Blom ASA Annual Report 2010

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2010 ANNUAL REPORT

description

Blom ASA Annual Report 2010

Transcript of Blom ASA Annual Report 2010

Page 1: Blom ASA Annual Report 2010

20102010annual reporTannual reporT

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Table of conTenTs

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P. 4 -7 HigHligHts 2010

P. 8 CEO’s REPORt

P. 10-11 COmPany VisiOn and stRatEgy

P. 12-14 abOut blOm

P. 15 blOm infORmatiOn sERViCEs’ PROduCt family

P. 16 blOm’s ObliquE imagERy saVE liVEs

P. 17 usE Of maP data in PubliC sECtOR

P. 18-22 maRkEts

P. 23-27 finanCial analysis

P. 29-33 bOaRd Of diRECtORs' REPORt

P. 35-39 blOm gROuP aCCOunts

P. 41-79 nOtEs tO tHE blOm gROuP aCCOunts

P. 81-84 blOm asa aCCOunts

P. 86-95 nOtEs tO tHE blOm asa aCCOunts

P. 96-97 auditOR's REPORt

P. 98 bOaRd Of diRECtORs’ REsPOnsibility statEmEnt

P. 100-104 CORPORatE gOVERnanCE

P. 105 bOaRd Of diRECtORs

P. 106-107 infORmatiOn On sHaREs in blOm

P. 108 blOm OffiCEs

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2010 highlighTs

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2010 highlighTs

Sales turnover:Operating revenues 619 177 736 901 821 684 1 077 262 835 029 Results: Ebitda -45 840 92 306 109 308 521 925 159 230Ebit -428 218 -53 832 27 968 458 260 100 315Ebt -559 019 -93 960 17 768 412 264 70 359net profit/loss for the year -564 957 -83 012 13 302 398 566 62 675 Capital: Current assets 455 756 704 592 704 878 800 268 587 375non-current assets 352 537 709 003 837 540 686 984 838 061Current liabilities 636 009 326 723 418 158 358 042 545 944non-current liabilities 64 432 389 342 268 964 305 292 506 332Equity 107 853 697 530 855 296 823 918 373 160balance sheet total 808 294 1 413 595 1 542 418 1 487 252 1 425 436 Margins: net operating margin (%) -69.16 -7.31 3.40 42.54 12.01net profit margin (%) -91.24 -11.26 1.62 37.00 7.51 Profitability: Return on total assets (%) -56.55 -9.03 1.85 31.47 9.12Return on equity (%) -140.30 -10.69 1.10 66.59 22.28 Financial strength: Equity ratio (%) 13.34 49.34 55.45 55.40 26.18 Liquidity: Current ratio 0.72 2.16 1.69 2.24 1.08acid test ratio 0.47 1.35 1.11 1.71 0.75 Key figures per share: Earnings -13.91 -2.04 0.33 9.56 1.81Cash flow -4.50 1.55 2.33 11.08 3.51dividend 0.00 0.00 0.00 0.00 0.00

Ordinary net profit/loss Profit/loss before tax (Ebt) – taxes Cash flow net profit/loss for the year + ordinary depreciation Net operating margin Operating profit/loss (Ebit) x 100 / net operating revenues Net profit margin net profit/loss for the year x 100 / net operating revenues Return on total assets (Profit/loss before extraordinary items + financial expenses) x 100 / average total assetsReturn on equity net profit/loss for the year x 100 / average equity Equity ratio Equity x 100 / total assets Current ratio Current assets/current liabilities Acid test ratio (liquid resources + financial investments + debtors) / current liabilities

* 2008 adjusted for documentation irregularities in connection with the sales turnover in blom sistemas geoespaciales.

Key figures group

IFRS2009

IFRS2008*

adjusted

IFRS2007

IFRS2006

IFRS2010

(amounts in nOk 1000)

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2010 highlighTs

2010 HigHLigHTs

REVENUES AND EARNINGS IN 2010• the year 2010 has been marked by continued weak macro-economic factors in many of the markets

where blom operates.• sales revenue of nOk 619 million, Ebitda of nOk -46 million• the profit includes a charge of nOk 356 million for the write-down of non-current assets, related

primarily to goodwill and assets associated with the Pictometry agreement.• there is also a charge of nOk 75 million for provisions for potential losses on inventories and trade

receivables, as well as potential claims from customers as a result of the uncertainty associated with the Pictometry agreement.

• Enhanced and optimised operations, including restructuring of the company’s operating units in order to form the basis for a profitable operation.

GEO ENGINEERING SERVICES • sales revenue of nOk 501 million.• blom was awarded a strategically important contract in italy through its new partner telaer sta for

the delivery of airborne and satellite-based data information to the governmental agency (agEa) in italy. the estimated value of the contract is nOk 125 million for the delivery of airborne and satellite-based data and services for use in national agriculture and regional forestry areas in italy.

• blom signed a strategically important framework agreement valued at nOk 11 million with the french marine Protected areas agency and marine natural Park of iroise for a coastal survey in france.

• blom was awarded a contract valued at nOk 20 million in mongolia for the establishment of processes to make the registration of property in mongolia more efficient in both the public and private sectors.

• blom was awarded a contract valued at EuR 2.8 million by the albanian government for the registration of property rights in albania. this project has been financed by the World bank (imf).

• blom signed a framework agreement in italy for the delivery of laser data, aerial photos and orthophotos.

• blom and kongsberg satellite services have entered into strategic cooperation for the purpose of developing and delivering geographic information based on satellite and aerial data combined with blom’s existing databases. the partners will develop services for forest monitoring as part of rainforest conservation efforts.

• blom was awarded a contract for aerial triangulation and mapping services in a number of municipalities in belgium.

INFORMATION SERVICES• sales revenue of nOk 118 million in 2010.• the company continued to reorganise and build up its own sales force in the bis segment.• blom and microsoft renewed and extended their contract valued at usd 10-14 million.• blom signed an agreement to sell technology rights to ndrive.• blom entered into a contract with the serbian authorities for the delivery of vertical and oblique

digital images of 3,200 km2, which covers 17 municipalities.• blom signed a contract with fortress for the use of oblique images in the real estate brokerage

industry in norway and sweden.• blom signed a contract with klP for the use of oblique images in the insurance industry in norway.• dispute between blom and Pictometry regarding licence agreement.

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2010 highlighTs

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revenue 2009 – 2010 (amount in nOk million)

bgEs bis

800

900

1000

700

600

500

400

2009

2009

2010

300

200

737

501

618 118

619

100

0

eBiTDA 2009 – 2010(amount in nOk million)

100

80

2010

60

0

40

-20

20

-40

-60

-46

92

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ceo's report

Ceo's reporT

blom has put a very challenging period be-hind it. the year 2010 has been marked by a major change in our framework conditions. the debt burden of countries in Europe and the subsequent reduction in their investment capacity has featured prominently in the news, followed by a

significantly lower demand for our engineering services in some instances from our formerly strong customers with links to central and local government. this has resulted in a reduction in volumes, which has in turn resulted in lower margins for the deliveries we have made.

the company has implemented measures to meet these changing conditions and made cost adjustments and changes in the organisation in order to adapt to potentially lower demand in the future. in spite of the extensive reorganisation, the company has retained, at the same time, its flexibility to handle larger volumes in the future. in 2010 our revenues totalled nOk 619 million, and our Ebitda margin was –7.4 per cent.

in addition to striving to establish a better cor-porate operating structure in 2010, we have also focused on internal communication and closer cooperation across national borders, with the aim of increasing productivity and optimal exploi-tation of our resources.

the company has been impacted more than expected by the economic decline in Europe. both revenues and sales were weaker than was anticipated in the company’s budgets.

the company has, however, made a focused effort in accordance with the long-term strategy that has been established for our two respective business areas, and has reached important goals for the year 2010. blom is still the leading and the largest company in Europe in its field. Our employees possess unique expertise and expe-rience, which enables the company to deliver innovative products, services and solutions of high quality adapted to the commercial solutions demanded by the market at any given time.

We can now deliver updated databases for a number of products ranging from nationwide orthophotos to advanced 3d urban models and oblique images through blomuRbEX™. We are comfortable that the substantial investments we have made in our databases and server techno-logy will form the basis for satisfactory long-term earnings in this business area.

in spite of the fact that 2010 has been a chal-lenging year, the long-term creation of value for our shareholders has always been in focus. We strongly believe that the company’s leading position in Europe, combined with our strong resource base and our ability to innovate, will form the foundation for higher revenues and better margins in 2011.

i would like to take this opportunity to thank all my colleagues for their great efforts throughout the year that has passed, and we are looking for-ward to continued good cooperation in the years to come. in 2011 we will increase our focus on development of the expertise represented by each individual, which will in turn form a founda-tion for strengthening the company’s long-term creation of value.

yours sincerely dirk

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blom inTroducTion

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vision and strategy

vision AnD sTrATegy

VISIONblom will be a market leader in geographic information through innovation, technology and competence. blom helps its customers deliver the best possible services that benefit people where they live, work and travel.

GOALSblom aims to be an established, recognised international company with a continuous market-oriented focus on innovation and development of the company’s assets. blom will strengthen shareholder value through achieving profitable growth by the development of attractive customer- oriented solutions, based on full ex-ploitation of the company’s resources and strong competence.

• the company will produce and supply geograp-hic information and geographic information systems for the public and private markets.

• the company's primary markets are in Europe, but defined projects will be carried out world-wide.

• growth and increased profitability will be ac-complished through organic growth, expansion in existing and new markets, acquisitions, and structural measures.

• Profitability will be continuously improved through the development and sale of innovative and scalable solutions, as well as continuous efficiency improvement measures.

• the group will be organised at all times so that the synergy potential can be fully exploited for increased productivity and cooperation bet-ween the companies.

• the business will be managed in an ethically and socially responsible manner. the company will have a good reputation with a strong environmental and well-defined profile.

STRATEGyimportant measures for achieving our goals are as follow:

Marketblom shall continuously develop its existing markets and focus at the same time on expan-sion into new markets. Over 90 per cent of the company’s sales revenue and growth is from countries outside norway, and the company wants to make sure that this trend continues. nearness and a close dialogue with customers are necessary to ensure growth and customer satisfaction, and blom continuously seeks to develop its sales and marketing organisation so that it can meet the needs of the customers in an efficient manner.

blom works actively in markets through alliance partners. strategic alliance building is essential for development of the markets and continued growth.

blom wins contracts and market shares through a good reputation by continuously delivering high quality products and services with a high level of precision. the company actively seeks to maintain its strong position. in addition, the com-pany will continue to ensure expansion in exis-ting and new markets through the development of innovative and unique products and services.

Acquisitions and structural changesacquisitions and structural changes are a signifi-cant part of our growth strategy. the company will continue to work actively to increase growth and shareholder value through structural chan-ges. the goal of acquisitions is to gain access to new markets and new technology and to supple ment our range of products. a continuous development of the company’s market position is completely key to the execution of structural changes.

Competence and innovationknowledge, competence and experience are blom’s most important competitive advantages.

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vision and strategy

a continuous development of these parameters is completely essential if the company is to meet its growth targets through continuous improve-ment and innovation. blom attaches importance to the development of competence by offe-ring its employees attractive and challenging tasks. the company continuously develops its products, services and databases through the competence, experience and innovative capacity of its employees.

Product and technology developmentthe development of technology and innovation are key to blom’s product strategy, and the company invests around 10 per cent of its sales revenue annually in the development of pro-ducts, services and databases. this applies to all market segments and product areas. Product de-velopment is financed both by the company and customers, and it will always be the needs of the market that determine our priorities and invest-ments. blom's product development entails the use of new technology for the collection and processing of geographic information, establish-ment of new databases and adding value to the data that the company collects through aerial photos and laser scanning of terrain and cities.

Social responsibility and ethicsthe group actively seeks to follow the business ethical guidelines associated with social respon-sibility and the external environment. these are fundamental elements for the development of a sustainable and profitable business culture where the needs of the employees are also taken into consideration.

Financial strategythe company attaches importance to solid and profitable growth that provides financial free dom. the financing of growth and struc-tural changes shall be based primarily on the company’s earnings and the liberation of capital. the company strives to observe the accounting guidelines in all the countries where it operates, and it is a goal to continuously improve predicta-bility and reduce risk.

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abouT blom

BLOM FACTS:

• 1093 employees (as of 31 December 2010)

• Head office in oslo, norway• subsidiaries in norway, sweden,

Denmark, finland, germany, uK, italy, spain, and romania

• offices in france, the netherlands, ukraine, Czech republic, Bulgaria, Moldova, Hungary, Azerbaijan, panama and portugal

• production units in romania and indonesia

• operates 4 helicopters and more than 20 aircrafts

• established in 1954• Listed on oslo stock exchange

since 1988• sales revenue of noK 619 million

in 2010

data products. blom is building up a network of partners who create solutions and services for all types of customers and users ranging from professional solutions for engineering, safety, monitoring, etc., to handheld terminals such as smart phones for navigation and gaming con-soles.

blom delivers data, data models and solutions to local government, central government, trade and industry and the consumer market, and enables its customers and partners to create applications based on the company’s geo server technology blomuRbEX™ and other applications and servi-ces.

GEO ENGINEERING SERVICES’ PRODUCTS AND SERVICES Photography and laser scanning from

aircraft and helicopters form the foundation for the company’s products and services within geo Engineering services. With aircraft stationed at bases throughout Europe, the company can

ABouT BLoM

The company produces and develops unique European databases of images, 3D models and map data, as well as enabling our customers to access this content through our innovative online and off-line applications & services.

the demand for advanced and high quality geographical information is growing rapidly. blom has a strong position in the digital map data market today, and aims at becoming the most innovative and preferred service provider of on line geographic information in Europe. today blom is the largest company in Europe for airbor-ne collection of geographic referenced informa-tion. blom has gone from being a traditional map company focusing on the collection and proces-sing of map data to a leading driving force in the development of new technologies and solutions related to geographic information as a tool and decision-making basis. Examples here include solutions and tools for urban and regional plan-ning, engineering, monitoring and maintenance of major infrastructure facilities, navigation, 3d modelling, and forest and coastal monitoring.

in recent years blom has made several im-portant strategic moves in light of the rapidly growing market within geographic information. While blom earlier collected and processed geo-graphic information based on specific projects or customer assignments, the company has now built up a large database of geospatial content to which the company holds the iPR. this enables multiple sales of the data collected and creates a more scalable business model. in addition, blom develops solutions, applications and products based on this content and that of third parties to offer a complete solution to our customers.

blom has created a unique geo server platform – blomuRbEX™ – for online access to our content and that of our partners, offering a distribution and sales channel for the company’s geospatial

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abouT blom

AIRCRAFT RESOURCES: Company’s resources in the air include:

• 16 aircrafts owned by the company: o 1 Lear Jet 25Co 1 CAsA 212Co 1 rockwell Commander C690o 1 piper pA 31-350 Chieftain navajoo 5 piper pA 31-310 navajoo 4 partenavia p68o 2 Cessna p172o 1 Cessna 402

• 4 additional long-term leased aircrafts • 4 leased helicopters

SENSOR RESOURCES: The company’s state-of-the-art fully digital cameras and sensors include:

• 4 uCXp cameras• 4 uCD cameras• 2 ADs40 cameras• 4 ALTM gemini laser scanners• 1 ALTM pegasus HD400 laser scanner• 1 ALs60 laser scanner• 5 Topeye laser scanners• 1 Hawkeye laser scanner

quickly deploy to any relevant area for photo-graphy and scanning. the company’s engineers have developed a number of map products and data models based on aerial photography and laser scanning by means of the latest digital technology for photography and laser techno-logy and advanced data modelling. the areas of application for these products include 3d visualisations, volume calculations for the civil engineering and construction industry, growth calculations for forest management, assessment of coastal erosion, flood calculations and plan-ning in connection with the establishment and maintenance of major road networks, railways, pipelines and transmission line routes.

INFORMATION SERVICES’ PRODUCTS AND SERVICESWith blomuRbEX™ being fully opera-

tional, the company provides geographic data as a service. more and more users of geographic information and data models in public adminis-tration and private enterprises are now seeing the benefit of avoiding the management and collection of data themselves. blom provides online access to images, 3d models and other geographically referenced data with a high level of service quality and safety. in addition, it is guaranteed that the most up-to-date images and models with a change history are available to the users.

information services is also continuing to develop its solutions for navigation and location-based services aimed at the consumer market. blom’s navigation solutions enable, for example, navigation in high-resolution oblique aerial photos and 3d models, as well as online search services linked to corresponding images and models. the new solutions enable users to get an overview of their surroundings and the local service offerings, for example, by a couple of keystrokes on their mobile phone, or other hand-held application.

the market for mobile internet and the use of navigation and location-based services shows

strong growth. the moves that blom has made in recent years makes the company well positio-ned to be a central player in this development.

BLOM’S DATABASES blom focuses on the development of its own, unique databases. the largest

database the company currently possesses is the library of oblique aerial photos, blom-ObliquE™, which covers over 1,100 city areas in Europe. Oblique digital aerial cameras enable objects in the images, such as buildings, to be viewed from an angle, as well as from directly above. the aerial photos in the database have a very high degree of detail and are updated

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abouT blom

regularly. in addition, the company has crea-ted approximately 400 3d models of cities all over the world, blom3d™, based on, among other, the high-resolution oblique aerial imagery. furthermore, the company possesses a number of other databases.

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blom information services’ product family

BlomPEDESTRIAN™ – different urban elements modeled for use with pedestrian navigation applications.BlomLANDMARKS™ – High-resolution 3d models of specific signature buildings or objects.

BlomORTHO™ – blom ortho imagery products, coverage includes high resolution imagery of urban areas within Western Europe and national coverage currently available in italy, denmark and the netherlands.

BlomHISTORICAL™ – georeferenced vertical imagery historical aerial imagery, dating back to the 1940s.

During first half of 2011, we will also introduce the following new products:

BlomWEB™ Viewer – a COts (Commercial, Off-the shelf) web based application framework that can be easily deployed by our customers, integrating all the functionality offered by our different aPi’s and sdk’s, including 3d.

BlomDESKTOP™ Viewer – a COts (Commer-cial, Off-the shelf) desktop application that can be easily deployed by our customers, integrating all the functionality offered by our different aPi’s and sdk’s, including 3d.

both these viewer applications will incorporate the ability to view, purchase and download blom content from our blomuRbEX™ platform in future releases.

during 2011, the objective is to enhance and evolve our product offering to meet our custo-mers’ requirements, growing in the value chain and enabling blom to offer an end-to-end solu-tion that ranges from data acquisition to end user applications and services.

BLoM inforMATion serviCes (Bis) proDuCT porTfoLio

the bis product range is based on a mix of blom iPR content, third party content and blom technology. the blom product range has been developed to maximize the different pos-sible usage of geospatial content within a large number of different markets. unlike our tradi-tional project-based business, bis is primarily focused on offering products in a licensed based business model.

The product range we offer is currently comprised of:

BlomURBEX™ – an online geoserver, offering access to blom and partner content via mobile and desktop aPi’s and sdk’s, together with a selection of gis plug-ins.

BlomURBEX 3D™ – an online 3d model service that offers access to blom3d™ models via aPi, sdk or through our proprietary viewer techno-logy.

BlomOBLIQUE™ – georeferenced Oblique image library, supplied with a desktop viewer, gis plug-ins or via the blomuRbEX™ server.

Blom3D™ – blom 3d models, supplied as different layers or components:

BlomLOD1™ – basic box 3d modelBlomLOD2™ – blOd1 + roof geometriesBlomLOD3™ – blOd2 + generic, pattern based texturesBlomLOD4™ – blOd2 + photorealistic textures from oblique imagery

BlomNAVIGATION™ – Road attributes and urban elements for use in vehicle navigation apps.

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use of blom’s oblique imagery helps save lives

BlomOBLIQUE™ integrated in the SIAMU architecture.

can easily obtain vital information such as roof type, or structural composition of properties and buildings. as a result, blomObliquE™ helps save time, resources, and, most importantly, lives.

the technology provided by blom to accompany the blomObliquE™ product is easy-to-use, whether for preplanning scenarios in important buildings or locations, searching alternative water sources en route to an emergency, or other tasks where detailed visual information can help improve response time and efficiency for fire brigades.

use of BLoM’s oBLique iMAgery HeLps sAve Lives

blom’s unique oblique aerial imagery, blom-ObliquE™, currently provides great value to the fire and emergency services throughout Europe.

Oblique aerial imagery allows the users to view relevant properties from up to 12 different views before physically arriving on a scene. in addition, the oblique angle enables you to see all details in an image, such as fire hydrants, manholes, power lines, intersections, doors, and windows, in stunning clarity.

the technology behind the custom viewer pro-vides the user with the ability to measure the length of a hosepipe between the fire hydrant and the building, predict the size of a ladder to reach a specific floor plan, and orientate in the imagery, to a degree not previously possible with traditional aerial photography. by combining blom’s oblique aerial imagery with existing tradi-tional maps (vector datasets), users can leverage their geographic information even further.

siamu, the organization in charge of 112 in brussels, in belgium, is a very successful exam-ple of a user of blom’s oblique aerial imagery. siamu have taken the blomObliquE™ pro-duct and have included it as a new integrated key component in the daily workflow within the brigade. in 2010, siamu was an award winner at the 112 awards Ceremony organized by the EEna (European Emergency number associ-ation) for the use of the blomObliquE™ ser-vice in the emergency services industry.

blomObliquE™ imagery is used in all services provided by siamu; by call center and interven-tion teams for better coordination during an incident, by prevention units to prepare visits in the field and by the prediction departments in order to prepare the emergency plan on high risk areas, such as schools and industrial sites. users

ABOUT SIAMU

The siAMu is the service d’incendie et d’Aide Médicale urgente or fire Brigade and emergency Medical service of the Brussels-Capital region which repre-sents 1.400.000 people during the day and 1.000.000 inhabitants during the night. Almost 1,000 professional fire-fighters and 150 administrative workers provide emergency services in Brussels.

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use of map data from blom for public sector

ted fl ooding as we have experienced in 2010 indicates the need for higher volumes as well as more detailed fl ood-maps and digital terrain models.

Documentation for various Eu-regulations which develop further to ensure environmental issues, problems with respect to food security and other important cross-border issues ine-vitably leads to an increasing demand for high quality geo-referenced data.

many regions outside Western-Europe already have a high demand for basic infrastructure, e.g. water and waste lines, road and rail construction and maintenance of roads and power lines. this is also representative of many Eastern-European countries whose development of infrastructure is lagging decades behind the level of Western-Europe. blom sees an increasing number of public tenders in this region, which is a result from increased funding from the Eu and the World bank. blom has decades of experience and a robust foothold in this region which, toge-ther with the increased demand, gives blom a good platform for future growth.

Economies in south and Central america experi-ence signifi cant growth which also increases the investment in infrastructure and thereby also the demand for geographic information. blom has long standing experience and a strong reference list in this region which gives a healthy founda-tion for future expansion.

use of MAp DATA froM BLoM for puBLiC seCTor

the public sector represents the largest client base for blom. 2010 has been marked by a continuing weak economy in a number of coun-tries in which we have a signifi cant portion of our operations. the need for geographic infor-mation and geographic information services has however not decreased, although the present macro-economic climate has resulted in a pent up demand for these kinds of services.

there is still a fundamental requirement for high quality geographic information such as updated maps, orthophotos and other geo-referenced data and services for planning and documen-tation purposes within governments, municipali-ties and administrations. the examples are many, including:

Visualization of new buildings or constructions, from planned windmills to power lines, are crea-ted through new tools to improve understanding of the subject and to improve communication of the effects of planned actions which require better and more detailed geo information.

Risk assessment required for preventive mea-sures on the face of Climate changes and other environmental challenges, which increases the need for high quality, geo-referenced informa-tion. the same elements are required for rapid response in the case of emergencies. unexpec-

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markets

the far East. in addition, blom has extensive ex-perience in carrying out projects financed by dif-ferent development funds, of which the primary objective is poverty alleviation in developing countries. blom has an extensive track record with projects funded through various means, such as the World bank, Eu, asian development bank, african development bank etc, and a large number of national aid and donor organizations.

“Corridor” Infrastructure Effective urban community management is reliant upon accurate data from a variety of sources and blom has the ability to produce such data through scalable and highly accurate mapping. blom offers a range of remote aerial survey sensor techniques for corridor mapping supporting monitoring and maintenance of criti-cal infrastructure such as gas pipelines, power transmission, railroads, highways and airports. these techniques include use of helicopter for laser scanning and aerial photography providing very high level of accuracy and detail.

Environment & Forestry blom’s remote sensing and modeling capabili-ties are used to monitor and analyze the impact environmental changes such as flooding and soil erosion have on the landscape. growth patterns on vegetation can also be monitored and analy-zed to assess growth in forestry and agriculture. blom generates information databases compiled from combinations of aerial photography, hyper

MArKeTs

INTRODUCTIONas one of Europe’s largest providers of geo-spatial products, services and solutions, blom’s customers range from public administrations and enterprises to consumers. the company provi-des a wide variety of mapping and geographic services, meeting local, regional and interna-tional standards and specifications, as well as custom solutions for specific customer demand. blom’s strength lies in the expertise, innovative capability and the technical know-how of its people.

the company operates two business units; geo Engineering services and information services.

GEO ENGINEERING SERVICESgeo Engineering services cover a range of capabilities based on aerial photography and laser scanning. blom’s engineers and subject experts produce a wide range of geo spatial models for engineering and earth monitoring purposes. the aim is to support customers in handling the continuous change, planning and development of urban and rural areas as well as coastal zones. blom focus the geo Engineering services into the following primary market seg-ments: public services, urban & rural planning, corridor infrastructure engineering, environment & forestry, defense, and telecom.

Public Services and Urban & Rural Planning blom provides high quality engineering, consult-ancy services and contracted mapping and modeling services for land and property adminis-tration. Examples of services are preparation of high quality maps and three-dimensional models, cadastral maps and real estate property databa-ses. Cadastral mapping provides the basis for efficient real estate management and is a funda-mental requirement for economic development and growth. the services have been provided to projects in over 30 countries in Europe, Central asia, latin america, the Caribbean, africa and

Laser scanning from Holmenkollen in Oslo before reconstruction.

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markets

port mission planning, monitoring of dynamics and the co-ordination of territory monitoring. any such monitoring can be performed for subjects both static and mobile. blom’s libraries encom-pass complete countries and cover vast urban areas, incorporating orthophotos, and vertical and oblique perspectives, and a wide range of resolution options typically between 2 cm and 50 cm.

Telecom mobile phone communication requires network infrastructure investments that are critical to successful roll-out and optimization. to make geographic analyses for planning, maintenance and optimization of radio networks blom offer digital surface model (dsm) databases. the models are created using laser scanning or aerial photography and necessary post-processing. blom dsm databases cover several European countries, and paired with the blom high resolu-tion imagery dataset it is a suitable tool for the simulation and planning of antenna positioning for wireless telecommunications.

spectral scanning and bathymetric laser scanning to provide data on, among other, land and off-shore terrain, land coverage, snow volumes and vegetation. flood modeling systems and forestry management tools are examples of high value services using blom’s geo models and infor-mation databases. Environmental agencies and private companies such as forestry developers integrate blom information database as a service to their decisions support applications.

Defense defense organizations are major users of digital maps and are as such an important market seg-ment for blom. blom provide large mapping and modeling services to several natO countries. factors such as knowledge of the local area, presentation of sensitive information, events management and the co-ordination of regional service operators are each fundamentally impor-tant to the management of community secu-rity. blom’s libraries with geographic data, now available to many mobile devices, enable the implementation of strategic dashboards to sup-

Forestry assesment

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markets

INFORMATION SERVICESblom information services is the business area responsible for creating and offering new pro-ducts and services based on blom content, in addition to content and services provided by our network of partners. most of the bis pro-ducts and services revolve around our blom-ObliquE™ imagery and our blomuRbEX™ geo server platform, although new products and services are added continuously.

as customers increasingly want access to geographic information as an online service, the blomuRbEX™ platform has become a key com-ponent for future growth. blomuRbEX™ has a set of tools to make all content available via different platforms and applications. these tools support reliable, quick and easy integration with customers’ end user applications enabling ac-cess to the vast amount of data and data models in blomuRbEX™.

the blomuRbEX™ tools support high perfor-mance, reliable applications for the professional government and enterprise market as well as the high volume consumer navigation and location based services market. the integration tools, such as plug-ins, development toolkits and pro-gramming interfaces, are available for all soft-ware developers and system integrators.

blom information services is focusing on six main markets; navigation, location based servi-ces, geo search and online portals, emergency & security, real estate, and land & property admi-nistration. in addition, bis serves the markets within defense & security (including private secu-rity), bank, finance & insurance, media, telecom, utilities, and transport & logistics.

Navigation blom has set a new industry standard with its unique oblique imagery, data models and bes-poke software for navigation solutions, both on board and off board. the navigation solutions integrate blom’s databases and enable naviga-tion by means of detailed, oblique aerial imagery and 3d city models. for navigation, traditional vector maps are useful to provide schematic information, whilst images and 3d models are the perfect complement to provide additional in-formation regarding the area the user is located. With images and 3d models users can easily and rapidly identify their surrounding area, and identify landmarks and locations before actually being there.

Location Based Services (LBS) the telecom industry has seen a tremendous growth of smart phones with gPs capabilities which has resulted in this industry focusing on location based services (lbs). blom’s platform for lbs enables users to access the data in blomuRbEX™ online from any type of device and stream or download the data and images that are relevant to the location of the user. for example, the user can download lists of nearby bus stops, hotels, post offices or parking faci-lities and immediately locate them in a “real world” environment. Other detailed information can also be provided. for example, how many

NDrive navigator with Blom's oblique areial images included.

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markets

hotel rooms or parking spaces are available in the users nearby location at that exact time.

Geo-search and Online Portals blom provides its unique content and online services for use in geo-search services, online maps and directory services. blom’s imagery and 3d models enable service providers to supply the end user and consumer an enhan-ced real-life experience online. Customers have reported that they have measured an increase in traffic on their web sites when they provide their users with blom’s high quality imagery and models.

Emergency & Security Services blom’s oblique imagery currently plays a cru-cial role with operations at emergency call centers such as 112. the operators use the blom ObliquE™ product to navigate and view, enhancing their decision making in critical situ-ations. blom’s oblique imagery is integrated into the emergency dispatch applications and instantly and automatically provides visualization and measurement information on the location from where an emergency call is received. this helps the emergency dispatcher to better assess the situation and direct emergency vehicles and rescue workers to the scene of an incident with more information on their destination.

for example, oblique imagery can immediately identify the width of a road, allowing the respon-ders to know if certain emergency vehicles can access this road before they reach the destina-tion, how large a ladder should be to reach the top of a building and how maneuverable alter-native access routes are to a specific location. Perhaps more importantly is the fact oblique ima-gery provides the opportunity to view an emer-gency location in daylight hours, while the actual emergency might occur at night or be covered by smoke. this information is vital to any emer-gency unit to provide efficiency and safety aides. blom is committed to providing support to all the European 112 Emergency services.

Real Estate Real estate companies need to present pro-perties in the best possible light to potential customers and partners. blom offers a unique way to showcase the attributes of the properties offered. in addition to providing high resolution oblique imagery and 3d models of each property or location, blom provides tool functionality which allows users to measure building heights, surface areas or distances to the nearest park, train station or school etc. blom offers members of the real estate sector substantial value for money as the oblique imagery provides more information about a property and its’ surround-ings compared to other traditional data libraries available today.

Land & Property Administration urban planning and public works carried out by government agencies, utilities companies and engineering and construction companies have now become key industries to take advantage of blom’s oblique imagery database. the imagery allows the users to operate more efficiently, and the geo referenced data helps achieve a greater level of accuracy. blom’s database of oblique imagery covers 80 percent of the Euro-pean population, and is updated frequently. as a result, urban planners, for example government agencies, are able to achieve accurate visual information on an area and relate this to the impact of public works.

utilities companies strive for more efficiency when planning their urban network development or maintenance by using as detailed information as possible. including blom’s oblique images as part of the planning provides invaluable informa-tion which would otherwise be impossible to obtain without actually having to physically be at the location. Other markets3d social platforms, where the users try to recreate a virtual reality for meeting people with avatar images, is an example of what internet

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markets

users are demanding today; a virtual environ-ment where users can talk and socialize with people in a specific place or city. interactive tourist guides, where the user can travel virtually to a destination and see if the location is what they expect, or find distances between inte-resting monuments, hotels etc, are becoming increasingly expected by modern tourist informa-tion guides, such as the online travel guide from

the Repsol Petrol Company. blom provides the information for developing these real experien-ces, offering unique aerial images and 3d mo-dels covering cities throughout Europe, allowing users to easily zoom to a level of detail that has not been previously available in such a scale. users can now see detailed characteristics in building façades, fences and other features on the ground.

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financial analysis

overvieW AnD suMMAry

CHALLENGING yEAR WITH A GOOD FOUNDATION FOR GROWTHthe year 2010 has been marked by continued weak macroeconomic factors in many of the markets where blom operates. this has resulted in pressure on the prices in parts of our opera-tions and delayed call-off orders under frame-work agreements. in information services the company’s operations have been marked by un-certainty regarding the licence agreement with Pictometry. in the stock exchange disclosure of 21 december 2010 it was announced that the termination would entail a loss of income that would have a negative impact on the 4th quarter results in 2010. in addition, the uncertainty that has arisen with regard to the agreement with Pictometry has had consequences for other agreements between blom and its customers.

SALES REVENUEthe group’s sales revenue was nOk 619 mil-lion in 2010, compared with nOk 737 million in 2009. Ebitda for 2010 was nOk -46 million, with a margin of -7.4 per cent, compared with an Ebitda of nOk 92 million and a margin of 12.5 per cent in 2009. the group's operating loss, measured as Ebit, was nOk 428 million, com-pared with nOk 54 million in 2009. this includes a charge of nOk 293 million for the write-down of non-current assets, which is related prima-rily to goodwill and assets associated with the Pictometry agreement. there are also charges totalling nOk 75 million for provisions for poten-tial losses on trade receivables, write-down of inventories and potential claims from customers as a result of the uncertainty associated with the Pictometry agreement.

Revenues in geo Engineering services declined from nOk 618 million in 2009 to nOk 501 million in 2010, which is primarily the result of the financial turbulence in many countries where blom operates. the information services seg-ment maintained revenues of nOk 118 million in 2010, compared with revenues of nOk 119 million in 2009.

119

revenue 2009 – 2010 (amount in nOk million)

bgEs bis

800

900

1000

700

600

500

400

2009

2009

2010

300

200

737

501

618 118

619

100

0

eBiTDA 2009 – 2010(amount in nOk million)

100

80

2010

60

0

40

-20

20

-40

-60

-46

92

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financial analysis

MARKETthe year 2010 has been marked by continued weak macro-economic factors in some of the markets where blom operates. as a result of this, customers in public administration and the private sector, who focus on the development and management of infrastructure and land areas, have temporarily reduced their budgets, which has entailed a lower revenue volume. since national investments in infrastructure and land development in some countries in Europe have been low during the last two years, there will be pent-up demand for the services that blom delivers in bgEs. in addition, in light of the new Eu guidelines and recent natural disasters there will be a substantial demand for blom's services in the environmental sector, which includes forest monitoring, flood control and risk surveys, in addition to soil erosion monitoring. today blom has a leading position in Europe with regard to the laser scanning of routes and large or small areas of land.

in the bis segment, 2010 has been marked by national debt challenges and a dispute with a major technology supplier, which has resulted in the stagnation of our revenue in 2010 compared with 2009. in recent years blom has established a unique map data database of photos and 3d models in Europe. With its own databases, blom will be able to sell the same data multiple times and thus be able to deliver stronger margins. in order to achieve optimal distribution of such data, the company has developed its own geo-server, blomuRbEX™, which can give custo-mers access to the database through a number of proprietary interfaces and the associated development tools. as a result of these invest-ments blom can also offer its customers access to other databases linked to its own geoserver. in addition, blom will be able to establish new sales channels and benefit from the market ac-cess of other companies through partner agre-ements.

blom’s largest markets by revenue are the nordic region, spain, the uk and italy, cf. note 1.

KEy ACCOUNTING PRINCIPLESthe consolidated accounts have been prepared in accordance with the international financial Reporting standard (ifRs). these consolidated accounts have been prepared on the basis of historical cost, with the exception of financial instruments that are assessed at market value. the preparation of financial statements in accor-dance with ifRs requires the use of estimates. in addition, the application of the company’s accounting principles requires that the manage-ment exercise judgement.

Estimates and discretionary assessments are assessed continuously and based on historical experience and other factors, including expec-tations of future events that are regarded as probable under the current circumstances. the group prepares estimates and makes assump-tions concerning the future. the most important evaluations for blom asa are related to goodwill, calculation of the deferred tax assets, recogni-tion of income from projects, and provisions for potential loss in receivables.

blom has maintained a strong focus on online services. the company has enhanced its geo-server, blomuRbEX®, for online distribution and access to blom’s databases, developed additio-nal 3d models for navigation, built up a profes-sional sales and marketing organisation, and expanded its oblique image database in Europe.

FINANCIAL EXPENSES the net financial expenses totalled nOk 69 million in 2010, compared with nOk 1 million in 2009, which is attributed primarily to higher interest-bearing debt and foreign exchange los-ses.

TAXES the deferred tax assets are recorded on the balance sheet based on the expected future earnings. the tax loss carryforward represents most of the deferred tax assets. the company has recognised the tax effect of the tax loss carryforward of nOk 45 million on the balance

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financial analysis

sheet, and nOk 38 million of this amount is not time limited.

INTANGIBLE ASSETSgoodwill is the difference between the acqui-sition cost for the acquisition of a business and the fair value of the net identifiable assets in the business at the time of the acquisition. goodwill from the acquisition of subsidiaries is treated as an intangible asset. goodwill is tested annually for impairment in value, and it is recognised at historical cost less accumulated write-downs and amortisation.

due to mutual cash flow dependency between the company’s legal entities, the company is re-garded as a cash flow generating unit, and good-will in the company is allocated to this cash flow generating unit. the recoverable amount from the cash flow generating unit is calculated based on the value determined for the asset by calcu-lating the utility value. these calculations require the use of estimates. the testing of goodwill is described in notes 3 and 25.

Patents and licenses are recorded at historical cost. Patents and licences have a limited econo-mic life and are recorded at historical cost less accumulated depreciation. Patents and licences are depreciated by the straight-line method over their expected life (3-10 years).

SEGMENT INFORMATIONas a result of the introduction of ifRs 8 on 1 January 2009, the company will report two operating segments from this financial year, geo Engineering services and information services, which are two separate cash-generating units.

PROVISIONS FOR RECEIVABLES the provisions for potential losses on receivables are based on the management’s discretionary assessment of potential future losses on receiva-bles from customers. the company’s customers in bgEs are primarily municipalities or govern-ment agencies, or companies or institutions

where municipalities or government agencies have a dominant influence. the company consi-ders the risk of potential future losses from this type of customer to be low.

during the last two years in bis the company has acquired more customers who are private companies in handheld terminals, web services and navigation. these customers have by definiti-on a higher probability for potential future losses than the company’s original customer group. as of 31 december 2010 the company has provisio-ns of nOk 22 million for potential future losses on specific trade receivables. these provisions have in general been designated for specific private customers exposed to competition who have acquired services from blom’s existing database of oblique images.

FOREIGN CURRENCy AND INTEREST RATE CONDITIONSthe company is somewhat exposed to fluctua-tions in foreign exchange rates, since substantial revenues are in foreign currencies other than nOk, primarily EuR. the company has operative subsidiaries in nine European countries, four of which use the Euro as their functional currency, while the five remaining subsidiaries use five other functional currencies.

the company has certain investments in foreign subsidiaries, whose net assets are exposed to foreign currency translation risk. Currency ex-posure arising from the group’s net investments in foreign operations is managed essentially though raising loans in the relevant foreign currency.

the company focuses on reducing any foreign currency risk associated with cash flows and does not focus on reducing the foreign currency risk associated with assets and liabilities. the subsidiaries’ income and expenses are in the same currency, and this reduces the group’s cash flow exposure to a single currency sub-stantially. an assessment of the need for and

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financial analysis

any hedging of currency risks are performed by a central financial function. in 2010 the company did not find it necessary to hedge cash flows against currency risks through forward contracts.

the company is also exposed to fluctuations in the interest rates for the company's interest-bearing debt and cash reserves. the group's interest rate risk is associated with long-term loans, financial leasing and credit facilities. all of the company’s interest-bearing debt is subject to adjustable interest rates. the company has not made use of interest rate swaps or other finan-cial instruments.

LIQUIDITy AND CAPITAL STRUCTUREthe company considers its liquidity to be satis-factory.

the group had nOk 107 million in liquid reserves at the end of the year, compared with nOk 241 million in liquid reserves at the start of 2009. the available liquid reserves as of 31 december 2010 consist of bank deposits of nOk 96 million and an unused overdraft facility and other unused credit facilities of nOk 11 million. the liquidity is monitored monthly by means of rolling cash flow forecasts from the subsidiaries, which are also used as a basis for the placement of excess liquidity.

the group has credit facilities and/or short-term loans in blom asa, blom CgR, blom sistemas and blominfo geonet. the group also utilises lease financing. the company issued a new bond loan of nOk 300 million on the norwegian mar-ket in september 2009 (fRn blom asa senior secured bond issue 2009/2012). blom was in breach of the loan covenants as of 31 decem-ber 2010 with respect to the equity ratio and the ratio between net interest bearing liabilities and Ebitda for the company's bond loan, which is designated fRn blom asa senior secured bond issue 2009/2012. the breach of the loan covenants comes after a period of disappointing results, large write-downs and substantial loss

of revenue as a result of a dispute with Picto-metry. the board of directors does not consider the loan covenants to be a temporary problem and finds that it is necessary to restructure the company's capital situation in order to establish a healthy financial foundation for our continuing operations.

the company has accordingly engaged in nego-tiations with representatives for the bondholders with a view to such restructuring. the solution that has been negotiated will include elements that were adopted at the company's general meeting of 18 march 2011:

– as part of the solution, blom will seek to raise at least nOk 50 million in new equity, and

– if blom is not successful in acquiring subscrip-tions for new equity by 30 april 2011, then nOk 50 million of the bond loan will be converted to a convertible loan. if, however, it becomes clear prior to 30 april that the rights issue for the aforementioned amount cannot be completed, then the conversion shall take place at such an earlier date. an Extraordinary general meeting was held on 18 march 2011. the general meeting has decided that blom shall seek to carry out a rights issue of new shares with gross proceeds of up to nOk 73.1 million. the company's share capital will be increased by a minimum of nOk 0.10 and a maximum of nOk 24,360,381.60 by the issuance of a minimum of 1 and maximum of 243,603,816 new shares, each with a nominal value of nOk 0.10. the new shares will be issued at a subscription price of nOk 0.30 per share. Payment shall be made in cash.

in accordance with a resolution passed by the bondholder meeting on 23 march 2011, the Com-pany was given the right to issue an additional bond loan of nOk 50 million. the new bond loan of nOk 50 million is fully subscribed. further, in-terest accruing on the present bond loan during

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financial analysis

2011 shall be paid in kind by issuing sdditional bond to the existing bond loan.

the composition of long-term liabilities and short-term interest bearing liabilities is described in note 8.

EQUITyblom has an equity ratio of 13 per cent as of 31 december 2010, compared with 49 per cent in 2009.

Page 28: Blom ASA Annual Report 2010

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board of direcTor's reporT

Page 29: Blom ASA Annual Report 2010

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board of director's report

BoArD of DireCTors' reporT 2010

COMPANy'S OPERATIONSin the report for 2009 the board of directors expressed that the company had conservative expectations for 2010. the year 2010 has been marked by continued weak macroeconomic factors in many of the markets where blom operates. this has resulted in pressure on the prices in parts of our operations and delayed call-off orders under framework agreements. in information services the company’s operations have been marked by the uncertainty surround-ing the licence agreement with Pictometry. in the stock exchange disclosure of 21 december 2010 it was announced that the termination would entail a loss of income that would have a negative impact on the 4th quarter results in 2010. in addition, the uncertainty that has arisen with regard to the agreement with Pictometry has had consequences for other agreements between blom and its customers.

in light of the company’s results for 2010 and continued uncertainty concerning macroecono-mic factors, the company has identified value shortfalls in the company’s assets, which will be commented on in greater detail under the Results section.

the company’s operations have been divided into two business areas. One of these areas is blom information services (bis), which is cha-racterised by the company establishing a custo-mer relationship in which the same data can be delivered to multiple customers. the delivery takes place through services and applications that are provided through wireless access or over the internet / online. the second business area is blom geo Engineering services (bgEs), which represents primarily services linked to non-recurring deliveries, the terms of which are agreed on for each individual customer and each individual delivery.

bgEs is based on the traditional activities that the company was built on historically, and the customer base is linked primarily to public en-terprises or customers who deliver services that focus on the development and management of infrastructure and land areas. While photogram-metry and the production of maps was the main pillar for such services four-five years ago, now the company has increased its focus on various forms of laser scanning as part of its goal to im-prove its profit margin. today blom has a leading position in Europe with regard to the laser scan-ning of corridors and large or small areas of land.

the foundation for bis is the company’s long-term strategy to establish a unique European database of oblique images and 3d models in Europe. With its own databases, blom will be able to sell the same data multiple times and thus be able to deliver stronger margins. in order to achieve optimal distribution of such data, the company has developed its own geoserver, blomuRbEX™, which can give customers ac-cess to the database through a number of propri-etary interfaces and the associated development tools. as a result of these investments blom can also offer its customers access to other da-tabases linked to its own geoserver. in addition, blom will be able to establish new sales chan-nels and benefit from the market access of other companies through partner agreements.

blom has independent operations in a total of 12 countries in Europe and a production unit in indo-nesia. the parent company has offices at skøyen in Oslo and manages the operations from there.

COMMENTS ON THE ANNUAL ACCOUNTSthe board of directors believes that the annual accounts provide a true picture of the group's results and position. sales revenue declined by 16 percent. this reduction is attributed primarily to the 19 per cent decline in the geo Enginee-ring services segment. Ebitda margin for 2010 was -7.4 per cent, compared with 12.5 per cent in 2009.

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board of director's report

the company's balance sheet is significantly lighter whitch is attributed primarily to the weak operating results and special write-downs. the equity ratio is 13.3 per cent, compared with 49.3 per cent in 2009, cash and cash equivalents are nOk 96 million, compared with nOk 165 million in 2009, and net interest-bearing liabilities are nOk 332 million, compared with nOk 304 milli-on in 2009. as a consequence of the company's financial standing, the company's Extraordinary general meeting of 18 march 2011 has decided to strengthen the capital structure through a rights issue and raising a new bond loan.

RESULTSthe group’s sales revenue was nOk 619 million in 2010, compared with nOk 737 million in 2009. Ebitda for 2010 was nOk -46 million, with a margin of -7.4 per cent, compared with an Ebitda of nOk 92 million and a margin of 12.5 per cent in 2009. the group's operating loss, measured as Ebit, was nOk 428 million, com-pared with nOk 54 million in 2009. this includes a charge of nOk 293 million for the write-down of non-current assets, which is related prima-rily to goodwill and assets associated with the Pictometry agreement. there are also charges totalling nOk 75 million for provisions for poten-tial losses on trade receivables, write-down of inventories and potential claims from customers as a result of the uncertainty associated with the Pictometry agreement.

net cash flow from operating activities was posi-tive nOk 59 million, which is attributed primarily to an improvement in the working capital. in this context trade receivables have been reduced by nOk 76 million in 2010 to nOk 164 million, while work in progress is nOk 152 million, compared with nOk 261 million in 2009.

Write-downs in associated companies in 2010 represented a total charge of nOk 63 million. net financial expenses totalled nOk 69 million in 2010. since the company’s bond loan has been reclassified from a long-term to a current liability, all of the transaction costs associated with the bond loan totalling have been recognised.

INVESTMENTSthe combined operational investments in 2010 totalled nOk 79 million, compared with nOk 101 million in 2009. the decline in investments from 2009 to 2010 is attributed primarily to the fact that the company built up its map databases in 2009 and earlier years. there has been no need in 2010 to expand the geographic coverage area as much as in earlier years.

FINANCINGblom was in breach of the loan covenants as of 31 december 2010 with respect to the equity ratio and the ratio between net interest bearing liabilities and Ebitda for the company's bond loan, which is designated fRn blom asa senior secured bond issue 2009/2012. the breach of the loan covenants comes after a period of dis-appointing results, large write-downs and sub-stantial loss of revenue as a result of a dispute with Pictometry. the board of directors does not consider the loan covenants to be a temporary problem and finds that it is necessary to restruc-ture the company's capital situation in order to establish a healthy financial foundation for our continuing operations.

the company has accordingly engaged in nego-tiations with representatives for the bondholders with a view to such restructuring. the solution that has been negotiated will include elements that were adopted at the company's general meeting of 18 march 2011:

– as part of the solution, blom will seek to raise at least nOk 50 million in new equity, and

– if blom is not successful in acquiring subscrip-tions for new equity by 30 april 2011, then nOk 50 million of the bond loan will be converted to a convertible loan. if, however, it becomes clear prior to 30 april that the rights issue for the aforementioned amount cannot be completed, then the conversion shall take place at such an earlier date.

Page 31: Blom ASA Annual Report 2010

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board of director's report

total assets at the end of the year were nOk 808 million, compared with nOk 1,414 million at the end of the previous year. the equity ratio was 13.3 per cent as of 31 december 2010, compared with 49.3 per cent as of 31 december 2009.

CONTINUATION AS A GOING CONCERNPursuant to section 3-3 of the accounting act, it has been confirmed that the prerequisites for continued operations have been met. this as-sumption has been made for the preparation of the accounts, forecasted results for the year 2011 and the group’s long-term strategic forecast for the coming years. the group has an econo-mic and financial position to support continued operations.

COMMENTS ON THE BUSINESS OUTLOOKblom has experienced market-related and ope-rational challenges that have resulted in lower than budgeted revenues and margins for the year 2010. in the current year the company has implemented measures to reduce the cost base, primarily through a reduction of the workforce. the company will continue to focus on measures to improve its margin, through both cost adap-tation and more efficient use of the company’s resources. based on the company's contract coverage and budgets for 2011, the board of directors believes that it is possible to achieve positive operating margins in the current year.

in addition, the company has prepared a solution outline together with its largest creditors that will strengthen the company's financial position. the solution entails both an injection of new equity and expanded credit limits.

the company is still exposed to markets, espe-cially in southern Europe, which may be mar-ked by uncertainty well into 2011. the board of directors points out there is normally uncertainty related to the assessment of future conditions.

ENVIRONMENT AND EQUALITyWorking environmentin 2010 the company has adjusted its work-force, based on the demand for the company’s products in the market. due to the continued restructuring of the group, combined with impro-ved coordination and utilisation of the company’s resources, as well as the introduction of new technology, a decision has been made to imple-ment additional workforce reductions that will take effect in 2011.

the company has a staff of employees with a high level of competence. this represents the fo-undation for the company's future growth. as of 31 december 2010 there was a total of 523 em-ployees in the operative companies, while there was a total of 570 employees at the production facilities in indonesia and Eastern Europe. the group has a total of 1,093 employees. in 2010 the number of employees was reduced by 76 in the operative companies and 19 at the producti-on facilities in indonesia and Eastern Europe, for a total of 95.

in 2010 absence due to illness in norway was 1.1 per cent compared with 1.8 per cent in 2009, and no work-related injuries were reported in 2010. it is the board of directors' opinion that the working environment, general level of work-place satisfaction, and loyalty to the company are satisfactory. blom continuously seeks to improve the working environment. this is followed up locally in the individual subsidiaries.

Equal statusthe percentage of women in the operations in norway is 15 per cent, compared with 22 per cent in 2009, and two of the group’s five elected board members are women. the employees are represented on the board of directors of the operative company in norway. there are no employee-elected representatives on the board of directors who are women.

blom’s personnel policy is deemed to be gender neutral in all areas and equal status issues are

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board of director's report

safeguarded in a satisfactory manner. We are in a male-dominated industry, and this is reflected in the company's gender composition. the board of directors will continue its efforts to ensure that the company satisfies the equal status require-ments at any given time.

External environmentthe group owns 16 aircraft and operates 20 aircraft and four helicopters for the collection of data, and this does have some impact on the environment. the nature of the other operations in the group is such that they only pollute the external environment to a very limited extent, and the company operates in compliance with the applicable laws and rules.

Corporate governancethe company seeks to follow the norwegian Code of Practice for Corporate governance issued by the norwegian Corporate governance board (nuEs) on 21 October 2010. a detailed summary of to what extent the company com-plies with this code of practice can be found in this annual report.

APPLICATION OF THE PROFIT FOR THE PARENT COMPANythe board of directors proposes the following application of the profit:Proposed dividend nOk 0,-from other reserves nOk 498 079 000,-

the company's distributable equity is nOk 43 722 000,-.

EVENTS AFTER THE DATE OF THE BALANCE SHEETan extraordinary general meeting was held on 18 march 2011. the general meeting resolved that the company should seek to carry out a right issue giving gross proceeds up to nOk 73.1 million, through which the company’s share capital be increased by a minimum of nOk 0.10 and a maximum of nOk 24 360 381.60 through the issuance of a minimum of 1 and a maximum of 243 603 816 new shares. the new shares will

be issued at a subscription price of nOk 0.30 per share to be paid in cash. further, the general meeting decided to shall take up a convertible loan with nominal value nOk 50 million. the issu-ance of the convertible loan is conditional upon the gross proceeds from the right issue are be-low nOk 50 million or 166,666,667 new shares. if the subscriptions in the rights offering amount to less than nOk 50 million or 166,666,667 new shares, the bondholders will have the right to convert nOk 50 million of the existing bond loan into a new zero-coupon convertible bond with a conversion price of nOk 0.30 per share.

in accordance with a resolution passed by the bondholder meeting on 23 march 2011, the Com-pany was given the right to issue an additional bond loan of nOk 50 million. the new bond loan of nOk 50 million is fully subscribed. further, in-terest accruing on the present bond loan during 2011 shall be paid in kind by issuing additional bond to the existing bond loan.

Pictometry international Corp. advised blom asa on 16 October 2010 that the company found that blom had breached the licence agreement that was entered into on 29 January 2009, and Picto-metry terminated the agreement with immedi-ate effect. blom is of the opinion that the com-pany has not acted in breach of the agreement and that the termination is thus invalid. blom has taken the steps necessary to safeguard the company’s interests in the short term through its legal advisors.

as a result of this, blom was granted a preli-minary injunction in a case that the company brought before a court in new york claiming that the agreement must be re-established until a valid judgment is handed down. at the same time the judge ruled that blom was not to deliver Pictometry-related services to a named partner of blom until this point in time. as a result of this ruling, blom was notified by its partner that the company was considered to be in breach of the conditions of the cooperation agreement. blom did not manage to comply with the arguments

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33

board of director's report

put forward by the agreed deadline, and the agreement is therefore terminated.

blom and Pictometry have recently invested a lot of resources to find a solution for the dispute outside of the agreed legal proceedings. the

parties have, therefore, appointed a voluntary mediator. both parties strive to find a solution outside the legal system. the parties have not yet reached any agreement, but they are still working to find a solution.

Oslo, 24. march 2011

dirk blaauwboard member / CEO

Per kyllingstadboard member

gunnar Hirstiboard Chairman

brita Eilertsenboard member

bente loeboard member

Page 34: Blom ASA Annual Report 2010

blom group accounTs

Page 35: Blom ASA Annual Report 2010

35

blom group accounts

Operating revenues 1 619 177 736 901 Cost of materials 236 546 242 461salaries and personnel costs 12 277 215 297 554Ordinary depreciation 2 / 3 382 377 146 138Other operating and administrative costs 13 151 256 104 580Operating expenses 1 047 394 790 733

Operating profit/loss -428 218 -53 832 Profit/loss attributable to associated companies 23 -61 595 -565 Net financial items 14 -69 207 -39 562 Pre-tax profit/loss -559 019 -93 960 taxes 9 -5 938 10 949Net profit/loss for the year -564 957 -83 012 Profit/loss attributable to: shareholders -564 949 -82 506minority interests -8 -506Net profit/loss for the year -564 957 -83 012 Total comprehensive income: Currency translation differences 22 -23 347 -74 757Total comprehensive income for the year -589 677 -157 769 Comprehensive income attributable to: shareholders -588 296 -156 688minority interests -1 381 -1 081 -589 677 -157 769

Earnings per share/diluted earnings per share 18 -13,91 -2,04

ConsoLiDATeD sTATeMenT of CoMpreHensive inCoMe – BLoM group

Note 2010 2009

(amounts in nOk 1000)

notes 1 to 26 are an integral part of the consolidated accounts.

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36

blom group accounts

Patents, licences and similar rights 3 3 184 36 700deferred tax assets 9 39 680 50 428goodwill 3 125 699 270 579Total intangible assets 168 563 357 707 Property, plant and equipment 2 144 127 295 797 non-current asset investments 21 24 253 10 253investments in associated companies 23 15 593 45 246Total non-current asset investments 39 847 55 498 Total non-current assets 352 537 709 003

inventories 2 558 2 826Work in progress 4 152 479 261 237Total inventories 155 038 264 062 trade receivables 5 164 334 240 252Other current receivables 5 40 497 35 404Total receivables 204 831 275 656 Cash and cash equivalents 6 95 888 164 873 Total current assets 455 756 704 592 TOTAL ASSETS 808 294 1 413 595

BALAnCe sHeeT – BLoM groupASSETS

Note 2010 2009

(amounts in nOk 1000)

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37

blom group accounts

Oslo, 24. march 2011

dirk blaauwboard member / CEO

Per kyllingstadboard member

gunnar Hirstiboard Chairman

brita Eilertsenboard member

bente loeboard member

Called-up and fully paid share capital: share capital 17 4 170 4 170treasury shares 17 - 110 - 110share premium account 129 581 129 581 Other reserves: Currency translation differences - 42 832 - 19 485Retained earnings 17 036 581 985 107 845 696 141

minority interests 8 1 389 Total equity 107 853 697 530 Pension obligations 7 18 031 20 625non-current liabilities 8 / 15 40 786 356 366deferred taxes 9 5 616 12 351Total other non-current liabilities 64 432 389 342 Overdraft facilities 8 54 184 89 824Other interest-bearing short-term liabilities 8 / 15 335 239 31 031Total interest bearing short-term liabilities 389 423 120 855 Payables to suppliers 92 381 104 798unpaid government taxes 29 171 35 289tax payable 9 9 063 8 197Other current liabilities 10 115 970 57 583Total other current liabilities 246 585 205 868 Total current liabilities 636 009 326 723 TOTAL EQUITy AND LIABILITIES 808 294 1 413 595

BALAnCe sHeeT – BLoM groupEQUITy AND LIABILITIES

Note 2010 2009

(amounts in nOk 1000)

notes 1 to 26 are an integrated part of the consolidated accounts.

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38

blom group accounts

CASH FLOW FROM OPERATING ACTIVITIES Pre-tax profit/loss -559 019 -93 960+ depreciation and write-downs 2/3 382 377 146 138- taxes paid 9 -10 373 -4 875- interest paid 14 -38 854 -27 771+/- Profit/loss attributable to associated companies 23 61 595 565+/- Change in trade receivables 50 988 112 767+/- Change in inventories and work in progress 109 025 16 121+/- Change in supplier debt -12 417 24 219+/- Change in other accruals and unrealised foreign exchange 75 187 -99 907 A = Net cash flow from operating activities 58 509 73 297 CASH FLOW FROM INVESTING ACTIVITIES - Purchases of property, plant and equipment 2/3 -56 425 -76 555 B = Net cash flow from investing activities -56 425 -76 555 CASH FLOW FROM FINANCING ACTIVITIES + new long-term debt 8 0 287 269- Payments on long-term debt and loans 8 -39 499 -201 643+/- net change in overdraft facilities 8 -31 569 6 023 C = Net cash flow from financing activities -71 068 91 649 A+B+C Net change in cash and cash equivalents -68 985 88 391+ Cash and cash equivalents 164 873 76 482 = Cash and cash equivalents 6 95 888 164 873

CAsH fLoW sTATeMenT – BLoM groupINDIRECT MODEL

Note 2010 2009

(amounts in nOk 1000)

notes 1 to 26 are an integrated part of the consolidated accounts.

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39

blom group accounts

ConsoLiDATeD sTATeMenT of CHAnges in equiTy – BLoM group

Equity as of 1 January 2009 4 170 -110 129 581 54 694 664 491 852 826 2 470 855 296 net profit/loss for the year -82 506 -82 506 -506 -83 012

Other compreh. income: Currency transl. differences 22 -74 179 -74 179 -575 -74 179Other compreh. income -74 179 -74 179 -575 -74 179

Total compreh. income -74 179 -82 506 -156 685 -575 -157 766

Equity as of 31 Dec. 2009 26 4 170 -110 129 581 -19 485 581 985 696 141 1 389 697 530 net profit/loss for the year -564 949 -564 949 -8 -564 957

Other compreh. income:Currency transl. differences 22 -23 347 -23 347 -23 347Other compreh. income -23 347 -23 347 -23 347

Change in ownership subsidiaries:acquisition of minority interest -1 373 -1 373Transactions with owners -1 373 -1 373

Total compreh. income -23 347 -564 949 -588 296 -1 381 -589 677 Equity as of 31 Dec. 2010 4 170 -110 129 581 -42 832 17 036 107 845 8 107 853

Note Minority interests

TOTALRetained earnings

Currency trans-

lation dif-ferences

Share premium

Treasury shares

Share capital

Equity

(amounts in nOk 1000)

notes 1 to 26 are an integrated part of the consolidated accounts.

Page 40: Blom ASA Annual Report 2010

noTes To The blom group accounTs

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41

notes to the blom group accounts

noTes To THe ACCounTs

GENERAL INFORMATION blom asa collects, processes and sells high quality map data. the group possesses unique databases, and it has developed applications and services for navigation and location-based servi-ces. blom asa has subsidiaries in 13 countries.

blom asa is a public limited company registered and domiciled in norway. the office address is drammensveien 165, 0277 Oslo, norway. blom asa is listed on Oslo børs.

the consolidated accounts were approved by the company’s board of directors on 24 march 2011.

SUMMARy OF THE MOST IMPORTANT ACCOUNTING PRINCIPLESthe most important accounting principles ap-plied by the group in the preparation of the con-solidated accounts are described below. these principles have been applied identically to all the periods that are presented unless otherwise stated in the description.

BASIC PRINCIPLESthe consolidated accounts have been prepared in accordance with the international financial Re-porting standard (ifRs) as stipulated by the Eu.

these consolidated accounts have been prepa-red on the basis of the historical cost principle, with the exception of financial instruments that are assessed at market value. the preparation of accounts in accordance with ifRs requires the use of estimates. in addition, the application of the company’s accounting principles requires that the management exercise judgement. areas that contain a large degree of such discretionary assessments, a high degree of complexity, or areas where the assumptions and estimates are of significance to the consolidated accounts are described in note 25.

a) the group has adopted the following new and amended standards in 2010:

• ifRs 3 business Combinations (revised) and subsequent changes in ias 27 Consolidated and separate financial statements, ias 28 in-vestments in associates, and ias 31 interests in joint Ventures are used for business combi-nations dated after January 1, 2010. the acquisition method for business combi-nations has significant changes. according to revised standards, all consideration for the purchase of businesses with minority interest shall be accounted for in the equity when there is no change in control. these transactions will no longer result in goodwill or profits or losses. if the ownership becomes a non-controlling interest, remaining ownership is measured at fair value and profit or loss is recognised. ias 3 does not affect the accounts for 2010.

• ias 27 Consolidated and separate financial statements (revised): the revised standard requires that the effect of all transactions with non-controlling interests shall be recognised in equity if there is no change in control, and the-se transactions will no longer result in goodwill or gains or losses. this standard also specifies the accounting when the control ceases. any remaining interest in the unit will be measured at fair value, and the loss of gain will be recog-nised in the profit and loss account. the effect on the accounts for 2010 is considered to be insignificant.

b) new and amended standards adopted by the group that do not currently affect the accounts:

• ifRiC 17 distribution of non-cash assets to Owners. this interpretation regulates the re-cognition of specific distributions in kind to the owners. ifRs 5 has also been amended, and assets that are to be distributed are classified as “held for distribution” only when they are available for distribution in their present state and the distribution is highly probable.

• ifRiC 18 transfers of assets from customers provides guidance on the accounting of pro-perty, plant and equipment that an entity

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notes to the blom group accounts

receives from a customer and is to be used either to connect the customer to a network or to provide the customer with ongoing ac-cess to a supply of goods or services (such as a supply of electricity, gas or water). in some cases, cash is received from a customer that must be used to acquire or construct the item of property, plant, and equipment in order to connect the customer to a network or provide the customer with ongoing access to a supply of goods and/or services.

• ifRiC 9 Reassessment of embedded deriva-tives (amended) and ias 39 financial instru-ments: Recognition and measurement. this amendment to ifRiC 9 requires an entity to assess whether an embedded derivative should be separated from a host contract when the entity reclassifies a hybrid financial asset out of the fair value through profit or loss category. this assessment is to be made based on circumstances that existed on the later of a) the date the entity first became a party to the contract and b) the date of any contract amendments that significantly change the cash flows of the contract. if the entity is unable to make a reliable assessment, no reclassification may be made..

• ifRiC 16 Hedges of a net investment in a foreign operation (amended). this amendment clarifies that, in a hedge of a net investment in a foreign operation, qualifying hedging instru-ments may be held by any entity or entities within the group, including the foreign operati-on itself, as long as the designation, documen-tation and effectiveness requirements of ias 39 that relate to a net investment hedge are satisfied. in particular, the group should clearly document its hedging strategy because of the possibility of different designations at different levels of the group..

• an ias 38 intangible asset (amended) clarifies guidance in measuring the fair value of an intangible asset acquired in a business combi-nation. it permits the grouping of intangible as-

sets as a single asset if each asset has similar useful economic lives.

• ias 1 Presentation of financial statements (revised). the revised standard requires that income and expense items that were recogni-sed directly in equity previously be presented in a statement of comprehensive income now. the equity statement shows transactions with owners and income and expense items separa-tely, both of which are broken down by equity category as before. the comparison figures have been restated so that they are in accor-dance with the revised standard. the change affects only the presentation and not the ear-nings per share.

• ias 36 impairment. this amendment clarifies that the largest cash-generating unit (or group of units) to which goodwill should be allocated for the purposes of impairment testing is an operating segment, as defined by paragraph 5 of ifRs 8 Operating segments.

• ifRs 2 (amendments), ‘group cash-settled share-based payment transactions’, effective form 1 January 2010. in addition to incorpora-ting ifRiC 8, ‘scope of ifRs 2’, and ifRiC 11, ‘ifRs 2 – group and treasury share transac-tions’, the amendments expand on the guid-ance in ifRiC 11 to address the classification of group arrangements that were not covered by that interpretation.

• ifRs 5 (amendment), ‘non-current assets held for sale and discontinued operations’. the amendment clarifications that ifRs 5 specifies the disclosures required in respect of non-current assets (or disposal groups) classified as held for sale or discontinued operations. it also clarifies that the general requirement of ias 1 still apply, in particular paragraph 15 (to achieve a fair presentation) and paragraph 125 (sources of estimation uncertainty) of ias 1.

(c) standards, amendments and interpretations of existing standards that have not yet entered

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notes to the blom group accounts

into force, for which the company has not cho-sen early adoption:

• ifRs 9 financial instruments (applies to an-nual accounts that start on or after 1 January 2013) replaces the measurement rules in ias 39 for financial assets. measurement in ifRs 9 is determined by the company’s business model and the characteristics of the individual financial asset. a financial asset is measured at amortised cost if the object of the company’s business model is to hold the asset in order to receive contractual cash flows and the cash flows from the asset only represent instal-ments and interest on the outstanding amount. the group and the parent company have not finished evaluating the effects of ifRs.

• ias 24 Related party disclosures (revised) replaces the former ias 24 from 2003. this standard is mandatory for financial years begin-ning on or after 1 January 2011, but earlier ap-plication, in whole or in part, is permitted. the revised standard clarifies and simplifies the definition of a related party and removes the requirement for government-related entities to disclose details of all transactions with the government and other government-related en-tities. the group will apply the revised standard from 1 January 2011, and this will mean that the group and the parent will need to disclose any transactions between its subsidiaries and its associates in the notes. the group is cur-rently putting systems in place to capture the necessary information. it is, therefore, not pos-sible at this stage to disclose the impact, if any, of the revised standard on the related party disclosures.

• ias 32 (amendment) Classification of rights issues. this standard is mandatory for financial years beginning on or after 1 february 2010, but earlier application, in whole or in part, is permitted. this amendment addresses the ac-counting for rights issues that are denominated in a currency other than the functional currency

of the issuer. Provided certain conditions are met, such rights issues are now classified as equity regardless of the currency in which the exercise price is denominated. Previously, these issues had to be accounted for as deriva-tive liabilities. this amendment applies retro-spectively in accordance with ias 8 accounting policies, changes in accounting estimates and errors. the group will apply the amended stan-dard from 1 January 2011.

• ifRiC 19 Extinguishing financial liabilities with equity instruments is effective from 1 July 2010. the interpretation clarifies the accounting by an entity when the terms of a financial liability are renegotiated and result in the entity issuing equity instruments to a creditor of the entity to extinguish all or part of the financial liability (debt for equity swap). it requires the debtor to recognise a gain or loss in profit or loss in connection with the conversion, which is measured as the difference between the carrying amount of the financial liability and the fair value of the equity instruments issued. if the fair value of the equity instruments issued cannot be reliably measured, the equity instru-ments should be measured to reflect the fair value of the financial liability extinguished. the group will apply the revised standard from 1 January 2011, subject to endorsement by the Eu. it is not expected to have any impact on the group or the parent entity’s financial state-ments.

• ifRiC 14 (amendment) Prepayments of a minimum funding requirement. the amend-ment corrects an unintended consequence of ifRiC 14, ias 19 – the limit on a defined bene-fit asset, minimum funding requirements and their interaction. Without the amendment, enti-ties are not permitted to recognise as an asset some voluntary prepayments for minimum funding contributions. the amendment is ef-fective for financial years beginning on or after 1 January 2011. Earlier application is permitted. the amendment should be applied retrospec-

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notes to the blom group accounts

tively to the earliest comparative period pre-sented. the group will apply this amendment starting with the financial year 2011.

• Various standards amended in the 2010 round of annual improvements. these amendments include a number of minor changes in the fol-lowing standards and interpretations that may be relevant to the company: ifRs 1, ifRs 3, ifRs 7, ias 1, ias 27, ias 34 and ifRiC 13. the amendments to ifRs 3 and ias 27 apply to fi-nancial years beginning on or after 1 July 2010, while the other amendments apply to financial years beginning on or after 1 January 2011. the amendments have not yet been endorsed by the Eu.

• ifRs 7 (amendment) financial instruments: disclosures introduces new disclosure require-ments related to continued exposure to assets that have been removed from the balance sheet and transferred assets that are still re-cognised in full or in part on the balance sheet. the group will put systems in place to capture the necessary information. it is, therefore, not possible at this stage to disclose the impact, if any, of the revised standard on the notes. this amendment applies to financial years begin-ning on or after 1 July 2011. there will not be any requirement to restate additional informa-tion for comparison figures. the amendments have not yet been endorsed by the Eu.

• ias 12 (revised): deferred tax: Recovery of underlying assets. the revised standard requi-res that deferred tax on investment property measured to fair value and fixed assets measu-red to revalued amounts according to ias 16 is to be measured based on tax rate used if sold. the change will not have any impact on defer-red tax for the group.

CONSOLIDATION PRINCIPLESsubsidiaries are companies where the group has a controlling interest. a controlling interest is normally achieved when the group owns, directly or indirectly, more than 50 per cent of the voting

shares in the company and the group are able to exercise actual control over the company. sub-sidiaries are consolidated from the point in time when control is transferred to the group and eliminated from consolidation when such control ends.

the acquisition method of accounting is used for the acquisition of subsidiaries. the acquisition cost is assessed at the fair value of the assets that are contributed as consideration for the acquisition, equity instruments that are issued, li-abilities that are assumed, plus direct costs asso-ciated with the acquisition. identifiable acquired assets, liabilities and conditional obligations that are assumed to be inherent to the integration of a business are assessed at their fair value, inde-pendent of any minority interests. the portion of the acquisition cost that exceeds the fair value of identifiable net assets in the subsidiary is recog-nised as goodwill.

all internal transactions, outstanding accounts and unrealised gains between group companies are eliminated. unrealised losses are also elimi-nated unless the transaction establishes a loss in value on the transferred asset. the accounting policies in subsidiaries are changed as required achieving compliance with the group’s acco-unting policies.

transactions with minority interest owners in subsidiaries are treated as equity transactions. for the acquisition of shares from minority interest owners, the difference between the consideration and the share's proportionate share of the carrying amount of the net assets in the subsidiary is recognised in the equity of the parent company's owners. gains or losses from the sale to minority interest owners are recogni-sed correspondingly in the equity.

ASSOCIATED COMPANIES associated companies are units where the group has a significant, but not controlling, influence. a significant influence exists normally for inves-tments where the group has between 20 and

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notes to the blom group accounts

50 per cent of the voting capital. investments in associates are recognised in accordance with the equity method of accounting. at the time of acquisition investments in associates are recog-nised in the accounts at the historical cost. the group's share of profits or losses in associated companies is recognised in the income state-ment and added to the carrying value of the investments together with its share of unre-cognised changes in equity. the group does not recognise its share of the losses in the income statement if this entails that the book value of the investment becomes negative, unless the group has assumed liabilities or granted guaran-tees for the associated company’s liabilities. the group’s share of unrealised gains on transactions between the group and its associated compa-nies are eliminated. the same applies to unrea-lised losses unless the transaction indicates a write-down of the asset transferred.

SEGMENT INFORMATIONthe operating segments are reported in the same manner as the internal reporting to the group's highest decision-maker. the company’s highest decision-maker, who is responsible for the allocation of resources to and the assess-ment of earnings in the operating segments, is defined as the corporate management.

FOREIGN CURRENCy TRANSLATION a) Functional and presentation currenciesthe accounts of the individual units in the group are measured in the currency that is used prima-rily in the economic area where the unit operates (functional currency). the consolidated accounts are presented in norwegian kroner (nOk), which is both the functional and presentation currency for the parent company.

b) Transactions and balance sheet itemstransactions involving foreign currencies are translated into the functional currency using the exchange rates that are in effect at the time of the transactions. foreign currency gains and los-ses that arise from the payment of such trans-actions and the translation of monetary items

(assets and liabilities) at the rates in effect on the balance sheet date are recognised in the income statement. Currency gains and losses linked to loans, cash and cash equivalents are presented on a net basis as financial income or expenses. if the foreign currency position is regarded as the hedging of a net investment in foreign business operations the gains or losses are recognised as part of extended profit.

c) Group companiesWhen consolidating the accounts of foreign sub-sidiaries, the income statement is translated into the presentation currency according to average exchange rates for the year. balance sheet items are translated at the exchange rate in effect on the date of the balance sheet. Currency transla-tion gains or losses resulting from differences in the exchange rates in effect on the date of the balance sheet compared to the rates in effect at the previous year-end are recognised as part of extended profit and specified separately.

When consolidating differences from the trans-lation of net investments in foreign business operations, they are posted directly against equity. When portions of a foreign operation are sold the associated exchange difference that was recognised directly in equity is recognised in the income statement as part of the gain or loss on the sale.

goodwill and the fair value adjustments for as-sets and liabilities associated with the acquisition of a foreign unit are treated as assets and liabili-ties in the acquired unit and translated at the rate in effect on the date of the balance sheet.

REVENUE RECOGNITIONsales are recognised in the income statement when the revenue can be measured reliably, it is probable that the financial benefits attributable to the transaction will pass to the group and spe-cial criteria related to various forms of sale have been met. Reliable measurement of sales is not regarded as possible until all the conditions linked to the sale have been fulfilled. the group

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notes to the blom group accounts

bases its accounting estimates on historical data, an assessment of the type of customer and transaction, as well as any circumstances related to the individual transaction. the sale of services is recognised in the income statement in the period in which the service was perfor-med, based on the degree of completion of the transaction in question. the degree of comple-tion is determined by measuring the services provided in relation to the total agreed volume of services to be provided. in the period when it is identified that a project will lead to a negative result, the estimated loss on the contract will be recognised in full in the income statement. Work in progress represents the value of services performed in long-term projects, and the change in the work in progress is included under opera-ting revenues. the sale of licences is recognised in the income statement when the licences have been made available to the customer, and the risk related to the delivery has been transferred to the customer. in addition, the customer must have accepted the delivery as part of the con-tract, and the period for submitting complaints must have expired or documentation must exist that all the criteria related to the delivery have been met.

PROPERTy, PLANT AND EQUIPMENTProperty, plant and equipment are recognised in the accounts at historical cost less accumulated depreciation and write-downs. Historical cost includes costs that are directly attributable to the acquisition of the items. subsequent expenditure is added to the carried amount for the value of the asset or recognised separately on the ba-lance sheet, when it is probable that the future economic benefits related to the expenditure will go to the group, and that the expenditure can be reliably measured. Other repair and maintenance costs are recognised in the income statement in the period when the expenses are incurred.

depreciation is calculated based on the straight-line method so that the cost price of the non-current asset is depreciated to the residual value over the expected life of the asset:

airframes and engines 3-15 yearslasers and digital cameras 3-5 yearsOther equipment 2-5 years

long term and intangible assets that are depre-ciated are evaluated for impairment when condi-tions for future revenue no longer can substan-tiate the asset's booked value. the economic life of the non-current asset and the scrap value are reviewed on the date of each balance sheet and adjusted as required. When the book value of the non-current asset is higher than the estimated recoverable amount, the value is written down to the recoverable amount. gains and losses on disposals are presented as part of the operating profit/loss and calculated by comparing the sales price with the book value.

INTANGIBLE ASSETSgoodwill is the difference between the historical cost of the acquisition of a business and the fair value of the group’s share of the net identifiable assets in the business at the time of the acqui-sition. goodwill from the acquisition of subsidia-ries is treated as an intangible asset. goodwill is tested annually for impairment in value, and it is recognised at historical cost less accumulated write-downs and amortisation.

in evaluating whether there is a need to write down goodwill, it is allocated to separate cash flow generating units. this allocation is made to the cash flow generating units or groups of cash flow generating units that are expected to bene-fit from the acquisition.

Patents and licences have a limited economic life and are recognised on the balance sheet at his-torical cost less depreciation. Patents and licen-ces are depreciated by the straight-line method over their expected life (3-12 years).

ACCOUNTS PAyABLEtrade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. ac-counts payable are classified as current liabilities

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notes to the blom group accounts

if payment is due within one year or less. if not, they are presented as non-current liabilities. accounts payable are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

GOVERNMENT GRANTSgrants from the government are recognised at their fair value where there is a reasonable as-surance that the grant will be received and the group will comply with all attached conditions. government grants relating to costs are deferred and recognised in the income statement over the period necessary to match them with the costs that they are intended to compensate. government grants relating to property, plant and equipment are included in non-current liabilities as deferred government grants and are credited to the income statement on a straight-line basis over the expected lives of the related assets.

LOANS loans are recognised at their fair value when they are disbursed, less any transaction costs. in subsequent periods, loans are recognised at their amortised cost, as calculated by means of the effective interest rate method. the diffe-rence between the loan amount disbursed (less transaction costs) and the redemption value are recognised in the income statement over the term of the loan.

loans are classified as current liabilities unless there is an unconditional right to postpone pay-ment of the debt by more than 12 months from the date of the balance sheet.

TRADE RECEIVABLEStrade receivables are recognised at fair value. for subsequent measurement, trade receivables are assessed at their amortised cost by means of the effective interest method, less provision for losses that have been incurred. Provisions for losses on trade receivables are recognised when there are objective indicators that the group will not receive settlement in accordance with the

original terms. the amount of the write-down will be recognised in the income statement.

CASH AND CASH EQUIVALENTSCash and cash equivalents consist of cash, bank deposits, and other short-term, readily nego-tiable investments with an original maturity of less than three months. Credit facilities used are included under current liabilities on the balance sheet.

SHARE CAPITAL AND PREMIUMSOrdinary shares are classified as equity. Expen-ses that are directly attributable to the issuance of new shares less taxes are posted against the equity as a reduction in the proceeds.

Payments for the purchase of treasury shares are recognised as a reduction in equity. a loss or gain is not recognised in the income statement for any purchase, sale, issuance or cancellation.

TAXESthe tax charge in the income statement encom-passes the tax payable for the period and the change in deferred tax. tax is recognised in the income statement, except when it is related to items that are recognised directly in equity. if this is the case, the tax will also be recognised directly in equity.

the tax charge is calculated in accordance with the tax laws and regulations that have, or have essentially, been adopted by the tax authorities on the date of the balance sheet. it is the legis-lation in the countries where the group's sub-sidiaries or associated companies operate and generate taxable income that determine how the taxable income is calculated. the management evaluates the group's tax positions for each pe-riod with regard to situations where the current tax laws are subject to interpretation. Provisions are allocated for the expected tax charges based on the management's evaluations.

deferred tax is calculated for all the temporary differences between the tax values and consoli-

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48

dated accounting values of assets and liabilities. if deferred tax arises upon the initial recognition of liabilities or assets in a transaction that is not part of a business combination and does not affect either the reported or taxable profit on the transaction date, it will not be recognised in the balance sheet. deferred tax is determined by means of the tax rates and tax laws that have been adopted or essentially adopted on the balance sheet date, which are assumed to apply when the deferred tax asset is realised or when the deferred tax is settled.

deferred tax assets are recognised provided fu-ture taxable income is probable and the tempora-ry differences can be offset against this income.

deferred tax is calculated based on temporary differences from investments in subsidiaries and associates except when the group controls the timing for the reversal of the temporary diffe-rences, and it is probable that they will not be reversed in the foreseeable future.

PROVISIONSthe group recognises provisions in the accounts when there is a legal or self-imposed obligation to do so as a result of earlier events, there is a preponderance of evidence that the obliga-tion will be settled by a transfer of economic resources, and the size of the obligation can be estimated with an adequate degree of reliability. Provisions are not allocated for future operating losses.

PENSION SCHEMESthe companies in the group have different pen-sion schemes. the pension schemes are finan-ced in general by payments to insurance compa-nies or pension funds, as determined by periodic actuarial calculations. the group has both defined contribution and defined benefit plans. a defined contribution plan is a pension scheme in which the group pays fixed contributions to a separate legal entity. the group does not have any legal or other obligation to pay additional contributions if this unit does not have sufficient funds to pay

all employees benefits relating to their service in current and prior periods. the contributions are recognised as an employee benefit expense on a linear line basis for the period in question. Con-tributions paid in advance are recognised as an asset in the accounts if the contribution can be refunded or reduce future payments.

a defined benefit plan is a pension scheme that defines the pension payments employees will receive when they retire. Pension payments are normally dependent on one or more factors such as age, years of service and salary level. the liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets, together with adjustments for unrecognised actuarial gains or losses and past service costs. the pension obligation is calcula-ted annually by an independent actuary on the basis of a linear model. the present value of the defined benefits is determined by discounting the estimated future payments at the interest rate for a bond issued by a company with high creditworthiness in the same currency as the benefits will be paid with a term that is approxi-mately the same as the term of the associated pension obligation.

Estimate deviations due to new information or changes in the actuarial assumptions in excess of 10 per cent of the value of the pension assets or 10 per cent of the pension obligations will be recognised in the income statement over a pe-riod that corresponds to the employees' expec-ted average remaining service lifetime.

LEASINGleasing agreements where a significant part of the risk does not lie with the lessee are classi-fied as operating leasing agreements. Payments for operating leasing agreements (less any finan-cial subsidies/contributions from the lessor) are recognised in equal amounts over the term of the leasing agreement.

notes to the blom group accounts

Page 49: Blom ASA Annual Report 2010

49

leasing agreements for property, plant and equipment where the group has significant risk and control are classified as financial leasing agreements. financial leasing agreements are recognised on the balance sheet at the start of the leasing agreement at the lower of the fair value of the leased asset and the present value of the total minimum rent. Each rent payment consists of an interest element and a principal element. the interest element is recognised as a financial cost and the principal element reduces

the liability. the interest cost is recognised in the income statement under financial items, and it is distributed over the leasing period so that the interest rate on the residual liability is constant for each period. the leasing liability in question, less the interest costs, is classified under other non-current liabilities. Property, plant and equip-ment acquired through financial leasing agre-ements are depreciated over the shorter of the expected life of the asset or term of the leasing agreement.

notes to the blom group accounts

Page 50: Blom ASA Annual Report 2010

50

Operating revenues 501 304 117 873 0 619 177depreciation 63 533 318 644 200 382 377Operating profit/loss -72 009 -317 753 -38 456 -428 218net financial items -69 207Pre-tax profit/loss -559 019taxes -5 938Net profit/loss for the year -564 957 assets 435 432 172 544 200 318 808 294investments 34 612 43 557 340 78 508goodwill 71 659 54 040 0 125 699

Operating revenues 617 540 119 361 0 736 901depreciation 44 391 101 613 134 146 138Operating profit/loss -26 517 7 895 -35 210 -53 832net financial items -39 562Pre-tax profit/loss -93 960taxes 10 949Net profit/loss for the year -83 013 assets 586 459 566 178 260 958 1 413 595investments 30 258 70 773 0 101 031goodwill 93 915 176 664 0 270 579

noTe 1: segMenT inforMATion

BGES

BGES

BIS

BIS

Not allocated

Not allocated

Group

Group

(amounts in nOk 1,000)

(amounts in nOk 1,000)

in 2010 the group is reporting on its operations primarily in two business areas, blom information services, bis, and blom geo Engineering services, bgEs. the activities in the business areas are car-ried out primarily through independent companies, and the distribution of revenues, costs, assets and investments is based on the accounts of the individual companies.

THE RESULTS PER BUSINESS AREA FOR 2010 ARE AS FOLLOW:

assets allocated to segments consist primarily of property, plant and equipment, intangible assets, work in progress and trade receivables. deferred tax assets and cash are not allocated to segments. the parent company's operating expenses (primarily wages and salaries and costs related to the head office) and assets are not allocated to segments.

investments consist of the addition of property, plant and equipment and intangible assets.

THE RESULTS PER BUSINESS AREA FOR 2009 ARE AS FOLLOWS:

notes to the blom group accounts

Page 51: Blom ASA Annual Report 2010

51

the group’s largest markets by revenue are the nordic region, italy, spain and the uk. Operating reve-nues are allocated based on the customer's home country.

norway 43 813 46 939Other nordic countries 120 408 129 195italy 144 055 182 389spain/Portugal 62 764 112 226uk 40 439 74 947Romania 36 629 51 882Other countries 171 069 139 323Total operating revenues 619 177 736 901

norway 79 448 284 864Other nordic countries 109 929 152 314italy 255 194 318 589spain 85 956 220 197uk 12 709 88 492Romania 51 948 57 604Other countries 12 792 28 259Total intangible assets 607 976 1 150 319unallocated assets 200 318 263 276Total assets 808 294 1 413 595

norway 37 629 73 559Other nordic countries 1 026 4 542italy 24 631 5 579spain 9 116 7 296uk 210 5 398Romania 4 532 1 742Other countries 1 032 2 915Total extraordinary investments 78 168 101 032unallocated assets 340 0Total investments 78 508 101 032

2010

2010

2010

2009

2009

2009

(amounts in nOk 1,000)

(amounts in nOk 1,000)

(amounts in nOk 1,000)

OPERATING REVENUES:

ASSETS:

INVESTMENTS:

notes to the blom group accounts

Page 52: Blom ASA Annual Report 2010

52

2009 financial year Book value as of 1 January 2009 525 315 323 315 848Currency translation differences -16 -29 193 -29 209 additions 498 95 101 95 599 disposals/other movements 1) 78 5 055 -4 977depreciation for the year 86 91 332 91 418Book value as of 31 December 2009 843 294 954 295 797 As of 31 December 2009 Historical cost 1 135 552 276 553 411accumulated depreciation 292 257 322 257 614Book value as of 31 December 2009 843 294 954 295 797

2010 financial year Book value as of 1 January 2010 843 294 954 295 797Currency translation differences -47 -6 091 - 6 138additions 574 74 746 75 320disposals/other movements 56 7 021 7 077depreciation for the year 237 80 836 81 073Write-down for the year 0 132 702 132 702Book value as of 31 December 2010 1 077 143 050 144 127 As of 31 December 2010 Historical cost 1 596 588 111 589 707accumulated depreciation 519 312 359 312 878accumulated write-downs 0 132 702 132 702Book value as of 31/12/2010 2) 1 077 143 050 144 127

Buildings Machinery, fixtures,

etc.

Total

(amounts in nOk 1,000)

1) disposals/other movements include reclassification between property, plant and equipment and intangible assets.2) in property, plant and equipment includes leased equipment (note 15).

noTe 2: properTy, pLAnT AnD equipMenT

notes to the blom group accounts

Page 53: Blom ASA Annual Report 2010

53

noTe 3: inTAngiBLe AsseTs

2009 financial year Book value as of 1 January 2009 367 496 56 959 424 455Currency translation differences -53 147 -1 301 -54 448additions 0 5 431 5 431disposals/other movements 1) 0 13 439 13 439Write-downs for the year 43 770 0 43 770depreciation for the year 0 10 950 10 950Book value as of 31 December 2009 270 579 36 700 307 279 As of 31 December 2009 Historical cost 314 634 80 179 394 813 accumulated write-downs 44 055 0 43 770accumulated depreciation 0 43 479 43 764Book value as of 1 January 2010 270 579 36 700 307 279

2010 financial year Book value as of 1 January 2010 270 579 36 700 307 279Currency translation differences -12 727 594 -12 132additions 0 3 188 3 188disposals/other movements 0 849 849Write-downs for the year 2) 132 153 29 397 161 550depreciation for the year 0 7 052 7 052Book value as of 31 December 2010 125 699 3 184 128 883 As of 31 December 2010 Historical cost 301 907 82 406 384 313 accumulated write-downs 176 208 29 397 29 397accumulated depreciations 0 49 825 226 033Book value as of 31 December 2010 125 699 3 184 128 883

Goodwill Patents, licences and

similar rights

Total

(amounts in nOk 1,000)

1) disposals/other movements include reclassification between property, plant and equipment and intangible assets.2) the write-downs for 2010 include write-downs of licences regarding Pictometry.

WRITE-DOWN TEST FOR GOODWILLgoodwill in the company has arisen due to the acquisition of companies from 2004 to 2007.

the group performs annual tests to assess whether the value of goodwill is impaired. goodwill is recognised on the balance sheet at historical cost less write-downs. due to mutual cash flow depen-dency between the company’s legal entities within its two business areas, the company is regarded as a cash flow generating unit, and goodwill in the company is allocated to this cash flow generating unit. the recoverable amount from the cash flow generating units is calculated based on the value determined for the asset by calculating the utility value for the company. these calculations require the use of estimates..

notes to the blom group accounts

Page 54: Blom ASA Annual Report 2010

54

in 2010 the company took a write-down of nOk 113 million related to the bis segment and nOk 18 million related to the bgEs segment. the reason for these write-downs is a dispute with a supplier that has contributed to a reduction in the company's cash flow in 2010 and the creation of uncertainty concerning the future cash flows in the bis segment. for the bgEs segment, the year 2010 has been marked by continued weak macro-economic factors in many of the markets where blom operates, which also has a negative impact on the expected cash flows.

the testing of goodwill uses liquidity forecasts before tax based on the 2011 budget approved by the company's board of directors. different growth assumptions are used for each of the cash-genera-ting units, bgEs and bis, to reflect the expected market performance of the individual markets. in addition, a gradual reduction in the number of credit days to 130 and 50 days, respectively, for bgEs and bis has been assumed. the value of goodwill is tested by creating 5-year liquidity forecasts and using a cautiously estimated terminal value (1.5 per cent annual cash flow growth), and then disco-unting these cash flows by the required rate of return on the total assets. the required rate of return used in the test is 10.6 per cent before tax. the book value of property, plant and equipment and the net working capital exceeds the cash flow from the cash-generating units. see note 25 for a sensiti-vity analysis for the write-down test.

noTe 4: invenTory AnD WorK in progress

Work in progress includes accrued, unbilled work on long-term projects of nOk 152.5 million in 2010 and nOk 261.2 million in 2009.

noTe 5: TrADe AnD oTHer reCeivABLes

trade receivables 186 679 259 197Write-down for expected losses -22 345 -18 945Net trade receivables 164 334 240 252 Prepayments 11 460 13 565Other current receivables 29 037 21 839Total other current receivables 40 497 35 404 Total current receivables 204 831 275 656

2010 2009

(amounts in nOk 1,000)

notes to the blom group accounts

Page 55: Blom ASA Annual Report 2010

55

Per 1. January 18 945 30 077allocation for expected loss 6 116 13 365Write-down of accounts receivable 2010 - 1 330 - 24 497Reversing of unused amount - 1 386 0Per 31. December 22 345 18 945

Trade receivables not due for payment 103 663 165 925up to 30 days 21 356 11 499between 30 and 90 years 14 258 15 414Over 90 days 25 057 47 463total outstanding receivables 60 671 74 327Total trade receivables 164 334 240 252

nOk 8 315 9 981dkk 7 620 17 953gbP 5 444 8 923EuR 124 690 207 661Other currencies 18 265 31 139Total current receivables 164 334 275 657

2010

2010

2010

2009

2009

2009

(amounts in nOk 1,000)

(amounts in nOk 1,000)

(amounts in nOk 1,000)

CHANGE IN ALLOCATION FOR EXPECTED LOSS ON ACCOUNTS RECEIVABLES:

AGE DISTRIBUTION OF GROUP’S TRADE RECEIVABLES:

RECOGNISED VALUE OF THE GROUP'S TRADE By CURRENCy:

as of 31 december 2010 the provisions for probable losses on trade receivables totalled nOk 22,345,000 (2009: nOk 18,945,000). the provisions are related primarily to spain.

Other current receivables include, for example, prepaid government taxes, receivables from associa-ted companies and insurance settlement payments.

notes to the blom group accounts

Page 56: Blom ASA Annual Report 2010

56

Cash and bank deposits 75 229 149 837Restricted bank deposits 20 659 5 036short-term bank investments 0 10 000Total cash and cash equivalents 95 888 164 873

Book value of obligation: 18 031 20 625Pension benefits 18 031 20 625 Cost charged to the income statement (Note 12):defined benefit pension plans 503 2 063Pension plans based on deposits 9 158 6 725Pension cost 9 661 8 788

2010

2010

2009

2009

(amounts in nOk 1,000)

(amounts in nOk 1,000)

noTe 6: CAsH AnD CAsH equivALenTs

noTe 7: pensions

the restricted bank deposits include the employees' tax withholdings, government subsidies in Ro-mania and cash deposits for portions of the group's guarantees. the group has credit facilities total-ling nOk 65 million, and nOk 54 million of these facilities were used as of 31 december 2010.

blom asa has a corporate cash pooling system with skandinaviska Enskilda banken that covers most of the group's subsidiaries.

notes to the blom group accounts

Page 57: Blom ASA Annual Report 2010

57

Book value of obligation is determined as follows: Present value of accrued pension obligations for benefit plans in fund-based schemes 5 856 5 337fair value of plan assets -2 759 -2 759 3 097 2 578Present value of obligation for non-fund-based schemes 15 882 18 322unrecognised estimate deviations -926 -252unrecognised costs related to pension benefits earned in prior periods -21 -23Net pension obligations on the balance sheet 18 031 20 625

Pension obligations as of 1 January 21 713 25 067Present value of current year’s pension benefits earned 745 1 841interest costs 725 843actuarial losses/gains 571 473foreign currency fluctuations -1 717 -2 603benefits paid -1 247 -2 237Pension obligations as of 31 December 20 790 23 384

1 January -2 759 -2 759Expected return on plan assets -147 -147Contributions from employer 147 14731 December -2 759 -2 759

2010

2010

2010

2009

2009

2009

(amounts in nOk 1,000)

(amounts in nOk 1,000)

(amounts in nOk 1,000)

PENSION BENEFITS:

CHANGES IN THE DEFINED BENEFIT PENSION OBLIGATIONS DURING THE yEAR:

CHANGE IN THE FAIR VALUE OF THE PLAN ASSETS:

the following companies are included in this table:

blom asa, CgR (italy), blom deutschland (germany) and nusantara (indonesia)

notes to the blom group accounts

Page 58: Blom ASA Annual Report 2010

58

Cost of pension benefits earned in current period 86 1 483interest costs 360 401Expected return on plan assets - 147 - 147actuarial gains and losses 3 125Employers' share of national insurance contributions 201 201losses from reduction 0 0Total, including payroll costs (Note 12) 503 2 063

discount rate 3.05-8.0% 3.34-9.5%Expected return on plan assets 0.0-4.6% 0.0-5.6%annual salary inflation 2.0-10.0% 2.0-10.0%annual pension adjustment 0.5-3.0% 2.0-3.0%

men 16 15Women 19 19

2010

2010

2010

2009

2009

2009

(amounts in nOk 1,000)

(amounts in nOk 1,000)

TOTAL COST RECOGNISED IN THE INCOME STATEMENT:

ECONOMIC ASSUMPTIONS:

blom nusantara (indonesia) has a discount rate of 8.0 per cent.

a) mortality. the mortality assumptions are based on published statistics and experience in each individual country.

average life expectancy in norway (number of years) on the date of the balance sheet for a person who retires when he she reaches the age of 65 is as follows:

the average expected life in italy is 83 years for women and 78 years for men. the average expected life in germany is 82 years for women and 77 years for men.

the assets in fund-based schemes in norway are managed by a life insurance company that has in-vested the funds in compliance with the regulations that apply to life companies. the actual return on the plan assets was nOk 147,000 in 2010 (2009: nOk 147,000).

notes to the blom group accounts

Page 59: Blom ASA Annual Report 2010

59

noTe 8: LoAns AnD oTHer non-CurrenT LiABiLiTies

a bond loan of nOk 300 million was raised on 25 september 2009, and it is referred to as the fRn blom asa senior secured bond issue 2009/2012. the loan matures on 25 september 2012. security and financial covenants that are common for financing of this nature have been stipulated for the loan.

the covenants attached to the loan include maximum net interest-bearing liabilities / Ebitda (exclu-ding any intangible asset write-downs) of 3.50 and a minimum equity ratio of 40 per cent.

blom was in breach of the loan covenants as of 31 december 2010 with respect to the equity ratio and the ratio between net interest-bearing liabilities and Ebitda for the company's bond loan. the company has received a waiver for the loan covenants as of 31 december 2010. the board of direc-tors does not consider the loan covenants to be a temporary problem and finds that it is necessary to restructure the company's capital situation in order to establish a healthy financial foundation for our continuing operations.

the company did engage in negotiations with representatives for the bondholders with a view to such restructuring. the negotiated solution consists of a new senior bond loan of mnOk 50 million with a duration of one year, combined with a right offering aiming to raise up to mnOk 71 million, ref note 26 ” Events after the date of the balance sheet”.

the group has been granted a waiver from the loan covenants until august15, 2011, after this new loan covenants will be negotiated. additional information regarding this can be found under the liqui-dity risk chapter in note 22. the group has a credit facility and factoring agreement in blom italia. the value of the unused credit facility is nOk 11 million and the factoring amount is nOk 54 million. the group had total cash reser-ves of nOk 96 million, and thus the total available funds are nOk 107 million.the group also utilises lease financing (note 15).

Non-current liabilities: bond loans 0 288 330bank loans 23 719 26 816financial leasing 15 176 21 371Other non-current liabilities 1 891 19 840 40 786 356 366 Current interest-bearing liabilities: bond loans 298 939 0Credit facilities 54 184 89 824bank loans 18 509 15 615financial leasing 13 965 15 416 Other liabilities 3 826 0 389 423 120 855

2010 2009

(amounts in nOk 1,000)

THE COMPOSITION OF NON-CURRENT LIABILITIES AND CURRENT INTEREST-BEARING LIABILITIES IS AS FOLLOWS:

notes to the blom group accounts

Page 60: Blom ASA Annual Report 2010

60

Other non-current liabilities consist of loans of nOk 23 million provided by the spanish authorities with an interest-free period for the first years of the loans and grants from the spanish authorities totalling nOk 8 million, which will be reduced in step with the amortisation of relevant assets in blom spain.

the fair value of an interest-free loan provided by the spanish authorities of nOk 23 million and grants of nOk 8 million from the spanish authorities is nOk 16.9 million as of 31 december 2010.

the interest-bearing debt has adjustable interest rates or interest adjustment clauses that are shorter than three months at any given time. since the debt can be repaid at the points in time when the in-terest rate is adjusted, the difference between the fair value and book value will be small and insignifi-cant with the exception of the spanish interest-free loans and grant.

bond loans 10.7 % 10.2 % bank loans 3 - 6.8 % 2.5 - 6 %financial leasing 2.5 - 4.1 % 3 - 3.3 %Credit facilities 2.6 - 7 % 1.3 - 4.5 %Other non-current liabilities 0 % 0 %

NOK EUR/GBP

2010 2009

NOK EUR/GBP

(amounts in nOk 1,000)

THE EFFECTIVE INTEREST RATE ON THE DATE OF THE BALANCE SHEET WAS AS FOLLOWS:

nOk 309 068 302 949gbP 3 119 6 634EuR 115 528 144 628Other currencies 2 494 23 010 430 209 477 221

2010 2009

(amounts in nOk 1,000)

BOOK VALUE OF THE GROUP’S LONG-TERM DEBT AND CURRENT INTEREST-BEARING DEBT:

notes to the blom group accounts

Page 61: Blom ASA Annual Report 2010

61

bond loans* 298 939 bank loans 18 509 11 614 7 537 4 568 0 financial leasing 13 965 8 614 5 416 1 146 0 Credit facility 54 184 - - - - Other liabilities 3 826 1 891 0 0 0 Total 389 423 22 119 12 953 5 714 0

20122011 2013 2014 2015 –>

(amounts in nOk 1,000)

THE MATURITy STRUCTURE OF THE GROUP’S SHORT-TERM AND LONG-TERM INTEREST-BEARING DEBT IS AS FOLLOWS:

noTe 9: TAXes

deferred taxes are netted if the group has a legal right to offset deferred tax assets against deferred taxes on the balance sheet and if the deferred taxes are owed to the same tax authority. the follo-wing amounts have been netted:

*the bond loan is due 25th september 2012. due to breach of covenants the bond loan is classified as a short term loan.

Deferred Tax Assets: deferred tax assets that reverse after more than 12 months -38 048 - 46 837deferred tax assets that reverse within 12 months -1 632 -3 591Deferred tax assets as at 31 December -39 680 -50 428

Deferred tax: deferred tax that reverse after more than 12 months 5 139 10 700deferred tax that fall due for payment within 12 months 477 1 651Deferred tax as at 31 December 5 616 12 351Net deferred taxes - 34 064 -38 077

2010 2009

(amounts in nOk 1,000)

Book value as at 1 January -38 077 -26 083foreign currency translation -1 736 6 536Recognised in P&l account during the period 5 749 -18 530Book value as at 31 December -34 064 -38 077

2010 2009

(amounts in nOk 1,000)

CHANGE IN RECOGNISED DEFERRED TAXES:

notes to the blom group accounts

Page 62: Blom ASA Annual Report 2010

62

the deferred tax assets related to tax loss carry forwards are recognised on the balance sheet when it is probable that the group can apply this against future taxable income. the table below shows that most of the tax losses carry forwards expires after 2015 (or that there is no deadline linked to the right to carry forward). the deferred tax assets related to tax loss carry forwards that are not recogni-sed on the balance sheet totalled nOk 98.5 million as at 31 december 2010 and nOk 11.5 million as at 31 december 2009. deferred tax assets which is not recognised consists of carry forward losses in blom sistemas (tnOk 52 000), blom asa (tnOk 10 000), blom data (tnOk 12 000), the swedish subsidiaries (tnOk 10.000) in addition the danish subsidiary (tnOk 8 000). Reference is also made to note 25.

Deffered tax: 1 January 2009 9 981 1 074 2 411 13 466Recognised in P&l account - 3 164 577 1 472 - 1 11531 December 2009 6 817 1 651 3 883 12 351Recognised in P&l account - 3 158 - 187 - 3 390 - 6 73531 December 2010 3 659 1 464 493 5 616

Deferred tax assets: 1 January 2009 - 33 278 - 2 481 - 3 790 - 39 549 Recognised in P&l account - 22 046 - 1 636 6 267 - 17 415foreign currency differences 7 260 - 223 - 501 6 53631 December 2009 - 48 064 - 4 340 1 976 - 50 428Recognised in P&l account 37 530 - 9 734 - 15 312 12 484foreign currency differences - 1 260 - 75 - 401 - 1 73631 December 2010 - 11 794 - 14 149 - 13 737 - 39 680

Other

Other

Machinery and plant

Tax loss carry forward

Total

Total

Projects

Fixed assets

(amounts in nOk 1,000)

(amounts in nOk 1,000)

CHANGE IN DEFERRED TAX ASSETS AND DEFERRED TAXES (WITHOUT NETTING WITHIN THE SAME TAX REGIME):

notes to the blom group accounts

Page 63: Blom ASA Annual Report 2010

63

Expiration dates for tax loss carry forward2011 02012 02013 02014 542015 0later than 2015 16 144No restrictions 374 951Total tax loss carry forward 391 149

Amount

Tax charge:tax payable 189 7 581Change in deferred taxes 5 749 -18 530Total tax charge 5 938 -10 949

2010 2009

(amounts in nOk 1,000)

(amounts in nOk 1,000)

the tax payable on the balance sheet (tnOk 9,063) differs from the tax payable in the profit and loss account due to payments in advance.

the tax charge deviates from the amount that would have applied if the nominal tax rate in the vari-ous countries had been used. the difference can be explained as follows:

the weighted average tax rate was 1.1 % (2009: 11.7 %)

the following tax rates apply in the various countries in 2010:norway 28 per cent, sweden 26.3 per cent, denmark 25 per cent, finland 26 per cent, germany 39 per cent, uk 28 per cent, italy 27.5 per cent, spain 30 per cent and Romania 16 per cent

Pre-tax profit/loss -559 019 -93 960tax calculated at the tax rate of the various countries -122 083 -8 105non-taxable income 2 594 1 055non-tax deductible expenses 114 492 0utilisation and previously recognised tax loss carry forward -941 -3 899Taxes 5 938 -10 949

2010 2009

(amounts in nOk 1,000)

notes to the blom group accounts

Page 64: Blom ASA Annual Report 2010

64

Other current liabilities include provisions for potential obligations as a result of the uncertainty rela-ted to the Pictometry agreement (note 26).

noTe 11: CHArges on AsseTs AnD seCuriTy

machinery and plant totalling nOk 150.0 million, trade receivables totalling nOk 150.0 million and inventories totalling nOk 150.0 million have been pledged as collateral for the parent company’s debt to skandinaviska Enskilda banken as of 31 december 2010.

as security for the bond loan of nOk 300 million the parent company has pledged as collateral its shares in blom data as, blominfo a/s, blom geomatics as, blom kartta Oy, blom deutschland gmbh, blom aerofilms ltd, blom sweden ab, blom Environmental Coastal surveys ab, blom CgR and blom sistemas geoespeciales s.p.a. the financial covenants are described in note 8.

in addition, the subsidiaries, blom data as, blom geomatics as, blom info a/s, blom aerofilms ltd, blom CgR and blom sistemas geoespeciales s.p.a. have guaranteed the parent company’s loan covenants linked to the bond.

bank guarantees totalling nOk 76.7 million have been furnished by the company, primarily in connec-tion with the execution of projects. a cash deposit totalling nOk 13.2 million has been furnished as collateral for bank guarantees.

blom asa has furnished certain guarantees for scan subsea asa. blom asa has guaranteed that scan subsea asa will pay its rent in connection with the sale of the real estate in tønsberg. scan subsea asa was acquired in 2007 by the nysE listed company Parker Hannifin Corporation.

noTe 10: oTHer CurrenT LiABiLiTies

Prepayments 7 694 10 401Holiday pay etc. for employees 26 827 25 340interest/fees on bond loans 2 869 593Project costs 16 117 20 007Public subsidies (note 8) 19 670 0Other current liabilities 42 793 1 242Total other current liabilities 115 970 57 583

2010 2009

(amounts in nOk 1,000)

notes to the blom group accounts

Page 65: Blom ASA Annual Report 2010

65

noTe 12: pAyroLL CosTs

noTe 13: oTHer operATing AnD ADMinisTrATive eXpenses

noTe 14: finAnCiAL inCoMe AnD eXpenses

Wages and salaries 213 599 230 146Employers' share of national insurance contributions 45 072 45 724Pension costs 9 661 8 788Other benefits 8 882 12 896Total 277 215 297 554

travel expenses 6 619 7 754Rent and other office expenses 25 861 27 633sales and marketing costs 13 465 15 750Provisions for losses on inventories and receivables 27 214 11 132External assistance 25 432 18 371Other operating and administrative expenses 52 665 23 940Total 151 256 104 580

interest and other financial income 3 074 3 377interest and other financial expenses - 65 724 - 34 995net currency gains/losses -6 557 7 943Net finance - 69 207 - 39 562

2010

2010

2010

2009

2009

2009

(amounts in nOk 1,000)

(amounts in nOk 1,000)

(amounts in nOk 1,000)

the pension costs include both defined benefit and defined contribution schemes. the group had 1,093 employees as of 31 december 2010.

Other operating and administrative expenses include provisions for potential obligations in connection with the Pictometry agreement.

interest and other financial expenses in 2010 include costs in connection to the company’s bond loan and the financial reconstruction totalled nOk 21.6 million (note 8).

notes to the blom group accounts

Page 66: Blom ASA Annual Report 2010

66

noTe 15: finAnCiAL LeAsing AgreeMenTs

Property, plant and equipment acquired through financial leasing agreements include the following:

Historical cost recognised on balance sheet 113 363 111 637accumulated depreciation -81 240 - 70 891Book value as of 31 December 32 123 40 747

maturity within 1 year 16 877 15 600maturity between 1 and 5 years 15 404 18 821maturity later than 5 years 0 0 32 281 34 421

maturity within 1 year 19 056 21 307maturity between 1 and 5 years 21 014 35 696maturity later than 5 years 0 981 40 071 57 983

2010

2010

2010

2009

2009

2009

(amounts in nOk 1,000)

(amounts in nOk 1,000)

(amounts in nOk 1,000)

the present values of obligations related to financial leasing agreements are as follow:

the financial leasing agreements encompass the leasing of aircraft, sensors, vehicles and it-related equipment. the duration of the agreements is from 3 to 5 years. the leasing agreements have an adjustable interest rate.

noTe 16: operATing LeAsing AgreeMenTs

minimum future leasing payments related to operating leasing agreements are as follow:

the operating leasing agreements encompass the leasing of vehicles, offices, aircraft and it-related equipment.

notes to the blom group accounts

Page 67: Blom ASA Annual Report 2010

67

noTe 17: sHAre CApiTAL AnD sHAreHoLDer inforMATion

the share capital of blom asa as of 31 december 2010 was nOk 4,170,063.60, divided into 41,700,636 shares, each with a nominal value of nOk 0.10. there is one class of shares, and all of the shares are freely transferable.

there has been no increase in the share capital in 2010.

TREASURE SHARESat the company's annual general meeting on 29 april 2010 the board was authorised to acquire the company's own shares for a maximum of nOk 417,000 according to the nominal value of the shares. this authorisation can also be used in full or in part to raise a convertible loan. the authorisation re-mains in force until the next annual general meeting and is a continuation of an earlier authorisation.

no treasury shares were bought or sold in 2010. as of 31 december 2010 the company held a total of 1,100,000 treasury shares, which represents 2.64 per cent of the total number of outstanding shares. the average price for the shares is nOk 44.25.

OWNERSHIP STRUCTUREthe number of shareholders as of 31 december 2010 was 2,542, compared with 2,742 shareholders as of 31 december 2009. foreign shareholders have a 32.1 per cent ownership interest in the com-pany, compared with 46.4 per cent as of 31 december 2009..

BLOM’S 20 LARGEST SHAREHOLDERS AS OF 31 DECEMBER 2010:

Shareholder 1 JP mORgan ClEaRing C a/C CustOmER safE k nOm 4 102 009 9.84 %2 gOldman saCHs & CO - sECuRity CliEnt sEgR nOm 3 963 469 9.50 %3 finansPaRtnER inVEst as 2 129 213 5.11 %4 gOldman saCHs int. - sECuRity CliEnt sEgR nOm 1 782 500 4.27 %5 blOm asa 1 100 000 2.64 %6 bJØRnstad & JEndal as 1 023 648 2.45 %7 Ebas COnsulting as 1 000 000 2.40 %8 mP PEnsJOn 826 524 1.98 %9 dEutCHE bank ag CliEnts aCCOunt nOm 526 000 1.26 %10 O. HOVdE as 498 000 1.19 %11 tRan tRuC CHanH 485 330 1.16 %12 nORdnEt bank ab nOm 438 797 1.05 %13 VPf nORdEa VEkst JPmORgan EuROPE ltd 393 900 0.94 %14 EiEndOmsutVikling kR 300 000 0.72 %15 tHundER inVEst as 300 000 0.72 %16 agat as 292 000 0.70 %17 Citibank n.a. nEW yORk a/C dfa-intl sml CaP nOm 270 088 0.65 %18 HaVtRÅl as 250 000 0.60 %19 staV, Jan OlE 225 000 0.54 %20 ClEaRstREam banking nOm 223 000 0.53 % Total 20 largest shareholders 20 129 478 48.27 % Others 21 571 158 51.73 % Total 41 700 636 100.00 %

Number %

notes to the blom group accounts

Page 68: Blom ASA Annual Report 2010

68

shares held by members of the board of directors and CEO: no. of shares as 31 december 2010 gunnar Hirsti board Chairman 0 dirk blaauw CEO and board member 0Per kyllingstad board member 0 bente loe board member 7 500brita Eilertsen board member 0

finanspartner invest as Related party to dirk blaauw and gunnar Hirsti 2,129,213

noTe 18: eArnings AnD DiLuTeD eArnings per sHAre

the earnings per share is calculated by dividing the net profit/loss for the year with the weighted average of outstanding ordinary shares throughout the year, less the company's own shares.

there are no financial instruments that can dilute the shares.

notes to the blom group accounts

net profit loss for the year (in nOk 1,000) -564 957 -83 012 Weighted average of number of outstanding shares (1,000s) 40 600 40 600 Earnings and diluted earnings per share (NOK) -13.91 -2.04

2010 2009

(amounts in nOk 1,000)

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69

noTe 19: Key eXeCuTives

Pursuant to section 6-16a of the Public limited Companies act, the board of directors’ shall prepare a separate statement concerning the adoption of salaries and other remuneration to the CEO and executive management. Pursuant to section 5-6 of the Public limited Companies act a consultative vote shall be held on the board of directors' guidelines for setting the salary level for the next acco-unting year. if the guidelines include share-based payment schemes, then such schemes shall also be approved by the general meeting. the board of directors proposes the following guidelines, which are to be subjected to a consultative vote at the general meeting in 2011:

DECLARATION CONCERNING STIPULATION OF SALARy AND OTHER REMUNERATION TO KEy EXECUTIVES

Guidelines for 2011the company’s key executives are paid a fixed salary that reflects the employee’s education, experi-ence and professional qualifications. it is important that the remuneration is at a level that makes it possible to attract the best qualified persons to the company’s key positions.

in addition to their base salary, key executives can receive a variable bonus of up to 30 per cent of the individual’s gross annual salary. the size of the bonus paid to the individual employees will be depen-dent in part on the achievement of individual targets and in part on the performance of the group. the targets for the CEO are set by the board of directors. the CEO has set the targets for key executives.

key executives receive free car, free telephone, mobile phone, internet, newspapers and canteen as benefits in kind. key executives in norway are members of the company's defined contribution scheme in the same manner as other employees. the retirement age for key executives follows the local legislation. if employment is terminated the individual employees are entitled to a salary for a maximum of 12 months after the termination of employment.

blom believes that the company’s performance-based bonus agreements with key executives have a motivating effect and are in the best interest of the company and its shareholders.

the company does not currently have any agreements with key employees concerning the allocation of shares, subscription rights, options and other forms of remuneration linked to shares or the perfor-mance of the company's share or shares of other companies within the group.the board of directors will, however, continuously consider incentive schemes that are appropriate to secure a qualified management for the company, including the use of various share option schemes.

Implemented executive remuneration policy for 2010the remuneration of key executives in 2010 has been in accordance with the declaration that was presented to the general meeting in 2010.

notes to the blom group accounts

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70

NOK NOK NOKdirk blaauw CEO 3 000 000 0 199 868lars bakklund CfO 1 962 500 0 141 000nils karbø CtO 1 500 000 0 194 618gunnar Hirsti board Chairman 600 000 0 120 000

NOK NOK NOKdirk blaauw board Chairman until 30/6 900 000 0 110 271dirk blaauw CEO from 01/07 1 500 000 0 110 271Håkon Jacobsen CEO until 30/06 / COO until 31/12 2 750 000 0 134 894Jan Erik braathen CfO until 30/09 / Controller until 31/12 1 036 920 0 16 894lars bakklund CfO from 01/10 462 500 0 0nils karbø CtO 1 245 626 0 207 421gunnar Hirsti board Chairman from 01/07 300 000 0 60 000

Bonus earned

Bonus earned

Base salary

Base salary

Name

Name

Position

Position

Other taxable

benefits

Other taxable

benefits

KEy EXECUTIVES salary and other remunerations to key executives in 2010:

nOk 670,000 was charged against income in 2010 for the early retirement scheme for CEO dirk bla-auw and the total pension obligation was nOk 4,035,000. the pension rights apply from age 62, and the assumptions made for the pension obligation are a return of 0.0 per cent, discount rate of 3.60 per cent, expected national insurance basic amount (g) adjustment of 4.0 per cent and wage inflation of 4.0 per cent.

salary and other remunerations to key executives in 2009:

nOk 1,468,526 was charged against income in 2009 for the early retirement scheme for CEO dirk blaauw and the total pension obligation was nOk 3,366,300. the pension rights apply from age 62, and the assumptions made for the pension obligation are a return of 0.0 per cent, discount rate of 4.40 per cent, expected national insurance basic amount (g) adjustment of 4.0 per cent and wage inflation of 4.25 per cent.

Remuneration to the board of directors paid for the period from 1 may 2009 to 29 april 2010:

gunnar Hirsti 450 000dirk blaauw 225 000Per kyllingstad 225 000bente loe 225 000brita Eilertsen 225 000Sum 1 350 000

Blom ASA

NOK

notes to the blom group accounts

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71

the following provisions have been made for remuneration of the board of directors for the period from 30 april 2010 to 5 may 2011 (annual general meeting):

kyllingstad kleveland advokatfirma, where board member Per kyllingstad is managing director and owner of 14.29% of the firm, have recieved nOk 2,930,000 for legal services.

noTe 20: AuDiTor

auditor's fees totalling nOk 2,526,000 were charged against income in the group for 2010 (2009: nOk 2,025,000). in addition, there were fees for other certification services (including declarations associated with share capital increases and agreed audit procedures) totalling nOk 564,000 (2009: nOk 37,000), as well as fees totalling nOk 70,000 (2009: nOk 241,000) for tax consulting (including technical assistance with tax papers and advice on tax matters). a total of nOk 520,000 (2009: nOk 771,000) was charged against income for other non-auditing services. the amounts quoted are exclu-sive of value-added tax.

noTe 21: fAir vALue of AsseTs AnD LiABiLiTies, As WeLL As finAnCiAL AsseTs By CATegory

With the exception of loans with an interest-free period and grants for 2010, there is no difference between the fair value and book value of assets and liabilities.

the fair value of loans with an interest-free period provided by the spanish authorities of nOk 23 million and grants of nOk 8 million from the spanish authorities totalled nOk 16.9 million as of 31 december 2010, while the corresponding figure as of 31 december 2009 was nOk 19 million.

gunnar Hirsti 450 000dirk blauuw 225 000Per kyllingstad 225 000bente loe 225 000brita Eilertsen 225 000Sum 1 350 000

Blom ASA

NOK

notes to the blom group accounts

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72

FINANCIAL INSTRUMENTS By CATEGORy:

Assets Loans and Non- Total receivables financial assets

non-current asset investments 3 119 21 134 24 253trade receivables 164 334 0 164 334Other current receivables 29 037 11 460 40 497Cash and cash equivalents 95 888 0 95 888Total 292 378 32 594 324 972 Liabilities Financial Non- Total liabilities at financial amortised liabilities cost

non-current liabilities 46 402 0 46 402Credit facilities 54 184 0 54 184Other interest-bearing current liabilities 335 239 0 335 239trade payables 92 381 0 92 381Other current liabilities 108 276 7 694 115 970Total 636 482 7 694 644 176

Assets Loans and Non- Total receivables financial assets

non-current asset investments 5 884 4 369 10 253trade receivables 240 252 0 240 252Other current receivables 21 839 13 565 35 404Cash and cash equivalents 164 873 0 164 873Total 432 848 17 934 450 782 Liabilities Financial Non- Total liabilities at financial amortised liabilities cost

non-current liabilities 356 366 0 356 366Credit facilities 89 824 0 89 824Other interest-bearing current liabilities 31 031 0 31 031trade payables 104 798 0 104 798Other current liabilities 47 182 10 401 57 583Total 629 201 10 401 599 558

2010

2009

2010

2009

2010

2009

(amounts in nOk 1,000)

(amounts in nOk 1,000)

notes to the blom group accounts

Page 73: Blom ASA Annual Report 2010

73

noTe 22: finAnCiAL risK

the group’s activities entail different types of financial risk: market risk (foreign currency and interest rates), credit risk, liquidity risk and risk associated with asset management. the group’s risk manage-ment is provided by a central financial function in close cooperation with the subsidiaries. the purpo-se of risk management is to minimise the potential negative effects of the group’s financial results.

Market riska. Foreign currency riskthe company is somewhat exposed to fluctuations in foreign exchange rates, since substantial reve-nues are in foreign currencies other than nOk, primarily EuR. the company has relatively large ope-rative subsidiaries in nine European countries, four of which use the Euro as their functional currency, while the five remaining subsidiaries use five other functional currencies.

the company has certain investments in foreign subsidiaries, whose net assets are exposed to for-eign currency translation risk. Currency exposure arising from the group’s net investments in foreign operations is managed essentially though raising loans in the relevant foreign currency.

the company focuses on reducing any foreign currency risk associated with cash flows and does not focus on reducing the foreign currency risk associated with assets and liabilities. the subsidiaries’ income and expenses are in the same currency, and this reduces the group’s cash flow exposure to a single currency substantially. an assessment of the need for and any hedging of currency risks are performed by a central financial function. in 2010 the company did not find it necessary to hedge cash flows against currency risks through forward contracts.

in 2010 the net foreign currency loss in the net financial items totalled nOk 6.6 million.

the company has investments in foreign subsidiaries, whose net assets and goodwill are exposed to a foreign currency translation risk. the translation difference for the equity as of 31 december 2010 totalled nOk -26 million.

the Euro rate as of 31 december 2010 was 7.81 against nOk, while the average of the monthly av-erage rates that is used to translate the income statement was 8.01 against nOk.

b. Interest rate riskthe group’s interest-bearing assets are cash and cash equivalents, and the group’s profit and cash flow from operations are in general independent of changes in market interest rates.

the group has interest-bearing liabilities as described in note 8. the interest-bearing debt has adjusta-ble or fixed interest rates that are shorter than three months at any given time. since the debt can be repaid at the points in time when the interest rate is adjusted, the difference between the fair value and book value will be small and insignificant.

the group's interest rate risk is associated with long-term loans, financial leasing and credit facilities. all of the company’s interest-bearing debt is subject to adjustable interest rates. the company has not made use of interest rate swaps or other financial instruments. a change in the interest rate level by 1 per cent will entail a change in the interest costs of around nOk 4.4 million.

notes to the blom group accounts

Page 74: Blom ASA Annual Report 2010

74

Credit riskthe company has not entered into any transactions that involve financial derivatives or other financial instruments. the counterpart risk in financial transactions is, therefore, non-existent.

the credit risk in connection with sales to customers is managed in the local subsidiaries and at the group level for particularly large projects. the credit risk will be monitored locally with central moni-toring of the local subsidiary. the company has guidelines for new contracts that focus on various elements, all of which shall contribute to the customer paying the company as quickly as possible.

the company’s customers in bgEs are primarily municipalities or government agencies, or compa-nies or institutions where municipalities or government agencies have a dominant influence. the com-pany considers the risk of potential future losses from this type of customer to be relatively low.

during the last two years in bis the company has acquired more customers who are private compa-nies in handheld terminals, web services and navigation. these customers have by definition a higher probability for potential future losses than the company’s original customer group. as of 31 decem-ber 2010 the company has provisions of nOk 22.3 million for potential future losses on specific trade receivables. these provisions have in general been designated for specific private customers exposed to competition who have acquired services from blom’s existing database of oblique images. the company has earmarked provisions for specific customers and evaluated the size of the potential loss.

the company is focusing on the reduction of outstanding trade receivables. the age distribution of the group’s trade receivables is specified in note 4. the company’s bgEs segment is expected to have a higher percentage of trade receivables and work in progress compared with the bis segment. this is due to the duration of the projects and the customers’ delivery terms in bgEs.

trade receivables (invoiced to customers) and work in progress (not yet invoiced to customers) total-led nOk 317 million as of 31 december 2010, compared with nOk 501 million as of 31 december 2009, i.e. a reduction of 36.7 per cent.

Liquidity riskthe company’s management of liquidity risk entails maintenance of adequate liquid reserves and credit facilities. the central management team and the local managers of subsidiaries monitor the group’s liquid resources and credit facilities through revolving forecasts based on the expected cash flow.

the company considers its liquidity to be satisfactory after the added liquidity through the new bond loan totalling nOk 50 million. in addition, the rights offering with an aim of raising mnOk 73 million will strengthen the company’s capital structure. the company had nOk 94 million in liquid reserves at the end of the year as of 31 december 2010, compared with nOk 165 million at the end of the previ-ous year. the group has an unused credit facility and factoring agreement in blom italia. the value of the unused credit facility is nOk 11 million and the factoring amount is nOk 54 million. the group had total cash reserves of nOk 96 million, and thus the total available funds are nOk 107 million.

the maturity structure of the group’s long-term debt (excluding deferred tax liabilities) and short-term interest-bearing debt is specified in note 8.

notes to the blom group accounts

Page 75: Blom ASA Annual Report 2010

75

in addition, the company has current liabilities of nOk 116 million as of 31 december 2010, as speci-fied in note 10.

the group has current assets excluding cash and cash equivalents of nOk 359.9 million as of 31 december 2010.the company will need to renegotiate the new loan covenants on the loan “fRn blom asa senior bond issue 2009/2012” before the15. august 2010.these negotiations will have some uncertainty in terms of final agreed result and therefore pose a risk to the group. there can be no assurance that the bondholders will agree to covenants which are satisfactory to the group. a breach of the revised loan covenants will constitute a default under the terms of the agreements. the company’s ability to comply with these restrictions and covenants, including meeting financial ratios and measures, is dependent on its future performance and may be affected by events beyond its control. if a default occurs under these agreements, lenders could terminate their commitments to lend or accelerate the outstanding loans and declare all amounts borrowed due and payable. if any of these events occur, the company cannot guarantee that the company’s assets will be suf-ficient to repay in full all of its outstanding indebtedness, and the company may be unable to find alternative financing. Even if the company could obtain alternative financing, that financing might not be on terms that are favourable or acceptable. if the financing available to the company is insufficient to meet its financing needs, it may be forced to reduce or delay capital expenditures, sell assets or businesses at unanticipated times and/or at unfavourable prices or other terms, seek additional equity capital or restructure or refinance its debt. there can be no assurance that such measures would be successful or adequate to meet the company’s financing needs. additional information can be found in note 26.

Risk associated with asset management:the company has managed its surplus liquidity primarily by depositing it with its main banks or in short bond funds with a low credit risk. the company considers this counterparty risk to be relatively limited.

noTe 23: invesTMenTs in AssoCiATeD CoMpAnies investments in associated companies consist of the following companies:

ndrive navigation systems s.a Portugal 20% 45 246 0 1 710 30 394 7 219 9 343i-JOy Europe s.l. spain 25% 0 23 438 0 17 188 0 6 250Sum 45 246 23 438 1 710 47 582 7 219 15 593

Elimination internal

profit

Share result

Amorti-sation

Country Owner-ship

Value31.12.2009

Increases/decreases

Company Name

Value31.12.

2010

Ownership and voting share is the same in both companies.

as a result of weak macroeconomic conditions in the markets the associated companies operate, the group has written down nOk 47.6 million on the value of the shares and additional nOk 15.7 million on the value of the receivables. .

notes to the blom group accounts

Page 76: Blom ASA Annual Report 2010

76

noTe 24: suBsiDiAries

THE FOLLOWING DIRECTLy AND INDIRECTLy OWNED SUBSIDIARIES ARE INCLUDED IN THE CONSOLIDATED ACCOUNTS: blom data as, Oslo (100%)blominfo a/s, denmark (100%)blom kartta Oy, finland (100%)fmkaart Ou, Estonia (100%)blom geomatics as, Oslo (100%)blom Romania s.R.l, Romania (100%)blominfo sP z.o.o., Poland (100%)Pt. blom nusantara, indonesia (90%)blom sWE ab, sweden (100%)blom international ab, sweden (100%)blominfo ukraine, ukraine (51%)blom deutschland gmbH, germany (100%)blom aerofilms ltd, England (100%)blom sweden ab, sweden (100%)blom CgR s.p.a., italy (100%)Consorzio Compagnie aeronautiche s.r.l., italy (80%)Compagnia aeronautica Emiliana s.r.l., italy (100%)blom sistemas geoespaciales s.l.u, spain (100%)trabajos aereos s.a., spain (100%)blom Portugal, Portugal (100%)blom Environmental and Coastal survey ab, sweden (100%)Î.C.s. blom s.R.l, moldovia (100%)blom bulgaria EOOd, bulgaria (100%)

noTe 25: iMporTAnT ACCounTing esTiMATes AnD DisCreTionAry AssessMenTs

Estimates and discretionary assessments are evaluated continuously and based on historical experi-ence and other factors, including expectations of future events that are regarded as probable under the current circumstances. the group prepares estimates and makes assumptions concerning the future. the accounting estimates that are made as a result of this will rarely coincide in full with the final outcome. the most important valuation items for blom asa are discussed below.

Goodwillthe group performs annual tests to assess the value of goodwill (note 3). the recoverable amount from cash flow generating units is determined by calculation of the utility value. these calculations require the use of estimates.

if the required rate of return is increased by 2 percentage points to 12.6 per cent, the testing of good-will will result in the need for a write-down of nOk 116.6 million.

notes to the blom group accounts

Page 77: Blom ASA Annual Report 2010

77

if a reduction in the number of credit days by 7 in bgEs from 2011 to 2015 does not take place, the testing of goodwill will result in the need for a write-down of nOk 24.4 million.

if the growth in the terminal value from 2015 and beyond is reduced to 0 per cent, the testing of goodwill will result in the need for a write-down of nOk 47.7 million.

Deferred tax assetslthe group is taxed for income in many different jurisdictions. the use of discretion is required to de-termine the income tax in all the countries combined in the consolidated accounts. for many transac-tions and calculations there will be uncertainty related to the ultimate tax liability. the group recogni-ses deferred tax assets on its balance sheet insofar as it is probable that there will be taxable income in the future.

the tax loss carry forward represents most of the deferred tax assets. the company has recogni-sed the tax effect of the tax loss carry forward of nOk 45 million on the balance sheet and nOk 38 million of this amount is not time limited. if the company does not manage to utilise the time limited tax loss carry forward, the company’s deferred tax assets would be reduced by the tax effect of a tax loss carry forward of nOk 26 million, i.e. around nOk 7 million.

Recognition of project incomeRecognition of project income shall be in accordance with the percentage of completion method. this method requires that the group make discretionary assessments concerning what percentage of the total project has been delivered on the date of the balance sheet.

the company has recognised work in progress of nOk 152 million as of 31 december 2009. Work in progress is recognised as revenue, but not invoiced to the customer as of 31 december 2009. if the percentage of services delivered on the date of the balance sheet in relation to the total services de-livered was to deviate 10 per cent from the management’s estimate, the revenue for the year would change by nOk 15 million.

Provisions for receivablesthe provisions for receivables are based on the management’s discretionary assessment of potential future losses on trade receivables. the company’s customers are primarily municipalities or govern-ment agencies, or companies or institutions where municipalities or government agencies have a dominant influence. the company considers the risk of potential future losses from this type of custo-mer to be very low.

during the last two years the company has also acquired more customers who are private companies in handheld terminals, web services and navigation. these customers have by definition a higher pro-bability for potential future losses than the company’s original customer group.

as of 31 december 2010 the company has provisions of nOk 22.3 million for potential future losses on specific trade receivables. these provisions have in general been earmarked for specific private customers who have acquired services from blom’s existing database of oblique images. the compa-ny has earmarked provisions for specific customers and evaluated the size of the potential loss. if any losses upon realisation were to deviate 10 per cent from the management’s estimate, the realised losses in relation to the provisions would change by nOk 2 million.

notes to the blom group accounts

Page 78: Blom ASA Annual Report 2010

78

noTe 26: evenTs AfTer THe DATe of THe BALAnCe sHeeT

an extraordinary general meeting was held on 18 march 2011. the general meeting resolved that the company should seek to carry out a right issue giving gross proceeds up to nOk 73.1 million, through which the company’s share capital be increased by a minimum of nOk 0.10 and a maximum of nOk 24 360 381.60 through the issuance of a minimum of 1 and a maximum of 243 603 816 new shares. the new shares will be issued at a subscription price of nOk 0.30 per share to be paid in cash.

further, the general meeting decided to shall take up a convertible loan with nominal value nOk 50 million. the issuance of the convertible loan is conditional upon the gross proceeds from the right issue are below nOk 50 million or 166,666,667 new shares. if the subscriptions in the rights offering amount to less than nOk 50 million or 166,666,667 new shares, the bondholders will have the right to convert nOk 50 million of the existing bond loan into a new zero-coupon convertible bond with a conversion price of nOk 0.30 per share.

in accordance with a resolution passed by the bondholder meeting on 23 march 2011, the Company was given the right to issue an additional bond loan of nOk 50 million. the new bond loan of nOk 50 million is fully subscribed. interest rate is nibor +11%, interest is due quarterly. Principle amount nOk 50 million is due in march 2012. further, interest accruing on the present bond loan during 2011 shall be paid in kind by issuing additional bond to the existing bond loan. the maturity on fRn blom asa senior secured bond issue 2009/2012 is unchanged, september 2012.

Pictometry international Corp. advised blom asa on 16 October 2010 that the company found that blom had breached the licence agreement that was entered into on 29 January 2009, and Pictometry terminated the agreement with immediate effect. blom is of the opinion that the company has not acted in breach of the agreement and that the termination is thus invalid. blom has taken the steps necessary to safeguard the company’s interests in the short term through its legal advisors.

as a result of this, blom was granted a preliminary injunction in a case that the company brought before a court in new york on december 2, 2010 claiming that the agreement must be re-established until a valid judgment is handed down. at the same time the judge ruled that blom was not to deliver Pictometry-related services to infoterra ltd. according to an agreement between the company and infoterra ltd., later transferred from infoterra ltd. to astrium sas, until a final verdict has been made as a result of this ruling, blom was notified by its partner that the company was considered to be in breach of the conditions of the cooperation agreement. blom did not manage to comply with the ar-guments put forward by the agreed deadline, and the agreement is therefore terminated by astrium sas on January 21, 2011.

in the event that the parties cannot find a solution, the case shall be decided through arbitration ac-cording to the iCC rules. if the arbitration court were to rule in favour of Pictometry desire to termi-nate the license agreement, the company cannot engage in activities directly in competition with Pictometry and its license holders within the geo-referenced oblique imagery over a period of 3 years. this may have significant impact on the company’s bis-division.

notes to the blom group accounts

Page 79: Blom ASA Annual Report 2010

79

blom and Pictometry have recently invested a lot of resources to find a solution for the dispute outside of the agreed legal proceedings. the parties have, therefore, appointed a voluntary mediator. both parties strive to find a solution outside the legal system. the parties have not yet reached any agreement, but they are still working to find a solution.

notes to the blom group accounts

Page 80: Blom ASA Annual Report 2010

blom asa accounTs

Page 81: Blom ASA Annual Report 2010

81

blom asa accounts

Operating revenues 1 22 300 20 600 salaries and personnel cost 2 22 863 21 805Ordinary depreciation 3 200 134Other operating and administrative costs 4 15 393 13 272Operating expenses 38 456 35 211 Operating profit/loss -16 156 -14 611 financial income/expenses -24 676 -12 498group contributions received 0 31 482Write down of equity interests in subsidiaries/associates 14/15 -460 154 -80 000Net financial items -484 830 -61 016 Pre-tax profit/loss -500 986 -75 626 Taxes 10 2 907 -1 258Net profit/loss for the year -498 079 -76 884 Allocation of profit/loss transferred to/from other reserves 498 079 76 884Total allocations 498 079 76 884

profiT AnD Loss ACCounT – BLoM AsA

Note 2010 2009

(amounts in nOk 1,000)

Page 82: Blom ASA Annual Report 2010

82

blom asa accounts

intangible assets 10 7 178 4 271Property, plant and equipment 3 302 162 shares in subsidiaries 14 289 807 447 079investments in associated companies 15 417 45 811non-current receivables 15 42 778 70 174Total non-current asset investments 348 002 563 063 Total non-current assets 355 482 567 497 Current receivables 5/15 126 271 343 183Cash and cash equivalents 6 26 265 90 599 Total current assets 152 536 433 782 TOTAL ASSETS 508 018 1 001 279

BALAnCe sHeeT – BLoM AsAASSETS

Note 2010 2009

(amounts in nOk 1,000)

Page 83: Blom ASA Annual Report 2010

83

blom asa accounts

Oslo, 24 march 2011

dirk blaauwboard member/CEO

Per kyllingstadboard member

gunnar Hirstiboard Chairman

brita Eilertsenboard member

bente loeboard member

Called-up and fully paid share capital: share capital 4 170 4 170treasury shares -110 -110share premium account 129 581 129 581Retained earnings: Other reserves 50 950 549 007Total equity 8 184 591 682 648 Pension obligations 7 4 957 4 397Other non-current liabilities 9 0 288 735Total non-current liabilities 4 957 293 132 trade payables 2 599 1 377unpaid government taxes 934 1 247Other current liabilities 9/11/15 314 936 22 875Total current liabilities 318 470 25 499 TOTAL EQUITy AND LIABILITIES 508 018 1 001 279

BALAnCe sHeeT – BLoM AsAEQUITy AND LIABILITIES

Note 2010 2009

(amounts in nOk 1,000)

Page 84: Blom ASA Annual Report 2010

84

blom asa accounts

CASH FLOW FROM OPERATING ACTIVITIES Pre-tax profit/loss -500 986 -75 626+ depreciation and write-downs 460 354 80 134+/- group contributions received 0 -31 482+/- Change in current receivables -13 529 -11 956+/- Change in current liabilities -7 144 -5 510+/- Change in other accruals -2 690 16 914 A = Net cash flow from operating activities -63 995 -27 527 CASH FLOW FROM INVESTING ACTIVITIES - Purchases of property, plant and equipment -340 -87 B = Net cash flow from investing activities -340 -87 CASH FLOW FROM FINANCING ACTIVITIES + new long-term debt 0 287 269- Payments on long-term debt and loans 0 -200 000 C = Net cash flow from financing activities 0 87 269 A+B+C Net change in cash and cash equivalents -64 335 59 655+ Cash and cash equivalents 90 599 30 944 = Cash and cash equivalents 26 264 90 599

CAsH fLoW sTATeMenT – BLoM AsAINDIRECT MODEL

2010 2009

(amounts in nOk 1,000)

Page 85: Blom ASA Annual Report 2010

noTes To The blom asa accounTs

Page 86: Blom ASA Annual Report 2010

86

notes to the blom asa accounts

noTes To THe ACCounTs

GENERAL INFORMATIONthe accounts for blom asa have been prepared in accordance with the accounting act of 1998 and the generally accepted accounting principles in norway (ngaaP). in cases where the notes for the parent company are significantly different from the notes for the group, they are listed below. Reference is made otherwise to the note information for the group.

FOREIGN CURRENCy transactions involving foreign currencies are translated into the functional currency using the exchange rates that are in effect at the time of the transactions. gains and losses that arise from the payment of such transactions and the translation of monetary items in foreign cur-rencies at the rates in effect on the date of the balance sheet are recognised in the profit and loss account. the company uses norwegian kroner (nOk) as both its functional and presen-tation currency.

SUBSIDIARIESinvestments in subsidiaries are valued in accor-dance with the cost method and written down if the value in the balance sheet exceeds the reco-verable amount. Write-downs are reversed if the basis for the write-down no longer exists. the group contribution received from subsidiaries is recognised as income under financial income. the net group contribution paid is added to the acquisition cost for investments in subsidiaries.

PROPERTy, PLANT AND EQUIPMENTProperty, plant and equipment are recognised in the accounts at historical cost less accumulated depreciation and write-downs. depreciation is calculated based on the linear method so that the cost price of the non-current assets is depre-ciated to the residual value over the expected life of the asset.

LOANS loans are recognised at their fair value when they are disbursed, less any transaction costs. in subsequent periods, loans are recorded at their amortised cost, as calculated by means of the effective interest rate method. the difference between the loan amount disbursed (less trans-action costs) and the redemption value are re-cognised in the profit and loss account over the term of the loan. loans are classified as current liabilities unless there is an unconditional right to postpone payment of the debt by more than 12 months from the date of the balance sheet.

CASH AND CASH EQUIVALENTSCash and cash equivalents consist of cash, bank deposits and other short-term, readily negotia-ble investments. utilised overdraft facilities are included under current liabilities on the balance sheet.

ASSOCIATED COMPANIES associated companies are units where the group has a significant, but not controlling, influence. a significant influence exists normally for invest-ments where the group has between 20 and 50 per cent of the voting capital. investments in associates are recorded in accordance with the cost method of accounting. they are written down to fair value if an impairment in value is attributed to causes that cannot be expected to be of a temporary nature and must be regarded as necessary in accordance with the generally accepted accounting principles. Write-downs are reversed when the basis for the write-downs no longer exists.

TAXESthe tax charge in the profit and loss account encompasses the tax payable for the period and the change in deferred tax. deferred tax is calculated at the rate of 28 per cent on the basis of temporary differences between the financial accounting and tax-related values, in addition to any tax loss carryforward at the end of the acco-unting year. tax increasing or reducing temporary differences that may reverse during the same

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notes to the blom asa accounts

period are offset. deferred tax and tax assets that can be recognised on the balance sheet are recognised on a net basis on the balance sheet. deferred tax assets are recognised on the balance sheet provided future taxable income is probable and the temporary differences can be offset against this income.

PENSION SCHEMESthe company has both defined benefit and defined contribution schemes. the contributions are recorded as a payroll cost in the accounts as they fall due. Contributions paid in advance are recognised as an asset in the accounts if the contribution can be refunded or reduce future payments. the liability recognised in the balance sheet in respect of defined benefit pension plans

is the present value of the defined benefit obliga-tion at the balance sheet date less the fair value of plan assets, together with adjustments for unrecognised actuarial gains or losses and past service costs. Pension payments an employee will receive on retirement are normally depen-dent on one or more factors such as age, years of service and salary level. the defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. the present value of the defined benefits is determined by discounting the estimated future payments at the interest rate for a bond issued by a company with high creditworthiness in the same currency as the benefits will be paid with a term that is approximately the same as the term of the associated pension obligation.

noTe 1: revenues

Business areas:: information services 6 300 7 000geo Engineering services 16 000 13 600Total 22 300 20 600

Geographic areas: norway 5 900 6 100Other nordic countries 3 100 3 500Other Europe 13 300 11 000Total 22 300 20 600

2010 2009

(amounts in nOk 1,000)

the operating revenues consist of fees for services the parent company performs for companies in the group.

OPERATING REVENUES ARE ALLOCATED TO BUSINESS AREAS AND GEOGRAPHIC AREAS:

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noTe 3: properTy, pLAnT AnD equipMenT

noTe 4: oTHer operATing AnD ADMinisTrATive eXpenses

Cost at 1 January 2010 390 303additions during the year 340 87accumulated depreciation at 31 december 428 228Book value at 31 December 2010 302 162depreciation for the year 200 134

travel expenses 1 450 1 619Rent and other office expenses 1 511 1 301External services 9 548 7 755Other operating and administrative expenses 2 884 2 597Total 15 393 13 272

2010

2010

2009

2009

(amounts in nOk 1,000)

(amounts in nOk 1,000)

noTe 2: pAyroLL AnD pension

Wages 17 053 15 617national insurance contribution 2 870 2 260Pension costs 1 524 2 415Other benefits 1 416 1 513Total 22 863 21 805

2010 2009

(amounts in nOk 1,000)

Pension costs include both defined benefit and defined contribution schemes. in 2010 the average number of man-years was 10.

notes to the blom asa accounts

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89

noTe 5: CurrenT reCeivABLes

noTe 6: CAsH AnD CAsH equivALenTs

intragroup receivables (note 15) 111 346 335 189accrual items 750 554Other current receivables 14 175 7 440Total 126 271 343 183

Cash and bank deposits 12 470 79 664 Restricted bank deposits 13 795 935 short-term bank investments 0 10 000 Total 26 265 90 599

2010

2010

2009

2009

(amounts in nOk 1,000)

(amounts in nOk 1,000)

the intragroup receivables as of 31 december 2010 include the subsidiaries’ overdrafts on accounts that are part of the company’s cash pooling system and group contributions. Receivables from asso-ciated companies are included in other current receivables.

the parent company had nOk 0 in bad debts in 2010 and 2009.

blom asa has a cash pooling system with skandinaviska Enskilda banken (sEb) that covers most of the group's subsidiaries. Cash and bank deposits include the subsidiaries’ net deposits in accounts that are part of the company’s corporate account system. the restricted bank deposits include the employees' tax withholdings and cash deposits for portions of the company's guarantees (note 12).

notes to the blom asa accounts

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noTe 7: pensions

net pension costs – guaranteed schemes 25 17 net pension costs – non-guaranteed schemes 281 1 469 Total pension costs 306 1 486 net pension obligations – guaranteed schemes 922 1 030 net pension obligations – non-guaranteed schemes 4 035 3 367 Total pension obligations 4 957 4 397 Net pension costs – guaranteed schemes interest cost of pension obligations 151 144Return on plan assets -147 -147Employers' share of national insurance contributions 21 20Net pension costs 25 17 Net pension obligations accrued pension obligations at 31 december. 3 271 3 549Estimated pension obligations at 31 December 3 271 3 549 Plan assets (at market value) at 31 december 2 760 2 760unrecognised effect of estimate deviations/plan changes -50 -259Employers' share of national insurance contributions 461 500Net pension obligations 922 1 030 Net pension costs – non-guaranteed schemes Present value of current year’s pension benefits earned 177 1 125interest cost of pension obligations 69 161Employers' share of national insurance contributions 35 183Net pension costs 281 1 469 Net pension obligations accrued pension obligations at 31 december 3 836 2 882Estimated pension obligations at 31 December 3 836 2 882 Plan assets (at market value) at 31 december unrecognised effect of estimate deviations/plan changes -370 77Employers' share of national insurance contributions 569 406Net pension obligations 4 035 3 366 Economic assumptions discount rate 3.4 % 4.4 %Expected return on plan assets 4.6 % 5.6 %Expected salary inflation 4.0 % 4.25 %Expected pension increase 0.5-3.0 % 2.0-3.0 %Expected national insurance basic amount (g) adjustment 3.8 % 4.0 %

2010 2009

(amounts in nOk 1,000)

blom asa has a defined contribution pension scheme. this scheme covers 10 persons. in addition, the pension for two persons is covered by the company and charged against income.

the actuarial assumptions are based on the normal assumptions that are used by the insurance industry with regard to demographic factors.

notes to the blom asa accounts

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91

noTe 8: equiTy

Equity at 1 January 2010 4 170 -110 129 581 549 007 682 648 net profit/loss for the year - 498 079 - 498 079 Currency translation differences 22 22Equity at 31 December 2010 4 170 -110 129 581 50 950 184 591

Retained earnings

Share premium

Treasury shares

Share capital

Equity

(amounts in nOk 1,000)

noTe 9: non-CurrenT LiABiLiTies a bond loan of nOk 300 million was raised on 25 september 2009, and it is referred to as the fRn blom asa senior secured bond issue 2009/2012. the loan matures on 25 september 2012. security and financial covenants that are common for financing of this nature have been stipulated for the loan.

the covenants attached to the loan include maximum net interest bearing liabilities / Ebitda (exclu-ding any intangible asset write-downs) of 3.50 and a minimum equity ratio of 40 per cent.

blom was in breach of the loan covenants as of 31 december 2010 with respect to the equity ratio and the ratio between net interest bearing liabilities and Ebitda for the company's bond loan. the company has received a waiver for the loan covenants as of 31 december 2010. the board of direc-tors does not consider the loan covenants to be a temporary problem and finds that it is necessary to restructure the company's capital situation in order to establish a healthy financial foundation for our continuing operations.

the company did engage in negotiations with representatives for the bondholders with a view to such restructuring. the negotiated solution consists of a new senior bond loan of mnOk 50 million with a duration of one year, combined with a right offering aiming to raise up to mnOk 71 million, ref note 26 blom asa group ” Events after the date of the balance sheet”.

the company has been granted a waiver from the loan covenants until august 15, 2011. after this, new loan covenants will be negotiated.

notes to the blom asa accounts

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92

noTe 10: TAXes

Calculation of deferred tax assets/liabilities:Temporary differences: Property, plant and equipment -726 -868 Receivables -15 729 0Capital gain and loss account 13 250 16 562 Provisions in accordance with the generally accepted accounting principles -213 -813 Plan assets/pension obligations -4 957 -4 397 Net temporary differences -8 376 10 485tax loss carryforward -63 333 -25 739Basis for deferred tax assets -71 709 -15 254 28% deferred tax assets -20 079 -4 271Deferred tax assets on balance sheet -7 178 -4 271

Tax basis, change in deferred taxes and tax payable: Pre-tax profit/loss -500 986 -75 626 Permanent differences 30 501 118 Write-down of shares 414 031 80 000 Tax basis for current year -56 454 4 492 Change in temporary profit/loss differences 18 860 5 192Basis for tax payable in the profit and loss account -37 594 9 683use of tax loss carryforward 0 9 683 Tax breakdown: tax payable 0 0Change in deferred taxes -15 808 1 258Tax charge (28% of basis for the tax for the year) -15 808 1 258Share of deferred tax assets not recognised on the balance sheet 12 901 0Tax charge -2 907 1 258

2010 2009

(amounts in nOk 1,000)

tax loss carryforward is nOk 63.3 million.

the intragroup liabilities include the subsidiaries’ bank deposits in accounts that are part of the company’s cash pooling system.

noTe 11: oTHer CurrenT LiABiLiTies

intragroup liabilities (note 15) 7 358 15 754bond loan (note 9) 298 939 0interest and fees on loans 2 869 593Other current liabilities 5 770 5 718Total 314 936 22 875

2010 2009

(amounts in nOk 1,000)

notes to the blom asa accounts

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93

noTe 12: CHArges on AsseTs AnD seCuriTy

machinery and plant totalling nOk 150.0 million, trade receivables totalling nOk 150.0 million and inventories totalling nOk 150.0 have been pledged as collateral for the parent company’s debt to skandinaviska Enskilda banken as of 31 december 2010.

as security for the bond loan of nOk 300 million the parent company has pledged as collateral its shares in blom data as, blominfo a/s, blom geomatics as, blom kartta Oy, blom deutschland gmbh, blom aerofilms ltd, blom sweden ab, blom Environmental Coastal surveys ab, blom CgR and blom sistemas geoespeciales s.p.a. the financial covenants are described in note 9.

in addition, the subsidiaries, blom data as, blom geomatics as, blom info a/s, blom aerofilms ltd, blom CgR and blom sistemas geoespeciales s.p.a. have guaranteed the parent company’s loan covenants linked to the bond.

bank guarantees totalling nOk 28.1 million have been furnished by the company, primarily in connec-tion with the execution of projects. a cash deposit of nOk 13.2 million has been pledged as collateral for bank guarantees.

blom asa has furnished certain guarantees for scan subsea asa. blom asa has guaranteed that scan subsea asa will pay its rent in connection with the sale of the real estate in tønsberg. scan subsea asa was acquired in 2007 by the nysE listed company Parker Hannifin Corporation.

noTe 13: AuDiTor fees

nOk 990,000 (2009: nOk 415,000) in auditor’s fees has been charged against the income of blom asa for 2010. in addition, there were tax consulting fees (including technical assistance with tax papers and guidance concerning tax questions) totalling nOk 25,000 (2009: nOk 107,000). a total of nOk 295,000 (nOk 559,000) was charged against income for other non-auditing services.

notes to the blom asa accounts

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94

noTe 14: suBsiDiAries

blom data as 1 000 000 10 000 1 000 000 18 529 0blominfo a/s dkk 5 500 000 5 500 5 500 000 7 866 0blom kartta Oy EuR 58 865,77 30 EuR 58 865,77 29 791 29 791blom geomatics as 1 000 000 10 000 1 000 000 11 622 11 622blom deutschland gmbh EuR 30 677,51 12 EuR 30 677,51 12 865 1 991blom aerofilms ltd gbP 300 300 gbP 300 88 809 66 877blom sweden ab sEk 1000 000 10 000 sEk 1000 000 21 015 21 015Compagnia generale Ripreseaeree s.p.a. EuR 1500 000 10 000 EuR 1500 000 157 014 157 014blom sWE ab sEk 310 000 3 100 sEk 310 000 285 285blom sistemas geoespaciales s.l.u. EuR 522 870 8 700 EuR 522 870 57 521 0blom sistemas geoespaciales s.l.u. – converted loan 98 071 0blom Enviromental and Costal survey ab sEk 800 000 8 000 sEk 800 000 1 212 1 212Total 504 600 289 807

Cost price of shares

Total nominal value

No. of shares

Company’s share capital

Company: Balance sheet value

(amounts in nOk 1,000)

the value of shares was written down by a total of nOk 157.3 million in 2010.all the companies are wholly owned.

notes to the blom asa accounts

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95

noTe 15: AssoCiATeD CoMpAnies

the parent company does not have any closely related parties other than the subsidiaries and as-sociated companies. Reference is also made to the notes to the consolidated accounts. transactions between the parent company and subsidiaries are as follow:

Current liabilities and receivables including the subsidiaries’ deposits and utilised overdraft facilities in the company’s corporate cash management system. the value of receivables was written down by a total of nOk 256,8 million in 2010. the value of shares and receivables with associated company was written down by nOk 46.2 million ( note 23 in group accounts).

blom data as 0 0 5 000 0 0 0blom info a/s 0 216 1 400 13 357 0 0Pt. blom nusantara 0 0 0 41 4 181 0blom geomatics as 0 79 900 5 579 22 212 0blom kartta Oy 0 0 600 2 486 0 0blom deutschland gmbH 0 39 500 15 308 0 0blom aerofilms ltd 0 4 023 3 900 6 069 0 0blom sweden ab 0 2 030 1 100 1 115 0 0blom sWE ab 0 0 0 2 182 0 0CgR 0 313 5 000 5 259 0 0blom sistemas geoespaciales 0 658 3 000 32 738 0 0blom Environmental and Coastal surveys ab 0 0 0 272 0 0blominfo Romania sRl 0 0 900 26 940 0 0Total 0 7 358 22 300 111 346 26 393 0

Non-current receivables 31/21/2010

Current receivables 31/12/2010

P&L SalesCurrent liabilities

31/12/2010

P&L Purchases

Non-current liabilities

31/12/2010

(amounts in nOk 1,000)

notes to the blom asa accounts

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96

auditor's report

inDepenDenT AuDiTor’s reporTREPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying fi nancial statements of blom asa, which comprise the fi nancial statements of the parent company and the fi nancial statements of the group. the fi nancial state-ments of the parent company comprise the balance sheet as at 31 december 2010, and the income statement, and cash fl ow statement, for the year then ended, and a summary of signifi cant acco-unting policies and other explanatory information. the fi nancial statements of the group comprise the balance sheet at 31 december 2010, income statement, changes in equity, cash fl ow for the year then ended, and a summary of signifi cant accounting policies and other explanatory information.

The Board of Directors and the Managing Director’s Responsibility for the Financial Statementsthe board of directors and the managing director are responsible for the preparation and fair presen-tation of the fi nancial statements of the parent company in accordance with norwegian accounting act and accounting standards and practices generally accepted in norway, and for the preparation and fair presentation of the fi nancial statements of the group in accordance with international finan-cial Reporting standards as adopted by Eu and for such internal control as the board of directors and the managing director determine is necessary to enable the preparation of fi nancial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these fi nancial statements based on our audit. We con-ducted our audit in accordance with laws, regulations, and auditing standards and practices generally accepted in norway, including international standards on auditing. those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free from material misstatement.

an audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. the procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the fi nancial statements, whether due to fraud or error. in making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the fi nancial statements in order to design audit procedu-res that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. an audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the fi nancial statements.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.

PricewaterhouseCoopers asPostboks 748 sentrumnO-0106 Oslotelefon 02316

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auditor's report

Opinion on the financial statements of the parent companyin our opinion, the financial statements of the parent company give a true and fair view of the financi-al position for blom asa as at 31 december 2010, and of its financial performance and its cash flows for the year then ended in accordance with the norwegian accounting act and accounting standards and practices generally accepted in norway.

Opinion on the financial statements of the group in our opinion, the financial statements of the group give a true and fair view of the financial position of the group blom asa as at 31 december 2010, and of its financial performance and its cash flows for the year then ended in accordance with international financial Reporting standards.

REPORT ON OTHER LEGAL AND REGULATORy REQUIREMENTSOpinion on the Board of Directors’ report and statement of corporate governance principles and practicesbased on our audit of the financial statements as described above, it is our opinion that the informa-tion presented in the board of directors report and statement of corporate governance principles and practices in the financial statements and the going concern assumption, and the proposal for covera-ge of the loss is consistent with the financial statements and complies with the law and regulations.

Opinion on Registration and documentationbased on our audit of the financial statements as described above, and control procedures we have considered necessary in accordance with the international standard on assurance Engagements isaE 3000 “assurance Engagements Other than audits or Reviews of Historical financial information”, it is our opinion that the company’s management has fulfilled its duty to produce a proper and clearly set out registration and documentation of the company’s accounting information in accordance with the law and bookkeeping standards and practices generally accepted in norway.

Oslo 24 march 2011PricewaterhouseCooper AS

Geir HaglundState Authorised PublicAccountant (Norway)

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98

board of director's responsibility statement

responsiBiLiTy sTATeMenT

We confirm, to the best of our knowledge that the financial statements for the period 1 January to 31 december 2010 have been prepared in accordance with current applicable accounting standards, and give a true and fair view of the assets, liabilities, financial position and profit or loss of the entity and the group taken as a whole. We also confirm that the management report includes a true and fair revi-ew of the development and performance of the business and the position of the entity and the group, together with a description of the principal risks and uncertainties facing the entity and the group.

Oslo, 24 march 2011

dirk blaauwboard member/CEO

Per kyllingstadboard member

gunnar Hirstiboard Chairman

brita Eilertsenboard member

bente loeboard member

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kapittelnavn

99

corporaTe governance

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100

corporate governance

CorporATe governAnCe

1. STATEMENTfor blom asa it is important that investors, clients, partners and others who follow the company have confidence in the fact that the company’s operations are managed properly in accordance with sound ethical guidelines. Reliability, honesty and integrity are key to the company’s core values. these are values that are important for a good reputation and the realisa-tion of blom’s business goals.

blom is concerned about having an adequate level of independence between the company’s bodies and confidence in the fact that the com-pany is managed in accordance with principles that promote ethical and sustainable business practices.

blom asa, which is the parent company of the group, is the company in which the group’s su-pervisory board and management functions are carried out. the group’s management structure is based on norwegian company law, the articles of association, the rules of procedure for the board of directors, and the instructions for the company’s management adopted by the board of directors. the company has prepared ethical guidelines and guidelines for corporate social responsibility.Non-conformance with the recommendation: none.

2. OPERATIONS blom is a leading European supplier for the col-lection, processing and modelling of geographic information. blom possesses unique European databases with maps, images and models. the company delivers data and solutions to custo-mers in the public and private sectors, as well as the consumer market, and it allows partners to develop applications based on the company’s da-tabases, location-based services and navigation solutions. the object of the Company is establis-hed in the articles of association.

the board of directors views it as its duty to continuously adapt the company’s strategy so as to optimise the shareholders’ return, based on the resources represented by the company at any given time. the board of directors works to develop the company based on the resources represented by the competence of its employ-ees and the recognition the company enjoys in the market. blom will use the financial platform and instruments that are available to achieve this goal.Non-conformance with the recommendation: none.

3. SHARE CAPITAL AND DIVIDENDSCapitalthe total assets at the end of the year 2010 were nOk 808,294 million, with an equity ratio of 13.3 per cent. dividends will be considered on an on-going basis as a result of the company’s strategy and earnings.

Authorisation to increase capitalthe board of directors’ power of attorney to increase the share capital by a maximum of 4,170,000 shares (10 per cent), which was gran-ted at the general meeting of 29 april 2010, is time-limited and valid until the Ordinary general meeting in 2011. the authorisation is a continua-tion of the authorisation granted to the board of directors by the annual general meeting in 2009. the object of this authorisation is to give the board of directors financial freedom in con-nection with any acquisitions or similar transac-tions, and to strengthen the company’s equity and financial platform in general. this authorisa-tion was not utilised in 2010. Authorisation to acquire treasury sharesthe board of directors was authorised to acquire the company’s own shares for a maximum of 10 per cent of the share capital, which corresponds to 4,170,000 shares, at the general meeting of 29 april 2010. this authorisation is time-limited and valid until the annual general meeting in 2011. the authorisation is a continuation of the

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101

corporate governance

authorisation granted to the board of directors by the annual general meeting in 2009. the object of this authorisation is part of the board of directors’ efforts to create the best possible capital structure for the company.this authorisation was not utilised in 2010.Non-conformance with the recommendation: none.

4. EQUAL TREATMENT OF SHAREHOLDERS AND TRANSACTIONS WITH CLOSE ASSOCIATESthe board of directors of blom asa is concer-ned about equal treatment of the company’s sha-reholders. this is done by informing Oslo børs, the company’s shareholders, securities firms and the rest of the market on a continuous basis about the company’s performance, activities and special events that may affect the price of the company’s shares. blom asa only has one class of shares. the liquidity of the share is good, and the share is listed under Ob match on Oslo børs.

if the board of directors proposes that the exis-ting shareholders’ pre-emptive rights be waived, the waiver will be based on the common inte-rests of the company and the shareholders. the reasons will be made public in a stock exchange disclosure in connection with the capital increa-se.

if any not immaterial transactions are conducted between the company and shareholders, key executives and their close associates, the board will ensure that an independent valuation of the transactions in question is performed by a third party as required.Non-conformance with the recommendation: none.

5. FREELy NEGOTIABLEshares in blom asa are freely negotiable. the articles of association do not restrict the nego-tiability of shares.Non-conformance with the recommendation: none.

6. GENERAL MEETINGthe board of directors will make arrangements so that as many shareholders as possible can exercise their rights by participating in the company’s general meeting and that the general meeting can function as an effective meeting place for the shareholders and board of direc-tors.

• a complete notice will be sent to all the share-holders in writing at least 21 days in advance and will be available on blom’s website 21 days prior to the general meeting. Enclosures to the notice and documents concerning the items on the general meeting's agenda will be published on the company's website and not sent to the shareholders. a shareholder may nevertheless request that the documents concerning the items to be discussed are sent free of charge.

• the registration deadline is normally the day prior to the meeting.

• the right to participate or vote at the gene-ral meeting may only be exercised when the acquisition of shares has been entered in the register of shareholders on the fifth working day prior to the date of the general meeting (registration date).

• shareholders who cannot be present at the general meeting will be given an opportunity to vote. the board of directors will: - Provide information on the procedure for at-tending by proxy - appoint a person who can vote by proxy on behalf of shareholders - Prepare a proxy form so that individual items to be considered and candidates to be elected can be voted on.

• the board of directors and auditor will be pre-sent at the general meeting

• the board of directors and chairperson will make arrangements so that the general me-eting has an opportunity to vote on each of the individual candidates for positions in the company’s bodies.

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102

• the board of directors will put forth a proposal for an independent chairperson if such a chair-person is required to ensure a proper execution of the general meeting.

• the Ordinary general meeting elects the board of directors, determines the directors’ fees, approves the annual accounts and dividend proposed by the board of directors, elects the auditor and approves the auditor’s remunera-tion, and deals with any other items stated in the notice of the meeting.

• the board Chairman is elected by the general meeting.

• minutes of the general meeting will be availa-ble on the company’s website www.blomasa.com.

Non-conformance with the recommendation: none. see item 7 with regard to nomination committee non-conformance.

7. NOMINATION COMMITTEEblom asa does not have a nomination commit-tee. the board of directors believes that the duties of the nomination committee can be per-formed satisfactorily by the board of directors in dialogue with various shareholder groups and the company’s principal shareholders.Non-conformance with the recommendation: One instance of non-conformance.

8. COMPOSITION AND INDEPENDENCE OF THE BOARD OF DIRECTORSthe object of the board of director’s work is to manage the shareholders’ assets in the best possible manner and treat all shareholders equally. in electing board members, emphasis is, therefore, placed on having a board of direc-tors that can safeguard the common interests of shareholders and the company’s need for com-petence, capacity and diversity. the members are elected for a term of two years. board member bente loe was up for election at the annual general meeting of 29 april 2010. she was re-elected for a new two-year term. gunnar Hirsti was elected as the board Chair-man by the general meeting.

after the general meeting the board of directors consisted of gunnar Hirsti as the board Chair-man, in addition to dirk blaauw, Per kyllingstad, bente loe and brita Eilertsen as board mem-bers.

the majority of the board members are indepen-dent of the company’s key employees and princi-pal shareholders. the board Chairman is elected by the general meeting. the board of directors will elect a deputy chairman if it is appropriate for the proper performance of the board of direc-tors. Non-conformance with the recommendation: CEO dirk blaauw is a member of the board of directors. He represents one of the company's principal shareholders, and the board of direc-tors has found, therefore, that it is appropriate that he is represented on the board. in ac-cordance with amendments to the norwegian Public limited Companies act, the CEO will not be a member of the board of directors after the company's annual general meeting in 2011.

9. WORK OF THE BOARD OF DIRECTORSi in accordance with norwegian law the board of directors is responsible for the supervisory management of the company, while the CEO is responsible for the day-to-day management. the board Chairman shall follow the development of the operations in close cooperation with the CEO, plan the board meetings and ensure that the board members receive the information that is required so that they can perform their func-tions properly in accordance with the legislation.

the board Chairman chairs the board meetings. if it is appropriate for the proper performance of the board of directors, the board of directors will appoint another board member to head the discussion at board meetings.the CEO participates at board meetings. Other members of the management ordinarily partici-pate whenever appropriate. the board of direc-tors held a total 15 meetings in 2010.

corporate governance

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in accordance with the rules of procedure, the board of directors shall have an annual plan for its work with emphasis on goals, strategy and execution. With effect from the Ordinary ge-neral meeting in 2010, the board of directors has appointed and elected members to an audit committee and a compensation committee. the board of directors will consider the use of other board committees if it is appropriate to ensure that the board of directors performs its work in an independent manner. the board of directors has not made use of board committees in 2010.Non-conformance with the recommendation: none.

10. RISK MANAGEMENT AND INTERNAL CONTROLthe board of directors is concerned about the company having sound internal control and an appropriate system for risk management. this includes elements such as risk management of significant business risks, execution of signifi-cant management controls, and control of finan-cial reporting and monitoring mechanisms.

significant risks include strategic risks, financial risks, liquidity risks and operational risks. the company’s significant risks are assessed on an ongoing basis and at least once a year, and they are included in the company’s annual report.

blom’s internal control of financial reporting encompasses guidelines and procedures to ensure that the accounts are prepared in accor-dance with ifRs and provide a true picture of the company’s operations and financial position.

management controls are performed at a senior level in the company. the management structure was changed at the start of 2009 and the repor-ting system was changed accordingly in order to provide a closer follow-up of the subsidiaries, both financially and operatively. all of the Co-untry managing directors (Cmds) in the group report now directly to the Chief Executive Officer (CEO). the CEO holds monthly meetings with each individual Cmd.

Non-conformance with the recommendation: none

11. REMUNERATION OF THE BOARD OF DIRECTORSthe general meeting determines the remunera-tion for the board of directors. nOk 1,350,000 was paid in directors’ fees for the period from 1 may 2008 to 29 april 2010.

Provisions totalling nOk 1,350,000 have been allocated in the accounts for the remuneration of the board of directors for the period from 30 april 2010 to 05 may 2011. the remuneration breaks down into nOk 450,000 for the board Chairman and nOk 225,000 for other board members.

the remuneration of the board of directors shall reflect the board’s responsibility, expertise and time spent, and it is not to be performance-based. no options have therefore been issued or any other performance-linked remuneration given to members of the board of directors. for special tasks that are carried out by the mem-bers of the board of directors, the board of directors can approve separate remuneration for these services.Non-conformance with the recommendation: none.

12. REMUNERATION OF THE EXECUTIVE MANAGEMENTthe board of directors has prepared separate guidelines for remuneration of the executive management in accordance with the limited liability Companies act. the guidelines will be presented to the general meeting.

special instructions have been prepared for the Chief Executive Officer. Reference is also made to his responsibilities and duties in the company’s rules of procedure for the board of directors. the general meeting determines the remuneration of the Chief Executive Officer.

corporate governance

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the company’s key executives are paid a fixed salary that reflects the employee’s education, experience and professional qualifications. it is important that the remuneration is at a level that makes it possible to attract the best qualified persons to the company’s key positions.a bonus can be agreed on in addition to the base salary. the size of the bonus paid to the indivi-dual employees will be dependent in part on the achievement of individual targets and in part on the performance of the group.key executives receive free telephone, mobile phone, internet, newspapers and canteen as benefits in kind. key executives are members of the company's defined contribution scheme in the same manner as other employees. blom believes that the company’s performance-based bonus agreements with key executives have a motivating effect and are in the best interest of the company and its shareholders.

the company does not currently have any agre-ements with key executives concerning the allocation of shares, subscription rights, options and other forms of remuneration linked to shares or the performance of the company's share or shares of other companies within the group.the board of directors will, however, continu-ously consider incentive schemes that are ap-propriate to secure a qualified management for the company, including the use of various share option schemes.Non-conformance with the recommendation: none.

13. INFORMATION AND COMMUNICATION blom asa seeks to maintain an open information policy in relation to shareholders, the media and other interested parties within the bounds of the securities legislation, accounting law and stock exchange regulations. the group has its own website (www.blomasa.com), which contains iR information and other information that is useful for understanding the group’s overall operations and development. Open presentations with web-casts are held in connection with the reporting of interim results.

the board Chairman and CEO or CfO are autho-rised to speak on behalf of the company.Non-conformance with the recommendation: none.

14. CORPORATE TAKEOVERSthe board of directors will not attempt to influ-ence, hinder or complicate the submission of bids for the acquisition of the company's opera-tions or shares, or prevent the execution thereof. the board of directors will help ensure that shareholders are treated equally.if a bid is made for the company’s shares, the board of directors will obtain a valuation from an independent expert and issue a recommendation to shareholders as to whether they should ac-cept or reject the bid.Non-conformance with the recommendation: none.

15. AUDITORthe company’s auditor will prepare an annual plan for the performance of audit work and pre-sent the plan to the audit committee. the auditor will attend the board meeting that reviews the annual accounts. the auditor performs otherwise the activities he is required to perform in ac-cordance with norwegian law and the generally accepted auditing standards.

the auditor will review the company’s internal control, including the identification of weaknes-ses and recommendations for improvements, annually together with the audit committee.

the board of directors has given the mana-gement access to use the auditor, to a limited extent, for the performance of services for the company other than pure auditing. this applies in particular to matters of a particularly complica-ted nature such as tax issues, acquisitions and mergers/demergers. the board of directors feels that such consulting does not affect the auditor's independence in relation to the company.Non-conformance with the recommendation: none.

corporate governance

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board of directors

THe BoArD of DireCTors ConsisTs of:

PER KyLLINGSTAD, bærum, board member. kyllingstad holds a law degree from the university of Oslo and a master of law degree from temple univer-sity, Philadelphia. He has almost 25 years of experience as an attorney, and his main fields of practice include offshore, shipping, banking and finance, property, board appointments and general business law. kyllingstad is a partner in the firm of kyllingstad kleveland advokatfirma da.

GUNNAR HIRSTI, drøbak, sboard Chairman. Hirsti holds a drilling engineering degree. during the last 25 years he has held various managerial and board posi-tions in various private and listed companies, both nationally and internationally. His managerial duties have been related to companies where, for example, struc-tural and strategic changes have been required.

BRITA EILERTSEN, Oslo, Oslo, board member. Eilertsen is a business econo-mist with an msc (siviløkonom) degree from the norwegian school of Economics and business administration (nHH) and a licensed financial analyst. she has more than 10 years of experience from corporate finance activities in securities firm in the areas of mergers and acquisitions and equity transactions. she cur-rently has her own business.

BENTE LOE, Oslo, board member. loe studied at the university of denver and has an mba in finance. she has experience from acquisitions and mergers, as well as the financing of projects for kværner investments in Oslo and london. during eight years she worked as a partner in tele Venture management with the development of telenor Venture fonds companies in it and telecommunication and the last 3 years loe worked as an investment director with Ojada as, a private investment company. she currently has her own business.

DIRK BLAAUW, Oslo, board member. blaauw holds a business management degree from Heriot-Watt university in Edinburgh. He has more than 25 years of experience from managerial positions in a number of shipping and offshore companies listed on the Oslo stock Exchange, and he has worked with business development in recent years. He has been the CEO of blom from January 2004.

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information on shares in blom

BLOM'S 20 LARGEST SHAREHOLDERS AS OF 31 DECEMBER 2010:

Shareholder Number %1 JP mORgan ClEaRing C a/C CustOmER safE k nOm 4 102 009 9.84 %2 gOldman saCHs & CO - sECuRity CliEnt sEgR nOm 3 963 469 9.50 %3 finansPaRtnER inVEst as 2 129 213 5.11 %4 gOldman daCHs int. - sECuRity CliEnt sEgR nOm 1 782 500 4.27 %5 blOm asa 1 100 000 2.64 %6 bJØRnstad & JEndal as 1 023 648 2.45 %7 Ebas COnsulting as 1 000 000 2.40 %8 mP PEnsJOn 826 524 1.98 %9 dEutCHE bank ag CliEnts aCCOunt nOm 526 000 1.26 %10 O. HOVdE as 498 000 1.19 %11 tRan tRuC CHanH 485 330 1.16 %12 nORdnEt bank ab nOm 438 797 1.05 %13 VPf nORdEa VEkst JPmORgan EuROPE ltd 393 900 0.94 %14 EiEndOmsutVikling kR 300 000 0.72 %15 tHundER inVEst as 300 000 0.72 %16 agat as 292 000 0.70 %17 Citibank n.a. nEW yORk a/C dfa-intl sml CaP nOm 270 088 0.65 %18 HaVtRÅl as 250 000 0.60 %19 staV. Jan OlE 225 000 0.54 %20 ClEaRstREam banking nOm 223 000 0.53 % Total 20 largest shareholders 20 129 478 48.27 % Others 21 571 158 51.73 % Total 41 700 636 100.00 %

inforMATion on sHAres in BLoM

Blom ASA has one class of shares, and there were 41,700,636 outstanding sha-res in the company at the end of 2010. The share capital has remained unchan-ged throughout the year. At the end of the year the company owned 1,100,000 shares, which corresponds to 2.64 per cent of the share capital.

blom’s annual general meeting of 29 april 2010 granted the board of directors authorisation to increase the share capital by up to 10 per cent, which corresponds to 4,170,000 shares. this authorisation can also be used in full or in part to raise a convertible loan for a maximum of nOk 100 million. the general meeting also granted the board of directors authorisation to acquire

shares in blom asa for up to 10 per cent of the share capital, which corresponds to 4,170,000 shares. both of these authorisations are valid up until the annual general meeting in 2011. none of the authorisations were utilised in 2010.

DIVIDENDSin accordance with the company’s future growth goals, blom will seek to maintain a sound finan-cial platform. dividends will be considered on an ongoing basis as a result of the company’s strategy and earnings. the board of directors proposes that no dividend be distributed for the 2010 financial year.

SHAREHOLDERS AND VOTING RIGHTSblom asa had 2,542 shareholders at the end of 2010. foreign shareholders owned 32.1 per cent of the shares. all the shares are registered by name and carry equal voting rights. the shares are freely negotiable.

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information on shares in blom

inforMATion To THe sToCK MArKeT

blom assigns high priority to contact with the stock market and desires an open dialogue with the market players. Our goal is to ensure that the market always has adequate and identical information to ensure correct pricing of our shares. this is done by informing Oslo børs, the company’s shareholders, securities firms and the rest of the market on a continuous basis about the company’s performance, activities and special events that may affect the price of the company’s shares. the liquidity of the share is good, and the share is listed under Ob match on Oslo børs.

the company’s annual and quarterly reports will be published in norwegian and English. Presen-tation of the quarterly reports will also be broad-cast as webcasts. the group’s website www.blomasa.com contains iR information in accor-dance with the requirements of Oslo børs.

FINANCIAL CALENDAR 2011:

Date Event05/05/11 1st quarter 2011 results05/05/11 general meeting 201111/08/11 2nd quarter 2011 results27/10/11 3rd quarter 2011 results16/02/12 4th quarter 2011 results

sH

aR

E P

RiC

E

18

16

14

12

10

8

6

4

2

0

2/10 4/10 6/10 8/10 10/10 12/10

SHARE PRICE PERFORMANCE

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blom offices

Blom ASA/Head OfficePb 34 skøyen0212 Oslonorwaytel: +47 23 25 45 00Email: [email protected]

Blom Aerofilms Ltdthe astrolabeCheddar business Park Wedmore RoadCheddar somerset bs27 3Eb uktel: +44 (0) 1934 311000sales Hotline: +44 (0) 1934 311001Email: [email protected]

Blom Deutschland GmbHOskar-frech-straße 1573614 schorndorfgermanytel: + 49 7181 980210Email: [email protected]

BlomInfo A/S masnedøgade 20 2100 københavn Ø denmarktel: + 45 70 200 226Email: [email protected]

Blom Romaniaion Heliade Radulescu street, no 3-5, 130010 - targoviste, Romaniatel.: +40(0)245 606 150Email: [email protected]

Blom Kartta OyPasilanraitio 500240 Helsinki finlandtel: + 358 9 229 3060Email: [email protected]

Blom Sistemas GeoespacialesC/ Zurbano 46 28010 madrid spaintel: +34 912 106 700Email: [email protected]

Blom Sweden ABklippan 1J 414 51 göteborg swedentel: +46 31 704 56 70Email: [email protected]

Blom CGR S.p.A.Via Cremonese 35/a 43126 Parma italytel: + 39 0521 99 49 48Email: [email protected]

Blom Portugal av. do forte, nº8, Edifício Pujol, fracção k2795-503 Carnaxide Portugaltel.: +351 21 425 3830Email:[email protected]

Blom Ukraina Production Officedemiivs'ka str, 43, 3-d floorkiev 03040 ukrainetel: 0038 044 2587 266Email: [email protected]

Blom Bulgaria EOOD2 nikolay Haytov str., Entr. a, fl. 8, apt. 161113 sofiabulgariatel: +359 2 489 7019

ICS Blom SRL str. Valea trandafirilor, nr. 24a, mun. Chisinau, 2001Republica moldovatel: +373 22 261045Email: [email protected]

Blom Netherlands Roggeakker 128091 nH Wezep the netherlands Email: [email protected]: +31 38 376 1225

Blom FranceParc de Crécy13, rue Claude Chappe69771 saint didier au mont d’Or Cedex, lyonfrance Email:[email protected]: +32 (0)492 720 240

Blom Czech RepublicOlomoucka 1158 / 164aCZ - 627 00 brnoCzech Republictel.: +420 513 033 050Email: [email protected]