Toto S.p.A. Costruzioni Generali

TOTO S.P.A. COSTRUZIONI GENERALI(Translation from the Italian original which remains the definitive version)TOTO S.P.A. COSTRUZIONI GENERALIJoint-stock company with sole shareholder managed and coordinated by Toto Holding S.p.A.Registered office in Viale Abruzzo 410 - 66013 Chieti Scalo (CH)Share capital € 50,000,000.00 fully paid-upDirectors' Report on the financial statements as of 31/12/2011Directors’ Report to the financial statements as of 31/12/2011 Page 1

TOTO S.P.A. COSTRUZIONI GENERALIBOARD OF DIRECTORSServing until the approval of the 2011 financial statementsAlfonso TOTO, Chairman and Managing DirectorPaolo TOTO, DirectorValentina TOTO, DirectorBOARD OF STATUTORY AUDITORSServing until the approval of the 2011 financial statementsGiovanni SMARGASSI, ChairmanFrancesco CANCELLI, Standing auditorVito RAMUNDO, Standing auditorLucio RAIMONDI, Alternate auditorGiovanni D'AQUINO, Alternate auditorAUDITING FIRMKPMG S.p.A.Directors’ Report to the financial statements as of 31/12/2011 Page 2

TOTO S.P.A. COSTRUZIONI GENERALIDear Shareholders,2011 saw the completion of the process of restructuring the group, which was aimed atcreating the new corporate structure with a parent industrial holding company calledTOTO Holding, which controls the operating companies in the various business sectors.Following the transfer by the parent TOTO Holding of "Ramo Costruzioni Toto" (TotoConstruction Branch), comprising all the assets, movables and immovables, investmentsin subsidiary, affiliated and other companies, liabilities and legal relations pertaining to thetransferred branch including its employees, their employee severance indemnities andother accounting entries, your company became operational on 1 November 2011.In the meeting held on 23 March 2012 the Board of Directors resolved, in accordancewith art. 2342, third paragraph of the Italian Civil Code (hereinafter C.C.) to approve theevaluations contained in the sworn evaluation report on "Ramo Costruzioni Toto" drawnup by certified accountant Paolo Palumbo and certified on 17 June 2011, theshareholders' equity being valued at € 70,579,616 on the date on which the transfer tookeffect (1 November 2011).The year ended 31 December 2011, which for business activities only relates to twomonths (November and December), concluded positively.Net profit stood at € 556,468 after amortisation of intangible fixed assets and depreciationof tangible fixed assets for € 1,804,199 and current taxes totalling € 933,076.Operating conditions and business developmentYour company operates in the large infrastructure construction sector and is among thetop 30 general building companies in Italy, and the leading one in Abruzzo. Its mainbusiness involves the construction of large transport infrastructure.The company's target market is the domestic one, for which TOTO carries out projects forthe main public and private clients, such as ANAS, Autostrade per l'Italia, Strada deiParchi S.p.A. and other organisations.Operating performanceGeneral conditionsAfter a promising start to the year, the second part of 2011 saw a steady deteriorationof the macroeconomic situation, as a result of both strong tension on the sovereigndebt markets and the signs of slowdowns from emerging countries.The latest figures from the national accounts unfortunately confirmed a further decline ininvestments by businesses and the persisting weakness of private consumption. Afteronly 2 years, Italy has once again entered an awkward recessive period. Thesituation which is taking shape is proving very worrying since it falls within a contextalready deeply marked by over three years of crisis, which resulted in a painful cullingof businesses, a reduction in production and subsequent weakening of the labour market.After Greece's default, Italy and Spain are now under close observation. Even if officialsources categorically exclude the possibility of a request for EU aid the markets no longershowed themselves certain that Spain would exit the crisis with its own means alone,hence the strong volatility of the indices of the European stock exchanges. Italy'smacroeconomic environment is clearly no more bright; according to estimated, 2012 willend with a GDP dropping by 1.2%, a debt/GDP ratio up to 123.4% and unemployment at9.3%. These figures would only be able to improve from 2013.Directors’ Report to the financial statements as of 31/12/2011 Page 3

TOTO S.P.A. COSTRUZIONI GENERALIHowever, the recovery of more adequate levels of confidence in our country and the firminvolvement of the European Central Bank, which has ensured unlimited availability offunds for the European banking system, could help bring the crisis under control in arelatively shorter time than expected.Target sectorThe crisis, which has affected the building sector since 2008, is anything but over. Thedrop in investments in construction in 2011 reached almost 6% and a further 4% isexpected for 2012. In five years – from 2008 to 2012 – the total loss in terms ofinvestments will be over 24%, returning to the levels of the mid-1990s. In the public workssector, the drop in investments will even be as high as 37%.During an economic phase where restrictive policies on state budgets have full priorityover initiatives aimed at promoting growth, it is clear that the sector such as Toto's isparticularly suffering.Growth targets currently be followed in project financing, both in joint ventures and instand alone operations, with equity investments in SPVs, to ensure the ability to act as anEPC Contractor in construction work.Our company has also identified two other substantial countermeasures which enable it tolook at the future in a positive light: The diversification of the client portfolio in Italy, nolonger limited to a single large client, and the creation of a sales team dedicated to foreignmarkets with the opening of a branch in the Emirates which will cover the Middle East inparticular.Order portfolioThe company has a substantial portfolio of orders ensuring continuity ofoperations over the next few years. This allows it to implement a selective vettingprocess for operating commitments in the various sectors of interest.On 31 December 2011 the order portfolio amounted to approximately € 519 million.YEAR-END ORDER PORTFOLIO1.000875800600702588655519400200-2007 2008 2009 2010 2011Directors’ Report to the financial statements as of 31/12/2011 Page 4

The breakdown of the order book by client is as follows:TOTO S.P.A. COSTRUZIONI GENERALIClient Current clients %Autostrade per L'Italia 258.545 50%Strada dei Parchi 246.562 47%Foreign clients 10.670 2%Other Organisations 3.419 1%TOTAL 519.196 100%On the date this report was prepared the company's order portfolio amounted to €812 million following the awarding of the following additional jobs:- ANAS S.p.A. contract for the construction of the new Col di Tenda tunnel and additionalworks (Italy - France border), overall value of the work € 118 million with a 35%percentage of investment equal to € 41.3 million.- ITALFERR S.p.A. contract – Executive design and execution of works for theconstruction of the new railway office and the doubling of the Cefalù Ogliastrillo -Castelbuono stretch of the Palermo-Messina line, overall amount of the work € 339million with an ownership share of 74.11% amounting to € 251.2 millionDevelopments during the periodAs mentioned in the introduction, your company only carried out business activities inNovember and December 2011.For further details, the reclassified profit and loss account is provided below, solely for theOperating Profit of the Construction Unit, considering the twelve months of business asthe aggregate of Toto Holding (10 months) and Toto S.p.A. Costruzioni Generali (2months) and compared with that of the previous year.31/12/2011 31/12/2010 ChangeNet revenues 245.428.957 156.326.287 89.102.670External costs 181.149.971 105.083.082 76.066.889Added Value 64.278.986 51.243.205 13.035.781Cost of labour 41.800.053 39.598.630 2.201.423Gross Operating Margin (EBITDA) 22.478.933 11.644.575 10.834.358Amort./ deprec., write-downs and other 8.940.571 5.508.037 3.432.534provisionsOther income 1.696.091 378.398 1.317.693Operating Profit (EBIT) 15.234.453 6.514.936 8.719.517Upon analysing the profit and loss account we can see that EBITDA in 2011 increased byapproximately € 10.8 million from 2010 while it accounted for 9.2% of income comparedto 7.4% in the previous year.EBIT also recorded an increase in absolute terms of € 8.7 million and in percentage termsof 6.2% compared to the 4.2% in the previous year.Directors’ Report to the financial statements as of 31/12/2011 Page 5

TOTO S.P.A. COSTRUZIONI GENERALIRevenuesNet revenue (€ 245 million) recorded an increase of € 89.1 million (+ 57%) from theprevious year (€ 156.3 million).The increase in revenues is primarily due to the production attained in executing the“Complanari” (slip roads) contract, assigned internally by Strada dei Parchi, companycontrolled by Toto Holding S.p.A., and the contract “Eboli photovoltaic park”.The “Complanari” contract was officially delivered in March 2011and work progressed,immediately entering into full swing, all the so-called mobilisation and work site set-upwork having already been completed last year.Work was completed for the job "Campo fotovoltaico Eboli" in May 2011 and the "field"was handed over to the client Monteboli S.p.A..The profit and loss account item is broken down as follows:Description 31/12/2011 31/12/2010 ChangeRevenues from sales and services 200.139.812 160.643.594 39.496.218Changes in work in progress to order 36.048.837 (7.601.623) 43.650.460Total revenues from sales and services 236.188.649 153.041.971 83.146.678Increase in own work capitalised 9.240.308 3.284.315 5.955.993Other revenues and income 1.696.091 378.398 1.317.693Value of production 247.125.048 156.704.684 90.420.364Value of production300200206176161 157247100-2007 2008 2009 2010 2011The revenues from core business in 2011 are broken down as follows:Client %Strada dei Parchi S.p.A. 51.436.969 22%Autostrade per l'Italia S.p.A. 114.936.969 49%Monteboli S.p.A. 62.565.645 26%Other 7.249.066 3%Total revenues 236.188.649 100%Directors’ Report to the financial statements as of 31/12/2011 Page 6

TOTO S.P.A. COSTRUZIONI GENERALIIt should also be pointed out that the progress of work under the two important contractsbeing carried out on behalf of Autostrade per l’Italia as part of the project to modernisethe so-called Variante di Valico (lot 13 and lot 6/7) was hindered by external problems.Work on the lot 13 contract was partially suspended by the client in June 2011, followingan investigation started by the Florence Public Prosecutor's Office. The purpose of theinvestigation is to establish whether or not debris from the excavations of the tunnels forthe project can be used, as requested by the client. This situation has partially blockedthe completion of work, namely on the tunnels and road embankments.Work under the lot 6/7 contract progressed as regards the construction work on the twomixed steel-concrete viaducts and the work on the Sparvo tunnel. With regards to thelatter, during the period all work on the entrance to the two tunnels was completed, aswas the transport and assembly of the TBM used to dig the 5 km of tunnel. Digging beganin August 2011 after the assembly of the machine was completed, which lasted around 6months. Alongside assembling the TBM, work was finished on creating and bringing theashlar prefabrication system into operation, which will be used for constructing the Sparvotunnel. Work on the Val di Sambro tunnel continued throughout the period at a slowerpace than the original work schedule, with increased costs sustained by the contractorwhich were promptly claimed back from the client. The problems identified are typical oftunnel work, i.e. so-called unforeseen geological events. This means that the operatingconditions for the dig changed as a result of a change in the morphology of the terrainthrough which the tunnel passes. The geological and stability conditions of the terrainthrough which the tunnel would run, which are substantially worse than those forecastand used for the design, resulted in productivity of the works in the tunnel amounting toaround one-third of what was forecast with average progress of around 30 lm per monthinstead of the 100 lm per month forecast in the contract schedule. Because of thisnegotiations were started with the client Autostrade per l'Italia to establish a new contractstructure with prices and time scales in line with the altered project conditions to allow thework to be completed according to a new programme.Cost of productionThe main operating costs are shown below:Description 31/12/2011 31/12/2010 ChangeRaw material costs 81.079.616 26.944.213 54.135.403Service costs 94.754.942 70.384.289 24.370.653Sub-total raw materials andservices 175.834.558 97.328.501 78.506.056Personnel costs 41.800.053 39.598.630 2.201.423Hire and leases 6.580.669 5.803.194 777.475Raw material costs saw an increase from 31 December 2010 of € 54,135,403, primarilyaccounted for by the purchase during the period of photovoltaic panels for around € 40million for the Eboli job, while the other costs underwent changes in line with the increasein production.Personnel costs show an increase of approximately € 2.2 million (+ 5.5%) from theprevious year.The increase can be attributed to the greater number of hours worked during 2011(808,481 against 743,633 in 2010).OperationsIn accordance with art. 2428 it is reported that the business is carried out at the Chietioffice and in the Rome office, in addition to in the other sub-offices set up at the mainwork sites in operation in the municipalities of Castiglione dei Pepoli (Bologna), Barberinodi Mugello (Florence), Rome, Manoppello (Pescara), Eboli (Salerno) and Chieti Scalo(Chieti) and in the other minor work sites considered as business units.Directors’ Report to the financial statements as of 31/12/2011 Page 7

TOTO S.P.A. COSTRUZIONI GENERALI2011 production amounts to approximately € 53.7 million, totalling € 123.5 million as of 31December 2011, equal to approximately 36% of the entire contractual amount.Also contributing to revenue was the receipt of the first of the four tranches of the speedupbonus negotiated with the client, having met the milestone of completing thenorthbound road of the Molino di Setta Viaduct and Frana Retaining wall.During the year the TBM used for digging the Sparvo Tunnel was transported to the worksite, set up and started. Logistical activities, which involved a substantial deployment ofresources, were concluded in March.In June 2011 assembly of the TB was completed and excavation work was initiativesfollowing testing.In the March to June period the system was set up for prefabricating the concrete ashlarswhich will be used for the definitive facing of the Sparvo tunnel. The system - started inmid-June with the first tests - came into full operating capacity over the course of a fewmonths.During the first half of 2011 the preliminary work for starting the TBM on the North Lanewas completed. The change of the type of excavation - from traditional to mechanised -also required the Scarvo tunnel entrances to be changed, which made it necessary toexcavate around 40lm of natural tunnel on the northbound carriagewayAfter finishing placings the rings of the artificial tunnel, in August the TBM began on theactual excavation of the tunnel. Despite the burdensome halt which took place in the lastquarter of the year due to the breakage of the bearing seals and went on for 60 days, atthe end of the year 139 rings were placed and around 280 metres of the tunnel wasconstructed.At the end of the year the prefabrication system attained the production of 338 rings,thereby saturating the storage capacity of the work site.Again in the first half of the year, following the delivery of the former Todini areas, whichwere necessary for gathering material excavated by the TBM, the characterisation tankswere completed which would store the spoil material (material removed from theexcavations) from the TBM.The motorway toll lanes and the conveyor was placed up to Deposit Area no. 5.It should be noted that right from the start of the Val di Sambro Tunnel excavation work,the terrain through which the tunnel will eventually run has always shown worsegeometrical characteristics than that forecast during the detailed design. In fact, it wasfound that the rock, classified as a “dormant landslide” in the Regional Geographical Mapand in the project, was instead affected by “active” landslide movement and as suchnotice was given to the Client. As a result, from 2010 Construction Managementdemanded several amendments to the project, ordering precise changes for constructingthe so-called final lining.This aspect had a negative impact on forecast production, actually reducing it to around35 lm/month for each carriageway. Because of the landslide movement, the final lininghas always been performed in close temporal and spatial sequence to work process,strongly limiting excavation, so much so that at the end of the year a total – Nord andSouth Lane – of around 1,100 lm of tunnel was excavated.From the last few months of 2010 the Val di Sambro Tunnel was given big coverage bythe mass media since during the work between the Bologna side entrances and the point6+602,323 Km, which was assigned to another contractor (while our section is theremaining part of the tunnel between the Florence side entrances and the aforesaidpoint), various buildings in the frazione ((territorial division of the municipality) of RipoliSanta Maria Maddalena in the municipality of San Benedetto Val di Sambro wereDirectors’ Report to the financial statements as of 31/12/2011 Page 9

TOTO S.P.A. COSTRUZIONI GENERALIseverely damaged: The hamlet is situated on the vertical side of the Bologna side tunneland while digging the section which passes under the frazione several buildings weredamaged.A committee consisting of citizens from the local frazione was set up, which raised theproblem to the mass media and authorities.Having learnt of this damage from the press and in line of the doubts raised by our jointventure regarding possible future damage to the tunnel as a result of the landslidemovement, Assitalia, the insurance company of our joint venture, sent a letter dated 1December 2011 communicating its decision to temporarily suspend - solely in relation tothe Val di Sambro tunnel - the insurance cover provided by the CAR (Contractor's AllRisks) policy issued for the tender contract assigned to our joint venture and stated that itbe ready to reactivate the cover and the respective conditions only after clarifying thepossible effects of the landslide movement on the tunnel with PROTOS S.p.A., its trustedconsultant.Since the insurance cover is required by law and the contract, our joint venture wasforced to suspend work solely on the tunnel in question and with effect from 19 December2011 after notifying the Client and making the works safe.After the first inspections and checks were performed by its consultant Protos S.p.A.,Assitalia then notified ATI that it was willing to reactive the insurance cover provided theinsurance cover was reduced.On 31 January 2012 ATI contacted ASPI explaining how the policy changes imposed byAssitalia violated certain specific conditions of the tender contract in terms of therequirements and contents of the CAR policy and therefore asked for instructions, notbeing able to accept the changes to the CAR policy which were conflicting with theconditions of the tender contract.On 13.3.2012 ASPI informed the joint venture that it was willing to meet the costsresulting from the changes imposed by Assitalia and that it would relieve the joint venturefrom any responsibility in the event of damages to the works and/or to third parties due toany landslides concerning the Val di Sambro tunnel provided that construction work wasresumed. Following this communication the insurance cover was reactivated andpreparation work is currently under way to resume work on the Val di Sambro tunnel,which is expected to resume in the first few days of next May.For several months our joint venture has been informing the Client of the need for theadoption of a variance appraisal and for a new project to be prepared in line with thecurrent details and situation (and which also takes into account the longer time requiredfor the work as a result) in order to head off any risk of the work not being able tocontinue due to the clear shortcomings in the project, which was acknowledged by theClient, which began the necessary studies and valuations. On 2 April the survey wassubmitted to the Client which, after acknowledging it, started the relevant preliminaryinvestigation. It should also be noted that our Joint venture had requested the Client togrant it an extension of the contractual period, which was necessary due to the significantproblems preventing the work from being carried out and that proceedings should bestarted for an amicable settlement for the valuating the claims made, in accordance withart. 240 of Italian Leg. Dec. 163/2006.It is believed that by next May meetings and discussions will have begun with the Clientfor establishing the variance appraisal and drawing up a formal release from responsibilitysigned by both parties. The amicable settlement procedure will also be started forvaluating the claims.As far as outside works and in particular the Molino di Setta are concerned, during thecourse of the year work the two roads were completed, giving precedence to thenorthbound one which is fundamental for the transfer of parts of the TBM.Directors’ Report to the financial statements as of 31/12/2011 Page 10

TOTO S.P.A. COSTRUZIONI GENERALIIn April, foundations work on the Sparvo Viaduct were completed and by the end of theyear the various parts of both metal decks – both in the North Lane and in the South one– were completed and work was begun on putting the finishing touches to the viaduct.In 2011 the first stage of the Earth Movement work was completed for the transport andstorage of the prefabricated ashlars and the installation of the spoil conveyor to be usedby the TBM.In September the excavation materials from both tunnels were transferred to DepositArea 5. The transportation, which reached 65,000 mc, led to significant maintenance workhaving to be carried out on the work site and ordinary roads.A/24 - A/25 Motorway - Sundry maintenance workClient: Strada dei Parchi S.p.A.Description: Ordinary and extraordinary maintenance workProgressive contractual amount: €.75.837.448Contracting company: Toto S.p.A.Production in 2011 amounted to € 7.5 million.The ordinary and extraordinary maintenance work on the two A/24 and A/25 motorwaysections will continue over the next few years.A/24 - A/25 Motorway - Traffic barriers - lot 1Client: Strada dei Parchi S.p.A.Description: replacement of the traffic barriers on the A24 from Teramo to Aquila Ovestand the A25 from Avezzano to the junction with the A14 - Lot 1 .Contractual amount: €.40.573.050Contracting company: Joint venture Toto S.p.A. – IMC SrlPercentage of investment: 19,36%Percentage of work: 100%The tender involves the redevelopment of the traffic divider and the replacement of thesafety barriers.Production in 2011 amounted to approximately € 2 million. 99% of the work had beencompleted as of 31 December 2011.On 31 December 2011 the following were installed overall:- Approximately 118,850 metres of single-wire New Jersey H3 guardrails.- Approximately 41,750 metres of New Jersey H4 bridge guardrails..An act of submission to the main contract was signed with the Contracting Body for theperformance of further work to replace barriers for a total of about € 932,413.A/24 - A/25 Motorway - Traffic barriers - lot 2Client: Strada dei Parchi S.p.A.Description: replacement of the side barriers of the A24 from Teramo to Aquila Ovest andthe A25 from Avezzano to the A14 Section 1 connection.Contractual amount: €.35.729.865.Contracting company: Toto S.p.A.The work begun in 2007 relate to the replacement of the side safety barriers both onembankments and on structures.Production attained in 2011 amounted to € 0.2 million.The project involves the replacement of the metal barriers along the A24 / A25 sections.More specifically, the barriers fixed into the grounder were replaced with the new H2Directors’ Report to the financial statements as of 31/12/2011 Page 11

TOTO S.P.A. COSTRUZIONI GENERALItriple-wave barrier, while new H3 or H4 barriers were installed on the viaducts dependingon theThe following were replaced and/or installed overall:172,151 metres of H2 guardrails fixed to the ground.- 32,843 metres of H3 bridge guardrails.- 51,922 metres of H4 bridge guardrails.An act of submission to the main contract was signed with the Contracting Body for theperformance of further work to replace barriers for a total of about € 850 thousand.In many cases the barriers on the overpasses were replaced after the surface of thekerbs is rebuilt in areas where the concrete is clearly deteriorated.Chieti - Pescara Multimodal Freight Terminal - Extension workClient: Intermodale Srl – SPVDescription: Extension of the Chieti - Pescara multimodal freight terminal and externalworks to connect to the main road systemContractual amount: €.58.902.108Contracting companies: Joint venture Di Vincenzo Dino S.p.A. - Toto S.p.A.Percentage of work: 49,90%The project provides for the completion of the Val di Pescara intermodal freight terminal inthe municipality of Manoppello (PE), financed using private (Private SDP) and publicresources (Public SDP).The project provides for the construction of structures for use as warehouses(approximately 56,000 square metres), deposit yards (roughly 150,000 square metres),office spaces (around 2,500 square metres) and internal roadways along with thoseconnecting to the A/25 motorway, covering approximately 2 km.In April 2011 the areas needed for the work on the Manoppello intersection on the A25were handed over (initial value of work approximately € 8,068,000), as a result therequirements imposed by current law on public works. Before the work was started, it wasnecessary to amend the project by stipulating a variance appraisal.Production in 2011 amounted to approximately € 6,284,000.The missing work amounting to approximately € 7,000,000 (€ 400,000 of which alreadyproduced in January and February) will be completed by 2012.A24/25 Motorway - Design and performance of work to build the Roma Est sliproadsClient: Strada dei Parchi S.p.A.Description: Creation of an A24 Motorway slip road system from the Portonaccio junctionto Roma Est station. Executive design and worksContractual amount: €. 198.076.648,24Contracting company: Toto S.p.A.The contract awarded by the operator Strada dei Parchi S.p.A. involves the executivedesign and construction of the urban section of the A24/A25 motorway, from thePortonaccio intersection to Roma Est station.In addition to extending for over 14 km botheastwards and westwards, the project also boasts several new facilities (28 in total),which include the new intersection on the Grande Raccordo Anulare (“great ring road”),two new steel viaducts to overpass the Aniene river and the new via di Salone flyover.The handover of the works took place on 02/05/2011; at the same as the construction siteset-up stage, the company began prefabricating the prestressed reinforced concretegirders and the prefabricated walls at the industrial field areas, created specifically for thepurpose, where the certified concrete production system was also installed.Directors’ Report to the financial statements as of 31/12/2011 Page 12

TOTO S.P.A. COSTRUZIONI GENERALIThe main activities carried out in 2011 included: Substantial completion of the restoration of the existing roads on the sectionbetween the Pittaluga tunnel and the via Palmiro Togliatti intersection (betterknown as Zero lot). The construction of temporary structures, micropile bulkheads, jet groutingtension rods and large-diameter poles, as protection for the existing motorwayand for the construction of major and minor structures. The construction of the foundation piles for the main viaducts (Lunghezzina,Dell’Osa, Montegiardino, Aniene 2, Rampa E G.R.A. and La Rustica) The construction of foundation and elevation works for the Lunghezzina,Dell’Osa, Rampa E G.R.A. and La Rustica viaducts. The construction of minor structures for the S03, S01 and S04 underpasses andthe manholes. The movement of road box materials and materials needed for constructing thecellular walls and reinforced earth walls. The supply of steel structures for constructing the decks and pier caps. The construction of safety and sound barriers and the execution of both verticaland horizontal road signposting for the "Zero section" in particular.The recorded production, including charges for safety, for 2011 was around € 37,6million, while the progressive total from the beginning of the work (2010 and 2011)amounts to € 40.3 million. Total progress of the work under the contract is approximately20.5%.A24/25 Motorway – Execution of landmine clearances – Roma Est Slip RoadClient: Strada dei Parchi S.p.A.Description: Landmine clearance service – Preliminary work as part of the construction ofslip roads to the A24 Motorway from Via Palmiro Togliatti to the Roma Est station.Contractual amount: €. 766,026,00Contracting company: Toto S.p.A.In 2011 no progress on the landmine clearance work was made, pending the availabilityof the remaining areas to be cleared, which are currently not able to entered. Totalprogress therefore remained unchanged at 71%.Motorway A24/A25—Archaeological surveys and interference resolution - RomaEst slip roadsClient: Strada dei Parchi S.p.A.Description: Archaeological surveys and interference resolution – Preliminary work aspart of the construction of slip roads to the A24 Motorway from Via Palmiro Togliatti to theRoma Est station.Contractual amount: €. 8,023,941Contracting company: Toto S.p.A.The archaeological investigation and inference resolution work are part of the preliminaryactivities carried out by the operator Strada dei Parchi S.p.A.. The execution of thearchaeological surveys and the movement of the interferences were regulated by threesubsequent contractual agreements.Work was carried out by providing the operator Strada dei Parchi with the resourcesnecessary for the examination of the archaeological finds and to support interferenceresolution activities by the companies which own the infrastructure (distribution lines,electricity, telephone, water, etc.).In this respect, in 2011, production amounted to € 2.3 million, while total progress standsat € 7.0 million, equal to 88% of the work to be carried out.Thanks to the above archaeological surveys, in September 2010, the RomeArchaeological Department released all plot areas, except for two small areas called“Salone and “La Rustica”, which have already undergone in-depth investigations and forwhich the authorisation needed to be able to carry out the work is imminent.Directors’ Report to the financial statements as of 31/12/2011 Page 13

TOTO S.P.A. COSTRUZIONI GENERALIJOBS COMPLETED DURING THE YEARMonteboli S.p.A. - Photovoltaic parkClient: Monteboli S.p.A.Description: construction, management and maintenance of a 24 MW photovoltaic parkContractual amount: € 71.433.992Contracting company: Toto S.p.A.Percentage of work: 100%The job involved the construction of a 24 MW photovoltaic park on a piece of landsituated in the Municipality of Eboli.The photovoltaic field construction works, awarded by SPV Monteboli S.p.A., a groupcompany, were completed in May 2011.Production during the year amounted to approximately € 62.5 million.Developments during the periodBelow details are provided from the financial statements of Toto S.p.A. CostruzioniGenerali (only two months of operation) which are presented for approval. For the sake ofcompleteness, the figures from the previous year are provided but the comparison doesnot appear significant.Reclassified profit and loss account31/12/2011 31/12/2010Net revenues 39.697.828 0External costs 27.875.101 11.783Added Value 11.822.727 (11.783)Cost of labour 7.119.342 0Gross Operating Margin (EBITDA) 4.703.385 (11.783)Amort./ deprec., write-downs and other1.952.866 1.000provisionsOther income 207.919Operating Profit (EBIT) 2.958.438 (12.783)Financial income and charges (1.175.474) 2.065Operating Profit 1.782.964 (10.718)Value adjustments to financial assets 0 0Net extraordinary items (295.732) (52)Profit before taxes 1.487.232 (10.770)Income tax 930.764 0Net profit/loss 556.468 (10.770)Directors’ Report to the financial statements as of 31/12/2011 Page 14

TOTO S.P.A. COSTRUZIONI GENERALIFinancial positionThe breakdown of the company’s net financial position is shown below.31/12/2011 31/12/2010 ChangeBank deposits 18.751.771 2.420 18.749.351Cash-in-hand and cash equivalents 67.935 67.935Liquid funds and own shares 18.819.706 2.420 18.817.286Current financial assets 7.416.941 7.416.941Bank loans and overdrafts (due within 12months) 72.979.915 277 72.979.638Short-term portion of loans 2.903.463 2.903.462Short-term financial liabilities 75.883.378 277 75.883.100Net short-term financial position (49.646.731) 2.143 (49.648.873)Bank loans (due after 12 months) 18.673.319 18.673.319Long-term portion of loans 79.230.067 79.230.067Financial receivables from groupcompanies (8.510.304) (110.000) (8.400.304)Financial receivables from Others (11.011.723) (11.011.723)Net medium and long-term financialposition (78.381.359) 110.000 (78.491.359)Net financial position (128.028.090) 112.143 (128.140.232)The Net Financial Position as of 31 December 2011 amounted to approximately €128 m (€ 50 m of which short-term and 78 m m/l-term), shows a decrease from theprevious year of the same amount (€ 128 m), which can be fully attributed to the NetFinancial Position determined by the financial receivables and liabilities transferred.The breakdown of bank loans and overdrafts by type of credit line is as follows:DescriptionTotalOrdinary C/A 11.637.571"Contracts" advances account 57.316.138"Contracts" advances account 21.307.508Claims advances account 15.155.399Loans and financing 68.370.148Total bank loans and overdrafts 173.786.764The payment of increased fees requested (Claims), only 15 million of which were advancedout of a total of around 90, will have positive impact on the company’s financial equilibrium.Business developmentDue to the transfer of “Toto Construction Unit”, all the special requisites under art. 70 ofItalian Pres. Dec. 207 of 5 October 2010 were transferred to Toto S.p.A..The company has a public works qualification certification (SOA), issued byProtos S.p.A. S.p.A., applicable to various fields of work and with unlimitedamounts..The certificate issued on 7 November 2011 by the body is valid until 6 November 2014and includes 18 fields of work, 6 of which with unlimited amounts (4 for general work andDirectors’ Report to the financial statements as of 31/12/2011 Page 15

TOTO S.P.A. COSTRUZIONI GENERALI2 for specialist work).The company also has the Qualification Certification as General Contractor in class “I”.The certificate, issued on 12/03/2012, is valid for three years and will enable the companyto participate independently in tenders for amounts of up to € 350 million.The company constantly monitors the trend in the public tender market and itsengineering market is extremely experienced, enabling TOTO S.p.A. to systematicallyrenew its order portfolio.The following activities are scheduled for 2012:• Follow up of new motorway projects as a contractor for which the company hasalready submitted its pre-qualification application and is awaiting letters ofinvitation to bid, and participation in relevant tenders.• Development of feasibility studies for new initiatives in the motorway concessionssector with reference to specific geographical areas.• Implementation of strategic alliances with other market players in order toparticipate in tenders for large-value projects both in Italy and abroad.• Development of EPC Contractor activity for carrying out 'in-house' projects in thevarious sectors in which the group intends to gain access, such as the renewableenergy and road infrastructure sectors.The company will also continue to focus on the projects involving the sectors in which ithas been operating for years, being the construction of large-scale transportinfrastructure, by participating in tenders in Italy and abroad. With respect to thedevelopment of foreign markets and that of the Italian market, the commercial departmentwill be strengthened in order to reach the targets set out in the group’s developmentplans.On the date this report was drawn up, our company is awaiting news on the outcome ofthe following tenders for which it has submitted a bid:- TREVISO LOCAL HEALTH OFFICE – design, execution and management of the“Health City”, Treviso Hospital Centre, gross value of the contract approximately € 200million.- PROVINCE OF FLORENCE – Restructuration works for the restoration of check damson the Arno river, gross value of the contract approximately € 75 million.- REPUBLIC OF SERBIA – “Construction of Highway E 80” Construction of a tunnel,gross amount offered approximately € 55 million.Research and developmentQuality – Safety – EnvironmentDuring the year the company incurred no costs for research and development activities.Through the allocation of additional resources, in 2011 Toto S.p.A. determinedly pursuedthe consolidation and continuous improvement targets of the Quality, Environment andSafety Integrated Management System which, since 2011, has certificated by the TÜVRheinland Group, the largest and most authoritative certification body in the world, incompliance with the international standards of reference UNI EN ISO 9001:2008, UNI ENISO 14001:2004 and BS OHSAS 18001:2007.Directors’ Report to the financial statements as of 31/12/2011 Page 16

TOTO S.P.A. COSTRUZIONI GENERALIIn September ÷ October 2011, the TÜV Rhineland group carried out – at thecompany’s office and work sites – a periodic inspection for monitoring andchecking compliance with the reference standards and issued and approved thevalidity of the company’s certificates.Following the outcome of the audit carried out at the Eboli work site for the construction ofa 24 MW photovoltaic park, TOTO S.p.A. also obtained the extension of the ISO 9001certificate for the “Design and construction of energy production systems”.Toto S.p.A.’s Quality, Environment and Safety Integrated Management System consistsof all processes connected and related to the company’s core business and failling withinthe scope of the following: "Design and construction of civil engineering works andinfrastructure, such as tunnels, viaducts, bridges, motorways, roads, civil and industrialbuildings, energy production systems and complementary and specialised works such asspecial structural works, barriers and road protections".The continuous improvement of the Integrated Management System and themaintenance of the certificates are the result of Toto S.p.A.'s constant commitmenttowards achieving client satisfaction and quality constructions, environment protectionand the prevention of pollution, the safety and health protection of workers and theprevention of accidents and professional illnesses, compliance with current legislationand other requirements to which the company subscribes, the use of sector bestpractices and research for technological innovation and the continuous improvement ofservices and the company management system.In 2011 Toto S.p.A. also maintainedand/or obtained the FPC System (“Factory Production Control”) certification of the controlof factory production of ready-mixed concrete plants produced at the company installed atsites, and the CE marking on the girders, the walls, the so-called “predalles”, the latticebridge plate s manufactured at the prefabrication site of Lots 6 and 7.With regard to hygiene, health and safety issues, a training plan financed by FondoImpresa was launched which, through nationally recognised standards, in 2011 – andalso in 2012 - enabled the knowledge and skills necessary to ensure that each workercan effectively interpret and play the role of “agent/carrier of security”.Information on main subsidiary and affiliated companiesALITEC S.p.A.The company is the owner of an industrial complex located in Chieti Scalo, which hasbeen unused for many years and covers a total area of 165,000 m 2 , where ALITEC S.p.A.is involved in a project involving the construction of a multifunctional complex formanagement, commercial, residential (for students), cultural, entertainment and wellbeinguses.TOTO TADDEI SCARLIn 2011 "Toto S.p.A. in association with Taddei S.p.A. Scarl" set up between Toto S.p.A.(51%) and Taddei S.p.A. (49%) and ICS Toto Taddei, a Moldavian company, wereestablished, for construction work awarded to the two businesses by the Ministry ofTransport and Infrastructure of the Republic of Moldavia, for a total of approximately € 17million. As of 31 December 2011 production on our share of work under the contract was€ 0.8 million.Directors’ Report to the financial statements as of 31/12/2011 Page 17

TOTO S.P.A. COSTRUZIONI GENERALIInvestmentsIn the two months of business activity investments primarily involved machinery andequipment and immovable goods resulting from the need to gain suitable means andequipment for the jobs under way.Relations with subsidiary, affiliated, parent and other group companiesDuring the year the following transactions took place with group companies:Subsidiary CompaniesParentFinancialreceivablesTradereceivablesFinancialliabilitiesTradepayablesRevenuesTB Bitumi Srl in liquidation 55.281 112.341IMC Srl 57.300 3.993.263 89.655 2.000 89.656Bital Srl in liquidation 107.046 5.000Tecnofin Srl in liquidation 513.486Sasso Marconi Scarl in liquid. 1.351 4.777 15.000 2.777Pontecagnano Scarl in liquid. 5.145 1.487 1.010Vibo Scarl in liquidation 1.443 6.468 2.509 1.004Contursi Scarl in liquidation 517.499 5.660 555.852 999Vado Scarl in liquidation 1.612.613 4.690 1.082.656Interporto Scarl 58.125 473.966Toto spa in ass. with Taddei Sc 592.354 821.152 417.232 821.152Parchi Scarl 100.000 4.290.954 122.874 216.700 65.081Alitec Spa 4.551.250 965.501 30.454Total 4.813.577 8.214.481 4.020.003 3.663.638 681.386 981.679CostsAffiliated CompaniesParentFinancialreceivablesTradereceivablesFinancialliabilitiesTradepayablesRevenuesSan Benedetto Val di Sambro 20.000 12.083.715 2.700 23.454.335 4.302.858 7.144.949ScarlIntermodale Srl 6.357.284 432.065Arabona Scarl 359.178 2.978.784 50.432 676.300Novigal Scarl 5.322.640 2.484 4.556.139 1.337.742 1.337.742Total 20.000 24.122.817 5.184 30.989.258 6.123.097 9.158.991CostsParent CompaniesParentFinancialreceivablesTradereceivablesFinancialliabilitiesTradepayablesRevenuesToto Holding Spa 3.676.727 276.259 555.030 435.217 191.250 148.554Total 3.676.727 276.259 555.030 435.217 191.250 148.554CostsDirectors’ Report to the financial statements as of 31/12/2011 Page 18

TOTO S.P.A. COSTRUZIONI GENERALIOther group CompaniesParentFinancialreceivablesTradereceivablesFinancialliabilitiesTradepayablesRevenuesInfraengineering Srl 12.932 1.255.173 58.649 650.000Strada dei Parchi Spa 15.081.395 544.462 13.983.389Monteboli Spa 7.971.055 1.444.065 80.303 258.556Az. Aviagricola Abruzzese Srl 9.000 9.000Air One Executive Spa 5.800 156.264 5.800 155.234Rail One Spa 6.503 6.503Parchi Global Services Srl 9.600 240.526 9.600 165.526Renexia Spa 1.774 1.774Total 7.971.055 16.571.068 2.276.728 14.333.271 970.760CostsThese transactions, which do not include any atypical and/or unusual activities, aregoverned at normal market conditions.Further information on the activities of subsidiary and affiliated companies are shown inthe Explanatory Notes.Own shares and shares/holdings in parent companiesYour company does not possess nor has it possessed over the course of the year, eitherdirectly or indirectly, own shares or shares in parent companies.Organisational Model Italian Leg. Dec. 231/2001In November 2011, by resolution of the Board of Directors, the company adopted the"Organisation and Management Model" provided for by art. 6 of Italian Leg. Dec.231/2011 (available on the website www.totospa.it in the section Company - Otherdocuments).The Model is aimed at preventing specific offences (offences committed in relations withthe Public Authorities, offences involving counterfeit money in legal tender and in revenuestamps, company law offences, terrorist offences or crimes to subvert the democraticorder, crimes against life and individual safety, crimes against the individual market abuseand transnational offences, handling stolen goods, money laundering and the use ofmoney, goods or profit from criminal activities, worker safety offences, IT offences andillegal handling of data).The Model was also supplemented by the provisions of Italian Law 123/07 which extendthe responsibility of the company to culpable homicide crimes and grievous and verygrievous bodily harm, committed in breach of the regulations on accident prevention andworker health and safety and the New Consolidated Law on Health and Safety at Work -Italian Leg. Dec. 81/08.With the same Board resolution the "Code of Ethics" was adopted (available on thewebsite www.totospa.it in the section Company - Other documents), which expressed theundertakings and ethical responsibilities in conducting company affairs and activities bycollaborators of the company Toto S.p.A. and the companies it controls, whether theseare Employees, Collaborators or Directors.With the same Board resolution the Supervisory Body was also set up, consisting of threemembers with the skills and professionalism needed for filling their roles. Under art. 6 ofItalian Leg. Dec. 231/2001 and in order to ensure the effectiveness and constantimplementation of the Organisational Model and Ethical Code, the body has been vestedwith autonomous powers of initiative and control which should be exercised by thoseDirectors’ Report to the financial statements as of 31/12/2011 Page 19

TOTO S.P.A. COSTRUZIONI GENERALIfulfilling the requirements of autonomy and independence, professionalism, continuity ofaction and adequate spending powers.Significant events after the balance sheet dateIn the first quarter of 2011 the following significant events took place:Tenders wonThe company was awarded the call for tenders by ITALFERR, the engineering companyof the Italian state railway group "Gruppo Ferrovie dello Stato", for doubling the "Cefalu’ –Castelbuono” (Sicilia)" railway section. This is the biggest call of bids by the client in2011.The contract provides that the detailed design and construction work of the 12.3 kmCefalù (Ogliastrillo) - Castelbuono railway section, along the Palermo - Messinarailway line, and is an integral part of the Italian railway infrastructure modernisation anddevelopment programme.Toto S.p.A. is in joint venture with other companies with a share of 74.11%.The works, which has an estimated duration of 72 months, will see Toto S.p.A. involvedin constructing three tunnels which will concern almost all the new railway section:- The first, called “Cefalù”, 6,700 metres' long and double-arched, will be constructedusing mechanised digging technology, using two TBMs (Tunnel Boring Machines) eachwith a diameter of 9.9 metres.- The second, called “S. Ambrogio”, 4,300 metres' long, constructed using traditionaldigging techniques.- The third, called “Malpertugio”, 135 metres' long, also constructed traditionally.With a share of 35% in the joint venture set up with Grandi Lavori Fincosit S.p.A., thecompany also won the ANAS tender for construction work for doubling the Col di Tendafor a total bid of approximately € 117.5 million.The work arises from the need to resolve the age-old problem of the Col di Tenda passconstructed on the Italian-French border over the years 1873-1882.The particularly limited road section of the existing tunnel does not allow vehicles toovertake and traffic therefore flows on an alternating one-way basis and only at night areheavy vehicles allowed to pass.The project involves the construction of a second tunnel alongside the existing one with atotal length of over 3 km to be used for France-bound traffic and the section increase tobe used for Italy-bound traffic.The duration of the work is scheduled in the contract to take place over 6 years.Business outlook2012 is expected to see turnover in line with that achieved in 2011.Considering the size of the order book on 31 December 2011 amounting to € 519 millionin addition to the value of the orders awarded in 2012 amounting to € 292 million, it is notnecessary for the company to adopt an aggressive commercial strategy. During the yearinitiatives in which to participate in were carefully chosen so that only that with extraadded value was selected so as not to affect company profitability.From a commercial point of view, the objective during 2012 is to acquire new orders inorder to supplement the order book by an amount at least equal to the turnover of theyear with profitability no lower than that estimated in previous years and in line withmarket best practice.For 2012 it is believed that the quality of the orders acquired can also maintain operatingprofitability margins in line with market ones.Directors’ Report to the financial statements as of 31/12/2011 Page 20

TOTO S.P.A. COSTRUZIONI GENERALIInformation on risk management, financial instruments and guaranteesLiquidity riskThe two main factors which determine liquidity risk for Toto S.p.A. are, on the one hand,the management of funds generated or absorbed by operating and investment activitiesand, on the other, the characteristics of due dates and renewal of payables.The company constantly monitors cash flows, loan and liquidity requirements, managingthem with the aim of ensuring funds are managed effectively and efficiently.Exchange rate riskToto S.p.A. primarily operates in Italy: transactions are therefore for the most part ineuros. The euro is also the currency for external sources of financing to support anddevelop the company's industrial activities.The company’s financial performance is therefore not subject to market risk resulting fromexchange rate fluctuations.DerivativesThe company has three outstanding interest rate hedging contracts to cover a portion ofits bank debt.Further information is provided in the explanatory notes.Credit riskThe type of clients of the company are substantially companies with high credit ratings.Government and public bodies, solvent by nature, or companies belonging to the group.Credit risks, which means the exposure of the company to potential losses deriving fromnon-fulfilment by its clients of their obligations, should therefore be consideredinsignificant.Guarantees and suretiesFor information on guarantees and sureties, reference should be made to the section onmemorandum accounts in the explanatory notes.Allocation of the net profit for the yearWe propose that the shareholders' meeting allocate the profit as follows:net profit as of 31/12/2011 556.468,005% to the legal reserve 27.823,40to the extraordinary reserve 528.644,60We would like to thank you for your trust in us and invite you to approve the financialstatements as they are presented.Chieti, 27 April 2012Chairman of the Board of DirectorsAlfonso TotoDirectors’ Report to the financial statements as of 31/12/2011 Page 21

TOTO SPA COSTRUZIONI GENERALICompanies Register 02208250692REA (Economic Administrative Index) 160647TOTO SPA COSTRUZIONI GENERALIJoint-stock company with sole shareholder managed and coordinated by Toto Holding S.p.A.Registered office in VIALE ABRUZZO 410 - 66100 CHIETI (CH)Share capital Euro 50,000,000.00 fully paid-upFinancial statements as of 31/12/2011A) Subscribed capital unpaid 31/12/2011 31/12/2010(of which already called up )B) Fixed assetsI. Intangible fixed assets1) Start-up and expansion costs 13,000 2,0003) Industrial patents and intellectual property rights 112,1764) Concessions, licences, trademarks and similar rights 65,7177) Other intangible fixed assets 11,488,38611,679,279 2,000II. Tangible fixed assets1) Land and buildings 23,398,0042) Plant and machinery 64,240,7243) Industrial and commercial equipment 1,096,5624) Other tangible fixed assets 3,998,4385) Assets under construction and advance payments 380,86093,114,588III. Financial fixed assets1) Investments in:a) Subsidiary companies 43,015,066b) affiliated companies 4,048,812d) other companies 7,488,24654,552,1242) Receivablesa) from subsidiary companies- due within 12 months 4,813,5774,813,577b) from affiliated companies- due within 12 months 20,00020,000c) from parent companies- due within 12 months 3,676,727 110,0003,676,727 110,000d) from other companies- due within 12 months 11,011,72311,011,723- 19,522,027 110,000- 74,074,151 110,000Total fixed assets 178,868,018 112,000Financial statements as of 31/12/2011 Page 22

TOTO SPA COSTRUZIONI GENERALIC) Current assetsI. Inventories1) Raw/ancillary materials and consumables 9,344,3933) Work in progress to order 98,956,1425) Advance payments 6,207,395II. Receivables114,507,9301) from customers- due within 12 months 30,658,11330,658,1132) from subsidiary companies- due within 12 months 8,018,8658,018,8653) from affiliated companies- due within 12 months 24,122,81824,122,8184) from parent companies- due within 12 months 266,968 2,837266,968 2,8374-bis) Tax receivables- due within 12 months 996,100 849996,100 8494-ter) Prepaid taxes- due within 12 months 567,678567,6785) from others- due within 12 months 23,980,58523,980,58588,611,127 3,686III. Current financial assets1) Investments in subsidiary companies 626,7516) Other securities 6,790,1907,416,941IV. Cash at bank and in hand1) Bank and post-office deposits 18,751,771 2,4203) Cash in hand and cash equivalents 67,93518,819,706 2,420Total current assets 229,355,704 6,106D) Prepayments and accrued income- discounts on loans- miscellaneous 8,666,9638,666,963Total assets 416,890,685 118,106Financial statements as of 31/12/2011 Page 23

TOTO SPA COSTRUZIONI GENERALIBalance sheet - liabilities and shareholders' equity 31/12/2011 31/12/2010A) Shareholders' equityi. Share capital 50,000,000 120,000II. Share premium reserve 20,699,616VII. Other reservesEuro rounding difference 22VIII Net profit (loss) brought forward (15,364) (4,594)IX Net profit for the year 556,468IX Loss for the year (10,770)Total shareholders' equity 71,240,722 104,636B) Provisions for risks and charges3) Other provisions 4,308,103Total provisions for risks and charges 4,308,103C) Provisions for employee termination indemnities 1,407,493D) Payables4) Bank loans and overdrafts- due within 12 months 75,883,378 277- due after 12 months 97,903,3866) Advance payments- due within 12 months 3,600,0007) Trade payables173,786,7643,600,000- due within 12 months 90,670,808 10,5819) Amounts due to subsidiary companies- due within 12 months 7,688,23210) Amounts due to affiliated companies- due within 12 months 31,760,94311) Amounts due to parent companies27790,670,808 10,5817,688,23231,760,943- due within 12 months 903,247 2,61212) Tax payables- due within 12 months 12,829,972- due after 12 months 6,745,224903,247 2,61219,575,196Financial statements as of 31/12/2011 Page 24

TOTO SPA COSTRUZIONI GENERALI13) Social securitypayables- due within 12 months 3,260,53114) Other payables- due within 12 months 7,765,2373,260,5317,765,237Total payables 339,010,958 13,470E) Accruals and deferred income- premiums on loans- miscellaneous 923,409923,409Total liabilities 416,890,685 118,106Memorandum accounts 31/12/2011 31/12/20104) Other memorandum accounts 175,284,786Total memorandum accounts 175,284,786Financial statements as of 31/12/2011 Page 25

TOTO SPA COSTRUZIONI GENERALIProfit and loss account 31/12/2011 31/12/2010A) Value of production1) Revenues from sales and services 30,314,9252) Change in work-in-process,semi-finished and finished products3) Change in work in progress to order 6,478,3724) Own work capitalised 2,904,5325) Other revenue and income:- miscellaneous 207,919- grants related to income- grants related to assets (amounts for the year)207,919Total value of production 39,905,748B) Costs of production6) Raw/ancillary materials, consumables and goods forresale7,653,2877) Services 20,855,114 10,5818) Hire and leases 1,226,5419) Personnel costsa) Wages and salaries 4,711,376b) Social security contributions 1,960,852c) Employee termination indemnities 396,176d) Pensions and similar obligationse) Other costs 50,93710) Amortisation, depreciation and write-downsa) Amortisation of intangible fixedassetsb) Depreciation of tangible fixedassetsc) Other write-downs of fixed assetsd) Write-downs of current receivablesand cash at bank and in hand11) Change in raw/ancillary materials,consumables and goods for resale7,119,341716,209 1,0001,087,99016,6671,820,866 1,000(2,127,612)12) Provisions for risks 132,00013) Other provisions14) Other operating costs 267,772 1,202Total costs of production 36,947,309 12,783Financial statements as of 31/12/2011 Page 26

TOTO SPA COSTRUZIONI GENERALIDifference between value and costs of production (A-B)2,958,439 (12,783)C) Financial income and charges15) Income from investments:- in subsidiary companies- in affiliated companies- other16) Other financial income:a) from receivables classified as fixed assets- from subsidiary companies 29,454- from affiliated companies 102,220- from parent companies 9,291- otherb) from securities classified as fixed assetsc) from securities classified as current assetsd) other income:- from subsidiary companies 2,837- from affiliated companies- from parent companies- other 49,823 7190,788 2,844- 190,788 2,84417) Interest and other financial charges:- from subsidiary companies- from affiliated companies- from parent companies- other 1,364,971 7791,364,971 77917-bis) Exchange gains and losses (1,291)Total financial income and charges (1,175,474) 2,065D) Value adjustments to financial assets16) Write-backs:a) equity investmentsb) non-current financial assetsc) current securities19) Write-downs:a) equity investmentsb) non-current financial assetsc) current securitiesTotal value adjustments of financial assetsFinancial statements as of 31/12/2011 Page 27

TOTO SPA COSTRUZIONI GENERALIE) Extraordinary income and expense20) Extraordinary income:- gains from disposals- miscellaneous 58,082 36- Euro rounding difference 121) Extraordinary expense:- losses from disposals- taxes from previous years58,083 36- miscellaneous 353,816 88- Euro rounding difference353,816 88Total extraordinary items (295,733) (52)Profit before taxes (A-B±C±D±E) 1,487,232 (10,770)22) Current, deferred and prepaid income taxes for the yeara) Current taxes 933,076b) Deferred taxesc) Prepaid taxes (2,312)d) Income (expense) from participation in the taxconsolidation/ transparency scheme930,76423) Net profit (loss) for the year 556,468 (10,770)Chairman of the Board of DirectorsAlfonso TotoFinancial statements as of 31/12/2011 Page 28

TOTO SPA COSTRUZIONI GENERALICompanies Register 02208250692REA (Economic Administrative Index) 160647TOTO SPA COSTRUZIONI GENERALIJoint-stock company with sole shareholder managed and coordinated by Toto Holding S.p.A..Registered office in Viale Abruzzo 410 - 66100 CHIETI (CH)Share capital € 50,000,000.00 fully paid-upNotes to the financial statements as of 31/12/2011ForewordToto Spa Costruzioni Generali (in short Toto S.p.A.) is the company of the Toto group which directly andindirectly - through its subsidiary and affiliated companies – operates in the following areas of business:design and construction of infrastructure and residential and industrial buildings.Business activitiesOn the Italian market, Toto S.p.A. Costruzioni Generali is one of the top building firms specialised in thedesign and construction of large-scale transport infrastructure.At the reporting date, the company had an order portfolio of approximately € 519 million.Group membershipThe company belongs to the Toto group which is responsible for its management and coordination via thecompany Toto Holding S.p.A..In accordance with current law, the company made use of the option not to prepare the group’s consolidatedfinancial statements, despite holding controlling interests directly in the companies Alitec S.p.A., IMC Srl,Parchi Scarl, Interporto Scarl, Toto S.p.A. in Association With Taddei S.p.A. Scarl and Ics Toto Taddei Srlsince the consolidated financial statements are drawn up by the parent Toto Holding S.p.A.The following table provides key figures from the last financial statements approved by the aforesaidcompany which is responsible for management and coordination.Description 2010 2009BALANCE SHEETASSETS 0 0A) Subscribed capital unpaidB) Fixed assets 470,675,620 416,815,181C) Current assets 229,663,976 239,901,256D) Prepayments and accrued income 1,776,592 1,657,294Total Assets 702,116,188 658,373,731Notes to the financial statements as of 31/12/2011 Page 29

TOTO SPA COSTRUZIONI GENERALIthe company is able to continue as a going concern and taking into account the economic function of theasset or liability concerned.The application of the prudence principle means that individual items under each asset or liability are valuedindividually to prevent offsetting losses which should be recognised against unrealised profits that shouldnot.In accordance with the accruals-based accounting principle, the effect of transactions and other events hasbeen recorded and allocated to the year to which these transactions and events relate and not to the one inwhich the related cash flows took place (receipts and payments).The application of the same valuation criteria over time is essential for the company's financial statements tobe compared over the various years.By taking into account the economic function of the asset or liability in question which expresses the principleof substance over form - mandatory when not expressly in conflict with other specific rules on financialstatements - transactions are represented according to the economic reality underlying the legal aspects.The valuation criteria adopted in preparing the financial statements are as follows:Fixed AssetsIntangible fixed assetsThese are stated at the historical purchase cost with the approval of the Board of Statutory Auditors, ifrequired, and are shown net of accumulated amortisation, which is charged directly to the individual items.Start-up and expansion costs are amortised over a period of five years.Patents and copyrights are recorded under assets and are amortised over a period of three years.Goodwill, acquired for consideration, has been recorded under assets with the approval of the Board ofStatutory Auditors at the cost incurred for the same and is amortised over a period of five years.The costs incurred for setting up work sites are amortised at a variable rate, adjusted on a percentage ofcompletion basis.Tangible fixed assetsThese are stated at purchase cost and are adjusted by the related accumulated depreciation.The carrying amount takes into account ancillary charges and costs incurred for using the asset, less anymaterial trade or cash discounts.The depreciation charges, taken to the profit and loss account, are calculated according to the type of useand the expected useful life of the assets. The following depreciation rates are believed to reflect theeffective useful life of the assets, and are unchanged from the previous year. They are halved in the year inwhich the asset comes into use.DescriptionRatesIndustrial buildings 3.00%Light construction 12.50%General plant and sundry equipment 10.00%Operator machinery and specific plant 15.00%Ordinary office equipment and furniture 12.00%Electrical and electronic equipment 20.00%Cars 25.00%Lorries 20.00%Self-propelled excavators 20.00%Notes to the financial statements as of 31/12/2011 Page 31

TOTO SPA COSTRUZIONI GENERALIIf an asset is permanently impaired after it is initially recorded, i.e. in the years of the asset's life, the value ofthe fixed asset is adjusted by means of a write-down.InvestmentsInvestments in subsidiary and affiliated companies recorded under non-current financial assets arerecognised at the cost of purchase or subscription. In the event of subscriptions through contributions thisvalue is justified by appraisal as required by the Italian Civil Code or obtained from the directors.Other investments are stated at the cost of purchase or subscription.Investments classified as fixed assets represent long-term, strategic investments for the company.Investments stated at the cost of purchase which have undergone a permanent impairment of value havebeen written down. For others, if the cost of the investment exceeds the quota part of shareholders’ equity, ithas not been written down since the higher carrying amount is justified by the capital gains and goodwillinherent in the subsidiaries and affiliates.Investments in companies put into liquidation are entered under current assets.InventoriesRaw and ancillary materials are stated at the cost of purchase/production or their realisable value based onmarket trends, whichever is lower. The cost of purchase is equal to the latest price.Work in progress is stated on a percentage of completion or state of progress basis. Costs, revenues andthe order margin are recognised depending on the percentage of completion at the agreed prices.Price adjustments are stated in accordance with the provisions of art. 550 of Italian Law 311/04 (2005Finance Act) and the subsequent decrees of the Ministry of Infrastructure and Transport of 30 June 2005, 11October 2006, 2 January 2008 and 9 May 2009, which provided for annual price variations on the mainmaterials used in the construction sector.Claims are valued considering the estimates prepared by the specific company divisions (based on the typeof each claim, including assessments of the legal grounds and financial capacity) and the fact that an initialclaim definition procedure has already been concluded for some contracts. The reasons behind the “Claims”valuations are therefore similar to those established in previous arbitration procedures.The most significant claims relate to updates, which have been measured using the same criteria as thoseapplied previously by the Board of Arbitrators and the Commission, as the case may be, in the aboveproceedings.ReceivablesThese are shown at their estimated realisable value. The nominal value of receivables is adjusted to thisvalue through the provision for bad debts, taking general economic and sector conditions into consideration,in addition to country risk.SecuritiesSecurities stated under current assets are stated at purchase cost or their realisable value based on markettrends, whichever is lower.Cash at bank and in handCash at bank and in hand is stated at its estimated realisable value, which is the same as its nominal value.PayablesThese are stated at their nominal value, adjusted in the event of returns or invoicing adjustments.Notes to the financial statements as of 31/12/2011 Page 32

TOTO SPA COSTRUZIONI GENERALIAccruals and deferralsThese are determined on an accruals basis.For multi-year accruals and deferrals the conditions which led to them being initially recorded have beenchecked and changes made as necessary.Provisions for risks and chargesThese are set aside to cover losses or payables which are certain or likely to occur, but the amount or dateof occurrence of which is undetermined at year-end.These provisions are measured in accordance with the general criteria of prudence and on an accrualsbasis. No generic provision for risks has been set up, as there are no economic reasons to do so.Potential liabilities are recognised and provided for when considered probable and the related amount canbe reasonably estimated.Provision for employee termination indemnitiesThis represents the actual amount due to employees in accordance with law and current national labouragreements, taking into account all forms of remuneration of an ongoing nature.The provision is the total of the individual indemnities accrued up until 31 December 2006 by employees onthe reporting date, including relevant annual revaluations, net of any advances paid, and amounts to whatwould have had been due to employees should their employment have terminated on that date.The provision does not include the indemnities accrued from 1 January 2007, which are allocated tosupplementary pension schemes pursuant to Italian Leg. Dec. 252 of 5 December 2005 (or transferred to theINPS (Italian Social Security Institute) treasury).LeasingLeases are recognised in the financial statements using the equity method, recording the lease instalmentspaid in the profit and loss account on an accruals basis. The supplementary information as required by lawon the recognition of lease agreements using the financial method is provided in the specific section of thesenotes. The residual instalments payable to the leasing firms are entered in the memorandum accounts.Income taxTaxes are provided for on an accruals basis; this item therefore reflects accruals for taxes paid or to be paidduring the year, calculated according to current applicable rates and laws.Prepaid taxes pertaining to the year are recorded only in the case of temporary differences when it isreasonably certain that there will be a lower tax charge in the future.Deferred taxes during the year are not recorded since there were no temporary differences which generatedthem.From 2009 the company, as consolidated company, has opted to participate in the national tax consolidationscheme – which allows for IRES (corporate income tax) to be calculated according to a taxable basiscorresponding to the total of positive and negative taxable amounts of the individual participating companies– together with the company Toto Holding S.p.A., the latter acting as consolidating company.Financial transactions, liabilities and mutual obligations between the consolidating company and itsconsolidated companies are set out in the Consolidation regulation for group companies signed on 16 June2009 and subsequently amended and supplemented.Prepaid IRES (corporate income tax) is calculated based on the temporary differences between the amountsof assets and liabilities determined according to statutory criteria and the corresponding tax values solelywith reference to the company.Current and prepaid IRAP (regional tax on production) are calculated exclusively with reference to thecompany.Notes to the financial statements as of 31/12/2011 Page 33

TOTO SPA COSTRUZIONI GENERALIRevenue recognitionRevenues from work in progress to order are recognised on a percentage of completion basis, as shown inthe work progress reports (SALs) certified by the contracting bodies.Criteria for converting amounts expressed in foreign currencyReceivables and payables originally expressed in foreign currencies, recorded at the exchange rates in forceon the date they arose, are adjusted to current exchange rates on the balance-sheet date.In particular, current assets and liabilities that are not held as fixed assets and non-current financialreceivables are recorded at the spot exchange rate on the balance-sheet date. Gains and losses fromconverting receivables and payables are respectively credited and charged to the Profit and Loss Accountunder item 17 bis Exchange gains and losses.Fixed assets in foreign currency are instead recorded at the exchange rate in force at the time of theirpurchase or at the lower year-end rate only if negative changes have resulted in a permanent impairment ofthe fixed assets.Guarantees, commitments, third party assets and risksGuarantees, commitments and third party assets are indicated in the Memorandum Accounts at theircontractual value.Risks for which a liability is only possible are described in the explanatory notes, but no amount is allocatedto the provision for risks in accordance with the applicable accounting principles. Remote risks were nottaken into accountEmployment dataThe average company headcount, broken down by category, underwent the following changes compared tothe previous year.Personnel 31/12/2011 31/12/2010 ChangeManagers 18 18White collar 159 159Manual workers 450 450Other 9 9636 636The employment contract applied for white collar and manual workers is the Collective National EmploymentContract for employees of construction firms and similar businesses of 18 June 2004, updated by theagreement of 19 April 2010. The agreement applied for executives is the Collective National EmploymentContract for executives of companies that product goods and services of 24 November 2004, updated by theagreement of 25 November 2009.The breakdown of the balance sheet and profit and loss account items and the comments on them asprovided for by art. 2427 C.C. are provided below.To make the data a bit clearer and more understandable, the balances from the transfer of the constructionunit to the company as of 01/11/2011 have been stated as necessary.Notes to the financial statements as of 31/12/2011 Page 34

TOTO SPA COSTRUZIONI GENERALIAssetsB) Fixed assetsI. Intangible fixed assetsBalance as of 31/12/2011 Balance as of 31/12/2010 Change11,679,279 2,000 11,677,279Total change in intangible fixed assetsDescriptionof costsAmount31/12/2010Transfer01/11/2011Increases in theyearDecreases inthe yearAmortisation inthe yearAmount31/12/2011Start-up and expansion 2,000 15,000 4,000 13,000Patents and industrialproperty 134,466 6,399 28,689 112,176Concessions, licences andtrademarks 69,176 3,459 65,717Goodwill 3,173 3,173Other 9,157,454 3,007,819 676,887 11,488,386Rounding (1) 12,000 9,295,093 3,098,394 (1) 716,209 11,679,279Previous revaluations, amortisation and write-downsThe historical cost at the start of the year is broken down as follows.Descriptionof costsHistoricalcostAccumulatedamortisationRevaluations Write-downs NetamountStart-up and expansion 2,000 2,0002,000 2,000Breakdown of start-up and expansion costs, research and development costs and advertising costsThe breakdown of the item start-up and expansion costs is stated below.Start-up and expansion costsDescriptionof costsAmount31.12.10Transfer01/11/2011Increases inthe yearDecreases inthe yearAmortisation inthe yearAmount31/12/2011Incorporation 500 500Other changes memorandum ofincorporation 1.500 15.000 3.500 13.0002.000 15.000 4.000 13.000The costs recorded are reasonably associated with a usefulness spanning several years and aresystematically amortised over their expected useful life. The balance of the historical cost is made up ofnotary costs incurred for drawing up the minutes for the extraordinary shareholders’ meetings which passedthe resolutions for the two share capital increases which took place in 2008 and in 2009; the increase duringthe year is made up of notary costs incurred for the extraordinary shareholders’ meeting of 28 June 2011,which resolved to transfer the Construction business unit and increase the share capital from € 120,000 to €50,000,000.Notes to the financial statements as of 31/12/2011 Page 35

TOTO SPA COSTRUZIONI GENERALIAmortisation takes place over five years on a straight-line basis.Patents and intellectual property rightsDescriptionof costsAmount31/12/2010Transfer01/11/2011Increases inthe yearDecreases inthe yearAmortisation inthe yearAmount31/12/2011Software 134,466 6,399 28,689 112,176134,466 6,399 28,689 112,176The balance transferred and the increase shown are made up of software licences purchased and usedduring the year as part of business activities (Autocad, Oracle, MS Office, etc.).GoodwillDescriptionof costsAmount31/12/2010Transfer01/11/2011Increases inthe yearDecreases inthe yearAmortisation inthe yearBusiness unit purchase 3,173 3,1733,173 3,173Amount31/12/2011The item is made up of costs incurred for acquiring the operating unit of the company Edrisir Srl, a companyoperating in the construction sector and whose main activity is the construction of buildings for residential,commercial, industrial and tourism use.The amortisation, which takes place over five years on a straight-line basis, ends during the current financialyear.Other intangible fixed assetsDescriptionof costsAmount31/12/2010Transfer01/11/2011Increases inthe yearDecreases inthe yearAmortisation inthe yearAmount31/12/2011Incremental expenses on thirdparty assets 213,694 103,287 26,560 290,421Pre-operating costs 8,943,760 2,904,532 650,327 11,197,9659,157,454 3,007,819 676,887 11,488,386The increase in the item “Incremental expenses on third party assets” is the result of costs incurred forimprovements to and incremental expenses on plant, machinery and miscellaneous equipment leased by thecompany. These costs are capitalised since the improvements and incremental expenses cannot beseparated from the assets themselves. These costs are amortised over the period of future usefulness of theexpenses incurred or the residual lease period, whichever is shorter.The item pre-operating costs includes all costs incurred by the business for commencing the production ofthe new work sites: namely, contract expenses, planning costs, costs for land clearances, geognosticexpenses, cabin assembly and utility connection costs and all expenses incurred for setting up the work site(offices, warehouses, canteens and dormitories, etc.).The transferred balance of pre-operating costs, net of amortisation, amounts to € 8,943,760. During the yearthe balance also increased further due to new expenses incurred for € 2,904.532. Details of these expensesfor the work site are as follows:Work siteAmountVariante di Valico Mugello (FI) work site 24,400Variante di Valico San Benedetto VdS (BO) work site 246,300San Benedetto VdS (BO) work site – boring machine2,464,032preparatory workRoma Est 3 rd Lane work site 169,800Total 2,904,532Notes to the financial statements as of 31/12/2011 Page 36

TOTO SPA COSTRUZIONI GENERALIThese intangible costs are systematically amortised each year based on the progress of the works, which isdetermined using specific methods set out for the application of the percentage of completion criteria.II. Tangible fixed assetsBalance as of 31/12/2011 Balance as of 31/12/2010 Change93,114,588 93,114,588Land and buildingsDescriptionAmountTransferred historical cost 25,631,707Transferred accumulated depreciation (2,550,949)Balance as of 01/11/2011 23,080,758 of which: land 4,146,706Acquisitions during the year 427,432Depreciation for the year (110,186)Balance as of 31/12/2011 23,398,004 of which: land 4,312,802The most significant change during the period is due to the acquisition of light constructions for € 409,223,net of depreciation.Plant and machineryDescriptionAmountTransferred historical cost 79,789,422Transferred accumulated depreciation (14,857,446)Balance as of 01/11/2011 64,931,976Acquisitions during the year 11,133Depreciation for the year (702,385)Balance as of 31/12/2011 64,240,724Industrial and commercial equipmentDescriptionAmountTransferred historical cost 4,041,065Transferred accumulated depreciation (2,951,068)Balance as of 01/11/2011 1,089,997Acquisitions during the year 100,858Depreciation for the year (94,293)Balance as of 31/12/2011 1,096,562Other assets:DescriptionAmountTransferred historical cost 9,870,341Transferred accumulated depreciation (5,920,052)Balance as of 01/11/2011 3,950,289Acquisitions during the year 229,275Depreciation for the year (181,126)Balance as of 31/12/2011 3,998,438Notes to the financial statements as of 31/12/2011 Page 37

TOTO SPA COSTRUZIONI GENERALIConstruction in progress and advance paymentsDescriptionAmountTransferred historical cost 304,360Balance as of 01/11/2011 304,360Acquisitions during the year 76,500Balance as of 31/12/2011 380,860Total revaluations of tangible fixed assets at year-endA list is provided below of the tangible fixed assets recorded in the accounts as of31/12/2010 which have undergone monetary revaluations and departures from statutoryvaluation criteria.Tangible fixed assets were revalued in accordance with special, general or sector laws.No discretionary or voluntary revaluations were carried out and the revaluations carriedout are within the objectively determined usage value of the assets.DescriptionRevaluationLaw 72/83RevaluationLaw 185/08TotalRevaluationsLand and buildings 7,858 5,792,325 5,800,183Plant and machinery 53,014 53,014Industrial and commercial equipment 3,899 3,899Other assets 21,284 21,28486,055 5,792,325 5,878,380III. Financial fixed assetsBalance as ofBalance as ofChange31/12/201131/12/201074,074,151 110,000 73,964,151InvestmentsDescription 31/12/2010 Transfer Increase Decrease 31/12/201101/11/2011Subsidiarycompanies 43,015,066 43,015,066Affiliated companies 4,048,812 4,048,812Other companies 7,313,540 174,706 7,488,24654,377,418 174,706 54,552,124The following information on the investments directly or indirectly held are provided for the subsidiary andaffiliated companies.Notes to the financial statements as of 31/12/2011 Page 38

TOTO SPA COSTRUZIONI GENERALISubsidiary companiesName City or foreigncountrySharecapitalShareholders’equityProfit/Loss% held CarryingamountEquitymethod valueALITEC SPA CHIETI 45,000,000 43,687,290 (325,501) 100 42,993,820 41,767,933I.M.C. SRL CHIETI 12,000 132,715 26,733 51 6,120 829,500PARCHI SCARL CHIETI 10,000 10,000 19,36 1,936 (274,872)INTERPORTO SCARL CHIETI 10,000 10,000 79,25 7,925 8,117ICS TOTO TADD. SRL REP.322 (1,303,595) (338,220) 51 164 (1,432,786)TOTO SPA ASSOC.WITH TADDEI SCARLMOLDAVIACHIETI 10,000 10,000 51 5,100 567,054Information is provided below on the subsidiary and affiliated companies and their business activities during2011. As stated in point 3 of art. 2426 C.C., reasons are given for the difference in the carrying amount of theinvestments and the value determined using the equity method (with cancellation of intragroup entries),particularly if there is a loss for the year.1) ALITEC SPAThe business purpose of the company is the construction and management of properties.Alitec S.p.A. is the owner of an industrial complex totalling 165,000 m 2 , where it is involved in a project toconstruct a multifunctional complex for management, commercial, residential, cultural, entertainment andwell-being uses.For the part of the project regarding commercial activities, in 2008 the company began obtaining thenecessary trade licences (with notary deeds or undertakings to purchase/sell) in order to apply for theregional permits needed for the project.The carrying amount of the company Alitec Spa is primarily justified by the asset value of the industrialcomplex which it owns. The improvement of the area, as indicated above, will allow for the amounts recordedin the accounts to be fully recovered.Shareholders’ equity and the result for the year are taken from the financial statements for the year ended 31December 2011, which are undergoing approval.2) I.M.C. SRLInvestment acquired in 2005 for a share of 51% in the share capital. I.M.C. Srl operates in the road barrierproduction and installation sector. The company, in a joint venture with Toto S.p.A., is the contractor for thereplacement of the road traffic safety barriers of the A/24 – A/25 Motorways. Contracting body: Strada deiParchi S.p.A.The carrying amount of the investment is equal to its purchase cost.Shareholders’ equity and the result for the year are taken from the financial statements for the year ended 31December 2011, which are undergoing approval.3) PARCHI SCARLConsortium company set up by shareholders IMC Srl (80.64%) and Toto Spa (19.36%) after the solemanagement of the “works necessary for replacing the traffic safety barriers of Motorways A/24 – A/25” wasawarded to the joint venture. Contracting body Strada dei Parchi Spa.The carrying amount of the investment is equal to its purchase cost.The value of the investment calculated using the equity method, indicated in the table, shows a negativebalance: this is due to the fact that the calculation does not take into account profit and loss items to andfrom the parent Toto Holding S.p.A.. At group level the value of the investment calculated using the equityNotes to the financial statements as of 31/12/2011 Page 39

TOTO SPA COSTRUZIONI GENERALImethod would be equal to its purchase cost.Shareholders’ equity and the result for the year are taken from the financial statements for the year ended 31December 2011, which are undergoing approval.4) INTERPORTO SCARLConsortium company set up in 2004 between Toto S.p.A. (79.25%) and TUZI Srl (20.75%) following theassignment of the “Chieti-Pescara Multimodal Freight Terminal construction works, first operating project –second and third stage” to the joint venture. Contracting body Interporto Valpescara SpaThe carrying amount of the investment is equal to its purchase cost.Shareholders’ equity and the result for the year are taken from the financial statements for the year ended 31December 2011, which are undergoing approval.5) ICS TOTO TADDEI SRLThe company was set up in 2011 by Toto S.p.A. and Taddei S.p.A.: it is a Moldavian company based inChisinau set up for performing the work which the “Ministry of Transport and Road Infrastructure” assigned tothe company “Toto Spa in Association with Taddei Spa Scarl”.The carrying amount of the investment amounts to the ownership share in the company on the date of itsincorporation.The value of the investment calculated using the equity method, indicated in the table, shows a negativebalance due to the loss recorded by the company in its first year of business. This negative result is due toincidental events and is considered fully recoverable in subsequent years.Shareholders’ equity and the result for the year are taken from the financial statements for the year ended 31December 2011.6) TOTO SPA IN ASSOCIATION WITH TADDEI SPA SCARLThe company, set up by Toto S.p.A. and Taddei S.p.A., has been awarded two contracts for the “M2Chisinau-Soroca Redevelopment Works” assigned by the “Ministry of Transport and Road Infrastructure” ofthe Republic of Moldavia. The value of the works amounts to a total of approximately € 17 million.The carrying amount of the investment amounts to the ownership share in the company on the date of itsincorporation.Shareholders’ equity and the result for the year are taken from the financial statements for the year ended 31December 2011.Affiliated companiesNameCity or foreign Share capital Shareholder Profit/ % held Carryingcountrys’ equity LossamountARABONA SCARL CHIETI 100,000 100,000 49,9 49,900SAN BENEDETTO VDS SCARL ROME 10,000 10,000 36 3,600NOVIGAL SCARL BARI 10,000 10,000 33 3,312INTERMODALE SRL CHIETI 8,000,000 7,600,586 (201,083) 49,9 3,992,0001) ARABONA SCARLA non-profit consortium company set up on 23 January 2009 to complete the Val Pescara Multimodal FreightTerminal located in Manoppello (PE).Toto S.p.A. holds 49.90% of the company’s share capital.Notes to the financial statements as of 31/12/2011 Page 40

TOTO SPA COSTRUZIONI GENERALI2) SAN BENEDETTO VAL DI SAMBRO SCARLA non-profit consortium company set up on 23 January 2007 under art. 23 bis of Italian Law 584/77 betweenVianini S.p.A. (54%), Toto S.p.A. (36%) and Profacta S.p.A. (10%) after the integrated tender (under art. 19paragraph b of Italian Law 109/94) was awarded to the joint venture formed between these three companiesinvolving the “Upgrading of the Apennine stretch between Sasso Marconi and Barberino del Mugello – LaQuercia Badia Nuova Section – Lots 6 and 7” – Contracting body Autostrade per l’Italia Spa.The carrying amount of the investment is equal to its purchase cost.Shareholders’ equity and the result for the year are taken from the financial statements for the year ended 31December 2011.3) NOVIGAL SCARLA non-profit consortium company set up under art. 96 of Italian Pres. Dec. 554 of 21/12/1999 between DecSpa (67%) and Toto Spa (33%) after the Municipality of Potenza awarded the joint venture formed betweenthese two companies the contract involving the construction of the “Galitello Complex Road Junction” in thesame Municipality.Shareholders’ equity and the result for the year are taken from the financial statements for the year ended 31December 2011.4) INTERMODALE SRLThe company was set up on 08 April 2008 as an SPV under article 156 of Italian Leg. Dec. 163/2003. Thebusiness purpose of the company is the execution of the agreement signed on 10 January 2008 by theRegion of Abruzzo and the joint venture between Dino di Vincenzo & C. S.p.A. and Toto S.p.A.. Theagreement provides for, among other things, the execution of the design, construction, management andmaintenance of the completion of the Val Pescara Multimodal Freight Terminal located in Manoppello (PE)and the financial and functional management and maintenance of work already carried out by InterportoValPescara spa.Toto S.p.A. holds 49.90% of the company’s share capital.Shareholders’ Equity and the result for the year are taken from the financial statements for the year ended 31December 2011. The greater value of the investment with respect to the portion of shareholders’ equity heldis the result of the loss for the year primarily due to the operating expenses incurred during the initiative’sstart-up stage.Other CompaniesThe most significant investments in other companies are the following:NameCity orforeigncountrySharecapitalShareholders’ equityProfit/Loss% held CarryingamountMONTEBOLI SPA CHIETI 11,380,000 12,387,909 904,592 5 575,000STRADA DEI PARCHI SPA ROME 67,764,700 61,061,878 (8,707,146) 5 6,908,2391) MONTEBOLI SPAThe company was set up as an SPV on 06 October 2010 by Toto S.p.A. (which holds 5% of the sharecapital) and AP Capital Srl (today Renexia S.p.A., holder of the remaining 95% of the share capital) pursuantto and in accordance with art. 156 of Italian Leg. Dec. 163/2006 to take over the contracting relationshipbetween Toto S.p.A. (in the capacity of operator) and the Municipality of Salerno (in the capacity of grantor)following the contracting out of the “concession of surface rights for the executive design, construction andNotes to the financial statements as of 31/12/2011 Page 41

management of a 24 MW photovoltaic park within the Municipality of Eboli (SA)”.TOTO SPA COSTRUZIONI GENERALIShareholders’ Equity and the result for the year are taken from the financial statements for the year ended 31December 2011.2) STRADA DEI PARCHI SPAThe company was set up as a joint venture between Toto S.p.A. (40%) and Autostrade per l’Italia S.p.A.(60%) for the management, under a concession agreement, of the two A24 and A25 motorway sectionswhich link Rome to Pescara and Teramo. In 2011 control of the company passed to the Toto group, whichacquired 58% of the shares from Autostrade per l’Italia S.p.A.. Currently Toto S.p.A. Costruzioni Generaliholds 5% of the shares in the company, while the remaining shares are held by Toto Holding S.p.A. (93%)and Autostrade per l’Italia S.p.A. (2%).Shareholders’ equity and the result for the year are taken from the financial statements for the year ended 31December 2011.The Shareholders’ Equity of the company is € 61,061,878, which includes Share Capital of € 67,764,700(fully subscribed and paid-up by shareholders), the Share Premium Reserve of € 3,090,000, the RestrictedExtraordinary Reserve of € 8,910,000 and the Future Capital Increase Reserve of € 8,810,918.The valuation criteria for the investment (cost method) resulted in it being recorded for a higher amount thanthe fraction of shareholders’ equity as of year-end 2011. This greater value is justified by positive results forthe next few years forecast in the business plan attached to the New Single Agreement entered into withANAS on 19/11/2009 and which took effect on 29/11/2010 following the implementation of the CIPE(Interministerial Committee for Economic Planning) requirements.ReceivablesDescription 31/12/2010 Transfer Increase Decrease 31/12/201101/11/2011Subsidiarycompanies 4,521,249 292,328 4,813,577Affiliated companies 6,275,000 6,255,000 20,000Parent companies 110,000 23,882,628 20,315,901 3,676,727Other 29,924,661 6,816,659 25,729,597 11,011,723110,000 34,445,910 37,266,615 52,300,498 19,522,027Receivables from subsidiariesThe largest amounts recorded under receivables from subsidiaries pertain to the financing of Alitec S.p.A. fora total of € 4,551,250.Receivables from parent companiesThe balance is the result of loans paid out to Toto Holding S.p.A..Receivables from othersThe most significant financial transactions under this item are those involving the loan to Monteboli S.p.A. for€ 7,971.055.Notes to the financial statements as of 31/12/2011 Page 42

TOTO SPA COSTRUZIONI GENERALIThe breakdown of receivables as of 31 December 2011 by geographic area is shown in the table below.ReceivablesbyGeographicAreaDue fromSubsidiaryCompaniesDue fromAffiliatedCompaniesDue fromParentCompaniesDue from othercompaniesTotalItaly 4,813,577 20,000 3,676,727 11,011,723 19,522,027Total 4,813,577 20,000 3,676,727 11,011,723 19,522,027C) Current assetsI. InventoriesBalance as of 31/12/2011Balance as ofChange114,507,93031/12/2010114,507,930The item inventories is broken down as follows:Description 31/12/2010 Transfer Increase Decrease 31/12/201101/11/2011Raw materials 7,216,781 9,957,148 7,829,536 9,344,393Work in progress to order 92,477,770 8,000,000 1,521,628 98,956,142Advance payments 6,782,946 575,551 6,207,395106,477,497 17,957,148 9,926,715 114,507,930Details of the item work in progress to order amounting to € 98,956,142 are as follows:Completed work pending issue of approval for payment totalling€ 7,864,740.Price adjustments totalling € 1,291,401. For the main materials (ferrous andbituminous materials, copper) used and recorded in the work progress reports(SALs) from 2005 to 2010 and not yet paid for by clients, the adjustments to theincreased costs incurred for procuring these materials over the years are recorded inthis item. In accordance with art. 1, paragraph 550 of Italian Law 311/04 (FinancialAct 2005) and subsequent decrees issued by the Ministry for Infrastructure andTransport on 30 June 2005, 11 October 2006, 2 January 2008 and 9 May 2009,which established the annual price changes for the main materials used in theconstruction sector, the increased payment was recorded by applying thepercentages indicated in the decrees. “Claims” amounting to € 89,800,000. This amount includes “Claims” totalling €40,000,000 recorded from January to October 2011 by the parent company TotoHolding and then transferred and “Claims” totalling € 8,000,000 recorded in theperiod in which the company was operative (November and December 2011).Claims are valued considering the estimates prepared by the specific companydivisions (based on the type of each claim, including assessments of the legalgrounds and financial capacity) and the fact that an initial claim definition procedurehas already been concluded for some contracts. The reasons behind the “Claims”valuations are therefore similar to those established in previous arbitrationprocedures.Notes to the financial statements as of 31/12/2011 Page 43

The “Claims” recorded are broken down overall as follows:Client Amount €/000ANAS 26,000Autostrade per l'Italia Spa 58,000Strada dei Parchi 3,000Other 2,800Total 89,800TOTO SPA COSTRUZIONI GENERALIThe main claims recorded are the following:€ 25,000,000 for claims relating to the contract awarded by ANAS for themodernisation of the A-3 SA/RC Motorway. The lot is situated in the municipality ofContursi (SA).An initial arbitration procedure has already been concluded in relation to this contractwith the issue of an award sustaining the claims made by the company sentencingthe organisation to pay a sum higher than that recorded in the accounts at the time.The conclusion of the second arbitration procedure is pending which shouldconclude positively, given the nature of the claims in question which are in no waydifferent to those already settled by the previous judgment and considering theresults of the Expert’s Report filed by the expert witness appointed by the Arbitrators.€ 3,000,000 for claims made in relation to 2 contracts awarded by Strada dei ParchiSpa, operator of the A24 and A25 motorway routes. For both contracts the Clientwas requested to start proceedings for an amicable agreement pursuant to art. 240of Italian Leg. Dec. 163/2006, which should be concluded by 2012.€ 50,000,000 for “Claims” made relating to work under the contract awarded byAutostrade per l’Italia involving the upgrading of the Apennine section of the Milan –Naples Motorway lots 6-7. As described in the Directors’ Report, work carried out onthe Val di Sambro tunnel showed that the material (rock) being excavated has worsegeomechanical characteristics than that forecast in the executive design. In fact, itwas found that the rock, classified as a “dormant landslide” in the RegionalGeographical Map and in the project, was instead affected by “active” landslidemovement. As a consequence, from 2010 Project Management has imposed certainchanges to the project, ordering precise changes to the works being carried out,having a negative impact on forecast production and increasing construction costs.Finally, in December 2011 work was suspended after notice was given and theworks were made safe.Claims amount to approximately € 138 million and, in this respect, an amicablesettlement procedure will begin soon pursuant to art. 240 of Italian Leg. Dec.163/2006.€ 8,000,000 for “Claims” made for work under the contract awarded by Autostradeper l’Italia S.p.A. regarding the upgrading of the Apennine section of the Milan –Naples Motorway lot 13. For this tender, in 2008 and 2010 two amicable agreementswere entered into between the company and the client, resulting in the recognitionand payment of increased fees totalling € 32 million. The carrying amount consists ofincreased charges accrued after the date the second amicable settlement wasentered into. Claims amount to approximately € 24 million and, in this respect, legalproceedings will soon begin.€ 2,500,000 for “Claims” made for increased costs and charges borne by Toto S.p.A.due to delays caused by the Lebanese Government in completing construction workon Lot A2 of the Haddath – Syrian Border Motorway, Saoufar – Mdeirij Section,which links Beirut to Damascus.In 2007, Toto S.p.A. filed a petition for arbitration in Paris in accordance with theNotes to the financial statements as of 31/12/2011 Page 44

TOTO SPA COSTRUZIONI GENERALIprovisions of the International Convention on the Settlement of Investment Disputes(ICSID).The board of arbitrators, made up of three members, one chosen by TOTO S.p.A.,one by the Lebanese government and the other by both parties, accepted to resolveon TOTO S.p.A.’s request, which arose directly from the breach of the Treaty signedbetween Italy and Lebanon on the promotion and safeguarding of investments, andin 2010, commenced the assessment stage. According to the expert appointed byTOTO S.p.A.., upon conclusion of the checks on the fairness of the requests putforward by TOTO in respect of the delays - which were not caused by TOTO – incompleting the above work, TOTO’s requests are valid, even to an extent greaterthan that stated in the financial statements.At the reporting date, the board of arbitrators has not made any pronouncement.II. ReceivablesBalance as of Balance as of 31/12/2010Change31/12/201188,611,127 3,686 88,607,441The balance of the receivables transferred to the company as of 01/11/2011 amounts to € 83,256,027. Theirbreakdown by due date is as follows:DescriptionDue within Due after Due after Total12 months 12 months 5 yearsAmounts due from clients 29,319,571 29,319,571Amounts due from19,605,965 19,605,965subsidiary companiesAmounts due from27,582,520 27,582,520affiliated companiesTax receivables 1,441,065 1,441,065Prepaid taxes 565,365 565,365Other debtors 4,741,541 4,741,54183,256,027 83,256,027As of 31/12/2011 the balance of receivables amounts to € 88,611,127 and is broken down by due date asfollows.DescriptionDue within Due after Due after Total12 months 12 months 5 yearsAmounts due from clients 30,658,113 30,658,113Amounts due from8,018,865 8,018,865subsidiary companiesAmounts due from24,122,818 24,122,818affiliated companiesAmounts due from parent266,968 266,968companiesTax receivables 996,100 996,100Prepaid taxes 567,678 567,678Other debtors 23,980,585 23,980,58588,611,127 88,611,127Amounts due from clients of a material amount as of 31/12/2011 are as follows:Notes to the financial statements as of 31/12/2011 Page 45

TOTO SPA COSTRUZIONI GENERALIDescriptionAmountAutostrade per l’Italia S.p.A. 16,688,601Ambra Srl 5,721,960The nominal value of receivables is adjusted to their estimated presumable value through the provision forbad debts. The balance of the transferred provision as of 01/11/2011, amounting to € 1,951,685, wasincreased by € 100,000.DescriptionAmountTransfer 01/11/2011 1,951,685Decrease during the yearIncrease during the year 100,000Balance as of 31/12/2011 2,051,685The balance of amounts due from subsidiary companies is broken down as follows:DescriptionAmountToto S.p.A. in association with Taddei S.p.A. Scarl 432,242TB Bitumi Srl in liquidation 112,341Alitec S.p.A. 965,501Bital Srl in liquidation 5,000IMC Srl 57,300Consortium companies 6,446,481Balance as of 31/12/2011 8,018,865The balance of amounts due from affiliated companies is € 24,122,818. The most significant amounts areas follows: Amounts due from San Benedetto Val di Sambro Scarl, € 12,083,715 Amounts due from Intermodale Srl, € 6,357,284Details of prepaid taxes are provided in the last section of the explanatory notes.Other debtors as of 31/12/2011 amount to € 23,980,585. Among others, this item includes amounts duefrom employees for loans, advances and payments on account totalling € 1,419,105, amounts due fordeposits totalling € 366,421 and trade receivables due from subsidiaries, which total € 14,377,645 and arebroken down as follows:DescriptionAmountStrada dei Parchi S.p.A. 12,890,948Monteboli S.p.A. 1,444,065Ingraengineering Srl 12,932Azienda Aviagricola Abruzzese Srl 9,000Parchi Global Service S.p.A. 9,600Rail One S.p.A. 5,300Air One Executive S.p.A. 5,800Balance as of 31/12/2011 14,377,645The breakdown of receivables as of 31 December 2011 by geographic area is shown in the table below.Notes to the financial statements as of 31/12/2011 Page 46

ReceivablesbyGeographicAreaDue fromclientsDue fromSubsidiaryCompaniesDue fromAffiliatedCompaniesDue fromParentCompaniesTOTO SPA COSTRUZIONI GENERALIDue fromothercompaniesTotalItaly 30,658,113 8,018,865 24,122,818 266,968 23,980,585 87,047,349Total 30,658,113 8,018,865 24,122,818 266,968 23,980,585 87,047,349III. Financial assetsBalance as of 31/12/2011 Balance as ofChange7,416,94131/12/20107,416,941Current financial assets on the reporting date amounts to that transferred to the company as of 01/11/2011and are broken down as follows:Description 31/12/2010 Transfer Increase Decrease 31/12/201101/11/2011Investments in626,751 626,751subsidiary companiesOther securities 6,790,190 6,790,1907,416,941 7,416,941The balance consists of securities and investments intended to be held for a short period of time. Securitiesconsist of:. Bonds issued by leading Italian credit institutions, € 3,064,777 Certificates of deposit, shares and other securities, € 3,725,413IV. Cash at bank and in handBalance as ofBalance as ofChange31/12/201131/12/201018,819,706 2,420 18,817,286Description 31/12/2011 31/12/2010Bank current accounts and post18,751,771 2,420office depositsCash in hand and cashequivalents67,93518,819,706 2,420The balance represents cash and cash equivalents on the reporting date. The item “bank accounts and postoffice deposits” includes bank time deposits amounting to € 6,795,874.D) Prepayments and accrued incomeBalance as ofBalance as ofChange31/12/201131/12/20108,666,963 8,666,963Notes to the financial statements as of 31/12/2011 Page 47

TOTO SPA COSTRUZIONI GENERALIThis item reflects income and expenses pertaining to previous or future years with respect to the relatedpayment or collection. These are recorded regardless of the date of payment of the respective income andexpenses, which relate to two or more years and can be spread out over time.As of 31/12/2011 there are no prepayments and accrued income with a duration of more than five years.The breakdown of this item is as follows:DescriptionAmountInsurance premiums 5,306,952Rent and leases 129,391Prepaid lease instalments 1,331,585Other 1,899,0358,666,963LiabilitiesA) Shareholders' equityBalance as ofBalance as ofChange31/12/201131/12/201071,240,722 104,636 71,136,086Description 31/12/2010 Increases Decrease 31/12/2011Capital 120,000 49,880,000 50,000,000Share premium reserve 20,699,616 20,699,616Euro rounding difference 2 2Net profit (loss) brought forward (4,594) (10,770) (15,364)Net profit (loss) for the year (10,770) 556,468 (10,770) 556,468104,636 71,125,316 (10,770) 71,240,722The table below provides details on the changes in shareholders’ equitySharecapitalSharepremiumreserveRoundingNet profit(loss)broughtforwardResult forthe yearPrior year opening balance 120,000 (2,287) (2,307) 115,406Allocation of profit for the year- carried forward (2,307) 2,307Net profit (loss) for the previous year (10,770) (10,770)Prior year closing balance120,000 (4,594) (10,770) 104,636Allocation of profit for the year- carried forward (10,770) 10,770Transfer of construction part- share capital 49,880,000 49,880,000- share premium reserve 20,699,616 2 20,699,618Euro rounding differenceNet profit (loss) for the current year 556,468 556,468Closing balance of the year 50,000,000 20,699,616 2 (15,364) 556,468 71,240,722TotalThe share capital is broken down as follows.Notes to the financial statements as of 31/12/2011 Page 48

TOTO SPA COSTRUZIONI GENERALIShares/Holdings Number Nominal value inEuroOrdinary Shares 500,000 100Total 50,000,000The shareholders’ equity items are broken down as follows by origin, possible utilisation, distribution andutilisation in the previous three years.Type / Description Amount Possibleutilisation (*)AvailableportionShare capital 50,000,000 B 50,000,000Share premium reserve 20,699,616 A, B 20,699,616Other reserves 2 B 2Net profit (loss) brought(15,364) A,B,C (15,364)forwardTotal 70,684,254 70,684,254(*) A: for share capital increase; B: for loss coverage; C: for distribution to shareholdersUtilisations in thelast three years forloss coverageUtilisations in thelast three yearsfor other reasonsIn accordance with accounting principle 28 on Shareholders’ Equity, the following additional information isprovided:No monetary or fair value revaluation reserves are included in the share capital.There are no reserves or other funds which if distributed would count towards thetaxable income of the company or shareholders.B) Provisions for risks and chargesBalance as ofBalance as ofChange31/12/201131/12/20104,308,103 4,308,103Description 31/12/2010 Transfer Increase Decrease 31/12/201101/11/2011Other 4,154,077 154,026 4,308,1034,154,077 154,026 4,308,103Details of the transferred balance as of 01/11/2011 are as follows:Amount set aside for charges to be incurred for ten-year post-completion policies forcontracts concluded and under way, € 3,814,077 Amount set aside for disposal charges for work sites for contracts underway, €340,000The increases during the year consist of:Amount set aside for charges to be incurred for ten-year post-completion policies forcontracts under way, € 22,026Notes to the financial statements as of 31/12/2011 Page 49

TOTO SPA COSTRUZIONI GENERALI Amount set aside for disposal charges for work sites for contracts under way, €132,000, € 77,940 of which for the “Upgrading of the Apennine route between SassoMarconi and Barberino del Mugello Lot 13” contract and € 54,060 for the “Creation ofan A24 Motorway slip road system from the Portonaccio junction to the Roma Eststation” contract.C) Provision for employee termination indemnitiesBalance as ofBalance as ofChange31/12/201131/12/20101,407,493 1,407,493The change is broken down as follows.Change31/12/2010 Transfer Increase Decrease 31/12/201101/11/2011Employee termination indemnities, changes during the year 1,496,398 67,072 155,977 1,407,493The provision represents the actual amount due to employees in accordance with law and currentemployment contracts, taking into account all forms of remuneration of an ongoing nature.The provision corresponds to all the individual indemnities accrued up until 31 December 2006 by employeeson the reporting date, net of any advances paid, and amounts to what would be due to employees shouldtheir employment have terminated on that date.The provision does not include the indemnities accrued from 1 January 2007 allocated to supplementarypension schemes under Italian Leg. Dec. 252 of 5 December 2005 (or transferred to INPS (Italian SocialSecurity Institute) treasury).D) PayablesBalance as ofBalance as ofChange31/12/201131/12/2010339,010,958 13,470 338,997,488The payables transferred to the company as of 01/11/2011 amount to € 325,852,253. Their breakdown bydue date is as follows:Description Due within 12 Due after 12 Due after 5 years TotalmonthsmonthsBank loans and overdrafts 77,643,872 96,582,793 174,226,665Advance payments 18,641,472 18,641,472Trade payables 85,984,897 85,984,897Amounts due to subsidiarycompanies 8,989,128 8,989,128Amounts due to affiliatedcompanies 11,396,509 11,396,509Tax payables 9,985,005 6,723,152 16,708,157Social security payables 3,561,643 3,561,643Other payables 6,343,782 6,343,782222,546,308 103,305,945 325,852,253Notes to the financial statements as of 31/12/2011 Page 50

TOTO SPA COSTRUZIONI GENERALIPayables as of 31/12/2011 are stated at their nominal value and are broken down by due date as follows.DescriptionTotalBank loans and overdrafts 75,883,378 73,184,742 24,718,644 173,786,764Advance payments 3,600,000 3,600,000Trade payables 90,670,808 90,670,808Amounts due to subsidiary7,688,232 7,688,232companiesAmounts due to affiliated31,760,943 31,760,943companiesAmounts due to parent companies 903,247 903,247Tax payables 12,829,972 6,745,224 19,575,196Social security payables 3,260,531 3,260,531Other payables 7,765,237 7,765,237234,362,348 79,929,966 24,718,644 339,010,958Bank loans and overdraftsBank loans and overdrafts as of 31/12/2011 amount to € 173,786,764, which includes loans payable andexpresses the actual amount of principal, interest and ancillary charges incurred and due.DescriptionTotalOrdinary C/A 11,637,571Work progress report account 57,316,138"Contracts" advances account 21,307,508"Claims" advances account 15,155,399Loans and financing 68,370,148Total bank loans and overdrafts 173,786,764The “Claims” advance account comprises advances on increased payments requested for contracts awardedby various clients.The item loans and financing consists of:The amount due to WESTLB AG – Milan Branch deriving from the “Loan Agreement”totalling € 52 million for the purchase of the TBM boring machine to be used for theVariante di Valico – Lots 6/7 contract awarded by ASPI. As of the reporting date €47,516,468 had been paid out and € 1,250,000 had been repaid.Amounts due for loans and financing contracted with the following credit institutions:Banca Popolare di Lanciano e Sulmona, Cassa di Risparmio di Chieti and Cassa diRisparmio di Pescara for a residual amount of € 21,500,101. These loans aresecured by collateral on immovable property owned by the company.Advance paymentsThe item “Advance payments” includes the payment on account received from the client Autostrade perl’Italia S.p.A. for services not yet carried out on the reporting date.Trade payables“Trade payables” are recorded net of trade discounts. Cash discounts are recognised at the time of payment.The nominal value of these payables has been adjusted in the event of returns or rebates (invoicingadjustments) by the amount established with the other party.Notes to the financial statements as of 31/12/2011 Page 51

TOTO SPA COSTRUZIONI GENERALIAmounts due to subsidiary companiesAmounts due to subsidiary companies total € 7,688,232. The item is made up of the following entries:DescriptionAmountIMC Srl 4,087,508Tecnofin Srl in liquidation 513,486Consortium Companies 3,087,238Balance as of 31/12/2011 7,688,232Amounts due to consortium companies for the performance of work awarded to joint ventures with othercompanies relate to cash pooling accounts. These payables offset receivables of the same nature totalling €6,446,481.Amounts due to affiliated companiesAmounts due to affiliated companies as of 31/12/2011 total € 31,760,943, details of which are as follows:DescriptionAmountSan Benedetto V.D.S.. Scarl for commercial transactions 23,454,335San Benedetto V.D.S. Scarl for share capital to be paid 2,700Arabona scarl for commercial transactions 2,978,784Novigal scarl for commercial transactions 5,322,640Novigal scarl for share capital to be paid 2,484Balance as of 31/12/2011 31,760,943Tax payablesThe item “Tax payables” includes only taxes due which are certain and of a fixed amount.The following are recorded under the item tax payables: Amounts due for IRAP (regional tax on production) amounting to €371,035. VAT payable amounting to € 14,954,070. VAT deriving from the issue of tax-exempt invoices amounting to €72,635. Withholdings for employee and autonomous worker income in 2011totalling € 2,766,920.Residual amount due for the substitute tax owed following therevaluation of the properties in 2008, pursuant to art. 15 of ItalianDecree-Law 185/2008 (€ 23,942). Penalties and interest for the late payment of taxes and dues (€1,386,594).Social security payablesSocial security payables correspond to the amounts payable to INPS, INAIL and Previndai social securityinstitutes, special construction workers funds and supplementary social security institutes for contributionsincurred during the year.Notes to the financial statements as of 31/12/2011 Page 52

TOTO SPA COSTRUZIONI GENERALIThe item is broken down as follows: INPS contributions for December 2011 for € 1,343,153. INPGI contributions for December 2011 for € 9,212. INAIL contributions totalling € 1,002,869 payable in 2012.INAIL contributions for previous years for € 701,503 not yet paidpending clarification from the institute. Previndai contributions for executives for the 4 th quarter of 2011totalling € 90,801. Contributions due to special construction workers funds totalling €88,444 payable in 2012.Supplementary social security contributions incurred in December2011 totalling € 24,549.Other payablesOther Payables amount to € 7,765,237 and are primarily made up of: Amounts due to employees for monthly pay (December 2011),accrued 13 th month bonus, accrued 14 th month bonus, accruedholiday and leave pay accrued as of 31/12/2011 and still payabletotalling € 3,964,875. Amounts due to subsidiaries, the balance of which as of 31/12/2011is broken down as follows:.DescriptionAmountAir One Executive S.p.A. 156,264Strada dei Parchi S.p.A. 544,462Monteboli S.p.A. 80,303Parchi GS S.p.A. 240,526Infraengineering Srl 1,255,173Amounts due to subsidiaries 2,276,728The breakdown of Payables as of 31 December 2011 by geographic area is shown in the table below.Payables byGeographicAreaTradepayablesDue toSubsidiaryCompaniesDue to AffiliatedCompaniesDue to ParentCompaniesDue to othersITALY 76,037,743 7,688,232 31,760,943 903,247 7,765,237 124,155,402LEBANON 40,464 40,464NORWAY 4,372 4,372USA 26,408 26,408SWITZERLAND 2,510 2,510U. ARAB755 755EMIRATESHONG KONG 12,492 12,492SERBIA 572 572UNITED40,513 40,513KINGDOMROMANIA 655,581 655,581AUSTRIA 77,406 77,406GERMANY 13,340,111 13,340,111FRANCE 411,881 411,881BULGARIA 20,000 20,000Total 90,670,808 7,688,232 31,760,943 903,247 7,765,237 138,788,467TotalNotes to the financial statements as of 31/12/2011 Page 53

TOTO SPA COSTRUZIONI GENERALIE) Accruals and deferred incomeBalance as ofBalance as ofChange31/12/201131/12/2010923,409 923,409These are adjusting entries for the year calculated on an accruals basis.As of 31/12/2011 there are no accruals and deferred income with a duration of more than five years.The breakdown of the item is as follows:DescriptionAmountInsurance premiums 716,403Others of a non-material amount 207,006923,409Memorandum accountsBalance as ofBalance as ofChange31/12/201131/12/2010175,284,786 175,284,786Details of the item are as follows:Description 31/12/2010 Transfer Increase Decrease 31/12/201101/11/2011Other memorandum accounts 0 111,784,786 63,500,000 0 175,284,7860 111,784,786 63,500,000 0 175,284,756As of 31 December 2011 the breakdown of the item other memorandum accounts, which includes insuranceand bank sureties issued in favour of contracting bodies, is as follows:Insurance and bank sureties provided to clients as a guarantee forthe satisfactory performance of the work totalling € 67,799,150.Insurance sureties provided to clients as release of guaranteewithholdings on work totalling € 5,892,851.Insurance sureties provided to clients as a guarantee for advancesreceived for work totalling € 23,500,000.Insurance and bank sureties provided as a guarantee for variouscontractual commitments totalling € 9,203,585.Guarantees issued in the interest of group companies for paymentobligations totalling € 68,889,200.Profit and loss accountAs stated above, following the transfer of the construction unit on 01/11/2011, business activities of thecompany are solely limited to November and December 2011.For this reason analysing changes in balances from the previous year, during which the company was notoperational, is irrelevant.Notes to the financial statements as of 31/12/2011 Page 54

TOTO SPA COSTRUZIONI GENERALIA) Value of productionBalance as of Balance as of 31/12/2010Change31/12/201139,905,748 39,905,748Description 31/12/2011 31/12/2010 ChangeRevenues from sales and services 30,314,925 30,314,925Changes in work in progress to order 6,478,372 6,478,372Increase in own work capitalised 2,904,532 2,904,532Other revenues and income 207,919 207,91939,905,748 39,905,748Reference should be made to the Directors’ Report for the analysis of revenues from sales and services andoverall company performance.Revenues from sales and services are broken down as follows:Revenues by category of businessDescription 31/12/2011 31/12/2010 ChangeWork tender services 28,024,155 28,024,155Work engineering servicesOther 2,498,689 2,498,68930,522,844 30,522,844Revenues by geographic areaArea Sales and services Other revenues TotalItaly 29,897,693 207,919 30,105,612Republic of Moldavia 417,232 417,23230,314,925 207,919 30,522,844B) Costs of productionBalance as of Balance as of 31/12/2010Change31/12/201136,947,309 12,783 36,934,526Description 31/12/2011 31/12/2010 ChangeRaw/ancillary materials and goods for resale 7,653,287 7,653,287Services 20,855,114 10,581 20,844,533Hire and leases 1,226,541 1,226,541Wages and salaries 4,711,376 4,711,376Social security contributions 1,960,852 1,960,852Employee termination indemnities 396,176 396,176Other personnel costs 50,937 50,937Amortisation of intangible fixed assets 716,209 1,000 715,209Depreciation of tangible fixed assets 1,087,990 1,087,990Write-downs of current receivables 16,667 16,667Change in stocks of raw materials (2,127,612) (2,127,612)Provisions for risks 132,000 132,000Other operating charges 267,772 1,202 266,57036,947,309 12,783 36,934,526Notes to the financial statements as of 31/12/2011 Page 55

TOTO SPA COSTRUZIONI GENERALIRaw/ancillary materials, consumables and goods for resaleCosts for raw/ancillary materials, consumables and goods for resale are closely tied to the company’sproduction activity and consist primarily of:Costs for construction materials for € 5,378,998 (cement,aggregates, admixtures, iron and prefabricated and manufactureditems, etc.) Fuel and lubricants for € 1,319,148 Spare parts for € 836,293Service costsService costs amount to € 20,855,114 and consist primarily of: Third party services, € 4,135,214 Transport and sundry rentals, € 1,082,203 Technical consultancy, € 1,080,723 Insurance expenses, € 899,309 Costs charged back by consortium companies for € 9,581,998 Legal and notary expenses and consultancy, € 236,173Hire and lease costsHire and lease costs amount to € 1,226,541 and mostly consist of lease instalments for assets acquiredunder lease agreements with the right of redemption (€ 958,359).Personnel costsThe item includes all personnel expenses, including promotions, changes of category, paid holidays accruedbut not taken and provisions required by law and collective employment contracts.Depreciation of tangible fixed assetsDepreciation was calculated according to the useful life of the asset and its use during production.Write-downs of current receivables and cash at bank and in handThese were recognised on a prudent basis to provide for receivables that the company is not sure it willcollect.Other operating chargesThe item consists primarily of general expenses and taxes and dues for the year other than IRES (corporateincome tax), IRAP (regional tax on production) and VAT.Notes to the financial statements as of 31/12/2011 Page 56

TOTO SPA COSTRUZIONI GENERALIC) Financial income and chargesBalance as of 31/12/2011Balance as ofChange(1,175,474)31/12/20102,065 (1,177,539)Description 31/12/2011 31/12/2010 ChangeFrom receivables classified as fixed140,965 140,965assetsOther financial income 49,823 2,844 46,979(Interest and other financial charges) (1,364,971) (779) (1,364,192)Exchange gains (losses) (1,291) (1,291)(1,175,474) 2,065 (1,177,539)Other financial incomeDescriptionParent Subsidiary Affiliated OtherTotalcompanies companies companiesBank and post office interest 24,099 24,099Interest on loans 9,291 29,454 102,220 140,965Other income 25,724 25,7249,291 29,454 102,220 49,823 190,788Interest and other financial chargesDescriptionParent Subsidiary Affiliated OtherTotalcompanies companies companiesBank interest 720,315 720,315Interest on trade172,407 172,407receivablesInterest on medium-term138,082 138,082creditDiscounts or financial117,337 117,337chargesInterest on loans 174,756 174,756Other charges on fin,42,075 42,075transactionsRounding (1) (1)1,364,971 1,364,971E) Extraordinary income and expenseBalance as ofBalance as ofChange31/12/201131/12/2010(295,733) (52) (295,681)Description 31/12/2011 Previous year 31/12/2010Miscellaneous 58,083 Miscellaneous 36Total income 58,083 Total income 36Penalties for late payment of taxes and dues (178,030)Miscellaneous (175,786) Miscellaneous (88)Total charges (353,816) Total charges (88)(295,733) (52)Notes to the financial statements as of 31/12/2011 Page 57

TOTO SPA COSTRUZIONI GENERALIExtraordinary income and charges consist primarily of adjustments of costs and revenues pertaining to prioryears and to penalties for the late payment of taxes and dues.Income tax for the yearBalance as ofBalance as ofChange31/12/201131/12/2010930,764 930,764TaxesBalance as of Balance as ofChange31/12/201131/12/2010Current taxes: 933,076 933,076IRES (corporate income tax) 562,041 562,041IRAP (regional tax on371,035 371,035production)Deferred (prepaid) taxes (2,312) (2,312)IRES (corporate income tax) (3,196) (3,196)IRAP (regional tax onproduction)883 883930,764 930,764Taxes pertaining to the year were recorded.As stated above, from 2009 the company opted to participate as consolidated company in the NationalConsolidated Tax Regime together with Toto Holding S.p.A.., the latter acting as consolidating company.Financial transactions, liabilities and mutual obligations between the consolidating company and itssubsidiary are set out in the Consolidation regulation for group companies signed on 16 June 2009 andsubsequently integrated and amended.Below the reconciliation between the theoretical tax charge in the financial statements and the theoretical taxcharge is provided.Reconciliation between tax charges shown in the financial statements and theoretical tax charge(IRES)Description Amount TaxesProfit before taxes 1,487,232Theoretical tax charge (%) 27,5 408,989Temporary differences taxable in following years: 0- Amortisation of goodwill 2,292Differences that will not be carried over to subsequent years 0 0- Other non-deductible costs 327,564- Non-deductible write-downs 21,776- Other positive addbacks 204,9200 0Taxable basis 2,043,784Current income taxes for the year 562,041Notes to the financial statements as of 31/12/2011 Page 58

TOTO SPA COSTRUZIONI GENERALICalculation of IRAP (regional tax on production) taxable basisDescription Amount TaxesDifference between value and costs of production 10,226,448Costs irrelevant for IRAP purposes 682,786INAIL (Italian national insurance institute for industrial(371,769)accidents) contributions and obligatory employment expensesDeduction for employed work (1,975,176)8,562,289Theoretical tax charge (%) 3,9 333,929Temporary difference taxable in following years: 0IRAP taxable basis 8,562,289Current IRAP for the year (%) 4,82% 105,744Current IRAP for the year (%) 4,97% 78,597Current IRAP for the year (%) 3,90% 186,694Current IRAP for the year 371,035The information required under article 2427, first paragraph, no. 14, C.C. on deferred and prepaid taxes isprovided as follows:Deferred / prepaid taxesPrepaid taxes were recognised since it is reasonably certain that the company will report a taxable profit infuture years equal to or more than the amount of deductible temporary differences on which they werecalculated.The main temporary differences which resulted in deferred and prepaid taxes being recognised are stated inthe table below together with their effects.Recognition of deferred and prepaid taxes and related effects:Year 31/12/2011 Year 31/12/2010Tax effect Amount of Tax effecttemporarydifferencesAmount oftemporarydifferencesPrepaid taxes:Maintenance expenses 2011 futurecarry forward 63,723 17,524Amortisation of goodwill 2,292 741Recovery of previous years’entertainment expenses (2,972) (961)Recovery of previous years’maintenance expenses (51,421) (14,992)Total 11,622 2,312Deferred taxes:TotalNet deferred (prepaid) taxes 11,622 2,312Notes to the financial statements as of 31/12/2011 Page 59

TOTO SPA COSTRUZIONI GENERALILeasingIn accordance with the instructions provided in the document “OIC 1 – The main effects of the corporate lawreform on the preparation of financial statements”, information is provided in the table below on the effectson Shareholders’ Equity and on the Profit and Loss Account which would have occurred by reporting leasetransactions using the financial method instead of the so-called equity method of charging the instalmentspaid to the Profit and Loss Account.Assetsa) Contracts on handLeased assets at the end of the previous year, net of depreciation 6,819,790+ Assets under financial lease acquired during the year 5,324,330- Assets under financial lease redeemed during the year (23,871)- Depreciation for the year (5,144,208)- Reversal of provision for redeemed assetsAssets under financial lease at the end of the year, net of depreciation 6,976,042b) Assets redeemedHigher total value of assets redeemed, determined according to the financial method, inrelation to year-end net carrying valuec) LiabilitiesFinance lease payments at the end of the previous year 5,589,763+ Residual payments arising during the year 3,862,959- Reductions due to repayment of principal (4,889,257)Finance lease payments at the end of the year 4,563,465d) Total gross effect at the end of the year (a+b-c) 2,412,576e) Net tax effect 779,745f) Effect on Shareholders’ Equity at the end of the year (d-e) 1,632,832The effect on the Profit and Loss Account can be broken down as followsReversal of finance lease payments 5,563,454Reversal of lease down payment 406,885Recognition of financial charges on financial leases (698,068)Recognition of accumulated depreciation (5,120,337)Effect on the result before taxes 151,934Recognition of the tax effect 49,105Net effect on the result for the year of recognition of leasing operations with the102,829financial methodOperations involving repurchase agreementsThe company did not carry out any operations involving repurchase agreements.Information on financial instruments issued by the companyThe company did not issue any financial instruments.Information on the fair value of derivativesIn the previous year the company entered into three interest rate hedging contracts to cover a portion of itsbank debt.Hedging contracts were entered into which introduce a limit to any rise in interest rates, while avoiding theintroduction of mechanisms which could expose the company to any risk.The three hedges introduce the following limits to any increase in interest rates:4.26% - 1 st hedge3.97% - 2 nd hedge4.15% - 3 rd hedgeNotes to the financial statements as of 31/12/2011 Page 60

TOTO SPA COSTRUZIONI GENERALIThe fair value and information on the scope and nature of each category of derivatives of the company areprovided below:1) Contract: INTEREST RATE SWAP− Type of derivative contract: Unlisted financial derivative (Interest RateSwap)− Contract start date: 17/07/2009− Contract end date: 30/06/2015− Purpose: hedging− Notional amount: € 10,000,000− Underlying financial risk: interest rate risk− Market to market value of the derivative contract: € (221,854)− Liability hedged: bank debt2) Contract: INTEREST RATE SWAP− Type of derivative contract: Unlisted financial derivative (Interest RateSwap)− Contract start date: 17/07/2009− Contract end date: 30/06/2015− Purpose: hedging− Notional amount: € 20,000,000− Underlying financial risk: interest rate risk− Market to market value of the derivative contract: € (304,865)− Liability hedged: bank debt3) Contract: INTEREST RATE SWAP− Type of derivative contract: Unlisted financial derivative (Interest RateSwap)− Contract start date: 31/12/2009− Contract end date: 31/12/2015− Purpose: hedging− Notional value: € 20,000,000− Underlying financial risk: interest rate risk− Market to market value of the derivative contract: € (404,456)− Liability hedged: bank debtInformation on related-party transactionsDetails are provided in the Directors’ Report on transactions which took place during the year with subsidiaryand affiliated companies. Other transactions with each related party are remunerated at normal marketconditions and are irrelevant in view of the parameters recommended by CONSOB in regulating relatedpartytransactions no. 17221 of 12 March 2010.Information about off-balance sheet translationsNo such transactions were carried out.Information on independent auditors’ feesAs required by law the fees pertaining to the year for services provided by the auditing firm and its network ofcompanies are stated: Fees due for the statutory auditing of the annual accounts: € 37,000Notes to the financial statements as of 31/12/2011 Page 61

TOTO SPA COSTRUZIONI GENERALIOther informationUnder law the total fees due to directors and members of the Board of Statutory Auditors are stated.PositionFeeDirectors 88,333Board of Statutory Auditors 85,280These financial statements, consisting of the Balance Sheet, Profit and Loss Account and these Notes,provide a true and fair view of the financial situation and operating result for the year and are consistent withthe accounting records.Chairman of the Board of DirectorsAlfonso TotoNotes to the financial statements as of 31/12/2011 Page 62

TOTO SPA COSTRUZIONI GENERALICASH FLOW STATEMENT 31/12/2011 31/12/2010A) OPENING BALANCE OF CASH AND CASH EQUIVALENTS 2,143 115,565B) CASH FLOW FROM OPERATING ACTIVITIESNet profit (loss) for the year 556,468 (10,770)Amortisation/depreciation for the year 1,804,199 1,000Gains (losses) on disposals of fixed assets 36,977Provisions set aside for employee termination indemnities 67,072Increase (decrease) in provisions 4,308,103Decrease due to employee termination indemnities paid out 155,977Write-downs (write-backs) of fixed assetsChanges in inventories (114,507,929)Changes in receivables (108,019,467) (112,871)Change in current financial assets (626,751)Changes in accruals and deferrals (7,743,554)Changes in financial trade payables and other payables due within 12months 158,435,794 9,219(65,533,111) (113,422)C) CASH FLOW FROM INVESTING ACTIVITIESInvestments in fixed assets:1 - intangible (11,677,278)2 - tangible (93,114,588)3 - financial (54,552,123)(159,343,989)D) CASH FLOW FROM FINANCING ACTIVITIESIncreases (decrease) in medium and long-term payables and loans 104,648,611Shareholder contributions 70,579,616175,228,227E) NET CHANGE IN CASH AND CASH EQUIVALENTS (= B+C+D) (49,648,873) (113,422)F) CLOSING BALANCE OF CASH AND CASH EQUIVALENTS (= A+E) (49,646,730) 2,143Chairman of the Board of DirectorsAlfonso TotoCash flow statement - Financial statements as of 31/12/2011

TOTO S.P.A.Companies Register 02208250692REA (Economic Administrative Index) 160647TOTO S.P.A. COSTRUZIONI GENERALIJoint-stock company with sole shareholder managed and coordinated by Toto Holding S.p.A.Registered office in VIALE ABRUZZO 410 - 66013 CHIETI SCALO (CH) Share capital € 50,000,000.00 (fullypaid-up)Report of the Board of Statutory Auditors to the shareholders' meetingpursuant to art. 2429 of the Italian Civil CodeFINANCIAL STATEMENTS AS OF 31/12/2011Dear Shareholders,Following the completion of the group's restructuring, during the year the parent Toto Holdingtransferred to the company, with effect from 1 November 2011, its construction unit, which isinvolved in the design and building of infrastructure and residential and industrial buildings.This extraordinary operation resulted in financial statements being prepared which are not perfectlycomparable with those of the previous year.In the year ended 31/12/2011, we have monitored compliance with the provisions of law and thecompany by-laws, while the auditing firm Kpmg S.p.A. was appointed as independent auditor, asresolved by the ordinary shareholders' meeting on 22 February 2012.The draft financial statements for the year ended 31/12/2011, submitted for approval by the Boardof Directors, were prepared in accordance with articles 2423 of the Italian Civil Code.We gathered information on and monitored, within our area of responsibility, the adequacy of thecompany’s organisational structure, internal control system and administrative and accountingsystem, and their reliability in correctly reflecting the affairs of the company, based on informationfrom the heads of the respective departments and the independent auditing firm and ourexamination of the documentation provided..During the year, we attended the Shareholders’ and Board of Directors’ meetings and, inaccordance with the company’s by-laws, were periodically informed by the directors of thecompany’s performance. We checked that the most important transactions from a financial point ofview carried out by the company during the year took place in accordance with law and the by-laws.We did not note any atypical or unusual transactions, including those carried out with relatedparties.We did not receive any complaints or reports pursuant to article 2408 of the Italian Civil Code.During the year, we did not issue any opinions in accordance with the law.Report of the Board of Statutory Auditors to the shareholders' meeting Page 1

TOTO S.P.A.We have approved the recording of start-up and expansion costs applicable to multiple years in thefinancial statements for a net value of € 13,000.During our supervisory and control activities we did not note any significant matters to be disclosedherein.The firm KPMG, which has taken over the auditing, has issued its report pursuant to art. 14 ofItalian Leg. Dec. 39/2010, stating that the financial statements as of 31/12/2011 provide a true andfair view of the financial position and operating results of the company.The disclosures relate to the transfer, to the option not to prepare the consolidated financialstatements and to the extent of the requests for additional payments and damage made to clients.The significant value of these claims, together with the subsequent delays in receiving the amountsdue for expenses already incurred by the company, had the effects on financial operations describedby the directors in the specific section of their report, in which they emphasise the positive impactof the expected receipt of the claims.We examined the valuation criteria adopted in preparing the financial statements to establishwhether they comply with law and business conditions.We confirm that in preparing the financial statements the directors did not depart from the rules oflaw laid down in art. 2423.4 of the Italian Civil Code.The balance sheet shows a net profit of € 556,468 summarised as follows:BALANCE SHEET- Assets € 416,890,684- Liabilities € 345,649,963- Shareholders' equity (including profit) € 71,240,721- of which Net profit for the year € 556,468INCOME STATEMENTValue of production (non-financial revenues) € 39,905,748Costs of production (non-financial costs) € (36,947,309)Difference € 2,958,439Financial income and charges € (1,175,474)Value adjustments to financial assets € ===Extraordinary income and expense € (295,733)Profit before taxes € 1,487,232Taxes for the year € (930,764)Net profit (Loss) for the year € 556,468In their report, the directors have adequately described the main transactions, including with relatedparties, and their characteristics and financial effects.Report of the Board of Statutory Auditors to the shareholders' meeting Page 2

TOTO S.P.A.In the light of the above, we do not see any reason why the financial statements as of 31/12/2011should not be approved, nor do we have any objections to the Board of Directors’ proposedallocation of the profit for the year.CHIETI, 8 June 2012The Statutory AuditorsChairmanStanding auditorStanding auditorGIOVANNI SMARGIASSIGIUSEPPE RAMUNDO VITOFRANCESCO CANCELLIReport of the Board of Statutory Auditors to the shareholders' meeting Page 3

Independent auditor's report pursuant to art. 14 of Italian Leg. Dec.39 of 27 January 2010To the Shareholders ofToto S.p.A. Costruzioni Generali1 We have audited the financial statements of Toto S.p.A. Costruzioni Generali for the yearended 31 December 2011. The company’s directors are responsible for drawing up thesefinancial statements in accordance with the regulations governing their preparation. Ourresponsibility is to express an opinion on these financial statements based on our audit.2 We conducted our audit in accordance with the auditing standards issued by the ItalianNational Body of Chartered Auditors and Accounting Experts (Consiglio Nazionale deiDottori Commercialisti e degli Esperti Contabili) and recommended by Consob. Thesestandards require that we plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free of material misstatement and are, as a whole,reliable. An audit includes examining, on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by the directors. We believethat our audit provides a reasonable basis for our opinion.For our opinion on the financial statements of the previous year, whose figures arepresented for comparison as required by law, reference should be made to the report bythe Board of Statutory Auditors issued on 14 April 2011.3 In our opinion, the financial statements of Toto Costruzioni S.p.A. as of 31 December2011 comply with the regulations governing their preparation. They are presented clearlyand provide a true and fair view of the financial situation and operating result of TotoS.p.A. Costruzioni Generali for the year ended on that date.4 We wish to draw your attention to the information provided by the directors in theexplanatory notes and in the directors' report:4.1 As part of the process to rationalise group activities, during 2011 the parent Toto HoldingS.p.A. transferred its "construction" branch of activity to the company under a transactionthat was subject to a fair value opinion by a certified accountant appointed by thecompetent court. The subsequent contribution of assets and liabilities resulted inrecognition of a € 49.9 million increase in the share capital in addition to a new sharepremium reserve of € 20.7 million.4.2 As indicated by the directors, a significant proportion of the company's requests foradditional payments and damages from certain clients, amounting to approximately €89.8 million and including € 40.0 million recognised in 2011 and then contributed by theparent and € 8.0 million recognised by the company in the same year, was entered under

Toto S.p.A. Costruzioni GeneraliIndependent Auditor’s Report31 December 2011inventories for work in progress, since it relates to ongoing arbitration proceedings andnegotiations to be settled at the reporting date. Also based on the experience of previousyears, the directors believe that these requests are not in excess of the amount which willbe definitively reported and paid to the company.4.3 Despite holding majority interests, the company made use of the option provided by lawnot to prepare the consolidated financial statements since they will be prepared by theparent company.4.4 As required by law, the company has included in its explanatory notes the essential datafrom the last financial statements of the company which is responsible for itsmanagement and coordination. Our opinion on the financial statements of Toto S.p.A.Costruzioni Generali does not apply to those data.5 The directors of Toto Costruzioni Generali S.p.A. are responsible for preparing adirectors' report on the financial statements prepared in accordance with legal provisions.We are responsible for expressing our opinion on the consistency of the directors' reportwith the financial statements, as required by law. To this end, we have carried out theprocedures indicated by Accounting Standard No. 001 issued by the Italian Body ofChartered Accountants and Accounting Experts and recommended by Consob. In ouropinion, the directors' report is consistent with the financial statements of Toto S.p.A.Costruzioni Generali as of 31 December 2011.Pescara, 08 June 2012KPMG S.p.A.Alfonso SuppaPartner2