentially, to the exclusion from the actuarial calculation of the assumptions related to salary increases and to the update of the financial assumptions. The difference from the balance as at 31 December 2006 was expensed in a lump sum on the income statement. Stock options Options to subscribe and purchase shares awarded to Group employees and directors give rise to recognition of a cost posted in payroll costs & employee benefits set against a corresponding increase in equity. Options are measured at fair value as at grant date and the related cost is posted in the income statement during the vesting period. Fair value is calculated using specific mathematical and financial models. Revenue recognition Revenue is recognised to the extent that it is probable that the economic benefits associated with the sale of

56 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments 55 goods or rendering of services will flow to the Group and the relevant amount can be measured reliably. Revenues are posted at the fair value of the consideration received or receivable, taking into account any trade discounts and quantity-based reductions granted. As regards the sale of goods, revenue is recognised when the company has transferred the significant risks and rewards of ownership to the buyer. As instead regards the rendering of services, revenue is recognised when service is rendered. Consistently with the requirements of IAS 18 paragraph 25, in the case of revenues for the rendering of services relating to exhibitions and congresses, these are recognised when these exhibitions and congresses actually take place, because it is during the actual exhibition/congress that most of the related costs are borne. When it is probable that an exhibition s total costs will exceed its total revenues, the expected loss is recognised as a cost by making specific provision. Revenues accruing in the period concerning construction contracts are posted on the basis of the amounts agreed in relation to completion status determined using the cost-to-cost method. Operating costs Costs are recognised when they relate to goods and services sold or used in the period or on an accrual accounting basis when their future usefulness cannot be precisely identified. Payroll costs include, given that they are substantially an item of remuneration, stock options granted to Group managers and directors. The portion of stock option cost assigned to the period is determined according to the length of the period covered by the stock-option scheme. Payroll costs also include, on an accrual accounting basis, taking into account the effective period of service concerned, directors compensation, both fixed and variable. Costs that are not eligible for capitalisation in balance sheet assets are charged to the income statement in the period when they are incurred. Finance income and expense Finance income and expense are recognised in accounts based on timing that considers the effective yield/expense of the asset/liability concerned. Income taxes For each company income taxes are recorded according to estimated taxable income in compliance with current tax rates and regulations. Income taxes are recognised in the income statement, except for those relating to items directly debited or credited to equity, in which case the tax effect is directly recognised in equity.

57 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Deferred taxes are measured according to the taxable temporary differences existing between the carrying amounts of assets and liabilities and their tax base and are classified among non-current assets and liabilities. Deferred tax assets are recognised to the extent that there is likely to be sufficient future taxable income against which the positive balance can be utilised. The carrying amount of deferred tax assets is subject to review at the end of the year. Deferred tax assets and liabilities are measured according to the tax rates that are expected to be applied in the period when the deferrals materialise, considering the tax rates in force or those that are scheduled to come into force subsequently. Foreign currency transactions Transactions in foreign currencies are recorded at the current exchange rate in force on transaction date. Monetary assets and liabilities denominated in foreign currencies are converted at the exchange rate in force on balance sheet date. Foreign exchange differences generated by the extinction of monetary items or their translation at different exchange rates to those at which they were translated at the time of initial recognition in the period, or in previous periods, are recognised in the income statement. Foreign exchange differences are shown in finance expense and income. Dividends Dividend revenues are recognised in accounts at the time when shareholders right to receive payment has been established. This is normally the date of the Annual General Shareholder Meeting that approves dividend distribution. Earnings per share (EPS) Basic EPS is calculated by dividing Group profit or loss attributable to ordinary equity holders of the direct Parent Company by the weighted average number of ordinary shares outstanding in the period, excluding treasury shares. Diluted EPS is calculated by adjusting the weighted average number of shares outstanding to allow for all dilutive potential ordinary shares. Use of estimates Preparation of financial statements and related notes applying IFRSs requires estimates and assumptions to be made that affect the amounts of balance sheet assets and liabilities and disclosures concerning potential assets and liabilities as at balance sheet date. Actual results might differ from these estimates. Estimates are used to recognise provisions for doubtful accounts, depreciation & amortisation, employee benefits, income taxes, and other provisions and reserves. We review estimates and assumptions regularly and the effects of any change are immediately reflected in the income statement.

58 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments 57 Segment reporting The Fiera Milano Group has adopted business segments as its primary basis for segment reporting. In 2007, the Fiera Milano Group had no significant operations abroad. Given this, it has not adopted a secondary reporting structure by geographical segment. Its business segments are as follows: - Venue & Related Services (VRS), concerning operation of equipped exhibition venues; - Value-Added Services (VAS), concerning the provision of services relating to exhibitions and other business activities; - Exhibition & Congress Organisation (ECO), concerning the organisation of exhibitions and congresses. The income statement balances relating to Eurostands discontinued operations refer to the value-added services business segment. The loss for the year from discontinued operations has been shown in a separate line as in the draft income statement. The following table summarises segment income statement data for the financial year ended 31 December 2007: INCOME STATEMENT AS AT 31/12/07 ( 000) VRS VAS ECO Adjustments Consolidated Revenues from sales and services to third parties 101,811 43, , ,536 Revenues from intersegment sales and services 68,866 18,313 1,296-88,475 Total revenues 170,677 62, ,060-88, ,536 Costs of materials used in operations 471 3,748 3,002-1,111 6,110 Costs for services 86,232 41, ,807-86, ,562 Costs for use of 3rd-party assets 58,000 4,297 15,240-3,194 74,343 Payroll & employee benefit costs 30,488 7,905 15, ,797 Other operating expenses 4, , ,569 Total operating costs 179,259 58, ,424-91, ,381 Other revenues 8, ,239-3,209 7,976 Gross Operating Margin (GOM) ,696 2,875-7,131 Depreciation of property, plant, and equipment 6,262 1,877 1, ,984 Depreciation of investment property Amortisation of intangible assets 3, ,854 Adjustments to asset value ,424 Allowance for doubtful accounts and other provisions 2, ,011 2,978 2,854 Net operating profit (loss) -12,687 1,923 2,655-2,876-10,985 Finance income 5,333 Finance expense 5,172 Valuation of financial assets Result of equity-accounted companies Profit (loss) before tax -10,824 Income tax 5,628 Profit/(loss) for period from continuing operations -16,452 Profit/(loss) for period from discontinued operations 1,396 Revenues 1,396 Operating costs Profit/(loss) for period -15,056 Profit/(loss) attributable to Minority Interest 1,629 Group net profit/(loss) -16,685

59 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER The following table summarises segment income statement data for the financial year ended 31 December 2006: INCOME STATEMENT AS AT 31/12/06 ( 000) VRS VAS ECO Adjustments Consolidated Revenues from sales and services to third parties 39,949 18,939 47, ,269 Revenues from intersegment sales and services 20,701 7, ,186 Total revenues 60,650 26,062 47,743-28, ,269 Costs of materials used in operations 244 2,283 1, ,409 Costs for services 37,906 19,157 36,883-27,277 66,669 Costs for use of 3rd-party assets 27,160 1,617 6,341-1,328 33,790 Payroll & employee benefit costs 14,530 3,089 6, ,992 Other operating expenses 2, ,183 Total Operating costs 81,908 26,453 52,279-29, ,043 Other revenues 2, ,439 1,991 Gross Operating Margin (GOM) -18, , ,783 Depreciation of property, plant, and equipment 2,989 1, ,248 Depreciation of investment property Amortisation of intangible assets 1, ,722 Adjustments to asset value 137 1,938 2,075 Allowance for doubtful accounts and other provisions 639 5,555 5,927-3,835 8,286 Net Operating Margin -23,492-7,272-13,208 3,858-40,114 Finance income 2,400 Finance expense 1,922 Valuation of financial assets Result of equity-accounted companies Profit (loss) before income tax -39,636 Income tax -7,699 Profit (loss) for period from continuing operations -31,937 Profit (loss) for period from discontinued operations -1,808 Revenues 18,211 Operating costs 20,019 Profit (loss) for period -33,745 Profit (loss) attributable to Minority Interest -2,829 Group net profit (loss) -30,916 The following table summarises segment balance sheet data for the FY ending on 31 December 2007: SEGMENT ASSETS AND LIABILITIES AS AT 31/12/07 ( 000) Asset depreciation Assets Liabilities Investments & amortisation Venues and Related Services 257, ,378 5,827 9,422 Value-Added Services 46,295 31,351 4,289 2,184 Exhibition & Congress Organisation 147, ,441 3,034 2,334 Adjustments -89,170-48, Total continuing operations 362, ,107 13,150 13,838 Assets and liabilities held for sale Total 362, ,107 13,150 13,838

60 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments 59 The following table summarises segment balance sheet data for the FY ending on 31 December 2006: SEGMENT ASSETS AND LIABILITIES AS AT 31/12/06 ( 000) Asset depreciation Assets Liabilities Investments & amortisation Venues and Related Services 285, ,119 8,529 4,333 Value-Added Services 45,988 37,438 1,460 1,436 Exhibition & Congress Organisation 160, ,302 1,407 1,252 Adjustments -98,187-62, Total continuing operations 393, ,157 11,356 6,970 Assets and liabilities held for sale 34,426 26,137 Total 427, ,294

61 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Notes on items in consolidated accounts BALANCE SHEET ASSETS NON-CURRENT ASSETS 1) Property, plant, and equipment The breakdown of this category and changes occurring in the last two financial years were as shown in the following table: PROPERTY, PLANT AND EQUIPMENT ( 000) Balance Changes during FY Balance as at Increase Decrease Depreciat. Impairm.t Reclass. Other as at 30/06/06 to assets reclass. 31/12/06 held for sale Buildings Original cost Depreciation Net Plant & machinery Original cost 9,180 1, ,565 Depreciation 1, ,617 Net 7,957 1, ,948 Industrial & commercial equipment Original cost 37, , ,631 Depreciation 16,214 2,372-6, ,442 Net 20, , , ,189 Other tangible assets Original cost 39,680 5, , ,853 Depreciation 15, , ,832 Net 24,323 5, , ,021 Assets under construction & down payments Original cost Net Depreciation of property, plant, and equipment Original cost 86,825 8, ,440-80,058 Depreciation 33, , ,961-31,288 Net 53,767 8, , ,479-48,770

62 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments 61 PROPERTY, PLANT AND EQUIPMENT ( 000) Balance Changes during FY Balance as at Increase Decrease Depreciat. Impairm.t Reclass. as at 31/12/06 31/12/07 Buildings Original cost Depreciation Net Plant & machinery Original cost 10,565 1, ,837 Depreciation 1,617 1, ,932 Net 8,948 1,189-1, ,905 Industrial & commercial equipment Original cost 24,631 1, ,641 Depreciation 12, , ,193 Net 12,189 1, , ,448 Other tangible assets Original cost 43,853 2, ,768 Depreciation 16, , ,990 Net 27,021 2, , ,778 Assets under construction & down payments Original cost Net Depreciation of property, plant, and equipment. Original cost 80,058 5, ,248. Depreciation 31, , ,776 Net 48,770 5, , ,472 The extent of and the changes in the main items are detailed below: Buildings This item amounted to 132 thousand net of depreciation costs for the financial year of 264 thousand. The item regards the costs born for the construction of prefabricated buildings at the fieramilanocity site to be used as offices. Plant & machinery This item amounted to 8,905 thousand net of depreciation costs for the financial year of 1,331 thousand. It regards costs concerning electrical, heating, alarm and audiovisual plant and systems. Total increases, including reclassifications, of 1,405 thousand mainly related to plant for the new Rho-Pero exhibition site. Value adjustments, in the amount of 116 thousand, concern the write-downs on investments by the leaseholder for the Palazzo Italia property in Berlin. Industrial and commercial equipment This item amounted to 9,448 thousand net of depreciation costs for the financial year of 3,998 thousand and related to equipment and furnishings supporting the exhibition business. Total increases, including reclassifications, amounted to 1,433 thousand. They mainly referred to the purchase of furnishings and equipment required for operation of exhibitions at the new Rho-Pero exhibition site. The value adjustment in the amount of 115 thousand refers primarily to the adjusting entry related to inventory differences for goods that have a high turnover for the company Nolostand SpA.

63 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Other tangible assets This item amounted to 24,778 thousand net of depreciation costs for the financial year of 4,388 thousand, 16,119 thousand of which relates to costs incurred for leasehold improvements and 8,659 thousand to furniture, furnishings, equipment, vehicles and electronic machines. Total increases, including reclassifications, amounted to 2,485 thousand. They mainly referred to the direct parent company for furnishing accessories at the fieramilano site and for improvements made to assets owned by the Fiera Milano Foundation, payable by the direct parent company based on current rental contracts. Depreciation is calculated according to the property rental contract s residual duration. The value adjustment in the amount of 296 thousand is related to the direct parent company for improvements concerning Palazzo Italia in Berlin, which is being leased. Assets under construction and down payments This item amounted to 209 thousand and relates to down payments mainly by the subsidiary Nolostand SpA for investments in machinery. The item property, plant, and equipment includes investments for the year in the amount of 17 thousand relating to related-party transactions ( 29 thousand at 31 December 2006). For further details, see note 44 on these transactions. 2) Property, plant, and equipment (leased) The breakdown of this category and changes occurring in the last two financial years were as shown in the following table: PROPERTY, PLANT AND EQUIPMENT (LEASED) ( 000) Balance Changes during FY Balance as at Increase Decrease Depreciat. Impairm.t Reclass. Other as at 30/06/06 to assets reclass. 31/12/06 held for sale Leased buildings Original cost - - Depreciation - - Net Leased plant & machinery Original cost Depreciation Net Leased industrial & commercial equipment Original cost Depreciation Net Other leased assets Original cost Depreciation Net Total leased property, plant & equipment Original cost 1, Depreciation Net

64 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments 63 PROPERTY, PLANT AND EQUIPMENT (LEASED) ( 000) Balance Changes during FY Balance as at Increase Decrease Depreciat. Impairm.t Reclass. as at 31/12/06 31/12/07 Leased buildings Original cost - - Depreciation - - Net Leased plant & machinery Original cost - - Depreciation - - Net Leased industrial & commercial equipment Original cost Depreciation Net Other leased assets Original cost Depreciation Net Total leased property, plant & equipment Original cost Depreciation Net ) Goodwill and intangible assets of an indefinite life As highlighted earlier in the section concerning accounting policies, goodwill and intangible assets of indefinite life are not amortised. They are instead subjected to impairment testing at balance sheet date or more frequently if there are signs of impairment of value. The recoverable value of the cash-generating units (CGUs), to which individual goodwill has been attributed, is checked via calculation of value in use. For the purposes of impairment testing, goodwill and the other intangible assets of indefinite useful life have been allocated to their respective CGUs. More specifically, individual companies have been designated as CGUs. The method used is discounted cash flow, based on forecasts made in the 2008 budgets and in the updated long-term plans for the period , as approved by the respective Boards of Directors, and using a discount rate of 8% (i.e. the weighted average cost of capital, or WACC). In order to calculate the WACC, a risk-free rate of 4.26%, a risk premium of 4.29%, and a pre-tax cost of debt of 4.5% were assumed, along with a debt-to-equity ratio of 10%. The outcome of the tests did not reveal any impairment of value, except for a potion of the goodwill resulting from the acquisition of TL.TI Expo SpA, as indicated below.

65 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER The breakdown of this category and changes occurring in the last two financial years were as shown in the following table: GOODWILL & OTHER INTANGIBLE ASSETS OF AN INDEFINITE LIFE ( 000) Balance Changes during FY Balance as at Increase Decrease Impairm.t Reclass. Other as at 30/06/06 to assets riclass. 31/12/06 held for sale Goodwill Original cost 117, , ,450 Depreciation 17,795-1,148 16,647 Net 99, ,669-87,803 Trademarks & similar rights with an indefinite life Original cost 22,360 1,176 21,184 Depreciation Net 22, , ,050 Total Original cost 140, ,638-12, ,634 Depreciation 17, ,148-16,781 Net 122, ,632-11, ,853 GOODWILL & OTHER INTANGIBLE ASSETS OF AN INDEFINITE LIFE ( 000) Balance Changes during FY Balance as at Increase Decrease Impairm.t Reclass. as at 31/12/06 31/12/07 Goodwill Original cost 104, ,751 Depreciation 16,647 16,647 Net 87, ,104 Trademarks & similar rights with an indefinite life Original cost 21,184 4,936 26,120 Depreciation Net 21,050 4, ,986 Total Original cost 125,634 5, ,871 Depreciation 16, ,781 Net 108,853 5, ,090 The extent of and the changes in the main items are detailed below. Goodwill The item totalled 87,104 thousand and includes goodwill of: - 29,841 thousand = conferment by the Fiera Milano Foundation of the exhibition company to the benefit of Fiera Milano SpA;

66 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments 65-27,791 thousand = acquisition of Fiera Milano International SpA; - 12,581 thousand = acquisition by Nolostand SpA of the standard stands company branch; - 5,455 thousand = acquisition of Fiera Milano Congressi SpA; - 5,296 thousand = acquisition by Fiera Milano Tech SpA of the Intel/Sicurezza company branch; - 3,607 thousand = acquisition of ExpoCTS SpA; - 1,170 thousand = acquisition of TL.TI Expo SpA; thousand = acquisition by Edizioni Fiera Milano SpA of the L Orafo company branch; thousand = acquisition of Expopage SpA; thousand = acquisition of Rassegne SpA; thousand = acquisition of Fiera Milano Tech SpA; - 79 thousand = acquisition of the Antik company branch; - 23 thousand = acquisition of Edizioni Fiera Milano SpA. The changes for the year were as follows: The increase of 145 thousand was due to purchase of the remaining 49% stake in Fiera Milano Tech SpA; The adjustment of 844 thousand was related to the partial impairment of the goodwill on TL.TI Expo SpA. Trademarks & similar rights with an indefinite life This group amounted to 25,986 thousand and includes the following trademarks: - Transpotec & Logitec ( 6,993 thousand); - BIT ( 5,067 thousand); - HOST ( 3,350 thousand); - MilanoVendeModa ( 3,148 thousand); - Rich ( 535 thousand); - Bias ( 1,197 thousand); - FluidtransCompomac ( 1,404 thousand); - Ex-Publiemme magazine titles and L Orafo ( 1,957 thousand); - Technology unit publications ( 2,335 thousand). The increases for the year were as follows: - 1,197 thousand = acquisition by Fiera Milano Tech SpA of Bias; - 1,404 thousand = acquisition by Fiera Milano Tech SpA of FluidtransCompomac; - 2,335 thousand = acquisition by Edizioni Fiera Milano SpA of the Technology publications. As mentioned above in the section on accounting policies, trademarks of exhibitions (meaning exhibitor lists, visitor lists, and the exhibition s actual trademark) and of publishing titles are deemed to have an indefinite life when no factors of a general economic, regulatory or legal nature or factors specific to the entity or to the sector in which it is active emerge such as to set a foreseeable limit on the period during which the asset is expected to generate net cash inflows. Market experience indicates that, once an event has become established, exhibition trademarks become a point of reference for the industry to which they refer, and normal maintenance costs make it possible for the exhibition to remain over time without it being possible to set a foreseeable limit on their useful life.

67 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Similar assumptions apply to technical publications, which in the same way as exhibitions become points of reference for the players in the industry concerned and, in certain cases, become like actual manuals for technical professions. Here, too, normal maintenance costs enable technical journals to last over time without it being possible to set a foreseeable limit to their useful lives. 4) Other intangible assets The breakdown of this category and changes occurring in the last two financial years were as shown in the following table: OTHER INTANGIBLE ASSETS ( 000) Balance Changes during FY Balance as at Increase Decrease Depreciat. Impairm.t Reclass. Other as at 30/06/06 to assets Reclass. 31/12/06 held for sale Development costs Original cost 1, ,512 Depreciation 1, ,234 Net Industrial patents & intellectual property rights Original cost 15,169 1, ,885 Depreciation 5, , ,790 Net 9,696 1, , ,095 Concessions, licenses, trademarks & similar rights Original cost 2, ,275 Depreciation 1, ,458 Net Non-competition agreements Original cost Depreciation Net Assets under construction & down payments Original cost Net Total other intangible assets Original cost 19,645 2, ,273 Depreciation 7, , ,628 Net 11,652 2, , ,645

68 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments 67 OTHER INTANGIBLE ASSETS ( 000) Balance Changes during FY Balance as at Increase Decrease Depreciat. Impairm.t Reclass. as at 31/12/06 31/12/07 Development costs Original cost 1, ,943 Depreciation 1, ,570 Net Industrial patents & intellectual property rights Original cost 16,885 1, ,695 Depreciation 6, ,124 9,899 Net 10,095 1,825-3, ,796 Concessions, licenses, trademarks & similar rights Original cost 2, ,613 Depreciation 1, ,776 Net Non-competition agreements Original cost Depreciation Net Assets under construction & down payments Original cost Net Total other intangible assets Original cost 21,273 2, ,748 Depreciation 9, , ,463 Net 11,645 2, , ,315 The extent of and the changes in the main items are detailed below. Development costs The item amounted to 373 thousand net of 301 thousand of amortisation for the period and mainly refers to expenses borne for functional enhancement of the portal of Expopage SpA and to development costs for new exhibitions. Amortisation is calculated over a period ranging from 3 to 5 years. Industrial patents & intellectual property rights The item amounted to 8,796 thousand, net of amortisation in the period of 3,124 thousand, and mainly refers to the cost borne by the direct parent company for functional development of the new information system and purchases of software licenses for unlimited use. Amortisation is calculated over a period ranging from 3 to 10 years. In the specific case of the Group s information system, amortisation has been calculated on projected future usefulness lasting five years.

69 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Concessions, licenses, trademarks, and similar rights The item amounted to 837 thousand net of 335 thousand of amortisation for the period. It refers to the PluSize trademark ( 201 thousand), to the Ristoranti Villa Erba trademark ( 250 thousand), and to standfitting design software ( 129 thousand). The value adjustment in the amount of 53 thousand refers to trademarks initially registered to protect initiatives undertaken for which no future use is expected. Amortisation is calculated over a period ranging from 3 to 10 years. Non-competition agreements This item amounted to 187 thousand net of amortisation of 94 thousand for the period. It refers to the noncompetition agreements relating to SIFA SpA for the Tuttofood exhibition. Amortisation is calculated according to the non-competition agreement s duration. Assets under construction and down payments This item totals 122 thousand and is mainly related to the subsidiary Nolostand SpA for software development. 5) Investments in other companies This item, which has not changed in relation to the previous financial year, is composed of the following: 1% interest in the affiliate Sviluppo Sistema Fiera SpA = 50 thousand; an equity interest in Obiettivo Lavoro Scrl = 10 thousand. 6) Trade and other receivables These amounted to 14,430 thousand ( 12,626 thousand as at 31 December 2006). TRADE AND OTHER RECEIVABLES ( 000) Balance as Changes during FY Balance as at 31/12/06 Increases Decreases at 31/12/07 Cautionary deposits 12, ,624 Medium-/Long-term receivables - 1,806 1,806 Total 12,626 1, ,430 The item consisted of: - 12,618 thousand relating to the direct parent company security deposit on property rental contracts for the two Rho and Milan exhibition sites. The value equals one quarter s rent on the two rental contracts and includes the updates laid down by the respective contracts. The security deposit bears interest calculated based on the current legal rate. The two contracts expire on 31 December 2014 and, unless notice of termination is given, are automatically renewable for nine-year periods; - 6 thousand relating to other cautionary deposits for various uses;

70 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments 69-1,806 thousand relating to the present value of the medium-term receivable for the payment of the sale of the Build Up company branch. The item Trade and other receivables includes 12,618 thousand ( 12,618 thousand at 31 December 2006) relating to related-party transactions. For further details, see note 44 on these transactions. 7) Deferred tax assets They amounted to 16,239 thousand ( 19,220 thousand as at 31 December 2006). The change is due to the use of deferred tax assets allocated in previous years for the results as at 31 December 2007 of the companies of the Group. For an analysis of the changes in deferred tax assets, see note 41 of the income statement. CURRENT ASSETS 8) Trade & other receivables TRADE AND OTHER RECEIVABLES ( 000) 31/12/07 31/12/06 Change Receivables from Customers 65,185 66,241-1,056 Receivables from Parent entity and affiliates 2,403 2, Other receivables 9,795 6,189 3,606 Prepayments Total 77,825 75,304 2,521 They amounted to 77,825 thousand ( 75,304 thousand as at 31 December 2006). They consisted of: - Amounts receivable from customers for services concerning provision of the exhibition site and supply of services connected with exhibitions and congresses; - Amounts receivable from the ultimate parent entity and affiliates that mainly included trade receivables from the Fiera Milano Foundation and the affiliate Sviluppo Sistema Fiera ( 1,275 thousand), amounts receivable relating to participation in domestic tax consolidation ( 296 thousand), Group VAT receivables ( 747 thousand), and other receivables ( 85 thousand); - Other receivables mainly consisting of: amounts receivable from employees ( 466 thousand), receivables for payments on account of corporate income tax and regional business tax ( 1,886 thousand), VAT receivables ( 411 thousand), advance payments to suppliers ( 4,256 thousand), credits for tax payments on account on employee severance indemnities ( 437 thousand), credits for tax withholdings incurred ( 365 thousand), other taxes receivable ( 1,161 thousand), and other short-term receivables ( 813 thousand); - Prepayments referring to passive rents ( 99 thousand), insurance premiums ( 12 thousand) and the suspension of other structural costs ( 331 thousand).

71 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER The item included 3,061 thousand concerning related-party transactions ( 3,571 thousand as at 31 December 2006). For further details, see note 44 on these transactions. Doubtful debt provision changed as follows: DOUBTFUL DEBT PROVISION ( 000) 31/12/06 Provisions Uses 31/12/07 Doubtful debt provision 4, ,841 Provision is calculated in such a way as to adjust nominal value to presumed realisable value. Use of accrued provision referred to receivables for which non-collectability was ascertained during the current financial year. 9) Inventories Inventories totalled 5,999 thousand ( 9,678 thousand as at 31 December 2006) and featured the following breakdown: INVENTORIES ( 000) 31/12/07 31/12/06 Change Raw and secondary materials plus consumables Work in progress Finished goods and merchandise Total inventory Total suspended costs 5,947 9,647-3,700 Total Inventories 5,999 9,678-3,679 The item consisted of: - inventories of 52 thousand solely relating to stocks of printed material; - suspended costs of 5,947 thousand relating to exhibitions and congresses that will take place after 31 December A breakdown by exhibition of the suspended costs as at 31 December 2007 is shown below: EXHIBITION ( 000) MCE 1,880 SICUREZZA 75 MADE EXPO 1,501 INFOSECURITY 67 MACEF 862 WELLNESS 55 BIAS 428 OTHER 542 BIT 365 MIART 172 TOTAL 5,947

72 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments 71 10) Current financial assets These assets amounted to 63,389 thousand ( 92,789 thousand as at 31 December 2006) and featured the following breakdown: CURRENT FINANCIAL ASSETS ( 000) 31/12/06 Increases Decreases Capitalisation 31/12/07 of interest Cash investments 92, ,627 3,141 62,301 Balance of correspondence account with the Foundation - 1, ,088 Total 92,789 2,086 34,627 3,141 63,389 This item includes the balance of the direct parent company s correspondence account with the Fiera Milano Foundation and the commitment of liquidity with leading insurance companies in order to optimise return of financial resources. These policies are measured at fair value and any consequent gains or losses are recognised in the income statement. Annualised average return was 5.31%. The decrease reported for the year was due to disinvestment both by Fiera Milano International (of about 14,000 thousand) and by Fiera Milano SpA (of about 20,000 thousand). Fiera Milano s disinvestment was set against an investment of almost the same amount made at the end of December 2006 and covered by a temporary increase in short-term bank borrowings. The item includes 1,088 thousand concerning related-party transactions (vs. a zero balance as at 31 December 2006). For further details, see note 44 on these transactions. 11) Cash & cash equivalents They amounted to 17,378 thousand ( 14,592 thousand as at 31 December 2006) and consisted almost entirely of current bank deposits remunerated at a variable rate of interest. Cash flow trends vs. 31 December 2006 are shown on the cash flow statement. ASSETS HELD FOR SALE 12) Assets held for sale The item had a zero balance ( 34,426 thousand as at 31 December 2006). The balance was eliminated with the sale of the investment in Eurostands SpA and of the Build Up Expo company branch.

73 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER EQUITY AND LIABILITIES EQUITY 13) Share capital & reserves Equity consists of the following: EQUITY ( 000) 31/12/07 31/12/06 Change Share capital 33,457 33, of which treasury shares Share premium reserve 43,145 65,738-22,593 of which treasury shares -2,984-2, Legal reserve 6,778 6,778 - Other reserves 2,073 2, of which IFRS first-time adoption reserves -1,191-1,191 - Retained earnings (losses) -3,529 5,407-8,936 Profit (loss) for period -16,685-30,916 14,231 Equity attributable to Group 65,239 82,626-17,387 Minority Interest capital & reserve 7,676 13,724-6,048 Minority Interest profit (loss) 1,190-2,663 3,853 Equity attributable to Minority Interest 8,866 11,061-2,195 Total 74,105 93,687-19,582 The extent of and changes in the various items are detailed below. EQUITY ATTRIBUTABLE TO THE GROUP Share capital As at 31 December 2007, fully paid-in share capital amounted to 33,457 thousand ( 33,596 thousand as at 31 December 2006) net of treasury shares held by the Group for 434 thousand. The 139 thousand decrease was due to the purchase of treasury shares, which, in accordance with the IASs and IFRSs, have been recognised as a direct reduction to share capital for their par value. The number and movement of the shares in circulation during the course of the year is shown in the following table: No. of shares as at No. of shares as at 31 December 2006 Changes 31 December 2007 Ordinary shares issued 33,891,778 33,891,778 Treasury shares 295, , ,943 Shares outstanding 33,596,385 33,457,835

74 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments 73 Share premium reserve The reserve amounted to 43,145 thousand ( 65,738 thousand as at 31 December 2006) net of treasury shares in the amount of 2,984 thousand. The changes occurring during the course of the year were as follows: - a 613 thousand decrease related to the purchase of treasury shares, which, in accordance with the IASs and IFRSs, has been recognised as a direct reduction to the share premium reserve for the difference between their par value and the purchase price; - a 21,980 decrease resulting from the resolution of the shareholders of the direct parent company of 27 April 2007 approving the coverage of the loss for the year ended 31 December 2006 by using the share premium reserve in the same amount. Legal reserve The reserve amounted to 6,778 thousand ( 6,778 thousand as at 31 December 2006). Other reserves These amounted to 2,073 thousand ( 2,023 thousand at 31 December 2006) net of the first time adoption reserves in the amount of 1,191 thousand. The changes occurring during the course of the year were as follows: - increase of 38 thousand of the stock options reserve equal to the fair value of the options attributable to the year; - increase of 12 thousand owing to foreign-exchange differences. Retained earnings (losses) They amounted to - 3,529 thousand ( 5,407 thousand as at 31 December 2006). The changes occurring during the course of the year were as follows: - a 30,916 thousand decrease due to allocation of the previous year s earnings; - a 21,980 increase resulting from the resolution of the shareholders of the direct parent company of 27 April 2007 approving the coverage of the loss for the year by using the share premium reserve in the same amount. Profit (loss) for the year The financial year ended 31 December 2007 shows a Group net loss of 16,685 thousand. The previous year s loss amounted to 30,916 thousand. EQUITY ATTRIBUTABLE TO MINORITY INTEREST Minority Interest capital and reserves As at 31 December 2007, Minority Interest capital and reserves amounted to 7,676 thousand ( 13,724 thousand as at 31 December 2006). The changes occurring during the course of the year were as follows: - a 682 thousand increase due to ExpoCTS SpA s capital increase; - a 2,663 thousand decrease due to allocation of the previous year s loss; - a 2,334 thousand decrease due to sale of Eurostands SpA;

75 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER a 1,668 thousand decrease due to Group s acquisition of a further 49% stake in Fiera Milano Tech SpA; - a 65 thousand decrease due to dividend distribution. Minority Interest profit (loss) The Minority Interest profit amounted to 1,190 thousand (compared with a loss of 2,663 thousand as at 31 December 2006). The following table details the reconciliation between Parent Company and consolidated equity and loss: STATEMENT OF RECONCILIATION BETWEEN FIERA MILANO SPA AND CONSOLIDATED EQUITY AND PROFIT ( 000) FY 2007 FY 2006 Equity Net Equity Net profit profit PARENT COMPANY EQUITY AND PROFIT 75,742 (20,797) 97,255 (21,980) Parent company shares held by the Group (2,586) (2,586) Equity and net profit (loss) of consolidated companies 44, ,076 (21,214) Intragroup dividends (131) (9,227) Elimination of consolidated investment s carrying value (104,184) (97,360) Goodwill coming from acquisitions 38,616 (844) 39,315 Write-down of investments, net of tax effect 22,028 7,339 15,884 10,174 Effect stemming from sale of consolidated companies 1,396 Allocation to risk provisions, net of tax effect 603 (3,055) 8,354 8,354 Elimination of intragroup margins (374) (28) (346) 160 Effect stemming from put option 154 Minor consolidation adjustments, net of tax effect 42 (53) 95 TOTAL EQUITY 74,105 (15,495) 93,687 (33,579) of which: attributable to Minority Interest 8,866 1,190 11,061 (2,663) CONSOLIDATED EQUITY AND PROFIT 65,239 (16,685) 82,626 (30,916) LIABILITIES NON-CURRENT LIABILITIES 14) Bank borrowings During the financial year, bank borrowings underwent the following changes: BANK BORROWINGS ( 000) 31/12/07 31/12/06 Change Bank borrowings 11,916 18,579-6,663

76 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments 75 The breakdown of the item was as follows: NON-CURRENT BANK BORROWINGS ( 000) Fiera Milano Fiera Milano Fiera Milano Tech Congressi Total Bank borrowings 4, ,501 11,916 of which maturing after more than 5 years 1,324 1,324 Total 4, ,501 11,916 They amounted to 11,916 thousand ( 18,579 thousand as at 31 December 2006). The decrease of 6,663 thousand was due to the effect of short-term portion of loans. Bank borrowings are remunerated at variable rates of interest. 15) Other financial liabilities OTHER NON-CURRENT FINANCIAL LIABILITIES ( 000) 31/12/07 31/12/06 Variazione Finance leases They amounted to 4 thousand ( 15 thousand as at 31 December 2006). They consisted entirely of the non-current portion of finance leases. 16) Provisions for risks and charges This item amounted to 6,054 thousand ( 7,149 thousand as at 31 December 2006) and featured the following breakdown: PROVISIONS FOR RISKS AND CHARGES ( 000) 31/12/07 31/12/06 Variazione Provision for charges related to Palazzo Italia project 4,300 5, Tax consolidation system provision 998 1, Other provisions for risk and charges Total 6,054 7,149-1,095 The composition of the provision for risks and charges is as follows: - 4,300 thousand for the medium/long-term portion of the provision made in relation to the Palazzo Italia project in Berlin. The current portion of 1,700 thousand has been recorded among current provisions for risks and charges. Therefore, as at 31 December 2007, the total risk provision comes to 6,000 thousand.

77 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER The provision was established during the previous year in the amount of 5,000 thousand by the subsidiary Italian System for Business, which has now been merged into the direct parent company, and had uses during the current year in the amount of 2,445 thousand and additions of 3,445 thousand in relation to assessments of potential alternative uses of the property; thousand for the provision made in previous years against possible return by the direct parent company to the ultimate parent entity, the Foundation, of the income accorded by the latter in connection with Group tax consolidation, which was interrupted during the financial year ended 31 December This income was recognised by the Foundation against the benefit that would have been enjoyed by Fiera Milano SpA if it had acted as tax consolidator. The income was matched with the tax losses of Fiera Milano SpA s subsidiaries excluded from the ultimate parent entity s final tax consolidation, and must be returned to the Foundation if the tax losses are used by the companies that generated them. The decrease of 673 thousand is related to (i) the return of the payment for the tax losses used in the amount of 281 thousand; (ii) the nullification of a 94 thousand portion of the repayment obligation following the elimination of the subsidiary Italian System for Business, the tax losses of which had been offset; and (iii) an update based on a change in the corporate tax rate in the amount of 298 thousand; thousand for the potential liability of the direct parent company due to fiscal risks connected with indirect taxes; thousand for other risks and charges. 17) Employee benefit provisions They amounted to 9,641 thousand ( 11,311 thousand as at 31 December 2006). These consisted of Italian post-employment provisions (known as severance indemnity provisions ) calculated using actuarial procedures. During the financial year, they underwent the following changes: EMPLOYEE BENEFIT PROVISIONS ( 000) Balance as at 31 December ,311 Severance indemnities accruing 394 Reductions from reform -1,335 Indemnities and advances paid out -1,396 Transfers 667 Balance as at 31 December ,641 Following changes brought about by the reform of the old severance indemnity system, corporate obligations to employees as regards benefits accruing as from 1 January 2007 lose their connotation of a definedbenefit plan and are assimilated with a defined-contribution plan. Provisions accruing as up to 31 December 2006 continue to be a defined-benefit plan determined according to actuarial calculations that exclude the component relating to future salary increases. Recalculation of provisions already made generated a curtailment of 1,335 thousand, recognised in the income statement. In making the actuarial calculations, the Group has been assisted by an expert listed with the appropriate register.

78 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments 77 The following main assumptions were made for these calculations: - statistical analyses took into account average salaries by classes of employee age and tenure of employees on the payroll as at 31 December 2007; - actuarial measurement was based on an as-is scenario, i.e. no new hires were assumed in the time span concerned; - simulations were performed according to accrued benefits using the projected unit credit method; - demographic assumptions took the ISTAT (Italian Statistics Bureau) and INPS (Italian state pension & social security agency) models into account for projections through to 2010; - the economic and financial assumptions are shown in the following table: ECONOMIC AND FINANCIAL ASSUMPTIONS FOR CALCULATION OF SEVERANCE INDEMNITY PROVISIONS 31/12/07 31/12/06 Technical discounting rate 5.50% 4.60% Annual inflation rate 2.00% 2.00% Annual rate of total increase in salaries 3.00% 3.00% Annual rate of increase in severance indemnity provision 3.00% 3.00% As regards the discounting rate, the iboxx Eurozone Corporate AA rate for bonds of between 7 and 10 years was used to calculate present value. 18) Deferred tax liabilities DEFERRED TAX LIABILITIES ( 000) 31/12/07 31/12/06 Change Deferred tax liabilities 17,835 16,328 1,507 They amounted to 17,835 thousand ( 16,328 thousand as at 31 December 2006). The item consisted of: - 15,849 thousand for the deferred tax provision for corporate income tax (IRES); - 1,986 thousand for the deferred tax provision for regional business tax (IRAP). For an analysis of the changes in deferred tax liabilities, see note 41 of the income statement.

79 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER ) Other non-current liabilities These liabilities totalled 216 thousand ( 2,067 thousand as at 31 December 2006). During the course of the financial year, they underwent the following changes: OTHER NON-CURRENT LIABILITIES ( 000) 31/12/07 31/12/06 Change Onama option right on Congress Centre catering activities in period Forward price for purchase of 49% stake in ExpoCTS SpA - 1,767-1,767 Other non-current liabilities Total 216 2,067-1,851 The item concerning the forward price for the purchase of a 49% stake in ExpoCTS was eliminated following the reclassification of the present value of the forward price for the investment in ExpoCTS SpA among current liabilities. CURRENT LIABILITIES 20) Bank borrowings The breakdown of this category and changes occurring in the financial year were as shown in the following table: BANK BORROWINGS ( 000) 31/12/07 31/12/06 Change Current account overdrafts 3,867 6,045-2,178 Advances on invoices 1,424 3,434-2,010 Loans taken out and current portions of long-term borrowings 67,698 88,401-20,703 Total 72,989 97,880-24,891 BANK BORROWINGS ( 000) Nolostand Expopage Edizioni Fiera Fiera Fiera Fiera Fiera Food Milano Milano Milano Milano System Tech Tl.Ti. Congressi Total Current account overdrafts , ,867 Advances on invoices 1, ,424 Loans taken out and current portions of long-term borrowings 64,063 1, ,157 67,698 Total 64,063 3, , , ,708 72,989

80 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments 79 The loans issued to Nolostand SpA are subject to compliance with certain covenants to be calculated at the end of FYs In the eventuality of failure to meet these parameters the lender bank has the power to terminate the loan contract, simultaneously requiring both immediate repayment of the residual debt (principal and interest) and compensation for damages (1.50% of residual principal). At 31 December 2007, the subsidiary had failed to meet one of the covenants; therefore, the non-current portion of the loan, in the amount of 658 thousand, was classified among current liabilities. The lending bank then notified the company, after 31 December 2007, that it did not intend to demand early repayment of the financing agreement. Bank borrowings are remunerated at variable rates of interest. 21) Trade payables They amounted to 50,889 thousand ( 47,930 thousand as at 31 December 2006). The 2,959 thousand increase is mainly related to the increase in operations. The item included 544 thousand concerning related-party transactions ( 1,492 thousand as at 31 December 2006). For further details, see note 44 on these transactions. 22) Down payments received They amounted to 77,432 thousand ( 65,111 thousand as at 31 December 2006). They mainly consisted of down payments billed to customers for exhibitions due to take place after 31 December Recognition of such revenues is in fact postponed until the exhibitions concerned take place. Down payments received as at 31 December 2007 were as follows: DOWN PAYMENTS RECEIVED FOR NEXT YEAR EXHIBITIONS ( 000) MCE 29,891 EASL 267 MACEF 23,886 EIMU 256 MADE EXPO 4,181 PROMOTION TRADE 215 BIT 3,525 WORLD COMPUTER CONGRESS 161 FESTIVITY 2,625 SICURTECH 156 SALONE DEL MOBILE 2,243 VENDITALIA 151 MIDO 1,241 E.I.R.E. 100 XYLEXPO 968 MILANOFIL 94 MICAM 883 MODA IN 90 MILANO UNICA 1,671 INFOSECURITY 89 MIFUR 771 COLLETTIVE ESTERE 73 MVM 634 PROMOTION EXPO 71 EUROCUCINA 597 PLUSIZE 64 BIAS 536 AIOM 55 MIPEL 472 ISPLAD 53 SICUREZZA 463 SIE 50 FLUID 301 OTHERS 303 BIMU 296 TOTAL 77,432

81 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER ) Other financial liabilities OTHER CURRENT FINANCIAL LIABILITIES ( 000) 31/12/07 31/12/06 Change Balance of correspondence account with the Foundation - 5,869 5,869 Finance leases Total 12 6,070 6,058 They amounted to 12 thousand ( 6,070 thousand as at 31 December 2007). The change is due to the extinction of a lease financing agreement and to the balance of the correspondence account with the Fiera Milano Foundation, which was at a credit balance for the year in question. 24) Provisions for risks and charges CURRENT PROVISIONS FOR RISKS AND CHARGES ( 000) 31/12/07 31/12/06 Change Loss-making exhibitions - 1,593-1,593 Provision for changes related to Palazzo Italia project 1,700-1,700 Disputes 2, ,249 Other provisions for risk and charges Total 4,224 1,689 2,535 They amounted to 4,224 thousand ( 1,689 thousand as at 31 December 2006). The item consisted of: - 2,314 thousand for outstanding disputes related to the subsidiary ExpoCTS ( 1,164 thousand), the direct parent company ( 600 thousand), the subsidiary Fiera Milano Tech ( 400 thousand), and the subsidiary TL.TI Expo ( 150 thousand). In particular, the provision made for ExpoCTS was related to charges that could result from the withdrawal from or reformulation of a number of multiannual agreements with third parties in anticipation of the launch of a number of new exhibitions. ExpoCTS management, in concert with the direct Parent Company s Executives, has considered whether to take action to safeguard corporate assets, but for the moment it has been decided to put such initiatives on hold with a view to a more rapid and favourable conclusion of the outstanding disputes; - 1,700 thousand for the current portion of the provision made in relation to the Palazzo Italia project in Berlin; thousand for other risks and charges. 25) Tax liabilities TAX LIABILITIES ( 000) 31/12/07 31/12/06 Change Personal income tax of permanent employees 2,224 1, Personal income tax of occasional and continuous outside staff Income tax for the year 860 3,848-2,988 Other tax liabilities Total 4,177 5,893-1,716

82 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments 81 They amounted to 4,177 thousand ( 5,893 thousand as at 31 December 2006). 26) Other current liabilities OTHER CURRENT LIABILITIES ( 000) 31/12/07 31/12/06 Change Trade accounts payable to Foundation 10,577 5,677 4,900 Amounts payable to Foundation for tax consolidation 281 4,953-4,672 Trade accounts payable to Foundation Amounts payable to pension & social security agencies 2,552 1, Amounts payable to directors and statutory auditors Amounts payable to employees 6,348 4,620 1,728 Amounts payable to exhibition organisers 5,580 3,688 1,892 Group VAT payables 358 2,978-2,620 Other payables 5,869 3,188 2,681 Accrued liabilities Deferred income Total 32,718 28,135 4,583 They amounted to 32,718 thousand ( 28,135 thousand as at 31 December 2006). The main changes related to: - increases of 4,900 thousand for higher trade payables with the ultimate parent entity, the Fiera Milano Foundation, roughly half of which related to the direct parent company for sundry items, with the remainder concerning Fiera Milano International for items related primarily to the Macef exhibition; - a decrease of 4,672 thousand for the debt towards the Fiera Milano Foundation relating to tax consolidation, which was discontinued following the change in Fiera Milano SpA s year-end date; - an increase in amounts payable to exhibition organisers and other payables related mainly to receipts not yet returned for biennial events to be held in 2008; - the reclassification of 1,874 thousand related to the forward price for the purchase of a 49% stake in ExpoCTS SpA from other non-current liabilities to other current liabilities. The present value of the nominal value of 2,000 thousand has been calculated based on a rate of 7.5%. The item includes 11,379 thousand concerning related-party transactions ( 13,676 thousand as at 31 December 2006). For further details, see note 44 on these transactions. LIABILITIES HELD FOR SALE 27) Liabilities held for sale The item had a zero balance ( 26,137 thousand as at 31 December 2006).

83 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER FINANCIAL ASSETS & LIABILITIES As at 31 December 2007, the Group had net debt of 4,154 thousand vs. net debt of 27,813 as at 31 December 2006, as detailed in the following table: GROUP NET FINANCIAL POSITION (Amounts in 000) 31/12/07 31/12/06 A. Cash 17,378 14,592 B. Other cash equivalents - - C. Securities held for trading - - D. Cash & cash equivalents (A+B+C) 17,378 14,592 E. Current financial assets 62,301 92,789 F. Current bank borrowing 66,316 92,011 G. Current portion of non-current debt 6,673 5,869 H. Other current financial liabilities (1,076) 6,070 H1. of which vis-à-vis related parties - 5,869 I. Current financial debt (F+G+H) 71, ,950 J. Current net financial debt (cash) (I-E-D) (7,766) (3,431) K. Non-current bank borrowing 11,916 18,579 L. Debt securities on issue - (4,275) M. Other non-current (receivables)/liabilities 4 15 N. Non-current financial debt (cash) (K+L+M) 11,920 14,319 Non-current financial debt (cash) from continuing operations (J+N) 4,154 10,888 Non-current financial debt (cash) from discontinued operations - 16,925 O. Total net financial debt (cash) 4,154 27,813 The Fiera Milano Group has a favourable cash management cycle thanks to the financial profile typical of companies that organise exhibitions and congresses. Exhibition and congress organisers in fact require their customers to make a down payment to confirm their registration for participation in the event and the balance is generally collected before the event starts or when it ends. Suppliers of goods and services are instead paid according to the terms of payment that are common practice. This means that negative working capital is generated for exhibition organisers, leading to a cash surplus. Fiera Milano SpA, the direct Parent Company, which in turn sells exhibition space to organisers, manages administration and treasury services for organisers, collecting on the latter s behalf everything that exhibitors pay to organisers. After collection, Fiera Milano SpA based on contractually agreed conditions reverses to organisers the amounts pertaining to them and retains the fee for exhibition space occupied and for services provided. This system also enables Fiera Milano SpA to collect its fees in advance, in line with what happens for organisers. Within the Fiera Milano Group, the companies enjoying this favourable cash management cycle are therefore the companies organising exhibitions and congresses and the direct Parent Company. It is different, however, for the companies of the Value-Added Services segment, in which case the cash management cycle is that typical of companies producing and supplying goods and services. This creates a working capital requirement that is met by use of bank financing. Provided below is additional information concerning the Group s financial instruments useful in better assessing:

84 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments 83 - the significance of the financial instruments in relation to the balance sheet and income statement items; - the nature and entity of the risks resulting from the financial instruments to which the Group was exposed during the current and previous years and related methods of management. Classes of financial instruments The items on the balance sheet and the types of risk related to financial instruments as at 31 December 2006 and as at 31 December 2007 are shown in the table below: RISK TYPE ( 000) Note FY at FY at Liquidity Rate Credit 31/12/ /12/2007 risk risk risk NON-CURRENT ASSETS 1) Trade and other receivables 6 12,626 14,430 X CURRENT ASSETS 2) Trade and other receivables 8 75,304 77,825 X 3) Current financial assets 10 92,789 63,389 X 4) Cash & cash equivalents 11 14,592 17,378 X NON-CURRENT LIABILITIES 5) Bank borrowings 14 18,579 11,916 X CURRENT LIABILITIES 6) Bank borrowings 20 97,880 72,989 X 7) Trade payables 21 47,930 50,889 X 8) Other financial liabilities 23 6, X 9) Other current liabilities 26 28,135 32,718 X Significance of financial instruments The financial instruments and their related significance in relation to the balance sheet and income statement items as at 31 December 2006 and as at 31 December 2007 are shown in the table below: CATEGORIES OF FINANCIAL ASSETS AND LIABILITIES SHOWN IN ACCOUNTS ( 000) Assets at Liabilities fair value a at Income through Loans and amortised Fair statement Note 31/12/2006 profit or loss receivables cost value effect NON-CURRENT ASSETS 1) Trade and other receivables 6 12,626 12,626 12, CURRENT ASSETS 2) Trade and other receivables 8 75,304 75,304 75,304 1,437 3) Current financial assets 10 92,789 92,789 92,789 1,757 4) Cash & cash equivalents 11 14,592 14,592 14, NON-CURRENT LIABILITIES 5) Bank borrowings 14 18,579 18,579 18,579 (217) CURRENT LIABILITIES 6) Bank borrowings 20 97,880 97,880 97,880 (1,141) 7) Trade payables 21 47,930 47,930 47,930 8) Other financial liabilities 23 6,070 6,070 6,070 (38) 9) Other current liabilities 26 28,135 28,182 28,135 (89) a Fair value designated as such upon initial recognition

85 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER CATEGORIES OF FINANCIAL ASSETS AND LIABILITIES SHOWN IN ACCOUNTS ( 000) Assets at Liabilities fair value a at Income through Loans and amortised Fair statement Note 31/12/2007 profit or loss receivables cost value effect NON-CURRENT ASSETS 1) Trade and other receivables 6 14,430 14,430 14, CURRENT ASSETS 2) Trade and other receivables 8 77,825 77,825 77,825 1,018 3) Current financial assets 10 63,389 62,301 1,088 63,389 3,182 4) Cash & cash equivalents 11 17,378 17,378 17,378 1,176 NON-CURRENT LIABILITIES 5) Bank borrowings 14 11,916 11,916 11,916 (590) CURRENT LIABILITIES 6) Bank borrowings 20 72,989 72,989 72,989 (3,614) 7) Trade payables 21 50,889 50,889 50,889 8) Other financial liabilities (100) 9) Other current liabilities 26 32,718 30,563 32,718 (208) a Fair value designated as such upon initial recognition The carrying value of the financial assets and liabilities, as can be seen in the tables above, is a reasonable approximation of their fair value. Indeed, for the most part, the financial instruments are short-term forms of debt and investment, and in cases in which medium and long-term instruments were used, such instruments did not entail significant related costs. Guarantees For information on financial assets given as guarantees, see note 6 of these explanatory notes to the financial statements. Credit risk In the light of the cash management cycle applying to a major part of the Group, the credit risk is believed not to be significant. Moreover, Fiera Milano hosts and organises exhibitions that are leaders in their respective sectors, meaning that exhibitor loyalty is very strong. In the case of the direct parent company, Fiera Milano SpA, the current system means that all receipts from exhibitors flow into Fiera Milano s coffers and that it is Fiera Milano who reverses to its organiser customers the amounts payable to them. As regards companies in the Value-Added Services segment, we should point out that, on behalf of individual Group companies, Fiera Milano SpA invoices and collects part of the services rendered to exhibition organisers. VAS companies, in any case, subject potential customers to the normal solvency checks and the balance is constantly monitored by the relevant functions so as to initiate recovery action whenever appropriate. Three different categories of credit risk have been defined: organisers, exhibitors, and other receivables. In the first class of risk, organisers of exhibitions, the receivables have been categorised as being the least risky, given that Fiera Milano SpA manages the cash flows for all exhibitions held at the two venues.

86 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments 85 In the second class of risk, exhibitors, the receivables have been categorised as being of medium risk in that exhibitors must generally make payment before the end of the exhibition. The third class of risk, other receivables, refers primarily to exhibition-related activities (stand fitting, congresses, promotion, internet services) and non-exhibition activities (sponsors, advertising, and others). Collections for these receivables take place in accordance with normal invoice terms. The classes of credit risk as at 31 December 2006 and 2007 are shown below along with the related ageing: CLASSES OF CREDIT RISK ( 000) FY at Ageing 31/12/2006 Not Class Receivable yet due Past due days days days Older Allowances Organisers 1,726 1, Exhibitors 36,607 30,606 8, ,284 1,670 4,294 (2,048) Other 27,908 10,425 19,629 11,511 2,337 1,916 3,865 (2,145) Total 66,241 42,128 28,306 12,672 3,841 3,631 8,162 (4,193) CLASSES OF CREDIT RISK ( 000) FY at Ageing 31/12/2007 Not Class Receivable yet due Past due days days days Older Allowances Organisers 2,562 2, Exhibitors 35,602 29,135 8,925 2,183 1, ,735 (2,458) Other 27,021 11,733 17,672 10,673 1,922 1,257 3,820 (2,383) Total 65,185 43,223 26,803 13,048 3,054 2,132 8,569 (4,841) The Fiera Milano Group does not renegotiate receivables. The provision for doubtful accounts is calculated based on presumed recoverability, both by in-house calculations and with the help of outside legal counsels. Changes in the provision by class of receivable are detailed below: PROVISION FOR DOUBTFUL ACCOUNTS ( 000) Reclassifications FY at to assets FY at 30/06/2006 held for 31/12/2006 Class Allowances Provisions Uses sale Allowances Organisers Exhibitors 1, ,048 Other 1,576 1, ,145 Total 3,337 1, ,193

87 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER PROVISION FOR DOUBTFUL ACCOUNTS ( 000) FY at FY at 31/12/ /12/2007 Class Allowances Provisions Uses Allowances Organisers Exhibitors 2, ,458 Other 2, ,383 Total 4, ,841 As a further means of mitigating credit risk, in certain cases, the Group uses bank sureties. As at 31 December 2006 and 2007, bank sureties in the amount of 200 thousand (related to other receivables) and 2,000 thousand (of which 1,500 thousand related to organisers and 500 thousand to other receivables), respectively, were obtained. In neither 2006 nor 2007 did the Fiera Milano Group examine any sureties. Liquidity risk As at 31 December 2007, the Group was not significantly exposed to liquidity risk thanks to the availability of financial assets on demand and of bank deposits. The Group has bank credit facilities of various forms in place. Given the overall situation, the Group gives preference to funding via the use of lines of credit for short-term uses, also with the aim of commanding better interest rates. It should also be noted that the Group made cash investments in a number of insurance policies with leading insurance companies. They are, in any case, investments on demand and low-risk and therefore the related amount can, in practical terms, be considered to be additional cash at the Group s disposal. The tables below provide an analysis by duration of the financial liabilities and a calculation of the related interest expense for the period of maturity as at 31 December 2006 and FINANCIAL LIABILITIES ( 000) FY as at >5 31/12/2006 months months months months months years years years Current bank borrowings 97,880 93,340 1,976 2,564 Current interest payable Non-current bank borrowings 18,579 1,974 2,176 2,506 4,830 4,388 2,705 Non-current interest payable Trade payables 47,930 47,930 Other financial liabilities 6,085 6, Total 170, ,298 2,375 3,064 2,601 2,899 5,390 4,879 2,943 FINANCIAL LIABILITIES ( 000) FY as at >5 31/12/2007 months months months months months years years years Current bank borrowings 72,989 68,442 2,041 2,506 Current interest payable Non-current bank borrowings 11,916 2,242 2,581 3,066 2,703 1,324 Non-current interest payable Trade payables 50,889 50,889 Other financial liabilities Total 135, ,305 1,682 2,113 2,550 2,837 3,367 3,014 1,441

88 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments 87 Market risks The Group s policy is not to undertake transactions in derivatives as a means of hedging market risk. a) Interest-rate risk The investment of temporary cash surpluses in insurance policies is designed to optimise the yield of the liquidity that is cyclically generated within the Group. They are low-risk investments, monetisable, with total or partial redemptions, on demand and without payment of penalties. In addition, some of the medium-term loans taken out by the Group are totally repayable at any time without payment of penalties. The Group s financial strength enables it to access credit facilities at very competitive conditions and therefore to handle any interest-rate fluctuations well. The Group constantly monitors market conditions in order to take prompt action if the scenario changes. As concerns the breakdown of bank borrowings into short and long-term, see notes 14 and 20 of these explanatory notes to the financial statements. Below is an analysis of sensitivity to interest-rate risk, which shows the finance income and expense that would have been recognised in the event of changes in interest rates within a range of plus or minus 0.5 points. ANALYSIS OF SENSITIVITY TO INTEREST-RATE RISK ( 000) Amount at Balance* Income 31/12/06 (debt) (expense) Rate +0,5% -0,5% Current accounts 14,349 20, % Capitalisation policies 92,789 70,851 1, % 1,857 1,500 Short-term advances (9,479) (12,563) (228) 3.60% (260) (196) Short-term borrowings (82,532) (36,310) (599) 3.27% (690) (507) Balance of correspondence account (5,869) (2,447) (37) 3.04% (44) (31) Current and non-current bank borrowings (24,448) (27,236) (531) 3.86% (599) (461) *average over year ANALYSIS OF SENSITIVITY TO INTEREST-RATE RISK ( 000) Amount at Balance* Income 31/12/07 (debt) (expense) Rate +0,5% -0,5% Current accounts 16,712 28,812 1, % 1,320 1,031 Capitalisation policies 62,301 59,149 3, % 3,437 2,845 Short-term advances (5,291) (6,930) (312) 4.50% (347) (277) Short-term borrowings (61,025) (67,459) (2,801) 4.15% (3,137) (2,462) Balance of correspondence account 1,089 (1,699) (57) 3.22% (63) (46) Current and non-current bank borrowings (18,589) (22,843) (1,091) 4.78% (1,206) (978) *average over year

89 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER b) Foreign-exchange risk This risk is negligible since, as at 31 December 2007, the Group did business almost exclusively in the domestic market and did not have any foreign-currency loans in place. The Group reserves the right to use appropriate hedging instruments in the event that specific risks of this nature should arise. c) Risk of changes in commodity prices The Group s exposure to the commodity price risk is limited. The Group generally has more than one supplier for each commodity considered to be critical. In some cases it enters into long-term contracts to assure lower price volatility. Disclosure concerning guarantees given, commitments, and other potential liabilities These items amounted to a total of 4,562 thousand and featured the following breakdown: Bank sureties issued to third parties: - 1,098 thousand in sureties issued by Nolostand SpA and 1,094 thousand in sureties issued by Fiera Food System SpA and 446 thousand in sureties issued by SIFA SpA to the Financial Administration for early refund of VAT; - 1,018 thousand in sureties issued by Fiera Milano Congressi SpA to the Financial Administration for the refund of VAT credits related to financial year 2002; thousand in sureties referring to the contract for rental of the company branch stipulated by Fiera Milano Congressi SpA with Villa Erba SpA; thousand in sureties issued by Edizioni Fiera Milano SpA and Fiera Milano International SpA as guarantee for lease contracts; - 10 thousand in sureties issued to third parties by Nolostand SpA for service supply contracts. It should also be noted that, following merger of the subsidiary Italian System for Business SpA into Fiera Milano SpA, there is no longer any commitment to support the subsidiary via the letter of patronage for 21,960 thousand issued to Vivico Unter den Linden GmbH & Co. KG (the lessor) to guarantee the 12-year lease contract stipulated for the Berlin site by the merged subsidiary.

90 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments 89 INCOME STATEMENT The different time period of the financial years under review, the analytical presentation of positive and negative income items in specific schedules within the financial statements, and the previous comments on Balance Sheet items make it possible to limit the comments below to just the main items for the year. REVENUES 28) Revenues from sales and services They amounted to 302,536 thousand ( 106,269 thousand as at 31 December 2006). The breakdown by type of revenue was as follows: REVENUES FROM SALES AND SERVICES ( 000) 31/12/07 31/12/06 Change (6 months) Exhibitor fees 125,219 37,031 88,188 Miscellaneous fees and royalties 2, ,863 Exhibition space sales 64,427 24,905 39,522 Exhibitions and congress organisation services 12,073 6,166 5,907 Rental of stands, fittings, and equipment 41,662 17,540 24,122 Ticket office sales 3,279 1,006 2,273 Exhibition site services 5,845 1,270 4,575 Supplementary exhibition services 3,757 1,591 2,166 Advertising spaces and services 15,864 4,716 11,148 Catering and canteen services 19,154 7,771 11,383 Exhibition insurance services 2, ,140 Access surveillance and customer care services 1, ,097 Administrative, telephone and internet services 1, Multimedia services and on-line catalogue 3,014 1,041 1,973 Total 302, , ,267 The item includes 3,354 thousand concerning related-party transactions ( 1,326 thousand as at 31 December 2006). For further details, see note 44 on these transactions.

91 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER OPERATING COSTS 29) Costs of materials They amounted to 6,110 thousand ( 3,409 thousand as at 31 December 2006). They featured the following breakdown by type: COSTS OF MATERIALS USED IN OPERATIONS ( 000) 31/12/07 31/12/06 Change (6 months) Change in finished goods and semiprocessed goods inventories Change in raw materials inventory Raw materials Secondary materials and consumables 2,592 1,532 1,060 Printed materials, forms, and stationery 3,153 1,678 1,475 Finished goods and packaging Total 6,110 3,409 2,701 30) Service costs They amounted to 163,562 thousand ( 66,669 thousand as at 31 December 2006). They featured the following breakdown by type: COSTS FOR SERVICES ( 000) 31/12/07 31/12/06 Change (6 months) Change in suspended costs incurred for future exhibitions 3,586-3,575 7,161 Stands and equipment for exhibitions 15,053 8,522 6,531 Services rendered by the Fiera Milano Foundation 9,757 4,060 5,697 Security and gate services 9,628 4,133 5,495 Maintenance 6,133 3,809 2,324 Energy costs 8,347 3,370 4,977 Ticketing 2, ,277 Technical assistance and auxiliary services 3,467 1,372 2,095 Cleaning and waste collection 6,730 3,069 3,661 Advertising services 16,291 6,848 9,443 Technical, legal, commercial & administrative advisory services 14,903 7,121 7,782 IT services 2,607 1,430 1,177 Insurance premiums 2,806 1,544 1,262 Emoluments of Statutory Auditors Expenses for operation of statutory bodies Transport services 3,222 1,679 1,543 Services for meetings and congresses Collateral events connected with exhibitions Catering services 16,608 6,489 10,119 Telephone and Internet expenses 2, ,171 Equipment hire 24,206 8,457 15,749 Other 13,977 5,822 8,155 Total 163,562 66,669 96,893

92 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments 91 The Service costs item primarily consists of costs for operating the exhibition sites during activation, performance, and dismantling of exhibitions and congresses. These costs are essentially in line with those proquota of 31 December The item includes 12,124 thousand concerning related-party transactions ( 5,436 thousand as at 31 December 2006). For further details, see note 44 on these transactions. 31) Costs for use of third-party assets These amounted to 74,343 thousand ( 33,790 thousand at 31 December 2006) and featured the following breakdown: COSTS FOR USE OF 3RD-PARTY ASSETS ( 000) 31/12/07 31/12/06 Change (6 months) Rental of company branches 13,483 5,666 7,817 Rental and expenses of exhibition sites 55,087 26,910 28,177 Other rental costs 4, ,055 Car hire Hire of office equipment and photocopiers Operating lease fees Total 74,343 33,790 40,553 Other rental costs include 2,058 thousand for the lease payment on Palazzo Italia, which was inaugurated in Berlin on 19 October The item includes 68,119 thousand concerning related-party transactions ( 33,176 thousand as at 31 December 2006). For further details, see note 44 on these transactions. 32) Payroll and employee benefit costs These amounted to 52,797 thousand ( 23,992 thousand at 31 December 2006) and featured the following breakdown: PAYROLL & EMPLOYEE BENEFIT COSTS ( 000) 31/12/07 31/12/06 Change (6 months) Costs capitalised for internally produced assets Wages and salaries 33,212 14,948 18,264 Social security charges 10,344 4,701 5,643 Post-employment benefits Outside and temporary staff 2, ,246 Directors emoluments 3,580 1,487 2,093 Early retirement incentives 2, ,572 Other operating costs Total 52,797 23,992 28,805

93 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Employee benefit costs take account of the different actuarial measurement of post-employment benefit (i.e. ex-severance indemnities) provisions accrued as up to 31 December 2007, stemming from new supplementary pension-planning regulations. The annual technical discount rate used to calculate the present value of provisions went from 4.60% as at 31 December 2006 to 5.50%. Employee benefit costs include 2,186 in early retirement incentives for employees who left the company during the year. The early retirement incentives are part of a project concerning the turnover of management. The following table shows average employee headcount by contractual category: AVERAGE EMPLOYEE HEADCOUNT BY CATEGORY 31/12/07 31/12/06 Change Managers Middle managers & white-collars Blue-collars Total Employees of continuing operations This item includes 78 thousand concerning transactions with related parties. For further details, see note 44 on these transactions. Employee benefits Stock option plans Fiera Milano SpA implements, and has implemented in past years, stock option plans with the aim of motivating and retaining Group managers. During FY 2005/2006, a new plan was initiated for the period The shareholders, in their extraordinary meeting of 28 October 2005, passed a resolution deciding to: attribute the Board of Directors with the power to increase share capital on one or more occasions, for consideration and in divisible form, by a maximum nominal amount of 1,000 thousand, with exclusion of option rights, to service a new stock option plan for the 3-year period ; give the Board of Directors a mandate to approve the above stock option plan s regulations and identify plan beneficiaries. As regards this last point, on 16 December 2005 Fiera Milano SpA s Compensation Committee started the process for identification of the plan s beneficiaries, preparing a recommendation in this respect for the Board of Directors. Specifically, the Compensation Committee identified 43 plan beneficiaries, among managers and executive directors of the Fiera Milano Group and of the Foundation, the ultimate parent entity. On 16 January 2006 the Board of Directors of Fiera Milano SpA implemented the shareholders resolution

94 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments 93 passed at the meeting held on 28 October 2005 concerning adoption of the Stock Option Plan and approved: the Plan Regulation, which reflects the guidelines approved at the Shareholders Meeting; the list of beneficiaries and the number of options to be assigned to each of them, also taking the Compensation Committee s recommendation into account, for a total of 700,000 options; the per-option exercise price, fixed at 8.99; the report pursuant to Article 2441 of the Italian civil code concerning execution of an initial tranche of 700,000 of the capital increase to service the plan. On 13 February 2006, the Board of Directors then formally decided at a meeting recorded by a public deed in a notary s presence on the capital increase of a maximum nominal amount of 700 thousand, with exclusion of option rights as per Article 2441, paragraphs 5 and 8, of the Italian civil code, via the issue of a maximum number of 700,000 ordinary shares of a par value of 1.00 each, of which 695,000 are already assigned. As regards this, the independent auditor PricewaterhouseCoopers has issued a fairness opinion on the increase decided upon, as required by current regulations. In 2007, a number of directors and senior managers left the Group, and the options that had not yet matured lost their effect and were returned to the Company. At the same time, the Board of Directors, in its meeting of 10 August 2007, assigned 136,250 new options to two directors and one senior manager at an exercise price per option of For fair-value measurement of shares granted via stock option plans the Fiera Milano Group uses experts who apply the binomial-tree mathematical model. Measurement and quantification of the stock option plan has taken account of the change of FY end date from 30 June to 31 December of each year. The key reference data used in the model to set a value on the second lot of the current stock option plan are: - average share price on option grant date: 6.10; - exercise price as at option grant date: 7.63; - expected volatility: 15.47% estimated on the basis of the shares historical price volatility; - risk-free rate: 4.14%; - contractual life: as described above.

95 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Changes during the year are shown in the following table: STOCK OPTIONS: CHANGES ( 000) 31/12/07 31/12/06 Number Average Number Average subscr. price subscr. price Outstanding at beginning of FY 579, , Granted during FY 136, Cancelled during FY 103, ,500 Exercised during FY - - Lapsed during FY - - Outstanding at year-end 611, ,500 Exercisable at year-end 123,750-33) Other operating expenses These amounted to 6,569 thousand ( 3,183 thousand at 31 December 2006) and featured the following breakdown: OTHER OPERATING EXPENSES ( 000) 31/12/07 31/12/06 Change (6 months) Balance of closure of previous FY s exhibition accounts Gifts and promotional accounts Contributions and liberalities Copyright royalties (SIAE) Local taxes 2,063 1, Bad debts Municipal advertising taxes Other operating costs 1, Total 6,569 3,183 3,386 The item includes 683 thousand concerning related-party transactions ( 386 thousand as at 31 December 2006). For further details, see note 44 on these transactions. 34) Other revenues These amounted to 7,976 thousand ( 1,991 thousand at 31 December 2006) and featured the following breakdown: OTHER REVENUES ( 000) 31/12/07 31/12/06 Change (6 months) Capital gains on non-current assets Use of doubtful debt provision Changes in estimates for previous FY s Re-charge of costs of seconded staff Office rental and expenses Insurance indemnities Other cost recoveries 5, ,636 Other income Total 7,976 1,991 5,985

96 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments 95 The item includes 4,882 thousand concerning related-party transactions ( 296 thousand as at 31 December 2006). For further details, see note 44 on these transactions. 35) Depreciation of property, plant, and equipment They amounted to 9,984 thousand ( 5,248 thousand as at 31 December 2006). The details of depreciation are shown in the relevant section of the Explanatory Notes commenting on Property, plant, and equipment. The item included depreciation of leased property, plant, and equipment amounting to 3 thousand ( 27 thousand as at 31 December 2006). 36) Amortisation of intangible assets They amounted to 3,854 thousand ( 1,722 thousand as at 31 December 2006). 37) Adjustments to asset value They amounted to 1,424 thousand ( 2,075 thousand as at 31 December 2006). Details of this item are shown in the following table: ADJUSTMENTS TO ASSET VALUE ( 000) 31/12/07 31/12/06 Change (6 months) Write-downs of Property, Plant, and Equipment Write-downs of Intangible assets Write-downs following sale of Build Up - -1,875 1,875 Trademarks of exhibitions no longer organised Impairment of TL.TI Expo SpA goodwill Total -1,424-2, ) Allowance for doubtful accounts and other provisions This amounted to 2,854 thousand ( 8,286 thousand as at 31 December 2006), subdivided as follows: Additions: thousand in provisioning for doubtful accounts; - 1,170 thousand for other provisions by the direct parent company for risks and current disputes; - 3,445 thousand for the provision for the updated valuation for the potential alternative use of the property in Berlin; - 1,288 thousand primarily for provisions by ExpoCTS SpA for the risks mentioned above concerning the related balance-sheet item.

97 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Uses: - 1,593 thousand for uses of previous provisions for expected exhibition losses; - 2,445 thousand for uses of provisions made in the previous year related to Palazzo Italia in Berlin. 39) Finance income This amounted to 5,333 thousand ( 2,400 thousand as at 31 December 2006), subdivided as follows: FINANCE INCOME ( 000) 31/12/07 31/12/06 Change (6 months) Interest earned on cautionary deposit for rental of exhibition centre Interest payable to the Foundation on balance of correspondence account Interest earned on bank deposits 1, Interest earned on current financial assets (investment of cash surplus) 3,141 1,757 1,384 Foreign exchange gains Interest earned on Eurostands bond loan Gains on discounting severance indemnities (TFR) Other finance income Total 5,333 2,400 2,933 The item includes 356 thousand concerning related-party transactions ( 159 thousand as at 31 December 2006). For further details, see note 44 on these transactions. 40) Finance expense This amounted to 5,172 thousand ( 1,922 thousand as at 31 December 2006), subdivided as follows: FINANCE EXPENSE ( 000) 31/12/07 31/12/06 Change (6 months) Interest paid on bank overdrafts 4,204 1,358 2,846 Interest payable to the Foundation on balance of correspondence account Interest expense for lease contracts Discounting to present value of liabilities Foreign exchange losses Charges for discounting TFR Charges for discounting receivables Other finance expenses Total 5,172 1,922 3,250 The item includes 98 thousand concerning related-party transactions ( 37 thousand as at 31 December 2006). For further details, see note 44 on these transactions.

98 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments 97 41) Income tax Income tax amounted to 5,628 thousand (a negative 7,699 thousand as at 31 December 2006), subdivided as follows: INCOME TAX ( 000) 31/12/07 31/12/06 Change (6 months) Current income tax 1, Deferred income tax 4,558-8,150 12,708 Total 5,628-7,699 13,327 An analysis of current taxes as at 31 December 2007 is shown below: CURRENT INCOME TAX ( 000) Current income tax (Ires) 1,356 Current income tax (IRAP) 1,504 Income from tax consolidation -1,790 Total 1,070 Beginning with the 2007 financial year, Fiera Milano SpA, as the consolidating entity, and all Italian subsidiaries (the consolidated companies) with the exception of TL.TI Expo SpA opted for the Italian tax consolidation procedure for corporate income taxes (IRES). For the financial year, Fiera Milano SpA and a number of its subsidiaries exercised the option to take part in the tax consolidation of the Fiera Milano Foundation, but following the change in the financial year of Fiera Milano SpA and all its subsidiaries, participation in this process was discontinued in the financial year ended 31 December Consolidated fiscal gains reflect: (i) the effects of the offsets made between the taxable income of certain subsidiaries and the tax losses of Fiera Milano SpA as at 31 December 2007 (in the amount of 1,356 thousand); (ii) the reduction in the tax consolidation provision in relation to the residual repayment obligations to the Foundation (in the amount of 392 thousand); and (iii) the benefit resulting from the detaxation of dividends and other minor transactions ( 42 thousand). Deferred taxes as at 31 December 2007 amounted to 4,558 thousand, representing the balance between deferred tax assets and liabilities. Deferred tax assets reflect the debiting of the release of the deferred tax assets allocated in previous years (a negative 3,031 thousand). Deferred tax liabilities mainly reflect the different method of recognition of goodwill amortisation envisaged by the IASs/IFRSs ( 1,527 thousand). Both deferred tax assets and liabilities were affected by the change in tax rate as compared with the allocations in previous years. Deferred tax are allocated to non current liabilities while deferred tax assets are allocated to current asset.

99 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Deferred tax assets and deferred tax liabilities, subdivided in category, are detailed as follows: DEFERRED INCOME TAX ( 000) Posted to Income Change 31/12/06 Statement consol. area 31/12/07 Deferred tax assets Excess deprec., ammort, and write-downs 3, ,720 Provisions for risks and charges 857 1,723 2,580 Reportable tax losses 13,717-3,959 9,758 Other temporary differences 1, ,181 Total 19,220-3, ,239 Deferred tax liabilities Amortisation of goodwill and others 15,535 1,507 17,042 Finance lease Other temporary differences Total 16,328 1, ,835 RECONCILIATION BETWEEN THEORETICAL AND EFFECTIVE CORPORATE INCOME TAX (IRES) ( 000) Consolidated profit (loss) before income tax -10,824 Statutory rate applicable for corporate income tax (IRES) 33% Theoretical IRES (corporate income tax) -3,572 Differences between theoretical and effective taxes: Non-deductible devaluations and write-downs of assets 279 Non-deductible tax losses for merged companies 318 Tax losses and temporary differences not reported 2,452 Change in tax rate for deferred taxes -143 Reversal of deferred tax assets on past tax losses 4,504 Non-deductible operating costs and others 187 Effective IRES (corporate income tax) 4,025 RECONCILIATION BETWEEN THEORETICAL AND EFFECTIVE CORPORATE INCOME TAX (IRAP) ( 000) Net operating profit (loss) -10,985 Labour costs 52,797 Consolidated taxable base for purposes of IRAP 41,812 Statutory rate applicable for corporate income tax (IRAP) 4.25% Theoretical IRAP (corporate income tax) 1,777 Differences between theoretical and effective taxes: Asset devaluations and write-downs 36 Effect of tax wedge - parent company -146 Non-taxable operating revenues - parent company 105 Non-reportable negative production value -100 Change in tax rate for deferred taxes -104 Non-deductible operating costs and others 35 Effective IRAP (corporate income tax) 1,603

100 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments 99 42) Profit (Loss) for the period from discontinued operations The result from discontinued operations for the year ended 31 December 2007 amounts to net income of 1,396 thousand, compared with the net loss of 1,808 thousand as at 31 December The following table shows the breakdown of operating results: ASSETS HELD FOR SALE ( 000) 31/12/07 31/12/06 Change (6 months) Revenues 1,396 17,205-15,809 Costs 19,776-19,776 Profit (loss) before tax 1,396-2,571 3,967 Advance taxes 1,006-1,006 Current/deferred income taxes Net profit (loss) 1,396-1,808 3,204 PROFIT (LOSS) FOR THE YEAR The loss for the financial year ended 31 December 2007 amounted to 16,685 thousand, compared with the loss of 30,916 thousand at 31 December ) Earnings (Loss) per share The base earnings (loss) per share went from a negative at 31 December 2006 to a negative at 31 December 2007, which is calculated by dividing the result for the year by the weighted average number of shares outstanding in Fiera Milano SpA each year, taking the exercise of options into account. EARNINGS (LOSS) PER SHARE ( 000) 31/12/07 31/12/06 Profit (Loss) ( 000) -16,685-30,916 Average number of shares outstanding ( 000) 33,582 33,410 Basic Earnings (Loss) per share as originally reported ( ) Basic Earnings (Loss) per share recalculated to reflect dilutive effect of issue of rights ( ) The value used as the numerator to calculate base and diluted profit (loss) per share was a loss of 16,685 thousand for the financial year ended 31 December 2007 (a loss of 30,916 thousand at 31 December 2006).

101 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER The table below shows the weighted average number of ordinary shares used to calculate base and diluted Earning (loss) per share, plus reconciliation of the two figures: 31/12/07 31/12/06 Weighted average number for calculation of EPS 33,582 33,410 + number of potential shares issued without consideration Weighted average number for calculation of diluted Earnings (Loss) per share 33,504 33,415 44) Related-party transactions The companies forming part of the Fiera Milano Group executed trade transactions settled at going market rates. They concerned organisation and operation of exhibitions and other events managed by the Group. Beginning with the 2007 financial year, Fiera Milano SpA, as the consolidating entity, and all Italian subsidiaries (the consolidated companies) with the exception of TL.TI Expo SpA opted for the Italian tax consolidation procedure for corporate income taxes (IRES), with a mandatory duration of three financial years. The tax consolidation process will provide the Fiera Milano Group with definite financial benefits, including the possibility to use the Group s tax losses immediately when recognised as an offset to the profits of the consolidated companies, thereby realising an immediate tax saving. Legal relations between the companies involved in the tax consolidation process are governed by rules that also call for standardised procedures for properly adhering to fiscal obligations and to the related responsibilities of the participating companies. Fiera Milano SpA provides administrative services to some subsidiaries in order to optimise utilisation of resources and professional skills. Fiera Milano SpA also provides communication services to subsidiaries, also in order to achieve appropriate harmonisation of Group image. During the financial year ended 31 December 2007, no abnormal or unusual transactions were executed. As part of the actions taken concerning corporate governance, Fiera Milano SpA has adopted a procedure for related-party transactions. In the balance sheet, income statement and cash flow statement, the amounts of related-party positions or transactions, if significant, have been shown separately from the items concerned. The Group, in view of the total amount of balance sheet positions and income statement items, has decided to establish 2 million as the threshold of importance above which such amounts must be separately indicated. Detailed information on the transactions undertaken is provided below, dividing them into Transactions with the Foundation (the ultimate parent entity) and Transactions with other related parties.

102 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments 101 Transactions with the Foundation Recurrent transactions with the ultimate parent entity are summarised below: Property lease contracts with Fiera Milano SpA On 18 January 2003, Fiera Milano, exercising the option envisaged by the contract originally signed on 1 January 2000, stipulated a rental contract with the Foundation specifically concerning the nascent Rho-Pero exhibition centre. The rent was fixed at 6% of the investment made by the Foundation to create the out-of-town exhibition centre (Polo Fieristico Esterno). In July 2005, Fiera Milano SpA and the Foundation reached an agreement that redefined the percentage for establishing the rent of the new Rho-Pero site for the first four years, including , and fixing the overall investment on which the rent was to be calculated at 755 million. Specifically, as compared with the full rate of 6%, it was agreed to apply a rate of 5% for FY 2005/2006 and to increase this rate by 0.25% per year until the full 6% was reached. The same agreement also established the amount of rental for the portion of the downtown site that has been retained, i.e million. As per the provisions of the contract signed on 18 January 2003, the lease contract for both exhibition sites has a 9-year duration, starting on 1 January 2006, the date when Fiera Milano SpA officially took on the Rho- Pero exhibition site. Property lease contract with Fiera Milano Congressi On 24 January 2000, the Foundation signed an agreement with Fiera Milano Congressi SpA concerning use of part of Pavilion 17 (comprising some 15,000 gross sqm of exhibition space) within the downtown Milan exhibition site, known as Fiera Milano Congressi Center, which lasts until 31 December This area was granted for use to Fiera Milano Congressi SpA free of charge until 31 December 2002 (against the major restructuring work done on the area in question by Fiera Milano Congressi SpA). As from 1 January 2003, the rent was determined as a percentage of revenues, excluding those generated by activities performed outside the exhibition site. On 15 March 2005, this contract was updated to take into account the extension under construction of the convention centre housed in Pavilion 17. The new agreement between the Foundation and Fiera Milano Congressi lasts until 30 June 2017 and will be automatically reviewed for further 6-year periods, saving notice of termination. Rent for the two new floors was payable as from 1 July 2006 and in the first FY of application only 50% of the amount was payable. Group VAT payments Taking advantage of the faculty provided by Italian Presidential Decree 633/72, as from 1 January 2002, Fiera Milano has accepted the procedure, managed by its ultimate parent entity the Foundation, for group settlement of VAT obligations. This mechanism makes performance of VAT obligations easier without causing any additional costs for Fiera Milano SpA.

103 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Group tax consolidation with the Foundation For financial year , Fiera Milano SpA and a number of its subsidiaries had exercised the option to take part in the tax consolidation process with the Foundation, the ultimate parent entity. Following the change in financial year by Fiera Milano and all of its subsidiaries, participation in this process was discontinued. Nonetheless, there remain certain contractual obligations to the Foundation, which are referenced in the various items of the financial statements. Service supply contract Fiera Milano has stipulated an annual contract with the Foundation for reciprocal supply of services, as appropriate or necessary for performance of the parties respective activities. The contract envisages provision of two types of services, i.e. i) general, forming part of the overall business of the party supplying them and provided to the other party on an ongoing, systematic basis, and ii) specific services, i.e. provided upon request and concerning specific activities to be agreed on a case-by-case basis between the customer and supplier parties, also on the basis of specific bids/estimates. Trademark license contracts Fiera Milano has a contract with the Foundation for a license permitting exclusive use of the Fiera Milano trademark, owned by the Foundation. The contract lasts until 31 December 2017 and is automatically renewable for 15 years. By way of payment for the aforementioned license, Fiera Milano pays the Foundation a token annual fee of 1 euro. The Foundation has also granted the Group licenses for exclusive use of the Bijoux, Cart, Chibi&Cart, Chibidue and Chibimart trademarks for a total annual fee of some 168 thousand and for that of the MACEF trademark for a fee of some 12,500 thousand. Effective 1 January 2003, the Foundation also granted the Group licenses for exclusive use of the Lift and Miart trademarks. The licenses last until 31 December 2017 and are automatically renewable for a further five years. The Foundation has also granted the license to use the Tuttofood trademark for the 2007 and 2009 editions for the token amount of 1 euro/year. Similarly it has granted the license to use the trademarks Build Up Expo, Buy & Drive, Salone del Cioccolato di Qualità, and Salone della Birra Artigianale e di Qualità for the 2007 edition, once again for the token amount of 1 euro/year. After the 2007 edition, the Foundation sold the Build Up Expo trademark to Rassegne SpA for 255 thousand, and Rassegne SpA then sold it as part of the transaction with Made Eventi Srl. In addition, the Foundation has also granted exclusive licenses to use the trademarks of the companies Edizioni Fiera Milano, Expopage, Fiera Milano Congressi, Fiera Milano International, and Fiera Milano Tech. The licenses have a 15-year term and can be renewed for another 15 years, whilst the annual fee is 100 for each trademark. Support in the launch of new exhibitions An agreement has been defined in relation to the new exhibitions launched in 2007 for which the Foundation owns the trademarks, including Build Up Expo and Tuttofood in particular. Based on this agreement, the Foundation has decided to pay a portion of the costs that the Fiera Milano Group incurred to launch and start up these new initiatives. The amount paid was 4.2 million, 3.0 million of which was paid to Fiera Milano SpA and 1.2 million paid to Rassegne SpA.

104 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments 103 Transactions with other related parties In 2007, via Fiera Milano International SpA, the Group had business dealings with Reed Exhibitions Italia, a minority shareholder of the Company, mainly for promotional and commercial services connected with exhibitions managed. Via ExpoCTS, the Group has dealings with the Milan Chamber of Commerce and the Unione del Commercio di Milano mainly for promotional and commercial services connected with exhibitions managed by the Company. The transactions in place in any case relate to the normal course of business and are settled at market conditions. The main transactions with related parties are summarised in the table below, along with the specification that the Group has decided to set a significance threshold of 100 thousand for these items, which is based on the cumulative amount of the transactions executed during the year by each party. BALANCE SHEET AND INCOME STATEMENT CAPTIONS WITH RELATED PARTIES AS UP TO 31/12/07 ( 000) Non-current Revenues Costs for Payroll & trade and Trade and Current Other from Costs use of employee Other other other financial Trade current sales and for 3rd-party benefit operating Other Finance Finance receivables receivables assets payables liabilities services services assets costs expenses revenues income expense Ultimate parent entity & sister companies Fiera Milano Foundation 12,618 2,257 1,089 11,219 2,622 9,757 67, , Sviluppo Sistema Fiera Villa Erba Other related parties Reed Exhibitions Italia , CCIAA Milano Total related parties 12,618 3,061 1, ,379 3,354 12,124 68, , Reported totals 14,430 77,825 63,389 50,889 32, , ,562 74,343 52,797 6,569 7,976 5,333 5,172 Related parties/reported totals - % 87% 4% 2% 1% 35% 1% 7% 92% - 10% 61% 7% 2%

105 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER RELATED-PARTY CASH FLOW ( 000) 31/12/07 31/12/06 Cash flow from operating activities Revenues and income 8,236 1,627 Costs and expenses (81,004) (40,022) Interest receivable Interest payable (98) (96) Change in trade and other receivables Change in trade and other payables (5,918) (5,691) Total (77,727) (43,386) Cash flow from investing activities Investments in non-current assets:. Tangible and intangible 29 3,629. Other non-current assets Total 29 3,802 Cash flow from financing activities Change in financial assets/liabilities (4,781) 1,888 Total (4,781) 1,888 Cash flow in period (82,479) (37,696) The table below shows the share of Related-party cash flows: SHARE OF RELATED-PARTY CASH FLOWS ( 000) Cash flow from Cash flow from Cash flow from operating activities investing activities financing activities FY ended : Total 11,236 5,760 (14,442) Related parties (77,727) 29 (4,781) FY ended : Total 33,256 (13,453) (20,038) Related parties (43,386) 3,802 1,888

106 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments 105 OTHER INFORMATION Significant events after year-end In 2008, as mentioned in the Management Report, a number of important efforts to optimize and redevelop the Group were completed in accordance with the guidelines set forth in the Industrial Plan. On 14 January 2008, the Fiera Milano Group and the Reed Group signed an agreement authorising the early termination of the joint venture in Fiera Milano International SpA. On 16 January 2008, as part of the Group s process of internationalisation, Fiera Milano SpA and Deutsche Messe AG (owner of the Hannover exhibition site) began the first strategic alliance between these two leaders in Europe s exhibition industry. The joint venture calls for the development of exhibition activities for the two partners in four markets outside Europe, beginning with China. Fiera Milano has acquired a 49% stake in HM Global Germany GmbH ( HM Global ) from Deutsche Messe AG. HM Global operates in China with around 60 employees and through two companies, Hannover Fairs Shanghai Ltd (based in Shanghai) and Hannover Fairs China Ltd (based in Hong Kong), and two permanent offices in Guangzhou and Beijing. Fiera Milano s Shanghai office will now be a part of HM Global. Fees paid to managers with strategic responsibilities Managers holding strategic responsibilities, i.e. those having the power and direct or indirect responsibility for the planning, management and control of Group activities, have been identified as being the CEO, General Manager and Deputy General Manager of the Parent Company and Managing Directors of the subsidiaries. The total remuneration of this category of managers for the financial year closed at 31 December 2007 amounted to 2,805 thousand and substantially consisted of short-term benefits. Disclosure pursuant to Article 149-duodecies of the CONSOB regulation for issuers The table below shows the fees paid during 2007 for services provided by the independent auditors. FEES 2007 FOR INDEPENDENT AUDITORS ( 000) Service provider Client Fees - FY 2007 Auditing PricewaterhouseCoopers Parent company - Fiera Milano 92 Subsidiaries 251 Other services PricewaterhouseCoopers Parent company - Fiera Milano* 37 Subsidiaries* 88 Total 468 *Agreed upon procedures and other services Rho (Milan), 26 March 2008 On behalf of the Board of Directors Michele Perini Chairman

107 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Attachment No. 1 LIST OF CONSOLIDATED COMPANIES AS AT 31 DECEMBER 2007 AND OTHER INVESTMENTS A) List of fully consolidated companies Share held (%) Share capital Group Direct Indirect Share held ( 000)* Total Fiera Milano other Group by Group Company name and headquarters Companies % companies Parent Company: Fiera Milano SpA Milan, p.le Carlo Magno, 1 33,892 Edizioni Fiera Milano SpA Milan, via Salvator Rosa, 14 2, Fiera Milano SpA Fiera Milano Congressi Spa Milan, p.le Carlo Magno, Fiera Milano SpA Fiera Milano International SpA Milan, via Varesina, Fiera Milano SpA ExpoCTS SpA Milan, Via Generale G. Govone, 66 1, Fiera Milano SpA Expopage SpA 74 Fiera Milano SpA Milan, p.le Carlo Magno, 1 2, Fiera Milano Int. SpA Fiera Food System SpA Milan, p.le Carlo Magno, Fiera Milano SpA Nolostand SpA Milan, via Mecenate, 84 7, Fiera Milano SpA S.I.F.A. SpA Milan, p.le Carlo Magno, 1 1, Fiera Milano SpA Fiera Milano Tech SpA Milan, via Gattamelata, 34 3, Fiera Milano SpA TL.TI Expo SpA 9 Fiera Milano SpA Padua, Via Guizza, 53 1, Fiera MilanoTech SpA Rassegne SpA Milan, p.le Carlo Magno, Fiera Milano SpA Eurofairs International Ltda São Paulo - SP - Brazil 99 Fiera Milano SpA Rua Padre João Manoel, 755 R$ Rassegne SpA B) List of companies accounted for at cost Share held (%) Share capital Group Direct Indirect Share held ( 000) Total Fiera Milano other Group by Group Company name and headquarters Companies % companies Sviluppo Sistema Fiera SpA Milan, largo Domodossola, 1 5, Fiera Milano Congressi Spa Obiettivo Lavoro Scrl Milan variable insignif. insignif. Fiera Milano SpA *or other currency as specifically indicated

108 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano Group Consolidated Annual Report Explanatory and supplementary notes to consolidated financial statements and Attachments 107 Declaration concerning the consolidated financial statements pursuant to Article 81-ter of CONSOB Regulation of 14 May 1999 as amended 1. The undersigned, Claudio Artusi, as Chief Executive Officer, and Bruno Boffo, as manager charged with preparing the Fiera Milano SpA s financial reports, in consideration of the provisions of Article 154-bis, paragraphs 3 and 4, of Italian legislative decree no. 58 of 24 February 1998, hereby attest to: the appropriateness, given the characteristics of the business, and the actual application of the administrative and accounting procedures followed for the preparation of the consolidated financial statements for financial year as at 31 December The assessment of the appropriateness of the administrative and accounting procedures followed in preparing the consolidated financial statements as at 31 December 2007 was based on a process defined by Fiera Milano SpA in accordance with the Internal Control Integrated Framework issued by the Treadway Commission s Committee of Sponsoring Organizations, which is the generally accepted international standard. 3. The parties further declare that the consolidated financial statements as at 31 December 2007: correspond to the corporate books and related accounting records; have been prepared in accordance with the International Accounting Standards (IASs) and International Financial Reporting Standards (IFRSs) endorsed by the European Union, as well as with the implementing measures issued in accordance with Article 9 of Italian legislative decree 38/2005, and thus provide a true and accurate account of the financial performance and standing of the Issuer and its group of consolidated companies. 26 March 2008 Signed Chief Executive Officer Claudio Artusi Signed Manager charged with preparing the company s financial reports Bruno Boffo

109

110 I N D E P E N D E N T A U D I T O R S R E P O R T

111

112

113

114 F I E R A M I L A N O S PA PA R E N T C O M PA N Y

115

116 B O A R D O F D I RE C T O R S M A N A G E M E N T R E P O R T

117 Fiera Milano SpA Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Foreword The Shareholders of Fiera Milano SpA, in their meeting held on 10 January 2007, passed a resolution changing the year-end financial statement date, moving it from 30 June to 31 December, and a similar resolution was passed by the subsidiaries. Given this change in financial year, in the Board of Directors management report, the Income Statement for FY 2007 is compared with the progressive data for the same period of the previous year (which were not, therefore, subjected to independent audit, given that they are presented solely for the purpose of comparison). The Balance Sheet, on the other hand, is compared with the figures as at 31 December 2006, which therefore refers to a period of just six months (1 July to 31 December 2006). For the Financial Statements and the Explanatory and Supplementary Notes to the Financial Statements, both the balance sheet and income statement as at 31 December 2007 are compared with the figures of the financial statements as at 31 December Performance overview The following table shows the Company s main balance sheet and income statement figures. FIERA MILANO SPA - SUMMARY OF KEY FIGURES (Amounts in 000) FY FY 12 months at 31/12/06 at 31/12/07 at 31/12/06* (6 months) Revenues from sales and services 60, , ,458 Gross operating margin (GOM) (18,520) (420) 10,120 Net operating margin (NOM) (23,493) (12,667) (1,036) Net profit (loss) 21,980 (20,797) (8,555) Net capital employed 100,493 84, ,493 covered by: Equity 97,255 75,742 97,255 Net financial position (cash)** 3,238 8,857 3,238 Investments 9,833 18,170 36,646 Employees (no. of permanent employees at end of period) *Operating figures not audited **Including short-term cash investments 55,000 40,000 55,000 On 18 May 2007, following the registration of the deed in the Companies Register, the merger by incorporation of the company Italian System for Business (ISB) in the Parent Company Fiera Milano became operational. The effects of the merger as at 31 December 2006 are not shown in a separate column as they were insignificant.

118 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Board of Directors Management Report 117 Business and financial performance in the financial year as at 31 December 2007 The following table shows the reclassified Income Statement. FIERA MILANO SPA INCOME STATEMENT (Amounts in 000) FY FY at 31/12/07 at 31/12/06 (12 months)* % % Revenues from sales and services 170, , Costs for materials Cost for services 86, , Costs for use of third-party assets 58, , Payroll and employee benefit costs 30, , Other operating expenses 4, , Total operating costs 179, , Other revenues 8, , Gross operating margin (GOM) (420) (0.2) 10, Depreciation & amortisation 9, , Allowance for doubtful accounts and other provisions 2, , Adjustments to asset value , Net operating margin (NOM) (12,667) (7.4) (1,036) (0.5) Finance income/(expense) , Valuation of financial assets (6,717) (3.9) (17,102) (9.0) Profit/(loss) before income tax: (18,744) (11.0) (6,612) (3.5) Income taxes 2, , Net profit (loss) (20,797) (12.2) (8,555) (4.5) Total cash flow (8,550) (5.0) 2, *Operating figures not audited Revenues from sales and services settled at 170,677 thousand, for a decline of 18,781 thousand from the same period of This 9.9% decrease was due, in large part, to the decline in net square metres of exhibition space given the difference in exhibition calendar, which, for the most recent financial year in particular, was affected by the lack of triennial exhibitions and by the fact that the biennial events held in oddnumbered years involve more limited exhibition space than those of even-numbered years. The change attributable to the lower revenues in square metres was partially offset by an increase in revenues from the sale of services to organisers and exhibitors. Fiera Milano SpA operates almost entirely in the domestic market and therefore does not resort to any distribution of revenues by geographical area. The Gross Operating Margin (GOM) amounts to a loss of 420 thousand vs. 10,120 thousand for the same period of The 10,540 thousand decline is due to the reduction in revenues as mentioned above, which was partially mitigated by the optimisation of costs for services. Other revenues benefited from the contribution of the Foundation to the costs of launching and promoting new exhibitions in the amount of 3,036 thousand.

119 Fiera Milano SpA Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER The Net Operating Margin (NOM) came to a loss of 12,667 thousand, as compared with the loss at this level of 1,036 thousand for the same period of 2006, and this 11,631 thousand decline was affected primarily by the decline in GOM. In addition, depreciation and amortisation were affected by the beginning of full operations of the work to complete the new exhibition site. During the year, there was a further net provision of 1,000 thousand related to the Palazzo Italia initiative in Berlin based on updated assessments of potential alternative uses of this site. Moreover, adjustments of asset value include the elimination of the residual costs for leasehold improvements in the amount of 412 thousand related to this property. The net financial income shows a positive balance of 640 thousand, 10,886 thousand lower than the figure for the same period of 2006, mainly due to the lower dividends distributed by the subsidiaries. The item valuation of financial assets amounts to 6,717 thousand and relates to the write-downs following the impairment test on investments. The value adjustments concerned Fiera Milano Tech ( 4,538 thousand), Edizioni Fiera Milano ( 1,307 thousand), Rassegne ( 780 thousand), and TL.TI Expo ( 92 thousand), and reflect the updated financial projections for these subsidiaries. The net loss at 31 December 2007 amounted to 20,797 thousand. Balance sheet and financial performance: The following table shows a reclassified balance sheet. FIERA MILANO SPA - RECLASSIFIED BALANCE SHEET (Amounts in 000) FY FY at 31/12/07 at 31/12/06 Intangible assets 38,673 39,933 Tangible Assets 26,577 28,367 Financial fixed assets 88,745 83,618 Other non-current assets 11,196 12,850 Non-current assets 165, ,768 Inventories 1,686 1,135 Receivables from Customers 30,328 34,114 Total discontinued operations - 3,825 Current assets 32,014 39,074 Trade payables 26,217 24,820 Payments received on account 38,186 31,808 Taxes and social security payable 2,654 1,323 Provisions for risks and charges and other current liabilities 25,657 27,432 Current liabilities 92,714 85,383 Net working capital (60,700) (46,309) Gross capital employed 104, ,459 Employee severance indemnities 5,976 8,096 Provisions for risks and charges and other non-current liabilities 13,916 9,870 Net capital employed 84, ,493 covered by: Equity 75,742 97,255 Net financial position (cash) 8,857 3,238

120 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Board of Directors Management Report 119 As at 31 December 2007, the fixed assets amount to 165,191 thousand and do not present any significant changes overall compared with the figure of 164,768 thousand as at 31 December The net working capital, which is the balance between current assets and current liabilities, went from a negative 46,309 thousand as at 31 December 2006 to a negative 60,700 thousand as at 31 December Fiera Milano structurally features negative working capital due to the favourable cash-cycle typical of exhibitions, which also affects Fiera Milano SpA as it manages the administration and cash on behalf of all the Organisers hosting exhibitions on their own sites. Equity, which amounts to 75,742 thousand, is 21,513 thousand less than at 31 December 2006, due mainly to the loss recorded during the financial year under review. The net financial position at 31 December 2007 shows net debt of 8,857 thousand compared with net debt of 3,238 thousand at 31 December Investments: In the financial year ended 31 December 2007, investments totalling 18,170 thousand were made, divided as follows: INVESTMENTS (Amounts in 000) FY FY at 31/12/07 at 31/12/06 Investments in Intangible assets 1,899 1,810 Investments in Tangible assets 3,927 6,719 Investments in Financial assets 12,344 1,306 Total 18,170 9,835 Investments in intangible assets amounted to 1,899 thousand and mainly relate to further measures for functional development of the Group s new information system. Investments in tangible assets amount to 3,927 thousand and primarily concern works to complete the systems for the new fieramilano exhibition site, furnishings and equipment to support exhibition activities, and restaurant facilities. Investments in financial assets amounted to 12,344 thousand and relate to the acquisition of the remaining 49% stake in Fiera Milano Tech in the amount of 2,250 thousand and to actions on the capital of the subsidiaries Edizioni Fiera Milano, Rassegne, Expo CTS, Italian System for Business, and Fiera Milano Tech taken during the year, in part to support the acquisitions that a number of these companies made during the year. Owing to the characteristics of its business, the Company has not borne costs or investments typically forming part of research and development expenses. No abnormal and/or unusual operations took place during the financial year, nor were any significant one-off events and operations reported.

121 Fiera Milano SpA Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Employees: As at 31 December 2007, there were 367 permanent employees, which compare with the figures for the previous year as follows: EMPLOYEES ((headcount of indefinite-term employees) At year-end 31/12/07 31/12/06 Managers Middle managers and white-collar workers Total The increase posted for upper management is largely transitory, given that five employees of the direct parent company left the company on 1 January 2008, as compared with the four new hires during the latter part of 2007.

122 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Board of Directors Management Report 121 Performance of subsidiary companies Given this change in financial year, which also involved the subsidiaries, in this report, the Income Statement for FY 2007 is compared with the progressive data for the same period of the previous year (which were not, therefore, subjected to independent audit, given that they are presented solely for the purpose of comparison). The Balance Sheet, on the other hand, is compared with the figures as at 31 December 2006, which therefore refer to a period of just six months (1 July to 31 December 2006). It should also be noted that the Group companies prepare their financial statements in accordance with Italian accounting principles. Value-Added Services Segment Nolostand, Fiera Food System, Edizioni Fiera Milano, and Expopage operate in this segment. The Value-Added Services segment changed from the previous year with the sale of Eurostands on 22 March 2007 and the merger of Italian System for Business into Fiera Milano SpA. The company Eurofairs International Consultoria e Participações, based in São Paulo, Brazil, is not operational. Nolostand SpA Share capital: 7,500,000 fully paid-in % ownership: 100% Nolostand SpA is active in the stand fittings market and is the leader in the sector of pre-assembled stands featuring high technological and design content. NOLOSTAND (Amount in 000) Italian GAAPs FY FY a 31/12/07 31/12/06 Revenues from sales and services 29,293 37,470 Gross operating margin 4,134 3,031 Net profit/(loss) (736) (2,194) Net capital employed 13,645 17,476 covered by: Equity 4,479 5,215 Net financial position (cash) 9,166 12,261 Investments 1,231 1,642 Employees (headcount at end of period) a Data not audited The Nolostand accounts as at 31 December 2007 closed with revenues of 29,293 thousand, down 8,177 thousand from the previous financial period. The decline is due to the lack of the important non-recurring

123 Fiera Milano SpA Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER contracts received in 2006 (e.g. the Turin Winter Olympics). Gross operating margin, on the other hand, improved significantly over 2006 thanks to the combined effect of a marketing strategy that is increasingly focused on the company s core business and the incisive efforts to optimise costs and increase efficiency in the company s main areas of operations. The company s net result reflected the effects of the amortisation of goodwill paid for the acquisition of the stand fittings division and of the finance expense connected with loans taken out to cover this acquisition. In 2007, the company posted revenues abroad of roughly 48 thousand. Nolostand has 19 permanent employees, three more than in the financial year as at 31 December The draft year-end accounts as at 31 December 2007 closed with a loss of 736,425, and the company s Board of Directors has proposed to the shareholders that this loss be carried forward. Fiera Food System SpA Share capital: 333,334 fully paid-in % ownership: 100% FIERA FOOD SYSTEM (Amount in 000) Italian GAAPs FY FY a 31/12/07 31/12/06 Revenues from sales and services 18,874 18,426 Gross operating margin Net profit/(loss) Net capital employed (690) (826) covered by: Equity Net financial position (cash)* (1,337) (1,269) Investments Employees (headcount at end of period) 5 4 a Data not audited *Including short-term cash investments Fiera Food System s mission is the management of commercial catering, bars and cafés, and banqueting services, with special reference to services concerning exhibitions and congresses. Currently, 84 catering outlets are operating at the new fieramilano site, the management of which the company has assigned to qualified operators. During the year, the international restaurant Sadler was opened, as well as two high-quality cafés. The accounts as at 31 December 2007 closed with revenues higher than those of the previous year and with net profit going from 193 thousand to 264 thousand.

124 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Board of Directors Management Report 123 The company operates with 5 permanent employees, one more than for the previous year. The draft accounts for the year ended 31 December 2007 closed with a net profit of 264,130, and the company s Board of Directors has proposed to the shareholders that this income be allocated as follows: Profit/(loss) for the year 264,130 - Allocation to Legal Reserve 13,207 - Dividend 250,924 ( ) Edizioni Fiera Milano SpA Share capital: 2,803,300 fully paid-in % ownership: 100% The Company has historically marketed graphics and publishing products and, in particular, has specialised in the production of catalogues and other publishing products relating to the exhibition and congress activities undertaken at Fiera Milano s Site. In more recent years Edizioni Fiera Milano has started a diversification strategy and extended its activity to the technical magazine and advertising space marketing sectors, also with the aim of achieving synergies with exhibitions directly organised by the Group. EDIZIONI FIERA MILANO (Amount in 000) Italian GAAPs FY FY a 31/12/07 31/12/06 Revenues from sales and services 9,906 7,764 Gross operating margin 192 (489) Net profit/(loss) (628) (881) Net capital employed 4,571 2,416 covered by: Equity 2,936 1,064 Net financial position (cash) 1,635 1,352 Investments 2, Employees (headcount at end of period) a Data not audited During the year, the company decided to strategically repositioning its core business in order to strengthen and better focus its business specifically on the technical publications segment, both in terms of publishing and the sale of advertising. As such, effective as of 1 July 2007, the company acquired the trade press company branch, comprised of seven technical publications and a web site, from VNU Business Publications Italia. The transaction involved an investment of 2,335 thousand (net of post-closing balancing payment and other minor items totalling 35 thousand), 1,021 thousand of which by taking over the employee s severance

125 Fiera Milano SpA Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER liability and other payables, net of certain assets. Following the acquisition, Edizioni Fiera Milano established a new division under the name Technology. The accounts for the year ended 31 December 2007 closed with revenues and GOM higher than those of the same period in the previous year, largely thanks to the acquisition of the Technology division and good sales of advertising space (billboards). Edizioni Fiera Milano has 55 permanent employees, 37 of which belonging to the newly acquired division. The draft year-end accounts as at 31 December 2007 closed with a net loss of 628,267, and company s Board of Directors has proposed to the shareholders that this loss, together with the losses carried forward, be covered through the use of reserves. Expopage SpA Share capital: 2,320,000 fully paid-in % ownership held directly: 74% % ownership through Fiera Milano International: 5% The Company s purpose is the marketing of multimedia services relating to exhibitions via use of the Internet. The main exhibition Organisers own equity interests in the Company, with a total stake of 21%. EXPOPAGE (Amount in 000) Italian GAAPs FY FY a 31/12/07 31/12/06 Revenues from sales and services 4,344 5,371 Gross operating margin (57) 997 Net profit/(loss) (499) 521 Net capital employed 970 1,115 covered by: Equity 1,908 2,407 Net financial position (cash) (938) (1,292) Investments Employees (headcount at end of period) a Data not audited The company operates with 32 permanent employees, the same number as in the previous year. The accounts as at 31 December 2007 closed with revenues of 4,344 thousand, down 1,027 thousand from the previous financial year. This decline may be attributed to the online catalogue service due to the lower

126 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Board of Directors Management Report 125 number of exhibitors in 2007 and the reduction in the price of the so-called lump-sum service ( servizio a forfait ). GOM went from the 997 thousand of 2006 to a loss of 57 thousand for the year under review, which primarily reflects the change in revenues. The draft year-end accounts closed with a loss of 498,733, and company s Board of Directors has proposed to the shareholders that this loss be carried forward. Exhibition & Congress Organisation Segment The companies active in this segment are Fiera Milano International, Expo CTS, Fiera Milano Tech, TL.TI Expo, Rassegne, SIFA and Fiera Milano Congressi. As at year-end, the subsidiary Rassegne was no longer operational, as discussed below. Fiera Milano International SpA Share capital: 728,000 fully paid-in % ownership: 53% (and now 100% after the close of the financial year) Fiera Milano International is active in the organisation of exhibitions and is one of the leading players on the Italian market. The remaining 47% stake, which was held by the Dutch-British group Reed Elsevier Plc through REC Italia SpA, was acquired by Fiera Milano SpA in January 2008 as part of the early termination of this joint venture. FIERA MILANO INTERNATIONAL (Amount in 000) Italian GAAPs FY FY a 31/12/07 31/12/06 Revenues from sales and services 58,744 99,572 Gross operating margin ,928 Net profit/(loss) ,427 Net capital employed (18,019) (12,022) covered by: Equity 1,235 1,177 Net financial position (cash)* (19,254) (13,198) Investments Employees (headcount at end of period) a Data not audited *Including short-term cash investments During the course of 2007, Fiera Milano International SpA organised eight exhibitions, all of which were annual events, with an overall net exhibition area of over 302,000 square metres (sqm). The spring and autumn editions of Macef, which is the main exhibition organised, exceeded 243,000 sqm. Revenues for the year, in the amount

127 Fiera Milano SpA Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER of 58,744 thousand, declined from 2006 due to the difference between the exhibition calendars. Indeed, in 2006, the biennial Mostra Convegno Expocomfort exhibition was held, and this event occupied more than 153,000 sqm of the fieramilano site. Because of the different timing of the events organised by the company, a comparison between the two years is fairly insignificant. As mentioned elsewhere in this report, in January 2008, an agreement was reached by the Fiera Milano and Reed Group for the early termination of the joint venture in Fiera Milano International. Following this agreement, the exhibitions of the Reed Group (Mostra Convegno Expocomfort, Visual Communication, and Infosecurity), which are currently managed by Fiera Milano International by way of a company branch rental, have returned under the management of their owner, while Fiera Milano International continues to manage the exhibitions of the Fiera Milano division. As at 31 December 2007, Fiera Milano International had 79 permanent employees, five more than at 31 December The draft accounts for the year ended 31 December 2007 closed with a net profit of 196,988, and the company s Board of Directors has proposed to the shareholders that these earnings be allocated as follows, taking into account the fact that the legal reserve has already reached the legally required minimum: ( ) Profit/(loss) for the year 196,988 - Dividend 195,000 - Extraordinary reserve 1,988

128 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Board of Directors Management Report 127 Expo CTS SpA Share capital: 1,000,000 fully paid-in % ownership: 51% ExpoCTS is a premier player in the exhibition organisation sector, with special reference to the sectors of tourism (BIT), professional hospitality (Host), and fashion (Milanovendemoda and Plusize). The remaining 49% interest belongs to Unione del Commercio di Milano and to Confcommercio. EXPO CTS (Amount in 000) Italian GAAPs FY FY a 31/12/07 31/12/06 Revenues from sales and services 46,484 25,312 Gross operating margin 4,518 (1,784) Net profit/(loss) 1,467 (1,639) Net capital employed (469) 5,065 covered by: Equity 3, Net financial position (cash)* (3,771) 4,622 Investments Employees (headcount at end of period) a Data not audited *Including short-term cash investments In 2007, Expo CTS organised 15 exhibitions, 10 of which from the existing portfolio (9 annual and 1 biennial) and 5 first editions (Meet Milano, La Campionaria delle Qualità Italiane, Travel & Motion, which is an additional segment of BIT, PluSize Primavera, and MIPP), for a total of roughly 232,000 sqm. The year benefited from a better exhibition calendar than for 2006, particularly with the presence of Host, which, with 103,600 sqm, grew by more than 6% from the previous edition. Of particular note among the annual exhibitions is BIT (Borsa Internazionale del Turismo), the 2007 edition of which reached some 55,000 sqm of net exhibition space. Revenues for the year, in the amount of 46,484 thousand, grew by 84% over the previous year, with a consequent improvement in GOM and net profit, despite the fact that the most recent financial year was negatively affected by provisions for risks for charges that could result from the termination or reformulation of certain multiannual contracts signed in anticipation of the launch of new exhibitions. Expo CTS has 64 permanent employees, the same as at 31 December The draft accounts for the year ended 31 December 2007 closed with a net profit of 1,467,136, and the company s Board of Directors has left it to the shareholders to decide how to allocate these earnings.

129 Fiera Milano SpA Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Fiera Milano Tech SpA Share capital: 3,000,000 fully paid-in % ownership: 100% On 23 April 2007, Fiera Milano acquired the remaining 49% equity interest in the Fiera Milano Tech company from the ANIE Federation. The two partners have in fact decided to continue their co-operation on a purely operational basis, without any company-related ties. As such, Fiera Milano now owns 100% of this subsidiary. Based on a commercial partnership agreement, ANIE will continue to support the exhibitions organised by Fiera Milano Tech in the sectors of interest to the Federation. The price paid for the 49% stake in the company was 2,250 thousand. FIERA MILANO TECH (Amount in 000) Italian GAAPs FY FY a 31/12/07 31/12/06 Revenues from sales and services 14,803 7,328 Gross operating margin (1,626) (1,210) Net profit/(loss) (4,065) (1,735) Net capital employed 7,476 6,193 covered by: Equity 2,475 2,039 Net financial position (cash) 5,001 4,154 Investments 2, Employees (headcount at end of period) a Data not audited On 1 July 2007, the company acquired the exhibitions company branch, which consists of two important professional exhibitions, i.e. Bias (an international biennial exhibition of automation, instruments, microelectronics, and ICT for industry) and Fluidtrans Compomac (an international biennial exhibition of fluid power, power and motion transmission, drive, control equipment and industrial design). Bias is the benchmark exhibition in Italy for factory automation, process control, and measuring equipment. Fluidtrans Compomac is leader in Italy and global no. 2 in the oil hydraulic, pneumatic, and fluid power sector. Only 60% of the latter event was acquired, with the remaining 40% being owned by the industry association. The transaction involved a total investment of 2,601 thousand. On 23 October 2007, Fiera Milano Tech also acquired the residual company branch concerning exhibition organisation from the subsidiary Rassegne. In addition, the company holds 51% of the subsidiary TL.TI Expo SpA. The company s business is highly cyclical, with the biennial exhibitions Livinluce, Enermotive, and Rich & Mac falling on odd-numbered years and so being held during the year under review. In June 2007, the first edition of healthcare exhibition MilanoCheckUp was also held. This event posted a greater loss than expected due in

130 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Board of Directors Management Report 129 part to the implications of the latest Italian budget law on the pharmaceutical and electro-medicinal product segments. In addition, 2007 GOM was affected by the costs incurred to rename the exhibition Intel to the two new trademarks Enermotive and Livinluce. Finally, during the fourth quarter, the company incurred costs for running the Rassegne unit, which was acquired in October. The company has 34 permanent employees, 11 of which belong to the company branch acquired from Rassegne. The draft accounts for the year ended 31 December 2007 closed with a loss of 4,064,508, and the Board of Directors has proposed to the shareholders that this loss be covered as follows: ( ) Loss for the year -4,064,508 Losses from previous FYs -1,436,490 Use other reserves 4,500,000 Retained losses -1,000,998 TL.TI Expo SpA Share capital: 1,000,000 fully paid-in % ownership held directly: 9% % ownership through Fiera Milano Tech: 51% TL. TI EXPO (Amount in 000) Italian GAAPs FY FY a 31/12/07 31/12/06 Revenues from sales and services 4,581 6,568 Gross operating margin Net profit/(loss) (891) (349) Net capital employed 5,611 6,485 covered by: Equity 5,267 6,158 Net financial position (cash)* Investments 6 26 Employees (headcount at end of period) 4 5 a Data not audited *Including short-term cash investments TL.TI Expo organises and manages the leading Italian exhibition in the transport and logistics industry, known as Transpotec & Logitec.

131 Fiera Milano SpA Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER TL.TI Expo is controlled by Fiera Milano SpA with a total stake of 60%, of which 9% is owned directly and 51% indirectly via Fiera Milano Tech. Of the remaining 40% of share capital, 25% is owned by VeronaFiere and 15% by the exhibition s founders. Transpotec & Logitec was held in October 2007, with a net exhibition area of some 56,000 sqm, down approximately 24% on the previous edition. This result was affected, in particular, by the repositioning of the exhibition in the European events calendar so that it would be placed before the event held in Amsterdam. This decision meant that the edition that was to be held in 2008 was, instead, held in 2007, with the consequence that a number of leading manufacturers of industrial vehicles chose not to participate in this edition of the exhibition. TL.TI Expo has 4 permanent employees, one fewer than at 31 December The draft accounts for the year ended 31 December 2007 closed with a loss of 891,177, and the Board of Directors has proposed to the shareholders that this loss be covered by taking the same amount from the share premium reserve. Rassegne SpA Share capital: 500,000 fully paid-in % ownership: 100% Rassegne SpA ceased operations in October 2007 after selling the division comprised of the exhibitions still in its portfolio to Fiera Milano Tech. Rassegne is expected to serve as a vehicle for future Group operations. RASSEGNE (Amount in 000) Italian GAAPs FY FY a 31/12/07 31/12/06 Revenues from sales and services 5,652 3,741 Gross operating margin (81) (525) Net profit/(loss) (395) (4,535) Net capital employed 265 (475) covered by: Equity 1,105 (385) Net financial position (cash) (840) (91) Investments Employees (headcount at end of period) - 12 a Data not audited During the year ended 31 December 2007, the company organised the first edition of the new exhibition in the building segment, Build Up Expo, with a net occupied area of over 42,000 sqm, which resulted in a loss due

132 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Board of Directors Management Report 131 to the effect of start-up of the initiative. However, the accounts as at 31 December 2006 already included provisions for this loss. During the year, the company had also planned the launch of another exhibition, known as Buy & Drive, but this event was suspended as it failed to reach the minimum threshold of exhibition space within the required timeframe, so the first edition was postponed until the following financial year. The ultimate parent entity Fiera Milano Foundation has supported the company s efforts to launch new events by contributing to the launch and promotional costs in the amount of 1,147 thousand. In September, Rassegne sold the company branch dedicated to the organisation and operation of the Build Up Expo exhibition to the company Made Eventi Srl at a price of 3,000 thousand. As at 31 December 2007, the company has no employees, as its workforce was transferred to Fiera Milano Tech following the sale described above. The draft accounts for the year ended 31 December 2007 closed with a loss of 394,548, and the sole director has proposed to the shareholders that this loss be covered by taking the same amount from the share premium reserve. Società Italiana Fiere Agroalimentari (SIFA) SpA Share capital: 1,000,000 fully paid-in % ownership: 100% SIFA organises exhibitions that focus primarily on the food & beverage and wine industries. S.I.F.A. (Amount in 000) Italian GAAPs FY FY a 31/12/07 31/12/06 Revenues from sales and services 4,065 1,265 Gross operating margin (1,915) (266) Net profit/(loss) 379 (2,972) Net capital employed (237) (2,434) covered by: Equity 1, Net financial position (cash) (1,389) (3,207) Investments Employees (headcount at end of period) 3 1 a Data not audited

133 Fiera Milano SpA Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER During the year, the first edition of Tuttofood was held. This new exhibition occupied net exhibition space of roughly 28,000 sqm, which exceeded expectations by 16%. Revenues were also higher than expected. Gross operating margin was negative due to the start-up phase of the initiative, but the exhibition posted a net profit thanks to the use of the provision for risks and charges, which was established as at 31 December 2006 for the event s expected loss. The company has 3 permanent employees. The draft accounts for the year ended 31 December 2007 closed with a net profit of 379,133, and the company s Board of Directors has proposed that this income be allocated as follows: ( ) Profit/(loss) for the year 379,133-5% allocated to Legal reserve 18,957 - covering the residual loss for the period as at 31 December ,263 - Retained earnings 132,913 Fiera Milano Congressi SpA Share capital: 200,000 fully paid-in % ownership: 100% Fiera Milano Congressi organises and manages congresses and conventions using the new Fiera Milano Congressi Center (now named the Milano Convention Centre, or MIC) situated at fieramilanocity. The company also operates with the Villa Erba (CO) property, thanks to the sole management of the congresses and events business branch of the company owning the site with the same name. FIERA MILANO CONGRESSI (Amount in 000) Italian GAAPs FY FY a 31/12/07 31/12/06 Revenues from sales and services 24,968 21,414 Gross operating margin 4,367 3,463 Net profit/(loss) 1, Net capital employed 8,782 8,169 covered by: Equity 1, Net financial position (cash)* 6,986 7,613 Investments 170 1,510 Employees (headcount at end of period) a Data not audited *Including short-term cash investments During the year, 33 congresses were organised with related exhibition space for a total of some 67,000 sqm (including the two editions of MilanoModaDonna). Revenues rose by 17% compared with the figure of 21,414

134 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Board of Directors Management Report 133 thousand recorded for the previous year. This increase is attributed to the management of the Villa Erba congress activities, now fully operational in the circuit of events organised by the Company, and to the activities organised in the new Milano Convention Centre (MIC) and at the Rho fieramilano site. In 2007, revenues increased significantly over the previous year mainly due to the incisive marketing efforts that helped a number of prestigious initiatives to choose MIC. In addition, during the year, the company directly managed the two (autumn and spring) editions of MilanoModaDonna. Gross operating margin reached 4,367 thousand, for an increase of roughly 26% over the previous year, which takes account of the fact that the improvement in margins due to increased revenues more than offset a number of increases in operating costs. The company has 27 permanent employees, 3 more than in the previous year. The draft accounts for the year ended 31 December 2007 closed with a net profit of 1,238,723, and the company s Board of Directors has proposed that these earnings be distributed as dividends, given that the legal reserve has already reached the legally required minimum.

135 Fiera Milano SpA Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Significant events after year-end On 16 January 2008, as part of the Group s process of internationalisation, Fiera Milano SpA and Deutsche Messe AG (owner of the Hannover exhibition site) began the first strategic alliance between these two leaders in Europe s exhibition industry. The joint venture envisages the development of exhibition activities for the two partners in four markets outside Europe, beginning with China. Fiera Milano has acquired a 49% stake in HM Global Germany GmbH ( HM Global ) from Deutsche Messe AG. HM Global operates in China with around 60 employees and through two companies, Hannover Fairs Shanghai Ltd (based in Shanghai) and Hannover Fairs China Ltd (based in Hong Kong), and two permanent offices in Guangzhou and Beijing. Fiera Milano s Shanghai office will now be a part of HM Global. The purchase price was set at 8.8 million up front and 2.6 million in five subsequent instalments based on the pre-tax profit expected by the industrial plan guaranteed by Deutsche Messe for the financial years ending 31 December Average pre-tax profit for HM Global for the period is expected to be 3.3 million on average annual revenues of 15 million. In the event that pre-tax profits should fail to reach this guaranteed minimum, the instalment for that year is to be reduced proportionately. On 14 January 2008, the Fiera Milano Group and the Reed Group signed an agreement authorising the early termination of the joint venture in Fiera Milano International SpA. The agreement was finalised upon the conclusion of the consultation procedure of the trade union representatives called for by Article 47 of Italian law no. 428 of 29 December The termination became effective on 15 January 2008, and Reed has paid Fiera Milano SpA a lump sum of 7.65 million. At the same time, Fiera Milano SpA acquired the 47% stake held by Reed in Fiera Milano International at the estimated carrying value as at 31 December 2007 of roughly 556 thousand. During the early part of 2008, the buy-back process continued, and the direct parent company purchased 291,450 treasury shares at an average price of 4.23, for a total of some 1,234 thousand. As of the date of this report, Fiera Milano SpA now holds, either directly or indirectly, a total of 725,393 treasury shares, which equals 2.14% of share capital. Future estimated business trend For the direct parent company, 2008 will see the implementation of two important initiatives from the industrial plan, which will lay the groundwork both for the strengthening of the Company s operations and for a lasting improvement of its financial performance. These initiatives are the acquisition of the trademarks company branch from the Fiera Milano Foundation, and the Macef trademark in particular, and the release of a portion of the downtown fieramilanocity site. These two initiatives will be launched during the year and will have their full effects beginning with the 2009 financial year. Furthermore, in January 2008, the income statement of the direct parent company already includes receipt of the 7.65 million payment from the Reed group for the early termination of the joint venture, as discussed earlier in this report.

136 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Board of Directors Management Report 135 The Company s management also remains committed to continuing efforts in 2008 to contain and optimise operating costs, efforts which already produced important results in Finally, Fiera Milano SpA is expected to see a significant improvement in gross operating margin in 2008, after essentially breaking even for the year under review. Other Information 1. Shareholdings owned by Members of Corporate Management and Control Bodies, by General Managers, and by Managers with Strategic Responsibilities As required by Article 79 of CONSOB Regulation no of 14 May 1999, as subsequently amended by Resolution no of 27 July 2006, the following table details shareholdings owned in Fiera Milano SpA and in its subsidiaries by members of the Board of Directors and Statutory Auditors Committee, by General Managers, and by Managers with Strategic Responsibilities, as well as by their spouses not legally separated and by their under-age children, either directly or via companies controlled, fiduciary companies, or other intermediaries as at 31 December 2007 as shown in the Shareholders Register, by notifications received, or by information directly acquired from the persons concerned. As can be seen in the table below, none of the parties specified above held shares in Fiera Milano SpA as at either 31 December 2006 or 31 December Full name Investee No. of No. of No. of No. of company shares held shares shares shares held purchased sold Directors Michele Perini Fiera Milano SpA Carlo Edoardo Valli Fiera Milano SpA Carlo Sangalli Fiera Milano SpA Claudio Artusi Fiera Milano SpA Renato Borghi Fiera Milano SpA Giovanni Deodato Fiera Milano SpA Francesco Milone Fiera Milano SpA Romeo Robiglio Fiera Milano SpA Fabrizio Viola Fiera Milano SpA Statutory Auditors Damiano Zazzeron Fiera Milano SpA Pier Andrea Chevallard Fiera Milano SpA Alfredo Mariotti Fiera Milano SpA General Manager Enrico Pazzali a Fiera Milano SpA Strategic Managers Fiera Milano SpA a In office as from 2 January 2007 It should also be noted that none of the persons indicated above owns shareholdings in companies controlled by Fiera Milano SpA.

137 Fiera Milano SpA Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Treasury shares At 31 December 2007, Fiera Milano SpA held 147,443 treasury shares, whereas it does not own shares in the ultimate parent entity. During the course of the financial year ended 31 December 2007, the Company acquired 138,550 treasury shares. At 31 December 2007, the subsidiaries holding shares in the parent company are as follows: Fiera Milano Tech: 64,000 shares; ExpoCTS: 222,500 shares. In both cases, Fiera Milano SpA s shares became parent company shares following Fiera Milano SpA s acquisition of a 51% equity interest in the two companies. Intel Srl and ExpoCTS SpA had subscribed the shares in their capacity as organisers of exhibitions held at the Milan exhibition site, as part of the tranche earmarked for this investor category at the time of the IPO. The shares, subscribed at the per-share placement price of 7.5, gave the right to receive one bonus share for each share subscribed after three years of continuous ownership, and then until 12 December 2005, and on condition that an exhibition space rental contract existed with Fiera Milano. The bonus shares are subject to new lock-up agreements, lasting three years. The shares held by Fiera Milano Tech were transferred by Intel Srl to the new company Fiera Milano Tech upon occasion of conferment of Intel s exhibition business branch. The value of these shares, defined by the expert appointed by the Milan Law Court to appraise the value of the business branch conferred inclusive of the right to receive 32,000 shares upon expiry of the 3-year period is 475,520. The shares held by ExpoCTS are carried at subscription price for a total of 834, Privacy and data protection As concerns the mandatory minimum security measures implemented by the Company, as controller of personal information in accordance with prevailing privacy and data protection legislation (e.g. Article 34 of Italian legislative decree 196/2008 and rule 26 of related Annex B), it should be noted that the Company has updated its security policy document (Documento Programmatico della Sicurezza, or DPS) for 2006 before 31 March Additional updates, to be completed by 31 March 2008 in accordance with the aforementioned legislation, are currently under way based on the gathering and handling of personal information during the period July-September 2007 by the various Fiera Milano offices indicated on the organisation chart in effect at the time and which is currently being revised (the final touches are expected to be made during the 2008 financial year).

138 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Board of Directors Management Report 137 Annual Report at 31 December 2007 of the Board of Directors on Corporate Governance In accordance with Article 124-bis of Italian Legislative Decree 58/1998, Article 89-bis of the CONSOB Rules for Issuers, and Article IA.2.6 of the Instructions to the Stock Market Rules, companies that issue shares on the stock market are required to provide yearly reports, in conjunction with the shareholders meeting to approve the annual financial statements, on their systems of corporate governance and on compliance with the Corporate Governance Code for Listed Companies (hereinafter the Code ) approved by the Corporate Governance Committee in March 2006 and promoted by Borsa Italiana SpA. This report also includes information on ownership structure as required by Article 123-bis of Italian Legislative Decree 58/1998, where applicable. The term Corporate Governance is used to identify the combination of rules and procedures that constitute the material form of joint-stock companies management and control systems. An effective and efficient corporate organisation model must be able to assure proper management of business risks and of the potential conflicts of interest that might arise between directors and shareholders and between majority and minority interests. These aspects are particularly important in listed companies featuring a wide shareholder base. As part of the initiatives designed to maximise shareholder value and assure transparency as regards management s operational activities, Fiera Milano has therefore defined a detailed and consistent system of rules of conduct. This concerns both its own organisational structure and relations with third parties, and in particular with shareholders, and is in line with domestic and international best practices. When preparing this report, we took account of the guidelines for preparing annual corporate governance reports published by Borsa Italiana SpA in February 2003, as well as the guide issued in February 2004 by Assonime and Emittenti Titoli SpA regarding the preparation of this report, the indications provided in Assonime circular no. 5 of 12 February 2007 regarding the main changes and impact on operations of the new Code of Corporate Governance, and the document issued by Borsa Italiana SpA in February 2008 concerning the experimental format for the report on corporate governance. Below, we provide information on Fiera Milano s corporate governance system. Information on ownership structure The company s share capital is comprised of 33,891,778 ordinary shares with a par value of 1.00 each, fully released and with voting rights in both ordinary and extraordinary shareholders meetings, with the exception of the treasury shares held either directly or indirectly. According to the shareholder register, supplemented by communications received pursuant to Article 120 of Italian Legislative Decree 58/1998 and other information to hand, shareholders who on 31 December 2007 own more than 2% of share capital, are as follows: Ente Autonomo Fiera Internazionale di Milano 52.82% Camera di Commercio Industria Artigianato e Agricoltura di Milano* 6.94% Fondazione Cassa di Risparmio delle Province Lombarde 3.30% Banca Popolare di Milano 2.52% *Through Parcam Srl

139 Fiera Milano SpA Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER With regard to the agreements pursuant to Article 122 of Italian Legislative Decree 58/1998, it should be noted that, in conjunction with the listing of the company s ordinary shares in the Star segment of the electronic share market, Mercato Telematico Azionario, managed by Borsa Italiana SpA, the Milan Chamber of Commerce, Industry, Craft Trade and Agriculture and 19 exhibition organisers purchased ordinary shares as part of the private placement, while signing lock-up agreements with the company and Ente Autonomo Fiera Internazionale di Milano, which expired on 12 December These lock-up agreements stated that, upon expiration, each Organiser would have had the right to receive, free of charge, 1 additional share for every share requested and allocated as part of the private placement that was not subsequently sold, subject to verification of observance of certain conditions specified in the lock-up agreements, including the signing of a new three-year lock-up agreement concerning solely these additional shares. Following the signing of these new lock-up agreements, a total of 650,250 shares, equal to 1.92% of Fiera Milano share capital, are bound by these agreements until 2 March The names of the exhibition Organisers and the percentages of the share capital represented by their additional shares held are as follows: - Cosmit SpA 0.48% - EXPO CTS SpA 0.33% - Promotor International SpA 0.25% - Mido S.r.l. 0.14% - A.N.C.I. Servizi S.r.l. 0.12% - Fiera Milano Tech SpA 0.09% - E.I.C.M.A. SpA 0.08% - EFIM SpA 0.07% - GE.FI. SpA Gestioni Fiere 0.07% - EME - Ente Mostre Enologiche 0.05% - IPACK - IMA SpA 0.05% - ACIMALL - Associazione Costruttori Macchine e Legno 0.04% - VITRUM S.r.l. 0.04% - PROMAPLAST S.r.l. 0.03% - Ente Fieristico MIFUR 0.03% - CENTREXPO SpA 0.03% - Salone Internazionale del Giocattolo S.r.l. 0.02% In their ordinary meeting of 27 October 2006, the shareholders authorised, in accordance with Articles 2357 et seq. of the Italian Civil Code, the Board of Directors to buy treasury shares in the company on one or multiple occasions within 18 months of said authorisation for a total nominal value of no greater than one-tenth of the company s share capital and at a purchase price that does not vary from the reference price recorded on the trading day prior to that of the purchase in either direction by more than 20%. The number of treasury shares held as at 31 December 2007 was 433,943 shares, equal to 1.28% of share capital. In their extraordinary meeting of 28 October 2005, the shareholders, in accordance with Article 2443 of the Italian Civil Code, authorised the Board of Directors to increase share capital up to 1 million by issuing ordinary shares to service the stock option plan. The shares are to be allocated without option rights and upon payment of the purchase price in accordance with Article 2441, paragraphs 5 and 8, of the

140 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Board of Directors Management Report 139 Italian Civil Code. In their meeting of 13 February 2006, the Board of Directors, in partial implementation of the above authorisation, approved an increase in share capital for up to 700,000 by issuing 700,000 ordinary shares with a par value of 1.00 each. For the content of the Fiera Milano SpA stock option plan, see the related disclosure document dated 14 September 2007, which was prepared in accordance with Article 84-bis of the CONSOB Rules for Issuers and is available on the issuer s web site in the section Investor Relations Corporate Governance. It should also be noted that an agreement has been signed by the company and its CEO, Mr Claudio Artusi, which calls for the payment of (i) a severance indemnity at the end of his term in the amount of 1/12 per annum of the total fees received over the course of his term until termination of his directorship and (ii) a termination incentive in the amount of 36 monthly salary payments for his executive employment relationship in the event that, at the end of his term, this executive employment relationship should be terminated due to failure to renew his position as CEO. As regards the majority interest owned by Ente Autonomo Fiera Internazionale di Milano (i.e. the Foundation), considering the evaluations made from which it emerges that the Foundation (a) does not play a determining role in definition of long-term strategic plans and of the annual budget or in investment decisions, (b) does not define policies for the purchase of goods and services in the market place, nor co-ordinate business initiatives and actions in the sectors in which the company and its subsidiaries are active and that the company is selfsufficient in organisational and decision-making terms it is believed that, as matters currently stand, the conditions do not exist to consider Fiera Milano SpA as being subject to direction and co-ordination, as defined by Article 2497 et seq. of the Italian Civil Code, by Ente Autonomo Fiera Internazionale di Milano. System of corporate governance Fiera Milano SpA is the leading Italian trade show operator and one of the leading players in the global market. The Fiera Milano group operates in the following areas of business: the management of exhibition space and the provision of basic exhibition services; the provision of additional value-added services; exhibition and congress organisation. Fiera Milano manages a portfolio of professional events that are unique in terms of their quality and variety. The company hosts some eighty events each year, approximately half of which are organised directly by the company, for more than 30,000 exhibitors and possesses exhibition facilities that are among the best to be found anywhere in the world. The company s management and control model is of the traditional type where the company s governance features the presence of: a Board of Directors responsible for managing the company; a Statutory Auditors Committee that oversees: (i) observance of the law and the company s by-laws, as well as the principles of proper administration in company operations; (ii) the appropriateness of the

141 Fiera Milano SpA Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER company s organisation, its system of internal controls, and system of accounting and administration, as well as the methods of implementing the rules of corporate governance defined in the code of conduct published by the company that manages the stock market; and (iii) the appropriateness of the instructions provided by the company to its subsidiaries concerning the distribution of information necessary to fulfil the disclosure obligations defined by law; a shareholders meeting, competent to decide on, among other things, in either ordinary or extraordinary sessions, (i) appointment and revocation of members of the Board of Directors and Statutory Auditors Committee and on their respective remuneration and responsibilities, (ii) approval of year-end financial accounts and allocation of earnings, (iii) purchase and disposal of treasury shares, (iv) amendments to the company by-laws, and (v) issue of convertible bonds. Board of Directors The Board of Directors plays a central role within the corporate organisation and heads the functions and responsibilities concerning strategic and organisational orientations, as well as verification of existence of the controls necessary to monitor company and group performance. Board composition and membership The company by-laws envisage that the company be managed by a Board of Directors consisting of a number of at least three and not more than nine members, including the chairman. The shareholders meeting determines the number of Board members, at the time of Board appointment, within the aforementioned limits, as well as duration, which cannot exceed three financial years. Directors can be re-elected. On account of the change in the year end-date resolved by the extraordinary meeting held on 10 January 2007, the term of office of the current Board of Directors will expire at the meeting called to approve the financial statements at 31 December 2008; it is composed of the following nine members: Michele Perini, born in Milan on 12 March 1952, chairman; Carlo Edoardo Valli, born in Renate Veduggio (MI) on 2 September 1936, senior vice president and independent director; Carlo Sangalli, born in Porlezza (CO) on 31 August 1937, vice president; Claudio Artusi, born in Potenza on 19 February 1951, CEO; Renato Borghi, born in Milan on 30 October 1948, independent director; Giovanni Deodato, born in Messina on 3 December 1933, independent director; Francesco Milone, born in Paternò (CT) on 6 July 1946, director; Romeo Robiglio, born in Montechiaro d Acqui (AL) on 20 January 1931, independent director; Fabrizio Viola, born in Rome on 19 January 1958, director. Francesco Milone was made a member of the Board of Directors at the ordinary meeting of shareholders of 26 June 2007 to replace outgoing board member Paolo Galassi. The other members of the board were appointed at the Ordinary Shareholders Meeting of 27 October The names of the appointed directors were presented on the list of the majority shareholder. Apart from the CEO, all the other directors are considered to be non-executive, since they do not have

142 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Board of Directors Management Report 141 operational mandates. For the responsibilities assigned to the Chairman, see the section Board role and functions below. As regards offices of director or statutory auditor held by directors in other companies listed on regulated Italian and/or foreign markets, and/or in financial, banking, or insurance companies or large companies, we highlight status as follows: Michele Perini is a member of the general board of Ente Autonomo Fiera Internazionale di Milano; Carlo Edoardo Valli is president of the Monza Chamber of Commerce, Industry, Craft Trade and Agriculture; Carlo Sangalli is chairman of ConfCommercio (the Italian General Confederation for Commerce, Tourism, Service, Professions, and SMEs), president of the Milan Chamber of Commerce, Industry, Craft Trade and Agriculture, president of Unione del Commercio del Turismo dei Servizi e delle Professioni of the province of Milan, and vice president of Fondazione Cariplo; Fabrizio Viola is general manager of Banca Popolare di Milano. The Code recommends that, within the Board of Directors, an adequate number of independent directors be elected. According to the Code s guidelines, directors of listed issuers not generally considered to be independent are those who: a) directly or indirectly, even through subsidiaries, trustees or through a third party, control the issuer or are able to exercise a dominant influence over it, or participate in a shareholders agreement through which one or more persons may exercise control or a considerable influence over the issuer; b) are, or have been in the last three financial years, relevant representatives (chairman, executive director, manager with strategic responsibilities) of the issuer, of one of its subsidiaries with strategic relevance or of a company under common control with the issuer, or of a company or entity which, also jointly with others through a shareholders agreement, controls the issuer or is able to exercise a considerable influence over it; c) directly or indirectly, have or have had in the last financial year a significant commercial, financial or professional relationship: with the issuer, one of its subsidiaries or any of its significant representatives; with a subject who, even jointly with others through a shareholders agreement, controls the issuer or, in the case of a company or an entity, with the relevant significant representatives; or are, or have been in the last three financial years, employees of one of the abovementioned subjects; d) receive or have received in the last three financial years, from the issuer or from a subsidiary or holding company of the issuer, a significant additional remuneration compared to the fixed remuneration of a nonexecutive director of the issuer, including participation in incentive plans linked to the company performance, on a share basis as well; e) have been a director of the issuer for more than nine years in the last twelve years; f) are vested with the executive director office in another company in which an executive director of the issuer holds the office of director; g) are shareholders or quotaholders or directors of a company or legal entity belonging to the same network as the company appointed for the accounting audit of the issuer; h) are close relatives of a person who is in any of the situations referred to in the previous points.

143 Fiera Milano SpA Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER The information supplied by the Code on requirements of independence of the directors has been fully applied to STAR issuers by the current version of the Rules of the Markets organised and managed by Borsa Italiana SpA. The criteria for assessing the relevance of the commercial, financial or professional relations defined in the Instructions accompanying the Rules for the purposes of the requirements of independence still apply (Article IA , paragraph 2). The company s present Board of Directors includes among its members four directors with the connotations of independence envisaged, in the persons of Carlo Edoardo Valli, Renato Borghi, Giovanni Deodato and Romeo Robiglio. The number of independent directors, considering the total number of Board members, is higher than the minimum number laid down by the provisions of the Instructions accompanying the Rules of the Markets for STAR issuers (Article IA , paragraph 1). The outcome of the independence assessments made by the Board of Directors was made known in a press release circulated to the market; the Statutory Auditors Committee, within the scope of the tasks assigned to it by law, checked the correct application of the assessment criteria and procedures adopted by the Board to assess the independence of its members. The Chairman of the Board of Directors and the President of the Statutory Auditors Committee have attested the existence of the aforementioned directors requisites of independence based on declarations specifically issued for this purpose according to the Rules of the Markets. Board role and functions The Board of Directors is vested with the widest possible powers for ordinary and extraordinary management of the Company. In particular, it has the power to accomplish all acts that it deems appropriate or useful for the achievement of corporate purposes, excluding only those acts that, by law, are the prerogative of the shareholders meeting. Besides attributions that, by law, cannot be delegated, the following matters, based on explicit by-law provisions, are the sole prerogative of the Board: (a) purchase, subscription, and transfer, taking direct responsibility for the same, of shares, quotas or interests in other companies, including newly constituted companies, and transfer of option rights, with the exception of transactions concerning mere investment of liquidity; (b) spin-off of property and movable assets to other companies, both those in the process of being constituted and those already constituted; (c) any form of loan taken out by the Company exceeding the limit of 30% of net equity; (d) constitution of mortgages, encumbrances or other guarantee rights of any type whatsoever on all or relevant parts of the Company s bonds, property or assets; (e) budget approval; (f) granting by the Company of banking sureties to third parties; (g) stipulation of contracts concerning property assets, with the sole exception of building rental contracts stipulated for performance of corporate business for periods not exceeding six years; (h) purchase, sale and stipulation of licenses concerning patents, trademarks, models, publications, copyrights and similar items, and all intellectual property rights in general, relating to the corporate purpose; (i) award of appointments, consulting assignments and other service assignments exceeding 100,000 not envisaged in the budget to parties in any case extraneous to the Board;. (j) appointment and revocation of the manager charged with preparing the company s financial reports.

144 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Board of Directors Management Report 143 In addition the Board of Directors is also attributed competence for the following matters: (l) merger decisions in the cases indicated in Articles 2505 and 2505/2 of the Italian Civil Code; (m)creation and closure of secondary locations; (n) reduction of share capital in the case of withdrawal by shareholders; (o) adaptation of company by-laws to regulatory provisions; (p) transfer of the Company s registered office within the Province. Based on the standards of conduct in force regarding operations with related parties, the following operations, identified as significant, are submitted for the preliminary assessment of the Board of Directors of Fiera Milano: 1) abnormal or unusual operations based on the meaning attributed by the CONSOB; 2) the operations indicated in points (a) to (i) above; 3) operations with related parties not concluded under standard conditions. All powers concerning ordinary company management are conferred upon the CEO, with the exception of matters that are the sole prerogative of the Board of Directors. On at least a quarterly basis the CEO provides the Board with adequate information on general operating performance and its future estimated trend, as well as on the most important transactions undertaken by the company and its subsidiaries. The Chairman directs shareholder meeting proceedings; ascertains proper constitution of such meetings; ascertains the identity and eligibility of those present; regulates meeting proceedings including governing the order and duration of spoken contributions, determination of the voting system and the counting of votes; and ascertains voting results. The Chairman has the tasks of supervising national and international institutional relations, corporate communication, coordinating strategies, internal auditing, checking the implementation of resolutions of the Board of Directors and assisting the CEO in group internationalisation activities. Directors report to the Statutory Auditors Committee in a timely manner, and in any case at least on a quarterly basis, on occasion of Board meetings via a written note on the most important transactions from the business, financial, and capital standpoint undertaken by the company and its subsidiaries, in order to enable the Statutory Auditors Committee of Fiera Milano SpA to assess whether the transactions decided upon and executed comply with the law and company by-laws and are not manifestly imprudent, rash or in contrast with shareholders resolutions, or such as to jeopardise the integrity of corporate assets. Specifically, directors report on transactions in which they have an interest, either on their own account or that of third parties, on abnormal or unusual transactions, or those with related parties. The items of information provided in this respect are the following: 1) the features characterising the transaction (strategic, operational, business/financial, legal, and tax-related; related risks, potential criticalities, and guarantees issued or received);

145 Fiera Milano SpA Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER ) nature of the relationship with the party; 3) the existence of any other interests, either on their own account or that of third parties, or of influence of the party, if applicable, that exercises the direction and coordination; 4) the company s interest in the transaction; 5) any abnormal and/or unusual features of the transaction; 6) the approach for determination of the transaction s economic terms. With regard to the provisions of the Code under point 1.C.3 concerning the orientation of the board in relation to the maximum number of positions on the boards of directors or of statutory auditors of corporations, banks, financial institutions, insurance companies, or other companies of significant size, it should be noted that the company s current by-laws do not specify a maximum number of positions for office of director. Although company by-laws do not envisage a minimum frequency for meetings, it is now normal practice for the Board of Directors to meet at least quarterly at the time of approval of the periodical financial statements. Board meetings are scheduled according to a calendar approved at the beginning of the year in order to aid maximum meeting attendance. The corporate events calendar can be consulted in the Investor Relations section of the company s website. During the financial year ended on 31 December 2007, the Board of Directors held 19 meetings, which featured the regular and assiduous attendance of directors (the total percentage of attendance was in fact 90%). Independent directors percentage of attendance was 91%. Directors and Statutory Auditors receive sufficiently in advance of Board meetings the documentation and information needed to enable them to express themselves in an informed manner on the topics submitted to them for analysis and approval. Board appointment and remuneration According to specific by-law provisions, appointment of members of the Board of Directors takes place on the basis of lists presented by shareholders who alone or together with other shareholders own shares with voting rights accounting for at least 2.5% of shares having voting rights at ordinary shareholders meeting, or for another amount fixed by CONSOB to implement current regulations. The lists must be lodged at the Company s registered office at least 15 days before the date established for the first call of the shareholders meeting and must by published by the company at least 10 days prior to that date in accordance with the procedures established by law. Together with each list, within the deadlines indicated above, the following must be lodged: (i) information related to the identities of the shareholders presenting the list and the shares held by such shareholders; (ii) statements in which individual candidates accept their candidacy and testify to the absence of causes of ineligibility and incompatibility, and to the presence of the requisites for taking office laid down by current regulations, including any indication of the prerequisites of independence as required of statutory auditors by prevailing legislation and by the Code; and (iii) each candidate s professional résumé, with an indication of the directorships and statutory auditing offices held. The company s by-laws state that at least one of the members of the Board of Directors, or at least two for boards comprised of more than seven members, must be independent as required of statutory auditors in accordance with prevailing legislation.

146 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Board of Directors Management Report 145 The by-laws also state that at least one director must be taken from the minority list that obtains the greatest number of votes and that is in no way connected, directly or indirectly, with the shareholders that presented, contributed to presenting, or voted for the list receiving the highest number of votes. The Board of Directors has decided, for the time being, not to constitute, from among its members, a specific committee for directors appointment proposals, since thus far it has not found a need for this. As regards remuneration, the Ordinary Shareholders Meeting of 27 October 2006 resolved to establish the directors fees as a fixed amount, without prejudice to the Board s competence to determine the special remuneration of directors holding particular positions, in accordance with Article 17.7 of the Company bylaws. Subsequently, having examined the proposals of the compensation committee, for which the Statutory Auditors Committee expressed a favourable assessment in accordance with Article 2389, paragraph 3 of the Italian Civil Code, the Board of Directors set the remuneration for the CEO and the other board members with particular responsibilities. The information concerning compensation of the members of the boards of directors and of statutory auditors, as well as of general managers and executives with responsibilities of strategic importance, as required by Annex 3C to the CONSOB Rules for Issuers, is included in the notes to the financial statements of the parent company. A significant portion of the remuneration for the CEO is tied to the financial performance of the issuer. Similarly, part of the Group managers remuneration is linked to a variable component via a stock option plan and an incentive mechanism based on the achievement of specific objectives (MBO Management By Objectives). A specific compensation committee has been set up within the Board of Directors. The Compensation Committee has the task of making recommendations to the Board, in the absence of the persons directly concerned if they are committee members, on remuneration of the CEO and of directors holding special positions, and also upon the CEO s indication on determination of criteria for remuneration of the company s top management, although the CEO remains responsible for defining top-management remuneration policies and levels. In carrying out its functions, the compensation committee has the power to access company information and offices as necessary, as well as to make use of outside consultants. At the meeting held on 30 October 2006, the Board of Directors appointed the non-executive vice president Carlo Sangalli and independent, non-executive directors Carlo Edoardo Valli, senior vice president, and Renato Borghi as members of the Compensation Committee. At the meeting of the Board of Directors of 10 August 2007, the composition of this committee was changed from three members to four, with the addition of the independent, non-executive director Giovanni Deodato, in order to take full advantage of all of the professional skill and experience of its members. The Committee members receive a fee for the activities performed.

147 Fiera Milano SpA Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Within its sphere of responsibility, the Compensation Committee also performs propositive functions in order to implement specific stock option plans in the company for top managers, taking these to be suitable means of incentive and retention to attract and motivate resources of the calibre and experience able to assure a constant drive over time to create value. During the year ended 31 December 2007, the committee held five regularly documented meetings in order to provide its advisory services to the Board of Directors and make recommendations concerning the variable incentives system of executives of the Fiera Milano Group, the determination of compensation payable to the directors and statutory auditors of subsidiaries, and the compensation payable to the manager charged with preparing the company s financial reports and other beneficiaries of the stock option plan. Internal control & audit system The internal control & audit system of the company and the group consists of the combination of rules, procedures and organisational structures designed to allow, through an adequate process of identifying, measuring, managing and monitoring the main risks, the operation of a healthy, lawful business consistent with the objectives fixed and contributes towards guaranteeing (i) the safeguarding of corporate assets, (ii) the effectiveness and efficiency of operations, (iii) the reliability of business and financial information, and (iv) legal compliance. Responsibility for the internal control system lies with the Board of Directors, which availing itself of the assistance of the Internal Control & Audit Committee establishes relevant guidelines and periodically verifies the system s adequacy and actual operation, assuring that the main corporate risks are appropriately identified and managed. The CEO has the task of implementing the guidelines devised by the Board of Directors via the design, management and monitoring of the internal control & audit system. The internal audit manager, identified as being the head of the internal audit function, is responsible for checking that the internal control & audit system is adequate, operational and functioning. He does not report on a hierarchical basis to the heads of operational areas but reports directly to the Chairman, in order to assure independence and autonomy. A functional reporting relationship with the Internal Control & Audit Committee is also envisaged. The manager has direct access to all useful information for conducting the audit and has adequate resources for the activities falling within his competence. The internal audit manager regularly reports on his/her work to the chairman, as well as, on a periodic basis, to the Internal Control & Audit Committee and Statutory Auditors Committee. Internal Control & Audit Committee Within the Board of Directors an Internal Control & Audit Committee has been set up, with consultative and propositive functions, composed of non-executive directors, most of whom are independent. The Internal Control & Audit Committee provides instructions for the Board of Directors in order to support it in the relative decisions and assessments of the internal control & audit system, approval of the financial statements and halfyearly reports, and relations with the independent auditor.

148 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Board of Directors Management Report 147 In particular, the tasks of the Internal Control & Audit Committee are as follows: - assistance to the Board of Directors in determining guidelines for the internal control & audit system, so that the main risks relating to the company and the group are properly identified, and adequately measured, managed and monitored, with a view to ensuring compatibility of these risks with a healthy and proper company management; - on the request of the Company CEO, expressing opinion on specific aspects relating to the identification of the main business risks and the planning, establishment and management of the internal control & audit system; - paying particular attention to ensuring that the internal control & audit system is actually independent from the operating areas and expressing its opinion on the criteria for the appointment of the internal audit manager and the relevant remuneration in accordance with company policies; - focusing attention in particular on (i) adequacy and effectiveness of the system of delegation and powers; (ii) prevention of conflicts of interest concerning company representatives; (iii) development of guidelines for the choice of outside consultants and professionals; (iv) support for the Board of Directors in defining the procedure for the approval and implementation of operations with related parties and in preparing measures aimed at guaranteeing the substantial and procedural correctness of such operations; (v) surveillance of information systems integrity and of application of internal procedures for the handling of confidential information and other internal codes of conduct; - evaluation of the work plan prepared by the internal audit manager and receipt of the latter s periodical reports; - making assessments, together with the manager charged with preparing the company s financial reports and with the auditing firm appointed, in general on the adequacy of the accounting standards used for the year-end financial statements and their uniformity in order to prepare the consolidated financial statements and in particular on (i) the significant accounting standards for providing a true and fair view of the economic, financial and asset situation of the company and the group; (ii) any problems relating to year-end financial statements of the group companies and the consolidated financial statements; (iii) the alternative accounting treatment laid down by the generally accepted accounting standards relating to significant aspects; - with regard to relations between the Company and the group, expressing its assessments of (i) the adequacy of the group s internal control (ii) the effective integration of the control systems of the group companies, particularly with regard to the definition of (a) control focusing on the group leader (b) activities to be delegated to subsidiaries and (c) operative planning, coordination and control mechanisms between central and peripheral control units; - assessing (a) the proposals made by the auditing firm to obtain trust in the relevant assignment; (b) the work plan drawn up for inspection; (c) the results stated in the report and any letter of suggestions, even relating to the independence of the relative opinions; (d) requests to make use of the company responsible for the audit or companies belonging to the auditor s network responsible for providing non-auditing services, provided they are admitted by law, giving their preliminary, reasoned opinion. The Committee also checks the efficacy of the auditing process; - reporting to the Board of Directors at least every six months, submitting a report on the activities conducted during the period, proposing the procedural and organisational changes proving advisable based on the information collected and assessments made; - performance of further tasks delegated by the Board of Directors.

149 Fiera Milano SpA Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Meetings of the Internal Control & Audit Committee are attended by the President of the Statutory Auditors Committee, or by a statutory auditor designated by the latter as representative. The Internal Control & Audit Committee performs its functions in co-ordination with the Statutory Auditors Committee and with the internal audit manager and reports on at least a six-monthly basis, presenting a report on the work done in the period to the Board of Directors when the latter meets to approve annual and half-year interim results. In carrying out its functions, the Internal Control & Audit Committee has the power to access company information and offices as necessary, as well as to make use of outside consultants. At the meeting on 30 October 2006, the Board of Directors appointed the members of the Internal Control & Audit Committee in the persons of Carlo Edoardo Valli, Renato Borghi and Romeo Robiglio, non-executive and independent directors, and Fabrizio Viola, non-executive director. On making the appointment, the Board of Directors gave a positive appraisal of the professional accounting and financial experience of the director Viola. Later, with a Board resolution passed on 30 November 2006, Giovanni Deodato, non-executive and independent director, took over from Renato Borghi. The Committee members receive a fee for the activities performed. During the year ended 31 December 2007, the Internal Audit & Control Committee held 13 regularly documented meetings. During the year, the activities of the Internal Audit & Control Committee particularly focused on the following: monitoring the adaptation of the company s governance to the Code; assessing the working plan prepared both by the internal audit manager, as well as the related periodic reports on auditing activities, and by the independent auditing firm in relation to the tasks assigned concerning the various companies of the group and related audit reports; monitoring the activities of the consultant appointed to the project to implement the obligations of Italian law 262/05; providing support to company management concerning the preparation of the guidelines for hiring consultants; assessing, together with the manager charged with preparing the company s financial reports and the auditors, the appropriateness of the accounting standards adopted and, in particular, the methods followed for impairment tests in accordance with IAS 36. The committee also provided advisory services to the Board of Directors concerning decisions related to the appointment of the manager charged with preparing the company s financial reports and related effects on the by-laws and the assignment of related functions, as well as to the selection of consultants hired to issue opinions on the appropriateness of the financial conditions of particularly significant transactions with related parties, and, upon request of the CEO, verification of the system of internal audits and controls for two subsidiaries. Procedures and Codes adopted by the Company Standards of conduct for transactions with Related Parties With regard to the indications contained in the Code on directors interests and transactions with related parties, and to incorporate the indications of the CONSOB on the matter, particularly the definition of related

150 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Board of Directors Management Report 149 party directly deduced from IAS 24, the Company has equipped itself with an updated procedure concerning standards of conduct for transactions with related parties. These standards are proposed in order to ensure that transactions with related parties conducted by the Company directly, or through subsidiaries, and transactions in which a director has an interest, on his own behalf or on that of third parties, are performed transparently and according to the criteria of material and procedural correctness. In particular, in order to govern different ways of providing information and making decisions, the standards distinguish between insignificant, significant and highly significant transactions, to provide information for the Statutory Auditors Committee as well, pursuant to Article 150 of Legislative Decree no. 58/1998. The body of the standards describes the measures which the Company and the Group have decided to adopt to ensure that any transactions with related parties are conducted according to the standards of procedural and material correctness. In terms of procedural correctness, it is envisaged that, in a given company transaction, directors who have, either directly or indirectly, an interest of any kind are to fully inform the other directors and the statutory auditors in a timely manner of the particular circumstances. In the event the situation concerns the CEO, the CEO is to abstain from voting on the resolution. As regards material correctness, it is envisaged that the Board of Directors in order to avoid a transaction with related parties being completed under different conditions from those that, realistically, would have been negotiated with unrelated parties can ask for the transaction to be completed with the assistance of one or more experts, who express an opinion on the transaction s economic terms, executive and technical approach, and legitimacy. The Internal Control & Audit Committee supports the Board of Directors in the choice of consultant via a suitable appraisal. The choice of experts to be used for this purpose must be of parties featuring recognised professionalism and skills (banks, auditing firms, legal firms, and further experts with specific technical skills), whose independence and absence of conflicts of interest vis-à-vis the transaction must be recognised. Procedure for management of inside information The company has adopted a Procedure for the internal management and disclosure of inside information which take account of applicable laws and regulations concerning market abuse and which also govern the Register of persons with access to inside information. Generally speaking, the procedure assigns responsibility to the company s CEO and to group companies managing directors for management of inside information relating to their respective spheres of responsibility. It contains specific sections covering the definition of inside information, related methods of management, and management of so-called market rumours and regulates cases of late market disclosure, the approval process for press releases, creation of the register of persons having access to inside information, parties authorised for external relations, and parties bound by an obligation of confidentiality.

151 Fiera Milano SpA Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER The company has also adopted a specific Procedure for keeping and updating the register of persons having access to inside information, in order to regulate methods and responsibilities for keeping and updating the register. The document identifies the person responsible for the register and the persons that should be registered and regulates the approach for initial registration and subsequent updates, as well as aspects concerning the confidentiality of information. Internal Dealing Code The company has adopted an Internal Dealing Code, which has been prepared in accordance with Article 152-sexies et seq. of CONSOB Regulation 11971/99 as amended and which takes account of laws and regulations concerning market abuse. Under the Code, a series of Relevant Parties, and persons closely associated with them, who have regular access to inside information and the power to take operating decisions that might affect the listed issuer s evolution and prospects, have the obligation of market disclosure of transactions undertaken in the listed financial instruments issued by the company. The Relevant Parties to which the Code is applicable are the directors, statutory auditors, general manager, and deputy general manager, as well as the ultimate parent entity, Ente Autonomo Fiera Internazionale di Milano, because it owns an equity interest of more than 10% in the company. The Code establishes thresholds and deadlines for market disclosure, plus related sanctions, in line with relevant CONSOB requirements. In accordance with information contained in the Rules of the Markets organised and managed by Borsa Italiana SpA, the current Internal Dealing Code has incorporated a black-out period of 15 days prior to the Board meeting called to approve the accounts for the period, during which the relevant persons (except for persons holding at least 10% of the Company capital) may not trade in financial instruments issued by the Company, with a few limited exceptions. Notifications filed according to the requirements of the Internal Dealing Code as per Article 152-octies, paragraph 7, of Italian Legislative Decree 58/1998 (the so-called filing models) can be found on the company s website, in the Investor Relations section -Corporate Governance. Organisation, Management & Control Model pursuant to Italian Legislative Decree 231/2001 The Company has equipped itself with an Organisation, Management & Control Model pursuant to Italian Legislative Decree 231/2001. The Organisation, Management & Control Model is intended to represent the set of operating rules and rules of conduct governing corporate business, as well as the further means of control with which the company has equipped itself in order to prevent perpetration of the various types of offences contemplated by the Decree. The Model supplements the organisational and control instruments already in place, i.e. the organisation chart, the system of delegation of powers and powers of attorney, and service ordinances. More specifically, the objective of the Model is to: - instil, in all those acting in the name and on behalf of the Company in areas where there is a risk of offences being committed, and in areas functional for the perpetration of offences, awareness of the fact that, if the

152 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Board of Directors Management Report 151 rules indicated in the Model are broken, they risk committing an offence for which not only they, but also the company, risk criminal and administrative sanctions; - reiterate that such forms of illegal conduct are severely condemned by the Company (even in cases when the company might apparently be able to benefit from them) because they are contrary not only to legal requirements but also to the standards of business ethics that the Company intends to meet in accomplishing its corporate mission; - enable the company, thanks to constant monitoring of the areas at risk in terms of offences and of areas functional for perpetration of offences, to intervene fast to prevent or counter perpetration of such offences. The Company s Model is structured in two sections. The first section is of a general nature and is designed to illustrate the Model s function and principles, together with the contents of Italian Legislative Decree 231/2001. The second is instead the fulcrum of the Model and details its contents, i.e. from adoption of the Model to identification of activities at risk, definition of protocols, characteristics and operation of the Supervisory Board, training and information, and the system of sanctions. The Model is completed with attachments forming an integral part of the Model and containing control protocols covering risk profiles, the Supervisory Board s operating regulation, and the Code of Business Ethics. In order to oversee operation, effectiveness and observance of the Model, as well as to look after its updating, the Board of Directors has appointed a collective body to perform Supervisory Board functions, with the tasks described above. The Supervisory Board is composed of the chairman, Michele Perini, independent, non-executive directors Renato Borghi and Romeo Robiglio, non-executive director Francesco Milone, the internal audit manager, and external consultant Gian Paolo Del Sasso. Following the resolution of the Board of Directors of 10 August 2007, director Francesco Milone replaced Giovanni Deodato as a member of the Supervisory Board, in order to take full advantage of all of the professional skill and experience of its members. The directors belonging to the Supervisory Board and the outside member receive remuneration for their work, as per the Board of Directors resolution. In implementation of the requirements of Article 6, paragraph 2, of Italian Legislative Decree 231/2001, the Model envisages specific flows of information to the Supervisory Board to put it in the best possible conditions to oversee operation and observance of the Model. As regards the group s other, unlisted companies, which have adopted their own organisation models, a Supervisory Board has been identified for each of them, seeking the technical/operational solution that although respecting the mandate and powers reserved for the Supervisory Board by regulations is best suited to the size and organisational status of each company concerned.

153 Fiera Milano SpA Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Investor relations The company has adopted a communication policy designed to create a constant dialogue with all shareholders, and in particular with institutional investors, assuring systematic disclosure of exhaustive and timely information on company business, and in any case observing the rules concerning inside information. As such, an Investor Relations Manager, who reports to the deputy general manager for administration, finance and control, has been appointed within the company organisation. The approach followed for financial communication consists of systematic contacts with financial analysts, institutional investors and the specialised press so as to assure full and correct perception of the evolution of strategic guidelines, their implementation, and of their impact on business results. In addition, it has been deemed appropriate to further foster the dialogue with investors, so that they are aware of their rights throughout the financial year, via suitable organisation of contents on the company s website ( Here it is possible to find both business and financial information (annual, half-year and quarterly reports and presentations to the financial community) and up-to-date data and documents of interest to all shareholders (press releases, corporate calendar, membership of corporate bodies, company by-laws, shareholder meeting minutes, general group structure, our code of business ethics, and our internal dealing code plus filing models, etc.). Shareholders meetings The shareholders meeting is the body that, with its resolutions, expresses shareholders intent. Resolutions passed in compliance with law and Company by-laws bind all shareholders, even if they are absent or dissent, saving for the latter the right of withdrawal in the cases when this is allowed. The shareholders meeting is convened and passes resolutions, as per the legal and regulatory provisions made for listed companies, on the matters that the law reserves as being its prerogative. The company has not adopted a shareholders meeting regulation, since it believes that the powers statutorily attributed to the chairman of the shareholders meeting, who is responsible for directing meeting proceedings, including determination of the voting order and system, put him in a position to maintain orderly proceedings at shareholders meetings, whilst also avoiding the possible risks and difficulties arising from any failure by the shareholders meeting to observe such a regulation s requirements. For the purpose of participating in shareholders meetings, the by-laws state that shareholders for whom the company has received the communication envisaged by Article 2370, paragraph 2 of the Italian Civil Code, within the term of two working days prior to the date of the individual shareholders meeting and who, on the meeting date, possess appropriate certification, are legitimated to take part in the shareholders meeting.

154 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Board of Directors Management Report 153 Independent auditor Auditing and control of accounts is assigned to PricewaterhouseCoopers SpA, a firm registered in the special register kept by CONSOB, as per the combined requirements of Article 2409-bis of the Italian Civil Code and Article 155 et seq. of Italian Legislative Decree 58/1998. The assignment was conferred by the Shareholders Meeting of 28 October It was reorganised by the Shareholders Meeting of 10 January 2007 following the change in financial year-end date. It was extended for a further six financial years by the Shareholders Meeting of 27 April It refers to the financial year ended on 30 June 2006 and to the financial years ending on 31 December Manager charged with preparing the Company s financial reports On 26 June 2007, the company s Board of Directors, upon approval of the Statutory Auditors Committee, appointed the Bruno Boffo, the company s deputy general manager for administration, finance and control, to be the manager charged with preparing the company s financial reports, providing him with the appropriate powers and means to perform his duties as defined by law. The Board of Directors also oversees the actual observance of administrative and accounting procedures. The current version of the company s by-laws, as modified by the shareholders in their extraordinary meeting of 26 June 2007, state that the person filling this role must be experienced in administration, finance and control and must meet the requirements of reputability established for statutory auditors in accordance with prevailing legislation. The term of office of this manager shall be three financial years and, in any event, no longer than the term of office of the Board of Directors making the related appointment. Therefore, the term in office of the manager charged with preparing the company s financial reports is in line with that of the current Board of Directors, which expires upon approval of the financial statements for the year ending 31 December Statutory Auditors Committee In accordance with Article 149 of Italian Legislative Decree 58/1998, the Statutory Auditors Committee oversees the following: (i) observance of the law and the company s by-laws, as well as the principles of proper administration; (ii) the appropriateness of the company s organisation, its system of internal controls, and system of accounting and administration, as well as the reliability of the accounting system in properly representing operations; (iii) the methods of implementing the rules of corporate governance defined in the codes of conduct published by companies that manage regulated markets; and (iii) the appropriateness of the instructions provided by the company to its subsidiaries in accordance with Article 114, paragraph 2 of Italian Legislative Decree 58/1998. As provided by the Code, the Statutory Auditors Committee also checks the independence of the auditing firm, checking both observance of the regulatory provisions on the subject and the nature and scope of the nonauditing services provided for the company and its subsidiaries by the auditing firm and by bodies belonging to the same network. Furthermore, in conducting its activities, the Statutory Auditors Committee has coordinated with internal auditing & control and the Internal Audit & Control Committee concerning topics of common interest through meetings and other exchanges of information.

155 Fiera Milano SpA Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Owing to the change of the company year-end date resolved by the extraordinary meeting on 10 January 2007, the term of office of the Statutory Auditors Committee will expire with the meeting called to approve the financial statements at 31 December 2008; it is composed of the following members, elected during the ordinary meeting on 27 October 2006: Damiano Zazzeron, born in Fagnano Olona (VA) on 5 September 1962, President; Pier Andrea Chevallard, born in Turin on 24 May 1951, Statutory Auditor; Alfredo Mariotti, in Gerenzano (VA) on 12 March 1946, Statutory Auditor. Pietro Pensato and Francesco Arancio have also been appointed Substitute Statutory Auditors. All the candidates satisfy the requirements of professionalism and honour laid down by the current legislative provisions and the requirements of independence laid down for directors of the Code, as verified by the Committee following the appointment. The by-laws currently state that the appointment of statutory auditors is to be done based on lists presented by the shareholders and that the chairman of the committee is to be the first candidate on the list that receives the second highest number of votes and that is not connected, directly or indirectly, with the shareholders who presented, contributed to presenting, or voted for the list that received the highest number of votes. Shareholders who, alone or together with other shareholders, represent at least 2.5% of shares having voting rights at the ordinary shareholders meeting (or other measure established by CONSOB) have the right to submit a list in accordance with prevailing legislation. Shareholders who intend to present a list of candidates and who do not possess a controlling stake or relative majority in the company s share capital must lodge a certificate attesting to the absence of a relationship with the shareholder(s) in question, as defined by applicable regulations. The lists must be lodged at the Company s registered office at least 15 days before the date established for the first call of the shareholders meeting and must be published by the company at least 10 days prior to that date. Together with each list, within the deadlines indicated above, statements must be lodged in which the individual candidates accept their candidacy and testify to the absence of causes of ineligibility and incompatibility, including as concerns the limitation in number of positions held as discussed below, and to the presence of the requisites for taking office laid down by current regulations, plus each candidate s professional résumé, with an indication of the directorships and statutory auditing offices held. The current Committee represents the majority shareholder since, during the meeting on 27 October 2006, resolving on the renewal of the company officers, no minority list submitted any candidates. The company by-laws also envisage that, besides those in the situations of incompatibility envisaged by current regulations, persons who are already standing statutory auditors in five companies issuing stock listed in regulated markets cannot take office as statutory auditors and that, if elected, they lapse from office, without prejudice to any other limits that may be established by law at a future date. During the course of the financial year at 31 December 2007, the Statutory Auditors Committee met 11 times. The auditors in office do not hold any positions of director or auditor in other companies listed on regulated markets, even abroad.

156 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Board of Directors Management Report 155 Appendix In the following pages we present three tables summarising the way in which the Company applies the main aspects of corporate governance envisaged by the Corporate Governance Code. The first table summarises the structure of the Board of Directors and of internal committees. It highlights directors and the category to which they belong (executive, non-executive, and independent). The various committees membership is also indicated. The second table summarises the characteristics of the Statutory Auditors Committee. It indicates members standing and substitute of the committee and also whether they have been designated by minority lists. Both these tables include specific boxes indicating the number of meetings of the Board of Directors, of the internal committees, and of the Statutory Auditors Committee, together with individual members percentages of meeting attendance. A specific box is also envisaged for the number of major offices held in other companies; these are detailed in the main body of this report. The last table summarises in question & answer form some Code requirements relating to the system for delegation of powers and related-party transactions, the appointments procedure, shareholders meetings, internal audit, and investor relations.

157 Fiera Milano SpA Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER STRUCTURE OF BOARD OF DIRECTORS AND COMMITTEES Office Execu- Non- Indepen- Number Internal Compen- Members tive executive dent of other Control & sation offices Audit Committee Committee *** * ** *** ** *** Chairman Michele Perini X 100% 1 Chief Executive Officer Claudio Artusi X 100% Senior Vice President Carlo E. Valli X X 100% 1 X 100% X 100% Vice President Carlo Sangalli X 95% 4 X 100% Director Francesco Milone X 82% Director Paolo Galassi X 100% Director Giovanni Deodato^ X X 100% X 100% X 100% Director Renato Borghi X X 89% X 100% Director Fabrizio Viola X 58% 1 X 85% Director Romeo Robiglio X X 74% X 62% Board of Internal Control & Compensation Directors Audit Committee Committee Number of meetings held during the financial year as at 31 December NOTE * This column shows the number of directorships or statutory auditor appointments held by the person concerned in other companies listed in Italian or foreign regulated markets, in financial/banking/insurance companies, or in companies of major size. ** In this column an "X" indicates a Board member's membership of a given committee. *** This column indicates directors' percent attendance respectively of Board of Directors and Committee meetings. ^ Member of the Compensation Committee since 10 August 2007 In office up to 8 May 2007 In office since 25 May 2007 STATUTORY AUDITORS COMMITTEE Office Members % Attendance of meetings of Statutory Auditors' Committee Chairman Damiano Zazzeron 100% Statutory Auditor Pier Andrea Chevallard 100% Statutory Auditor Alfredo Mariotti 100% Substitute Statutory Auditor Francesco Arancio N/A Substitute Statutory Auditor Pietro Pensato N/A Number of meetings held during the financial year as at 31 December 2007: 11

158 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Board of Directors Management Report 157 OTHER PROVISIONS OF THE CORPORATE GOVERNANCE CODE YES NO Summary of reasons for any departures from Code recommendations Power delegations and related-party transaction system Has the BoD delegated powers defining their: a) limits? X b) method of exercise? X c) frequency of reporting? X Has the BoD reserved as its prerogative the review and approval of transactions particularly important in business, capital and financial terms (including related-party transactions)? X Has the BoD defined guidelines and criteria for identification of significant transactions? X Are the above guidelines and criteria described in the report? X Does the BoD have appropriate procedures for the examination and approval of transactions with associated parties? X Are the procedures for approval of transactions with associated parties described in the report? X Procedures for most recent appointment of Directors and Statutory Auditors Were candidacies for directorship lodged at least 10 days beforehand? Were candidacies for directorship accompanied by exhaustive information? Were candidacies for directorship accompanied by an indication of eligibility for classification as Independent directors? Were candidacies for the office of Statutory Auditor lodged at least 10 days beforehand? Were candidacies for the office of Statutory Auditor accompanied by exhaustive information? X X X X X Shareholders' Meetings Has the company approved a regulation for Shareholders Meetings? X The company has not adopted rules for shareholders' meetings given that it believes that the powers granted by the company's by-laws to the chairman for the meetings, who is responsible for directing the work of the shareholders, including the determination of voting order and procedures, enable the chairman to maintain order in shareholders' meetings, thereby avoiding the risks and inconveniences that could arise from any failure by shareholders to observe such rules. Is the regulation attached to the report (or is it indicated where it can be obtained/downloaded)? N/A Internal control Has the company appointed internal controllers? Are the internal controllers free of hierarchical relationships with the heads of operating areas? Organisational unit responsible for internal control (as per art. 8.C.1. of the Code) Investor Relations Has the company appointed an Investor Relations Manager? Organisational unit and contact details (address/telephone/fax/ ) of Investor Relations Manager X X Internal Control X Investor Relations: Gianna La Rana, Investor Relations Manager Camilla Cusi, Assistant Investor Relations Investor Relations Office Fiera Milano SpA Strada Statale del Sempione, Rho (Milan) Tel: Fax: investor.relations@fieramilano.it

159 Fiera Milano SpA Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Proposals for the Ordinary Shareholders Meeting Ordinary Shareholders Meeting of Fiera Milano SpA, summoned to be held in Rho (Milan) at the Auditorium of the Centro Servizi (Service Centre) at the new Exhibition Centre, Strada Statale del Sempione 28, (reserved parking space available with entry from Porta Sud - the South Gate) at 3 p.m. on 28 April 2008 on first call and, if a second call is necessary, on 29 April 2008 at the same time and place. (Report as per Article 3 of Italian Justice Ministry Decree no. 437, 5 November 1998) 1. Year-end financial statements as at 31 December 2007, Board of Directors Management Report, and Report of Statutory Auditors Committee. Relevant and consequent resolutions. Shareholders, the year-end Financial Statements as at 31 December 2007, which we submit for your approval, show a net loss of 20,797,319.51, which we propose to cover as indicated below. In addition, we also submit to your attention the Group s consolidated Financial Statements for the financial year ending on 31 December Even though these are not subject to approval by the Shareholders Meeting, they constitute supplementary information provided together with the individual year-end financial statements of Fiera Milano SpA. Given all this, we submit for your approval the following proposed resolution The Shareholders Meeting of Fiera Milano SpA, having taken due note of the Board of Directors Management Report, of the Report of the Statutory Auditors Committee, and of the Independent Auditor s Report, and having reviewed year-end financial statements as at 31 December 2007, resolves to approve the year-end Financial Statements as at 31 December 2007, consisting of the Financial Statements and Explanatory notes, which show a net loss of 20,797, as presented by the Board of Directors as a whole and in the individual items posted and with the provisions proposed, together with the Board of Directors Management Report; to cover the net loss for the financial year of 20,797, by using the same amount from the Share premium reserve.

160 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Board of Directors Management Report Authorisation for the purchase and disposal of treasury shares (Report as per Article 73 and Annex 3 of CONSOB Resolution 11971/99 and subsequent amendments and additions) Shareholders, In their meeting of 27 October 2006, the shareholders authorised the Company to purchase treasury shares for a period of 18 months from the date of the related resolution, as well as to dispose of the treasury shares purchased, in whole or in part, without time limitations and even before completing all of the purchases. Following this resolution and throughout the eighteen-month period as mentioned in the specific section of the Management Report the Company purchased 430,516 treasury shares and sold 516. As a result, the Company now holds a total of 438,893 treasury shares, equal to 1.29% of share capital. In addition, the two subsidiaries Fiera Milano Tech SpA and ExpoCTS SpA hold 64,000 and 222,500 shares, respectively, in Fiera Milano SpA, which totals 0.844% of the Company s share capital. Together with the 438,893 treasury shares held by the parent company directly, the total number of treasury shares held equals 2.14% of share capital. Given that the period of validity of the aforementioned authorisation will expire on 27 April 2008, we feel we should recommend renewing authorisation to purchase and dispose of treasury shares in accordance with Article 2357 et seq. of the Italian Civil Code. Purchases of the Company s treasury shares is to take place in accordance with the provisions of applicable laws and regulations for publicly listed companies, including Directive 2003/6/EC of 28 January 2003 and related national and European Community laws implementing said directive. Below we indicate the reasons for and approach to the purchase and dispose of treasury shares for which we request your authorisation. a) Reasons for which authorisation is requested to purchase and dispose of treasury shares Authorisation is requested because it is the opinion of the Board of Directors that the purchase of treasury shares can offer interesting investment opportunities and may help to improve the Company s financial structure. In addition, it may facilitate agreements that entail equity swaps and may be a useful means of reducing share capital. Authorisation is also requested in order to stabilise the stock s prices in relation to contingent market situations, in accordance with prevailing laws and regulations, thereby improving the stock s liquidity. Authorisation is further requested in order to have treasury shares for use in any stock option plans that should be implemented, in accordance with prevailing legislation, or to service any issues of bonds that are convertible into the Company s shares.

161 Fiera Milano SpA Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER We also recommend that the shareholders authorise the Board of Directors to dispose of any shares that should be purchased, as well as the shares already held, as this possibility would be an important means of providing operational and strategic flexibility. b) Maximum number and nominal value of shares to which the authorisation refers; observance of Article 2357, paragraph 3 of the Italian Civil Code The purchase for which we request authorisation refers to the Company s ordinary shares, the maximum number of which, given the limits defined by Article 2357, paragraph 3 of the Italian Civil Code, may not have a total nominal value, including shares already held by the Company and its subsidiaries as of today s date, that exceeds one-tenth of share capital. The subsidiaries shall be instructed as to the timely communication of any purchases of Fiera Milano shares in order to ensure compliance with this threshold of 10% of the Company s share capital. The amount paid or received for the purchase or disposal of treasury shares is to be recorded directly to equity based on International Accounting Standard (IAS) 32, and, in any event, such transactions are to be recorded in accordance with prevailing laws and regulations at the time of the transaction itself. c) Duration of authorisation Authorisation for purchase is requested for a period of 18 months as from the date when the shareholders pass the relevant resolution, whilst authorisation for their disposal is requested for an indefinite period of time. d) Payments for the purchase and disposal of shares Without prejudice to point (E) below, shares may be purchased at a price that may not vary by more than 20% in either direction from the reference price for Fiera Milano s stock on the electronic share market (Mercato Telematico Azionario) managed by Borsa Italiana SpA on the trading day prior to each individual purchase. The shares may be sold, even prior to completing all of the purchases, in one or multiple transactions, at a price that is no less than the lowest purchase price. Said price limitation will not, however, be applicable if the sale of shares is made to employees of the Foundation Ente Autonomo Fiera Internazionale di Milano or of Fiera Milano SpA and its subsidiaries, or to members of the Boards of Directors of Fiera Milano SpA and of its subsidiaries, as part of stock option plans for the motivation of employees and/or directors. e) Approaches via which purchases can be undertaken Treasury shares may be purchased on one or more occasions in accordance with applicable laws and regulations and so as to ensure the fair treatment of shareholders as defined by Article 132 of Italian Legislative Decree 58/1998 solely in the following ways: i. public tender for the purchase or exchange of shares; ii. on markets regulated as established by rules for organising and managing stock markets that do not allow the direct matching of bids to purchase with predetermined offers to sell;

162 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Board of Directors Management Report 161 iii. buying and selling derivative instruments traded on regulated markets that call for the physical delivery of the underlying shares, on the condition that the rules of market organisation and management call for procedures that comply with those specified by Article 144-bis, paragraph 1, letter c of the rules established by CONSOB resolution 11971/1999. Sales may take place on one or more occasions, even before all purchases have been made, by selling shares on regulated or unregulated markets, off-market, through public tender, or as payment for the acquisition of shareholdings or as allocations to shareholders. Given all this, we submit for your approval the following proposed resolution The Shareholders Meeting of Fiera Milano SpA of 28 April 2008, having taken due note of the proposal made by the Board of Directors, taking into account the provisions of Articles 2357 and 2357-ter of the Italian Civil Code, resolves 1) to authorise, pursuant to and by virtue of Article 2357 of the Italian Civil Code, the purchase of the Company s own shares, for the quantity, at the price, within the terms and with the approaches indicated below: the purchase can be executed on one or more occasions within 18 months after the date of the present resolution; the purchase price may not vary by more than 20% in either direction from the reference price for Fiera Milano s stock on electronic share market (Mercato Telematico Azionario) managed by Borsa Italiana SpA on the trading day prior to each individual purchase; the maximum number of shares purchased cannot have a total nominal value, including any shares owned by subsidiaries, exceeding one tenth of share capital; treasury shares may be purchased on one or more occasions in accordance with applicable laws and regulations and so as to ensure the fair treatment of shareholders as defined by Article 132 of Italian Legislative Decree 58/1998 solely in the following ways: i. public tender for the purchase or exchange of shares; ii. on markets regulated as established by rules for organising and managing stock markets that do not allow the direct matching of bids to purchase with predetermined offers to sell; iii. buying and selling derivative instruments traded on regulated markets that call for the physical delivery of the underlying shares, on the condition that the rules of market organisation and management call for procedures that comply with those specified by Article 144-bis, paragraph 1, letter c of the rules established by CONSOB resolution 11971/ ) to authorise the Board of Directors, in accordance with Article 2357-ter, paragraph 1 of the Italian Civil Code, to dispose of treasury shares purchased, in whole or in part and without time limitations, including before completing the purchase of all shares. Sales of shares may take place on one or more occasions,

163 Fiera Milano SpA Board of Directors Management Report FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER even before all purchases have been made, by selling shares on regulated or unregulated markets, offmarket, through public tender, or as payment for the acquisition of shareholdings or as allocations to shareholders. The sales price may not be less than the lowest purchase price. Said price limitation will not, however, be applicable if the sale of shares is made to employees of the Foundation Ente Autonomo Fiera Internazionale di Milano or of Fiera Milano SpA and its subsidiaries, or to members of the Boards of Directors of Fiera Milano SpA and of its subsidiaries, as part of stock option plans adopted as per legally envisaged approches; 3) to grant the Board of Directors and, on the board s behalf, its Chairman and CEO in office, on a disjoined basis, all powers necessary to complete the purchases and disposals and, in any case, to implement the resolutions above, including by means of power of attorney, complying with any requirements advanced by the competent authorities. Rho (Milan), 26 March 2008 On behalf of the Board of Directors Chairman Michele Perini

164

165

166 S TAT U TO R Y F I N A N C I A L S TAT E M E N T S O F T H E D I R E C T PA R E N T C O M PA N Y F I E R A M I L A N O S PA AT 3 1 D E C E M B E R Statutory Financial statements Explanatory and supplementary notes to the statutory financial statements Attachments: 1. List of equity investments in subsidiary companies for the financial year as at 31 December Summary of key figures of last financial statements of consolidated subsidiary and associated companies (Article 2429 of Italian Civil Code)

167 Fiera Milano SpA Statutory financial statements FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER BALANCE SHEET - FIERA MILANO S.P.A. 31/12/07 31/12/06 ( ) notes ASSETS Non-current assets 1-42 Property, plant, and equipment 26,576,913 28,366,469 Property, plant, and equipment - leased - - Investment property Goodwill and other intangible assets of an indefinite life 29,840,931 29,840, Other intangible assets 8,831,603 10,092,274 4 Investments 76,126,036 70,999,093 5 Other financial assets 6,625,000 6,825, of which vis-à-vis related parties 6,625,000 6,825,000 6 Trade and other receivables 12,619,472 12,619, of which vis-à-vis related parties 12,618,500 12,618,500 7 Deferred tax assets 11,196,317 12,850,221 Total 171,816, ,593,485 Current assets 8 Trade and other receivables 30,327,721 34,114, of which vis-à-vis related parties 11,999,223 16,825, Inventories 1,685,176 1,135,171 Assets under construction for customers Current financial assets 47,600,905 66,325, of which vis-à-vis related parties 3,200,652 5,082, Cash and cash equivalents 5,689,373 8,380,926 Total 85,303, ,955,697 Assets held for sale 12 Assets held for sale - 3,825,000 Total - 3,825,000 Total assets 257,119, ,374,182 EQUITY AND LIABILITIES 13 Share capital and reserves Share capital 33,744,335 33,882,885 Share premium reserve 46,318,579 68,911,829 Revaluation reserve - - Other reserves 8,819,110 8,781,815 Retained earnings/(losses) 7,656,896 7,658,326 Profit/(loss) for period -20,797,320-21,980,292 Total 75,741,600 97,254,563 Non-current liabilities Bonds outstanding Bank borrowings 4,709,072 7,746,717 Other financial liabilities Provisions for risks and charges 5,846,447 1,789, Employee benefit provisions 5,976,299 8,096, Deferred tax liabilities 8,069,353 6,314, Other non-current liabilities - 1,766,571 Total 24,601,171 25,712,782 Current liabilities Bonds outstanding Bank borrowings 64,062,566 70,990, Trade payables 26,217,475 24,820, Down payments received 38,185,912 31,808, of which vis-à-vis related parties 22,972,164 21,979, Other financial liabilities - 6,032, of which vis-à-vis related parties - 5,868, Current provisions for risks and charges 2,423,781 4,695, Current tax liabilities 2,654,565 1,323, Other current liabilities 23,232,377 22,736, of which vis-à-vis related parties 6,502,196 12,709,196 Total 156,776, ,406,837 Liabilities held for sale Liabilities held for sale - - Total Liabilities 257,119, ,374,182

168 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Statutory financial statements 167 INCOME STATEMENT - FIERA MILANO S.P.A. 31/12/07 31/12/06 ( ) (6 months) notes 26 Revenues from sales and services 170,677,336 60,649, of which vis-à-vis related parties 70,865,413 21,548,053 Total revenues 170,677,336 60,649, Costs of materials 471, , Costs for services 86,211,635 37,906, of which vis-à-vis related parties 17,027,426 9,554, Costs for use of 3rd-party assets 58,000,153 27,160, of which vis-à-vis related parties 54,673,091 26,523, Payroll & employee benefit costs 30,488,652 14,530, Other operating expenses 4,067,734 2,067,940 Total operating costs 179,239,268 81,908, Other revenues 8,141,872 2,738, of which vis-à-vis related parties 6,442,674 1,684,201 Gross Operating Margin (GOM) -420,060-18,520, Depreciation of property, plant, and equipment 6,261,703 2,989,534 Depreciation of investment property Amortisation of intangible assets 3,160,014 1,343, Adjustments to asset value 412, Allowance for doubtful accounts and other provisions 2,412, ,287 Net Operating Margin (NOM) -12,667,122-23,493, Finance income 4,366,760 10,909, of which vis-à-vis related parties 1,031,262 9,719, Finance expense 3,726,636 1,256, Valuation of financial assets -6,717,000-14,868,905 Profit/(loss) of equity-accounted companies - - Gain (loss) on asset disposal/discharge of liabilities due to discontinuation of operations - - Profit/(loss) before income tax -18,743,998-28,709, Income tax 2,053,322-6,729,430 Profit/(loss) for period -20,797,320-21,980, Earning (loss) per share ( ) Base Diluted

169 Fiera Milano SpA Statutory financial statements FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER CASH FLOW STATEMENT - FIERA MILANO S.P.A. 31/12/07 31/12/06 ( ) Initial net cash & cash equivalents 8,380,926 3,834,214 Cash flow from operating activities Adjustments for non-cash items: Net profit (loss) for period (20,797,320) (21,980,292) Depreciation & amortisation 9,421,717 4,333,126 Other provisions and write-downs 9,542,345 15,508,192 Net change in provision for post-employment benefits (2,119,714) 35,931 Change in deferred taxes 2,736,223 (6,729,430) Operating profit before changes in Net Working Capital (1,216,749) (8,832,473) Cash flow from investing activities Sources/uses originating from change in Net Working Capital 15,347,904 30,492,422 inventories and work in progress (550,005) (608,076) trade and other receivables 3,543,472 (4,282,102) of which vis-à-vis related parties 4,825,853 (6,980,163) trade payables and down payments received 7,774,688 (1,707,649) of which vis-à-vis related parties 992,622 12,566,113 tax liabilities 1,331,195 (242,040) current provisions for risks and charges (3,011,801) - other current liabilities 496,037 (8,348,856) of which vis-à-vis related parties (6,207,000) (4,683,919) current financial assets/liabilities 5,764,318 45,681,145 of which vis-à-vis related parties (3,987,349) 229,397 Total 14,131,155 21,659,949 Investments in non-current assets: Tangible (3,927,225) (6,719,443) Intangible (1,899,343) (1,809,652) Other non-current assets (12,343,944) (1,305,898) Decreases and reclassifications 529,591 3,837,000 Other changes from merger (986,928) - Assets held for sale 3,825,000 (3,825,000) Total (14,802,849) (9,822,993) Cash flow from financing activities Change in share capital and reserves (715,643) 306,952 Change in non-current financial assets/liabilities (2,837,645) 2,510,905 of which vis-à-vis related parties 200,000 4,000,000 Change in non-current provisions for risks and charges 3,300,000 - Change in other non-current liabilities (1,766,571) 56,764 Dividends paid out - (10,164,865) Total (2,019,859) (7,290,244) Cash flow in the period (2,691,553) 4,546,712 Net cash and cash equivalents at end of period 5,689,373 8,380,926 Additional information 31/12/07 31/12/06 Income taxes paid 20,019 1,129,737 Interest paid 2,980, ,137 Interest earned a 5,370,742 6,811,157 a Data as at 31/12/06 has been restated

170 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Statutory financial statements 169 STATEMENT OF CHANGES IN EQUITY - FIERA MILANO S.P.A. ( ) Share Profit/ Share premium Legal Other Retained loss for Total sociale reserve reserve reserves earnings period Balance as at 30 June ,869,285 68,823,837 6,727,806 1,798,099 4,367,421 13,506, ,092,768 Shareholder resolution 27/10/06 Allocation of earnings for year: - Legal reserve , , Retained earnings ,290,905-3,290, Dividends ,164,865-10,164,865 Paid capital increase 13,600 87, , Fair value of stock option for the year ended on 31 December , ,952 Net profit/loss for period as at 31/12/ ,980,292-21,980,292 Balance as at 31 December ,882,885 68,911,829 6,778,356 2,003,459 7,658,326-21,980,292 97,254,563 Shareholder resolution 27/04/07 Coverage of loss for the period: - Share premium reserve - -21,980, ,980,292 - Treasury shares -138, , ,271 Fair value of stock option for the year ended on 31 December , ,295 Capital balance from the merger of Italian System for Business SpA on 18/05/ Net profit/loss for period as at 31/12/ ,797,320-20,797,320 Balance as at 31 December ,744,335 46,318,579 6,778,356 2,040,754 7,656,896-20,797,320 75,741,600

171 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Explanatory and supplementary notes to the statutory financial statements The financial statements of Fiera Milano SpA for the financial year ended 31 December 2007 were approved by the Board of Directors on 26 March 2008, which authorised their publication. The Shareholders of Fiera Milano SpA, in their meeting of 10 January 2007, passed a resolution changing the year-end financial statement date, moving it from 30 June to 31 December, and similar resolutions were also passed by the subsidiaries. Consequently, the income statement as at 31 December 2006 only refers to a six-month period, with the resulting effects on the comparability of figures. Fiera Milano SpA covers all typical core areas of the exhibition industry, positioning itself as one of the leading integrated players in Europe. Accounting standards These financial statements have been prepared in accordance with the International Accounting Standards (IASs) and International Financial Reporting Standards (IFRSs) in force at 31 December 2007, issued by the International Accounting Standard Board (IASB) and endorsed by the European Union. The requirements of CONSOB (Italian securities & exchange commission) resolution no of 27 July 2006 and of CONSOB memorandum no of 28 July 2006 have also been taken into account. The financial year ended 31 December 2007 is the first in which IFRS 7, Financial Instruments: Disclosures, has been applied. These explanatory notes thereby reflect the requirements of said document. FORM AND CONTENT OF THE FINANCIAL STATEMENTS As regards the form and content of its financial statements, Fiera Milano SpA has made the following choices: - the Balance Sheet is presented in facing sections with a separate indication of Assets, Liabilities, and Equity. Assets and Liabilities are in turn shown in the consolidated Balance Sheet classified as current, non-current, and held for sale; - the Income Statement is shown in a multiple-step format and items are classified based on their nature since this approach provides reliable information that is more relevant than classification by function; - the cash flow statement is presented using the indirect method; - the statement of changes in equity is presented with separate indication of the period s results and of each revenue and cost that has not gone through profit or loss but has instead been allocated directly to equity on the basis of specific IASs and IFRSs. Numerical data are shown in thousands of euro as allowed by current regulations unless specifically indicated otherwise.

172 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments 171 The independent auditor, PricewaterhouseCoopers SpA, has audited the annual report and accounts. BUSINESS COMBINATIONS Business combinations are recognised in accounts using the purchase method envisaged by IFRS 3. Acquisition cost is equal to the fair value, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity instruments issued by the acquirer, in exchange for control of the acquiree, plus any costs directly attributable to the business combination. Consistently with the requirements of IFRS 3, when the acquisition is initially recognised in accounts, price adjustments contingent upon future events are immediately included as part of purchase cost if they are likely to occur and can be reliably measured. A business combination s cost is allocated by recognising, as at acquisition date, the fair value of assets and liabilities identified at the time of purchase. The positive difference between purchase cost and the portion of the fair value of assets and liabilities identifiable at the time of purchase is recognised as goodwill among assets. If the difference is negative it is directly recognised as a gain in the income statement. In attributing the cost of business combinations, Fiera Milano SpA draws on the information available and, for the more important business combinations, also on external valuations. Step acquisitions If a business combination is created in several steps with subsequent share exchanges, each transaction is treated separately, using the cost of the transaction and fair-value information as at the date of each transaction to determine the amount of any goodwill associated with that transaction. When a subsequent purchase makes it possible to gain control of an entity, the stake previously owned is revalued according to the fair value of identifiable assets and liabilities determined as at the subsequent purchase date. The corresponding amount of this revaluation is recorded in equity attributable to the Group. ACCOUNTING POLICIES Tangible Assets Property, plant and equipment Property, plant and equipment are recognised at purchase or production cost, inclusive of directly allocable costs, and adjusted by their respective cumulative depreciation. Tangible assets are systematically depreciated in each accounting period at straight-line rates, based on economic/technical rates determined according to assets residual possibilities of use. Routine maintenance costs are charged to the income statement when they are incurred.

173 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER The replacement cost of identifiable components of complex assets is allocated to the asset and depreciated over their useful lives. The residual carrying value of the component being replaced is expensed. Costs of routine maintenance and repairs are expensed in the period in which they are incurred. The leasehold improvements are classified in property plant and equipment based on the nature of the cost borne; the depreciation period corresponds to the lower of the residual useful life of the tangible assets and the residual period of the rental contract. The depreciation rates applied are those listed below: - Buildings 33.33% - Office furniture and machinery 12.00% - Exhibition furniture and equipment 27.00% - Restaurant equipment 25.00% - Sundry machinery and equipment 15.00% - Site motor vehicles 20.00% - Electronic machines 20.00% - Plant and machinery 10.00% - Telephone systems 20.00% - Alarm systems 30.00% - Furnishings 12.00% If there are impairment indicators, tangible assets are subjected to impairment testing using the procedure illustrated in the paragraph Impairment of assets. Property, plant, and equipment (leased) There are two types of lease contracts, i.e. finance leases and operating leases. A lease is considered to be a finance lease when it transfers a significant and substantial part of the risks and rewards associated with the asset s ownership to the lessee. Given this, as envisaged by IAS 17 ( Leases ), a leasing deal is considered to be a finance lease when the following factors are individually or jointly present: - The lease transfers ownership of the asset to the lessee at the end of the lease term; - The lessee has the option to purchase the asset at a price which is expected to be sufficiently lower than fair value at the date the option becomes exercisable so that, at the inception of the lease, it is reasonably certain the option will be exercised; - The lease term covers most of the asset s economic life, even if title is not transferred; - At the inception of the lease, the present value of minimum lease payments amounts to at least the fair value of the leased asset; - The lease assets are of such a specialised nature that only the lessee can use them without major modifications being made.

174 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments 173 Assets at Fiera Milano SpA s disposal through finance lease contracts are recognised in the accounts as tangible assets at their fair value as at the purchase date and are depreciated throughout their estimated useful life. The corresponding liability to the lessor is posted on the balance sheet as a current or non-current liability, depending on whether the due date occurs within or beyond twelve months. Lease instalment payments are split between principal, which goes to reduce financial liabilities, and interest, charged to the income statement as finance expense. In the case of operating leases, instalments are recorded in the income statement on a prorated basis throughout contract duration. Intangible assets An intangible asset is recognised in accounts only if it is identifiable, controllable, expected to generate future economic benefits, and if its cost can be reliably measured. Goodwill and intangible assets with an indefinite life Goodwill and other intangible assets with an indefinite life are not amortised. Goodwill Goodwill is the excess of the purchase cost over the acquirer s share of fair value relating to the net value of the acquired entity s identifiable assets and liabilities. After initial recognition in accounts, goodwill is measured at cost less any loss of value stemming from impairment testing (see the section Impairment of assets ). Other intangible assets Intangible assets with a finite life are measured at purchase or production cost, including any ancillary costs, and systematically amortised at straight-line rates for the rest of their projected future usefulness. If there are signs of deterioration, tangible assets are subjected to impairment testing as illustrated in the section Impairment of assets. Industrial patents and rights to use intellectual properties, licenses, and concessions are amortised over a period of three years, starting in the year when their cost was borne. Research costs are charged to expense when they are incurred. In compliance with IAS 38, development costs relating to specific projects including the launch of new exhibitions - are capitalised when their future benefit is considered reasonably certain and when such costs can be reliably measured. They are amortised for the period when expected future benefits emerge against the same project. In the case of capitalised costs relating to the new information system, amortisation has been calculated over a 5-year period. The carrying value of costs is reviewed annually at year-end, or more often if there are any particular reasons for doing so, to analyse fair value for the purposes of recognising any impairment of value.

175 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Impairment of assets Goodwill and other intangible assets with an indefinite life are subjected to impairment testing on a systematic basis, at financial year-end date, or more often if indications of impairment of value emerge. Tangible and intangible assets with a finite life, which are subjected to depreciation and amortisation, are tested for impairment, only when there are indications of impairment of value. The recoverability of amounts posted is checked by comparing carrying value with the highest between the asset s net selling price and its value in use. Net selling price is the amount obtainable from sale of an asset in a transaction between independent, informed, and willing parties, less the costs of disposal. In the absence of binding agreements it is necessary to use the prices expressed by an active market, or the best information available taking into account, among others, recent transactions for similar assets completed in the same industry. Value in use is calculated on the basis of discounting to present value at an appropriate interest rate expressing the cost of equity of a debt-free entity with a similar risk profile of cash flows expected to be generated by the asset (or by a group of assets the so-called cash-generating units (CGUs)) and by its disposal at the end of its useful life. With the exception of goodwill, when an asset s impairment ceases or decreases, the asset s carrying value is reinstated only up to the new estimate of recoverable value. The reinstated value cannot exceed the value that would have been measured if there had been no impairment. Reversal of impairment is recognised as income in the income statement. Financial assets In accordance with the requirements of IASs 39 and 32, financial assets are classified in the following four categories: 1. Financial assets at fair value through profit or loss; 2. Held-to-maturity (HTM) investments; 3. Loans and receivables; 4. Available-for-sale (AFS) financial assets. Classification depends on the purpose for which assets are purchased and held. Management decides on their initial classification at the time of their initial recognition in accounts, subsequently checking this classification at each balance-sheet date. Financial assets are initially recognised at cost, which is equal to fair value plus ancillary transaction costs. Subsequent measurement depends on the type of instrument concerned. Financial assets at fair value through profit or loss which include held-for-trading (HFT) financial assets and financial assets designated as such at the time of initial recognition - are classified among current financial assets and measured at fair value, with the gains or losses stemming from this valuation recognised in the income statement.

176 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments 175 HTM assets are classified among current financial assets if they mature in less than 12 months and among noncurrent financial assets if maturity exceeds that period, and are subsequently measured according to amortised cost. The latter is calculated using the effective interest rate method, taking any purchase discounts or premiums into account to spread them over the entire period up to maturity, less any impairment. Loans and receivables are measured at amortised cost based on the financial assets original effective rate of return. Short-term loans and receivables are recognised at face value because their present value would not be significantly different. At each balance sheet date, the Company assesses the recoverability of these receivables, taking expected future cash flows into account. AFS assets are classified among non-current assets, unless the company intends to sell them within 12 months after balance-sheet date, and are measured at fair value. The gains or losses arising from such measurement are posted in a separate equity account until the items are sold or recovered or in any case cease, or until it is ascertained that they have suffered impairment, in which case the gains or losses accumulated until that moment in equity are posted in the income statement. Equity investments After initial entry, equity investments in subsidiary and associated companies are valued at cost less any impairment deriving from the impairment test. In accordance with the requirements of IASs 32 and 39, investments in companies other than subsidiaries and associates are classified as AFS (available for sale) and are measured at fair value except for cases when fair value is not available. In such cases the cost method is used. Gains and losses stemming from adjustments of value are recognised in a specific equity reserve. In the case of permanent impairment or of sale, the gains and losses recognised until then in equity are posted in the income statement. Other financial assets The capital redemption insurance policies held by Fiera Milano SpA and shown among current financial assets were designated at the time of initial recognition as financial assets at fair-value through profit or loss. Gains and losses stemming from these measurements of fair value are shown in the income statement. Receivables Loans and receivables are initially recognised at their fair value. They are measured at amortised cost based on the financial asset s original effective rate of return. Short-term loans and receivables are recognised at face value because their present value would not be significantly different. At each balance sheet date, the Company assesses the recoverability of these receivables, taking expected future cash flows into account.

177 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Inventories Inventories are measured at the lowest out of purchase or production cost, inclusive of ancillary costs, calculated according to the FIFO method, and the presumable net realisable cost based on market trends. Inventories consist mainly of suspended costs relating to activities pertaining to future accounting periods. Cash & cash equivalents Cash and cash equivalents comprise cash to hand, bank demand deposits and cash investments with an original maturity of not more than three months. The definition of cash and cash equivalents in the cash flow statement is the same as that of the balance sheet. Assets and liabilities held for sale This category includes assets and liabilities (or asset and liability disposal groups/discontinued operations) whose carrying value will be recovered primarily via sale rather than via continued utilisation. For this to happen, the following conditions must be met: - The assets (or disposal group) must be available for immediate sale in their present conditions; - The sale must be highly probable, i.e. the Company must be committed to a programme for their disposal; activities to identify a buyer must have been initiated; and completion of sale must be scheduled to take place within one year of the date of classification in this category. Assets held for sale are measured at the lowest between their net carrying value and their fair value less costs to sell. If an asset that is depreciated or amortised is reclassified to this category, the depreciation or amortisation process is discontinued at the time of reclassification. In compliance with IFRS 5, data relating to discontinued operations are presented as follows: in two specific balance sheet accounts: Held-for-sale assets and Held-for-sale liabilities; in a specific income statement account: Net income/(loss) for period from discontinued operations. Shareholders equity Treasury shares The par value of treasury shares is deducted from share capital and any amount in excess of par value is deducted from the share premium reserve. Gains and losses on trading of treasury shares are shown in a specific equity reserve.

178 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments 177 Costs for operations on capital Costs directly attributable to operations on capital are recognised as a direct reduction of equity. Trade payables, tax liabilities, down payments received, and other liabilities Payables, advances and other liabilities are initially recognised at their fair value. After that, they are measured at amortised cost. Payables are derecognised when underlying financial obligations have been discharged. Liabilities, if they have a due date in excess of twelve months, are discounted to present value using an interest rate reflecting market assessments of the time value of money and specific risks connected with the liability concerned. Discounting interest is classified in finance expense. Derivative instruments A derivative or any other contract with the following characteristics: (i) its value changes in response to the change in an interest rate, the price of a financial instrument, a commodity price, a foreign-exchange rate, a price or rates index, creditworthiness, or another pre-established underlying variable; (ii) it requires no net initial investment or, if initial investment is required, one that is smaller than would be required for a contract from which a similar response to changes in market factors would be expected; (iii) it is settled at a future date, it is classified as a financial instrument and consequently fair-valued at the end of each accounting period. The effects of fair-value measurement are recognised in the income statement as finance income/expense. Provisions for risks and charges Provision is made for risks and charges when the Company must meet a present obligation (legal or constructive) stemming from a past event, the amount of which can be reliably estimated and for settlement of which an outflow of resources is likely to be necessary. If expectations of resource outflow go beyond the next financial year, the obligation is recognised at its present value via discounting of future expected cash flows at a rate that also considers the time value of money and the liability s risk. Risks for which manifestation of a liability is only possible, not probable, are disclosed in the specific section for Guarantees given, commitments, and other contingent liabilities and no provisions are allocated. Bank borrowings and other financial liabilities Financial liabilities are initially recognised at cost as represented by fair value of the funds received net of related costs incurred to receive the loan. After initial recognition, borrowings are measured according to

179 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER amortised cost calculated via application of the effective interest rate. Amortised cost is calculated taking into account issuance costs and any discount or premium envisaged at the time of settlement. Employee benefits Employee benefits paid out upon or after cessation of the employment relationship consist mainly of what in Italy is called trattamento di fine rapporto (or TFR, which is often translated as employee severance indemnities ), which is governed by Article 2120 of the Italian civil code. In accordance with IAS 19, employee severance indemnities are considered a defined-benefit plan, i.e. a plan consisting of benefits provided after cessation of employment, which constitutes a future obligation for which the Group assumes actuarial risks and relative investments. As required by IAS 19, the Group uses the projected unit credit method to determine the present value of its defined-benefit obligations and the related current service costs. This calculation requires the application of objective and mutually compatible actuarial assumptions concerning demographic variables (mortality rate, employee turnover) and financial variables (discount rate, future increases of salary levels). Fiera Milano SpA has opted for immediate recognition in the income statement of any gains or losses stemming from changes in actuarial assumptions, without using the so-called corridor method, which allows recognition in the income statement based on employees expected average residual working life of the cumulative net value of actuarial gains and losses that exceed 10% of the highest between any assets servicing the plan and the present value of the obligation as at balancesheet date. As of 1 January 2007, following social security reform, accumulating employee severance indemnities are to be allocated to pension funds or to the INPS treasury fund. Employees have been given the option to choose the destination of their severance indemnities through 30 June In that regard, the allocation of accumulating employee severance indemnities to pension funds or to INPS means that a portion of these indemnities will be classified as a defined-contribution plan in that the company s obligation is solely the payment of contributions to either the pension fund or to INPS. The liability related to past severance indemnities continues to be a defined-benefit plan to be measured on an actuarial basis. More specifically, the change in the nature of the benefit has made in necessary to recalculate the value of the provision for past severance indemnities accumulated through 31 December 2006 due, essentially, to the exclusion from the actuarial calculation of the assumptions related to salary increases and to the update of the financial assumptions. The difference from the balance as at 31 December 2006 was expensed in a lump sum on the income statement. Stock options Options to subscribe and purchase shares awarded to Group employees and directors give rise to recognition of a cost posted in payroll costs & employee benefits set against a corresponding increase in equity. Options are measured at fair value as at grant date and the related cost is posted in the income statement during the vesting period. Fair value is calculated using specific mathematical and financial models.

180 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments 179 Revenue recognition Revenues are recognised to the extent that it is probable that the economic benefits associated with the sale of goods or rendering of services will flow to the Company and the relevant amount can be measured reliably. Revenues are posted at the fair value of the consideration received or receivable, taking into account any trade discounts and quantity-based reductions granted. As regards the sale of goods, revenue is recognised when the company has transferred the significant risks and rewards of ownership to the buyer. As instead regards the rendering of services, revenue is recognised when service is rendered. Consistently with the requirements of IAS 18 paragraph 25, in the case of revenues for the rendering of services relating to exhibitions and congresses, these are recognised when these exhibitions and congresses actually take place, because it is during the actual exhibition/congress that most of the related costs are borne. When it is probable that an exhibition s total costs will exceed its total revenues, the expected loss is recognised as a cost by making specific provision. Revenues accruing in the period concerning construction contracts are posted on the basis of the amounts agreed in relation to completion status determined using the cost-to-cost method. Operating Costs Costs are recognised when they relate to goods and services sold or used in the period or on an accrual accounting basis when their future usefulness cannot be precisely identified. Payroll costs include, given that they are substantially an item of remuneration, stock options granted to Group managers and directors. The portion of stock option cost assigned to the period is determined according to the length of the period covered by the stock-option scheme. Payroll costs also include, on an accrual accounting basis, taking into account the effective period of service concerned, directors compensation, both fixed and variable. Costs that are not eligible for capitalisation in balance sheet assets are charged to the income statement in the period when they are incurred. Finance income and expense Finance income and expense are recognised in accounts based on timing that considers the effective yield/expense of the asset/liability concerned. Income taxes Income taxes are recorded according to estimated taxable income in compliance with current tax rates and regulations. Income taxes are recognised in the income statement, except for those relating to items directly debited or credited to equity, in which case the tax effect is directly recognised in equity. Deferred taxes are measured according to the taxable temporary differences existing between the carrying amounts of assets and liabilities and their tax base and are classified among non-current assets and liabilities.

181 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Deferred tax assets are recognised to the extent that there is likely to be sufficient future taxable income against which the positive balance can be utilised. The carrying amount of deferred tax assets is subject to review at the end of the year. Deferred tax assets and liabilities are measured according to the tax rates that are expected to be applied in the period when the deferrals materialise, considering the tax rates in force or those that are scheduled to come into force subsequently. Foreign currency transactions Transactions in foreign currencies are recorded at the current exchange rate in force on transaction date. Monetary assets and liabilities denominated in foreign currencies are converted at the exchange rate in force on balance sheet date. Foreign exchange differences generated by the extinction of monetary items or their translation at different exchange rates to those at which they were translated at the time of initial recognition in the period, or in previous periods, are recognised in the income statement. Foreign exchange differences are shown in finance expense and income. Dividends Dividend revenues are recognised in accounts at the time when shareholders right to receive payment has been established. This is normally the date of the Annual General Shareholder Meeting that approves dividend distribution Earnings per share (EPS) Basic EPS is calculated by dividing Company profit or loss attributable to ordinary equity holders by the weighted average number of ordinary shares outstanding in the period, excluding treasury shares. Diluted EPS is calculated by adjusting the weighted average number of shares outstanding to allow for all dilutive potential ordinary shares. Use of estimates Preparation of financial statements and related notes applying IFRSs requires estimates and assumptions to be made that affect the amounts of balance sheet assets and liabilities and disclosures concerning potential assets and liabilities as at balance sheet date. Actual results might differ from these estimates. Estimates are used to recognise provisions for doubtful accounts, depreciation & amortisation, employee benefits, income taxes, and other provisions and reserves. We review estimates and assumptions regularly and the effects of any change are immediately reflected in the income statement.

182 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments 181 Segment reporting The Company does not provide information by segment in view of the uniformity of the business (primary segment) and the geographical area in which it operates (secondary segment). Notes on statutory financial statements items BALANCE SHEET ASSETS NON-CURRENT ASSETS 1) Property, plant, and equipment The breakdown of this category and changes occurring in the last two financial years were as shown in the following table: PROPERTY, PLANT AND EQUIPMENT ( 000) Balance Changes during FY Balance as at Increase Decrease Depreciat. Impairm.t Reclass. Other as at 30/06/06 changes 31/12/06 Buildings Original cost Depreciation Net Plant & machinery Original cost 8,483 1, ,367 Depreciation 1, ,564 Net 7,480 1, ,803 Industrial & commercial equipment Original cost 9, ,051 Depreciation 2,478-1, ,686 Net 7, , ,365 Other tangible assets Original cost 14,685 4, ,876 Depreciation 5, , ,290 Net 9,481 4,192-1, ,586 Assets under construction & down payments Original cost Net Depreciation of property, plant and equipment Original cost 33,586 6, ,302 Depreciation 8, , ,936 Net 24,637 6,717-2, ,366

183 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER PROPERTY, PLANT AND EQUIPMENT ( 000) Balance Changes during FY Balance as at Increase Decrease Depreciat. Impairm.t Reclass. Other as at 31/12/06 changes 31/12/07 Buildings Original cost Depreciation Net Plant & machinery Original cost 10,367 1, ,761 Depreciation 1, , ,883 Net 8,803 1,161-1, ,878 Industrial & commercial equipment Original cost 10,051 1, ,125 Depreciation 3, , ,102 Net 6,365 1, , ,023 Other tangible assets Original cost 18,876 1, ,098 Depreciation 6, , ,554 Net 12,586 1, , ,544 Assets under construction & down payments Original cost Net Depreciation of property, plant and equipment Original cost 40,302 3, ,014 44,776 Depreciation 11, , ,199 Net 28,366 3, , ,577 The extent of and the changes in the various items in the financial year under review are detailed below: Buildings This item amounted to 132 thousand net of depreciation costs for the financial year of 264 thousand. The item regards the costs borne for the construction of prefabricated buildings at the fieramilanocity site to be used as offices. Plant & machinery This item amounted to 8,878 thousand net of depreciation costs for the financial year of 1,316 thousand. It regards costs concerning electrical, heating, alarm and audiovisual plant and systems. Total increases, including reclassifications, of 1,377 thousand mainly related to the completion of plant for the new Rho-Pero exhibition site. Other changes, in the amount of 130 thousand, concern the increase resulting from the merger of Italian System for Business SpA. Value adjustments, in the amount of 116 thousand, concern the write-downs on investments by the leaseholder for the property in Berlin related to the Palazzo Italia project.

184 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments 183 Industrial and commercial equipment This item amounted to 5,023 thousand net of depreciation costs for the financial year of 2,423 thousand and related to equipment and furnishings supporting the exhibition business. Total increases amounted to 1,011 thousand. They mainly referred to the purchase of furnishings and equipment required for operation of exhibitions at the new Rho-Pero exhibition site. Other changes, in the amount of 88 thousand, concern the increase resulting from the merger of Italian System for Business SpA. Other tangible assets This item amounted to 12,544 thousand net of depreciation costs for the financial year of 2,259 thousand and relate to purchases of electronic machinery, furniture and fittings and means of transport. Total increases amounted to 1,755 thousand, including 446 thousand on electronic machines, furnishings, and furnishing accessories and 1,309 thousand on enhancements made to assets owned by the Fiera Milano Foundation, payable by the Company on the basis of the current rental contracts. The depreciation of costs of leasehold improvements is calculated based on the residual term of the property rental contract. Other changes, in the amount of 769 thousand, concern the increase resulting from the merger of Italian System for Business SpA. Value adjustments, in the amount of 296 thousand, concern the write-downs on investments by the leaseholder for the property in Berlin related to the Palazzo Italia project. Tangible assets under construction and down payments This item has a zero balance following the reclassification of assets under construction to the other asset accounts upon their completion and use. The item property, plant, and equipment includes investments for the year in the amount of 48 thousand relating to related-party transactions ( 956 thousand at 31 December 2006). For further details, see note 42 on these transactions. 2) Goodwill and intangible assets of an indefinite life The breakdown of this category and changes occurring in the last two financial years were as shown in the following table: GOODWILL & OTHER INTANGIBLE ASSETS OF AN INDEFINITE LIFE ( 000) Balance Changes during FY Balance as at Increase Decrease Impairm.t Reclass. Other as at 30/06/06 changes 31/12/06 Goodwill Original cost 42, ,630 Depreciation 12, ,789 Net 29, ,841 Total Original cost 42, ,630 Depreciation 12, ,789 Net 29, ,841

185 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER GOODWILL & OTHER INTANGIBLE ASSETS OF AN INDEFINITE LIFE ( 000) Balance Changes during FY Balance as at Increase Decrease Impairm.t Reclass. Other as at 31/12/06 changes 31/12/07 Goodwill Original cost 42, ,630 Depreciation 12, ,789 Net 29, ,841 Total Original cost 42, ,630 Depreciation 12, ,789 Net 29, ,841 The extent of and the changes in the various items in the financial year under review are detailed below: Goodwill This item amounted to 29,841 thousand. Goodwill has been shown in the accounts since the contribution by Fondazione Fiera Milano SpA, on 17 December 2001, of the exhibition business previously managed on the basis of rental of a business branch. As highlighted earlier in the section concerning accounting policies, goodwill and intangible assets of indefinite life are not amortised. They are instead subjected to impairment testing at balance sheet date or more frequently if there are signs of impairment of value. The recoverable value of the cash-generating units (CGUs), to which individual goodwill has been attributed, is checked via calculation of value in use. For the purposes of impairment testing, goodwill and the other intangible assets of an indefinite useful life have been allocated to their respective CGUs. More specifically, the Company has been designated as a CGU. The method used is discounted cash flow, based on forecasts made in the 2008 budgets and in the updated long-term plans for the period , as approved by the respective Boards of Directors, and using a discount rate of 8% (i.e. the weighted average cost of capital, or WACC). In order to calculate the WACC, a risk-free rate of 4.26%, a risk premium of 4.29%, and a pre-tax cost of debt of 4.5% were assumed, along with a debt-to-equity ratio of 10%.

186 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments 185 3) Other intangible assets The breakdown of this category and changes occurring in the last two financial years were as shown in the following table: OTHER INTANGIBLE ASSETS ( 000) Balance Movimenti dell esercizio Balance as at Increase Decrease Depreciat. Impairm.t Reclass. Other as at 30/06/06 changes 31/12/06 Industrial patents & intellectual property rights Original cost 13,050 1, ,817 Depreciation 3,561-1, ,863 Net 9,489 1,767-1, ,954 Concessions, licenses, trademarks & similar rights Original cost Depreciation Net Total other intangible assets Original cost 13,401 1, ,210 Depreciation 3,775-1, ,118 Net 9,626 1,809-1, ,092 OTHER INTANGIBLE ASSETS ( 000) Balance Movimenti dell esercizio Balance as at Increase Decrease Depreciat. Impairm.t Reclass. Other as at 31/12/06 changes 31/12/07 Industrial patents & intellectual property rights Original cost 14,817 1, ,529 Depreciation 4,863-3, ,877 Net 9,954 1,712 3, ,652 Concessions, licenses, trademarks & similar rights Original cost Depreciation Net Total other assets Intangible Original cost 15,210 1, ,109 Depreciation 5,118-3, ,277 Net 10,092 1,899-3, ,832 The extent of and the changes in the various items in the financial year under review are detailed below: Industrial patents & intellectual property rights This item amounted to 8,652 thousand net of amortisation for the financial year of 3,014 thousand, for an increase of 1,712 thousand, which includes capitalised costs of functional developments of the new

187 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER information system ( 1,629 thousand) and purchases of software with long-term user licences ( 83 thousand). Amortisation is calculated over the estimated period of use, equal to five years for the new information system and three years for the other software. Concessions, licenses, trademarks, and similar rights This item amounted to 180 thousand net of amortisation for the financial year of 145 thousand, and the increase of 187 thousand relates to purchases of fixed-term software licences. Amortisation is calculated over a three-year period. The item other intangible includes investments for the year in the amount of 28 thousand relating to relatedparty transactions ( 511 thousand at 31 December 2006). For further details, see note 42 on these transactions. 4) Equity investments The breakdown of this category and changes occurring in the year were as shown in the following table: EQUITY INVESTMENTS IN SUBSIDIARY COMPANIES ( 000) % Carrying Changes during FY Carrying held value Value Write- value 31/12/07 31/12/06 Increase Decr. Reclass. increases downs 31/12/07 Equity investments in subsidiary companies Edizioni Fiera Milano Spa 100% 3,001 2, ,307 4,194 Fiera Food System Spa 100% Nolostand Spa 100% 7, ,765 Expopage Spa 74% 1, ,839 Fiera Milano Congressi Spa 100% 8, ,500 Fiera Milano International Spa 53% 37, ,348 Sifa Spa 100% Fiera Milano Tech Spa 100% 2,404 6, ,538 4,616 Rassegne Spa 100% - 1, ,105 Expo Cts Spa 51% 9, ,863 TL.TI Expo Spa 9% Italian System for Business Spa 100% Eurofairs International Consultoria e Participações Ltda % Total 70,989 12, ,717 76,116 Equity investments in other companies Obiettivo lavoro scrl Total equity investments 70,999 12, ,717 76,126

188 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments 187 The extent of and changes in the item Equity investments are detailed below. The value of the investment is shown net of the related provision for write-downs. The value of the investments in SIFA SpA and Eurofairs International Consultoria e Partipações Ltda is zero following the impairment tests from previous financial years. On 12 April 2007, Fiera Milano SpA made a contribution for future capital increases in the amount of 2,500 thousand for Edizioni Fiera Milano SpA. On 24 April 2007, Fiera Milano acquired the remaining 49% equity interest in Fiera Milano Tech SpA from the ANIE Federation at a price of 2,250 thousand. Following this transaction, the share held went from 51% to 100%. On 27 April and 29 June 2007, Fiera Milano SpA made two contributions for future capital increases in the amounts 2,500 thousand and 2,000 thousand, respectively. On 20 April 2006, Rassegne SpA shareholders, in an extraordinary meeting, approved a capital increase of 100 thousand nominal with share premium of 2,400 thousand, fixing the subscription term at 20 April On 7 February 2007, the Company called up payment of part of the capital increase decided upon, and Fiera Milano SpA subscribed and paid in 625 thousand. On 14 March 2007, Rassegne SpA shareholders, in an extraordinary meeting, approved the coverage of cumulative losses as at 31 December 2006 in the amount of 4,091 thousand by using the share premium reserve and reducing capital. At the same time, they passed a resolution to re-establish share capital up to 500 thousand through a capital increase of 260 thousand nominal with a share premium of 1,000 thousand, which was fully subscribed by Fiera Milano SpA. On 14 March 2007, the Company made a contribution for future capital increases in the amount of 709 thousand for Expo CTS SpA. On 27 February 2007, the Board of Directors of Fiera Milano SpA approved the coverage of cumulative losses for Italian System for Business SpA as at 31 December 2006 in the amount of 5,827 thousand by using the other reserves and by making a contribution to cover the deficit, thereby leaving share capital unchanged at 200 thousand and the share premium reserve unchanged at 300 thousand. On 21 December 2006, the shareholders of Fiera Milano SpA, with a view to the rationalisation of the group s business, approved the proposed merger of Italian System for Business SpA, and the public deed of merger was finalised at the meeting of shareholders of 12 February Finally, the merger deed, effective for accounting and fiscal purposes retroactively to 1 January 2007, was signed on 27 April 2007, with the consequent elimination of the value of the investment in Italian System for Business SpA. At year-end, equity interests were subject to impairment testing. As stated in the Management Report, the result showed the need to devalue the equity interests in Fiera Milano Tech SpA by 4,538 thousand, in Edizioni Fiera Milano SpA by 1,307 thousand, in Rassegne SpA by 780 thousand, and in TL.TI Expo SpA by 92

189 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER thousand. The methodology used for the impairment test is the same as that used for the impairment test for goodwill (see the notes on goodwill for more information). 5) Other financial assets These amounted to 6,625 thousand ( 6,825 thousand at 31 December 2006) and refer to the non-current part of the debenture loans to subsidiaries, as follows: - 5,625 thousand relating to the Nolostand SpA debenture loan maturing 31 December 2016; - 1,000 thousand relating to the Fiera Milano Tech SpA debenture loan maturing 31 December Each debenture loan calls for the repayment of principal in constant semi-annual instalments, and remuneration is paid at market rates. Repayment of the debenture loan to Nolostand SpA has been deferred to 2009, and therefore only the interest portions will be paid up to that date. The change is due to the repayment of the instalments falling due during the year. All the item regards related-party transactions (see also note 42). 6) Trade and other receivables These amounted to 12,619 thousand ( 12,619 thousand at 31 December 2006), of which 9,289 thousand with a duration of over five years, composed of the following: TRADE AND OTHER RECEIVABLES ( 000) Balance Changes during FY Balance as at 31/12/06 Increases Decreases as at 31/12/07 Other receivables 12, ,619 Total 12, ,619 This item comprises 12,618 thousand relating to the direct Parent Company Security Deposit on property rental contracts for the two Rho and Milan exhibition sites and 1,000 relating to other cautionary deposits for various uses. The value equals one quarter s rent on the two rental contracts and includes the updates laid down by the respective contracts. The Security Deposit bears interest calculated based on the current legal rate. The two contracts expire on 31 December 2014 and, unless notice of termination is given, are automatically renewable for nine-year periods.

190 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments 189 The item trade and other receivables includes 12,618 thousand ( 12,618 thousand at 31 December 2006) relating to related-party transactions. For further details, see note 42 on these transactions. 7) Deferred tax assets They amounted to 11,196 thousand ( 12,850 thousand as at 31 December 2006). The increase was mainly due to prepaid corporate income tax (IRES) on the tax losses for the year. For analysis on changes for deferred tax assets, see note 40) of the income statement. CURRENT ASSETS 8) Trade & other receivables TRADE AND OTHER RECEIVABLES ( 000) 31/12/07 31/12/06 Change Receivables from Customers 11,681 13,207-1,526 Trade receivables from subsidiaries 9,912 12,848-2,936 Trade receivables from parent entity Trade receivables from affiliates Trade receivables from subsidiaries for tax consolidation 1,242-1,242 Other receivables 6,491 3,686 2,805 Other receivables from parent entity Other receivables from subsidiaries - 2,851-2,851 Other receivables from affiliates Prepayments Prepayments to subsidiaries Total 30,328 34,114-3,786 These amounted to 30,328 thousand ( 34,114 thousand at 31 December 2006) and are comprised primarily as follows: - amounts receivable from customers for 11,681 thousand ( 13,207 thousand at 31 December 2006), net of doubtful-debt provision for 1,565 thousand. These are amounts receivable from organisers, exhibitors and others for provision of the exhibition site and of services relating to exhibitions. The receivables were reduced via posting of a doubtful debt provision in order to reduce the face value to the presumable realisable value. During the financial year, the cumulative provision changed as follows:

191 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER DOUBTFUL DEBT PROVISION ( 000) 31/12/06 Provisions Uses 31/12/07 Doubtful debt provision 1, ,565 Use of accrued provision refers to receivables for which non-collectability was ascertained during the current financial year. - amounts receivable from subsidiary companies amounted to 9,912 thousand ( 12,848 thousand at 31 December 2006). The receivables are of a commercial nature and are based on market conditions. Services are provided as part of organisation and management of exhibitions, together with other events managed at exhibition site. The main change refers to the 2,120 thousand decrease related to Eurostands SpA and Rassegne SpA, which reduced or eliminated their contribution to this item due to the effect of extraordinary transactions during the year; - amounts receivable from the ultimate parent entity came to 845 thousand ( 967 thousand at 31 December 2006) and refer to receivables for invoices to be issued related to commercial services provided, in part in relation to the annual contract for the mutual provision of services; - amounts receivable from subsidiaries participating in the tax consolidation process total 1,242 (zero at 31 December 2006) and refer to the offset of credit and debit items as part of the tax consolidation; - other receivables from third parties amounted to 6,491 thousand ( 3,686 thousand at 31 December 2006) and consist of receivables from employees of 456 thousand, receivables for the Italian regional business tax (IRAP) of 729 thousand, other taxes receivable of 1,182 thousand, advance payments to suppliers of 3,172 thousand, credits for tax payments on account on employee severance indemnities of 433 thousand, receivables for tax withholdings of 356 thousand, payments on account to INAIL (state occupational accident prevention & insurance agency) of 129 thousand, and other short-term receivables for 34 thousand; - accrued income amounted to 156 thousand ( 396 thousand at 31 December 2006) and refers to insurance premiums and portions of costs borne during the financial year but that apply to the next financial year. The item Trade and other receivables includes 11,999 thousand ( 16,825 thousand at 31 December 2006) relating to related-party transactions. For further details, see note 42 on these transactions. 9) Inventories This item includes suspended costs of 1,686 thousand ( 1,135 thousand at 31 December 2006) relating to exhibitions to be held after 31 December The item Inventories includes 11 thousand ( 25 thousand at 31 December 2006) relating to related-party transactions. For further details, see note 42 on these transactions.

192 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments ) Current financial assets These totalled 47,601 thousand ( 66,326 thousand as at 31 December 2006) and featured the following breakdown: CURRENT FINANCIAL ASSETS ( 000) Uses for Capitalisation 31/12/06 Decreases the period of interest 31/12/07 Short term investments to Group companies 5,082 4,880 2,999-3,201 Other short term investments 61,244 19,155-2,311 44,400 Total 66,326 24,035 2,999 2,311 47,601 This item includes: - 44,400 thousand for the use of liquidity made with leading insurance companies in order to optimise the return on financial resources. Annualised average return was 5.50%; - 1,912 thousand for financing granted to the subsidiary Fiera Milano Tech SpA; thousand for the short-term portion of the debenture loan to the subsidiary Fiera Milano Tech SpA; - 1,089 thousand for the balance of the correspondence account with the Fiera Milano Foundation. The correspondence account is governed by market rates. The 19,155 thousand decrease in uses of liquidity during the year is due to a divestment in January 2007 related to an investment of essentially the same amount made at the end of December 2006 and covered by a temporary increase in short-term borrowings. The item Current financial assets includes 3,201 thousand ( 5,082 thousand at 31 December 2006) relating to related-party transactions. For further details, see note 42 on these transactions. 11) Cash & cash equivalents These amounted to 5,689 thousand ( 8,381 thousand at 31 December 2006) and consist almost entirely of temporary liquidity held in banks. CASH & CASH EQUIVALENTS ( 000) 31/12/07 31/12/06 Change Bank and postal deposits 5,447 8,271-2,824 Cheques Cash and other valuables in hand Total 5,689 8,381-2,692 Cash flow trend vs. 31 December 2006 are shown in the Cash Flow Statement. 12) Assets held for sale This item has a zero balance ( 3,825 thousand at 31 December 2006). The balance became zero with the sale of the equity investment in Eurostands SpA on 22 March 2007.

193 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER EQUITY AND LIABILITIES EQUITY 13) Share capital & reserves Equity consists of the following: EQUITY ( 000) 31/12/07 31/12/06 Change Share capital 33,744 33, of which treasury shares Share premium reserve 46,319 68,912-22,593 of which IFRS first-time adoption reserves -1,796-1,796 - of which treasury shares Legal reserve 6,778 6,778 0 Other reserves 2,041 2, of which IFRS first-time adoption reserves -1,197-1,197 - Retained earnings (losses) 7,657 7,658-1 Profit (loss) for period -20,797-21,980 1,183 Equity 75,742 97,255-21,513 The extent of and changes in the various items are detailed below. Share capital At 31 December 2007, this item amounted to 33,744 thousand ( 33,883 thousand at 31 December 2006) net of treasury shares of 148 thousand. Share capital, which is fully paid-in, is divided into 33,891,778 ordinary shares of 1 each, with no constraints regarding the distribution of dividends and repayment of capital, with the exception of those defined by law for treasury shares. The 138 thousand decrease was due to the purchase of treasury shares, which, in accordance with the IASs and IFRSs, have been recognised as a direct reduction to share capital for their par value. The number and movement of the shares in circulation during the course of the year is shown in the following table: No. of shares as at No. of shares as at 31 December 2007 Changes 31 December 2007 Ordinary shares issued 33,891,778 33,891,778 Treasury shares 8, , ,443 Shares outstanding 33,882,885 33,744,335

194 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments 193 Share premium reserve This amounted to 46,319 thousand ( 68,912 thousand at 31 December 2006) net of changes in first time adoption reserves of 1,796 thousand and treasury share reserves of 684 thousand. The changes occurring during the course of the year were as follows: - a 613 thousand decrease related to the purchase of treasury shares, which, in accordance with the IASs and IFRSs, has been recognised as a direct reduction to the share premium reserve for the difference between their par value and the purchase price; - a 21,980 decrease resulting from the resolution of the shareholders of the direct parent company of 27 April 2007 approving the coverage of the loss for the year by using the share premium reserve in the same amount. Legal reserve This item amounted to 6,778 thousand ( 6,778 thousand as at 31 December 2006). Other reserves These amounted to 2,041 thousand ( 2,004 thousand at 31 December 2006) net of the first-time adoption reserves of a negative 1,197 thousand and consisted of the following: - 2,592 thousand (balance unchanged compared with the previous year) of the former Accelerated Depreciation Reserve; thousand ( 609 thousand at 31 December 2006) from the stock options reserve relating to the value of the figurative cost for the year of the stock options plans resolved as from 26 July 2002; - a negative 1,197 thousand (balance unchanged compared with the previous year) of the first-time adoption reserve. The increase of 37 thousand refers to the stock options reserve and is equal to the fair value of the options attributable to the year. Retained earnings (losses) These amounted to 7,657 thousand ( 7,658 thousand at 31 December 2006) and are composed of undistributed earnings. The 1 thousand decrease is related to losses from previous years recorded following the merger of Italian System for Business SpA. Profit (loss) for the year The financial year ended 31 December 2007 shows a loss of 20,797 thousand. The previous FY s loss amounted to 21,980 thousand. The schedule below shows an analysis of equity as concerns its potential use and distributability, as well as any uses from previous years.

195 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER AVAILABILITY AND DISTRIBUTABILITY OF EQUITY ( 000) Summary of uses in the three prior years Possible Amount to cover for other Balance uses available losses reasons Share capital 33,744 of which treasury shares 147 Capital reserves: Reserve for shares in the parent entity Share-premium reserve 46,319 A, B, C 46,319 21,980 Legal reserve 5,212 B - Other reserves 895 A, B, C 895 Reserves for earnings: Legal reserve 1,566 B - Reserve for foreign exchange gains Other reserves 1,697 A, B, C 1,697 Other reserves (stock options plan) Other reserves (first time adoption) -1,197 Retained earnings (losses) 7,657 A, B, C 7,657 Profit (loss) for period -20,797 - Total 75,742 57,214 21,980 Non-distributable portion (Other reserves - Stock options plan) 646 Non-distributable portion (Start-up and expansion costs) 2,845 Remainder available for distribution 53,723 Key: A: for capital increase; B: to cover losses; C: for distribution to Shareholders LIABILITIES NON-CURRENT LIABILITIES 14) Bank borrowings These amounted to 4,709 thousand ( 7,747 thousand at 31 December 2006) and are composed of the following: BANK BORROWINGS ( 000) 31/12/07 31/12/06 Change Bank borrowings 4,709 7,747-3,038 The medium-term bank borrowings relating to the loan granted by a leading bank, repayable in six-monthly instalments between 31 December 2005 and 30 June The change from the previous year is due to the reclassification to current assets of bank borrowings falling due in the following year.

196 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments ) Provisions for risks and charges These amounted to 5,846 thousand ( 1,789 thousand at 31 December 2006) and are comprised of the following provisions: thousand for the provision made in previous years in the amount of 1,671 thousand against possible return to the ultimate parent entity, the Foundation, of the income accorded by the latter in connection with tax consolidation with the Foundation, which was interrupted during the financial year ended 31 December This income was recognised by the Foundation against the benefit that would have been enjoyed by Fiera Milano SpA if it had acted as tax consolidator. The income was matched with the tax losses of Fiera Milano SpA s subsidiaries excluded from the ultimate parent entity s final tax consolidation, and must be returned to the Foundation if the tax losses are used by the companies that generated them. The decrease of 673 thousand is related to (i) the return of the payment for the tax losses used in the amount of 281 thousand; (ii) the nullification of a 94 thousand portion of the repayment obligation following the elimination of the subsidiary Italian System for Business, the tax losses of which had been offset; and (iii) an update based on a change in the corporate tax rate in the amount of 298 thousand; - 4,300 thousand for the medium/long-term portion of the provision made in relation to the Palazzo Italia project in Berlin. The current portion of 1,700 thousand has been recorded among current provisions for risks and charges. Therefore, as at 31 December 2007, the total risk provision comes to 6,000 thousand. The provision was established during the previous year in the amount of 5,000 thousand by the subsidiary Italian System for Business, which has now been merged into Fiera Milano SpA, and had uses during the current year in the amount of 2,445 thousand and additions of 3,445 thousand in relation to assessments of potential alternative uses of the property. The Statutory Auditors Committee has looked into the situation, and this has led the Board of Directors of the direct parent company to determine that there is no responsibility; thousand for the potential liability due to fiscal risks connected with indirect taxes; - 48 thousand for other risks and charges. 16) Employee benefit provisions They amounted to 5,976 thousand ( 8,096 thousand as at 31 December 2006). These consisted of Italian post-employment provisions (known as severance indemnity provisions ) calculated using actuarial procedures. During the financial year, they underwent the following changes: EMPLOYEE BENEFIT PROVISIONS ( 000) Balance as at 31 December ,096 Severance indemnities accruing 432 Indemnities and advances paid -1,124 Reduction from reform -1,170 Actuarial gains -279 Other changes 21 Balance as at 31 December ,976

197 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Following changes brought about by the reform of the old severance-indemnity system, corporate obligations to employees as regards benefits accruing as from 1 January 2007 lose their connotation of a definedbenefit plan and are assimilated with a defined-contribution plan. Provisions accruing as up to 31 December 2006 continue to be a defined-benefit plan determined according to actuarial calculations that exclude the component relating to future salary increases. Recalculation of provisions already made generated a curtailment of 1,170 thousand, recognised in the income statement. In making the actuarial calculations, the Company has been assisted by an expert listed with the appropriate register. The Company s actuaries used the following main assumptions for their calculations: - statistical analyses took into account average salaries by classes of employee age and tenure of employees on the payroll as at 31 December 2007; - actuarial measurement was based on an as-is scenario, i.e. no new hires were assumed in the time span concerned; - simulations were performed according to accrued benefits using the projected unit credit method; - demographic assumptions took the ISTAT (Italian Statistics Bureau) and INPS (Italian state pension & social security agency) models into account for projections through to 2010; - the economic and financial assumptions are shown in the following table: ECONOMIC AND FINANCIAL ASSUMPTIONS FOR CALCULATION OF SEVERANCE INDEMNITY PROVISIONS 31/12/07 31/12/06 Technical discounting rate 5.50% 4.60% Annual inflation rate 2.00% 2.00% Annual rate of total increase in salaries 3.00% 3.00% Annual rate of increase in severance indemnity provision 3.00% 3.00% As regards the discounting rate, the iboxx Eurozone Corporate AA rate for bonds of between 7 and 10 years was used to calculate present value. 17) Deferred tax liabilities DEFERRED TAX LIABILITIES ( 000) 31/12/07 31/12/06 Change Deferred tax liabilities 8,069 6,314 1,755 They amounted to 8,069 thousand ( 6,314 thousand as at 31 December 2006). The item consisted of: - 7,223 thousand for the deferred tax provision for corporate income tax (IRES); thousand for the deferred tax provision for the regional business tax (IRAP).

198 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments 197 The increase is mainly due to the deferred taxes calculated owing to the higher tax-deductible amortisation than the amount attributed to the income statement. For analysis on changes for deferred tax assets, see note 40) of the income statement. 18) Other non-current liabilities These had a zero balance ( 1,767 thousand at 31 December 2006) and are composed of the following: OTHER NON-CURRENT LIABILITIES ( 000) 31/12/07 31/12/06 Change Forward price for purchase of 49% stake in ExpoCTS SpA - 1,767-1,767 Total - 1,767-1,767 The item concerning the forward price for the purchase of a 49% stake in Expo CTS was eliminated following the reclassification of the present value of the forward price for the investment in ExpoCTS SpA among current liabilities. CURRENT LIABILITIES 19) Bank borrowings These amounted to 64,063 thousand ( 70,990 thousand at 31 December 2006) and are composed of the following: BANK BORROWINGS ( 000) 31/12/07 31/12/06 Change Current account overdrafts 61,025 68,031-7,006 Loans taken out and current portions of long-term borrowings 3,038 2, Total 64,063 70,990-6,927 Short-term bank borrowings comprise: - 61,025 thousand for short-term loans owing to temporary cash requirements; - 3,038 thousand for the short-term portion of the loan granted by a leading bank, repayable in six-monthly instalments between 31 December 2005 and 30 June The change from the previous year is due to the instalments paid during the year and to the reclassification of non-current portions to current liabilities.

199 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER ) Trade payables They amounted to 26,217 thousand ( 24,820 thousand as at 31 December 2006). The trade payables mainly relate to Italian suppliers, mostly for purchases of services required to hold the exhibitions typical of Company operations. The increase is mainly due to the increase in operations. 21) Down payments received These amounted to 38,186 thousand ( 31,809 thousand at 31 December 2006) and consist of down payments billed to customers for exhibitions and initiatives to be taken in the following year. The following table provides details by exhibition. The change from the previous year is insignificant due primarily to the biennial or multiannual frequency of a number of exhibitions. DOWN PAYMENTS RECEIVED FOR NEXT YEAR EXHIBITIONS ( 000) 31/12/07 31/12/06 Change BIAS BIMU BIT 1, BUIL UP EXPO - 2,341-2,341 EIMU EIRE - EXPO ITALIA REAL ESTATE ENERMOTIVE - 1,178-1,178 EUROCUCINA EUROLUCE FESTIVITY 1,225 1, FLUID HOST LIVINLUCE - 3,359-3,359 MACEF PRIMAVERA - CHIBI&CART 10,792 11, MADE EXPO ,181-4,181 MICAM PRIMAVERA MIDO 1,241 1, MIFUR MILANO UNICA PRIMAVERA MILANOVENDEMODA AUTUNNO MIPEL PRIMAVERA MOSTRA CONVEGNO EXPOCOMFORT SERVITIS ,292 1,046 9,246 PROMOTION TRADE EXIBITION SALONE INTERNAZIONALE DEL MOBILE 2,243 2, SICUREZZA SIMEI TUTTOFOOD VENDITALIA XYLEXPO OTHER TOTAL 38,186 31,809 6,377

200 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments 199 The item includes 22,972 thousand ( 21,980 thousand at 31 December 2006) relating to related-party transactions. For further details, see note 42 on these transactions. 22) Other financial liabilities OTHER CURRENT FINANCIAL LIABILITIES ( 000) 31/12/07 31/12/06 Change Balance of operating account with the Foundation - 5,869-5,869 Finance leases Total - 6,033-6,033 This item has a zero balance ( 6,033 thousand at 31 December 2006). The change is due to the elimination of a lease financing agreement and to the fact that, as at 31 December 2007, the correspondence account with the Fiera Milano Foundation had a credit balance. 23) Provisions for risks and charges These amounted to 2,424 thousand ( 4,696 thousand at 31 December 2006) and include: - 1,700 thousand for the current portion of the provision made in relation to the Palazzo Italia project in Berlin; thousand for other risks related to outstanding disputes. During the previous year, this item included the outlays expected to cover the deficit of the subsidiary Italian System for Business SpA. The related payment was made on 15 March ) Tax liabilities TAX LIABILITIES ( 000) 31/12/07 31/12/06 Change Personal income tax of dependent employees 1, Personal income tax of occasional and continuous outside staff Income tax for the year - (IRAP) Other tax liabilities Total 2,655 1,323 1,332 The increase is related both to income tax withholdings on employee salaries connected with the higher salaries paid in December 2007, due in part to early retirement incentives, and to current taxes for the year.

201 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER ) Other current liabilities OTHER CURRENT LIABILITIES ( 000) 31/12/07 31/12/06 Change Trade accounts payable to subsidiary companies 2,243 6,752-4,509 Trade accounts payable to parent entity 3, ,495 Trade accounts payable to associated companies Amounts payable to parent entity for tax consolidation 281 4,315-4,034 Amounts payable to subsidiaries for tax consolidation Amounts payable to parent entity for Group VAT Other amounts payable to parent entity Amounts payable to subsidiaries Amounts payable to pension & social security agencies 1,244 1, Amounts payable to directors and statutory auditors Amounts payable to employees 4,106 3, Amounts payable to exhibition organisers and others 9,048 5,001 4,047 Forward price for Expo CTS SpA 1,874-1,874 Accrued liabilities Deferred income Deferred income for subsidiaries Total 23,232 22, They amounted to 23,232 thousand ( 22,736 thousand as at 31 December 2006). The change in relation to the previous year is mainly due to: - a 4,509 thousand decline in payables attributable to Expo CTS and to Eurostands following the sale of the company during the year; - a 4,034 thousand decline in payables to the ultimate parent entity for the settlement of items related to the tax consolidation process which came to an end as at 31 December 2006; - a 2,495 thousand increase in trade payables to the ultimate parent entity for services provided during the year and partially invoiced at year-end; - an increase in amounts payable to exhibition organisers and other payables related mainly to receipts not yet returned for biennial events to be held in 2008; - the reclassification of non-current liabilities for the forward price on the investment in Expo CTS SpA. The present value of the nominal value of 2,000 thousand has been calculated based on a rate of 7.5%. The difference in relation to the value for the previous financial year has been shown on the income statement. The item includes 6,502 thousand ( 12,709 thousand at 31 December 2006) relating to related-party transactions. For further details, see note 42 on these transactions.

202 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments 201 FINANCIAL ASSETS & LIABILITIES As at 31 December 2007, the Company had a net debt of 8,857 thousand (net debt of 3,238 thousand at 31 December 2006), as detailed in the following table. Where relevant, the portion attributable to related parties is indicated for each item. NET FINANCIAL POSITION (Amounts in 000) 31/12/07 31/12/06 A. Cash 5,689 8,381 B. Other cash equivalents - - C. Securities held for trading - - D. Cash & cash equivalents (A+B+C) 5,689 8,381 E. Current financial assets 46,512 66,326 E.1 of which current financial receivables from subsidiaries 2,112 5,082 E.2 of which current financial receivables from parent entity - - F. Current bank borrowings 61,025 68,031 G. Current portion of non-current debt 3,038 2,959 H. Other current financial liabilities -1,089 6,033 H.1 of which current financial liabilities from parent entity -1,089 5,869 I. Current financial debt (F+G+H) 62,974 77,023 J. Current net financial debt (cash) (I-E-D) 10,773 2,316 K. Non-current bank borrowings 4,709 7,747 L. Debt securities on issue - - M. Other non-current (receivables)/liabilities (6,625) (6,825) M.1 of which non-current financial receivables from subsidiaries (6,625) (6,825) N. Non-current net financial debt (cash) (K+L+M) (1,916) 922 O. Total net financial debt (cash) 8,857 3,238 The Company has a favourable cash management cycle thanks to the rental of exhibition space to Organisers and the simultaneous provision of administration and treasury services, ensuring the collection of all payments made by exhibition exhibitors to the Organiser. After collection, Fiera Milano SpA based on contractually agreed conditions reverses to organisers the amounts pertaining to them and retains the fee for exhibition space occupied. This system allows the Company to collect its fees in advance. Provided below is additional information concerning the Company s financial instruments useful in better assessing: - the significance of the financial instruments in relation to financial performance and standing; - the nature and entity of the risks resulting from the financial instruments to which the Company was exposed during the current and previous years and related methods of management. Classes of financial instruments The items on the balance sheet and the types of risk related to financial instruments as at 31 December 2006 and 2007 are shown in the table below:

203 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER RISK TYPE ( 000) Liquidity Rate Credit Note 31/12/ /12/2007 risk risk risk NON-CURRENT ASSETS 1) Other financial assets 5 6,825 6,625 X 2) Trade and other receivables 6 12,619 12,619 X CURRENT ASSETS 3) Trade and other receivables 8 34,114 30,328 X 4) Current financial assets 10 66,326 47,601 X 5) Cash & cash equivalents 11 8,381 5,689 X NON-CURRENT LIABILITIES 6) Bank borrowings 14 7,747 4,709 X CURRENT LIABILITIES 7) Bank borrowings 19 70,990 64,063 X 8) Trade payables 20 24,820 26,217 X 9) Other financial liabilities 22 6,033 - X 10) Other current liabilities 25 22,736 23,232 X Significance of financial instruments The financial instruments and their related significance in relation to financial performance and standing as at 31 December 2006 and 2007 are shown in the table below: CATEGORIES OF FINANCIAL ASSETS AND LIABILITIES SHOWN IN THE ACCOUNTS ( 000) Assets at fair value a Liabilities through Loans Held-to- at Income profit and maturity amortised Fair statement Note 31/12/2006 or loss receivables investments cost value effect NON-CURRENT ASSETS 1) Other financial assets 5 6, ,825-6, ) Trade and other receivables 6 12,619-12, , CURRENT ASSETS 3) Trade and other receivables 8 34,114-34, , ) Current financial assets 10 66,326 61,243 5, ,326 1,194 5) Cash & cash equivalents 11 8,381-8, , NON-CURRENT LIABILITIES 6) Bank borrowings 14 7, ,747 7, CURRENT LIABILITIES 7) Bank borrowings 19 70, ,990 70, ) Trade payables 20 24, ,820 24,820-9) Other financial liabilities 22 6, ,033 6, ) Other current liabilities 25 22, ,421 22,736 - a Fair value designated as such upon initial recognition

204 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments 203 CATEGORIES OF FINANCIAL ASSETS AND LIABILITIES SHOWN IN THE ACCOUNTS ( 000) Assets at fair value a Liabilities through Loans Held-to- at Income profit and maturity amortised Fair statement Note 31/12/2007 or loss receivables investments cost value effect NON-CURRENT ASSETS 1) Other financial assets 5 6, ,625-6, ) Trade and other receivables 6 12,619-12, , CURRENT ASSETS 3) Trade and other receivables 8 30,328-30, , ) Current financial assets 10 47,601 44,400 3, ,601 2,355 5) Cash & cash equivalents 11 5,689-5, , NON-CURRENT LIABILITIES 6) Bank borrowings 14 4, ,709 4, CURRENT LIABILITIES 7) Bank borrowings 19 64, ,063 64,063-2,891 8) Trade payables 20 26, ,217 26,217-9) Other current liabilities 25 23, ,077 23,232 - a Fair value designated as such upon initial recognition The carrying value of the financial assets and liabilities, as can be seen in the tables above, is a reasonable approximation of their fair value. Indeed, for the most part, the financial instruments are short-term forms of debt and investment, and in cases in which medium and long-term instruments were used, such instruments did not entail significant related costs. Guarantees For information on financial assets given as guarantees, see note 6 of these explanatory notes to the financial statements. Credit risk In the light of the cash management cycle, credit risk is believed not to be significant. Moreover, Fiera Milano SpA hosts and organises exhibitions that are leaders in their respective industries, meaning that exhibitor loyalty is very strong. The current system means that all receipts from exhibitors flow into Fiera Milano SpA s coffers and that it is Fiera Milano which reverses to its organiser customers the amounts payable to them. Three different categories of credit risk have been defined: organisers, exhibitors, and other receivables. In the first class of risk, organisers of exhibitions, the receivables have been categorised as being the least risky, given that the Company manages the cash flows for all exhibitions held at the two venues.

205 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER In the second class of risk, exhibitors, the receivables have been categorised as being of medium risk in that exhibitors must generally make payment before the end of the exhibition. The third class of risk, other receivables, refers primarily to exhibition-related activities (stand fitting, congresses, promotion, internet services) and non-exhibition activities (sponsors, advertising, and others). Collections for these receivables take place in accordance with the normal invoice terms. The classes of credit risk as at 31 December 2006 and 2007 are shown below along with the related ageing: CLASSES OF CREDIT RISK ( 000) FY at Ageing 31/12/2006 Not yet Past Class Receivable due due days days days Older Allowances Organisers 11,014 10, Exhibitors 1, , Other 14,780 6,391 9,089 5,415 1, , Total 27,136 16,960 11,589 6,141 2,251 1,222 1,976 1,413 CLASSES OF CREDIT RISK ( 000) FY at Ageing 31/12/2007 Not yet Past Class Receivable due due days days days Older Allowances Organisers 8,169 6,993 1, Exhibitors 1, ,318 1, Other 12,271 6,797 6,394 3,147 1, , Total 22,438 14,115 9,888 4,548 1,896 1,208 2,237 1,565 Fiera Milano SpA does not renegotiate receivables. The provision for doubtful accounts is calculated based on presumed recoverability, both by in-house calculations and with the help of outside legal counsel. Changes in the provision for doubtful accounts as at 31 December 2006 and 2007, divided by class, are shown in the table below: PROVISION FOR DOUBTFUL ACCOUNTS ( 000) FY at FY at 30/06/ /12/2006 Class Allowances Provisions Uses Allowances Exhibitors Other Total ,413

206 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments 205 PROVISION FOR DOUBTFUL ACCOUNTS ( 000) FY at FY at 30/06/ /12/2006 Class Allowances Provisions Uses Allowances Exhibitors Other Total 1, ,565 The Company mainly makes use of bank sureties to mitigate credit risk. As at 31 December 2006 and 2007, bank sureties in the amount of 200 thousand (related to other receivables) and 2,000 thousand (of which 1,500 thousand related to organisers and 500 thousand to other receivables), respectively, were obtained. In neither 2006 nor 2007 did Fiera Milano SpA examine any sureties. Liquidity risk As at 31 December 2007, the Company was not significantly exposed to liquidity risk thanks to the availability of financial assets on demand and of bank deposits. The Company has bank credit facilities of various forms in place. Given the overall situation, Fiera Milano SpA gives preference to funding via the use of lines of credit for short-term uses, also with the aim of commanding better interest rates. It should also be noted that the Company made cash investments in a number of insurance policies with leading insurance companies. They are, in any case, investments on demand and lowrisk and therefore the related amount can, in practical terms, be considered to be additional cash at the Company s disposal. The tables below provide an analysis by duration of the financial liabilities and a calculation of the related interest expense for the period of maturity as at 31 December 2006 and FINANCIAL LIABILITIES ( 000) FY at >5 31/12/2006 months months months months months years years years Current bank borrowings 70,990 68,032 1,469 1,489 Current interest payable Non-current bank borrowings 7,747 1,509 1,529 3,119 1,590 Non-current interest payable Trade payables 24,820 24,820 Other financial liabilities 6,033 6,033 Total 109,590 99,520 1,705 1,721 1,708 1,691 3,322 1,630 - FINANCIAL LIABILITIES ( 000) FY at >5 31/12/2007 months months months months months years years years Current bank borrowings 64,063 61,025 1,509 1,529 Current interest payable Non-current bank borrowings 4,709 1,549 1,570 1,590 Non-current interest payable Trade payables 26,217 26,217 Other financial liabilities Total 94,989 88,117 1,708 1,691 1,671 1,651 1,

207 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Market risks Fiera Milano SpA s policy is not to undertake transactions in derivatives as a means of hedging market risk. a) Interest-rate risk The investment of temporary cash surpluses in insurance policies is designed to optimise the yield of the liquidity that is cyclically generated within the Company. They are low-risk investments, monetisable, with total or partial redemptions, on demand and without payment of penalties. In addition, the medium-term loans taken out by Fiera Milano SpA are totally repayable at any time without payment of penalties. The Company s financial strength enables it to access credit facilities at very competitive conditions and therefore to handle any interest-rate fluctuations well. The Company constantly monitors market conditions in order to take prompt action if the scenario changes. As concerns the breakdown of bank borrowings into short and long-term, see notes 14 and 19 of these explanatory notes to the financial statements. Below is an analysis of sensitivity to interest-rate risk, which shows the effects on equity and the income statement that would have been recognised in the event of changes in interest rates within a range of plus or minus 0.5 points. ANALYSIS OF SENSITIVITY TO INTEREST-RATE RISK ( 000) Amount Balance* Income 31/12/06 (debt) (expense) Rate -0,5% 0,5% Current accounts 8,271 20, % Capitalisation policies 61,243 39,946 1, % 1,748 2,148 Debenture bonds to subsidiaries 11,301 11, % Short-term financing to subsidiaries % 4 5 Short-term borrowings -68,032-20, % Balance of correspondence account -5,869-1, % Current and non-current bank borrowings -10,706-12, % *Average over year ANALYSIS OF SENSITIVITY TO INTEREST-RATE RISK ( 000) Amount Balance* Income 31/12/07 (debt) (expense) Rate -0,5% 0,5% Current accounts 5,447 15, % Capitalisation policies 44,400 42,259 2, % 2,101 2,523 Debenture bonds to subsidiaries 6,825 6, % Short-term financing to subsidiaries 1, % Balance of correspondence account 1,089-1, % Short-term bank borrowings -61,025-64,959-2, % -2,402-3,054 Current and non-current bank borrowings -7,747-9, % *Average over year

208 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments 207 b) Foreign-exchange risk This risk is negligible since, as at 31 December 2007, the Company did business almost exclusively in the domestic market and did not have any foreign-currency loans in place. The Company reserves the right to use appropriate hedging instruments in the event that specific risks of this nature should arise. c) Risk of changes in commodity prices Fiera Milano SpA s exposure to commodity price risk is limited. Fiera Milano SpA generally has more than one supplier for each commodity considered to be critical. In some cases it enters into long-term contracts to assure lower price volatility. Disclosure concerning guarantees given, commitments, and other potential liabilities These items amounted to a total of 1,974 thousand ( 25,251 thousand at 31 December 2006) and are composed of the following: Bank sureties issued to third parties: - letters of patronage for 1,974 thousand ( 3,291 thousand at 31 December 2006) issued in the interests of the subsidiary Nolostand SpA in favour of Interbanca for loans granted.

209 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER INCOME STATEMENT The different time period of the financial years under review, the analytical presentation of positive and negative income items in specific schedules within the financial statements and the previous comments on Balance Sheet items make it possible to limit the comments below to just the main items. REVENUES 26) Revenues from sales and services They amounted to 170,677 thousand ( 60,650 thousand as at 31 December 2006). The breakdown by type of revenue was as follows: REVENUES FROM SALES AND SERVICES ( 000) 31/12/07 31/12/06 Change (6 months) Sales of publishing products Miscellaneous fees and royalties Exhibition space sales Congress space sales Exhibitions and congress organisation services Rental of stands, fittings, and equipment Exhibition site services Supplementary exhibition services Advertising spaces and services Catering and canteen services Exhibition insurance services Access surveillance and customer care services Administrative services Telephone and internet services Other Total The trend in revenues, and in the items related to the use of exhibition and congress areas, is generally due to exhibition dynamics. Because of the biennial and multiannual frequency of a number of events, it is not possible to compare like for like between consecutive years. The item includes 70,865 thousand concerning related-party transactions ( 21,548 thousand as at 31 December 2006). For further details, see note 42 on these transactions. Activities are almost entirely concentrated in Italy.

210 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments 209 OPERATING COSTS 27) Costs of materials They amounted to 471 thousand ( 244 thousand as at 31 December 2006). They featured the following breakdown by type: COSTS OF MATERIALS USED IN OPERATIONS ( 000) 31/12/07 31/12/06 Change (6 months) Raw materials Secondary materials and consumables Printed materials, forms, and stationery Total The item includes 50 thousand concerning related-party transactions ( 40 thousand as at 31 December 2006). For further details, see note 42 on these transactions. 28) Costs for services They amounted to 86,212 thousand ( 37,906 thousand as at 31 December 2006). They featured the following breakdown by type: COSTS FOR SERVICES ( 000) 31/12/07 31/12/06 Change (6 months) Change in suspended costs incurred for future exhibitions Stands and equipment for exhibitions 19,005 8,007 10,998 Security and gate services 9,347 4,018 5,329 Maintenance 9,531 4,606 4,925 Energy costs 8,466 3,348 5,118 Ticketing Technical assistance and auxiliary services 3,125 1,137 1,988 Cleaning and waste collection 5,805 2,595 3,210 Advertising services 2,516 1, Technical, legal, commercial & administrative advisory services 4,533 1,833 2,700 IT services 4,243 3,116 1,127 Insurance premiums 3,096 1,392 1,704 Emoluments of Statutory Auditors Transport services 1, Services for meetings and congresses Collateral events connected with exhibitions 4,862 2,125 2,737 Telephone and Internet expenses 1, Professional and other services 2, ,721 Other 6,396 2,198 4,198 Total 86,212 37,906 48,306

211 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER The Costs for services item primarily consists of costs for operating the exhibition sites during activation, performance, and dismantling of exhibitions and congresses. The item includes 17,027 thousand concerning related-party transactions ( 9,555 thousand as at 31 December 2006). For further details, see note 42 on these transactions. 29) Costs for use of third-party assets These amounted to 58,000 thousand ( 27,160 thousand at 31 December 2006) and featured the following breakdown: COSTS FOR USE OF 3RD-PARTY ASSETS ( 000) 31/12/07 31/12/06 Change (6 months) Rental and expenses of exhibition sites 55,291 26,646 28,645 Other rental costs 2, ,993 Car hire Hire of office equipment and photocopiers Total 58,000 27,160 30,840 The rentals and costs of exhibition sites included the rent on the property payable to the Foundation for 54,150 thousand. The item includes 54,673 thousand concerning related-party transactions ( 26,523 thousand as at 31 December 2006). For further details, see note 42 on these transactions. 30) Payroll and employee benefit costs These amounted to 30,489 thousand ( 14,530 thousand at 31 December 2006) and featured the following breakdown: PAYROLL AND EMPLOYEE BENEFIT COSTS ( 000) 31/12/07 31/12/06 Change (6 months) Wages and salaries 19,971 9,396 10,575 Social security charges 6,400 3,041 3,359 Post-employment benefits Outside and temporary staff Directors' emoluments Other operating costs 2,503 1,017 1,486 Total 30,489 14,530 15,959 Other employee benefit costs include costs for early retirement incentives of 2,186 thousand. The early retirement incentives are part of a project concerning the turnover of management.

212 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments 211 The item includes 35 thousand concerning related-party transactions ( 69 thousand as at 31 December 2006). For further details, see note 42 on these transactions. The following table shows the average number of employees (including fixed-term workers) by contractual category: AVERAGE EMPLOYEE HEADCOUNT BY CATEGORY 31/12/07 31/12/06 Change Managers Middle managers & white-collars Total Employee benefits Stock option plans Fiera Milano SpA implements, and has implemented in past years, stock option plans with the aim of motivating and retaining Group managers. During FY 2005/2006, a new plan was initiated for the period The shareholders, in their extraordinary meeting of 28 October 2005, passed a resolution deciding to: - attribute the Board of Directors with the power to increase share capital on one or more occasions, for consideration and in divisible form, by a maximum nominal amount of 1,000 thousand, with exclusion of option rights, to service a new stock option plan for the 3-year period ; - give the Board of Directors a mandate to approve the above stock option plan s regulations and identify plan beneficiaries. As regards this last point, on 16 December 2005 Fiera Milano SpA s Compensation Committee started the process for identification of the plan s beneficiaries, preparing a recommendation in this respect for the Board of Directors. Specifically, the Compensation Committee identified 43 plan beneficiaries, among managers and executive directors of the Fiera Milano Group and of the Foundation, the ultimate parent entity. On 16 January 2006 the Board of Directors of Fiera Milano SpA implemented the shareholders resolution passed at the meeting held on 28 October 2005 concerning adoption of the Stock Option Plan and approved: the Plan Regulation, which reflects the guidelines approved at the Shareholders Meeting; the list of beneficiaries and the number of options to be assigned to each of them, also taking the Compensation Committee s recommendation into account, for a total of 700,000 options; the per-option exercise price, fixed at 8.99; the report pursuant to Article 2441 of the Italian civil code concerning execution of an initial tranche of 700,000 of the capital increase to service the plan.

213 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER On 13 February 2006, the Board of Directors then formally decided at a meeting recorded by a public deed in a notary s presence on the capital increase of a maximum nominal amount of 700 thousand, with exclusion of option rights as per Article 2441, paragraphs 5 and 8, of the Italian civil code, via the issue of a maximum number of 700,000 ordinary shares of a par value of 1.00 each, of which 695,000 are already assigned. As regards this, the independent auditor PricewaterhouseCoopers has issued a fairness opinion on the increase decided upon, as required by current regulations. In 2007, a number of directors and senior managers left the Group, and the options that had not yet matured lost their effect and were returned to the Company. At the same time, the Board of Directors, in its meeting of 10 August 2007, assigned 136,250 new options to two directors and one senior manager at an exercise price per option of For fair-value measurement of shares granted via stock option plans the Fiera Milano Group uses experts who apply the binomial-tree mathematical model. Measurement and quantification of the stock option plan has taken account of the change of FY end date from 30 June to 31 December of each year. The key data of reference used in the model to set a value on the second lot of the current stock option plan are: - average share price on option grant date: 6.10; - exercise price as at option grant date: 7.63; - expected volatility: 15.47% estimated on the basis of the shares historical price volatility; - risk-free rate: 4.14%; - contractual life: as described above. Changes during the year are shown in the following table: 31/12/07 31/12/06 Number Average Number Average subscr. price subscr. price Outstanding at beginning of FY 579, , Granted during FY 136, Cancelled during FY 103, ,500 Exercised during FY - - Lapsed during FY - - Outstanding at year-end 611, ,500 Exercisable at year-end 123,750 0 On 1 January 2008, the one-month period laid down by the Plan Rules for exercise of the second tranche of options granted began. None of the beneficiaries exercised the option relating to the increase in the stock price over that period. According to the Rules, these options may also be exercised in subsequent periods, i.e. in January 2009, by the managers and directors still in service or in office.

214 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments 213 With reference to the recommendations made in CONSOB Communication no of 15 February 2000, the movement of the options for the CEO and the General Manager is shown below: Options cancelled Options held at beginning Options granted Options exercised or lapsed Options held of FY during FY during FY during FY at year-end 11= A B Full Office Number Average Average Number Average Average Number Average Average Number Number Average Average name held of options excercise term of options excercise term of options excercise market of options of options excercise term price price price price upon price exercise Claudio Artusi CEO , / , /2009 Enrico Pazzali G.M.* , / , /2009 *In office as from 2 January ) Other operating expenses These expenses amounted to 4,068 thousand ( 2,068 thousand as at 30 June 2006) and featured the following breakdown: OTHER OPERATING EXPENSES ( 000) 31/12/07 31/12/06 Change (6 months) Other fiscal costs 3,298 1,796 1,502 Association fees Subscriptions Bad debts Other expenses Total 4,068 2,068 2,000 The item includes 698 thousand concerning related-party transactions ( 464 thousand as at 31 December 2006). For further details, see note 42 on these transactions. 32) Other revenues These amounted to 8,142 thousand ( 2,738 thousand at 31 December 2006) and featured the following breakdown: OTHER REVENUES ( 000) 31/12/07 31/12/06 Change (6 months) Capital gains on non-current assets Use of doubtful debt provision Changes in estimates for previous FY's Re-charge of costs of seconded staff Office rental and expenses 1, Insurance indemnities Other cost recoveries 5,701 1,478 4,223 Other income Total 8,142 2,738 5,404

215 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER The item includes 6,443 thousand concerning related-party transactions ( 1,684 thousand as at 31 December 2006). For further details, see note 42 on these transactions. 33) Depreciation of property, plant, and equipment They amounted to 6,262 thousand ( 2,990 thousand as at 31 December 2006). The details of depreciation are shown in the relevant section of the Explanatory Notes commenting on Property, plant, and equipment. 34) Amortisation of intangible assets They amounted to 3,160 thousand ( 1,344 thousand as at 31 December 2006). 35) Adjustments to asset value These amounted to 412 thousand (a zero balance at 31 December 2006) and refer to write-downs of assets at the Berlin property being rented out for the Palazzo Italia project. 36) Allowance for doubtful accounts and other provisions These amounted to 2,413 thousand ( 639 thousand at 31 December 2006) and featured the following breakdown: ALLOWANCE FOR DOUBTFUL ACCOUNTS AND OTHER PROVISIONS ( 000) 31/12/07 31/12/06 Change (6 months) Allowance for doubtful trade payables Provision for taxes and other duties Other risk provisions 4,045-4,045 Uses of other risk provisions -2, ,445 Total 2, ,774 For a more detailed analysis of changes in the provision for risks for the year, see notes 15 and 23 of the balance sheet.

216 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments ) Finance income This amounted to 4,367 thousand ( 10,909 thousand as at 31 December 2006), subdivided as follows: FINANCE INCOME ( 000) 31/12/07 31/12/06 Change (6 months) Interest earned on cautionary deposit for rental of exhibition centres from Parent entity Interest earned on correspondence account vs. parent entity 41 Dividends from subsidiaries 131 9,141-9,010 Interest earned on debenture loans to subsidiaries Interest earned on other financing to subsidiaries Interest earned on current accounts Interest earned on current financial assets (investment of cash surplus) 2,312 1,022 1,290 Foreign exchange gains Other finance income Actuarial Gains Total 4,367 10,909-6,583 The item includes 1,031 thousand concerning related-party transactions ( 9,720 thousand as at 31 December 2006). For further details, see note 42 on these transactions. 38) Finance expense This amounted to 3,727 thousand ( 1,257 thousand as at 31 December 2006), subdivided as follows: FINANCE EXPENSE ( 000) 31/12/07 31/12/06 Change (6 months) Interest paid on bank overdrafts 3, ,328 Interest payable to the Foundation on balance of correspondence account Foreign exchange losses Other finance expenses Total 3,727 1,257 2,470 The finance expense includes the interest cost for discounting of severance pay, which represents the cost of liabilities deriving from the passing of time. The item includes 98 thousand concerning related-party transactions ( 37 thousand as at 31 December 2006). For further details, see note 42 on these transactions.

217 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER ) Valuations of financial assets VALUATION OF FINANCIAL ASSETS ( 000) 31/12/07 31/12/06 Change (6 months) Italian System for Business SpA - -5,692 5,692 Eurofairs International Consultoria e Partipações Ltda Rassegne SpA ,128 4,348 Sifa Spa - -3,672 3,672 Eurostands SpA Edizioni Fiera Milano SpA -1, ,307 Fiera Milano Tech SpA -4, ,538 TL.TI Expo SpA Total -6,717-14,869 8,152 This item, at a negative 6,717 thousand (a negative 14,869 thousand at 31 December 2006), includes impairment adjustments as mentioned in relation to Investments in other companies (see the related section). 40) Income tax Income tax for the year amounted to 2,053 thousand (a negative 6,729 thousand as at 31 December 2006), subdivided as follows: INCOME TAX ( 000) 31/12/07 31/12/06 Change (6 months) Current income tax -1, ,357 Deferred income tax 3,410-6,729 10,139 Total 2,053-6,729 8,782 An analysis of current taxes as at 31 December 2007 is shown below: CURRENT INCOME TAX ( 000) 31/12/07 Current income tax (IRAP) 412 Income from tax consolidation -1,769 Total -1,357 Beginning with the 2007 financial year, Fiera Milano SpA, as the consolidating entity, and all Italian subsidiaries (the consolidated companies) with the exception of TL.TI Expo SpA opted for the Italian tax consolidation procedure for corporate income taxes (IRES). For the financial year, Fiera Milano SpA and a number of its subsidiaries exercised the option to take part in the tax consolidation of the Fiera Milano Foundation, but following the change in the financial year of Fiera Milano SpA and all its subsidiaries, participation in this process was discontinued in the financial year ended 31 December 2006.

218 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments 217 Consolidated fiscal gains reflect: (i) the effects of the offsets made between the taxable income of certain subsidiaries and the tax losses of Fiera Milano SpA as at 31 December 2007 (in the amount of 1,356 thousand); (ii) the reduction in the tax consolidation provision in relation to the residual repayment obligations to the Foundation (in the amount of 392 thousand); and (iii) the benefit resulting from the detaxation of dividends and other minor transactions ( 21 thousand). Deferred taxes amounted to 3,410 thousand, representing the net balance between deferred tax assets (a negative 1,655 thousand) and liabilities ( 1,755 thousand). Deferred tax assets were mainly due to corporate income tax (IRES) on tax losses for the year. The allocation to deferred tax assets related to the tax losses is only done when it is reasonably certain that taxable income will be earned to absorb them within the timeframe in which they can be maintained according to fiscal legislation, taking account of the tax consolidation process and, therefore, the expected earnings not only of Fiera Milano, but of the rest of the Group, as well. In accordance with prevailing legislation at the time, the Company believes that there are financially significant reasons to renew the tax consolidation process through to its natural expiration. Deferred tax liabilities essentially reflect the effects of accelerated depreciation, whilst also reflecting the effects of non-recognition of depreciation and amortisation of assets with an indefinite life in compliance with the IFRSs. Both deferred tax assets and liabilities were affected by the change in tax rate as compared with the allocations in previous years. Deferred tax assets and deferred tax liabilities, subdivided in category, are detailed as follows: DEFERRED INCOME TAX ( 000) Posted to Income Statement Tax rate 31/12/06 Provisions Uses adjustment 31/12/07 Deferred tax assets Excess deprec., amort, and write-downs 2, ,204 Provisions for risks and charges 756 1, ,062 Reportable tax losses 9,242 3,417-4, ,365 Other temporary differences Total 12,850 5,410-5,693-1,371 11,196 Deferred tax liabilities Amortisation of goodwill and others 6,201 2, ,024 Other temporary differences Total 6,314 2, ,069

219 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER RECONCILIATION BETWEEN THEORETICAL AND EFFECTIVE CORPORATE INCOME TAX (IRES) (Amounts in 000) Profit (loss) before income tax -18,744 Statutory rate applicable for corporate income tax (IRES) 33% Theoretical IRES (corporate income tax) -6,186 Differences between theoretical and effective taxes: Effect of neutralisation from first-time adoption of IAS 61 Non-deductible operating costs 414 Non-deductible write-downs of assets 2,217 Non-deductible tax losses of the incorporated company Italian System for Business SpA 318 Change in tax rate on deferred taxes 667 Reversal of deferred tax assets on past tax losses 4,504 Share of deductible capital losses -65 Use of provisions for risks -807 Other 397 Effective IRES (corporate income tax) 1,520 RECONCILIATION BETWEEN THEORETICAL AND EFFECTIVE CORPORATE INCOME TAX (IRAP) (Amounts in 000) Net operating profit (loss) -12,667 Labour costs 30,489 Consolidated taxable base for purposes of IRAP 17,822 Statutory rate applicable for corporate income tax (IRAP) 4.25% Theoretical IRAP (corporate income tax) 757 Differences between theoretical and effective taxes: Non-taxable operating revenues -28 Tax wedge effect -47 Non-deductible amortisation and depreciation 21 Non-deductible costs 39 Uses of provisions for risks -104 Change in tax rate on deferred taxes -20 Other -85 Effective IRAP (corporate income tax) 533 PROFIT (LOSS) FOR THE YEAR The loss for the financial year ended 31 December 2007 amounted to 20,797 thousand, compared with the loss of 21,980 thousand at 31 December ) Earnings (Loss) per share The base earnings per share was a negative euro, compared with the base earnings per share of a negative at 31 December 2006, and was determined by dividing the result for the year by the weighted average number of shares in Fiera Milano SpA in circulation each year, taking the exercise of options into account.

220 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments 219 EARNINGS (LOSS) PER SHARE 31/12/07 31/12/06 Earnings (Loss) ( 000) -20,797-21,980 Average number of shares outstanding ( 000) 33,868 33,696 Basic Earnings (Loss) per share as originally reported ( ) Basic Earnings (Loss) per share recalculated to reflect dilutive effect of issue of rights ( ) The value used as the numerator to calculate base and diluted result per share was a negative 20,797 thousand during the year under review (- 21,980 thousand at 31 December 2006). The weighted average number of ordinary shares used to calculate base and diluted result per share, with reconciliation of the two figures, is shown in the following table: ( 000) 31/12/07 31/12/06 Weighted average number for calculation of Earnings (Loss) per share 33,868 33,696 + number of potential shares issued without consideration Weighted average number for calculation of diluted Earnings (Loss) per share 33,790 33,701 42) Related-party transactions Fiera Milano SpA settled transactions with related parties mainly and recurrently, with the ultimate parent entity, the Foundation, and with subsidiary companies. During the financial year ended 31 December 2007, no abnormal or unusual transactions were executed. As part of the actions taken concerning corporate governance, Fiera Milano SpA has adopted a procedure for transactions with related parties, as indicated in the chapter on Corporate Governance of the Management Report, to which reference is made. In the balance sheet, income statement and cash flow statement, the amounts of related-party positions or transactions, if significant, have been shown separately from the items concerned. Fiera Milano SpA, in view of the total amount of balance sheet and income statement items, has decided to establish 2 million as the threshold of importance above which such amounts must be separately indicated in the Balance Sheet and 1 million as the threshold for amounts in the Income Statement. Detailed information on the transactions conducted is provided below, subdividing them into Transactions with the Foundation and Transactions with subsidiaries.

221 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Transactions with the Foundation Recurrent transactions with the ultimate parent entity are summarised below: Property lease contracts with Fiera Milano SpA On 18 January 2003, Fiera Milano SpA, exercising the option envisaged by the contract originally signed on 1 January 2000, stipulated a lease contract with the Foundation specifically concerning the nascent out-oftown Rho-Pero exhibition centre. The rent was fixed as being 6% of the investment made by the Foundation to create the out-of-town exhibition centre (Polo Fieristico Esterno). In July 2005, Fiera Milano SpA and the ultimate parent entity the Foundation reached an agreement that redefined the percentage for establishing the rent of the new Rho-Pero site for the first four years, including , and fixing the overall investment on which the rent was to be calculated at 755 million. Specifically, as compared with the full rate of 6%, it was agreed to apply a rate of 5% for FY 2005/2006 and to increase this rate by 0.25% per year until the full 6% was reached. The same agreement also established the amount of rental for the portion of the downtown site that has been retained, i.e million. As per the provisions of the contract signed on 18 January 2003, the lease contract for both exhibition sites has a 9-year duration, starting on 1 January 2006, the date when Fiera Milano SpA officially took on the Rho- Pero exhibition site. Group VAT payments Taking advantage of the faculty provided by Italian Presidential Decree 633/72, as from 1 January 2002, Fiera Milano SpA has accepted the procedure, managed by its ultimate parent entity, the Foundation, for group settlement of VAT obligations. This mechanism makes performance of VAT obligations easier without causing any additional costs for Fiera Milano SpA. Group tax consolidation For financial year , Fiera Milano SpA and a number of its subsidiaries had exercised the option to take part in the tax consolidation process with the ultimate parent entity, the Foundation. Following the change in financial year by Fiera Milano and all of its subsidiaries, participation in this process was discontinued. Nonetheless, there remain certain contractual obligations to the Foundation, which are referenced in the various items of the financial statements.

222 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments 221 Service supply contract Fiera Milano SpA has stipulated an annual contract with the Foundation for reciprocal supply of services, as appropriate or necessary for performance of the parties respective activities. The contract envisages provision of two types of services, i.e. i) general, forming part of the overall business of the party supplying them and provided to the other party on an ongoing, systematic basis, and ii) specific services, i.e. provided upon request and concerning specific activities to be agreed on a case-by-case basis between the customer and supplier parties, also on the basis of specific bids/estimates. Trademark license contracts Fiera Milano SpA has a contract with the Foundation for a license permitting exclusive use of the Fiera Milano trademark, owned by the Foundation. The contract lasts until 31 December 2017 and is automatically renewable for fifteen years. By way of payment for the aforementioned license, Fiera Milano pays the Foundation a token annual fee of 1 euro. Support in the launch of new exhibitions An agreement has been defined in relation to the new exhibitions launched in 2007 for which the Foundation owns the trademarks, including Build Up Expo and Tuttofood in particular. Based on this agreement, the Foundation has decided to pay a portion of the costs that Fiera Milano SpA incurred to launch and start up these new initiatives. The amount paid was 3 million. Transactions with subsidiaries Fiera Milano SpA has executed transactions with related parties of a commercial nature, settled at going market rates, concerning organisation and management of exhibitions and other events. Fiera Milano SpA provides administrative services to some subsidiaries in order to optimise utilisation of resources and professional skills. Fiera Milano SpA also provides communication services to subsidiaries, also in order to achieve appropriate harmonisation of Group image. Transactions with subsidiaries are settled at going market rates. Beginning with the 2007 financial year, Fiera Milano SpA, as the consolidating entity, and all Italian subsidiaries (the consolidated companies) with the exception of TL.TI Expo SpA opted for the Italian tax consolidation procedure for corporate income taxes (IRES). As required by law, the option has a duration of three financial years ( ) and is irrevocable. The tax consolidation process will provide Fiera Milano with definite financial benefits, including the possibility

223 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER to use tax losses immediately when recognised as an offset to the profits of the consolidated companies, thereby realising an immediate tax saving. Tax consolidation also makes it possible to transform corporate income tax into immediately useable financial resources, which would otherwise have been due on the taxable income of a number of subsidiaries in the absence of the tax consolidation process. Legal relations between the companies involved in the tax consolidation process are governed by rules that also call for standardised procedures for properly adhering to fiscal obligations and to the related responsibilities of the participating companies. Fiera Food System SpA On 18 July 2006, Fiera Milano stipulated a contract with Fiera Food System for rental of the catering company branch comprising the catering outlets of the two exhibition sites. The contract is valid until 31 October Fiera Food System pays rent to Fiera Milano in accordance with a mechanism established by contract. Edizioni Fiera Milano SpA Fiera Milano has stipulated a contract with Edizioni Fiera Milano SpA by which it has appointed the subsidiary to manage advertising relating to the billboard facilities owned by Fiera Milano SpA. The contract has been renewed until 31 December 2008 and may not be further tacitly renewed upon expiration. The advertising revenues acquired by the subsidiary, net of normal commissions, is split 65/35 between the party granting the concession Fiera Milano SpA and the concessionaire Edizioni Fiera Milano, respectively. Fiera Milano Tech SpA Fiera Milano has subscribed a 2 million bond loan issued by the company in order to gather the funds necessary to acquire the exhibition company branch. The issue is a 10-year non-convertible bond loan, with straight-line 6-monthly repayments at the prevailing ECB benchmark rate plus points. Nolostand SpA Fiera Milano has subscribed a 7.5 million bond loan issued by the company in order to gather the funds necessary to acquire the standard stands company branch. The issue is a 10-year non-convertible bond loan, with straight-line 6-monthly repayments at the prevailing ECB benchmark rate plus points. Fiera Milano SpA and the company have also altered the maturity of this loan, while also temporarily suspending the redemption of principal for four years, which totals 3 million. As such, the maturity has been extended from 31 December 2012 to 31 December 2016.

224 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments 223 The main transactions with related parties are summarised in the table below, along with the specification that the Group has decided to set a significance threshold of 100 thousand for these items, which is based on the cumulative amount of the transactions executed during the year by each party. BALANCE SHEET AND INCOME STATEMENT CAPTIONS WITH RELATED PARTIES AS UP TO 31/12/07 ( 000) Increases in Increases in Other non- Non-current Trade Payroll and property, other current trade and Current and Down Other emplyee Other plant & intangible financial other financial other Inven- payments current Costs of Costs for Rental benefit operating Other Finance Finance equipment assets assets receivables assets receivab. tories received liabilities Revenues materials services expenses costs costs revenues income expense Utlimate parent entity: Fondazione Fiera Milano 12,618 1, ,699 1,918 7,573 54, , Subsidiary companies: Edizioni Fiera Milano Fiera Food System , Expopage Nolostand 39 5, , , Fiera Milano International 4,615 20, , Fiera Milano Congressi 3, , S.I.F.A , Fiera Milano Tech 1,000 2,112 1, , Rassegne , Expo CTS 432 1, , TL.TI Expo , Associated companies: Sviluppo Sistema Fiera Total related parties ,625 12,618 3,201 11, ,972 6,502 70, ,027 54, ,443 1, Reported totals - - 6,625 12,619 47,601 30,328 1,686 38,186 23, , ,212 58,000 30,489 4,068 8,142 4,367 3,727 Related parties/ Reported totals - % % 100% 7% 40% 1% 60% 28% 42% 11% 20% 94% 0,11% 17% 79% 24% 3% We point out that, for the items indicated in the first two columns, their incidence on the total balance-sheet item is not indicated because the amounts in the table refer to investments made during the financial year whereas balance-sheet items refer to cumulative value as at financial year-end date.

225 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER RELATED-PARTY CASH FLOW ( 000) 31/12/07 31/12/06 Cash flow from operating activities Revenues and income 77,308 23,229 Costs and expenses (72,483) (36,652) Interest receivable 1,031 9,720 Interest payable (98) (37) Change in inventories 14 (4) Change in trade and other receivables 4,826 (6,982) Change in down payments received ,566 Change in current financial assets/liabilities (6,207) (4,681) Change in trade and other payables (3,987) 229 Total 1,397 (2,612) Cash flow from investing activities Investments in non-current assets: Tangible and intangible (76) (1,467) Other non-current assets - - Total (76) (1,467) Cash flow from financing activities Change in non-current financial assets/liabilities 200 4,000 Total 200 4,000 Cash flow in period 1,521 (79) The incidence of cash flows with related Parties is shown in the following table: INCIDENCE OF CASH FLOWS WITH RELATED PARTIES ( 000) Cash flow from Cash flow from Cash flow from operating activities investing activities financing activities FY ended on : Total 14,131 (14,803) (2,020) Related parties 1,397 (76) 200 FY ended on : Total 21,660 (9,823) (7,290) Related parties (2,612) (1,467) 4,000

226 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments 225 OTHER INFORMATION Significant events after year-end On 16 January 2008, Fiera Milano SpA and Deutsche Messe AG (owner of the Hannover exhibition site) began a joint venture for the development of exhibition activities in four markets outside Europe. On 14 January 2008, Fiera Milano SpA and the Reed Group signed an agreement authorising the early termination of the joint venture in Fiera Milano International SpA. During the early part of 2008, the buy-back process continued, and the direct parent company purchased 291,450 treasury shares at an average price of 4.23, for a total of some 1,234 thousand. As of the date of this report, Fiera Milano SpA now holds, either directly or indirectly, a total of 725,393 treasury shares, which equals 2.14% of share capital. Disclosure pursuant to Article 149-duodecies of the CONSOB regulation for issuers The table below shows the fees paid during 2007 for services provided by the independent auditors. ( 000) Service provider Fees - FY 2007 Auditing PricewaterhouseCoopers 92 Other services (*) PricewaterhouseCoopers 37 Totale 129 *Agreed upon procedures and other services Compensation of the members of Corporate Management and Control Bodies, General Directors and Managers and Managers with Strategic Responsibilities, for the financial year ended 31 December 2007 Managers holding strategic responsibilities, i.e. those having the power and direct or indirect responsibility for the planning, management and control of Company activities, have been identified as being the CEO, General Manager and Deputy General Manager. The total remuneration of this category of managers for the financial year closed at 31 December 2007 amounted to 1,441 thousand and substantially consisted of short-term benefits. The fees in the table are shown according to accrual accounting principles. Therefore, as per the indications of CONSOB in its Issuers Regulation and as per decision no of 27 July 2006, the column: - emoluments for office, shows (i) emoluments as approved by the shareholder meeting or pursuant to Article 2389, paragraph 3, of the Italian Civil Code, even if not yet paid, (ii) profit sharing, and (iii) attendance tokens; - non-monetary benefits shows the fringe benefits; - nonuses and other incentives shows portions of remuneration that accrue on a one-off basis; - other compensation: shows (i) emoluments for offices held in subsidiaries and (ii) employee compensation (gross of social security charges and taxes payable by the employee and excluding mandatory collective social security charges paid by the company and severance indemnity provision).

227 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER ( ) Period Emolufor which ments Non- Bonuses office has Term for monetary and other Other Full name Office held been held of office office benefit incentives compens. Michele Perini Chairman 01/01-31/12 April ,000 Member of Supervisory Committee 01/01-31/12 April ,000 Claudio Artusi Chief Executive Officer 01/01-31/12 April ,000 13, ,880 Carlo Edoardo Valli Senior Vice President 01/01-31/12 April ,000 Member of Internal Audit Committee 01/01-31/12 April ,000 Member of Compensation Committee 01/01-31/12 April ,000 Carlo Sangalli Vice President 01/01-31/12 April ,650 Member of Compensation Committee 01/01-31/12 April ,000 Romeo Robiglio Director 01/01-31/12 April ,250 Member of Internal Audit Committee 01/01-31/12 April ,000 Member of Supervisory Committee 01/01-31/12 April ,000 Giovanni Deodato Director 01/01-31/12 April ,000 Member of Internal Audit Committee 01/01-31/12 April ,000 Member of Supervisory Committee 01/01-10/08-9,153 Member of Compensation Committee 10/08-31/12 April ,847 Renato Borghi Director 01/01-31/12 April ,300 Member of Compensation Committee 01/01-31/12 April ,000 Member of Supervisory Committee 01/01-31/12 April ,000 Fabrizio Viola Director 01/01-31/12 April ,200 Member of Internal Audit Committee 01/01-31/12 April ,000 Paolo Galassi Director 01/01-08/05-15,125 13,741 Francesco Milone* Director 25/05-31/12 April ,180 25,724 Member of Supervisory Committee 10/08-31/12 April ,081 Damiano Zazzeron* Pier A. Chevallard Alfredo Mariotti Chairman of the Statutory Auditors Committee 01/01-31/12 April ,000 1,511 Standing statutory auditor 01/01-31/12 April ,000 Standing statutory auditor 01/01-31/12 April ,000 8,127 Enrico Pazzali General Manager 01/01-31/12-16, ,904 Managers with strategic responsibilities 01/01-31/12-16, ,299 *The amounts indicated include the percentage paid to the relevant profession's pension fund in addition to the emolument decided upon by the shareholders meeting Rho (Milan), 26 March 2008 On behalf of the Board of Directors Michele Perini Chairman

228 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments 227 Attachment No. 1 LIST OF EQUITY INVESTMENTS IN SUBSIDIARY COMPANIES AT 31 DECEMBER 2007 (art. 2427, para. 1, no.5 of the Italian Civil Code). Regi- Company name stered Share Equity Net profit/(loss) % Carrying office capital Total Pro-quota Total Pro-quota held value Subsidiaries: Edizioni Fiera Milano SpA Milan 2,803 2,936 2, % 4,194 Fiera Food System SpA Milan % 333 Nolostand SpA Milan 7,500 4,479 4, % 7,765 Expopage SpA Milan 2,320 1,908 1, % 1,839 Fiera Milano Congressi SpA Milan 200 1,795 1,795 1,239 1, % 8,500 Fiera Milano International SpA Milan 728 1, % 37,348 Sifa SpA Milan 1,000 1,152 1, % - Fiera Milano Tech SpA Milan 3,000 2,475 2,475-4,065-4, % 4,616 Rassegne SpA Milan 500 1,105 1, % 1,105 Expo CTS SpA Milan 1,000 3,302 1,684 1, % 9,863 TL.TI. Expo SpA Padua 1,000 5, % 553 Eurofairs International S. Paolo % - Consultoria e Participações Brazil Ltda. Total 76,116

229 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Attachment No. 2 SUMMARY OF KEY FIGURES OF LAST FINANCIAL STATEMENTS OF CONSOLIDATED SUBSIDIARY AND ASSOCIATED COMPANIES (ART OF ITALIAN CIVIL CODE) ITALIAN GAAPS: ( 000) Edizioni Fiera Milano 31/12/07 31/12/06 Revenues from sales and services 9,906 2,946 Net profit (loss) (628) (641) Equity 2,936 1,064 Net financial position (cash) 1,635 1,352 Fiera Food System 31/12/07 31/12/06 Revenues from sales and services 18,874 7,516 Net profit (loss) Equity Net financial position (cash) (1,337) (1,269) Expopage 31/12/07 31/12/06 Revenues from sales and services 4,344 2,203 Net profit (loss) (499) (35) Equity 1,908 2,407 Net financial position (cash) (938) (1,292) Nolostand 31/12/07 31/12/06 Revenues from sales and services 29,293 13,355 Net profit (loss) (736) (2,014) Equity 4,479 5,215 Net financial position (cash) 9,166 12,261 Eurostands* 31/12/07 31/12/06 Revenues from sales and services - 17,137 Net profit (loss) - (2,279) Equity - 3,041 Net financial position (cash) - 16,707 Fiera Milano International 31/12/07 31/12/06 Revenues from sales and services 58,744 27,322 Net profit (loss) Equity 1,235 1,177 Net financial position (cash) (19,254) (13,198) Fiera Milano Congressi 31/12/07 31/12/06 Revenues from sales and services 24,968 8,709 Net profit (loss) 1, Equity 1, Net financial position (cash) 6,986 7,613 S.I.F.A. 31/12/07 31/12/06 Revenues from sales and services 4,065 - Net profit (loss) 379 (3,032) Equity 1, Net financial position (cash) (1,389) (3,207) continued

230 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Explanatory and supplementary notes to statutory financial statements and Attachments 229 Fiera Milano Tech 31/12/07 31/12/06 Revenues from sales and services 14, Net profit (loss) (4,065) (1,282) Equity 2,475 2,039 Net financial position (cash) 5,001 4,154 Rassegne 31/12/07 31/12/06 Revenues from sales and services 5,652 3,566 Net profit (loss) (395) (4,091) Equity 1,105 (385) Net financial position (cash) (840) (91) Italian System for Business** 31/12/07 31/12/06 Revenues from sales and services Net profit (loss) - (5,827) Equity - (4,696) Net financial position (cash) - (145) Expo CTS SpA 31/12/07 31/12/06 Revenues from sales and services 46,484 7,986 Net profit (loss) 1,467 (2,093) Equity 3, Net financial position (cash) (3,771) 4,622 TL.TI Expo SpA 31/12/07 31/12/06 Revenues from sales and services 4, Net profit (loss) (891) (639) Equity 5,267 6,158 Net financial position (cash) Eurofairs International Consultoria e Partipaçoes Ltda 31/12/07 31/12/06 (Amounts in R$ 000) Revenues from sales and services - - Net profit (loss) (28) (93) Equity Net financial position (cash) 855 (867) *Sold on 22 March 2007 **Merger by incorporation in Fiera Milano SpA on 18 May 2007

231 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Declaration concerning the statutory financial statements pursuant to article 81-ter of Consob Regulation of 14 May 1999 as amended 1. The undersigned, Claudio Artusi, as Chief Executive Officer, and Bruno Boffo, as manager charged with preparing the Fiera Milano SpA s financial reports, in consideration of the provisions of Article 154-bis, paragraphs 3 and 4, of Italian legislative decree no. 58 of 24 February 1998, hereby attest to: - the appropriateness, given the characteristics of the business, and - the actual application of the administrative and accounting procedures followed for the preparation of the statutory financial statements for financial year as at 31 December The assessment of the appropriateness of the administrative and accounting procedures followed in preparing the statutory financial statements as at 31 December 2007 was based on a process defined by Fiera Milano SpA in accordance with the Internal Control Integrated Framework issued by the Treadway Commission s Committee of Sponsoring Organizations, which is the generally accepted international standard. 3. The parties further declare that the financial statements as at 31 December 2007: - correspond to the corporate books and related accounting records; - have been prepared in accordance with the International Accounting Standards (IASs) and International Financial Reporting Standards (IFRSs) endorsed by the European Union, as well as with the implementing measures issued in accordance with Article 9 of Italian legislative decree 38/2005, and thus provide a true and accurate account of the financial performance and standing of the Issuer and its group of consolidated companies. 26 March 2008 Signed Chief Executive Officer Claudio Artusi Signed Manager charged with preparing the company s financial reports Bruno Boffo

232

233

234 R E P O R T O F S TAT U T O R Y A U D I T O R S C O M M I T T E E T O S H A R E H O L D E R S M E E T I N G P U R S U A N T T O A R T I C L E O F I TA L I A N C I V I L C O D E A N D A R T I C L E O F I TA L I A N L E G I S L AT I V E D E C R E E N O. 5 8 /

235 Fiera Milano SpA Report of Statutory Auditors Committee FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER To the Shareholders, With this report the Statutory Auditors Committee reports on its supervisory activity and on all else required of it by law, in compliance with the regulations and recommendations governing listed companies, i.e. specifically: Article 2429 of the Italian Civil Code, Article 153 of Italian Legislative Decree 58/1998, the standards of conduct issued by the Italian national councils of chartered and registered accountants, and CONSOB (Italian securities & exchange commission) recommendations concerning corporate controls and Statutory Auditors activity, i.e. its Memoranda nos. DAC/RM/ of 20 February 1997, DEM/ of 6 April 2001 (the structure of which is followed hereunder), and DEM/ of 4 April 2003, its resolution no of 5 October 2005 and its Memorandum no. DEM/ of 7 April The Company s separate financial statements as at 31 December 2007 show a loss of 20,797,320, while the consolidated financial statements, also prepared according to IAS/IFRS international accounting standards, show a loss of 16,685 thousand. 1. Considerations on the transactions of greatest business, financial and capital significance and on their compliance with the law and Company by-laws. In accordance with Article 150, paragraph 1 of Italian Legislative Decree 58/1998, the Directors duly reported to the Statutory Auditors Committee on the activities performed and on the transactions of greatest business, financial and capital significance conducted by the Company or its subsidiaries. With regard to these activities, we believe that the actions resolved and implemented comply with the law and Company by-laws, have not been obviously imprudent or risky or given rise to a potential conflict of interests or conflicted with the resolutions passed by the Shareholder s Meeting or been such as to jeopardise the integrity of corporate assets. Among the most important transactions, we highlight the following: - On 22 March 2007, Fiera Milano SpA sold the entire equity interest owned in Eurostands SpA, accounting for 51% of the latter s share capital, to the company Elsifin Srl. At the same time, Eurostands SpA repaid to Fiera Milano SpA the bond loan that it had subscribed; - On 1 July 2007, the subsidiary Fiera Milano Tech SpA acquired a company branch relating to the trade shows BIAS (an international biennial exhibition of automation, instrumentation, microelectronics, and ICT for industry) and Fluidtrans Compomac (an international biennial exhibition of fluid power, power and motion transmission, drive, control equipment and industrial design). At the same time the subsidiary Edizioni Fiera Milano SpA acquired a company branch consisting of seven technical magazines and of a website. These deals enabled the Fiera Milano Group to increase its share of the exhibition calendar and to strengthen its position in technical publishing; - Effective 21 September 2007, the Rassegne subsidiary sold to Made Eventi Srl, the organiser of the Made Expo event, the company branch responsible for organising and holding the Build Up Expo exhibition; - On 23 April 2007, Fiera Milano SpA purchased from the ANIE (the Italian federation of electrical and electronic engineering companies) the remaining 49% interest in the company Fiera Milano Tech SpA. By so doing, Fiera Milano now has 100% ownership of its subsidiary. On 23 October 2007, Fiera Milano Tech purchased the residual company branch concerning exhibition organisation from the other subsidiary Rassegne SpA;

236 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Report of Statutory Auditors Committee After year-end, on 14 January 2008, the Fiera Milano Group and the Reed Group signed an agreement ratifying early dissolution of the joint venture in Fiera Milano International SpA. Following early dissolution of the joint venture, the exhibitions belonging to the Reed Group (Mostra Convegno Expocomfort, Visual Communication, and Infosecurity), currently managed by Fiera Milano International in the form of rental of a company branch, have returned to management by the owner; - After year-end, on 16 January 2008, as part of the Group s internationalisation process, Fiera Milano SpA and Deutsche Messe AG (owner of the Hannover exhibition site) finalised a joint venture that envisages development of the two partners exhibition business in four non-european markets, starting with China. Fiera Milano acquired 49% of HM Global Germany GmbH ( HM Global ) from Deutsche Messe AG. 2. Possible existence of abnormal and/or unusual transactions, including intercompany transactions or those with related parties: 2.1 With related parties, or those able to influence business, capital and financial status in a significant manner: No abnormal and/or unusual transactions were undertaken with related parties. 2.2 With third parties or with group companies: No abnormal and/or unusual transactions were undertaken with third parties or with group companies. Moreover: 2.3 Intercompany and related-party transactions of an ordinary nature: As far as ordinary intercompany transactions are concerned, which mainly consisted of provision of administrative and commercial services, these were undertaken according to normal criteria and at normal market terms and conditions so as to optimise utilisation of resources and professional skills. In addition, intercompany financing operations are in place, also via subscription of bond loans issued by some subsidiary companies. These too were arranged at normal market terms and conditions. As regards detailed information on transactions, these are described in specific sections in the explanatory notes to the consolidated Group accounts and to the Parent Company s accounts. These sections show the balance sheet and income statement effects of related-party transactions respectively at Group and Parent Company level. The Statutory Auditors Committee judges such effects to be consistent and in the interest of the Company and of the Group. Intercompany transactions were also judged by the Statutory Auditors Committee to be consistent and in the interest of the Company and of the Group. The Statutory Auditors Committee also judges intercompany transactions to be consistent and in the interest of the Company and of the Group. 3. Evaluation of the adequacy of the information provided, in the directors management report, on abnormal and/or unusual transactions, including intercompany and related-party transactions The Statutory Auditors Committee believes the information provided by Directors in the management report on intercompany and related-party transactions to be adequate. 4. Observations and proposals concerning criticisms and highlighting of particular disclosures contained in the independent auditor s report. On today s date the independent auditor issued its report on separate and consolidated year-end accounts

237 Fiera Milano SpA Report of Statutory Auditors Committee FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER without any criticisms or reservations. The reports highlight, merely for disclosure purposes, that, in FY2007 and the previous financial year, losses were made, the reasons for which have been given by directors in the management report, and that, following modification of the financial year-end date, the income statement as at 31 December 2006 referred to a 6-month financial year, with consequent effects on the comparability of data. 5. Indication of any presentation of denouncements under Article 2408 of the Italian Civil Code, of any initiatives undertaken and of their outcome. The Statutory Auditors Committee is not aware of any denouncements under Article 2408 of the Italian Civil Code. 6. Indication of any presentation of official complaints, of any initiatives undertaken and of their outcome. The Statutory Auditors Committee is not aware of any official complaints, initiatives, or other facts to be mentioned to the Shareholders Meeting. 7. Indication of any conferment on the independent auditor of any further assignments and of related costs. During the financial year ended on 31 December 2007 the Company incurred costs for fees concerning further assignments entrusted to PricewaterhouseCoopers SpA regarding agreed-upon procedures for quarterly interim consolidated financial statements for a fee of 21,300 and support activities for verification of the contents of the Group administrative manual for a fee of 15, Indication of any conferment of assignments on parties linked to the independent auditor by ongoing relationships, and related costs. During the course of the financial year ended on 31 December 2007, the Company did not bear any costs of fees relating to assignments conferred on parties linked to the independent auditor by ongoing relationships. Taking the foregoing and the indication given in the previous point into account, based on an examination of the nature and scope of the services rendered and the regulatory and professional requirements governing auditing activities, we believe that, during the course of the financial year ended on 31 December 2007, PricewaterhouseCoopers SpA maintained an independent and objective position vis-à-vis Fiera Milano SpA and the Fiera Milano Group. 9. Indication of the existence of opinions issued pursuant to law during the course of the financial year. In accordance with the provisions of Article 159, paragraph 4 of Italian Legislative Decree 58/1998, as amended by Legislative Decree 303/2006, the Statutory Auditors Committee submitted a reasoned proposal to the Ordinary Shareholders Meeting held on 27 April 27 which took note of it for related and consequent decision - concerning extension of the independent auditing assignment conferred on PricewaterhouseCoopers SpA for the financial years ending on 31 December 2008, 2009, 2010, 2011, 2012 and 2013, and consequent adjustment of related fees. The Statutory Auditors Committee also issued a favourable opinion pursuant to Article 22.1 of the Company

238 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Report of Statutory Auditors Committee 237 by-laws on appointment of the Manager charged with preparing the company s financial reports as required by Article 154-bis of Italian Legislative Decree no. 58/1998 by the Board of Directors at its meeting held on 26 June Indication of the frequency and number of meetings of the Board of Directors and of the Statutory Auditors Committee. During the financial year, there were 19 Board meetings, which were always attended by the Committee. The Committee also attended the Shareholders Meetings held on 10 January 2007, 27 April 2007, and 26 June There were 11 meetings of the Statutory Auditors Committee. In addition, the Committee s President attended, either directly or via a statutory auditor designated to represent him, 11 out of the 13 meetings of the Internal Audit & Control Committee and 5 meetings of the Compensation Committee, since he was asked to do so. 11.Observations on compliance with standards of proper administration. The Statutory Auditors Committee informed itself about and oversaw observance of standards of proper administration, for matters within its sphere of responsibility, and has no criticisms to make in this respect. 12.Observations on adequacy of the organisational structure. The organisational structure is thus substantially appropriate to the corporate entity s size, complexity, and importance. 13.Observations on the adequacy of the internal audit & control system, and in particular on the activity performed by internal auditors, and highlighting of any remedial actions taken and/or those yet to be taken. The Committee has assessed and overseen the adequacy of the internal auditing and control system by obtaining information from the heads of the respective functions, analysing corporate documents, analysing the work done by the independent auditors and by the Internal Auditor, and by the President s attendance of meetings of the Internal Audit & Control Committee. The internal auditing & control system has been adjusted consistently with changes concerning both organisation and the effect of regulations for listed companies and has been updated via development of new operating processes. Given all this, the Statutory Auditors Committee believes that the internal control & audit system is able to support orderly performance of Company operations. 14.Observations on the information/accounting system s adequacy and on its reliability in terms of representing operating events. The Company s administrative/accounting system is substantially adequate for the business organisation in terms of both equipment provided and availability of staff possessing specific capabilities. Based on this it is possible to draw the conclusion of good reliability and of the ability to represent operating events faithfully.

239 Fiera Milano SpA Report of Statutory Auditors Committee FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER Observations on the adequacy of instructions given by the Company to its subsidiaries pursuant to Article 114, paragraph 2, of Italian Legislative Decree 58/1998. The Company has adequately provided the instructions necessary to enable subsidiaries to provide all information required to comply with disclosure obligations envisaged by law. Subsidiaries provide the information requested in a timely manner. 16.Observations on any important aspects emerging during meetings with independent auditors pursuant to Article 150, paragraph 3, of Italian Legislative Decree 58/1998. Pursuant to Article 150, paragraph 3, of Italian Legislative Decree 58/1998, we periodically met the independent auditor to verify the reliability of the accounting & administration system and of the internal auditing and control system. No significant aspects emerged requiring specific in-depth analyses, nor were we told of the existence of reprehensible facts. 17.Indication of the company s adherence, if any, to corporate governance codes drawn up by companies managing regulated markets or by trade associates, to which the Company publicly states its adherence The Company has adhered to the Corporate Governance Code approved by the Committee for Corporate Governance of Listed Companies [Comitato per la Corporate Governance delle Società Quotate] in March 2006 and promoted by Borsa Italiana SpA. The Statutory Auditors Committee has tangibly found adherence to the Code s corporate governance rules, the various aspects of which form the subject of the Corporate Governance Report put at your disposal by the Board of Directors. Reference should be made to the Report for better and more complete information in this respect. We point out that the Company s Board of Directors currently in office includes among its members four directors who meet the requirements of independence as defined by the Corporate Governance Code of Listed Companies. The Statutory Auditors Committee has checked the correct application of the standards and procedures adopted by the Board to assess the independence of its members and the President of the Statutory Auditors Committee, together with the Chairman of the Board of Directors, has attested existence of the independence requisite based on declarations for this purpose issued pursuant to the Italian stock Exchange Regulation. During FY2007 the Statutory Auditors Committee also checked that its own members continued to meet independence requisites, as required by the Corporate Governance Code. 18.Final evaluations concerning the supervisory activity performed as well as regards any omissions, reprehensible facts or irregularities found during the course of such activity. The Committee believes that its supervisory activity, during which it found no reprehensible facts, omissions or irregularities, was meaningful and exhaustive. 19.Indication of any proposals to be submitted to the shareholders meeting pursuant to Article 153, paragraph 2, of Italian Legislative Decree 58/1998. The Statutory Auditors Committee has no observations to make pursuant to Article 153, paragraph 2, of Italian Legislative Decree 58/1998 on the draft year-end financial statements, their approval, or on matters

240 FIERA MILANO ANNUAL REPORT AS AT 31 DECEMBER 2007 Fiera Milano SpA Report of Statutory Auditors Committee 239 in its sphere of responsibility, and, similarly, has no comment to make on the proposed coverage of the financial year s loss. Based on the supervisory activity performed during the financial year, the Statutory Auditors Committee finds no reasons against approval of financial statements as at 31 December 2007 and of the proposed resolutions presented by the Board of Directors. The Statutory Auditors Committee Damiano Zazzeron Pier Andrea Chevallard Alfredo Mariotti Rho (Milan), 10 April 2008

241

242 I N D E P E N D E N T A U D I T O R S R E P O R T

243