REPORT IN ACCORDANCE WITH ART. 28 L.D. 270/1999

REPORT IN ACCORDANCE WITH ART. 28 L.D. 270/1999 MAFLOW S.p.A. in judicial administration MAFLOW POLSKA Sp.zo.o in judicial administration 1

INDEX PREMISE PART ONE OUTLINE OF THE EVENTS 1.1. Maflow S.p.A. s past and background 1.2. Maflow S.p.A. s and Maflow Polska Sp.zo.o. s current situation 1.2.1. Maflow S.p.A. data 1.2.2. Maflow Polska Sp.zo.o. data 1.3. The role of the Maflow S.p.A. Group on the national and international scene. PART TWO MAFLOW S.P.A. OPERATIONS 2.1. From the Company to the Group. 2.2. Sources of information used in reconstructing the company s extraordinary operations. 2.3. Chronology of significant events. 2.3.1. 2004 events. 2.3.2. 2005 events. 2.3.3. 2006 events. 2.3.4. 2007 events. 2.3.5. 2008 events. 2.3.6. 2009 events. PART THREE MAFLOW POLSKA SP.ZO.O. OPERATIONS 3.1. Sources of information used in reconstructing the company s extraordinary operations. 3.2. Chronology of significant events. 3.3.1. 2004 events. 2

3.3.2. 2005 events. 3.3.3. 2006 events. 3.3.4. 2007 events. 3.3.5. 2008 events. 3.3.6. 2009 events. PART FOUR CAUSES OF INSOLVENCY 4.1. Structural and economic causes. 4.2. Balance sheet analysis. 4.2.1. Maflow S.p.A. balance sheet analysis. 4.2.2. Maflow Polska Sp.zo.o. balance sheet analysis. 4.2.3. Balance sheet analysis: Maflow Group Consolidated Profit and Loss Account. 4.2.4. Balance sheet analysis: Maflow Group Consolidated Asset and Liability statement. 4.3. Summary of causes of insolvency. PART FIVE MAFLOW S.P.A. ESTIMATED ASSET STATEMENT 5.1. Objectives and criteria followed. 5.2. Limits of analysis. 5.3. Documents used. 5.4. Maflow S.p.A. asset items. PART SIX MAFLOW POLSKA SP.ZO.O. ESTIMATED ASSET STATEMENT 6.1. Objectives and criteria followed. 6.2. Limits of analysis. 6.3. Documents used. 6.4. Maflow Polska Sp.zo.o asset items. 3

PART SEVEN CONCRETE PROSPECTS OF RESTORING THE ECONOMIC EQUILIBRIUM 7.1. Analysis of concrete prospects of restoring the economic equilibrium of entrepreneurial activities. Art. 27 of L.D. No 270 of 1999. 7.2. The prospects. 7.3. Potential upsides of economic simulation. 7.4. Conclusions. 7.4.1. Maflow S.p.A. program 7.4.2. Maflow Polska Sp.zo.o. program 4

PREMISE With sentence No 260/2009 and 261/2009 of 11 May 2009, published on the same date and registered on the competent Company Registers, the Court of Milan declared, in accordance with art. 3 of L.D. No 270 of 8/7/1999 (new discipline governing the extraordinary administration of large-scale insolvent enterprises), that Maflow S.p.A. and Maflow Polska Sp.zo.o. are insolvent and appointed as Court Commissioners Messrs. Stefano Coen, Francesco Pensato and Vincenzo Sanasi d Arpe. The Board of Commissioners requested, with petition filed respectively on 08/06/2009 and 19/06/2009 that the term to file the report in accordance with art. 28 L.D. No 270/1999 be extended by fifteen days as well as authorisation to file one report for both companies, due to the complexity of Maflow S.p.A. s and Maflow Polska Sp.zo.o. s structure and number of shareholdings. All preparatory and instrumental activities to draw up the report filed here today were completed once the Court of Milan accepted the hereinabove request. The Court Commissioners have drawn up, in accordance with art. 28 of L.D. No 270/99, this report in order to provide a detailed description of the causes of the insolvency and assess whether those conditions set out in art. 27 of said decree, allowing Maflow S.p.A. and Maflow Polska Sp.zo.o. to access the extraordinary administration procedure, exist. Bearing in mind the limited time available to the Court Commissioners, the Maflow S.p.A. and Maflow Polska Sp.zo.o. organisation, diversified due to its geographical dislocation as well as the complexity of those shareholdings held directly and indirectly by Maflow S.p.A. as part of the Group it belongs to, the report, although providing a complete picture of the 5

events in question, may not include some information that could not be acquired by the Board of Commissionaires. Moreover, it should be noted that some of the information contained herein has been provided by Maflow S.p.A. and Maflow Polska Sp.zo.o. administrators, managers, employees and consultants. The Board of Commissioners had to base their assessment on the assumption that said information audited within the time limits and those documents available were true, accurate, correct and complete. In this connection, it is noted that: - as regards Maflow S.p.A. s draft balance sheet as at 31.12.2008, the auditing company KPMG S.p.A. found it impossible to express an opinion; - Maflow Polska Sp.zo.o. s balance sheet as at 31.12.2008 was submitted to the Board of Commissioners as a draft document; - the asset and liability statements and profit and loss accounts provided to the Board of Commissioners to carry out the appropriate analyses, were not certified by the insolvent companies Auditors. Therefore, even significant changes and adjustments, neither known or foreseeable at present, may have to be made. Moreover, it should be noted that as regards the main company operations described herein, the Board of Commissioners reserves the right to carry out the necessary investigations and inform the competent bodies immediately. Assets were estimated according to the information and time available. The estimated value of the insolvent companies assets was not necessarily based on accounting data and, therefore, must only be considered indicative as reasonable and prudent assumptions. In fact, these estimates do not constitute an expert s report on their intrinsic/theoretical value, nor a market value as the Board of Commissioners work does not consider their contractual power, all elements that could have a significant influence on the comments made. The suggestions provided by the Board of Commissioners as to the possibility of restoring the insolvent companies economic equilibrium are based on information obtained from the management, documents prepared by external consultants and other information the Court Commissioners received informally. 6

PART ONE OUTLINE OF THE EVENTS 1.1. Maflow S.p.A. past and background Maflow S.p.A. (former Manuli Automotive Components S.p.A.) was set up by its sole partner Reflexes Finance S.A. with registered office at 23 Val Fleuri, L-1526 Luxembourg, on 23/06/2004, registered by the Notary Mr. Piazza on 23/06/2004, Notary Register No 328987 / File No 8488, and registered on the Milan Company Register on 02/07/2004 at No 04460570965, A.E.R. MI-1749389. The company capital amounted to Euro 120,000.00 (One hundred and twenty thousand) on incorporation. The original corporate purpose, as indicated in the memorandum of association, was defined as follows: The company has as corporate purpose both in Italy and abroad: a) taking on and managing shareholdings in other companies or bodies as well as financing and coordinating those companies or bodies it has shares in for stable investment and not placement purposes excluding activities aimed at the public; b) providing management services consisting in financial planning, company reorganisation, market research, collecting and processing econometric data and information on behalf of the companies it has shareholdings in and third parties. c) marketing, managing and promoting all financial market related assets and services (art.2 subsection 1 and art.1 subsection 4 of Legislative Decree No 415 of 23.7.1996). 7

d) carrying out research into financial markets and in general financial investments and opportunities. Taking on shareholdings involving unlimited liability must be deliberated by the ordinary shareholders meeting. The company shall not underwrite own shares notwithstanding that set out in art. 2357 ter, subsection two, accept own shares as a guarantee as well as issue loans or guarantees to anyone to purchase or underwrite company shares. The company may purchase own shares within those limits provided for in arts. 2357 and 2357 bis of the civil code. Its registered office was originally situated in Milan, at Viale Bianca Maria No25. On setting up the company, the board of directors consisted of a Sole Administrator, in office until the meeting that approved the balance sheet as at 31 December 2006: Name Maurizio Salom Post Sole Administrator On setting up the Company, the Board of Auditors consisted of 3 standing auditors and 2 substitutive auditors, all in office until the meeting that approved the balance sheet as at 31 December 2006, represented by: Name Guido Riccardi Alberto Pession Carlo Galli Giovanni Tedeschi Monica Antonia Castiglioni Post Chairman Standing auditor Standing auditor Substitute auditor Substitute auditor 1.2. Maflow S.p.A. s and Maflow Polska Sp.zo.o. s current situation Having explained the subject of the activities, it is best to complete the introductory profile by analysing the company structures. 1.2.1. Maflow S.p.A. data 8

Maflow S.p.A. has is registered and administrative office in Trezzano sul Naviglio (MI), at via Boccaccio No 1, is registered on the Milan Company Register at No 04460570965 and same Tax Code and Milan A.E.R at No MI-1749389. The company carries out those activities that constitute its corporate purpose in two plants situated on the national territory: Trezzano sul Naviglio, covered surface area of around 14.000 m² housing Maflow s registered and administrative office and the offices of the majority of managers and those responsible for the various company functions, as well as the technical, sales, accounts and legal departments that assist and coordinate all production activities of the Maflow Group. Activities to machine steel and aluminium pipes, assemble them with rubber hoses from the Ascoli Piceno plant, as well as research, development and quality control for the entire Maflow Group are also carried out here; Ascoli Piceno, Campolungo snc, Industrial Area of 12.000 m², where rubber (both vulcanised and green ) hose production activities are located. These are sold both to other companies of the Maflow Group for assembly and third parties. Maflow S.p.A. holds leases stipulated respectively on 10 December 2007 with Virum S.r.l. for the Trezzano sul Naviglio plant and 30 April 2001 with Manuli Rubber Industries S.p.A. for the Ascoli Piceno plant. The company term is fixed until 31/12/2050 and the financial year runs from 1 st January to 31 December of each year. The company capital amounts to Euro 10,000,000.00 (ten million) entirely paid up and as at the insolvency declaration date was divided as follows: Partner Number of shares Nominal value of shares Maflow S.A. Spolka Akcynjna 10,000,000 10,000,000.00 100,0% % It is noted that Maflow S.p.A. shares are pledged to the following banks: - Banco Popolare di Verona e Novara S.c.r.l.; 9

- Intesa Sanpaolo S.p.A.; - Sanpaolo Imi S.p.A.; - Unicredit Corporate Banking S.p.A.; - Interbanca S.p.A.; - Banca Popolare di Novara S.p.A.; - Banca Popolare di Vicenza Società Cooperativa per Azioni. Maflow S.p.A. has, as corporate purpose, that of designing, manufacturing and selling components and equipment for any type of motor vehicle, including therein industrial vehicles and, in particular, components for the car industry. It may carry out all commercial, industrial and financial, personal property and real estate operations deemed necessary or useful to achieve the corporate purpose. Moreover the company may: (i) take on, both directly and indirectly, shareholdings and interests in other companies, firms or bodies, even with registered office abroad, working in the aforementioned sector or having similar or related corporate purpose; (ii) provide said companies with technical and/or financial assistance and services in general; (iii) carry out commercial and industrial services and operations; and (iv) carry out financial activities and provide any type of guarantee for company or third party debts and liabilities, even in favour of banks and credit institutes. Those activities referred to in points (i), (ii) and (iv) hereinabove shall not be performed in relation to the public, and those set out in point (iv) hereinabove as main activity, in accordance with that laid down in legislative decree No 385 of 1 September 1993. Until the company was wound up, the administrators consisted of Messrs.: Name Post Maurizio Salom Chairman Luigi Francione Managing Director Carlo Bertone Director Jean Francois Aron Director Jean Pierre Verlaine Director Similarly, up until the same date, the Board of Directors consisted of Messrs.: 10

Name Monica Antonia Castiglioni Alberto Pession Carlo Galli Giovanni Tedeschi Giovanni Covati Post Chairman Standing auditor Standing auditor Substitute auditor Substitute auditor Auditing activities were assigned, in accordance with art. 2409-bis of the civil code, to KPMG S.p.A. (in office until approval of the balance sheet as at 31/12/2008). The Chairman of the Board of Directors acknowledging, during the extraordinary part of Maflow S.p.A. s Shareholders meeting of 6 April 2009, that the Sole Partner could not recapitalise the Company, explains the need to proceed with winding up the company. On 7 April 2009 the directors in office up until that time cease and the Meeting unanimously appoints a liquidator: Name Post Giovanni La Croce Liquidator Moreover, during the Shareholders meeting, the Chairman of the Board of Directors informs those present that he has initiated those activities necessary to file a petition in accordance with L.D. 270/99 ( Prodi bis ); the Meeting recommends that the appointed liquidator pursue, without delay, the procedure in accordance with the Prodi-bis procedure, however, without omitting to verify the feasibility of shows of interest and/or offers made by possible third party investors. In light of the above, a petition to declare Maflow S.p.A. insolvent in accordance with arts. 3 and 5 L.D. No 270 of 8 July 1999, was filed at the Ordinary Court of Milan, Bankruptcy Division, on 10 April 2009. The Court of Milan declared the petitioner insolvent with sentence No 260/09 of 11 May 2009 and appointed three Court Commissioners: Name Post Stefano Coen Court Commissioner Francesco Pensato Court Commissioner Vincenzo Sanasi d Arpe Court Commissioner 11

Moreover, the Court of Milan ordered that the company continue to be managed by the firm declared insolvent, the appointed liquidator de facto maintaining his management powers. 1.2.2. Maflow Polska Sp.zo.o. data Maflow Polska Sp.zo.o. has its registered office in Tychy (Poland), at ulica Serdeczm 42, Tax Code No 521-29-34-106. It was set up on 22 April 1998 with public notary document registered by Mr. Slawomir Strojny, notary in Warsaw (Rep. A N. 4478/98), and at No RHB 17533 of the business register at the District Court of Katowice. The company exercises its corporate purpose at the following three plants: Tychy, near Katowice, covered surface area of around 11,900 m² where aluminium & steel and air co activities, together with metal component production (so-called fitting) and final assembly (so-called assemblies production) activities are carried out. Activities are ISO TS 16949:2002 certified; Chelmek, near Oswiecim, covered surface area of around 10,.000², where aluminium & steel and air co activities, together with metal component production (so-called fitting) and final assembly (so-called assemblies production) activities are carried out. Activities are ISO TS 16949:2002 certified; Chelmek 2, near Oswiecim, covered surface area of around 5.356², where rubber hose vulcanisation (so-called pre-shaped hoses and rubber hoses) are carried out. Activities are ISO TS 16949:2002 certified. Company term is indefinite. The company capital as at the date the petition for insolvency was filed is of PLN 68,000,000.00, consisting of No 136,000 shares of the nominal value of PLN 500.00, held entirely by Maflow S.p.A. Partner Number of Shares Nominal Value (PLN) Maflow S.p.A. 136,000 68,000,000.00 100,0% % 12

95% of the capital is encumbered by various first degree pledges granted by Manuli Automotive S.p.A. (now Maflow S.p.A.), as person setting up the company, in favour of the following banks: Banca Popolare di Verona San Gimignano e San Prospero S.p.A. Intesa Sanpaolo S.p.A. Unicredit Banca d'impresa S.p.A. Interbanca S.p.A. Banca Popolare di Novara S.p.A. Banca Popolare di Vicenza S.c.p.A. Maflow S.p.A. pledged the shares to guarantee the Pool Finance it obtained from the aforementioned banks in accordance with various pledges stipulated in Wroclaw on 16 January 2006. Maflow Polska Sp.zo.o. s corporate purpose includes: a) manufacturing rubber products, technical products, flexible hoses, metal components (flexible hoses and equipment) and systems to be used in the automotive and hydraulic sector and the mining and naval industry; b) manufacturing metal joints; c) manufacturing plastic sections; d) wholesaling flexible hoses with hose equipment and systems and metal articles; e) Retailing flexible hoses and relative equipment and other retail sales. The Company has a dual Governance system consisting of a Supervisory Board and Management Board. The former consists of: Name Post Luigi Francione Chairman of the Supervisory Board (appointed by the Shareholders meeting of 31 July 2001) Jean Pierre Verlaine Supervisory Director (appointed by the Shareholders meeting of 18 April 2006) Stefano Cassina Supervisory Director (appointed by the Shareholders meeting of 4 August 2004) 13

The Management Board consists of: Name Franco Giampaoletti Stefano Neri Massimo Zagati Matteo Maria Cimenti Giovanni La Croce Post Management Director (appointed by the Supervisory Board on 30 November 2006) Management Director (appointed by the Supervisory Board on 31 March2008) Management Director (appointed by the Supervisory Board on 30 September 2007) Management Director (appointed by the Supervisory Board on 21 February 2008) Management Director (appointed by the Supervisory Board on 30 April 2009) Auditing activities were assigned to KPMG. A petition to declare Maflow Polska Sp.zo.o. insolvent in accordance with arts. 3 and 5 L.D. No 270 of 8 July 1999 was filed at the Ordinary Court of Milan, Bankruptcy Division, on 10 April 2009. The Court of Milan, acknowledging that Maflow Polska Sp.zo.o. s centre of main interest was situated in Italy (rather than the location of its registered office), declared the petitioner insolvent with sentence No 261/09 of 11 May 2009 and appointed three Court Commissioners: Name Post Stefano Coen Court Commissioner Francesco Pensato Court Commissioner Vincenzo Sanasi d Arpe Court Commissioner Moreover, the Court of Milan ordered that the company continue to be managed by the firm declared insolvent, the appointed Management Board de facto maintaining its management powers. 1.3. The role of the Maflow Group on the national and international scene. Maflow Group activities mainly focus on designing, manufacturing and selling components and equipment for any type of motor vehicle, including therein industrial vehicles and, in 14

particular, components for the car industry (automotive sector), occupying an important position on the world market. In particular the Maflow Group (that reports to Maflow S.p.A.) develops, manufactures and markets (towards third parties and within the Group) reinforced rubber hoses and pipes in compound materials for motor vehicles. Moreover, it machines and manufactures metal parts and rubber, aluminium or steel assemblies for other applications in the automotive sector, such as power steering systems, air conditioning systems, fuel and water pipes etc.. It is heavily involved in the entire production chain, from development to planning (together with vehicle manufacturers) from the beginning of the production cycle not only for individual manufacturers but also individual models ( 1 ), to compound processing, production and assembly. Dividing the sales per product it is clear that the higher activity volumes are achieved with air-conditioning systems (equal to around 75%). Revenue per product ( 1 ) Source: Petition to declare Maflow S.p.A. insolvent in accordance with arts. 3 and 5L.D. 270/1999 filed on 10 April 2009. 15

The Maflow Group is a leader in the motor vehicle and heavy vehicle air-conditioning rubber hose and compound piping segment with a 28% market share in Europe and 11% in the world in 2008 ( 2 ) almost twice that of the second most important competitor (Contitech). A/C assembly market share The MAFLOW Group mainly works as tier 1 direct and strategic supplier for its OEM customers. Turnover per customer type ( 2 ) Source: The Maflow Business Plan 2009-2011 - Synthesis of main outcomes, Boston Consulting Group, 9 December 2008. 16

Therefore, OEM manufacturers (top OEMs) are the Group s main customers and include: Volkswagen, BMW, Renault-Nissan (these three names alone represent over 60% of the sales), Mercedes, Ford-Volvo, PSA Peugeot Citroen, and FIAT. Turnover per customer Others OEMs 14% Keumah 0% Cohline 0% Ford / Volvo 1% Contitech 1% Delphi 1% Mirgor 2% Paccar / Daf / Leyland 2% Volkswagen 18% Eaton Group 2% VTC / VTNA / RVI 3% BMW 14% Behr 3% Scania 4% Valeo 4% Renault / Nissan 13% General Motors 4% PSA 7% FIAT 7% Lastly, revenue per geographical area shows higher activity volumes are achieved in Europe (around 81%). Turnover per geographical area 17

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PART TWO MAFLOW S.P.A. OPERATIONS 2.1. From the Company to the Group. It is best to highlight, in chronological order, Maflow S.p.A. s main operations (or those of its subsidiary companies) during the period from 2004 to 2008. As regards Maflow Polska Sp.zo.o. s operations see following chapter. 2.2. Sources of information used to reconstruct company s extraordinary operations. The documents used to reconstruct those company operations described hereunder were obtained from the company and/or official sources and include: Automotive Components S.p.A. s balance sheet as at 31 December 2004; Manuli Automotive S.p.A. s balance sheet as at 31 December 2005; Maflow S.p.A. s balance sheet as at 31 December 2006; Maflow S.p.A. s balance sheet as at 31 December 2007; Maflow S.p.A. s balance sheet as at 31 December 2007; Maflow S.p.A. s balance sheet as at 31 December 2008 approved by the Shareholders meeting of 6 April 2009; Manuli Rubber Industries S.p.A. s balance sheet as at 31 December 2004; minutes of Maflow S.p.A. s ordinary and extraordinary meeting of 6 April 2009; petition to declare Maflow S.p.A. insolvent in accordance with L.D. No 270/99; petition to declare Maflow Polska Sp.zo.o. insolvent in accordance with L.D. No 270/99; Court of Milan sentence No 260/2009 declaring Maflow S.p.A. insolvent; Court of Milan sentence No 261/2009 declaring Maflow Polska Sp.zo.o. insolvent; Maflow S.p.A. s historical inspection taken from Company Register on 22 May 2009; Maflow S.p.A. s historical inspection taken from Company Register on 26 May 2009; Man Automotive Components S.p.A. s memorandum of association; declaration in accordance with art. 2443 of the civil code of 28 July 2004 (Man Automotive Components S.p.A. capital increase); 19

contract to purchase shareholdings in Manuli Automotive S.p.A. and Manuli Auto International S.A. between Man Automotive Components S.p.A. and Manuli Rubber Industries S.p.A. dated 2 July 2004; minutes of Man Automotive Components S.p.A. s extraordinary shareholders meeting of 28 July 2004; minutes of Manuli Automotive S.p.A. s extraordinary shareholders meeting of 28 September 2004; minutes of Manuli Automotive S.p.A. s Board of Directors meeting of 7 November 2005 (acquisition of shareholdings from Manuli Auto International S.A.); document transferring Manuli Auto International S.A. s shareholdings to Manuli Automotive S.p.A. dated 17 November 2005; finance contract taken on by Manuli Auto International S.A., dated 30 November 2005; minutes of Manuli Auto International S.A. s extraordinary general meeting dated 9 December 2005; audit report on Manuli Auto International S.A. s accounts dated 9 December 2005; registration of transfer of Manuli Auto Internationasl S.A. s registered office dated 21 December 2005; pool finance contract between Manuli Automotive S.p.A. and Banca Popolare di Verona and Novara S.c.a.r.l. (as agent), dated 23 December 2005; Manuli Automotive S.p.A. s Board of Directors report in accordance with art. 2501- quinquies of the civil code, dated 14 March 2005 (for merger); Man Automotive Components S.p.A. s Board of Directors report in accordance with art. 2501-quinquies of the civil code, dated 14 March 2005 (for merger); report of common expert appointed by the Court in accordance with art. 2501-bis of the civil code, dated 20 April 2005 (for merger); minutes of Manuli Automotive S.p.A. s extraordinary shareholders meeting of 20 April 2005 (for merger); minutes of Man Automotive Components S.p.A. s extraordinary shareholders Meeting of 20 April 2005 (merger resolution); merger document of 27 June 2005; 20

minutes of Man Servizi S.r.l. s shareholders Meeting of 20 December 2007 (capital increase to service sell-off); sublease between Maflow S.p.A. and Man Servizi S.r.l. of 24 January 2008; sales document for property in Trezzano sul Naviglio dated 10 December 2007; lease between Virum S.r.l. and Maflow S.p.A. for property in Trezzano sul Naviglio dated 10 December 2007. 2.3. Chronology of significant events. 2.3.1. 2004 events. Man Automotive Components S.p.A. (now Maflow S.p.A.) was set up on 23/06/2004 by the sole partner Reflexes Finance S.A., with registered office in Luxembourg; the company capital was of Euro 120,000.00. On setting up the company, the board of directors was assigned the task of increasing the company capital up to a maximum of Euro 50 million by 31/12/2005 with power of attorney drawn up by the Notary, Mr. Piazza, No 328987 / file No 8488. In enforcing said mandate, the company capital was increased to Euro 10 million on 03/08/2004 and Euro 33 million were allocated to the paid-in capital. Reflexes Finance S.A. underwrote and paid the entire increase in order to acquire all Manuli Automotive S.p.A. and Manuli Auto International S.A. shares from Manuli Rubber Industries S.p.A. It is noted, from the share purchase contract, dated July 2004 (Acc. Doc. 1), that the maximum price agreed on between the parties was of Euro 140 million, minus the net consolidated financial standing estimated by the vendor of around Euro 32 million; therefore, the final price is of Euro 108 million, subject to adjustments as a result of the net consolidated financial standing as at the acquisition contract closing date. The overall purchase price as at the closing date was of 109 million Euros, and the value of the two companies acquired was entered as provided for in the contract in the following proportions: - 66.6% to Manuli Automotive S.p.A.; - 33.3% to Manuli Auto International S.A. 21

Therefore, the value entered in MAN Automotive Components S.p.A. s balance sheet included 72.6 million Euros for Manuli Automotive S.p.A. and 36.4 million Euros for Manuli Auto International S.A. Manuli Rubber Industries S.p.A. s (vendor) supplementary note as at 31 December 2004 states that on 3 August 2004, on transferring the Auto Business Group to the Private Equity funds (Italian Lifestyle Partners) the shares in Manuli Auto International S.A. and Manuli Automotive S.p.A. were sold to Man Automotive Components S.p.A., company set up by the Private Equity funds. There are no expert valuations on the two companies acquired amongst the company s documents. ---------------------------------------------------------------------------------------------------------------- -------------------------- (*). It is noted that, as results from Manuli Rubber Industries S.p.A. s individual balance sheet as at 31 December 2004, the overall value of the two shareholdings as at the transfer date is of around 15.9 million Euros; therefore, Manuli Rubber Industries S.p.A. entered a 93 million Euros capital gain in its balance sheet as at 31 December 2004. Moreover, it should also be noted that Manuli Auto International S.A. settled the 17.4 million Euro debt with the vendor (Manuli Rubber Industries S.p.A.) on transferring the Auto Business Group. Manuli Auto International S.A. ordered the Banca Popolare di Verona e Novara S.c.r.l. to allocate around 15.1 million Euros to line B of the finance described hereunder, crediting the sum to an account in the name of Manuli Rubber Industries S.p.A in order to meet said financial commitment. Lastly it is noted that Manuli Automotive S.p.A. held a seven year lease as from 1 May 2001, signed in April 2001, renewable for a further seven years, with Manuli Rubber Industries S.p.A. (vendor) for an overall annual sum of Lire 678,000,000 (around 350 thousand Euros) for the Ascoli Piceno plant. Acquisition of the two shareholdings was not only financed by the capital increase but also loan capital, opening a bridging loan of 58.3 million Euros with Banca Popolare di Verona e Novara S.c.ar.l. and 10 million Euros from Manuli Rubber Industries S.p.A. (owner of the shareholdings purchased). 22

The terms and conditions of the finance provided by Banca Popolare di Verona e Novara S.c. a r.l. are as follows: Amount Line A: Euro 50,000,000; Line B: Euro 8,300,000 (short term credit available in not more than five payments, up to a maximum of Euro 40,000,000); Line C: Euro 0 (short term revolving credit available in payments up to a maximum of Euro 10,000,000). Expiry dates Line A: 22 July 2005; Line B: 22 July 2005; Line C: 22 July 2005. Interest rates Line A: Euribor + an annual margin of 2.50%; Line B: Euribor + (i) an annual margin of 2.50%, for the portion devoted to paying part of the acquisition price and (ii) an annual margin of 2.00%, for the portion devoted to refinancing the foreign subsidiary companies medium to long term debts as at the date Line B is opened ; Line C: Euribor + an annual margin of 2.00%. Manuli Automotive S.p.A. set up Manuli Automotive Components (Dailian) Co.Ltd. (Cina) in March 2004 with company capital of CNY 4,055,611 (around Euro 360,000). The Group structure at the end of 2004: 23

Set up in 2004 Acquired in 2004 Man Automitve Components SpA 100% 100% 100% Manuli Polska Manuli Auto Manuli 51% S.P.ZO.O 44% International SA 18,8% Automotive SpA Polonia Luxemburg Manuli Auto Iberica SL 100% 100% 99,997% 100% Manuli 0,003% Automotive Components Manuli Auto Manuli Auto Do Manuli Auto (Dalian) Co. Ltd Holland BV Brazil LtdA France SA 81,2% Information Summary mar-04 Manuli automotive Components (Dalian) Co.Ltd was set up 26/06/2004 Reflexes Finance founded MAN Automotive Components SpA, Company capital 120,000, at the Notary Ms. Fausta Piazza Register No: 328987/8488 03/08/2004 capital increased to 10,000.000 and paid in Share reserve 33,000,000 as a result of purchasing Manuli Automotive SpA in 2005 03/08/2004 58,300,000 finance opened with Banca Popolare di VR e No to purchase Manuli Automotive SpA and Manuli International SA 03/08/2004 10,000,000 finance opened with Manuli Rubber Industries SpA to purchase Manuli Automotive SpA 03/08/2004 Acquisition of Manuli Automotive SpA 73 million Euro and Manuli Auto International SA 36 million Euro Data taken from balance sheet as at 31 December 2004 shows that values relating to those shareholdings recorded and comparison with respective share of the subsidiary s net worth are as follows: Subsidiary Companies (all values in thousands of Euro) Company Capital Net Worth of which operating result Balance sheet value (A) Share of net worth,b) Manuli Automotive S.p.A. 5,000 14,715 (174) 72,647 14.715 57,932 Manuli International S.A. 1,000 5,839 420 36,309 5,839 30,470 Delta (A-B) Indirect subsidiaries Company Capital Net Worth Profit/Loss % Held Currency Manuli Auto Polska Sp.zo.o 68.,00,000 93,24,5.03 50,347,502 95% PNL Manuli Automotive Component 4,055,611 1,699,409 (2,357,531) 100% CNY (Dalian) Co Ltd Manuli Auto do Brasil Ltda 26,277,894 14,500,000 (320,370) 100% BRL Manuli Auto France S.A. 490,695 2,185,079 (2,382,644) 100% Euro Manuli Auto Holland NV 213,381 (491,214) 1,149,395 100% Euro Manuli Auto Iberica S.L. 889,240 13,865,005 2,232,754 100% Euro The reasons provided by directors to support the higher values entered as shareholdings compared to their respective share of the subsidiaries net worth can be obtained from the balance sheet that closed on 31 December 2004. Both shareholdings are reported to be long lasting strategic investments and not depreciated as a result of lasting losses. The higher values are justified by Manuli 24

Automotive S.p.A. s and Manuli Auto International S.A. s capacity to generate positive income and cash flows in the future. Moreover, it is noted that, in the balance sheet as at 31 December 2005, in commenting on the merger deficit generated by Manuli Automotive S.p.A. s takeover and criterion chosen for its depreciation, the directors indicate that: the merged company has been firmly on the market for years ; market research shows that the aforementioned period (of depreciation) is in line with the company s growth expectations, therefore the company is expected to maintain its position on the market in the long term; depreciating goodwill over a period of 10 years is deemed to be in line with the Board of Directors development and profitability plans. The merger deficit entered in the balance sheet as at 31 December 2005 was already represented in the balance sheet as at 31 December 2004 by the difference (indicated in the above table) between the shareholding book value, equal to the price paid, and share of the subsidiary s net worth. 2.3.2. 2005 events. The following illustrates the main extraordinary events of 2005, as indicated in the Management Report and Supplementary Note accompanying the balance sheet that closed on 31 December 2005. MAN Automotive Components S.p.A. s takeover of Manuli Automotive S.p.A. The merger project, in accordance with art.2501-ter of the civil code and art. 2501-bis of the civil code, was drawn up on 14 March 2005, said project was filed at the Company Registry on 15 March 2005 and registered therein on 21 March 2005; the project in question involved MAN Automotive Components S.p.A. taking over Manuli Automotive S.p.A.. The two companies involved in the operation held general meetings (Notary s Mr. Enrico Lainati register No 2207 / file No 1103 and reg. No 2208 / file No 1104) on 20 April 2005. 25

Having viewed the expert s report of 20 April 2005 (Mr. Fabrizio Malandra, auditor) ( 3 ) they decided to approve said merger project; the latter also included: a) changing the company name from Man Automotive Components S.p.A. to Manuli Automotive S.p.A.; b) transferring the company s registered office from Milan, at Viale Bianca Maria 25 to Trezzano sul Naviglio (MI), at Via Boccaccio 1; c) modifying the merged company s corporate purpose as follows: The company purpose is designing, manufacturing and selling components and equipment for any type of motor vehicle, including therein industrial vehicles and, in particular, components for the car industry. It may carry out all commercial, industrial and financial, personal property and real estate operations deemed necessary or useful to achieve the corporate purpose. Moreover the company may: (i) take on, both directly and indirectly, shareholdings and interests in other companies, firms or bodies, even with registered office abroad, working in the aforementioned sector or having similar or related corporate purpose; (ii) provide said companies with technical and/or financial assistance and services in general; (iii) carry out commercial and industrial services and operations; and (iv) carry out financial activities and provide any type of guarantee for company or third party debts and liabilities, even in favour of banks and credit institutes. Those activities referred to in points (i), (ii) and (iv) hereinabove shall not be performed in relation to the public, and those set out in point (iv) hereinabove as main activity, in accordance with that laid down in legislative decree No 385 of 1 September 1993. The structure of the borrowing following the merger may be obtained from the minutes of the extraordinary meetings of 20 April 2005. ( 3 ) The information provided in the merger project prepared by the respective Board of Directors as regards the financial resources necessary to meet the obligations taken on by Man Automotive Components S.p.A. following the merger were confirmed by the report of 20 April 2005 prepared by Mr. Fabrizio Malandra, expert appointed by the Court of Milan on 25 February 2005 in accordance with art. 2501-bis of the civil code, on the request of those companies involved in the merger of 14 February 2005. 26

Finance provided to Man Automotive Components S.p.A. by Banco Popolare di Verona e Novara S.c.r.l. on 3 August 2004. Following 22 July 2005 (expiry date of 58.3 million Euros loan provided in 2004), Finance consisted of four different lines of credit: Amount Line A: of the overall maximum sum of Euro 40,000,000.00 available in one payment on the Stipulation Date; Line B: of the overall maximum sum of Euro 10,000,000.00 available in one payment on the Stipulation Date; Line C: of the overall maximum sum of Euro 10,000,000.00 available in one payment within 36 months of the Stipulation Date; Line D: of the overall maximum sum of Euro 50,000,000.00, available as follows: within the limit of the share used as part of the Bridge Loan for Man Automotive Components S.p.A. to purchase Manuli Automotive S.p.A. s and Manuli Automotive International S.A. s capital as supplement to line A; to refinance medium/long term debts; for difference between maximum limit and investments referred to in points (i) and (ii) and to discount credits. Interest rates Line A: EURIBOR plus an annual margin of 2.10% (variable according to net consolidated financial standing); Line B: EURIBOR plus an annual margin of 3.00%; Line C: EURIBOR plus an annual margin of 3.00%; Line D: EURIBOR plus a margin equal to: i) an annual 2.10%, available on Line A and for cash investments; ii) an annual 1.75%, available to refinance medium to long term lines; iii) an annual 1.00%, available to advance commercial credits. Term Line A and Line D: 84 months from Stipulation Date; Line B: 60 months from Stipulation Date; Line C: 72 months from Stipulation Date. 27

Vendors loan. The Euro 10,000,000.00 loan provided by the vendor Manuli Rubber Indistries S.p.A. to Man Automotive Components S.p.A. on 3 August 2004 to acquire Manuli Automotive S.p.A, has the following characteristics: Interest rate: Euribor 6 months (base 360) plus 1.50% spread (variable according to net consolidated financial standing) Term: 36 months from 2 August 2004 Remaining debt as at 14 March 2005: Euro 10,000,000.00 Other Loans (Manuli Automotive S.p.A.): Banca Intesa Mediocredito Mortgage on Trezzano sul Naviglio (Mi) property Original amount: Euro 1,549,370.70 Term: 10 years Expiry date: 15 September 2005 Repayment: six-monthly (first due date 15 March 1998 16 instalments) Interest rate: variable BEI increased by 1.10% spread Residual debt as at 14 March 2005: Euro 193,671.34 San Paolo IMI Mortgage on Trezzano sul Naviglio (Mi) property Original amount: Euro 1,032,913.79 Term: 10 years Expiry date: 15 June 2007 Repayment: six-monthly Interest rate: variable BEI increased by 0.75% spread Residual debt as at 14 March 2005: Euro 322,785.58 San Paolo IMI Applied research 1 st instalment Original amount: Euro 895,235.00 Term: 8 years Expiry date: 1 July 2010 Repayment: six-monthly (first due date 1 January 2005 12 instalments) Interest rate: fixed 2% 28

Residual debt as at 14 March 2005: Euro 824,646.80 San Paolo IMI Applied research 2 nd instalment Original amount: Euro 263,706.00 Term: 8 years Expiry date: 1 July 2010 Repayment: six-monthly (first due date 1 January 2005 12 instalments) Interest rate: fixed 2% Residual debt as at 14 March 2005: Euro 242,913.10 San Paolo IMI Applied research 3 rd instalment Original amount: Euro 262,623.00 Term: 7 years Expiry date: 1 July 2010 Repayment: six-monthly (first due date 1 January 2005 12 instalments) Interest rate: fixed 2% Residual debt as at 14 March 2005: Euro 241,915.49 San Paolo IMI Applied research 4 th instalment Original amount: Euro 281,888.00 Term : 6 years Expiry date: 1 July 2010 Repayment: six-monthly (first due date 1 January 2005 12 instalments) Interest rate: fixed 2% Residual debt as at 14 March 2005: Euro 259,661.47 San Paolo IMI Applied research 5 th instalment Original amount: Euro 248,525.00 Term: 6 years Expiry date: 1 July 2010 Repayment: six-monthly (first due date 1 January 2005 12 instalments) Interest rate: fixed 2% 29

Residual debt as at 14 March 2005: Euro 228,929.10 San Paolo IMI Applied research 6 th instalment Original amount: Euro 151,836.00 Term: 5 years Expiry date: 1 July 2010 Repayment: six-monthly (first due date 1 January 2005 12 instalments) Interest rate: fixed 2% Residual debt as at 14 March 2005: Euro 139,863.92 Mediocredito Centrale - Manuli Auto Polska finance guaranteed by MAN Automotive Components S.p.A. Original amount: Euro 5,706,000.00 Term: 8 years Expiry date: 18 December 2009 Repayment: six-monthly (first due date 17 June 2005 10 instalments) Interest rate: Euribor 6 months plus 0.90% spread (minus SIMEST 2.6573% contribution) Residual debt as at 14 March 2005: Euro 5,706,000.00 Unicredit Banca Mediocredito - Manuli Auto Polska finance guaranteed by MAN Automotive Components S.p.A. Original amount: Euro 2,250,000.00 Term: 8 years Expiry date: 31 March 2012 Repayment: six-monthly (first due date 30 September 2007 10 instalments) Interest rate: Euribor 6 months plus 1.00% spread (minus SIMEST 2.4352% contribution) Residual debt as at 14 March 2005: Euro 2,250,000.00 Credit lines granted to Manuli Automotive S.p.A. by Banks San Paolo IMI Advance on invoices 30

Credit line amount Euro 4,150,000.00 Interest rate: Euribor 3 months plus 1.00% spread; Availment as at 14 March 2005: 0 (zero) Banca Intesa Current account overdraft Credit line amount Euro 500,000.00 Interest rate: not specified; Guarantee: Man Automotive Components S.p.A. patronage letter Availment as at 14 March 2005: 0 (zero) Banca Intesa Advance on invoices Credit line amount Euro 1,500,000.00 Interest rate: not specified; Guarantee: Man Automotive Components S.p.a. patronage letter Availment as at 14 March 2005: 0 (zero) Banca Popolare di Milano Current account overdraft Credit line amount Euro 1,000,000.00 Interest rate: 7.75% Availment as at 14 March 2005: 0 (zero) Banca Popolare di Milano - "Hot money" Credit line amount Euro 2,600,000.00 Interest rate: Euribor 1 month plus 0/30%/0.35% spread Availment as at 14 March 2005: 0 (zero) Banca Popolare di Milano Advance on invoices Credit line amount Euro 1,549,000.00 Interest rate: Italy 2.75% overseas to be negotiated Availment as at 14 March 2005: zero 31

As already mentioned in the balance sheet as at 31 December 2005, the Company noted a deficit following the merger of Euro 57.9 million, entered entirely to goodwill. Said amount is equal to the difference between the book value of the shareholding removed from the asset and liability statement (around 72.6 million Euros) and net value of that merged (around 14.7 million Euro). The directors opted for a ten-year depreciation justifying the choice in the supplementary note by stating bearing in mind the fact that it results from a merged company that has been firmly on the market for years [omissis], and its economic utility, market research shows that said period is in line with the company s expected growth, therefore it is reasonable to believe that the company will be able to maintain its position on the market in the long term ; the depreciation applied in 2005 reduced the amount entered to around 52.1 million Euros. The Board of Auditors confirms, in its balance sheet report as at 31 December 2005, that they approved system and expansion and goodwill costs, net of the year s depreciation, respectively of 689,165 and Euro 52,138,012. The auditing company, PKF S.p.A., in auditing the balance sheet as at 31 December 2005 in accordance with art. 2409-ter of the civil code, confirm that on 27 June 2005, MAN Automotive Components S.p.A. with registered office in Milan took over the subsidiary Manuli Automotive S.p.A. [omissis]. Said merger [omissis], resulted in a deficit of 57.9 million Euros, allocated entirely to goodwill and entered in the balance sheet as at 31 December 2005 at 52.1 million Euros. Recovery of said goodwill is linked to the realization of those shares formulated in the 2006-2012 plan. In spite of the chronological order adopted up to now, it is noted that on 31 December 2008 the remaining, not yet amortised, part of goodwill was depreciated by 39.9 million Euros; said depreciation seems justified in view of the absence of any valid documents to justify said surpluses. Incorporation of Man Servizi S.r.l. Man Servizi s.r.l., with registered office in Milan, at Via Bianca di Savoia No 25 was set up in June 2005. Manuli Automotive S.p.A. underwrote the entire company capital of Euro 20,000. Man Servizi s.r.l. was set up to manage certain service activities for the entire Group. 32

Acquisition of shareholdings from Manuli Auto International S.A. (Luxembourg). On 7 November 2005 Manuli Automotive S.p.A. s Board of Directors decided to purchase from Manuli Auto International S.A. (Luxembourg) the following shareholdings: 99.99% of Manuli Auto do Brasil Ltda; 100% of Manuli Auto Holland NV; 44% of Manuli Auto Polska Sp.zo.o; 99.98% of Manuli Auto France S.A. This purchase operation also includes credits and debits Manuli Auto International S.A. has with other companies of the Group. With the acquisition, control of the shareholdings in Brazil, Holland, Poland and France pass from indirect to direct. The maximum price fixed by the Board of Directors is of around 35 million Euros. Transfer of ownership of the shareholdings and related credits and debits is signed on 17 November 2005. The values attributed to the asset purchased from Manuli Automotive S.p.A. are as follows: Euro 24.5 million for the shareholdings; Euro 11.6 million for credit within the group; Euro 1 million for taking on debits within the group. Moreover, it is agreed that the total asset price of 36.1 million Euros is paid as follows: offsetting 1 million Euros for debts within the group; as for the remaining amount, payment in four instalments, not beyond 30 December 2006. On 30 November 2005 Manuli Automotive S.p.A. signs the finance contract with Banca Popolare di Verona e Novara S.c.a.r.l., entered into by Manuli Auto International S.A. for around 15.5 million Euros (in force on Line B of the overall finance contract of 100 million Euros signed by the same bank with Man Automotive Components S.p.A.) to meet the financial commitment resulting from total settlement of the finance in being with the vendor (Manuli Rubber Industries S.p.A.) on acquiring the Auto Business Group in August 2004. The effects include: transfer of the bank debt to Manuli Automotive S.p.A. (former Man Automotive Components S.p.A.); 33

entering a credit with Manuli Automotive S.p.A. of around 19.6 million Euros (corresponding to the price to purchase the shareholdings and credits between companies of the group, net of the debits as well as the finance in question) on Manuli Auto International S.A. s balance sheet. On 9 December 2005 Manuli Auto International S.A. decides to transfer its registered office from Luxembourg to Italy. Manuli Auto International S.p.A. (former Manuli Auto International S.A.) is registered on the Milan Company Register on 21 December 2005, Italian company that, during the following year, changes its name to Maflow Finance S.p.A.. An asset and liability statement and profit and loss account are drawn up on that occasion. Said statements show that Manuli Auto International S.A. has, in accordance with that described hereinabove, a credit with Manuli Automotive S.p.A. of 19.4 million Euros; moreover, the overall value of the shareholdings is of around 12 million Euros; the capital gained on the sale is of around 12.5 million Euros that, together with an additional gain made by Manuli Auto International S.A. on the sale of Manuli Auto Iberica, contributes to form the Luxembourg company s 2005 operating result (equal to around 13.6 million Euros as at 9 December 2005). Despite the chronological order adopted up to now, it is noted that on 17 March 2006 Manuli Auto International S.p.A. s shareholders Meeting decided to distribute the 2005 operating result (formed as previously described) as well as the profits carried forward and relating to previous years, with a dividend of around 18.3 million Euros, noted in Manuli Automotive S.p.A. s 2005 balance sheet as credit with Manuli Automotive S.p.A. and in the profit and loss account, as proceeds from shareholdings. Lastly, it is noted that on 31 December 2005 the shareholding in Manuli Auto International S.p.A. was depreciated by around 35.2 million Euros in Manuli Automotive S.p.A. s balance sheet. Incorporation of Manuli Auto North America Inc. Manuli Auto North America Inc. was set up in November 2005, company with registered office in Detroit (USA) and company capital of USD 100,000, having 100% control of Manuli Automotive S.p.A. 34

Refinancing of 23 December 2005 A new finance agreement with a pool of banks was stipulated on 23 December 2005 at the following terms and conditions: Amount - Line A: amount available is the positive difference between the maximum sum available (not over Euro 70,000,000.00) and that used from time to time by Borrower; - Line B: amount available is the maximum sum available not over Euro 5,000,000; - Line C: amount available is the maximum sum available not over Euro 10,000,000; - Line D: amount available is the positive difference between the maximum sum available (not over Euro 20,000,000.00) and that used from time to time by Borrower. Expiry dates: Line A: 21 December 2012; Line B: 23 December 2010; Line C: 23 December 2011; Line D: 21 December 2012. Hypothesised investments during the agreement period: consolidated investments planned for each financial year in the financial plan approved by the Company. 1. Euro 16,000,000 during the year that closed on 31 December 2006; 2. Euro 20,000,000 during the year that closed on 31 December 2007; 3. Euro 21,000,000 during the year that closed on 31 December 2008; 4. Euro 13,000,000 during the year that closed on 31 December 2009; 5. Euro 13,000,000 during the year that closed on 31 December 2010; 6. Euro 13,000,000 during the year that closed on 31 December 2011; 7. Euro 13,000,000 during the year that closed on 31 December 2012. For a total of Euro 109,000,000 as at 31 December 2012. Margins applied: 35

- Line A. Annual margin of 2.10% for first availment and 1.75% for remaining availments. As from the 2005 Consolidated Balance Sheet approval date; Line A margin relating to first availment may vary depending on the Net Financial Standing (PFN) / EBITDA ratio or: o if "PFN/EBITDA" > 275, margin will be 2.50%; o if "PFN/EBITDA" < 2,25, margin will be 1.75%; o if "PFN/EBITDA" is between 2.25 and 2.75, margin will be 2.10%. Said ratio will be calculated every six months according to the previous twelve months and communicated by the Company to the Agent; - Line B: 3% a year; - Line C: 3% a year; - Line D: 2.75% a year. Period of availability: - Line A. First availment, period between 12 January 2006 (included) and 20 January 2006 (included). Remaining availments Line A, period between 12 January 2006 (included) and six month expiry date (included). - Line B. Period between 12 January 2006 (included) and 20 January 2006 (included) - Linea C. Period between 12 January 2006 (included) and 20 January 2006 (included) and third anniversary of said date (included). - Line D. Period between 12 January 2006 (included) and 20 January 2006 (included) and third anniversary of said date (included). Pledges on shares / Pledges on shareholdings: 1. Manuli Automotive S.p.A. (former Maflow S.p.A.); 2. Manuli Auto France S.A; 3. Manuli Auto Ibèrica S.L.; 4. Manuli Auto Polska Sp.zo.o.; 5. New Shareholdings; Total finance of Euro 105,000,000 per bank: 36

- Line A o Banca Popolare di Verona e Novara Euro 13,333,333.00 o Intesa Euro 8,333,333.00 o San Paolo IMI Euro 11,666,667.00 o Unicredit Banca per l Impresa Euro 6,666,667.00 o Interbanca Euro 11,666,667.00 o Popolare di Novara Euro 6,667,667.00 o Popolare di Vicenza Euro 11,666,667.00 Total Euro 70,000,000.00 - Line B o Banca Popolare di Verona e Novara Euro 952,381.00 o Intesa Euro 595,238.00 o San Paolo IMI Euro 833,333.00 o Unicredit Banca per l Impresa Euro 476,190.00 o Interbanca Euro 833,333.00 o Popolare di Novara Euro 476,190.00 o Popolare di Vicenza Euro 833,333.00 Total Euro 5,000,000.00 - Line C o Banca Popolare di Verona e Novara Euro 1,904,762.00 o Intesa Euro 1,190,476.00 o San Paolo IMI Euro 1,666,667.00 o Unicredit Banca per l Impresa Euro 952,381.00 o Interbanca Euro 1,666,667.00 o Popolare di Novara Euro 952,381.00 o Popolare di Vicenza Euro 1,666,667.00 Total Euro 10,000,000.00 - Line D o Banca Popolare di Verona e Novara Euro 3,809,524.00 37

o Intesa Euro 2,380,952.00 o San Paolo IMI Euro 3,333,333.00 o Unicredit Banca per l Impresa Euro 1,904,762.00 o Interbanca Euro 3,333,333.00 o Popolare di Novara Euro 1,904,762.00 o Popolare di Vicenza Euro 3,333,333.00 Total Euro 20,000,000.00 Total Repayment: - Line A: 7.14% of the amount used on a six-monthly basis as from 23 June 2006; last instalment on 21 December 2012 for the residual amount of the sum used; - Lines B, C and D: in one payment on the expiry date. Early repayments are accepted, provided that they do not exceed 95% of the sum financed (within 18 months of signing the agreement), are equal to or multiples of Euro 2,000,000 and 20 working days prior notice is given. Obligations assumed by the Company The Company undertakes, even in relation to each of the other companies of the Group (unless the commitment is explicitly limited to said Companies in the Contract), for the period of validity of the Contract and in any case until the credit is paid off: 1. to send the Agent: - the Company s certified annual balance sheet and that of the other companies of the Group (together with the relative Board of Directors and Board of Auditors reports) within 30 days of the relative approval; - the Consolidated Balance sheet relating to each financial year (together with the relative Board of Directors and Board of Auditors reports) within 30 days of the relative approval; - the Group s consolidated monthly reports within 45 days of the close of each calendar month, specifying that the first must refer to 31 December 2005; - the draft asset and liability statement and profit and loss account, including the Group s forecast cash flow (budget), by 31 March of each year; 38

- the Company s Extraordinary Meeting agenda (or similar document relating to the Companies of the Group) 15 days before that planned for the Meeting (or 10 days before that programmed for totalitarian Meetings) and minutes of the Extraordinary Meetings (or similar document relating to companies of the Group) within 15 days of the meeting; 2. to inform the Agent immediately of any changes or events of a technical, administrative, legal and company nature that could prejudice the Group s economic, financial, productive and commercial situation in such a way as to hinder the borrower (as borrower and/or co-obliged) in fulfilling the obligations taken on in the Contract; 3. to provide all the information (news, data and documents) the Agent may reasonably request from time to time, with regards to the Group on its behalf or that of one or more Financers, within 15 days of the relative request, specifying that said term may be extended (case by case) depending on the complexity of the information to be prepared, on the undertaking that the Agent and Financers maintain all the information acquired confidential; 4. to allow access, prior at least 5 Working Days notice, to the accounts and registers, premises and assets of each of the companies of the Group, the Agent may reasonably request (however without this hindering normal activities of the company involved), even, by way of example, to inspect said accounts and take possible copies, at the company s expense, notwithstanding the Agent s and Financer s undertaking to keep the acquired information confidential; 5. to make sure that all obligations to pay capital, interest, charges and accessories resulting from new finance, under whatever form, are deferred and subject to those payment obligations resulting from the Contract, at terms and conditions of satisfaction to the Agent, except for leasing contracts and, without prejudice to that set out in point 8, letter (E), of Accompanying Document 8.1, for possible valid lines of credit until revocation; 6. to remit Financers and the Agent on their behalf, as early Repayment (without any penalties or commission) the Finance within 15 Working Days of the event, respectively: 39

- 100% of the sums the Company may legitimately avail of as a result of public offer to underwrite Company shares or public offer to sell shares that represent the capital of any company of the Group, carried out within the context of a regulated market (prior the Agent s authorisation in accordance with the provisions set out hereunder); notwithstanding that set out hereinabove, the Financers shall assess in good faith any request to waive this provision in part, notwithstanding that, in any case, a percentage of the sums received in accordance with that set out hereinabove of not less than the ratio between the existing borrowing at the time of the public offer in accordance herewith and sum of the Company s net worth and subordinate finance shall be the subject of compulsory early Repayment; - 100% of the sums exceeding the Relevant Threshold (as defined hereunder) the Company may legitimately avail of (net of any tax burden) as a result of the sale, transfer or, generally, proceedings to dispose of part of the assets of each of the companies of the Group (that fall within tangible, intangible or financial fixed assets or receivables that fall within circulating assets), both in one or more than one transaction, linked or not for a value of 5 million Euros (the Relevant Threshold ), unless said sums are used within 6 months of receipt to purchase goods that are instrumental to running the company and notwithstanding, once said term has passed, said sums must be deposited on a Fixed term Account; - 100% of the sums of the Company may legitimately avail of following distribution of dividends/profits and/or reserves from any company of the Group resulting from financial debt taken on as a result; - 50% of the Excess Cash Flow, on the understanding that the amounts that are the subject of early Repayment (A) shall be attributed pro-quota to each of the instalments, on the Capital Owed of Line A, for any excess on the Capital Due of Line B, for any additional excess on the Capital Due of Line C and any additional excess on the Capital Due of Line D and (B) the Reference Threshold must not be exceeded during the Relevant Period, specifying that the Company must refund any excess on the Reference Threshold the first Banking Day following expiry of the Relevant Period. The sums that are the subject of compulsory early Repayment shall in no way be used by the Borrower; 40

7. limited to the Company, not to pay any dividend or carry out any other form of distribution or payment to any category of shareholder; 8. to maintain, throughout the period hereof, a consolidated net worth of not less than Euro 43,000,000.00 ( 4 ); 9. to make sure Reflexes S.A. holds, throughout the period hereof, a 51% share of the Company Capital or higher percentage necessary to adopt ordinary and/or extraordinary resolutions, should the articles of Association require qualified majorities, without prejudice to the Pledge on Company Shares that must, in any case, remain on Company Shares throughout the period hereof; 10. to make sure Sponsors hold in Reflexes S.A., throughout the period hereof, a 51% share of the company capital or higher percentage necessary to adopt ordinary and/or extraordinary resolutions, should the articles of Association require qualified majorities; 11. to maintain, throughout the period hereof, at least a 51% share of the Foreign Subsidiaries capital or higher percentage necessary to adopt ordinary and/or extraordinary resolutions should the respective articles of association require qualified majorities, without prejudice to the Pledge on the Share in Manuli Auto France, that on the Share in Manuli Auto Iberica and that on the Share in Manuli Auto Polska that must remain, in any case, throughout the period hereof, on the same percentage of the capital originally given in guarantee. As regards those companies acquired or set up as part of the Hypothesised Investments, the Company may transfer, in whole or in part, the Shares (majority or minority), without prejudice to the Pledges on the new Shares and provided that the transferee signs, on transfer, an undertaking that the pledge set up on the shares acquired in accordance with the Contract, continue throughout the period thereof, and it remain on the same percentage of capital originally given in guarantee. The Financiers agree, as from now, to issue pledges on the new Shares (set up as provided for in the Contract), in the event of transfer, on the understanding that, in the event of transfer of majority shareholdings (or involving the loss of control), the Pledge on the New Shares shall be subject to reimbursing any availments of the Total ( 4 ) Condition respected until approved and certified consolidated Balance Sheet as at 31 December 2007. 41

Loan or partners reporting to the subsidiary that is the subject thereof in full on transfer; 12. to make sure Reflexes S.A. does not decide to distribute, throughout the period hereof, any Company dividends, profits or reserves; 13. to provide the Agent immediately with a copy of all the documents relating to any finance (under any form) set up between the companies of the Group; 14. to make sure the companies of the Group (other than the Company), compatibly with the existing cash flow, distribute sufficient profits, dividends or reserves to allow the Borrower to fulfil those payment obligations (for capital interest, charges and accessories) resulting from the Total Loan due in the six-months following approval of the balance sheet showing the distributable profit or reserve; 15. to respect those financial requirements indicated in Accompanying Document 8.1(o) Section A of the Contract. As regards observance of said requirements, the Company undertakes, throughout the period hereof, to transmit the Agent a declaration of observance (together with a statement of the relative calculations), signed by its legal representative by 30 April of each year (relating to the twelve months from 1 January to 31 December of the previous year) and by 31 October of each year (relating to the twelve months period from the 1 st July to 30 June of the same year). Moreover, the declaration to be submitted by 30 April of each year shall be signed by the Chairman of the Board of Auditors; 16. to make sure none of the companies of the Group decide to set up assets intended for a specific business in accordance with Articles 2447 bis and subsequent amendments of the Civil Code; 17. to respect and observe and make sure the other companies of the Group respect and observe the aforementioned provisions. Manuli Automotive Components (Dalian) Co. Ltd s capital increase of 1.5 Million USD. During the course of the year Maflow S.p.A. (former Manuli Automotive S.p.A.) underwrote Manuli Automotive Components (Dalian) Co. Ltd. s (The People s Republic of China) capital increase of 1.5 million USD depositing around 1.1 USD; the value of the shareholding entered in the balance sheet as at 31 December 2005 was of 1.6 million Euros. 42

At the end of 2005 the Group was structured as follows: 44% Acquired and 51% from merger Acquired as a result of merger in 2005 Transferred to Italy and turned into SpA Set up in 2005 Acquired in 2005 Not operational Manuli Auto International SpA Milano 100% Manuli Automotive SpA 100% MAN Servizi Srl Milano 99,99% 100% 100% 95% 99,98% 100% Manuli Auto Do Brazil LtdA Manuli Automotive Components (Dalian) Co. Ltd Manuli Auto North America Detroit USA Manuli Polska S.P.ZO.O Polonia Manuli Auto France SA Manuli Auto Holland BV 100% Manuli Auto Iberica SL 14/03/2005 Manuli Automotive SpA Project to merge with MAN Automotive Components SpA 20/04/2005 Resolution to merge Manuli Automotive SpA with MAN Automotive Components SpA 20/04/2005 Change of registered office to Trezzano sul Naviglio at via Boccaccio n.1 01/06/2005 MAN Servizi Srl set up with company capital of 20,000 27/06/2005 Document to merge Manuli Automotive SpA into MAN Automotive Components SpA drawn up by the Notary, Enrico Lainati Register No 2208/1104 and variation in corporate purpose 01/07/2005 Acquisition as a result of merger of Manuli Automotive Components (Dalian) Co.Ltd.and 51% of Manuli Polska S.p.ZO.O 01/11/2005 Acquired from Manuli Auto International SA: 98.98% of Manuli Auto France, 99.99 of Manuli Auto Do Brazil LtdA, 44% of Manuli Polska S.p.ZO.O and 100% of Manuli Auto Holland BV for 24,5 euro/mln. 01/11/2005 11.5 euro/mln of intercompany credits and 1 euro/mln of intercompany debts acquired from Manuli Auto International SA 01/11/2005 Total debt with Manuli Auto International SA 35 euro/mln reduced to 15.4 euro/mlnas a result of SA finance 01/11/2005 Transfer of Manuli Auto International SA from Luxembourd to Italy with transformation into Manuli Auto International SpA with registered office in Milan 01/11/2005 Manuli Auto North America Inc. set up with company capital of 100,000 USD 23/12/2005 Debt of 61 euro/mln with Banca Popolare di VR e NO, settled taking on M/L 105 euro/mln loan with same bank 31/12/2005 Depreciation of Shareholding in Manuli International SpA of 35.2 euro/mln Manuli Automotive Components (Dalian) Co. Ltd s capital increased to 1.5 USD/min Data taken from balance sheet as at 31 December 2005 shows that values relating to those shareholdings recorded and comparison with respective shares of the subsidiary s net worth are as follows: all values in thousands of Euros Subsidiary Companies Man Servizi S.r.l. 20 92 72 20 92 (72) Manuli Auto North America Inc 85 85 0 86 85 1 Manuli Auto France SA 491 8,085 7,004 394 8,083 (7,689) Manuli Auto International s.p.a. 1,000 1,112 (3) 1,.112 1,112 0 (1) (2) Manuli Auto Holland NV 214 (371) 120 213 (371) 584 (3) Manuli Auto Polska Sp.zo.o 17,619 42,188 17,297 25,401 40,079 (14,678) Manuli Auto do Brasil Ltda 10,459 5,758 (368) 7,473 5,757 1,716 (3) Manuli Automotive Component (Dalian) Co Ltd Company Capital Net Worth Balance sheet of which operating value Result (A) Share of Net worth (B) Delta (A-B) Notes 1,375 914 (199) 1,641 914 727 (3) (4) 43

The reasons provided by directors to support the higher values entered as shareholdings compared to the respective share of the subsidiaries net worth can be deduced from the balance sheet that closed on 31 December 2005. (1) Net Worth has already been reduced by the dividend distributed in March 2006 in accordance with shareholders meeting resolution of 17 March 2006 (equal to 18,300 thousand euro) (2) (Balance sheet value is already net) of (35,197 thousand Euros) depreciation of Manuli Auto International S.p.A., so that balance sheet value complies with company s net worth once dividend that has already been deliberated is distributed; (said depreciation) is justified by a loss deemed lasting, owing to the inefficacy of the company. (3) The differences do not seem to represent lasting losses bearing in mind each company s growth prospects. (4) The difference is justified by the company s start-up phase. (Text not from supplementary note in italics.) 2.3.3. 2006 events. Maflow do Brasil Ltda. Capital increase During January 2006 the Company underwrote a capital increase of the Brazilian company of 350,000 Euro. Maflow Mexico SA del CV set up 100% controlled company Maflow Mexico S.A. de C.V. with registered office in Silao, Mexico and company capital of MXN 90,000 was set up on 20 February 2006. During the course of the year the subsidiary changed its name to Maflow Mexico S.A. de CV and, in June 2006, it was decided to increase the capital by MXN 10,000,000 around 700 thousand Euros, of which 464 thousand Euros paid during the year. Change in Company name The Company changed its name from Manuli Automotive S.p.A. to the current Maflow S.p.A. on 8 June 2006, with document drawn up by the Notary, Mr. Enrico Lainati Register No 9018/4203, thus modifying its Articles of Association. 44

Change in company ownership On 30 June 2006 ownership of Maflow S.p.A. is transferred from Reflexes Finance S.A. to Maflow S.A. Spolka Akcyjna, Polish holding with registered office in Tychy (Poland), registered at No KRS 0000257117 of the National Court Register. Maflow Components (Dalian) Co. Ltd capital increase. Maflow S.p.A. completed Maflow Components (Dalian) Co. Ltd. s (Cina) capital increase, deliberated in 2005 and already paid in part, with a further 400 thousand USD, equal to around 333 thousand Euro. Maflow Components (Dalian) Co. Ltd. deliberated a further capital increase of 3,400 thousand USD in 2006; Maflow S.p.A. took part in the capital increase depositing 1,780 thousand USD (around 1,381 thousand USD). At year end shareholding is entered at around 4,316 thousand Euros. SIMEST acquires shareholding in Maflow Polska Sp.zo.o. Purchase of the first tranche of the shareholding in Maflow Polska Sp.zo.o., previously acquired by Simest in December 2001, equal 3.309% in March 2006. See following chapter for more details. At the end of 2006 Maflow Group is structured as follows: 45

Set up in 2006 Not operational Maflow Finance SpA Milano 100% 100% Maflow SpA MAN Servizi Srl Milano 100% 99,99% 100% 100% 98,31% 99,98% 100% Maflow Mexico SA del CV Maflow Do Brazil LtdA Maflow Components (Dalian) Co. Ltd Maflow North America Detroit USA Maflow Polska S.P.ZO.O Polonia Maflow France SA Maflow Holland BV 100% Maflow Iberica SL Jan-06 Maflow do Brazil LtdA capital increased by 350,000 20/02/2006 Maflow Mexico SA del CV set up mar-06 Simest acquires 3.309% of Maflow Polska S.P.ZO.O (2,250,000 PLN) 08/06/2006 Extraordinary meeting to change name to Maflow Automotive SpA as from 01/07/2006 with document drawn up by the Notary Mr. Enrico Lainati Register No 9018/4203 28/06/2006 New Articles of Association filed 30/06/2006 Ownership transferred from Reflexes Finance Sa to Maflow SA as from 01/07/2006 Maflow Components (Dalian) Co. Ltd capital increased by 3.4 million USD Data taken from balance sheet as at 31 December 2006 shows that values relating to those shareholdings recorded and comparison with respective share of the subsidiary s net worth are as follows: all values in thousands of Euros Values according to local standards of subsidiary companies country of residence Subsidiary Companies Company Capital Net Worth Balance of which operating Sheet value result (A) Share of Net worth (B) Delta (A-B) Notes Man Servizi S.r.l. 20 190 98 20 190 (170) Maflow North America Inc 76 (248) (339) 86 (248) 334 (3) (4) Maflow France SA 491 (3,082) (10,013) 397 (3,081) 3,478 (3) (5) Maflow Finance S.p.A. 1,000 1,095 (20) 1,112 1,095 17 (3) Maflow Holland NV 213 (467) (102) 213 (467) 680 (3) Maflow Polska Sp.zo.o 17,750 42,179 16,980 26,086 41,466 (15,380) (1) Maflow do Brasil Ltda 10,531 4,495 (1,582) 7,823 4,495 3,328 (3) Maflow Component (Dalian) Co Ltd Maflow Mexico S.A. del C.V. 4,183 2,686 (1,099) 4,316 2,686 1,630 (2) (3) 706 639 (63) 690 639 51 (3) 46

The reasons provided by directors to support the higher values entered as shareholdings compared to the respective share of the subsidiaries net worth can be deduced from the balance sheet that closed on 31 December 2008. (1) Net worth has already been reduced by the dividend that will be distributed in 2007 in accordance with the subsidiary s board of directors resolution. (2) Company capital and net worth have already been increased by the amount deliberated and not yet paid as at 31 December 2006. (3) The differences do not seem to represent lasting losses bearing in mind each company s growth prospects. (4) The difference is justified by the company s start-up phase. (5) Negative operating result is mainly due to a reorganisation plan in progress, whose cost was set aside in 2006 and whose benefits are expected in future years. Moreover it is noted that the company controls, through Maflow France S.A., 99.98% of Maflow Iberica S.L. with registered office in Guarnizo (Spain), whose net worth as at 31 December 2006 was of 6,797 thousand Euros and operating result 1,386 thousand Euros. Said shareholding is recorded in Maflow France S.A. s balance sheet at a value of 3,273 thousand Euros. (higher latent value on Maflow Iberica S.L. s net worth of 3,524 thousand Euros) (Text not from supplementary note in italics.) 2.3.4. 2007 events. Maflow Gummi A/S set up and Codan Group purchase Maflow Gummi A/S, Danish sub-holding, was acquired at a symbolic price and capitalised in February 2007. Subsequently, the shareholding in Codan Gummi A/S was acquired through Maflow Gummi A/S, thus gaining control over the Codan Group present in Europe and South East Asia. The value of the shareholding recorded in the balance sheet as at 31 December 2007 was of around 9,640 thousand Euros and financed availing of the medium/long term pool finance lines. The Codan Group is made up of the following companies: 47

Maflow Gummi A/S (Denmark) 100% Codan Gummi A/S (Denmark) Codan Gummi GmbH 100% 32% (Germany) Pongpara Codan Rubber Co.Ltd. (Thailand) Codan Gummi AB 100% 30% (Sweden) Toyoda Gosei Rubber Co.Ltd. (Thailand) Codan France SaS 100% (France) 80% P C Rubber Pte Ltd (Singapore) Codan Rubber A/S 100% 39% Pong Codan Rubber Sdn Bhd (Denmark) 10% (Malaysia) 100% 10% Codan-Ling Yun Co. 67% Pong Codan Mktg Sdn Bhd (China) (Malaysia) Codan Rubber Ltd. 100% P T Pong Codan 76% (UK) (Indonesia) Codan Argentina S.A. 100% (Argentina) Distlan Sa.De.CV. 100% (Mexico) Codan Rubber Mexico 100% (Mexico) Maflow Mexico S.A. de CV capital increase completed 48

In Quarter one of 2007 1,020 thousand USD were paid to Maflow Mexico S.A. de CV to complete the capital increase deliberated in 2006 (of around 236 thousand Euros equal to the increase deliberated and that part already paid in 2006) and on account for future capital increases. Maflow Components (Dalian) Co. Ltd capital increase completed During the course of February 2007 Maflow S.p.A. paid the residual amount of around 1,198 thousand Euros to complete Maflow Components (Dalian) Co. Ltd. s capital increase deliberated in 2006. Remaining shareholding in Maflow Polska Sp.zo.o. purchased from SIMEST Maflow S.p.A. purchased the remaining share (equal to 1.69%) of Maflow Polska sp.zo.o. s (Poland) company capital from Simest in the March-April 2007 period. Maflow S.p.A. purchased all Polish subsidiary shares with this operation. See following chapter for more details. Maflow Korea Ltd set up Maflow Korea Ltd, with registered office in Mannyun-dong, Shegu (Korea), was set up in May 2007, Maflow S.p.A. depositing around 36 thousand Euros for the entire company capital. Headquarter business transferred to Man Servizi S.r.l. Maflow S.p.A. s Board of Directors meeting of 21 November 2007 decided to reorganise the Headquarter function. The Board decided to assign MAN Servizi S.r.l., as part of the Maflow Group, controlled by Maflow S.p.A., the corporate service business including some equipment, dedicated staff and related credit and debit items. The Board of Directors believed this would enable Man Servizi S.r.l. to carry out services common to other companies of the Group. Following said decision Man Servizi S.r.l. s general Meeting of 20 December 2007 deliberated to increase its company capital from Euro 20,000 to Euro 100,000; Maflow S.p.A. paid said increase by contributing the Headquarter business valued at Euro 80,000 according to expert report in accordance with art. 2465 of the civil code (Acc. Doc. 3) 49

Said contribution came into force on 1 January 2008 and, following the aforesaid operation, MAN Servizi S.r.l., that already provided management services, including technical advice, to Maflow S.p.A. and some foreign companies of the Group, grew significantly as a result of gaining all functional areas (previously located in the parent Company Maflow S.p.A.) devoted to performing common Group services such as R&D, Human resources, Purchasing, Finance and Control, Legal Affairs, Logistics, IT etc. Therefore, the management service agreement, previously signed with other companies of the Group, was redefined to adapt it to the new functions and tasks, sharing group costs (increased by a spread) according to the added value of the individual companies that benefit from these services. In particular, revenues from MAN Servizi S.r.l. s management fees (therefore, services costs for companies of the Group) recorded in 2008, taken from MAN Servizi S.r.l. s approved balance sheet, are provided to help understand the economics behind the management service agreement: Maflow S.p.A.: Euro 5,100 thousand; Maflow France S.A.: Euro 1,550 thousand; Maflow Polska Sp.zo.o.: Euro 8,075 thousand; Maflow Iberica: Euro 678 thousand. Lastly, it should be noted that an agreement was stipulated between the parent company Maflow S.p.A. and subsidiary MAN Servizi S.r.l. to provide specific services for certain research projects (B-Cool, SMA and LOW Emission), specifically charged to Maflow S.p.A. and amounting to Euro 995 thousand in 2008. As regards the aforementioned intercompany management service relationships MAN Servizi S.r.l. s supplementary note and management report state that the business operations concluded during the year with the companies of the group were conducted at terms and conditions basically in line with those of the market, bearing in mind the OCSE guidelines on transfer pricing. Industrial property in Trezzano sul Naviglio sold 50

Maflow S.p.A. sold the Trezzano sul Naviglio (MI) plant, situated at via Boccaccio No 1 to LOCAT S.p.A. of Bologna (belonging to the Unicredito Italiano Bank Group) on 10 December 2007 for 9 million Euros. Said operation resulted in a capital gain of 5.866 million Euros, of which 4.500 thousand Euros was used to close a part of the debt with Banca Popolare di Verona e Novara, in accordance with the contract obligations. The sales contract, registered in Rome by the Notary, Mr. Gazzanti Pugliese reg. No 56223 / file No 32212, indicates that LOCAT S.p.A. purchased the property in question to then lease it to Virum S.r.l.at terms and conditions not set out in the contract, as agreed between the parties. On the same date, Virum S.r.l. stipulates a 6 year plus 6 year lease with Maflow S.p.A. prohibiting withdrawal (if not for serious reasons ) in the first six years and 12 months prior notice in the following six years. The rent is of Euro 795 thousand plus VAT, in six-monthly instalments of Euro 397.5 thousand plus VAT as from 1st January 2008. A rent of 48 thousand Euros is foreseen for the period from signing the lease to 31/12/2007. The overall amount for the entire contract term (12 years) will be of 9.54 million Euros excluding VAT plus annual ISTAT. ---------------------------------------------------------------------------------------------------------------- ------------------------------ (*). At end of 2007 the Group is structured as follows: Set up in 2007 Acquired in 2007 Not Operational 100% Maflow Finance 100% 100% SpA Milano Maflow SpA Servizi MAN Servizi Srl Milano Servizi 100% 100% 99,99% 100% 100% 100,00% 99,98% 100% 100% Maflow Maflow North Maflow Polska Maflow Mexico Maflow Do Brazil Components America Detroit S.P.ZO.O Maflow France Maflow Holland Maflow Gummi Maflow Korea Ltd SA del CV LtdA (Dalian) Co. Ltd USA Polonia SA BV A/S Danimarca Commerciale Produzione Produzione Produzione Commerciale Produzione Produzione Servizi Sub-holding 100% 100% 100% Maflow Iberica Codan Gummi SL Gruppo Codan A/S Danimarca Produzione Produttivo/Commerciale Sub-holding feb-07 Maflow Gummi A/S set up feb-07 Codan Gummi S/A (100%), that controls the Codan Group (leader in the marketing of rubber hoses and fittings in the automotive sector) is acquired through Maflow Gummi A/S feb-07 Remaing part of Maflow Components (Dalian) Co. Ltd s capital paid Q1 2007 Maflow Mexico capital increased March-April 2007 1.69% of Maflow Polska S.P.ZO.O purchased from Simest for 254,000 01/05/2007 Maflow Korea Ltd set up 10/12/2007 Trezzano sul Naviglio property (industrial plant) sold for 9 million Euro. 51

Data taken from balance sheet as at 31 December 2007 shows that values relating to those shareholdings recorded and comparison with respective share of the subsidiary s net worth are as follows: all values in thousands of Euros net Subsidiary Companies Man Servizi S.r.l. 20 337 149 20 337 (317) Maflow North America Inc 68 (15) 45 86 (15) 101 (1) (2) Maflow France SA 491 (6,352) (4,862) 397 (6,351) 6,748 (1) (5) Maflow Finance S.p.A. 1,000 1,077 (17) 1,112 1,077 35 (1) (9) Maflow Holland NV 213 (282) 117 213 (282) 495 (1) (8) Maflow Polska Sp.zo.o 18,923 46,687 1,756 26,339 46,687 (20,348) Maflow do Brasil Ltda 11,348 2,373 (1,508) 7.823 2,373 5,450 (1) (6) Maflow Component (Dalian) Co Ltd Maflow Mexico S.A. del C.V. Company Capital IFRS value Net Worth Balance sheet of which operating value Result (A) Share of Net worth (B) 3,979 1,479 (965) 4,316 1,479 2,837 (1) (2) (3) 628 (1,601) (2,314) 690 (1,601) 2,291 (1) (2) (4) Maflow Gummi As 67 9,070 3 9,640 9,070 570 (1) (7) Delta (A-B) Maflow Korea Ltd 36 1 (38) 41 1 40 (1) (2) Notes The reasons provided by directors to support the higher values entered as shareholdings compared to the respective share of the subsidiaries net worth can be deduced from the balance sheet that closed on 31 December 2007. (1) The differences do not seem to represent lasting losses bearing in mind each company s growth prospects. (2) The difference is justified by the company s start-up phase.. (3) It is expected that the start-up phase will be completed in 2009, year in which the company should begin to generate positive profits and cash flows. (4) It is expected that the start-up phase will be completed in 2010, year in which the company should begin to generate positive profits and cash flows. (5) The year s negative result is mainly due to a reorganisation plan in progress, whose benefits are expected in future years. It is noted that Maflow France S.A. has assets whose current value is over that recorded in the balance sheet as at 31 December 2007. In particular Maflow France S.A. controls 52

99.98% of Maflow Iberica S.L. with registered office in Guarnizo (Spain), whose net worth as at 31 December 2007 was of 7,007 thousand Euros and operating result 210 thousand Euros. Said shareholding is recorded in Maflow France S.A. s balance sheet at a value of 3,273 thousand Euros (greater latent value on Maflow Iberica S.L. s net worth of 3,734 thousand Euros). Moreover, the company owns (with a lease-back contract) a building, whose current value, estimated by a recent expert report, is over the residual value by around 5 million Euros. (6) Restructuring and reorganisation carried out in 2007 [omissis] return to profits by 2009. (7) The difference between net worth and balance sheet value is due to charges sustained by Maflow S.p.A. to purchase the Codan Group charged to the value of the holding. The Codan Group assets acquired in 2007 [omissis] were assessed at a significantly higher value to that entered for Maflow Gummi A/S. (8)..it is expected to see profits in following years. (9)..basically not a going concern (Text not from supplementary note in italics) 2.3.5. 2008 events. Spaces and services subleased to Man Servizi S.r.l. On 24 January 2008 the Company, as leaser, stipulated a lease with Man Servizi S.r.l. (granting the aforesaid use of the offices and equipment so that staff transferred to Man Servizi S.r.l., as a result of the business contributed at the end of 2007, continue to perform their corporate functions to the benefit of the group. The contract is for 6 years as from 1 st January 2008, renewable for a further 6 years. The rent agreed is of 962 thousand Euros, of which 124 thousand Euros to sublease the spaces and 838 thousand Euros for additional services (security, caretaking, cleaning, warehousing, use of consumables, company cars, furniture, furnishings, telephone lines and research and development equipment). ---------------------------------------------------------------------------------------------------------------- ------------------------------------ (*) 53

Capital in Maflow Components (Dalian) Co. Ltd underwritten and subsequent partial transfer During January 2008 the Company underwrote a capital increase of the subsidiary company of 1,219 thousand Euros. Subsequently in the month of November, Maflow S.p.A. transferred 49% of Maflow Components (Dalian) Co. Ltd. to Codan Gummi A/S for around 2,838 thousand Euros; the operation generated a capital gain of around 126 thousand Euros noted in the year s profit and loss account. Maflow KK set up During the course of the year an amount of 230 thousand Euros was deposited to set up Maflow KK with registered office in Tokyo (Japan), company controlled 100% by Maflow S.p.A. Credits with subsidiaries used It is noted that during 2008 increases at the expense of the shareholdings amounting to 15.4 million Euros were recorded, of which the majority (Euro 10.8 million) resulting from the use of commercial and financial credits with subsidiaries to contribute to the future capital increase account, as specified in the accompanying letters. The aforementioned operations are summarised hereunder: - Maflow France S.A.: this operation relates to credit resulting from intercompany finance claimed by Maflow S.p.A., of the nominal value of Euro 1,900,000.00 (Acc. Doc. 4a). It is noted that the contract stipulated (Acc. Doc. 4b) contains a so-called return to better luck clause therefore if the French company s situation were to improve the contribution would be considered void; - Maflow Components (Dalian) Co. Ltd.: this operation relates to credit for intercompany finance claimed by Maflow S.p.A., amounting to USD 2,790,000.00 (Acc. Doc. 5); - Maflow Mexico SA de CV.: this operation relates to credit for intercompany finance claimed by Maflow S.p.A., amounting to Euro 3,370,820.13 as well as credit for payment to future capital increase account of USD 4,705,000.00 (Acc. Doc. 6); 54

- Maflow do Brasil Ltda.: this operation relates to intercompany commercial credits claimed by Maflow S.p.A. amounting to Euro 2,020,145.02 (Acc. Doc. 7). ---------------------------------------------------------------------------------------------------------------- -- --------------------------------------------------- (*) At the end of 2008 the Group was structured as follows: Set up in 2008 Partial intercompany transfer 2008 Not Operational 100% Maflow Finance 100% 100% SpA Milano Maflow SpA Servizi MAN Servizi Srl Milano Servizi 100% 100% 99,99% 100% 100% 100,00% 99,98% 100% 100% Maflow North Maflow Polska Maflow Mexico Maflow Do Brazil Maflow KK America Detroit S.P.ZO.O Maflow France Maflow Holland Maflow Gummi Maflow Korea Ltd SA del CV LtdA (Japan) USA Polonia SA BV A/S Danimarca Commerciale Produzione Produzione Commerciale Commerciale Produzione Produzione Servizi Sub-holding 100% 51% Maflow Components (Dalian) Co. Ltd Produzione Maflow Iberica SL Produzione 100% 49% Codan Gummi A/S Danimarca Sub-holding 100% Maflow KK Japan set up 49%of Maflow Components (Dalian) Co. Ltd sold Gruppo Codan Produttivo/Commerciale Data taken from balance sheet as at 31 December 2008 shows that values relating to those shareholdings recorded and comparison with respective share of the subsidiary s net worth are as follows: all values in thousands of Euros 55

Subsidiary Companies Company Capital Values according to IFRS on approved balance sheets or draft budgets or accounts for consolidation purposes Net Worth Balance of which operating sheet value result (A) Share of net worth (B) Delta (A-B) Man Servizi S.r.l. 100 564 148 100 564 (464) Maflow North America Inc. 56 36 49 86 36 50 Maflow France SA 491 (9,697) (2,306) 0 (9,697) 9,697 (1) (2) (3) (4) Maflow Finance S.p.A. 1,000 1,077 0 1,112 1,077 35 Maflow Holland NV 210 (139) 143 0 (139) 139 (2) (4) Notes aflow Polska Sp.zo.o 16,668 11,282 (12,690) 11,282 11,282 0 (4) Maflow do Brasil Ltda 8,205 1,225 (1,254) 2.676 1,225 1,451 (1) (4) Maflow Component 5,432 1,338 (1,665) 1,747 682 1,065 (1) (4) (Dalian) Co Ltd Maflow Mexico S.A. del 690 1,670 (3,304) 1,672 1,670 2 (4) C.V. Maflow Gummi As 67 9,077 7 9,640 9,077 563 Maflow Korea Ltd 39 36 40 41 36 5 Maflow KK (Japan) 275 83 (182) 279 83 196 The reasons provided by directors to support the higher values entered as shareholdings compared to the respective share of the subsidiaries net worth can be deduced from the balance sheet that closed on 31 December 2008. (1) Data relating to Maflow France S.A., Maflow do Brasil Ltd and Maflow Component Dalian Co. Ltd does not consider remission of debts amounting to 1,900, 2,020 and 2,005 thousand Euros. (2) Moreover, in the case of Maflow France and Maflow Holland, relative holding reorganisation funds entered in Maflow Sp.A. s balance sheet as at 31 December 2008,respectively equal to 3,255 and 124 thousand Euros, must be considered. (3) In the case of per Maflow France the difference is justified by the difference in the net worth of Maflow Components Iberica owned by Maflow France. (4) The value of the subsidiaries has been depreciated in part adjusting it to the net worth, due to the current uncertainty as to their possible recovery (lasting loss in value). Unlike previous years, the directors chose, in 2008, to adjust the value of shareholdings to their net worth; in particular, the 39.5 million Euro depreciation (including 3.4 million Euros 56

earmarked to the risk fund for subsidiary reorganisation set aside in the liabilities of the asset and liability statement), of Maflow France S.A., Maflow do Brasil Ltda, Maflow Holland NV, Maflow Polska Sp.zo.o, Maflow Components (Dalian) Co. Ltd. and Maflow Mexico S.A. De Cv. is justified, according to that indicated by the management in the supplementary note, by losses deemed to be lasting compared to the cost entered in the balance sheet, as a result of the global crisis. The extent of the depreciation is determined according to the estimated residual value of the subsidiary, adjusting the relative value to its net worth. As for Maflow France and Maflow Holland, due to their negative net worth, both the book value was depreciated and a risk fund of the same amount set aside in the asset and liability statement for subsidiary reorganisation to bear in mind future charges to make up the deficit. 2.3.6. 2009 events. Draft balance sheet prepared whilst lacking going concern requirements. The petition filed by Maflow S.p.A. states that at the meeting of 6 March 2009, Maflow S.p.A. s Board of Directors ascertained the existence of those requirements set out in art. 2447 of the civil code and therefore called Maflow s shareholders meeting (ordinary and extraordinary) to approve the balance sheet as at 31 December 2008 and adopt those measures set out in art. 2447 of the civil code. During the course of the aforementioned meeting of 6 March 2009 the Board of Directors also noted that Maflow s lack of cash flow, combined with the negative conditions of the market and impossibility to rationalise borrowing with the banks made urgent recapitalisation of Maflow, necessary as otherwise it would become insolvent. Therefore, Maflow s Board of Directors thought it best to appoint external consultants to identify appropriate methods to manage Maflow s crisis, with a view to mitigating and safeguarding the interests of it workers and other creditors, including therein assessing the opportunity of filing a petition for extraordinary administration of failing large-scale enterprises in accordance with L. D. No 270 of 8 July 1999 and subsequent amendments. The year s draft balance sheet as at 31 December 2008, including the Board of Directors report but not those of the Board of Auditors and Auditing Company was filed at the 57

company s registered office on 17 March 2009, subsequently, on 1 st April 2009 the Board of Directors approved a new draft balance sheet bearing in mind the Board of Auditors and Auditing Company s comments as regards the lack of those requirements necessary to guarantee the company s future as a going concern; the new draft balance sheet was filed at the company s head office on 3 April 2009. The Auditing Company and Board of Auditors removed their comments as to the company s future as a going concern. The Auditing Company s report re-issued on 3 April 2009 (replacing that issued on 27 March 2009) concludes by saying it is impossible to express an opinion on the balance sheet as at 31 December 2008 due to two limitations with regards to: lack of auditor conclusions on the balance sheets of some of the subsidiaries; impossibility of one of the auditors to express an opinion on the 2008 balance sheet of one of the subsidiaries; Impossibility to carry out those auditing procedures necessary in real time for the shareholders meeting called on 6 April 2009, bearing in mind the fact that the draft balance sheet, prepared by the Board of Auditors on 1 st April 2009, was handed to the Auditing Company on 3 April 2009. As for the Board of Auditors its report states: - KPMG S.p.A. s failure to approve the shareholding values entered means this Board of Auditors is unable to approve the financial fixed asset values in accordance with article 2426 of the Civil Code, currently amounting to 28.2 million Euros (net of the relative fund), bearing in mind that subsidiary company continuity could also be prejudiced"; - the critical situation currently expressed by the company s net financial standing and lack of positive evidence of relationships with the Financial Institutes being redefined make appropriate company recapitalisation inevitable or, failing this, ascertaining insolvency and adopting the necessary measures. The Board of Auditors concluded their report by saying: Having stated this, the Board of Auditors is unable to approve the balance sheet as at 31 December 2008 as unable to complete the auditing procedures on the company s and subsidiary companies accounts. As regards the company s current net financial position the Board of Auditors invites the Shareholder to recapitalise the company immediately, highlighting that, failing this, the 58

directors should adopt the necessary measures immediately in accordance with art. 2484 of the Civil Code, or, if insolvency is ascertained, in observance of the Bankruptcy Law and related regulations. Maflow s shareholders meeting was held on 6 April 2009, the ordinary part to approve the draft balance sheet as at 31 December 2008 and an extraordinary part to adopt those measures set out in art. 2447 of the Civil Code. ( 5 ). Displays of interest. ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------- [omissis]----------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- ( 5 ) Source: Petition to declare the company insolvent in accordance with arts. 3and 5 L.D. 270/1999 filed by Maflow S.p.A. on 10 April 2009. 59

---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------- Liquidator appointed and petition filed in accordance with L.D. 270/1999 (Prodi-bis law) During the extraordinary part of Maflow S.p.A. s Shareholders meeting of 6 April 2009 the Chairman of the Board of Directors, acknowledging the partner was unable to recapitalise the Company, explains the need for it to be wound up. The extraordinary Shareholders Meeting unanimously approves to wind up the Company and, on 7 April 2009, those directors in office up to then cease and a liquidator, Mr. Giovanni La Croce, is appointed granting him the widest powers of ordinary and extraordinary administration, including therein those to apply for proceedings with more than one claimant in accordance with our law. Moreover, the Chairman of the Board of Directors informs those present that he has initiated those activities necessary to file a petition in accordance with L.D. 270/99 ( Prodi bis ); the Meeting recommends the appointed liquidator pursue proceedings in accordance with L.D. 270/99, however without omitting to verify the feasibility of shows of interest and/or offers from possible third party investors. The declaration of the reasons for liquidation was registered at the Milan Company Register on 7 April 2009. The liquidator, having examined the balance sheet as at 31 December 2008, approved by Maflow s Meeting, acknowledged the need to wind up the company within proceedings with more than one claimant aimed at safeguarding company continuity and the integrity of production equipment and therefore initiated activities to declare Maflow insolvent and thus be granted Extraordinary Administration. 60

In light of the above, a petition to declare Maflow S.p.A. insolvent in accordance with arts. 3 and 5 of L.D. No 270 of 8 July1999 was filed at the Ordinary Court of Milan, Bankruptcy Division on 10 April 2009. At the same time, a petition to declare Maflow Polska Sp.zo.o insolvent in accordance with arts. 3 and 5 of L.D. No 270 of 8 July1999 was also filed at the same Court. The Court of Milan declares the companies insolvent with sentences No 260/09 and No 261/09 of 11 May 2009 and appoints for both petitioners the following three Commissioners: Messrs. Stefano Coen, Francesco Pensato and Vincenzo Sanasi d Arpe. Moreover, the Court of Milan orders company management be left to the company declared insolvent. 61

PART THREE MAFLOW POLSKA SP.ZO.O. OPERATIONS 3.1. Sources of information used in reconstructing the company s extraordinary operations. It is best to highlight, in chronological order, Maflow Polska Sp.zo.o. s main operations in the period from 2004 to 2008. The sources of information used to reconstruct the Company s operations described hereunder include: Man Automotive Components S.p.A. s balance sheet as at 31 December 2004; Manuli Auto Polska Sp.zo.o. balance sheet as at 31 December 2005; Manuli Auto Polska Sp.zo.o. s balance sheet as at 31 December 2006; Maflow Polska Sp.zo.o. s balance sheet as at 31 December 2007; Maflow S.p.A. s consolidated balance sheet as at 31 December 2007; Informal interview with the Group management; Manuli Rubber Industries S.p.A. s balance sheet as at 31 December 2004; Maflow Polska Sp.zo.o. s petition to be declared insolvent in accordance with L.D. No 270/99; Sentence of the Court of Milan No 261/2009 declaring Maflow Polska Sp.zo.o. insolvent; Maflow Polska Sp.zo.o. s inspection obtained from the Chamber of Commerce on 27 May 2009; Man Automotive Components S.p.A. s memorandum of Association; Contract to purchase the shareholdings in Manuli Automotive S.p.A. and Manuli Auto International S.A. between Man Automotive Components S.p.A. and Manuli Rubber Industries S.p.A. dated 2 July 2004; Minutes of Man Automotive Components S.p.A. s extraordinary shareholders meeting of 28 July 2004; Minutes of Manuli Automotive S.p.A. s extraordinary shareholders meeting of 28 Septeber 2004; 62

Minutes of Manuli Automotive S.p.A. s Board of Directors meeting of 7 November 2005 (purchase of shareholdings from Manuli Auto International S.A.); Deed transferring shareholdings held by Manuli Auto International S.A. to Manuli Automotive S.p.A. dated 17 November 2005; Minutes of Manuli Auto International S.A. s general meeting of 9 December 2005; Limited audit report on Manuli Auto International S.A. s accounts as at 9 December 2005; 3.2. Chronology of significant events. 3.2.1. 2004 events. Maflow S.p.A. (former Man Automotive Components S.p.A.) purchases the shareholdings in Manuli Auto International S.A. and Manuli Automotive S.p.A. that respectively hold 44% and 51% of Manuli Auto Polska Sp.zo.o. from Manuli Rubber Industries S.p.A on 3 August 2004. The aforementioned company gains indirect control over Manuli Auto Polska Sp.zo.o. with 95% undertaking to purchase the remaining 5% from Simest within the following three months. See previous chapter for more detail. At the end of 2004 the Group is structured as follows: Purchased in 2004 Man Automitve Components SpA 100% 100% 100% Manuli Polska Manuli Auto Manuli 51% S.P.ZO.O 44% International SA 18,8% Automotive SpA Polonia Luxemburg Manuli Auto Iberica SL 100% 100% 99,997% 100% Manuli Automotive 0,003% Components Manuli Auto Manuli Auto Do Manuli Auto (Dalian) Co. Ltd Holland BV Brazil LtdA France SA 81,2% Information summary 03/08/2004 Man Automotive Components S.p.A. gains control over Manuli Automotive SpA and Manuli Auto International SA 63

Data taken from balance sheet as at 31 December 2004 shows that values relating to those shareholdings recorded and comparison with respective share of the subsidiary s net worth are as follows: Values in local currency of subsidiary s country of residence Indirect Subsidiaries Company Capital Net Worth Profit /Loss % Owned Currency Manuli Auto Polska Sp.zo.o 68,000,000 93,245,038 50,347,502 95% PNL The values shown in the table are taken from the Balance Sheet as at 31 December 2004. 3.2.2. 2005 events. MAN Automotive Components S.p.A. takes over Manuli Automotive S.p.A. The merger project, in accordance with art.2501-ter of the civil code, was drawn up on 14 March 2005, said project was filed at the Company Registry on 15 March 2005 and registered therein on 21 March 2005; the project in question involved MAN Automotive Components S.p.A. (now Maflow S.p.A.) taking over Manuli Automotive S.p.A.. The two companies involved in the operation held general meetings (Notary s Mr. Enrico Lainati register No 2207 / file No 1103 and reg. No 2208 / file No 1104) on 20 April 2005. They decided to approve the merger, changing the company name from Man Automotive Components S.p.A. to Manuli Automotive S.p.A. As a result of the merger, 51% of the shareholdings in Manuli Auto Polska Sp.zo.o.were transferred to the new company Manuli Automotive S.p.A. See previous chapter for more detail. Manuli Auto International S.A. (Luxembourg) shareholding sold to Manuli Automotive S.p.A. Manuli Automotive S.p.A. purchased, amongst other things, 44% of Manuli Auto Polska Sp.zo.o from Manuli Auto International S.A. (Luxembourg), on 7 November 2005. Said purchase also included intergroup credits and debits. 64

As a result of the acquisition Manuli Automotive S.p.A now has direct control. The deed transferring ownersip of the shareholdings and relative credits and debits is signed on 17 November 2005. See previous chapter for more detail. At the end of 2005 the Group was structured as follows: 44% purchased and 51% from merger. 14/03/2005 Project to merge Manuli Automotive SpA into MAN Automotive Components SpA. 20/04/2005 Resolution to merge Manuli Automotive SpA into MAN Automotive Components SpA. 27/06/2005 Deed merging Manuli Automotive SpA into MAN Automotive Components SpA Notary Enrico Lainati Register No 2208/1104 and Variation in corporate purpose. 01/11/2005 Manuli International SA sells 44% of Manuli Polska S.p.ZO.O. 01/11/2005 Intercompany credits and debits transferred from Manuli International SA Data taken from balance sheet as at 31 December 2005 shows that values relating to those shareholdings registered and comparison with respective share of the subsidiary s net worth are as follows: Value in thousands of Euro Subsidiary Companies Company Capital Net Worth of which operating result Balance Sheet value Manuli Auto Polska Sp.zo.o 17,619 42,188 17,297 25,401 40,079 (14,678) (A) Share of net worth (B) Delta (A-B) Notes 3.2.3. 2006 events. 65

SIMEST purchases shareholding in Maflow Polska Sp.zo.o. Sale of the first tranche of the share of Maflow Polska Sp.zo.o. s capital from Simest of the nominal value of PLN 2,250,000, equal to 3.309% of its capital of PLN 68,000,000, was formalised in March 2006 paying a balance of 48 thousand Euros, calculated according to the contractual agreements with Simest stipulated by Manuli Automotive SpA on 30 November 2001, supplementing the 628 thousand Euros already paid in 2005. The management report accompanying the parent company s 2006 balance sheet indicate that, during the first months of 2007 Maflow S.p.A. started negotiations to purchase the remaining shares in Maflow Polska Sp.zo.o., equal to around 1.69% of the company capital, commitment already indicated in the memorandum accounts as at 31 December 2006. At the end of 2006 the Group was structured as follows: % owned modified Not going concern Maflow Finance 100% 100% SpA Milano Maflow SpA MAN Servizi Srl Milano 100% 99,99% 100% 100% 98,31% 99,98% 100% Maflow Maflow North Maflow Polska Maflow Mexico Maflow Do Brazil Components America Detroit S.P.ZO.O Maflow France Maflow Holland SA del CV LtdA (Dalian) Co. Ltd USA Polonia SA BV 100% Maflow Iberica SL mar-06 Simest sells off 3.309% of Maflow Polska S.P.ZO.O (2,250,000 PLN) to Maflow S.p.A. Data taken from balance sheet as at 31 December 2006 shows that values relating to those shareholdings recorded and comparison with respective share of the subsidiary s net worth are as follows: Values according to local standards of Subsidiaries country of residence. Values in Euro/thousand. Subsidiaries. Company Capital. Net Worth. Of which operating result. Balance sheet value. Share of Net Worth. 66

(1) Net worth has already been reduced by the dividend that will be distributed in 2007 in accordance with the board of directors resolution. 3.2.4. 2007 events. SIMEST purchases remaining share of Maflow Polska Sp.zo.o Maflow S.p.A. proceeded to purchase the remaining share (equal to 1.69%) of Maflow Polska sp.zo.o. s (Poland) company capital from Simest in March-April 2007, for a nominal value of PLN 1,149,200 equal to 1.69% of the total company capital, the amount agreed on is of 254 thousand Euros.. Maflow S.p.A. purchases all Maflow Sp.zo.o. shares with this operation. At the end of 2007 the Group is structured as follows: Not going concern 100% Maflow Finance 100% 100% SpA Milano Maflow SpA Services MAN Servizi Srl Milano Services 100% 100% 99,99% 100% 100% 100,00% 99,98% 100% 100% Maflow North Maflow Polska Maflow Mexico Maflow Do Brazil Maflow KK America Detroit S.P.ZO.O Maflow France Maflow Holland Maflow Gummi Maflow Korea Ltd SA del CV LtdA (Japan) USA Polonia SA BV A/S Danimarca Sales Production Production Sales Sales Production Production Services Sub-holding 100% 51% Maflow Components (Dalian) Co. Ltd Production Maflow Iberica SL Produzione 100% 49% Codan Gummi A/S Danimarca Sub-holding 100% Codan Group Production/Sales Data taken from balance sheet as at 31 December 2007 shows that values relating to those shareholdings recorded and comparison with respective share of the subsidiary s net worth are as follows: 67

all values in thousands of Euro Subsidiary Companies Company Capital IFRS value Net Worth of which operating result Balance Sheet value (A) Share of Net worth (B) Delta (A-B) Maflow Polska Sp.zo.o 18,923 46,687 1,756 26,339 46,687 (20,348) Notes 3.2.5. 2008 events. Part of Codan Group production systems transferred to Maflow Polska Sp.zo.o. We learnt, through informal conversations with the management, that part of the Codan Group production systems in South America were transferred to Maflow Polska Sp.zo.o. At the end of 2008 the Group was structured as follows: Not going concern 100% Maflow Finance 100% 100% SpA Milano Maflow SpA Servces MAN Servizi Srl Milano Services 100% 100% 99,99% 100% 100% 100,00% 99,98% 100% 100% Maflow North Maflow Polska Maflow Mexico Maflow Do Brazil Maflow KK America Detroit S.P.ZO.O Maflow France Maflow Holland Maflow Gummi Maflow Korea Ltd SA del CV LtdA (Japan) USA Polonia SA BV A/S Danimarca Sales Production Production Sales Sales Production Production Services Sub-holding 100% 51% Maflow Components (Dalian) Co. Ltd Production Maflow Iberica SL Production 100% 49% Codan Gummi A/S Danimarca Sub-holding 100% Gruppo Codan Production/Sales Data taken from balance sheet as at 31 December 2008 shows that values relating to those shareholdings recorded and comparison with respective share of the subsidiary s net worth are as follows: Values in thousands of Euro Values according to IFRS on approved balance sheets or draft budgets or accounts for consoliation purposes Subsidiary Companies Company Capital Net Worth of which operating result Balance sheet value (A) Share of net worth (B) Delta (A-B) Notes Maflow Polska Sp.zo.o 16,668 11,282 (12,690) 11,282 11,282 0 68

Maflow Polska Sp.zo.o. mid-year profit distribution In accordance with Management Board resolution of 31 August 2008 (Acc. Doc. 8), Maflow Polska Sp.zo.o. ordered payments, in favour of its sole partner Maflow S.p.A., of zloty 18,496,000.00 (corresponding to around Euro 4,400,000.00) as advance on future 2008 dividends. It is noted that the aforementioned dividend was then turned into finance as the 2008 balance sheet does not show sufficient profits or reserves to distribute profits. Moreover, Maflow Polska Sp.zo.o. accounts show other credits with Maflow S.p.A. for short term finance. ---------------------------------------------------------------------------------------------------------------- -------------------------------- (*). 3.2.6. 2009 events. In light of the above, a petition to declare Maflow Polska Sp.zo.o insolvent in accordance with arts. 3 and 5 of L.D. No 270 of 8 July1999 was filed, at the same time as that for Maflow S.p.A., at the Ordinary Court of Milan, Bankruptcy Division on 10 April 2009. The Court of Milan declares the companies insolvent with sentences No 260/09 and No 261/09 of 11 May 2009, and appoints for both petitioners the following three Commissioners Messr. Stefano Coen, Francesco Pensato and Vincenzo Sanasi d Arpe. Moreover, the Court of Milan ordered company management be left to the company declared insolvent. It is noted that, with document notified on 10 June 2009, Bank Handlowy W Warszawie S.A., part of the Citibank Group, challenged sentence No 261/09 with which the Court of Milan declared Maflow Polska Sp.zo.o. insolvent. Moreover, it is noted that a creditor requested that secondary insolvency proceedings be opened in accordance with art. 3, subsection 3, of EC Regulation 1346/2000 with petition deposited at the Regional Court of Katowice. 69

70

PART FOUR CAUSES OF THE INSOLVENCY 4.1. The economic and structural causes of the insolvency. Generally, insolvency is the result of a series of economic variables, in some cases closely linked and in others completely independent, however whose exact influence is often hard to identify after the event. It is therefore difficult for entrepreneurs to identify which company events or strategic industrial policies they should have avoided or tackled differently to prevent the company s difficulties. Therefore, it is very hard to pinpoint, with any degree of certainty the causes of insolvency of a company on which a group of companies depends. Moreover, the evident difficulty in identifying a cause/effect ratio for such a complex event as insolvency becomes extremely problematic if, as in the case in question, it is combined with the complex company history described in the previous chapters. Having said this, it should be noted that the Group, throughout the period in question had a vast amount of debt ( 6 ) that, although managed effectively whilst the automotive sector was buoyant, immediately proved difficult as soon as it suffered a decline as a result of the market trend. In fact, the automotive sector suffered an initial decline at the beginning of 2008 not even sparing the primary OEMs ( 7 ). The negative trend of the reference market resulted in a reduction in orders and thus a significant fall in turnover. Moreover, this initial crisis was combined with the increased cost of raw materials thus worsening an already precarious financial situation. In this context it is easy to understand how the economic variables irrespective of the entrpreneur s wishes combined with a rigid production cost structure (set to activity volumes way over those actually achieved) and debt accrued as a result of the abovementioned company operations, lead to a reduction in the Group s profitability. ( 6 ) Debt that stratified over time. ( 7 ) OEM is acronym for Original Equipment Manufacturer, expression also used in the automotive sector in the context of industrial production processes. 71

4.2. Balance sheet analysis. Balance sheets provide third parties (stakeholders, financers, suppliers, partners, debenture holders etc.) with information on company assets and liabilities. However, entrepreneurs can also use this information to understand the company s state of health and assess whether any changes need to be made to company policies. In Italy joint stock companies must draw up and file their balance sheets. This procedure is governed by the Civil Code and National Italian Accounting Standards and, as regards listed companies, international accounting standards (IAS). Balance sheets consist of the following compulsory documents: Asset and Liability statement, Profit and Loss Account and Supplementary Note. The regulations governing balance sheets are those set out in articles from 2423 to 2426 of the Civil Code, as amended by Legislative Decree No 127 of 9 April 1991 in acknowledgement of EEC Directive IV and subsequent amendments made by Legislative Decree No 6 of 17 January 2003 reforming company law. In particular, the law states that the supplementary note must contain a series of in-depth information on the items entered therein. However, the asset and liability statement and profit and loss account do not provide management type information in the way they are structured in accordance with the law. Therefore, the accounting layout prescribed by the law must be interpreted differently in order to extrapolate management type data both from the asset and liability statement and profit and loss account. Reclassification could be defined as a way of better interpreting company dynamics thus favouring the comparison of data over time (in the case of data used by the same company in different balance sheets) and/or space (in the case of different companies) by identifying a series of intermediate results. It should be noted that reclassification does not aim to ascertain the quality and truth of the data entered. As regards reclassification methods, it should be noted that balance sheet analysis is constantly being updated and developed. In fact, it is not necessary to identify an absolute method as it is up to the analyst to choose the most suitable model for the purpose. The most widespread method used for reclassifying the profit and loss account is production value and added value as most similar to that set out in the Civil Code. In particular, 72

reclassifying the profit and loss account according to an added value model highlights how much of the sales revenue, net of costs sustained, is turned into cash. Lastly, it should be noted that business analyses should always consider the consolidated balance sheet, if drawn up, in order to analyse the economic values net of intercompany relationships. a) Profit and loss account reclassification. The main principle that should guide analysts in their work is whatever the configuration adopted in drawing up the Profit and Loss Account the economic results must reconcile at an operating income level. This added value criterion, reclassification method often used to assess how the operating result was generated and moreover the only one that can easily be used starting from data present in civil law balance sheets, highlights the most significant margins in the profit and loss account and enables results to be analysed in detail. According to this model, the Profit and Loss Account maintains its step-by-step structure that is reaching the operating result progressively by passing through intermediate results necessary for correct analysis. The production value and added value profit and loss account layout can be summarised as follows: 73

Production value and added value Profit and Loss Account Sales Revenue net of discounst, returns and allowances +/- Variations in stock of finished and semi-finished products and those in progress +/- Variations in work in progress + Increases in fixed assets due to internal work + Other proceeds and revenue Production value - Cost to purchase external production factors Added value - Employee related costs - Gross operating margin (EBITDA) Net operating margin (EBIT) +/- Balance financial management Current income +/- Balance additional management +/- Balance extraordinary management Pre-tax income - Income taxi Net income The above layout satisfies a basic principle: separating typical from atypical management. In particular overall company management is dividend into three macro-areas: typical management: relating to typical company activities including all purchasingtransformation-sales cycle related items; financial management: relating to the management of financial means including interest on third party capital borrowed and any resources borrowed; extraordinary management: this generally includes all economic items relating to operations that do not fall within normal entrepreneurial activities. A further item is often added to the above-mentioned management areas when revenue and cost flows do not refer to typical purchasing, transformation and sales activities. This macroarea is called additional management. This is only found, by way of example, in the case of 74

civil buildings leased to third parties or financial flows linked to the investment of vast liquid assets generated by the management. Now let us examine each of the intermediate results that are obtained from this type of reclassification: production value: this is the algebraic sum of sales revenue, net of discounts, returns and allowances, variation in stock of finished products and those in progress, variation in fixed assets in progress for work to order or in economy. This value represents actual production activities carried out by the company or wealth created during the course of the year gross of those factors that have contributed to its achievement, whether intended for distribution outside the company (as normally happens) or stock, work in progress to order or to increase those fixed assets intended for internal use; added value: this is the difference between the production value and external production factors used in the production process. Typically they include: raw material consumption, service purchasing costs, enjoyment of third party assets and sundry management charges. Added value identifies the company s margin net of production costs, without considering staff and depreciation costs. This margin is particularly significant as it expresses the wealth that, following production, may be distributed amongst those taking part in the activities carried out by the company; gross operating margin (EBITDA, earning before interest taxes depreciation amortization): this margin, resulting from the difference between added value and labour costs, is highly significant as it could almost be considered an operating cash flow (if all revenue and costs were collected and paid, the cash flow generated by the operating management would be the gross operating margin) and when compared with the turnover indicates the company s theoretical capacity to produce cash (finance itself). Moreover, this value is special in the fact that, not including highly subjective items such as depreciation and provisions, it is more immune to budget policies. The EBITDA is a very significant value for assessing a company s ability to meet its commitments. In fact, it indicates a company s ability to finance itself and therefore generate the resources necessary to pay sources of finance; net operating margin (EBIT, earning before interest and taxes): this margin is obtained subtracting depreciation and funds from the EBITDA. It expresses the economic 75

result of company transformation, therefore the result the company is able to generate with typical management, without bearing in mind financial, extraordinary and fiscal aspects. This margin measures the operating result before remunerating those who hold the capital (credit, with financial charges, risk, with net profit) and the State (taxes); current income: this is the algebraic sum of Net Operating Margin and financial management; pre-tax income: this is obtained adding current income to extraordinary management; net income: this is obtained subtracting taxes to be paid from gross profit. b) Asset and liability statement reclassification. As regards asset and liability statements, these are revised according to the data needed. Therefore, two different models may be constructed: management type and financial type asset and liability statements. In particular, management type asset and liability statements define, on the one hand, investments, that is how company resources are used, divided according to their propensity to remain within the company or renew themselves cyclically according to the production process. Whereas in the finance related section, that is those subjects that have contributed capital to the company, a distinction is made between third party capital related sources (finance in the true sense of the word) and those linked to shareholders underwriting capital. Asset and liability statements aim to highlight what part of the capital, whether it be rapid or slow turnover, is invested in typical company management (also called operating) and what part represents additional/functional type investments. c) Management type asset and liability statement. Asset and liability statements reclassified according to the management criteria adopt a logic linked to the nature of the investment or source. Investments are studied according to their function. If relating to assets necessary to run the company production cycle properly they are operating investments; whereas, if they relate to investments not linked to the production cycle they are financial or extra-characteristic investments. Sources of finance are divided according to whether they originate or not from the production process. Debts arising during the normal purchasing-production-sales cycle are operating 76

sources; those resulting from the desire to obtain external sources of finance to be invested within the company are financial sources; lastly come the net worth items. Therefore, the reclassification procedure follows a functional logic. In practice, items need to be reorganised according to: a) their involvement in typical company operating activities; b) their rotation distinguishing between investments and circulating and structural sources. ASSETS Receivables to customers Commercial circulating capital Intergroup credits Stock Accruals and deferrals Intangible fixed assets Net structural investments Additional investments Tangible fixed assets Strategic shareholdings Non-strategic financial fixed assets Financial credits Building for civil use Cash Liquid assets Cheques Investments are divided into: rapid turnover investments: this group includes receivables to customers, receivables to subsidiaries, affiliates and parent companies, stock of raw materials, finished and semifinished products and those in progress, advances to suppliers, receivables to others and accruals and deferrals; structural investments: these include all fixed asset items to be used within the company production cycle, such as intangible fixed assets, tangible fixed assets (unless they are purely additional investments) and part of the financial fixed assets. In this regard, it 77 Bank and postal accounts

should be noted that fixed investments should only be included in this group if relating to shareholdings in companies that are of strategic importance for company activity. Whereas, shareholdings that are solely a financial investment should not be included; additional investments: this group includes all investments made outside typical company activities, such as for example those in companies not operating within company activities (not strategic), fixed assets not of industrial use, receivables to subsidiaries, affiliates and parent companies of a financial nature, other securities and shareholdings held for investment purposes only; liquid assets: this includes cash balances, cheques and bank and postal current accounts as well as financial assets that are not tied up. 78

SOURCES OF FINANCE Operating sources Payables to suppliers Intergroup commercial debts Tax debts and tax fund Structural sources Severance pay fund Reserve for risks and charges Financial sources Debentures and other financial debts Payables to banks Intergroup financial debts Capital Net worth Paid-in surplus reserve Write-up reserve Profit reserves Legal reserve Statutory reserve Profits (losses) carried forward Operating profits (losses) Sources are divided into: operating sources: these include payables to suppliers, advances from customers, payables to subsidiaries, affiliates and parent companies of a commercial nature, tax debts and those with social security institutes, the tax fund if relating to taxes resulting from typical activities (tax funds resulting from inspections and sanctions are excluded); structural sources: these typically include items relating to the reserve for risks and charges and severance pay. There are various indications in law that lean towards including these inn operating liabilities; however, said funds, even though of an operational importance, are usually of a structural nature (for example the severance pay fund is linked to work, typically a component of the company structure ). This leads to consider these sources as structural sources and not commercial liabilities; financial sources: these include all those liabilities of a financial nature, irrespective of their due date. Therefore, they include debentures (even convertible), payables to partners and other financiers, payables to banks and share of payables to subsidiaries, affiliates and parent companies of a financial nature; risk capital related sources: these include all net worth items, such as capital stock paid-in share issue related reserves, company asset appreciation related capital reserves, 79

profit reserves in accordance with the law, articles of association and meeting resolution and analysed year s profit. It is possible, on the one hand, to determine the weight of slow or rapid turnover capital invested in the company with this type of configuration; on the other the composition of sources of finance between own capital and that loaned by third parties. The first phase involves moving operating liabilities to those assets with inverse sign, used to calculate operating assets. This results in net circulating capital, that is, rapid turnover capital invested in typical company activities. Net circulating capital, especially if its variation is determined over time, is an important monetary cycle indicator, as closely linked to the production process. Typically those companies able to collect cash payments from the sale of their products and defer payments to suppliers are able to invest these liquid assets in production activities, and even generate them to invest in other management sectors. Whereas, those with a positive monetary cycle that, although deferring payments to suppliers are unable to collect cash payments from sales, need additional financial resources to meet increasing sales volumes. The presence of positive net circulating capital is particular to industrial enterprises, as starting a production process implies incurring costs before collecting the relative payments from sales. The second aggregate is obtained deducting structural sources from structural investments, in order to identify net structural investments. Said value identifies those fixed assets that are instrumental in carrying out the production process, net of those sources that, due to their nature, are characterised as consolidated liabilities. The capital invested in operating management (COIN) is determined adding net circulating capital to net structural investments. This value differs from the total assets of the asset and liability statement in that it only includes investments in typical activities without including additional or ex-operating investments. Lastly, it is common practice to deduct cash and liquid financial asset items from financial sources, identifying in this way an aggregate called net financial standing. This measures the company s exposure to third party financiers and may be determined in the intercompany or extra group configuration. Liquid assets are deducted from financial sources possibly to reduce exposure to holders of loaned capital. 80

The aforementioned items must be moved with caution as, although aiding interpretation, contribute to the loss of information or misinterpretation of financial phenomena and if the data obtained is misleading it may be best to keep it separate. 4.2.1. Maflow S.p.A. balance sheet analysis. Analysing the economic and financial results of past balance sheets is an effective way of understanding the origin and dynamics of a company s economic equilibrium. This analysis was carried out on Maflow S.p.A. s 2005-2008 balance sheets. The aim was to highlight the most significant variations in the period considered using historical data obtained from the Company s balance sheets. Maflow S.p.A. s profit and loss account was reclassified according to the added value model. Maflow S.p.A. s profit and loss account. The economic analysis bears in mind the 2005-2008 period. Currently, Company activities are carried out in 2 plants and precisely: Trezzano sul Naviglio, covered surface area of around 14.000 m² where activities to machine steel and aluminium pipes, assemble them with rubber hoses from the Ascoli Piceno plant, as well as research, development and quality control for the entire Maflow Group are also carried out here. Activities are ISO TS 16949:2002 certified; Ascoli Piceno, surface area of around 12.000 m², where rubber (both vulcanised and green ) hose production activities are located. These are sold both to other companies of the Maflow Group for assembly and third parties. Activities are ISO TS 16949:2002 certified. The following table reclassifies profit and loss account data, taken from the Company s approved balance sheets, according to the added value model. 81

ADDED VALUE Maflow S.p.A. s profit and loss accounts from 2005 to 2008 reclassified according to the added value model. MAFLOW S.P.A. PROFIT AND LOSS ACCOUNT 2005 % 2006 % 2007 % 2008 % Net revenue 69,803,652 98.56% 63,146,705 98.55% 64,646,410 88.78% 53,237,406 88.87% (+) Other revenue 1,163,343 1.64% 320,172 0.50% 6,555,235 9.00% 5,803,794 9.69% (+/-) variation in stock of finished products (143,315) -0.20% (818,207) -1.28% 410,191 0,56% (291,094) -0.49% (+) Capitalized costs 0 0.00% 1,429,922 2.23% 1,201,978 1.65% 1,153,083 1.92% A) Year s production 70,823,680 10.,00% 64,078,592 100.00% 72,813,814 100.00% 59,903,189 100.00% (-) Goods purchased (31,595,427) -44.61% (30,911,504) -48.24% (34,491,798) -47.37% (29,616,132) -49.44% (-) Services purchased (14,295,668) -20.18% (13,049,831) -20.37% (16,643,258) -22.86% (18,051,156) -30.13% (-) Enjoyment of third party assets (rents/leasing) (556,168) -0.79% (560,384) -0.87% (650,130) -0.89% (1,435,947) -2.40% (-) Sundry management costs (639,711) -0.90% (475,211) -0.74% (768,114) -1.05% (405,039) -0.68% (+/-) variation in stock of raw materials (226,326) -0.32% (81,463) -0.13% 543,709 0.75% (874,137) -1.46% B) Production costs (47,313,300) -66.80% (45,078,393) -70.35% (52,009,591) -71.43% (50,382,411) -84.11% ADDED VALUE (A+B) 23,510,380 33.20% 19,000,199 29.65% 20,804,223 28.57% 9,520,778 15.89% (-) Salaries, wages and contributions (18,331,124) -25.88% (18,244,283) -28.47% (19,349,372) -26.57% (13,657,893) -22.80% (-) Provision for severance pay (1,106,388) -1.56% (1,143,573) -1.78% (1,198,335) -1.65% (955,468) -1.60% (-) other personnel costs 0 0.00% (256) 0.00% (400,881) -0.55% (324,889) -0.54% C) Labour cost (19,437,512) -27.44% (19,388,112) -30.26% (20,948,588) -28.77% (14,938,250) -24.94% GROSS OPERATING MARGIN (A+B+C) = EBITDA 4,072,868 5.75% (387,913) -0.61% (144,365) -0.20% (5,417,472) -9.04% (-) Provision for severance pay 0 0.00% 0 0.00% 0 0.00% 0 0.00% (-) Other reserves (315,327) -0.45% (380,000) -0.59% (1,331,983) -1.83% (490,000) -0.82% (-) Depreciation tangible assets (3,189,517) -4.50% (1,367,719) -2.13% (1,355,089) -1.86% (1,318,750) -2.20% (-) Depreciation intangible assets (6,870,263) -9.70% (6,853,593) -10.70% (6,583,494) -9.04% (6,579,325) -10.98% D) Provisions and depreciation (10,375,107) -14.65% (8,601,312) -13.42% (9,270,566) -12.73% (8,388,075) -14.00% NET OPERATING RESULT (A+B+C+D) = EBIT (6,302,239) -8.90% (8,989,225) -14.03% (9,414,931) -12.93% (13,805,547) -23.05% (-) Financial charges (,.702,704) -5.23% (4,795,990) -7.48% (6,402,691) -8.79% (8,043,735) -13.43% (+) Financial proceeds 18,495,873 26.12% 17,988,718 28.07% 1,088,326 1.49% 378,852 0.63% (+/-) profits (losses) on exchanges 1,111 0.00% (2,306) 0.00% 283,044 0.39% 959.088 1.60% E) Balance financial management 14,794,280 20.89% 13,190,422 20.58% (5,031,321) -6.91% (6,705,795) -11,19% CURRENT INCOME 8,492,041 11.99% 4,201,197 6.56% (14,446,252) -19.84% (20,511,342) -34.24% (-) Extraordinary charges (36,214,122) -51.13% (931,37) -1.45% (278,054) -0.38% (84,391,644) -140.88% (+) Extraordinary proceeds 698,448 0,99% 691,393 1.08% 6,130,352 8.42% 881,330 1,47% F)Balance extraordinary management (35,515,674) -5.,15% (240,144) -0.37% 5,852,298 8.04% (83,510,314) -139.41% PRE-TAX RESULT (27,023,633) -38.16% 3,961,053 6.18% (8,593,954) -11.80% (104,021,656) -173.65% (-) Current Ires and Irap (798,215) -1.13% (604,553) -0.94% (688,971) -0.95% 19,699 0.03% (-) Deferred / advanced Ires and Irap (116,992) -0.17% (698,286) -1.09% (986,488) -1.35% 957,977 1.60% G) Taxes (915,207) -1.29% (1,302,839) -2.03% (1,675,459) -2.30% 977,676 1.63% NET RESULT (27,938,840) -39.45% 2,658,214 4.15% (10,269,413) -14.10% (103,043,980) -172.02% Values expressed in thousands of Euros Source: Maflow S.p.A. s 2005-2008 balance sheets a) Production value. The initial analysis regards the production value. The following shows the production value trend for 2005-2008. 82

80,000,000 70,000,000 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 - Production value 2005 2006 2007 2008 Values expressed in Euros Source: Maflow S.p.A s. 2005-2008 balance sheets The drop in 2008 turnover is due, according to the information provided by the company s management, to the crisis in the global market and decline in the automotive sector as from the second half of the year. In particular, the sales revenue CAGR (annual growth rate) during the 2005-2008 period is negative, equal to around -8.64%. Moreover, the fall in revenue is evident in 2008, around 11.4 million Euros lower than 2007 (reduction that, in percentage terms, corresponds to a 18% reduction). The data from the previous three years 2005-2007 show a more limited reduction (2007 turnover: Euro 64.6 million; 2005: Euro 69.8 million). From a geographical point of view, only 9% of the 2008 turnover is achieved in Italy whilst the rest in the European Union (82%) and non European countries (8%). The following table shows the last two years figures in detail: the 2007 figure for sales to third parties is substantially higher than that for intergroup sales; the significant reduction (23%) on the previous year basically results in similar figures for both third party and intergroup revenue in 2008: in 2008 third party turnover is of around 53% whilst that for intergroup revenue is of around 46%. 2007 % 2008 % Revenue from sales and services 64,646,410 100% 53,237,406 100% Intergroup sales 27,284,464 42% 24,483,329 46% Third party sales 36,811,468 57% 28,396,178 53% Equipment break-up 421,660 1% 119,447 0% Sale of raw materials and scrap 128,818 0% 238,452 0% Values expressed in Euros 83

Source: Maflow S.p.A. 2008 balance sheet b) Other revenue. This item has a significant impact on Maflow S.p.A. s production value as shown by the last four years figures summarised hereunder: Other revenue and proceeds 2005 1,163,343 2006 320,172 2007 6,555,235 2008 5,803,794 Source: Maflow S.p.A. s 2005-2008 balance sheets As can be seen from the balance sheet data, the other revenue and proceeds item represents in the last two years respectively 9.0% and 9.7% of the production value. According to the information provided by directors in the supplementary note, in 2007 and 2008 this item is mainly characterised by headquarter services provided to subsidiaries (MAN Servizi S.r.l.), that in turn provides said centralised services to the companies of the Group (including Maflow S.p.A.) for an annual fee ( 8 ). Said services have been determined according to the arm s length principle set up by the OCSE Directive governing transfer pricing. c) Raw material purchasing costs. The 2008 balance sheet shows that raw material costs have fallen significantly (equal to 5 million Euros) compared to 2007, whist in percentage terms the reduction is of over 14%. Despite this, their incidence on the production value has increased from the 47.4% in 2007 to the 49.4% in 2008; this highlights how the Company was unable to balance the reduction in production value in 2008 (around 18%) with that of the cost of raw materials (14%); the effect: increased incidence of raw material purchase costs and consequent reduction in margins. d) Service costs. ( 8 ) See point d) of this paragraph regarding service costs. 84

This type of cost increased significantly in 2008 (around 8% on the previous year). Cost incidence on the production value has risen over the past three years, increasing from 20.4% in 2006 to 22.9% in 2007 and reaching 30.1% in 2008. The increase in absolute cost value for services in 2008 is of around 1.4 million Euros: in particular, there is a significant increase in intergroup relationships, rising from 2.4 million Euros in 2007 to 6.1 million Euros in 2008. In fact the intercompany services item represents around 34% of the total service cost (15% in 2007). The increase in service costs in absolute terms in 2008 combined with the reduction in turnover increases the incidence of said item on the production value: in fact the ratio of 22.9% in 2007 increases to 30.1% in 2008. However, as regards the main reductions, consultancies in 2008 fell from 2.7 million Euros to 1.9 million Euros and the cost of temporary staff from 1.9 million Euros to 1.1 million Euros. The following data, taken from Maflow S.p.A. s balance sheet as at 31/12/2008, shows (in percentage terms) the cost of services, highlighting how the majority relate to services provided by other companies of the Group. Service costs 2007 2008 Intercompany services 15% 34% Third party machining 7% 5% Electric power 8% 9% Industrial services 8% 8% Maintenance 7% 5% Consultancy 16% 11% Payments to auditing companies 1% 1% Transport on sales 10% 6% Insurance 1% 1% Travelling and accommodation costs 9% 8% Commission 1% 1% Advertising 0% 0% Temporary staff 11% 6% Auditor pay 0% 0% Telephone expenses 2% 2% Other services 4% 3% Source: Maflow S.p.A. s 2008 balance sheet. 85

Intercompany service cost dynamics is greatly influenced by the operation that saw Maflow S.p.A. (sole partner) contribute Man Servizi s.r.l. the headquarter business in December 2007 with effect from 1 st January 2008. In particular, the corporate services business, including some equipment, dedicated staff (including their Severance Pay Fund), as well as all related debit and credit items, was identified. Said contribution came into force on 1 January 2008 and, following the aforesaid operation, MAN Servizi S.r.l., that already provided management services, including technical advice, to Maflow S.p.A.and some foreign companies of the Group, grew significantly as a result of gaining all functional areas (previously located in the parent Company Maflow S.p.A.) devoted to performing common Group services such as R&D, Human resources, Purchasing, Finance and Control, Legal Affairs, Logistics, IT etc. Therefore, the management service agreement, previously signed with other companies of the Group, was redefined to adapt it to the new functions and tasks, sharing group costs (increased by a spread) according to the added value of individual companies that benefit from these services. In particular, revenues from MAN Servizi S.r.l. s management fees (therefore, service costs for companies of the Group) recorded in 2008, taken from MAN Servizi S.r.l. s approved balance sheet, are provided to help understand the economics behind the management service agreement: Maflow S.p.A.: Euro 5,100 thousand; Maflow France S.A.: Euro 1,550 thousand; Maflow Polska Sp.zo.o.: Euro 8,075 thousand; Maflow Iberica: Euro 678 thousand. Lastly, it should be noted that an agreement was stipulated between the parent company Maflow S.p.A. and subsidiary MAN Servizi S.r.l. to provide specific services for certain research projects (B-Cool, SMA and LOW Emission), specifically charged to Maflow S.p.A. and amounting to Euro 995 thousand in 2008. As regards the aforementioned intercompany management service relationships, MAN Servizi S.r.l. s supplementary note and management report state that the business operations concluded during the year with companies of the group were conducted at terms and conditions basically in line with those of the market, bearing in mind the OCSE guidelines on transfer pricing. e) Added value and personnel costs. 86

The added value, representing that part of income available to the company after repaying operating costs, in order to fund internal production factors, fell significantly in 2008: in absolute terms to 9.5 million Euros in 2008 compared to the 20.8 million Euros in 2007 (in relative terms it fell from 28.6% to 15. 9% of the production value). As already analysed, the reasons for this reduction in added value in absolute terms is mainly due to the fall in turnover, combined with just as significant a reduction in the cost of raw materials and increase in service costs. The reduction in added value in relative terms compared to the production value is mainly due to the increased incidence of costs to procure raw materials, increased service costs in 2008 (mainly due to intergroup services) and enjoyment of third party assets ( 9 ) as a result of selling off the Trezzano Sul Naviglio property in December 2007, subsequently leased by the Company. As a result of said operation, higher costs for enjoyment of third party assets, resulting from the rents paid ( 10 ), were entered in the profit and loss account, amounting overall to 795 thousand Euros plus VAT, in accordance with the lease stipulated on 10 December 2007 ( 11 ). It is noted that the aforementioned property is, in turn, partially sublet by Maflow S.p.A. to Man Servizi S.r.l., in accordance with office contract stipulated in January 2008 to use the office building in Trezzano Sul Naviglio (MI) and part of the premises in the Ascoli Piceno plant, together with the relative services (utilities, power, caretaking etc.). The rent agreed on is of 962 thousand Euros, of which 124 thousand Euros to sublet the spaces and 838 thousand Euros for additional services (caretaking, security, cleaning, warehousing, use of consumables, company cars, furniture and fittings, telephone lines and research and development equipment). As regards personnel costs, they have fallen over the year both in absolute and percentage terms (incidence on production value). The labour cost, equal to around 20.9 million Euros in 2007, has fallen to around 13.7 million Euros in 2008: The incidence on production value has fallen from 28.8% to 24.9%. ( 9 ) It is noted that the Company sustains charges for enjoyment of third party assets not only as a result of the divestment of the Trezzano property but also the seven year lease (as from 1 st May 2001) renewable for a further seven years, signed in April 2001, between Manuli Rubber Industries S.p.A. (vendor) and Manuli Automotive S.p.A. (former Maflow S.p.A.) for Lire 678,000,000 (around 350 thousand Euro), for the Ascoli Piceno plant. ( 10 ) The reduction, resulting from the divestment of the property, and depreciation, that in 2007 amounted to 182 thousand Euro, was not sufficient to cover the rents. ( 11 ) It is noted that as regards 2007, the lease was signed in December and the sum of Euro 47,917.80 plus VAT entered as rent. 87

This is due to a 17% reduction in staff on the previous year (the number of employees has fallen from 482 to 399), as a result of Maflow S.p.A. contributing headquarter activities to Man Servizi S.r.l. in December 2007 effective from 1 st January 2008. The graph also shows that the added value is not sufficient, except in 2005, to cover the labour cost. 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0 2005 2006 2007 2008 ADDED VALUE LABOUR COST Values expressed in Euros Source: Maflow S.p.A. s 2005-2008 balance sheets f) Gross Operating Margin. As a result of that shown in the previous table and an added value under the labour cost in the three year period 2006-2008, the gross operating margin is negative as from 2006, falling significantly in 2008. In fact the reduction in the labour cost is not sufficient to make up for the fall in added value, mainly due to the reduction in turnover and, secondly, the increased incidence of costs for raw materials, service costs and those to enjoy third party assets. In fact, as can be seen from the graph, the gross operating margin rises from a negative value of around 0.1 million Euros in 2007 to around 5.4 million Euros in 2008. 88

6,000,000 GROSS OPERATING MARGIN 4,000,000 2,000,000 - - 2,000,000 2005 2006 2007 2008-4,000,000-6,000,000 Values expressed in Euros Source: Maflow S.p.A. s 2005-2008 balance sheets g) EBIT. Analysing the EBIT, the net operating is negative for all years considered as shown in the following graph. EBIT - - 2,000,000,00 2005 2006 2007 2008-4,000,000.00-6,000,000.00-8,000,000.00-10,000,000.00-12,000,000.00-14,000,000.00-16,000,000.00 Values expressed in Euros Source: Maflow S.p.A. s 2005-2008 balance sheets The net operating result (EBIT) is the difference between the gross operating result (EBITDA) and some cost components not of a monetary nature (depreciation and provisions): these costs fell in 2008 by around 0.9 million Euros on 2007 due, in particular, to a reduction in the depreciation of tangible fixed assets, amounting to around 0.2 million Euros, as a result of selling the property in Trezzano sul Naviglio in December 2007 and other provisions item that fell from 1.3 million Euros in 2007 to 0.5 million Euros in 2008. 89

The reduction in this item is due to a lower product warranty fund than in the previous year, provision set aside to sustain those costs necessary to fulfil the contractual guarantee obligations for products sold as at the balance sheet date. Despite the reduction in provisions to the product warranty fund, the EBIT fell in 2008 as a result of a significant fall in turnover and increase in certain production costs. h) Financial charges. The following table summarises the financial charges sustained by the Company in the period in question. Financial Charges Euro 2008-8,043,735 2007-6,402,691 2006-4,795,990 2005-3,702,704 Source: Maflow S.p.A. s 2005-2008 balance sheets Over 95% (around 7.8 million Euros) of the total interest of around 8.0 million Euros sustained in 2008 is for third party finance. In particular, interest on finance amounts respectively to around 5.8 million Euros for interest paid on long-term finance and 1.8 million Euros for short-term finance; the remaining part (equal to around 0.2 million Euros) to commission, bank charges and other financial charges. It is noted that the aforementioned charges are the result of finance obtained from banks including: 74,680 thousand Euro finance dated 23 December 2005 with a pool of banks guided by the Banco Popolare di Verona e Novara, that must not exceed 104 million Euros and whose features can be summarised as follows ( 12 ): o Euro 40680 thousand depreciation with six-monthly due dates until 12-12- 2012 ( 12 ) It is noted that the sums due, divided into the various tranches, with the pool of banks listed in the 2008 supplementary note are the same as those in 2007; therefore, they do not match the total indicated in the supplementary note. The figure presented herein is taken from management information collected from the Company. 90

o Euro 5 million due on 23-12-2010 o Euro 10 million due on 23-12-2011 o Euro 19 million due on 21-12-2012 o Interest rate applied: variable Euribor indexed 6 m + spread o Guarantee: special privilege on systems, machinery, other tangible fixed assets and stock, pledge on shareholdings in Maflow Polska Sp.zo.o. and Maflow France S.A. As regards this finance, it is noted that the directors decided to reclassify the entire amount of the debt as short term in the approved balance sheet as at 31December 2008, as six-monthly instalment of 23 December 2008 was not paid. Euro 26,030 thousand, credit opened in current account and short-term finance, contract with various banks. As regards debts with companies of the Group, it is noted that they result from finance received amounting to 9.9 million Euros, debts relating to an advance on dividends received by Maflow Polska Sp.zo.o. in 2008 amounting to 4.4 million Euros being returned as the subsidiary s balance sheet does not show sufficient distributable profits or reserves to distribute the dividend already advanced; as for the remaining sum, it relates to normal business operations. The following graph shows the incidence of financial charges on the company s turnover in the years in question. 91

16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% Financial charges on turnover 2005 2006 2007 2008 Source: Maflow S.p.A. s 2005-2008 balance sheets Incidence is on upward trend in the period in question rising significantly in 2008 due to the increase both in interest paid on short-term finance (from around 1.0 million Euros to 1.8 million Euros in 2008) and that on long-term finance (from around 5.0 million Euros in 2007 to around 5.8 million Euros in 2008). i) Extraordinary management. Extraordinary management presents a very negative result in 2008, equal to 83.5 million Euros, whilst in 2007 it was positive with around 5.9 million Euros (benefitting from the capital gains on the sale of the property in Trezzano sul Naviglio, amounting to 5.9 million Euros). Said management suffers from the depreciation carried out by the management as a result of the prospects of the world automotive market. In particular, according to that stated in the 2008 supplementary note, the management thought that, in light of the situation, it was best to: depreciate the value of intangible fixed assets: by 34.8 million Euros for goodwill resulting from the merger of Manuli Automotive S.p.A. in June 2005 (according to the management it is not possible to guarantee the return of said investment with future economic flows in the current market conditions) and 5.2 million Euros for other intangible fixed assets; 92

partially depreciate the value of tangible fixed assets (in particular industrial and commercial equipment and other assets by the total residual value, whilst specific systems and machinery to 50% of their residual value) by around 4.7 million Euros owing to the current uncertainty as to the possibility of assets recovering their residual value; partially depreciate the value of shareholdings by 39.5 million Euros (including earmarking 3.4 million Euros to the risk fund for reorganising subsidiaries amongst the asset and liability statement liabilites), adjusting the value of shareholdings to the subsidiaries net worth; the depreciation of Maflow France, Maflow do Brasil Ltda, Maflow Holland NV, Maflow Polska Sp.zo.o, Maflow Components (Dalian) and Maflow Mexico S.A. is justified, according to that indicated by the management in the supplementary note, by losses deemed lasting compared to the cost entered in the balance sheet, in light of the global crisis. The degree of depreciation is determined according to the estimated residual value of the subsidiary, adjusting the book value to the net worth. As for Maflow France and Maflow Holland, due to their negative net worth, both the book value was depreciated and a risk fund of the same amount set aside in the asset and liability statement for subsidiary reorganisation to bear in mind future charges to make up the deficit. depreciate final stock by 901 thousand Euros. j) Taxes. Current taxes amount to -19.7 thousand Euros due to that described by Directors in the supplementary note, the option to apply national consolidated tax with the parent company, as from 2008. The national consolidated tax debt showed an overall loss of 4.9 million in 2008, to which MAN Servizi S.r.l. contributed tax profits of 1.4 million Euros. Moreover, for the sake of prudence Directors cleared existing assets as at 1 st January 2008 for advance IRES and released the deferred IRES tax fund due to no future tax income foreseen and bearing in mind accumulated IRES tax losses as at 31 December 2008. Therefore, deferred tax amounts to -958.0 thousand Euros. 93

k) Net profit. In light of the above comments the following graph shows the net results of the years analysed. 20,000,000 - - 20,000,000 Net Profit 2005 2006 2007 2008-40,000,000-60,000,000-80,000,000-100,000,.000-120,000,000 Values expressed in Euros Source: Maflow S.p.A. s 2005-2008 balance sheets Clearly the 2008 net profit is influenced by the above, especially the depreciation of fixed assets and shareholdings, showing a net loss of around 103.0 million Euros. Moreover, 2007 also closed with a significant loss (around 10.3 million Euros), despite additional income amounting to 5.9 million Euros resulting from the sale of the property in Trezzano sul Naviglio; the 2007 loss, accrued in market conditions not yet influenced so significantly by the crisis, worsening in the second half of 2008, shows how the Company s difficulties is only due in part to variable market trends. 4.2.2. Maflow Polska Sp.zo.o. balance sheet analysis This analysis bears in mind the period from 2005 to 2008. Before analysing the balance sheet it should be noted that in 2007 the Company saw, within a wider strategy of integration with the Codan group, its production capacity grow significantly transferring all its preforming activities to the second Chelmek plant: in particular whilst in 94

2006 activities carried out in the second Chelmek plant were mainly intended for other companies of the Group, in 2007 this plant started to supply third party customers directly. Currently Company activities are carried out in 3 plants and precisely: Tychy, near Katowice, of 11,900 m², were metal component manufacturing (socalled fitting) and final assembly activities are carried out; Chelmeck, near Oswiecim, of 11,000 m² (also known as Chelmeck 1), where metal component manufacturing (so-called fitting) and final assembly activities are carried out; Chelmeck, near Oswiecim, of 5,356 m² (also known as Chelmeck 2), where rubber hose vulcanisation activities are carried out. The following table reclassifies, according to the added value model, Profit and Loss Account data taken from the Company s approved balance sheets, drawn up in accordance with the national accounting standards defined in the Accounting Act of 2004: it should be noted that the 2008 balance sheet was still a draft (awaiting approval) when drawing up this document and therefore subject to possible changes that could modify analysis figures. Maflow Polska Sp.zo.o s 2005-2008 profit and loss account reclassified according to the added value model (data in thousands of PLN) 95

MAFLOW Polska Sp.zo.o PROFIT AND LOSS ACCOUNT 2005 % 2006 % 2007 % 2008 % ADDED VALUE Net revenue 313,391 101% 356,105 97% 513,693 96.05% 498,503 99.59% (+)Other revenue 776 0.25% 8,517 2.32% 9,141 1.71% 11,540 2.31% (+/-)variation in stock of finished productsi (3,379) -1.09% 2,891 0.79% 11,961 2.24% (9,488) -1.90% A) Year s production 310,787 10.,00% 367,512 100.00% 534,795 100.00% 500,555 10.0.00% (-)Goods purchased (167,719) -53.97% (206,898) -56.30% (351,186) -65.67% (326,781) -65.28% (-)Services purchased (18,742) -6.03% (24,326) -6.62% (79,238) -14.82% (83,129) -16.61% (-)Enjoyment of third party assets (rents/leasing) 0 0.00% 0 0.00% 0 0.00% 0 0.00% ) (-)Sundry management costs (4,733) -1.52% (6,360) -1.73% (6,366) -1.19% (10,547) -2.11% B) Production costs (191,194) -61.52% (237,583) -64.65% (436,790) -8.,67% (420,457) -84.00% ADDED VALUE (A+B) 119,594 38.48% 129,929 35.35% 98,006 18.33% 80,097 16.00% (-)Salaries, wages and contribution (30,506) -9.82% (37,619) -10.24% (70,380) -13.16% (82,551) -16.49% C) Labour cost (30,506) -9.82% (37,619) -10.24% (70,380) -13.16% (82,551) -16.49% GROSS OPERATING MARGIN (A+B+C) = EBITDA 89,088 28.67% 92,310 25.12% 27,625 5.17% (2.454) -0.49% (-)Depreciation tangible assets (14,211) -4.57% (11,883) -3.23% (14,275) -2.67% (15,195) -3.04% D) Provisions and depreciation (14,211) -4.57% (11,883) -3.23% (14,275) -2.67% (15,195) -3.04% NET OPERATING RESULT (A+B+C+D) = EBIT 74,877 24.09% 80,427 21.88% 13,350 2,50% (17,649) -3.53% (-)Financial charges (2,584) -0.83% (2,588) -0.70% (6,202) -1.16% (25,790) -5.15% (+)Financial proceeds 250 0.08% 1,180 0.32% 995 0.19% 1,014 0.20% E) Balance financial management (2,334) -0,75% (1,408) -0.38% (5,206) -0.97% (24,777) -4.95% CURRENT INCOME 72,543 23.34% 79,020 21.50% 8,144 1.52% (42,426) -8.48% F) Balance extraordinary management 0 0.00% 0 0.00% 0 0.00% 0 0.00% PRE-TAX RESULT 72,543 23.34% 79,020 21.50% 8,144 1.52% (42,426) -8.48% G) Taxes (2,963) -0.95% (12,578) -3.42% (1,01) -0.28% (2,149) -0.43% -15,92% -18,44% 5,07% NET RESULT 69,579 22,39% 66,441 18.08% 6,643 1.24% (44,575) -8.91% Source: Maflow Polska Sp.zo.o s 2005-2008 balance sheets a) Production value. Initial analysis regards the production value, consisting mainly of revenue from sales. Variation in stock of finished products and other revenue have a marginal impact on the production value. As regards the other revenue item, according to the management, it is mainly linked to the tax relief acknowledged company activities in the Special Economic Zone, equal to 75% of the capital invested up to 31 December 2006. In this case the company follows international IFRS accounting standards recording revenue annually and then writing off the deferred revenue previously entered, for the period of life of the asset that is the subject of the investment. The following lists the production value items from 2005 to 2008. 96

Production value 2005 % 2006 % 2007 % 2008 % Net revenue 313,391 97.48% 356,105 96.90% 513,693 9.,05% 498,503 9.59% Other revenue 11,495 3.58% 8,517 2.32% 9,141 1.71% 11,540 2.31% variation in stock of finished products (3,379) -.,05% 2,891 0.79% 11,961. (9,488) -.90% Year s production 321,507 100.00% 367,512 100.00% 534,795 100,00% 500,555 100.00% Value in thousands Zloty Source: Maflow Polska Sp.zo.o s 2005-2008 balance sheets Revenue from sales rises both in 2006 and 2007 by around 13.6% and 44.3% on the previous year ( 13 ), whilst in 2008 it falls by around 3.0% on the previous year, reaching a value of around 500 million PLN. The slight fall in turnover in 2008 is mainly due, according to Company management, to a decline in the Automotive sector and in particular that of Q4, that involved the Maflow group as a whole. The following shows the revenue from sales trend from 2005 to 2008. 60,000,000 Revenue from sales 500,000,.000 400,000,000 300,000,000 200,000,000 100,000,000 0 2005 2006 2007 2008 Values in Zloty Source: Maflow Polska Sp.zo.o s 2005-2008 balance sheets According to the information provided in the company s balance sheets, even though that of 2008 was not approved at the time of drawing up this document, turnover includes: the most significant part consists of the sale of finished products whilst the sale of raw materials is marginal compared to the overall value, representing around 2-3% of the overall turnover; ( 13 ) It should be noted that comparison of 2007-2006 data must bear in mind, as part of a wider strategy including integration of the Codan group, transfer of all pre-forming activities to the second Chelmek plant, that started to supply third party customers directly as from 2007. 97

d 2005 % 2006 % 2007 % 2008 % Finished products 309,046 98.61% 348,946 97.99% 499,234 97.19% 486,637 9.62% Raw materials 4,345.39% 7,159 2.01% 14,459 2.81% 11,865 2.38% Total 313,391 100.00% 356,105 100.00% 513,693 100.00% 498,503 100.00% Values in thousands of Zloty Share of turnover Source: Maflow Polska Sp.zo.o s 2005-2008 balance sheets sale of finished products to other companies of the Group remain, in absolute terms, constant over the years at around 50 million PLN, however falling by approximately four percentage points of the overall turnover as a result of the significant increase in revenue from third party sales in 2006 and 2007; Share of finished Product turnover 2005 % 2006 % 2007 % 2008 % Inter.-company 45,740 14.80% 44,036 12.62% 56,332 1.,28% 52,967 10.88% Third party cust. 263,306 85.20% 304,910 87.38% 442,902 88.72% 433,670 89.12% Total 309,046 100.00% 348,946 100.00% 499,234 100.00% 486,637 100.00% Values in thousands of Zloty Source: Maflow Polska Sp.zo.o s 2005-2008 balance sheets from a geographical point of view, the Polish market is of secondary importance compared to the foreign market. However, the percentage of sales on the domestic market increases in the years in question, from 1.9% in 2005 to 11.4% in 2008 mainly as a result of the increased sales of finished products to local customers; 98

. 2005 % 2006 % 2007 % 2008 % National 5,666 1.81% 20,361 5.72% 48,890 9.52% 56,852 11.40% Export 307,725 98.19% 335,745 94.28% 464,803 90.48% 441,650 88.60% Total 313,391 100.00% 356,105 100.00% 513,693 100.00% 498,503 100.00% Value in thousands Zloty 2005 % 2006 % 2007 % 2008 % National 4,846 1.57% 19,172 5.49% 45,773 9.17% 55,139 11.33% Export 304,200 98.43% 329,774 94.51% 453,461 90.83% 431,498 88.67% Total 309,046 100.00% 348,946 100.00% 499,234 100.00% 486,637 100.00% Value in thousands of Zloty Share of turnover per geographical area Share of turnover Finished Products Share of turnover Raw Material 2005 % 2006 % 2007 % 2008 % National 820 18,88% 1,189 16.60% 3,117 21.56% 1,713 14.44% Export 3,525 81,12% 5,971 83.40% 11,342 78.44% 10,152 85.56% Total 4,345 100,00% 7,159 100.00% 14,459 100.00% 11,865 100.00% 2005 % 2006 % 2007 % 2008 % Finished products 309,046 98.61% 348,946 97.99% 499,234 97.19% 486,637 97.62% Raw materials 4,345 1.39% 7,159 2.01% 14,459 2.81% 11,865 2.38% Total 313,391 100.00% 356,105 100.00% 513,693 100.00% 498,503 100.00% Value in thousands of Zloty Share of turnover Source: Maflow Polska Sp.zo.o s 2005-2008 balance sheets sales are concentrated, throughout the years in question, in the air-conditioning system sector. 99

Share per type of Finished Products 2005 % 2006 % 2007 % 2008 % air conditioning 301,316 97.50% 341,261 97.80% 479,972 96.14% 451,173 92.71% power steering 6,134 1.98% 3,324 0.95% 2,668 0.53% 20,737 4.26% active supervision 1,051 0.34% 901 0.26% 672 0.13% 97 0.02% rubber 0 0.00% 2,814 0.81% 12,464 2.50% 12,821 2.63% other 545 0.18% 645 0.18% 3,457 0.69% 1,809 0.37% total 309,046 100.00% 348,946 100.00% 499,233 100.00% 486,637 100.00% Values in thousands of Zloty Share per type of Raw Material 2005 % 2006 % 2007 % 2008 % Tooling 3,122 71.85% 4,807 6.,15% 5,357 37.05% 6,224 52.46% Other Materials 1,223 28.15% 2,352 32.85% 9,102 62.95% 5,641 47.54% Totale 4,345 100.00% 7,159 100.00% 14,459 100.00% 11,865 100.00% Value in thousands of Zloty Source: Maflow Polska Sp.zo.o s 2005-2008 balance sheets b) Production costs. Production cost percentages increase significantly in the period in question, rising from around 59.5% in 2005 to around 84.0% in 2008. This increase is mainly due to the purchase of raw materials (including the materials and energy and cost of merchandise and raw materials sold items), that rise from 52.2% of the production value in 2005 to 65.3% in 2008, and services purchased (including the external services items), that increase from 5.8% of the production value to 16.6%. According to the information provided by the management, this increase is due to various factors, the main one being inefficiencies resulting from the increasing number of customers supplied and high turnover in local management. These inefficiencies have lead to increased costs for raw materials and finished products, exceptional loads and employment. Lastly, it should be noted that the variation in the exchange rate between EUR/PLN may have a significant effect on the performance analysis of the years in question, as the Company incurs part of its production costs in local currency and and sells its products in Euro. Lastly, sundry management costs (including taxes and charges, other expenditure and other operating expenses items) rise from 4,733 thousand PLN, equal to 1.5% of the production value in 2005, to 10,547 thousand PLN, equal to 2.1% of the production 100

value in 2008. These also include non-financial asset related costs of 419 thousand PLN in 2008, 160 thousand PLN in 2007 and 2,071 thousand PLN in 2006. Whilst from 2005 to 2007 the other costs item records very low figures, in 2008 it records a value of 2,715 thousand PLN consisting mainly, according to the management, of a credit note to Maflow Components Iberica SL (2,000 thousand PLN) and asset liquidation costs (749 thousand PLN). The following table summarises Maflow Polska Sp.zo.o. s production cost items from 2005 to 2008. Production costs 2005 % 2006 % 2007 % 2008 % Goods purchased (167,719) -52.17% (206,898) -56.30% (351,186) -65.67% (326,781) -65.28% Services purchased (18,742) -5.83% (24,326) -6.62% (79,238) -14.82% (83,129) -1.,61% (-)Enjoyment of third party assets (rent/leasing) 0 0.00% 0 0.00% 0 0.00% 0 0,.0% Sundry management costs (4,733) -1.47% (6,360) -1.73% (6,366) -1.19% (10,547) -2.11% (+/-)variation in stock of raw material 0 0.00% 0 0.00% 0 0.00% 0 0.00% Production costs (19,.194) -59.47% (237,583) -64.65% (436,790) -81.67% (420,457) -84.00% Values in thousands of Zloty Source: Maflow Polska Sp.zo.o s 2005-2008 balance sheets As a result of above revenue and cost dynamics, the added value in 2008 was of 16.0% significantly lower than that in 2005 amounting to 130.31 thousand PLN of the production value. Graph A Added value 140,000,000 120,000,000 100,000,000 80,000,000 60,000,000 40,000,000 20,000,000 0 2005 2006 2007 2008 Value in Zloty Source: Maflow Polska Sp.zo.o s 2005-2008 balance sheets Graph B 101

Incidence 45.00% 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 2005 2006 2007 2008 Source: Maflow Polska Sp.zo.o s 2005-2008 balance sheets c) Staff. The cost sustained by the Company for staff increased significantly between 2006 and 2007, rising from 37.61 thousand PLN to 70.38 thousand PLN, once again because of moving all pre-forming activities to the Chelmek 2 plant and increase in the maximum wage fixed by the Polish government. Personnel costs continued to rise in 2008 both in absolute terms (equal to 82.55 thousand PLN) and in terms of incidence on the production value (equal to 16.5%) following increased production volumes that, according to the management, involved resorting continuously to overtime owing to inefficiencies noted in production programming. The Company employs 1,856 staff as at 28 February 2009. The following table summarises Maflow Polska Sp.zo.o. s personnel costs from 2005 to 2008. Labour cost Zloty % 2005 (30,506) -9.49% 2006 (37,619) -10.24% 2007 (70,380) -13.16% 2008 Value in thousands of Zloty (82,551) -16.49% Source: Maflow Polska Sp.zo.o s 2005-2008 balance sheets Reduced added value in 2008 means that the labour cost is not covered. The gross operating margin is therefore negative for first time in the reference period. 102

Graph A 120,000,000 EBITDA 100,000,000 80,000,000 60,000,000 40,000,000 20,000,000-20,000,000 0 2005 2006 2007 2008 Value in Zloty Source: Maflow Polska Sp.zo.o s 2005-2008 balance sheets Graph B 35.00% Incidence 30.00% 25.00% 20.00% 15.00% 1.00% 5.00% 0.00% - 5.00% 2005 2006 2007 2008 Source: Maflow Polska Sp.zo.o s 2005-2008 balance sheets d) Provisions and depreciation. There is no provision item in the Company s balance sheet. Whereas, in the case of depreciation, there is no particular variation in the years in question amounting to around 12-15 million PLN. The incidence of depreciation on the production value has remained relatively low as the Chelmek 1 and Chelmek 2 production plants are leased, whilst only that of Tychy belongs to the Company and is subject to depreciation. 103

The following table summarises Maflow Polska Sp.zo.o. s depreciation value from 2005 to 2008. Depreciation and Provisions Zloty % 2005 (14,211) -4.42% 2006 (11,883) -3.23% 2007 (14,275) -2.67% Values in thousands of Zloty 2008 (15,195) -3.04% Source: Maflow Polska Sp.zo.o s 2005-2008 balance sheets e) EBIT. Moving onto the EBIT, the following graph is for the period in question. Graph A 100,000,000 EBIT 80,000,000 60,000,000 40,000,000 20,000,000-20,000,000 0 2005 2006 2007 2008-40,000,000 Values in Zloty Source: Maflow Polska Sp.zo.o s 2005-2008 balance sheets Graph B 104

30.00% Incidence 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% - 5.00% 2005 2006 2007 2008-10.00% Source: Maflow Polska Sp.zo.o s 2005-2008 balance sheets The net operating result is only negative for 2008 however, even in 2007, it was in significant decline. In fact, increased turnover in 2007 did not improve the margin that, on the contrary, fell in absolute value owing to the increased cost of raw materials, services and staff. In 2008 the slight reduction in sales revenue, owing to the slowdown in the Automotive sector in the latter part of the year was not accompanied by a reduction in service and labour costs. f) Financial charges. The following shows the financial management balance for the years in question. Financial management Zloty % 2005 (2,334) -0.73% 2006 (1,408) -0.38% 2007 (5,206) -0.97% Value in thousandsof Zloty 2008 (24,777) -4.95% Source: Maflow Polska Sp.zo.o s 2005-2008 balance sheets The amount of financial charges exceeds the total financial proceeds each year thus resulting in a negative figure with banks. In 2008, especially, there is a significant rise in the overall financial charges amounting to 25,790 thousand PLN, compared to the 1,014 thousand PLN of interest earned. This result is due both to increased debts as a result of overdrawn current accounts, reaching a value of 85,293 thousand PLN compared to the 44,874 thousand PLN of 2007, and losses on exchanges resulting 105

from closing a hedge contract early, stipulated to cover the risk of fluctuations in the EUR/PLN exchange rate. g) Extraordinary management. There is no extraordinary management item. h) Taxes. The year s result is influenced by tax advances entered for tax relief acknowledged on company activities in the special economic zone: the tax relief is equal to 75% of the capital invested up until 31 December 2006. In this case the company follows international IFRS accounting standards recording revenue annually and then writing off the deferred revenue previously entered, for the period of life of the asset that is the subject of the investment. In 2006 and 2005 the Company presents a current tax value of 4,104thousand PLN and 2,650 thousand PLN, to which the advance and deferred tax balance must be added: thus resulting in overall income tax of 12,578 thousand PLN and 14,274 thousand PLN. Whereas, in 2008, the Company presents a negative pre-tax result thus no taxes sustained but advance and deferred tax amounting to 2,149 thousand PLN, compared to the 1,501 thousand PLN of 2007. i) Net profit. The following graph shows the net result of the four years considered, as a result of that described above. Graph A Net Profit 80,000,000 60,000,000 4,000,000 20,000,000-20,000,000-2005 2006 2007 2008-40,000,000-60,000,000 Values in Zloty 106

Source: Maflow Polska Sp.zo.o s 2005-2008 balance sheets Graph B 25.00% Incidence 20.00% 1.00% 10.00% 5.00% 0.00% - 5.00% 2005 2006 2007 2008-10.00% - 15.00% Source: Maflow Polska Sp.zo.o s 2005-2008 balance sheets 107

4.2.3. Balance sheet analysis: Maflow Group consolidated Profit and Loss Account. This analysis is based on the Maflow Group s 2005-2008 consolidated balance sheets. We would like to specify that the consolidated balance sheet has been drawn up according to international IAS-IFRS accounting standards, whilst Maflow S.p.A. s balance sheet was drawn up according to local accounting standards (local gaap). In some cases a different layout results in the same company events being treated differently. Moreover, it is noted that the 2008 consolidated balance sheet had not yet been completed on drawing up this document: draft (not approved) profit and loss accounts and asset and liability statements are available but not the supplementary note and management report. Consolidation perimeter The following table shows the Maflow Group consolidation perimeter in 2008: Company Activity % Detenuta da Man Servizi S.r.l. Services 100% Maflow S.p.A. Maflow Polska Sp.z. Production 100% Maflow S.p.A. Maflow North America, Inc. Technical and commercial department 100% Maflow S.p.A. Maflow de Mexico de C.V. Production 100% Maflow S.p.A. Maflow Finance S.p.A. Services 100% Maflow S.p.A. Maflow Holland NV Technical and commercial department 100% Maflow S.p.A. Maflow France SA Production 100% Maflow S.p.A. Maflow Components Iberica SL Production 100% Maflow France SA Maflow do Brasil Ltda Production 100% Maflow S.p.A. Maflow Components (Dalian) Co., Ltd. Production 100% Maflow S.p.A. Maflow Korea Ltd. Technical and commercial department 100% Maflow S.p.A. Maflow KK (ufficio tecnico commerciale) Technical and commercial department 100% Maflow S.p.A. Maflow Gummi A/S Sub-holding 100% Maflow S.p.A. Codan Gummi A/S Sub-holding 100% Maflow Gummi A/S Codan France Sas Production 100% Codan Gummi A/S Codan Rubber A/S Production 100% Codan Gummi A/S Codan LingYun Autom. Rubber Hoses Ltd. Production 66% Codan Gummi A/S Codan Rubber Ltd. Production 100% Codan Gummi A/S Codan Gummi GmbH Technical and commercial department 100% Codan Gummi A/S Codan Gummi AB Technical and commercial department 100% Codan Gummi A/S Codan Rubber Mexico SA de CV Production 100% Codan Gummi A/S Distlan Sa de CV Production 100% Codan Gummi A/S Codan Argentina Sa Production 100% Codan Gummi A/S The following variations have occurred in the period in question: 108

the consolidation perimeter has changed since 2007 as a result of a new company, Maflow KK (Japan), being set up, controlled 100% by Maflow S.p.A.; the consolidation perimeter has changed since 2006 as a result of the acquisition, in February 2007, of 100% of the capital of the Codan Group holding, Codan Gummi A/S, a Danish multinational leader in the manufacturing and marketing of rubber hoses and fittings mainly for the Automotive sector. Moreover, Maflow Korea Ltd., controlled 100% by MAflow S.p.A. was set up in May 2007; lastly, the consolidation perimeter has changed since 2005 as a result of Maflow Mexico SA de C.V., controlled 100% by Maflow S.p.A., being set up in February. Moreover, as indicated in the supplementary note accompanying the 2006 balance sheet, Manuli Automotive S.p.A. and its subsidiaries changed their names on 1 July 2006 as indicated hereunder: Previous name Manuli Automotive S.p.A. Manuli Auto France S.A. Manuli Auto Iberica S.L. Manuli Auto do Brasil Ltda Manuli Auto Holland NV Manuli Auto Polska S.p.zo.o. Manuli Automotive Components (Dalian) Co. Ltd. Manuli Auto North America, Inc. Manuli Auto International S.p.A. Manuflow de Mexico de C.V. MAN Servizi S.r.l. Current name Maflow S.p.A. Maflow France S.A. Maflow Components Iberica S.L. Maflow do Brasil Ltda Maflow Holland NV Maflow Polska S.p.zo.o. Maflow Components (Dalian) Co. Ltd. Maflow North America, Inc. Maflow Finance S.p.A Maflow de Mexico S.A. de C.V. MAN Servizi S.r.l. Balance sheet analysis: profit and loss account The following table reclassifies profit and loss account data, taken from the 2005-2008 consolidated balance sheets, according to the added value model. 109

2005-2008 consolidated Profit and Loss Account reclassified according to added value model. A ADDED VALUE Maflow Group CONTO ECONOMICO 2005 % 2006 % 2007 % 2008 % Net revenue 204,613,000 98.57% 198,141,000 97.65% 284,506,000 88.57% 259,222,000 97.55% (+)Other revenue 3,671,000 1.77% 3,213,000 1.58% 35,513,000 11.06% 4,740,000 1.78% (+/-)variation in stock of finished products (1,075,000) -0.52% 0 0.00% 0 0.00% 0 0.00% (+)Capitalized costs 370,000 0.18% 1,545,000 0.76% 1,204,000 0.37% 1,762,000 0.66% A) Year s production 207,579,000 100.00% 202,899,000 100.00% 32,.22,.000 100.00% 265,724,000 100.00% (-) Goods purchased (91,168,000) -43.92% (93,568,000) -46.12% (152,052,000) -47.34% (146,671,000) -55.20% (-) Services purchased (21,953,000) -10.58% (25,756,000) -12.69% (41,539,000) -12.93% (39,041,000) -14.69% (-)Enjoyment of third party assets (rents/leasing) (1,917,000) -0.92% (2,267,000) -1,12% (3,714,000) -1.16% (4,996,000) -1.88% (-)Sundry management costs (2,597,000) -1.25% (3,734,000) -1.84% (7,545,000) -2.35% (9,336,000) -3.51% B) Production costs (11,.63,.000) -5.67% (125,325,000) -61.77% (204,850,000) -63.77% (200,044,000) -75.28% ADDED VALUE (A+B) 89,944,000 43.33% 77,574,000 38.23% 116,373,000 36.23% 65,680,000 24.72% (-)Salaries, wages and contributions (55,575,000) -26.77% (59,162,000) -29.16% (84,077,000) -26.17% (78,997,000) -29.73% C) Labour cost (55,575,000) -26,77% (59,162,000) -29.16% (84,077,000) -26.17% (78.997.000) -29.73% GROSS OPERATING MARGIN (A+B+C) = EBITDA 34,369,000 16.56% 18,412,000 9.07% 32,296,000 10.05% (13,317,000) -5.01% (-)Other reserves (1,988,000) -0.96% (9,438,000) -4.65% (6,007,000) -1.87% 1,775,000 0.67% (-)Depreciation tangible assets (10,526,000) -5.07% (7,360,000) -3.63% (9,981,000) -3.11% (17,339,000) -6.53% (-)Depreciation intangible assets (876,000) -0.2% (796,000, -0.39% (462,000) -0.14% (5,071,000) -1.91% D) Provisions and depreciation (13,390,000) -6.45% (17,594,000) -8.67% (16,450,000) -5.12% (20,635,000) -7.77% NET OPERATING RESULT (A+B+C+D) = EBIT 20,979,000 10.11% 818,000 0.40% 15,846,000 4.93% (33,952,000) -12.78% (-)Financial charges (5,256,000) -2.53% (5,428,000) -2.68% (7,735,000) -2.41% (10,354,000) -3.90% (+)Financial proceeds 483,000 0.23% 770,000 0.38% 423,000 0.13% 1,117,000 0.42% (+/-)profits (losses) on exchanges (131,000) -0.06% (716,000) -0.35% (1,651,000) -0.51% (8,695,000) -3.27% E) Balance financial management (4,904,000) -2.36% (5,374,000) -2.65% (8,963,000) -2.79% (17,932,000) -6.75% CURRENT INCOME 16,075,000 7.74% (4,556,000) -2.25% 6,883,000 2.14% (51,884,000) -19.53% (-)Extraordinary charges 0 0.00% (13,000, -0.01% (3,301,000) -1.03% (87,357,000) -32.88% (+)Extraordinary proceeds 0 0.00% 0 0.00% 472,000 0.15% 2,336,000 0.88% F) Balance extraordinary management 0 0.00% (13,000) -0.01% (2,829,000) -0.88% (8,.02,.000) -32.00% PRE-TAX RESULT 16,075,000 7.74% (4,569,000) -2.25% 4,054,000 1.26% (136,905,000) -51.52% G) Taxes (5,409,000) -2.61% (5,344,000) -2.63% 1,255,000 0.39% (350,000) -0.13% NET RESULT 10,666,000 5,14% (9,913,000) -4.89% 5,309,000 1.65% (137,255,000) -51.65% Values expressed in Euros Source: 2005-2008 consolidated balance sheets a) Production value. Initial analysis regards the production values. The following table shows the variation in consolidated production value in 2005-2008. 110

350,000,000 Production value 300,000,000 250,000,000 200,000,000 150,000,000 100,000,000 50,000,000-2005 2006 2007 2008 Values expressed in Euros Source: 2005-2008 consolidated balance sheets The above graph shows an increase in 2007 (+ 58% on 2006): the revenue from sales CAGR (annual growth rate) is of 11.6% for the 2005-2007 period. The increase in production value recorded in 2007 is due to the acquisition of the Codan Group, thus extending the consolidation perimeter and resulting in a notable increase in consolidated revenue; according to that indicated by the management in the supplementary note, volumes increased by 12% on the previous year irrespective of acquiring the Codan Group. In 2007 other revenue, representing 11% of the production value, includes proceeds from the integration of the Codan Group, amounting to around 30.5 million Euros. Said amount is equal to the difference between the fair value of the Codan Group (equal to around 39.5 million Euros, according to that indicated in the Maflow Group 2007 consolidated balance sheet) and that actually sustained to acquire the group (around 9.1 million Euros); therefore, the management deemed said difference to be a good business deal, entering the relative proceeds in the 2007 profit and loss account. Revenue from sales in 2008 amount to 259.2 million Euros, falling by 9% on the previous year. The reduction in turnover is mainly due to the crisis that has hit the Automotive sector as from the second half of 2008. Consequently, the revenue from sales CAGR for the 2005-111

2008 period has fallen by almost 5 percentage points, compared to the same rate calculated for 2005-2007, thus falling from 11.6% to 6.9%. The following graph shows Group turnover per geographical area. 2008 consolidated turnover per geographical area Source: 2005-2008 consolidated balance sheets The most significant reductions in 2008 were in Europe, in particular Germany, France and Sweden, that represent 54% of the European turnover, suffered declines of 14%, 25% and 23% on 2007. b) Costs to purchase raw materials. The following graph shows the absolute value of costs to purchase raw materials over the past four years at a consolidated level and relative incidence on production values. Graph A Graph B 160,000,000 140,000,000 120,000,000 100,000,000 80,000,000 60,000,000 40,000,000 20,000,000 - Raw materials 2005 2006 2007 2008 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Incidence 2005 2006 2007 2008 Values expressed in Euros Source: 2005-2008 consolidated balance sheets 112

Note how during 2007 the cost of raw materials increased significantly in absolute value (graph A), rising from around 93 million Euros in 2006 to around 152 million Euros in 2007; said increase, in absolute terms, is undoubtedly due to the acquisition of the Codan group. However the cost of raw materials rises from 46.1% of the production value in 2006 to 47.3% in 2007 thus highlighting not only increased purchases as a result of a larger Group but also worse procurement conditions. In 2008 the cost of raw materials falls, in absolute terms, to around 5.5 million Euros, however its average incidence increases significantly (graph B) to 55.2%. Said increase highlights a lower margin than in 2007, due not only to a general increase in the cost of raw materials in the first half of 2008 but also the Group s financial pressures that inevitably influenced its negotiational power with suppliers, combined with a reduction in Group activities thus reducing the discounts applied to supplies. In fact, it should be noted that this figure does not bear in mind reduced sales volumes during the year. Therefore, in 2008 a reduction in volume is combined with reduced margins. c) Service costs. The following graph highlights the absolute value of service costs over the past four years at a consolidated level and relative incidence on production values. Graph A Graph B 45,000,000 40,000,000 35,000,000 30,000,.000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 - Services 2005 2006 2007 2008 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% Incidence 2005 2006 2007 2008 Values expressed in Euros Source: 2005-2008 consolidated balance sheets 113

Graph A shows increased service costs in 2007 due mainly to the acquisition of the Codan Group. However, the incidence of said costs (Graph B) remained roughly the same between 12.7% and 12.9%. However, the reduction in service costs in 2008, of around 2.5 million Euros on 2007, is not sufficient to reduce their incidence on the production value increasing, as can be seen from graph B, by almost two percentage points to 14.7% in 2008. Therefore, the reduction in service costs in 2008 is less than that in turnover thus resulting in reduced margins. d) Staff. The following graphs show the consolidated cost of staff, in absolute terms, over the past four years and relative incidence on production values. Graph A Graph B Labour Costs Incidence 90,000,000 30.00% 80,000,000 70,000,000 29.00% 60,000,000 28.00% 50,000,000 40,000,000 27.00% 30.00,0.000 26.00% 20,000,.000 10,000,000 25.00% - 2005 2006 2007 2008 24.00% 2005 2006 2007 2008 Values expressed in Euros Source: 2005-2008 consolidated balance sheets Labour costs grew by around 25 million Euros in 2007 compared to 2006. This rise is not only the result of acquiring the Codan Group but also higher costs sustained in Poland as a result of an unexpected rise in production volumes and an increase in the minimum wage fixed by the Polish government. However, this figure has not risen in proportion to total revenue and therefore its average incidence (Graph B) is around three percentage points lower than the previous year. The Maflow Group reduced its staff by around 17% in 2008 as a result of the crisis that hit the Automotive sector during the second half of 2008 thus reducing costs by around 5 million 114

Euros in 2008 (Graph A). However, as can be seen from Graph B, their average incidence is higher than that of the previous year, thus highlighting less of a reduction in costs to that in turnover and therefore reduced margins. e) Gross Operating Margin (EBITDA). The following graphs show the variations in the period in question and relative incidence on production values. Graph A Graph B 40,000,000 EBITDA 20.000% EBITDA 30,000,000 15.000% 20,000,000 10.000% 10,000,000 5.000% - - 10,000,000 2005 2006 2007 2008 0.000% - 5.000% 2005 2006 2007 2008-20,000,000-10.000% Values expressed in Euros Source: 2005-2008 consolidated balance sheets In 2007 the graph shows a significant increase in the EBITDA, in absolute terms, compared to the previous year: in fact it rises from a value of around 18.4 million Euros in 2006 to around 32.3 million Euros in 2007 (+75%). However, in percentage terms, it is less of an increase than in 2006: the gross operating margin (EBITDA) is around one percentage point higher than the previous year. This increase is due to 2007 benefitting from a 30.5 Million Euro proceed from the integration of the Codan Group, resulting from the difference between the fair value of the Codan Group (equal to around 39.5 million Euros, according to that indicated in the supplementary note accompanying the Maflow Group 2007 consolidated balance sheet) and the amount actually sustained to purchase the group (around 9.1 million Euros). In fact, if the EBITDA were to be calculated without said item, the gross operating result would be just about positive, mainly due to a three percentage point lower incidence of labour costs, only partially absorbed by the 115

increased incidence of production costs (up by two percentage points), thus improving the gross operating margin. The 2008 figure is significantly worse than that in 2007, both in absolute and relative terms. As already mentioned, the reduction in margins is mainly due to a fall in turnover, not accompanied by such a significant reduction in production costs. The incidence of said costs has risen from 63.8% in 2007 to 75.3% in 2008 (significant increase in costs to purchase both raw materials and services). The reduction in turnover, combined with an increased incidence of costs to purchase raw materials and services has resulted in a gross negative margin of around 13.3 million Euros. f) Net Operating Margin (EBIT). Moving on to analyse the EBIT, the following graphs show the variations in margin both in absolute terms and percentage of the total revenue. It is noted that fixed assets have been reclassified in the extraordinary management section so as to facilitate operating result comparison in the years in question. However, it was not possible to separate the effects of depreciation from those of devaluations carried out on fixed term intangible assets and tangible assets with lasting losses. Therefore, the depreciation entered in the 2008 profit and loss account appears significantly higher than that entered in the previous years, even without increased investments in fixed assets as it even includes the amount resulting from a lasting loss in value. Graph A Graph B EBIT EBIT 30,000,000 15.00% 20,000,000 10.00% 10,000,000 5.00% - - 10,000,000-20,000,000 2005 2006 2007 2008 0.00% -.00% 2005 2006 2007 2008-30,000,000-10.00% - 40,000,000-15.00% Values expressed in Euros Source: 2005-2008 consolidated balance sheets 116

The graphs show an increase in the EBIT in 2007 both in absolute terms and incidence on total revenue. The increase in EBIT compared to 2006 is higher than that in the EBITDA. This situation mainly depends on the fact that there are less provisions than the previous year. In fact, as can be seen from the above Profit and Loss account the Other provisions item is around 3.4 million Euros lower than that of the previous year. In particular, as indicated in the supplementary note accompanying the Maflow Group 2007 consolidated balance sheet, said difference is mainly due to the provision for reorganisation costs that is around 3.9 million Euros lower than that of 2006 (provisions for legal risks are around 190 thousand Euros lower and provisions for contract risks around 750 thousand Euros higher). In 2008 a reduction in turnover and margins results in a negative net operating margin; moreover, it is noted that the company reorganisation fund has been entered as income under Other provisions in the consolidated profit and loss account thus resulting in a positive balance of around 1.8 million Euros (the same item had a negative balance of 6.0 million Euros in 2007). Overall, EBIT incidence on the production value is lower than that in 2007, as can be seen from graph (B), falling from a positive value of 4.9% to a negative value of 12.8%. g) Financial management. The following graphs show the variation in absolute financial management values in the period in question and relative incidence on production values. Graph A Graph B Financial Management Financial Management - - 2,000,000-4,000,000 2005 2006 2007 2008 0.00% - 1.00% - 2.00% 2005 2006 2007 2008-6,000,000-8,000,000-10,000,000-12,000,000-3.00% - 4.00% - 5.00% - 14,000,000-16,000,000-18,000,000-20,000,000-6.00% - 7.00% - 8.00% Values expressed in Euros Source:2005-2008 consolidated balance sheets 117

As can be seen from the graphs, financial management values, in absolute terms, grew significantly in the last two years. In particular, that of 2007 increased by around 4 million Euros on 2006, as a result of an increase of around 2 million Euros in interest paid, due to increased financial borrowing compared to the previous year and around 2 million Euro in exchange losses. Financial borrowing grew significantly in 2007 current; financial debts grew by around 38.0 million Euros in 2006 to 52.6 million Euros in 2007, whilst non-current debts rose from 55.2 million Euros in 2006 to 69.4 million Euros in 2007. The increase in current financial debts is due to negative operating asset financial flows: in particular, as indicated in the notes accompanying the 2007 consolidated balance sheet, said flows have been influenced by cash disbursement generated by the reorganisation of activities in France and Denmark (around 4.5 million Euros), costs sustained to increase production capacity in China, Poland, Mexico and Korea (around 4.7 million Euros) and circulating capital trend in relation to stock that involved, as a result of an increase in turnover, 5.9 million Euros cash absorption. Whereas, the increase in non-current financial debts is mainly due, according to that indicated in the supplementary note, to a variation in the consolidation area (around 2.2 million Euros) and financial outlays relating to the acquisition of the Codan Group (around 9.3 million Euros). Despite the variation in financial borrowing, the incidence of financial management related costs on production values remains almost the same, rising from 2.7% in 2006 to 2.8% in 2007 despite increasing, in absolute terms, by 7% on 2006. As regards 2008, the incidence of financial management on production values increases significantly, reaching 6.8%. This increase is due both to short and long term interest paid, resulting from Maflow S.p.A. credit lines (burden increases as income indicators, to which loan remuneration conditions are linked, worsen) and a significant increase in exchange losses. In fact exchange losses increase significantly in 2008, rising from around 1.6 million Euros in 2007 to 8.7 million Euros in 2008 mainly as a result of closing a hedge contract early, stipulated to cover the risk of fluctuations in the EUR/PLN exchange rate. In 2008, the increase in financial management, in absolute terms, combined with a reduction in turnover weighs heavily on the Group s economic result. h) Extraordinary management. 118

In 2008 extraordinary management recorded a very negative result, due mainly to the depreciation applied. This management suffers from worsening prospects of the world automotive sector: in particular, the management thought it best to depreciate the value of indefinite intangible fixed assets (consolidation differences depreciated by around 87.3 million Euros) due to the impossibility of guaranteeing company continuity. i) Net profit. The following graphs show the variations in net profit from 2005 to 2008. Graph A Graph B Net Profit Incidence 20,000,000 - - 20,000,000 2005 2006 2007 2008 10.00% 0.00% - 10.00% 2005 2006 2007 2008-40,000,000-60,000,000-80,000,000-20.00% - 30.00% - 100,000,000-120,000,000-140,000,000-40.00% - 50.00% - 160,000,000-60.00% Values expressed in Euros Source: 2005-2008 consolidated balance sheets The negative result in 2008 is due both to reduced sales as result of the crisis that has hit the automotive sector as from the latter half of 2008 and a reduction in margins. A negative result is recorded even at an operating level: the EBITDA, unlike previous years, is for the first time under zero and therefore unable to cover the non-monetary costs and financial charges resulting from Group borrowing, significantly higher than in 2007. Lastly, extraordinary management has a significant effect on the 2008 result, with the Maflow Group management depreciating indefinite intangible fixed assets by around 87 million Euros as a result of the deteriorating prospects of the world automotive sector. 119

4.2.4. Balance sheet analysis: the Maflow Group consolidated asset and liability statement. The Maflow S.p.A. consolidated asset and liability statement has been reclassified according to the functional criterion. The following shows the 2005-2006-2007-2008 asset and liability statements, with the main financial margins and percentage incidence of each amount on the total capital invested. MAFLOW GROUP ASSET AND LIABILITY STATEMENT 2005 2006 2007 2008 CAPITAL INVESTED CAPITAL COLLECTED GROSS CIRCULATING CAPITAL 72,087,000 40.43% 74,443,000 44.50% 103,500,000 50.18% 76,758,000 98.52% Receivables to customers and other credits 42,887,000 24.06% 41,695,000 24.92% 53,177,000 25.78% 40,522,000 52.01% Stock 16,850,.000 9.45% 20,892,000 1.,49% 39,551,000 19.18% 27,707,000 35.56% Advance tax 12,350,000 6.93% 11,856,000 7.09% 10,772,000 5.22% 8,529,000 10.95% OPERATING SOURCES 54,943,000 30.82% 65,254,000 39.00% 82,666,000 40.08% 72,618,000 93.21% Payables to suppliers and other debts 29.386.000 16.48% 38,050,000 22.74% 50,949,000 24.70% 46,538,000 59.73% Other operating liabilities 9.949.000 5.58% 12,009,000 7.18% 16,119,000 7.82% 15,015,000 1.,27% Accrued liabilities 15.608.000 8.75% 15,195,000 9.08% 15,598,000 7,.6% 11.065.000 14.20% NET CIRCULATING CAPITAL 17.144.000 9.62% 9,189,000 5.49% 20,834,000 10.10% 4,140,000 5.31% STRUCTURAL INVESTMENTS 150.719.000 84.54% 157,765,000 94.30% 176,197,000 85.43% 73,710,000 94.61% Intangible fixed assets 90.944.000 51.01% 92,735,000 55.43% 94,284,000 45.71% 3,271,000 4.20% Tangible fixed assets 59.77,.000 33.53% 65,030,000 38.87% 81,913,000 39.72% 70,439,000 90.41% STRUCTURAL SOURCES 10,876,000 6.10% 17,691,000 10.57% 18,464,000 8.95% 8,446,000 10.84% Other funds 3,477,000 1.95% 11,191,000 6.69% 13,325,000 6..46% 3,467,000 4.45% Severance pay fund 7,399,000 4.15% 6,500,000 3.89% 5,139,000 2.49% 4,979,000 6.39% NET STRUCTURAL INVESTMENTS 139,843,000 78.44% 140,074,000 83.72% 157,733,000 76.48% 65,264,000 83.77% NET OPERATING CAPITAL INVESTED (COIN) 156,987,000 88.05% 149,263,000 89.22% 178,567,000 86.58% 69,404,000 89.08% FINANCIAL INVESTMENTS 21,299,000 11.95% 18,040,000 10.78% 27,677,000 1.42% 8,504,000 10.92% Financial fixed assets 0 0.00% 121,000, 0.07% 4,547,000 2.20% 5,499,000 7.06% Financial assets that are not fixed assets 312,000 0.17% 732,000 0.44% 4,069,000 1.97% 241,000 0.31% Liquid assets 20,987,000 11.77% 17.187.000 10.27% 19,061,.000 9.24% 2,764,000 3.55% INVESTED CAPITAL (CI) 178,286,000 100.00% 167,303,000 100.00% 206,244,000 100.00% 77,908,000 100.00% FINANCIAL SOURCES Gross Financial Standing) 100,016,000 56.10% 93,195,000 55.70% 122,090,000 59.20% 152,805,000 196.14% Gross payables to third parties 100,016,000 56.10% 93,195,000 55.70% 122,090,000 59.20% 152,805,000 19.,14% RISK CAPITAL RELATED SOURCES 78,270,000 43.90% 74,108,000 44.30% 84,154,000 40.80% (74,897,000) -96.14% Capital 10,000,000 5.61% 10,000,000 5.98% 12,703,000 6.16% 13,198,000 16.94% Reserves and profits (losses) carried forward 57,584,000 32.30% 74,021,000 44.24% 66,142,000 32.07% 49,160,000 63.10% Operating profits (losses) 10,686,.000 5.99% (9,913,000) -5.93% 5,309,000 2.57% (137,255,000) -176.18% CAPITAL COLLECTED (CR) 178,286,.000 100.00% 167,303,000 100.00% 206,244,000 100.00% 77,908,000 100.00% FINANCIAL SOURCES (Net Financial Standing) ) 79,029,000 44.33% 76,008.000 45.43% 103,029,000 49.95% 150,041,000 192.59% Values expressed in Euros Source: Maflow S.p.A. s 2005-2008 consolidated balance sheets 120

The net circulating capital records positive values throughout the three years in question: in particular this aggregate shrinks significantly in 2008. It should be noted that the operation to integrate the Codan Group in 2007 resulted in a significant increase in 2006; therefore the reduction is even more significant. As for circulating assets, Maflow S.p.A. s significant decline in receivables to customers has had a notable effect, falling from 42.9 million Euros in 2005, 41.7 million Euros in 2006 and 53.2 million Euros in 2007 to 40.5 million Euros in 2008. As already mentioned, the difference between 2006 and 2007 is not significant as in February 2007 Maflow Gummi SA/S, Danish Joint Stock Company, controlled 100% by Maflow S.p.A., acquired 100% of the ordinary shares of the Codan Group (Danish holding of the Codan Group, leader in the manufacturing and marketing of rubber hoses and fittings mainly for the automotive sector). Overall, the Receivables to customers, other credits and other assets item has shrunk as a result of the above by 19 million Euros on 2007. As regards the Stock item, a policy aimed at increasing stock rotation has been pursued with success, increasing stock from 16.9 million Euros in 2005, 20.9 million Euros in 2006 and 39.6 million Euros in 2007 to 27.7 million Euros in 2008. Once again the 2007 figure is strongly influenced by the operation to acquire the Codan Group. Lastly, circulating assets have increased as a result of the advance taxes entered in the balance sheet for government contributions for Tychy (Poland) plant activities, disbursed for technical investments in the special Polish economic zone (SEZ). This contribution includes a tax exemption limited to investments made by the company in the SEZ: in particular, the higher tax exemption is equal to 75% of the technical investments specified, to be used within 10 years of the investment. The difference between the maximum benefit and that used until the balance sheet reference date corresponds to deferred tax assets. As regards circulating liabilities, there is a significant increase in payables to suppliers that has risen from 29.4 million Euros (2005) and 38.1 million Euros (2006) to 50.9 million Euros (2007) and 46.5 million Euros (2008). The dynamics, analysed in relation to the production trend that shrinks in 2008, reveals the ability to gain and maintain important financial support from Group suppliers over time. Moreover, circulating liabilities include other operating liabilities including mainly tax debts and payables to social security institutes and other debts that mainly include payables to employees as a result of: 121

net liabilities for benefit plans that mainly refer to Maflow France s pension plan amounting to 1.2 million Euros (1.6 million Euros as at 31 December 2007 and 1.6 million Euros as at 31 December 2006). The Maflow Group pays it employees post employment benefits, both directly and by means of contributions to external funds. These benefits are paid according to the legal, fiscal and economic conditions in force in each of the countries in which the Group works and, generally benefits are based on the employee s pay and years of service; payables to employees amounting to 4.8 million Euros (6.3 million Euros as at 31 December 2007 and 3.6 million Euros as at 31 December 2006) for salaries, wages and accrued earnings for accumulated holidays not yet enjoyed. Lastly, operating liabilities include accrued liabilities mainly resulting, as already mentioned, from deferred public contributions. This item amounts to 15.6 million Euros in 2005, 15.2 million Euros in 2006, 15.6 million Euros in 2007 and 11.1 million Euros in 2008. The contribution that refers to Tychy (Poland) plant activities is included in the consolidated asset and liability statement under deferred earnings and noted amongst the proceeds according to a systematic criterion throughout the useful life of the investment made. Overall, the reduction in net circulating capital is due, on the one hand, to a significant drop in receivables to customers and stock, whose effect is only overcome in part by the reduction in net circulating liabilities as a result of reduced borrowing, due to less financial support offered by suppliers, combined with a reduction in the other operating liabilities and deferred earnings owing to use of deferred public contributions. As regards structural investments, these have fallen significantly mainly as a result of the lack of the necessary conditions to deem the company a going concern. In fact, in light of the comments made by the Auditing Company and Board of Auditors, the Board of Directors decided to prepare and approve a new separate draft balance sheet for Maflow S.p.A. dated 1 st April 2009 (approved by the Shareholders Meeting of 6 April 2009), drawn up from the prospective of a non going concern and therefore to call a Shareholders Meeting in accordance with arts. 2447 and 2484 of the Civil Code, as soon as possible. The Parent Company s Board of Directors was unable to approve the consolidated draft balance sheet within the same term as the main subsidiaries had not yet approved their respective draft balance sheets. 122

Having said this, the draft (not approved) consolidated balance sheet as at 31-12-08, prepared and provided by the company, has been drawn up according to the same assumption of a non going concern ; therefore, the management decided to totally depreciate, both due to the deteriorating prospects of the world automotive sector and growing uncertainty as to the company s future, the goodwill acquired with the various company mergers, resulting from the difference between the cost of the merger and the Group s share of the net fair value of those potential assets and liabilities noted on acquisition. In fact, it should be noted that Maflow applies IFRS accounting standards to draw up the consolidated balance sheet and consolidates the companies of the group according to the purchasing method ; in accordance with standard IFRS 3 Company Mergers, all identifiable assets and liabilities and potential liabilities taken on are recorded at their fair value as at the acquisition date and any surplus following allocation of the purchase price to said assets and liabilities is recorded in the goodwill item, whilst negative differences, if representative of a purchase at favourable conditions, are recorded amongst the proceeds in the year in which the acquisition took place. Balance sheet items referring to fixed term intangible fixed assets were also depreciated for the same reason as above. As a result, intangible fixed assets drop from 90.9 million Euros (2005), 92.7 million Euros (2006), 94.3 million Euros (2007) to 3.3 million Euros (2008). As regards tangible investments, the residual value, following the year s depreciation, was depreciated in part owing to the current uncertainty as to the possibilities of recovery. This depreciation mainly involved specific systems and machinery; to a lesser extent general systems and machinery and electronic office equipment and machines. The residual value of tangible fixed assets amounts to 59.8 million Euros (2005), 65.0 million Euros (2006), 81.9 million Euros (2007) and 70.4 million Euros (2008). As for structural sources, they have fallen significantly in the last year, dropping from 10.9 million Euros in 2005, to 17.7 million Euros in 2006, to 18.5 million Euros in 2007 and 9.4 million Euros in 2008. This is mainly due to the notable reduction in other funds as a result of investments amounting to 8.1 million Euros and previous provisions for reorganisation contract risks and product warranties amounting to 1.8 million Euros. As regards the dynamics of the Severance Pay Fund, determined by an independent expert according to the credit projection method in accordance with IAS 19, it has reduced 123

progressively over the years in question as a result of contributions paid and payments to beneficiaries. Overall, as a result of the above-mentioned movements, net structural investments have fallen significantly, even though the effect is attributable both to assets and depreciation, for lasting losses in value, of the goodwill, other intangible fixed assets and other assets and liabilities due to the release of funds; these are all movements of an accounting nature (not financial). Overall, net capital invested has shrunk over the past year, amounting to 139.8 million Euros in 2005, 140.1 million Euros in 2006, 157.8 million Euros in 2007 and 65.3 million Euros in 2007. However, last year s dynamics is attributable only in part to actual cash flow as mainly the result of depreciation that did not result in the influx of financial resources for the Maflow Group. Lastly, this analysis focused on financial investments made by the Maflow Group during the three years in question. Financial investments amount to 18.0 million Euros in 2006, 27.7 million Euros in 2007 and 8.5 million Euros in 2008. The reduction recorded in 2008 in other financial assets and liquid assets of over 20.1 million Euros is due to: -3.8 million Euros, the variation in other financial assets as a result of items being reclassified in the consolidated balance sheet (effect equal to -5.7 million Euros) and profits from assets available for sale (effect equal to 1.9 million Euros); -16.3 million Euros, the variation in liquid assets as at the year end date. Overall the variation in financial investments resulted in the Maflow Group using financial resources, mainly as a result of the reduction in bank and postal deposits (from 18.8 million Euros in 2007 to 2.7 million Euros in 2008). On the liabilities front, company investments are mainly financed by third party financiers (pool of banks) for an average sum of 100.0 million Euros in 2005, 93.2 million Euros in 2006, 122.1 million Euros in 2007 and 152.8 million Euros in 2008. It should be noted that payables to banks, all important to the August 2004 acquisition, were the subject of reorganisation in 2006 that involved turning short term debts (so-called bridge financing) into medium to long term debts (pool finance). The aforementioned sums consist of: 124

non-current payables to a pool of banks (Banco Popolare di Verona SGSP): amounting to 64.1 million Euros in 2006, 76.2 million Euros in 2007 and 74.7 million Euros in 2008, divided (2008) as follows: 1. line A: 40.6 million Euros, of which 25.7 million Euros line A/1, 6.0 million Euros line A/R and 9.0 million Euros due within the year; 2. line B: 5.0 million Euros; 3. line C: 10.0 million Euros; 4. line D: 19.0 million Euros; (euro/thousand) Due date 31.12.2009 31.12.2010 31.12.2011 31.12.201 Debt due to Pool Banco Popolare di Verona SGSP (line A) 9,040 9,040 9,040 4.,20 Debt due to Pool Banco Popolare di Verona SGSP (line B) 5,000 Debt due to Pool Banco Popolare di Verona SGSP (line C) 10,000 Debt due to Pool Banco Popolare di Verona SGSP (line D) 19,000 Debt due to Pool Banco Popolare di Verona SGSP 9,040 14,040 19,040 23,520 current payables to banks for overdrafts and other current debts: respectively amounting to 18.0 million Euros in 2006, 43.1 million Euros in 2007 and 47.6 million Euros in 2008; payables to other bank and financial intermediaries: respectively amounting to 11.0 million Euros in 2006, 3.3 million Euros in 2007 and 8.9 million Euros in 2008 and mainly the result of debts with the IFU Bank (China) and leasing companies (France); mark to market and fair value accounting of derived contract to cover EUR/PLN exchanges that showed a loss of -21.7 million Euros (entered directly in the Net Worth) to offset a potential liability with the banks that signed the swap agreement. In practice the loss resulting from evaluating the instrument at its fair value, held to effectively cover the exchange risk, is noted directly under net worth. As for debts of a financial nature, they have risen in the three years in question as a result of using medium to long term credit lines agreed with banks.overall, the net balance in 2008 is of 30.7 million Euros: however, it should be noted that the movements that characterised the variations in bank exposure between 2007 and 2008 are mainly the result of mark to market accounting of derived exchange cover contracts (amounting to 21.7 million Euros) and to a much lesser degree recourse to additional short term borrowing (from 43.1 million Euros in 125

2007 to 47.6 million Euros in 2008) and borrowing with other bank and financial intermediaries (from 3.3 million Euros in 2007 to 8.9 million Euros in 2008). Lastly, the other source of finance of capital invested in the company is the net worth, that is, partner contributions both in terms of contributions and non distributed profits reinvested in entrepreneurial activities. Over the three years in question the net worth has disappeared completely (from 74.1 million Euros in 2006 to 84.2 million Euros in 2007 and -74.9 million Euros in 2008), thus resulting in a significant deficit in 2008. The net worth movements that have given rise to this situation include: firstly and to a greater degree, the consolidated loss suffered in 2008 amounting to - 137.3 million Euros, of which around 103.0 million Euros Maflow S.p.A. s net result owing to depreciation of goodwill, other intangible fixed assets (34.8 million Euros), intangible fixed assets (5.2 million Euros), tangible fixed assets (4.7 million Euros), shareholdings (39.6 million Euros) and final stock (0.9 million Euros) ( 14 ); mark to market and fair value accounting of derived contract to cover EUR/PLN exchanges that showed a loss of -21.7 million Euros (entered directly in the Net Worth) to offset a potential liability with the banks that signed the swap agreement. In practice the loss resulting from evaluating the instrument at its fair value, held to effectively cover the exchange risk, is noted directly under net worth. In conclusion, the overall capital invested in company activities amounts to 167.3 million Euros in 2006, 206.2 million Euros in 2007 and 77.9 million Euros in 2008. As already mentioned said trend is due to the management deciding to completely depreciate goodwill resulting from consolidation of the companies of the Group due to the continuing crisis in the global automotive sector as from the latter half of 2008. However, it should be noted that said depreciation, carried out in 2008 and resulting in a significant deficit, does not provide any information as regards the reasoning behind such considerable goodwill, whose origin, as described in the previous sections, lies in the leveraged buy-out of company units in August 2004 and subsequent operations. ( 14 ) It is noted that data is only indicative as taken from Maflow S.p.A. s balance sheet as at 31-12-2008, drawn up according to Italian accounting standards (local gap). Values are not comparable as the consolidated balance sheet has been drawn up according to IAS-IFRS International Accounting Standards IAS-IFRS. 126

Lastly, it should be noted that although the financial structure represented, based on recognised management reclassification methods, undoubtedly helps the reader to interpret the capital invested in entrepreneurial activities, it must not mislead the reader as to the degree of company debt. In fact it should be highlighted that even those operating debts considered, according to management reclassification methods, part of circulating liabilities (as resulting from the normal purchasing manufacturing sale process) must be honoured to guarantee the continuation of activities and, especially when they exceed certain levels, could be classified as financing debts. 4.3. Summary of the causes of insolvency. As already mentioned, the company s insolvency is due to excessive borrowing compared to the Company s operating trend. As is well-known, high levels of borrowing increase the degree of risk significantly, therefore its exposure and any repercussions the company may suffer as a result of exogenous variables. This is the case of Maflow that, highly indebted with third parties, has been hit by a general crisis in the world automotive market. As a result the company has not been able to provide sufficient resources to finance and repay the existing debt. In particular, as already mentioned, the causes of the Maflow Group s insolvency are to be found in the Group s financial variables, having achieved a certain degree of cost effectiveness in its management of the company (though exposed to the slump in the automotive market). Having said this, the main reasons for the insolvency include: a) excessive initial borrowing with third parties, firstly as a result of the leveraged buyout in 2004, financed with short term credit lines (without appropriate predepreciation period); b) subsequent use, as from the second half of 2005, of third party finance to develop Group business worldwide, so as to increase the volume of Group activities, without 127

collecting expected returns ( 15 ) ( non-european activities, in particular those in central and south America, are still in the start-up phase [ 16 ]); c) initiating important (and onerous) reorganisation projects that involved the Codan Group (Denmark) and Maflow Polska Sp.zo.o. (Poland) at the same time as investing in developing the business worldwide; d) in the specific case of Maflow S.p.A., constant operating losses of the Trezzano sul Naviglio plant, whose production is mainly intended for the BMW Group, with which high discount levels have been agreed (low margins); e) the significant amount of fixed costs (whose reduction requires time and resources), at a time of general crisis in the automotive sector, resulting from the size of the Group for activity volumes vastly superior to that actually required, has eroded both the profit margins and economic capacity to sustain the level of debt. ( 15 ) It should be noted that the payback period for these investments, according to the management, are over 18-24 months. ( 16 ) Source: Petition to declare insolvency in accordance with arts. 3 and 5 L.D. 270/1999 filed by Maflow S.p.A. on 10 April 2009. 128

PART FIVE MAFLOW S.P.A. ESTIMATED ASSET STATEMENT 5.1. Objectives and criteria followed. In accordance with art 28 of L.D. 270/99 the estimated asset statement accompanies the Court Commissioner s report. However, it seems appropriate to provide a summary of the outcomes as well as the criteria adopted and documents used. The following paragraphs analyse the assets of the two companies declared insolvent. In drawing up the estimated asset statement, both for Maflow S.p.A. and Maflow Polska Sp.zo.o., both going concerns, the analysis regarded individual asset items and highlighted how, in the case of Maflow S.p.A., the most significant portion is represented by financial fixed assets (rectius: shareholdings); whereas, the Polish subsidiary does not possess any holdings, only significant tangible fixed assets and short term credits. 129

Bearing in mind the limits of this analysis, reference is made to a more exhaustive investigation the Extraordinary Commissioner will carry out if the companies declared insolvent are approved for extraordinary administration. 5.2. Limits of the analysis. This estimated asset statement has been drawn up according to information obtained from the company and is therefore subject to timescales imposed by the relative law. The analysis and comments made on the value of assets have been taken from company accounts. Therefore, it has to be interpreted in strict correlation with those criteria approved by the Civil Code. In fact these estimates are not an expert s report on the theoretical intrinsic value of those assets considered, nor do they bear in mind so-called market valuations. It is well known that, during the observation phase provided for in L.D. 270/1999, the Court Commissioner does not consider elements that, in another context, could influence the value of the asset assessed such as, by way of example: specific contractual aspects, subjective party valuations and reciprocal and contrasting negotiational powers. 5.3. Documents used. The following analysis is strictly linked to the information provided by the company in question. In particular, the following sources were used for Maflow S.p.A.: - balance sheet as at 31 December 2008, approved by the shareholders meeting on 6 April 2009; - statement of account dated 28 February 2009, accompanying the petition to be declared insolvent dated 10 April 2009; - statement of account dated 30 April 2009, reclassified in accordance with L.D. 127/91 (even if simplified) according to information provided by the company s administrative functions; - trial balances dated 31 December 2008, 28 February 2009 and 30 April 2009 taken from SAP information system; 130

- composition and due register of banker s credits as at 31 December 2008; - reconstruction and details of classifications applied to accounts examined; - the individual approved or draft balance sheets as at 31 December 2008 (in those formats provided for in the local regulations) of the following subsidiaries: 1. Maflow Finance S.p.A.; 2. Maflow France SA; 3. MAN Servizi S.r.l.; 4. Maflow Holland NV; 5. Maflow North America Inc.; 6. Maflow do Brazil LtdA; 7. Maflow Mexico SA del C.V.; 8. Maflow Components (Dalian) Co. Ltd; 9. Keumah Flow Co. Ltd - The Subsidiaries IAS/IFRS reporting package (used for group consolidation purposes) as at 31 December 2008 and 30 April 2009, taken from the Easy Bilancio Consolidato application. Whereas the following sources were used for Maflow Polska Sp.zo.o.: - Balance sheet as at 31 December 2008, still a draft; - statement of account dated 28 February 2009, accompanying the petition to be declared insolvent dated 10 April 2009; - statement of account dated 30 April 2009, reclassified in accordance with L.D. 127/91 (even if simplified) according to information provided by the company s administrative functions; - trial balances dated 31 December 2008, 28 February 2009 and 30 April 2009 taken from the Easy Bilancio Consolidato information system; - composition and due register of banker s credits as at 31 December 2008; - reconstruction and details of classifications applied to accounts examined. It should be noted that all statements of account and balance sheets that have not been approved may be subject to significant changes and adjustments, not yet foreseeable, once audited. 131

5.4. Maflow S.p.A. asset items This paragraph contains a summary statement of Maflow S.p.A. s (former Manuli Automotive S.p.A.) assets in thousands of Euros. Asset and Liability reference date is 31 December 2008. The accompanying notes indicate that items were valued from the perspective of the company not being a going concern. In particular, certain significant assets were depreciated such as goodwill and some shareholdings in subsidiaries, owing to the uncertainty with regards to future recovery. The company s assets as at 28 February and 30 April 2009 are presented at the end of the analysis so that they may be compared with those as at 31 December 2008. 132

Maflow S.p.A. ASSET AND LIABILITY STATEMENT 31/12/2008 (in Euro/000) 31/12/2008 ADJUSTED TOTAL ASSETS 53,865 (28,928) 24,937 Intangible fixed assets - - Tangible fixed assets 3,783 3,783 of which: systems and machinery 3,642 3,642 Industrial and commercial equipment 141 141 Financial fixed assets 31,637 (18,691) 12,946 of which: shareholdings in subsidiaries 28,634 (16,648) 11,986 receivables to affiliates 835 (246) 589 receivables to subsidiaries 1,797 (1,797) - receivables to parent companies 224 224 receivables to others 147 147 Stock 3,606 3,606 of which: raw and subsidiary materials, consumables, 1,494 1,494 products in progress and semi-finished 1,098 1,098 products and goods 1,007 1,007 advances 7 7 Receivables 14,080 (10,237) 3,843 of which: to customers 3,327 (657) 2,670 to subsidiaries 9,543 (9,543) - to parent companies 231 231 tax credits 639 639 advance tax 37 (37) - to others 303 303 Financial assets - - Liquid assets 758 758 of which: bank and postal deposits 754 754 money and cash 4 4 Accrued income and deferred assets 1 1 133

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5.4.A Intangible fixed assets Total: Euro 0 thousand Intangible fixed assets have been totally depreciated in the balance sheet as at 31 December 2008. In the case of goodwill, entered following the merger of Manuli Automotive S.p.A. in 2005, the depreciation of 34,759 thousand Euros was justified by the lack of guarantees as to its future positive economic flows due to a slump in the world automotive market and current uncertainty as to the company s future prospects. In the case of intangible fixed assets (fixed assets in progress, system and expansion costs, SW, concessions, licences and trademarks and similar rights) the 5,180 thousand Euro depreciation is justified by the current uncertainty as to the possibility of recovering their residual value. Valuation criteria In accordance with that set out in the balance sheet as at 31 December 2008, intangible fixed asset items were valued according to those criteria set out in art. 2426 of the Civil Code, adjusted, if necessary, to bear in mind current uncertainty as to the company s future prospects. Therefore, intangible fixed assets are entered at their invoice cost, including any additional expenses, if obtained from third parties and their manufacturing cost (direct costs plus other general manufacturing costs sustained until their potential use), if manufactured internally. Depreciation is calculated at constant rates determined according to the estimated period of future use. Adjusted value: 0 thousand Euro In view of the current situation it is agreed that intangible items be adjusted to zero. 5.4.B Tangible fixed assets Total: 3,783 thousand Euros 135

These consist mainly of systems and machinery and industrial and commercial equipment. They include: (Thousand Euro) General systems and machinery 450 Specific systems and machinery 3,192 Equipment 141 3,783 The net value indicated includes a total depreciation of 4,692 thousand Euros in 2008. Moreover, assets belonging to the company (tangible fixed assets and stock) are encumbered by a special lien of 157,500 thousand Euros guaranteeing the medium to long term finance with a pool of banks guided by the Banca Popolare di Verona e Novara, whose residual debt amounts to 74,680 thousand Euros as at 31 December 2008. Valuation criteria They are valued at their invoice cost, including any additional expenses, if obtained from third parties, and at their manufacturing cost (direct costs plus other general manufacturing costs sustained until potential use) if manufactured internally; no financial charge was entered during the year. Costs are entered net of adjustment funds (depreciation funds). Depreciation rates are calculated according to use and represent the economic-technical life of assets. It is noted that in previous years the higher depreciation rates used to determine taxable income resulted in deferred tax liabilities. Repair and maintenance costs sustained during the year are charged directly to the profit and loss account. This also stands for goods whose unit cost is under Euro 516.46 if utility is limited to one financial year. The residual value of tangible fixed assets, following the year s depreciation, was partially depreciated as a result of the current uncertainty as to the possibility of recovery, entering the relative depreciation in the profit and loss account. A lump-sum 136

criterion is applied: the percentage reductions applied are as follows: - 50% systems and machinery; - 80% equipment; - 100% other assets. Adjusted value: 3,783 thousand Euros On the basis of the information available there is no reason to propose any adjustment to the net value entered in the balance sheet. 5.4.C Financial fixed assets Total: 31,637 thousand Euros These include the company s most significant asset items (around 59%). They mainly consist of shareholdings in subsidiaries and affiliates as detailed below: - subsidiaries 28,634 thousand Euros; - affiliates 835 thousand Euros. Subsidiaries include: % held Book value (Thousands Euro) Man Servizi S.r.l. 100% 100 Maflow North America Inc 100% 86 Maflow Finance S.p.A. 100% 1,112 Maflow Polska Sp.zo.o 100% 11,282 Maflow do Brasil Ltda 99% 2,676 Maflow Components (Dalian) Co Ltd 51% 1,746 Maflow Mexico Sa de C.V. Ltd 100% 1,672 Maflow Gummi AS 100% 9,640 Maflow Korea Ltd AS 100% 41 Maflow KK (Giappone) 100% 279 28,634 The only shareholding in an affiliated company is that in Keumah Flow Co. Ltd (20% share) amounting to 835 thousand Euros. 137

It is noted that during 2008 shareholdings increased by 15,397 thousand Euros, mainly as a result of investing financial and commercial credits with subsidiaries in the future capital increase account. In particular: Nature of credits Amount (Thousands of Euro) Maflow do Brasil Ltda commercial 2,020 Maflow Components (Dalian) Co Ltd financial 2,005 Maflow Mexico Sa de C.V. Ltd commercial and financial 6,790 10,815 As regards reductions, 49% of Maflow Components (Dalian) was transferred to Codan Gummi A/S resulting in capital gains of 126 thousand Euros. Lastly, the value of shareholdings in subsidiaries was adjusted to the value of the NW, applying an overall depreciation of 36,177 thousand Euros (that, added to the reorganisation funds of those shareholdings in Maflow Holland NV and Maflow France SA of 3,379 thousand Euros, takes the overall value of adjustments to financial assets entered in the profit and loss account to 39,556 thousand Euros). Said alignment involved, amongst other things, reducing the accounting value of the following shareholdings to zero: - Maflow France SA (99.98%); - Maflow Holland NV (100%). The remaining part of the financial fixed asset balance consists of dead loans, lasting no more than 5 years: - to subsidiaries amounting to 1,797 thousand Euros; - to parent companies amounting to 224 thousand Euros; - to others amounting to 147 thousand Euros. Finance granted subsidiaries are divided as follows: 138

FINANZ.-CODAN RUBBER MEXICO, S.A. DE C.V 182 FINANZ.-Maflow Holland N.V. 1,200 FINANZ.-Maflow North America Inc. 215 FINANZ.-Maflow Corea 200 1,797 Receivables to the parent company include finance provided to Maflow S.A. Spolka Akyjna (sole partner) amounting to 224 thousand Euros. Receivables to others consist of the remaining amount of the Severance Pay Fund advance paid in accordance with law 662/96. Valuation criteria Shareholdings are valued at their acquisition cost (gross of any additional charges), that is reduced in the event of lasting losses in value. The company adjusted the entry values of the majority of the above-mentioned shareholdings to those of their respective net worth in order to obtain an appropriate valuation. Credits are entered at their presumed realisation value, net of the appropriate depreciation funds, proportionate to the actual bad debt risk. Adjusted value: 12,946 thousand Euros The economic and financial values of subsidiaries were analysed to calculate the relative adjusted values; these were obtained reclassifying data according to the reporting package prepared for consolidation into Maflow S.p.A. as at 31 December 2008 and international IFRS standards. The following criteria were applied in estimating the relative values: no benefit was attributed to the subsidiary companies net worth to adjust those debts entered in whole or in part (both to companies of the group or external bodies); this in light of the fact that the composition of debts, conditions of existing liens and local regulations in merit are not known at present; no benefit was attributed to the subsidiary companies net worth to obtain latent surpluses relating to the assets entered (for example, buildings, systems, stock). 139

The following pages contain a summary of the results for each shareholding. Details of summary subsidiary balance sheet analysis MAN Servizi S.r.l. MAN Servizi S.r.l. ASSETS LIABILITIES Intangible fixed assets 0 Severance Pay Fund or similar funds 901 Tangible fixed assets 192 Deferred tax 10 Financial fixed assets 0 Non current financial liabilities 0 of which: Shareholdings 0 of which: M/L.T. debts for leasing 0 Others (intercompany) 0 M/L.T. payables to banks 0 Others (non intercompany) 0 M/L.T. payables to others 0 M/L.T. debts (intercompany) 0 M/L deferred revenue (government contributions) Tax advance 0 0 Other non current assets 0 Other non-current liabilities 0 Provision for risks and charges (part M/L.T.) 0 TOTAL NON CURRENT ASSETS 192 TOTAL NON-CURRENT LIABILITIES 911 Stock 0 Current financial liabilities 25 of which: B.T. debts for leasing 0 Commercial credits 6.754 B.T. payables to banks 25 of which: Commercial credits (intercompany) 6.884 B.T. payables to others 0 Commercial credits (non intercompany) (130) B.T. debts (intercompany) 0 Current tax credits 231 Provision for risks and charges (part B.T.) 0 Current financial loans 0 Trade debts 5,264 of which: Current financial loans(intercompany) 0 of which: Trade debts (intercompany) 3,462 Current financial loans (non intercompany) 0 Trade debts (non intercompany) 1,802 Liquid assets 0 Tax debts 413 Other debts (1) of which: Other debts (intercompany) 0 Other debts (non intercompany) (1) TOTAL CURRENT ASSETS 6,985 TOTAL CURRENT LIABILITIES 5,701 company capital 100 Reserves 316 Year s profit (Loss) 149 TOTAL NET WORTH 565 TOTAL ASSETS 7,177 TOTAL LIABILITIES AND NET WORTH 7,177 140

Values expressed in thousands of Euros 100% share in MAN Servizi S.r.l. was valued at 100 thousand Euros as at 31 December 2008 compared to net worth of 565 thousand Euros. The Subsidiary s total assets amount to 7,177 thousand Euros, consisting of: Financial fixed assets 1 thousand Euros; Systems and machinery 139 thousand Euros; Industrial and commercial equipment 35 thousand Euros; Other assets 17 thousand Euros; Deposits 3 thousand Euros; VAT credits 220 thousand Euros; Receivables to others intercompany 6,466 thousand Euros; Receivables to Maflow S.p.A. 286 thousand Euros Receivables to third parties 5 thousand Euros; PROFIT AND LOSS ACCOUNT Sales of goods and services 0 Other revenue 16,881 Total revenue 16,881 Operating costs (16,073) EBITDA 808 Depreciation and devaluations (47) Operating result 761 Financial proceeds and charges (12) Profits (losses) on shareholdings 0 Profits (losses) on sale of investments 1 Pre-tax result 750 Income tax (601) Net result 149 Values in thousands of Euros 141

97% of assets consists of credits, of which the majority intercompany. There are not many assets that can be liquidated to fulfil company obligations and leave a margin for the Parent Company. Has no value as going concern as a services Company for the Group that, following the Maflow S.p.A. business spin-off, took on significant labour costs. Moreover, revenue includes revenue from management fees and group research and development activities carried out for the following companies: Amounts in thousands of Management fees Research and development activities Maflow S.p.A. 5,100 995 Maflow France S.a. 1,550 Maflow Polska Sp.zo.o 8,075 Maflow Iberica 678 15,403 995 Value of the shareholding reduced to zero. It is noted that supplements may be necessary to meet payables to third parties amounting to 3.1 million Euros and intercompany debts amounting to 3.5 million Euros due to the uncertainty of collecting the relative credits. 142

Maflow Finance S.p.A. Maflow Finance S.p.A. ASSETS LIABILITIES Intangible fixed assets 0 Severance Pay Fund or similar funds 0 Tangible fixed assets 0 Deferred tax 0 Financial fixed assets 0 Non current financial liabilities 0 of which: Shareholdings 0 of which: M/L.T. debts for leasing 0 Others (intercompany)) 0 Debiti M/L.T. verso banche 0 Others (non intercompany 0 M/L.T. payables to others 0 M/L.T. debts (intercompany) 0 Tax advance 0 M/L deferred revenue (government contributions 0 Other non current assets 0 Other non-current liabilities 0 Provision for risks and charges (part M/L.T.) 0 TOTAL NON CURRENT ASSETS 0 TOTAL NON-CURRENT LIABILITIES 0 Stock 0 Current financial liabilities 0 of which: B.T. debts for leasing 0 Commercial credits 1.069 B.T. payables to banks 0 Commercial credits (intercompany) 1.069 B.T. payables to other 0 Commercial credits (non intercompany)) 0 B.T. debts (intercompany) 0 Current tax credits 4 Provision for risks and charges (part B.T.) 0 Current financial loans 0 Trade debts 0 of which: Current financial loans (intercompany) 0 of wich: Trade debts (intercompany) 0 Current financial loans (non intercompany) 0 Trade debts (non intercompany) 0 Liquid assets 4 Tax debts 0 Other debts 0 of which: Other debts (intercompany) 0 Other debts (non intercompany) 0 ) TOTAL CURRENT ASSETS 1,077 TOTAL CURRENT LIABILITIES 0 Values expressed in thousands Euros 100% share in Maflow Finance S.p.A. was valued at 1,112 thousand Euros as at 31 December 2008 compared to a net worth of 1,077 thousand Euros. The Subsidiary s total assets amount to 1,077 thousand Euros, consisting of: Liquid assets 4 thousand Euros; Company capital 1.000 Reserves 77 Year s profit (Loss) 0 TOTAL NET WORTH 1,077 TOTAL ASSETS 1,077 TOTAL LIABILITIES AND NET WORTH 1,077 Receivables to Maflow S.p.A. 1,069 thousand Euros; VAT credits 3 thousand Euros. The Company is not a going concern, there is no profit and loss account data. Assets include mainly receivables to Maflow S.p.A., liquid assets are the only part that can be used. For the 143

sake of prudence, it is best to reduce the value to zero. 144

Maflow Components (Dalian) Co. Ltd Maflow Components (Dalian) Co., Ltd. ASSETS LIABILITIES Intangible fixed assets 239 Severance Pay Fund or similar funds 0 Tangible fixed assets 3,692 Deferred tax 2 Financial fixed assets 0 Non current financial liabilities 1.546 of which: Shareholdings 0 of which: M/L.T. debts for leasing 0 Others (intercompany) 0 M/L.T. debts for leasing 0 Others (non intercompany) 0 M/L.T. payables to others 1,546 M/L.T. debts (intercompany) 0 Tax advance 0 M/L deferred revenue (government contributions) 0 Other non current assets 0 Other non-current liabilities 0 Provision for risks and charges (part M/L.T.) 0 TOTAL NON CURRENT ASSETS 3,931 TOTAL NON-CURRENT LIABILITIES 1,548 Stock 1.077 Current financial liabilities 2,281 of which: B.T. debts for leasing 0 Commercial credits 1.199 B.T. payables to banks 0 of which: Commercal credits (intercompany) 906 B.T. payables to others 250 Commercial credits (non intercompany) 293 B.T. debts (intercompany 2,031 Current tax credits 460 Provision for risks and charges (part B.T 0 Current financial loans 0 Trade debts 2,003 of which: Financial loans (intercompany) 0 of which: Trade debts (intercompany) 619 Financial loans (non intercompany)) 0 ) Trade debts (non intercompany) 1,384 Liquid assets 576 Tax debts 2 Other debts (13) of which: Other debts (intercompany) 0 ) Other debts (non intercompany (13) TOTAL CURRENT ASSETS 3,312 TOTAL CURRENT LIABILITIES 4,273 Company capital 5,432 Reserves (2,475) Year s profit (Loss) (1,535) TOTAL NET WORTH 1,422 TOTAL ASSETS 7,243 TOTAL LIABILITIES AND NET WORTH 7,243 Values expressed in thousands of Euros 51% share in Maflow Components (Dalian) Co. Ltd (Dalian) was valued at 1,747 thousand Euros as at 31 December 2008 compared to net worth of 1,422 thousand Euros (51% is 725 thousand Euros). The Subsidiary s total assets amount to 7,243 thousand Euros consisting of: Intangible fixed assets 239 thousand Euros of which 72 goodwill and 167 use of software; Systems and machinery 3,189 thousand Euros; Industrial and commercial equipment 1,108 thousand Euros; 145

Cars 28 thousand Euros; Other assets 291 thousand Euros; Land and Buildings 76 thousand Euros; Advances 233 thousand Euros; VAT credits 460 thousand Euros; Intercompany credits 906 thousand Euros; Stock 1,077 thousand Euros, of which: raw materials 704, finished products 65, semifinished products 152, goods in transit 81, returns 100 and depreciation funds -25; Receivables to third parties 60 thousand Euros; Liquid assets 576 thousand Euros. PROFIT AND LOSS ACCOUNT Sales of goods and services 1,681 Other revenue (3) Total revenue 1,678 Operating costs (2,978) EBITDA (1,300) Depreciation and devaluations (280) Operating result (1,580) Financial proceeds and charges 46 Profits (losses) on shareholdings 0 Profits (losses) on sale of investments 0 Pre-tax result (1,534) Income tax (2) Net result (,536) Values expressed in thousand of Euros 146

During the course of 2008 Maflow S.p.A. transferred 49% of the Company to Codan Gummi AS of which it holds 100% through Maflow Gummi AS. Assets can be used to obtain cash flow except for: Land and Buildings (that Chinese law considers in a different way to Italian law); Intangible fixed assets; Intercompany credits (these are difficult to collect due to the Group s financial difficulties and owing to the lack of more detailed information it is impossible to assess whether they would offset the debts). It is best to value the Shareholding according to the net worth as at 31 December 2008, adjusting the above-mentioned items (1,221 thousand Euros) according to the negative trend during the first months of 2009, then reducing the value to 51% of the adjusted net worth and that is 839 thousand Euros. 147

Maflow Holland NV Maflow Holland NV ASSETS LIABILITIES Intangible fixed assets 0 Severance Pay Fund or similar funds 0 Tangible fixed assets 29 Deferred tax 0 Financial fixed assets 0 Non current financial liabilities 1,200 of which: Shareholdings 0 of which: M/L.T. debts for leasing 0 Others (intercompany) 0 M/L.T. payables to banks 0 Others (non intercompany) 0 M/L.T. payables to others 0 M/L.T. debts (intercompany) 1,200 Tax advance 0 M/L deferred revenue (government contributions) 0 Other non-current assets 0 Other non-current liabilities 0 Provision for risks and charges (part M/L.T.) 0 TOTAL NON CURRENT ASSETS 29 TOTAL NON-CURRENT LIABILITIES 1,200 Stock 0 Current financial liabilities 29 of which: B.T. debts for leasing 0 Commercial credits 1.290 B.T. payables to banks 0 of which: Commercial credits (intercompany) 1.252 B.T. payables to others 0 ) Commercial credits (non intercompany) 38 B.T. debts (intercompany) 29 Current tax credits 4 Provision for risks and charges (part B.T.) 0 Current financial loans 0 Trade debts 224 of which: Current financial loans(intercompany) 0 of which: Trade debts (intercompany) 0 Current financial loans (non intercompany) 0 Trade debts (non intercompany) 224 Liquid assets 13 Tax debts 34 Other debts (27) of which: Other debts (intercompany) 0 Other debts (non intercompany) (27) ) TOTAL CURRENT ASSETS 1,307 TOTAL CURRENT LIABILITIES 260 Company capital 210 Reserves (492) Year s profit (Loss) 158 TOTAL NET WORTH (124) TOTAL ASSETS 1,336 TOTAL LIABILITIES AND NET WORTH 1,336 Values expressed in Euros 100% share in Maflow Holland NV. was valued at zero as at 31 December 2008 compared to its negative net worth of 124 thousand Euros. The Subsidiary s total assets amount to 1,336 thousand Euros, consisting of: Industrial and commercial equipment 29 thousand Euros; 148

Liquid assets 13 thousand Euros; Intercompany credits 1,252 thousand Euros; Receivables to third parties 38 thousand Euros; VAT credits 4 thousand Euros. PROFIT AND LOSS ACCOUNT Sales of goods and services 0 i Other revenue 2,012 i Total revenue 2,012 Operating costs (1,804) EBITDA 208 Depreciation and devaluations (18) Operating result 190 Financial proceeds and charges (29) Profits (losses) on shareholdings (3) Profits (losses) on sale of investments 0 Pre-tax result 158 Income tax 0 Net result 158 Values expressed in thousand of Euros 94% of assets are intercompany credits. There are not many assets that can be liquidated to fulfil company obligations and leave a margin for the Parent Company. It has no real value as a going concern as a Services company for the Group. It is thought best to reduce the value of the shareholding to zero. It is noted that, due to the uncertainty of collecting the relative credits, supplements may be necessary to meet payables to third parties amounting to 0.2 million Euros, a negative net worth of 0.124 million Euros and intercompany financial loans amounting to 1.2 million Euros. A specific fund of 0.124 million Euros has been set aside in Maflow S.p.A. to make good the net worth of 0.124 million Euros. 149

150

Maflow KK (Japan) of which: of which: Maflow KK ASSETS LIABILITIES Intangible fixed assets 8 Severance Pay Fund or similar funds 0 Tangible fixed assets 16 Deferred tax 0 Financial fixed assets 39 Non current financial liabilities 0 of which: Shareholdings 0 of which: M/L.T. debts for leasing 0 Others (intercompany) 0 M/L.T. payables to banks 0 39 M/L.T. payables to others 0 M/L.T. debts (intercompany) 0 Tax advance 0 M/L deferred revenue (government contributions) 0 Other non current assets 0 Other non-current liabilities 0 Provision for risks and charges (part M/L.T.) 0 TOTAL NON CURRENT ASSETS 63 TOTAL NON-CURRENT LIABILITIES 0 Stock 114 Current financial liabilities 0 of which: B.T. debts for leasing 0 Commercial credits 185 B.T. payables to banks 0 of which: ui: Commercial credits (intercompany) 0 B.T. payables to others 0 Commercial credits (non intercompany) 185 B.T. debts (intercompany 0 Current tax credits 25 Provision for risks and charges (part B.T.) 0 Current financial loans 0 Trade debts 435 of which: Current financial loans(intercompany) 0 of which: Trade debts (intercompany) 367 Current financial loans (non intercompany) 0 Trade debts (non intercompany) 68 Liquid assets 146 Tax debts 14 Other debts 1 of which: Other debts (intercompany) 0 ) Other debts (non intercompany) 1 TOTAL CURRENT ASSETS 470 TOTAL CURRENT LIABILITIES 450 Company capital 275 Reserves (10) Year s profit (Loss) (182) TOTAL NET WORTH 83 TOTAL ASSETS 533 TOTAL LIABILITIES AND NET WORTH 533 Values expressed in thousand of Euros 100% share in Maflow KK. was valued at 279 thousand Euros as at 31 December 2008 compared to net worth of 83 thousand Euros. The Subsidiary s total assets amount to 533 thousand Euros, consisting of: Intangible fixed assets 8 thousand Euros; Industrial and commercial equipment 16 thousand Euros; Liquid assets 146 thousand Euros; 151

Deposits 39 thousand Euros; Receivables to third parties 185 thousand Euros; VAT credits 25 thousand Euros; Stock 114 thousand Euros, of which 59 finished products and 55 goods in transit. PROFIT AND LOSS ACCOUNT Sales of goods and services 228 Other revenue 0 Total revenue 228 Operating costs (410) EBITDA (182) Depreciation and devaluations 0 Operating result (182) Financial proceeds and charges 0 Profits (losses) on shareholdings 0 Profits (losses) on sale of investments 0 Pre-tax result (182) Income tax 0 Net result (182) Values expressed in thousand Euros The Company was set up in 2008 and carries out commercial activities. Assets available can be used for cash flow, therefore the net worth as at 31 December 2008 (83 thousand Euros), adjusted by its trend in the first four months of 2009, is used to value the shareholding. This analysis shows that by the first few months of 2009 the subsidiary s net worth was negative; therefore it is valued at zero. It is noted that supplements may be necessary to meet payables to companies of the group amounting to around 0.4 million Euros and payables to third parties amounting to around 0.1 million Euros due to the uncertainty of collecting the relative credits. Moreover, possible resources necessary to cover net worth deficit amount to around 145 thousand Euros. 152

Maflow Korea Ltd Maflow Korea Ltd. ASSETS LIABILITIES Intangible fixed assets 0 Severance Pay Fund or similar funds 0 Tangible fixed assets 3 Deferred tax 0 Financial fixed assets 9 Non current financial liabilities 0 of which: : Shareholdings 0 of which: M/L.T. debts for leasing 0 Others (intercompany) 0 M/L.T. payables to banks 0 Others (non intercompany) 9 M/L.T. payables to others 0 M/L.T. debts (intercompany) 0 Tax advance 0 M/L deferred revenue (government contributions) 0 Other non current assets 0 Other non-current liabilities 0 Provision for risks and charges (part M/L.T.) 0 TOTAL NON CURRENT ASSETS 12 TOTAL NON-CURRENT LIABILITIES 0 Stock 0 Current financial liabilities 193 of which: B.T. debts for leasing 0 Commercial credits 222 B.T. payables to banks 0 of which: : Commercial credits (intercompany) 222 B.T. payables to others 0 Commercial credits (non intercompany) 0 B.T. debts (intercompany) 193 Current tax credits 0 Provision for risks and charges (part B.T.) 14 Current financial loans 0 Trade debts 1 of which: Current financial loans(intercompany) 0 of which: Trade debts (intercompany) 0 Current financial loans (non intercompany) 0 Debiti commerciali (intercompany) 1 Liquid assets 13 Tax debts 3 Other debts 0 of which: Other debts (intercompany) 0 Other debts (non intercompany) 0 ) TOTAL CURRENT ASSETS 235 TOTAL CURRENT LIABILITIES 211 Company capital 39 Reserves (43) Year s profit (Loss) 40 TOTAL NET WORTH 36 TOTAL ASSETS 247 TOTAL LIABILITIES AND NET WORTH 247 Values expressed in thousand Euroso 100% share in Maflow Korea Ltd. was valued at 41 thousand Euros as at 31 December 2008 compared to net worth of 36 thousand Euros. The Subsidiary s total assets amount to 247 thousand Euros, consisting of: Industrial and commercial equipment 3 thousand Euros; Liquid assets 13 thousand Euros; Deposits 9 thousand Euros; Intercompany credits 222 thousand Euros; 153

PROFIT AND LOSS ACCOUNT Sales of goods and services 0 Other revenue 295 Total revenue 295 Operating costs (248) EBITDA 47 Depreciation and devaluations (1) Operating result 46 Financial proceeds and charges (6) Profits (losses) on shareholdings 0 Profits (losses) on sale of investments 0 Pre-tax result 40 Income tax 0 Net result 40 Values expressed in thousand of Euros The Company was set up in 2007 and carries out commercial activities. Assets available consist mainly of intercompany credits and therefore difficult to collect. Therefore, for the sake of prudence the shareholding s value is reduced to zero. It is noted that supplements may be necessary to meet intercompany debts amounting to 0.2 million Euros due to the uncertainty of collecting the relative credits. 154

Maflow North America Inc. Maflow North America, Inc. ASSETS LIABILITIES Intangible fixed assets 102 Severance Pay Fund or similar funds 0 Tangible fixed assets 3 Deferred tax 0 Financial fixed assets 1 Non current financial liabilities 216 of which: Shareholdings 0 of which: M/L.T. debts for leasing 0 Others (intercompany) 0 M/L.T. payables to banks 0 Others (non intercompany) 1 M/L.T. payables to others 0 M/L.T. debts (intercompany) 216 Tax advance 0 M/L deferred revenue (government contributions) 0 Other non current assets 0 Other non-current liabilities 0 Provision for risks and charges (part M/L.T.) 0 TOTAL NON CURRENT ASSETS 106 TOTAL NON-CURRENT LIABILITIES 216 Stock 0 Current financial liabilities 11 of which: B.T. debts for leasing 0 Commercial credits 228 B.T. payables to banks 0 of which: Commercial credits (intercompany) 213 B.T. payables to others 0 Commercial credits (non intercompany) 15 B.T. debts (intercompany) 11 Current tax credits 0 Provision for risks and charges (part B.T.) 0 Current financial loans 0 Trade debts 69 of which: Current financial loans(intercompany) 0 of which: Trade debts (intercompany) 13 Current financial loans (non intercompany) 0 Trade debts (non intercompany) 56 Liquid assets 3 Tax debts 0 Other debts 5 of which: Other debts (intercompany) 0 Other debts (non intercompany) 5 TOTAL CURRENT ASSETS 231 TOTAL CURRENT LIABILITIES 85 Company capital 56 Reserves (69) Year s profit (Loss) 49 TOTAL NET WORTH 36 TOTAL ASSETS 337 TOTAL LIABILITIES AND NET WORTH 337 Values expressed in thousand Euros 100% share in Maflow North America Inc. was valued at 86 thousand Euros as at 31 December 2008 compared to net worth of 36 thousand Euros. The Subsidiary s total assets amount to 337 thousand Euros, consisting of: Intangible fixed assets 102 thousand Euros; Industrial and commercial equipment 3 thousand Euros; Liquid assets 3 thousand Euros; Deposits 1thousand Euros; 155

Intercompany credits 213 thousand Euros; Receivables to third parties 15 thousand Euros PROFIT AND LOSS ACCOUNT Sales of goods and services 34 Other revenue 394 Total revenue 428 Operating costs (331) EBITDA 97 Depreciation and devaluations (35) Operating result 62 Financial proceeds and charges (13) Profits (losses) on shareholdings 0 Profits (losses) on sale of investments 0 Pre-tax result 49 Income tax 0 Net result 49 Values expressed in thousand of Euros Company carries out commercial activities. Assets available consist mainly of intercompany credits (therefore difficult to collect) and intangible fixed assets. Therefore, for the sake of prudence shareholding is reduced to zero. Payables to third parties amounting to 0.1 million Euros and intercompany debts amounting to 0.2 million Euros remain. Moreover, financial resources necessary to cover the deficit amount to around 279 thousand Euros. 156

Maflow Mexico SA del C.V. Maflow de Mexico de C.V. ASSETS LIABILITIES Intangible fixed assets 0 Severance Pay Fund or similar funds 0 Tangible fixed assets 1,478 Deferred tax 0 Financial fixed assets 0 Non current financial liabilities 0 of which: Shareholdings 0 of which: M/L.T. debts for leasing 0 Others (intercompany) 0 M/L.T. payables to banks 0 Others (non intercompany) 0 M/L.T. payables to others 0 M/L.T. debts (intercompany) 0 Tax advance 0 M/L deferred revenue (government contributions) 0 Other non current assets 0 Other non-current liabilities 0 Provision for risks and charges (part M/L.T.) 0 TOTAL NON CURRENT ASSETS 1,478 TOTAL NON-CURRENT LIABILITIES 0 Stock 820 Current financial liabilities 0 of which: B.T. debts for leasing 0 Commercial credits 1.154 B.T. payables to banks 0 of which: Commercial credits (intercompany) 175 B.T. payables to others 0 Commercial credits (non intercompany) 979 B.T. debts (intercompany) 0 Current tax credits 418 Provision for risks and charges (part B.T.) 0 Current financial loans 0 Trade debts 2.223 of which: Current financial loans(intercompany) 0 of which: Trade debts (intercompany) 1.053 Current financial loans (non intercompany) 0 ) Trade debts (non intercompany) 1.170 Liquid assets 107 Tax debts 89 Other debts (6) of which: Other debts (intercompany) 0 Other debts (non intercompany) (6) TOTAL CURRENT ASSETS 2,499 TOTAL CURRENT LIABILITIES 2,306 Company capital 690 Reserves 4.883 Year s profit (Loss) (3,902) TOTAL NET WORTH 1,671 TOTAL ASSETS 3,977 TOTAL LIABILITIES AND NET WORTH O 3,977 Values expressed in thousand Euros 100% share in Maflow Mexico SA del C.V. was valued at 1.672 thousand Euros as at 31 December 2008 compared to net worth of 1,671 thousand Euros. The Subsidiary s total assets amount to 3.977 thousand Euros, consisting of: Systems and machinery 1,079 thousand Euros; Other tangible fixed assets 89 thousand Euros; Fixed assets in progress 310 thousand Euros; Liquid assets 107 thousand Euros; 157

VAT credits 418 thousand Euros; Intercompany credits 175 thousand Euros; Receivables to third parties 979 thousand Euros. PROFIT AND LOSS ACCOUNT Sales of goods and services 2,678 Other revenue 0 Total revenue 2,678 Operating costs (5,620) EBITDA (2,942) Depreciation and devaluations (154) Operating result (,.096) Financial proceeds and charges (806) Profits (losses) on shareholdings 0 Profits (losses) on sale of investments 0 Pre-tax result (3,902) Income tax 0 Net result (3,902) Values expressed in thousand of Euros Company carries out production activities. Assets available may be used for cash flow, therefore, net worth as at 31 December 2008 (1,671 thousand Euros), adjusted by values in first four months of 2009 and intangible fixed assets (175 thousand Euros) are used to value shareholding. The analysis shows that the subsidiary s net worth has fallen by the first four months of 2009; therefore, for the sake of prudence it is reduced to 1,154 thousand Euros. 158

Maflow do Brazil LtdA Maflow do Brasil Ltda ASSETS LIABILITIES Intangible fixed assets 0 Severance Pay Fund or similar funds 0 Tangible fixed assets 2,427 Deferred tax 41 Financial fixed assets 0 Non current financial liabilities 0 of which: Shareholdings 0 of which: M/L.T. debts for leasing 0 Others (intercompany) 0 M/L.T. payables to banks 0 Others (non intercompany) 0 M/L.T. payables to others 0 M/L.T. debts (intercompany) 0 Tax advance 27 M/L deferred revenue (government contributions) 0 Other non current assets 0 Other non-current liabilities 0 TOTAL NON CURRENT ASSETS 2,454 TOTAL NON-CURRENT LIABILITIES 88 47 Stock 2.201 Current financial liabilities 262 of which: B.T. debts for leasing 0 Commercial credits 613 B.T. payables to banks 262 of which: Commercial credits (intercompany) 0 B.T. payables to others 0 Commercial credits (non intercompany) 613 B.T. debts (intercompany) 0 Current tax credits 156 Provision for risks and charges (part B.T.) 0 Current financial loans 0 Trade debts 4.393 of which: Current financial loans(intercompany) 0 of which: Trade debts (intercompany) 3.251 Current financial loans (non intercompany) 0 Trade debts (non intercompany) 1.142 Liquid assets 98 Tax debts 48 Other debts 0 of which: Other debts (intercompany) 0 ) Other debts (non intercompany) 0 TOTAL CURRENT ASSETS 3,068 TOTAL CURRENT LIABILITIES 4,703 Company capital 8.205 Reserves (6.044) Year s profit (Loss) (1.430) TOTAL NET WORTH 731 TOTAL ASSETS 5,522 TOTAL LIABILITIES AND NET WORTH 5,522 Values expressed in thousand Euros 99.98% share in Maflow do Brazil LtdA was valued at 2,676 thousand Euros as at 31 December 2008 compared to net worth of 731 thousand Euros. The Subsidiary s total assets amount to 5,522 thousand Euros, consisting of: Systems and machinery 1,917 thousand Euros; Other tangible assets 510 thousand Euros; Advance tax 27 thousand Euros; Liquid assets 98 thousand Euros; 159

VAT credits 156 thousand Euros; Receivables to third parties 613 thousand Euros. PROFIT AND LOSS ACCOUNT Sales of goods and services 11,308 Other revenue 131 Total revenue 1,.439 Operating costs (11,579) EBITDA (140) Depreciation and devaluations (455) Operating result (595) Financial proceeds and charges (799) Profits (losses) on shareholdings 0 Profits (losses) on sale of investments 0 Pre-tax result (1,394) Income tax (36) Net result (1,430) Values expressed in thousands of Euros Company carries out production activities. Assets available may be used for cash flow, except for advance tax, therefore its net worth as at 31 December 2008 (731 thousand Euros), adjusted by value in first four months of 2009, is used to value shareholding. This analysis shows that the subsidiary s net worth as at 31 December 2008 does not bear in mind contribution of Maflow S.p.A. s credit of 2,020 thousand Euros to the future capital increase account. Shareholding is valued at 2,155 thousand Euros. 160

Maflow France SA Maflow France SA ASSETS LIABILITIES Intangible fixed assets 1,390 Severance Pay Fund or similar funds 933 Tangible fixed assets 6,404 Deferred tax 1,133 Financial fixed assets 3,338 Non current financial liabilities 8,225 of which: Shareholdings 3,273 of which: M/L.T. debts for leasing 325 Others (intercompany) 0 M/L.T. payables to banks 0 Others (non intercompany) 65 M/L.T. payables to others 0 M/L.T. debts (intercompany) 7,900 Tax advance (193) M/L deferred revenue (government contributions) 0 Other non current assets 0 Other non-current liabilities 8 Provision for risks and charges (part M/L.T.) 788 TOTAL NON CURRENT ASSETS 10,939 TOTAL NON-CURRENT LIABILITIES 11,087 Stock 2,805 Current financial liabilities 1,082 of which: B.T. debts for leasing 235 Commercial credits 2,309 B.T. payables to banks 768 of which: Commercial credits (intercompany) 588 B.T. payables to others 0 Commercial credits (non intercompany 1,721 B.T. debts (intercompany) 79 Current tax credits 79 Provision for risks and charges (part B.T.) 0 Current financial loans 0 Trade debts 9,724 of which: Current financial loans(intercompany) 0 of which: Trade debts (intercompany) 5,507 Current financial loans (non intercompany) 0 Trade debts (non intercompany 4,217 Liquid assets 1 Tax debts 1,376 Other debts (118) of which: Other debts (intercompany) 0 Other debts (non intercompany) (118) TOTAL CURRENT ASSET 5,194 TOTAL CURRENT LIABILITIES 12,064 Company capital 491 Reserves (4,956) Year s profit (Loss) (2,553) TOTAL NET WORTH (7,018) TOTAL ASSETS 16,133 TOTAL LIABILITIES AND NET WORTH 16,133 Values expressed in thousands of Euros 99.98% share in Maflow France SA was valued at zero as at 31 December 2008 compared to a negative net worth of 7,018 thousand Euros. The Subsidiary s total assets amount to 16,133 thousand Euros, consisting of: Intangible fixed assets 1,390 thousand Euros, of which goodwill 1,378 thousand Euros; Property 2,442 thousand Euros; Systems and machinery 3,637 thousand Euros; 161

Other fixed assets 325 thousand Euros; Deferred taxes 193 thousand Euros; Shareholding in Maflow Components Iberica 3,273 thousand Euros; Finance to third parties 65 thousand Euros; Liquid assets 1 thousand Euros; VAT credits 79 thousand Euros; Receivables to third parties 1,721 thousand Euros; Intercompany credits 588 thousand Euros; PROFIT AND LOSS ACCOUNT Sales of goods and services 25,489 Other revenue 133 Total revenue 25,622 Operating costs (26.104) EBITDA (482) Depreciation and devaluations (1,217) Operating result (1,699) Financial proceeds and charges (730) Profits (losses) on shareholdings 0 Profits (losses) on sale of investments 79 Pre-tax result (2,350) Income tax (204) Net result (2,554) Values expressed in thousands of Euros Company carries out production activities. Assets available may be used for cash flow, except for intangible fixed assets and intercompany credits, therefore its net worth as at 31 December 2008 (negative 7,018 thousand Euros), adjusted by those items indicated and its reduction in value during the first four months of 2009, are used to value the shareholding. 162

This analysis shows that the value assigned as at 31 December 2008 is in line with the company s situation. Therefore value of zero is confirmed. Balance sheet shows that the following need to be made good: net worth of 8.5 million Euros (of which 3,255 million Euros already set aside to Maflow S.p.A. to cover losses), payables to Maflow S.p.A. (they amounted to 1.9 million Euros as at 31 December 2008, subject of contribution to future capital increase account in accordance with aforementioned agreement), payables to Maflow Components Iberica S.L. amounting to 6 million Euros (100% controlled), intercompany trade debts amounting to 5.5 million Euros and payables to third parties amounting to 8,524 thousand Euros. Moreover, Maflow France S.A. owns 100% of Maflow Components Iberica S.L whose book value is lower than the adjusted NW. The value of Maflow France S.A. does not need to be changed as its assets are mainly intercompany credits as can be seen from Maflow Components Iberica S.L. s data. Maflow France S.A. leases a building entered in the balance sheet (according to IFRS standards), whose surplus value compared to that resulting from an expert s report in 2007 is of around 5,700 thousand Euros. The 2009 Q1 residual debt for leasing is of 441 thousand Euros. The shareholding s value will not be increased as no recent expert report is available. 163

Maflow Components Iberica SL Maflow Components Iberica SL ASSETS LIABILITIES Intangible fixed assets 199 Severance Pay Fund or similar funds 0 Tangible fixed assets 1,720 Deferred tax 73 Financial fixed assets 23 Non current financial liabilities 926 of which: Shareholdings 0 of which: M/L.T. debts for leasing 0 Others (intercompany) 0 M/L.T. payables to banks 926 i Others (non intercompany 23 M/L.T. payables to others 0 M/L.T. debts (intercompany) 0 Tax advance 0 M/L deferred revenue (government contributions) 0 Other non current assets 0 Other non-current liabilities 0 Provision for risks and charges (part M/L.T.) 23 TOTAL NON CURRENT ASSETS 1,942 TOTAL NON-CURRENT LIABILITIES 1,022 Stock 1,157 Current financial liabilities 1,912 of which: B.T. debts for leasing 0 Commercial credits 3,087 B.T. payables to banks 472 of which: Commercial credits (intercompany 202 B.T. payables to others 1,440 Commercial credits (non intercompany) 2,885 B.T. debts (intercompany) 0 Current tax credits 2 Provision for risks and charges (part B.T.) 0 Current financial loans 6,800 Trade debts 4,272 of which: Current financial loans (intercompany) 6,800 of which: Trade debts (intercompany) 2,284 Current financial loans (non intercompany) 0 Trade debts (non intercompany) 1,988 Liquid assets 552 Tax debts (3) Other debts 0 of which Other debts (intercompany) 0 Other debts (non intercompany) 0 TOTAL CURRENT ASSETS 11,598 TOTAL CURRENT LIABILITIES 6,181 Company capital 889 Reserves 6,216 Year s profit (Loss) (768) TOTAL NET WORTH 6,337 TOTAL ASSETS 13,540 TOTAL LIABILITIES AND NET WORTH 13,540 Values expressed in thousands of Euros Maflow France SA s 100% share of Maflow Components Iberica SL was valued at 3,273 thousand Euros as at 31 December 2008 compared to a net worth of 6,337 thousand Euros. The Subsidiary s total assets amount to 13,540 thousand Euros, consisting of: Intangible fixed assets 199 thousand Euros; Non-detailed tangible fixed assets 1,720 thousand Euros; Other deposits 23 thousand Euros; 164

Stock 1,157 thousand Euros, of which: raw materials 683, finished products 396, semi-finished products 83, goods in transit 14 and depreciation fund -19; Intercompany finance 6,800 thousand Euros; Liquid assets 552 thousand Euros; Tax credits 2 thousand Euros; Receivables to third parties 2,885 thousand Euros; Intercompany credits 202 thousand Euros. PROFIT AND LOSS ACCOUNT Sales of goods and services 21,451 Other revenue 536 Total revenue 21,987 Operating costs (22,399) EBITDA (412) Depreciation and devaluations (490) Operating result (902) Financial proceeds and charges 134 Profits (losses) on shareholdings 0 Profits (losses) on sale of investments 0 Pre-tax result (768) Income tax 0 Net result (768) Values expressed in thousands of Euros This valuation remains the same as financial loans to the company (amounting to 6 million Euros) have not been adjusted. In fact residual assets except for intangible fixed assets (199 thousand Euros), intercompany credits (202 thousand Euros) and other intercompany financial loans (800 thousand Euros not identified) are sufficient to settle payables to third parties. Valuation of 3,273 thousand Euros is confirmed as adjusted net worth is higher than that entered by Maflow France S.A. 165

Maflow Gummi AS Maflow Gummi A/S ASSETS LIABILITIES Intangible fixed assets 0 Severance Pay Fund or similar funds 0 Tangible fixed assets 0 Deferred tax 0 Financial fixed assets 9,241 Non current financial liabilities 0 of which: Shareholdings 9,241 of which: M/L.T. debts for leasing 0 Others (intercompany) 0 M/L.T. payables to banks 0 Others (non intercompany) 0 M/L.T. payables to others 0 M/L.T. debts (intercompany) 0 ) Tax advance 0 M/L deferred revenue (government contributions) 0 Other non current assets 0 M/L deferred revenue (government contributions) 0 Other non-current liabilities 0 TOTAL NON CURRENT ASSETS 9,241 TOTAL NON-CURRENT LIABILITIES 0 Stock 0 Current financial liabilities 0 of which: B.T. debts for leasing 0 Commercial credits 0 B.T. payables to banks 0 of which: Commercial credits (intercompany) 0 B.T. payables to others 0 Commercial credits (non intercompany) 0 B.T. debts (intercompany) 0 Current tax credits 0 Provision for risks and charges (part B.T.) 0 Current financial credits 350 Trade debts 531 of which: Current financial loans(intercompany) 350 of which: Trade debts (intercompany) 0 Current financial loans (non intercompany) 0 Trade debts (non intercompany) 531 Liquid assets 10 Tax debts 0 Other debts (10) of which: Other debts (intercompany) 0 Other debts (non intercompany) (10) TOTAL CURRENT ASSETS 360 TOTAL CURRENT LIABILITIES 521 Company capital 67 Reserves 9.003 Year s profit (Loss) 10 TOTAL NET WORTH 9,080 TOTAL ASSETS 9,601 TOTAL LIABILITIES AND NET WORTH 9,601 Values expressed in thousands of Euros 100% share in Maflow Gummi AS was valued at 9,640 thousand Euros as at 31 December 2008 compared to a net worth of 9,080 thousand Euros. The Subsidiary s total assets amount to 9,601 thousand Euros, consisting of Shareholding in Codan Gummi AS amounting to 9,241 thousand Euros; Intercompany financial loans 350 thousand Euros. 166

PROFIT AND LOSS ACCOUNT Sales of goods and services 0 Other revenue 0 Total revenue 0 Operating costs (6) EBITDA (6) Depreciation and devaluations 0 Operating result (6) Financial proceeds and charges 16 Profits (losses) on shareholdings 0 Profits (losses) on sale of investments 0 Pre-tax result 10 Income tax 0 Net result 10 Values expressed in thousands of Euros Maflow Gummi AS is a holding company that controls 100% of Codan Gummi AS (Codan Group holding company) consisting of: 167

Codan Gummi A/S Codan France Sas Codan Rubber AS Codan LingYun Automotive Rubber Hoses Ltd. Codan Rubber Ltd. Codan Gummi GmbH Codan Gummi AB Codan Argentina Sa Codan Rubber Mexico SA de CV Distlan Sa de CV ATTIVO Intangible fixed assets 0 1 0 7 0 0 0 0 38 6 Tangible fixed assets 0 1,729 460 9,855 348 1 12 817 1,544 6 Financial fixed assets 12,055 1,100 107 0 0 0 0 0 0 0 Of which Shareholdings 12,028 0 0 0 0 0 0 0 0 0 Others (intercompany) 0 1,100 0 0 0 0 0 0 0 0 Others (non intercompany) 27 0 107 0 0 0 0 0 0 0 Tax advance 0 0 0 10 50 0 0 6 37 0 Other non current assets 0 0 0 0 0 0 0 1,128 0 0 TOTAL NON CURRENT ASSETS 12,055 2,830 567 9,872 398 1 12 1,951 1,619 12 Stock 0 1,602 1,599 1,779 1,523 0 0 760 466 696 Commercial credits 8,251 2,145 5,689 3,326 1,530 128 388 457 2,048 804 Of which Commercial credits (intercompany) 583 1,060 4,953 515 703 17 386 139 1,447 103 Crediti commerciali (non intercompany) 7,668 1,085 736 2,811 827 111 2 318 601 701 Current tax credits 0 201 0 0 0 0 4 445 9 0 Current financial loans 160 0 4,083 0 0 0 0 0 0 0 Of which Current financial loans (intercompany) 160 0 4,083 0 0 0 0 0 0 0 Current financial loans (non intercompany) 0 0 0 0 0 0 0 0 0 0 Liquid assets 0 45 198 303 468 (13) 1 349 431 78 TOTAL CURRENT ASSETS 8,411 3,993 1,,569 5,408 3,521 115 393 2,011 2,954 1,578 TOTAL ASSETS 20,466 6,823 1,,136 15,280 3,919 116 405 3,962 4,573 1,590 168

Codan Gummi A/S Codan France Sas Codan Rubber AS Codan LingYun Automotive Rubber Hoses Ltd. Codan Rubber Ltd. Codan Gummi GmbH Codan Gummi AB Codan Argentina Sa Codan Rubber Mexico SA de CV Distlan Sa de CV LIABILITIES Severance Pay Fund or similar funds 0 93 0 0 0 107 0 0 77 36 Deferred tax 30 192 526 573 0 0 0 90 313 0 Non financial liabilities 0 0 0 2,147 0 0 0 0 0 0 Of which: M/L.T. debts for leasing 0 0 0 0 0 0 0 0 0 0 M/L.T. payables to banks 0 0 0 0 0 0 0 0 0 0 M/L.T. payables to others 0 0 0 1,287 0 0 0 0 0 0 M/L.T. debts (intercompany) 0 0 0 860 0 0 0 0 0 0 M/L deferred revenue (government contributions 0 0 0 0 0 0 0 0 0 0 Other non current liabilities 0 0 0 0 0 0 0 20 0 0 Provision for risks and charges (part M/L.T.) 0 350 0 0 0 0 0 0 0 0 TOTAL NON CURRENT LIABILITIES 30 635 526 2,.720 0 107 0 110 390 36 Current financial liabilities 1,046 0 2,847 1,162 1,499 0 0 1,717 613 0 Of which M/L.T. debts for leasing 0 0 0 0 0 0 0 17 0 0 M/L.T. payables to banks 0 0 2,847 527 0 0 0 132 0 0 M/L.T. payables to others 0 0 0 607 0 0 0 2 0 0 M/L.T. debts (intercompany) 1,046 0 0 28 1,499 0 0 1,566 613 0 Provision for risks and charges (part B.T.) 0 0 398 0 0 0 0 86 0 0 Trade debts 7,176 1,897 3,994 1,543 1,980 10 11 1,266 1,471 1,468 Of which Trade debts (Inter company) 0 442 1,952 377 1,199 0 0 390 819 1,167 Trade debts (non intercompany) 7,176 1,455 2,042 1,166 781 10 11 876 652 301 Tax debts 1 100 695 (20) 23 0 0 35 339 94 Other debts 935 86 (20) 0 118 8 0 102 0 0 Of whic Other debts (intercompany) 0 0 0 0 0 0 0 0 0 0 Other debts (non intercompany) 935 86 (20) 0 118 8 0 102 0 0 TOTAL CURRENT LIABILITIES 9,158 2,083 7,914 2,685 3,620 18 11 3,206 2,423 1,562 Company capital 6,804 1,578 67 3,078 8.972 767 16 829 7,873 4 Reserves 1,915 3,444 3,491 6,515 (8,623) (699) 288 877 (5,709) 91 Profit (Loss) carried forward 2,559 (917) 138 282 (50) (77) 90 (1,060) (404) (103) TOTAL NET WORTH 11,278 4,105 3.696 9,,8875 299 (9) 394 646 1,760 (8) TOTAL LIABILITIES AND NET WORTH 20,466 6,823 12,136 15,280 3,919 116 405 3,962 4.573 1,590 Values expressed in thousands of Euros Codan Gummi AS holds shareholdings amounting to 12,028 thousand Euros, of which 2,838 thousand Euros the 49% of Maflow Components (Dalian) Co.Ltd. and 9,190 thousand Euros regard the Codan Group. 169

Codan Codan Codan LingYun Codan Coda Maflow Coda France Rubbe Automotive Rubber Gummi n Gummi A/S Gummi n A/S Sas r AS Rubber Hoses Ltd. Ltd GmbH Company capital 6 6,804 1,578 67 3,078. 8,97 767 Reserves 9,003 7 1,915 3,444 3,49 6,515-8,623 2-699 Year s Profit (Loss) 1 2,559-917 1 13 282-50 -77 0 8 9,875 299-9 Total Net Worth 9,080 11,278 4,105 3,69 6 Adjustments Intercompany credits 350 74 1,060 9,03 515 703 17 Intangible fixed assets 0 3 0 1 6 0 0 7 0 Advance tax 0 0 0 0 0 10 50 Other financial fixed assets 0 0 1,100 0 0 0 0 Depreciation shareholdings 891 2,185 0 0 0 0 0 C Gu Adjusted Net Worth 7,839 8,350 1,944-5,340 9,360-421 -76 % held 100% 100% 100% 100% 67% 100% 100% Value shareholding 7,839 8,350 1,944 0 6,271 0 0 Values expressed in thousands of Euros As for the first shareholding, an adjustment of 2,032 thousand Euros is proposed in order to align the book value to the share belonging to Codan Gummi AS to 806 thousand Euros. As for the other Codan Group related shareholdings, the same adjustment criteria adopted to value all other Maflow Group shareholdings are proposed. Considering no definite distinction can be made between the Maflow Group and Codan Group, the shareholdings net worths are adjusted eliminating their intercompany credits, tax advances and intangible fixed assets. Moreover, it is noted that, in evaluating certain shareholdings of the Codan Group, some of those reduced to zero have debits that exceed their net worth. As for other Codan Gummi AS assets intergroup credits amounting to 743 thousand Euros are eliminated. Adjusted net worth is as follows: Net worth from balance sheet as at 31 December 2008 11,278 Depreciation Maflow Components (Dalian)Co.Ltd. shareholding (2,.032) ( 17 ) Depreciation Codan Group shareholdings (153) Depreciation intercompany credits (743) 8,350 It is proposed that the shareholding in Codan Gummi AS is depreciated by 891 thousand Euros, thus reducing it from 9,241 thousand Euros to 8,350 thousand Euros. Therefore, Maflow Gummi A/S s adjusted net worth is calculated as follows: ( 17 ) This value is obtained from the difference between the book value of 2,838 thousand Euros and 49% of the net worth of 1,645 thousand Euros. 170

Net worth from balance sheet as at 31 December 2008 9,080 Depreciation Codan Gummi AS shareholding (891) Depreciation intercompany credits (350) 7,839 In conclusion, the depreciation of Maflow S.p.A. shareholding in Maflow Gummi AS must be adjusted by 1,801 thousand Euros to align it to the adjusted net worth of 7,839 thousand Euros. Keumah Flow Co. Ltd. The 20% shareholding in Keumah Flow Co. Ltd was valued at 835 thousand Euros as at 31 December 2008 compared to a net worth of 589 thousand Euros. The affiliated company s value is adjusted according to its net worth as at 31 December 2008, having no documentation relating to the first few months of 2009. Bearing in mind the difference between the value and net worth the shareholding s value is adjusted by 246 thousand Euros, taking it to 589 thousand Euros. Summary of adjustments made to shareholding values The following summarizes the adjusted value of shareholdings that bears in mind: - Adjustments resulting from analysis of Maflow Polska Sp.zo.o. s estimated asset statement; in particular it is noted that the sum of adjustments reduces its NW to 17,867 thousand Euros, thus imposing total depreciation of Maflow S.p.A. s shareholding, that is, a final adjustment of 11,282 thousand Euros (excluding any risk funds to restore capital). It should be noted that the value by which Maflow Polska Sp.z o.o. s NW is reduced was calculated reducing the write-off of those assets identified in the analysis by the amount of deferred earnings entered to record the Special Economic Zone tax benefit (9,833 thousand Euros), also to be reduced to zero as a result of the relative deferred tax asset and by 4,183 thousand Euros, corresponding to trade debts with Maflow S.p.A. that totally depreciated the holding s assets during 171

the analysis; - Adjustments resulting from the summary analysis carried out according to the reporting packages as at 31 December 2008 and balance sheet documents available (without confirmation) for all other subsidiaries; - Quarter one net worth reductions, based on the comparison between values as at 31 December 2008 and 30 April 2009 (values according to IFRS accounting standards). 172

MAN Servizi S.r.l. Maflow Polska Sp.z.oo. Maflow North America, Inc. Maflow de Mexico de C.V. Maflow KK Maflow Finance S.p.A. Maflow Holland NV Maflow France SA Maflow do Brasil Ltda Maflow Components (Dalian) Co., Ltd. Maflow Korea Ltd. Maflow Gummi A/S Maflow Components Iberica SL 100% 100% 100% 100% 100% 100% 100% 99.98% 99.99% 51% 100% 100% 100% Company capital 100 16.667 56 690 275 1,000 210 491 8,205 5,432 39 67 889 Reserves 316 7.305 (69) 4,883 (10) 77 (492) (4,56) (6,044) (2,475) (43) 9,003 6,216 Waiver of credit from Maflow SpA acknowledged by subsidiaries in 2009 1,900 2,005 Year s Profit (Loss) 149 (12,689) 49 (3,902) (182) 0 158 (2,553) (1,430) (1,535) 40 10 (768) TOTAL NET WORTH - IFRS 31.12.2008 565 11,283 36 1.671 83 1,077 (124) (5,118) 731 3,427 36 9,080 6,337 Company capital 100 16,667 56 690 253 1,000 210 491 8,205 5,432 39 67 889 Reserves 465 5,394 (20) 1.055 (241) 77 (340) (5,627) (7,407) (1,830) 1 9,010 5.348 Year s Profit (Loss) 582 (16,368) 56 (416) (157) 0 40 (1,423) (636) (736) 54 3 (607) TOTAL NET WORTH - IFRS 30.04.2009 1,147 5,693 92 1.329 (145) 1,077 (90) (6,559) 162 2,866 94 9,080 5,630 ASSET VARIATIONS 31.12.2008-30.04.2009 582 (5,590) 56 (342) (228) 0 34 (1,441) (569) (561) 58 0 (707) Companies with negative variations (5,590) (342) (228) (1,441) (569) (561) (707) Companies with losses in quarter 1 (16,368) (416) (157) (1,423) (636) (736) (607) Book value as at 31.12.2008 100 11,282 86 1,672 279 1,112 0 0 2,676 1,747 41 9.,40 28,635 3,273 IFRS net worth as at 31.12.2008 565 11,283 36 1,671 83 1,077 (124) (5,118) 731 3,427 36 9,080 6,337 Adjustments from subsidiary asset analysis (565) (17,867) (315) (175) 0 (1,077) 0 (1,978) (27) (1,221) (36) (1,241) -1,201 Asset reduction already verified in Q1 2009 Values expressed in thousands of Euros 0 (5,590) 0 (342) (228) 0 0 (1,441) (569) (561) 0 0 (707) Remission of debt noted in Supplementary note as at 31.12.2008 not yet acknowledged in net worth as at 30.04.2009 2,020 Adjusted IFRS net worth as at 31.12.2008 0 (12,174) (279) 1,154 (145) 0 (124) (8,537) 2,155 1,645 0 7,839 4,429 Share of adjusted net worth 0 (12,174) (279) 1,154 (145) 0 (124) (8,535) 2,155 839 0 7,839 4,429 Adjustment of shareholding value (100) (11,282) (86) (518) (279) (1,112) 0 0 (521) (908) (41) (1,801) (16,648) 0 Adjusted value 0 0 0 1,154 0 0 0 0 2,155 839 0 7,839 11,987 3,273 173

As regards financial loans to subsidiaries, due to the current financial difficulties the entire Maflow Group is facing and in order to highlight realizable assets, all intergroup credit items are depreciated by 1,797 thousand Euros. 5.4.D Stock Total: 3,606 thousand Euros Item consists of raw materials, subsidiary materials, products in progress and semifinished products, finished products and goods, as well as advanes paid to purchase stock. It contains a depreciation fund that bears in mind the slow turnover and actual breakup value of certain products, as well as current uncertainty as to the possibilities of recovery. The adjustment fund in question amounts to 1,112 thousand Euros and relates to: Depreciation fund (Thousand of Euros) Raw and subsidiary materials, consumables 440 Products in progress and semi-finished-products 284 Finished products and goods 388 1,112 Valuation criteria Stock is valued at invoice or manufacturing cost plus any direct charges. Cost flow management is based on the weighted average criterion. Registration value is adjusted by appropriate depreciation funds for out-of-date or slow turnover products that also bear in mind current uncertainty as to the possibilities of recovery. In line with the policy of prudence applied to fixed assets, stock was not only depreciated in accordance with the ordinary group policy but also a flat rate of 20% of the net accounting value. Adjusted value: 3,606 thousand Euros 174

On the basis of the information available there is no reason to propose any adjustment to the net value entered in the balance sheet. 5.4.E Credits Total: 14,080 thousand Euros These include receivables to customers, subsidiaries and parent companies amounting to 13,101 thousand Euros, already net of 322 thousand Euros depreciation fund for third party customers. Receivables to third party customers (3,327 thousand Euros) are concentrated in the following positions (gross balances over 100 thousand Euros, as indicated in ageing list provided by the company s management): Gross amount (Thousands of Euros) FIAT 909 DELPHI 648 BMW 551 SCANIA 199 MRI 169 EATON 127 MAGGIORA 110 2,713 Age analysis resulting from management documents collected show the following overdue structure (in thousands of Euros): Of which Tot. Overdue 1-30 31-60 61-90 91-120 >121 634 127 133 22 21 331 As already mentioned depreciation calculated by company for receivables to third parties amounts to 322 thousand Euros. Receivables to subsidiaries (9,543 thousand Euros) mainly include the following 175

exposures: (Thousands of Euros) Maflow Polska Sp.zo.o 4,183 Maflow France SA 806 Man Servizi Srl 787 Codan Rubber A/S 749 6,525 Total overdue for said companies (as indicated in ageing list provided by Maflow S.p.A. s management) is as follows: Overdue (Thousands of Euros) Maflow Polska Sp.zo.o 232 Maflow France SA 560 Man Servizi Srl - Codan Rubber A/S 736 1,528 Tax credits, amounting to 639 thousand Euros, consist mainly of residual IRES tax credits from previous years, to be offset (109 thousand Euros), and VAT credits (487 thousand Euros). Tax advances, amounting to 37 thousand Euros, relate solely to IRAP tax, as following uncertainty as to future income, those relating to IRES were removed. The temporary differences that give rise to deferred tax assets relate to the stock depreciation fund, product warranty risk fund, legal dispute fund, environmental recycling fund and other more minor funds. Receivables to others, amounting to 303 thousand Euros, consist of: (Thousand of Euros) To social security Bodies 119 To employees 83 D eposits 96 Miscellaneous 5 303 176

Deposits are only credits with due date over 12 months but under 5 years. Valuation criteria They are entered at their presumed realisation value, with appropriate funds recorded to adjust nominal values according to foreseeable losses. Adjusted value: 3,843 thousand Euros As regards third party customers, not having any timely information on actual quality of specific positions, cover of fund must be guaranteed for those items more than 120 days overdue: resulting integration amounts to 9 thousand Euros. Moreover, Delphi is subject to American Chapter 11 proceedings with more than one claimant. The latest press releases available on its internet site seem to indicate that proceedings are coming to a conclusion; despite this, awaiting further developments and adopting a prudent approach, it is best to depreciate credits by 648 thousand Euros. Moreover, as for financial items, in order to highlight those assets with a real possibility of encashment, intergroup credit items will be depreciated by 9,543 thousand Euros, equal to the sum of receivables to subsidiaries. Lastly, due to the uncertainty as to the company s future prospects and resulting impossibility of assessing whether tax advances can be recovered generating future taxable income deferred tax assets will be removed from the credit value, recording a negative adjustment of the overall sum of 37 thousand Euros, equal to the advance IRAP tax still present. 5.4.F Financial standing Differences that involved assets between 31 December 2008 and 30 April 2009: 177

(Thousand of Euros 31/12/2008 28/02/2009 30/04/2009 VARIATION VARIATION NOTES 31/12/08-28/2/09 28/02/09-30/4/09 TOTAL ASSETS 53,865 54,159 54,267 294 108 Intangible fixed assets - - - Tangible fixed assets 3,783 3,658 3,685 (125) 27 (1) Financial fixed assets 31,637 31,937 31,719 300 (218) (2) Stock 3,606 3,240 2,486 (366) (754) (3) Credits 14,080 14,198 14,807 118 609 (4) Financial assets - - - Liquid assets 758 605 893 (153) 288 Accruals and deferrals 1 521 677 520 156 (5) Notes: (1) depreciation has been entered in February 2009 for fixed asssets that, lacking the necessary computer adjustments, are calculated according to pre-depreciation values (therefore in excess); no depreciation has been calculated after February, awaiting the resolution of the above-mentioned problem: therefore the increase is totally due to purchases in March and April of 2009. (2) The fluctuating trend of financial fixed assets is due to an error in February, then resolved during the following accounting period: it is down to an exchange alignment not due on dead loans amounting to 202 thousand Euros. Moreover, there is an increase of 32 thousand Euros in the majority stake of MAFLOW KK (JAPAN) that took place in the second two-month period of 2009 and relates to a capital increase and capitalisation of the related costs. (3) Stock consumption involves all existing accounting categories. (4) Due to the constant reduction in receivables to third parties, the macro item suffers from the entry of a receivable to Codan Rubber A/S (Denmark) amounting to 1,000 thousand Euros, relating to the execution of a guarantee provided by Maflow S.p.A. to the Danish subsidiary. (5)The increase in deferred assets mainly regards insurance costs sustained by Maflow 178

S.p.A. for the whole group and not yet charged to the subsidiaries; the sum of 357 thousand Euros was entered amongst deferrals (though not correct) pending allocation amongst intergroup credits. The residual increase relates to deferral on rent advanced and management costs. 5.4.G Credits with Maflow S.p.A. As regards credits with Maflow S.p.A. see appropriate list accompanying this report (Acc. Doc. 9). 179

PART SIX MAFLOW POLSKA SP.ZO.O. s ESTIMATED ASSET STATEMENT 6.1. Objectives and criteria. See same paragraph of previous chapter for definition of objectives and criteria of analysis. 6.2. Limits of analysis. See same paragraph of previous chapter for definition of limits of analysis. 6.3. Documents used. See comments made in same paragraph of previous chapter to identify documents and sources of information used. 6.4. Maflow Polska Sp.zo.o. asset items This paragraph summarises Maflow Polska Sp.zo.o. s (former Manuli Auto Polska Sp.zo.o.) estimated asset statement drawn up in thousands of Euro. Asset and Liability statement reference date is 31 December 2008 and the company s official balance sheet items (in Zloty) have been converted into Euro at the EUR/PLN exchange rate in force on 31/12/2008 published by the Bank of Italy. It is noted that the 2008 balance sheet available was drawn up according to accounting standards in force in Poland ( Accounting Act of 29 September 1994). International IAS/IFRS standards were used in those cases where no local regulations are available. Unlike that indicated for Maflow S.p.A., these annual accounts were drawn up on the assumption that the company will continue to be a going concern as there is no formal or irreversible proof to the contrary. 180

As for Maflow S.p.A., the company s assets as at 28 February and 30 April 2009 are presented at the end of the analysis so that they may be compared with those as at 31 December 2008. 181

Maflow Polska Sp.z o.o. ASSET AND LIABILITY STATEMENT 31/12/2008 ADJUSTMENTS 31/12/2008 (in Euro/000 - EUR/PLN of 31/12/2008 ) TOTALE ATTIVO 95,340 (31,883) ADJUSTED 63,457 Intangible fixed assets 300 (300) - of which: research and development costs, advertising costs 22 (22) - others 278 (278) Tangible fixed assets 30,696 30,696 Of which: land and buildings 8,976 8.976 Systems and machinery 19,567 19,567 other assets 1,873 1,873 Fixed assets in progress and advances 280 280 Financial fixed assets - - Stock 9,240 9,240 of which: raw, subsidiary materials and consumables 5,870 5,870 Products in progress and semi-finished products 600 600 Finished products and goods 2,748 2,748 advances 22 22 Receivables 38,985 (18,918) 20,067 of which: to customers 17,881 (102) 17,779 to subsidiaries 5,296 (5,296) - tax credits 2,261 2,261 tax advances 13,520 (13,520) - to others 27 27 Financial assets 12,665 (12,665) - Liquid assets 3,049 3,049 of which: bank and postal deposits 3,049 3,049 money and cash - Accruals and deferrals 405 405 182

6.4.A Intangible fixed assets Total: 300 thousand Euros They include: (Thousands of Euros) Cost Deprec. Fund Net Research and development costs 150 (128) 22 Other intangible fixed assets 1,668 (1,390) 278 (mainly SW licences) 1,818 (1,518) 300 Valuation criteria Intangible fixed assets are entered at their invoice or manufacturing cost. Depreciation is calculated at constant rates according to the following estimated useful life: - development costs (5 years); - concessions, licences and trademarks (2 years); - SW (2 years); - other intangible fixed assets (5 years). Adjusted value: 0 thousand Euros Bearing in mind the current uncertainty, it seems best to apply a very prudent approach, in line with that already adopted by Maflow S.p.A. and therefore to reduce all items analysed to zero. 6.4.B Tangible fixed assets Total: 30,696 thousand Euros These consist mainly of systems, machinery and buildings. In particular they include: 183

(Thousand of Euros) Land 373 Industrial and commercial buildings and technical structures 8,603 Systems and machinery 19,567 Other assets 1,873 Fixed assets in progress and advances 280 30,696 Net value indicated includes an overall depreciation of 15,380 thousand Euros. It is noted that during 2008 the systems and machinery category was involved in a sale and lease back operation (ex IAS 17), as a result of which the company recorded asset sales amounting to a net value of 4,371 thousand Euros (resulting in a capital loss of 12 thousand Euros) and increases of 4,359 thousand Euros. The residual debt entered as at 31 December 2008 amounts to 3,225 thousand Euros (of which 783 thousand Euros short term). Moreover, tangible assets were depreciated by 101 thousand Euros in 2008 (evidence is in profit and loss account, even if not detailed in asset movement statements). Valuation criteria They are valued at their invoice or manufacturing cost (including any appreciation) reduced by accumulated depreciation and lasting losses in value. Invoice or manufacturing cost includes all direct charges until the date the asset comes into operation, including any non deductable taxes and direct financial charges. Initial values entered are increased as a result of improvements, extraordinary maintenance and expansion that result in actual increased use. Depreciation is calculated at constant rates, as from the month the asset comes into operation. Fixed assets in progress are valued at the actual cost sustained (to purchase or manufacture) until the balance sheet date, reduced by any lasting losses in value. Adjusted value: 30,696 thousand Euros On the basis of the information available there is no reason to propose any adjustment to the net value entered in the balance sheet. 184

6.4.C Stock Total: 9,240 thousand Euros These consist mainly of raw materials (5,870 thousand Euros) and finished products (2,748 thousand Euros) and include an overall depreciation fund of 1,762 thousand Euros. During 2008 stock depreciation increased by 1,586 thousand Euros, mainly as a result of applying depreciation rules fixed by the group to the stock acquired from Codan Rubber A/S (Denmark). Valuation criteria Stock is valued at invoice or manufacturing cost within the limits of the net break-up value obtained according to market trend. Cost is determined as follows: - for raw materials and goods, at invoice cost; - for finished products, at manufacturing cost including all direct charges, as well as any reasonable estimated indirect manufacturing costs (variable and fixed),calculated according to normal production capacity. Work in progress is valued at direct cost sustained, moreover considering any reasonable estimated indirect costs. Cost flow used to value replaceable stock is weighted average cost. Moreover, any depreciation necessary to adjust stock value to net break-up value is considered. Adjusted value: 9,240 thousand Euros On the basis of the information available there is no reason to propose any adjustment to the net value entered in the balance sheet. 6.4.D Credits Total: 38,985 thousand Euros Credit item is the largest of the asset and liability statement (41%) and consists of: 185

(Thousands of Euros) Receivables to customers (net of fund of 202 thousand Euros) 17,881 Receivables to associated firms 5,296 Tax credit 2,261 Advance tax 13,520 Others 27 38,985 Receivables to third parties are concentrated in the following positions (gross balances over 50 thousand Euros, as indicated in ageing list provided by the company s management): (Thousands of Euros) FIAT AUTO POLAND S.A. (FAP) 3,090 Zexel Valeo Sverige 2,123 AUDI AG 1,754 VOLVO TRUCK CORPORATION UMEPLANT 1,017 BMW AG (OXFORD) 921 BEHR GmbH&Co.KG (Volvo) 855 VOLKSWAGEN AG 769 R.I.R. (RENAULT INDUSTRIE ROUMANIE) SRL DACIA 661 11,190 Age analysis resulting from management documents collected show the following overdue structure (in thousands of Euros): of which Tot. Overdue 1-30 31-60 61-90 91-120 >121 4,637 3,596 342 171 224 304 Overall depreciation calculated by the company amounts to 202 thousand Euros. Receivables to associated firms consist of: 186

(Thousands of Euros) Maflow Components Iberica 1,102 Maflow S.p.A. 499 Maflow do Brasil Ltda 1,038 Maflow France SA 1,164 Maflow Mexico SA de C.V. 324 Man Servizi S.r.l. 13 Maflow SA 17 Maflow Components (Delian) 280 Codan Rubber 13 Codan Rubber Ltd 456 Codan France 362 Codan Argentina 28 5,296 Tax advances are the net result of deferred tax assets (14,841 thousand Euros) and deferred tax liabilites (1,321 thousand Euros). The following are the main temporary tax differences that result in deferred tax. (Thousands of Euro) Provisions for labour costs 1,508 Tax losses for activities carried outside so-called SEZ Special Economic Zone 7,955 Negative Exchange Differences 4,352 Stock depreciation 1.954 Provision for invoices to be received 1,873 17,642 The only temporary taxable differences (generating deferred taxes) refer to profits on valuation exchange (4,351 thousand Euros). Deferred tax assets include tax exemptions on investments in Special Economic Zones (SEZ) relating to the Tychy plant (Poland), one of the three company units acknowledged on 75% of the investment sustained up until 31 December 2006, amounting to 11,340 thousand Euros. Average rate is of 19%. Valuation criteria 187

They are entered at their presumed realisation value, with appropriate funds entered to adjust their nominal values according to foreseeable losses. As regards advance taxes, the following is noted: considering company activities are carried out, in part, within Special Economic Zones (SEZ), the company benefits from a tax exemption on revenue generated from the sale of goods and services achieved as a result of investments held in these zones (up to 75%). This tax relief is recorded in the balance sheet as a deferred tax asset and also deferred revenue. The deferral is then released gradually to the profit and loss account amongst other operating revenue, according to the useful life of the assets involved, whilst the advance tax is reduced according to actual use of the exemption on taxable income. It is noted that the tax in question can only be used up until 8 August 2016. Adjusted value: 20,067 thousand Euros As regards third party customers, not having any timely information on actual quality of specific positions, cover of fund must be guaranteed for those items more than 120 days overdue: resulting integration amounts to 102 thousand Euros. Moreover, due to the current difficulties the whole Group is facing and in order to highlight those assets with a real possibility of encashment, intergroup credit items will be depreciated by 5,296 thousand Euros. Lastly, due to the uncertainty as to the company s future prospects and resulting impossibility of assessing whether tax advances can be recovered generating future taxable income deferred tax assets will be removed from the credit value, recording a negative adjustment of the overall sum of 13,520 thousand Euros. This adjustment is net of the effect of deferred tax liabilities included in the asset balance. 6.4.E Financial assets Total: 12,665 thousand Euros These include short term finance to Maflow S.p.A. The overall amount indicated includes a 4,436 thousand Euros advance on a dividend granted the holding, subsequently converted into finance as 2008 balance sheet does not present sufficient distributable profits or reserves to be distributed. 188

Valuation criteria Finance granted is valued according to nominal value of loan and does not include payments made to purchase risk capital or rights on shares. Adjusted value: 0 thousand Euros For the sake of prudence and not knowing the outcome of future proceedings involving Maflow S.p.A., it is thought best to depreciate the financial loan by 12,665 thousand Euros. 6.4.F Liquid assets Total: 3,049 thousand Euro These include bank current accounts in European currency (2,911 thousand Euros) and local currency (138 thousand Euros), of which 72 thousand Euros tied up. Valuation criteria Accounts in local currency are valued at their nominal value whereas those in foreign currency are converted according to the average exchange rate in force on the balance sheet close date as published by the Polish Central Bank. Adjusted value: 3,049 thousand Euros No adjustment is necessary due to the nature of the item in question. 6.4.G Comparing asset and liability statements To complete the analysis, the differences in assets as at 31 December 2008 and 30 April 2009 are presented.. It is noted that accounts were converted from Euro and Zloty solely at those rates in force as at 31 December 2008, as published by the Banca d Italia, so as to eliminate the effects of exchange rates. 189

(Thousands of Euros) 31/12/2008 28/02/2009 30/04/2009 VARIATION VARIATION NOTES 31/12/08-28/2/09 28/02/09-30/4/09 TOTAL ASSETS 95,340 90,228 85,579 (5,112) (4,649) Intangible fixed assets 300 300 276 (24) Tangible fixed assets 30.696 30,248 29,650 (448) (598) (1) Financial fixed assets - - - Stock 9,240 7,191 6,393 (2,049) (798) (2) Credits 38,985 37,437 33,683 (1,548) (3,754) (3) Financial assets 12,665 13,703 13,251 1,038 (452) (4) Liquid assets 3,049 963 2.017 (2,086) 1,054 Accruals and deferrals 405 386 309 (19) (77) Note: (1) Reduction in tangible fixed assets is due to normal depreciation process in absence of increases. (2) The decline in stock is linked to the reduction in production volumes and difficulty in obtaining new materials, due to the suppliers understandable reluctance. (3) Credits are falling due to various factors: reduced business volumes resulting in less invoices, some customers are paying invoices early whereas intercompany credits are on the increase following centralised decisions guided by contingent priorities. (4) The variations in financial assets are mainly due to the fluctuation in the EUR/PLN exchange rate recorded in the local balance sheet in absence of actual variations in the nominal value; this phenomenon affects a huge share of the finance to Maflow S.p.A.(8,000 thousand Euros). The additional component is the increase in capitalised interest. 6.4.H Credits with Maflow Polska Sp.z.o.o. 190

As regards credits with Maflow Sp.zo.o., see appropriate list accompanying this report (Acc. Doc. 10). PART SEVEN CONCRETE PROSPECTS OF RESTORING ECONOMIC EQUILIBRIUM 7.1. Analysis of concrete prospects of restoring economic equilibrium of entrepreneurial activities. Art. 27 of Legislative Decree No 270 of 1999. Reference regulations Legal point of view. 191

Art. 28 of Legislative Decree No 270 of 1999 states that the Court Commissioner s report must not only contain a detailed description of the causes of the insolvency, but also an assessment of the existence of those conditions set out in article 27 to be accepted for extraordinary administration proceedings. Art. 27 of Legislative Decree No 270 of 1999 ( 18 ) states that: Companies declared insolvent in accordance with 'article 3 are accepted for extraordinary administration proceedings if they have concrete prospects of restoring the economic equilibrium of entrepreneurial activities. 2. Said result must be achieved either: a) selling the company units, according to a company contribution program lasting not more than one year ("company unit sell-off program"); b) restructuring the company both from an economic and financial point of view, according to a recovery program lasting not more than two years ("reorganisation program"). b-bis) for those companies working in the essential public services sector selling groups of assets and contracts according to a company contribution program lasting not more than one year ("asset and contract sell-off program"). Therefore, to be accepted for Extraordinary Administration the company declared insolvent has to have concrete prospects of restoring the economic equilibrium of entrepreneurial activities. Due to the nature of the entrepreneurial activities carried out by Maflow S.p.A. and Maflow Sp.zo.o., the hypothesis set out in b-bis must be excluded) therefore, in the case in question, the two possible alternatives set out by the legislator to restore the company s economic equilibrium are adopting a company unit sell-off program or economic-financial reorganisation plan. These techniques are instrumental solutions, that is, intended (as defined in subsection two of Legislative Decree No 270/1999) to restore the economic equilibrium of entrepreneurial activities. Determining the economic equilibrium of entrepreneurial activities. ( 18 ) Recorded in text, formulation in force and therefore outcome of amendments introduced by Legislative Decree No 134 of 28 August 2008 and relative conversion Law No 166 of 27 October 2008. 192

This analysis firstly considers whether, in accordance with subsection one of Legislative Decree No 270/1999, the company declared insolvent has concrete prospects of restoring the economic equilibrium of entrepreneurial activities and then defines the most suitable program to achieve the desired result. Therefore, concrete prospects of restoring economic equilibrium must not only refer to companies declared insolvent, but also entrepreneurial activities. From a textual point of view, said clarification needs highlighting as it does not focus the analysis on the position of the insolvent entrepreneur (subjective perspective) but attributes importance to the entrepreneurial activities and production assets (objective perspective) ( 19 ). In reality, the rationale behind the regulations in question is clearly indicated in art. 1 of Legislative Decree No 270/1999, that in defining the nature and objectives of Extraordinary Administration states that: Extraordinary administration is a procedure with more than one claimant for failing large-scale enterprises that aims to maintain the production assets of a company by pursuing, reactivating or reconverting entrepreneurial activities. Therefore, the legislator s main objective is that of continuing entrepreneurial activities, safeguarding production efficiency and maintaining employment ( 20 ). In accordance with this, art. 27 of Legislative Decree No 270/1999 provides as criterion for assessing whether a company should be accepted for extraordinary administration - concrete prospects of restoring the economic equilibrium of entrepreneurial activities, not considering ( 19 ) On the subject, compare Court of Palermo, 24 May 2001 (that declares K&M Industrie Metalmeccaniche S.p.A. insolvent); and Court of Torre Annunziata, 14 November 2001 (that accepts Ilva Pali Dalmine S.p.A. for extraordinary administration procedure) where bankruptcy law provides a merely liquidatory function [...],in which bodies must do their best to collect assets and distribute them to creditors, without any consideration as to the fate of the company that, in protecting entrepreneurs unable to fulfil their commitments, are expelled from the market. On the subject cp. RAGUSA MAGGIORE in jurisprudence, Notes on extraordinary administration regulations, in Bankruptcy law, 1999, I, p. 655; ALESSI, Extraordinary administration of failing enterprises, Milan, 2000, p. 11 and amendments. ( 20 ) The most authoritative jurisprudence is steered in this sense:cp. OPPO, Rights and interests in new regulations governing the insolvency of large-scale enterprises, in Rivista di Diritto Civile, 2000, p. 519 ff. that notes that the purpose announced in art. 1 of the Decree disregards creditors, concrete prospects of recovery regard the economic equilibrium of activities not (directly) satisfaction of creditors,...creditor interests only appear in program that must be prepared by extraordinary commissioner under the Ministry s surveillance in accordance with industrial policies it has adopted to safeguard the operating unit but also bearing in mind creditor interests : a flexible formula (already present in the Prodi law) that does not seem to place as much importance on these interests as the industrial policies and safeguarding the operating unit. Once again cp. SCHIAVON, Insolvency in extraordinary administration, in II Fallimento, 2000, p. 946; APICE, Crisis procedure in new model with more than one claimant, in AA.VV., Crisi, insolvenza, reversibilità, temporanea difficoltà, risanamento: un nodo irrisolto, in Il Fallimento, 2000, p. 51. 193

(in the preliminary judgement) the interests of creditors, in terms of time and extent to which their rights are met. Therefore, the analysis must focus on entrepreneurial activities, to assess whether in the time set out in the Decree there are concrete prospects of restoring the economic equilibrium; in this connection, it should be noted that entrepreneurial activities do not have past debts, by definition, but result in costs and revenue. Debit and credit items, so called operating items, may result from these costs and revenue as a result of the time between the cost arising and the actual moment it is sustained (paying supplier) or between the revenue arising and the actual moment it is collected (payment from customer). In the same way, the need for stock arises as a result of entrepreneurial activities, representing a suspension of operating costs resulting from purchasing more production factors than the actual turnover (revenue) achieved during the year. Therefore, the analysis as to the possibilities of restoring the economic equilibrium must focus on costs to purchase production factors, corresponding revenue from sales and effect on cash flow, resulting from the aforementioned time difference in order to meet obligations taken on ( 21 ). On this point, reference should be made to the Report on Legislative Decree No 270 of 1999 clarifying how the judgement on restoring economic equilibrium is based on verifying the actual possibility of restoring a non-debit cost revenue ratio. The above is supported by the persuasive tone of Legislative Decree No 270 of 1999 that does not aim mainly to restore the entrepreneur s solvency but to reposition entrepreneurial activities on the market by restoring a physiological cost revenue ratio ( 22 ). The subjective element of the entrepreneur s insolvency is, at least in the preliminary phase, irrelevan as regards an opinion on the concrete prospects of restoring the economic equilibrium of entrepreneurial activities, that lies in analysing production dynamics, that is the operating costs and revenue involved, disregarding times and extent to which creditor interests are met. ( 21 ) By economic equilibrium we mean a situation where there are no losses, costs and revenue balance and there is sufficient cash flow to fulfil the obligations taken on, cp. Court of Pavia, 25 July 2002, in II Fallimento, 2003, p. 448. ( 22 ) Court of Torre Annunziata, 14 November 2001, in Commercial Jurisprudence, 2002, II, p. 485. 194

In light of this, art. 27 of Legislative Decree No 270 of 1999 does not require that the concrete prospects of the company s financial equilibrium be verified but existence of concrete prospects of restoring the economic equilibrium of entrepreneurial activities. Therefore, the only obligations that must be considered in the analysis are those linked to the ordinary operating dynamics of future production and, that is, production related costs, that, - to guarantee economic equilibrium must be less (or at the most the same as) than the corresponding revenue. At the same time, more recent jurisprudence ( 23 ) should be borne in mind that, on systematic interpretation and in light of that set out in arts. 27 and 63 of Legislative Decree No 270/1999, highlights how recovery is necessary for selling off the business and how the latter constitutes, in turn, a way of restoring the economic and financial equilibrium. According to this approach - that clearly exploits that set out in art. 27, subsection 2 letter a) ( 24 ) - the subject of the judgement the Court is called to express when choosing between preventive or bankruptcy proceedings should be transferability of the company units ( 25 ). All important, in this sense, is that set out in the first two subsections of art. 63 of Legislative Decree 270/1999, in accordance with which, for companies and businesses that are going concerns: - valuation must bear in mind profitability, even if negative, at the time of the valuation and in the following two years ; - the buyer must undertake to pursue entrepreneurial activities for at least two years and maintain the same employment levels agreed on at the time of sale for the same period. In fact, the positive aspect is that the legislator clearly wishes to maintain the production unit even in those cases where creditors may prefer to wind up the company. In reality, imposing the buyer pursue entrepreneurial activities for two years shows the legislator wishes to facilitate the company sell-off in the knowledge that, on the transfer date, ( 23 ) cp. MAFFEI ALBERTI, Brief commentary on bankruptcy law, Padua, 2000, 1079 and lastly BORTOLIN, Opening extraordinary administration proceedings: basic requiremets, in AA.VV. Extraordinary administration of failing large-scale enterprises after D.L. No 169 of 12.9.2007, by Concetto Costa, Turin, 2008, p. 181. ( 24 ) According to whom restoring economic equilibrium of entrepreneurial activities must be achieved selling off company units according to a company continuation program lasting not more than one year. ( 25 ) Cp. BORTOLIN, Opening extraordinary administration proceedings: basic requiremets, in AA.VV. Extraordinary administration of failing large-scale enterprises after D.L. No 169 of 12.9.2007, by Concetto Costa, Turin, 2008, p. 181. 195

the production unit may not be economically sound and could even produce losses in the following two years. Further confirmation of the above is that set out in subsection three of art. 63 of Legislative Decree 270/1999, in light of which the buyer s decision not only bears in mind the amount of the price offered but also the bidder s reliability and plan to continue entrepreneurial activities, even as regards maintaining employment levels. There are numerous indications in the text that place equal importance on the concepts of possible recovery and transferability. Having said this, it should be noted that it would be illogical to consider the aforementioned equivalence as a waiver of art. 27 of Legislative Decree 270/1999 that would automatically result in extraordinary administration proceedings ( 26 ). In fact, considering that set out in art. 27 of Legislative Decree 270/1999 as an economic parameter would mean making sure company has sufficient potential for a hypothetical buyer and introducing company units into a new structure would be advantageous in terms of profitability ( 27 ). Economic equilibrium indicator analysis. This section will analyse the economic projections prepared by Maflow S.p.A. s management. In particular, it will focus on the Maflow Group s economic growth in 2009 and an economic simulation of 2010-2011. 2008-2011 accounts were reclassified to highlight the growth, over the next three years, of the most significant economic margins to assess how those strategies defined by the management impact on the figures and verify the Group s economic equilibrium. The profit and loss account layout used to analyse the economic situation produced together with the management will be discussed in greater detail later. ( 26 ) Cp. BORTOLIN, Opening extraordinary administration proceedings: basic requiremets, in AA.VV. Extraordinary administration of failing large-scale enterprises after D.L. No 169 of 12.9.2007, by Concetto Costa, Turin, 2008, p. 197. ( 27 )Cp. BORTOLIN, Opening extraordinary administration proceedings: basic requiremets, in AA.VV. Extraordinary administration of failing large-scale enterprises after D.L. No 169 of 12.9.2007, by Concetto Costa, Turin, 2008, p. 198.. 196

The first aggregate defined in the profit and loss account is that of net revenue, obtained from the sum of sales revenue and other revenue. Said aggregate shows the actual turnover achieved by the body in question and therefore highlights the sales resulting from actual production activities, those carried out in accordance with the typical purchasing transformation sale cycle of all industrial production realities. The second aggregate defined in the management reclassification used to analyse the economic simulation (as well as first important profit and loss account margin) is the direct contribution margin: this margin is obtained subtracting consumption of those raw materials used in the production process, direct labour costs and subcontractor costs from net revenue. Consumption is quantified adding the invoice cost of raw materials to variations in stock. Therefore, the direct contribution margin/net revenue ratio identifies the actual margin the reality in question is able to obtain in the sale of finished products compared to the variable direct costs sustained. An increase in the direct contribution margin/turnover ratio means the body in question has increased its finished product sales price or reduced its variable direct costs, thus increasing the margin. Subtracting the other variable (indirect) costs, identified in the case in question in shipment costs, production utilities, consumables and other variable costs, from the direct contribution margin you obtain the net contribution margin: therefore, this aggregate, obtained from the difference between sales revenue and variable costs must be sufficient to cover all fixed costs to enable the Company (or Group) to close the profit and loss account with a positive result. In analysing the Maflow Group economic simulation fixed costs are divided between system related fixed costs or those linked to individual companies of the Group (system fixed costs) and headquarter related fixed costs (corporate fixed costs): fixed costs include indirect labour costs and general expenses (consultancies, maintenance, lesing), distinguishing between those attributable to individual companies or group system or central structures. The difference between the net contribution margin and aforementioned fixed costs is defined as Gross Operating Margin (MOL or, Anglo-Saxon term EBITDA). The EBITDA is very significant as it can almost be considered as operating cash flow (if all operating revenue and costs were collected and paid and there were no variations in stock, the cash flow generated by the operating management would be the gross operating margin) and represents a company s ability to generate a theoretical income cash flow (selffinancing). 197

In light of the above, judgements as to whether a company is accepted for Extraordinary Administration proceedings in accordance with Legislative Decree No 270 of 1999 and verifying the existence of concrete prospects of restoring the economic equilibrium will be made using the EBITDA as best indication of whether a company or Group is able to operate in economic equilibrium. Subject of the analysis. Once economic equilibrium has been defined as perspective balance between operating costs and revenue neglecting, at least for the moment, the debit element and resulting financial charges entered in the profit and loss account the perimeter in which activities to verify the existence of those requirements necessary to restore economic equilibrium must be identified. From a formal point of view, it is well-known that the Court of Milan declared Maflow S.p.A. and Maflow Polska Sp.zo.o. insolvent with two different sentences No 260/09 and No 261/09 of 11 May 2009. However, in assessing whether there are concrete prospects of restoring the economic equilibrium limiting the analysis to the petitioners would appear inadequate. In fact, it should be noted that Maflow S.p.A. is a sub-holding ( 28 ) of Maflow Group, at the top of a pyramid structure already described in detail in the previous chapters, that holds direct and indirect majority stakes. This structure is fruit of the Group development process, creating both production and commercial subsidiaries, to bring distribution closer to end customers, in order to constantly monitor them. Moreover, this structure has enabled significant savings to be made both interms of rationalising production costs thanks progressive delocation of production activities in other countries (amongst which, in particular Poland), as confirmed by the Boston Consulting Group analysis ( 29 ) that estimates around 60% of production capacity has been transferred to Low Labor Cost areas. As a result, the Italian body has become, over time, mainly a Services Company for the Group. In fact, MAflow S.p.A. states in its application to declare the company insolvent that, ( 28 ) Maflow S.p.A. is in fact controlled by Maflow S.A. Spolka Akcynjna. ( 29 ) Source: Maflow Business Plan 2009-2011 - Synthesis of main outcomes, Boston Consulting Group, 9 December 2008). 198

they are managed directly by staff in the Trezzano sul Naviglio offices that act as headquarters to the Maflow Group and/or said staff directly supervises al lstrategic, monitoring and auditing activities relating to: - company organisation and development; - financial structure (including negotiations with the banks for finance and credit); - acquiring/allocating fundamental assets (designing and engineering and industrialising production processes); - selecting and managing customers (negotiating prices/product specifications); - selecting and managing suppliers (negotiating prices and terms of delivery); - appointing corporate bodies in every company of the Maflow Group; - managing human resources at a mid and top management level for each of the companies controlled by Maflow and managing any related disputes; - negotiating with unions on local individual contracts; - defining group busgets; - defining production processes and guidelines; - coordinating production activity related statistics; - reporting and financial activities; - periodic auditing; - treasury management. Moreover, all Maflow Group Research Development activities are concentrated in Italy, where new industrial applications/designsand procedures. Moreover, there is a warehouse at the Trezzano sul Naviglio plant where quality controls and testing are carried out for all products manufactured by the Maflow Group. Industrial patents rights are also managed from Italy, as well as all Group commercial offers, customer relations (existing and new) and negotiations and final agreements. The following are also managed from Italy: - Group complaints and disputes; - purchasing department of medium or great importance; - intercompany rules for all transfer operations; - decision on investments; - industrial plans over 3 years (and budget forecasts), strategic decisions (such as, for example, development in China, Mexico, Korea and Japan); 199

- social security and life and damages insurance policies. In short, all management functions and that is, all Maflow Group line and staff activities are concentrated in Trezzano sul Naviglio plants of Maflow S.p.A. that not only carries out unit management functions but also provides subsidiaries (that would not be able to carry out the relative activities independently) with the main administrative services. Therefore, analysing only Maflow S.p.A. that, as part of the Group, incurs a series of operating costs to the benefit of its subsidiaries, would be meaningless. Therefore, verifying the existence of concrete prospects of restoring the economic equilibrium, must not only bear in mind Maflow S.p.A. but also all its subsidiaries (so-called consolidated perimeter ). This is also confirmed in the petition filed by Mafow S.p.A., that states: moreover, this petition is filed as the same time as a similar petition filed by another company of the Group and, precisely Maflow Polska Sp.zo.o. [omissis]due to the profound, numerous and unquestionable ties that link our companies at a management, financial and accounting level etc.. [omissis] and company unity. Maflow Polska Sp.zo.o. activities have various points of contact with those of Maflow, with which it has synergistic and symbiotic relationships, thus rendering the two realities closely interlinked. Indeed, Maflow is almost the sole supplier of the highly technological components Maflow Poland machines and assembles for major European Clients (amongst which FIAT); Maflow also sees to research and development, prototyping, industrial coordination and laboratory testing activities for Maflow Poland, seeing also to customer acquisition and management activities. Maflow Polska Sp.zo.o. is probablythe main production outlet for Italian plants and beneficiary of Maflow services/ In practice, the two companies constitute a sole production unit. The same can be said for the other companies of the Maflow Group (amongst which, in particular, as regards those that are part of the European Community, Man Servizi S.r.1., Maflow France S.A., Maflow Components Iberica S.L.U., Codan Rubber Ltd. and Codan Rubber A/S), that, at an entrepreneurial level, are closely linked and dependant on Maflow S.p.A. (as a sole production unit) and have, in turn, objective links with Maflow (links even in this case of a management and operating, as well as financial, economic nature, etc..). 200

In fact, on this subject it was impossible, in illustrating Maflow s characteristics and the reasons for the crisis, to provide a description that was not based" and "structured" on the Maflow Group as a whole. In light of the above, the analysis to verify the existence of those requirements set out in the regulations must be based on the consolidated perimeter that, in Italy mainly supports Group structural costs and in Poland production, manufacturing supplies not only for third party customers but also other companies of the Group ( 30 ). Maflow S.p.A. and Maflow Polska Sp.zo.o. are, at an entrepreneurial level, essential links of the same chain, as Maflow S.p.A. both supplies highly technological components that Maflow Polska machines and assembles for distribution to end customers. And provides technology, product development, prototyping, coordination, industrialisation and laboratory testing, that is those services necessary to approve end products that leave the Maflow Polska plants, and business relationship management. Therefore, the resulting audits will be based on the Group as a whole omitting the interests of the various company structures. 7.2. Prospects. The reference market. The Maflow Group s core business is mainly focused on designing, manufacturing and selling components and equipment for any type of motor vehicle, including therein industrial vehicles and, in particular, components for the car industry (automotive sector), occupying an important position on the world market. In particular the Maflow Group (that reports to Maflow S.p.A.) develops, manufactures and markets (towards third parties and within the Group) reinforced rubber hoses and pipes in compound materials for motor vehicles. Moreover, it machines and manufactures metal parts and rubber, aluminium or steel assemblies for other applications in the automotive sector, such as power steering systems, air conditioning systems, fuel and water pipes etc.. It is heavily involved in the entire production chain, from development to planning (together with vehicle manufacturers) to compound processing, production and assembly. ( 30 ) This is also shown by Maflow Polska Sp.zo.o. s turnover per geographical area that highlights national market as of secondary importance compared to foreign market. 201

The Maflow Group is a leader in the motor vehicle and heavy vehicle air-conditioning rubber hose and compound piping segment with a 28% market share in Europe and 11% in the world in 2008, supplying, mainly as tier 1 direct and strategic supplier, OEM (Original Equipment Manifacturer) customers. As regards the OEM reference market, the following is that published by an authoritative external source (European Securities Network LLP) as regards the prospects of the automotive sector in 2009. European Securities Network LLP, analysis of automotive sector prospects for 2009. Whilst 2008 proved to be a very difficult year for the car industry, 2009 could prove a disaster for many companies of the sector. In particular we could be facing the worst year ever in the history of the automotive sector. This decline could be even faster than in 2008 with a certain pressure on financial services. This will probably result in component suppliers suffering huge losses and in many cases having toproceed with capita increases. The main market hit by the financial crisis ws that of the United States where vehicle sales fell by 18% in 2008 (13.2 million cars). Europe, that initially had not suffered repercussions during the year, initiated this negative trend later on. In fact, the European market has fallen more slowly and, that is, by 7.8% (14.7 million vehicles). Whereas, the developing markets overall have recorded some growth in 2008. China saw sales rise by 7.3% (6.8 million vehicles) and Brazil by 10% (2.4 million vehicles). However, even these markets started to slow down towards the end of the year and now even they are recording negative figures. The situation could be really dramatic in 2009. The industry is already under pressure due to the credit crunch, limiting access to all those subjects involved: manufacturers, suppliers and potential buyers. They are not only facing difficulties in accessing credit but also the rising cost. Bearing in mind the latest sales data and persistent crisis we believe the worst is yet to come especially in the first half of the year. Overall, sales in the car sector are expected to fall by around 15%, all major markets recording double figure declines. 202

The American market may prove to be one of the worst hit, falling by an estimated 22%, followed by the European market (-18%) and developing markets (-11%). Financial service based business models will be particularly under pressure. Although the car sector is not directly exposed to the risks resulting from the subprime crisis, those linked to bank bonds and other toxic securities, companies working in the automotive sector are not immune to the problems of the banking sector. In fact, the automotive sector is suffering from the increased refinancing risk and and generally high level of debts. Moreover, the following should be considered as additional risks: 1) Depreciation: the reduction in prices has put pressure on certain car manufacturers to depreciate their portfolio of leased cars. BMW, the most aggressive on residual values has forecast a total depreciation of around 1 billion Euros for the risk that is expected to rise in the short term. Daimler has forecast a total of 0.5 billion for leasing related risks. 2) Increased level of debt: the American financial crisis and resulting slow down in the economy may result in a significant increase in the percentage of credit depreciation due to loans. It is expected that the increased risk may result in higher finance costs when purchasing a car. The cost is expected to rise by up to 100 base points that, in Europe, would mean a 140 base point increase in the finance offered when purchasing new cars. 3) Finance risk: The finance companies of car manufacturers are facing significant refinancing risks in the current climate. OEM companies and car manufacturers are more at risk of bankruptcy if faced with increased financial costs rather than the lack of cash flow. In fact, the latter is partially resolved by funds made available by governments. An example of increased financial costs is that of Daimler that recently issued 1 billion Euros of bonds with January 2012 due date and a return of 600 base points over the mid-swap. In August 2008 Daimler paid a spread of only 110 based points over the mid-swap for 1.5 billion worth of bonds issued. In general it is expected that financial management generated profits will fall significantly.this is combined with the fact that many OEMs will consider the need for transferring resources from industries to their financial subsidiaries in order to restore a balance between own capita and debt. Therefore, the majority of OEMs and suppliers will probably close the year with a loss. There are already a few indications as to the 2008 profits falling drastically for those companies with high fixed costs. The reorganisation programs defined in the past could not predict such a drastic decline in the car market, many companies not being able to sustain 203

the losses. This is combined with the fact that the cost-cutting policies already adopted in the past leave very little space for further cuts. Generally, EBIT forecasts have been cut on average by 80%. Profits are expected to fall by 65% on 2008. In fact, capital increases may be necessary. The crisis is not only expeted to have a negative impact on profits but also on cash flows. Not only reduced profits but also the need to maintain a certain level of investment and capitalisation of research and development costs will result in an inability to generate cash flows. Moreover, it is also important to consider that, following the unexpected decline in sales, circulating capital may increase significantly. In fact increased stocks could increase said value as production is generally cut when stocks have increased significantly. OEMs will not be able to benefit from supplier support. Their financial situation is already very difficult. OEMs will soon be asked to pay invoices in order prevent strategic suppliers from going bankrupt. All European OEMs have absorbed cash in quarter four of 2008. Moreover, the depth of the crisis is evident from the numerous examples available. Fiat has increased its net borrowing by 2.7 billion Euros instead of the expected reduction of 1.3-1.8 billion Euros: a 4.0-4.5 billion. Even the rest of the European OEMs have reported difficulties due to cash absorption. There are many situations where capital increases will be necessary. As refinancing rates increase so will capital consumption for those companies that are highly indebted. The last element that is very worrying is the low price of shares that could have a negative impact on finding new investors ( 31 ). Analysing the concrete prospects of restoring the economic equilibrium of entrepreneurial activities. The analysis of Maflow S.p.A. s and Maflow Polska Sp.zo.o. s concrete prospects of restoring the economic equilibrium as well as that of the Group as a whole is necessarily based on internal Group forecasts and, in particular, those put together by top management. ( 31 ) Sorce: European Securities Network LLP (ESN), European Automobiles & Parts, 10 marzo 2009. 204

On the basis of these comments and in order to facilitate a detailed analysis of the Group s concrete prospects a restoring the economic equilibrium priority was given to those economic frowth forecasts prepared by the Group, that were then critically analysed according to numerous external valuation criteria. Therefore, all internal documents relating to the 2009 forecasts prepared by the management were analysed in order to understand the concrete prospects of restoring that economic equilibrium the Group has lost. In particular, reference documents include: - summary 2009 forecasts (without details) containing forecast profit and loss accounts and asset and liability statements, called Maflow Group: Forecast 2009 and revised on 22 May 2009, contained in the file Cash flow 2009_opening april.xls ; - 2009 economic forecasts with details for each plant, called 2009 NEW P&L CONSO (MID SCENARIO), contained in the file Bozza piano LF_work_DEFINITIVO TO KEEP_sent.xls ; - sales forecast for 2009-2010-2011-2012, drawn up by Maflow S.p.A. s sales structure, contained in Sales Forecast May 19_revised ; - simulation of expected benefits of production efficiency initiatives, some already initiated and others to be assessed contained in the document Actions-2009-05-28- commissari.xls ; - simulation of expected benefits in terms of reducing staffing costs resulting from Extraordinary Redundancy Funds, contained in the file Analisi CIG-Mobilità.xls ; - Group Cost by Plant document April 2009; - letter dated 28 May 2009 sent to BMW requesting that discussion of JAVA 2009, price reduction 2009, and the previous proposal transmitted and estimated discounts granted BMW, contained in Analisi BP Trezzano Discount Effect Sent.xls file be postponed; - Maflow Business Plan 2009-2011 - Synthesis of main outcomes, Boston Consulting Group, 9 December 2008 205

Having no precise plan for Maflow S.p.A. and Maflow Polska Sp.zo.o., a numeric simulation was drawn up on the basis of the above mentioned documents with the management aimed at outlining the growth forecasts for 2009-2010-2011. In this connection, it is noted that said simulation includes interventions that could increase revenue and reduce costs, that, according to the management, are essential to restore the economic equilibrium including: as for 2009, revising the economic forecasts prepared by the management in 2009 NEW P&L CONSO (MID SCENARIO), introducing the benefits of the action taken by the management to reduce inefficiencies and staffing excesses (socalled redundancies); as regards 2010-2011 forecasts, lacking other resources of information the following were used: o to estimate revenue from sales: sales forecasts for 2009-2010-2011-2012 drawn up by Maflow S.p.A. s sales structure; o as regards production cost structure, it was estimated maintaining the incidence of cost items constant; o in estimating production costs, benefits of action taken by management to reduce inefficiencies and excess staff (so-called redundancies) were introduced; o lastly expected benefits in terms of reducing labour costs resulting from use of Extraordinary Redundancy Fund ( 32 ) for the Trezzano sul Naviglio production structure and zero hours for an additional 100 people were assessed. The economic simulation prepared as described above identifies the trends for each Group system, so that that of the Italian and Polish companies and entire Group can be deduced. As already mentioned the Maflow Group production cycle is based on a great deal of interaction between the various systems, to such an extent that, for example, the rubber hoses the Ascoli Piceno plant supplies, both vulcanised and green", to the other companies of the Maflow Group are preformed in the Polish Chelmeck plant, in the case of vulcanised hoses, or assembled with other steel or aluminium components in the Trezzano sul Naviglio plants ( 32 ) It is noted that the Company, on filing the insolvency declaration, had already made use of the Ordinary Redundancy Fund at zero hours for 2 weeks a month that expires on 24 July 2009. 206

as well as that in Brazil; similarly, the fittings from Maflow Poland are assembled in the French, Spanish plants etc. ( 33 ). Therefore, individual trends are not of great significance for the Group as a whole, as all closely interlinked. In fact, due to the close ties on a production level between Maflow S.p.A. and its subsidiaries (and, in particular, between Maflow S.p.A. and Maflow Polska Sp.zo.o.) this analysis will focus on the Maflow Group as a whole. It is felt that despite the subjective autonomy of the individual companies making up the group and notwithstanding, as regards Maflow S.p.A. and Maflow Polska Sp.zo.o., their separate financial and cash flows the Group s consolidated perimeter should be analysed to truely understand the current situation and future prospects of recovery. The evolution of the Maflow group The following prospectus summarises the evolution of the consolidated data (net of the infragroup accounts) of the whole Maflow group, made up of other companies in the group in addition to the Italian and Polish companies. Firstly, it should be recalled that the economic simulations presented below are worked on the consolidation of the 19 facilities of the Maflow group, 8 of which are in Europe (Italy, Poland, France, Spain, UK and Denmark), 4 in Latin America (Brazil, Argentina and Mexico) and 5 in Asia (China, and the rest in Thailand, South Korea and Malaysia). As for the 7 technical and commercial offices (The Netherlands, Denmark, the USA, Korea, Japan, Germany and Sweden), they also refer to the area indicated above. ( 33 ) Fonte: Ricorso per la dichiarazione di insolvenza ex artt. 3 e 5 D.Lgs. 270/1999 presentato da Maflow S.p.A. in data 10 aprile 2009. 207

Data in '000 2008 2009 2010 2011 Net profits 259,009 194.218 224.360 245.941 % annual variation -25,02% 15,52% 9,62% Contribution Margin 58.054 50.437 59.729 65.475 % of net profits 22,41% 25,97% 26,62% 26,62% Start-up EBITDA 9.110 12.953 24.745 30.490 % of net profits 3,52% 6,67% 11,03% 12,40% EBITDA - 11.387-6.817 5.696 11.505 % of net profits -4,40% -3,51% 2,54% 4,68% Non-recurring post EBITDA costs - 11.387-8.255 5.651 11.505-4,40% -4,25% 2,52% 4,68% NB: as far as the final balance sheet 2008 is concerned, the prospectus shown above has been created on the basis of the management data supplied by the company; consequently, the numerical results shown in the preceding chapters could be different with respect to the table above because of a different reclassification. The contribution of the Polish company to the income results is considerable. As can be seen from the final management prospectuses for 2008 and as indicated in the 2009 projection, which breaks down the results from each facility, the third party profits of Maflow Polska Sp.zo.o. make up about half the overall turnover of the group and also at a profit level, the initial EBITDA of the Polish company in the first year of forecasts was 17.9% of the turnover, compared to a group profit margin of 6.7%. The management also believe that the Polish company can continue to represent a considerable part of the income and the upturn of the whole group in the near future. The weight of the costs for the central structure of about Euro 20.5 million in the historic accounts 2008 is evidently sufficient to determine a loss at an overall EBITDA level. Nevertheless, according to the management forecasts, the action already taken and still to be implemented, but already definite, for the reduction of these costs will allow a return to profit from the forecast balance sheet 2010, also due to the growth in turnover, the improvement in the contribution margin and the above-mentioned savings expected on fixed costs. Theories at the basis of the group simulation Since the check on the existence of the requirement of real prospects of recovery in the economic balance is necessarily based on group forecasts, it is considered opportune to indicate what the main assumptions are at the basis of the economic simulations needing in- 208

depth analysis because of their appearance. In particular, it should be noted that the projection made by Maflow S.p.A. is strongly centred on the following assumptions: Turnover: on the basis of what was learnt from the interview with the management, turnover was determined on the basis of the orders already agreed by the company and group with customers, including Fiat, Volkswagen, Audi, BMW, General Motors, Chrysler and Mitsubishi. The estimates examined for the three years from 2009-2011 are based on the forecasts given to use by company management ( Sales Forecast May 19_revised ) defined on the basis of the indications, as they stated, they had in May 2009. As a result, Maflow S.p.A. developed the economic projection shown above and analysed in the following pages. In the light of these considerations, the forecasts of awards and the resulting supply volumes may not be completely reliable and may need correction during the accounting period, even if the forecasts were made and sent by the company in May 2009 and already incorporate the trend and sales forecasts recorded early in 2009 and the orders acquired for the immediately following months. However, it s appropriate to note that, during the meetings, the Maflow S.p.A. management stated that the forecast turnover, particularly for 2010 and 2011, could be subject to considerable variations based on the evolution of the situation in the group. If stable supply is not guaranteed in the near future, many customers are ready to interrupt collaboration with the Maflow group, although this option would result in additional costs, causing a considerable reduction in sales prospects. Consumption of raw materials: this cost entry, closely correlated to the determination of the profits, has shown a more-or-less constant trend at group level in the period of analysis. As a result, company management did not forecast a significant recovery in profit percentage throughout the accounting periods examined. On the other hand, an improvement from 2009 with respect to the last final year figure (2008), prepared using the same method as that used by the company for the preparation of the forecast management data. The theories used for determining the consumption of raw materials in 2009 are based on the final results for the first four months of the year (January-April) and the average percentage incidence forecast by management for each facility for the remaining months of the year. These theories were based on the incidence obtained in the early months of the year and the presumed trends for the other months. The percentages forecast by management for the 209

accounting periods 2010 and 2011 were kept constant on an annual basis using the figures for the period from May to December 2009. In all the accounting periods forecast, the percentage profit remains around 52%, an improvement with respect to the 53.1% recorded in 2008. Staff: In the specific facility costs, the entry for staff is separated into direct and indirect work. For the former category, this has shown a constant trend in percentage compared to turnover in the accounting periods analysed, and is expected to reach a percentage of 14.61% in 2009, subsequently stabilising at 14% in the following years, a reduction in comparison with the 15.5% of 2008. This reduction from the first year of forecasts is, according to the management, the result of the effect of the reduction in staff made from the end of 2008. The first effects were already seen from the early months of 2009 and will have greater emphasis from May to December. The theories used to determine the cost of direct employment in 2009 is, therefore, based on the final results of the first four months of the year (January-April) and the average percentage incidence forecast by the management for each facility for the remaining months of the year in the light of the reduction of the labour force already planned and the lesser resort to overtime. At an absolute level, a decrease in direct work should be noted, however, going from about Euro 40 million in 2008 to Euro 28.4 million in 2009. As far as indirect staff are concerned, the management expects a decrease compared to 2008 in the first year of forecasts, passing from a value close to Euro 25.1 million to that of about Euro 21.9 million. This reduction has also been discussed by the company management, like the result of the decrease in the labour force planned for the end of 2008 and implemented early in 2009. In confirmation of this, we can note that, at a consolidated level, the average monthly cost for the first four months of 2009 (about Euro 1,780,000) was lower than the forecast monthly cost for the whole of 2009 (about Euro 1,842,000). The management has forecast an increase in the subsequent accounting periods of 1.0% for 2010, substantially unchanged in 2011 and, as a result, a decrease in the incidence in percentage terms in relation to the greater increase in turnover. In addition to the action already undertaken, the management has also identified a series of additional ones to further reduce the cost of staff, both direct and indirect( 34 ), at a specific ( 34 ) In the previously discussed prospectus concerning the profitability data for 2008-2011, the effect of reductions in staff only reduces the cost of indirect staff, so that the effect of profit margin is seen at a facility EBITDA level and not at a contribution margin level. 210

facility level. The effect of these reductions, whose greatest impact is expected in 2010 and 2011 in the Italian company and, in particular, the facility at Trezzano, will be a decrease in the overall cost of staff of about Euro 438,000 in 2009 and about Euro 3.6 million in 2010-2011 (NdT: l originale dice 2001). Transport: this entry is the cost borne directly by the company for the despatch of products to its customers. The management expects this cost to decrease from 2009 reaching a percentage of 1.49% of turnover compared to 1.78% in 2008. According to the management, this trend should be easy to implement with a return to effective programming of production, thus avoiding resort to exceptional transport (land or air) at its own cost, and thus more expensive than conventional transport, to take products to their destination. To demonstrate this relationship, the management brought our attention to the fact that, in April, this had a value at consolidated level of Euro 507,000 while in normal conditions, it should be around Euro 150,000. In the light of this, the attainment of the efficiencies in transport theorised by the management appears uncertain, given that planning is still centred on the very short term. Fixed corporate costs: non-specific initial fixed costs relate to the services provided at a central level, mainly concerning performance of the work on strategic direction, monitoring and control, as indicated in detail above in the report relating, for example, to business development, company organisation and development, management of human resources, management of company finances and research and development. The cost of carrying out these services, mainly consisting of staff costs, as shown in the documents supplied by the company ( Group Cost by Plant April 2009), is then broken down for each group facility to determine their profitability. The breakdown method used by company management is substantially in line with market conditions, taking account of the OECD guidelines on transfer pricing. In the 2009 projection, the management expects to keep this cost entry unaltered, although it has defined and identified the action that should allow savings of Euro 369,000 in 2009, Euro 1,091,000 in 2010 and Euro 1,155,000 in 2011 (and subsequent accounting periods). Evolution of Group Turnover According to the management, the evolution of turnover in the years of economic simulation was defined by hypothesising a limitation on production aimed at satisfying current 211

contractual commitments and the orders awarded with group customers (maintenance of the percentages of assignment of current models at today s date). As a result, group management made a new economic projection at closure in May 2009 ( 2009 NEW P&L CONSO (MID SCENARIO ) which, from what has been said, embraces the most conservative forecast in terms of turnover which can be hypothesised if the company is admitted to extraordinary administration and highlights the recovery course undertaken on a wide scale with regard to automotive sector operators. As a result of the above considerations, a significant drop in turnover has been estimated for the Maflow group in the forecast accounting period 2009 compared to the final balance 2008, also to take account of the deep depression which has involved the automotive market from the last quarter 2008. According to an authoritative external source( 35 ), it is expected that this may have an extremely negative effect on the automotive sector in 2009. For this reason, it should be noted that, with respect to the dramatic falls in volume recorded in the last quarter of 2008, the first months of the 2009 accounting period show an increase in profits, as can be seen from the graph below. 30.000 25.000 24.899 24.519 23.105 24.965 24.525 24.697 21.431 23.854 26.270 AVERAGE SALES 2008 20.000 16.957 16.228 17.088 15.000 14.443 13.414 10.000 7.627 5.000 0 gen-08 feb-08 mar-08 apr-08 mag-08 giu-08 lug-08 ago-08 set-08 ott-08 nov-08 dic-08 gen-09 feb-09 mar-09 As far as the accounting periods after 2009 are concerned, the numerical simulation described for the purposes of this analysis is based on the turnover forecasts for the accounting periods 2009-2010-2011-2012, as already described several times above, drawn up by the Maflow S.p.A. commercial structure, still only concerning running contractual commitments and orders awarded, leaving aside any additional new commercial opportunity relating to the ( 35 ) Cfr. European Securities Network LLP (ESN), European Automobiles & Parts, 10 March 2009. 212

development of new orders, arising from the withdrawal of the production of some vehicles and the inclusion of some new ones. Overall, the increase in turnover in the forecasts for the accounting periods analysed (2009-2011) is about 51.7 m and, according to the management s forecasts, can be essentially attributed to the development of new orders already awarded (starting with Euro 2.7 million for 2009), and new orders already awarded with BMW (X1), Ford-Volvo (Range Rover, S80) and Volkswagen (Sharan, Robust Pick-up) etc. Alongside these there is the progressive increase of the production of rubber hose directly by third party customers, with an assignment level for 2009 alone of about Euro 10.8 million, including OEM (Ducati, Renault) and system integrators (Carrier, Eaton, Keumah, Senstar and others). 300.000 250.000 E voluz ione fatturato 2008-2011 200.000 150.000 100.000 50.000-2008 2009 2010 2011 ITALIA POLONIA CONSOLID Evolution of group net contribution margin The net contribution margin is the difference between profits and variable costs and is, therefore, that which enables companies to cover all the fixed structural costs to obtain a positive economic result. The variable costs which are included in the calculation of the contribution margin are all those variable cost entries (direct and indirect) in proportion to the variation in production: - raw material consumption (algebraic sum of the purchases of raw materials and the variation in the warehouse); - direct work; - subcontractors; 213

- deliveries; - users, consumables and other variable costs. In 2009-2011, the evolution of the contribution margin in ratio to the turnover is substantially constant for the Maflow group, as a result of the theory of flat development underlying the economic simulation which will determine maintenance of the same profit margin hypotheses, for prudential reasons. On a historical comparison basis, the contribution margin is worsening in absolute value with respect to the data from the 2008 balance in which, nevertheless, there were significantly higher profits (2008: Euro 259.0 million; 2009: Euro 194.2 million). On the contrary, in terms of incidence on the turnover, the percentage contribution margin is significantly higher (2008: 22.41%; 2009: 25.97%), the result, according to the Maflow management, of the recovery of normal production programming conditions (with an improvement in transport costs) and the use of raw materials (especially in the Polish company), making a significant reduction to production waste. It should also be noted, still according to the management, that further savings could be made in the near future due to an additional recovery of efficiency in facilities and also a decrease in the price of commodities. Nevertheless, given the financial tension the group is under, the management has opted to not consider further incremental improvements in profits. At the level of the individual legal entity, Maflow Polska Sp.zo.o. is the company benefitting most from the above dynamics (as featuring greater production volumes). It recorded a percentage increase in the incidence of the contribution margin on the turnover of around 10% with respect to the final values in 2008. According to the company, the higher weight recorded by the Polish company can be mainly attributed to the different production mix compared to the other facilities and other companies in the group. As far as the Italian company is concerned, an improvement in the incidence of the cost of transport is highlighted at a forward-looking level; this is hypothesised to be lower compared to that of the Polish company and the whole group, with a percentage of less than 1% compared to 1.2-1.5% of incidence on the turnover at a consolidated level. Lastly, as has already been noted several times, and with the duty to give correct information, it should be recalled that reading the data per legal entity may lead to considerations which are sometimes inaccurate. It is known that most of the Italian production ( for example, rubber hoses supplied both vulcanised and green by the Ascoli Piceno facility to other 214

companies in the Maflow group, are preformed in the Polish facility at Chelmeck as far as non-vulcanised hoses are concerned, i.e., assembled with the other components in steel or aluminium in the facilities of Trezzano sul Naviglio and the plant in Brazil [ 36 ]) is for the Polish facilities (and not only) of the Maflow group. As a result, the profit data (in both absolute terms and incidence on turnover) does not necessarily allow adequate considerations on the production efficiency of group companies to be expressed, as an effect of the dynamics of intercompany purchases. Differently, reading and analysis of the consolidated data enables the strong interactions which are a feature of the group to be removed from the numerical results. In this case, in the face of growth in the incidence of the contribution margin on turnover of around 10% for the Polish company, profits for the whole group has grown considerably less, at around 3.56%. There are two aspects to this - firstly, the strong inter-relations between Maflow S.p.A. and Maflow Polska Sp.zo.o., which trigger strong intercompany dynamics which cannot be removed when reading the data for the individual legal entity. In addition, the effect of the varied composition of the group, with very uneven profits according to the work carried out by the subsidiary (production, commercial or both), the country where it is located (countries with a high incidence of labour, those with a low incidence of labour, etc.) is not negligible and, sometimes to a large degree, by the effect arising from the translation of the final accounts into currencies other than the Euro. To conclude, the result is that the data on profit in the consolidated balance sheet describes group profits in detail, without the intercompany dynamics, although the indication supplied corresponding to an average influenced, as has just been said, by many factors. ( 36 ) Source: Petition for the declaration of insolvency ex Arts. 3 and 5 Legisl. Decree 270/1999 presented by Maflow S.p.A. on 10 April 2009. 215

35% 30% 25% 20% 15% 10% 5% 0% Evoluzione mc% 2008-2011 2008 2009 2010 2011 ITALIA POLONIA CONSOLID EBITDA Evolution The EBITDA (or gross operating margin) is the most important margin for understanding if a company is able to generate profitability at an operational level. It s obtained by deducting fixed costs (except for amortisements) from the contribution margin; in addition, financial management, extraordinary entries and taxes are also not included in the calculation of the EBITDA. The various levels of EBITDA were determined following the structure by the company in management documents was then carried out in the case in question: EBITDA at facility level ( facility EBITDA or EBITDA plant ); EBITDA at group level ( group EBITDA or, more simply EBITDA ); EBITDA post non-recurring costs. In order to determine the facility EBITDA, the following costs were deducted from the contribution margin calculated and commented above: staff costs; other operating costs, obviously excluding costs which, although of the same type, can be referred to the group and not a specific facility. In 2009-2011, there will be continuous growth in the evolution of the EBITDA in ratio to the turnover for the Maflow group following the hypothesis of increase in the turnover and reduction or flat development in fixed facility costs - the expected percentage will pass from 6.67% in 2009 to 12.40% for the last year of the forecasts. 216

In 2009, the facility EBITDA is expected to improve in absolute value by about Euro 3.9 m with respect to the last final data after it reached a value of about Euro 9.1 m and 3.52% compared to the turnover, despite the expectation of considerably lower profits. According to the management, this increase will be the result of savings which should be obtained in staff costs and other fixed costs from 2009. With reference to the first type of cost, the higher weight of the cost of labour in the Italian company compared to the Polish and other companies should be noted. Although this phenomenon is a diminishing trend, it can be connected to reasons which, in the opinion of the company, lead to the extra staff in Italian plants, especially that of Trezzano sul Naviglio, and the higher cost of labour in comparison with the other countries where the group has production plants. In relation to this, the management has planned the reduction and reorganisation of the workforce, particularly in Italy, hypothesising use of CIGS (redundancy pay) for 100 people in the Trezzano sul Naviglio facility for the whole period of the extraordinary administration. If the applications for CIGS is accepted, the expected saving is estimated at about Euro 2.9 million. The other savings expected from staff oscillate between about Euro 440,000 in 2009 and about Euro 700,000 in 2010 and 2011, mainly concerning the Polish company, Codan Argentina and Codan Rubber. As far as the other fixed facility costs are concerned, the management expects a consistent drop of about Euro 7.7 million. This saving refers to a series of related expenses, for example, plant maintenance and cleaning, consultancy and sundry services. 25% Evoluzione EBITDA plant% 2008-2011 20% 15% 10% 5% 0% -5% -10% 2008 2009 2010 2011 ITALIA POLONIA CONSOLID 217

The second gross operating margin identified is the so-called group EBITDA, from the difference between the facility EBITDA and corporate fixed costs, i.e., fixed costs linked to the central structure of the headquarters. These costs refer to services provided at a centralised level which mainly concern performance of strategic guidance, monitoring and control relating, inter alia, to business development, company organisation and development, personnel management, financial management and research and development, as indicated in detail above in the report. The cost of performing these services, consisting mostly of staff entries, is broken down on conditions substantially in line with those of the market in order to identify the profitability of each facility in the group. The management identified, defined and has already started the action which should allow improvements in the incidence of these cost entries. The progressive erosion of turnover has, inevitably, determined the excess of the corporate structure in the absence of a sufficient critical mass which, as has been confirmed by the management several times, was organised with the aim of managing business of around Euro 400 million. In particular, the action identified by the management embraces the subsidiaries Codan Rubber A.S. and Man Servizi S.r.l., with an estimated saving of Euro 369,000 in 2009, Euro 1,091,000 in 2010 and Euro 1,155,000 in 2011. The graph below shows group EBITDA in terms of percentage of net profits. Evoluzione EBITDA% 2008-2011 15% 10% 5% 0% -5% -10% -15% -20% -25% 2008 2009 2010 2011 ITALIA POLONIA CONSOLID 218

Lastly, a third level of analysis of the EBITDA, with the definition post non-recurring costs EBITDA, was identified. It s clear that the implementation of the action set out in the previous paragraph, already started by the management, necessarily leads to supporting the relative charges, as also detailed in the Maflow S.p.A. petition. Nevertheless, these charges are one-off costs (the so-called non-recurring cost) which, by definition, are only in one balance sheet. Practically speaking, these are costs whose usefulness will only be partly clear in the balance sheet in which they were sustained and will bring benefits to subsequent accounting periods above all, on condition that the petitioning companies are accepted for extraordinary administration ( 37 ). This circumstance leads these costs to not be considered in the determination of the gross operating margin of the entrepreneurial activity so that they do not influence the numerical results with charges whose benefits will only partly be felt in the accounting period in which they are sustained. Overall, the charges concerned amount respectively to Euro 618,000 in 2009 and Euro 45,000 in 2010, while they are not forecast for 2011. In correlation with the expected future benefits (described in the section preceding that on group EBITDA), the need to remove the effect of the deferral between the time such charges are met and the attainment of the relative benefits is even more evident. Lastly, with the aim of also normalising the final result of the first months of the 2009 accounting period, during which, according to what was learnt in the meetings with the management, there were some extraordinary costs, both the costs arising from consultancy with the aim of preparing the petition for the declaration of the state of insolvency (for the purposes of admission to the procedure ex Legisl. Decree 270/99) and the costs relating to deliveries of an extraordinary nature (air transport, accompanied baggage, etc.), particularly frequent in March and April, resulting from the abnormal production planning conditions (difficult procurement, etc.) were reclassified. The overall total of those costs, of Euro 820,000, divided into Euro 520,000 in consultancy and Euro 300,000 in extraordinary deliveries, was therefore separated from the relative cost entries (respectively, fixed corporate costs and delivery costs) and reclassified under group EBITDA as extraordinary non- ( 37 ) This circumstance could even lead to those charges being considered like costs which can be capitalised (socalled multi-year charges) to be amortised in a congruous period on the basis of the useful estimated life. 219

recurring costs. The graph below shows the post non-recurring costs EBITDA in terms of percentage of net profits. 15% 10% 5% 0% -5% -10% -15% -20% -25% Evoluzione EBITDA % post costi non ricorrenti 2008-2011 2008 2009 2010 2011 ITALIA POLONIA CONSOLID 7.3. Potential upside elements of the economic simulation As the check of the existence of the requirement of real prospects for the recovery of economic balance is necessarily based on the economic simulation forecasts, it is considered appropriate to indicate what the basic assumptions showing greater potential are. Turnover: an estimate relating to the so-called opportunities referring to the development of new orders (of which the most important in terms of amount are with the Renault-Nissan, Volkswagen, Volvo and BMW groups) arising from the withdrawal of the production of some vehicles and the inclusion of some new ones was formulated, in addition to the indications of the turnover relating to running orders and those awarded to the group in the turnover forecast generated by the Maflow S.p.A. commercial structure. The Maflow group should focus attention on these commercial opportunities, which would already determine a significant advance in terms of turnover in the estimates relating to 2010, in order to see the same volumes of awards as those of today confirmed. It should also be noted that the Maflow group has asked BMW to defer the discussion of JAVA 2009, price reduction 2009, and the previous proposal transmitted to September 2009 in a letter sent to the customer dated 28 May 2009; at the time of writing, BMW had not answered the request made. It should be noted that the discount rate should be applied 220

contractually to the whole of the BMW turnover in the 2009 accounts so, if the request is accepted, there may be an improvement in profits. Lastly, it should once more be clarified, as has already been stated several times above, that particularly for 2010 and 2011, the forecast turnover (already in the version Running and Awarded) may be subject to considerable variations on the basis of the evolution of the group situation. If stable supplies are not guaranteed in the near future, many customers would be ready to interrupt the collaboration with the Maflow group, even if this option would lead to additional charges for them. Production costs: these are the entry which absolutely shows the greatest potential for improvement for the group. It should be recalled, that Maflow has appointed a leading industrial advisor (Boston Consulting Group) for the purposes of identifying the opportunities for improvement in operational management of the group and developing an overall industrial intervention plan for the reorganisation and rationalisation of costs so that savings in the sphere of the production process can be identified for the purposes of increasing operating profit, also in the light of the action already undertaken by the management. The analysis of the Boston Consulting Group identified the following methods of operation: (i) the gradual reduction in operating costs in a range estimated between 18 m and 24 m, in relation to seven main areas of operation: Procurement: possible savings of up to 4/6 m; Labour Efficiency: possible savings of up to 4/5 m; Production process & cycle time: possible savings of up to 3/4 m; Quality: possible savings of up to 2/3 m; Indirect costs and SG&A: possible savings of up to 3/4 m; Standardisation of Products: possible savings of up to 1 m, and Logistics: possible savings of up to 1 m with the aim of harmonising the Maflow group structure with the new reduced volume of business; (ii) investment aimed at implementing the reduction of the aforesaid operating costs for a total of about 9.5 m and investment aimed at guaranteeing the operativity of the new industrial model for an overall amount of about 25.5 m; 221

(iii) strengthening, and greater horizontal and vertical co-ordination of the managerial structure of the Maflow group; (iv) higher standards of production quality; (v) rationalisation of the supply chain and the commercial management of orders made by the OEM. The implementation of the reorganisation plan drawn up by Boston Consulting Group obviously implies the need to find financial resources for the cover of the relative costs and improved rationalisation of financial debt ( 38 ). To summarise, the areas of potential improvement which can be taken into consideration by the commissioners, once the extraordinary administration has been set up, and which, after assessment, will have full power to implement them, if appreciated, (since implementation of the action plan implies bearing the relative charges, as also clarified in the petition of Maflow S.p.A.), hinges on: 1. Consumption of raw materials: as a result of the operations that can be hypothesised on procurement for this cost entry, with the considerable contribution of delocalisation of suppliers to countries with low labour costs (Mexico, China, etc.), plus the quotation of new suppliers (and the re-negotiation of current ones) for the purposes of increasing contractual power and to the benefit of the downward trend in raw materials, there could be a reduction in the order of 4% of the costs of materials; 2. Other direct production costs: the industrial advisor identified the implementation of more efficient techniques of cutting rubber, aluminium and steel hoses, with impacts in terms of reduction of technical waste (production process) plus the introduction of Low Emission Fittings (LEF) which would allow a reduction in the cycle time and, lastly, a potential saving expected to be around 3% of the cost of materials and 6% of the cost of direct work respectively through the rationalisation of the production of rubber hose and the reduction in re-processing and waste because of non-conformity; 3. Transport and logistics: better planning of both production and warehousing can give significant savings in terms of delivery charges (which, instead, showed an abnormal leap resulting from extraordinary deliveries with air transport, accompanied baggage, etc. in February and March 2009), plus better use of logistics (especially for rubber ( 38 ) Cf Petition for the declaration of insolvency ex Arts. 3 and 5 Legislative Decree 270/1999 presented by Maflow S.p.A. on 10 April 2009. 222

hoses) of consumables. The saving that can be hypothesised from these operations is estimated at around 1% of direct production costs; 4. Staff: the staff entry is divided between direct and direct work. As far as the former category is concerned, the advisors hypothesise significant savings from a strategy aimed at considerably increasing productivity (with specific reference to the facilities of Maflow Polska Sp.zo.o. in which intervention to reduce absenteeism is fundamental), from which a notable reduction in the number of employees could arise. A series of operations aimed at generating benefits in terms of the increase in productivity can also be hypothesised for the other foreign subsidiaries - inter alia, company reorganisation projects involving the Codan group, the Chommage technology project which could have an impact on Maflow France in terms of lower working hours and the exploitation of the Espediente de Regulation de Empleo (similar to CIG redundancy money) for Maflow Brazil and Maflow Iberica can be cited. Lastly, a strategic process of very high concentration on the added value work of MAN Servizi S.r.l. is already partly active, with the aim of reducing the so-called overheads, with further savings of around 4% of indirect costs and SG&A; 5. General expenses: further efficiencies can be hypothesised for the Italian company in insurance and Reception insourcing while a reduction in consultancy, a 50% reduction in consultancies and the transfer of the local general manager can be hypothesised for Codan Mexico. 7.4. Conclusions Considering that, as said, Art. 27 of Legislative Decree 270 of 1999 conditions the admission of the insolvent company to the extraordinary administration to the essential supposition of the existence of real prospects of recovering the economic equilibrium of the entrepreneurial activity, the analyses and considerations made in the previous section enable the Board of Commissioners to express its assessments on the possibility that the entrepreneurial activity carried out by Maflow S.p.A. and Maflow Polska Sp.zo.o. ( 39 ) may ( 39 ) As a result, reference is also made to the foreign production subsidiaries of Maflow S.p.A., because of the already highlighted circumstance of the Italian company being, in a group view, a mainly non-production company which bears a series of operating costs to the benefit of the whole group. 223

recover economic equilibrium, re-instating a physiological ratio between costs and profits and maintain a leading position in the automotive sector. Being aware that the indications offered in this report are not binding on the future programme of the commissioners assuming that the Court accepts both insolvent companies, or only one of them to the procedure of extraordinary administration - the Board of Commissioners considers it opportune to also express its reasoned assessments on this point. It has already been highlighted how, for the purposes of admission to extraordinary administration, assessment is firstly centred on the economic equilibrium of the business, placing the debit profile of the insolvent company in second place in this preliminary analysis. Nevertheless, this element cannot be ignored when there is the choice between two alternatives( 40 ), already noted above and which, from a substance point of view, and two different degrees with which the recovery potential is open to showing itself, correspond to. In the first case (sale programme), the equilibrium between costs and profits can be reinstated in the future without, however, this allowing the previously accumulated losses to be made good per integrum. Preservation of the production heritage would, therefore, take place through a change in the ownership of the company, dissolution in the course of which would thus be avoided. In the second case (reorganisation programme), however, extraordinary administration is a prelude to recovery of the ability to satisfy even prior obligations normally by the company, and so its return to bonis. Obviously, the gravity of the state of insolvency is reflected in the choice of the programme. In the first case (sale), there is a more serious insolvency. Company complexes are sold to another businessman and the creditors are satisfied through the mechanisms set out by Arts. 67 et seq. of Legisl. Dec. 270 of 1999; in the second (reorganisation), the state of insolvency is less serious and, in particular, can be reversed in the two years set out by Legisl. Dec. 270 of 1999. ( 40 ) Reference is respectively made to the sale of company complexes, on the basis of a programme of prosecuzione dell'esercizio dell'impresa of not more than one year ( programme for the sale of company complexes ) and the economic and financial restructuring of the business, based on a reorganisation programme of no more than two years ( restructuring programme ). 224

The above considerations, with the analyses made previously of the causes of insolvency and the amount of debt weighing on Maflow S.p.A. and Maflow Polska Sp.zo.o., contribute to the definition of the decisions to adopt in the definition of the respective programmes. 7.4.1. The choice of programme for Maflow S.p.A. With reference to Maflow S.p.A., the extent and features of the debt lead to the exclusion of its return to bonis through the adoption of a reorganisation plan. At today s date, therefore, a negative opinion is given on the adoption of a reorganisation programme. Alternatively, the hypothesis of the adoption of the sale programme of the company complexes to be implemented on the basis of the priority and main aim being the preservation of the integrity and unity of the group, for the reasons given above, appears possible, with the clarifications and limits below. Moreover, in line with the ratio of Legisl. Dec. 270/1999, sale of the company complexes (and the holdings of Maflow S.p.A.) must be made having respect not only for the price but also for its industrial competence, the guarantees for safeguarding its production heritage and the maintenance of the levels of employment in the selection of a possible purchaser. In the sphere of the above plan, continuity of production may increase the chances of success of the divestment operations, increasing the values that can be made, also in accordance with those intangible elements which are only those of an operative company (goodwill, market positioning, technological expertise, human capital, etc.). In this way, a more intense enhancement of production assets, combined with operations aimed at cutting costs and, as far as possible, increasing turnover, could offer adequate protection of the creditor s interests. From another point of view, it should be noted that, because of the particular function of Maflow S.p.A. within the reference group, any interruption of its business would cause very negative consequences, in economic rather than operational terms, for its subsidiaries. With reference to the hypothesis of starting a programme of sale of the Maflow S.p.A. company complexes, this Board of Commissioners must, nevertheless, highlight, on one hand, the serious risk of operational losses in the time span between the start of and the completion of the sale and, on the other, the possibility that the company does not have the resources necessary to cover the financial requirement relating to continuation of the business. It should be clarified that, for this reason, completion of the sale, whose preliminary 225

fulfilments are already in progress, even in a very short time, may enable the critical points highlighted above to be only partly remedied. As far as those innate in the Maflow S.p.A. situation are concerned, the communication received by e-mail from Giovanni La Croce, liquidator of the company, (All. 11) is attached. Lastly, it must be clarified that if the work on the reduction of costs can be achieved with a focused business plan, achieving the objectives set out in the plan is, however, subordinate to market variables and the return of normality in company management, also from the commercial and operational reliability point of view. 7.4.2. The choice of programme for Maflow Polska Sp.zo.o. The extent and features of the Maflow Polska Sp.zo.o. debt lead to exclusion of its return to bonis through the adoption of a reorganisation programme for similar reasons to those given for Maflow S.p.A. The hypothesis of the adoption of the programme of sale of the company complexes seems possible, however, with the aim of trying to maintain the integrity and unity of the company. The selection of the possible purchaser of the company complexes for Maflow Polska Sp.zo.o., must also be made taking account of not only the price but also of its industrial competence and the guarantees of safeguarding the production heritage and the maintenance of the level of employment. Moreover, the sale programme seems suitable for ensuring the achievement of financial resources also in consideration of the following aspects: a) the market prices that can be reasonably hypothesised for the sale of the company complexes operational (prices which will certainly benefit the enhancement of undoubted industrial and market goodwill); b) reasonably achievable economic results. It should be clarified that, also for Maflow Polska Sp.zo.o., continuation of business (plus operations aimed at cutting costs and, as far as possible, an increase in turnover) with a view to the sale of the company complexes could increase the chances of success of the divestment operations and protect the interest of creditors in a satisfactory manner. The sale programme also appears fully compatible with the time span of one year set out for that purpose by Legisl. Dec. 270/1999. In the meantime, the profitability of the business could give sufficient resources to cover the financial needs of the extraordinary administration. 226

Lastly, it should be noted that the previous comment that achievement of the objectives set out in the plan is subordinate to market variables and the return to normality in company management also applied to Maflow Polska Sp.zo.o. *** The appendices are lodged as per the separate index. *** Trezzano sul Naviglio, 24 June 2009. Judicial Commissioners Stefano Coen Francesco Pensato Prof. Vincenzo Sanasi d Arpe 227