Terma A/S Annual Report 2009/10 · Annual Report 2009/10 5 March 2009 Terma signed a contract with...

Terma A/S Annual Report 2009/10

Annual Report 2009/10

© Terma 2010Production idworks a/sImages David Bering, Lockheed Martin, Royal Danish Navy, ESA (page 16, bottom: ESA - P. Carril); and TermaPrinting Strandbygaard Grafisk A/S

Contents

4 Financial Highlights – Consolidated

5 Highlights of the Year

6 Management’s Review 2009/10

14 Business Areas

17 International Group Locations

18 Accounting Policies

23 Executive Management’s Statement

24 Independent Auditor’s Report

25 Statement of Income

26 Balance Sheet – Assets

27 Balance Sheet – Equity and Liabilities

28 Cash Flow Statement

29 Notes

Board of DirectorsSvend-Aage Nielsen, ChairmanHolger Lavesen, Deputy ChairmanHenrik StenbjerreFlemming H. TomdrupBo LaursenPaul-Werner Johnsen

Executive ManagementJens Maaløe, President & CEO

BankersDanske Bank Holmens Kanal 2–12 1092 København K Denmark

OwnersThrige Holding A/S Copenhagen

AuditorsKPMG Statsautoriseret Revisionspartnerselskab

Flemming Brokhattingen State-Authorized Public Accountant

Jes Lauritzen State-Authorized Public Accountant

Værkmestergade 258000 Århus C Denmark

4 Annual Report 2009/10

DKK million 2009/10 2008/09 2007/08 2006/07 2005/06

Order intake 876 1,194 1,438 957 1,011

Order book, year-end 1,629 1,866 1,730 1,331 1,379

Revenue 1,113 1,058 1,039 1,005 1,001

Operating profit 2 74 115 96 89

Financial items (27) (14) (19) (15) (15)

Profit for the year (20) 42 84 53 53

Non-current assets 711 596 506 455 440

Current assets 748 742 640 561 477

Assets, total 1,459 1,339 1,146 1,016 917

Capital stock 18 18 20 20 20

Equity 330 375 441 366 346

Provisions 93 100 89 69 44

Long-term liabilities other than provisions 246 207 188 144 148

Current liabilities other than provisions 791 658 429 437 379

Cash flows from operating activities 82 101 157 94 97

Cash flows from investing activities (222) (219) (117) (83) (38)

Portion relating to investments in property, plant, and equipment (85) (70) (28) (33) (21)

Cash flows from financing activities 19 (2) 20 (57) (39)

Cash flows, total (120) (120) 59 (47) 20

Financial ratios

Net profit ratio 0.2 7.0 11.1 9.5 8.0

Return on investments 0.1 6.1 11.6 10.9 9.2

Current ratio 95 113 149 128 126

Equity ratio 22.6 28.0 38.4 36.0 37.7

Return on equity (5.6) 10.2 20.8 14.8 15.4

Average number of full-time employees 1,261 1,183 1,020 965 1,014

*Disposaloflandandbuildingsinthe2005/06fiscalyearisnotincluded.

Net profit ratio

=

Return on investments =

Operating assets

= Total assets less cash and cash equivalents, other interest-bearing assets (including stock), and equity interest in affiliated companies

Operating profit* x 100Revenue

Operating profit* x 100Average operating assets

Current ratio =

Equity ratio =

Profit/loss for analytical purposes = Profit for the year

Return on equity =Result for analytical purposes x 100Average equity, ex minority interests

Current assets x 100Current liabilities other than provisions

Equity at year-end x 100Total liabilities at year-end

Definitions:

Financial Highlights – Consolidated

Financial Highlights – Consolidated

Annual Report 2009/10 5

March 2009 Terma signed a contract with Lockheed Martin for the delivery of advanced composite components for the F-35 Joint Strike Fighter aircraft stabilizers. Boeing and Terma signed a Memorandum of Agreement in connection with Boeing’s participation in the competition to provide new fighter aircraft to Denmark. The agreement outlines key areas of collaboration between the two companies.

May 2009 The launch of the Herschel and Planck space telescopes constituted a major Terma contribution to scientific ESA missions in terms of software and services.

June 2009 BAE Systems awarded Terma a contract for the F-35 Low Rate Initial Production Lot 3 for the delivery of machined parts for the horizontal tail for the Short Take-Off Vertical Landing version of the F-35 Joint Strike Fighter aircraft. A feasibility study on the implementation and integration of 3-D Audio and Active Noise Reduction technology on the Boeing F/A-18E/F Super Hornet was agreed between Boeing and Terma.

August 2009 Lockheed Martin, BAE Systems, and Northrop Grumman Corporation signed a Memorandum of Understanding with Terma. According to this agreement, Terma is designated as a major strategic supplier to the F-35 Joint Strike Fighter program. Boeing selected Terma’s aircraft survivability equipment for the Canadian CH-147 Chinook helicopter program. The development and subsystem integration work will be implemented by Terma’s U.S.-based team in Warner Robins, Georgia, and supported by Terma in Denmark.

September 2009 Singapore Technologies Marine awarded Terma a contract for the delivery of a C-Series combat system for the Royal Thai Navy’s new Landing Platform Dock. Terma was contracted by Spanish security and IT company INDRA to deliver SCANTER 2001 radars complete with antennas and radar target tracking for the upgrading of the Portuguese coastal surveillance system. Terma introduced the new SCANTER 6000 Naval Surveillance Radar System which is tailored for navies, coast guards, and other high-requirement authorities. Combined with helicopter control, the capability to detect small surface targets makes the radar well-suited for search and rescue operations.

February 2010 Sikorsky Aircraft Corp. and Terma announced the signing of a Memorandum of Understanding to explore potential collaborations related to Denmark’s potential procurement of replacement maritime helicopters.

Highlights of the Year

Highlights of the Year


During the 2009/10 fiscal year, Terma was affected by the global financial crisis and recession which caused defense budget cuts in a large number of countries and thereby postponement of projects and materiel acquisitions. Further, participation in international missions has emphasized the necessity of prioritizations and adjustment of resources.

Despite this fact, high levels of proposal activities were implemented within all Terma Business Areas. However, the degree of uncertainty, as to when contracts would be entered into, was higher than usual.

The revenue for the fiscal year was MDKK 1,113, constituting a 5 % growth compared to the previous year. The profit before tax amounted to MDKK -25, a negative development compared to previous years, caused by the recognition of expected amended preconditions in the contract entered into between the Danish Government and Terma in 2008 for the supply of control rooms for the Danish emergency preparedness network SINE. The parties have commenced negotiations on reductions of the content and scope of work, and we expect these negotiations to be concluded in the near future.

The global financial crisis and the adjustments within the SINE project have necessitated the implementation of an organizational adjustment to yield a balance between resources and the expected future activity and revenue levels. At the end of the fiscal year, total staff had been reduced by approximately 80 employees.

Total staff of the Terma Group amounted to 1,256 employees at the end of the fiscal year. Add to this consultants, students, and

employees under fixed-term contracts. Total staff is expected to remain essentially unchanged in the year to come.

At the end of the fiscal year, Terma’s defense activities within electronics and software – Airborne Systems, Integrated Systems, and Electronic Manufacturing – were grouped into one Business Area, named Integrated Defense Systems. Terma now consists of four Business Areas:

1. Aerostructures

2. Integrated Defense Systems

3. Radar Systems

4. Space

Our activities in the U.S., The Netherlands, and Singapore continue to expand and represent an increasing share of the aggregate business. This reflects the importance of being close to customers and strategic partners. Based on its local security clearance, Terma North America Inc. contributed by securing important strategic contracts within several of our Business Areas.

Establishment of a maintenance center at the Royal Netherlands Air Force base in Woensdrecht, similar to the activities in Warner Robins, USA, has been approved by the Dutch authorities and will be established in the spring of 2010.

In connection with current and future assignments for customers in Southeast Asia, the Integrated Defense Systems and Radar Systems Business Areas have benefited from Terma’s local presence in Singapore.

The activities in the U.S., The Netherlands, and Singapore continue to expand and represent an increasing share of the aggregate business. This reflects the importance of being close to customers and strategic partners.

Developments within Terma’s primary markets are estimated to be positive in the year to come. We expect the order intake to increase in line with the revenue by virtue of several major projects within all four Business Areas.

Management’s Review 2009/10


The long-standing collaboration between Lockheed Martin and Terma on the F-16 fighter continues within the F-35 Joint Strike Fighter program



Targeted investments in recent years in product and market development, combined with strong performance and high quality products and projects, have resulted in several valuable and strategic contracts in all four Business Areas:

1. According to plans, the Aerostructures Business Area delivers products and components for the new U.S. F-35 Joint Strike Fighter. Highly specialized manufacturing equipment and processes have been installed and prepared for the expected increased involvement in the program in the coming years.

2. The Integrated Defense Systems Business Area has successfully supplied advanced self-protection equipment for the Royal Air Force Harrier and Tornado fighter aircraft. Further, Terma North America Inc. entered into a contract with Boeing for the supply of self-protection equipment for Canadian CH-147 Chinook helicopters. A considerable international interest in Terma’s solutions prevails, and new contracts within this highly specialized area of technology are expected. Further, this Business Area will deliver a command and control system for a new type of naval vessel for the Royal Thai Navy via Singapore Technologies Marine. The delivery includes the subsystems C-Flex, C-Search (radar), and C-Fire. The contract is a result of a new promising collaboration with international shipyards.

3. The Radar Systems Business Area entered into a contract for the supply of SCANTER 2001 radar systems for the coastal surveillance of the entire mainland Portugal coastline. This contract further consolidates Terma’s leading market position within coastal surveillance and airport surface movement control and guidance.

4. The Space Business Area has entered into contracts for three major space programs; the European satellite navigation program Galileo, the European Space Agency’s scientific Mercury mission BepiColombo, and Small Geo, development of a small telecommunications platform for the commercial space market.

The global recession which characterized the 2009/10 fiscal year is also expected to adversely affect the defense industry in 2010/11.

The commitment and efforts of our employees during a difficult year are outstanding, and the Board of Directors and the Executive Management are greatly appreciative.

Results for 2009/10

The year’s intake of orders was MDKK 876 as compared to MDKK 1,194 in 2008/09. The order intake is affected significantly by the amended preconditions in the SINE project.

Revenue for the fiscal year was MDKK 1,113, constituting a 5 % growth compared to the previous year, however, below expectations due to the postponed order intake.

The profit before tax amounted to MDKK -25. Exclusive of the effect of the SINE project, the profit before tax equaled the level in 2008/09 (MDKK 60).

The Balance Sheet is marked by high activity levels with continued significant investments in product development in general and in capabilities and high-tech manufacturing facilities in the Aerostructures Business Area, which is currently transforming the production facilities as part of Terma’s participation in the F-35 Joint Strike Fighter program. This places heavy demands on external financing and, as expected, it resulted in an increase of the interest-bearing debt and the financial costs.

Terma has the required credit lines available and the support of our financial partners to continue the planned investments, including in particular the production facilities in Aerostructures.

Dividend

The Board of Directors proposes that no dividend payment is made for the 2009/10 fiscal year.

Outlook for the 2010/11 Fiscal Year

Terma expects an organic growth of approximately 10 % in the 2010/11 fiscal year. Developments within Terma’s primary markets are estimated to be positive. We expect the order intake to increase in line with the revenue by virtue of several major projects within all four Business Areas.

An order book totaling MDKK 1,629 at the beginning of 2010/11 and a revenue secured level of 71 % of the expected revenue constitute a solid foundation for activities during the year and provides for a sound planning horizon.

The result for 2010/11 is expected to equal the level of previous fiscal years. Uncertainty within the budget is primarily related to the global recession which affects the timing of order intake and revenue.

No significant credit risks exist relative to individual customers, but there may be business risks attached to sub-suppliers struck by the global recession. Terma keeps in close contact with its sub-suppliers and will follow the situation in order to secure second-source suppliers of critical components.


Organizational Structure

Terma’s four Business Areas are:

1. Aerostructures: Development and production of advanced structures for defense and non-defense aircraft and helicopters

2. Integrated Defense Systems: Network and tactical systems; self-protection equipment for aircraft, helicopters, and ships; and electronics manufacturing and services within the defense industry

3. Radar Systems: Advanced radar systems for coastal surveillance, naval surveillance, vessel traffic surveillance, perimeter surveillance, and surface movement surveillance at airports

4. Space: Mission-critical products, software, and services for space applications.

The production of aerostructures in carbon fiber takes place under climate-controlled conditions

Further, Terma has subsidiaries and facilities in the U.S., The Netherlands, Germany, and Singapore.



Activities within the Business Areas

The following presents a brief review of the business development and the strategic initiatives within the individual Business Areas and within subsidiaries and facilities worldwide.

Aerostructures

The Aerostructures Business Area continues to expand and optimize the manufacturing facilities at Grenaa. These efforts take place in close collaboration with our F-35 partners, in particular Lockheed Martin, Northrop Grumman Corporation, and BAE Systems. All of these partner companies have employees on-site at Grenaa.

During the fiscal year, Aerostructures entered into major contracts with our collaboration partners for delivery of structures and subsystems for the F-35 Joint Strike Fighter. In the fiscal year, the intake of orders related to the F-35 program was MDKK 262. During the entire project lifetime, Terma has secured contracts with an aggregate value of approximately MDKK 500. The F-35 program will constitute a continuously increasing share of the Aerostructures business.

In August 2009, Terma signed an extensive agreement with Lockheed Martin and a number of the company’s collaboration partners on the future collaboration within the F-35 Joint Strike Fighter program. The agreement provides Terma status as preferred supplier and strategic collaboration partner within a number of significant projects. The agreement forms the foundation of the long-term collaboration with the customers with whom we already have F-35 contracts.

In the spring of 2010, a majority in the Danish Parliament decided to postpone the down-selection of a new fighter aircraft for the Royal Danish Air Force. In concert, it was decided that down-selection will take place within the Defense Agreement period (2010-2014), and that Denmark’s participation as a partner in the Joint Strike Fighter program is not affected by the decision. Thus, Terma will continue its active participation in the program.

Further, Terma’s relations with Boeing (F-18 Super Hornet) and SAAB (Gripen Next Generation) will be maintained and expanded. In the fall of 2009, Boeing implemented an evaluation and subsequent approval of Terma’s manufacturing facilities at Grenaa, targeting a future industrial collaboration between the two companies on structures for non-defense aircraft.

The other activities in Aerostructures, including design and production of Pods and Pylons for projects which are implemented in collaboration with Integrated Defense Systems, aerostructures for the F-16 fighter aircraft, and winglets for the Gulfstream business jet, will continue to be ongoing.

In 2008, Aerostructures established a new engineering facility in Fort Worth, Texas, USA. This facility further facilitates a close contact with U.S. customers and the attraction of skilled employees with aerospace industry experience. The facility continues to expand and has documented its value through the dialog and collaboration with Lockheed Martin.

Integrated Defense Systems

The Integrated Defense Systems Business Area develops, manufactures, and markets mission-customized solutions as an independent, flexible, and fast responding systems integrator for mission-critical defense applications. Integrated Defense Systems consists of three Business Units: Network & Tactical Systems, Airborne Systems, and Manufacturing Services.

The Network & Tactical Systems Business Unit delivers command and control systems integrated with sensors, weapons, and communication infrastructure, based on Terma’s unique T-Core technology. The Royal Danish Navy’s flexible support ships and inspection vessels are equipped with C-Flex, the naval T-Core version.

The Link 11 version of T-Core for the Romanian Navy was upgraded with C-Flex to a complete combat management system with integration of existing sensors and weapons. Further, an airborne version was contracted for the Romanian maritime helicopters.

A continued, increasing market demand prevails for our C-Flex-based solutions. An example is for ocean patrol vessels, supplied in close collaboration with a number of leading shipyards.

Further, T-Core is an integral part of the control room solution which Terma will supply to the Danish Government as part of the SINE project. Following the establishment of a reference in Denmark, we expect the control room solution to constitute a major international market potential as a number of countries are in the process of introducing emergency preparedness systems.

In Airborne Systems, the heavy market demand continues to prevail for the self-protection systems used in fighter aircraft, transport aircraft, and helicopters. These systems, based on Terma’s AN/ALQ-213 system, have now been installed in more than 1,900 aircraft worldwide.


In collaboration with Boeing, Terma is supplying a self-protection system for the Royal Netherlands Air Force’ new CH-47 Chinook helicopters. The solution includes Terma’s next-generation electronic warfare (EW) product – the ALQ-213A. In addition, Terma was selected by Boeing to provide self-protection systems for the new Canadian CH-147 helicopters and similar solutions offered by Boeing to other potential international customers.

Together with EADS and in collaboration with the Royal Danish Air Force, Terma has completed the development of a unique Missile Warning System for the F-16 aircraft. The solution includes the 3-D Audio/Active Noise Reduction System.

Via Northrop Grumman Corporation, Manufacturing Services supplies advanced electronics for the onboard radar systems in the F-35 Joint Strike Fighter program.

Radar Systems

The Radar Systems Business Area maintains a well-based market position in an attractive market for professional radar-based surveillance systems for various environments. Driven by security and environmental requirements, a global focus on and willingness

to invest in surveillance and traffic control prevail throughout the marketplace. With a technologically up-to-date and enhanced product program in concert with a huge network of international collaboration partners, this business segment is expected to increase in the coming years.

The business objectives for the 2009/10 fiscal year were achieved, including the sale and delivery of radar systems for a nationwide coastal surveillance project in Portugal and continued deliveries to Middle Eastern customers. Further, the Business Area received orders for a large number of radar projects in China.

Terma’s internationally recognized radar system for surface movement in airports was selected for more than 50 medium-sized U.S. airports. The first systems have been delivered and will be activated in 2010.

In the 2009/10 fiscal year, Terma introduced a new solid state radar program – SCANTER 5000 for coastal and surface movement applications and SCANTER 6000 for naval surveillance. Additionally, Terma introduced the SCANTER Ground Surveillance Radar, a radar for perimeter and critical infrastructure surveillance. The first units will be delivered in 2010.

Terma has entered into a contract for the supply of SCANTER 2001 radar systems for the coastal surveillance of the entire mainland Portugal coastline


Space

The cornerstone in Terma’s space business is the European Space Agency (ESA) market. This is expected to continue in the years ahead.

During the year, Terma has been successful in securing contracts within three major space programs: Galileo, BepiColombo, and Small Geo. Additionally, Terma is the project manager of the international research project “The Atmosphere Space Interactions Monitor” (ASIM), a program which will observe the atmosphere from the International Space Station (ISS) to improve our understanding of the Earth’s climate and its changes.

To the Astrium consortium, Terma has delivered the first of four Power Conditioning and Distribution Unit (PCDU) flight models for the In Orbit Validation phase of the Galileo project. The PCDU supplies the battery with energy from the solar panels and distributes the power to the electrical systems, computers, and communication systems.

Terma has supplied three Star Trackers for ESA’s new climate satellite CryoSat-2, which was launched in April 2010. The three Terma Star Trackers determine the orientation and position of the satellite, when it measures the thickness of floating sea ice and polar ice sheets during its orbit at an altitude of more than 700 km.

Terma North America Inc.

Terma North America Inc. is established as the primary contact to North American customers for all Terma Business Areas. Headquartered in Crystal City near Washington, D.C., Terma North America Inc. now has operations in Georgia and Texas.

Terma North America Inc. has secured contracts with U.S. prime contractors to U.S. Air Force, Air National Guard/Reserve, and the U.S. Coast Guard. Additionally, Terma North America Inc. has recently made important progress in entering the U.S. Army helicopter market.

A close partnership with Lockheed Martin has resulted in the jointly developed Integrated Air and Missile Defense software product which is receiving significant interest in the market place.

Terma Space products, most notably the Star Tracker and power distribution systems, have gained renewed interest in the U.S. this past year.

Terma B.V.

Terma B.V. in The Netherlands continued its business within the Space Business Area, successfully executing a series of ESA projects both in-house and at ESA sites.

Terma secured a contract with the European Southern Observatory (ESO) for the provision of a team of 20 employees who will be responsible for the management of scientific data from the ESO observatories in Chile. The contract includes both optical data and radio data. Terma’s team will be placed at the ESO headquarters in Garching, near Munich.

The necessary agreements were secured for an electronic warfare support center operating at the Royal Netherlands Air Force base in Woensdrecht.

Corporate Social Responsibility

In Terma, Corporate Social Responsibility (CSR) is an integral part of our culture. We consider it important to proactively support our interaction with society and the world around us.

Terma expects and insists that all Group Business Areas, companies, and international representations comply with the legislation, rules, and conventions of the countries and local areas, in which our business activities are located.

Terma strongly dissociates itself from corruption and works hard to ensure that neither the Company nor our employees are involved in bribery or similar activities in this respect. Our efforts to counter corruption are compliant with the guidelines in internationally recognized standards, including guidelines set forth by the United Nations, the OECD, and the AeroSpace Industries Association of Europe (ASD). Terma’s statement on counter corruption is available at www.terma.com.

During the past year, Terma’s code of conduct has helped bring an increased awareness to this subject among those who represent us. Further, it has contributed significantly to our continued efforts to ensure a proper conduct when acting in a global business market.

The CSR effort is followed closely, and Terma’s guidelines and policy will be developed and adjusted continuously in the coming years.


Highly specialized manufacturing equipment is installed and prepared for the expected increased involvement in the F-35 Joint Strike Fighter program in the coming years.


The Aerostructures Business Area specializes in the design and manufacture of advanced structural parts for the defense and non-defense markets, including a broad range of products for the F-35 Joint Strike Fighter, the F-16 fighter aircraft, the Gulfstream business jet, as well as Pods and Pylons.

The F-35 is a top priority program for the Aerostructures Business Area. Since first involvement in this huge international project in 2004, Terma has secured contracts for seven different programs, and the first products have been delivered for test purposes and for the System Development and Demonstration and Low Rate Initial Production phases. Terma continues to develop crucial capabilities for the design and manufacture of high quality, complex, and price competitive composite structures for the F-35 program.

Terma has made significant investments to upgrade manufacturing capabilities and infrastructure to meet the demanding and

sophisticated technology and delivery requirements of the F-35 program. The investment program will continue in the coming years to ensure that the Aerostructures Business Area has the full capability to deliver parts for one aircraft per day within a few years.

Aerostructures continuously strives to meet the requirements of and deliver high quality products for our long-standing customer base as well as for new customers.

In 2008, Aerostructures established an office in Fort Worth, Texas, USA. This organization focuses on business development, including design and engineering capabilities. The office is staffed with highly trained engineering and program management professionals that are involved in the F-35 contracts. The local organization provides good access to key customers in the U.S. and facilitates the attraction of highly skilled engineers with aerospace experience.

The Integrated Defense Systems Business Area is a new strong defense organization. It was established by merging three defense-related Business Areas into one.

Integrated Defense Systems globally supplies network and tactical systems, airborne systems, and electronics manufacturing services. The Business Area develops, manufactures, and markets mission-customized solutions as an independent, flexible, and fast responding systems integrator of mission-critical defense applications. By grouping these defense activities, Terma achieves the volume and strength to counter the current and future international defense markets, where we have increasingly expanded our role and responsibilities as a recognized systems integrator and high quality electronics manufacturer.

Network & Tactical Systems

The Network & Tactical Systems Business Unit delivers command and control systems which provide situational awareness and decision support while integrating sensors, effectors, and communication infrastructure. The solutions are based on the proven Terma T-Core technology and applied in both a defense and non-defense context.

The Royal Danish Navy’s flexible support ships and inspection vessels are all equipped with C-Flex, the naval version of T-Core. A high-end version of the system will be installed in the new Danish anti-air warfare frigates. Internationally, C-Flex targets the largest ship segment for naval and coast guards; ocean patrol vessels and patrol vessels, where a number of contracts are under delivery.

In the Joint & Land segment, delivery of air defense systems to Austria continues, and the T-Core-based air defense suite is expanded with ballistic missile defense capability through collaboration with Lockheed Martin. Terma has participated in a number of tests within NATO, the U.S., and nationally.

In addition to the delivery of the Danish Army Battle Management System in collaboration with the Danish company Systematic, a full communication and situational awareness infrastructure for multiple, concurrent radio platforms will be launched, with functionality addressing small platforms like vehicles and zodiacs.

Common to the navy, army, air force, and homeland security application suites is the fact that they can share operational data and are scalable “plug-and-play” systems with open software interfaces allowing for further additions of subsystems and interfaces to external systems.

Erik Laursen Senior Vice President

Steen M. Lynenskjold Senior Vice President

Integrated Defense Systems

Aerostructures

Business Areas

Airborne Systems

The Airborne Systems Business Unit is a recognized, global supplier of aircraft survivability equipment systems. The heavy market demand continues to prevail for the self-protection systems used in fighters, transport aircraft, and helicopters. These systems are based on Terma’s AN/ALQ-213 system and have to date been installed in more than 1,900 aircraft worldwide.

The Royal Netherlands Air Force is in the process of procuring new CH-47F Chinook helicopters. In collaboration with Boeing, Terma is supplying the Chinook Aircraft Survivability Equipment solution, which includes Terma’s next generation electronic warfare controller product – the ALQ-213A. In addition, Terma was selected by Boeing to provide the self-protection systems for the new Canadian CH-147 helicopters, and similar solutions have been offered by Boeing to other potential international customers.

Together with EADS and in collaboration with the Royal Danish Air Force, Terma has completed the development of a unique missile warning system for the F-16 aircraft. The solution includes the 3-D Audio/Active Noise Reduction System which has now entered series production following successful, extensive tests and evaluations. Supported by Lockheed Martin, this solution is being demonstrated to a variety of F-16 customers worldwide.

Together with Northrop Grumman Corporation, Terma has delivered electronic warfare equipment for the Boeing P-8A Multi-Mission Maritime Aircraft. The P-8A is selected by the U.S. Navy as its long-range anti-submarine warfare, anti-surface warfare, intelligence, surveillance, and reconnaissance aircraft. Similar solutions are provided for the Korean E-737 and the Indian P-8I programs.

Lockheed Martin has selected Terma’s Programmable Interference Blanking Unit as standard equipment on the C-130J transport aircraft.

To better serve our U.S. and Foreign Military Sales customers, the security cleared facility in Warner Robins, Georgia, USA, has been expanded to include additional capabilities for software development, systems integration, integration testing, and repair services.

Manufacturing Services

The Manufacturing Services Business Unit is specialized in the manufacturing of high quality, complex electronics, and harnesses in low to medium volume for the defense and non-defense markets, including products for the F-35 Joint Strike Fighter aircraft, radar systems, and space power supplies and star trackers.

Electronics for the onboard radar system and the harnesses for connecting the actuators are top priority F-35 programs. Terma has secured contracts for five electronic units for the radar and has to date delivered for the System Development and Demonstration phase and the Low Rate Initial Production-2 and -3 phases. Three different types of advanced harnesses have been delivered and are now qualified for the fighter aircraft. Developing the necessary capabilities and capacity for these programs will be an important focus during the next years, and investments in the manufacturing set-up are also of high priority.

To support the Space Business Area in the Galileo, Small Geo, and BepiColombo programs, investments have been implemented to secure the correct high-level capabilities. A new clean room facility has been established together with investments in the surface mount technology production.

Manufacturing Services continuously strives to improve performance and to be a competitive, flexible, and quick-reaction supply unit. Streamlining and optimization of the supply chains are in focus, and lean programs are running with regard to attaining these improvements.

Business Areas

Terma has supplied SCANTER 4100 radar systems and C-Flex combat management systems for the Royal Danish Navy’s new ocean patrol vessels

Business Areas


Radar Systems

The Radar Systems Business Area designs and delivers advanced radar systems for a range of demanding surveillance and traffic control applications, including coastal surveillance, naval surface and air surveillance, airborne environmental surveillance, critical infrastructure protection, vessel traffic management, and airport surface movement control and guidance. The market outlook is positive as the emphasis on border security, area security, and traffic safety and efficiency is continuing.

The SCANTER radar systems are renowned for their unique capability to detect small and minute targets at long distances and under all weather conditions, making these radars the preferred choice for mission-critical border security and traffic safety applications. The SCANTER radar product portfolio now comprises SCANTER 5000, SCANTER 6000, SCANTER Ground Surveillance Radar (GSR), SCANTER 2001i, SCANTER 2001i Compact, SCANTER 4000, SCANTER 4100, as well as a wide range of high performance antennas.

In 2009, Terma’s success on the Iberian Peninsula continued with sale and delivery of 28 advanced radars for a coastal surveillance system

for the entire mainland Portugal coastline. Further, additional orders for coastal surveillance and vessel traffic management systems in Spain were secured.

The Asia-Pacific region generated strong growth with a breakthrough in maritime applications in Australia, numerous orders comprising radars for traffic control systems in China and South Korea, and naval activities with several navies. Thus, the strategic positioning of Terma with a regional office in Singapore has generated a good return.

A multi-year investment in product development culminated in the introduction of the SCANTER 5000 and SCANTER 6000 series, introducing solid state technology into a cutting-edge range of fully coherent radars with software-defined functionality applicable for advanced surface and air surveillance.

Terma introduced the new SCANTER GSR, ideal for intruder detection in critical infrastructure protection and camp protection systems. It includes an optional, tailored command and control application based on T-Core.

The knowledge and technology of Danish space research and Danish companies within this market are world-class. In recent years, an increasing commercial, scientific, and educational interest has manifested itself. New opportunities have been created for re-energizing the Danish business and scientific activities within the space industry.

Terma contributes with mission-customized software and hardware products as well as services to support a number of in-orbit pioneering European scientific and earth observation missions, such as Rosetta, Mars Express, Venus Express, and CryoSat-2.

Building on this background, Terma has secured significant contracts for Galileo, the future European satellite navigation system which is expected to be operational in 2014. This includes the full portfolio of Terma Space products and services including power supplies, check-out and test systems, and mission control and simulation systems. Terma will develop and deliver the power supplies for the first four Galileo satellites with a good opportunity to secure orders for the delivery of additional satellites when these are procured in 2010 and subsequent years.

Currently, Terma is contracted for the development and delivery of software and hardware systems for numerous ongoing and future European, Canadian, and U.S. satellite missions. Examples of these are BepiColombo with an expected launch in 2013, Galileo with expected launch at the beginning of 2011, Lisa Path Finder with expected launch in 2011, GAIA with expected launch in 2012, the U.S. distributed Sensing Experiment, and the Canadian Sapphire mission.

Furthermore, Terma has entered into a contract with ESA for the man-space ASIM mission. Terma is currently responsible for a scientific and industrial team developing a structure of six cameras to be placed outside the International Space Station. The purpose of the mission is to contribute to the study and understanding of how thunderstorms affect the atmosphere and the climate. Phase B was concluded in late 2009, and phases C and D are expected to start in 2010.

Carsten Jørgensen Senior Vice President

Morten Winterberg Senior Vice President

Space


International Group Locations

Terma North America Inc.

Terma North America Inc., the U.S. subsidiary, is well established as the interface to U.S. customers for all Terma Business Areas.

Terma North America Inc. facilitates the growth of Terma business in the U.S. through a local presence nearby important customers. In addition to established facilities in the D.C. area and in Warner Robins, Georgia, Terma North America Inc. further expanded operations in Fort Worth, Texas, in close proximity to the Lockheed Martin F-35 program headquarters, and a facility in Portsmouth, Virginia, near the U.S. Coast Guard headquarters.

All Business Areas have experienced significant success in the past year, resulting in an increased business base, employee additions, and increased revenue.

The Airborne Systems Business Unit in Warner Robins, Georgia, booked new orders and expanded its traditional customer base by winning competitions to supply equipment to Boeing, Northrop Grumman Corporation, and Lockheed Martin. Additionally, this Business Unit was also successful in securing follow-on business and delivering

on previously booked backlog, increasing the revenue bookings and profitability.

The Aerostructures Business Area is strongly represented with the Fort Worth engineering facility. This office is staffed with highly trained engineering and program management professionals involved in F-35 contracts and will also facilitate future U.S. growth of this Business Area beyond the F-35 program.

Radar Systems continued servicing U.S.-based customers, including the U.S. Coast Guard, U.S. Navy, the FAA, and Department of Homeland Security, and completed installation of the SCANTER 2001 radar system on an experimental U.S. Navy ship used for demonstrating technologies associated with detection and interdiction of smugglers.

An important partnership between Terma and Lockheed Martin’s Sensor Systems Company has co-developed a command and control product for ballistic missile defense applications and resulted in the award of our first contract. Business development activities are further increased as new opportunities for this product have been identified.

Terma B.V., the Dutch subsidiary of Terma A/S, focuses on three prime market areas: space, aircraft survivability equipment, and public safety and emergency (PS&E). The past year has seen significant efforts to expand the role of Terma B.V. in supporting a range of electronic warfare (EW) products and establish a presence in the PS&E arena.

Space activities include in-house turnkey system integration and development specializing in spacecraft test, simulation, and management systems together with the provision of highly specialized consultants to ESA’s European Space Research and Technology Centre in Noordwijk, The Netherlands.

EW products delivered by Airborne Systems to the Royal Netherlands Air Force (RNLAF) require technical support, repairs, modifications, and upgrades. Terma B.V. initiated a dialog with the Logistics Centre Woensdrecht to establish a local support facility. The electronic warfare support facility was handed over to Terma B.V. in the first quarter of 2010 and will come into full operation in the second quarter of 2010. It is the intention to expand the capabilities to include life-cycle support to other EW-related systems operated by the RNLAF and

similar protection systems deployed by other European Participating Air Forces and NATO air forces. Together with Dutch partners, Terma can offer a comprehensive package of services.

We have been able to raise significant awareness and interest within national and regional civil authorities in the strong product family of mission-critical C4i systems - T-Core and T.react. There is potential to exploit these systems as backbones and foundation layers to the existing emergency control room systems. The level of information and communication integration within control rooms is under-developed. The Terma products provide a robust, military strength integration path to address this situation and additionally provide the necessary external data exchange interfaces, thereby offering a step-by-step road map to bring together integrated control rooms in a securely networked environment. The ability to operate these resources in a net-centric manner is an increasingly strong requirement.

Richard Jones Senior Vice President

James (Jim) Brandt President & CEO

Terma B.V.


Accounting Policies

The Annual Report of Terma A/S for 2009/10 has been prepared in accordance with the provisions applying to class C enterprises (large) under the Danish Financial Statements Act. The Consolidated Financial Statements of Terma A/S are consolidated in the Consolidated Financial Statements of the ultimate Parent Company, the Thomas B. Thrige Foundation, Copenhagen.

In the Statement of Income for the Parent Company, tax for the year in subsidiaries has been reclassified and is recognized in profit in subsidiaries after tax. Previously, it was recognized in tax on profit from ordinary activities. The comparatives have been restated. As a result of the change, the profit from ordinary activities before tax in the Parent Company has been reduced by MDKK 2.3 (2008/09: MDKK -6.6).

Accounting policies applied in the preparation of the Annual Report are consistent with those of last year.

Consolidated Financial Statements

The Consolidated Financial Statements comprise the Parent Company, Terma A/S, and subsidiaries in which Terma A/S directly or indirectly holds more than 50 percent of the voting rights or which it, in some other way, controls.

The Consolidated Financial Statements are prepared as a consolidation of the audited financial statements of the Parent Company and subsidiaries, which have all been prepared according to the Group’s accounting policies.

On consolidation, intra-group income and costs, stockholdings, intra-group balances and dividends, and realized and unrealized gains and losses on intra-group transactions are eliminated.

Equity interests in subsidiaries are set off against the proportionate share of the subsidiaries’ fair value of net assets or liabilities at the acquisition date.

Enterprises acquired or formed during the year are recognized in the Consolidated Financial Statements from the date of acquisition. Enterprises disposed of are recognized in the Consolidated Statement of Income until the date of disposal. The comparatives are not adjusted for acquisitions or disposals.

Acquisitions of enterprises are accounted for using the purchase method, according to which the identifiable assets and liabilities acquired are measured at their fair values at the date of acquisition.

Provisions are made for costs related to adopted and announced plans to restructure the acquired enterprise. The tax effect of the revaluation is taken into account.

Any excess of the cost of the acquisition over the fair value of the identifiable assets and liabilities acquired (goodwill), including restructuring provisions, is recognized as intangibles and amortized on a systematic basis in the Statement of Income based on an individual assessment of the useful life of the asset, however, not exceeding 20 years. Any excess of the fair values of the identifiable assets and liabilities acquired over the cost of the acquisition (negative goodwill), representing an anticipated adverse development in the acquired enterprises, is recognized in the Balance Sheet as prepayments and deferred charges and recognized in the Statement of Income as the adverse development is realized. Negative goodwill, not related to any anticipated adverse development, is recognized in the Balance Sheet at an amount corresponding to the fair value of non-monetary assets. The amount is subsequently recognized in the Statement of Income over the average useful lives of the non-monetary assets.

Goodwill and negative goodwill from acquired enterprises can be adjusted until the end of the year following the acquisition.

Gains or losses on disposal of subsidiaries are stated as the difference between the sales amount or disposal amount and the

carrying value of net assets at the date of disposal, including non-amortized goodwill and anticipated disposal costs.

Foreign Currency Translation

Transactions denominated in foreign currencies are translated at the exchange rates at the transaction date. Foreign exchange differences arising between the exchange rates at the transaction date and at the date of payment are recognized in the Statement of Income as financial income or financial costs.

Receivables, payables, and other monetary items denominated in foreign currencies, which are not settled on the Balance Sheet date, are translated at the exchange rates at the Balance Sheet date. The difference between the exchange rates at the Balance Sheet date and at the date at which the receivable or payable arose or was recognized in the latest financial statements is recognized in the Statement of Income as financial income or financial costs.

Upon recognition of subsidiaries that are foreign entities, the statements of income are translated at an average rate of exchange for the month, and the balance sheet items are translated at the exchange rates at the Balance Sheet date. Currency translation differences arising upon translation of foreign subsidiaries’ equity at the beginning of the year to the exchange rates at the Balance Sheet date and upon translation of statements of income from the average rates of exchange to the exchange rates at the Balance Sheet date are recognized directly in the equity.

Translation adjustment of balances with foreign entities which are considered part of the aggregate investment in the subsidiary is recognized directly in the equity. Correspondingly, foreign exchange gains or losses on loans and derivative financial instruments regarded as currency hedging of foreign subsidiaries are recognized directly in the equity.

Accounting Policies


Upon recognition of foreign subsidiaries that are integrated entities, monetary items are translated at the exchange rate at the Balance Sheet date. Non-monetary items are translated at the exchange rate at the date of acquisition or the time of the subsequent revalutation or impairment of the asset. The items in the statement of income are translated at the exchange rate at the date of transaction. However, items derived from non-monetary items are translated at the historical conversion rate of the non-monetary item.

Derivative Financial Instruments

Derivative financial instruments are initially recognized in the Balance Sheet at cost and are subsequently measured at fair value. Positive and negative fair values of derivative financial instruments are included in other receivables and other payables, respectively.

Changes in the fair value of derivative financial instruments designated as and qualifying for recognition as a hedge of the fair value of a recognized asset or liability are recognized in the Statement of Income together with changes in the value of the hedged asset or liability.

Changes in the fair value of derivative financial instruments designated as and qualifying for recognition as a hedge of future assets or liabilities are recognized directly in other receivables or other payables and in the equity. If the future transaction results in the recognition of assets or liabilities, amounts which were previously recognized in the equity are transferred at the cost of the asset or liability, respectively. If the future transaction results in income or costs, amounts which are recognized in the equity are transferred to the Statement of Income during the period in which the hedge affects the Statement of Income.

Changes in the fair value of derivate financial instruments not qualifying for recognition as a hedging instrument are recognized in the Statement of Income on a continuing basis.

Changes in the fair value of derivative financial instruments used for the hedging of net investments in foreign entities are recognized directly in the equity.

Statement of Income

RevenueRevenue comprises the deliveries for the year and the value of construction contracts in process with significant customization.

Revenue from contract work in process with an insignificant degree of customization is recognized in the Statement of Income if delivery and the passing of risk to the customer have taken place. Any discounts allowed are recognized in the revenue.

Construction contracts with significant customization are recognized in the revenue when reaching the stage of completion. Accordingly, revenue corresponds to the sales price of work performed during the year (percentage of completion method).

Production CostsProduction costs comprise costs, including depreciation, amortization, and salaries, incurred in generating the revenue for the year. Such costs include direct and indirect costs for raw materials and consumables, wages and salaries, depreciation of production plant, and other production costs.

Production costs also comprise research and development costs, which do not qualify for capitalization, and amortization and impairment of capitalized development costs.

Production costs also comprise provisions for losses on construction contracts.

Distribution CostsCosts incurred in distributing goods sold during the year and in conducting sales campaigns, etc. during the year are recognized as distribution costs. Also, costs relating to sales staff, advertising,

exhibitions, and depreciation are recognized as distribution costs.

Administrative CostsAdministrative costs comprise costs incurred during the year for the Executive Management and Administration, including costs related to administrative staff, office premises and office costs, and depreciation.

Other Operating Income and CostsOther operating income and costs comprise items secondary to the principal activities of the Group, including gains and losses on disposal of intangibles and property, plant, and equipment.

Profit in SubsidiariesThe proportionate share of the individual subsidiaries’ profit after tax is recognized in the Statement of Income for the Parent Company following elimination of intercompany gains/losses.

Financial Income and CostsFinancial income and costs comprise interests, gains and losses on payables and transactions denominated in foreign currencies, amortization of financial assets and liabilities as well as additions and reimbursements under the tax prepayment scheme, etc.

Tax on Profit for the YearThe Parent Company is subject to the compulsory Danish joint taxation method for the Thrige Holding Group’s Danish subsidiaries. Subsidiaries are part of the joint taxation from the time of the consolidation in the Group’s financial statements and until the time when they are left out of the consolidation.

Thrige Holding A/S is the administrative company for the joint taxation, and as a consequence, it settles all tax payments with the authorities.

The current Danish corporate income tax is allocated by payment of the joint taxation contribution between the jointly taxed companies relative to the taxable income. In this respect, companies with tax loss receive joint taxation

Accounting Policies


contributions from companies which have used this loss to reduce their own tax profit.

The tax for the year, which consists of the current corporate tax for the year, the joint taxation contribution, and change in deferred tax – as a consequence of the reduction in the tax rate – is recognized in the Statement of Income with the portion relating to the profit for the year, and directly in the equity with the portion relating to items directly in the equity.

Balance Sheet

Intangibles

Development Projects in ProcessDevelopment projects in process comprise costs, salaries, and amortization directly or indirectly attributable to the development activities of the enterprise.

Development projects that are clearly defined and identifiable, where the technical utilization degree, sufficient resources, and potential future market or development opportunities in the Group can be established, and where it is intended to produce, market, or use the project, are recognized as intangibles, provided that the cost can be measured reliably, and that there is sufficient assurance that future earnings can cover production costs, sales and administrative costs, and development projects in process. Other development projects in process are recognized in the Statement of Income when incurred.

Capitalized development projects in process are recognized at cost less accumulated amortization/impairments or recoverable amount, if this is lower.

Following the completion of the development work, capitalized development projects in process are amortized concurrently with the sale of the developed products, alternatively on a straight-line basis over the estimated useful life.

Gains and losses on sale of development projects are calculated as the difference between the sales price less selling costs and the carrying value at the time of sale. Gains and losses are recognized in the Statement of Income under other operating income and other operating costs, respectively.

Property, Plant, and Equipment

Land and buildings, plant and machinery, and fixtures and fittings, tools and equipment are measured at cost less accumulated depreciation.

Cost comprises the purchase price and any costs directly attributable to the acquisition until the date when the asset is available for use. The cost of self-constructed assets comprises direct and indirect costs of materials, components, subcontractors, and wages and salaries.

The cost of a total asset is divided into separate elements which are depreciated separately if the useful life of the individual elements varies.

The cost of leases is stated at the lower value of fair value and the present value of the future lease payments. For the calculation of the net present value, the interest rate implicit in the lease or an approximation thereof is used as discount rate.

Depreciation is provided on a straight-line basis over the expected useful lives of the assets. The expected useful lives are as follows:

Buildings 10-50 yearsPlant and machinery 5-10 yearsFixtures and fittings, tools and equipment 3-7 years

Depreciation is recognized in the Statement of Income as production costs, distribution costs, and administrative costs, respectively.

Gains and losses on the disposal of property, plant, and equipment are determined as the difference between

the sales price less disposal costs and the carrying value at the date of disposal. The gains or losses are recognized in the Statement of Income as other operating income or other operating costs, respectively.

Equity Interests in SubsidiariesEquity interests in subsidiaries are measured according to the equity method.

Equity interests in subsidiaries are measured in the Balance Sheet at the proportionate share of the subsidiaries’ net asset values calculated in accordance with the Group’s accounting policies minus or plus unrealized intragroup profits and losses, and plus or minus the remaining value of positive goodwill or negative goodwill, respectively.

Equity interests in subsidiaries with negative net asset values are measured at DKK 0 (nil), and any amounts owed by such subsidiaries are written down if the amount is uncollectible. If the Parent Company has a legal or constructive obligation to cover a negative net asset value which exceeds the amount owed in a subsidiary, the remaining amount is recognized under provisions.

Net revaluation of equity interests in subsidiaries is shown as a reserve for net revaluation according to the equity method under equity to the extent that the carrying value exceeds the cost. Subsidiary dividends that are expected to be adopted prior to the approval of the Parent Company Annual Report are not entered into the reserve for net revaluation. On acquisition of subsidiaries, the purchase method is applied, cf. Consolidated Financial Statements above.

Impairment of assets

The carrying value of intangibles and property, plant, and equipment as well as equity interests in subsidiaries are assessed annually for indications of impairment in addition to amortization and depreciation.

Accounting Policies


If indications of impairments exist, impairment tests are conducted relative to the individual asset or groups of assets, respectively. Assets are written down to the recoverable amount if this is lower than the carrying value.

The recoverable amount of an asset is the higher of the asset’s value in use and its selling price. The value in use is calculated as the present value of the expected net cash flows from the use of the asset or groups of assets and the expected net cash flows from the sale of the asset or groups of assets at the end of the useful life.

Inventories

Inventories are measured at cost in accordance with the FIFO method. Where the net realizable value is lower than the cost, inventories are written down to this lower value. Cost comprises purchase price plus delivery costs.

Finished goods and work in process are measured at cost, comprising the cost of raw materials, consumables, direct wages and salaries, and indirect production costs. Indirect production costs comprise indirect materials and wages and salaries as well as maintenance and depreciation of production machinery, buildings, and equipment as well as factory administration and management. Borrowing costs are not included in the cost.

The net realizable value of inventories is calculated as the sales amount less costs of completion and costs necessary to make the sale, and is determined taking into account marketability, obsolescence, and development in expected sales price.

Receivables

Receivables are measured at amortized cost. Write-down is made to meet expected losses.

Construction ContractsConstruction contracts are measured at the sales price of the work performed. The sales price is measured on the basis of the stage of completion at the Balance Sheet date and total expected income from the individual contract work. When the sales price of a contract cannot be measured reliably, the sales price is measured at the costs incurred or at net realizable value, if this is lower.

The individual construction contract is recognized in the Balance Sheet under either receivables or liabilities, depending on the net amount of the sales price less prepayments. Net assets are constituted by the sum of the construction contracts where the sales price of the work performed exceeds the amount which has been invoiced on account.

Sales costs and costs incurred in securing contracts are recognized in the Statement of Income when incurred.

Prepayments and Deferred ChargesPrepayments and deferred charges, recognized under current assets, comprise costs incurred concerning subsequent fiscal years.

Equity – DividendsDividends are recognized as a liability at the date when they are adopted at the annual general meeting (time of announcement). The expected dividend payment for the year is disclosed as a separate item under equity.

Current Tax and Deferred TaxAccording to the joint taxation method, as the administrative company, Thrige Holding A/S assumes the liability to the tax authorities for the corporate tax of the Danish subsidiaries, concurrently with the subsidiaries paying their joint tax contribution.

Current tax payable and receivable is recognized in the Balance Sheet as tax calculated on the taxable income for the year, adjusted for tax on the taxable income of previous years, and for tax paid on account.

Payable and receivable joint tax contributions are recognized in the Balance Sheet under balances for the Parent Company.

Deferred tax is measured under the balance sheet liability method on all temporary differences between the carrying value and the tax base of assets and liabilities. However, deferred tax is not recognized on temporary differences relative to amortization of goodwill disallowed for tax purposes and other items where temporary differences – excluding acquisitions – have arisen on the date of acquisition, without affecting the net income or taxable income. Under the circumstances where calculation of the tax base can be made according to alternative taxation rules, deferred tax is measured on the basis of the planned use of the asset or settlement of the liability, respectively.

Deferred tax assets, including the tax base of tax loss allowed for carryforward, are recognized under current assets at the expected value of their utilization, either as elimination in tax on future earnings or offsetting against deferred tax liabilities within the same legal tax entity and jurisdiction.

A readjustment of deferred tax relative to performed eliminations of unrealized, intra-group profit and loss will be carried out.

Deferred tax is measured according to the tax rules and at the tax rates applicable in the respective countries at the Balance Sheet date.

Other ProvisionsProvisions comprise anticipated costs related to warranty commitments, losses related to construction contracts in process, restructuring provisions, etc. Provisions are recognized when, as a result of past events, the Group has a legal or a constructive obligation, and it is probable that settlement of the obligation will result in an outflow of Group financial resources.

Accounting Policies


Accounting Policies

Warranty commitments include obligations to implement repair work within the warranty period. Provisions for warranty commitments are measured at net realizable value and recognized on the basis of experience with warranty work. Provisions with an expected maturity of more than one year at the Balance Sheet date are discounted at the average market rate of interest.

Restructuring provisions in acquired enterprises which are adopted and announced no later than at the date of acquisition are included in the determination of the acquisition price and thereby in goodwill or Group goodwill.

If it is propable that the total costs related to a construction contract will exceed the total income, the expected total loss of the construction contract is recognized as a provision.

Financial Liabilities

Amounts owed to mortgage banks and credit institutions are recognized at the date of borrowing at the net proceeds received less transaction costs paid. In subsequent periods, the financial liabilities are measured at amortized cost, corresponding to the capitalized value using the effective interest rate. Accordingly, the difference between the proceeds and the nominal value is recognized in the Statement of Income over the term of the loan.

Financial liabilities also include the capitalized residual lease commitment.

Other liabilities are measured at amortized cost.

Cash Flow Statement

The Cash Flow Statement shows the Group’s cash flows from operating, investing, and financing activities for the year, the year’s changes in cash and cash equivalents as well as the Group’s cash and cash equivalents at the beginning and end of the year.

Cash Flows from Operating ActivitiesCash flows from operating activities are calculated as the Group’s share of the profit adjusted for non-cash operating items, changes in working capital, and corporate tax payable and receivable/joint taxation contribution.

Cash Flows from Investing ActivitiesCash flows from investing activities comprise payments in connection with acquisitions and disposals of enterprises and activities, and acquisitions and disposals of intangibles, property, plant, and equipment, and investments.

Cash Flows from Financing ActivitiesCash flows from financing activities comprise payments to and from the Group’s stockholders and related costs as well as raising of loans and repayment of interest-bearing debt.

Cash and Cash EquivalentsCash and cash equivalents comprise cash reduced by current bank borrowings and short-term, marketable securities which are subject to an insignificant risk of changes in value.

Segment Information

Group revenue has been allocated according to business segments and geographical markets.

Financial Ratios

The financial ratios are calculated in accordance with “Recommendations and financial ratios 2005” of the Danish Society of Financial Analysts. Definitions of the financial ratios appear in Financial Highlights – Consolidated.


Executive Management’s Statement

The Board of Directors and the Executive Management have today discussed and adopted the Annual Report of Terma A/S for the 2009/10 fiscal year.

The Annual Report has been prepared in accordance with the Danish Financial Statements Act.

In our opinion, the Consolidated and Parent Company Financial Statements give a fair presentation of the Group’s and Parent Company’s assets, liabilities, and financial position at 28 February 2010, as well as of the results of the Group’s and the Parent Company’s activities and the Group’s cash flows for the 2009/10 fiscal year.

Further, we consider the Management’s Review to present a fair disclosure of the development in the Group’s and Parent Company’s activities and finances, the result for the year, and the Group’s and Parent Company’s financial position.

We recommend that the Annual Report be approved at the annual general meeting.

Lystrup,21May2010

Executive Management:

Jens Maaløe, President & CEO

Birthe H. Rask, Executive Vice President & CFO

Morten Halskov, Executive Vice President

Board of Directors:

Svend-Aage Nielsen, Chairman

Holger Lavesen, Deputy Chairman

Henrik Stenbjerre

Flemming H. Tomdrup

Bo Laursen

Paul-Werner Johnsen

Executive Management’s Statement

Executive Management

Jens Maaløe President & CEO

Birthe H. Rask

Executive Vice President & CFO

Morten Halskov

Executive Vice President, Corporate Services


For Terma A/S Stockholders

We have audited the Consolidated and Parent Company Financial Statements of Terma A/S for the 1 March 2009-28 February 2010 fiscal year, pages 18-22 and 25-35. The Consolidated and Parent Company Financial Statements include Accounting Policies, Statement of Income, Balance Sheet, disclosures in the Notes of the Group as well as the Parent Company, and the Group’s Cash Flow Statement. The Consolidated and Parent Company Financial Statements are prepared in accordance with the Danish Financial Statements Act.

In connection with the audit, we have read the Management’s Review which is prepared in accordance with the Danish Financial Statements Act, and we have provided our opinion.

Executive Management’s Responsibility

The Executive Management is responsible for the preparation and presentation of Consolidated and Parent Company Financial Statements that give a fair presentation in accordance with the Danish Financial Statements Act. This responsibility includes preparation, implementation, and maintenance of internal controls, which are relevant for the preparation and presentation of Consolidated and Parent Company Financial Statements, which give a fair presentation free from material errors, irrespective of such errors being due to fraud or misstatements, in addition to selection and adoption of appropriate accounting policies and provision of accounting estimates, deemed fair in the circumstances. Further, the Executive Management is responsible for the preparation and presentation of a Management’s Review which contains a

fair presentation in accordance with the Danish Financial Statements Act.

Auditor’s Responsibility and Audit Performed

It is our responsibility to provide an opinion on the Consolidated and Parent Company Financial Statements based on the audit performed. We have conducted our audit in accordance with the Danish auditing standards. These standards require that we live up to ethical requirements and plan and perform the audit with a view to achieving a high degree of certainty that the Consolidated and Parent Company Financial Statements are free from material misstatements.

Auditing includes actions to achieve audit evidence for the amounts and information disclosed in the Consolidated and Parent Company Financial Statements. The selected actions depend on the auditor’s assessment, to include assessment of risk of material misstatements in the Consolidated and Parent Company Financial Statements, irrespective of such errors being due to fraud or misstatements. In the risk assessment, the auditor considers internal controls relevant to the Company’s preparation and presentation of Consolidated and Parent Company Financial Statements, which give a fair presentation with a view to auditing actions appropriate in the circumstances, however, not to express an opinion on the effectiveness of the Company’s internal controls. Furthermore, auditing includes an opinion as to the Management’s adopted accounting policies being appropriate and its accounting estimates fair, and an evaluation of the overall Consolidated and Parent Company Financial Statements presentation.

In our opinion, the audit evidence obtained is sufficient and qualified as a basis for our opinion.

Our audit does not give rise to qualifications.

Opinion

In our opinion, the Consolidated and Parent Company Financial Statements give a fair presentation of the Group’s and the Parent Company’s assets, liabilities, and financial position at 28 February 2010, as well as of the results of the Group’s and Parent Company’s activities and the Group’s cash flows for the 1 March 2009-28 February 2010 fiscal year, in accordance with the Danish Financial Statements Act.

Opinion on the Management’s Review

We have read the Management’s Review in accordance with the Danish Financial Statements Act. We have not taken any further actions in addition to the audit of the Consolidated and Parent Company Financial Statements. In our opinion, the information disclosed in the Management’s Review is in accordance with the Consolidated and Parent Company Financial Statements.

Århus,21May2010

KPMG Statsautoriseret Revisionspartnerselskab

Flemming BrokhattingenState-Authorized Public Accountant

Jes Lauritzen State-Authorized Public Accountant

Independent Auditor’s Report

Independent Auditor’s Report


Notes:Pages29and30

DKK thousand Consolidated Parent Company

Note 2009/10 2008/09 2009/10 2008/09

1, 2 Revenue 1,113,497 1,057,707 995,364 950,900

3 Production costs (937,531) (813,108) (844,191) (726,188)

Gross profit 175,966 244,599 151,173 224,712

3 Distribution costs (101,888) (96,320) (94,654) (97,274)

3, 4 Administrative costs (72,217) (74,593) (57,183) (59,718)

Ordinary operating profit 1,861 73,686 (664) 67,720

5 Other operating income 167 517 167 517

5 Other operating costs (103) 0 (103) 0

Operating profit 1,925 74,203 (600) 68,237

Profit in subsidiaries after tax - - 1,612 831

6 Financial income 528 8,340 1,801 9,407

6 Financial costs (27,243) (22,260) (29,899) (24,800)

Profit from ordinary activities before tax (24,790) 60,283 (27,086) 53,675

7 Tax on profit from ordinary activities 4,984 (18,572) 7,280 (11,964)

Profit for the year (19,806) 41,711 (19,806) 41,711

Proposed profit distribution

Proposed dividends 0 20,000 0 20,000

Reserve for net revaluation according to the equity method - - 1,594 4,171

Profit for the year carried forward (19,806) 21,711 (21,400) 17,540

(19,806) 41,711 (19,806) 41,711

1 March-28 February

Statement of Income



Note 2010 2009 2010 2009

Assets

Non-current assets

Intangibles

Goodwill 0 0 0 0

Completed development projects 100,712 142,364 100,712 142,364

Development projects in process 262,150 158,733 264,247 158,733

8 362,862 301,097 364,959 301,097

Property, plant, and equipment

Land and buildings 225,165 225,448 225,165 225,448

Plant and machinery 44,664 49,817 43,707 47,671

Fixtures and fittings, tools and equipment 17,466 18,704 14,044 14,474

Payment on account and property, plant, and equipment under construction 60,710 1,367 60,710 1,367

9 348,005 295,336 343,626 288,960

Investments

10 Equity interests in subsidiaries - - 64,262 71,207

- - 64,262 71,207

Non-current assets, total 710,867 596,433 772,847 661,264

Current assets

Inventories

Raw materials and consumables 85,160 105,939 85,160 105,939

Work in process 296,918 125,314 280,128 104,671

On-account payments from customers (24,420) (17,362) (24,290) (17,362)

Prepayments to suppliers 6,255 2,819 6,255 2,819

363,913 216,710 347,253 196,067

Receivables

Trade accounts receivable 312,499 368,458 272,718 331,576

11 Construction contracts 46,908 105,957 46,908 105,957

Amounts owed by subsidiaries - - 28,248 38,998

15 Corporate tax receivable 587 1,608 0 316

Other receivables 8,664 13,660 6,657 12,593

13 Deferred tax asset 5,706 6,452 0 0

Prepayments and deferred charges 5,949 13,342 5,949 13,342

380,313 509,477 360,480 502,782

Cash and cash equivalents 3,852 16,246 53 3,200

Current assets, total 748,078 742,433 707,786 702,049

Assets, total 1,458,945 1,338,866 1,480,633 1,363,313

Notes:Pages30,31,32,34,and35

Assets28 February

Balance Sheet



Note 2010 2009 2010 2009

Equity and liabilities

Equity

Capital stock 18,000 18,000 18,000 18,000

Net revaluation according to the equity method - - 2,619 9,564

Profit carried forward 311,513 336,591 308,894 327,027

Proposed dividends 0 20,000 0 20,000

12 Equity, total 329,513 374,591 329,513 374,591

Provisions

Warranty commitments 3,761 2,730 3,761 2,730

13 Deferred tax 89,015 97,338 88,958 97,232

Provisions, total 92,776 100,068 92,719 99,962

Liabilities other than provisions

Long-term liabilities other than provisions

Employee bonds 18,251 10,870 18,251 10,870

Mortgage banks 227,699 195,680 227,699 195,680

14 245,950 206,550 245,950 206,550

Current liabilities other than provisions

Current portion of long-term liabilities 658 627 658 627

Credit institutions 292,837 185,239 292,837 185,239

Prepayments from customers 150,428 153,430 147,170 152,447

Trade accounts payable 51,932 63,820 50,471 62,599

Amounts owed to Parent Company 77 135 77 135

Amounts owed to subsidiaries - - 54,834 56,714

15 Corporate tax payable 442 1,689 0 0

Other payables 294,332 252,717 266,404 224,449

790,706 657,657 812,451 682,210

Liabilities other than provisions, total 1,036,656 864,207 1,058,401 888,760

Equity and liabilities, total 1,458,945 1,338,866 1,480,633 1,363,313

16 Unusual circumstances

17 Contingent liabilities and security

18 Related parties

Notes:Pages33,34,and35

Equity and Liabilities28 February

Balance Sheet


DKK thousand Consolidated

2009/10 2008/09

Profit from ordinary activities before tax (24,790) 60,283

Adjustments:

Depreciation, etc. 36,490 37,862

Reversed provisions for warranty commitments 1,031 2,730

Amortization of development licenses previously transferred to contract work in process 71,453 35,486

Financial items 26,715 13,920

135,689 89,998

Changes in working capital:

Inventories (148,011) (82,737)

Receivables 121,918 (47,531)

Prepayments received (3,002) 33,271

Trade accounts payable and other payables 28,955 63,386

(140) (33,611)

Cash generated from operations (operating activities) before financial items 110,759 116,670

Financial items (26,715) (13,920)

Cash flows from operations (ordinary activities) 84,044 102,750

Corporate tax paid (1,898) (1,495)

Cash flows from operating activities 82,146 101,255

Capitalized development costs (136,376) (149,288)

Acquisition of property, land, and equipment (85,200) (70,194)

Disposal of property, land, and equipment 7 18

Cash flows for investing activities (221,569) (219,464)

Changes in long-term liabilities 39,431 18,807

Dividends paid (20,000) (21,000)

Cash flows from financing activities 19,431 (2,193)

Changes in cash and cash equivalents (119,992) (120,402)

Cash and cash equivalents and credit institutions at 1 March (168,993) (48,591)

Cash and cash equivalents and credit institutions at 28 February (288,985) (168,993)

The Cash Flow Statement cannot be directly derived from the Balance Sheet and the Statement of Income.

1 March-28 February

Cash Flow Statement


2009/10

88.4 %

11.6 %

2008/09

Denmark

Outside Denmark

82.78 %

17.22 %Non-defense

Defense

2009/10

67.07 %

32.93 %

2008/09

69.35 %

30.65 %

Notes

1. Segment information - Revenue

2. Revenue

Consolidated Parent Company

DKK thousand 2009/10 2008/09 2009/10 2008/09

Goods and services 823,693 880,841 705,560 774,034

Construction contracts 289,804 176,866 289,804 176,866

1,113,497 1,057,707 995,364 950,900

3. Costs

Parent Company Board of Directors emoluments and remuneration of the Executive Management 4,002 3,988 4,002 3,988

Wages and salaries 607,297 558,732 533,124 493,342

Pensions and other social security costs 48,147 30,144 37,886 21,800

Other staff costs 4,485 3,893 4,157 3,387

663,931 596,757 579,169 522,517

Average number of full-time employees 1,261 1,183 1,119 1,064

4. Fees paid to auditor appointed at the annual general meeting

Total fees to KPMG, Denmark, can be specified as follows:

Statutory audit 817 865 809 851

Consultancy fees: other assurance engagements 82 96 82 96

Consultancy fees: tax and VAT 315 262 315 254

Other non-audit services 320 375 320 375

1,534 1,598 1,526 1,576

5. Other operating income and costs

Lease income 167 121 167 121

Gain on disposal of non-current assets 0 396 0 396

Other operating income, total 167 517 167 517

Losses on disposal of non-current assets 103 0 103 0

Other operating costs, total 103 0 103 0

6. Financial income and costs

Interest income from subsidiaries - - 1,490 1,076

Interest costs to subsidiaries - - 2,849 2,752


Notes

7. Tax on the profit for the year


DKK thousand 2009/10 2008/09 2009/10 2008/09

Joint taxation contribution/current tax 1,671 3,074 (374) (305)

Adjustment related to previous years 1 (230) 0 (230)

Deferred tax (8,024) 11,916 (8,274) 8,687

Tax on the profit for the year, total (6,352) 14,760 (8,648) 8,152

Specified as follows:

Tax on profit from ordinary activities (4,984) 18,572 (7,280) 11,964

Tax on changes in equity (1,368) (3,812) (1,368) (3,812)

(6,352) 14,760 (8,648) 8,152

8. Intangibles

Consolidated

DKK thousand Goodwill

Completed development

projects

Development projects in

process Total

Cost at 1 March 2009 83,417 329,078 167,680 580,175

Foreign currency translation adjustments (4) 0 0 (4)

Additions 0 4,039 132,337 136,376

Transfer - 37,867 (37,867) 0

Disposals (83,413) 0 0 (83,413)

Cost at 28 February 2010 0 370,984 262,150 633,134

Amortizations and impairments at 1 March 2009 83,417 186,714 8,947 279,078

Foreign currency translation adjustments (4) 0 0 (4)

Amortizations 0 0 0 0

Impairments 0 25,579 0 25,579

Disposals (83,413) 0 0 (83,413)

Transfer 0 8,947 (8,947) 0

Transferred to contract work in process - 49,032 0 49,032

Amortizations and impairments at 28 February 2010 0 270,272 0 270,272

Carrying value at 28 February 2010 0 100,712 262,150 362,862

Parent Company

DKK thousand Goodwill

Completed development

projects

Development projects in

process Total

Cost at 1 March 2009 70,411 329,078 167,680 567,169

Additions 0 4,039 134,434 138,473

Transfer - 37,867 (37,867) 0

Disposals (70,411) 0 0 (70,411)

Cost at 28 February 2010 0 370,984 264,247 635,231

Amortizations and impairments at 1 March 2009 70,411 186,714 8,947 266,072

Amortizations 0 0 0 0

Impairments 0 25,579 0 25,579

Disposals (70,411) 0 0 (70,411)

Transfer 0 8,947 (8,947) 0

Transferred to contract work in process - 49,032 0 49,032

Amortizations and impairments at 28 February 2010 0 270,272 0 270,272

Carrying value at 28 February 2010 0 100,712 264,247 364,959


9. Property, plant, and equipment

Consolidated

DKK thousandLand andbuildings

Plant andmachinery

Fixtures andfittings, tools

and equipment

Payment on account and

property, plant, and equipment

under construction Total

Cost at 1 March 2009 361,501 181,058 96,232 1,367 640,158

Foreign currency translation adjustments 0 (332) (349) 0 (681)

Additions 6,104 11,046 8,707 60,302 86,159

Disposals 0 (1,134) (5,323) (959) (7,416)

Cost at 28 February 2010 367,605 190,638 99,267 60,710 718,220

Depreciation and impairments at 1 March 2009 136,053 131,241 77,528 0 344,822

Foreign currency translation adjustments 0 (184) (91) 0 (275)

Depreciation and impairments 6,387 15,985 9,643 0 32,015

Disposals 0 (1,068) (5,279) 0 (6,347)

Depreciation and impairments at 28 February 2010 142,440 145,974 81,801 0 370,215

Carrying value at 28 February 2010 225,165 44,664 17,466 60,710 348,005

Depreciated over 10-50 years 5-10 years 3-7 years

Parent Company

DKK thousandLand andbuildings

Plant andmachinery

Fixtures andfittings, tools

and equipment

Payment on account and

property, plant, and equipment

under construction Total

Cost at 1 March 2009 283,202 176,254 86,802 1,367 547,625

Additions 6,104 11,030 7,586 60,302 85,022

Disposals 0 (1,134) (5,211) (959) (7,304)

Cost at 28 February 2010 289,306 186,150 89,177 60,710 625,343

Depreciation and impairments at 1 March 2009 57,754 128,583 72,328 0 258,665

Depreciation and impairments 6,387 14,928 7,972 0 29,287

Disposals 0 (1,068) (5,167) 0 (6,235)

Depreciation and impairments at 28 February 2010 64,141 142,443 75,133 0 281,717

Carrying value at 28 February 2010 225,165 43,707 14,044 60,710 343,626

Depreciated over 10-50 years 5-10 years 3-7 years

Notes


11. Construction contracts


DKK thousand 2010 2009 2010 2009

Value of work performed 104,748 149,654 104,748 149,654

Invoiced on account (57,840) (43,697) (57,840) (43,697)

Construction contracts at 28 February 46,908 105,957 46,908 105,957

Name Registered office Ownership Capital stock

Terma Ejendomme Skive A/S Århus, Denmark 100 % DKK 1,150 thousand

Terma GmbH Darmstadt, Germany 100 % EUR 51 thousand

Terma B.V. Leiden, The Netherlands 100 % EUR 750 thousand

Terma S.r.l. in liquidation Besozzo, Italy 100 % EUR 10 thousand

Terma North America Inc. Delaware, USA 100 % USD 150 thousand

Terma Singapore Pte. Ltd. Singapore, Singapore 100 % SGD 100 thousand

10. Equity interest in subsidiaries

DKK thousand

Cost at 1 March 2009 51,699

Disposals during the year 0

Additions during the year 0

Cost at 28 February 2010 51,699

Net revaluations at 1 March 2009 19,508

Translation adjustment at the beginning of the year (1,181)

Dividends paid (7,376)

Profit for the year 1,612

Net revaluations at 28 February 2010 12,563

Carrying value at 28 February 2010 64,262

Notes


12. Equity

Consolidated

DKK thousand 2009/10 2008/09

Equity at 1 March 374,591 440,508

Dividends paid (20,000) (21,000)

Profit for the year carried forward (19,806) 21,711

Proposed dividends 0 20,000

Annulment of own stock 0 (75,188)

Translation adjustment relating to foreign entity (1,163) 0

Changes in value of hedging instruments, etc. (after tax) (4,109) (11,440)

Equity at 28 February 329,513 374,591

Consolidated

DKK thousand Capital stock

Net revaluation according to the

equity method

Profit carried

forwardProposed dividends Total

Equity at the beginning of the year 18,000 - 336,591 20,000 374,591

Dividends paid - - - (20,000) (20,000)

Profit for the year carried forward - - (19,806) 0 (19,806)

Translation adjustment relating to foreign entity - - (1,163) - (1,163)

Changes in value of hedging instruments, etc. (after tax) - - (4,109) - (4,109)

Equity at year-end 18,000 - 311,513 0 329,513

Parent Company

DKK thousand Capital stock

Net revaluation according to the

equity method

Profit carried

forwardProposed dividends Total

Equity at the beginning of the year 18,000 9,564 327,027 20,000 374,591

Dividends paid - - - (20,000) (20,000)

Dividends received from subsidiaries - (7,376) 7,376 - 0

Profit for the year carried forward - 1,594 (21,400) 0 (19,806)

Translation adjustment relating to foreign entity - (1,163) - - (1,163)

Changes in value of hedging instruments, etc. (after tax) - - (4,109) - (4,109)

Equity at year-end 18,000 2,619 308,894 0 329,513

Capital stock consists of: 1 stock at DKK 18 million The capital stock has been reduced by DKK 2 million in connection with annulment of own stock during the fiscal year 2008/09. The capital stock has remained unchanged during the preceding three years,

Notes


13. Deferred tax


DKK thousand 2009/10 2008/09 2009/10 2008/09

Deferred tax at 1 March 90,886 80,600 97,232 88,545

Foreign currency translation adjustments 447 (1,630) 0 0

Adjustment for the year (8,024) 11,916 (8,274) 8,687

Deferred tax at 28 February 83,309 90,886 88,958 97,232

Recognized as follows:

Deferred tax asset (5,706) (6,452) 0 0

Deferred tax 89,015 97,338 88,958 97,232

83,309 90,886 88,958 97,232

Deferred tax relates to:

Intangibles 90,582 73,420 90,582 73,420

Property, plant, and equipment 8,866 5,724 8,611 5,724

Current assets (1,647) 66,107 (1,704) 66,001

Liabilities other than provisions (3,706) (579) (2,422) (579)

Tax loss carryforward (10,786) (53,786) (6,109) (47,334)

83,309 90,886 88,958 97,232

14. Long-term liabilities other than provisions

Consolidated

DKK thousand Long-term

liabilities

Current shareof long-term

liabilities

Loans outstanding after 5 years

Employee bonds 18,251 0 0

Mortgage banks 227,699 658 225,313

245,950 658 225,313

Parent Company

DKK thousand Long-term

liabilities

Current shareof long-term

liabilities

Loans outstanding after 5 years

Employee bonds 18,251 0 0

Mortgage banks 227,699 658 225,313

245,950 658 225,313

Notes


15. Corporate tax payable


DKK thousand 2009/10 2008/09 2009/10 2008/09

Corporate tax payable at 1 March 81 (2,816) (316) 0

Adjustment related to previous years 1 (230) 0 (230)

Tax for the year/joint taxation contribution 1,671 3,074 (374) (305)

Corporate tax paid during the year (1,997) (166) 523 0

Transferred to inter-group balances 99 219 167 219

Corporate tax payable at 28 February (145) 81 0 (316)

Recognized as follows:

Corporate tax receivable (587) (1,608) 0 (316)

Corporate tax payable 442 1,689 0 0

(145) 81 0 (316)

16. Unusual circumstances

As described in the Management’s Review, the profit before tax is affected significantly by the recognition of expected amended preconditions in the contract entered into between the Danish Government and Terma in 2008 for the supply of control rooms for the Danish emergency preparedness network SINE.

17. Contingent liabilities and security


DKK thousand 2010 2009 2010 2009

Contingent liabilities

Lease liabilities (operating leases) falling due within five years 14,463 15,306 6,471 5,064

Lease guarantee in the period until 31 March 2014. Annually DKK 4.2 million 16,400 20,600 16,400 20,600

The Group’s Danish companies are jointly liable for joint registration of VAT

Security

The following assets have been provided as security for mortgage banks:

Carrying value of land and buildings 225,165 225,448 225,165 225,448

Terma A/S – acting as the Parent Company – has issued a letter of intent to third parties in connection with the establishment of credit facilities for its subsidiaries at a total amount of DKK 24,473 thousand

18. Related parties

Terma A/S is a wholly owned subsidiary of Thrige Holding A/S, which is wholly owned by the Thomas B. Thrige Foundation.

Terma A/S’ related parties exercising significant influence comprise the Board of Directors, the Executive Management, managerial staff, and their family members. Further, related parties comprise companies in which the above-mentioned persons have substantial interests.

Apart from the inter-group transactions which have been eliminated in the consolidated financial statements and the usual remuneration and emoluments, no transactions have been concluded relative to the Board of Directors, Executive Managers, managerial staff, major stockholders, or other related parties.

Notes

Terma A/SHovmarken 48520 LystrupDenmarkT +45 8743 6000F +45 8743 6001Reg. no. 41881828

Vasekær 122730 HerlevDenmarkT +45 8743 6000F +45 8743 6001

Fabrikvej 18500 GrenaaDenmarkT +45 8779 5200F +45 8779 5201

Terma B.V.Schuttersveld 92316 XG LeidenThe NetherlandsT +31 71 524 0800F +31 71 514 3277Reg. no. 28083640

Vliegbasis WoensdrechtKooiweg 40-41 Building 1014631 SZ HoogerheideThe Netherlands T +31 71 524 0800F +31 71 514 3277

Terma GmbHEuropahausEuropaplatz 564293 DarmstadtGermanyT +49 6151 86005-0F +49 6151 86005-99Reg. no. HRB 7411

Terma North America Inc.2461 South Clark StreetCentury Two, Suite 810Arlington, VA 22202USAT +1 (703) 412 9410F +1 (703) 412 9415 Reg. no. 3797996 (Delaware)

Parkway Commons 601 A Russell Parkway Warner Robins, GA 31088 USA T: +1 (478) 923 7233 F: +1 (478) 923 7360

University Center I 1300 South University Drive 3rd floor, Suite 306 Fort Worth, TX 76107 USA T: +1 (817) 332 7770 F: +1 (817) 332 7773

510 Independence Pkwy, Suite 600Chesapeake, VA 23320 USA T: +1 (757) 395 0215 F: +1 (757) 436 3867

Terma Singapore Pte. Ltd.3 International Business Park#04-31 Nordic European CentreSingapore 609927T +65 6561 0060F +65 6562 0060Reg. no. 200806753D

[email protected]

Terma A/S Annual Report 2009/10 · Annual Report 2009/10 5 March 2009 Terma signed a contract with...

Documents

Transcript of Terma A/S Annual Report 2009/10 · Annual Report 2009/10 5 March 2009 Terma signed a contract with...