CONTENTS OPCON GROUP IN BRIEF OPCON S BUSINESS CONCEPT OPCON S OBJECTIVES OPCON S VISION in brief 3. Key dates in

Transcription

1 ANNUAL REPORT 2013

2 contents CONTENTS 2013 in brief 3 Key dates in CEO s statement 5 Opcon s organization 6 Opcon Group in Waste Heat Recovery: SRM 8 Waste Heat Recovery: Opcon Powerbox 11 Opcon Marine 12 Bioenergy: Saxlund & SRE 13 Service, installation and aftermarket 16 Opcon in 2014 and beyond 17 Corporate governance report 20 Board of Directors 23 Senior executives and auditors 24 Auditor s statement on corporate governance 25 Directors report 26 Consolidated income statements 29 Consolidated balance sheets 30 Changes in consolidated shareholders equity 32 Consolidated cash flow statements 33 Notes, Group 34 Parent company s income statements 51 Parent company s balance sheets 52 Changes in parent company s shareholders equity 53 Parent company s cash flow statements 53 Notes, Parent company 54 Signatures of the Board and President 59 Auditors report 60 5-year summary 61 Definitions 63 Addresses 63 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, electricity 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 condensation, treatment of flue gases and air systems for fuel cells. Opcon has activities in Sweden, Germany and the UK. There are around 150 employees. The company s shares are listed on Nasdaq OMX Stockholm. OPCON S BUSINESS CONCEPT Opcon 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 OBJECTIVES The 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. OPCON S VISION Opcon s vision is to be actively involved in building a society beyond oil dependency. With high-technology products and services Opcon will actively contribute to global development towards a more energyeffective and eco-friendly society. 2 OPCON ANNUAL REPORT 2013

3 2013 in brief & important events after the end of the period / calendar IN BRIEF Sales for remaining business were SEK million (316.9 m). Operating earnings (EBIT) for remaining business were SEK 52.7 million ( m). The loss after tax was SEK 62.5 million ( m). Earnings per share attributable to parent company shareholders were SEK 0.19 ( 1.89). Swedish Rotormaskiner (SRM ) signed a development agreement with the refrigeration technology company Snowman of China, for the development of a modern, high-pressure compressor for eco-friendly industrial pumps, based on SRM s innovative and proven compressor technology. Fujian Snowman Co., Ltd., China, acquired a ten percent share in Opcon after taking a private placement of 34,441,415 shares in Opcon at SEK 0.78 per share. The deal lays the foundation for continued development of strategic cooperation to take Opcon s technology into the Chinese market. As part of efforts to strengthen the company s financial position Opcon performed a directed issue of 12,087,454 shares at SEK 0.59 per share to GEM Global Yield Fund Limited. Bill Tunbrant, former member of Opcon Board of Directors, was elected by the AGM as new chairman of Opcon. Bill Tunbrant has broad business experience in China, among other areas. Enerji installs it's first Opcon Powerbox in Australia. Opcon s wholly owned subsidiary, Saxlund International GmbH, won an order worth SEK 25 million for material handling equipment to E.ON s new biomass power plant in Gardanne, France. The power plant will have an installed capacity of 125 MW and is the largest single biomass project so far in France. Opcon signed a contract with E.ON Värme Sverige AB for the installation of the company s new, steam-driven Opcon Powerbox WST-CU (Wet Steam Turbine Condensing Unit) at E.ON s district heating plants in Sollefteå for the production of sustainable electricity from one of two biomass boilers. The plant is expected to produce over 4 GWh of electricity per year. Commissioning is planned for summer Opcon signed an agreement to continue development and extend cooperation with MAN Diesel & Turbo SE. The agreement is the next step in the collaboration that began in 2011 and aims to exploit the opportunities available to combine Opcon s technology for energy efficiency and production of electricity from waste heat with MAN Diesel & Turbo s market-leading diesel engines for reduced fuel consumption and reduced emissions. To continue bringing the companies closer together, and after consultation with the Snowman, Opcon s Board co-opted Wendy Lin as a representative of Snowman on Opcon s Board of Directors. IMPORTANT EVENTS AFTER THE END OF THE PERIOD Opcon started a Group-wide programme to coordinate European activities within bioenergy to generate annual savings of SEK 30 million. Saxlund will be the umbrella organization for bioenergy activities with around 80 employees at operations in Sweden, Germany and the UK. Opcon conducted a private placement of 30,000,000 shares in Opcon at SEK 0.57 per share with Snowman of China that will strengthen the companies strategic cooperation in taking Opcon s technology to the Chinese market. As part of efforts to further strengthen the company s financial position Opcon directed a private placement of 4,385,965 shares at SEK 0.57 per share to GEM Global Yield Fund Limited. The total number of shares in Opcon after registration of this new issue and previous rights issues to the Snowman is 378,800,110. KEY DATES IN 2014 The Annual General Meeting will be held at 4 p.m. on 6 May 2014 at the IHM premises, Warfvinges väg 39, ground floor, Stockholm. Information about the conditions for participation at the meeting can be found at info/stämmor/ Årsstämma The Q1 report for 2014 will be published on 6 May 2014 The Q2 report for 2014 will be published on 26 August 2014 The Q3 report for 2014 will be published on 11 November 2014 OPCON ANNUAL REPORT

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5 CEO S COMMENTS A DEEPENING OF RELATIONS WITH CHINA IN FOCUS During the year our focus was on obtaining improvements in operating profit. Continued cost adjustments, a better purchasing structure and improved internal coordination produced results and established a platform for continuous improvement. Sizeable repayments of interest-bearing debt over the past 18 months have meant that the Group no longer has any long-term interest-bearing liabilities. Meanwhile, 2013 and the start of 2014 have seen liquidity tensions, and the underlying rate of improvement has not been strong enough to boost profits and cash flow sufficiently. Continued savings measures are therefore being implemented and I expect us to further reduce our overheads by an annual rate of around SEK 30 million, of which we will see around SEK 20 million achieved in In business terms, our internationalisation efforts have continued, and this has been an important reason why our operating margin in current business activities improved so considerably compared with A great focus has been on China and deepening our relationship with Fujian Snowman of China, which has emerged as one of the Group s most important customers in recent years. For Opcon, Snowman s involvement and the collaboration that has begun means that we expect to receive more development assignments from Snowman within the cooling compressor segment for a long time in the future. To further reinforce the partnership, Snowman became the second largest shareholder in Opcon in the spring of 2013 through a directed placement of shares. Snowman increased this shareholding at the start of We are also discussing expansion and the forms for cooperation in other areas of the Chinese market that interest Opcon. One such area is compressor technology/waste Heat Recovery and Opcon Powerbox. The development, industrialisation and internationalisation of Opcon Powerbox continues, with marine test operation progressing well. We have now gone through the expensive development phase to a large extent and are now entering the commercialisation phase. In Sweden, demand is being impacted negatively by currently low electricity prices. Markets with higher electricity prices outside Sweden will therefore have greater importance. Throughput periods for this type of business are long, however, which means that continuous marketing is decisive for success. Financing is also a crucial component for this business both in Sweden and abroad. We do expect to make significant steps forward in the commercialisation of Opcon Powerbox in 2014 which should include new orders. In bioenergy our situation improved during the year with both our German and UK operations reporting profits. There is still some way to go, however, and we are implementing further measures to strengthen the whole bioenergy business and turn our Swedish operation back into profit. Internationalisation is crucial in this regard. In the Baltic States the licensing business with Axis progressed very well during the year. We are also seeing more activity on other key markets such as the UK. In Sweden, too, the market is picking up although there is still intense competition, difficult conditions and a lack of financing, which is why we are looking to move resources into more promising markets. To boost results and cash flow and reduce the financial risk, Opcon has made a strategic decision to focus on smaller incineration plants, handling systems, flue gas condensers and the aftermarket. Better coordination of the European bioenergy business will create the conditions for more successful projects and greater profitability through coordinated purchasing. Even though risks remain, the turn-around has clearly begun during the year. With the additional measures now being taken and with new business deals we hope to make large steps forward in 2014 and return the company to profit. Stockholm 8 April 2014 Rolf Hasselström President and CEO OPCON ANNUAL REPORT

6 OPCON GROUP ORGANIZATION OPCON AB Stockholm, Sweden RENEWABLE ENERGY BUSINESS AREA COMPRESSOR TECHNOLOGY/ WASTE HEAT RECOVERY Primary business companies BIOENERGY Primary business companies SRM Svenska Rotor Maskiner AB Stockholm SAX Saxlund Bioenergy AB Stockholm OES Opcon Energy Systems AB Stockholm Saxlund International GmbH Germany Boxpower AB Stockholm Saxlund International Ltd. The UK SRE Svensk Rökgasenergi AB Stockholm Opcon has businesses in Sweden, Germany and the UK. 6 OPCON ANNUAL REPORT 2013

7 opcon GROUP in 2013 OPCON GROUP IN 2013 Sales for remaining business for the January- December period were SEK million (316.9 m). Operating earnings (EBIT) were SEK 52.7 million ( m). Operating earnings include non-recurring costs of a total SEK 28.5 million, of which SEK 20.8 million was in Q4 and SEK 7.7 million costs in Q2 for penalties and other delay costs in a large Swedish bioenergy project. The operating loss excluding non-recurring items was SEK 24.2 million ( 79.2 m). The loss after tax was SEK 62.5 million ( m). Earnings per share attributable to parent company shareholders were SEK 0.19 ( 1.89). As part of the work to achieve positive operating earnings for the Group a large savings programme is now being implemented. This savings programme is expected to achieve annual savings of around SEK 30 million. The effect in 2014 is estimated at around SEK 20 million. The programme will run across the entire Group in Sweden and abroad with the main focus within bioenergy. Three quarters of the programme is now being implemented, resulting in lower personnel costs, lower costs for external consultants, IT and administration and reduced financing costs. Even though sales and earnings improved, especially in the second half of the year, the investment cycle on European markets continued to be at a significantly lower level than before the financial crisis, while orders received remained weak. Higher licensing income from China The decisive factor behind the improvement in 2013 was the development within compressor technology/waste Heat Recovery where savings combined with sales on markets outside Europe were decisive. Sales have climbed strongly in India and not least China, where sales of compressor development for Fujian Snowman Co., Ltd. of China made an important contribution. In the year as a whole, sales of development for Snowman almost tripled and exceeded SEK 30 million. Opcon has acted as advisor in the construction of Snowman s new plant in Fuzhou, where limited production of compressors developed at SRM, Opcon s Center of Excellence, has now started. This means that Opcon expects to see the first licence revenues from Snowman to start flowing in 2014 as planned. Licence revenue from Snowman is also expected to grow gradually year on year and should exceed SEK 100 million over the coming ten years. The development, industrialisation and international expansion of Opcon Powerbox continues and an important agreement has been signed regarding the installation of Opcon Powerbox at E.ON s district heating plant in Sollefteå, Sweden. At the planned level of operation, the expected production at the plant is around 4 GWh of electricity per year with commissioning set for the summer of Progress has been made on the highly interesting Australian market where, after some delay, Enerji Ltd. has shown with its first installation of Opcon Powerbox in Australia that the plant performs as calculated. It is also clear that the new management team at Enerji is performing much better on sales, financing and cost-control than before and this success can have large significance for Opcon. Intensified collaboration with MAN On the marine side, tests have been delayed by the recession, meaning that the reference ship has mostly been operated at half capacity and the Opcon Powerbox ORC installation thereby could not be tested as planned during normal operation, which has also meant extending the tests into The tests of the Opcon Powerbox WST installation, which is not optimized in the same way for normal operation, have meanwhile been very good. With experience from the test installations, Opcon and world-leading engine producer MAN Diesel & Turbo have agreed to continue, develop and deepen the collaboration that the parties have initiated. New programme of measures Following the changes made at the start of the year, the situation in the bioenergy business has improved even though past history, previous problems and the tough competitive situation in Sweden continue to be a burden. Both the UK and German operations reported profits in Q4 and for 2013 as a whole. Further measures are now being taken to strengthen the complete bioenergy business and turn the Swedish operation back into profit. An extensive new programme of efficiency measures is now being implemented. Opcon s European bioenergy structure is being changed to reinforce synergies, reduce costs, achieve better coordination and boost sales. Resources are being concentrated more on the UK market and on a series of focus product areas and customer groups with key account managers working across boundaries. Meanwhile the strategic efforts continue to achieve more aftermarket business and fewer projects with shorter execution periods which will contribute to better cash flow and reduced risk. Bioenergy collected at Saxlund In Sweden where the bioenergy business has been weak even though there has been gradual improvement, additional measures are being taken that include reducing the focus in Sweden in favour of increased internationalisation. The number of Swedish subsidiaries in the bioenergy area is being cut, with Opcon Bioenergy AB being closed down after Saxlund Bioenergy AB has taken over the personnel and business. Opti Energi s workshop and office in Ängelholm are being closed. Administration in Sweden is being coordinated with Opcon s other Swedish business to achieve further efficiency. Saxlund will become comprehensively the core of the Group s focus on bioenergy both in Sweden and abroad. Internationally, the special sales office that Opcon Bioenergy established in France is being closed and instead the French market will be dealt with in terms of product areas and key account managers for Saxlund in Sweden, the UK and Germany, who have shown themselves to be more successful and much more costeffective. New partnerships are also being negotiated. Resources are also being assigned to develop the growing licensing business in the Baltic States, which in 2013 reported sales of around SEK 10 million with good margins. Further savings are being made regarding the management structure. Meanwhile the entire bioenergy business is being organised under one shared umbrella in Saxlund with subsidiaries and operations in Sweden, Germany and the UK with over 80 employees and over 50 years of experience in the industry. The efficiency measures will mean that nonrecurring costs of around SEK 13.2 million will affect results in OPCON ANNUAL REPORT

8 COMPRESSOR TECHNOLOGY / WASTE HEAT RECOVERY: SRM & OPCON S CENTER OF EXCELLENCE WORLD-LEADER FORMS BASE FOR OPCON S ENERGY AND ENVIRONMENTAL TECHNOLOGY Opcon s Center of Excellence, Svenska Rotor Maskiner (SRM) in Nacka, Sweden, is the world s leading technology development centre for screw compressor technology, screw compressors and screw expanders. Together with other Opcon companies and customers, SRM develops unique solutions and new types of compressors. One special competitive advantage is the possibility to manufacture in small series. SRM s solutions increase efficiency for industrial processes and often mean less environmental impact. Opcon s Center of Excellence offers: Leading development Calculations and engineering design Laboratory Quick time to market Production, including short-series production Prototype production Assembly and advanced test activity Global licence production Unique energy and gas handling systems A wide range of technical industrial service for compressors and gas handling systems SRM, Svenska Rotor Maskiner AB, now Opcon s Center of Excellence for compressor development, was formed in 1908 to develop a new invention, the twin-rotating steam turbine. For 106 years since 1908 SRM has played a crucial role in the Swedish and international development of a series of famous industrial products, especially twinrotating steam turbines, air pre-heaters, screw compressors and screw expanders. Around 90% of all screw compressors produced today across the world are made by companies that have received technology licences from Svenska Rotor Maskiner, SRM. MARKETS Oil & gas Petrochemicals Chemicals and plastics Industrial cooling Air supply for fuel cells Cars and aircraft SRM s screw compressor technology is the base for Opcon Powerbox ORC and Opcon Powerbox WST, which produce electricity from low-grade waste heat. Read more about Opcon Powerbox on page OPCON ANNUAL REPORT 2013

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10 COMPRESSOR TECHNOLOGY / WASTE HEAT RECOVERY: SRM & SNOWMAN Fujian Snowman Co. Ltd., a refrigeration technology company, has its main plant in Fuzhou, Fujian province in south east China. Snowman has built a new plant for manufacturing compressors developed by Opcon in Nacka, Sweden. Snowman sells its products under the brand Snowkey Ice Systems. COLLABORATION WITH SNOWMAN CONTINUES In 2013 the strategic collaboration between Opcon and Snowman, a Chinese listed company active in refrigeration technology, became increasingly closer. During the year Snowman became a 10% owner of Opcon, and following a directed issue of 30 million shares in February 2014 Snowman increased its ownership in Opcon further. A representative of Snowman, Wendy Lin, was co-opted onto the Opcon Board of Directors. Snowman has also built an entirely new plant for manufacturing compressors developed by Opcon. The assessment is that the future license revenues from Snowman s production in the period will exceed SEK 100 million. In 2013 alone, sales of compressor technology to Snowman tripled and were worth more than SEK 30 million. For Opcon, Snowman s commitment and the collaboration between the two companies means that Opcon expects to receive further compressor development assignments from Snowman over a long period as Opcon continues to strengthen its own capabilities. The trust developed by the two companies means that further expansion is being discussed in other areas where the Chinese market is of great interest for Opcon. One such example is Waste Heat Recovery and Opcon Powerbox. 10 OPCON ANNUAL REPORT 2013

11 COMPRESSOR TECHNOLOGY / WASTE HEAT RECOVERY: OPCON powerbox COMPLETE SYSTEMS FOR CARBON-FREE ELECTRICITY PRODUCTION FROM LOW-GRADE WASTE HEAT The energy for industrial processes, a large part of global electricity generation and incineration of waste, among other sectors, is not fully used. Instead a lot of energy becomes waste or surplus heat, which is only sometimes utilised and then not fully. In addition to energy losses and reduced system efficiency, additional electricity energy is required to cool down surplus heat. In process industries as much as 20-50% of the energy used is wasted. There are significant economic and environmental benefits if energy can be used more efficiently and waste heat can be recycled. In the US, it is calculated that available waste heat in industrial processes more than matches total electricity production from all renewable energy sources in the country. When discussing recycling of waste heat it is common to classify the heat by temperature, with high temperatures given higher value due to more energy being involved. Waste heat below around 230 C is usually seen in this context as low-value waste heat, because it cannot be converted to the same extent into electrical or mechanical energy. The base for Opcon s growth platform within energy and environmental technology has primarily been based on improved energy efficiency with a focus on technology that utilizes low-value waste heat. Based on its proprietary Lysholm turbine, Opcon develops, industrializes and commercializes two different systems for generating electricity: Opcon Powerbox ORC (Organic Rankine Cycle), which produces electricity from water at temperatures as low as 55 C, and Opcon MARKETS International marine Process industry and heavy industry Heating and power production Forest industry and biofuel Diesel generator and off-grid electricity Powerbox WST (Wet Steam Turbine), which produces electricity from saturated steam with no overheating, providing clear advantages compared with traditional turbines. E.ON s district heating plant in Sollefteå, Sweden, serves around 450 subscribers, mostly companies and apartment buildings, in central Sollefteå. After installation of Opcon Powerbox for production of electricity, the facility will become a CHP plant. E.ON INSTALLS OPCON POWERBOX E.ON Värme Sverige AB is installing Opcon s new, steam-driven Opcon Powerbox WST-CU (Wet Steam Turbine Condensing Unit) at E.ON s district heating plant in Sollefteå, Sweden, for the production of sustainable electricity from one of two biofuel-powered boilers. The plant is expected to produce over 4 GWh of electricity per year. The WST-CU model from Opcon includes, in addition to the turbine, a condenser module, where the steam after the expansion turbine is condensed into hot water at the desired temperature and utilised in the district heating network for increased efficiency. The deal, which converts the district heating plant to a cogeneration plant, is for engineering, procurement and construction (EPC). E.ON signed a three-year lease and has the option to purchase the facility. E.ON is also investing in a rebuild and adaptation of the district heating plant in Sollefteå to optimize it for electricity generation with Opcon Powerbox. Commissioning is planned for summer OPCON ANNUAL REPORT

12 COMPRESSOR TECHNOLOGY / WASTE HEAT RECOVERY: opcon marine ENHANCED ENERGY EFFICIENCY AND ELECTRICITY PRODUCTION FOR INTERNATIONAL SHIPPING One area where energy efficiency and electricity generation using Opcon Powerbox is of special interest is the international shipping sector, which today accounts for around 90% of world trade. Waste heat recovery is currently viewed as one of the most promising areas in shipping for reducing fuel consumption and carbon emissions. Opcon is currently concentrating efforts on the development and adaptation of its technology for electricity generation based on waste heat for marine applications, where the aim is to offer fuel savings of 5-10% and corresponding reductions in emissions. On top of its collaboration with Wallenius Marine, which included approval from Lloyd s Register in 2012 of the reference and test installations of two Opcon Powerboxes (one ORC and one WST), Opcon has also begun collaborating with MAN Diesel & Turbo SE regarding marine applications of Opcon Powerbox technology. This collaboration aims at exploiting opportunities to combine Opcon s technology for increased energy efficiency and production of electricity from waste heat with MAN Diesel & Turbo s market-leading diesel engines that reduce fuel consumption while cutting emissions. Using experience from the first two marine versions of Opcon Powerbox connected to a two-stroke MAN B&W 8S60ME-C engine onboard a Wallenius vessel, Opcon and MAN Diesel & Turbo reached agreement in 2013 to extend their collaboration. Opcon Powerbox is Opcon s proprietary product for generating new, carbon-free electricity primarily from waste heat and surplus heat at temperatures as low as 55 C, or from saturated steam. Opcon Powerbox can be installed in the process industry, combined heating and power plants, large diesel units or large ships and can produce up to 6,000 MWh per year. The first reference plant with both an Opcon Powerbox WST and an Opcon Powerbox ORC has been installed on board one of the new Wallenius LCTC vessels. Fuel savings are expected to amount to 4-6%, but the potential in other installations is expected to be 5-10%. 12 OPCON ANNUAL REPORT 2013

13 BIOENERGY: CO-GENERATION & BIOFUEL PLANTS Falbygdens Energi s new co-generation plant in Falköping, Sweden, for district heating and electricity generation, is the first plant in the Nordic region to use ORC technology for electricity production. The plant burns wood chips, bio-oil and briquettes. This investment is part of Falköping s efforts to become an ecologically sustainable municipality. Saxlund has supplied and installed equipment to the plant. CUSTOMISED SOLUTIONS ENSURE HIGHEST RELIABILITY MARKETS Co-generation plants Biomass & pellets industry Timber industry & sawmills Opcon s business in the bioenergy sector covers a wide range of product portfolios, with activities in Sweden, Germany and the UK. Under the Saxlund brand, Opcon offers everything from design of complete co-generation (combined power and heat) plants, to proprietary handling systems and incineration plants. Saxlund supplies first-class and well-tested incineration technology and can offer the customer a tailored solution of the highest quality that will ensure reliable operation and low life cycle costs. The incineration chamber is the heart of an energy system. Saxlund produces the most efficient and eco-friendly incineration system on the market. Plants that convert biofuel into energy must meet strict technical, environmental and economic requirements. Saxlund has extensive knowledge within the bioenergy industry and owns several patents for system designs. The market for pellets is expanding strongly across the globe. Saxlund is a leading supplier within pellets production, supplying everything from individual machines to Turn-Key plants. OPCON ANNUAL REPORT

14 BIOENERGY: MATERIAL HANDLING TECHNOLOGY LEADER IN MATERIAL HANDLING Saxlund has a broad range of products within material handling for bioenergy plants as well as recycling of ash, sludge and slag handling. Waste handling is a growing sector internationally, partly due to the reduced amount of waste being sent as landfill, with recycling and incineration preferred instead. Within Opcon s bioenergy business the company supplies market-leading handling systems under the Saxlund brand. Since it banned landfill at the start of the 21st century, Germany has led development of Waste to Energy solutions and Saxlund has established itself as the technology leader in sludge handling. Waste sludge is dried and used as biofuel for production of renewable energy. Saxlund is the also a prominent supplier in material handling and pellets production. E.ON s new bioenergy power plant in Gardanne, France, Provence 4 Biomass, which will be commissioned in 2014 will have an installed capacity of 125 MW and is the largest single biomass project so far in France. Saxlund International delivers a complete system for fuel handling with a series silos, bar feeders, transport and separation systems. It is expected that the plant will improve the regional CO 2 balance by about 600,000 tonnes a year. MARKETS Biomass & pellets industry Waste treatment Recycling & other industry Saxlund has supplied sludge handling equipment for the construction of Käppalaverket in Lidingö, close to Stockholm, one of the worlds most efficient wastewater treatment plants. The new sludge handling system has been designed according to the Sludge to Truck concept where Saxlund s slide frame is a crucial ingredient. The system provides better working conditions, improved logistics for transport, easier management, lower energy consumption and reduced maintenance costs. The delivery includes five sludge silos with total gross volume of 700 m3 equipped with the original Saxlund slide frame. The concept is the same one that Saxlund used in the UK in their delivery to Anglian Water, which is the largest water and wastewater treatment company in England and Wales. Saxlund has now received orders for delivery to five Anglian Water treatment plants. 14 OPCON ANNUAL REPORT 2013

15 bioenergy: FLUE GAS CONDENSATION & TREATMENT OF FLUE GASES Flue gas condensation at the E.ON district heating plant in Sollefteå, Sweden, which was supplied by Svensk Rökgasenergi, SRE. In 2014 this equipment will be supplemented with Opcon Powerbox for production of sustainable electricity from one of the two biofuel-powered boilers, which will convert the heating plant into a cogeneration plant. FLUE GAS CONDENSATION REDUCES EMISSIONS AND BOOSTS INCOME 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 MARKETS District heating & co-generation plants Greenhouses Sawmills & pellets industry 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. OPCON ANNUAL REPORT

16 SERVICE, INSTALLATION and aftermarket SERVICE THAT BOOSTS PROFITABILITY FOR CUSTOMERS Opcon has extensive capacity for servicing, including maintenance operations and spare parts supply. The Group has its own service organizations in both the bioenergy sector, via Saxlund, and in Waste Heat Recovery/Compressors, via Opcon Energy Systems (OES). Saxlund s service and maintenance covers material handling, biofuel and district heating plants and flue gas condensers. The OES aftermarket department performs servicing and maintenance of Opcon Powerbox installations, compressors and cooling systems. Maintenance means profitability It is essential that installations and facilities are checked and maintained regularly to ensure that high efficiency is maintained and emission levels comply with legal requirements. Preventive maintenance reduces the total cost for an installation and prevents breakdowns. Regular servicing ensures high performance and better energy efficiency at district heating plants and plants operating flue gas condensers. Saxlund provides inspection and fine-tuning during the operating season, and professional audit services during the summer stop. Often it is the small efforts that keep a plant operating at its best, such as fine-tuning boilers, regular replacement of nozzles and cleaning of the heat exchanger in the flue gas condenser. Simple procedures can reduce fuel costs and flue gas emissions. Service and maintenance normally lead directly to improved profitability, while the equipment is enhanced and the life of the plant increases. In addition, the risk of accidents or damage is reduced or eliminated. Experience and breadth Opcon has established a significant breadth of accomplishment thanks to its long experience and the customers it serves around the world. Deliveries in the aftermarket are made to heating plants and sawmills in Sweden, sewage treatment plants in Europe, chipboard factories in Asia, paper mills in Latin America, and many other facilities. No orders from customers are too complicated or small whether it s an order for a cell feeder with a capacity of several hundred cubic metres or just a small but vital packing sent in the post. OPCON S SERVICE OFFERING Fast supply of spare parts Telephone support 24/7/365 (for contract customers) Service and maintenance on site Status updates before maintenance work Optimisation of plants for incineration, flue gas condensation and material handling Well-equipped service vehicles with qualified staff Three workshops Maintenance contracts of various kinds Programming support Fast and smooth communication Extensive spare parts inventory Consulting during reconstructions Updated spare parts package Famous Swedish Marabou chocolate is manufactured at Mondelez Sweden AB in Upplands Väsby, Sweden. SRM has supplied the heat pump for the cooling system at the factory. Peter Westerlund (right), SRM s aftermarket manager, and SRM technician Leif Johansson check the pump. 16 OPCON ANNUAL REPORT 2013

17 OUTLOOK FOR 2014 AND BEYOND A MORE INTERNATIONAL BUSINESS FOLLOWING MARKET GROWTH OVERSEAS Ten years ago, Opcon set the framework for its strategic move into energy and environmental technology based on Opcon s history and skills within technology for lean, energy-efficient development. Opcon saw that 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. Greater demand for energy It 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 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. It is clear that major efforts will 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 are large regional differences in both demand and prices for energy. China the largest energy user As 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 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. Biomass for electricity and heating 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. Meanwhile, combined production of electricity and heating based on biomass continues to grow and in many cases is already competitive with fossil fuel. The IEA forecasts that global demand for bioenergy for electricity production will almost triple between 2011 and Of key significance for expected growth in Europe are targets to increase the share of renewable energy set by the EU and individual states. Perhaps the greatest growth in electricity production based on biomass is expected in the UK, where Opcon operates through a subsidiary. The EU Commission and the UK s National Renewable Energy Action Plan forecast that electricity production from solid biomass will climb in the UK by 270% from 2010 to The price of energy For Opcon, which focuses on energy efficiency and bioenergy, higher energy prices will mean greater demand for the company s technology. It also means that markets outside Sweden, which has traditionally had low energy prices, are of great interest. Rising energy prices have been a global System price for electricity in Nordic region EUR/MWh Source: Nord Pool Spot, Nasdaq/OMX Commodities, Swedish energy Nord Pool, system price Week Month Quarter Year OPCON ANNUAL REPORT

18 OUTLOOK FOR 2014 AND BEYOND trend since The financial crisis and the wide-scale economic downturn that followed did however mean a significant fall in prices from the high level in the summer of Energy prices have partly recovered, with the average price of Brent oil stabilising at USD 110 since There are large differences in energy prices, especially for electricity, between countries. In Sweden, which from an international perspective has low electricity prices, we have noted great volatility in recent years due to factors such as weather, water levels, operational disruptions in nuclear power and an economic climate where electricity prices in 2013 were very low. 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, for drying biomass, 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. Electricity prices for industry in Europe GWh, including network costs and taxes (Jan-June 2013) EUR/kWh 0,25 0,2 0,15 0,1 0,05 0 European Union Euro area Lithuania Luxembourg Malta Bosnia and... Montenegro Sweden Norway France FYROM Bulgaria Finland Croatia Greece Romania Estonia Slovenia Netherlands Belgium Turkey Spain Poland Austria Latvia Portugal Ireland Slovakia Czech Republic United Kingdom Germany Hungary Italy Denmark Cyprus Price development for coal, oil and natural gas (Index 1996=100, USD) 700 Crude Petro Average 600 Coal Average Natural gas, US Natural gas, Europe 500 LNG, Japan Source: Eurostat, Swedish energy Source: World Bank, Swedish energy 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 Center 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. For example, Opcon Powerbox ORC has generated over 800 kw from industrial waste heat at the very low temperature of 83 C. 18 OPCON ANNUAL REPORT 2013

19 OUTLOOK FOR 2014 AND BEYOND Opcon Powerbox is also 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. In 2010, for example, the permitted sulphur content in fuel in Emission Control Areas was reduced to 1% from 1.5% previously. As energy prices rise, the authorities sharpen requirements and actors in the marine industry commit themselves to reducing emissions, there is thus growing interest in greater energy efficiency. Swedish technology on international markets Over many years Opcon has channelled 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 and with Axis in Lithuania within bioenergy. Bunkerworldindex Europe Brent Spot Price FOB Dollars per Barrel Källa: Bunkerworld Source: U.S. Energy Information Administration OPCON ANNUAL REPORT

20 CORPORATE GOVERNANCE REPORT Opcon s Corporate Governance Report for 2013 Opcon 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. Shares At the end of 2013 the company had around 6,950 shareholders, a rise of around 450 on the previous year. The largest shareholder was B.O. Intressenter (Mats Gabrielsson) with 19.0%. The next largest shareholder was Hong Kong Snowman Technology Ltd. with 10%. As part of ongoing refinancing, which has included the settlement of expensive interestbearing liabilities among other measures, Opcon performed in January 2013 a directed issue of 12,087,454 shares at SEK 0.59 per share to GEM Global Yield Fund Limited. This raised SEK 7,131,598 for Opcon before costs that was settled against the advance provided by GEM in connection with the equity line financing facility of up to SEK 250 million over 36 months signed in To establish a foundation for continued development of the long-term strategic collaboration that has started and in order to join Snowman and Opcon closer together, a private placement of 34,441,415 shares in Opcon at SEK 0.78 per share was agreed with Hong Kong Snowman Technology Ltd., a whollyowned subsidiary of Fujian Snowman Co., Ltd., Fuzhou, Fujian, China. This share issue raised SEK 26,864, for Opcon before costs and helped to strengthen Opcon s financial position and create opportunities for current efforts that include a marine version of Opcon Powerbox. The total number of registered shares at the end of 2013 was 344,414,145 (297,885,276), an increase on the previous year of 46,528,869 shares. All shares are of the same category and give the same right to voting and dividends. 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 Meeting At the Annual General Meeting of Opcon shareholders held on 2 May 2013 it was decided that the board of directors shall comprise six members without deputies. The meeting re-elected Ulf Ahlén, Kenneth Eriksson, Mats Gabrielsson, Rolf Hasselström, Bengt E Johnson and Bill Tunbrant. Bill Tunbrant was elected chairman. Up to August, Maurizio D Agostino of IF Metall was the employee representative on the Board, with Shiva Farahmandrad, Swedish Association of Graduate Engineers, taking over from February. 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 70,000,000 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. As part of an incentive scheme Opcon will issue a maximum of 2,500,000 subscription options, with each option giving entitlement to one share in Opcon AB, to key decision-makers in the Opcon Group. As part of an incentive scheme Opcon will issue a maximum of 1,750,000 subscription options, with each option giving entitlement to one share in Opcon AB, to current and new Board members of Opcon AB. Mats Gabrielsson and Rolf Hasselström are not included in this allocation. 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. Work of the Board Opcon 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 23 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 A majority of the Board members elected by the Annual General Meeting (Ulf Ahlén, 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, Ulf Ahlén left the Board and Wendy Lin, who represents Snowman, was co-opted onto the Board after Snowman had become the second largest shareholder. 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 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 Shareholders Meeting The 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 Attendance at Board meetings, 2013 Name Role Attendance Bill Tunbrant Chairman 18 of 18 Ulf Ahlén Director 13 of 18 Kenneth Eriksson Director 17 of 18 Mats Gabrielsson Director 18 of 18 Rolf Hasselström Director 17 of 18 Bengt E Johnson Director 18 of 18 Maurizio D Agostino Director 13 of 18 Shiva Farahmandrad Director 13 of OPCON ANNUAL REPORT 2013

21 CORPORATE GOVERNANCE REPORT How Opcon is governed Owner Owner Owner Owner Owner Annual General MeEting Board of Directors AUDITORS PRESIDENT 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 2013, 18 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 2013, in addition to monitoring the current state of the business and the setting of budgets for the coming year, were primarily focused on the strategic collaboration with Snowman, 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 executives The 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 2013 financial year and were adopted by the 2013 Annual General Meeting. In 2013, no variable remuneration was paid to executives. Nominations committee The 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. Auditors The company s auditors are chosen by the Annual General Meeting of shareholders every third or fourth year. 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 At the 2010 Annual General Meeting PricewaterhouseCoopers AB, PwC, was elected as auditing firm for the ensuing four-year period. During the year PwC changed its lead auditor and Bo Hjalmarsson took over from Dennis Svensson. Internal controls The Board has responsibility for internal control in accordance with the Swedish companies act and the Swedish code for internal controls. Risk assessment Opcon 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 companyspecific 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 ANNUAL REPORT

22 CORPORATE GOVERNANCE REPORT 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. Opcon s view of the various financial risk factors that affect its business are presented in note 1, section 3 of this annual report. Opcon is constantly working to actively broaden its customer base to reduce dependence on individual customers. The remaining Renewable Energy business area has a significantly more diversified customer base, although individual customers are now again growing, which increases the importance of working to broaden the base even more. Opcon is considering using incentive schemes to encourage individuals to remain in the Group. Short-term investments are made with the Group's liquid funds in order to be used for expansion. According to current financial policy, refinancing shall be managed by signing long-term binding lines of credit. Opcon's currency policy is to hedge up to 50 percent of foreign currency flows. This policy was not fully observed in Opcon's financial policy prescribes that the credit risk be limited by only accepting counterparties with a good credit rating within established limits. The Group s liquidity is placed in bank deposits with negligible credit risk. Reserves are made for accounts receivable considered to be uncertain and these reserves affect operating profit. Control activities Risks concerning financial reporting are handled through various control activities. Opcon has decided to transfer large parts of its economic function within the Swedish section of Renewable Energy, which is undergoing significant change due to the integration of several acquisitions and reorganization, 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. 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 businessspecific 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. 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. In 2014 a large focus will be on revising the business system and strengthening the Groupwide 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/monitoring The finance department and senior managers continually analyse financial reports for the Group. Within the Renewable Energy business area, activities are being centralized in order to strengthen control within the fast-growing business area. 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 audit The 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 work The 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. 22 OPCON ANNUAL REPORT 2012

23 CORPORATE GOVERNANCE REPORT / OPCON S BOARD OF DIRECTORS Bill Tunbrant (independent) Born Civil engineer, KTH. Chairman of the Board of Opcon AB since Board member since Other assignments: Board member of Nordic Coag Invest AB, Nordic Biomarker AB, Bio- Yao AB, Sinoreagens AB, Timcon AB, Vikwon Sweden AB and Medirox AB. Part-owner of Vikwon Sweden AB and Timcon AB. Owner of Timcon. Previous assignments: Board member of China Health Labs & Diagnostics Ltd. (Toronto TSX-V), XSpray Microparticles AB. Board member of Temporent AB. Board member of 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 2014: 30,020 shares. Mats Gabrielsson Born MBA, Stockholm School of Economics. Board member of Opcon AB since 2013, Chairman of the Board of Opcon AB Other assignments: Chairman of the Board of Gabrielsson Invest AB, B.O. Intressenter AB, City Dental i Stockholm AB and others. Board member 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 2014: Via family and companies 66,837,966 shares (19.4% of total). Bengt E Johnson (independent) Born Civil engineer, KTH. Board member of Opcon since Other assignments: Board member of Somas Instrument AB, Aktiebolaget Somas Ventiler, CS Produktion AB. Previous business: CEO of BTG Källe Inventing AB, Geschäftsführer BTG Processtechnik, member of senior corporate team at Spectris AG, board member of Matkultur I Säffle Aktiebolag. No holdings in Opcon. Shiva Farahmandrad Born Civil engineer. Employed by Opcon Energy Systems AB. Board member of Opcon since 2013, employee representative of Swedish Association of Graduate Engineers. No holdings in Opcon. Kenneth Eriksson Born Graduate Business Administrator. Board member of Opcon since Operational business: CEO of Gabrielsson Invest AB. Other Board assignments: Chairman of Bofast AB, Rapid Larmcentral AB, Rapid Bevakning AB, Södertälje Larmcentral 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 Fondkommission AB, and others. Holdings in Opcon as of 31 March 2014: 750,000 shares. Rolf Hasselström Born MBA, Stockholm School of Economics. Board member of Opcon since Other assignments: President and CEO of Opcon since Board member or Chairman of the Board of all Opcon subsidiaries, Chairman of the Board of Calamus AB, TPC Components AB. Board member of RMH Holding AB, Rolf Hasselström Konsult- och Förvaltnings AB, Landström arkitekter AB, Calamus Holding AB, Calamus Invest AB and Enerji Ltd. 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, Calamusgruppen AB, Essarem Holding AB, Rotor Holding AB, Rapid Larmcentral Aktiebolag, Mind AB, and Skå Edeby Utvecklings AB, MMSA Avveckling AB and GEP Design och Produktkommunikation AB. Holdings in Opcon as of 31 March 2014: Directly and indirectly via companies 8,009,960 shares. Wendy Lin (co-opted member) Born 1991: BSc in mathematics and finance, University College London. Co-opted onto Opcon s Board in Other assignments: CEO assistant, Fujian Snowman Co., Ltd. OPCON ANNUAL REPORT

24 CORPORATE GOVERNANCE REPORT / OPCON S MANAGEMENT TEAM AND AUDITORS Rolf Hasselström MBA, Stockholm School of Economics. President and CEO of Opcon AB since Board member since Born 1951, employed since Other assignments, see previous page. Holdings in Opcon as of 31 March 2014: Directly and indirectly companies 8,009,960 shares. Claes Palm Accountant. Deputy CEO and CFO of Opcon AB. Born 1962, employed since Holdings in Opcon as of 31 March 2014: 20,000 shares. Niklas Johansson MBA, Stockholm School of Economics. Deputy CEO of Opcon AB, Investor Relations, Strategic Development and Public Affairs. Born 1970, employed since 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 Communications, and Ministry for Foreign Affairs. Holdings in Opcon as of 31 March 2014: 161,560 shares. Bo Hjalmarsson Born Authorised public accountant, Öhrlings PricewaterhouseCoopers AB, Stockholm. Bo Hjalmarsson has been the auditor of Opcon since He is a member of FAR, the professional institute for authorized public accountants In addition to Opcon, Bo Hjalmarsson has audit assignments at Eniro, Nordic Cinema Group, SAS and Teracom, among others. 24 OPCON ANNUAL REPORT 2013