GAMMON INDIA LIMITED

Franco Tosi Meccanica S.p.A.
INTRODUCTION
The 2008 financial statements have been drafted according to the International Financial Reporting
Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) and adopted by
the European Union. IFRS means also all the reviewed international accounting standards (“IAS”), all
the interpretations given by the International Financial Reporting Interpretations Committee
(“IFRIC”), formerly Standing Interpretations Committee (“SIC”).
Franco Tosi Meccanica S.p.A. has adopted the International Financial Reporting Standards (“IFRS”)
issued by the International Accounting Standards Board (“IASB”) since the financial year 2007 in
order to prepare its annual financial statements. The reporting required by the IFRS 1 – First-time
adoption of the IFRS, concerning the effects arising from the passage to IFRS, had been reported at
paragraph 5.2 of the annual financial statements as of December 31 st , 2007, to which we refer.
The financial statements are drafted assuming business continuity. As a matter of fact, Franco Tosi
Meccanica S.p.A., has assessed that, despite the difficult economic and financial situation, there is not
a significant instability (as provided in par. 25 of IAS 1) on business continuity, also by virtue of
actions that have already been identified and taken and which the directors’ report on the management
trend will further explain.
The present financial statements are composed of the balance sheet formats, the income statement, and
the statement of net equity, the financial report and the explanatory notes. In addition, it is included
the directors’ report on the management trend.
The 2008 financial statements reported net equity equal to k€ 34,875 following the operating
profit/loss that shows a loss after taxes, equal to k€ 17,662, and following the increase of the capital
share subscribed by Gammon Holdings BV, for an amount equal to k€ 8.554.
The 2008 loss represented a considerable economic improvement compared to the previous year and it
is in line with the Company forecast, confirming that the road taken is providing positive economic
outcomes and, anyway, has improved the financial situation of the Company.
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