Annual Report • Apr 29, 2015
Annual Report
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This document contains a true translation into English of the original report in Italian Relazione Finanziaria Annuale Esercizio 2014. However, for information about Fiera Milano Group reference should be made exclusively to the original report in Italian. The Italian version of the Relazione Finanziaria Annuale Esercizio 2014 shall prevail upon the English version.
Registered offices: Piazzale Carlo Magno, 1 - 20149 Milan, Italy Operational and administrative headquarters: Strada Statale del Sempione, 28 - 20017 Rho (Milan) Italy Share capital: Euro 42,147,437.00 fully paid up Companies Register, Tax code and VAT no. 13194800150 - Economic Administrative Register 1623812
Mission
It contributes to economic growth.
It promotes socio-economic improvement in the region in which it is based.
The Company's aims are:
to feature among the leading global companies in the exhibition sector
to offer companies a more effective business platform to raise awareness of their existence, instigate fruitful contacts and increase their business opportunities
Integrity, transparency, impartiality and correctness in executing its business and in all relationships of whatever type or nature.
Maximum focus on clients (organisers, exhibitors, visitors) ensuring a range of quality services that meet their needs and expectations.
The Company offers a combination of skills, attention to detail, responsibility, diligence, conscientiousness and exceptional preparation in all its business activities.
A search for innovative and original solutions, finding new potential approaches to any situation or problem and conceiving/generating original ideas.
Sharing of information and knowledge to enhance value and to validate professional identity while overcoming organisational restrictions.
The management of the Fiera Milano Group is based on a Corporate Social Responsibility plan that, whilst not official, is aimed at increasing sensitivity and transparency in the following areas: human resources, clients, and the environment.
An explicit undertaking to spread and reinforce safety in the workplace and the awareness of potential risks by using all the resources necessary for guaranteeing the health and safety of all those who work with Fiera Milano.
of which Euro18 million generated outside Italy.
BREAKDOWN OF REVENUES BY OPERATING SEGMENT (gross of inter-segment transactions)
Fiera Milano +80% FTSE Italia STAR index +108% FTSE Italia All-Share index +34%
FIERA MILANO SHARE PRICE PERFORMANCE RELATIVE TO THE MAIN INDICES (basis 02.01.2013 = 100)
Feb 2013 Mar 2013 Apr 2013 May 2013 Jun 2013 Jul 2013 Aug 2013 Sep 2013 Oct 2013 Nov 2013 Dec 2013 Jan 2013 Feb 2014 Mar 2014 Apr 2014 May 2014 Jun 2014 Jul 2014 Aug 2014 Sep 2014 Oct 2014 Nov 2014 Dec 2014 Jan 2015 Feb 2015 Mar 2015 Jan 2014
113 - of which 62 abroad
32,790 - of which10,360 abroad
EXHIBITION
60
SPACENet exhibition space occupied: 1,634,425 square metres of which414,300 square metres abroad
Total gross exhibition space: 388,000 square metres
345,000 square metres in the exhibition site
43,000 square metres in the exhibition site
807- of which 185 abroad
57%of total employees, 29%in middle management and 37%office staff
ENVIRONMENT Reduction in CO2 and
emissions between 2010 and 2014 ca. 10,500 tonnes per annum in the exhibition sites
MOBILITY
(underground/train) to reach the exhibition site
MANAGEMENTVisitor movements: more than 60% of visitors used public transport Occupancy rate: 2.2 occupants per car compared to an average of 1.2 occupants per car in the city of Milan
Employee movements: over 25%of employees in Italy regularly used public transport (underground/train) to get to work
| Letter to Stakeholders | 8 |
|---|---|
| Area of operations | 10 |
| A brief history of the Group | 12 |
| Business model | 14 |
| Group structure | 16 |
| Corporate bodies and Independent Auditor | 18 |
| Top management | 20 |
| Strategic guidelines | 22 |
| Notice of Convocation of the Ordinary Shareholders' Meeting | 24 |
| Board of Directors' Management Report | 28 |
| • Summary of results and significant events during the year | 28 |
| • Macroeconomic and reference sector background | 32 |
| • Economic and financial performance for the year ended 31 December 2014 | 36 |
| • Business performance by operating segment and by geographic area | 41 |
| • Fiera Milano Group personnel | 50 |
| • Sustainability at Fiera Milano | 52 |
| • Risk factors affecting Fiera Milano Group | 79 |
| • Significant events after the end of the reporting period | 84 |
| • Business outlook and assessment of the Company as a going concern | 84 |
| • Economic and financial performance of Fiera Milano SpA | 86 |
| • Fiera Milano SpA personnel | 90 |
| • Other information - Equity investments held by members of the Administrative and Control Bodies and by the General Managers |
|
| and Executives with strategic responsibilities | 93 |
| • Report on corporate governance and ownership structure at 31 December 2014 | 94 |
| • Proposals for the Ordinary Meeting of Shareholders (Report pursuant to Article 125-ter, paragraph 1 of Legislative Decree 24/02/1998, no. 58 and subsequent amendments) |
123 |
| Group Consolidated Financial Statements at 31 December 2014 | 131 |
| Consolidated Financial Statements | 132 |
| Explanatory and Supplementary Notes to the Consolidated Financial Statements | 136 |
| Declaration relating to the consolidated Financial Statements in accordance | |
| with Article 154-bis of Legislative Decree 58/1998 | 208 |
| Independent Auditor's Report | 209 |
| Fiera Milano SpA Financial Statements at 31 December 2014 | 211 |
| Financial Statements | 212 |
| Explanatory and Supplementary Notes to the Financial Statements | 216 |
| Declaration relating to the Financial Statements in accordance with | |
| Article 154-bis of Legislative Decree 58/1998 | 278 |
| Report of the Board of Statutory Auditors | 279 |
| Independent Auditor's Report | 288 |
| Resolutions passed by the Ordinary Meeting of Shareholders | 290 |
Fiera Milano has been penalised by yet another difficult year for Italy, by the absence in the exhibition calendar of the triennial exhibitions and of the two directly owned exhibitions, HOST and TuttoFood. There was also a negative effect from the impairment charges taken for some of the publications in the Fiera Milano Media portfolio and for non-recurring costs for the repositioning of the exhibition HOMI and the restructuring of the Brazilian subsidiary.
The 2014 results were negative despite the strong performance of such important events as Mostra Convegno Expocomfort and the Salone del Mobile, as well as the congress activity. The foreign activities of the Group continued to contribute in absolute terms although the gross operating margin declined.
During the year several long-term reorganisation plans were concluded, foreign subsidiaries were integrated, and leading exhibitions repositioned and relaunched, starting with HOMI. This has given us a solid foundation on which we have built, with the help of the
"A difficult year, penalised by the economic crisis and by the unfavourable exhibition calendar, has ended but we have built a solid foundation for the future"
Boston Consulting Group, a four-year development plan that means that we can look with optimism to the future and to the economic recovery which, after so many false starts, finally appears to be underway.
Significant sacrifices have been made in recent years
involving redundancies and a reduction in the number of Group companies but these have resulted in an indisputable increase in efficiency. In 2012 and 2013, the EBITDA margin before payment of the rent for the exhibition sites to Fondazione Fiera Milano was 24% and 20% respectively. In the same years, the Hannover Exhibition Centre generated margins of 2% and 13%; that of Frankfurt 19% and 20%. The rental payment is peculiar to our Company and has a significant impact on our final results. For this reason we asked for and obtained a change in the terms of the rental contract and this will have a positive effect on results from 2015.
We also expect positive results from the decision to focus in Italy and worldwide on maximising and developing our leading products. A market that fails to grow - or even worse - shrinks (as the exhibition sector in Italy has) becomes selective. Exhibitors and visitors reduce their investments and concentrate them on a smaller number of events. We must, therefore, avoid wasting both energy and resources and focus on those events that can compete on a global basis. We already directly organise such international events - HOST and Tuttofood - and host others, all recognised leaders in their reference sectors.
The considerable effort made to internationalise the Group profile is also a cause for optimism. The European exhibition sector is expected to show modest growth until 2018: an aggregate growth rate of just 1.6%. We believe that the decision taken some time ago not to be subjected to globalisation but to take an active part in it will mean that
we can beat this figure. The average growth of Fiera Milano revenues generated outside Italy was 31% per annum in 2011-2014 with a gross operating profit that remained constantly in the black. There is still a considerable amount to do to ensure that the weighting of foreign revenues increases and that the profitability of the investments made grows; to date, these results have been negatively affected by expenses linked to the integration of organisational and management systems following the acquisitions made. Now the organisational model is in place, integration of the foreign companies has been completed, and those events that can be exported have been identified, as well as the means whereby they can be adapted and replicated in those countries where we have already implemented winning concepts. We also believe strongly in alliances with sector associations and with other Italian operators that offer synergies and a way to beat the global competition as, for example, the excellent relationships forged with the Centro di Firenze per la Moda Italiana and with Pitti Immagine.
Lastly, it should be remembered that whilst Fiera Milano means exhibitions, it is not limited to exhibitions. It also means stand-fitting, congresses and media. We have demonstrated
in all these sectors that we can react positively to the difficulties of recent years. We have now identified specific aims and have put in place growth strategies that include greater market penetration for Nolostand, both within the business area of Fiera Milano and also outside it ,and digital acceleration (in publishing, advertising and promotions) for Fiera
"Three strategic guidelines: optimising our leading exhibitions, internationalisation, and strengthening those businesses that offer synergies with the exhibition business"
Milano Media. We also intend to maximise the congress activity and increase our market share of large-scale congresses and of corporate events.
Although we have suffered from the economic crisis, we remain one of the leading exhibition companies worldwide. Over time we have increased the efficiency of our activities, honed our organisational model and developed internationally. We have also worked hard in the last few months to identify the strategies and targets that we want to implement over the next four years. These are based on four main guidelines: to expand and defend our portfolio of leading exhibitions; export them from Italy while enhancing the product portfolios and profitability of our subsidiaries worldwide; and strengthen the businesses that are ancillary to the core business (stand-fitting services, congresses, communication). We need the support of all our stakeholders to reach our targets. We also need to improve our capacity for attracting and retaining the most talented and competent resources available.
The number of exhibitions refers to those held in 2014.
Brazil Number of exhibitions 16 Employees 41
Italy Number of exhibitions 51 Employees 622
Number of exhibitions 8 Employees 19
Russia
Employees 3
Number of exhibitions 1
China
Number of exhibitions 21 Employees 85**
India Number of exhibitions 10 Employees 20**
Number of exhibitions 1 Employees* -
South Africa Number of exhibitions 5 Employees 17
* Figures for Thailand are included in those for China. ** Figures for joint-ventures reflect the shareholding of the Group.
On 12 September 1946, the Fiera Campionaria Internazionale inaugurated the new Fiera Milano, exhibition site that was rebuilt following its destruction during World War II bombardments.
In February, Ente Autonomo Fiera Internazionale di Milano, a private foundation, was constituted. In October, the Foundation passed to Fiera Milano SpA management of the exhibition sites, the organisation of exhibitions and supply of exhibition services, and the congress activities.
The Fiera Campionaria Internazionale was held on the ramparts of Port Venezia, Milan, before transferring in 1923 to a permanent site in the area now occupied by fieramilanocity.
The Portello site was extended with the opening of three new large pavilions that increased the available exhibition space by 74,000 square metres gross, giving a total capacity of over 348,000 square metres of space.
1920 1946 1997 2000 2002
In December, Fiera Milano SpA was listed on the STAR segment of Borsa Italiana. Fiera Milano increased its range of activities through the acquisition of some important exhibition organisers and enhanced its offering in stand-fitting services, catering, trade publications and internet services.
On 31 March, the new Fiera Milano exhibition complex on the outskirts of Milan was inaugurated; the site has 345,000 square metres of exhibition space. Some of the pavilions of the downtown site continued in use.
MiCo - Milano Congressi opened: this is the largest and most modern congress centre in Europe with capacity for 18,000 delegates. It is managed by Fiera Milano Congressi and was built by Fondazione Fiera Milano through the conversion of part of the fieramilanocity exhibition site.
2005 2008 2011 2015
An intense internationalisation process was started with the signature of a joint venture with Deutsche Messe, the owner of the Hannover exhibition site, covering regions outside Europe. In subsequent years, Fiera Milano has acquired leading exhibition organisers in Brazil, Turkey, South Africa and China and has set up a company in Russia and a commercial partnership in Singapore. It has also launched editions of its leading exhibitions in markets outside Europe.
The World Expo 2015 is held in Milan. Fiera Milano - Official Partner for Operations - has designed and managed the project for the nine Clusters, that for the Padiglione Zero, and designed the furnishing of the themed areas and of the Italian Pavilion, as well as the design and furnishing of the Expo 2015 Congress Centre and Auditorium.
The Group is involved in all the characteristic phases of the exhibition and congress sector and is one of the leading international integrated companies in this sector.
17
| Chairman |
|---|
| Deputy Vice-Chairman*° |
| Vice Chairman*° |
| Chief Executive Officer |
| Director*° |
| Director*° |
| Director*° |
| Director*° |
| Director*° |
* Independent director under the Self-Regulatory Code of the Italian Stock Exchange.
° Independent director under Article 148, paragraph 3 of Legislative Decree no. 58 of 24 February 1998.
Davide Croff Roberto Baitieri Renato Borghi
Stefano Mercorio Chairman Alfredo Mariotti Statutory Auditor Damiano Zazzeron Statutory Auditor Antonio Guastoni Substitute Auditor Pietro Pensato Substitute Auditor
Attilio Fontana Giampietro Omati Romeo Robiglio
Michele Perini Pier Andrea Chevallard Ugo Lecis Andrea Pizzoli
Flaminio Oggioni
The mandates of the Board of Directors and the Board of Statutory Auditors were renewed at the Shareholders' Meeting of 27 April 2012 and expire with the Shareholders' Meeting to approve the Financial Statements at 31 December 2014.
The Board of Directors is invested with the widest powers for the ordinary and extraordinary management of the Company, excluding only those which by law are the preserve of the Shareholders' Meeting.
The Chairman, in addition to legally representing the Company and performing the duties as required by law and by the Company's articles of association, also, in conjunction with the Chief Executive Officer, has the following responsibilities: relations with shareholders, national and international institutional relations, internationalisation activities, strategic and innovative initiatives, verification of the implementation of the Board of Directors' resolutions and supervision of internal auditing.
The Chief Executive Officer has ordinary and extraordinary administrative powers, except for those relating to certain specific matters that include the acquisition or disposal of investments, obtaining loans that exceed 30% of the Company's equity, the stipulation of contracts for assets, excluding leases for the conduct of Company business of less than six years duration, approval of the budget for the year, and the grant of guarantees to third parties
Reconta Ernst & Young SpA
The mandate, given the independent audit firm by the Shareholders' Meeting of 29 April 2014, is for the 2014-2022 financial years.
The top management forms the Steering Committee that meets periodically to assist the Chief Executive Officer in defining, developing and processing business proposals to be put forward for the close examination of the Parent Company Board of Directors as the strategic guidelines of the Fiera Milano Group.
The Committee defines plans and strategies that are mainly focused on growing the Group business in its reference market and on the progression of contract negotiations; it also develops strategic plans, strategies for the domestic market, for international development and related activities, and manages financial planning.
Strengthen its leadership in directly organised exhibitions that offer strong growth potential:
Attract new exhibitions to Milan that are leaders in important sectors and that are recognised as reference points within their markets.
Create foreign editions of the leading exhibitions already in the Group portfolio, ensuring that they meet the requirements of the local markets, through partnerships that guarantee an in-depth knowledge of each country of operation:
Consolidate the foreign exhibition portfolio:
− Increase the number of exhibitions in those countries and industrial sectors that offer strong growth opportunities (e.g. FISP, Exposec, and Tubotec in Brazil).
Increase the penetration of the stand-fitting services in the exhibition sector and in congresses and events through careful product innovation.
Develop digital services to support the exhibitions, including the matchmaking platform and the existing editorial portals; increase the service offering together with commercial partners (e.g. integrated communication solutions for the PMI - Purchasing Managers Index that maximise the potential of the available databases).
Further enhance the congress business increasing the market share in large-scale congresses whilst targeting areas not already covered within the associations sector and also corporate events, as well as offering destination management services (e.g. tickets, hotel reservations, transport management) together with a recognised partner to those outside the sphere of exhibition visitors and congress attendees.
22
FIERA MILANO S.p.A. Registered office in Milan, Piazzale Carlo Magno, 1 Operational and administrative headquarters in Rho (MI), Strada Statale del Sempione, 28 Share capital Euro 42,147,437.00 fully paid-up Milan Company Register, Tax code and VAT number 13194800150
The ordinary meeting of shareholders of Fiera Milano SpA is convened once in Rho (MI), in the Auditorium of the Centro Servizi of the Exhibition Site, Strada Statale del Sempione 28, (reserved parking available with entry from Porta Sud), on 29 April 2015 at 14:30 hours to approve the following.
The issued and fully paid-up share capital is Euro 42,147,437.00 (forty-two million one hundred and forty-seven thousand four hundred and thirty-seven) made up of no. 42,147,437 (forty-two million one hundred and forty-seven thousand four hundred and thirty-seven) registered shares each of nominal value Euro 1.00 (one). The shares are indivisible and each carries one voting right except for treasury shares held either directly or indirectly, which do not have this right. At today's date, the Company holds directly no. 626,758 treasury shares, equal to 1.49% of the share capital.
Shareholders who collectively represent at least one-fortieth of the Company's share capital may also request, in writing, additions to the agenda of the meeting within ten days of publication of this notice of the Shareholders' Meeting, in accordance with Article 126-bis of Legislative Decree 58/1998 (the Consolidated Finance Act), by specifying in the request the additional topics they wish to discuss or any proposals for additional discussions regarding items already on the Agenda. Any such request must be sent, together with certification of ownership of the shares, by registered delivery, with proof of receipt, to the operational and administrative offices of the Company in Rho (Milan), Strada Statale del Sempione 28 (Investor Relations Department) or by e-mail to the e-mail address [email protected].
Within the same time limit and in the same way a report which gives the reasons behind the request for additional topics to be deliberated or for additional discussions of items already on the Agenda must be delivered to the Board of Directors of the Company. Requests for additions to the Agenda are not permitted if they regard topics that the Shareholders' Meeting has been asked to approve under applicable law by the Directors or regard a plan or report prepared by the Directors.
Legitimate attendance at the Shareholders' Meeting and the exercise of the right to vote must be proved by a communication to the Company from an intermediary that agrees with the latter's accounting records on behalf of the person having the right to vote on the basis of evidence of possession of the shares at the end of the accounting day on the seventh trading day preceding the date set for the Shareholders' Meeting (i.e. by 20/04/2015); credit or debit registrations to the share account after this time will not be considered for the legitimate exercise of voting rights at the Shareholders' Meeting. Those who appear as shareholders of the Company after this date are not permitted to attend or vote in the Shareholders' Meeting. The aforementioned communication from the intermediary much reach the Company by the end of the third stock market trading day prior to the date set for the Shareholders' Meeting (i.e. by 24/04/2015). Those persons whose communication arrives at the Company after this date, as long as it is before the start of business of the Shareholders' Meeting that has been convened, may still legitimately attend and vote at the Meeting.
Any person who may legitimately attend the Shareholders' Meeting may be represented by a written proxy according to the provisions of enacted law if the person who may legitimately vote signs the proxy form that is available on the website www.fieramilano.it (under Investor Relations/Corporate Governance/Shareholders' Meeting). Notification of the proxy may be made by sending the form to the operational and administrative headquarters of the Company in Rho (Milan), Strada Statale del Sempione, 28 (Investor Relations Department) or to the e-mail address [email protected]. Proxies attending the Shareholders' Meeting on behalf of shareholders must demonstrate, assuming full responsibility, that they are the person delegated in the original notification and have a proxy form that is identical to the original notification.
The proxy may also be freely given, with instructions on how to vote, to the company Computershare S.p.A., which has been delegated for this purpose by the Company, in accordance with Article135-undecies of Legislative Decree 58/1998 (the Consolidated Finance Act) by signing the proxy form available from 20/03/2015 on the Company website www.fieramilano.it (under Investor Relations/Corporate Governance/Shareholders' Meetings) on condition that the original is received by Computershare S.p.A. at its registered office at via Lorenzo Mascheroni 19, 20145 Milan, and by sending in advance by fax to +39-02- 46776850 a declaration that the proxy corresponds to the original notification or by sending it as an attachment to an e-mail to the e-mail address [email protected], by the end of the second stock market trading day preceding the date of the Shareholders' Meeting (i.e. by 27/04/2015). Proxies given in this manner may only be used for proposals where voting instructions have also been given. The proxy and the voting instructions may be retracted within the same time period above (i.e. by 27/04/2015).
Shareholders may table questions regarding the items on the agenda before the Shareholders' Meeting in accordance with Article 127-ter of the Consolidated Finance Act; these must be sent by registered delivery, with proof of receipt, to the operational and administrative offices of the Company in Rho (Milan), Strada Statale del Sempione 28 (Investor Relations Department) or by e-mail to the e-mail address [email protected]. Questions received by the third day preceding the date of the only convocation of the Shareholders' Meeting (i.e. by 26/04/2015) will be answered, at the latest, during the Shareholders' Meeting and the Company reserves the right to give a single answer to questions covering the same item.
With reference to item two on the Agenda, it should be noted that Directors are appointed by the Shareholders' Meeting on the basis of lists presented by the shareholders in accordance with the law and current regulations and Article 14 of the Company's Articles of Association, which is available on the Company website www.fieramilano.it under Investor Relations/ Corporate Governance/Articles of Association.
It should also be noted that the principle of gender equality must be respected when compiling the lists. The appointment of members of the Board of Directors is based on lists presented by shareholders who, either alone or jointly with other shareholders, hold shares with voting rights that represent at least 2.5% of the shares with voting rights in ordinary shareholders' meetings, as required by the Company's Articles of Association and by Consob resolution no. 19109 of 28 January 2015. Shareholders are requested to deposit the lists of nominations for directors at the registered office of the Company or, preferably, at the operational and administrative offices in Rho (Milan), Strada Statale del Sempione 28, in the reception area for the administration offices in the Centro Servizi or to send them by e-mail to [email protected], at least twenty-five days prior to the date of the only convocation of the Annual General Meeting (i.e. by 04/04/2015). The lists must be accompanied by information concerning the identity of the shareholders that have presented the lists and the total percentage of the company held by these shareholders, as well as the relative certification of ownership of the shares released in accordance with law by authorised intermediaries.
The certification of ownership of the shares held on the date the lists are deposited may be provided at a later date as long as it is within twenty-one days of the date of the only convocation of the Annual General Meeting (i.e. by 08/04/2015).
Each list must be accompanied, at least twenty-five days prior to the date of the only convocation of the Annual General Meeting (i.e. by 04/04/2015), by comprehensive information regarding the personal and professional qualifications of the candidates that includes a list for each candidate of any administrative and control positions held in other companies (these must be updated and communicated immediately to the Company should there be any changes prior to the Shareholders' Meeting), as well as a statement in which each candidate accepts the candidacy and declares, assuming full responsibility, that no reasons of ineligibility or incompatibility exist and that he/she meets the requisites under law and the Company Articles of Association, including a declaration that he/she is independent of the Company and meets the requirements for independence as established in the Consolidated Finance Act and in the enacted Self-regulatory Code of listed companies.
With reference to the third item on the Agenda, it should be noted that the Statutory Auditors are appointed by the Shareholders' Meeting on the basis of lists presented by the shareholders in accordance with the law, current regulations and Article 20 of the Company's Articles of Association, which is available on the Company website www.fieramilano.it under Investor Relations/Corporate Governance/Articles of Association.
The appointment of the Statutory Auditors is made on the basis of lists presented by shareholders who, either alone or jointly, hold shares with voting rights that represent at least 2.5% of the shares with voting rights in ordinary shareholders' meetings, as required by the Company's Articles of Association and by Consob resolution no. 19109 of 28 January 2015.
The lists must contain candidates of both genders.
The lists, each composed of two sections, one for candidates for the office of Standing Statutory Auditor and the other for candidates for the office of Supplementary Statutory Auditor, must be deposited at the registered office of the Company or, preferably, at the operational and administrative offices at Strada Statale del Sempione 28, Rho (Milan), in the reception area for the administration offices in the Centro Servizi or sent by e-mail to [email protected], at least twenty-five days prior to the date of the Annual General Meeting (i.e. by 04/04/2015). The lists must be accompanied by information concerning the identity of the shareholders that have presented the lists and the total percentage of the company held by these shareholders, as well as by the relative certification of ownership of the shares released in accordance with law by authorised intermediaries.
The certification of the ownership of the shares held on the date the lists are deposited may be provided at a later date as long as it is received within twenty-one days prior to the date of the Annual General Meeting (i.e. by 08/04/2015).
Each list must be accompanied, at least twenty-five days prior to the date of the Annual General Meeting (i.e. by 04/04/2015), by comprehensive information regarding the personal and professional qualifications of the candidates that includes a list for each candidate of any administrative and control positions held in other companies (these must be updated and communicated immediately to the Company should there be any changes prior to the Shareholders' Meeting), as well as a statement in which each candidate accepts the candidacy and declares, assuming full responsibility, that no reasons of ineligibility or incompatibility exist and that they meet the requisites of the law and the Company Articles of Association. Furthermore, under Article 144-sexies, paragraph 4, of the Listing Rules, shareholders other than those who hold, also jointly, a controlling shareholding or a relative majority of the share capital must deposit together with the aforementioned documentation a declaration stating the absence of any relationship with the controlling shareholder, as defined by Article 144-quinquies of the Listing Rules. If after the twenty-fifth day prior to the date of the Shareholders' Meeting (i.e. 04/04/2015) only one list of candidates for members of the Board of Statutory Auditors has been deposited or only lists have been presented from shareholders that, under Article 144-sexies, paragraph 4, of the Listing Rules, are considered to be connected under Article 144-quinquies of the same Listing Rules, lists may be presented up to the third subsequent day (i.e. 07/04/2015) and the shareholding of the Company share capital required to present lists will be halved (to 1.25% of the share capital of the Company).
No candidate may appear in more than one list and the lists may not include candidates that already hold the office of Statutory Auditor in five other listed companies.
Under the law and Article 20.2 of the Company's Articles of Association, the Chairperson of the Board of Statutory Auditors is the first candidate on the second list that receives the largest number of votes at the Shareholders' Meeting. Lastly, the enacted Self-regulatory Code for Listed Companies recommends that the Statutory Auditors of listed companies are appointed from persons who qualify as being independent of the Directors in accordance with the criteria for independence under Article 3 of the same Self-regulatory Code.
It should be noted that lists presented for the appointment of members of the administration and control bodies which do not fulfil the aforementioned statutory requirements will be considered as not having been presented.
The documentation relating to items on the Agenda will be deposited at the registered office of the Company and at its operational and administrative offices in Rho (Milan), Strada Statale del Sempione 28, Centro Servizi, Office reception, at Borsa Italiana, on the website managed by BIt Market Services SpA and on the Company website www.fieramilano.it under Investor Relations/Corporate Governance/Shareholders' Meeting, and will be made available to the shareholders and the public as required by law. Shareholders may obtain copies of all the aforementioned documentation.
Rho (Milan), 20 March 2015
(Notice published in the daily newspaper Avvenire on 21 March 2015)
The Chairman of the Board of Directors Michele Perini
27
As in 2013, the 2014 financial results suffered from the continued weakness of the Italian economy; this negative impact was compounded by the unfavourable exhibition calendar with the absence of some directly organised exhibitions that generate significantly higher margins, such as HOST and TUTTOFOOD. The excellent performance of the congress segment, which included hosting the ministerial meetings held during Italy's six-month Presidency of the European Union in the MiCo congress centre, was insufficient to offset the negative effect of the drop in demand for exhibition space.
The gross operating result was Euro 5.493 million lower than the gross operating profit generated in the 2013 financial year.
In Italy, the combined effect of the different exhibition calendar and lower demand for exhibition space at some events resulted in a fall of approximately 9% in exhibition space occupied. The presence of biennial exhibitions that fall in even-numbered years, the main one being Mostra Convegno Expocomfort, only partly compensated for the absence of HOST and TUTTOFOOD and the lower demand for space at some annual exhibitions that were particularly impacted by exposure to the crisis in their reference sectors. However, there were encouraging signs from the Salone del Mobile, which had a year-on-year increase; from HOMI September (known as Macef until 2013), which benefited from the investments made to internationalise and relaunch the event; and from the addition to the exhibition calendar of new exhibitions that covered a total of over 71,000 square metres and that included the bi-annual exhibition Lineapelle.
The foreign activities of Fiera Milano confirmed in absolute terms their contribution to the gross operating profit although the latter declined due to a series of factors, including expenses for the reorganisation of the Brazilian companies, and market factors such as the increase in the cost of exhibition space in Brazil.
The net operating result was penalised, albeit to a lower extent than in 2013, by impairment charges for the Food & Beverage and Real Estate trade publications of the subsidiary Fiera Milano Media SpA and for the goodwill allocated to the cash-generating unit (CGU) Events and training of the reportable segment Media following impairment tests carried out as a result of a negative performance that was not adequately compensated by the forecasts for future results.
The table on the following page shows the key Group figures from the Income Statement and the Statement of Financial Position.
When reading these figures it should be remembered that the exhibition business is seasonal due to the existence of exhibitions that have a biennial and multi-annual frequency. This makes a comparison between financial years more difficult.
Given the total amount of the financial and income items, the Group considers the amount of Euro 2 million to be the material requiring separate disclosure of non-recurring and atypical and/or unusual transactions in the accounts. It should be noted that there were no atypical and/or unusual transactions during the financial year under review. Further information on significant events and non-recurring transactions and details and information on related-party transactions are given in the Explanatory and Supplementary Notes to the Fianncial Statements.
| Fiera Milano Group Summary of key figures (Amounts in € '000) |
Full year 31/12/14 |
Full year 31/12/13 restated |
Full year 31/12/12 restated |
|---|---|---|---|
| Revenues from sales and services | 245,457 | 245,057 | 253,301 |
| Gross operating result (a) | (3,338) | 2,155 | 16,881 |
| Net operating result (EBIT) | (18,793) | (17,087) | 1,113 |
| Net profit/(loss) (continuing operations) | (19,106) | (16,625) | (1,453) |
| Net profit/(loss) | (19,106) | (16,625) | (1,453) |
| - Attributable to the shareholders of the controlling entity | (18,955) | (16,498) | (1,541) |
| - Attributable to non-controlling interests | (151) | (127) | 88 |
| Cash flow for the Group and non-controlling interests (b) | (3,651) | 2,617 | 14,315 |
| Net capital employed (c) | 141,355 | 139,287 | 145,927 |
| covered by: Equity attributable to the Group |
17,034 | 34,650 | 56,002 |
| Equity attributable to non-controlling interests | 2,654 | 2,812 | 3,868 |
| Net financial debt/(cash) | 121,667 | 101,825 | 86,057 |
| Investments (continuing operations and discontinued operations) | 8,515 | 15,655 | 16,641 |
| Employees (no. of permanent employees at year end) | 807 | 826 | 751 |
(a) Gross operating profit is profit before depreciation and amortisation, adjustments to asset values and other provisions.
(b) Cash flow is the sum of the result for the financial year, depreciation and amortisation and provisions.
(c) Net capital employed is the sum of non-current assets, non-current liabilities and net working capital.
Some figures in the Consolidated Financial Statements at 31 December 2013 and in the Consolidated Financial Statements at 31 December 2012 have been restated for comparative purposes following the introduction of IFRS 11 applicable from 1 January 2014.
On 31 March 2014 the new lease agreements were signed with Fondazione Fiera Milano for the exhibition sites of both Rho and Milan City. The new lease agreements are both for nine years effective from 1 July 2014 (following early agreed termination of the existing lease agreements due to expire on 31 December 2014) and may be automatically renewed for a further nine years.
Under the new lease agreement for the Rho exhibition site there is a reduction in the rent of Euro 2.0 million in the second semester of 2014 and of Euro 14.0 million in 2015 and in each subsequent year of the contract. The lease agreement is for a total of Euro 24.4 million for the second semester of 2014 and Euro 38.8 million in 2015 and in each subsequent year of the agreement annually adjusted for 100% of the change in the ISTAT consumer price index. Because of EXPO 2015, which is expected to have a positive impact on the exhibition business of Fiera Milano, for 2015 alone Fondazione Fiera Milano will be paid an additional amount on any revenues generated in 2015 by Fiera Milano SpA that exceed the average annual revenues of the three-year period 2012-2014. Fiera Milano will pay a supplementary rent equal to 15% of the aforementioned difference in revenues up to a maximum amount of Euro 10.0 million. The lease agreement is for payments of equal amounts for the duration of the contract. Therefore, in 2014 the rental expenses were Euro 6.722 million, which reflected the reduction for that period under the contract that runs from July 2014 until the agreement expires.
For the Milan exhibition site, the parties agreed to maintain the existing rent of Euro 2.850 million per annum annually adjusted for 100% of the change in the ISTAT consumer price index.
The rental agreements constitute a related-party transaction as Fondazione Fiera Milano has a controlling shareholding of 62.062% in the share capital of Fiera Milano.
The transaction is also a transaction of greater importance under Article 5 of Consob Regulation no. 17221 of 2010 on related-party transactions and of Article 10.2 of the Procedure regarding Transactions with Related Parties adopted by Fiera Milano as it exceeds the materiality thresholds contained therein. As Fiera Milano qualifies as a "small and mid cap company", as defined in Article 3, first paragraph, letter (f) of the Consob Regulation, the Company could have availed itself of the exemption permitted under Article 10, paragraph 1 of the same Regulation and applied to a transaction of greater importance (such as the one described above) the procedures for transactions of lesser importance. However, because of the highly sensitive nature of the transaction and its importance to the corporate activities of the Company, the Board of Directors of Fiera Milano, on the suggestion of the Control and Risk Committee, chose to employ for this transaction the more rigorous procedures required for transactions of greater importance.
The rental agreements were prepared also taking account of valuations done by Jones Lang LaSalle S.p.A. acting as an independent expert for Fiera Milano SpA.
In 2014, fifteen new exhibitions covering 71,085 square metres of exhibition space were launched: 51,610 square metres in Italy and 19,475 square metres abroad. In Italy the September edition of the bi-annual exhibition Lineapelle in the leather sector and covering accessories/components, synthetics/materials, shoes, shoe models, leather goods, leather clothes and furnishings was held for the first time in the fieramilano exhibition site.
The activities of the Group outside Italy included the launch of Food Hospitality World Cape Town in South Africa; the two editions of Fast in Rio de Janeiro and Salvador de Bahia; Infocomm and The China products Show in Brazil; Promoturk in Turkey; and Aviation & Space in China.
The MiCo Congress Centre hosted the ministerial meetings held during the six-month Italian Presidency of the European Union. The meetings took place over a period of four months starting in July 2014 and included the meeting of the European Ministers of Justice and the Home Office, and those of the Ministers for Cooperation and Development, the Environment, Employment, Defence, Infrastructure and Transport, Energy, and others. The timetable was crowned by the 10th Asia-Europe Meeting, the European and Asian forum to which the European Union, ASEAN (Association of South-East Asian Nations) and other countries, including Australia, China, Korea, Japan, India and Indonesia, belong.
All these meetings were held in the North auditorium of the Congress Centre, which had been especially refurbished and was reserved exclusively for the Italian six-month presidency of the European Union. Twenty-four rooms and eighty offices on four floors covering a total 30,000 square metres were made available for the use of delegates and the media. This area of the Congress Centre was extensively refurbished by Fiera Milano specifically for this event.
The complex was completely re-roofed, all technological plant was digitalised, lighting was changed from fluorescent lighting to LED (with an approximate saving of 20% in energy), the climate control and thermal insulation systems were upgraded, and with the help of CISCO Ltd, which designed and implemented the system, Wi-Fi was made available throughout the complex permitting approximately 75,000 simultaneous connections.
As part of the contracts linked to Expo 2015, Fiera Milano has translated the concepts for the themed areas (the Zero Pavilion, the Future Food District, the Children's Park, and the Biodiversity Park) into working projects. The Themed Areas express the main theme of Expo 2015, "Feeding the Planet, Energy for Life", through different forms of discussion, exhibition trails and attractive displays.
The contract, which expires in April 2015, is worth a total of Euro 2.900 million, part of which was paid in 2014 based on the progress made.
Fiera Milano has also designed the stand-fittings for the Italy Pavilion and for the Clusters at Expo as part of a contract that expires in April 2015 worth a total of Euro 1.200 million, part of which was paid in 2014 based on the progress made.
The design of the stand-fittings for the Clusters was finished by Fiera Milano in 2014.
In addition to the stand-fitting designs, Fiera Milano has also helped Expo manage the basic technological service offer for those countries that have chosen self-build and has helped promote the China Special Project through road shows and logistic support.
On 10 January 2014, Fiera Milano SpA paid Euro 0.407 million as the first tranche of a share capital increase by Worldex (China) Exhibition & Promotion Ltd.
On 14 February 2014, the Board of Directors of the Parent Company approved the liquidation of Milan International Exhibitions Srl. On 3 March 2014, the extraordinary shareholders' meeting of Milan International Exhibitions approved the start of the voluntary liquidation process.
On 18 February 2014, the Parent Company paid Euro 0.219 million as part of the share capital increase of Interteks.
On 5 March 2014, the deferred payment of Euro 1.800 million was made under the acquisition agreement of 15 May 2013 for 75% of the share capital of the Chinese exhibition company Worldex (China) Exhibition & Promotion Ltd.
On 28 August 2014, the Parent Company acquired 10% of Fiera Milano Exhibitions Africa Pty Ltd for Euro 0.496 million. As a result of this transaction the Parent Company's shareholding went from 75% to 85%.
In the financial year under review, the Group, due to the nature of its business, did not incur costs or investments that typically fall within the category of research & development.
The effects have been positive on the more advanced oil importing economies but not enough to compensate for the forecast reduction in medium-term growth, a phenomenon which has depressed investments. The only advanced economy with robust growth and expectations of further improvements is the United States (+2.4% in 2014 and +3.6% in 2015).
The economy of the Euro region grew below expectations in the third quarter of 2014 and the fullyear forecast is for growth of 0.8%, which should increase marginally to 1.2% in 2015. In addition to the oil price, there are several other factors that could drive a stronger economic recovery: a more expansive monetary policy from the ECB and the weakness of the Euro. However, these factors could be offset by slow growth in investments as a result of weakness in the emerging economies and a slowdown in their exports.
Growth has already slowed in China and in other Asian economies. Russia is in a particularly delicate situation with the drop in the oil price, geo-political tensions, and the drastic depreciation of the rouble. Other commodity exporting nations are also suffering a negative scenario caused by the fall in the oil price; only the Gulf States have room to compensate lower income in the balance of payments with fiscal and economic policies.
Italy ended 2014 with yet another drop in GDP (-0.4%). The recovery in the Italian economy should strengthen in 2015 (growth forecasts are for about +0.5% depending on the organisation making the forecasts). The strong decline in the oil price should have a positive effect on consumption and also on investments, both of which have fallen strongly in recent years. There should also be a gradual recovery in demand both domestic and foreign: monetary policy should guarantee better financing conditions while the domestic industrial policy includes important measures that favour the acquisition of new plant and machinery by manufacturing companies. The trend in construction investments remains weak and is not expected to improve until towards the end of 2015.
Forecasts for employment are positive due to the approval of the measures in the Jobs Act: the unemployment rate of 13.4% should improve in 2015 albeit by just a few basis points.
Elements of the economic policy could have a significant impact on exporting companies (the companies that exhibition organisers target as exhibitors); they include a series of measures to support Made in Italy that total Euro 261 million of which Euro 48 million is for leading international exhibitions organised by Italian companies and for exhibitions held abroad by Italian exhibition companies.
Lastly, in 2015, Expo could be instrumental in aiding the recovery as it should generate millions of visitors. This would help the exhibition sector and could act as a boost to the confidence of Italian companies and the Italian people and, more directly, given the theme of Expo 2015, as a driver for development and expansion in agrifood production and in exhibitions and technologies linked to the agrifood sector.
Source: IMF, October 2014 WEO latest update: 2 December 2014
2013 preliminary figures show a fall in exhibition space occupied in all the countries analysed. In 2013 the Italian exhibition business of international standing had an overall decline compared to 2012, particularly as regards the exhibition space occupied, which fell 16.9%. This was mainly caused by the unfavourable calendar for biennial exhibitions (which is typical of uneven-numbered years) that compounded the recessionary trend in annual exhibitions in force since 2008. Other indicators were also negative varying from -7.1% in total visitors to -10.9% in total exhibitors (- 8% for direct exhibitors), with an overall reduction in exhibition participation of 9.4% (-8% in foreign exhibitors) and in foreign visitors (-9.5%). In part this reflected the more international nature of the multi-annual events that were absent from the calendar in 2013. 2014 data are not yet available but the exhibition business is expected to have stabilised because even-numbered years have always been more positive for the Italian exhibition sector; however, the market will have continued to suffer from the negative economic environment.
Source: Studi e Strategie Fondazione Fiera Milano using CERMES, AUMA, AFE, andOJS data. 2014 figures are estimates
In 2013 Germany registered a year-on-year decline of 6% in exhibition space rented out. The 2014 figures for Germany show a slight increase in space rented out (+1.5%) while total visitors declined slightly (-3%) to just below the figure of ten million. However, the total number of exhibitors increased (+8% compared to 2013) as did foreign exhibitors (+6%).
The French market has been more or less stable in the last two years with only minimal fluctuations and without the volatility that has characterised other geographic markets. A feature of the French exhibition market is the strong presence of shows open to the general public, known as foires, that have a significant weighting on the total amount of exhibition space occupied. Foires account for one quarter of all exhibition space occupied but could be impacted by the ongoing adverse economic conditions.
The preliminary 2013 figures gathered by ICCA (International Congress and Convention Association) for the itinerant international congress sector indicate a healthy sector: the number of congresses held in the five top countries in Europe grew, often with double-digit growth. The number of international congresses in Italy rose from 390 in 2012 to 447 in 2013 (+15%) and the other countries reviewed also had a substantial increase in events, except for Spain, with growth of 2%. 2014 preliminary figures are not yet available but ICCA has confirmed the stability in the sector and the increase in the number of congresses both internationally and in the individual countries reviewed.
Source: Studi e Strategie Fondazione Fiera Milano using ICCA data; 2014 figures are estimates
UFI, the Global Association of the Exhibition Industry, has published the fourteenth edition of the Global Exhibition Barometer, a survey of exhibition sites, exhibition organisers and service providers in all continents, which was carried out in December 2014 to assess the health of the sector. The outlook for the exhibition sector is positive: the majority of those interviewed in all geographic areas stated that there would be an increase in revenues in 2015, a trend that began in 2011. However, there were differences among the various geographic areas: in the Americas eight out of ten people interviewed expect revenues to rise in 2015 while in Asia this figure is seven out of ten and in China there is expected to be a slowdown. In Europe, six out of ten interviewees expect an increase in revenues in 2015 without any significant difference between the first and second semesters. Most of those interviewed believe that the crisis is now behind them except for in Europe where seven out of ten believe their business will continue to be affected by the difficult economic environment.
The economic policies to support Made in Italy mentioned above in the section on macroeconomic trends should certainly have a positive effect on the Italian exhibition sector: the Euro 48 million set aside by the Ministry for Economic Development should strengthen the leading Italian international exhibitions and some of the exhibitions organised by Italian companies abroad and should generate business opportunities for the exhibiting companies and positive economic returns for the areas hosting these exhibitions.
For the meetings and congresses sector, the surveys carried out by the relevant associations indicate a positive trend: those carried out by MPI (Meeting Professionals International)1 , the association for meeting planners, showed sector growth of 3.6% in Europe and 3.2% in the United States. As regards the outlook in the United States, in particular, 53% of meeting planners interviewed are forecasting a growth in budgets for organising meetings, 33% expect no change and only 14% are forecasting a decline. In Europe, the surveys provided similar figures: 55% expect an increase in budgets, 32% expect them to remain unchanged and 14% expect a decline.
1 MPI Meetings Outlook, 2014 Fall Edition
The Consolidated Income Statement is shown below.
| Consolidated Income Statement (Amounts in €'000) |
||||||
|---|---|---|---|---|---|---|
| 2014 | 2013 restated | 2012 restated | ||||
| % | % | % | ||||
| Revenues from sales and services | 245,457 | 100 | 245,057 | 100 | 253,301 | 100 |
| Cost of materials | 2,440 | 1.0 | 3,662 | 1.5 | 2,344 | 0.9 |
| Cost of services | 137,400 | 56.0 | 128,220 | 52.3 | 123,977 | 48.9 |
| Costs for use of third party assets | 57,875 | 23.6 | 63,062 | 25.7 | 60,483 | 23.9 |
| Personnel expenses | 49,276 | 20.1 | 47,587 | 19.4 | 47,957 | 18.9 |
| Other operating expenses | 6,783 | 2.8 | 7,631 | 3.1 | 6,879 | 2.7 |
| Total operating costs | 253,774 | 103.4 | 250,162 | 102.1 | 241,640 | 95.4 |
| Other income | 3,531 | 1.4 | 5,088 | 2.1 | 3,845 | 1.5 |
| Results of equity-accounted companies | 1,448 | 0.6 | 2,172 | 0.9 | 1,375 | 0.5 |
| Gross operating result | (3,338) | -1.4 | 2,155 | 0.9 | 16,881 | 6.7 |
| Depreciation and amortisation | 13,457 | 5.5 | 14,145 | 5.8 | 14,162 | 5.6 |
| Allowance for doubtful accounts and other provisions (uses) | (1,639) | -0.7 | (1,494) | -0.6 | (935) | -0.4 |
| Adjustments to asset values | 3,637 | 1.5 | 6,591 | 2.7 | 2,541 | 1.0 |
| Net operating result (EBIT) | (18,793) | -7.7 | (17,087) | -7.0 | 1,113 | 0.4 |
| Financial income/(expenses) | (4,899) | -2.0 | (3,845) | -1.6 | (3,283) | -1.3 |
| Profit/(loss) before income tax | (23,692) | -9.7 | (20,932) | -8.5 | (2,170) | -0.9 |
| Income tax | (4,586) | -1.9 | (4,307) | -1.8 | (717) | -0.3 |
| Profit/(loss) from continuing operations | (19,106) | -7.8 | (16,625) | -6.8 | (1,453) | -0.6 |
| Profit/(loss) from discontinued operations | - | - | - | - | - | - |
| Profit/(loss): | (19,106) | -7.8 | (16,625) | -6.8 | (1,453) | -0.6 |
| - attributable to the shareholders of the controlling entity | (18,955) | -7.7 | (16,498) | -6.7 | (1,541) | -0.6 |
| - attributable to non-controlling interests | (151) | -0.1 | (127) | -0.1 | 88 | 0.0 |
| Cash flow for the Group and non-controlling interests | (3,651) | -1.5 | 2,617 | 1.1 | 14,315 | 5.7 |
Some figures in the Consolidated Financial Statements at 31 December 2013 and in the Consolidated Financial Statements at 31 December 2012 have been restated for comparative purposes following the introduction of IFRS 11 applicable from 1 January 2014.
Revenues from sales and services were Euro 245.457 million, an increase of Euro 0.400 million compared to the figure of Euro 245.057 million in the 2013 financial year. The revenues mainly reflected the meetings held during the Italian six-month presidency of the European Union at the MiCo Congress Centre and the good trend in demand for exhibition space abroad due to the biennial exhibitions Fesqua and FISP held in Brazil. The positive change in revenues also reflects the fall in Italy of square metres of exhibition space occupied due to the different exhibition calendar without the biennial exhibitions held in uneven-numbered years, TUTTOFOOD, HOST and Made Expo (which became a biennial exhibition from 2013), and a drop in demand for exhibition space in particular for the directly organised exhibitions, HOMI January and Bit. This was partly offset by the exhibitions hosted in even-numbered years, Mostra Convegno Expocomfort and Xylexpo, by Lineapelle, held for the first time at the fieramilano site, and by some other hosted events like the Salone del Mobile and the exhibitions in the fashion sector.
The gross operating loss was Euro 3.338 million compared to a gross operating profit of Euro 2.155 million in 2013, a decrease of Euro 5.493 million.
The fall in the gross operating result mainly reflects the increase in costs for measures taken to relaunch and internationalise HOMI, operating expenses for the corporate restructuring of the Brazilian companies Cipa FM and Eurofairs (Euro 0.908 million), and the absence of the funds paid in 2013 by Fondazione Fiera Milano as its share of the internationalisation initiatives for HOST. These negative impacts were in part offset by a reduction in the rent paid by the Parent Company for the fieramilano exhibition site
The net operating loss was Euro 18.793 million and compared to a net operating loss in 2013 of Euro 17.087 million. The deterioration of Euro 1.706 million was lower than the year-on-year decrease in the gross operating result. The result reflected lower impairment charges of Euro 3.626 million (compared to Euro 6.569 million) and lower depreciation and amortisation in the Parent Company. The impairment charges were for the trade publications in the Food & Beverage and Real Estate sectors belonging to the subsidiary Fiera Milano Media SpA and for goodwill allocated to the Events and training cash-generating unit (CGU) in the Media segment.
Net financial expenses were Euro 4.899 million compared to Euro 3.845 million in 2013. The higher figure mainly reflects the increase in financial costs linked to the higher average net debt.
The Pre-tax loss was Euro 23.692 million compared to a pre-tax loss of Euro 20.932 million in 2013.
The net loss at 31 December 2014 was Euro 19.106 million after a positive tax item of Euro 4.586 million and compared to a net loss of Euro 16.625 million after a positive tax item of Euro 4.307 million in the previous financial year. As in the previous financial year, the tax charge reflects prepaid taxes in the Parent Company and the release of pre-paid taxes linked to the impairment charges. This was in part offset by a higher current tax charge in Fiera Milano Congressi. Pre-paid taxes are carried primarily against tax losses arising in the financial year and recognised to the extent of their likely recoverability incorporated in the approved plans. Greater detail on taxes is provided in the relevant Note in the Notes to the Consolidated Financial Statements.
The net loss was attributable as follows:
The table below shows the Restated Consolidated Statement of Financial Position.
| Reclassified Consolidated Statement of Financial Position (Amounts in €'000) |
31/12/14 | 31/12/13 restated |
31/12/12 restated |
|
|---|---|---|---|---|
| Goodwill and intangible assets with an indefinite useful life | 109,474 | 109,930 | 103,413 | |
| Intangible assets with a finite useful life | 41,584 | 49,222 | 59,782 | |
| Tangible fixed assets | 18,438 | 18,559 | 24,174 | |
| Other non-current assets | 35,234 | 31,691 | 29,003 | |
| A | Non-current assets | 204,730 | 209,402 | 216,372 |
| Inventory and contracts in progress | 5,028 | 4,006 | 4,023 | |
| Trade and other receivables | 50,604 | 53,546 | 51,427 | |
| Other assets | - | - | - | |
| B | Current assets | 55,632 | 57,552 | 55,450 |
| Trade payables | 36,160 | 43,830 | 40,455 | |
| Payments received on account | 39,641 | 37,047 | 32,029 | |
| Tax liabilities | 2,091 | 2,045 | 3,344 | |
| Provisions for risks and charges and other current liabilities | 21,875 | 23,816 | 23,643 | |
| C | Current liabilities | 99,767 | 106,738 | 99,471 |
| D | Net working capital (B - C) | (44,135) | (49,186) | (44,021) |
| E | Gross capital employed (A + D) | 160,595 | 160,216 | 172,351 |
| Employee benefit provisions | 10,286 | 9,202 | 8,707 | |
| Provisions for risks and charges and other non-current liabilities | 8,954 | 11,727 | 17,767 | |
| F | Non-current liabilities | 19,240 | 20,929 | 26,474 |
| G | NET CAPITAL EMPLOYED continuing operations (E - F) | 141,355 | 139,287 | 145,877 |
| H | NET CAPITAL EMPLOYED discontinued operations | - | - | 50 |
| TOTAL NET CAPITAL EMPLOYED (G + H) | 141,355 | 139,287 | 145,927 | |
| covered by: | ||||
| Equity attributable to the Group | 17,034 | 34,650 | 56,002 | |
| Equity attributable to non-controlling interests | 2,654 | 2,812 | 3,868 | |
| I | Total equity | 19,688 | 37,462 | 59,870 |
| Cash & cash equivalents | (12,276) | (11,416) | (13,016) | |
| Current financial (assets)/liabilities | 105,044 | 75,342 | 71,302 | |
| Non-current financial (assets)/liabilities | 28,899 | 37,899 | 27,771 | |
| Net financial position (continuing operations) | 121,667 | 101,825 | 86,057 | |
| Net financial position (discontinued operations) | - | - | - | |
| L | Net financial position (TOTAL) | 121,667 | 101,825 | 86,057 |
| EQUITY AND NET FINANCIAL POSITION (I + L) | 141,355 | 139,287 | 145,927 |
Some figures in the Consolidated Financial Statements at 31 December 2013 and in the Consolidated Financial Statements at 31 December 2012 have been restated for comparative purposes following the introduction of IFRS 11 applicable from 1 January 2014.
The entries in the Reclassified Consolidated Statement of Financial Position correspond to those in the Consolidated Statement of Financial Position.
Net invested capital totalled Euro 141.355 million at 31 December 2014 an increase of Euro 2.068 million compared to the figure at 31 December 2013.
Non-current assets were Euro 204.730 million at 31 December 2014 compared to Euro 209.402 million at 31 December 2013. The change was mainly due to a decrease in intangible assets due to the lower investments made in the financial year, to impairment charges for the publications of Fiera Milano Media SpA and to the goodwill allocated to the Events and training cash generating unit (CGU) of the Media segment, as well as to foreign exchange translation differences.
Net working capital, the balance of current assets and current liabilities, went from a negative figure of Euro 49.186 million at 31 December 2013 to a negative figure of Euro 44.135 million at 31 December 2014. The decrease reflects lower payables to suppliers and exhibition organisers and the change in pre-payments caused by the different exhibition calendar. Fiera Milano Group has structural negative net working capital due to the favourable cash management cycle of exhibitions held in Italy and abroad and congresses where payment of part of the attendance fee is made in advance by clients. Furthermore, Fiera Milano SpA also manages these activities on behalf of third-party organisers and, in this way, generates positive cash flows also from the rent of exhibition space.
The Group had net debt of Euro 121.667 million at 31 December 2014 compared to net debt of Euro 101.825 million at 31 December 2013. The increase in net debt reflected the lower cash flow from normal operations and capital expenditure that was mainly for the improvements to the MiCo – Milano Congress Centre.
Details of the net financial position are given in the Notes to the Consolidated Financial Statements.
The following table shows the reconciliation of Equity between the Parent Company Financial Statements and the Consolidated Financial Statements:
| Statement of reconciliation between Fiera Milano SpA and the Consolidated Financial Statements (€'000) |
|||||||
|---|---|---|---|---|---|---|---|
| Full year 2014 | Full year 2013 restated | ||||||
| Equity | Profit/(loss) | Equity | Profit/(loss) | ||||
| PARENT COMPANY EQUITY AND PROFIT/(LOSS) | 21,736 | (30,674) | 52,577 | (12,664) | |||
| Equity and profit/(loss) of consolidated companies | 51,673 | (2,570) | 51,906 | (4,496) | |||
| Intragroup dividends | - | (322) | - | (1,799) | |||
| Elimination of carrying value of consolidated investments | (99,943) | - | (99,023) | - | |||
| Goodwill arising from acquisitions | 26,170 | (500) | 26,619 | - | |||
| Write-down of investments, net of tax effect | 19,686 | 14,942 | 5,035 | 2,201 | |||
| Elimination of intragroup margins | 14 | 18 | (4) | 63 | |||
| Minor consolidation adjustments, net of tax effect | 352 | - | 352 | 70 | |||
| TOTAL EQUITY | 19,688 | (19,106) | 37,462 | (16,625) | |||
| of which attributable to non-controlling interests | 2,654 | (151) | 2,812 | (127) | |||
| CONSOLIDATED EQUITY AND PROFIT/(LOSS) | 17,034 | (18,955) | 34,650 | (16,498) |
In the financial year to 31 December 2014, investments totalled Euro 8.515 million and the breakdown was as follows:
| Investments (€'000) |
Full year to 31/12/14 |
Full year to 31/12/13 restated |
Full year to 31/12/12 restated |
|---|---|---|---|
| Intangible fixed assets | 1,781 | 13,741 | 14,627 |
| Tangible fixed assets | 6,734 | 1,914 | 2,014 |
| Total investments in non-current assets | 8,515 | 15,655 | 16,641 |
Investments in intangible fixed assets totalled Euro 1.781 million and were mainly related to the Parent Company investments for implementing digital projects and acquiring software.
Investments in tangible fixed assets totalled Euro 6.734 million and were mainly attributable to:
Further details on investments are given in the Notes to the Consolidated Financial Statements.
The Summary of data by operating segment and by geographic area are given in the following table.
| Summary of data by operating segment | ||||
|---|---|---|---|---|
| and by geographic area | ||||
| (Amounts in € '000) | 2014 | 2013 | restated | |
| Revenues from sales and services | ||||
| - By operating segment: | % | % | ||
| . Italian Exhibitions | 181,098 | 63.9 | 194,583 | 69.5 |
| . Foreign Exhibitions | 18,786 | 6.7 | 15,274 | 5.5 |
| . Stand-fitting Services | 33,389 | 11.8 | 33,594 | 12.0 |
| . Media | 12,334 | 4.3 | 11,958 | 4.3 |
| . Congresses | 37,835 | 13.3 | 24,546 | 8.7 |
| Total revenues gross of adjustments for inter-segment transactions | 283,442 | 100.0 | 279,955 | 100.0 |
| . Adjustments for inter-segment transactions | (37,985) | (34,898) | ||
| Total revenues net of adjustments for inter-segment transactions | 245,457 | 245,057 | ||
| - By geographic area: | ||||
| . Italy | 227,150 | 92.5 | 229,857 | 93.8 |
| . Foreign countries | 18,307 | 7.5 | 15,200 | 6.2 |
| Total | 245,457 | 100.0 | 245,057 | 100.0 |
| Gross operating result | % | % | ||
| - By operating segment: | on revenues |
on revenues |
||
| . Italian Exhibitions | (12,894) | -7.1 | (5,124) | -2.6 |
| . Foreign Exhibitions | 1,088 | 5.8 | 2,798 | 18.3 |
| . Stand-fitting Services | 1,895 | 5.7 | 1,605 | 4.8 |
| . Media | 415 | 3.4 | 277 | 2.3 |
| . Congresses | 6,045 | 16.0 | 2,532 | 10.3 |
| . Adjustments for inter-segment transactions | 113 | 67 | ||
| Total | (3,338) | -1.4 | 2,155 | 0.9 |
| - By geographic area: | ||||
| . Italy | (4,131) | -1.8 | (540) | -0.2 |
| . Foreign countries | 793 | 4.3 | 2,695 | 17.7 |
| Total | (3,338) | -1.4 | 2,155 | 0.9 |
| Net operating result (EBIT) | % | % | ||
| - By operating segment: | on revenues |
on revenues |
||
| . Italian Exhibitions | (18,312) | -10.1 | (11,806) | -6.1 |
| . Foreign Exhibitions | (118) | -0.6 | 1,644 | 10.8 |
| . Stand-fitting Services | 365 | 1.1 | (215) | -0.6 |
| . Media | (4,120) | -33.4 | (7,335) | -61.3 |
| . Congresses | 3,373 | 8.9 | 566 | 2.3 |
| . Adjustments for inter-segment transactions | 19 | 59 | ||
| Total | (18,793) | -7.7 | (17,087) | -7.0 |
| - By geographic area: | ||||
| . Italy | (18,269) | -8.0 | (18,544) | -8.1 |
| . Foreign countries | (524) | -2.9 | 1,457 | 9.6 |
| Total | (18,793) | -7.7 | (17,087) | -7.0 |
| Employees | ||||
| (no. of permanent employees at the end of the period) | ||||
| - By operating segment: | % | % | ||
| . Italian Exhibitions | 437 | 54.2 | 433 | 52.4 |
| . Foreign Exhibitions | 185 | 22.8 | 205 | 24.8 |
| . Stand-fitting Services | 53 | 6.6 | 53 | 6.4 |
| . Media | 95 | 11.8 | 98 | 11.9 |
| . Congresses | 37 | 4.6 | 37 | 4.5 |
| Total | 807 | 100.0 | 826 | 100.0 |
| - By geographic area: . Italy |
622 | 77.1 | 621 | 75.2 |
| . Foreign countries | 185 | 22.9 | 205 | 24.8 |
| Total | 807 | 100.0 | 826 | 100.0 |
Some figures in the Consolidated Financial Statements at 31 December 2013 and in the Consolidated Financial Statements at 31 December 2012 have been restated for comparative purposes following the introduction of IFRS 11 applicable from 1 January 2014.
The activities of the Fiera Milano Group are grouped into five operating segments: Italian Exhibitions, Foreign Exhibitions, Stand-fitting Services, Media, and Congresses.
Revenues from sales and services, before eliminations for inter-segment transactions, were Euro 283.442 million in the year to 31 December 2014, of which 64% was generated by Italian Exhibitions, 7% by Foreign Exhibitions, 12% by Stand-fitting Services, 4% by the Media segment and 13% by the Congress segment.
The gross operating loss was Euro 3.338 million and deteriorated by Euro 5.493 million compared to the previous financial year; the breakdown by operating segment was as follows:
segment. There were higher corporate restructuring costs for the Brazilian companies Cipa FM and Eurofairs and an increase in costs for hiring exhibition space.
The total net operating loss was Euro 18.793 million compared to a net operating loss of Euro 17.087 million in the 2013 financial year, and the breakdown was as follows:
The 807 Group employees at year-end 2014 were divided among the five operating segments as follows: 54% in Italian Exhibitions, 23% in Foreign Exhibitions, 6% in Stand-fitting Services, 12% in Media and 5% in Congresses.
The key figures of the companies in the Foreign Exhibitions segment are given in the table below.
| Summary data for companies | ||||
|---|---|---|---|---|
| in the Foreign Exhibitions segment | ||||
| (Amounts in € '000) | ||||
| 2014 | 2013 | restated | ||
| Revenues from sales and services | ||||
| - by company: | % | % | ||
| . Cipa FM Publicações e Eventos Ltda | 10,621 | 56.6 | 8,723 | 57.1 |
| . Hannover Milano Global Germany GmbH | - | - | - | - |
| . Fiera Milano Exhibitions Africa (PTY) Ltd* | 1,793 | 9.5 | 2,135 | 14.0 |
| . Fiera Milano Interteks Uluslararasi Fuarcilik A.S.** | 2,746 | 14.6 | 2,203 | 14.4 |
| . Fiera Milano India Pvt Ltd | 63 | 0.3 | 13 | 0.1 |
| . Worldex (China) Exhibition & Promotion Ltd*** | 2,659 | 14.2 | 1,733 | 11.3 |
| . Haikou Worldex Milan Exhibition Co. Ltd*** | 356 | 1.9 | 406 | 2.7 |
| . Limited Liability Company Fiera Milano | 548 | 2.9 | 61 | 0.4 |
| . Eurofairs International Consultoria e Partipações Ltda | - | - | - | - |
| Total gross of adjustments | 18,786 | 100 | 15,274 | 100 |
| Gross operating result | ||||
| - by company: | % | % | ||
| . Cipa FM Publicações e Eventos Ltda | 288 | 26.5 | 507 | 18.1 |
| . Hannover Milano Global Germany GmbH | 1,455 | 133.7 | 2,172 | 77.6 |
| . Fiera Milano Exhibitions Africa (PTY) Ltd* | (149) | -13.7 | 160 | 5.7 |
| . Fiera Milano Interteks Uluslararasi Fuarcilik A.S.** | (68) | -6.3 | (441) | -15.7 |
| . Fiera Milano India Pvt Ltd | 38 | 3.5 | (17) | -0.6 |
| . Worldex (China) Exhibition & Promotion Ltd*** | 548 | 50.4 | 622 | 22.2 |
| . Haikou Worldex Milan Exhibition Co. Ltd*** | 101 | 9.3 | 112 | 4.0 |
| . Limited Liability Company Fiera Milano | (180) | -16.5 | (178) | -6.3 |
| . Eurofairs International Consultoria e Partipações Ltda | (945) | -86.9 | (139) | -5.0 |
| Total | 1,088 | 100 | 2,798 | 100 |
| Net operating result (EBIT) | ||||
| - by company: | % | % | ||
| . Cipa FM Publicações e Eventos Ltda | (453) | 384.0 | (285) | -17.2 |
| . Hannover Milano Global Germany GmbH | 1,455 | -1,233.0 | 2,172 | 132.1 |
| . Fiera Milano Exhibitions Africa (PTY) Ltd* | (378) | 320.3 | (93) | -5.7 |
| . Fiera Milano Interteks Uluslararasi Fuarcilik A.S.** | (296) | 250.8 | (547) | -33.3 |
| . Fiera Milano India Pvt Ltd | 38 | -32.2 | (16) | -1.0 |
| . Worldex (China) Exhibition & Promotion Ltd*** | 541 | -458.5 | 619 | 37.7 |
| . Haikou Worldex Milan Exhibition Co. Ltd*** | 101 | -85.6 | 112 | 6.8 |
| . Limited Liability Company Fiera Milano | (181) | 153.4 | (179) | -10.9 |
| . Eurofairs International Consultoria e Partipações Ltda | (945) | 800.8 | (139) | -8.5 |
| Total | (118) | 100 | 1,644 | 100 |
Some figures in the Consolidated Financial Statements at 31 December 2013 and in the Consolidated Financial Statements at 31 December 2012 have been restated for comparative purposes following the introduction of IFRS 11 applicable from 1 January 2014.
The tables on the following pages give the figures for events held at the fieramilano and fieramilanocity venues and abroad in the financial year to 31 December 2014, compared with the figures for the previous two financial years. The tables give the net square metres of exhibition space occupied and the number of participating exhibitors. The events are classified according to how frequently they are held - annual, biennial or multi-annual - and figures for exhibitions directly organised by the Group are also given for each of the periods (the figures have been rounded up to make them easier to read and compare).
| Fiera Milano Group Summary operating figures |
Full year to Full year to 31/12/2014 31/12/2013 |
Full year to 31/12/2012 |
||||
|---|---|---|---|---|---|---|
| Organised | Organised | Organised | ||||
| Total | by the Group | Total | by the Group | Total | by the Group | |
| Number of exhibitions: | 113 | 73 | 113 | 71 | 99 | 55 |
| Italy | 51 | 11 | 54 | 12 | 56 | 12 |
| . annual | 41 | 9 | 39 | 9 | 45 | 10 |
| . biennial | 9 | 1 | 13 | 3 | 9 | 2 |
| . multi-annual | 1 | 1 | 2 | - | 2 | - |
| Foreign countries | 62 | 62 | 59 | 59 | 43 | 43 |
| . annual | 59 | 59 | 53 | 53 | 39 | 39 |
| . biennial | 3 | 3 | 6 | 6 | 4 | 4 |
| . multi-annual | - | - | - | - | - | - |
| Number of congresses with related exhibition space |
37 | - | 34 | - | 34 | - |
| Net sq.metres of exhibition space: | 1,634,425 | 623,275 | 1,738,680 | 803,260 | 1,829,575 | 616,745 |
| Italy | 1,220,125 | 208,975 | 1,333,680 | 398,260 | 1,476,050 | 263,220 |
| . annual (a) | 928,255 | 178,165 | 996,115 | 198,925 | 1,073,245 | 242,580 |
| . biennial | 275,390 | 14,330 | 323,700 | 199,335 | 294,740 | 20,640 |
| . multi-annual | 16,480 | 16,480 | 13,865 | - | 108,065 | - |
| (a) of which congresses with related exhibition space | 33,745 | - | 40,105 | - | 50,825 | - |
| Foreign countries | 414,300 | 414,300 | 405,000 | 405,000 | 353,525 | 353,525 |
| . annual | 376,115 | 376,115 | 369,885 | 369,885 | 317,730 | 317,730 |
| . biennial | 38,185 | 38,185 | 35,115 | 35,115 | 35,795 | 35,795 |
| . multi-annual | - | - | - | - | - | - |
| Number of exhibitors: | 32,790 | 14,275 | 33,085 | 15,840 | 35,080 | 12,500 |
| Italy | 22,430 | 3,915 | 23,430 | 6,185 | 26,975 | 4,395 |
| . annual (b) | 18,625 | 3,365 | 18,870 | 3,620 | 21,530 | 4,015 |
| . biennial | 3,565 | 310 | 4,290 | 2,565 | 3,590 | 380 |
| . multi-annual | 240 | 240 | 270 | - | 1,855 | - |
| (b) of which congresses with related exhibition space | 2,195 | - | 1,905 | - | 3,920 | - |
| Foreign countries | 10,360 | 10,360 | 9,655 | 9,655 | 8,105 | 8,105 |
| . annual | 9,650 | 9,650 | 8,825 | 8,825 | 7,415 | 7,415 |
| . biennial | 710 | 710 | 830 | 830 | 690 | 690 |
| . multi-annual | - | - | - | - | - | - |
The table shows that in the 2014 financial year the percentage of total net square metres of exhibition space covered by annual exhibitions was ca. 80%. Annual exhibitions covered 1,304,370, net square metres of exhibition space, a decrease of 4.5% compared to 2013 and a decrease of ca. 6.2% compared to the figure for 2012. The change compared to 2013 was mainly in the hosted annual exhibitions in Italy (-40,740 square metres compared to 2013, approximately 5%). Biennial exhibitions covered 313,575 net square metres of exhibition space, a year-on-year decrease of ca. 12.6%: there was a decrease in the space occupied by directly organised biennial exhibitions in Italy of 185,005 square metres that was mainly attributable to the absence of TUTTOFOOD and HOST, which was partly compensated by the increase of 136,695 square metres in hosted biennial exhibitions that reflected the presence of Mostra Convegno Expocomfort. The year-on-year increase in the contribution from exhibitions held abroad was 9,300 net square metres of exhibition space, almost 2%. There were fifteen first editions of exhibitions launched in the financial year under review and they covered a total of 71,085 net square metres of exhibition space.
The tables below give comparative figures for the last three financial years for the portfolio of events hosted by the Group in the fieramilano and fieramilanocity sites with an indication of the net square metres of exhibition space occupied and the number of exhibitors classified by how frequently the events are held, and indicating those exhibitions that were directly organised (the figures have been rounded up to make them easier to read and compare).
| Italian exhibition portfolio | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Net sq. metres of exhibition space | Number of exhibitors | ||||||||
| Annual Exhibitions: | Full year to 31/12/2014 |
Full year to 31/12/2013 |
Full year to 31/12/2012 |
Full year to 31/12/2014 |
Full year to 31/12/2013 |
Full year to 31/12/2012 |
|||
| Directly organised | |||||||||
| - Bit | 13,750 | 23,095 | 27,235 | 280 | 295 | 345 | |||
| - Chibimart Summer | 3,310 | 3,620 | 4,245 | 105 | 105 | 115 | |||
| - Chibimart Winter | 2,820 | 2,925 | 2,975 | 95 | 80 | 85 | |||
| - HOMI I semester | 82,210 | 91,590 | 100,585 | 1,275 | 1,425 | 1,540 | |||
| - HOMI II semester | 57,840 | 59,860 | 71,625 | 1,055 | 1,185 | 1,275 | |||
| - Miart - Milano Pret a Porter Fall |
6,360 2,605 |
5,920 2,165 |
4,695 2,830 |
155 150 |
145 110 |
95 130 |
|||
| - Milano Pret a Porter Spring | 2,125 | 2,420 | 4,190 | 105 | 125 | 185 | |||
| - SposaItalia | 7,145 | 7,330 | 7,820 | 145 | 150 | 140 | |||
| - Reatech | a) | a) | 16,380 | a) | a) | 105 | |||
| Total annual exhibitions directly organised | 178,165 | 198,925 | 242,580 | 3,365 | 3,620 | 4,015 | |||
| Hosted | |||||||||
| - Artigiano in fiera | 59,100 | 57,090 | 57,305 | 1,640 | 1,510 | 1,445 | |||
| - Cartoomics | 8,000 | 8,000 | 8,000 | 225 | 240 | 340 | |||
| - Eicma Moto | 86,435 | 93,130 | 85,775 | 455 | 605 | 480 | |||
| - Esposizione Internazionale Canina | 15,000 | 15,000 | 15,000 | 45 | 45 | 55 | |||
| - Expo Italia real estate | 5,580 | 7,385 | 10,450 | 140 | 135 | 170 | |||
| - Expodental | 3,465 | 4,865 | 6,770 | 150 | 180 | 250 | |||
| - Expotraining | 1,405 | 1,550 | 1,565 | 80 | 70 | 130 | |||
| - Fa la cosa giusta | 8,500 | 6,000 | 8,025 | 600 | 700 | 700 | |||
| - G! come giocare | 5,965 | 6,290 | 5,960 | 80 | 80 | 70 | |||
| - Games Week ** | 4,430 | - | - | 20 | - | - | |||
| - Hobby Show (I semester) | 5,000 | 11,665 | 5,000 | 110 | 280 | 145 | |||
| - Hobby Show (II semester) | 5,000 | 5,000 | 4,460 | 160 | 140 | 175 | |||
| - Kali * - Lineapelle Settembre * |
4,015 41,665 |
- - |
- - |
210 1,125 |
- - |
- - |
|||
| - Mido | 40,700 | 40,575 | 40,910 | 910 | 880 | 850 | |||
| - Mifur | 16,885 | 15,895 | 18,045 | 190 | 180 | 190 | |||
| - Milano Auto Classica | 12,545 | 16,030 | 12,745 | 215 | 295 | 200 | |||
| - Milano Unica (Fall) | 18,915 | 19,810 | 20,795 | 420 | 435 | 465 | |||
| - Milano Unica (Spring) | 18,390 | 19,185 | 20,460 | 400 | 420 | 440 | |||
| - Mipel (March) | 12,120 | 13,520 | 14,340 | 355 | 385 | 370 | |||
| - Mipel (September) | 10,640 | 12,820 | 13,445 | 290 | 365 | 385 | |||
| - Promotion Expo | 3,195 | 4,260 | 4,205 | 140 | 170 | 160 | |||
| - Promotion trade exibition | 4,095 | 4,275 | 5,240 | 125 | 115 | 130 | |||
| - Salone del Franchising Milano | 4,035 | 3,815 | 4,105 | 145 | 140 | 145 | |||
| - Salone del mobile/ Complemento d'arredo | 164,620 | 156,450 | 155,015 | 1,240 | 1,185 | 1,205 | |||
| - Smap Expo | 1,300 | a) | 3,000 | 25 | a) | 30 | |||
| - Smau - Super Fall *** ° |
3,290 1,660 |
3,815 - |
4,755 - |
15 200 |
15 - |
25 - |
|||
| - The innovation cloud | 7,800 | 22,500 | - | 200 | 490 | - | |||
| - The Micam (Fall) | 68,080 | 68,100 | 68,355 | 1,480 | 1,495 | 1,470 | |||
| - The Micam (Spring) | 67,910 | 67,455 | 68,565 | 1,490 | 1,445 | 1,475 | |||
| - Viscom - Visual communication | 6,605 | 6,665 | 8,330 | 185 | 175 | 185 | |||
| - Eudishow | a) | 5,320 | 6,650 | a) | 120 | 155 | |||
| - Nuce (previous Life-Med) | a) | 2,000 | 3,340 | a) | 70 | 90 | |||
| - Cartexpo | a) | a) | 3,480 | a) | a) | 85 | |||
| - Festivity | b) | b) | 13,790 | b) | b) | 85 | |||
| - Intecharm | a) | a) | 15,280 | a) | a) | 220 | |||
| - Made Expo | c) | 58,620 | 63,120 | c) | 980 | 1,055 | |||
| - Robotica | a) | a) | 890 | a) | a) | 45 | |||
| - Salone del Libro Usato | a) | a) | 2,670 | a) | a) | 175 | |||
| Total annual exhibitions hosted | 716,345 | 757,085 | 779,840 | 13,065 | 13,345 | 13,595 | |||
| Total annual Exhibitions | 894,510 | 956,010 | 1,022,420 | 16,430 | 16,965 | 17,610 |
| Italian exhibition portfolio | |||||||
|---|---|---|---|---|---|---|---|
| Net sq. metres of exhibition space | Number of exhibitors | ||||||
| Biennial Exhibitions: | Full year to 31/12/2014 |
Full year to 31/12/2013 |
Full year to 31/12/2012 |
Full year to 31/12/2014 |
Full year to 31/12/2013 |
Full year to 31/12/2012 |
|
| Directly organised | |||||||
| - Sicurezza | 14,330 | - | 12,090 | 310 | - | 235 | |
| - Host | - | 100,725 | - | - | 1,555 | - | |
| - Transpotec & Logitec | - | 52,610 | - | - | 165 | - | |
| - Tuttofood | - | 46,000 | - | - | 845 | - | |
| - Fluidtrans compomac | - | - | 8,550 | - | - | 145 | |
| Total biennial exhibitions directly organised | 14,330 | 199,335 | 20,640 | 310 | 2,565 | 380 | |
| Hosted | |||||||
| - Bimu | 37,140 | - | 40,145 | 555 | - | 605 | |
| - Eurocucina | 35,740 | - | 37,585 | 120 | - | 155 | |
| - Mostra Convegno Expocomfort | 125,265 | - | 133,710 | 1,540 | - | 1,520 | |
| - Salone Inernazionale del Bagno | 18,190 | - | 15,850 | 160 | - | 145 | |
| - Sfortec | 630 | - | 900 | 40 | - | 45 | |
| - TPA Italia * ° | 5,930 | - | - | 170 | - | - | |
| - Venditalia | 11,990 | - | 13,725 | 235 | - | 240 | |
| - Xylexpo | 26,175 | - | 32,185 | 435 | - | 500 | |
| - Chem Med | - | 2,470 | - | - | 80 | - | |
| - Enovitis | - | 2,220 | - | - | 55 | - | |
| - Euroluce | - | 38,685 | - | - | 380 | - | |
| - Frameart Expo | - | 4,705 | - | - | 85 | - | |
| - Made in Steel | - | 9,920 | - | - | 210 | - | |
| - Mecha-Tronika ° | - | 2,635 | - | - | 105 | - | |
| - Photoshow | - | 6,910 | - | - | 75 | - | |
| - Salone Ufficio | - | 12,580 | - | - | 95 | - | |
| - Simei | - | 29,430 | - | - | 445 | - | |
| - Vitrum | - | 14,810 | - | - | 195 | - | |
| Total biennial exhibitions hosted | 261,060 | 124,365 | 274,100 | 3,255 | 1,725 | 3,210 | |
| Total biennial exhibitions | 275,390 | 323,700 | 294,740 | 3,565 | 4,290 | 3,590 | |
| Multi-annual Exhibitions: | |||||||
| Directly organised | |||||||
| - Expodetergo ° | 16,480 | - | - | 240 | - | - | |
| Total multi-annual Exhibitions directly organised | 16,480 | - | - | 240 | - | - | |
| Hosted | |||||||
| - Converflex | - | 6,815 | - | - | 140 | - | |
| - Grafitalia | - | 7,050 | - | - | 130 | - | |
| - Ipack-Ima | - | - | 51,760 | - | - | 835 | |
| - Plast | - | - | 56,305 | - | - | 1,020 | |
| Total multi-annual Exhibitions hosted | - | 13,865 | 108,065 | - | 270 | 1,855 | |
| Total multi-annual Exhibitions | 16,480 | 13,865 | 108,065 | 240 | 270 | 1,855 | |
| TOTAL EXHIBITIONS | 1,186,380 | 1,293,575 | 1,425,225 | 20,235 | 21,525 | 23,055 | |
| - Congresses with related exhibition space | 33,745 | 40,105 | 50,825 | 2,195 | 1,905 | 3,920 | |
| TOTAL | 1,220,125 | 1,333,680 | 1,476,050 | 22,430 | 23,430 | 26,975 | |
(*) First edition of this exhibition.
** This exhibition in the previous edition was a congress.
*** The exhibiltion was held for the first time at Fiera Milano exhibition sites.
° The exhibition is co-organised with Fiera Milano.
a) The exhibition did not take place.
b) The exhibition has been included as part of Homi. c) Starting from 2013 the exhibition is held biennially.
The table below gives details of the exhibitions organised abroad. The net exhibition space utilised was 414,300 net square metres (the figures for net square metres of exhibition space have been rounded up to make them easier to read and compare).
| Foreign Exhibition portfolio | ||||||
|---|---|---|---|---|---|---|
| Net sq. metres of exhibition space | Number of exhibitors | |||||
| Full year to | Full year to | Full year to | Full year to | Full year to | Full year to | |
| Annual Exhibitions: | 31/12/14 | 31/12/13 | 31/12/12 | 31/12/14 | 31/12/13 | 31/12/12 |
| Exhibitions directly organised in China | ||||||
| - CeMAT Asia Shanghai | 15,355 | 12,000 | 13,040 | 470 | 410 | 460 |
| - Chinafloor Domotex Shanghai - Comvac Asia |
60,210 5,475 |
58,540 4,705 |
57,760 - |
1,050 150 |
1,120 150 |
1,110 - |
| - Energy Shanghai | 4,855 | 4,580 | 4,805 | 150 | 145 | 105 |
| - Fruit& Forest Xinjiang | 2,500 | 5,000 | - | 210 | 215 | - |
| - GITF International Tour Guangzhou | 4,715 | 4,970 | 5,650 | 210 | 185 | 175 |
| - Heavy Machinery Asia | 1,595 | - | - | 85 | - | - |
| - IA - FA/PA Beijing | 3,865 | 3,010 | 3,260 | 190 | 190 | 135 |
| - Industrial Automation Shanghai - Industrial Automation Shenzen |
23,025 8,035 |
21,010 - |
16,560 7,845 |
605 420 |
545 - |
460 425 |
| - Industrial Supply Asia | 340 | 600 | - | 30 | 50 | - |
| - M3 Fair Hainan | 7,500 | 6,200 | - | 155 | 130 | - |
| - Metalworking and CNC Mach. Tool Shanghai | 22,900 | 21,165 | 21,170 | 445 | 385 | 445 |
| - Motor Show Chengdu | 76,665 | 70,165 | 64,265 | 95 | 90 | 150 |
| - PTC Asia Shanghai - The Micam Shanghai 1° semestre |
31,930 2,940 |
43,860 4,820 |
35,495 - |
1,210 155 |
1,490 250 |
1,335 - |
| - The Micam Shanghai 2° semestre | 2,600 | 4,770 | - | 125 | 240 | - |
| - Food Hospitality World Guangzhou | 4,000 | 3,030 | 5,000 | 380 | 320 | 350 |
| - West China Manufacturing and Industrial Fair | 430 | - | - | 35 | - | - |
| - Wuhan Motor Show | 4,410 | 2,310 | 2,260 | 10 | 5 | 5 |
| - China Commercial Vehicle Show | a) | 21,485 | 21,745 | a) | 140 | 115 |
| - CWMTE - Lijia Chongqing Machine Tool Total Exhibitions directly organised in China |
a) 283,345 |
140 292,360 |
200 259,055 |
a) 6,180 |
5 6,065 |
5 5,275 |
| Exhibitions directly organised in India | ||||||
| - CeMAT India | 1,935 | 2,060 | 1,775 | 75 | 60 | 65 |
| - CeBIT India * | 5,200 | - | - | 350 | - | - |
| - Food Hospitality World Bangalore | 1,950 | 2,375 | 2,905 | 70 | 75 | 115 |
| - Food Hospitality World Mumbai | 2,390 | 2,385 | 2,405 | 155 | 125 | 155 |
| - Industrial Automation India | 1,405 | 935 | 920 | 60 | 40 | 60 |
| - Industrial Supply India - MDA India |
1,100 1,445 |
520 1,440 |
- 2,045 |
80 50 |
20 100 |
- 115 |
| - Plugged-In India * | 1,500 | - | - | 45 | - | - |
| - Surface Technology | 375 | 515 | 340 | 30 | 40 | 25 |
| - The China Products Show India | 3,250 | 3,500 | - | 170 | 140 | - |
| - Laser India | a) | a) | 245 | a) | a) | 10 |
| Total Exhibitions directly organised in India | 20,550 | 13,730 | 10,635 | 1,085 | 600 | 545 |
| Exhibitions directly organised in Russia - HOMI Russia |
2,600 | 1,210 | 1,210 | 95 | 75 | 50 |
| Total Exhibitions directly organised in Russia | 2,600 | 1,210 | 1,210 | 95 | 75 | 50 |
| Exhibitions directly organised in Turkey | ||||||
| - Art International Istanbul | 3,830 | 2,255 | - | 75 | 60 | - |
| - Beauty & Care Ankara | 1,670 | 2,530 | 2,135 | 45 | 55 | 50 |
| - Beauty & Care Istanbul | 5,930 | 5,535 | - | 125 | 105 | - |
| - Home & Garden Istanbul - Promoturk * |
3,015 4,115 |
2,480 - |
- - |
65 70 |
40 - |
- - |
| - Pro-Show | 1,870 | 1,300 | - | 15 | 15 | - |
| - Transist | 3,365 | 2,850 | 2,815 | 60 | 55 | 45 |
| - Zhejiang Trade Fair * | 1,280 | - | - | 140 | - | - |
| - Marathon Expo | a) | 1,930 | 2,140 | a) | 45 | 40 |
| - Yacht Show | a) | a) | 1,390 | a) | a) | 40 |
| Total Exhibitions directly organised in Turkey Exhibitions directly organised in South Africa |
25,075 | 18,880 | 8,480 | 595 | 375 | 175 |
| - Cape Town Art Fair | 850 | 310 | - | 45 | 40 | - |
| - Food Hospitality World Cape Town * | 1,325 | - | - | 85 | - | - |
| - Good Food & Wine Show Cape Town | 3,250 | 4,170 | - | 195 | 235 | - |
| - Good Food & Wine Show Durban | 2,700 | 2,690 | - | 145 | 155 | - |
| - Good Food & Wine Show Gauteng | 3,300 | 4,185 | 3,910 | 180 | 260 | 240 |
| Total Exhibitions directly organised in South Africa Exhibitions directly organised in Thailand |
11,425 | 11,355 | 3,910 | 650 | 690 | 240 |
| - The China Products Show Bangkok | 2,500 | 1,500 | - | 95 | 80 | - |
| Total Exhibitions directly organised in Thailand | 2,500 | 1,500 | - | 95 | 80 | - |
| Exhibitions directly organised in Brazil | ||||||
| - Enersolar | 995 | 2,055 | 2,460 | 35 | 105 | 160 |
| - Exposec ** | 11,355 | 12,670 | 13,730 | 180 | 220 | 310 |
| - Fast Bahia * | 250 | - | - | 25 | - | - |
| - Fast Goiana * - Fast Rio de Janeiro * |
215 180 |
- - |
- - |
25 20 |
- - |
- - |
| - Fecontech * | 410 | - | - | 30 | - | - |
| - Fippa-pet show | 3,150 | 770 | 1,710 | 110 | 65 | 90 |
| - Food Hospitality World | 690 | 1,970 | - | 40 | 65 | - |
| - Gospel | 950 | 695 | 865 | 30 | 50 | 40 |
| - Infocomm * | 800 | - | - | 30 | - | - |
| - Magnum - Reatech, FisioTech |
285 8,110 |
380 9,100 |
700 8,585 |
10 265 |
10 290 |
20 260 |
| - The China Products Show Brasil * | 3,000 | - | - | 130 | - | - |
| - Riosec | 230 | 520 | - | 20 | 35 | - |
| - Biotech | b) | 665 | 230 | b) | 40 | 20 |
| - Feinox | a) | 160 | 965 | a) | 5 | 30 |
| - Macef Brasil | a) | 1,825 | 2,105 | a) | 50 | 55 |
| - Sonotec - Itech |
a) b) |
40 b) |
- 110 |
a) b) |
5 b) |
- 15 |
| - Reacess | a) | a) | 2,055 | a) | a) | 100 |
| - Taxi Point | a) | a) | 925 | a) | a) | 30 |
| Total Exhibitions directly organised in Brazil | 30,620 | 30,850 | 34,440 | 950 | 940 | 1,130 |
| Total Annual Exhibitions | 376,115 | 369,885 | 317,730 | 9,650 | 8,825 | 7,415 |
Board of Directors' Management Report 48
| Foreign Exhibition portfolio | |||||||
|---|---|---|---|---|---|---|---|
| Net sq. metres of exhibition space | Number of exhibitors | ||||||
| Biennial Exhibitions: | Full year to 31/12/14 |
Full year to 31/12/13 |
Full year to 31/12/12 |
Full year to 31/12/14 |
Full year to 31/12/13 |
Full year to 31/12/12 |
|
| Exhibitions directly organised in China | |||||||
| - Aviation & Space Fair Shanghai * | 1,200 | - | - | 55 | - | - | |
| - WoodMac China | - | 15,950 | - | - | 250 | - | |
| Total Exhibitions directly organised in China | 1,200 | 15,950 | - | 55 | 250 | - | |
| Exhibitions directly organised in Brazil | - | - | |||||
| - Fesqua-Vitech | 13,845 | - | 12,075 | 285 | - | 220 | |
| - Fisp-Fire | 23,140 | - | 22,950 | 370 | - | 450 | |
| - Braseg | - | 2,745 | - | - | 95 | - | |
| - Saie | - | 1,280 | - | - | 45 | - | |
| - Tubotech | - | 10,715 | - | - | 305 | - | |
| - Wire South America | - | 3,305 | - | - | 25 | - | |
| - Arctech | - | - | 770 | - | - | 20 | |
| Total Exhibitions directly organised in Brazil | 36,985 | 18,045 | 35,795 | 655 | 470 | 690 | |
| Exhibitions directly organised in Singapore | |||||||
| - Rehabtech Asia c) | - | 1,120 | - | - | 110 | - | |
| Total Exhibitions directly organised in Singapore | - | 1,120 | - | - | 110 | - | |
| Total Biennial Exhibitions | 38,185 | 35,115 | 35,795 | 710 | 830 | 690 | |
| TOTAL EXHIBITIONS | 414,300 | 405,000 | 353,525 | 10,360 | 9,655 | 8,105 |
* First edition of this exhibition
** The exhibition in 2012 and 2013 also included Traffic
a) The exhibition did not take place
b) The exhibition became a congress
c) The exhibition is a joint project with the Singaporean company Singex Exhibitions Ventures Pte Ltd
At 31 December 2014 the permanent employees of the Group totalled 807 compared to 826 at 31 December 2013.
| Permanent employees at year end (units) |
|||||||||
|---|---|---|---|---|---|---|---|---|---|
| 31/12/14 | 31/12/13 | 31/12/12 | |||||||
| Foreign | Foreign | Foreign | |||||||
| Fully consolidated companies: | Total | Italy | countries | Total | Italy | countries | Total | Italy | countries |
| Executives | 46 | 39 | 7 | 43 | 37 | 6 | 42 | 37 | 5 |
| Managers and White collar workers (including Journalists) | 698 | 583 | 115 | 730 | 584 | 146 | 662 | 575 | 87 |
| Total | 744 | 622 | 122 | 773 | 621 | 152 | 704 | 612 | 92 |
| Proportionally consolidated companies (a): | |||||||||
| Executives | 2 | - | 2 | 2 | - | 2 | 2 | - | 2 |
| White collar workers | 61 | - | 61 | 51 | - | 51 | 45 | - | 45 |
| Total | 63 | - | 63 | 53 | - | 53 | 47 | - | 47 |
| TOTAL | 807 | 622 | 185 | 826 | 621 | 205 | 751 | 612 | 139 |
| (a) the indicated data corresponds to the pro-quota of total employees |
The decrease in the number of employees in 2014 compared to 2013 was 19 and was mainly as a result of changes in personnel in the foreign subsidiaries.
In 2014, 92 persons joined the Group, of which 11 in Italy as part of the ongoing effort to strengthen the marketing and international development departments, and 81 abroad, mainly due to the reorganisation of the Brazilian companies.
In 2014, 111 persons left the Group, of which 10 in the Italian companies – mainly voluntary resignations and agreed employment terminations - and 101 persons abroad.
The turnover of employees, calculated as the difference between those joining and those leaving the Group as a percentage of the average number of employees, was 24.8% compared to 27.9% in 2013.
Fiera Milano Group uses employees on fixed-term contracts to manage the peaks of activity in the exhibition calendar. Personnel with fixed-term contracts went from nine at 31 December 2013 to 33 at the end of 2014.
The Italian companies within the Fiera Milano Group, except for those companies in the publishing sector (which employ personnel under the national collective employment agreement for graphic design, publishing and industrial companies), uses the national collective employment agreement for tertiary, distribution and service companies.
The employees of Fiera Milano Group are divided into three main categories:
The Italian division of the Fiera Milano Group has no manual workers as the supply and organisation of exhibition services is outsourced.
Outside Italy each company applies the employment law of the jurisdiction in which it is based.
Fiera Milano Group considers the safety of its personnel an essential requisite for which it is prepared to make significant investments. During the 2014 financial year safety training was organised for employees with technical responsibilities.
In 2014 the number of training sessions held in Italian Group companies was higher than in 2013.
The 2014 programme focused on technical and specialist foreign language training (through seminars and telephone conversations); there were also mandatory training and instruction courses (first aid and fire and safety refresher courses) and other courses to develop the relevant competences of each company (computer-based rendering, new media for business, writing for the internet, audio-visual techniques).
257 members of staff took part in the training programmes for a total of 173 person days and the courses covered 40 subjects. Fifteen courses were organised internally and were customised and 25 were external courses.
Although it has no formal Corporate Social Responsibility Plan, Fiera Milano SpA follows the principles of such a plan and aims to develop awareness and transparency regarding personnel, client satisfaction and the environment.
Since the beginning of the financial year under review, this section of the Financial Statements has been expanded to cover all the companies within the Fiera Milano Group whereas in the 2013 Financial Statements it covered just the Parent Company.
Human resources are indispensable to the survival of the business. The dedication and professionalism of the employees are determining factors in achieving the goals of Fiera Milano. The Company is committed to developing the abilities and competence of each employee to ensure that the energy and creativity of every one of them find their full expression and lead to the employee realising his/her potential.
There were 622 permanent employees in the Italian companies of the Fiera Milano Group at 31 December 2014.
The number of permanent employees increased by one compared to the end of the 2013 financial year. In 2014 eleven persons joined the Group to strengthen the marketing and international development departments and to meet legal requirements (protected groups). Ten employees left mainly as a result of voluntary resignations or agreed employment terminations.
The employee turnover rate, calculated as the difference between those joining and those leaving the Italian group companies as a percentage of the average number of employees, was 3.4% in 2014 compared to 7.2% in 2013.
The number of part-time employees went from 79 in 2013 to 75 in 2014 and 63 were horizontal part-time employees and 12 were vertical part-time employees.
The breakdown of employees by educational qualifications shows that between the end of 2013 and the end of 2014 the percentage of employees with degrees went from 41.5% to 42.4%, indicating that new employees tend to be almost exclusively persons with a university degree.
The average age of the employees in the Italian Group companies was 45.1 years: more than 50% of employees were younger than 45 years of age.
The breakdown by length of service in the Italian companies of Fiera Milano Group indicated a high degree of employee loyalty and was in line with the figures for the previous financial year.
| Breakdown by employment role | Male Female |
Total | ||||
|---|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |
| Executives | 28 | 27 | 11 | 10 | 39 | 37 |
| Managers | 69 | 68 | 40 | 40 | 109 | 108 |
| White collar workers | 164 | 166 | 310 | 310 | 474 | 476 |
| Total | 261 | 261 | 361 | 360 | 622 | 621 |
| Type of employment | Male Female |
Total | ||||
|---|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |
| Full-time | 257 | 253 | 290 | 289 | 547 | 542 |
| Horizontal part-time | 4 | 4 | 59 | 58 | 63 | 62 |
| Vertical part-time | - | 4 | 12 | 13 | 12 | 17 |
| Total | 261 | 261 | 361 | 360 | 622 | 621 |
| Breakdown by educational qualification | Male | Female | Total | ||||
|---|---|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||
| University degree or equivalent | 96 | 94 | 168 | 164 | 264 | 258 | |
| Uppersecondary school education | 149 | 151 | 179 | 182 | 328 | 333 | |
| Lowersecondary school education | 16 | 16 | 14 | 14 | 30 | 30 | |
| Total | 261 | 261 | 361 | 360 | 622 | 621 |
| Breakdown by age | Executives | Managers | White collar workers | Total | ||||
|---|---|---|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |
| Up to 35 years | - - | 2 | 2 | 75 | 85 | 77 | 87 | |
| 35 to 44 years | 5 | 5 | 36 | 37 | 190 | 191 | 231 | 233 |
| 45 to 54 years | 23 | 25 | 42 | 44 | 163 | 161 | 228 | 230 |
| > 55 years | 11 | 7 | 29 | 26 | 46 | 38 | 86 | 71 |
| Total | 39 | 37 | 109 | 109 | 474 | 475 | 622 | 621 |
| Breakdown by length of service - 2014 | Executives | Managers | White collar workers | Total | ||||
|---|---|---|---|---|---|---|---|---|
| Male | Female | Male | Female Male |
Female | Male | Female | ||
| < 10 years | 16 | 8 | 22 | 11 | 87 | 154 | 125 | 173 |
| From 10 to 19 years | 10 | 1 | 26 | 22 | 52 | 95 | 88 | 118 |
| From 20 to 29 years | 1 | 1 | 10 | 6 | 15 | 44 | 26 | 51 |
| From 30 to 34 years | 1 - |
5 - |
8 | 8 | 14 | 8 | ||
| > 35 years | - | 1 | 6 | 1 | 2 | 9 | 8 | 11 |
| Total | 28 | 11 | 69 | 40 | 164 | 310 | 261 | 361 |
Fiera Milano SpA considers it fundamental to its management policy to offer every employee the same opportunities to develop his/her aptitude and ability with no discrimination on the grounds of race, gender, age, nationality, religion or personal beliefs.
As regards the employment of women, Fiera Milano SpA, in compliance with Legislative Decree no. 198 of 11 April 2006, prepares a biennial report on gender equality in new hirings, training, promotion and other factors so as to provide an overview of the breakdown of employees by gender.
At the end of 2014, female employees were 58% of total employees with the highest percentage in the category of office staff (65%) whilst they made up 37% of middle management and 28% of executives with managerial responsibilities.
Between 2013 and 2014, the number of female employees rose from 360 to 361. Seven of the eleven employees recruited in 2014 were women.
The table below shows the breakdown of female employees:
All the Italian companies in the Fiera Milano Group use the National Collective Employment Agreement for employees of companies in the tertiary, distribution and services sectors except for companies in the publishing sector, which employ personnel under the National Collective Employment agreement for Graphic Designers or Similar, and Publishing Companies including multimedia companies, and the National Collective Employment Agreement for Journalists.
The employees fall into three main categories:
The Italian companies of the Fiera Milano Group have no manual workers as the supply and organisation of exhibition services is outsourced.
In addition to the National Collective Employment Agreement, some Group companies have a supplementary three-year company contract for non-executive personnel.
Incentive schemes for the employees of the Italian companies of the Group include company mobile telephones, company cars for both private and business use for all executives and those travelling on business, a canteen, health insurance policies for managers and executives and, for all other employees who are neither managers nor executives, a non-contributory payment of 3% of annual gross salary to the state supervised additional voluntary contribution pension scheme (PREVIP). In 2014, employees belonging to this pension fund numbered 312 compared to 258 in 2013.
Fiera Milano SpA also has a Company Recreational and Welfare Club for Employees (Circolo Ricreativo Aziendale Lavoratori - CRAL) which, in addition to being a recreational facility, also provides a bonding opportunity for employees. The Club organises entertainments and sporting activities, in particular, an annual football tournament for the main European itinerant exhibitions that rotates among the leading European cities.
Fiera Milano is also prepared to facilitate purchases through commercial agreements with some suppliers of goods and services that benefit employees and also consolidate its position within the region.
Fiera Milano – in an economic scenario that remains difficult – has strengthened its commitment to its human resources by seeking to identify alternative methods of enhancing the welfare of employees whilst, at the same time, containing company costs.
The Corporate Welfare Plan, set up in 2013 and implemented from January 2014, comprises social services, public services and work-life balance services to which the Company dedicates an equal sum of money per employee. The Plan can be accessed through "WellFair", an on-line site where employees can choose from among the services identified by the Company. In this way, each employee can "build" his/her packet of benefits and manage them independently until the credit allocated to each employee is exhausted.
The goods and services offered on the "WellFair" site are extensive and include education, health plans, pension funds, baby-sitters and social workers, sports, holiday packages, culture, shopping coupons, legal advice, and house maintenance. The feedback received during the year under review was very positive and 98% of those who accessed the Plan expressed their appreciation. This provides an impetus to continue the search for other innovative instruments, in addition to the normal remuneration policy, that will motivate employees and increase their loyalty to the Company. The success of this project means that the benefits will be extended to other Italian companies within the Group starting in 2015.
In addition to the terms of the Collective Employment Agreement, under the Supplementary Company Contract there is an annual variable remuneration (results bonus). This results bonus is linked to the achievement of profitability targets and is also dependent on the gross operating profit of the Company reaching the pre-established minimum level included in the Industrial Plan.
In 2014, the number of working days dedicated to training employees in the Italian companies of the Group was higher than in 2013: 173 days dedicated to 40 different activities (15 customised and organised in-house and 25 held externally) compared to 152 days in the previous financial year. In 2014, 257 employees were involved in these initiatives.
Training focused on technical and specialist foreign language skills (through seminars and telephone conversations), mandatory training and instruction courses (first aid, fire safety, and health & safety refresher courses) and individual courses to develop the relevant competences of each company (computer-based rendering, new media for business, writing for the internet, audio-visual techniques).
100 employees working in marketing took a training course called " The Cure" to improve their sales skills and expertise and the know-how required of exhibition sales persons and to learn new methods of approaching potential clients that focused primarily on listening to the ever-changing requirements of clients. Using the "edutainment" system, the course, held in several stages, concluded with employees acting out and making short videos of potential client situations. The short videos were shown to all Group employees at the year-end convention at which prizes were awarded along the lines of the Oscars. The courses were run with the continuous training input also of the Lombardy Region.
There was also a managerial development programme for up and coming young employees of the Company and for those asked to take on new roles and face new challenges. The main aim of the programme was to help employees identify and develop the reasons for their personal success and hone them in order to generate concrete end-results that enable them to make decisions of benefit to the different departments to which they belong.
Part of the programme was specifically aimed at the executive business team of Fiera Milano SpA. It focused on "action learning" with the aim of integrating the business team and developing its ability for innovation, creativity and team effort in order to create greater trust among the various team members. This course was run with financing from the Inter-professional Fund for Continuous Training (FONDIR - Fondo Paritetico Interprofessionale per la Formazione Continua).
The Group invested Euro 190,487 in training for the Italian Group companies in 2014, equal to 0.44% of total employee expenses.
The safety of all its employees is of primary importance to the Fiera Milano Group and it makes significant investments to ensure their safety.
| Injuries suffered by Fiera Milano employees | 2014 | 2013 |
|---|---|---|
| Employees | 622 | 621 |
| Fatal injuries | - | - |
| Serious injuries | 1 | - |
| Total injuries | 7 | 6 |
| Absence days | 271 | 101 |
| Injury ratio | 11.25 | 9.66 |
| Injury frequency ratio | 6.79 | 5.56 |
| Seriousness ratio | 0.26 | 0.09 |
| (€ '000) | 2014 | 2013 |
|---|---|---|
| Accident prevention regulations | 2.2 | 5.3 |
| Health tests | 23.0 | 22.6 |
| Environmental analyses, workplace phonometric tests | 17.1 | 3.9 |
| Training | 10.1 | 17.4 |
In 2007 Fiera Milano SpA signed a memorandum of understanding with the Milan branches of the CGIL, CISL and UIL trade unions, the relevant trade associations and the Company representative of the Italian group of trade unions for occupational safety and legality.
Under this memorandum of understanding certain initiatives have been taken that include the following:
occupational safety measures or the non-fulfilment of the correct payment obligations under the law.
Over the years measures have been taken to increase occupational safety and legality and counter the phenomenon of illegal and clandestine employment. To this end, at the end of 2014, a dialogue was instigated with the Department of Employment for the Area of Milan (Direzione Territoriale del Lavoro di Milano) and a Memorandum of Understanding signed on 16 January 2015 to implement preventative measures to safeguard employee safety and legality through training, dissemination of information and discussion. This was an initiative welcomed by both parties and aimed at the correct application of employment laws to ensure occupational safety through choices and solutions for the safe, transparent and legal growth of the exhibition business. The focus area was an analysis of employment contracts and standard rules in the employment market that directly and indirectly serves events organised and hosted in the Fiera Milano exhibition sites, informing and eventually involving all social partners.
Fiera Milano SpA recognises the role played by the trade unions and by employee representatives, organised in compliance with the law, and maintains relations with them marked by mutual respect, dialogue and a constructive exchange of ideas.
Employees may choose freely whether to join a trade union; they may join trade unions under the regional regulations and methods laid down by the different trade unions.
The trade unions to which Fiera Milano employees belong are: FILCAMS-CGIL (Federazione Italiana Lavoratori Commercio e Turismo - Confederazione Generale Italiana del Lavoro), FISASCAT-CISL (Federazione Italiana Sindacati Addetti Servizi Commerciali, Affini e del Turismo - Confederazone Italiana Sindacati Lavoratori), UILTuCS-UIL (Unione Italiana Lavoratori Turismo Commercio e Servizi – Unione Italiana del Lavoro), SLC-CGIL (Sindacato Lavoratori Comunicazione - Confederazione Generale Italiana del Lavoro) and COVELCO (Contributo Vertenze Lavoratori Commercio).
The percentage of employees belonging to trade unions fell from 21% in 2013 to 20% in 2014.
Fiera Milano uses internal communication as an information tool to transmit and share the values, aims and results achieved by the Fiera Milano Group.
The means used include:
In 2014, the corporate convention was held at the end of a training programme that had as its theme "putting the client at the centre". During the event, a group of colleagues employing edutainment methods presented the results of the course through five short videos that used storytelling to describe daily relationship contacts with the clients of Fiera Milano.
Meetings between the top management and all employees are held when the Strategic Plan, the Industrial Plan and the Directors' Management Report for the Year are finalised so that employees are briefed and share in the aims and results of the Group.
In June 2014 a KID'S DAY was held for the first time. This was an event entirely dedicated to the children of Group employees. Various themed areas were created in the Centro Servizi: creativity, games, socialisation, and freedom of emotional expression.
In 2014, four video interviews were recorded with the Chief Executive Officer to coincide with the release of the Group results and were made available on the intranet so that all employees would be aware of current business trends.
In 2014, the various sections of the Company intranet were updated and enhanced so as to increase their attraction and use.
Fiera Milano Today is a newsletter for Fiera Milano stakeholders published on the website www.fieramilano.it and giving information on the activities of Fiera Milano, the region in which it is based and on the exhibition sector in general.
The internationalisation of the Company has inevitably led to the spread of communication systems that are easy to use and that help integrate geographically widespread colleagues.
The project to extend Wi-Fi to all areas of the Rho exhibition site was completed in May 2014. The system has dedicated bandwidths for clients and visitors, collaborators and suppliers and for all employees.
In January 2014, the new HRM system was installed on the human resources portal. This permits all employees to access information that relates to them and includes: personal data, employment contract, remuneration, absenteeism, holidays/permits, overtime, work experience, training (in-house and external), etc. Employees can also insert/update certain relevant information, for example, on education and training, on knowledge of foreign languages, on civil status and can also expand documents like the curriculum vitae and training certificates. The positive results generated by the system have led to the decision that it be extended to all Italian companies in the Fiera Milano Group from the start of 2015.
In 2014 a new web-based system for assessing employee capabilities was installed as part of the HRM system. The new system has three parts: an employee self-assessment, an assessment
made by the relevant company manager and, lastly, a discussion held in individual interviews to gain feedback. The final outcome of the assessments and the interviews were studied by the Department for Organisation and Human Resources in order to implement any action considered opportune; these could include training to bridge any existing gap in the abilities of the employee to carry out a specific role or an evaluation of his/her career progression.
The nature of the exhibition business means that behind the commonly used term "clients" there are two large macro groups whose interests and characteristics vary greatly: true clients (who are exhibitors and organisers) and visitors.
Exhibitors and organisers are any entity that has an exchange-based relationship with Fiera Milano: Fiera Milano rents space and offers exhibition services positioning itself as the ideal partner for business development; the exhibitor participates in the exhibition to strengthen its client network and to find new clients that will help grow its revenues; an exhibition is deemed a success for the organiser if it meets the requirements of the exhibitors but success is also dependent on the number of visitors and buyers the exhibition attracts.
The presence of foreign exhibitors and visitors gives the exhibition an international character that increases its competitive position vis à vis international exhibitions in the same sector.
In 2014, 20,235 exhibitors took part in the exhibitions held in Italy (of which 32% were foreign exhibitors) compared to 21,525 (of which 28% were foreign) in 2013.
For hosted exhibitions, the Group offers a range of structural services required for running an exhibition (known as "basic services") in addition to furnished exhibition space. These are (i) safety coordination; (ii) fixed services (reception); (iii) structural technical services; (iv) basic exhibition security; (v) cleaning and (vi) administrative services.
In addition to the space and basic services listed above, the Group also offers a series of supplementary services that are available at the request of the Organiser,:
Logistics and ancillary services organised by the Group and supplied by specialist sector companies include the presence in the Rho exhibition site of a transport company, internal transport and transport around the exhibition site, banks, emergency facilities and travel agencies.
The Group business of exhibition organisation has the following stages: (i) identifying the exhibition concept; (ii) identifying the space required and the dates of the exhibition; (iii) the sale of space to exhibitors; (iv) identifying marketing strategies aimed at trade and non-trade visitors; and (v) the running of the exhibition and customer satisfaction analysis.
Exhibitors that take part in an exhibition benefit from all the services supplied by the Group to the Organisers but are also direct clients of the Group if they request the direct supply of specific services.
Exhibitors are offered direct services through an on-line platform where they can request any services required or through direct contact with the Group sales network. Exhibitors can also ask for estimates for the supply of customised services.
The Company offers exhibitors all the necessary services required to participate in an exhibition that include: utility connections, logistic services, technological and surveillance equipment, and standard or customised stand-fitting services.
Stand-fitting services are also supplied to organisers for those exhibitions that use predesigned and uniform stands (pre-assembled stands).
Following the move to the Rho exhibition site, the business of supplying showrooms and services that include market and sponsorship, was developed. The Company is the authorised agent for all advertising inside the exhibition sites.
The Group has all risk insurance policies to cover any risk to the exhibitors arising from their participation in an exhibition hosted by the Fiera Milano Group.
The communication services organised and managed by a specialist team in the Group include the identification and management of communication strategies and the organisation of press conferences, both inside and outside the exhibition sites. This service also includes planning and the purchase and sale of advertising space in the media on behalf of the organisers.
Visitors fall into two categories depending on the type of exhibition they are attending.
These are (i) B2C (business to consumer) exhibitions or general exhibitions and market fairs that are not trade fairs that usually attract members of the general public interested in comparing products and perhaps making a purchase; (ii) B2B (business to business) exhibitions or trade fairs for professional visitors who are executives, technicians and distributors for Italian and foreign companies who want to compare, evaluate and study products in which they have a specific interest.
The attendance figures for an exhibition and the provenance of the visitors help building the reputation of the exhibition and are, therefore, integral contributors to its success.
In 2014, 5.1 million people visited the exhibitions held in Italy.
Visitors use the services supplied by the Group to the exhibition organisers and exhibitors but can also be considered direct clients of the exhibition system when they use some of the services made available by the Group inside the exhibition site. These include catering services, parking, public utility services, travel agencies, and internet and telecommunication services.
The Company offers, in association with selected partners, catering facilities for visitors, exhibitors, and internal and external operators. In conjunction with its commercial partners, the Company manages fixed catering points in a variety of formats and offers.
The catering network comprises 84 fixed food outlets and over 20 additional catering formats for a total of 10,000 seats and 900 catering occasions per annum.
In order to offer the widest range possible and to meet all requirements there are three catering outlets certified by the Associazione Italiana Celiachia (Italian Celiac Association), whilst the food outlets situated along the central axis of the site offer products suitable for those who are lactose intolerant.
For exhibitions where it is possible to forecast a large number of visitors with specific culinary requirements and traditions, Fiera Milano, together with the event secretary, organises the supply of specialist foods.
The table below lists all the services Fiera Milano makes available to clients.
In September 2014, Fiera Milano set up a project to measure customer satisfaction at the directly organised exhibitions in Italy. The pilot exhibition chosen to trial the project was Milano Prêt-àporter – MIPAP held in September 2014. The project is continuing in 2015 and will eventually be rolled out for all the directly organised exhibitions in Italy.
This was a 360˚ survey which had the dual aims of measuring the satisfaction and loyalty of clients, exhibitors and visitors and, using objective date, evaluating the repositioning of the exhibition and using the information obtained as the basis for the strategic decisions to be taken from 2015 onwards.
The survey involved 576 Italian and foreign visitors and 75 exhibitors, of which 62.2% were Italian, 15.8% were foreign and covering 50.3% of those at MIPAP.
Positive feedback regarding participation in the exhibition from the exhibitors was 50.7%.
47.2% of returning exhibitors believed that the event was growing and 78% of exhibitors surveyed said that they would like to take part in future editions of the exhibition.
50.6% of visitors interviewed were positive about their experience at the event.
70.9% of visitors surveyed were positive about the quality of the welcome they received.
150 visitors responded to a request to indicate possible improvements to future editions of the exhibition. Two areas were consistently mentioned: NEW BRANDS and INNOVATION. These indications were also reflected in the survey answers that expressed dissatisfaction with the visit to the exhibition and have been analysed and discussed in order to improve the exhibition. They resulted in the February 2015 edition of MIPAP having a new logo and a completely new image.
The first survey in 2015, the results of which are still being analysed, was carried out at HOMI January with all the exhibitors and about 3,000 visitors being surveyed.
The aim of collecting customer satisfaction feedback from exhibitors and visitors at HOMI 2015 is to gather information and strategic elements for understanding the evolving requirements of visitors and aligning the HOMI concept to these requirements.
The idea is to build up a body of value added information that may be considered by all entities taking part in the exhibition a means of commercial development and strategic support for future decisions that are in line with the Group strategies.
As part of its Quality Management System, Fiera Milano has adopted a management procedure for documented complaints which is described in the Integrated Management System, called "PR10 – client complaints management". The Company collects complaints from clients received by the company departments through direct client contacts, the reception service and the customer service department and by e-mail to the contact e-mail addresses on the Company website.
The Group Certification Department is responsible for:
Fiera Milano has set up a dedicated structure (customer services) to manage and resolve any complaints received during an event. This management approach means that the Company can prevent any subsequent formal complaints from clients. In 2014, this resulted in only ten formal complaints received from clients:
The complaints were mainly about the cleaning services and the infrastructure. The very low number of complaints compared to the number of events and the number of persons frequenting the exhibition site indicates a good level of client satisfaction.
The clients of Nolostand fall into the following categories:
As part of the Integrated Management System of Nolostand, a complaints management system has been prepared which is described in the system procedure under PG07 Analysis of Client Satisfaction. Under this procedure complaints are collected by the departments in direct contact with the client and through any e-mails sent to the e-mail addresses on the company website.
Any complaints received must be registered in the Register of Non-conformance, Corrective Measures and Preventative Measures kept by the department to which the complaint was made.
The focus of the marketing department is to assist the client during all phases of managing the exhibition so as to anticipate and satisfy any client requirements and avoid any potential breakdown in service.
In 2014, Nolostand received four formal complaints. The effectiveness of Nolostand's Integrated Management System was demonstrated by its capacity to anticipate any critical situations that could give rise to complaints from clients.
Those frequenting the exhibition site are covered by two types of insurance policy:
| POLICY TYPE | CLAIMS 2014 | CLAIMS 2013 |
|---|---|---|
| EXHIBITORS (theft, accident, all risks) | 403 | 489 |
| PICKPOCKETING | 21 | 48 |
| TOTAL | 424 | 537 |
| Average settlement period (days) | 76 | 78 |
In 2014 a Group Certification Department was set up, which is responsible for ensuring that the necessary processes for the continuous development of the management systems used by all Group companies are prepared, implemented and kept updated and apply, at the behest of any of the companies, new organisational management systems that adhere to the main international standards, so as to monitor and improve management of the overall impact. In the financial year under review the following goals were met:
Fiera Milano SpA aims to excel as a partner to all its clients offering strategic and consultancy advice. As early as 2002, Fiera Milano SpA implemented a company management system which places at its centre the needs of visitors, exhibitors and organisers and that, in June 2014, proved its success by having its ISO 9001:2008 certification renewed; this is an international standard to support organisations in quality management in order to improve the service offered to clients by respecting and anticipating their requirements.
Currently the Quality Management System applies to some key areas of the organisation: customer services, reception, and hospitality during the exhibitions that include reception services and information desks, technical assistance for exhibitors, cleaning, security and logistics/ internal circulation.
Nolostand SpA, the Fiera Milano Group company that is the leader in the engineering and construction of exhibition stand fittings for all product sectors, uses a management system that offers its clients a completely sustainable service, particularly as regards occupational health and safety, environmental protection and the requirements of its clients.
Nolostand SpA is developing its business and at the same time creating an environment that guarantees maintenance of occupational health and safety standards, minimises its environmental impact and meets the requirements of its clients. As early as 2001, Nolostand SpA started to manage these areas through a Quality Management System with ISO 9001:2008 certification. In 2011, the Management System received ISO 14001:2004 and OHSAS 18001:2007 certification; the former specifies requirements for an Environmental Management System whilst the latter governs the Occupational Health and Safety Management System.
During 2014 the company was awarded the newly instituted UNI ISO 20121:2013 certificate for Event Sustainability Management Systems.
With this certificate Nolostand SpA also received BEST4 (Business Excellence Sustainable Task) certification from RINA; this is reserved for entities that have a Management System demonstrating excellence in Quality, the Environment, Safety and Social Accountability. Nolostand SpA is the first stand-fitting company worldwide to receive this certificate.
Nolostand SpA also involved its main suppliers, as well as its own employees, in its move to sustainability. With their help it aims to supply a premium quality service but with the occupational health and safety measures to protect its employees and to build, together with its stakeholders, a healthy and safe environment. Therefore, it favours suppliers with management systems certified by the leading international environmental, safety and sustainability standards However, a reduction in the environmental impact of the stand-fitting business is also dependent on the sustainability of the materials used.
The Mission Statement of Nolostand SpA specifies that it uses and requires its suppliers to use environmentally sustainable materials and, where possible, identifies suppliers that are local to where it is working in order reduce energy consumption and CO2 emissions during the movement of materials and employees.
In June 2014, Fiera Milano was awarded LEED EB: O&M (Existing Buildings: Operations & Maintenance) certification which measures the greenness of existing buildings. The Rho exhibition site is the first in Europe, of those already built, to be awarded this certificate. Specifically it was the Centro Servizi, the Congress Centre and the administrative building, therefore, the heart of the exhibition site, which received the certification. Energy audits and water resource and lighting management studies were carried out on these areas which account for about 42,000 square metres (of a total of 345,000 square metres) of covered space.
The energy audit of the structures helped identify measures to increase efficiency that led to a reduction in energy consumption of approximately 700,000 kWh/per annum and of approximately 250 tonnes of CO2 emissions.
The Company has a dedicated department for Energy Management which, together with the Maintenance department, puts particular focus on a more responsible and efficient use of energy by paying increased attention to the normal management of the specific activities of Fiera Milano and to the design of new and more innovative plant.
Features of the more important equipment currently being designed for the exhibition site are given below:
In 2010–2013 Fiera Milano SpA implemented improvements to both plant and processes to optimise energy consumption. These included:
This process continued in 2014 when Fiera Milano introduced further improvements to its plant and equipment including:
The energy emissions of Fiera Milano are in part variable, depending on the presence of events and the emissions linked to them, and, in part, constant over the course of the year, linked to the energy consumption of the exhibition venues.
An analysis of the environmental impact of the Company indicates that it is mainly due to the specificity of plant and equipment and the activities of Fiera Milano. These are:
Given the above, a matrix was developed to identify the relative environmental impacts of the overall business environment of the exhibition business (stand-fitting, exhibitions, and periods with no exhibitions) and of the relevant Company departments.
| Environmental issue | Direct/indirect impact |
Environmental impact |
Company department * | |
|---|---|---|---|---|
| Electricity consumption | Indirect | Consumption of primary energy resources. CO2 emissions |
OMD | |
| Potable water consumption | Direct | Consumption of primary energy resources. |
OMD | |
| Groundwater consumption | Direct | Consumption of primary energy resources. |
OMD | Energy management |
| Diesel consumption | Direct | Atmospheric pollution, CO2 emissions |
OMD | |
| Natural gas consumption | Direct | Atmospheric pollution, CO2 emissions |
OMD | |
| District heating consumption |
Direct | - | OMD | |
| Waste production | Direct | Pollution, CO2 emissions |
OMD | Exhibition site security |
| Noise pollution | Direct | Noise pollution | OMD | Logistics and Exhibition site security |
| Electromagnetic wave pollution |
Direct | Electromagnetic wave pollution |
DCI | Information Technology |
|---|---|---|---|---|
| Employee movements | Direct | Atmospheric and | OMD | Logistics, |
| Stand-fitter movements | Indirect | noise pollution, | OMD | Circulation, |
| Visitor movements | Indirect | CO2 emissions, NOx. Traffic density |
OMD | and Exhibition site security |
| Land use | Direct | OMD | Maintenance |
* OMD: Operations Management Department
CIMD: Central ICT Management Department
The most significant environmental impact as regards plant engineering is the heating of the buildings where the heat is taken from the district heating network supplied by the EMAS-certified (Eco-Management and Audit Scheme) Silla 2 waste to energy plant belonging to Amsa.
Actions to improve energy efficiency in 2014 permitted Fiera Milano to apply for over 100 Energy Efficiency Credits equal to approximately 250 tonnes of CO2 which, added to the savings obtained from measures required to receive LEED certification, have a total CO2 reduction of 500 tonnes.
The reduction in CO2 emissions between 2010 and 2014 is approximately 10,500 tonnes per annum.
2014 2013 2014 2013 INDIRECT ENERGY CONSUMPTION INDIRECT ENERGY CONSUMPTION Electricity purchased MWh 40,717,654 38,950,931 Electricity purchased MWh 6,047,991 6,802,824 from renewable sources MWh 4,000,000 4,000,000 from non-renewable sources MWh 36,717,654 34,950,931 DIRECT ENERGY CONSUMPTION Natural gas m3 721,850 512,320 District heating MWh 7,920 9,647 from renewable sources MWh 7,920 9,647 WATER CONSUMPTION Drinking water m3 197,268 181,432 TOTAL INDIRECT EMISSIONS 2014 2013 CO2 CO2 TOTAL DIRECT EMISSIONS 2014 2013 Energy purchased from third parties tonnes 16,156 15,378 CO2 CO2 Natural gas tonnes 1,076 1,516 WATER CONSUMPTION EMISSIONI TOTALI INDIRETTE 2014 2013 Drinking water m3 225,438 229,765 CO2 CO2 Water from proprietary wells m3 786,140 795,250 Energy purchased from third parties tonnes 2,668 2,993 Note: fieramilano exhibition site fieramilanocity exhibition site A coefficient of 2.1 kg CO2/m3 was used to calculate the CO2 emissions from natural gas (Carbon Trust). A coefficient of 0.4332 kg CO2/kWh was used to calculate the CO2 emissions from electricity (source: the calculation method used by the Lombardy region).
A summary of energy consumption in 2014 and 2013 is given in the table below:
Fiera Milano Group complies with the laws governing waste management, dividing the different types of waste it produces and following legal requirements for its disposal.
Waste is collected by a specialist company authorised to dispose of it, which, by recycling the waste into basic types and then subjecting each category to further treatment, obtains secondary raw materials.
Fiera Milano SpA complies with the regulations imposed by the Municipality of Rho for waste management and uses a specialist company to collect, sort and dispose of waste products. Catering waste is disposed of together with that generated by Fiera Milano SpA. The carpeting used during exhibitions is hired and, under the contract with the suppliers, once the exhibition ends the carpeting is collected with a view to salvaging anything possible. Toner cartridges are placed in special containers and are collected and disposed of regularly by the supplier.
For specialist exhibitions, exhibitors can ask Fiera Milano SpA to arrange for the collection of waste oil: a contract is drawn up between the exhibitor and the company that collects the waste oil and the relevant waste disposal form is in the name of the exhibitor.
In 2014, 9,609 tonnes of waste from the fieramilano exhibition site and 889 tonnes from the fieramilanocity exhibition site were disposed of or recycled.
The Procurement department of the Fiera Milano Group screens in advance any potential supplier to be included in the Register of Group Suppliers.
The screening involves the examination of data and documents on assets and technical and financial capacity provided by potential supplier companies over the internet.
When a potential supplier passes the screening it may be invited to explore the markets in which the companies of the Fiera Milano Group are active.
The Register of Suppliers currently numbers 801 suppliers. Screening of a further 273 is currently underway.
Should a supplier wish to use a subcontractor, during the phase of exploring possible areas of collaboration it must give the name and business that it wishes to sub-contract so that the Group Procurement department, in conjunction with the Company department requiring the service, can assess, as far as possible while respecting the management independence of the supplier, the need to subcontract the activity and the suitability of the subcontractor to carry out the work requested.
The Company department that requested the services must monitor the services supplied and complete an annual assessment form.
As part of its environmental awareness, the procurement procedures of Fiera Milano Group favour the acquisition/hire of ecological products (green procurement), in particular, in the following areas:
Sustainable acquisitions (and equipment hire) of the following products:
This type of procurement aims to: help reduce the consumption of natural resources and of chemical and dangerous substances and encourage recycling in order to reduce waste sent to landfill sites and/or waste to energy plants.
In a single year an average of 600,000 cars, 50,000 commercial vehicles and three million underground passengers transit through the fieramilano exhibition site. The vehicle traffic within the site is mainly attributable to:
Since 2004, Fiera Milano has had a sustainable mobility policy to reduce energy consumption, acoustic pollution, emissions of greenhouse gases, and the use of private transport means and to organise working hours more efficiently in order to avoid traffic congestion. A Home-Work Movements Plan was prepared to analyse corporate mobility and focus on possible ways of resolving the critical situations caused by traffic congestion. It analysed the journeys from home to work of Company employees and, more in general, the mobility and accessibility profile of the Company. The document was prepared by the Mobility Manager who is in charge of Company mobility and attaining the aforementioned goals.
The mobility management tools used to encourage improved mobility are:
The Muoversi initiative to reduce atmospheric pollution and to increase awareness amongst employees of the benefits of using public transport rather than their own vehicles continued in 2014. The Company reached agreements with ATM and TRENORD for annual season tickets at subsidised rates for employees with part of the subsidy covered by the Company.
The Mobility Office is a portal with services aimed at identifying the most suitable solutions to meet the mobility requirements of employees by aiding regular movements between home and work using sustainable means of transport.
Since 2007, the management of the road system within the exhibition site has been strengthened to guarantee the optimum routing of traffic flows: on entry, depending on the amount of traffic and how full the car parks are, and, on exit, depending on the amount of traffic on the motorway system. A webcam traffic control centre has been set up in collaboration with the Road Traffic Police and the management companies of the motorways in order to coordinate patrols and to give real time information on the variable message signs (VMS) both on the motorways and in the parking areas.
The Infomobility service was started in 2009 as Fiera Milano wanted a multi-channel and multidevice information system to increase mobility efficiency and awareness among the users (standfitters, exhibitors, visitors, employees and suppliers) of the two exhibition sites, fieramilano and fieramilanocity, from the start of their journey (when the user decides which means of transport to use to reach the site) and during the journey by giving real time information on traffic movements.
The main channels through which the information supplied by the main mobility sources, both public and private, and processed by Radio Traffic are:
‐ Voicemail boxes for general information on current exhibitions at fieramilano and fieramilanocity, information on how to reach the exhibition sites and with the latest news updated in real time.
‐ Webcams at motorway junctions (Fiera Milano Live) showing the traffic in real time on www.fieramilano.it/node/3893
Fiera Milano is an active participant in E015 - Digital Ecosystem, a digital space with shared technology and shared standards to enable cooperation in developing integrated systems for the public through the internet, which represents an important opportunity for the development of the region.
E015 - Digital Ecosystem provides all those who participate with shared technology standards, guidelines, processes, common rules, and the infrastructure elements for sharing the contents and functionalities of IT services and for developing integrated apps (multichannel / multi-device and/or websites) that offer integrated functionalities to endusers.
In August 2014 a partnership was set up between Fiera Milano and Car2go, a car-sharing service company that operates in Milan, Rome and Florence. Visitors can get to the fieramilano exhibition site using a Smart car2go, park easily, return the car at the Rho exhibition site at an especially reserved area in Largo Nazioni and access the exhibition halls through the Cargo 1 entrance.
Car pooling means that vehicles are used more rationally and for longer periods each day; it reduces the numbers of cars per capita and the space required to park them. The project is designed not only to facilitate movements to/from the exhibition site but also to encourage car pooling for greater sustainable mobility. In fact, a pooled car replaces on average six private vehicles and the fixed costs are divided among a greater number of users with a consequent reduction in individual costs.
The car-pooling proposed by Fiera Milano is an environmentally-friendly form of car pooling as:
The Diversity Management project was started in 2012 to draw up a Disability Reception and Access Plan aimed at providing excellent service while complying with enacted laws on safety, technical regulations and access management.
The first result of the project was the new easy access system, called Fieraccessibile, for persons with difficulties and/or disabilities which offers:
A "No Barriers Guide" available on the Company website www.fieramilano.it;
An "Audioguide for visually impaired and blind persons" available to be downloaded from the Company website www.fieramilano.it;
Implementation of an app with specific utility characteristics for different types of disabilities (hearing, visual, motor disabilities etc.) which will be available to both disabled and non-disabled visitors within the exhibition site;
Map of the services available within the exhibition site and identification of important areas (e.g. utilisation of identification numbers on pillars and QR codes);
Synergies with relevant disability organisations, university and research bodies, public bodies, local authorities, institutions, etc;
Ability to request a wheelchair directly from the Logistics Office;
The congress activity of the Group is managed by the subsidiary Fiera Milano Congressi (FMC), a specialist in this field that manages three congress centres and a meeting centre:
The MiCo - Milano Congress Centre, the largest congress centre in Europe;
The Stresa Convention Centre, the congress centre on Lake Maggiore;
The Stella Polare, the congress centre within the fieramilano exhibition site;
MoMeC, the executive business suite located in the centre of Rome.
The main site is MiCo - Milano Congressi, which was recently refurbished and is now one of the largest congress centres in the world with capacity of 18,000 seats.
MiCo - Milano Congressi – inaugurated in May 2011 – was built through the conversion of exhibition space where the walls, under flooring, part of the roof and of the plant and equipment were salvaged in order to re-use the land and avoid the consumption of new materials.
The design of MiCo followed energy saving guidelines for heating, cooling and lighting through the use of double glazing with solar protection, roof and wall insulation, digital lighting systems and the construction of spaces with similar requirements for lighting and heating.
The daily use of areas and the presence of thousands of guests involves the continual use of energy producing equipment. These are all automatically controlled. Energy waste is reduced by low energy consumption electrical equipment, the building automation system that controls the mechanical thermal plant, and the regulation of water flow from the taps and other waste water equipment. Waste from the congress centre and the offices of its employees is sorted and recycled and, through careful monitoring procedures, those setting up events are required to do likewise.
In 2014, the congress centre was upgraded: the flooring and cladding were replaced with environmentally friendly materials, the roofs were insulated to reduce energy loss, a new Wi-Fi service was installed allowing up to 75,000 devices to be connected, signals travel on fibre optics, the audio-visual equipment was replaced with the latest models, 400 surveillance cameras were installed, climate control equipment was installed with special software that regulates consumption, and the lighting system was changed to LED lighting.
The company manages the catering facilities within MiCo using ethical guidelines and makes daily deliveries of any excess food perfectly packaged from the events to Siticibo-Food Bank to be distributed to those in need.
MiCo encourages organisers to be environmentally friendly and ensure their events have a zero impact by following the Lifegate protocol.
The use of low CO2 emission and biodegradable materials (e.g. Kenafloor carpet) is encouraged and forms part of the proposal put forward by MiCo to organisers, together with menus prepared exclusively with organic products.
Those clients who wish to drive around the city can hire two electric cars which MiCo makes available to congress delegates or can purchase ATM (the company for local public transport) tickets from MiCo at special rates.
In 2014, charitable donations totalled Euro 41,000 and were mainly for two grants awarded to the children of two deceased employees.
Fiera Milano SpA is a member of the Associazione Amici di MiArt.
This is a non-profit cultural organisation. The Association develops the knowledge, focus and appreciation of modern and contemporary art by the public.
These aims are pursued by the Association through financial support given to young artists/exhibitors at cultural events and exhibitions – which includes Mi-Art (the International Exhibition of Modern and Contemporary Art). The Association also makes publicly available the works of art in its own mutual fund ensuring that the artworks are placed and seen in museums, fairs or other places accessible to the public.
The Fiera Milano Group has for some time implemented a periodic analysis of the risks at Group level that is done using internationally recognised standards of Enterprise Risk Management (ERM).
The main aim is to have a systematic and proactive approach to the main risks to which the Group – and also each of its companies - is exposed in carrying out its business and pursuing its pre-set targets, to assess in advance the potential negative effects, implement opportune actions to mitigate these effects, and to monitor over time any relative exposure.
In order to achieve this Fiera Milano SpA has compiled a catalogue of Group risks linked to the strategies being implemented, together with a risk mapping and risk scoring methodology. Specifically, the Group integrated risk management process entails an annual (i) update of the risk catalogue according to the strategies implemented and the management and business model used; (ii) assessment of the risks by the management of Fiera Milano SpA and of its subsidiaries; (iii) consolidation of information and prioritisation of the risks and the consequent areas of action; (iv) tolerance analysis of any exposure identified and formulation of the appropriate management strategies/actions and the identification of those responsible for implementing such actions.
The Control and Risk Committee and the Board of Statutory Auditors are informed of the results of the aforementioned annual processes.
The main risk factors and uncertainties to which Fiera Milano Group is exposed that have emerged from the aforementioned process are described below, taking into account the business sector in which it operates and the characteristics of the business model it uses. A description is also given, where necessary, of the Group policies to manage and mitigate the risks described.
Despite recent signals of a weak economic recovery, the outlook for growth in the European markets – and in the Italian market – remain marked by considerable uncertainty.
This gives the Group limited visibility on the likely investments of its clients (organisers, exhibitors and other clients of subsidiary companies) in exhibitions and related services and could well have an impact on the stability of revenues and profitability.
In order to continue to combat the effect of this scenario on Group activities (and, in particular, the risk of lower numbers at the exhibitions hosted or directly organised in the Fiera Milano exhibition sites and of the relative investment budgets), in 2015, the Group intends to continue the support actions and incentives for exhibitors at the exhibitions held in Italy and also pursue its development strategy in foreign markets both through investments in companies and partnerships and through the organisation of proprietary exhibitions in countries that offer significant growth.
The market in which Fiera Milano Group operates continues to be in a mature phase that is probably destined to continue in coming years and is characterised by: (i) the continuing consolidation of some sectors of product manufacturing/distribution activities, (ii) changes and innovation in product categories, (iii) the transformation of exhibitions from "places where demand meets supply" to events which offer even greater business opportunities and, above all, (iv) by an ever-increasing growth in competition, also on tariffs, and (v) the ever-increasing development of the Asian and Middle Eastern markets.
To maintain its domestic market position and increase its position and competitiveness on the international market, Fiera Milano Group has continued its strategy of (i) enhancing its portfolio of directly organised or hosted exhibitions (by launching new proprietary initiatives, expanding some of these to include contiguous market sectors, by an eventual re-positioning of existing exhibitions and increasing the portfolio of hosted exhibitions) and (ii) internationalisation through the acquisition of international events and the promotion and "export" of its own events to foreign exhibition centres.
The Italian calendar of the Fiera Milano Group has approximately 55 exhibitions per annum. Despite this high number of events, a significant part of Group revenues derive from ten specific events, organised both directly by subsidiaries or hosted in the fieramilano and fieramilanocity exhibition sites.
Despite the existence of contractual obligations and logistic impediments that protect the Group, it cannot be ruled out that (i) the loss or downsizing of some of the leading events or (ii) the loss of some of the larger clients or (iii) the different incidence that some events have, depending on how frequently they appear from year to year in the exhibition calendar, could have negative implications for the economic, financial position and financial performance of Fiera Milano Group.
It should also be noted that on average about 80% of exhibitions, in terms of square metres of exhibition space occupied, is organised by third parties, which are not linked to Fiera Milano Group. The medium/long-term success of these exhibitions depends on the ability of the organisers to retain and develop over time the necessary skills, which include maintaining relationships and being constantly aware of changes in the market.
Although the Group is pursuing a development and consolidation strategy for directly organised events both in Italy and abroad and has signed long-term contracts with third-party organisers (that include protective clauses in favour of the Group should the contract be rescinded by the latter), it cannot be ruled out that the loss/failure of some of these exhibitions could have negative implications for the economic and financial position of the Group.
Fiera Milano Group continues to pursue internationalisation opportunities in BRIC and other countries through various means, such as joint ventures, acquisitions, partnerships, etc.
Although the previous and consolidated experience of the Group is a major advantage, pursuit of these expansion strategies could expose Fiera Milano Group to a series of risks connected to potential economic instability or local politics and social or safety and/or fiscal risks in the countries where it wishes to expand, as well as to risks linked to the increased complexity of operational and marketing control that are the normal consequence of an internationalisation process.
To ensure better oversight of its foreign businesses and internationalisation strategy and to consolidate the Group governance, Fiera Milano is implementing an organisational plan that will enable centralised coordination of the activities and staff functions that coordinate individual areas of responsibility.
Exhibition organisation is subject to seasonality because almost no exhibitions are held in the summer months and because of the presence of biennial or triennial exhibitions. This seasonality affects the annual spread of Group revenues and profits.
The strategies pursued by management and, in particular, (i) the enhancement of the exhibition portfolio and the re-positioning of some historical events, (ii) the internationalisation of events, (iii) the setting up of strategic and commercial collaborations/alliances with other exhibition venues and/or organisers, (iv) the increased exploitation of other revenue sources linked to the exhibition sites, are all intended to counteract the seasonality and thereby ensure greater stability of revenues and profits.
The Fiera Milano Group considers its human resources and competencies in the exhibitions sector to be one of its principal strategic assets. The gradual evolution of exhibitions from "large marketplace" to "major event" or "experience" (with increasing importance attached to market trends) and the pursuit of medium/long-term strategies (including the development of new directly owned exhibitions and business internationalisation) require specialist professional competencies that are not easily found.
The current performance management systems for assessing the capability of the employees and the incentive plans aims to enable the Group to increase the validity and loyalty of its personnel and key internal competencies ensuring a better coordination/exchange and sharing of expertise.
Given its business activity and the number of persons (employees, suppliers, exhibitors, visitors, those involved in setting up exhibitions, etc.) that operate in its exhibition sites, Fiera Milano Group is exposed to risks of infringement of legislation regarding occupational health and safety (Consolidated Health & Safety Act 81/2008).
Furthermore, given the extensive use that Fiera Milano SpA and some of its subsidiaries make of outside contractors for services linked to the exhibitions (catering, setting-up, etc.) which come under the law governing contractors (Legislative Decree 223/2006 and subsequent amendments), the Group is exposed to administrative sanctions and/or interruption of its business for breaches of provisions under the relevant laws, including occupational health and safety and compliance with the regulations governing remuneration and social security made by construction companies and unauthorised sub-contractors.
Fiera Milano Group protects itself from such eventualities by rigorously adhering to the relevant laws and by close attention to the underlying risks through a set of procedures that include:
internal structures in charge of inspections for exhibition safety, structures and security in general;
the application of rigorous procedures for identification and control of third parties that are not clients (i.e. organisers, exhibitors and visitors) with access to the exhibition sites;
The Legislative Decree of 8 June 2001 no. 231 introduced the "discipline governing administrative liability of legal entities, companies and of associations without legal status" (Legislative Decree 231/2001) amending Italian law to meet some international conventions and requiring the adoption and effective implementation of organisational and management models.
To meet the requirements of this Legislative Decree, the Group Italian companies have introduced organisational and management models that are constantly monitored and updated.
Subsidiaries under foreign law, which are not subject to the requirements of Legislative Decree 231/2001, have not adopted their own organisational, management and control models pursuant to the aforementioned Decree 231, but have adopted the Group Code of Ethics and have already implemented Guidelines for Anti-corruption Management and other Compliance Procedures so that a systematic framework of principles and standards exists for crime prevention. During the 2014 financial year the Organisation, Management and Control Models under Legislative Decree no. 231/2001 for the Italian companies in the Group were updated as were the relative risk assessments in order to meet the new risk profile and the necessary prevention protocols.
As a result of the organisational changes in Group companies and given the continuous extension of the law to cover other criminal offences, it cannot be ruled out that if crimes are committed under the provisions of the law by persons having a functional connection to Fiera Milano SpA and its subsidiaries for their own interest or advantage, that the models adopted could be considered by the competent Authority to be inadequate or not sufficiently updated, resulting in legal sanctions being imposed
In carrying out the activities of Fiera Milano Group unforeseen damage could occur to property or persons within the exhibition sites. The simultaneous presence of numerous workers with different contracts (employees, external suppliers in direct contractual relations with the Group and/or subcontractors of other companies, etc.) also makes any eventual attribution of responsibility very difficult in cases of damage to property or persons, with potential consequences for the business of the Company and its corporate image.
The Fiera Milano Group has taken out insurance policies to guard against these risks and has set up an internal unit (Exhibition Safety) responsible for circulating safety information and material for the correct management of such risks.
The disclosure required by IFRS 7 for financial assets and liabilities in the Explanatory and Supplementary Notes to the Financial Statements gives details of financial risk.
Fiera Milano Group uses and, to a certain extent, is dependent on the supply of services linked to the management of the exhibition sites and congress centre, particularly when setting up, managing and dismantling exhibitions (including setting up exhibition stands, security, catering, equipment hire, etc.).
The success of Group activities also depends on the degree of cooperation and the quality and efficiency of service suppliers operating within the exhibition sites.
The internal departments of the Group that manage the portfolio of suppliers and outsourcers guarantees constant control of the quality of the services supplied both at the time that a contract is renewed and on a daily basis. The Group is also able to make any necessary replacement of an important service provider quickly and smoothly given its position on the market and the way it has broken down the activities assigned to third-parties.
On 26 February 2015, the Parent Company signed an agreement with the minority shareholder of Fiera Milano Exhibitions Africa Pty Ltd for the acquisition of its 15% shareholding in the company for a sum of 3.945 million South African rand (Euro 0.300 million2 ). Transfer of ownership of the shareholding and payment for the transaction will take place simultaneously when the foreign exchange controls required by the South African authorities have been completed. Following this transaction, the Parent Company's shareholding will move from 85% to 100%.
The exhibition sector reflected the difficult domestic economic scenario that has negatively affected the entire Italian exhibition sector, resulting in a continuous decline since 2010. The macro economy, combined with an unfavourable exhibition calendar in 2014 due to the absence of important biennial exhibitions influenced the results of both the Parent Company and the Group. The Parent Company made a net loss of Euro 30.674 million, affected not only by the aforementioned factors but also by impairment charges totalling Euro 14.942 million on the investments of certain subsidiaries, and the Consolidated Financial Statements showed a loss of Euro 19.106 million that included impairment charges of Euro 3.626 million on intangible fixed assets.
As a result of the losses, the share capital of the Parent Company fell by more than one-third leaving the Company in the situation provided for under Article 2446 of the Italian Civil Code. For this reason and because of the negative trend in the exhibition market, with the consequent negative impact on the results for the financial year under review, the Directors have decided to carry out an in-depth assessment of the outlook for the Company and for the Group and of the estimates and possible uncertainties underlying this outlook.
Despite the difficult economic environment, the demand for exhibition space is robust and in line with the forecasts for 2015 when two leading directly organised biennial exhibitions, TUTTOFOOD and HOST, will be held and when the exhibition calendar also includes numerous exhibitions and projects that are part of Expo 2015. The forecasts for the 2015 financial year are for an increase in consolidated revenues, a return to profit and a trend in financial requirements consistent with the forecast growth in revenues and investments as detailed in the section on financial risks in the Notes to the Financial Statements. The Company and Group are currently continuing to meet their normal net working capital requirements through current and non-current bank financing.
On 27 February 2015, the Board of Directors approved the budget and the Industrial Plan for 2015- 2018 of the Company and the Group. The preliminary forecasts for the 2015 financial year in the Industrial Plan reflect the exhibition calendar and the aforementioned initiatives, underpin the expectation that the Company, barring any unforeseeable events, will be able to restore the net worth to above the two-third threshold as required. With regard to current cash requirement forecasts, an analysis is being made of ways to meet the peak period for cash requirement, which could be during the summer months when there is a drop in exhibitions. However, despite the risks described in the section on liquidity risk and the use of estimates, no circumstances are likely to materialise that require extraordinary actions over and above the normal current and non-current financial management.
As regards the medium/long-term, the forecasts in the Industrial Plan for future financial years are for a cyclical trend that reflects the seasonality of the business with a decline in the results for the 2016 financial year due to the unfavourable exhibition calendar and a stable gross operating margin in future years as the precise strategic guidelines described below are implemented.
Board of Directors' Management Report 84 2 Figures in Euro have been translated using the exchange rate on 24 February 2015 (EUR/ZAR = 13.149)
The first strategic aim of the Industrial Plan is to strengthen the exhibitions within the Group portfolio that are market leaders. In a shrinking market such as the Italian exhibition market exhibitors and visitors reduce their investments and concentrate on a smaller number of events. As a result, Fiera Milano will develop and protect those exhibitions that can become one-stop go-to shows or events for operators the world over, focusing on HOST, the international professional hospitality exhibition, TUTTOFOOD (food) and HOMI (lifestyle and interior design), all of which will increase penetration of sectors where they are already present and develop the international profile of exhibitors and buyers.
The second aim of the Industrial Plan is to grow the international presence of the Company through agreements with leading local partners in order to develop HOMI in Russia and in the United States and HOST and TUTTOFOOD in China and Turkey. TheMicam (covering the medium-high shoe sector) is expected to grow further in China as the shoe accessory sector combines with clothing. Furthermore, foreign exhibitions already owned by the Group that show strong growth potential will be the focus of further expansion.
The third strategic aim covers the operating businesses that are ancillary to the exhibition activity. The Plan provides for the stand-fitting services to increase their penetration of the exhibition sector and also of congresses and other events through careful product innovation; digital services, including the matchmaking platform and the existing editorial portals, will be developed to support exhibitions; and the congress business will grow by increasing its market share of large-scale congresses and by offering destination management services together with a recognised partner.
Given the above, the forecasts in the budget and in the Industrial Plan, and taking account of the forecasts for net working capital requirements and net worth, the Financial Statements and the Consolidated Financial Statements have been prepared on the principles of a going concern and associated estimates and uncertainties have been described in the present section and in the section on liquidity risk and the use of estimates in the Notes to the Financial Statements.
| Fiera Milano SpA Income Statement (amounts in €'000) |
2014 | 2013 | ||
|---|---|---|---|---|
| Revenues from sales and services | 181,098 | % 100.0 |
194,523 | % 100.0 |
| Cost of materials | 818 | 0.5 | 1,005 | 0.5 |
| Cost of services | 107,928 | 59.6 | 107,033 | 55.0 |
| Costs for use of third party assets | 51,898 | 28.7 | 58,809 | 30.2 |
| Personnel expenses | 34,990 | 19.3 | 34,180 | 17.6 |
| Other operating expenses | 4,757 | 2.6 | 5,812 | 3.0 |
| Total operating costs | 200,391 | 110.7 | 206,839 | 106.3 |
| Other income | 6,406 | 3.5 | 7,327 | 3.8 |
| Gross operating result | (12,887) | -7.1 | (4,989) | -2.6 |
| Depreciation and amortisation | 7,340 | 4.1 | 8,219 | 4.2 |
| Allowance for doubtful accounts and other provisions | (1,912) | -1.1 | (1,532) | -0.8 |
| Adjustments to asset values | - | - | - | - |
| Net operating result (EBIT) | (18,315) | -10.1 | (11,676) | -6.0 |
| Financial income/(expenses) | (2,644) | -1.5 | (1,398) | -0.7 |
| Valuation of financial assets | (14,942) | -8.3 | (2,201) | -1.1 |
| Profit/(loss) before income tax | (35,901) | -19.8 | (15,275) | -7.9 |
| Income tax | (5,227) | -2.9 | (2,611) | -1.3 |
| Profit/(loss) from continuing operations | (30,674) | -16.9 | (12,664) | -6.5 |
| Profit/(loss) form discontinued operations | - | - | - | - |
| Profit/(loss) | (30,674) | -16.9 | (12,664) | -6.5 |
| Total Cash flow | (25,246) | -13.9 | (5,977) | -3.1 |
Revenues from sales and services were Euro 181.098 million, a decrease of Euro 13.425 million compared to the 2013 figure of Euro 194.523 million.
The decrease in revenues is mainly due to the decline in square metres of exhibition space occupied caused by the different exhibition calendar, which in 2013 included the biennial exhibitions held in uneven-numbered years, TUTTOFOOD, HOST and Made Expo (which became a biennial exhibition from 2013), and a drop in demand for exhibition space that particularly affected the directly organised exhibitions HOMI January and Bit. This was only partly compensated by the presence of the hosted biennial exhibitions held in even-numbered years, Mostra Convegno Expocomfort and Xylexpo, and by Lineapelle, which was held in the fieramilano exhibition site for the first time, and by the increase in some hosted exhibitions like the Salone del Mobile and those in the fashion sector.
A breakdown of sales by geographic region is not given as Fiera Milano SpA operates almost exclusively on the domestic market.
Board of Directors' Management Report 86
The gross operating loss was Euro 12.887 million compared to a loss of Euro 4.989 million in the 2013 financial year, a deterioration of Euro 7.898 million.
The deterioration in the gross operating loss reflects the lower amount of exhibition space occupied and also costs associated with the relaunch and internationalisation of HOMI and the absence of the payment made in 2013 by Fondazione Fiera Milano as its contribution to the internationalisation initiatives for HOST. This was in part compensated by the lower rental costs for the fieramilano exhibition site.
The net operating loss was Euro 18.315 million compared to a loss of Euro 11.676 million at 31 December 2013. The Euro 6.639 million deterioration mirrors the trend in the gross operating result in part offset by lower depreciation and amortisation on improvements to third-party assets.
Net financial expenses were Euro 2.644 million compared to Euro 1.398 million at 31 December 2013. The Euro 1.246 million increase in net financial expenses was mainly due to lower dividends from subsidiaries and an increase in financial expenses due to the higher average net debt.
The valuation of financial assets was negative for Euro 14.942 million compared to a negative figure of Euro 2.201 million at 31 December 2013. This was due to the impairment charges taken on investments and, in particular, the Euro 11.135 million in Fiera Milano Media SpA and the Euro 3.807 million in Eurofairs International Consultoria e Participaçoes Ltda.
The net loss at 31 December 2014 was Euro 30.674 million after a positive tax item of Euro 5.227 million compared to a net loss in the previous financial year of Euro 12.664 million after a positive tax item of Euro 2.611 million. The change in the entry for taxes was due to deferred tax assets on tax losses during the financial year that were recognised in the financial period under review against a valuation of the recoverability of these in the approved plans. Further details on taxes are given under the relevant heading in the Notes to the Financial Statements.
| Fiera Milano SpA Reclassified Statement of Financial Position (Amounts in €'000) |
31/12/14 | 31/12/13 |
|---|---|---|
| Goodwill and intangible assets with an indefinite useful life | 70,144 | 70,144 |
| Intangible assets with a finite useful life | 18,267 | 21,307 |
| Tangible fixed assets | 4,819 | 6,894 |
| Financial assets | 94,338 | 108,745 |
| Other non-current assets | 6,338 | 2,172 |
| Non-current assets | 193,906 | 209,262 |
| Inventories | 4,466 | 2,754 |
| Trade and other receivables | 38,754 | 40,429 |
| Current assets | 43,220 | 43,183 |
| Trade payables | 22,016 | 26,065 |
| Pre-payments | 34,843 | 31,372 |
| Tax liabilities | 1,178 | 1,180 |
| Provisions for risks and charges and other current liabilities | 27,481 | 31,071 |
| Current liabilities | 85,518 | 89,688 |
| Net working capital (B - C) | (42,298) | (46,505) |
| Gross capital employed (A + D) | 151,608 | 162,757 |
| Employee benefit provisions | 6,209 | 5,836 |
| Provisions for risks and charges and other non-current liabilities | 1,422 | 3,211 |
| Non-current liabilities | 7,631 | 9,047 |
| G NET CAPITAL EMPLOYED continuing operations (E - F) |
143,977 | 153,710 |
| NET CAPITAL EMPLOYED discontinued operations | - | - |
| TOTAL NET CAPITAL EMPLOYED (G + H) | 143,977 | 153,710 |
| covered by: | ||
| Equity | 21,736 | 52,577 |
| Cash & cash equivalents | (3,564) | (5,921) |
| 98,687 | 72,715 | |
| Current financial (assets)/liabilities | ||
| Non-current financial (assets)/liabilities | 27,118 | 34,339 |
| Net financial position (continuing operations) | 122,241 | 101,133 |
| Net financial position (discontinued operations) | - | - |
| Net financial position (TOTAL) | 122,241 | 101,133 |
The entries in the Restated Statement of Financial Position correspond to those in the Fiera Milano SpA Statement of Financial Position.
Net invested capital was Euro 143.977 million at 31 December 2014, a decrease of Euro 9.733 million compared to the figure at 31 December 2013. The year-on-year change mainly reflects the impairment charges taken on portfolio investments.
Net working capital, the balance of current assets and current liabilities, moved from a negative figure of Euro 46.505 million at 31 December 2013 to a negative figure of Euro 42.298 million at 31 December 2014. Fiera Milano SpA has structural negative net working capital due to the favourable cash management cycle of exhibitions where advance payment of part of the attendance fee is made by clients. Furthermore, Fiera Milano SpA also manages these activities on behalf of thirdparty organisers and, in this way, generates positive cash flows also from renting exhibition space. The change in current liabilities is consistent with the change in payables to exhibition organisers and pre-payments caused by the different exhibition calendar.
Equity was Euro 21.736 million, a decrease of Euro 30.841 million compared to the figure at 31 December 2013, mainly due to the net result for the year.
The net financial position at 31 December 2014 was net debt of Euro 122.241 million compared to net debt of Euro 101.133 million at 31 December 2013. The higher net debt mainly reflected the trend in operating cash flows caused by the reduction in negative net working capital and also by the lower cash flow generated from the normal activities of the Company.
Investments in the financial year to 31 December 2014 totalled Euro 3.352 million and the breakdown was as follows:
| Investments (€'000) |
Full year at 31/12/14 |
Full year at 31/12/13 |
|---|---|---|
| Intangible fixed assets | 1,635 | 6,227 |
| Tangible fixed assets | 595 | 733 |
| Financial fixed assets | 1,122 | 10,519 |
| Total investments in non-current assets | 3,352 | 17,479 |
Investments in intangible fixed assets totalled Euro 1.635 million and were mainly for the implementation of digital projects and the acquisition of software.
Investments in tangible fixed assets were Euro 0.595 million and were mainly for plant and equipment and electronic equipment.
Investments in financial fixed assets were Euro 1.122 million for the acquisition of 10% of Fiera Milano Exhibitions Africa and for the share capital contributions made to Fiera Milano Interteks and Worldex.
Information on related-party transactions is given in Note 42 of the Explanatory and Supplementary Notes to the Fiera Milano SpA Financial Statements.
| Permanent employees at year end (units) |
31/12/2014 | 31/12/2013 | |
|---|---|---|---|
| Executives | 33 | 31 | |
| Middle management and White collar workers | 404 | 402 | |
| Total | 437 | 433 | |
The number of permanent employees increased by four persons compared to the previous financial year.
Eight persons joined the Company, all of which were to strengthen the marketing departments. Four persons left the Company of which three resigned and one was dismissed. Those that left were from the marketing and operational departments.
| Movement in employees | 2014 | 2013 |
|---|---|---|
| New employees | 8 | 12 |
| Leavers | 4 | 12 |
| Employee turnover | 2.7% | 5.5% |
| Internal mobility | 50 | 57 |
The turnover of employees, calculated as the difference between those joining and those leaving the Company as a percentage of the average number of employees was 2.7% in 2014 compared to 5.5% in 2013.
Employees on fixed-term contracts went from five in 2013 to eighteen in 2014 because of the oneoff projects that included the design of the Clusters for Expo 2015 and to replace temporarily absent employees.
Through agreements with the Milan Polytechnic, the Bocconi University, the Università Cattolica del Sacro Cuore, Iulm, the Università degli Studi di Milano, the Università degli Studi di Milano Bicocca, the Istituto Europeo di Design, the Università Carlo Cattaneo – LIUC and Fondazione Fiera Milano, Fiera Milano SpA gave work experience in 2014 to seventeen persons allocated to various Company departments (Marketing, Management and Human Resources, Operations, Sales, Customer Care, the Technical department, Administration and the Expo 2015 project department). The average length of these stages was six months.
Part-time employees went from 55 in 2013 to 52 in 2014; 40 were horizontal part-time employees and 12 were vertical part-time employees.
Employees of Fiera Milano SpA can be divided into three main categories:
Fiera Milano SpA has no manual workers as all activities connected to providing exhibition and setting-up services is subcontracted to external suppliers.
Fiera Milano SpA uses employees on fixed-term contracts to manage the peaks of activity in the exhibition calendar. The number of personnel on fixed-term contracts went from five in 2013 to eighteen in 2014.
| Fixed-term contracts | Full year at 31/12/2014 |
Full year at 31/12/2013 |
Change |
|---|---|---|---|
| White collar workers | 18 | 5 | 13 |
| Total | 18 | 5 | 13 |
Fiera Milano SpA uses the National Collective Employment Agreement for employees of companies in the tertiary, distribution and services sectors and also a supplementary company contract for nonexecutive employees; this was renewed in June 2013 and runs until 31 May 2016.
Fiera Milano – in an economic scenario that remains difficult - has strengthened its focus on its employees by identifying alternative ways of enhancing their wellbeing while, at the same, containing the costs to the Company. In January 2014, the new corporate system "WellFair" was launched through a dedicated internet portal; this incorporates benefits and services that include education, health services, pension funds, baby-sitters and social workers, sports, holiday packages, cultural events, shopping vouchers, legal consultancy services, and household maintenance.
Fiera Milano SpA considers diversity and equal opportunities to be extremely important and this is expressed in its Code of Business Ethics, which states:
Fiera Milano offers all workers the same employment opportunities, operating in such a way as to ensure that all of them enjoy equitable treatment based on criteria of merit without any discrimination.
The competent functions must:
worker's psychological and physical integrity, respecting his/her moral personality, and preventing the latter from suffering illicit influences or undue difficulties.
In particular, with regard to the employment of women, Fiera Milano SpA prepares a biennial report on gender equality in hiring employees, training, promotion and other factors so as to have an overview of gender equality amongst its employees as required by Legislative Decree no. 198 of 11 April 2006.
In 2014, female employees numbered 263 and were 60.2% of the total.
The safety of all its employees is mandatory for Fiera Milano SpA and it makes significant investments to ensure their safety. In 2014 health and safety training was given to all those with technical roles in the Company.
The number of training days in 2014 was higher than in 2013.
The training programme in the 2014 financial year included courses aimed at increasing knowledge in the more specialist/technical areas, those to update and expand the understanding of new laws, and those offering new approaches to business.
Over 100 employees working in marketing took a training course called " The Cure" to improve their sales skills and expertise and the know-how required of exhibition sales persons and to learn new methods of approaching potential clients that focused primarily on listening to the ever-changing requirements of clients. Using the "edutainment" system, the course, held in several stages, concluded with employees acting out and making short videos of potential client situations. The short videos were shown to all Group employees at the year-end convention at which prizes were awarded along the lines of the Oscars. The courses were run with the continuous training input also of the Lombardy Region.
There was also a managerial development programme for up and coming young employees of the Company and for those asked to take on new roles and face new challenges. The main aim of the programme was to help employees identify and develop the reasons for their personal success and hone them in order to generate concrete end-results that enable them to make decisions of benefit to the different departments to which they belong.
Part of the programme was specifically aimed at the executive business team of Fiera Milano SpA. It focused on "action learning" with the aim of integrating the business team and developing its ability for innovation, creativity and team effort in order to create greater trust among the various team members. This course was run with financing from the Inter-professional Fund for Continuous Training (FONDIR - Fondo Paritetico Interprofessionale per la Formazione Continua).
The Fiera Milano training programmes involved 211 employees for a total of 123 working days.
The number of permanent employees rose by four persons compared to the previous financial year.
Equity investments in Fiera Milano SpA and its subsidiaries held by members of the Administrative and Control Bodies, the General Managers and Executives with strategic responsibilities, as well as by their spouses not legally separated and children that are minors, directly or through subsidiary companies, trust companies or intermediaries that appeared in the shareholders' register at 31 December 2014 or from communications received or information obtained directly from the relevant parties are shown in the table below.
| Full name | Investee | No. of shares | No. of shares | No. of shares | No. of shares |
|---|---|---|---|---|---|
| company | held | purchased | sold | held | |
| at 31.12.2013 | at 31.12.2014 | ||||
| Directors | |||||
| Michele Perini | Fiera M ilano SpA | - | - | - | - |
| Enrico Pazzali | Fiera M ilano SpA | 30,000 | - | - | 30,000 |
| Attilio Fontana | Fiera M ilano SpA | - | - | - | - |
| Renato Borghi | Fiera M ilano SpA | - | - | - | - |
| Roberto Baitieri | Fiera M ilano SpA | - | - | - | - |
| Pier Andrea Chevallard | Fiera M ilano SpA | - | - | - | - |
| Davide Croff | Fiera M ilano SpA | ||||
| Giampietro Omati | Fiera M ilano SpA | - | - | - | - |
| Romeo Robiglio | Fiera M ilano SpA | - | - | - | - |
| Statutory Auditors | |||||
| Stefano Mercorio | Fiera M ilano SpA | - | - | - | - |
| Alfredo Mariotti | Fiera M ilano SpA | - | - | - | - |
| Damiano Zazzeron | Fiera M ilano SpA | - | - | - | - |
| Executives with | Investee | No. of shares | No. of shares | No. of shares | No. of shares |
| strategic responsibilities | company | held | purchased | sold | held |
| at 31.12.2013 | at 31.12.2014 | ||||
| Fiera M ilano SpA | 10,130 | - | 10,130 |
No person in the above table holds shares in the subsidiary companies of Fiera Milano SpA.
In this Report on Corporate Governance and Ownership Structure (hereinafter the Report), Fiera Milano SpA provides an account of its corporate governance system, information regarding the ownership structure, and disclosure on its compliance with the recommendations under the principles and application criteria of the Borsa Italiana Self-regulatory Code of Listed Companies, as amended in December 2011 and subsequently in July 2014 (hereinafter the Self-regulatory Code). The term corporate governance is used to identify the body of rules and procedures adopted for the management and control of joint stock companies. An effective and efficient corporate organisation model must be capable of managing, using the correct means, the business risks and potential conflicts of interest that can arise between Directors and shareholders and between shareholders with a controlling interest and those with a non-controlling interest in the Company. These aspects are of even greater significance in listed companies with a wide shareholder base.
The indications given by Borsa Italiana in the V edition of the Format for the Report on Corporate Governance and Ownership Structure, published in January 2015, have been taken into account in the preparation of this Report.
Fiera Milano SpA, an issuer of shares listed on the regulated market and specifically in the Segment for companies that meet the highest requirements of Borsa Italiana SpA (the STAR segment), uses a corporate governance system that meets the requirements of enacted laws, existing regulations and those of the Borsa Italiana Self-regulatory Code.
The Company uses a traditional administration and control model based on the existence of a Board of Directors and a Board of Statutory Auditors.
As part of the initiatives to maximise shareholder value and guarantee the transparency of management actions, Fiera Milano SpA has drawn up concise and clear rules of conduct, governing both its organisational structure and its third-party relations, in particular those with shareholders, which conform to national and international best practice.
The issued and fully paid-up share capital is Euro 42,147,437.00 (forty-two million one hundred and forty-seven thousand four hundred and thirty-seven/00) made up of no. 42,147,437 (forty-two million one hundred and forty-seven thousand four hundred and thirty-seven) registered shares each of nominal value Euro 1.00 (one).
The shares are indivisible and each carries one voting right except in the case of treasury shares held, either directly or indirectly, by the Company that do not have this right.
The Company has issued no other financial instruments with rights to subscribe to newly issued shares.
At 31 December 2014, the Company had no share-based incentive plans involving an increase, even without payment, of the share capital.
There are no restrictions on the transfer of shares.
According to the shareholders' register and communications received pursuant to Article 120 of Legislative Decree of 24 February 1998, no. 58 (the Consolidated Finance Act), the shareholders that at 31 December 2014 held, directly or indirectly, shares equal to 2% or more of the share capital were as follows:
| Declarant | Direct shareholder | No. of shares % of ordinary share capital % of share capital admitted to vote | ||
|---|---|---|---|---|
| Fondazione E.A.Fiera Internazionale di Milano Fondazione E.A.Fiera Internazionale | di Milano | 26,157,609 | 62.062 | 62.999 |
| Total | 26,157,609 | 62.062 | 62.999 | |
| Camera di Commercio Industria Artigianato e Agricoltura di Milano |
Parcam srl | 2,873,169 | 6.817 | 6.920 |
| Camera di Commercio Industria Artigianato e Agricoltura di Milano |
1 | 0.000 | 0.000 | |
| Total | 2,873,170 | 6.817 | 6.920 | |
| Fondazione Cariplo | Fondazione Cariplo | 1,020,529 | 2.421 | 2.458 |
| Total | 1,020,529 | 2.421 | 2.458 | |
| Banca Popolare di Milano SCRL | Banca Popolare di Milano | 1,065,747 | 2.529 | 2.567 |
| Banca Akros | 89,250 | 0.212 | 0.215 | |
| Total | 1,154,997 | 2.741 | 2.782 |
No shares with special rights have been issued.
At 31 December 2014, there were no employee stock option plans.
There are no restrictions on voting rights.
There are no shareholder agreements as under Article 122 of the Consolidated Finance Act.
There are no changes to control clauses pursuant to Article 123-bis, paragraph 1, letter h) of the Consolidated Finance Act.
As regards tender offers, the Company's Articles of Association meet current regulations on the passivity rule and do not provide for the application of the neutralisation measures under Article 104 bis, paragraphs 2 and 3 of the Consolidated Finance Act.
In the 2014 financial year there was no mandate to increase the share capital as provided under Article 2443 of the Italian Civil Code, or any authorisation from the Shareholders' Meeting to acquire treasury shares under Article 2357 and following of the Italian Civil Code.
At 31 December 2014, Fiera Milano SpA held directly no. 626,758 treasury shares, equal to 1.49% of the share capital. These treasury shares were acquired prior to the 2014 financial year on the authorisations given the Board in previous financial years.
As approved by the General Council of its controlling shareholder Fondazione Ente Autonomo Fiera Internazionale di Milano on 26 July 2004, Fiera Milano SpA, given its organisational and management autonomy, is not subject to any direction or coordination, pursuant to Article 2497 and following of the Italian Civil Code, by its controlling company.
However, any presumption of direction and coordination is negated by the fact that Fondazione Ente Autonomo Fiera Internazionale di Milano exerts no decisive influence on the long-term strategic plans or annual budgets of Fiera Milano SpA or on its investment decisions, nor does it determine its policies regarding the acquisition of goods and services on the market, or coordinates any business initiative or activity in the sectors in which the Company and its subsidiaries operate.
Fiera Milano SpA adheres to the Self-regulatory Code, approved by the Corporate Governance Committee of Borsa Italiana in March 2006 and as modified in December 2011 and subsequently in July 2014.
The Self-regulatory Code is publicly available on the website of the Committee for Corporate Governance at http://www.borsaitaliana.it/comitato-corporategovernance/codice/2014clean.pdf
The governance structure of Fiera Milano SpA is not affected by the legal provisions of countries other than Italy.
The Board of Directors has a central role in the Company organisation and is responsible for its activities and strategic and operating guidelines, as well as for verifying that the necessary controls exist to monitor Company and Group performance.
As required by law and by the Company's Articles of Association, the appointment of members of the Board of Directors is made from lists presented by shareholders who, either alone or in association with other shareholders, hold shares with voting rights that represent at least 2.5% of the shares with voting rights in ordinary shareholders' meetings, as required by both the Company's Articles of Association and by Consob Resolution no. 19109 of 28/01/2015. The lists must be deposited at the registered office of the Company at least twenty-five days preceding the date fixed for the first convocation of the shareholders' meeting and must be made publicly available at least twenty-one days prior to this date in compliance with enacted regulations.
Ownership of the minimum amount required to present lists is based on the shares that are registered to the shareholder on the day on which the lists are deposited with the Company. To prove ownership of the minimum number of shares required to present lists, the Shareholders must provide within the time for the publication of the lists by the Company the relative certification released in accordance with law by authorised intermediaries.
Each list must be accompanied, within the aforementioned time, by (i) information concerning the identity of the shareholders that have presented the list and the percentage of the company held by these shareholders, (ii) statements in which each candidate agrees to be a candidate and declares that there is no cause that would make them ineligible or incompatible and that they meet the necessary requirements under enacted law to be appointed, including any requirements of independence as established by the Statutory Auditors and as required by law and by the Selfregulatory Code (iii) a curriculum vitae of the business career of each candidate, indicating directorships and executive positions held.
It is also a legal requirement that at least one Director be appointed from the list with the greatest number of votes presented by minority shareholders and which is in no way connected, even indirectly, with the shareholders who presented, or joined together to present, or voted for the list that received the highest number of votes.
Under the Company's Articles of Association at least one of the members of the Board of Directors, or two members if the Board is made up of more than seven members, must be considered independent by the Statutory Auditors in accordance with enacted law (Article 148 of the Consolidated Finance Act).
Furthermore, Fiera Milano SpA, as a company belonging to the STAR segment of the Italian Equity Market, is required to have two independent Directors in a Board of Directors of up to eight members and three independent Directors in a Board of Directors of between nine and a maximum of fourteen members. The Self-regulatory Code also recommends that an adequate number of independent Directors are appointed to the Board of Directors by applying the principles and criteria under articles 2 and 3 of the aforementioned Self-regulatory Code.
As indicated in the Self-regulatory Code, a Director of a listed company is not normally considered independent if:
or who is, or in the last three financial years has been, an employee of any of the aforementioned entities;
d) a Director receives or has received in the previous three financial years from the issuer, or one of its subsidiaries or from a parent company, significant additional remuneration to the compensation agreed for a non-executive Director of the issuer or to the remuneration for being a member of a committee recommended in the Self-regulatory Code, including any incentive plans linked to company performance, including those that are share-based;
The indications of the Self-regulatory Code regarding the requisite independence of Directors have been adopted in full by companies in the STAR segment as part of the enacted Rules for Markets Organised and Managed by Borsa Italiana SpA.
On 9 July 2012, the Board of Directors of Fiera Milano SpA approved the amendments, under the procedures described in Article 17.1, paragraph (iv) of the Company's Articles of Association and pursuant to Article 2365, paragraph 2, of the Italian Civil Code, to the Company's Articles of Association so that they met the provisions of Law no. 120 of 12 July 2011.
The amendments to the Company's Articles of Association affected Articles 14 ("The Board of Directors") and 20 ("The Board of Statutory Auditors"). These were altered to meet the new relevant legal (Article 147-ter, paragraph 1 ter, of the Consolidated Finance Act) and regulatory requirements (Article 144-undecies.1 of the Consob Rules no. 11971/99 and subsequent amendments and supplements).
In particular, the rewording of Article 14, "The Board of Directors", required the insertion of:
It should be noted that the Company has not taken advantage of the transitional period which permits one fifth of the members of the Board of Directors and of the Board of Statutory Auditors to be from the less represented gender on the first reappointment of these corporate bodies following introduction of the law.
The amendments to the Statutes will be applied from the first meeting of the newly appointed Board of Directors and the Board of Statutory Auditors following the expiry of the mandate of the current Board of Directors.
It should be noted that, for completeness of information, the full Company Articles of Association is available on the Company website www.fieramilano.it in the section Investor Relations/Corporate Governance/Articles of Association.
Board of Directors' Management Report 98 To date, the Company has not considered it necessary to have a formal plan for the succession of the Chief Executive Officer as the professional characteristics present within the Board of Directors and in the present management should ensure continuity in the operational management of the Company.
The Board of Directors appointed at the Shareholders' Meeting of 27 April 2012, from a single list presented by the majority Shareholder, Fondazione Ente Autonomo Fiera Internazionale di Milano, will hold office until approval of the Financial Statements at 31 December 2014 (Table 1 attached to the present Report gives the structure of the Board). The Board is composed of nine Directors. Below is given a brief curriculum vitae of each Director with his/her main personal and professional attributes, as well as a list of appointments held.
A graduate in Economics & Commerce from the Bocconi University, he is Chairman of SAGSA Spa, a company operating in the office furniture sector. Among other positions that he holds, he is Chairman of Museimpresa, a Board Director of Mediaset SpA and a member of the executive council of Siam 1838, a company for the Encouragement of Arts and Trades, and of ISPI (Istituto per gli Studi di Politica Internazionale). From 2001 and 2005, he was the Chairman of Assolombarda where, from 1997 – 2001, he was Chairman of the Small Enterprise segment and where he remains a member of the Board and of the Committee. Until June 2010 he was a Board and Committee member of Confindustria. Michele Perini is also part of the Managing Board of Telefono Azzurro.
A graduate in Business Economics from the Bocconi University in Milan and specialised in Employment Management, from 1990 to 1995 he held marketing positions at Bull HN Information System Italia; from 1995 to 1997 he has been responsible for the development and implementation of automation at Shell Italia SpA and, from 1997 to 2000, he has been Sales Manager for Italy for Compaq SpA. Subsequently and until 2002, he was corporate sales director for North-West Italy for Omnitel-Vodafone SpA. From 2002-2005, he has been Strategic Marketing and Business Development Director and Group Chief Marketing Officer for Poste Italiane SpA. From 2005 to 2006, he has been the Central Director of Organisation and Personnel and Resources and Information Systems for the Lombardy Region and, from July 2008 to September 2009, he has been a member of the Board of Directors of Sogei SpA. Since April 2009, he has been the Chief Executive Officer of Fiera Milano SpA having been its Director General from January 2007. From May 2012 to August 2013 he was a Director of Nolostand SpA, a Fiera Milano Group company.
Deputy Vice Chairman of Fiera Milano SpA since April 2009.
A graduate in law from the State University of Milan, in 1980 he set up his own company and since 1988 has been a lawyer entitled to represent clients in the Court of Cassation. From 1983 to 1989 he has been an honorary district judge. He was a member of the Advocates and Procurators Council of Varese for three mandates and is registered in the Register of Auditors of Accounts. Since 1995 he has held many appointments and, since 2006, has been the Mayor of Varese; he is currently Vice Chairman of the National Committee of ANCI.
A Board member of Fiera Milano SpA, since 2006 and, since February 2010, also its Deputy Chairman.
He is an entrepreneur in clothes retailing. Currently he holds the following positions: Vice Chairman of Confcommercio Nazionale; Deputy Vice Chairman of Confcommercio Lombardia; Chairman of Federazione Moda Italia and regional Chairman of Federmodamilano, both entities that represent retail and wholesale companies of textiles, garments, furnishings, shoes, leather goods, travel goods and accessories; Deputy Chairman of Fondo Mario Negri – an insurance fund for company executives in marketing, shipping and transport; Chairman of 50&PIU'.
A Board member of Fiera Milano SpA since April 2009.
In 2000, he began his business career in the property and tourism sectors. From 2002 to 2003, he has been a Board Director of the 2005 Lombardy Foundation Committee. From 2003 to 2010, he has been a founding partner and Chairman of the Board of Directors of the Lombardy Club Foundation. Since 2007, he has been Vice Chairman of the Sondrio Società di Sviluppo Locale SpA. He has been the Chairman of Nolostand SpA, part of the Fiera Milano Group, since June 2014.
He graduated in Political Sciences from the University of Turin. Since 1 January 2015, he holds the office of General Director of Tecnoinvestimenti SpA. He is also Chief Executive Officer of Parcam Srl and Tecno Holding SpA, Chairman of the Board of Statutory Auditors of Infocamere and a Director of Promos Internazionalizzazione e Marketing Territoriale/Azienda Speciale CCIAA Milano.
A Board member of Fiera Milano SpA since October 2012.
He graduated in Economics and Commerce from the Ca' Foscari University in Venice; a recipient of numerous academic grants, which included grants from the Consiglio Nazionale delle Ricerche, the British Council and the "Stringher-Mortara" scholarship from the Bank of Italy, he specialised in Economics at Pembroke College, University of Oxford.
From 1971 till 1972 he held the post of Faculty Assistant at the Institute of Political Economy in the Political Sciences faculty of the University of Padua.
From 1974 till 1979 he worked in the Money Markets research department of the Bank of Italy.
Between 1979 and 1989, he held various positions within the Fiat Group: Manager for International Financial Affairs of Fiat SpA., International Treasury manager of Fiat SpA, Finance Director of Fiat Auto SpA, and Financial Affairs Director for the Fiat Group.
From 1989 until 14 June 2003, he worked at Banca Nazionale del Lavoro, first as Vice Managing Director and then, from November 1990, as Chief Executive Officer.
From January 2004 until December 2007, he was Chairman of the Fondazione La Biennale di Venezia.
Since 2000, in addition to the positions currently held, he also held various other positions including as a member of the Board of Governors of the Querini Stampalia Foundation of Venice and a Board Director of Terna SpA. and of Snam Rete Gas SpA. From 2006 to 2013 he was a senior advisor to TPG. Currently he holds the following positions:
He is also a Member of The Council for the United States and Italy, of the Comitato Leonardo and of the Giunta Assonime.
Since 21 May 2014 he has been a member of the Board of Directors of CTS – Confartigianato Trasporti Servizi. From 21 December 2013 he has been a member of the Supervisory Board of Banca Popolare di Milano and from 5 August 2013 the Chairman of Fiera Milano Media SpA. He has been a member of the Board of Directors of Fiera Milano SpA since April 2009. He has been a Board member of CIPA Fiera Milano since January 2010. From 19 January 2011 until 8 May 2013, he was Chairman of Impresa Sviluppo Srl. From 8 April 2010 until 24 December 2013, he was a Board member of Banca Popolare Lecchese (Banca Etruria Group). He has been a Board member of "Artquick Srl" – Turin since 18 February 2010; Coordinator of the Activities of the Secretary General of Confartigianato Nazionale since February 2005; Board member of Confeventi Srl – Bologna since 9 May 2007. From 16 April 2007 until 5 August 2013, he was a Board member of Fiera Milano Congressi. He has been a Member of the Executive Council of the Consiglio Direttivo Nazionale A.N.CO.S. – Associazione Nazionale Comunità Sport since 10 November 2006. He was a Board member of "Napoli Orientale SpA". He was a member of the management board of Società Infrastrutture Lombarde SpA from October 2004 to June 2010; Board member of Società Edizioni Fiera Milano from November 2003 to 16 April 2007; Chairman and Chief Executive Officer of Campione d'Italia SpA from 1988 to 1992; Chairman of the Regional Management Committee for Lecco from 1982 to 1990; Board member of Banca del Monte di Lombardia (now Banca Europea) from 1987 to 1991; Member of the Regional Management Committee for Lecco from 1975 to 1982. He has also been Chairman of the Auditors College of the Ente Provinciale del Turismo of Como and, from 1974-1979 was part of the Chairman's office of the Lombardy Region under the Chairman, Mr Golfari.
A Board member of Fiera Milano SpA since October 2003.
In 1976 he was appointed Assistant Director of the Milan headquarters of Credito Italiano and from 1978-2004 was the Chief Executive Officer of "Gruppo Siti Novara", a multinational company operating in the mechanical engineering sector. He has been a Director and member of the Executive Committee of Fondazione Cariplo (1998-2001) and of Intesa Asset Management (2000-2003). From 2001-2004 he was Vice Chairman of the Industrial Association of Novara and, since 2004, has been a board Director of Esatri SpA, a company belonging to the Intesa San Paolo group. He is currently a Board member of Sirefid SpA; Equiter SpA; Banca Fideuram SpA and Cassa di Risparmio di Città di Castello, all companies belonging to the Intesa – Intesa San Paolo Group.
On 29 October 2012, the Board of Directors co-opted the Director Davide Croff to replace Mr Motterlini who resigned.
Subsequently the Shareholders' Meeting of 23 April 2013 approved the appointment of Mr Davide Croff as a Director until the date the Financial Statements at 31 December 2014 are approved.
With the exception of the Chief Executive Officer, all other members of the Board are non-executive Directors since none have any management responsibility.
For information on any positions as Director or Statutory Auditor held by members of the Board of Directors in other companies listed on regulated markets, also foreign, or in financial, banking or insurance companies or companies of significant size, please refer to the section above and Table 1 of the present Report.
It should be noted that the number of independent Directors shown above exceeds the minimum number compared to the total number of Board Directors that is required by enacted law and regulations.
The Board of Directors verified the requisite independence of the Directors at the board meeting on 12 May 2014. On the aforementioned date, the Board of Statutory Auditors, as part of their duties under the law, verified that the Board of Directors had correctly applied the criteria and procedures for ascertaining and evaluating the independence of its own members.
The Chairman of the Board of Directors and the Chairman of the Board of Statutory Auditors therefore certified the existence of the requisite independence of the Directors on the basis of declarations given to this end in accordance with enacted law.
Profiles of the members of the Board of Directors may be found on the Company website www.fieramilano.it under Investor Relations/Corporate Governance/Corporate Bodies.
The Board of Directors is invested with the widest powers for the ordinary and extraordinary management of the Company; specifically, it may take any action deemed appropriate or useful to achieve the Company objectives, except for those which, pursuant to law, are reserved for the Shareholders' Meeting.
In addition to those responsibilities that by law are the exclusive preserve of the Board of Directors, the Company's Articles of Association specifically assign it the following responsibilities:
publications, royalties and similar and any intellectual property rights in general that are connected to the corporate objectives of the Company;
The Board of Directors is also responsible for the following:
The Chief Executive Officer is vested with all the powers necessary for the ordinary and extraordinary management of the Company, except for those matters that are the exclusive preserve of the Board of Directors.
The Chief Executive Officer provides the Board of Directors, at least quarterly, with adequate information on the general progress of operations, on the foreseeable outlook for the business, as well as on the more significant transactions carried out by the Company and its subsidiaries.
The Directors notify the Board of Statutory Auditors in a timely manner in writing, and at least quarterly at the meeting of the Board of Directors, of any material economic, financial or equityrelated transactions carried out by the Company and its subsidiaries so that the Board of Statutory Auditors of Fiera Milano SpA may evaluate if the transactions approved and implemented conform to the law and to the Company's Articles of Association and are not manifestly imprudent, risky or go against any resolutions of the Shareholders' Meeting or could compromise the integrity of the Company shareholders' equity.
As regards the provisions of point 1.C.3 of the Self-regulatory Code concerning an opinion of the Board about the maximum number of appointees as Directors or Statutory Auditors in listed companies, financial institutions, banks, insurance companies or companies of a significant size, it should be noted that the current Articles of Association of the Company do not stipulate a maximum number of directors. However, the members of the Board of Directors have undertaken to guarantee that they will carry out their duties effectively and dedicate to them the requisite time. This is confirmed by the significant number of Board meetings held during the 2014 financial year and the high level of attendance at these meetings.
The meetings of the Board of Directors are usually scheduled according to a timetable approved at the start of the year in order to ensure maximum attendance at the meetings. The corporate calendar is available on the Company website in the Investor Relations/Financial calendar section.
During the financial year to 31 December 2014, the Board of Directors met nineteen times with a high attendance rate for all Directors (the number of meetings attended by each member of the Board of Directors is shown in Table 1). The average duration of the board meetings was approximately two hours. Eight Board Meetings have been held to date in the current financial year.
Group executives, who are responsible for the corporate activities pertaining to matters that are on the agenda, are invited to attend board meetings to supply further information regarding the matters under discussion by the Board of Directors.
On 27 April 2012, the Board of Directors appointed a Secretary to the Board who is the Central Director of Corporate Affairs of Fiera Milano SpA.
The Chairman is supported by the Secretary in ensuring the timely delivery and completeness of the documentation supplied ahead of the board meetings and in maintaining the confidentiality of the data and information given.
Board Directors and Statutory Auditors receive the documentation and information sufficiently in advance of the date of the Board meeting to allow them to speak knowledgeably on the arguments submitted to them for discussion and approval.
The Board of Directors decided that the appropriate advance period for documentation given to Directors and Statutory Auditors ahead of board meetings was: seven days prior to the date of the meeting for any documentation regarding financial statements, budget and business plan except when there are valid reasons otherwise.
In 2014, the Board of Directors evaluated the organisational and accounting systems of the Company with particular reference to the internal control and risk management system. The Board of Directors also evaluated and identified the nature and level of risk compatible with the strategic objectives of the Company and also general management performance, particularly as regarded the information received by the Chief Executive Officer, and periodically compared the results achieved with the targets. The procedures and the methods that support the evaluations made by the Board of Directors are described in the section "Internal Control and Risk Management System".
The Chairman directs the proceedings of the Shareholders' Meetings, verifies the correct constitution of the meeting, checks the identity and the legitimate right of attendees, oversees its conduct, including the rules governing the order and duration of any intervention, organises the voting system and the counting of votes, and scrutinises the results of any vote. The Chairman also has the duty to supervise national and international institutional relations, corporate communication, to coordinate strategies and the internal audit, and to verify that decisions taken by the Board of Directors are implemented, whilst assisting the Chief Executive Officer in the internationalisation of the Group.
The Chairman and the Chief Executive Officer, since the time of their appointments have taken care to inform the Board of Directors of the market conditions in the exhibition sector. They ensured that the Directors had adequate knowledge of the sector in which Fiera Milano SpA operates, company matters and performance, as well as the reference legal framework. In particular, the Board of Directors was made aware of the national and international environment for exhibitions with particular reference to the Brazilian, Turkish, Chinese, South African, Indian, Russian and American markets.
The Board of Directors carried out a self-appraisal of the functioning, composition and size of the Board of Directors and of its committees in the 2014 financial year.
The self-appraisal, instigated by the Chairman of the Board of Directors, was made by each Director completing a questionnaire; the results were revealed during the Board Meeting held on 30 January 2015.
The questions were designed to analyse (i) the size and composition of the Board of Directors with reference to the nature and professional experience of the Directors; (ii) its modus operandi, (iii) the composition and roles of the internal committees of the Board; (iv) the knowledge of the legal framework of the sector and the participation of Directors at meetings and in the decision-making process.
This questionnaire was completed by each Director and the results were aggregated and presented to the Board of Directors in an anonymous form.
The results of the questionnaire showed that the Board of Directors believes that the composition and modus operandi of the board meet the organisational and administrative requirements of the Company and confirmed the diversified professional experience of the Directors who contribute their capabilities and expertise to the decision making process; there was also a positive opinion regarding the frequency of the meetings. The appraisal of the internal committees was also positive as regards their role and the information flows ensured by these committees to the Board of Directors.
The Internal Control and Risk Committee and the Remuneration Committee have been set up by the Board of Directors; their roles and functions are in line with the standards indicated in the Selfregulatory Code and with corporate governance best practice.
On 27 April 2012, the Board of Directors decided against having a specific appointments committee within the Board of Directors as there has been no need to meet the criteria of 4.C.2 of the Selfregulatory Code as the Board of Directors has always carried out the functions attributed to an appointments committee in the Self-regulatory Code.
On 26 July 2013, the Board of Directors adopted "Rules for the appointment of the corporate bodies of subsidiaries", which gives guidelines for appointments to the administration and control bodies in subsidiaries with reference to the "Rules for the Regulation of Direction and Coordination by the Parent Company" (see section 11).
A Remuneration Committee has been constituted within the Board of Directors.
The Board of Directors meeting of 27 April 2012, appointed the Deputy Vice Chairman, Attilio Fontana, as Chairman of the Remuneration Committee and the non-executive Directors, Romeo Robiglio and Giampietro Omati, as the other members of the committee.
The members of the Remuneration Committee are remunerated for the work they do.
During the financial year to 31 December 2014 the Remuneration Committee met three times, with minutes taken, making proposals, as is its duty, to the Board of Directors. The average duration of these meetings was approximately ninety minutes. Three meetings have been held to date in the current financial year.
Information on the composition, activities and operation of the Remuneration Committee, is given in the Report on Remuneration published in accordance with Article 123-ter of the Consolidated Finance Act.
Reference should be made to the Report on Remuneration published in accordance with Article 123 ter of the Consolidated Finance Act for:
The Board of Directors set up an Internal Control and Risk Committee composed of independent and non-executive Directors. The Committee has an advisory role, makes proposals and carries out preliminary research to aid the Board of Directors in its decisions and evaluations regarding the internal control and risk management systems, as well as the approval of the financial statements and the six month interim financial statements; it gives the Board of Directors written information, on at least a six-monthly basis when the annual financial statements and the interim six-monthly statements are approved, regarding its activities and also the adequacy of the internal control and risk management systems.
The Internal Audit Committee has the following remit:
to express a considered opinion on specific aspects regarding the identification of the main corporate risks;
to evaluate, in collaboration with the Manager responsible for preparing the Company accounts, the Independent Auditors, and the Board of Statutory Auditors, the correct application of accounting principles, as well as their consistent application within the Group in the preparation of the consolidated financial statements;
The Chairman of the Board of Statutory Auditors (or a member of the Board of Statutory Auditors delegated by him) and the Head of Internal Audit for Fiera Milano SpA attends meetings of the Internal Control and Risk Committee. Other Statutory Auditors may also attend.
If considered appropriate, the Committee may invite directors and executives of Fiera Milano SpA or of Group companies to attend its meetings so that they may give their opinion on specific matters; it may also invite other persons who may be able to assist in the business of the Committee.
The Internal Control and Risk Committee has access to information and the corporate functions necessary to expedite its business and may also use external consultants.
At its meeting on 27 April 2012, the Board of Directors appointed the following as members of the Internal Control and Risk Committee: Renato Borghi, Roberto Baitieri and Michele Motterlini, all independent non-executive Directors. At the time of these appointments, the Board of Directors expressed its positive opinion on the professional accounting and financial experience of the Director, Mr Motterlini. Subsequently, following the resignation of Mr Motterlini, on 29 October 2012 the Board approved the appointment of the independent and non-executive Director, Mr Davide Croff, to the Internal Control and Risk Committee. On the appointment of the aforementioned Director, the Board of Directors expressed a favourable opinion regarding the professional accounting and finance experience of the Director Mr Croff.
At the Board Meeting of 25 October 2013, the Board of Directors decided that the Chair of the Internal Control and Risk Committee should rotate every six months among the members of the Committee.
The members of the Internal Control and Risk Committee are remunerated for the work they do.
During the financial year to 31 December 2014, the Internal Control and Risk Committee held eleven meetings, minuted in accordance with the regulations. The average duration of the meetings of this Committee was approximately one hour. Three meetings have been held to date in the current financial year.
During the financial year, the Internal Control and Risk Committee focused on monitoring the implementation of the shared services of the Group; evaluating the work schedules prepared by the Head of Internal Audit, with relevant periodic reports on the audit activity; the relevant audit reports and the report on the fundamental questions under Article 19, paragraph 3 of Legislative Decree no. 39/10; and evaluating, together with the Manager responsible for preparing the Company accounts, the correct application of the accounting principles adopted in preparing the Company accounts and, in particular, the methodology followed in applying the impairment test procedures under IAS 36. The Internal Control and Risk Committee exercised its prerogative to give a preliminary analysis to the Board of Directors identifying, quantifying, managing and monitoring the main risks by carrying out (i) an overall risk profile analysis of the Group 2014-2017 business plan (ii) an analysis of the risk profile of the relationship with Expo 2015 SpA and (iii) an examination and evaluation of the Group risk map updated to 31 December 2014.
On the subject of related-party transactions, the Committee expressed a positive opinion on the resolution of the Board of 14 March 2014, expressed its binding opinion under Article 9.2 of the Procedure for Related-party Transactions regarding the suitability and substantive correctness of the renegotiation terms of the lease contracts for the exhibition sites of Rho-Pero and Milan with the controlling shareholder Fondazione Ente Autonomo Fiera Internazionale di Milano.
The internal control and risk management system of the Company and the Group is made up of rules, procedures and organisational structures that are designed to identify, quantify, manage and monitor the main risks. It contributes to the conduct of the Company and the Group as it is consistent with the corporate objectives established by the Board of Directors of the Parent Company and favours the adoption of informed decisions. It also contributes to guaranteeing (i) the protection of shareholder equity, (ii) efficient and effective corporate procedures, (iii) reliability of financial reporting, and (iv) compliance with applicable laws and rules, the Company's Articles of Association, and internal procedures.
Fiera Milano Group has developed an integrated risk management model based on internationally recognised Enterprise Risk Management (ERM) standards.
The main aim is to have a systematic and pro-active approach to identifying the principal risks to which the Group is exposed and to identify as early as possible the potential negative effects, taking suitable action to mitigate these effects while continually monitoring the relevant exposure.
In order to achieve this Fiera Milano has compiled a catalogue of Group risks linked to the strategies being implemented, together with a risk mapping and risk scoring methodology, and has made the necessary organisational changes so as to identify the roles and responsibilities of those involved.
Specifically, the Group integrated risk management process entails an annual (i) update of the risk catalogue according to the strategies implemented and the management and business model used; (ii) assessment of the risks by the management of Fiera Milano SpA and of its subsidiaries; (iii) consolidation of information and prioritisation of the risks and the consequent course of action; (iv) tolerance analysis of any exposure identified and formulation of the appropriate management strategies/actions and the identification of those responsible for implementing such actions; (v) monitoring over time of any exposure that has been identified.
The Internal Control and Risk Committee and the Board of Statutory Auditors are informed of the results of the aforementioned procedures.
The aforementioned integrated risk management model cannot be considered separately from the internal control system used for the financial information process as both are elements of the overall internal control and risk management system of Fiera Milano SpA. It should be noted that the process for preparing the annual and interim financial statements and, in particular, the processes to describe the principal risks and uncertainties to which Fiera Milano SpA and the Group are exposed, are strictly linked and coordinated to the information flows deriving from the Enterprise Risk Management (ERM) processes of the Company and of the Group, which aim to identify, evaluate and mitigate any corporate risks.
In recent financial years, Fiera Milano SpA has modified its internal control system for financial reporting in keeping with the provisions of Law 262/05 so as to document, where necessary, the administrative and accounting control model adopted, and to schedule and carry out periodic checks on the operational efficacy of the controls that are behind the certification processes of the Manager responsible for preparing the company accounts.
The aforementioned administrative and accounting control model combines the internal procedures and methods used by the Company to attain the corporate targets of integrity, accuracy, reliability and timeliness of financial information. The approach of Fiera Milano SpA in formulating, implementing and continually updating the aforementioned administrative and accounting control model is in line with generally accepted best practice, the guidelines for the duties of the Manager responsible for preparing the company accounts under Article 154-bis of the Consolidated Finance Act issued by Confindustria, and is based on a process that complies with the Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
This reference model, based on the components of the internal control system (Control environment, Risk assessment, Control activities, Information & Communications, and Monitoring) necessary to attain the aforementioned financial reporting objectives favours, inter alia, the identification of coordination opportunities and the development of synergies among, for example, Enterprise Risk Management activities, activities undertaken to comply with Decree Law 231/2001 and the activities of the Head of Internal Audit.
The internal control system phases relating to the financial reporting system of Fiera Milano SpA can be divided into the following macro-categories:
As part of the responsibilities and powers given him/her by the Board of Directors, the Manager responsible for preparing the Company accounts must effectively implement any actions falling into the above categories.
The main activities under the model used, and included in the macro-categories listed above, are summarised below.
This category includes all activities concerned with identifying or updating the extent of analysis and monitoring carried out, the identification and assessment of risks, the planning of administrative and accounting procedures and the formulation and assessment of checks aimed at mitigating those risks.
At least once a year, the Manager responsible for preparing the Company accounts decides the areas of the Company and Group processes that will be subject to risk analysis and to monitoring of the controls existing in the administrative and accounting control model. This will be done using both quantitative and qualitative parameters to ensure that the most significant areas and/or those that pose the greatest risk of failing to meet the objectives of the financial reporting controls are included in the aforementioned areas.
Defining the areas to be analysed and monitored necessitates identification of the relevant accounts, disclosures and connected procedures so that the subsequent identification and assessment of controls, both at entity level and at procedure and transaction level, can effectively mitigate the risks inherent in the process of preparing financial information.
With regard to identifying and assessing risk in financial reporting, the approach adopted considers both the risk of unintentional errors and those that may be caused by fraudulent activity, providing for the formulation and monitoring of checks and balances that address these types of risk, as well as coordinating the controls implemented with others in the overall internal control system.
To support the assessment of inherent risk levels, the reference criteria used are based on the following main potential risk indicators, generally recognised by the reference best practice: changes in information systems, processes and procedures and other complex elements, for example, the complexity of information processing required by a certain procedure, a high level of transactions, or, for example, in processes that incorporate a considerable amount of estimates and valuations, the adequacy of the documentation and the reliability of the assumptions made.
When significant risks in financial reporting are identified, the administrative and accounting control model provides for the appropriate identification of controls to mitigate these risks. Specifically, the approach adopted takes adequate account of both manual controls and the data system controls in the administrative and accounting procedures, the so-called automatic system controls application, the general IT control that govern system access, the control of developments and modifications to the application systems, and the adequacy of the information structures.
The administrative and accounting model, in line with reference best practice, ensures that the surveillance procedures for the processes, risks and controls is updated for significant changes in the Group administrative and accounting procedures whenever necessary.
Based on the results of monitoring the processes, risks and controls, the Manager responsible for preparing the Company accounts defines or updates the administrative and accounting procedures and guarantees their adequacy as regards the internal control model and monitors the various phases of the definition or updating of the procedures.
In particular, the updating of the administrative and accounting procedures is done in conjunction with the evaluation of the design of the controls and the continuous monitoring of their implementation.
the Manager responsible for preparing the Company accounts constantly monitors the administrative and accounting procedures, with particular reference to those linked to the preparation of the financial statements, the consolidated financial statements and the summary half-year financial statements, as well as any action or communication of a financial nature that requires statements, attestations and declarations under paragraphs 2 and 5 of Article 154-bis of the Consolidated Finance Act, so as to ensure the adequacy and effective implementation of these procedures.
To achieve this, special verification actions to ascertain the correct implementation of the controls incorporated in the administrative and accounting procedures exist. The checks, analyses, and verification of the administrative and accounting procedures are based on defining a test strategy that determines the modus operandi, the controls and ways of monitoring the procedural systems implemented.
The timetable of the monitoring activity is prepared in such a way as to give priority to verifications of identified "key" controls, and to balance the objectives of efficiency with the requirement of achieving adequate coverage of the verification activities, introducing rotational tests for the significant processes and sub-processes of subsequent important balance sheet dates.
With regard to the organisational aspects and to the roles involved in the various phases of formulating, implementing, monitoring and updating over time the administrative and accounting control model, it should be noted that specific information flows have been defined between the Head of Internal Audit and the corporate, administrative and control committees and the corporate executives and/or areas that, outside the Department of Administration, Finance and Tax, are involved in compiling, preparing and circulating the annual financial statements, the consolidated financial statements, the summary half-year financial statements, the interim management reports and, more in general, any information subject to attestation/ declaration by the Manager responsible for preparing the company accounts. The accounting and administrative model also covers specific information flows among Group companies and internal attestations/declarations.
In preparing the annual and interim financial statements and describing the principal risks and uncertainties to which Fiera Milano SpA and the Group are exposed, the Manager responsible for preparing the Company accounts works with the Enterprise Risk Management of the Company and of the Group in order to identify and assess all corporate risks.
In accordance with the provisions of Article 36, as referred to in Article 39, paragraph 3 of the Stock Market Regulations, the Company and its subsidiaries have administrative and accounting systems which make public the accounting procedures used to prepare the consolidated financial statements of the Companies to which this law is applicable and which permit the regular communication of the data required to prepare the financial statements to the Parent Company management and its independent auditors.
Therefore, the conditions exist under the aforementioned Article 36, paragraphs a), b) and c) of the Stock Market Regulations issued by Consob.
The Board of Directors is responsible for internal control and risk management and, with the help of the Internal Control and Risk Committee, for establishing its guidelines and periodically verifying that it is fit for purpose and is functioning effectively, ensuring that the principal corporate risks are identified and managed in an appropriate manner. The Chief Executive Officer is responsible for implementing the guidelines drawn up by the Board of Directors by setting up, managing and monitoring the internal control and risk management system.
The Head of the Internal Control Department is responsible for verifying that the internal control and risk management system is fit for purpose and working; he/she is not hierarchically answerable to anyone in charge of an operating area but reports directly to the Chairman so that independence and autonomy are guaranteed. There is also a system for functional reporting to the Internal Control and Risk Committee. The Head of the Internal Control Department has direct access to all the information necessary and to adequate means for carrying out his/her role.
It is the responsibility of the Board of Directors, on the suggestion of the Chief Executive Officer, prepared in conjunction with the Chairman, and having received a favourable opinion from the Internal Control and Risk Committee and having consulted the Board of Statutory Auditors, to appoint or cancel the appointment of the Head of the Internal Control Department and to ensure that the latter has all the resources required to carry out his/her duties and is remunerated in line with company policies. The Board of Directors is also responsible for annually approving the work schedule prepared by the Head of the Internal Control Department, having considered the opinion of the Internal Control and Risk Committee, consulted the Board of Statutory Auditors, the Chairman and the Chief Executive Officer.
The Head of the Internal Control Department reports regularly to the Chairman and periodically to the corporate control bodies, the Internal Control and Risk Committee and the Board of Statutory Auditors.
The Company has adopted an Organisation, Management and Control Model in accordance with Legislative Decree no. 231/01.
The aim of the Organisation, Management and Control Model is to describe the operating and conduct rules governing the Company's activities, as well as the additional controls that the Company has adopted in order to prevent any of the offences described in the Decree being committed. The Model covers the current organisational and control tools, such as the organigram, the system of proxies and delegations and the service instructions.
In particular, the Model aims to:
Board of Directors' Management Report 112 The Company's Model is composed of a general part, which describes the contents of Legislative Decree no. 231/2001, the function and principles of the Model, the identification of activities at risk, the definition of protocols, the characteristics and functions of the Supervisory Body, the activities of training and information, the system of sanctions, and fourteen special sections, each dedicated to a category of offence under Legislative Decree no. 231/2001: (i) crimes committed against the public administration (ii) corporate crimes (iii) crimes of market abuse (iv) transnational offences (v) crimes against persons in violation of workplace health and safety (vi) crimes concerning receiving, recycling and use of money and goods of unlawful origin (vii) IT crimes (viii) crimes of organised crime (ix) crimes against industry and trade (x) crimes of copyright infringement (xi) inducements not to make statements or to make false statements to the court (xii) environmental crimes (xiii) employment of citizens from outside the EU who do not have a legal right to be in the country (xiv) private bribery. Each special section gives a description of the sensitive activities, the instrumental procedures, and
the general and specific supervision principles. The Model is completed by appendices, which are an integral part of it, that include the Code of Ethics and the reporting lines of each Organisational Unit to the Supervisory Body and a catalogue of regulatory offences and predicate offences for which the Company is liable.
The last two special sections were included in the Model when the most recent update of the latter was adopted at the meeting of the Board of Directors held on 14 March 2014. These two special sections refer to offences that have recently been included in the range of so-called "predicate offences" as regards liability under Legislative Decree 231/01.
In order to monitor functioning, efficacy and observance of the Model, and to ensure that it is updated, the Board of Directors has given a collective body the functions of a Supervisory Body, with the aforementioned duties.
The Supervisory Body is composed of the Chairman, Michele Perini, who acts as Chairman of the Supervisory Body, the non-executive and independent Director, Pier Andrea Chevallard, the Head of the Internal Control Department, Andrea Pizzoli, and of the lawyer, Ugo Lecis, acting as an external expert. The members of the Supervisory Body are remunerated for their work.
The Organisational Model, in implementation of the terms of Article 6 paragraph 2 of Legislative Decree no. 231/01, provides for specific information flows to the Supervisory Body so that it can carry out more effectively the supervision and monitoring of the functioning of the Model.
With reference to the unlisted companies of the Group that have adopted their own organisational model, the Supervisory Body has conducted research on each of these in order to identify adequate technical/operational solutions that, while respecting the mandate and powers reserved for the same by the prevailing regulations, are appropriate to the dimensions and organisational context of each corporate entity, also taking account of the relevant guidelines issued by the Parent Company.
As regards foreign subsidiaries operating under foreign law, and which do not have to adhere to the provisions of Legislative Decree no. 231/01 and which did not have their own Organisational, Management and Control Models pursuant to the aforementioned Decree 231, in addition to adopting the Code of Ethics, during 2012 they also adopted guidelines for anti-corruption rules and other compliance programmes in order to have a systematic reference framework of crime prevention regulations and standards.
Accounting audit and control has been entrusted to Reconta Ernst & Young SpA, a company registered in the specific Consob Register, in compliance with applicable law. The mandate was conferred by the Shareholders' Meeting of 29 April 2014 and relates to the financial years ending 31 December 2014-2022.
The Board of Directors of the Company, on 27 April 2012, having previously sought the opinion of the Board of Statutory Auditors, appointed as Manager responsible for preparing the company accounts Mr. Flaminio Oggioni, previously the company's Director of Administration Finance and Tax, at the same time conferring on him, through the appropriate delegation of functions, adequate means and powers to carry out the duties attributed to him under enacted law. The Board of Directors also supervises the effective compliance with administrative and accounting procedures. The Company's Articles of Association require the Manager to be an expert in matters of administration, finance and control and to possess the same characteristics of personal probity required for the Statutory Auditors under current legislation. The Manager's appointment is for three financial years and must not exceed the mandate of the Board of Directors that made the appointment.
The coordination of persons involved in the internal control and risk management system is through a series of mechanisms and means of interaction: i) scheduling and holding joint meetings of the various corporate bodies and functions responsible for internal control and risk management; ii) attendance at meetings of the Internal Control and Risk Committee by the Chairman of the Board of Statutory Auditors and other members of the Board of Statutory Auditors and by the Head of Internal Audit; iii) attendance by the Head of Internal Audit in his/ her role as a member of the Supervisory Committee under Legislative Decree 231/01.
The Company's Articles of Association currently require that the appointment of the Statutory Auditors is made on the basis of lists presented by the shareholders; the articles state that the position of Chairman of the Board of Statutory Auditors is granted to the first candidate on the second list by number of votes and who is in no way related, even indirectly, to those shareholders who presented, or combined to present, or voted for the first-placed list by number of votes. Only those shareholders who, individually or together, represent at least 2.5% of the share capital and are entitled to vote in the ordinary shareholders' meeting have the right to present a list, as required by the Company's Articles of Association and by Consob Resolution no. 19109 of 28/01/2015. A shareholder who intends to present a list of candidates and who does not own a controlling shareholding or the relative majority of the share capital of the Company must deposit a declaration stating the absence of any relationship with the controlling shareholder, as defined by the regulatory provisions. The lists must be deposited at the Company's registered office at least twenty-five days before the date fixed for the first convocation of the Shareholders' Meeting and must be made public by the Company at least twenty-one days before the date fixed for the first convocation of the Shareholders' Meeting.
Ownership of the minimum shareholding required to present lists is based on the shares that are registered to the shareholder on the day on which the lists are deposited with the Company. To prove ownership of the minimum number of shares required to present lists, the shareholders must provide within the time for the publication of the lists by the Company the relative certification by authorised intermediaries released in accordance with law.
Each list, deposited within the periods described above, must be accompanied by a declaration in which each candidate accepts the candidacy and declares that no reasons of ineligibility or incompatibility exist with reference to the accumulation of positions referred to below, that the requirements prescribed by enacted law relating to the assumption of the position are fulfilled, and must include a curriculum vitae of the career of each candidate that gives the administration and control positions held.
The Articles of Association also provide that, without prejudice to situations of incompatibility under prevailing laws, any person who is already an acting Statutory Auditor in five companies listed on regulated markets may not take up a position as Statutory Auditor and, if elected, their mandate is nullified, except where different limits are established by laws which may periodically be introduced.
On 9 July 2012, the Board of Directors of Fiera Milano SpA decided to amend, by Public Deed, Article 20 ("The Board of Statutory Auditors") of the Company's Articles of Association.
The amendment to Article 20, "The Board of Statutory Auditors", includes the same criteria and principles that exist for the appointment and replacement of members of the Board of Directors as described above.
The changes to the Company's Articles of Association will be applied when the corporate bodies are next reappointed when the mandate of the current Board of Statutory Auditors expires.
The complete Company Articles of Association with the changes shown is available on the Company website www.fieramilano.it in the section Investor Relations/Corporate Governance/ Articles of Association.
The Board of Statutory Auditors was appointed by the Shareholders' Meeting of 27 April 2012, on the basis of a single list presented by the controlling shareholder, Ente Autonomo Fiera Internazionale di Milano – and will remain in position until the approval of the Financial Statements to 31 December 2014.
The Board of Statutory Auditors is composed of the following members and a short curriculum vitae is given indicating the personal and professional experience of each Statutory Auditor.
Stefano Mercorio: born on 26 January 1963 in Bergamo, Chairman of the Board of Statutory Auditors of Fiera Milano SpA since April 2012; Statutory Auditor from April 2010 to April 2012.
A graduate in Economics and Commerce from the Università degli Studi di Bergamo, he is a fully qualified chartered accountant (Dottore Commercialista) and is registered on the Register of Accounting Auditors and is a business consultant; he is a member of the Board of Directors of Interroll Holding AG, a company listed on the Zurich stock exchange, and is also Chairman of the Board of Statutory Auditors, a standing Statutory Auditor, a Statutory Auditor and manager of numerous other companies.
Alfredo Mariotti: born on 12 March 1946 in Gerenzano (VA), Standing Statutory Auditor of Fiera Milano SpA since 2003.
A graduate in Economics and Commerce at the Università Cattolica del Sacro Cuore of Milan and registered on the National Register of Accounting Auditors. Since 2003 he has been Secretary General of Federmacchine, the industry association for the mechanical and mechanical accessory trade associations. He is also the Chief Executive Officer of Sofimu SpA (Holding), Secretary General of the Fondazione Ucimu, Director General of Ucimu – Sistemi per Produrre, and is the Chairman of the Board of Statutory Auditors or a standing statutory auditor in several companies.
Damiano Zazzeron: born on 5 September 1962 in Fagnano Olona (VA), Standing Statutory Auditor of Fiera Milano SpA since April 2012; from 2003 to April 2012 he was Chairman of the Board of Statutory Auditors.
A graduate in Economics and Commerce from the Università Cattolica del Sacro Cuore of Milan, he is a fully qualified chartered accountant (Dottore Commercialista) and is registered on the Register of Accounting Auditors. He has many years experience in the following sectors: corporate restructuring, business combinations, banking foundations and, in particular, has specific know-how of the nonprofit sector. He is a frequent speaker at workshops and seminars on legal and tax matters relating to non-profit entities. He works as a consultant, statutory auditor or auditor in several large international and national companies and entities.
Antonio Guastoni: born on 11 January 1951 in Milan, Supplementary Statutory Auditor of Fiera Milano SpA. A graduate in Economics and Commerce from the Università Commerciale Luigi Bocconi, he is a fully qualified chartered accountant (Dottore Commercialista) and is registered on the Register of Accounting Auditors. He holds several administrative and control positions.
Pietro Pensato: born on 22 December 1939 at Torremaggiore (FG), Supplementary Statutory Auditor of Fiera Milano SpA. A chartered accountant registered on the National Register of Accounting Auditors since 1995, he is also registered on the register of employment consultants. He holds the position of standing Statutory Auditor in several limited companies and is a tax, administration and human resources administration consultant.
All the members possess the necessary requisites of professionalism and probity required by enacted law, as well as the independence required by Directors in the Self-regulatory Code, possession of which was verified by the Board of Directors when they were appointed.
During the 2014 financial year, the Board of Statutory Auditors met fourteen times. The average duration of the meetings of the Board of Statutory Auditors was approximately one hour. Three meetings have been held to date in the current financial year.
The Board of Statutory Auditors, in accordance with Article 149 of the Consolidated Finance Act, monitors the Company's activities: to ensure compliance with the law and the Company's Articles of Association; to ensure compliance with the principles of correct administration; to ensure the adequacy of the company's organisational structure regarding positions and responsibilities, the internal control system and the administrative/accounting system, as well as the reliability of the latter in accurately representing management information; to ensure there exist the means of concrete implementation of the rules of corporate governance provided by the codes of conduct prepared by the companies responsible for the organisation and management of regulated markets and to ensure the adequacy of the regulations prepared by the Company and applicable to its subsidiaries, in accordance with Article 114 paragraph 2 of Legislative Decree 58/98. In accordance with Article 19 of Legislative Decree 39/2010, the Board of Statutory Auditors also oversees the legal auditing of the annual financial statements and the consolidated financial statements and the effectiveness of the internal control and risk management systems, as well as the process for financial reporting.
The Board of Statutory Auditors also monitors the independence of the independent audit firm, ensuring compliance with existing regulations, and the nature and scale of the various accounting services provided by the independent audit firm and its network of entities to the Company and its subsidiaries. In carrying out its activities the Board of Statutory Auditors also operates in conjunction with the internal control function and with the Internal Control and Risk Committee on matters of common interest through meetings and exchanges of information.
The Company has adopted an Internal Dealing Code, prepared in accordance with article 152-sexies and subsequent articles of Consob Resolution no. 11971/99 and subsequent modifications and additions, to take account of the regulations regarding market abuse.
According to the Code, a number of relevant persons, and persons close to them, who have regular access to inside information and the power to make management decisions that could affect the performance and prospects of the listed issuer, are obliged to inform the market of any transaction involving listed financial instruments issued by the company.
The perimeter of the "relevant persons" covered by the provisions of the Internal Dealing Code has been restarted with approval of 13 May 2013.
In particular the "relevant persons" are identified as the Directors, the Statutory Auditors, Members of the Fiera Milano Group Executive Committee, as well as the controlling shareholder, Ente Autonomo Fiera Internazionale di Milano, insofar as it owns a shareholding of more than 10% of the Company.
The Code provides thresholds and terms of communication to the market and related sanctions in line with those established by Consob Rules. Consistent with the recommendations contained in the Rules for markets organised and managed by Borsa Italiana SpA, the current Internal Dealing Code provides for a black-out period of 15 days preceding the Board meeting convened to approve the Financial Statements for the period, during which the relevant persons (with the exception of persons holding at least 10% of the company) are prohibited from trading in financial instruments issued by the company, with some specific exceptions.
The communications made in compliance with the Internal Dealing Code under article 152-octies, paragraph 7, of Legislative Decree no. 58/98 (filing models) are available on the Company website www.fieramilano.it in the section Investor Relations/Corporate Governance.
The Company has adopted a Procedure for the internal management and the external communication of inside information, which incorporates the provisions of regulations regarding market abuse, and which also governs the setting up of a register of persons having access to inside information.
The procedure generally entrusts the management of inside information relating to their relevant areas of competence to the Company Chief Executive Officer and the Chief Executive Officers of Group companies; it contains specific sections dedicated to the definition of privileged information, to the related procedures for managing privileged information, to the ways of dealing with so-called market rumours, and governs instances of delays in communicating to the market, the approval process for press releases, the setting up of a register of persons having access to inside information, persons authorised to maintain external relations and persons obliged to maintain confidentiality.
The Company has also adopted a specific Procedure for the maintenance and updating of the register of persons having access to inside information in order to regulate the means and responsibilities of maintaining and updating the register. The document identifies the individual responsible for managing the register, a privileged information committee and the individuals registered with it; and it governs the procedures for initial inclusion and subsequent updating of the register, as well as aspects regarding confidentiality obligations.
The Procedure was adopted on 5 November 2010 and implemented from 1 January 2011. It was prepared in compliance with the provisions of the Rule governing related-party transactions approved by Consob Resolution no. 17221 of 12 March 2010, subsequently modified by Consob Resolution no. 17389 of 23 June 2010 (hereinafter the Rule), and with the guidelines for the application of the Rule governing related-party transactions supplied by Consob with Communication no. DEM/10078683 of 24 September 2010. The current Procedure was amended with a resolution of the Board of Directors on 16 December 2013. The definition of a related-party was extended under the provisions of Article 4 of the Code, which allows companies to expand the definition of a relatedparty as a result of an analysis of the legal relationship. Given this, executives with strategic responsibilities in subsidiary companies have been included within the definition. This change was the result of the need to track the relationship of executives, particularly those of foreign companies. The Procedure was also amended to include other optional provisions. To determine a related-party of Fiera Milano, in the paragraph which defines a related party, the related parties must be identified using the specific circumstances of actual cases whilst also meeting the requirements of international accounting standard IAS 24. Furthermore, if the Internal Control and Risk Committee is entirely composed of independent Directors, it must be the first committee asked for its favourable opinion of any potential amendments to the Procedure for Related-Party Transactions.
The Procedure identifies the rules and measures to be adopted to ensure transparency and the substantial and procedural correctness of related-party transactions carried out directly by Fiera Milano SpA or through its subsidiaries. The Internal Control and Risk Committee has been identified as the body designated to express a considered opinion on the interests of the Company and the substantial correctness of the relevant conditions for the completion of related-party transactions.
The new Procedure takes advantage of the dispensation given in the Rule that, without prejudice to the requirements regarding the dissemination of information to the public, allows smaller listed companies – or for those with balance sheet assets or revenues as shown in the most recently approved Financial Statements that do not exceed Euro 500 million - the possibility of applying to Transactions of Greater Importance the guidance and approval procedures for Operations of Lesser Importance.
The Board of Directors of the Company will periodically evaluate, and anyway at intervals of not more than three years, whether to update the Procedure taking into account, inter alia, any eventual changes to its assets, as well as the efficacy of the application of the rules and guidance adopted.
The Procedure is available on the Company website, www.fieramilano.it, in the section Investor Relations/Corporate Governance/Related-party Transactions.
The Company has also adopted Organisational Implementation Instructions with regard to the Procedure for Related-Party Transactions in order to:
The Company has adopted a communication policy with the aim of establishing a continuous dialogue with all shareholders and, in particular, with institutional investors, ensuring the systematic and prompt dissemination of exhaustive information regarding its activities, while complying with the regulations on inside information.
It has therefore appointed an Investor Relations Manager within the organisational structure of the company, who reports to the Chief Executive Officer.
The means of financial communication are those of systematic contact with financial analysts, institutional investors and the specialist media in order to ensure a full and proper understanding of the trends in the Company's strategic direction, the implementation of strategy and the impact on the results of the business.
In addition, the Company believes that dialogue with investors is fostered by providing them with sufficient information to allow them to make informed decisions when exercising their rights and by organising the content of the Company's website (www.fieramilano.it in the Investor Relations section) so that they can access economic and financial information (annual financial statements, half-yearly and quarterly interim financial statements, presentations to the financial community), as well as updated data and documents of general interest to shareholders (press releases, Company calendar, composition of the Company's governing bodies, Articles of Association, minutes of Shareholder Meetings, an outline of the Group structure, the Code of Ethics, the Internal Dealing Code, and the related filing models etc.).
The Shareholders' Meeting is conducted for the benefit of all shareholders and the resolutions approved in Shareholders' Meetings, in accordance with the law and the Articles of Association, are mandatory and binding on all shareholders, including those who did not participate, who abstained or who dissented, although dissenting shareholders have rights of rescission under certain circumstances.
The Shareholders' Meeting of 23 April 2013 adopted, in accordance with the provisions of Article 9.3 of the Self-regulatory Code, Rules of Procedure that govern the conduct of Ordinary and Extraordinary Shareholders' Meetings. This Rule is publicly available on the Company website www.fieramilano.it in the section Investor Relations/Corporate Governance/Shareholders' Meetings.
The aforementioned Rules of Procedure defines the procedure to be followed to ensure the orderly and correct conduct of Shareholders' Meetings whilst guaranteeing the right of each shareholder to speak on the matters under discussion.
The Shareholders' Meeting is convened and deliberates, in accordance with law and the regulations pertaining to companies with listed shares, on matters that are its right under the law.
The Shareholders' Meeting is authorised to approve, among other matters, in an ordinary or extraordinary meeting (i) the appointment or dismissal of members of the Board of Directors and of the Board of Statutory Auditors and their relevant remuneration and responsibilities, (ii) the approval of the Financial Statements and the allocation of profits, (iii) the purchase and disposal of treasury stock, (iv) changes to the Company's Articles of Association, (v) the issue of convertible bonds.
Under enacted law, legitimate attendance and the exercise of the right to vote in Shareholders' Meetings is restricted to those who appear as shareholders on the seventh trading day prior to the date of the Shareholders' Meeting and who present to the issuer the relevant communication from an intermediary that accords with the latter's accounting records on behalf of the person having the right to vote at the Shareholders' Meeting using the aforementioned mechanism.
The Company has regulations governing the exercise of direction and coordination by the Parent Company.
This document has been prepared with the objective of setting guidelines to govern the direction and coordination activity of the higher authority over the subordinate entity, with the aim of providing a solid base for the research and development of more extensive and more effective interrelationships.
The Regulation identifies precise responsibilities regarding, respectively, the Company and its subsidiaries, within an unambiguous and reciprocal assumption of duties, and it establishes precise governance procedures appropriately gauged to provide an equitable balance between requirements for centralisation and respect for the autonomous management of the subsidiaries.
It also specifies that in the Group's regulatory hierarchy the organisational regulations come below the Parent Company's Articles of Association and those of the various companies of the Group.
This Regulation was approved by the Parent Company Shareholders' Meeting on 15 April 2010 and, subsequently, in order for it to be adopted, was presented to the Shareholders' Meetings of the individual companies of the Group so that each of them could independently approve it as the basis for their own operations.
On 12 January 2011, the individual companies of the Group amended their own articles of association to make specific reference to the exercise of direction and coordination, pursuant to Articles 2497 and 2497-bis of the Italian Civil Code, by the Parent Company Fiera Milano SpA, as well as to judge the possibility for the Parent Company to centralise the management and, in the interest of the entire Group, specific functions for the subsidiaries as part of a shared services policy.
On 23 April 2013, the Shareholders' Meeting of the Parent Company approved the integration of the Regulation with a recommendation that the members of the Board of Statutory Auditors of the Parent Company, in line with best practice on this matter, should be appointed as Statutory Auditors in the Boards of Statutory Auditors of the subsidiaries. The aim of this change was to rationalise and simplify the organisation and to create important synergies that would guarantee greater efficiency and efficacy of the control systems to the benefit of the whole Group.
There have been no changes to the corporate governance of the Company since the end of the financial year under review.
The two tables on the following pages summarise the Company's adoption of the main corporate governance aspects of the Self-regulatory Code.
The first table gives the structure of the Board of Directors and its internal committees. It lists the Directors and the category to which they belong (executive, non-executive and independent). It also shows the composition of the various committees.
The second table gives the composition of the Board of Statutory Auditors. It lists the members of the Board, both standing and substitute, and indicates if they have been nominated from lists put forward by non-controlling interests.
Both tables give information on the number of meetings held by the Board of Directors, the various committees and by the Board of Statutory Auditors and the attendance rate of each individual member. The tables also show the number of administrative positions held in other companies; these have also been detailed in this Report.
| TABLE 1: STRUCTURE OF THE BOARD OF DIRECTORS AND COMMITTEES | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| BOARD OF DIRECTORS | Internal Control and Risk Committee |
Remuneration Committee |
||||||||||||||
| Position | Constituent | Year of birth |
Date first appointed |
Duration of appointment |
List | Exec utive |
Non executive |
Indepen dent under the Code |
Indep.under the Consol. Finance Act (TUF) |
* | No. of other positions held** |
*** | * | *** | * | |
| Chairman | Michele Perini | 1952 27.10.2003 | a | b | X | 18/19 | 1 | |||||||||
| Chief Executive Officer | Enrico Pazzali | 1964 16.04.2009 | a | b | X | 19/19 | / | |||||||||
| Deputy Vice Chairman | Attilio Fontana | 1952 16.04.2009 | a/e | b | X | X | X | 17/19 | / | X | 3/3 | |||||
| Vice Chairman | Renato Borghi | 1948 29.10.2006 | a | b | X | X | X | 18/19 | / | X | 8/11 | |||||
| Director | Roberto Baitieri | 1966 16.04.2009 | a | b | X | X | X | 17/19 | / | X | 9/11 | |||||
| Director | Pier Andrea Chevallard | 1951 08.02.2010 | a | b | X | X | X | 17/19 | / | |||||||
| Director | Davide Croff | 1947 28.10.2012 | c/d | / | X | X | X | 16/19 | 2 | X | 11/11 | |||||
| Director | Giampietro Omati | 1940 16.04.2009 | a | b | X | X | 19/19 | 1 | X | 3/3 | ||||||
| Director | Romeo Robiglio | 1931 27.10.2003 | a | b | X | X | 17/19 | 1 | X | 3/3 | ||||||
| Board of Directors | Internal Control and Risk Committee |
Remuneration Committee |
||||||||||||||
| Number of meetings held in the financial year to 31 December 2014 | 19 | 11 | 3 | |||||||||||||
| NOTE | * This column shows the attendance rate of Directors at Board Meetings and at Committee meetings as a percentage of the total number of meetings (no. of times attended/ no.of meetings held during the period of appointment of each member). This column shows the number of other appointments held in listed companies, banks or insurance companies. * An "X" in this column indicates that the member of this committee is also a member of the Board of Directors. a Appointed by the Shareholders' Meeting of 27 April 2012 for a three-year period ending with the approval of the Financial Statements at 31 December 2014. |
|||||||||||||||
| b Appointed from the only list presented, which was that of the controlling shareholder Fondazione E. A. Fiera Internazionale di Milano. c Co-opted by the Board of Directors on 29 October 2012 to replace Mr Michele Motterlini who resigned. The appointment was subsequently ratified by the Shareholders' Meeting of |
23 April 2013 for the period ending with the approval of the Financial Statements at 31 December 2014.
d Chairman of the Internal Control and Risk Committee
e Chairman of the Remuneration Committee
| Position | Constituent | Year of birth | Date first appointed |
In office from/until |
List | Independent under the Code |
(%) * |
Number of other positions held** |
|---|---|---|---|---|---|---|---|---|
| Chairman | Stefano Mercorio | 1963 | 15/04/2010 | a/b | c | X | 14/14 | 23 |
| Statutory Auditor | Alfredo Mariotti | 1946 | 27/10/2003 | a | c | X | 14/14 | 24 |
| Statutory Auditor | Damiano Zazzeron | 1962 | 27/10/2003 | a/d | c | X | 12/14 | 13 |
| Substitute Auditor | Pietro Pensato | 1939 | 27/10/2006 | a | c | |||
| Substitute Auditor | Antonio Guastoni | 1951 | 15/04/2009 | a | c |
NOTE
* This column shows the attendance rate of the statutory auditors at the meetings of the Board of Statutory Auditors (no. of times present/ no. of meetings held during the period of appointment)
** This column shows the number of appointments as director or statutory auditor held, in accordance with Article 148 bis of the Consolidated Finance Act.
a Appointed by the Shareholders' Meeting of 27 April 2012 for a three-year period ending with the approval of the Financial Statements at 31 December 2014.
b Appointed as Chairman of the Board of Statutory Auditors by the Shareholders' Meeting of 27 April 2012.
c Appointed from the only list presented, which was that of the controlling shareholder Ente Autonomo Fiera Internazionale di Milano.
d Appointed as a Standing Statutory Auditor by the Shareholders' Meeting of 27 April 2012.
The ordinary meeting of shareholders of Fiera Milano SpA will be convened once in Rho (MI), in the Auditorium in the Centro Servizi of the exhibition site, Strada Statale del Sempione 28, (reserved parking is available with entry from Porta Sud), on 29 April 2015 at 14.30 hours.
(Report pursuant to Article 125-ter, paragraph 1, of Legislative Decree 24/02/1998, no. 58 and subsequent amendments)
The preliminary Financial Statements for the financial year ended 31 December 2014 that we submit for your attention show a net loss of Euro 30,674,121.31 which we propose should be covered as indicated below.
We also submit the Group Consolidated Financial Statements for the financial year to 31 December 2014 for your attention; although these are not subject to approval by the Shareholders' Meeting, they complement the information provided in the Financial Statements of Fiera Milano SpA.
Given the above, we submit for your approval the following
"The Shareholders' Meeting of Fiera Milano SpA, having considered the Board of Directors Management Report, the Report of the Board of Statutory Auditors and the Independent Auditors' Report, and having examined the Financial Statements for the year to 31 December 2014,
| Losses for the year | 30,674,121.31 |
|---|---|
| Covered by: | |
| - Legal reserve | 7,865,332.59 |
| - Share premium reserve | 1,783,076.48 |
| - Other reserves | 1,419,688.39 |
| Residual amount: | |
| - Losses carried forward | 19,606,023.85 |
b) Dear shareholders,
The Board of Directors wishes to inform you that the report prepared in accordance with Article 2446 of the Italian Civil Code and of Article 74 of the rules adopted with Consob resolution no. 11971 of 14 May 1999 and subsequent amendments and additions in accordance with attachment 3/A, diagram no. 5 of the aforementioned Rules (hereinafter, the "Report"), on the basis of the capital and economic situation of Fiera Milano SpA at 31 December 2014, represented by the Financial statement at 31 December 2014, with the remarks of the Board of Statutory Auditors as required by Article 2446 of the Italian Civil Code, will be made publicly available within the time prescribed by law, which is at least 21 days prior to the date of the same Shareholders' Meeting.
The Board of Directors, on the basis of the contents of the Report, will submit for your approval the resulting proposed resolution that will be illustrated with the same Report.
Dear shareholders,
The mandate of the current Board of Directors expires with the approval of the Financial Statements to 31 December 2014.
We thank you for the confidence you have placed in us and ask you to approve, under Article 2364, paragraph 1, point 2) of the Italian Civil Code the appointment of the new administrative body, having previously decided the duration of its mandate and the number of its members, in accordance with enacted law and current regulations and with the Company's Articles of Association, which are may be consulted on the Company website www.fieramilano.it in the section Investor Relations/Corporate Governance/Articles of Association.
We also ask you to appoint the Chairperson of the Board of Directors.
We would remind you that:
Directors must possess the necessary qualifications under enacted law;
Under Article 147-ter, paragraph 4 of Legislative Decree no. 58/1998, at least one of the members of the Board of Directors, or two if the Board of Directors is composed of more than seven members, must possess the same qualities of independence required for Statutory Auditors under Article 148, paragraph 3, of Legislative Decree no. 58/1998;
Furthermore, we would like to remind shareholders who intend to nominate persons to become Board Directors that:
ii. certification of the ownership of the shares held on the date the lists are deposited may be provided at a later date as long as it is within twenty-one days of the date set for the only convocation of the Shareholders' Meeting;
iii. a statement in which each candidate accepts, assuming full responsibility, the candidacy and declares that no reasons of ineligibility or incompatibility exist and that he/she meets the requisites under law to hold the office, including any requirements of professional probity under Article 148, paragraph 4, of Legislative Decree 58/98, reiterated in Article 147-quinquies of the same Legislative Decree 58/98, as well as any indications given by the same candidates regarding the requirements for independence as established for Statutory Auditors and as required by enacted law and by the Self-regulatory Code;
We also request that, under Article 2364, paragraph 1, point 3) of the Italian Civil Code, you decide the total annual remuneration to be paid to the Directors.
In the overriding interest of the Company, we request that you establish as nine the number of Board Directors, approve a new mandate for the Board of Directors that lasts for three financial years and, therefore, ends on the date of the Shareholders' Meeting convened to approve the Financial Statements for the 2017 financial year, and confirm the remuneration that is currently paid, which is as follows:
Given the above, we submit for your approval the following
"The Shareholders' Meeting of Fiera Milano SpA, having considered the proposed candidates for appointment to the Board of Directors deposited with the Company in accordance with enacted law,
With regard to the third item on the Agenda, we would point out that the mandate of the Board of Statutory Auditors also expires with the approval of the Financial Statements for the year ending 31 December 2014.
Therefore, we invite you, in accordance with Article 2364, paragraph 1, point 2) of the Italian Civil Code and in accordance with Article 20.1 of the Company's Articles of Association, to appoint three Statutory Auditors and two Supplementary Statutory Auditors and the Chairperson of the Board of Statutory Auditors for a period of three years that will end with the approval of the Financial Statements at 31 December 2017 and to deliberate their respective annual remuneration.
We would remind you that:
We would also point out to shareholders who intend to nominate persons to the Board of
Statutory Auditors that:
Lastly, it should be noted that, under Article 144-sexies, paragraph 5 of the Listing Rules, should only one list of candidates for the Board of Statutory Auditors have been presented at the end of the twenty-fifth day preceding the Shareholders' Meeting or only lists that have been presented by shareholders who, under Article144-sexies, paragraph 4 of the Listing Rules, are considered to be connected under Article 144-quinquies of the Listing Rules, then lists may be presented up to the third day following that date and the shareholding in the Company share capital required to present lists is halved (to 1.25% of the share capital).
Given the above, we invite you to appoint the Board of Statutory Auditors, composed of three Statutory Auditors, including the Chairperson, and two Supplementary Statutory Auditors for the financial years 2015-2017 and, therefore, until the approval of the Financial Statements to 31 December 2017, and to decide their relative remuneration. In the overriding interests of the Company, we invite you to confirm the remuneration that is currently payable, which is as follows:
i. an annual fixed remuneration of Euro 37,500 (thirty-seven thousand five hundred) for the Chairperson of the Board of Statutory Auditors;
Board of Directors' Management Report 128
Given the above, we submit for your approval the following
"The Shareholders' Meeting of Fiera Milano SpA, having considered the proposed candidates for appointment to the Board of Statutory Auditors deposited at the Company in accordance with enacted law,
Dear shareholders,
On 13 March 2015, the Board of Directors, in accordance with enacted law, approved the Report on Remuneration pursuant to Article 123–ter of Legislative Decree 58/98 (hereinafter also the "Report"), which was made publicly available on 20 March 2015.
In particular, the Directors would like to submit for your consideration Section One of the aforementioned Report, which defines the principles and guidelines to which the Board of Directors must adhere when setting the remuneration payable to members of the Board of Directors and, in particular, Directors with specific responsibilities, members of the Committees and the Executives with Group Strategic Responsibilities.
The Remuneration Policy (hereinafter also the "Policy") is the result of a clear and transparent process in which the Company Board of Directors and the Remuneration Committee play central roles.
The Board of Directors of Fiera Milano SpA, on the proposal of the Remuneration Committee, has adopted the Policy that was prepared also following the recommendations of Article 6 of the Self-regulatory Code, as most recently modified in July 2014.
Specifically, the Remuneration Policy of Fiera Milano SpA aims to:
For details of the Report on Remuneration and, in particular, Section One that we submit for your consideration, please refer to the document which is available on the Company website www.fieramilano.it in the section Investor Relations/Corporate Governance/Shareholders' Meetings.
Given the above, we submit for your approval the following
"The Shareholders' Meeting of Fiera Milano SpA, having considered the Report on Remuneration pursuant to Article 123-ter of Legislative Decree 58/98 and, in particular, Section One of the Report,
the Report on Remuneration pursuant to Article 123–ter of Legislative Decree 58/98 and, in particular, Section One of the Report".
Rho (Milan), 20 March 2015
For the Board of Directors The Chairman Michele Perini
____________________________________________________________________
| Consolidated Statement of Financial Position | 31/12/14 | 31/12/13 restated * |
|
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| 4 | Property, plant and equipment | 18,427 | 18,549 |
| 5 | Leased property, plant & equipment | 11 | 10 |
| Investments in non-core property | - | ||
| 6 | Goodwill and intangible assets with an indefinite useful life | 109,474 | 109,930 |
| 7 | Intangible assets with a finite useful life | 41,584 | 49,222 |
| 8 | Equity accounted investments | 15,462 | 15,368 |
| 9 | Other investments | 40 | |
| Other financial assets | - | ||
| 10 | Trade and other receivables | 13,275 | 14,228 |
| 48 | |||
| of which from related parties | 12,389 | 12,784 | |
| 11 | Deferred tax assets | 6,457 | 2,055 |
| Total | 204,730 | 209,402 | |
| Current assets | |||
| 12 | Trade and other receivables | 50,604 | 53,546 |
| 48 | of which from related parties | 6,795 | 2,390 |
| 13 | Inventories | 5,028 | 4,006 |
| Contracts in progress | - | ||
| 14 | Current financial assets | - | 635 |
| 15 | Cash and cash equivalents | 12,276 | 11,416 |
| Total | 67,908 | 69,603 | |
| Assets held for sale | |||
| Assets held for sale | - | ||
| Total assets | 272,638 | 279,005 | |
| EQUITY AND LIABILITIES | |||
| 16 | Equity | ||
| Share capital | 41,521 | 41,521 | |
| Share premium reserve | 909 | 13,573 | |
| Revaluation reserve | - | ||
| Other reserves | 3,387 | 1,475 | |
| Retained earnings | (9,828) | (5,421) | |
| Profit/(loss) for the year | (18,955) | (16,498) | |
| Total Group equity | 17,034 | 34,650 | |
| Equity attributable to non-controlling interests | 2,654 | ||
| Total equity | 19,688 | ||
| Non-current liabilities | |||
| Bonds in issue | - | ||
| 17 | Bank borrowings | 26,898 | |
| 18 | Other financial liabilities | 2,001 | |
| 48 | of which to related parties | 1,781 | |
| 19 | Provision for risks and charges | 1,752 | |
| 20 | Employee benefit provisions | 10,286 | |
| 21 | Deferred tax liabilities | 7,147 | |
| 22-48 | Other non-current liabilities | 55 | |
| Total | 48,139 | ||
| Current liabilities | |||
| Bonds in issue | - | ||
| 23 | Bank borrowings | 82,894 | |
| 24 | Trade payables | 36,160 | |
| 25-48 | Pre-payments | 39,641 | |
| 26 | Other current financial liabilities | 22,150 | |
| 48 | of which to related parties | 21,983 | |
| 27 | Current provision for risks and charges | 1,326 | |
| 28 | Current tax liabilities | 2,091 | |
| 29 | Other current liabilities | 20,549 | |
| 48 | of which to related parties | 4,128 | |
| 2,812 37,462 34,408 3,491 2,538 2,583 9,202 7,949 1,195 58,828 55,405 43,830 37,047 20,572 20,410 2,044 2,045 21,772 2,697 |
|||
| Total | 204,811 | 182,715 | |
| Liabilities held for sale Liabilities held for sale |
- |
| notes | Consolidated Statement of Comprehensive Income | 2014 | 2013 restated * |
|---|---|---|---|
| 33-48 | Revenues from sales and services | 245,457 | 245,057 |
| Total revenues | 245,457 | 245,057 | |
| 34 | Cost of materials | 2,440 | 3,662 |
| 35 | Cost of services | 137,400 | 128,220 |
| 48 | |||
| of which with related parties | 1,838 | 2,493 | |
| 36 | Cost of use of third-party assets | 57,875 | 63,062 |
| 48 | of which with related parties | 52,363 | 57,791 |
| 37 | Personnel expenses | 49,276 | 47,587 |
| 38 | Other operating expenses | 6,783 | 7,631 |
| 48 | of which with related parties | 1,064 | 985 |
| Total operating expenses | 253,774 | 250,162 | |
| 39 | Other income | 3,531 | 5,088 |
| 48 | of which with related parties | 307 | 1,547 |
| 40 | Results of equity accounted associates and joint ventures | 1,448 | 2,172 |
| Gross operating result | (3,338) | 2,155 | |
| 41 | Depreciation of property, plant and equipment | 6,814 | 7,484 |
| Depreciation of property investments | - | ||
| 41 | Amortisation of intangible assets | 6,643 | 6,661 |
| 42 | Adjustments to asset values | 3,637 | 6,591 |
| 43 | Write down of doubtful receivables and other provisions | (1,639) | (1,494) |
| Net operating result (EBIT) | (18,793) | (17,087) | |
| 44-48 | Financial income and similar | 958 | 1,125 |
| 45 | Financial expenses and similar | 5,857 | 4,970 |
| 48 | of which with related parties | 1,183 | 980 |
| Valuation of financial assets | - | ||
| Profit/(loss) before tax | (23,692) | (20,932) | |
| 46 | Income tax | (4,586) | (4,307) |
| Profit/(loss) from continuing operations | (19,106) | (16,625) | |
| Profit/(loss) from assets held for sale | - | ||
| Profit/(loss) for the year | (19,106) | (16,625) | |
| Profit/(loss) attributable to: | |||
| The shareholders of the controlling entity | (18,955) | (16,498) | |
| Non-controlling interests | (151) | (127) | |
| Other comprehensive income/(loss) that will not be reclassified subsequently to profit or loss |
|||
| Revaluation of defined benefit schemes | (544) | (110) | |
| 150 | |||
| Tax effects Other comprehensive income/(loss) that will be reclassified subsequently to profit or loss |
|||
| Currency translation differences of foreign subsidiaries | 840 | (3,441) | |
| Other comprehensive income/(loss) net of related tax effects | 446 | (3,569) | |
| Total comprehensive income/(loss) for the year | (18,660) | (20,194) | |
| Total comprehensive income/(loss) for the year attributable to: |
|||
| The shareholders of the controlling entity | (18,612) | (19,404) | |
| Non-controlling interests | (48) | (790) | |
| Basic | (0.4565) | (0.3973) |
| notes | Consolidated Statement of Cash Flows | 2014 | 2013 restated * |
|---|---|---|---|
| Net cash at beginning of the year | 11,416 | 13,016 | |
| Cash flow from operating activities | |||
| 15 48 |
Net cash from operating activities of which from related parties |
(6,855) (58,775) |
4,900 (59,243) |
| Interest paid Interest received Income taxes paid |
(3,144) 407 (269) |
(3,145) 67 (396) |
|
| Total Cash flow from investment activities |
(9,861) | 1,426 | |
| 4 4 5-7 8-40 |
Investments in tangible assets Write-downs of tangible assets Investments in intangible assets Investments in subsidiaries |
(6,745) 47 (2,175) (1,954) |
(1,921) 40 233 (9,015) |
| 8-40 | Investments in joint ventures Total |
1,705 (9,122) |
980 (9,683) |
| Cash flow from financing activities | |||
| 16 17-18 14-23-26 48 16 |
Equity Non-current financial assets/liabilities Current financial assets/liabilities of which from related parties Dividends paid Total |
(213) (9,400) 28,965 816 (76) 19,276 |
(298) 6,260 4,343 21,641 (264) 10,041 |
| Cash flow for the period | 293 | 1,784 | |
| 16 | Translation differences of cash and cash equivalents | 567 | (3,384) |
| Net cash of discontinued operations | - | - | |
| Net cash at the end of the period | 12,276 | 11,416 |
* Some figures in the Consolidated Financial Statements at 31 December 2013 have been restated for comparative purposes following the introduction of IFRS 11 applicable from 1 January 2014, as shown in Note 2.
| (€ '000) | ||
|---|---|---|
| Cash generated from operating activities | 2014 | 2013 restated * |
| Result including non-operating activities | (19,106) | (16,625) |
| Adjustments for: | ||
| Results of equity accounted investments | (1,448) | (2,172) |
| Depreciation and Amortisation | 13,457 | 14,145 |
| Provisions, write-downs and impairment | 2,188 | 5,710 |
| Capital gains/(losses) | (6) | (7) |
| Net financial income/(expenses) | 5,010 | 3,775 |
| Net change in employee provisions | 690 | 367 |
| Changes in deferred taxes | (5,204) | (6,495) |
| Inventories | (1,022) | 16 |
| Trade and other receivables | 3,895 | (2,287) |
| Trade payables | (8,595) | 2,413 |
| Pre-payments | 2,594 | 5,017 |
| Tax payables | 315 | (903) |
| Provisions for risks and charges and other liabilities (excluding payables to Organisers) | 1,920 | (652) |
| Payables to Organisers | (1,543) | 2,548 |
| Net effect of assets held for sale | - | 50 |
| Total | (6,855) | 4,900 |
* Some figures in the Consolidated Financial Statements at 31 December 2013 have been restated for comparative purposes following the introduction of IFRS 11 applicable from 1 January 2014, as shown in Note 2.
| Consolidated Statement of Changes in Equity | (€'000) | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| note 16 | Share capital |
Share premium reserve |
Legal reserve |
Other reserves |
Retained earnings |
Profit/(loss) for the period |
Total Group | Capital and reserves attributable to non controlling interests |
Profit/(loss) for the financial year attributable to non controlling interests |
Total non controlling interests |
Total equity |
| Balance at 31 December 2012 | 41,593 | 13,797 | 7,865 (1,960) | (3,269) | (2,024) | 56,002 | 3,780 | 88 | 3,868 | 59,870 | |
| Effect of retrospective application of IAS 19R | - - | - | - | (33) | 33 | - | - | - | - | - | |
| Restated balance at 1st January 2013 | 41,593 | 13,797 | 7,865 (1,960) | (3,302) | (1,991) | 56,002 | 3,780 | 88 | 3,868 | 59,870 | |
| Allocation of earnings at 31.12.12: legal reserve dividend distribution Treasury shares Put option on Worldex Ltd shares Acquisition of 75% Worldex Ltd Remeasurement of defined benefit plans Total comprehensive income for the financial year |
- (72) - - - |
- - - - - (224) - - - - - |
- - - - - - - - |
- - - - (1,652) - - (2,778) |
(1,991) - - - - - (128) - |
1,991 - - - - - - (16,498) |
- - - (296) (1,652) - (128) (19,276) |
88 - (264) - - (2) - (663) |
(88) - - - - - - (127) |
- - (264) - - -2 - (790) |
- - (264) (296) (1,652) (2) (128) (20,066) |
| Balance at 31 December 2013 | 41,521 | 13,573 | 7,865 (6,390) | (5,421) | (16,498) | 34,650 | 2,939 | (127) | 2,812 | 37,462 | |
| Allocation of earnings at 31.12.13: legal reserve dividend distribution Share capital increases Put option on Fiera Milano Africa Acquisition of 10% of Fiera Milano Africa Remeasurement of defined benefit plans Total comprehensive income for the financial year |
- - - - - |
- (12,664) - - - - - - - - - |
- - - - - - - - |
- - - - 1,175 - - 737 |
(16,498) 12,664 - - - (179) (394) - |
16,498 - - - - - - (18,955) |
- - - - 1,175 (179) (394) (18,218) |
(127) - (76) 282 - (316) - 103 |
127 - - - - - - (151) |
- - (76) 282 - (316) - (48) |
- - (76) 282 1,175 (495) (394) (18,266) |
| Balance at 31 December 2014 | 41,521 | 909 | 7,865 (4,478) | (9,828) | (18,955) | 17,034 | 2,805 | (151) | 2,654 | 19,688 |
On 20 March 2015, the Board of Directors approved the Fiera Milano Group Consolidated Financial Statements at 31 December 2014 and authorised their publication.
The Fiera Milano Group is active in all the characteristic areas of the exhibition and congress industry and is one of the largest integrated exhibition companies worldwide.
The Group business consists of hosting exhibitions, fairs and other events, promoting and making available equipped exhibition spaces, as well as offering support for projects and related services. This includes the business of staging exhibitions (including final services to exhibitors and visitors).
The business of the Group has dual seasonality: (i) a higher concentration of exhibitions in the six months from January to June; (ii) exhibitions that have a multiannual frequency.
Greater detail on Group structure is given in the relevant section of the Directors' Management Report on Operations.
The Consolidated Financial Statements were prepared in accordance with IAS and IFRS accounting standards in force at 31 December 2014, issued by the International Accounting Standards Board (IASB) and endorsed by the European Union, and the relative interpretative documents and provisions of Article 9 of Legislative Decree no. 38/2005.
The accounting standards used to prepare the present Financial Statements are the same as those used to prepare the Financial Statements at 31 December 2013, except for those applicable from 1 January 2014 which are given below.
The Financial Statements are prepared in Euro and all figures are rounded to the nearest thousand of Euro unless indicated otherwise. The Financial Statements give comparative data for the previous financial year; it should be noted that some numbers from the previous financial year have been restated to make the numbers more comparable.
In the 2014 financial year no atypical and/or unusual transactions took place.
The present Financial Statements have been prepared on the principle of going concern as fully described in the section on Business outlook and assessment of the Company as a going concern".
The risks and uncertainties affecting the Group business are described in the Board of Directors' Management Report in the section on "Risk factors affecting Fiera Milano Group", in Note 31 "Financial and market risck management" and Note 1.5 "Use of estimates" of the Notes to the Consolidated Financial Statements.
The present Financial Statements are externally audited by the audit firm Reconta Ernst & Young SpA.
The Group has adopted for the first time some accounting standards and amendments that are applicable to financial periods beginning on or after 1 January 2014.
The content and impact of each new accounting standard and amendment is given below:
IFRS 10 introduces a single control model applicable to all types of entities including special purpose entities. IFRS 10 replaces part of IAS 27 - Consolidated and Separate Financial Statements governing consolidation accounting and SIC 12 Consolidation – Special Purpose Entities. IFRS 10 alters the control definition and establishes that an investor controls an investee when it is exposed, or has rights to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Control exists when an investor has all three of the following: (a) power over the investee; (b) exposure or rights to variable returns from its involvement in the investee; and (c) the ability to use its power over the investee to affect the amount of the investor's returns. IFRS 10 has had no impact on the consolidation of investments held by the Group.
IFRS 11 replaces IAS 31 - Interests in joint ventures and SIC-13 Jointly Controlled Entities – Nonmonetary Contributions by Venturers and eliminates the option of accounting for a joint arrangement using proportionate consolidation. Joint arrangements classified as joint ventures must be accounted for using the equity method.
Application of this standard had an impact on the Group accounts as the joint venture Hannover Milano Global Germany GmbH is no longer accounted using proportionate consolidation but is accounted using the equity method. Greater detail on the impact of the application of IFRS 11 is given in Note 2 which quantifies the effect on the Financial Statements.
IFRS 12 gives the disclosure requirements for subsidiaries, joint arrangements, associates and structured entities. The relevant information has been grouped together and is given in Note 2.
The amendments provide an exception to the consolidation requirements for entities that qualify as investment entities under IFRS 10 – Consolidated Financial Statements. This exception requires investment entities to measure particular subsidiaries at fair value through profit or loss. These amendments had no impact on the Group as no Group entity qualified as an investment entity under IFRS 10.
The amendments provide additional transition relief in IFRS 10, IFRS 11 and IFRS 12 by limiting the requirement to provide adjusted comparative information to only the preceding comparative period.li
These amendments clarify the meaning of "currently has a legally enforceable right to set-off" and also clarifies the offsetting criteria to settlement systems (such as central clearing house systems), which apply gross settlement mechanisms that are not simultaneous. The amendments had no impact on the financial statements of the Group.
Under the amendments there is no need to discontinue hedge accounting if a hedging derivative was novated provided certain criteria are met. The amendments had no impact on the financial statements of the Group since it holds no derivatives.
These amendments remove the unintended consequence introduced with IFRS 13 to the disclosure requirements of IAS 36. The amendments restrict the requirement to disclose the recoverable amount of an asset or cash-generating units to periods in which an impairment loss has been recognised or reverses. These amendments had no significant impact on the financial statements of the Group.
The accounting standards endorsed by the European Union during 2014 but not yet applicable and not adopted early by the Group are given below:
IFRIC 21 identifies the obligating event for the recognition of a liability as the activity that triggers the payment of the levy in accordance with the relevant legislation. When an obligation is triggered on reaching a minimum threshold, the liability is recognised when that minimum threshold is reached. Retrospective application is required for IFRIC 21. IFRIC 21 is effective for annual periods beginning on or after 17 June 2014.
The amendment relates to the accounting for employee or third-party contributions to a defined benefit plan.
The following accounting standards have been issued by the IASB but have not yet been endorsed by the European Union:
IFRS 15 replaces IAS 18 – Revenue, IAS 11 - Construction contracts, interpretations SIC 31, IFRIC 13 and IFRIC 15. Application of IFRS 15 is mandatory for annual reporting periods beginning on or after 1 January 2017; early application is permitted. The time lapse between the publication of this accounting standard and its mandatory application, slightly more than two and a half years, is to give entities the necessary time to make the changes required to accounting systems for application of the new international accounting standard as it changes the model for the recognition and measurement of revenues.
With regard to the format and content of the Consolidated Financial Statements, the Group has made the following choices:
Liabilities, and Equity. Assets and liabilities are also classified as current, non-current, and held for sale;
The present Consolidated Financial Statements include the Parent Company Fiera Milano SpA and its subsidiary companies, as well as companies under joint control.
The Consolidated Financial Statements are based on financial statements as at 31 December 2014 approved by the Boards of Directors of the companies included in the area of consolidation and prepared according to Group accounting policies and IAS/IFRS.
The list of companies included in the area of consolidation at 31 December 2014 is given in Attachment 1 to this document.
Regarding the area of consolidation and transactions on shareholdings, it should be noted that on 28 August 2014 the Group acquired 10% of the share capital of Fiera Milano Exhibitions Africa Pty Ltd for Euro 0.496 million. Following the transaction, Fiera Milano through the Parent Company holds 85% of the share capital of the South African subsidiary.
Following application of IFRS 11 the shareholding in Hannover Milano Global Germany GmbH, which previously had been consolidated using the proportional method, is now accounted for using the equity method. The figures for the 2013 financial year were restated following retrospective application of the new accounting standard, as detailed in Note 2.
Subsidiaries are consolidated from the date when control is 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 at the acquisition date, against the assumption of the liabilities and assets shown in the respective financial statements of the subsidiaries on a line-by-line basis. Acquisitions of subsidiaries are recognised using the purchase method, as required by IFRS 3 revised in 2008 (see the section on Business Combinations).
The non-controlling interests in the capital and reserves of subsidiaries are recognised in equity under non-controlling interests. Similarly, the portion of the Consolidated Income Statement pertaining to non-controlling interests is shown in profit or loss attributable to non-controlling interests.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. The Group recognises its interest in a joint venture as an investment and must account for it using the equity method under IAS 28 - Investments in associates and joint ventures.
In the transition from proportionate consolidation to the equity method the interest in the joint venture must be shown at the start of the period presented. Initial recognition as an investment must aggregate the carrying amounts of the assets and liabilities that the entity had previously proportionately consolidated, including any goodwill arising on acquisition. If the goodwill previously belonged to a larger cash generating unit, or group of cash generating units, the entity must allocate goodwill to the joint venture according to the carrying values of the joint venture in the cash generating unit, or group of cash generating units, to which it belongs.
Profits and losses not yet realised that stem from transactions between consolidated companies are eliminated, as are all payables and receivables, costs and revenues and unrealised gains and losses and all other transactions between consolidated companies.
At the year-end, the assets and liabilities of consolidated companies with an accounting currency that is not the Euro are translated into the presentation currency of the Group's consolidated accounts at the exchange rate in force on that date. Income Statement items are translated at the average exchange rate for the year and differences arising from the adjustment of opening equity to year-end exchange rates, as well as the differences stemming from the different methodology used for the translation of the results for the financial year, are shown in the other items of the Statement of Comprehensive Income and aggregated in a specific equity reserve.
| average 2014 average 2013 | 31/12/2014 | 31/12/2013 | ||
|---|---|---|---|---|
| US Dollar | 1.3285 | 1.3281 | 1.2141 | 1.3791 |
| Turkish Lira | 2.9065 | 2.5335 | 2.832 | 2.9605 |
| South African rand | 14.4037 | 12.833 | 14.0353 | 14.566 |
| Brazilian reals | 3.1211 | 2.8687 | 3.2207 | 3.2576 |
| Russian rouble | 50.9518 | 42.337 | 72.337 | 45.3246 |
| Indian rupee | 81.0406 | 77.93 | 76.719 | 85.366 |
| Yuan renminbi | 8.1857 | 8.1646 | 7.5358 | 8.3491 |
The exchange rates used for the translation into Euro of the 2014 and 2013 financial statements of foreign companies were the following:
Source: Banca d'Italia
Business combinations are accounted for by applying the purchase method in accordance with IFRS 3 revised in 2008. Under this method the transaction cost of a business combination is valued at fair value, determined as the aggregate of the fair value of the assets transferred and the liabilities assumed by the Group at the acquisition date and equity instruments issued for control of the acquired entity. All other costs associated with the transaction are expensed in the Statement of Comprehensive Income at their acquisition date value.
Contingent considerations, considered part of the acquisition consideration, must be measured at fair value at the time of the business combination. Subsequent changes to the fair value are recognised in the Statement of Comprehensive Income.
The identifiable assets acquired and the liabilities assumed are measured at fair value at the acquisition date.
Goodwill is measured as the difference between the aggregate of the acquisition-date fair value of the consideration transferred for the business combination, the amount of any non-controlling interest and the acquisition date fair value of any previously held equity interest in the acquiree and the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If the difference between the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed exceeds the consideration transferred for the business combination, the amount of any non-controlling interest and the acquisition-date fair value of any previously held equity interest in the acquiree, the excess sum is immediately recognised in the Statement of Comprehensive Income as income from the transaction.
The non-controlling interest in equity at the acquisition date may be valued at fair value or the noncontrolling interest's proportionate share of the identifiable net assets of the acquiree. The measurement method is carried out transaction by transaction.
In measuring the fair value of business combinations, the Fiera Milano Group uses available information and, for more material business combinations, also uses the support of external valuations.
Business combinations transacted prior to 1 January 2010 are recognised using the previous version of IFRS 3.
When a business combination is achieved in stages (step acquisition), the previously held share of the entity's assets and liabilities are measured at fair value at the date that control is obtained and any resulting adjustments are recognised in profit or loss. Previously held investments are therefore recognised as though they had been sold and reacquired at the date that control is obtained.
The concession of put options to non-controlling shareholders gives the latter the right to request that the Group redeem the shares they hold at a future date. IAS 32, paragraph 23, establishes that a contractual right to receive cash or another financial asset from the entity constitutes a financial liability for the actual value of the exercise price of the put. Therefore, where the entity does not have the unconditional right to avoid delivering cash or another financial instrument when the put option on shares of the subsidiaries is exercised, it must recognise the financial liability. The financial liability is initially recognised at fair value corresponding to the current value of the amount to be reimbursed based on the best information available and changes in the fair value between one financial period and another are recognised in profit or loss under financial income/ expenses.
This liability is recognised in non-controlling interests or in Group equity depending on whether the risks or benefits associated with ownership of the shares underlying the options have been transferred.
Partial disposal of an investment where control is retained is accounted for as an equity transaction. For acquisitions of additional investments in a subsidiary any gain or loss between the acquisition consideration and the related share of equity is accounted for as an equity transaction with owners as is the partial disposal of an investment in a subsidiary where control is retained.
In cases where the partial disposal of an investment in a subsidiary results in loss of control, the residual holding is remeasured at fair value and any difference between fair value and the carrying amount is a gain or a loss and is recognised in profit or loss.
Property, plant and equipment are recognised at purchase or production cost, including contingent costs and costs incurred, and adjusted for accumulated depreciation.
Tangible assets are depreciated in each accounting period on a straight-line basis, using economic/technical rates determined by the residual life of the assets.
Routine maintenance costs are charged to the Income Statement when they are incurred.
The replacement costs of identifiable components of complex assets are allocated to the assets and depreciated over their useful lives. The residual carrying amount of the component being replaced is charged to the Income Statement.
Leasehold improvements are classified in property, plant and equipment based on the nature of the cost incurred; the depreciation period corresponds to the lesser of the residual useful life of the tangible asset and the residual period of the rental contract.
The depreciation rates applied are listed below:
| - | Office furniture and machinery | 12.0% |
|---|---|---|
| - | Exhibition furniture and equipment | 27.0% |
| - | Catering equipment | 25.0% |
| - | Metal components to be hired out | 13.5% |
| - | Sundry machinery and equipment | 15.0% |
| - | Motor vehicles | 25.0% |
| - | Site motor vehicles | 20.0% |
| - | Electronic equipment | 20.0% |
| - | Plant and machinery | 10.0% |
| - | Telecommunication systems | 20.0% |
| - | Alarm systems | 30.0% |
| - | Furnishings | 12.0% |
If there is any indication of impairment, the tangible assets are subjected to an impairment test as described in the section on impairment of assets.
An intangible asset is recognised only if it is identifiable, is controlled by the entity, is expected to generate future economic benefits, and if its cost can be measured reliably.
Goodwill arising from business combinations is initially recognised at the cost on the acquisition date, as indicated in the paragraph above on Business Combinations, and, for purposes of the impairment test, allocated to a cash-generating unit or group of cash-generating units which benefit from the synergies generated by the acquisition that gave rise to the goodwill. After initial recognition in accounts, goodwill is measured at cost less any impairment stemming from the impairment tests (see the section on the impairment of assets). An intangible asset is considered to have an indefinite useful life when no limit can be foreseen to the period during which the asset can generate financial inflows for the Group. Intangible assets with an indefinite useful life, such as goodwill, are not subject to amortisation.
Intangible assets with a finite life are measured at purchase or production cost, including any contingent costs, and systematically amortised on a straight-line basis over their estimated useful life. If there is any indication of impairment, the intangible assets are subject to an impairment test as described in the section on the impairment of assets.
Since the last quarter of 2008, trademarks of exhibitions (i.e. exhibitor lists, visitor lists, and the actual trademark of the exhibition) and of publishing titles have been reclassified from goodwill with an indefinite life to intangible assets with a finite life. The initial choice was based on the consideration that the businesses underlying these assets, that is to say, exhibitions and specialist publications, do not lend themselves to a precise evaluation of their duration. In essence, at the time of the initial choice, 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 emerged such as to set a foreseeable limit on the period during which the asset is expected to generate net cash inflows.
However, general trends in national and international markets, together with the internal competitive dynamics of the reference sectors for exhibitions and specialist publications, led to a reconsideration of the initial assumptions. After comparing the practices of the main Italian and foreign competitors, it was concluded that an estimated finite useful life of 20 years was appropriate in most cases, both for exhibitions and for publications.
Where the estimate of the reference time horizon for certain intangible assets was shown to be more uncertain, the useful life was set at 10 years.
The amortisation rates applied are given below:
| - | Exhibition trademarks | 5% or 10% |
|---|---|---|
| - | Other trademarks and publications | 5% or 10% |
Industrial patents, intellectual property rights, licences and concession agreements are amortised over three to ten years from the year they were acquired.
Research costs are recognised at the time they are incurred. In compliance with IAS 38, development costs relating to specific projects, including the launch of new exhibitions, are capitalised when it is probable that the project will be completed and generate future economic benefits and when such costs can be reliably measured. Their cost is amortised from the point when the asset is ready for use on a straight line basis over its useful life. The carrying value of costs is reviewed annually at the end of the reporting period or more often if there are any particular reasons for doing so to analyse the fair value and ascertain the existence of any impairment.
Goodwill and other intangible assets with an indefinite life are tested for impairment at least annually at the end of the reporting period, or more often if there are any indications that an asset has been impaired.
Tangible and intangible assets with a definite useful life that are depreciated or amortised are tested for impairment only when there is an indication of impairment.
The recoverable amount of the asset is assessed by comparing the carrying value with the higher of the net selling price of the asset and its value in use. The 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 segment. The value in use is the present value, discounted at the weighted average cost of capital of an entity with a similar risk profile and level of indebtedness, of the cash flows expected to arise from the asset (or from a group of assets – a cash generating unit) and from its sale at the end of its useful life.
If subsequently there is an indication that an impairment loss, other than goodwill, may have decreased or no longer exists, the carrying value of the asset is adjusted to the new estimate of the realisable value although this value may not exceed the value which would have been measured if there had been no impairment. Reversal of impairment is recognised in profit or loss.
There are two types of leases: finance leases and operating leases.
A lease is considered a finance lease when it transfers a significant and substantial part of the risks and rewards associated with the ownership of the asset to the lessee.
Given this, as determined by IAS 17 – Leases, a leasing contract is considered a finance lease when the following factors are individually or jointly present:
Assets available to Group companies under leasing contracts that can be considered finance leases are recognised as tangible or intangible assets at the lower of their value at the date acquired or the net current value of the minimum charges under the contract amortised over their estimated useful life; the corresponding liability to the lessor is recognised in equity as a current or noncurrent financial liability depending on whether the contract expires within or beyond twelve months.
Lease payments are subdivided into principal, which is taken against financial liabilities, and interest, which is recognised in profit or loss under financial expenses.
Charges for operating leases are recognised in profit or loss pro-rata temporis for the duration of the contract.
In accordance with the requirements of IAS 39 and 32, financial assets are classified under the following four categories:
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 the accounts, subsequently checking this classification at the end of each reporting period.
Financial assets are initially recognised at cost, which is equal to fair value plus contingent transaction costs. Subsequent measurement depends on the type of instrument concerned.
Financial assets at fair value shown in the Income Statement, 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 profit or loss. Gains and losses from any changes in the fair value are recognised in profit or loss.
Held-to-maturity investments are classified under current financial assets if they mature in less than 12 months and among non-current financial assets if maturity exceeds that period, and are subsequently valued at amortised cost. The latter is calculated using the effective interest rate method, taking into account any purchase discounts or premiums and spreading them over the entire period up to maturity, less any impairment.
Loans and receivables are valued at amortised cost using the effective interest method. At the end of each reporting period, the companies belonging to the Group measure the realisable value of these receivables taking account of estimated future cash payments or receipts through their expected life.
Available-for-sale financial assets are recognised as non-current assets, unless they are to be divested within twelve months of the end of the reporting period, and are measured at fair value. Losses or gains on available-for-sale financial assets are recognised in other comprehensive income and aggregated in a specific equity reserve, until they are sold, recovered or otherwise derecognised. When there is an indication of impairment in an available-for-sale financial asset and there is objective evidence of this, the cumulative gain or loss that was recognised in other comprehensive income is reclassified from equity to profit or loss for the period as a reclassification adjustment even if the financial asset has not been eliminated.
In compliance with the requirements of IAS 39 and IAS 32, investments in companies other than subsidiaries and associates are classified as available-for-sale (AFS) and are measured at fair value except for when fair value cannot be determined; in such cases, the cost method is used. Gains and losses stemming from adjustments of value are recognised in other comprehensive income in a specific equity reserve. When there is an indication of impairment in an AFS financial asset and there is objective evidence of this, the cumulative gain or loss that was recognised in other comprehensive income must be reclassified from equity to profit or loss for the period as a reclassification adjustment even if the financial assets has not been derecognised.
Investments in associates are valued using the equity method with a separate entry in the Statement of Comprehensive Income for the share of the Group in the results of the companies over which it exercises significant influence.
Inventories are valued at the lower of purchase or production cost, including contingent costs, calculated using the FIFO method, and the presumable net realisable value based on market trends. Group inventories consist mainly of suspended costs relating to activities in future accounting periods and consumables.
Cash and cash equivalents comprise cash on 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 Consolidated Statement of Cash Flows is the same as that of the Statement of Financial Position.
This category includes assets and liabilities (or assets and liabilities in a disposal group/discontinued operations) where the carrying value will be recovered primarily through a sale rather than through continued utilisation.
For this to happen, the following conditions must be met:
Assets held for sale are measured at the lower of 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:
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.
Under IAS/IFRS regarding the acquisition of treasury shares, the nominal value of the shares is deducted from share capital while the difference between the nominal value and the acquisition value is taken against the share premium reserve. Regarding the sale of treasury shares, the share capital and the share premium reserve are reconstituted by the same amounts that they were reduced when the shares were acquired while any profit/loss from the sale are recognised in equity, under other reserves, with no impact on profit or loss. The shares taken as the reference for the calculation of profit/loss on disposal are selected using the FIFO method.
Costs directly attributable to capital transactions are recognised as a direct reduction of equity.
Payables, advances and other liabilities are initially recognised at fair value. After that, they are measured at amortised cost. Payables are derecognised when underlying financial obligations have been discharged.
If they have a due date in excess of twelve months, liabilities 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. Discounted interest is classified in financial expenses.
A derivative or any other contract with the following characteristics is classified as a financial instrument and consequently fair-valued at the end of each accounting period: (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. The effects of fair-value measurement are recognised in profit or loss as financial income/expense.
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 probable. If expectations of resource outflow go beyond the next financial year, the obligation is recognised at its present value through 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 shown in the paragraph, disclosure on guarantees given, undertakings and other contingent liabilities, and no provisions are made for these.
Financial liabilities are initially recognised at cost as represented by the 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 using 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 paid out upon or after cessation of the employment relationship consist mainly of employee severance indemnities [trattamento di fine rapporto or TFR], which are governed by Article 2120 of the Italian Civil Code.
In compliance 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 related investments. As required by IAS 19 Revised, 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 in salary levels). The Fiera Milano Group recognises changes in actuarial gains/losses in other items of comprehensive income. From 1 January 2007, following social security reform, cumulative employee severance indemnities had to be allocated to pension funds or to the INPS treasury fund, or, in the case of companies with fewer than 50 employees, could remain within the company as in previous years. Employees were given the option until 30 June 2007 to choose the destination of their severance indemnities.
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 either to the pension fund or to INPS. The liability related to past severance indemnities continues to be a defined benefit plan to be measured using actuarial assumptions.
Termination benefits not included in the employee severance indemnities (TFR) are recognised as liabilities and employee expenses when the enterprise is demonstrably committed to terminate the employment of an employee or group of employees before the normal retirement date or provides termination benefits as a result of an offer made in order to encourage voluntary redundancy. The benefits owed to employees for termination of their employment do not give any future economic benefits to the enterprise and are therefore recognised immediately as a cost.
Revenue is 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 Group and the relevant amount can be reliably measured. Revenues are recognised at the fair value of the consideration received or receivable, taking into account any trade discounts and quantity-based reductions granted.
Revenue from the sale of goods is recognised when the entity has transferred a significant and substantial part of the risks and rewards associated with the ownership of the asset.
Revenues from the sale of services are recognised when the service is supplied. In compliance with the requirements of IAS 18 paragraph 25, revenues for the supply of services relating to exhibitions and congresses are recognised when the 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 the total costs of an exhibition will exceed its total revenues, the expected loss is recognised as a cost in a specific provision.
Costs are recognised when they relate to goods and services sold or used in the financial year or on an accrual accounting basis when their future usefulness cannot be precisely identified.
Personnel expenses include both the fixed and variable remuneration of Directors taking account of the effective period of service.
Costs that are not eligible to be recognised in assets are recognised in profit or loss in the period in which they are incurred.
This item has a residual nature and includes grants and subsidies.
Financial income and expenses are recognised in the accounts based on timing that considers the effective yield/expense of the asset/liability concerned.
For each company, income taxes are recognised according to estimated taxable income in compliance with current tax rates and regulations in the countries where the Group operates. Income taxes are recognised in profit or loss, except for those relating to items recognised outside profit or loss, in which case the tax effect is 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.
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 each reporting period.
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.
Current and deferred tax assets and liabilities are offset only when they are levied by the same taxing authority and when there is a legal right to settle on a net basis.
Further information on the tax consolidation may be found in Note 46.
Transactions in foreign currencies are recorded at the current exchange rate in force on the transaction date. Monetary assets and liabilities denominated in foreign currencies are converted at the exchange rate in force at the end of the reporting period. Foreign exchange differences generated by the extinction of monetary items or their translation at different exchange rates from those at which they were translated at the time of initial recognition in the period or in previous periods are recognised in profit or loss. Foreign exchange differences are recognised in financial expenses and income.
Dividend income is recognised when the shareholders' right to receive payment has been established. This is normally the date of the Annual General Shareholders' Meeting that approves the dividend distribution.
Basic earnings (losses) per share are calculated by dividing the Group profit or loss attributable to ordinary equity holders of the Parent Company by the weighted average number of ordinary shares outstanding in the period, excluding treasury shares.
Diluted earnings (losses) per share are calculated by adjusting the weighted average number of shares outstanding to allow for all dilutive potential ordinary shares.
Preparation of financial statements and related notes using IFRS requires estimates and assumptions to be made that affect the amounts of assets and liabilities in the Statement of Financial Position and disclosures concerning potential assets and liabilities at the end of the reporting period. Actual results may differ from these estimates. Estimates are used to recognise provisions for doubtful accounts, depreciation and amortisation, employee benefits, taxes, and other provisions and reserves, as well as any adjustments to asset value. Estimates and assumptions are reviewed regularly and the effects of any change are immediately recognised in profit or loss.
The most important estimates used to prepare the Financial Statements are given below as these involve a significant level of subjective opinion, assumptions and estimates:
Concerning the use of estimates of financial risk, reference should be made to the specific paragraph in the notes to the Financial Statements, whilst it should be noted that the valuation of the provision for risks refers to the best information available at the end of the reporting period.
The industrial plans used to carry out the impairment tests are based on certain expectations and assumptions for future performance that by their very nature are subject to uncertainties. Therefore, given the current macroeconomic scenario, the state of the exhibition sector and the outcome of the initiatives taken by the Group to stabilise the financial and net worth, the results could differ from the forecasts.
The plan will be continually assessed by the Directors regarding the effective realisation of the initiatives and forecasts and the effects on the financial and economic performance of the Group.
The Group has a 49% shareholding in Hannover Milano Global Germany GmbH, jointly controlled with Deutsche Messe AG. Under IAS 31 – Interests in joint ventures (before application of IFRS 11), the investment in Hannover Milano Global Germany GmbH was classified as a jointly controlled entity and the Group share of assets, liabilities, revenues and expenses were accounted using proportionate consolidation.
Following the application of IFRS 11 - Joint arrangements, the Group has classified its investment as a joint venture and therefore accounts for it using the equity method.
Under the joint venture agreement with Deutsche Messe AG, the Group share of equity is calculated on the results generated from the exhibitions; this share went from 46.174% in 2013 to 43.98% in 2014.
The share of the Group in the income and equity of the joint venture are summarised in the following tables:
| (€'000) | ||
|---|---|---|
| 2014 | 2013 | |
| Current assets | 18,241 | 19,092 |
| Non-current assets | 9,879 | 9,129 |
| Current liabilities | 10,001 | 10,211 |
| Non-current liabilities | - | - |
| Equity | 18,119 | 18,010 |
| Book value of the joint venture | 8,772 | 8,695 |
| (€'000) | ||
|---|---|---|
| 2014 | 2013 | |
| Total revenues | 28,992 | 28,997 |
| Total operating costs | (22,900) | (21,742) |
| Depreciation and amortisation, write downs, net financial (expenses)/income | (201) | 256 |
| Profit/(loss) before tax | 5,891 | 7,511 |
| Income tax | (2,581) | (2,812) |
| Profit/(loss) for the year | 3,310 | 4,699 |
| Profit/(loss) for the year attributable to the Group | 1,455 | 2,172 |
The figures from the 2013 Financial Statements have been restated following retrospective application of the new accounting standard. There is a reduction in the gross operating profit of Euro 1.178 million and of Euro 1.121 million in EBIT compared to the figures originally published. The impact was as follows:
| (€'000) | |
|---|---|
| Impact on Consolidated Statement of Comprehensive Income | 2013 |
| Decrease in revenues | (13,085) |
| Decrease in operating costs | 9,837 |
| Decrease in other income | (102) |
| Increase in share of operating results of equity accounted companies | 2,172 |
| Decrease in gross operating result | (1,178) |
| Decrease in depreciation and amortisation | 57 |
| Decrease in net operating result | (1,121) |
| Decrease in financial income/expenses | (177) |
| Decrease in pre-tax result | (1,298) |
| Decrease in income tax | 1,298 |
| Impact on result for the period | - |
| (€'000) | |
| Impact on Consolidated Statement of Financial Position | 31/12/13 |
| Decrease in plant and equipment (non-current) | (69) |
| Decrease in goodwill and intangible assets with an indefinite useful life (non-current) | (10,359) |
| Decrease in intangible assets with a finite useful life (non-current) | (719) |
| Increase in investments in joint ventures (non-current) | 15,368 |
| Decrease in inventories and trade receivables (current) | (925) |
| Increase in financial assets (current) | 311 |
| Decrease in cash and cash equivalents | (8,338) |
| Decrease in trade payables and pre-payments (current) | 3,363 |
| Decrease in tax payables and other liabilities (current) | 1,368 |
| Impact on equity | - |
| (€'000) | |
| Impact on Consolidated Statement of Cash Flows | 31/12/13 |
| Decrease in net cash at the beginning of the year | (6,384) |
| Decrease in cash flow from operating activities | (3,307) |
| Decrease in cash flow from investment activities | 1,451 |
| Increase in cash flow from financing activities | (323) |
| Change in translation differences | 225 |
| Net cash at the end of the period | (8,338) |
On 14 February 2014, the Parent Company Board of Directors approved the liquidation of Milan International Exhibitions Srl. On 3 March 2014, the extraordinary general meeting of Milan International Exhibitions approved the voluntary liquidation process.
The investment of 20% was consolidated using the equity method and this gave a Euro 0.016 million increase in the entry for equity accounted investments.
Summary financial information on subsidiaries, joint ventures and associates is given in Attachment 2 to the Financial Statements of the majority shareholder Fiera Milano SpA.
In accordance with IFRS 8, the identification of operating segments and related information is based on the data used by management to take its operating decisions and is consistent with the management and control model used. The internal accounting system, regularly reviewed and used by the top decision makers in the Group, gives information by segment and also by individual company.
The operating segments defined by the management criteria are as follows:
These activities are carried out by the Parent Company Fiera Milano SpA.
These activities are carried out by:
The tables below give Income Statement and Statement of Financial Position data by segment for
The figures for the 2013 financial year were restated following application of IFRS 11.
| Italian | Foreign | Stand-fitting | (€'000) | ||||
|---|---|---|---|---|---|---|---|
| Income Statement to 31/12/14 | exhibitions | exhibitions | services | Media Congresses | Adjustments Consolidated | ||
| Revenues from sales and services to third-parties | 176,338 | 18,307 | 3,619 | 10,053 | 37,140 | - | 245,457 |
| Revenues from intersegment sales and services | 4,760 | 479 | 29,770 | 2,281 | 695 | (37,985) | |
| Total revenues | 181,098 | 18,786 | 33,389 | 12,334 | 37,835 | (37,985) | 245,457 |
| of which from Italy | 227,150 | ||||||
| of which from foreign activities | 18,307 | ||||||
| Cost of materials | 818 | 84 | 1,172 | 264 | 104 | (2) | 2,440 |
| Cost of services | 107,928 | 14,420 | 25,325 | 6,208 | 24,257 | (40,738) | 137,400 |
| Cost for use of third-party assets | 51,898 | 598 | 1,757 | 365 | 3,959 | (702) | 57,875 |
| Personnel expenses | 34,990 | 3,502 | 3,711 | 5,321 | 3,571 | (1,819) | 49,276 |
| Other operating expenses | 4,757 | 1,029 | 461 | 276 | 345 | (85) | 6,783 |
| Total operating expenses | 200,391 | 19,633 | 32,426 | 12,434 | 32,236 | (43,346) | 253,774 |
| Other income | 6,406 | 480 | 932 | 515 | 446 | (5,248) | 3,531 |
| Profit/(loss) of equity accounted companies | (7) | 1,455 | 1,448 | ||||
| Gross operating result | (12,894) | 1,088 | 1,895 | 415 | 6,045 | 113 | (3,338) |
| of which from Italy | (4,131) | ||||||
| of which from foreign activities | 793 | ||||||
| Depreciation of property, plant & equipment | 2,665 | 68 | 1,868 | 46 | 2,167 | 6,814 | |
| Depreciation of property investments | |||||||
| Amortisation of intangible assets | 4,665 | 843 | 4 | 1,017 | 20 | 94 | 6,643 |
| Adjustments to asset values | 11 | 3,626 | 3,637 | ||||
| Allowance for doubtful accounts and other provisions | (1,912) | 295 | (353) | (154) | 485 | (1,639) | |
| Net operating result (EBIT) | (18,312) | (118) | 365 | (4,120) | 3,373 | 19 | (18,793) |
| of which from Italy | (18,269) | ||||||
| of which from foreign activities | (524) | ||||||
| Financial income and similar | 958 | ||||||
| Financial expenses and similar | 5,857 | ||||||
| Valuation of financial assets | |||||||
| Profit/(loss) before income tax | (23,692) | ||||||
| Income tax | (4,586) | ||||||
| Profit/(loss) from continuing operations Profit/(loss) from discontinued operations |
(19,106) - |
||||||
| Revenues | |||||||
| Operating expenses | |||||||
| Profit/(loss) for the year | (19,106) | ||||||
| Profit/(loss) attributable to non-controlling interests | (151) | ||||||
| Group profit/(loss) | (18,955) |
| Statement of Financial Position Data at 31/12/14 | (€'000) | |
|---|---|---|
| Depreciation of non | ||
| Investments | current assets |
| Italian exhibitions | 2,230 | 7,340 |
|---|---|---|
| Foreign exhibitions | 531 | 910 |
| Stand-fitting services | 1,438 | 1,873 |
| Media | 56 | 1,063 |
| Congresses | 4,260 | 2,187 |
| Adjustments | - | 84 |
| Total | 8,515 | 13,457 |
| (€'000) | |||||||
|---|---|---|---|---|---|---|---|
| Income Statement to 31/12/13 | Italian exhibitions |
Foreign exhibitions |
Stand-fitting services |
Media Congresses | Adjustments Consolidated | ||
| Revenues from sales and services to third-parties | 190,154 | 15,200 | 6,555 | 9,435 | 23,713 | - | 245,057 |
| Revenues from intersegment sales and services | 4,429 | 74 | 27,039 | 2,523 | 833 | (34,898) | |
| Total revenues | 194,583 | 15,274 | 33,594 | 11,958 | 24,546 | (34,898) | 245,057 |
| of which from Italy | 229,857 | ||||||
| of which from foreign activities | 15,200 | ||||||
| Cost of materials | 1,006 | 88 | 2,263 | 239 | 91 | (25) | 3,662 |
| Cost of services | 107,111 | 10,880 | 24,784 | 6,073 | 16,390 | (37,018) | 128,220 |
| Cost for use of third-party assets | 58,822 | 515 | 1,507 | 373 | 2,588 | (743) | 63,062 |
| Personnel expenses | 34,305 | 3,132 | 3,480 | 5,126 | 2,929 | (1,385) | 47,587 |
| Other operating expenses | 5,782 | 777 | 551 | 342 | 255 | (76) | 7,631 |
| Total operating expenses | 207,026 | 15,392 | 32,585 | 12,153 | 22,253 | (39,247) | 250,162 |
| Other income | 7,319 | 744 | 596 | 472 | 239 | (4,282) | 5,088 |
| Profit/(loss) of equity accounted companies | 2,172 | 2,172 | |||||
| Gross operating result | (5,124) | 2,798 | 1,605 | 277 | 2,532 | 67 | 2,155 |
| of which from Italy | (540) | ||||||
| of which from foreign activities | 2,695 | ||||||
| Depreciation of property, plant & equipment | 3,890 | 50 | 1,977 | 43 | 1,524 | 7,484 | |
| Depreciation of property investments | |||||||
| Amortisation of intangible assets | 4,320 | 922 | 51 | 1,347 | 13 | 8 | 6,661 |
| Adjustments to asset values | 22 | 6,569 | 6,591 | ||||
| Allowance for doubtful accounts and other provisions | (1,528) | 182 | (230) | (347) | 429 | (1,494) | |
| Net operating result (EBIT) | (11,806) | 1,644 | (215) | (7,335) | 566 | 59 | (17,087) |
| of which from Italy | (18,544) | ||||||
| of which from foreign activities | 1,457 | ||||||
| Financial income and similar | 1,125 | ||||||
| Financial expenses and similar | 4,970 | ||||||
| Valuation of financial assets | |||||||
| Profit/(loss) before income tax | (20,932) | ||||||
| Income tax | (4,307) | ||||||
| Profit/(loss) from continuing operations | (16,625) | ||||||
| Profit/(loss) from discontinued operations | - | ||||||
| Revenues | |||||||
| Operating expenses | |||||||
| Profit/(loss) for the year | (16,625) | ||||||
| Profit/(loss) attributable to non-controlling interests | (127) | ||||||
| Group profit/(loss) | (16,498) |
| Statement of Financial Position Data at 31/12/13 | (€'000) | |
|---|---|---|
| Investments | Depreciation of non | |
| * | current assets* | |
| Italian exhibitions | 6,959 | 8,209 |
| Foreign exhibitions | 7,636 | 972 |
| Stand-fitting services | 475 | 2,028 |
| Media | 31 | 1,391 |
| Congresses | 554 | 1,537 |
| Adjustments | - | 8 |
| Total | 15,655 | 14,145 |
* Some figures in the Consolidated Financial Statements at 31 December 2013 have been restated for comparative purposes following the introduction of IFRS 11 applicable from 1 January 2014, as shown in Note 2.
The breakdown and changes in the last two financial years were as follows:
| Property, plant and equipment | (€'000) | |||||||
|---|---|---|---|---|---|---|---|---|
| Balance at | Changes during the financial year | Balance at | ||||||
| 31/12/12 | Incr. | Decr. | Depr. | Impairment | Currency translation differences |
Change in area of consolidation |
31/12/13 | |
| Plant and machinery | ||||||||
| . historic cost . depreciation |
14,428 9,224 |
300 - |
54 43 |
- 1,420 |
- - |
- - |
- - |
14,674 10,601 |
| Net 5,204 |
300 | 11 | 1,420 | - | - | - | 4,073 | |
| Industrial and commercial equipment |
||||||||
| . historic cost | 33,629 | 601 | 505 | - | 212 | - | - | 33,513 |
| . depreciation | 27,011 | - | 501 | 2,116 | 190 | - | - | 28,436 |
| Net 6,618 |
601 | 4 | 2,116 | 22 | - | - | 5,077 | |
| Other assets | ||||||||
| . historic cost | 52,011 | 984 | 31 | - | - | (125) | 9 | 52,848 |
| . depreciation | 39,659 | - | 35 | 3,948 | - | (113) | - | 43,459 |
| Net 12,352 |
984 | (4) | 3,948 | - | (12) | 9 | 9,389 | |
| Contracts in progress and pre-payments |
||||||||
| . historic cost | 10 - | - | - | - | - | - | 10 | |
| Net | 10 - | - | - | - | - | - | 10 | |
| Total property, plant and equipment |
||||||||
| . historic cost | 100,068 | 1,895 | 590 | - | 212 | (125) | 9 | 101,045 |
| . depreciation | 75,894 | - | 579 | 7,484 | 190 | (113) | - | 82,496 |
| Net 24,174 |
1,895 | 11 | 7,484 | 22 | (12) | 9 | 18,549 |
| Property, plant and equipment | (€'000) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Balance at | Changes during the financial year | Balance at | ||||||||
| 31/12/13 | Incr. | Decr. | Depr. | Impairment | Currency translation differences |
Change in area of consolidation |
Reclassification | 31/12/14 | ||
| Plant and machinery | ||||||||||
| . historic cost | 14,674 | 2,182 | - | - | - | - | - | - | 16,856 | |
| . depreciation | 10,601 | - | - | 1,749 | - | - | - | - | 12,350 | |
| Net | 4,073 | 2,182 | - | 1,749 | - | - | - | - | 4,506 | |
| Industrial and commercial equipment |
||||||||||
| . historic cost | 33,513 | 1,440 | 364 | - | 195 | - | - | - | 34,394 | |
| . depreciation | 28,436 | 41 | 346 | 2,024 | 184 | - | - | - | 29,971 | |
| Net | 5,077 | 1,399 | 18 | 2,024 | 11 | - | - | - | 4,423 | |
| Other assets | ||||||||||
| . historic cost | 52,848 | 3,200 | 7 | - | - | 31 | (8) | 56,064 | ||
| . depreciation | 43,459 | 47 | 7 | 3,041 | - | 21 | 5 | 46,566 | ||
| Net | 9,389 | 3,153 | - | 3,041 | - | 10 | - | (13) | 9,498 | |
| Contracts in progress and pre-payments |
||||||||||
| . historic cost | - 10 | 10 | - | - | - | - | - | |||
| Net | - 10 | 10 | - | - | - | - | - | - | ||
| Total property, plant and equipment |
||||||||||
| . historic cost | 101,045 | 6,822 | 381 | - | 195 | 31 | - | (8) | 107,314 | |
| . depreciation | 82,496 | 88 | 353 | 6,814 | 184 | 21 | - | 5 | 88,887 | |
| Net | 18,549 | 6,734 | 28 | 6,814 | 11 | 10 | - | (13) | 18,427 |
The breakdown and changes were as follows:
This entry totalled Euro 4.506 million, net of depreciation in the financial year of Euro 1.749 million and was mainly electrical and thermal plant and alarm and audiovisual systems.
The increase of Euro 2.182 million was primarily attributable to lighting, air conditioning and climate control equipment, surveillance and audio-visual plant and equipment that were part of the upgrading of the MiCo North congress centre.
This item was Euro 4.423 million, net of depreciation in the financial year of Euro 2.024 million, and was mainly for equipment and furnishings related to the exhibition business.
The increase of Euro 1.399 million was mainly attributable to the purchase of furniture and assets to be hired out during exhibitions.
The decreases and write-downs reflected the reduction in the assets of Nolostand SpA following a stock-take.
This entry was Euro 9.498 million net of depreciation in the financial year of Euro 3.041 million; Euro 6.498 million was for improvements to third-party assets and Euro 3.000 million was for furniture, furnishing accessories, minor equipment, transport vehicles and electronic equipment.
The breakdown of the Euro 3.153 million increase was as follows:
Euro 2.307 million attributable to Fiera Milano Congressi SpA for construction work, installation of the Wi-Fi network and extraordinary maintenance work on the MiCo North Congress Centre;
Euro 0.184 million attributable to the Parent Company for purchases of electronic equipment and Euro 0.022 million for improvements made to assets belonging to Fondazione Fiera Milano.
Depreciation on improvements to third-party assets is calculated on the residual length of the lease contract for the property.
On 31 March 2014 the new lease agreements for the Rho and Milano exhibition sites that are due to expire on 30 June 2023 were signed. As a result, the useful life on which the depreciation of improvements to third-party assets is calculated was changed giving rise to different estimates for the Parent Company and lower depreciation of Euro 0.972 million in the financial year under review.
This item was zero (Euro 0.010 million in the year to 31 December 2013).
Details of the amounts and changes to various items in the last two financial years are given below:
| Leased property, plant and equipment | Balance at | Changes during the financial year | (€'000) Balance at |
|||||
|---|---|---|---|---|---|---|---|---|
| 31/12/12 | Incr. | Decr. | Depr. | Impairment | Reclassification | 31/12/13 | ||
| Leased property | ||||||||
| . historic cost | - | 10 | - | - | - | - | 10 | |
| . depreciation | - | - | - | - | - | - | - | |
| Net | - | 10 | - | - | - | - | 10 | |
| Other leased assets | ||||||||
| . historic cost | 19 | - | - | - | - | - | 19 | |
| . depreciation | 19 | - | - | - | - | - | 19 | |
| Net | - | - | - | - | - | - | - | |
| Total leased property, plant and equipment |
||||||||
| . historic cost | 19 | 10 | - | - | - | - | 29 | |
| . depreciation | 19 | - | - | - | - | - | 19 | |
| Net | - | 10 | - | - | - | - | 10 | |
| Leased property, plant and equipment | Balance at | Changes during the financial year | (€'000) Balance at |
|||||
| 31/12/13 | Incr. | Decr. | Depr. | Impairment | Reclassification | 31/12/14 | ||
| Leased property | ||||||||
| . historic cost | 10 | - | - | - | 1 | - | 11 | |
| . depreciation | Net | - 10 |
- - |
- - |
- - |
- 1 |
- - |
- 11 |
| Other leased assets | ||||||||
| . historic cost | 19 | - | 27 | - | - | 8 | - | |
| . depreciation | 19 | - | 19 | - | - | - | - | |
| Net | - | - | 8 | - | - | 8 | - | |
| Total leased property, plant and equipment |
||||||||
| . historic cost | 29 | - | 27 | - | 1 | 8 | 11 | |
Fiera Milano Consolidated Financial Statements to 31 December 2014 - Explanatory and Supplementary Notes to the Financial Statements and Attachments 158
Net - 10 8 - 1 8 11
The breakdown and changes in the last two financial years were as follows:
| Goodwill and intangible assets with an indefinite useful life | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Balance at | Changes during the financial year | |||||||||||
| 31/12/12 | Incr. | Decr. Impairment | Change in area of consolidation |
Currency translation differences |
Balance at 31/12/13 |
|||||||
| Goodwill | ||||||||||||
| . historic cost | 120,020 | - | - | - | 7,440 | (933) | 126,527 | |||||
| . amortisation | 16,607 | - | - | - | - | (10) | 16,597 | |||||
| Net | 103,413 | - | - | - | 7,440 | (923) | 109,930 |
| Goodwill and intangible assets with an indefinite useful life | (€'000) | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Balance at | Changes during the financial year | ||||||||
| 31/12/13 | Incr. | Decr. Impairment | Change in area of consolidation |
Currency translation differences |
Reclassification | 31/12/14 | |||
| Goodwill | |||||||||
| . historic cost | 126,527 | - | - | 500 | - | 44 | - | 126,071 | |
| . amortisation | 16,597 | - | - | - | - | - | - | 16,597 | |
| Net | 109,930 | - | - | 500 | - | 44 | - | 109,474 |
The charge of Euro 0.500 million was for impairment to the goodwill on the acquisition of Business International SpA, which is now part of Fiera Milano Media SpA, following an impairment test.
Increases in the financial year under review are for exchange rate differences of Euro 0.044 million.
As described in the section on "Valuation Criteria", goodwill is not depreciated but is subject to impairment tests at the end of each reporting period or more frequently if there are any indications of impairment. The methods used for the impairment tests in the 2014 financial period are described in the section on the "Use of estimates".
Goodwill is allocated to the relevant cash generating units or groups of cash generating units.
To identify "the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets" (IAS 36), the different reportable segments of the Group were identified as specific cash generating units.
In the reportable segment "Exhibitions" each exhibition constitutes a cash generating unit.
Each of the two reportable segments "Stand-fitting Services" and "Congresses" is one cash generating unit that encompasses all the assets of each individual segment.
In the reportable segment "Media" different cash generating units are identifiable that correspond to the various publications, while digital services is another cash-generating unit and all the activities relating to seminars and conventions are a single cash-generating unit (the "Events and Training" CGU).
Lastly, in the reportable segment "Overseas" the situation varies according to whether the Group is active in a country with its own exhibitions.
In order to avoid using arbitrary allocation criteria for the impairment tests, goodwill was allocated on the basis of appropriate groupings that reflect the strategic vision of the company as well as how the goodwill was generated.
The goodwill allocations are as follows:
The realisable value of the cash generating units (CGUs) to which individual goodwill was attributed is verified by determining their value in use.
The impairment method used is that of discounted cash flow, based on the industrial plans of each Group company and approved by their respective boards of directors. The time horizon considered is five financial years for Fiera Milano Media SpA and four years for the other companies as several important events occur biennially in the exhibition calendar. Cash flow projections beyond the time horizons of the industrial plans are generally made by taking the average gross operating margin of the last two years of the plan and estimating a normalised cash flow with no changes in working capital but including maintenance or replacement expenditure. For the Exhibitions and Directly Organised Exhibitions cash generating units the cash flows used to calculate the terminal value excluded the pro quota amount of exhibitions in the last two years of the industrial plan which are held less often than every two years.
The terminal value was measured as a perpetuity obtained by calculating the net present value of the average net cash flows of the last two years of the plan with detailed estimates using a discount rate that differed according to the various reference countries of the cash-generating units. Zero growth in real terms was assumed but an estimate of the medium/long-term inflation rates in the specific geographic areas was used.
The WACC (Weighted Average Cost of Capital) used for the Italian businesses calculated using: (i) a risk-free rate of 2.88%; (ii) a market risk premium of 5.5%; (iii) a levered beta of 0.96%, equal to the average for the sector; (iv) a risk premium that varied according to the different CGUs; (v) a cost of debt of 3.49%; (vi) with average debt equal to 25% of invested capital (the average of the peer companies).
The single elements were arrived at using as far as possible publicly available sources. A rate net of taxes was used for cash flows net of taxes.
The WACC of the different CGUs varied according to: (i) the different risk-free rates (the yield on a 10-year government bond in the jurisdiction of the CGU); and (ii) the specific risk coefficient to cover the execution risk of the forecast cash flows. The risk factors reflect the differences between historical data and estimated figures and also forecasts for the impact of the business initiatives to be implemented; (iii) the different cost of debt due to the estimated rate of inflation in each jurisdiction of the CGUs. A summary of the results is given in the table below:
| CGU | WACC |
|---|---|
| Exhibitions CGU | 7.26% |
| Directly Organised Exhibitions CGU | 7.26% |
| Exhibition Stand-fitting CGU | 7.34% |
| Publications and Digital Services CGU | 8.99% |
| Events and Training CGU | 8.99% |
| Congresses CGU | 6.74% |
| Brazil CGU | 16.42% |
| South Africa CGU | 11.94% |
| Turkey CGU | 12.95% |
| Worldex CGU | 8.17% |
Sensitivity analyses were carried out by varying the WACC (+0.5%) and the forecast operating cash flows (-10%) with a positive outcome for all the CGUs not found to be impaired.
The breakdown and changes in the last two financial years were as follows:
| Intangible assets with a finite useful life | (€'000) | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Balance at 31/12/12 |
Incr. | Decr. | Changes during the financial year Depr. |
Impair ment |
Change in area of consolidation |
Currency translation differences |
Balance at 31/12/13 |
||||
| Trademarks and publishing titles | |||||||||||
| . historic cost . amortisation |
68,969 14,104 |
- - |
- - |
- 3,275 |
- 6,569 |
- - |
(3,823) (339) |
65,146 23,609 |
|||
| Net | 54,865 | - | - | 3,275 | 6,569 | - | (3,484) | 41,537 | |||
| Concessions, licenses and similar rights | |||||||||||
| . historic cost | 2,667 | 3,312 | - | - | - | - | - | 5,979 | |||
| . amortisiaton | 2,476 | - | - | 948 | - | - | - | 3,424 | |||
| Net | 191 | 3,312 | - | 948 | - | - | - | 2,555 | |||
| Development costs | |||||||||||
| . historic cost | 1,948 | - | - | - | - | - | - | 1,948 | |||
| . amortisation | 1,948 | - | - | - | - | - | - | 1,948 | |||
| Net | - | - | - | - | - | - | - | - | |||
| Industrial patents and intellectual property rights |
|||||||||||
| . historic cost | 32,183 | 2,989 | - | - | - | - | (17) | 35,155 | |||
| . amortisation | 28,238 | - | - | 2,347 | - | - | (2) | 30,583 | |||
| Net | 3,945 | 2,989 | - | 2,347 | - | - | (15) | 4,572 | |||
| Non-competition agreements . historic cost |
856 | - | - | - | - | - | (157) | 699 | |||
| . amortisation | 75 | - | - | 91 | - | - | (25) | 141 | |||
| Net | 781 | - | - | 91 | - | - | (132) | 558 | |||
| Total intangible assets with a finite useful life . historic cost . amortisation |
106,623 46,841 |
- | 6,301 | - - |
- 6,661 |
- 6 ,569 |
- - |
(3,997) (366) |
108,927 59,705 |
||
| Net | 59,782 | 6,301 | - | 6,661 | 6,569 | - | (3,631) | 49,222 | |||
| Intangible assets with a finite useful life | Balance at | Changes during the financial year | (€'000) Balance at |
||||||||
| 31/12/13 | Incr. | Decr. | Depr. | Impair ment |
Change in area of | consolidation | Currency translation differences |
Reclassification | 31/12/14 | ||
| Trademarks and publishing titles | |||||||||||
| . historic cost | 65,146 | - | - | - | 3 ,126 |
- | 354 | - | 62,374 | ||
| . amortisation | Net | 23,610 41,536 |
- - |
- - |
2 ,865 2 |
- 3 ,865 ,126 |
- - |
25 329 |
- - |
26,500 35,874 |
|
| Concessions, licenses and similar rights | |||||||||||
| . historic cost | 5,979 | 342 | - | - | - | - | - | - | 6,321 | ||
| . amortisiaton | Net | 3,424 2,555 |
- 342 |
- - |
1 ,310 1 ,310 |
- - |
- - |
- - |
- - |
4,734 1,587 |
|
| Development costs | |||||||||||
| . historic cost | 1,948 | - | 1 | - ,948 | - | - | - | - | - | ||
| . amortisation | Net | 1,948 - - |
- | 1 - |
- ,948 - |
- - |
- - |
- - |
- - |
- - |
|
| Industrial patents and intellectual property rights |
|||||||||||
| . historic cost | 35,155 1 |
463 ,439 | - | - | - | 2 | - | 36,133 | |||
| . amortisation | 30,582 | - | 463 | 2 ,358 |
- | - | 1 | (5) | 32,473 | ||
| Net | 4,573 1 |
- ,439 | 2 ,358 |
- | - | 1 | 5 | 3,660 | |||
| Non-competition agreements . historic cost |
699 | - | - | - | - | - | 17 | - | 716 | ||
| . amortisation | Net | 141 558 |
- | - - - |
110 110 |
- - |
- - |
2 15 |
- - |
253 463 |
|
useful life . historic cost 108,927 1 2 ,781 - ,411 3 - ,126 373 - 105,544 . amortisation 59,705 - 2 6 ,411 - ,643 - 28 (5) 63,960 Net 49,222 1,781 - 6,643 3,126 - 345 5 41,584
Total intangible assets with a finite
Fiera Milano Consolidated Financial Statements to 31 December 2014 - Explanatory and Supplementary Notes to the Financial Statements and Attachments 162
This item totalled Euro 35.874 million with the following breakdown:
The trademarks are mainly for specific exhibitions directly organised by the Group.
The publishing titles refer to specialist trade publications aimed at sector professionals.
Both the trademarks and the publishing titles came under the Group control through various business combinations transacted over time. As a result of estimates made of the useful life of the various exhibition trademarks and publishing titles, starting from the fourth quarter of 2008 these have been amortised rather than using the previous accounting criteria of an indefinite useful life.
For the trademarks and publications to which Fiera Milano has attributed a finite useful life, the internal and external sources of information indicated in paragraphs 12-14 of IAS 36 were used to assess if there were any indications of impairment. Indications of impairment were found for the
Food & Beverage and Real Estate publications of Fiera Milano Media due to the unsatisfactory economic performances which were not adequately offset by the estimates of future performance. This resulted in the changes described below:
At 31 December 2014, this item totalled Euro 1.587 million net of amortisation for the year of Euro 1.310 million. The increase of Euro 0.342 million was for the acquisition by the Parent Company of software licences and with rights of use for a limited period.
Time-limited software licences are amortised over a period of three years.
These were Euro 3.660 million net of depreciation and amortisation for the year of Euro 2.358 million. The Euro 1.439 million increase refers mainly to costs for the implementation of other digital projects and the purchase by the Parent Company of software licences.
Depreciation and amortisation is calculated over a period of three to ten years. Depreciation of the Information System of the Parent Company is calculated over a useful life of three years.
This entry was Euro 0.463 million net of amortisation in the year of Euro 0.110 million. It refers to Cipa FM and Interteks.
These were Euro 15.462 million (Euro 15.368 million at 31 December 2013) and refer almost exclusively to the investment of 49% in Hannover Milano Global Germany GmbH. It was subject to the following changes:
| (€'000) | ||||||
|---|---|---|---|---|---|---|
| Balance at | Changes during the financial year | Balance at | ||||
| 31/12/13 | Results | Dividend distribution |
Increase | Currency translation differences |
31/12/14 | |
| Equity-accounted investments | 15,368 | 1,448 | (1,705) | 24 | 327 | 15,462 |
| Total | 15,368 | 1,448 | (1,705) | 24 | 327 | 15,462 |
Greater detail is given in Note 2, Disclosure on subsidiaries, joint ventures and associates.
These totalled Euro 0.040 million (Euro 0.040 million at 31 December 2013) with the following breakdown:
• equity investment in Esperia SpA of Euro 0.029 million;
• equity investment of 0.07% in the share capital of the Congress Center of Istanbul for Euro 0.011 million.
These totalled Euro 13.275 million (Euro 14.228 million at 31 December 2013).
| Trade and other receivables | (€'000) | |||
|---|---|---|---|---|
| Balance at | Changes during the financial year | Balance at | ||
| 31/12/13 | Increase | Decrease | 31/12/14 | |
| Other receivables from the controlling shareholder |
12,784 | 1,977 | 2,372 | 12,389 |
| Guarantee deposits | 602 | - | 17 | 585 |
| Other | 842 | - | 541 | 301 |
| Total | 14,228 | 1,977 | 2,930 | 13,275 |
They included:
Trade and other receivables included Euro 12.389 million (Euro 12.784 million at 31 December 2013) of related-party transactions. Further details on related-party transactions are given in Note 48.
These were Euro 6.457 million (Euro 2.055 million at 31 December 2013) and represent the difference between deferred tax assets and deferred tax liabilities recognised at the level of each individual company included in the consolidation.
The change compared to the preceding financial year was mainly due to deferred tax assets on tax losses during the financial year that were recognised in the financial period under review against a valuation of the recoverability of these in the approved plans.
Further details of the changes in deferred taxes are given in Note 46.
Fiera Milano Consolidated Financial Statements to 31 December 2014 - Explanatory and Supplementary Notes to the Financial Statements and Attachments 165
| Trade and other receivables | (€'000) | ||
|---|---|---|---|
| 31/12/14 | 31/12/13 | Change | |
| Trade receivables | 37,953 | 45,253 | (7,300) |
| Trade receivables from the controlling shareholder | 1,559 | 2,184 | (625) |
| Trade receivables from associates | 45 | 56 | (11) |
| Other receivables | 5,103 | 5,176 | (73) |
| Prepaid expenses from the controlling shareholder | 5,097 | 203 | 4,894 |
| Accrued income and prepaid expenses | 847 | 674 | 173 |
| Total | 50,604 | 53,546 | (2,942) |
These were Euro 50.604 million (Euro 53.546 million at 31 December 2013).
They included:
The sum for receivables was adjusted by the application of a provision for doubtful receivables in order to bring the nominal value in line with their presumed realisable value. The changes in this provision in the financial year under review are shown in the table below:
| (€'000) | ||||
|---|---|---|---|---|
| 31/12/13 | Provisions | Utilisation and other changes |
31/12/14 | |
| Provision for doubtful receivables | 9,267 | 1,430 | 1,608 | 9,089 |
The provision made was for receivables that were deemed difficult to recover.
Use of the provision refers to receivables which, in the financial year under review, were found to be unrecoverable.
pre-payments to suppliers of Euro 1.012 million (Euro 1.010 million at 31 December 2013);
receivables for tax pre-payments on severance indemnities of Euro 0.288 million (Euro 0.284 million at 31 December 2013);
The entry includes Euro 6.795 million for related-party transactions (Euro 2.390 million at 31 December 2013). Further details on related-party transactions are given in Note 48.
Inventories were Euro 5.028 million (Euro 4.006 million at 31 December 2013) and were as follows:
| Inventories | (€'000) | ||
|---|---|---|---|
| 31/12/14 | 31/12/13 | Change | |
| Raw materials, subsidiary materials and consumables | 45 | 33 | 12 |
| Total inventories | 45 | 33 | 12 |
| Total suspended costs | 4,983 | 3,973 | 1,010 |
| Total inventories | 5,028 | 4,006 | 1,022 |
Suspended costs refer to exhibitions and congresses to be held after 31 December 2014. The breakdown of suspended costs by event was as follows.
| (€'000) | |||
|---|---|---|---|
| Exhibition | 31/12/14 | 31/12/13 | Change |
| Tuttofood | 1,671 | 146 | 1,525 |
| Bit | 887 | 216 | 671 |
| Homi I semester | 527 | 1,100 | (573) |
| Host | 496 | 33 | 463 |
| Homi II semester | 392 | 157 | 235 |
| Miart | 205 | 174 | 31 |
| Transpotec & Logitec | 142 | 48 | 94 |
| Tubotech | 113 | - | 113 |
| Expo 2015 | 19 | 156 | (137) |
| Fisp | - | 276 | (276) |
| XDays | - | 221 | (221) |
| Macef Brasil | - | 111 | (111) |
| Expodetergo International | - | 106 | (106) |
| Food Hospitality World Brasil | - | 104 | (104) |
| Other | 531 | 1,125 | (594) |
| Total | 4,983 | 3,973 | 1,010 |
This entry was zero (Euro 0.635 million at 31 December 2013).
The decrease was due to the repayment of a loan made by the Parent Company to the joint venture Hannover Milano Global Germany GmbH.
This entry was Euro 12.276 million (Euro 11.416 million at 31 December 2013) and was almost entirely composed of short-term bank deposits at floating interest rates. The change in financial flows compared to those at 31 December 2013 is shown in the Consolidated Statement of Cash Flows.
Consolidated equity was as follows:
| Equity | (€'000) | ||
|---|---|---|---|
| 31/12/14 | 31/12/13 | Change | |
| Share capital | 41,521 | 41,521 | - |
| of which treasury shares | (627) | (627) | - |
| Share premium reserve | 909 | 13,573 | (12,664) |
| of which treasury shares | (2,913) | (2,913) | - |
| Legal reserve | 7,865 | 7,865 | - |
| Other reserves | (4,478) | (6,390) | 1,912 |
| Retained profits/(losses) | (9,828) | (5,421) | (4,407) |
| Profit/(loss) for the period | (18,955) | (16,498) | (2,457) |
| Group equity | 17,034 | 34,650 | (17,616) |
| Capital and reserves attributable to non-controlling interests | 2,805 | 2,939 | (134) |
| Profit/(loss) attributable to non-controlling interests | (151) | (127) | (24) |
| Equity attributable to non-controlling interests | 2,654 | 2,812 | (158) |
| Total | 19,688 | 37,462 | (17,774) |
The breakdown and changes were as follows:
At 31 December 2014 the fully paid-up share capital was Euro 41.521 million (Euro 41.521 million at 31 December 2013), net of Euro 0.627 million of treasury shares. The fully paid-up share capital of the Group is 42,147,437 ordinary shares each of nominal value Euro 1.00 and subject to no restrictions on the dividend distribution and the repayment of capital, except for those provided in law regarding treasury shares.
The breakdown of the shares in issue is shown in the following table:
| Number of shares | Change | Number of shares | |||
|---|---|---|---|---|---|
| at 31 December 2013 | Increase in capital | Purchase | Sale | at 31 December 2014 | |
| Ordinary shares in issue | 42,147,437 | - | - | - | 42,147,437 |
| Treasury shares | 626,758 | - | - | - | 626,758 |
| Total shares outstanding | 41,520,679 | - | - | - | 41,520,679 |
Under IAS/IFRS, the nominal value of treasury shares is carried directly to equity whilst the difference between the nominal value and the acquisition price of treasury shares is taken against the share premium reserve.
This was Euro 0.909 million (Euro 13.573 million at 31 December 2013) net of Euro 2.913 million of treasury shares.
The change during the financial year under review was due to decision of the Parent Company, with the approval of the Shareholders' meeting of 29 April 2014, to cover the losses of the previous financial year by using the share premium reserve.
The legal reserve was Euro 7.865 million, unchanged compared to 31 December 2013.
These were negative for Euro 4.478 million (negative for Euro 6.390 million at 31 December 2013).
The improvement in the period under review was attributable:
These were negative for Euro 9.828 million (negative for Euro 5.421 million at 31 December 2013).
The changes in the financial year were as follows:
In the financial year to 31 December 2014 the Group made a net loss of Euro 18.955 million. It made a net loss of Euro 16.498 million in the preceding financial year.
At 31 December 2014, these were Euro 2.805 million (Euro 2.939 million at 31 December 2013).
The changes in the financial year were as follows:
The net result attributable to non-controlling interests was negative for Euro 0.151 million (negative for Euro 0.127 million at 31 December 2013).
Bank borrowings totalled Euro 26.898 million (Euro 34.408 million at 31 December 2013) and were as follows:
| Bank borrowings | (€'000) | ||
|---|---|---|---|
| 31/12/14 | 31/12/13 | Change | |
| Bank loans - non current | 26,898 | 34,408 | (7,510) |
| Total | 26,898 | 34,408 | (7,510) |
| (€'000) | |||
| Non-current bank borrowings | Fiera Milano SpA |
Total | |
| Non-current bank borrowings of which maturing beyond five years |
26,898 - |
26,898 - |
|
| Total | 26,898 | 26,898 |
Non-current bank borrowings are the following loans made to the Parent Company:
Some of the financial loans described above (those given on 21 December 2012 and 6 December 2013) are governed by financial covenants which have set a maximum level for the net debt/equity ratio; the next assessment of this financial indicator will be in the 2015 financial year. Further details are given in Note 30.
The change compared to the previous financial year is due to the gradual repayment of non-current loans taken out in the past by the Parent Company and by Fiera Milano Congressi SpA (Euro 0.454 million at 31 December 2013) in part offset by the new loans.
These totalled Euro 2.001 million (Euro 3.491 million at 31 December 2013) and the breakdown was as follows:
| Other non-current financial liabilities | (€'000) | ||
|---|---|---|---|
| 31/12/14 | 31/12/13 | Change | |
| Valuation of the options on the shares to acquire Worldex | 1,781 | 1,685 | 96 |
| Valuation of the options on the shares to acquire Fiera Milano Exhibitions Africa |
- | 1,421 | (1,421) |
| Finance leases | 220 | 385 | (165) |
| Total | 2,001 | 3,491 | (1,490) |
The decrease in the put options on the shares for the acquisition of Fiera Milano Exhibitions Africa was due to the exercise in favour of the Parent Company of the put option on 10% of the share capital, and on the valuation of the amount payable to third-parties for the option on the residual shareholding of 15%.
The entry for finance leases referred to the non-current part of the finance lease for the concession of the right to use the Festivity trademark. The change compared to the previous financial year reflected the reclassification of the current portion under other current financial liabilities.
This entry includes Euro 1.781 million of related-party transactions (Euro 2.538 million at 31 December 2013). Greater detail on related-party transactions is given in Note 48.
These were Euro 1.752 million (Euro 2.583 million at 31 December 2013) and were as follows:
| Provisions for risks and charges | (€'000) | ||||
|---|---|---|---|---|---|
| 31/12/13 | Provisions | Utilisation | Reclassifications | 31/12/14 | |
| Provision for charges for "Palazzo Italia" project | 981 | - | - | (778) | 203 |
| Provision for tax consolidation | 286 | - | - | - | 286 |
| Other provisions for risks and charges | 1,316 | 18 | 118 | 47 | 1,263 |
| Total | 2,583 | 18 | 118 | (731) | 1,752 |
The breakdown of the provision for risks and charges was as follows:
These were Euro 10.286 million (Euro 9.202 million at 31 December 2013).
They were made up of employee severance indemnities that had accrued at 31 December 2006 and valued using actuarial methods. The change in the financial year under review is shown in the following table:
| Employee benefit provisions | (€'000) | |||
|---|---|---|---|---|
| 31/12/13 | Severance indemnities accrued |
Indemnities and advances paid |
31/12/14 | |
| Defined benefit plans | 9,202 | 1,387 | 303 | 10,286 |
| Total | 9,202 | 1,387 | 303 | 10,286 |
| Accrued severance indemnities | (€'000) | |||
| Personnel expenses: - indemnities related to defined benefit plans |
||||
| Financial expenses: - actualisation charges |
558 | |||
| Other comprehensive income - Remeasurement of defined benefit plans |
285 | |||
| 544 | ||||
| Total | 1,387 |
The Group uses a duly certified professional to determine the actuarial amounts.
The main hypotheses/assumptions used in the actuarial calculations for the defined benefit plans were as follows:
| Demographic assumptions | |
|---|---|
| Mortality rate | Based on the ISTAT 2011 mortality tables by gender |
| Probability of disability | Based on the disability tables used in the INPS 2010 forecast model |
| Probability of termination of employment | The probable employee turnover rate was derived from the rates of the companies being valued |
| Retirement probability | Assumption that the basic requirements needed to receive the compulsory general insurance (Assicurazione Generale Obbligatoria ) were met |
| Probability of early retirement | Assumption of 3% per annum and an average amount of 70% of the staff-leaving indemnities of all the companies valued. |
| Economic and financial assumption for calculation of severance indemnity provisions 31/12/14 31/12/13 | ||
|---|---|---|
| Annual technical discount rate | 1.60% | 3.10% |
| Annual inflation rate | 1.50% | 2.00% |
| Annual rate of increase in total employees salary | 2.50% | 3.00% |
| Annual rate of increase in severance indemnity provisions | 2.62% | 3.00% |
The discount rate was calculated with reference to the Eurozone Iboxx Corporate AA index for a period equal to or greater than ten years.
The following table gives sensitivity analyses for the main assumptions used to calculate the liability for defined benefit plans.
| Effect of defined benefit plans on debt | (€ '000) | |||
|---|---|---|---|---|
| Economic and financial assumptions | Range | Base figure (excluding severance indemnities ) |
Increase in assumptions |
Decrease in assumptions |
| Annual technical discount rate | +/- 0.5% | 10,233 | 9,933 | 10,552 |
| Annual rate of increase in total employees salary | +/- 0.5% | 10,233 | 10,277 | 10,189 |
| Economic and financial assumptions | ||||
| Life expectancy | +/- 1 year | 10,233 | 10,297 | 10,170 |
Following the adoption of the amendments of IAS 19 Revised, since the financial year ended 31 December 2011, the actuarial gains and losses are recognised in equity through other comprehensive income.
| Deferred tax liabilities | (€ '000) | ||
|---|---|---|---|
| 31/12/14 | 31/12/13 | Change | |
| Deferred tax liabilities | 7,147 | 7,949 | (802) |
These were Euro 7.147 million (Euro 7.949 million at 31 December 2013) and were the balance of deferred tax assets and deferred tax liabilities recognised at the level of each individual company included in the consolidation.
They included:
An analysis of the changes in deferred tax liabilities is given in Note 46 to the Income Statement.
These totalled Euro 0.055 million (Euro 1.195 million at 31 December 2013).
Changes during the financial year were as follows:
| Other non-current liabilities | (€ '000) | ||
|---|---|---|---|
| 31/12/14 | 31/12/13 | Change | |
| Non-current trade payables | - | 925 | (925) |
| Non-current portion of payables for non-compete agreement in acquisition of Cipa FM |
- | 235 | (235) |
| Other non-current liabilities | 55 | 35 | 20 |
| Total | 55 | 1,195 | (1,140) |
Non-current payables to suppliers were reclassified to current liabilities.
The non-compete clause was extinguished with the resignation of the Managing Director of the noncontrolling interests in Cipa FM.
This entry includes no related party transactions (Euro 0.235 million at 31 December 2013).
The breakdown of bank borrowings and changes in the financial year were as follows:
| Bank borrowings | (€ '000) | ||
|---|---|---|---|
| 31/12/14 | 31/12/13 | Change | |
| Bank accounts | 548 | 300 | 248 |
| Bank advances | 2,500 | - | 2,500 |
| Bank overdrafts | 59,524 | 42,032 | 17,492 |
| Loans - current portion | 20,322 | 13,073 | 7,249 |
| Total | 82,894 | 55,405 | 27,489 |
The entry for Bank advances of Euro 2.500 million refers to Nolostand SpA and is for advances on accounts receivable.
Euro 59.524 million (Euro 42.032 million at 31 December 2013) million at 31 December of the entry for Bank overdrafts were credit lines given to the Parent Company for its cash management requirements;
The entry for Loans of Euro 20.322 million (Euro 13.073 million at 31 December 2013) is mainly short-term bank borrowings taken out by the Parent Company for cash management requirements as described in Note 17.
The increase in bank borrowings reflected operational cash flows that were impacted by a decrease in negative net working capital, lower cash flows generated by the normal business, and investments made to upgrade the MiCo Congress Centre.
| (€ '000) | ||||||
|---|---|---|---|---|---|---|
| Current bank borrowings | Fiera Milano |
Fiera Milano Congressi |
Fiera Milano Media |
Nolostand | Interteks | Total |
| Bank accounts | 507 | - | 41 | - | - | 548 |
| Bank advances | - | - | - | 2,500 | - | 2,500 |
| Bank overdrafts | 59,524 | - | - | - | - | 59,524 |
| Loans - current portion | 19,531 | 454 | - | - | 337 | 20,322 |
| Total | 79,562 | 454 | 41 | 2,500 | 337 | 82,894 |
Bank borrowings are subject to floating rate interest.
These were Euro 36.160 million (Euro 43.830 million at 31 December 2013). Trade payables were mainly to Italian suppliers for the acquisition of services required to mount the exhibitions that is the typical business of the Company. The decrease reflects a lower number of transactions with suppliers due to the lower level of activity caused by the exhibition calendar and to a different trend in payments compared to the previous financial year.
Pre-payments totalled Euro 39.641 million (Euro 37.047 million at 31 December 2013).
They were mainly pre-payments invoiced to clients for exhibitions to be held after the end of the financial year. Recognition as revenue is delayed until the exhibition is held.
The table below gives a breakdown by exhibition. The change in pre-payments compared to the previous financial year can be explained by the biennial and multi-annual frequency of some exhibitions:
| Pre-payments | (€ '000) | ||
|---|---|---|---|
| 31/12/14 | 31/12/13 | Change | |
| Homi I semester | 12,506 | 12,789 | (283) |
| Tuttofood | 4,027 | 270 | 3,757 |
| Host | 3,483 | 1,491 | 1,992 |
| Salone del mobile/Complemento d'arredo | 1,921 | 1,335 | 586 |
| Lineapelle I semester | 1,650 | - | 1,650 |
| Plast | 1,297 | - | 1,297 |
| Mido | 1,268 | 1,018 | 250 |
| Milano Unica primavera | 1,053 | 1,141 | (88) |
| Micam primavera | 1,042 | 964 | 78 |
| Ipack-Ima | 981 | 12 | 969 |
| Mostra Convegno Expocomfort | 816 | 8,718 | (7,902) |
| Made Expo | 782 | - | 782 |
| Exposec | 597 | 751 | (154) |
| Bit | 579 | 563 | 16 |
| Made in Steel | 522 | - | 522 |
| Simac tanning Tech | 519 | - | 519 |
| Mifur | 478 | 583 | (105) |
| Euroluce | 460 | - | 460 |
| Tubotech | 387 | 115 | 272 |
| Promotion trade exhibition | 269 | 233 | 36 |
| Evento Nowadays | 140 | - | 140 |
| Art for me | 143 | - | 143 |
| Meat Tech | 135 | - | 135 |
| Fisp | 133 | 1,337 | (1,204) |
| Converflex | 116 | - | 116 |
| Fire Show | 25 | 280 | (255) |
| Sicurezza | 21 | 107 | (86) |
| Expodetergo | - | 344 | (344) |
| Eurocucina | - | 335 | (335) |
| Bimu | - | 325 | (325) |
| Beauty & Care Istanbul | - | 195 | (195) |
| Salone Internazione del Bagno | - | 166 | (166) |
| Esposizione Internazionale Canina | - | 162 | (162) |
| Xylexpo | - | 122 | (122) |
| The innovation cloud | - | 100 | (100) |
| Pet Show | - | 85 | (85) |
| Other | 4,291 | 3,506 | 785 |
| Total | 39,641 | 37,047 | 2,594 |
This entry included no related-party transactions (Euro 0.025 million at 31 December 2013).
| Other current financial liabilities | (€ '000) | ||
|---|---|---|---|
| 31/12/14 | 31/12/13 | Change | |
| Financial payables to the controlling shareholder | 21,683 | 20,410 | 1,273 |
| Valuation of the options on the shares to acquire Fiera Milano Exhibitions Africa |
300 | - | 300 |
| Finance leases | 167 | 162 | 5 |
| Total | 22,150 | 20,572 | 1,578 |
Fiera Milano Consolidated Financial Statements to 31 December 2014 - Explanatory and Supplementary Notes to the Financial Statements and Attachments 177 These totalled Euro 22.150 million (Euro 20.572 million at 31 December 2013).
Euro 21.850 million refers to the Parent Company and the entry Financial payables to the controlling shareholder shows the figure in the current account held with Fondazione Fiera Milano, which was mainly for the payment of the rent for the second semester of the financial period under review.
The entry includes Euro 21.983 million (Euro 20.410 million at 31 December 2013) for related-party transactions. Further details on related-party transactions are given in Note 48.
| Current provisions for risks and charges | (€ '000) | ||||
|---|---|---|---|---|---|
| 31/12/13 | Provisions | Utilisation | Reclassifications | 31/12/14 | |
| Palazzo Italia project | 1,492 | - | 1,355 | 778 | 915 |
| Loss on exhibitons | 111 | - | 111 | - | - |
| Other provisions for risks and charges | 441 | 118 | 101 | (47) | 411 |
| Total | 2,044 | 118 | 1,567 | 731 | 1,326 |
These were Euro 1.326 million (Euro 2.044 million at 31 December 2013).
The breakdown was as follows:
| Current tax liabilities | (€ '000) | ||
|---|---|---|---|
| 31/12/14 | 31/12/13 | Change | |
| Income tax payable for employees (IRPEF) | 1,386 | 1,374 | 12 |
| Income tax payable for temporary employees and project workers (IRES) | 152 | 190 | (38) |
| Income tax payable on profits for the year | 310 | 146 | 164 |
| Other tax liabilities | 243 | 335 | (92) |
| Total | 2,091 | 2,045 | 46 |
These were Euro 2.091 million (Euro 2.045 at 31 December 2013).
These were Euro 20.549 million (Euro 21.772 million at 31 December 2013) and the breakdown was as follows:
| Other current liabilities | (€ '000) | ||
|---|---|---|---|
| 31/12/14 | 31/12/13 | Change | |
| Payables to exhibition organisers | 6,740 | 8,283 | (1,543) |
| Payables to employees | 4,570 | 3,971 | 599 |
| Payables to pension and social security entities | 2,491 | 2,502 | (11) |
| Payables to Fondazione Fiera Milano | 2,183 | 1,723 | 460 |
| Earn-out of Fiera Milano SpA for Worldex acquisition | - | 1,785 | (1,785) |
| Earn-out of Fiera Milano SpA for Fiera Milano Exhibitions Africa acquisition |
- | 266 | (266) |
| Group VAT payables | 1,945 | 974 | 971 |
| Payables to directors and statutory auditors | 92 | 67 | 25 |
| Other payables | 2,177 | 1,877 | 300 |
| Deferred income | 351 | 300 | 51 |
| Accrued liabilities | - | 24 | (24) |
| Total | 20,549 | 21,772 | (1,223) |
The main changes were:
This entry also included Euro 4.128 million for related-party transactions (Euro 2.697 million at 31 December 2013). Further details on related-party transactions are given in Note 48.
At 31 December 2014 the Group had net debt of Euro 121.667 million (net debt of Euro 101.825 million at 31 December 2013) as shown in the following table. Where applicable, the part referring to related-party transactions is shown separately for each entry.
| Group Net Financial Position (Amounts in € '000) |
31/12/14 | 31/12/13 restated * |
Change |
|---|---|---|---|
| A. Cash (including bank balances) | 12,276 | 11,416 | 860 |
| B. Other cash equivalents | - | - | - |
| C. Securities held for trading | - | - | - |
| D. Cash and cash equivalents (A+B+C) | 12,276 | 11,416 | 860 |
| E. Current financial assets | - | 635 | (635) |
| F. Current bank borrowings | 62,908 | 42,706 | 20,202 |
| G. Current portion of non-current debt | 19,986 | 12,699 | 7,287 |
| H. Other current financial liabilities | 22,150 | 20,572 | 1,578 |
| - H.1 of which Other current financial liabilities to the controlling shareholder | 21,683 | 20,410 | 1,273 |
| - H.2 of which Other current financial liabilities to other related parties | 300 | - | 300 |
| I. Current financial debt (F+G+H) | 105,044 | 75,977 | 29,067 |
| J. Current net financial debt (cash) (I-E-D) | 92,768 | 63,926 | 28,842 |
| K. Non-current bank borrowings | 26,898 | 34,408 | (7,510) |
| L. Debt securities in issue | - | - | - |
| M. Other non-current liabilities | 2,001 | 3,491 | (1,490) |
| - M.1 of which Other non current liabilities to other related parties | 1,781 | 3,106 | (1,325) |
| N. Non-current financial debt (K+L+M) | 28,899 | 37,899 | (9,000) |
| Net financial debt/(cash) from continuing operations (J+N) | 121,667 | 101,825 | 19,842 |
| Net financial debt/(cash) from discontinued operations | - | - | - |
| O. Net financial debt/(cash) | 121,667 | 101,825 | 19,842 |
Net debt increased by Euro 19.842 million and reflected operational cash flows that were impacted by a decrease in negative net working capital, lower cash flows generated by the normal business, and investments made to upgrade the MiCo Congress Centre.
Additional information on the financial instruments of the Group is given below to enable a better assessment of:
The items in the Statement of Financial Position and the types of risk related to financial instruments at 31 December 2014 and 31 December 2013 are shown in the following table.
| Risk class (€'000) |
Notes | FY 31/12/2014 |
FY 31/12/2013 |
Liquidity risk |
Interest rate risk |
Credit risk |
|---|---|---|---|---|---|---|
| NON-CURRENT ASSETS | ||||||
| 1) Trade and other receivables | 10 | 13,275 | 14,228 | X | ||
| CURRENT ASSETS | ||||||
| 2) Trade and other receivables | 12 | 50,604 | 53,546 | X | ||
| 3) Current financial assets | 14 | - | 635 | X | ||
| 4) Cash and cash equivalents | 15 | 12,276 | 11,416 | X | ||
| NON-CURRENT LIABILITIES | ||||||
| 5) Bank borrowings | 17 | 26,898 | 34,408 | X | X | |
| 6) Other financial liabilities | 18 | 2,001 | 3,491 | X | X | |
| 7) Other non current liabilities | 22 | 55 | 1,195 | X | ||
| CURRENT LIABILITIES | ||||||
| 8) Bank borrowings | 23 | 82,894 | 55,405 | X | X | |
| 9) Trade payables | 24 | 36,160 | 43,830 | X | ||
| 10) Other financial liabilities | 26 | 22,150 | 20,572 | X | X | |
| 11) Other current liabilities | 29 | 20,549 | 21,772 | X |
Financial instruments and their relative significance, as regards the Statement of Financial Position and Income Statement at 31 December 2013 and 31 December 2014, are shown in the following tables.
| Financial assets and liabilities shown in the accounts |
FY | Assets at fair value (a) |
Loans and receivables |
Investments held to maturity |
Liabilities at amortised |
Fair value | Impact on Income |
|
|---|---|---|---|---|---|---|---|---|
| (€'000) | Notes 31/12/2013 | through profit & loss |
cost | Statement | ||||
| NON-CURRENT ASSETS | ||||||||
| 1) Trade and other receivables | 10 | 14,228 | - | 14,228 | - | - | 14,228 | 342 |
| CURRENT ASSETS | ||||||||
| 2) Trade and other receivables | 12 | 53,546 | - | 53,546 | - | - | 53,546 | (1,715) |
| 3) Current financial assets | 14 | 635 | - | 635 | - | - | - | 11 |
| 4) Cash and cash equivalents | 15 | 11,416 | - | 11,416 | - | - | 11,416 | 276 |
| NON-CURRENT LIABILITIES | ||||||||
| 5) Bank borrowings | 17 | 34,408 | - | - | - | 34,408 | 34,408 | (1,070) |
| 6) Other financial liabilities | 18 | 3,491 | - | - | - | 3,491 | 3,491 | (87) |
| 7) Other non current liabilities | 22 | 1,195 | - | - | 1,195 | 1,195 | ||
| CURRENT LIABILITIES | ||||||||
| 8) Bank borrowings | 23 | 55,405 | - | - | - | 55,405 | 55,405 | (1,946) |
| 9) Trade payables | 24 | 43,830 | - | - | - | 43,830 | 43,830 | (2) |
| 10) Other financial liabilities | 26 | 20,572 | - | - | - | 20,572 | 20,572 | (999) |
| 11) Other current liabilities | 29 | 21,772 | - | - | - | 21,772 | 21,772 | - |
| (a) Fair value at the recognition date |
| Financial assets and liabilities shown in the accounts |
FY | Assets at fair value (a) |
Loans and receivables |
Investments held to maturity |
Liabilities at amortised |
Fair value | Impact on Income |
|
|---|---|---|---|---|---|---|---|---|
| (€'000) | Notes 31/12/2014 | through profit & loss |
cost | Statement | ||||
| NON-CURRENT ASSETS | ||||||||
| 1) Trade and other receivables | 10 | 13,275 | - | 13,275 | - | - | 13,275 | 134 |
| CURRENT ASSETS | ||||||||
| 2) Trade and other receivables | 12 | 50,604 | - | 50,604 | - | - | 50,604 | (1,510) |
| 3) Current financial assets | 14 | - | - | - | - | - | - | - |
| 4) Cash and cash equivalents | 15 | 12,276 | - | 12,276 | - | - | 12,276 | 242 |
| NON-CURRENT LIABILITIES | ||||||||
| 5) Bank borrowings | 17 | 26,898 | - | - | - | 26,898 | 26,898 | (1,725) |
| 6) Other financial liabilities | 18 | 2,001 | - | - | - | 2,001 | 2,001 | (96) |
| 7) Other non current liabilities | 22 | 55 | - | - | 55 | 55 | ||
| CURRENT LIABILITIES | ||||||||
| 8) Bank borrowings | 23 | 82,894 | - | - | - | 82,894 | 82,894 | (1,559) |
| 9) Trade payables | 24 | 36,160 | - | - | - | 36,160 | 36,160 | (2) |
| 10) Other financial liabilities | 26 | 22,150 | - | - | - | 22,150 | 22,150 | (1,197) |
| 11) Other current liabilities | 29 | 20,549 | - | - | - | 20,549 | 20,549 | |
| (a) Fair value at the recognition date |
As shown in the above tables, the carrying value of financial assets and liabilities is a reasonable approximation of their fair value; most of the financial instruments are current investments and borrowings and where non-current instruments have been used these have not been subject to significant contingent charges.
These are classified in Level 3 of the fair value hierarchy under IFRS 13.
The main financial instruments of the Group are bank borrowings, current accounts and current financial loans from the controlling shareholder Fondazione Fiera Milano.
Fiera Milano Group has a favourable cash management cycle due to the financial nature of the companies that organise exhibitions and congresses. The organisers of exhibitions and congresses request a pre-payment from their clients as confirmation of their participation at an event and the balance is usually received before the event is held or at its conclusion. Suppliers of goods and services are paid under the payment terms generally used. This generates negative working capital for the organisers, which gives a cash surplus.
Fiera Milano SpA, the Parent Company, which in turn rents the exhibition space to the organisers, carries out administrative and cash management services for the organisers, receiving on behalf of the latter everything that the exhibitors pay the organiser. After receiving the cash, Fiera Milano SpA, depending on the contractual agreements, retrocedes to the organiser what is its due and keeps the payment for the space rented out in the exhibition venues and for the services provided. This also allows Fiera Milano SpA to receive its payments in advance, as it does the organisers. Therefore, within Fiera Milano Group, those companies that benefit from this favourable cash management cycle are the companies that organise exhibitions and the Parent Company.
The situation is different for the companies in the Stand-fitting Services and Media segments where the cash management cycle is typical of that of a company that manufactures and supplies goods and services. They generate working capital requirements which are met by recourse to bank borrowings.
The exposure of the Group to different types of risk is as follows.
Credit risk is represented by Group exposure to potential losses from the non-fulfilment of obligations undertaken by counterparties. Credit risk is adequately monitored and also that pertaining to the cash management which characterises the business of the Group. Fiera Milano hosts and organises exhibitions that are leaders in their sector and, therefore, the loyalty of exhibitors is high. For the Parent Company, Fiera Milano SpA, the current system means that all receipts from exhibitors flow into the Fiera Milano SpA accounts and it is Fiera Milano SpA that retrocedes to its clients/organisers the amounts due them.
As regards the companies operating in the Stand-fitting Services and Media segments, part of the services supplied to exhibition organisers is invoiced and received on behalf of the individual Group companies by Fiera Milano SpA. In all cases the companies of the Stand-fitting Services and Media segments carry out the normal solvency checks on potential clients and any amount due is constantly monitored by the relevant departments in order to implement any recovery action deemed necessary.
Three different categories of credit risk have been identified: organisers, exhibitors and other receivables.
The first category is the exhibition organisers; the receivables included in this category are considered to represent the lowest risk as the Parent Company, Fiera Milano SpA, manages the cash flows of all the exhibitions at the two sites. The provisions for doubtful receivables are minimal in comparison to the amounts received and have mainly been made because the current credit environment appears to indicate that their recovery will prove difficult.
The second risk category is the exhibitors; the receivables from this category are considered medium risk as exhibitors normally have to make payment before the end of the exhibition.
The third risk category is other receivables, which mainly comprises exhibition-related activities (stand-fitting, congresses, promotions, internet services) and activities that are not exhibitionrelated (sponsorship, advertising, etc.). These receivables are payable under normal payment conditions.
In some cases the Group will ask for bank guarantees as a further means of minimising credit risk.
The categories of credit risk at 31 December 2013 and at 31 December 2014 and the breakdown of overdue payments are shown in the following tables:
| (€'000) | FY | Breakdown of late payments (days) | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Class | 31/12/2013 Receivables |
Due | Overdue | 0-90 | 91-180 | 181-270 | >270 | Provision | |
| Organisers | 6,593 | 3,178 | 4,537 | 3,820 | 17 | 53 | 647 | 1,122 | |
| Exhibitors | 18,512 | 2,373 | 18,334 | 13,552 | 555 | 698 | 3,529 | 2,195 | |
| Other | 20,148 | 9,203 | 16,895 | 8,969 | 723 | 775 | 6,428 | 5,950 | |
| Total | 45,253 | 14,754 | 39,766 | 26,341 | 1,295 | 1,526 | 10,604 | 9,267 |
| (€'000) | FY 31/12/2014 |
Breakdown of late payments (days) | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Class | Receivables | Due | Overdue | 0-90 | 91-180 | 181-270 | >270 | Provision | |
| Organisers | 5,611 | 2,280 | 4,686 | 1,756 | 426 | 141 | 2,363 | 1,355 | |
| Exhibitors | 15,735 | 317 | 17,341 | 12,349 | 844 | 632 | 3,516 | 1,923 | |
| Other | 16,607 | 10,097 | 12,321 | 4,262 | 871 | 543 | 6,645 | 5,811 | |
| Total | 37,953 | 12,694 | 34,348 | 18,367 | 2,141 | 1,316 | 12,524 | 9,089 |
The provision for doubtful receivables is based on presumed recoverability, using internal assessments supported by those of external legal consultants.
The category of receivables that exceed 270 days increased due to doubtful receivables which have already been discounted and that, in previous financial years, were in the category of 0-90 days overdue.
Changes in the provision for doubtful receivables at 31 December 2013 and 31 December 2014 with a breakdown by risk category are given in the following table:
| (€'000) Class |
Balance at 31/12/2012 Provision |
Provisions | Utilisation | Other changes | Balance at 31/12/2013 Provision |
|---|---|---|---|---|---|
| Organisers | 1,678 | 181 | 737 | - | 1 ,122 |
| Exhibitors | 2,302 | 447 | 553 | - | 2 ,195 |
| Other | 6,046 | 1 ,069 |
1 ,054 |
(112) | 5,950 |
| Total | 10,026 | 1,697 | 2,344 | (112) | 9,267 |
| (€'000) Class |
Balance at 31/12/2013 Provision |
Provisions | Utilisation | Other changes | Balance at 31/12/2014 Provision |
|---|---|---|---|---|---|
| Organisers | 1,122 | 233 | - | - | 1 ,355 |
| Exhibitors | 2,195 | 402 | 674 | - | 1 ,923 |
| Other | 5,950 | 795 | 946 | 12 | 5 ,811 |
| Total | 9,267 | 1,430 | 1,620 | 12 | 9,089 |
Although the Group has taken measures to ensure that it has adequate levels of working capital and liquidity, a drop in the volumes of business caused be the seasonality and cyclicality that characterise the exhibition business can affect the financial results and its cash flow generation ability.
Financial requirements are normally affected both by seasonality from one financial year to the next and within one financial year caused by the exhibition calendar and by higher cash absorption in the summer months of July and August with a gradual return to more normal levels for the Group in subsequent months. Moreover, the significant losses generated in the 2014 and 2013 financial periods have resulted in a substantial decrease in equity causing an imbalance in the ratios of net debt and the Parent Company now finds itself in the situation under Article 2446 of the Italian Civil Code.
As already described in Note 30, the level of indebtedness at 31 December 2014 increased compared to the end of the previous financial year and went from Euro 101.825 million to Euro 121.667 million mainly due to the trend in operating cash flows and the unfavourable exhibition calendar in the financial year under review. The higher level of debt mainly reflects an increase in short-term bank borrowing.
The aim of risk management at Fiera Milano SpA is to guarantee an adequate level of liquidity, minimising the opportunity cost and maintaining a balance in terms of the duration and composition of debt. Over the years, the Parent Company, in order to cover the investments made, has taken out a series of loans of two to five years that have decreased current bank borrowings in favour of non-current bank borrowings.
The Parent Company reasonably expects to continue this strategy in the 2015 financial period to cover its financial requirements that also stem from the expiry of some bank loans in the course of the current financial year.
As described in Note 17, some of the loans received by the Parent Company are governed by financial covenants that are assessed annually; the next assessment of the financial ratios will take place in 2015 as, during 2014, the financial institutions that provided the loans agreed to redefine the terms of the existing agreements and to postpone the need to meet the required financial ratios.
Moreover, in January 2015, as part of the measures to meet cash requirements, the Parent Company agreed a current loan of Euro 15.000 million governed by financial covenants that involve certain financial ratios being met on both a six-monthly and an annual basis. Loans made by financial institutions, together with the operating cash flow, are considered to provide an adequate level of liquidity to meet financial requirements in the short-term although it cannot be excluded that there will be peaks of cash absorption particularly in the summer months when no exhibitions are held.
Steps have already been taken also to achieve the primary aim of a more balanced level of noncurrent debt despite the forecast for a high level of current debt also in the 2015 financial year. It is reasonable to expect that this initiative that follows similar ones in previous financial periods could involve a further change in the financial covenants mentioned above.
In the absence of extraordinary transactions, maintaining the financial equilibrium of the Group is linked to attaining targets of the Industrial Plan as well as to the performance of the economy, forecasts for which necessitate an assessment of the outcome of future events and circumstances that by their very nature are uncertain.
The tables below give the breakdown of financial liabilities and their duration and the outstanding interest payable to maturity at 31 December 2013 and 31 December 2014.
| Financial liabilities | Balance at | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| (€'000) | 31/12/2013 | 3 mths | 6 mths | 12 mths | 18 mths | 24 mths | 3 years | 5 years | >5 years |
| Current bank borrowings | 55,405 | 44,744 | 4,283 | 6,378 | - | - | - | - | - |
| Current interest payable | 588 | 398 | 711 | - | - | - | - | - | |
| Other current financial liabilities | 20,572 | 20,493 | - | 79 | - | - | - | - | - |
| Current interest payable | 94 | - | 8 | - | - | - | - | - | |
| Non-current bank borrowings | 34,408 | - | - | - | 6,399 | 6,468 | 10,583 | 10,958 | - |
| Non-current interest payable | - - | - | 601 | 502 | 684 | 368 | - | ||
| Trade payables | 43,830 | 43,830 | - | - | - | - | - | - | - |
| Other non-current financial liabilities | 3,491 | - | - | - | 84 | 82 | 170 | 3,155 | - |
| Non-current interest payable | - - | - | 107 | 40 | 78 | 106 | - | ||
| Total | 157,706 109,749 | 4,681 | 7,176 | 7,191 | 7,092 | 11,515 | 14,587 | - |
| Financial liabilities | Balance at | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| (€'000) | 31/12/2014 | 3 mths | 6 mths | 12 mths | 18 mths | 24 mths | 3 years | 5 years | >5 years |
| Current bank borrowings | 82,894 | 64,900 | 7,900 | 10,094 | |||||
| Current interest payable | 474 | 469 | 613 | ||||||
| Other current financial liabilities | 22,150 | 11,084 | 10,984 | 82 | |||||
| Current interest payable | 120 | 66 | 5 | ||||||
| Non-current bank borrowings | 26,898 | 9,900 | 6,114 | 8,722 | 2,162 | ||||
| Non-current interest payable | 457 | 309 | 311 | 40 | |||||
| Trade payables | 36,160 | 36,160 | |||||||
| Other non-current financial liabilities | 2,001 | 86 | 85 | 49 | 1,781 | ||||
| Non-current interest payable | 97 | 35 | 68 | 26 | |||||
| Total | 170,103 112,738 | 19,419 | 10,794 | 10,540 | 6,543 | 9,150 | 4,009 | - |
The Group reserves the right to use appropriate hedging instruments were the market risks to become significant.
Fiera Milano Consolidated Financial Statements to 31 December 2014 - Explanatory and Supplementary Notes to the Financial Statements and Attachments 186
The Group has access to credit lines at competitive rates and is able to manage interest rate fluctuations. Moreover, the Group constantly monitors market conditions so as to intervene promptly should conditions change.
Reference should be made to Notes 17 and 23 for a breakdown of current and non-current bank borrowings.
The tables below give interest rate sensitivity analyses that show the effect of a +0.5% and a - 0.5% change in interest rates on financial income and expenses in equity and the Income Statement for the 2013 and 2014 financial years.
| (€'000) | Total at 31/12/13 | Balance * (debt) |
Income (expense) | Rate +0.5% | -0.5% | |
|---|---|---|---|---|---|---|
| Current accounts | 11,285 | 13,373 | 276 | 2.06% | 342 | 209 |
| Current financial liabilities | (42,405) | (55,381) | (1,918) | 3.46% | (2,193) | (1,639) |
| Current account with the controlling shareholder Fondazione Fiera Milano |
(20,410) | (31,336) | (980) | 3.13% | (1,137) | (824) |
| Current and non-current bank borrowings | (47,408) | (33,497) | (1,076) | 3.21% | (1,243) | (908) |
| Other current and non-current financial liabilities | (3,653) | (3,728) | (106) | 2.84% | (125) | (87) |
*average for the financial year
| Balance * | ||||||
|---|---|---|---|---|---|---|
| (€'000) | Total at 31/12/14 | (debt) | Income (expense) | Rate +0.5% | -0.5% | |
| Current accounts | 12,114 | 13,939 | 242 | 1.74% | 312 | 173 |
| Short-term advances | (2,500) | (68) | (2) | 2.94% | (2) | (2) |
| Current financial liabilities | (59,524) | (47,049) | (1,490) | 3.17% | (1,727) | (1,256) |
| Current account with the controlling shareholder Fondazione Fiera Milano |
(21,683) | (39,042) | (1,183) | 3.03% | (1,378) | (988) |
| Current and non-current bank borrowings | (47,768) | (50,547) | (1,767) | 3.50% | (2,022) | (1,516) |
| Other current and non-current financial liabilities | (2,468) | (2,202) | (110) | 5.00% | (121) | (99) |
| *average for the financial year |
This was in line with the previous financial year and remains relatively insignificant, even though the Group increased its exposure to international business in 2014, and was because the Group took out no financing in foreign currencies. Furthermore, as regards the foreign activities of the Group, the exchange rate risk is relatively limited as costs and revenues are both in the exchange rate of the country of operations and are mainly due to infragroup transactions for payments for cost sharing agreements, which give rise to exchange rate risks in the company that uses a different exchange rate from that of the infragroup transaction.
The Group has limited exposure to the risk of changes in raw material prices. The Group normally has more than one supplier for any material considered critical and in some cases has long-term contracts that ensure lower price volatility.
These totalled Euro 2.392 million and were as follows:
An adverse outcome to the legal procedures in which the Group is currently involved where the result is currently uncertain could, according to the legal advice taken, result in potential costs of approximately Euro 0.800 million.
Revenues from sales and services were Euro 245.457 million (Euro 245.057 million at 31 December 2013).
The breakdown of revenues was as follows:
| Revenues from sales and services | (€'000) | ||
|---|---|---|---|
| 2014 | 2013 | Change | |
| Sales of exhibition space | 69,706 | 60,758 | 8,948 |
| Rental of stands, fittings and equipment | 47,654 | 42,058 | 5,596 |
| Exhibitor fees | 47,175 | 68,211 | (21,036) |
| Catering and canteen services | 21,973 | 21,031 | 942 |
| Revenues from exhibition and congress organisation services | 15,693 | 9,725 | 5,968 |
| Advertising space and services | 16,830 | 15,217 | 1,613 |
| Miscellaneous fees and royalties | 6,919 | 6,204 | 715 |
| Exhibition site services | 6,381 | 6,314 | 67 |
| Supplementary exhibition services | 3,538 | 4,947 | (1,409) |
| Access surveillance and customer care services | 2,503 | 2,169 | 334 |
| Exhibition insurance services | 2,284 | 2,389 | (105) |
| Administrative, telephone and internet services | 2,066 | 1,459 | 607 |
| Congress organisation | 1,183 | 1,541 | (358) |
| Ticket office sales | 942 | 1,986 | (1,044) |
| Multimedia and on-line catalogue services | 610 | 1,048 | (438) |
| Total | 245,457 | 245,057 | 400 |
The increase in revenues was mainly attributable to the use of the MiCo Congress Centre during the six-month Italian presidency of the European Union and the strong demand for exhibition space outside Italy as the biennial exhibitions Fesqua and FISP were held in Brazil. The increase was nevertheless slight because of the decline in square metres of exhibition space occupied in Italy. This was caused by the unfavourable exhibition calendar following 2013 when the biennial exhibitions TUTTOFOOD, HOST and Made Expo (which became a biennial exhibition starting from 2013) held in uneven-numbered years took place and the drop in demand for exhibition space, which particularly affected the annual directly organised exhibitions HOMI January and Bit. This trend was only partly compensated by the hosted exhibitions held in even-numbered years, Mostra Convegno Expocomfort and Xylexpo, by Lineapelle held for the first time in the fieramilano exhibition site, and by increases at some of the annual hosted exhibitions such as the Salone del Mobile and the exhibitions in the fashion sector. There was an increase in the entries for Revenues from exhibition and congress organisation services and Sales of exhibition space from the hosted biennial exhibitions held in even-numbered years while the absence of the directly organised exhibitions held in uneven-numbered years resulted in a decrease in the entry Exhibitor fees.
Revenues from sales and services included Euro 0.078 million (Euro 0.228 million at 31 December 2013) for related-party transactions. Further details on related-party transactions are given in Note 48.
These were Euro 2.440 million (Euro 3.662 million at 31 December 2013).
The breakdown was as follows:
| Cost of materials | (€'000) | ||
|---|---|---|---|
| 2014 | 2013 | Change | |
| Subsidiary materials and consumables | 1,477 | 2,529 | (1,052) |
| Printed materials, forms and stationery | 689 | 871 | (182) |
| Raw materials | 279 | 259 | 20 |
| Finished goods and packaging | 8 | 23 | (15) |
| Change in inventories of raw materials | (13) | (20) | 7 |
| Total | 2,440 | 3,662 | (1,222) |
The decrease of Euro 1.222 million mainly due to lower purchases of subsidiary materials that reflected the lower stand-fitting services sold as part of the collaboration with Expo 2015.
These totalled Euro 137.400 million (Euro 128.220 million at 31 December 2013). The breakdown was as follows:
| Cost of services | (€'000) | ||
|---|---|---|---|
| 2014 | 2013 | Change | |
| Equipment hire | 22,574 | 18,084 | 4,490 |
| Stands and equipment for exhibitions | 21,888 | 20,721 | 1,167 |
| Catering services | 17,061 | 16,678 | 383 |
| Maintenance | 10,530 | 8,493 | 2,037 |
| Technical, legal, commercial and administrative services |
9,529 | 8,569 | 960 |
| Energy costs | 9,392 | 10,000 | (608) |
| Collateral events connected to exhibitions | 7,385 | 5,300 | 2,085 |
| Security and gate services | 5,413 | 5,235 | 178 |
| Cleaning and waste disposal | 4 ,854 |
4 ,817 |
37 |
| Advertising | 3,856 | 3,415 | 441 |
| Insurance | 3,268 | 3,339 | (71) |
| Telephone and internet expenses | 2,149 | 1,932 | 217 |
| Ticketing | 1,712 | 2,001 | (289) |
| Transport | 1,529 | 1,570 | (41) |
| Technical assistance and ancillary services | 1,481 | 1,591 | (110) |
| IT services | 1,226 | 1,494 | (268) |
| Conference and congress services | 656 | 793 | (137) |
| Remuneration of Statutory Auditors | 183 | 206 | (23) |
| Expenses for statutory bodies | 128 | 121 | 7 |
| Change in suspended costs for future exhibition | (982) | (703) | (279) |
| Other | 13,568 | 14,564 | (996) |
| Total | 137,400 | 128,220 | 9,180 |
Fiera Milano Consolidated Financial Statements to 31 December 2014 - Explanatory and Supplementary Notes to the Financial Statements and Attachments 190 The entry for costs of services was mainly composed of costs for managing the exhibition sites during the setting up, running and dismantling of exhibitions and congresses.
The main changes were as follows:
The entry includes Euro 1.838 million (Euro 2.493 million at 31 December 2013) for related-party transactions. Further details on related-party transactions are given in Note 48.
This totalled Euro 57.875 million (Euro 63.062 million at 31 December 2013) and the breakdown was as follows:
| Cost of use of third-party assets | (€'000) | ||
|---|---|---|---|
| 2014 | 2013 | Change | |
| Rent and expenses for exhibition sites | 52,545 | 58,244 | (5,699) |
| Other rental expenses | 4,528 | 4,012 | 516 |
| Vehicle hire | 620 | 680 | (60) |
| Lease of company division | 140 | 39 | 101 |
| Office equipment and photocopier hire | 42 | 81 | (39) |
| Operating lease expenses and other lease expenses | - | 6 | (6) |
| Total | 57,875 | 63,062 | (5,187) |
The item, rent and expenses for exhibition sites, included the rent of Euro 52.340 million payable to the controlling shareholder Fondazione Fiera Milano, whilst other rental expenses included Euro 1.924 million under the lease agreement for the Palazzo Italia in Berlin.
The change was mainly due to the decrease in the rent payable for the fieramilano exhibition site under the new agreement. The rental payments are recognised on a straight-line basis over the length of the agreement.
The entry includes Euro 52.363 million (Euro 57.791 million at 31 December 2013) for related-party transactions. Further details on related-party transactions are given in Note 48.
These totalled Euro 49.276 million (Euro 47.587 million at 31 December 2013) and the breakdown was as follows:
| Personnel expenses | (€'000) | ||
|---|---|---|---|
| 2014 | 2013 | Change | |
| Salaries | 33,479 | 31,626 | 1,853 |
| Social Security payments | 10,480 | 9,888 | 592 |
| Defined contribution plan charges | 1,609 | 1,533 | 76 |
| Directors' remuneration | 1,418 | 1,809 | (391) |
| External and temporary employees | 906 | 753 | 153 |
| Defined benefit plan charges | 558 | 514 | 44 |
| Early retirement incentives | 101 | 661 | (560) |
| Other expenses | 725 | 803 | (78) |
| Total | 49,276 | 47,587 | 1,689 |
The breakdown of the average number of employees (including those on fixed-term contracts) was as follows:
| 2014 | 2013 | Change | |
|---|---|---|---|
| Managers Middle managers and white collar workers |
47 792 |
45 757 |
2 35 |
| of which proportionally consolidated companies: Managers Middle managers and white collar workers |
2 61 |
2 51 |
- 10 |
| Total personnel | 839 | 802 | 37 |
These were Euro 6.783 million (Euro 7.631 million at 31 December 2013) and the breakdown was as follows:
| Other operating expenses | (€'000) | ||
|---|---|---|---|
| 2014 | 2013 | Change | |
| Local taxes Doubtful receivables |
2,068 1,700 |
2,471 2,328 |
(403) (628) |
| Contributions and donations | 597 | 608 | (11) |
| Taxes other than income tax and taxes | 593 | 490 | 103 |
| Copyright royalties (SIAE) | 275 | 296 | (21) |
| Municipal tax on advertising | 272 | 276 | (4) |
| Gifts and promotional merchandise | 129 | 97 | 32 |
| Balancing item from closure of prior year exhibition accounts |
70 | 45 | 25 |
| Other expenses | 1,079 | 1,020 | 59 |
| Total | 6,783 | 7,631 | (848) |
Fiera Milano Consolidated Financial Statements to 31 December 2014 - Explanatory and Supplementary Notes to the Financial Statements and Attachments 192 The entry includes Euro 1.064 million (Euro 0.985 million at 31 December 2013) for related-party transactions. Further details on related-party transactions are given in Note 48.
This was Euro 3.531 million (Euro 5.088 million at 31 December 2013) and the breakdown was as follows:
| Other income | (€'000) | ||
|---|---|---|---|
| 2014 | 2013 | Change | |
| Office rent and expenses | 1,530 | 1,511 | 19 |
| Other recovered costs | 954 | 862 | 92 |
| Recovery of expenses for seconded employees | 281 | 304 | (23) |
| Insurance indemnities | 27 | 197 | (170) |
| Capital gains on non-current assets | 6 | 22 | (16) |
| Share of contributions to internationalisation intiative | - | 1,200 | (1,200) |
| Other income | 733 | 992 | (259) |
| Total | 3,531 | 5,088 | (1,557) |
The decrease in this item of Euro 1.557 million was mainly due to the item Share of contributions to internationalisation initiatives, which, in the previous financial year, included the one-off payment from Fondazione Fiera Milano for its share of the initiatives for the exhibition Host.
The entry includes Euro 0.307 million (Euro 1.547 million at 31 December 2013) for related-party transactions. Further details on related-party transactions are given in Note 48.
This entry totalled Euro 1.448 million (Euro 2.172 million at 31 December 2013) and was almost exclusively due to the investment in the joint venture with Deutsche Messe AG. Further details are given in paragraph 2, Disclosure on subsidiaries, joint ventures and associates.
This was Euro 6.814 million (Euro 7.484 million at 31 December 2013). Details of depreciation are given in the Notes to the Accounts under the entry Property, plant and machinery.
This item includes no depreciation of leased property, plant and equipment.
This was Euro 6.643 million (Euro 6.661 million at 31 December 2013).
Details of amortisation are given in the Notes to the Accounts under the entry Intangible assets with a finite useful life.
These were Euro 3.637 million (Euro 6.591 million at 31 December 2013).
The breakdown is given in the following table:
| Adjustments to asset values | (€'000) | ||
|---|---|---|---|
| 2014 | 2013 | Change | |
| Write-downs of Property, Plant and Equipment | 11 | 22 | (11) |
| Impairment of goodwill on acquisitions | 500 | - | 500 |
| Impairment of exhibition trademarks and publications | 3,126 | 6,569 | (3,443) |
| Total | 3,637 | 6,591 | (2,954) |
Comments on the adjustments to asset values may be found in Notes 4, 6 and 7.
These increased to Euro 1.639 million (from Euro 1.494 million at 31 December 2013). Changes in this entry are shown in the following table:
| Write down of doubtful receivables and other provisions | (€'000) | ||
|---|---|---|---|
| 2014 | 2013 | Change | |
| Write-downs of receivables | (190) | (613) | 423 |
| provisions | 1,430 | 1,693 | (263) |
| utilisation | (1,620) | (2,306) | 686 |
| Palazzo Italia project | (1,355) | 206 | (1,561) |
| provisions | - | 1,864 | (1,864) |
| utilisation | (1,355) | (1,658) | 303 |
| Personnel disputes | 45 | (20) | 65 |
| provisions | 66 | 276 | (210) |
| utilisation | (21) | (296) | 275 |
| Provisions for personnel reorganisation | - | (475) | 475 |
| provisions | - | - | - |
| utilisation | - | (475) | 475 |
| Losses on future exhibitions | (111) | (627) | 516 |
| provisions | - | 111 | (111) |
| utilisation | (111) | (738) | 627 |
| Other legal disputes | (28) | 35 | (63) |
| provisions | 161 | 171 | (10) |
| utilisation | (189) | (136) | (53) |
| Total | (1,639) | (1,494) | (145) |
Further details on changes in provisions for risks and charges are given in Notes 19 and 27.
This was Euro 0.958 million (Euro 1.125 million at 31 December 2013) and the breakdown was as follows:
| Financial income and similar | (€'000) | ||
|---|---|---|---|
| 2014 | 2013 | Change | |
| Exchange rate gains | 530 | 306 | 224 |
| Interest income from cautionary deposits related to the rent of the exhibition site |
117 | 320 | (203) |
| Interest income on bank deposits | 242 | 276 | (34) |
| Interest income on receivables from the controlling shareholder |
11 | - | 11 |
| Other financial income | 58 | 223 | (165) |
| Total | 958 | 1,125 | (167) |
This entry includes Euro 0.117 million (Euro 0.320 million at 31 December 2013) for related-party transactions. Further details on related-party transactions are given in Note 48.
These totalled Euro 5.857 million (Euro 4.970 million at 31 December 2013) and the breakdown was as follows:
| Financial expenses and similar | (€'000) | ||
|---|---|---|---|
| 2014 | 2013 | Change | |
| Interest payable on bank accounts | 3,284 | 3,016 | 268 |
| Interest payable on the current account with the controlling shareholder Fondazione Fiera Milano |
1,183 | 980 | 203 |
| Exchange rate losses | 696 | 345 | 351 |
| Charges on discounting defined benefit plans | 285 | 259 | 26 |
| Discounting of liabilities to present value | 186 | 137 | 49 |
| Other financial expenses | 223 | 233 | (10) |
| Total | 5,857 | 4,970 | 887 |
The change mainly reflected higher financial expenses due to the higher average level of debt.
This entry includes Euro 1.183 million (Euro 0.980 million at 31 December 2013) for related-party transactions. Further details on related-party transactions are given in Note 48.
The entry for taxes was positive for Euro 4.586 million (positive for Euro 4.307 million at 31 December 2013) due to deferred tax assets.
The breakdown was as follows:
| Income tax | (€'000) | ||
|---|---|---|---|
| 2014 | 2013 | Change | |
| Current income tax Deferred income tax |
482 (5,068) |
1,189 (5,496) |
(707) 428 |
| Total | (4,586) | (4,307) | (279) |
A breakdown of the current taxes at 31 December 2014 is given below:
| Current income tax | (€'000) | ||
|---|---|---|---|
| 2014 | 2013 | Change | |
| Current income tax (IRAP) | 497 | 752 | (255) |
| Other current income tax | 1,153 | 644 | 509 |
| Income from tax consolidation | (1,168) | (207) | (961) |
| Total | 482 | 1,189 | (707) |
Since the 2007 financial period, the Parent Company Fiera Milano SpA, acting as the consolidating entity, and all the Italian subsidiaries have opted for the Italian national tax consolidation for payment of IRES.
In the financial period 2004/2005, Fiera Milano SpA and some of its subsidiaries opted to be part of the tax consolidation of the controlling shareholder Fondazione Fiera Milano but, following the change in the end of the reporting period of Fiera Milano SpA and all its subsidiaries, the requirement for the financial year to agree with that of the consolidating entity meant that participation in this tax consolidation ceased. Nevertheless there still exist contractual obligations with Fondazione Fiera Milano which are referred to in the Note to the entry, provision for tax consolidation, in the Statement of Financial Position.
The Euro 1.168 million of income from the tax consolidation was the effect of offsetting the tax assets with the tax charge for the financial period of the companies within the tax consolidation.
Other current tax payables included IRES, payable as part of the tax consolidation gross of receivables from the tax consolidation, and also the current tax payables of the foreign Group subsidiaries.
At 31 December 2014, deferred taxes for the year were positive for Euro 5.068 million and comprised deferred tax assets (of Euro 3.954 million) and deferred tax liabilities (of Euro 1.114 million).
The deferred tax liabilities at 31 December 2014 were mainly for trademarks of the companies acquired and tax amortisation of goodwill in the Parent Company. Deferred tax assets reflected the recognition in profit and loss of tax losses in the year net of provisions for risks and charges, the tax deductibility of which will be recognised in future financial periods.
| 31/12/13 | Recognised in the Income Statement |
Other changes | 31/12/14 | |
|---|---|---|---|---|
| Deferred tax assets | ||||
| Excess amortisation, depreciation and write-downs | 1,198 | (298) | - | 900 |
| Provisions for risks and charges | 1,809 | (552) | - | 1,257 |
| Doubtful receivables | 2,122 | (31) | - | 2,091 |
| Tax losses carried forward | 12,770 | 4,963 | - | 17,733 |
| Other temporary differences | 291 | (128) | - | 163 |
| Total | 18,190 | 3,954 | - | 22,144 |
| Deferred tax liabilities | ||||
| Goodwill amortisation and deferred taxes on acquisition | ||||
| of intangible assets | 23,845 | (960) | - | 22,885 |
| Defined benefit plan charges | 123 | (35) | (136) | (48) |
| Other temporary differences | 116 | (119) | - | (3) |
| Total | 24,084 | (1,114) | (136) | 22,834 |
| Net deferred income taxes | 5,894 | (5,068) | (136) | 690 |
| of which: Deferred tax assets | 2,055 | 6,457 | ||
| Deferred tax liabilities | 7,949 | 7,147 |
The breakdown of total theoretical deferred taxes relating to tax losses carried forward from previous financial years was:
| Reconciliation of theoretical and effective corporation tax charge (IRES) | (€'000) |
|---|---|
| Consolidated profit/(loss) before income tax | (23,692) |
| Percentage applicable for corporation income tax (IRES) | 27.5% |
| Theoretical IRES tax charge (corporation income tax) | (6,515) |
| Difference between theoretical and effective tax charges: | |
| Taxes on intragroup dividends | 37 |
| Taxes on foreign subsidiaries | 384 |
| Non-deductible write downs | 138 |
| Non-deductible operating expenses and other | 846 |
| Effective IRES tax charge | (5,110) |
| Reconciliation of theoretical and effective corporation tax charge (IRAP) | (€'000) |
| Net operating result (EBIT) | (18,793) |
| Personnel expenses | 49,276 |
| Consolidated taxable base for purposes of IRAP | 30,483 |
| Statutory rate applicable for corporation income tax (IRAP) | 3.9% |
| Theoretical IRAP tax charge (corporation income tax) | 1,189 |
| Difference between theoretical and effective tax charges: | |
| Tax wedge | (625) |
| Non-deductible write downs | 20 |
| Taxes on foreign subsidiaries | (75) |
| Non-deductible operating expenses and other | 15 |
| Effective IRAP tax charge | 524 |
At 31 December 2014, the Group made a net loss of Euro 18.955 million, compared to a net loss of Euro 16.498 million at 31 December 2013.
In the 2014 financial year, the loss per share was Euro 0.4565 compared to a loss of Euro 0.3973 per share at 31 December 2013; the figure was calculated by dividing the net result for the period by the average weighted number of Fiera Milano SpA shares in circulation during the financial year.
| 2014 | 2013 | |
|---|---|---|
| Profit/(loss) (€'000) | (18,955) | (16,498) |
| Average no. of shares in circulation ('000) | 41,521 | 41,528 |
| Basic earnings/(losses) per issued share (€) | (0.4565) | (0.3973) |
| Earnings/(losses) per fully diluted no. of shares (€) | (0.4565) | (0.3973) |
The number used as the numerator to calculate basic earnings/ losses per share and diluted earnings/ losses per share was a loss of Euro 18.955 million in the financial year to 31 December 2014 (a loss of Euro 16.498 million at 31 December 2013).
The average weighted number of ordinary shares used to calculate basic earnings/ losses per share and diluted earnings/ losses per share, and the relative reconciliation of the two figures, was the following:
| ('000) | 2014 | 2013 |
|---|---|---|
| Weighted average no. of shares used for calculation of EPS | 41,521 | 41,528 |
| + Potential no. of shares issued without payment | - | - |
| Weighted average no. of shares used to calculate diluted EPS | 41,521 | 41,528 |
In the financial year under review, no equity instruments were issued, including shares that could potentially be issued, that could dilute future basic earnings per share and, since the end of the reporting period, no transactions involving the ordinary shares or the potential issue of ordinary shares has been concluded.
The companies that are part of Fiera Milano Group carried out transactions at market conditions with Group companies and with other related parties.
As part of its corporate governance, Fiera Milano SpA has adopted the Principles of Conduct regarding Related-party Transactions as described in the Report on corporate governance and ownership structure, which is part of the Board of Directors' Management Report in the Financial Statements.
Commercial transactions concern the organisation and management of exhibitions and other events managed by the Group. Fiera Milano SpA provides administrative services to some subsidiaries, with the aim of optimising the use of professional resources and competencies, and also communication services in order to ensure the uniformity of the Group image.
All the Italian subsidiaries, the consolidated companies, opted for the Italian tax consolidation procedure for IRES, which has a mandatory duration of three financial years.
The tax consolidation procedure gives Fiera Milano Group a definite economic and financial benefit, particularly in allowing the immediate use of the tax losses of the Group generated in the financial years in which the option is available, to offset the profits of the consolidated companies, giving an immediate tax saving.
The legal relationships among the companies involved in the tax consolidation process are governed by a rule that imposes a uniform process for correct fulfilment of the fiscal requirements and related responsibilities by the companies involved.
In the Statement of Financial Position and the Income Statement, the amounts for related-party positions or transactions, if material, are shown separately. Given the total amount of statement of financial position and income statement items, the Group has decided that Euro 2.000 million is the material threshold above which separate disclosure must be made for equity items and Euro 1.000 million for economic items.
Detailed information on transactions is given below with different sections covering related-party transactions with the controlling shareholder Fondazione Fiera Milano and other related-party transactions that are not consolidated.
Recurring transactions are summarised below.
As described below, on 31 March 2014 new lease agreements were signed for the exhibition sites of Rho and Milan. These contracts were effective from the second semester of 2014.
On 18 January 2003, Fiera Milano SpA signed a lease agreement with Fondazione Fiera Milano for the Rho exhibition site. The same agreement established the terms of the lease for the downtown site, giving an effective date of 1 January 2006 in the contracts for both exhibition areas. The lease agreement for both exhibition areas was, therefore, for nine years effective from 1 January 2006 (the date on which Fiera Milano SpA took possession of the Rho Exhibition Site). Cancellation of the contracts had to be notified eighteen months prior to the expiry of the contracts on 31 December 2014.
On 13 May 2013, the Board of Directors agreed a proposal put forward by the controlling shareholder Fondazione Fiera Milano to change the terms of the rental contracts for the exhibition sites of Rho and Milan by extending the period for cancelling the lease agreement from 30 June 2013 to 31 October 2013. Subsequently, further proposals to extend the period to 14 March 2014 were approved. On 31 March 2014 new rental agreements for the exhibition sites of Rho and Milan were signed. The new rental agreements have are for nine years effective from 1 July 2014 (following the agreed early termination of the existing lease agreements due to expire on 31 December 2014) and may be automatically renewed for a further nine years.
As regards the rental agreement for the Rho exhibition site, compared to the previous agreement that was valid until 30 June 2014, the rent was reduced by Euro 2.000 million in the second semester of 2014 and by Euro 14.000 million for the full-year 2015 and for each subsequent year of the agreement. Therefore, the rent was Euro 24.400 million for the second semester of 2014 and Euro 38.800 million from 2015 and for each subsequent year of the agreement annually adjusted for 100% of the change in the ISTAT consumer price index. Because of Expo 2015, which is expected to have a positive impact on the exhibition business of Fiera Milano, for 2015 alone Fondazione Fiera Milano will be paid an additional rent based on any revenues generated in 2015 by Fiera Milano SpA that exceed the average annual revenues of the three-year period 2012-2014. Fiera Milano SpA will pay a supplementary rent equal to 15% of the additional revenues generated by Fiera Milano SpA up to a maximum amount of Euro 10.000 million.
For the Milan exhibition site, the parties agreed to maintain the current rent of Euro 2.850 million per annum, annually adjusted for 100% of the change in the ISTAT consumer price index.
A sum of Euro 10.412 million was also paid as a guarantee deposit; this sum is equivalent to the combined standard quarterly rent on the two exhibition sites. To simplify the agreement between the parties, it was decided that the debt payable by Fiera Milano for the new guarantee deposit would be offset by the credit it had for the right to repayment by Fondazione Fiera Milano of the guarantee deposit of Euro 12.784 million paid for the two previous rental agreements. The balance of Euro 2.372 million will be repaid by Fondazione Fiera Milano through a reduction of Euro 0.132 million on the amount payable by Fiera Milano to Fondazione Fiera Milano for each six-monthly rental payment up to the value of the aforementioned residual amount.
The transaction is a transaction of greater importance under Article 5 of Consob Regulation no. 17221 of 2010 on related-party transactions and of Article 10.2 of the Procedure regarding transactions with related parties adopted by Fiera Milano as it exceeds the materiality thresholds contained therein. As Fiera Milano qualifies as a "small and mid cap company", as defined in Article 3, first paragraph, letter (f) of the Consob Regulation, the Company could have availed itself of the exemption permitted under Article 10, paragraph 1 of the same Regulation and could therefore have applied to a transaction of greater importance (such as the one described above) the procedures for transactions of lesser importance. However, because of the highly sensitive nature of the transaction and its importance to the corporate activities of the Company, the Board of Directors of Fiera Milano SpA, on the suggestion of the Control and Risk Committee, chose to employ for this transaction the more rigorous procedures required for transactions of greater importance.
To ensure that market conditions applied, the rental agreements were prepared also taking account of valuations done by the independent expert Jones Lang LaSalle S.p.A. acting for Fiera Milano SpA.
On 24 January 2000, Fondazione Fiera Milano signed a contract with Fiera Milano Congressi SpA, valid until 31 December 2012, relating to the availability of part of Pavilion 17 (equal to about 15,000 square metres of gross exhibition space) within the downtown site. This area was granted for the use of Fiera Milano Congressi SpA at no charge until 31 December 2002 (in view of the substantial restructuring operations carried out by Fiera Milano Congressi on the aforementioned area) while, since 1 January 2003, Fiera Milano Congressi SpA has paid an annual rent determined as a percentage of revenues, excluding revenues from activities conducted outside the downtown site.
On 15 March 2005, this contract was updated to reflect the expansion of the congress centre activities hosted in Pavilion 17 of the downtown site. The new agreement between the controlling shareholder Fondazione Fiera Milano and Fiera Milano Congressi SpA was valid until 30 June 2011 and renewable until 30 June 2017. At the first lease expiry date, the cancellation option, which expired on 30 June 2011, was not exercised. Under the new agreement, Fiera Milano Congressi SpA pays a fixed annual rent to which is added a variable portion that is dependent on achieving a specified level of revenues.
On 18 May 2009, Fondazione Fiera Milano signed a preliminary contract with Fiera Milano Congressi SpA for the use of Pavilions 5 and 6 within the downtown site; this area was used to build the new congress centre, called MiCo – South Wing, which was inaugurated in May 2011 and which is integrated with the congress areas of Pavilion 17 and called MiCo – Milano Congressi.
The final lease agreement for the area known as MiCo – Milano Congressi South Wing (the former pavilions 5 and 6) was agreed in 2012 and is effective for nine years with the initial period running from 1 May 2011 (the date on which Fiera Milano Congressi SpA took charge of the new congress centre). The contract is automatically renewed for a further nine years unless terminated by one of the parties. The full annual rent was fixed at Euro 3.000 million with a variable component of 5% of the excess revenues realised by Fiera Milano Congressi SpA in the centre compared to the revenue targets in its 2011–2014 industrial plan.
The rent is adjusted annually by an amount equal to 100% of the change in the ISTAT index reported for the previous year. Under the contract there was a reduction in the full rent for the first
four years of the contract. The rent for the first year was fixed at Euro 0.750 million with the rent rising annually by Euro 0.750 million in the following three years to reach the agreed full rent of Euro 3.000 million.
Taking advantage of the facility provided by Presidential Decree (DPR) 633/72, from 1 January 2002, Fiera Milano SpA chose to follow the procedures, managed by the controlling shareholder, Fondazione Fiera Milano, for settlement of Group VAT. This mechanism makes it easier to settle any tax obligations, without the Company incurring additional costs.
In the financial year 2004/2005, Fiera Milano SpA and several of its subsidiaries opted to participate in the tax consolidation of the controlling shareholder Fondazione Fiera Milano. Following the change in the accounting year-end of Fiera Milano SpA and all its subsidiaries, participation in this tax consolidation ceased. However there remain certain contractual obligations to Fondazione Fiera Milano which are referred to in the Notes to the Financial Statements.
Fiera Milano SpA has an annual contract with Fondazione Fiera Milano for the reciprocal provision of services, which arise from or are necessary for the exercise of their respective activities. The contract is renewable annually unless cancelled by a written agreement between the parties.
The contract provides for the reciprocal supply between the Parent Company and Fondazione Fiera Milano of two kinds of services: i) services of a general nature, which fall within the range of activities of the entity providing them, supplied to the buyer on a continuous and systematic basis; ii) specific services, or services provided on request and relating to specific activities to be agreed from time to time between the buyer and the supplier, also on the basis of appropriate offers/estimates. The service supply contract is governed by market conditions.
On 17 December 2001, Fondazione Fiera Milano, as owner of the "Fiera Milano" brand name granted Fiera Milano SpA an exclusive licence for the use of the said brand name in order to typify its own activities, also through its use on headed paper, on its commercial material, and to differentiate its headquarters and offices. The licence has been granted for Italy and all countries and locations where the brand name has been or will be registered or lodged.
The symbolic consideration paid by Fiera Milano SpA to Fondazione Fiera Milano was Euro 1.0. Fondazione Fiera Milano, having as its corporate objective the development of the exhibition sector, has maintained Fiera Milano as part of its name and did not include it in the business division "Exhibition Management Activity" contributed to the Parent Company in 2001, but with the expectation that Fiera Milano SpA would use the said brand name for an extended period of time and without incurring further costs for its use.
It should be noted that this licence is valid until 31 December 2017, with automatic renewal for a further fifteen years, unless cancelled by one of the parties.
The parties settle receipts and payments under the contracts existing between them through a current account on which interest is paid at market rates.
These are transactions carried out in pursuit of normal operations and regulated by market conditions.
The financial, capital and economic transactions conducted with related parties are shown in the following table.
| Related party entries in the Statement of Financial Position and Income Statement in the financial year to 31 December 2014 (€'000) |
||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Trade and other non current receivables |
Trade and other receivables |
Other non current financial liabilities |
Other current financial liabilities |
Other current liabilities |
Revenues from sales and services |
Cost of services |
Cost of use of third party assets |
Other operating expenses |
Other income |
Financial income and similar |
Financial expenses and similar |
|
| Controlling shareholder | ||||||||||||
| and other Group companies | ||||||||||||
| Fondazione Fiera Milano | 12,389 | 6,656 | 21,683 | 4,128 | 78 | 1,225 | 52,340 | 1,064 | 307 | 127 | 1,183 | |
| Other related parties | ||||||||||||
| Christine Cashmore | 300 | |||||||||||
| Yilong QI | 1,781 | |||||||||||
| Cipa Publicaçoes - | ||||||||||||
| Graphic services | 177 | |||||||||||
| Cipa Publicaçoes - | ||||||||||||
| Rent/Lease contract | 23 | |||||||||||
| Nextur Ltda - Travel agency | 93 | |||||||||||
| Separ A.Ş. | 139 | 343 | ||||||||||
| Total related parties transactions | 12,389 | 6,795 | 1,781 | 21,983 | 4,128 | 78 | 1,838 | 52,363 | 1,064 | 307 | 127 | 1,183 |
| Total reported | 13,275 | 50,604 | 2,001 | 22,150 | 20,549 | 245,457 | 137,400 | 57,875 | 6,783 | 3,531 | 958 | 5,857 |
| % Rel. party transactions/Total reported | 93% | 13% | 89% | 99% | 20% | - | 1% | 90% | 16% | 9% | 13% | 20% |
Information on the remuneration paid to the Administrative and Control Bodies, to the General Directors and to the Executives with Strategic Responsibilities in the financial year to 31 December 2014 is given in the table included in the section below on other information.
| (€'000) | |||
|---|---|---|---|
| Statement of related party cash flow | 2014 | 2013 | |
| Cash flow from operating activities | |||
| Revenues and income | 385 | 1,775 | |
| Costs and expenses | (55,265) | (61,269) | |
| Interest receivable | 127 | 320 | |
| Interest payable | (1,183) | (980) | |
| Changes in trade and other receivables | (4,010) | (455) | |
| Change in trade and other payables | 1,171 | 1,366 | |
| Total | (58,775) | (59,243) | |
| Cash flow from investment activities | |||
| Investments in non-current activities | |||
| . Tangible and intangible | - | - | |
| . Other non-current assets | - | - | |
| Total | - | - | |
| Cash flow from financing activities Change in financial (assets)/liabilities |
816 | 21,641 | |
| Total | 816 | 21,641 | |
| Cash Flow in the period | (57,959) | (37,602) | |
| The table below shows cash flow from related party transactions: | |||
| Cash flow from | Cash flow from | Cash flow from | |
| operating activities | investing activities | ||
| FY to 31.12.14: | financing activities | ||
| Total Related party transactoins |
(9,861) (58,775) |
(9,122) - |
19,276 816 |
| FY to 31.12.13: Total |
1,426 | (9,683) | 10,041 |
Given the total amount of Statement of Financial Position and Income Statement items, the Group has decided that Euro 2 million is the material threshold above which separate disclosure must be made.
In the financial year under review there were no non-recurring transactions.
In accordance with Consob Communication of 28 July 2006, it should be noted that the Group did not carry out any unusual and/or atypical operations in 2014 as defined in the aforementioned Communication.
On 26 February 2015, the Parent Company signed an agreement with the minority shareholder of Fiera Milano Exhibitions Africa Pty Ltd for the acquisition of its 15% shareholding in the company for a sum of 3.945 million South African rand (Euro 0.300 million3 ). Transfer of ownership of the shareholding and payment for the transaction will take place simultaneously when the foreign exchange controls required by the South African authorities have been completed. Following this transaction, the Parent Company's shareholding moves from 85% to 100%
Executives with strategic responsibilities are those that have the power and responsibility, both direct and indirect, for the planning, management and control of Group activities.
Within the Parent Company, the following have been identified as Executives with strategic responsibilities: the Directors, the Statutory Auditors and the members of the Steering Committee.
For subsidiaries, the Executives with strategic responsibilities are the Managing Directors, Sole Directors and executive managers.
The total remuneration for this category of Executives was Euro 4.568 million at 31 December (Euro 3.780 million at 31 December 2013) and the breakdown was as follows:
| (€'000) | |||
|---|---|---|---|
| Remuneration | 2014 | ||
| Directors | Auditors | Others | |
| Short-term benefits | 1,817 | 156 | 2,060 |
| Post-employment benefits | 10 | - | 121 |
| Other non current benefits | - | - | - |
| Staff-leaving indemnities | 404 | - | - |
| Notional income from stock option plans | - | - | - |
| Total | 2,231 | 156 | 2,181 |
3 Figures in Euro have been translated using the exchange rate on 24 February 2015 (EUR/ZAR = 13.149)
Fiera Milano Consolidated Financial Statements to 31 December 2014 - Explanatory and Supplementary Notes to the Financial Statements and Attachments 205
| Remuneration | 2013 | ||
|---|---|---|---|
| Directors | Statutory Auditors |
Others | |
| Short-term benefits | 1,982 | 130 | 1,534 |
| Post-employment benefits | 31 | - | 103 |
| Other non current benefits | - | - | - |
| Staff-leaving indemnities | - | - | - |
| Notional income from stock option plans | - | - | - |
| Total | 2,013 | 130 | 1,637 |
At 31 December 2014, the residual amount payable to this category was Euro 0.196 million (Euro 0.269 million at 31 December 2013).
The following table shows the fees paid to the independent audit firm for services provided in the 2014 financial year.
| (€'000) | |||
|---|---|---|---|
| Service provider | Client | Fees for financial year 2014 |
|
| Auditing | Reconta Ernst & Young | Parent Company - Fiera Milano SpA | 189 |
| Subsidiaries | 161 | ||
| Other services | Reconta Ernst & Young | Parent Company - Fiera Milano SpA | 29 * |
| Subsidiaries | 14 * |
||
| Subsidiaries | ** 22 |
||
| Total | 415 |
* Agreed procedures
**Other professional services related to enviroment, health and safety
Rho (Milan), 20 March 2015
For the Board of Directors The Chairman Michele Perini
| List of companies included in the area of consolidation and other equity investments at 31 December 2014 | Attachment 1 | |||||
|---|---|---|---|---|---|---|
| Shareholding % | Directly | Indirectly | Shareholding of Group companies | |||
| Share capital | Group | held by Fiera |
held through other Group |
|||
| Company name and registered office | Main activity | (000) (*) | total | Milano | companies | % |
| A) List of companies included in the area of consolidation | ||||||
| Parent Company | ||||||
| Fiera Milano SpA | Organisation and | |||||
| Milan, p.le Carlo Magno 1 | hosting of exhibitions | 42,147 | ||||
| Fully consolidated companies | ||||||
| Fiera Milano Media SpA | ||||||
| Milan, p.le Carlo Magno 1 | Media services | 2,803 | 100 | 100 | 100 Fiera Milano SpA | |
| Fiera Milano Congressi SpA | Conferences and | |||||
| Milan, p.le Carlo Magno 1 | special events | 2,000 | 100 | 100 | 100 Fiera Milano SpA | |
| Nolostand SpA | ||||||
| Milan, p.le Carlo Magno 1 | Stand fitting services | 7,500 | 100 | 100 | 100 Fiera Milano SpA | |
| Eurofairs International Consultoria e Participações Ltda | ||||||
| São Paulo Brasil, | Exhibitions and other | 99.98 Fiera Milano SpA |
||||
| na Avenida Angélica, nº 2350, Sala B, Consolação, | events outside of Italy | R \$ 36,014 | 100 | 99.98 | 0.02 | 0.02 Nolostand SpA |
| CIPA Fiera Milano Publicações e Eventos Ltda | Exhibitions and other | Eurofairs International | ||||
| São Paulo Brasil, Av. Angelica | events outside of Italy | R \$ 941 | 75 | 75 | 75 Consultoria e Participações Ltda |
|
| Fiera Milano India Pvt Ltd | Exhibitions and other | |||||
| New Delhi, Barakhamba Road, Connaught Place | events outside of Italy | INR 20,000 | 99.99 | 99.99 | 99.99 Fiera Milano SpA | |
| Limited Liability Company "Fiera Milano" | Exhibitions and other | |||||
| Moscow, 24 A/1 ul. B. Cherkizovskaya | events outside of Italy | RUB 10,000 | 100 | 100 | 100 Fiera Milano SpA | |
| Fiera Milano Interteks Uluslararası Fuarcılık A.Ş. | Exhibitions and other | |||||
| Istanbul, Mim Kemal Öke Cd No 6 Nişantaşı | events outside of Italy | TRY 1,308 | 60 | 60 | 60 Fiera Milano SpA | |
| Fiera Milano Exhibitions Africa Pty Ltd | Exhibitions and other events outside of Italy |
|||||
| Cape Town, The Terraces, Steenberg Office Park, Tokai | ZAR 100 | 85 | 85 | 85 Fiera Milano SpA | ||
| Worldex (China) Exhibition & Promotion Ltd | Exhibitions and other | |||||
| Guangzhou, 538 Dezheng Bei Road, Yuexiu District | events outside of Italy | CNY 5,380 | 75 | 75 | 75 Fiera Milano SpA | |
| Haikou Worldex Milan Exhibition Co. Ltd | Exhibitions and other events outside of Italy |
|||||
| Haikou, 12 Lantian Road West | CNY 200 | 74.25 | 99 | 99 Worldex Ltd | ||
| B) List of jointly controlled companies equity-accounted | ||||||
| Hannover Milano Global Germany GmbH | Exhibitions and other | |||||
| Hannover Germany, Messegelaende | events outside of Italy | 49 25 | 49 | 49 Fiera Milano SpA | ||
| Hannover Milano Fairs Shanghai Co. Ltd | Exhibitions and other | Hannover Milano Global | ||||
| Shanghai China, Pudong Office Tower | events outside of Italy | USD 500 | 49 | 100 | 100 Germany GmbH |
|
| Hannover Milano Fairs China Ltd | Exhibitions and other | Hannover Milano Global | ||||
| Hong Kong China, Golden Gate Building | events outside of Italy | HKD 10 | 49 | 100 | 100 Germany GmbH |
|
| Hannover Milano Fairs India Pvt Ltd | Exhibitions and other | Hannover Milano Global | ||||
| East Mumbai, Andheri | events outside of Italy | INR 274,640 | 48.99 | 99.99 | 99.99 Germany GmbH |
|
| Global Fairs & Media Private Ltd | Exhibitions and other | Hannover Milano Fairs India | ||||
| New Delhi, Bahadur Shah Zafar Marg 9-10 | events outside of Italy | INR 207,523 | 24.5 | 50 | 50 Pvt Ltd |
|
| Milan International Exhibitions Srl under liquidation | ||||||
| Rho, S.S.Sempione 28 | Other | 120 | 20 | 20 | 20 Fiera Milano SpA |
|
| C) List of companies accounted at cost | ||||||
| Shareholding % | Directly | Indirectly | Shareholding of Group companies | |||
| held by | held through | |||||
| Company name and registered office | Share capital (000) (*) |
Group total |
Fiera Milano |
other Group companies |
% | |
| Esperia SpA | ||||||
| Rose (Cosenza) | Other | 1,403 | 2 | 2 | 2 Fiera Milano Media SpA | |
| Uktas Uluslararasi Kongre Sarayi Tesisleri Isletmeciligi Tic. A.Ş. | Fiera Milano Interteks | |||||
| Istanbul | Other | TRY 17,700 | 0.07 | 0.07 | 0.07 Uluslararası Fuarcılık A.Ş. |
|
| (*) Euro or other currencies as specifically indicated |
20 March 2015
Signed Signed
Chief Executive Officer Manager responsible for preparing the Enrico Pazzali Company's financial statements Flaminio Oggioni
Summary of key figures of the last financial statements of subsidiaries and associates included in the area of consolidation
| notes Fiera Milano SpA Statement of Financial Position | 31/12/14 | 31/12/13 | |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| 2-42 | Property, plant and equipment | 4,818,631 | 6,894,360 |
| Leased property, plant and equipment | - | - | |
| Investments in non-core property | - | - | |
| 3 | Goodwill and intangible assets with an indefinite useful life | 70,144,099 | 70,144,099 |
| 4-42 | Intangible assets with a finite useful life | 18,266,780 | 21,306,730 |
| 5 | Investments | 81,066,973 | 94,887,199 |
| Other financial assets | - | - | |
| 6 | Trade and other receivables | 13,270,692 | 13,857,107 |
| 42 | of which from related parties | 12,388,585 | 12,783,813 |
| 7 | Deferred tax assets | 6,338,217 | 2,172,434 |
| Total | 193,905,392 | 209,261,929 | |
| Current assets | |||
| 8 | Trade and other receivables | 38,754,134 | 40,429,806 |
| 42 | of which from related parties | 9,164,681 | 6,451,987 |
| 9-42 | Inventories | 4,466,326 | 2,754,441 |
| Contracts in progress | - | ||
| 10 | Current financial assets | 2,724,827 | 2,144,518 |
| 42 | of which from related parties | 2,724,827 | 2,144,518 |
| 11 | Cash and cash equivalents | 3,563,919 | 5,920,621 |
| Total | 49,509,206 | 51,249,386 | |
| Assets held for sale | |||
| Assets held for sale | - | ||
| Total | - | ||
| Total assets | 243,414,598 | 260,511,315 | |
| EQUITY AND LIABILITIES | |||
| 12 | Equity | ||
| Share capital Share premium reserve |
41,520,679 1,783,076 |
41,520,679 14,446,759 |
|
| Revaluation reserve | - | - | |
| Other reserves | 9,285,020 | 9,285,020 | |
| Retained earnings | (179,063) | (12,053) | |
| Profit/(loss) for the year | (30,674,121) | (12,663,683) | |
| Total | 21,735,591 | 52,576,722 | |
| Non-current liabilities | |||
| Bonds in issue | - | ||
| 13 | Bank borrowings | 26,898,253 | 33,954,335 |
| Other financial liabilities | 220,113 | 384,920 | |
| 14 | Provision for risks and charges | 1,422,479 | |
| 15 | |||
| 16 | Employee benefit provisions | 6,208,936 | |
| Deferred tax liabilities | - | ||
| 17 | Other non-current liabilities | - | |
| Total | 34,749,781 | ||
| Current liabilities | |||
| Bonds in issue | - | ||
| 18 | Bank borrowings | 79,561,530 | |
| 19 | Trade-payables | 22,016,420 | |
| 20-42 Pre-payments | 34,843,342 | ||
| 21 | Other financial liabilities | 21,850,045 | |
| 42 | of which to related parties | 21,683,296 | |
| 22 | Current provision for risks and charges | 968,006 | |
| 23 | Current tax liabilities | 1,178,050 | |
| 24 | Other current liabilities | 26,511,833 | |
| 42 | of which to related parties | 13,049,709 | |
| Total | 186,929,226 | ||
| Liabilities held for sale | 2,286,339 5,835,716 - 924,556 43,385,866 - 54,288,042 26,064,601 31,371,666 20,572,354 20,409,675 1,734,917 1,180,260 29,336,887 12,660,369 164,548,727 - |
||
| Liabilities held for sale Total |
- - |
- |
| notes | Fiera Milano SpA Statement of Comprehensive Income | 2014 | 2013 |
|---|---|---|---|
| 28 | Revenues from sales and services | 181,098,308 | 194,522,546 |
| 42 | of which with related parties | 4,918,877 | 4,757,820 |
| Total revenues | 181,098,308 | 194,522,546 | |
| 29-42 | Cost of materials | 818,002 | 1,005,390 |
| 30 | Cost of services | 107,928,578 | 107,032,076 |
| 42 | of which with related parties | 33,562,873 | 29,853,280 |
| 31 | Cost of use of third-party assets | 51,897,839 | 58,809,232 |
| 42 | of which with related parties | 49,319,642 | 55,755,710 |
| 32 | Personnel expenses | 34,990,305 | 34,180,257 |
| 42 | of which with related parties | 1,007,595 | 934,283 |
| 33 | Other operating expenses | 4,756,578 | 5,811,622 |
| 42 | of which with related parties | 1,309,715 | 1,373,392 |
| Total operating expenses | 200,391,302 | 206,838,577 | |
| 34 | Other income | 6,405,941 | 7,327,206 |
| 42 | of which with related parties | 3,857,967 | 4,794,088 |
| Gross operating result | (12,887,053) | (4,988,825) | |
| 35 | Depreciation of property, plant and equipment | 2,665,230 | 3,889,683 |
| Depreciation of property investments | - | - | |
| 35 | Amortisation of intangible assets | 4,674,891 | 4,329,410 |
| Adjustments to asset values | - | - | |
| 36 | Write down of doubtful receivables and other provisions | (1,911,822) | (1,531,690) |
| Net operating profit (EBIT) | (18,315,352) | (11,676,228) | |
| 37 | Financial income and similar | 2,095,880 | 2,837,061 |
| 42 | of which with related parties | 2,018,511 | 2,448,013 |
| 38 | Financial expenses and similar | 4,739,379 | 4,235,303 |
| 42 | of which with related parties | 1,183,180 | 979,835 |
| 39 | Valuation of financial assets | (14,942,000) | (2,201,000) |
| Profit/(loss) before tax | (35,900,851) | (15,275,470) | |
| 40 | Income tax | (5,226,730) | (2,611,787) |
| 42 | of which with related parties | (1,167,540) | (206,622) |
| Profit/(loss) from continuing operations | (30,674,121) | (12,663,683) | |
| Profit/(loss) from assets held for sale | - | - | |
| 41 | Profit/(loss) for the year | (30,674,121) | (12,663,683) |
| Other comprehensive income/(loss) that will not be reclassified subsequently to profit or loss |
|||
| Revaluation of defined benefit schemes | (230,358) | (16,625) | |
| Tax effects | (63,348) | (4,572) | |
| Other comprehensive income/(loss) net of related tax effects | (167,010) | (12,053) | |
| Total comprehensive income/(loss) for the year | (30,841,131) | (12,675,736) |
| notes | Fiera Milano SpA Statement of Cash Flows | 2014 | 2013 | |
|---|---|---|---|---|
| Net cash at beginning of year | 5,920,621 | 3,214,001 | ||
| Cash flow from operating activities | ||||
| 11 | Net cash from operating activities | (13,162,842) | 8,295,528 | |
| 42 | of which with related parties | (76,167,616) | (68,407,697) | |
| Interest paid | (4,344,314) | (3,993,096) | ||
| Interest received | 659,277 | 403,353 | ||
| Income taxes paid | - | (218,320) | ||
| Total | (16,847,879) | 4,487,465 | ||
| Cash flow from investment activities | ||||
| 2 | Investments in tangible assets | (595,000) | (732,636) | |
| 2 | Write-downs of tangible assets | 5,008 | 148 | |
| 4 | Investments in intangible assets | (1,634,942) | (4,226,987) | |
| 5 | Investments in subsidiaries | (1,953,634) | (468,847) | |
| 5 | Subsidiary company share capital transactions | (1,121,774) | (8,677,058) | |
| 5 | Joint venture share capital transactions | - | (100,000) | |
| 37 | Dividends received | 1,797,288 | 2,067,298 | |
| Total | (3,503,054) | (12,138,082) | ||
| Cash flow from financing activities | ||||
| 12 | Equity | - | (296,436) | |
| 13-14 | Non-current financial assets/liabilities | (7,220,889) | 7,467,947 | |
| 10-18-21 | Current financial assets/liabilities | 25,215,120 | 3,185,726 | |
| 42 | of which with related parties | 693,312 | 19,314,287 | |
| Total | 17,994,231 | 10,357,237 | ||
| Cash flow for the period | (2,356,702) | 2,706,620 | ||
| Net cash from assets held for sale | - | - | ||
| Net cash at the end of year | 3,563,919 | 5,920,621 |
| Cash generated from operating activities | 2014 | 2013 |
|---|---|---|
| Result including non-operating activities | (30,674,121) | (12,663,683) |
| Adjustments for: | ||
| Depreciation and Amortisation | 7,340,121 | 8,219,093 |
| Provisions, write-downs and impairment | (1,911,822) | (1,531,690) |
| Valuation of financial activities | 14,942,000 | 2,201,000 |
| Capital gains/(losses) | 491 | 11,089 |
| Net financial income/(expenses) | 2,643,499 | 1,398,242 |
| Net change in employee provisions | 206,210 | 57,184 |
| Changes in deferred taxes | (4,165,783) | (2,890,780) |
| Inventories | (1,711,885) | 522,383 |
| Trade and other receivables | 2,543,139 | (2,236,764) |
| Trade payables | (4,048,181) | 730,333 |
| Pre-payments | 3,471,676 | 3,837,607 |
| Tax payables | (2,210) | 131,384 |
| Provisions for risks and charges and other liabilities (excluding payables to Organisers) | (253,253) | 7,962,358 |
| Payables to Organisers | (1,542,723) | 2,547,772 |
| Total | (13,162,842) | 8,295,528 |
| Fiera Milano SpA Statement of Changes in Equity | (Euro) | ||||||
|---|---|---|---|---|---|---|---|
| Note 12 | Share capital |
Share premium reserve |
Legal reserve |
Other reserves |
Retained earnings |
Profit/(loss) for the financial year |
Total |
| Balance at 31 December 2012 | 41,592,662 | 14,671,212 | 7,865,332 | 1,437,819 | 1,803,788 | (1,821,919) | 65,548,894 |
| Effect of retroactive application of IAS 19 Revised | - | - | - | - | (431,380) | 431,380 | - |
| Restated balance at 1 January 2013 | 41,592,662 | 14,671,212 | 7,865,332 | 1,437,819 | 1,372,408 | (1,390,539) | 65,548,894 |
| Loss for the year covered by: - Retained earnings - Other reserves |
- - - - |
- - |
- (18,131) |
(1,372,408) - |
1,372,408 18,131 |
- - |
|
| Purchase of treasury shares | (71,983) | (224,453) | - | - | - | - | (296,436) |
| Remeasurement of defined benefit plans | - - | - | - | (12,053) | - | (12,053) | |
| Total comprehensive income/(loss) for the financial year at 31.12.13 | - | - | - | - | - | (12,663,683) | (12,663,683) |
| Balance at 31 December 2013 | 41,520,679 | 14,446,759 | 7,865,332 | 1,419,688 | (12,053) | (12,663,683) | 52,576,722 |
| Loss for the year covered by: - Share premium reserve |
- | (12,663,683) | - | - | - | 12,663,683 | - |
| Remeasurement of defined benefit plans | - - | - | - | (167,010) | - | (167,010) | |
| Total comprehensive income/(loss) for the financial year at 31.12.14 | - | - | - | - | - | (30,674,121) | (30,674,121) |
| Balance at 31 December 2014 | 41,520,679 | 1,783,076 | 7,865,332 | 1,419,688 | (179,063) | (30,674,121) | 21,735,591 |
On 20 March 2015, the Board of Directors approved the Fiera Milano SpA Financial Statements at 31 December 2014 and authorised their publication.
Fiera Milano SpA, as Parent Company of the Group, has also prepared the Consolidated Financial Statements as at 31 December 2014.
Fiera Milano SpA and its subsidiaries are active in all the characteristic areas of the exhibition and congress industry and the Company is one of the largest integrated companies in this sector worldwide.
The Company business consists of hosting exhibitions, fairs and other events, promoting and making available equipped exhibition spaces, as well as offering support for projects and related services. This includes the business of staging exhibitions (and providing final services to exhibitors and visitors).
The business of the Company has dual seasonality: (i) a higher concentration of exhibitions in the six months from January to June; (ii) exhibitions that have a multiannual frequency.
These Financial Statements were prepared in accordance with IAS and IFRS accounting standards in force at 31 December 2014, issued by the International Accounting Standards Board (IASB) and endorsed by the European Union, and the relative interpretative documents and provisions of Article 9 of Legislative Decree no. 38/2005.
The accounting standards used to prepare the present Financial Statements are the same as those used to prepare the Financial Statements at 31 December 2013, except for those applicable from 1 January 2014 which are given below.
The Financial Statements are prepared in Euro and all figures are rounded to the nearest thousand of Euro unless indicated otherwise. The Financial Statements give comparative data for the previous financial year; it should be noted that some numbers from the previous financial year have been restated to make the numbers more comparable.
In the 2014 financial year no atypical and/or unusual transactions took place.
The present Financial Statements have been prepared on the principle of going concern as fully described in the section on Business outlook and assessment of the Company as a going concern.
The risks and uncertainties affecting the business and the Company are described in the Board of Directors' Management Report in the section on "Risk factors affecting Fiera Milano Group" in Note 26 and in the paragraph "Use of Estimates".
The present Financial Statements are audited by the audit firm Reconta Ernst & Young SpA.
The Company has adopted for the first time some accounting standards and amendments that are applicable to financial periods beginning on or after 1 January 2014.
The content and impact of each new accounting standard and amendment is given below:
IFRS 12 gives the disclosure requirements for subsidiaries, joint arrangements, associates and structured entities. The relevant information has been grouped together and is given in Note 5.
The amendments provide additional transition relief in IFRS 10, IFRS 11 and IFRS 12 by limiting the requirement to provide adjusted comparative information to only the preceding comparative period.
These amendments clarify the meaning of "currently has a legally enforceable right to set-off" and also clarifies the offsetting criteria to settlement systems (such as central clearing house systems), which apply gross settlement mechanisms that are not simultaneous. The amendments had no impact on the financial statements of the Company.
Under the amendments there is no need to discontinue hedge accounting if a hedging derivative was novated provided certain criteria are met. The amendments had no impact on the financial statements of the Company since it holds no derivatives.
These amendments remove the unintended consequence introduced with IFRS 13 to the disclosure requirements of IAS 36. The amendments restrict the requirement to disclose the recoverable amount of an asset or cash-generating unit to periods in which an impairment loss has been recognised or reversed. These amendments had no significant impact on the financial statements of the Company.
The accounting standards endorsed by the European Union during 2014 but not yet applicable and not adopted early by the Company are given below:
IFRIC 21 identifies the obligating event for the recognition of a liability as the activity that triggers the payment of the levy in accordance with the relevant legislation. When an obligation is triggered on reaching a minimum threshold, the liability is recognised when that minimum threshold is reached. Retrospective application is required for IFRIC 21. IFRIC 21 is effective for annual periods beginning on or after 17 June 2014.
The amendment relates to the accounting for employee or third-party contributions to a defined benefit plan.
The following accounting standards have been issued by the IASB but have not yet been endorsed by the European Union:
IFRS 15 replaces IAS 18 – Revenue, IAS 11 - Construction contracts, interpretations SIC 31, IFRIC 13 and IFRIC 15. Application of IFRS 15 is mandatory for annual reporting periods beginning on or after 1 January 2017; early application is permitted. The time lapse between the publication of this accounting standard and its mandatory application, slightly more than two and a half years, is to give entities the necessary time to make the changes required to accounting systems for application of the new international accounting standard as it changes the model for the recognition and measurement of revenues.
With regard to the format and content of the Financial Statements, Fiera Milano SpA has made the following choices:
Business combinations are accounted for by applying the purchase method in compliance with IFRS 3 revised in 2008. Under this method the transaction cost of a business combination is valued at fair value, determined as the aggregate of the fair value of the assets transferred and the liabilities assumed by the Company at the acquisition date and equity instruments issued for control of the acquired entity. All other costs associated with the transaction are expensed in the Statement of Comprehensive Income at their acquisition date value.
Contingent considerations, considered part of the acquisition consideration, must be measured at fair value at the time of the acquisition. Subsequent changes to the fair value are recognised in the Statement of Comprehensive Income.
The identifiable assets acquired and the liabilities assumed are measured at fair value at the acquisition date.
Goodwill is measured as the difference between the aggregate of the acquisition-date fair value of the consideration transferred for the business combination, the amount of any non-controlling interest, the acquisition date fair value of any previously held equity interest in the acquire, and the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If the difference between the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed exceeds the consideration transferred for the business combination, the amount of any non-controlling interest and the acquisition-date fair value of any previously held equity interest in the acquiree, the excess sum is immediately recognised in the Statement of Comprehensive Income as income from the transaction.
In measuring the fair value of business combinations, Fiera Milano SpA uses available information and, for more material business combinations, also uses the support of external valuations.
When a business combination is achieved in stages (step acquisition), the previously held share of the entity's assets and liabilities are measured at fair value at the date that control is obtained and any resulting adjustments are recognised in profit or loss. Previously held investments are therefore recognised as though they had been sold and reacquired at the date that control is obtained.
IFRS 3 for the accounting of business combinations does not apply to business combinations under common control. In the absence of a standard that deals specifically with this type of transaction, the application of the most suitable treatment must be guided by the general scope of IAS 8, i.e. to provide information on the transaction that is relevant and reliable and gives priority to the economic substance and financial reality of the transaction and not merely its legal form.
Under OPI 1 (Assirevi Preliminary Opinions on IFRS) on the "Accounting treatment of business combinations under common control in the separate and in the consolidated financial statements" the economic substance must refer to the generation of value added which results in a significant change in cash inflows from the net assets transferred before and after the transaction. Should it be impossible to estimate a significant increase in future cash inflows from the assets transferred, the choice of how the transaction is accounted should be governed by prudence, which results in the application of the accounting principle of continuity. This principle entails the recognition in the financial statements of values equal to those that would have existed if the assets that are the object of the combination had always been combined. The net assets must be recognised at their carrying values in the relevant accounts prior to the transaction or, if available, at the values in the Consolidated Financial Statements of the parent company Fiera Milano SpA. Where the transfer values are higher than the historic values, the excess must be eliminated against the equity of the acquirer through the appropriate reduction of a reserve.
Property, plant and equipment are recognised at purchase or production cost, including contingent costs and costs incurred, and adjusted for accumulated depreciation.
Tangible assets are depreciated in each accounting period on a straight-line basis, using economic/technical rates determined by the residual life of the assets.
Routine maintenance costs are charged to the Income Statement when they are incurred.
The replacement costs of identifiable components of complex assets are allocated to the assets and depreciated over their useful lives. The residual carrying amount of the component being replaced is charged to the Income Statement.
Leasehold improvements are classified in property, plant and equipment based on the nature of the cost incurred; the depreciation period corresponds to the lesser of the residual useful life of the tangible asset and the residual period of the rental contract.
The depreciation rates applied are listed below:
| - | Office furniture and machinery | 12% |
|---|---|---|
| - | Exhibition furniture and equipment | 27% |
| - | Catering equipment | 25% |
| - | Sundry machinery and equipment | 15% |
| - | Site motor vehicles | 20% |
| - | Electronic equipment | 20% |
| - | Plant and machinery | 10% |
| - | Telecommunication systems | 20% |
| - | Alarm systems | 30% |
| - | Furnishings | 12% |
If there is any indication of impairment, the tangible assets are subjected to an impairment test as described in the section on impairment of assets.
An intangible asset is recognised only if it is identifiable, is controlled by the entity, is expected to generate future economic benefits, and if its cost can be reliably measured.
Goodwill arising from business combinations is initially recognised at the cost on the acquisition date, as indicated in the paragraph above on Business Combinations, and, for purposes of the impairment test, allocated to a cash-generating unit or group of cash-generating units that benefit from the synergies generated by the acquisition which gave rise to the goodwill. After initial recognition in accounts, goodwill is measured at cost less any impairment stemming from the impairment tests (see the paragraph Impairment of Assets). An intangible asset is considered to have an indefinite useful life when no limit can be foreseen to the period during which the asset can generate financial inflows for the Group. Intangible assets with an indefinite useful life, such as goodwill, are not subject to amortisation.
Intangible assets with a finite life are measured at purchase or production cost, including any contingent costs, and systematically amortised on a straight-line basis over their estimated useful life. If there is any indication of impairment, the intangible assets are subjected to an impairment test as described in the section on the impairment of assets.
Industrial patents and rights for the use of intellectual property, licenses, and concessions are amortised over a period of three years from the year in which the cost is incurred.
Amortisation of the trademarks of exhibitions is based on a useful life of between ten and twenty years, estimated on the basis of the competitive dynamics of the industry and of a comparison with the methodology used by the leading Italian and foreign competitors.
Research costs are recognised at the time they are incurred. In compliance with IAS 38, development costs relating to specific projects, including the launch of new exhibitions, are capitalised when it is probable that the project will be completed and generate future economic benefits and when such costs can be reliably measured.
The cost is amortised on a straight line basis over the period of the estimated future benefits of the project. The carrying value of costs is reviewed annually at the end of the reporting period or more often if there are any particular reasons for doing so, to analyse the fair value and ascertain any indication of impairment.
Goodwill and other intangible assets with an indefinite life are tested for impairment at least annually at the end of the reporting period or more often if there are any indications that an asset has been impaired.
Tangible and intangible assets with a definite useful life that are depreciated or amortised are tested for impairment only when there is an indication of impairment.
The recoverable amount of the asset is assessed by comparing the carrying value with the higher of the net selling price of the asset and its value in use. The 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 segment. The value in use is the present value, discounted at the weighted average cost of capital, of an entity with a similar risk profile and level of indebtedness, of the cash flows expected to arise from the asset (or from a group of assets – a cash generating unit) and from its sale at the end of its useful life.
If subsequently there is an indication that an impairment loss, other than goodwill, may have decreased or no longer exists, the carrying value of the asset is adjusted to the new estimate of the realisable value although this value may not exceed the value which would have been measured had there been no impairment. Reversal of impairment is recognised in profit or loss.
There are two types of leases: finance leases and operating leases.
A lease is considered a finance lease when it transfers a significant and substantial part of the risks and rewards associated with the ownership of the asset to the lessee.
Given this, as determined by IAS 17 – Leases, a leasing contract is considered a finance lease when the following factors are individually or jointly present:
Assets available to Fiera Milano SpA under leasing contracts that can be considered finance leases are recognised as tangible or intangible assets at the lower of their acquisition value or the net current value of the minimum charges under the contract amortised over their estimated useful life; the corresponding liability to the lessor is recognised in equity as a current or non-current financial liability depending on whether the contract expires within or beyond twelve months.
Lease payments are subdivided into principal, which is taken against financial liabilities, and interest, which is recognised in profit or loss under financial expenses.
Charges for operating leases are recognised in profit or loss pro-rata temporis for the duration of the contract.
In compliance with the requirements of IAS 39 and 32, financial assets are classified under the following four categories:
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 the accounts, subsequently checking this classification at the end of each reporting period.
Financial assets are initially recognised at cost, which is equal to fair value plus contingent transaction costs. Subsequent measurement depends on the type of instrument concerned.
Financial assets at fair value shown in the Income Statement, 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 profit or loss. Gains and losses from any changes in the fair value are recognised in profit or loss.
Held-to-maturity investments are classified under current financial assets if they mature in less than 12 months and among non-current financial assets if maturity exceeds that period, and are subsequently valued at amortised cost. The latter is calculated using the effective interest rate method, taking into account any purchase discounts or premiums and spreading them over the entire period up to maturity, less any impairment.
Loans and receivables are valued at amortised cost using the effective interest method. At the end of each reporting period, the Company measures the realisable value of these receivables taking account of estimated future cash payments or receipts through their expected life.
Available-for-sale financial assets are recognised as non-current assets, unless they are to be divested within twelve months of the end of the reporting period, and are measured at fair value. Losses or gains on available-for-sale financial assets are recognised in other comprehensive income and aggregated in a specific equity reserve until they are sold, recovered or otherwise derecognised. When there is an indication of impairment in an available-for-sale financial asset and there is objective evidence of this, the cumulative gain or loss that was recognised in other comprehensive income is reclassified from equity to profit or loss for the period as a reclassification adjustment even if the financial asset has not been eliminated.
After initial recognition in accounts, equity investments in subsidiaries and associate companies are valued at cost less any loss of value stemming from impairment testing.
In compliance with the requirements of IAS 32 and IAS 39, investments in companies other than subsidiaries and associates are classified as available-for-sale and are measured at fair value except when fair value cannot be determined; in such cases, the cost method is used. Gains and losses stemming from adjustments of value are recognised in other comprehensive income,
aggregated in a specific equity reserve. When there is an indication of impairment in an availablefor-sale financial asset and there is objective evidence of this, the cumulative loss that was recognised in other comprehensive income is reclassified from equity to profit or loss for the period as a reclassification adjustment even if the financial asset has not been eliminated.
Inventories are valued at the lower of purchase or production cost, including contingent costs, calculated using the FIFO method, and the presumable net realisable value based on market trends. Inventory consists mainly of outstanding costs relating to activities in future financial periods.
Cash and cash equivalents comprise cash on 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 Statement of Cash Flows is the same as that of the Statement of Financial Position.
This category includes assets and liabilities (or assets and liabilities in a disposal group/discontinued operations) where the carrying value will be recovered primarily through a sale rather than through continued utilisation.
For this to happen, the following conditions must be met:
Assets held for sale are measured at the lower of 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:
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.
Under IAS/IFRS regarding the acquisition of treasury shares, the nominal value of the shares is deducted from share capital while the difference between the nominal value and the acquisition value is taken against the share premium reserve. On the sale of treasury shares, the share
capital and the share premium reserve are reconstituted by the same amounts that they were reduced when the shares were acquired while any profit/loss from the sale is recognised in equity with no impact on profit or loss. The shares taken as the reference for the calculation of profit/loss on disposal are selected using the FIFO method.
Costs directly attributable to capital transactions are recognised as a direct reduction in equity.
Payables, pre-payments and other liabilities are initially recognised at fair value. After that, they are measured at amortised cost. Payables are derecognised when underlying financial obligations have been discharged.
Liabilities with a due date exceeding of twelve months 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. Discounted interest is classified in financial expenses.
A derivative or any other contract with the following characteristics is classified as a financial instrument and consequently fair-valued at the end of each accounting period: (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. The effects of fair-value measurement are recognised in profit or loss as financial income/expense.
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 probable. If expectations of resource outflow go beyond the next financial year, the obligation is recognised at its present value through discounting of future cash flows at a rate that also considers the time value of money and the liability's risk.
Risks for which occurrence of a liability is only possible, not probable, are shown in the paragraph, disclosure on guarantees given, undertakings and other contingent liabilities, and no provisions are made for these.
Financial liabilities are initially recognised at cost as represented by the 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 using 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 paid out upon or after cessation of the employment relationship consist mainly of employee severance indemnities [trattamento di fine rapporto or TFR], which are governed by Article 2120 of the Italian Civil Code.
In compliance 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
Fiera Milano SpA Financial Statements to 31 December 2014 – Explanatory and Supplementary Notes to the Financial Statements and Attachments 224 future obligation for which the Company assumes actuarial risks and related investments. As required by IAS 19 Revised, the Company 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 in salary levels). Fiera Milano SpA recognises changes in actuarial gains/losses in other items of comprehensive income.
From 1 January 2007, following social security reform, cumulative employee severance indemnities had to be allocated to pension funds or to the INPS treasury fund. Employees were given the option until 30 June 2007 to choose the destination of their severance indemnities.
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 either to the pension fund or to INPS. The liability related to past severance indemnities continues to be a defined benefit plan to be measured using actuarial assumptions.
Termination benefits not included in the employee severance indemnities (TFR) are recognised as liabilities and employee expenses when the enterprise is demonstrably committed to terminate the employment of an employee or group of employees before the normal retirement date or provides termination benefits as a result of an offer made in order to encourage voluntary redundancy. The benefits owed to employees for termination of their employment do not give any future economic benefits to the enterprise and are therefore recognised immediately as a cost.
Revenue is 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 reliably measured. Revenues are recognised at the fair value of the consideration received or receivable, taking into account any trade discounts and quantity-based reductions granted.
Revenue from the sale of goods is recognised when the entity has transferred a significant and substantial part of the risks and rewards associated with the ownership of the asset.
Revenues from the sale of services are recognised when the service is supplied. In compliance with the requirements of IAS 18 paragraph 25, revenues for the supply of services relating to exhibitions and congresses are recognised when the 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 the total costs of an exhibition will exceed its total revenues, the expected loss is recognised as a cost in a specific provision.
Costs are recognised when they relate to goods and services sold or used in the financial year or on an accrual accounting basis when their future usefulness cannot be precisely identified.
Personnel expenses include both the fixed and variable remuneration of Directors.
Costs that are not eligible to be recognised in assets are recognised in profit or loss in the period in which they are incurred.
This item has a residual nature and includes grants and subsidies. It should be noted that the recovery of costs incurred by the controlling shareholder Fondazione Fiera Milano for development initiatives and projects and for the anti-crisis measures taken by the Group fall into this category. This other income for the development and support of the exhibition business managed by Fiera Milano SpA and aimed at supplying, through Fiera Milano SpA itself, direct support to those involved in the sector is neither a capital facility or a payment made by Fondazione Fiera Milano as a shareholder; therefore, in accordance with international accounting standards it has been recognised in income in the financial year it was received.
Financial income and expenses are recognised in the accounts based on timing that considers the effective yield/expense of the asset/liability concerned.
Income taxes are recognised according to estimated taxable income in compliance with current tax rates and regulations. Income taxes are recognised in profit or loss, except for those relating to items recognised outside profit or loss, in which case the tax effect is 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.
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 each reporting period.
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.
Current and deferred tax assets and liabilities are offset only when they are levied by the same taxing authority and when there is a legal right to settle on a net basis.
Further information on the tax consolidation may be found in Note 40.
Transactions in foreign currencies are recorded at the current exchange rate in force on the transaction date. Monetary assets and liabilities denominated in foreign currencies are converted at the exchange rate in force at the end of the reporting period. Foreign exchange differences generated by the extinction of monetary items or their translation at different exchange rates from those at which they were translated at the time of initial recognition in the period or in previous periods are recognised in profit or loss. Exchange rate differences are recognised in financial expenses and income.
Dividend income is recognised when the shareholders' right to receive payment has been established. This is normally the date of the Annual General Meeting that approves the dividend distribution.
Preparation of financial statements and related notes using IFRS requires estimates and assumptions to be made that affect the amounts of assets and liabilities in the Statement of Financial Position and disclosures concerning potential assets and liabilities at the end of the reporting period. Actual results may differ from these estimates. Estimates are used to recognise provisions for doubtful accounts, depreciation and amortisation, employee benefits, taxes, and other provisions and reserves, as well as any adjustments to asset value. Estimates and assumptions are reviewed regularly and the effects of any change are immediately recognised in profit or loss.
The most important estimates used in preparing the Financial Statements are given below as these involve a significant level of subjective opinion, assumptions and estimates:
Concerning the use of estimates of financial risk, reference should be made to the specific paragraph in the notes to the Financial Statements, whilst it should be noted that the valuation of the provision for risks refers to the best information available at the end of the reporting period.
The industrial plans used to carry out the impairment tests are based on certain expectations and assumptions for future performance that by their very nature are subject to uncertainties. Therefore, given the current macroeconomic scenario, the state of the exhibition sector and the outcome of the initiatives taken by the Group to stabilise the financial and net worth, the results could differ from the forecasts.
The Plan will be continually assessed by the Directors regarding the effective realisation of the initiatives and forecasts and the effects on the financial and economic performance of the Company.
The breakdown and changes in the last two financial years were as follows:
| Property, plant and equipment | (€'000) | |||||||
|---|---|---|---|---|---|---|---|---|
| Balance at | Balance at | |||||||
| 31/12/12 | Incr. | Decr. | Depr. | Impairment | Reclassification | Other changes |
31/12/13 | |
| Plant and machinery | ||||||||
| . historic cost | 14,566 | 250 | 54 | - | - | - | - | 14,762 |
| . depreciation | 9,577 | - | 43 | 1,385 | - | - | - | 10,919 |
| Net | 4,989 | 250 | 11 | 1,385 | - | - | - | 3,843 |
| Industrial and commercial equipment |
||||||||
| . historic cost | 11,745 | 121 | - | - | - | - | - | 11,866 |
| . depreciation | 11,419 | - | - | 128 | - | - | - | 11,547 |
| Net | 326 | 121 | - | 128 | - | - | - | 319 |
| Other assets . historic cost |
26,032 | 362 | 2 | - | - | - | - | 26,392 |
| . depreciation Net |
21,284 4,748 |
- 362 |
1 1 |
2,377 2,377 |
- - |
- - |
- - |
23,660 2,732 |
| Total property, plant and equipment . historic cost |
52,343 | 733 | 56 | - | - | - | - | 53,020 |
| . depreciation | 42,280 | - | 44 | 3,890 | - | - | - | 46,126 |
| Net 10,063 |
733 | 12 | 3,890 | - | - | - | 6,894 | |
| Property, plant and equipment | (€'000) | |||||||
| Balance at 31/12/13 |
Incr. | Decr. | Depr. | Impairment | Reclassification | Other | Balance at 31/12/14 |
|
| Plant and machinery | changes | |||||||
| . historic cost | 14,762 | 317 | - | - | - | - | - | 15,079 |
| . depreciation Net |
10,919 3,843 |
- 317 |
- - |
1,403 1,403 |
- - |
- - |
- - |
12,322 2,757 |
| Industrial and commercial equipment |
||||||||
| . historic cost | 11,866 | 72 | 16 | - | - | - | - | 11,922 |
| . depreciation | 11,547 | - | 11 | 128 | - | - | - | 11,664 |
| Net | 319 | 72 | 5 | 128 | - | - | - | 258 |
| Other assets | ||||||||
| . historic cost | 26,392 | 206 | 7 | - | - | - | - | 26,591 |
| . depreciation Net |
23,660 2,732 |
- 206 |
7 - |
1,134 1,134 |
- - |
- - |
- - |
24,787 1,804 |
| Total property, plant and equipment |
||||||||
| . historic cost | 53,020 | 595 | 23 | - | - | - | - | 53,592 |
| . depreciation | 46,126 | - | 18 | 2,665 | - | - | - | 48,773 |
| Net 6,894 |
595 | 5 | 2,665 | - | - | - | 4,819 |
Fiera Milano SpA Financial Statements to 31 December 2014 – Explanatory and Supplementary Notes to the Financial Statements and Attachments 228 The breakdown and changes in the last two financial years were as follows:
This entry was Euro 2.757 million, net of depreciation for the year of Euro 1.403 million, and was for electric and thermal plant and security and audiovisual systems.
The total increase of Euro 0.317 million was mainly for plant in the Rho exhibition site.
This entry was Euro 0.258 million, net of depreciation for the year of Euro 0.128 million, and was mainly for equipment and furnishings related to the exhibition business.
The total increase of Euro 0.072 million was for the purchase of furniture and equipment related to exhibition activities in the Rho exhibition site.
This entry was Euro 1.804 million net of depreciation for the year of Euro 1.134 million and was for electronic equipment, furnishing, equipment, and transport vehicles.
The total increase of Euro 0.206 million was made up of Euro 0.184 million for electronic equipment and furnishing accessories and of Euro 0.022 million for improvements made to assets belonging to Fondazione Fiera Milano, which were the responsibility of the Company under existing lease agreements.
The depreciation of costs for improvements to third-party assets is calculated on the basis of the residual duration of the lease agreements for fixed assets.
On 31 March 2014 new lease agreements were signed for the Rho and Milan exhibition sites that expire on 30 June 2023. Therefore, the length of the useful life on which depreciation is calculated has changed giving rise to an estimate of depreciation that was Euro 0.972 million lower for the financial year.
The entry for fixed assets, plant and equipment includes no related-party transactions (Euro 0.001 million at 31 December 2013).
| Goodwill and intangible assets with an indefinite useful life | Balance at | (€'000) Balance at |
||||||
|---|---|---|---|---|---|---|---|---|
| 31/12/12 | Incr. | Decr. | Impairment Reclassification | Other changes |
31/12/13 | |||
| Goodwill | ||||||||
| . historic cost | 82,933 | - | - | - | - | - | 82,933 | |
| . depreciation | 12,789 | - | - | - | - | - | 12,789 | |
| Net | 70,144 | - | - | - | - | - | 70,144 | |
| Total | ||||||||
| . historic cost | 82,933 | - | - | - | - | - | 82,933 | |
| . depreciation | 12,789 | - | - | - | - | - | 12,789 | |
| Net | 70,144 | - | - | - | - | - | 70,144 |
Details of the amounts and changes in the last two financial years were as follows:
| Goodwill and intangible assets with an indefinite useful life | (€'000) | |||||||
|---|---|---|---|---|---|---|---|---|
| Balance at | Balance at | |||||||
| 31/12/13 | Incr. | Decr. | Impairment Reclassification | Other changes |
31/12/14 | |||
| Goodwill | ||||||||
| . historic cost | 82,933 | - | - | - | - | - | 82,933 | |
| . depreciation | 12,789 | - | - | - | - | - | 12,789 | |
| Net | 70,144 | - | - | - | - | - | 70,144 | |
| Total | ||||||||
| . historic cost | 82,933 | - | - | - | - | - | 82,933 | |
| . depreciation | 12,789 | - | - | - | - | - | 12,789 | |
| Net | 70,144 | - | - | - | - | - | 70,144 |
The amounts and changes in the different items in the last financial year were as follows:
Goodwill totalled Euro 70.144 million.
Goodwill of Euro 29.841 million was initially recognised in the Statement of Financial Position following the contribution by Fondazione Fiera Milano of the exhibition entity on 17 December 2001. In the 2011 financial year, it increased by Euro 40.350 million due to the merger by incorporation of the 100% controlled company Rassegne SpA into its parent company Fiera Milano SpA and by a further Euro 0.080 million following the acquisition of the business division, Information Communication Technology, from the subsidiary Expopage SpA.
During the 2012 financial year it increased by Euro 0.021 million as a result of the merger by incorporation of the 100% owned company, TL.TI Expo SpA, into the Parent Company Fiera Milano SpA and decreased by Euro 0.148 million for the acquisition of the business division F&M Fiere & Mostre Srl in 2009 and by the adjustment to the final transaction consideration made as a result of the failure to reach the targets for the 2012 edition of the exhibition.
As stated in Note 1 on the valuation criteria used to prepare the Financial Statements, goodwill is not amortised but is tested for impairment at the end of each reporting period or more often if there are any indications of impairment. The methods used for the impairment tests in the 2014 financial period are described in the section on the use of estimates.
The realisable value of the cash generating units (CGUs) to which individual goodwill was attributed is verified by determining their value in use.
For Fiera Milano SpA, each individual exhibition is a cash-generating unit.
In order to avoid using arbitrary allocation criteria for the impairment tests, goodwill was allocated on the basis of appropriate groupings that reflect the strategic vision of the company as well as how the goodwill was generated.
The goodwill allocations are as follows:
the Directly Organised Exhibition cash generating unit: this comprises the cash generating units of the exhibitions directly organised by Fiera Milano SpA. The goodwill allocated to this group was Euro 40.223 million and was the goodwill generated on the acquisition of companies that organise exhibitions that were subsequently merged with Fiera Milano SpA through various merger transactions;
the Exhibition cash generating unit group: this comprises the cash generating units of all the exhibitions of Fiera Milano SpA. The goodwill allocated to this group was Euro 29.921 million of which Euro 29.841 million was the goodwill arising from the contribution of the exhibition entity by Fondazione Fiera Milano to Fiera Milano SpA on 17 December 2001; Euro 0.080 million was goodwill deriving from the acquisition by the Company of the Information Communication Technology business division of its subsidiary Expopage SpA.
The method used is that of discounted cash flow based on the 2015-2018 Industrial Plan approved by the Board of Directors.
Cash flow projections beyond the time horizons of the respective business plans are generally made using the average gross operating profit of the last two years of the plan and reconstructing a normalised cash flow without considering changes in working capital but including maintenance and replacement costs.
The pro quota profit of exhibitions in the last two years of the industrial plan that are held less often than biennially were excluded from the cash flows used to calculate the terminal value.
As described above, the terminal value was calculated as a perpetuity obtained by determining the net present value of the average net cash flows and discounting it using a WACC (Weighted Average Cost of Capital) of 7.26% whilst assuming a growth rate of 1.5% in line with the medium/long-term inflation estimates.
The WACC incorporates a cost of risk capital of 8.84%, a cost of debt of 3.49% with debt equal to 25% of invested capital (the average of peer companies). The single elements were arrived at using as far as possible publicly available sources. A rate net of taxes was used for cash flows net of taxes.
The cost of risk capital incorporates a risk-free rate of 2.88%, a market risk premium of 5.5% and a levered beta of 0.96, in line with the average for the sector. It also incorporates a specific risk coefficient to cover the execution risk of the forecast cash flows.
Sensitivity analyses were carried out by varying the WACC (+0.5%) and the forecast operating cash flows (-10%) with a positive result for both CGUs.
The breakdown and changes in the last two financial years were as follows:
| Intangible assets with a finite useful life | (€'000) | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Balance at | Balance at | ||||||||
| 31/12/12 | Incr. | Decr. | Amort. Impairment Reclassification | Other changes |
31/12/13 | ||||
| Industrial patents and intellectual | |||||||||
| property rights | |||||||||
| . historic cost . amortisation |
31,145 27,291 |
2,915 - |
- - |
- 2,342 |
- - |
- - |
- - |
34,060 29,633 |
|
| Net | 3,854 | 2,915 | - | 2,342 | - | - | - | 4,427 | |
| Concessions, licenses and similar . historic cost |
2,620 | 3,312 | - | - | - | - | - | 5,932 | |
| . amortisation | 2,432 | - | - | 948 | - | - | - | 3,380 | |
| Net | 188 | 3,312 | - | 948 | - | - | - | 2,552 | |
| Trademarks | |||||||||
| . historic cost | 22,533 | - | - | - | - | - | - | 22,533 | |
| . amortisation | Net | 7,166 15,367 |
- - |
- - |
1,039 1,039 |
- - |
- - |
- - |
8,205 14,328 |
| Total intangible assets with a finite useful life |
|||||||||
| . historic cost | 56,298 | 6,227 | - | - | - | - | - | 62,525 | |
| . amortisation | 36,889 | - | - | 4,329 | - | - | - | 41,218 | |
| Net | 19,409 | 6,227 | - | 4,329 | - | - | - | 21,307 | |
| Intangible assets with a finite useful life | (€'000) | ||||||||
| Balance at 31/12/13 |
Incr. | Decr. | Amort. Impairment Reclassification | Other | Balance at 31/12/14 |
||||
| changes | |||||||||
| Industrial patents and intellectual | |||||||||
| property rights | |||||||||
| . historic cost | 34,060 | 1,293 | - | - | - | - | - | 35,353 | |
| . amortisation | Net | 29,633 4,427 |
- 1,293 |
- - |
2,328 2,328 |
- - |
- - |
- - |
31,961 3,392 |
| Concessions, licenses and similar rights |
|||||||||
| . historic cost | 5,932 | 342 | - | - | - | - | - | 6,274 | |
| . amortisation | 3,380 | - | - | 1,310 | - | - | - | 4,690 | |
| Net | 2,552 | 342 | - | 1,310 | - | - | - | 1,584 | |
| Trademarks | |||||||||
| . historic cost | 22,533 | - | - | - | - | - | - | 22,533 | |
| . amortisation | 8,205 | - | - | 1,037 | - | - | - | 9,242 | |
| Net | 14,328 | - | - | 1,037 | - | - | - | 13,291 | |
| Total intangible assets with a finite useful life |
|||||||||
| . historic cost | 62,525 | 1,635 | - | - | - | - | - | 64,160 | |
| . amortisation | 41,218 | - | - | 4,675 | - | - | - | 45,893 | |
| Net | 21,307 | 1,635 | - | 4,675 | - | - | - | 18,267 |
The breakdown and changes in the last two financial years were as follows:
These totalled Euro 3.392 million net of amortisation for the year of Euro 2.328 million. The total increase of Euro 1.293 million includes Euro 0.280 million of capitalised costs for functional upgrades to the information management system and Euro 1.013 million for the implementation of other digital projects and the purchase of software.
Amortisation is calculated on the estimated useful life of the asset, which is three years for the information system, the management reporting system, and the other projects and software.
This entry was Euro 1.584 million net of amortisation for the year of Euro 1.310 million; the Euro 0.342 million increase was mainly for the purchase of software licences with rights of use for a limited period.
Time-limited software licences are amortised over a period of three years.
This entry totalled Euro 13.291 million net of amortisation for the year of Euro 1.037 million and the breakdown was as follows:
| - Bit | Euro 3.484 million; |
|---|---|
| - Transpotec & Logitec | Euro 2.599 million; |
| - HOST | Euro 2.303 million; |
| - Mipap Milano Prêt-à-Porter | Euro 2.165 million; |
| - Fluidtrans Compomac | Euro 0.965 million; |
| - Bias | Euro 0.822 million; |
| - Festivity | Euro 0.539 million; |
| - Miart | Euro 0.161 million; |
| - La Campionaria | Euro 0.137 million; |
| - BtoBio Expo | Euro 0.101 million; |
| - TUTTOFOOD | Euro 0.014 million; |
| - Other | Euro 0.001 million. |
The exhibition trademarks are amortised over a useful life of between ten and twenty years. The calculation of the useful life of each trademark is made by determining its continuous presence on a given reference market, its competitive position and its operating profitability.
For the trademarks and publications to which Fiera Milano SpA has attributed a finite useful life, the internal and external sources of information indicated in paragraphs 12-14 of IAS 36 were used to assess if there were any indications of impairment.
The entry for intangible fixed assets with a finite useful life included no related-party transactions (Euro 0.050 million at 31 December 2013).
The breakdown and changes in this entry were as follows:
| EQUITY INVESTMENTS | ||||||||
|---|---|---|---|---|---|---|---|---|
| (€'000) | % held Book value Changes during the financial year |
Book value | ||||||
| 31/12/14 | 31/12/13 | Incr. | Decr. | Reclassification | Revaluations | Write-downs | 31/12/14 | |
| Equity investments in subsidiaries companies | ||||||||
| Fiera Milano Congressi SpA | 100% | 12,200 | - | - | - | - | - | 12,200 |
| Fiera Milano Media SpA | 100% | 29,305 | - | - | - | - | 11,135 | 18,170 |
| Nolostand SpA | 100% | 13,390 | - | - | - | - | - | 13,390 |
| Fiera Milano Exhibitions Africa Pty Ltd | 85% | 5,071 | 496 | - | - | - | - | 5,567 |
| Eurofairs International Consultoria e Participações Ltda | 99.98% | 13,756 | - | - | - | - | 3,807 | 9,949 |
| Fiera Milano India Pvt Ltd | 99.99% | 125 | - | - | - | - | - | 125 |
| Fiera Milano Interteks Uluslararasi Fuarcilik A.S. | 60% | 2,341 | 219 | - | - | - | - | 2,560 |
| Limited Liability Company Fiera Milano | 100% | 261 | - | - | - | - | - | 261 |
| Worldex (China) Exhibition & Promotion Ltd | 75% | 7,419 | 407 | - | - | - | - | 7,826 |
| total | 83,868 | 1,122 | - | - | - | 14,942 | 70,048 | |
| Equity investments in joint-ventures | ||||||||
| Hannover Milano Global Germany GmbH | 49% | 10,990 | - | - | - | - | - | 10,990 |
| Milan International Exhibitions Srl under liquidation | 20% | 29 | - | - | - | - | - | 29 |
| total | 11,019 | - | - | - | - | - | 11,019 | |
| Total equity investments | 94,887 | 1,122 | - | - | - | 14,942 | 81,067 |
The values of investments are shown net of any impairment provisions.
The amount and changes in investments are described below.
4 Figures in Euro are given using the exchange rate of 5 June 2014 (EUR/ZAR = 14.357)
Fiera Milano SpA Financial Statements to 31 December 2014 – Explanatory and Supplementary Notes to the Financial Statements and Attachments 234
On 28 August 2014, Fiera Milano SpA acquired 10% of Fiera Milano Exhibitions Africa Pty Ltd for Euro 0.496 million. Following this transaction its shareholding moved from 75% to 85%.
At the end of the financial year under review, impairment tests were carried out on the investments and an impairment charge of Euro 11.135 million was taken for the investment in Fiera Milano Media SpA and of Euro 3.807 million for the investment in Eurofairs International Consultoria e Participaçoes Ltda.
The methodology used was that of discounted cash flow based on the industrial plans approved by the management of the companies. The reference time horizon is five financial periods for Fiera Milano Media SpA and four years for the other subsidiaries given the biennial timing of some of the important exhibitions. The estimated cash flows beyond the time period of the business plans were calculated by taking the average gross operating margin of the last two years of the plans and estimating a normalised cash flow with no changes in working capital but including maintenance or replacement expenditure.
It should be noted that the terminal value was calculated as a perpetuity obtained by calculating the net present value of the average net cash flows, as described above, at a discount rate that differs for the different reference countries of the various investments. Zero growth in real terms was assumed but an estimate of the medium/long-term inflation rates in the specific geographic areas was used.
The WACC (Weighted Average Cost of Capital) used was different for each investment depending on the: (i) different risk-free rate (the yield on a 10-year government bond in the jurisdiction of the investment); (ii) the specific risk coefficient to cover the execution risk of the forecast cash flows. The risk factors reflect the differences between historical data and estimated figures as well as future valuations of the business strategies; (iii) the different cost of debt due to the estimated rate of inflation in the jurisdiction of each investment.
A summary of the results is given below:
| - Fiera Milano SpA | 7.26% |
|---|---|
| - Fiera Milano Congressi SpA | 6.74% |
| - Fiera Milano Media SpA | 8.99% |
| - Nolostand SpA | 7.34% |
| - Fiera Milano Exhibitions Africa Pty Ltd | 11.94% |
| - Eurofairs International Consultoria e Participaçoes Ltda 16.42% | |
| - Fiera Milano Interteks Uluslararasi Fuarcilick A.S. | 12.95% |
| - Limited Liability Company Fiera Milano | 13.27% |
| - Worldex (China) Exhibition & Promotion Ltd | 8.17% |
| - Hannover Milano Global Germany GmbH | 8.01% |
Sensitivity analyses were carried out by varying the WACC (+0.5%) and the forecast operating cash flows (-10%) with a positive outcome for all the investments not found to be impaired.
Sensitivity analyses on the investments found to be impaired gave the following results:
These totalled Euro 13.271 million (Euro 13.857 million at 31 December 2013) of which Euro 11.416 million due beyond five years. The breakdown was as follows:
| Trade and other receivables | (€'000) | ||
|---|---|---|---|
| 31/12/14 | 31/12/13 | Change | |
| Other receivables from the controlling shareholder | 12,389 | 12,784 | (395) |
| Guarantee deposits | 583 | 600 | (17) |
| Other | 299 | 473 | (174) |
| Total | 13,271 | 13,857 | (586) |
The entry included:
Trade and other receivables included Euro 12.389 million (Euro 12.784 million at 31 December 2013) for related-party transactions. Further details on related-party transactions are given in Note 42.
These were Euro 6.338 million (Euro 2.172 million at 31 December 2013) and were the net of deferred tax assets and deferred tax liabilities.
The change compared to the previous financial year was mainly due to deferred tax assets on tax
losses during the financial year that were recognised in the financial period under review against a valuation of the recoverability of these in the approved plans.
An analysis of the changes in deferred taxes is given in Note 40 to the Income Statement.
| Trade and other receivables | (€'000) | ||
|---|---|---|---|
| 31/12/14 | 31/12/13 | Change | |
| Receivables from clients | 26,692 | 30,461 | (3,769) |
| Trade receivables from subsidiaries | 2,591 | 4,528 | (1,937) |
| Trade receivables from associates | 45 | 56 | (11) |
| Receivables from subsidiaries for tax consolidation | 1,144 | 188 | 956 |
| Other receivables | 2,339 | 3,123 | (784) |
| Other receivables from the controlling shareholder | 540 | 1,656 | (1,116) |
| Prepaid expenses | 558 | 394 | 164 |
| Prepaid expenses from the controlling shareholder | 4,828 | - | 4,828 |
| Prepaid expenses from subsidiaries | 17 | 24 | (7) |
| Total | 38,754 | 40,430 | (1,676) |
These were Euro 38.754 million (Euro 40.430 million at 31 December 2013) and included the following items:
| (€'000) | ||||
|---|---|---|---|---|
| 31/12/13 | Provisions | Uses | 31/12/14 | |
| Provision for doubtful receivables | 5,391 | 758 | 1,039 | 5,110 |
The provision made was for receivables that were deemed difficult to recover.
Use of the provision refers to receivables which, in the financial year under review, were found to be unrecoverable.
Receivables from subsidiaries for the tax consolidation of Euro 1.144 million (Euro 0.188 million at 31 December 2013); this is the balance of payables and receivables included in the tax consolidation.
Other receivables of Euro 2.339 million (Euro 3.123 million at 31 December 2013). These included receivables for IRES tax of Euro 0.169 million, for IRAP tax of Euro 0.597 million, prepayments to INAIL of Euro 0.125 million, other tax receivables of Euro 0.046 million, receivables from employees of Euro 0.367 million, receivables for tax credits on employee severance indemnities of Euro 0.283 million, advances to suppliers of Euro 0.102 million, receivables of Euro 0.057 million for contributions from the Fondo Interprofessionale for "For.Te" training, receivables of Euro 0.188 million from the sale of the Richmac trademark and other current receivables of Euro 0.405 million.
The entry for trade and other receivables included Euro 9.165 million (Euro 6.452 million at 31 December 2013) for related-party transactions. Further details on related-party transactions are given in Note 42.
This entry includes suspended costs of Euro 4.466 million (Euro 2.754 million at 31 December 2013) for exhibitions to be held after 31 December 2014.
| Inventories | (€'000) | ||
|---|---|---|---|
| 31/12/14 | 31/12/13 | Change | |
| Tuttofood | 1,671 | 146 | 1,525 |
| Bit | 887 | 216 | 671 |
| HOMI I semester | 527 | 1,406 | (879) |
| Host | 496 | 33 | 463 |
| HOMI II semester | 392 | 157 | 235 |
| Miart | 205 | 174 | 31 |
| Transpotec & Logitec Verona | 142 | 48 | 94 |
| Expo 2015 | 19 | 156 | (137) |
| X Days | - | 221 | (221) |
| Expodetergo International | - | 106 | (106) |
| Other | 127 | 91 | 36 |
| Total | 4,466 | 2,754 | 1,712 |
The entry for inventories includes Euro 0.192 million (Euro 0.372 million at 31 December 2013) for related-party transactions. Further details on related-party transactions are given in Note 42.
These were Euro 2.725 million (Euro 2.145 million at 31 December 2013) and the breakdown was as follows:
| Current financial assets | (€'000) | ||
|---|---|---|---|
| 31/12/14 | 31/12/13 | Change | |
| Current financing to the Group | 2,725 | 2,145 | 580 |
| Total | 2,725 | 2,145 | 580 |
The entry includes loans made to subsidiaries which were done at market conditions. They include the following:
This entire entry is a related-party transaction (Euro 2.145 million at 31 December 2013). Further details on related-party transactions are given in Note 42.
Cash and cash equivalents totalled Euro 3.564 million (Euro 5.921 million at 31 December 2013) and was almost entirely temporary cash held with banks.
| Cash and cash equivalents | (€'000) | ||
|---|---|---|---|
| 31/12/14 | 31/12/13 | Change | |
| Bank and postal accounts | 3,448 | 5,822 | (2,374) |
| Cheques | 113 | 95 | 18 |
| Cash and cash equivalents | 3 | 4 | (1) |
| Total | 3,564 | 5,921 | (2,357) |
The financial flows with comparative data at 31 December 2013 are shown in the Statement of Cash Flows.
The breakdown of equity was as follows:
| Equity | (€'000) | ||
|---|---|---|---|
| 31/12/14 | 31/12/13 | Change | |
| Share capital | 41,521 | 41,521 | - |
| of which treasury shares | (627) | (627) | - |
| Share premium reserve | 1,783 | 14,447 | (12,664) |
| of which treasury shares | (2,913) | (2,913) | - |
| Legal reserve | 7,865 | 7,865 | - |
| Other reserves | 1,420 | 1,420 | - |
| Retained profits/(losses) | (179) | (12) | (167) |
| Profit/(loss) for the period | (30,674) | (12,664) | (18,010) |
| Equity | 21,736 | 52,577 | (30,841) |
The amounts and changes compared to 31 December 2013 were as follows:
At 31 December 2014, equity was Euro 41.521 million (Euro 41.521 million at 31 December 2013), net of Euro 0.627 million of treasury shares. The fully paid-up share capital was made up of 42,147,437 ordinary shares each of nominal value Euro 1.00 with no restrictions regarding dividend distributions and repayment of share capital, except as provided by law for treasury shares.
The number of shares in circulation was as follows:
| Number of shares at 31 December |
Number of shares at 31 December |
||||
|---|---|---|---|---|---|
| 2013 | Increase in capital | Purchase | Sale | 2014 | |
| Ordinary shares in issue | 42,147,437 | - | - | - | 42,147,437 |
| Treasury shares | 626,758 | - | - | - | 626,758 |
| Shares in circulation | 41,520,679 | - | - | - | 41,520,679 |
Under IAS/IFRS, the nominal value of treasury shares is carried directly to equity whilst the difference between the nominal value and the acquisition price of treasury shares is taken against the share premium reserve.
This was Euro 1.783 million (Euro 14.447 million at 31 December 2013) net of the reserve of Euro 2.913 million for treasury shares.
The decrease of Euro 12.664 million follows the decision of the Shareholders' Meeting of 29 April 2014 to cover the losses for the previous financial year by using the share premium reserve.
The legal reserve was Euro 7.865 million (Euro 7.865 million at 31 December 2013).
These totalled Euro 1.420 million (Euro 1.420 million at 31 December 2013). The breakdown was as follows:
This entry was negative for Euro 0.179 million (negative for Euro 0.012 million at 31 December 2013) and was for the remeasurement of the defined benefit plans net of the related tax effects.
In the financial year to 31 December 2014 the Company made a net loss of Euro 30.674 million. In the previous financial year it made a net loss of Euro 12.664 million. The accumulated losses meant that the share capital fell by more than one-third thereby placing the Company in the situation provided for under Article 2446 of the Italian Civil Code. Details of the actions taken by the Company are given in the section on "Business outlook and assessment of the Company as a going concern" in the Board of Directors' Management Report.
The table below gives a breakdown of equity and shows the possible uses and amounts available for distribution for each component, as well as any use made in previous financial years.
| Equity available and equity available for distribution | (€'000) | ||||
|---|---|---|---|---|---|
| Summary of uses | |||||
| Balance | Possible uses | Amount available | to cover losses |
for other reasons |
|
| Share capital | 41,521 | ||||
| of which treasury shares | (627) | ||||
| Capital reserves: | |||||
| Share-premium reserve | 1,783 | A,B,C | 1,783 | 55,441 | |
| Legal reserve | 5,212 | B | - | ||
| Other reserves | 895 | A,B,C | 895 | ||
| Reserves for earnings: | |||||
| Legal reserve | 2,653 | B | - | ||
| Other reserves | 525 | A,B,C | 525 | ||
| Retained earnings | (179) | - | - | ||
| Profit (loss) for period | (30,674) | - | - | ||
| Total | 21,736 | 3,203 | 55,441 | ||
| Amount unavailable for distribution | 564 | ||||
| (share-premium reserve) | |||||
| Remainder available for distribution | 2,639 |
Key A: for capital increase
B: to cover losses C: for distribution to shareholders
These were Euro 26.898 million (Euro 33.954 million at 31 December 2013):
| Bank borrowings | (€'000) | ||
|---|---|---|---|
| 31/12/14 | 31/12/13 | Change | |
| Bank borrowings | 26,898 | 33,954 | (7,056) |
| Total | 26,898 | 33,954 | (7,056) |
Non-current payables to banks were:
Some of the financial loans described above (those granted on 21 December 2012 and 6 December 2013) include financial covenants which have set a maximum level for the net debt/ equity ratio; the next assessment of this financial indicator will be in the 2015 financial year. Further details are given in Note 25.
The change compared to the previous financial year is due to the gradual repayment of noncurrent loans taken out in the past offset, in part, by the new loans.
These totalled Euro 0.220 million (Euro 0.385 million at 31 December 2013):
| Other financial liabilities | (€'000) | ||
|---|---|---|---|
| 31/12/14 | 31/12/13 | Change | |
| Finance leases | 220 | 385 | (165) |
| Total | 220 | 385 | (165) |
The entry for finance leases referred to the non-current part of the finance lease for the concession of the right to use the Festivity trademark. The change compared to the previous financial year reflected the reclassification of the current portion under other current financial liabilities.
| Provisions for risks and charges | (€'000) | ||||
|---|---|---|---|---|---|
| 31/12/13 | Provisions | Utilisation | Reclassification | 31/12/14 | |
| Provision for tax consolidation | 286 | - | - | - | 286 |
| "Palazzo Italia" Berlin project | 981 | - | - | (778) | 203 |
| Supplementary indemnity reserve for agents | 5 | - | - | - | 5 |
| Other provisions for risks and charges | 1,014 | - | 86 | - | 928 |
| Total | 2,286 | - | 86 | (778) | 1,422 |
These totalled Euro 1.422 million (Euro 2.286 million at 31 December 2013) and were as follows:
These were Euro 6.209 million (Euro 5.836 million at 31 December 2013).
They were made up of employee severance indemnities that had accrued at 31 December 2006 and were valued using actuarial methods. The change in the financial year under review is shown in the following table:
| Employee benefit provisions | (€'000) | |||
|---|---|---|---|---|
| 31/12/13 | Severance indemnities accrued |
Indemnities and advances paid |
31/12/14 | |
| Defined benefit plans | 5,836 | 464 | 91 | 6,209 |
| Total | 5,836 | 464 | 91 | 6,209 |
| Accrued severance indemnities | (€'000) | |||
| Personnel expenses: - Indemnities related to defined benefit plans |
53 | |||
| Financial expenses: - Actuarial loss |
181 | |||
| Other comprehensive income: - Remeasurement of defined benefit plans |
230 | |||
| Total | 464 |
The Company uses a duly certified professional to determine the actuarial amounts. The main hypotheses/assumptions used in the actuarial calculations for the defined benefit plans were as follows:
| Demographic assumptions | |
|---|---|
| Mortality rate | Based on the ISTAT 2011 mortality tables by gender |
| Probability of disability | Based on the disability tables used in the INPS 2010 forecast model |
| Probability of termination of employment | The probable employee turnover rate was derived from the rates of the companies being valued |
| Retirement probability | Assumption that the basic requirements needed to receive the compulsory general insurance (Assicurazione Generale |
| Probability of early retirement | Obbligatoria ) were met Assumption of 3% per annum and an average amount of 70% of the staff-leaving indemnities of all the companies valued. |
| Actuarial assumptions used to calculate severance indemnity provisions |
31/12/14 | 31/12/13 |
|---|---|---|
| Technical discount rate | 1.60% | 3.10% |
| Annual inflation rate | 1.50% | 2.00% |
| Annual rate of increase in severance indemnity provisions | 2.62% | 3.00% |
The discount rate was calculated with reference to the Eurozone Iboxx Corporate AA index for a period equal to or greater than ten years.
The following table gives sensitivity analyses for the main assumptions used to calculate the liability for defined benefit plans.
| Effect of defined benefit plans on debt | (Euro '000) | |||
|---|---|---|---|---|
| Economic and financial assumptions | Range | Base figure (excluding severance indemnities ) |
Increase in assumptions |
Decrease in assumptions |
| Annual technical discount rate | +/- 0.5% | 6,157 | 6,014 | 6,307 |
| Annual rate of increase in total employees salary | +/- 0.5% | 6,157 | 6,157 | 6,157 |
| Economic and financial assumptions | ||||
| Life expectancy | +/- 1 year | 6,157 | 6,195 | 6,118 |
Fiera Milano SpA Financial Statements to 31 December 2014 – Explanatory and Supplementary Notes to the Financial Statements and Attachments 244 Following the adoption of the amendments of IAS 19 Revised, actuarial gains and losses since the financial year ended 31 December 2011 have been recognised in equity through other comprehensive income.
This entry was zero (Euro 0.925 million at 31 December 2013).
Non-current payables to suppliers were transferred to trade payables under current liabilities.
These totalled Euro 79.562 million (Euro 54.288 million at 31 December 2013) and the breakdown was as follows:
| Bank borrowings | (€'000) | ||
|---|---|---|---|
| 31/12/14 | 31/12/13 | Change | |
| Overdrafts | 59,524 | 42,032 | 17,492 |
| Current financing | 19,531 | 12,253 | 7,278 |
| Current accounts | 507 | 3 | 504 |
| Total | 79,562 | 54,288 | 25,274 |
Bank borrowings were mainly the following:
The increase in bank borrowings reflected operational cash flows that were impacted by a decrease in negative net working capital and by lower cash flows generated by the normal business.
Bank borrowings are subject to floating rate interest.
These were Euro 22.016 million (Euro 26.065 million at 31 December 2013). Trade payables were mainly to Italian suppliers for the acquisition of services required to mount the exhibitions that is the typical business of the Company. The decrease reflected a lower number of transactions with suppliers due to the lower level of activity caused by the exhibition calendar and a different trend in payments compared to the previous financial year.
Pre-payments totalled Euro 34.843 million (Euro 31.372 million at 31 December 2013) and were pre-payments invoiced to clients for exhibitions to be held after the end of the financial year. The table on the following page gives a breakdown by exhibition. The change in pre-payments compared to the previous financial year can be explained by the biennial and multi-annual frequency of some exhibitions:
| Pre-payments | (€'000) | ||
|---|---|---|---|
| 31/12/14 | 31/12/13 | Change | |
| HOMI I semester | 12,506 | 12,789 | (283) |
| Tuttofood | 4,027 | 270 | 3,757 |
| Host | 3,483 | 1,491 | 1,992 |
| Salone del mobile/Complemento d'arredo | 1,921 | 1,335 | 586 |
| Lineapelle I semester | 1,650 | - | 1,650 |
| Plast | 1,297 | - | 1,297 |
| Mido | 1,268 | 1,018 | 250 |
| Milano Unica Primavera | 1,053 | 1,141 | (88) |
| Micam Primavera | 1,042 | 964 | 78 |
| Ipack-Ima | 981 | 12 | 969 |
| Mostra Convegno Expocomfort | 816 | 8,718 | (7,902) |
| Made Expo | 782 | - | 782 |
| Bit | 579 | 563 | 16 |
| Made in Steel | 522 | - | 522 |
| Simac Tanning-Tech | 519 | - | 519 |
| Mifur | 478 | 583 | (105) |
| Euroluce | 460 | - | 460 |
| Promotion trade exibition | 269 | 233 | 36 |
| Evento Nowadays | 140 | - | 140 |
| Meat Tech | 135 | - | 135 |
| Converflex | 116 | - | 116 |
| Sicurezza | 21 | 107 | (86) |
| Esposizione Internazionale Canina | - | 162 | (162) |
| Expodetergo | - | 344 | (344) |
| Eurocucina | - | 335 | (335) |
| Bimu | - | 325 | (325) |
| Salone Internazionale del Bagno | - | 166 | (166) |
| Xylexpo | - | 122 | (122) |
| The Innovation Cloud | - | 100 | (100) |
| Other | 778 | 594 | 184 |
| Total | 34,843 | 31,372 | 3,471 |
This entry included Euro 0.010 million (Euro 0.009 million at 31 December 2013) for related-party transactions. Further details on related-party transactions are given in Note 42.
These totalled Euro 21.850 million (Euro 20.572 million at 31 December 2013) and the breakdown was as follows:
| Other financial liabilities | (€'000) | ||
|---|---|---|---|
| 31/12/14 | 31/12/13 | Change | |
| Financial payables to the controlling shareholder | 21,683 | 20,410 | 1,273 |
| Finance leases | 167 | 162 | 5 |
| Total | 21,850 | 20,572 | 1,278 |
The entry for financial payables to the controlling shareholder showed the figure in the current account held with Fondazione Fiera Milano that was mainly for the payment of the rent for the second semester of the financial period under review.
Other financial liabilities includes Euro 21.683 million (Euro 20.410 million at 31 December 2013) for related-party transactions. Further details on related-party transactions are given in Note 42.
| Current provisions for risks and charges | (€'000) | ||||
|---|---|---|---|---|---|
| 31/12/13 | Provisions | Utilisation | Reclassification | 31/12/14 | |
| "Palazzo Italia" Berlin project | 1,492 | - | 1,355 | 778 | 915 |
| Loss on exhibitions | 111 | - | 111 | - | - |
| Other provisions for risks and charges | 132 | - | 79 | - | 53 |
| Total | 1,735 | - | 1,545 | 778 | 968 |
These were Euro 0.968 million (Euro 1.735 million at 31 December 2013) and the breakdown was the following:
These were Euro 1.178 million (Euro 1.180 million at 31 December 2013).
| Current tax liabilities | (€'000) | ||
|---|---|---|---|
| 31/12/14 | 31/12/13 | Change | |
| Income tax (IRPEF) payable for employees | 1,055 | 1,033 | 22 |
| Income tax (IRPEF) payable for temporary employees and project workers | 111 | 136 | (25) |
| Other tax liabilities | 12 | 11 | 1 |
| Total | 1,178 | 1,180 | (2) |
These were Euro 26.512 million (Euro 29.337 million at 31 December 2013).
| Other current liabilities | (€'000) | ||
|---|---|---|---|
| 31/12/14 | 31/12/13 | Change | |
| Trade payables to subsidiaries | 9,734 | 10,431 | (697) |
| Trade payables to associates | 185 | 354 | (169) |
| Other payables to the controlling shareholder | 1,076 | 1,096 | (20) |
| Payables to controlling shareholder for tax consolidation | 59 | 59 | - |
| Payables to subsidiaries for tax consolidation | 136 | 135 | 1 |
| Payables to the controlling shareholder for Group VAT | 1,859 | 585 | 1,274 |
| Payables to pension and social security entities | 1,887 | 1,873 | 14 |
| Payables to directors and statutory auditors | 52 | 48 | 4 |
| Payables to employees | 3,160 | 3,174 | (14) |
| Payables to exhibition organisers and others | 8,328 | 9,498 | (1,170) |
| Earn-out for acquisition of Fiera Milano Exhibitions Africa Pty Ltd | - | 266 | (266) |
| Earn-out for acquisition of Worldex (China) Exhibition & promotion Ltd | - | 1,785 | (1,785) |
| Deferred income | 36 | 33 | 3 |
| Total | 26,512 | 29,337 | (2,825) |
The main changes compared to the previous financial year were the following:
This entry also included Euro 13.050 million (Euro 12.660 million at 31 December 2013) for related-party transactions. Further details on related-party transactions are given in Note 42.
At 31 December 2014 the Company had net debt of Euro 122.241 million (net debt of Euro 101.133 million at 31 December 2013) as shown in the following table. Where applicable, the part referring to related-party transactions is shown separately for each entry.
| Net Financial Position (€'000) |
31/12/14 | 31/12/13 |
|---|---|---|
| A. Cash (including bank balances) | 3,564 | 5,921 |
| B. Other cash equivalents | - | - |
| C. Securities held for trading | - | - |
| D. Cash and cash equivalents (A+B+C) | 3,564 | 5,921 |
| E. Current financial assets | 2,725 | 2,145 |
| - E.1 of which current financial receivables from the controlling shareholder | - | - |
| - E.2 of which current financial receivables from the subsidiaries | 2,725 | 1,511 |
| - E.3 of which current financial receivables from joint ventures | - | 634 |
| F. Current bank borrowings | 60,031 | 42,035 |
| G. Current portion of non-current debt | 19,531 | 12,253 |
| H. Other current financial liabilities | 21,850 | 20,572 |
| - H.1 of which current financial payables to the controlling shareholder | 21,683 | 20,410 |
| I. Current financial debt (F+G+H) | 101,412 | 74,860 |
| J. Net current financial debt (cash) (I-E-D) | 95,123 | 66,794 |
| K. Non-current bank borrowings | 26,898 | 33,954 |
| L. Debt securities in issue | - | - |
| M. Other non-current liabilities | 220 | 385 |
| N. Non-current net financial debt (K+L+M) | 27,118 | 34,339 |
| Net financial debt (cash) from continuing operations (J+N) | 122,241 | 101,133 |
| Net financial debt (cash) from discontinued operations | - | - |
| O. Net financial debt (cash) | 122,241 | 101,133 |
Net debt increased by Euro 21.108 million and reflected operational cash flows that were impacted by a decrease in negative net working capital and lower cash flows generated by the normal business.
Additional information on the financial instruments of the Company is given below to enable a better assessment of:
a) the importance of financial instruments for the Statement of Financial Position and Income Statement;
Fiera Milano SpA Financial Statements to 31 December 2014 – Explanatory and Supplementary Notes to the Financial Statements and Attachments 249 b) the significance and type of risks deriving from the financial instruments to which the Company was exposed during the financial year under review and the previous financial year and the relevant risk management procedures.
The items in the Statement of Financial Position and the types of risk related to financial instruments at 31 December 2013 and 31 December 2014 are shown in the following table:
| Risk class | ||||||
|---|---|---|---|---|---|---|
| (€'000) | Notes | Balance at 31/12/2013 |
Balance at 31/12/2014 |
Liquidity risk |
Interest rate risk |
Credit risk |
| NON-CURRENT ASSETS | ||||||
| 1) Trade and other receivables | 6 | 13,857 | 13,271 | X | ||
| CURRENT ASSETS | ||||||
| 2) Trade and other receivables | 8 | 40,430 | 38,754 | X | ||
| 3) Current financial assets | 10 | 2,145 | 2,725 | X | ||
| 4) Cash and cash equivalents | 11 | 5,921 | 3,564 | X | ||
| NON-CURRENT LIABILITIES | ||||||
| 5) Bank borrowings | 13 | 33,954 | 26,898 | X | X | |
| 6) Other financial liabilities | 14 | 385 | 220 | X | X | |
| 7) Other non-current liabilities | 17 | 925 | - | X | ||
| CURRENT LIABILITIES | ||||||
| 8) Bank borrowings | 18 | 54,288 | 79,562 | X | X | |
| 9) Trade payables | 19 | 26,065 | 22,016 | X | ||
| 10) Other financial liabilities | 21 | 20,572 | 21,850 | X | X | |
| 11) Other current liabilities | 24 | 29,337 | 26,512 | X |
Financial instruments and their relative significance, as regards the Statement of Financial Position and Income Statement at 31 December 2013 and 31 December 2014, are shown in the following tables:
| Financial assets and liabilities shown in the accounts (€'000) |
Notes | FY 31/12/2013 |
Assets at fair value (a) through profit and loss |
Loans and receivables |
Investments held to maturity |
Liabilities at amortised cost |
Fair value | Impact on Income Statement |
|---|---|---|---|---|---|---|---|---|
| NON-CURRENT ASSETS | ||||||||
| 1) Trade and other receivables | 6 | 13,857 | - | 13,857 | - | - | 13,857 | 320 |
| CURRENT ASSETS | ||||||||
| 2) Trade and other receivables | 8 | 40,430 | - | 40,430 | - | - | 40,430 | (1,153) |
| 3) Current financial assets | 10 | 2,145 | - | 2,145 | - | - | 2,145 | 61 |
| 4) Cash and cash equivalents | 11 | 5,921 | - | 5,921 | - | - | 5,921 | 17 |
| NON-CURRENT LIABILITIES | ||||||||
| 5) Bank borrowings | 13 | 33,954 | - | - | - | 33,954 | 33,954 | (1,059) |
| 6) Other financial liabilities | 14 | 385 | - | - | - | 385 | 385 | - |
| 7) Other non-current liabilities | 17 | 925 | - | - | - | - | 925 | - |
| CURRENT LIABILITIES | ||||||||
| 8) Bank borrowings | 18 | 54,288 | - | - | - | 54,288 | 54,288 | (1,923) |
| 9) Trade payables | 19 | 26,065 | - | - | - | 26,065 | 26,065 | - |
| 10) Other financial liabilities | 21 | 20,572 | - | - | - | 20,572 | 20,572 | (999) |
| 11) Other current liabilities | 24 | 29,337 | - | - | - | 27,227 | 29,337 | - |
| (a) Fair value at the recognition date |
| Financial assets and liabilities shown in the accounts |
Notes | FY 31/12/2014 |
Assets at fair value (a) through profit and loss |
Loans and receivables |
Investments held to maturity |
Liabilities at amortised cost |
Fair value | Impact on Income Statement |
|---|---|---|---|---|---|---|---|---|
| (€'000) | ||||||||
| NON-CURRENT ASSETS 1) Trade and other receivables |
6 | 13,271 | - | 13,271 | - | - | 13,271 | 127 |
| CURRENT ASSETS | ||||||||
| 2) Trade and other receivables | 8 | 38,754 | - | 38,754 | - | - | 38,754 | (753) |
| 3) Current financial assets | 10 | 2,725 | - | 2,725 | - | - | 2,725 | 94 |
| 4) Cash and cash equivalents | 11 | 3,564 | - | 3,564 | - | - | 3,564 | 17 |
| NON-CURRENT LIABILITIES | ||||||||
| 5) Bank borrowings | 13 | 26,898 | - | - | - | 26,898 | 26,898 | (1,725) |
| 6) Other financial liabilities | 14 | 220 | - | - | - | 220 | 220 | - |
| 7) Other non-current liabilities | 17 | - | - | - | - | - | - | - |
| CURRENT LIABILITIES | ||||||||
| 18 | 79,562 | - | - | - | 79,562 | 79,562 | (1,490) | |
| 8) Bank borrowings | 19 | 22,016 | - | - | - | 22,016 | 22,016 | - |
| 9) Trade payables | 21 | 21,850 | - | - | - | 21,850 | 21,850 | (1,197) |
| 10) Other financial liabilities | 24 | 26,512 | - | - | - | 26,453 | 26,512 | - |
| 11) Other current liabilities | ||||||||
| (a) Fair value at the recognition date |
As shown in the above tables, the carrying value of financial assets and liabilities is a reasonable approximation of their fair value; most of the financial instruments are current investments and borrowings and where non-current instruments have been used these have not been subject to significant contingent charges. These are classified in Level 3 of the fair value hierarchy under IFRS 13.
The main financial instruments of the Company are bank borrowings, current accounts and current financial payables from the controlling shareholder Fondazione Fiera Milano.
Fiera Milano SpA has a favourable cash management cycle from the business of renting exhibition space to organisers and offering administrative and cash management services, receiving on behalf of the organisers everything that the exhibitors pay the organiser. After receiving the cash, Fiera Milano SpA, depending on the contractual agreements, retrocedes to the organiser what is its due and keeps the payment for the space rented out in the exhibition venues. The suppliers of goods and services are paid using normal payment conditions. This system allows the Company to receive in advance the sums it is due and thereby generate negative working capital, which, in turn, gives a cash surplus.
The Company is exposed to the following different types of risk.
Credit risk is represented by the Company's exposure to potential losses from the non-fulfilment of obligations undertaken by counterparties. Credit risk is adequately monitored and also that pertaining to the cash management that characterises the business of the Company. Fiera Milano SpA hosts and organises exhibitions that are leaders in their sector and, therefore, the loyalty of exhibitors is high. For Fiera Milano SpA, the current system means that all receipts from exhibitors flow into the Fiera Milano SpA accounts and it is Fiera Milano SpA that retrocedes to its clients/organisers the amounts due them.
Three different categories of credit risk have been identified: organisers, exhibitors and other receivables.
The first category is the exhibition organisers; the receivables included in this category are considered to represent the lowest risk as Fiera Milano SpA, manages the cash flows of all the exhibitions at the two sites. Provisions for doubtful receivables are minimal in comparison to the amounts received and have mainly been made because the current credit environment appears to indicate that their recovery will prove difficult.
The second risk category is the exhibitors; the receivables from this category are considered medium risk as exhibitors normally have to make payment before the end of the exhibition.
The third risk category is other receivables, which mainly comprises exhibition-related activities (stand-fitting, congresses, promotions, internet services) and activities that are not exhibitionrelated (sponsorship, advertising, etc.). These receivables are payable under normal payment conditions.
The categories of credit risk at 31 December 2013 and at 31 December 2014 and the breakdown of overdue payments are shown in the following tables:
| (€'000) | FY | Breakdown of late payments (days) | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Class | 31/12/2013 Receivables |
Due | Overdue | 0-90 | 91-180 | 181-270 | >270 | Provision | ||
| Organisers | 6,443 | 3,028 | 4,537 | 3,820 | 17 | 53 | 647 | 1,122 | ||
| Exhibitors | 18,512 | 2,373 | 18,334 | 13,552 | 555 | 698 | 3,529 | 2,195 | ||
| Other | 11,746 | 6,699 | 7,121 | 2,957 | 338 | 493 | 3,333 | 2,074 | ||
| Total | 36,701 | 12,100 | 29,992 | 20,329 | 910 | 1,244 | 7,509 | 5,391 |
| (€'000) | FY | Breakdown of late payments (days) | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Class | 31/12/2014 Receivables |
Due | Overdue | 0-90 | 91-180 | 181-270 | >270 | Provision | ||
| Organisers | 5,539 | 2,209 | 4,685 | 1,756 | 426 | 140 | 2,363 | 1,355 | ||
| Exhibitors | 15,735 | 318 | 17,340 | 12,348 | 844 | 632 | 3,516 | 1,923 | ||
| Other | 8,330 | 5,975 | 4,187 | 762 | 492 | 170 | 2,763 | 1,832 | ||
| Total | 29,604 | 8,502 | 26,212 | 14,866 | 1,762 | 942 | 8,642 | 5,110 |
The provision for doubtful receivables is based on presumed recoverability, using internal assessments supported by those of external legal consultants.
The category of receivables that exceed 270 days increased due to doubtful receivables which have already been discounted and that, in previous financial years, were in the category of 0-90 days overdue.
Changes in the provision for doubtful receivables at 31 December 2013 and 31 December 2014 with a breakdown by risk category are given in the following table:
| (€'000) | FY 31/12/2013 | FY 31/12/2014 | ||
|---|---|---|---|---|
| Class | Provision | Provisions | Utilisation | Provision |
| Organisers | 1,122 | 233 | - | 1,355 |
| Exhibitors | 2,195 | 402 | 674 | 1,923 |
| Other | 2,074 | 123 | 365 | 1,832 |
| Total | 5,391 | 758 | 1,039 | 5,110 |
Although the Company has taken measures to ensure that it has adequate levels of working capital and liquidity, a potential drop in the volumes of business also caused by the seasonality and cyclicality that characterise the exhibition business can affect the financial results and its cash flow generation ability.
Financial requirements are normally affected both by seasonality from one financial year to the next and within one financial year caused by the exhibition calendar and by higher cash absorption in the summer months of July and August with a gradual return to more normal levels for the Company in subsequent months. Moreover, the significant losses generated in the 2014 and 2013 financial periods have resulted in a substantial decrease in equity causing an imbalance in the ratios of net debt and the Company now finds itself in the situation under Article 2446 of the Italian Civil Code.
As already described in Note 25, the level of financial debt at 31 December 2014 increased compared to the end of the previous financial year and went from Euro 101.133 million to Euro 122.241 million. This was mainly due to the trend in operating cash flows and the unfavourable exhibition calendar in the financial year under review. The higher level of debt was primarily reflected in the increase in short-term bank borrowing.
The aim of risk management at Fiera Milano SpA is to guarantee an adequate level of liquidity, minimising the opportunity cost and maintaining a balance in terms of the duration and composition of debt. Over the years, the Company, in order to cover the investments made, has taken out a series of loans of two to five years that have decreased current bank borrowings in favour of non-current bank borrowings.
The Company reasonably expects to continue this strategy in the 2015 financial period to cover its financial requirements that, which also stem from the expiry of some bank loans in the current financial year.
As described in Note 13, some of the loans made to the Company are governed by financial covenants that are assessed annually; the next assessment of the financial ratios will take place in 2015 as, during 2014, the financial institutions that provided the loans agreed to redefine the terms of the existing agreements and to postpone the need to meet the required financial ratios.
Moreover, in January 2015, as part of the measures to meet cash requirements, the Parent Company agreed a current loan of Euro 15.000 million governed by financial covenants that involve certain financial ratios being met on both a six-monthly and an annual basis. Loans made by financial institutions, together with the operating cash flow, are considered to provide an adequate level of liquidity to meet financial requirements in the short-term although it cannot be excluded that there will be peaks of cash absorption particularly in the summer months when no exhibitions are held.
Steps have already been taken also to achieve the primary aim of a more balanced level of noncurrent debt despite the forecast of a high level of current debt also in the 2015 financial year. It is reasonable to expect that this initiative that follows similar ones in previous financial periods could involve a further request for contractual changes in the financial covenants mentioned above.
In the absence of extraordinary transactions, maintaining the financial equilibrium of the Company is linked to attaining the targets of the Industrial Plan, as well as to the performance of the economy, forecasts for which necessitate an assessment of the outcome of future events and circumstances that by their very nature are uncertain.
The tables below give the breakdown of financial liabilities and their duration and the outstanding interest payable to maturity at 31 December 2013 and at 31 December 2014.
| Financial liabilities | FY at | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| (€' 000) | 31/12/2013 | 3 mths | 6 mths | 12 mths 18 mths 24 mths | 3 years | 5 years | >5 years | ||
| Current bank payables | 54,288 | 43,959 | 4,173 | 6,156 | |||||
| Current interest payable | 576 | 397 | 708 | ||||||
| Other current financial liabilities | 20,572 | 20,493 | 79 | ||||||
| Current interest payable | 94 | 8 | |||||||
| Non-current bank borrowings | 33,954 | 6,174 | 6,239 | 10,583 | 10,958 | ||||
| Non-current interest payable | 598 | 501 | 684 | 368 | |||||
| Other non-current financial liabilities | 385 | 84 | 82 | 170 | 49 | ||||
| Non-current interest payable | 5 | 5 | 5 | 1 | |||||
| Trade payables | 26,065 | 26,065 | |||||||
| Total | 135,264 | 91,187 | 4,570 | 6,951 | 6,861 | 6,827 | 11,442 | 11,376 | - |
| Financial liabilities | FY at | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| (€' 000) | 31/12/2014 | 3 mths | 6 mths | 12 mths 18 mths 24 mths | 3 years | 5 years | >5 years | ||
| Current bank payables | 79,562 | 61,910 | 7,787 | 9,865 | |||||
| Current interest payable | 452 | 468 | 612 | ||||||
| Other current financial liabilities | 21,850 | 11,084 | 10,684 | 82 | |||||
| Current interest payable | 120 | 66 | 5 | ||||||
| Non-current bank borrowings | 26,898 | 9,900 | 6,114 | 8,722 | 2,162 | ||||
| Non-current interest payable | 457 | 309 | 311 | 40 | |||||
| Other non-current financial liabilities | 220 | 86 | 85 | 49 | |||||
| Non-current interest payable | 3 | 2 | 1 | ||||||
| Trade payables | 22,016 | 22,016 | |||||||
| Total | 150,546 | 95,582 | 19,005 | 10,564 | 10,446 | 6,510 | 9,083 | 2,202 | - |
The Company reserves the right to use appropriate hedging instruments were the market risks to become significant.
The Company has access to credit lines at competitive rates and is able to manage interest rate fluctuations. Moreover, the Company constantly monitors market conditions so as to intervene promptly should conditions change.
Reference should be made to Notes 13 and 18 for a breakdown of current and non-current bank borrowings.
The tables below give interest rate sensitivity analyses that show the effect of a +0.5% and a - 0.5% change in interest rates on financial income and expenses in equity and the Income Statement for the 2013 and 2014 financial years.
| (€'000) | Balance at 31/12/2013 |
Balance * (debt) |
Income (expense) |
Rate | 0.5% | -0.5% |
|---|---|---|---|---|---|---|
| Current accounts | 5,822 | 6,145 | 17 | 0.28% | 48 | (14) |
| Current financial receivables from subsidiaries | 2,145 | 1,648 | 61 | 3.70% | 69 | 53 |
| Correspondence account | (20,410) | (31,336) | (980) | 3.13% (1,137) | (824) | |
| Current financial liabilities | (42,032) | (55,133) | (1,918) | 3.48% (2,194) (1,643) | ||
| Current and non-current bank borrowings | (46,210) | (32,333) | (1,064) | 3.29% (1,225) | (902) | |
| Other current and non-current financial liabilities | (547) | (622) | (19) | 3.05% | (22) | (16) |
| *average for the financial year |
| (€'000) | Balance at 31/12/2014 |
Balance * (debt) |
Income (expense) |
Rate | 0.5% | -0.5% |
|---|---|---|---|---|---|---|
| Current accounts | 3,448 | 5,693 | 17 | 0.30% | 46 | (11) |
| Current financial receivables from subsidiaries | 2,725 | 2,128 | 94 | 4.42% | 105 | 83 |
| Correspondence account | (21,683) | (39,042) | (1,183) | 3.03% (1,378) | (988) | |
| Current financial liabilities | (59,524) | (47,049) | (1,490) | 3.17% (1,727) (1,256) | ||
| Current and non-current bank borrowings | (46,936) | (49,618) | (1,725) | 3.48% (1,975) (1,479) | ||
| Other current and non-current financial liabilities | (387) | (421) | (14) | 3.33% | (16) | (12) |
| *average for the financial year |
This remained relatively insignificant in the financial year to 31 December 2014; the Company's activities were mainly focused on the domestic market and it had no bank borrowings in foreign currencies.
Fiera Milano SpA has limited exposure to the risk of changes in raw material prices. The Group normally has more than one supplier for any material considered critical and in some cases has long-term contracts that ensure lower price volatility.
These totalled Euro 1.474 million (Euro 1.322 million at 31 December 2013) and the breakdown is as follows:
An adverse outcome to the legal procedures in which the Company is currently involved where the result is currently uncertain could, according to the legal advice taken, result in potential costs of approximately Euro 0.500 million.
Revenues from sales and services were Euro 181.098 million (Euro 194.523 million at 31 December 2013).
The breakdown of revenues was as follows:
| Revenues from sales and services | (€'000) | ||
|---|---|---|---|
| 2014 | 2013 | Change | |
| Facility fee for use of exhibition centre | 69,706 | 60,758 | 8,948 |
| Rent of space to exhibitors | 35,675 | 59,271 | (23,596) |
| Rentals of stands, fittings, and equipment | 28,786 | 26,274 | 2,512 |
| Catering and canteen services | 18,447 | 18,769 | (322) |
| Miscellaneous fees and royalties | 7,738 | 6,944 | 794 |
| Exhibition site services | 5,744 | 5,795 | (51) |
| Advertising space and services | 4,934 | 5,264 | (330) |
| Exhibition insurance services | 2,171 | 2,290 | (119) |
| Access surveillance and customer care services | 2,165 | 1,861 | 304 |
| Supplementary exhibition services | 1,867 | 2,304 | (437) |
| Facility fees for use of conference centre | 1,056 | 850 | 206 |
| Telephone and internet services | 917 | 763 | 154 |
| Ticket sales | 502 | 1,561 | (1,059) |
| Administrative services | 481 | 292 | 189 |
| Services from event organisation | 274 | - | 274 |
| Revenues from publishing products | 21 | 844 | (823) |
| Other | 614 | 683 | (69) |
| Total | 181,098 | 194,523 | (13,425) |
The decrease in revenues reflects the decline in the square metres of exhibition space occupied caused by the different exhibition calendar: in 2013, this included the biennial exhibitions held in uneven-numbered years TUTTOFOOD, HOST and Made Expo (which became a biennial exhibition starting from 2013); and the drop in demand for exhibition space, which particularly affected the annual directly organised exhibitions HOMI January and Bit. This trend was only partly compensated by the hosted exhibitions held in even-numbered years Mostra Convegno Expocomfort and Xylexpo, by Lineapelle held for the first time in the fieramilano exhibition site, and by increases at some of the annual exhibitions that are hosted, such as the Salone del Mobile and the exhibitions in the fashion sector.
There was an increase in the facility fees for the use of exhibition areas from the hosted biennial exhibitions held in even-numbered years while the absence of the directly organised exhibitions held in uneven-numbered years resulted in a decrease in the rent of space to exhibitors.
Revenues from sales and services includes Euro 4.919 million (Euro 4.758 million at 31 December 2013) for related-party transactions. Further details on related-party transactions are given in Note 42.
The business is almost exclusively focused on the domestic market.
These were Euro 0.818 million (Euro 1.005 million at 31 December 2013).
The breakdown was as follows:
| Cost of materials | (€'000) | ||
|---|---|---|---|
| 2014 | 2013 | Change | |
| Printed materials, forms and stationery | 604 | 755 | (151) |
| Subsidiary materials and consumables | 214 | 250 | (36) |
| Total | 818 | 1,005 | (187) |
This entry includes Euro 0.001 million (Euro 0.023 million at 31 December 2013) for related-party transactions. Further details on related-party transactions are given in Note 42.
These totalled Euro 107.929 million (Euro 107.032 million at 31 December 2013).
The breakdown was as follows:
| Cost of services | (€'000) | ||
|---|---|---|---|
| 2014 | 2013 | Change | |
| Stands and equipment for exhibitions | 34,344 | 31,175 | 3,169 |
| Catering | 12,392 | 13,166 | (774) |
| Cost of marketing projects for exhibitions | 9,490 | 6,867 | 2,623 |
| Energy costs | 8,453 | 9,188 | (735) |
| Technical, legal, commercial and administrative services | 7,469 | 6,239 | 1,230 |
| Maintenance | 5,754 | 6,207 | (453) |
| Security and gate services | 4,616 | 4,754 | (138) |
| IT services | 3,982 | 4,912 | (930) |
| Cleaning and waste disposal | 3,840 | 4,028 | (188) |
| Insurance | 2,875 | 2,948 | (73) |
| Advertising | 2,432 | 2,335 | 97 |
| Other professional and collaborative services | 2,208 | 3,282 | (1,074) |
| Telephone and internet expenses | 1,309 | 1,298 | 11 |
| Technical assistance and ancillary services | 1,165 | 1,340 | (175) |
| Transport | 667 | 660 | 7 |
| Ticketing | 381 | 396 | (15) |
| Remuneration of statutory auditors | 88 | 88 | - |
| Conference and congress services | 18 | 220 | (202) |
| Change in suspended costs for future exhibitions | (1,712) | 522 | (2,234) |
| Other | 8,158 | 7,407 | 751 |
| Total | 107,929 | 107,032 | 897 |
The entry for costs of services was mainly composed of costs for managing the exhibition sites during the setting up, running and dismantling of exhibitions and congresses.
The main changes were as follows:
The entry includes Euro 33.563 million (Euro 29.853 million at 31 December 2013) for relatedparty transactions. Further details on related-party transactions are given in Note 42.
This totalled Euro 51.898 million (Euro 58.809 million at 31 December 2013) and the breakdown was as follows:
| Cost of use of third-party assets | (€'000) | ||
|---|---|---|---|
| 2014 | 2013 | Change | |
| Rent and expenses for exhibition sites | 49,239 | 56,072 | (6,833) |
| Other rental expenses | 2,115 | 2,115 | - |
| Vehicle hire | 527 | 582 | (55) |
| Office equipment and photocopier hire | 17 | 40 | (23) |
| Total | 51,898 | 58,809 | (6,911) |
The item, rent and expenses for exhibition sites, included the Euro 48.919 million rent payable to the controlling shareholder Fondazione Fiera Milano, whilst other rental expenses included Euro 1.924 million under the lease agreement for the Palazzo Italia in Berlin.
The change was mainly due to the decrease in the rent payable for the fieramilano exhibition site under the new lease agreement. The rental payments are recognised on a straight-line basis over the length of the contract. Greater detail is given in Note 42 on related-party transactions.
The entry includes Euro 49.320 million (Euro 55.756 million at 31 December 2013) for relatedparty transactions. Further details on related-party transactions are given in Note 42.
These totalled Euro 34.990 million (Euro 34.180 million at 31 December 2013) and the breakdown was as follows:
| Personnel expenses | (€'000) | ||
|---|---|---|---|
| 2014 | 2013 | Change | |
| Salaries | 22,860 | 22,108 | 752 |
| Social Security payments | 7,322 | 6,946 | 376 |
| Defined contribution plans charges | 1,527 | 1,457 | 70 |
| Directors' remuneration | 1,025 | 994 | 31 |
| Seconded employees from subsidiares | 1,008 | 934 | 74 |
| External and temporary employees | 508 | 554 | (46) |
| Redundancy incentives | 101 | 661 | (560) |
| Defined benefit plans charges | 53 | 49 | 4 |
| Other expenses | 586 | 477 | 109 |
| Total | 34,990 | 34,180 | 810 |
Fiera Milano SpA Financial Statements to 31 December 2014 – Explanatory and Supplementary Notes to the Financial Statements and Attachments 259 The entry includes Euro 1.008 million (Euro 0.934 million at 31 December 2013) for related-party transactions. Further details on related-party transactions are given in Note 42.
A breakdown of employees by category (including those on fixed-term contracts) is given in the following table:
| 2014 | 2013 | Change | |
|---|---|---|---|
| Managers | 32 | 32 | - |
| Middle managers and white collar workers | 415 | 408 | 7 |
| Total | 447 | 440 | 7 |
In the past, Fiera Milano SpA has had option plans aimed at incentivising the managers of the Company and increasing employee loyalty.
At the date of the present Financial Statements, no stock option plan exists.
These were Euro 4.757 million (Euro 5.812 million at 31 December 2013) and the breakdown was as follows:
| Other operating expenses | (€'000) | ||
|---|---|---|---|
| 2014 | 2013 | Change | |
| Other tax expenses | 3,098 | 3,506 | (408) |
| Doubtful receivables covered by provisions | 1,039 | 1,503 | (464) |
| Association fees | 323 | 290 | 33 |
| Subscriptions | 34 | 25 | 9 |
| Other expenses | 263 | 488 | (225) |
| Total | 4,757 | 5,812 | (1,055) |
The main changes were:
The entry includes Euro 1.310 million (Euro 1.373 million at 31 December 2013) for related-party transactions. Further details on related-party transactions are given in Note 42.
This totalled Euro 6.406 million (Euro 7.327 million at 31 December 2013) and the breakdown was as follows:
| Other income | (€'000) | ||
|---|---|---|---|
| 2014 | 2013 | Change | |
| Other recovered costs | 2,019 | 2,125 | (106) |
| Office rent and expenses | 1,783 | 1,751 | 32 |
| Recovery of expenses for seconded employees | 955 | 634 | 321 |
| Insurance indemnities | 23 | 188 | (165) |
| Share of contributions to internationalisation intiative | - | 1,200 | (1,200) |
| Other income | 1,626 | 1,429 | 197 |
| Total | 6,406 | 7,327 | (921) |
The decrease in this item was mainly due to a one-off payment from Fondazione Fiera Milano for its share of the internationalisation initiatives for the exhibition HOST in the previous financial year.
The entry includes Euro 3.858 million (Euro 4.794 million at 31 December 2013) for related-party transactions. Further details on related-party transactions are given in Note 42.
This was Euro 2.665 million (Euro 3.890 million at 31 December 2013).
Details of depreciation are given in the Explanatory notes to the Financial Statements under the entry for property, plant and machinery.
This was Euro 4.675 million (Euro 4.329 million at 31 December 2013).
Details of amortisation are given in the Explanatory notes to the Financial Statements under the entry for intangible assets with a finite useful life.
These were negative for Euro 1.912 million (negative for Euro 1.532 million at 31 December 2013) and the breakdown was as follows:
| Write down of doubtful receivables and other provisions | (€'000) | ||
|---|---|---|---|
| 2014 | 2013 | Change | |
| Write-down of doubtful receivables | (281) | (343) | 62 |
| provisions | 758 | 1,160 | (402) |
| utilisation | (1,039) | (1,503) | 464 |
| Palazzo Italia project | (1,355) | 206 | (1,561) |
| provisions | - | 1,864 | (1,864) |
| utilisation | (1,355) | (1,658) | 303 |
| Disputes with personnel | - | (250) | 250 |
| provisions | - | 46 | (46) |
| utilisation | - | (296) | 296 |
| Personnel reorganisation | - | (475) | 475 |
| provisions | - | - | - |
| utilisation | - | (475) | 475 |
| Losses on future exhibitions | (111) | (627) | 516 |
| provisions | - | 111 | (111) |
| utilisation | (111) | (738) | 627 |
| Other disputes | (165) | (43) | (122) |
| provisions | - | 79 | (79) |
| utilisation | (165) | (122) | (43) |
| Total | (1,912) | (1,532) | (380) |
Further details on the changes in the provision for risks and charges may be found in Notes 15 and 22 to the Statement of Financial Position.
This totalled Euro 2.096 million (Euro 2.837 million at 31 December 2013) and the breakdown was as follows:
| Financial income and similar | (€'000) | ||
|---|---|---|---|
| 2014 | 2013 | Change | |
| Dividends | 1,797 | 2,067 | (270) |
| Interest income from cautionary deposits for rent of the | |||
| exhibition sites from the controlling shareholder | 117 | 320 | (203) |
| Interest income on financing granted to subsidiaries | 94 | 39 | 55 |
| Interest income on bank accounts | 17 | 17 | - |
| Interest income on receivables to subsidiaries | 11 | - | 11 |
| Exchange rate gains | 7 | 173 | (166) |
| Interest income on financing to joint venture companies | - | 22 | (22) |
| Other financial income | 53 | 199 | (146) |
| Total | 2,096 | 2,837 | (741) |
This entry included Euro 2.019 million (Euro 2.448 million at 31 December 2013) for related-party transactions. Further details on related-party transactions are given in Note 42.
This was Euro 4.739 million (Euro 4.235 million at 31 December 2013) and the breakdown was as follows:
| Financial expenses and similar | (€'000) | ||
|---|---|---|---|
| 2014 | 2013 | Change | |
| Interest payable on bank accounts Interest payable on current account held with the |
3,242 | 3,004 | 238 |
| controlling shareholder Fondazione Fiera Milano Expenses from calculation of net present value of |
1,183 | 980 | 203 |
| defined benefit plans | 181 | 161 | 20 |
| Exchange rate losses | 8 | 1 | 7 |
| Other financial expenses | 125 | 89 | 36 |
| Total | 4,739 | 4,235 | 504 |
The change mainly reflected higher financial expenses due to the higher average level of debt.
Other financial expenses mainly included the costs deriving from calculating the net present value of debt.
This entry includes Euro 1.183 million (Euro 0.980 million at 31 December 2013) for related-party transactions. Further details on related-party transactions are given in Note 42.
| Valuation of financial assets | (€'000) | ||
|---|---|---|---|
| 2014 | 2013 | Change | |
| Fiera Milano Media SpA | (11,135) | - | (11,135) |
| Eurofairs International Consultoria e Participações Ltda | (3,807) | (1,544) | (2,263) |
| Fiera Milano India Pvt Ltd | - | (367) | 367 |
| Milan International Exhibitions Srl | - | (290) | 290 |
| Total | (14,942) | (2,201) | (12,741) |
This entry was negative for Euro 14.942 million (negative for Euro 2.201 million at 31 December 2013) and was for the impairment charges already described in Note 5 to the Statement of Financial Position.
The income tax entry for the year was positive for Euro 5.227 million (positive for Euro 2.612 million at 31 December 2013).
The breakdown was as follows:
| Income tax | (€'000) | ||
|---|---|---|---|
| 2014 | 2013 | Change | |
| Current income tax | (1,124) | 274 | (1,398) |
| Deferred income tax | (4,103) | (2,886) | (1,217) |
| Total | (5,227) | (2,612) | (2,615) |
The breakdown of current taxes at 31 December 2014 was as follows:
Fiera Milano SpA Financial Statements to 31 December 2014 – Explanatory and Supplementary Notes to the Financial Statements and Attachments 263
| Current income tax | (€'000) | ||
|---|---|---|---|
| 2014 | 2013 | Change | |
| Current income tax - IRAP | 12 | 437 | (425) |
| Current income tax - IRES | 32 | 44 | (12) |
| Income/expenses from tax consolidation | (1,168) | (207) | (961) |
| Total | (1,124) | 274 | (1,398) |
Since the 2007 financial period, Fiera Milano SpA, acting as the consolidating entity, and all the Italian subsidiaries have opted for the Italian national tax consolidation for payment of IRES.
In the financial period 2004/2005, Fiera Milano SpA and some of its Subsidiaries opted to be part of the tax consolidation of the controlling shareholder Fondazione Fiera Milano but, following the change in the end of the reporting period of Fiera Milano SpA and all its subsidiaries, the requirement for the financial year to agree with that of the consolidating entity meant that participation in this tax consolidation ceased. Nevertheless there still exist contractual obligations with Fondazione Fiera Milano which are referred to the entry Provision for tax consolidation.
The income from the tax consolidation was the result of offsetting the tax of some consolidated companies with the tax losses carried forward of Fiera Milano SpA.
The deferred tax balance in the financial year under review was positive for Euro 4.103 million and was the balance of deferred tax assets (of Euro 4.022 million) and deferred tax liabilities (of Euro 0.081 million).
At 31 December 2014, deferred tax assets were mainly pre-paid taxes on tax losses in the financial year that were recognised against a valuation of their recoverability within the time horizons of the approved plans. There was also an effect from the use of pre-paid taxes taken in earlier financial years to the provision for risks and charges, recognition of which was deferred until they were used. Deferred tax liabilities were mainly for tax amortisation of goodwill.
The breakdown of deferred tax assets and deferred tax liabilities was as follows:
| Deferred income taxes | (€'000) | |||
|---|---|---|---|---|
| 31/12/13 | Effect of non-recurring transactions |
Recognised in the Income Statement |
31/12/14 | |
| Deferred tax assets | ||||
| Excess amortisation, depreciation and write-downs | 575 | (61) | - | 514 |
| Provisions for risks and charges | 2,143 | (514) | - | 1,629 |
| Tax losses carried forward | 9,992 | 4,704 | - | 14,696 |
| Other temporary differences | 590 | (107) | - | 483 |
| Total | 13,300 | 4,022 | - | 17,322 |
| Deferred tax liabilities | ||||
| Goodwill and other amortisation | 10,903 | 33 | - | 10,936 |
| Other temporary differences | 225 | (114) | (63) | 48 |
| Total | 11,128 | (81) | (63) | 10,984 |
| Net deferred taxes | 2,172 | 4,103 | 63 | 6,338 |
| of which: Tax assets for deferred taxes | 13,300 | 17,322 | ||
| Deferred tax liabilities | 11,128 | 10,984 |
The breakdown of total theoretical deferred tax assets relating to tax losses carried forward was:
| Reconciliation of theoretical and effective corporation tax charge (IRES) | |
|---|---|
| (€'000) |
| Profit/(loss) before income tax | (35,901) |
|---|---|
| Percentage applicable for corporation income tax (IRES) | 27.5% |
| Theoretical IRES tax charge (corporation income tax) | (9,873) |
| Difference between theoretical and effective tax charges: | |
| Non-deductible operating expenses | 4,964 |
| Shares of dividends not subject to tax | (493) |
| Uses of tax losses in preceding financial years | 1,168 |
| Tax subject to separate treatment | 32 |
| Effect of tax consolidation | (1,168) |
| Effective IRES tax charge | (5,370) |
| (€'000) | |
|---|---|
| Net operating result (EBIT) | (18,315) |
|---|---|
| Personnel expenses | 34,990 |
| Taxable base for purposes of IRAP | 16,675 |
| Statutory rate applicable for corporation income tax (IRAP) | 3.9% |
| Theoretical IRAP tax charge (corporation income tax) | 650 |
| Difference between theoretical and effective tax charges: | |
| Effect of tax wedge | (506) |
| Other | (1) |
| Effective IRAP tax charge | 143 |
The entry for income taxes included a positive figure of Euro 1.168 million (positive for Euro 0.207 million at 31 December 2013) for related-party transactions. Further details are given in Note 42 on related-party transactions.
At 31 December 2014, the Company made a net loss of Euro 30.674 million compared to a net loss of Euro 12.664 million at 31 December 2013.
As part of its corporate governance, Fiera Milano SpA has adopted Principles of Conduct regarding Related-party Transactions as described in the Report on corporate governance and ownership structure, which is part of the Board of Directors' Management Report in the Financial Statements.
Transactions between Fiera Milano SpA and related parties were carried out at market conditions.
In the Statement of Financial Position, the Statement of Comprehensive Income and the Statement of Cash Flows, the amounts for related-party positions or transactions, if material, are shown separately. Given the total amount of statement of financial position and income statement items, Fiera Milano SpA has decided that Euro 2.000 million is the material threshold above which separate disclosure must be made in the Statement of Financial Position and Euro 1.000 million is that for separate disclosure in the Income Statement.
Detailed information on related-party transactions is given below and is divided between relatedparty transactions with the controlling shareholder Fondazione Fiera Milano and related-party transactions with subsidiaries.
The following is a summary of recurring transactions.
As described below, on 31 March 2014 new lease agreements were signed for the exhibition sites of Rho and Milan. These contracts were effective from the second semester of 2014.
On 18 January 2003, Fiera Milano SpA signed a lease agreement with Fondazione Fiera Milano for the Rho exhibition site. The same agreement established the terms of the lease for the downtown site, giving an effective date 1 January 2006 in the contracts for both exhibition sites. The lease agreement for both exhibition sites was, therefore, for nine years effective from 1 January 2006 (the date on which Fiera Milano SpA took possession of the Rho exhibition site). Cancellation of the contracts had to be notified eighteen months prior to the expiry of the contracts on 31 December 2014.
On 13 May 2013, the Board of Directors agreed a proposal put forward by the controlling shareholder Fondazione Fiera Milano to change the terms of the rental contracts for the exhibitions sites of Rho and Milan by extending the period for cancelling the lease agreement from 30 June 2013 to 31 October 2013. Subsequently, further proposals to extend the period to 14 March 2014 were approved. On 31 March 2014 new rental agreements for the exhibition sites of Rho and Milan were signed. The new lease agreements are for nine years effective from 1 July 2014 (following the agreed early termination of the existing lease agreements due to expire on 31 December 2014) and may be automatically renewed for a further nine years.
As regards the rental agreement for the Rho exhibition site, compared to the previous agreement that was valid until 30 June 2014, the rent was reduced by Euro 2.000 million in the second semester of 2014 and by Euro 14.000 million for the full-year 2015 and for each subsequent year of the agreement. Therefore, the rent was Euro 24.400 million for the second semester of 2014 and Euro 38.800 million from 2015 and for each subsequent year of the agreement annually adjusted for 100% of the change in the ISTAT consumer price index. Because of EXPO 2015, which is expected to have a positive impact on the exhibition business of Fiera Milano, for 2015 alone Fondazione Fiera Milano will be paid an additional rent based on any revenues generated in 2015 by Fiera Milano SpA that exceed the average annual revenues of the three-year period 2012- 2014. Fiera Milano SpA will pay a supplementary rent equal to 15% of the additional revenues generated by Fiera Milano SpA up to a maximum amount of Euro 10.000 million.
For the Milan exhibition site, the parties agreed to maintain the existing rent of Euro 2.850 million per annum annually adjusted for 100% of the change in the ISTAT consumer price index.
A sum of Euro 10.412 million was also paid as a guarantee deposit; this sum is equivalent to the combined standard quarterly rent on the two exhibition sites. To simplify the agreement between
the parties, it was decided that the debt payable by Fiera Milano for the new guarantee deposit would be offset by the credit it had for the right to repayment by Fondazione Fiera Milano of the guarantee deposit of Euro 12.784 million paid for the two previous rental agreements. The balance of Euro 2.372 million will be repaid by Fondazione Fiera Milano through a reduction of Euro 0.132 million on the amount payable by Fiera Milano to Fondazione Fiera Milano for each six-monthly rental payment up to the value of the aforementioned residual amount.
The transaction is a transaction of greater importance under Article 5 of Consob Regulation no. 17221 of 2010 on related-party transactions and of Article 10.2 of the Procedure for transactions with related parties adopted by Fiera Milano as it exceeds the materiality thresholds contained therein. As Fiera Milano qualifies as a "small and mid cap company", as defined in Article 3, first paragraph, letter (f) of the Consob Regulation, the Company could have availed itself of the exemption permitted under Article 10, paragraph 1 of the same Regulation and could therefore have applied to a transaction of greater importance (such as the one described above) the procedures for transactions of lesser importance. However, because of the highly sensitive nature of the transaction and its importance to the corporate activities of the Company, the Board of Directors of Fiera Milano SpA, on the suggestion of the Control and Risk Committee, chose to employ for this transaction the more rigorous procedures required for transactions of greater importance.
To ensure that market conditions applied, the rental agreements were prepared also taking account of valuations done by the independent expert Jones Lang LaSalle SpA acting for Fiera Milano SpA.
Taking advantage of the facility provided by Presidential Decree (DPR) 633/72, from 1 January 2002, Fiera Milano SpA chose to follow the procedures, managed by the controlling shareholder, Fondazione Fiera Milano, for settlement of Group VAT. This mechanism makes it easier to settle any tax obligations, without the Company incurring additional costs.
In the financial year 2004/2005, Fiera Milano SpA and several of its subsidiaries opted to participate in the tax consolidation of the controlling shareholder Fondazione Fiera Milano. Following the change in the accounting year-end of Fiera Milano SpA and all its subsidiaries, participation in this tax consolidation ceased. However there remain certain contractual obligations to Fondazione Fiera Milano which are referred to in the Notes to the Financial Statements.
Fiera Milano SpA has an annual contract with Fondazione Fiera Milano for the reciprocal provision of services, which arise from or are necessary for the exercise of their respective activities. The contract is renewable annually unless cancelled by a written agreement between the parties. The contract provides for the reciprocal supply between the Parent Company and Fondazione Fiera Milano of two kinds of services (i) services of a general nature, which fall within the range of activities of the entity providing them, supplied to the buyer on a continuous and systematic basis; (ii) specific services, or services provided on request and relating to specific activities to be agreed from time to time between the buyer and the supplier, also on the basis of appropriate offers/estimates. The service supply contract is governed by market conditions.
On 17 December 2001, Fondazione Fiera Milano, as owner of the "Fiera Milano" brand name granted Fiera Milano SpA an exclusive licence for the use of the said brand name in order to typify its own activities, also through its use on headed paper, on its commercial material, and to differentiate its headquarters and offices. The licence has been granted for Italy and all countries and locations where the brand name has been or will be registered or lodged.
The symbolic consideration paid by Fiera Milano SpA to Fondazione Fiera Milano was Euro 1.0. Fondazione Fiera Milano, having as its corporate objective the development of the exhibition sector, has maintained Fiera Milano as part of its name and did not include it in the Exhibition Management Activity business division contributed to the Parent Company in 2001, but with the expectation that Fiera Milano SpA would use the said brand name for an extended period of time and without incurring further costs for its use.
It should be noted that this licence is valid until 31 December 2017 with automatic renewal for a further fifteen years, unless cancelled by one of the parties.
The parties settle receipts and payments under the contracts existing between them through a current account on which interest is paid at market rates.
Fiera Milano SpA carried out commercial transactions with subsidiaries under market conditions that were for the organisation and management of exhibitions and other events.
As part of the corporate reorganisation and to achieve more efficient management of the organisational processes and strengthen the centralisation and single management of strategic services, Fiera Milano SpA provides the following services to some of its subsidiaries:
Fiera Milano SpA also provides communication services to subsidiaries in order to ensure a uniform Group image.
Transactions with subsidiaries are done at market conditions.
Fiera Milano Media SpA, Nolostand SpA and Fiera Milano Congressi SpA have a licence agreement with Fiera Milano SpA to use the title "Fiera Milano" as part of their own trademarks. These agreements last until 31 December 2016 and tacit renewal is not provided for on expiry. The agreed amount that was paid by each licensee company was Euro 100.00.
Fiera Milano SpA, as the consolidating entity and all the Italian subsidiaries, the consolidated companies, opted for the Italian tax consolidation method for payment of IRES tax.
The tax consolidation procedure gives Fiera Milano SpA a definite economic and financial benefit, particularly in allowing the immediate use of its tax losses, generated in the financial years in which this option is available, to offset the profits of the consolidated companies. In this way it benefits from an immediate tax saving and from the transformation into liquid financial resources
of amounts relating to IRES that, in the absence of the tax consolidation, would otherwise have been allocated against the taxable income of certain other subsidiaries, and that remain within the Group.
The legal relationships among the companies involved in the tax consolidation process are governed by a rule that imposes a uniform process for correct fulfilment of the fiscal requirements and related responsibilities on the companies involved.
On 14 May 2010, Fiera Milano SpA signed an agreement with its subsidiary Nolostand SpA for the exclusive supply of stand-fitting services to the clients of the Parent Company at exhibitions, events and other initiatives in the fieramilano and fieramilanocity exhibition sites. On 15 April 2013 a new agreement was signed under which the method of calculating the payment was modified. For 2014 the payment equated to 30% of the profit margin (direct revenues less direct costs), which came to Euro 2.582 million.
On 3 June 2014 Fiera Milano SpA signed an agreement with its subsidiary Nolostand SpA for support activities for the annual maintenance of the Corporate Quality Management System of Fiera Milano SpA starting on 3 June 2014. The payment made to Nolostand SpA for 2014 was Euro 0.157 million.
On 15 April 2013, Fiera Milano SpA signed a contract with Fiera Milano Media SpA whereby it gave exclusive rights to the subsidiary to manage the advertising on the billboards owned by Fiera Milano SpA and also to promote and market its business to certain specific clients of the Parent Company. Fiera Milano Media SpA pays Fiera Milano SpA 35% of the revenues generated by these two activities. The remaining 65% remains with the subsidiary as remuneration for the services it provides under the agreement.
Financial, capital and economic transactions with related-parties are shown in the following tables.
| Fiera Milano SpA Related party entries in the Statement of Financial Position and Income Statement in the financial year to 31 December 2014 |
|||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Trade receivables and other |
Trade receivables and other |
Inventories | Current financial assets |
Pre payments |
Other current financial |
Other current liabilities |
Revenues from sales and services |
Costs for materials |
Costs of services |
Cost of use of third party assets |
Personnel expenses |
Other operating expenses |
Other revenues |
Financial income |
Financial expenses |
Tax | |
| (€'000) | non current | current | liabilities | ||||||||||||||
| Controlling shareholder: | |||||||||||||||||
| Fondazione Fiera Milano | 12,389 | 5,368 | 21,683 | 2,994 | 23 | 1,001 | 48,919 | 1,064 | 291 | 127 | 1,183 | ||||||
| Subsidiaries: | |||||||||||||||||
| Fiera Milano Congressi SpA | 1,665 | 2 | 481 | 1,419 | 448 | 382 | 1,064 | 93 | (1,168) | ||||||||
| Fiera Milano Media SpA | 827 | 67 | 1,219 | 1,523 | 410 | 2,314 | 419 | 229 | 1,317 | 39 | |||||||
| Nolostand SpA | 553 | 102 | 7,549 | 2,681 | 28,903 | 6 | 514 | 1,184 | |||||||||
| Cipa Fiera Milano Publicações e Eventos Ltda | 2 | 75 | |||||||||||||||
| Eurofairs International Consultoria e Partipações Ltda | 456 | 1,187 | 37 | ||||||||||||||
| Limited Liability Company "Fiera Milano" | 249 | 1 | 319 | 41 | 249 | 1 | 44 | 18 | |||||||||
| Fiera Milano Exhibitions Africa Pty Ltd | 13 | 1 | 13 | ||||||||||||||
| Fiera Milano Interteks Uluslararasi Fuarcilik A.S. | 111 | ||||||||||||||||
| Fiera Milano India Pvt Ltd | 43 | 43 | |||||||||||||||
| Worldex (China) Exhibition & Promotion Ltd | 1 221 | 271 | |||||||||||||||
| Joint-ventures: | |||||||||||||||||
| Hannover Milano Fairs China Ltd | 1 | 12 | |||||||||||||||
| Hannover Milano Fairs India Ltd | 22 | ||||||||||||||||
| Hannover Milano Fairs Shangai Ltd | 9 | 19 | 10 | 185 | 136 | 393 | 17 | ||||||||||
| Hannover Milano Global Germany GmbH | 1,705 | ||||||||||||||||
| Milan International Exhibitions Srl under liquidation | 36 | 2 | |||||||||||||||
| Total related parties | 9,165 12,389 | 192 | 2,725 | 10 | 21,683 | 13,050 | 4,919 | 1 | 33,563 | 49,320 | 1,008 | 1,310 | 3,858 | 2,019 | 1,183 | (1,168) | |
| Total entries | 38,754 13,271 | 4,466 | 2,725 | 34,843 | 21,850 | 26,512 | 181,098 | 818 | 107,929 | 51,898 | 34,990 | 4,757 | 6,406 | 2,096 | 4,739 | (5,227) | |
| Related party entries/Total entries (%) | 93% | 24% | 4% | 100% | 0.03% | 99% | 49% | 3% | 0.09% | 31% | 95% | 3% | 28% | 60% | 96% | 25% | 22% |
Information on the remuneration paid to the Administrative and Control Bodies, to the general directors and to executives with strategic responsibilities in the financial year to 31 December 2014 is given in the table in the section below on other information.
| Statement of related party cash flow | 2014 | 2013 |
|---|---|---|
| Cash flow from operating activities | ||
| Revenues and income | 8,777 | 9,552 |
| Costs and expenses | (85,202) | (87,940) |
| Financial income | 2,019 | 2,448 |
| Financial expenses | (1,183) | (980) |
| Income/expenses from tax consolidation | 1,168 | 207 |
| Change in inventories | 180 | (137) |
| Change in trade and other receivables | (2,318) | (345) |
| Change in trade payables and pre-payments | 1 | (1) |
| Change other payables | 390 | 8,788 |
| Total | (76,168) | (68,408) |
| Cash flow from investing activities | ||
| Investments in non-current assets | ||
| Tangible and intangible | - | (51) |
| Total | - | (51) |
| Cash flow from financing activities | ||
| Change in current financial (assets)/liabilities | 693 | 19,314 |
| Total | 693 | 19,314 |
| Cash flow in the period | (75,475) | (49,145) |
The table below shows cash flow from related party transactions:
| Cash flow from operating activities |
Cash flow from investing activities |
Cash flow from financing activities |
|
|---|---|---|---|
| FY to 31.12.14: | |||
| Total | (16,848) | (3,503) | 17,994 |
| Related party transactions | (76,168) | - | 693 |
| FY to 31.12.13: | |||
| Total | 4,487 | (12,138) | 10,357 |
| Related party transactions | (68,408) | (51) | 19,314 |
In the financial period under review there were no significant non-recurring transactions as specified in Consob Communication of 28 July 2006.
In accordance with Consob Communication of 28 July 2006, it should be noted that the Group did not carry out any unusual and/or atypical operations in 2014 as defined in the aforementioned Communication.
On 26 February 2015, Fiera Milano SpA signed an agreement with the minority shareholder of Fiera Milano Exhibitions Africa Pty Ltd for the acquisition of its 15% shareholding in the company for a sum of 3.945 million South African rand (Euro 0.300 million5 ). Transfer of ownership of the shareholding and payment for the transaction will take place simultaneously when the foreign exchange controls required by the South African authorities have been completed. Following this transaction, the shareholding of Fiera Milano SpA will move from 85% to 100%.
The following table shows the fees paid to the independent audit firm for services provided in
Total 218 *agreed procedures
Executives with strategic responsibilities are those that have the power and responsibility, both direct and indirect, for the planning, management and control of Company activities. Executives with strategic responsibilities are the Directors, the Statutory Auditors and the members of the Steering Committee.
The total remuneration for this category of executives was Euro 2.467 million at 31 December 2014 (Euro 2.456 million at 31 December 2013) and the breakdown was as follows:
5 Figures in Euro have been given using the exchange rate on 24 February 2015 (EUR/ZAR = 13.149)
(€'000)
| Remuneration | 2014 | |||
|---|---|---|---|---|
| Directors | Statutory Auditors |
Other | ||
| Short-term benefits | 923 | 87 | 1,362 | |
| Post-employment benefits | 10 | - | 85 | |
| Other non-current benefits | - | - | - | |
| Staff-leaving indemnities | - | - | - | |
| Notional income from stock option plans | - | - | - | |
| Total | 933 | 87 | 1,447 |
(€'000) Remuneration Directors Statutory Auditors Other Short-term benefits 900 87 1,368 Post-employment benefits 10 - 91 Other non-current benefits - - - Staff-leaving indemnities - - - Notional income from stock option plans - - - Total 910 87 1,459 2013
At 31 December 2014, the residual amount payable to this category was Euro 0.124 million.
Rho (Milan), 20 March 2015
On behalf of the Board of Directors The Chairman Michele Perini
| Attachment 1 | |
|---|---|
| -------------- | -- |
List of investments in subsidiaries and joint ventures for the financial year ended 31 December 2014 (art. 2427, paragraph 1, no.5 of the Italian Civil Code) (€'000)
Company name Registered Share % Carrying Office capital Total Pro-quota Total Pro-quota held value Subsidiaries: Fiera Milano Congressi SpA 2,000 6,751 6,751 2,258 2,258 100.00% 12,200 Fiera Milano Media SpA 2,803 4,103 4,103 (786) (786) 100.00% 18,170 Nolostand SpA 7,500 6,433 6,433 89 89 100.00% 13,390 Fiera Milano Exhibitions Africa Pty Ltd Westlake 3,234 2,749 (269) (229) 85.00% 5,567 - Eurofairs International 11,182 8,830 8,828 (697) (697) 99.98% 9,949 Consultoria e Participações Ltda Brazil 2 +0,02% ind. - Fiera Milano India Pvt Ltd New Delhi 261 248 248 38 38 99.99% 125 Fiera Milano Interteks Uluslararasi Istanbul 462 1,064 638 (307) (184) 60.00% 2,560 Fuarcilik A.S. Limited Liability Company Fiera Milano 138 (147) (147) (219) (219) 100.00% 261 Worldex (China) Exhibition & Promotion Ltd 714 1,515 1,136 391 293 75.00% 7,826 Total 70,048 Joint Venture: Hannover Milano Global Germany GmbH 25 18,119 8,878 3,302 1,618 49.00% 10,990 Germany Milan International Exhibitions Srl under liquidation 120 110 22 (37) (7) 20.00% 29 Total 11,019 Equity Net profit/(loss) Milan Milan Rho, Milan Milan São Paulo Moscow Guangzhou Hannover
*For subsidiary companies the indirect percentage held in the share capital has also been shown
Summary of key figures of the last financial statements of subsidiaries and associates included in the area of consolidation (Art. 2429, paragraph 4 of Italian Civil Code). Italian GAAPs:
(amounts in € '000)
| Fiera Milano Congressi SpA | 31/12/14 | 31/12/13 |
|---|---|---|
| Revenues from sales and services | 37,835 | 24,546 |
| Net profit/(loss) | 2,258 | 97 |
| Equity | 6,751 | 4,585 |
| Net financial debt/(cash) | (4,670) | (1,012) |
| Fiera Milano Media SpA | 31/12/14 | 31/12/13 |
| Revenues from sales and services | 12,373 | 11,991 |
| Net profit/(loss) | (786) | (216) |
| Equity | 4,103 | 4,889 |
| Net financial debt/(cash) | 723 | 1,314 |
| Nolostand SpA | 31/12/14 | 31/12/13 |
| Revenues from sales and services | 33,389 | 33,609 |
| Net profit/(loss) | 89 | (328) |
| Equity | 6,433 | 6,344 |
| Net financial debt/(cash) | 2,122 | (37) |
Summary of key figures of the last financial statements of subsidiaries and associates included in the area of consolidation (Art. 2429, paragraph 4 of Italian Civil Code). IAS/IFRS:
| Fiera Milano Exhibitions Africa Pty Ltd | 31/12/14 | 31/12/13 |
|---|---|---|
| (amounts in South African rand '000) | ||
| Revenues from sales and services | 25,821 | 27,393 |
| Net profit/(loss) | (3,868) | (1,128) |
| Equity | 45,393 | 49,261 |
| Net financial debt/(cash) | (2,335) | (6,142) |
| Eurofairs International Consultoria e Participaçoes Ltda (amounts in Brazilian reals '000) |
31/12/14 | 31/12/13 |
| Revenues from sales and services | - | - |
| Net profit/(loss) | (2,176) | 1,033 |
| Equity | 28,438 | 30,614 |
| Net financial debt/(cash) | 1,125 | (974) |
| Fiera Milano India Pvt Ltd | 31/12/14 | 31/12/13 |
| (amounts in rupees '000) | ||
| Revenues from sales and services | 5,092 | 995 |
| Net profit/(loss) | 3,048 | (1,304) |
| Equity | 19,064 | 16,016 |
| Net financial debt/(cash) | (8,479) | (10,638) |
| Fiera Milano Interteks Uluslararasi Fuarcilik A.S. (amounts in Turkish Lira '000) |
31/12/14 | 31/12/13 |
| Revenues from sales and services | 7,981 | 5,582 |
| Net profit/(loss) | (893) | (1,458) |
| Equity | 3,014 | 2,812 |
| Net financial debt/(cash) | 917 | 1,074 |
| Limited Liability Company Fiera Milano | 31/12/14 | 31/12/13 |
| (amounts in roubles '000) | ||
| Revenues from sales and services | 27,928 | 2,570 |
| Net profit/(loss) | (11,169) | (5,655) |
| Equity | (10,664) | 505 |
| Net financial debt/(cash) | 5,156 | (500) |
| Worldex (China) Exhibition & Promotion Ltd | 31/12/14 | 31/12/13 |
| (amounts in yuan renminbi '000) | ||
| Revenues from sales and services | 21,769 | 14,149 |
| Net profit/(loss) | 3,204 | 3,913 |
| Equity | 11,416 | 3,831 |
| Net financial debt/(cash) | (9,901) | (3,690) |
| 31/12/14 | 31/12/13 |
|---|---|
| - | |
| (37) | (697) |
| 110 | |
| (126) | |
| Summary of key figures of the last financial statements of joint ventures included in the area of consolidation (Art. 2429, paragraph 4 of Italian Civil Code). Italian GAAPs: |
| Summary of key figures of the last financial statements of joint ventures included in the area of consolidation (Art. 2429, paragraph 4 of Italian Civil Code) - IAS/IFRS: |
||||||
|---|---|---|---|---|---|---|
| (amounts in € '000) | ||||||
| Hannover Milano Global Germany GmbH | 31/12/14 | 31/12/13 | ||||
| Revenues from sales and services | 28,645 | 28,776 | ||||
| Net profit/(loss) | 3,310 | |||||
| Equity | 18,119 | 18,010 | ||||
| Net financial debt/(cash) | (16,195) | (16,384) |
__________________________________________________________________________
the appropriateness in relation to the characteristics of the business and
the effective application of the administrative and accounting procedures for the preparation of the Financial Statements for the year to 31 December 2014.
2. The evaluation of the adequacy of the administrative and accounting procedures for the preparation of the Financial Statements at 31 December 2014 is based on a process defined by Fiera Milano SpA, which is consistent with the Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, which represents the generally accepted international benchmark.
20 March 2015
Signed by Signed by
The Chief Executive Officer The Manager responsible for preparing the Enrico Pazzali the Company's Financial Statements Flaminio Oggioni
Dear Shareholders,
Under Article 153 of Legislative Decree of 24 February 1998 no. 58 (the "Consolidated Finance Act") the Board of Statutory Auditors is required to report to the Meeting called to approve the Financial Statements on its auditing and supervisory duties and any reprehensible acts or omissions noted. It also has the authority to make proposals to the Meeting regarding the Financial Statements, their approval, and any other items within its authority.
In the 2014 financial year, the Board of Statutory Auditors fulfilled the requirements under Article 2429, paragraph 2 of the Italian Civil Code, the provisions of Legislative Decree of 27 January 2010 no. 39 (Legislative Decree 39/2010), the regulations and recommendations governing listed companies issued by the National Committees of Registered Tax Advisors and of Accountants and the indications of Consob regarding corporate governance and the work of the Board of Statutory Auditors: Communication no. DAC/RM/97001574 of 20 February 1997, Communication no. DEM/1025564 of 6 April 2001 (of which more detail is given below), Communication no. DEM/3021582 of 4 April 2003, Resolution no. 15185 of 5 October 2005 and Communication no. DEM/6031329 of 7 April 2006.
The present report has been prepared in accordance with enacted law governing companies listed on the stock market and because the Company shares have been listed on the STAR segment of the market regulated by Borsa Italiana SpA.
In the 2014 financial year, the requirements under Article 149 of the Consolidated Finance Act (TUF) were observed thereby allowing it to comment, in particular, on the matters below.
The Board of Statutory Auditors acquired the information necessary for carrying out its work of general supervision both by interviewing management and various company executives and by regular attendance at the Board of Directors' meetings and at those of the other internal Committees.
The Financial Statements of the Company at 31 December 2014 show a net loss for the financial year of Euro 30.674 million compared to a net loss of Euro 12.664 million at 31 December 2013. The Consolidated Financial Statements show a net loss of Euro 18.955 million compared to a consolidated net loss of Euro 16.498 million in the preceding financial year.
As a result of the accumulated losses, the net worth of the Company has fallen by over one-third and the Company now finds itself in the situation provided for under Article 2446 of the Italian Civil Code. Therefore, on 20 March 2015, the Board of Directors of the Company proposed that the Agenda of the ordinary shareholders' Meeting on 29 April 2015 include an item pertaining to and resulting from the requirements of Article 2446 of the Italian Civil Code. The Board of Directors on the basis of the contents of the report, which has been prepared in compliance with Article 2446 of the Italian Civil Code and Article 74 of the Listing Rules, and which will be presented at the Meeting and, together with the comments of the Board of Statutory Auditors, will be published within the time required by law, will propose a further resolution.
The Board of Statutory Auditors attended the meetings of Shareholders, of the Board of Directors and, in the person of the Chairman or a person delegated by him to replace him, of the internal committees of the Board and obtained from the Directors, pursuant to Article 150, paragraph 1, Legislative Decree 58/98 information on business carried out and on the main financial, economic, and equity transactions of the Company or of companies under its control. With regard to these activities, the Board of Statutory Auditors considers that decisions deliberated and taken complied with the law and the Company's Articles of Association and were not manifestly imprudent, risky, created potential conflicts of interest or differed from the resolutions of the Shareholders' Meeting or were such as to compromise the integrity of the Company's net worth.
The main transactions included the following:
As regards the rental agreement for the Rho exhibition site, compared to the previous agreement that was valid until 30 June 2014, the rent was reduced by Euro 2.000 million in the second semester of 2014 and by Euro 14.000 million for the full-year 2015 and for each subsequent year of the agreement. Therefore, the rent was Euro 24.400 million for the second semester of 2014 and Euro 38.800 million from 2015 and for each subsequent year of the agreement annually adjusted for 100% of the change in the ISTAT consumer price index. Because of EXPO 2015, which is expected to have a positive impact on the exhibition business of Fiera Milano, for 2015 alone Fondazione Fiera Milano will be paid an additional rent based on any revenues generated in 2015 by Fiera Milano SpA that exceed the average annual revenues of the three-year period 2012-2014. Fiera Milano SpA will pay a supplementary rent equal to 15% of the additional revenues generated by Fiera Milano SpA up to a maximum amount of Euro 10.000 million. The parties agreed to maintain the existing rent of Euro 2.850 million per annum annually adjusted for 100% of the change in the ISTAT consumer price index for the Milan exhibition site.
The lease agreements constitute a related-party transaction as Fondazione Fiera Milano owns a controlling shareholding in the Company equal to 62.062% of the share capital of Fiera Milano.
The transaction is a transaction of greater importance under Article 5 of Consob Regulation no. 17221 of 2010 on related-party transactions and of Article 10.2 of the Procedure for transactions with related parties adopted by Fiera Milano as it exceeds the materiality thresholds contained therein. As Fiera Milano qualifies as a "small and mid cap company", as defined in Article 3, first paragraph, letter (f) of the Consob Regulation, the Company could have availed itself of the exemption permitted under Article 10, paragraph 1 of the same Regulation and could therefore have applied to a transaction of greater importance (such as the one described above) the procedures for transactions of lesser importance. However, because of the highly sensitive nature of the transaction and its importance to the corporate activities of the Company, the Board of Directors of Fiera Milano SpA on the suggestion of the Control and Risk Committee chose to employ for this transaction the more rigorous procedures required for transactions of greater importance.
To ensure that market conditions applied, the rental agreements were prepared also taking account of valuations done by the independent expert Jones Lang LaSalle SpA acting on behalf of Fiera Milano SpA.
on 10 January 2014, Fiera Milano SpA paid Euro 0.407 million as the first tranche of a share capital increase in Worldex (China) Exhibition & Promotion Ltd.
on 14 February 2014, the Board of Directors of the Parent Company approved the liquidation of Milan International Exhibitions Srl. On 3 March 2014 the extraordinary shareholders' meeting of Milan International Exhibitions Srl approved the process of voluntary liquidation for the company.
on 18 February 2014, Fiera Milano SpA paid Euro 0.219 million as part of a share capital increase in Fiera Milano Interteks.
on 5 March 2014, the deferred payment of Euro 1.800 million was made under the acquisition agreement of 15 May 2013 for 75% of the share capital of the Chinese exhibition company Worldex (China) Exhibition & Promotion Ltd.
on 28 August 2014, Fiera Milano SpA acquired 10% of Fiera Milano Exhibitions Africa Pty Ltd for Euro 0.496 million. Following this transaction its shareholding moved from 75% to 85%.
In 2014, the Board of Statutory Auditors was not aware of and received no information of any atypical or unusual transactions, as defined in Consob Communication of 28 July 2006, among Group companies, with third-parties or with related parties.
As described by the Directors in the Notes to the Financial Statements, intragroup and relatedparty transactions are recurring transactions of a commercial, administrative and financial nature, which include the service agreements between the Company, the controlling shareholder Fondazione Fiera Milano and the subsidiaries. The Directors state that these transactions were done at market conditions with a view to increasing efficiency in the management and organisation of events and optimising the use of resources and professional competences while maintaining a uniform Group image. As part of the corporate restructuring
aimed at improved the efficiency of the organisational processes and strengthening the centralisation and single management of strategic services, Fiera Milano SpA supplies the following services to some of the subsidiaries under Italian law:
No conflicts of interest or transactions that could be considered manifestly imprudent or risky or that contravened the decisions of the Shareholders' Meeting, or such as to cause damage to the economic, financial or equity situation of the Company or the Group were reported or found. Whilst passing no judgement on the executive decisions of the Directors, to the knowledge of the Board of Statutory Auditors, any transactions carried out were based on rational economic criteria.
It should be noted that the Company adopted the Procedure for Related-party Transactions pursuant to Article 4 of Consob Regulations adopted by Consob with resolution no. 17221 of 12 March 2010 and subsequent additions and amendments.
The Procedure identifies rules and regulations aimed at guaranteeing the transparency and substantial correctness of procedures for related-party transactions carried out directly by Fiera Milano SpA or through subsidiaries.
The Board of Statutory Auditors checked that the Procedure complied with the principles of Consob Rule no.17221 of 12 March 2010 and of the Procedure itself.
In compliance with the law, the Board of Directors gave the Board of Statutory Auditors the interim financial report at 30 June 2014 and published it as required by Consob rules and also complied with the legal requirements regarding quarterly reports.
The Board of Statutory Auditors maintains that the information given by the Directors in the Financial Statements for the 2014 financial year for intragroup and related-party transactions is both exhaustive and complete given the structure and size of the Company and of the Group.
The independent audit firm Reconta Ernst & Young SpA, with whom the Board of Statutory Auditors met periodically during the 2014 financial year, published their reports today on the Financial Statements and the Consolidated Financial Statements to 31 December 2014 for the Company and for the Group; these have been prepared in accordance with Articles 14 and 16 of Legislative Decree 39/2010. Each contains two comments on information given by the Directors' regarding the application of the going concern principle and on the existence of material related-party transactions.
The aforementioned reports also include the opinion that the contents of the Board of Directors' Management Report and the specific section on corporate governance and the ownership structure and the information given under paragraph 1, letters c), d), f), l), m) and paragraph 2, letter b) of Article123-bis of Legislative Decree no. 58/98, were consistent with the Financial Statements of the Company and the Consolidated Financial Statements of the Group.
The Board of Statutory Auditors is unaware of any denunciations under Article 2408 of the Italian Civil Code that it should bring to the attention of the Shareholders' Meeting.
The Board of Statutory Auditors has not been apprised of any petitions filed, initiatives taken or the outcome of any such initiatives that are required to be brought to the attention of the Shareholders' Meeting.
During the financial year ended 31 December 2014 the Company incurred costs of Euro 0.029 million from fees for assignments given to Reconta Ernst & Young SpA for agreed upon procedures.
During the financial year ended 31 December 2014, the Company incurred no costs for fees relating to work assigned to entities linked to the independent audit firm responsible for the continued audit of the Company accounts.
In compliance with Legislative Decree 39/2010, the audit firm confirmed to the Board of Statutory Auditors its independence and gave notification of any services other than the legal audit supplied to the Company by the audit firm and by entities that are part of its network in the financial year to 31 December 2014.
The Board of Statutory Auditors, in accordance with enacted law, discussed with the audit firm any risks relating to the latter's independence and the measures taken to mitigate such risks.
Taking into account the above and the information in the preceding section and given the type and scope of the services provided and the regulatory and professional requisites governing the auditing of accounts, we believe that Reconta Ernst & Young SpA maintained an independent and objective position with regard to Fiera Milano SpA and the Fiera Milano Group in the financial year to 31 December 2014.
The Board of Statutory Auditors made a reasoned proposal under Article 13 of Legislative Decree no. 39/2010 that the firm Reconta Ernst & Young SpA be given the mandate to carry out the legal audit for the financial years 2014-2022.
During the financial year, the Board of Directors met nineteen times and the Board of Statutory Auditors was always present. The Board of Statutory Auditors was present at the Shareholders' Meeting of 29 April 2014. The Board of Statutory Auditors met fourteen times. Moreover, the Chairman of the Board of Statutory Auditors, either in person or through a Statutory Auditor delegated by him, attended eleven out of the eleven meetings of the Control and Risk Committee and three out of the three meetings of the Remuneration Committee as requested.
The Board of Statutory Auditors monitored and supervised the observance of the principles of good administration falling within its competence and has no comments in this respect. This activity was carried out through interviews, information gathered from executives responsible for running and managing the Company, meetings with the Head of Internal Audit, with the Control and Risk Committee, with the Manager responsible for preparing the Company Accounts, as required by Article Legislative Decree 262/05, and with the representatives of the independent audit firm.
Specifically, regarding the decision-making process of the Board of Directors, the Board of Statutory Auditors, through its presence at meetings of the Board of Directors, also monitored that the executive decisions of the Directors complied with the law and the Company's Articles of Association.
On 20 March 2015, the Board of Statutory Auditors, together with the Board of Directors of the Company, communicated to Consob as required by Article 149, paragraph 3, of the Consolidated Finance Act, that the confidentiality of the Company records had been breached with specific reference to the contents of the minutes of a meeting of the Board of Directors held on 28 July 2014 parts of which were published in two articles in the newspaper Il Corriere della Sera on 23 and 24 February 2015. Although the enquiries made by the Board of Statutory Auditors revealed no indications of a violation of the applicable corporate processes and procedures, which comply with best practice, and the Board of Statutory Auditors found that the Company was in no way responsible, because Fiera Milano S.p.A. is an issuer of listed shares and because of the potential impact of the news on the performance of the shares, it was considered appropriate to inform the Regulatory Authorities for any eventual subsequent initiative considered suitable.
The organisational structure of the Company appears to be adequate for its size, complexity and importance.
The Board of Statutory Auditors has assessed and monitored the adequacy of the internal audit process, its compliance with the principles of diligence and correct administrative conduct, through regular meetings with management and with the Head of Internal Audit; the Manager responsible for preparing the Company accounts under Legislative Decree 262/05; analyses of company documents; of information acquired from the independent audit firm; through the presence of the Chairman, or a Statutory Auditor delegated by him, at meetings of the Control and Risk Committee, which also permitted the Board of Statutory Auditors to coordinate with this Committee the functions of the Internal Audit and the accounting procedures in compliance with Article 19 of Legislative Decree 39/2010.
The periodic meetings with the Head of Internal Audit and the Manager responsible for preparing the Company accounts and an analysis of the reports prepared by these persons regarding their activities allowed the Board of Statutory Auditors to monitor the financial information process and the efficacy of the internal control systems and the internal audit and risk management, as required by Article 19 of Legislative Decree 39/2010.
As the members of the Boards of Statutory Auditors of the subsidiaries are the same as that of the Board of Statutory Auditors of the Parent Company it was not necessary, under Article 151 of the Consolidated Finance Act, to have meetings and discussions with the members of the Boards of Statutory Auditors of the subsidiaries. In any case, no matters arose that need to be drawn to the attention of the Shareholders' Meeting.
The Board of Statutory Auditors verified that the Management and Control Model pursuant to Legislative Decree no. 231/2001, was periodically updated - the most recent update being approved by the Board of Directors on 14 March 2014.
The Report on Corporate Governance and Ownership Structure, in compliance with Article 123 bis of the Consolidated Finance Act, gives analytical data on the risk management and internal control system for financial information.
The Board of Statutory Auditors has a favourable opinion of the adequacy of the internal audit as a process aimed at verifying the adequacy and effective compliance with the rules, procedures and organisational structures by which it can identify and manage the main risks to the Company so as to guarantee that the conduct of business is healthy, correct and consistent with the pre-established objectives.
The accounting and management system is adequate for the Company structure both in terms of the equipment and competent personnel; the system may therefore be judged to be reliable and capable of giving a true and fair representation of the business.
The Company gave adequate instructions to the subsidiaries so that they could supply in timely fashion all the information necessary to comply with communication requirements under the law.
Pursuant to Article 150, paragraph 3 of the Consolidated Finance Act, periodic meetings were held with the independent audit firm to verify the reliability of the administrative and accounting system and of the internal audit process. No significant matters necessitating further investigation were found nor were any irregularities reported.
With specific reference to the duties assumed under Article 19 of Legislative Decree 39/2010, the Board of Statutory Auditors, also in its meetings with the audit firm, examined the work plan adopted, received information on the accounting standards used, on the accounting presentation of the more material transactions of the financial year under review, on the outcome of the audit, and on any fundamental questions that emerged from the legal audit regarding the financial information process; no significant failings emerged in the internal audit system concerning the financial information process.
The Board of Statutory Auditors also received analytical data on the impairment tests carried out by the Company on the value of goodwill and of investments recognised in the Financial Statements. The Directors have provided the relevant information in the Notes to the Financial Statements as required by international accounting standards and Consob regulations.
The Company adhered to the Self-Regulatory Code for listed companies approved by the Corporate Governance Committee in March 2006 and introduced by Borsa Italiana SpA, and its most recent update of July 2014. The Board of Statutory Auditors found irrefutable evidence that the Company adhered to the corporate governance rules of the Self-Regulatory Code as described in the Report on Corporate Governance and Ownership Structure that the Board of Directors has prepared, which gives more detailed and complete information on this matter.
Six members of the current Board of Directors of the Company meet the requisites of independence as defined in the Self-regulatory Code for listed companies.
The Board of Statutory Auditors verified the correct application of the criteria and procedures adopted by the Board of Directors to evaluate the independence of its members and the Chairman of the Board of Statutory Auditors, together with the Chairman of the Board of Directors, has vouchsafed the existence of the requisite independence on the basis of the declarations made in accordance with stock market regulations. During the financial year, the Board of Statutory Auditors also verified the requisite independence of its own members as required by the Self-Regulatory Code.
The Board of Statutory Auditors believes the audit carried out to have been both material and thorough and found no reprehensible acts, omissions or irregularities except as described in paragraph 11.
The Board of Statutory Auditors has no comments to make pursuant to Article 153, paragraph 2 of the Consolidated Finance Act on the proposals of the Directors concerning the Financial Statements, their approval, and other matters that fall within its competence. In compliance with the law, the Board of Statutory Auditors will comment on the report made by the administrative body regarding the net worth of the Company at 31 December 2014 prepared as required by Article 2446 of the Italian Civil Code and Article 74, first paragraph, of the Consob Listing Rules.
On the basis of the supervisory activities carried out during the financial year, the Board of Statutory Auditors finds no reason why you should not approve the Financial Statements at 31 December 2014 and the proposals to cover the loss for the financial year put forward by the Board of Directors.
Rho (Milan), 30 March 2015
The Board of Statutory Auditors Stefano Mercorio Alfredo Mariotti Damiano Zazzeron
The Ordinary Shareholders' Meeting held on 29 April 2015 in Rho (Milan) at the Auditorium of the Centro Servizi of the Exhibition Site, Strada Statale del Sempione no. 28,
1)
| Losses for the year | 30,674,121.31 |
|---|---|
| Covered by: | |
| - Legal reserve | 7,865,332.59 |
| - Share premium reserve | 1,783,076.48 |
| - Other reserves | 1,419,688.39 |
| Residual amount: | |
| - Losses carried forward | 19,606,023.85 |
• to postpone, until the Shareholders' Meeting to approve the Financial Statements at 31 December 2015, any eventual adoption, if the necessary conditions are met, of the provisions under Article 2446, paragraph 2 of the Italian Civil Code.
2)
Fiera Milano SpA SpA Financial Statements to 31 December 2014 – Resolutions passed by the Ordinary Meeting of Shareholders 290 • to determine the remuneration payable to the Board of Directors as follows: (i) fixed annual remuneration for the Chairperson of Board of Directors of Euro 107,000; (ii) fixed annual remuneration for each Board Director of Euro 35,000, for a maximum total of Euro 280,000, both (i) and (ii) hypothesis pro rata temporis and (iii) an attendance fee of 350 for each Board meeting attended by the same and also reimbursement of any documented expenses incurred in carrying out his/her role.
• to appoint the Board of Statutory Auditors for three financial years and, therefore, until the approval of the Financial Statements to 31 December 2017, persons indicated in the list presented at the registered office and therefore:
a) Statutory Auditors
b) Substitute Auditors
• to approve the Report on Remuneration pursuant to Article 123 -ter of Legislative Decree 58/98 and, in particular, Section One of the Report.
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