ite group plc 2008 report 2008.pdf · overview highlights 02 ite group plc annual report 2008 year...

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ITE Group plc International headquarters105 Salusbury RoadLondon, NW6 6RGTel: +44 (0)20 7596 5000Fax: +44 (0)20 7596 5111E-mail: [email protected]

ITE Group plc Annual Report

Creating marketplaces for business...

2008

ITE would like to thank all those who participated in producing this report, particularly the members of staff for their contributions.

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ITE Group plc is the leading organiser of international trade (business to business) exhibitions and conferences in the sought-after markets of Eastern Europe and Central Asia.

The Company was founded in 1991 and annual revenues now exceed £100 million from a portfolio of over 160 events. ITE has used the experience gained from developing successful events in its core emerging markets to expand operations into other regions with signifi cant growth potential. In 2008, ITE organised events in 24 cities in 15 countries and these events are supported by a network of 22 offi ces worldwide.

The ITE network is a signifi cant asset and the workforce of almost 900 staff produces and promotes its market leading events by delivering a combination of global expertise, local customer service and in-depth market knowledge.

The catwalk at the UK’s leading trade event for the fashion and clothing sector – Moda.

Entertainment at the Yar Restaurant, the host for MIPS’ Gala Dinner.

Russia’s largest trade exhibition, MosBuild.

The Agricultural Outlook Forum at World Food Moscow.

Directors, advisers and other information

Directors Iain Paterson, non-executive Chairman Russell Taylor, Chief Executive Offi cer Neil England, non-executive Director Michael Hartley, non-executive Director Neil Jones, Finance Director Edward Strachan, executive Director Malcolm Wall, non-executive Director

Company Secretary Neil Netto

Registered offi ce ITE Group plc 105 Salusbury Road London, NW6 6RG

Registration number 1927339

Auditors Deloitte LLP London

Solicitors Olswang 90 High Holborn London, WC1V 6XX

Principal bankers Barclays Bank plc 27 Soho Square London, W1D 3QR

Company brokers Numis Securities Limited The London Stock Exchange Building 10 Paternoster Square London, EC4M 7LT

Registrars Capita Registrars Northern House Woodsome Park Fenay Bridge Huddersfi eld West Yorkshire, HD8 OLA

Public relations Financial Dynamics Holborn Gate 26 Southampton Buildings London, WC2A 1PB

Website www.ite-exhibitions.com

Financial calendarFinal dividend 2008 Interim dividend 2009Ex date 11 February 2009 Record date May 2009Record date 13 February 2009 Payment date June 2009Annual General Meeting 27 February 2009Payment date 13 March 2009

Overview Business review Governance Financial statements

97

ITE Group plcAnnual Report 2008

Contents


01


Independent auditors’ report 50Consolidated income statement 52Consolidated statement of recognised income and expense 53Consolidated balance sheet 54Consolidated cash fl ow statement 56Notes to the consolidated accounts 58Independent auditors’ report 90Company balance sheet 91Notes 92Directors, advisers and other information 97Financial calendar 97

Highlights 02At a glance 04Chairman’s statement 14

Chief Executive’s statement 16 Business review – ITE’s business 20Business review – Divisional review 22Business review – Finance 26Business review – Risks & uncertainties 29

Corporate and social responsibility 30Directors 32Directors’ report 34 Report on corporate governance 39Report on remuneration 43

Financial statements

Governance

Business review

Overview

OverviewHighlights

02


Year ended Year ended 30 September 2008 30 September 2007

Volume sales 500,000m2 454,900m2

Revenue £110.1m £99.1m Profi t before tax £34.5m £33.7m Headline pre-tax profi t* £37.1m £35.3m Basic earnings per share 9.4p 9.1p Diluted earnings per share 9.3p 9.0p Headline diluted earnings per share** 10.1p 9.4p Dividend per share 5.3p 4.5p Net cash £29.1m £26.7m Net assets £44.1m £45.4m

Revenue (£m)

08 110.1

07

06

05

04

99.1

82.4

78.5

60.8

+11%

Notes:* Headline pre-tax profi t is defi ned as profi t before tax, amortisation of acquired intangibles and impairment of goodwill (including associates) and profi ts

or losses arising on disposal of group undertakings – see note 4 for details.** Headline diluted earnings per share is calculated using profi t before amortisation of acquired intangibles and impairment of goodwill (including associates)

and profi ts or losses arising on disposal of group undertakings – see note 8 for details.

Net cash (£m)

08 29.1

07

06

05

04

26.7

21.2

13.0

33.5

+9%

Headline pre-tax profi t (£m)#

08 37.1

07

06

05

04

35.3

26.0

25.3

18.1

+5%

Net assets (£m)

08 44.1

07

06

05

04

45.4

43.6

32.1

44.4

(3%)

# The results for 2004 are based on UK GAAP. 2005 through to 2008 are based on IFRS.


03


500,000m2

159

> Sixth successive year of growth in revenue and profi ts

> Like-for-like* revenue growth of 13% over previous year

> Strong balance sheet with net cash of £29.1mat year end

> Acquisitions in St Petersburg and Novosibirsk add to core portfolio of events

> Dividend up 18% to 5.3p

> £75m of revenues booked for 2009 fi nancial year

* ‘Like-for-like’ fi gures exclude the eff ect of signifi cant non-annual events, acquisitions and disposals.

events held

space sold in year

Revenue by key market sector

ConstructionOil and GasFoodTravelMotorFashionIT and TelecomsHealthcareOther

1

2

3

4

5

6

78

9

1

2

3

4

5

6

7

8

9

Revenue by region

RussiaCentral Asia & CaucasusEastern & Southern EuropeUK & Western EuropeRest of World

15

2

3

41

2

3

4

5

OverviewAt a glance

04


Russia Central Asia & Caucasus

ConstructionFoodTravel

MotorOil and Gas

Key sectors ConstructionOil and Gas

HealthcareTravel

ITE offi ces MoscowSt PetersburgNovosibirsk

AlmatyAstanaAtyrauBaku

TashkentBishkekDushanbe

Square metres sold (000s)

Number of events

247

52

250 (2007)

44 (2007)

92

74

86 (2007)

65 (2007)

2008 Revenue (£m) 66.061.7 (2007)

22.018.1 (2007)

Number of staff

416198 (2007)

182191 (2007)

See more P06 > See more P08 >

ITE around the world

ITE’s business in Russia has been expanded in the year by the addition of a new offi ce in Novosibirsk, Siberia.ITE now operates in the three largest cities in Russia and has over 400 staff in the country.

In Central Asia ITE’s business sold circa 92,000m2 representing a like-for-like increase of 6% over the previous year’s fi gures.


05


UK & Western Europe Rest of WorldEastern &Southern Europe

Fashion ConstructionConstructionTravelMotor

IstanbulKyiv

LondonHuddersfi eldHamburg

UtrechtValencia

AlgiersBeijingUrumqi

Kuala LumpurDubai

125

25

78 (2007)

28 (2007)

33

5

36 (2007)

6 (2007)

3

3

5 (2007)

5 (2007)

9.37.1 (2007)

12.310.6 (2007)

0.61.7 (2007)

10299 (2007)

164158 (2007)

3423 (2007)

See more P10 > See more P12 > See more P25 >

ITE’s principal offi ces are in Kyiv, Ukraine and in Istanbul, Turkey. ITE has a 50% associate business in Istanbul in addition to its wholly owned business.

At the end of the year ITE opened a new offi ce in Valencia, Spain. This will serve as an outbound sales offi ce, selling the Group’s portfolio to Spanish based businesses.

ITE was involved in three small events this year, with a construction event in West China and two events in Algeria. ITE has in the year opened outbound sales offi ces in Malaysia and the UAE.

Novosibirsk Moscow

St Petersburg

Overview

06


Russia is the world’s tenth largest economy and has seen healthy GDP growth in recent years. It is widely viewed as an attractive emerging market for companies who are looking to grow their business.

Russia is a country with substantial long term growth potential and along with Brazil, India and China (the BRIC economies) is seen as an emerging economic power.

A signifi cant driver behind Russia’s economy is its oil, gas and mineral wealth. This, along with a sustained period of political stability has underpinned the development of many other areas of the market. Russia’s car market has been one of the largest in Europe and other sectors such as food & drink, building & interiors and outbound travel and tourism have also seen signifi cant growth in recent years.

Russia

01 MosBuild at Crocus Expo. The event in 2008 hosted over 2,700 exhibitors at two venues.

Russian key market sectors by revenue

1 Construction2 Oil and Gas3 Food4 Travel5 Motor6 IT and Telecoms7 Healthcare8 Other

1

23

4

5

67

8

2008 Revenue (£)

66.0m61.7m (2007)

ITE offi ces

Sources: RBCC, UKTI, PWC, Business Week, Business Monitor International, Russia Profi le

01


07


02 Moscow International Protection & Security event (MIPS) at Expocentr.

GDP per head

$14,800Source: cia website – the world factbook, purchasing power parity


247250 (2007)

Number of staff

416198 (2007)

Exhibitions organised

5244 (2007)

PopulationMoscow 10.4m St Petersburg 4.6m Novosibirsk 1.4mSource: cia website – the world factbook

141mpopulation of region

02

Almaty

AstanaAtyrau

Baku

Dushanbe

Tashkent Bishkek

Overview

08


Since their independence from the Soviet Union in the early 1990s, the countries of Central Asia and the Caucasus have emerged as an increasingly attractive region for investment and economic development.

Kazakhstan is the world’s ninth largest country, covering a vast area and is rich in natural resources such as oil and metals.

Azerbaijan and Uzbekistan also have signifi cant natural resources. In Azerbaijan, revenues from the oil sector have fuelled some of the highest GDP growth rates in the world in recent years, helping to stimulate the expansion of many other industry sectors.

Central Asia& Caucasus

Central Asia & Caucasus key market sectors by revenue

1 Construction2 Oil and Gas3 Food4 Travel5 Motor6 Fashion7 IT and Telecoms8 Healthcare9 Other

1

23

4

56

7

98

01 Work begins at the new exhibition venue in Baku, Azerbaijan.

Sources: economist.com, UKTI

ITE offi ces

2008 Revenue (£)

22.0m18.1m (2007)

01


09


Governance Financial statements

02 Outdoor exhibits in Almaty, Kazakhstan during Mining World Central Asia & Kazkomak.

PopulationTashkent 2.1m Almaty 1.2m Baku 1.1mBishkek 0.8mDushanbe 0.7m Astana 0.6m Source: cia website – the world factbook


GDP per head



9286 (2007)

Number of staff

182191 (2007)


7465 (2007)

02

Overview

10


ITE’s main interest in Eastern & Southern Europe is focused on the Turkish and Ukrainian markets. Both countries have delivered robust economic growth in recent years.

Turkey and Ukraine are both keen to strengthen ties with the EU. Turkey opened accession negotiations in 2005 but have made slow progress. Ukraine is keen to build on its ‘association agreement’ with the EU but is hampered by internal politics and split loyalties between Russia and Europe.

Nevertheless, long term growth prospects remain good and there continues to be interest from companies looking to establish their business in the region.

Eastern &Southern Europe

Eastern & Southern Europe key market sectorsby revenue

1 Construction2 Oil and Gas3 Food4 Travel5 Fashion6 IT and Telecoms7 Healthcare

1

23

4

6

5

7

01 The Architecture & Design Festival at KievBuild, Ukraine.

Sources: times online, economist.com


12578 (2007)


2528 (2007)

2008 Revenue (£)

9.3m7.1m (2007)

01

Istanbul

Kyiv

PopulationIstanbul 10.8mKyiv 2.7mSource: cia website – the world factbook


11


02 Face-to-face communication: a valuable facet of trade events.

ITE offi ces


GDP per head


Number of staff

10299 (2007)

02

Overview

12


ITE has very successful fashion, clothing and footwear events in the UK, supported by a portfolio of industry magazines. Western Europe is also the source of a signifi cant proportion of outbound sales for ITE’s events in other regions around the world. In 2008, ITE also co-organised the prestigious 19th World Petroleum Congress in Madrid, Spain.

Consumers and businesses in emerging markets such as those in the CIS still demand high quality products from ‘the west’. Products from countries such as Germany, Italy, Spain and Great Britain are in demand.

UK & Western Europe

UK & Western Europe key market sectors by revenue

1 Oil and Gas2 Fashion 1

2

01 National Oil Company stands at the prestigious 19th World Petroleum Congress in Madrid, Spain.


3336 (2007)


56 (2007)

02

01

LondonHuddersfield Hamburg

Utrecht

Valencia


13


02 Action from the catwalk at Moda, Birmingham, UK.

GDP per head


ITE offi ces

2008 Revenue (£)

12.3m10.6m (2007)

Number of staff

164158 (2007)

14


OverviewChairman’s statement

Group performanceITE Group plc has produced another strong set of fi nancial results for the year ending 30 September 2008. In the lesser year of our biennial pattern, revenues increased by 11% to £110.1 million (2007: £99.1 million). Headline pre-tax profi t increased by 5% to £37.1 million and reported Profi t before tax has increased to £34.5 million (2007: £33.7 million). Fully diluted earnings per share have increased to 9.3p per share (2007: 9.0p per share). These results have been achieved alongside mixed trading conditions in some of our markets and are a good indication of the resilience of the Group’s business model. The Group generated cash fl ow from operations of £52.9 million in the year, from which it applied £13.5 million to investment in new businesses, £12.1 million to dividends and £15.9 million to share buy backs. The Group’s cash balances at the year end were £29.1 million (2007: £26.7million).

Strategic progressThe Group’s primary strategy over the past few years has been to maximise the organic growth opportunities available through its strong market positions in Russia and Central Asia. The Group has an established management structure and a business model which is capable of replication both in our existing markets and in other emerging market countries. The Group continues withits strategy of seeking opportunities for ITE to leverage its international sales network onto local products.

In Russia and in Central Asia, ITE has the unique assets of strong local infrastructure and an eff ective international sales network. The Group has recently made good progress in expanding its international sales reach by opening offi ces in China, and more recently Spain, Dubai and Malaysia. Progress has also been made this year to expand the Group’s product range by acquiring the Interstroyexpo construction event in St Petersburg, the Sfi tex security event in St Petersburg and a complete portfolio of exhibitions in Novosibirsk, Siberia. The businesses are performing to plan and the benefi t of these acquisitions will have their fi rst impact on our profi ts in 2009.

Iain PatersonChairman

The Board remains confi dent that ITE with its advance bookings, strong cash fl ow, leading exhibition brands and experienced management team is well positioned for the future.


15


We continue to maintain excellent relationships with our venue partners. In Kazakhstan we have agreed to support the Almaty venue in its plans to expand the total gross exhibition space by 20,000m2. In Baku, Azerbaijan, construction has started on a new 28,000m2 exhibition centre where ITE will become the anchor tenant in a country whose economy is still showing robust growth.

The recent change in the world economic climate will present new and fresh challenges for the Group in the markets in which it operates. We are well positioned to benefi t from the changed circumstances having £29.1 million of cash on the balance sheet, low operational gearing and continuing strong cash generation. We are able to take advantage of any opportunities that will help us to achieve our strategy as and when they arise.

Board and managementThere have been a number of changes to the Board. Russell Taylor was appointed as Acting Chief Executive in addition to his existing duties as Finance Director, following the departure of Bill Dye in January. The Board were pleased to confi rm Russell’s appointment as Chief Executive in May. Neil Jones joined the Board as Finance Director on 4 November 2008. Neil was previously the Finance Director at Tarsus Group plc, a UK listed international exhibition company. He brings to the Board experience of making acquisitions in new emerging market territories and extensive knowledge of the exhibition industry outside Russia and the CIS.

Sir Jeremy Hanley stepped down from the Board at the AGM in March after having served as a non-executive Director for nine years from the fl otation of the Group as a listed company. The Board is deeply grateful for his wise counsel and commitment during the years of the development of ITE. Neil England was appointed a non-executive Director in March. Neil has fi rst-hand experience of managing businesses in Russia and the CIS and brings valuable perspectives to bear on our current business. Michael Hartley has been appointed the Senior Independent Director and has replaced Sir Jeremy as Chairman of the Audit Committee. Malcolm Wall has become Chairman of the Remuneration Committee.

DividendThe Board is recommending to shareholders a fi nal dividend of 3.7p per share (2007: 3.2p), making a total dividend for the year of 5.3p per share (2007: 4.5p). The dividend for the year represents an increase of 18% over last year’s dividend, refl ecting both the strong cash position of the Group and the Board’s confi dence in its positioning and future.

OutlookITE’s current bookings indicate that like-for-like volume sales will show little or no growth in 2009, but overall volumes will be improved by non-annual events and the acquisitions made in this year. Revenue growth is expected to be positive refl ecting pricing policy, mix and the benefi cial eff ect of exchange rates on reported revenues. At 28 November 2008 like-for-like bookings are for volume sales slightly down on last year but for revenue growth in excess of 10% over last year. Advance bookings already made for this fi nancial year are £75 million (2007: £61 million at the same date).

The global economy is experiencing uncertain and diffi cult times and we continue to monitor local market conditions closely. Currently the principal economies in which ITE operates in Russia and Central Asia are still expected to grow, albeit at lower levels than previously forecast. Our strong exhibition brands enjoy leading positions in their markets and access a broad customer base across international and local markets. Accordingly we expect our exhibitions will prove to be resilient in this testing environment. The Board remains confi dent that ITE with its advance bookings, strong cash fl ow, leading exhibition brands and experienced management team is well positioned for the future.

Iain PatersonChairman1 December 2008

16


Business reviewChief Executive’s statement

Results for 2008 fi nancial yearRevenue for the year was £110.1 million, an increase of 11% over last year (2007: £99.1 million) and an improvement in like-for-like revenues of 13%. Growthin revenue was largely driven by yield improvement with more sales in higher priced products, a reduction in marginal business activity, price increases and favourable currency movements all contributing to the improvement. The gross margin has remained at 50% refl ecting the Group’s biennial pattern of events.

Headline pre-tax profi t of £37.1 million was an absolute improvement on last year’s result of £35.3 million, and was underpinned by a 16% improvement in like-for-like fi gures. This result was achieved after making a £3.3 million charge against derivative currency hedges which off set much of the benefi cial eff ect of exchange rate movement on the Group’s reported revenues for the year. The like-for-like increase in headline profi ts of circa £5.0 million was largely driven by growth in higher margin products.

The business activity has again provided strong cash fl ow in the year. Headline profi t before tax of £37.1 million has translated to an operational cash fl ow fi gure of £52.9 million. The Group applied £13.5 million of cash to the acquisition of businesses and £15.9 million to share buy backs (including ESOT purchases) over the course of the year. Net cash balances of £26.7 million at the beginning of the year rose to £29.1 million at 30 September 2008.

This strong set of fi nancial results for the year was achieved despite the early impact of the global fi nancial downturn aff ecting some of our markets and serves to demonstrate the resilience of strong market positions in economies showing good domestic growth.

Trading and operating performance in 2008ITE’s revenue growth has again been strong in its major sectors especially construction, oil and gas and travel. Across its principal sectors ITE experienced resilience in its major international brands and was active in thinning out low margin activity in its portfolio.

There were fi ve new launches in the construction sector and like-for-like revenue growth from this sector was 17% from a 4% volume growth. In the Oil and Gas sector there were two new launches in Turkmenistan and a highly successful sales performance on World Petroleum Congress 2008. The cancellation of an event in Algeria improved profi ts but dampened revenue and yield growth. Like-for-like revenue growth in the oil and gas sector was 4% from a marginally smaller volume base. In the Travel and Leisure sector there was one new launch in Kazakhstan and an 11% revenue growth earned from similar sales volumes.

Russell TaylorChief Executive Offi cer

The Group has a strong business model and its strategy is to actively expand the range and diversity of product to our international customer base.


17


In the 2008 fi nancial year the Group ran 159 exhibitions (2007: 148) including 15 new launches (2007: 17).

The details of our exhibitions and conferences business (excluding publishing) are:

Sq metres Gross Average sold Revenue profi t yield 000s £m £m per m2

2007 All events 455 97 49 Non annual (23) (6) (4) 2007 Annually recurring 432 91 45 £210 Acquisitions 19 2 1 Growth (2) 12 8 2008 Annually recurring 449 105 54 £234 Non annual 51 3 1 2008 All events 500 108 55 The Group’s like-for-like volume sales for the year were aff ected by the cancellation of some unprofi table events (circa 7,000 m2) and were marginally less than last year. However, a combination of sales mix, price increases and favourable currency movements yielded a net 13% increase in like-for-like revenues. Approximately half of the improvement in revenues arose from benefi cial currency movements.

RussiaRussia has enjoyed real growth in Gross Domestic Product of 7-8% for the last two years, and trading conditions in the year to 30 September 2008 were not signifi cantly aff ected by the world’s fi nancial crisis or by the withdrawal of foreign investment from Russia. Like-for-like revenue growth from exhibitions and events in Russia was 12% from total space sold of 247,000m2 (2007: 250,000m2). International quality venue space in Moscow is now circa 300,000m2, which is suffi cient for the current size of the Moscow exhibition business though the fi xture list remains congested at peak times. The biggest infl uence on the Moscow result is always the size and pricing of the construction event, MosBuild. Although volume growth this year suff ered from a date clash with another international event which reduced overall growth to 3%, pricing, discount control and benefi cial currency movement supported good revenue improvement.

For other events, trading remained strong with good demand from the international customers of our major events being a recurring feature. In St Petersburg there has been no marked change in the trading environment and the exhibition industry still awaits a defi nitive statement on future exhibition venues. ITE has this year established a third Russian offi ce through the acquisition of Siberian Fairs in Novosibirsk which since its acquisition has traded in line with management’s expectations. There is good interest from our international exhibitor base in the Novosibirsk exhibitions, but development of a new venue is key to the future growth of the business. There are presently two potential venue projects in varying stages of advancement, and planned for 2010.

Central Asia & CaucasusOverall, revenues increased by 22% in Central Asia & Caucasus from a volume sales increase of 6%. The Group’s most notable impact from the current fi nancial crisis was the downturn in the Kazakhstan property market, which in turn led to the reduction in size of the Autumn construction event, KazBuild. The Kazakhstan economy has a relatively high exposure to foreign debt and bank lending had supported a property and construction boom over recent years, which was an early victim of the international liquidity crisis.

In Azerbaijan the economy is still enjoying growth in Gross Domestic Product of more than 13% and with a relatively low exposure to foreign debt there has been no marked change in market conditions since last year. ITE’s business performance was strong with revenues from the Baku offi ce increasing by over 20% year-on-year. Construction has now started on a new 28,000m2 venue in Baku and ITE are in advanced discussions to be an anchor tenant for the new venue. Our other Central Asian market is Uzbekistan where again exposure to foreign debt as a proportion of Gross Domestic Product has been relatively low and real economic growth remains forecast to be circa 7% for next year. The recently constructed new pavilion at the venue has supported good revenue growth this year to £2.8m, a 50% increase in like-for-like revenues.

Key performance indicators:The key performance indicators ITE uses to measure progress against its strategic objective, and its performance in this fi nancial year, are set out below:

18


Business reviewChief Executive’s statementcontinued

Eastern & Southern EuropeIn Eastern & Southern Europe like-for-like volume sales growth was 2% yielding revenue growth of 12%. Our two main markets are in Ukraine and Turkey. Both countries are exposed to high levels of foreign debt relative to the size of their economy and both have had political uncertainty in the year. Encouragingly in both Turkey and Ukraine our offi ces have enjoyed good demand for their exhibition products over the last twelve months. The new fi nancial year has started well in both countries with good bookings to date but volatility in their domestic currencies is expected to make domestic sales more challenging in the future. UK & Western EuropeModa’s performance in the last fi nancial year has been excellent, maintaining a good fi nancial result in diffi cult market conditions. In the UK our fashion business is aff ected by the slowdown in the UK retail market, but the ability to off er a complete marketing solution across publishing and exhibitions brings added value to our customers.

StrategyITE’s primary business objectives remain:

The creation of sustainable growth in headline earnings >per share; andThe creation and maintenance of sustainable market >leadership in its markets.

ITE’s strategy for achieving its objective is based on enhancing its existing business strengths and gaining incremental synergy through expansion. ITE aims to extend its existing business model in its current markets by diversifying its exhibition portfolio, but also to ‘leverage’ its strengths both through expansion of its international sales network and of its product base to other similar markets.

The business strengths which ITE aims to build upon are:

International sales networkITE has offi ces making sales in territories where historic and political trading relationships between exporters and the Russian and CIS economies have long existed. ITE’s offi ces in Turkey and Western Europe account for circa 50% of its sales into its core Russian and CIS exhibition products. There are also strong trading links between the Russian and CIS states which ITE is able to access through its local offi ce infrastructure.

ITE’s revenues from existing (‘like-for-like’) products >has increased by 13% in the year.

The annually recurring base metres of our exhibition >business as at 1 October 2007 was 430,000m2. Acquisitions and growth have increased this to 490,000m2 as at 1 October 2008.

ITE has made four acquisitions in the year to >supplement our ‘product’ off ering. Sfi tex, a security exhibition in St Petersburg, Interstroyexpo, a construction event in St Petersburg, Siberian Fairs in Novosibirsk, a regional offi ce with 30+ events in Siberia and Bubble, a childrenswear event in London.

In Moscow ITE has an agreement in principle to >extend to 2011 the pricing and commitment for its main venue.

To increase revenues from existing exhibition portfolio

To increase the annually recurring volume base of our exhibition portfolio

To make incremental bolt on acquisitions in support of objectives

Secure forward venue rights for signifi cant exhibitions


19


ITE has this year expanded its international sales network to refl ect new trading relationships and to improve its performance in countries where in the past agents have been used to make its sales. ITE’s Beijing offi ce is a growing source of sales, accounting for 3% of sales into the core markets this year. Nascent sales offi ces have been opened recently in Spain, Malaysia and Dubai. These new sales offi ces will be more eff ective than the existing agency structure in delivering sales across the complete range of ITE’s products and in focusing on the right quality of exhibitors and content for our events.

Market leading eventsITE already has market leading exhibitions and conferences in its portfolio of events. However, there are industry sectors where ITE does not yet have a strong enough product in the market place. ITE is well positioned to build or acquire strong events in new sectors by using its local sales force, its international sales network and its good venue relationships. This year ITE acquired Sfi tex, a 3,000m2 security event in St Petersburg; with the support of ITE’s existing international sales teams it produced growth of over 50% in its fi rst year of ownership. In April, ITE announced the acquisition of Interstroyexpo, the leading St Petersburg construction event. Again the Group is able to bring its international sales forces to focus on the new event, which will next take place in April 2009.

Local presenceITE has well established offi ces in the markets where it holds its exhibitions. The knowledge, experience and contacts of the staff built up over the last 15 years enables ITE’s to sell to domestic exhibitors, to manage the professional staging of the event and to deliver reliably a targeted visitor audience to the exhibition.

In April ITE acquired a new exhibition portfolio in Novosibirsk, Eastern Russia. Siberian Fairs runs 30 exhibitions across all industry sectors and has market leading exhibitions in Novosibirsk. This extension of ITE’s offi ce infrastructure will provide a platform for future growth of the exhibition portfolio in Novosibirsk.

Venue relationshipsITE’s venue relationships are key to its business model, providing continuity, theme protection and growth for our key events.

ITE has continued to extend its working relationships with its principal venues in the year. In Kazakhstan ITE has reached agreement with Atakent to support the construction of a new pavilion that will double the currently available international quality exhibition spaceto circa 40,000m2. Construction is expected to be completed by the end of 2010. ITE is also in discussions to support the development of a 28,000m2 venue in Baku, Azerbaijan which is due to complete by 2010. In Novosibirsk ITE is in discussion with potential developers of new exhibition space in the city.

Russell TaylorChief Executive Offi cer1 December 2008

Construction Travel Motor Food IT Medical & interiors Oil & gas & leisure & transport & drink Fashion & telecoms & healthcare Other Total

Moscow ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● 16 St Petersburg ● ● 2 Kazakhstan ● ● ● ● ● ● ● ● ● ● 10 Azerbaijan ● ● ● ● ● ● 6 Uzbekistan ● ● ● ● 4 Ukraine ● ● ● ● 4 Turkey ● ● 2 UK & Western Europe ● ● ● 3 Turkmenistan ● 1 Tajikistan ● 1 Georgia ● 1 Total 8 10 3 3 6 3 4 5 8 50

20


Business reviewITE’s business

● > £0.5 million revenue ● < £0.5 million revenue

ITE’s top 50 events in 2008By gross profi t categorised by market and by sector

ITE is an organiser of exhibitions and conferences specialising in emerging and developing markets. ITE organises high-quality events of an international standard throughout the 15 countries in which it operates. The business is managed in fi ve main geographic sectors: Russia, Central Asia & Caucasus, Eastern & Southern Europe, UK & Western Europe and Rest of World (see Divisional review on pages 22 to 25 and the Highlights section on pages 2 and 3).

As an exhibition organiser, ITE hires venues at which it stages its events and markets the events to both exhibitors and visitors. Exhibitions and conferences provide an opportunity for participants from national and international companies to meet, network and transact business. The exhibition media is the best media for suppliers to display and demonstrate their products to potential buyers and this is particularly true in emerging and developing markets.

ITE’s strength derives from its focus on organising B2B exhibitions and conferences, the development of strong brands in key industry sectors and the regional expertise in the markets in which it operates. ITE has been operating in these markets for over 15 years and its experience and local knowledge are unique.

ITE’s principal business of organising B2B trade exhibitions accounts for over 90% of the Group’s revenues. Consumer exhibitions account for 3% of ITE’s revenue, conferences circa 2% and other activities relating to the core exhibition business (mostly publishing) account for 2% of revenue.

ITE’s sector brands are a key asset. The brands have been established through a sustained record of presenting high quality events which meet customer expectations. ITE events serve key industries including construction & interiors, oil & gas, food & drink, travel & leisure, motor & transport, fashion, medical & healthcare and IT & telecoms.

ITE has an extensive offi ce network, covering both the territories where our events are held and internationalsales offi ces in other countries. ITE is able to operate at national level where local staff are close to local industry trends and at an international level where our sales teams are in regular communication with key industry suppliers in our sectors. The Group has 22 offi ces across the world, each of them employing local staff . New international sales offi ces were opened in Spain, Malaysia and the UAE at the end of the year to help drive increased sales from these markets across our portfolio of shows. Further offi ces are planned during 2009.

% of 2008 GroupRegion Offi ces Staff Events revenues

Russia 3 416 52 60%Central Asia & Caucasus 7 182 74 20%Eastern & Southern Europe 2 102 25 8%UK & Western Europe 5 164 5 11%Rest of World 5 34 3 1%Total 22 898 159 100%

The offi ces of the Group co-operate in a unique way. Each offi ce sells its own exhibitions, but participates with equal levels of commitment in the exhibitions organised by other offi ces. This holistic approach has been carefully cultivated through the years and enables ITE’s business to follow long-established trading patterns.


21


Business to business

B2B or ‘trade’ exhibitions and conferences are the mainstay of our business.

Our customers – exhibitors, visitors, delegates, sponsors and speakers – are looking for opportunities to meet face-to-face to discuss, promote and conduct business. ITE events unite buyers with suppliers in exhibition pavilions, conference halls, meeting rooms and informally at networking events.

Our success continues because people want to do face-to-face business with people.

Established brands

A key strength behind our business is the ability to produce successful events year after year.

Over many years, we have developed events that consistently deliver results for our customers. With careful management and eff ective promotion, our brands have become trusted, respected and recognised as valuable marketplaces for business. The principles that shape our market leading events can often be replicated in several regions, allowing us to off er business opportunities in a range of emerging markets.

Our business is strengthened by the reputation of our established brands.

Strong network

Our global network provides an unparalleled level of support for our events.

We believe that the best way to organise successful international events in a large number of countries is through locally based organisers that are supported by a network of sales offi ces and agents around the world. A collective spirit combined with communication and co-operation cements the links throughout the group and the network is the result of a long-term commitment that cannot be easily replicated.

Local knowledge and global expertise produces eff ective international events.

22


Business reviewDivisional review

2008 2007Staff employed 416 198Exhibitions organised 52 44Square metres sold (000s) 247 250

RussiaOffi ces: Moscow, St Petersburg, Novosibirsk

Following the acquisition this year of Siberian Fairs in Novosibirsk, Siberia ITE now has over 400 staff based in the three largest cities in Russia. The sales and revenue fi gures above include the activity for Siberian Fairs since its acquisition in April this year and the 180 employees of the business explain the increase in ITE’s staff numbers in Russia. Overall the Russian business has seen steady demand for its products during the year, although events taking place in the fi nal quarter of the year showed little volume growth, probably refl ecting the early eff ects of tighter fi nancial markets in Russia. Overall like-for-like volume sales in Russia were 2% less than last year, but like-for-like revenues improved by 12%.

The exhibition market in Moscow has expanded considerably over recent years alongside the expansion in venue facilities. This year the Group sold 208,000m2 of net exhibition space in the year which was 1% less than last year on a like-for-like basis. ITE’s decision to cancel its participation in some marginal activity accounts for this small drop in volume sales. Most of the main events in Moscow take place in the spring season, and in March the Moscow International Travel and Tourism exhibition delivered a strong sales performance with an increase in space sold of 11% to 20,800m2. The most important event in ITE’s portfolio is the Moscow construction event, held in the fi rst week of April across the two main Moscow venues. The Mosbuild sectors based in Expocentr are wallbound and volume sales this year were 40,600m2 (2007: 39,740m2). MosBuild+ comprises the sectors based at the Crocus venue and this year achieved sales of 46,500m2. This represents an increase of 4% over the prior year – achieved despite the impact of a competitive date clash. Two events re-located this year to the Expocentr venue and both were able to show substantial growth over previous versions. The Moscow International Protection and Security event achieved a 13% increase in space sales to 7,600m2, and TransRussia, the international transport and logistics event, achieved a growth of over 30% in space sales to 8,200m2. This latter event is now established as a market leader in the sector and in its new venue has the potential to develop further. Expo-Electronica, the electrical components event takes place in April and performed well in improving its sales from 8,900m2 to 9,200m2. The Moscow International Motor Show (17,100m2) and World Food Moscow (24,100m2) both take place in the fi nal quarter of the year and both were similar in size to last year’s events.

In St Petersburg the business enjoyed steady demand for its products and its volume sales fi gures were slightly below last year’s fi gures. It was however a progressive year in developing the portfolio of events starting with the acquisition of the local security event Sfi tex, announced in January. The fi rst event under ITE’s ownership took place in October 2008, and grew from 3,000m2 to 5,000m2. In April ITE announced the acquisition

SummaryITE’s divisional revenue performance is summarised in the table below.

2008 2007 Actual Like-for-like £m £m change growth

Russia 66.0 61.7 7% 12%Central Asia & Caucasus 22.0 18.1 22% 22%Eastern & Southern Europe 9.3 7.1 31% 12%UK & Western Europe 12.3 10.6 16% 16%Rest of World 0.6 1.7 (64%) (64%)Total 110.1 99.1 11% 13%


23


of 75% of Interstroyexpo, the largest construction event in St Petersburg. This event will next take place in April 2009 and the combined strength of ITE’s construction off ering will help the Group to maximise growth opportunities for both events. ITE’s own construction event, BalticBuild, was held in September and produced a consistent sales performance delivering sales of 9,600m2.

ITE became the largest exhibition organiser in Novosibirsk following the acquisition of Siberian Fairs LLC in April this year. This business organises exhibitions in Construction, Furniture & Interiors, Motor, Food Products & Packaging and Agriculture. Since April it has staged 15 events which have performed in line with expectations. There are plans to develop a modern purpose built exhibition venue which will facilitate growth for Siberian Fairs’ largest events.

In Central Asia & Caucasus this year ITE’s businesses sold 92,300m2 representing growth of 6% over last year. Revenues of £22 million earned from the region represented a 22% like-for-like improvement over last year and again refl ected changes in pricing and in exchange rates, each making a broadly equal contribution to the yield improvement.

Central Asia & CaucasusOffi ces: Kazakhstan (Almaty, Astana, Atyrau) Azerbaijan (Baku), Uzbekistan (Tashkent), Kyrgyzstan (Bishkek), Tajikistan (Dushanbe) 2008 2007Staff employed 182 191Exhibitions organised 74 65Square metres sold (000s) 92 86

KazakhstanITE’s business in Kazakhstan sold 61,200m2 in the year, a 2% decrease from last year. This does not properly refl ect the trading conditions over the year and is disproportionally infl uenced by the KazBuild construction event held in September, which at 9,200m2 was 30% smaller than last year. Tightening credit conditions together with an infl ated property market combined to create falling property values and an oversupply of residential property development. The change in market sentiment was quick as ITE had enjoyed good growth of 10%+ in the Spring version of the same event. The other construction events in Astana and Atyrau performed in line with the prior year and a new regional event, KaragandaBuild, was launched and held twice in the year.

The other main event in Kazakhstan is the Kazakhstan International Oil & Gas Exhibition which successfully grew its space sales by 16% to 11,200m2, and delivered a similar increase in the size of its conference. The Oil and Gas events in Aktau and Atyrau also contributed strong performances. Other events continued to perform well; the food exhibition grew by 15% to 4,200m2 and the travel event grew by 9% to 3,200m2.

ITE continues to work closely with Atakent, the principal venue in Almaty and is now supporting the construction of a new 30,000m2 pavilion which will double the international quality exhibition space available in Almaty to 40,000m2 (after de-commission some older pavilions). This new venue facility will support the further development of ITE’s exhibition business in Kazakhstan.

AzerbaijanThe exhibition industry has continued to show growth and the Group sold 18,500m2 of space in the year representing like-for-like volume growth of 20% over last year. The construction event, BakuBuild, held in October 2007 achieved a growth in space sales of 5% and the Autoshow held in March delivered a 4% growth over last year. The Caspian Oil & Gas Exhibition and Conference took place in June and performed strongly across both the conference and the exhibition. The largest events in oil & gas and in construction are currently space constrained and will both benefi t from the development of a new 28,000m2 venue due for completion in 2010. ITE, withits established exhibition brands is in a good position to participate in the future growth in the Azerbaijan exhibition industry that the new venue will help to promote.

UzbekistanITE’s business in Uzbekistan enjoyed strong trading conditions and in selling 12,500m2 of exhibition space in the year realised an improvement of 31% in volume sales over last year. This year saw the return of the textile event, CAITME, and there were strong sales performances from World Food Uzbekistan, UzBuild, Tashkent International Healthcare exhibition and the Oil & Gas exhibition-conference, OGU.

24


Business reviewDivisional reviewcontinued

ITE’s principal offi ces in Eastern & Southern Europe are in Kyiv, Ukraine and in Istanbul, Turkey. The combined sales of these offi ces (excluding ITE’s 50% owned associate business in Turkey) for this year was 124,400m2, which includes the biennial construction machinery event, Ankomak, in Turkey. On a like-for-like basis sales volumes from the region grew by 2% in the year yielding a like-for-like increase in revenues of 12%.

UkraineThe Ukraine offi ce has performed well under its new management team. Total exhibition space sales of 56,000m2 in the year represented a like-for-like increase of 6% over the prior year. In the fi rst quarter of the year Public Health, ITE’s strongest healthcare event, delivered only a small increase in its space sales. The other key events taking place in the second and third quarters of the year all delivered good growth in space sales with the construction event, KievBuild, growing in size by 30%, the agricultural event, Kiev AgriHort by 20% this year and the Ukraine International Travel and Tourism event by 25% to 7,100m2.

Eastern & Southern EuropeOffi ces: Ukraine (Kyiv), Turkey (Istanbul)

2008 2007Staff employed 102 99Exhibitions organised 25 28Square metres sold (000s) 125 78

TurkeyThe 68,500m2 of exhibition space sold by ITE’s wholly owned subsidiary was boosted by its biennial construction machinery event, Ankomak. This event sold over 45,000m2 but has less impact on revenues as it has a relatively low yield. The main recurring events are in the optical and stationery sectors, and both performed in line with the last year in space sales. The Turkish outbound sales team made a valuable contribution to the Group’s overall sales in Russia and the CIS.

The contribution from ITF, the Group’s 50% associate was £0.1 million lower than last year’s result of £0.2 million. This refl ected the irregular timing of two large biennial events, one of which normally takes place in each year, but neither took place in this fi nancial year. Otherwise performance in the associate was consistent with last year.


25


The fashion business in the UK has continued to be aff ected by the downturn in the retail sector and ITE’s total space sales from the sector fell this year from 35,900m2 to 33,300m2. This was a good sales result in a challenging environment and with careful cost management, the fi nancial results of the business were impressive. The related publishing business suff ered a decline in revenue which impacted on its net operating margin. However the fashion magazines are important enabling the Group to off er a complete marketing solution to the industry.

At the end of the year Moda announced the acquisition of ‘Bubble’, a Childrenswear event held twice a year in London. This is a small event that has potential to grow and will benefi t from the support of the Childrenswear Buyer magazine, part of ITE’s portfolio of fashion publications.

The Group has been the sales agent and consultant on the 19th World Petroleum Congress for the last three years. The 2008 event was held in Madrid in June this year and was a huge success with 15,800m2 of space sold at the exhibition and over 4,100 delegates attending the conference. This event showcased ITE’s strengths as an organiser of large scale congresses and further developed its reputation in the oil and gas industry.

ITE has recently opened an outbound sales offi ce in Valencia to maximise its sales from the Spanish market.

UK & Western EuropeOffi ces: UK (London, Huddersfi eld), Germany (Hamburg), Holland (Utrecht), Spain (Valencia)

2008 2007Staff employed* 164 158Exhibitions organised* 5 6Square metres sold (000s)* 33 36

* of the total staff London and Germany international sales account for 85 staff ; 43 staff are London corporate and 36 staff manage the UK fashion magazines and exhibitions.

ITE was involved in three small events this year, with a construction event in West China and two events in Algeria, one of which has since been discontinued. ITE has in the year also opened offi ces in Malaysia and the UAE which, like the Spanish offi ce will focus on outbound sales for the Group’s events.

Rest of WorldOffi ces: Algeria (Algiers), China (Beijing, Urumqi), Malaysia (Kuala Lumpur), UAE (Dubai)

26


Tax chargeThe tax charge of £11.1 million represents 32% of profi t before tax. This eff ective rate is in line with the prior year, refl ecting the withholding tax burden on repatriating cash from our Russian businesses in the year.

Earnings per shareBasic earnings per share increased to 9.4p (2007: 9.1p). Fully diluted earnings per share increased to 9.3p from 9.0p in the prior year.

The Group achieved headline diluted earnings per share of 10.1p per share (2007: 9.4p). Headline diluted earnings per share is based upon profi t for the fi nancial year attributable to equity holders of the parent, before amortisation of acquired intangible assets and any profi ts or losses on disposal of Group undertakings.

DividendsThe Group has recommended a fi nal dividend of 3.7p for 2008, to bring the total dividend for the year to 5.3p (2007: 4.5p).

Return to shareholdersITE is committed to maximising shareholder return and is a leading performer in its sector. ITE’s progressive dividend policy has resulted in total dividends in 2008 of 5.3 pence per share, up 18% over 2007 (4.5p). Since 2004 the dividend has increased on a compound basis by 25% per year. Set out below is a graph showing total cash returned to shareholders (including the share buybacks in August 2005 and in the years ended 30 September 2007 and 2008) against the post tax profi ts earned by ITE over the last fi ve years.

Revenue and gross profi t Turnover for the year was £110.1 million (2007: £99.1 million). On a like-for-like basis this is a 13% improvement over last year’s comparable turnover.

The Group achieved a gross margin of 50% (2007: 50%). The current year included the biennial Ankomak event in Turkey which has space sales of over 45,000m2 but is a low margin event, and together with the trading result from Siberian Fairs since its acquisition, has had the eff ect of dampening margin growth this year.

Administrative expenses across the Group increasedto £18.8 million, up from £17.2 million in the previous year. Administrative expenses include an amortisation charge of £2.6 million (2007: £1.6 million) refl ecting the acquisitions made in the year and a charge for share-based payments of £0.9 million (2007: £1.6 million). Overall, Group administrative expense represented 17% of revenue (2007: 17%), resulting in net operating margins of 33% (2007: 33%) for the year.

Operating profi t was £36.5 million against a prior year profi t of £33.1 million.

Headline pre-tax profi t this year was £37.1 million (2007: £35.3 million); on a like-for-like basis this is a 16% increase over the previous year.

Other operating incomeOther operating income represents rental income earned from subletting surplus offi ce space, principally at ITE’s London offi ces.

Finance income Finance income for the year was £1.9 million (2007: £1.8 million). Interest from bank deposits increased to £1.9 million in the year (2007: £1.8 million) as the Group held higher average cash balances throughout the year of £36.5 million (2007: £29.9 million). The average interest rate for the Group was marginally higher than the prior year.

Finance costsFinance costs of £3.9 million (2007: £1.1 million) represent the interest cost of the Group’s borrowings in Euro and US Dollar, bank charges and the net foreign exchange costs of the Group’s derivative instruments of £3.3 million (2007: £0.4 million). The Group enters into currency borrowing arrangements as part of its currency hedging activity and at 30 September 2008 the Group had borrowings of 35.9 million, and US$3.3 million.

Business reviewFinance

Total cash returned to shareholders

Profi t after tax Dividends

03–040

£5m

£10m

£15m

£20m

£25m

£30m

£35m

£40m

04–05 05–06 06–07 07–08

10.9

6.0

18.4

29.9

17.4

8.9

22.6

17.5

23.7

Share buy-backs

7.1

11.3 12

.98.

1


27


Net assets decreased by £1.3 million to £44.1 million. The main changes are in goodwill and intangibles (an increase of £18.4 million) and net cash (increase of £2.5 million), off set by a decrease in venue advances (£1.2 million), an increase in deferred tax (£2.0 million) and an increase in deferred income (£18.0 million).

Investment and capital expenditureThe Group’s capital expenditure on plant and equipment for the year was £1.1 million (2007: £0.8 million) and included exhibition equipment, computer equipment and associated software.

Venue arrangementsThe Group has long term arrangements with its principal venues in our main markets setting out ITE’s rights over future venue use and pricing.

Expocentr is ITE’s principal venue in Moscow and hosts some of its largest exhibitions including MosBuild, Moscow International Oil & Gas exhibition, Moscow International Travel & Tourism, World Food Moscow, TransRussia and Moscow International Protection & Security exhibition. ITE has an agreement with Expocentr which secures the Group’s rights to conduct its exhibitions until 2010.

Crocus Exhibition Centre is located on the outskirts of Moscow city centre and hosts MosBuild+, Expoelectronica, Moscow International Motor Show and the Moscow International Boat Show. ITE has an agreement with Crocus which secures the Group’s rights to conduct its exhibitions until 2015.

Lenexpo is located in St Petersburg and hosts the newly acquired Interstroyexpo and Baltic Building Week events. ITE has an agreement with Lenexpo, providing rights to hold its exhibitions and agreed rates to 2011.

Atakent Exhibition Centre is the largest venue in Almaty, Kazakhstan and hosts the Kazakhstan International Oil & Gas events and KazBuild exhibitions. ITE’s agreement with Atakent confi rms its rights to hold its exhibitions on agreed rates until 2017.

The Group funds the development of venues and facilities where improved facilities will enhance the prospects and profi tability of its organising business. The funding can take the form of a prepayment of future venue fees (‘advance payment’), or a loan which can be repaid by cash or by off set against future venue fees (‘venue loan’). Generally the funding brings rights over future venue use and advantageous pricing arrangements through long term agreements. Venue loans and advance payments are included in the Balance Sheet under non-current and current assets.

Cash fl owCash generated from operations in the year was £52.9 million (2007: £41.5 million). The principal applications of cash were £15.9 million on purchasing shares on the open market for the Employees Share Option Trust (“ESOT”) and treasury shares that were cancelled in the year (2007: £17.5 million), £0.8 million applied to venue loans and advances (2007: £0.9 million); £7.0 million was paid in tax; (2007: £10.3 million); £13.5 million was applied to acquisitions in the year (2007: £1.4 million) and £12.1 million was distributed as dividends (2007: £9.6 million). The net increase in cash balances at 30 September 2008 was £2.5 million.

Net cash at 30 September 2008 was £29.1 million(2007: £26.7 million).

Acquisitions & disposalsOn 29 February 2008 ITE acquired a Security and fi re protection event, Sfi tex, from Omega for consideration of Roubles 30 million (approximately $1.15 million). The event is held in October each year.

On 29 April 2008, ITE acquired 100% of Siberian Fairs LLC, from Mr Yakushin, for consideration of $12 million. The Company organises over 30 exhibitions in Novosibirsk, Russia, held throughout the year.

On 15 June 2008, ITE acquired 75% of Primexpo NW LLC from Mr Trofi mov for consideration of 312 million. The Company organises Interstroyexpo, a construction event in St Petersburg. There are matching “put” and “call” options over the remaining 25%.

On 23 September 2008, ITE acquired a Childrenswear event, Bubble, from Kidding LLC for consideration of £0.3 million. The event is held in January and July each year in London.

Balance sheetThe Group’s consolidated balance sheet at 30 September 2008 is summarised in the table below:

Assets Liabilities Net assets £m £m £m

Goodwill and intangibles 57.1 – 57.1Property, plant and equipment 1.7 – 1.7Associates 1.4 – 1.4Venue advances 2.4 – 2.4Cash 35.7 (6.6) 29.1Deferred income – (64.1) (64.1)Current assets and liabilities excluding cash and venue advances 41.7 (17.3) 24.4Deferred consideration – (5.0) (5.0)Provisions – (0.9) (0.9)Deferred tax 1.6 (3.6) (2.0)Total as at 30 September 2008 141.6 (97.5) 44.1Total as at 30 September 2007 122.1 (76.7) 45.4

28


Since the year end the Group has entered into forward contracts to sell Euros for Sterling between April 2009 and September 2009. The value of the contract is 326.8 million at an average rate of 31.274:£1. These instruments are designated as hedging instruments.

Over the year, the Group has entered into currency borrowing arrangements to minimise its exposure to foreign exchange risk on trade receivables. At 30 September 2008 the Group had borrowings of 35.9 million, and US$3.3 million. The cash balance of £29.1 million at 30 September 2008 is net of these borrowings.

The Group fi nances its operations through cash holdings. The objective of the Group is to maximise investment income and minimise interest costs, bearing in mind its liquidity requirements.

For short-term debt, such as overdraft facilities or debt with a term of less than six months, fi xed or fl oating rates of interest are used. For debt with a term of greater than six months, it is policy that at least 75% must have fi xed rates of interest so as to minimise the Group’s exposure to interest rate movements.

It is Group policy that its cash balances are not investedin instruments that would put the capital value at risk. All invested funds have a determinable rate of interest.

Liquidity riskThe Group policy is to ensure continuity of funding for operational needs through cash deposits and debt facilities as appropriate. The key requirement for the business is to maintain fl exibility to allow the Group to take advantage of opportunities that could arise over the short term. The needs of the business are determined on a rolling cash fl ow forecast basis, covering weekly, monthly and twelve monthly requirements. Short-term fl exibility is maintained by holding cash in current accounts and high liquidity money market funds. The Group has overdraft facilities in place both to permit currency borrowing as part of its foreign exchange management and to allow fl exibility in where it holds its cash balances.

Recent events in the world fi nancial markets have highlighted the risks associated with holding deposits in foreign domiciled banks. The territories in which ITE operates do not all have internationally recognised banks and the Group has relationships with a number of domestic banks. The Group seeks to use the territory’s leading bank and to minimise the level of cash held in such banks.

Going concernAfter considering the current fi nancial projections for the Group, the Directors have a reasonable expectation that the Company has adequate resources to continue its operations for the foreseeable future. For this reason, they have adopted the going concern basis in preparing the accounts.

Business reviewFinancecontinued

At 30 September 2008, the Group’s Sterling value of the outstanding balances of advance payments and venue loans was £2.4 million (2007: £3.6 million) as follows:

30 Sep 07 New Repayments 30 Sep 08 £m £m £m £m

Kyiv 1.3 – (0.4) 0.9Almaty 1.0 1.1 (1.7) 0.4St Petersburg 0.7 – (0.2) 0.5Uzbekistan 0.4 0.3 (0.2) 0.5Bulgaria 0.2 – (0.1) 0.1Total 3.6 1.4 (2.6) 2.4

CapitalDuring the year, the Company has purchased 5,445,585 shares which were held in Treasury and then cancelled. The Company has also issued 3,039,493 ordinary sharesof 1p in the year. Of the total new issues, 3,029,146 were pursuant to the exercise of options and yielded aggregate consideration of £1.8 million. The remaining shares were issued as part of Directors’ remuneration.

The ESOT held 6,967,783 (2.8%) of the Company’s issued share capital at the year-end (2007: 1,854,875; 0.7%).

Post balance sheet eventsThere have been no signifi cant post balance sheet events.

TreasuryDuring the year, the Group experienced net foreign exchange losses of £3.1 million (2007: £12,000 loss). The exchange rate for the Euro at 30 September 2008 was 31.26:£1 (30 September 2007: 31.43:£1); the exchange rate for the US Dollar at 30 September 2008 was $1.82:£1 (30 September 2007: $2.02:£1). During the year, 71% of the Group’s sales were priced in Euros and 11% in US Dollars, the balance being in local currency. Overall 51% of the Group’s cash receipts for the period were collected in “hard” currency (Sterling, Dollars or Euros) and 49% was collected in various local currencies.

The Group uses derivative instruments and currency borrowings to protect itself against the eff ect of currency fl uctuations on a proportion of its sales and its balance sheet. The Group’s policy on derivative instruments is that:

it will hedge no more than 75% of the value of anticipated >hard currency sales; andit will only enter into derivative transactions up to >36 months ahead.

At 30 September 2008, the Group had options to sell 311.0 million spread over the six months to 31 March 2009, against which it held a mark to market provision of £1.0 million.


29


Business reviewRisks & uncertainties

The Group identifi es and monitors the key risks and uncertainties aff ecting the Group and runs the business in a way that minimises the impact of such risks where possible.

The Group’s business is principally carried out in Russia and the CIS. Changes in law or the regulatory environment could have an eff ect on some or all of the exhibitions of the Group.

Reduced demand for exhibition space would reduce the profi ts of exhibitions.

The Group has key commercial relationships with venues which secure the Group’s rights to run its exhibitions in the future.

Damage to or unavailability of a particular venue could impact the Group’s short-term trading position.

Competition has existed in ITE’s markets for some years. ITE faces competitive pressures on a market-by-market basis.

ITE’s employees have long-standing relationships with customers and a unique knowledge of the exhibitions business. Loss of key staff could impact the short-term prospects of a specifi c event or sector.

The Group is exposed to movements in foreign exchange rates against Sterling for both trading transactions and for the translation of overseas operations. The principal exposure is to the Euro exchange rate, which form the basis of invoicing.

Political uncertainty and regulatory risk

Economic instability reduces demand for exhibition space

Commercial relationships

Venue availability

Competitor risk

People

Financial risk – foreign currency risk

Potential impactOperational risks Mitigation

ITE has reduced its risk by establishing its business as independent Russian and CIS companies fully contributing to the local economy, and the diversity of businesses across sectors and geography provides protection for the longer-term prospects of the Group.

ITE operates across a wide range of sectors and countries to minimise the exposure to any single market, and is constantly looking at opportunitiesto diversify further. These key relationships are regularly reviewed and the Group seeks to maintain its exhibition rights for at least three years forward for signifi cant exhibitions.

The Group carries business interruption insurance which protects profi ts against such an event in the short term.

In all of its overseas markets, ITE has a strong position as an international organiser, achieved through eff ective use of its international sales network and its established brands for major events. A single exhibition or sector in a market could have its prospects aff ected by a strong competitor launch; however, the breadth of ITE’s portfolio of events, with its geographic and sector diversity, reduce the risk of a competitive threat to the overall business of the Group.

ITE has sought to build loyalty in its staff by ensuring remuneration is competitive and through a wide distribution of the Group’s long-term incentive plans. ITE has a good record of retaining its key staff .

The Group seeks to minimise exposure by:

Limiting balances in ‘soft’ currency >deposits.Securing forward contracts against its >future sales receipts.

30


Corporate and social responsibility

OverviewITE believes that corporate and social responsibility is an important part of the Group’s culture and, by adopting good practice in these areas, it will have a positive impact on profi ts and increasing the long-term value for shareholders. The Board gives due consideration to risks arising from social, environmental and ethical issues as part of its ongoing risk review process.

Social interactionThe Board of the Company is aware of both the benefi ts to its business of engaging with its various constituencies in a socially-responsible manner and the risks of failing to do so. As an operator of internationally-focused businesses in emerging markets, the Company ensures that it is culturally sensitive in its dealings with the local community and that its employment and development policies are non-discriminatory and encourage the employment of local nationals at all levels in the Company. Employees are selected and promoted on the basis of merit and ability, regardless of age, gender, race, religion, sexual orientation or disability.

Employees are encouraged to participate in and support their respective communities. The Company has a policy of encouraging employees, especially those from the locations in emerging markets, to move around the offi ces of the Group, thus providing development opportunities for all staff . In addition, employees are assisted in their career development through an annual appraisal scheme. All staff are eligible for issues of share options or awards under the Employee’s Performance Share Plan as the Board feels that it is important for them to take an active part in the success of the Company and to share in the value they help to create.

We recognise the need to provide a safe working environment for employees and exhibitors and visitors at our events. Each offi ce is responsible for ensuring that their business operates in compliance with Group policies and the relevant local health and safety legislation.

EthicsThe Company actively promotes integrity in its dealings with its employees, shareholders, customers and suppliers and with the authorities of the countries in which it operates and recognises that a reputation is a valuable and fragile asset gained over a substantial period. The leadership position of its exhibitions and the continued growth of its core shows is evidence of the success of its practices.

The Company promotes high ethical standards in carrying out its business activities and has clear guidelines for dealing with gifts, hospitality, corruption, fraud and the use of inside information. All ITE staff must comply with the laws and regulations of the country in which they operate. It is the responsibility of all staff to ensure that they are fully aware of all relevant laws and regulations.

The Group is a member of UFI (worldwide) and the AEO (UK) and, through this, the attendance fi gures at our key exhibitions are audited by independent services. This helps to provide assurance to our exhibitors and visitors as to the standard of our exhibitions.

The Group aims to provide a high-quality service for all its events in all its locations. The Group operates to a strict minimum quality level to ensure our events are provided to exhibitors and visitors at international standards, irrespective of where they are held.

The Group ensures that all advertising and public communications avoid untruths or overstatements. ITE builds a relationship with suppliers based on mutual trust and undertakes to pay suppliers on time and in accordance with agreed terms of business. All information regarding the relationship between the Group and a supplier must remain confi dential.


31


EnvironmentAs a media services company, the Group acknowledges that its business has an impact on the environment, albeit relatively minor, however it understands the importance of following good environmental practice. The Company is aware that this is an area of increasing concern to employees, shareholders and customers alike. The Company does not manufacture or sell any tangible products and has identifi ed the principal areas of environmental impact as energy use, waste recycling, paper & printing and travel. By identifying environmental improvements, we expect to see increased effi ciencies and with that, reduced costs and the management of environmental issues is part of our business strategy to create long-term value for shareholders.

The Group encourages the recycling of waste paper >and offi ce waste and plans to increase the recycling rates and materials recycled throughout the Group.Computers and IT equipment are recycled where possible >and redundant equipment is either sold to staff or given to charitable organisations. The Company has been reducing its printed materials >over the last few years, with a greater reliance on electronic media for its marketing materials. However, catalogues and delegate packs are still printed and the Group is implementing a set of operating standards to be followed by suppliers to look at paper sourcing and use of materials.The Company encourages staff to use public transport >through off ering season ticket loans.

The Company is now taking advantage of recent e-communications legislation for communicating with shareholders and so will be able to reduce the volume of printed materials produced with the publication of our Annual Report and Interim Statement.

The Group’s activities in staging exhibitions and conferences do impact on the environment, through waste and natural resources usage from materials used in assembling exhibition stands and participating in the exhibition and travel to exhibitions and conferences for exhibitors, delegates and ITE staff . Presently, practice in controlling waste at diff erent exhibition centres varies widely through the diff erent regions in which the Group operates, however the Group follows prevailing practice in each of its markets by observing industry and country legislation.

32


Directors

01 02

04

05

06 07

03


33


01 Iain Paterson (61)Non-executive ChairmanRemuneration & Nomination CommitteesIain Paterson was appointed a Director and non-executive Chairman of the Company in May 2002. He has over 38 years of international management experience at a senior level, most particularly in the oil industry. He was a Board Member and International Director of Enterprise Oil plc. Previously he spent 14 years at British Petroleum plc. He currently holds non-executive Directorships at Mol NyRt. (the Hungarian energy company) and Hunting PLC. He is also Chairman of two private companies, AnTech Limited and Plebble Loyalty Limited. 02 Russell Taylor (50) Chief Executive Offi cerRussell Taylor was appointed Chief Executive in May 2008 having joined ITE in 2003 as Finance Director. He has extensive experience of all sectors of the exhibition industry, having spent seven years at Earls Court Olympia Group, as Group Finance Director and subsequently Managing Director of Earls Court & Olympia Halls. He was subsequently Finance Director of Air Miles International Group, where he managed all fi nancial and commercial aspects of the international loyalty schemes business. A qualifi ed Chartered Accountant, he trained at Touche Ross & Co where he became a Manager in the Corporate Finance Department. He holds a BA in Economics from Lancaster University.

03 Neil England (54)Non-executive DirectorAudit, Remuneration & Nomination CommitteesNeil England was appointed a non-executive Director of the Company on 18 March 2008. He has a breadth of sales and marketing experience and an extensive knowledge of ITE’s key geographic markets. He was formerly Vice President for Mars Incorporated with responsibilities for the CIS region. In this position, he lived in Moscow and helped Mars build a profi table, market-leading business there. More recently, he served as Group Commercial Director of Gallaher Group Plc. He is currently a non-executive Director of Wincanton Plc and The Eastern European Trust plc, an emerging market trust investing in Eastern Europe, and is non-executive Chairman of Silverstone Holdings Limited.

04 Michael Hartley (59)Non-executive DirectorAudit, Remuneration & Nomination CommitteesMichael Hartley was appointed a non-executive Director of the Company on 21 October 2003. He brings extensive international management experience to the Board, having spent ten years with Coats Viyella plc, for the last three years as Chief Executive of the Viyella division. He is currently Chairman of the AIM quoted international businesses Dawson International plc and Servocell plc and of a privately owned recruitment business hartley resourcing limited. He has worked extensively in Asia, Australasia and Africa. He has held several chief executive and marketing roles in the retail sector, including at Tootal Group plc, Lewis Meeson Ltd, Trinity International Holdings plc and Marks & Spencer plc. He holds an MBA from Manchester Business School.

05 Neil Jones (42)Finance DirectorNeil Jones was appointed as Finance Director on 4 November 2008. He has held senior fi nancial positions within the exhibitions industry for over 10 years. He was formerly Finance Director at Tarsus Group plc, which specialises in the organisation of trade exhibitions in Europe, America, UAE and Asia. Prior to that, he was European Finance Director for Advanstar Communications, one of the largest US media groups. He is a member of the Institute of Chartered Accountants of England & Wales, qualifying with Price Waterhouse in 1990.

06 Edward Strachan (44)Executive DirectorEdward Strachan joined ITE in 1993 when he launched ITE’s local business in Kazakhstan. Since then he has opened and managed ITE’s operations in St Petersburg, Central Asia and the Caucasus regions and currently lives abroad in the CIS. He also has responsibility for EUF, ITE’s 100% owned subsidiary in Turkey. He became a main Board Director in July 2003 and brings to the Board his extensive experience of the exhibition industry in Russia and the CIS regions.

07 Malcolm Wall (52)Non-executive DirectorAudit, Remuneration & Nomination CommitteesMalcolm Wall was appointed as a non-executive Director of the ITE Group in May 2006. He has enjoyed a highly successful career in the media sector and brings seniorlevel Board experience and extensive knowledge of the B2B market and the exhibitions business. He is currently Chief Executive of Content for Virgin Media. Previous posts include a 10 year spell with United Business Media during which, as Chief Operating Offi cer he had direct responsibility for the professional media business unit that included B2B publications and the exhibition business.


34

Directors’ report

The Directors present their Annual Report on the aff airs of the Group, together with the accounts and auditors’ report, for the year ended 30 September 2008.

Principal activities and review of businessThe principal activities of the Group comprise the organisation of trade exhibitions and conferences. The main subsidiary and associate undertakings which aff ect the profi ts or net assets of the Group in the year are listed in note 5 to the fi nancial statements of the Company.

Details of the Group’s performance during the year and expected future developments are contained in the Chief Executive’s statement on pages 16 to 19 and in the Business review – Divisional review on pages 22 to 25. Details of the Group’s fi nancial risk management policies are contained on pages 28 to 29.

Results and dividendsThe audited accounts for the year ended 30 September 2008 are set out on pages 52 to 96. The Group profi t for the year, after taxation and minority interests, was £23.5 million (2007: £23.0 million).

The Directors recommend a fi nal dividend of 3.7p (2007: 3.2p). The total dividend for the year, including the proposed fi nal dividend, is 5.3p (2007: 4.5p).

Capital structureDetails of the authorised and issued share capital, together with details of the movement in the Company’s issued share capital during the year are shown in note 21. The Company has one class of ordinary shares which carry no right to fi xed income. Each share carries the right to one vote at general meetings of the Company.

There are no specifi c restrictions on the size of a holding nor on the transfer of shares, which are both governed by the general provisions of the Articles of Association and prevailing legislation. The Directors are not aware of any agreements between holders of the Company’s shares that may result in restrictions on the transfer of securities or on voting rights.

Details of employee share schemes are set out in note 25. Shares held by the ITE Group Employee Share Trust abstain from voting.

No person has any special rights of control over the Company’s share capital and all shares are fully paid.

With regard to the appointment and replacement of Directors, the Company is governed by its Articles of Association, the Combined Code, the Companies Acts and related legislation. The Articles themselves may be amended by resolution of the shareholders. There is a schedule of matters reserved for the Board and terms of reference for Board Committees, copies of which are available on request, and the Corporate Governance Statement on pages 39 to 42.

Under its Articles of Association, the Company has authority to issue 375,000,000 ordinary shares of 1p each.

There are a number of agreements that take eff ect, alter or terminate upon a change of control of the Company such as commercial contracts, bank facility agreements, property lease arrangements and employees’ share plans. None of these are considered to be signifi cant in terms of their likely impact on the business of the Group as a whole. Furthermore, the Directors are not aware of any agreements between the Company and its Directors or employees that provide compensation for loss of offi ce or employment that occurs because of a takeover bid.



35

DirectorsThe Directors, who served throughout the year, except as noted, are as follows:

Executive Directors Non-executive Directors

Edward Strachan Iain Paterson ChairmanRussell Taylor Sir Jeremy Hanley Resigned 6 March 2008Bill Dye Resigned 30 January 2008 Michael Hartley Malcolm Wall Neil England Appointed 18 March 2008

Neil Jones was appointed an executive Director on 4 November 2008.

In accordance with Company Law and the Articles of Association, Michael Hartley and Edward Strachan will retire by rotation at the next Annual General Meeting and, being eligible, off ers themselves for re-election. Neil England having been appointed on 18 March 2008 and Neil Jones having been appointed on 4 November 2008 retire at the next Annual General Meeting in accordance with the Articles of Association and, being eligible, off er themselves for re-election.

Substantial shareholdingsAt 27 November 2008, the Company had been notifi ed, in accordance with sections 198 to 208 of the Companies Act 1985, of the following interests in the ordinary share capital of the Company. Name of holder Number of shares Percentage held

Schroder Investment Management Limited 36,488,222 14.72%BlackRock Investment Management (UK) Limited 34,651,709 13.98%Barclays Plc 15,641,801 6.31%Ceyda Erem 14,421,514 5.82%Legal & General Investment Management Limited 13,278,809 5.36%J P Morgan Asset Management 10,034,283 4.05%Standard Life Investments 9,269,521 3.74%Threadneedle Investments 8,478,617 3.42%

Directors’ share interestsThe Directors who held offi ce at 30 September 2008 had the following interests in the shares of Group undertakings:

Name of Director 30 September 2008 30 September 2007

ExecutiveEdward Strachan* 6,034,633 6,847,206Russell Taylor 235,439 55,000 Non-executive Michael Hartley 10,000 10,000Iain Paterson 148,566 281,509Malcolm Wall 11,456 11,456Neil England – –

* Edward Strachan is a majority shareholder of Kyzyl Tan Consultants, which holds 3,850,000 shares in the Company. These are included in the 6,034,633 above.


36

Directors’ reportcontinued

The Directors, as employees and potential benefi ciaries, have an interest in the 6,967,783 shares held by the ITE Group Employee’s Share Trust at 30 September 2008. There has been no movement in this shareholding between 30 September and 1 December 2008.

Russell Taylor and Edward Strachan each acquired 100,000 shares on 1 October 2008. Neil England acquired 10,000 shares on 1 October 2008. Neil Jones who was appointed an executive Director on 4 November 2008 held 9,927 shares in the Company at the date of his appointment.

Other than these, there were no other changes in the interests of Directors between 30 September 2008 and 1 December 2008.

Right to purchase the Company’s sharesAt the Annual General Meeting on 6 March 2008, the shareholders authorised the Company to make one or more market purchases of up to 25,131,599 of the Company’s ordinary shares at a price between 1p (exclusive of expenses) and 105% of the average middle market price of a share for the fi ve business days immediately preceding the date on which the share is purchased.

Since that date, the Company purchased 5,445,585 of its own shares which were cancelled before 30 September 2008. The shares acquired in the year had a nominal value of £54,456, presenting 2.15% of the issued share capital and were purchased for consideration of £8.1 million. The reason for the purchase was to enhance earnings per share. The Company has a remaining authority to purchase a further 19,686,014 of its own shares which will expire at the next Annual General Meeting on 27 February 2009.

In total, the Company cancelled 5,445,585 of its ordinary shares in the year.

DonationsThe Group made no charitable donations (2007: Nil) during the year. No political donations were made (2007: Nil).

EmployeesThe Group’s human resources strategy is to attract and retain talented, high-calibre employees focused on achieving excellent results. Remuneration policy is designed to achieve this aim.

The Group places great importance in the development of its staff to support the business in meeting its objectives. This is refl ected in the training initiatives in place for staff , both internally and externally. The Group keeps employees informed on matters aff ecting them and on matters aff ecting the Group’s performance through regular newsletters and through meetings, both formal and informal. Employees are able and are encouraged to move around the Group in order to experience the business environment in other offi ces. The Group actively encourages the participation of employees in activities of offi ces other than their own. The Group distributes long-term incentives widely to staff in all offi ces. At 30 September 2008 approximately 41% of staff held long-term incentives in some form. As a result, the Group’s employees identify strongly with ITE’s overall objectives.

It is the Group’s policy to consider fully applications for employment by disabled persons, bearing in mind a number of factors including their suitability and fi t for the role, irrespective of any disability. In the event of a member of staff becoming disabled, every eff ort would be made to ensure their continued employment and progression in the Group. It is Group policy that training, career development and promotion of disabled employees match that of other employees as far as possible.



37

Supplier payment policyThe Company’s policy, which is also applied to the Group, is to agree payment terms with suppliers when entering into each transaction to ensure that suppliers are made aware of the terms of payment and to abide by the terms of payment. The Company has no trade creditors. Trade creditors of the Group at 30 September 2008 were equivalent to 9 days (2007: 12 days) purchases, based on the average daily amount invoiced by suppliers during the year.

Annual General MeetingShareholders will see from the Notice of the Annual General Meeting, to be sent separately, that they are to consider and, if thought fi t, to pass three resolutions that have become routine business at the Annual General Meeting of most public companies. The resolutions relate to:

renewal of the authority for the Directors to allot relevant securities; >renewal of the powers of the Directors to allot equity securities as if pre-emption rights did not apply; and >renewal of the authority for the Company to purchase certain of its own shares and to hold them as treasury shares. >

In addition, shareholders will also be asked to vote on resolutions covering:

renewal of share option schemes; >updating the Articles of Association providing for new Directors confl ict of interests provisions; and >any necessary incidental changes to the Articles of Association. >

AuditorsThe Directors will place a resolution before the Annual General Meeting to reappoint Deloitte LLP as auditors for the ensuing year and to approve their remuneration.

Each of the persons who is a Director of the Company at the date when this report was approved confi rms:

so far as each of the Directors is aware, there is no relevant audit information (as defi ned in the Companies Act 1985) >of which the Company’s auditors are unaware; andeach of the Directors has taken all the steps that he ought to have taken as a Director to make himself aware >of any relevant audit information and to establish that the Company’s auditors are aware of that information.

This confi rmation is given and should be interpreted in accordance with s234ZA Companies Act 1985.

The report of the Directors has been approved by the Board and signed on its behalf by:

Russell TaylorChief Executive Offi cer1 December 2008


38

Directors’ reportcontinued

Statement of Directors’ responsibilities for the Group fi nancial statementsThe Directors are responsible for preparing the Annual Report, Report on remuneration and the fi nancial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare fi nancial statements for each fi nancial year. The Directors are required by the IAS Regulation to prepare the Group fi nancial statements under International Financial Reporting Standards (IFRSs) as adopted by the European Union. The Group fi nancial statements are also required by law to be properly prepared in accordance with the Companies Act 1985 and Article 4 of the IAS Regulation.

International Accounting Standard 1 requires that IFRS fi nancial statements present fairly for each fi nancial year the Company’s fi nancial position, fi nancial performance and cash fl ows. This requires the faithful representation of the eff ects of transactions, other events and conditions in accordance with the defi nitions and recognition criteria for assets, liabilities, income and expenses set out in the International Accounting Standards Board’s ‘Framework for the preparation and presentation of fi nancial statements’. In virtually all circumstances, a fair presentation will be achieved by compliance with all applicable IFRSs. However, Directors are also required to:

properly select and apply accounting policies; >present information, including accounting policies, in a manner that provides relevant, reliable, comparable and >understandable information; and provide additional disclosures when compliance with the specifi c requirements in IFRSs are insuffi cient to enable users >to understand the impact of particular transactions, other events and conditions on the entity’s fi nancial position and fi nancial performance.

The Directors have elected to prepare the parent company fi nancial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). The parent company fi nancial statements are required by law to give a true and fair view of the state of aff airs of the Company. In preparing these fi nancial statements, the Directors are required to:

select suitable accounting policies and then apply them consistently; >make judgments and estimates that are reasonable and prudent; >state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed >and explained in the fi nancial statements; andprepare the fi nancial statements on the going concern basis unless it is inappropriate to presume that the Company >will continue in business.

The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the fi nancial position of the Company and enable them to ensure that the parent company fi nancial statements comply with the Companies Act 1985. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and fi nancial information included on the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of fi nancial statements may diff er from legislation in other jurisdictions.

Directors’ responsibility statementWe confi rm to the best of our knowledge:1 the fi nancial statements, prepared in accordance with International Financial Reporting Standards as adopted by the

EU, give a true and fair view of the assets, liabilities, fi nancial position and profi t or loss of the Company and the undertakings included in the consolidation taken as a whole; and

2 the management report, which is incorporated into the Directors’ report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties they face.

The report of the Directors has been approved by the Board and signed on its behalf by:

Russell Taylor Iain PatersonChief Executive Offi cer Chairman1 December 2008



39

Report on corporate governance

The Company is committed to the principles of corporate governance contained in the Combined Code on Corporate Governance that was issued in 2006 by the Financial Reporting Council (“Combined Code”) for which the Board is accountable to shareholders.

Statement of compliance with the Combined CodeDuring the fi nancial year, the Company complied with all of the provisions set out in section 1 of the Combined Code.

Statement about applying the principles of good governanceThe Company has applied the principles of good corporate governance as set out in the Combined Code. The explanation of how the principles have been applied is set out below and in connection with Directors’ remuneration, in the Report on remuneration.

Board of DirectorsThe Board of Directors meets not less than seven times a year. The Board considers a range of matters for its approval, including setting Group strategy, acquisition policy, the budgets, major capital expenditure and material contracts. The Board monitors the performance of the businesses against appropriate forecasts and key performance indicators. The Board is supplied with fi nancial and operational information on a timely basis to enable it to discharge its duties and carry out its responsibilities. All Directors have access to the Company Secretary and there is a procedure to enable them to take additional independent professional advice at the expense of the Company. Neil Netto was appointed Company Secretary on 19 September 2008 (in place of Russell Taylor). The Senior Independent non-executive Director is Michael Hartley.

In addition to the Chairman, the Board comprises three non-executive Directors and two or three executive Directors during the year. The Board currently has four non-executive Directors (including the Chairman) and three executive Directors which it considers to be an appropriate balance of executive and non-executive Directors. The roles of Chairman and Chief Executive are separate, and each has defi ned roles and responsibilities approved by the Board.

The Nomination Committee considers all appointments made to the Board. Neil England was appointed as a non-executive Director on 18 March 2008. Russell Taylor was promoted to Chief Executive Offi cer on 19 May 2008. Neil Jones was appointed as Finance Director on 4 November 2008. The full terms and conditions of the three appointments are available for inspection at the Company’s registered offi ce and will be available for review before the Annual General Meeting. Members of the Nomination Committee were actively involved in all three appointments and, taking such advice as appropriate, agreed the specifi cations for the three positions. At separate times, external search companies were appointed to provide a shortlist of candidates. The candidates for the three positions were all interviewed by the Chairman and other Directors as appropriate. The shortlist of candidates for all three positions were interviewed by the members of the Nomination Committee. The Nomination Committee collectively recommended all three appointments to the Board.

The Directors’ diversity of experience and knowledge of the markets in which ITE operates is key to the development of a robust strategy for the Group and to its execution. The non-executive Directors contribute an independent and objective view to the management of the Company and play a full and active part in the various Board committees. The names and biographies of the Directors are on page 33.

The Board considers Michael Hartley, Malcolm Wall and Neil England to be independent, and recognises that Iain Paterson was independent on the date of his appointment.

Any Directors appointed since the last Annual General Meeting are required to off er themselves for re-election at the fi rst available annual general meeting. In accordance with the Articles of the Company, all Directors are required to stand for re-election at least every three years.


40

Report on corporate governancecontinued

The non-executive Directors met formally without the executives present twice during the year. A formal evaluation of the Board and its Committees was carried out. The Chairman circulated a questionnaire to each Director that sought views on various factors concerning the workings of the Board and its eff ectiveness. The results were collated and debated by the Board. As a result, improvements have been made particularly to the allocation of time spent at Board meetings discussing the key signifi cant business and strategic issues. The Chairman’s performance was evaluated by the Senior Independent Director. A number of matters were discussed at these meetings which served to enhance further the satisfactory performance of the Board.

The following table sets out the number of meetings of the Board, and of the principal Committees of the Board during the fi nancial year, together with details of attendance. During the year, the Directors attended all of the Board and Committee meetings that were held.

Board Audit Remuneration Nomination

Number of meetings 7 4 7 6Attendance: Iain Paterson 7 – 7 6Sir Jeremy Hanley1 3 2 3 3Michael Hartley 7 4 7 6Edward Strachan 7 – – –Russell Taylor 7 – – –Malcolm Wall 7 4 7 6Bill Dye2 2 – – –Neil England3 4 2 3 3Neil Jones4 – – – –

1 Sir Jeremy Hanley resigned from the Board on 6 March 2008.2 Bill Dye resigned from the Board on 30 January 2008.3 Neil England was appointed to the Board on 18 March 2008.4 Neil Jones was appointed to the Board on 4 November 2008.

Communication with shareholdersThe Board considers communication with all shareholders to be extremely important. Shareholders are provided either in hard copy or online, with full-year and interim accounts to help them keep up to date with the performance of the Group and are given the opportunity to ask questions directly of the Board at the Annual General Meeting. The Chairmen of the Audit, Remuneration and Nomination Committees are available at the Annual General Meeting to answer questions. The Chairman and the Senior Independent Director are generally available to discuss shareholders’ concerns as and when required. The Group’s website (www.ite-exhibitions.com) is regularly updated with copies of all Group press releases and presentations given to shareholders.

The Directors seek to build on a mutual understanding of objectives between the Company and its institutional shareholders by making strategic presentations to institutional investors every six months following the publication of the half-year and annual results, by meeting shareholders to discuss long-term issues and obtain their feedback and by communicating regularly throughout the year.



41

Board CommitteesThe Board has established three Committees all of which have written terms of reference. The terms of reference for the Committees are available on the Company’s website at www.ite-exhibitions.com.

The Audit CommitteeThe Audit Committee comprises only non-executive Directors. The Committee was chaired by Sir Jeremy Hanley up to the date of his resignation on 6 March 2008 and Michael Hartley thereafter, whom the Board considers has appropriate fi nancial expertise to fulfi l this role. The other members are Malcolm Wall and Neil England. The meetings are also attended by the Chairman, the Finance Director, the deputy Finance Director and the auditors, together with any other member of staff considered necessary by the Committee to complete its work. The Committee meets at least four times a year and ensures that at least twice a year it meets with the auditors without executives or other members of staff present to discuss matters relating to its remit and any issues arising.

The Committee is responsible for reviewing accounting procedures and the internal control environment. The Committee also reviews announcements of the Company’s results and monitors compliance with accounting standards and Company law. In addition, the Committee considers the appointment of the auditors, the scope of the audit and any issues arising, their fees and the nature, extent and costs of any non-audit services provided by them. The Committee has access to any employee and is able to obtain external advice on any matter as required. The auditors are able to request additional meetings at any time.

The Remuneration CommitteeThe Remuneration Committee comprises only non-executive Directors. The Committee was chaired by Michael Hartley up to 6 March 2008 and thereafter by Malcolm Wall. It meets at least three times a year. The other members are Iain Paterson, Michael Hartley and Neil England. The meetings are attended by the Chief Executive Offi cer and external advisers as appropriate.

Further information about the Committee is set out in the Report on remuneration on page 43.

The Nomination CommitteeThe Nomination Committee comprises the non-executive Directors Iain Paterson, Malcolm Wall, Michael Hartley, Sir Jeremy Hanley up to the date of his resignation on 6 March 2008 and Neil England from 18 March 2008. The Committee, which is chaired by Iain Paterson, is responsible, if requested by the Board, for nominating candidates to the whole Board for approval, recommending the re-appointment or continuation in offi ce of any Director, and for considering and making recommendations to the Board on its composition and balance.

The Company Secretary is secretary to each of the above Committees.

Independence of external auditorsThe Audit Committee has established clear guidelines concerning the levels of discretionary non-audit fees it considers are appropriate to safeguard the independence of the auditors. The Committee has implemented review and approval processes relating to the provision of non-audit services by the auditors, and undertakes an annual assessment of the auditors’ independence and eff ectiveness. The Audit Committee is satisfi ed that there are suffi cient safeguards in place to ensure auditor independence.

Whistle-blowing arrangementsThe Company has a set policy to enable and encourage staff to report in confi dence any possible improprieties in matters of fi nancial reporting or otherwise. The procedure for reporting any such matter has been communicated to all staff .


42

Report on corporate governancecontinued

Internal audit functionThe Audit Committee annually considers whether an internal audit function is appropriate and makes an appropriate recommendation to the Board. The central fi nance function is responsible for checking, monitoring and reporting on the control environment in the Group’s accounting centres. During the year, the Company appointed an external fi rm of accountants (other than its auditors) to perform independent audits on the eff ectiveness of its internal controls for all the Company’s principal offi ces by the end of September 2009. The Committee considers that at present there is a high level of independence and objective reporting on the control environment in the Group. The Board has concluded that a formal internal audit function is not currently required. The Audit Committee will continue to monitor this matter and make appropriate recommendations to the Board.

Review of internal controls and of risk management processThe Directors recognise that they have overall responsibility for ensuring that the Group maintains a system of controls, including fi nancial, operational and compliance controls and risk management to provide them with reasonable assurance regarding eff ective and effi cient operations, internal control and compliance with laws and regulations.

A system of internal controls has been established to allow the Board, in conjunction with management, to identify, evaluate and manage the signifi cant risks faced by the Company on an on-going and pro-active basis. The system also seeks to monitor the Company’s overall fi nancial, operational and compliance positions and to help safeguard shareholders’ investments and to protect the Company’s assets. The Board is responsible for this process and for ensuring that it remains eff ective and, in order to facilitate it, it has established a single organisational structure with clearly drawn lines of accountability, appropriate delegation of authority and open lines of communication.

The Company has a comprehensive system of fi nancial reporting. There is a thorough budgeting system for all lines of income and expenditure, with an annual budget approved by the Board. Historical fi nancial performance and revised forecasts for the full year are reported against budget and considered by the Board at each meeting. The Board pays particular attention to those matters which, by their nature, expose the Company to signifi cant risks and uncertainties, including exchange rates, which can be subject to considerable volatility and can have a material impact on the Company’s operating results.

The Company has established procedures to deal with authorisations for expenditure. The Board is committed to ensuring that the Company’s data and infrastructure, and its information technology systems, are as secure as is reasonably practicable. Security controls and procedures are in place to prevent unauthorised access to the Company’s premises. Hardware and software controls have also been instigated to prevent unauthorised access to the Company’s computer system and network. Regular back-ups of electronic information are taken with copies being stored off site.

This system is designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable and not absolute assurance against material misstatement or loss.

This system of internal control has been in place throughout the year and up to the date of approval of this Annual Report. It is reviewed regularly by the Board and complies with the Turnbull guidance. The Board has performed a specifi c assessment of internal controls for the purpose of this Annual Report. The Audit Committee assists the Board in discharging its review responsibilities.



43

Report on remuneration

This report has been prepared in accordance with Schedule 7A Companies Act 1985. The report also links the relevant requirements of the Listing Rules of the Financial Services Authority and describes how the Board has applied the principles relating to Directors’ remuneration. As required by the Act, a resolution to approve the report will be proposed at the Annual General Meeting of the Company at which the fi nancial statements will be approved.

The Act requires the auditors to report to the Company’s members on certain parts of the Directors’ remuneration report and to state whether in their opinion those parts of the report have been properly prepared in accordance with the Companies Act 1985. This report has therefore been divided into separate sections for audited and unaudited information.

Unaudited information

The Remuneration CommitteeThe members of the Remuneration Committee (“the Committee”) are Malcolm Wall (Chairman), Michael Hartley, Iain Paterson and Neil England. All the members are non-executive Directors. The Board considers Malcolm Wall, Michael Hartley and Neil England to be independent Directors.

The Remuneration Committee is responsible for:recommending to the Board the remuneration and terms and conditions of employment of the Chairman, executive >Directors and key members of senior management; measuring subsequent performance as a prelude to determining the executive Directors’ and key managers’ total >remuneration on behalf of the whole Board; andgranting awards under the ITE Group’s Performance Share Plans and options under the various ITE Group Share Option >Schemes outlined below.

During the year, the Committee consulted with Hewitt New Bridge Street to advise on executive remuneration and the operation of the various ITE Group share schemes. Hewitt New Bridge Street has provided no other services to the Company.

Remuneration policy The Company’s principal remuneration policy aim is to ensure that compensation off ered is appropriate to attract, retain and motivate executive Directors and staff with the ability and experience to deliver the Company’s strategy and grow the business, having regard to the challenging economic conditions and competition for such people in the markets in which the Company operates.

In formulating its policies the Committee has regard to and balances the following factors:a) the remuneration packages off ered to executives in companies competing in the same markets as the Company;b) the remuneration practice in the markets in which the executive is principally based;c) the need to align the interests of the executive with those of the shareholders;d) the performance of the individual executive and of the Company as a whole; ande) any amounts payable to executives in respect of services performed for the associates of the Company. The remuneration packages of the executives comprise base salary and benefi ts, a performance-related bonus and longer-term share-based incentive arrangements. A signifi cant proportion of executive Directors’ remuneration is performance related.

The fees of the non-executive Directors are proposed by the Chief Executive and approved by the Board, taking account of practice adopted in other companies and the time commitment required. The fees of the Chairman are determined by the Committee taking account of the role and the time commitment required. The Chairman does not take part in those discussions.


44

Report on remunerationcontinued

Policy criteria for various components Base salary Base salaries are reviewed annually by the Committee. Base salary levels are set by the Committee, taking into account each executive Director’s role, experience, performance and the markets in which they perform their duties. The base salaries for Russell Taylor and Neil Jones, and the consultancy remuneration for Edward Strachan are regularly reviewed and are subject to benchmarking exercises against industry and sector comparators. Details of the executive Directors’ base salaries for the year commencing 1 October 2008 are set out under ‘Directors’ service contracts’.

Variable bonusThe executive Directors and certain senior management participate in performance-related annual bonus schemes (“Executive Bonus Plan”), which recognise Company objectives to deliver compound growth of headline profi t before tax. For the fi nancial year commencing 1 October 2008, Russell Taylor’s and Neil Jones’ maximum annual bonus opportunity provided under the Executive Bonus Plan will be 100% and 65% of base salary respectively. Edward Strachan’s annual bonus opportunity through the Company’s consultancy agreement with Kyzyl Tan Consultants Limited (‘Kyzyl Tan’) is on a similar basis to the Executive Bonus Plan, and for the fi nancial year commencing 1 October 2008 is capped at 100% of the Kyzyl Tan consultancy fee and his remuneration as a Director.

The bonus caps for the year commencing 1 October 2008 is unchanged in respect of Russell Taylor, and increased from 85% to 100% for Edward Strachan. In the fi nancial year ending 30 September 2008, maximum bonuses were achieved by Russell Taylor and Edward Strachan (through Kyzyl Tan) under the Executive Bonus Plan, refl ecting a year of excellent performance which saw headline profi t before tax grow by 5%.

The Executive Bonus Plan applying to Russell Taylor, Neil Jones and Edward Strachan (through Kyzyl Tan) for the 2008-09 fi nancial year is based upon achievement of a sliding scale of compound growth targets based upon headline profi t before tax (as it was last year). No bonus is payable unless the minimum growth target is achieved.

Long-term incentives In recent years the Company has operated Performance Share Plans and Share Option Schemes as its share based arrangements. At the time of preparing this report, the Committee was in the process of reviewing the Company’s share based long term incentive policy. Any fundamental change to the policy will be highlighted in the Company’s Notice of Annual General Meeting.

Performance Share PlansThe Company has operated the ITE Group plc Employees Performance Share Plan 2004 and the ITE Group plc Key Contractors’ Performance Share Plan 2004. Awards can be made to executives and senior management over shares worth up to 100% of base salary each year, and under the latter scheme to key individuals who are not Group employees.

It is the Committee’s intention that the aggregate earnings per share targets as set out on page 49 will be set for any awards made in the fi nancial year commencing 1 October 2008.

This performance condition has been chosen by the Committee to take account of the Company’s biennial business cycle and to incentivise management to deliver sustained headline earnings per share performance over the relevant three year period. The targets are based upon a compound rate of growth in headline diluted earnings per share over the comparable fi gure achieved in the year ended 30 September 2008. The targets are calculated for each of the three performance years, taking account of any material events which are not annually recurring and aggregated into an ‘Aggregated headline diluted earnings per share target’. The Committee will, for the purposes of third party verifi cation, confi rm with external advisers the extent to which these targets are met.

Executive Directors will be required to retain shares of a value equal to 25% of the after-tax gain made on the vesting of awards under the Plans, until they have built up a shareholding equal to 1x salary.



45

Share option plansThe Company has previously operated the following option schemes: the ITE Group 1998 Company Share Option Plan; the ITE Group 1998 Discretionary Share Option Scheme; the ITE Group 1998 Key Contractor Share Option Scheme. These schemes expired on 12 March 2008 and are being replaced by proposed 2009 Discretionary and Key Contractor Schemes details of which are outlined in the Notice of Annual General Meeting. The Remuneration Committee have consulted with Olswang solicitors to advise on the renewal of the Company’s share options schemes. The Company has also previously operated the ITE Group Employee Share Trust Unapproved Share Option Scheme. It is not intended that the executive Directors will participate in the share option schemes.

Pensions The Company off ers a stakeholder pension to its employees but currently makes no Company contribution under this scheme.

Since his appointment as Chief Executive Offi cer, the Company makes a contribution equal to 10% of Russell Taylor’s base salary to his existing money purchase pension scheme. The Company made a contribution equal to 10% of Bill Dye’s base salary to his existing money purchase pension scheme for the time of his service with the Company.

Directors’ service contracts Executive DirectorsRussell Taylor (Chief Executive) and Neil Jones (Finance Director) have UK contracts of employment which refl ect market and best practice for senior management serving in the UK and have no fi xed term. Notice periods and base salary details for all Directors are outlined in the tables set out below. Other than the contribution to Russell Taylor’s pension scheme described above, there are no contributions to pension schemes. The standard terms provide for medical insurance and life insurance but provide for no other fringe benefi ts such as company cars.

In the event of early termination of an executive Director’s contract, it is the Committee’s policy that (subject to the provisions of each contract) the amount of compensation (if any) paid to the executive Director will be determined by reference to the relevant circumstances that prevail at the time. The Committee’s objective will be to avoid rewarding poor performance. Furthermore, the Committee will take account of the executive Director’s duty to mitigate his loss.

Edward Strachan’s remuneration as a Director from 1 October 2008 is £37,000. In addition, Edward Strachan is remunerated as a consultant through the Company’s agreement with Kyzyl Tan. The agreement with Kyzyl Tan was a three year contract to provide the services of Edward Strachan to the Company from 1 October 2005 to 30 September 2008, and is now continuing on the same terms, save for the higher maximum bonus percentage as detailed above, and on a six month rolling notice period. The base consultancy fee under this agreement for the year commencing 1 October 2008 is £328,000. Kyzyl Tan is entitled to a bonus based upon the same targets and criteria as the Executive Bonus Scheme, which is capped at 100% of Kyzyl Tan’s base consultancy fee and Edward Strachan’s remuneration as a Director for the year ending 30 September 2009 i.e. £365,000 in total. Under the Kyzyl Tan contract, Edward Strachan is required to reside in the markets where his management responsibilities are based and Kyzyl Tan is entitled to a living away from home allowance of up to $90,000 for its employee for each year of the contract.

The Remuneration Committee considers that Edward Strachan’s unique knowledge and skills of managing the exhibition business in the regions for which he is responsible, together with the requirement for him to reside abroad, warrants the Company entering into a consultancy contract. The Committee fi rmly believes that this contract is in the best interests of the Company.

Consistent with market practice, there are no service contracts or other employment arrangements with any of the executive Directors with fi xed terms or notice periods in excess of one year or terms which would expose the Company to compensation payments in excess of one year’s total remuneration.


46


The dates of each contract, the relevant notice period and base salary for 2008-2009 are as follows:

Name Date of contract Notice period Base salary 2008-2009

Russell Taylor 25 March 2003 12 months £365,000 to be reviewed on 1 February 2009Neil Jones 3 November 2008 12 months £190,000Edward Strachan 30 June 2003 6 months £37,000Edward Strachan through Kyzyl Tan Consultants Ltd 1 October 2005 6 months £328,000 to be reviewed on 31 March 2009

Non-executive DirectorsThe Chairman and non-executive Directors are entitled to one months’ written notice to terminate their contracts but no further rights to compensation payments on termination. The dates of the contracts are for Iain Paterson 27 May 2002, for Michael Hartley 20 October 2003, for Malcolm Wall 4 May 2006 and for Neil England 18 March 2008.

The non-executive Directors’ salaries were subject to an independent benchmarking exercise against industry comparators, taking account of their time commitment and responsibilities. As a result of this, each of the non-executive Directors’ fees (not including the Chairman) was increased by £1,600 per annum for base salary and £150 per annum for being a Committee Chairman, eff ective from 1 October 2008. Accordingly the remuneration for the year commencing 1 October 2008 for Michael Hartley will be £40,750, for Malcolm Wall £40,750 and for Neil England £37,600.

Performance graphTotal shareholder return of ITE Group plc over the last fi ve fi nancial years compared to the FTSE 250 Index.

0

50

100

150

200

250

300

350

400

30 Sep 03 30 Sep 04 30 Sep 05 30 Sep 06 30 Sep 07 30 Sep 08

Valu

e (£

)

— — ITE Group PLC— — FTSE 250 Index

This graph shows the value, by 30 September 2008, of £100 invested in ITE Group Plc on 30 September 2003 compared with the value of £100 invested in the FTSE 250 Index. The other points plotted are the values at intervening fi nancial year-ends.

Source: Thomson Financial



47

Audited information

Aggregate Directors’ remunerationThe total amounts for Directors’ remuneration and other benefi ts were as follows: 2008 2007 £000 £000

Emoluments 1,723 2,736Gains on exercise of share options (see page 48 for details) 2,142 6,964Total 3,865 9,700

Directors’ emoluments Compensation Fees/basic Annual Benefi ts for loss 2008 2007 salary bonuses in kind of offi ce total totalName of Director Notes £000 £000 £000 £000 £000 £000

ExecutiveBill Dye 1, 3 148 – 14 – 162 187Ian Tomkins 2, 3 – – – 21 21 1,141Edward Strachan 4 357 303 29 – 689 776Russell Taylor 1 319 276 14 – 609 372Former Director – – – – – 24

Non-executive Iain Paterson 5 120 – – – 120 120Sir Jeremy Hanley 3, 6 25 – – – 25 53Michael Hartley 39 – – – 39 33Malcolm Wall 38 – – – 38 30Neil England 3 20 – – – 20 –Aggregate emoluments 1,066 579 57 21 1,723 2,736

Notes1 Contributions to pension schemes are included under ‘Benefi ts in kind’.2 The Company was contractually obliged to pay Ian Tomkins a bonus for the period to 31 December 2007 which was to be based on sales achieved at that

date. An estimate of £240,000 had been included under ‘Compensation for loss of offi ce’ in respect of this obligation for the year to 30 September 2007. A balance of £21,000, based on the actual calculation, is included under ‘Compensation for loss of offi ce’ above.

3 These Directors served for only part of the year ended 30 September 2008.4 Edward Strachan earned Director’s fees of £37,000 for the year and he is a shareholder of Kyzyl Tan Consultants Limited (‘Kyzyl Tan’), which received

consultancy fees for services provided to the Group of £320,000 per annum. These amounts are included under ‘Fees/basic salary’. Kyzyl Tan earned total performance-related bonuses of £303,000 for the year related to Edward Strachan’s annual bonus arrangements for the year. Kyzyl Tan was paid £29,000 in the year to 30 September 2008 for living away from home allowance in accordance with its consultancy agreement. These amounts are all included in the table above.

5 Up to 30 November 2007, Iain Paterson received half of his remuneration in shares issued at an average mid-market price over the 180 days period ending 3 December 2007. With regard to his accumulated shareholding and so as to protect his independent status, Iain Paterson received all of his remuneration in cash from 1 December 2007.

6 Sir Jeremy Hanley has been retained as a consultant since the date of his resignation as non-executive Director on 6 March 2008 and was paid consultancy fees of £11,669 for the period from 7 March 2008 to 30 September 2008.

Total compensation for loss of offi ce in the year was £21,000 (2007: £374,000).


48


Directors’ share optionsAggregate emoluments disclosed above do not include any amounts for the value of options to acquire ordinary shares in the Company granted to or held by the Directors. Details of the options are as follows:

Market Granted Exercised Lapsed price at Gain on during Option during during exercise Exercisable Exercisable exerciseDirector 01 Oct 07 the year price the year the year date 30 Sept 08 from to £000

Bill Dye Conditional Share Award 71,795 – nil – 71,795 – – – – – 71,795 – nil – 71,795 – – – – – 71,795 – nil – 71,795 – – – – –Edward Strachan 1998 Discretionary Scheme 1,000,000 – 26.5p 1,000,000 – 179p – – – 1,525

2004 Employees’ Performance Share Plan 23,392 – nil* 23,392 – 148p – – – 35 16,800 – nil* – – – 16,800 18/01/09 – – – 24,749 1p – – – 24,749 11/01/11 10/01/18 –2004 Key Contractors’ Performance Share Plan 225,146 – 1p 225,146 – 141p – – – 315 149,800 – 1p – – – 149,800 18/01/09 17/01/16 – – 214,047 1p – – – 214,047 11/01/11 10/01/18 –Russell Taylor1998 Discretionary Scheme 1,000,000 – 35.5p – – – 1,000,000 26/03/08 25/03/13 –

2004 Employees’ Performance Share Plan 180,439 – nil* 180,439 – 148p – – – 267 106,400 – nil* – – – 106,400 18/01/09 – – – 158,027 1p – – – 158,027 11/01/11 10/01/18 – – 77,096 1p – – – 77,096 29/07/11 28/07/18 –

* These awards are conditional awards. Subject to the satisfaction of the relevant performance targets, shares subject to the awards will be transferred automatically to the relevant participant without any need to exercise the award following the end of the performance period.

The market price of the ordinary shares at 30 September 2008 was 121p and the range during the year was 119.50p to 182p.



49

For the 2004 Employees’ and Key Contractors’ Performance Share Plans, the performance conditions to be met for the awards are as follows: Aggregated headline Aggregated headline diluted earnings diluted earnings per per share* for three share to be equal Percentage of Market price onDate of grant of awards fi nancial years ending to or have exceeded Targets awards that vest date of grant

13 January 2005 30 September 2007 17.1p** Below 17.1p Nil 85.5p 17.1p 30% Between 17.1p Between 30% and and 18.6p 100% calculated on a straight line basis 17 January 2006 30 September 2008 19.0p*** Below 19.0p Nil 126.5p 19.0p 30% Between 19.0p Between 30% and and 21.0p 100% calculated on a straight line basis 11 January 2008 30 September 2010 29.8p*** Below 29.8p Nil 148p 29.8p 30% Between 29.8p Between 30% and and 33.4p 100% calculated on a straight line basis

* Headline diluted earnings per share is calculated using profi t before amortisation of acquired intangibles and impairment of goodwill (including associates) and profi ts or losses arising on disposal of Group undertakings.

** Excluding the costs associated with such awards or any other share awards.*** Including the costs associated with such awards or any other share awards.

The performance targets set for awards to be made in the fi nancial year commencing 1 October 2008 are set out below.

Aggregated headline diluted earnings per share* for the fi nancial years ending 30 September 2009, 2010 and 2011 Percentage of award that vests

Below 35p Nil35p 30% 40p Between 30% and 100% The conditional share awards granted to Bill Dye lapsed on 30 January 2008 upon his resignation.

The cost of all share awards charged to the profi t and loss account for the year ending 30 September 2008 was £0.9 million (2007: £1.6 million).

The maximum number of new share issues possible under the dilution limits in the proposed new option trust deeds is 11,196,916. The current headroom for making further share awards to be satisfi ed by the issue of new shares is 9,155,049 new share awards. Additionally the Employee’s Share Trust (ESOT) can hold up to 5% of the Company’s issued share capital against share awards.

Directors’ pensionContributions paid by the Company in respect of Directors’ pension: 2008 2007 £000 £000

Russell Taylor 14 –Bill Dye 14 4

On behalf of the Board

Malcolm WallChairman of the Remuneration Committee1 December 2008


50

Independent auditors’ report

We have audited the Group fi nancial statements of ITE Group plc for the year ended 30 September 2008 which comprise the Consolidated Income Statement, the Consolidated Statement of Recognised Income and Expense, the Consolidated Balance Sheet, the Consolidated Cash Flow Statement and the related notes 1 to 26. These Group fi nancial statements have been prepared under the accounting policies set out therein. We have also audited the information in the Report on remuneration that is described as having been audited.

We have reported separately on the parent company fi nancial statements of ITE Group plc for the year ended 30 September 2008.

This report is made solely to the Company’s members, as a body, in accordance with section 235 of the Companies Act 1985. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of Directors and auditorsThe Directors’ responsibilities for preparing the Annual Report, the Report on remuneration and the Group fi nancial statements in accordance with applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union are set out in the Statement of Directors’ Responsibilities.

Our responsibility is to audit the Group fi nancial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland).

We report to you our opinion as to whether the Group fi nancial statements give a true and fair view, whether the Group fi nancial statements have been properly prepared in accordance with the Companies Act 1985 and Article 4 of the IAS Regulation and whether the part of the Report on remuneration described as having been audited has been properly prepared in accordance with the Companies Act 1985. We also report to you whether in our opinion the information given in the Directors’ Report is consistent with the Group fi nancial statements.

In addition we report to you if, in our opinion, we have not received all the information and explanations we require for our audit, or if information specifi ed by law regarding Directors’ remuneration and other transactions is not disclosed.

We review whether the Corporate Governance Statement refl ects the Company’s compliance with the nine provisions of the 2006 Combined Code specifi ed for our review by the Listing Rules of the Financial Services Authority, and we report if it does not. We are not required to consider whether the Board’s statements on internal control cover all risks and controls, or form an opinion on the eff ectiveness of the Group’s corporate governance procedures or its risk and control procedures.

We read the other information contained in the Annual Report as described in the contents section and consider whether it is consistent with the audited Group fi nancial statements. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the Group fi nancial statements. Our responsibilities do not extend to any further information outside the Annual Report.


Overview Business review

51

Financial statementsGovernance

Basis of audit opinionWe conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the Group fi nancial statements and the part of the Report on remuneration to be audited. It also includes an assessment of the signifi cant estimates and judgements made by the Directors in the preparation of the Group fi nancial statements, and of whether the accounting policies are appropriate to the Group’s circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with suffi cient evidence to give reasonable assurance that the Group fi nancial statements and the part of the Report on remuneration to be audited are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the Group fi nancial statements and the part of the Report on remuneration to be audited.

OpinionIn our opinion:

the Group fi nancial statements give a true and fair view, in accordance with IFRSs as adopted by the European Union, >of the state of the Group’s aff airs as at 30 September 2008 and of its profi t for the year then ended;the Group fi nancial statements have been properly prepared in accordance with the Companies Act 1985 and Article 4 >of the IAS Regulation; the part of the Report on remuneration described as having been audited has been properly prepared in accordance >with the Companies Act 1985; andthe information given in the Directors’ Report is consistent with the Group fi nancial statements. >

Deloitte LLPChartered Accountants and Registered Auditors London, United Kingdom1 December 2008

52


Consolidated income statementFor the year ended 30 September 2008

2007 2008 Restated* Notes £000 £000

Continuing operations Revenue 1 110,063 99,134Cost of sales (55,173) (49,397)Gross profi t 54,890 49,737Other operating income 292 253 Administrative expenses before amortisation (16,222) (15,599) Amortisation of acquired intangibles 4 (2,596) (1,603)Total administrative expenses (18,818) (17,202)Share of results of associate 14 173 266Operating profi t 36,537 33,054Finance income 2 1,907 1,778Finance costs 3 (3,917) (1,096)Profi t on ordinary activities before taxation 4 34,527 33,736Tax on profi t on ordinary activities 6 (11,071) (10,777)Profi t for the period 23,456 22,959

Attributable to: Equity holders of the parent 23,479 22,978 Minority interests 23 (23) (19) 23,456 22,959 Earnings per share (p) Basic 8 9.4 9.1Diluted 8 9.3 9.0

* Restated for the presentation of fi nancial instruments. See accounting policies for details.


53


Consolidated statement of recognised income and expenseFor the year ended 30 September 2008

2008 2007 Notes £000 £000

Currency translation diff erence on net investment in subsidiary undertakings 2,921 (62)(Decrease)/increase in fair value on cash fl ow hedge 22 (51) 331Tax on items taken directly to equity (246) 1,921Net income recognised directly in equity 2,624 2,190 Transferred to profi t or loss on cash fl ow hedges 22 – (614)Put option at fair value 22 (3,269) –Profi t for the period attributable to the shareholders 23,456 22,959Total recognised income and expense for the period 22,811 24,535 Attributable to: Equity holders of the parent 22,834 24,554 Minority interests (23) (19) 22,811 24,535

54


Consolidated balance sheet30 September 2008

2007 2008 Restated Notes £000 £000

Non-current assets Goodwill 9 40,982 34,424Other intangible assets 11 16,115 4,295Property, plant and equipment 12 1,727 1,412Investments in associates 14 1,381 1,358Venue advances and other loans 15 1,001 1,583Deferred tax asset 19 1,594 1,690 62,800 44,762Current assets Trade and other receivables 15 42,712 33,603Tax prepayment 15 389 3,721Cash and cash equivalents 15 35,709 39,963Derivative fi nancial instruments 20 – 48 78,810 77,335 Total assets 141,610 122,097 Current liabilities Bank overdraft 16 (6,568) (13,306)Trade and other payables 17 (18,044) (13,326)Deferred income 17 (64,131) (46,157)Derivative fi nancial instruments 20 (4,257) (610)Provisions 18 (264) (824) (93,264) (74,223)Non-current liabilities Provisions 18 (653) (754)Deferred tax liabilities 19 (3,617) (1,671)Derivative fi nancial instruments 20 – (49) (4,270) (2,474) Total liabilities (97,534) (76,697)

Net assets 44,076 45,400


55


Consolidated balance sheet30 September 2008

2007 2008 Restated Notes £000 £000

Equity Share capital 21 2,479 2,503Share premium account 22 2,669 871Merger reserve 22 2,746 2,746Capital redemption reserve 22 457 403ESOT reserve 22 (8,390) (597)Retained earnings 22 42,776 38,930Translation reserve 22 3,414 493Hedge reserve 22 – 51Put option reserve 22 (3,269) –Equity attributable to equity holders of the parent 42,882 45,400 Minority interests 23 1,194 –Total equity 44,076 45,400

The fi nancial statements were approved by the Board of Directors and authorised for issue on 1 December 2008. They were signed on their behalf by:

Russell Taylor Neil Jones Chief Executive Offi cer Finance Director

56


Consolidated cash fl ow statementFor the year ended 30 September 2008

2008 2007 Notes £000 £000

Cash fl ows from operating activities Operating profi t from continuing operations 1 36,537 33,054Adjustments for: Depreciation and amortisation 4 3,314 2,159Share-based payments 931 1,550Other non-cash expenses (654) 47Loss/(profi t) on sale of fi xed asset 1 (39)Share of associate profi t (173) (266)Increase/(decrease) in provisions 1,147 (1,505)Operating cash fl ows before movements in working capital 41,103 35,000Increase in receivables (10,005) (1,230)Increase in deferred income 17,974 6,449Increase in payables 3,785 1,299Cash generated from operations 52,857 41,518Tax paid 6 (7,043) (10,324)Venue advances and loans (830) (929)Net cash from operating activities 44,984 30,265 Investing activities Interest received 2 1,902 1,752Loss on derivative fi nancial instruments (2,990) –Dividends received from associates 198 444Acquisition of businesses (13,508) (359)Exercise of Moda Put Option – (1,030)Purchase of property, plant and equipment and computer software (1,075) (783)Disposal of property, plant and equipment – 142Net cash (utilised)/generated from investing activities (15,473) 166 Financing activities Dividends paid 7 (12,050) (9,634)Interest paid (598) (663)Net cash fl ow in relation to ESOT shares (7,793) 2,623Purchase of own shares 22 (8,078) (17,506)Proceeds from issue of share capital 1,810 144Net cash fl ows from fi nancing activities (26,709) (25,036) Net increase in cash and cash equivalents 2,802 5,395 Net cash and cash equivalents at beginning of period net of overdrafts 26,657 21,166Eff ect of foreign exchange rate changes (318) 96Net cash and cash equivalents at end of period net of overdrafts 29,141 26,657

Consolidated cash fl ow statementFor the year ended 30 September 2008


57


2008 2007 Notes £000 £000

Comprising: Cash and cash equivalents 15 35,709 39,963Bank overdrafts 16 (6,568) (13,306) 29,141 26,657

Cash generated from the business: Cash generated from operations 52,857 41,518Interest received 1,902 1,752Interest paid (598) (663)Dividends earned from associates 198 444 54,359 43,051

Free cash fl ow from the business: Cash generated from the business 54,359 43,051Tax paid (7,043) (10,324)Receipts from disposal of property, plant and equipment – 142 47,316 32,869

58


Notes to the consolidated accounts

General informationITE Group plc is a company incorporated in the United Kingdom. The address of the registered offi ce is given on the inside back cover. The nature of the Group’s operations and its principal activities are set out in note 1.

These fi nancial statements are presented in pounds Sterling because that is the currency of the primary economic environment in which the Group operates. Foreign operations are included in accordance with the accounting policies set out below.

Change in accounting policiesGains and losses on derivatives not in designated and eff ective hedging relationshipsDuring the 2007/2008 fi nancial year, ITE Group plc has changed its accounting policy in relation to the income statement disclosure of fair value gains and losses on derivatives not in designated and eff ective hedging relationships. Previously, ITE Group plc reported these fair value gains and losses in “Administrative expenses” in the income statement. As a result of the change in policy, these fair value gains and losses are now disclosed as part of “Finance income/costs”. Management judges that this policy provides a fairer presentation of administrative expenses and a clearer presentation of derivatives in the fi nancial statements. The comparative fi nancial statements for 2007 have been restated. The eff ects of these changes on the comparative fi gures are increase in “Finance costs” of £0.4 million and a resulting decrease in “Administrative expenses”.

Presentation of derivative fi nancial instruments in the balance sheetIn light of the change of accounting policy above and the movement in the value of derivative instruments in the period, the Group has also amended the balance sheet presentation of derivative fi nancial instruments. Previously, the fair value of derivatives was shown in “Other debtors/other creditors”, but is now presented as a separate balance sheet caption on the face of the balance sheet. Management believes that this presentation provides a clearer picture of the derivative instruments used by the Group. This presentational change has resulted in a restatement of the comparative prior year end fi nancial statements for 2007. The eff ects of these changes on the comparative fi gures are decrease in “Other creditors” of £0.7 million and a resulting increase in “Derivative fi nance instruments”.

Impact of new accounting standardsIn the current year, the Group has adopted IFRS 7 Financial Instruments: Disclosures which is eff ective for annual periods beginning on or after 1 January 2007, and the related amendments to IAS 1 Presentation of Financial Statements. The impact of the adoption of IFRS 7 and the changes to IAS 1 has been to expand the disclosures provided in these fi nancial statements regarding the Group’s fi nancial instruments.

In addition the following new standards, amendments to standards and interpretations are mandatory for the year ending 30 September 2008, and these have been adopted but have had no impact on the 2008 Group fi nancial statements:

IFRIC 10 Interim Financial Reporting and Impairment >IFRIC 11 IFRS 2 Group and Treasury Share Transactions >

The following new standards have been issued which are not applicable to the Group since they are only eff ective for the Group’s accounting periods beginning on or after 1 October 2008. These are also not expected to have a material impact on the Group fi nancial statements:

Amendment to IAS 23, Borrowing Costs (eff ective for periods commencing on or after 1 January 2009). This standard >requires all borrowing costs which are directly attributable to an acquisition construction or production of a qualifying asset to form part of the cost of that asset. The Group does not expect a signifi cant impact from this standard.Amendment to IAS 27, Consolidated and Separate Financial Statements (eff ective for periods commencing on or after >1 July 2009). The amendment introduces changes to the accounting for partial disposals of subsidiaries, associates and joint ventures. Adoption of these amendments is not expected to signifi cantly impact the measurement, presentation or disclosure of future disposals.


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Amendments to IAS 32, Puttable fi nancial instruments and obligations arising on liquidation (eff ective for periods >beginning on or after 1 January 2009). The amendments are relevant to entities that have issued fi nancial instruments that are (i) puttable fi nancial instruments or (ii) instruments, or components of instruments that impose on the entity an obligation to deliver to another party a pro-rata share of the net assets on liquidation only. As a result of the amendments, some fi nancial instruments that currently meet the defi nition of a fi nancial liability will be classifi ed as equity because they represent the residual interest in the net assets of the entity. The amendments set out extensive detailed criteria to be met in order to be able to classify these instruments as equity. The impact of these amendments is restricted to specifi c cases and no analogies can be made. The Group does not expect a signifi cant impact from the adoption of this standard.Amendments to IAS 39, Financial instruments: Recognition and Measurement (eff ective for periods commencing >on or after 1 July 2009). The amendments clarify treatment of infl ation in a fi nancial hedged item and one-sided risks in a hedged item. The Group does not expect a signifi cant impact from the adoption of this standard.Amendment to IFRS 2, Share-based Payment (eff ective for periods commencing on or after 1 January 2009). The >amendment clarifi es that vesting conditions are service conditions and performance conditions only. Other features of a share-based payment are not vesting conditions. It also specifi es that all cancellations, whether by the entity or by other parties, should receive the same accounting treatment. The Group does not expect a signifi cant impact from the adoption of this standard.Amendment to IFRS 3, Business Combinations (eff ective for periods commencing on or after 1 July 2009). The >amendment introduces changes that will require acquisition related costs (including professional fees previously capitalised) to be expensed and adjustments to contingent consideration to be recognised in income and will allow the full goodwill method to be used when accounting for non-controlling interests. This will result in a change to the Group’s accounting policy for purchases of stakes in controlled entities.IFRS 8, Operating Segments (eff ective for periods beginning on or after 1 January 2009). IFRS 8 sets out disclosure >requirements concerning an entity’s operating segments, products, services, geographical areas in which it operates and its major customers. IFRS 8 replaces IAS 14, Segmental Reporting. The Group does not expect a signifi cant impact from the adoption of this standard.2008 Annual Improvements (the majority of changes will eff ect periods beginning on or after 1 January 2009). The >standard makes 41 amendments to 25 IFRSs as part of the fi rst annual improvements project. The amendments include: restructuring IFRS 1, mainly to remove redundant transitional provisions; an amendment to bring property under construction or development for future use as an investment property within the scope of IAS 40. Such property currently falls within the scope of IAS 16; and an amendment to clarify the circumstances in which an entity can recognise a prepayment asset for advertising or promotional expenditure. Recognition of an asset would be permitted up to the point at which the entity has access to the goods purchased or up to the point of receipt of services. The standard is not expected to have a signifi cant impact on the Group. In relation to the amendment to IAS 38 regarding prepayments for advertising or promotional expenditure, the Group will be required to reassess its accounting approach to refl ect the requirements of the standard.

The following interpretations have been issued which are not applicable to the Group since they are only eff ective for the Group’s accounting periods beginning on or after 1 October 2008. These are also not expected to have a material impact on the Group fi nancial statements:

IFRIC 12 Service Concession Agreements (eff ective for periods beginning on or after 1 January 2008). >IFRIC 13 Customer Loyalty Programmes (eff ective for periods beginning on or after 1 July 2008). >IFRIC 14 The Limit on a Defi ned Benefi t Asset Minimum Funding Requirements and their Interaction (eff ective for periods >beginning on or after 1 January 2008).IFRIC 15 Agreements for the Construction of Real Estate (eff ective for periods beginning on or after 1 January 2009). >IFRIC 16 Hedges of a Net Investment in a Foreign Operation (eff ective for periods beginning on or after 1 October 2008). >

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Notes to the consolidated accountscontinued

Basis of accountingITE Group plc is a UK listed company and, together with its subsidiary operations, is hereafter referred to as ‘the Group’. The Company is required to prepare its consolidated fi nancial statements in accordance with International Reporting Standards (IFRS) adopted by the European Union and therefore the Group fi nancial statements comply with Article 4 of the EU IAS Regulation.

The preparation of fi nancial statements under IFRS requires the Directors to make judgements, estimates and assumptions that aff ect the application of policies and the reported amounts of assets and liabilities, and income and expenses. These estimates and associated assumptions are based on past experience and other factors considered applicable at the time and are used to make judgements about the carrying value of assets and liabilities that cannot be readily determined from other sources. Actual results may diff er from these estimates.

These estimates and underlying assumptions are reviewed on an ongoing basis. Changes to estimates and assumptions are refl ected in the fi nancial statements in the period in which they are made.

The statements are presented in pounds Sterling and have been prepared under IFRS using the historical cost convention, except for the revaluation of fi nancial instruments. The principal accounting policies adopted are set out below.

Basis of consolidationThe Group accounts consolidate the accounts of ITE Group plc and its subsidiary undertakings controlled by the Company drawn up to 30 September each year. Control is achieved where the Company has the power to govern the fi nancial and operating policies of an investee entity so as to obtain benefi ts from its activities.

On acquisition, the assets and liabilities of a subsidiary are measured at their fair values at the date of acquisition. Any excess of the cost of acquisition over the fair values of the identifi able net assets is recognised as goodwill. The interest of minority shareholders is stated at the minority’s proportion of the fair values of assets and liabilities recognised. Subsequently, any losses applicable to the minority interest in excess of the minority interest are allocated against the interests of the parent.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the eff ective date of acquisition or up to the eff ective date of disposal, as appropriate.

Where necessary, adjustments are made to the fi nancial statements of subsidiaries to bring the accounting policies used into line with those used by the Group.

All intra-Group transactions, balances, income and expenses are eliminated on consolidation.

Business combinationsThe acquisition of subsidiaries is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree’s identifi able assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are recognised at their fair value at the acquisition date, except for non-current assets (or disposal groups) that are classifi ed as held for resale in accordance with IFRS 5 (Non-current assets held for sale and discontinued operations), which are recognised and measured at fair value less costs to sell.

Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the Group’s interest in the net fair value of the identifi able assets, liabilities and contingent liabilities recognised. If, after reassessment, the Group’s interest in the net fair value of the acquiree’s identifi able assets, liabilities and contingent liabilities exceeds the cost of the business combination, the excess is recognised immediately in the profi t and loss account.

The interest of minority shareholders in the acquiree is initially measured as the minority’s proportion of the net fair value of the assets, liabilities and contingent liabilities recognised.


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GoodwillGoodwill arising on consolidation represents the excess of the cost of acquisition over the Group’s interest in the fair value of the identifi able assets and liabilities of a subsidiary or associate at the date of acquisition. Goodwill is recognised as an asset and reviewed for impairment at least annually. Any impairment is recognised immediately in the income statement and is not subsequently reversed.

For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefi t from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying value of the unit, the impairment loss is allocated fi rst to reduce the carrying amount of any goodwill allocated to the unit and then to other assets of the unit, pro-rata on the basis of the carrying amount of each asset in the unit.

On disposal of a subsidiary or associate, the attributable amount of goodwill is included in the determination of the profi t or loss on disposal.

Goodwill arising on acquisitions before the date of transition to IFRS has been retained at the previous UK GAAP amounts subject to being tested for impairment at that date. Goodwill written off to reserves under UK GAAP prior to 1998 has not been reinstated and is not included in determining any subsequent profi t or loss on disposal.

Goodwill on acquisition of a foreign entity is treated as an asset of the foreign entity and translated at the closing rate. The Group has elected to treat goodwill arising on acquisitions before the date of transition to IFRS as sterling denominated assets. Intangible assetsComputer software is initially measured at purchase cost, trademarks, brands and customer lists are measured at fair value. Computer software, trademarks, brands and customer lists have a defi nite useful life and are carried at cost or fair value less accumulated amortisation. Amortisation is calculated using the straight line method to allocate the cost over their estimated useful life. The estimated useful lives are typically between three and seven years.

Impairment of assets excluding goodwillAt each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets are impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment (if any). Where the asset does not generate cash fl ows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. An intangible asset with an indefi nite useful life is tested for impairment annually and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash fl ows are discounted to their present value using a pre-tax discount rate that refl ects current market assessments of the time value of money and the risks specifi c to the asset for which estimates of future cash fl ows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment is recognised immediately as an expense.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised as income immediately, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

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Property, plant and equipmentProperty, plant and equipment is carried at cost less accumulated depreciation and any recognised impairment loss.

Depreciation is charged so as to write off the cost of assets over their estimated useful lives, using the straight-line method, on the following bases:

Leasehold improvements – term of leaseFixture and fi ttings – 10 yearsPlant and equipment – 4 years

Assets held under fi nance leases are depreciated over their expected useful lives on the same basis as owned assets, or where shorter, over the term of the relevant lease.

The gain or loss arising on the disposal or retirement of an asset is determined as the diff erence between the sales proceeds and the carrying value amount of the asset and is recognised in income.

AssociatesAn associate is an entity over which the Group is in a position to exercise signifi cant infl uence, but not control or joint control, through participation in the fi nancial and operating policy decisions of the investee. Signifi cant infl uence is the power to participate in the fi nancial and operating policy decisions of the investee but is not control or joint control over those policies.

The results and assets and liabilities of associates are incorporated in these fi nancial statements using the equity method of accounting. Investments in associates are carried in the balance sheet at cost as adjusted by post acquisition changes in the Group’s share of net assets of the associate, less any impairment in the value of individual investments. Losses of an associate in excess of Group’s interest in that associate (which includes any long term interests that, in substance, form part of the Group’s net investment in the associate) are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate.

Any excess of the cost of acquisition over the Group’s share of the fair values of the identifi able net assets of the associate at the date of acquisition is recognised as goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of that investment. Any defi ciency of the cost of acquisition below the Group’s share of the fair value of the identifi able net assets of the associate at the date of acquisition (i.e. discount on acquisition) is credited in profi t or loss in the period of acquisition.

Where a Group company transacts with an associate of the Group, profi ts and losses are eliminated to the extent of the Group’s interest in the relevant associate. Losses may provide evidence of an impairment of the asset transferred in which case an appropriate provision is made for impairment.

Venue advancesWhere the Group has advanced funds to venue owners that can be repaid by either off -setting against future venue hire or by cash repayment, the fair value is recognised based on the discounted value of future cash receipts. The loan balance is subsequently measured at amortised cost using the “eff ective interest rate method”. Appropriate allowances for estimated irrecoverable amounts are recognised in profi t or loss when there is objective evidence that the asset is impaired.

Advances that are prepayments of future venue hire and do not permit the repayment of the principal in cash are recognised at cost as prepayments in venue advances and prepayments.

ProvisionsProvisions are recognised when the Group has a present obligation as a result of past events, it is probable that an outfl ow of resources will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are discounted to present value where the eff ect is material.


63


Financial InstrumentsClasses of fi nancial instrumentsThe Group aggregates its fi nancial instruments into classes based on their nature and characteristics. The details of fi nancial instruments by class are disclosed in note 20 to the accounts.

Financial assetsThe Group classifi es its fi nancial assets into the following categories: cash and cash equivalents, loans and receivables and derivative assets at fair value through profi t or loss. The classifi cation is determined by management upon initial recognition, and is based on the purpose for which the fi nancial assets were acquired.

Financial assets are recognised on the Group’s balance sheet when the Group becomes a party to the contractual provisions of the instrument.

At each balance sheet date, the Group assesses whether its fi nancial assets are to be impaired. Impairment losses are recognised in the income statement where there is objective evidence of impairment. Financial assets are derecognised (in full or partly) when the Group’s rights to cash fl ows from the respective assets have expired or have been transferred and the Group has neither exposure to the risks inherent in those assets nor entitlement to rewards from them.

Cash and cash equivalentsCash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignifi cant risk of changes in value. Cash and cash equivalents are measured at initial recognition at fair value. Subsequent to initial recognition cash and cash equivalents are stated at fair value with all realised gains or losses recognised in the income statement.

Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the Cash Flow Statement.

Loans and receivablesLoans and receivables are non-derivative fi nancial assets with fi xed or determinable payments that are not quoted in an active market. This category includes the following classes of fi nancial assets: trade and other receivables and venue advances.

Loans and receivables are measured at initial recognition at fair value and are subsequently measured at amortised cost. Appropriate allowances for estimated irrecoverable amounts are recognised in profi t or loss when there is objective evidence that the asset is impaired. The estimates are based on specifi c credit circumstances and the Group’s historical bad receivables experience. No interest is charged on the loans and receivables, due to either their short term nature or specifi c arrangements in place, and hence the eff ective interest rate method is not applied.

Derivative assetsA derivative is a fi nancial instrument that changes its value in response to changes in underlying variable, requires no or little net initial investment and is settled at a future date. Derivative assets are classifi ed as at fair value through profi t or loss. Derivative assets are measured at initial recognition at fair value and are subsequently re-measured to their fair value at each balance date with the resulting gains and losses recognised in the income statement. These derivatives are acquired in full compliance with the Group’s risk management policies.

Financial liabilities The Group classifi es its fi nancial liabilities into the following categories: bank borrowings, trade and other payables held at amortised cost and derivative liabilities through profi t or loss.

Financial liabilities are recognised on the Group’s balance sheet when the Group becomes a party to the contractual provisions of the instrument.

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Bank borrowingsInterest-bearing bank loans and overdrafts are recorded at the proceeds received, net of direct issue costs. Finance charges are accounted for on an accruals basis in the profi t or loss and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise. Where bank overdrafts are deemed to be integral to the Group’s cash management activities, they are presented within net cash and cash equivalents in the cash fl ow statement. Overdrafts that are considered to be fi nancing in nature are presented as fi nancing activities in the cash fl ow statement.

Trade and other payablesTrade payables are measured at initial recognition at fair value and are subsequently measured at amortised cost. Trade payables are derecognised in full when the Group is discharged from its obligation, it expires, is cancelled or replaced by a new liability with substantially modifi ed terms. Trade and other payables are short-term and there is no interest charged in connection with these, hence the eff ective interest method is not applied.

Derivative liabilitiesA derivative is a fi nancial instrument that changes its value in response to changes in underlying variable, requires no or little net initial investment and is settled at a future date.

Derivative liabilities are classifi ed as at fair value through profi t or loss. Derivative liabilities are measured at initial recognition at fair value and are subsequently re-measured to their fair value at each balance sheet date with the resulting gains and losses recognised in the income statement.

These derivatives are acquired in full compliance with the Group’s risk management policies.

Hedge accountingThe Group’s activities expose it to the fi nancial risks of changes in foreign currency exchange rates. The Group uses derivative fi nancial instruments such as foreign exchange forward contracts and options to hedge these exposures.

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently re-measured to their fair value at each balance sheet date. The resulting gain or loss is recognised in profi t or loss immediately unless the derivative is designated and eff ective as a hedging instrument, in which event the timing of the recognition in profi t or loss depends on the nature of the hedge relationship. The Group designates its derivative fi nancial instruments as cash fl ow hedges. A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be realised or settled within 12 months. Other derivatives are presented as current assets or current liabilities.

At the inception of the hedge relationship, the Group documents the relationship between the hedging instrument and the hedged item, along with the risk management objectives and strategy for undertaking various hedging transactions. At the inception of the hedge and on an ongoing basis, the Group documents whether the hedging instrument that is used in a hedging relationship is highly eff ective in off setting changes in the fair values of cash fl ows of the hedged item.

Derivative instruments are initially recognised at fair value at the date a derivative contract is entered into and are subsequently measured to their fair value at each balance sheet date. The eff ective portion of changes in the fair value of derivatives that are designated and qualify as cash fl ow hedges are deferred in equity. The gain or loss relating to any ineff ective portion is recognised immediately in profi t or loss, and is included in “Finance income/cost” in the income statement. Amounts deferred in equity are recycled in profi t or loss in the periods when the hedged item is recognised in profi t or loss, in the same line of the income statement as the recognised hedged item. Hedge accounting is discontinued when the Group revokes the hedging relationship, the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifi es for hedge accounting. Any cumulative gain or loss deferred in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in profi t or loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was deferred in equity is recognised immediately in profi t or loss.

The Group’s use of fi nancial derivatives is governed by the Group’s fi nancial policies. Further details on these policies can be found in the Business review on page 28.


65


Fair valuesThe fair value is defi ned as the amount at which a fi nancial instrument could be exchanged in an arm’s length transaction between informed and willing parties and is calculated by reference to market rates discounted to current value.

The Group determines the fair value of its fi nancial instruments using market prices for quoted instruments and widely accepted valuation techniques for other instruments.

Valuation techniques include discounted cash fl ows, standard valuation models based on market parameters, dealer quotes for similar instruments and use of comparable arm’s length transactions.

RevenueRevenue represents the fair value of amounts receivable for goods and services provided in the ordinary course of business net of discounts, VAT and other sales-related taxes.

Revenue is recognised on a straight line basis at the time of an event taking place. Revenue is recognised evenly over the days over which an event is held and if an event straddles a period end, then the revenue is recognised in each period based on the number of days of the event in each period. Billings and cash received in advance, and directly attributable costs relating to future events are deferred. The amounts so deferred are included in the balance sheet as deferred event income and prepaid event costs respectively. Losses anticipated at the balance sheet date are provided in full.

Interest income is accrued on a time basis, by reference to the principal outstanding and at the eff ective interest rate applicable.

Dividend income from investments is recognised when the shareholders’ rights to receive payment have been established.

Barter transactionsWhere barter transactions occur between advertising and exhibition space and the revenue can be measured reliably, revenues and costs are recognised in the income statement.

Operating profi tOperating profi t is stated after the share of results of associates and profi t or loss on disposal of Group undertakings and before investment income and fi nance costs.

TaxationThe tax expense represents the sum of tax currently payable and deferred tax.

The current tax is based on the taxable profi t for the year using the tax rates and laws that have been enacted or substantially enacted by the balance sheet date. Taxable profi t diff ers from net profi t as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.

Deferred tax is the tax expected to be payable or recoverable on diff erences between the carrying amounts of assets and liabilities in the fi nancial statements and the corresponding tax bases used in the computation of taxable profi t, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary diff erences and deferred tax assets are recognised only to the extent that it is probable that taxable profi ts will be available against which deductible temporary diff erences can be utilised. Such assets and liabilities are not recognised if the temporary diff erence arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that does not aff ect the tax profi t or the accounting profi t.

Deferred tax liabilities are recognised for taxable temporary diff erences arising on investments in subsidiaries and associates and interests in joint ventures, except where the Group is able to control the reversal of the temporary diff erence and it is probable that the temporary diff erence will not reverse in the foreseeable future.

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The carrying value of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that suffi cient taxable profi ts will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except where it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are off set when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

Foreign currenciesTransactions in foreign currencies are recorded at the rate of exchange at the date of the transaction or their contractual rate where applicable. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated at the rates of exchange prevailing at that date. Non-monetary assets and liabilities are translated at the rate prevailing at the date the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Gains and losses arising on the settlement of monetary items, and on the retranslation of monetary items, are included in profi t or loss for the period. Exchange diff erences arising on the retranslation of non-monetary items carried at fair value are included in profi t or loss for the period except for diff erences arising on the retranslation of non-monetary items in respect of which gains or losses are recognised directly in equity. For such non-monetary items, any exchange component of that gain or loss is also recognised directly in equity.

Details of the Group’s accounting polices for forward contracts and options are included in the policy on derivative fi nancial instruments.

On consolidation, the results of overseas operations are translated at the average rates of exchange during the period and their balance sheets at the rates ruling at the balance sheet date. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fl uctuate signifi cantly during the period, in which case the exchange rates at the date of transaction are used. Exchange diff erences arising are classifi ed as equity and transferred to the Group’s translation reserve. Such translation diff erences are recognised as income or as expense in the period in which the operation is disposed of.

Under the exemption permitted from IAS 21 (the eff ects of changes in foreign exchange rates), cumulative translation diff erences for all foreign operations prior to 1 October 2004 have been treated as zero. Consequently, any gain or loss on disposal will exclude translation diff erences that arose prior to 1 October 2004.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

Employee Share TrustThe fi nancial statements include the assets and liabilities of the Employee Share Trust (‘ESOT’). Shares in the Company held by the ESOT have been valued at cost and are held in equity. The costs of administration of the ESOT are written off to profi t or loss as incurred.

Where such shares are subsequently sold, any net consideration received is included in equity attributable to the Company’s equity holders.


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Share-based paymentsThe Group has applied IFRS 2 (share-based payment). IFRS 2 has been applied to all grants of equity instruments after 7 November 2002 that were unvested as of 1 January 2005.

The Group issues equity-settled share-based payments to certain employees. These are measured at fair value (excluding the eff ect of non-market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of shares that will eventually vest and adjusted for the eff ect of non-market-based vesting conditions.

Fair value is measured using a Black-Scholes model. The expected life used in the model has been adjusted, for the eff ects of non-transferability, exercise restrictions and behavioural considerations based on management’s best estimate.

LeasesRentals payable under operating leases are charged on a straight-line basis over the lease term, even if the payments are not made on such a basis. Benefi ts received as an incentive to enter into an operating lease are also spread on a straight-line basis over the lease term.

Critical accounting judgments and key sources of estimation uncertaintyIn the process of applying the Group’s accounting policies, the following judgements and assumptions have been made by management and have the most signifi cant eff ect on the amounts recognised in the fi nancial statements or have the most risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next fi nancial year: Impairment of goodwill and intangible assetsDetermining whether goodwill and intangible assets are impaired requires an estimation of the value in use of cash-generating units to which goodwill or intangible assets have been allocated. The value in use calculation requires an estimation of future cash fl ows expected from the cash-generating unit for a period of 10 years and a suitable discount rate in order to calculate present value. The 10 year period used in the calculation is based on management’s average expectation of the period over which the value will be derived from the cash generating units. The carrying value of goodwill and intangible assets at 30 September 2008 is £41.0 million and £16.1million respectively.

Intangible assetsThe valuation of intangible assets requires management to estimate the net present value of the additional future cash fl ows arising from customer relationships and trademarks to determine the value of those intangible assets. This involves estimating the period over which the customer relationships and trademarks aff ect future cash fl ows. Share-based payments The Group makes share-based payments to certain employees. These payments are measured at their estimated fair value at the date of grant, calculated using an appropriate option pricing model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of the number of shares that will eventually vest. The key assumptions used in calculating the fair value of the options are the discount rate, the Group’s share price volatility, dividend yield, risk free rate of return, and expected option lives. Management regularly performs a true-up of the estimate of the number of shares that are expected to vest; this is dependent on the anticipated number of leavers. Taxation Being a multinational Group with tax aff airs in many geographic locations inherently leads to a tax structure which makes the degree of estimation and judgement more challenging. The resolution of issues is not always within the control of the Group and is often dependent on the effi ciency of legal processes. Such issues can take several years to resolve. The Group however takes a considered view of unresolved issues, however the inherent uncertainty regarding these items means that the eventual resolution could diff er signifi cantly from the accounting estimates and therefore impact the Group’s results and future cash fl ows.

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1 Segmental informationThe turnover and profi t before taxation are attributable to the Group’s one principal activity, the organisation of trade exhibitions, conferences and related activities and can be analysed by geographic segment as follows:

UK & Central Eastern & Western Asia & Southern Europe Caucasus Russia Europe Rest of World Total GroupYear ended 30 September 2008 £000 £000 £000 £000 £000 £000

By geographical location of events/activities Revenue 12,280 21,973 65,956 9,252 602 110,063Result (7,480) 8,893 33,817 2,183 (1,049) 36,364By origin of sale Revenue 55,813 11,096 37,056 5,971 128 110,063Result 18,667 2,107 15,134 485 (30) 36,364Share of results of associates 173Profi t on disposal of Group undertakings –Operating profi t 36,537Finance income 1,907Finance costs (3,917)Profi t before tax 34,527Tax (11,071)Profi t after tax 23,456

Capital expenditure 535 75 444 22 – 1,076Depreciation and amortisation 2,430 115 752 17 – 3,314 Balance Sheet Assets* 83,771 7,852 44,802 1,819 2 138,246Interest in associates 1,381Consolidated total assets 139,627Liabilities* 49,579 5,967 33,604 1,703 42 90,895

* Segment assets and segment liabilities exclude current and deferred tax assets and liabilities.

The revenue in the year of £110.1 million includes £0.2 million (2007: £0.2 million) of barter sales.


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UK & Central Eastern & Western Asia & Southern Europe Caucasus Russia Europe Rest of World Total GroupYear ended 30 September 2007 £000 £000 £000 £000 £000 £000

By geographical location of events/activities Revenue 10,624 18,082 61,706 7,069 1,653 99,134Result (6,672) 6,060 31,003 2,445 (48) 32,788By origin of sale Revenue 51,290 8,928 34,492 3,972 452 99,134Result 18,788 2,191 12,037 (304) 76 32,788Share of results of associates 266Profi t on disposal of Group undertakings –Operating profi t 33,054Finance income 1,778Finance costs (1,096)Profi t before tax 33,736Tax (10,777)Profi t after tax 22,959

Capital expenditure 255 154 361 13 – 783Depreciation and amortisation 1,839 68 212 40 – 2,159 Balance Sheet Assets* 92,537 6,137 15,297 1,389 (32) 115,328Interest in associates 1,358Consolidated total assets 116,686Liabilities* 51,628 4,798 14,206 1,333 87 72,052 * Segment assets and segment liabilities exclude current and deferred tax assets and liabilities.

The revenue in the year of £99.1 million includes £0.2 million (2006: £0.2 million) of barter sales.

2 Finance income 2008 2007 £000 £000

Interest receivable from bank deposits 1,874 1,720Interest receivable from Inland Revenue repayments 15 28Interest receivable on advances to venues 13 4Unwind of fair value discount on venue advances 5 26 1,907 1,778

The investment revenue earned on fi nancial assets is from loans and receivables and cash balances.

3 Finance costs 2007 2008 Restated £000 £000

Interest on overdrafts 360 453Bank charges 238 210Loss on derivative fi nancial instruments 3,319 433 3,917 1,096

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4 Profi t on ordinary activities before taxationProfi t on ordinary activities before taxation is stated after charging/(crediting): 2007 2008 Restated £000 £000

Staff costs (note 5) 19,492 19,314Depreciation of property, plant and equipment 498 349Amortisation of computer software 220 207Amortisation of purchased intangible assets 2,596 1,603Operating lease rentals – other 2,227 1,431Impairment loss recognised on trade receivables 251 115Loss/(profi t) on disposal of fi xed assets 1 (39)Foreign exchange loss on derivative fi nancial instruments 3,319 433Foreign exchange gain on operating activities (266) (421)

Auditors’ remuneration Fees payable to the Company’s auditor for the audit of the Company’s annual accounts Fees payable to the Company’s auditor and its associates for other services: 192 167– The audit of the Company’s subsidiaries pursuant to legislation 99 118– Other services pursuant to legislation 42 32– Other services 16 23Tax services 162 217 511 557

Reconciliation of headline pre-tax profi t to profi t on ordinary activities before taxationProfi t on ordinary activities before taxation 34,527 33,736Amortisation of acquired intangibles 2,596 1,603Headline pre-tax profi t 37,123 35,339

5 Staff costs 2008 2007 Number Number

The average monthly number of employees (including Directors) was: Administration 290 244Technical and sales 482 411 772 655

£000 £000

Their aggregate remuneration comprised: Wages and salaries 16,215 15,705Social security costs 1,635 1,634Other pension costs 711 425Share based payments 931 1,550 19,492 19,314

Details of audited Directors’ remuneration are shown in the Report on remuneration on pages 47 to 49.


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6 Tax on profi t on ordinary activities 2008 2007 £000 £000

Analysis of tax charge for the year: Group taxation on current year profi t UK corporation tax on profi t for the year 5,158 5,093Adjustment to UK tax in respect of previous years 51 (196) 5,209 4,897 Overseas taxation – current year 5,489 5,915Overseas taxation – previous years 419 111 5,908 6,026 Current tax 11,117 10,923Deferred tax Origination and reversal of timing diff erences (46) (146) 11,071 10,777

The tax charge for the year can be reconciled to the profi t per the income statement as follows: 2008 2007 £000 £000

Profi t on ordinary activities before tax 34,527 33,736Profi t on ordinary activities multiplied by standard rate of corporation tax in the UK of 29% (2007: 30%) 10,013 10,121 Eff ects of: Expenses not deductible for tax purposes 470 279Deferred tax assets not recognised 62 172Withholding tax and other irrecoverable taxes 400 1,111Adjustments to tax charge in respect of previous years 393 (85)Deferred tax provision in respect of proposed dividends from overseas subsidiaries 801 –Eff ect of diff erent tax rates of subsidiaries operating in other jurisdictions (1,018) (768)Associate tax (50) (53) 11,071 10,777

7 Dividends 2008 2007 £000 £000

Amounts recognised as distributions to equity holders in the year: Final dividend for the year ended 30 September 2007 of 3.2p (2006: 2.5p) per ordinary share 8,045 6,331Interim dividend for the year ended 30 September 2008 of 1.6p (2007: 1.3p) per ordinary share 4,005 3,303 12,050 9,634Proposed fi nal dividend for the year ended 30 September 2008 of 3.7p (2007: 3.2p) per ordinary share 8,915 7,983

The proposed fi nal dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these fi nancial statements.

Under the terms of the trust deed dated 20 October 1998, the ITE Group Employees Share Trust, which holds 6,967,783 (2007: 1,854,875) ordinary shares representing 3% of the Company’s called-up ordinary share capital, has agreed to waive all dividends due to it.

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8 Earnings per shareThe calculation of basic, diluted and headline diluted earnings per share is based on the following earnings and the numbers of shares:

Number of shares 2008 2007 Number Number of shares of shares (‘000) (‘000)

Weighted average number of shares: For basic earnings per share 249,647 251,276Eff ect of dilutive potential ordinary shares 2,493 4,454For diluted and headline diluted earnings per share 252,140 255,730

Basic and diluted earnings per shareThe calculations of basic and diluted earnings per share are based on the profi t for the fi nancial year attributable to equity holders of the parent of £23.5 million (2007: £23.0 million). Basic and diluted earnings per share were 9.4p and 9.3p respectively (2007: 9.1p and 9.0p respectively).

Headline diluted earnings per shareHeadline diluted earnings per share is intended to provide a consistent measure of Group earnings on a year-on-year basis and is 10.1p per share (2007: 9.4p). Headline basic earnings per share is 10.2p per share (2007: 9.6p).

Earnings 2008 2007 £000 £000

Profi t for the fi nancial year attributable to equity holders of the parent 23,479 22,978Amortisation of acquired intangible assets 2,596 1,603Tax eff ect of amortisation of acquired intangible assets (713) (419)Headline earnings for the fi nancial year 25,362 24,162

9 Goodwill 2008 2007 £000 £000

At 1 October 34,424 34,406Acquired through business combinations 6,443 23Exchange diff erences 115 (5)At 30 September 40,982 34,424

10 Goodwill acquired through business combinationsGoodwill acquired in a business combination is allocated, at acquisition, to the cash generating units that are expected to benefi t from that business combination. The carrying amount of goodwill has been allocated as follows: 2008 2007 £000 £000

UK & Western Europe 10,873 10,763Central Asia & Caucasus 6,080 6,080Russia 21,579 15,125Eastern & Southern Europe 2,450 2,456 40,982 34,424


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The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired.

The recoverable amounts of the cash generating units are determined from value in use calculations. The key assumptions for the value in use calculations are those regarding the discount rates, growth rates and expected changes to cash fl ows during the period. Management estimates discount rates using pre-tax rates that refl ect the current market assessments of the time value of money and risks specifi c to the cash-generating units. The growth rates are based on management forecasts. The Group prepares cash fl ow forecasts based upon the most recent fi nancial plans approved by the Board and extrapolates the planned cash fl ows. Assumed growth rates of between 1% and 3% have been applied for the fi rst three years beyond the detailed plans and a rate of between 1% and 2% is applied thereafter, these rates do not exceed the average long-term growth rate for our business in the relevant markets.

The discount rates applied to the cash generating units are between 10% and 13%.

Additions in the year of £6.4 million are all for the acquisition of businesses. This includes £108,000 in relation to additional costs on ITE Moda Footwear Limited and deferred consideration for ITE Exhibitions BV. In 2007, the additional acquisition of businesses of £23,000 arose with the payment of deferred consideration in relation to ITE Exhibitions BV.

The principal share acquisitions made during the year to 30 September 2008, accounted for under acquisition method, were:

Name of entity acquired Nature of entity acquired Date of acquisition Percentage acquired

Siberian Fairs LLC Exhibition organiser 29 April 2008 100%Primexpo North West LLC Exhibition organiser 15 June 2008 75%

Details of the aggregate net assets acquired as adjusted from book to fair value, and the attributable goodwill are presented as follows:

Siberian Fairs Primexpo North LLC West LLC

Net assets acquired £000Intangible fi xed assets 5,898 7,243Property plant and equipment 368 8Trade and other receivables 688 54Cash and cash equivalents – –Trade and other payables (1,105) (62)Deferred tax liability (1,445) (212)Equity minority interest – (1,216)Net assets acquired 4,404 5,815Goodwill arising on acquisition 2,370 3,965Total cost of acquisition 6,774 9,780

Satisfi ed by:Net cash paid 2,738 8,983Deferred consideration 4,036 797 6,774 9,780

The values used in accounting for the identifi able assets and liabilities of these acquisitions are provisional in nature at balance sheet date. If necessary adjustments will be made to these carrying values and the related goodwill, within 12 months of the acquisition date. The goodwill arising on acquisition of Siberian Fairs LLC and Primexpo North West LLC represent signifi cant expected synergies with other operations of the Group and the complementarity achieved with the Group’s existing emerging market strategy.

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10 Goodwill acquired through business combinations (continued)a) Siberian Fairs LLCDetails of net assets acquired on 29 April 2008 and the related fair value adjustments are presented as follows:

Assets acquired Book value Adjustments Fair value £000 £000 £000

Intangible fi xed assets 2 5,896 5,898Property plant and equipment 415 (47) 368Trade and other receivables 688 – 688Trade and other payables (1,105) – (1,105)Deferred tax liability – (1,445) (1,445)Net assets acquired – 4,404 4,404

The acquired business has contributed revenues of £2.2 million, underlying operating loss of £0.3 million and net loss of £0.3 million. If the acquisition had occurred on 1 October 2007, the acquired business would have contributed revenues of £4.9 million and net profi t of £0.8 million.

b) Primexpo North West LLCDetails of net assets acquired on 15 June 2008 and the related fair value adjustments are presented as follows:

Assets acquired Book value Adjustments Fair value £000 £000 £000

Intangible fi xed assets – 7,243 7,243Property plant and equipment 8 – 8Trade and other receivables 54 – 54Trade and other payables (62) – (62)Deferred tax liability – (212) (212)Equity minority interest – (1,216) (1,216)Net assets acquired – 5,815 5,815

The acquired business has contributed revenues of £nil, underlying operating loss of £0.1 million and net loss of £0.4 million. If the acquisition had occurred on 1 October 2007, the acquired business would have contributed revenues of £2.4 million and net profi t of £1.3 million.


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11 Other intangible assets Customer relationships Computer and trademarks software Total £000 £000 £000

Cost At 1 October 2006 7,148 1,331 8,479Additions 78 188 266Foreign exchange (30) – (30)At 1 October 2007 7,196 1,519 8,715Additions 14,156 332 14,488Foreign exchange 175 – 175At 30 September 2008 21,527 1,851 23,378

Amortisation At 1 October 2006 1,708 902 2,610Charge for the year 1,603 207 1,810At 1 October 2007 3,311 1,109 4,420Charge for the year 2,596 220 2,816Foreign exchange 27 – 27At 30 September 2008 5,934 1,329 7,263 Carrying amount At 30 September 2008 15,593 522 16,115At 30 September 2007 3,885 410 4,295

The amortisation period for customer relationships and trademarks is between three and seven years for customer relationships, with a weighted average of fi ve years, and up to 20 years for trademarks. Computer software is amortised over four years.

The additions to customer relationships and trademarks of £14.2 million relate to the purchase of Primexpo North West LLC, Siberian Fairs LLC, and the Sfi tex and Bubble events in the year. The carrying amounts of these intangibles at 30 September 2008 were as follows: Primexpo North West LLC £6.9m, Siberian Fairs LLC £5.3m, Sfi tex £0.5m and Bubble £0.3m. The intangibles acquired during the year are amortised in accordance with the Group amortisation policy for intangibles as detailed above.


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12 Property, plant and equipment Leasehold land and Plant and buildings equipment TotalGroup £000 £000 £000

Cost At 1 October 2006 967 1,156 2,123Additions – 594 594Disposals – (193) (193)At 1 October 2007 967 1,557 2,524Additions 91 653 744Disposals – (1) (1)Foreign exchange – 173 173At 30 September 2008 1,058 2,382 3,440

Depreciation At 1 October 2006 347 507 854Charge for the year 49 300 349Disposals – (91) (91)At 1 October 2007 396 716 1,112Charge for the year 112 386 498Foreign exchange – 103 103At 30 September 2008 508 1,205 1,713

Net book value At 30 September 2008 550 1,177 1,727At 30 September 2007 571 841 1,412

13 SubsidiariesA list of the signifi cant investments in subsidiaries, including the name, country of incorporation and proportion of ownership interest is given in note 5 to the Company’s separate fi nancial statements.

14 Interests in associates 2008 2007 £000 £000

Aggregated amounts relating to associates Total assets 4,361 2,908Total liabilities (2,980) (1,550) 1,381 1,358

Included within total assets is goodwill of £764,000 (2007: £764,000).

Share of revenue 3,348 4,419Share of profi t after tax 173 266

Country of incorporation or principal Eff ective business address holding %

Istanbul Fuarcilik AS Turkey Ordinary shares 50


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15 Current assets 2008 2007 £000 £000

Trade and other receivables Trade receivables 35,416 26,819Other receivables 747 1,954Venue advances and prepayments 1,408 2,036Prepayments and accrued income 5,141 2,794 42,712 33,603

Taxation prepayments Taxation prepayments 389 3,721

Taxation prepayments relate to overseas subsidiaries and are available for off set against future tax liabilities.

Cash and cash equivalents Cash at bank and in hand 35,697 36,125Cash held on trust 12 3,838 35,709 39,963

Venue advances and other loans – non-current Venue advances and other loans – non-current 1,001 1,583

The cash at bank and in hand comprises cash held by the Group and short-term deposits with an original maturity of three months or less. The carrying value of these assets approximates their fair value. The cash balance is represented by £9.6 million of Sterling, £18.5 million of Euros, £0.8 million of US Dollars, £4.2 million of Roubles and £2.6 million of other currencies. Surplus funds are placed on short-term deposit with fl oating interest rates.

During the period £3.8 million held in a trust account as a result of the capital reduction in July 2005, was released leaving £12,000 held in trust.

The venue advances and other loans of £1.0 million due after one year is all due within fi ve years (2007: £nil due after more than fi ve years). The venue loans repayable by cash are measured at fair value using a discounted cash fl ow model. The venue prepayments are held at cost. All venue advances are stated net of allowance for doubtful receivables. The venue advances are denominated primarily in either Euros or US Dollars and are analysed as follows:

2008 2007 £000 £000

Venue loans Denominated in Euros 120 211Denominated in US Dollars 1,380 2,039Denominated in other currencies 403 401 1,903 2,651

Venue prepayments Denominated in US Dollars 506 968 506 968 Total venue loans and prepayments 2,409 3,619


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16 Bank overdraftThe bank overdrafts are all repayable on demand. Of the total borrowing, £4.7 million (2007: £11.3 million) is denominated in Euros and £1.8 million (2007: £2.0 million) is denominated in US Dollars. The borrowings are arranged at fl oating interest rates, thus exposing the Group to interest rate risk. The Euro and US Dollar borrowings are taken out to act as a partial hedge against the UK monetary assets in those currencies.

The overdraft has been secured by a guarantee between ITE Group plc, ITE Exhibitions & Conferences Limited, International Trade and Exhibitions (JV) Limited, ITE Overseas Limited, ITE Enterprises Limited, ITE Moda Limited and ITE Moda Footwear Limited and a charge over the account of International Trade and Exhibitions (JV) Limited. The average interest rate on the bank overdrafts approximates 4.9% per annum (2007: 4.3%) and is determined by reference to base rate plus 0.5%. The Directors estimate the carrying value of the overdrafts approximates their fair value.

At 30 September 2008 the Group had £13.4 million (2007: £6.7 million) of gross undrawn committed borrowing facilities.

17 Trade and other payables 2007 2008 Restated £000 £000

Trade payables 1,385 900Taxation and social security 3,335 4,772Other payables 3,416 1,367Accruals 4,938 6,287Deferred consideration 4,970 – 18,044 13,326 Deferred income 64,131 46,157

Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The Directors consider that the carrying value of trade payables approximates their fair value.

18 Provisions National Insurance on share Contingent options Leases consideration Total £000 £000 £000 £000

At 1 October 2007 740 617 221 1,578Charged/(credited) to income statement 140 (52) – 88Utilised in the period (528) – – (528)Payments in the year – – (221) (221)At 30 September 2008 352 565 – 917

Included in current liabilities 264Included in non-current liabilities 653 917

The provision for National Insurance on share options is calculated by reference to the employer’s National Insurance cost on the potential gain based on the diff erence between the exercise price and share price for those share options where the share price exceeds the exercise price at 30 September 2008.

The lease provision relates to the spreading of a reduced rent period over the full period of the lease.


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19 Deferred tax

Accelerated tax Tax Provisions Share-based Repatriation depreciation Intangibles losses and accruals Hedges payments of profi t Total £000 £000 £000 £000 £000 £000 £000 £000

At 1 October 2006 (878) (1,177) – 466 – 1,557 (91) (123)Charge to income 236 268 – 121 184 (676) 13 146Charge to equity – – – – (13) 9 – (4) At 1 October 2007 (642) (909) – 587 171 890 (78) 19Transfers (106) 106 – – – – – –Charge to income (120) 590 105 501 (183) (46) (801) 46Charge to equity – – – – 13 (259) – (246)Transfer to tax creditor – – – – – (185) – (185)Acquisition of subsidiary – (1,657) – – – – – (1,657)At 30 September 2008 (868) (1,870) 105 1,088 – 400 (879) (2,023)

Certain deferred tax assets and liabilities have been off set in the above table. The following is the analysis of deferred tax balances for fi nancial reporting purposes:

2008 2007 £000 £000

Deferred tax liabilities (3,617) (1,671)Deferred tax assets 1,594 1,690 (2,023) 19

At the balance sheet date, the Group has unused tax losses of £1.5 million (2007: £1.3 million) available for off set against future profi ts. No deferred tax asset has been recognised in respect of these losses in either year due to the unpredictability of future profi t streams. These losses may be carried forward indefi nitely.

At the balance sheet date, the aggregate amount of temporary diff erences associated with undistributed earnings of subsidiaries for which deferred tax liabilities have not been recognised was £3.7 million (2007: £3.1 million). No liability has been recognised in respect of these diff erences because the Group is in a position to control the timing of the reversal of the temporary diff erences and it is probable that such diff erences will not reverse in the foreseeable future.

20 Financial instrumentsFinancial assets and liabilitiesDetails of the accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised in respect of each class of fi nancial asset and fi nancial liability are disclosed in the accounting policies note on pages 63 to 65.

Categories of fi nancial assets and liabilitiesFinancial assets and liabilities are classifi ed according to the following categories in the table below. The amounts disclosed are the contractual undiscounted net cash fl ows.

Financial assets 2008 2007 £000 £000

Cash and cash equivalents 35,709 39,963Loans and receivables: Trade receivables 35,416 26,819 Other receivables 747 1,954 Venue loans 1,903 2,651Derivative fi nancial instruments – 48 73,775 71,435


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20 Financial instruments (continued)Financial liabilities 2008 2007 £000 £000

Bank overdraft 6,568 13,306Amortised cost: Trade payables 1,385 900 Other payables 3,416 1,367 Deferred consideration 4,970 –Put option liability 3,269 –Derivative fi nancial instruments 988 659 20,596 16,232

Maturity of fi nancial instruments In 2008 all fi nancial liabilities except the put option have a maturity of one year or less. The put option is an open option with no fi xed maturity date.

In 2007 all fi nancial liabilities, except derivative fi nancial instruments, had a maturity of one year or less. Out of the total of £0.7 million of derivative fi nancial liabilities £0.6 million had a maturity of one year or less and £0.1 million had a maturity of one to two years.

The Directors consider that the carrying amounts of fi nancial assets and liabilities recorded at amortised cost in the fi nancial statements approximate to their fair value due to the short maturity of the instruments.

Derivative assets 2008 2008 2007 2007 x000 £000 b000 £000 Contractual Fair Contractual Fair amounts value amounts value

Cash fl ow hedges: Currency forward plus contracts – – 47,000 48 Derivative liabilities 2008 2008 2007 2007 x000 £000 b000 £000 Contractual Fair Contractual Fair amounts value amounts value

Cash fl ow hedges: Currency forward plus contracts 11,000 988 47,000 659

The Group seeks to minimise the eff ects of foreign currency risks by using derivative fi nancial instruments to hedge the risk exposures. The use of fi nancial derivatives is governed by the Group’s policies approved by the Board. Compliance with policies and exposure limits is reviewed by the Board on a continuous basis. The Group does not enter into fi nancial instruments, including derivative fi nancial instruments, for speculative purposes.

Financial risk managementIn the course of its business, the Group is exposed to a number of fi nancial risks: market risk (including foreign currency and interest rate), credit risk, liquidity risk and capital risk. This note presents the Group’s exposure to each of the above risks. The Group’s objectives, policies and processes for measuring and managing risks can be found in the Business review on pages 28 to 29.

The Board has overall responsibility for the establishment and oversight of the Group’s risk management framework. The Board has put in place policies that have been established to identify and analyse risks faced by the Group, to set appropriate risk limits and controls and to monitor risks and adherence to limits.


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Market riskMarket risk is the risk that changes in foreign exchange rates and interest rates will aff ect the Group’s income or the value of its holdings of fi nancial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.

The Group’s activities expose it primarily to the fi nancial risks of changes in foreign currency exchange rates and interest rates. The Group enters into derivative fi nancial instruments to manage its exposure to foreign currency risk. Market risk exposures are measured using sensitivity analysis.

Foreign currency risk managementThe Group undertakes certain transactions denominated in foreign currencies, hence, exposures to exchange rate fl uctuations arise. Exchange rate exposures are managed within approved policy parameters utilising forward-plus or forward foreign exchange contracts.

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at the reporting date are as follows:

Financial assets 2008 2007 £000 £000

EUR 44,972 25,099GBP 12,136 37,787USD 4,205 5,371Other 12,462 3,178 73,775 71,435

Financial liabilities 2008 2007 £000 £000

EUR 8,793 11,319GBP 5,926 2,926USD 5,877 1,987 20,596 16,232

Foreign currency sensitivity analysisThe sensitivity analysis below is based on a 10% appreciation/depreciation of the Group’s signifi cant currencies against Sterling, applied to the net monetary assets or liabilities of the Group that are not denominated in the functional currency of the operating unit involved.

2008£000 USD EUR Other

Monetary assets 4,205 44,972 12,462Monetary liabilities (5,877) (8,793) –Net monetary assets/(liabilities) (1,672) 36,179 12,462

Currency impactProfi t before tax gain/(loss) 10% appreciation (167) 3,617 1,24610% depreciation 167 (3,617) (1,246)


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20 Financial instruments (continued)Foreign currency sensitivity analysis (continued)

2007£000 USD EUR Other

Monetary assets 5,371 25,099 3,178Monetary liabilities (1,987) (11,319) –Net monetary assets 3,384 13,780 3,178

Currency impactProfi t before tax gain/(loss) 10% appreciation 338 1,378 31810% depreciation (338) (1,378) (318)

The following signifi cant exchange rates versus Sterling applied during the year and in the prior year:

Average Reporting date 2008 2007 2008 2007

EUR 1.31 1.48 1.26 1.43USD 1.97 1.98 1.82 2.02 Forward foreign exchange contractsThe Group utilises currency derivatives to hedge signifi cant highly probable forecast transactions and cash fl ows. During the year the Group has been party to foreign currency forward-plus contracts in the management of its exchange rate exposures to highly probable forecast Euro currency receipts. The instruments purchased are denominated in Euros.

Under the forward-plus contract, the Group has a right but not an obligation, to sell Euros for Sterling at a specifi ed strike rate at specifi ed dates. However, if the spot rate is at or below the specifi ed barrier rate on any business day during the barrier period the right to sell Euros becomes an obligation, at the specifi ed strike rate.

As at 30 September 2008 the notional amounts of outstanding foreign currency forward-plus contracts that the Group has committed to amounted to v11 million. These arrangements are designed to address signifi cant exchange exposures for the next six months and are renewed on a revolving basis as required, subject to not committing the Group to less than six months or more than 18 months in the future.

At 30 September 2008, the fair value of these derivatives is estimated to be a liability of approximately £1.0 million (2007: £0.6 million). These amounts are based on market valuations. The fair value of currency derivatives that are designated and eff ective as cash fl ow hedges amounting to £nil (2007: £50,000) has been deferred in equity. Changes in the fair value of currency derivatives of £3.3 million (2007: £0.6 million) arising where they are no longer designated as eff ective hedges have been recorded in the income statement.

The Group has taken out foreign currency overdrafts in Euros and US Dollars to act as a natural hedge against certain currency trade receivable balances. These borrowings have not been designated as hedging instruments by management. All foreign exchange movements on these borrowings and trade receivables are recognised directly in the income statement.

Since the year end the Group has taken out forward contracts to sell v26.8 million into Sterling between April 2009 and September 2009 at an average forward rate of v1.27 to £1. These forward contracts will be designated as hedging instruments against highly probable forecast Euro sales and as such any changes in their fair value will be recorded in equity.

Interest rate risk managementAs the Group has no signifi cant interest-bearing assets, other than cash, the Group’s income and operating cash fl ows are substantially independent of changes in market interest rates. The Group is exposed to interest rate risk through its borrowings at fl oating interest rates. This risk is managed by the Group by maintaining an appropriate level of fl oating interest rate borrowings. The Group’s exposures to interest rates on fi nancial assets and fi nancial liabilities are detailed in the liquidity risk section of this note.


83


Interest structure of fi nancial liabilities 2008 2007 £000 £000

Financial liabilities at variable rates: Bank overdraft 6,568 13,306

The following average interest rates applied during the year and in the prior year: Bank overdraft 2008 2007 % %

EUR 5.6 4.1USD 4.5 5.4

Average interest rate applicable to cash balances were 5.4% in 2008 and 5.3% in 2007.

Interest rate sensitivity analysisThe sensitivity analysis below has been determined based on the exposure to interest rates for fi nancial assets and fi nancial liabilities at the balance sheet date. With all other variables held constant the table below demonstrates the sensitivity to a 1% change in interest rates applied to the major currencies of net variable rate asset/liabilities. 1% is the sensitivity rate that represents management’s assessment of the reasonably possible change in interest rates.

USD denominated EUR denominated GBP denominated Other £000 2008 2007 2008 2007 2008 2007 2008 2007

Cash and cash equivalents 773 1,282 18,466 3,545 9,626 33,900 6,844 1,235Bank overdraft (1,841) (1,987) (4,727) (11,319) – – – –Net variable rate (liabilities)/assets (1,068) (705) 13,739 (7,774) 9,626 33,900 6,844 1,235 USD denominated EUR denominated GBP denominated Other 2008 2007 2008 2007 2008 2007 2008 2007

Profi t before tax – (loss)/gain + 1% change in interest rates (11) (7) 137 (78) 96 339 68 12 + 1% change in interest rates 11 7 (137) 78 (96) (339) (68) (12) Credit risk managementCredit risk arises because a counterparty may fail to perform its contractual obligations. The Group’s principal fi nancial assets are cash and cash equivalents, trade and other receivables, venue advances and derivative fi nancial instruments. These represent the Group’s maximum exposure to credit risk.

The Group’s credit risk is primarily attributable to its trade and other receivables. The Group has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of fi nancial loss from defaults. The Group’s objective is to ensure all customers have paid before any service is provided to them. The concentration of credit risk is limited due to the customer base being large and unrelated.

The ageing profi le of the Group’s trade receivables and the details of the Group’s allowances for doubtful receivables can be seen overleaf.

The credit risk on liquid funds and derivative fi nancial instruments arises due to where the liquid funds are held. The territories in which ITE operates do not always have banks with high credit ratings assigned by international credit rating agencies such as Moody’s and Fitch. The Group aims to minimise the exposure to credit risk by minimising the level of cash held in such banks. The Group’s exposure and credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved fi nancial institutions.


84


20 Financial instruments (continued)Credit rating of fi nancial assets (excluding loans and receivables and derivative assets) 2008 2007 £000 £000

Investments grade A and above 29,667 35,473Investments grade B and above 3,099 1,385Investments grade C or below or not rated 2,943 3,105 35,709 39,963

The source of the credit ratings is Moody’s and Fitch.

Ageing profi le of trade receivables Show start date Contract terms 2008 2007 2008 2007 £000 £000 £000 £000

Not past due 34,475 25,259 24,751 17,306Past due 1-30 days 419 1,096 6,086 5,654Past due 31-60 days 17 17 1,949 1,639Past due 61-90 days 39 123 1,189 1,227Past due 91-120 days 138 41 1,055 672Past due more than 120 days 328 283 386 321 35,416 26,819 35,416 26,819

Management review debtors ageing on a contractual basis and also based on when an event has been held. The Group raise invoices on events using stage payments. Any overdue amounts, after the stage payment due date, are reviewed and chased. Management also review the debts due based on when an event has taken place, as this is typically when the service is provided. Both measures are included in the table above as both are used by management to manage outstanding debts.

The trade receivables amounts presented in the Balance Sheet are net of allowances for doubtful receivables, estimated by the Group’s management based on prior experience, specifi c credit issues and their assessment of the current economic environment. Trade receivables consist of a large number of customers spread across diverse industries and geographical areas and the Group’s exposure to credit risk is infl uenced mainly by the individual characteristics of each customer. The demographics of the Group’s customer base, including default risk of the industry and country in which the customers operate, has less of an infl uence on credit risk.

The Group establishes an allowance for doubtful debts that represents its estimate of incurred losses in respect of trade receivables when there is objective evidence that the debt will not be collected in full. The allowance is recognised and measured as the diff erence between the asset’s carrying amount and the present value of future cash fl ows, where material discounted at the eff ective interest rate computed at initial recognition. The main component of this allowance is a specifi c loss component that relates to individually signifi cant exposure on shows which have taken place but the debt has not been collected in full. This allowance is determined by reference to the specifi c circumstances of each show and past experience.


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The details of the movement in the allowance for doubtful receivables are shown below.

Allowance for doubtful receivables 2008 2007 £000 £000

At 1 October 175 416Allowances made in the period 251 115Amounts used and reversal of unused amounts (149) (364)Foreign exchange 18 8 295 175

Liquidity risk managementLiquidity risk is the risk that the Group will not be able to meet its obligations as they fall due. Such risk may result from inadequate market depth or disruption or refi nancing problems. Ultimate responsibility for liquidity risk management rests with the Board of Directors. They have built an appropriate liquidity risk management framework for the management of the Group’s short, medium and long-term funding and liquidity management requirements.

The Group manages liquidity risk by ensuring continuity of funding for operational needs through cash deposits and debt facilities as appropriate.

Capital risk managementThe Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising the return to stakeholders through the optimisation of the debt and equity balance. The capital structure of the Group consists of cash and cash equivalents, bank overdraft, which is disclosed in note 16 and equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings as disclosed in notes 21 to 22.

21 Share capital 2008 2007 £000 £000

Authorised 375,000,000 ordinary shares of 1p each (2007: 375,000,000) 3,750 3,750Allotted and fully-paid 247,907,902 ordinary shares of 1p each (2007: 250,313,994) 2,479 2,503

During the year, the Company allotted 3,029,146 (2007: 545,353) ordinary shares of 1p each pursuant to the exercise of share options. 10,347 ordinary shares were issued in respect of Directors remuneration (2007: 24,451). The total consideration for the shares issued was £1.8 million (2007: £178,864).

As detailed in note 22, the Company purchased 5,445,585 shares at a cost of £8.1 million to be held in Treasury during the period. The Company also cancelled all of the 5,445,585 shares which were purchased in the period.

The Company has one class of ordinary shares which carry no right to fi xed income.


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22 Reserves Share Capital premium Merger redemption ESOT Retained Treasury Translation Hedge account reserve reserve reserve earnings shares reserve reserve Total £000 £000 £000 £000 £000 £000 £000 £000 £000

1 October 2006 698 2,746 291 (3,016) 40,555 (1,142) 555 334 41,021Exercise of options 138 – – 2,419 208 – – – 2,765Net profi t for the year – – – – 22,978 – – – 22,978Dividends paid – – – – (9,634) – – – (9,634)Loss on foreign currency translation of overseas operations – – – – – – (62) – (62)Share-based payments – – – – 1,550 – – – 1,550Shares issued for remuneration 35 – – – – – – – 35Tax on share options – – – – 1,921 – – – 1,921Increase in fair value of hedging derivatives – – – – – – – 331 331Transfer to income – – – – – – – (614) (614)Capital reduction – – 112 – – – – – 112Own shares held in treasury – – – – (18,648) 1,142 – – (17,506)30 September 2007 871 2,746 403 (597) 38,930 – 493 51 42,897

Share Capital premium Merger redemption ESOT Retained Put option Translation Hedge account reserve reserve reserve earnings reserve reserve reserve Total £000 £000 £000 £000 £000 £000 £000 £000 £000

1 October 2007 871 2,746 403 (597) 38,930 – 493 51 42,897Exercise of options 1,780 – – 211 (190) – – – 1,801Net profi t for the year – – – – 23,479 – – – 23,479Dividends paid – – – – (12,050) – – – (12,050)Gain on foreign currency translation of overseas operations – – – – – – 2,921 – 2,921Share-based payments – – – – 931 – – – 931Shares issued for remuneration 18 – – – – – – – 18Deferred tax charged to equity – – – – (246) – – – (246)Decrease in fair value of hedging derivatives – – – – – – – (51) (51)Transfer to income – – 54 – (8,078) – – – (8,024)Purchase of shares – – – (8,004) – – – – (8,004)Put option on acquisition of subsidiary – – – – – (3,269) – – (3,269)30 September 2008 2,669 2,746 457 (8,390) 42,776 (3,269) 3,414 – 40,403

At the Extraordinary General Meeting held on 17 November 1998, shareholders approved the establishment of the ITE Group Employee Share Ownership Trust (ESOT). The terms of the ESOT allow the trustees to transfer shares to employees who exercise options under the Company’s Share Option Schemes, to grant options to employees and to accumulate shares by buying in the market or subscribing for shares at market value. The ESOT is capable of holding a maximum of 5% of the Company’s issued ordinary share capital. The ESOT reserve arises in connection with the Employee Share Ownership Trust. The amount of the reserve represents the deduction in arriving at shareholders funds for the consideration paid for the Company’s shares purchased by the Trust which had not vested unconditionally in employees at the balance sheet date.

The ESOT held 6,967,783 shares in ITE Group plc at 30 September 2008 (2007: 1,854,875 shares). During the year 1,484,000 share options were granted against ESOT held shares. The market value of the ordinary shares held by the ESOT at 30 September 2008 was £8.4 million (2007: £3.2 million).


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The Company has agreed to make available to the ESOT an interest-free loan of up to £10.0 million for the purpose of buying shares. At 30 September 2008, the amount of the loan drawn down was £2.0 million. The ITE Group plc Company only profi t and loss account and balance sheet include the results of the ESOT for the year ended 30 September 2008.

The trustees have waived their current and future rights to all dividend entitlement on the shares held by the ESOT. 595,981 options were exercised by ESOT during the year. Of the total shares held by the ESOT, all are under option as at 30 September 2008. Details of the options in issue and their exercise dates can be seen at note 25 to the accounts.

The Company purchased 5,445,585 shares at a cost of £8.1 million to be held in Treasury during the period. These were all cancelled during the year.

23 Minority interests 2008 2007 £000 £000

1 October – 19Minority interest arising on purchase of Primexpo North West LLC 1,217 –Loss on ordinary activities after taxation (23) (19)30 September 1,194 –

24 Operating lease arrangementsThe Group is a lessee for these arrangements. Annual commitments under non-cancellable operating leases are as follows:

2008 2007 £000 £000

Lease payments under operating leases recognised as an expense in the year: Land and buildings 2,227 1,431Venues 20,346 18,505

At 30 September 2008 the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2008 2008 2007 2007 Land and Land and buildings Venues buildings Venues £000 £000 £000 £000

Within one year 2,763 8,244 1,293 6,108Between two and fi ve years 2,241 – 3,023 –After fi ve years 2,530 – 2,977 – 7,534 8,244 7,293 6,108

Operating lease payments for land and buildings represent rentals payable by the Group for certain of its offi ce properties. Leases are negotiated for an average term of two years. Payments for venues represent the non-cancellable amount of contracted venue agreements for future events.

The Group also earned rental income of £0.3 million during the year (2007: £0.2 million).


88


25 Share-based paymentsThe Company operate two share option schemes.

Share option plansThe Company operates a share option plan for all employees of the Group. Options are exercisable at a price equal to the average quoted market price of the Company’s share on the date of grant. The vesting period is either three or fi ve years and are exercisable up to ten years from granting. The options are forfeited if the employee leaves the Group before the options vest.

Performance share plansThe Company operated a Performance Share Plan (“PSP”) for executives and staff . Awards under the PSP are at an exercise value of either 1p or nil. Awards can be made to an employee over shares up to a maximum of 100% of base salary each year based on market value. The vesting period is three years and awards are exercisable up to ten years from the date of grant. For conditional awards the vesting is automatic on the satisfaction of performance targets. The options are forfeited if the employee leaves the Group before the options vest. The awards are also subject to a performance target. Further details of the performance targets can be found in the Report on remuneration.

Details of the share options outstanding as at 30 September 2008 are as follows: 2008 2008 2007 2007 Weighted Weighted Number average Number average of share exercise of share exercise options price (p) options price (p)

Share option plans Outstanding at beginning of period 4,545,450 58.5 11,320,500 51.0Granted during the period 1,484,000 146.0 – –Lapsed during the period (43,500) (127.2) (528,500) (69.5)Exercised during the period (2,834,500) (64.3) (6,246,550) (44.1) 3,151,450 4,545,450

Performance share plans Outstanding at beginning of period 1,996,595 0.2 3,778,625 0.4Granted during the period 1,269,919 1.0 100,000 0.7Lapsed during the period (79,118) – (66,000) –Exercised during the period (790,627) (0.3) (1,816,030) (1.0) 2,396,769 1,996,595

The weighted average share price at the date of exercise for share options exercised during the period was 162p. The options outstanding at 30 September 2008 had a weighted average exercise price of 64p, and a weighted average remaining contractual life of 451 days. In 2008, Performance Share Plan options were granted on 11 January 2008. The aggregate of the estimated fair value of these options is £1.4 million. Performance Share Plan options were also granted to key management on 26 May 2008 and 28 July 2008. The aggregate of the estimated value of the options granted on those dates is £0.2 million.


89


The inputs into the Black-Scholes model for the instruments issued during the year are as follows:

2008 2008 2007 Performance Share options Performance share plan plan share plan

Weighted average share price 148p – 180p 140p 172pWeighted average exercise price 1p 146p 0pExpected volatility 28.7% – 31.2% 29.4% 0%Expected life 3 years 6 years 3 yearsRisk free rate 4.30% – 4.96% 4.4% n/aDividend yield 2.67% – 3.00% 3.2% 2.03%

The Group recognised a total expense of £0.9 million (2007: £1.6 million) related to equity-settled share-based payment arrangements.

26 Related party transactionsTransactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note. Transactions between the Group and its associates, where relevant, are disclosed below.

Trading transactionsIn Kazakhstan, ITECA, a Group subsidiary, has transacted with Datacom and Saban Holdings for the provision of web systems and offi ce rental respectively. Edward Strachan, a Group Director, is a signifi cant shareholder of Datacom and Saban Holdings. In total, the services charged to ITECA were £62,000 (2007: £57,000).

In St Petersburg, Primexpo, a Group subsidiary, has transacted with Cavalry House for the provision of offi ce rental. Edward Strachan, a Group Director, is a signifi cant shareholder of Cavalry House. In total, the services charged to Primexpo were £130,000 (2007: £114,000).

During the year consultancy fees of £320,000 (2007: £303,000) and a bonus payment of £303,000 (2007: £390,000) was paid to Kyzyl Tan Consultants Limited (“Kyzyl Tan”), of which Edward Strachan is a signifi cant shareholder. Kyzyl Tan was also paid a living away from home allowance of £29,000 (2007: £46,000). These payments were made under a contract for Kyzyl Tan to provide the services of Edward Strachan to the Group.

Remuneration of key management personnelThe remuneration of Directors, who are the key management personnel of the Group, is set out below in aggregate for each of the categories specifi ed in IAS 24 Related party disclosures. Further information about the remuneration of individual Directors is provided in the audited part of the Report on remuneration on pages 47 to 49.

2008 2007 £000 £000

Emoluments 1,723 2,736Share-based payment 187 548 1,910 3,284

90


Independent auditors’ report

We have audited the parent company fi nancial statements of ITE Group plc for the year ended 30 September 2008 which comprise the Company Balance Sheet and the related notes 1 to 10. These parent company fi nancial statements have been prepared under the accounting policies set out therein.

We have reported separately on the Group fi nancial statements of ITE Group plc for the year ended 30 September 2008 and on the information in the Report on remuneration that is described as having been audited.

This report is made solely to the Company’s members, as a body, in accordance with section 235 of the Companies Act 1985. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of Directors and auditorsThe Directors’ responsibilities for preparing the Annual Report and the parent company fi nancial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the Statement of Directors’ Responsibilities.

Our responsibility is to audit the parent company fi nancial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland).

We report to you our opinion as to whether the parent company fi nancial statements give a true and fair view and whether the parent company fi nancial statements have been properly prepared in accordance with the Companies Act 1985. We also report to you whether in our opinion the information given in the Directors’ Report is consistent with the parent company fi nancial statements.

In addition we report to you if, in our opinion, the Company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specifi ed by law regarding Directors’ remuneration and other transactions is not disclosed.

We read the other information contained in the Annual Report as described in the contents section and consider whether it is consistent with the audited parent company fi nancial statements. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the parent company fi nancial statements. Our responsibilities do not extend to any further information outside the Annual Report.

Basis of audit opinionWe conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the parent company fi nancial statements. It also includes an assessment of the signifi cant estimates and judgements made by the Directors in the preparation of the parent company fi nancial statements, and of whether the accounting policies are appropriate to the Company’s circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with suffi cient evidence to give reasonable assurance that the parent company fi nancial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the parent company fi nancial statements.

OpinionIn our opinion:

the parent company fi nancial statements give a true and fair view, in accordance with United Kingdom Generally Accepted >Accounting Practice, of the state of the Company’s aff airs as at 30 September 2008;the parent company fi nancial statements have been properly prepared in accordance with the Companies Act 1985; and >the information given in the Directors’ Report is consistent with the parent company fi nancial statements. >

Deloitte LLPChartered Accountants and Registered Auditors London, United Kingdom1 December 2008


91


Company balance sheet30 September 2008

2008 2007 Notes £000 £000

Fixed assets Investments in subsidiaries 5 3,208 2,699Intangible assets 5 28 29 3,236 2,728Current assets Debtors due within one year 6 29,983 760Cash at bank and in hand 6,810 27,065Deferred tax asset 7 60 – 36,853 27,825Creditors: amounts falling due within one year 8 (15,607) (10,521)Net current assets 21,246 17,304

Total assets less current liabilities 24,482 20,032

Net assets 24,482 20,032

Capital and reserves Called up share capital 9 2,479 2,503Share premium account 10 2,669 871Merger reserve 10 2,746 2,746Capital redemption reserve 10 457 403ESOT reserve 10 (8,390) (597)Profi t and loss account 10 24,521 14,106Shareholders’ funds 24,482 20,032 The accounts on pages 91 to 96 were approved by the Board of Directors and signed on its behalf by:

Russell Taylor Neil Jones Chief Executive Offi cer Finance Director1 December 2008

92


Notes

1 Basis of accountingThe accounts have been prepared under the historical cost convention and in accordance with applicable United Kingdom law and accounting standards and have been applied consistently.

InvestmentsFixed asset investments are shown at cost less provision for any impairment.

Intangible assetsTrademarks are measured initially at purchase cost and have a defi nite useful life and are carried at cost less accumulated amortisation. Amortisation is calculated using the straight line method to allocate the cost over their estimated useful life. The estimated useful lives are up to 20 years.

ProvisionsProvisions for onerous contracts are recognised when the Company has a present legal obligation as a result of past events, it is probable that an outfl ow of resources will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Financial instrumentsFinancial assets and fi nancial liabilities are recognised on the Company’s balance sheet when the Company becomes a party to the contractual provisions of the instrument.

Trade debtors and creditorsTrade debtors and creditors are stated at their nominal value. Trade debtors are reduced by appropriate allowances for estimated irrecoverable amounts.

Bank borrowingsBank overdrafts are recorded at the proceeds received, net of direct issue costs. Finance charges are accounted for on an accrual basis to profi t or loss.

TaxationCurrent tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is recognised in respect of all timing diff erences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. Timing diff erences are diff erences between the Group’s taxable profi ts and its results as stated in the fi nancial statements that arise from the inclusion of gains and losses in tax assessments in periods diff erent from those in which they are recognised in the fi nancial statements.

A net deferred tax asset is regarded as recoverable and therefore recognised only to the extent that, on the basis of all available evidence, it can be regarded as more likely than not that there will be suitable taxable profi ts from which the future reversal of the underlying timing diff erences can be deducted.

Deferred tax is not recognised when fi xed assets are revalued unless by the balance sheet date there is a binding agreement to sell the revalued assets and the gain or loss expected to arise on sale has been recognised in the fi nancial statements. Neither is deferred tax recognised when fi xed assets are sold and it is more likely than not that the taxable gain will be rolled over, being charged to tax only if and when the replacement assets are sold.

Deferred tax is measured at the average tax rates that are expected to apply in the periods in which the timing diff erences are expected to reverse, based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date.


93


Foreign currenciesTransactions in foreign currencies are recorded at the rate of exchange at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated at the rates of exchange prevailing at that date. Non-monetary assets and liabilities are translated at the rate prevailing at the date the fair value was determined. Gains and losses arising on retranslation of monetary assets are included in profi t or loss for the period.

Employee Share TrustThe fi nancial statements include the assets and liabilities of the Employee Share Trust (‘ESOT’). Shares in the Company held by the ESOT have been valued at cost and are held in equity. The costs of administration of the ESOT are written off to profi t or loss as incurred.

Where such shares are subsequently sold, any net consideration received is included in equity attributable to the Company’s equity holders.

Share-based paymentsThe Company issues equity-settled share-based payments to certain employees. These are measured at fair value (excluding the eff ect of non-market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share based payments is expensed on a straight-line basis over the vesting period, based on the Company’s estimate of shares that will eventually vest and adjusted for the eff ect of non-market-based vesting conditions.

Fair value is measured using a Black-Scholes model. The expected life used in the model has been adjusted, for the eff ects of non-transferability, exercise restrictions and behavioural considerations based on management’s best estimate.

2 Profi t for the yearThe profi t after tax for the year ended 30 September 2008 was £29.8 million (2007: £13.7 million). As permitted by section 230 of the Companies Act 1985, no separate profi t and loss account is presented in respect of the Company.

The audit fee for the Company was £42,000 (2007: £42,000).

3 Staff costsa) Number of employeesThe average number of persons (including Directors) employed by the Company during the year was as follows:

Number Number 2008 2007

Directors 6 7

b) Employee costsTheir aggregate remuneration comprised:

2008 2007 £000 £000

Wages and salaries 1,723 2,379Social security costs 224 223Share based payments 187 1,455Gross total 2,134 4,057

Highest paid Director 699 901

94


Notescontinued

4 Dividends 2008 2007 £000 £000

Amounts recognised as distributions to equity holders in the year: Final dividend for the year ended 30 September 2007 of 3.2p (2006: 2.5p) per ordinary share 8,045 6,331Interim dividend for the year ended 30 September 2008 of 1.6p (2007: 1.3p) per ordinary share 4,005 3,303 12,050 9,634

Proposed fi nal dividend for the year ended 30 September 2008 of 3.7p (2007: 3.2p) per ordinary share 8,915 7,983

The proposed fi nal dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these fi nancial statements.

Under the terms of the trust deed dated 20 October 1998, the ITE Group Employees Share Trust, which holds 6,967,783 (2007: 1,854,875) ordinary shares representing 3% of the Company’s called-up ordinary share capital, has agreed to waive all dividends due to it.

5 Fixed assetsInvestments in subsidiariesThe Company has investments in the following subsidiary undertakings and associates which principally aff ected the results or net assets of the Group. To avoid a statement of excessive length, details of investments which are not signifi cant have been omitted. The principal activity of all the companies listed is the organisation of exhibitions and conferences, except RAS Holdings Limited and RAS Publishing Limited which publish trade magazines.

Country of incorporation or principal business address Eff ective holding %

Subsidiary undertakings International Trade and Exhibitions (JV) Limited England Ordinary shares 100ITE Exhibitions & Conferences Limited England Ordinary shares 100IEG International Limited+ England Ordinary shares 100Intermedia Exhibitions and Conferences Limited England Ordinary shares 100IEG-Gima International Exhibition Group GmbH & Co KG Germany Ordinary shares 100International Trade and Exhibitions (ITE) Worldwide B.V. Netherlands Ordinary shares 100E Uluslararasi Fuar Tantitim Hizmetleri A.S. Turkey Ordinary shares 100Premier Expo Ukraine Ordinary shares 100ITE LLC Russia Ordinary shares 100ITE Expo LLC Russia Ordinary shares 100OOO Primexpo Russia Ordinary shares 100ITECA Kazakhstan Ordinary shares 100Iteca Caspian LLC Azerbaijan Ordinary shares 100ITE Uzbekistan Uzbekistan Ordinary shares 100ITE Moda Limited England Ordinary shares 100ITE Enterprises Limited+ England Ordinary shares 100RAS Holdings Limited England Ordinary shares 100RAS Publishing Limited England Ordinary shares 100ITE Moda Footwear Ltd England Ordinary shares 100ITE Footwear Limited England Ordinary shares 75ITE Exhibitions BV Netherlands Ordinary shares 100ITE Exhibitions Iberica SL Spain Ordinary shares 100ITE Asia Pacifi c SDN BHD Malaysia Ordinary shares 100ITE Gulf FZ LLC United Arab Emirates Ordinary shares 100Primexpo North West LLC Russia Ordinary shares 75Siberian Fairs LLC Russia Ordinary shares 100

Associates Istanbul Fuarcilik AS Turkey Ordinary shares 50

+ Held directly by ITE Group plc


95


Subsidiary undertakings Capital Shares contribution Loans Total £000 £000 £000 £000

Cost 1 October 2007 10,181 1,699 23,574 35,454Additions – 509 – 50930 September 2008 10,181 2,208 23,574 35,963

Provision for impairment 1 October 2007 and 30 September 2008 9,181 – 23,574 32,755

Net book value 30 September 2008 1,000 2,208 – 3,20830 September 2007 1,000 1,699 – 2,699

Intangible assets Trademarks £000

Cost 1 October 2007 34Additions 130 September 2008 35

Amortisation 1 October 2007 5Charge in the year 230 September 2008 7

Net book value 30 September 2008 2830 September 2007 29

6 Debtors due within one year 2008 2007 £000 £000

Amounts owed by Group undertakings 28,846 219Venue advances and other loans 476 419Prepayments and accrued income 181 122Corporation tax – Group relief 480 – 29,983 760

The amounts owed by Group undertakings are payable on demand and bear no interest.

7 Deferred tax Share based payments £000

1 October 2007 and 1 October 2006 –Charged to income 60Charged to equity –30 September 2008 60

At the balance sheet date the Company has unused tax losses of £800,000 (2007: £800,000) available for off set against future profi ts. No deferred tax asset has been recognised in respect of these losses due to the unpredictability of future profi t streams.

96


Notescontinued

8 Trade and other creditors 2008 2007 £000 £000

Amounts owed to Group undertakings 14,920 10,460Accruals 87 61Other creditors 600 – 15,607 10,521

The amounts owed to Group undertakings are payable on demand and bear no interest.

9 Called up share capital 2008 2007 £000 £000

Authorised 375,000,000 ordinary shares of 1p each (2007: 375,000,000) 3,750 3,750

Allotted, called up and fully-paid 247,907,902 ordinary shares of 1p each (2007: 250,313,994) 2,479 2,503

During the year, the Company allotted 3,029,146 (2007: 545,353) ordinary shares of 1p each pursuant to the exercise of share options. 10,347 ordinary shares were issued in respect of Directors’ remuneration (2007: 24,451). The total consideration for the shares issued was £1.8 million (2007: £178,864).

During the year, the Company purchased 5,445,585 shares at a cost of £8.1 million to be held in Treasury during the period, all of which were cancelled in the period.

10 Reserves and reconciliation of equity shareholders’ funds

Share Capital Called up premium Merger redemption ESOT Profi t and share capital account reserve reserve reserve loss account Total £000 £000 £000 £000 £000 £000 £000

1 October 2007 2,503 871 2,746 403 (597) 14,106 20,032Exercise of options 30 1,780 – – 211 – 2,021Net profi t for the year – – – – – 29,808 29,808Dividends paid – – – – – (12,050) (12,050)Loss on exercise of ESOT options – – – – – (196) (196)Share-based payments – 18 – – – 931 949Purchase of shares – – – – (8,004) – (8,004)Capital reduction (54) – – 54 – (8,078) (8,078)30 September 2008 2,479 2,669 2,746 457 (8,390) 24,521 24,482

ITE Group plc is the leading organiser of international trade (business to business) exhibitions and conferences in the sought-after markets of Eastern Europe and Central Asia.

The Company was founded in 1991 and annual revenues now exceed £100 million from a portfolio of over 160 events. ITE has used the experience gained from developing successful events in its core emerging markets to expand operations into other regions with signifi cant growth potential. In 2008, ITE organised events in 24 cities in 15 countries and these events are supported by a network of 22 offi ces worldwide.

The ITE network is a signifi cant asset and the workforce of almost 900 staff produces and promotes its market leading events by delivering a combination of global expertise, local customer service and in-depth market knowledge.

The catwalk at the UK’s leading trade event for the fashion and clothing sector – Moda.

Entertainment at the Yar Restaurant, the host for MIPS’ Gala Dinner.

Russia’s largest trade exhibition, MosBuild.

The Agricultural Outlook Forum at World Food Moscow.

Directors, advisers and other information

Directors Iain Paterson, non-executive Chairman Russell Taylor, Chief Executive Offi cer Neil England, non-executive Director Michael Hartley, non-executive Director Neil Jones, Finance Director Edward Strachan, executive Director Malcolm Wall, non-executive Director

Company Secretary Neil Netto

Registered offi ce ITE Group plc 105 Salusbury Road London, NW6 6RG

Registration number 1927339

Auditors Deloitte LLP London

Solicitors Olswang 90 High Holborn London, WC1V 6XX

Principal bankers Barclays Bank plc 27 Soho Square London, W1D 3QR

Company brokers Numis Securities Limited The London Stock Exchange Building 10 Paternoster Square London, EC4M 7LT

Registrars Capita Registrars Northern House Woodsome Park Fenay Bridge Huddersfi eld West Yorkshire, HD8 OLA

Public relations Financial Dynamics Holborn Gate 26 Southampton Buildings London, WC2A 1PB

Website www.ite-exhibitions.com

Financial calendarFinal dividend 2008 Interim dividend 2009Ex date 11 February 2009 Record date May 2009Record date 13 February 2009 Payment date June 2009Annual General Meeting 27 February 2009Payment date 13 March 2009


97


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ITE Group plc International headquarters105 Salusbury RoadLondon, NW6 6RGTel: +44 (0)20 7596 5000Fax: +44 (0)20 7596 5111E-mail: [email protected]

ITE Group plc Annual Report

Creating marketplaces for business...

2008

ITE would like to thank all those who participated in producing this report, particularly the members of staff for their contributions.

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ite group plc 2008 report 2008.pdf · overview highlights 02 ite group plc annual report 2008 year...

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