Ferrari Real Estate Company

Year 2 Annual Report

FERRARI

COMPANY Always Driven

Year TWO

Ferrari Real Estate Company

Year 2 Annual Report

The Company continuously move in synergy to be able to serve our customers needs. Through the diverse offerings of the Ferrari Company, we remain deeply committed to enhancing peoples overall quality of life. .

38.13%
Total Asset Growth

28 %
Capital Investment Growth

Three
2

Buildings built in Year 2

Ferrari Real Estate Company

Year 2 Annual Report

Table of Contents
CEO letter Presidents Report Financial Highlights Financial Statements Statement of Financial Performance Statement of Financial Position Statement of Changes in Equity Statement of Cash Flows Notes to Financial Statements Certification of Financial Statements Contact Information 4 5 6 7 8 16 17 1 2 3

Ferrari Real Estate Company

Year 2 Annual Report

Letter from the CEO

A sharp contrast to the year it emerged, the second year provided an ideal environment for economic growth. While it witnessed a road to real estate development with trading-off properties posting lackluster growth and emerging markets registering robust progress, the year was nevertheless welcomed with much optimism by companies and individuals around the world.
only one building. Nevertheless, lack of inflows from these developments can be traced from the period the construction was finished. Since the company has completed the structures in the later months of the second year, revenues are optimistically expected to flow in the third year. What makes us alive in the world of real estate is not luck but our strategy. It is our intent and commitment to develop a project, investment, asset-specific or portfolio responsive, performance-oriented plan by choosing cautiously the right properties to be developed. We believe that the real goals and The Ferrari Company continues to be a aspirations of our clients, regardless of size, vibrant, viable, satisfying workplace, an complexity or compensation, are purely and organization truly committed to delivering the simply our sole responsibility. In every decision highest quality professional services to its clients and recommendation we make, and in every and customers, a business respected within the action we take, the best interests of the client community for its productivity, performance and must be paramount. It is on behalf of the clients innovation a business driven by results, whose and the real property challenges and the assets standards of practice are ethically and morally that the clients have entrusted to us that we focus rooted. our every effort, our professional energy. We will practice our profession and carry out our duties in Strength through Optimism a manner to meet or exceed every professional Like many real estate companies, we at the standard of practice. Ferrari Company were prudently optimistic about prospects in Year Two. Thankfully, this positive Renewed Confidence towards Progress outlook was reflected in the performance of the With a great cash balance on hand, company. robust development in the third year is Basking in a more favorable business forecasted. Ferrari Company had decided to build environment, we were placed in a prime position up a strong foundation through focusing in the to seize new opportunities for growth. We expansion of a single real estate monopoly focused on acquiring lands through trading from before diversifying. The orange monopoly is our Hat Spring Company and extend our reach to priority for the upcoming years to increase our better serve existing and prospective clients. revenues and to consistently expand our market We strengthened our efforts through share. transforming our properties to high quality We at Ferrari, remain undeterred in developments by erecting three buildings in New fulfilling our vision to be the best Real Estate York, Tennessee and St. James Place. This Company for all our shareholders. Buoyed by increases returns enabling us to expand market sustained business confidence, we aim to breath and depth and maintain the necessary enhance and develop our properties further. We profitability to support the efforts of further are committed to transform every property to high development. quality developments that create superior value In the second year, we achieved our to our customers and for our shareholders. Every objective of remaining a dominant force in our Ferrari Land project carries with it, the reputation industry, of continually reforming Ferrari of having the highest standards of quality in Company into one of the dominant Real Estate service. That is, the Ferrari Land Brand. firms, consistently expanding our market share; our market breadth and depth; increasing diversity in our client base; increasing our revenues; re-investing in the personal growth of our personnel, Acquiring New York, Tennessee and St. James Place enabled us to remain a dominant Ty M. Bollinger force in the industry. Revenues had a multiple CEO increase from M14 to M70 from just developing

Ferrari Real Estate Company

Year 2 Annual Report

Presidents Report
We continuously drive ourselves to create the right solutions for our customers, and to uphold the trust of our shareholders. Our unwavering focus on our financial statements has been a transformative and key component of our performance as an institution.
rental revenues and the trade and investment opportunities with other companies. Ferrari Company maintained its focus on the development of properties. We decided to dispose of undeveloped properties, on the back of the upbeat sentiment in the property sector. Thus, we traded with Hat Spring Company to acquire Tennessee Avenue in exchange of cash and Atlantic Avenue. We recognize that as the real estate industry becomes more competitive, we need to differentiate ourselves and devise a strategy to develop our properties fast at the lowest cost, yet with enough return to remain profitable. To execute our development-centric strategy, we need to construct more buildings, acquire lands suitable for development and triple the return from these properties. Choosing the best, developing the most able, and retaining the most committed are the tenets that shape the company geared towards development. Moving forward, we expect a more challenging environment. But we also welcome the next chapter in our history with optimism. Our economy is rebuilding; if investors risk appetite continues to improve, then emerging markets will likely be the recipients of large investments. The companies thrust of promoting investments through infrastructure development is expected to usher a renewed demand for credit and more opportunities for trading and investments. We are looking forward to participating in this invigorated business environment. With our strong balance sheet, the Ferrari Company is well poised to capitalize on these growth opportunities. On behalf of our management and shareholders, I thank our people for staying committed to our institutional goals. To our customers, rest assured we will stay true to our promise of being your real estate partner. The road to success may not always be paved and easy, but with your unfailing support, we will always be driven to do our very best.

M 2,875.80
stronger in total assets, increasing by M 793.80 from the previous year.

Net Income In hundreds

3.9

5.2

Year 2

Year 1

The economy in the second year has been erratic due to investment spending and development of properties by all companies. The Ferrari Company has improved all its effort to maintain the stability and resiliency of the real estate system. Against this backdrop, Ferraris net income decreased by 25.77% to M 388.80, from M 523.80 in year one. This resulted in the Return on Average Equity of 16%. We ended the year with M 2,875.80 billion in resources, 38.13% higher than the same period last year. This was on the back of an investment of 400 to other companies and buildings with a total cost of M 282. Riding the positive growth of the economy, our lands rose 15.22% to 1060 from 920 of the previous year. We strengthened our capital through a 420 investment from other companies, though coupled with a decreased earnings growth this year, total equity reached M 2,832.60 by year-end, a 40% increase in equity. Total revenues grew 3.56% to M 756.00 from M 730 in the previous year. Nevertheless, the weakness in net interest income was caused by an increase in rental expenses, miscellaneous expenses and depreciation expense. The total expense had an erratic increase of 119% to 324.00 from 148.00 of the previous year. This erratic experience has shaken the company, pulling down the companys net income for the second year. Net cash outflow was M 28.20 leading to a 2.43% decrease in ending cash balance, from M 1162 to M 1133.80. Net cash flows provided by operating activities decreased by 32.68%; for investing activities, net cash outflows decreased by 8.69%; and cash flow from financing activities totalled M 420. . We opened the orange group lands the first monopoly built with three buildings \ (houses), geared towards servicing the preferential requirements of our companies, Angelie De Ramos as well as take advantage of the increase in President

Ferrari Real Estate Company

Year 2 Annual Report

Financial Highlights
Financial Position
3500 3000 2500 2000 1500 1000 500 0 Year 1 Year 2 Assets Liabilities Shareholders' Equity

Financial Performance
800 700 600 500 Revenue 400 300 200 100 0 Year 1 Year 2 Expenses Net Income

Ferrari Real Estate Company

Year 2 Annual Report

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

M M

148.00 0 0 148.00 582.00 58.20 523.80

Ferrari Real Estate Company

Year 2 Annual Report

As of Game Year-Ended Month 13, Year 2

Assets Cash on Hand Property and Buildings Investment in Equity Securities Total Assets Liabilities and Shareholders Equity Liabilities Trade and other Payables Total Liabilities Equity Contributed Capital Retained Earnings Total Shareholders Equity Total Liabilities and Shareholders Equity

Note M 2 3 M

Year 2 1,133.80 1,342.00 400.00 2,875.80

Year 1 1,162.00 920.00 0 M 2,082.00 M

43.20 43.20 1,920.00 912.60 2,832.60 2,875.80

58.20 58.20 1,500.00 523.80 2,023.80 2,082.00

Ferrari Real Estate Company

Year 2 Annual Report

For the Game Year-Ended Month 13, Year 2 Note 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 M M 5 Year 2 1,500.00 420.00 1,920.00 523.80 388.80 912.60 2,832.60 M Year 1 M 1,500.00 0 1,500.00 523.80 0 523.80 2,023.80

Ferrari Real Estate Company

Year 2 Annual Report

For the Game Year-Ended Month 13, 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 Payment for Investing Payment for Building Houses Net Cash flows provided by Investing Activities Cash flow from Financing Activities Received from Investment Net Cash flows provided by Financing Activities Net Change in Cash for the Year Beginning Cash Ending Cash Year 2 600.00 26.00 130.00 (156.00) (150.00) (58.20) 391.80 (220.00) 80.00 (400.00) (300.00) (840.00) 420.00 420.00 (28.20) 1,162.00 1,133.80 Year 1 600.00 100.00 30.00 (148.00) 0 0 M 582.00 M (920.00) 0 0 0 (920.00) 0 0 (338.00) 1,500.00 1,162.00

M M M

M M M

Ferrari Real Estate Company

Year 2 Annual Report

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 8

Ferrari Real Estate Company

Year 2 Annual Report

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.

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 on-going 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.

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 9

Ferrari Real Estate Company

Year 2 Annual Report

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. 79% 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 10

Ferrari Real Estate Company

Year 2 Annual Report

a competitor, hospital fees, speeding fees, tuition fees and the like. This results from peripheral operations of the business.

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-forsale 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 391.80 include cash receipts from revenue and payments to expenses. Investing activities which comprise of payments for purchases of properties are the major outflows that decrease the cash balance, 11

Ferrari Real Estate Company

Year 2 Annual Report

amounting to M 840 and cash inflows from investing activities amounted to M 420. With a beginning cash balance of M 1,162, net change in cash flows, amounting to a decrease in 28.20 results to an ending cash balance of M 1,133.80. 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 and an additional investment of M 420 from different companies. Total contributed capital amounted to M 1920. 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 two comprise solely of net income from year one, amounting to M 523.80 and from year two, M 388.80. Total retained earnings amounted to 912.60. No dividends were declared for this year. 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. 12

Ferrari Real Estate Company

Year 2 Annual Report

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.

Cash flows from operating activities. Cash flows from operating activities are calculated by the direct method. Cash payments to rental and miscellaneous expenses are all recognized as cash flow from operating activities. Cash flows from operating activities also include income taxes paid on all activities. Cash flows from investing activities. Cash flows from investing activities are those arising from net capital expenditure, from the acquisition and sale of properties. Net acquisition spending excludes acquisition related costs which are included in cash flows from operating activities. Net capital expenditure is the balance of purchases of property, plant, and equipment less book value of disposals. Cash flows from financing activities. The cash flows from financing activities comprise the cash receipts from additional investment from other companies.

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 Baltic Avenue Kentucky Avenue Indiana Avenue TOTAL Buildings Houses St. James Place New York Avenue Tennessee Avenue TOTAL 13

M 1060 300 M 1360 18 M 1342 Cost M 180 200 180 60 220 220 M 1060 Cost M 100 100 100 M 300

Ferrari Real Estate Company

Year 2 Annual Report

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 M 25 25 20 30 30 30 20 20 20 25 35 20 30 40 30 M 400

Total Income Total Expense Income before Tax Less: Income Tax Expense (10% of 432) Net Income

M M M

756.00 324.00 432.00 43.20 388.80

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. 14

Ferrari Real Estate Company

Year 2 Annual Report

No dividends were declared for this year. Shareholding structure on the closing date of the share registration book as of Year two: 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 M 20 25 25 20 30 20 20 30 20 30 40 40

55
35 M 420

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) 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.

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Ferrari Real Estate Company

Year 2 Annual Report

Certification of Financial Statements I, Ty M. Bollinger, certify that: 1. I have reviewed this annual report on Form 10-K of Ferrari Company; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of Ferrari Company as of, and for, the periods presented in this annual report; 4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) and have: a) Designed such disclosure controls and procedures to ensure that material information relating to Ferrari, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; b) Evaluated the effectiveness of Ferrari's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and c) Presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. I have disclosed, based on my most recent evaluation, to Ferrari's auditors and audit committee of Ferrari's Board of Directors (or persons performing equivalent functions): a) All significant deficiencies in the design or operation of internal controls which could adversely affect Ferrari's ability to record, process, summarize and report financial data and have identified for Ferrari's auditors any material weaknesses in internal controls; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in Ferrari's internal controls; and 6. I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Ty. M Bollinger Chief Executive Officer Ferrari Company Date: September 10, 2012 /s/ Ty. M Bollinger

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