23091_TTS 2006_eng.indd - TTS Group ASA

A N N U A L R E P O R T 2 0 0 6

TTS GROUP 

Financial highlights 4 

Vision, business idea and strategy 6 

This is TTS 8 

Key events 2006 10 

REPORT FROM THE CEO 

Growth – and further progress 11 

BUSINESS AREAS 

Dry Cargo Handling Division 14 

Marine Cranes Division 16 

Port and Material Handling Division 18 

Deck Machinery Division 20 

TTS expects growth in Vietnam 

Crane division prepared for 

22 

new challenges 

Continued strong market for 

24 

ships equipment until 2015? 26 

CORPORATE GOVERNANCE 

INFORMATION 

Shareholder information 28 

Corporate Governance 30 

Board of Directors TTS Marine ASA 32 

Senior management 34 

DIRECTOR’S REPORT AND 

ACCOUNTS 

Director’s report 36 

Profit and loss account and notes 

- Group 43 

- TTS Marine ASA 71 

Auditor’s report 87 

TTS 

Companies in the TTS-group 88 

Organisation 90 

2

11 14 Dry 

President & CEO 

Cargo Handling Division 

16 18 

Marine Cranes Division 

Port and Material Handling Division 

20 

Deck Machinery Division

4-11 TTS GROUP 11-13 REPORT FROM THE CEO 14-27 BUSINESS AREAS 28-35 CORPORATE GOVERNANCE 36-87 DIRECTOR’S REPORT AND ACCOUNTS 

Financial highlights 2006 

4 

IFRS IFRS IFRS NGAAP NGAAP 

2006 2005 2004 2003 2002 

PROFIT AND LOSS ACCOUNT (NOK 1.000) 

Operating income 1 604 030 1 149 831 786 174 621 505 744 169 

Operating profit/loss before depresiation (EBITDA) 98 613 67 199 42 122 13 705 31 662 

Operating profit/loss (EBIT) 89 697 59 635 36 056 -2 657 13 936 

Pre-tax profit/loss 84 492 56 297 31 251 -1 225 9 509 

Net profit/loss 60 481 40 239 21 630 655 11 336 

BALANCE SHEET (NOK 1.000) 

Fixed assets 460 996 429 629 335 374 268 849 263 264 

Current assets 1 172 135 753 157 465 029 454 738 418 701 

Total assets 1 633 130 1 182 786 800 402 723 587 681 965 

Equity 598 062 394 932 260 909 223 669 213 053 

Long-term liabilities 196 635 77 279 76 294 41 695 65 190 

Current liabilities 838 434 710 574 463 199 458 222 403 723 

Total equity and liabilities 1 633 130 1 182 786 800 402 723 587 681 965 

KEY RATIOS 

FINANCIAL STRENGTH 

Equity to assets ratio (as a percentage of total capital) 36.6 % 33.4 % 32.6 % 30.9 % 31.2 % 

PROFITABILITY 

EBITDA margin 6.1 % 5.8 % 5.4 % 2.2 % 4.3 % 

EBIT margin 5.6 % 5.2 % 4.6 % -0.4 % 1.9 % 

Profit margin (pre-tax) 5.3 % 4.9 % 4.0 % -0.2 % 1.3 % 

Profit margin (after tax) 3.8 % 3.5 % 2.8 % 0.1 % 1.5 % 

RATE OF RETURN 

Return on equity 14.1 % 14.3 % 12.0 % -0.5 % 4.5 % 

Return on total capital 5.5 % 5.0 % 4.5 % -0.4 % 2.0 % 

SHARES 

Equity per share 26.59 21.39 17.36 15.07 15.64 

Earnings per share (NOK) 2.92 2.19 1.44 0.04 0.83 

Number of shares, end of year 22 493 20 116 16 315 14 845 14 845 

Average number of shares 20 832 18 460 15 029 14 845 13 625 

Nominal value, end of year 0.50 0.50 0.50 0.50 0.50 

DEFINITIONS 

Earnings per share: Profit after taxes divided on total number of shares at the end of the fiscal year. 

Profitability, equity: Profit before tax as a percentage of equity. 

Profitability, total capital: Operating profit as a percentage of total capital.

TURNOVER 

NOK million 

744 

622 

2002 2003 2004 2005 2006 

EBITDA 

NOK million 

32 

14 

786 

42 

1150 

1604 

2002 2003 2004 2005 2006 

ORDER BACKLOG 

NOK million 

418 

502 

922 

67 

1653 

99 

2019 

2002 2003 2004 2005 2006 

TURNOVER 2006 

DM 

16 % 

PMH 

11 % 

MC 

28 % 

DCH 

45 % 

ORDER BACKLOG 2006 

DM 

23 % 

PMH 

7 % 

MC 

30 % 

DCH 

40 % 

TURNOVER 2005 

PMH 

DM 12 % 

4 % 

MC 

27 % 

DCH 

57 % 

ORDER BACKLOG 2005 

DM 

22 % 

MC 

24 % 

PMH 

4 % 

DCH 

50 % 

DRY CARGO HANDLING 

MNOK 2006 2005 

Turnover 728.2 649.2 

EBITDA 80.3 61.3 

Order backlog 809.0 825.0 

MARINE CRANES 


Turnover 439.6 309.0 

EBITDA 13.5 0.2 


DECK MACHINERY* 


Turnover 257.4 50.4 

EBITDA -4.6 2.5 


*) With effect from 1 October 2005 TTS aquired Kocks GmbH 

with one subsidiary and one Joint Venture company. 

PORT AND MATERIAL HANDLING 


Turnover 178.8 140.7 

EBITDA 12.6 7.0 


5

6 

TTS – continuously 

generating profits 

by being the preferred 

global supplier for 

handling equipment 

to the maritime industry.

BUSINESS IDEA 

TTS is a global company that develops, markets, and supplies complete 

handling systems for the maritime industry that meets the markets 

requirements and expectations, in a way that the clients are able to 

increase their own productivity and profitability. TTS’ resources are 

focused on design and engineering in addition to assembly and testing. 

Other activities that belong under a turnkey delivery will in principle 

be purchased from subcontractors. After sales and service is a business 

area of priority. 

STRATEGY 

TTS’ strategy is to build trust amongst its customers whilst also being 

price and cost competitive. Trust is built through quality and expertise 

to end users, and flexibility and efficiency in deliveries to the shipyards. 

Appropriate and professional handling of guarantee matters is essential 

in the effort to become preferred supplier. TTS has a programme of 

specific measures to implement this strategy. 

”FIRST AND LAST CALL” 

Another way of expressing our vision is that TTS wants to be the supplier 

which receives “The first and the last call”. This means that TTS Marine 

ASA aims to be the company that the customer calls first when they 

are considering new solutions and new projects. TTS shall possess the 

expertise and capacity to advise customers during this phase. “The last 

call” we want from the shipyards at the end of their decision process, 

to get the chance to meet the lowest price. This means that TTS must 

have a globally competitive cost structure in order to compete with 

the lowest bidder. 

7


This is TTS 

TTS is an international group which 

develops and supplies maritime 

handling equipment. The operations 

are divided into the divisions 

Marine Cranes, Dry Cargo Handling, 

Port and Material Handling, and 

Deck Machinery. TTS is the second 

largest supplier in the world within 

its market segments. TTS has a 

workforce of 650 employees with 

main emphasis on engineering 

expertise. The group has subsidiaries 

in Norway, Sweden, Finland, 

Germany, China, USA, Italy, Czech 

Republic, Korea and in Vietnam. 

TTS Marine ASA is headquartered 

in Bergen, Norway and listed on 

the Oslo Stock Exchange. 

8 

1966 TTS is established. 

1995 TTS is listed on Oslo Stock Exchange. 

1996 TTS acquires Mongstad Engineering AS, 

Bergen, Norway. 

1997 TTS acquires Norlift AS Bergen, Norway. 

2000 TTS acquires Aktro AS, Molde, Norway. 

2001 TTS establishes joint venture in Shanghai, China. 

2001 TTS sells TTS Construction AS. 

2001 TTS acquires Hamworthy KSE AB, Dry Cargo. 

2001 TTS acquires Hydralift Marine and sells TTS Aktro. 

2002 TTS establishes office in Pusan, Korea. 

2004 TTS acquires 100 % of joint venture in Shanghai, China. 

2004 TTS acquires LMG Cranes in Lübeck, Germany. 

2004 TTS acquires Liftec Oy in Tampere, Finland. 

2005 TTS establishes TTS Bohai Machinery in Dalian, China. 

2005 TTS etablishes TTS Inc. in Miami, USA. 

2005 TTS acquires NavCiv Engineering AB, Sweden. 

2005 TTS acquires Kocks GmbH in Bremen, Germany. 

2006 TTS establishes TTS Marine s.r.l., Genoa, Italy. 

2006 TTS establishes TTS Vietnam, Haiphong, Vietnam. 

2007 TTS acquires TTS Offshore Handling Equipment AS, 

Ålesund, Norway. 

MILL NOK 

2000 

1800 

1600 

1400 

1200 

1000 

800 

600 

400 

200 

0 

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 

05 06 

Port and Material Handling Equipment Marine Equipment

Dry Cargo Handling 

RoRo equipment 

Hatch covers 

Side-loading systems 

Cruise and yacht equipment 

Companies in the TTS Group 

Sales and service network 

Port and Material Handling 

Shipyard equipment 

Heavy load handling 

Port and terminal equipment 

TTS Marine ASA 

Marine Cranes 

Hose handling cranes 

Cargo cranes 

Davits 

Offshore cranes 

Offshore handling equipment 

Deck Machinery 

Anchor- and mooring 

winches 

9

Key events 2006 

TTS once again reported record high turnover 

and results in 2006, with a turnover of NOK 1 604 

million and earnings before depreciation (EBITDA) 

of NOK 98.8 million. 

At the end of the year, TTS had an order backlog 

of NOK 2 019 million, the highest level ever 

recorded in the history of the company. The rate 

of contracts remains excellent within all areas 

of operation. 

In 2006, TTS achieved an improvement in results 

following the past years restructuring of crane 

activities. Next in line is an intense targeting 

of the market for cranes to offshore vessels. 

In 2006, TTS experienced a record high demand 

for equipment for RoRo vessels, particularly for 

car carriers. In total, TTS entered into agreements 

for delivery of equipment for 14 car carriers. 

In 2006, TTS established itself in Genoa in Italy, 

where it focuses on delivery of equipment to 

mega yachts; a market in rapid growth both in 

Germany and Italy. 

10 

In 2006, TTS opened a sales and representative 

office in Haiphong in Vietnam. Several substantial 

contracts have been entered into for delivery of 

equipment to the government-owned shipbuilding 

group Vinashin. 

TTS entered into an agreement in 2006 to include 

deck machinery as part of the product portfolio 

of TTS Bohai Machinery in China. Plans are being 

made for a new operation in Dalian, to handle 

assembly and testing of these products. 

In 2006, TTS experienced a breakthrough in the 

market for container terminals. The company 

will focus on further product development in 

this segment. 

TTS’ share price increased by 133 percent in 2006, 

and the Board proposes a payment of dividend of 

NOK 1 per share.


Growth - and further progress 

PRESIDENT & CEO 

THE PAST THREE YEARS have been a tremendous 

success for TTS. Last year, TTS reported 

a turnover of almost NOK 1 billion more than 

in 2003, and operating profit before depreciation was 

NOK 85 million greater than three years before. In the 

period from 2003 till the end of 2006, the company’s 

share price went up from NOK 9.71 to NOK 72.75. 

The primary cause of this positive development is 

that the market for our products has continued to grow 

steadily over the period of these years. Globalisation 

has lead to an increased trading between countries 

and continents, and with that comes the need for 

more transport. Shipbuilders across the globe are 

enjoying prosperous times, resulting in a demand for 

all types of ships equipment, and TTS’ order book 

has become four times as thick as it was at the end 

of 2003. 

The TTS Group is in a favourable position. At the 

same time it is important to emphasise that nothing 

comes without effort. In 1999, the Board of TTS 

proposed a growth strategy based on expansion 

within existing business segments and acquisition of 

companies in associated areas. This has required 

an enormous amount of hard work throughout the 

entire organisation. During this process, we have had 

to carry out difficult readjustments. The company 

would therefore like to take the opportunity to thank 

each and every one of its employees for their loyalty 

and effort in helping us achieve our ambitious goals. 

Together, we have built up TTS to become a strong 

and visible brand within our market segments; visible 

in the sense that in most cases where the market 

requires systems and products within our product 

portfolio, we will be on the maker’s list. We would 

therefore also like to thank our customers across 

the globe for showing confidence and trust in our 

company. Last, but not least, we would like to thank 

our owners, who have great belief in the company 

and who have given us the opportunity to develop 

operations and intensively target new areas. As a 

result of TTS’ economy having become this robust, the 

board has recommended dividend to be paid to TTS’ 

shareholders for the first time in the history of the 

company. 

We feel quite certain that the good development 

will continue. We have orders and capacity to increase 

our total turnover this year by 20-25 percent, while 

our order books are already filling up for 2008 and 

beyond. Activities within all our established areas of 

operation will remain at a relatively high level, which 

is further confirmed by an extremely satisfying rate of 

order intake so far in 2007. The forecast for contracting 

of new vessels indicates a positive market as far ahead 

as 2015, and as a result of the strong increase in new 

sales, the requirements for after-sales and service will 

be considerable for years to come. 

TTS is today an global corporation developing and 

delivering maritime equipment. Our four divisions; 

Dry Cargo Handling, Marine Cranes, Port and Material 

Handling and Deck Machinery, each have their own 

11

Our aim is to establish TTS in 

the market for handling equipment 

for fixed and floating offshore 

installations. 

JOHANNES D. NETELAND, PRESIDENT & CEO 

12


product portfolio, but over the past few years, we have 

primarily focused on two areas of interest; namely 

equipment for marine cargo handling on board ships 

and onshore cargo handling, mainly for port terminals 

and for shipbuilding. In the ships equipment market, 

TTS has built up a solid marked position over a number 

of years. With regard to port terminal equipment, 

we are still at an early stage, however, last year’s 

breakthrough in the market for container terminal 

systems indicate that our products and expertise are 

sought after in this area too. 

We are currently taking steps to adding a third 

pillar which will become important to TTS in the future. 

Before 2001 TTS was a participant in the offshore 

cranes market. In connection with a very important 

acquisition which was a crucial move in obtaining the 

leading position that we currently hold within the 

market for delivery of equipment to RoRo ships, we 

agreed to a five-year quarantine period from the 

offshore market for TTS. Now we are back, and aim 

to build up a position, step by step, to supply cranes 

and other lifting equipment to the offshoremarket. 

We think we have the necessary knowledge and 

capacity to develop this activity within our Norwegian 

organization, providing we succeed in completing 

the process of transferring expertise and other 

responsi bilities in the crane sector to our operations 

in China. We must make use of available engineering 

resources to our best advantage. 

TTS acquired ICD Projects AS in 2007, a company 

that is providing access to technology crucial to our 

targeting of the offshore market. Hence, TTS is once 

again able to provide all types of cranes for installation 

on offshore vessels. Furthermore, we are introducing 

equipment for subsea handling operations at great 

ocean depths, thereby making offshore handling 

equipment a new business segment. Our aim is to 

establish TTS in the market for handling equipment 

for fixed and floating offshore installations, as the 

potential of this market is enormous. 

We look upon the shareholders’ expectations and 

the financial market’s scrutiny as positive and construc- 

tive. Assessment of the company’s ability to create 

value is closely related to our ability to strengthen 

operations in established areas, and to develop new 

activities in sectors where we have special qualifications. 

We will continue to grow, and it is a great pleasure to 

note that our offshore products already have received 

such positive feedback. We have the strength, maturity 

and not least the courage that takes us to the next 

step, so stay with us! 

Johannes D. Neteland 


13


Dry Cargo Handling Division 

The very positive development in turnover and results for the Dry Cargo Handling Division 

continued in 2006. The market outlook remains extraordinary. 

D 

RY CARGO HANDLING DIVISION is the largest and 

most profitable division of TTS. In 2006, the company 

confirmed its position as a leading supplier of marine cargo access 

systems, largely as a result of great success in the new shipbuilding 

markets in Asia. Deliveries include RoRo equipment, hatch 

covers, side-loading systems and special equipment for cruise ships, 

passenger ships and mega yachts. 

The division is managed from Gothenburg in Sweden and has 

operations in China, Germany, Norway, Italy, USA and Vietnam. 

In May 2006, TTS established itself in Genoa in Italy, with a focus 

on deliveries of equipment to mega yachts, a market in strong 

growth, both in Italy and in Germany. In November of 2006, TTS 

opened a sales and representative office in Haiphong, Vietnam, 

and the company has already entered into several major contracts 

regarding delivery of ships equipment to the state-owned shipbuilding 

group Vinashin. The division also participates in the 

expanding Chinese market with 50 percent ownership in a joint 

venture company in Shanghai, China. The development in turnover 

and results for 2006 for this company was excellent. In addition 

to the production and sales units, TTS has a global network of 

sales agents and service stations. 

In 2006, Stellan Bernsro took over as Divisional Director of 

the Dry Cargo Handling Division, while maintaining his position 

as Managing Director of TTS Ships Equipment AB. Bernsro has 

experience as a naval officer and holds a degree in industrial 

engineering and management. He has many years of experience 

related to engineering and sale of the division’s products and systems. 

– TTS is a preferred business partner due to the company’s 

high level of expertise and ability to deliver. We have also demonstrated 

an innovative ability in line with the development of new 

technology and in the face of changing market requirements. The 

Dry Cargo Handling Division is increasingly being asked to provide 

complete equipment and system deliveries to shipyards. In order 

to increase volume, our principal challenge over the next few 

years is to find business partners with the size and capacity to 

deliver equipment previously attended to by the shipyards themselves, 

says Bernsro 

Operations 

The Dry Cargo Handling Division focuses mainly on design and 

engineering, while all manufacturing of equipment is outsourced 

to subcontractors. Our products includes bow and stern equipment, 

internal doors and ramps, car decks, hatch covers, side 

loading systems and equipment for the offshore industry. 

In the past few years, the division has had an increasing share 

14 

of deliveries of equipment to car carriers, so-called Pure Car 

Truck Carrier (PCTC). These are purpose built vessels, designed 

for the transportation of large number of cars within, as well as 

between, continents. TTS is the leading company in this niche of 

the RoRo market. Corresponding equipment is supplied for other 

types of RoRo and RoPax ships. 

The Dry Cargo Handling Division also has substantial deliveries 

of hatch covers to container vessels, general cargo carriers and bulk 

carriers, as well as equipment for cruise ships. Another speciality 

is side-loading systems for various ship types, as well as solutions 

for baggage and waste management on cruise ships. Furthermore, 

TTS has established a solid position in the market for special 

equipment to offshore vessels. 

The joint venture company, TTS Hua Hai Ships Equipment Co. 

Ltd. in Shanghai in China, designs and manufactures hatch covers 

and some RoRo equipment for Chinese shipyards. 

Market outlook 

At the start of 2007, the Dry Cargo Handling Division had a total 

order backlog of NOK 1 316 million, including the order backlog 

of the joint venture company TTS Hua Hai Ships Equipment. This 

is an increase of NOK 71 million compared to the previous year. 

The division takes part in bids for all major contracts for RoRo 

equipment, hatch covers and other special equipment related to 

cargo handling in the world’s leading shipyards. In 2006, TTS once 

more entered into agreements regarding deliveries to shipyards 

in Japan, a market which traditionally has been difficult to enter. 

Other new and important markets are India and Vietnam. 

The market for RoRo equipment is, to a large extent driven 

by the increase in the manufacturing of private cars and other 

activities relying on RoRo vessels for transport. The demand for 

RoRo vessels, in particular car carriers, is continously high. The 

same applies to cruise ships and mega yachts. 

Overall, the demand for cargo access equipment, which constitutes 

part of the Dry Cargo Handling Division’s product portfolio, 

is expected to remain high in 2007. Prospects for the coming 

years are extremely promising. 

Strategy 

The Dry Cargo Handling Division will continue to focus on developing 

the markets in Europe, Asia and USA. The division will 

focus on developing new products and solutions to provide more 

efficient cargo handling. In this context, TTS will put emphasis on 

the development of equipment using technologies that maintain 

environmental considerations in a satisfactory manner.

- TTS is a preferred business partner 

due to the company’s high level 

of expertise and ability to deliver. 

STELLAN BERNSRO, DIRECTOR, DRY CARGO HANDLING DIVISION 

15


Marine Cranes Division 

In 2006, the Marine Cranes Division showed considerable progress with regard to both turnover and 

results. The growth in the market for marine cranes continues in 2007, and the division has made 

a very promising comeback into the offshore market. 

T 

TS DEVELOPS and delivers marine cranes, and is the world’s 

leading supplier of hose handling cranes. TTS is a major supplier 

of provision cranes, as well as cargo cranes, and resumed marketing 

of cranes to the offshore market in 2007. The Marine Cranes Division 

is managed from Bergen in Norway, with operations in Norway 

(Bergen and Kristiansand), Germany and China. Furthermore, the 

division has a sales and service office in Korea. In China, TTS is 

part of a joint venture, with an ownership interest of 50 percent. 

Ivar K. Hanson was appointed Divisional Director in 2004. He 

holds a Master of Science degree in business as well as a diploma 

in mechanical engineering, and has worked for TTS for a total of 

twelve years. 

During 2004 and 2005, the Marine Cranes Division carried out 

an extensive organisational restructuring of the two branch offices 

in Norway. During the same period, the crane division of LMG in 

Germany was incorporated into the division, and build-up of the 

operations in China was prepared. In 2006, we saw results from 

our efforts, by way of a strong growth in turnover and a distinct 

improvement in profitability, says Ivar K. Hanson. He further states 

that the division has carried out a recent restructuring of resources 

related to the split between the crane activities and service and 

after-sales activities, and that it has achieved excellent results in 

this area. Hanson points out that the division, despite its progress, 

has had problems completing certain projects, owing to delays 

in the delivery of steel from its business partners. – We also face 

a considerable challenge, in Norway as well as in Germany, in 

recruiting new employees with sufficient expertise. 

Operations 

The Marine Cranes Division’s product portfolio consists for the 

most part of deck cranes, ranging from small service cranes to 

large cargo cranes, as well as davits. As of 2007, TTS also delivers 

purpose-built cranes to offshore vessels. 

The division is organised with product development and sales 

of cylinder cranes taking place primarily out of Bergen, while product 

development and sales of wire cranes take place in Lübeck, 

Germany. After-sales, service and industrial products are handled 

by the office in Kristiansand. In 2007, TTS took over ICD Projects 

AS in Ålesund in Norway, a company that develops control systems 

and software for lifting equipment to offshore vessels subsea 

handling operations at great ocean depths. 

The 100 percent owned company in Shanghai carries out 

engineering, project management, assembly and follow-up of 

deliveries to ship-owners and shipyards in Asian markets outside 

of China. Here, we have achieved a successful build-up of 

16 

expertise in engineering, as well as within management and implementation 

of projects. A joint purchasing office for the entire TTS 

Group is under establishment in Shanghai. 

Targeting of the offshore market by the Norwegian branch offices 

entails that delivery of standard marine cranes, to an increasing 

degree, will be handled by the subsidiary company as well as the 

joint venture company in China. 

TTS’ production of steel and equipment for cranes is based on 

subcontractors in low-cost countries. Deliveries in Europe are 

assembled and tested in Bergen and Lübeck. Deliveries in China 

are assembled and tested by our joint venture company, TTS Bohai 

Machinery Co. Ltd., and deliveries to the Korean market are 

handled by our Korean partners. 


At the start of 2007, the Marine Cranes Division’s order backlog 

had reached NOK 600 million, including the order backlog of the 

joint venture company TTS Bohai Machinery. This is an increase of 

NOK 210 million, or 54 percent, compared to the previous year. 

The cranes market is driven by the activity level of new buildings 

and ship upgrading. In the Asian markets, the level of activity has 

been on the increase for several years, and is expected to remain high. 

The activity level in European shipyards is also rapidly increasing. 

The contracting of new tankers has shown a positive development. 

In the market for medium-sized and large hose handling cranes, in 

which TTS holds a dominant position, the order intake in 2006 was 

excellent. Efforts to strengthen the company’s position in market 

segments such as cargo cranes, container cranes and davits, have 

also yielded results. Furthermore, the Marine Cranes Division 

strives to develop products and solutions for the offshore market. 

The overall optimistic market trend has continued in 2007, 

and TTS has received very positive feedback on their products for 

the offshore market. 

Strategy 

TTS will further strengthen its efforts in the global markets for 

cranes for ships and offshore vessels. Operations in China will be 

further developed, among other factors to provide engineering 

capacity in Norway for activities in the offshore market. Special 

efforts will be made to maintain a solid position in the cranes 

market in Korea. Through the newly acquired company in Ålesund 

in Norway, the Marine Cranes Division will focus on development 

and delivery of other advanced lifting equipment for offshore 

vessels. Finally, the division will further extend its efforts in the 

after-sales market.

- TTS will further strengthen its efforts 

in the global markets for cranes for ships and 

offshore vessels and for handling equipment 

to offshore- and subsea markets. 

IVAR K. HANSON, DIRECTOR, MARINE CRANES DIVISION 

17


Port and Material Handling Division 

TTS’ Port and Handling Division supplies shipyard systems and systems for handling containers in ports. 

In 2006, the division experienced a breakthrough in the market for container terminal systems, and 

showed excellent progress in its other areas of operation. 

I 

N 2005, TTS CONSOLIDATED its activities relating to shipyard 

systems and systems for handling containers in ports to form 

the Port and Material Handling Division. This business segment 

is in vigorous growth, and is less sensitive to market fluctuations 

than other parts of TTS’ operations. The Port and Material 

Handling Division is managed from Gothenburg in Sweden, and 

has operations in Finland and Norway. 

Göran Johansson is Divisional Director. He was formerly 

Director of the Dry Cargo Handling Division as well as Managing 

Director of TTS Ships Equipment AB. Johansson is a naval architect 

and engineer, and was head of Hamworthy KSE AB, Dry Cargo 

Handling Division, from 1995 up until its incorporation into the 

TTS Group. 

– TTS has extensive experience as supplier of production lines 

to shipyards and various systems for material handling related to 

industrial production. Activities within this area saw a dramatic 

upswing in 2006. In the market for material handling in ports, we 

landed our first contract for our cassette system for containers 

last year, and the system is put into operation in an American port 

this year. With the growth expected in cargo volume in container 

terminals in Europe, USA and Asia, we are confident that more 

companies will choose our solutions and products. The advantage 

of these solutions and products, is that they provide increased 

utilisation of capacity in available areas in place of costly development 

of new port facilities, says Göran Johansson. 

Operations 

The product portfolio for cargo handling in ports include linkspan, 

which act as a bridge between port and ship, automatic mooring 

devices and systems for the handling of containers and loading 

cassettes with advanced hydraulics and electric control components. 

The cassettes have been developed to handle special transport 

requirements for industries such as the steel and paper industry. 

As regards systems for cassette handling in container terminals, 

TTS has recently taken on staff with top competence in this area, 

to attend to further product development. 

Furthermore, the division supplies heavy load handling systems 

and various solutions for material handling focusing on efficient 

handling and good logistics. Deliveries are primarily aimed at the 

18 

shipbuilding industry and heavy industry. Systems for material 

handing related to industrial production mainly pertain to steelworks 

and aluminium works, while systems for heavy loads are primarily 

aimed at the shipbuilding industry. 


At the end of 2006, the Port and Material Handling Division had 

an order backlog of NOK 148 million, compared to NOK 72 

million the year before. Moreover, the division has so far in 2007 

been awarded several major contracts. 

Accordingly, the market outlook for the division’s products is 

excellent. 

Competition in the market for linkspan solutions to RoRo 

ports is generally strong, but the market potential for TTS is 

nonetheless considered to be substantial. Prospects for deliveries 

of the division’s systems for fully automated container handling 

and mooring solutions are promising, with several projects in the 

pipeline. 

With regard to the systems for heavy lift and material handling, 

the market outlook for both 2007 and coming years is considered 

to be very good. 

Strategy 

In 2007, the Port and Material Handling Division will focus on 

further developing cooperation between the units in Norway, 

Sweden and Finland with regard to both product development as 

well as marketing efforts. 

The division will focus on the marketing of linkspan to RoRo 

ports, in particular in the Baltic countries. With regard to the 

system for cassette handling, TTS will, in addition to the continued 

development of the ports market, further attempt to build up new 

markets for this solution, primarily within the heavy industry. In 

the marketing of systems for material handling in shipyards, efforts 

will mainly be concentrated on China and India.

– We landed our first contract for our 

cassette system for containers last year. 

GÖRAN JOHANSSON, DIRECTOR, PORT AND MATERIAL HANDLING DIVISION 

19


Deck Machinery Division 

In the Deck Machinery Division, the first half of the calendar year as part of the TTS Group was spent 

undergoing internal restructuring, as well as successfully approaching new markets. 

D 

URING AUTUMN 2005,following the acquisition of 

Kocks GmbH, TTS established the Deck Machinery Division. 

On the basis of the expertise represented by Kocks, it is TTS’ 

strategy to integrate Deck Machinery in the group’s range of 

products, and to market these globally. Upon acquisition of Kocks 

GmbH, the company had an unprofitable order backlog, and 

results for 2006 were negative. The target for this year is for 

operations to yield positive results. 

The Deck Machinery Division is managed from Bremen in 

Germany, and also has activities in the Czech Republic. In South 

Korea, TTS has held a 50 percent ownership interest in a joint 

venture company producing and delivering to the Korean and 

Japanese market, as well as providing after sales and service to 

mentioned markets. In March 2007, TTS attained sole ownership 

of the Korean company. 

Edgar Bethmann as Divisional Director and Managing Director 

of TTS Kocks GmbH holds an engineering degree in machine 

construction, and was Managing Director of TTS Ships Equipment 

GmbH prior to being appointed head of the Deck Machinery 

Division. 

Activities 

The Deck Machinery Division delivers deck machinery to the 

maritime industry; primarily various types of winches for tank 

ships, container ships and other freighters. TTS holds a particularly 

good position in the market supplying winches to LNG-ships. 

The division has had a great number of deliveries to the Korean 

shipbuilding market, and in 2006 it succeeded in procuring contracts 

in China, Taiwan, Vietnam and the USA, as well as increasing 

the number of deliveries to shipyards in Japan. Furthermore, with 

the Chinese market in mind, the division has developed a new 

series of smaller electrical winches in addition to a special purpose 

winch for container ships. 

– With regard to the future, it was imperative that we, in 2006, 

entered into the first contracts with Chinese shipyards through 

our joint venture company TTS Bohai in Dalian. It is crucial that 

the Deck Machinery Division partake in the tremendous development 

in the shipbuilding industry in China, emphasises Edgar 

Bethmann. 

As a result of the breakthrough in the collaboration with TTS 

Bohai, the Deck Machinery Division has entered into an agreement 

with the company incorporating deck machinery into TTS Bohai’s 

20 

range of products. TTS Bohai will therefore establish a new facility 

in Dalian for assembly and testing of winches which is expected to 

be ready by the end of this year. 

In Bremen activities in the Deck Machinery Division were 

co-localised with TTS Ships Equipment GmbH in 2006. The aim is 

to strengthen cooperation of sales and service. Further both in 

Germany and the Czech Republic organisational changes were 

implemented in 2006 to achieve a more efficient operation. 


The Deck Machinery Division had an order backlog of NOK 462 

million at the start of 2007, compared to NOK 366 million twelve 

months previously. 

The market outlook for our product series of electric and hydraulic 

winches is generally good. Growth is expected in the LNG 

market in particular, owing to the increasing demand for transport 

of liquid gas on ships. 

Thanks to the TTS Group strong position in the main shipbuilding 

markets the Deck Machinery Division will be able to enter new 

markets and increase existing ones. Overall the order intake 

prospects for 2007 are promissing, in particular for the second 

half of the year. 

Strategy 

During 2007, the Deck Machinery Division will focus on measures 

to improve operations and profitability in South Korea as well as 

to intensify efforts in China. The advantages of large-scale operations 

owing to its association to TTS will be utilised in other 

markets too. The Deck Machinery Division will be increasing its 

manning as well as strengthening its expertise in the after-sales 

and service business.

– It is crucial that 

the Deck Machinery 

Division partake in 

the tremendous 

development in the 

shipbuilding industry 

in China. 

EDGAR BETHMANN, DIRECTOR, 

DECK MACHINERY DIVISION 

21


TTS expects growth in Vietnam 

In the space of only a few months, TTS has landed contracts in Vietnam for three of the group’s four 

divisions. - We believe the Vietnamese shipbuilding market will develop significantly over the coming years, 

which is why we have opened a sales and representative office in Haiphong, says Johannes D. Neteland, 

President and CEO. 

T 

HE SHIPBUILDING INDUSTRY in Vietnam is in rapid 

growth. The major cause behind the ship-owners enthusiasm 

for Vietnam is that shipyards in Korea, China and Japan have 

full order books for years ahead. Moreover, the cost level is 

consider ably lower than in other ship building nations in Asia. The 

Vietnamese government aims to make their country the fourth 

largest producer of ships by 2015, and will compete against the 

established maritime nations. Several shipyards are under construction 

in Vietnam. The government-owned company Vinashin 

owns most of these. This company has grown by 35-45 percent 

annually over the past decade. 

Office with five employees 

The sales and representative office in the port of Haiphong in the 

north of Vietnam opened 7 November 2006, with Tran Duc Hieu 

as General Manager. He trained as a naval officer. The office will 

be built up with a staff of five to seven employees. Administratively, 

the office falls under the Dry Cargo Handling Division, but the 

employees will be responsible for marketing all relevant products, 

as well as following up production at the shipyards. 

– We have signed contracts with Vinashin, worth a total of 

NOK 250 million. These include deliveries of hatch covers, cranes 

and deck machinery for in all 15 vessels to be delivered from the 

Vietnamese shipyards over the next few years, reports Neteland. 

The newest contract, entered into in February this year regards 

key components for RoRo systems for eight car carriers, including 

internal car decks and ramps, as well as stern ramps. 

Market of many opportunities 

Neteland says that the establishment in Vietnam emphasises the 

TTS Group’s global ambitions. – Activity in the international shipbuilding 

market will remain at a very high level for many more 

years and, for this reason, TTS must be present in all important 

markets with a view to securing our share of this growth. Furthermore, 

we also view Vietnam as an interesting market with regard 

to delivery of offshore cranes and other handling equipment to 

fixed and floating offshore installations. 

The economic development in Vietnam is strong. After the 

war in the country ended in 1975, Norway has contributed with 

development aid to sectors in which we are highly qualified. In 

2007, Norad and Innovation Norway initiated a three-year program 

to increase Norwegian investments in Vietnam and strengthen 

trade between the two countries. The program prioritises the 

maritime sector. 

22


Crane division prepared for new challenges 

Over the past three years, TTS has undergone a radical restructuring of its operations in the market for 

marine cranes, primarily through the transfer of operations from Norway to China. This adjustment 

has been essential to enable TTS to once again aggressively target the offshore cranes market. 

I 

N GENERAL, the build-up of operations with engineering and 

production in China has contributed to strengthening the foundation 

for our crane activity in Europe, in particular in Norway, says 

Ivar K. Hanson, Divisional Director of the Marine Cranes Division. 

He says that during the course of 2004 and 2005, manning of 

the division’s two branch offices in Norway was reduced by 10 

persons. – In order to be competitive in an international market, 

we have built up a substantial operation in China over the past few 

years. This has been a prerequisite for regaining profitability, he 

emphasises. However, as a result of increased demand for new 

cranes and services, manning in Norway was increased by 35 new 

employees during 2006. 

Freeing up capacity for offshore targeting 

– Targeting of the offshore market entails a further increase in 

manning, and in today’s labour market this is easier said than done. 

However, since we have established ourselves in China, we are able 

to free up capacity in Bergen and Kristiansand for offshore assignments 

by a further transfer of responsibilities to China. In 2004, 

TTS attained sole ownership of TTS Marine Shanghai Co. Ltd. Up 

until 2005, the company focused on sales, service and assembly of 

cranes for ships built in China. As a result of the establishment of 

the joint venture company TTS Bohai Machinery Co. Ltd. in Dalian, 

which TTS co-own with the government-owned shipbuilding group 

DSIC, TTS’ company in Shanghai has altered its focus to exporting 

from China to other shipbuilding markets in Asia. 

– This has entailed a major restructuring, including hiring of 

staff and training of engineers, purchaser and project managers, 

in order for the company to handle the entire value chain. This 

principle also applies to the joint venture company, Hanson points 

out. 

Strong growth in China 

In 2006, TTS Marine Shanghai Co. Ltd. increased its number of 

employees from 39 to 46. The order backlog at the end of the 

year was NOK 36 million, compared to NOK 30 million twelve 

months previously. For TTS Bohai Machinery Co. Ltd., last year 

saw an increase of staff from 29 to 40 employees, and the order 

backlog for the same period increased from NOK 20 million to 

NOK 100 million. 

In total, the Marine Cranes Division reported a turnover in 

2006 of NOK 440 million, an increase of 42 percent compared to 

the previous year. Operating profit before depreciation was NOK 

24 

13.5 million, compared to NOK 0.2 million in 2005. Turnover 

and profit for the joint venture company in China are not included 

in these figures. 

– Accordingly, we note that the total added value increased 

substantially, with the effect that we will have to strengthen the 

organisation and manning in both Europe and China. The reason 

for this build-up is not only the progress in the Asian market, but 

furthermore to enable us to target the growing offshore cranes 

market. We are preparing a further increase in manning in the 

Marine Crane Division in Norway during 2007, by about 10 to15 

new employees. 

On account of an agreement entered into in connection with 

the acquisition of Hamworthy KSE AB – Division Dry Cargo 

Handling in 2001, TTS has been unable to market offshore cranes 

prior to 11 January this year. Last year, TTS announced that it would 

yet again deliver offshore cranes, once the standstill period had 

come to an end. – There is a great demand for cranes for offshore 

vessels, and delivery date of some key components is currently 

as much as 24 months. We have, however, already secured the 

components needed to ensure that we are capable of delivery, says 

Hanson. 

Offshore cranes totalling NOK 500 million in 2012 

– Since 2002, we have focused exclusively on ships cranes. The 

technology for all types of cranes has developed, and we have 

maintained our expertise in the construction and production of 

offshore cranes. We are therefore very well equipped to meet the 

requirements for cranes demanded by offshore customers. Turnover 

in this area for 2007 will not be substantial, but as of next 

year the offshore cranes market will constitute a considerable part 

of our volume. Our aim is that in five years we will have a turnover 

in offshore cranes and other lifting equipment for offshore 

vessels of approximately NOK 500 million, states Ivar K. Hanson. 

During the period 11 January up until 1 March this year, TTS 

entered into contracts worth almost NOK 200 million, for the 

delivery of cranes for offshore vessels. 

Expanding offshore range 

As part of its targeting of the offshore market, TTS acquired all 

of the shares in ICD Projects AS in Ålesund in Norway in January 

this year. The Ålesund-based company develops and delivers software 

and control systems for offshore handling equipment. This 

is primarily part of an extended effort to provide solutions to

the unique handling requirements within the subsea market, in 

particular for subsea handling operations at great ocean depths. 

This acquisition secures core technology, making TTS a onestop 

supplier of lifting equipment for ships built and equipped to 

operate in the offshore industry and, in particular, the subsea 

industry, says Hanson. 

ICD Projects AS was established in 2004 and has six employees. 

The company achieved a turnover in 2006 of NOK 8.2 million, 

with a pre-tax profit of NOK 1.9 million. The company has focused 

on the development of software with active heave compensation, 

for the operation of lifting equipment at ocean depths exceeding 

3 000 meters. 

– This solution is in demand in the offshore market, and fits like a 

glove with our other deliveries, Hanson points out. The company is 

preparing to recruit 10 to 15 engineers in 2007, some of which 

will be based in Ålesund and some in Bergen. – Delivery of lifting 

equipment for offshore vessels will become a new and significant 

business area for TTS. 

– Upon acquisition of ICD Projects in Ålesund, we will be 

represented in three of the most important maritime clusters 

in Norway. We view this as our strength, and we will increase 

manning in all of these three cities in 2007, says Ivar K. Hanson, 

Divisional Director. 

25


Continued strong market for ships equipment until 2015? 

The market outlook for TTS’ products and services related to marine cargo handling is considered to be 

excellent for many more years. 

T 

HE INTERNATIONAL ECONOMIC upswing, which 

started in 2003, has continued and intensified over the past 

three years. The increase in world trade, and in particular the 

tremendous growth in Chinese economy, has contributed to 

an increase in freight rates. It is a novel aspect in international 

economy that, for several years now, developing countries have 

had a stronger growth in economy than the industrialised countries. 

Developments in the emerging markets entail a higher degree 

consumption of energy and other commodities. 

Globalisation continues, and an increasing portion of the manufacturing 

of products takes place in developing countries. The trend 

of moving high-cost production to a country with lower costs has 

increased. A consequence of this is the increase in average transport 

distances for many products. As the bulk of international 

transport of primary products and manufactured goods is made 

by ship, this development entails increased demand for shipping 

services. 

The overall effect of these trends is a rapid growth over the past 

few years in the demand for almost every category of ship transport. 

Rates have increased despite the relatively strong growth in 

tonnage offered. Both bulk and tank tonnage, which constitute 

two of the largest freight segments, has increased tremendously. 

Furthermore, in other parts of the shipping industry, such as container 

cargo from Asia to Europe, the growth in volume has been 

substantial. 

Development and supply of equipment for cargo handling on 

ships is TTS’ core business, and over a number of years we have 

built up a solid market position. Demand for shipping services and 

contracting of new vessels is therefore of great consequence to 

the commercial development of the TTS Group. 

Chart 1 shows contracting of new vessels to the world fleet, as 

well as a forecast for contracting of vessels in the coming years, 

divided into the various types of vessels. The prognosis has been 

prepared by the Institute of Shipping Analysis in Gothenburg, 

Sweden. 

The prognosis indicates that, though we have experienced an 

exceptionally strong market for four years running, there is still 

an expectation of a relatively high level of contracting activity over 

a historic perspective up until 2015. This applies in particular to 

the categories significant to TTS; RoRo vessels, container ships 

and cruise ships. In total, the forecast estimates a contracting of 

26 

almost 1 500 new ships in 2008 and each of the following seven 

years. 

Chart 2 compares contracting, deliveries of new vessels and 

also scrapping of old vessels. The chart shows that with the high 

level of contracting seen in shipyards over the past four years, 

activities and deliveries from the shipyards will reach record high 

levels over the next 2-3 years. However, even in the period 2011 

till 2015, activity is expected to stabilise around 1 500 vessels per 

year. 

Orders for side-loading systems, RoRo equipment and hatch 

covers are generally made early on in the building process of a new 

ship, while contracts for cranes and deck machinery are usually 

entered into at a later stage. For TTS this means that contracts 

relating to the ships equipment market are distributed over a period 

of time, which is beneficial to the company with respect to capacity. 

During the past few years, TTS has built up considerable capacity 

and expertise with respect to after-sales and service. The high 

level of activity in the market for newbuildings in the coming years 

entails a prosperous after-sales market.

Number of vessels 

Million DWT 

2 500 

2 000 

1 500 

1 000 

500 

0 

140 

120 

100 

80 

60 

40 

20 

0 

CHART 1 World fleet outlook | NUMBER OF VESSELS BY CATEGORY 

Contracting 300 gt+, Jan 2007 

1992 

1993 

1994 

1995 

1996 

1997 

1998 

1999 

2000 

2001 

CHART 2 World fleet outlook | INCLUDING SCRAPPING 

300 gt+, Jan 2007 

2002 

2003 

2004 

2005 

2006* 

2007* 

2008* 

2009* 

2010* 

2011* 

2012* 

2013* 

2014* 

2015* 

1992 

1993 

1994 

1995 

1996 

1997 

1998 

1999 

2000 

2001 

2002 

2003 

2004 

2005 

2006 

2007 

2008 

2009 

2010 

2011 

2012 

2013 

2014 

2015 

* = SAI Prognosis 

Historic data: LR Fairplay 

Passenger 

Dry Cargo 

RoRo 

Reefers 

Container 

Bulker incl comb 

Tanker 

Deliveries 

Del.forecast 

Scrapping 

Scrap.forecast 

Contracting 

Cont.forecast 

27


Shareholder information 

Share price performance 

In March 1995, TTS Marine ASA completed a public share issue, and 

3 May 1995, the company was listed on the SMB list of the Oslo Stock 

Exchange. 

Date Price 

Subscription price at time of offering NOK 23.00 

Opening price 03.05.95 NOK 26.50 

31.12.95 NOK 32.50 

31.12.96 NOK 41.00 

31.12.97 NOK 40.00 

31.12.98 NOK 15.00 

31.12.99 NOK 14.00 

31.12.00 NOK 23.51 

31.12.01 NOK 16.00 

31.12.02 NOK 7.51 

31.12.03 NOK 9.71 

31.12.04 NOK 18.90 

31.12.05 NOK 31.20 

31.12.06 

(The share price has been adjusted to reflect 

the 1:2 share split in April 1996.) 

NOK 72.75 

01.01.2006 23.04.2007 

Number of shareholders 699 774 

Foreign holdings 33.9 % 40.63 % 

01.01.06 – 23.04.07 Average per trading day 

Number of trades 6 953 21 

Value (NOK 1 000) 2 250 003 6 860 

Number of shares (1000) 44 322 135 

Average price 50.76 

Information 

TTS emphasizes the importance of giving the shareholders, the stock 

market and the general public the best possible knowledge of the 

Group’s operations and performance. Relevant information will be made 

available through stock market reports and press releases. Regular 

financial reports are issued in the form of annual reports and quarterly 

interim reports. The company is also in constant contact with financial 

analysts. 

The company’s financial calendar is as follows: 

4. quarter 2006 / preliminary annual result 2006 15. February 

1. quarter 2007 7. May 

2. quarter 2007 22. August 

3. quarter 2007 31. October 

Annual General Meeting 24. May 

Annual General Meeting will be held at the company’s premises in Bergen. 

28

7000 

Movements in share capital, RISK adjustment 

Date Type of Share capital Number Nominal 

value transaction after transaction shares in NOK 

03.05.95 Public offering 1 911 000 1 911 000 1.00 

19.04.96 Share split 1 911 000 3 822 000 0.50 

20.05.96 Private placing 2 101 000 4 202 000 0.50 







17.04 00 Private placing 3 220 649 6 441 298 0.50 



18.01.02 Private placing 3 851 323,5 7 702 647 0.50 







12.09.05 Private placing 10 001 802 20.003.604 0.50 





TTS share value 2006–2007 

24.04.06 

28.06.06 

29.08.06 09.11.06 

08.01.07 27.02.07 

90 

85 

80 

75 

70 

65 

55 

50 

45 

23.04.07 

RISK adjustments as of 

1 January - per share: 

1996 NOK –2.28 

1997 NOK 0.12 

1998 NOK 0.94 

1999 NOK 1.30 

2000 NOK 0.00 

2001 NOK 0.00 

2002 NOK 0.02 

2003 NOK -0.07 

2004 NOK 0.00 

2005 NOK 0.00 

2006 NOK 0.00 

29


Corporate Governance 

Introduction 

TTS Marine ASA applies the Norwegian code of practice for corporate 

governance, dated December 2005. Principally, TTS Marine ASA acts 

in accordance with this code of practise, with a few exceptions that 

will be reviewed in the following: 

- Since TTS Marine ASA has fewer than 200 employees in Norway, 

the company does not have a corporate assembly. 

- In accordance with the Norwegian Public Limited Companies Act, 

the Chairman of the Board is elected by the Board unless already 

elected by the Annual General Meeting. 

The TTS Group’s principles for corporate governance have been adopted 

by the Board of TTS Marine ASA. 

TTS Marine ASA’s Articles of Association are available on the company’s 

website. The same applies to ethical guidelines. 

Shareholder policy 

TTS aims to give the shareholders a competitive long-term return that 

reflects the risk inherent to the company’s operations. Based on TTS’ 

growth strategy, the shareholders’ return should be realised through 

an increase in the value of their shares, together with dividends 

when circumstances so permit. Growth through acquisitions will be 

implemented through balanced financing of equity and debt. 

The Board of TTS Marine AS will propose a dividend of NOK 1 per 

share to the Annual General Meeting in May 2007. 

Strategy for further growth 

TTS has, since 1997, completed eleven successful acquisitions, establishing 

a leading position in handling equipment to the maritime 

industry. This has entailed a considerable growth, and turnover has 

increased from approximately NOK 260 million in 1997 to NOK 1.6 

billion in 2006. Owing to a brisk market and solid order backlog, TTS 

expects an increase in turnover for 2007 of 20-25 percent. Operational 

margins will be further strengthened in 2007. 

TTS will continue to expand its activities in ships equipment and port 

terminal systems, as well as handling equipment within the offshore 

industry, in the coming years. 

Share capital and shareholders 

The company’s share capital as of 31 December 2006 was NOK 11 246 452 

divided into 22 492 904 shares at a nominal value of NOK 0.50 per 

share. The company has only one class of freely transferable shares, 

which are listed on the Oslo Stock Exchange’s match list under the 

ticker symbol TTS. 

The company had 795 shareholders as of 31 December 2006, compared 

to 699 at the beginning of the year. Of the shareholders at the 

end of the year, 114 were foreign shareholders holding 40.5 percent of 

the total share capital. 

30 

THE COMPANY’S 20 MAJOR SHAREHOLDERS 

AS OF 30 DECEMBER 2006 WERE AS FOLLOWS: 

Shareholder Number Ownership Voting 

shares interest share 

Skeie Group 8 280 000 36.81 % 36.81 % 

Morgan Stanley and Co.Intl. Ltd 2 575 407 11.45 % 11.45 % 

JCE Group AB 2 050 000 9.11 % 9.11 % 

IF Skadeforsikring AB 1 316 400 5.85 % 5.85 % 

Rasmussengruppen AS 1 254 000 5.58 % 5.58 % 

Bank of New York, Brüssels branch 843 483 3.75 % 3.75 % 

Nordea Bank PLC Finland 752 600 3.35 % 3.35 % 

Odin Europa SMB 396 400 1.76 % 1.76 % 

Verdipapirfond Odin Maritim 370 000 1.64 % 1.64 % 

Stiching Shell Pensionfonds 288 256 1.28 % 1.28 % 

Stiftelsen Statoils Pensjonskasse 254 600 1.13 % 1.13 % 

DnB Nor SMB 222 600 0.99 % 0.99 % 

Lectio AS 189 200 0.84 % 0.84 % 

JP Morgan Chase Bank 180 000 0.80 % 0.80 % 

Vital Forsikring ASA 167 343 0.74 % 0.74 % 

DFA-Intl. SML CAP VAL PORT 161 700 0.72 % 0.72 % 

Arne Kjetil Kyrkjebø 154 400 0.69 % 0.69 % 

Statoil Forsikring AS 148 050 0.66 % 0.66 % 

Goldman Sachs International 130 900 0.58 % 0.58 % 

Alden AS 125 800 0.56 % 0.56 % 

20 major shareholders 19 861 139 88.30 % 88.30 % 

Other shareholders 2 631 765 11.70 % 11.70 % 

Total 22 492 904 100.00 % 100.00 % 

New Board of Directors 

In accordance with the Annual General Meeting on 30 May 2006, the 

shareholders elected the following members to the Board: 

Name Position 

Nils O. Aardal (59) Executive Director, J.O. Oddfjell AS 

John M. Lunde (63) Managing Director, Risavika Havn AS 

Anne Breive (41) Executive Director, Statnett SF 

Hilde P. Aarseth Krøgenes (45) Marketing Manager, 

Kongsberg Norcontrol IT AS 

In accordance with ordinary appointment of two employee representatives 

to the Board of TTS Marine ASA, the following were elected to the Board 

in August of 2006: 

Name Company Position 

Olav Smeland (32) TTS Marine ASA Director 

Oddmund Hatletun (60) TTS Marine ASA Director 

Mona L. Tellnes Halvorsen (37) TTS Marine ASA 1st Deputy 

Director 

Magne Kvamme (46) TTS Ships 2nd Deputy 

Equipment AS Director 

Nils O. Aardal was elected Chairman of the Board.

Nominating committee 

In accordance with the Annual General Meeting on 30 May 2006, a 

nomination committee was appointed with the following members: 

Name Position 

Harald Espedal Managing Director, Skagenfondene 

Bjørn Sjaastad Managing Director, Frontline Management 

Bjørn Olafsson Self-employed 

Bjørn Olafsson was elected to chair the committee 

SHARES OWNED BY MEMBERS OF THE BOARD AND NOMINATING 

COMMITTEE 

As of 31 December 2006, Director of the Board, Oddmund Hatletun, 

owned 1 493 shares, while Director of the Board Olav Smeland owned 

800 shares. The other Directors of the Board do not hold any shares 

or options in the company. The same applies to the members of the 

nominating committee. 

Authorisations to the Board 

On 30 May 2006, the Annual General Meeting adopted a resolution to 

authorise the Board to issue a maximum of 4 000 000 shares in the 

event of an acquisition or merger. This authorisation is valid until the 

Annual General Meeting for 2006, and no later than 30 June 2007. As 

of 29 March 2007, 2 039 300 share have been issued. 

On 30 May 2006, the Annual General Meeting adopted a resolution 

to give the Board authority to purchase 300 000 of the company’s own 

shares. This authorisation is valid until the Annual General Meeting for 

2006, and no later than 30 June 2007. 

As of 29 March 2007, the company held 6 700 of its own shares, 

with a maximum shareholding in this period of 70 000 shares. 

Share options 

At the end of 2006, a total of 452 500 authorised options had been 

issued to the executive management of the TTS Group. 112 500 options 

may be exercised up until 9 June 2007 at a price of NOK 26.50 and 

340 000 options may be exercised up until 30 May 2008, at a price of 

NOK 35 per share. 

AS PER 31 DECEMBER 2006, THE DISTRIBUTION OF OPTIONS 

AND SHARES WAS AS FOLLOWS: 

Name Position Number of Number of 

options owned shares 

Johannes D. Neteland (49) President & CEO 137 500 82 500 

Olav Bruåsdal (51) Financial Director 55 000 25 000 

Hans-Jan Erstad (63) Chief of Staff 55 000 25 000 

Göran K. Johansson (63) Divisional Director 55 000 25 000 

Ivar K. Hanson (42) Divisional Director 55 000 25 000 

Stellan Bernsro (46) Divisional Director 40 000 0 

Edgar Bethmann (50) Divisional Director 40 000 0 

Bjørn O. Hansen (61) Project Director 15 000 15 800 

Total 452 500 198 300 

Hans Jan Erstad sold his 25 000 shares on 16 February 2007. 

Guidelines for remuneration of executive management are presented in 

Note 4. 

The work of the Board 

The structure of the Board meets the requirements for independence 

from the company’s management, and the complementary expertise 

within the Board helps to ensure that the Directors of the Board are 

able to assess matters from different perspectives before reaching a 

final decision. 

The auditor has at least two annual meetings with the audit committee, 

where part of the meeting is held without the management 

present. One of these meetings is related to the annual accounts. The 

auditor is present at board meetings when so required. 

The Board of TTS Marine ASA has an audit committee: 

AUDIT COMMITTEE 

Nils Olav Aardal (Chairman) 

Anne Breive 

The board had seven scheduled meetings annually, in addition to extra 

meetings as required. A total of 18 board meetings were held in 2006. 

As a result of the tremendous expansion which the company is 

undergoing, the work of the board has been intensified, with increased 

focus on strategic work and acquisitions. In the coming years, TTS will 

continue to expand the group’s activities in ships equipment and port 

terminal equipment, as well as in offshore handling equipment. 

Insider trading in securities 

The Board has established a policy for trading in securities issues by the 

company. This policy complies with Oslo Stock Exchange’s guidelines 

for securities trading, and applies to the Board, President & CEO, as 

well as other employees who gain access to non-public information 

through their position in the company. 

31


Board of Directors TTS Marine ASA 

Nils O. Aardal 

CHAIRMAN OF THE BOARD 

Aardal (59) with a background 

in economics studies, Aardal 

has over 30 years’ experience 

of the shipping and offshore 

industry through managerial 

and board positions with Jo 

Tankers and Odfjell Drilling. 

He has also held many posts 

as a director within banking, 

marine insurance and interest 

organisations. Today, Nils O. 

Aardal is a working director of 

the ship-owning companies 

that are used by Jo Tankers, 

and he also holds board 

positions within the marine 

industry. As of March 2007, 

Nils O. Aardal has no shares 

or options in the company. 

Aardal has been a member 

of the TTS Marine ASA board 

since 1999. He is a Norwegian 

citizen. 

32 

John M. Lunde 

DIRECTOR OF THE BOARD 

Lunde (63) has his background 

in Norwegian Defence and an 

engineering college education. 

John Lunde has approximately 

20 years’ experience of various 

managerial positions within the 

Scana group. Today Lunde is 

Managing Director of Risavika 

Havn AS. He is also Project 

Manager for Innovation 

Rogaland and holds various 

board positions, including positions 

within Scana Industrier, 

Stavanger Chamber of 

Commerce and Industry and 

Maritime Forum Rogaland. 

John Lunde has been on the 

board since 2005. As of March 

2007, he has no shares or 

options in the company. John 

Lunde is a Norwegian citizen. 

Hilde P. Aarseth Krøgenes 


Krøgenes (45) has a Bachelor 

of Commerce degree from the 

Norwegian School of Management, 

and works as Marketing 

Manager for Kongsberg 

Norcontrol IT AS, where she 

has also held the position of 

Product Manager. Krøgenes 

has previously worked for the 

Norwegian Trade Council, 

including as regional manager 

for Southern Europe and on 

overseas postings in Toronto 

and New York. Krøgenes has 

also worked as Business 

Development Manager for 

IBA Corp., San Jose and as 

a consultant for the Norwegian 

Trade Council in San Francisco. 

As of March 2007, Krøgenes 

has no shares or options in 

the company. Hilde P. Aarseth 

Krøgenes has been a member 

of the board of TTS Marine ASA 

since 2005. Krøgenes is a 

Norwegian citizen.

Anne Breive 


Breive (41) is CEO and CFO of 

Statnett. She has a Bachelor 

of Commerce degree from the 

Norwegian School of Management 

(BI) and an MBA degree 

from Glasgow University. 

During the period 1994-2005, 

she held various managerial 

positions in the Norske Skog 

group, including that of Vice 

President Corporate Funding 

and Vice President Corporate 

Controlling. Breive has been on 

the board since 2005. As of 

March 2007, she has no shares 

or options in the company. 

Breive is a Norwegian citizen. 

Oddmund Hatletun 


Hatletun (60) graduated in 

mechanical engineering from 

Bergen Technical School in 

1968. He has worked as a 

designer/project manager for 

Norsk Mac Gregor, Hagglunds 

MTT and TTS Marine. In these 

companies, he has worked on 

ships’ hatches, ramps, doors, 

lifts and cranes and therefore 

has an extensive knowledge of 

much of TTS’ product spectrum. 

He also has experience of the 

offshore industry as a project 

engineer with CCB-Base and 

as an inspector stationed on 

diving vessels and platforms. 

As of March 2007, Hatletun 

owns 1 493 shares in TTS. 

He has been the employees’ 

representative on the TTS 

board during the periods 

1998-2002 and 2004 to the 

present day. Oddmund Hatletun 

is a Norwegian citizen. 

Olav Smeland 


Smeland (32) holds a degree as 

Technical Economic Engineer 

(Machinery) at Agder College, 

Grimstad division, from 1996. 

He has previously been employed 

by Hydralift, and has worked 

for TTS since 1998. He has 

worked primarily as purchaser 

for parts and accessories 

r elated to crane production. 

Presently, he is Project Manager 

in the Marine Crane Division’ 

branch office in Kristiansand. 

As of March 2007, Smeland 

owns 800 shares in TTS. 

He has acted as employee 

r epresentative on the Board of 

TTS Marine ASA since 2006. 

Smeland is a Norwegian citizen. 

33


Senior management 



Neteland (49) is President & 

CEO of TTS Marine ASA. He 

has an advanced business 

administration degree from 

the Norwegian School 

of Economics and Business 

Administration. Neteland 

worked for Statoil from 1981- 

1988, was the deputy managing 

director of Block Watne 

Boliger from 1988-1989 and 

the marketing director of the 

Ekornes Group from 1989- 

1991. He was the division 

director of Vital Forsikring from 

1991-1998 until he assumed 

his current position. 

34 

Olav Bruåsdal 

FINANCIAL DIRECTOR 

Bruåsdal (51) is Financial 

Director of TTS Marine ASA. 

He has an advanced engineering 

degree from the Norwegian 

Institute of Technology at the 

University of Trondheim and 

a higher degree in business 

administration from the 

Norwegian School of Economics 

and Business Administration. 

Bruåsdal worked with engineering, 

project and department 

management for 12 years before 

he started at TTS in 1994. He 

started out as a project manager 

and was subsequently appointed 

as the director of projects and 

administration. He assumed his 

current position in 1997. 

Hans-Jan Erstad 

HR MANAGER 

Erstad (63) is HR Manager with 

corporate responsi bility for IT, 

personnel and quality assurance 

at TTS. He is an auto mation 

engineer and has also studied 

economics, management and 

contract management. Erstad 

has among others worked at 

Nera and Petrovest. He started 

working at TTS in 1995 and has 

been respon sible for IT, logistics 

and industrial development. 

He assumed his current position 

in 2002.

Stellan Bernsro 

DIRECTOR 

Bernsro (46) is Director of Dry 

Cargo Handling Division and 

Managing Director of TTS Ships 

Equipment AB. Bernsro holds a 

Master of Science in Industrial 

Engineering and Management, 

an Engineering degree in 

Mechanics while being graduated 

Captain in the Royal Swedish 

Navy. Bernsro has experience 

from management positions in 

marine diesel engine service, 

industrial gas applications and 

production automation, prior 

to joining TTS in 1996. He was 

initially assigned as contract 

manager and was in 2005 

appointed managing director, 

while during the spring 2006 

assuming current position. 

Ivar K. Hanson 

DIRECTOR 

Hanson (42) is Division Director 

for Marine Cranes. He has an 

advanced degree in business 

admi ni stration from the 

Norwegian School of Economics 

and Business Admini stration 

(NHH) and is a mechanical 

engineer. Hanson has worked as 

a contract coordi nator and bid 

manager. He started at TTS as 

a shipyard consultant in 1994 

and was appointed managing 

director of TTS Automation AS 

in 1999 and TTS Handling 

Systems AS in 2000. From 

1 January 2003 to 30 May 

2004, Hanson was director in 

Prosafe Drilling Services AS 

for Technology and Projects 

in the engineering division. 

Göran K. Johansson 

DIRECTOR 

Johansson (63) is Director of 

the Port and Material Handling 

Division. Johansson is a naval 

architect and engineer. He 

has 20 years of experience 

from various enterprises that 

are cur rently part of the 

MacGregor Group. Johansson 

was the managing direc tor 

of Ham worthy KSE AB from 

1995 until the company was 

inte grated into the TTS Group 

on 1 January 2002. 

Edgar Bethmann 

DIRECTOR 

Bethmann (50) is the Division 

Director for Deck Machinery 

and Managing Director of 

TTS Kocks GmbH. He has a 

Bachelor of Commerce degree 

from the German Institute of 

Technology at the University 

of Clausthal-Zellerfeld, 

Germany. Bethmann has 

16 years’ experience from 

the shipbuilding industry in 

Germany, partly as a technical 

director. Since 2000, he has 

been Managing Director of 

TTS Ships Equipment GmbH 

in Bremen. Bethmann took 

up his current position with 

TTS in the autumn of 2005. 

35


Directors’ report for 2006 

Introduction 

In 2006, the turnover in the TTS Group (TTS) totalled NOK 1 604 

million, earnings before depreciation (EBITDA) was NOK 98.6 

million and pre-tax profit was NOK 60.5 million. The order backlog 

at the end of the year was NOK 2 019 million. These results 

represent record achievements for TTS at all levels. 

The Board of TTS proposes dividend payment of NOK 1 per 

share. 

The positive development has consolidated TTS’ position as a 

leading international corporation within maritime equipment, 

where the group is one of two leading suppliers within its market 

segments. 

Operations 

TTS’ activities have been organised into the four divisions; Dry 

Cargo Handling, Marine Cranes, Deck Machinery and Port and 

Material Handling. Accordingly, TTS has three divisions aimed 

at the market for ships equipment and one aimed at the market 

for shipbuilding systems and systems for container handling in 

ports. 

The company’s target for 2006 has been to improve its competitive 

position and results, while maintaining a profitable growth. 

Turnover in 2006 increased by 40 percent, of which organic 

growth constituted 22 percent. In the new business segment 

Deck Machinery results were negative, but even allowing for this 

negative effect, net result increased by 50 percent in 2006. 

In 2006, TTS further developed its strong position in China, 

in addition to starting up new business operations in Italy and 

Vietnam. The Italian company was established in Genoa in May, 

while the sales and representative office in Haiphong in Vietnam 

was opened in November of 2006. Both business operations have 

so far shown excellent results. 

The Dry Cargo Handling Division is supplying RoRo equipment, 

hatch covers, side-loading systems, as well as cruise and yacht 

equipment. The background for establishing a new company in 

Italy is increased focus on the cruise ships and mega yacht product 

segments, which are major product areas within Italian shipbuilding. 

The Marine Cranes Division is supplying cargo and hose handling 

cranes in addition to davits (rescue boat cranes). Its main focus in 

2006 has been the transfer of the range of standard cranes from 

Norway to our operations in Shanghai, China. This has improved 

the division’s profitability, while creating available capacity to target 

the offshore market in Norway. 

As a result of agreements entered into five years ago in connec- 

36 

tion with the acquisition, TTS has not actively participated in the 

market for larger offshore cranes. This agreement expired in 

January 2007, and TTS is currently intensively targeting this 

market. 

In February 2007, TTS acquired all the shares of the Ålesundbased 

Company ICD Projects AS, a company that develops and 

delivers software and control systems for offshore handling equipment. 

As a result, TTS is now a one-stop supplier of advanced 

offshore handling equipment, which for TTS represents a new 

business area, in addition to making a comeback as one-stop 

supplier of offshore cranes. 

The Port and Material Handling Division is supplying shipyard 

equipment and port equipment. In 2006, the division experienced 

a breakthrough in the market for port terminal equipment, through 

a major contract to a newly established terminal in Virginia in USA. 

In March 2007, TTS acquired technology for port terminal equipment 

that will further strengthen TTS’ position as leading supplier 

within this segment. 

The Deck Machinery Division is supplying anchor handling and 

mooring winches. At the time of TTS’ takeover of Kocks GmbH 

at the end of 2005, most of the company’s activities were aimed 

at the Korean market. But subsequent to its incorporation in the 

TTS Group, the division has successfully been awarded contracts 

in China, as well as in Vietnam. In 2007, TTS bought up its partner’s 

50 percent share in the manufacturing company in Korea, and 

accordingly the division will have greater opportunity of further 

developing operations in this highly significant Asian market. 

At the end of the year, TTS had a workforce of 521 employees, 

of which 177 were based in Norway. In addition to this, TTS has two 

joint venture companies in China with a total of 112 employees. The 

joint venture company in Korea, which as of mid-March is owned 

100 percent by TTS, had 41 employees. 

The TTS Group had 19 units as of March 2007 (including joint 

ventures) in 10 countries (Norway, Sweden, Germany, Finland, 

China, USA, Korea, Czech Republic, Italy and Vietnam). The 

parent company, TTS Marine ASA, has its head office in Bergen in 

Norway, and is listed on the Oslo Stock Exchange. 

As a group, TTS exploits the operational and marketing synergies 

that come from being a major market participant within relevant 

niches. At the same time, there is strong focus on what TTS has 

found to be a strategic advantage; namely the cultivation of a smallcompany 

culture within the TTS companies. Proximity to operations 

and results in each of the 19 units motivates management 

and employees to greater effort, and this in turn strengthens the

perception of the individual customer that their needs and requirements 

are being met to in a satisfactory manner. 

In TTS, product development primarily takes place through 

projects. Prior to signing of contracts, each project sees considerable 

development work in cooperation with the customers. 

However, for some of the new product areas, such as within port 

terminal equipment, some of the product development will not 

be tied to one single project. 

Comments on the annual accounts for 2006 

RESULTS 

Earnings per share in 2006 were NOK 2.92 (NOK 2.19 as of 

31 December 2005) based on a turnover of NOK 1 604 million 

(NOK 1 149.8 million), earnings before depreciation (EBITDA) 

of NOK 98.6 million (NOK 67.2 million) and an operating profit 

of NOK 89.7 million (NOK 59.6 million). Pre-tax profit was 

NOK 84.5 million (NOK 56.3 million), while net profit was 

NOK 60.5 million (NOK 40.2 million). 

Turnover increased by 40 percent and EBITDA increased by 46.7 

percent compared to the previous year, and represents the highest 

turnover and results ever recorded by TTS. The results are moreover 

in line with the “guiding” of the market presented by TTS in 

February 2006. 

The Dry Cargo Handling Division saw yet another year of 

excellent results, in particular for the companies in Sweden and 

Germany. The EBITDA margin in 2006 reached a record high 

11 percent, compared to 9.4 percent in 2005. 

The Marine Cranes Division’s restructuring process, with the 

transfer of expertise from Norway to China, is yielding results, 

with an EBITDA margin in 2006 of 3.1 percent compared to zero 

percent in 2005 and -4.7 percent in 2004. This positive development 

is satisfactory, but there is still room for improvement. 

The Port and Material Handling Division’s EBITDA margin in 

2006 was 7.1 percent compared to 5.0 percent in 2005. Operations 

within some of the product segments for terminal systems were 

good. The division has potential for improvement of margins 

within shipyard systems, in addition to the fact that a breakthrough 

in the delivery of terminal systems will improve the division’s 

results. 

The Deck Machinery Division experienced a tough first operational 

year in TTS with an EBITDA margin of –1.8 percent. However, 

this was as expected, given the takeover of an order backlog 

with low margins, at the same time as a considerable restructuring 

was initiated. 

BALANCE SHEET 

Total assets as of 31 December 2006 were NOK 1 663.1 million 

(NOK 1 182.8 million) with a total equity of NOK 598.1 million 

(NOK 394.9 million), equivalent to an equity ratio of NOK 36.6 

percent (33.4 percent). 

Of the balance sheet total of NOK 1 633.1 million, fixed asset 

investments constituted NOK 62.4 million; NOK 42.2 million of 

which are assets in the three joint venture companies (including 

NOK 5.5 million in loans) and NOK 19.2 million of which are 

shares and loans related to the FastShip project. 

TTS has been involved in the FastShip project since 1996. Subject 

to implementation of the project, TTS will, through patented 

technology, receive contracts with FastShip Inc. for a value of more 

than NOK 1 billion. TTS also has ownership interest in FastShip 

Inc., which are recorded on the balance sheet at a value of NOK 

19.2 million. 

The project activities have resumed in 2006/2007, and in all 

probability TTS will be awarded a smaller contract in the project 

as early as spring 2007. As a consequence of the simplification and 

redesign of the FastShip project in 2006, the Board considers the 

likelihood of realisation of the project to have increased over the 

past twelve months. 

However, the project has been in existence for more than 10 

years, so unless its progress changes notably in the course of 

2007, the Board will consider writing off the asset item at the end 

of this year. 

Net interest bearing holdings as of 31 December 2006 was 

NOK 22.8 million compared to an net interest bearing debt of 

NOK 96.1 million a year ago. Cash reserves as of 31 December 

2006 were NOK 236.9 million (NOK 97.8 million). 

According to the cash flow statement, NOK 0.9 million was 

generated by operating activities in 2006, NOK 10.9 million was 

used for investment activities and NOK 149.1 million was generated 

by financing activities. The main cause of the difference between 

the operating profit and cash flow from operating activities was 

the higher level of project activity, and consequently increased 

employment of capital. 

The TTS Group has income and expenses in foreign currencies, 

where the financial risk has been reduced through the use of hedging 

instruments described in greater detail in Accounting Principles. 

The annual accounts have been prepared in accordance with the 

International Financial Reporting Standard (IFRS). 

The accounts provide a true picture of the company’s financial 

position as of 31 December 2006. The Board and Management 

37

are not aware of any events that have occurred subsequent to the 

balance sheet date of 31 December 2006 that may be of material 

significance to TTS and the annual accounts for 2006. 

At the end of 2006, TTS Marine ASA had a share capital of 

NOK 11 246 452 divided into 22 492 904 shares of NOK 0.50 

each. 

ORDER BACKLOG 

The order backlog as of 31 December 2006 was NOK 2 019 million, 

the highest level recorded in the history of the company, compared 

to NOK 1 653 million at the same time in 2005. 

Business areas 

DRY CARGO HANDLING 

NOK MILLION 2006 2005 

Turnover 728.2 649.2 

EBITDA 80.3 61.3 


The division’s good earnings bear evidence of the excellent results 

from the RoRo operations in Sweden and the hatch cover operations 

in Germany. In 2006, contracts worth NOK 195 million 

were signed for the delivery of 14 car carriers. Furthermore, the 

product segments for cruise and side-loading systems in Norway 

have shown positive development in 2006. 

The division typically signs substantial individual orders that may 

occur at somewhat irregular intervals. The marginal reduction in 

the order backlog is not representative of the market outlook, and 

the division therefore has a solid starting point for 2007. 

The joint venture TTS Hua Hai Ships Equipment Co. Ltd. in 

Shanghai was established in 1998, and focuses on hatch covers for 

the Chinese market. The level of activity has continued to increase, 

and in 2006 turnover reached NOK 256 million, with an order 

backlog of NOK 507 million at the end of the year (this figure is 

not included in TTS Groups order backlog of NOK 2 019 million). 

TTS’s share of the profit from the joint venture amounted to 

NOK 9.7 million, which has been recognised as financial income 

in the consolidated accounts. 

MARINE CRANES 


Turnover 439.6 309.0 

EBITDA 13.5 0.2 


38 

The company in Norway, which is supplying cylinder cranes, has 

over the past three years carried out a necessary restructuring of 

the operations. The restructuring has involved transfer to TTS’ 

company in China, of full responsibility for crane deliveries to 

Asian markets outside of China. The restructuring has now entered 

a more regular operating phase, with significant improvement in 

results for 2006, in both Norway and China. 

TTS’s investment in wire cranes, through the acquisition in 

Germany in 2004, has yielded excellent results in 2006. We have 

built up the organisation and brought in a new business with good 

earnings. The development in 2006 was as expected. 

The joint venture company TTS Bohai Machinery Co. Ltd. in 

Dalian saw its first year of operation in 2006, following its establishment 

in the summer of 2005. The company, which focuses 

on deliveries to the Chinese market, had a turnover of NOK 27 

million in 2006, with an order backlog of NOK 100 million at 

the end of the year (this figure is included in TTS Group’s order 

backlog). TTS’ share of the results of the joint venture company 

amounted to NOK –0.5 million, which has been recognised as 

financial costs in the consolidated accounts. The results of the 

company, currently in a start-up phase, are considerable better 

than expected. 

The division has a record high order backlog and an excellent 

market outlook, which provides a good starting point for 2007. 

In addition, there is the effect of TTS re-entering the offshore 

market. 

PORT AND MATERIAL HANDLING 


Turnover 178.8 140.7 

EBITDA 12.6 7.0 


TTS experienced a breakthrough in the market for cargo handling 

equipment to large container terminals in the fourth quarter, with 

a contract worth NOK 20 million, as well as an option of a further 

NOK 23 million. This is a sizable market, substantially larger than 

the market for RoRo terminals in which TTS is already established 

with excellent earnings. 

In 2006, TTS did not succeed in signing contracts for the delivery 

of linkspans, which is a purpose-built ramp between port and 

RoRo vessels. Linkspans is one of several products in the range for 

cargo handling in ports. However, in February this year, TTS 

signed a link-span contract worth approximately NOK 10 million.


For shipyard and heavy lift equipment, the year commenced with 

poor results as a consequence of working on low-margin projects. 

The development during the course of the year has been positive, 

including new projects with higher margins. A solid order backlog 

and a sustained brisk market form a promising starting point for 

2007. 

DECK MACHINERY 


Turnover 257.4 50.4 

EBITDA -4.6 2.5 


Effective as of 1 October 2005, TTS took over Kocks GmbH. 

Results for the fourth quarter of 2005 includes a sales profit 

(NOK 1.3 million), as well as what turns out to be incorrect 

accured income. Accordingly, the quarterly result was not representative 

of the underlying operations. 

The results for 2006 bear evidence of TTS taking over an order 

backlog with low margins. Most of the old order backlog will 

be out of our books by summer, and we therefore expect an 

improvement of operations during the second half of 2007. 

The division had a good order intake in 2006, and accordingly 

an improvement in the order backlog. The market outlook remains 

positive, with opportunities for growth, particularly in China. 

Organisation 

ORGANISATION AND ENVIRONMENT 

The number of employees in the TTS Group increased by 62 to 

521 during 2006. 

Absence due to sickness was 3.3 percent in 2006, compared to 

2.8 percent in 2005. 10 minor personal injuries were reported 

during the year, compared to two in the previous year. Measures 

were taken to improve this negative trend. The working environment 

and employee relations are considered to be good and continuous 

improvements are being implemented. 

As a global group with companies in ten countries, there is a 

continuous focus on joining the companies, corporate cultures 

and environments together. In this context, “The Spirit of TTS” 

has played a key role throughout 2005 and 2006. Through a process 

involving all companies and divisions, we have examined and 

established our core values, integrity, openness, loyalty and initiative. 

Our core values shall influence TTS’s activities, so that they 

contribute to cooperation and progress for each and every one in 

the TTS Group. 

40 

A key area for continuous improvement is work within Health 

Environment and Safty (HES). In 2006, TTS established a HES 

handbook to act as a guideline for all employees of the TTS Group. 

Quality at all levels is fundamental to our ability to deliver products 

and services of a quality that builds confidence in TTS. A quality 

control process is one of the measures used, and our aim is for all 

TTS companies to be ISO certified in the course of 2007. TTS 

Marine Shanghai Co. Ltd. in China, TTS Liftec Oy in Finland and 

TTS Port Equipment AB in Sweden were certified in 2006. 

The TTS Group’s activities are primarily related to engineering, 

assembly and testing of equipment. Steel production is carried out 

by a network of international subcontractors. The company does 

not pollute the external environment. In addition, assembly and 

testing of TTS products is based on a very limited use of chemicals 

harmful to human health or to the environment. 

The products supplied by TTS are primarily electro-hydraulically 

powered, and there is little risk of environmental pollution. 

The TTS Group’s operations are not regulated by licenses or regulatory 

orders. 

EQUAL OPPORTUNITIES 

TTS aims to ensure equal working conditions, equal opportunities 

and equal treatment regardless of gender, religion or ethnic background. 

The aim is equal treatment of all with regard to recruitment, 

remuneration and promotion. 

TTS has 521 employees, with a main emphasis on engineering 

expertise. Women are typically underrepresented in this business; 

of the total workforce, 106 (20.3 percent) are women. Of these 

women, 60 hold positions within administration, finance or sales 

and marketing, giving 43/57 distribution of women and men within 

these functions. 

There are a total of two women out of the four shareholderelected 

board members on the Board of TTS Marine ASA, in 

addition to two employee representatives who are both men. 

NEW MANAGERS IN 2006 

Stellan Bernsro (46) was appointed Divisional Director for Dry 

Cargo Handling Division in 2006. Bernsro took over as Managing 

Director of TTS Ships Equipment AB in Gothenburg Sweden on 

1 September 2005. He has been employed in the company since 

1996. 

Tatu Miikkulainen (43) was appointed new Managing Director 

of TTS Liftec Oy in Tampere in Finland. Miikkulainen has been 

employed in the company since April of 2005.

Torsten Paas (44) was appointed new Managing Director of TTS 

Inc. in Miami in USA. Paas comes from TTS-LMG Marine Cranes 

GmbH, where he was responsible for after-sales. 

Tran Duc Hieu (31) was appointed head of the sales and representative 

office in Haiphong in Vietnam. The office opened in 

November of 2006. 

Corporate governance 

INTRODUCTION 

A more detailed account of the applicable principles for corporate 

governance is provided later in this report. 

NEW BOARD OF DIRECTORS 

In accordance with the Annual General Meeting on 30 May 2006, 

the shareholders elected the following members to the Board: 

NAME POSITION 

Nils O. Aardal (59) Executive Director, J.O. Oddfjell AS 

John M. Lunde (63) Managing Director, Risavika Havn AS 

Anne Breive (41) Executive Director, Statnett SF 

Hilde P. Aarseth Marketing Manager, 

Krøgenes (45) Kongsberg Norcontrol IT AS 

In accordance with ordinary appointment of two employee representatives 

to the Board of TTS Marine ASA, the following were 

elected to the Board in August of 2006: 

NAME COMPANY POSITION 

Olav Smeland (32) TTS Marine ASA Director 

Oddmund Hatletun (60) TTS Marine ASA Director 

Mona L. Tellnes TTS Marine ASA 1st Deputy 

Halvorsen (37) Director 

Magne Kvamme (46) TTS Ships 2nd Deputy 

Equipment AS Director 

Nils O. Aardal was elected Chairman of the Board. 

NOMINATING COMMITTEE 

In accordance with the Annual General Meeting on 30 May 2006, 

a nominating committee was appointed with the following 

members: 

NAME POSITION 

Harald Espedal Managing Director, Skagenfondene 

Bjørn Sjaastad Managing Director, Frontline Management 

Bjørn Olafsson Self-employed 

Bjørn Olafsson was elected to chair the committee. 

INCREASE OF SHARE CAPITAL 

The company’s share capital at the start of the year was NOK 

10 058 052 divided into 20 116 104 shares at NOK 0.50 each. 

In accordance with the Annual General Meeting’s resolution of 

27 May 2004, the Board has issued 300 000 share purchase options. 

The last 150 000 options were exercised on 16 May 2006, at 

a price of NOK 14 per share. Correspondingly, in accordance 

with the Annual General Meeting’s resolution of 30 June 2005, 

the Board had issued 300 000 share purchase options, of which 

187 500 were exercised on 24 August 2006 at a price of NOK 

26.50 per share. 

In accordance with authority granted by the Annual General 

Meeting on 30 May 2006, the Board resolved on 7 December 

2006 to increase the share capital of TTS Marine ASA by NOK 

1 019 650 (9.97 percent), by issuing 2 039 300 shares at a nominal 

value of NOK 0.50 per share at a subscription price of NOK 

64.50. The purpose of this issue for cash is to further develop the 

company through new acquisitions. 

The company’s share capital subsequent to the issue and as of 

31 December 2006, was NOK 11 246 452 divided into 22 492 904 

shares at NOK 0.50 each. 

In the fourth quarter of 2006, TTS purchased 20 000 of its own 

shares at an average price of NOK 63,585. In addition to these shares, 

the company had a previous shareholding of 58 000 shares. TTS’ aim 

was to sell these own shares to employees at a discounted rate. The 

employees have been given an offer to purchase a maximum of 800 

shares at a rate of NOK 46, which represents a discount of 20 percent 

compared with the average rate in week 48. 104 employees have 

purchased a total of 71 300 shares. TTS’ holding of own shares subsequent 

to the sale and as per 31 December 2006 was 6 700 shares. 

Future prospects 

The international shipbuilding industry has experienced four good 

years. This has entailed excellent market conditions for ships 

equipment, which is TTS’ core business. Accordingly, TTS noted 

a record high order backlog at the end of 2006; 22 percent higher 

than the previous year. Moreover, the high volume of new orders 

has continued into the first quarter of 2007. 

The market for ships equipment and offshore equipment is 

expected to remain brisk over the next 2–3 years, with somewhat 

stronger competition in the ships equipment market than in the 

offshore market. Correspondingly, good market conditions are 

also expected for the products in the Port and Material Handling 

Division. 

41


The brisk market combined with a solid order backlog will yield a 

growth in turnover of 20-25 percent in 2007. Operating margins 

will also improve in the course of the year. 

Allocation of annual profits for TTS Marine ASA 

The TTS Group’s net profit was NOK 60.5 million, and equity 

totalled NOK 598.1 million as of 31 December 2006. 

TTS Marine ASA’s equity as per 31 December 2006 is NOK 

543.3 million, with NOK 34.0 million in unrestricted equity after 

dividend. The company’s net profit was NOK 50 085 509. 

42 

Bergen, 29 March 2007 

The Board of TTS Marine ASA 

The Board proposes the following allocation of TTS Marine ASA’s 

profit for 2006: 

ALLOCATION OF PROFIT: 

Dividend NOK 22 492 904 

Allocated to other reserves NOK 27 592 605 

Total allocations NOK 50 085 509 

The Board of TTS Marine ASA proposes that a dividend of NOK 1 

per share is paid for the accounting year 2006. 

Nils Olav Aardal Anne Breive 

CHAIRMAN DIRECTOR 

Hilde P. Aarseth Krøgenes John M. Lunde 

DIRECTOR DIRECTOR 

Olav Smeland Oddmund Hatletun 

DIRECTOR DIRECTOR 


PRESIDENT & CEO

Profit and loss account 


1 JANUARY - 31 DECEMBER 

(AMOUNTS IN NOK 1000) IFRS IFRS IFRS 

2006 2005 2004 

OPERATING INCOME NOTES 

Income from projects 1 1 593 716 1 148 459 785 239 

Other operating income 10 314 1 372 935 

Total operating income 1 604 030 1 149 831 786 174 

OPERATING EXPENSES 

Cost of sales 1 111 369 771 519 502 353 

Personnel costs 4, 5 254 598 208 858 164 803 

Depreciation of tangible fixed assets 6, 7 8 916 7 564 6 066 

Other operating costs 18 138 872 101 304 74 989 

Losses on accounts receivable 577 952 1 907 

Total operating expenses 1 514 333 1 090 196 750 118 

Operating profit/loss 89 697 59 635 36 056 

FINANCIAL INCOME AND EXPENSES 

Income from investments in joint ventures 10 8 448 6 767 2 234 

Other interest income 22 3 405 2 314 2 269 

Other financial income 22 3 914 1 646 119 

Other interest expenses 22 15 391 9 633 7 436 

Other financial expenses 22 5 582 4 431 1 992 

Net financial items (5 206) (3 338) (4 805) 

Profit/loss before tax 84 492 56 297 31 251 

Tax 14 24 010 16 059 9 621 

Net profit for the year 60 481 40 239 21 630 

Earnings per share (NOK) 23 2.92 2.19 1.44 

Diluted earnings per share (NOK) 23 2.91 2.18 1.42 

43


Balance 


ASSETS 

(AMOUNTS IN NOK 1000) IFRS IFRS 

31.12.06 31.12.05 

Fixed assets NOTES 

Deferred tax assets 14 35 538 30 546 

INTANGIBLE FIXED ASSETS 

Research and development 7 20 084 10 045 

Licences, patents, etc. 7 1 119 959 

Goodwill 7 307 780 301 956 

Total intangible fixed assets 328 983 312 961 

TANGIBLE FIXED ASSETS 

Land etc. 8 739 693 

Buildings 8 11 778 11 583 

Machinery and vehicles 8 6 819 7 347 

Furniture and office equipment 8 14 705 14 161 

Total tangible fixed assets 34 042 33 785 

FIXED ASSET INVESTMENTS 

Investments in joint ventures 10 36 701 30 999 

Loans to associated companies 26 5 456 1 639 

Investments in shares and units 8 13 550 13 550 

Other receivables 26 6 726 6 149 

Total fixed asset investments 62 433 52 337 

Total fixed assets 460 996 429 629 

Current assets 

Inventories 3 77 306 68 706 

Work in progress 3 11 844 3 745 

ACCOUNTS RECEIVABLE 

Receivables from customers 11 241 835 168 004 

Other receivables 47 128 46 185 

Accrued, non-invoiced production 2 455 225 288 480 

Financial derivatives 20 17 305 9 300 

Prepayments to suppliers 2 84 559 70 925 

Total receivables 846 051 582 894 

Bank deposits, cash in hand, etc. 15 236 934 97 811 

Total current assets 1 172 135 753 157 

Total assets 1 633 130 1 182 786 

44

EQUITY AND LIABILITIES 

(AMOUNTS IN NOK 1000) IFRS IFRS 

31.12.06 31.12.05 

EQUITY NOTES 

Share capital 16 11 246 10 058 

Company’s own shares 16 (3) (4) 

Share premium reserve 16 318 550 284 761 

Other equity 16 268 268 100 117 

Total equity 598 062 394 932 

LIABILITIES 

PROVISIONS FOR LIABILITIES AND CHARGES 

Pension obligations 5 2 171 3 437 

Deferred tax 14 19 609 15 276 

Total provisions for liabilities and charges 21 780 18 713 

OTHER LONG-TERM LIABILITIES 

Debt to financial institutions 12, 13 174 855 58 566 

Total other long-term liabilities 174 855 58 566 

CURRENT LIABILITIES 

Debt to credit institutions 13, 15 36 650 138 435 

Payables to suppliers 160 486 150 497 

Tax payable 14 8 215 10 297 

Unpaid government taxes 13 257 13 226 

Prepayments from customers 2 220 307 90 509 

Non-invoiced production costs, suppliers 2 203 120 140 562 

Financial derivatives 20 14 530 9 688 

Other current liabilities 17, 21 181 869 157 360 

Total current liabilities 838 434 710 574 

Total liabilities 1 035 069 787 854 

Total equity and liabilities 1 633 130 1 182 786 



Nils Olav Aardal Anne Breive Hilde P. Aarseth Krøgenes John M. Lunde 

CHAIRMAN DIRECTOR DIRECTOR DIRECTOR 

Olav Smedal Oddmund Hatletun Johannes D. Neteland 

DIRECTOR DIRECTOR PRESIDENT & CEO 

45


Consolidated equity statement 


(IFRS) 

Share 

Share Own premium- Other 

(AMOUNTS IN NOK 1000) NOTES capital shares reserve equity Total 

Equity as of 1 January 2005 8 157 -14 193 010 59 755 260 908 

Company’s own shares 0 10 0 586 596 

New issue 16 1 901 0 94 384 0 96 285 

New issue expenses 16 0 0 -2 633 0 -2 633 

Currency differences 25 0 0 0 -463 -463 

Net profit for the year 0 0 0 40 239 40 239 

Equity as of 31 December 2005 10 058 -4 284 761 100 117 394 932 

Depreciation of share premium account 0 0 -100 000 100 000 0 

Company’s own share 0 1 0 627 628 

New issue 16 1 188 0 137 415 0 138 604 

New issue expenses 16 0 0 -4 604 0 -4 604 

Opsions cost 25 0 0 0 7 043 7 043 

Currency differences 16 0 0 978 0 978 

Net profit for the year 0 0 0 60 481 60 481 

Equity as of 31 December 2006 11 246 -3 318 550 268 268 598 062 

46

Cash flow statement 



(AMOUNTS IN NOK 1000) 

2006 2005 2004 

Cash flow from operations 

Net profit for the year 84 492 56 297 31 251 

Tax paid during the period -26 751 -13 670 -8 991 

Depreciation 8 916 7 564 6 066 

Gains/losses on the sale of tangible fixed assets -351 -1 471 0 

Net change in project accruals 11 331 -135 344 -43 164 

Interest cost 15 391 9 633 7 436 

Profit attributable to associated companies -8 448 -6 767 -2 234 

Foreign currency gains/losses on loans -7 531 5 264 7 860 

Difference between pension charges and payments to/from pension schemes -1 266 -2 263 -1 102 

Inventories, customer receivables and payables to suppliers -79 895 83 339 27 468 

Other receivables and other short-term liabilities 5 043 -72 337 -17 480 

Net cash flow from operations 931 -69 755 7 110 

Cash flow from investments 

Acquisition of subsidiaries (less cash balances in subsidiaries) -3 109 -44 632 -22 715 

Receipts from sale of fixed assets 461 2 656 401 

Disbursements for acquisition of tangible fixed assets -7 715 -16 124 -37 719 

Acquisition of intangible fixed assets 0 -748 0 

Payments on other claims (loans) -577 -191 -81 

Dividends received 0 0 0 

Net cash flow from investments -10 940 -59 039 -60 114 

Cash flow from financing 

Receipts from new short-term/long-term debt 146 033 51 522 31 543 

Disbursements for repayment of short-term/long-term debt -14 383 -12 708 0 

Net change in bank overdraft -117 146 39 962 -10 264 

Paid-in equity 134 628 94 855 22 095 

Net cash flow from financing 149 132 173 631 43 374 

Net change in cash and cash equivalents 139 123 44 837 -9 630 

Cash and cash equivalents at the start of the period 97 811 52 974 62 604 

Cash and cash equivalents at the end of the period 236 934 97 811 52 974 

This consists of: 

Bank deposits etc. 236 934 97 811 52 974 

47


Consolidated Accounts 


NOTES TO THE ACCOUNTS 

1. General information 

TTS Marine ASA (the company) and its subsidiaries (the entire group) 

are an international group that develops and delivers marine equipment. 

The operations are organised into the following divisions: Dry Cargo 

Handling, Marine Cranes, Port and Material Handling and Deck 

Machinery. TTS is the world’s second largest supplier in its market 

segments. TTS Marine ASA is registered and domiciled in Norway, 

and the head office is located in Bergen. The group has companies in 

Norway, Sweden, Germany, Finland, China, USA, the Czech Republic 

and Italy, as well as offices in Korea. The company is listed on the 

Oslo Stock Exchange. This consolidated accounts were approved by 

the Board on 29 March 2007. 

Structural changes 

TTS Marine ASA acquired 100 per cent of the shares in TTS Marine S.r.l 

in Genoa, Italy. The comparative figures have not been changed as 

a result of the acquistion. The company was acquired at a price of 

NOK 4 million, with a turnover in 2006 of NOK 5 million. 

2. Accounting principles 

The most important accounting principles applied in the preparation 

of the consolidated accounts are described below. These principles have 

been applied identically to all the periods that are presented unless 

otherwise stated in the description. 

2.1 Basic principles 

The consolidated accounts have been prepared in accordance with the 

International Financial Reporting Standard (IFRS) as stipulated by the 

EU. Voluntary standards and interpretations as of 31 December 2006 

have not been implemented. 

The figures for 2004 have been restated to comply with IFRS. This 

entails that the formal opening balance sheet in accordance with IFRS 

is as of 1 January 2004. 

The consolidated accounts have been prepared based on the historical 

cost principle, except: financial derivatives and financial assets and 

liabilities that are measured at fair value over the profit and loss 

account. 

The preparation of accounts in accordance with IFRS requires the use 

of estimates. In addition, the application of the company’s accounting 

principles requires that the management exercise judgement. Areas 

that contain a high degree of such discretionary assessments, or a high 

degree of complexity, or areas where the assumptions and estimates 

are of significance to the consolidated accounts are described in 

Article 4. 

Additionally other new standards and interpretations of 2006 has been 

evaluated but are not relevant for the group. This is changes in IAS 19, 

IAS 21, IAS 39, IFRS 6 and IFRIC 5, 6, 7, 8, 9, 10, 11 and 12. 

48 

2.2 Consolidation principles 

(A) SUBSIDIARIES 

Subsidiaries are all the units where the group has a controlling influence 

over the unit’s financial and operational strategy, normally through ownership 

of more than half of the voting capital. Subsidiaries are consolidated 

from the point in time when control is transferred to the group and eliminated 

from consolidation when such control ends. 

The purchase method of accounting is used for the acquisition of subsidiaries. 

The historical acquisition cost is measured as the fair value of the 

compensation. Identifiable assets acquired and liabilities assumed are 

recorded at fair value at the time of the acquisition in the accounts. The 

portion of the historical cost that exceeds the fair value of identifiable net 

assets in the subsidiary is recognised on the balance sheet as goodwill. 

All intragroup transactions, outstanding accounts and unrealised gains 

between group companies are eliminated. The accounting principles in 

subsidiaries are changed as required to achieve compliance with the 

group’s accounting principles. 

(B) JOINT VENTURES 

Joint ventures are units where the group has a controlling influence 

together with other parties, but not alone. Investments in joint ventures 

are recorded in the accounts in accordance with the equity method. 

Investments in joint ventures companies are recorded in the accounts at 

the historical cost at the time of acquisition and include goodwill (which 

is reduced by any subsequent write-downs) (see Article 2.6). 

The group’s share of the profit or loss in joint ventures is recognised 

in the profit and loss account and added to the book value of the 

investments together with the share of equity changes not recognised 

in the profit and loss account. The group does not recognise its share 

of the losses in the profit and loss account if this entails that the book 

value of the investment becomes negative (including unsecured claims 

against the unit), unless the group has assumed liabilities or granted 

guarantees for the associated company’s liabilities. 

The group’s share of unrealised gains on transactions between the 

group and its associated companies are eliminated. The same applies to 

unrealised losses unless the transaction indicates a write-down of the 

asset transferred. The accounting principles in subsidiaries have been 

changed as required to achieve compliance with the group’s accounting 

principles. 

2.3 Segment information 

A business segment is a portion of the business operations that delivers 

products or services that are subject to a risk and return that are distinct 

from that of other business areas. The group’s primary reporting 

format is business segment. A geographic market (segment) is a portion 

of the business operations that delivers products or services within a 

limited geographic area that are subject to a risk and return that are

distinct from that of other geographic markets. The secondary reporting 

segment is geographical segment. 

2.4 Foreign currency translation 

(A) FUNCTIONAL AND PRESENTATION CURRENCIES 

The accounts of the individual units in the group are measured in the 

currency that is used primarily in the economic area where the unit operates 

(functional currency). The consolidated accounts are presented in 

Norwegian kroner (NOK), which is both the functional and presentation 

currency for the parent company. 

(B) TRANSACTIONS AND BALANCE SHEET ITEMS 

Transactions involving foreign currencies are translated into the functional 

currency using the exchange rates that are in effect at the time of 

the transactions. Foreign currency gains and losses that arise from the 

payment of such transactions and the translation of monetary items 

(assets and liabilities) in foreign currencies at the rates in effect on the 

date of the balance sheet are recognised in the profit and loss account. 

(C) GROUP COMPANIES 

The profit and loss account and balance sheet for group units with 

a functional currency different than the presentation currency are 

translated as follows: 

i. balance sheet is translated at the closing rate on the date of 

the balance sheet 

ii. profit and loss account is translated at the average rate during 

the year 

iii. translation differences are entered directly against equity and 

specified separately 

Goodwill associated with the acquisition of a foreign unit are allocated 

to the acquired unit and translated at the rate in effect on the date of 

the balance sheet. This is for acquisitions from 2004 and later. 

2.5 Tangible fixed assets 

Tangible fixed assets are recorded in the accounts at historical cost less 

depreciation. The historical cost includes the costs directly related to 

the acquisition of the fixed asset. 

Subsequent expenses are added to the value of the fixed asset on the 

balance sheet or recorded separately on the balance sheet, when it is 

probable that the future economic benefits associated with the expense 

will accrue to the group and the expense can be measured reliably. 

Other repair and maintenance costs are recorded in the profit and loss 

account in the period when the expenses are incurred. 

Land is not depreciated. Other fixed assets are depreciated based on 

the straight-line method, so that the historical cost of the fixed asset is 

depreciated to the residual value over the expected time of use. 

Buildings 50 years 

Machinery and vehicles 3-5 years 

Fixtures/office equipment 5 years 

Computer equipment 3 years 

Depreciation is recognised on a separate line in the profit and loss 

account. 

When the book value of the fixed asset is higher than the estimated 

recoverable amount, the value is written down to the recoverable 

amount. 

Gains and losses on disposals are recognised in the profit and loss account 

and represent the difference between the sales price and book value. 

The need for deprecication is taken into continious evaluation. 

2.6 Intangible fixed assets 

(A) GOODWILL 

Goodwill is the difference between the historical cost of the acquisition 

of a business and the fair value of the group’s share of the net identifiable 

assets in the business at the time of the acquisition. Goodwill 

from the acquisition of subsidiaries is classified as an intangible fixed 

asset. Goodwill associated with the acquisition of an interest in joint 

ventures is included in the investments in joint ventures. Goodwill is 

tested annually for impairment in value and recorded on the balance 

sheet at historical cost less write-downs. The write-down of goodwill is 

not reversed. 

In assessing whether there is a need to write down goodwill, it is allocated 

to the relevant cash-generating units. This allocation is made to 

the cash-generating units or groups of cash-generating units that are 

expected to benefit from the acquisition. 

(B) PATENTS, TECHNOLOGY AND DEVELOPMENT 

Patents/technology have a limited useful life and are recorded at historical 

cost on the balance sheet less depreciation. Patents/technology are 

depreciated by the straight-line method over their expected useful life 

(0 to 5 years). 

Development costs associated with market surveys, market development 

and the development of new products are normally charged against 

operating income as they are incurred. Order-related development 

is charged directly to the projects. Projects that satisfy the requirements 

are recorded on the balance sheet, cf. Note 8. In such cases the development 

costs are depreciated over their expected useful life (0 to 5 years). 

Depreciation is recognised on a separate line in the profit and loss 

account. 

2.7 Financial assets 

The group classifies financial assets into the following categories: 

(a) loans and receivables 

(b) investments in shares (assets available for sale) 

This classification is dependent on the purpose of the asset. The 

management classifies financial assets when they are acquired and 

reassesses the classification on each reporting date. 

(A) LOANS AND OTHER RECEIVABLES 

Loans and receivables are classified as current assets unless they 

mature later than 12 months after the date of the balance sheet. 

In this case they are classified as fixed assets. Loans and other are 

assessed to nominal value reduced by a provision for bad debt. 

(B) INVESTMENTS IN SHARES (ASSETS AVAILABLE FOR SALE) 

Investments in shares are included in the fixed assets unless the 

management intends to sell the investment within 12 months from the 

date of the balance sheet. 

Investments are assessed at fair value on balance day. Possible changes 

in fair value are entered directly against equity. 

By possible sale are or written downs the entire value adjustment 

entered against equity is recognised in the profit and loss account as 

a gain or loss from investments in securities. 

49


2.8 Leases 

Leases of property, plant and equipment where the Group has substantially 

all the risks and rewards of ownership, are classified as finance 

leases. Finance leases are capitalized at the inception of the lease at 

the lower of the fair value of the leased property or the present value 

of the minimum lease payments. Lease payments are apportioned 

between the finance charges and reduction of the lease liability. 

Property, plant and equipment acquired under finance leases are 

depreciated over the shorter of the useful life of the asset or the lease 

term. 

Leases where a significant portion of the risks and rewards of ownership 

are retained by the lessor are classified as operating leases. 

Payment made under operating leases is charged to the income 

statement on a straight-line basis over the period of the lease. 

2.9 Derivatives and hedging 

According to approved instructions, derivatives are effected for income 

from delivery contracts when signing the contract. This is also current 

for some larger subcontracts. Derivatives are recorded on the balance 

sheet at fair value at the point in time when the derivative contract is 

entered into and then at fair value on an ongoing basis. 

The group only enters into derivates that qualifies for fair value hedging. 

At the start of the hedging transaction the group documents the 

relationship between the hedging instruments and hedging objects. 

The purpose of the risk management and strategy behind the various 

hedging transactions is assessed on an ongoing basis and laid down in 

the group’s strategy. The group also documents whether the derivatives 

that are used are effective in offsetting changes in the fair value or 

cash flows associated with the hedging objects. 

The fair value of derivatives used for hedging is specified in Note 22. 

Changes in the fair value of the derivatives are entered over the profit 

and loss account together with the change in the fair value related 

to associate with the respective hedged asset or liability. 

The results are booked as operating income when securing income of 

contracts, and as operating cost when securing cost of contracts. 

2.10 Inventories 

Inventories are valued at the lower of historical cost or net realisable 

value. The historical cost is calculated by means of the first-in, first-out 

principle (FIFO). For finished goods and work in progress, the historical 

cost consists of the product design expenses, consumption of materials, 

direct wage costs, other direct costs, and indirect production costs 

(based on a normal capacity level). Loan costs are not included. 

2.11 Receivables from customers 

Receivables from customers are recognised initially at fair value on the 

balance sheet, that is nominal value. For subsequent measurement 

receivables from customers are assessed at nominal value less provisions 

for losses that have incurred. Provisions for losses are recognised when 

there are objective indicators that the group will not receive settlement 

in accordance with the original terms. Changes in the provisions are 

recognised in the profit and loss account as losses on accounts receivable. 

Receivables in foreign currency are converted to NOK at the exchange 

rate on the balance sheet date. 

50 

2.12 Bank deposit and cash 

Bank deposits in foreign currency are converted to NOK at the exchange 

rate on the balance sheet date. 

2.13 Share capital and premium 

Ordinary shares are classified as equity. 

Expenses that are directly attributable to the issuance of new shares or 

options are entered against the equity as a reduction in the proceeds. 

When the company’s own shares are purchased, the consideration, is 

entered as a reduction of the equity (attributable to the company’s shareholders). 

If the company’s own shares are subsequently sold or reissued, 

the proceeds are entered as an increase in the equity attributable to the 

company’s shareholders. 

2.14 Loans 

Loans are recorded at their fair value when they are disbursed, less any 

transaction costs. In subsequent periods, loans are recorded at their 

amortised cost, as calculated by means of the effective interest rate. 

The difference between the loan amount disbursed (less transaction 

costs) and the redemption value are recognised in the profit and loss 

account over the term of the loan. 

Loans are classified as current liabilities unless there is an unconditional 

right to postpone payment of the debt by more than 12 months from 

the date of the balance sheet. The next years payment is classified as 

short term debt. 

2.15 Taxes 

Tax in the profit and loss account encompasses both the tax payable 

for the period and the change in deferred tax. 

Deferred tax is calculated for all the temporary differences between the 

financial and tax values of assets and liabilities and tax losses carry 

forward. Temporary differences are only offset for the Norwegian companies 

in the group. Deferred tax is determined by means of the tax 

rates and tax laws that have been adopted or essentially adopted on 

the date of the balance sheet, which are assumed to apply when the 

deferred tax asset is realised or when the deferred tax is settled. 

Deferred tax assets are recognised on the balance sheet provided future 

taxable income is probable and the temporary differences can be offset 

against this income. 

Deferred taxes are not calculated based on temporary differences from 

investments in subsidiaries and associated companies when the group 

controls the timing for the reversal of the temporary differences and it 

is probable that they will not be reversed in the foreseeable future. 

2.16 Pension obligations, bonus schemes and other 

compensation schemes for employees 

(C) PENSION OBLIGATIONS 

The companies in the group have different pension schemes. The pension 

schemes are financed in general by payments to insurance companies 

or pension funds, as determined by periodic actuarial calculations. 

The group has both defined contribution and defined benefit plans. 

A defined contribution plan is a pension scheme in which the group 

pays fixed contributions to a separate legal entity. The group does not 

have any legal or other obligation to pay additional contributions if this 

unit does not have sufficient funds to pay all employees benefits

elating to their service in current and prior periods. A defined benefit 

plan is a pension scheme that is not a defined contribution plan. 

For defined contribution plans, the group pays contributions to publicly 

or privately administered pension insurance plans on a mandatory, 

contractual or voluntary basis. The group does not have any further 

payment obligations after the contributions have been paid. The contributions 

are recorded as a payroll expense in the accounts as they 

fall due. Contributions paid in advance are recognised as an asset 

in the accounts if the contribution can be refunded or reduce future 

payments. 

A defined benefit plan is typically a pension scheme that defines the 

pension payments employees will receive when they retire. Pension 

payments are normally dependent on one or more factors such as age, 

years of service for the company and salary level. 

The liability recorded on the balance sheet relating to defined benefit 

plans is the net present value of the defined benefits on the date of 

the balance sheet less the fair value of the pension assets, adjusted for 

unrecognised estimate deviations and costs relating to pension benefits 

earned from prior periods. The pension obligation is calculated annually 

by an independent actuary on the basis of a linear model. The net 

present value of the defined benefits is determined by discounting the 

estimated future payments at the interest rate for a bond issued by 

a company with high creditworthiness in the same currency as the 

benefits will be paid with a term that is approximately the same as 

the term of the associated pension obligation. 

Estimate deviations due to new information or changes in the actuarial 

assumptions in excess of 10 per cent of the value of the pension 

assets or 10 per cent of the pension obligations will be recorded in 

the profit and loss account over a period that corresponds to the 

employees’ expected average remaining service lifetime. 

Changes in the pension plan’s benefits are entered as an expense or 

income on a current basis in the profit and loss account, unless the 

rights in accordance with the new pension plan are contingent on the 

employee remaining in service for a specified period of time (accrual 

period). In this case the cost related to the change in benefits is amortised 

linearly over the accrual period. 

The employer’s share of National Insurance contributions are charged 

against income based on the pension premiums paid, as well as the 

accrued change in the net pension obligation. 

(D) EMPLOYEE OPTIONS 

In accordance with authorities granted by the Annual General Meeting, 

the management of the company has been granted options to purchase 

shares in the parent company. The fair value of allotted options is 

calculated as part of the salary cost with a corresponding increase 

in equity. The fair value is measured on the date of allotment and 

distributed over the intervals till the employee has worked up an 

unconditional right to exercise the options. The option premium is 

estimated on the date of allotment using the Black & Sholes option 

pricing model. Ref. note 16 

(E) GROUP BONUSES 

The group records a liability and a cost for any group bonuses. Whether 

the bonus shall be calculated and paid and the size of the bonus is 

dependent on the profit for the year. The bonus is paid to all of the 

employees in the following year. 

2.17 Provisions 

The group recognises provisions for restructuring, legal requirements, 

etc., when there is a legal or self-imposed obligation to do so as a 

result of earlier events, there is a preponderance of evidence that the 

obligation will be settled by a transfer of economic resources, and the 

size of the obligation can be estimated with an adequate degree of 

reliability. 

The group recognises provisions for expected guarantee liabilities based 

on experience. Additionally the group recognises provisions for remaining 

work or claims from the customer regarding long-term construction 

contracts. 

2.18 Recognition of income 

Income from the sale of goods and services is assessed at the net fair 

value after the deduction of value added tax and possible rebates. 

The group’s income is related to long-term construction contracts, 

service contracts and after-sales. 

Income connected to long-term construction contacts is posted according 

to the degree of completion of each project; see further information 

under Article 2.19. The group’s products are often sold with a warranty 

period +/- 2 years. See also note 14. 

Income connected to service contracts and after-sales is recognised in 

the period it is accrued, i.e. when the risk and control has passed to the 

buyer. Intragroup income is eliminated. 

Interest income is recognised in the profit and loss account over time 

in accordance with the effective interest method. 

If receivables are written down, the book value of the receivables are 

reduced to the recoverable amount. 

2.19 Construction contracts 

Revenue from long-term manufacturing projects is allocated in step with 

the degree of progress of the project, if the outcome of the transaction 

can be estimated in a reiable manner. Progress is measured as accrued 

hours in comparison to total estimated hours, when relable estimates 

are available. When the outcome of the transaction cannot be reliably 

estimated, only the revenue corresponding to accrued project costs will 

be entered as income. In the period where it is identified that a project 

will give a negative outcome, the estimated deficit on the contract will 

be fully allocated. 

Costs relating to manufacturing projects are allocated in step with the 

degree of progress on a level with the revenue. In the event that a major 

discrepancy between what is considered as actual progress and budgeted 

costs based on calculated degree of completion, the degree of competition 

will be adjusted so that it to a greater extent will correspond to the 

actual progress of the manufacturing project. 

Upon establishing accrued costs for manufacturing contracts, purchasing 

relating to future activities of a contract will not be taken into account. 

The purchases/costs are posted as goods, advance payments or other 

liquid assets depending of type of costs. 

Incurred costs and income received related to all construction contracts 

in progress, where the incurred costs and income recognised (less 

recognised losses) exceed the payments on account invoiced, will be 

recorded on the balance sheet as an asset. The asset is classified as 

accrued, non-invoiced production. 

51


If the payments on account invoiced for all the construction contracts in 

progress exceed the incurred costs and income recognised (less losses) 

this is presented as prepayments received from customers under 

Prepayments from customers. 

2.20 Cash flow statement 

The cash flow statement has been prepared based on the indirect 

method. 

3. Financial risk management 

The group’s activities entail different types of financial risk, market risk 

(including foreign currency risk, fair value interest risk and price risk), 

credit risk, liquidity risk and floating interest rate risk. The group’s overall 

risk management plan focuses on the unpredictability of the capital 

markets and attempts to minimise the potential negative effects on the 

group’s financial results. The group uses financial derivatives to hedge 

against certain risks. 

The group has a decentralised structure with operative follow-up in the 

various business units, in which the guidelines for overall management 

of financial risk are adopted by the Board. This applies to areas such 

as foreign currency risk, interest rate risk, credit risk and the use of 

financial derivatives. 

(A) FOREIGN CURRENCY RISK 

The foreign currency risk is related essentially to supply contracts that 

entail income and costs in a foreign currency. When a contract is 

signed currency shall be sold or purchased forward to reduce the foreign 

currency risk in cash flows denominated in foreign currencies in 

accordance with the guidelines. In a production process based on 

the use of an international network of subcontractors, purchases can 

also be optimised with regard to the foreign currency situation. 

(B) INTEREST RATE RISK 

The group’s interest-bearing debt is based on a floating interest rate. 

Any deviation from this shall be approved by the Board. The group’s 

financial items are invested in bank deposits and not in liquid papers 

unless this has been approved by the Board. 

(C) CREDIT RISK 

The credit risk due to commercial contracts is managed by the various 

business units. 

4. Important accounting estimates and discretionary 

assessments 

Estimates and discretionary assessments are assessed continuously and 

based on historical experience and other factors, including expectations 

of future events that are regarded as probable under the current circumstances. 

The group prepares estimates and makes assumptions concerning the 

future. The accounting estimates that are made as a result of this will 

rarely coincide in full with the final outcome. Estimates and assumptions/prerequisites 

that represent a significant risk of major changes in 

the book value of assets and liabilities during the next financial year 

are discussed below. 

52 

(A) ESTIMATED IMPAIRMENT IN VALUE OF GOODWILL 

The group performs annual tests to assess whether the value of goodwill 

is impaired, cf. Article 2.6. The recoverable amount from cashgenerating 

units is determined by calculation of the utility value. These 

calculations require the use of estimates (Note 7). 

(B) FAIR VALUE OF SHARES 

The fair value of shares that are not traded in an active market (such 

as unlisted derivatives) is determined by means of various valuation 

methods. The group assesses and selects the methods and prerequisites 

that are based primarily on the market conditions on the date of the 

balance sheet. 

(C) CLAIMS AND SUPPLEMENTARY WORK OF CONSTRUCTION 

CONTRACTS 

The group recognizes provisions regarding claims from customers in 

connection with delivery of construction contracts and possible supplementary 

work due to proved weakness in the delivery of product. The 

management estimates the determination of the value of the allocation. 

(D) RECOGNITION OF INCOME 

Income from the sale of good/services is recognised in accordance with 

the percentage of completion method. This method requires that the 

group make discretionary assessments concerning what percentage of 

the total goods/services have been delivered on the date of the balance 

sheet. 

(E) WARRANTY LIABILITY 

The group offers a warranty period of +/- 2 years on its deliveries. The 

management estimates provisions for future warranty liabilities based 

on information on historical warranty claims, together with information 

that indicates that the information on earlier expenses may be different 

from future liabilities. Factors that can influence the estimated liabilities 

include the outcome of productivity and quality initiatives, as well as 

the price of spare parts and labour costs.


Notes 


Note 1 Segment information 


PRIMARY REPORTING FORMAT – BUSINESS SEGMENTS 

The TTS Marine ASA Group is divided into four strategic business units that are organised and 

managed separately. The various business segments sell various products aimed at different 

customer groups with different risk profiles. 

The group is divided into the following business segments: 

DCH: Dry Cargo Handling 

MC: Marine Cranes 

PMH: Port and Material Handling 

DM: Deck Machinery 

Others: Corporate and others 

KEY PROFIT FIGURES 

MC DCH PMH DM Others Total 

2006 2005 2006 2005 2006 2005 2006 2005 2006 2005 2006 2005 

Turnover 439 668 308 792 728 200 649 194 178 760 140 731 257 402 50374 0 559 1 604 030 1 149 831 

Earnings before depreciation 13 485 189 80 286 61 437 12 637 7 030 -4 633 2 496 -3 162 -3 953 98 613 67 199 

Depreciation -4 438 -4 010 -2 139 -1 968 -709 -860 -1 539 -331 -92 -395 -8 916 -7 564 

Operating profit/loss 9 047 -3 821 78 147 59 469 11 928 6 170 -6 172 2 165 -3 254 -4 348 89 697 59 635 

Income form joint ventures -458 -772 9 693 7 084 0 0 -787 455 0 0 8 448 6 767 

Net financial items -11 338 -8 044 306 1 698 -1 398 -2876 -1092 -590 -131 -293 -13 653 -10 105 

Pre-tax profit/loss -2 749 -12 637 88 146 68 251 10 530 3 294 -8 051 2 030 -3 385 -4 641 84 492 56 297 

SEGMENT LIABILITIES AND ASSETS AS OF 31 DECEMBER AND INVESTMENT EXPENSES: 

MC DCH PMH DM Others Total 

2006 2005 2006 2005 2006 2005 2006 2005 2006 2005 2006 2005 

Assets 727 373 558 176 580 043 392 522 158 012 104 898 125 652 90 670 5 350 5 520 1 596 429 1 151 787 

Associated companies 7 631 8 454 23 910 16 428 0 0 5 160 6 118 0 0 36 701 30 999 

Total assets 735 004 566 630 603 953 408 950 158 012 104 898 130 812 96 858 5 350 5 520 1 633 130 1 182 786 

Liabilities 329 162 305 816 467 971 318 403 115 032 79 076 117 934 79 399 4 970 5 159 1 035 069 787 854 

Investment expenses 5 114 52 574 6 082 3 154 9 190 1 648 2 314 11 421 0 0 22 700 68 797 

Intragroup transactions are eliminated within the individual segments. 

Transactions and transfers between the various segments are at normal terms that would have been the same between independent parties. 

SECONDARY REPORTING FORMAT – GEOGRAPHICAL SEGMENTS 

The group’s activities are distributed primarily in the following regions: 

Scandinavia 

Rest of Europe 

Asia 

Rest of World 

Sales revenues 2006 2005 

Scandinavia 119 030 135 260 

Rest of Europe 855 835 576 479 

Asia 562 670 370 664 

Rest of World 66 496 67 428 

1 604 030 1 149 831 

Sales are allocated based on the customer’s home country. 

Segment assets 2006 2005 

Scandinavia 1 095 556 792 913 

Rest of Europe 493 066 357 309 

Asia 41 957 31 221 

Rest of World 2 552 1 343 

1 633 130 1 182 786 

Assets are based on where the assets are located. 

Investment expenses 2006 2005 

Scandinavia 14 658 55 746 

Rest of Europe 7 208 13 041 

Asia 827 0 

Rest of World 7 10 

22 700 68 797 

Investment expenses are based on where the assets are located. 

53


Note 2 Construction contracts 


2006 2005 

Income based on contracts 1 593 716 1 148 459 

Items on the balance sheet related to construction contracts 


Completed production 775 620 522 899 

Invoiced production 320 395 234 420 

Accrued, non-invoiced production 455 225 288 479 

Prepayments to suppliers 84 559 70 925 

Total current assets 539 784 359 404 

Current liabilities 



Prepayments from customers -220 307 -90 511 

Non-invoiced production cost, suppliers -203 120 -140 562 

Total current liabilities -423 426 -231 073 

Note 3 Inventories 



Inventories (gross) 85 743 76 300 

Non-current iventories -8 437 -7 595 

Total inventories 77 306 68 705 

Work in progress 11 844 3 745 

Book value of inventories pledged as security for liabilities 26 223 25 870 

Note 4 Payroll expenses, number of employees, other remunerations, loans to employees, etc. 


Payroll expenses 2006 2005 2004 

Salaries 194 782 156 145 124 108 

Employer’s social security contributione 28 615 25 970 21 329 

Defined benefit pension costs 5 003 4 354 3 723 

Defined contribution pension costs 17 268 10 778 8 704 

Other benefits 8 930 11 610 6 939 

Total payroll expenses 254 598 208 857 164 803 

Number of employees as of 31 December 521 459 347 

Number of employees in the group increased by 62 from 2005 to 2006. The acquisition of new companies increased the number of employees by 1. 

Remuneration to board members 2006 

Nils Aardal (Board Chairman from 30.05.06) 268 

Einar Pedersen (Board Chairman to 30.05.06) 129 

Anne Breive 170 

Hilde P. AA. Krøgenes 170 

John M. Lunde 170 

Olav Smeland (from August 2006) 21 

Mona L. Tellnes Halvorsen (to August 2006) 47 

Oddmund Hatletun 50 

Nomination committee remuneration 

TTS’s nominations committee comprises the following members: Bjørn Olafsson (Chairman), Bjørn Sjaastad and Harald Espedal. 

Proposed remuneration 2006 is TNOK 30. for the chairman and TNOK 20 to members, a total of TNOK 70. 

54

STATEMENT REGARDING THE STIPULATION OF REMUNERATION AND OTHER BENEFITS FOR THE PRESIDENT & CEO AND OTHER EXECUTIVES 

The remuneration policy of TTS Marina ASA is based on offering the group management competitive conditions. 

The level of remuneration shall reflect that the company is a listed company focusing internationally. 

The annual remuneration is based on the group management taking part in the company’s results, and in the added value for the shareholders 

through increased company value. 

Remuneration consists of three main components; base salary, bonus and a share option program. 

Bonus is determined on the basis of target results. In certain circumstances where change and development are of a decisive nature, the bonus 

is further based on specific development targets. Bonus targets are revisited annually. 

The maximum bonus is one year’s base salary for the President & CEO, and up to 50 percent for other executives. 

Since 1998, a share option program has been active for the group management of TTS; the goal being that the group management shall have 

the same incentive as the shareholders in respect of increasing company value over time. The Annual General Meeting has each year given 

the Board authority to establish share option programs with a two year term. Redemption price equals market price on allotment. 

First exercise is 50 percent after one year. Thereafter 12.5 percent per quarter, in addition to share options that have not been previously exercised. 

Share options may not be exercised subsequent to the second anniversary. 

The group pension scheme in Norway is based on approximately 65 percent of base salary at the age of 67, limited to a maximum of 12G. 

For employees abroad, the schemes prevailing in the respective companies where they are employed apply 

The period of notice is 6 months with a severance pay from 6 to 24 months, period of notice inclusive. 

The share option program is conditional upon the Annual General Meeting’s approval, based on the Board being granted authority to make such 

allotments. The President & CEO’s remuneration is determined by the Board of TTS Marine ASA. 

With respect to other executives, their remuneration is determined by the boards of the respective subsidiaries / President & CEO. 

REMUNERATION AND OTHER BENEFITS FOR THE PRESIDENT & CEO AND OTHER EXECUTIVES 

Name Position Remuneration Other Bonus Share- Pension 

benefits paid options Total benefits 

Johannes D. Neteland President & CEO 1 456 151 680 2 341 4 627 632 

Olav Bruåsdal Financial Director 984 17 191 936 2 128 247 

Ivar K. Hanson Man. Director MC 1 095 107 160 936 2 298 62 

Hans-Jan Erstad Manager HR-IT-QA 641 102 4 936 1 683 119 

Göran K. Johansson Man. Director PMH 1 395 14 581 936 2 927 482 

Stellan Bernsro Man. Director DCH 922 15 0 0 937 275 

Edgar Bethmann Man. Director DM 1 186 142 0 0 1 328 121 

Remuneration Taxable remuneration 

Other benefits Free car, life insurance, telephone, newspapers etc. 

Bonus paid Bonus paid in current year 

Share options Difference between market price and exercise price 

Total Total taxable remuneration 

The pension premium for the President & CEO is based on pension payments of approximately 65 percent of his base salary from the age of 67, 

for the CFO approximately 65 percent of a maximum of 12G. In addition, an early retirement scheme from the age of 60 that pays approximately 

60 percent of base salary is established. With effect from 2007, the group pension scheme will be based on approximately 65 percent of base salary 

at the age of 67, limited to a maximum of 12G. Additional pension benefits will be adjusted similar to other benefits. 

The period of notice for the President & CEO is 6 months, with a severance pay of 24 months, period of notice inclusive, and from 6 to 24 months 

for other group executives. 

AUDITOR FEES 


Statutory auditing 1 871 1 778 

Other assistance including tax consulting 693 480 

Total 2 564 2 258 

Other assistance in 2006 includes TNOK 385 to Due Diligence that was interupted. 

55


Note 5 Pensions 


The Norwegian companies in the group have defined benefit pension schemes that entitle the employees to defined future pension benefits dependent 

on the number of years of service, salary level, retirement age and National Insurance benefits received. The pension scheme includes 168 persons as 

of 31 December 2006. The group’s obligations are covered primarily by an insurance company. 

The companies outside Norway have pension plans according to local practice and legislation. These are not defined benefits plans, and not entered into 

the balance sheet. 

The net pension obligations based on the assumptions as of 31 December 2006 recorded on the balance sheet are determined as follows: 


Insured Uninsured Total Insured Uninsured Total 

Market value of pension funds 44 994 0 44 994 43 613 0 43 613 

- Net present value of accrued pension obligations -50 872 -1692 -52 564 -50 654 -1 112 -51 765 

+ Unrecognised estimate changes and deviations 5 279 222 5 501 5 337 82 5 419 

- Accrued employer’s share of NI contributions 0 103 103 558 145 703 

= Net pension obligation -599 -1 573 -2 171 -2 262 -1 175 -3 436 

Net pension costs are determined as follows: 2006 2005 


Net present value of current year’s 

pension benefits accrued 3 861 240 4 101 3 649 218 3 867 

+ Interest payable on pension obligations 2 403 56 2 459 2 415 41 2 456 

- Expected return on pension funds -2 623 0 -2 623 -2 519 0 -2 519 

+ Recognised estimate changes and deviations 963 0 963 450 1 451 

+ Change in employer’s share of NI contributions 79 24 103 77 22 99 

= Total costs, including payroll expenses 4 683 320 5 003 4 072 282 4 354 

Change in book value of funds: 2006 2005 

Book value as of 1 January -3 436 -5 701 

- Costs recognised during the year (see above) 5 003 4 354 

+/- Pension payments and payment of pension premiums 6 267 6 618 

= Book value as of 31 December. -2 171 -3 437 

The following economic assumptions have been made for 

calculation of the pension obligations: 2006 2005 

31.12. 1.1. 31.12. 1.1. 

Return on pension funds 5.40 % 5.50 % 5.50 % 6.00 % 

Discount rate 4.35 % 4.50 % 4.50 % 5.00 % 

Annual wage inflation 4.50 % 3.00 % 3.00 % 3.00 % 

Annual adjustment of the basic National Insurance amount (G) 4.25 % 2.00 % 2.00 % 2.00 % 

Annual adjustment of pensions being paid out 1.65 % 2.00 % 2.00 % 2.00 % 

Voluntary retirement 10.00 % 10.00 % 10.00 % 10.00 % 

Withdrawal tendency for early retirement (AFP) 45.00 % 45.00 % 45.00 % 45.00 % 

Employer’s share of National Insurance contributions 14.10 % 14.10 % 14.10 % 14.10 % 

56

Note 6 Tangible fixed assets 


Machinery 

Furniture 

and office Computer 

Land Buildings and vehicles equipment equipment Total 

AS OF 1 JANUARY 2005 

Historical cost as of 1 January 180 4 582 19 888 7 086 25 886 57 622 

Accumulated depreciation as of 1 January 0 -1 194 -14 981 -5 519 -21 143 -42 837 

Book value as of 1 January 180 3 388 4 907 1 567 4 743 14 785 

2005 FINANCIAL YEAR 


Exchange differences 0 0 -674 935 498 759 

Additions during the year 513 8 431 4 979 916 12 272 27 111 

Disposals during the year 0 0 -544 -500 -857 -1 901 

Depreciation for the year 0 -235 -1 321 -786 -4 625 -6 967 

Book value as of 31 December 693 11 584 7 347 2 132 12 031 33 787 

AS OF 31 DECEMBER 2005 

Historical cost as of 31 December 693 13 013 23 649 8 437 37 799 83 591 

Accumulated depreciation as of 31 December 0 -1 429 -16 302 -6 305 -25 768 -49 804 


2006 FINANCIAL YEAR 


Exchange differences 46 -594 -431 500 1 580 1 101 

Additions during the year 0 1 404 2 623 970 3 043 8 040 

Disposals during the year 0 0 -210 0 -263 -473 

Depreciation for the year 0 -616 -2 509 -521 -4 768 -8 414 


AS OF 31 DECEMBER 2006 

Historical cost as of 1 January 739 13 823 25 630 9 907 42 160 92 260 

Accumulated depreciation as of 1 January 0 -2 045 -18 811 -6 826 -30 536 -58 218 


Property in the Norwegian companies has been pledged as security for long-term and short-term debt to credit institutions, see Note 13. 

PART OF FIXED ASSETS THAT ARE LEASED: 

Machinery 

Furniture 

and office 

and vehicles equipment 


Book value as of 1 January 900 9 800 

Depreciation for the year -100 -2 800 

Book value as of 31 December 800 7 000 


Book value as of 1 January 800 7 000 

Depreciation for the year -100 -2 800 

Book value as of 31 December 700 4 200 

57


Note 7 Intangible fixed assets 


R&D, Patents, 

Licences 1) Goodwill 2) Sum 


Historical cost as of 1 January 13 791 285 133 298 924 

Accumulated depreciation as of 1 January -4 390 -22 081 -26 471 

Book value as of 1 January 9 401 263 052 272 453 



Exchange differences -548 2 283 1 735 

Additions during the year - developed by the companies 2 748 0 2 748 

Acquisition of subsidiaries 0 36 621 36 621 

Disposals during the year 0 0 0 

Depreciation for the year -597 0 -597 

Book value as of 31 December 11 004 301 956 312 960 


Historical cost as of 31 December 15 991 324 037 340 028 

Accumulated depreciation as of 31 December -4 987 -22 081 -27 068 




Exchange differences -922 2 819 1 897 

Additions during the year - developed by the companies 11 623 0 11 623 

Acquisition of subsidiaries 3) 0 3 004 3 004 


Depreciation for the year -503 0 -503 






1) BOOKED VALUTE R&D, PATENTS AND LICENCES AS OF 31 DECEMBER 2006: 

Technology for Container Terminals 5 000 

EU project, development of a Terminal System 9 763 

Development costs in BoHai, China 4 530 

Others 1 910 

Total 21 203 

58 

Item consists of: The development project, Technology for Container Terminals, represents a new business area with a potential for long-term commerical 

value. The project costs of NOK 5 000 000 have been capitalised in an amount corresponding to the Norwegian Industrial and Regional Development 

Fund (SND) risk loan linked to this project. If the project does not generate any commercially feasible results, the loan can be forgiven, and the profit and 

loss account or balance sheet will not be affected as a result of this at the time of the decision. See further information i note 8. TTS Ships Equipment AB 

has capitalised TNOK 9 763 related to development of a ”Terminal System”. TTS Marine ASA has capitalised TNOK 4 530 related to development costs 

concerning activity in China. 

2) A SUMMARY OF THE GOODWILL ALLOCATION AT THE SEGMENT LEVEL IS AS FOLLOWS: 


MC DCH PMH Others DM Total MC DCH PMH Others DM Total 

Scandinavia 24 292 156 424 3 718 0 0 184 434 24 293 156 424 3 470 0 0 184 187 

Rest of Europe 28 339 22 819 35 423 34 712 0 121 293 28 340 20 530 33 822 33 646 0 116 338 

Asia 2 053 0 0 0 0 2 053 2 053 0 0 0 0 2 053 

Rest of world 0 0 0 0 0 0 0 0 0 0 0 0 

Sum 54 684 179 243 39 141 34 712 0 307 780 54 686 176 954 37 292 33 646 0 302 578 

ASSESSMENT OF WRITE-DOWN REQUIREMENTS: 

TTS has defined four cash-generating units that are in accordance with the definition of the company’s divisions. The value of various cash-generating 

units has been assessed as of 31 December 2006, and no grounds have been identified for the write-down of goodwill in any of the units. 

The testing of value in the divisions is based on the utilitarian value and discounted cash flows based on the budget and forecasts for the years 2007 

to 2008. TTS has a good level of orders in hand and expected growth in the aforementioned period. The discount rate is 10 per cent before tax. 

The terminal value is based on the same discount rate with a growth rate equal to inflation. 

3) ACQUISTION OF SUBSIDIARIES 

The company was acquired at a price of NOK 4 million, with a turnover in 2006 of NOK 5 million.

Note 8 Shares in other companies 


Ownership Historical Book 

interest cost value 

FIXED ASSETS 

Shin Young Heavy industry 13.4 % 222 222 

FastShip Inc.* 6.7 % 13 326 13 326 

Other 2 2 

Total shares in other companies 13 550 13 550 

Shares in other companies are defined as available-for-sale. 

*) In the balance sheet as of 31 December the company has recorded 615 156 shares in FastShip Inc (FSI) at a book value of NOK 13.3 million. 

In addition, three convertible loans have been recorded at NOK 5.8 million, which corresponds to 408 257 shares. Shares and convertible loans 

have been recorded at USD 2.8 and USD 2.04 per share, respectively, which corresponds to an average of USD 2.5 per share. TTS has been involved 

in the FastShip project since 1996. Provided the project is realised, TTS will through patented technology get contracts of a total value over 

MNOK 1.000. If the FSI project is not realised, and TTS must write off NOK 19.2 million, the equity will be reduced with the total amount. 

The write off will not affect the liquidity. See also the discussion in the Directors’ Report. 

Note 9 Subsidiaries 


The following subsidiaries are included in the consolidated accounts: 

TTS MARINE ASA 

Acquisition Ownership Voting 

Subsidiaries Registered office date interest share 

TTS Handling Systems AS Drøbak, Norway 1994 100 % 100 % 

TTS Ships Equipment AS Bergen, Norway 1996 100 % 100 % 

Norlift AS Bergen, Norway 1994 100 % 100 % 

Hydralift Marine AS Kristiansand, Norway 2003 100 % 100 % 

TTS Ships Equipment AB Gothenburg, Sweden 2002 100 % 100 % 

TTS Marine Shanghai Co Ltd Shanghai, China 2002 100 % 100 % 

TTS Marine Cranes AS Bergen, Norway 2006 100 % 100 % 

Associated company 

TTS BoHai Machinery Co., Ltd Dalian, China 2005 50 % 50 % 

TTS SHIPS EQUIPMENT AB HAS THE FOLLOWING INVESTMENTS: 

TTS Ships Equipment GmbH Bremen, Germany 1997 100 % 100 % 

TTS Marine Inc. Virginia, USA 1994 100 % 100 % 

TTS Hua Hai AB* Gothenburg, Sweden 2002 100 % 100 % 

TTS Liftec Oy Tampere, Finland 2004 100 % 100 % 

TTS Port Equipment AB Gothenburg, Sweden 2005 100 % 100 % 

TTS Marine S.r.l Genoa, Italy 2006 100 % 100 % 


TTS Hua Hai Ships Equipment Co Ltd Shanghai, China 2002 50 % 50 % 

TTS SHIPS EQUIPMENT GMBH HAS THE FOLLOWING INVESTMENTS: 

TTS-LMG Marine Cranes GmbH Lübeck, Germany 2004 100 % 100 % 

TTS Kocks GmbH Bremen, Germany 2005 100 % 100 % 

TTS KOCKS GMBH HAS THE FOLLOWING INVESTMENTS: 

TTS Kocks Ostrava s.r.o Ostrava, Czech Republic 2005 100 % 100 % 


TTS Kocks GmbH Korea Co. Ltd Korea 2005 50 % 50 % 

Companies are accounted for in accordance with the equity method. 

*) The subsidiary TTS Hua Hai AB is not consolidated while it is an integrated part of joint venture TTS Hua Hai. 

Profit after taxes is included as income from investments in joint ventures. The profit in TTS Hua Hai AB in 2006 

was TNOK 1 382 with a turnover of TNOK 118 518. 

59


Note 10 Investments in joint ventures 


Investments are accounted for in accordance with the equity method 

THE GROUP HAS THE FOLLOWING INVESTMENTS IN JOINT VENTURES: 

Company Registered office Acquisition date Ownership interest Voting share 

TTS Hua Hai Ships Equipment Co., Ltd Shanghai, China 2002 50 % 50 % 

TTS BoHai Machinery Co., Ltd Dalian, China 2005 50 % 50 % 

TTS Kocks GmbH Korea Co. Ltd Korea 2005 50 % 50 % 

INTERESTS IN JOINT VENTURES 

TTS Kocks Ltd TTS Bohai TTS Hua Hai 

GmbH Korea Co. Machinery Co., Ltd Ships Equipment Total 

Opening balance 1 January 6 118 8 454 16 428 30 999 

Acquisition/Start-up of the company 0 0 0 

Share of profit/loss -787 -458 9 693 8 448 

Dividends 0 0 -2 460 -2 460 

Forgiveness of debt 0 0 0 0 

Effect of foreign currencies -171 -364 250 -286 

Disposal of shares in associated companies 0 0 0 0 

Closing balance 31 December 5 160 7 631 23 910 36 701 

There are no contingent liabilities related to the group’s shares in joint ventures, and no contingent 

liabilities in the joint ventures themselves. 

GROUP’S SHARE OF THE PROFIT/LOSS, ASSETS AND LIABILITIES AS OF 31 DECEMBER 2006 

Assets Liabilities Income Profit/Loss 

TTS Hua Hai Ships Equipment Co., Ltd 70 006 46 096 155 810 9 693 

TTS Bohai Machinery Co., Ltd 19 821 12 190 12 851 -458 

TTS Kocks GmbH Korea Co. Ltd 34 057 28 897 43 296 -787 

Total 173 884 87 182 211 957 8 448 

Note 11 Customer and other receivables 



Receivables from customers 244 841 171 554 

Write-down for losses incurred on receivables from customers -3 006 -3 550 

Net receivables from customers 241 835 168 004 

RECEIVABLES THAT MATURE AFTER MORE THAN ONE YEAR 


Total 5 997 5 997 

Among the receivables that mature after more than one year, TTS Marine ASA has a convertible loan of NOK 5 830 000 related to FastShip Inc., 

see Note 8. 

There are no credit risk concentrations within the receivables from customers since the group has many customers distributed throughout 

a number of countries. 

60

Note 12 Long-term liabilities 


REPAYMENT PROFILE AND MATURITY 

Balance as of 2012 

31 December 2006 2007 2008 2009 2010 2011 and later 

Leasing debt 5 619 2 253 2 253 713 100 100 200 

Long-term liabilities 197 269 25 779 21 022 120 764 19 181 10 523 0 

first year of long-term debt instalments -28 032 0 0 0 0 0 0 

Total debt to credit institutions 174 855 174 855 151 580 30 103 10 822 143 200 

SPECIFICATION OF LOANS 

Foreign Nominal Instalment Book value Book value 

Type of loan currency interest rate Maturity terms 2006 2005 


Nordea Mortgage loan NOK Nibor+1.35 % 2011 4 per year 32 150 39 290 

Nordea Mortgage loan NOK Nibor+1.35 % 2006 4 per year 0 450 

Nordea Mortgage loan NOK Nibor+1.35 % 2009 4 per year 100 000 0 

Elcon Finans Other long-term NOK 5.30 % 2009 12 per year 214 286 

Norfund Mortgage loan NOK 5.39 % 2011 4 per year 9 048 10 000 

SG Finans Other long-term NOK 5.50 % 2008 12 per year 4 918 7 070 

TTS SHIPS EQUIPMENT AS 

SkandiaBanken Other long-term NOK 4.50 % 2008 12 per year 701 801 

TTS HANDLING SYSTEMS AS 

Innovasjon Norge Mortgage loan NOK 6.50 % 2009 4 per year 4 613 4 613 

TTS LIFTEC OY 

Sampo Bank Mortgage loan EUR 2 % 2008 4 per year 1 915 4 238 

TTS LMG MARINE CRANES GMBH 

HypoVereinsbank Mortgage loan EUR Euribor+1.275 % 2007 4 per year 3 295 6 388 

TTS SHIPS EQUIPMENT GMBH 

Nordea Mortgage loan EUR Euribor+1.275 % 2011 4 per year 35 217 0 

TTS KOCKS GMBH 

HypoVereinsbank Mortgage loan EUR Euribor+1.275 % 2011 4 per year 10 816 0 

Total 202 887 73 136 

Book value of the group’s long-term loans in different currencies is as follows: 


NOK 151 643 62 510 

EUR 51 244 10 626 

Total 202 887 73 136 

See Note 13 for security for long-term debt. 

61


Note 13 Assets pledged as security and guarantees 


The credit agreement for TTS Marine ASA in Norway was established (50/50) with Nordea Norge ASA (Nordea) and Sparebanken Vest 

(SparebankenVest), and Nordea is the agent. As security for the company’s participation in the cash pool account system and the group’s guarantee 

limit system, the following assets in Norway have been pledged as security to Nordea. 


Secured debt 211 505 197 001 

Assets at book value 

Customer/intragroup receivables 101 037 81 257 

Non-invoiced production 175 530 116 079 

Inventories/work in progress 28 933 25 870 


Property 3 380 3 478 

Total assets pledged as security 365 781 263 949 

In addiation following assets in the group have been pledged as security for garanties and credit agreements: 

Total assests pledged as security (book value) 133 100 48 708 

Total 498 781 312 657 

In addition, leases in Norway including machinery and plant, as well as shares in TTS Ships Equipment AB, have also been pledged as security. 

The nominal value of the mortgage bond is NOK 200 000 000. 

TTS KOCKS GMBH 

The loan to TTS Kocks GmbH at NOK 10.7 million (EUR 1.3 million) has been established with Bayerische Hypo- und Vereinsbank Aktiengesellshaft 

(HypoVereinsbank) in Germany. The bank has pledge in the company’s customers receivables and inventories, and additionaly a parent company 

guarantee from TTS Marine ASA of NOK 37.1 million (EUR 4.5 million). The assets of the company has a book value of NOK 19.8 million 

(EUR 2.4 million). 

TTS-LMG MARINE CRANES GMBH 

The credit agreement for TTS-LMG Marine Cranes GmbH has been established with Bayerische Hypo- und Vereinsbank Aktiengesellshaft 

(HypoVereinsbank) in Germany with a total credit limit including bank guarantees of NOK 41.2 million (EUR 5.0 million) and a drawdown of 

NOK 3.3 million (EUR 2.8 million) as of 31 December 2006. The bank has security in the company’s assets, in addition to a parent company 

guarantee from TTS Marine ASA with a limit of NOK 39.5 million (EUR 4.8 million). The assets of the company has a book value of NOK 92.3 million 

(EUR 11.2 million). 

TTS LIFTEC OY 

The credit agreement for TTS Liftec Oy has been established with Sampo Pankki Oyi (Sampo Bank) in Finland with a credit limit of NOK 17.3 million 

(2.1 million EUR) and a drawdown of NOK 1.6 million (EUR 0.2 million) as of 31 December 2006. The bank has a parent company guarantee from 

TTS Marine ASA with a limit of NOK 17.3 million (EUR 2.1 million). 

TTS MARINE SHANGHAI CO. LTD. 

The credit agreement for TTS Marine Shanghai Co. Ltd. has been established with DnB Bank ASA, Shanghai Branch with a credit limit of NOK 

82 million (EUR 1 million) and a drawdown of NOK 0 million (EUR 0 million) as of 31 December 2006. The bank has a parent company guarantee 

from TTS Marine ASA with a limit of NOK 8.2 million (EUR 1 million). 

TTS KOCKS OSTRAVA s.r.o 

The credit agreement for TTS Kocks Ostrava s.r.o has been established with Ceska Sporitelna a.s in Check with a credit limit of NOK 8.9 million 

(CZK 30 million) and and drawdown of NOK 5.1 million (CZK 17.2 million) as of 31 December 2006. The bank has security in the company’s assets, 

in addition TTS Marine ASA is co-debtor. The assets of the company has a book value of NOK 20.9 million (CZK 69.7 million). 

The group has also undertaken to meet the following financial strength requirements for Nordea: 

There is a requirement that the equity shall be greater than NOK 350 million at any time. In addition the equity ratio shall be greater than 

30 per cent as of 31 December. With equity of NOK 598.1 million and an equity ratio of 36.6 per cent, the group meets these requirements. 

GUARANTEE COMMITMENTS, JOINT AND SEVERAL LIABILITY 

The companies in Norway, as well as TTS Ships Equipment AB and TTS Ships Equipment GmbH, participate in a guarantee pool system that covers 

payment guarantees, contract guarantees, advance payment guarantees and tax guarantees within a total limit of NOK 100 000 000. As security 

for this guarantee pool, the Norwegian companies’ inventories, accounts receivable, leases including machinery and plant and the credit balance on 

advance payment accounts have been pledged. The companies in Norway are jointly and severally liable. 

Total drawdown in the guarantee pool as of 31 December was NOK 99.270.000 for the group. 

62

Note 14 Taxes 


Deferred taxes are netted if the group has a legal right to offset deferred tax assets against deferred taxes on the balance sheet and if 

the deferred taxes are owed to the same tax authority. The following amounts have been netted: 


DEFERRED TAX ASSETS: 

- Deferred tax assets that reverse after more than 12 months -35 538 -30 546 

- Deferred tax assets that reverse within 12 months 0 0 

Total recognised deferred tax assets -35 538 -30 546 

DEFERRED TAXES: 

- Deferred taxes that reverse within 12 months 0 0 

Total recognised deferred taxes 19 609 15 276 

Net deferred taxes on the balance sheet -15 929 -15 270 

Change in recognised deferred taxes: 2006 2005 


Recognised during the period (see specifications below) -659 -9 242 

Tax entered directly against equity 0 0 

Book value as of 31 December -15 929 -15 270 

Change in deferred tax assets and deferred taxes (without netting within the same tax regime): 

1.1.2005 Change 2005 31.12.2005 Change 2006 31.12.2006 

DEFERRED TAXES 

Fixed assets 1 419 689 2 108 -47 2 061 

Accounts receivable 161 -161 0 0 0 

Construction contracts 32 509 -16 131 16 378 5 494 21 872 

Other temporary differences 724 13 759 14 483 2 738 17 221 

Total deferred taxes 34 813 -1 844 32 969 8 184 41 153 

DEFERRED TAX ASSETS 

Accounts receivable 0 -78 -78 -396 -474 

Inventories -1 993 -308 -2 301 0 -2 301 

Pension funds -655 -307 -962 354 -608 

Other provisions for liabilities and charges -1 567 644 -923 -790 -1 713 

Total deferred tax assets -4 215 -49 -4 264 -833 -5 097 

Net deferred taxes 30 598 -1 893 28 705 7 351 36 056 

Tax credit deduction carryforward -6 182 0 -6 182 0 -6 182 

Tax allowance carryforward -1 260 0 -1 260 0 -1 260 

Tax loss carryforward -30 830 -7 936 -38 766 -8 786 -47 552 

Net deferred tax assets -7 674 -9 829 -17 503 -1 435 -18 938 

Excess allocation 387 586 973 776 1 749 

Unrecognised deferred 

tax assets related to allowance 1 260 0 1 260 0 1 260 

Net deferred tax assets on the balance sheet -6 027 -9 243 -15 270 -659 -15 929 

The deferred tax assets related to tax loss carryforwards are recognised on the balanace sheet when the management believes that 

it is probable that the group can apply this against future taxable income. 

63


Specification of differences between the financial profit before tax and the tax basis for the year: 


Pre-tax profit/loss 84 492 56 297 

Permanent differences -1 074 -1 424 

Change in the assessment in relation to previous year’s accounts 0 0 

Change in temporary profit/loss differences -38 455 -1 973 

Application of tax loss carryforward -351 -15 356 

Tax basis for the year 44 612 37 544 

Breakdown of the tax charge: 

Tax payable 1) 24 668 25 301 

Effect of too little allocated deferred tax assets 0 0 

Effect of foreign exchange fluctuations 0 0 

Change in deferred taxes -659 -9 242 

Tax charge 24 010 16 059 

1 ) Tax payable is related to the foreign subsidiaries’ taxable profit that cannot be offset against the tax loss carryforward in Norway. 

Tax payable on the balance sheet: 2006 2005 

Tax payable 24 668 25 301 

Prepaid tax in foreign subsidiaries -16 453 -15 004 

Too little/much allocated in earlier years 0 0 

Tax credit deduction related to dividends 0 0 

Tax payable on balance sheet 8 215 10 297 

Average tax rate for the group is 28.4 %: 

28 % of the profit before tax 23 658 15 763 

Too little/much allocated deferred taxes 652 586 

Permanent differences, including amortisation of goodwill -301 -290 

Estimated tax charge 24 010 16 059 

Note 15 Liquid assets/short-term interest-bearing liabilities 



Bank deposits, cash, etc. as of 31 December 236 934 97 811 

Deposits(+)/withdrawals(–) in the cash pool account system as of 31 December 85 040 -66 640 

Other short-term interest-bearing debt 22 800 -96 100 

TTS Marine ASA administers a cash pool account system. The group has been granted a credit limit for the group of NOK 70 000 000. 

The companies that participate in the scheme are jointly and severally liable for the total limit. 

Note 16 Share capital and shareholder information 


Number of shares as of 31 Dec. Nominal value Book value of share capital 

22 492 904 0.50 11 246 452 

THE FOLLOWING COMPANIES ARE INCLUDED IN THE TTS MARINE GROUP: 

Company Owner Ownership interest Share capital Number of shares 

Norlift AS (formerly TTS Eiendom AS) TTS Marine ASA 100 % NOK 500 000 500 

TTS Handling Systems AS TTS Marine ASA 100 % NOK 950 000 95 000 

TTS Ships Equipment AS TTS Marine ASA 100 % NOK 2 500 000 2 500 

Hydralift Marine AS TTS Marine ASA 100 % NOK 100 000 1 000 

TTS Ships Equipment AB TTS Marine ASA 100 % SEK 2 000 000 2 000 

TTS Marine Shanghai Co. Ltd. TTS Marine ASA 100 % USD 200 000 3 500 

TTS Ships Equipment GmbH TTS Ships Equipment AB 100 % EUR 255 646 5 000 

TTS Inc. TTS Ships Equipment AB 100 % USD 190 000 1 900 

TTS-LMG Marine Cranes GmbH TTS Ships Equipment AB 100 % EUR 25 000 1 

TTS Liftec Oy TTS Ships Equipment AB 100 % EUR 76 500 1 020 

TTS Port Equipment AB TTS Ships Equipment AB 100 % SEK 100 000 1 000 

TTS Kocks GmbH TTS Ships Equipment AB 100 % EUR 1 000 000 1 000 

TTS Kocks Ostrava s.r.o. TTS Ships Equipment AB 100 % EUR 310 291 1 000 

TTS Marine S.r.l. TTS Ships Equipment AB 100 % EUR 10 400 1 000 

TTS Marine Cranes AS TTS Marine ASA 100 % NOK 1 000 000 1 000 

64

THE LARGEST SHAREHOLDERS IN TTS MARINE ASA AS OF 31 DECEMBER 2006 WERE: 

FIGURES IN NOK 1000 

Shareholder Number of shares Ownership interest Voting share 


Morgan Stanley and Co. Intl.Limited 2 575 407 11.45 % 11.45 % 


IF Skadeforsakring AB 1 316 400 5.85 % 5.85 % 


Bank of New York, Brüssels brance 843 483 3.75 % 3.75 % 




Stichting Shell Pensionfonds 288 256 1.28 % 1.28 % 


DnB Nor SMB 222 600 0.99 % 0.99 % 

Lectio AS 189 200 0.84 % 0.84 % 

JPMorgan Chase Bank 180 000 0.80 % 0.80 % 



Arne Ketil Kyrkjebø 154 400 0.69 % 0.69 % 



Alden AS 125 800 0.56 % 0.56 % 

Total 20 largest shareholders 19 861 139 88.30 % 88.30 % 

Total others 2 631 765 11.70 % 11.70 % 

Total 22 492 904 100.00 % 100.00 % 

Board member Oddmund Hatletun had 1 493 shares and Board member Olav Smeland had 800 shares, while President & CEO Johannes D. Neteland had 

82 500 shares and options to purchase 137 500 shares. On 30 May 2006 the Annual General Meeting resolved to grant the Board authority to issue a 

maximum of 4 000 000 shares in the event of an acquisition or merger. This authorisation is valid until the Annual General Meeting for 2006, and no 

later than 30 June 2007. As a result of acquisitions completed, a total of 2 039 300 shares were issued as of 7 December 2006, the same as of 29.03.07. 

As of 31 December 2006, 112 500 options were allotted that can be exercised until 9 June 2007 at a price of NOK 26.5 (from an authorisation for a total 

of 300 000 options granted at the Ordindary General Meeting of 9 June 2005). In addition to 340 000 options that can be exercised until 30 May 2008 

at a price of NOK 35. (from an authoristion for a total of 340 000 options granted at the Annual General Meeting of 30 May 2006). 

THE DISTRIBUTION OF OPTIONS IS AS FOLLOWS: 

No. of No. of 

options that options that 

can be exercised can be exercised 

Name Position Company until 6/09/07 Price until 6/09/07 Price Total 

Johannes D. Neteland President & CEO TTS Marine ASA 37 500 26.50 100 000 35.00 137 500 

Olav Bruåsdal Financial director TTS Marine ASA 15 000 26.50 40 000 35.00 55 000 

Hans-Jan Erstad Chief of staff TTS Marine ASA 15 000 26.50 40 000 35.00 55 000 

Göran K. Johansson Division Director TTS Port Equipment AB 15 000 26.50 40 000 35.00 55 000 

Bjørn O. Hansen Proj. director TTS Handling Systems AS 15 000 26.50 0 0 15 000 

Ivar K. Hanson Division director TTS Marine ASA 15 000 26.50 40 000 35.00 55 000 

Stellan Bernsro Managing Director TTS Ships Equipment AB 0 0 40 000 35.00 40 000 

Edgar Bethman Division Director TTS Kocks GmbH 0 0 40 000 35.00 40 000 

Total number of options to leading employees 112 500 340 000 452 500 

Share options exercised in 2006 resulted in the issue of a total of 337 500 shares. 150 000 of these shares were issued at NOK 14 per share, with a 

weighted average market price on the date of issue of NOK 37.00 per share. 187 500 shares were issued at NOK 26.50 per share, with a weighted 

average market price per share of NOK 45.44 on the date of issue. A resolution was adopted at the Annual General Meeting of 30 May 2006 to 

authorise the Board to purchase a maximum of 300 000 of the company’s own shares. This authorisation is valid until the Annual General Meeting 

for 2006, and no later than 30 June 2007. In the period TTS has owned maximum 70 000 shares. As of 31 December 2006 the company held 6 700 

of its own shares. 

In accordance with authorities granted by the Annual General Meeting in 2005 and 2006, TTS has issued share option programmes to the group 

management. Through these programmes, TTS’ group management have a future right to purchase a number of shares at a strike price equal to the 

marked rate on the date that the share purchase programme was initiated. The option premium is estimated on the date of allotment using the Black 

& Scholes option pricing model (BS). The options have a maximum term of two years, with a possible first exercise after one year (50 percent), then 

(12.5 percent) per quarter, giving a weighted averaged of 15 months maturity which is employed in BS. The option premium is distributed over the 

option’s two-year term. Implied volatility is based on a combination of historic data and discretion. For options issued in 2005, a 25 percent volatility 

is used (historically 23 percent), and for 2006, a 30 percent volatility (historically 31.2 percent). For 2005, a risk-free interest rate of 3.0 percent is 

used, and for 2006 a rate of 3.5 percent. For 2006, NOK 978 in option premium is charged as an expense classified as salary in the profit and loss 

account. Employers’ national insurance contribution is charged as an expense upon exercise of options. For 2006, NOK 858 million is charged as an 

expense classified as salary in the profit and loss account. 

65


Note 17 Other short-term liabilities 



Provisions for projects (see note 21) 76 042 75 003 

Other current liabilities 105 827 82 357 

Total short-term liabilities 181 869 157 360 

Note 18 Other operating expenses 



Rent, costs for premises 21 163 18 381 

EDP costs 5 868 7 957 

Marketing, travel 37 218 24 323 

Other 74 621 50 643 

Total other operating expenses 138 872 101 304 

Note 19 Related parties 

All the underlying subsidiaries (Note 9), joint ventures (Note 10), members of the Board (Note 4) and senior management are regarded as related 

parties. 

The group has carried out various transactions with underlying companies and joint ventures. All the transactions have been carried out at part 

of the ordinary operations and at arm’s length prices. 

Sales: 2006 2005 

Joint ventures 6 831 6 646 

Cost of sales: 

Joint ventures 112 893 915 

Items on the balance sheet related to sales and cost of sales to related parties: 



Current liabilities 

Joint ventures 23 521 980 

Loan to related parties 


Note 20 Derivatives 



Assets Liabilities Assets Liabilities 

Forward currency contracts – fair value hedging 17 305 14 530 9 300 9 688 

Derivatives held for trading purposes are classified as current assets or liabilities. 

Forward currency contracts 

Nominal amount of outstanding forward currency contracts as of 31 December was NOK 900 million. 

Derivatives are included in principle at the fair value on the date of entry into the contract. The value is adjusted to fair value in subsequent periods. 

TTS enters into derivates that qualifies for, and is presented as fair value hedging. Changes in the fair value of the derivates that is identified and 

qualifies as fair value hedging, are recognised in the profit and loss account together with changes in the fair value of the asset or liability that 

is hedged. The asset or liability that is hedges, is income or cost related to contruction contracts. Hedged asset or liability in balance is booked 

as fair value and represent the port of the income or cost that on balance day are not invoiced to the customer or were invoices from suppliers 

are not received. 

66

Note 21 Other provisions for obligations 


Delivered 

projects* Guarantees Other Total 

1 januar 2006 75 003 23 655 4 246 102 904 

Provisions for the year 14 354 12 810 3 250 30 414 

Utilised during the year -13 315 -12 154 -4 246 -29 715 

31 desember 2006 76 042 24 311 3 250 103 603 

Classification on the balance sheet 2006 2005 

Current liabilities 103 603 102 904 

*) Obligations related to supplementary work and other claims from the customer 

Note 22 Financial items and foreign currency gains/losses 



Income from investments in joint ventures 8 448 6 767 

Other interest income 3 405 2 314 

Interest on bank loans -15 391 -9 633 

Net foreign currency gains/losses -1 668 -2 875 

Total -5 206 -3 337 

FOREIGN CURRENCY GAINS/LOSSES 

The foreign currency gains and losses that are recognised in the profit and loss account are as follow: 


Foreign currency gains 3 914 1 646 

Foreign currency losses -5 582 -4 431 

Total -1 668 -2 785 

Foreign currency gains are included in other financial income in the profit and loss account, and foreign currency losses 

are included in other financial expenses. 

Note 23 Earnings per share 


The earnings per share are calculated by dividing the portion of the net profit for the year that is attributable to the company’s 

shareholders with a weighted average of the number of outstanding ordinary shares throughout the year, less the company’s own shares. 


Net profit for the year attributable to the company’s shareholders 60 481 40 238 

Weighted average number of outstanding shares 20 685 18 342 

Earnings per share (NOK per share) 2.92 2.19 

DILUTED EARNINGS PER SHARE 

In calculating the diluted earnings per share, the weighted average of the number of outstanding ordinary 

shares adjusted for the effect of the conversion of all the potential shares that can entail dilution is used. 

The company has share options where a calculation is made to determine the number of shares that could have been subscribed 

for at the market price (calculated at the average share price for the company’s shares throughout the year) based on the 

monetary value of the subscription rights for the outstanding share options. The number of shares calculated as explained above 

are compared with the number of shares that would have been issued if all the share options were exercised. The difference 

is placed in the denominator in the fraction as shares issued without consideration. 


Profit used to calculate the diluted earnings per share 60 481 40 238 

Average number of shares outstanding, ordinary shares 20 685 18 342 

Adjustments for share options 130 153 

Average number of ord. shares for calculation of diluted earnings per share 20 815 18 495 

Diluted earnings per share (NOK per share) 2.91 2.18 

67


Note 24 Events after the balance sheet day 

There has not been any events after balance sheet day that are of any influence of the results presented. Proposed note approved 

dividend to shareholders is MNOK 22.5, an amount of NOK 1 per share. In February 2007 TTS purchased all the shares in ICD Projects AS 

with a total of 6 employees. The company develops and delivers software- and steering systems to offshore handling systems. 

The company’s turnover in 2006 was TNOK 8 148. 

In March 2007, TTS bought up its partner’s 50 per cent share in the manufacturing company in Korea. The company’s turnover in 2006 

was TNOK 33 006, with a loss of TNOK 2. Half of this loss is presented as finacial loss. 

In March 2007, TTS Port Equipment AB acquired technology for port terminal equipment that will further strengthen TTS’ position 

as leading supplier within this segment. 

Note 25 Exchange differences 


Exchange differences includes differences that as a result of translation of the financial reports of the foreign companies into NOK. 

At 01.01.2005 (1 678) 

Exchange differences 2005 

Corporate companies 1 599 

Joint ventures (2 062) 

At 31.12.2006 (2 141) 

Exchange differences 2006 

Corporate companies 7 329 

Joint ventures (286) 

At 31.12.2006 4 902 

Note 26 Other fixed asset investment 


Other fixed asset investment includes: 


Loans to joint ventures 5 456 1 639 

Loan to Fast Ship 5 830 5 830 

Deposit 896 319 


Note 27 Contingencies 

There are not expected to be essential obligations associated with contingencies other than what is reflected in the profit and loss 

and balance sheet. Ref. note 21 

Note 28 Government grants 

TTS has through parent company and two subsidiaries received 3 grants from public institutions to research and development 

activites that is approved under the public institutions SKATTEFUNN. The companies have received a total of TNOK 793. 

68


Profit and loss account 



(AMOUNTS IN NOK 1000) NGAAP NGAAP 


OPERATING INCOME NOTES 

Income from projects 286 417 243 377 

Other operating income 1 427 2 431 

Group contribution from TTS - subsidiaries 9 550 6 428 

Total operating income 297 394 252 236 

OPERATING EXPENSES 

Cost of sales 183 015 162 885 

Personell costs 3, 4 80 366 69 076 

Depreciation 5, 6 4 915 4 755 

Losses on accounts receivable 9 - - 

Other operating costs 16 33 489 29 263 

Total operating expenses 301 785 265 979 

Operating profit/loss (4 391) (13 744) 

FINANCIAL INCOME AND EXPENSES 

Income from investments in subsidiaries 8 61 748 43 599 

Income from investments in joint ventures 8 (458) (772) 

Interest received from group companies 18 3 359 1 406 

Other interest income 18 - - 

Other financial income 18 703 365 

Interest paid to group companies 18 - 50 

Other interest expenses 18 12 240 7 228 

Other financial expenses 18 2 136 1 482 

Net financial items 50 977 35 838 

Profit/loss before tax 46 587 22 094 

Tax 12 (3 499) (4 773) 

Net profit for the year 50 086 26 867 

71


Balance 


ASSETS 


31.12.06 31.12.05 

Fixed assets NOTES 

Deferred tax assets 12 31 648 28 148 

INTANGIBLE FIXED ASSETS 

Research and development 6 4 530 2 000 

Goodwill 6 19 815 21 308 

Total intangible fixed assets 24 345 23 308 

TANGIBLE FIXED ASSETS 

Machinery and vehicles 5 1 447 1 364 

Furniture and office equipment 5 6 313 8 190 

Total tangible fixed assets 7 760 9 554 

FIXED ASSET INVESTMENTS 

Investments in associated companies 8 397 039 281 446 

Loans to companies in the same group 8 7 631 8 454 

Investments in associated companies 22 082 68 280 

Investments in shares and units 7 13 548 13 548 


Total fixed asset investments 472 042 406 214 

Total fixed assets 535 795 467 224 


Inventories 2 26 223 25 016 

Work in progress 2 - 534 

ACCOUNTS RECEIVABLE 

Receivables from customers 9 55 774 45 226 

Intragroup accounts receivables 34 386 23 491 


Other intragroup receivables 7 698 1 263 

Accrued, non-invoiced production 1 122 373 92 287 


Total receivables 285 089 193 859 

Bank deposits, cash in hand, etc. 13 28 648 2 650 

Total current assets 339 961 222 059 

Total assets 875 755 689 428 

72

EQUITY AND LIABILITIES 


31.12.06 31.12.05 

EQUITY 

CALLED-UP AND FULLY PAID SHARE CAPITAL NOTES 

Share capital 14 11 246 10 058 

Company’s own shares 14 (3) (4) 

Share premium account 318 550 284 761 

Total called-up and fully paid share capital 329 794 294 815 

RETAINED EARNINGS 

Valuation variance fund 123 497 50 674 

Other reserves 90 004 24 444 

Total retained earnings 213 500 75 11 

Total equity 543 294 369 933 

LIABILITIES 

PROVISIONS FOR LIABILITIES AND CHARGES 

Pension obligations 4 3 854 5 301 

Total provisions for liabilities and charges 3 854 5 301 

OTHER LONG-TERM LIABILITIES 

Debt to financial institutions 10, 11 146 329 57 096 

Total other long-term liabilities 146 329 57 096 

CURRENT LIABILITIES 

Debt to credit institutions 10, 11, 13 0 127 160 

Payables to suppliers 23 012 23 354 

Unpaid government taxes 6 078 6 075 

Prepayments from customers 1 54 131 22 116 

Non-invoiced production costs, suppliers 61 751 64 009 

Avsatt til utbytte 22 494 0 

Other intragroup liabilities 77 190 

Other current liabilities 15 14 736 14 195 

Total current liabilities 182 279 257 098 

Total liabilities 332 462 319 495 

Total equity and liabilities 875 755 689 428 



Nils Olav Aardal Anne Breive Hilde P. Aarseth Krøgenes John M. Lunde 

CHAIRMAN DIRECTOR DIRECTOR DIRECTOR 

Olav Smedal Oddmund Hatletun Johannes D. Neteland 

DIRECTOR DIRECTOR PRESIDENT & CEO 

73


Consolidated equity statement 


Share Valuation 

Share Own premium- variance Other 

(AMOUNTS IN NOK 1000) capital shares reserve fond equity Total 

Equity as of 1 January 2006 10 058 -4 284 761 50 674 24 444 369 933 

Depreciation of share premium account -100 000 100 000 0 

Company’s own shares 0 1 0 0 628 629 

New issue 1 189 0 137 415 0 0 138 604 

Cost of new issue 0 -4 604 0 0 -4 604 

Cost of share option 0 0 978 0 0 978 

Currency differences concerning equity method 0 0 0 0 10 162 10 162 

Dividends 0 0 0 0 -22 493 -22 493 

Net profit for the year 0 0 0 72 823 -22 738 50 086 

Equity as of 31 December 2006 11 246 -3 318 550 123 497 90 004 543 294 

74




(AMOUNTS IN NOK 1000) 2006 2005 

Cash flow from operations 

Net profit for the year 46 586 22 094 

Income from investments in subsidiaries -61 748 -43 599 

Depreciation 4 915 4 755 

Gains/losses on the sale of tangible fixed assets 0 -68 

Net change in provisions for liabilities and charges 0 -20 164 

Profit attributable to associated companies 458 772 

Foreign currency gains/losses on loans -3 016 10 705 

Difference between pension charges and payments to/from pension schemes -1 447 -682 

Inventories -673 1 360 

Customer receivables and other receivables 21 467 15 362 

Payables to supplies and other short-term liabilities -43 791 -3 751 

Net cash flow from operations -37 249 -13 216 

Cash flow from investments 

Acquisition of subsidiaries (less cash balances in subsidiaries) -40 000 -8 500 

Receipts from sale of tangible fixed assets 0 101 

Disbursements for acquisition of tangible fixed assets -4 159 -5 208 

Receipts on other claims (loans) 49 767 7 219 

Increase in long-term receivables -11 768 -76 734 

Payments on other claims (loans) -27 181 -3 788 

Net cash flow from investments -33 341 -86 910 

Cash flow from financing 

Receipts from new short-term/long-term debt 100 000 51 522 

Disbursements for repayment of short-term/long-term debt -10 767 -12 708 

Payment to group company -113 -4 912 

Net change in bank overdraft -127 160 -26 191 

Paid-in equity 134 628 94 855 

Net cash flow from financing 96 588 102 566 

Effect of exchange rate fluctuations on cash balances and cash equivalents 

Net change in cash and cash equivalents 25 997 2 440 

Cash and cash equivalents at the start of the period 2 651 211 

Cash and cash equivalents at the end of the period 28 648 2 651 

This consists of: 

Bank deposits etc. 28 648 2 651 

75


Accounting principles 


The financial statements have been prepared in accordance with The 

Norwegian Accounting Act of 1998 and generally accepted accounting 

principles. 

Subsidiaries, associated companies 

Subsidiaries are valuated according to the equity method in the annual 

accounts. The parent company’s share of the result is based on the 

invested companies’ post-tax result after allowing for internal gains and 

possible depreciation of any additional value arising because the cost 

price of the shares was higher than the acquired share of the book 

equity. In the profit and loss account, the share of the profit is posted 

under financial items, while the assets in the balance sheet are posted 

under financial assets. 

Also associated companies (joint ventures) are included in the accounts 

in accordance with the cost method. This means that the result is 

included as financial income and portion of equity is included under 

financial assets. 

Operating income 

Operating income includes income on delivered products and services 

granted over the year. For long-term contracts with partial invoicing, 

parts of expected future profits are entered as current income in correlation 

with the progress of the project. All loss on long-term production 

contracts is expensed when the loss is demonstrated. In addition, 

reference is made to work in progress included as a separate subject. 

Classification and valuation of balance sheet items 

Current assets and short term liabilities include items which fall due 

within one year of the end of the financial year, as well as items related 

to the operating cycle. Other items are classified as fixed assets/longterm 

liabilities. 

Current assets are valued at the lowest of cost and market value. 

Short-term liabilities are posted in the balance sheet at the nominal 

value at the time of initial establishment. 

Fixed assets are recorded at cost, but are written down to net 

realiz able value if the diminution in value is not expected to be 

tempo rary. Long-term liabilities are posted in the balance sheet at 

the nominal value at the time the initial establishment. 

Accounts receivables 

Trade debtors and other accounts receivables are recorded in the balance 

sheet at their nominal value reduced by a provision for bad debts. The 

provisions are made on the basis of an individual assessment of each 

balance. In addition, an unspecified provision is made to cover expected 

losses. 

Inventory 

Inventory of purchased goods is valued at the lower of acquisition cost 

according to the FIFO principle and real value. Depreciation is applied 

for foreseeable obsolete inventory. 

Fixed assets 

Fixed assets are booked on the balance sheet and depreciated over 

the asset’s life span if the expected life span exceeds 3 years and has 

a cost price higher than NOK 15 000. Direct maintenance of assets is 

76 

expensed as incurred under operating expenses, while renovation or 

upgrading is added to the asset’s cost price and is depreciated in line 

with the asset. 

Pensions 

The company has a defined-benefit pension. The pension expenses and 

pension commitments are calculated on a straight-line earning profile 

basis, based on assumptions relating to discount rates, projected salaries, 

the amount of benefits from the National Insurance Scheme, future 

return on pension funds, and actuarial calculations relating to mortality 

rate, voluntary retirement, etc. Pension funds are valued at net realizable 

value and deducted in the net pension commitment in the balance sheet. 

Changes in the commitment due to changes in the pension plans are 

written down over the expected remaining service period. The same 

applies to estimated differences if they exceed 10 % of the largest of the 

pension commitment and pension funds (corridor). 

Social security fees are expensed on basis of pension premiums paid 

for pension schemes and accrued changes in net pension commitment . 

Taxes 

The tax expense in the profit and loss account includes both the current 

tax payable and change in deferred tax. Deferred tax is estimated to 

28 % based on the temporary changes between taxation and accounting 

values, as well as tax losses carried forward to the end of the fiscal 

year. Tax-increasing and tax-reducing temporary differences which are 

reversed, or could be reversed, during the same period are offset against 

each other and recorded as a net sum. Temporary changes are only 

assessed for the Norwegian companies. 

Foreign currency 

Items in foreign currency are converted to NOK at the exchange rate on 

the balance sheet date. For future contracts, forward rates are used. 

Future contracts ensuring trade debtors, accrued operating income 

and/or trade creditors are converted to an average rate of exchange for 

all future contracts in connection with each individual long-term project. 

Work in progress 

Profits on work in progress is estimated according to percentage of completion 

method. TTS uses the Norwegian Accounting Standard for longterm 

production contracts, and income is therefore posted according to 

the degree of completion for each project. Income on smaller deliveries 

with short production lead time and contracts where own added value 

is limited is recognized at delivery. 

Each project is evaluated individually. Projects with net, completed but 

not billed orders are posted as accounts receivables, and projects where 

advance payment from clients exceeds the completed order is posted 

as a liability. Completed orders are classified as operating income in the 

profit and loss account. 


The cash flow statement has been prepared according to the indirect 

method. Cash and cash equivalents include cash, bank deposits, and other 

short term investments which immediately and with minimal exchange 

risk can be converted into known cash amounts, with due date less than 

three months from purchase date.

Notes 


Note 1 Construction contracts 


Current assets 2006 2005 



Accrued, non-invoiced production 122 373 92 287 


Total current assets related to contruction contracts 177 336 120 069 

Current liabilites 



Prepayments from customers -54 131 -22 116 

Non- invoiced production cost -61 751 -64 009 

Total current liabilities related to construction contracts -115 883 -86 125 

Note 2 Inventories 



Inventories, incl. non-current 33 675 32 635 

Non-current inventories -7 452 -7 619 

Total inventories 26 223 25 016 

Work in progress 0 534 

Book value of inventories pledged as security for liabilities 26 223 25 550 

Note 3 Personnel expenses, number of employees, other remunerations, loans to employees, etc. 


Payroll expenses 2006 2005 

Salaries 62 460 53 308 

Employer’s social security contribution 9 661 9 694 

Pension costs 3 726 3 242 

Other benefits* 4 519 2 832 

Total personnel expenses 80 366 69 076 

Number of employees as of 31 December 141 118 

Remuneration to board members 2006 

Nils Aardal (Board Chairman from 30.05.06) 268 

Einar Pedersen (Board Chairman to 30.05.06) 129 

Anne Breive 170 

Hilde P. AA. Krøgenes 170 

John M. Lunde 170 

Olav Smeland (from August 2006) 21 

Mona L. Tellnes Halvorsen (to August 2006) 47 

Oddmund Hatletun 50 

77


Nomination committee remuneration 

TTS’s nominations committee comprises the following members: Bjørn Olafsson (Chairman), Bjørn Sjaastad and Harald Espedal. 

Proposed remuneration 2006 is TNOK 30 to the chairman, and TNOK 20 to members, a total of TNOK 70. 

STATEMENT REGARDING THE STIPULATION OF REMUNERATION AND OTHER BENEFITS FOR THE PRESIDENT & CEO AND OTHER EXECUTIVES 

The remuneration policy of TTS Marine ASA is based on offering the group management competitive conditions. 

The level of remuneration shall reflect that the company is a listed company focusing internationally. 

The annual remuneration is based on the group management taking part in the company’s results, and in the added value for the shareholders 

through increased company value. 

Remuneration consists of three main components; base salary, bonus and a share option program. 

Bonus is determined on the basis of target results. In certain circumstances where change and development are of a decisive nature, 

the bonus is further based on specific development targets. Bonus targets are revisited annually. 

The maximum bonus is one year’s base salary for the President & CEO, and up to 50 percent for other executives. 

Since 1998, a share option program has been active for the group management of TTS; the goal being that the group management shall have 

the same incentive as the shareholders in respect of increasing company value over time. The Annual General Meeting has each year given 

the Board authority to establish share option programs with a two year term. Redemption price equals market price on allotment. 

First exercise is 50 percent after one year. Thereafter 12.5 percent per quarter, in addition to share options that have not been previously exercised. 

Share options may not be exercised subsequent to the second anniversary. 

The group pension scheme in Norway is based on approximately 65 percent of base salary at the age of 67, limited to a maximum of 12G. 

For employees abroad, the schemes prevailing in the respective companies where they are employed apply. 

The period of notice is 6 months with a severance pay from 6 to 24 months, period of notice inclusive. 

The share option program is conditional upon the Annual General Meeting’s approval, based on the Board being granted authority to make such 

allotments. The President & CEO’s remuneration is determined by the Board of TTS Marine ASA. 

With respect to other executives, their remuneration is determined by the boards of the respective subsidiaries/President & CEO. 

REMUNERATION AND OTHER BENEFITS FOR THE PRESIDENT & CEO AND OTHER EXECUTIVES 

Name Position Remuneration Other Bonus Share- Pension 

benefits paid options Total benefits 

Johannes D. Neteland President & CEO 1 456 151 680 2 341 4 627 632 

Olav Bruåsdal Financial Director 984 17 191 936 2 128 247 

Ivar K. Hanson Man. Director MC 1 095 107 160 936 2 298 62 

Hans-Jan Erstad Manager HR-IT-QA 641 102 4 936 1 683 119 

Göran K. Johansson Man. Director PMH 1 395 14 581 936 2 927 482 

Stellan Bernsro Man. Director DCH 922 15 0 0 937 275 

Edgar Bethmann Man. Director DM 1 186 142 0 0 1 328 121 

Remuneration Taxable remuneration 

Other benefits Free car, life insurance, telephone, newspapers etc. 

Bonus paid Bonus paid in current year 

Share options Difference between market price and exercise price 

Total Total taxable remuneration 

The pension premium for the President & CEO is based on pension payments of approximately 65 percent of his base salary from the age of 67, 

for the CFO approximately 65 percent of a maximum of 12G. In addition, an early retirement scheme from the age of 60 that pays approximately 

60 percent of base salary is established. With effect from 2007, the group pension scheme will be based on approximately 65 percent of base 

salary at the age of 67, limited to a maximum of 12G. Additional pension benefits will be adjusted similar to other benefits. 

The period of notice for the President & CEO is 6 months, with a severance pay of 24 months, period of notice inclusive, and from 6 to 24 months 

for other group executives. 

AUDITOR FEES 


Statutory auditing 769 705 

Other assistance including tax consulting 661 159 

Total 1 430 864 

78

Note 4 Pension 


The Norwegian companies in the group have defined benefit pension schemes that entitle the employees to defined future pension benefits 

dependent on the number of years of service, salary level, retirement age and National Insurance benefits received. 

The pension scheme includes 120 persons as of 31 December 2006. 

Net pension funds recorded on the balance sheet 

are determined as follows: 2006 2005 


Market value of pension funds 25 743 0 25 743 24 181 0 24 181 

- Net present value of accrued pension obligations -30 186 -1692 -31 878 -29 614 -1 112 -30 726 

+ Unrecognised estimate changes and deviations 2 162 222 2 384 1 865 82 1 947 

+ Unrecognised costs related to pension benefits 

earned in prior periods 0 0 0 0 0 0 

- Accrued employer’s share of NI contributions 0 103 103 558 145 703 

= Net pension obligation -2 281 -1 175 -3 854 -4 126 -1 175 -5 301 

Net pension costs are determined as follows: 2005 2004 


Net present value of current year’s 

pension benefits accrued 2 795 240 3 035 2 558 218 2 776 

+ Interest payable on pension obligations 1 461 56 1 516 1 411 41 1 452 

- Expected return on pension funds -1 541 0 -1 541 -1 405 0 -1 405 

+ Recognised estimate changes and deviations 319 0 319 319 1 320 

+ Change in employer’s share of NI contributions 79 24 103 77 22 99 

+ Tap ved reduksjon av pensjonsordning 0 0 0 0 0 0 

= Total costs, including payroll expenses 3 406 320 3 725 2 960 282 3 242 

Change in book value of funds: 2006 2005 


- Costs recognised during the year (see above) -3 725 3 242 

+/- Pension payments and payment of pension premiums 5 172 3 924 

= Book value as of 31 December -3 854 -5 301 

The following economic assumptions have been made for 

calculation of the pension obligations: 2006 2005 

31.12. 1.1 31.12. 1.1 

Return on pension funds 5.40 % 5.5 % 5.5 % 6.0 % 

Discount rate 4.35 % 4.5 % 4.5 % 5.0 % 

Annual wage inflation 4.50 % 3.0 % 3.0 % 3.0 % 

Annual adjustment of the basic National Insurance amount (G) 4.25 % 2.0 % 2.0 % 2.0 % 

Annual adjustment of pensions being paid out 1.65 % 2.0 % 2.0 % 2.0 % 

Voluntary retirement 10.00 % 10.0 % 10.0 % 10.0 % 

Withdrawal tendency for early retirement (AFP) 45.00 % 45.0 % 45.0 % 45.0 % 

Employer’s share of National Insurance contributions 14.10 % 14.1 % 14.1 % 14.1 % 

79


Note 5 Tangible fixed assets 


Furniture 

Machinery and office Computer 

and vehicles equipment equipment Total 


Historical cost as of 1 January 6 328 4 502 5 883 16 713 

Accumulated depreciation as of 1 January -4 768 -3 435 -5 838 -14 041 

Book value as of 1 January 1 560 1 067 45 2 672 


Book value as of 1 January 1 560 1 067 45 3 624 

Additions during the year 343 430 9 404 10 177 

Disposals during the year -33 0 0 -33 

Depreciation for the year -506 -435 -2 322 -3 263 

Book value as of 31 December 1 364 1 062 7 127 9 553 


Acquisition cost as of 31 December 6 421 4 932 15 287 26 640 

Accumulated depreciation as of 31 Dec. -5 057 -3 870 -8 160 -17 087 



Book value as of 1 January 1 364 1 062 7 127 9 553 

Additions during the year 589 959 81 1 629 

Disposals during the year 0 0 0 0 

Depreciation for the year -506 -521 -2 395 -3 422 



Historical cost as of 31 December 7 010 5 891 15 368 28 269 

Accumulated depreciation as of 31 Dec. -5 563 -4 391 -10 555 -20 509 


Property in the Norwegian companies has been pledged as security for long-term and short-term debt to credit institutions, see Note 11. 

Note 6 Intangible fixed assets 


R&D, patents, licences Goodwill Total 




Book value as of 1 January 0 22 800 22 800 


Book value as of 1 January 0 22 800 22 800 

Translation differences 0 0 0 



Depreciation for the year 0 -1 493 -1 493 

Book value as of 31 December 0 21 307 23 307 


Acquisition cost as of 31 December 3 020 26 104 29 124 







Depreciation for the year 0 -1 493 -1 493 



Historical cost as of 31 December 5 550 26 105 31 655 



80

Note 7 Shares in other companies 


Ownership interest Historical cost Book value 

Fixed assets 

Shin Young Heavy industry 13.4 % 222 222 

FastShip Inc. * 6.7 % 13 326 13 326 

Total shares in other companies 13 548 13 548 

*) In the balance sheet as of 31 December the company has recorded 615 156 shares in FastShip Inc (FSI) at a book value of NOK 13.3 million. 

In addition, three convertible loans have been recorded at NOK 5.8 million, which corresponds to 408 257 shares. Shares and convertible loans 

have been recorded at USD 2.8 and USD 2.04 per share, respectively, which corresponds to an average of USD 2.5 per share. TTS has been involved 

in the FastShip project since 1996. Provided the project is realised, TTS will through patented technology get contracts of a total value over 

NOK 1.000 million. If the FSI project is not realised, and TTS must write off NOK 19.2 million, the equity will be reduced with the total amount. 

The write off will not affect the liquidity. See also the discussion in the Directors’ Report. 

Note 8 Subsidiaries 


Acquisition Ownership Voting 

Subsidiaries Registered office date interest share 

TTS Handling Systems AS Drøbak, Norway 1994 100 % 100 % 

TTS Ships Equipment AS Bergen, Norway 1996 100 % 100 % 

Norlift AS Bergen, Norway 1994 100 % 100 % 

Hydralift Marine AS Kristiansand, Norway 2003 100 % 100 % 

TTS Ships Equipment AB Gothenburg, Sweden 2002 100 % 100 % 

TTS Marine Shanghai Co Ltd Shanghai, China 2002 100 % 100 % 

TTS Marine Cranes AS Bergen, Norway 2006 100 % 100 % 

Associated companies 

TTS Bohai Machinery Co., Ltd Dalian, China 2005 50 % 50 % 

Companies are accounted for in accordance with the equity method. 

TTS HS Norlift TTS SE AS TTS SE AB TTS Ma.Sh. TTS Cranes Total 

Historical cost at time of acquisition 9 589 500 14 232 303 180 1 386 328 887 

Of which goodwill 7 129 255 163 2 053 264 345 

Of which excess value -453 -453 

UNAMORTISED EXCESS VALUE/GOODWILL AS OF 31 DECEMBER 

Goodwill 4 585 220 288 1 899 226 772 

Amortisation of GW -424 -11 328 -103 -11 855 

Unamortised goodwill as of 31 December 0 0 4 161 208 960 1 796 214 918 

CALCULATION OF PROFIT FOR THE YEAR 

Share of profit/loss for the year -1 317 20 2 514 69 170 3066 73 453 

Amortisation of goodwill -424 -11 327 -103 -11 855 

Elimination of intragroup transactions 150 0 150 

Income from investments in subsidiaries -1 167 20 2 090 57 843 2 963 61 749 

SHARES IN SUBSIDIARIES: 

Opening balance 1 January 3 580 361 16 865 261 645 -1 006 281 445 

Additions associated companies/subsidiaries 0 0 0 0 0 40 000 40 000 

Disposals subsidiaries 0 0 0 0 3 319 3 319 

Income from investments in subsidiaries -1 676 20 2 090 57 842 2964 61 748 

Foreign currency effects 0 0 0 10 500 27 10 526 

Closing balance 31 December 2 413 380 18 955 329 987 5 303 40 000 397 039 

TTS Bohai 

SHARES IN JOINT VENTURES Machinery Co., Ltd 

Opening balance 1 January 8 454 

Acquisition/Start-up of the company 0 

Share of profit/loss -458 

Dividends 0 

Forgiveness of debt 0 

Effect of foreign currencies -364 

Disposal of shares in associated companies 0 

Closing balance 31 December 7 631 

81


Note 9 Customer and other receivables 



Receivables from customers 57 174 46 226 

Receivables from internal customers 34 386 23 491 

Write-down for losses incurred on receivables from cust. -1 400 -1 000 

Net receivables from customers 90 160 68 717 

RECEIVABLES THAT MATURE AFTER MORE THAN ONE YEAR 


Loans to companies in the same group 22 082 68280 

Total 27 912 74 110 

TTS Marine ASA has a convertible loan of NOK 5 830 000 related to FastShip Inc., see Note 7. 

There are no credit risk concentrations within the receivables from customers since the company has many customers distributed throughout 

a number of countries. 

Note 10 Long-term liabilities 


REPAYMENT PROFILE AND MATURITY 

Balance as of 2012 

31 December 2006 2007 2008 2009 2010 2011 and later 

Long term liabilities 146 329 11 269 11 270 109 726 9 045 5 019 0 

Foreign Interest Instalment Book 

Specification of loans 


Type of loan currency rate Maturity terms value 

Nordea Mortgage loan NOK Nibor+1.35 % 2011 4 per year 32 150 

Nordea Mortgage loan NOK Nibor+1.35 % 2009 4 per year 100 000 

Elcon Finans Other long-term NOK 4.30 % 2009 12 per year 214 

Norfund Mortgage loan NOK 4.48 % 2011 4 per year 9 048 

SG Finans Other long-term NOK 4.50 % 2008 12 per year 4 918 

Total 146 329 

See Note 11 for security for long-term debt. 

Note 11 Assets pledged as security and guarantees 


The credit agreement for TTS Marine ASA in Norway was established (50/50) with Nordea Norge ASA (Nordea) and Sparebanken Vest 

(SparebankenVest), and Nordea is the agent. As security for the company’s participation in the cash pool account system and the group’s 

guarantee limit system, the following assets in Norway have been pledged as security to Nordea. 


Secured debt 146 329 184 256 

Assets at book value 

Customer/intragroup receivables 107 754 73 790 

Non-invoiced production 122 373 92 287 

Inventories/work in progress 26 223 25 550 


Property 0 - 

Total assets pledged as security 311 313 219 409 

In addition, leases in Norway including machinery and plant, as well as shares in TTS Ships Equipment AB, have also been pledged as security. 

The nominal value of the mortgage bond is NOK 200 000 000. 

The group has also undertaken to meet the following financial strength requirements for Nordea: There is a requirement that the equity shall 

be greater than NOK 350 million at any time. In addition the equity ratio shall be greater than 30 per cent as of 31 December. With equity of 

NOK 598.1 million and an equity ratio of 36.6 per cent, the group meets these requirement. 

GUARANTEE COMMITMENTS, JOINT AND SEVERAL LIABILITY 

The companies in Norway, as well as TTS Ships Equipment AB and TTS Ships Equipment GmbH, participate in a guarantee pool system that covers 

payment guarantees, contract guarantees, advance payment guarantees and tax guarantees within a total limit of NOK 100 000 000. As security 

for this guarantee pool, the Norwegian companies’ inventories, accounts receivable, leases including machinery and plant and the credit balance on 

advance payment accounts have been pledged. The companies in Norway are jointly and severally liable. 

Total drawdown in the guarantee pool as of 31 December was TNOK 99 270 for the group. 

82

Note 12 Taxes 


Change in deferred tax assets and deferred taxes: 

1.1.2005 Changes 2005 31.12.2005 Changes 2006 31.12.2006 

DEFERRED TAXES 

Fixed assets 1 797 422 2 219 67 2 286 

Accounts receivable 209 -195 15 -15 0 

Construction contracts 7 077 2 828 9 905 3 427 13 332 

Other temporary differences -1 027 339 -688 688 0 

Total deferred taxes 8 056 3 394 11 451 4 168 11 763 

DEFERRED TAX ASSETS 

Accounts receivable 0 0 0 -392 -392 

Inventories -1 675 191 -1 484 -649 -2 133 

Pension funds -1 853 -280 -2 133 1 054 -1 079 

Other provisions for liabilities and charges 0 0 0 -573 -573 

Total deferred tax assets -3 528 -89 -3 617 -561 -2 133 

Net deferred taxes 4 528 3 305 7 834 3 607 11 441 

Tax credit deduction carryforward -6 182 0 -6 182 0 -6 182 

Tax allowance carryforward -1 260 0 -1 260 0 -1 260 

Tax loss carryforward -22 108 -8 844 -30 952 -7 387 -38 339 

Net deferred tax assets -25 022 -8 844 -30 952 -3 779 -34 339 

Excess allocation 387 765 1 152 279 1 431 

Unrecognised deferred tax assets 

related to allowance 1 260 0 1 260 0 1 260 

Net deferred tax assets on the balance sheet -23 375 -4 771 -28 146 -3 500 -31 648 

The deferred tax assets related to tax loss carryforwards are recognised on the balance sheet when the management believes that it is 

probable that the company can apply this against future taxable income. 

Specification of differences between the financial profit before tax and the tax basis for the year: 2006 2005 

Pre-tax profit/loss 46 587 22 094 

Permanent differences -1 207 -733 

Change in the assessment in relation to previous year’s accounts 0 0 

Change in temporary profit/loss differences -10 154 -11 807 

Reversed share of profit/loss in subsidiaries -61 290 -42 827 

Application of tax loss carryforward 0 0 

Tax basis for the year -26 064 -33 272 

Breakdown of the tax charge: 

Tax payable 0 0 

Effect of group contribution on deferred taxes 0 0 

Effect of too little allocated deferred tax assets 0 0 

Effect of foreign exchange fluctuations 0 0 

Change in deferred taxes -3 499 -4 773 

Tax charge -3 499 -4 773 

Tax payable on the balance sheet: 

Tax payable 0 0 

Tax effect of group contributions 0 0 

Tax payable on balance sheet 0 0 

Explanation of why the tax for the year is not 28 % of the profit before tax: 

28 % of the profit before tax 13 044 6 186 

Too little/much allocated deferred taxes 956 1 300 

Permanent differences, including amortisation of goodwill -17 499 -12 258 

Estimated tax charge -3 499 -4 773 

83


Note 13 Liquid assets / short-term interest-bearing liabilities 



Bank deposits, cash, etc. as of 31 December 

Deposits(+)/withdrawals(–) in the cash pool 

4 239 2 650 

account system as of 31 December 24 409 -127 160 

TTS Marine ASA administers a cash pool account system. The group has been granted a credit limit for the group of NOK 100 000 000. 

The companies that participate in the scheme are jointly and severally liable for the total limit. 

Note 14 Share capital and shareholder information 

Number of shares as of 31 Dec. Nominal value Book value of share capital 

22 492 904 0.50 11 246 452 

THE FOLLOWING COMPANIES ARE INCLUDED IN THE TTS MARINE GROUP: 


Company Owner Ownership interest Share capital Number of shares 

Norlift AS (formerly TTS Eiendom AS) TTS Marine ASA 100 % NOK 500 000 500 

TTS Handling Systems AS TTS Marine ASA 100 % NOK 950 000 95 000 

TTS Ships Equipment AS TTS Marine ASA 100 % NOK 2 500 000 2 500 

Hydralift Marine AS TTS Marine ASA 100 % NOK 100 000 1 000 

TTS Ships Equipment AB TTS Marine ASA 100 % SEK 2 000 000 2 000 

TTS Marine Shanghai Co. Ltd. TTS Marine ASA 100 % USD 200 000 3 500 

TTS Ships Equipment GmbH TTS Ships Equipment AB 100 % EUR 255 646 5 000 

TTS Inc. TTS Ships Equipment AB 100 % USD 190 000 1 900 

TTS-LMG Marine Cranes GmbH TTS Ships Equipment AB 100 % EUR 25 000 1 

TTS Liftec Oy TTS Ships Equipment AB 100 % EUR 76 500 1 020 

TTS Port Equipment AB TTS Ships Equipment AB 100 % SEK 100 000 1 000 

TTS Kocks GmbH TTS Ships Equipment AB 100 % EUR 1 000 000 1 000 

TTS Kocks Ostrava s.r.o. TTS Ships Equipment AB 100 % EUR 310 291 1 000 

TTS Marine S.r.l TTS Ships Equipment AB 100 % EUR 10 400 1 000 

TTS Marine Cranes AS TTS Marine ASA 100 % NOK 1 000 000 1 000 

THE LARGEST SHAREHOLDERS IN TTS MARINE ASA AS OF 31 DECEMBER 2006 WERE: 


Shareholder Number of shares Ownership interest Voting share 


Morgan Stanley and Co. Intl.Limited 2 575 407 11.45 % 11.45 % 


IF Skadeforsakring AB 1 316 400 5.85 % 5.85 % 


Bank of New York, Brüssels brance 843 483 3.75 % 3.75 % 




Stichting Shell Pensionfonds 288 256 1.28 % 1.28 % 


DnB Nor SMB 222 600 0.99 % 0.99 % 

Lectio AS 189 200 0.84 % 0.84 % 

JPMorgan Chase Bank 180 000 0.80 % 0.80 % 



Arne Ketil Kyrkjebø 154 400 0.69 % 0.69 % 



Alden AS 125 800 0.56 % 0.56 % 

Total 20 largest shareholders 19 861 139 88.30 % 88.30 % 

Total others 2 631 765 11.70 % 11.70 % 

Total 22 492 904 100.00 % 100.00 % 

84

Board member Oddmund Hatletun had 1 493 shares, Board member Olav Smeland had 800 shares, while President & CEO Johannes D. Neteland 

had 82 500 shares and options to purchase 137 500 shares. 

On 30 May 2006 the Annual General Meeting resolved to grant the Board authority to issue a maximum of 4 000 000 shares in the event of 

an acquisition or merger. This authorisation is valid until the Annual General Meeting for 2006, and no later than 30 June 2007. As a result of 

acquisitions completed, a total of 2 039 300 shares were issued as of 7 December 2006. 

As of 31 December 2006, 112 500 options were allotted that can be exercised until 9 June 2007 at a price of NOK 26 5 (from an authorisation for 

a total of 300 000 options granted at the Ordindary General Meeting of 9 June 2005). In addition to 340 000 options that can be exercised until 

30 May 2008 at a price of NOK 35. (from an authoristion for a total of 340 000 options granted at the Ordinary General Meeting of 30 May 2006). 

THE DISTRIBUTION OF OPTIONS IS AS FOLLOWS: 

No. of No. of 

options that options that 

can be exercised can be exercised 

Name Position Company until 6/09/07 Price until 6/09/07 Price Total 

Johannes D. Neteland President & CEO TTS Marine ASA 37 500 26.50 100 000 35.00 137 500 

Olav Bruåsdal Financial director TTS Marine ASA 15 000 26.50 40 000 35.00 55 000 

Hans-Jan Erstad Chief of staff TTS Marine ASA 15 000 26.50 40 000 35.00 55 000 

Göran K. Johansson Division Director TTS Port Equipment AB 15 000 26.50 40 000 35.00 55 000 

Bjørn O. Hansen Proj. director TTS Handling Systems AS 15 000 26.50 0 0 15 000 

Ivar K. Hanson Division director TTS Marine ASA 15 000 26.50 40 000 35.00 55 000 

Stellan Bernsro Managing Director TTS Ships Equipment AB 0 0 40 000 35.00 40 000 

Edgar Bethman Division Director TTS Kocks GmbH 0 0 40 000 35.00 40 000 

Total number of options to leading employees 112 500 340 000 452 500 

Share options exercised in 2006 resulted in the issue of a total of 337 500 shares. 150 000 of these shares were issued at NOK 14 per share, 

with a weighted average market price on the date of issue of NOK 37.00 per share. 187 500 shares were issued at NOK 26.50 per share, with 

a weighted average market price per share of NOK 45.44 on the date of issue. 

A resolution was adopted at the Annual General Meeting of 30 May 2006 to authorise the Board to purchase a maximum of 300 000 of the 

company’s own shares. This authorisation is valid until the Annual General Meeting for 2006, and no later than 30 June 2007. This authorisation 

has not been utilised as of 29 March 2007. 

In accordance with earlier authorisations for the purchase of the company’s own shares, TTS has purchased 70 000 shares and subsequently sold 

shares to the employees at a discounted price. As of 31 December 2006 the company held 6 700 of its own shares. 

In accordance with authorities granted by the Annual General Meeting in 2005 and 2006, TTS has issued share option programmes to its employees 

Through these programmes, TTS’ employees have a future right to purchase a number of shares at a strike price equal to the marked rate on the 

date that the share purchase programme was initiated. 

The option premium is estimated on the date of allotment using the Black & Scholes option pricing model (BS). 

The options have a maximum term of two years, with a possible first exercise after one year (50 percent), then (12.5 percent) per quarter, giving 

a weighted averaged of 15 months maturity which is employed in BS. The option premium is distributed over the option’s two-year term. 

Implied volatility is based on a combination of historic data and discretion. For options issued in 2005, a 25 percent volatility is used (historically 

23 percent), and for 2006, a 30 percent volatility (historically 31.2 percent). 

For 2005, a risk-free interest rate of 3.0 percent is used, and for 2006 a rate of 3.5 percent. For 2006, NOK 978 in option premium is charged as 

an expense classified as salary in the profit and loss account. 

Employers’ national insurance contribution is charged as an expense upon exercise of options. For 2006, NOK 858 million is charged as an expense 

classified as salary in the profit and loss account. 

Note 15 Other short-term liabilities 



Provisions for projects 2 747 4 642 

Other provisions 11 989 9 553 

Total short-term liabilities 14 736 14 195 

85


Note 16 Other operating expenses 



Rent, costs for premises 8 763 7 437 

EDP costs 2 615 60 

Marketing, travel 11 221 7 678 

Other 10 889 14 088 

Total other operating expenses 33 489 29 263 

Note 17 Related parties 

All the underlying subsidiaries (Note 9), joint ventures (Note 10), members of the Board (Note 4) and senior management are regarded 

as related parties. 

The group has carried out various transactions with underlying companies and joint ventures. All the transactions have been carried out 

at part of the ordinary operations and at arm’s length prices. 

Note 18 Financial items and foreign currency gains/losses 



Income from investments in subsidiaries 61 748 43 599 

Income from investments in associated companies -458 -772 

Other interest income 4 062 1 767 

Bank loans -12 240 -7 274 

Other financial expenses -1 412 -1 220 

Net foreign currency gains/losses -724 -261 

Total 50 977 35 840 

FOREIGN CURRENCY GAINS/LOSSES 

The foreign currency differences that are recognised in the profit and loss account are as follow: 


Foreign currency gains 7 054 5 620 

Foreign currency losses -7 778 -5 881 

Total -724 -261 

Foreign currency gains are included in other financial income in the profit and loss account, 

and foreign currency losses 

86

Auditor’s report 

2006 

To the Annual Shareholders' Meeting of TTS Marine ASA 

Auditor’s report for 2006 

PricewaterhouseCoopers AS 

Postboks 3984 – Dreggen 

5835 Bergen 

Telephone +47 02316 

Telefax +47 23 16 10 00 

We have audited the annual financial statements of TTS Marine ASA as of December 31, 2006, showing a profit of 

NOK 50 085 509 for the parent company and a profit of NOK 60 481 107 for the group. We have also audited the 

information in the directors' report concerning the financial statements, the going concern assumption, and the proposal 

for the allocation of the profit. The annual financial statements comprise the financial statements of the parent company 

and the group. The financial statements of the parent company comprise the balance sheet, the statements of income 

and cash flows, the statement of changes in equity and the accompanying notes. The financial statements of the group 

comprise the balance sheet, the statement of income and cash flows, the statement of changes in equity and the 

accompanying notes. The regulations of the Norwegian accounting act and accounting standards, principles and 

practices generally accepted in Norway have been applied in the preparation of the financial statements of the parent 

company. IFRSs as adopted by the EU have been applied in the preparation of the financial statements of the group. 

These financial statements are the responsibility of the Company’s Board of Directors and Managing Director. Our 

responsibility is to express an opinion on these financial statements and on other information according to the 

requirements of the Norwegian Act on Auditing and Auditors. 

We conducted our audit in accordance with laws, regulations and auditing standards and practices generally accepted 

in Norway, including standards on auditing adopted by The Norwegian Institute of Public Accountants. These auditing 

standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial 

statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the 

amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used 

and significant estimates made by management, as well as evaluating the overall financial statement presentation. 

To the extent required by law and auditing standards an audit also comprises a review of the management of the 

Company's financial affairs and its accounting and internal control systems. We believe that our audit provides a 

reasonable basis for our opinion. 

In our opinion, 

• the financial statements of the parent company have been prepared in accordance with the law and regulations and 

give a true and fair view of the financial position of the company as of December 31, 2006, and the results of its 

operations and its cash flows and the changes in equity for the year then ended, in accordance with accounting 

standards, principles and practices generally accepted in Norway 

• the financial statements of the group have been prepared in accordance with the law and regulations and give a true 

and fair view of the financial position of the group as of December 31, 2006, and the results of its operations and 

• its cash flows and the changes in equity for the year then ended, in accordance with IFRSs as adopted by the EU 

• the company's management has fulfilled its duty to produce a proper and clearly set out registration and 

documentation of accounting information in accordance with the law and good bookkeeping practice in Norway 

• the information in the directors' report concerning the financial statements, the going concern assumption, and the 

proposal for the allocation of the profit are consistent with the financial statements and comply with the law and 

regulations 

Bergen, March 29, 2007 

PricewaterhouseCoopers AS 

Geir Inge Lunde 

State Authorised Public Accountant (Norway) 

Note: This translation from Norwegian has been prepared for information purposes only. 

Kontorer: Arendal Bergen Drammen Fredrikstad Førde Hamar Kristiansand Mo i Rana Molde Måløy Narvik Oslo Stavanger Stryn Tromsø Trondheim Tønsberg Ålesund 

PricewaterhouseCoopers navnet refererer til individuelle medlemsfirmaer tilknyttet den verdensomspennende PricewaterhouseCoopers organisasjonen 

Medlemmer av Den norske Revisorforening | Foretaksregisteret: NO 987 009 713 

www pwc no 

87

Companies in the TTS Group 


Laksevågneset 12 

P.O. Box 32 Laksevåg 

NO-5847 Bergen 

Norway 

Tel: +47 55 94 74 00 

Fax: +47 55 94 74 01 

E-mail: info@tts-marine.no 

TTS Marine Cranes AS 




Norway 

Tel: +47 55 34 84 00 

Fax: +47 55 34 84 01 

E-mail: info@tts-mc.no 

Barstølveien 26 

Servicebox 602 

NO-4606 Kristiansand 

Norway 

Tel: +47 38 04 95 00 

Fax: +47 38 04 95 01 

E-mail: info@tts-mc.no 

TTS Marine 

Shanghai Co. Ltd. 

No. 433 Gao Xiang Huan Road 

GaoDong Industrial Park PuDong 

Shanghai 200137 

P.R.China 

Tel: +86 21 5848 5300 

Fax: +86 21 5848 5311 

E-mail: office@tts-marine.cn 

88 

TTS-LMG 

Marine Cranes GmbH 

Einsiedelstr. 6 

D-23554 Lübeck 

Germany 

Tel: +49 (0) 451 4501 730 

Fax: +49 (0) 451 4501 392 

E-mail: info@tts-lmg.de 

TTS Bohai 

Machinery Co. Ltd. 

Beihai Industry Park 

Sujia, Dalian Wan Street 

Dalian 

P.R.China 

Tel: +86 411 87112670 

Fax: +86 411 87112702 

E-mail: info@tts-bohai.com 

TTS Korea 

RM 625, Ocean Tower 

# 760-3 Woo 1-Dong 

Haeundae-Gu 

Busan 

Korea (612-726) 

Tel: +82 51 740 6081-3 

Fax: +82 51 740 6084 

E-mail: info@ttskorea.co.kr 

TTS Offshore Handling 

Equipment AS 

Larsgårdsvn 4 

P.O. Box 9 Servicebox 

N-6025 Ålesund 

Norway 

Tel: +47 7032 9260 

Fax: +47 7032 9261 

E-mail: info@tts-ohe.no 

TTS Ships Equipment AB 

Kämpegatan 3 

SE-411 04 Göteborg 

Sweden 

Tel: +46 31 725 79 00 

Fax: +46 31 725 78 00 

E-mail: info@tts-se.se 

TTS Ships 

Equipment GmbH 

Wachtstrasse 17-24 

D-28195 Bremen 

P.O. Box 103840 


Germany 

Tel: +49 421 3 35 84 0 

Fax: +49 421 3 35 84 98 

E-mail: info@tts-se.de 

TTS Ships Equipment AS 




Norway 

Tel: +47 55 11 30 50 

Fax: +47 55 11 30 60 

E-mail: info@tts-se.no 

TTS Hua Hai Ships 

Equipment Co. Ltd. 

18th floor 

3255 Zhou Jia Zui Road 

CN-200093 Shanghai 

P.R.China 

Tel: +86 21 6539 8257 

Fax: +86 21 6539 7400 

E-mail: info@tts-huahai.com 

TTS Marine Inc. 

5201 Blue Lagoon Drive 

9th Floor 

Miami, FL 33126 

USA 

Tel: +1 305 716 4162 

Fax: +1 305 716 4163 

E-mail: info@tts-se.us 

TTS Marine s.r.l. 

Ponte Colombo 

16126 Genova 

Italy 

Tel: +39 010 24 81 205 

Fax. +39 010 25 43 191 

E-mail: info@tts-marine.it 

TTS Vietnam 

7th Floor, Harbour View 

Building 

No4, Tran Phu Street 

Haiphong City 

Vietnam 

Tel: +84 31 3686519 

Fax. +84 31 3686516 

Email: tran.duchieu@tts-se.vn

TTS Port Equipment AB 

Kämpegatan 3 

SE-411 04 Göteborg 

Sweden 

Tel: +46 31 725 79 00 

Fax: +46 31 725 78 04 

E-mail: info@tts-port.se 

TTS Handling Systems AS 

Holterkollvn 6 

P.O. Box 49 

NO-1441 Drøbak 

Norway 

Tel: +47 64 90 79 10 

Fax: +47 64 93 16 63 

E-mail: info@tts-hs.no 

TTS Liftec Oy 

Tuotekatu 8 

FI-33840 Tampere 

Finland 

Tel: +358 3 31401400 

Fax: +358 3 31401444 

E-mail: liftec@tts-liftec.fi 

TTS Kocks GmbH 

Wachtstrasse 17/24 


P.O. Box 104080, 


Germany 

Tel: +49 421 52008-0 

Fax: +49 421 52008-20 

E-mail: info@tts-kocks.de 

TTS Kocks Ostrava s.r.o. 

U Řeky 808 

720 00 Ostrava-Hrabová 

Czech Republic 

Tel: +420 596 782 708 

Fax: +420 596 782 707 

E-mail: info@tts-kocks.cz 


Korea Co. Ltd. 

# 1664-10 

Songjeong-Dong 

Gangseo-Gu 

Busan 618-270 

Korea 

Tel: +82 51 831 8401 

Fax: +82 51 979 5610 

E-mail: mail@tts-kocks.co.kr 

89

Organisation 

90 

Dry Cargo Handling 


HEAD OF DIVISION 

TTS Ships Equipment AB 


MANAGING DIRECTOR 

TTS Ships Equipment GmbH 

Max Kommorowski 


TTS Ships Equipment AS 

Jan Magnar Grøtte 


TTS Hua Hai 

Ships Equipment Co. Ltd. 

Madame He Pu 

DIRECTOR 

TTS Marine Inc. 

Torsten Paas 

PRESIDENT 

TTS Marine s.r.l. 

Massimo Triglia 


TTS Vietnam 

Tran Duc Hieu 


Port and Material Handling 

Göran K. Johansson 


TTS Port Equipment AB 

Lennart Svensson 


TTS Handling System AS 

Rolf-Atle Tomassen 


TTS Liftec Oy 

Tatu Miikkulainen 





Marine Cranes 



TTS Marine Cranes AS 



TTS Marine Shanghai Co. Ltd. 

Arne Knudsen 


TTS-LMG Marine Cranes GmbH 

Per Sigurd Aulin 


TTS Bohai Machinery Co. Ltd. 

Li Dali 

GENERAL DIRECTOR 

TTS Korea 

Wanho Kuk 

DIRECTOR 

TTS Offshore Handling 

Equipment AS 

Stig Espeseth 

DIRECTOR 

Deck Machinery 






TTS Kocks Ostrava s.r.o. 



TTS Kocks GmbH Korea Co. Ltd. 

Y. J. Kim 

PRESIDENT

Stellan 

Bernsro 

Max 

Kommorowski 

Jan Magnar 

Grøtte 

Madame 

He Pu 

Torsten 

Paas 

Massimo 

Triglia 

Tran 

Duc Hieu 

Lennart 

Svensson 

Rolf-Atle 

Tomassen 

Tatu 

Miikkulainen 

Ivar K. 

Hanson 

Arne 

Knudsen 

Per Sigurd 

Aulin 

Li 

Dali 

Wahno 

Kuk 

Stig 

Espeseth 

Edgar 

Bethmannn 

Y. J. 

Kim




N-5847 Bergen, Norway 

Tel: +47 55 94 74 00 

Fax: +47 55 94 74 01 

E-mail: info@tts-marine.no 

www.tts-marine.com 

• 23633 • Photos: Helge Skodvin • Printed by: Molvik Grafisk AS

23091_TTS 2006_eng.indd - TTS Group ASA

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