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annual report 2014

2 opCon annual report 2014

Contents2014 in brief 3

Key dates in 2015 3

Opcon's organization 4

CEO’s statement 5

Compressor technology / Waste Heat Recovery 6

Bioenergy 8

Opcon group in 2014 10

Opcon in 2015 and beyond 11

Corporate governance report 13

Board of Directors 17

Senior executives and auditor 18

Auditor’s statement on corporate governance 18

Articles of association 19

Directors’ report 20

Consolidated income statements 24

Consolidated balance sheets 25

Changes in consolidated shareholders’ equity 27

Consolidated cash flow statements 28

Notes, Group 29

Parent company’s income statements 46

Parent company’s balance sheets 47

Changes in parent company’s shareholders’ equity 48

Parent company’s cash flow statements 49

Notes, Parent company 50

Signatures of the Board and President 55

Auditors’ report 56

5-year summary 57

Definitions 59

Addresses 59

Contents

opcon group in brief Opcon is an energy and environmental technology Group that develops, produces and markets systems and products for eco-friendly, efficient and resource-effective use of energy. Opcon is a leader in a number of technical areas within energy and environmental technology.

The Group focuses on the following areas: compressor technology, electri-city generation based on waste heat, bioenergy-powered heating and CHP plants, pellets plants, handling systems for biomass, sludge and other recycling activities, handling systems for natural gas, industrial cooling, flue gas con-densation, treatment of flue gases and air systems for fuel cells.

Opcon has activities in Sweden, Germany, the UK and China. There are around 140 employees. The company’s shares are listed on Nasdaq OM Stock-holm.

opcon's business conceptOpcon is an energy and environmental technology Group that develops, produces and markets products and systems for eco-friendly, efficient and resource-effective use of energy for customers active in the process and manufacturing industries, electricity and power generation, timber and forest industry, greenhouse cultivation and shipping.

opcon's objectivesThe Group shall generate good and sustainable profitability and aim for growth in order to create long-term growth in value for shareholders, create value for customers and provide a workplace where employees can develop.

opcons visionOpcon’s vision is to be actively involved in building a society beyond dependency on fossil fuels. With high-technology products and services Opcon will actively contribute to global development towards a more energy-effective and eco-friendly society.

opCon annual report 2014 3

2014 in brief / events after 2014 / key dates in 2015

2014 in brief• Sales for remaining business were SEK 266.2 million

(275.0 m).

• Operating earnings (EBIT) for remaining business were SEK 18.3 million (–52.1 m).

• The profit after tax was SEK 13.0 million (–61.8 m).

• Earnings per share attributable to parent company shareholders for remaining business were SEK 0.03 (–0.19).

• Opcon and its partner in China, Fujian Snowman Co., Ltd. formed a joint venture, Fujian Opcon Energy Technology Co., Ltd, for development, production and marketing of Opcon Powerbox on the Chinese market and parts of South East Asia.

• Opcon conducted a private placement of 30,000,000 shares in Opcon at SEK 0.57 per share with Hong Kong Snowman Technology Ltd. The purpose was to strengthen the develop-ment of the companies’ long term strategic cooperation that has begun and to link the companies more firmly together. Opcon’s financial position was also strengthened for the activities being implement concerning Opcon Powerbox, and others.

• Opcon directed a private placement of 4,385,965 shares at SEK 0.57 per share to GEM Global Yield Fund Limited. The purpose was to raise capital and further strengthen the company’s financial position.

• Claes Palm was appointed as the new CFO and deputy CEO of Opcon AB. Opcon decided to end all administration and activities in Åmål, Sweden.

• Wendy Lin, who was co-opted onto the Opcon board in 2013, was elected as a new member of the Board. Wendy Lin is as-sistant to the CEO of Fujian Snowman Co., Ltd., the Chinese refrigeration technology business that is a significant partner to Opcon as well as being Opcon’s second largest owner through the subsidiary, Hong Kong Snowman Technology Ltd.

• Opcon won a large bioenergy order for Saxlund’s fuel-handling and incineration technology in the UK. The order is worth around SEK 35 million with commissioning in 2015. This project is a collaboration between Saxlund in Sweden and the UK. Saxlund will deliver the fuel handling system with trans-port solutions and bar feeders as well as a high-pressure boiler powered by bioenergy.

• Opcon received an order for Saxlund’s fuel handling equipment and incineration technology from the privately owned sawmill, Hilmer Andersson, HAL, Korterud, Sweden. The order is worth around SEK 28 million, with commissioning set for 2015.

• Opcon AB received an order for Opcon Powerbox state-of-the-art Waste Heat Recovery technology. The order was from Opcon’s strategic partner, Fujian Snowman Co., Ltd., China, for an Opcon Powerbox ORC and an Opcon Powerbox WST that will serve as reference plants in China.

• Opcon started a Group-wide programme to coordinate Europe-an activities within bioenergy to generate extensive savings and liquidate loss-making business. Saxlund International Holding AB will be the umbrella organization for the Group’s bioenergy activities with around 80 employees at operations in Sweden, Germany and the UK.

important events after the end of the period• Continued good incoming orders for Saxlund’s material hand-

ling systems from treatment plants in the UK.

• Saxlund International GmbH wins EUR 1.5 million order from Babcock & Wilcox Vølund for handling system at Skaer-baecksvaerket in Denmark.

• Opcon signs agreements with Fujian Snowman Co., Ltd. con-cerning development assignments for new compressors.

• Opcon Energy Systems signs first development agreement with joint venture, Fujian Opcon Energy Technology Co., Ltd. con-cerning expansion of Opcon Powerbox product line.

• Opcon raises SEK 10 million bank loan.

key dates in 2015• The Annual General Meeting will be held at 4 p.m. on 7 May

2015 at the premises of IHM Business School, Warfvinges väg 39, entrance floor, Stockholm, Sweden. The premises will be open for registration at 3 p.m. Registration must be completed by 4 p.m. for shareholders to be included in the voting register.Information about the conditions for participation at the mee-ting can be found at www.opcon.se under Finansiell informa-tion / Stämmor / Årsstämma.

• The Q1 report for 2015 will be published on 7 May 2015.

• The Q2 report for 2015 will be published on 26 August 2015.

• The Q3 report for 2015 will be published on 11 November 2015.


Opcon has businesses in Sweden, Germany, the UK and China.

OPCON ABStockholm, Sweden

RENEWABLE ENERGY BUSINESS AREA

Boxpower ABStockholm, Sweden

SRMSvenska Rotor Maskiner AB

Stockholm, Sweden

OES Opcon Energy Systems AB

Stockholm, Sweden

COMPRESSOR TECHNOLOGY /WASTE HEAT RECOVERYPrimary business companies

Saxlund International Ltd.

The UK

Saxlund International GmbH

Germany

BIOENERGYPrimary business companies

SRESvensk Rökgasenergi AB

Stockholm, Sweden

Saxlund Bioenergy AB Stockholm, Sweden

Fujian Opcon Energy Technology Co., Ltd.

Owner share 49%

四色 C100PANTON DIC 138S

Opcon’s Chinese partner, Fujian Snowman Co., Ltd. sells its products under the trademark Snowkey Ice Systems.

opCon group organization


In 2014 Opcon took the expected step and became a profit-making business again. After a few years of tough cutbacks and savings the business turned back into profit mainly thanks to the sharp focus we have had in recent years on developing our activities in the Chinese market.

Deepening collaboration with Fujian Snowman Co., Ltd. has given us the necessary platform for developing our compressor systems and Opcon Powerbox. Snowman is now Opcon’s second largest owner with a holding of around 17% while also currently being one of Opcon’s most important and stable customers. The collaboration was further strengthened during the year with the formation of a joint venture, Fujian Opcon Energy Technology Co., Ltd. in China, of which Opcon owns 49%.

This building stone will be decisive for the continued development of Opcon Powerbox business by providing access to the largest market in the world and for establishing competitive production in China, which will provide significant competitive advantages globally.

Continued improvementDuring the year the focus has been on achieving improvements in operating profits. Continued cost adjustments, a better purchasing structure and better internal coordination have produced results and will form a platform for continued improvement. The operating margin and operating profit in business operation have improved significantly compared with 2013.

Despite the new share issue for Snowman, successful licence sales and positive earnings, 2014 still involved liquidity difficulties and the underlying improvement rate was not enough to lift earnings and cash flow sufficiently during the year. Continued savings measures produced a total of SEK 20 million in savings at an annual rate during the year. The effects of completed savings and additional cost adjustments in 2015 will lead to continued improvements.

Increased activity level in bioenergyThe largest part of the savings measures was implemented in the bioenergy sector where loss-making business was closed down. The bioenergy business is now seeing an increased level of activity internationally, including in the UK, where an increasing amount of the Group’s resources in this field are now being directed. Relations with licence holder Axis Industries in Lithuania are also being further developed. Meanwhile the Swedish market remains weak with tough competition for the major projects that have been announced. The Group therefore is continuing its strategic transformation within bioenergy with an increased international focus and concentration on industrial incineration plants, handling systems, flue gas condensation and the aftermarket.

Ceo's Comments

Continued focus on China

Rolf Hasselström

President and CEO

Better coordination of European activities in the bioenergy sector will produce the right conditions for an improved selection of projects and produce higher profitability through coordination in the purchasing phase.

Growing interest outside SwedenLow electricity prices in Sweden have hindered development of Opcon Powerbox, which is in the early commercialisation stage. However, interest from markets outside Sweden is growing. Throughput times for this type of business can be two to three years, however, which means that the continual market processing that is necessary to create a sufficiently large stock of sufficiently high quality quotations will be decisive for success.

Overall the prospects are better than before for achieving profitable growth with the establishment in China and continued cooperation with Snowman being the key components for success and for increased profitability.

Stockholm 15 April 2015


In many industrial processes, during a large part of electricity generation throughout the world and during incineration of waste the energy involved is not fully exploited. Instead a lot of energy becomes waste or surplus heat, and it is not fully utilised.

In addition to energy losses and decreased system efficiency further electricity supplies are used to cool down surplus heat.

Between 20 and 50% of the energy used in industrial processes is being wasted.

If energy efficiency increases and waste heat can be recovered there will be major benefits for the economy and the environment. In the US, for instance, it is estimated that industrial waste heat is equivalent to electricity generation from all renewable energy sources in the country.

In discussions about waste heat recovery, waste heat is often classified by temperature, with high temperatures given higher value due to having higher energy content. Waste heat under 230°C in this context is usually considered to be low value waste heat, as it cannot be converted into electrical or mechanical energy to the same extent as waste heat at higher temperatures.

The base for Opcon’s growth platform in energy and environmental technology has primarily been built around energy efficiency with the focus on technology for exploiting low-grade waste heat.

Using Opcon’s proprietary Lysholm turbine Opcon is currently industrialising and commercialising two different systems for generation of electricity:

Opcon Powerbox ORC (Organic Rankine Cycle), which produces electricity from water at temperatures as low as 55°C, and Opcon Powerbox WST (Wet Steam Turbine), which produces electricity from saturated steam with no overheating, providing clear advantages compared with traditional turbines.

Opcon Marine develops Opcon’s technology in Waste Heat recovery and electricity production for demanding marine applications.

opCon's business areas: Compressor teChnology & waste heat reCovery

Considerable progress has been made in China in recent years as the strategic collaboration between Opcon and Snowman has grown stronger. In the spring of 2014 Snowman strengthened its ownership in Opcon through a directed placement of new shares.

In Fuzhou, Snowman has built a new plant for production of, among other products, compressors developed by Opcon. The assessment is that Opcon’s future licence revenue from Snowman’s production over the coming ten years will increase successively to jointly exceed SEK 100 million for the period in total. In 2013 sales of compressor development to Snowman tripled and was worth more than SEK 30 million. This level was maintained in 2014 when Snowman also placed additional large development assignments with Opcon.

For Opcon, Snowman’s commitment and the collaboration that has started means that additional development assignments in cooling compressor technology can be expected from Snowman for a long period in the future as Opcon continues to strengthen its own capabilities.

The extension of the collaboration that took place in September 2014 with the formation of a joint venture will be of decisive strategic importance. The joint venture will perform the commercialisation of Opcon’s technology for waste heat recovery, Opcon Powerbox. The purpose is to develop the Chinese and other Asian markets while an industrialised production base is meanwhile created for producing Opcon Powerbox in series.

For Opcon Powerbox the Chinese market has good prospects of becoming the largest in the world. Calculations show that there are around 500,000 industrial boiler plants in China. As China is still in a very early stage regarding the recovery of waste heat, this technology could significantly contribute to greater energy efficiency and reduced emissions to the benefit of the economy and environment in coming years.

Around 90% of all screw compressors produced around the world today are made by companies that have received technology licences from Svensk Rotor Maskiner, SRM.

Opcon’s Centre of Excellence at SRM in Nacka, Sweden, is a world-leading technological development centre for screw compressor technology, screw compressors and screw expanders.

Together with other Group companies and customers, SRM develops unique solutions and new types of compressors. A special competitive advantage is the ability to produce in high tech short-series runs.

SRM’s solutions raise the efficiency of industrial processes, often with reduced environmental impact.

Opcon’s Centre of Excellence offers:• Leading development• Calculation and design• Laboratory• Short time-to-market• Production including short-series

production• Prototyping• Assembly and advanced testing• Global licence manufacturing• Unique energy and gas handling

system• A wide range of technical industrial

service for compressors and gas handling systems

For 107 years – since 1908 – SRM has played a crucial role in the Swedish and international development of a series of famous industrial products, especially twin-rotating steam turbines, air pre-heaters, screw compressors and screw expanders.

Collaboration around opcon powerbox with snowman in China

two electricity systems from low-value waste heat

world-leading development of compressors


opCon's business areas: Compressor teChnology & waste heat reCovery

The main plant in Fuzhou, China, of refrigeration technology company Snowman, with the new plant for production of compressors developed by Opcon.

Screw compressor technology from Opcon / SRM. Compressors from Opcon / SRM in a heat pump facility at energy company EDF in France.

Snowman’s products are sold under the brand name Snowkey, among other trade marks.Snowman’s plant for production of compressors.

Opcon Powerbox will be launched on Asian markets.


opCon's business areas: bioenergy

During 2014 and the start of 2015 Opcon’s subsidiary, Saxlund International, has won a series of orders for material handling solutions for treatment plants in the UK. These orders cover specially designed silos for storage, emptying and transport of sludge cake, Saxlund’s industry-leading sliding frame technology, screw conveyors and integrated control system.

Saxlund International is a market leader in the UK in specialist material handling of waste sludge and biofuel. Customers operate treatment plants, cement plants and combined heating and power plants. Matt Drew, CEO of Saxlund International, forecasts continued growth for Saxlund’s core business.

“It’s a growing trend among treatment plants to develop their biological treatment to make the processes more efficient and recover more energy from the sludge,” explains Matt Drew.

“Our systems are specially designed for storage and removal of materials that are difficult to handle, such as waste sludge. Our equipment has been tested and used at hundreds of installations in the UK and across Europe. We understand these processes and the risks involved, and we are confident that we have the best solutions on the market.”

Saxlund has 60 years’ experience of doing business in the UK, Sweden and Germany. The company has a complete range of products and systems for materials handling for bioenergy, combined heating and power, recycling and treatment plants.Orders received for systems for sludge handling at UK treatment plants, December 2014 to March 2015:– Barhale Trant Utilities, for Southern Water

waste water treatment works (WWTW) at Budds Farm in Havant and Millbrook.

– United Utilities and KMI Plus, for Leigh Wastewater Treatment Works, Wigan.

– Anglian Water, for Whitlingham Water Recycling Centre in Norwich.

Since 2012, Opcon’s subsidiary has benefited from a successful agreement concerning licensed manufacturing with Axis Industries in Lithuania. Axis is an

established and well-known energy technology company that develops, designs, produces and installs equipment for combined heating and power plants, among other clients.

Collaboration with Axis has many advantages for Opcon. One of the most important is that the company participates in a market

in Eastern Europe that would otherwise be difficult to enter without establishing its own business.

Axis is currently building a large combined heating and power plant in Tallinn based on Saxlund technology. The plant will produce 75 MW of thermal energy for the district heating network from the boiler and condensation system and deliver a further 15 MW of electricity into the supply grid.

“Right now there is a boom in the Baltic States and there are several projects that we could not have delivered to without our partner, Axis. This collaboration contributed to the development of our technology as we can prove that we are at the leading edge of development,” says Stefan Wallerman, CEO of Saxlund Bioenergy AB.Current projects, Saxlund-Axis– Combined heating and power plant, Tallinn,

Estonia, for the Estonian energy company, Utilitas. Three furnaces from Saxlund and three flue gas condensers of Saxlund brand Svensk Rökgasenergi, SRE.

– Combined heating and power plant in Kaunas, Lithuania, for energy company Danpower Baltic. One furnace from Saxlund

and one flue gas condenser from SRE.

Previous projects– Kaunas 40MW + biomass-based district

heating: Two Saxlund furnaces and two SRE flue gas condensers.

– Bionovus 40MW + biomass-based district heating: Two Saxlund furnaces and two SRE flue gas condensers.

– NEO Pet 2x10 MW hot oil: Two Saxlund furnaces

– Hilmer Andersson sawmill, 12 MW: Saxlund furnace.

In all incineration processes some of the energy content is lost as waste or surplus heat. In biofuel power plants, for example, the smoke emitted from the chimney often reaches temperatures of up to 230°C.

Svensk Rökgasenergi, SRE, is a leader in energy efficiency and treatment of flue gases.

The Renergi GK flue gas condenser is at the heart of System Renergi. This simple technology has special features that enable profitable operation. The product range contains a standardised range of boiler outputs from 1.5 MW to 30 MW that have so far been sold for boilers ranging from 1 MW up to 63 MW in 13 countries. Customers are district heating plants, sawmills, pellets manufacturers and various types of industrial users – including greenhouses – in Sweden, the Nordic region and the rest of Europe.

For a district heating plant, the Renergi GK flue gas condenser increases energy efficiency by up to 20-25% depending on the fuel and operation and means that fuel consumption and emissions can be significantly reduced.

In more and more countries, industry is meeting increased demands to treat particles in waste gases. SRE’s flue gas condenser is an extremely robust and reliable system that ensures low emissions while the energy that goes lost in the flue gas is recycled. Payback in this investment is normally less than three years and particle purification is part of the bargain.

saxlund uk – market leader in sludge handling

licensed manufacturing in lithuania a big success for saxlund technology

profitable operation thanks to robust flue gas condensation technology

SAXLUNDOriginalet sedan

1958


1958

SVENSKRÖKGASENERGIOriginalet sedan

1992


1992SVENSKRÖKGASENERGIOriginalet sedan

1992


1958

OPCONWaste to valueOPCON

Waste to valueOPCONWaste to value

SAXLUNDThe OriginalSince 1958


SVENSKRÖKGASENERGI

The OriginalSince 1992

SVENSKRÖKGASENERGI

The OriginalSince 1992SVENSK

RÖKGASENERGIThe OriginalSince 1992



1958


1958


1992


1992SVENSKRÖKGASENERGIOriginalet sedan

1992


1958

OPCONWaste to valueOPCON

Waste to valueOPCONWaste to value



SVENSKRÖKGASENERGI

The OriginalSince 1992

SVENSKRÖKGASENERGI

The OriginalSince 1992SVENSK

RÖKGASENERGIThe OriginalSince 1992



opCon's business areas: bioenergy

Opcon’s partner in the Baltic States, Axis Industries, is building a large combined power and heating plant in Tallinn based on Saxlund’s technology, that will be completed in 2016 at a cost of EUR 65 million. The plant will have three furnaces from Saxlund and three flue gas condensers of the Saxlund brand, Svensk Rökgasenergi.

A silo for storage and transport of sludge at a treatment plant, delivered by Saxlund International in the UK.

Opcon has large capacity for assembly, service and maintenance.

The Renergi GK flue gas condenser from Opcon/ Svensk Rökgasenergi.A Saxlund furnace in a biofuel plant.


opCon group in 2014

opcon group in 2014Sales for remaining business for the January-December period were SEK 266.2 million (275.0 m). Operating earnings (EBIT) were SEK 18.3 million (–52.1 m). Profit after tax improved significantly to reach SEK 13.0 million (–61.8 m). Earnings per share attributable to parent company shareholders were SEK 0.03 (–0.19).

The key factor in the progress made during the year has been the formation of a joint venture, Fujian Opcon Energy Technology Co., Ltd, for Opcon Powerbox on the Chinese market and parts of South East Asia together with Fujian Snowman Technology Co., Ltd. of China.

In accordance with the agreement signed during the period, Opcon has received approximately 49% of the shares in the newly started company, with Snowman receiving 51%. The joint venture company’s registered share capital amounts to CNY 98 million (around SEK 123.4 million).

Opcon’s capital contribution for approximately 49% of the shares in the company, corresponding to CNY 48 million (around SEK 56.6 million at the time of acquisition), comprises part-payment for exclusive and non-exclusive rights under a system licence for production, marketing and sales of the Group’s proprietary technology, Opcon Powerbox ORC (Organic Rankine Cycle) and WST (Wet Steam Turbine) within the agreed territory. The joint venture thereby has a licence for exclusive manufacturing rights for Opcon Powerbox in China, Taiwan, Thailand, Vietnam, Indonesia, Malaysia and North Korea, exclusive sales rights in China, and non-exclusive sales rights in Taiwan, Thailand, Vietnam, Indonesia, Malaysia and North Korea.

The total value of production and sales rights, assessed by a third party, amounted to CNY 72 million. Of this sum, CNY 48 million (around SEK 56.6 million) constituted payment for Opcon’s capital share of approximately 49% of the joint venture. After SEK 27.7 million of this amount was reserved for elimination of internal profit the participation was reported net as other income amounting to SEK 28.9 million.

In Q4 the remaining part, CNY 24 million, of the total agreed value of CNY 72 million was invoiced as royalties. This amount, after costs and internal profit elimination, positively affected net sales by SEK 19.3 million and operating profit by SEK 10.2 million in Q4.

The joint venture was formed in September 2014 and intensive efforts are being made in China and Sweden to build this business for commercialisation and production of Opcon Powerbox at Snowman in China.

Within Waste Heat Recovery / Compressor Technology the

comprehensive development assignment for Snowman, with delivery of new compressor models and prototypes within the existing programme, remains the primary activity. At the end of 2014 a new, smaller licensing customer was added in Russia. Opcon has also meanwhile received increased international orders for its proprietary technology for compressors for biogas applications, which have otherwise been a disappointing area in recent years.

The remaining bioenergy business has continued to make losses with a couple of older projects burdening the business and the ingoing order stock was not adequate. Losses were reduced thanks to a rationalisation programme that included the closure and winding up of companies.

On the positive side, the bioenergy order stock has increased significantly during the year. The best development was on the UK market, in line with the strategy set for Saxlund after reorganisation. The order stock in the UK has increased both within bioenergy plants, including a major order for Twinwoods, and within materials handling, with several orders signed for a number of water treatment works. In Sweden a large order for Saxlund’s fuel handling equipment and incineration technology was received from the privately owned sawmill Hilmer Andersson, HAL, Korterud, Sweden. The order is worth around SEK 28 million, with commissioning set for 2015. This plant will supply hot water to the timber driers based on incineration of waste products such as sawdust, wood chips and bark. The licence business with Axis has also been significant, with sales in 2014 amounting to around SEK 6.5 million. Development was weaker in Germany, which resulted in major efforts being made to boost sales and improve profit margins.

The extensive savings programme that has been completed, and which included reduced financing costs, the closure in Åmål and the cutbacks in bioenergy, with the decommissioning and liquidation of subsidiaries, has delivered results. When the savings programme was initiated, total annual savings of over SEK 30 million were expected, with an effect in 2014 of around SEK 20 million. Despite considerable reductions in overhead levels and staff costs, progress in 2014 was not quite as much as predicted.

This was partly due to the fact that the savings programme at Group level was countered mainly on the staffing front by recruitment within the Waste Heat Recovery and compressor technology sectors to strengthen the organization for its activities in China that are now intensifying following the formation of the joint venture with Snowman.


the opCon group in 2015 and beyond

the opcon group in 2015 and beyondWhen Opcon set the framework for its strategic move into energy and environmental technology ten years ago it did so based on the background of:

– Opcon’s history and skills within technology for lean, energy-efficient development,

– Opcon’s view of the market where increasing demand for energy due to population increases, economic growth and supply problems in meeting this demand with clean, safe energy would prompt strong market growth.

HistorySvenska Rotor Maskiner (SRM) was formed in 1908 as AB Ljungströms Ångturbin to develop the twin-rotating steam turbine invented by Birger Ljungström and which was later sold to the current turbine producer Siemens Industrial Turbo Machinery AB. For over a century, Svenska Rotor Maskiner developed a series of products for the global market, including Ljungström’s air preheater from the 1920s, which in the 1990s was selected as a landmark invention by the American Society of Mechanical Engineers. It made a major contribution to increasing the efficiency of large power stations. Since the 1930s compressor technology has been continually developed and major licensees include Atlas Copco, Hitachi, IR, Carrier, York, Trane, Kobelco, etc. Today, SRM is a key part of Opcon’s Renewable Energy business area’s focus on recycling waste heat using Opcon Powerbox.

Greater demand for energyIt is clear that global demand for energy is increasing significantly. This is primarily due to a combination of population growth and rising prosperity.

The UN forecasts that the world’s population will climb from 5.3 billion in 1990 to around 8.5 billion in 2035. Those are remarkable figures, even though the rate of increase by the end of this period will slow to almost half of what it was over the past 20 years. The International Energy Agency (IEA) predicts that overall global demand for energy will rise by two thirds from 2011 to 2035, of which most will be in non-OECD countries, led by China and India.

Major efforts will obviously be required to meet targets for limiting global warming. Today, the energy sector accounts for two thirds of all global emissions of greenhouse gases. The need to restrict emissions from fossil fuel sources such as coal and oil, together with rising demand, are expected to result in significant increases in energy prices over time. Meanwhile there will be large regional differences in both demand and prices for energy.

Energy pricesIn 2014 oil prices fell significantly. Meanwhile, electricity prices in Sweden have been very low, which has not favoured sales of parts of Opcon’s product portfolio. Electricity prices on other markets are considerably higher, including China where Opcon is focusing an increasing share of its resources and where since 2014 the Group has a joint venture with Fujian Snowman Co.,

Ltd. for the commercialisation of Opcon Powerbox. In many Chinese provinces today electricity prices are twice as high as in Sweden.

China the largest energy userAs recently as 2000, energy consumption in China was half of what it was in the US. Today the IEA considers that China has exceeded the US as the world’s largest energy consumer and that demand in China, especially for electricity, is continuing to rise. Over the next 20-25 years, the IEA expects China to add further capacity to generate electricity equivalent to joint production in the US and Japan. Chinese energy production is highly dependent on fossil fuel. The country uses as much coal as the rest of the world combined.

Meanwhile there is a strong commitment in China to restricting emissions and the IEA expects that growth in renewable energy in China up to 2035 will be stronger than in the EU, US and Japan together.

In the immediate forecast period until 2019 alone, and despite the assumptions of a lower economic growth rate in China than in the past of 7% on average, the IEA expects that the bulk of new energy will be generated from carbon. But despite that, is also expected that 1200 TWh of new electricity will come from sources other than carbon. That means from gas, nuclear and renewable while increased energy efficiency will also contribute. When the IEA breaks down the numbers, it gives a perspective on the current development in China. The IEA forecast corresponds to assumptions of new hydropower equivalent to one new Three-Gorges dam per year, 110 GW of new wind power, which is close to the total installed capacity of wind power throughout Europe today, and 80 GW of solar power, which is more than Europe’s total installed capacity today.

The Chinese market has good prospects of becoming the largest in the world for Opcon Powerbox. It is estimated that there are over 500,000 industrial boilers in China. China is still at an early stage in recovering waste heat, and therefore an increase in capability to recover waste heat would contribute to greater energy efficiency and reduced emissions to the benefit of

Opcon’s sales per market, %

2014 2013

Europe incl. Sweden China Other countries

12.4

21.0

66.6

3.5

10.5

86.0


the opCon group in 2015 and beyond

the economy and environment in coming years.Higher electricity prices in China, growth and investment

in the economy, the political will to increase energy efficiency and significantly lower production costs make Opcon greatly optimistic about the strategic collaboration that has started.

Energy efficiency is key to an ecologically sustainable future The decisive factor in meeting demand for energy in a sustainable manner is the efficiency with which energy is consumed. The IEA estimates that up to 2035 as much as two thirds of the economic potential in increased energy efficiency is so far going unexploited and that therefore economically necessary measures could be implemented that would reduce energy demand by a volume equivalent to the entire oil production of Russia and Norway combined.

One area that has special importance with regard to energy efficiency is the recycling of waste heat. In industrial processes and within a large part of the world’s electricity production the energy involved is not being fully utilised. Instead, large portions of this energy are being converted into heat and either being wasted or not used. According to the IEA, only a third of the energy used to generate electricity eventually becomes electricity. The rest becomes heat.

Opcon has concentrated significant resources into developing systems that offer different alternatives for utilising waste and surplus heat. These include systems for district heating and for electricity production, or a combination, depending on what best suits the customer. Opcon has directed its products onto the part of the market that is usually labelled low-grade waste heat, at temperatures below 230°C.

Several of the systems, such as Opcon Powerbox ORC and WST, have global potential. The key component at the heart of Opcon Powerbox, is the Lysholm turbine, developed at Opcon’s centre-of-excellence for screw compressor technology, Svenska Rotor Maskiner, SRM. One of the main competitive advantages of the Opcon Powerbox ORC is its efficiency at very low temperatures, which enables electricity generation for many more applications. Opcon Powerbox is also being developed and adapted for use in marine applications. Around 90% of global trade goes by sea, and ships are big users of oil. Prices for bunker oil have risen sharply over the past decade.

Meanwhile, regulations have become much stricter for emissions of substances such as NOx, sulphur and particles from ships. As regulatory demands from the authorities get tighter, demand increases for better fuel quality and prices thus rise even further.

As energy prices rise, the authorities sharpen requirements and actors in the marine industry commit themselves to reducing emissions, there is growing interest in greater energy efficiency.

Biomass for electricity and heatingAnother important part of Opcon’s business focuses on the bioenergy sector. Biomass has a special place among renewable fuels. Sweden has a unique position globally as over 60% of our energy used to generate heating comes from renewable energy sources, mostly biomass. There is tough competition on the Swedish market, which is well-developed. Opcon with its Saxlund and Svensk Rökgasenergi brands has a large installed base in the country.

In recent years Opcon has driven through an extensive programme of change in its bioenergy business, redirecting activities and closing down several sections. The focus has shifted to activities outside Sweden. The IEA forecasts that global demand for bioenergy for electricity production will almost triple between 2011 and 2035.

Swedish technology on international marketsOver many years Opcon has channeled considerable resources into developing advanced energy-efficient technology. This applies especially to the compressor technology developed by Svenska Rotor Maskiner that is the heart of Opcon Powerbox. It also applies within bioenergy, where through Saxlund and Svensk Rökgasenergi, Opcon has developed a wide product portfolio that has good exporting prospects. Most of the sales in bioenergy are already taking place on markets outside Sweden.

With the market growth Opcon sees in several markets overseas, greater efforts are now being made to develop international activities even further. The crucial steps in this development in recent years have been in the closer strategic collaboration with Snowman in China, where a joint venture was formed in 2014 for the commercialization of Opcon Powerbox, and with Axis in Lithuania within bioenergy.

System price for electricity in Nordic regionEur/MWh Source: Nord Pool Spot, Nasdaq/OMX Commodities, Swedish Energy

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Corporate governanCe report

Opcon's Corporate Governance Report for 2014Opcon AB has its registered office in Stockholm, Sweden, and is a Swedish company listed publicly on Nasdaq OMX Stockholm. Opcon AB is the parent company of an energy and environmental technology Group. In addition to all regulations stated in law or other legal statute, the company applies the Swedish code of corporate governance. This Corporate Governance Report is not part of the formal reporting.

SharesAt the end of 2014 the company had around 7,424 shareholders, a rise of around 474 on the previous year. The largest shareholder was B.O. Intressenter (Mats Gabrielsson) with 18.0%. The next largest shareholder was Hong Kong Snowman Technology Ltd. with 17.0%.

As part of ongoing refinancing, Opcon performed in Q1 2014 a directed issue of 4,385,965 shares to GEM Global Yield Fund Limited. This raised SEK 2,500,000 for Opcon and was settled against debt. A private placement of new shares was also carried out of more strategic significance for the continued development of the long-term strategic collaboration that is joining Snowman and Opcon closer together. The private placement of 30,000,000 shares was agreed with Hong Kong Snowman Technology Ltd., raising SEK 17,100,000 for Opcon before costs. The issue was made with the authorization of the Annual General Meeting.

The total number of registered shares at the end of 2014 was 378,800,110, an increase on the previous year of 34,385,965 shares.

All shares are of the same category and give the same right to voting and dividends.

Shareholders’ MeetingThe rights of shareholders to make decisions concerning the affairs of the Company are exerted at the Annual General Meeting, which is held within six months of the end of the financial year. A number of central matters are addressed at the Annual General Meeting, including the adoption of the Company’s income statements and balance sheets for the past year, the dividend, election of board of directors and auditors, etc. The notification of the Annual General Meeting and extra general meetings at which the articles of association are to be addressed, and including information about application to participate, the agenda for the meeting and information about matters to be addressed, shall be produced six weeks before the general meeting at the earliest, and four weeks before it at the latest. Shareholders or their nominees may vote with their full amount of owned or represented shares.

Annual General MeetingAt the Annual General Meeting of Opcon shareholders held on 6 May 2014 it was decided that the board of directors shall comprise six members without deputies. The meeting re-elected Kenneth Eriksson, Mats Gabrielsson, Rolf Hasselström, Bengt E Johnson and Bill Tunbrant, and the new election of Wendy Lin. Bill Tunbrant was elected chairman. Shiva Farahmandrad, Swedish Association of Graduate Engineers, is the employee representative on the Board.

The Annual General Meeting authorised the board to reach a decision on whether to issue new shares or convertibles. The Board was authorised to take a decision on one or more occasions up until the next Annual General Meeting concerning the issue of new shares and/or issue of convertibles and/or subscription

options. Using this authorisation, at most 95,000,000 shares may be issued. The aim is to give the board resources in connection with investments, company acquisitions and raising capital.

At the Annual General Meeting decisions were made concerning two incentive schemes. None of the schemes have yet been utilised and no shares have yet been issued to executives.

The options scheme for Board members represents a deviation from the Swedish Code of Corporate Governance. The launch of the scheme was proposed by the company’s largest shareholder to further increase the shared commitment between Board members and the company’s shareholders. The scheme has not yet been utilized.

Work of the BoardOpcon AB’s Board of Directors has six members elected by the Annual General Meeting, none of whom are woman. A presentation of Board members appears on page 17 of this annual report. In addition to members elected by the Annual General Meeting, there is one employee representative and one deputy.

The CEO was a member of the Board in 2014. A minority of the Board members elected by the Annual General Meeting (Bengt E Johnson and Bill Tunbrant) are independent in relation to the company and the executive team, and can also be considered independent of the company’s main shareholders. Only one Board member (CEO Rolf Hasselström) is part of the executive team.

During the year, Wendy Lin, who represents Snowman, Opcon’s second largest shareholder and largest customer, was elected onto the Board. After Weny Lin replaced the former independent Board member, Ulf Ahlén, the number of independent Board members in relation to the company and senior managers constitutes a minority, which is in deviation of the Swedish code of corporate governance. There are no other links between the two major shareholders, Mats Gabrielsson and Snowman.

Working procedures for the Board are adopted annually at the first Board meeting held after the Annual General Meeting. Procedures include details about the division of responsibility among members of the Board, the chairman and the CEO. The Board has decided not to establish any committees and the entire Board thus participates in both the preparation of matters and decisions. The Board will make decisions on issues that are not a

How Opcon is governed

OWNER

ANNUAL GENERAL MEETING

BOARd OF dIRECTORS

PRESIdENT

AUdITORS



part of regular administration or are of major importance such as key financial measures, contracts, investments and organisational changes. The Board determines the financial policy of the company. The Board’s work follows an annual plan with a fixed agenda for each Board meeting. The company’s Chief Financial Officer participates at Board meetings as the secretary. Other Group employees may make presentations to Board meetings.

According to the Swedish code of corporate governance, the Board must ensure that either the company’s Q2 or Q3 report is reviewed by the auditor. Due to a lack of resources, with a large part of the company’s finance staff replaced during the year, the Board decided not to implement this measure this year.

During 2014, 14 minuted Board meetings were held. The Board also met the company’s auditors without any senior executives present. The CEO presents the economic and market situation at the scheduled Board meetings.

The issues addressed by the Board in 2014, in addition to monitoring the current state of the business and the setting of budgets for the coming year, were primarily focused on the formation of the joint venture with Snowman for Opcon Powerbox in China, the restructuring and savings programme as well as financing and future structure of the Group.

The chairman of the Board has responsibility for leading and developing the work of the Board. The process for assessing the work of the President and the Board, which has for several years included a regular survey and discussions between the chairman and Board members, has been restricted to discussions between the chairman and Board members following the abolition of the Nomination Committee. The Board has also evaluated the work of the President when he was not present.

Guidelines for remuneration to senior executivesThe Board has not established a remuneration committee but has made the assessment that the entire Board shall both prepare and decide on this matter. This means that Rolf Hasselström, who is both a Board member and President, participates in this matter, which deviates from the Swedish code of corporate governance. The reason for this is that Rolf Hasselström, as owner of Calamus AB which is one of the company’s largest shareholders, cannot be considered solely to be an employee of the company and is well suited to take care of the owners’ interests.

Remuneration to the CEO and other senior executives shall comprise a combination of fixed salary, long-term incentive scheme, pension benefits and other benefits along with conditions governing termination of employment and severance pay. The overall compensation package shall be market-based, competitive and performance-based. Fixed salary shall be individual and based on each individual’s responsibility, position and competence. Pension benefits shall be defined-contribution plans and give the right to pension benefits to Swedish citizens from age 65. Leading decision makers may be offered variable remuneration, which in Sweden amounts to a maximum of two monthly salaries based on the achievement of specific targets.

When the company gives notice of dismissal the dismissal period is 24 months for the CEO and 12 months for other senior executives. The above guidelines applied for the 2014 financial year and were adopted by the 2014 Annual General Meeting.

In 2014, no variable remuneration was paid to executives.

Nominations committeeThe company no longer has a nominations committee, which deviates from the Swedish code of corporate governance.

The purpose of abolishing the committee was to reduce administration within the company to focus on revenue-generating business and save resources.

AuditorsThe company’s auditors are chosen by the Annual General Meeting of shareholders. The meeting also establishes the fees to be paid to auditors. The auditors attend at least one Board meeting every year, in connection with the presentation of the annual accounts, when they submit their report on the company’s results, financial position and internal controls. The Board does not have an audit committee and audit issues are addressed by the Board as a whole.

When the auditors make their presentation to the Board the CEO and secretary leave the room to allow Board members to discuss with the auditors privately. The company’s auditors attended one Board meeting in 2014. At the 2014 Annual General Meeting PricewaterhouseCoopers AB, PwC, was elected as auditing firm for the ensuing one-year period.

Internal controlsThe Board has responsibility for internal control in accordance with the Swedish companies act and the Swedish code for internal controls.

Risk assessmentOpcon’s risk assessment is based on the Group’s financial goals for profitability and growth. The overall financial risks are not currently solely industry-specific and variable for different parts of the business, they also involve further risks of a general character associated with economic development and the effects of the financial crisis. There are also company-specific risks associated with the extensive organizational build-up connected with the development of new products. This has also led to failures in reaching targets historically and Opcon identifies significant risks that may constitute a threat to achieving the Group’s goals. Measures to limit identified risks are produced at business area level or centrally at corporate level depending on their nature.

An economic downturn and disruptions on world financial markets can have a negative effect on demand for the Group’s products and also affect the Group’s customers and suppliers. Given the global financial instability the company’s customers may experience financial problems that could cause losses or disruptions for Opcon. Similarly, Opcon is involved in a number of large bioenergy projects for which disruptions could affect profit margins, profitability and liquidity.

Changes in energy and electricity prices can also affect demand, with lower prices having a negative impact. In addition there are financial risks, principally involving liquidity,

Attendance at Board meetings, 2014

Name Role Attendance

Bill Tunbrant Chairman 14 of 14Kenneth Eriksson director 14 of 14Mats Gabrielsson director 14 of 14Rolf Hasselström director 14 of 14Bengt E Johnson director 14 of 14Wendy Lin director 2 of 14 Shiva Farahmandrad director 14 of 14



price, currency and interest risks and the Board continues to consider that the level of liquidity is unsatisfactory to ensure uninterrupted and problem-free operation with growth. The company is reporting a profit for the 2014 fiscal year, but as the company’s accounts for earlier years show the company has made losses previously. There is no guarantee that the company will make a profit in the future. The Group’s ability to receive long-term loans and short-term credit are also significantly affected by the current situation on capital markets, which can affect the company’s liquidity and growth opportunities in future. The Group is exposed to a short-term liquidity risk in the form of customers paying invoices after the agreed date.

Opcon’s view of the various financial risk factors that affect its business are presented in note 1, section 3 of this annual report. Other risk factors include the following:

Dependency on business cycleEconomic trends affect the overall willingness to invest in the business world in general and thus also Opcon’s customer groups. The company’s sales are mainly affected by demand in general industry, where a significant part of Opcon customers are active. Thus, Opcon’s ability to sell its products and services is indirectly affected by factors affecting economic confidence both in Sweden and abroad, such as interest rates, inflation, exchange rates, energy prices, environmental legislation, political uncertainty and unemployment.

Technology development The market areas in which Opcon operates are characterized by long sales cycles. The company’s technology must therefore be accepted to a large extent by the leading players on the market, both by suppliers and among customers. The market must be mature enough to understand and embrace the new technology supplied by the company. This can mean that major investments in marketing and sales are required to achieve the expected sales volumes. As markets in which the Company operates grow and the number of players increases, there is a risk that alternative technologies are developed and that the price of comparable products falls. As the company introduces new technology shortcomings and problems can also arise afterwards that were not obvious from the beginning, which can adversely affect the company’s operations, performance and financial position.

Customer dependence Opcon works continually to actively broaden its customer base to reduce dependence on individual customers. If a major customer becomes insolvent or selects another supplier this could have a negative impact on Opcon’s earnings and financial position. At the same time the strategic investment made in China and the developing partnership with Chinese Snowman is a departure from these efforts. Sales to Fujian Snowman Co., Ltd., and the joint venture Fujian Opcon Energy Technology Co., Ltd., amounted in 2014 to a total of 21% of sales. Sales to Snowman and the joint company in 2015 are expected to be substantial, and Opcon is now devoting substantial resources to build up the joint venture for Opcon Powerbox. The rate at which the joint venture Fujian Opcon Energy Technology Co., Ltd. develops therefore is expected to be of great importance for Opcon’s earnings and financial position.

The speed at which Opcon Powerbox is introduced in Australia depends on Opcon’s customer, partner and affiliated company in Australia, Enerji Ltd., gaining adequate funding for

its activities. As Australia as a market, and especially the part that lacks electricity supplies, is of interest to Opcon, a failure of Enerji to finance their activities would have an adverse influence on Opcon’s earnings and financial position.

Opcon has previously had a significant sale of new technology with good prospects to the Russian oil and gas industry. The company sees a risk that the West’s relations with Russia may influence Opcon’s sales and growth opportunities.

Project risks In parts of the business, not least in bioenergy, large portions of sales are conducted as projects where far-reaching guarantees and other commitments are expected from suppliers. These projects can be run over a long time, sometimes over a year. With many parties and complicated technical solutions involved disruptions at subcontractors, on-site or otherwise could cause delays and cost overruns that could result in negative impacts on Opcon’s earnings, cash flow and financial position.

Competitors and pricing Opcon operates in a competitive market which means that increased competition may adversely affect the company’s operations, performance and financial position. For example, customers to a greater extent than previously may select products that compete with Opcon’s current and future product offerings. It cannot be excluded that increased competition may affect Opcon’s margins. Within bioenergy, where the majority of sales are project sales, the pressure on profit margins due to the recession has been very clear.

Dependence on suppliersSome suppliers are necessary for current production and if the Group loses one or more of these, or if alternatively, deliveries are late or of poor quality, it can lead to delays which would mean additional costs for the Group. Dependence on Key Personnel It is important for Opcon to attract and retain qualified staff and management. Key persons are deemed to have a significant impact on the company’s future success. If key personnel leave Opcon or if Opcon is unable to attract qualified personnel this could have negative consequences for the company.

Reorganization Major reorganizations and restructuring and savings programmes like that implemented within the Renewable Energy business area, carry an increased risk of disruptions in operations not at least in the short term. There is also a risk that desirable financial effects are not fully achieved or will take longer than expected before their full impact is felt.

Government regulations and environmental requirements The environmental risks within Opcon’s business is mainly attributable to the chemicals present in production processes. It is conceivable that future stringent environmental standards may impose new and stricter requirements for the company’s operations, such as requirements for the replacement of chemicals used in operations. Political decisions can also affect the pricing of chemicals used in business.

Research and development Opcon’s research and development activities are primarily



focused on the development, construction and testing of new products, or improvement of existing products, in the areas of generating electricity from waste heat and compressor systems. Continual research and development is required in order to maintain Opcon’s position. The development and industrialization of Opcon Powerbox is a significant undertaking. This is a large and extensive commitment in which Opcon also depends on other external actors. Overall, there is always the risk that development projects become more costly or take more time than expected. If this should occur on the marine side, because of the size of the project, lead times, etc. it would have greater consequences than for land applications.

Product liability and damage claims In the event of production faults or improper use, some of Opcon’s products could give rise to personal injury or property damage, whereby the company may become subject to claims regarding product liability, warranty disclaimers and other legal claims. This can also apply to quality defects or late delivery. Such claims can involve large amounts, particularly with regard to the fact that in those industries that Opcon operates in, extensive guarantees and other commitments are expected from suppliers.

Protection of intellectual property In relation to its size, Opcon invests significant resources in product development. To ensure the return on these investments, the company actively protects its rights and monitors the activities of competitors. If necessary, the company will protect its intellectual property rights through legal processes. There is always a risk that competitors with or without intent will infringe Opcon’s rights. Should this occur, there is a risk that the company cannot assert its rights relating to patents, trademarks, and know-how fully in court proceedings. There is further no guarantee that Opcon’s rights will not infringe a competitor’s rights, or that Opcon’s rights will not be attacked or contested by competitors. It may not be excluded that Opcon could be drawn into litigation by competitors for alleged infringement of competitors’ rights. Should this occur, there is a risk that the company will suffer significant costs and the company’s ability to conduct operations will be adversely affected. Opcon is also dependent on know-how and it cannot be ruled out that competitors may develop corresponding know-how or that Opcon fails to protect its knowledge effectively. These risks will also increase as Opcon expands its operations into new markets, including China.

Control activitiesRisks concerning financial reporting are handled through various control activities. Opcon has gathered its economic function within the Swedish operation to become a corporate function within Opcon AB. This is being done partly to improve efficiency but also to raise the quality of financial reporting and sharpen administration routines, where the company still sees room for improvement.

To handle risks, there are automatic checks using IT systems that manage authorisation and verification. Economic analysis is being developed to improve continual monitoring of financial results and follow-up against budget and forecasts to complement the business-specific controls and give overall confirmation that reports maintain the required quality.

The investment in a new business system and consolidated accounts system that has taken place in recent years to further

improve quality of financial reporting and economic analysis, has proven too complicated and expensive following the sale of SEM, and a review has been initiated. This review will include further development of authorization and attestation systems. Work has continued on developing new, uniform templates and models for identifying and documenting processes and controls, with major efforts to establish new structures for customer and supplier agreements, economic analysis, project control, etc. During 2014 all remaining administration at Åmål was wound up and moved to Stockholm. Consequently the internal IT department was abolished and these services have been outsourced.

In 2015 strong efforts will be made to enhance the business system and strengthen the Group-wide economic function and development of controller functions.

Information and communication Opcon has clear and straightforward information and communication channels for financial reporting and all managers are aware of existing policies. As part of the review of the business system that has started, communication of practical guidelines intended to improve distribution channels and structure the information requirement will be revised.

Follow-up/monitoringThe finance department and senior managers continually analyse financial reports for the Group. Activities have been centralized further in order to strengthen control and measures have been implemented to successively improve in areas where weaknesses have been identified. At their Board meetings, directors monitor the financial situation and receive a report once a year from the company’s auditors which includes their observations and recommendations.

Internal auditThe Group’s overview and analysis of the control process and internal controls has focused on the fast-growing Renewable Energy business area, where a decision has now been taken to centralize economic control in Sweden into a corporate function. Considering the above work on internal controls, the Board has made a decision that a special internal audit function is not required.

Continued workThe ongoing work on internal controls within Opcon will focus in the coming year on risk assessment, control activities and follow-up/monitoring. The main focus will remain on the Renewable Energy business area and on integration of international activities with continued organizational changes. Work on the new business system and on the consolidated financial reporting system will also be important.


Corporate governanCe report: opCon's board of direCtors

Bill Tunbrant (independent)Born 1950. Civil engineer, KTH. Chairman of the Board of Opcon AB since 2013. Board member since 2011.

Other assignments: Board member of Nordic Coag Invest AB, Nordic Biomarker AB, Bio-Yao AB, Sinoreagens AB, Timcon AB and Medirox AB. Part-owner of Timcon AB. Owner of Timcon.

Previous assignments: Chairman of the board of Temporent AB. Board member of China Health Labs & Diagnostics Ltd. (Toronto TSX-V), Vik-won Sweden AB, XSpray Microparticles AB, Nordic Modular Leasing AB, Temporent A/S, Denmark, NIBE Industrier AB, Liacon AB, Flexihus Rent i Sverige AB and Rehact AB.

Holdings in Opcon as of 31 March 2015: 60,020 shares.

Mats GabrielssonBorn 1950. Graduate Business Administrator, HHS. Board member of Opcon AB since 2013, Chairman of the Board of Opcon AB 2005-2012.

Other assignments: Chairman of the Board of Gabrielsson Invest AB, B.O. Intressenter AB, City Dental i Stockholm AB and others. Board mem-ber of Music Network Records Group AB, TPC Components AB, Bofast AB, Rapid Larmcentral AB, and others.

Previous assignments: Chairman of the Board of Malka Oil AB (publ), board member of Svenska Rotor AB, Tamm & Partners Fondkommission AB, and others.

Holdings in Opcon as of 31 March 2015: Via family and companies 68, 129,066 shares (19.4% of total).

Bengt E Johnson (independent)Born 1940. Civil engineer, KTH. Board member of Opcon since 1997.

Other assignments: Board member of Somas Instrument AB, Aktiebo-laget Somas Ventiler, CS Produktion AB.

Previous business: CEO of BTG Källe Inventing AB, Geschäftsfuhrer BTG Processtechnik, member of senior corporate team at Spectris AG, board member of Matkultur i Säffle Aktiebolag.

Owns no shares in Opcon.

Kenneth ErikssonBorn 1959. Graduate Business Administrator. Board member of Opcon since 2005. Operational business: CEO of Gabrielsson Invest AB.

Other Board assignments: Chairman of Bofast AB, Rapid Larmcentral

AB, Rapid Bevakning AB, and others. Board member of Gabrielsson Invest AB, B.O. Intressenter AB, TPC Components AB, and others.

Previous business: Auditor within Tönnerviksgruppen (now part of Ernst & Young).

Previous assignments: Svenska Capital Oil AB, Tamm & Partners Fond-kommission AB, and others.


Rolf HasselströmBorn 1951. MBA, Stockholm School of Economics. Board member of Opcon since 2005. Operational business: President and CEO of Opcon since 2005.

Other assignments: Board member or Chairman of the Board of all Opcon subsidiaries, Chairman of the Board of Calamus AB and TPC Components AB. Board member of RMH Holding AB, Rolf Hasselström Konsult- och Förvaltnings AB, Landström arkitekter AB, Calamus Holding AB and Calamus Invest AB.

Previous business: KemaNobel AB, Kenobel AB, Nobel Industrier AB, Calamus Aktiebolag, Svenska Rotor Maskiner AB and others.

Previous assignments: Chairman of the Board of GEP Action AB, Music Network Records Group AB, Sincyl AB. Board member of Catella Förmögenhetsförvaltning AB, Lysholm Technologies AB, Calamusgrup-pen AB, Essarem Holding AB, Rotor Holding AB, Rapid Larmcentral Aktiebolag, Mind AB, Skå Edeby Utvecklings AB, MMSA Avveckling AB, GEP Design och Produktkommunikation AB and Enerji Ltd.

Holdings in Opcon as of 31 March 2015: Directly and indirectly via companies 8,831,505 shares.

Wendy Lin Born 1991. BSc in mathematics and finance, University College London. CEO assistant, Fujian Snowman Co., Ltd.

Member of Opcon Board since 2014.Owns no shares in Opcon.

Shiva FarahmandradBorn 1953. Civil engineer. Employed by Opcon Energy Systems AB. Board member of Opcon since 2013, employee representative of Swe-dish Association of Graduate Engineers.

Owns no shares in Opcon.

From left:Bill TunbrantShiva Farahmandrad Wendy LinRolf HasselströmKenneth ErikssonMats GabrielssonBengt E Johnson


Corporate governanCe report: opCon's management team and auditorsstatement by the auditor ConCerning the Corporate governanCe report

Statement by the auditor concerning the corporate governance report

To the Annual General Meeting of Opcon AB (publ), corporate registration no. 556274-8623

Assignment and division of responsibilityWe have read the corporate governance report for 2014. Responsibility for the corporate governance Report and its compliance with the annual accounts act, rests with the Board of Directors. Our responsibility is to make a statement on the corporate governance report based on our audit.

Scope and focus of checksThe audit was conducted in accordance with RevU 16 ‘The auditor’s ex-amination of the corporate governance report’. This means that we have planned and performed the audit to obtain reasonable assurance so that we can state that the corporate governance report does not contain material misstatement. An audit includes examining, on a test basis, evi-

dence supporting the information in the corporate governance report. We believe that our audit provides a reasonable basis for our opinion.

StatementWe consider that a corporate governance report has been produced, and that its legal contents are in accordance with the annual report and with the consolidated accounts.

Stockholm, 15 April 2015PricewaterhouseCoopers AB

Bo HjalmarssonAuthorised public accountant

Rolf HasselströmBorn 1951. MBA, Stockholm School of Economics. President and CEO of Opcon AB since 2005. Employed since 2004. Board member since 2005.

Other assignments, see previous page.Holdings in Opcon as of 31 March 2015: Directly and indirectly com-

panies 8,831,505 shares.

Niklas JohanssonBorn 1970. MBA, Stockholm School of Economics. Deputy CEO of Opcon AB, Investor Relations, Strategic Development and Public Affairs. Employed since 2007.

Other assignments: Chairman of Friends Agenda AB.Previous roles: political advisor at Government Offices of Sweden,

Prime Minister’s Office, Ministry of Industry, Employment and Communi-cations, and Ministry for Foreign Affairs.


Claes PalmBorn 1962. Accountant. Deputy CEO and CFO of Opcon AB.Employed since 2013.


Bo HjalmarssonBorn 1960. Authorised public accountant, PricewaterhouseCoopers AB, Stockholm. Member of FAR, the professional institute for authorized public accountants. Auditor of Opcon since 2013.

In addition to Opcon, Bo Hjalmarsson has audit assignments at Eniro, Ericsson, SAS and Teracom, among others.

Fr om left:Rolf HasselströmNiklas JohanssonClaes PalmBo Hjalmarsson


artiCles of assoCiation of opCon ab

Articles of association of Opcon AB (publ), corporate registration no. 556274-8623, adopted at the Extra Meeting of Shareholders held on 9 November 2012.

1. Company nameThe company name is Opcon Aktiebolag. The company is a public com-pany (publ).

2. Registered officeThe company has its registered office in Stockholm, Stockholm County.The Annual General Meeting is held annually in Åmål or Stockholm.

3. OperationsThe company shall itself or through wholly or partly owned subsidiaries conduct engineering activities, manufacture and market electronic and electromechanical products, and perform other related activities.

4. Share CapitalThe share capital shall be not less than SEK 160,000,000 or more than SEK 640,000,000.

5 Number of sharesThe number of shares shall be not less than 130,000,000 or more than 520,000,000.

6. Board membersThe Board shall comprise 3-10 members, with a maximum of 10 depu-ties.

7. AuditorsOne or two auditors, with or without deputy auditors, shall be ap-pointed by the Annual General Meeting to audit the administration of the Board and President and the company's accounts and the annual accounts.

8. NoticeNotice of a general meeting of shareholders shall be made in the form of an announcement in an advertisement in the Official Gazette (Post och Inrikes Tidningar) and on the company’s website. Confirmation that notice has been given shall be given in an advertisement in Dagens Industri.

Shareholders who wish to participate in negotiations at the general meeting must be included in the printout or other presentation of the full share register as per 5 days prior to the Meeting and must notify the company of their intention to participate by 12 noon at the latest on

the day indicated in the announcement of the meeting. The latter date shall not be a Sunday, holiday, Saturday, midsummer eve, Christmas eve, New Year's eve and shall not be earlier than five working days before the meeting.

Shareholders may be accompanied by one or two assistants at the meeting provided that the shareholder has notified the company in ac-cordance with the above paragraph.

9. Annual General MeetingThe AGM must be held within 6 months after the end of the financial year end. The Annual General Meeting shall address the following mat-ters :

1. Election of Chairman of the Meeting;2. Preparation and approval of voting list;3. Election of one or two checkers of the minutes;4. Adoption of the agenda;5. Determination of whether the Meeting has been duly convened;6. Presentation of accounts and audit report and as necessary, consoli-dated financial statements and the consolidated audit report;7. Decisionsa) Adoption of the income statement and balance sheet as well as the consolidated income statement and consolidated balance sheet;b) allocation of the Company's profit or loss according to the adopted balance sheet;c) discharge of responsibility for the directors and CEO;d) determination of the record date;8. Determination of remuneration for the Board and auditors;9. Determination of the number of directors and deputies:10. a) Details of board candidates' positions in other companies;b) Election of directors and auditors and any deputy auditors;11. Other business to come before the Meeting under the Companies Act or Articles of Association.

10. Registration provisionThe Company's shares shall be registered in a securities register under the Act (1998:1479) concerning Accounting of Financial Instruments.

11. Fiscal YearThe Company's fiscal year shall be the calendar year.


report of the board of direCtors

Report of the Board of directorsGroup overview

Opcon’s business conceptOpcon is an energy and environmental technology Group that develops, produces and markets products and systems for environ-ment-friendly, efficient and resource-effective energy consumption for customers in the process, manufacturing, electricity and power generation, timber and forest, greenhouse and shipping industries.

Opcon’s objectivesThe Group will generate good and sustainable profitability and aim for growth in order to create long-term growth in value for shareholders, create value for customers and offer a stimulating workplace for staff.

Opcon’s visionOpcon will be actively involved in building a society no longer dependent on fossil fuels. With high tech products and services Opcon will contribute to global development towards a more energy-efficient and eco-friendly society.

Organisation Opcon has activities in Sweden, Germany, the UK and China. There are 141 employees. The shares are listed on Nasdaq OMX.The Opcon Group comprises the parent company, Opcon AB, based in Stockholm, and the following subsidiaries: Opcon En-ergy Systems AB (OES), Svenska Rotor Maskiner AB (SRM), Sax-lund International Holding AB, Svenska Rökgasenergi AB (SRE), Saxlund Bioenergy AB (SAX), Saxlund International GmbH, Opcon GmbH, Saxlund International Ltd., Boxpower AB, Box-power International AB, and the joint venture Fujian Opcon Energy Technology Co., Ltd.

The businessThe Opcon Group focuses on the following areas: compressor technology, electricity generation based on waste heat, bioenergy-powered heat and power plants, pellets plants, handling systems for biomass, sludge and other recycling activities, industrial cool-ing, flue gas condensation, treatment of flue gases, and air systems for fuel cells.

LocationsOpcon AB and the following companies SRM, OES, SRE, OBE, SAX, Boxpower, Boxpower International and Saxlund Interna-tional Holding AB have operations in Nacka, and SAX also has operations in Hagfors.

Saxlund International GmbH and Opcon GmbH have opera-tions in Germany. Saxlund International Ltd. has operations in the UK.

Opcon Inc. and Saxlund Corporation, USA, have no operations at present.

The joint venture Fujian Opcon Energy Technology Co., Ltd. has activities in Fuzhou, China.

Parent companyThe activities of the parent company, Opcon AB, comprise ad-ministration and Group services.

The company has its registered office in Stockholm and was first listed on the O-list of the Stockholm stock exchange on 31 De-cember 1998. The company is now listed on the Small Cap list of Nasdaq OMX Stockholm stock exchange.

Sales and earningsThe GroupSales for remaining business for the year were SEK 266.2 million (275.0 m).

Operating earnings (EBIT) for remaining business were SEK 18.3 million (–52.1 m).

Profit after financial items for remaining business was SEK 13.5 million (–61.8 m).

Profit after tax for remaining business was SEK 13.0 million (–61.8 m), which corresponds to earnings per share of SEK 0.03 (–0.19).

The loss after tax was SEK 6.7 million (–64.1 m)Earnings per share attributable to parent company shareholders

was SEK –0.02 (–0.19).The key factor in the progress made during the year has been

the formation of a joint venture, Fujian Opcon Energy Technol-ogy Co., Ltd., for the commercialisation of Opcon Powerbox together with Fujian Snowman Technology Co., Ltd. of China.

The joint venture company’s registered share capital amounts to CNY 98 million (around SEK 123.4 million).

In accordance with the agreement signed during the period, Opcon has received approximately 49% of the shares in the newly started company, with Snowman receiving 51%. Opcon’s capital contribution for approximately 49% of the shares in the company, corresponding to CNY 48 million (around SEK 56.6 million), comprises part-payment for exclusive and non-exclusive rights under a system licence for production, marketing and sales of the Group’s proprietary technology, Opcon Powerbox ORC (Organic Rankine Cycle) and WST (Wet Steam Turbine) within the agreed territory. The joint venture thereby has a licence for exclusive manufacturing rights for Opcon Powerbox in China, Taiwan, Thailand, Vietnam, Indonesia, Malaysia and North Korea, exclu-sive sales rights in China, and non-exclusive sales rights in Taiwan, Thailand, Vietnam, Indonesia, Malaysia and North Korea.

The total value of production and sales rights, assessed by a third party, amounted to CNY 72 million. Of this sum, CNY 48 million (around SEK 56.6 million) constituted payment for Opcon’s capital share of approximately 49% of the joint venture. After elimination of internal profit, this participation was reported as other income amounting to SEK 28.9 million in Q3.

In Q4 the remaining part, CNY 24 million, of the total agreed value of CNY 72 million was invoiced as royalties. This amount, after costs and internal profit elimination, positively affected net sales by SEK 19.3 million and operating profit by SEK 10.2 mil-lion in Q4.

Within Waste Heat Recovery/Compressor Technology the com-prehensive development assignment for Snowman, with delivery of new compressor models and prototypes within the existing programme, remains the primary activity. At the end of 2014 a new, smaller licensing customer was added in Russia. Opcon has also meanwhile received increased international orders for its pro-prietary technology for compressors for biogas applications, which have otherwise been a disappointing area in recent years.

The remaining bioenergy business has continued to make losses with a couple of older projects burdening the business and the ingoing order stock was not adequate. Losses were reduced thanks to a rationalisation programme that included the closure and winding up of companies. In accordance with an earlier assess-ment further costs were taken by the business for decommission-ing during the end of the year.

No additional significant costs for decommissioned business are expected to arise. The loss for decommissioned business was SEK 19.7 million (1.6 m).



Financial positionThe Group’s liquid assets at the end of the period were SEK 23.0 million (17.9 m). Interest-bearing assets in addition to liquid as-sets were SEK 20.1 million (20.4 m). In addition there was unuti-lised credit of SEK 15.3 million (18.8 m).

Interest bearing debt was SEK 20.3 million (3.7 m). At the end of the period the Group had net receivables of SEK 22.7 million (34.6 m). For January-December net financial items for remain-ing business were SEK –4.8 million (–9.7 m). The equity/assets ratio on 31 December was 75.6% (75.3%).

During Q1, Opcon performed a directed placement of shares to Snowman that raised SEK 17.1 million for the company. In addition a directed placement of new shares was made with GEM Global Yield Fund Ltd., with SEK 2.5 million set-off against debt, which has reduced the amount of interest-bearing liabili-ties. The issue to GEM was within the framework of the equity line financing facility of up to SEK 250 million over 36 months signed with GEM in 2011. In connection with the new issue an agreement was signed with GEM to extend this framework by two years up to 2016, with the remaining volume of the facility now amounting to around SEK 227 million. During the autumn a short-term credit of SEK 15 million was raised with Erik Penser Bankaktiebolag, which was then replaced by a credit line from Gabrielsson Invest AB worth SEK 15 million. After the end of the period a short-term loan of SEK 10 million was raised at a bank. An extensive savings programme is meanwhile being implemented in parallel that includes decommissioning and closure of certain companies.

These measures have strengthened the financial position. How-ever the Board continues to consider that the liquidity level in combination with the credit and guarantee frameworks available today are inadequate to ensure full and smooth operation with growth. During the year the current credit will be redeemed or renegotiated. The Board will therefore continue its efforts to find more permanent and appropriate financing of the Group’s opera-tions, including a review of the company’s long-term financing structure.

EmployeesAt the end of the period the Group had 141 employees (151), of whom 18 were women (21).

Further details about employees, salaries, social fees and sick leave are included in note 5 and note 38.

Environmental impactThe GroupOpcon is an energy and environmental technology Group with a vision of becoming an active participant in developing a society not dependent on fossil fuel. The Group’s primary focus is on en-ergy efficiency, and customers are offered a series of products and systems for the recovery of waste heat. The Group also sells vari-ous products for bioenergy plants and other recycling industries, while also developing energy-efficient compressor technology for a series of applications, including industrial cooling.

Of paramount importance is the development, industrialization and internationalization of Opcon Powerbox for production of electricity from hot water or steam, with large energy efficiency potential. In 2014 Opcon formed a joint venture together with Fujian Snowman Co., Ltd. for the commercialization of the Op-con Powerbox technology in China and parts of South East Asia.

Meanwhile the Group continues to operate internationally, selling Swedish bioenergy technology directly or via licences, with most sales now outside Sweden. One product with a special envi-

The order stock for the coming 12 months for remaining busi-ness as of 31 December was SEK 155 million (125 m). This repre-sents an increase of 24% on an annual basis. The main reason for the increase is the positive order bookings in the UK.

Parent companyThe parent company had sales of SEK 44.1 million (33.2 m) in the January-December period. Sales primarily relate to invoicing for rents and internal administration services but also includes some assignments for customers.

The parent company’s profit before tax for the January-Decem-ber period was SEK 32.3 million (–18.5 m). Revenue recognition in Q3 includes other income of SEK 56.6 million attributable to licensing of Opcon Powerbox technology and which refers to payment in the form of 48.9796% of shares in the newly formed joint venture, Fujian Opcon Energy Technology Co., Ltd., in Fuzhou, Fujian, China. The company’s registered share capital amounts to CNY 98 million (SEK 123.4 million).

Revenue recognition in Q4 includes invoiced royalties from Fujian Opcon Energy Technology Co., Ltd., amounting to SEK 29.1 million.

At the end of the period, liquid assets in the parent company totalled SEK 5.8 million (0.0 m). Interest-bearing liabilities at the end of the period amounted to SEK 12.9 million (3.1 m).

InvestmentsThe GroupGroup companies active in remaining business invested SEK 3.8 million (0.4 m) in machinery and inventories during the financial year.

In addition, capitalized costs for development amounted to SEK 4.7 million (12.1 m).

In addition a net investment of SEK 23.4 million in the joint venture Fujian Opcon Energy Technology Co., Ltd. is reported for the Group.

Parent companyThe parent company had investments in machinery and invento-ries amounting to SEK 0 million (0 m).

Investments in subsidiaries during the year amounted to SEK 0.1 million (42.4 m).

The parent company during the year invested SEK 61.4 mil-lion in the joint venture Fujian Opcon Energy Technology Co., Ltd., of which SEK 56.6 million represents Opcon’s contribution (49%) for rights concerning Opcon Powerbox.

Research and developmentThe company’s research and development within the Renewable Energy business area is focused on the development, engineering design and testing of new products, or the improvement of exist-ing ones, within the areas of energy efficiency, such as generation of electricity from waste heat, bioenergy, handling systems for natural gas, industrial cooling, recycling of heat, treatment of flue gas, air systems for fuel cells and compressor development.

Costs for research and development during the year amounted to SEK 13.0 million (14.5 m). In addition, costs for research and development amounting to SEK 4.7 million (12.1 m) have been carried forward.

Divested business Divested business refers to OBE Energi AB and Opti Energy Group AB with subsidiaries, which are in liquidation. All busi-nesses were active in Opcon’s bioenergy area.



ronmental impact is SRE’s flue gas condenser, which can increase energy efficiency of biomass-powered heating plants, sawmills, etc, by 25-30% while removing particles from flue gases.

While Opcon’s principal contribution to a sustainable society rests with improving energy efficiency for customers, the Group is also striving to perform and develop its activities in a sustain-able way. The Group has a sustainability policy the aim of which is to successively increase the Group’s positive contribution and reduce the environmental impact of activities. As part of efforts to reduce the Group’s environmental impact and achieve long-term reductions in the Group’s costs district heating was installed at the premises in Nacka in 2014.

The Group’s business means a limited environmental impact with small emissions mainly to air, primarily from transport.

Key events in 2014– In Q1 two directed placements of new shares were carried out.

One was a private placement of 30,000,000 shares in Opcon at SEK 0.57 per share with Hong Kong Snowman Technol-ogy Ltd. In addition Opcon directed a private placement of 4,385,965 shares at SEK 0.57 per share to GEM Global Yield Fund Limited, of which SEK 2.5 million was settled against debt, which reduced interest-bearing liabilities.

– In April Opcon won a large bioenergy order for Saxlund’s fuel-handling and incineration technology in the UK. The order is worth around SEK 35 million with commissioning in 2015. This project is a collaboration between Saxlund in Sweden and the UK. Saxlund will deliver the fuel handling system with transport solutions and bar feeders as well as a high-pressure boiler powered by bioenergy.

– In August Opcon received an order for Saxlund’s fuel handling equipment and incineration technology from the privately owned sawmill, Hilmer Andersson, HAL, Korterud, Sweden. The order is worth around SEK 28 million, with commissioning set for 2015.

– In September Opcon and its partner in China, Fujian Snowman Co., Ltd., formed a joint venture, Fujian Opcon Energy Tech-nology Co., Ltd., for development, production and marketing of Opcon Powerbox on the Chinese market and parts of South East Asia.

– The total value of production and sales rights in the joint ven-ture, as assessed by a third party, amounted to CNY 72 mil-lion. Of this sum, CNY 48 million (around SEK 56.6 million) constituted payment for Opcon’s capital share of approximately 49% of the joint venture. The remaining part, CNY 24 million, of the total agreed value of CNY 72 million was invoiced as royalties.

Events after the end of the period– Continued good incoming orders for Saxlund’s material han-

dling systems from treatment plants in the UK.– Saxlund International GmbH wins EUR 1.5 million order from

Babcock & Wilcox Vølund for handling system at Skaerbaecks-vaerket in Denmark.

– Opcon signs agreements with Fujian Snowman Co., Ltd. con-cerning development assignments for new compressors.

– Opcon Energy Systems signs first development agreement with joint venture, Fujian Opcon Energy Technology Co., Ltd., con-cerning expansion of Opcon Powerbox product line.

– Opcon raises SEK 10 million bank loan.

Corporate governance The company has produced a Corporate Governance Report that is separate from the Directors’ Report, see pages 13-18.

Shares/ownership structureThe company has around 7,424 shareholders. In 2014 the num-ber of shareholders increased by 474.

Following the new share issues in Q1 2014 the total number of registered shares is 378,800,110 (344,414,145), an increase on the previous year of 34,385,965 shares. All shares are of the same category and give the same right to voting and dividends.

The largest individual shareholders are Mats Gabrielsson (18.0%, of which 17.7% via B.O. Intressenter AB, Hong Kong Snowman Technology (17.0%), Försäkringsaktiebolaget Avanza Pension (4.2%), Calamus AB (2.3 %), Nordea Bank Holding (2.1%) and Emmaljunga Holding AB (2.0%).

The Group in 2015 and beyondAfter major losses in recent years and an intensive and compre-hensive phase of development, Opcon is now implementing a fundamental financial and operational turn-around with the pur-pose of concentrating business on Waste Heat Recovery and the compressor technology at the heart of Opcon Powerbox, along-side a sharper focus within bioenergy. Major efforts are also being made to grow the business internationally on markets, and these efforts are starting to bear fruit.

Significant progress has been made in recent years in China as the strategic collaboration between Opcon and Snowman of China has grown much stronger. In the spring of 2014 Snowman has boosted its ownership in Opcon through a directed placement of shares.

In Fuzhou, China, Snowman has built a completely new factory for production, among other products, of compressors developed by Opcon. It is estimated that Opcon’s future licensing income from Snowman’s production over the coming decade will increase successively and jointly exceed SEK 100 million in this period as a whole. In 2013 alone, sales of compressor development to Snowman almost tripled to exceed SEK 30 million. This level was maintained in 2014 with Snowman placing additional major development assignments with Opcon. For Opcon, Snowman’s investment and the collaboration that has begun mean that Op-con looks forward to receiving further development assignments from Snowman over a long period within industrial refrigeration compressors, an area in which Opcon is strengthening its capabili-ties.

Of great strategic importance is also the expansion of the col-laboration that began in the autumn 2014 with the formation in September 2014 of the joint venture for the commercialisation of Opcon’s technology for waste heat recovery, Opcon Powerbox.

Over the past decade, concerns about energy prices, energy supplies and emissions have emerged as key issues globally and locally. Meanwhile energy and electricity prices are affected by a series of factors and vary across markets. In 2014 oil prices fell significantly. Meanwhile, electricity prices in Sweden have been very low, which has not favoured sales of parts of Opcon’s product portfolio. Electricity prices on other markets, including China, are considerably higher. In many Chinese provinces today electricity prices are twice as high as in Sweden.

There are good prospects that China will become the largest market in the world for Opcon Powerbox. Surveys show that there are over 500,000 industrial boilers in China. As China is at a very early stage regarding utilising waste heat it is considered that recovery of waste heat can make a significant contribution to



improved energy efficiency and reduction of emissions which will have economic and environmental benefits in coming years.

Higher electricity prices in China, growth and investment in the economy, the political will to increase energy efficiency and significantly lower production costs make Opcon greatly optimis-tic about the strategic collaboration that has started. According to a study made by Fujian Snowman Co., Ltd., annual sales for the joint venture are expected to reach above CNY 220 million within 2-3 years. Against this background, Opcon is now dedicat-ing significant resources to build up the company and transferring technology to China while there are considerable expectations for the joint venture.

Another important part of the current restructuring of Opcon is the extensive changes being made within the bioenergy opera-tion that in recent years has suffered significant losses. In Sweden the entire market has been difficult, which has meant that some competitors have closed down their business.

In recent years Opcon has implemented strong measures, in-cluding cutting the workforce, closing development projects and achieving a new, outsourced production structure. Some of the technology has been licensed with good results.

For some time now a large programme of measures has been implemented in Sweden and abroad with the main emphasis on the bioenergy sector. As a result, OBE Energi (formerly Opcon Bioenergy AB) and Opti Energy Group AB and subsidiaries are being decommissioned and wound up in Sweden.

Bioenergy activities are being focused on Saxlund and an in-creased international focus. The parent company’s operations in Åmål have now been closed down completely. The savings pro-gramme, which includes reduced personnel costs, reduced cost of external consultants, IT and administration and reduced financ-ing costs, is expected after enlargement to yield annual savings in excess of SEK 30 million compared to 2013, with effects in 2014 that exceeded SEK 20 million. Despite a big cut in overhead costs and staff costs these measures have not achieved quite all that was expected in 2014.

The Board notes that although challenges remain in several

places within the Group and to establish progress in the bioenergy sector, significant steps have already been taken to reduce costs, and these efforts have begun to show in financial results. Opcon is now reporting a profit following successful business in China.

With an expanding order book, increased licensing business, the existing savings programme in bioenergy and joint venture for Opcon Powerbox in China, the company’s focus is now moving more to future activities, investment and the building of resources in order to best utilise the opportunities that the sales and produc-tion structure being built in China may mean for future growth and profitability. The Board expects sales to increase and operating earnings to remain positive for the full year 2015.

Forward-looking information This report contains forward-looking information and statements about the future outlook of Opcon’s business. This information is based on the management team’s current expectations, estimates and forecasts. Actual future outcomes may vary significantly com-pared with information included in this report that looks to the future due to changed conditions in the economy, market and competition environment.

Results and financial positionThe results and financial position of the Group and the parent company are presented in the following income statements, bal-ance sheets, cash flow statements and notes to the accounts.

Proposed allocation of profitParent company (SEK)

Amount brought forward1 28,626,775

Profit for the year 32,278,422

Total 60,905,197

1) Including share premium.

The Board and CEO proposes that the profit be transferred into a new account.

CONSOLIDATED PROFIT / LOSS STATEMENTS (SEK '000) Note 2014 2013

1Net sales 2 266,156 275,026Cost of goods / services sold 8 –191,656 –217,535Gross profit 74,500 57,491

Selling expenses –30,520 –30,385Administrative costs –40,857 –63,399R&D costs –13,015 –14,501Profit / loss from associated companies 21 –422 –Other operating income 21 28,854 –Other operating expenses 9 –257 –1,273Operating profit / loss 3, 4, 5, 6, 7, 8 18,283 –52,067

Financial income 10 66 850Financial expenses 10 –4,823 –10,590Profit / loss before tax 13,526 –61,807

Tax on profit / loss for year 11 –509 –Profit / loss for remaining business 13,017 –61,807

Earnings from decommissioned business 12 –19,748 –685Earnings from divested business 12 – –1,600

Profit / loss for the year –6,731 –64,092

Earnings per share before dilution (SEK) 13 Earnings from remaining business 0.03 –0.19Earnings from decommissioned business –0.05 0Profit / loss for the year –0.02 –0.19

Earnings per share after dilution (SEK) 13 Earnings from remaining business 0.03 –0.19Earnings from decommissioned business –0.05 –Profit / loss for the year –0.02 –0.19

STATEMENT OF COMPREHENSIVE INCOME (SEK ’000) 2014 2013

Other comprehensive incomeItems not to be returned in income statement – –Items to be returned later in income statement (translation difference, equity) 4,067 1,285Other comprehensive income for the year 4,067 1,285

Total comprehensive income for the year –2,664 –62,807

Total comprehensive income for the year attributable to parent company shareholders –2,664 –62,807


Consolidated profit / loss statements


Consolidated balanCe sheets

CONSOLIDATED BALANCE SHEET (SEK '000) Note 2014 2013

ASSETS 14 Fixed assetsTangible fixed assetsBuildings and land 15 6,166 5,989Plant and machinery 16 3,309 4,608Inventories, tools and installations 17 4,402 2,711Total tangible fixed assets 13,877 13,308

Intangible fixed assetsCapitalised expenditure for R&D 18 132,387 133,783Patents and licenses 19 24,909 22,649Goodwill 20 148,748 144,156Total intangible fixed assetss 306,044 300,588

Financial fixed assetsParticipations in associated companies 21 23,420 –Deferred tax receivable 11 39,392 39,392Other long-term receivables 22 40,778 44,143Total financial fixed assets 103,590 83,535

Total fixed assets 423,511 397,431

Current assetsSecurities 9, 14 255 512Inventories 23 62,727 69,895Total inventories and securities 62,982 70,407

Current receivablesAccounts receivable – trade 24 46,706 45,327Tax receivable 1,552 412Other current receivables 18,489 17,936Prepaid expenses and accrued income 25 14,367 21,356Work in progress, un-invoiced income, contracted 26 37,148 35,346Total current receivables 118,262 120,377

Liquid funds (cash and bank accounts only) 22,967 17,853

Total current assets 204,211 208,637

TOTAL ASSETS 627,722 606,068


Consolidated balanCe sheets

CONSOLIDATED BALANCE SHEET (SEK '000) Note 2014 2013

SHAREHOLDERS’ EQUITYCapital and reserves attributable to parent company shareholdersShare capital 27 473,500 430,518Other contributed capital 355,834 379,216Other reserves –3,701 –7,768Profit brought forward –352,490 –345,759Shareholders' equity 473,143 456,207

Long-term liabilities Other provisions 28 1,551 4,087Deferred tax liability 11 12,080 12,876Interest-bearing liabilities to credit institutions 29 716 543Total long-term liabilities 14,347 17,506

Current liabilities Interest-bearing liabilities, current 29 19,606 3,129Accounts payable – trade 41,395 50,872Other liabilities 29,875 21,724Accrued expenses and prepaid income 30 19,939 24,121Work in progress, un-invoiced income, contracted 26 29,417 32,509Total current liabilities 140,232 132,355

Total liabilities 154,579 149,861

TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES 627,722 606,068

Pledged securities 31 19,707 17,951Contingent liabilities 33 36,072 52,810


Changes in Consolidated shareholders’ eQuity

CHANGES IN CONSOLIDATED SHAREHOLDERS' EQUITY Share Other Other Accumulated Total(SEK '000) capital contributed reserves1 profit / loss equity capital

Shareholders’ equity, 1 January 2013 372,357 403,381 –9,053 –281,667 485,018

Total comprehensive incomeProfit / loss for the year – – – –64,092 –64,092 Other comprehensive incomeExchange rate difference when translating foreign activities – – 1,285 – 1,285 Total comprehensive income 0 0 1,285 –64,092 –62,807

Transactions with shareholdersNew share issue 58,161 –24,165 – – 33,996Shareholders’ equity, 31 December 2013 430,518 379,216 –7,768 –345,759 456,207

Total comprehensive incomeProfit / loss for the year – – – –6,731 –6,731Other comprehensive incomeExchange rate difference when translating foreign activities – – 4,067 – 4,067Total comprehensive income 0 0 4,067 –6,731 –2,664

Transactions with shareholdersNew share issue 42,982 –23,382 – – 19,600

Shareholders’ equity, 31 December 2014 473,500 355,834 –3,701 –352,490 473,143

1) Other reserves comprise translation differences only.

CONSOLIDATED CASH FLOW STATEMENTS (SEK '000) Note 2014 2013

1 Operating activitiesProfit / loss before financial items 12 –930 –54,326Received interest 66 1,180Paid interest –5,358 –10,946Paid income tax –7,1131 –1,556Depreciation and impairment 3, 9 11,582 11,817Other items not affecting liquidity –22,800 1,323Total cash flow from operating activities before change in working capital –24,553 –52,508

Cash flow from change in working capitalChange in inventories 7,168 48,400Change in current receivables 6,460 31,693Change in current liabilities –9,445 –95,395Total cash flow from operating activities after change in working capital –20,370 –67,810

Cash flow from investing activitiesAcquisition of tangible fixed assets 15, 16, 17 –3,759 –424Acquisition of intangible fixed assets 18, 19 –4,704 –12,085Sales and scrapping of fixed assets – 984Increase / decrease of financial fixed assets 3,365 –Divested subsidiaries 21 –4,844 –Sale of financial receivables – 58,709Total cash flow from investing activities –9,942 47,184

Cash flow from financing activitiesNew share issue 27 17,100 33,996Change in current financial liabilities 16,440 –12,600Total cash flow from financing activities 33,540 21,396

TOTAL CASH FLOW 3,228 770

Liquid assets, opening balance 17,853 17,113Total cash flow 3,228 770Exchange rate differences in liquid funds 1,886 –30Liquid assets, closing balance 22,967 17,853

Specification of other non-liquidity effecting itemsProfit from sale of licensing rights –56,554 –Internal profit elimination 37,501 –Share of profit from associated companies 422 –Change in value of shareholding in Enerji 257 1,091Change in allocations –2,536 307Other items –1,890 –75Total other items not affecting liquidity –22,800 1,323

1) Relates primarily to withholding tax paid in China.


Consolidated Cash flow statements


notes to the aCCounts, the group

1 GENERAL INFORMATION AND KEy ACCOUNTING PRINCIPLES

1. General informationThe Group has one business area: Renewable Energy, which comprises the fol-lowing subsidiaries: Svenska Rotor Maskiner AB (SRM), Opcon Energy Systems AB (OES), Saxlund International Holding AB, Svenska Rökgasenergi AB (SRE), Saxlund Bioenergy AB (SAX), Saxlund International GmbH, Saxlund International Ltd., Op-con GmbH, Boxpower AB and Boxpower International AB.

The Group focuses on the following areas: compressor technology, electricity generation based on waste heat, bioenergy-powered heat and power plants, pel-lets plants, handling systems for biomass, sludge and natural gas, industrial cool-ing, flue gas condensation, treatment of flue gases and air systems for fuel cells.

Other companies include the dormant Opcon Inc. and Saxlund Corporation. In addition Opcon AB is a part-owner of the joint venture Fujian Opcon Energy Technology Co., Ltd (49%).

The activities of the parent company, Opcon AB, comprise administration, Group services and assignments for customers. The company has its registered office in Stockholm and was first listed on the small cap list of the Nasdaq OMX Stockholm stock exchange on 31 December 1998.

The parent company’s postal address is Opcon AB, Box 15085, 104 65 Stock-holm, Sweden.

The parent company’s visiting address is Opcon AB, Värmdövägen 120 (Ro-torslingan), 131 60 Nacka, Sweden.

The consolidated accounts were approved for publication by the Board on 15 April 2014.

2. Summary of key accounting principlesThe key accounting principles applied when these consolidated accounts were approved are explained below. These principles have been applied consistently for all years presented, unless otherwise stated.

2.1 Basis for producing accountsThe consolidated accounts are produced in accordance with the Swedish an-nual accounts act, RFR 1 Complementary accounting rules for groups, and International Financial Reporting Standards, IFRS, and IFRIC interpretations as adopted by the EU. The consolidated accounts are produced using the acquisi-tion method, except for financial assets that may be sold as financial assets and liabilities (including derivative instruments), which are reported at fair value via the income statement.

Producing reports in accordance with IFRS requires making key accounting esti-mates. Furthermore, the company’s management team must make certain judge-ments when applying the company’s accounting principles.

New and changed standards applied by the GroupListed below are the standards applied by the Group for the first time for fiscal years starting 1 January 2014 and which have a significant effect on the Group’s financial statements.IFRS 10 “Consolidated Financial Statements” builds on existing principles as it identifies control as the determining factor in determining whether a company be included in the consolidated financial statements. The standard provides ad-ditional guidance to assist in the determination of control where this is difficult to assess. The Group applies IFRS 10 for the financial year beginning 1 January 2014.

IFRS 11 “Joint Arrangements” focuses on the rights and obligations of the par-ties in a joint arrangement, rather than on the legal form of the arrangement. There are two types of joint arrangements, joint operations and joint ventures. Joint operations arise when a party to a joint activity has rights to the assets and commitments to the liabilities of the joint arrangement. In such an arrangement assets, liabilities, income and expenses are reported based on the holder’s share of them. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. Joint ventures are accounted for using the equity method, and the proportional method is no longer allowed.

IFRS 12 “Disclosure of interests in other companies” includes the disclosure requirements for subsidiaries, joint arrangements, associates and unconsolidated structured companies. The Group applies IFRS 10 for the financial year beginning 1 January 2014.

Other standards, amendments and interpretations that come into effect for the

fiscal year beginning 1 January 1 2014 have no material impact on the consoli-dated financial statements.

New standards, amendments and interpretations of existing standards not adopted by the Group in advanceA number of new standards and amendments of interpretations of existing stand-ards came into effect for the financial year starting 1 January 2014 and have not been applied in the production of the Group’s financial reports, None of these are expected to have any significant impact on the Group’s financial reports with the exception of the following:

IFRS 9 “Financial instruments” addresses classification, valuation and reporting of financial liabilities and assets. The full version of IFRS 9 was published in July 2014. It replaces the parts of IAS 39 that addressed classification and valuation of financial instruments. IFRS 9 retains a mixed valuation approach but simplifies this approach in certain respects. There will be three categories of valuation for financial assets: amortized cost, fair value through Other comprehensive income and fair value through the income statement. How an instrument be classified depends on the company’s business model and instrument characteristics. In-vestments in equity instruments are recorded at fair value through the income statement but there is also a possibility upon initial recognition to report the in-strument at fair value through other comprehensive income. No reclassification to the income statement will take place at the disposal of the instrument. IFRS 9 also introduces a new model for calculating the loan loss reserve based on expected credit losses. For financial liabilities the classification and valuation do not change except in the case when a liability is recognized at fair value through the income statement based on the fair value option. Changes in value attribut-able to changes in credit risk should then be recognized in other comprehensive income. IFRS 9 reduces the requirements for the application of hedge accounting by 80-125 criterion replaced with the requirement for financial relationship be-tween hedging instruments and hedged objects and that the hedge ratio must be the same one used in risk management. There are also minor changes in hedge documentation compared with IAS 39. The standard is effective for fiscal years beginning 1 January 2018. Earlier application is permitted. The Group has not yet evaluated the effects of introduction of the standard. The Group intends to apply the new standard when it comes into force and has not yet evaluated the impact. The Group will evaluate the effects of the remaining phases of IFRS 9 when con-cluded by the IASB.

IFRS 15 ”Revenue from contracts with customers” regulates reporting of revenues. The principles IFRS 15 builds on will provide users of financial reports more useful information about the company’s revenue. The extended disclosure requirements mean that information about the type of revenue, the date of set-tlement, uncertainties related to revenue recognition and cash flow attributable to the company’s customer contracts shall be provided. In accordance with IFRS 15 revenue is recognized when the customer obtains control of the sold goods or services and is able to use and receive the benefits of the product or service.

IFRS 15 supersedes IAS 18 “Revenue” and IAS 11 “Construction Contracts” and related SIC and IFRIC. IFRS 15 shall enter into force on 1 January 2017. Early application is permitted. The Group has not yet assessed the impact of the intro-duction of the standard.

None of the other IFRS or IFRIC interpretations not yet in force are expected to impact significantly on the Group.

2.2 Consolidation(a) SubsidiariesSubsidiaries are all entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies generally ac-companying a shareholding of more than one half of the voting rights. The exist-ence and effect of potential voting rights that are currently exercisable or convert-ible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

The Group uses the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition-



by-acquisition basis, the Group recognises any non-controlling interest in the ac-quiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets.

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the differ-ence is recognised directly in the statement of comprehensive income (note 2.6).

Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

(b) Transactions and non-controlling interestsThe Group treats transactions with non-controlling interests as transactions with equity owners of the Group. For purchases from non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.

When the Group ceases to have control or significant influence, any retained interest in the entity is remeasured to its fair value, with the change in carrying amount recognised in profit or loss.

The fair value is the initial carrying amount for the purposes of subsequently ac-counting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income are reclassified to profit or loss where appropriate.

2.3 Segment reporting Operating segments are reported in a manner consistent with the internal report-ing provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the steering committee that makes strategic decisions.

2.4 Foreign currency translation (a) Functional and presentation currency Items included in the financial statements of each of the Group’s entities are meas-ured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in Swedish kronor (SEK), which is the Group’s presentation currency.

(b) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of mon-etary assets and liabilities denominated in foreign currencies are recognised in the income statement.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the income statement within ‘finance income or cost’. All other foreign exchange gains and losses are presented in the income statement within ‘Cost of goods/services sold’.

Changes in the fair value of monetary securities denominated in foreign cur-rency classified as available for sale are analysed between translation differences resulting from changes in the amortised cost of the security and other changes in the carrying amount of the security. Translation differences related to changes in amortised cost are recognised in profit or loss, and other changes in carrying amount are recognised in other comprehensive income.

Translation differences on non-monetary financial assets and liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss. Translation differences on non-monetary finan-cial assets, such as equities classified as available for sale, are included in other comprehensive income.

(c) Group companies Group companies are all those companies (including structured companies) over which the Group has a controlling influence. The Group controls a company when it is exposed to, or has the right to receive, variable returns from the holding in the company and has the possibility to influence the return through its influence on the company. Subsidiaries are included in the consolidated accounts from the day when controlling influence is transferred to the Group. They are excluded from the date when the controlling influence ends.

The results and financial position of all the Group entities (none of which has the currency of a hyper-inflationary economy) that have a functional currency different from the presentation currency are translated into the presentation cur-rency as follows:

(a) assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

(b) income and expenses for each income statement are translated at aver-age exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and

(c) all resulting exchange differences are recognised in other comprehensive income.

On consolidation, exchange differences arising from the translation of the net investment in foreign operations, and of borrowings and other currency instru-ments designated as hedges of such investments, are taken to other comprehen-sive income. When a foreign operation is partially disposed of or sold, exchange differences that were recorded in equity are recognised in the income statement as part of the gain or loss on sale.

Goodwill and fair value adjustments arising on the acquisition of a foreign en-tity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

(d) Collaborative arrangementsThe Group applies IFRS 11 “Collaborative arrangements” from January 2014. Un-der IFRS, an interest in a joint arrangements is classified as either as a shared busi-ness or a joint venture (JV), depending on the contractual rights and obligations of each investor.

The joint venture is included in the consolidated financial statements using the equity method where Opcon’s share of the company’s profit after tax in local cur-rency, converted using year-end rate, is reported on a separate line in the income statement. In the consolidated balance the same share of profit is recognised in local currency at the closing rate, and is recognized as part of “Investments in associates”.

In the consolidated balance sheet, “Investments in associates” comprises the parent company’s direct investment in the company, at acquisition cost, elimina-tion of intercompany profits and accumulated share of the company’s results. Elimination of intercompany profit occurs when Opcon sell goods or services to the Company which results in a margin in Opcon’s books. When this occurs, an amount shall be eliminated amounting to Opcon’s proportion of the margin from the transaction. Depending on how the goods and / or service is posted in the joint venture, for example as an investment with defined depreciation period, the corresponding resolution shall be made through the elimination registered in Opcon’s accounts. Such a resolution affects Opcon’s share of the company’s earnings positively.

2.5 Tangible fixed assets Land and buildings comprise mainly factories, retail outlets and offices. Land and buildings are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic ben-efits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their cost or revalued amounts to their residual values over their estimated useful lives, as follows:



Buildings 25-40 yearsMachinery 10-15 yearsVehicles 3-5 yearsFurniture, fittings and equipment 3-10 years

The assets’ residual values and useful lives are reviewed, and adjusted if ap-propriate, at the end of each reporting period.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount (note 2.7).

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within ‘Other (losses)/gains – net’ in the income statement.

2.6 Intangible assets (a) GoodwillGoodwill represents the excess of the cost of an acquisition, including any minor-ity interest and fair value on the closing date of previous holdings, over the fair value of the Group’s share of the net identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill on acquisitions of subsidiaries is included in ‘intangible assets’. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not re-versed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose, identified according to operating segment.

(b) Patents and licences Separately acquired patents and licences are reported at acquisition value. Patents and licences acquired in a business combination are recognised at fair value at the acquisition date. Patents and licences have a finite useful life and are carried at cost less accumulated amortisation. Amortisation is calculated using the straight-line method to allocate the cost of patents and licences over their estimated useful lives of 10 to 20 years.

(c) Contractual customer relationships Contractual customer relationships acquired in a business combination are rec-ognised at fair value at the acquisition date. The contractual customer relations have a finite useful life and are carried at cost less accumulated amortisation. Amortisation is calculated using the straight-line method over the expected life of the customer relationship.

(d) Research and developmentCosts associated with research are recognised as an expense as incurred. Develop-ment costs (attributable to the design and testing of new and improved products) are recognised as intangible assets when the following criteria are met: – it is technically feasible to complete the asset so that it will be available for use; – management intends to complete the asset and use or sell it; – there is an ability to use or sell the asset; – it can be demonstrated how asset will generate probable future economic ben-

efits; – adequate technical, financial and other resources to complete the development

and to use or sell the software product are available; and – the expenditure attributable to the software product during its development

can be reliably measured. Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs recognised as assets are amortised over their estimated useful lives, which does not exceed 15 years. Development costs are tested annually for impairment in accordance with IAS 36.

2.7 Impairment of non-financial assets Assets that have an indefinite useful life – for example, goodwill or intangible assets not ready to use – are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impair-ment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount

by which the asset’s carrying amount exceeds its recoverable amount. The recov-erable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the low-est levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.

2.8 Non-current assets (or disposal groups) held for sale Non-current assets (or disposal groups) are classified as assets held for sale when their carrying amount is to be recovered principally through a sale transaction and a sale is considered highly probable. They are stated at the lower of carrying amount and fair value less costs to sell if their carrying amount is to be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable.

2.9 Financial assets 2.9.1 Classification The Group classifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables, and available for sale. The classifica-tion depends on the purpose for which the financial assets were acquired. Man-agement determines the classification of its financial assets at initial recognition.

(a) Financial assets assessed at fair value through profit or loss There are two sub-categories here: financial assets held for trading and financial assets identified at fair value.

A financial asset is classified in the ‘held for trading’ category if acquired princi-pally for the purpose of selling in the short term. Derivatives are also categorised as held for trading unless they are designated as hedges.

Financial assets identified at fair value include holdings that are managed and monitored by managers on the basis of fair value. The Group’s holding in Enerji Ltd is included in this sub-category.

Financial assets assessed at fair value via the income statement are classified as current assets if expected to be settled within 12 months; otherwise, they are classified as non-current.

(b) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determina-ble payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets. The Group’s loans and receiva-bles comprise ‘trade and other receivables’ and ‘cash and cash equivalents’ in the balance sheet (notes 2.14 and 2.15).

(c) Available-for-sale financial assets Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless the investment matures or management intends to dispose of it within 12 months of the end of the reporting period.

2.9.2 Recognition and measurement Regular purchases and sales of financial assets are recognised on the trade-date – the date on which the Group commits to purchase or sell the asset. Invest-ments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are expensed in the income statement. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership. Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are subsequently carried at amortised cost using the effective interest method.

Gains or losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are presented in the income state-ment within ‘other (losses)/gains – net’ in the period in which they arise. Dividend income from financial assets at fair value through profit or loss is recognised in the income statement as part of other income when the Group’s right to receive payments is established.

Changes in the fair value of monetary and non-monetary securities classified as available for sale are recognised in other comprehensive income.



When securities classified as available for sale are sold or impaired, the ac-cumulated fair value adjustments recognised in equity are included in the income statement as ‘gains and losses from investment securities’.

Interest on available-for-sale securities calculated using the effective interest method is recognised in the income statement as part of other income. Dividends on available-for sale equity instruments are recognised in the income statement as part of other income when the Group’s right to receive payments is established.

2.10 Offsetting financial instruments Financial assets and liabilities are offset and the net amount reported in the bal-ance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

2.11 Impairment of financial assets (a) Assets carried at amortised cost The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

The criteria that the Group uses to determine that there is objective evidence of an impairment loss include: – significant financial difficulty of the issuer or obligor; – a breach of contract, such as a default or delinquency in interest or principal payments; – the Group, for economic or legal reasons relating to the borrower’s financial difficulty, granting to the borrower a concession that the lender would not oth-erwise consider; – it becomes probable that the borrower will enter bankruptcy or other financial reorganisation; – the disappearance of an active market for that financial asset because of finan-cial difficulties;

The Group first assesses whether objective evidence of impairment exists. For loans and receivables category, the amount of the loss is measured as

the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in the consolidated income statement. If a loan or held-to- maturity investment has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. As a practical expedient, the Group may measure impairment on the basis of an instrument’s fair value using an observable market price.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor’s credit rating), the reversal of the previously recognised impairment loss is recognised in the consolidated income statement.

(b) Assets classified as financial assets available for sale The Group assesses at the end of each reporting period whether there is objec-tive evidence that a financial asset or a group of financial assets is impaired. For debt securities, the Group uses the criteria refer to (a) above. In the case of equity investments classified as available for sale, a significant or prolonged decline in the fair value of the security below its cost is also evidence that the assets are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss – is removed from equity and recognised in the sepa-rate consolidated income statement. Impairment losses recognised in the separate consolidated income statement on equity instruments are not reversed through the separate consolidated income statement. If, in a subsequent period, the fair value of a debt instrument classified as available for sale increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed through the separate consolidated income statement.

2.12 Derivative financial instruments and hedging activitiesDerivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Hedge ac-counting is not used.

2.13 Inventories Inventories are stated at the lower of cost and net realisable value. Cost is deter-mined using the first-in, first-out (FIFO) method. The cost of finished goods and work in progress comprises design costs, raw materials, direct labour, other direct costs and related production overheads (based on normal operating capacity). It excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.

2.14 Accounts receivable Accounts receivable are amounts due from customers for merchandise sold or services performed in the ordinary course of business. If collection is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets.

Accounts receivable are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

2.15 Cash and cash equivalentsIn the consolidated statement of cash flows, cash and cash equivalents includes cash in hand and deposits held at call with banks. Other short-term highly liquid investments with original maturities of three months or less are reported separately in the balance sheet.

2.16 Share capitalOrdinary shares are classified as equity. Mandatorily redeemable preference shares are classified as liabilities

Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Where any group company purchases the company’s equity share capital (treasury shares), the consideration paid, including any directly attributable in-cremental costs (net of income taxes) is deducted from equity attributable to the company’s equity holders until the shares are cancelled or reissued. Where such ordinary shares are subsequently sold, any consideration received is reported (net of any directly attributable incremental transaction costs and the related income tax effects) in profit brought forward.

2.17 Trade payables Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

2.18 Borrowings Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method.

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

Bank overdraft credit is recognized as borrowing among Current liabilities in the balance sheet.

2.19 Compound financial instrumentsCompound financial instruments issued by the Group comprise convertible notes that can be converted to share capital at the option of the holder, and the number of shares to be issued does not vary with changes in their fair value. The liability



component of a compound financial instrument is recognised initially at the fair value of a similar liability that does not have an equity conversion option. The equity component is recognised initially at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts.

Subsequent to initial recognition, the liability component of a compound finan-cial instrument is measured at amortised cost using the effective interest method. The equity component of a compound financial instrument is not re-measured sub-sequent to initial recognition except on conversion or expiry.

Borrowings are classified as current liabilities unless the Group has an uncondi-tional right to defer settlement of the liability for at least 12 months after the end of the reporting period. On the closing date there were no compound financial instruments.

2.20 Current and deferred income tax The tax expense for the period comprises current and deferred tax. Tax is rec-ognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

The current income tax charge is calculated on the basis of the tax laws en-acted or substantively enacted at the balance sheet date in the countries where the company and its subsidiaries operate and generate taxable income. Manage-ment periodically evaluates positions taken in tax returns with respect to situa-tions in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is recognised, using the liability method, on temporary dif-ferences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.

Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. This is tested annually.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except for deferred income tax liability where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred income tax assets and liabilities are offset when there is a legally en-forceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable enti-ties where there is an intention to settle the balances on a net basis.

2.21 Employee benefits (a) Pension obligations The Group has defined-contribution plans only. The Group pays contributions to publicly or privately administered pension insurance plans on a mandatory, con-tractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.

(b) Termination benefits Termination benefits are payable when employment is terminated by the Group before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when it is demonstrably committed to a termination when the entity has a detailed formal plan to terminate the employment of current employees without possibility of withdrawal. In the case of an offer made to encourage voluntary

redundancy, the termination benefits are measured based on the number of em-ployees expected to accept the offer. Benefits falling due more than 12 months after the end of the reporting period are discounted to their present value.

2.22 Share-based payments At the latest AGM in 2014 the Group decided on new options schemes for senior executives and Board members. The scheme includes 4,250,000 share options. No options have yet been transferred.

Since all the schemes are to be based on market terms in accordance with the Black and Scholes model, there is no benefit for the employee and therefore no associated cost for the company.

2.23 Provisions Provisions for environmental restoration, restructuring costs and legal claims are rec-ognised when: the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Restructuring provisions comprise lease termination penalties and employee termination payments. Provi-sions are not recognised for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense.

2.24 Revenue recognition The Group is primarily active within energy and environmental technology, with sales in projects that have varied content of proprietary development, design, prod-ucts and installations that are often agreed via separate deliveries. The Group also manufactures and sells components.

A method of successive profit settlement is used in within the project business. Within the component production business revenue is recognised when the risks and benefits associated with the component have been transferred to the customer as agreed.

Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the Group’s activities. Revenue is shown net of value-added tax, returns, rebates and discounts and after eliminating sales within the Group.

The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and when specific criteria have been met for each of the Group’s activities as described below. Revenue amounts cannot be measured reliably until all obligations relat-ing to the sale have been met or cancelled. The Group bases its assessments on historical outcomes and considers type of customer, type of transaction and special circumstances in each case.

If circumstances arise that may change the original estimates of revenues, costs or extent of progress toward completion, estimates are revised. These revisions may result in increases or decreases in estimated revenues or costs and are reflected in income in the period in which the circumstances that give rise to the revision be-come known by management.

The Group uses the percentage of completion method for reporting fixed-price agreements, which means that the Group must make estimates of how much of the total service has been completed on the closing date. There is a risk that the final result may deviate from the estimated result.

2.25 Leases Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the period of the lease.

The Group leases certain property, plant and equipment. Leases of property, plant and equipment where the Group has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s commencement at the lower of the fair value of the leased property and the present value of the minimum lease payments.

Each lease payment is allocated between amortization of the liability and finance



charges. The corresponding rental obligations, net of finance charges, are included in ‘Long-term borrowings and current borrowings’. The interest element of the fi-nance cost is charged to the income statement over the lease period so as to pro-duce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases is depreciated over the shorter of the useful life of the asset and the lease term.

2.26 Dividend distribution Dividend distribution to the company’s shareholders is recognised as a liability in the Group’s financial statements in the period in which the dividends are ap-proved by the company’s shareholders.

2.27 Assets (business disposal) held for saleAssets (business disposal) are classified as assets held for sale when their reported value will primarily be recovered through a sales transaction and a sale is consid-ered highly probable. They are recognised as the lower of the recognised value and fair value less sales costs, if their recognised value can primarily be recovered through a sales transaction and not through regular use.

3. Financial risk management The Group’s activities expose it to a variety of financial risks, including the effects of changes of prices on borrowing and capital markets, currency risks and interest risks. The Group’s overall risk management programme focuses on the unpredict-ability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance.

Risk management is carried out by a central treasury department (Group treas-ury) under policies approved by the board of directors. Group treasury identifies, evaluates and hedges financial risks in close co-operation with the Group’s operat-ing units. The Board provides written principles for overall risk management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments, and investment of excess liquidity.

3.1 Financial risk factors(a) Foreign exchange risk Foreign exchange risk is the risk that the value of Swedish krona (SEK) deteriorates in relation to other currencies. Weaker SEK means, for example, that interest pay-ments, amortisation of loans and other payments in foreign currency will be more expensive.

The CEO of each company has responsibility to ensure that where possible cur-rency clauses are included in customer and supplier contracts in order to minimize exchange rate risks for ongoing transactions.

Regarding exchange rate risks for invested capital abroad and long-term loans and receivables in foreign currency, the Group’s policy is not to hedge exchange rate risk.

The Group operates internationally and is exposed to foreign exchange risk aris-ing from various currency exposures, primarily with respect to EUR, USD, GBP and CNY.

Of the Group’s net sales, around 1.7% (0.3) is invoiced in USD, corresponding to SEK 4.4 million (1.0m), 34.7% (48.4) in EUR, corresponding to SEK 92.4 million (135.0 m), 15.6% (16.7) in GBP, corresponding to SEK 41.5 million (46.7 m), and 21.0% (10.5) in CNY, corresponding to SEK 56.0 million (29.2 m).

The Group’s purchases in foreign currency amounted to around SEK 130.1 mil-lion (199.0 m), of which USD constituted SEK 0.4 million (0 m), EUR 93.2 million (154.3 m), GBP 36.4 million (44.3 m) and other currencies SEK 0.1 million (0.4 m).

If USD had fallen/risen by 10% in relation to SEK, and all other variables had been constant, the result for the year would have risen/fallen by around SEK 0.4 million.

If EUR had fallen/risen by 10% in relation to SEK, and all other variables had been constant, the result for the year would have risen/fallen by around SEK 0.1 million.

If GBP had fallen/risen by 10% in relation to SEK, and all other variables had been constant, the result for the year would have risen/fallen by around SEK 0.5 million.

If CNY had fallen/risen by 10% in relation to SEK, and all other variables had been constant, the result for the year would have risen/fallen by around SEK 2.9 million.

(b) Interest risksThe Group’s income and cash flow from activities are to all extents not depend-ent on changes in market interest rate levels. The Group’s interest-bearing assets mostly have fixed interest. The Group’s interest risk arises through long-term bor-

rowings. Loans with variable interest expose the Group to interest risks in cash flow. Loans with fixed interest expose the Group to interest risk concerning fair value.

By systematically following interest developments and adapting the loan portfo-lio, interest risk can be limited.

Dividing loans across short and long maturities with both fixed and variable inter-est is one example of how interest risk can be restricted.

As of 31 December 2014 the Group’s borrowings had been reduced to a very low level.

(c) Credit risksThe Group has established guidelines for ensuring that products and services are sold to customers with a suitable credit background. All new customers are given credit assessments and credit information is received.

If existing customers repeatedly transgress agreed credit periods, a new credit assessment will be made and new information will be sought.

Depending on the results of the assessment/information a decision is made as to whether the customer will receive credit (new or continued) or receive delivery against cash payment. Advance payments on orders apply for production of non-standard products for customers without credit. Assessments of a customer’s cred-itworthiness are made by the CEO/market manager in each company.

See also information in note 24, accounts receivable, and note 29, borrowings.

(d) Liquidity risksThe company made a profit for the 2014 fiscal year, but as the financial statements for previous years show, the Group has previously reported losses. There are no guarantees that the company in future will report a profit. Liquidity risks are man-aged prudently, which means maintaining sufficient liquid funds and marketable securities, available financing through sufficient credit possibilities and the pos-sibility to close market positions. Due to the dynamic nature of the underlying business, Group Finance aims to maintain flexibility in financing by keeping com-mitted credit lines available.

The Board considers that the liquidity level is unsatisfactory to secure uninter-rupted and problem-free operation and therefore continues its efforts to find a more lasting financing of the Group’s business whilst reviewing the long-term fi-nancing structure of the company.

The Group’s financing staff shall ensure that the Group is able to make payments through banking agreements in the form of ongoing cheque credits and/or other current credit facilities.

Managers closely follow regular forecasts for the Group’s liquidity reserve, which comprises unutilised borrowing commitments (note 29) and liquid funds, on the basis of expected cash flow.

Financial risks (SEK '000)Financial liabilities Less than Between More than As of 31 December 2014 1 year 1 and 2 years 2 years

Borrowings (excluding liabilities for financial leasing) 19,606 716 –Accounts payable and other liabilities 71,270 – –

Financial liabilities Less than Between More than As of 31 December 2013 1 year 1 and 2 years 2 yearsBorrowings (excluding liabilities for financial leasing) 3,279 543 – Accounts payable and other liabilities 72,596 – –

(e) Price riskThe Group is exposed to price risks concerning materials and components, espe-cially iron, steel, copper and certain electronic components.

The prices of these materials and components follow global trends. In many cases the Group’s subsidiaries cover price risks via clauses in sales contracts.

Since the Company manufactures and markets a range of products for energy efficiency, the market prices for electricity and energy are of great importance where lower prices are expected to have a negative impact on sales and higher prices a positive impact.

Handling of capital riskThe Group’s goal concerning its capital structure is to secure the Group’s ability to continue doing business so that it can continue to pay dividends to sharehold-



ers and provide benefits for other interested parties and to maintain an optimum capital structure in order to keep costs relating to capital low.

To maintain or adjust the capital structure the Group can change the dividend paid to shareholders, repay capital to shareholders, issue new shares or sell assets to reduce liabilities.

In the same way as other companies in the same industry, the Group assesses capital on the basis of debt/equity ratio. This key indicator is calculated as net debt divided by total capital. Net debt is calculated as total loans (comprising the items current borrowings and long-term borrowings on the consolidated balance sheet) with deductions for liquid funds. Total capital is calculated as shareholders’ equity on the consolidated balance sheet plus the net debt.

Capital risk (SEK '000)As of 31 December 2014 2013

Total borrowings 20,322 3,672Minus: liquid funds –22,967 –17,853Minus: long-term receivables –20,060 –20,413Net debt –22,705 –34,594Total shareholders’ equity 473,143 456,207Total capital 450,438 421,613

Debt/equity ratio na na

3.2 Reporting of derivative instruments and hedgesOn the closing date the Group had not signed any derivative instruments.

3.3 Calculation of fair valueReported value, minus any assessed credits, for accounts receivable and accounts payable, are expected to match their fair value. The fair value of financial liabilities is calculated, for reporting in the notes, by discounting future contracted cash flow at the current market interest rate that is available for the Group for similar financial instruments.

The following table presents the Group’s assets and liabilities assessed atfair value as of 31 December 2014:

(SEK '000) Level 1 Level 2 Level 3 TotalAssetsSecurities 255 – – 255LiabilitiesDerivative instruments held for trading – – – –

The following table presents the Group’s assets and liabilities assessed atfair value as of 31 December 2013:

(SEK '000) Level 1 Level 2 Level 3 TotalAssetsSecurities 512 – – 512 LiabilitiesDerivative instruments held for trading – – – –

Levels are defined as follows.Level 1:Listed prices on active markets for identical assets or liabilities.Level 2:Other observable data for assets or liabilities than those listed prices included in level 1. Data is either direct price listings or data associated with price listings.Level 3:One or more inward data based on market information not openly observable.

4. Critical estimates and assessments Estimates and assessments are checked continually and are based on historic ex-perience and other factors, including expectations for future events considered to be reasonable under current conditions.

4.1 Important estimates and assumptions for accounting purposesThe Group makes estimates for, and assumptions about, the future. Estimates for accounting purposes, by definition, rarely match actual outcomes. The estimates and assumptions that entail a significant risk for major adjustments in reported value for assets and liabilities in the coming financial year are presented below.

(a) Testing of impairment requirement for goodwillThe Group tests each year to see if there is an impairment requirement for good-will, in accordance with the accounting principles described in point 2.6. The recovery value of cash-generating units has been established by calculating the utilisation value. Certain estimates must be made for these calculations (note 20).

(b) Income taxesThe Group is obliged to pay tax in different countries. Considerable assessment is required to establish worldwide provisions for income taxes. There are many transactions and calculations for which the final tax is uncertain at the time of making the transaction or calculation. At present there are no uncertainty factors that have a significant effect.

(c) Deferred tax receivables The company considers that the established business plans for the coming years supports the deferred tax receivable entered in the balance sheet. See note 11 and note 20 for basic assumptions used in the business plans.

(d) Evaluation of capitalised development costsEach year the Group examines whether there is an impairment requirement for capitalised development costs in accordance with the reporting principle described in point 2.6. All development projects of significant size undergo a separate impair-ment test. Certain estimates must be used for these calculations (note 18).

2 SEGMENTS (SEK '000)The basis for identifying a reportable segment is the internal reporting as reported to and monitored by the highest-placed executives. As the highest-placed executives the Group has identified the steering group that takes strategic decisions. The steering group now monitors results for remaining business as a segment. Country Sales Assets Investments 2014 2013 2014 2013 2014 2013

Sweden 34,443 50,775 518,158 489,804 12,669 11,991Europe excluding Sweden 142,774 189,061 86,074 116,206 638 518China 55,952 29,237 23,420 – 23,420 –USA 4,723 1,367 70 58 – –Other countries 28,264 8,403 – – – –Total 266,156 278,843 627,722 606,068 36,727 12,509– of which, project sales 202,022 207,839– of which, goods 26,257 57,587– of which royalties/licences, rents 37,877 13,417

Sales figures are based on the country where the customer is based. Assets and investments are reported based on location. One customer, Fujian Snowman Co., Ltd, and the joint venture, Fujian Opcon Energy Technology Co., Ltd. account jointly for 21% (10.5) of the Group’s sales.



Average no. of employees 2014 2014 2013 2013 Women Men Women Men

Sweden 7 84 8 87Germany 7 34 9 33The UK 4 9 4 10

Salaries and remuneration 2014 2014 2013 2013divided by country Board Other Board Other(SEK '000) and CEO1 employees and CEO1 employees

Sweden 7,548 47,367 6,548 49,524Germany 1,777 16,823 3,187 14,819The UK 1,184 6,587 932 6,039

1) Refers to Board members, CEO and deputy CEO of parent company and CEOs of subsidiaries.

Remuneration to senior executivesPrinciplesRemuneration to the Chairman of the Board and to Board members is determined by a vote at the Annual General Meeting. Remuneration to the CEO and other sen-ior executives comprises a basic salary, other benefits (company car) and pension. There is no bonus scheme.

Pension benefits and other benefits to the CEO and other senior executives are a part of the total remuneration package.

Other senior executives are the deputy CEO of the parent company, other mem-bers of the Group management team and the CEOs and site managers of the sub-sidiaries.

One of the Board members is a woman. None of the senior management team is a woman. The number of other senior executives is four.

4 COSTS DISTRIBUTED By TyPE (SEK '000)

2014 2013

Depreciation and impairment 11,582 11,817Cost of remuneration to employees 111,941 111,689Cost of materials and other costs 152,782 208,063Total costs distributed by type for remaining business 276,305 331,569Total costs 276,305 331,569

3 DEPRECIATION (SEK '000) 2014 2013

Depreciation included in cost of sold goods 2,461 3,278Depreciation included in sales costs 1,067 714Depreciation included in administration costs 1,694 1,969Depreciation included in research and development costs 6,360 5,856Total depreciation 11,582 11,817

Depreciation and impairment of intangible assets amounted to SEK 8,118,000 (6,566,000), of which SEK 6,341,000 (5,856,000) is included in research and deve-lopment costs. Other depreciation includes depreciation of tangible assets.

2014 2013

The average number of employees, broken-down into men and women, amounted to:Women 18 21Men 127 130Total for group 145 151

Salaries and remuneration amounted to (SEK ‘000)The Board, CEOs and deputy CEOs1 10 509 10 667Other employees 70 777 70 382Total salaries and remuneration 81 286 81 049

Payroll overheads 22 789 23 031Pension costs for CEOs and and deputy CEOs1 1 958 1 797Pension costs for other employees 5 908 5 812Total salaries, payroll overheads, other remuneration and pension costs 111 941 111 689

1) Refers to CEO and deputy CEO of parent company and CEOsof subsidiaries.

5 AVERAGE NO. OF EMPLOyEES, WAGES, OTHER REMUNERATION AND SOCIAL COSTS

6 OPERATING EXPENSES (SEK ‘000), CONTINUED 2014 2013

Operational leasing contractsNominal value of future leasing fees concerning non-revocable leasing contractsLeasing expenses for the year 12,976 17,140Future leasing expenses within one year 9,566 11,824Future leasing expenses 1-5 years 13,800 15,189Future leasing expenses more than 5 years – 568Total 36,342 44,721

Remuneration to auditorsPwC Auditing 2,234 1,083 Other assignments – –Sub-total 2,234 1,083Other auditing companies Auditing 248 120Assignments in addition to auditing 7 –Tax advice 497 –Other services 26 –Sub-total 778 120Grand total 3,012 1,203

The auditing assignment refers to checks of the annual report and accounts and the management of the Board and the CEO, other duties that the auditors of the company are asked to perform and advice or other support relating to observations made during the auditing assignment or related duties. All other work is ‘Other assignments’.



5 AVERAGE NO. OF EMPLOyEES, WAGES, OTHER REMUNERATION AND SOCIAL COSTS, CONTINUED

Pension expenses refer to expenses that affect the year’s profit/loss. The pension premium for the CEO amounts to 35% of the pension-based salary. Pension premi-ums for other senior executives amount to between 20-35% of the pension-based salary. The retirement age for the CEO and other senior executives is 65.

Terms of dismissalThe company must give the CEO 18-24 months’ notice of dismissal, while the CEO must give the company six months’ notice. No redundancy payments will be made in addition to normal salary during the notice period. For other senior executives, the company must give between 6-18 months’ notice of dismissal, while senior executives must give the company three to six months’ notice. In addition to salary, severance pay for 6-12 months has been agreed for certain senior executives.

Procedures The parent company’s Board of Directors has authorised the Chairman of the Board to set salary and remuneration for the CEO in accordance with principles estab-lished by the Board. Salary and remuneration for other senior executives are set by the parent company’s CEO, Group President and chairmen of the subsidiaries’ boards.

Remuneration and other benefits Basic salary/ Other Pension Share-based Other Totalduring the year (SEK) Board fee benefits cost remuneration remuneration

Chairman of the Board Bill Tunbrant 150,000 – – – – 150,000 Board member Kenneth Eriksson 100,000 – – – – 100,000 Board member Mats Gabrielsson 100,000 – – – – 100,000 Board member Bengt E Johnson 100,000 – – – – 100,000 Board member Wendy Lin 100,000 – – – – 100,000CEO, parent company, and Board member Rolf Hasselström 2,753,400 84,580 853,229 – – 3,691,209Deputy CEO, Niklas Johansson 1,362,286 45,648 229,929 – – 1,637,863Deputy CEO, Claes Palm 978,800 69,000 484,243 – – 1,532,043Other senior executives (1 person) 930,372 255,074 178,312 – – 1,363,758CEOs of subsidiaries (3 people) 3,933,068 73,300 212,644 – – 4,219,012

Remuneration and other benefits Basic salary/ Other Pension Share-based Other Totalduring 2013 (SEK) Board fee benefits cost remuneration remuneration

Chairman of the Board Bill Tunbrant 150,000 – – – – 150,000Board member Ulf Ahlén 100,000 – – – – 100,000Board member Kenneth Eriksson 100,000 – – – – 100,000Board member Mats Gabrielsson 100,000 – – – – 100,000Board member Bengt E Johnson 100,000 – – – – 100,000CEO, parent company, and Board member Rolf Hasselström 2,754,000 82,980 946,009 – – 3,782,989Deputy CEO, Göran Falkenström 1,261,866 102,840 355,520 – – 1,720,226Deputy CEO, Niklas Johansson 1,337,932 43,920 313,455 – – 1,695,307CEOs of subsidiaries (4 people) 4,963,807 71,400 181,784 – – 5,216,991Other senior executives (1 person) 814,636 55,900 – – – 870,536

6 OPERATING EXPENSES (SEK ‘000)Commitments concerning operational leasing contracts – for which a Group company is the lease holderThe Group rents a number of properties, offices and warehouses via operational leasing contracts that are not revocable. These contracts have different terms, index clauses and extension rights.

The Group also leases different types of machinery and other technical equip-ment via revocable operational leasing contracts. The notification period for the Group in these contracts is six months.

When a leasing contract means that the Group, as lease holder to all extents and purposes enjoys the full economic benefits and carries the full economic risks attributable to the leasing object, the object is reported as a fixed asset in the con-solidated balance sheet. A corresponding commitment to pay leasing fees in future is reported as a liability.

Future total minimum leasing fees for non-revocable operational leasing con-tracts are as follows:

11 INCOME TAXES (SEK ‘000) 2014 2013

Tax for the yearCurrent tax –509 –Tax in profit / loss statements –509 0

Tax on consolidated earnings before tax differs from the theoretical amount thatwould have been obtained via a weighted average tax rate applicable for earningsin the consolidated companies as follows: 2014 2013

Reported earnings before tax –6,731 –64,092– Tax according to Swedish tax rate of 22% 1,481 14,100– Effects of foreign tax rates 971 –296– Tax-exempt income 218 2– Non-deductible expenses –177 –156 – Group adjustment for which no deferred tax receivable

is reported 4,017 –685– Utilised deficit deduction not previously activated 590 –– Taxable deficit for which deferred tax receivable

not utilised –7,609 –12,965Total –509 0

Temporary differencesTemporary differences arise when the recorded value of assets or liabilities is differ-ent to the taxable value. Temporary differences regarding the following items have resulted in deferred tax liabilities and deferred tax receivables.

2014 2013

Deferred tax liabilitiesDeferred tax liabilities, opening balance 12,876 12,876Translation differences –719 –Total deferred tax liabilities 12,080 12,876

Deferred tax receivablesDeferred tax receivables, opening balance 39,392 39,392Total deferred tax receivables 39,392 39,392

Deferred tax receivables and tax liabilities are offset when there is legal justification and when deferred tax relates to the same tax authority. All of the deficit deductions that form the basis for the deferred tax receivables presented above for the Group are attributable to deficit deductions in Sweden. The life-length of all deficit deduc-tions in Sweden is currently assessed to be unlimited.

Taxable profits must be generated to take advantage of capital loss carryforwards. For this to happen the business plan and business model established by the manage-ment team is realized. The plan is based mainly on three parts, with the base com-prising the compressor technology developed primarily within Opcon’s subsidiary, Swedish Rotormaskiner, SRM over several years. The company continues to develop close cooperation with Fujian Snowman Co., Ltd, which increased its holding in Opcon through a rights issue in the spring of 2014.

The commercialization of Opcon Powerbox is also crucial. The cooperation in the joint venture, which was established in China in the autumn of 2014 for commer-cialization of Opcon Powerbox and the formation of a cost-effective and competitive manufacturing structure is of great importance. According to the feasibility study Snowman has performed, annual sales for the joint venture could amount to CNY 220 million annually within 2-3 years. Profit sharing from the joint venture will be recognized as financial income (dividend) for the parent company.

Thirdly, the restructuring of Opcon’s bioenergy business has considerable im-portance for the generation of future profits. In 2014, loss-making companies in Sweden were wound up and liquidated. At the same time, the focus has increased on internationalization of the foreign subsidiaries in Germany and the UK and on further development of the licensed business that has been built up.

7 TRANSACTIONS WITH RELATED PARTIES (SEK '000) 2014 2013

The following transactions were carried outwith related partiesPurchase of goods and servicesEssarem AB, rental for property in Nacka 4,000 4,000Mind Finance AB, interest and fees for loan and factoring 2,132 200

Remuneration to key decision makersRolf Hasselström, salary and other employment benefits 3,691 3,783Mats Gabrielsson, Board fee 100 100

Closing balance at year-endLiabilities to Mind Finance AB, Essarem AB and Gabrielsson Invest AB 14,321 5,500 Mind Finance is owned by Salamino AB. Salamino AB and Essarem AB are owned by Gabrielsson Invest AB, which is owned by Mats Gabrielsson, a major shareholder in Opcon and the chairman of the Board of Opcon.

Rolf Hasselström is a major shareholder in, and CEO of, Opcon. (See also note 5).



8 EXCHANGE RATE DIFFERENCES (SEK ‘000)

2014 2013

Exchange rate differences are reported in the profit / loss statements as followsCost of goods sold –108 9Total exchange rate differences –108 9

9 OTHER OPERATING COSTS (SEK '000)

2014 2013

Impairment of shares and participations, Enerji –257 –1,019Other – –254Total other operating income –257 –1,273

The opening value of shares in Enerji is SEK 512,000.

10 FINANCIAL INCOME AND EXPENSES (SEK ‘000)

2014 2013

Financial income, remaining business 66 1,180Total financial income 66 1,180

Interest expenses, remaining business –4,823 –10,946Total financial expenses –4,823 –10,946

13 EARNINGS PER SHARE (SEK ‘000)Before dilutionEarnings per share before dilution are calculated by dividing the profit attributableto parent company shareholders by the weighted average number of ordinaryshares in issue during the year, excluding ordinary shares purchased by the companyand held as shares in the parent company.

2014 2013

Profit / loss from remaining business attributable to parent company shareholders 13,017 –61,807Weighted average number of outstanding ordinary shares in issue (‘000) 370,872 331,085Earnings per share before dilution 0.03 –0.19

Profit / loss from divested business attributable to parent company shareholders –19,748 –2,285Weighted average number of outstanding ordinary shares in issue (‘000) 370,872 331,085Earnings per share before dilution –0.05 –0.01

Profit / loss attributable to parent company shareholders –6,731 –64,092Weighted average number of outstanding ordinary shares in issue (‘000) 370,872 331,085Earnings per share before dilution –0.02 –0.19

After dilutionDiluted earnings per share are calculated by adjusting the weighted average num-ber of ordinary shares outstanding to assume conversion of all dilutive potentialordinary shares. 2014 2013

Profit / loss from remaining businessattributable to parent company shareholders 13,017 –61,807Weighted average number of outstanding ordinary shares in issue (‘000) 370,872 331,085Earnings per share after dilution 0.03 –0.19

Profit / loss from divested businessattributable to parent company shareholders –19,748 –2,285Weighted average number of outstanding ordinary shares in issue (‘000) 370,872 331,085Earnings per share after dilution –0.05 –0.01

Profit / loss attributable to parent company shareholders –6,731 –64,092Weighted average number of outstanding ordinary shares in issue (‘000) 370,872 331,085Earnings per share after dilution –0.02 –0.19

11 INCOME TAXES (SEK ‘000), CONTINUED

In 2014 the savings programme that was started at the end of 2013 continued with good effects. The parent company’s business in Åmål was closed down, IT ac-tivities were outsourced and a review of the Group’s financing requirements resulted in lower financing costs. Overall the savings programme is expected to produce an-nual savings of over SEK 30 million.

Based on the aforementioned measures and current market conditions, manage-ment is convinced that the business will generate taxable profits. Consequently, management believes that the current tax deficits will be utilized. Based on these projections management reported on 31 December 2014 unchanged deferred tax assets of SEK 39.4 million. This means that even if the assets reported in the balance sheet only amount to SEK 39.4 million, the company retains the right to utilise for tax purposes the total amount of available deficit deductions amounting to SEK 79.2 million.

2014 2013

Deferred tax receivables– Deferred tax receivables to be utilised

after 12 months 39,392 39,392Deferred tax liabilities– Deferred tax liabilities to be paid

after 12 months 12,080 12,876



12 EARNINGS FROM DECOMMISSIONED AND DIVESTED BUSINESS (SEK ‘000)

2014 2013

Earnings from business being decommissioned1 –19,748 –Earnings from divested business2 – –1,600

Financial information concerning decommissioned business, 2014

Summarised income Remaining Decommissioned Groupstatement business business total

Net sales 266,156 180 266,336Operating costs, net –247,873 –19,393 –267,266Operating profit / loss 18,283 –19,213 –930Net financial items –4,757 –535 –5,292Tax –509 – –509Profit / loss 13,017 –19,748 –6,731

1) Amount relating to OBE Energi AB and Opti Energy Group AB and subsidiaries. These companies are not part of the Group and cannot therefore be consolidated in the balance sheet. The companies’ results for 2014, including completed impair-ments, is reported in the income statement as earnings from divested business.2) Profit attributable to the capital gain/loss from the sale of SEM AB, which was sold in November 2012 and the results of the business until its sale (valid only in 2012).

16 MACHINERy AND OTHER TECHNICAL PLANT (SEK ‘000)

2014 2013

Opening acquisition value 26,823 32,690Changes for the year– Sales and scrapping – –5,867– Reclassification –29 –Closing accumulated acquisition value 26,794 26,823

Opening depreciation –17,215 –20,022Changes for the year– Depreciations –1,299 –1,941– Sales and scrapping – 4,748– Reclassification 29 –Closing accumulated depreciation –18,485 –17,215

Opening impairment –5,000 –5,000Closing accumulated impairment –5,000 –5,000 Closing residual value 3,309 4,608



15 BUILDINGS AND LAND (SEK ‘000) 2014 2013

BuildingsOpening acquisition value 8,260 8,022Purchases 504 –Reclassification 124 –Translation differences 599 238Closing accumulated acquisition value 9,487 8,260 Opening depreciation –2,271 –1,267Changes for the year – Depreciation –955 –944– Reclassification 114 –– Translation differences –209 –60Closing accumulated depreciation –3,321 –2,271Closing reported residual value 6,166 5,989

14 FINANCIAL ASSETS AND LIABILITIES (SEK ‘000)

Financial instruments 31 December 2014 Loans and accounts Assets recognised Derivates used Financial assets Assets on balance sheet receivable at fair value for hedging that can be sold in income statement

Accounts receivable and other receivables 66,747 – – –Other long-term receivables and holdings 20,517 – – 20,2611

Securities – 2552 – –Liquid funds 22,967 – – – 110,231 255 0 20,261

Liabilities in balance sheet Liabilities recognised Derivates used Other financial at fair value for hedging liabilities in income statement

Borrowings – Interest-bearing liabilities – – 20 322Other liabilities – Accounts payable, trade – – 41 395 – Other current liabilities – – 29 875 0 0 91 592

Financial instruments 31 december 2013 Loans and accounts Assets recognised Derivates used Financial assets Assets on balance sheet receivable at fair value for hedging that can be sold in income statement

Accounts receivable and other receivables 63,675 – – –Other long-term receivables and holdings 23,882 – – 20,261 1

Securities – 5122 – –Liquid funds 17,853 – – – 105,410 512 0 20,261

Liabilities in balance sheet Liabilities recognised Derivates used Other financial at fair value for hedging liabilities in income statement

Borrowings – Interest-bearing liabilities – – 3,672Other liabilities – Accounts payable, trade – – 50,872 – Other current liabilities – – 21,717 0 0 76,261

1) Refers to holding in Air Power Group (APG), a private company based in California, USA. Since a market value is not listed and no reliable value can be ascertained, theholding has been recognised at the acquisition amount in accordance with IAS 39.46.2) Refers to holding in Enerji Ltd., (ERJ:ASX) Australia.

18 CAPITALISED EXPENDITURE FOR DEVELOPMENT ACTIVITIES (SEK ‘000)

2014 2013

Opening acquisition value 167,373 155,465Change for the year – Capitalised expenditure 4,571 11,908– Reclassification 1,164 –Closing accumulated acquisition value 173,108 167,373

Opening depreciation –33,590 –27,099Change for the year – Depreciation –7,457 –6,491– Reclassification 326 –Closing reported residual value, accumulated depreciation –40,721 –33,590

Closing reported residual value 132,387 133,783

Capitalised expenditure for development activities consist primarily of costs for de-velopment and industrialisation of Opcon Powerbox, flue gas condensers and air supply systems for fuel cell vehicles.

Assumptions for impairment test for expenses brought forward for devel-opment workAll development projects of significant size within the Opcon Group undergo a sep-arate impairment test. The test is performed for each product’s assumed life length, which is assumed to be 15 years. After this time it is assumed that the product will cease to exist and no future revenue is expected. The generated cash flows from each product are discounted and a current value obtained for the total investment.



19 PATENTS AND LICENCES (SEK '000) 2014 2013

PatentsOpening acquisition value 14,814 14,617– Activated expenses 133 177– Reclassification –124 –– Translation difference 64 20Closing accumulated acquisition value 14,887 14,814 Opening depreciation –14,207 –14,121Changes for the year– Depreciation –196 –75– Reclassification –114 –– Translation difference –36 –11Closing accumulated depreciation –14,553 –14,207

Closing residual value 334 607

Licences & rightsOpening acquisition value 22,440 22,440Reclassification 3,100 –Closing accumulated acquisition value 25,540 22,440

Opening depreciation –398 –398Depreciation –465 –Reclassification –102 –Closing accumulated depreciation –965 –398


In 2014 the Group’s collected income for royalties and licences amounted to SEK 37.9 million.

A specific impairment test is performed each year for licenses and rights. The test is performed with an assumed life of 15 years where the generated cash flows discounted with a discount rate of 10 percent before taxes. No impairment existed.

A higher discount rate of 5 percentage points would not lead to any impairment requirement.

17 INVENTORIES, TOOLS AND INSTALLATIONS (SEK ‘000) 2014 2013

Opening acquisition value 17,730 21,320Changes for the year – Purchases 3,255 424– Sales and scrapping –602 –4,107– Reclassification 540 –– Translation differences 349 93Closing accumulated acquisition value 21,272 17,730 Opening depreciation –15,019 –16,871Changes for the year – Depreciation –1,210 –2,366– Sales and scrapping 190 4,317– Reclassification –540 –– Translation differences –291 –99Closing accumulated depreciation –16,870 –15,019


18 CAPITALISED EXPENDITURE FOR DEVELOPMENT ACTIVITIES (SEK ‘000), CONTINUED

Of greatest significance are the capitalised development costs for Opcon Pow-erbox, amounting to SEK 97.3 million, and for flue gas condensers, amounting to SEK 15.1 million.

Within the Waste Heat Recovery / Compressor technology business area, which includes Opcon Powerbox, a discount rate of 22.3% has been used. The high dis-count rate is used to compensate for assumptions of strong growth and sales of around SEK 300 million, including aftermarket revenues, by 2019, the end of the forecast period. The background to this is that Opcon Powerbox remains in an initial commercialisation phase and the joint venture in China, Fujian Opcon Energy Technology Co., Ltd, which was started in the autumn 2014, is still being built up. Meanwhile, development in 2014 was very positive with sales of rights amounting to CNY 72 million. After the end of the forecast period it is assumed that growth will be 3%. Another significant assumption is that the joint company will start to generate a dividend from 2017. Should no dividend be paid this would not by itself constitute a requirement for an impairment test.

If sales related to Opcon Powerbox only be half of the assumed amount this would mean an impairment requirement of SEK 44.2 million. If the discount rate increases by five percentage points, no impairment would be required.

In the bioenergy business area, which includes flue gas condensers, a discount rate of 13% is used. Significant assumptions include an increase in sales during the forecast period and that licence revenue for the technology is on the same level as the average for the past two years. After the end of the forecast period it is assumed that growth will be 2%. If sales were not to increase during the forecast period there would be no impairment requirement. Neither would there be an impairment requirement if licence revenues were halved. An increase in the discount rate by 5% would not result in an impairment requirement.



2014 2013

GoodwillOpening reported value 144,156 142,016Change for the year– Translation differences 4,592 2,140Closing reported value 148,748 144,156

A summary of the distribution of goodwill per cash-generating unit is shown below:In the Renewable Energy business area two cash-generating units have been identi-fied – Bioenergy and Compressor technology/Waste Heat Recovery. 2014 2013

Goodwill per cash-generating unit Bioenergy 116,082 113,820Compressor technology / Waste Heat Recovery 32,666 30,336 148,748 144,156

Recoverable amounts for Opcon are established using estimates of utilisation value based on estimated future cash flow before tax from financial budgets and fore-casts approved by the management team and covering a five-year period.

A significant assumption within Compressor technology/Waste Heat Recovery is that the commercialisation of the new Opcon Powerbox begins in earnest with strong growth going forward. The company expects sales of around SEK 300 mil-lion, including revenues on the aftermarket, by 2019, the end of the forecast period. Meanwhile, development in 2014 was very positive with sales of rights amounting to CNY 72 million. To reflect a greater risk connected to this product area a higher discount rate has been used.

Bioenergy Compressor Technology / Waste Heat Recovery

Key assumptions usedOperating margin1 5,8% (4,8%) 9,9% (19,0%)Growth rate after forecast period2 2,0% (3,0%) 3,0% (3,0%)Discount interest3 13,0% (13,0%) 22,3% (22,3%)

1) Operating margin corresponds to the forecast average operating margin for cash-generating units including allocated parent company costs. The assumed op-erating margins are based on gross margins from existing and new products less the costs that Opcon estimates for sales, administration, research and development. For existing products and product areas, gross margins are based on historical data with consideration for the changed production structure. For new products and products in the initial commercial phase, gross margins are based on quotations received from suppliers and the company’s product calculations. 2) Weighted average growth rate used to extrapolate cash flow beyond the budget period. For a number of specific product sectors within Compressor technology/Waste Heat Recovery, a growth rate of 2% has been used.3) Discounting interest after tax is applied using a model that includes 10-year state-loan interest, a risk premium for listed companies similar in size to Opcon and a general risk premium, which gives a discount rate of 8.44% after tax. Furthermore, a recalculation of the discount rate before tax has been made and the interest has been raised to take into consideration what the management team perceives to be greater risk for products such as Opcon Powerbox that are in an early phase of commercialisation.

Sensitivity analysis

A number of sensitivity analyses were carried out based on the impairment test that was performed. The outcomes are presented below of changes in a number of variables. If the variables change, the outcome is valid provided all other variables are unchanged. Based on the following sensitivity analysis it was decided that there was no impair-ment requirement as of 31 December 2014.

20 GOODWILL (SEK '000)

Sensitivity analysisCompressor Technology / Waste Heat Recovery

Discount interest Impairment, Growth beyond Impairment, Reduction in Impairment, requirement (SEK m) forecast requirement (SEK m) average requirement (SEK m) operating margin, %

16,3% – 3% – 2% –7.6 19,3% – 2% – 4% –32.7 22,3% – 1% – 6% –32.7 25,3%1 –22.6 – – – – 28,3% –32.7 – – – –

1) An impairment requirement exists when the discount rate is above 23.6%.

Sensitivity analysisBioenergy

Discount interest Impairment, Growth beyond Impairment, Reduction in Impairment, requirement (SEK m) forecast requirement (SEK m) average requirement (SEK m) operating margin, %

11% – 3% – 0.5% –6.4 12% – 2% – 1% –20.9 13% – 1% – 2% –50.0 14% –9.2 – – – – 15% –23.3 – – – –

23 INVENTORIES (SEK '000)

2014 2013

Valued at acquisition valueRaw materials 7,424 26,314Work in progress 49,293 30,612Completed goods 6,010 12,969Total 62,727 69,895

22 OTHER LONG-TERM RECEIVABLES AND HOLDINGS (SEK ‘000)

2014 2013

Opening acquisition value 44,143 102,852Change for the year– Other long-term receivables –3,365 –58,709Closing accumulated acquisition value 40,778 44,143Closing reported value 40,778 44,143

Refers primarily to the convertible loan and shareholding in Air Power Group Ltd. (APG), a private company based in California, USA. Since a market value is not listed and no reliable value can be ascertained, the holding has been recognised at the acquisition amount in accordance with IAS 39.46.

24 ACCOUNTS RECEIVABLES (SEK ‘000) 2014 2013

Accounts receivable 50,771 46,306Reservations for uncertain receivables –4,065 –979Accounts receivable, net 46,706 45,327

Changes in reserve for uncertain accounts receivableAs of 1 January 979 1,295Receivable written off during the year and not recoverable – –109Reserve for uncertain receivables 3,086 –207As of 31 December 4,065 979

The book value of accounts receivable is in agreement with fair value.

Payment maturities 2014 2013

Not due 15,840 25,497Less than 3 months 12,071 6,1933 to 6 months 2,561 2,275More than 6 months 16,234 11,362Total 46,706 45,327

The company considers that there is completely adequate security for most of ac-counts receivable that are more than six months overdue.

Currency distribution 2014 2013

SEK 24,838 24,851EUR 17,243 13,872USD 81 234Other currencies 4,544 6,370Total 46,706 45,327



26 CONTRACTOR AGREEMENT (SEK ‘000) 2014 2013

Work in progress, non-invoiced incomeWork in progress, income for contract 291,778 298,800Invoiced contracted work in progress –254,630 –263,454Total 37,148 35,346

Invoiced income for work not completedInvoiced contracted work in progress 133,025 222,622Work in progress, income for contract –103,608 –190,113Total 29,417 32,509

25 PREPAID COSTS AND ACCRUED INCOME (SEK ‘000) 2014 2013

Prepaid rents 1,237 304Insurance premiums 5 134Accrued income 2,073 14,199Other items 11,052 6,719Total 14,367 21,356

21 PARTICIPATIONS IN ASSOCIATED COMPANIES

2014 2013

Participations in Fujian Opcon Energy Technology Co., Ltd. 19,053 –Capitalised costs for establishing Fujian Opcon Energy Technology Co., Ltd. 4,844 –Participation in loss for the year –422 –Translation difference –55 – Total 23,420 –

As payment for transferred licensing rights concerning Opcon’s proprietary technol-ogy, Opcon Powerbox, the Opcon Group received 48.98% of the shares in Fujian Opcon Energy Technology Co., Ltd. The consolidated value of the received shares was SEK 19 million. Further, acquisition-related expenses of SEK 4.8 million were capitalised as an acquisition expense for the participation.

The remaining shares in the company are held by Fujian Snowman Co., Ltd. The associated company is registered in China and will conduct business on markets in Asia. The capital share method was used to value the participation.

28 OTHER PROVISIONS (SEK ‘000) 2014 2013

Opening balance 4,087 3,780– Utilised during the year / New provisions –2,536 307As of 31 December 1,551 4,087

Provisions comprise:

Warranty provisions 1,551 4,087Provisions at period-end 1,551 4,087

Warranty provisionsThe Group provides warranties for certain products and the subsidiaries undertake to repair or replace parts that do not perform properly. Provisions amounting to SEK 1,551,000 (4,087,000) were reported on the closing date for anticipated warranty claims, based upon experience of previous levels for repairs and replacements.

29 BORROWINGS, INTEREST (SEK ‘000) 2014 2013

Interest-bearing liabilitiesLong-termLiabilities to credit institutions 716 543Total long-term liabilities 716 543

CurrentLiabilities to credit institutions 19,606 3,129Financial leasing – –Total current liabilities 19,606 3,129

Total interest-bearing liabilities 20,322 3,672

All long-term loans are in SEK.The unutilised share of the overdraft facility at the end of the year was SEK

15,300,000 (18,776,000).

Maturity structure for debt with credit institutions (excluding bank overdraft facilities and factoring) 2014 2013

6-12 months 19,606 3,1291-5 years 716 543

Terms such as interest and limits for the bank overdraft and short term borrowings are subject to annual review with lenders. Pledged security for loans and credit from financial institutions are shown in note 31.



27 SHAREHOLDERS’ EQUITyA specification of changes in shareholders’ equity is included in the report entitled “Changes in shareholders’ equity”.

The accumulated exchange rate differences for shareholders’ equity is SEK –3,701,000 (–7,768,000).

Shares Total no. of shares

No. on 1 Jan. 2013 297,885,276 New share issue 2013 12,087,454New share issue 2013 34,441,415No. on 31 Dec. 2013 344,414,145New share issue 2014 30,000,000New share issue 2014 4,385,965No. on 31 Dec. 2014 378,800,110

The nominal value of shares is SEK 1.25. All shares have been fully paid. The com-pany does not hold any of its own shares. (There is only one class of shares.)

In 2013 Opcon’s Board decided to perform two directed new share issues as mandated by the 2012 AGM. Opcon performed a directed issue of 12,087,454 shares at SEK 0.59 per share to GEM Global Yield Fund Limited. In June a directed new issue was made to Hong Kong Snowman Technology Ltd, with 34,441,415 shares issued at a price of SEK 0.78 per share. This raised around SEK 34 million be-fore costs. The total number of shares after these two share issues is 344,414,145.

In accordance with the agreement with GEM, Opcon in 2011 issued 2.2 mil-lion buy options with a subscription price of SEK 24 and a period running until 3 May 2016. The options have been subscribed and allocated to GEM Global Yield Fund Ltd. The options will be recalculated after the new share issues have been completed.

In March 2014 a private placement of 30,000,000 shares in Opcon at SEK 0.57 per share was made with Hong Kong Snowman Technology Ltd., a wholly-owned subsidiary of Fujian Snowman Co., Ltd. This share issue raised SEK 17.1 million. Also in March 2014 Opcon directed a private placement of 4,385,965 shares at SEK 0.57 per share to GEM Global Yield Fund Limited, of which SEK 2.5 million was settled against debt, which reduced interest-bearing liabilities. The shares issued to GEM were part of the equity line financing facility of up to SEK 250 million over 36 months that was agreed in 2011. After the new issue a new agreement was reached with GEM concerning an extension of the facility for a further two years to 2016, with SEK 227 million remaining within this framework.

30 ACCRUED EXPENSES AND PREPAID INCOME (SEK ‘000)

2014 2013

Accrued salaries 463 286Accrued holiday pay 7,778 7,806Accrued payroll overheads 2,626 2,557Other items 9,072 13,472Total 19,939 24,121



33 CONTINGENT LIABILITIES (SEK ‘000)The Group has contingent liabilities concerning bank guarantees and other guaran-tees and other issues arising from normal business activities. No significant liabilities are expected to arise from these contingent liabilities.

2014 2013

Guarantees and sureties 36 072 52 810Total contingent liabilities 36 072 52 810

31 PLEDGED SECURITIES (SEK ‘000)

2014 2013

For own provisions and liabilitiesProvisions in respect of liabilities to credit institutions– Property mortgages 19,707 17,951Total pledged securities 19,707 17,951

32 THE OPCON SHAREThe Opcon share has been listed on the O-list of the Stockholm Stock Exchange since 1998 and is now listed on the Small Cap list of OMX Stockholm exchange.

As mandated by the 2013 AGM, Opcon’s Board performed a directed issue of 30,000,000 new shares at SEK 0.57 per share to Hong Kong Snowman Technol-ogy Ltd.

After the issue the total number of outstanding shares in Opcon AB was 374,414,145.

As mandated by the 2013 AGM, Opcon’s Board performed a directed issue of 4,385,965 new shares at a price of SEK 0.57 per share. This new issue was made to GEM Global Yield Fund Limited.

The total number of shares after this share issue is 378,800,110.

OwnershipAt the end of 2014 the largest owners of Opcon AB were B.O. Intressenter (Mats Gabrielsson) with 18.0%. The next largest shareholder was Hong Kong Snowman Technology Ltd. with 17.0%.

At the end of 2014 Opcon had 7,424 (6,951) registered shareholders.

DividendThe Board proposes that no dividend be paid for the 2014 financial year.

Options schemeOpcon currently has an options scheme 2011/2016 for which options have been transferred. In accordance with the agreement with GEM, Opcon has issued 2.2 mil-lion subscription options with a subscription price of SEK 24 and a period running until 3 May 2016. The options have been subscribed and allocated to GEM Global Yield Fund Ltd. Following the issue of further options since 2011 these options will be recalculated.

At the 2014 AGM it was decided to establish two further options schemes for senior executives and Board members. The scheme involves 2,500,000 options for senior executives and 1,750,000 for directors. The options have been subscribed by, and allocated to, Opcon’s subsidiary, SRM, to be passed on to senior executives and Board members. No options have been transferred yet. The Board of Direc-tors has also received previous authorization to issue option programs for senior executives and directors. No options in the programs have been transferred. These programmes have since been replaced by those decided at the 2014 AGM.

Data per share 2014 2013 2012 2011 2010

Profit / loss per share before dilution, SEK 0.02 –0.19 –1.16 –1.31 0.22Profit / loss per share after dilution, SEK 0.02 –0.19 –1.16 –1.31 0.22Shareholders equity per share, SEK 1.26 1.32 1.63 4.37 20.41Dividend per share, SEK 0 0 0 0 0Average no. of shares, ‘000 378,800 331,085 131,569 41,905 24,980No. of shares at end of year, '000 370,872 344,414 297,855 130,171 25,159

32 THE OPCON SHARE, CONTINUED

Largest shareholders, 30 Dec. 2014 No. of shares PercentageB.O. Intressenter AB 66,980,358 17.68Hong Kong Snowman Technology Ltd. 64,441,415 17.01Försäkringsaktiebolaget Avanza 15,786,566 4.17Calamus AB (Rolf Hasselström) 8,801,505 2.32Nordea Bank 7,966,235 2.10Emmaljunga Holding AB 7,569,046 2.00Graze AB 6,900,000 1.82Nordnet Pension AB 5,840,058 1.54Handelsbanken Liv 3,599,039 0.95Robur Försäkring 3,327,277 0.88

Source: Euroclear Sweden

Size of shareholding, 30 Dec. 2014Holding No. of owners No. of shares Holding, %

1-500 1,502 301,720 0.08501-1000 680 565,419 0.151001-5 000 2,026 5,687,645 1.505 001-10 000 928 7,573,061 2.0010 001- 2,288 364,672,265 96.27Total 7,424 378,800,110 100.0 Source: Euroclear Sweden

Owner distribution, 30 Dec. 2014 No. of owners No. of shares Holding, %

Legal entities 542 236,828,152 62.52 – of whom, resident in Sweden 243 139,323,894Individuals 6,882 141,971,958 37.48 – of whom, resident in Sweden 6,826 139,494,267Total 7,424 378,800,110 100.0 – of whom, resident in Sweden 7,069 278,818,161 Source: Euroclear Sweden

PARENT COMPANY'S INCOME STATEMENTS (SEK '000) Note 2014 2013

34Net sales 35 44,070 33,174Cost of services sold –21,808 –33,036Gross profit 22,262 138

Administrative costs –28,540 –16,078Other income 56,554 –Operating profit / loss 36, 37, 38, 39 50,276 –15,940

Profit / loss from financial items Earnings from other securities and receivables that are fixed assets – –1,600Impairment of shares in subsidiaries –6,326 –Received / paid Group contribution –18,416 –2,894Other interest income and similar profit / loss items 40 7,260 7,813Interest income and similar profit / loss items 40 –516 –5,864Profit / loss after financial items 32,278 –18,485

Tax on profit for the year 41 – –Profit / loss for the year 32,278 –18,485


parent Company’s inCome statements

PARENT COMPANY'S BALANCE SHEET (SEK '000) Note 2014 2013

ASSETS Fixed assetsTangible fixed assetsInventories, tools and installations 44 819 271

Financial fixed assetsDeferred tax 41 35,969 35,969Participations in Group companies 34, 42 245,624 245,624Participations in associated companies 43 61,398 –Other long-term receivables 45 40,320 40,674Total fixed assets 384,130 322,538

Current assetsCurrent receivablesAccounts receivable – trade 300 815Receivables from Group companies 235,398 225,778Tax receivable 521 521Other current receivables 6,401 1,571Prepaid expenses and accrued income 46 170 655 242,790 229,340

Cash and bank balances 5,772 4Total current assets 248,562 229,344

TOTAL ASSETS 632,692 551,882

SHAREHOLDERS’ EQUITY AND LIABILITIESShareholders’ equityRestricted shareholders’ equityShare capital 47 473,500 430,518Statutory reserve 12,374 35,756Total restricted equity 485,874 466,274

Accumulated profit / lossPremium reserve 275,296 275,296Profit brought forward –246,670 –228,185Profit / loss for the year 32,278 –18,485Total accumulated profit / loss 60,904 28,628Total shareholders’ equity 546,778 494,900

Current liabilitiesInterest-bearing liabilities to credit institutions 48 12,917 3,102Accounts payable – trade 7,355 5,463Liabilities to Group companies 56,708 43,303Other current liabilities 2,082 1,350Accrued expenses and prepaid income 49 6,852 3,764Total current liabilities 85,914 56,982

TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES 632,692 551,882

Pledged securities 50 None NoneContingent liabilities 51 37,826 53,745


parent Company's balanCe sheet


Changes in shareholders’ eQuity, parent Company

CHANGES IN SHAREHOLDERS' EQUITY, Share Statutory Share premium Accumulated TotalPARENT COMPANY (SEK '000) capital reserve reserve profit / loss equity

Opening balance, 1-1-2013 372,357 59,920 275,296 –228,185 479,388

Comprehensive incomeProfit / loss for the year 0 0 0 –18,485 –18,485Total comprehensive income 372,357 59,920 275,296 –246,670 460,903

Transactions with shareholdersNew share issue 58,161 –24,164 – – 33,997Total transactions with shareholders 58,161 –24,164 0 0 33,997Closing balance, 31-12-2013 430,518 35,756 275,296 –246,670 494,900

Comprehensive incomeProfit / loss for the year 0 0 0 32,278 32,278Total comprehensive income 0 0 0 32,278 32,278

Transactions with shareholdersNew share issue 42,982 –23,382 – – 19,600Total transactions with shareholders 42,982 –23,382 0 0 19,600Closing balance, 31-12-2014 473,500 12,374 275,296 –214,392 546,778

PARENT COMPANY'S CASH FLOW STATEMENTS (SEK '000) Note 2014 2013

Operating activitiesProfit / loss 50,276 –15,940Received interest 7,260 7,813Paid interest –516 –5,864Paid income tax1 –2,911 880Depreciation 44 145 217Items not affecting liquidity 43 –56,554 –Total cash flow from operating activities –2,300 –12,894

Cash flow from change in working capitalChange in accounts receivable 515 –81Change in current receivables –11,053 –27,387Change in accounts payable 1,892 –1,048Change in other current liabilities 17,225 –7,724Total cash flow from operating activities after change in working capital 6,279 –49,134

Cash flow from investing activitiesInvestment in fixed assets 44 –693 –Investment in associated companies 43 –4,844 –Investment in subsidiaries 42 –6,326 –180,614Divested subsidiaries – 152,563Divestment / amortisation of financial assets – 53,000Change in other financial assets 45 353 –264Total cash flow from investing activities –11,510 24,685

Cash flow from financing activitiesNew share issue 19,600 33,997Group contribution paid –18,416 –2,894Newly raised current loan 48 12,917 –Amortisation of loan 48 –3,102 –Change in current financial liabilities – –7,270Total cash flow from financing activities 10,999 23,833

TOTAL CASH FLOW 5,768 –616

Liquid assets at start of year 4 620Liquid assets at year-end 5,772 4

1) Overseas withholding tax.


parent Company's Cash flow statements

35 DISTRIBUTION OF INCOME (SEK ‘000)

2014 2013

Internal services 6,602 10,510Assignments for customers 8,358 22,664Licence revenue, Fujian Opcon Energy Technology Co., Ltd. 29,110 –Total 44,070 33,174

36 OPERATING EXPENSES (SEK ‘000)

2014 2013

Exchange rate differencesOperating profit / loss includes exchange rate differences concerning operating receivables and liabilities 418 –9Operational leasing contractsNominal value of future leasing fees concerning non-revocable leasing contractsYear's leasing fees 893 1,429Future leasing fees within one year 525 625Future leasing fees 1-5 years 712 331Total 2,548 2,376

Remuneration to auditorsPwC– Auditing assignment 2,100 347– Other services – –Total 2,100 347

37 DEPRECIATION (SEK ‘000)

2014 2013

Depreciation included in administration costs 145 217Total depreciation 145 217


notes, parent Company

The Parent company’s annual accounts have been prepared in accordance with the Swedish Annual Accounts Act and RFR 2 ‘Reporting for legal entities’. RFR 2 prescribes that in its annual report the parent company shall apply International Financial Reporting Standards (IFRS) as adopted by the EU, to the extent that this is possible within the framework of the annual accounts act and the Swedish law safeguarding pension commitments, and with consideration to the connection be-tween accounting and taxation. The recommendation indicates exceptions from IFRS and additions to them. The parent company consequently applies the princi-ples presented in note 1 to the consolidated accounts, with exceptions as stated below. The principles have been applied consistently for all years presented, unless otherwise stated.

IncomeThe parent company invoices the subsidiaries for distributed expenses and services, and also invoices in individual cases end-customers when the parent company is party to the agreement.

Employee benefitsThe parent company only has defined-contribution pension plans. The company pays contributions to publicly or privately administered pension plans on a manda-tory, contractual or voluntary basis. The company has no further payment obliga-tions when the fees are paid. The contributions are recognized as employee benefit expenses when they fall due. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in future payments may be credited to the company. The interest portion of the annual pension cost is recognized under financial costs. Other pension costs are charged to operating profit. Benefits, such as company car, are recognized as staff costs.

DepreciationThe parent company has office equipment and other inventories which are depreci-ated over 3-9 years depending on the type of equipment and intended utilisation period. Short-term inventories, with utilisation periods of less than 3 years, are capi-talised upon acquisition.

Shares and participations in subsidiariesShares and participations in subsidiaries are reported in the parent company us-ing the purchase method after deductions for any impairment. The purchase value includes costs relating to the acquisition and any additional amounts. Received divi-dends are reported as financial income. Group contributions paid are reported as a cost in the income statement.

If there is an indication that shares and participations in subsidiaries have fallen in value, an assessment is made of the recoverable value. If this is lower than the reported value, an impairment is executed.

Participations in joint venturesParticipations in joint ventures/associated companies are reported using the pur-chase method after deductions for any impairment. The purchase value includes costs relating to the acquisition and any additional amounts. Received dividends are reported as financial income.

If there is an indication that shares and participations in joint ventures / associ-ated companies have fallen in value, an assessment is made of the recoverable value. If this is lower than the reported value, an impairment is executed.

Leased assetsAll leasing agreements in the parent company are reported according to rules for operational leasing.

Pledges and financial guaranteesThe parent company has signed pledges in favour of subsidiaries. This form of ob-ligation is classified under IFRS as a financial guarantee contract. For these agree-ments the parent company applies the relief rule in RFR 2 [IAS39], and thus reports the pledge as a contingent liability. When the company considers that a payment is probably required to settle a commitment, a provision is made.

34 ACCOUNTING AND ASSESSMENT PRINCIPLES (SEK ‘000)

Deferred taxDue to the relationship between accounting and taxation, the deferred tax liability on untaxed reserves is reported in the parent company as part of untaxed reserves.

Group contribution Received and paid Group contributions are reported as financial income and ex-penses respectively in the income statement.

2014 2013

Average no. of employees, divided betweenmen and womenWomen 6 4Men 7 6Parent company total 13 10

Salaries and other benefits (SEK '000)Board, CEO and deputy CEOs 6,575 5,704Other employees 4,369 3,868Total salaries and other benefits 10,944 9,572

Social security costs (SEK '000) 4,050 3,599Pension costs for CEOs, deputy CEOs and other senior executives 1,746 1,615Pension costs, other employees (SEK '000) 487 383Total salaries, other benefits, social security costs and pensions (SEK '000) 17,227 15,169



38 AVERAGE NUMBER OF EMPLOyEES, SALARIES, OTHER BENEFITS AND SOCIAL SECURITy COSTS

Pension expenses refer to expenses that affect the year’s profit/loss. The pension premium for the CEO amounts to 35% of the pension-based salary. Pension premi-ums for other senior executives amount to between 20-35% of the pension-based salary.

The retirement age for the CEO and other senior executives is 65.

Terms of dismissalThe company must give the CEO 18-24 months’ notice of dismissal, while the CEO must give the company six months’ notice. No redundancy payments will be made in addition to normal salary during the notice period.

For other senior executives, the company must give between 6-18 months’ no-

Remuneration and other benefits Basic salary/ Other Pension Share-related Other Totalin 2014 (SEK) Board fee benefits costs remuneration remuneration

Chairman of the Board, Bill Tunbrant 150,000 – – – – 150,000Board member Kenneth Eriksson 100,000 – – – – 100,000Board member Mats Gabrielsson 100,000 – – – – 100,000Board member Bengt E Johnson 100,000 – – – – 100,000Board member Wendy Lin 100,000 – – – – 100,000CEO, parent company, and Board member Rolf Hasselström 2,753,400 84,580 853,229 – – 3,691,209Deputy CEO, Niklas Johansson 1,362,286 45,648 229,929 – – 1,637,863Deputy CEO, Claes Palm 978,800 69,000 484,243 – – 1,532,043Other senior executives (1 individual) 930,372 255,074 178,312 – – 1,363,758

Remuneration and other benefits Basic salary/ Other Pension Share-related Other Totalin 2013 (SEK) Board fee benefits costs remuneration remuneration

Chairman of the Board, Bill Tunbrant 150,000 – – – – 150,000Board member Ulf Ahlén 100,000 – – – – 100,000Board member Kenneth Eriksson 100,000 – – – – 100,000Board member Mats Gabrielsson 100,000 – – – – 100,000Board member Bengt E Johnson 100,000 – – – – 100,000CEO, parent company, and Board member Rolf Hasselström 2,754,000 82,980 946,009 – – 3,782,989Deputy CEO, Göran Falkenström 1,261,866 102,840 355,520 – – 1,720,226Deputy CEO, Niklas Johansson 1,337,932 43,920 313,455 – – 1,695,307Other senior executives (1 individual) 814,636 55,900 – – – 870,536

tice of dismissal, while senior executives must give the company three to six months’ notice. No redundancy payments will be made in addition to normal salary during the notice period.

Procedures The parent company’s Board of Directors has authorised the Chairman of the Board to set salary and remuneration for the CEO.

Salary and remuneration for other senior executives are set by the parent com-pany’s Managing Director and the CEO and chairman of the Board of the subsidiary in question.

Remuneration to senior executivesPrinciplesRemuneration to the Chairman of the Board and to Board members is determined by a vote at the Annual General Meeting. No specific fees are paid for committee work.

Remuneration to the CEO and other senior executives comprises a basic sal-ary, other benefits (company car) and pension. There are no bonuses or variable compensation.

Pension benefits and other benefits to the CEO and other senior executives are a part of the total remuneration package.

39 TRANSACTIONS WITH RELATED PARTIES (SEK ‘000) 2014 2013

The following transactions were carried outwith related partiesMind Finance AB, interest and fees for loans and factoring 141 –Rolf Hasselström, salary and other benefits 3,691 3,783Mats Gabrielsson, Board fee 100 100Closing balance at year-endLiability to related partyGabrielsson Invest AB 12,917 –

Related partiesThe owner of Mind Finance AB is Gabrielsson Invest AB, which is owned by Mats Gabrielsson, a major shareholder and the chairman of the Board of Opcon.

Rolf Hasselström is CEO of Opcon and a major shareholder. All transactions with related parties are carried out on market terms.

40 PROFIT / LOSS FROM FINANCIAL ITEMS (SEK ‘000)

2014 2013

Profit / loss from other securities that are fixed assets Financial incomeInterest income – 593Interest income, Group companies 7,260 7,220Total financial income 7,260 7,813

Financial expensesInterest expenses –516 –5,864Total financial expenses –516 –5,864

41 TAX ON PROFIT FOR THE yEAR (SEK ‘000)

2014 2013

Difference between tax expense and tax expense based on current tax rateReported profit / loss before tax 32,278 –15,591Tax according to current tax rate –7,101 3,430Tax effect of non-deductible costs –19 –3Tax deficit for which deferred tax is not utilised – –3,427Utilised as yet not recognised tax deficit 7,120 –Tax according to profit / loss statements 0 0

Tax rateThe current tax rate is 22%.

Temporary differencesTemporary differences arise when the recorded value of assets or liabilities is dif-ferent to the tax value. Temporary differences regarding the following items haveresulted in deferred tax liabilities and deferred tax receivables.

2014 2013

Deferred tax receivablesRegarding deficit deduction 35,969 35,969Closing value, deficit deduction 35,969 35,969Total deferred tax receivables 35,969 35,969

Deferred tax receivables and tax liabilities are offset when there is legal justification for the receivables and liabilities in question, and when deferred tax relates to the same tax authority.

It is the assessment of the company that the business plans established for the company in future years provide sufficient justification for the deferred tax reported on the balance sheet. In addition there are temporary differences for which deferred tax receivables are not reported.

The total value of deferred tax receivables amounted to SEK 69.7 million.



Participations in subsidiaries (SEK ‘000) 2014 2013

Opening acquisition value 391,696 363,645Change for the year – Acquisition of participations – 180,614– Sale of participations – –152,563Closing accumulated acquisition value 391,696 391,696

Opening write-ups / impairment –146,072 –146,072

Change for the year– Write-ups – 49,419– Impairment – –49,419Closing accumulated impairment –146,072 –146,072Closing reported value 245,624 245,624

45 OTHER LONG-TERM RECEIVABLES (SEK ‘000)

2014 2013

Opening acquisition value 40,674 95,010Additional receivables – 264Closing receivables –354 –Closing accumulated acquisition value 40,320 95,274

Divestments – –54,600Closing residual value according to plan 40,320 40,674



42 PARTICIPATIONS IN SUBSIDIARIES

Within Opcon Group Co. reg. no. Reg. office Participation (%)

Directly ownedOpcon Energy Systems AB 556478-6704 Stockholm, Sweden 100Svenska Rotor Maskiner AB 556350-1393 Stockholm, Sweden 100Boxpower AB 556533-8141 Stockholm, Sweden 100Boxpower International AB 556802-1660 Stockholm, Sweden 100 Opcon Inc. USA 100Saxlund International Holding AB 556952-2088 Stockholm, Sweden 100

Indirectly ownedSaxlund Corporation USA 90Saxlund International GmbH Germany 100Saxlund International Ltd. The UK 100Opcon GmbH Germany 100Svensk Rökgasenergi AB 556701-4740 Stockholm, Sweden 100Saxlund Bioenergy AB 556556-3961 Stockholm, Sweden 100

Parent company Capital, % Votes, % No. of shares Book value, SEK '000

Opcon Energy Systems AB 100 100 10,000 73,229Svenska Rotor Maskiner AB 100 100 45,000 10,000Boxpower AB 100 100 33,971,802 9,682Boxpower International AB 100 100 1,000 100Opcon Inc. 100 100 1,000 –Saxlund International Holding AB 100 100 153,063 152,613Total 245,624

43 PARTICIPATIONS IN ASSOCIATED COMPANIES

2014 2013

Participations in Fujian Opcon Energy Technology Co., Ltd. from sold licences for Opcon Powerbox 56,554 –Costs for establishing joint venture 4,844 –Total 61,398 –

As payment for transferred licensing rights concerning Opcon’s proprietary technol-ogy, Opcon Powerbox, the Opcon Group received 48.98% of the shares in Fujian Opcon Energy Technology Co., Ltd. Further, acquisition-related expenses of SEK 4.8 million were capitalised as an acquisition expense for the participation.

The remaining shares in the company are held by Fujian Snowman Co., Ltd. The associated company is registered in China and will conduct business on markets in Asia. The capital share method was used to value the participation.

44 INVENTORIES, TOOLS AND INSTALLATIONS (SEK ‘000)

2014 2013

Opening acquisition value 2,031 2,031Acquisitions for the year 693 –Closing accumulated acquisition value 2,724 2,031

Opening depreciation –1,760 –1,543Change for the year – Depreciation –145 –217Closing accumulated depreciation –1,905 –1,760Closing residual value acc. to plan 819 271

46 PREPAID COSTS AND ACCRUED INCOME (SEK ‘000)

2014 2013

Prepaid rents – 88Insurance premiums – 38Other items 170 529Total 170 655



SharesNumber of shares Total number

Number on 1 January 2013 297,885,276 New share issue 12,087,454New share issue 34,441,415Number on 31 December 2013 344,414,145 New share issue 30,000,000 New share issue 4,385,965 Number on 31 December 2014 378,800,110

Opcon’s Board with the support of the authorization given by the 2013 Annual General Meeting performed a private placement to Hong Kong Snowman Technol-ogy Ltd. of 30,000,000 shares in Opcon at SEK 0.57 per share.

The total number of shares after these two share issues is 374,414,145.Also with the support of the authorization given by the 2013 Annual General

Meeting, Opcon’s Board directed a private placement of 4,385,965 shares at SEK

51 CONTINGENT LIABILITIES (SEK ‘000)

2014 2013

Securities for subsidiaries 37,826 53,745Total contingent liabilities 37,826 53,745

Securities for subsidiaries consist of commitments for various guarantees, e.g. for completion, warranty period, advances, etc. This amount includes commitments in the form of guarantees for the subsidiaries’ various guarantee commitments to guarantors such Nordic Guarantee and other financial institutions.

49 ACCRUED EXPENSES AND PREPAID INCOME (SEK ‘000)

2014 2013

Accrued salaries 4 23Accrued holiday pay 2,347 2,375Accrued payroll overheads 787 754Accrued interest 40 –Other items 3,674 612Total 6,852 3,764

48 BORROWINGS, INTEREST (SEK ‘000)

2014 2013

Current loans 12,917 3,102Total interest-bearing liabilities 12,917 3,102

The liability as of 31 December 2014 is fully a debt to Gabrielsson Invest AB.

50 PLEDGED SECURITIESAs of 31 December 2014 there were no pledged securities.

No. of shares Ordinary shares Share premium Own shares Total (SEK '000) (SEK '000) (SEK '000) (SEK '000)

1 January 2013 297,885,276 372,357 322,534 – 694,891New share issue 12,087,454 15,109 –7,977 – 7,132New share issue 34,441,415 43,052 –16,188 – 26,86431 December 2013 344,414,145 430,518 298,369 – 728,887New share issue 30,000,000 37,500 –20,400 – 17,100New share issue 4,385,965 5,482 –2,982 – 2,50031 December 2014 378,800,110 473,500 274,987 – 748,487

The total number of ordinary shares is 378,800,110 (2013: 344,414,145). The nominal value of shares is SEK 1.25. All issued shares have been fully paid.In two directed placements in 2013, a total of 46,528,869 shares were issued at a nominal value of SEK 1.25. In 2014 two directed placements of a total of 34,385,965 new shares were issued at a nominal value of SEK 1.25.

47 SHAREHOLDERS' EQUITy

0.57 per share to GEM Global Yield Fund LimitedThe total number of shares after these two share issues is 378,800,110. These

two share issues raised a total of SEK 19.6 million before costs.In accordance with the agreement with GEM, Opcon has issued 2.2 million buy

options with a subscription price of SEK 24 and a period running until 3 May 2016. The options have been subscribed and allocated to GEM Global Yield Fund Ltd. The options will be recalculated after the new share issues have been completed.

At the 2014 AGM it was decided to establish two further options schemes for senior executives and Board members. The scheme involves 2,500,000 options for senior executives and 1,750,000 for directors. The options have been subscribed by, and allocated to, Opcon’s subsidiary, SRM, to be passed on to senior executives and Board members. No options have been transferred yet.

The Board of Directors has also received previous authorization to issue option programs for senior executives and directors. No options in the programs have been transferred. These programmes have since been replaced by those decided at the 2014 AGM.


signatures of the board and Ceo

Bill Tunbrant Rolf Hasselström Chairman of the Board President and CEO, Board member

Kenneth Eriksson Mats Gabrielsson Board member Board member

The Board and President certify that the consolidated accounts have been prepared in accordance with the international account-ing standards, IFRS, as adopted by the EU and give a true and fair view of the financial position and results for the Group. The annual accounts have been prepared in accordance with generally accepted accounting principles and give a true and fair view of the parent

company’s financial position and results.The Report of the Directors for the Group and the parent com-

pany provides a fair review of the operations, financial position and results of the Group and the parent company and describe the principal risks and uncertainties facing the parent company and the companies included in the Group.

Our report deviates from the standard format and was submitted on 7 May 2015.

PricewaterhouseCoopers AB

Bo HjalmarssonAuthorised Public Accountant

Bengt E Johnson Wendy Lin Board member Board member

Mats SundströmEmployee representative (deputy), Engineer union

The Profit and loss statements and Balance sheets will be presented to the Annual General Meeting on 7 May 2015.

The Board of Directors of Opcon AB

Stockholm, 7 May 2015


auditors’ report

To the general meeting of the shareholders of Opcon AB Corporate identity number 556274-8623

Report on annual accounts and consolidated accounts

We have audited the annual accounts and the consolidated accounts of Opcon AB for the 2014 financial year. The company’s annual report and the consolidated accounts are included in the printed version of this document on pages 20-55.

Responsibility of the Board of Directors and CEO for an-nual accounts and consolidated accounts

The board and the CEO are responsible for the preparation of an annual report that gives a true and fair view according to the Annual Accounts Act and consolidated accounts which give a true and fair view in ac-cordance with International Financial Reporting Standards as adopted by the EU, and the Annual Accounts Act, and for internal control that the Board of Directors deems necessary to produce annual accounts and consolidated accounts that are free of material misstatement, whether due to fraud or error.

The auditor’s responsibility Our responsibility is to express an opinion on the annual accounts and consolidated accounts based on our audit. We conducted our audit in accordance with International Standards on Auditing and good auditing standards in Sweden. These standards require that we comply with ethi-cal requirements and plan and perform the audit to obtain reasonable assurance that the annual accounts and the consolidated accounts are free of material misstatement.

An audit involves collection in various ways of verifiable evidence about the amounts and disclosures in the annual accounts and the consolidat-ed accounts. The auditor selects the action to be performed, including assessing the risks of material misstatements in annual accounts and the consolidated accounts, whether due to fraud or error. In this risk assess-ment the auditor takes into account the parts of the internal controls that are relevant for how the company establishes its annual accounts and the consolidated accounts to give a true and fair view in order to establish audit procedures that are appropriate in the circumstances; but not for the purpose of expressing an opinion on the effectiveness of the company’s internal controls. An audit also includes an assess-ment of the appropriateness of the accounting principles used and the reasonableness of the Board of Directors’ estimates in the report, as well as evaluating the overall presentation of the annual accounts and the consolidated accounts.

We believe that the audit evidence we have obtained is sufficient and appropriate as the basis for our opinion.

Statements In our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act and in all material respects provide an accurate picture of the parent company’s financial position as at 31 De-cember 2013 and of its financial performance and cash flows for the year in accordance with the Annual Accounts Act, and that the con-solidated accounts have been prepared in accordance with the Annual Accounts Act and in all material respects provides an accurate picture of the Group’s financial position as at 31 December 2014 and of its results and cash flows in accordance with international accounting standards, as adopted by the EU, and the Annual Accounts Act.

The Directors’ Report is consistent with the annual accounts’ and con-solidated accounts’ other parts.

We recommend therefore that the Annual General Meeting adopt the income statements and balance sheets of the Parent Company and of the Group.

Significant disclosureWithout prejudice to our opinion above, we would like to draw attention to the statement of the Board and CEO, in the Directors’ Report and the disclosures in note 3, concerning the company’s financing situation. At the end of 2014 the Group’s liquid assets were around SEK 23 million. To handle short-term liquidity requirements, the company is reviewing its financing structure. It is our opinion that it is important that these planned measures, as necessary are carried out to secure the company’s operating capital financing and continued operation. Report on other requirements under laws and regulations In addition to our audit of the financial statements, we have also checked the proposed appropriation of the profit or loss and the administration of the Board and Managing Director of Opcon AB for 2014.

Board and Chief Executive Officer’s responsibility The Board is responsible for the proposal for the appropriation of the company’s profit or loss, and it is the Board of Directors and CEO who are responsible for the management of the business in accordance with the Annual Accounts Act.

The auditor’s responsibility Our responsibility is to reasonably express an opinion on the proposal for the appropriation of the profit or loss and the management of the company based on our audit. We conducted our audit in accordance with generally accepted auditing practices in Sweden.

As a basis for our opinion on the Board’s proposal for appropriation of the company’s profit, we examined whether the proposal complies with the Annual Accounts Act.

As a basis for our opinion concerning discharge of responsibility, we have, in addition to our audit of the annual accounts and the consolidat-ed accounts examined significant decisions, actions and circumstances within the company to determine whether any director or chief execu-tive has a liability to remunerate the company. We also examined wheth-er any board member or CEO in any other way acted in contravention of the Annual Accounts Act, Companies Act or Articles of Association.

We believe that the audit evidence we have obtained is sufficient and appropriate as the basis for our opinion.

StatementsWe recommend that the Annual General Meeting use the profit in ac-cordance with the proposal in the Directors’ Report and that board members and the CEO are discharged from liability for the fiscal year.

CommentWithout prejudice to our opinion above, we wish to note that taxes and fees were not paid on time on two occasions. This default has not caused any harm to the company in addition to late-payment charges.

Our Auditors’ report was submitted on 7 May 2015PricewaterhouseCoopers AB

Bo HjalmarssonAuthorised Public Accountant

(For definitions, see page 59)

PROFIT AND LOSS STATEMENT (SEK 000) 2014 2013 20121 20111 2010

Net sales 266,156 275,026 316,852 367,388 612,822Operating profit before depreciation 29,865 –40,250 –83,001 –58,892 24,850Depreciation of tangible fixed assets –3,464 –5,251 –11,024 –15,757 –26,866Depreciation and impairment of intangible fixed assets and inventories –8,118 –6,566 –92,401 –9,764 –5,707

Operating profit / loss 18,283 –52,067 –186,426 –84,413 –7,723Financial items –4,757 –9,740 –20,712 –10,255 –8,874Profit / loss after financial items 13,526 –61,807 –207,138 –94,668 –16,597Tax –509 – –41,384 24,758 24,640Profit / loss for remaining business 13,017 –61,807 –248,522 –69,910 8,043

Profit / loss from decommissioned and discontinued business –19,748 –2,285 95,559 17,695 0

Profit / loss for the year –6,731 –64,092 –152,963 –52,215 8,043

Profit/loss for the period attributable to parent company shareholders –6,731 –64,092 –152,963 –55,064 5,593Profit/loss for the period attributable to minority interest 0 0 0 2,849 2,450

1) Figures for 2012 och 2011 do not include divested business (Engine Efficiency).

BALANCE SHEET (SEK ‘000) 2014 2013 2012 2011 2010

Intangible assets 306,044 300,588 292,920 359,151 334,468Tangible assets 13,877 13,308 18,872 84,894 103,702Financial assets 103,590 83,535 142,244 110,909 95,843Total fixed assets 423,511 397,431 454,036 554,954 534,013

Securities 255 512 1,603 4,690 10,363Inventories 62,727 69,895 118,295 140,559 122,546Accounts receivable – trade 46,706 45,327 54,456 125,626 104,967Other current assets 71,556 75,050 97,108 68,010 73,579Liquid funds / short-term investments 22,967 17,853 17,113 26,973 21,219Total current assets 204,211 208,637 288,575 365,858 332,674Assets, business held for sale – – – – –Total assets 627,722 606,068 742,611 920,812 866,687

Shareholders’ equity 473,143 456,207 485,018 569,453 513,543Minority shares – – – 1,331 10,533Interest-bearing liabilities 20,322 3,672 15,235 138,057 151,860Deferred tax 12,080 12,876 12,876 4,742 4,742Current non-interest-bearing liabilities 122,177 133,313 229,482 207,229 186,009Total liabilities and equity 627,722 606,068 742,611 920,812 866,687

KEY INDICATORS 2014 2013 2012 2011 2010

Data per shareProfit / loss per share, for remaining business, SEK 0.03 –0.19 –1.16 –1.31 0.22Equity per share, SEK 1.28 1.38 1.63 4.37 20.41Dividend per share, SEK 0 0 0 0 0Average no. of shares (‘000) 370,872 331,085 131,569 41,905 24,980Total no. of shares at year end (‘000) 378,800 344,414 297,855 130,171 25,159


five-year summary of the group

SHAREHOLDERS’ EQUITY AND RATIOS (SEK 000) 2014 2013 2012 2011 2010

Shareholders’ equity 473,143 456,207 485,018 569,453 513,543Net financial debt –22,705 –14,181 –1,878 111,084 130,641Operating capital 470,498 442,026 483,140 681,868 654,717Return on equity, % 2.8 –13.1 –47.1 –12.8 1.6Return on operating capital, % 4.0 –11.3 –32.0 –12.6 –1.3Return on total capital, % 3.0 –7.6 –22.3 –8.9 –0.8Gross margin, % 11.2 –14.6 –26.2 –16.0 4.1Operating margin, % 6.9 –18.9 –58.8 –23.0 –1.3Profit margin, % 5.1 –22.5 –65.4 –25.8 –2.7Equity/assets ratio, % 75.4 75.3 65.3 58.5 60.5Proportion of risk-bearing capital, % 77.3 77.4 67.0 62.5 61.0Interest cover, x 3.80 –4.84 –8.66 –6.60 –0.73Debt gearing, % 4.3 0.8 3.1 24.2 29.6R&D costs 17,586 26,409 43,263 70,069 96,604 of which capitalised 4,571 11,908 24,464 33,799 66,711

CASH FLOW (SEK 000) 2014 2013 2012 2011 2010

Cash flow from current activities –30,153 –52,508 –90,124 –36,653 5,577Change in operating capital 7,283 –15,302 35,907 –4,508 –51,686Cash flow from investment activities –9,942 47,184 15,602 –65,005 –19,584Cash flow from financing activities 36,040 21,396 28,659 115,891 33,547Cash flow, net 3,228 770 –9,956 9,725 –32,146

DATA PER EMPLOYEE (SEK 000) 2014 2013 2012 2011 2010

Average number of employees 145 151 154 181 425Sales per employee1, SEK ‘000 1,835 1,821 2,057 2,028 1,442Operating profit per employee SEK ‘000 126 –345 –1,210 –466 –18

1) Sales do not include divested business (Engine Efficiency) for 2012 and 2011.


five-year summary of the group, Continued


definitions / addresses

Average number of sharesThe average number of shares during the year, adjusted for bonus issue and split.

Debt/equity ratioClosing interest-bearing liabilities, in relation to closing shareholders’ equity.

Earnings per shareProfit/loss for the year, in relation to the average number of shares.

Equity / assets ratioClosing shareholders’ equity, including minority shareholdings, as a per-centage of the closing total capital calculated for remaining business.

Equity per shareClosing shareholders’ equity, in relation to the average number of shares.

Financial net debtInterest-bearing provisions and liabilities minus liquid funds and current investments.

Gross marginOperating profit / loss plus depreciation and impairment, as a percent-age of net sales.

Interest coverage ratioProfit / loss after financial items plus financial expenses, as a percentage of finance costs.

Net investmentsInvestments in fixed assets minus sold fixed assets.

Operating capitalCurrent assets, excluding liquid funds and current investments minus current noninterestbearing liabilities.

Operating marginOperating profit / loss, as a percentage of net sales.

Profit marginProfit / loss after financial items as a percentage of net sales.

Research and development costsTotal research and development costs, including costs written off as well as capitalised research and development costs.

Return on operating capitalOperating profit / loss as a percentage of the average opening and clos-ing operating capital.

Return on shareholders’ equityProfit / loss for the year as a percentage of the average opening and closing shareholders’ equity.

Return on total capitalProfit / loss after financial items plus financial costs, as a percentage of the average opening and closing balance sheet total.

Sales per employeeNet sales, in relation to the average number of employees.

Share of risk-bearing capitalClosing shareholders’ equity, including minority shareholdings, plus deferred tax liability, as a percentage of the closing total capital.

Working capitalCurrent assets, excluding liquid funds and current investments, minus current noninterest-bearing liabilities.

Opcon ABP.O.Box 15085, SE-104 65 StockholmTel: +46 (0)8 466 45 00email: [email protected]

Svenska Rotor Maskiner AB (SRM)P.O.Box 15085, SE-104 65 StockholmTel: +46 (0)8 466 45 00Fax: +46 (0)8 466 45 01email: [email protected]

Opcon Energy Systems AB (OES)P.O.Box 15085, SE-104 65 StockholmTel: +46 (0)8 466 45 00email: [email protected]

Boxpower ABP.O.Box 15085, SE-104 65 StockholmTel: +46 (0)8 466 45 00email: [email protected]

Svensk Rökgasenergi (SRE)P.O.Box 15085, SE-104 65 StockholmTel: +46 (0)8 580 873 00Fax: +46 (0)8 466 45 01email: [email protected]

Saxlund International Holding ABP.O.Box 15085, SE-104 65 StockholmTel: +46 (0)8 504 105 80 email: [email protected]

Saxlund Bioenergy AB (SAX)P.O.Box 15085, SE-104 65 StockholmTel: +46 (0)8 504 105 80 email: [email protected]

Saxlund International GmbHHeidberg 1, 4-5D-29614 SoltauTel: +49 5191 9811 0Fax: +49 5191 9811 39email: [email protected]

Saxlund International Ltd.11 Freemantle Business CentreMillbrook Road EastSouthampton, Hampshire, UKSO15 1JRTel: +44 2380 636330Fax: +44 2380 636343email: [email protected]

Värmlands Montage Teknik AB, HagforsBryggarevägen 6, SE-683 33 HagforsTel: +46 (0)563 145 25, +46 (0)70 545 39 75email: [email protected]

Opcon AB (publ) P.O.Box 15085, SE-104 65 Stockholm, Sweden

+46 (0)8 466 45 00, [email protected]

OPCON, THE ENERGY AND ENVIRONMENTAL TECHNOLOGY GROUP, IS MAKING AN ACTIVE CONTRIBUTION TO THE GLOBAL DEVELOPMENT

TOWARDS A MORE ENERGY-EFFICIENT AND ECO-FRIENDLY SOCIETY

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