ITEM 6 :  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

6.A. Directors, Senior Management and Employees

Directors

At present, our board of directors is composed of three members, including the chairman. None of the directors are affiliated with our principal shareholders. The current members of our board, their positions and the years of their original elections are as follows:

Thomas Thuresson has been our chairman since 2002. He is also our chief financial officer of the Group. He held various positions at PLM in Sweden and Germany. Mr. Thuresson joined Alfa Laval in 1988 and has held various positions, including controller of business area Automation 1988 to 1990, controller of business area Flow from 1990 to 1991 and vice president Group controller from 1991 to 1994. He has served in his current role since 1995, with key responsibilities including Group finance and control, treasury, real estate and information technology. Mr. Thuresson received his Bachelor’s Degree in Business Administration from the University of Lund in 1981. Mr. Thuresson has no outside directorships.

Johan Ahlgren has been our director since 2002. Mr. Ahlgren is General Counsel of the Alfa Laval Group. He worked as a notarial clerk at the District Court of Ängelholm from 1986 to 1988 and as a lawyer at Wistrand Advokatbyrõ from 1988 to 1992. Mr Ahlgren joined Alfa Laval in 1992. He worked as Corporate Counsel from 1992 to December 1999 in Group staff legal matters. He has held his current position since January 2000. Mr. Ahlgren holds a Master of Law from the University of Lund, which he received in 1986. Mr. Ahlgren has no outside directorships.

Sigge Haraldsson , the Alfa Laval Group chief executive officer since 1998, has been a director of ours since 2000. From 1970 to 1992, Mr. Haraldsson has held various positions within the Alfa Laval Group, including president of Alfa Laval Thermal AB from 1983 to 1992. From 1993 to 1998, he was a member of the Tetra Pak Group management, initially heading Processing and Packaging Systems, and from 1995 heading the Fibre Packaging division, the largest of the three divisions in Tetra Pak. He received a M.Sc. from LTH in 1970. Mr. Haraldsson is a member of the board of Hans Stahles Minnesfond.

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Senior Management

Alfa Laval Special Finance has no directly employed members of senior management. However, the following table sets forth the names of the Alfa Laval Group’s executive officers. Such executive officers are appointed by and serve at the discretion of the board of directors of Alfa Laval AB.

Sigge Haraldsson. See above.

Thomas Thuresson. See above.

Svante Karlsson is an executive vice president of Alfa Laval and president of our Equipment division. Mr. Karlsson joined us in 1984, where he has held various positions, including president of our former business area Thermal from 2000 until 2001, managing director of business segment Marine & Power from 1995 to 2000, business area controller of our former business area Separation from 1991 to 1995 and financial controller of Alfa Laval Industrie B.V., the Netherlands from 1986 to 1988. He has held his current position since 2001. Mr. Karlsson holds a B.Sc. in Business Administration.

Ulf Granstrand is an executive vice president of Alfa Laval and president of our Process Technology division. Since joining us in 1975, Mr. Granstrand has been executive vice president with regional responsibilities from 1999 to 2000, president of business area Thermal from 1992 to 1999 and head of business unit “Heat Transfer Components” from 1987 to 1992. Mr. Granstrand holds a M.Sc. from CTH.

Göran Mathiasson is an executive vice president of Alfa Laval and president of our Operations division since April 2003. Since joining us in 1979, Mr. Mathiasson has been in charge of Alfa Laval manufacturing and prior to that of thermal technology, including research and development, production development, system development and purchasing.  Mr. Mathiasson holds a M.Sc. from LTH.

Per Erik Lindquist is an executive vice president with regional responsibilities. Mr. Lindquist joined us in 2001, prior to which he was employed by Scania where he worked in the European sales and marketing organisation. Mr. Lindquist was formerly managing director of Scania, Belgium, a post he held until 2000. Mr. Lindquist holds an M.Sc. from Royal Institute of Technology, Stockholm.

Peter Leifland is an executive vice president with regional responsibilities. Since joining us in 1985, Mr. Leifland has been senior vice president in Alfa Laval Group management from 1997 to 1999, president of Alfa Laval Engineering AB from 1995 to 1997 and vice president and General Counsel from 1990 to 1995. He has held his current position since 1999. Mr. Leifland holds an LL.B., Lic. Spec and IMD (PED).

Peter Torstensson is a vice president with overall responsibility for corporate communications. He has held this position since 1999. Prior to that, he was managing director and key account director of Borstahusen Informationsdesign from 1992 to 1998 and managing director and account director of Marknadsbyrån, Malmö, Sweden from 1988 to 1991.

David Ford is senior vice president with overall responsibilities for personnel and human resources. Mr. Ford has held this position since 1993. Prior to that, he was personnel manager and director of Tetra Pak U.K. from 1990 to 1993, and technical training manager of Tetra Pak, U.K. from 1986 to 1990. He holds a diploma in

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Careers Guidance and a B.Sc. in Mechanical Engineering.

Nils Olof Björk became our senior vice president responsible for corporate development in April 2002. Mr. Björk joined Alfa Laval in 1975 and since then has held various positions in the company. He started as head of the materials laboratory in Lund, followed by positions as product manager for heat exchangers, head of Thermal in Canada, marketing director at Alfa Laval Thermal in Lund, head of Alfa Laval, Asia Pacific in Hong Kong and, since 1996, president of Alfa Laval, Japan. Mr. Björk has an M.Sc. and Ph.D. in chemistry from Lund University, Sweden.

None of the above members of senior management has any family relationship with any director or any other member of senior management.

6.B. Compensation

Total compensation, including salaries and pension payments paid by us and our subsidiaries to (a) the current members of our board of directors and (b) the executive officers who were employed by us in the year ended December 31, 2003 were SEK nil million and SEK 26 million, respectively.

Total compensation paid to our auditors, Ernst & Young, for the year ended December 31, 2003 was approximately SEK 14 million.

6.C. Board Practices

Under the Swedish Companies Act, our board of directors is ultimately responsible for the organisation and the management of our affairs. According to our articles of association, the board of directors shall consist of no less than three members and no more than eight members.

Under Swedish law, the managing director and at least half of our board members must be resident in a European Economic Area country unless exempted by the Swedish Patent and Registration Office. Under Swedish law, a director’s term of office (other than a union appointee) may not be more than four years, but is normally one year. Our articles of association provide that board members shall be elected at the annual general meeting of shareholders for a period until the end of the next annual general meeting of shareholders. A director may, however, serve any number of consecutive terms.

Directors elected at the general meeting of the shareholders may be removed from office by a meeting of the shareholders, and vacancies on the board, except when filled by an alternate director, may only be filled by a resolution of shareholders. Each year, if not otherwise stipulated in our articles of association, one director is elected chairman of the board by resolution of the board (unless elected by our shareholders) at the first meeting following its appointment.

Committees of the Board

Our remuneration committee of the Board of Alfa Laval AB consists of Anders Narvinger, Björn Savén and Jörn Rausing. The remuneration committee meets when necessary, but usually not less than twice a year. Executive directors are invited to attend the remuneration committee’s meetings as the members consider appropriate. The remuneration committee establishes and reviews remuneration and terms of employment of our executive directors, senior executives and other key personnel.

The question of appointing an audit committee according to the “Sarbanes-Oxley Act” has been discussed in the Board of Alfa Laval AB. The Board has chosen not to appoint an audit committee since the judgement is that the financial reporting and control within the Alfa Laval Group, the Alfa Laval Group’s policies concerning internal control, the external and internal audit and the reporting to the Board in these matters are such that a separate audit committee within the Board would not increase the Board’s insight and control over the operations. As a result, the entire Board will act as the audit committee. At two Board meetings during 2003 the Board has received reports from and met the external auditors of the Alfa Laval Group. At one Board meeting during 2003, the Board has received reports from and met the internal auditor of the Alfa Laval Group.

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Management Service Contracts

Unless required by legislation, we aim to have “at will” contracts with our senior management. Upon termination, our senior management is typically entitled to one month’s pay per year of service, subject to a minimum of 6 months’ and a maximum of 24 months’ compensation. Each contract with our senior management includes a non-competition clause.

Sigge Haraldsson, in his capacity as our chief executive officer, has an early retirement clause in his service contract, which gives him the option of retiring at 60 years of age at his request, or 55 years of age at the request of the company. In a press release on January 27, 2004 Sigge Haraldsson communicated his intention to retire in accordance with the agreement in connection with his sixtieth birthday in October 2004. He is entitled to a pension equal to 50.0% of his pensionable salary at the time of retirement if he retires after reaching 55 years of age but before reaching 58 years of age, and 70.0% of his pensionable salary at the time of retirement after 58 years of age irrespective of when he retires.

After the age of 65 years, Sigge Haraldsson is entitled to the following pension benefits:

For the part of Sigge Haraldsson’s salary at the time of retirement that corresponds to an amount up to 30 basic amounts (one basic amount being equivalent to SEK 38,600 in 2003 under the National Insurance Scheme), Sigge Haraldsson is entitled to Swedish mandatory legal benefits and the Swedish ITP pension plan scheme (“IPT”). For that part of Sigge Haraldsson’s salary at the time of retirement that corresponds to an amount between 30 basic amounts and 80 basic amounts, Sigge Haraldsson is entitled to receive an amount, which is 52.5% of such salary. For that part of Sigge Haraldsson’s salary Haraldsson is entitled to receive an amount, which is 32.5% of such salary.

For that part of Sigge Haraldsson’s salary at the time of retirement that corresponds to an amount up to 30 basic amounts,, Mr Haraldsson’s surviving family is entitled to a family pension in accordance with ITP. For that part of Sigge Haraldsson’s salary at the time of retirement that corresponds to an amount of 30 basic amounts and above, Mr Haraldsson’s surviving family is entitled to receive a family pension which is 16.3% of such amount. In addition to his entitlements under ITP, Sigge Haraldsson has a special family pension that represents a life long supplement.

Sigge Haraldsson does not have any separate agreement in relation to severance pay.

During 2003, we have recorded costs in relation to Mr. Haraldsson’s pension premiums of SEK 4.9 million, of which SEK 1.7 million relates to premium payments he would be entitled to receive upon early retirement.

Early retirement agreements are also in place for those directors and members of senior management over 50 years of age. This currently includes Ulf Granstrand, President for our Process Technology division, and approximately 20 managing directors throughout Alfa Laval. No other termination agreements exist with our directors and members of senior management.

6.D. Employees

Alfa Laval Special Finance AB has no direct employees. However, during the years ended December 31, 2003, 2002 and 2001 the Group employed 9,194, 9,292 and 9,693 employees, respectively. These figures are based on the average number of employees in each year.

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The following charts illustrate the geographical and functional distribution of the Group’s workforce for the year ended December 31, 2003:

The majority of our manufacturing personnel are members of a trade union, with the exception of those located at our manufacturing unit in Richmond, USA and those located at smaller manufacturing units in countries where union representation is not customary. Our sales personnel are typically not represented by trade unions. None of our senior management are members of any trade union. We believe that our relations with our employees and the unions to which they belong are good and we expect favourable relations to continue in the future.

6.E. Share Ownership

For a discussion of share ownership of the Company, see “Item 7: Major Shareholders and Related Party Transaction”.

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