Annual Report 2010-2011 - Gammon India

The Company sees immense opportunities in the emerging markets such as Africa and Middle East on account
of need for better power transmission network, funding support from multilateral agencies, power generation
plans and spending by oil producing countries. The Company has adopted the route of forming subsidiaries and
JV overseas to enter into newer markets with its subsidiary SAE Power Lines S.r.l., Italy which has been the global
player in T&D sector.
With large Engineering set up, modern testing station and large manufacturing capabilities, the Company is
looking for Tower and Conductor supply opportunities in the United States and Canada.
8. International Business:
Going forward, your organisation’s strategy would be to expand its span and presence across its business especially
in respect to the Energy and Real Estate space. Towards this, the Company is gearing its competitiveness so as
to be a one-stop EPC resource entity and a total surplus provide across the energy value chain. The partnership
with Brookfield Multiplex, Canada for strengthening resource and execution competencies in the real estate
space is an example of your Company’s focus on broad-basing its international presence and capabilities across
its various business functions.
Sofinter Group:
Group Sofinter entered into a new Loan Agreement with the Italian banking system on 1st December 2009
but the actual financing under this document commenced in second quarter of 2010. Thereafter the two main
revenue generating companies of the Group i.e. Sofinter S.p.A. and Ansaldo Caldaie S.p.A. were able to begin to
return to the international markets for undertaking new orders.
The turnover of the Group was therefore considerably restricted mainly to the delivery of backlog orders
which also in some cases were delayed due to the above delay in opening of banks lines. The economic
crisis internationally, including in different parts of Europe, added to the general overall problems within the
Group, especially in Ansaldo Caldaie which operates in the utility power plant segment, and is therefore more
susceptible to economic trends.
Notwithstanding the above constraint, the consolidated turnover of Sofinter for the year 2010 closed with
revenues of approximately 300.48 million Euro (previous year 446.40 million Euro), EBITDA of Euro 16.3 million
(previous year 26.83 million Euro) and a Net Result of – 3.9 million Euros (previous year Euro - 411.588). These
results were after providing an additional amount of Euro 9 million for contract risks provision, compared to
the previous accounting year. Further a loss of approximately 4 million Euro relating to the operations of the
resurge oriented company ITEA has been recognized during this period. A large part of this improvement in
working result arose on account of tighter control of costs across all operations and continuous streamlining of
procedures and processes across the company.
Sofinter (Macchi Division and SWS Division), Ansaldo Caldaie S.p.A and ITEA are the principal companies of the
Sofinter Group.
Sofinter S.p.A. (Macchi Division and SWS Division),
The Macchi Division principally operates in the Oil & Gas industry and the major Oil producing nations are
its principle markets. The projects of Macchi are principally accessed through global EPC contractors. In 2010
Macchi considerably consolidated its market position and its leadership position in the industrial boiler segment
continues to remain and grow. As a further business opportunity, Macchi is expanding its service business by
creating the necessary support centers at different location across its principle markets.
The SWS division operates in parallel with the Macchi division and is in the segment of water treatment with
particular emphasis on desalination plants.
Sofinter S.p.A. recorded a turnover of 118 million Euro (previous year 156 million Euro), EBITDA of Euro 7.08
million (previous year Euro 19 million) and a net result of Euro 1.9 million (previous year 6.5 million Euro). The
closing order book of Sofinter S.p.A. as of 31st December, 2010 was approximately Euro 160 millions.
Ansaldo Caldaie S.p.A.
Ansaldo Caldaie S.p.A. is in the utility power plant segment. Apart from the European market, the traditional
market for the company has been in the Middle-East, which is witnessing varied degrees of political instability. This
factor, coupled with the economic slow-down and delay in opening of bank lines, impacted the order booking of the
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