Annual Report 2006

Managing Director’s ReportI am happy to report that our focus on unique products within the cleantech areas of gas cleaning, energy recovery district/local cooling and service has given the company stable profitability levels. Net sales in 2006 were SEK 84.1 million and operating profit before financial items was SEK 8.2 million.

Your needs - our ambitionGötaverken Miljö wants to be the global expertise leader within the removal of dioxin and mercury from gases. Our ADIOX® techno-logy captures dioxin throughout its multiyear service period, dioxin being removed at the end of the service period from the ecocycle by the incineration of the ADIOX® material. ADIOX® technology and complete scrubber packages will be marketed globally via a network of agents/dealers and partners. Our goal is to be the most innovative supplier of combined gas cleaning and energy recovery projects in the Scandinavian market and the preferred choice of industrial customers.

We are a strongly customer focused company. We therefore take great pride in ensuring that we deliver the products and performance we have promised and in ensuring that all products and services fully satisfy the demands and expectations of our customers and partners. Our biggest asset therefore is our highly qualified and committed employees, who are not only personal development focused, but also focused on the continuous improvement of technical solutions and work processes based on the experience we have acquired.

Cleantech industryOur core operations are the cleaning of hazardous emissions, energy recovery and production of district/local cooling from surplus heat. These operations, which protect the environment and save limited resources, are the core elements of what today is known as the cleantech industry. The industry has attracted increasing interest in recent years from environmentalists, politi-cians, media and the public a large. This attention inspires our employees to develop our technologies so that emissions can be

further reduced and energy savings increased. An example of this is the development of a complementary product that reduces the formation of dioxin and corrosion problems in waste incinerators.

Dry application of the ADIOX® technology for dioxin removalOur wet gas ADIOX® technology is well proven. However, a new development of the technology achieved in 2006 is a dry application solution. This solution radically improves dioxin removal capacity. System flexibility is also significantly increased, opening up new fields of application. The first commercial order for a dry application, with a value of SEK 9 million, has been received from Tekniska Verken in Linköping, Sweden and delivery was finalized in December.

Energy recovery delivered to Vestforbrænding waste incineration plant, Copenhagen, DenmarkThis contract, which consists of a flue gas condensing scrubber with ADIOX® tower packings and two absorption heat pumps, has been one of the year’s significant orders. The order value is approxi-mately SEK 50 million. Commissioning started in September, start-up was successfully completed in December 2006 and the plant was finally taken over by the client in February 2007. The installation will produce heat for 15,000 houses and will therefore have a positive impact on the environment, as recovered heat mainly replaces heat previously generated from fossil fuels.

Lennart GustafssonManaging Director

Summary – 2006Vestforbrænding flue gas condensation produces heat for 15,000 houses

Dry ADIOX® absorber achieved more than 99% dioxin removal in first commer-cial installation

14 new ADIOX® orders for existing facilities in Europe and the USA

Absorption heat pump to Jönköping Energi for Alstom

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Net sales t€ 9 300Operating profit, EBITDA t€ 900Gross profit % 13 Profit margin % 11 Equity/assets ratio % 22 Consolidation level % 56 Liquidity ratio % 236 Number of employees 22

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Business operationsGötaverken Miljö develops, designs and supplies products and facilities for cleaning environmentally hazardous emissions from air and water. We also supply energy recovery and district/local cooling generation. Our core operations, presented below, are solely cleantech oriented and are focused on wet flue gas cleaning systems com-bined with flue gas condensation and absorption heat pumps.

Flue gas cleaning & condensationThe patented multiple stage scrubber provides wet flue gas cleaning and the

efficient removal of heavy metals, sulphur, hydrochloric acid, ammonia, dioxin and mercury. ADIOX® and MercOx processes can be included to increase the efficiency of dioxin and mercury removal. Flue gas con-densation can be integrated into scrubbers to recover energy to a district heating system.

Water treatmentHeavy metals and particles are re-moved from the water by floccula-tion. Sulphates can be removed by

gypsum precipitation. Condensate is ion exchange or reversed osmosis treated to allow water reuse.

Dry dioxin removal by ADIOX®

Plants that generate flue gases with high dioxin levels can install a dry

ADIOX® absorber after the scrubber, and through this achieve 0.1 ng of TEQ. The dry system provides even more efficient dioxin removal than the wet application. The technology is very reliable – conti- nuously in place and continuously re- moving dioxin from the ecocycle.

Absorption heat pumps & chillersEnergy recovery can be further extended by installing absorption

heat pumps. Absorption chillers provide ‘competitive’ comfort cooling to buildings connected to a district heating system.

Wet dioxin removal by ADIOX®

The patented ADIOX® technology is a competitive and cost efficient method

for achieving dioxin levels that are well below those stipulated in current EU directives. Dioxins are captured in pack-ings or demisters made from the ADIOX® material. The packings are incinerated at the end of their service lifetimes, so destroying the dioxins. Thereby the dioxins are removed from the ecocycle.

ServiceOn site service and maintenance of flue gas cleaning and energy recovery plants and large absorption and com-

pressor heat pumps. Guaranteed contracted call-out service.

City Mall

District heating network

Flue gas cleaning & condensation

Absorption heat pumps & Chillers

Wet dioxin removal by ADIOX® material

Dry dioxin removal by dry ADIOX® material

Water treatment

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Unique technologies – ADIOX® and MercOx

‘We have leading edge expertise in the field of dioxin and mercury abatement.’

Götaverken Miljö and Forschungszentrum Karlsruhe have been co-exhibitors at several international trade fairs.

Employees and management systemsOur personnel have extensive expertise and many years of experience within environmental and energy technology process design. Our unique process solu-tions allow us to tailor efficient and finan-cially competitive subsystems and facilities which more than satisfy the environmental requirements of authorities and customers. Systems can be optimised to achieve high levels of energy recovery, which often dramatically shortens the payback period of an environmental investment. We in addition have leading edge expertise within the cleaning of gases containing dioxin and mercury and within large heat pumps and chillers.

Our guiding light goal is to create added value for our customers through conti- nuously improving the performance of our products and services. We therefore work

in close collaboration with our clients, participate in networks such as PREWIN and ISWA and play an active role in the Swedish Waste Refinery Research Centre to ensure continuous development of our products. The environmental and quality management system which we apply complies with EN ISO 1�001:1996 and ISO 9001:2000. Our system contains the process, procedure and work descriptions required to meet the demands and objectives specified in contracts and policies.

PartnersWe have developed, with our partner For-schungszentrum Karlsruhe, the unique and world leading products ADIOX® and MercOx for the removal of dioxin and mercury from gases and fluids. Exclusive worldwide licences from Forschungs- zentrum Karlsruhe give us sole rights to sell and manufacture these products globally.

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Unique technologies – ADIOX® and MercOx

We also supply standardised, high perfor-mance absorption heat pumps and chillers via a partnership agreement with the Indian company Thermax. These are available in a wide range of sizes and can provide advanced energy recovery or generate cooling from cheap surplus heat.

Core technologyGötaverken Miljö AB has for more than 20 years successfully designed and supp-lied wet gas cleaning and associated water cleaning systems. Many of these systems have in addition been supplied with energy recovery via condensation and in combination with heat pumps. Our focus has been on waste incineration. Our systems have however been installed in other industrial applications and in heat production facilities that use other fuels. Our core technology is based on this experience and the unique ADIOX® and MercOx technologies. We have also developed a patented multiple stage scrubber solution which provides a cost effective and compact solution for a wide range of process requirements.

ADIOX® The benefits the ADIOX® technology can provide have been highlighted, but not prescribed, in the BAT (Best Avail-able Techniques) reference document,

BREF, for waste incineration. Part of development has therefore focused on the verification and quality assurance of ADIOX® product features in new pro- cesses, both for dry and fluid applications. This includes the development of new material properties for higher operating temperatures and long term testing in new industrial processes.

We have also developed test programmes for permit control and analysis of ADIOX® installations. This allows us to determine the remaining lifetime of ADIOX® mate-rials in use and to so secure the long term operational safety and financial efficiency of facilities.

MercOxA new application of the MercOx process has been tested by one of Europe’s leading petrochemical companies. Our hope is that it will be permanently installed and in doing so will strongly contribute to minimising emissions of mercury from such facilities.

‘The benefits ADIOX® technology can provide have been highlighted in the BAT reference document.’

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Cleaning and energy recovery

The dry ADIOX® dioxin absorber at Gärstadverket.

One of the absorption heat pumps at Vest-forbrænding.

Condensing scrubber being transported to the Vestforbrænding plant.

The first commercial dry ADIOX® dioxin absorber The order placed by the Linköping, Sweden based company Tekniska Verken is a breakthrough for Götaverken Miljö in the flue gas dioxin removal market. The delivery of the very first commer-cial installation of a dry ADIOX® dioxin absorber, installed on waste incineration lines 1-� at the Gärstadverket facility,

dioxin removal, a compact, static and simple solution and lower costs. The general advantages provided by the ADIOX® technology are high operational safety, flexible layout allowing usage in different applications, low maintenance costs and that captured dioxin can be removed from the ecocycle by incineration of the residues.

Energy recovery by flue gas condensationThis delivery to Vestforbrænding in Copenhagen, Denmark, installed to increase district heating production, is one of 2006’s major contracts. The delivery consists of a condensing scrub-ber with ADIOX® tower packings and two large absorption heat pumps. The order was signed at the end of February 2006 and has a value of approximately SEK 50 million. Commissioning started in September, start up was successfully completed in December 2006 and the plant was taken over by the client in February 2007. The installation can, at full operation, generate 18 MW of

heat, which is sufficient to heat 15,000 houses connected to the district heating network. The installation also has a positive impact on the environment as the heat replaces heat generated from fossil fuel.

followed long-term testing at a pilot plant. The order, which has a value of approx. SEK 10 million, was completed in 2006.

The ADIOX® technology is based on a carbon-doped plastic material which has a high dioxin absorption capacity. A number of different components are produced from the ADIOX® material, including demisters (droplet separators) and tower packings for wet scrubbers. The number of new installations completed each year is increasing.

The dry ADIOX® technology has se-veral advantages not offered by the wet application. These include more efficient

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ADIOX® installations to four continentsSince the market introduction of the ADIOX® technology in 2002 more than 55 waste incineration lines with wet scrubbers in Europe, the USA, Canada, Taiwan and Australia have been equipped with ADIOX® tower packings.

Product development and market intro-ductions have gone hand in hand since the first commercial installation in a waste incineration plant wet scrubber in 2002. ADIOX® major milestones so far are:

2001 1st commercial wet scrubber packing at the waste incinerator at Thisted, Denmark

2002 Wet pilot scrubber meet the < 0,1 ng TEQ/m� requirement

2003 Contract for ADIOX® as main dioxin ‘filter’ at Holstebro, Denmark

2004 1st hazardous waste installation at Trédi, Salaise sur Sanne, France

2006 1st commercial dry ADIOX® absorber at Tekniska Verken in Linköping, Sweden

ADIOX® technology has so far been used in the following industrial markets: mu-nicipal solid waste incineration, hazardous waste incineration, chemical waste inci-neration and the pulp and paper industry.

Our clients include: SYSAV, Sweden - AVR Avira, Duiven, The Netherlands - Vestforbrænding, Copenhagen, Denmark - Trédi, Salaise sur Sanne, France - SAKAB, Norrtorp, Sweden - Dow Chemicals Europe, USA, Canada and Australia - Wacker Chemie, Berghausen, Germany - Stora Enso, Anjalankoski, Finland.

‘Captured dioxin can be removed from the ecocycle by incineration of the residues.’

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Heat pumps and chillers

‘The installation of absorption heat pumps and flue gas condensing equipment replaces heat production largely generated from fossil fuels.’

The installation of the absorption heat pump at KVV Torsvik, Jönköping.

Swedish authority requirements for increased energy recovery and reduced energy consumption, have had a strong positive influence on the demand for absorption heat pumps and chillers in the domestic market. We supply standardised, high performance absorption heat pumps and chillers through our partnership with the Indian company Thermax. These are available in a wide range of sizes.

Götaverken Miljö was originally solely a heat pump supplier, and we have there-fore installed a large number of heat pumps. Early reference projects still in operation include the world’s largest turbo compressor heat pumps supplied to Ryaverken in Gothenburg, Sweden for Göteborg Energi. We have however moved on from our roots to absorption heat pumps and are today a specialist in absorption heat pumps linked to flue gas cleaning systems at waste incineration facilities. Our first delivery of absorption heat pumps was commissioned in 1989 at the Renova waste incineration facility in Gothenburg. In 2006 we delivered an absorption heat pump to Alstom Power Sweden, which has been included in Alstom’s flue gas cleaning equipment supplied to Jönköping Energi for the new waste incineration plant at KVV Torsvik.

The two absorption heat pumps and a condensing scrubber installed on waste incineration line 5 at Vestforbrænding in Copenhagen, Denmark were started up just before the end of the year. Energy recovery is maximized by using absorp-tion heat pumps with a flue gas condenser, giving higher heat production levels. This provides both financial and environmental benefits. The installation does not increase emissions and carbon dioxide emissions are reduced. The energy recovered re-places energy produced using other fuels and sources – making this also an invest-ment in a better environment!

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The absorption chiller at Tekniska Verken in Linköping, Sweden.The absorption chiller at Norra Älvstranden, Gothenburg, Sweden supplies 2 MW of

comfort cooling. The unit is driven by surplus heat from the district heating network, therefore saving valuable electricity.

Absorption chiller technologySkid-mounted/modular absorption chill-ers based on standard Thermax units with a cooling output range of 150-750 kW have been standardised. The chillers are ideal for comfort cooling in commercial properties connected to district heating systems. District heating acts as the opera- ting energy source. The first delivery of local cooling to a single building was to Tekniska Verken in Linköping, Sweden in the autumn of 2006.

The chiller is driven by heat supplied from the district heating system during the summer season, when district heating costs are very low. The system uses free cooling in winter. These small units also allow our customers to provide comfort cooling to their customers where district cooling systems are not available. The units have low maintenance requirements and can also be installed at industrial sites, hospitals and shopping centres.

ServiceWe offer a complete range of services that includes maintenance, rebuilding or repair of heat pumps and flue gas cleaning facili-ties, training and inspection. Heat pump service contracts include guaranteed call-out and heat exchanger and control system upgrading. We co-operate with several component suppliers – Friotherm, Atlas Copco, Thermax and Carrier.

Our assignments include Fault rectification and repair

Preventive maintenance and control

Calibration of instruments

Replacement of heat exchangers or tube packages

Performance calculations

Supply and installation of closed loop emptying systems

Supply of refrigerants

Drying of refrigerants

Commissioning, training and inspection

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Financial Report

We operate exclusively within the cleantech industry, focusing on supply and consulting activities within the flue gas cleaning, energy recovery and district/local cooling areas. We also carry out service and rebuilding operations, mainly at previously supplied facilities and on large heat pumps/chillers.

The Company has 22 employees, four being women. The head office is in Gothenburg.

Continuous good profitability with retained net salesWe can with great satisfaction report that our focus on unique products within our core area of gas cleaning and service has been a successful approach. Net sales were SEK 8�,1�5,000 (86,625,000), which generated an operating profit of SEK 8,183,000 (8,544,000). Gross profit was 13.3 %. The equity/asset ratio has been further strengthened to 28.7 %. (See also page 11, key figures).

Optimization of the ADIOX® and MercOx technologyWe have continued to optimize the use of ADIOX® and MercOx technologies in dioxin and mercury capture from gases. These technologies complement the company’s well proven wet scrubber system. The wet scrubber system removes heavy metals, sulphur and hydrochloric acid from gases to levels that are clearly below current official requirements.

New technologiesADIOX® technology has been further developed to provide a dry application. The dry application provides significantly higher dioxin removal capacities. System flexibility is also significantly increased, opening up new fields of application. The first dry application order, worth approximately SEK 9 million, has been received from Tekniska Verken in Linköping, Sweden. Delivery was completed in December.

We have also started to develop a new complementary pro-duct which can reduce the formation of dioxin and corrosion problems in waste incinerators.

Project operationsIn December 2005, the company signed a contract with the large waste incineration plant Vestforbrænding, in Copenhagen, Denmark to supply ADIOX® tower packings and demisters for four of the wet flue gas cleaning lines at the plant. The order was worth SEK 10 million and is the largest ADIOX® delivery completed so far. The delivery was completed in the spring of 2006 after test results were approved.

At the end of February 2006, the company signed a further con-tract with Vestforbrænding. This contract was to supply a flue gas condensing plant for incineration line 5. The main components are a condensing scrubber with ADIOX® tower packings and two absorption heat pumps. The order value is approximately SEK 50 million. Commissioning started in September and delivery is scheduled to be completed at the beginning of 2007.

ADIOX® technology continues to attract considerable attention among old and new customers. During the year, the company supplied ADIOX® tower packings to a further 15 installations in Europe, among them the first delivery to Italy.

Continued focus on serviceGötaverken Miljö operates and develops service operations. This includes the servicing of flue gas and water cleaning facilities, absorption heat pumps/chillers, heat exchangers and previously supplied compressor heat pumps. The company in the first quarter delivered an absorption chiller to Tekniska Verken in Linköping. This will be used to generate local coo-ling, which in the summer season will use surplus heat from the district heating system. Sales of replacement materials for previously installed ADIOX® systems have also developed.

Human resourcesThe company in 2006 recruited � persons - a salesman, a service engineer, a project manager and a process engineer. This underpins the company’s expansion plans.

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Key events after the year-endThe flue gas condensing plant for incineration line 5 at Vestforbrænding was taken over by the customer as planned in February.

Three-year overview 2006 2005 2004

Net sales 8� 1�5 86 625 102 ��9Profit after net financial income/expense 8 090 7 670 9 515Equity/assets ratio (%) 29 22 15

OwnershipGötaverken Miljö AB is solely owned by the Sixth Swedish National Pension Fund.

Proposed distribution of unappropriated earningsThe following profit is available for distribution by the Annual General Meeting (in SEK). Profit brought forward 12 691 557Profit for the year 5 523 137Total SEK 18 214 694

The Board proposes that the profit brought forward be distributed as follows:To be carried forward 18 21� 69�Total SEK 18 214 694

Key figures 2006 2005 Equity/assets ratio % 29 22Consolidation level % 56 50Liquidity ratio % 236 186Profit margin % 11 11Gross profit % 13 13Return on equity (ROE) % 30 48

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Income statement

Current operations Note 2006 2005

Net sales 8� 1�5 86 625

Cost of goods sold -57 819 -62 �86

Gross profit 26 316 24 239

Operating costs

Sales expenses -9 �95 -6 9�9

Research and development -2 �1� -2 075

Administrative expenses -� 208 -� 81�

Depreciation -� 016 -2 867

Total operating costs -18 133 -15 695

Operating profit 1, 2, 3, 4 8 183 8 544

Profit from financial investments

Interest income 826 790

Interest expense -2 026 -1 66�

Total profit from financial investments -1 200 -874

Profit after financial items 6 983 7 670

Appropriations

Additional depreciation 758 -81

Change, tax allocation reserve 0 2 060

Profit before tax 7 741 9 649

Tax -2 218 -2 725

Net profit for the year 5 523 6 924

Cash flow statement

Current operations 2006 2005

Operating profit before financial items 8 18� 8 5��

Depreciation � 016 2 867

Loss, sale of equipment 0 ��

Provision, guarantee commitments -1 211 4 875

9 988 16 329

Interest received 826 790

Interest paid -2 026 -1 66�

Tax paid -� 019 -� 860

5 769 11 595

Increase/decrease, stocks 5 605 -5 6�8

Increase/decrease, current receivables -680 18 919

Increase/decrease, accounts payable 5�9 -� 1�9

Increase/decrease, current operating liabilities

-1 208 9 1��

Cash flow from current operations 10 025 29 861

Investment operations

Investments in tangible assets -5�8 -270

Cash flow from investment operations -548 -270

Financial operations

Loans raised/Amortisation of liability 0 -11 ��9

Cash flow from financing operations 0 -11 449

Cash flow for the period 9 477 18 142

Liquid funds at the beginning of the period 36 770 18 628

Liquid funds at the period-end 46 247 36 770

Balance sheet

Assets Note 2006 2005

Fixed assetsIntangible assets

Goodwill 5 5 200 7 799

Tangible assets

Equipment and tools 6 748 617

Total fixed assets 5 948 8 416

Current assetsStocks etc.

Stocks 192 198

Projects in progress 7 �08 5 907

500 6 105

Current receivables

Accounts receivable 1� 2�2 12 2�1

Prepaid expenses and accrued income 9 9�9 1 091

Other current receivables 337 516

14 518 13 838

Cash and bank balances 46 247 36 770

Total current assets 61 265 56 713

Total assets 67 213 65 129

Equity and liabilities

EquityRestricted equity

Share capital, 5 000 shares at a nominal value of SEK 100

500 500

Statutory reserve 100 100

600 600

Non-restricted equity

Profit brought forward 12 692 5 767

Profit for the year 5 52� 6 92�

18 215 12 691

Total equity 8 18 815 13 291

Untaxed reserves

Additional depreciation 680 1 ��8

Total untaxed reserves 680 1 438

Provisions

Provisions for guarantee commitments 10 � 96� 5 175

Long-term liabilities

Convertible subordinated debenture 11 18 000 18 000

Total long-term liabilities 18 000 18 000

Current liabilities

Accounts payable 5 1�6 4 597

Tax liability 576 1 289

Accrued expenses and prepaid income 12 7 225 5 805

Advance payments from customers 7 6 1�� 1� 560

Other current liabilities 6 68� 1 974

Total current liabilities 25 754 27 225

Total liabilities 43 754 45 225

Total equity and liabilities 67 213 65 129

Memorandum items

Pledged assets

Floating charges �2 000 �2 000

Contingent liabilities

Guarantee undertakings 15 047 15 1��

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Notes to the accounts

Accounting and valuation principles

Götaverken Miljö AB’s accounting and valuation principles are in comp-liance with the Swedish Annual Accounts Act and the general recommen-dations of the Swedish Accounting Standards Board.

Note 1 - Salaries, other remuneration and social security

Average number of employees 2006 2005

Men 18 18

Women � �

Total 22 22

Board and President

Salary costs 1 680 1 226

Social security expenses 1 077 1 0�2

Of which pension costs 441 542

Total, Board and President 2 757 2 258

Other employees

Salary costs 9 ��� 8 617

Social security expenses 5 476 4 796

Of which pension costs 1 705 1 745

Total, other employees 14 919 13 413

Remuneration to auditors

Audit assignment 128 129

Note 2 - Absence due to sickness

Absent due to sickness as a percentage of the total normal working hours for each group.

All employees 2006 2005

Age group �0 - �9 years 0.77% 0,58%

Age group 50 - years 0.30% 0.39%

Men, age group �0 - �9 years 0.46% 0.71%

Men, age group 50 - years 0.30% 0.44%

The percentage for employed women, in total or in each age group, is not reported due to the exception rule in the legislation, which states that informa-tion should not be furnished if the number of employees in each group is less than 10 or if the information can be traced to a specific individual.

Note 3 - Gender distribution, executive management

Board members 2006 2005

Men � 5

Women 0 0

Total 4 5

President and other officers of the Company

Men 1 1

Women 0 0

Total 1 1

Note 4 - Breakdown of depreciation

2006 2005

Intangible assets 2 599 2 601

Tangible assets 417 266

Total 3 016 2 867

Note 5 – Goodwill

2006 2005

Opening acquisition value 1� 000 1� 000

Investments for the year 0 0

Opening accumulated depreciation 5 201 2 600

Depreciation for the year 2 599 2 601

Closing accumulated depreciation 5 200 7 799

Note 6 - Equipment and tools

2006 2005

Opening acquisition value 1 081 85�

Purchases 5�8 271

Sales and disposals 0 -��

Closing accumulated acquisition value 1 629 1 081

Opening depreciation �6� 199

Depreciation for the year 417 265

Sales and disposals 0 0

Closing accumulated depreciation 881 464

Residual value according to plan 748 617

Note 7 - Work in progress

2006 2005

Contract expenses at the period-end �08 5 907

Advance payment from customers -6 1�� -1� 560

-5 825 -7 653

Work in progress at a fixed price is reported in accordance with the Swedish Accounting Standards Board main rule in BFNAR 2003:3 at the rate at which the work is completed, the so-called ‘gradual revenue recognition’ principle.

Note 8 - EquityShare

capitalStatutory

reserveNon-res.

equity

Amount at the beginning of the year 500 100 12 692

Profit allocation as decided at the AGM 0 0

Non-restricted equity 5 52�

Amount at the year-end 500 100 18 215

2006 2005

Conditional shareholders’ contribution 1 500 1 500

Note 9 - Prepaid expenses and accrued income

2006 2005

Prepaid rent 0 268

Other prepaid rental costs 8�5 251

Accrued income 9� 572

Total 939 1 091

Note 10 - Other provisions

2006 2005

Provisions for guarantee commitments � 96� 5 175

Note 11 - Convertible subordinated debenture

2006 2005

The loan, including interest,falls due for payment on �1/12-2010.

18 000 18 000

The loan runs without interest for the first 12 months and thereafter at an annual rate of interest of 4.5% up to and including 30 June 2005 and at an annual rate of interest of 12% for the period thereafter.

Note 12 - Accrued expenses and prepaid income

2006 2005

Accrued social security contributions 8�6 69�

Accrued holiday pay 1 582 1 �10

Accrued salaries 1 26� 126

Other accrued costs � 5�� 3 675

Total 7 225 5 805

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Audit ReportTo the annual meeting of the shareholders of Götaverken Miljö AB, Corporate identity number 556652-2743

I have audited the annual accounts, the accounting records and the administration of the board of directors and the managing director of Götaverken Miljö AB for the year 2006-01-01– 2006-12-�1. These accounts and the administration of the com-pany and the application of the Annual Accounts Act when pre-paring the annual accounts are the responsibility of the board of directors and the managing director. My responsibility is to express an opinion on the annual accounts and the administration based on my audit.

I conducted my audit in accordance with generally accepted auditing standards in Sweden. Those standards require that I plan and perform the audit to obtain reasonable assurance that the annual accounts are free of material misstatement. An au-dit includes examining, on a test basis, evidence supporting the amounts and disclosures in the accounts. An audit also includes assessing the accounting principles used and their application by the board of directors and the managing director and significant estimates made by the board of directors and the managing direc-tor when preparing the annual accounts as well as evaluating the overall presentation of information in the annual accounts. As a basis for my opinion concerning discharge from liability, I ex-amined significant decisions, actions taken and circumstances of the company in order to be able to determine the liability, if any, to the company of any board member or the managing director. I also examined whether any board member or the managing director has, in any other way, acted in contravention of the

Companies Act, the Annual Accounts Act or the Articles of Association. I believe that my audit provides a reasonable basis for my opinion set out below.

The annual accounts have been prepared in accordance with the Annual Accounts Act and give a true and fair view of the com-pany’s financial position and results of operations in accordance with generally accepted accounting principles in Sweden. The statutory administration report is consistent with the other parts of the annual accounts.

I recommend to the general meeting of shareholders that the in-come statement and balance sheet be adopted, that the profit be dealt with in accordance with the proposal in the administration report and that the members of the board of directors and the managing director be discharged from liability for the financial year 2006-01-01 – 2006-12-�1.

Göteborg, 15th of March 2007

Mats Olsson Authorized Public Accountant

Stefan Holmgren

Åke Pettersson

Christer Sjölin

Wille Brandberg

Lennart GustafssonManaging Director

Gothenburg, March 15, 2007

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Members of the board and auditor

Management

Erland Astorsson Born 1961. Manager, Service. Employed since 1998.

Ulf Hägg Born 1955. Manager, Process. Employed since 1988.

Lennart Gustafsson Born 195�. Managing Director. Employed since 2001.

Wille BrandbergBorn 19�5. Representative of SIF. Board member since 1998.

Jonas Lidholm Born 1970.Secretary since 200�. Corporate Lawyer, The Sixth Swedish National Pension Fund.

Mats Olsson Born 1960.Auditor of the Company since 200�. Corporate lawyer and authorised public accountant.Partner in Adrian & Partners AB.

Stefan Holmgren Born 1961. Elected 2002. Chairman of the Board. Lawyer, The Sixth Swedish National Pension Fund.

Åke PetterssonBorn 19�6. Elected 1999. Sociologist. Senior advisor, The Sixth Swedish National Pension Fund.

Christer Sjölin Born 19��. Elected 200�. Doctor of Engineering. Owner CSJ-konsult.

Employee representative

Auditor

Board secretary

From the left: Erland Astorsson, Ulf Hägg, Lennart Gustafsson, Per Lindgren and Anders Lorén.

Per Lindgren Born 1956. Manager, Sales. Employed since 1989.

Anders Lorén Born 1960. Manager, Projects. Employed since 2002.

Götaverken Miljö ABVisiting address: Anders Carlssons gata 1�

Postal address: Box 8876, SE-402 72 Göteborg, SwedenTelephone: +46-31-50 19 60, Fax: +46-31-22 98 67

www.gmab.se

Götaverken Miljö is located in Gothenburg and has its origin in the Götaverken com-panies, a large industrial group comprising, among other things, shipyards and boiler manufacturing with a history dating back to 1841. Our office has an attractive location on Hisingen, on the banks of the river, the Göta Älv, where Götaverken previously ran its shipbuilding operations. The company was founded in 1988 as a spin-off from Götaverken Energy and has been owned since 1998 by The Sixth Swedish National Pension Fund, which is domiciled in Gothenburg.