Toto S.p.A. Costruzioni Generali

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