Ferrari Company: Making a Mark

Annual Report

004

Annual Report developed as of Year FOUR

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Ferrari carries with it, the reputation of having the highest standards of quality in service. This Year, Ferrari has made a mark in the real estate industry.

Annual Report

Making a Mark
CEO letter Presidents Report Financial Highlights Management Discussion and Analysis 1 2 3 4 5 7 8 9

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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 6

18 19

Contents

Ferrari Real Estate Company

Year 4 Annual Report

01

The secret behind staying power is foresight. Through the years, the Company has stayed attuned to the ebb and flow of business, expanding in areas where it perceives strength and making strategic investments and alliances at the right time. Armed with this business acumen, the Company is in excellent shape for long-term growth and competitiveness.
Focus on Core Property Business lumber yard door in the back of a friend's music store. Why is this important? Because The company sees large opportunities for while the door and file cabinets are no longer, expansion in this sector with the huge gap the humble has remained. that remains between supply and demand in housing. For the , Ferrari is set to launch two We are not loud nor are we boastful. We more buildings covering the affordable, treat each other as each of us would like to middle and high-end segments. These are be treated. Every individual in the firm must the new properties in St. James Place and in be treated with the same dignity and respect, Tennessee Avenue. To be able to reach new regardless of their position. markets, Ferrari will continue to enhance its Decisions are made by consensus; it takes a leisure developments. little more time but it works. Opinions must be The opening of these properties should see grounded in logic and fact. All opinions are stronger contributions for the next years and considered equally. Ferrari is living proof that beyond. We will continue to deliver it is indeed quite achievable. shareholder value through the acceleration of The bottom line is that we are a uniquely growth of our businesses and diversification entrepreneurial company. We own and/or in more high-value-added endeavors but with manage rental apartments assisted living the fiscal discipline to ensure that your money facilities. is well spent. Our growth is based upon trust. Because we Our portfolio approach is also about people have no ownership in the properties we not just technology so we create custom recommend, our clients know that we always teams for each client.. At Ferrari, we believe present the best real estate opportunity in the personal approach. Taking the time to available. With Ferrari, there is no conflict of know our clients and understand their interest; what is best for you is our only business is critical to helping them achieve interest. Nothing excites us more than to their goals, and ours. provide the platform for an individual to Ferrari Companys management and staff will blossom in the career of his or her choosing. continue to work together as a team. The Company remains financially prudent but at the same time ready to take advantage of opportunities when they arise. Outlook for the Next Years Ferrari's beginning was humble, indeed. Two rusty file cabinets holding an unpainted, . Ty M. Bollinger CEO

Ferrari Real Estate Company

Year 4 Annual Report

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Progression is our Current Destination.

Ferrari have a solid decision making philosophy, and we hold each of our business lines to high standards of achievement. But those factors alone do not account for what we have become; there are numerous companies with humble origins that ultimately flourish, in most cases through the addition of outside equity capital. But, Ferrari has a unique culture for growth; not only revenue growth, but also individual growth. In assessing the potential of each property, it is clear that a majority of the companys value lies in a handful of assets. Accordingly, our team is sharply focused on maximizing the potential value of these key assets while monitoring opportunities to selectively monetize those less impactful assets at appropriate timing and pricing. We have successfully reached our goals to build our properties efficiently in the orange monopoly. We recognize that we will never be able to fully predict what might go wrong or when another increase in rentals might strike. We also recognize that diversification is important. Our asset base lacks geographical diversity, but concentrated in one of the most desirable markets. Still, this location of our asset class affords us valuable flexibility to focus on those market and product specific opportunities that make sense at any given time in an economic cycle. In the following pages, we have thoroughly discussed the financial condition and performance of our company. This is to let our shareholders be a part of our progression. We undertake an in-depth analysis of our strengths and weaknesses, as well as the external factors which we can not control. Nevertheless, Ferrari continues to be one of the strongest real estate company for registering persistent higher income. The Ferrari Company is synonymous with the relentless pursuit of achievement. We are inspired by that legacy and are systematically and strategically positioning our portfolio. While we are at the start of a long journey together, we look forward to continuing to earn your trust as we confront the many challenges ahead. Progression is our Destination.

Angelie De Ramos President

Ferrari Real Estate Company

Year 4 Annual Report

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9000 8000 7000 6000 5000 4000 3000 2000 1000 0 Year1 Year 2

Financial Position

Assets Equity Liability

Year 3

Year 4

Financial Performance 10000

9000 8000 7000 6000 5000 4000 3000
Net Income Expenses Revenue

Revenue Breakdown

Rental Revenue Salary Revenue Dividend Revenue Miscellaneous

Expense Breakdown

Rent Expense

2000 1000 0 Year 1 Year 2 Year 3 Year 4

Miscellaneous Depreciation Tax expense

Ferrari Real Estate Company

Year 4 Annual Report

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Management Discussion and Analysis

Results of Operation
Total revenue attributable to the operations and rentals of the Ferrari Company stood at M 4,254 representing a 94% increase over the previous year, given improved market conditions in the local economy and the development of our real estates. Total Group revenues consisting of net interest income, other operating income, and dividend income reached M 4,943 or 76% higher than the M 2806 registered in year 3. Other operating income comprised income from salaries, dividend income and miscellaneous income increased by 12% to M 689 from last years M 614. Total operating expenses of the Group grew by 272% to M 2892 from M 778, mainly driven by the M 1,934 increase in the rent expense. The material components of total operating expenses are rent expenses and depreciation expenses which accounted for a 287% increase and 29% increase respectively. Miscellaneous expenses are incurred this year, amounting to M 150. Provision for income tax for year three was corrected; income tax accrued was overstated by M 631.2. Effective income tax rate of the Group was at 30% above M 2000 with an additional fixed tax expense of M 300 Thus, the company incurred a tax expense of M 315.3 for year four. Given the improvement in net profits for the year, Return on Average Equity was 31%; return on Average Assets was at 26%. For the year 4, Ferrari paid the amount of total cash dividends of M100 declared in Year 3.

Financial Condition
The Ferrari Company closed the third year with total assets of M 8,274.20 or 56% higher than the figure reported in the third year. The growth was driven by the M 2700 increase in receivables and the development of productive properties in the orange monopoly. At year-end, cash on hand stood at M 970.2. The decrease in the cash balance of the company was due to the increased rental payments to other companies. With the continued push for profitable investments, M 400 cash was invested in equity securities to earn returns. Receivables recorded a total of M 4,200. This was mainly driven by the strong demand in the orange group monopoly. The consumer book, in which Hat Spring and Titanic Company has been our avid customers, was bolstered by steady demand across the housing and other real estate plans. Capital rose by 19% due to an investment of M 440 from other companies. This proves that more companies invested this year compared to last year.

Discussion & Analysis

Ferrari Real Estate Company

Year 4 Annual Report

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Financial Statements
Financial Position

Ferrari Company
Statement of Financial Position
As of Game Year-Ended Month 13, Year 4 Assets Cash on Hand Receivables 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 2,791.00 4,267.90 7,058.90 M 8,274.20 2,351.00 1,901.00 4,252.00 M 5,291.60 M 1,920.00 912.60 1,500.00 523.80 4 M 1,215.30 1,215.30 M 1,039.60 1,039.60 M 43.20 M 43.20 58.20 58.20 2 3 Note M Year 4 970.20 Year 3 M 1,139.60 1,514.00 1,838.00 800.00 M 5,291.60 M M Year 2 Year 1

1,133.80 M 1,162.00 0 1,342.00 400.00 0 920.00 0

4,200.00
1,904.00 1,200.00 M 8,274.20

2,875.80 M 2,082.00

Total Equity
Total Liabilities and Equity

2,832.60 2,023.80 2,875.80 M 2,082.00

Ferrari Real Estate Company

Year 4 Annual Report

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Financial Statements
Financial Performance

Ferrari Company
Statement of Financial Performance
For the Game Year-Ended Month 13, Year 4

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

Year 4 M 4,254.00 600.00 75.00 14.00 M 4,943.00

Year 3 M 2,192.00 600.00 0 14.00 M 2,806.00 M M

Year 2 26.00 600.00 130.00 756.00 M M

Year 1 100.00 600.00 30.00 730.00

M 2,608.00 150.00 134.00 M 2,892.00 M 2,051.00 315.30 M 1,735.70

674.00 0 104.00

156.00 150.00 18.00 324.00

148.00 0 0 148.00

778.00 M M 939.60

M 2,028.00 M 1,088.40

432.00 43.20 388.80

M M

582.00 58.20 523.80

Ferrari Real Estate Company

Year 4 Annual Report

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Financial Statements
Shareholders Equity

Ferrari Company
Statement of Changes in Shareholders Equity
For the Game Year-Ended Month 13, Year 4 Note Contributed capital, start of turn 1 Additional Contributed Capital Contributed capital, turn 13 5 Year 4 M 2,351.00 440.00 M 2,791.00 1,901.00 631.20 2,532.20 1,735.70 0 M 4,267.90 M 7,058.90 Year 3 M 1,920.00 M 431.00 M 2,351.00 912.60 Year 2 1,500.00 420.00 1,920.00 523.80 Year 1 M 1,500.00 0 1,500.00 523.80

Retained Earnings, turn 1 Correction of Error prior year accrued expenses overstatement 6 Corrected beginning balance Net Income Dividend Declared Retained Earnings, turn 13 Balances, turn 13

1,088.40 (100.00) 1,901.00 M 4,252.00 M

388.80 0 912.60 2,832.60 M

0 0 523.80 2,023.80

Ferrari Real Estate Company

Year 4 Annual Report

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Financial Statements
Cash Flows

Ferrari Company
Statement of Cash Flows
For the Game Year-Ended Month 13, Year 4 Cash flow from Operating Activities Received from Passing Go Received from Rentals Received from investment securities 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 Paid for Dividends Net Cash flows provided by Financing Activities Net Change in Cash for the Year Beginning Cash Ending Cash Year 4 M 600.00 1,554.00 28.00 75.00 (1708.00) (150.00) (308.40) M 90.60 Year 3 M 600.00 692.00 0 0 (674.00) 0 (43.20) M 574.80 Year 2 600.00 26.00 0 130.00 (156.00) (150.00) (58.20) 391.80 (220.00) 80.00 (400.00) (300.00) (840.00) 420.00 0 420.00 (28.20) 1,162.00 1,133.80 Year 1 M 600.00 100.00 0 30.00 (148.00) 0 0 M 582.00 (920.00) 0 0 0 (920.00) 0 0 0 (338.00) 1,500.00 1,162.00

0 0 (400.00) (200.00) M (600.00) 440.00 (100.00) M 340.00 (169.40) 1,139.60 M 970.20

0 0 (400.00) (600.00) M (1,000.00) 431.00 0 M 431.00 5.80 1,133.80 M 1,139.60