Director's report for 2010 - TTS Group ASA

a n n u a l r e p o r t 

2010 

ttS Group aSa

ttS Group 

Historical development 6 

Financial highlights 8 

Key events 2010 10 

Report from the CEO 12 

BuSineSS areaS 

Marine Division 16 

Energy Division 20 

Port and Logistics Division 24 

Chinese venture 28 

Momentum 30 

Extensive upgrading of ports 32 

corporate covernance 

information 

Shareholder information 35 

Corporate governance 36 

Senior management 40 

Board of Directors 42 

director’S report and 

accountS 

Director’s report 45 

PROFit anD LOSS aCCOunt anD nOtES 

- Group 51 

- ttS Group aSa 95 

auditor’s report 114 

Responsibility statement 116 

orGaniSation 

this is ttS 118 

Companies in the ttS Group 122 

financial calendar 2011 

- 4. quarter 2010/preliminary 

annual result 2010 24 February 

- 1. quarter 2011 12 May 

- 2. quarter 2011 17 august 

- 3. quarter 2011 10 november 

- annual general meeting 19 May

3 

” 

ttS – continuously 

generating profits by 

being the preferred 

global supplier for 

handling equipment 

to the maritime and 

oil & gas industry 

Canada 

Edmonton 

USA 

Fort Lauderdale 

Houston 

Brazil 

Macaé

Germany 

Bremen 

Lübeck 

Norway 

Bergen 

Nodeland 

Kristiansand 

Drøbak 

Sweden 

Gothenburg 

Czech Rebublic 

Ostrava-Hrabová 

Italy 

Genoa 

Finland 

Tampere 

Greece 

Piraeus 

TTS has a worldwide network of branch offices, 

service stations and agents, and provides after sales service 

in the major shipping regions in the world. 

Companies in the TTS Group 

Sales and service network 

Singapore 

Singapore 

Vietnam 

Haiphong City 

China 

Dalian 

Nantong 

Shanghai 

Korea 

Busan

TTS Group ASA 

Bergen-headquartered TTS is a global enterprise 

that designs, develops and supplies equipment 

for marine industry and the oil & gas industry. 

The operations are split into three separate 

divisions: Marine, Energy and Port and Logistics. 

TTS is one of the top three largest suppliers 

in its market segments. 

TTS is listed on the Oslo Stock Exchange and 

the group’s annual turnover is in the region 

of NOK 3 200 million. With a worldwide 

workforce of around 1 100, TTS has over 

40 years of experience in the marine industry. 

The group has subsidiaries in Norway, Sweden, 

Germany, USA, China, Finland, Korea, Czech 

Republic, Vietnam, Canada, Singapore, Italy, 

Greece and Brazil. 

Marine 

• Cruise vessel equipment 

• Mooring winches 

• Hatch covers 

• Anchor handling winches 

• Marine cranes 

• Davits 

• Mega yacht equipment 

• Roro equipment 

• Sideloading systems 

Energy 

• Drilling equipment 

• Drilling packages 

• Land rigs 

• Mud systems 

• Offshore cranes 

• Offshore ships equipment 

• Offshore winches 

• Roll compensated systems 

TTS GROUP 3-15 

BUSINESS AREAS 16-33 

CORPORATE GOVERNANCE 35-43 

DIRECTOR’S REPORT AND ACCOUNTS 45-116 

ORGANISATION 118-123 

Port and Logistics 

• Block and heavy load handling 

• Cargo handling 

• Consulting 

• Container terminals 

• Port equipment 

• Shiplift and transfer systems 

• Shipyard production lines 

5

3-15 TTS GROUP 

16-33 BUSINESS AREAS 

35-43 CORPORATE GOVERNANCE 

45-116 DIRECTOR’S REPORT AND ACCOUNTS 

118-123 ORGANISATION 

When the company was founded in 1966 

TTS stood for Total Transportation Systems 

6 

Today, TTS is better represented as 

Total Technology 

Solutions 

ESTAbLiShMEnTS 

1966 TTS is established. 

1995 TTS is listed on Oslo Stock Exchange. 

2002 TTS establishes joint venture in Shanghai, China. 

2002 TTS establishes Rep. Office in Pusan, Korea. 

2005 TTS establishes TTS Bohai in Dalian, China. 

2005 TTS establishes TTS Port Equipment AB, Gothenburg, Sweden. 

2005 TTS establishes TTS Marine Inc. in Florida, USA. 

2006 TTS establishes TTS Marine s.r.l. in Genova, Italy. 

2006 TTS establishes TTS Vietnam, Haiphong, Vietnam. 

2007 TTS establishes Sense Drill Fab AS, Norway. 

2007 TTS establishes Sense EDM Pte. Ltd., Singapore. 

2008 TTS establishes Jiangnan TTS, Nantong, China. 

2008 TTS establishes TTS Marine Equipment (Dalian), China. 

2009 TTS establishes TTS Greece Ltd., Greece. 

2009 TTS establishes TTS Singapore Pte. Ltd., Singapore. 

2009 TTS establishes TTS Marine AS, Kristiansand, Norway. 

2010 TTS establishes TTS Brazil, Brazil. 

AcqUiSiTiOnS/SALES 

1996 TTS acquires Mongstad Engineering AS, Bergen, Norway. 

1997 TTS acquires Norlift AS, Bergen, Norway. 

2000 TTS acquires Aktro AS, Molde, Norway. 

2001 TTS sells TTS Construction AS, Bergen, Norway. 

2001 TTS acquires Hamworthy KSE AB, Dry Cargo Division. 

2001 TTS acquires Hydralift Marine, and sell TTS-Aktro AS. 

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

2004 TTS acquires LMG, Lübeck, Germany. 

2004 TTS acquires Liftec Oy, Tampere, Finland. 

2005 TTS acquires NavCiv Engineering AB, Gothenburg, Sweden. 

2005 TTS acquires Kocks GmbH, Bremen, Germany. 

2007 TTS acquires ICD Projects AS, Ålesund, Norway. 

2007 TTS acquires 100 % of joint venture in Pusan, Korea. 

2007 TTS acquires 50 % of TTS Keyon Marine, Zhang Jia Gang, China. 

2007 TTS acquires Sense EDM AS, Kristiansand, Norway. 

2007 TTS acquires 100 % Sense MUD AS, Kristiansand, Norway. 

2008 TTS acquires Wellquip Holding AS, Kristiansand, Norway. 

2010 TTS sells TTS Keyon Marine, Zhang Jia Gang, China.

AnnUAL TURnOvER 

The TTS Group’s turnover showed 

a steady growth up to and including 

2008, in line with the company’s 

entry into new markets and its 

strengthening of activities in 

established business areas. In 2009 

and 2010, the turnover fell as 

a result of the financial crisis and 

the subsequent economic downturn. 

TTS’ total turnover in 2010 was 

15 percent lower than in the year 

before. For 2011, it is the group’s 

objective again to grow turnover. 

MNOK 

4500 

4000 

3500 

3000 

2500 

2000 

1500 

1000 

500 

0 

OMSETninG 

MNOK 

96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 


Marine 

Energy 

7






Financial highlights 

MARinE DiviSiOn 

NOK Million 2010 2009 

Turnover 2 230.0 2 326.0 

EBITDA 158.7 93.7 

Order backlog per 31.12. 3 204.0 3 414.0 

EnERGY DiviSiOn 


Turnover 712.0 1 180.0 

EBITDA -168.6 -192.0 

Order backlog per 31.12. 690.0 854.0 

PORT AnD LOGiSTicS DiviSiOn 


Turnover 299.0 331.0 

EBITDA 20.6 19.6 

Order backlog per 31.12. 102.0 242.0 

8 

TURnOvER 


Marine 

68.8 % 

2009 

Marine 

60.7 % 

ORDER bAckLOG 


Marine 

80.2 % 

2009 

Marine 

75.7 % 

Energy 

22.0 % 

P&L 

9.2 % 

Energy 

30.7 % 

P&L 

8.6 % 

Energy 

17.3 % 

Energy 

18.9 % 

P&L 

2.6 % 

P&L 

5.4 % 

cOnSOLiDATED TURnOvER 

NOK Million 

1604 

cOnSOLiDATED EbiTDA 

NOK Million 

cOnSOLiDATED 

ORDER bAckLOG 

NOK Million 

2460 

4196 

3825 

3241 

2006 2007 2008 2009 2010 

107 

168 

145 

2006 2007 2008 2009 2010 

2273 

6949 

8159 

-84.3 

4510 

3.7 

3996 

2006 2007 2008 2009 2010

MAin FiGURES 

PROFIT AND LOSS ACCOUNT (NOK 1 000) 

2010 2009 2008 2007 2006 

Operating income 3 240 809 3 825 317 4 196 482 2 459 964 1 604 030 

Operating profit/loss before depresiation (EBITDA) 3 712 -84 265 145 459 167 767 107 061 

Operating profit/loss (EBIT) -48 267 -230 800 114 616 134 636 98 145 

Pre-tax profit/loss -156 103 -311 942 36 819 97 568 84 492 

Net profit/loss -196 656 -248 482 36 392 79 041 60 481 

BALANCE SHEET (NOK 1 000) 

Fixed assets 1 528 039 1 550 755 1 508 802 1 215 577 460 996 

Current assets 1 923 959 2 138 720 2 871 919 1 886 377 1 172 135 

Total assets 3 451 998 3 689 475 4 380 721 3 101 954 1 633 130 

Equity 802 734 935 883 989 056 933 596 598 061 

Long-term liabilities 534 638 452 876 532 297 588 878 196 635 

Current liabilities 2 114 626 2 300 715 2 825 808 1 579 479 838 434 

Total equity and liabilities 3 451 998 3 689 475 4 380 721 3 101 954 1 633 130 

kEY RATiOS 

FINANCIAL STRENGTH 

Equity to assets ratio (as a percentage of total capital) 23.3 % 25.4 % 22.6 % 30.1 % 36.6 % 

PROFITABILITy 

EBITDA margin 0.1 % -2.2 % 3.5 % 6.8 % 6.7 % 

EBIT margin -1.5 % -6.0 % 2.7 % 5.5 % 6.1 % 

Profit margin (pre-tax) -4.8 % -8.2 % 0.9 % 4.0 % 5.3 % 

Profit margin (after tax) -6.1 % -6.5 % 0.9 % 3.2 % 3.8 % 

RATE OF RETURN 

Return on equity -18.0 % -33.3 % 3.7 % 10.5 % 14.1 % 

Return on total capital -4.4 % -6.3 % 2.6 % 4.3 % 5.5 % 

SHARES 

Equity per share 10.75 13.78 38.18 36.20 26.59 

Earnings per share (NOK) -2.76 -5.72 1.41 3,40 2.92 

Number of shares, end of year 74 631 67 908 25 908 25 738 22 493 

Average number of shares 71 269 43 408 25 840 23 250 20 832 

Nominal value, end of year 0.50 0.50 0.50 0.50 0.50 

Defininitions 

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 average equity. 

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

9






key events 2010 

TTS reported earnings 

before depreciation 

of NOK 4 million, based 

on a turnover of NOK 

3 241 million. The group 

reported a pre-tax loss 

of NOK 156.1 million. 

10 

At the start of 2011, 

TTS had an order backlog 

of NOK 3 996 million. 

The order intake in 2010 

was NOK 3 291 million, 

of which NOK 1 467 

million in the fourth 

quarter. 

In 2010, TTS adjusted its 

manning in relation to 

the weak demand in vital 

markets. At the start 

of 2011, the number of 

employees in wholly 

owned companies 

was 1 057, compared to 

1 137 the year before. 

TTS achieved a satisfactory 

level of profitability in 

the markets for handling 

equipment for ships and 

ports, while earnings 

and results from activities 

relating to the oil and gas 

industry were weak.

TTS entered into an agreement 

with the Chinese ship building 

group, Dalian Shipbuilding Industry 

Corporation (DSIC) regarding 

strategic cooperation on deliveries 

to the offshore industry. Whenever 

DSIC enters into new contracts, 

TTS will contribute with expertise 

in design, marketing and delivery 

of drilling packages. TTS will 

furthermore supply equipment for 

four jack-up rigs built by DSIC. 

TTS established 

a sales office in 

Macae in Brazil, 

to market its 

products and 

services to the 

offshore industry. 

TTS strengthened the 

group’s balance sheet by 

carrying out a private 

placement that provided 

the company with NOK 

42 million. Additionally, 

TTS has taken up a 

subordinated convertible 

loan of NOK 200 million. 

PHOTO: A. MARESCA 

TTS made an out-of-court 

settlement subsequent 

to the bankruptcy of 

Ability Drilling. TTS 

purchased a land rig 

from the bankruptcy 

estate for NOK 75 million 

with sellers credit of up 

to two years. All other 

claims between the 

parties were waived. 

11






PHOTO: HELGE SKODVIN 

12 

We can conclude that the many challenges affecting 

TTS as a result of the financial crisis are being resolved, 

which in turn means that the organisation may once 

again direct its efforts toward creating growth and 

healthy economic results. 

jOhAnnES nETELAnD 

PRESIDENT & CEO 

TTS GROUP ASA

We are coming back! 

T 

TS iS An inTERnATiOnAL GROUP that designs and supplies handling 

equipment for use onboard vessels, in ports and on installations for production 

of oil and gas. With activities spanning most continents, we are far more 

exposed to risk than had we limited our geographical field of activities. At the 

same time, a global presence provides us with opportunities that we may not otherwise 

have. The market for our products is global, and accordingly we must be present 

in close proximity to our customers’ operations – providing products and solutions at 

a competitive price and quality. 

Over the past two years, TTS’ owners and employees alike have experienced how 

tough it can be to create results. The financial crisis and the subsequent economic 

downturn had significant consequences and taught us valuable lessons. When 

summing up 2009, we used the expression “annus horribilis”, and our expectations for 

2010 were level-headed. The financial figures have now been presented, and although 

results have taken a positive direction, we must admit that the past year is not one 

to be joyously recalled with regard to TTS’ bottom line. Still, we have succeeded in 

maintaining the expertise in TTS, and as such we are well-equipped for the return of 

the markets for our products and services within all three of our business areas. 

2010 was a good year for the Marine division, our largest division. Although 

the total turnover was somewhat lower than in 2009, there was a high level of activity 

throughout most of the year, and the operating margin showed positive development. 

The potential for further improvement of profitability is predominantly related to an 

increase in the sale of services and products in the after sales and service market. 

For the Port and Logistics division, 2010 was a year of improved results and 

operational margins, despite a lower turnover than the year before. The Energy division, 

however, was marked by a year of little activity and weak margins on orders in 

progress, and consequently its operational result were very poor. 

When we in spite of an unsatisfactory result for the year, we choose to assess 

our current situation to be far better than the one we were in at the end of 2009, this 

is mainly due to a solid order intake towards the end of 2010. The order intake close 

to NOK 1.5 billion in the fourth quarter was the largest order intake since the third 

quarter of 2008, and one of the largest order intakes during one single quarter in the 

history of TTS. 

13

When, in conclusion, we sum up the situation for TTS as far better than twelve months 

ago, this relates to the fact that several factors hampering the group’s operation have 

either been removed or are in the process of being solved: 

- TTS’ dispute with the bankruptcy estate following the bankruptcy of Ability Drilling 

was settled out-of-court last autumn. Instead of a presumably prolonged legal 

process, the dispute was settled by an agreement in which TTS purchased a land 

rig from the bankruptcy estate for NOK 75 million with a seller’s credit of up to 

two years. All other claims between the parties were waived. 

- The effort to dispose of the three land rigs that TTS was left with following the 

bankruptcy of Ability Drilling is progressing favourably. Selling these rigs is an 

important step in order to reduce the group’s balance sheet. In February this year, 

one of these rigs was hired out on commercial terms for a period of twelve months. 

- The group’s capital situation has been strengthened. In July, TTS carried out a 

14 

private placing that provided the company with NOK 42 million. In January 2011, 

a subordinated convertible loan of NOK 200 million was issued. 

- Efforts to bring the Energy division into a position for new contracts for drilling 

equipment packages and cranes for offshore vessels has proven successful. In 

November, TTS entered into an agreement with the Chinese ship building group, 

Dalian Shipbuilding Industry Corporation (DSIC) – a company that TTS is familiar 

with through many years’ cooperation in the joint venture TTS Bohai Machinery 

– regarding strategic cooperation on deliveries to the offshore industry. When 

DSIC enters into new contracts, TTS will contribute with expertise in design, 

marketing, and delivery of drilling packages. Parallell to this, an agreement was 

made for TTS to deliver equipment for two jack-up rigs which DSIC will deliver, at 

a total value of NOK 460 million. In April 2011 the number of rigs was increased 

to four, at a total value of NOK 900 million. At the end of last year, further 

contracts were signed regarding deliveries of cranes to the offshore segment at a 

total value of NOK 50 million.

With this, we can conclude that the many challenges affecting TTS as a result of the 

financial crisis are being resolved, which in turn means that the organisation may 

once again direct its efforts toward creating growth and healthy economic results. 

The strong growth in order intake at the end of last year has continued into 2011. 

Furthermore, we believe that our long-term focus on developing operations in 

China continues to be important, and overall we expect about 40 percent of TTS’ total 

value creation to take place in our Chinese companies. Our expectations of the 

cooperation with DSIC in the energy segment are high. We are further convinced that 

the experiences which our customers of our first drilling packages will gain when 

this equipment is put to use in the coming year will provide us with a marketing 

advantage. 

As a major player within our markets, TTS has had a tradition of playing a role in 

restructuring the industry. We will continue to vigilantly seek solutions that will create 

value for our share holders. 

Although there is still uncertainty related to the development of TTS’ markets, 

2011 promises to be a year of progress within all of TTS’ business areas. We will 

none theless have to fight for each contract in a market with surplus capacity following 

several years of ‘drought’. The demand for our products and services will depend on 

the economic and political development in the world. If the surge of unrest in several 

states in the Middle East and North Africa has such consequences as a limiting in the 

supply of oil and gas, this will negatively affect the world economy and may reduce 

the willingness to invest in new equipment and purchase service and after sales 

support. 

We must therefore be prepared for setbacks, and on the whole have level-headed 

expectations to our turnover and results in 2011. Having said this, the potential for 

the activities that TTS engage in are considerable, and we have a clear ambition of 

returning to the levels seen prior to the financial crisis. We are coming back! 

Johannes D. Neteland 

President & CEO 






15

ivAR k. hAnSOn 

DIRECTOR 

MARINE DIVISION 

Ivar K. Hanson, Director and 

head of the Marine division. Until 

the new organisation became 

operative on 1 January 2010, 

he headed the Marine Cranes 

division for six years. Hanson 

holds a Master of Science in 

Business Administration, as 

well as a degree in Mechanical 

Engineering, and he has worked 

with TTS for a total of 16 years. 

16 

Marine division 

For the Marine division of TTS, 2010 was 

a prosperous year. The market for marine 

handling equipment has been brisk, and 

by concentrating the group’s activities 

in the maritime sector into one division, 

TTS has been able to achieve synergies 

and strengthen its competitive edge. 

The activities in the maritime sector make up the largest part 

of TTS’ operations. At the start of 2010, it was expected 

that the market would recover following a period affected by 

the financial crisis and economic downturn. This expectation was 

by a long way fulfilled. At the same time, the competitive situation 

intensified, owing to a considerable build up of capacity in the 

maritime equipment industry over the past years. 

– Our response to this challenge has been to concentrate all our 

resources within this business area, both to achieve cost synergies 

and to appear more uniform and with a higher degree of power 

with all our products and solutions, says Ivar K. Hanson, Director 

and head of the Marine division. 

In 2010, operation and results within the business area of cargo 

access were excellent. Furthermore, the activities related to deck 

equipment yielded satisfactory results. The joint venture companies 

in China made a particularly positive contribution. In all, the 

Chinese companies contributed close to a third of the division’s 

added value. Results from the division’s activities within service 

and maintenance were somewhat weaker than anticipated. Lower 

day rates resulted in reduced demand for maintenance. 

Operations 

Operations in the Marine division are headed from Bergen, Norway, 

and have been divided into four business areas: Deck equipment, 

comprising deck machinery, hatch covers, cargo cranes and yacht 

equipment; Cargo access, comprising RoRo equipment, side loading 

systems and equipment for cruise ships and mega yachts; Services, 

including repairs, maintenance, training and sale of spare parts; and 

finally, the joint venture companies in China constitute the division’s 

fourth business area. 

At the start of 2011, the Marine division had 667 employees, 

compared to 681 the year before, and most of these employees have 

an emphasis on engineering skills. The employees are distributed 

Turnover 

2326 

2230 

2009 2010 

Order backlog 

3414 

3204 


EbiDTA 

93.7 

158.7 

2009 2010

quarter ramp supplied by TTS to the 

world´s largest RoRo vessel, Mv Tönsberg, 

built at Mitsubishi heavy industries 

in nagasaki for Wilh. Wilhelmsen. 

Delivered in March 2011. 


bUSinESS AREAS 16-33 




PHOTO: A. MARESCA 

17

18 

hatch covers 

Stern ramp and 

stern door 

Wire luffing cranes 

geographically, with 118 employees in Norway, 86 in Sweden, 159 

in Germany, 37 in the Czech Republic, 6 in Italy, 6 in Greece, 12 in 

the USA, 168 in China, 56 in South Korea, 8 in Singapore and 7 in 

Vietnam. 

In addition to this, the joint venture companies in China have a 

total of 153 employees, with 83 employees in TTS Bohai Machinery 

in Dalian and 70 in TTS Hua Hai in Shanghai. TTS Hua Hai owns 

40 percent of the manufacturing company Jiangnan TTS Ships 

Equipment, in Nantong, with 720 employees. 

In Germany, TTS Kocks and TTS Ships Equipment in Bremen 

merged in 2010. In the first half of 2011, TTS LMG in Lübeck will 

formally be incorporated into one German company with employees 

in Bremen and Lübeck. 

– Through our entire organisation we have a strong focus on 

achieving synergies; cost-wise by improving our purchasing routines, 

and income-wise by further streamlining the way in which we 

market and sell our products and services, says Ivar K. Hanson. 

In the autumn of 2010, the Marine division initiated a cultural 

project in collaboration with the Norwegian embassy in Beijing. The 

aim of this project is to strengthen and improve cooperation and 

interaction between the division’s employees in Europe, primarily 

in Sweden, Norway and Germany, and the enterprises in China. The 

project is organised as a series of seminars with assistance from 

external advisors, with the aim of increasing knowledge and understanding 

of each other’s approaches and work methods, including 

relevant differences between the various European countries and 

different parts of China. 

Products 

The Marine division supplies design and engineering of equipment 

for cargo handling and cargo access on vessels, with related functions 

within service and maintenance. Product development is 

carried out internally in each business unit and across these units. 

TTS is among the world’s leading suppliers of cargo handling 

systems for vessels; including side loading systems, RoRo equipment, 

hatch covers and specialist equipment for yachts and 

cruise ships. TTS is also one of the world’s major suppliers of hose 

handling systems, and holds a strong position in the market for 

provision cranes and cargo cranes. TTS is furthermore a significant 

supplier of winches and deck machinery. 

Our portfolio of products is continuously improved and 

re newed, in line with the technological development and customers’ 

requirements to efficient and functional solutions. Our focus is 

pre dominantly on developing our programs in service and after 

sales. Historically, this is an area in which TTS has had limited 

focus, but we are building a service function to meet our customers’

Weather and tween 

hatch cover 

Deck winches 

Ramp cover 






requirements for standby guarantees relating to unforeseen events 

and regular maintenance. Our aim is to provide a solid service 

function for our customers throughout our products’ service life, 

says Ivar K. Hanson. 

Market outlook 

At the start of 2011, the order backlog of the Marine division was 

NOK 3 204 million, compared to NOK 3 414 million the year 

before. These figures include 50 percent of the order backlog of 

the joint venture companies TTS Hua Hai Ships Equipment Co. Ltd. 

and TTS Bohai Machinery Co. Ltd. in China. 

The weakened order intake is a result of the pronounced decline 

in the shipbuilding market until 2010, and the fact that there is 

normally a degree of staging between the date of contracting of new 

vessels and orders of new equipment. 

– In the first half of 2010, a large number of bulk carriers and 

tankers were contracted at shipyards in South Korea, which together 

with a renewed activity in the car carrier market present improved 

opportunities for TTS, says Hanson. 

In addition to equipment deliveries for RoRo vessels, the market 

for cruise liners appears to hold opportunities for TTS. Furthermore, 

there is an increase in activity in the niche market for mega 

yachts, and the same applies to reefers. – We are looking at the 

possibility of deliveries to the naval forces of several countries in 

connection with the refurbishment of vessels. The tanker and bulk 

market, however, remain slow, Hanson maintains. 

He adds that the Marine division also supplies specialist equipment 

for offshore vessels, including deck machinery, special purpose 

hatches as well as rescue and emergency equipment. 

Strategy 

The Marine division has an order situation that ensures full capacity 

utilization in 2011, and the main challenge is to sell new projects 

with satisfactory margins for implementation in 2012 and following 

years. 

– We must continue our efforts to develop and market our 

expertise as supplier of services. Due to the strong increase in our 

volume delivered in recent years, the basis for products requiring 

service and maintenance will continue to grow. Hence, our opportunities 

in this business area are significant, even if the service 

market in general remains weak, Hanson points out. 

The Marine division will continue its efforts to achieve cost 

synergies on the basis of the Momentum Project (ref. separate article 

on page 30-31). 

19

inGE GAbRiELSEn 

DIRECTOR 

ENERGy DIVISION 

Inge Gabrielsen is head of 

the Energy division, and is 

furthermore Director of 

TTS Energy AS. Gabrielsen 

holds a Master of Science 

from NTNU, the Norwegian 

University of Science and 

Technology, and was head 

of operations in former 

TTS Sense until 2009. He 

has previous experience 

from Subsea 7 and several 

Aker companies. 

20 

Energy division 

The Energy division concluded 2010 by entering 

into two major contracts for delivery 

of complete drilling packages. As a consequence 

of strategic co operation agreements 

in China, additional two contracts were 

signed in April 2011. The demand for land 

rigs and offshore cranes is expected to rise 

in the course of this year. 

At the start of 2010, TTS concentrated most of the group’s 

activities in the oil and gas industry into the Energy 

division. The scope of activities is primarily development 

and production of advanced drilling equipment, cranes, winches and 

other handling equipment. Following the acquisition of Sense EDM 

in 2007, equipment for onshore and offshore rigs was incorporated 

into TTS’ product portfolio. In the same year, TTS resumed 

supplying offshore cranes. In 2010 TTS merged all Energy companies 

in Norway into one single company; TTS Energy AS, and 

by doing so achieved a more defined and efficient operational 

structure. Efforts are focused on achieving both administrative and 

operative synergies. 

As expected, the market for the Energy division’s products 

remained weak for most of last year. TTS has succeeded in maintaining 

a high level of expertise in the area, and is well-equipped to 

service the market with high-quality products and solutions. In 

2010, TTS delivered a complete drilling equipment package to 

Keppel FELS in Singapore. The equipment package constitutes part 

of a highly advanced jack-up rig for the drilling and production 

of oil and gas. Testing of the drilling package is expected to be 

completed during the second quarter of this year. In 2009, similar 

drilling packages were delivered to a CJ70 jack-up rig currently 

under construction at the Jurong Shipyard in Singapore. Testing 

of this drilling package will also be completed in the second quarter 

of this year. Both rigs have been acquired by rig operators that 

have been awarded drilling assignments for operating companies in 

the North Sea, thus providing TTS with valuable references. 

In 2010, TTS entered into a contract with PetroVietnam Marine 

Shipyard Company regarding a drilling equipment package for a 

jack-up rig currently under construction at the Vung-Tau shipyard. 

The equipment is scheduled for delivery in 2011. 

In 2010, TTS further signed a strategic cooperation agreement 

Turnover 

1180 

712 


Order backlog 

854 

690 


EbiDTA 


-192 

-169

TTS Energy delivers land 

rigs based on our internationally 

patented rack 

& pinion technology. 

These rigs are unique 

in term of mobilization, 

operational weight, speed 

of operation as well as 

level of automation. 






21


12-31 bUSinESS AREAS 




Offshore Modular Rig where 

the rack & pinion principle 

results in a more compact 

and lighter rig compared 

with traditional solutions. 

22 

with the Chinese shipbuilding group Dalian Shipbuilding Industry 

Corporation (DSIC) regarding delivery of drilling equipment to the 

offshore industry. Through its Energy division, TTS will contribute 

with expertise in design, marketing and delivery of drilling packages, 

whenever DSIC enters into new contracts for the delivery of such 

equipment. The collaboration on equipment deliveries to customers 

in the offshore market is organised through the joint venture 

company that TTS owns together with DSIC; TTS Bohai Machinery. 

TTS entered into an agreement with DSIC for the delivery of two 

drilling equipment packages for jack-up rigs, ordered by Prospector 

Offshore Drilling. These are scheduled for delivery in the fourth 

quarter of 2012. Two additional contracts for drilling equipment 

packages were signed in April 2011. Through its offshore company 

DSOC, DSIC holds options for the delivery of an additional three 

jack-up rigs. 

Following its re-entry into the crane market, TTS has developed 

a range of cranes for rigs and offshore vessels, anchor handling 

winches and other handling equipment. With its unique technology 

for active heave compensation, TTS has become a significant 

supplier of cranes and equipment for handling of heavy loads at 

great ocean depths. In 2010, the Energy division delivered its first 

250 ton active heave compensated offshore crane. 

2010 was a weak year for the Energy division’s company in 

Canada. As a result of the low level of activity in the market for land 

rigs, operations have been focused on the sale of individual components 

as well as after sales service. 

On the basis of recent years’ deliveries to the oil and gas industry, 

TTS has obtained a solid foundation for providing its service and 

after sales. In addition to the sale of spare parts for drilling rigs and 

cranes, TTS has developed a simulator-based training program for 

continuous maintenance. TTS has established a 24-hour technical 

support for service, and the activity in this area is increasing. 

In 2010, TTS made an out-of-court settlement with the bankruptcy 

estate following the bankruptcy of Ability Drilling. TTS 

committed to purchasing a land rig from the bankruptcy estate 

for NOK 75 million. Efforts are focused on disposing of all three 

rigs on commercial terms. 

Operations 

The Energy division comprises all units of the TTS Group that deliver 

equipment to the oil and gas industry. Its main products are drilling 

packages, complete land rigs, as well as cranes and winches for rigs 

and offshore vessels. 

The Energy division is managed from Kristiansand in Norway. 

Operations are divided into the two business areas Drilling and 

Offshore & Subsea, of which the first is managed from Kristiansand 

and the latter from Bergen.

At the start of 2011, the Energy division had 316 employees, 

compared to 395 the year before, whereof 264 work in Norway, 

38 in Canada, 11 in Singapore, one in China and one in the USA. 

Furthermore, a sales office has been established in Macae in Brazil, 

with one employee. 

Products 

The Energy division designs, develops and supplies advanced 

equipment for onshore and offshore rigs, and for vessels serving 

the oil and gas industry. The products are divided into the following 

main categories; drilling equipment, drilling packages, land rigs, mud 

systems, offshore cranes, equipment for offshore vessels, offshore 

winches and active heave compensated systems. The development 

of equipment is carried out in close cooperation with the division’s 

customers, based on requirements for functionality, productivity, 

safety and quality. 

– We have developed a virtually complete product portfolio 

for the high end part of the market for drilling equipment. So far, 

we have primarily focused on equipment for jack-up rigs. However, 

we have ambitions of making deliveries to floaters by employing 

the heave compensation technology. We have initially developed 

concepts for semi-floaters, but will eventually be able to provide 

solutions for drill ships, Inge Gabrielsen says. 


At the start of 2011, the order backlog of the Energy division was 

NOK 690 million, compared to NOK 854 million the year before. 

Following two years of a low level of activity, the market for the 

division’s products is once again on an upward trend. 

Our challenge is to document our competitive edge as regards 

technology and quality in a market marked by two major, well 

established suppliers. The development for the cooperation in 

Gulmar Atlantis is equipped with 

a 140 ton Ahc offshore crane from TTS. 

China will as such be of significant consequence; here TTS 

has an advantage that we will take great care of, emphasises Inge 

Gabrielsen. 

The market for offshore cranes is weak. The demand for land rigs 

is expected to improve in 2011. 

Strategy 

For the Energy division, the main focus of 2011 is to capitalise 

on the product portfolio which TTS has developed; primarily 

through more contracts for deliveries of offshore cranes and drilling 

equipment for jack-up rigs. 

The basis for growth in the drilling equipment market is favourable, 

and our ambition is to go from being a small contender to a 

major market player in this segment. Our basis for this is that, 

toward 2015, another 100 jack-up rigs will be constructed worldwide, 

providing a favourable potential for the sale of our products. 

We anticipate that the demand will increase further towards the end 

of this year. 

In the market for offshore cranes, TTS will focus on the re-sale of 

cranes cancelled during the financial crisis and securing new orders. 

– In spite of a weak market for land rigs, we are convinced that 

the operators will gradually require more rigs. Our strategy will be 

to serve the high end market with automated solutions. We will 

make use of technology from offshore installations and approach 

the segment of the market that requires advanced rigs, Gabrielsen 

points out. 

The Energy division has established a sales office in Macae in 

Brazil, to market the division’s products to shipyards in Brazil and 

to offer service functions. 

With regard to the service market, the division’s strategy is 

to develop the position that TTS has built as a supplier with solid 

expertise and excellent training programs for customers. 

23

LEnnART SvEnSSOn 

DIRECTOR 

PORT AND LOGISTICS DIVISION 

Lennart Svensson was appointed 

Director of the former Port and 

Material Handling division in 2008, 

and continued as head of the 

new division, following last year’s 

restructuring. Svensson holds a 

degree in Mechanical Engineering, 

and has for most of his career been 

involved in marine cargo handling. 

He was previously Marketing Director 

of TTS Ships Equipment AB, and 

has been Managing Director of 

TTS Port Equipment AB since its 

establishment in 2005. 

24 

Port and Logistics division 

The Port and Logistics division is wellequipped 

to handle a growing market for 

equipment for ports, and as an example is 

prequalified to participate in competitive 

tendering for deliveries to Rotterdam’s new 

container terminal. The market for lifting 

and transport equipment to the industry 

is recovering. Accordingly, the division has 

high expectations to operation and results 

in 2011. 

Since 2005, TTS has developed products and services for the 

handling of cargo in ports. Together with the traditional 

activities within material handling, this has become a significant 

business area for the group. The Port and Logistics organisation 

has in 2010 been strengthened to enhance interaction between 

the units in Sweden, Norway and Finland. The division has its 

own function for marketing and administrative services, ensuring 

efficient operation and proximity to customers at all stages. 

The Port and Logistics division products and customers make 

its operations less exposed to fluctuations in the market than 

TTS’ other divisions. Thus, turnover and results in 2009 and 2010 

have on the whole been acceptable, even though profitability 

between the three units of the division has varied. In 2010, the 

division’s most prosperous operations were the ones involving 

development and manufacturing of port equipment. 

The division is managed from Gothenburg. As a result of the 

restructuring of TTS at the start of 2010, several joint administrative 

functions were established to make the division less dependent on 

resources from other divisions and from the group administration. 

Operations 

At the start of 2011, the Port and Logistics division had 67 employees, 

compared to 61 the year before. The employees are distributed 

geographically; with 22 employees based in Sweden, 17 in Norway 

and 28 in Finland. In Sweden, the staff was increased by five 

employees in 2010, while minor adjustments were made elsewhere. 

Most of the division’s employees have an emphasis on engineering 

skills. In Sweden, the expertise is focused on developing equipment 

for efficient cargo handling in ports, while in Norway it is 

Turnover 

331 

299 


Order backlog 

242 

102 


EbiDTA 

19.6 

20.6 

2009 2010

Upper deck Linkspan, 

Port of Gothenburg. 






25

26 

Two tier Linkspan in 

hoek van holland. 

Transfer system from 

TTS handling System. 

Upper deck Linkspan for 

harwich international 

Port, England, Uk. 

focused on production lines and equipment for heavy load handling 

in shipyards and other industries. In Finland, specialisation is on 

systems and vehicles for the transport of containers and loading 

cassettes. 

– A review of 2010 indicates that this is probably the most hectic 

year since TTS made equipment for cargo handling an area of focus. 

The level of activity was particularly high in the Gothenburg-based 

company performing the installation of a number of linkspans 

(special ramps linking ship to shore), passenger gangways and other 

terminal equipment, says Lennart Svensson. 

In 2010, TTS delivered port equipment to Stena Line and to ports 

in Germany, England, Denmark and Sweden. Last year, TTS Port 

Equipment was approved as one of three potential suppliers for a 

fully automated transport system for Rotterdam’s new container 

terminal. An announcement on the choice of system and supplier 

is expected during the autumn of 2011. 

–We have made considerable investments in the development of 

a system for automatic container handling, and should TTS be 

chosen as preferred supplier, this would constitute a major project 

for the division over the next few years. There will be two-three 

other major port terminal projects, with a focus on automation of 

manual systems, maintains Svensson. 

Not all areas within the division kept up the same level of activity 

in 2010. As a consequence of the financial crisis, the market for 

our operations in Finland has been weak for the past two years. A 

weak order intake resulted in a temporary reduction in manning in 

the first half of 2010. After the summer holidays, there has been an 

increase in the demand for cassette loadings systems and translifters 

for customers in shipping and other industries. 

The market for equipment for heavy load handling and production 

lines to the industry was expected to be weak in 2010. In Norway, 

the focus was therefore on deliveries of lifting equipment to repair 

yards. TTS collaborates with another technology company relating 

to the development of a separate system for the lifting of ships, and 

has commenced marketing of this system. In collaboration with 

wind power producers, a considerable effort has been made to 

develop heavy lift and logistics solutions for the transport and 

installations of offshore wind turbines and wind power plants. 

Products 

TTS has an extensive product portfolio for cargo handling in ports. 

In addition to linkspan and passenger gangways, this further comprises 

automatic mooring devices and systems for handling containers 

and cassettes. The cassettes are further suited for special 

transport requirements related to production, e.g. in the steel and 

paper industries. Additionally, TTS has developed a complete AGV 

system (Automated Guided Vehicles) for the handling of containers 

in container terminals. 

Through is activities in Norway, TTS has for a number of years 

been a supplier of production lines to shipyards and of systems and 

solutions dealing with heavy load handling, both in shipyards and 

other industries. 

In recent years, TTS has invested development resources on 

heavy lift and logistics solutions in connection with establishment 

and installation of onshore and offshore wind power plants. The

demand for such systems is growing as a result of the steadily 

increasing size of the wind turbines. TTS has considerable knowhow 

with regard to heavy lifts, and uses this to develop solutions 

that ensure a safe and efficient transport of installations with a 

height up to 90 meters. 


At the start of 2011, the order backlog of the Port and Logistics 

division was NOK 102 million, compared to NOK 242 million the 

year before. 

– We have prepared for a slight growth in turnover and results 

in 2011 compared to last year, despite the fact that parts of our 

markets are experiencing surplus capacity and price pressure, 

maintains Svensson. 

The Port and Logistics division delivers the majority of its 

products and services to customers in Europe, but it also has 

deliveries to countries in Asia. In 2010, the division entered into 

contracts for linkspans to Australia and New Zealand. 

The division will continue to focus on the marketing of linkspan 

and passenger gangways towards port authorities and commercial 

players in Northern Europe and Great Britain. The market for 

heavy lift equipment to repair yards in Europe and Asia is considered 

to be significant. Furthermore, the Port and Logistics division 

considers Brazil to be an interesting market for heavy lift equip- 

ment and production lines, provided that plans for the establishment 

of new shipyards in Brazil are carried through. 

Strategy 

In 2011, the Port and Logistics division will focus on achieving even 

more synergies between its units with regard to marketing of 

products and services. The organising of TTS entails that each 

division is fully responsible for operation and economy, which Port 

and Logistics as the smallest division has adjusted to. 

– At a higher level, we are concerned with the fact that we, 

through our deliveries, contribute to ensuring the requirement for 

efficiency through the greatest possible use of automated systems, 

and that environmental considerations are safeguarded through the 

use of electricity as a principal energy source, says Svensson. 

He maintains that the division to a higher degree wishes to be 

seen as a system supplier rather than a product supplier. – We will 

focus intensely on developing and strengthening our position as 

supplier of systems for cargo handling in container terminals. 

The division bases itself on the fact that the increase in world 

trade over time will compel new and automated solutions for cargo 

handling in ports. – In this perspective, our challenge is to maintain 

and develop our expertise through participation in specific projects. 

Hence, we must continue to focus on product development and 

sales, emphasises Lennart Svensson. 

27






New phase in our Chinese venture 

TTS has a long tradition of collaboration and operations in China. Presently, we are about to 

initiate a new phase in our Chinese venture. We hope that it will be as eventful and promising 

as the cooperation on development and production of maritime equipment. 

Last autumn, TTS entered into an agreement with the 

Chinese shipbuilding group Dalian Shipbuilding Industry 

Corporation (DSIC) regarding strategic cooperation on 

delivery of drilling equipment to the rig market. When DSIC enters 

into new contracts, TTS will contribute with expertise in design, 

marketing and delivery of drilling packages through its Energy 

division. 

28 

– Chinese shipyards aim to become leading suppliers to the 

offshore industry and this agreement offers TTS a great oppor tunity 

to strengthen our position in this market, says Johannes D. 

Neteland, President and CEO of the TTS Group. 

Two-dimensional cooperation 

Cooperation in China within the field of energy has two dimen sions. 

With respect to DSIC, the agreements entails that TTS is to be DSIC’s 

preferred partner and supplier of drilling equipment when ever 

the shipbuilding group takes on assignments for customers in the 

rig market. With regard to TTS Bohai Machinery, the cooperation 

means that the joint venture company establishes a separate 

offshore organisation for production of drilling equipment and 

offshore cranes to sell these to Chinese yards. 

Making the most of each others advantages 

TTS Bohai Machinery is well established in Dalian, with 83 employees 

and operations within engineering, production and sale of marine 

cranes to shipyards in China. Within this niche, the company has 

taken a market share of just under 25 percent. Now that TTS Bohai 

Machinery is entering the rig market, the company will enter into 

agreements with subcontractors regarding the construction of 

drilling equipment, and will handle its own production and assembly. 

A steering committee with representatives from TTS Energy and 

TTS Bohai Machinery shall be responsible for further developing 

this cooperation. 

– The basis for this cooperation is that TTS Energy in Norway 

develops products and solutions, while production and assembly 

takes place in China. Thus, the parties competitive advantages are 

utilised for our common good, says Inge Gabrielsen, Director of 

TTS’ Energy division. 

TTS Bohai Machinery already supplies cranes to the offshore 

market, and further plans to offer winches and other lifting equip- 

ment to AHTS vessels and subsea vessels. Adding drilling equipment 

to the productrange will strengthen the company’s profile as offshore 

supplier. 

conducive to quality control 

DSIC has set aside large areas for use as premises and facilities for 

the production of equipment to this market. The Energy division 

will be represented by two-three engineers to ensure quality control 

and documentation in connection with the establishment of an 

organisation and the construction of premises. The Chinese must 

follow international standards of quality, and our main task is to 

continuously revise developments and projects according to these 

standards. 

DSIC has already constructed 11 jack-up rigs and has contracts 

for the delivery of six more rigs. Four of these will be delivered to 

Prospector Offshore Drilling in the fourth quarter of 2012 and in 

2013, with advanced drilling equipment packages from TTS Energy. 

Taking a firm position 

– These contracts entail the recognition that TTS as a supplier is 

considered equal to the two major players in the industry and to other 

makers of drilling equipment. Provided that we maintain our competitive 

edge with regard to price and quality, this cooperation 

provides us plenty of opportunity to build up a portfolio that will 

make TTS the third alternative in this segment, emphasises Gabrielsen. 

He points out that TTS’ history as a supplier of complete drilling 

packages is short. The initial contract for such a delivery was 

entered into with Jurong Shipyard in Singapore in June 2007. 

– It has been an demanding journey, however, we are about to 

take up a position which in both technical terms and business terms 

entails great opportunities. 

Strengthening our service function 

Gabrielsen maintains that by building a portfolio of rigs with TTS 

drilling equipment, one opens a market for service and after sales 

support. – In order to service rigs operating in Asian waters, we are 

currently establishing a service hub consisting of our employees in 

Singapore and our new representative in Shanghai. There are further 

plans of a service station in Dubai. Thus, TTS will be seen to have a 

competitive edge as regards both expertise and availability.

DSic has already constructed 11 jack-up rigs and has contracts for 

the delivery of six more rigs. Four of these will be delivered to 

Prospector Offshore Drilling in the fourth quarter of 2012 and in 

2013, with advanced drilling equipment packages from TTS Energy. 

29






Progress to continue 

with “Momentum” 

The Marine division is enjoying helthy growth. However, no matter how good something 

is it can always be improved. Hence, internal processes and routines are under critical 

scrutiny in order to improve TTS’ competitive edge and profitability. As a project, 

“Momentum” will contribute to our continued improvement. 

” Momentum” is the name of a project to cover three 

business-critical areas; work processes, product 

development and strategic purchasing. The Business 

Process Reengineering Project deals with professionalising the 

way in which work is performed, in order to make our organi sation 

more efficient and increase productivity. 

improved work processes 

The most important parameters of any enterprise are its human 

capital and the business processes. We have technically skilled 

employees in the Marine division, yet we know that the organisation 

of and execution of projects can be carried out in a more 

efficient manner. As an example, we should have systems for 

a common database, enabling engineers in various countries to 

work on the same project more effortlessly. The same applies 

to the way in which we present our tenders. It is essential that 

we set certain standards and are disciplined in applying these, 

says Ivar K. Hanson, Director and head of the Marine division. 

Our approach to these challenges has been to bring out 

examples of best practise in our organisation, and form strategies 

for putting this practice into effect throughout the rest of 

the organisation. 

– We have identified best practice in the Marine division at 

the business unit Cargo Access in Gothenburg, and we have 

agreed to define and introduce these processes as work procedures 

for the entire division in the present year. Parallel to this, 

we are introducing the Balanced Scorecard to measure key 

performance indicators, continues Hanson. 

Offering improved products 

The main aim of the product development project is to further 

develop and optimise the product portfolio for cargo cranes, deck 

machinery and hatch covers. 

– During the spring of 2011, we will have in place a product 

30 

portfolio in these areas that will improve our competitive edge 

significantly. Product development is also about improving the 

purchasing of components. 

– Removing two out of three suppliers leaves us with a choice 

of suppliers that will reduce the overall cost in the supply chain. 

By grouping our purchases in component families, it is easier 

to obtain favourable prices, the director of the Marine division 

points out. 

Trimming suppliers 

The project for strategic purchasing involves both the standardisation 

of technical components in products and the improvement 

of processes by purchasing such components. The project group 

is assisted by external consultants. 

– In the course of 2011, we will arrive at cross-divisional 

standard solutions involving a reduction in the number of com- 

ponent and choice of supplier. In principle, our purchases shall 

be made as close to the customer as possible, as long as this 

does not compromise our high standard of quality. At the same 

time, purchases shall be improved through routines that group 

volumes at the lowest possible prices. 

Ivar K. Hanson emphasises that all units in the division are 

taking part in “Momentum”, including the joint ventures in 

China. These companies are, to an increasingly greater degree, 

becoming integrated in operations and development. 

– The “Momentum” project will enable us to guard market 

shares and provide the foundation for even better earnings once 

the market starts to gain momentum, concludes the divisional 

director.

Ahc kran under testing på 

TTS Marine Shanghai 

PHOTO: HELGE SKODVIN 

The business Process Reengineering Project deals 

with professionalising the way in which work is 

performed, in order to make our organi sation more 

efficient and increase productivity 

31






Extensive upgrading of port 

using TTS equipment 

Through its Port and Logistics division, TTS is involved in a large-scale modernisation 

of port facilities in a number of ports in Northern Europe. Stena Line’s new Superferries 

underlines the demand for more efficient and comfortable flow of traffic. 

in recent years, Stena Line has invested large sums in new 

ships for the ferry service in the Baltic Sea and the North Sea. 

The shipping company has built two Superferries; Hollandica 

and Britannica, which at 240 meters in length are the largest 

Superferries in the world able to carry both passengers and freight. 

The investments have been based on a clear strategy for efficient 

cargo handling and expansion of Stena Line’s ferry terminals in 

Harwich and Hoek van Holland. Furthermore, substantial upgrades 

have been completed in the port facilities that Stena Line makes 

use of in Loch Ryan in Scotland, in Belfast, Gothenburg, Karlskrona, 

Gdynia and Kiel. 

– Stena Line has chosen TTS as business partner for these 

assignments, based on our expertise and experience with similar 

projects. We have been responsible for conducting exploratory 

analysis and concept development in each individual case, says 

Lennart Svensson, Director of the Port and Logistics division. The 

final deliveries for Stena Line were completed last autumn. 

improving traffic flow 

TTS has delivered double-tier linkspans, which are bridges linking 

ship and shore, with two transport corridors in and out of the 

vessel from the upper and lower deck. This ensures an optimum 

flow of traffic in and out of the ferries. Installations have been 

carried out with minimal disruption to the regular ferry schedule. 

32 

– Our transport of goods and passengers has continued without 

delays. The installations and the work executed on the quayside 

were carried out in a very satisfactory manner, says Pim de Lange, 

Area Director in Stena Line. 

Automatic mooring system 

Furthermore, TTS has delivered a new automatic mooring system 

and passenger gangway to Stena Line’s ferry terminal in Gothenburg. 

At the same terminal, TTS has designed an advanced gangway, 

connecting the vessel to a new floor on top of the existing terminal 

building. 

In Karlskrona, TTS has upgraded an existing linkspan for the 

ferries servicing the Karlskrona-Gdynia route, and installed a new 

passenger gangway. An analysis has been made of the need for 

adjustments to the equipment in the ferry terminal in Gdynia. 

Large linkspans in major port 

Stena Line has established a route in the Irish Sea between the 

Port of Belfast in Northern Ireland and the Port of Stranraer in 

Scotland. Stena Line’s terminals in these ports have undergone a 

reconstruction according to TTS engineering, and both ports have 

taken delivery of new passenger gangways. 

In addition, the Port and Logistics division are responsible for 

a new automatic mooring system to the contracting firm Skanska 

in the Copenhagen-Malmø Port. TTS has delivered four large linkspans 

with upper and lower decks, and final tests were completed 

in January this year with highly satisfactory results. 

continued focus on major market 

On the basis of the group’s many years of presence in China, TTS 

has entered into collaboration with suppliers that manufacture 

port equipment. 

The market for efficient and environmentally sound solutions 

for the infrastructure in ports is substantial. In just a few years, 

TTS has built up a considerable portfolio of terminal projects, 

giving us a solid foundation for the sale of new and profitable 

assignments, emphasises Lennart Svensson.

PHOTO: MIKE LOUAGIE 

Belfast 

Loch Ryan 

Harwich 

Hoek van Holland 

Kiel 

CMPort 

Göteborg 

Karlskrona 

Upper deck Linkspan in harwich for the world’s 

largest RoPax ferries, Stena Superferries. 

33 

Gdynia

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 

Subscription price 

Price 

at time of offering NOK 23.00 

Opening price 03.05.95 NOK 26.50 

31.12.95 NOK 25.24 

31.12.96 NOK 29.26 

31.12.97 NOK 29.26 

31.12.98 NOK 10.97 

31.12.99 NOK 10.24 

31.12.00 NOK 17.92 

31.12.01 NOK 12.44 

31.12.02 NOK 5.67 

31.12.03 NOK 7.56 

31.12.04 NOK 14.13 

31.12.05 NOK 23.43 

31.12.06 NOK 52.9 

31.12.07 NOK 73.32 

31.12.08 NOK 12.47 

31.12.09 NOK 5.70 

31.12.10 NOK 7,60 

The share price has been adjusted to reflect 

the 1:2 share split in April 1996. 

TRADE in TTS ShARE 

01.01.10 30.03.11 

Number of shareholders 1 806 1 589 

Foreign holdings 12,97 % 18,17 % 

01.01.10 – Average per 

30.03.11 trading day 

Number of trades 6 423 21 

Value (NOK 1000) 185 249 59 

Number of shares (1000) 28 189 90,4 

Average price 6,57 

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 2010/preliminary 

annual result 2010 24 february 

1. quarter 2011 12 May 

2. quarter 2011 17 August 

3. quarter 2011 10 November 

Annual general meeting 19 May 

1000 

800 

600 

400 

200 

0 

30.03.10 

MOvEMEnT in ShARE cAPiTAL, RiSk ADjUSTMEnT 



cORPORATE GOvERnAncE 35-43 



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 Privat placing 2 101 000 4 202 000 0.50 







17.04 00 Privat placing 3 220 649 6 441 298 0.50 



18.01.02 Privat placing 3 851 323.5 7 702 647 0.50 

















30.07.09 Rights issue 33 954 139.5 67 908 279 0.50 

13.07.10 Privat placing 37 315 599.5 74 631 199 0,50 

TTS ShARE vALUE 2010-2011 

30.04.10 

30.05.10 

30.06.10 

30.07.10 

30.08.10 

30.09.10 

30.10.10 

30.11.10 

30.12.10 

30.01.11 

30.02.11 

30.03.11 

NOK 

10 

8 

6 

4 

2 

0 

35

corporate governance 

TTS Group ASA (TTS) applies the Norwegian code of practice for 

corporate governance, dated 21 October 2010, as guidelines for its 

work. The following principles for corporate governance have been 

adopted by the Board of TTS Group ASA. 

1. Review of corporate governance 

The intent of TTS’ principles of corporate governance is to clarify the 

roles of the shareholders, the Board of Directors and management 

beyond what follows from legislation. These principles constitute part 

of the company’s annual report. “The Spirit of TTS” is available on the 

company’s website, www.ttsgroup.com and describes 1) Vision and 

Strategy 2) Corporate Culture and Core Values 3) Management and 

4) Ethical Guidelines. 

As a global group with companies in 14 countries, there is a continuous 

focus on our core values and corporate culture. Through a 

process involving all companies and divisions, we have evaluated and 

established our core values; which are integrity, openness, loyalty and 

initiative. Our core values shall influence TTS’ activities, in order that 

they contribute to cooperation and progress for each and everyone in 

the group. 

Through clearly defined core values TTS wishes to contribute to 

develop ment of the societies in countries where it is present. Much 

of TTS operations is based on trade across borders and culture. TTS 

takes s ocial responsibility through developing increased understanding 

of cultural differences and in this way increased tolerance. TTS has 

in cooperation with external expertise held seminars to enhance 

under standing of cultural differences. TTS has also sponsored Chinese 

cultural activities in Norway. 

2. business 

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

website. 

Article 3 defines the company’s purpose: The company’s purpose is 

to engage in industrial activities related to ship building, oil and gas 

production, and port activities, including any related activities, as well 

as participation in or acquisition of other enterprises. 

The group’s goals and main strategies are described on the group’s 

website; www.ttsgroup.com. 

3. Equity and dividends 

EQUITy 

Total balance at 31 December 2010 was 3 452 MNOK, with an equity 

capital of NOK 803 million, giving an equity-to-assets ratio of 23.3 %. 

The company’s solidity requirement is continuously assessed on the 

basis of the company’s goals, strategies and risk profile. In January 

2011 the company issued a subordinated convertible bond loan of 

200 MNOK. In addition the company renegotiated terms on bank and 

bond loan to include the convertible loan as part of the covenants 

from 31. December 2010. 

TTS covenants on bank loans are minimum equity of 800 MNOK 

and more than 25 % equity ratio. TTS also has an unsecured bond 

loan where the covenants’ requirement is 550 MNOK in equity and 

more than 22.5 % equity ratio, where equity ratio is normative 

for minimum equity. 

36 

SHAREHOLDER POLICy 

TTS aims to give our 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 by means of acquisitions will be 

implemented through balanced financing of equity and debt. 

The Annual General Meeting determines the annual dividend, based 

on the Board’s proposal. 

The Board of TTS Group ASA will propose to the Annual General 

Meeting, on 19 May 2011 that no dividend is paid out for the accounting 

year 2010. 

STRATEGy FOR FURTHER GROWTH 

TTS has, since 1996, completed fourteen successful acquisitions, 

establishing a leading position in its segments of the market for handling 

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

increased from about 260 MNOK in 1997 to about 4 200 MNOK in 

2008. In the last 2 years the turnover has been reduced and in 2010 

the turnover was 3 241 MNOK. 

The international offshore and shipbuilding industry has been affected 

by the financial crisis in the last part of 2008 and this has also affected 

TTS. The market conditions have become more demanding for TTS’ core 

businesses offshore and ships equipment, but have also affected port 

equipment. Accordingly, TTS significantly reduced its order backlog from 

the end of 2008 to the end of 2010. In the last quarter of 2010 TTS 

strenghtened its order backlog for the first time since 3rd quarter 2008 

as a consequence of a stronger market within drilling. In general the 

market for the Energy division has improved during the year while the 

markets for shipbuilding and port have been stable. 

In the coming years, TTS will continue to expand the group’s activities 

within its segments for handling equipment for ships, ports and offshore 

installations, in addition to advanced drilling equipment for offshore 

and land-based units. 

AUTHORISATIONS TO THE BOARD 

• On 15 June 2009, the Annual General Meeting adopted a resolution 

to give the Board authority to issue a maximum of 420 000 shares 

against cash redemption for the benefit of the company’s executive 

management. This authorisation is valid until 15 June 2010. 240 000 

shares have been issued in the form of options, with a possible 

first time exercise of options following the presentation of the first 

quarterly results for 2010, equivalent to a maximum of 50 % of 

the allocated options. The number of shares for further exercise of 

options constitutes 12.5 % following the presentation of the results 

for the second, third and fourth quarter of 2010 and the first quarter 

of 2011, in addition to options not previously exercised. 

• On the 3 June 2010, the Annual General Meeting adopted a resolution 

to give the board authority to issue a maximum of 7 000 000 shares 

against cash or non-monetary redemption including merger. The 

authority is valid to the Annual General Meeting 19 May 2011. On 

13 July 2010 the authority was utilized to issue 6 722 920 shares 

to Scana Industrier ASA in a right issue at NOK 6.30 per share. 

• On 3 June 2010, the Annual General Meeting adopted a resolution 

to give the board authority to issue 420 000 shares against cash

edemption for the benefit of the company’s executive management. 

This authorisation is valid to 19 May 2011. 360 000 shares have 

been issued in the form of options, with a possible first time exercise 

of options following the presentation of the first quarterly results 

for 2011, equivalent to a maximum of 50 % of the allocated options. 

The number of shares for further exercise of options constitutes 

12.5 % following the presentation of the results for the second, 

third and fourth quarter of 2011 and the first quarter of 2012, in 

addition to options not previously exercised. 

• On 3 June 2010, the Annual General Meeting adopted a resolution 

to give the board authoritiy to issue 420 000 shares against cash 

redemption for the benefit of the company’s employees. This authorisation 

is valid to 19 May 2011. No shares has been issued on the 

basis of this authorisation as of 31 March 2011. 

4. Equal treatment of shareholders and transactions 

with closely related parties 

SHARE CAPITAL AND SHAREHOLDERS 

The share capital at 31 December 2010 was 37 315 599.50 NOK divided 

into 74 631 199 shares at a nominal value of 0.50 NOK each. The 

company has only one class of freely negotiable shares, which are listed 

on the Oslo Stock Exchange’s Match List under the ticker symbol TTS. 

Each share is allocated one vote. 

A list of the TTS’ 20 major shareholders is available on the company’s 

website. 

OWN SHARES 

Own shares are purchased on the Oslo Stock Exchange. At 31 March 

2011, the company’s own shareholding was 35 210. 

THE BOARD OF DIRECTORS AND GROUP MANAGEMENT 

TTS Group ASA’s Board of Directors and group management are viewed 

as closely related parties of TTS, using the Oslo Stock Exchange for 

the transaction of TTS shares. 

There have been no closely related transactions between the Board 

of Directors or the group management and TTS. According to the 

Norwegian code of practice for corporate governance, a company 

is advised to implement guidelines assuring that closely related parties 

give notice of closely related transactions. Based on the current Board 

of Directors and Group Management, the company has deemed such 

guidelines to be unnecessary. 

According to the Norwegian code of practice for corporate governance, 

a company should list reasons for deviation from existing shareholders 

preferential status when making a right issue. TTS aim to follow the 

Norwegian code when and if applicable. 

RELATED COMPANIES 

The joint venture companies in the TTS group are treated as related 

companies with transactions as shown in Note 19. 

5. Freely negotiable shares 

As transpires from the Articles of Association posted on the company’s 

website, no form of transfer restriction has been effectuated. 






6. Annual General Meeting 

The Annual General Meeting is usually held at the end of May/beginning 

of June. The Annual General Meeting for 2010 will be held on 19 May 

2011, in accordance with the financial calendar for 2011. 

Agenda papers for the Annual General Meeting, including the nominating 

committee’s recommendations, are distributed to the shareholders 

at the latest three weeks prior to the Annual General Meeting, 

and are available on the company’s website at the latest three weeks 

prior to the Annual General Meeting. The agenda papers are detailed 

enough to permit the shareholders to make a decision on all items up 

for consideration. 

Shareholders unable to attend may vote by proxy. Proxy forms will be 

sent out for each shareholder to fill in and return to the admini stration. 

On the proxy form, the shareholder may vote on each individual item. 

The registration deadline is normally set to the day before the Annual 

General Meeting. 

The Chairman of the Board, chairman of the nominating committee, 

auditor and CEO are present at the Annual General Meeting, in addition 

to other board members when appropriate. The Annual General Meeting 

elects its own chair; usually this is the Chairman of the Board. 

On account of a low turnout for the general assemblies, TTS does not 

deem it necessary for the full Board of Directors to be present. We have, 

for the same reason, found it unnecessary to establish routines to secure 

independent chairing of the Annual General Meeting. Should there be 

particular items on the agenda requiring need for such measures, this 

will be individually considered for each individual general assembly. 

The Annual General Meeting will be given the opportunity to vote 

for each of the candidates up for positions in the company’s bodies. 

7. nominating committee 

In TTS, a nominating committee is statutory according to the Articles 

of Association. In accordance with the Annual General Meeting 

on 3 June 2010, a nomination committee was appointed with the 

following members: 

NAME POSITION 

Johan Aasen Trustee, Skagenfondene 

Bjørn Sjaastad Consultant 

Bjørn Olafsson Managing Director, Frende Liv AS 

The nominating committee appoints its own chairman of the committee. 

Bjørn Olafsson was elected to chair the committee. 

No one in the nominating committee is a member of the Board of 

TTS Group ASA or part of the management of TTS, as such ensuring 

independence. The nominating committee has knowledge of TTS and its 

shareholders, so that the interests of the shareholders are protected. 

The nominating committee recommends candidates to the Board and 

related remuneration, where the nominating committee’s recommendation 

is substantiated. 


the chairman of the nominating committee should be elected 

at the Annual General Meeting and guidelines for its work should 

be established. In the opinion of TTS, it is more appropriate that the 

committee decides on the distribution of tasks, including the election 

of a chairperson. The Annual General Meeting determines the 

nominating committee’s remuneration. 

37

The members of the committee including practical information as 

deadlines for nominations and contact information is listed on the 

company’s website. 

8. corporate Assembly and board of Directors, 

composition and independence 

As TTS Group ASA have fewer than 200 employees, the management 

model does not include a corporate assembly. There are two employees 

representatives on the Board of TTS Group ASA. 

In accordance with the Annual General Meeting on 3 June 2010, 

the shareholders elected the following members to the Board: 

NAME STATUS POSITION 

Trym Skeie Re-elected Chairman, 

Skagerak Venture Capital AS 

Anne Breive Re-elected CFO, Løvenskiold Vækerø AS 

Kjerstin Fyllingen Not for election Group Director, Tryg AS 

Bjarne Skeie Re-elected Skeie Technology AS 

Rune Selmar Elected Consultant 

In December 2010 Rune Selmar resigned as a director from the board 

of TTS Group ASA. The board made the decision to elect his successor 

at the Annual General Meeting on the 19 May 2011. 

In accordance with ordinary election of two employee representatives 

to the Board of TTS Group ASA, the following were appointed to the 

Board in September of 2010: 

NAME COMPANy POSITION 

Karen T. Mørkestøl TTS Energy AS Director 

Jarle Dyrdal TTS Energy AS Director 

Morten Heiseldal TTS Energy AS 1st Deputy Director 

Anne Karin Bedringås TTS Energy AS 2nd Deputy Director 

TTS’ Board members are elected for a two-year period. Each Board 

member’s CV is available in the Annual Report. 

Trym Skeie and Bjarne Skeie are both directly and indirectly major 

shareholders in the company. The other shareholder-elected Board 

members are independent of management, the company’s major shareholders 

and primary business connections. Furthermore, the composition 

of the Board upholds shareholder interests, and the company’s 

requirements for expertise, capacity and diversity in a fine collegiate 

body. The complementary expertise of the Board ensures the Board 

member’s ability to assess matters from different perspectives before 

reaching a final conclusion. 

At 31 March 2011, Trym Skeie, Chairman of the Board, had 2 160 735 

shares in TTS Group ASA, through Tamafe Holding AS, in which he 

owns all of the voting shares. Bjarne Skeie, Director for the Board, had 

9 882 912 shares in TTS Group ASA, through Skeie Technology and 

Skeie Consultants, in which he owns all of the voting shares. The 

other Directors of the Board do not hold any shares in TTS Group ASA. 

None of the Board Directors hold any options. In 2010, the turnout for 

Board meetings was good. 


the Chairman of the Board should be elected by the Annual 

General Meeting. In TTS, the Board appoints the chairman. 

38 

9. The work of the board 

The Board has eight scheduled meetings annually, and an annual meeting 

plan is set up. Further meetings are held as required. A total of 13 board 

meetings were held in 2010. 

The work of the Board has been intensified as a result of the financial 

challenges that TTS was up against in 2010. Owing to this situation, 

the Board’s primary focus in the past quarterly periods has been risk 

analyses and risk management. Procedures for the Board and management 

have been established, focusing on distribution of tasks and 

responsibilities. The Board complies with the rules regarding disqualification 

pursuant to the Joint Stock Public Companies Act, Section 6-27. 

The group’s use of nominating committee has been made statutory 

in its Articles of Association. In addition, the Board of TTS Group ASA 

has appointed an audit committee: 

AUDIT COMMITTEE 

Anne Breive (Chairman) 

Kjerstin Fyllingen 

Rune Selmar (up to December 2010) 

At present, the Board does not have a compensation committee. This 

is assessed on an annual basis. TTS previously had a compensation 

committee. There are no other committees in the Board. At present, 

TTS does not have a deputy chairman. This is assessed on an annual 

basis. TTS previously had a deputy chairman. 

The board conducts an self-assessment annually. 

10. Risk management and internal control 

The TTS Group has a decentralized structure with operative boards in 

each company holding an average of six to eight board meetings a 

year. The largest company in each division reports on all the companies 

in its own division. The President and CEO is Chairman of the Board in 

all of the division’s Board of Directors. The head of division is Chairman 

of the Board of the companies within the division. In addition to this, 

the boards consist of personnel from various companies in different 

divisions, as well as external board members as required. An authority 

matrix has been established detailing which matters may be dealt with 

at the various levels. 

Procedures and systems upholding uniform reporting have been 

prepared. The administration prepares monthly reports on results, which 

are submitted to and reviewed by the members of the Board. In 

addition, more comprehensive quarterly financial reports are prepared, 

which are reviewed at the quarterly period board meetings. Included 

in the reporting are any variances or measures for the most significant 

projects. In addition to continuous risk management, the Board and 

administration undertake specific risk analyses in connection with 

major investments and contract signing, as well as a continuous risk 

analysis of projects. Risk management is part of the Board’s work, and 

in addition to a continuous review, this is moreover a part of budget 

and strategy related work. 

The Board of Directors undertakes a thorough review of the company’s 

financial status in the Directors’ Report. This review includes a further 

description of the main elements of HSE and risk aspects.

11. Remuneration of the board of Directors 

Based on the recommendation of the nominating committee, the 

Annual General Meeting determines the remuneration of the Board 

of Directors. Remuneration is not linked to the company’s result. 

There is no share option program for the Board of Directors. 

Members of the Board of Directors, or companies with whom they 

are associated, are not usually given separate tasks by TTS in addition 

to their function as members of the Board. Still, should such tasks be 

assigned, this will be based on the approval of the Board of Directors. 

There were no such assignments in 2010. 

The nominating committee’s proposal for remuneration of the Board 

of Directors is presented in the call for the Annual General Meeting on 

19 May 2011. 

12. Remuneration of executive management 

The Board has issued guidelines for stipulation of salaries and other 

remunerations to executive management. The President and CEO’s 

terms are stipulated by the Board. 

The Board’s attitude to management salaries is that these should be 

competitive and motivating, but not ahead of the market with regard 

to their level. Bonus is calculated on the basis of measured results. 

Guidelines are presented in Note 4. According to the note, share 

options constitute part of the remuneration. Share options for executive 

management (see Item 3 – Authorisations to the Board) include group 

management. Exercise of share options is dependent on the share price 

listed on the Oslo Stock Exchange. At the end of 2010 and at 31 March 

2010, in all 600 000 authorised share options had been issued to group 

management. 240 000 options may be exercised up to 15 June 2011 at 

a price of 7.55 NOK and 360 000 options that may be exercised up to 

3 June 2012 at a price of 5.91 NOK. 

DISTRIBUTION OF OPTIONS AND SHARES AT 31 MARCH 2011 

Number of Number of 

Name Position options of shares 

Johannes D. Neteland CEO 240 000 185 000 

Arild Apelthun CFO 60 000 0 

Ivar K. Hanson Head of division 120 000 52 422 

Lennart Svensson Head of division 120 000 200 

Inge Gabrielsen Head of division 60 000 450 

Total 600 000 238 172 






13. information and communication 

The company has established guidelines for the handling of information 

and communication. These guidelines also address contact with the 

owners separate from the general assembly. The reporting by TTS of 

financial and other information is based on transparency, respecting 

the principles of equal treatment of stock market participants. 

A financial calendar is available on the company’s website. Any 

dividend proposal is presented in the fourth quarterly report and in 

the call for an annual general meeting. 

Information for the shareholders of the company is posted on the 

company’s website at the same time as it is distributed to the shareholders 

(with the exception of the call for an annual general meeting, 

see Item 6). 

14. company takeover 

The company’s Articles of Association do not include mechanisms 

aimed at preventing takeover, nor are other hindrances in effect to 

reduce transfer of the company’s shares. 

No main principles have been established for TTS’ response to 

a prospective takeover bid, other than that the Norwegian code of 

practice for corporate governance will have a normative function. 

15. Auditor 

The auditor conducts a minimum of two meetings a year with the 

audit committee, part of the meeting without management present. 

One of the meetings is conducted in connection with the review of the 

annual accounts, and one of the meetings deals with the company’s 

internal control. The audit committee meets with the auditors to go 

through the audit plan for the year where any specific areas are being 

discussed. The auditor is present at board meetings as required. 

Remuneration payable to the auditor, specifying the division between 

auditing and other services, is shown in Note 4. 

The extent of services other than audit services is addressed in the 

meeting between the auditor and the audit committee. It has not been 

deemed necessary by the Board to implement additional guidelines 

with regard to the management’s access to making use of the auditor 

for services other than auditing. 

39

Senior Management 

johannes D. neteland 

PRESiDEnT & cEO 

Neteland (53) is President & CEO of 

TTS Group ASA. He holds a Master 

of Science in Business degree from 

the Norwegian School of Economics 

and Business Administration (NHH). 

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. 

40 

ivar k. hanson 

ExEcUTivE vicE PRESiDEnT 

Hanson (46) is division Director of 

Marine and President of TTS Marine AS. 

He holds a Master of Science in Business 

degree from the Norwegian School of 

Economics and Business Administration 

(NHH) and is a mechanical engineer. 

Hanson has worked as a contract co - 

ordinator 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. He took up 

his current position with TTS in 2008. 

Lennart Svensson 


Svensson (54) is Director of the Port 

and Logistics division. Svensson is a 

Naval Architect and Mechanical Engineer. 

He has eight years of experience from 

various enter prises that are currently 

part of the MacGregor Group and two 

years as Marketing Director at Daros 

Piston Rings AB. Svensson has worked 

for TTS since 1996 and as President 

in TTS Port Equipment AB since the 

company was established in 2005. 

He took up his current position in 

the autumn of 2008.

inge Gabrielsen 


Gabrielsen (58) is Executive Vice President 

of the TTS Energy division and President 

of TTS Energy AS. Gabrielsen holds a degree 

as M.Sc. Naval Architect and Marine 

Engineering from the Norwegian Institute 

of Technology (NTH) in Trondheim. 

Gabrielsen started in TTS Sense in 2007 

and came from the position as Vice 

President for Vessel Mangement and 

Equipment Group in Subsea 7 ASA. Prior 

to this he worked for different companies 

in Aker Maritime for 10 years. Until he 

took up his current position in TTS in the 

autumn of 2009, Mr Gabrielsen was Vice 

President Operations in TTS Sense AS. 

Arild Apelthun 

cFO 

Apelthun (39) Apelthun is CFO in the 

TTS Group ASA. Apelthun comes from 

the position as CFO of Aker Process, 

based in the Netherlands. Apelthun 

has been holding various positions in 

subsidiaries of Aker Solutions in the 

USA and Europe over the last 7 years. 

Prior to that he has been working with 

ABB, Aker Maritime and Ementor in 

Norway. Arild Apelthun holds a degree 

as Master of Science in Business from 

Bodø Graduate School of Business. 

Apelthun took up his current position 

with TTS in 2010. 






41

The board of Directors TTS Group ASA 

Trym Skeie 

chAiRMAn OF ThE bOARD 

Skeie (42) is one of the main founders of 

Skagerak Venture Capital AS (SVC), where 

he currently is a partner and holds the 

Chairman seat. Before establishing SVC 

in 2006, Trym was with Kistefos Venture 

Capital as an Investment Manager within 

the IT/Telecom area. He also has an offshore 

industry background through active 

involvement and Board seats in companies 

such as Sinvest ASA, Premium Drilling AS, 

Venture Drilling AS and Wellquip AS. 

Earlier he has worked as a Vice President at 

Silicon Capital Ltd., Manager in Accenture 

and structural design engineer in Hydralift 

ASA. Skeie`s current Chairman/directorships 

in SVC portfolio includes: UFIS Airport 

Solutions AS, Presens AS, Mobile Nordic AS 

and Nordic Energy Services. Skeie holds 

the equivalent of a Masters degree from 

the Norwegian School of Economics and 

Business Administration (NHH), and a 

MSc. from the Norwegian University of 

Science and Technology (NTH). Skeie 

has been chairman of the board since 

November 2009. He has 2 160 735 shares 

and no options in TTS Group ASA. Skeie 

is a Norwegian citizen. 

42 

kjerstin Fyllingen 

DiREcTOR OF ThE bOARD 

Fyllingen (53) is corporate director of 

Tryg, Private & Commercial Norway. 

She holds a Diploma in Economics and 

an MSc in Leader ship, both from the 

Norwegian School of Management BI. 

Fyllingen previously worked for Vital 

Forsikring, where she held various 

managerial positions in charge of the 

business segments Public Sector, as well 

as Customer Service Private & Commercial. 

Fyllingen has furthermore held various 

managerial positions in DnB within the 

areas of IT and Economics. She has been 

head of Infodoc International and held 

various positions within Economics in DnV. 

Fyllingen has been a member of the 

board since 2008. She has no shares or 

options in TTS Group ASA. Fyllingen is 

a Norwegian citizen. 

Anne breive 


Breive (45) is CFO of Løvenskiold-Vækerø AS. 

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 was CFO of Statnett from 2005- 

2008. Breive has been a member of the 

TTS Group ASA board since 2005. She 

has no shares or options in the company. 

Breive is a Norwegian citizen.

jarne Skeie 


Skeie (65) has an engineering background 

and is known as an entre preneur, industrial 

developer and investor in the rig, offshore 

and equipment industries. This includes the 

founding of Maritime Hydraulics AS (1970), 

as well as acquisitions and restructuring of 

a number of companies that were merged 

and listed on the Oslo Stock Exchange 

as Skeie Group (1986/87). He undertook 

further establishments and acquisitions of 

new companies, one of which was Hydralift 

(1990), a company that saw tremendous 

organic growth through acquisitions. 

Hydralift was sold to National Oilwell in 

the autumn of 2002, at the time the major 

shareholder of TTS Group ASA (39.1 percent). 

He founded Sinvest in 2002, which was 

sold in 2006. In 2006, Skeie Drilling & 

Productions was established, and in 2007, 

Skeie energy was established. Per March 

2011 Bjarne Skeie owns 9 882 912 shares in 

TTS Group ASA, through Skeie Technology 

and Skeie Consultants, in which he owns all 

of the voting shares. He holds no options 

in TTS Group ASA. Skeie was Chairman of 

the Board of TTS Group ASA in the period 

2002-2003 and has been a member of 

the board since 2008. Skeie is a Norwegian 

citizen. 

karen T. Mørkestøl 


Mørkestøl (58) has completed upper secondary 

school with emphasis on English language 

and music, and has further completed a 

one-year course at a college of commerce. 

Mørkstøl worked for ship chandler Oskar 

Pedersen AS from 1972 to 1980 as a secretary/purchaser 

of equipment for deck and 

machinery. Following a period of temporary 

positions with various companies, she was 

employed by Maritime Hydraulics/Aker 

Solution as salary administrator in charge 

of wages, travel and timesheets. Mørkestøl 

has held a position with Sense Technology/ 

TTS Energy since 2000. Her responsibilities 

have included accounting, wages, secretarial 

duties, administration and human resources. 

In 2006, Mørkestøl was appointed Manager 

HR & Administration. She was appointed 

employee representative of the Board of 

TTS Group ASA in 2010. Mørkestøl holds 

3 217 shares in TTS Group ASA, and has 

no share options. Mørkestøl is a Norwegian 

citizen. 






jarle Dyrdal 


Dyrdal (39) holds a Bachelor’s degree in 

Industrial Electronics from the University of 

Agder. He has worked for Sense Technology, 

now TTS, since 2001. For the duration of this 

period he worked on design and development 

of drilling equipment, and he currently 

holds the position of Vice President Products 

& Technology in the TTS Energy division in 

Kristiansand. From 1996 to 2001, he worked 

for Aker Solution MH in Kristiansand, in 

charge of design and development of drilling 

equipment. Dyrdal was a member of the 

Board of Directors of TTS Offshore Handling 

Equipment from 2008 to 2010, and was 

appointed employee representative on the 

Board of TTS Group ASA in 2010. He holds 

30 227 shares in the company, and has no 

share options. Dyrdal is a Norwegian citizen. 

43

Director’s report for 2010 

introduction 

For the TTS Group (TTS), 2010 was an eventful year. The markets 

are recovering or stabilising in most of the business areas in which 

the group operates, and the group has taken a number of actions 

that have positively affected the results and financial strength. 

In 2010, TTS’ turnover was 3 241 MNOK, compared to 3 825 

MNOK in 2009. This decrease in turnover is primarily a result of 

lower level of activity in the Energy division. The group reported 

an EBITDA of 4 MNOK, an improvement of 88 MNOK from 

2009. The group reports a net loss of 197 MNOK, an improvement 

of 51 MNOK compared to 2009. 

Despite an unsatisfactory annual result, it represents a considerable 

improvement compared to 2009. The Marine division and 

the Port and Logistics division deliver satisfactory results, the 

Energy division’s results has been influenced by a weak market 

throughout 2010, in addition to the write-downs and cost overruns 

on projects. 

The market for marine equipment has shown a steady development 

throughout the year, and has stabilised. The same applies to 

the Port and Logistics division where especially the market for port 

equipment has improved. Within the business area of transport 

solutions for industry, the market has gradually improved. 

Furthermore, the market for drilling equipment and other offshore 

rig equipment showed a distinct improvement in the final quarter 

of 2010. In fourth quarter TTS signed a contract for delivery of 

two jack-up drilling packages for approximately 460 MNOK. In 

April 2011 TTS signed contracts for delivery of two additional 

drilling packages. The market for offshore handling equipment and 

land rigs remains weak. 

In September, TTS reached an agreement with the bankruptcy 

estate of Ability Drilling by means of court-administered mediation. 

The agreement entailed that TTS purchased a land rig with seller’s 

credit over two years for 75 MNOK. All other claims between 

the parties were waived. The claim from the bankruptcy estate was 

580 MNOK. 

In January 2011, TTS issued a subordinated convertible bond 

loan of 200 MNOK to strengthen the group’s financial flexibility. 

This, in conjunction with adjustments in the loan agreements with 

banking partners and bondholders, ensure that the company is in 

compliance with its loan covenants as of 31 December 2010. 

Targets and strategy 

TTS’ goal is to develop and supply equipment for the maritime 

industry and for the oil and gas industry, with products and of a 

quality that strengthens our customers’ productivity and value 

generation. The group’s expertise and resources are aimed at sales, 




DiREcTOR’S REPORT AnD AccOUnTS 45 -116 


design and engineering, assembly and testing of products, as well as 

the priority area service and after sales. 

TTS’ strategy is to build up and maintain a relationship of trust 

with our customers, through development and delivery of products 

that are competitive with regard to price and quality. 

TTS has based its growth and development on a combination 

of organic growth and acquisition of new business areas to create 

positive synergies product wise/market wise and/or cost wise. This 

strategy will be continued within the parameters of the group’s 

three defined areas of operation. 

Operations 

TTS is an international group that develops and supplies handling 

equipment to the maritime industry and to the oil and gas industry. 

As of 2010, operations were reorganised into three divisions; 

Marine, Energy and Port and Logistics. 

In 2010, TTS established a new branch office in Brazil in order to 

increase its global presence with regard to the sale of new projects 

and as part of a strategy to build up a network of service and after 

sales. In all, the group comprises 26 operative units in 14 countries. 

TTS is aiming to simplify its legal structure and several mergers 

have been done in 2010. 

In China, TTS holds a 50 % ownership interest in the two joint 

venture companies, TTS Hua Hai Ships Equipment Co. Ltd. and 

TTS Bohai Machinery Co. Ltd., together with partners China State 

Shipbuilding Corporation (CSSC) and Dalian Shipbuilding Industry 

Co. (DSIC) respectively. Furthermore, the joint venture company 

TTS Hua Hai Ships Equipment participates with an 40 % ownership 

in the company Jiangnan TTS (Nantong) Ships Equipment Co. Ltd,. 

which manufactures hatch covers. 

Divisions and markets 

The Marine division, which delivers a broad range of products and 

services to the maritime industry, is experiencing a stable market 

with a steady level of contracting of new-buildings and demand for 

service and maintenance. The market in China and South-Korea has 

shown a healthy development through the year. 

The Port and Logistics division delivers production lines and 

systems for cargo handling in shipyards and other industries, as well 

as cargo systems and transport systems for ports. In general, the 

markets for this division remained stable in 2010, with an increase 

in the level of activity toward the end of the year in individual 

segments. 

The Energy division, which delivers drilling equipment to offshore 

rigs, handling systems to offshore vessels, as well as complete land 

45

igs, has remained slow for most of 2010. In the fourth quarter, 

however, the market for drilling equipment recovered, particularly 

with regard to the jack-up segment. The market for offshore handling 

and for land rigs within our segment remains weak. 

The TTS Group 

The parent company, TTS Group ASA, has its head office in Bergen, 

in Norway, and is listed on the Oslo Stock Exchange. 

At the end of 2010, the group had 1 168 employees, of which 

1 057 with regular employment. Geographically, they are distributed 

as follows: 

COUNTRy EMPLOyEES 

Norway 458 

Germany 169 

China 168 

Sweden 158 

Other countries 215 

Review of the annual accounts 

AccOUnTinG PRinciPLES 

TTS Group ASA presents its annual accounts pursuant to the 

Norwegian Accounting Act’s Section 3-9 annual accounts, in 

accordance with IFRS, International Financial Reporting Standards. 

TTS Group ASA’s group accounts are presented according to 

generally accepted accounting principles. The accounting principles 

are the same as for the annual accounts for 2009. 

AnnUAL RESULT FOR 2010 

MNOK 2010 2009 

Turnover 3 241 3 825 

EBITDA 4 -84 

Operating profit -48 -231 

Net financial items -108 -81 

Profit/loss before tax -156 -312 

Net profit/loss -197 -248 

Turnover for 2010 was 3 241 MNOK and is down from 2009 

mainly due to lower activity in the Energy division. EBITDA of 

4 MNOK is an improvement from 2009 and is the result of 

satis factory profit in Marine and Port and Logistics divisions while 

there were significant operational losses in the Energy division. The 

increase in net financial items is partly due to unrealised losses on 

foreign exchange. The tax expense for the year is influenced by 

adjustments in capitalized deferred tax assets and taxes in foreign 

subsidiaries. 

46 

bALAncE ShEET 

Total assets at 31 December 2010 were 3 452 MNOK compared 

to 3 689 MNOK in 2009. Equity at the end of the year was 803 

MNOK, equivalent to an equity ratio of 23.3 % compared to 

25.4 % at the end of the last year. 

In connection with the issue of a subordinated convertible bond 

loan of 200 MNOK in January 2011, TTS renegotiated terms 

with the bank syndicate Nordea/Sparebanken Vest and the bond 

loan. The agreement entails that the convertible loan is to be 

included in the equity capital ratio upon the testing of covenant 

from 31 December 2010. The requirement is an equity capital ratio 

of 25 %/800 MNOK on the loans from the bank syndicate and 

22.5 %/550 MNOK on the bond loan. At the end of 2010 TTS is 

in compliance with the covenants on the loans shown above. 

In July 2010, a private placement of 9.9 % of the outstanding 

shares for 42 MNOK. 

At the end of 2010, TTS had a net interest-bearing debt of 799 

MNOK compared to 839 MNOK at the end of 2009. During 2010, 

TTS has repaid 100 MNOK in loans. 50 MNOK was related to 

the facility from the bank syndicate Nordea/Sparebanken Vest and 

50 MNOK was related to the bond loan. The establishment of debt 

relates to the purchase of land rigs from Ability Drilling’s bankruptcy 

estate by means of an interest-bearing seller’s credit of 75 MNOK. 

Financial fixed assets at the end of the year were 128 MNOK, up 

from 111 MNOK at the end of 2009. Of this, the ownership interests 

in the two joint venture companies in China represents 121 MNOK 

compared to 94 MNOK in 2009. 

Based on an evaluation of future earnings and expected timing 

of utilisation of deferred tax, the company reduced the deferred tax 

assets with 88 MNOK. Compared to 2009 the deferred tax asset 

has been reduced with 25 MNOK at year end. 

TTS significantly improved its working capital in 2010. The 

reduction of stock and other finished products, along with an 

increased order intake resulting in advance payment from customers, 

are the main reasons for the reduction in working capital. 

However, there are still 200 MNOK worth of finished products, 

primarily related to land rigs. TTS is actively focusing on reducing 

its working capital requirements. 

The TTS Group has income and expenses in foreign currencies, 

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

instruments, described 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 at 

31 December 2010. The Board and management are not aware of 

any events that have occurred subsequent to the balance sheet date

of 31 December 2010 that may be of material significance to 

TTS and the annual accounts for 2010. 

At the end of 2010, TTS Group ASA had a share capital 

of 37 315 599.50 MNOK divided into 74 631 199 shares at 0.50 

MNOK each. The company holds 35 210 own shares. 

cASh FLOW 

Net cash flow for the group in 2010 was 80 MNOK. Cash flow from 

operations where positive 132 MNOK mainly due improved working 

capital. The group made investments for approx. 27 MNOK during 

2010. Other elements influencing the cash flow was instalments 

on bond and bank loan, seller’s credit as a consequence of the 

agreement with the bankruptcy estate of Ability Drilling and a 

share issue in July and financial expenses. 

R&D 

During 2010 a total of 11 MNOK has been capitalized relating to 

research and development. 

ORDER bAckLOG 

The order backlog at 31 December 2010 was 3 966 MNOK compared 

to 4 510 MNOK last year. These figures include 50 % of the order 

backlog of the joint venture companies in China. 

The order backlog has been adjusted according to confirmed and 

anticipated cancellations as a result of the economic development 

in markets significant to TTS. 

cOnTinUED OPERATiOn 

The requirement for continued operation pursuant to Section 3-3 

of the Norwegian Accounting Act has been fulfilled, and the annual 

accounts have been prepared according to this. At 31 December 

2010, the equity ratio was 23.3 % of a total balance of 3 452 MNOK, 

with a net interest-bearing debt of 799 MNOK. 

business areas 

TTS develops and supplies and delivers handling equipment to the 

maritime industry and to the oil and gas industry. In 2010, operations 

were organised into three divisions. 

MARinE DiviSiOn 


Turnover 2 230 2 326 

EBITDA 158.7 93.7 

EBITDA margin (%) 7.1 4.0 

The Marine division reported a turnover that was somewhat lower 

than in 2009, however, income increased notably since the result 

for 2009 was affected by appropriations and write-downs. In 2010 

the Marine division has initiated a number of improvement efforts, 

among other things relating to procurement and delivery model. 

These efforts are described in more detail in the annual report. 

At the end of the year, the order backlog was 3 204 MNOK 

compared to 3 723 MNOK in 2009. The Order backlog includes 

50 % of the joint ventures. 

EnERGY DiviSiOn 


Turnover 712 1 180 

EBITDA -168.6 -192.0 

EBITDA margin (%) -23.7 -16.3 

The level of activity within drilling and offshore equipment has 

remained low in 2010, and together with low margins on existing 

contracts, as well as cost overruns, it resulted in the weak results 

seen in 2010. In 2010 a number of initiatives have been taken to 

improve profitability, mainly relating to consolidation and efficiency 

improvement. Toward the end of 2010, the Energy division 

strengthened its order backlog significantly, with two drilling 

equipment packages to the Prospector rigs, currently under 

construction in China, at a total value of approximately 460 MNOK. 

In April 2011 the division signed contracts for delivery of two 

additional drilling packages to the same client. 

At the end of 2010, the division’s order backlog was 690 MNOK 

compared to 545 MNOK in 2009. 

PORT AnD LOGiSTicS DiviSiOn 


Turnover 299 331 

EBITDA 20.6 19.6 

EBITDA margin (%) 6.9 5.9 






The division reported a somewhat lower turnover compared to 

2009, but increased its profitability. The division has had a high 

level of activity as regards port equipment, and has improved its 

margins compared to 2009. The market for lifting equipment 

was fairly weak in 2010. During 2010 there have been a number of 

adjustments to trim the cost level. 

At the end of 2010, the order backlog was 102 MNOK compared 

to 242 MNOK at the end of 2009. 

47

Risk factors and risk management 

The group is exposed to various types of risks, such as market risk 

relating to the development relevant markets, financial risk relating 

to credit, liquidity and foreign currency, as well as operational risk 

relating, among other factors, to the execution of projects. 

On a monthly basis, the Board reviews operating reports from 

the administration. In addition to the continuous risk management, 

the Board and administration carry out specific risk analyses in 

connection with major investments, contract signing, as well as 

continuous risk analyses of projects. 

MARkET RiSk 

There are risks related to the market development of all the 

markets in which TTS is represented. TTS closely monitors market 

indicators such as contracting of vessels, rig utilisation and rate 

level. 

Contracting of newbuild for both vessels and drilling rigs are a 

risk factor for the group as it represents a significant part of the 

group’s market. Risk relating to aftersales and service is somewhat 

lower, but also here the demand is influenced by rate levels for 

drilling rigs and transportation. 

At the start of 2011, TTS has a significant order backlog. As the 

delivery time from most of the equipment for TTS is between 

6 months to 2 years, TTS is exposed to market risk. Uncertainty in 

the global economy, entails an uncertainty in relation to the order 

backlog with regard to cancellations or postponements of orders. 

FinAnciAL RiSk 

TTS is exposed to financial risk which comprises credit risk, liquidity 

risk and currency risk. 

Credit risk is the potential financial losses should a contractual 

partner fail to fulfil his obligations. The customer base is differentiated, 

and with the exception of the past two years, the group has 

seen only a modest loss on accounts receivable. The development of 

the global economy in general, and of the ship building industry and 

offshore industry in particular, has resulted in an increased credit 

risk. On this basis, the group has implemented actions to limit 

risk exposure, by, among other factors, evaluating all our business 

partners. 

In September 2010, TTS reached a settlement with Ability 

Drilling’s bankruptcy estate by means of court-administered 

mediation. The settlement entailed that TTS purchased a land rig 

from the bankruptcy estate for 75 MNOK with an interest-bearing 

seller’s credit for the entire amount over two years, while all other 

claims between the parties are waived. 

Liquidity risk is the risk of TTS being unable to fulfil its financial 

48 

obligations as they fall due. At 31 December 2010, TTS has an 

unused bank overdraft of 249 MNOK. TTS further strengthened 

the group’s liquidity in January 2011, by issuing a subordinated 

convertible loan of 200 MNOK. 

The group has implemented measures to reduce its working 

capital.The group is actively working to sell three land rigs, which 

at 31 December are booked as trading stock. TTS expects a large 

portion of the sales proceeds from these rigs to be used for down 

payment of loans. Furthermore, TTS has initiated a project to 

optimise the company’s routines and processes in order to reduce 

the working capital requirement. 

The group has considerable liquidity located outside of Norway. 

TTS is working toward the most efficient liquidity flow between 

the parent company and the various subsidiaries located abroad, 

such as by including more companies in the group’s group account 

system. 

Covenant requirements on the company’s bond loan are equity 

of a minimum of 550 MNOK and an equity ratio of 22.5 %. TTS 

fulfils the covenants requirement at the end of 2010. The bond 

loan falls due 24 May 2012. 

The group’s agreement with the bank syndicate headed by 

Nordea, is renegotiated annually, and the agreement falls due 

31 December 2011. 

According to the agreement, proceeds from the sale of property 

shall be used to pay off a supplementary facility of 150 MNOK 

during the course of the year, and at the latest by 31 December 

2011. 

The group is exposed to a considerable currency risk as a result 

of its high degree of export trade. The group’s primary trading 

currencies are EUR and USD. The group’s policy is to limit currency 

risk through hedging all contractual income. 

OPERATiOnAL RiSk 

The group’s deliveries are primarily organised in the form of 

projects. Operational risks in projects are mainly related to project 

management and technical execution of projects. 

The group is continuously working to improve its work processes, 

develop competence and project management tools. The company 

has carried out considerable development work on new products in 

the past year and expects this to contribute to a reduction of future 

operational risk related to sale and implementation of new projects.

Organisation 

ORGAniSATiOn AnD EnviROnMEnT 

At the end of 2010, the number of employees in the TTS Group 

was 1 057. 

Absence due to illness was 3.1 % in 2010, compared to 2.8 % in 

2009. 23 minor personal injuries were reported during the year, 

compared to 12 in 2009. The number of days of absence due to 

personal injuries was 115 days compared to 60 days last year. TTS 

is systematically and continuously striving to achieve improvements 

with respect to Health, Safety and Environment (HSE).TTS has 

prepared its own HSE Handbook, which has been translated into 

most of the languages native to the group’s employees. 

TTS has committed considerable resources in establishing a 

cross-border connection between the managers and employees. In 

all of the group’s companies and divisions, work is done to establish 

and maintain a joint corporate culture based on the core values 

integrity, openness, loyalty and initiative. These core values shall 

influence TTS’s activities, so that they contribute to cooperation 

and progress for each and everyone in the TTS Group. 

TTS’ activities are primarily related to sale, design and engineering, 

as well as assembly and testing of equipment. Assembly 

and testing are based on a limited use of chemicals that may be 

harmful to human health or to the environment. 

The products supplied by TTS are primarily electro-hydrauli cally 

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 professional 

and personal development. 

Among TTS’ employees, most of them have engineering expertise. 

Women are typically underrepresented in this field; of the total 

workforce of 1 057 employees, 215 of these are women, constituting 

20.4 % (19.6 % in Norway). 87 of the female in TTS hold positions 

within administration, finance or sales and marketing, giving a 

43.9 % of women within these functions. 

Three of the six board members of TTS Group ASA are women; 

two of these were elected by the shareholders and one was elected 

by the employees. 

Pursuant to the act prohibiting discrimination based on disability 

(the Norwegian Anti-Discrimination and Accessibility Act), TTS 

has striven to locate its operations with an accessibility and office 






layout that does not hinder access for employees who depend upon 

wheelchairs. It is furthermore the company’s policy to adapt the 

workplace for employees with hearing of sight impairments. 

bOARD OF DiREcTORS 

TTS Group ASA’s Chairman of the Board of Directors is Trym Skeie. 

At the annual shareholders 2010 meeting Nils Aardal announced 

that he should not be considered for election and Rune Selmar was 

elected to the board of directors. In December 2010, Rune Selmar 

resigned from the Board as a consequence of accepting a new 

position with Norfund. 

In September, the employee representatives Jarle Dyrdal and Karen 

Mørkestøl were elected to the Board, both from TTS Energy AS in 

Kristiansand. 

AUDiTOR 

KPMG AS was chosen to be the company’s auditor for 2010. 

corporate governance 

inTRODUcTiOn 

A more detailed account of the applicable principles for corporate 

governance is provided in this Annual Report. The same applies to 

election of a new Board of Directors and nominating committee 

at the Annual General Meeting on 3 June 2010, as well as the 

employee’s election of members to the Board. 

cAPiTAL STRUcTURE 

At the start of 2010, the company’s share capital was 33 954 139.50 

NOK divided into 67 908 279 shares at a value of 0.50 NOK each. 

In July a private placement was done for a total of 6 722 920 

shares at a share price of 6.30 NOK. 

At the end of 2010, the company’s share capital was 37 315 599.50 

NOK divided into 74 631 199 shares at a nominal value of 0.50 NOK 

each. The company holds 35 210 own shares. 

49




45 -116 DiREcTOR’S REPORT AnD AccOUnTS 


Future prospects 

The financial crisis and subsequent crisis in the market economy, 

has placed particular demands on management and risk control of 

operations in TTS. The Board is satisfied that the company in 2010 

succeeded in strengthening the financial basis for it operations 

through increasing its capital, establishing a new loan and renegotiating 

the company’s bond loan at market terms. 

The Board evaluates the short-term market situation to be stable. 

For the Energy division demand for rigs and rig equipment has 

improved. In the Port and Logistic division the market has improved 

somewhat while the market for the Marine is expected to be 

unchanged in the short term. 

50 

Bergen, 13 April 2011 

THE BOARD OF TTS GROUP ASA 

Allocation of annual profit for TTS Group ASA 

In 2010, the group’s net loss was 197 MNOK. The equity at 

31 December 2010 was 803 MNOK. 

TTS Group ASA reported a net loss in 2010 of -253 MNOK, and 

the equity at 31 December 2010 was 622 MNOK. 

The Board proposes that TTS Group ASA’s negative result for 

2010 is covered by Other Equity Capital. The Board proposes that 

there shall be no payment of dividend to the shareholders. 

Trym Skeie Bjarne Skeie Anne Breive 

CHAIRMAN BOARD MEMBER BOARD MEMBER 

Kjerstin Fyllingen Jarle Dyrdal Karen T. Mørkestøl 

BOARD MEMBER BOARD MEMBER BOARD MEMBER 


PRESIDENT & CEO

consolidated statement 

of comprehensive income 

TTS GROUP 

1 jAnUARY - 31 DEcEMbER 

(AMOUNTS IN NOK 1000) IFRS IFRS 

NOTES 2010 2009 

OPERATING REVENUE 

Project revenue 1 3 225 819 3 784 087 

Other income 14 990 41 232 

Total revenue and income 3 240 809 3 825 319 

OPERATING ExPENSES 

Cost of sales 2 396 428 2 900 892 

Personnel costs 4, 5 617 148 663 467 

Depreciation of fixed assets 6, 7 51 979 47 306 

Other depreciations/amortisation 8 0 99 229 

Other operating expenses 18 233 609 277 917 

Losses on accounts receivable 20 848 88 949 

Income from investments in joint ventures 10 -30 936 -21 641 

Total operating expenses 3 289 076 4 056 118 

Operating profit/loss -48 267 -230 800 

FINANCIAL INCOME AND ExPENSES 

Other interest income 22 17 994 24 459 

Other financial income 22 26 898 37 581 

Other interest expenses 22 -146 426 -97 337 

Other financial expenses 22 -6 302 -45 844 

Net financial items -107 836 -81 142 

Profit before income tax -156 103 -311 942 

Income tax expenses 14 40 553 -63 460 

Profit for the period 1 -196 656 -248 482 

STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD 1 JANUARy TO 31 DECEMBER 

Foreign currency differences 25 21 998 -41 337 

Total comprehensive income for the period 1 -174 658 -289 819 

Earnings per share (NOK) 23 -2.76 -5,72 

Diluted earnings per share (NOK) 23 -2.74 -5,63 

1) Profit for the period and total comprehensive income have been allocated to the owners of the parent company. 






51

consolidated statement of financial position 


ASSETS 



non-current assets 

INTANGIBLE ASSETS 

Deferred tax assets 14 162 460 187 630 

Research and development 7 270 659 279 818 

Licences and patents 7 14 568 10 708 

Other intangible assets 7 3 706 3 575 

Goodwill 7 827 184 828 083 

Total intangible assets 1 278 577 1 309 814 

FIxED ASSETS 

Property 6 14 569 13 489 

Buildings 6 20 584 27 040 

Machinery and vehicles 6 14 490 24 111 

Furniture, office-, and computer equipment 6 71 059 65 143 

Total fixed assets 120 702 129 783 

FINANCIAL FIxED ASSETS 

Investments in joint ventures 10, 19 120 730 93 960 

Investments in shares 8 222 1 945 

Other receivables 11 0 5 584 

Pensions 5 7 808 9 668 

Total financial fixed assets 128 760 111 157 

Total assets 1 528 039 1 550 755 

current assets 

Inventories 3 422 587 420 495 

Work in progress 3 0 41 693 

Total inventories 422 587 462 188 

ACCOUNTS RECEIVABLE 

Trade receivables 11 488 799 565 141 

Other receivables 11 192 717 192 348 

Acquired, non-invoiced production 2 368 057 456 185 

Derivative financial instruments 20 48 777 53 210 

Prepayments to suppliers 2 130 690 217 741 

Total receivables 1 229 040 1 484 625 

Bank deposits, cash in hand, etc. 15 272 331 191 907 

Total current assets 1 923 959 2 138 720 

Total assets 3 451 998 3 689 474 

52

EqUiTY AnD LiAbiLiTiES 



Equity 

Issued share capital 16 37 316 33 954 

Treasury shares 16 -18 -18 

Share premium reserve 16 376 057 337 911 

Other equity 16 389 380 564 036 

Total equity 802 734 935 883 

Liabilities 

PROVISIONS FOR LIABILITES 

Deferred tax 14 25 559 22 339 

Total provisions for liabilites 25 559 22 339 

OTHER LONG-TERM LIABILITIES 

Bond loan 12, 13 400 000 400 000 

Debt to financial institutions 45 132 30 537 

Other long-term liabilities 75 000 0 

Total other long-term liabilities 520 132 430 537 

CURRENT LIABILITIES 

Debt to credit institutions 13, 15 550 758 600 005 

Payables to suppliers 332 513 339 466 

Income tax payable 14 5 680 19 308 

Other taxes payable 33 667 37 706 

Prepayments from customers 2 447 214 639 938 

Non-invoiced production costs, suppliers 2 336 732 149 791 

Derivative financial instruments 20 69 666 91 876 

Other current liabilities 17, 21 327 342 422 624 

Total current liabilities 2 103 572 2 300 715 

Total liabilities 2 649 264 2 753 591 

Total equity and liabilities 3 451 998 3 689 474 


Board of Directors of TTS Group ASA 

Trym Skeie Kjerstin Fyllingen Anne Breive Bjarne Skeie 

CHAIRMAN OF THE BOARD BOARD MEMBER BOARD MEMBER BOARD MEMBER 

Karen T. Mørkestøl Jarle Dyrdal Johannes D. Neteland 

BOARD MEMBER BOARD MEMBER CHIEF ExECUTIVE OFFICER 






53

consolidated statement of changes in equity 


(iFRS) 

Treasury Share premium 

(AMOUNTS IN NOK 1000) NOTE Share capital shares reserve Other equity Total 

Equity as of 31.12.2008 12 954 -67 122 892 853 277 989 056 

Treasury shares 0 49 0 576 625 

New issue 16 21 000 0 231 000 0 252 000 

New issues expenses 16 0 0 -21 417 0 -21 417 

Option plans 16 0 0 5 437 0 5 437 

Net profit for the year 0 0 0 -289 818 -289 818 

Equity as of 31.12.2009 33 954 -18 337 912 564 035 935 883 

Treasury shares 0 0 0 0 0 

New issue 16 3 361 0 38 993 0 42 354 

New issues expenses 16 0 0 -847 0 -847 


Equity as of 31.12.2010 37 316 -18 376 057 389 379 802 734 

54

consolidated cash flow statement 



(AMOUNTS IN NOK 1000) 






2010 2009 

cash flow from operating activities 

Profit/loss before tax -156 103 -311 942 

Income tax paid -19 308 -13 903 

Amortisation 51 979 47 305 

Depreciation shares 2 800 0 

Depreciation non-current assets/goodwill 0 99 229 

Net change in project accruals 169 395 283 209 

Interest cost 107 836 77 737 

Profit/loss from joint ventures -30 936 -21 641 

Difference between pension charges and payments to/from pension schemes 1 860 1 694 

Inventories, customers and suppliers 108 990 -371 704 

Other receivables and other short term liabilities -104 226 -148 813 

Net cash flow from operating activities 132 287 -358 829 

cash flow from investment activities 

Acquisition of subsidiaries, net of cash acquired 0 0 

Proceeds from sale of fixed assets 6 000 4 531 

Disbursements from acquisition of fixed assets -20 404 -44 674 

Disbursements on own developement -12 904 -68 218 

Payments on other liabilities 0 -2 185 

Foreign currency gains/loss related to investments 0 604 

Net cash flow from investment activities -27 308 -109 942 

cash flow from financing activities 

Proceeds from issuance of short-term/long-term debt 75 000 0 

Disbursement on short-term/long-term debt -114 710 -98 092 

Net change in bank overdraft facility 81 482 351 703 

Interest paid -107 836 -77 737 

Proceeds from issued new share capital 41 509 231 208 

Net cash flow from financing activities -24 555 407 082 

Net change in cash and cash equivalents 80 424 -61 689 

Cash and cash equivalents at the start of the period 191 907 267 2318 

Foreign currency gains/loss on cash and cash equivalents 0 -13 635 

Cash and cash equivalents at the end of the period 272 331 191 907 

This consists of: 

Bank deposits etc. 272 331 191 907 

55

Accounting principles 


1. General information 

TTS is a global company that creates and supplies handling equipment 

for ships, ports and offshore installations. Up to and including 2009, 

operations were organised into the five divisions; Dry Cargo Handling, 

Marine Cranes, Port and Material Handling, Deck Machinery and 

Drilling Equipment. As of 01.01.10, TTS will report on three divisions; 

Marine, Energy and Port and Logistics. The TTS group is among the 

leading suppliers in its market segments. For these notes, comparative 

figures for 2009 are converted to correspond to reporting on three 

divisions. 

TTS Group ASA is registered and domiciled in Norway, and its head 

office is located in Bergen. The group has companies in Sweden, 

Germany, Finland, China, USA, the Czech Republic, Italy, Canada, 

Singapore, Korea, Greece, Brazil and Mexico, as well as a branch office 

in Vietnam. The company is listed on the Oslo Stock Exchange. 

The consolidated accounts were approved by the Board on 13 April 2011. 

2. Summary of the most central accounting principles 

The most central accounting principles applied in the preparation of 

the consolidated accounts are described below. These principles have 

been applied identically to all the periods presented, unless otherwise 

stated in the description. 

2.1 basic principles 

The consolidated accounts for TTS Group ASA have been prepared 

in accordance with International Financial Reporting Standards (IFRS), 

as adopted by the European Union. Discretionary standards and 

interpretations as of 31.12.10 have not been implemented. 

The consolidated accounts have been prepared on the basis of the 

principle of historic cost, with the following modifications: Shares held 

available for sale, and financial derivatives, are obligations estimated 

to fair value in the profit and loss accounts. 

Preparation of the accounts according to IFRS requires the use of estimates. 

Furthermore, application of the company’s accounts principles 

requires that management performs evaluations. Areas that to a great 

extent involve such evaluations or high degree of complexity, or areas 

where assumptions and estimated are material to the consolidated 

accounts, are described in Item 4. 

NEW ACCOUNTING STANDARDS 

In January 2010, the group has implemented the following new 

standards and interpretations: 

• IFRS 3 Business combinations (2008) 

• IAS 27 Consolidated and Separate Financial Statements (2008) 

• IFRIC 17 Distributions of non-cash assets to owner of the Company 

• IFRIC 18 Transfers of assets from customers 

None of these presently have any effect on the Financial statements. 






The following standards, changes and interpretations of existing 

standards are publicised and will be mandatory for the group to adhere 

to in the consolidated the Financial statements beginning 1 January 

2011 or later, but without the group having chosen early implementation. 

The effect of the implementation of standards, changes and interpretations, 

beyond what is stated below, is being assessed within the group. 

CHANGES TO IFRS 7 FINANCIAL INSTRUMENTS - DETAILS 

The change concerns a requirement of notes for transfers of financial 

assets in which the company remains involved. The changes are aimed 

to give users a better understanding of the exposure of the company 

transferring the financial assets. The implementation time for IFRS 7 

is set to 1 July 2011; however, the standard is still not approved by 

the EU. The group expects to implement the modified standard from 

1 January 2012. 

IFRS 9 FINANCIAL INSTRUMENTS 

IFRS 9 will replace the classification and measurement rules in IAS 39 

Financial Instruments: Recognition and Measurement for financial 

instruments. According to IFRS 9, financial assets with standard terms 

and conditions for debt shall be accounted as amortised costs, unless 

one chooses to recognise them at fair value, while other financial 

assets shall be accounted at fair value. The classification and measurement 

rules for financial obligations designated as fair value through 

profit and loss (fair value option), in which changes in value connected 

to own credit risk are distinguished and accounted over comprehensive 

income. The time of implementation for IFRS 9 is set to 1 January 

2013; however, the standard is still not approved by the EU. 

CHANGE TO IAS 32 FINANCIAL INSTRUMENTS - PRESENTATION- 

CLASSIFICATION OF RIGHTS ISSUES 

The change to IAS 32 implies that subscription rights issued in a 

currency other than the functional currency of the company shall be 

classifiable as equity. Time of implementation is set to 1 February 2010. 

The group expects to apply the altered standard from 1 January 2011. 

IAS 24 (revised) Information about related parties. In relation to the 

applicable IAS 24, the revised standard includes a clarification and 

simplification of the definition of related parties. The revised standard 

also provides some relief in requirements of additional information for 

public enterprises. The time of implemen tation is set to 1 January 2011. 

The group expects to apply the revised IAS 24 from 1 January 2011. 

IFRIC 19 ExTINGUISHING FINANCIAL LIABILITIES WITH EQUITy 

INSTRUMENTS 

The interpretation provides guidance for accounting of transactions 

when a company reconciles the whole or parts of its financial 

obligations by issuing equity instruments, and applies when the debt 

conversion is done as a result of a renegotiation of the loan agreement. 

The issuing of equity instruments shall be measured to fair value and 

is seen as remuneration for settlement of the debt. The difference 

between book value of debt and fair value of equity instruments. 

57

shall be recognised through profit and loss. The interpretation has 

an implementation date of 1 July 2010. The group expects to apply 

IFRIC 19 from 1 January 2011. 

IASB’S ANNUAL IMPROVEMENT PROJECT 2010 

Through its annual improvement project, IASB has resolved to change 

to a number of standards. These changes will be implemented with 

effect on 1 July 2010 and thereafter. The group expects to implement 

the changes from 1 January 2011. Furthermore, changes are approved 

in the following standards and interpretations, which are not expected 

to have any effect on the group: 

• IAS 12 Income Taxes 

• IFRC 14 IAS 19 – The Limit on a Defined Benefit Asset, Minimum 

Funding Requirements and their Interaction – Prepayments of a 

Minimum Funding Requirement 

2.2 consolidation principles 

A) SUBSIDIARIES 

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

over the unit’s financial and operating strategy, normally through 

ownership of more than half of the voting capital. When determining 

whether controlling influence exists, the effect of potential voting 

rights that may be exercised or converted on the balance sheet date 

is included. 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 applied for the acquisition of 

subsidiaries with operations. The historical acquisition cost is measured 

as the fair value of: assets rendered as compensation upon acquisition, 

equity instruments issued and liabilities incurred by the transfer of 

control. Identifiable assets acquired and liabilities assumed are recorded 

in the accounts at the date of acquisition at their fair value, independent 

of any non-controlling ownership interests. Goodwill is calculated as 

the sum of the compensation and the carrying value of non-controlling 

interests and the fair value of previously owned shares, with allowance 

for the net value of identifiable assets and liabilities calculated at 

the time of acquisition. Goodwill is not amortised but tested at least 

annually for impairment. In connection with an impairment assessment, 

goodwill is allocated to those cash-generating units or groups of 

cash-generating units that are expected to get synergy effects from 

the business acquisition. 

The part of the fair value of equity that exceeds the compensation 

(negative goodwill) is recognised in the profit and loss account at the 

time of acquisition; see Item 2.6. 

All intra-group transactions, outstanding accounts and unrealised 

gains between group companies are eliminated. Unrealised losses are 

eliminated, but considered an impairment indicator in relation to 

58 

write-down of the asset transferred. The accounting principles in 

subsidiaries are revised as required, in order to achieve compliance 

with the group’s accounting principles. 

B) JOINT VENTURES 

Joint ventures are units where the group by agreement has a controlling 

influence together with other parties, but not alone. Investments in 

joint ventures are recorded in the accounts according to the equity 

method. Investments in joint ventures 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) (ref. Item 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 value of the investments 

recognised in the balance sheet, together with other income and costs 

along 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 value of the investment 

recognised in the balance sheet becomes negative (including unsecured 

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

granted guarantees for the joint venture company’s liabilities. 

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

group and the joint ventures are eliminated against the investment. 

The same applies to unrealised losses unless the transaction indicates a 

write-down of the asset transferred. The accounting principles in joint 

ventures have been revised as required, in order to achieve compliance 

with the group’s accounting principles. 

2.3 Segment information 

The group presents the operating segments based on information 

provided to the CEO, who is the group’s supreme decision-maker. 

An operating segment is a component of a company doing business 

which allows the company to receive revenues and incur expenses, 

including revenues and expenses related to transactions with other 

components of the same company. 

The earnings of the operating segment are reviewed regularly by the 

segment manager and the central executive management to consider 

the need for allocating resources and assess the achievements of the 

operating segment. Separate financial information is obtainable about 

the operating segment. 

Profit from operating segments that are reported to the segment 

manager include items that are directly attributable to the segment, 

as well as posts which can be reasonably allocated to the segment. 

Items which cannot be distributed include expenses for the main office, 

as well as assets and liabilities related to tax. Investment costs consist 

of costs related to acquisition of property, facilities and equipment, as 

well as intangible assets with the exception of goodwill.

For 2010, the company has three segments. These are Marine, Energy 

and Port and Logistics. This has been changed from 2009 when the 

segments were: Dry Cargo Handling, Marine Cranes, Port and Material 

Handling, Deck Machinery and Drilling Equipment. The change in the 

segment divisions follows the group’s consolidation of its activities 

and corporate structure. Comparable segment information has been 

prepared. 

2.4 Foreign currency 

A) FUNCTIONAL AND PRESENTATION CURRENCIES 

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

currency primarily used 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 of 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 at 

the end of the balance sheet date, are recognised in the profit and 

loss account. Non-monetary items measured at historical cost in 

foreign currency are translated into functional currency at the time 

of transaction. 

C) GROUP COMPANIES 

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

a functional currency that differs from the presentation currency are 

translated as follows: 

i. the balance sheet is translated to the closing rate on the date 

of the balance sheet 

ii. profit and loss account is translated to 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 is 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 

accumulated depreciation and accumulated writedowns. 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, where it 

is likely 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 carried to 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 expected useful life, which is: 

Buildings 50 years 

Machinery and vehicles 3-5 years 

Fixtures/office equipment 5 years 

Computer equipment 3 years 






Depreciation on tangible fixed assets is recognised on a separate line 

in the profit and loss account. 

The assessment of indicators related to possible revaluation requirements 

is monitored continously. 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. 

Depreciation methods, useful lives and residual values are assessed at 

each balance sheet date and adjusted if necessary. 

2.6 intangible 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, 

according to performed analysis of acquisition showing the distribution 

of added values between goodwill and other assets. Goodwill associated 

with the acquisition of an interest in joint ventures is included in the 

investments in joint ventures according to equity method. Goodwill is 

tested annually for impairment in value and recognised in the balance 

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

is not reversible. 

B) PATENTS, TECHNOLOGy AND DEVELOPMENT 

Patents and technology have limited useful life, and are recorded at 

historical cost in the balance sheet less depreciation. Patents and 

technology are depreciated by the straight-line method over their 

expected useful life (2 to 15 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. Development related to orders 

is charged directly to the individual projects. For certain extraordinary 

59

projects, the development costs are recorded in the balance sheet, ref. 

Note 7. In such cases the development costs are depreciated over their 

expected useful life (2 to 15 years). 

Depreciation of intangible fixed assets is recognised on a separate line 

in the profit and loss account. 

C) RESEARCH AND DEVELOPMENT 

Expenses for research activities, to acquire new scientific or technical 

knowledge, are recognized in the profit and loss as incurred. 

Development activities include design or planning of production of 

new or significantly improved products and processes. 

Development costs are capitalized only to the extent that they can be 

reliably measured, the product or process is technically or commercially 

feasible, future financial benefits are likely, and the group intends and 

has sufficient resources to complete the development, and to sell or 

use the asset. Capitalized development expenses include materials, 

direct labour, directly attributable overheads and capitalized borrowing 

costs. Other development expenditure is recognised in the profit and 

loss when incurred. 

Capitalised development expenses are recognised at cost less accumulated 

amortisation and accumulated impairment losses. 

2.7 Financial assets 

The group classifies financial assets into the following categories: 

a) loans and receivables 

b) assets available for sale (investments in shares) 

c) assets at fair value in the profit and loss account (derivatives) 

A) LOANS AND OTHER RECEIVABLES 

Loans and receivables are non-derivative financial assets with payments 

that are fixed or fixable and that are not realised in an active market. 

They 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 receivables are initially recognised 

at fair value plus directly attributable transaction costs. After initial 

recognition, loans and receivables are measured at amortised cost using 

the effective interest method, less any impairment losses. 

Loans and receivables consist of accounts receivable and other outstanding 

claims. 

B) ASSETS AVAILABLE FOR SALE (INVESTMENTS IN SHARES) 

Financial assets available for sale are non-derivative financial assets 

publicly communicated as being available for sale, and which are 

not classified in any of the other categories. Investments in shares 

are included in fixed assets unless management intends to sell the 

investment within 12 months from the date of the balance sheet. 

60 

Investments are assessed at fair value on the balance sheet date. 

Any changes in fair value are charged directly against comprehensive 

income and presented as revaluation reserve in the equity. However, 

this does not apply to impairment losses and exchange rate differences 

on equity instruments available for sale. When an investment is 

derecognised, the cumulative gain or loss from comprehensive income 

is transferred to the result. 

C) ASSETS TO FAIR VALUE OVER PROFIT AND LOSS 

Ref. Item 2.9. 

2.8 Leases 

Leases of property, plant and equipment at terms that in all material 

aspects transfer the risks and rewards of ownership to the group 

are classified as finance leases. Finance leases are capitalized at the 

commencement 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 finance charges and reduction 

of lease liabilities. 

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

are retained by the lessor are classified as operating leases. 

Payments made under operating leases are posted to the profit and 

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

2.9 Derivatives and hedging 

In accordance with adopted guidelines and the group’s strategy, the 

group utilises hedging of contractual income in a foreign currency at 

the date of signature of the contract. The same may apply to individual 

larger sub-contracts in foreign currencies. 

FAIR VALUE HEDGING 

The group has financial derivatives to hedge currency risk. In the initial 

calculation, derivatives are measured at fair value. Attributable transaction 

costs are recognised in the profit and loss as they are incurred. 

The group only enters into forward currency contracts that qualify for 

fair value hedging. 

At the establishment of a hedging transaction, the group undertakes 

documentation of the relation between hedging instruments and hedge 

objects. Furthermore, the group documents whether the derivatives 

used are efficient in balancing changes to the fair value related to 

the hedge objects. Such evaluations are documented both at the start 

of the hedge and continuously throughout the hedging period. 

Fair value of the derivatives used for hedging are set out in Note 20. 

Fair value of the derivatives is classified as current assets or short-term 

liabilities, as the hedges and derivatives essentially fall due within 

12 months.

Changes to fair value of the derivatives are recognised in the profit 

and loss account along with the change in fair value associated with 

the corresponding hedge asset or liability. Profit or loss attributable 

to the hedged risk is recognised as project revenue if it is associated 

with hedging of contract revenue and under operational expenses if it 

is associated with hedging of contract costs. 

The ineffective portion of the value hedge is recognised as change in 

value of derivatives in revenues and operating expenses. 

In the event that the hedge no longer fulfils the criteria for hedge 

accounting, the derivative is carried at fair value to the profit and 

loss account. This applies to derivatives where the underlying delivery 

contract has been cancelled. 

DERIVATIVES AT FAIR VALUE CARRIED TO PROFIT AND LOSS 

Derivatives that do not fulfil the criteria for hedge accounting are 

carried at fair value to the profit and loss account. Changes to the fair 

value of the derivatives are recognised in the profit and loss statement 

as financial expenses and financial income. 

2.10 inventories 

Inventories are valued at the lower of their 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 product design expenses, 

consumption of materials, direct wage costs, other direct costs, and 

indirect production costs (based on a normal capacity level). 

Inventories established as a result of a project being cancelled are 

recognised as inventory. 

2.11 Accounts receivable 

Accounts receivable are measured upon initial recognition in the 

balance sheet at fair value. For subsequent measurements, accounts 

receivables are assessed at amortised cost determined using the 

effective interest method, and less provision for impairment. Provisions 

for losses are recognised when there are objective indicators that the 

group will not receive settlement in accordance with the original terms. 

Considerable financial difficulties on part of the customer, likelihood of 

bankruptcy on part of the customer and significant delays of payment, 

are all deemed to be indicators of the need to write down accounts 

receivables. Changes in the provisions are recognised in the profit and 

loss account as losses on accounts receivable. Receivables in foreign 

currencies are converted to NOK at the exchange rate on the balance 

sheet date. 

2.12 cash and cash equivalents 

Cash and cash equivalents consist of cash and bank deposits. Bank 

deposits in foreign currencies are assessed to the exchange rate on the 

balance sheet date. Withdrawals from the bank overdraft constitute 

part of current liabilities. 

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 less taxes are entered against equity as a reduction in proceeds. 

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

including any transaction costs less tax, 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 

The group initially recognises the bond debt on the issue date. All other 

financial liabilities are initially recognised on the agreement date, when 

the group becomes a party to the instrument’s contractual provisions. 

The group derecognises a financial liability when the contractual obligations 

are satisfied or cancelled. 

The group has the following non-derivative financial liabilities: loans, 

overdrafts, accounts payable and other liabilities. 

Non-derivative financial liabilities are initially recognised at fair value 

plus directly attributable transaction costs. After initial recognition, 

liabilities are measured at amortised costs using the effective interest 

method. 

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 following year’s payment is classified 

as short-term debt. 

2.15 Accounts payable 

Accounts payable are measured at fair value upon initial recognition in 

the balance sheet. Upon subsequent measurement, accounts payable 

are valued at amortised cost using the effective interest rate method. 

2.16 Taxes 

Tax in the profit and loss account comprises both tax payable for the 

period and change in deferred tax. Period tax and deferred tax are 

recognised in the profit and loss, with the exception of tax on items 

related to business mergers or taxes recognised directly in equity or 

comprehensive income. 

Periodic tax is payable tax or tax receivables on taxable income or loss 

for the year, based on tax rates adopted or principally adopted on the 

balance sheet date. Revision of the estimated periodic tax for previous 

years is included in the figures. 

Deferred tax is calculated on all temporary differences between the tax 

and accounting values of assets and liabilities. 

61

For the following temporary differences, no deferred tax is recognised: 

• initial recognition of assets or liabilities in a transaction that is not 

a business combination and that does not affect accounting or taxbased 

results upon inclusion 

• differences related to investments in subsidiaries to the extent 

that it is likely that these differences will not be reversed in the 

foreseeable future 

• tax-increasing differences upon initial recognition of goodwill 

Temporary differences are only offset between the Norwegian companies 

in the group. Deferred tax is stipulated using tax rates and tax laws 

adopted or in all material aspects adopted on the balance sheet 

date, and which presumably may be utilised when the deferred tax 

advantage 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. 

2.17 Pension obligations, bonus schemes and other 

compensation schemes for employees 

A) 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 plans and defined benefit plans. 

A contribution plan is a pension scheme in which the group pays fixed 

contributions to a separate legal entity. The group has no legal or other 

obligation to pay further contributions if the insurance company does 

not have sufficient assets to pay all employee benefits relating to 

employee service in current and prior periods. 

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. 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 can reduce future 

payments. 

A defined benefit plan is a pension scheme that is not a defined 

contribution plan. A defined benefit plan is typically a pension scheme 

defining the pension payments which employees will receive upon 

retirement. Pension payments are normally dependent on one or more 

factors such as age, years of service for the company and salary level. 

Net liability for defined benefit pension plans is calculated for each 

plan by estimating the future benefits employees have earned for 

services rendered in the current or prior periods. The benefits are 

discounted to calculate present value, and the cost of pension earning 

for prior periods not yet recognised, along with the fair value of plan 

62 

assets, are deducted. The discount rate for Norwegian schemes is based 

on the interest rate on 10-year Norwegian government bonds at the 

balance sheet date, adjusted to reflect the maturity of pension liabilities. 

For foreign plans, the discount rate is based on the interest rate on 

a bond issued by a company with a high credit rating in the same 

currency as the benefits will be paid and with a maturity that is 

approximately equal to the maturity of the related pension liability. 

The pension obligation is calculated annually by independent actuaries 

using the projected unit credit method. 

Estimate deviations due to new information or changes in the actuarial 

assumptions in excess of 10 % of the value of the pension resources 

or 10 % of the pension obligations will be recorded in the profit and 

loss account over a period that corresponds to the employees’ expected 

average remaining period of service. 

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. 

Gains and losses on the curtailment or settlement of a defined 

contribution plan are recognised at the time that the curtailment 

or settlement occurs. A curtailment occurs when the group adopts 

a significant reduction in the number of employees covered by the 

plan or changes the terms of a defined contribution plan such that 

a significant proportion if current employees’ future earnings will no 

longer qualify for benefits, or qualify only for reduced benefits. 

B) 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 terms until the employee has worked up an 

unconditional right to exercise the options. Fair value of allotted 

options is estimated on the date of allotment using the Black & Sholes 

option pricing model. Ref. Note 16. 

C) 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.

2.18 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 and contract. Guarantee liabilities are recognised when 

the underlying products or services are sold. Additionally, the group 

recognises provisions for remaining work or claims from the customer 

regarding long-term construction contracts. 

Appropriations are measured at current value of expected payments 

in order to fulfil the obligation. A pre-tax discount rate is utilised, 

reflecting the present market situation and risk specific to that 

obligation. An increase in the obligation due to altered time frame is 

recognised on the balance sheet as a financial cost. 

2.19 Recognition of income 

The group’s revenue relates to long-term construction contracts, service 

contracts and after-sales. 

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

after the deduction of value added tax, returns, discounts and rebates. 

Revenue from the sale of goods is recognised when there is persuasive 

evidence, usually in the form of signed sales agreement, that the most 

significant risks and benefits of owning the goods are transferred to 

the buyer, it is likely that the payment will be recovered, associated 

costs and possible return of goods can be estimated reliably, there is 

no involvement in the goods normally associated with owning, and 

the revenue can be reliably measured. The date of transfer of risks 

and benefits varies depending on the conditions of the individual sales 

contract. 

Revenue from delivery of services is recognised according to percentage 

of completion on the balance sheet date. 

Income from long-term production contracts are recognised in the 

balance sheet in accordance with guidelines in IAS 11, using the 

method of current settlement, ref. Item 2.20 for more detail. The 

group’s products are frequently sold with a warranty period of +/- two 

years. As for other matters, reference is made to information regarding 

guarantee liabilities in paragraph 4 and Note 21. 

Intragroup revenue is eliminated. 

Interest 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. 






2.20 construction contracts 

Revenue from contracts includes original contract amount, as well as 

variation orders, disputed amounts and incentive bonuses to the extent 

that it is likely that the income is realised and reliable estimates are 

available. 

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 reliable manner, according to IAS 11. 

Several methods are used to calculate the progress of projects, 

dependent on the method which each individual company considers 

to best demonstrate progress. The group’s and companies’ primary 

valuation method assumes that if there is no other reliable information 

to measure, progress assessment shall be based on the measured cost 

divided by the expected cost. In some companies, progress is measured 

as accrued hours compared to the total estimated hours, while others 

measure progress according to time (weeks, months) spent compared 

to the estimated time it would take to manufacture the product. 

Finally, in some companies technical progress is measured, where 

the project is split into various activities and progress is measured 

against specific milestones for each activity, and where each activity 

is weighed in relation to how much of the total project it comprises. 

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. 

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 profits received relating to all construction contracts 

in progress, where the incurred costs and profit received (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. If on-account billings exceed costs incurred 

and recognised profits (less losses), this is recorded as received advance 

payments from customers as presented as current liabilities. The 

assessment is made for each contract at company level. There will be 

no other net allocation at corporate level. 

For terminated contracts, the loss is accounted as an expense. In 

assessing financial loss, the value of the inventory of which TTS Group 

takes ownership is taken into account. The inventory is valued at the 

lowest of acquisition cost and fair value. Any payments received that 

the group has a contractual right to retain at termination are included 

in the calculation of the acquisition cost. 

63

2.21 impairment 

FINANCIAL ASSETS 

On the balance sheet date (reporting date), financial assets that are 

not measured at fair value through profit and loss, are measured with 

regard to whether there is objective indications of impairment. A financial 

asset is considered to be impaired if there are objective indications 

of one or more events having had a negative effect on the estimated 

future cash flow for the asset, and this can be reliably measured. 

Objective evidence that financial assets are impaired may be customer 

breach, change of outstanding claims on terms that the group would 

otherwise not have accepted, indications that a borrower or issuer 

will enter bankruptcy or closure of an active market for the security. 

For equity instruments, there will be objective evidence of impairment 

by significant or prolonged decline to below cost price. 

Impairment losses relating to a financial asset measured at amortised 

cost is the difference between the carrying value and the present value 

of estimated future cash flows discounted at the original effective 

interest rate. An impairment loss is recognised in the profit and loss 

account and the asset’s carrying value is reduced by the use of an 

allowance account. 

NON-FINANCIAL ASSETS 

On the balance sheet date (reporting date), assessment is made as to 

whether there are indications of depreciation relating to recognised 

value of non-financial assets, with the exception of stock and assets in 

relation to deferred tax. If such indications exist, the asset’s recoverable 

sum is estimated. For goodwill and intangible assets not yet available 

for use, or with an indeterminable useful life, the recoverable sum is 

estimated at the same time each year. 

The recoverable amount for an asset or cash-generating unit is the 

higher of value in use and disposal value less sales expenses. In the 

assessment of value in use, the estimated future cash flow is discounted 

to net present value, with a pretax market-based discount rate. The 

rate takes into consideration the time value of money and asset-specific 

risk. With the purpose of testing for impairment, assets that have not 

been tested individually are grouped in the smallest identifiable group 

of assets that generate incoming cash flow which in all material 

aspects is independent of incoming cash flows from other assets or 

group of assets (cash generating units or CGU). On implementation of 

a test for the upper limit for operational segment in the assessment 

of impairment of goodwill, the CGUs to which goodwill has been allocated, 

are gathered so that the level of impairment being tested reflect 

the lowest level at which goodwill is monitored for internal reporting 

purposes. Goodwill is allocated to the cash-generating unit expected 

to gain advantages from the synergies associated with a merger. 

Impairment is recognised in the profit and loss if the carrying value 

of an asset or cash-generating unit exceeds the calculated recoverable 

amount. Upon recognition of impairment related to cash generating 

64 

units, the recorded value of any goodwill is first reduced. Subsequently, 

the remaining sum is distributed on remaining assets in the unit (group 

of units). 

Impairment relating to goodwill is not reversed. For other assets, it is 

assessed on the balance sheet date whether there are indications that 

the impairment no longer exists or is reduced. Impairment is reversed if 

the estimates in the calculation of the recoverable amount is changed. 

Reversals are made only until the carrying value equals the value that 

would have been recognised, net of amortisation, if the depreciation 

was not previously recognised. 

2.22 cash flow statement 

The cash flow statement has been prepared based on the indirect 

method. 

2.23 Earnings per share 

The basic earnings per share and diluted earnings per share are presented 

for ordinary shares. The basic earnings per share is calculated by dividing 

the period’s earnings attributable to owners of the ordinary shares, 

with a weighted average number of ordinary shares in the period, 

adjusted for the number of own shares. 

Diluted earnings per share are calculated by adjusting the earnings and 

the weighted average number of ordinary outstanding shares, adjusted 

for the number of own shares, for potential dilution effects. Dilution 

effects are a result of employee share options. 

2.24 Financial income and cost 

Financial income consists of capital gains on financial investments and 

changes to fair value of financial assets to fair value in the profit and 

loss account. Capital gains are recognised in the profit and loss account 

using the effective interest rate method. 

Financial costs comprises interest costs on loans, the effect of interest 

in discounted appropriation, changes to fair value of financial assets to 

fair value in the profit and loss account, and depreciation of financial 

assets in the profit and loss account. Borrowing costs not directly 

attributable to acquisition, processing or production of the qualifying 

asset, are included in the profit and loss account using the effective 

interest rate method. 

Foreign currency gains and losses are reported as a net sum. 

3. Financial risk management 

3.1 Financial risk factors 

The group’s activities entail various types of financial risk; market risk 

(including currency risk and floating rate of interest risk), credit risk, 

liquidity risk and operational risk. 

The Board has primary responsibility for the establishment and supervision 

of the group’s framework for risk management. The principles of 

risk management have been established in order to identify and analyse

the risk to which the group is exposed. Principles and systems for risk 

management are regularly reviewed to reflect any changes in activities 

and market conditions. 

The auditing committee implements follow-up of managements’ supervision 

of the group’s principles and procedures for risk management. 

The group’s main risk management plan focuses on the unpredictability 

of the capital market, and attempts to minimise its potentially negative 

effects on the group’s financial results. 

The group engages in international operations and is especially exposed 

to currency risk. The group makes use of hedging to reduce the risk of 

currency exposure. 

The group has a decentralised structure with operational supervision 

of the various business units, where the main management of financial 

risk is determined by the Board. This applies to areas such as currency 

risk, interest rate risk, credit risk and use of financial derivatives. 

For the classification of financial assets and liabilities, reference is 

made to Note 28. 

MARkET RiSk 

Market risk is the risk of changes to market prices, such as foreign 

exchange rates, interest and stock-exchange values, affecting the 

income or value of financial instruments. Management of market risk 

intends to supervise that risk exposure lies within a set framework. 

The group is particularly vulnerable to fluctuations in the price of steel. 

The group monitors the development of steel prices on a continuous 

basis. 

The companies of the group buy and sell derivatives, and incur financial 

obligations to control market risk. Transactions are carried out within 

the guidelines issued by the group. To control result volatility, hedge 

accounting is used whenever possible. 

A) CURRENCy RISK 

The group operates internationally and is exposed to currency risk in 

a number of foreign currencies. The consolidated accounts are to a 

great extent affected by the exchange rate of NOK against SEK, USD, 

EUR and RMB. The group endeavours to reduce the risk of exposure to 

exchange rate fluctuations by obtaining an optimal balance between 

incoming and outgoing payments in the same currency, in addition 

to forward exchange transactions at an acceptable exchange rate. 

Currency risk is to a large extent related to contracts for delivery that 

involve income and expenses in foreign currencies. Following contract 

signing, the guidelines are to sell and purchase foreign currencies on 

a forward exchange contract, to reduce the currency risk in cash flows 

designated in foreign currencies. With a production process based on 

the use of an international network of sub-suppliers, purchases may 

further be optimised with regard to currency. 

In order to manage the currency risk of future trade transactions and 

assets and liabilities recognised in the balance sheet, the TTS Group’s 

units use forward exchange contracts. When necessary, forward 

exchange contracts are continued as they mature. These hedging 

activities meet the requirements of hedge accounting. 

Interest on loans is in the currency corresponding with cash flows 

generated by the underlying operations, primarily in Euro. This ensures 

financial hedging without the use of derivatives, and accordingly does 

not necessitate hedging. 

For other monetary assets and obligations in foreign currency, net 

exposure is kept at an acceptable level by purchasing and selling 

foreign currency at spot prices whenever necessary. 

The company has investments in foreign subsidiaries where net assets 

are exposed to currency risk at conversion of currency. 

A more detailed description of conversion differences is presented in 

Note 25. 

SIGNIFICANT CURRENCIES THROUGHOUT THE yEAR: 






Average Exchange Rates Spot rate 

Q1 Q2 Q3 Q4 31.12.10 

SEK 0.8173 0.8308 0.8543 0.8712 0.8707 

EUR 8.1720 8.0008 7.9703 7.8903 7.8125 

USD 5.8797 6.2398 6.1676 5.8474 5.8565 

RMB 0.8614 0.9173 0.9153 0.8807 0.8889 

SENSITIVITy ANALySIS 

A 10 % strengthening of EUR against NOK at year-end would have 

increased equity and result with the figures given below. The analysis 

is subject to other variables being constant. 

Result 

Equity after tax 

31 Desember 2010 7.426 27 

31 Desember 2009 18.716 -1.938 

A 10 % weakening of EUR against NOK would have the same effect 

as regards to amount, only with the opposite sign, subject to other 

variables being constant. 

A 10 % strengthening of SEK against NOK at year-end would have 

increased equity and result with the figures given below. The analysis 

is subject to other variables being constant. 

Result 

Equity after tax 

31 Desember 2010 43.118 10.210 

31 Desember 2009 25.294 6.202 

A 10 % weakening of SEK against NOK would have the same effect 

as regards to amount, only with the opposite sign, subject to other 

variables being constant. 

65

B) INTEREST RATE RISK 

The group’s interest-bearing debt is based on a floating rate of interest. 

This involves an interest rate risk for the group’s cash flow. The group’s 

surplus liquidity is in the form of bank deposits. Any divergence from 

the use of a floating rate of interest and placement of surplus liquidity 

shall be determined by the Board. 

Entries exposed to interest rate risk are bank deposits and long-term 

liabilities. 

SENSITIVITy ANALySIS OF CASH FLOW FOR INSTRUMENTS OF 

VARIABLE INTEREST 

Calculations take into account all interest-bearing entries. All effects 

will be carried to the profit and loss account, as the company has no 

hedging instruments related to interest that will be directly charged 

against equity. 

The analysis is subject to other variables being constant. 

Fluctuations Effect on 

in interest net result Effect on 

rate after taxes equity 

2010 +/- 1 %-points 8 560 0 

2009 +/- 1 %-points 8 831 0 

Calculations are made on the basis of an average net interest-bearing 

debt. A more detailed account of interest-bearing debt is presented 

in Note 12. 

cREDiT RiSk 

Credit risk is the risk of financial losses should a customer or counterparty 

to a financial instrument become unable to fulfil his obligations 

according to contract. Credit risk is dealt with at a corporate level. 

Credit risk arises in transactions with derivatives, bank deposits and 

financial institutions, in addition to transactions with customers. 

The credit risks are reduced through distribution over several counterparties. 

Requirements to credit ratings have been established toward 

counterparties, and new customers are subject to credit rating. 

Furthermore, the group makes a comprehensive use of Letters of 

Credit toward its customers, in order to minimise the risk of losses. 

The group’s customers are mainly located in Europe, including 

Scandinavia, and Asia, particularly China. The group carries out 

assessment of credit risk to the political structure depending on the 

economic importance of the agreements based on assessments from 

the OECD and other equivalent factors. 

Maximum risk exposure is represented by the extent of financial assets 

recognised in the balance sheet. In a hypothetical situation where no 

outstanding claims where met, this would be the equivalent to the 

following: 

66 

(All figures in NOK 1000) 2010 2009 

Accounts receivable 488 799 565 141 

Cash reserves 272 331 191 907 

Project-related outstanding amounts 368 057 673 926 

Derivatives 48 777 53 210 

Other outstanding amounts 192 717 192 348 

Total 1 501 371 1 676 532 

The counterparty for pension resources is a Norwegian insurance 

company, and the risk related to this is considered to be minimal. 

The counterparties for derivatives are banks, and the credit risk related 

to these is considered to be insignificant. The same applies to bank 

deposits. 

Volatility in the financial markets in 2008 and 2009, with continued 

significant volatility in 2010 resulted in significantly increased credit 

risk. As a response, the group implemented actions against increased 

risk through close follow-up of customers and suppliers. Customers 

with bad debt or delayed instalment payments were particularly 

scrutinised. Historically, the group has had no substantial losses 

on accounts receivable, but in 2009 the group recorded a loss that 

exceeded 100 MNOK relating to bankruptcies. For 2010, an expected 

and confirmed loss of 20.9 MNOK is recorded. This relates to customers 

who are no longer able to settle contractual liabilities. Though this is 

a significant reduction compared with 2009 high level of customer 

monitoring is still required. 

The bankruptcy in Ability Drilling in 2009, with its following claim 

against TTS Energy AS (formerly TTS Sense AS) was concluded in 

September 2010 by the establishment of a settlement between 

TTS Group/TTS Energy and the bankruptcy estate. For further details, 

ref. Note 26. 

As of 31.12, the group had the following maturity distribution on its 

external customers (including a claim on the joint venture companies): 

Not 0–3 3-6 > 6 

Total due months months months 

31.12.2010 488 799 238 531 168 246 24 607 57 415 

31.12.2009 565 141 256 839 150 497 38 317 119 488 

For accounts receivable that are not yet due, the assessment is, based 

on previous experience, that there is no need to write down the value. 

These relate to independent customers who have no previous history 

of failing to fulfill their obligations to the group. Invoicing is to a large 

extent carried out in accordance with milestone-based progress in each 

project. Due to delay in delivery, a considerable gap between due date 

and payment date may arise. 

As of 31.12.10, the provision for loss on accounts receivable is 83.5 

MNOK, compared to 139.5 MNOK in 2009. Accounts receivable are 

discussed in further detail in Note 11. The main part of the amount 

relates to appropriations in connection with four major risk exposures 

in the Energy segment.

LiqUiDiTY RiSk 

Liquidity risk is the risk of the group being unable to fulfil its financial 

obligations as they fall due. Liquidity management shall, to the extent 

possible, ensure that available liquidity is sufficient to meet obligations 

as they mature for payment, without this resulting in unacceptable 

loss or risk of damage to the group’s reputation. The availability of 

sufficient liquidity to meet expected operating cost, as well as resources 

to service financial obligations in the future, shall be secured. 

During the autumn of 2009, the group implemented actions to reduce 

working capital. These actions are continued in 2010. The actions 

include active promotion to dispose of partially manufactured rigs that 

were commissioned by Ability Drilling prior to the bankruptcy in 2009. 

Relevant rigs are as of 31.12. assessed in accordance with the expected 

market value, adjusted for completion costs. The rigs are recognised 

as inventory. Furthermore, a project has been initiated to optimise the 

company’s procedures and processes in order to reduce the need for 

working capital. 

TTS has established a joint cash pool arrangement that includes 

most of its subsidiaries. The joint cash pool arrangement improves 

accessibility and flexibility in the management of liquidity. Work is 

being done to include several of the foreign subsidiaries in the group 

accounting system within national legal frameworks. 

The group’s loan commitment with a bank syndicate led by Nordea is 

renegotiated annually. The commitment has its mature at 31.12.2011. 

The table below gives an overview of the structure of maturity of the group’s financial obligations: 






As a result of the financial crisis, in the winter of 2010 the group instigated 

measures to increase its financial action capacity and liquidity. 

In parts of 2010, the group’s liquidity has not been satisfactory, and has 

also delayed the reduction of the credit facility of 200 MNOK that had 

maturity in March 2010. As part of the delay, 50 MNOK was repaid at 

the end of September 2010. The remaining facility, 150 MNOK are to 

be settled within 31.12.2011. 

Through the issuance of convertible subordinated loan, the group has 

improved its liquidity in 2011. The facility of 200 MNOK was fully 

subscribed in December 2010 and paid to the group in January 2011. 

In assessing equity-based loan terms with Nordea and bond owners, 

the responsible convertible loan shall be considered part of the equity. 

The group’s liquidity developments are monitored continuously based 

on regular liquidity forecasts from all the units in the group. 

As of 31 December 2010, TTS has an undrawn overdraft facility of 

246 MNOK. Furthermore, the group has available liquidity in the form 

of bank deposits amounting to 272 MNOK. 

The group’s strategy is to have sufficient cash reserves or credit options 

to be able to, at any time, finance operations and investments throughout 

the year, in accordance with the group’s strategy plan. The group 

regards it as most likely that it will be able to renew loan agreements or 

negotiate alternative financing agreements upon expiry of the current 

agreements. 

Surplus liquidity is placed as deposits in bank on market terms. 

REMAINING PERIOD: More than 


Long-term financial obligations: 

< 6 months 6-12 months 1-5 years 5 years Total 

Interest-bearing non-current liabilities 0 0 507 688 12 444 520 132 

Current financial obligations: 

First year’s instalment on non-current liabilities 15 254 15 300 0 0 30 554 

Interest-bearing current liabilities 25 758 525 000 0 0 550 758 

Derivatives 8 392 7 885 4 613 0 20 890 

Accounts payable and other current liabilities 699 202 783 946 0 0 1 483 148 

Total financial obligations 748 606 1 332 131 512 301 12 444 2 605 482 

2009 

Long-term financial obligations: 

< 6 months 6-12 months 1-5 years 

More than 

5 years Total 

Interest-bearing non-current liabilities 0 0 431 205 3 000 434 205 

Current financial obligations: 

First year’s instalment on non-current liabilities 56 287 6 286 0 0 62 573 

Interest-bearing current liabilities 475 000 58 764 0 0 533 764 

Derivatives 45 000 46 876 0 0 91 876 

Accounts payable and other current liabilities 400 000 362 090 0 0 762 090 

Total financial obligations 976 287 474 016 431 205 3 000 1 884 508 

67

The syndicated loan from Nordea constitutes part of short-term loans, 

and will be renewed by 31 December 2011. Reference is made to Notes 

13 and 24 for a further discussion on the syndicated loan. 

For further information on financial obligations, see Notes 12, 13, 15, 

17, 20, and 28. In addition to this is advance payment from customers 

and cost related to facilities under construction. These entries are items 

of accrual and ordinarily fall due within a year. The items are further 

detailed in Note 2. 

OPERATIONAL RISK 

Operational risk is the risk of direct or indirect losses as a result of 

a whole range of causes related to the group’s processes, personnel, 

technology and infrastructure, as well as external factors besides of 

credit risk, market risk and liquidity risk that follow from laws, rules 

and generally accepted principles for business conduct. Operational 

risk arises in all of the group’s business areas. 

The group’s deliveries are primarily organised in the form of projects. 

The group is continuously striving to improve operations and projects 

implementation. This further includes credit rating of major sub-suppliers 

in order to ensure implementation of the projects. 

The group’s aim is to deal with operational risk, so that a balance is 

reached between avoiding economic loss or damage to the group’s 

reputation, and general cost effectiveness, and to avoid control routines 

that limit initiative and creativity. 

The main responsibility for development and implementation of controls 

designed to handle operational risk is allocated to the top management 

within each business area. This responsibility is supported by developing 

the overall group standard for management of operational risk in 

various areas. 

3.2 Risk related to investment management 

The group’s aim with regard to investment management is to secure 

continued operations in order to ensure a return for the owners and 

other partners, and maintain an optimum capital structure, so as to 

reduce capital costs. To improve the capital structure, the group may 

adjust the level of dividend payment to shareholders, issue new shares 

or sell assets to repay loans. 

The company’s gearing as of 31.12.2010 and 31.12.2009 is illustrated 

below: 


Total loan 1 070 890 1 030 542 

- cash and cash equivalents 272 331 191 907 

Net interest bearing debt 798 559 838 635 

Equity 802 734 935 883 

Total 1 601 293 1 774 518 

Gearing 49.9 % 47.3 % 

68 

3.3 Estimation of fair market value 

Fair value of financial instruments traded in an active market is based 

on the market value on the balance sheet date. Examples of this are 

forward contracts in foreign currencies where fair value is calculated 

by using a market-to-market rate on the balance sheet date. 

Fair value of financial instruments not traded in an active market is 

stipulated by the use of valuation techniques (primarily discounted 

future prospective cash flows) or other relevant information for giving 

a best estimate of fair value on the balance sheet date. An example of 

this is shares held available for sale that have been estimated based 

on information regarding transactions involving said shares. 

Accounts receivable and accounts payable are assessed at face value, 

less deductions for occurred or estimated losses on the balance sheet 

date, an amount presumed to be equal to the actual value of the entry. 

Fair value of employee share options is measured using the Black & 

Sholes formula. The data forming the basis for measurement includes 

the share price at the time of measurement, the option’s exercise 

price, expected volatility, weighted average expected economic life 

for the instruments, expected return, as well as risk free interest rate. 

Service terms and non-market based terms are not considered in the 

calculation of fair value. 

4. Risk related to key accounting estimates and 

evaluations 

Accounting estimates and evaluations are based on a best estimate. 

Estimates are evaluated on the basis of available information on the 

balance sheet date, as well as management’s experience and expectation 

of future events deemed likely to occur. When considering the best 

estimate, allowance is made for relevant events that have occurred 

subsequent to the balance sheet date and up until the Board’s approval 

of the accounts, to the extent that such events are presumed to 

significantly alter the estimates. Estimates are always associated 

with uncertainty and consequently the recorded balance sheet and 

result variables. These days’ unrest in the financial market significantly 

increases the uncertainty of the premises for estimates and assessments 

of likely future events. Below follows a discussion of the key 

balance sheet items and appropriate profit and loss items where 

estimates are considered to be associated with major risk which 

forms the basis of the accounts. 

A) RISK RELATED TO SIGNIFICANT LOSS OF VALUE OF GOODWILL AND OTHER INTANGIBLE ASSETS 

Book value of goodwill and other intangible assets are evaluated on 

an annual basis, and for each balance sheet date when there is external 

or internal depreciation indicators. The assessment is based on implemented 

tests of any depreciation performed in accordance with requirements 

and guidelines given in IAS 36. As will appear from section 2.6, 

depreciation tests have been carried through indicating that there is

no need for depreciation as of 31.12.2010. The premises that form 

the basis of this assessment may be significantly affected by future 

alterations to market conditions or events. Reference is made to a 

more detailed discussion of these balance sheet items in section 2.6 

and accounting values in Note 7. 

B) RISK RELATED TO ASSESSMENT OF CAPITAL CONTRACTS 

ACCORDING TO THE METHOD OF CONTINUOUS SETTLEMENT 

Entering of income and appropriate commodity costs from capital 

contracts is done according to the method of current settlement 

pursuant to requirements and guidelines given in IAS 11. The method 

demands of the group that it prepares reliable estimates (prognosis) 

for future income and costs for each project as well as degree of 

completion on the balance sheet date. Accounting values related to 

capital contracts have been further discussed in section 2.19 and 

Note 11. Income forecasts are based on contractual values where future 

income in foreign currencies is secured by forward contracts. Forward 

contracts and hedging accounting is discussed in section 2.9 and the 

accounting value of hedging instruments in Note 20. Commodity cost 

forecast is based on evaluation of calculated volume and evaluation of 

future price levels. The price of steel, in particular, could significantly 

alter commodity cost. In today’s market, there is particular risk related 

to delays and cancellations of firm contracts. The group assesses the 

likelihood of cancellations and delays on a continuous basis. Delays 

and cancellation entail the risk of reduced income, increased costs, and 

that any previously estimated margins must be charged as an expense. 

In the event of cancellations, the foundation for hedging accounting 

ceased to exist according to IAS 39. This entails a risk of unrealised 

loss on forward contracts associated with cancelled projects. 

C) RISK RELATED TO ASSESSMENT OF FINANCIAL ASSETS 

AND OBLIGATIONS 

The group’s financial assets and obligation are further discussed 

in sections 2.7, 2.8, 2.9, 2.11, 2.12, 2.14 and 2.15. Risk related to 

currency, interest, credit and liquidity, as well as asset management 

is discussed in section 3. These days’ unrest in the financial market 

could significantly affect the premises for valuation, estimated cash 

flow and liquidity in the course of the next accounting year. For 

further discussion of this, reference is made to section 3 and, for 

accounting values see Note 11, 12, 15, 20, 22, and 28. 

D) RISK RELATED TO GUARANTEE LIABILITy 

The group customarily offers a warranty period of +/- two years on 

its deliveries. Management estimates appropriation for future guaranty 

commitments based on information of historical guarantee claims, 

together with information indicating that information regarding 

previous expenses may differ from future obligations. Factors that 

may affect estimated obligations include the outcome of productivity 

and quality initiatives, as well as reference prices and labour costs. 

Guarantee costs are further discussed in section 2.17, and accounting 

values in Note 21. 






E) RISK RELATED TO PENSION OBLIGATIONS 

Net pension obligations are stipulated according to invoice calcu lations 

based on the premises related to discount rate, future salary developments, 

pension adjustment, expected returns on funds, r esignation rate 

as well as demographic considerations such as disability and mortality. 

The premises are stipulated based on observable market prices and 

historic development of the group and society. Changes to these premises 

could significantly affect the estimated pension obligation and pension 

cost. Pension cost and other compensation payments to employees are 

further discussed in section 2.17, and accounting values in Note 5. 

F) RISK RELATED TO FAIR VALUE ON SHARES 

Fair value on shares not traded in an active market is stipulated by 

the use of valuation techniques. The group evaluates and chooses the 

methods and premises that are primarily based on market conditions 

on the balance sheet date. Changes to the market conditions may 

significantly affect the fair value of shares. The accounting value of 

shares is further discussed in Note 8. 

G) DEFERRED TAx ASSETS 

The group has recognised deferred tax assets primarily related to the 

Norwegian and German companies. The following criteria have been 

employed to estimate that it is probable that future taxable profit will 

be available against which unused tax losses can be utilised: 

• The group has sufficient temporary differences 

• Tax losses as a result of specific identifiable causes 

In 2010 the group has made a reduction of value related to tax losses 

in the Norwegian companies. It is expected that taxable income over the 

next five years will be able to offset the tax losses, and the balance of 

deferred tax assets will be utilised. Impairment of 88.5 MNOK has been 

recognised as a tax expense in 2010. 

69

notes for consolidated accounts 


note 1 Operating segments 

(Amounts in NOK 1000) 

PRIMARy REPORTING FORMAT – BUSINESS SEGMENTS 

From 01.01.2010 TTS Group is divided into three strategic business entities, organised and managed separately. Corresponding figures for 2009 

is revised to be comparable with the new organisation. The different business segments sell different products and have different risk profiles. 

Information about the result of each of the reported segments are included below. Earnings are measured based on segment income before 

tax, as evidenced by internal management reports reviewed by the CEO. Transaction pricing between segments are determined by arm’s length 

principle. Intercompany transactions are eliminated within the individual segments. Transactions and transfers between different segments 

take place at standard terms that are equal to those of independent parties. These are not recognised on a separate line, as the amounts are 

immaterial. 

The Group is divided into the following business segments: 

Marine: Marine Division Port: Port and Logistics Division Energy: Energy Division Other: Corporate and others 

KEy PROFIT FIGURES 


Marine Port Energy Other Total 

Turnover 2 229 520 299 180 712 109 0 3 240 809 

Income from associated companies 30 936 0 0 0 30 936 

Earnings before depreciation (EBITDA) 158 689 20 585 -168 586 -6 976 3 712 

Depreciation/amortisation -19 339 -2 764 -37 570 7 693 -51 979 

Operating profit/loss 139 351 17 821 -206 156 717 -48 267 

Financial income 24 995 6 126 7 196 20 400 58 718 

Financial cost -65 510 -6 973 -67 528 -26 544 -166 553 

Segment profit/loss before tax 98 837 16 975 -266 488 -5 426 -156 103 

2009 


Turnover 2 325 684 331 048 1 180 403 -11 818 3 825 319 

Income form joint ventures 21 641 0 0 0 21 641 

Earnings before depreciation (EBITDA) 93 657 19 615 -192 040 -5 497 -84 265 

Other depreciations/amortisations -12 636 -2 345 -129 330 -2 224 -146 535 

Operating profit/loss 81 021 17 270 -321 370 -7 721 -230 800 

Financial income 52 718 9 102 13 089 -12 871 62 040 

Financial cost -75 369 -6 982 -37 864 -22 967 -143 182 

Segment profit/loss before tax 58 370 19 390 -346 145 -43 558 -311 942 

SEGMENT ASSETS AND LIABILITIES AS OF 31.12 AND CAPITAL ExPENDITURE 








Assets 2 111 648 277 291 1 213 912 -271 581 3 331 269 

Joint ventures 116 815 0 3 914 0 120 729 

Total segment assets 2 228 463 277 291 1 217 826 -271 581 3 451 998 

Liabilities 1 665 403 204 744 1 115 692 -336 575 2 649 264 

This year’s capital expenditures 19 793 2 681 13 773 1 328 37 578 

2009 


Assets 2 068 454 240 573 1 581 189 -294 702 3 595 514 

Joint ventures 77 468 0 3 913 12 579 93 960 

Total segment assets 2 145 922 240 573 1 585 102 -282 123 3 689 474 

Liabilities 1 739 275 145 931 1 664 788 -796 403 2 753 591 

This year’s capital expenditures 276 721 3 137 97 196 1 505 378 558 

71

71-93 nOTES TO ThE AccOUnTS TTS GROUP 

note 1 cont. 

SECONDARy REPORTING FORMAT – GEOGRAPHICAL SEGMENTS 

The Group’s activities are primarily distributed in the following regions: 

Scandinavia 

Rest of Europe 

Asia 

USA/Canada 

Rest of the world 

Sales revenue 2010 2009 

Scandinavia 514 022 592 671 

Rest of Europe 756 666 925 056 

Asia 1 760 523 1 917 244 

USA/Canada 113 512 361 357 

Rest of the world 96 086 28 988 

Sales are allocated based on the customer’s home country. 

3 240 809 3 825 316 

Segment assets 2010 2009 

Scandinavia 2 550 251 2 339 353 

Rest of Europe 492 454 860 793 

Asia 299 139 331 690 

USA/Canada 102 921 157 639 

Rest of the world 7 232 0 

Assets are based on their location. 

3 451 998 3 689 474 

Capital expenditures 2010 2009 

Scandinavia 26 106 100 919 

Rest of Europe 6 537 252 810 

Asia 3 874 19 828 

USA/Canada 1 061 5 001 

Rest of the world 0 0 

Capital expenditures are based on where the assets are located. 

37 578 378 558 

note 2 construction contracts 



Revenue from projects 3 225 819 3 784 087 

BALANCE SHEET ITEMS RELATED TO CONSTRUCTION CONTRACTS 

Current Assets 

Completed production 2 273 287 1 093 058 

Invoiced production 1 957 090 636 873 

Accrued, non-invoiced production 368 057 456 185 

Prepayments to suppliers 130 690 217 741 

Total current assets 498 748 673 926 

Current liabilities 

Completed production 1 974 126 1 135 276 

Invoiced production 2 421 340 1 775 214 

Prepayments from customers -447 214 -639 938 

Non-invoiced production cost, suppliers -336 732 -149 790 

Total current liabilities -783 946 -789 729 

Risks related to the estimation of the posted values are further discussed under accounting principles, in sections 2.20 and 4. 

72

note 3 inventories 



Inventories, incl. non-current 430 612 438 103 

Obsolescence -8 025 -17 608 

Total inventories 422 587 420 495 

Work in progress 0 41 693 

Book value of inventories pledged as security for liabilities 321 200 305 436 

Raw materials removed from storage for use in ongoing production in 2010 is presented along with accrued, 

non-invoiced production. Consumption of raw materials, supplies, changes in finished goods and changes 

in work in progress are included under the item cost of sales, and amounts to 2 396 428 TNOK in 2010 

(2009: 2 900 892 TNOK) 

note 4 Payroll expenses and employee information 


Payroll expenses 2010 2009 

Salaries 480 538 516 296 

Employer’s social security contribution 69 415 68 738 

Defined benefit pension costs 13 952 16 124 

Defined contribution pension costs 27 928 28 156 

Other benefits 25 314 34 154 

Total payroll expenses 1) 617 148 663 467 

Number of employees at the end of the year 1 057 1 136 

1) The 2009 annual report lists the total wage cost at 483 127 TNOK. The corresponding figures for 2009 

has been revised for illustration purposes only. The alteration for 2009 amounts to 180 340 TNOK. 

The number of employees in the Group decreased by 79 from 2009 to 2010. 

Board remunerations* 2010 2009 

Trym Skeie (Chairman of the board from 11.09) 160 46 

Birger Skeie - deceased estate (Chairman of the board until 08.09) 69 183 

Nils O. Ardal (until 06.10) 262 262 

Bjarne Skeie 175 175 

Rune Selmar (07.10 - 12.10) 0 0 

Anne Breive 205 205 

Kjerstin Fyllingen 205 205 

Karen Torine Mørkestøl (from 10.10) 0 0 

Jarle Dyrdal (from 10.10) 0 0 

Olav Smeland (until 10.10) 88 88 

Anne Karin Bedringås (until 10.10) 88 88 

Total 1 251 1 153 

*) The Annual General Meeting determines the remuneration to the Board from one general meeting 

to the next. For the accounting year 2010, the same remuneration was stipulated as was determined by 

the Board at the Annual General Meeting for 2010. Proposed remuneration from the General Meeting 

in 2010 until the General Meeting in 2011, is stipulated in the notice of the General Meeting 03.06.10. 

The same applies to the nomination committee. 


73


note 4 cont. 

NOMINATION COMMITTEE REMUNERATION 

The TTS nomination committee is comprised of the following members: Bjørn Olafsson (Chairman), Bjørn Sjaastad og Johan Aasen. 

The nomination committee remuneration for 2010 was 40 TNOK for the chairman and 25 TNOK for each of the members, a total of 90 TNOK. 

STATEMENT REGARDING THE STIPULATION OF REMUNERATION AND OTHER BENEFITS FOR THE PRESIDENT & CEO AND OTHER ExECUTIVES 

Regarding group management, TTS Group ASA’s remuneration policy is based on offering competitive terms. Remunerations should reflect that 

TTS is a listed company with an international focus. The annual remuneration is based on group managements part-taking in the results generated 

by the company and the added value for shareholders through increased company value. 

Remuneration consists of three main components; Base salary, bonus and a share option programme. 

Bonus is determined on the basis of target results. In certain circumstances where change and development are of decisive nature, the bonus is 

further based on specific developmental targets. Bonus targets are revised annually. The maximum bonus is one year’s base salary for the President 

& CEO, and up to 50 % 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 programmes with a two year term. Redemption price equals market price on allotment. First exercise 

is 50 % after one year. Next 12,5 % per quarter, in addition to options not previously utilised. Each option program expires after 2 years. 

The group pension scheme in Norway is based on about 65 % of base salary at the age of 67, limited to 12G, with the exeption of TTS Sense AS 

which has a defined contribution scheme. For employees abroad, the prevailing schemes in the respective companies apply. 

The period of notice is 6 months with a severance pay of 24 months, including period of notice for the President & CEO and from 6 to 24 months 

for the other memers in the senior executive group. 

The share option program is contingent on 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 Group ASA. Remuneration to other executives is determined 

by the President & CEO. 

REMUNERATION AND OTHER BENEFITS FOR THE PRESIDENT & CEO AND OTHER ExECUTIVES 

Other Bonus Share Total Pension 

Name Position Base salary benefits paid options remuneration cost 

Johannes D. Neteland President & CEO 1 762 163 0 0 1 925 953 

Arild Apelthun CFO (from 04.10) 909 12 0 0 921 61 

Mette Henriksen Acting CFO (until 03.10) 281 4 0 0 285 10 

Ivar K. Hanson EVP, Marine 1 288 15 75 0 1 378 88 

Lennart Svensson EVP, Port and Logistics 1 175 28 0 0 1 175 335 

Inge Gabrielsen EVP, Energy 1 323 43 0 0 1 366 46 

Remunerations Taxable remuneration 

Other benefits Car sheme, group life insurance, taxable pension schemes, telephone, newspapers, etc. 

Bonus paid Bonus paid in current year 

Share options Difference in market price and exercise price 

Total Total taxable remuneration 

Taxable pension scheme is early retirement and top-hat pension (CEO) which used to be a annuity-based solution. In accordance with the new tax 

regulations per 01.01.07, these are considered taxable benefits. The early retirement scheme applies to the President & CEO from the age of 60. 

REMUNERATION OF AUDITOR 


Statutory audit 4 699 4 370 

Other attestation services 277 24 

Other services including tax service 1 106 1 726 

Total 6 082 6 121 

74

note 5 Pension 



The Norwegian companies in the group, with the exception of TTS Energy, has defined benefit pension plans that give employees the right to future 

pension benefits depending on length of service, salary levels, retirement age and the National Insurance benefits received. As of 31.12.10 the pension 

scheme includes 247 persons, including 10 active retirees. The Group’s obligation are covered primarily by an insurance company. The parent company 

has unfunded pension liabilities for which provisions have been made. Group companies outside Norway have defined benefit plans in accordance 

with local practice and regulations, which are of defined contribution nature. TTS Energy AS also has a defined contribution pension plan. 

The net pension obligations for companies affiliated with the benefit plans are based on the assumptions as of 31.12.10 and are determined as follows: 


Insured Uninsured Total Insured Uninsured Total 

Market value of pension funds 80 443 0 80 443 72 070 0 72 070 

- Net present value of accrued pension obligations -117 863 -1337 -119 200 -89 958 -1892 -91 850 

+ Unrecognised estimate changes and deviations 49 863 34 49 897 32 635 -271 32 363 

- Accrued payroll tax -3 144 -188 -3 332 2 650 267 2916 

= Net pension obligations after payroll taxes 9 299 -1 457 7 808 12 098 -2 430 9 668 

Net pension costs are determined as follows: 2010 2009 


Net present value of current year’s pension benefits 10 877 247 11 124 10 565 275 10 839 

+ Interest payable on pension obligations 3 933 75 4 008 3 313 60 3 373 

- Expected return on pension funds -3 541 0 -3 541 -3 295 0 -3 295 

+ Recognised estimate changes and deviations 2 585 -1 477 1 108 3 719 -52 3 667 

+ Change in payroll tax 1 590 46 1 636 1 492 48 1 540 

+ Costs in relation to accrued pension 

from prior periods 0 262 262 0 0 0 

= Total costs, included in wage costs 15 444 -847 14 597 15 794 330 16 124 

Change in recognised funds: 2010 2009 

Book value as of 01.01. 9 668 11 362 

- Cost recognised during the year (see above) 14 597 16 124 

+/- Pension payments and payment of pension premiums 16 457 14 429 

= Book value as of 31.12 7 808 9 668 

The following economic assumptions have been made 

for calculation of the pension obligations: 2010 2009 

31.12. 1.1. 31.12. 1.1. 

Return on pension funds 3.20 % 5.60 % 5.60 % 6.10 % 

Discount rate 4.60 % 4.40 % 4.40 % 5.10 % 

Annual wage growth 4.00 % 4.25 % 4.25 % 4.50 % 

Annual adjustment of National pension index (G) 3.75 % 4.00 % 4.00 % 4.25 % 

Annual adjustment of pensions in payment 3.75 % 4.00 % 4.00 % 2.35 % 

Voluntary retirement 10.00 % 10.00 % 10.00 % 10.00 % 

Withdrawal propensity for early retirement (AFP) 45.00 % 45.00 % 45.00 % 45.00 % 

Payroll tax 14.10 % 14.10 % 14.10 % 14.10 % 

Risk related to the estimates that form the basis for the book values are further described in Accounting principles, under sections 2.17 and 4. 

TTS Handling Systems AS, TTS Energy Bergen AS and TTS Marine AS partially participates in a LO/NHO-pension plan that enables all employees to 

choose early retirement from the age of 62 years. This plan was motioned terminated in February 2010 and early retirement according to this arrangement 

was only available for the company’s employees until 31.12.2010. The effect of the termination have been recognised in 2010. The remaining appropriation 

regards the company’s own risk for persons that are early retirees of this pension plan. At the termination of the the old AFP-plan there proved to 

be a significant undercoverage in the old pension plan. This undercoverage will have to be covered by the participating companies through continued 

payment of premiums for the coming five years. The company’s share of this undercoverage has been estimated and made provisions for. 

As replacement of the old AFP-pension plan a new AFP-plan has been established. The new AFP-plan is, unlike the old, not an early retirement plan 

but a plan that gives a lifelong addition to the ordinary pension. The employees can choose to realise the new AFP-plan from the age of 62 years 

while continuing working, as the plan gives additional earnings for continued work until the age of 67 years. The new AFP-plan is a defined benefit 

multi-company pension scheme and is financed through premiums determined as a percent of salary. At the time there are no reliable rating and 

allotment of liabilities and assets in the pension plan. In accounting the plan is considered as a defined contribution plan of which the premium 

payments are current costs, and no provisions are made in the financial statement. No premium is expected to be paid to this new pension plan until 

2012, at which time the premium is set to 1,4 % of total payments between 1G and 7,1G to the company’s employees. There is no accumulation 

of capital in the scheme and it is not expected that the premium level will increase the coming years. 

75


note 6 Fixed assets 


76 

Furniture, 

office-, 

Machinery and computer 

Property Buildings and vehicles equipment Total 

AS OF 1 JANUARy 2009 

Acquisition cost 01.01. 15 273 34 092 50 430 120 389 219 584 

Accumulated depreciation as of 01.01. -600 -4 803 -25 645 -64 439 -94 887 

Book value as of 01.01. 14 673 29 288 24 785 55 950 124 696 

2009 FISCAL yEAR 


Foreign currency differences -1 184 -1 624 -1 535 -1 684 -6 027 

Acquisitions 0 0 0 0 0 

Additions 0 791 7 595 36 288 44 674 

Disposals 0 0 -3 089 -1 443 -4 531 

Amortisation for the year 0 -1 415 -3 645 -23 969 -29 028 


AS OF 31 DECEMBER 2009 

Aqcuisition cost 31.12. 14 089 33 259 53 401 153 551 253 699 



2010 FISCAL yEAR 


Foreign currency differences 467 -3 798 -6 803 21 564 11 435 


Additions 812 1 106 608 17 878 20 404 

Disposals 0 -267 -447 -13 344 -14 058 

Amortisation for the year -199 -3 498 -11 249 -20 182 -35 132 


AS OF 31 DECEMBER 2010 

Acquisition cost 31.12. 15 382 30 300 55 029 179 649 254 272 



Property in the Norwegian companies has been pledged as security for long-term and short-term debt to credit institutions, see Note 13. 

LEASED FIxED ASSETS: 

Machinery Computer 

and vehicles equipment 


Book value as of 01.01. 0 0 

Additions 0 0 

Disposals 0 0 

Amortisation for the year 0 0 

Book value as of 31.12. 0 0 


Book value as of 01.01. 909 1 832 

Foreign currency differences 0 0 

Additions 0 0 

Disposals -909 -1 832 

Amortisation for the year 0 0 

Book value as of 31.12. 0 0

note 7 intangible assets 


Customer Patents, 

portfolio licences etc. 1) R&D Goodwill 2) Total 

AS OF 1 JANUARy 2009 

Acquisition cost 01.01. 5 219 19 729 242 114 976 695 1 243 777 

Accumulated depreciation as of 01.01. -1 122 -9 952 -5 399 -22 081 -38 554 

Book value as of 01.01. 4 097 9 654 236 838 954 614 1 205 203 


Book value as of 01.01 4 097 9 654 236 838 954 614 1 205 203 

Foreign currency differences 0 0 -183 -21 210 -21 393 

Additions 0 2 412 62 621 0 65 033 

Acquisitions 0 0 0 3 185 3 185 

Disposals 0 0 -3 016 0 -3 016 

Depreciation 0 0 0 -108 506 -108 506 

Amortisation for the year -522 -1 358 -16 442 0 -18 322 

Book value 31.12. 3 575 10 708 279 818 828 083 1 122 184 

PER 31 DECEMBER 2009 



Book value 31.12. 3 575 10 708 279 818 828 083 1 122 184 


Book value 1.1. 3 575 10 708 279 818 828 083 1 122 184 

Foreign currency differences 522 4 354 -298 -899 3 679 

Additions 0 2 398 10 506 0 12 904 


Disposals 0 -1 656 -4 270 0 -5 926 

Depreciation 0 0 0 0 0 

Amortisation for the year -391 -1 358 -15 098 0 -16 847 

Book value 31.12. 3 706 14 568 270 659 827 184 1 116 117 

PER 31 DECEMBER 2010 



Book value 31.12. 3 706 14 568 270 659 827 184 1 116 117 

BOOK VALUE R&D, PATENTS AND LICENCES PER 31.12. CONSISTS OF: 

EU project ”Terminal System” 8 996 

Development - Drilling equipment 199 202 

Development - Heave compensated VME 8 212 

Development - Offshore cranes 34 230 

Others 20 019 

Total 270 659 


For proprietary products a continuous assessment is carried out to ensure the criteria for recognition of development costs have been met. 

1) THE ITEM CONSISTS OF: 

TTS Port Equipment AB has activated own development relating to the development of terminal systems. 

TTS Energy AS - Drilling unit has activated Rack & Pinion (R&P) rig solution, other drilling solutions, joint integrated machine (JIM) 

and mud mixing plant. 

TTS Energy AS - Offshore unit has activated own development of automatic handling winches with high pressure hydraulics. 

TTS Energy AS - Offshore unit has activated own development of a range of concepts for subsea offshore cranes with secondary 

controlled active heave compensation (AHC). 

77


note 7 cont. 

2) SUMMARy OF THE ALLOCATION OF GOODWILL AT SEGMENT LEVEL IS AS FOLLOWS: 

78 

2010 Port Marine Energy Other Total 

Scandinavia 37 821 208 863 481 065 0 727 749 

Rest of Europe 0 97 382 0 0 97 382 

Asia 0 2 053 0 0 2 053 

Rest of world 0 0 0 0 0 

Total 37 821 308 298 481 065 0 827 184 

2009 Port Marine Energy Other Total 

Scandinavia 39 769 207 814 481 065 0 728 648 

Rest of Europe 0 97 382 0 0 97 383 

Asia 0 2 053 0 0 2 053 

Rest of world 0 0 0 0 0 

Total 39 769 45 566 478 061 0 828 083 


GOODWILL IMPAIRMENT ASSESSMENT 

There are external indicators of the need to test for impairment of the carryvalue of the three assessments cash generating units (CGU) in accordance 

with the IAS 36-structure. The TTS Group has defined three CGUS in the group, consistent with the three divisions below. The value of goodwill in the 

balance sheet and important assumptions for the test is shown below: 

Goodwill Revenue EBITDA Margin 

31.12.10 2010 

(MNOK) (MNOK) 2009 2010 2011-2014 2015 WACC 

DIVISION (CGU) 

Marine 308 2 230 4.0 % 7.1 % 6.4 % - 8.0 % 8.9 % 9.5 % 

Port and Logistic 38 299 5.9 % 6.9 % 5.2 % - 8.3 % 8.3 % 9.5 % 

Energy 481 712 -16.3 % -23.7 % 5.3 % - 8.6 % 9.5 % 9.5 % 

Total 827 3 241 

Test for write down is implemented by estimating a utility value in 

use for each of the divisions, which is compared to the booked value. 

Estimated utility value is based on discounted future cash flows, and 

is subject to the following premises: 

• Expected cash flows are set to EBITDA with deductions made for investments 

and requirement for working capital, and is based on an actual 

board-approved business plan for each division over the next five years. 

The basis for this is a growth in turnover up until 2015. From 2016, 

growth is assumed to be equal to inflation, and on this basis calculation 

has been made of a terminal value at the end of the sixth year (2016). 

• Sales income is based on thorough market analyses and evaluations 

of the different markets in which the various companies and divisions 

compete. There is a varying development between the divisions, particularly 

for 2011, for which allowance has been made for the Energy 

division with regard to the demanding market in the years mentioned. 

After 2011, the basis for these divisions is growth in turnover. 

• Expected future earnings (EBITDA) is estimated at a level with competing 

and comparable companies in the marketplace. The positive 

development in EBITDA margin is in part the result of increased 

volume and in part the expectation of generally higher margins 

when the markets recover. The estimates are further based, in 

particular for the Energy division, on that the major development 

projects implemented will yield future returns and lowered costs. 

• Inflation is presumed at 2.5 % per year, and all values in the 

estimations are based on real value (less inflation). The presumption 

of inflation is according to estimates from Norges Bank. 

• Weighted average cost of capital (WACC) is calculated on the basis 

of the capital asset pricing model. The WACC from the total capital 

is pre-tax and less inflation. All divisions are stipulated at the same 

WACC (9.5 %). Beta values are calculated by comparison with other 

similar listed companies. The basis for all divisions is a risk-adjustment 

of 5 % relating to equity. 

• The investment requirements of each division are based on an investment 

plan approved by the Board. On the basis of the major investments 

in recent years, it is budgeted for a lower level of investment than the 

previous years. 

• Change to the working capital is estimated on the basis of the working 

capital constituting 8 % of the division’s operating income. Beyond 

this, it has been assumed that the group will be able to reduce working 

capital in 2011. With regard to the Energy division, it is anticipated the 

sale of three rigs in stock during 2011. 

Based on the above presumptions, the estimated value in use exceeds 

the carrying value for each CGU indicating that there is no need to 

impair in any of the divisions. Please note, however, that there is a high 

degree of uncertainty related to the presumptions, and that changes 

to theses could entail future write downs. The group has conducted 

sensitivity analyses that show no need for write downs given the 

following premises: 

- 10 % decline in sales revenues 

- 1 %- point increase in the WACC 

- 1 %- point decrease in EBITDA margin 

Sensitivity analysis does show that the risk of the utility value falling 

below the book value is greatest in the Energy division. A decrease 

of 1 percentage point in the EBITDA, together with an increase in 

WACC of 1.8 percentage points, will represent a need for write down 

of approximately 4 MNOK. A decrease of 2.0 % in the EBITDA together 

with an increase in WACC of 1 % will represent a need for write down 

of approximately 44 MNOK. Furthermore, the sensitivity analysis does 

show that a decrese of 10 % in revenue, together with an decrease in 

EBITDA of 1,0 % does not represent a write down scenario. A decrease 

of 20 % in revenue, combined with a 2.0 % decrease in EBITDA will 

represent a write down requirement of approximately 21 MNOK.

note 8 investments in other companies 


Ownership (percent) Acquisition cost 2010 

Book value 

2009 

FIxED ASSETS 

Shin young Heavy Industry 13.4 % 222 222 222 

FastShip Inc.* 6.7 % 13 326 0 1 723 

Other 2 0 0 

Total investment in other enterprises 13 550 222 1 945 

Other investments in shares are wholly defined as available for sale. 

*) In the balance sheet per 31.12. the company has recorded 615 156 shares in FastShip Inc (FSI) with a total book value of 1 NOK. 

There are currently no ongoing activity in the project and the company’s certificates have expired. The company is per 31.12.2010 still active 

for judicial clarifications of a sertificate dispute in the US. Since the project is terminated TTS has recorded the whole investment 

of 19.0 MNOK as a loss. Shares have been written off by 1.7 MNOK, and convertible loan with 1.1 MNOK in 2010. 


note 9 Subsidiaries 


The following subsidiaries are included in the consolidated accounts: 

TTS GROUP ASA 

Subsidiary Registered office Aqcuisition date Ownership (percent) Voting 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 Marine AB (former TTS Ships Equipment AB) Gothenburg, Sweden 2002 100 % 100 % 

TTS Marine Shanghai Co Ltd Shanghai, China 2002 100 % 100 % 

TTS Energy Bergen AS (former TTS Marine Cranes AS) Bergen, Norway 2006 100 % 100 % 

TTS Cranes Norway AS Bergen, Norway 2007 100 % 100 % 

TTS Energy Ålesund AS (former TTS Offshore Handling) Ålesund, Norway 2007 100 % 100 % 

TTS Energy AS (former TTS Sense AS) Kristiansand, Norway 2007 100 % 100 % 

TTS Marine AS Bergen, Norway 2009 100 % 100 % 

TTS Singapore Pte. Ltd. Singapore 2009 100 % 100 % 

TTS Greece Ltd. Pireus, Greece 2009 100 % 100 % 

Joint venture 

TTS BoHai Machinery Co. Ltd. Dalian, China 2005 50 % 50 % 

With accounting effect from January 2010, the companies TTS Energy AS (surviving), TTS Energy Bergen AS and TTS Energy Ålesund AS 

were merged. Final closing date, including fiscal merger date is January 2011. 

TTS MARINE AB HAS THE FOLLOWING INVESTMENTS: 


TTS Marine GmbH (former TTS Ships Equipment GmbH) Bremen, Germany 1997 100 % 100 % 

TTS Marine Inc. Virginia, USA 1994 100 % 100 % 

TTS Hua Hai AB Gotheburg, Sweden 2002 100 % 100 % 

TTS Liftec Oy Tampere, Finland 2004 100 % 100 % 

TTS Port Equipment AB Gotheburg, Sweden 2005 100 % 100 % 

TTS Marine S.r.l Genoa, Italy 2006 100 % 100 % 

Joint venture 

TTS Hua Hai Ships Equipment Co. Ltd. Shanghai, China 2002 50 % 50 % 

TTS JV Jiangsu Shanghai, China 2007 50 % 50 % 

TTS Keyon Marine Equipment Co. Ltd. was sold during 2010. 


79


note 9 cont. 

TTS MARINE GMBH HAS THE FOLLOWING INVESTMENTS: 


TTS-LMG Marine Cranes GmbH Lübeck, Germany 2004 100 % 100 % 

TTS Kocks Ostrava s.r.o Ostrava, Czech Republic 2005 100 % 100 % 

TTS Kocks GmbH Korea Co. Ltd Korea 2007 100 % 100 % 

TTS Marine Equipment Dalian, China 2008 100 % 100 % 

In 2010 TTS Kocks GmbH was merged with former TTS Ships Equipment GmbH. The company name was changed to TTS Marine GmbH in relations 

with the merger. 

TTS ENERGy AS HAS THE FOLLOWING INVESTMENTS: 


TTS Sense (Canada) Ltd. Edmonton, Canada 2007 100 % 100 % 

TTS Sense MUD AS Kristiansand, Norway 2007 100 % 100 % 

TTS Sense Pte Ltd Singapore Singapore 2007 100 % 100 % 

TTS EDM Inc USA 2007 100 % 100 % 

TTS Mexico S.A de C.V Mexico 2009 100 % 100 % 

TTS Drillrig AS Kristiansand, Norway 2010 100 % 100 % 

Joint venture 

TTS Sense Drillfab AS Kristiansand, Norway 2007 50,0 % 50,0 % 

Maskinering og Sveiseservice AS Kristiansand, Norway 2007 34 % 34 % 

With accounting effect from January 2010, the companies TTS Energy AS (surviving) and TTS Sense MUD AS was merged. 

Final closing date, including fiscal merger date is January 2011. Joint ventures are accounted for in accordance with the equity method. 

note 10 investments in joint ventures 


Joint ventures are accounted for in accordance with the equity method. 

PER 31 DECEMBER THE GROUP HAS THE FOLLOWING INVESTMENTS IN JOINT VENTURES 

Company Registered office Aqcuisition date Ownership Voting share 

TTS Hua Hai Ships Equipment Co. Ltd. Shanghai, China 2002 50 % 50 % 

TTS Jiangsu Shanghai, China 2007 50 % 50 % 

TTS Bohai Machinery Co. Ltd. Dalian, China 2005 50 % 50 % 

Sense Drillfab AS Kristiansand, Norway 2007 50 % 50 % 

Maskinering og Sveiseservice AS Kristiansand, Norway 2007 34 % 34 % 

INTERESTS IN TTS Bohai TTS Hua Hai TTS Keyon 

JOINTLy CONTROLLED 

OPERATIONS 

Machinery 

Co. Ltd. 

Ships Equipment 

inkl. Jiangsu 

Marine Equipment 

Co. Ltd. 

Sense 

Drillfab Total 

Opening balance 01.01.2010 12 579 66 794 10 675 3 913 93 960 

Aqcuisitions/establishments 0 0 0 0 0 

Share of profit/loss 891 30 045 0 0 30 936 

Currency effect 935 5 225 -10 329 1 -4 168 

Closing balance 31.12.2010 14 405 102 064 346 3 914 120 730 

There are no contingent liabilities relating to the Group’s interests in the joint ventures and no contingent liabilities of the joint ventures themselves. 

GROUP’S SHARE OF PROFIT/LOSS, Long term Current Long term Current 

ASSETS AND LIABILITIES PER 31.12.10 assets assets liabilities liabilities Income Profit/loss 

TTS Hua Hai Ships Equipment Co., Ltd incl. Jiangsu 23 476 131 061 0 66 599 271 030 30 045 

TTS Bohai Machinery Co., Ltd 1 683 56 996 0 45 594 155 891 891 

TTS Keyon Marine Equipment Co., Ltd 0 0 0 0 0 0 

Sense Drillfab 239 4 114 0 2 303 7 547 0 

Total 25 398 192 171 0 114 496 434 468 30 936 

GROUP’S SHARE OF PROFIT/LOSS, Long term Current Long term Current 

ASSETS AND LIABILITIES PER 31.12.09 assets assets liabilities liabilities Income Profit/loss 

TTS Hua Hai Ships Equipment Co. Ltd. incl. Jiangsu 21 050 137 191 0 91 447 251 819 17 566 

TTS Bohai Machinery Co. Ltd. 1 956 75 076 0 64 453 127 271 935 

TTS Keyon Marine Equipment Co. Ltd. 4 500 45 000 0 38 825 0 3 140 

Sense Drillfab 0 3 913 0 0 0 0 

Total 27 506 261 180 0 194 725 379 090 21 641 

80

note 11 Trade and other receivables 



Trade receivables 572 278 704 684 

Loss provisions -83 479 -139 542 

Net trade receivables 488 799 565 141 

Recognised value of Group receivables per currency: 

Euro 162 425 178 375 

USD 80 097 211 856 

NOK 208 047 139 239 

Other currencies 38 231 35 671 

Total 488 799 565 141 

Additional information on accounts receivables and associated risks, see 24 and sections 2.11, 3.1 and 4.0 under Accounting Principles. 

Other receivables under financial fixed assets: 

Loan capital Fast Ship 1 0 1 143 

Deposit 0 259 

Loan 0 1 998 

Other receivables 0 3 400 

Other receivables under short-term receivables: 

Foreign currency contracts 69 666 89 864 


Other short-term receivables 192 717 192 348 

1) TTS Group ASA has given a convertible loan of 5 830 TNOK to FastShip Inc. Ref. Note 8. 

The loan was written down by 4 549 TNOK in 2007, 138 TNOK in 2008 an additionally 1 143 TNOK in 2010. 

All are long-term receivables without fixed maturity. 


81


note 12 Long-term liabilities 


PERiOD OF REPAYMEnT AnD MATURiTY DATES 

Balance 2016 

31.12.10 2011 2012 2013 2014 2015 and later 

Bond loan 400 000 0 400 000 0 0 0 0 

Long-term liabilities 150 685 30 554 81 063 4 500 3 575 18 550 12 444 

Total long-term debt incl. first year instalments 550 685 

- first year installment of long-term debt -30 554 0 0 0 0 0 0 

Total long-term debt 520 132 30 554 481 063 4 500 3 575 18 550 12 444 

Expected interest payments 31 700 17 000 2 000 2 000 2 000 1 000 

SPEciFicATiOn OF LOAnS 

82 

Loan Nominal Installment Book value Book value 

type Currency interest rate Maturity terms 2010 2009 


Nordea ASA Mortgage loan NOK Nibor+2.75 % 2011 quarterly 3 590 10 730 

Norsk Tillitsmann ASA Bond Issue NOK Nibor +3.375 %* 2012 none 400 000 450 000 

Innovasjon Norge Mortgage loan NOK 5.75 % 2015 bi-annually 15 000 15 000 

DRILLRIG AS 

Ability Drilling, bankruptcy estate Mortgage loan NOK 6.00 % 2012 none 75 000 0 

TTS MARINE GMBH 

Nordea Mortgage loan EUR Euribor +1.15 % 2011 quarterly 5 276 11 226 

TTS KOCKS OSTRAVA 

Unicredit Bank Mortgage loan EUR Euribor +1.275 % 2012 quarterly 3 125 3 304 

TTS KOCKS KOREA LTD. 

Pusan Bank Mortgage loan KRW 4.40 % 2014 quarterly 5 075 6 695 

TTS MARINE SHANGHAI 

DnB NOR Bank AS Shanghai Branch Mortgage loan EUR market rate + 1.5 % 2011 none 15 625 0 

DnB NOR Bank AS Shanghai Branch Mortgage loan EUR market rate + 1.5 % 2015 none 15 625 0 

DnB NOR Bank AS Shanghai Branch Mortgage loan RMB market rate 2016 none 12 444 0 

Total 550 685 496 880 

*) In addition comes approximately 0.3 % in capitalization costs. The bond matures 27.05.2012. 

Fair value is estimated to approximately equal to carrying value as the loans are based on market terms and no fixed-rate terms exists. 

Recognised value of the Group’s long-term liabilities in various currencies are as follows: 


NOK 493 515 475 655 

EUR 39 651 11 226 

RMB 12 444 0 

CZK 0 3 304 

KRW 5 075 6 695 

Total 550 685 496 880 

See Note 13 for security on long-term debt. 

Risk related to the estimates that form the basis for the book values are 

further described in Accounting principles, under sections 2.7, 2.14, 3 and 4.

note 13 Assets pledged as security and guarantees 


The credit facility of TTS Group ASA in Norway is established with Nordea Norge ASA (Nordea) and Sparebanken Vest, 

with Nordea as agent. TTS Group ASA has the following credit facilities: 


Limit Drawn Limit Drawn 

Group account/bank overdraft facility 327 000 -81 332 330 000 -152 

Drawing facility, operations 425 000 425 000 475 000 475 000 

Guarantee limit for Group (including Energy division) 425 000 401 431 425 000 427 598 

Per 31.12.10 the Norwegian companies, as well as TTS Sense Canada, TTS Marine AB, TTS Port Equipment AB and TTS Marine GmbH are included 

in the Group account. The same applies for the Group’s guarantee limit. The guarantee limits covers payment guarantee, performance bonds, 

advance payment bonds and tax guarantees. 

For the above mentioned facilities the following assets (from TTS Group ASA, TTS Energy AS, TTS Handling Systems AS, TTS Ships Equipment AS 

and Norlift AS, which also holds responsibility) have been pledged as collateral to Nordea: 

Assets pledged as collateral for secured debt: 2010 2009 

Shares in TTS Marine AB 519 827 519 827 

Account/Group receivables 645 920 300 148 

Non-invoiced production 91 100 226 954 

Inventory/Work in progress 321 200 305 437 

Prepayments to suppliers 65 951 145 010 

Property 3 050 3 155 

Total assets pledged as collateral 1 647 048 1 500 530 

In addition the following has been pledged with leasing right with additional equipment. 


TTS Group ASA has a loan in Innovasjon Norge for establishment 

of TTS Marine Equipment (Dalian, Kina) Co. Ltd. The loan of 15 MNOK 

has security in the shares of TTS Marine Equipment Co. Ltd. 

TTS-LMG MARINE CRANES GMBH 

As of 31.12.2010 6,2 MNOK (0,8 MEUR) was drawn in guarantees. 

This amount is included in the total guarantee drawn with Nordea 

of 401 MNOK in the above table. 

MARINE GMBH 

As of 31.12.2010 38.2 MNOK (4.9 MEUR) was drawn in guarantees. 

This amount is included in the total guarantee drawn with Nordea 

of 401 MNOK in the above table. 

TTS LIFTEC Oy 

TTS Liftec Oy has a bank guarantee limit of 25 MNOK (3.0 MEUR) 

with Sampo Pankki Oyi (Sampo Bank) in Finland. As of 31.12.10 this 

was drawn with 2.3 MNOK (285 000 EUR). The bank has a parent 

company guarantee from TTS Group ASA of 27,5 MNOK (3.3 MEUR). 

TTS MARINE SHANGHAI CO. LTD. 

TTS Marine Shanghai Co. Ltd. has established a credit facility 

with DnB Bank ASA, Shanghai Branch with a credit limit of 

31.25 MNOK (4 MEUR) which was drawn with 31,25 MNOK 

(4 MEUR) as of 31.12.10. A credit limit has also been established 

in RMB of 26.7 MNOK (30 MRMB) which was drawn with 

12,4 MNOK (14 MRMB) as of 31.12.10. The bank has a parent 

company guarantee from TTS Group ASA of 7,8 MNOK (1 MEUR). 

TTS MARINE AB 

TTS Marine AB has established several bank guarantee agreements 

with Bohus Banken (part of Den danske Bank). As per 31.12.10 total 

guarantees were 122.8 MNOK (141.0 MSEK). The bank has a parent 

company guarantee from TTS Group ASA of 150 MNOK. 


TTS KOCKS OSTRAVA S.R.O 

TSS Kocks Ostrava s.r.o has established a loan of 3.1 MNOK (0.4 MEUR) 

with UniCredit Bank Czech Republic a.s in the Czech Republic. The 

company also has a credit limit of 1.5 MNOK (5 MCZK), with a draw 

of 1.4 MNOK (4.5 MCZK) as of 31.12.10. The bank has security in the 

company’s assets, in addition TTS Group ASA is co-debtor. The assets 

are recorded to 15,3 MNOK (49 MCZK). 

TTS PORT EQUIPMENT AB 

TTS Port Equipment AB has established several bank guarantee agreements 

with Bohus Banken (part of Den danske Bank). As per 31.12.10 

total guarantees were 45.2 MNOK (51.9 MSEK). The bank has a parent 

company guarantee from TTS Group ASA of 50 MNOK. 

TTS KOCKS KOREA 

TTS Kocks Korea s.r.o has established a loan of 7,1 MNOK (1 366,4 MKRW) 

with Pusan Bank in Korea. The company also has a credit limit of 

12.3 MNOK (2 500 MKRW), of which 10.9 MNOK (2 102 MKRW) was 

drawn. The bank has security in the company’s building, in addition 

TTS Group ASA is co-debtor. The building is recorded to 18.23 MNOK 

(3 506.7 MKRW). 

DRILLRIG AS 

Drillrig AS has established a loan of MNOK 75.0 with the bankruptcy 

estate of Ability Drilling in connection with the purchase of a land 

rig from the estate. The Ability Drilling estate has security for unpaid 

purchase in the rig. The rig value equal MNOK 75.0. As of 31.12.2010, 

the rig is recognized as inventory. 

83


note 13 cont. 

COVENANTS 

The Group has undertaken to meet the following financial strength requirements for Nordea: 

There is a requirement that the group equity shall be greater than 800 MNOK at all time. In addition, the equity ratio must be greater than 25 %. 

Nordea has accepted that the subordinated con vertible bond loan of 200 MNOK are to be considered as equity as per 31.12.2010. With an equity 

of 802 MNOK together with the subordinated convertible bond loan of 200 MNOK, the equity rate as per 31.12.2010 is 29.0 %, thus TTS Group meet 

the financial covenant requirement as per 31.12.2010. Part of the syndicate facility (150 MNOK) must be repaid latest within 31.12.2011, or sooner 

if proceeds from sales of assets or material inventory sale are material. Please find maturity description for the Group’s financial liabilities 

in section 3.1 under Accounting principles. 

The Group has undertaken to meet the following financial strength requirements for Norsk Tillitsmann ASA: 

There is a requirement that the equity shall be greater than 550 MNOK at any time. Norsk Tillitsmann ASA has accepted that the subordinated 

convertible bond loan of 200 MNOK are to be considered as equity as per 31.12.2010. With an equity of 802 MNOK together with the subordinated 

convertible bond loan of 200 MNOK, the equity rate as per 31.12.2010 is 29.0 %, thus TTS Group meet the financial covenant requirement as per 

31.12.2010. Regarding the bond loan there is in addition to the covenant requirement of equity ratio at 22,5 % and nominal equity of 550 MNOK, 

a multiple of other standard default clauses related to the bond loan inclusive cross default clauses. 

note 14 Tax 


Deferred tax and deferred tax assets are netted if the Group has a legal right to offset deferred tax assets against defferd taxes in the balance 

sheet, and if the deferred taxes are owed to the same tax authorities 


DEFERRED TAx ASSETS 

Gross deferred tax assets -273 927 -230 579 

- Write down of deferred tax assets 88 500 0 

- Offset deferred taxes 22 967 42 949 

- Deferred tax assets to be recovered after 12 months 

- Deferred tax assets to be recovered within 12 months 

-162 460 -187 630 

Total recognised deferred tax assets -162 460 -187 630 

DEFERRED TAxES 

Gross deferred tax 48 526 65 288 

- Netted deferred taxes against deferred tax assets -22 967 -42 949 

- Deferred tax to be recovered after 12 months 25 559 22 339 

- Deferred tax to be settled within 12 months 

Total recognised deferred taxes 25 559 22 339 

Net deferred taxes in Group -136 901 -165 291 

Change in recognised deferred taxes 

Recognised value 1.1. -165 291 -41 233 

Recognised in period (see specification under) -71 586 -115 349 

Deferred tax related to the acquisition of TTS Sense 0 -6 426 

Depreciation of deferred tax assets 88 500 0 

Prior period adjustment of deferred taxes 11 476 -2 283 

Recognised value 31.12. -136 901 -165 291 

Change in deferred taxes and deferred tax assets (excluding netting within the same tax regime): 

1.1.2009 Changes 2009 31.12.2009 Changes 2010 31.12.2010 

DEFERRED TAxES/DEFERRED TAx ASSETS 

Fixed assets 7 044 4 665 11 709 310 12 020 

Current assets 92 354 -19 166 73 188 -82 688 -9 500 

Other temporary differences/provisions 16 047 12 798 28 845 -12 324 16 521 

Deferred tax credit -6 182 0 -6 182 0 -6 182 

Deferred tax benefits -1 260 0 -1 260 0 -1 260 

Impairment deferred tax assets 0 0 0 88 500 88 500 

Tax deductable losses -160 800 -113 646 -274 446 34 591 -239 855 

Change in deferred taxes related to business combinations 6 426 -6 426 0 0 0 

Prior period adjustment 3 879 -2 283 1 596 0 1 596 

Deferred tax assets not recognised 1 260 0 1 260 0 1 260 

Net deferred tax assets -41 232 -124 058 -165 291 28 389 -136 901 

84

note 14 cont. 

Deferred tax assets related to tax deficit carried forward have been recognised as deferred tax assets. This as an effect of the positive future 

prospects to offset the tax deficit against expected taxable profit in the years to come. 

TTS Group and particularly the Norwegian entities allocated to the Energy division have in 2008, 2009 and 2010 had considerable tax losses. 

This is mainly due to the loss of contracts caused by cancellations, recorded tax-related development costs and tax-related losses on accounts 

receivables. These tax losses is considered economic fluctuations and are not expected to be a recurring theme in the coming years. 

As a result of the losses there has been a considerable build-up of tax-related losses in Norway and Germany. 

The Group has received and is expecting orders to yield taxable profit in the years to come. Taxable income may be counterbalanced against 

the carried deficit, enabling utilisation of the tax advantage. An assesment has been made based on IFRS requirements regarding reversion 

of the tax losses in light of the expected tax profit. 

The following criteria has been applied to assess the likelihood of taxable income against which unused tax losses may be utilised: 

- the Group has sufficient temporary differences 

- tax losses is induced by specific identifiable causes 


Specification of differences between the financial profit 

before tax and the tax basis for the year: 2010 2009 

Pre-tax profit/loss -156 103 -311 942 

Permanent differences -37 965 40 307 

Changes in temporary differences 226 440 -411 960 

Utilisation of tax deductable losses 36 670 -361 

Tax basis for the year 69 042 -683 956 

Decomposition of tax cost: 

Payable tax 1) 23 639 51 889 

Impairment deferred tax assets 88 500 0 

Change in tax deductable losses -71 586 -115 349 

Tax cost in the P&L statement 40 553 -63 460 

1 ) Tax payable is related to the foreign subsidiaries’ taxable profit that cannot be offset against tax losses carryforward in Norway. 

Tax payable in the balance sheet: 2010 2009 

Tax payable 23 639 51 889 

Prepaid tax in foreign subsidiaries -17 959 -32 581 

Total tax payable 5 680 19 308 

Average tax rate for Group 22.0 % 22.0 % 

Tax calculated at nominal tax rate -34 343 -68 627 

Prior period adjustment deferred taxes -14 937 1 060 

Impairment deferred tax assets 88 500 0 

Profit JV -8 136 -4 761 

Permanent differences 9 469 8 868 

Tax cost in the P&L statement 40 553 -63 460 

The Group has received and are expecting orders to yield a positive taxable profit the coming years. Taxable income may be offset against 

the carried deficit, enabling utilisation of the tax advantage over time. In accordance with IFRS requirements, impairment testing of 

the value of deffered tax assets have been carried out in light of the expected reversal date for the tax losses. Given the current market 

situation, the Group’s business structure and expected earnings, the Group assesses that the accrued tax losses in Norway cannot be fully 

utilised within the recommended assessment horizon. 

Losses carried forward - Norwegian entities - 31.12.10 205 734 

Present value adjustment of expected earnings 2011-2016 - Norwegian entities 1) 117 234 

Impairment deferred tax assets 88 500 

1) Expected earnings are based on the budget for 2011 and established strategy plans for the period up to 2016. 

The required rate of return (WACC) is calculated on the basis of the capital asset pricing model (CAPM) and set at 9.5 %. The required return 

on the total capital is before tax and deducted of inflation. All divisions are given the same rate of return (9.5 %). The beta values 

are calculated by comparison with similar listed companies. An assuption of a risk premium of 5 % for equity applies for all divisions. 

Various structural alternatives are continuously assessed to ensure the utilization of tax positions in Norway. 

85


note 15 Liquid assets/interest-bearing debt 



Bank deposits, cash etc. as of 31.12. 272 331 191 907 

Deposits (+)/Withdrawals (-) in the cash pool agreement as of 31.12. -81 330 152 

Other short term interest bearing debt -989 560 -1 030 694 

Net interest-bearing debt - /deposits + -798 559 -838 635 

Drawing facilities, security and covenants are described in Note 13. 

note 16 Share capital and shareholder information 

(Amounts in NOK) 

Number of shares as of 31 December Nominal value Book value of share capital 

74 631 199 0.50 37 315 600 

THE FOLLOWING COMPANIES ARE INCLUDED IN TTS GROUP: 

Ownership Share Number 

Company Owner interest Currency capital of shares 

Norlift AS TTS Group ASA 100 % NOK 500 000 500 

TTS Handling Systems AS TTS Group ASA 100 % NOK 950 000 95 000 

TTS Ships Equipment AS TTS Group ASA 100 % NOK 2 500 000 2 500 

Hydralift Marine AS TTS Group ASA 100 % NOK 100 000 1 000 

TTS Marine AB (former TTS Ships Equipment AB) TTS Group ASA 100 % SEK 2 000 000 2 000 

TTS Marine Shanghai Co Ltd TTS Group ASA 100 % USD 200 000 3 500 

TTS Marine AS TTS Group ASA 100 % NOK 1 000 000 1 000 

TTS Singapore TTS Group ASA 100 % SGD 1 141 813 1 141 813 

TTS Greece TTS Group ASA 100 % EUR 200 000 2 000 

TTS Marine GmbH (former TTS Ships Equipment GmbH) TTS Marine AB 100 % EUR 255 646 5 000 

TTS Marine Inc. TTS Marine AB 100 % USD 190 000 1 900 

TTS-LMG Marine Cranes GmbH TTS Marine GmbH 100 % EUR 25 000 1 

TTS Liftec Oy TTS Marine AB 100 % EUR 76 500 1 020 

TTS Port Equipment AB TTS Marine AB 100 % SEK 100 000 1 000 

TTS Kocks Ostrava s.r.o. TTS Marine GmbH 100 % EUR 310 291 1 000 

TTS Marine Equipment TTS Marine GmbH 100 % RMB 15 728 611 1 000 

TTS Marine S.r.l TTS Marine AB 100 % EUR 10 400 1 000 

TTS Energy Bergen AS (former TTS Marine Cranes AS) 1 TTS Group ASA 100 % NOK 1 000 000 1 000 

TTS Cranes Norway 

TTS Energy Ålesund AS 

TTS Group ASA 100 % NOK 500 000 1 000 

(former TTS Offshore Handling Equipment AS) 1 TTS Group ASA 100 % NOK 100 000 100 000 

TTS Energy AS (former TTS Sense AS) 1 TTS Group ASA 100 % NOK 1 200 288 400 076 

TTS Kocks Korea TTS Marine GmbH 100 % KRW 1 513 390 000 1 000 

TTS Hua Hai AB TTS Marine AB 100 % SEK 100 000 1 000 

TTS Sense (Canada) Ltd TTS Energy AS 100 % CAD 100 10 

TTS Sense MUD AS1 TTS Energy AS 100 % NOK 1 000 000 1 000 

TTS Sense Pte Ltd Singapore TTS Energy AS 100 % SGD 100 000 100 000 

TTS Sense Drillfab TTS Energy AS 50 % NOK 1 000 000 100 000 

TTS EDM Inc TTS Energy AS 100 % USD 100 000 1 000 

TTS Mexico TTS Energy AS 100 % MxN 50 000 50 000 

Drillrig AS TTS Energy AS 100 % NOK 100 000 100 000 

1) TTS Energy Ålesund (formerly TTS Offshore Handling Equipment AS), TTS Energy Bergen (formerly TTS Marine Cranes), 

TTS Energy AS (formerly TTS Sense AS) and TTS Sense MUD AS were merged in January 2011. 

86

note 16 cont. 

PRINCIPAL SHAREHOLDERS OF TTS GROUP ASA AS OF 31.12.10 

Shareholder Number of shares Ownership Voting share 

Rasmussengruppen AS 10 650 800 14.27 % 14.27 % 

Skeie Technology AS 8 929 879 11.97 % 11.97 % 

Skandinaviska Enskilda Banken 5 732 552 7.68 % 7.68 % 

Lesk AS 5 306 058 7.11 % 7.11 % 

Stisk AS 5 306 058 7.11 % 7.11 % 

Odin Maritim 2 164 000 2.90 % 2.90 % 

Tamafe Holding AS 2 160 735 2.90 % 2.90 % 

Barrus Capital AS (Ii) 2 000 000 2.68 % 2.68 % 

Holberg Norge 1 918 589 2.57 % 2.57 % 

Statoil Pensjon 1 543 937 2.07 % 2.07 % 

Itlution AS 1 475 261 1.98 % 1.98 % 

Shb Stockholm Clients Account 1 416 768 1.90 % 1.90 % 

Holberg Norden 1 201 329 1.61 % 1.61 % 

Skagen Vekst 1 176 000 1.58 % 1.58 % 

Sal Oppenheim Jr & Cie 1 100 000 1.47 % 1.47 % 

Rbc Dexia Investor Services Bank 962 000 1.29 % 1.29 % 

Skeie Consultants AS 953 033 1.28 % 1.28 % 

Odin Europa SMB 848 619 1.14 % 1.14 % 

Sundt AS 656 000 0.88 % 0.88 % 

Statoil Forsikring A.S 416 987 0.56 % 0.56 % 

Total, 20 largest shareholders 55 918 605 74.93 % 74.93 % 

Total other 18 712 594 25.07 % 25.07 % 

Total 74 631 199 100.00 % 100.00 % 

SHARES OWNED By BOARD MEMBERS, GROUP ExECUTIVES AND THEIR RELATIVES: 

Board Per 31.12.10 Per 31.03.11 

Trym Skeie 1 2 160 735 2 160 735 

Bjarne Skeie 2 20 495 028 20 495 028 

Karen T. Mørkestøl 3 217 3 217 

Jarle Dyrdal 30 227 30 227 

Group executives 

Johannes D. Neteland 185 000 185 000 

Related daugther Anna S. Neteland 100 100 

Ivar K. Hanson 52 422 52 422 

Lennart Svensson 200 200 

Inge Gabrielsen 450 450 

1) Owns 100 % of the shares in Tamafe Holding. 

2) Bjarne Skeie owns 20 % of the shares and 100 % of the voting shares in Skeie Technology AS and Skeie Consultants AS. 

Lesk AS is owned by related daugther Lena Skeie. Stisk AS is owned by related daugther Stina Skeie. 

On 03.06. 2010 it was decided at the ordinary general meeting to give the Board authority to issue up to 

7 000 000 shares in the event of acquisitions or mergers. The authority is valid until the ordinary general 

meeting for 2010, at 30.06. 2011 at the latest. In relation to this authority 6 722 920 shares were issued 

through private placing in July of 2010. 

As of 31.12. 2010, 240 000 options were allotted that can be exercised until 15.06.11 at a price of 7,55 NOK. 

(from an authorisation for a total of 420 000 options granted at the ordindary general meeting of 15.06.09). 

In addition there has been issued 360 000 options, of which can be exercised until 03.06. 2012 with a strike 

price of 5,91 NOK. (from an authorisation for a total of 420 000 options granted at the ordindary general 

meeting of 03.06.10). 


87


note 16 cont. 

ALLOCATION OF OPTIONS: 

Number Number 

of options of options 

exercisable Strike exercisable Strike 

Name Position Company until 15.06.11 price until 03.06.12 price Total 

Johannes D. Neteland CEO TTS Group ASA 120 000 7.55 120 000 5.91 240 000 

Arild Apelthun CFO TTS Group ASA 0 60 000 5.91 60 000 

Lennart Svensson COO TTS Port Equipment AB 60 000 7.55 60 000 5.91 120 000 

Ivar K. Hanson COO TTS Marine AS 60 000 7.55 60 000 5.91 120 000 

Inge Gabrielsen COO TTS Energy AS 0 60 000 5.91 60 000 

Total number of options to senior executives 240 000 360 000 600 000 

No share options has been exercised in 2010. 

In accordance with authorities granted by the annual general meeting in 2008, 2009 and 2010, TTS has issued share option programmes to senior 

executives. Through these programmes, Senior Executivent in the TTS Group have a future right to purchase a number of shares at an exercise price 

equal to the marked rate on the date that the share option 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 %), then (12.5 %) 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 assumptions. 

For options issued in 2008, 42 % volatility is used, 74 % volatility for 2009, and 81 % volatility for 2010. 

For 2008 a risk-free interest rate of 5.0 % is used, 2.95 % for 2009 and 2.23% for 2010. For 2010, 2 395 TNOK in option premium has been charged 

as expenses classified as salary in the profit and loss statement. 

Comparable numbers in 2009 were 5 437 TNOK. Payroll taxes are charged when share options are realised. 

OWN SHARES 

A resolution was adopted at the Annual General Meeting not to grant 15.06.09 the Board authorisation to purchase the company’s own shares. 

This resolution was upheld in 2010. In the period from 15.06. 2009 to 31.12. 2010 TTS has owned a maximum of 133 100 shares. Treasury shares as 

of 31.12.10 was 35 210. 

SUBORDINATED CONVERTIBLE LOAN 

10 January 2011 the extraordinary general meeting approved the issuance of a convertible bond loan of 200 MNOK. The loan has been given an 8 % 

coupon rate and reaches maturity 18.01.2016. On specific terms the Group has a call option that expires on 08.02.2014. Bondholders have continuous 

conversion rights with an exercise price of 9.2839 NOK. The maximum number of shares to be issued at full conversion is 21 542 671, equivalent to 

a dilution effect of 28.87 %. 

note 17 Other short-term liabilities 



Provisions for project (see Note 21) 139 774 140 451 

Other liability provisions (see Note 21) 101 161 87 058 

Foreign currency contracts 48 777 55 675 

Other current liabilities 37 630 139 440 

Total Other short-term liabilities 327 342 422 624 

The best estimate for maturity date for completed projects are within 12 months from balance-sheet date. 

note 18 Other operating cost 



Premises and office expenses 51 743 58 325 

Computer expences 15 876 18 866 

Marketing and travel expences 59 575 80 543 

Other expences 106 415 120 183 

Total other operating expenses 233 609 277 917 

88

note 19 Related parties 


The subsidiaries (Note 9), Investments in joint ventures (Note 10), members of the Board (Note 4) 

and members of the Senior Executive Group are considered as related parties. 

The group has carried out various transactions with underlying companies and joint ventures. 

All the transactions have been carried out as part of the ordinary operations and at arm’s length prices. 

Sales: 2010 2009 

Joint ventures 227 453 50 658 

Cost of sales: 


BALANCE SHEET ITEMS RELATED TO PURCHASE AND SALE OF GOODS AND SERVICES 

Receivables 


Liabilities 


Information on the Board and Group management’s shares and options are stated in Note 16. 

There are no further transactions with related parties. 

note 20 Derivatives 



Assets Liabilities Assets Liabilities 

Forward currency contracts – fair value hedging 47 505 68 867 52 795 88 911 

Forward currency contracts to fair value of the result 1 272 799 415 2 965 

Forward currency contracts Total 48 777 69 666 53 210 91 876 

Fair value of hedging instruments are classified as current assets or short-term liabilities. Fair value of derivatives are classified 

as current assets or short-term liabilites, as the hedging items and derivatives mainly falls due within 12 months. 

Matured 

Q1 2011 -9 839 

Q2 2011 1 447 

Q3 2011 -5 691 

Q4 2011 -2 194 

2012 -4 507 

2013 -106 

Total -20 890 

FORWARD CURRENCy CONTRACTS 

The nominal value of the outstanding forward currency contracts at 31.12.2010 is 2.355 MNOK compared to 2.271 MNOK in 2009. 

Derivatives are on principal recognised at fair value on the date of contract signing. The value is adjusted to fair value in later periods. 

The value is set to observable market price. 

TTS enters into hedging contracts that qualify as, and are considered accounting wise to be, actual value hedges. In addition to this, 

the Group has hedging contracts that no longer meet the criteria for hedging accounting as the underlying delivery contract has been 

cancelled. These are recognised at fair value in the financial statement. 

Changes to fair value that meets the criteria of an effective hedge is recognised in the financial statement with the change in fair value 

of the assets or liabilities that are being hedged. 

The ineffective portion of the recognised hedge value amounts to 473 TNOK and is posted together with the changes in value of derivatives. 

The asset or liability being hedged is contractual income or cost related to production cost. Hedged assets or liabilities are recognised 

in the balance sheet at actual value. The hedged asset or liability represents, among other things, the part of the contractual income 

or cost that has not been invoiced on the balance sheet date, or where invoices have not been received from the supplier. The asset and 

liability is included in Other Short-term Assets and Other Short-term Liabilities respectively. Additionally the hedged assets or liability 

for each contract is represented through bank, client or supplier. 

For additional information on foreign currency and appurtenant risks, see Accounting principles, section 2.9 og 3.1. 


89


note 21 Provisions for liabilities 


Completed 

projects* Guarantees Other Total 

1 January 2010 140 451 40 026 47 032 227 509 

Provisions for the year 16 958 39 663 17 899 74 520 

Utilised during the year -17 635 -16 540 -26 919 -61 094 

31 December 2010 139 774 63 149 38 012 240 935 

90 

Completed 

projects* Guarantees Other Total 

1 January 2009 144 419 33 375 35 736 213 530 

Provisions 49 237 13 494 21 752 84 483 

Utilised during the year -53 205 -6 843 -10 456 -70 504 

31 December 2009 140 451 40 026 47 032 227 509 

Classification in the balance 2010 2009 

Presented as other current liabilities 240 935 227 509 

*) Liabilities related to supplementary work and other demands from clients. 

Risk related to the estimates that form the basis for the book values are further described in Accounting principles, 

under sections 2.17 and 4. 

note 22 Financial items and foreign currency gains/losses 



Other interest income 17 994 24 459 

Interest on debt to financial institutions -146 426 -97 337 

Net other financial expenses 20 596 -8 264 

Total -107 836 -81 143 

Net other financial expenses primarily consists of foreign currency gains and losses as well as transaction costs from banks.

note 23 Earnings per share 


Earnings per share is calculated by dividing the profit attributable to shareholders by the weigthed 

average of the number of ordinary issued shares through the year excluding treasury shares. 


Profit attributable to shareholders -196 656 -248 482 

Weigthed average of issued shares excluding own shares 71 235 43 408 

Earnings per share (NOK per share) (2.76) (5.72) 

DILUTED EARNINGS PER SHARE 

When calculating the diluted result per share, the weigthed average of the number of ordinary issued shares 

in circulation is regulated for the convertion effect of all potential shares that can cause dilution. 

The company has share options where a calculation is made to determine the number of shares which could have 

been acquired at market rate (calculated to an average share price of the company’s shares through the year) 

based on the money value of the subscription rights of the outstanding share options. The number of shares 

calculated is compared to the number of shares that would have been issued if all share options were exercised. 

The difference is attributed to the denominator in the fraction that issued the shares without compensation. 


Profit used to calculate diluted earnings per share -196 656 -248 482 

Average of ordinary issued shares excluding own shares 71 235 43 408 

Adjustment for share options 660 720 

Average number of ordinary shares for calculation of diluted earning per share 71 895 44 128 

Diluted earnings per share (NOK per share) (2.74) (5.63) 

Share structure 2010 2009 

Issued shares 74 631 199 67 908 279 

Own shares 35 210 35 210 

Unused share options that can be settled by issue 600 000 720 000 

SUBORDINATED CONVERTIBLE BOND ISSUE 

At the 10 January 2011 the extraordinary general meeting approved the drawdown of a subordinated convertible 

bond loan of 200 MNOK. The bondholders have a continuous conversion right at a call price of 9,2839 NOK. 

The maximum amount of shares that can be issued at full conversion is 21 542 671. Loan and conversion rights 

are established after end of year and are therefore not included in the calculation of earnings per share in 2010. 

note 24 Subsequent events 

No dividend for shareholders have been proposed for 2010. 

10 January 2011 the extraordinary general meeting approved the issuance of a convertible bond loan of 200 MNOK. 

The loan has been given an 8 % coupon rate and reaches maturity 18.01.2016. On specific terms the Group has 

a call option that expires on 08.02.2014. Bondholders have continuous conversion rights with an exercise price of 

NOK 9.2839. The maximum number of shares to be issued at full conversion is 21 542 671, equivalent to a dilution 

effect of 28.87 %. 

In February 2011 the companies of the Norwegian Energy division was merged to simplify the internal structure 

and streamline internal processes. The companies included in the merger are TTS Energy AS (acquiring company), 

TTS Energy Bergen AS, TTS Energy Ålesund AS and TTS Sense MUD AS. After the merger all of the companies are 

included in TTS Energy AS. Accounting date for the merger was 01.01.2010. 

We also refer to announcements published on the Oslo Stock Exchange of new material contracts entered into 

in 2011. Material contracts disclosed to Oslo Stock Exchange that are concluded after year-end amounts to 

approximately 91 MNOK for Marine, approx. 55 MNOK for Port and Logistics and approx. 505 MNOK for Energy. 

There has been no significant cancellations in the period after year end. 


91


note 25 Foreign currency differences 


Foreign currency differences consists of all currency differences that arises from translation of the financial 

statements of the foreign entities that are not an integrated part of the operation of the company. 

Per 01.01.2009 32 183 

Exchange differences 2009 

Group company -25 488 

Joint ventures -15 849 

Per 31.12.2009 -41 337 

Exchange differences 2010 

Group company 26 166 

Joint ventures -4 168 

Per 31.12.2010 21 998 

note 26 contingencies 

Provisions for contingent liabilities have been made (Ref. Note 21). No significant provisions 

are expected beyond what has already been earmarked. 

note 27 Government grants 

TTS has not received government grants from public institutions for research and development 

activites through its subsidiaries in 2010. Government grants are recorded at fair value when 

there is reasonable certainty that the reiceiving company fulfils the conditions of the grant. 

92

note 28 Financial risk management 



Financial assets and liabilities are described in Accounting principles, sections 2.7, 2.9, 2.11, 2.12, 2.14 and 2.15. 

Risk associated with the underlying estimates of the recognised values and financial risk management are described in Accounting principles, section 3. 

CLASSIFICATION OF FINANCIAL ASSETS 


Derivatives Derivatives 

related Assets related Assets 

to hedging Loans and available to hedging Loans and available 

purposes receivables for sale Total purposes receivables for sale Total 

Financial assets 

Shares 0 0 222 222 0 0 1 945 1 945 

Other receivables 0 0 0 0 0 5 584 0 5 584 

Financial current assets 

Trade receivables 0 488 799 0 488 799 0 565 141 0 565 141 

Other current receivables 0 192 717 0 192 717 0 192 348 0 192 348 

Acquired, non-invoiced production 0 368 057 0 368 057 0 456 185 0 456 185 

Derivatives 48 777 0 0 48 777 53 210 0 0 53 210 

Prepayment to suppliers 0 130 690 0 130 690 0 217 741 0 217 741 

Cash and cash equivalents 0 272 331 0 272 331 0 191 907 0 191 907 

Total financial assets 48 777 1 452 594 222 1 501 593 53 210 1 628 905 1 945 1 684 060 

The Group has no financial assets classified under hold to maturity or available for sale on the date 31.12.09 or 31.12.10. 

CLASSIFICATION OF FINANCIAL LIABILITIES 


Derivatives Derivatives 

related to Other related to Other 

hedging financial hedging financial 

purposes liabilities Total purposes liabilities Total 

Long-term financial liabilities 

Interest-bearing long-term debt 0 509 079 509 079 0 430 615 430 615 

Current financial liabilites 

First year installment of long-term debt 0 30 554 30 554 0 66 343 66 343 

Interest-bearing current liabilities 0 561 811 561 811 0 599 927 533 584 

Prepayments from customers 0 447 214 447 214 0 639 938 639 938 

Cost related to facilities under construction 0 336 732 336 732 0 149 791 149 791 

Derivatives 1) 69 666 0 69 666 91 876 0 91 876 

Accounts payable and other long-term debt 0 668 649 668 649 0 695 826 762 091 

Total financial liabilities 69 666 2 554 039 2 623 705 91 876 2 582 362 2 674 238 

Fair value of financial liabilities: 

1) The Group’s derivatives consists of forward currency contracts. Fair value of forward currency contracts is determined by utilising market-to-market 

rate on the balance-sheet date as stated by the Group’s bank. Fair Value related to long-term debt is considered approximately equal to carrying 

value, as loans are given at market terms and with a floating rate. 

93

Profit and loss account 



(AMOUNTS IN NOK 1000) NGAAP NGAAP 


OPERATING INCOME 

Intra-Group operating income 0 3 515 

Other operating income 0 25 

Group service fee from TTS subsidiaries 24 349 32 580 

Total operating income 24 349 36 120 

OPERATING COSTS 

Cost of stock -168 203 

Personnel costs etc. 1, 2 15 911 19 853 

Depreciation on tangible fixed assets 3, 4 134 669 

Other operating costs 1, 13 18 132 21 793 

Total operating costs 34 009 42 518 

Operating profit -9 660 -6 398 

FINANCIAL INCOME AND ExPENSES 






Income from investments in subsidiaries 5, 15 -232 083 -242 917 

Income from investments in joint ventures 5, 15 891 935 

Interest received from group companies 15 63 852 4 958 

Other interest income 15 912 19 776 

Other financial income 15 0 577 

Interest expenses to group companies 15 -16 552 0 

Other interest expenses 15 -61 794 -40 871 

Other financial expenses 15 -6 674 -10 279 

Net financial items -251 448 -267 821 

Profit before tax -261 108 -274 219 

Tax 9 -8 356 -8 977 

Profit for the year -252 752 -265 242 

Transferred from other equity 252 752 265 242 

95

96 

balance sheet 


ASSETS 

(AMOUNT IN NOK 1000) NGAAP NGAAP 


Fixed assets 

Deferred tax assets 9 48 676 65 722 

Total intangible fixed assets 48 676 65 722 

TANGIBLE FIxED ASSETS 

Machinery and vehicles 3 100 443 

Furniture, office and computer equipment 3 4 116 1 466 

Total tangible fixed assets 4 216 1 909 

FINANCIAL FIxED ASSETS 

Shares in subsidiaries 5, 8 1 035 424 852 748 

Investments in joint ventures 5 14 059 12 925 

Loans to companies in same group 6, 8 221 056 180 602 

Investments in shares and other financial instruments 4 222 1 945 


Pensions 2 1 218 1 107 

Total financial fixed assets 1 271 979 1 050 471 

Total assets 1 324 871 1 118 102 

current assets 

ACCOUNTS RECEIVABLE 

Trade debtors 6 0 0 

Intra-group accounts receivable 6, 8 40 370 51 805 


Other intra-group receivables 6, 8 108 574 848 

Total receivables 151 524 59 633 

Bank deposits, cash in hand etc. 10 5 239 508 094 

Total current assets 156 763 567 727 

Total assets 1 481 634 1 685 829

EqUiTY cAPiTAL AnD LiAbiLiTiES 

(AMOUNT IN NOK 1000) NGAAP NGAAP 


Equity capital 

PAID UP EQUITy CAPITAL 

Share capital 11, 16 37 316 33 954 

Treasury shares 11 -18 -18 

Premium account 376 057 337 911 

Total paid up equity capital 413 355 371 847 

RETAINED EARNINGS 

Valuation variable fund 0 0 

Other equity capital 208 221 425 565 

Total retained earnings 208 221 425 565 

Total equity capital 14, 16 621 576 797 412 

Liabilities 

OTHER LONG-TERM LIABILITIES 

Bond loan 7, 8 400 000 450 000 

Liabilities to financial institutions 7, 8 12 000 25 155 

Total other long-term liabilities 412 000 475 155 

CURRENT LIABILITIES 

Liabilities to financial institutions 7, 8 356 590 400 000 

Overdraft 8, 10 81 330 0 

Trade payables 4 490 802 

Intra-group trade payables 2 130 4 001 

Taxes due 1 494 1 933 

Provision for dividends 0 0 

Other intra-group liabilities 8 11 

Other current liabilities 12 2 014 6 515 

Total current liabilities 448 058 413 262 

Total liabilities 860 058 888 417 

Total equity capital and liabilities 1 481 634 1 685 829 


Board of Directors of TTS Group ASA 

Trym Skeie Kjerstin Fyllingen Anne Breive Bjarne Skeie 

CHAIRMAN OF THE BOARD BOARD MEMBER BOARD MEMBER BOARD MEMBER 

Karen T. Mørkestøl Jarle Dyrdal Johannes D. Neteland 

BOARD MEMBER BOARD MEMBER CHIEF ExECUTIVE OFFICER 






97

Equity statement 


Share 

Share Treasury premium Other 

(AMOUNTS IN NOK 1000) capital shares account equity Total 

Equity as of 31.12.09 33 954 -18 337 912 425 564 797 412 

Issue 3 361 0 38 993 0 42 354 

Issue costs 0 0 -847 0 -847 

Option schemes 0 0 0 2 395 2 395 

Currency difference concerning equity method 0 0 0 32 898 32 898 


Equity as of 31.12.2010 37 316 -18 376 057 208 221 621 576 

98

cashflow statement 








(AMOUNTS IN NOK 1000) 2010 2009 

Net profit before tax -261 108 -274 219 

Income from investments in subsidiaries 232 083 242 917 

Depreciation 134 669 

Writedowns on shares and receivables 2 864 0 

Pro rata income from joint ventures -891 -935 

Foreign currency gains/losses on intra-group loans 4 764 5 309 

Difference between pension charges and payments to/from pension scheme -59 796 

Trade and other receivables -64 194 -25 668 

Trade payables and other short-term liabilities -3 323 -8 770 

Net cashflow from operations -89 729 -59 901 

cashflow from investments 

Acquisition of subsidiaries (less cash balances at subsidiaries) 0 -11 503 

Disbursements injecting equity into subsidiaries -381 936 0 

Income from sales of tangible fixed assets 0 54 

Disbursements on acquisitions of tangible fixed assets -2 442 -1 505 

Income from long-term intra-group loans 108 478 0 

Disbursements on long-term intra-group loan receivables -153 500 -30 820 

Net cashflow from investments -429 400 -43 774 

cashflow from financing 

Income from taking up new short-term/long-term liabilities 81 330 300 000 

Disbursements on repayment of short-term/long-term liabilities -106 565 -47 477 

Paid up equity capital 41 509 231 208 

Net cashflow from financing 16 274 483 731 

Effects of exchange-rate fluctuations on cash and cash equivalents 

Net change in cash and cash equivalents -502 855 380 055 

Cash and cash equivalents (opening balance) 508 094 128 039 

Cash and cash equivalents (closing balance) 5 239 508 094 

This consists of: 

Bank deposits etc. 5 239 508 094 

99

100

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. The income is booked when the services are 

delivered. 

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/long-term 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 realizable 

value if the diminution in value is not expected to be temporary. 

Long-term liabilities are posted in the balance sheet at the nominal 

value at the time of 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. 

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 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. 

cash flow statement 

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. 

cash and cash equivalents 

Cash and cash equivalents consist of cash and bank deposits. Bank 

deposits in foreign currencies are assessed to the exchange rate of the 

balance sheet date. Withdrawals from the bank overdraft constitute 

part of current liabilities. 

101

notes 


note 1 Personnel costs, number of employees, remunerations, loans to employees etc. 


Payroll expenses 2010 2009 

Salaries, options etc. 10 972 15 355 

Employer’s contributions 2 178 2 511 

Pension costs 2 445 1 675 

Other benefits 404 312 

Total personnel costs 15 911 19 853 

Number of employees per 31.12. 8 8 

Remuneration to Board members* 2010 2009 

Trym Skeie (Chairman from 11.09) 160 46 

Birger Skeie - estate 69 183 

Nils O. Ardal (to 06.10) 262 262 

Bjarne Skeie 175 175 

Rune Selmar (07.10 - 12.10) 0 0 

Anne Breive 205 205 

Kjerstin Fyllingen 205 205 

Karen Torine Mørkestøl (from 10.10) 0 0 

Jarle Dyrdal (from 10.10) 0 0 

Olav Smeland (to 10.10) 88 88 

Anne Karin Bedringås (to 10.10) 88 88 

Total 1 252 1 251 

*) The Annual General Meeting determines the remuneration to the Board from one general meeting to the next. 

For the financial year 2010, the same remuneration was used as resolved at the Annual General Meeting in 2010. 

The remuneration proposed from the Annual General Meeting in 2010 until the general meeting in 2011 is shown 

in the notice of general meeting 03.06.10. The same applies to the nomination committee. 

REMUNERATION TO NOMINATION COMMITTEE 

The members of TTS’s nomination committee are as follows: Bjørn Olafsson (chairman), Bjørn Sjaastad and Johan Aasen. 

Remuneration paid in 2010 was 40 TNOK to the chairman and 25 TNOK to the members, total 90 TNOK. 

PRINCIPLES ON SETTING SALARIES AND OTHER BENEFITS FOR THE MANAGING STAFF OF THE COMPANy 

TTS Group ASA’s remuneration policy is based on offering group executive competitive terms. Remuneration levels reflect 

the fact that the company is listed and focused internationally. 

Annual remuneration assumes the group executive shares in the company’s results and creates shareholder value through 

increasing the value of the company. 

Remuneration consists of three main components: base salary, bonuses and option scheme. 

Bonuses are based on target results. In certain circumstances where change and development are decisive, bonuses are 

also based on specific growth targets. Bonus targets are reviewed annually. The maximum bonus is one year’s base salary 

for the President and CEO and up to 50 % for other executive staff. 

102

note 1 cont. 

TTS has had an option scheme for the group executive since 1998, aimed at giving the group executive the same incentive as shareholders 

to increase the value of the company over time. The general meeting has authorised the Board to issue two-year option schemes each year, 

which can be exercised for the first time as to 50 % after one year, followed by a further 12.5 % per quarter in addition to any options not 

exercised previously. Options must be exercised within two years. 

The group pension scheme in Norway is based on approx. 65 % of base salary at age 67, subject to a maximum of 12 G. 

Six months’ notice of termination is required, with severance pay of from six to 24 months, period of notice included. 

Option schemes have to be approved by the general meeting, subject to the Board being granted authority to decide allocations. 

The President and CEO’s remuneration is determined by the Board of TTS Group ASA. For other executive staff, remuneration is determined 

by the Boards of the subsidiaries concerned or President and CEO. 

REMUNERATION TO PRESIDENT & CEO AND GROUP ExECUTIVES 

Other Bonus Option Total Pension 

Name Position Base pay benefits paid profits income costs 

Johannes D. Neteland President & CEO 1 762 163 0 0 1 925 953 

Arild Apelthun CFO (from 04.10) 909 12 0 0 921 61 

Mette Henriksen Acting CFO (until 03.10) 281 4 0 0 285 10 

Ivar K. Hanson Head of division, Marine 1 288 15 75 0 1 378 88 

Lennart Svensson Head of division, Port and Logistics 1 175 28 0 0 1 175 335 

Inge Gabrielsen Head of division, Energy 1 323 43 0 0 1 366 46 

Base pay Taxable base pay 

Other benefits Car scheme, group life insurance, taxable pension schemes, telephone, newspapers etc. 

Bonus paid Bonus paid for year concerned 

Option profits Difference between market price and redemption price when exercising options 

Total income Total taxable income 

The taxable pension schemes are an early retirement pension and top-hat pension which were formerly based on a pension for life solution. 

The amendments to the tax rules per 01.01.07 mean these must be accounted for as taxable benefits. The premature retirement scheme 

applies once the President & CEO reaches 60. 

Six months’ notice of termination is required with severance pay of 24 months, notice period included, and from six to 24 months 

for other group executives 

AUDITORS’ FEES (ExCL. VAT) 


Statutory audit 975 502 

Other certifications 61 14 

Other assistance including tax advice 335 593 

Total 1 371 1 109 






103

102-113 nOTES TO ThE AccOUnTS TTS GROUP ASA 

note 2 Pension 


The company is required to have a company pension scheme under the law on mandatory company pensions. The company has a pension scheme 

that meets the requirements under this law. The Norwegian companies in the group have defined benefit pension schemes that entitle employees 

to defined future pension benefits depending on length of service, salary level, retirement age and social security pensions received. 

The pension scheme included 19 persons per 31.12.10, including eight retired persons. 

Reported net pension liabilities are as follows: 



Market value of pension funds 19 110 0 19 110 13 940 0 13 940 

- Net present value of accrued pension liabilities -18 971 -54 -19 025 -17 091 -80 -17 171 

+ Unrecognised estimate changes and deviations 1 121 0 1 121 5 064 -303 4 761 

+ Unrecognised costs in respect of 

past period pension earnings 0 0 0 0 0 0 

- Periodised employer’s contributions 20 -8 12 -412 -11 -423 

= Employer’s contributions 1 280 -62 1 218 1 501 -394 1 107 

Net pension costs are determined as follows: 



Net present value of current year’s 

pension benefits accrued 1 749 1 1 750 1 220 10 1 229 

+ Interest payable on pension liabilities 740 3 743 626 3 629 

- Expected return on pension funds -650 0 -650 -647 0 -647 

+ Recognised estimate changes and deviations 587 -332 255 535 -52 482 

+ Changes to employer’s contributions 259 1 260 169 2 171 

+ Costs relating to past period pension earnings 0 0 0 0 0 0 

+ Loss on reduction of pension scheme 0 0 0 0 0 0 

= Total costs included in salary costs 2 685 -327 2 358 1 902 -38 1 865 

Changes to book value of funds: 2010 2009 

Book value as at 1 January 1 107 1 663 

Costs recognised during year (see above) -2 358 -1 865 

+/- Pension payments and payment of pension contributions 2 469 1 309 

= Book value per 31 December 1 218 1 107 

Financial assumptions used in calculating pension liabilities: 


31.12. 1.1 31.12. 1.1 

Return on pension funds 4.60 % 5.60 % 5.60 % 5.80 % 

Discount rate 3.20 % 4.40 % 4.40 % 3.80 % 

Annual wage inflation 4.00 % 4.25 % 4.25 % 4.80 % 

Annual adjustment of G [basic social security unit] 3.75 % 4.00 % 4.00 % 3.80 % 

Annual adjustment of pensions being paid 3.75 % 4.00 % 4.00 % 3.80 % 

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 contributions 14.10 % 14.10 % 14.10 % 14.10 % 

104

note 3 Tangible fixed assets 


Furniture 

Machinery and office 

and vehicles equipment Total 

PER 1 JANUARy 2009 

Acquisition cost as at 31 December 1 368 742 2 110 

Cumulative depreciation as at 31 December -681 -303 -984 

Book value per 31 December 687 439 1 126 

FINANCIAL yEAR 2009 

Book value as at 1 January 687 439 1 126 

Acquisitions during the year 0 1 505 1 505 

Disposals during the year -54 0 -54 

Depreciation for the year -189 -480 -669 

Book value per 31 December 445 1 464 1 909 

PER 31 DECEMBER 2009 

Acquisition cost as at 31 December 1 314 2 248 3 562 

Cumulative depreciation as at 31 December -870 -783 -1 653 


FINANCIAL yEAR 2010 

Book value as at 1 January 444 1 465 1 909 

Acquisitions during the year 0 2 442 2 442 

Disposals during the year -204 204 0 

Depreciation for the year -140 6 -134 


PER 31 DECEMBER 2010 

Acquisition cost as at 31 December 1 110 4 894 6 004 

Cumulative depreciation as at 31 December -1 010 -777 -1 787 


Depreciation plan Linear Linear 

Depreciation period 5 year 3-10 year 

note 4 Shares in other companies 


Holding Acquisition cost Book value 


Fixed assets 

Shin young Heavy Industry 13.4 % 222 222 222 

FastShip Inc.* 6.7 % 13 326 0 1 723 

Total shares in other companies 13 548 222 1 945 

*) In the balance sheet per 31.12. the company has recorded 615 156 shares in FastShip Inc (FSI) 

with a total book value of 1 NOK. 

There are currently no ongoing activity in the project and the company’s certificates have expired. 

The company is per 31.12.2010 still active for judicial clarifications of a sertificate dispute in the US. 

Since the project is terminated TTS has recorded the whole investment of 19,0 MNOK as a loss. 

Shares have been written off by 1,7 MNOK, and convertible loan with 1,1 MNOK in 2010. 


105


note 5 Subsidiaries and joint ventures 


Subsidiaries Registered office Acquired Ownership Votes 

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 Marine AB (former TTS Ships Equipment AB) Gothenburg, Sweden 2002 100 % 100 % 

TTS Marine Shanghai Co Ltd Shanghai, China 2002 100 % 100 % 

TTS Energy Bergen AS (former TTS Marine Cranes AS) Bergen, Norway 2006 100 % 100 % 

TTS Cranes Norway AS 

TTS Energy Ålesund AS 

Bergen, Norway 2007 100 % 100 % 

(former TTS Offshore Handling Equipment AS) Ålesund, Norway 2007 100 % 100 % 

TTS Energy AS (former TTS Sense AS) Kristiansand, Norway 2007 100 % 100 % 

TTS Marine AS Bergen, Norway 2009 100 % 100 % 

TTS Singapore Pte. Ltd. Singapore 2009 100 % 100 % 

TTS Greece Ltd. Pireus, Greece 2009 100 % 100 % 

Joint venture 

TTS BoHai Machinery Co., Ltd Dalian, China 2005 50 % 50 % 

Companies are accounted for using the equity method. 

TTS Norlift TTS TTS TTS Marine TTS Cranes TTS TTS Hydralift TTS TTS 

HS AS AS SE AS Marine AB Shanghai Norway AS Energy AS Marine AS Marine AS Singap. Greece Total 

Acquisition cost when acq. 9 589 500 14 232 303 180 1 386 500 684 253 1 020 115 5 064 1 812 1 014 775 

Of which goodwill 7 129 255 163 2 053 529 884 794 229 

Of which added value -453 19 950 19 497 

Unamortised added value/ 

goodwill 31 December 

Goodwill 0 3 737 193 240 1 693 364 433 563 103 

Amortisation of GW -150 -424 -13 524 -103 -24 541 -38 742 

Unamortised GW 31.12. -150 0 3 313 179 716 1 590 0 339 892 0 524 361 

Calculating profit for the year 

Share of profit for the year 7 040 74 6 004 71 190 2 960 2 823 -280 574 -2 905 0 -776 824 -193 341 

Amortisation on goodwill -150 -424 -13 524 -103 -24 542 0 -38 742 

Income from inv. in subsid. 6 890 74 5 580 57 666 2 857 2 823 -305 116 -2 905 0 -776 824 -232 082 

SHARES IN SUBSIDIARIES 

Opening balance 01.01. 31 184 441 35 095 422 381 13 902 3 821 340 926 1 020 115 2 879 1 101 852 865 

Associated comp/subs. acq. 0 0 0 0 0 0 0 0 0 0 

Liabilities conv. to shares 0 0 0 0 0 0 0 0 0 0 

Capital injected 0 0 0 81 936 0 0 300 000 0 0 381 936 

Income from investm. in sub. 6 890 74 5 580 57 666 2 857 2 823 -305 116 -2 905 0 -776 824 -232 082 

Group contribution/dividends 54 0 -1 0 0 53 

Foreign currency effects 0 0 0 31 709 702 311 -66 32 656 

Closing balance 31.12. 38 128 515 40 674 593 692 17 461 6 644 335 810 -1 885 115 2 414 1 859 1 035 424 

The former TTS Sense AS (acquirer), TTS Marine Cranes AS (acquire) and TTS Offshore Handling AS (acquire) merged for accounts purposes 

as of 1 January 2010. The merged company is named TTS Energy AS. 

SHARES IN JOINT VENTURES 

TTS Bohai 

Machinery Co. Ltd. 

Opening balance per 1 January 12 925 

Companies acquired or started 0 

Share of profits 891 

Dividends 0 

Forgiveness of debt 0 

Foreign currency effects 243 

Disposals of shares in associated companies 0 

Closing balance per 31 December 14 059 

106

note 6 Trade and other receivables 



Trade receivables 0 0 

Trade receivables within group 40 370 51 805 

Other receivables within group (group cont./overdraft) 108 574 848 

Short-term receivables 148 944 52 653 

RECEIVABLES MATURING LATER THAN ONE yEAR 

Other receivables 0 1 143 

Loans to group companies 221 056 180 602 

Total 221 056 181 745 

There are no credit risk concentrations within customer receivables. Steps have been taken to avoid delays in settling internal receivables. 

note 7 Long-term liabilities 


REPAyMENT PROFILE AND MATURITy 

Balance as at 

31 December 2010 2011 2012 2013 2014 2015 2016 and beyond 

Bond liabilities 400 000 0 400 000 0 0 0 0 

Other long-term liabilities 15 000 3 000 3 000 3 000 3 000 3 000 0 

Total long-term liabilities 415 000 

- First year repayment LTD -3 000 

Total long-term liabilities 412 000 

BREAKDOWN OF LOANS 


Instalment Book value Book value 

Long-term loans Type of loan Currency Nominal rate Matures terms 2010 2009 

Nordea ASA Mortgage loan NOK NIBOR +2.75 % 2011 Four per year 0 10 730 

Norsk Tillitsmann ASA Bond loan NOK NIBOR +3.375 %* 2012 None 400 000 450 000 

Innovasjon Norge Mortgage loan NOK 5.75 % 2015 Two per year 12 000 14 425 

412 000 475 155 

*) Plus approx. 0.3 % deferred costs. Bond loan matures at 27.05.2012. 

Book value Book value 

Short-term loans Type of loan Currency Nominal rate Matures Instalment terms 2010 2009 

Nordea ASA Mortgage loan NOK NIBOR +2.75 % 2011 Four per year 3 590 0 

Nordea ASA Mortgage loan NOK NIBOR +2.75 % 2011 Renegotiated annually 350 000 400 000 

Innovasjon Norge Mortgage loan NOK 5.75 % 2015 Short-term component LTD 3 000 0 

356 590 400 000 

See Note 8 for security for long-term debt. 


107


note 8 Assets pledged as security and guarantees 


The credit agreement for TTS Group ASA in Norway was established (50/50) with Nordea Norge ASA (Nordea) and Sparebanken Vest, 

with Nordea as agent. 

TTS Group ASA has agreements as follows: 


Limit Drawing Limit Drawing 

Group account 327 000 81 332 330 000 -152 

Drawing facility, operations 350 000 350 000 475 000 475 000 

Guarantee limit for Group 425 000 401 431 425 000 427 598 

Per 31 December 2010, the companies in Norway, and TTS Sense Canada, TTS Marine AB, TTS Port Equipment AB and TTS Marine GmbH 

are all involved in the group cash pool facility. The same applies to the guarantee limit for the group. Guarantee limits cover payment, 

contract, prepayment and tax guarantees. 

TTS Group ASA also has long-term loans (see Note 7). 

For the agreements above, the assets below (from TTS Group ASA, TTS Energy AS, TTS Handling Systems AS, TTS Ships Equipment AS 

and Norlift AS, which are also jointly and severally liable) have been pledged as collateral to Nordea: 


Secured debt 449 920 410 730 

Assets at book value 

Customer/intra-group receivables 370 000 227 280 

Shares in TTS Marine AB 593 692 422 381 

Total assets pledged as security 963 692 649 661 

Leases in Norway with plant and equipment are also pledged. 

The mortgage bond has a nominal value of 200 MNOK. 

COVENANTS 

The Group’s has undertaken to meet the following financial strength requirements for Nordea: 

There is a requirement that the group equity shall be greater than 800 MNOK at all time. In addition, the equity ratio must be greater 

than 25 %. Nordea has accepted that the subordinated convertible bond loan of 200 MNOK are to be considered as equity as per 31.12.2010. 

With an equity of 802 MNOK together with the subordinated convertible bond loan of 200 MNOK, the equity rate as per 31.12.2010 is 29,0 %, 

thus TTS Group meet the financial covenant requirement as per 31.12. 2010. Part of the syndicate facility (150 MNOK) must be repaid latest 

within 31.12. 2011, or sooner if proceeds from sales of assets or material inventory sale are material. Please find maturity description for 

the Group’s financial liabilities in section 3.1 under Accounting principles. 

The Group’s has undertaken to meet the following financial strength requirements for Norsk Tillitsmann ASA 

There is a requirement that the equity shall be greater than 550 MNOK at any time. Norsk Tillitsmann ASA has accepted that the subordinated 

convertible bond loan of 200 MNOK are to be considered as equity as per 31.12. 2010. With an equity of 802 MNOK together with the 

subordinated convertible bond loan of 200 MNOK, the equity rate as per 31.12. 2010 is 29.0 %, thus TTS Group meet the financial covenant 

requirement as per 31.12. 2010. 

Regarding the bond loan there is in addition to the covenant requirement of equity ratio at 22.5 % and nominal equity of 550 MNOK, 

a multiple of other standard default clauses related to the bond loan inclusive cross default clauses. 

108

note 9 Tax 



Changes to deferred tax assets and deferred tax 

DEFERRED TAx 

1.1.2009 Change 2009 31.12.2009 Change 2010 31.12.2010 

Fixed assets 96 -311 -215 774 639 

Receivables 0 0 0 0 0 

Construction contracts 0 0 0 0 0 

Pension funds 466 -156 310 31 341 

Other temporary differences 0 0 0 0 0 

Total deferred tax 562 -467 96 805 980 

DEFERRED TAx ASSETS 

Fixed assets 0 0 0 0 0 

Receivables 0 0 0 0 0 

Inventories 0 0 0 0 0 

Pension funds 0 0 0 0 0 

Other provisions for liabilities 0 0 0 0 0 

Total deferred tax assets 0 0 0 0 0 

Net deferred tax assets 467 -467 96 805 980 

Credit deduction carried forward -6 182 0 -6 182 0 -6 182 

Allowance carried forward -1 260 0 -1 260 0 -1 260 

Loss carried forward -54 583 -8 852 -63 435 16 244 -47 191 

Net deferred tax assets -61 558 -9 319 -70 781 17 047 -53 653 

Unrecognised deferred tax assets related 

to other temporary differences 3 457 341 3 798 0 3 798 

Unrecognised deferred tax assets related to allowance 1 260 0 1 260 0 1 260 

Net deferred tax assets reported -56 841 -8 977 -65 722 17 047 -48 676 

Deferred tax assets related to losses which can be carried forward for tax purposes are reported if the management believes it is likely 

that the company can use these against future taxable income. 

Breakdown of differences between profit before tax as per the accounts and tax basis for year 2010 2009 

Result before tax -261 108 -274 219 

Permanent differences 186 176 

Change to assessment in relation to previous years’ accounts 0 0 

Change to temporary profit/loss differences 805 447 

Reversed share of profits/losses in subsidiaries and joint ventures 231 192 241 982 

Group contribution with tax 90 795 0 

Application of loss to be carried forward -61 870 0 

Tax basis for year 0 -31 613 

Breakdown of tax costs: 

Tax payable 0 0 

Withholding tax from activities outside Norway 20 0 

Effect of group contribution on deferred tax -25 423 0 

Effect of tax on issue costs netted directly with deferred tax assets 0 0 

Changes to deferred tax 17 047 -8 977 

Tax cost -8 356 -8 977 

Tax payable on balance sheet: 

Tax payable 0 0 

Tax effects of group contribution 0 0 

Tax payable on balance sheet 0 0 

Explanation as to why this year’s tax costs are not 28% of profit before tax: 

28 % of profit before tax -73 110 -76 782 

Permanent differences 20 49 

Results from subsidiaries and joint ventures 64 734 67 755 

Tax on issue costs not recognised 0 0 

Estimated tax costs -8 356 -8 977 

109


note 10 Liquid funds 



Bank deposits, cash etc. as at 31 December. 5 239 508 094 

Deposits (+)/withdrawals (-) from cash pool account system as at 31 December -81 330 1529 

1) Restricted bank deposits per 31 December were 5.239 TNOK. Of these 239 TNOK were deposits on tax withdrawal accounts, 

and 5 000 TNOK werer deposits as morgage for a loan from Innovasjon Norge. 

TTS Group ASA operates a cash pool account system. The group has been granted a credit facility of 327 MNOK. 

TTS Group ASA also has a drawing facility of 350 MNOK. 

note 11 Share capital and shareholder information 

Number of shares Nominal Book value of 

as at 31 December value share capital 

74 631 199 0.50 37 315 600 

THE COMPANIES IN THE TTS GROUP ARE AS FOLLOWS: 


Company Owner Holding Share capital No. of shares 

Norlift AS TTS Group ASA 100 % NOK 500 000 500 

TTS Handling Systems AS TTS Group ASA 100 % NOK 950 000 95 000 

TTS Ships Equipment AS TTS Group ASA 100 % NOK 2 500 000 2 500 

Hydralift Marine AS TTS Group ASA 100 % NOK 100 000 1 000 

TTS Marine AB (former TTS Ships Equipment AB) TTS Group ASA 100 % SEK 2 000 000 2 000 

TTS Marine Shanghai Co. Ltd. TTS Group ASA 100 % USD 200 000 3 500 

TTS Marine AS TTS Group ASA 100 % NOK 1 000 000 1 000 

TTS Singapore TTS Group ASA 100 % SGD 1 141 813 1 141 813 

TTS Greece TTS Group ASA 100 % EUR 200 000 2 000 

TTS Marine GmbH (former TTS Ships Equipment GmbH) TTS Marine AB 100 % EUR 255 646 5 000 

TTS Marine Inc. TTS Marine AB 100 % USD 190 000 1 900 

TTS-LMG Marine Cranes GmbH TTS Marine GmbH 100 % EUR 25 000 1 

TTS Liftec Oy TTS Marine AB 100 % EUR 76 500 1 020 

TTS Port Equipment AB TTS Marine AB 100 % SEK 100 000 1 000 

TTS Kocks Ostrava s.r.o. TTS Marine GmbH 100 % EUR 310 291 1 000 

TTS Marine Equipment Co. Ltd. TTS Marine GmbH 100 % RMB 15 728 611 1 000 

TTS Marine S.r.l TTS Marine AB 100 % EUR 10 400 1 000 

TTS Energy Bergen AS (former TTS Marine Cranes AS) 1 TTS Group ASA 100 % NOK 1 000 000 1 000 

TTS Cranes Norway AS TTS Group ASA 100 % NOK 500 000 1 000 

TTS Energy Ålesund AS (former TTS Offshore Handling Equipment AS) 1 TTS Group ASA 100 % NOK 100 000 100 000 

TTS Energy AS (former TTS Sense AS) 1 TTS Group ASA 100 % NOK 1 200 288 400 076 

TTS Kocks Korea TTS Marine GmbH 100 % KRW 1 513 390 000 1 000 

TTS Hua Hai AB TTS Marine AB 100 % SEK 100 000 1 000 

TTS Sense (Canada) Ltd. TTS Energy AS 100 % CAD 100 10 

TTS Sense MUD AS1 TTS Energy AS 100 % NOK 1 000 000 1 000 

TTS Sense Pte Ltd Singapore TTS Energy AS 100 % SGD 100 000 100 000 

TTS EDM Inc. TTS Energy AS 100 % USD 100 000 1 000 

TTS Mexico TTS Energy AS 100 % MxN 50 000 50 000 

Drillrig AS TTS Energy AS 100 % NOK 100 000 100 000 

1) TTS Energy Ålesund (formerly TTS Offshore Handling Systems), TTS Energy Bergen (formerly TTS Marine Cranes), TTS Energy AS (formerly TTS Sense AS) 

and TTS Sense MUD AS were merged in January 2011. 

110

note 11 cont. 

THE LARGEST SHAREHOLDERS IN TTS GROUP ASA PER 31 DECEMBER 2010 WERE AS FOLLOWS: 

(All figures in NOK) 

Shareholder Number of shares Holding Voting share 

Rasmussengruppen AS 10 650 800 14.27 % 14.27 % 

Skeie Technology AS 8 929 879 11.97 % 11.97 % 

Skandinaviska Enskilda Banken 5 732 552 7.68 % 7.68 % 

Lesk AS 5 306 058 7.11 % 7.11 % 

Stisk AS 5 306 058 7.11 % 7.11 % 

Odin Maritim 2 164 000 2.90 % 2.90 % 

Tamafe Holding AS 2 160 735 2.90 % 2.90 % 

Barrus Capital AS (Ii) 2 000 000 2.68 % 2.68 % 

Holberg Norge 1 918 589 2.57 % 2.57 % 

Statoil Pensjon 1 543 937 2.07 % 2.07 % 

Itlution AS 1 475 261 1.98 % 1.98 % 

SHB Stockholm Clients Account 1 416 768 1.90 % 1.90 % 

Holberg Norden 1 201 329 1.61 % 1.61 % 

Skagen Vekst 1 176 000 1.58 % 1.58 % 

Sal Oppenheim Jr & Cie 1 100 000 1.47 % 1.47 % 

Rbc Dexia Investor Services Bank 962 000 1.29 % 1.29 % 

Skeie Consultants AS 953 033 1.28 % 1.28 % 

Odin Europa Smb 848 619 1.14 % 1.14 % 

Sundt AS 656 000 0.88 % 0.88 % 

Statoil Forsikring A.S 416 987 0.56 % 0.56 % 

Total 20 largest shareholders 55 918 605 74.93 % 74.93 % 

Total others 18 712 594 25.07 % 25.07 % 

Total 74 631 199 100.00 % 100.00 % 

SHARES OWNED By BOARD MEMBERS AND GROUP MANAGEMENT AND RELATED PARTIES 

Board Per 31.12.10 Per 31.03.11 

Trym Skeie1 2 160 735 2 160 735 

Bjarne Skeie2 20 495 028 20 495 028 

Karen T. Mørkestøl 3 217 3 217 

Jarle Dyrdal 30 227 30 227 

Group management 

Johannes D. Neteland 185 000 185 000 

Related daugther Anna S. Neteland 100 100 

Ivar K. Hanson 52 422 52 422 

Lennart Svensson 200 200 

Inge Gabrielsen 450 450 

1) Owns Tamafe Holding (100 %) 

2) Bjarne Skeie owns (20 % of the shares and 100 % of the voting shares) in Skeie Technology AS 

and Skeie Consultants AS. Lesk AS is owned by his daughter Lena Skeie. S 

tisk AS is owned by his daughter Stina Skeie. 

On 3 June 2010, the Annual General Meeting resolved to authorise the Board to issue up to 7,000,000 

shares in the event of an acquisition or merger. This authority is valid until the ordinary general 

meeting 2010, or until 30 June 2011, whichever is the earlier. The directed issue in July 2010 issued 

6 722 920 shares under this authority. 

As at 31 December 2010, 240 000 options had been allotted that can be exercised until 15 June 2011 

at the price of 7.55 NOK (under an authority for a total of 420 000 options granted at the ordinary 

general meeting on 15 June 2009). A further 360 000 options were issued that can be exercised until 

3 June 2012 at the price of 5.91 NOK (under an authority for a total of 420 000 options granted at 

the ordinary general meeting on 3 June 2010). 


111


note 11 cont. 

THESE OPTIONS ARE DISTRIBUTED AS FOLLOWS: 

Number of Number of 

options that can options that can 

be exercised Exercise be exercised Exercise 

Name Position Company until 15.06.11 price until 03.06.12 price Totalt 

Johannes D. Neteland President & CEO TTS Group ASA 120 000 7.55 120 000 5.91 240 000 

Arild Apelthun CFO TTS Group ASA 0 60 000 5.91 60 000 

Lennart Svensson Divisional Director TTS Port Equipment AB 60 000 7.55 60 000 5.91 120 000 

Ivar K. Hanson Divisional Director TTS Marine AS 60 000 7.55 60 000 5.91 120 000 

Inge Gabrielsen Divisional Director TTS Energy AS 0 60 000 5.91 60 000 

Total number of options to management staff 240 000 360 000 600 000 

No options were exercised in 2010. 

Option schemes were granted to group management under authorities granted by the ordinary general meeting in 2008, 2009 and 2010. 

These schemes allow group management to buy a number of shares in future for a previously agreed purchase price equal to the fair market 

price at the time share options are granted. 

Option premiums will be exercised when options are awarded using the Black & Scholes (BS) option pricing model. 

The options run for up to two years, with the first exercise to option being after one year (50 %) and then (12.5 %) per quarter, giving 

a weighted average 15 month period as used in BS. Option premiums are spread over the option period of two years. 

Forecast volatility is based on a combination of historic data and estimates. 

Volatilities used for options awarded are 42 % for 2008, 74 % for 2009 and 81 % for 2010. 

Risk-free interest rates used are 5.0 % for 2008, 2.95 % for 2009 and 2.23 % for 2010. Option costs for 2010 are charged to costs at 2.395 TNOK. 

The corresponding figure for 2009 was 5.437 TNOK. Option costs are classified as pay in the profit and loss account. 

Employer’s contributions are charged to costs when options are realised. 

TREASURy SHARES 

The ordinary general meeting on 15 June 2009 resolved not to authorise the Board to buy treasury shares. This resolution was upheld in 2010. 

TTS had up to 133.100 shares between 15 June 2009 and 31 December 2010, holding 35.210 treasury shares as at 31 December 2010. 

SUBORDINATED CONVERTIBLE LOAN 

At an extraordinary general meeting on 10 January 2011, the company agreed to take up a subordinated convertible loan of 200 MNOK. Bond holders 

may convert at the price of 9.2839 NOK at any time. The maximum number of shares which can be created by converting in full is 21 542 671. 

The loan and conversion rights were established after the year end, and hence are not included when calculating the profit per share in 2010. 

note 12 Other short-term liabilities 


112 


Provision for holiday pay 1 004 1 121 

Other provisions for costs 1 010 5 394 

Total other short-term liabilities 2 014 6 515 

note 13 Other operating costs 



Building lease, cost of premises 1 374 1 951 

IT costs 1 027 2 473 

Marketing, travel 4 643 5 914 

Other 11 089 11 454 

Total other operating costs 18 132 21 793

note 14 Related parties 

All subsidiaries (Note 6), joint ventures (note 6), members of the Board and top management are to be regarded 

as related parties. The group has engaged in many different transactions with subsidiaries and joint ventures. 

All transactions were made in the normal course of business at arm’s length prices. 

note 15 Financial items and exchange rate gains/losses 



Income from investments in subsidiaries -232 083 -242 917 

Income from investments in associated companies 891 935 

Interest income from companies in same group 63 852 4 958 

Other interest income 912 19 776 

Dividends 0 0 

Interest income to companies in same group -16 552 0 

Interest costs on liabilities to financial institutions -61 794 -40 871 

Other financial costs -5 912 -6 500 

Net exchange rate gains (losses) -762 -3 202 

Total -251 448 -267 821 

ExCHANGE RATE GAINS/LOSSES 

Currency differences booked to income and costs in the profit and loss account are as follows: 


Fx income 35 872 30 089 

Fx costs -36 634 -33 291 

Total -762 -3 202 

Fx income and costs are net and shown as other financial costs. 

note 16 Events since year end 

No dividends have been proposed to shareholders for 2010. 

The extraordinary general meeting on 10 January, 2011 resolved to take up a subordinated convertible bond loan of 

a nominal 200 MNOK. The loan carries 8 % coupon interest and matures on 18 January 2016. The group has a call 

option on the stated terms which expires on August 2 2014. Bondholders may convert at a price of 9.2839 NOK 

at any time. The maximum number of shares which can be issued if the loan is converted in full is 21 542 671, 

e quivalent to a dilution effect of 28.87 %. 

The Norwegian entities in the Energy division were merged in February 2011 to simplify internal structures and 

streamline internal processes. The companies involved in the merger were TTS Energy AS (acquiring company), 

TTS Energy Bergen AS, TTS Energy Ålesund AS and TTS Sense MUD AS. Since the merger, all companies are now 

part of TTS Energy AS. The merger date for accounting purposes was 1 January 2010. 

We would also refer to announcements published on the Oslo Stock Exchange of major new contracts concluded 

in 2011. The main individual contracts announced to the Oslo Exchange and concluded since the year end a worth 

a total of approx. 91 MNOK for Marine, approx. 55 MNOK for Port and Logistics and approx. 505 MNOK for Energy. 

There have not been any cancellations of significance since the year end. 


113

Auditor’s report 


114 

To the Annual Shareholders’ Meeting of TTS Group ASA 

INDEPENDENT AUDITOR’S REPORT 

KPMG AS Telephone +47 04063 

Postboks 4 Nygårdstangen Fax +47 55 32 71 20 

St. Jakobs plass 9 Internet www.kpmg.no 

N-5838 Bergen Enterprise 935 174 627 MVA 

Report on the Financial Statements 

We have audited the accompanying financial statements of TTS Group ASA, which comprise the 

financial statements of the parent company TTS Group ASA and the consolidated financial 

statements of TTS Group ASA and its subsidiaries. The parent company’s financial statements 

comprise the balance sheet as at 31 December 2010, the income statement and cash flow 

statement for the year then ended, and a summary of significant accounting policies and other 

explanatory information. The consolidated financial statements comprise the statement of 

financial position and the statement of comprehensive income, statement of changes in equity and 

cash flow statement for the year then ended, and a summary of significant accounting policies 

and other explanatory information. 

The Board of Directors and the Managing Director’s Responsibility for the Financial Statements 

The Board of Directors and the Managing Director are responsible for the preparation and fair 

presentation of the parent company financial statements in accordance with the Norwegian 

Accounting Act and generally accepted accounting standards and practices in Norway and for 

the consolidated financial statements in accordance with International Financial Reporting 

Standards as adopted by the EU, and for such internal control as the Board of Directors and the 

Managing Director determine is necessary to enable the preparation of financial statements that 

are free from material misstatement, whether due to fraud or error. 

Auditor’s Responsibility 

Our responsibility is to express an opinion on these financial statements based on our audit. We 

conducted our audit in accordance with laws, regulations, and auditing standards and practices 

generally accepted in Norway, including International Standards on Auditing. Those standards 

require that we comply with ethical requirements and plan and perform the audit to obtain 

reasonable assurance about whether the financial statements are free from material misstatement. 

An audit involves performing procedures to obtain audit evidence about the amounts and 

disclosures in the financial statements. The procedures selected depend on the auditor’s 

judgment, including the assessment of the risks of material misstatement of the financial 

statements, whether due to fraud or error. In making those risk assessments, the auditor considers 

internal control relevant to the entity’s preparation and fair presentation of the financial 

statements in order to design audit procedures that are appropriate in the circumstances, but not 

for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An 

audit also includes evaluating the appropriateness of accounting policies used and the 

reasonableness of accounting estimates made by management, as well as evaluating the overall 

presentation of the financial statements. 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a 

basis for our audit opinion. 

KPMG AS, a Norwegian member firm of the KPMG network of independent 

member firms affiliated with KPMG International Cooperative (“KPMG 

International”), a Swiss entity. 

Statsautoriserte revisorer - medlemmer av Den norske Revisorforening 

Offices in: 

Oslo 

Alta 

Arendal 

Bergen 

Bodø 

Elverum 

Finnsnes 

Grimstad 

Hamar 

Haugesund 

Kristiansand 

Larvik 

Mo i Rana 

Molde 

Narvik 

Røros 

Sandefjord 

Sandnessjøen 

Stavanger 

Stord 

Tromsø 

Trondheim 

Tønsberg 

Ålesund

Independent auditor's report 


Opinion on the separate financial statement 

In our opinion, the parent company’s financial statements give a true and fair view of the 

financial position of TTS Group ASA as at 31 December, 2010, and of its financial performance 

and its cash flows for the year then ended in accordance with the Norwegian Accounting Act and 

accounting standards and practices generally accepted in Norway. 

Opinion on the consolidated financial statements 

In our opinion, the consolidated financial statements give a true and fair view of the financial 

position of TTS Group ASA and its subsidiaries as at 31 December, 2010, and of its financial 

performance and its cash flows for the year then ended in accordance with International Financial 

Reporting Standards as adopted by the EU. 

Report on Other Legal and Regulatory Requirements 

Opinion on the Board of Directors’ report 

Based on our audit of the financial statements as described above, it is our opinion that the 

information presented in the Board of Directors’ report concerning the financial statements, the 

going concern assumption, and coverage of the loss is consistent with the financial statements 

and complies with the law and regulations. 

Opinion on Accounting Registration and Documentation 

Based on our audit of the financial statements as described above, and control procedures we 

have considered necessary in accordance with the International Standard on Assurance 

Engagements (ISAE) 3000, «Assurance Engagements Other than Audits or Reviews of Historical 

Financial Information», it is our opinion that the company’s management has fulfilled its duty to 

produce a proper and clearly set out registration and documentation of the company’s accounting 

information in accordance with the law and bookkeeping standards and practices generally 

accepted in Norway. 


KPMG AS 

Knut Olav Karlsen 

State Authorised Public Accountant 

[Translation has been made for information purposes only] 

p. 2 / 2 

115




45 -116 DiREcTOR’S REPORT AnD AccOUnTS 


116 

confirmation from the board of Directors and chief Executive Officer 

We confirm, to the best of our knowledge, that the consolidated annual accounts for 

the period 1 January to 31 December 2010 have been prepared in accordance with current accounting 

standards/IFRS and that the information herein gives a true and fair view of the company’s and 

group’s assets, liabilities, financial position and profit as a whole, and that the annual report gives 

a fair view of the development, result and position of the company and of the group, together 

with a description of the principal risks and uncertainties facing the enterprise. 

Bergen, 13. april 2011 

THE BOARD OF TTS GROUP ASA 

Trym Skeie Bjarne Skeie Anne Breive 

CHAIRMAN DIRECTOR DIRECTOR 

Kjerstin Fyllingen Jarle Dyrdal Karen T. Mørkestøl 

DIRECTOR DIRECTOR DIRECTOR 


PRESIDENT & CEO

117





118-123 ORGAniSATiOn 

118 

DEck 

EqUiPMEnT 

Edgar Bethmann 

TTS-LMG Marine 

cranes Gmbh 

Jens Meldal 

TTS Marine Gmbh 

Edgar Bethmann 

TTS Marine 

Shanghai co. Ltd. 

Ketil Skjeggedal 

TTS kocks 

Ostrava s.r.o. 

Thomas Fojtik 


korea co. Ltd. 

Marcus Bergmann 

TTS Marine Equipment 

(Dalian) co. Ltd. 

Göran Bertilson 

MARinE 

Ivar K. Hanson 

ExECUTIVE VICE PRESIDENT 

cARGO AccESS 

Per Croner 

TTS Marine Ab 

Per Croner 

TTS Ships 

Equipment AS 

Jan-Magnar Grøtte 

TTS Marine s.r.l. 

Alessio Quargnenti 

SERvicES 

Arne Knudsen 

TTS Marine AS 


TTS Marine inc. 

Torsten Paas 

TTS vietnam 

Dan Magnusson 

TTS korea 

Kyung-Hwan Kim 

TTS Singapore Pte. Ltd. 

Jan Ove Hovdenak 

TTS Greece Ltd. 

Dimitris Manolias 

jv/MGMT 




TTS hui hai Ships 

Equipment co. Ltd. 

Madame He Pu 

TTS bohai 

Machinery co. Ltd. 

Li Dali 

PRESIDENT & CEO

EnERGY 

Inge Gabrielsen 


TTS Energy AS 

Inge Gabrielsen 

TTS Sense canada Ltd. 

Mark Skawronski 

TTS Sense 

Singapore Pte. Ltd. 

Bergtor Haugaa 

Sense DrillFab AS 

Jan Ove Aasen 

TTS do brazil 

Joao Manoel 

de Souza Araujo 

PORT AnD LOGiSTicS 



TTS Liftec Oy 

Tatu Miikkulainen 

TTS Port 

Equipment Ab 

Lennart Svennson 

TTS handling 

Systems AS 

Rolf-Atle Tomassen 

119






Marine 

Division 

Edgar bethmann 

Madame he Pu 

Alessio quargnenti jan Ove hovdenak Göran bertilson 

Thomas Fojtik 

Marcus bergmann 

120 

Per croner 

jan-Magnar Grøtte 

Dan Magnusson 

FOTO: OLOF HOLDAR 

Arne knudsen 

Dimitris Manolias Li Dali 

kyung-hwan kim 

ivar k. hanson 

jens Meldal 

ketil Skjeggedal 

Torsten Paas

Energy 

Division 

inge Gabrielsen 

bergtor haugaa 

Pål Larsen 

Mark Skawronski 

jan Ove Aasen 

joao Manoel 

de Souza Araujo 


Division 

Tatu Miikkulainen 


Rolf-Atle Tomassen 

121






companies in the TTS Group 

bRAziL 

TTS do brazil 

Av. Elias Agostinho 340 

Suite 807 - Petro Office 

Imbetiba Macaé-RJ, 27913-350 

Tel: +55 22 3311 6647 

Fax: +55 22 3311 6647 

cAnADA 

TTS Sense canada Ltd 

6708–75th Street 

Edmonton, Alberta 

Canada T6E 6T9 

Tel: +1 780 430-1833 

Fax: +1 780 430-1834 

canada@tts-sense.com 

chinA 

TTS hua hai Ships 

Equipment co Ltd 

18th floor, 3255 Zhou Jia Zui Road 

CN-200093 Shanghai 

Tel: +86 21 6539 8257 

Fax: +86 21 6539 7400 

info@tts-huahai.com 

TTS bohai Machinery 

(Dalian) co Ltd 

Beihai Industrial Park 

Sujia, Dalianwan Street 

Ganjingzi District 

CN-Dalian 

Tel: +86 411 8711 2670 

Fax: +86 411 8711 2702 

info@tts-bohai.com 


(Shanghai) co Ltd 

No.389 GaoDong No 2 Rd 

GaoDong Industrial Park 

Pudong 

CN-Shanghai 200137 

Tel: +86 21 5848 5300 

Fax: +86 21 5848 5311 

office@tts-marine.cn 

122 

TTS Marine Equipment 

(Dalian) co Ltd 

Tuchengzi Cun 

Dalianwan Street 

Ganjingzi District 

CN-Dalian 116034 

Tel: +86 411 8711 9663 

Fax: +86 411 8711 9678 

info@tts-me.cn 

czEch REPUbLic 

TTS kocks Ostrava s.r.o. 

U Reky 808 

CZ-720 00 Ostrava-Hrabová 

Tel: +420 596 782 708 

Fax: +420 596 782 707 

info@tts-kocks.cz 

FinLAnD 

TTS Liftec Oy 

Sorkkalantie 394 

33980 Pirkkala 

Tel: +358 3 3140 1400 

Fax: +358 3 3140 1444 

sales@tts-liftec.fi 

GERMAnY 

TTS Marine Gmbh 

Wachtstrasse 17–24 

DE-28195 Bremen 

P.O. Box 104080 

DE-28040 Bremen 

Tel: +49 421 52008-0 

Fax: +49 421 52008-20 

info@tts-marine.de 

TTS-LMG 

Marine cranes Gmbh 

Gutenbergstrasse 1 

DE-23611 Bad Schwartau 

Tel: +49 451 4501 0 

Fax: +49 451 4501 392 

info@tts-lmg.de 

GREEcE 

TTS Greece Ltd 

Skouze 1 

18535 Piraeus 

Tel: +30 210 42 94 480 

Fax: +30 210 42 93 933 

info@ttsgreece.gr 

iTALY 

TTS Marine s.r.l. 

Ponte Colombo 

IT-16126 Genova 

Tel: +39 010 24 81 205 

Fax: +39 010 25 43 191 

info@tts-marine.it 

kOREA 

TTS Marine korea co Ltd 

#1664–10, Songjeong-Dong 

Gangseo-Gu 

Busan 618-819 Korea 

Tel: +82 51 831 8401 

Fax: +82 51 979 5610 

mail@tts-marine.co.kr 

nORWAY 


Folke Bernadottes vei 38 

Postboks 3577 Fyllingsdalen 

NO-5845 Bergen 

Tel: +47 55 94 74 00 

Fax: +47 55 94 74 01 

info@tts-group.no 

TTS Energy AS 

Andøyfaret 3 

NO-4623 Kristiansand 

Tel: +47 380 000 570 

Fax: +47 380 000 572 

sales@tts-energy.com 

Folke Bernadottesvei 38 

Postboks 3566 Fyllingsdalen 


Tel: +47 55 34 84 00 

Fax: +47 55 34 84 01 

sales@tts-energy.com

TTS handling Systems AS 

Holterkollveien 6 

P.O. Box 49 

NO-1441 Drøbak 

Tel: +47 64 90 79 10 

Fax: +47 64 93 16 63 

info@tts-hs.no 

Sense Drillfab AS 

Spjotneset 

Postboks 13 

NO-4685 Nodeland 

Tel: +47 48 03 05 00 

Fax: +47 38 18 90 01 

jan.ove.aasen@sensedrillfab.no 

TTS Ships Equipment AS 


P.O. Box 3517, Fyllingsdalen 


Tel: +47 55 11 30 50 

Fax: +47 55 11 30 60 

info@tts-se.no 

TTS Marine AS 

Barstølveien 26 

Servicebox 602 

NO-4606 Kristiansand 

Tel: +47 38 04 95 00 

Fax: +47 38 04 93 41 

service.krs@tts-marine.no 

SinGAPORE 

TTS Sense 

Singapore Pte Ltd 

16 Enterprise Road 

Enterprise 10 

Singapore 627699 

Tel: +65 68 67 90 65 

Fax: +65 62 64 40 11 

mailsg@tts-sense.com 

TTS Singapore Pte Ltd 

16 Enterprise Road 

Enterprise 10 

Singapore 627699 

Tel: +65 68 67 90 70 

Fax: +65 62 64 47 30 

service@tts-singapore.com 

SWEDEn 

TTS Marine Ab 

Kämpegatan 3 

SE-411 04 Göteborg 

Tel: +46 31 725 79 00 

Fax: +46 31 725 78 00 

info@tts-se.se 

TTS Port Equipment Ab 

Kämpegatan 3 

SE-411 04 Göteborg 

Tel: +46 31 725 79 00 

Fax: +46 31 725 78 04 

info@tts-port.se 

USA 

TTS Marine inc 

6555 North Powerline Road, 

Suite #410 

Fort Lauderdale, FL 33309 

Tel: +1 954 493 6405 

Fax: +1 954 493 6409 

info@tts-se.us 

viETnAM 

TTS vietnam 

4th Floor, Harbour View Building 

No 4, Tran Phu Street 

Haiphong City, Vietnam 

Tel: +84 31 36 86 518 

Fax: +84 31 36 86 516 

info@tts-se.vn 

123



PO Box 3577 Fyllingsdalen 

N-5845 Bergen, Norway 

Tel: +47 55 94 74 00 

Fax: +47 55 94 74 01 

E-mail: info.bgo@tts-group.no 

www.ttsgroup.com

Director's report for 2010 - TTS Group ASA

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