Ferrari Company Statement of Financial Performance For the Game Year-Ended Month 13, Year 2

Total Revenue Rent Revenue Salary Revenue Miscellaneous Revenue Total Income Total Expense: Rent Expense Miscellaneous Expense Depreciation Expense Total Expense Income before Tax Less: Income Tax Expense Net Income

Year 2 26.00 600.00 130.00 756.00

Year 1 100.00 600.00 30.00 M 730.00 M

M M

156.00 150.00 18.00 324.00 432.00 43.20 388.80

148.00

M M

148.00 582.00 58.20 523.80

Ferrari Company Statement of Financial Position As of Game Year-Ended Month 13, Year 1 ASSETS Note Current Assets Cash on Hand Total Current Assets Non-current Assets Land Building-Houses Investment in Equity Securities Total Non-current Assets TOTAL ASSETS M M Year 2 1,133.80 1,133.80 Year 1 1,162.00 1,162.00

1,060.00 282.00 400.00 1,760.00 2,875.80

920.00 0 920.00 2,082.0

LIABILITIES AND SHAREHOLDERSEQUITY Current Liabilities Trade and other Payables 4 M 43.20 Total Current Liabilities M 43.20 Equity Contributed Capital Retained Earnings Total Shareholders Equity TOTAL LIABILITIES AND EQUITY

58.20 58.20

M M M

1920.00 912.60 2,832.60 2,875.80

1500.00 523.80 2023.80 2082.00

Ferrari Company Statement of Changes in Shareholders' Equity For the Game Year-Ended Month 13, Year 2 Year 2 1500.00 420.00 1920.00 523.80 388.80 912.60 M 2,832.6 Year 1 1500.00 1500.00 523.80 523.80 2023.80

Contributed capital, start of turn 1 Additional Contributed Capital Contributed capital, turn 13 Retained Earnings, turn 1 Net Income Retained Earnings, turn 13 Balances, turn 13

Ferrari Company Statement of Cash Flows For the Game Year-Ended Month 13, Year 1 Year 2 Cash flow from Operating Activities Received from Passing Go Received from Rentals Received from Miscellaneous Paid for Rentals Paid for Miscellaneous Payment for Income Tax Net Cash flows provided by Operating Activities Cash flow from Investing Activities Payment for the Acquisition of Land Sale of Property Received from Investment Payment for Investing Payment for Building Houses Net Change in Cash for the Year Beginning Cash Ending Cash M 600.00 26.00 130.00 (156.00) (150.00) (58.20) 391.80 (220.00) 80.00 420.00 (400.00) (300.00) (420.00) 30.00 1162.00 1,133.80 Year 1 600.00 100.00 30.00 (148.00)

M M

582.00 (920.00)

(920.00) (338.00) 1500.00 1162.00

Notes to Financial Statements Note 1. Significant Accounting Policies General Reporting Entity. Ferrari Company is engaged in real estate operations as a developer of raw land, residential subdivision and mixed-use urban projects including condominium and commercial buildings, industrial and farm estates. Ferrari Company is a professionally-managed portfolio of diversified real estate holdings and is basically meant for high net worth investors. But, not-so-rich investors can also get a slice of the real estate pie by investing in our funds, which give them an opportunity to participate in specific asset classes such as residential, commercial, hospitality etc. in a more concentrated manner. The nature of Ferrari Company is used in three fundamental ways. First, is to view it as a tangible asset, real estate constitutes the physical components of location and space., real estate is defined as the land and any built improvements permanently affixed on, or to, the land. Next, to denote the bundle of rights associated with the ownership and use of the physical characteristics of space and location constitutes the services that Ferrari provides to our users. The value of a bundle of rights is a function of the propertys physical, locational, and legal characteristics. The physical characteristics include the age, size, design, and construction quality of the structure, as well as the size, shape, and other natural features of the land. For residential property, the locational characteristics include convenience and access to places of employment, schools, shopping, health care facilities, and other places important to households. The location characteristics of commercial properties may involve visibility, access to customers, suppliers, and employees, or the availability of reliable data and communications infrastructure. The physical and location characteristics required to provide valuable real estate services vary significantly by property type. And finally, to refer our company to the industry, or business activities, related to the acquisition, operation, and disposition of the physical assets. Real estate creates jobs for many applicants, and is the source of high percentage of local government revenues. Our market activity is influenced by the activities and conditions that take place in three sectors of a market economy: the user market, the financial or capital market, and lastly, the government sector. Our company users compete in the market for location and space. Among the users are both renters and owners. The financial resources to acquire our assets are allocated in the capital market; hence, the equity (ownership) and debt investors are capital market participants. Government influences the activities of each of the participant groups through regulations, provisions of services and infrastructure, taxes, and various subsidies.

Two primary characteristics of our company distinguish us from others: heterogeneity and immobility. Because of these two factors, the market for evaluating, producing, buying, selling, leasing, and managing real estate tends to be localized, highly segmented, and involves privately negotiated transactions. Statement of Compliance. The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the Philippines. Basis of Preparation Estimates and assumptions. Preparing financial statements requires management to make assumptions and estimates that affect the reported amounts of assets, liabilities, revenues and expenses. The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates, and assumptions that affect the application of policies and reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of income and expense. The estimates and underlying assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from those estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. Judgments made by management in the application of IFRS that have significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are discussed in note 32 of the Consolidated Financial Statements. Measurement Basis. The accompanying financial statements are presented and prepared in Monopoly dollars under the historical cost convention. Fiscal year. Ferrari Company operates on a thirteen month fiscal year. Principles for the determination of results Accounting principles. The financial statements and accompanying notes to the financial statements for Ferrari Company are prepared in accordance with generally accepted accounting principles. Revenue Recognition. Rental revenue is recognized over the duration of the lease term, inclusive of the rent-free periods. Revenue is recognised to the extent that it is probable that the economic benefits will flow to the entity and the revenue can be reliably measured. Rent and Salary revenue is recognized when earned while rent and miscellaneous expenses are recognized when incurred.

When a company lands on the property, rent revenue is recognized and must be paid accordingly. Also, salary revenue is also recognized as earned each time the company passes Go and the miscellaneous revenue is earned with regards to the scenario given in the chance and community chest cards. This is in accordance with the income recognition principle and the accrual basis of accounting. Expense Recognition. With regards to expenses, accrual basis governs the recognition of expenses when it is incurred. Each time a company lands on competitors properties, rent expense is recognized and must be paid accordingly. Miscellaneous expenses are also recognized immediately as expenses when incurred. Chance and community chest cards either give revenue or expenses to be earned and incurred respectively by the company. Cost includes expenditure that is directly attributable to the acquisition of the property and buildings. Rental Revenue. Rental revenue is recorded when earned. Rental revenue varies from property to property. Properties which are nearer to Go have sizeable returns compared to the properties past Go like the brown color group which gives small revenue but easy and inexpensive to develop. Rental Revenue of a property increases as more houses and buildings are being built on it. Nevertheless, the cost of developing a property also varies from low-cost to high-cost. Salary Revenue. Salary Revenue is recognized each time the company passes Go. One way in which the company earned salary revenue is through the chance or community chest cards when the manager has chosen a card which enables the company to advance to Go and collect M 100. Thus, Go is regarded as the point of recognition of Salary revenue. This is still in accordance with the accrual method of accounting since salary revenue is earned regardless of receipt of cash. 82% of the companys revenue comes from the Salary. Due to chance cards, the company advances to Go and collects its salary revenue. Thus, the company have much and consequently, avoided paying from other players properties as a benefit of advancing to Go. Miscellaneous Revenue. Miscellaneous revenue is recorded when earned. Miscellaneous revenue results from chance or community chest cards. This can be receipt of dividend, collection of interest and other income which most of the time has small or average value. This results from peripheral operations of a business. Rent Expenses. Rental expense is recorded when incurred. Rental expense varies from property to property. Properties which are nearer to Go have sizeable rental payments like the Blue and Green property which gives the most expensive rental payments. Rental expenses incurred composed only of color group properties. No payment for railroads and utilities has been incurred during the year. Miscellaneous Expenses. Miscellaneous expense is recorded when incurred. Miscellaneous expense results from chance or community chest cards. This can be a mandatory payment to a competitor, hospital fees, speeding fees, tuition fees and the like. This results from peripheral operations of the business.

Principles of valuation and presentation of assets and liabilities Property and Buildings. Property and buildings are carried at cost less accumulated depreciation and any impairment losses in value. Initially, an item of property and equipment is measured at its cost, directly attributable costs of bringing the asset to working condition. With regards to depreciable properties, the useful lives and depreciation method are reviewed periodically to ensure that such useful lives and depreciation method are consistent with the expected pattern of economic benefits from those assets. When an asset is disposed of, the cost and accumulated depreciation and impairment losses, if any, are removed from the accounts and any resulting gain or loss arising from the retirement or disposal is credited to or charged against current operations. Depreciation is charged to the statement of income on a straight-line basis over the estimated useful life of each part of an item of property, plant, and equipment. Land is not depreciated. The estimated useful life for buildings is 50 months. Financial assets. Financial assets include investments, loans and receivables, and derivative financial instruments. Financial assets are recorded initially at fair value. Subsequent measurement depends on the designation of the financial assets. Investments. All equity investments that are not subsidiaries or equity-accounted investees (joint ventures and/or associates) are classified as investments. Investment available-for-sale is valued at their fair value. When the fair value cannot be reliably determined, the investment is carried at cost. A gain or loss arising from a change in the fair value of the investment available-for-sale shall be recognized directly in equity, except for impairment losses and foreign exchange gains and losses, until the financial asset is derecognized, at which time the cumulative gain or loss previously recognized in equity shall be recognized in profit or loss. If the investments are valued at cost, income from investments is based on the dividend received from the investments. Cash and Cash Equivalents. Cash and cash equivalents are carried in the balance sheets at cost. For the purpose of the cash flow statements, cash and cash equivalents consist of cash on hand and in banks, and other short term highly liquid investments with original maturities of three months or less from date of acquisition and that are subject to an insignificant risk of change in value. The company has a sizeable cash balance because the company didnt buy much properties. Still, the properties acquired during the year are enough for the business to earn a return from its properties purchased. Moreover, the company usually receives more cash from salary and rental revenue. Rental and miscellaneous expenses also result to an outflow. However, these rental payments are still low since the properties are still underdeveloped. Cash flows from operating activities, with a net amount of M 582, include cash receipts from revenue and payments to rentals. Investing activities which comprise of payments for purchases of properties are the major outflows that decrease the cash balance,

amounting to M 920. With a beginning cash balance of M 1,500, cash flows result to an ending cash balance of M 1,162. Trade and other Payables. Trade and other payables are current liabilities or short term obligations which are not discounted but measured, recorded and reported at their face amount. Included in Trade and other payables are bank overdraft, income taxes, accounts payable and the like. Taxation. Income tax on the profit or loss for the year is composed of current and deferred income tax. Income tax is recognized in the statements of income except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity. Current tax is the expected tax payable or tax receivable on the taxable income for the year, using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date, and any adjustment to tax payable or tax receivable in respect of previous years. A deferred tax asset is recognized for deductible temporary differences and for the carry forward of unused tax losses and unused tax credits to the extent that it is probable that future taxable profits will be available against which these can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. Shareholders equity. When share capital recognized as equity is repurchased (treasury shares), the amount of the consideration paid, including directly attributable costs, is recognized as a change in equity. Dividends are recognized as a liability upon being declared. Capital. This is the invested or paid-in capital. Capital is composed of the initial investments, amounting to M 1500, of the owners. Retained Earnings. Part of the shareholders equity, retained earnings represents the cumulative balance of periodic earnings, dividend distributions, fundamental errors and other capital adjustments. The retained earnings for year one comprise solely of net income, amounting to M 523.80. Provisions and Contingencies. The Company, in the ordinary course of business, sets up appropriate provisions for its present legal or constructive obligations in accordance with its policies on provisions and contingencies. Provisions are recognized when the Company has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as an interest expense.

Contingent liabilities are not recognized in the financial statements but are disclosed in the notes to financial statements unless the possibility of an outflow of resources embodying economic benefits is remote. Contingent assets are not recognized in the financial statements but are disclosed in the notes to financial statements when an inflow of economic benefits is probable. Principles underlying the cash flow statement Cash flows from operating activities. Cash flows from operating activities are calculated by the indirect method, by adjusting the consolidated operating income for items and expenses that are not cash flows (such as amortization, depreciation, additions to and/or releases of restructuring provisions, and the costs of the equity settled share-based payments), and for autonomous movements in consolidated working capital (excluding impact from acquisitions and foreign currency differences). Cash payments to employees and suppliers are all recognized as cash flow from operating activities. Cash flows from operating activities also include the paid financing costs of operating activities, income taxes paid on all activities, acquisition and divestment related costs, and spending on restructuring provisions. Cash flows from investing activities. Cash flows from investing activities are those arising from net capital expenditure, from the acquisition and sale of subsidiaries and business activities. Net acquisition spending excludes acquisition related costs which are included in cash flows from operating activities. Cash and cash equivalents available at the time of acquisition or sale are deducted from the related payments or proceeds. Net capital expenditure is the balance of purchases of property, plant, and equipment less book value of disposals and expenditure on other intangible assets less book value of disposals. Dividends received relate to dividend received from equity-accounted investees and other investments. Cash receipts and payments from derivative financial instruments are classified in the same manner as the cash flows of the hedged items. The Group has primarily used derivatives for the purpose of hedging its net investments in the United States. As a result, cash receipts from settlement from derivatives are classified under cash flows from investing activities. Cash flows from financing activities. The cash flows from financing activities comprise the cash receipts and payments from issued and repurchased shares, dividend, and debt instruments. Cash flows from short-term financing are also included. Movements in share capital due to stock dividend are not classified as cash flows. Dividends paid relate to dividends paid to the equity holders of the Company and the equity holders of non-controlling interests.

Note 2. Property and Buildings Property and Buildings Land Buildings Houses Total Property and Buildings, gross Less: Accumulated Depreciation Total Property and Buildings, net Land St. James Place New York Avenue Tennessee Avenue TOTAL Less: Accumulated Depreciation Land Buildings Houses St. James Place New York Avenue Tennessee Avenue TOTAL Less: Accumulated Depreciation Buildings at Cost Year 2 180 200 220 Year 1 180 200 220

Year 2 100 100 100 300 18 282 Year 2 100 100 100 300 18 282

Note 2. Investments Company IronMan Company CAR-ra Chuchi Company SHOEper Company Royal Ship Company Fast and Furious Company Missouri Battleship Corporation Company C Hachiko Company Mad Hatter Lands & Homes Corp FURry Friends Enterprise Car Company Rhenishoes Company Titanic Company Nike Company HAT-Spring Company TOTAL Cost 25 25 20 30 30 30 20 20 20 25 35 20 30 40 30 400

Note 4. Trade and other Payables Total Revenue Total Expenses Income before Tax Tax Rate Income Tax Payable M M M 730.00 148.00 582.00 10% 58.20

Income tax on the profit for the year comprises current tax only. Current income tax is the expected tax payable on the taxable income for the year using tax rates enacted or substantially enacted as of the balance sheet date, and any adjustment to tax payable in respect to previous years. The amount of tax owed is computed by taking the amount of pre-tax income times the tax rate, according to the given tax rate of 10% for pre-tax income ranging from M0 to M1000. Note 5. Capital Structure and Shareholders Shareholders Shareholding structure on the closing date of the share registration book as of September 11, 2009 Company CAR-ra Chuchi Company SHOEper Company Royal Ship Company Fast and Furious Company Missouri Battleship Corporation Company C Hachiko Company Mad Hatter Lands & Homes Corp FURry Friends Enterprise Car Company Rhenishoes Company Titanic Company Nike Company HAT-Spring Company TOTAL Note 5. Contingencies and Commitments The Ferrari Company received a Get-Out-of-Jail-Free card on turn 1/9. This card entitles the company to get out of jail without paying the fine, a M50 value. There is a reasonable probability that the company will receive this benefit in the future, but it depends upon (1) Cost 20 25 25 20 30 20 20 30 20 30 40 40

55
35 420

going to jail (a common risk of doing business, unfortunately) and (2) whether using the card to get out of jail is in the company's best interest.