Fiven Annual Report 2022 R&D Activities Product development projects and activities in R&D is a vital part of Fiven’s growth strategy. The development topics in focus are e-SiC, high purity silicon carbide for power electronic applications, and advanced technical ceramic solutions for a wide range of applications, including ballistic protection and 3D printing. R&D supports the implementation and operationalization of Fiven’s environmental roadmap. The environmental technology development is now entering into a new phase where optimization of the interaction between process and furnace coverage technology is developed. Fiven focus on speed of new product development and follow up on the innovation process according to the Fiven Innovation System. The system is a modified Stage-Gate system where all stakeholders are directly involved to ensure alignment of resources and capacities. In the monthly Innovation Review, the status and plans for strategic development projects are presented by the R&D Project Managers supported by the Sales & Marketing team, to the management of Fiven. The innovation reviews is the governing forum for selection and prioritization of development projects for the Fiven group. The research and development group in Fiven had a change of management in 2022. The new CRO, Trygve Eidet, entered Fiven from a position as Director R&D in Elkem Carbon Solutions, a division in Elkem ASA. He has extensive experience in leading and implementing industrial R&D and holds a PhD in electrochemical engineering. Corporate governance Fiven ASA does not have a corporate assembly, and therefore the general meeting elects the Board. Fiven’s board consists of 3 members, and 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 shareholder, the Board of Directors exercises the overall governance of Fiven ASA. The Audit Committee reports to the Board of Directors following the mandate prepared and approved by the Board of Directors. The Executive Chairman of the Board of Directors facilitates the reporting to the shareholder of Fiven ASA. Two of the three Board members have long term experience from the inside of the silicon carbide industry, assuring that the Board of Directors has sufficient operational expertise as well as comprehensive knowledge of the business conducted in the Fiven Group. The General Manager of Fiven ASA, currently also being the Fiven Group CFO, is responsible for the day-to-day management of Fiven ASA. The General Manager governs the operations 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, also include production site general managers and Chief Sustainability Officer. 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. Monthly management reporting is submitted by the management team of each segment to assist the Board in its work on monitoring and controlling the Group’s operations. The reports cover financial information of the Group’s key figures, matters related to health and safety, market development, operations and financial performance, and the status of other business-related matters. Quarterly and annual financial statements are reviewed by the Audit Committee and the Board. Risk Factors and risk management Market risk Automotive and construction are two of the largest markets to Fiven. The board monitors the implications of unsettling trends such as lack of semiconductors in automotive, and material cost inflation and supply chain disruption in the construction market. To reduce these risks, the board focuses heavily on developing new specialty products and diversifying into other markets, which shield the group from any acute risk on revenue. The Asian competition can exert intense pressure by sudden reducing standards products’ prices. In Europe, the market is dynamic, with many players competing in an inflationary cost environment and sudden changes in demand. In addition, the geopolitical tensions from the Ukrainian - Russian war has caused spikes in energy prices and fueled inflation. Globally, Fiven will keep facing fierce competition from players in Germany, China, Spain, and the US. However, Fiven will continue to counter the risk through its customer-centricity, superior delivery performance, and innovation. Board of Directors’ Report 21
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