Annual Report 2010-2011 - Gammon India

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company during 2010 and also resulted in a slow-down on the execution of some of the principle orders. The entry
of its affiliate company Ansaldo Caldaie Boilers India Private Limited into the supercritical boilers segment has got
further delayed due to the pending litigation with NTPC in the Supreme Court of India. This delay has further affected
the business plan of the company but it is hopeful that the favorable outcome in respect of the litigation at the level
of the High Court would further get up held by the honorable Supreme Court in the days to come. Notwithstanding
this setback with NTPC, the Company is offering jointly with Ansaldo Caldaie Boilers India Private Limited into
several other Indian clients and it is expected that it would meet with success in this respect during the current
year 2011.
Ansaldo Caldaie closed the financial year 2010 with revenues of Euro 128 million (previous year Euro 222 million)
EBITDA of Euro 9.65 million (Previous year Euro 4.936 million) and net result of Euro 0.4 million (previous year
Euro 4.9 million).
In order to stabilize its operations and further improve its performance, including its chances of winning
orders in low cost countries, the company has embarked on a global procurement strategy which would allow
it to source components and services from suppliers in low cost areas. Additionally the company has further
strengthened its service activities by localizing the same through dedicated entities in different markets, which
is already beginning to show results.
In order to further exploit the Indian market in the mid-size segment, the Company is also jointly offering with
Gammon Group company Franco Tosi Meccanica S.p.A. for complete BTF Packages in this segment.
The portfolio of the company as at 31st December 2010 was approximately of Euro 165 million. However the
company has a robust backlog of offers of over 1.5 billion Euro, many of which are expected to have a high rate
of success.
ITEA S.p.A.
This company is dedicated to research activities in generation of clean power using coal, waste and biomass.
While the company has completed most of the technical intervention necessary to optimize the performance
of the plant using waste, it is still occupied with the development phase of the ISOTHERM PWR® plant for oxy
combustion in the coal sector.
However the results so far achieved and the unexpected development in the energy segment as a result of the
nuclear accident in Japan will have a positive impact on the future of ITEA technology and the company is already
witnessing a greater keenness being shown by utility companies in developed nations to commercially exploit
this technology locally. Negotiations have already commenced in this respect with major utility companies in
the United States of America.
For the year 2010 ITEA closed with a significant loss of approximately Euro 4 millions (previous year loss of
approximately Euro 5 millions).
Group Sofinter is expected to clock revenues of Euro 278.1 million during 2011, with a net result of approximately
Euro 0.1 million. The Group is in an advanced stage of further enhancing credit lines with the Banks to meet its
Plans up to December 2014, against further capital infusion of Euro 18 million, for which the participation of a
new investor with a minority stake in Sofinter is under implementation.
Franco Tosi Meccanica S.p.A:
The Company in the financial year 2010 has further consolidated its position in the market as a quality
manufacturer of power generation equipment. New orders were booked during the year amounting to
Euro 197,9 million in comparison to Euro 181,4 million of the preceding year and almost tripled in comparison to
Euro 68,4 million in 2008 when the Gammon Group acquired the Company. Two of the most important orders
bagged by the company in FY 2010 were from Petrobas (Brazil) for the supply of 3 steam turbo-generators
amounting to Euro 36,2 million and from Enel Nicaragua for the rehabilitation of 2 power plants amounting to
Euro 39.7 million, which confirmed the good positioning of the Company in the fast growing Latin-American
market. The Company has been strongly impacted with the cancellation by the customer “Hydrogen Energy
International Ltd.” & “Future Abu Dhabi Energy Company” of the contract for the supply of 1 x 260 MW steam
turbine amounting to Euro 43,7 million for temporary lack of financial coverage, due to the persistent credit freeze
by the banking system. Despite the cancellation of the orders the company has maintained a very interesting
backlog of over Euro 310 million. As mentioned above the difficulty in obtaining timely credit facilities from the
Italian banking system and the delay in tying up for support from banks outside Italy led to a lower volume of
production and consequently a lower turnover of Euro 68.26 million (Euro 92.03 million in 2009).
A NNUAL R EPORT I 2010/11