Fiven Annual Report 2020

Fiven Annual Report 2020 furnace technology includes covered furnaces as well as a gas cleaning facility. The Acheson gas cleaning facility consist of a filter system for dust removal as well as a complete de-sulphur- isation unit, enabling significant improvement of the environ- mental footprint from the Acheson process. In November 2020 it was decided to implement new furnace technology for three additional furnace groups in Lillesand, after the project received financial support from Innovation Norway. Corporate governance Fiven ASA does not have a corporate assembly, and therefore the general meeting elects the Board. In 2020 the Board of Directors was extended from 3 to 4 members. The Board of Directors elects its own chair. The composition of the Board of Directors attends to the interests of the shareholder and to meet the Fiven’s need for expertise through executive personnel. In accordance with the Norwegian Public Limited Liability Act (Allmennaksjeloven) and supplementary policies and procedures provided by the share- holder, the Board of Directors exercises the overall governance of Fiven ASA. In 2020 an Audit Committee was formed. The Audit Committee reports to the Board of Directors following the mandate prepared and approved by the Board of Directors. The appointment of the Executive Chairman of the Board of Directors facilitates the reporting to the shareholder of Fiven ASA. Two of the three directors are executive person- nel, employed by Fiven Norge AS, assuring that the Board of Directors has sufficient operational expertise as well as comprehensive knowledge of the business conducted in the Fiven Group. In 2020 a third director was elected from outside of the Fiven Group. The General Manager of Fiven ASA, currently also being the Fiven Group CFO, is responsible for the day-to-day manage- ment of Fiven ASA. The General Manager governs the opera- tions through policies and procedures, management meetings, Board meetings and through the Audit Committee interaction. The General Manager of Fiven ASA meets with the extended management team of the Fiven Group. These management meetings are called by the Chairman, and in addition to the executive management team, include also the Chief Operating Officer, production site general managers and HSE Global Director. The purpose of the meetings is to monitor the status of the operations and key performance indicators. The market situation and business development issues are also addressed, as well as health, environment, safety and security indicators and human resource issues. These meetings are a vehicle for scrutiny of the segment units’ performance relative to budgets and targets. The market situation, order intake, new opportunities and other significant items at the time are also addressed. The internal controls over financial reporting are governed by the Group Accounting Policies and a set of procedures and internal controls. The Audit Committee reinforces the focus on internal controls over financial reporting. Furthermore, in 2020 there has been an internal controls project with focus on two key processes. A tool for a more robust group wide IFRS 16 reporting has been implemented, and a consolidation tool project has been launched for full implementation in 2021 to enable a faster and higher quality reporting. There are also plans under execution for further automation of approval flows. Risk Factors and risk management Market risk The largest markets to Fiven are the automotive and the construction markets. Fiven has consciously developed new specialty products and diversified into other markets over several years. The outbreak of the COVID 19 pandemic had a significant impact on Fiven standard product customers (refractory, metallurgical and abrasives). On the other hand, the specialty product market was much more resilient, and revenues were up year over year. The Asian competition continue to expand their capacity and therefore exert intense pressure on reducing standards products' market prices. In Europe, the market is dynamic, with many players competing in an environment facing subdued demand due to the COVID 19 pandemic. Globally, Fiven will keep facing fierce competition from players in Germany, Russia, China, Spain, and the US. However, Fiven will continue to counter the risk through its customer-centricity, superior delivery performance, and innovation. Operational risk The Group’s business faces several operational risks associ- ated with the running of the industrial factories. The manufacturing of silicon carbide is highly depending on raw material such as petroleum coke, electric energy and sand. Through long term contracts on energy, Fiven entities are able to secure a stable supply and price level of power for produc- tion. For petroleum coke and sand there is no forward market and Fiven buys from the spot market at prevailing supply and prices. Through multiple sourcing, the Group has what is considered a steady supply also for what concerns petroleum coke and sand. Corporate governance   19