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09Annual Report
1Annual Report
09
2
Duro Felguera, S.A. 2010Design, desktop publishing and production:
Multiplicamos las Ideas, (Gráfik Estudio)Printers: Eujoa Artes Gráficas.
Aerial view of Puerto de Barcelona regasification plant(page 40) by courtesy of Enagas.
3Index
Letter from the Chairman & CEOMain figures and Milestones
Evolution of Main figuresBalance sheet
Income Statement2009 Milestones
Governing BodiesBoard of Directors
CommitteesCompany Structure
Evolution of BusinessStock Market Information
Activities by Business SegmentsDuro Felguera Energía
Duro Felguera Plantas IndustrialesFelguera - IHI
Felguera Montajes y MantenimientoMompresa
OpemasaFeresa
Montajes Eléctricos IndustrialesFelguera Tecnologías de la Información
TedesaFelguera Calderería Pesada
Felguera MeltFelguera Rail
Felguera Construcciones MecánicasInternational Presence
Corporate Responsibility ReportDirectory
Corporate Governance Report
4910121416
18181920
212631323640424445464748495052535455
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Letter fromthe Chairman & CEO4
1
It would seem obvious to say at the start of thisletter, that we are going through hard times andthat the 2009 financial year was one of thehardest in living memory for most companies.But it would be equally strange to just disregardthe subject not just because it has been extremelyharsh and has conditioned our business overthe year, but also because it will continue toaffect business in general over the next fewyears.
In effect, we have been through a truly hard yearwhich has put many companies to the test and,where we are concerned, has measured thestrength of our business model, based onengineering and construction of industrial plantswith an ever increasing, yet selective and prudent,international expansion.
Well, despite such a sombre economicpanorama, the 2009 financial year -the subjectof this annual report- provided outstandingfigures. And they were outstanding not justbecause they reflect a substantial improvementon the previous year's, but more significantlybecause they are in complete contrast with thetimes of depression and uncertainty we aregoing through.
Whilst SERCOBE (national association ofindustrial equipment companies) estimates,using data compiled from a wide sample ofbusinesses, that 2009 was the worst year forour sector since statistical records exist, DuroFelguera profit, order intake and backlog figuresare at record highs and are indubitably betterthan last year's.
Consolidated sales of 927.7 million euros, similarto figures in 2008, resulted in an EBITDA of 83.5million; a rise of 19.3%. Margins over sales
went from 7.5% to 9.3% which still places usover the average in our sector.
Consolidated profits before tax also rose to 80million euros and profits after tax increased by33.6% reaching a record figure for Duro Felgueraof 70.7 million.
In 2009 Duro Felguera continued to increasethe stability of its balance of accounts and currentassets were reinforced by 33.4 million euros.Treasury remained at around 346 million eurosand working capital finished the year at 116.3million euros all of which shows a frankly positiveposition of liquidity.
The main development in the balance sheetduring the year consisted in a substantialincrease in assets and short term debt due tothe major revenues from new large internationalcontracts which in the near future should providegreater increases in treasury and sales.
A more detailed analysis by segments continuesto reflect the importance of the Major Projectsarea of the business within which Power Projectsreached an income figure of 463 million euros,and Industrial Plants 185 million. As a sum,these figures represent 67.5% of the group'stotal turnover.
The income figures of the Specialised Servicessegment which includes our erection,maintenance and operation companies,increased to 212 million euros, 28% higher thanthe previous year, whilst Manufacturing withincome figures of 99.7 million, showed areduction of 19.4%.
In terms of EBITDA, the contribution made byeach segment as well as being positive wasconsistent with its sales. It is worth noting thatPower Systems, with an operating result of 49.3
5In 2009, Duro Felguera profit,
order intake and backlog figuresregistered record highs
Dear Shareholder:
6
million euros, had a 52% share in consolidatedEBITDA; Industrial Plants and SpecialisedServices had 20% each, whilst the Manufacturingsegment which represents 11% of income, hadan 8% share in the total EBITDA.
In short, Duro Felguera has maintained notablegrowth rate figures in sharp contrast to thegeneral trends of the economy, both the Spanishand international.
But nothing of what has been said up to nowwould be especially satisfying if this were dueto special circumstances or if it wereunsustainable. Yet the high order intakes over2009 and derived from that, the backlog existingat the end of the year, are sufficient reasons toforesee that in spite of the general backgroundof instability, Duro Felguera's business as awhole will continue to grow at the same levelsof the last several years.
In fact total order intake of the group doubledlast year's. We have closed 2009 with contractstotalling a value of 1,876 million euros which isa new record figure for the company.
As a consequence, backlog or works pendingexecution, which is the same thing, at December31st was at 2,065 million euros. This contrastsonce again with last year's 1,110 million andprovides us with a reasonable outlook for futureincome to remain at current levels over the nextthree years.
Furthermore, this backlog consists almostentirely of international projects which areexpected to develop satisfactorily as they arevery similar to previous projects carried out bythe company. Among them worth mentioningare: 1000 MW Termocentro combined cyclepower plant for Electricidad de Caracas; theerection of three HRSGs and auxiliary equipment
at Claus C, for Alstom Power, in Holland; themanufacture of coke drums for Technip-Franceand a major extension of the Ferrominera Orinococontract being carried in Venezuela. On thenational market of note are two large liquefiednatural gas tanks of 150,000 m3 capacity eachfor the Regasification Plant at El Musel (Gijón).
Our vision of the company has not changed inthe last few years meaning that we have beenable to face this crisis with certain calm. In thesector where we operate, companies need tobe forearmed in order to successfully confrontany economic crisis, in the sense that businessplans require a certain amount of time to takehold; something which the market and thecurrent situation do not allow for.And in our case, a decided direction towardsthe international markets and specialisation inlarge project management supported byproviding services to industry are the factorsthat have allowed us to carry on growing despitethe declining economic scenario.
Thus international sales reached peak levels forthe group, similar to the year before, representing47% of income for the year and will surelyincrease in 2010 and the following years as 90%of order intake in 2009 and 86.5% of backlogat the end of the year came from markets abroad.
Furthermore, these figures confirm what we hadforeseen on other occasions: we must continueour international expansion as the basic sectorsof Spanish industry, power, mining, gas, oil,steel, etc., which had always been our maincustomers, are no longer investing due to thedownturn of the economy coinciding with anexcess of installed capacity, a circumstancewhich will continue in the next few years.
Having foreseen this occurrence, we have madeconsiderable efforts and strategic decisions in1
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past years to penetrate and establish newmarkets, signing major contracts in Brazil andIndia which have allowed our entry into twoemerging economies with major potential forgrowth and which should be an importancesource of business in the future for the group.To this aim we have set up subsidiaries, openedsales offices and reached agreements with localpartners in both countries to expand morerapidly.
Also in Europe, where we have had a notablepresence in the last few years, we will try toboost business in the United Kingdom inparticular where great prospects are to be hadin the power sector and where we have beensuccessfull in recent years.
Working along these lines and trying to makethe most of complementing traits whethertechnical, commercial or human, we havereorganised our companies. We have groupedtogether all the subsidiaries dealing with erection,maintenance and operations into one unit orsegment - Specialised Services - and likewisewith the workshops, all of which are located inAsturias, which have become the ManufacturingSegment.
But a company that has maintained a constantgrowth over several years, could not haveachieved this without making continuousinvestments in technology and innovation.Last year 12 new projects got under way toimprove processes and products involving sevenof the group's companies, universities andtechnological centres to the sum of 8.5 millioneuros. These projects have been supported bythe Plan de Ciencia y Tecnología de Asturias(Asturias Science and Technology Plan) or bythe Centro para el Desarrollo TecnológicoIndustrial (CDTI) (Centre for Development ofIndustrial Technology).
Of equal importance has been the acquisitionof 35% of share capital with a call option for anadditional 50% of the company Estudios de
Ingeniería Aplicada -E.I.A.XXI, S.A.- with over30 years experience and 200 professionalsoperating in our business sectors. The aim isto reinforce the engineering area and in particularto support the companies in the group managingturnkey projects in the power and industrialsectors.
On another subject, the development of DuroFelguera on the Stock Market in 2009 was alsohighly positive, occupying fifth place inappreciation on the Spanish market and wellabove the main reference indexes. Our shareswent up by 93.03% closing the year at 7.2 euros.Capitalisation of the company reached 734.5million euros, 354 million higher than last year,nearly double the average of the last six yearsand more than eight times above 2003.
This growth has meant going from trading onthe Ibex Small Caps to trading on the moreselective Ibex Medium Caps, the index whichgroups together medium sized Spanishcompanies.
Our policy of creating value for the shareholdermeant increased payout which also situatesDuro Felguera ahead of other Spanishcompanies, with greater yield per dividend andhigher payouts (65%).
The company has paid out over the year a grossdividend of 0.3672 /share in four quarterlypayments which has meant a profitability rateof 6.07% over the year's mean share price, andalmost 100% of total yield (yield per dividendplus market appreciation). This also places the
7Our vision of the company has not
changed in the last few yearsmeaning that we have been able to
face this crisis with certain calm
company fifth on the Madrid Stock ExchangeGeneral Index in terms of profitability for theshareholder.
The Board of Directors decided upon a paymentof three dividends charged to 2009 results, inaddition to the complementary payout to beproposed at the Annual General ShareholdersMeeting, so the total dividend will rise to 0.4469euros and as a consequence the payout willreach 65%.
Despite the severe economic crisis we are goingthrough, we are optimistic.This is because thedirection we took seven years ago based oninternational expansion, innovation, completeproject management and advanced professionaltraining has proved to be successful. But aboveall because the team of professionals on which
we depend is of the first order. This has beenproved over these last few years and will continueso in the future.
Their commitment to the company is the greatestguarantee for success and I just wanted toexpress this as I thank you dear Shareholderfor your renewed confidence in our company -we will not let you down.
Juan Carlos Torres InclánChairman & CEO
8Our development on theStock Market in 2009 was highlypositive, occupying fifth place inappreciation on the Spanish market
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9Main figures andmilestones
2
EBITDA
2008 2009200720062005
21.7
44.1
63.370
83.5Mill. euros
Sales
2008 2009200720062005
511.2566.4
849.7934.8 927.7
190.3
320.9
180.8
385.6
317.5
532.2
432.1
502.7
436.2
491.5
Domestic marketInternational market
Mill. euros
Consolidated profitbefore tax
2008 2009200720062005
20.6
40.0
60.170.4
80Mill. euros
Consolidated profitafter tax
2008 2009200720062005
24.9
35.844.6
52.9
70.7Mill. euros
10
2 Ev
olut
ion
of m
ain
figur
es
2Evolution of
main figures
Evolution of EBITDA margin
2008 2009200720062005
5.4%
7.8% 7.5% 7.5%
9.0%
Treasury
2008 2009200720062005
100
210
314362 346
Mill. euros
Evolution of PBT Margin
2008 2009200720062005
4.0%
7.1% 7.1%7.5%
8.6%
Order intake
2008 2009200720062005
726 7601,003
804
1,876Mill. euros2
11
Backlog
2008 2009200720062005
9711,187 1,266 1,110
2,065
Mill. euros
12
2 C
onso
lidat
ed b
alan
ce s
heet
(Thousand euros)
2008113,426
9,848
156
1,238
1,573
20,264
-
362
2,590
9,628
159,085
29,626
358,691
691
2,889
361,767
753,664
912,749
2009111,602
11,234
-
1,308
4,886
10,846
1,956
362
1,906
12,632
156,732
29,162
609,558
461
998
346,072
986,251
1,142,983
ASSETSProperty, plant and equipment
Investment property
Goodwill
Intangible assets
Investments in associates
Financial assets held to maturity
Financial assets at fair value through profit and loss
Available-for-sale financial assets
Trade and other receivables
Deferred tax assets
NON-CURRENT ASSETS
Inventories
Trade and other receivables
Financial accounts receivable
Financial assets at fair value through profit and loss
Cash and cash equivalents
CURRENT ASSETS
TOTAL ASSETS
Consolidatedbalance sheet
13
200851,008
3,913
(737)
104,643
(16,323)
142,504
10,786
153,290
11,543
35,213
14,419
8,476
7,132
1,119
66,359
19,788
627,497
233
2,751
8,618
22,670
681,557
912,749
200951,008
3,913
(819)
141,188
(19,383)
175,907
10,857
186,764
10,076
57,795
-
8,426
7,379
2,569
76,169
31,549
791,925
-
2,466
10,509
33,525
869,974
1,142,983
LIABILITIESCapital
Share premium
Cumulative translation difference
Retained earnings and other reserves
Less: Interim dividend
NET EQUITY ATTRIBUTED TO HOLDERS OF EQUITY INSTRUMENTS IN THE PARENT COMPANY
Minority shareholdings
NET EQUITY
DEFERRED REVENUES
Borrowings
Trade and other payables
Deferred tax liabilities
Obligations for employee provisions
Provisions for other liabilities and charges
NON-CURRENT LIABILITIES
Borrowings
Trade and other payables
Financial liabilities
Current income tax liabilities
Obligations for employee provisions
Provisions for other liabilities and charges
CURRENT LIABILITIES
TOTAL LIABILITIES AND EQUITY
2(Thousand euros)
20082009
Ordinary revenues
Changes in inventories of finished goods and work in progress
Raw materials and consumables
Employee benefit expenses
Depreciation/amortisation of PPE and intangible assets
Operating expenses
Other net gains / (losses)
Operating profit
Net financial costs
Gain (loss) on sale of financial instruments
Share of (loss)/profit of associates
Profit before taxes
Income tax
Profit for year
Attributable to:
Equity holders of the parent company
Minority interests
Earnings per share on profit from continuing activities attributableto Company's shareholders during the year(expressed in Euros per share)
- Basic
- Diluted
927,727
(5,910)
(575,821)
(142,438)
(7,354)
(110,600)
(10,446)
75,158
3,685
136
1,050
80,029
(9,293)
70,736
70,136
600
934,720
560
(628,883)
(128,182)
(7,224)
(106,709)
3,308
67,590
4,206
(1,903)
545
70,438
(17,553)
52,885
51,326
1,559
0.700
0.700
0.508
0.508
14
2 C
onso
lidat
ed in
com
e st
atem
ent
Consolidated income statement
(Thousand euros)
20082009
215
January
16 2009 Milestones
2 20
09 M
ilest
ones
FebruaryPresentation of yearly results for
2008. Consolidated net profit reached
52.9 million euros having increased by
18.6%. Turnover grew by 10% to 934.7
million. New order intake was at 802
million euros which placed backlog at the
end of the year at over 1,100 million.
March
AprilPresentation of results for the firstquarter. The group's net profits are at11.7 million euros, 4.7% higher thanthe same period in the previous year.Turnover increases by 21.9%, goingover the 219 million mark.
May
June
The AGM of the company's shareholders is held on the 7th.The attendance quorum reaches 79.40% of total fully subscribedshares. Of this percentage 32.18% attended in person and47.22% were represented.
Duro Felguera wins a 1,500 million-euro-contract in Venezuelato execute the Termocentro combined cycle power generationfacility on a turnkey basis. The plant will be located 40 kilometresfrom Caracas and will have an output of 1,040 MW.For the sixth year running the company takes part in theinternational energy trade fair Power Gen Europe, held inCologne (Germany).
The San Martin combined cycle and the Genelba open cycleconstructed by Duro Felguera go into operation in Argentina.
Duro Felguera Energía, Duro Felguera PlantasIndustriales and staff complete the move to thenew company headquarters at the Parque CientíficoTecnológico de Gijón, which will improve efficiencyand inter-relationships between the subsidiariesspecialised in management of major projects.
The company publishes the first biography of PedroDuro Benito, the businessman from La Rioja whoin 1858 set up the company Duro y Cía, ametalworking factory in La Felguera (Asturias).
Payment of third dividend, to sum of0.0813836 euros gross per share chargedto 2008 results.
The company participates in the IberianSmall &Mid Caps forum in Paris whereSpanish companies of small and mediumsized capital present themselves tointernational analysts and investors.
Payment of complementary dividend chargedto the 2008 results to the sum of 0.09184874euros gross per share.
Duro Felguera participates in the Small Capspresentation held in Madrid and organised bythe company Bolsas y Mercados.The company also attends a meeting with NewYork analysts.
The Tierra Amarilla open cycle plant goes intooperation, the first of its kind to be executedby the company in Chile.
2
17
July
September
August
OctoberFederico Guitarte Delgado, who has a
bachelor's degree in phsycology, is
appointed manager of Duro Felguera
Human Resources.
Presentation of third quarter results. Net
profits increased by 15% to 38.5 million
euros whilst turnover at 30 September
reached 656.7 million, 19.8% higher than
the same period in 2008. November
December
Presentation of results for the first semester ofthe financial year. Consolidated profit after taxrose by 22.6% and reached 30 million euros.Turnover is at 453.8 million, a 8.2% rise.
The new organisation of the group comes intoforce. It is structured into four business segments:Energía (Power Systems), Plantas Industriales(Industrial Plants), Servicios (Services) andFabricación (Manufacturing). Antonio MorteraMorán and Carlos Ruíz Cornejo join the ManagementCommittee as managers of Services andManufacturing respectively.
Felguera-IHI is awarded a contract for engineering,supply and construction of two liquefied natural gasstorage tanks for the new regasification plantbelonging to ENAGAS at the port of El Musel in Gijón(Asturias).
Duro Felguera participates in theAsturias International Trade Fair witha stand showing the company'sbusiness development on theinternational markets where more than80% of the group's contracts areconcentrated.
Payment of first dividend charged to 2009results to the sum of 0.09190390 euros grossper share.Small & Mid Caps forum held in Cascais(Portugal).
José María Nebot Lozano is appointedsecretary of the Board of Directors. He is aState lawyer on leave of absence. Nebot is amember of Real Academia de Jurisprudenciay Legislación (Royal Jurisprudence and
Legislation Academy) and secretary of the FinanceLaw section of the institution.
Duro Felguera acquires 35% of capital of the companyEstudios de Ingeniería Aplicada, EIA XXI, and keeps a calloption over the company for an additional 50%.
The Madrid and Barcelona stock exchanges holdpresentations of the company by the chief directors of thegroup. Both acts are organised by the Instituto Españolde Analistas Financieros (Spanish Institute of FinancialAnalysts).
Felguera Montajes y Mantenimiento signs a contract withAlstom Power Nederland to the sum of 20 million euros forthe mechanical erection of three HRSGs at the Claus C combinedcycle power plant in Holland.
The magazine Capital awards DuroFelguera for being such a long-standingbusiness.
Payment of the second dividend chargedto 2009 results to the sum of 0.10211544euros gross per share.
Governing Bodies18
3Mr. Juan Carlos Torres Inclán
Inversiones Somió, S. L.(represented by Mr. Juan Gonzalo Alvarez Arrojo)
Inversiones El Piles, S. L.(represented by Mr. Angel Antonio del Valle Suárez)
Construcciones Urbanas del Principado, S. L.(represented by Mr. Javier Sierra Villa)
Construcciones Termoracama, S. L.(represented by Mr. Ramiro Arias López)
Residencial Vegasol, S. L.(represented by Mr. José Antonio Aguilera Izquierdo)
Construcciones Obras Integrales Norteñas, S.L.(represented by Ms. Marta Aguilera Martínez)
Liquidambar Inversiones Financieras, S.L.(represented by Mr. José López Gallego)
Chairman & CEO
Vice-chairman
Chief Executive Officer
Member
Member
Member
Member
Member
Board of directorsMr. Marcos Antuña Egocheaga
Mr. Acacio Faustino Rodríguez GarcíaMr. José Manuel Agüera Sirgo
Mr. José María Nebot LozanoMr. Agustín Tomé Fernández
Mr. Ramón Colao Caicoya
MemberMemberMember
Secretary Non-MemberLegal AdvisorHonorary Chairman
19
Mr. Juan Carlos Torres InclánMr. Acacio Faustino Rodríguez García
Residencial Vegasol, S. L.Inversiones El Piles, S. L.
Construcciones Obras Integrales Norteñas, S. L.Mr. Secundino Felgueroso Fuentes
Mr. Agustín Tomé Fernández
ChairmanMemberMemberMemberMemberSecretary Non-MemberLegal Advisor
Executive Committee for Contracts, Investments and Projects
Mr. Marcos Antuña Egocheaga Mr. Juan Carlos Torres Inclán
Mr. José Manuel Agüera SirgoInversiones El Piles, S. L.
Construcciones Obras Integrales Norteñas, S. L. Mr. Secundino Felgueroso Fuentes
Mr. Agustín Tomé Fernández
ChairmanMemberMemberMemberMemberSecretary Non-MemberLegal Advisor
Audit Committee
Construcciones Termoracama, S. L.Mr. Acacio Faustino Rodríguez García
Inversiones El Piles, S. L.Residencial Vegasol, S. L.
Mr. Agustín Tomé Fernández
ChairmanMemberMemberMemberSecretary and Legal Advisor Non-Member
Committee for Appointments, Remuneration and Expediting of Standars
Mr. Juan Carlos Torres Inclán Mr. Ángel Antonio del Valle Suárez
Mr. Mariano Blanc Díaz Mr. Francisco Martín Morales de Castilla
Mr. Félix García Valdés Mr. Antonio Mortera Morán
Mr. Carlos Ruiz Cornejo Mr. Agustín Tomé Fernández
ChairmanChief Executive OfficerCFOPower Systems Line ManagerIndustrial Plants Line ManagerSpecialised Services Line ManagerManufacturing Line ManagerLegal Counsel Manager
Management Committee
Mr. Emilio Ontiveros BaezaMr. Claudio Aranzadi MartínezMr. Antonio Fernández Segura
Mr. Eduardo Sánchez MorrondoMr. Acacio Faustino Rodríguez García
Advisory Committee
20 Company Structure
3 C
ompa
ny S
truc
ture
3Duro Felguera S.A.
Energía
Power Systems
Duro FelgueraPlantas Industriales
S.A.
FelgueraContrucciones
Mecánicas, S.A.
FelgueraCalderería
Pesada, S.A.
Técnicas deEntibación, S.A.
(TEDESA)
Felguera Melt, S.A.
Felguera Rail, S.A.
Industrial Plants
Felguera IHI, S.A.
Specialised Services
Felguera Montajesy Mantenimiento,
S.A.
FelgueraRevestimientos,
S.A.
Montajes deMaquinaria dePrecisión, S.A.(MOMPRESA)
Operación yMantenimiento, S.A.
(OPEMASA)
Montajes EléctricosIndustriales, S.L.U.
(MEI)
FelgueraTecnologías de laInformación, S.A.
Manufacturing
21Evolution ofBusiness
4
2009 was a year marked by the virulence of thefinancial crisis whose impact on the industrialsector was felt as a sharp fall in investmentwhich was especially acute in Spain. In thisscenario, Duro Felguera was able to reap somehighly favourable benefits, maintaining the traitsof growth shown in previous years and furtherstrengthened for the immediate future thanksto new contracts. The main income statementindicators improved despite stability of sales.Profits and margins increased considerably andthe company maintains solid finances and aperfectly healthy balance.
The ever-increasing internationalisation of thebusiness and progressive specialisation inexecuting major industrial and power projectsand providing specialised services has allowedthe company to dodge the effects of the financialcrisis whose impact on the sectors where itoperates is being more severe on the domesticmarket and particularly on the manufacturingside of the business.
Duro Felguera results grew in 2009 for the sixthyear running which is highly significant giventhe context of a major recession and this hasbeen welcomed by the stock market as evidencedby the excellent behaviour of the company'sshares.
Consolidated profits before tax closed the yearat 80 million euros; 13.6% higher than 2008and doubles the figures of only four years ago.In absolute terms, the inter-annual gross incomeincrease was 9.6 million euros.
The tax rate decreased considerably in 2009due to the fact that profits were obtained in theirmajority from projects abroad which is not onlyin line with the decided focus on internationa-lisation of the group but which also made theapplication of exemptions permitted in Spanish
law viable. And so consolidated income aftertax registered an increase of 33.6% to 70.7million euros, i.e. 17.8 million higher than lastyear. Profit attributable to the parent companywas 70 million euros, having increased by 36.6%
Of the 130 companies that trade shares on theMadrid Stock Exchange, Duro Felguera wasfourth in highest inter-annual net profit growthin relative terms. As a whole the companiestrading in Spain earned 11.9% less than in 2008and many fell or went into the red.
In line with the tendency that Duro Felguera hasshown in the last few years, in 2009 all thebusiness segments (Power Systems, IndustrialPlants, Specialised Services and Manufacturing)made positive contributions to the group'sresults, thus maintaining the positivedevelopment of the company and an increasein size. However, the contribution made by eachsegment to company profits was disparate aswas the inter-annual variation.
The Power Systems segment contributed mostto the gross results of the group by obtaining51.5 million euros, followed by Industrial Plantswhose earnings reached 20.2 million. As a wholethe two segments dealing in management oflarge projects provided 78.6% of the globalincome before taxes. Besides, the SpecialisedServices segment obtained a result of 16.1million euros , i.e. 17.6% of the total, a 29.8%increase in comparison to last year. Finally, asa consequence of the deep impact of the crisison the Manufacturing segment, the group'sworkshops had reduced income figuressignificantly in 2009 to 3.4 million euroscompared to 17.8 million the year before.
At the close of the financial year the EBITDA orgross income figure of the company was at 83.5million euros which is over 19.4% higher than
22
4 Ev
olut
ion
of B
usin
ess
2008
70.4 80.0
2009
Consolidated profitbefore tax
Mill. euros
+13.6%
2008
52.9
70.7
2009
Consolidated profitafter tax
+33.6%
Mill. euros
last year and attained by a positive contributionfrom all the business segments.
Breaking down this parameter by segments andwithout eliminating inter-group operations, thecontribution made by Power Systems was 52%whilst Industrial Plants made up 20%. The twoareas dedicated to executing major projects ona turnkey basis together achieved an EBITDA of68.6 million euros which is a 65.7% rise overthe 2008 figure. Thus, their weight in the grossincome result increased by 20 points andrepresented 72%.
The Specialised Services segment improved by28.5% on the previous year and reached 18.5million euros, which is 20% of the total. Thedownturn of the Manufacturing segment meanta notable decline in its EBITDA, only reaching7.4 million euros, i.e. the 8% remainder of thegroup's total.
The improvement of results in 2009 is especiallysignificant if we consider that they were producedin a year where sales were maintained at similarlevels to last year as a consequence of: theadverse economic situation which has producedenormous restrictions to investment in industryin developed countries; the decline in orderintake in 2008 and the fact that many of theimportant projects for the group were still intheir initial stages. In these circumstances, theturnover figure at the close of 2009 was at 927.7million euros, 0.7% lower than a year before.
International Sales increased slightly to 436million and therefore turnover from abroadcontinued to increase as it had done in the pasttwo years, and had more weight in the totalturnover figure by up to 47%. In contrast, saleson the domestic market went down by 2.2%compared to 2008.
An analysis of sales by segment and withoutinter-group eliminations reveals that the activityof major projects in the Power and IndustrialPlants areas (including fuel storage) is still themain source of income for the group
representing 67.5% of the total turnover figure,despite the 0.7% fall in sales registered lastyear. The Power segment turnover amountedto 463 million euros and same figure forIndustrial Plants totalle 185.2 million.
The companies within the Specialised Servicessegment together registered an improvedevolution of sales, reaching revenue figures of212 million euros, 28% higher than the previousyear, rising to 22.8% of the group's incomefigure and going up five points.
With reference to the Manufacturing segment,its turnover in 2009 was 99.7 million eurosgoing down by 19.4%. The workshops thereforecontributed 10.7% to the annual turnover, twopoints below 2008.
The company's margins improved in 2009 forthe second year running both in relation toEBITDA going from 7.5% to 9%, and regardingprofits before tax, at 8.6% compared to the7.5% of the previous year. This means thatprofitability over sales has doubled in five yearsplacing us among the highest in the sector. Theimpact of the crisis on the Manufacturingsegment caused a sharp decline in margins sothat profit before tax over sales was at 3.4%.
Within the major projects activities the PowerSystems segment improved its PBT marginconsiderably by up to 11.1%. Lastly, yield onsales of the Specialised Services segment was7.6%.
As regards the evolution of personnel costs,these grew less that last year. In 2009 these
23The group's turnover from
abroad continued to increaseas it had done in the
past two years
4
2008
70.083.5
2009
EBITDAMill. euros
+19.3%
ManufacturingSpecialised Services
Power SystemsIndustrial Plants
EBITDA by businesssegments
8%
20%
52%
20%
2008
934.8 927.7
2009
SalesMill. euros
-0.7%
24
4 Ev
olut
ion
of B
usin
ess
went up by 11.7% as a consequence of a 10%increase in the average personnel rate. Inaddition, the percentage of personnel costs oversales rose slightly to 15.4%.
During 2009, Duro Felguera continued toincrease the stability of its balance of accountsand reinforced is assets by 33.4 million euros.The company's treasury is at 346 million andworking capital is at 116.3 million euros, whichmeans a frankly positive situation in terms ofliquidity.
Order intake and backlog
For several years now, one of the main objectivesfor Duro Felguera has been to take a strongholdon the market in managing major turnkeyprojects for power generation, mineral handlingand fuel storage installations whilst strengtheningservices for the power and industrial sectors,and in both cases via an increasinginternationalisation of business. To attain thefirst of these milestones the company has triedto obtain ever larger projects in specialitieswhere it is experienced and where possible onfamiliar markets or for previous customers.Thisis a strategy which has become obligatory asthe financial crisis affected the sectors whereDuro Felguera operated, given that the recessionhas caused a fall in investments in power andindustrial installations, especially on the domesticmarket.
Well, during 2009 the group achieved thisobjective with two major contracts for largeprojects: one of them is the Termocentrocombined cycle power generation plant inVenezuela which stands out for its 1,500 millioneuros and for opening the door for the PowerSystems line to this new market which wasalready familiar to the company in the industrialfield; the other project, the construction of twovery large LNG tanks in Asturias, confirms thetrust of a long-standing customer - Enagas - inour subsidiary Felguera IHI, who strengthensits position as the national leading company in
constructing this type of installation. To achievethe second objective mentioned, the growth oferection, maintenance, overhauls,commissioning and operation activities at powergeneration and industrial installations, thecompany needed to go abroad due to the fallingdemand in Spain. Here too in 2009 the companyachieved what it set out to do thanks to newcontracts awarded to the companies making upthe Specialised Services segment, in variouscountries in Europe and Latin America, mainlyin the power generation sector.
Therefore, the year closed with new contractsamounting to 1,876 million euros, a record forDuro Felguera and which is over 133% higherthan last year's figure. Of the total amount fornew contracts in 2009, more than 1,682 millioneuros, i.e. nearly 90%, came from abroad. Thisfact, which is evidently heavily weighted by thecontract for the Termocentro gas-fired facilityin Venezuela, means that the international orderintake figure was multiplied by 3.5 comparedto 2008.
New order intake in Spain however, went downby 42.4% compared to last year, to 194 millioneuros. This decrease in contracts can beexplained to a great extent by the sharp fall ininvestment on power generation facilities giventhat those already installed amply meet theinternal demand which has fallen as a directresult of the financial crisis. Something similarhas happened in the petrochemical sector wherethere have been hardly any new investmentsexcept those already planned to extend certainfacilities; likewise in the steel industry.
The evolvement of order intake by segment ofactivity in 2009 fell in line with the objective ofthe company of strengthening major projectmanagement, which is evident given the sharprise in new contracts corresponding to this typeof business, whose figures went over 1,700million euros; 3.3 times higher than in 2008.
Sales by segments
10.4%
22.1%
19.3%48.2%
0 200 400 600 800
Manufacturing
SpecialisedServices
Power Systems
IndustrialPlants
99.7
212463
185.2
Data in million euros and without inter-group eliminations
53%47%
Sales bygeographical areas
Domestic MarketInternational Market
491.5436.2
Mill. euros
2008
7.5%8.6%
2009
PBT Margin
2008
362 346
2009
TreasuryMill. euros
-4.4%
And so project activities in the power, industrialplant and fuel storage areas concentrated 91%of all order intake for the group compared to63% the year before. The Power Systemssegment virtually monopolised Duro Felgueraorder intake figures with 79.4% thanks to theTermocentro project, whilst the Industrial Plantssegment which includes Felguera IHI - thespecialist in the fuel storage area - represented11.6%.
Order intake for Duro Felguera PlantasIndustriales itself reached 123.5 million euroswith nearly 93% coming from abroad. FelgueraIHI contracts summed up just over 94 millioneuros of which the two LNG storage tanks forthe regasification plant at the port of El Muselin Gijón (Asturias) stand out.
Alter the significant increase of contractsregistered in 2008, the Specialised Servicessegment was severely affected in 2009 by thesudden halt in demand, incorporating newcontracts to the sum of 93.6 million euros, muchlower than the previous year. Although theirweight in the overall order intake figure wassignificantly reduced, the companies of thegroup dedicated to these activities were stillhighly involved in the international markets fromwhere more than half of their new contractscame in 2009.
Worth highlighting is the mechanical erectionproject at the Claus C combined cycle plant inHolland, subscribed by Felguera Montajes yMantenimiento with Alstom Power Nederlandfor 20 million euros, as well as various contractsawarded to Montajes de Maquinaria de Precisión(Mompresa) by Siemens for works on powergeneration facilities in Peru. For theManufacturing segment the amount for contractsawarded in 2009 was 30% lower than last year,totalising 74.4 million euros of which 43% camefrom markets abroad.
The financial crisis is having a very deep impacton this line of business and especially in Spainwhere there has been a considerable decline inorders for industrial equipment.
In terms of order intake volumes among theworkshops, Tedesa stands out with over 27.6million euros, as well as Felguera CaldereríaPesada for the high percentage of new contractsfrom companies abroad although for amountswhich are not very significant to the group asa whole.
The sharp rise in order intakes meant that 2009closed with a backlog of 2,065 million euros, a
figure which almost doubles the previous year'sand which is a new record for the company.Thisallows business prospects to extend furtherahead by over three years.
The intense commercial activity carried out onthe international scene, which produced majorcontracts in 2009, has caused a significantincrease to the foreign backlog of the company.At 31 December it stood at 86.5% of all workspending execution.
25Order intake obtained in theyear amounted to the recordfigure of 1,876 million euros
4
ManufacturingSpecialised Services
Power SystemsIndustrial Plants
74.493.6
1,490217.7
Order intake bybusiness segments
79%
Mill. euros
12%
5%4%
Domestic MarketInternationalMarket
2008
804
1,876
2009
Order Intake
89.7%
58%
42% 10.3%
Mill. euros
+133%
2008
1,110
2,065
2009
Backlog
86.5%
52.2%
47.8% 13.5%
Mill. euros
+86%
Domestic MarketInternationalMarket
Stock Market Information26
5
The 2009 financial year was highly positive forDuro Felguera, not only for its results, orderintake and backlog but also for its behaviour onthe stock market. The company's shares wentup by 93.03%, going from 3.73 euros per shareat the end of 2008, to 7.2 euros per share at theclose of 2009.
Market capitalisation of the company reached734.5 million euros; 354 million more than theyear before, nearly double the average in thelast six years and more than eight times higherthan 2003.
For another year running, appreciation of DuroFelguera on the stock market was well abovethe reference indexes. Duro Felguera was fifthon the Spanish market in terms of appreciationin 2009 and third on the Madrid Stock ExchangeGeneral Index.
During the same period, the Ibex 35 went up by29.8%, whilst the Madrid Stock ExchangeGeneral Index rose by 27.2% and the IbexMedium Cap, in which Duro Felguera is included,by 14.2%. The rise in Duro Felguera shares wasonly surpassed by two companies of the Ibex
35: Técnicas Reunidas and OHL, and anothertwo from the continuous market: Vueling andJazztel.
This behaviour is even more outstanding if weconsider that 2009 was the second best yearfor the stock market during the decade, just onepoint below the rise registered in 2006. TheSpanish Stock Market exceeded the majority ofthe European markets.
This appreciation, market capitalisation andliquidity obtained on the Stock Market hasallowed Duro Felguera to trade, for the first timein its history, on the Ibex Medium Caps, theindex which groups Spanish companies ofmedium-sized capital, having traded on the IbexSmall Caps in the previous years.
117.98%
105.27%
102.31%
93.03%
91.53%
89.29%
84.55%
81.35%
71.11%
0% 50% 100% 150% 200% 250% 300%
2009 Appreciation ranking on the Stock Exchange Market
Vueling
Técnicas Reunidas
Jazztel
OHL
Duro Felguera
Abengoa
Arcelor Mittal
Española del Zinc
Antena 3
Banco Santander
273.94%
27
90.2 116.8
245.6
758.0886.5
380.5
734.5
2003 2004 2005 2006 2007 2008 2009
Duro Felguera Market Capitalisation
Mill. euros
The appreciation in 2009 hasallowed Duro Felguera trade on
the Ibex Medium Caps
This growth comes in a highly volatile year forthe stock markets, with company results markedby sharp falls in demand and lack of credit. Inthis context, Duro Felguera was able to maintainif not increase the main figures of the groupboth in terms of quantity and profitability whichno doubt the market appreciated and which wasreflected by evaluations made by market analysts.
The management of Duro Felguera gearedtowards creating value for the shareholder ischannelled into a share out of dividends whichalso places Duro Felguera at the head of Spanishcompanies with greater profit per dividend andgreater payout (percentage of profit assignedto dividends).
Payout in 2009 stood at 65%, one of the higheston the Spanish Stock Market for another yearrunning, once again showing a focus on
management geared towards creating value forthe shareholder.
Duro Felguera has paid out over the year a grossdividend of 0.3672 euros per share in fourquarterly payments which meant a yield of 6.07%over average share price and 100% total profit,and which also placed the company fifth on theMadrid Stock Exchange General Index in termsof profitability for the shareholder.
It is also worth noting that 75 companies onthe Madrid Stock Exchange General Index didnot attain yield rates of their reference indexesand 34 showed negative profit figures, whichmakes Duro Felguera's favourable developmenteven more outstanding.
Share trading volumes of Duro Felguera sharesrose to 163.57 million euros, which is an increase
28
6.70%
6.40%
6.31%
6.30%
6.07%
5.82%
5.38%
5.29%
5.08%
0% 1%
Ranking based on 2009 dividend yield
Bolsas y Mercados Españoles
Dinamia
Criteria
Endesa
Telefónica
Duro Felguera
ACS
Gas Natural
Banesto
Banco Popular
6.80%
2% 3% 4% 5% 6% 7% 8%
200
150
100
50
0
2/1/
09
16/1
/09
30/1
/09
13/2
/09
27/2
/09
13/3
/09
27/3
/09
10/4
/09
24/4
/09
8/5/
09
22/5
/09
5/6/
09
19/6
/09
3/7/
09
17/7
/09
31/7
/09
14/8
/09
28/8
/09
11/9
/09
25/9
/09
9/10
/09
23/1
0/09
6/11
/09
20/1
1/09
4/12
/09
18/1
2/09
Duro FelgueraIbex Small CapIGBM Ibex 35
Duro Felguera vs reference financial indexes
29
5Creating value for the shareholder
Revalorización Rentabilidad pordividendo*
Rentabilidadtotal
2005
2006
2007
2008
2009
109.92%
170.18%
10.96%
-56%
193%
3.48%
3.44%
2.52%
10.53%
6.07%
13.40%
73.62%
13.48%
-45.47%
199.07%
* Dividend yield calculated as a sum of dividends received in the financial year divided by the yearaverage share price.
of 17.26% compared to the previous year. Inshare numbers, 25.91 million shares were tradedmaking a capital turnover of 25.4% in the year.
The achievements made by Duro Felguera in2009 are a result of the trust in the company'smanagement awakened among investors.
A management with highly positive resultsdespite the crisis, which has meant: a growingbacklog of projects, creating prospects for thegroup's growth in the next few years; greaterprofitability than its peers and a healthy financialsituation; all of which makes it possible to facethe future with confidence and positiveexpectations of sustained growth. In 2009, allof the recommendations made by analysts onDuro Felguera were favourable.
121.09%
105.27%
104.67%
99.10%
92.38%
90.93%
84.55%
83.16%
75.86%
0% 50% 100% 150% 200% 250% 300%
Ranking in terms of total profit for the shareholder in 2009
Vueling
Técnicas Reunidas
Jazztel
OHL
Duro Felguera
Abengoa
Arcelor Mittal
Española del Zinc
Antena 3
Banco Santander
273.94%
Management geared towardscreating value for the
shareholder is channelled into agrowing payout of dividends
30
5 S
tock
Mar
ket I
nfor
mat
ion
5
Year-end closing price (euros)Net Profit per SharePER (Price/PPS) (times)Net Cash Flow per Share (CFS) (Euros) (*)PCF (Price/CFS)(times)Accounting value per SharePrice/Accounting valueDividend per Share ( )(*)Dividend Yield (%)Number of Shares (at year close)Number of Shares after splitCapitalization at year close ( )
7.20.69
10.470.749.731.724.190.37
6.07%(**)102,016,601102,016,601734,519,527
3.730.507.410.606.221.402.660.39
10.53%102,016,601102,016,601380,521,922
8.690.42
20.870.53
16.521.396.250.19
2.20%102,016,601102,016,601886,524,263
For purposes of comparison between years, historical data has been adjusted due to the 1x6 split carried outin June 2006.(*) Calculated in accordance with number of shares at year close.(**) In accordance with mean share price during the period. 5.10% according to share price at year close.
2009 20072008
Stock market indicators in the last three years
31Activities byBusiness Segments
5
6
2009 was very intense for Duro Felguera Energíain two ways: on the one hand due to its mainbusiness - managing turnkey projects for gas-fired power generation plants - and on the otherfor having secured the largest contract in itshistory: a combined cycle power plant in Vene-zuela, all this along with the start of works onthe first solar powered plant for the companywhich is a major step into a new field of businesswith great potential for the future.
Over the year the Power Systems line was focu-sed on twelve projects: six gas-fired combinedcycle power plants (four in Spain and two inArgentina); two open cycle power plants in LatinAmerica; two desulphurisation facilities at coal-fired plants in Spain; a solar powered plant inSpain and the project kick-off on Termocentrocombined cycle facility in Venezuela.
The most important event for Duro FelgueraEnergía was without a doubt the award of theTermocentro contract which is being built inVenezuela for Electricidad de Caracas to providepower to the country's capital. The 1,500 millioneuros contract is the largest ever signed by thecompany and is another step towardsinternational expansion within the power systemsfield and in a new market for this type ofbusiness. Termocentro is located 40 kilometressouth of Caracas in the municipality of PazCastillo (Miranda State) and will produce 1,040MW of power.
The facility is a two-set multi-shaft configuration,each set comprising of two gas turbines andone steam, which will be fired by gas with thepossibility of using liquid fuel as well. DuroFelguera has opted for Siemens to provide the
32
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ower
Sys
tem
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ent
Quality, environmental &safety management
Certificates:Lloyd´s Register Quality Assurance, EN/BSEN / DIN EN- ISO 9001 / 2000Applicable to design, engineering,acquisitions and construction of projectsfor turnkey industrial installations in theindustrial and power generation sectors
•
•
ProjectsCore business
Execution of Turnkey Projects for Gas-Fired Power Generation Facilities (Openor Combined Cycle)Turnkey Projects for Conventional PowerGeneration FacilitiesDesulphurisation and DenitrificationPlants at Coal-Fired Power GenerationFacilitiesBiomass PlantsCogeneration PlantsSolar-thermal power plants
•
•
••
•
Main scopes of work
Project ManagementEngineeringSupplyConstructionErectionCommissioning
••••
••
•
Duro Felguera Energía, S.A.General Manager: Francisco Martín Morales de Castilla
turbines. It is expected that the two first gasturbines will start operating in the first six monthsof 2011 and the other two in the second half ofthe same year.
The combined cycle phase will be executedimmediately after and is expected to finalise inDecember 2013. The basic engineering of theproject and the purchase of the main equipmentwas carried out in 2009. At the end of the yearsite preparation works started including earthmovements carried out by the customer.
Throughout the year the company completedworks on four gas-fired generation plants inLatin America: two combined cycles and oneopen cycle in Argentina, and an open cycle inChile.
In Argentina, construction works finalised onthe 800 MW San Martín combined cycle plantsituated near Rosario (Santa Fe province).This project was carried out in conjunction withSiemens, Electroingeniería and Inelectra forTermoeléctrica San Martín. Works alongsideElectroingeniería and Siemens also finalised onthe Manuel Belgrano plant located in Campana
(Buenos Aires province). After the steam turbinewas installed, testing started on the combinedcycle plant at the end of the year and theenvisaged power output of 800 MW wasreached.
The company also delivered the 150 MW Genelbaopen cycle power plant to Petrobras, located inthe grounds of a conventional power plant ofthe same name in Ezeiza (Buenos Aires). DuroFelguera Energía acted as sole turnkey contractoron this project. In Chile works ended on the 160MW Cardones open cycle power plant locatedin Copiapó-Tierra Amarilla in the Norte Chicoregion of the country, 800 kilometres north ofSantiago and the plant was handed over to thefinal customer, Southern Cross.With reference to business on the Spanishmarket in the field of gas-fired power plants,
33
6
the company continued construction works forEndesa on the Cas Tresorer II plant in Mallorcawhich went into open cycle operation in 2009and the combined cycle will commenceoperations in 2010 reaching a power output of230 MW. In parallel, the Puerto de Barcelonaand Besós V projects in Catalonia continued.
The former for Gas Natural with a power outputof 844 MW and commissioning scheduled for2010, and the same will happen to the two unitsat the Puerto de Barcelona plant for Endesawhose output will be 850 MW. In Asturias, DuroFelguera continued on the combined cycle atthe Soto de Ribera V plant for HidrocantábricoEnergía. The 400 MW-facility is situated nearOviedo and commercial operation will commencein 2010. Also in Spain the company deliveredthe desulphurisation plant installed at the Velilla
power plant (Palencia) to Iberdrola and continuedon the construction of the desulphurisation unitat the Lada IV plant in Asturias also belongingto Iberdrola and expected to finalise in 2010.
In 2009 Duro Felguera Energía took its firststeps in the field of renewable energy with thestart of pre-engineering on the Andasol III projectlocated in the municipalities of Aldeire and LaCalahorra in the province of Granada. Thecompany received the go-ahead in January 2010and is executing the project in consortium withFerrostaal, Solar Millenium and Man SolarMillenium.
The Andasol III solar power plant will have anoutput of 50 MW and will use parabolic troughswith energy storage. It is expected to come intooperation in 2011. The scope of the works
34
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Sys
tem
s S
egm
ent
6
35
includes basic and detailed engineering,equipment supply, civil works, construction andcommissioning. With the award of this contractthe Asturian company goes into an area ofbusiness which has great prospects for thefuture and is expected to grow in the next fewyears.
On the commercial front, Duro Felguera Energíawas involved in bidding for new projects in otherfields of action such as conventional coal-firedplants, and it started looking into new marketsin Europe, Asia, Africa and Latin America,especially in the more advanced countries whereinvestments are foreseen in power generationto meet the rising energy demand.
Duro Felguera Plantas Industriales (DFPI) isspecialised in executing turnkey contracts toconstruct industrial facilities mainly in the areasof mineral handling and port terminals for bulkgoods. Much of its work is on a worldwidescale with references in various countries inEurope, Latin America and Asia.
The company closed 2009 with positive results;a contribution of 20% towards the EBITDA ofthe group and a turnover of 183 million euros.
90% of the Duro Felguera Plantas Industrialescontracts came from markets abroad whereincreased business is expected despite theuncertainty caused by the crisis.
The solid bulk handling sector where DFPI ismost active, has suffered the impact of the
economic crisis on a global level. However,thanks to its presence in emerging economiessuch as India, in 2009 DFPI achieved majoradvances in the sector, especially on theinternational markets.
Once the terminal executed by DFPI atGangavaram Port in Andra Pradesh (India) wasinaugurated, the record operation figuresachieved in coal imports and iron ore exportsdrew the attention of several port operators. Toattend to this enormous market, the subsidiaryFelguera Grúas India was created, which dependsdirectly on DFPI, and it is currently immersedin the final negotiation phase of various contracts.
Another of the geographical zones with majorpotential in the bulk handling field is the MiddleEast where the company is also operating. Added
36
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Duro Felguera Plantas Industriales, S.A.General Manager: Félix García Valdés
to the successful start up of a mineral offloadinginstallation for Emirates Steel Industries (ESI),has been the award of a similar facility whichwill go into operation midway through 2010along with an invitation to bid in closed tenderswhich are of the utmost importance to ESI.
In Mexico, a market where DFPI has alreadyexecuted various projects, works continued onthe coke extraction and handling system at thenew Pemex Refinery in Minatitlan, in additionto extensions to the scope of the works andnew contract awards.
On the domestic market, the project for a cokehandling system at the Repsol-Petronor refineryin Muskiz (Vizcaya) continued. A new projectwas also awarded at the same refinery for asulphur handling system. All the engineering of
this new project was developed in 2009 and thesite works will be carried out over 2010. At theCompostilla Power Plant belonging to Endesa,works continued on erecting the new mineralyard which is expected to be finalised halfwaythrough 2010.
Also in Spain, in the mining and mineralprocessing area, DFPI designed and executedthe vertical shaft extraction system at the MaríaLuisa mine in Asturias as well as anotherextraction system for the seventh level of theSan Nicolás mine. Both of these mines are inAsturias and belong to the Hunosa miningcompany.
In reference to the mining of metals, DFPI isworking on the African continent in countrieslike Ghana, Mauritania and Senegal, carrying
37
38
6 In
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ent out various investigations on developing iron
ore deposits. The company is drawing up basicstudies on exploitation of the mines and mineraltreatment and handling.
In Latin America two new iron ore milling plantsin Ciudad Píar, Venezuela, are being defined. Inaddition, execution of the iron ore concentrationplant project is still continuing in this country.
Duro Felguera Plantas Industriales has madeconsiderable efforts in 2009 to establish strategicrelationships and come to agreements withmajor international companies to design andexecute large mining projects, principally withAustralian companies.
In the Oil & Gas field, after the inauguration in2009 of the second LNG and CNG terminal in
Brazil, which was executed on a turnkey basisby DFPI in Rio de Janeiro for Petrobrás, a localcompany was acquired and called Duro Felguerado Brasil Oil & Gas whose objective is toconsolidate DFPI's potential to develop turnkeyprojects in this country in the petrochemicaland oil & gas sectors.
The company has also signed major internationalcollaboration agreements with OEMs to dealwith large EPC contracts in this sector.
At the end of 2009 there were several projectsin the final negotiation phase and expected totake the form of definite contracts over thelength of 2010.
6
39
Physical distribution systems
Turnkey installation and systems forautomated physical distribution, logisticsand storageTranselevators
•
•
••
Petrochemical, gas and environment
Petrochemical plantsSeaport terminals for LNG unloading andCNG emission from a floating regasificationplantAcid regeneration plantsEnvironment - Incineration plantsWater treatment plants•
••
Engineering and supply of turnkeyplants for:
Seaport terminals for solid bulk handlingBulk handling and stockyards at powerplants,steelworks, mines, cement plants,etc.Bulk stackers and reclaimersGrab unloaders and ship loadersEquipment and installations for undergroundminingMineral processing/concentration plantsLNG and CNG terminals on floatingregasification plants
••
•
••
•
Design, development, production,installation and after-salesservcies for:
Industrial, steelworks and nuclear overheadcranes and gantry cranesDockside and gantry cranes for port servicesOverhead and gantry cranes for containers,general and bulk loads
•
••
Operation and maintenance of bulkhandling facilities and mineralprocessing plants
Equipment for large civil worksinfrastructures:
Tunnel boring machines, back-up's•
Projects
•
Felguera-IHI, owned by Duro Felguera and theJapanese IHI Corporation, is the leading Spanishcompany in fuel storage -both liquid and gas-and executes projects for liquefied natural gas(LNG) storage tanks, provides turnkeyconstruction of fuel storage plants and otherstorage equipment (spherical and vertical, semi-refrigerated and high-temperature tanks andvessels).
The company has managed to maintain itsleading position on the market as a specialistin complete development of LNG cryogenictanks given that after successfully concludingthe construction in 2009 of two tanks at thePort of Barcelona and another in Cartagena forEnagas, all of 150,000 m3 capacity, it continuedto work on another two tanks of similarcharacteristics, also in Barcelona and for the
same customer, which are expected to finalisein 2010.
In addition, Enagas has continued to place itstrust in Felguera-IHI and in 2009 awardedanother two tanks of this type for theregasification plant being built at the port of ElMusel in Gijón (Asturias).
Felguera-IHI applies highly advanced technologyto construct these so-called "full containment"tanks which are double container tanks to storenatural gas in a liquid state (at -163ºC). Theyare among the largest of their type in the worldand require maximum safety demands.The innercontainer is made of steel with 9% nickel, andthe outer is pre-stressed concrete which preventsthe stored product from coming into contactwith inflammable gases.
40
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Felguera-IHI, S.A.Chairman: Angel Antonio del Valle Suárez
6
As regards the construction of other tanks andspherical vessels, in 2009 four tanks to store173,000 m3 of hydrocarbons were finalised forthe Cepsa facility in Huelva, as well as threeLPG spheres with a capacity of 4,800m3, alsofor the same customer in Huelva.In addition, Felguera-IHI was awarded the firsttwo high-temperature tanks (400ºC) with acapacity of 16,000 m3 to store molten salts atthe Andasol III solar power plant in Granada,and a new propane storage sphere of 4,500m3
and another for butane of 7,000m3 for the RepsolRefinery in Cartagena. Furthermore, worksconcluded in 2009 on the construction of a240,000 m3 capacity storage plant forhydrocarbons, for Cores within the grounds ofthe port of El Musel in Gijón.
Felguera-IHI continues with its maintenanceactivities at the main Spanish refineries via itspermanent branches in Huelva, Algeciras,Tenerife and Puertollano, from where works areconstantly carried out in maintaining andmodernising these facilities.
During 2009, Cepsa renewed its contract forthe maintenance of the Huelva and Tenerife
refineries over the next three years which goesto show the degree of confidence in Felguera-IHI when it comes to carrying out this type ofwork. Additionally, Felguera-IHI has anotherthree plants in operation in Spain.
ServicesDesign and construction of LNGstorage tanks
Design and construction of verticaland spherical storage tanks
Design and construction ofhydrocarbon storage plants
Exploitation of own storage plants
Overhaul and maintenance atrefineries and installations
Quality, environment & safetymanagement
CertificatesAENOR: ISO 9001:2000OHSAS 18001:1999
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t In 2009, Felguera Montajes y Mantenimiento,a company specialised in industrial erection,strengthened its position on a national andinternational level. This is evidenced by the factthat 73% of its order intake figure was forprojects in the European Union. Turnover volumeof the company registered an increase of 29%compared to last year.
In the power generation area, foreign marketscontinue to predominate in terms of businessdevelopment with projects such as: themechanical erection of four boilers andassociated equipment at the Staythorpe Ccombined cycle plant in the UK belonging toRWE Power; and the contracts to supply,manufacture and erect steel alloy and carbonsteel piping at the Flevo combined cycle facilityin Holland, belonging to Electrabel Netherland,
and expected to finalise within the first sixmonths of 2010.With regard to new contracts awarded in theyear, worth highlighting is the mechanicalerection of three HRSGs on the 1,280 MW ClausC combined cycle power plant in Hollandbelonging to Essent Projects B.V.
On the domestic market the company wasawarded the mechanical erection of a HRSGboiler, piping and equipment for the water/steamcycle and balance of plant (BOP) at the 400 MWSoto V combined cycle facility in Asturias.
The company also executed the mechanicalerection of a gas turbine - TG5 - at the diesel-fired plant in Mahón, (Menorca) belonging toGesa. In addition, works finalised during thefirst quarter of the year on the erection of a
6Felguera Montajes y Mantenimiento, S.A.
General Manager: Eduardo Martínez San Miguel
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Products &Services
Quality, environmental & safetymanagement
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Lloyd's Register Quality Assurance: ISO9001:2008
AUDITORES DEL NOROESTE: Safety atWork Audit Certificate OHSAS 18001:1900
Power generation plantsChemical and petrochemical sectorsMetal and steel industriesCement, paper, sugar, etc. plantsCar industry, naval sector, etc.
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Engineering, management anddevelopment of erection projects for:
Electrical and mechanical erectionfor large industrial projects
Refurbishment, revamping andoverhaul of industrial facilities
Maintenance organisation and control ofsparesKick-off and supervisionExecution of preventive, predictive andcorrective maintenanceSpecialist maintenance worksMajor overhauls during outages/stoppagesRCM
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Maintenance
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boiler and associated equipment at the 412 MWMalaga combined cycle power plant belongingto Gas Natural, and in the final quarter, thecontract for the mechanical erection of the 431MW Aghada combined cycle plant finalised inCork (Ireland).
In the petrochemical sector, the companyconcluded the mechanical erection of the SulphurBlock and Merox LPG4 systems at La Rábidarefinery for Cepsa. These works are part of theproject started in May 2008 to increase theplant's capacity in producing middle distillates.
Within this sector, also worth highlighting arethe works started on the ADI-1000 project -mechanical erection and painting - to be executedthroughout 2009-2011 for Petronor at the MuskizRefinery (Bilbao), and the mechanical erection
of vacuum distillation and coking furnaces whichare part of the Project C-10 works to expandthe Cartagena Refinery belonging to Repsol andexpected to finalise in 2010.
In 2009, various projects which had commencedthe year before in the steel industry continued.Among them are the works to overhaul theconveyor belts at the sinter and mineral yard,and repair the conveyor systems at the Arcelor-Mittal steelworks in Gijón. Of the new contractsin the year, of note are the structural repairs tothe T2 Tower at the same facility.
Finally, in the industrial maintenance area, themost important works carried out in 2009 werefor Elcogas (in Puertollano), Iberdrola andArcelor-Mittal.
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During 2009, Montajes de Maquinaria dePrecisión (Mompresa) registered an overallgrowth of 52% in sales compared to last yearand maintained major order intake figures,thereby consolidating the tendency establishedin previous years.
With reference to growth by business area, theincrease of international sales compared to lastyear is worth noting, confirming the company'sclear orientation towards foreign markets. Inthis sense, there was significant activity incountries such as Ireland, UK, Mexico, Peru,Chile, Argentina and Venezuela.
Business on the Spanish market in the erectionand overhaul of turbines and generators alsoregistered a slight increase compared to theimpressive figure achieved in 2008. This factclearly consolidates Mompresa's position asthe leading national company in this sector.
As regards overhauls, during 2009 over 40 werecarried out for multinational concerns such asSiemens, Mitsubishi or General Electric, andalso for the major Spanish operators in theelectricity generation sector such as Endesa andIberdrola. Worth highlighting are the works tooverhaul and replace the steam turbine alternatorcarried out on Unit I of the Almaraz NuclearPlant (Cáceres) for Siemens.
Mompresa successfully constructed the opencycle power plants of Chilca III, Santa Rosa,Termoflores and Kallpa II-III in Perú; TierraAmarilla in Chile, and Genelba in Argentina. Thecompany also finalised erection of turbines andalternators at the combined cycle plants ofManuel Belgrano and San Martín in Argentina,Aghada in Ireland and Staythorpe in the UK, aswell as Besós V, Puerto de Barcelona and CasTresorer II in Spain. Erection of industrial steamturbines concluded at the Ence plant in Navia
(Asturias) and rotating equipment for the flue-gas desulphurisation system at the Lada facilityin Asturias.
In light of the increasing number of contracts,the company continued with its policy tospecialise its workforce. This policy has led tothe creation of the Mompresa Training School,covering an area of over 2,000 m2 and almostuniquely equipped to include a 160 MW steamturbine. The school is located in Polígono deSilvota in Asturias and will start to run in 2010.
In this way site workers will be provided withcomplete technical and practical training tosimulate and practice real and complex sitesituations.
Montajes de Maquinaria y Precisión, S.A.Mompresa
Sole Administrator: Antonio Mortera Morán
ServicesErection and overhaul of:
Gas and steam turbinesGeneratorsAuxiliary turbinesCondensersRotating equipment in general
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- The company carries out comprehensiveconstruction of open and combined cyclepower generation facilities abroad, via itssubsidiaries.
Quality, environmental& safety management
Certificates:LLOYD´S REGISTER QUALITYASSURANCEQuality: ISO 9001:2000.Environment ISO 14001:2004 and EMAS.
AUDITORES DEL NOROESTESafety at Work Audit CertificateOHSAS 18001:2007.
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Operación y Mantenimiento, S.A. (Opemasa) isthe subsidiary of the Duro Felguera groupspecialised in operation, maintenance andcommissioning of power generation andindustrial facilities. The company developed itscore business in 2009 on projects within thepower generation sector, specifically on opencycle, combined cycle, coal-fired and solarpowered plants; flue-gas desulphurisationsystems, effluent treatment plants, cogenerationplants, biomass plants and wind farms.
Of the works carried out over the year, worthnoting are those on: the Protasa plant inBarcelona; the water treatment plants at theSoto de Ribera and Aboño power plants inAsturias; maintenance of La Puebla de Almoradielcogeneration plant in Toledo, all belonging toEDP.
Company activity increased on biomass-fuelledplants in 2009 to the extent that Opemasa hasacquired considerable presence and experiencein an area with excellent perspectives forexpansion in the next few years.
In addition, in 2009 planning started on thecomplete operation and maintenance works ofthe solar powered Andasol III plant in Granada.
Opemasa's ever increasing presence abroadcontinued on the multi-annual completemaintenance contract of the Manuel Belgrano(2x1 - 800 MW) combined cycle facility inCampana (Argentina), where a group of morethan 35 professionals provide the servicesmentioned in association with Siemens.
Over the length of 2009 documentation andcommissioning management was carried outat the combined cycle plants of Barranco deTirajana II (230 MW - Gran Canaria), CasTresorer II (230 MW - Mallorca), Puerto de
Barcelona (2x400 MW - Barcelona), CarbonCapture Plant (Compostilla), Soto de Ribera(400 MW - Asturias) and, especially at the SanMartín (2x1 - 830 MW) combined cycle inRosario (Argentina).
Opemasa also took part in management tasksof site storage facilities at the flue-gasdesulphurisation system at the Lada coal-firedplant (Asturias), at Cas Tresorer II combinedcycle plant, at the Andasol III solar poweredplant (Granada), and especially at the alreadymentioned Manuel Belgrano combined cycleplant (Argentina). The company also provideddocumentation, coding of spares services andelectrical /I&C work at various gas turbineoutages.
Of equal importance is the contract for operationand electro-mechanical maintenance of the 20MW Juan Grande wind farm belonging to EDPlocated in Matorral (Gran Canaria).
Finally, Opemasa continued to develop energysaving projects for petrochemical companies.These proposals, which include the minimisationof steam or gas leaks by improving processesand process control at refineries and otherindustrial installations that use steam on amassive level, were developed using 100%Spanish technology of the highest level.
Over 2009 Opemasa continued to reorganiseits activities, incorporating new markets andbusiness areas, and obtained sales and orderintake figures that consolidate the tendency togrow which started in previous years.
Operación y Mantenimiento, S.A.Opemasa
Sole Administrator: Antonio Mortera Morán
ServicesCore Business
Operation and maintenance at powergeneration plants (coal-fired powerplants, solar energy power plants, windfarms, cogeneration and biomass) andwaste treatment plantsCommissioningStockyard management anddocumentation controlStudy, implementation and developmentof power saving projects
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Certificates:LLOYD´S REGISTER QUALITYASSURANCEQuality: ISO 9001:2000.Environment: ISO 14001:2004.
AUDITORES DEL NOROESTESafety at Work Audit CertificateOHSAS 18001:2007.
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t Felguera Revestimientos (Feresa) specialised insupplying and installing all types of industrialinsulation and lagging - heat, refractory,cryogenic, acoustical - in 2009 maintained thegrowth in business that it had registered inprevious years. The company had an increasedorder intake of 16% compared to last year withnearly 20% of new contracts coming frominternational markets, whilst its turnover andprofits-before-tax figures grew by 31% and166% respectively.
With reference to contracts executed in 2009 inthe power systems sector, works finalised onthe supply and installation of heat insulationand lagging of boiler equipment and piping andassociated equipment at the Malaga combinedcycle power plant, as well as the supply andinstallation of heat insulation for piping,equipment, flues and internal isolation joints ontwo HRSGs at the Cas Tresorer II combinedcycle power plant in Mallorca.
In the field of flue gas desulphurisation systems,lagging was supplied and assembled on Unit IVpiping at the Lada coal-fired plant (Asturias).On the international side, heat insulation workswere carried out on the combined cycle plantsof Aghada (431 MW) in Cork (Ireland), Grain(UK) and Fos Sur Mer in Marseille (France).
In collaboration with Felguera Montajes yMantenimiento, Felguera Revestimientossupplied and carried out the pre-fabrication ofHP/MP/LP piping at the 800 MW Flevo combinedcycle facility in Lelystad (Holland); heat insulationand lagging works also commenced at theStaythorpe C (1,700 MW) combined cycle plantin Nottingham (UK) and are expected to finalisein 2010.
Over the year, activity in the petrochemical sectorwas highly intensive for the company. For Cepsa,
at the Gibraltar Refinery (Cadiz), heat insulationand lagging works on equipment and pipingfinalised on the Vacuum Unit II and Acid Waterssystems. In addition, at La Rábida Refinery(Huelva), heat insulation and lagging on pipingand equipment was executed for theInterconnections and H4 projects.
In collaboration with other companies, supplyand erection works are being carried out toinsulate and lag piping and equipment at theCrude, Vacuum, Gascón and Auxiliary Servicesunits at La Rábida Refinery (Huelva) for Cepsa.
At the same time, at the Cartagena Refinery inMurcia, refractory insulation is being carriedout on the coking and vacuum furnaces andconducts. Both projects have an executionschedule which spans 2009 and 2010.
Within the gas sector, Feresa is executingcryogenic insulation works on two 150.000 m3
liquefied natural gas (LNG) tanks at the receiving,storage and regasification plant in Barcelonabelonging to Enagas. In the second semesterof 2009, the company supplied and erected theinsulation of the OSBL spheres, forming part ofthe works on the extension project of La RábidaRefinery (Huelva) for Cepsa.
In the maintenance and outages area, heatinsulation revision and replacement worksfinalised on Unit IV at the Lada coal-fired powergeneration facility belonging to Iberdrola. In thisfield, Feresa has been awarded variousmaintenance contracts for industrial installationsbelonging to major national power operatorssuch as Iberdrola and EDP/HC Energía.
Felguera Revestimientos, S.A.Feresa
General Manager: Pedro Carcedo Herrero
Quality management
Blasted insulation
In general, for equipment with difficultdimensions and shapes: steam turbines, heatexchangers, dilation compensators,diesel motor collectors and exhausts, etc.
Services
AENOR: ISO 9001:2000
AUDITORES DEL NOROESTE:Safety at Work Audit CertificateOHSAS 18001:1900
Insulation: mineral / ceramic, bio-soluble,silicate calcium, foam glass, expandedperlite, poliisocianurate, polyurethanefoam, etc.Protective lining: aluminium, stainless,galvanised and aluminised steel, aluzinc,mastics, painting, etc.
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Conventional linings
Removable linings (padding)
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Montajes Eléctricos Industriales (MEI) specialisesin electrical and instrumentation engineering,supply, erection and assembly at powergeneration plants, port terminals, bulk handlingfacilities and automated warehouse anddistribution centres. The company finalisedprojects in 2009 which had already started inyears before and which have served to acceleratethe process of evolving towards new sectors,such as the power generation sector, where itstarted to operate as a result of becoming partof the Duro Felguera group in 2007.
Throughout 2009 electrical and instrumentationerection works finalised on Unit V of the Ladacoal-fired facility in Asturias, as well as the workson the flue-gas desulphurisation system at theVelilla plant in Palencia. The company's firstmajor electrical project in the fuel storage areaalso concluded. This was executed alongsideFelguera-IHI for Petróleos Asturianos at thestorage plant whose construction started at theport of El Musel (Gijón, Asturias) in 2007.
Also within the power generation sector, in 2009MEI took part in the combined cycle projects ofCas Tresorer II (Mallorca) and Soto V (Asturias)which will continue in 2010. In the field of bulkhandling, the engineering, supply and erectionproject continues for the electrical instrumen-tation and control (I&C) systems of the stackersand reclaimers at the coal stockyard of theCompostilla coal-fired facility.
Distribution and control equipment were replacedby the company's own systems on the DB1offloader at the Endesa terminal of theCarboneras Port. In 2009 MEI also successfullyconcluded the first electrical and I&C engineeringproject for the petrochemical sector, carryingout the engineering on the AL6 unit (CokeHandling and Stocking Unit) at the Repsol-Petronor refinery in Muskiz. The company was
recently awarded the electrical and I&Cengineering of the SR6 Unit (Transfer andStocking of Sulphur).
MEI has also strengthened its manufacturingline of electrical distribution cabinets diversifyingand expanding its catalogue in terms ofapplications, sectors and references.
The company has also gone into the renewableenergy field with a special focus on solar poweredgeneration to apply the experience it has acquiredwithin the power plant construction sector.
Montajes Eléctricos Industriales, S.L.U.MEI
Manager: José Luis Menéndez Alvarez
ServicesSupply and electrical erection atcombined cycle power plants
Certificates:BM TRADA CERTIFICATIONQuality: ISO 9001:2000
AUDITORES DEL NOROESTESafety at Work Audit CertificateOHSAS 18001 : 2007
Quality, environment &Safety Management
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Engineering, supply and electricalerection at mineral stockyards
Equipment supply, electrical andmechanical erection for logisticsand automated storage systems
Supply and electrical erection fordesulphurisation plants at thermalpower plants
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t 2009 has been a year of growth for Felguera TI,and a year to prepare for the major strategicchallenges that it must face in the next fewyears.
The company owned by Duro Felguera developedimportant projects in the physical distributionarea where it has specialised in managementsystems for automated warehouses. Over theyear, Felguera TI widened its experience in majorpharmaceutical distribution centres, severalsystems were installed in construction andhardware material distribution centres andprojects in the industrial safety field began totake on relevance. The company also maintainedits activities in other sectors such as the food,naval and car industries.
In the management area, Felguera TI carried outa project for a chain from Andalusia andcomputer support is being provided to the salespoints of a distribution chain undergoingexpansion on a national level. This last projectwill continue over the length of 2010. Thesealong with other projects continue to reaffirmFelguera TI as experts in the physical distributionsector.
On the Internet Projects and ElectronicManagement areas, the company worked onvarious projects for the AdministraciónAutonómica del Principado de Asturias, incollaboration with the CTIC Foundation on itselectronic invoicing project, and training andconsulting projects increased.
R&D is of key importance to the company:throughout 2009 Felguera TI worked ondeveloping an innovative Voice Picking systemwhich will continue in 2010.
In addition, development started on the newversion of the enterprise resource planning
(ERP) programme Integralia 3.0. (r) to providea new, more productive environment fordevelopment which will evolve towards the widerfeatures and benefits offered by BusinessIntelligence.
Felguera Tecnologías de la Información, S.A.Manager: Alejandro Durán López
Quality, environment, health &safety management
AENOR - UNE 16002 standard for R&Din computer technologyOSHAS 18001: 2007 Health & Safety indevelopment, set up, running andmaintenance of computerisedinformation systems.
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ProjectsCore Business
Warehouse Management Systems atautomated and conventional installationsWarehouse Control SystemsBusiness Management systems -Integralia (r)Industrial Physical Distribution SystemsIndustrial SafetyTransport logisticsMonitoring systems (warehouses,distribution or production centres)
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ConsultingProject DesignSoftware programming, installation andcommissioningMaintenance and support
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Técnicas de Entibación, S.A.Tedesa
General Manager : Carlos Ruiz Cornejo
Quality, Environment & SafetyManagement
Products
CertificatesAENOR: ISO 9001:2000OHSAS 18001 : 2007
Steel arches in TH, HEB, IPN sectionsHydraulic and friction propsLink barsLining sheetsGrating
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Steel arches in TH, HEB, IPN sectionsLattice girdersFormworkBernold-type sheetResin anchor boltsTBM back-ups
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Tunnels
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Electricity Pylons
Mobile phone antennas
Steel structures
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Técnicas de Entibación, S. A. (Tedesa) closed agreat year as regards production and orderintake.
The current circumstances did not affect thecompany's business too much given the largequantities of ongoing projects in the manufactureof equipment for mining and underground worksfor rail and road, and therefore production washardly affected by the general crisis.
Some of the most important works in 2009 werecarried out on: the Pajares tunnel of the Sotiello-Campomanes section of the Madrid-Gijón high-speed train line for Acciona S.A., where Tedesasupplied more than 3,000 tons of tunnel supportequipment; the Barcelona metro system for UTELínea 5 Horta (tunnel below the collapsed areaof El Carmel in Barcelona), with the supply ofheavy support equipment. Also worth mentioningare the high-speed rail (AVE) tunnels for theBarcelona-French Frontier in Cornelia andFigueras, and in Levante on the Ontígola-Aranjuezline.
A major quantity of order intake and productionwas also achieved in 2009 for mobile phoneantennas.
On the international side in 2009, Tedesaexported mainly to Europe, America and Africa.Of special note are the volumes sent to Portugal,Mexico and various Latin American countries.Total exports in the year came to 23% of thetotal turnover figure.
In 2009, new machinery to manufacture heavypropping equipment was installed at the newbuilding. This R+D project carried out the yearbefore by our technical office has meant a moreefficient use of materials and a significantincrease in production capacity.
In 2009 works also finalised on the extensionto our new facility in Silvota, which will centraliseproduction and avoid continuous movement ofmaterials and personnel between workshops.
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t Felguera Calderería Pesada (FCP), the DuroFelguera subsidiary dealing in the design andmanufacture of industrial equipment for thepetrochemical and chemical industries, andspecialised in thick-walled, oversized productsusing unusual materials, closed 2009 with aturnover of 30 million euros, 82% of whichcame from international markets.
Despite being a year that was marked from thestart by the international financial crisis, whichhas had and continues to have adverse effectson the petrochemical industry - FCP's maincustomer - 2009 ended with a profit before taxfigure of four million euros, backing the policyestablished in the last few years of specialisingin the manufacture of very large, thick-walledequipment with high technical requirements.
Among the projects carried out and deliveredover the year, worth mentioning are: two cokechambers for Petronor measuring 9 metres indiameter and weighing 450 tons each; a HDS(hydrodesulphurisation) reactor and vacuumcolumn for the same customer; two columns,one for crude and another vacuum for Sinclair-USA; two CrMoV reactors for ENAP-Chile; andvarious parts of an FCC unit for IAG-USA destinedfor Serbia.
Other work on equipment for the petrochemicalsector during 2009 and whose delivery isexpected in 2010 was as follows: a 500-tonreactor made of CrMoV for Shell-Holland andthree liquid-gas separators for AMEC in theRepublic of Azerbaijan.
Felguera Calderería Pesada, S.A.Manager: Enrique Díaz-Caneja Castro
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During the year, of the contracts awarded,included are: a HDS reactor for Petrogal, viaFluor UK; two 500-ton coking chambers and a560-ton reactor for Conoco Phillips-Germany,via Technip-France.
The company also continued with its policies ofconstant upgrading of quality assurance,maintaining strict compliance with deliveryschedules and investing in research anddevelopment to incorporate technologicalimprovements into the design and manufacturingprocesses.
With reference to investments made over 2009,the company worked on a vertical lathe with acapacity to machine pieces of up to 10 metresin diameter, 4 metres in height and 100 tons inweight.
Civil works finalised on a horizontal roller tocurve sheets of up to 3,600 mm wide and 210mm thick when cold and 330 mm thick whenhot, which is expected to go into operationmidway through 2010.
With these investments, FCP will be able tomanufacture top of the range thick-walledequipment for the petrochemical sector.
On another note and with a view on the future,the company has decided to opt for new marketswhere levels of competition are considerablyreduced and it has assigned major humanresources to prepare the documentation required(manuals and procedures) to obtain the N/ASMEstamp in 2010 to design and manufacturepressure vessels within the nuclear sectorworldwide.
On the research and development front in 2009,work continued on developing techniques tomanufacture thick-walled, oversized equipment
with a special focus on those made of CrMoVsteel alloys.
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Quality, environmental and safetymanagement
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CERTIFICATESIso 9001: 2000Iso 14001: 2004OHSAS 18001: 2007STAMPSU STAMP (n° 20976 ) ASMEU2 STAMP (n° 25364) ASMES STAMP (n° 25363 ) ASMENB (ID 5125) ASME NATIONAL BOARDR STAMP (n° R-2325 ) ASME NATIONALBOARD PED 97/23/CE Mod Hi
Products
Thick-walled reactorsCoke chamber furnacesFCC UnitsLarge columnsHigh pressure separators
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t Felguera Melt, the group subsidiary specialisedin design, manufacture and supply of turnoutsand other rail track equipment for rail and tramnetworks, as well as Hadfield steel crossoversand foundry components for the wind turbinegenerator market, suffered a 78% decrease inthe foundry production line due to theinternational financial crisis which caused adownturn in the wind power sector on a globallevel. However, the rail production line noticedan increased of 56% as the rail sector was theleast affected by the crisis.
During 2009, 28% of production aimed at therail sector went to the international markets ofwhich the works executed for Ergose (Greece)and Atikko Metro (Athens) are worth highlighting,especially the latter as this was the first timethat rail track material was supplied to thiscompany.
On the domestic market, Felguera Melt suppliedvarious components and equipment to a numberof rail system operators. Of these, worthmentioning are the following: equipment for thePlan de Dinamización (Revitalisation Plan),conventional devices for high speed lines anda gauge-switch device for the Gerona-Figuerashigh-speed section, all delivered to Administradorde Infraestructuras Ferroviarias (ADIF); specialequipment for line 11 of the Metro de Madrid(a junction and two switches); components forthe Barcelona and Valencia metro networks; andspecial components for the Port of Barcelona.
In terms of engineering projects in 2009, ADIFrequested Felguera Melt to participate in thedesign of high-speed crossings using technologyand supplies only from Spanish companies. Inthis field, the company carried out the designand complete engineering of rail componentsfor Ergose and Athens Metro; special railcomponents on the 11.B. Fortuna line for Metro
de Madrid, Metro de Barcelona - Bellbitge andValencia Port; as well as gauge-switch devicesfor ADIF (Gerona-Figueras section).
The collaboration continues with Metro deMadrid to design special rail equipment forprojects to be executed in 2010 (Line 9-Mirasierra, Line 2, Argüelles, Cuatro Caminos,Ventas, Príncipe Pío), with a great chance thatFelguera Melt will carry out these works.
Technical collaboration with other constructioncompanies was also established to researchinto stations, etc. This is an activity that normallytransforms into new orders for the company.Also in 2009, an investigation was carried outto determine permissible wear on switch andstock rails for the Maintenance departments inADIF and Metro de Madrid whose applicationhas been accepted by both operators.
Felguera Melt designed a fastener for highlyelastic rails which is being tested by Metro deMadrid and will eventually be applied by thisoperator and others, including on Spanish high-speed prototypes.
The foundry line suffered the effects of the crisiswith various orders cancelled by wind turbinemanufacturers given the downturn in the windpower sector. During the first semester of theyear, all components destined for General Electricin the United States were delivered; 57% of theyear's production went to this OEM. The fall indemand caused a drop of nearly 40% in saleprices. Great pressure was received from thewind turbine manufacturers who shifted theirpurchases to China in the hope of making theirmachines less expensive to be able to competeon the depleted and highly competitive windpower market.
In contrast with the wind power sector, the railsector was one of the few not affected by thecrisis in 2009, which allowed foundry productionfor rail crossings to increase by 34% incomparison to 2008.
52 Felguera Melt, S.A.General Manager: Carlos Ruiz Cornejo
6Products
Grey Iron Casting maximum weight per piece40 tCasting of iron modules - maximum weightper piece 13 tCarbon and manganese steel casting -maximum weight per piece 25 t.
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Manufacture of iron and steelfoundry
Moulded manganese steel crossingsMobile point crossingsConventional switchesSwitches for tramlinesHigh speed rail switchesTurnouts preassembled on wood orconcrete tiesCrossoversDouble crossover (scissors)Sleepers (ties)Switch expansion jointsInsulated glued joints
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Design and manufacture of rail trackmaterial and equipment
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CertificatesAENOR: ISO 9001:2008LLOYD'S REGISTER QUALITYASSURANCE: ISO 14001: 2004RATP UV21B - Crossings -halfset of switchesAUDITORES DEL NOROESTE:OHSAS 18001:2007
Quality, Environmental & SafetyManagement
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53Felguera Rail, S.A.General Manager: Carlos Ruiz Cornejo
The core business of Felguera Rail is themanufacture of rail components for high-speednetworks, complementing the activity thatFelguera Melt carries out in this field. At itsworkshops in Asturias, where it has a surfacearea of over 54,000 square metres,mechanisation and welding is carried out on railcrossings as well as research and developmenton this type of equipment for the rail sector.
This subsidiary of Duro Felguera is the onlySpanish company (except for RENFE) that hasthe adequate installations and state-of-the-artmachinery to mechanise and weld crossingsand points for high-speed rail networks to thehighest levels of quality.
Felguera Rail's line of business for customersother than Duro Felguera grew in 2009, and the
company carried out a record 635 weldedcrossings. This increase of external businessturnover resulting from new customers hasmeant a significant increase in production andprofit figures compared to those obtained in2008.
During 2009 the Lloyd´s Register QualityAssurance certificates for quality andenvironmental protection according to ISO9001:2000 and ISO 14001: 2004 standards wererenewed. The health and safety certificateprovided by Auditores del noroeste for theOHSAS 18001:2007 standard was also obtained.
Mechanisation of monobloccrossings: joint barring for frogs,profiles 54E1 and 50E1: adif, metromadrid, ratp (France)
Mechanisation, butt & flash weldingof frogs profiles 54E1, 60E1and50E1: adif, metro madrid, ratp(France), Ergose (Greece)
Mobile points crossings
Mechanisation of switch rails andstock rails, low asymetric profiles54E1A1, 60E1A1 and vignole profiles54E1 and 60E1
Mixed rail sections 54E1 / 60E1 andRN45 / 54E1
Products
Preassembled rail track devices onconcrete slabs and concretesleepers: underground, conventionaland high-speed rail systems
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Felguera Construcciones Mecánicas (FCM) isthe Duro Felguera subsidiary specialised inmanufacturing industrial equipment andmechanised-welded parts for the industrial andpower generation sectors, laboratories andresearch centres, and the infrastructure sector.
Over the length of 2009 the company continuedto develop its main activities in the same linesof business as in previous years: petrochemicalsector (off-shore) power generation (wind,hydraulic and nuclear) research centres and thechemical industry.
International sales in 2009 came to 55% of thecompany's total turnover and occurred on theEuropean market, mainly destined for Holland,Belgium and Germany.
In the off-shore sector, FCM carried out variousmanufacturing and assembly projects onequipment destined for crude extraction towersand anchorage systems for deepwater oilplatforms.
The highest requirements associated with thistype of project include reinforcing welds withnickel alloys and very strict mechanisationprocesses. This is completed with erection,hydraulic and nitrogen testing of the variousparts and the complete tower, which is finallysupplied mounted and ready to be installed.
In the power generation sector although thecompany continued to manufacture windturbines, the domestic wind power marketslowed down in terms of growth rates comparedto previous years. Therefore, FCM has focussedon the hydraulic power sector manufacturinglarge components for turbines, (rings, coils,distributors, etc.) and the nuclear, mechanisingnuclear waste containers.
For the chemical industry, projects were carriedout on the manufacture of drying tanks forcarbonatation systems and autoclaves. Thecompany has also been highly active on majorresearch projects at international laboratories(CERN FERMILAB HASYLAB KEK DLR ITER)manufacturing cryomodules, cyclotrons orproton beam positioning equipment for medicalaims.
In 2009, R&D activities took place inmanufacturing processes for superconductivecoils, off-shore platform anchorage, nuclearwaste containers, rotors and stators for windturbines, welding processes for cryomodulesof Linear Accelerator XFEL, and the developmentof a manufacturing process on cancer treatingcyclotrons using proton beams.
Felguera Construcciones Mecánicas, S.A.General Manager: Ana Isabel Bernardo Pérez
Quality, environmental andhealth & safety management
•
••••
Stamps:ASME: U, U2, S y NBCertificates:UNE-EN ISO 9001:2000OHSAS 18001:2007PECAL/AQAP 120 (undergoing renewal )ISO 3034-2
Equipment for HRSGs.Milling and grinding equipmentCoils and heat exchangersAxial and centrifugal fans
Power Generation
•
••
•
Nuclear Energy
Waste containersHeat exchangers
•
Swivel stacksSuction anchors, chain table and pendulums
••
Turbines and generatorsGates and valvesDistributors and injectors
Hydraulic Energy
••
Petrochemical (off-shore)
Laboratories and ResearchCentresPositioning equipment for protonbeamsCryogenic modulesVacuum equipment
•
•
•
•
Products
Mechanised and welded componentsfor wind turbine generatorsMechanisation of axles, hubs, frames,casings
•
Wind Energy
•
•Steelworks and Bulkhandling yards
Gantries and giratory platformsTransfer equipment and cranesSkids and wheels for buckets
•••
55
6
Duro Felguera around the world
Offices abroadOngoing projects
• Argentina• Peru• Venezuela• Mexico• India• Japan• USA• Brazil
America• Mexico• Peru• Venezuela• Brazil• Chile• Argentina
Europe• UK• Ireland• Holland
Asia• India
CorporateResponsibility Report
756
In a scenario where the crisis presided over theeconomy and had a negative impact on thepower and industrial sector where Duro Felgueraoperates, employment is one of the mainvariables to judge a company as far as CorporateResponsibility. In this sense, 2009 closed withan increase in the workforce due to greateramounts of activity registered mainly by thecompanies in Services segment of the group.
Training its professionals continues to be oneof the priorities of the company as well as itsconcern for safety and innovation, to which itpays particular attention. Of almost equalimportance is the information supplied to themarkets in order to maintain maximumtransparency of business development.
The internal reorganisation of the group intofour segments of activity (Power Systems,Industrial Plants, Specialised Services andManufacturing) and the opening of the newheadquarters in Gijón (Asturias) was aprogression in consolidating the company'snew business profile which is decidedlyorientated towards project management and theinternational markets.
On the employment front, 2009 was marked bya growth in the group of professionals makingup the workforce despite the general situationof a financial crisis affecting the sectors wherethe company operates. Furthermore, and inaccordance with the progressive orientationtowards major power and industrial projectsand providing specialised services to thesesectors, the gross majority of the workforcewas concentrated in the segments dealing withthese lines of business. Of special significancehas been the rise in personnel assigned toServices.
The average workforce of the group during theyear rose to 2,372, meaning an inter-annualincrease of 215 workers, which in relative termsis equivalent to a 10% rise, eight points abovethe previous year. In terms of annual average,a third of the personnel are technical andadministrative staff and the rest are workers.
The business increase in the Specialised Servicessegment meant a notable rise in personnel forerection work in the field, which contrasts withthe slight fall in more qualified personnel andwith the acute reduction of the workforce in themajor projects areas and the companiesbelonging to the Manufacturing segment.
On 31st December 2009 the company had 2,255workers (3.3% more than a year before) ofwhich 40% were technical and administrativestaff. In comparison with the close of 2008, thisprofessional group was reduced by 2.9% andstood at 905 members. For staff falling into thecategory of "workers", at the end of the yearnumbers stood at 1,347; a rise of 7.6%.
An analysis of the workforce by segments showshow in 2009, the importance of the SpecialisedServices segment was reinforced on thepersonnel side, given that the group ofcompanies dedicated to this type of activity(erection, commissioning, operation andmaintenance of industrial and power generationfacilities) concentrated 48.6% of the company'sworkforce at the end of the year, i.e. 1,096people.
In comparison to the previous year's close, itwas the only segment where employmentincreased, by 23.8%, which is a rise of 200workers.
The average workforce of thegroup grew by 10% in 2009,
rising to 2,37257
2008
1,945
2009
Evolution of average workforce
200720062005
1,951 2,113 2,1572,372
58
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The two segments specialised in themanagement of major projects (Power Systemsand Industrial Plants), making up two thirds ofDuro Felguera's turnover, had a workforce of527 members in total at the end of 2009, 12.2%less than the previous year and 23.3% of thegroup's total number of personnel. Furthermore,the five workshops making up the Manufacturingsegment reduced personnel by -7.2% to 542workers; 24% of the company's total.
The percentage of the workforce with permanentcontracts at the end of 2009 was 35.6%; slightlylower than last year. The increase in temporarypersonnel has already been explained by thegrowth in erection activities on power generationinstallations, where needs for teams of workersare different depending on each project phase.
During the last few years, this greater amountof activity in the services companies, which ishighly labour intensive, has been concentratedabroad to a large extent, requiring the movementof an ever increasing number of workers.
During 2009, Duro Felguera had around 300people on an almost permanent basis assigned
to projects outside Spain, which is 12.6% of itsworkforce. The company has personnel workingin twelve countries in Europe, Latin Americaand Asia.
In order to attend to the needs of the workerson foreign assignments, in 2009 the group's"Servicio de Movilidad Internacional"(International Mobility Service), set up two yearsago within the Human Resources Department,arranged transfer of workers to and from projectsin countries like Venezuela, Brazil, Argentina,Chile, Romania, United Kingdom or India, dealingwith the formalities required, needs andconditions abroad. The service also maintainedpersonal contact with these workers before,during and after their international assignments.
The International Mobility Service hasinformation and practical guides for variouscountries, general information and current newsrelated to international assignments which isfreely available to all personnel on the CorporateIntranet. In addition, in collaboration with thevarious subsidiaries of the group, informationis provided on the cost of living and expatriationconditions at different destinations.
7
Distribution of workforce by segments
Manufacturing
SpecialisedServices
Power Systems
IndustrialPlants
Others
542
1.096
199
328
90
4%
Figures as at 31/12/2009
49%
24%
14%
9%
Distribution of workforce by professional groups
Technical staffAdministration staff
Workers81197
1,347
4.3%
59.7%36%
Figures as at 31/12/2009
The arrangement of visas for countries likeChina, Bangladesh, Saudi Arabia, EquatorialGuinea or India among others was also in highdemand due to the growing internationalisationof the company's business.
The average age of the Duro Felguera workforceremained practically stable compared to lastyear at 40.6 years old. By age groups, the underforties represented 58.6% and of equalsignificance were the under thirties at 21%.
By business segments, the youngest averageage can be found in Specialised Services at 38.8years old, followed by Power Systems which isjust slightly over 40. The oldest average age isin the Manufacturing segment at 43.3 years oldand Industrial Plants at 42.2.
The presence of women in the group remainedstable during 2009 with an average of 221women on the workforce, i.e. 9.3% of the totalnumber of personnel. The participation of womenin the company, whose level is still 70% higherthan only five years ago, did not increase in2009 given that the rise in employment, as wehave already seen, centred on erection activitiesat power generation and industrial installationswhere there are hardly any female workers.
With reference to absenteeism, after theconsiderable decline registered in 2008, thisparameter was practically stable during 2009and remained at 4.8%, a very low rate comparedto the average within the sector where thecompany operates.
As is traditional, December saw the presentationof the Long-Service awards given to workers ofthe various subsidiaries in the group who haveserved in the company for 25 or 35 years.
In 2009, 63 gold and 3 silver awards werepresented. The most numerous group camefrom Felguera Construcciones Mecánicas with21 workers who served for 35 years followedby Felguera Calderería Pesada, with 16 gold and
one silver award for Long Service. FelgueraMontajes y Mantenimiento followed with 10workers reaching 35 years in the company. Theremaining awards belong to Mompresa, Tedesa,Plantas Industriales, Energía and Duro Felguera,S. A.
Training has always been a priority for DuroFelguera and even more so (if that is possible)at this time given that the constanttransformations being experienced by thecompany's businesses demands a permanentrenewal of the workforce's abilities at allprofessional levels.
In 2009, 117 courses were given, 27% morethan last year, meaning 22,315 hours of trainingand with more than 550 company workers takingpart. In the occupational training area, two Heat
Insulation Specialist courses were provided to26 students over the length of 14,640 traininghours.
The company maintained the employment linkon the corporate web page "Trabaja con nosotros"and it was very active in 2009. This allows usersto manage and send their CVs and apply for thevarious openings that the group has to offer. Inthe same vein, the demands for courses by thecompany's professionals were arranged via"FormaT" within the corporate intranet. As inprevious years, in 2009 the Prevention of LabourRisks Service was very active throughout thecompanies making up Duro Felguera, payingspecial attention to the recent additions to thegroup or to those where production systemspresent greater risks. The training plans, risk
59The company has attained
the lowest accident and incidencerates in the last 8 years
2008
41.3
41.8
2009
Evolution of average age
41.0
40.2
40.6
200720062005
2008
12.85%
2009
Accident index rate
200720062005
10.75%
9.17% 9.08% 8.87%
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t studies, inspection of installations, hygienecontrol and evaluations have once again beenthe basic activities in this field whose aim is toreduce the accident at work rates.
The permanent health & safety challenge for agroup of companies with such a wide range ofactivities and technological characteristics andwith entirely different prevention needs, hasbeen an incentive to maintain and encouragethe health & safety management system inoperation under the OHSAS 18001:2007standard. A considerable number of safetymeasures were carried out in 2009 in order topass the audits which maintain the certificateand the internal audits that the system itselfdemands.
In 2009, if we look at the number of accidentsat work, the accident rate was maintained atlevels of previous years. 210 proceedings wereregistered for temporary absence from work,representing an incidence rate of 8,87%. Theimprovements in working conditions and controlof industrial risks have provided the bestincidence rates in the last eight years.Regarding other accident rate parameters, a realdecrease can be seen in comparison with theprevious year both in the rates of lost labourdays and the average duration of sick leave.
In addition and over the length of the year, awide range of industrial health programmeswere developed. These quantified and evaluatedrisk factors of physical origin as well as chemicaland biological agents present in the workenvironment. The follow-up and control of thisgroup of factors lead to 209 reports and healthevaluations for exposure to chemicalcontaminants in their solid, liquid or gas states,and physical contaminants in their various energyforms. These gave rise to 303 analyses of heavymetals, fumes and dusts.
In reference to preventing accidents at work,risk evaluation was the basis for safety planningto identify specific, new or emerging risks andto guarantee the greatest level of safety andprotection. A total number of 6,134 safetyactivities were carried out which included taskanalyses, safety reports, protocols, workprocedures and safety instructions and thesewere complemented with 11,634 sessions ontraining and information.
For the medicine at work section, 2,441 job-related medical check-ups were carried out aswell as 1,078 first-aid actions.
In 2009 Duro Felguera made special efforts inthe field of Research, Development andInnovation, commencing projects whose totalcosts amount to 8.5 million euros and whoseobjective is to develop new products andprocesses to maintain the company at theforefront of the international market. Over theyear, five new professionals joined the companyon tasks related to R&D.
Duro Felguera has increased the number ofprojects where it collaborates with universities,technological centres and other companies. 12new developments started in 2009 and another7, which had started in previous years, weresuccessfully completed. Among the newactivities are: those destined for both the nuclearfission and fusion markets; those related toinvestigating totally new processes and analysingmaterials with which the company had neverworked before; and developing weldingprocesses different to those known. Theseprojects are being carried out with companiesfrom various countries.
In addition to working on activities which willassure the presence of the company on researchprojects of the first order led by major European
Duro Felguera has increased collaborationwith universities and technology centresin the field of R&D
laboratories and research centres, FelgueraConstrucciones Mecánicas successfullyconcluded its studies on the manufacturingprocess of radiotherapy equipment for thetreatment of cancer using proton beams.
Felguera Calderería Pesada started research onnew materials and manufacturing processes forreactors that will guarantee the supply ofpetroleum derived fuels at reasonable pricesand adapting them to new environmental safetydemands. To this aim, it has been supported bythe University of Oviedo and Technology Centreswhose participation will mean great advancesin this field.
For the management of major turnkey projectswithin the power and industrial plants sectors,new management tools were developed whichwill make important reductions to executionschedules on projects that the group carriesout.
Mineral treatment plants are still one of the mainlines of business for Duro Felguera PlantasIndustriales. To be able to maintain itscompetitive vantage point, this subsidiary startedfeasibility studies to mine ferruginous hardquartzite deposits in cooperation with one of itsVenezuelan customers.
In the field of renewable energies, Duro FelgueraPlantas Industriales is participating on a projectalong with another four companies, technologycentres and universities in various parts of Spain.
The focus is on trying to deal with the problemsin the wind power market and to make theturbines more potent. Therefore, the consortiumis researching the design, manufacture andoptimum construction methods of wind turbinetowers made of steel and concrete. The projectwill finalise in 2012 with the installation of a
prototype resulting from these investigations.In line with its environmental protection policy,Duro Felguera has continued with the CENITCO2 project started in 2006, which will finalisein 2010 and whose fundamental objective is thereduction of CO2 emissions.
Felguera Melt in cooperation with the Universityand technology centres in Asturias continueswith work of major importance to the companycommenced in 2008, and whose finality is tolengthen the life of rail crossings by analysingthe different factors that affect the micro-porosityof manganese steel during the manufacturingprocess.
At the same time, this subsidiary has started todesign new elements and make improvementsto equipment for underground, tram and trainrail systems. The aim is to improve performanceby lowering maintenance, increase comfort forthe passenger and make environmentalprotection improvements. In this way thecompany will add value to its products, assuringits continuity on the market.
Lastly and worth highlighting is the researchbeing carried out by Montajes EléctricosIndustriales to optimise the erection of materialhandling and elevating machinery in automaticwarehouses where height restrictions limitedtheir installation until now.
Of note in the Corporate Governance area, isthe appointment of José María Nebot Lozanoas secretary to the Board of Directors, a postwhich he started to occupy in September,substituting Guillermo Quirós Pintado. The newsecretary of the Board is a State lawyer on leaveof absence and member of the Real Academiade Jurisprudencia y Legislación (Royal Academyof Jurisprudence and Legislation).
61
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t The Internal Audit and Risk Control Departmentcreated in mid-2008, centred a great part of itswork on matters related to: complying withinternal management standards; evaluation ofinternal control; reviewing the veracity ofaccounting information; and the prevention anddetection of fraud within the organisation.
In addition, towards the end of the year, workscommenced on implementing a new Code ofConduct aimed at all the workers in the companyand which makes respect for the law and humanrights a priority, in line with the commitmentmade by Duro Felguera and backed by itsadhesion to the UN World Compact and bybelonging to the Spanish association whichwatches over its compliance.
Throughout the year and in order to maintainmaximum transparency on the market, directorsof the company made several presentations tonational and international analysts and investors.
As it has become usual in the last few years,the company was invited to explain its situationand perspectives on the Madrid and Barcelonastock exchanges.
Regarding sponsoships and patronage in 2009,Duro Felguera maintained its cooperation withvarious social and cultural entities in thePrincipality of Asturias. Worth mentioning isthe support given to Laboral Centro de Arte yCreación Industrial to set up an archive ofAsturian artists, as well as to train artists underthe age of 45 with the first course of theprogramme called Ayudas a la ProducciónArtística.
In 2009, projects belonging to the Asturianartists Santiago Lara, Paula Fernández andFernando García-Dory were selected. The artistscarried out research and pre-production work
at the GlogauAIR centre in Berlín over a periodof two months and after that a period of post-production at the Laboral Production Centre.Their creations will be exhibited at the Laboralin 2010.
The company also collaborated with the Princeof Asturias Foundation (being a patron) as wellas with the Marino Gutiérrez Suárez Foundationin La Felguera (Asturias) on the watchdogcommittee, and with the Museo de la Siderurgia(Steel Industry Museum) in the same town, towhich it lent several pieces and furnishings fromits old installations.
In addition, Duro Felguera supported the workscarried out by the Fundación Cultural Hispano-Brasileña (Hispanic-Brazilian Cultural Foundation)and especially the project to produce anelectronic version of the Revista de Cultura
7
Brasileña (Brazilian Culture Magazine) on thefoundation's website making the entire magazinecollection available to researchers and the publicin general. The magazine is edited by the Brazilianembassy in Madrid and was founded by JoãoCabral in 1962. Its objective has always beento spread the vast production of Brazilian culturein the last 50 years among Spanish speakers.
In the field of sport, the company sponsoredthe Unión Popular de Langreo team for thesecond year running, the main football team ofthe Asturian council going under the same name,which plays in group II of third division Spanishfootball.
Duro Felguera's sponsorship includes thepatronage of the 13 football teams making upthe club where nearly 250 children and teenagers,between the ages of 5 to 18, play.
63
Directory
864
Headquarters
Parque Científico TecnológicoC/ Ada Byron, 9033203 Gijón, Asturias (Spain)
Chairman & CEOPh.: +34 98 519 91 03Fax: +34 98 519 90 50e-mail: [email protected]
CEOPh.: +34 98 519 91 03Fax: +34 98 519 90 50e-mail: [email protected]
Corporate Departments
Board Secretary & Legal CounselPh.: +34 98 519 91 16Fax: +34 98 519 90 51e-mail: [email protected]
Business & OrganisationPh.: +34 98 519 91 32Fax: +34 98 510 90 50e-mail: [email protected]
Economic Financial DepartmentPh.: +34 98 519 91 88Fax: +34 98 519 90 52e-mail: [email protected]
Human ResourcesPh.: +34 98 519 90 13Fax: +34 98 519 90 62e-mail: [email protected]
Communication & ImagePh.: +34 98 519 91 04Fax: +34 98 519 90 50e-mail: [email protected]
Internal Audit & Risk Controle-mail: [email protected]
New Business DevelopmentsPh.: +34 98 519 93 57Fax: +34 98 519 90 57e-mail: [email protected]
Purchasing DepartmentPh.: +34 98 519 93 02 / +34 98 519 93 04Fax: +34 98 519 90 58e-mail: [email protected]
Computer Systems DepartmentPh.: +34 98 519 90 21Fax: +34 98 519 90 63e-mail: [email protected]
Madrid Office
C/ Orense 58, 12ª A+B28020 Madrid, SpainPh.: +34 91 598 01 50Fax: +34 91 598 01 26e-mail: [email protected]
Power Systems
Duro Felguera, S.A. EnergíaParque Científico TecnológicoC/ Ada Byron, 9033203 Gijón, Asturias (Spain)Ph.: +34 98 519 93 52/86Fax: +34 98 519 90 54e-mail: [email protected]
Power Systems FinancePh.: +34 98 519 91 91Fax: +34 98 519 90 53
Industrial Plants
Duro Felguera Plantas Industriales, S.A.Parque Científico TecnológicoC/ Ada Byron, 9033203 Gijón, Asturias (Spain)Tel.: +34 98 519 92 32Fax: +34 98 519 90 59e-mail: [email protected]
Industrial Plants FinancePh.: +34 98 519 91 77Fax: +34 98 519 90 53
Commercial Department:Angel Pelegry Cuestae-mail: [email protected].: +34 98 519 92 02 Fax: +34 98 519 90 59
Production Department:Raúl Serrano Martíneze-mail: [email protected].: +34 98 519 92 43 Fax.: +34 98 519 90 59
Engineering Department:Roberto Pérez Lópeze-mail: [email protected].: +34 98 519 92 10 Fax: +34 98 519 90 60
Felguera-IHI, S.A.Parque Empresarial Las RozasC/ Jacinto Benavente, 428232 Las Rozas, Madrid (Spain)Ph.: +34 91 640 20 51Fax: +34 91 640 21 00e-mail: [email protected]
Duro Felguera Servicios
Dirección GeneralC/ Rodríguez Sampedro, 533206 Gijón, Asturias (Spain)Ph.: +34 98 517 94 95
65
Felguera Montajes y Mantenimiento S.A.Ph..: +34 98 517 94 94Fax: +34 98 534 64 84e-mail: [email protected]
Felguera Revestimientos, S.A. (Feresa)Ph.: +34 98 517 94 94Fax: +34 98 534 64 84e-mail: [email protected]
Montajes de Maquinaria de Precisión, S.A.(Mompresa)Ph.: +34 98 517 95 05Fax: +34 98 534 64 74e-mail: [email protected]
Operación y Mantenimiento, S.A. (Opemasa)Ph.: +34 98 517 94 49Fax: +34 98 534 64 74e-mail: [email protected]
Montajes Eléctricos Industriales, S.L.U. (MEI)Ph.: +34 98 569 19 48 - +34 98 569 09 65Fax: +34 98 534 47 83e-mail: [email protected] /[email protected]
Felguera Tecnologías de la Información S.A.Parque Tecnológico de Asturias, P-13 B33428 Llanera, Asturias (Spain)Ph.: +34 98 527 29 89Fax: +34 98 527 59 60e-mail: [email protected]
Manufacturing
Felguera Calderería Pesada, S.A.Travesía del Mar, s/n33212 Gijón, Asturias (Spain)Ph.: +34 98 532 26 00Fax: +34 98 532 56 50e-mail: [email protected]
Felguera Melt, S.A.Prolg. Ing. Fernando Casariego, s/n33930 La Felguera, Asturias (Spain)Ph.: +34 98 569 56 11Fax: +34 98 569 64 65e-mail: [email protected]
Felguera Rail, S.A.Ablaña s/n33600 Mieres (Asturias) SpainPh.: +34 98 545 41 47Fax: +34 98 545 39 03e-mail: [email protected]
Felguera Construcciones Mecánicas, S.A.Crta. de Langreo-Oviedo, s/n33930 Barros, Asturias (Spain)Ph.: +34 98 567 97 00Fax: +34 98 567 97 02e-mail: [email protected]
Técnicas de Entibación, S.A.(Tedesa)Polígono de Silvota, parcela 1033192 Llanera, Asturias (Spain)Ph.: +34 98 526 04 64Fax: +34 98 526 14 16e-mail: [email protected]
Subsidiaries
Acervo, S.A.C/ Marqués de Sta. Cruz, 1433007 Oviedo, Asturias (España)Ph.: +34 98 519 91 99Fax: +34 98 519 90 52
Representative Officesabroad
BrazilDuro Felguera Do BrasilAvenida das Americas nº 3.500, Sala 614, EdificioLe Monde, Condominio LondresBarra da Tijuca, CEP 22640-102Rio de JaneiroBrazil
IndiaFelguera Grúas y Almacenaje, S.A.Flat 201, Srinivas ToweraPandurangapuramVisakhapatnam 530 003Andhra Pradesh, IndiaPh: +91 91 775 57757e-mail: [email protected]
JapanOficina en Tokio3-21-2, 11th Floor, Helios Kannai BuildingMotohama-cho, Naka-kuYokohama, Kanagawa, JapanPh.: +81 45 222 0431e-mail: [email protected]
MexicoDuro Felguera, S.A.Duro Felguera Power México, S.A. de C.V.Felguera-Diavaz Proyectos México,S.A.de C.V.Av. Revolución, 468, Piso 3Col. San Pedro de los PinosC.P. 03800 Mexico, D.F.Ph.: +52 55 50 62 13 00Fax: +52 55 52 78 49 13e-mail: [email protected]
PeruTurbogeneradores del Perú, S.A.C.Avda. José Pardo 1167 Oficinas 204 y 307Miraflores (Lima) PeruPh.: +(51-1) 2421672Fax: +(51-1) 5776924
VenezuelaFelguera Parques y Minas de Venezuela, S.A.Torre CEM, piso 7, Oficinas 7-01 y 7-02C/ Gury con Avda. GuayanaAlta Vista, Puerto OrdazEstado Bolívar, VenezuelaPh.: +58 286 718 0123/ 0124/ 0136 +58 286 971 9773 +58 286 971 9120Fax: +34 98 519 90 59e-mail: [email protected]
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67Corporate GovernanceReport 2009
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Rep
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Corporate StructureShare capital and major shareholdersPrivate agreements between shareholdersTreasury stock
Board of Directors
Members of the BoardStatus of the DirectorsComposition (number, appointment, requirements, re-appointment and vacation)Members of the Board
ChairmanVice-chairmanSecretaryVice-secretary
Procedures (meetings and agreements)Board Committees
Audit CommitteeCommittee for Appointments, Remuneration and Expediting of StandardsExecutive Committee for Contracts, Investments and Projects
Management Work CommitteesManagement CommitteeRisk Committee
Connected Operations
Inter-group Operations
Annual General Meeting of Shareholders (AGM)AGM RegulationsInformation on the preceding AGMsCosts arising from the last AGMInformation means for shareholders
Audit
Relevant Events
69
70
78
79
79
80
85
86
Index
69
9The share capital of DURO FELGUERA,S.A. on 31 December 2009 was 51,008,300.50 euros, integrated by102,016,601 bearer shareholders represented by means of book-entry securities with a nominal value of 0.50euros each, totally subscribed and disbursed. All of the shares are officially quoted on the Stock Markets of Madrid,Barcelona and Bilbao, having the same political and economic rights. On 31 December 2009 the major shareholderswith a share capital of 5% or more were:
Corporate Structure
1.a Share Capital and Major Shareholders
Inversiones Somió, y Vinculadas
TSK Electrónica y Electricidad, S.A.
Residencial Vegasol, S.L.
Cartera de Inversiones MELCA, S.L., y vinculadas
Construcciones Termoracama, S.L.
LIQUIDAMBAR, Inversiones Financieras, S.L.
23.90 %
10.01 %
16.10 %
6.32 %
7.24 %
6.05 %
1.b Private Agreements Between Shareholders
The remaining company shares constitute participations that have not been communicated to the company andwhich are not on record, except for those attending or represented at the company's general meetings.
The company, to 31 December 2009, is not aware of any private agreements nor if the Stock Exchange Commissionhas been informed of any.
1.c Treasury Stock
The Board of Directors has exercised the right granted in the AGM held on 7 May 2009 and has acquired companyshares which at 31 December 2009 were equivalent to 1.62% of share capital.
1.
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Board of Directors2.
MEMBERS OF THE BOARD
CHAIRMAN & CEO Mr. Juan Carlos Torres InclánVICE-CHAIRMAN Inversiones Somió, S.L.
(represented by Mr. Juan Gonzalo Alvarez Arrojo)
CHIEF EXECUTIVE OFFICER Inversiones El Piles, S.L.(represented by Mr. Angel Antonio del Valle Suárez)
MEMBERS Construcciones Urbanas del Principado, S.R.L.(represented by Mr. Javier Sierra Villa)Construcciones Termoracama, S.L.(represented by Mr. Ramiro Arias López)Residencial Vegasol, S.R.L.(represented by Mr. José Antonio Aguilera Izquierdo)Construcciones Obras Integrales Norteñas, S.L.(represented by Ms. Marta Aguilera Martínez)Liquidambar Inversiones Financieras, S.L.(represented by Mr. José López Gallego)Mr. Marcos Antuña EgocheagaMr. Acacio Faustino Rodríguez GarcíaMr. José Manuel Agüera Sirgo
SECRETARY NON-MEMBER Mr. Guillermo Quirós Pintado (1)VICE-SECRETARY NON-MEMBER Mr. Secundino Felgueroso FuentesLEGAL ADVISOR Mr. Agustín Tomé Fernández
HONORARY CHAIRMAN Mr. Ramón Colao Caicoya(1) Until August 2009, substituted by Mr. José Mª Nebot Lozano
STATUS OF DIRECTORS
EXECUTIVE DIRECTORS Mr. Juan Carlos Torres InclánInversiones El Piles, S.R.L.
EXTERNAL DIRECTORSConstrucciones Obras Integrales Norteñas, S.L.Liquidambar Inversiones Financieras, S.L.Inversiones Somió, S.R.L.Construcciones Urbanas del Principado, S.R.L.Construcciones Termoracama, S.L.Residencial Vegasol, S.R.L.
INDEPENDENTS Mr. Marcos Antuña EgocheagaMr. Acacio Faustino Rodríguez GarcíaMr. José Manuel Agüera Sirgo
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1.1 NUMBER OF BOARD MEMBERSIn accordance with the company by-laws, the Board of Directors is made up of a minimum of six (6) membersand a maximum of twelve (12).
The Shareholder's Meeting at the Board's proposal will determine the number of members of the Board withinthe limits fixed by the company by-laws. The Shareholder's Meeting will appoint, ratify and re-elect the directors.
The Board will also designate a legal advisor for the Board of Directors.
1.2 APPOINTMENTThe Board members will be appointed by the Shareholder's Meeting or by the Board of Directors in accordancewith the standards contained in Company Law (Ley de Sociedades Anónimas).
The proposals made by the Board of Directors submitted to the Shareholder's Meeting and the decisions takenby the Board by virtue of the co-opting faculties it has legally attributed must be preceded by the correspondingproposal and report from the Committee for Appointments, Remuneration and Expediting of Standards.
1.3 REQUIREMENTS FOR BEING APPOINTED DIRECTORIn accordance with the Texto Refundido de la Ley de Sociedades Anónimas (TRLSA) (Revised Company Law),to be elected board member by co-option it is necessary to be a shareholder of the company.
In any case, the person to be designated board member or representative of a board member must not be involvedin any of the activities classified as incompatible or prohibited by Company Law or the company by-laws.
The office of board member will be compatible with any other function within the company.
The Board of Directors and the Committee for Appointments, Remuneration and Expediting of Standards willmake every effort to elect candidates of renowned solvency, competence and experience, taking special care withthe posts of independent board member who must comply with these regulations and who will be elected aftera formal selection process.
1.4 RE-APPOINTMENT AND VACATION OF OFFICE BY DIRECTORSThe Committee for Appointments, Remuneration and Expediting of Standards will be informed prior to theShareholder's Meeting of the directors proposed for re-appointment by the Board of Directors.
The directors will hold office for a maximum period of six years and may be re-elected.
The Board members elected by co-option will occupy the post up to the date of the following Shareholder'sMeeting or until the legal period expires when the following the shareholders' meeting takes place to approve theprevious year's accounts.
The Board members will vacate their office when the period for which they were appointed expires, when theShareholders' Meeting so decides or when they are found to be involved in any of the prohibitions stipulated bylaw.
The Board members must tender their resignations to the Board and duly resign when they are involved in anyof the prohibitions stipulated in Art. 124 of "Texto Refundido de la Ley de Sociedades Anónimas"(Revised CompanyLaw) and/or any other applicable legislation.
1. Composition
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2.1 CHAIRMANThe Board of Directors will appoint a Chairman from among its members. The range of powers and in particularwhether the Chairman may or may not carry out the functions inherent to the company's top executive will bedecided by the Board when being appointed.
It is the Chairman's responsibility to call the ordinary Board Meetings, to decide on the agenda and to chair thedebates. The Chairman however will call a meeting of the Board when requested by at least two board membersand will include the matters requested in the agenda.
In case of a tie in the voting, the Chairman's vote will be decisive.
2.2 VICE-CHAIRMANThe Board may appoint one or more vice-chairmen who will substitute the Chairman in his absence.
2.3 SECRETARYIt is not a pre-requisite for the secretary to be a member of the Board.The Board secretary will aid the Chairman in his functions and will ensure that the Board runs smoothly, beingespecially responsible for providing the Board members with advice and the necessary information, keep theCompany official documentation, record the minutes of Board meetings and witness agreements thereof.The secretary will ensure the legality of the Board's actions and will guarantee that its procedures and rules ofconduct be respected and regularly revised.
The secretary will also be responsible for interpreting corporate governance law and will verify that the companycomplies therewith in accordance with these regulations. In addition, the secretary will analyse corporate governancelaw recommendations to be included in the company by-laws.
2.4 VICE SECRETARYThe Board of Directors may appoint a vice-secretary who need not be a Board member to assist and substitutethe secretary in case of absence.
The vice-secretary may attend the Board meetings to substitute or assist the secretary when the Chairman sodecides.
2. Board Members
3. Procedures
3.1 MEETINGSThe Board of Directors will meet at least four times a year and regularly once a month. Furthermore and at theChairman's prerogative, as many times as deemed necessary for the smooth running of the company. The Boardwill also meet when at least two members so require and the Chairman will call the meeting.
The regular meetings will be called by any written means addressed personally to each board member with atleast one day's notice except for extraordinary circumstances perceived by the Chairman, in which case the Boardmeeting may be called without complying with this length of notice.
Along with the request to attend each meeting and as far as is possible for the extraordinary sessions, the memberswill be provided with the necessary documentation and information to discuss the points on the agenda.
The Board will draw up a calendar of regular meetings..
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3.2 AGREEMENTSThe Board will be considered valid when at least half of its members attend, be it in person or by representation.When any of the Board members cannot attend a meeting in person, they will make every effort to provide themember who will represent them with the necessary instructions as far as the agenda allows.
Except for the cases where quorum is otherwise established in these regulations and in circumstances requiredby law, the agreements will be reached by absolute majority of the attendees.
All the matters discussed by the Board of Directors will be secret and the members will maintain the confidentialnature of the matters discussed, except when the Board of Directors, considering the company's and shareholders'interests and the transparency regulations of the stock exchange commission, agrees to make certain mattersor decisions public. Confidentiality will not be required in those cases where law permits but communication willbe made in accordance with legal stipulations.
The legal advisor for the Board of Directors will watch and advise the Board on whether the agreements anddecisions are in accordance with law, the company by-laws, the stock exchange commission standards and theseregulations.
4.1 AUDIT COMMITTEE
4.1.1 COMPOSITION, PROCEDURES AND INTERNAL REGULATION
The Audit Committee will comprise at least three members appointed among the Board, who will occupy thepost over a period of four years. They may be re-elected for the same or less amount of time. The AuditCommittee will be made up by a majority of non-executives appointed by the Board of Directors. The chairmanwill be appointed among the non-executive members and must be substituted every four years though thepossibility of re-appointment exists one year after vacating office.
The members of the Audit Committee will be relieved of their responsibilities once the period for which theywere appointed has expired, of their own volition or by not being re-appointed board member.The members are subject to the same secrecy and confidentiality rules as the Board members. They will bedirectly responsible to the Board of Directors.
A secretary with the right to speak but without voting rights and who need not be a Board member will assistthe Committee. In addition, any member of the management team or company personnel, with the approvalof the Chairman or chief executive officer is obliged to attend the Committee meetings when requested to doso. The Committee may also request the attendance of the auditors.
The Committee will meet as many times as they deem necessary but not less than four times a year, andwithin the two-week period after each year quarter.
The Committee may operate when half of its three members plus one attend. When the members are not allpresent, the rule of unanimous instead of majority vote will apply.
The Committee may regulate its internal conduct to improve its performance and may propose modificationsto these regulations for the Board of Directors to submit to the Shareholders' Meeting.
4. Board of Committees
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4.1.2 OBJECTIVES AND RESPONSIBILITES OF THE AUDIT COMMITTEE
The activities of the Committee have the following objectives:
•To have unrestricted, direct access to all company financial information.•To have unrestricted, direct access to the external company auditors, holding informative and explanatorymeetings as necessary.•To supervise compliance with the audit contract, demanding that the auditors' opinion on the annual accountsand the contents of the report be written in a clear and precise manner.•To act as a channel between the Board of Directors and the auditors.•To evaluate the results of each audit and the response of the management team to the recommendationsmade by the auditors.•To act as intermediary in case of discrepancies between the management team and the auditors regardingthe principles and criteria to be applied in preparing financial statements.•To check the company accounts and ensure that the generally accepted accounting principles are appliedcorrectly.•To inform on proposed modifications to criteria and accounting principles suggested by the managementas well as those stipulated by law.•To check the integrity and use of adequate internal control mechanisms and to propose or review theappointment or substitution of those responsible.•To approve prospectuses and periodic financial information that the Board of Directors must supply to themarkets and their supervisory bodies.•Any other entrusted by the Board of Directors.
4.1.3 COMMITTEE MEMBERS
Mr. Marcos Antuña Egocheaga CHAIRMANMr. José Manuel Agüera Sirgo MEMBERMr. Juan Carlos Torres Inclán MEMBERMr. Inversiones El Piles, S.L. MEMBERConstrucciones Obras Integrales Norteñas, S.L. MEMBER
Mr. Secundino Felgueroso Fuentes SECRETARY NON-MEMBERMr. Agustín Tomé Fernández LEGAL ADVISOR
4.2 COMMITTEE FOR APPOINTMENTS, REMUNERATION AND EXPEDITING OF STANDARDS
4.2.1 COMPOSITION, PROCEDURES AND INTERNAL REGULATION
The Committee will consist of a minimum of three and a maximum of five components, members of the Boardof Directors, who are not directors or executive members of the Board and appointed by majority vote of theBoard members.
The appointment will have duration of five years and in any case the same duration as the post of Boardmember. The members may be re-appointed as many times as necessary as long as they are still membersof the Board.
The chairman will be appointed among the members for a period of five years and in any case for the amountof time left to occupy the post of Committee member. In addition, the secretary and legal advisor of the Boardof Directors will be considered members of the Committee with the right to speak but no voting rights.
The Committee will meet at the request of the chairman, at the company's registered office or where thechairman decides, whenever the Chairman or the majority of the members or the Duro Felguera Board ofDirectors decides.
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In any case, the Committee will meet at least twice a year and coinciding with dates which will allow analysisand study of conditions and information to decide on annual remunerations, appointments of the Boardmembers or top management of Duro Felguera and its subsidiaries. .
Any member of the management team or the company personnel, with approval of the Chairman or chief executive officer, is obliged to attend the Committee meeting when requested to do so.
The secretary will draw up the minutes of the deliberations, transcendental matters and the agreements, whichmust have the majority vote of the members.
The chairman of the Committee will inform the Board of Directors at the first meeting held of the content ofthe agreements reached by the Committee.
The Committee may regulate its internal conduct to improve its performance and may propose modificationsto these regulations to the Board of Directors.
4.2.2 FUNCTIONS OF THE COMMITTEE FOR APPOINTMENTS, REMUNERATION AND EXPEDITING OFSTANDARDS
The functions of this Committee are:
•To inform and propose for office members of the Board of Directors, to the Board itself, to decide by co-option when the need to cover a vacancy on the Board arises, or to the Shareholders' meeting.
•To decide and propose contractual conditions or company agreements with the Chairman and the chiefexecutive officer for the Board's approval. To inform and submit the remunerations of the Board membersfor approval by the shareholders and also that the Board may approve expenses to attend the Board meetingsand Committee meetings.
• To inform and submit for approval by the Board of Directors the selection and appointment of Duro Felgueratop level management, i.e. staff management, business line managers and managers of subsidiaries;remuneration policies, contract conditions and incentives which will take into account results of their areaof the company.
•To supervise management conduct, transparency of company dealings, compliance with the Internal Codeof Conduct by the Board Members and management of the company and to inform the Board of conductsor non-compliance with company codes so they may be corrected or to inform the Shareholders if they arenot corrected.
Within the scope of its functions is to present any matters it deems necessary before the Board for reviewand approval.
4.2.3 COMMITTEE MEMBERS
Construcciones Termoracama, S.L. CHAIRMANMr. Acacio Faustino Rodríguez García MEMBERInversiones El Piles, S.L. MEMBERResidencial Vegasol, S.R.L. MEMBER
Mr. Agustín Tomé Fernández SECRETARY & LEGAL ADVISOR NON MEMBER
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4.3 EXECUTIVE COMMITTEE FOR CONTRACTS, INVESTMENTS AND PROJECTS
4.3.1 COMPOSITION, PROCEDURES AND INTERNAL REGULATIONS
The Committee is made up of five Board members designated by the Board of Directors for the same periodof time as their office of Board member.
The Committee will elect a chairman among its members. The Committee will also elect a Legal Advisor, withrights to speak but without voting rights, who will be the Legal Advisor of the Board of Directors. The secretary,also with rights to speak but without voting rights, will be the vice-secretary of the Board of Directors.Any technical members of Company staff, who are required to do so, will also attend the meetings. TheCommittee may also be assisted with exclusive dedication by the technical staff that the Committee deemsnecessary. The appointment of the technical staff will be approved by the Chairman of the company who willdecide whether the person named is appropriate for the position. The technical staff will not be members ofthe Committee.
The Committee will always decide by majority vote of its members and will require the presence of at leasthalf plus one of its members to be valid.
The members of the Committee for Contracts, Investments and Projects will vacate office once the term forwhich they were elected expires, by resignation or by not being re-appointed member of the Board, but maynot be obligated to vacate office without majority vote of the Board.
The members of the Executive Committee for Contracts, Investments and Projects will be subject to the samesecrecy and confidentiality regulations as with the Board members, and will inform the Board of Directorsdirectly when requested to do so.
4.3.2 FUNCTIONS OF THE EXECUTIVE COMMITTEE FOR CONTRACTS, INVESTMENTS AND PROJECTS
A| Contracts
With reference to all Duro Felguera, S. A. contracts from the bidding phase to final conclusion, whether theyinvolve the Company directly or indirectly via any of its subsidiaries, in the following cases:
1) Contracts exceeding 200,000 euros. The Committee will:
a) fix the dates for third party companies to present contract proposals and to decide on the manner topublicise and/or request bidding proposals for these contracts;b) modify specifications of request for bids;c) open the sealed bids received containing the conditions of contract offers;d) decide on contracts, and may request any technical assistance to decide on the convenience ofsubscribing to the contracte) draw up content of the contract, watch over its development, execution and exact compliance up toguarantee expiry date;f) decide on modifications, extensions or renovation of contracts and if any of these were to exceed200,000 euros, a public request for bids will be made for the extension, modification or renovation. If theCommittee considers that it would be more favourable to the company's interests not to make a publicrequest for bids, it will provide the Board of Directors with a report on the matter and it will be the Board'sresponsibility to make the ultimate decision.
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2) Contracts which do not exceed 200,000 euros. The Committee will ensure that the criteria used to awardthese contracts are in accordance with market prices. If this were not the case, it will provide the Board ofDirectors with information on the corrective measures to be taken.
B| Investments
With reference to any investment or promise to invest in any type of goods or real estate of any kind, be itdirectly by the Company or indirectly via any of the subsidiary companies and in whatever form or title usedto carry out such investment, the Committee will be entitled to request any information and even requestreports from third parties related to any investment exceeding 120,000 euros in the financial year, as wellas being empowered to decide on the execution or not of such investments. To this effect, when during thefinancial year investments are made or promised, which do not reach the amount of 120,000 euros individually,but exceed this amount as a sum, the Committee will be empowered to intervene in any of the investmentsto follow, whatever the amount involved, be they intended investments or promises to invest in the financialyear.
C| Projects
With reference to any offer, commitment or contract to be carried out for customers or future customers ofthe Company, either directly by the Company or indirectly by any of the subsidiary companies and whoseamount exceeds 30,000,000 euros or may be exceeded by future extensions, even if carried out by ConsortiumAgreements or similar; or, even if the above characteristics are not applicable, the offer, commitment orcontract involves appreciable penalty risks above the usual market conditions, difficult payment customers,countries with commercial or political high risk characteristics, etc., the Committee will be empowered torequest any information considered necessary before presenting the offer, during execution and up to finalcompletion and to make any decision in the best interests of the Company and will report these decisions tothe Board of Directors or propose the most appropriate measures to be taken to the Board.
4.3.3 COMMITTEE MEMBERS
Mr. Juan Carlos Torres Inclán CHAIRMANMr. Acacio Faustino Rodríguez García MEMBERResidencial Vegasol, S.L. MEMBERInversiones El Piles, S.L. MEMBERConstrucciones Obras Integrales Norteñas, S.L. MEMBER
Mr. Secundino Felgueroso Fuentes SECRETARY NON MEMBERMr. Agustín Tomé Fernández LEGAL ADVISOR
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Although the Management Committee and the Risk Committee are not Board Committees, given their importancein company business developments and risk analysis where contracts are concerned, they are sufficiently relevantas to be included in this report.
1.1 FUNCTIONSThis Committee, made up of executive directors and the directors of each line of company business, analysesperformance of the company. The Committee is informed of project progress, the possibility of new business,deviations occurring in project execution and in general any relevant incidences.
1.2 MEMBERS
Mr. Juan Carlos Torres Inclán CHAIRMAN & CHIEF EXECUTIVE OFFICERInversiones el Piles, S.L. CHIEF EXECUTIVE OFFICERMr. Antonio Martínez Acebal GENERAL MANAGER ASSISTANT TO CHAIRMAN (1))Mr. Mariano Blanc Díaz CHIEF FINANCIAL OFFICERMr. Francisco Martín Morales de Castilla POWER SYSTEMS LINE DIRECTORMr. Félix García Valdés INDUSTRIAL PLANTS LINE DIRECTORMr. Carlos Ruiz Cornejo MANUFACTURING LINE DIRECTORMr. Antonio Mortera Morán SERVICES LINE DIRECTOR(1)Until 30 April 2009
2.1 FUNCTIONS
In general terms, this Committee analyses the risk that certain contracts may have for the company, consideringtheir volume, execution conditions, guarantees, the risk-country component, payment conditions and whether anew field of action is involved.
2.2 MEMBERS
Mr. Juan Carlos Torres Inclán CHAIRMAN & CHIEF EXECUTIVE OFFICERInversiones El Piles, S.L. CHIEF EXECUTIVE OFFICERFinancial Management ADVISORLegal Management ADVISOR
1. Management Committee
Management Work Committes3.
2. Risk Committee
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The company's major shareholders have carried out significant economic operations for supplies and serviceswith the Corporation, in free competition with other companies outside the share capital of Duro Felguera, S. A.and its subsidiaries, and at market prices.
All operations are analysed and approved by the Contracts Committee without the shareholder involved in thevoting or decision making process.
The financial sums of the operations and type of operation are reported to the Stock Exchange Commission.The overall amount of all operations in 2009 was as follows (thousands of euros):
TSK, Electrónica y Electricidad, S. A.: 9,836
Cartera de Inversiones Melca, S.L.: 20 Sales 4 Purchases
Duro Felguera, S. A., is made up of a group of companies whose activities are frequently complementary andtherefore business is strengthened by the various subsidiaries which taken as a whole can offer a more completeservice to its clients.
The economic and financial report contains the breakdown of the transactions carried out during 2009 betweenthe companies belonging to the group and associated companies, whether Duro Felguera, S. A is a direct orindirect shareholder, as well as the results to 31 December 2009. All inter-group operations are standard companypractice being carried out under ordinary market conditions and are eliminated from the consolidated informationwhen this is drawn up, including the financial operations managed by the parent company and other general staffservices.
Connected Operations4.
Inter-group Operations5.
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The Annual General Meeting of Shareholders, called and constituted according to law and company by-laws, isthe ultimate governing body of the company and represents all of the shareholders. Its agreements are mandatoryeven for those who do not attend and do not agree with the majority decisions taken, without prejudice to therights of reply as provided by law.
The Annual General Meeting of Shareholders will be held at the company's registered office or at a place stipulatedby the Board of Directors in accordance with law.
1.1 RIGHT TO ATTENDShareholders of at least two hundred and fifty (250) shares and who according to law have demonstrated ownershipof shares at least five days before the date of the general meeting will have the right to attend.The right to attend the general meetings and delegation of rights will be in accordance with the "Ley de SociedadesAnónimas" (Company Law).Any shareholder who has the right to attend may grant representation to attend on any other shareholder.Shareholders who do not possess the number of shares mentioned above in the first paragraph may group togetherto attend and designate a representative who must be a shareholder.To attend the general meeting, a personalised card will be given on request to each shareholder who has the rightto attend which will include indications provided by Law or by the company by-laws.
1.2 RIGHT TO VOTEThe attendees at the general shareholders' meeting will have one vote per share owned or represented. As faras fractions are concerned, these may be grouped to exercise the right to vote in accordance with Article 105.3"Ley de Sociedades Anónimas" (Company Law). Shares not carrying a vote will be governed by provisions in the"Ley de Sociedades Anónimas".
1.3 ORDINARY AND EXTRAORDINARY GENERAL MEETINGSThe General Meetings may be Ordinary and Extraordinary.The Ordinary General Meeting will be held on the day designated by the Board of Directors within the first semesterof the financial year, to discuss management, approve, if such is the case, the accounts of the previous year,decide on how the results will be applied, and to discuss and agree on any matter affecting the company.Any meeting not included in the above paragraph will be considered Extraordinary.
1.4. ANNOUNCEMENT AND PUBLICITYThe date of the General Meetings will be agreed by the Board of Directors and will be announced in the "BoletínOficial del Registro Mercantil" (Company Register Official Bulletin) and in one of the provincial newspapers withgreater circulation at least one month before the day it is to be held. The announcement will state the first daywhen the meeting may be held and the agenda. A second date may also be proposed which must be at leasttwenty-four hours after the first.Shareholders who represent at least 5% of share capital may request an addition to the announcement to includeone or more points on the agenda. This must be officially sent and received at the Company's registered officefive days after the meeting is announced. The supplementary announcement will be published at least two weeksbefore the Annual General Meeting date.
1. AGM Regulations
Annual General Meeting of Shareholders (AGM)6.
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1.5 RIGHT TO INFORMATIONAll shareholders may request in writing before the date of the meeting or verbally during the meeting any reportsor clarifications as necessary on the matters included on the agenda. The Board is obliged to provide informationexcept in those cases where the Chairman considers that publishing of certain data may harm the company'sinterests. This exception will not be applicable when shareholders representing at least a quarter of the sharecapital support the request. In the case of the Ordinary General Meeting and in other cases established by law, the announcement of the meeting will indicate what documents are to be submitted for the approval of shareholdersand, if such is the case, the report or reports legally foreseen and which are available to be examined and canbe obtained immediately and freely at the company's registered office.
1.6 REQUIREMENTS OF THE AGMThe Shareholders' General Meeting will be considered valid and will come to agreements which will oblige allshareholders, including those absent, who abstain or dissent when the minimum share capital is represented foreach case according to the revised text of the "Ley de Sociedades Anónimas", on both the first and second datesset for the meeting, and in accordance with items on the agenda.
1.7 CHAIRMAN AND SECRETARY OF THE AGMThe chairman and secretary of the General Meeting of Shareholders will be the same as those of the Board ofDirectors, or the Vice-chairman, and in their stead those designated by the AGM itself and proposed by the Boardof Directors. The role of the Chairman is to conduct the deliberations, deal with any doubts arising from the listof shareholders and the agenda, determine turns of discussion where he can place time limits on each speaker,and close the debates when he considers that sufficient time has been spent on any given matter, and in general,all the powers required to organise and lead the General Meeting of Shareholders. It is the Secretary's role todraw up the attendance list, the minutes of the General Meeting of Shareholders as well as other activities relatedto the above. Certifying agreements is the role of the secretary or vice-secretary of the Board of Directors withthe approval of the Chairman or vice-chairman. If the minutes of the General Meeting of Shareholders are drawnup by a notary public, this will be ruled by current law.
1.8 AGREEMENTS OF THE AGMFor there to be consensus at the general meetings be they ordinary or extraordinary and whether they are on thefirst or second date proposed, at least half plus one of the votes present or represented must be in favour.Agreements reached when the company absorbs another or other companies, will require an ordinary majorityas in the first paragraph of this article.For those cases contemplated in article 103 of "Ley de Sociedades Anónimas", a majority of votes defined thereinwill be mandatory unless by applying the above paragraphs of this article a larger number of votes is required,then in that case the requirement for larger number of votes established in this article will prevail.
1.9 PROCEDURE TO REACH AGREEMENTSEach of the items on the agenda will be submitted to vote individually. It is the responsibility of the Chairman toconduct the voting and he may be helped in this task by two or more freely appointed scrutinizers. Nevertheless,the Chairman of the meeting may decide to submit various items on the agenda to be voted on jointly in whichcase the result will be understood as if each of the items had been voted on individually if none of the attendeesexpresses the wish to modify their vote on any one of the items. If this were not the case, the minutes will reflectvoting modifications expressed by each of the attendees and the result of the vote corresponding to each of theproposals.
1.10 APPROVAL OF MINUTESAttendees at the General Meeting will be listed at the beginning of the minutes or the list may be attached as anannex signed by the secretary and approved by the Chairman. The list may also be on electronic support in themanner established by applicable standards. The minutes of the AGM may be approved at the meeting itself orwithin a period of two weeks by the Chairman and two representatives named at the meeting, one representingthe majority and the other the minority. The minutes will have executive force once approved by either of themeans mentioned above.
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1.11 SHAREHOLDERS' RIGHTS AT THE MEETINGThe documents to be submitted for approval by the Shareholders will be made freely available on request incompliance with articles 144 and 212 of the "Ley de Sociedades Anónimas":Annual Report, Balance Sheet, Profit and Loss Accounts and Management Report, all corresponding to the yearending on 31 December both for Duro Felguera, S.A., and for Duro Felguera, S.A. and its subsidiaries (Consolidated).Auditors' Report on Annual Accounts for Duro Felguera, S.A., and for Duro Felguera, S.A. and its subsidiaries(Consolidated). Proposal and application of the Year Results.
1.12 RIGHT TO REPRESENTATIONShareholders who can legally attend are those who at least five days before the date of the meeting have accreditedownership of at least two hundred and fifty (250) shares at any of the entities belonging to "Servicio de Compensacióny Liquidación de Valores", who will provide the corresponding attendance cards. These may also be provided bythe company at its registered office: Marqués de Santa Cruz, 14, 1º, Oviedo (Asturias), against the deposit of thedocumentation proving ownership of the shares.
2.1 ORDINARY GENERAL MEETING ON 7th MAY 2009
The attendance quorum reached 79.40% of subscribed stocks and shares, with an attendance of 32.18%, and47.22% represented. The voting results for the items on the agenda were as follows:
FIRST. Review and approval of the management report and annual accounts (Balance Sheet, Profit and LossAccounts, and Annual Report) of Duro Felguera, S.A., and Duro Felguera, S.A. and its subsidiaries (Consolidated),corresponding to the year 2008 and proposal on how to apply the results of the financial year.
Dividends.- 33,665 thousand eurosReserves.- 9,140 thousand euros.Results of the voting (votes):In favour.- 71,237,680Against.- 9,760,431Abstentions.- 0
SECOND. Approval of management by Board of Directors in 2008.Results of the voting (votes):
In favour.- 71,249,487Against.- 9,748,624Abstentions.- 0
THIRD. Authorisation for the Board of Directors to acquire Company shares by the company or its subsidiariesin accordance with "Art. 75, Disposición Adicional Primera y concordantes" of "Texto Refundido de la Ley deSociedades Anónimas" (Company Law), specifying mode of acquisition, maximum number of shares, maximumand minimum purchase prices and duration of the authorisation, thereby leaving without force the previousauthorisation given at the last General Meeting on 9th May 2008.
2. Information on the Last General Meetings
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It was agreed to authorise the Board of Directors to acquired company shares up to the maximum stipulatedby current law over a maximum period of 18 months, at a minimum price of 1 euro and a maximum of 18euros.Results of the voting (votes):
In favour.- 71,248,507Against.- 9,749,604Abstentions. - 0
FOURTH. Appointment or re-election of the Auditors in accordance with Art. 204 of "Texto Refundido de laLey de Sociedades Anónimas" (Company Law).The result was the re-election of Pricewaterhouse Coopers Auditores, S.L. over a period of three years: forthe 2009, 2010 and 2011 financial years to audit the accounts of both the individual Company and thecompanies that make up the group.Results of the voting (votes):
In favour.- 71,249,487Against.- 9,748,624Abstentions.- 0
FIFTH. Delegation of powers to formalise or execute the agreements reached, to carry out the mandatorydeposit of the annual Accounts, the Auditor's reports and to inform and notify the competent bodies, indistinctlyon the Company Chairman, the Secretary of the Board of Directors and its Vice-secretary.
In favour.- 71,249,487Against.- 9,748,624Abstentions.- 0
2.2 ORDINARY GENERAL MEETING ON 9th MAY 2008
Firstly the number of shares present or represented with voting rights was counted, making an attendance of79.18% of fully subscribed stocks.
The results of the voting on the various points on the agenda proposed were as follows:
FIRST. Review and approval of the management report and annual accounts (Balance Sheet, Profit and LossAccounts, and Annual Report) of Duro Felguera, S.A., and Duro Felguera, S.A. and its subsidiaries (Consolidated),corresponding to the year 2007 and proposal on how to apply the results of the financial year.
Dividends.- 30,605 thousand eurosReserves.- 1,325 thousand euros.Results of the voting (votes):In favour.- 73,066,423Against.- 7,711,154Abstentions.- 720
SECOND. Approval of management by Board of Directors in 2007.Results of the voting (votes):
In favour.- 72,820,181Against.- 7,711,154Abstentions.- 246,962
THIRD. Modifications to Articles 20 and 21 of the Company By-Laws to modify the length of time that adirector may hold office, which changes to six years, and suppression of the age limit for directors to holdoffice, and consequently draw up the new wording of both articles.
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Results of the voting (votes):In favour.- 72,444,158Against.- 8,533,419Abstentions.- 720
FOURTH. To modify Article 21 of the Company By-Laws, changing the maximum number of chief executiveofficers that the Board can appoint to two and also changing the maximum number of executive or delegatecommittees that the Board can appoint to one, and consequently draw up the new wording of the article.Results of the voting (votes):
In favour.- 73,066,423Against.- 7,711,154Abstentions.- 720
FIFTH. To stipulate the number of members on the Board of Directors within the limits stated in article 20of the Company By-Laws and consequent ratification, release or appointment of Board members.Within this point on the Agenda the following was proposed:1) To stipulate eleven as the number of members on the Board of Directors.2) Ratification of the member CONSTRUCCIONES OBRAS INTEGRALES NORTEÑAS, S.L.
Results of the voting (votes):In favour.- 72,244,878Against.- 822,265Abstentions.- 7,711,154
3) To appoint LIQUIDAMBAR INVERSIONES FINANCIERAS, S.L.Results of the voting (votes):In favour.- 73,067,143Against.- 0Abstentions.- 7,711,154
4) To approve continuity as Board member RESIDENCIAL VEGASOL, S.L., after having renounced the groupingof shares basis used in its day to exercise right of proportional representation.Results of the voting (votes):
In favour.- 72,244,878Against.- 822,265Abstentions.- 7,711,154
SIXTH. Authorisation for the Board of Directors to acquire Company shares by the company or its subsidiariesin accordance with "Art. 75, Disposición Adicional Primera y concordantes" of "Texto Refundido de la Ley deSociedades Anónimas" (Company Law", specifying mode of acquisition, maximum number of shares, maximumand minimum purchase prices and duration of the authorisation, thereby leaving without force the previousauthorisation given at the last General Meeting on 3rd May 2007.Results of the voting (votes):
In favour.- Unanimous
SEVENTH. Appointment or re-election of the Auditors in accordance with Art. 204 of "Texto Refundido de laLey de Sociedades Anónimas" (Company Law).The result was the re-election of Pricewaterhouse Coopers Auditores, S.L. for the 2008 financial year to auditthe accounts of both the individual Company and the companies that make up the group.Results of the voting (votes):
In favour.- 73,067,143Against.- 7,711,154Abstentions.- 0
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EIGHTH.Delegation of powers to formalise or execute the agreements reached, to carry out the mandatorydeposit of the annual Accounts, the Auditor's reports and to inform and notify the competent bodies, indistinctlyon the Company Chairman, the Secretary of the Board of Directors and its Vice-secretary.Results of the voting (votes):
In favour.- Unanimous
The announcement of the Shareholders' Meeting was published in the "Boletín Oficial del Registro Mercantil"(Company Register Official Bulletin) and in the Asturian newspapers: "La Nueva España", "La Voz de Asturias" and"El Comercio", as well as the national financial daily newspaper "Expansión".
The expenditure on publication of the announcement came to the sum of 17,978.46 euros
Publication of the Annual Report, hiring of the conference room to hold the Meeting, audiovisual means and thenecessary services to hold the meeting as well as the attentions bestowed on the Shareholders who attendedproduced a cost of 55,229.38 euros.
The company has a shareholder assistance service which can be contacted at:Address:Parque Científico TecnológicoC/ Ada Byron, 9033203 GijónTelephone: (+34) 900 714 342E-mail: [email protected]
There is also a web page (www.durofelguera.com) which contains information on the company, its rules andevents notified to the Stock Exchange Commission
The auditors from Pricewaterhouse Coopers have received the following fees in 2009:
For auditing Duro Felguera, S.A and Duro Felguera (Consolidated) accounts: 375,000 euros.
In addition, they have carried out other specific non-audit tasks receiving a sum total of 315,000 euros.Companies other than the main auditor received 3,000 euros for other auditing works.
3. Costs Arising from the Last Shareholders Meetings
4. Information means for the shareholder
Audit7.
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In 2007, 2008 and 2009 the following relevant events were conveyed to the National Stock Exchange Commission:
9Relevant Events8.
25/11/2009
03/11/2009
28/10/2009
30/09/2009
07/08/2009
04/08/2009
31/07/2009
30/07/2009
04/06/2009
04/06/2009
25/05/2009
07/05/2009
29/04/2009
25/03/2009
27/02/2009
26/02/2009
26/02/2009
26/02/2009
28/11/2008
28/11/2008
27/11/2008
30/10/2008
30/10/2008
15/09/2008
31/07/2008
31/07/2008
30/07/2008
23/06/2008
03/06/2008
12/05/2008
09/05/2008
05/05/2008
05/05/2008
31/01/2008
27/02/2008
28/02/2008
12/03/2008
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29948
115474
114313
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112297
112118
29383
109351
28974
28909
108100
107578
106131
28254
104509
104496
28218
100826
27745
27734
27516
99476
27235
96389
96357
96318
94913
26392
93104
93062
92724
92713
88785
25671
89929
905754
Information on Dividends
Other relevant events
Intermediate financial information
Members of the Board of Directors
Information on Dividends
Members of the Board of Directors
Intermediate financial information
Information on results. - Strategies,
Forecasts and presentations
Agreements by the Board of Directors
Other relevant events
Information on Dividends
Announcement and agreements of the shareholders meetings
Intermediate financial information
Announcement and agreements of the shareholders meetings
Information on Dividends
Corporate Governance Report
Intermediate financial information
Information on results. - Strategies,
Forecasts and presentations
Presentation by the company
Correction of relevant events communication
Announcement of dividend and voucher payments
Presentation by the company
Results preview of issuing companies
Announcement of dividend and voucher payments
Regulation of the Board of Directors
Results preview of issuing companies
Presentation by the company
Increases or decreases in treasury stock
Announcement of dividend and voucher payments
Agreements by the Board of Directors
Agreements of shareholders meetings
Changes to the Board of Directors
Results preview of issuing companies
Agreements by the Board of Directors
Announcement of dividend and voucher payments
Results preview of issuing companies
Agreements by the Board of Directors
DATE REGISTRY Nº TYPE OF EVENT
8726/03/2008
31/03/2008
04/04/2008
16/04/2008
28/11/2007
07/11/2007
05/11/2007
05/11/2007
04/11/2007
10/09/2007
30/07/2007
05/06/2007
03/05/2007
25/04/2007
17/04/2007
29/03/2007
28/03/2007
08/03/2007
28/02/2007
01/02/2007
91021
25988
91518
92003
24863
24607
85522
85520
24328
24184
82612
23636
79922
79501
79213
78623
78585
22913
77519
22628
Announcements and agreements of shareholders meetings
Presentation by the company
Corporate Governance Report
Other relevant events
Announcement of dividend and voucher payments
Presentation by the company
Other relevant events: appointment of General Manager Assistant
to Chairman
Results preview of issuing companies
Other relevant events: renewal of Audit Committee
Other relevant events: contracts July and August 2007
Results preview of issuing companies
Announcement of dividend and voucher payments
Announcements and agreements of shareholders meetings
Results preview of issuing companies
Share acquisitions or transmissions
Corporate Governance Report 2006
Announcements and agreements of shareholders meetings
Announcement of dividend and voucher payments
Results preview of issuing companies
Presentation by the company
DATE REGISTRY Nº TYPE OF EVENT
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