YEAR 2014

Arctia Shipping safeguarding the environment The year 2014

Best icebreaking services • The year 2014 in brief...... 04 • CEO’s Review ...... 05 • News in 2014 ...... 06 SAFELY Shipping in brief • Operating environment...... 09 • Core messages and organisation ...... 12 ON ICY SEAS • Corporate social responsibility...... 14 The principal task of Arctia Shipping is to ensure the smooth flow Service areas • Icebreaking services...... 19 of winter navigation so as to enable the daily work of Finnish • Offshore services...... 22 • Oil recovery services...... 24 industry and citizens to proceed without disruptions caused by • Harbour icebreaking services...... 26 ice conditions. We achieved all of the service targets set for us on • Events services...... 28 the in 2014. Outside the icebreaking season, we also Personnel and governance successfully exported Finnish special expertise abroad. • Arctia as an employer...... 31 • Board of Directors ...... 33 • Management Team...... 34 • Fleet...... 35

Financial statement 2014

• Annual report...... 37 • Income statement ...... 43 • Balance sheet...... 44 • Financial statement...... 46 • Notes to the financial statements...... 47 • Auditor’s report...... 56

02 PROFITABILITY REMAINED AT A GOOD LEVEL The year 2014 All of Arctia’s business areas achieved positive results and cash flows. The company’s turnover and 01 profit fell slightly due to the easy ice situation on the Baltic and the shorter summer chartering peri- ods for the company’s multipurpose .

ARCTIA PARTICIPATED IN SEAFLOOR RESEARCH In the summer, the multipurpose Fennica provided assistance in seismic research to the north- east of . Arctia’s vessels are also extremely well-suited to operations of this nature. This successful chartering is a good example of the versatility of the Fennica and Nordica.

SERVICE TARGETS MET The ice winter on the Baltic was mild, but at the bottom of the Bay of Bothnia the icebreaking season continued until mid-May. All of Arctia’s conventional icebreakers apart from the Sisu took part in icebreaking operations. The service targets set were met for icebreaking with regard to aspects such as waiting times.

NEW HARBOUR ICEBREAKER FOR THE BOTHNIAN ARC The Ahto is the first new Finnish icebreaker in fifteen years. The vessel will be fitted with oil recovery equip- ment and will improve the reliability and emergency preparedness of northern ports. We continued our investment The Arctia Shipping fleet campaign in training for The Arctia Shipping icebreakers was complemented by a The foreign ministers of supervisors. Our objective for only accumulated 350 operat- new harbour icebreaker, the countries such as Canada and the period was to improve the ing days due to the late start of Ahto. The ship was mostly Iceland were introduced to ice- cooperation between vessels the ice winter. constructed in . breaking by Arctia Shipping. and Group management.

2014 In late summer, the Fennica In order to ensure the respon- The company’s finances The Arctic Economic Council provided assistance in seismic sibility of our sub-contracting remained on a solid footing, (AEC) established in September research mapping on the wa- chain, all equipment suppliers and we were able to maintain elected the CEO of Arctia ters off Greenland. and service providers were ship investments at a good Shipping, Tero Vauraste, as one issued with clear instructions level. of its vice chairmen. regarding responsibility.

Profit for the Personnel Turnover Operating profit financial period Gross investment Return on investment MEUR MEUR MEUR MEUR % Total

267 80 50 50 25 2014 261 311 75 40 40 20 Ship personnel 70 30 30 15 11.3 236 230 254 65 20 20 10

60 10 10 5 Shore personnel 2013

55 0 0 0 31 12 13 14 12 13 14 12 13 14 12 13 14 31 32 12.5

2014 2013 2012 2014 61.3 2014 16.8 2014 12.9 2014 15.6 2012 2013 63.0 2013 17.5 2013 13.4 2013 17.8 32.3 2012 75.3 2012 44.6 2012 39.9 2012 16.0

04 Cooperation on the Baltic Sea was drawn-out “How to break the CEO’s Review a given a new dimension ,as the ice” discussion. The company existing Nordic icebreaking treaty was obligated to increase the was complemented by a similar utilisation rate of its fleet and to treaty between Finland and Russia. improve its competitiveness across The Finnish Transport Agency all business areas. The continuity SUPPORTING FINLAND announced that it would exercise of the company’s main task of its icebreaking contract options icebreaking on the Baltic Sea Despite a minor decrease in for the Fennica and Nordica for must be secured by a complete turnover, all the business units 2017 and 2018. replacement of the fleet over the of Arctia Shipping posted next 15 years, financed entirely positive results and cash flows, Year of Polar geoeconomics by market-based instruments. The and the company’s profitability In 2014, market conditions were company will achieve this through remained at a robust level. The influenced by the geoceonomic competitive icebreaking on the life span of Arctia’s fleet was aspects of Polar development. The Baltic Sea and growth in Polar extended further as the five-year difficulties of the Russian market business. investment programme is nearing escalated regrettably quickly. Our completion. The new harbour customer’s Alaskan operation was Future prospects icebreaker Ahto was received from interrupted due to the customer’s The development of the Polar Uudenkaupungin Työvene Oy, and situation with the authorities. market will be delayed by the the vessel was put into service in The price of oil fell by 60–70%. international geoeconomic the Bothnian Arc. However, the company was able situation and its ramifications. to achieve good financial results The company has a solid contract Power on the Baltic Sea in the fiscal period despite the portfolio and projected profit The needs of our services’ end above-mentioned developments. for 2015, and the fiscal period is users were governed by the The company seeks to improve projected to be a profitable one. sluggish climate in international the Arctic business environment The operational decisions of our trade. Due to the mild winter, in cooperation with the Arctic customers may have some degree the need for icebreaking services Economic Council. of impact on the company’s was concentrated on the Bay performance. of Bothnia and eastern Gulf of Industrial peace achieved Finland. All service areas received The state owner outlined the excellent ratings for qualitative future of Arctia Shipping in late icebreaking service targets. 2014, putting an end to the Tero Vauraste, CEO

05 NEWS IN 2014

Late start to Fennica performed New icebreaker for Arctic Economic ice winter ice management Bothnian Arc Council established north-east of as the voice of trade Greenland and industry

The Finnish icebreaking season be- As the Alaskan operation was on In August, the latest addition to Canada’s chairmanship of the Arctic gan exceptionally late, and the first hold, the Fennica spent late summer Arctia’s icebreaking fleet was chris- Council culminated in September icebreaker only set sail from Kataja- in the waters off Greenland. The ves- tened Ahto in Uusikaupunki. The with the establishment of the new nokka for the north in mid-Decem- sel was last chartered for similar du- vessel was largely manufactured in Arctic Economic Council (AEC). The ber. However, high winds on the Bay ties in the autumn of 2011. Finland and is owned by a joint ven- council includes representatives of Bothnia meant that assistance The Fennica successfully provided ture of Arctia and the Port of Kemi, from the business sectors of eight was required until the middle of May, icebreaking assistance in seismic re- Arctia Karhu Ltd. The Ahto will mark- Arctic states and observers from six when the last icebreaker returned to search mapping. Crew rotation took edly improve the safety and smooth- organisations representing aborigi- its home port in . place via Spitsbergen. ness of winter navigation in the Bay nal peoples. Arctia’s icebreakers only accumu- of Bothnia. At its first meeting, the council lated 350 operating days. Of Arctia’s The roughly 40 metre-long har- elected the CEO of Arctia Shipping, fleet, the Kontio, Otso, Urho and bour icebreaker will assist merchant Tero Vauraste, as one of its vice chair- Voima were engaged in icebreaking vessels in the Bothnian Arc, centred men. Finland’s strengths include operations during the winter. The on the ports of Kemi and Tornio. The expertise in Arctic business and en- Fennica, Nordica and Sisu were on vessel is also well suited for escort vironmental conservation, together stand-by, but did not take part in towing, and is equipped with mod- with Finland’s future chairmanship operative icebreaking. ern oil recovery equipment. of the Arctic Council in 2017–2019.

06 NEWS IN 2014

Foreign ministers of Female captains Chaîne des Nordica displayed Canada and Iceland meet on the Rôtisseurs shield in Eurovision song visited icebreakers North-East Passage granted to contest Icebreaker Urho

Many international dignitaries vis- In April, the icebreaker Fennica was In October, the Finnish chapter Approximately one hundred mil- ited Arctia to learn about icebreak- the platform for a unique meet- of Chaîne des Rôtisseurs, Paist- lion European TV viewers witnessed ing in 2014, beginning with Iceland’s ing between two female masters inkääntäjät ry, granted Icebreaker that Finland is a land of icebreakers, Minister for Foreign Affairs, Gunnar who have navigated the North-East Urho the right to bear their shield as Finland’s postcard for the Euro- Bragi Sveinsson, and his entourage. Passage. Hanna Kujala, who com- as an indication of the high level vision song contest was filmed on Minister of Foreign Affairs John manded the Fennica on its way from of gastronomy of its galley. On board the multipurpose icebreaker Baird of Canada, the Chair of the through the Arctic Ocean to the same occasion, the society an- Nordica. The Finnish contestants, a Arctic Council, was seen on the Finland in the autumn of 2013, met nounced that it will grant Rotisseurs band called Softengine, took pro- bridge of one of Arctia’s icebreakers Ludmila Tibriayeva, a long-standing ribbons to Arctia employees chef motional photos on the icebreaker in June. veteran of the Murmansk Shipping Mikko Ervasti and sommelier Juhani in Inkoo in late February. Discussions with our esteemed Company. Luoto. Finland’s presentation culminated visitors revolved around Finnish ice- Tibriayeva was the first female The shield and ribbons are a fan- in a Finnish flag cut from the ice and breaking expertise and mutual busi- ship’s master in the Soviet Union tastic acknowledgement of the per- assembled on the helicopter deck ness opportunities. and a television celebrity. She served severance and training of Arctia’s of the Nordica. Softengine’s song as chief officer and master on galley crew. The salon of the Urho, “Something Better” did well in the merchant vessels, often travelling available for hire for private events, hosted in between Russia’s northern harbours thus joined an exclusive circle of . They came 11th, which and Japan. roughly a dozen top restaurants in is the best result since the victory by Helsinki. .

07 02 Arctia Shipping in brief

WORLD CHAMPION IN ICEBREAKING Arctia Shipping is a specialised shipping company entirely owned by the Republic of Finland. The UNIQUE FLEET company’s main lines of business are icebreaking, Arctia’s fleet includes the conventional icebreak- ice management, oil recovery and harbour assis- ers Voima (built in 1954/79), Urho (1975), Sisu tance services. The company’s turnover is slightly (1976) and Otso (1986). The Fennica (1993) and more than EUR 61 million, and it employs roughly Nordica (1994) are multipurpose icebreakers 260 Finnish people. capable of operating on all the world’s oceans. The Kontio (1987) is the only oil recovery ice- breaker in the world, and the Ahto (2014) is a next-generation harbour icebreaker. Business and industry

Operating environment

Shipping Finnish companies and Customs merchant ICEBREAKERS vessels SURROUNDED

International Finnish BY MORE THAN regulations on, Transport e.g. navigation Safety Agency and the Trafi JUST ICE environment The day-to-day operations of Arctia as a state-owned Arctia’s fleet International The Ministry of The Finnish specialised shipping company and crews customers, such Industrial Transport and Transport as energy standards and its vessels are often influ- Communications Agency companies enced by many parties, the most important of which are The Finnish Parliament described below. The Prime National Minister’s Office regulations and and ownership guidelines of steering different states

FINLAND

09 The ministry steers and supervises the opera- Finnish business and industry State ownership steering tions and follows the development of the Finnish Transport Agency and the Finnish Transport Safety Finland’s business sector and industry depend on The Prime Minister’s Office is responsible for the Agency Trafi. reliable year-round shipping. Individual compa- ownership steering of state enterprises that oper- nies contract their marine transport from the ship- ate on market terms. ping companies that own and operate the freight In 2014, the minister responsible for state own- The Finnish Transport Agency vessels. ership steering in the Prime Minister’s Office was The price of sea transport is affected by factors the Minister for International Development. The The Finnish Transport Agency determines the tar- such as the market situation, length of the voyage, Ownership Steering Department of the Prime get service level for icebreaking and defines the vessels required and travel times. In winter, sea ice Minister’s Office prepares and implements govern- number of icebreakers required for achieving this incurs additional costs in the form of vessels capa- ment ownership steering policy and steers state- level of service. Tenders are then invited from ship- ble of negotiating ice, longer travel times, higher owned enterprises. ping companies that provide icebreaking services. fuel consumption and shipping route fees. In 2014, the state owner outlined the future of The contracted icebreakers are at the customer’s Arctia Shipping in a white paper jointly prepared disposal for the duration of the Finnish icebreak- by the Ownership Steering Department of the ing season. The Finnish Transport Agency sets lim- Merchant vessels and shipping companies Prime Minister’s Office, Ministry of Transport and its on winter navigation according to the ice situ- Communications, Ministry of Employment and the ation. The Agency also decides when to dispatch Merchant vessels sailing to Finland use the services Economy and Ministry of Finance. individual icebreakers for assistance duties and of icebreakers if the ice situation and navigation when to recall icebreakers to port. regulations so require. Shipping companies pay a The Finnish Transport Agency has agreements shipping route fee to the state of Finland for their Ministry of Transport and Communications with several shipping companies on the use of ice- vessels arriving in Finnish ports. The amount of the breakers. shipping route fee is determined by factors such as An appropriation for winter navigation is allo- the size of the ship and number of annual calls at cated annually from the Budget ratified by Parlia- Finnish ports. The shipping route fee was halved ment. The appropriation is taken from the admin- Arctia Shipping Ltd in 2015, as the Finnish government wished to com- istrative branch of the Ministry of Transport and pensate shipping companies for the costs incurred Communications. This sum includes items such as This limited liability company is owned entirely by by the new Sulphur Directive. the contracting of icebreaking services. The state the state of Finland owns and operates icebreak- accumulates funds for the appropriation from ers. The company’s fleet includes five conventional sources such as the shipping route fees paid by icebreakers, two multipurpose icebreakers and shipping companies. one harbour icebreaker. The agreement between the Finnish Transport Agency and Arctia specifies

10 (IMO). ISM audits can also be conducted by clas- the environment, among other factors, must be sification societies. taken into consideration when operating in inter- national waters. International regulation is based on the conventions of the United Nations’ Inter- Finnish Customs national Maritime Organization (IMO). Key inter- national conventions include SOLAS (International Finnish Customs collect shipping route fees from Convention for the Safety of Life at Sea) for the shipping companies on the basis of calls at Finnish regulation of maritime safety and MARPOL (Inter- ports. The amount of the shipping route fee var- national Convention for the Prevention of Pollu- ies according to factors such as the size of the ship tion From Ships), regulating the conservation of and number of annual calls at Finnish ports. The the environment. return target for shipping route fees has tradition- ally been determined on the basis of the costs in- that all vessels owned by Arctia provide icebreak- curred by coastal merchant shipping services (lane National regulations and guidelines of different ing services on the Baltic Sea in the winter. upkeep, VTS, hydrographical surveying and ice- states Outside the Finnish icebreaking season, the breaking). Customs deliver the accumulated fees multipurpose icebreakers are chartered for ice to the Ministry of Finance. Various states have also enacted national regula- management and other duties in Polar areas. The tions that must be taken into account when oper- icebreaker Kontio also serves as the European ating in their waters. An example of such regula- Maritime Safety Agency’s oil recovery vessel on International customers tions are the emission standards specified by the the Baltic Sea. All crew members of Arctia’s vessels U.S. Environmental Protection Agency (EPA) for are also trained in oil recovery operations. The multipurpose icebreakers Fennica and Nordica vessels operating in Arctic waters. are capable of operating in various roles in chal- lenging conditions on all of the world’s oceans. Finnish Transport Safety Agency Trafi Customers such as international energy companies Industrial standards have chartered the multipurpose icebreakers for The Finnish Transport Safety Agency is the statuto- ice management and many other support roles Work in multinational environments is also fre- ry supervisory authority for ship safety. Trafi moni- outside the Finnish icebreaking season. quently regulated by exacting international stand- tors compliance with rules and regulations, and ards applying to specific fields of industry such as organises activities such as the ship inspections re- the energy industry. quired by directives. International regulations Trafi’s inspectors also conduct safety inspections to monitor compliance with the ISPS and ISM Various international codes specifying and gov- codes of the International Maritime Organization erning operations with regard to navigation and

11 Core messages and organisation

WORLD CHAMPION Arctia supports sustainability • Arctia’s icebreakers contribute to the safety of Arctic operations in order to prevent accidents IN ICEBREAKING in fragile natural environments • Arctic oil recovery is an area of special expertise for Arctia Finland’s special competence in the field • Finland possesses the best know-how regarding of sea ice is constituted of a combination safe operations in ice-covered waters. of expertise accumulated over decades Arctia ensures the smooth flow of winter Finnish icebreaking expertise is also an Arctic and state-of-the-art ship technology. navigation to and from Finland’s ports export product • As the only country in the world, all of • Arctia has world-class expertise in operating The title of world champion is clinched Finland’s ports freeze in winter icebreakers by an uncompromising safety culture. • Finnish icebreaking has traditions reaching • The year-round use of multipurpose icebreakers back 125 years provides cost-effectiveness for the company • Icebreaking secures Finnish welfare • Arctic operations create new jobs

12 Values Vision

Safety is the cornerstone of all our operations We are the leading and most desired part- COMPETENT ner for icebreaking on the Baltic Sea and While we produce high-quality services, we also Polar ship services. strive to operate safely both on land and at sea. We wish to learn new things and We try to prevent occupational accidents and en- share our competence with our col- vironmental accidents. We support our employees’ leagues. Competence and commit- physical, mental and social well-being. The envi- ment to goals are a requirement for Mission ronmental effects of our operations are considered our success. in everything we do. Arctia Shipping constantly develops its safety HELPFUL activities and the personnel’s awareness of safety We secure Finland’s winter navigation and environmental issues, and encourages every Cooperation with our clients forms efficiently. We deliver reliable and safe employee to take a preventive and responsible ap- the foundation of our operations. maritime service packages in Polar areas. proach to safety issues. We aim to satisfy our customers; their needs guide our actions. We always provide good service to our clients and we are proud of it.

EFFICIENT Arctia Shipping Ltd Organisation of Tero Vauraste We create a good work atmos- Arctia Shipping, 2014 CEO phere by valuing our own work and that of others. We perform our work professionally and safely and, through our efficiency, guarantee the continuation of our operations. Arctia Icebreaking Ltd Arctia Offshore Ltd Arctia Karhu Ltd Markus Karjalainen Tero Vauraste Markus Karjalainen Vice President Vice President CEO (in addition to other duties)

13 Corporate social responsibility Guidelines

Arctia’s values constitute the principles implemented by RESPONSIBILITY AT THE the company in all opera- tions and management. HEART OF OPERATIONS Values Corporate social responsibility (CSR) plays a central role in all is a necessity for Finland’s trade and in- In addition, day-to-day work dustry, and thus for the entire national is supported by a number operations of the Arctia Group. The CEO and Board of Directors economy. We contribute to the protec- of guidelines and company are responsible for including corporate social responsibility issues tion of fragile marine environments policies. The most impor- through high oil-recovery capacity and tant guidelines and policies in the Group’s management system, and for the regular reporting expertise. Our expertise in oil recovery include: is described in its own chapter in this of corporate social responsibility and the achievement of targets The Ethical Guidelines report. The high technology of Arctia’s related to it to the Board of Directors and Management Team. vessels and extensive training and The Safety Policy ice experience of their crews afford a As the first Finnish shipping company, integral part of the description of our unique advantage in Arctic operations. The Environmental Policy Arctia published a corporate social re- operations. The purpose is to commu- Long-term business objectives and sponsibility report in connection with nicate the fact that corporate social policies are defined in the company The Equality Plan its annual report in 2011. Our corpo- responsibility is genuinely a part of our strategy. The strategy is reviewed and rate social responsibility reports have business operations: sustainability and updated on a regular basis. The meas- Arctia Shipping Ltd adopted been drawn up on the basis of the state consideration for the environment take ures and indicators required to achieve a management remunera- owner’s policy, published as a ratified centre stage in all our operations. targets are determined according to tion scheme in the 2012 guideline in a decision-in-principle of the policies outlined in the strategy. fiscal period, and the system remained in effect in 2014. the Prime Minister’s Office. Separate targets and indicators are as- Based on feedback received on our Operating principles signed to business and administrative Remuneration system previous reports, we have now for the units in support of the strategy. Pro- first time integrated responsibility re- In the field of CSR, Arctia’s strengths gress towards strategic targets and the porting into the annual report as an lie in its core operations. Icebreaking measures adopted to achieve them are

14 regularly reviewed, either on an annual basis or more frequently. STAKEHOLDER EXPECTATIONS

Owner Investment capacity, meeting Operating environment and stakeholders qualitative icebreaking targets

Direct customers Finnish Transport Agency / High-quality services In practice, icebreaking or ice management is an Ministry of Transport and corresponding to service operative activity, in which the vessel’s power and Communications descriptions and agreements, technical features are used to break ice. The op- Oil and energy industry operators responsible operations, cost- erating environment surrounding icebreaking is Offshore construction companies effective pricing more complex, however, and can be challenging European Maritime Safety Agency (EMSA) to fathom even for our stakeholders. We have, Towing and marine rescue therefore, described our operating environment customers with its key operators and their roles on pages 8–9. Ports of Kemi and Tornio The principal stakeholders of Arctia Group are Ice Advisors customers its international and domestic customers, opera- Events customers tors in the marine and energy clusters, transport End customers Finland’s export and import Quick, reliable and high-quality authorities and the owner. We engage in constant trades service dialogue with our stakeholders at various levels of Industry the organisation. Shipping companies During the past fiscal period, we placed par- Own personnel Shore personnel Solvency, long-term and high- ticular emphasis on improving the cooperation Ship personnel quality HR policy between operators involved in domestic icebreak- Other stakeholders Winter navigation operators Information flow, cooperation, ing. We increased communication between Arctia, Veeteede Amet (EMA) maintenance of own service the Finnish Transport Agency, Swedish icebreakers, level the Finnish Transport Safety Agency, the industrial Sjöfartsverket sector, ports, VTS centres, pilots and other marine Rosmorport operators. Russian Ministry of Transport Finnpilot VTS Regional operators Understanding of regional Ports operations, cooperation, main- Local authorities tenance of own service level, development

15 Financial responsibility STAKEHOLDER EXPECTATIONS

The task of the Arctia Shipping Group is efficiently Towing operators Port of Kemi Information flow, cooperation, development and profitably to provide icebreaking services in accordance with the going concern principle. Arc- Oil recovery and the environ- Ministry of the Environment Information flow, cooperation, tia’s icebreakers safeguard Finnish exports and ment Finnish Environment Institute development imports in the winter season, and guarantee the SYKE economic viability of northern ports. The compa- Lamor ny’s entire fleet capacity was utilised in accordance with the agreements valid for 2014. Maritime authorities, interna- Finnish Transport Safety Agency Responsibility, information flow, tional organisations IMO cooperation, development The key indicator for icebreaking services is the IMCA average waiting time of customers during the ice- HELCOM breaking season. The principal financial indicators monitored by the company are turnover, operat- Arctic operators Ministry for Foreign Affairs Solvency, responsibility, in- Arctic Council formation flow, cooperation, ing profit, operating margin and cash flow. Other Arctic Economic Council (AEC) development monitored indicators include accident frequency, Finnish Meteorological Institute absences due to illness and off-hire days. Non-commercial usage of the The company must have sufficient solvency to northern Sea route passage enable investments in the fleet. The average age Arctic Society of Finland of Arctia’s fleet is roughly 30 years, and in the Other stakeholders Journalists, teachers, scientists Solvency, responsibility, in- future the monetary amounts of investments re- Dockyards formation flow, cooperation, quired to maintain the fleet in good condition will Suppliers and service providers development grow. Gross investment in 2014 totalled approxi- Trade unions mately EUR 16 million, and investment will prob- Maritime colleges ably remain at this level for the next few years. Maritime research institutes Classification societies The most significant investment in 2014 was the Insurance companies purchase of a new harbour icebreaker. Financers, banks The Group resorts to tax planning for its direct taxes within the scope permitted by law. Since all Group subsidiaries are Finnish, the principle is to minimise the taxation of subsidiaries and to allo- end, the Group has used Above-plan deprecia- Group collects indirect taxes in accordance with cate tax payment to the parent company. To this tion and group contributions where possible. The the Finnish Tax Administration’s instructions.

16 Taxes and comparable fees paid in 2014, Finland Financial key figures

2014 2013 FINANCIAL CAPITAL FLOWS, MEUR (31 DEC) 2014 2013 2012 Direct taxes paid for the fiscal period, MEUR Personnel costs (including pensions and other indirect personnel costs) 18.9 Income tax 3.1 2.3 21.3 24.9 Employer’s contributions 0.4 1.7 Dividends paid to owners 0.0 0.0 0.0 Real estate tax 0.01 0.00 Investment 15.6 17.7 16.9

Taxes collected for the fiscal period, MEUR Distribution of turnover, MEUR Withholding tax 4.7 5.5 Finland 34.7 35.1 32.4 Tax at source 0.0 0.01 Other EU countries 0.7 0.8 8.2 VAT, sales 1.3 1.2 Countries outside the EU 25.9 27.1 34.7 VAT, purchases 2.8 2.9 Other taxes 0.1 0.1 Distribution of purchasing, MEUR Suppliers 3.1 2.7 3.0 Service providers 5.2 5.1 6.2 Turnover by country, MEUR 61.3 63.0 EBT by country, MEUR 16.1 16.7 The Group repaid the loan taken out in connection with the incorporation Personnel by country 261 267 of the Shipping Company to the State Treasury in 2012. The distribution of purchasing is based on the distribution in the Group’s accounts.

Charity and sponsorship

EUR 2014 2013 2012 Children and youth 1000 - - Science, research and education 8,240 8,520 7,500 Culture - - - Sports and exercise - - 2,500 Political subsidies - - - Civic and environmental organisations 200 200 -

A decision in principle made in 2013 specifies that Arctia Shipping Ltd does not support or sponsor sports or sign cooperation agreements related to sports. Arctia Shipping Ltd does not support religious or political organisations.

17 Service areas

OIL RECOVERY SERVICES The icebreaker Kontio has been fitted out as an oil recovery ship with a number of recovery systems and a large tank for recovered oil. The Kontio is an on-duty ship of the European Maritime Safety Agency. Arctia is also interested in upgrading its other icebreakers into oil-recovery vessels.

ICEBREAKING IN THE BALTIC The conditions and the extent of ice cover in the Baltic Sea vary from year to year. Finland’s HARBOUR ICEBREAKING industry and business life require regular Arctia offers harbour icebreaking services and reliable shipping also in winter. Arctia’s in the Bothnian Arc. The company’s vessels icebreakers assist merchant vessels in a diverse operating in this area consist of the state- manner, ensuring the smooth flow of winter of-the-art icebreaker Ahto and harbour tugs navigation in every respect. Ulla and Jääsalo. The Ahto is also fitted with modern oil recovery equipment.

OFFSHORE SERVICES The operations of this business unit are based on the use of multipurpose icebreakers outside the Finnish icebreaking season. The Fennica and Nordica are suitable for a multitude of demanding maritime operations, in both icy and open waters. Icebreaking services Icebreaking services Turnover MEUR

27 ONLY THE SISU REMAINED IN PORT 26 25 The drop in port visits was a result of The mild ice winter peaked already in the first week of February. 24 the mild winter, as traffic restrictions However, pack ice at the bottom of Kvarken created a need for 23 were comparably shorter than in 2013. 13 14 icebreaking assistance until the second week of May. The service The operation of merchant shipping in all conditions is vital to Finland’s 2014 targets for icebreaking were met. foreign trade. Arctia works in close co- 24.3 operation with the Finnish Transport Agency, Swedish icebreakers, the Finn- 2013 25.2 Successful icebreaking is a team effort ish Transport Safety Agency Trafi, the industrial sector, ports, VTS centres, pi- Operating profit All conventional icebreakers operated lots and other marine operators. MEUR by Arctia Icebreaking Ltd, with the ex- Working cooperation guarantees the ception of the Sisu, assisted winter navi- mobility of people and goods with min- 6 gation in the Gulf of Finland, in Kvark- imal delays, regardless of the harshness 5 en and the Bay of Bothnia. of the winter. More than 80 per cent of The icebreaking season started on 13 Finland’s foreign trade relies on ship- 4 December 2013 and ended on 14 May ping, and Arctia is tasked with ensur- 3 2014. The fleet accumulated a total of ing for its part that the raw materials, 2 350 operating days during the season components and finished products of 13 14 (579). The number of traffic-restricted Finland’s industries reach production port visits equalled 6,518 (13,484) dur- or customers in time, and that store 2014 5.0 ing the icebreaking season. shelves remain stocked with groceries and other goods. 2013 4.9

19 the ice spread. The first Finnish icebreaker depart- 2008. The first two weeks and final week of March

Icebreaking services ed northwards at the usual time, after Finland’s were milder than usual, but the third week was Independence Day. colder than normal. The month’s median tempera- A thaw began after this; the winds turned ture on the waters around Finland was from three southerly and the weather grew warmer – the ice to nearly five degrees higher than the average. As stopped spreading. December 2013 was consider- a rule, such mild weather is experienced in March ably milder than usual everywhere in Finland. The only once or twice a century. The ice cover was un- prevailing southerly winds packed the little ice on commonly small at the end of March. the Bay of Bothnia into a dense field in the north- An unusually mild March was followed by a Jouni Vainio, east corner of the bay. warmer than average April. April on the seas Ice Advisor This spell of mild weather continued in January, around Finland was more than two degrees warm- Finnish Meteorological but the weather finally grew colder around the er than normal. The ice melted fairly evenly but Institute 10th of January, and the remainder of the month slowly. At the end of April, the fast ice at the bot- was colder than usual. The cold weather started tom of the Bay of Bothnia was 30–60 cm thick, and freezing the sea, and the ice cover expanded rap- very dense pack ice 15–60 cm thick predominated idly. Even though the glacial weather made the ice off Kemi and Oulu, outside the zone of fast ice. Mild ice winter in expand rapidly in January, sea ice remained thin- Other areas of the Baltic Sea were free of ice. ner than normal for the time of year. The thickness The beginning of May was chillier than usual, of the ice reached half a metre at the bottom of and the ice on the Bay of Bothnia melted slowly. 2013–2014 the Bay of Bothnia, but remained around 15 cm The last of the ice nevertheless melted and the Bal- elsewhere on Finland’s coasts. tic Sea was free of ice on 14 May, nearly two weeks The freezing weather continued in early Febru- earlier than on average. Categorised by the greatest extent of sea ice dur- ary, and the peak of the 2013–2014 ice winter was ing the winter, the 2013–2014 ice winter was mild. reached on 7 February. On this date, ice was pre- The extent of sea ice peaked on 7 February, about sent over an area of 100,000 km². The frost abated three weeks earlier than normal, with ice present after that, and the thickening of the ice slowed over an area of 100,000 km². down. February was uncommonly mild in Finn- The weather grew colder towards the end of No- ish waters – the average temperature was four to vember, and new ice started forming in the north- eight degrees higher than in the reference period. ernmost coves of the Bay of Bothnia, but the bot- At the start of March, the ice fields were densely tom of the Gulf of Finland remained completely packed into the north part of the Bay of Bothnia free of ice. The ice situation was normal in relation and into the north-eastern corner of the Gulf of to the time of year. Cold weather continued and Finland. March was this free of ice last in 1992 and

20 Icebreaking services Ship waste in 2014

Ordinary sorted solid waste Unsorted waste

Organic Glass Metal Plastic Cardboard Paper Other IB KONTIO 0.4 t 0.08 t 6 t 0.3 t 0.9 t 0.4 t - 4 t IB OTSO 0.6 t 0.02 t 0.7 t 0.08 t 0.1 t 0.2 t - 2 t IB SISU 0.7 t 0.3 t 3.2 t 0.9 t 0.4 t 0.6 t 0.4 t 1.5 t IB URHO 4.3 t 0.5 t 0.5 t 0.1 t 2 t 1 t 0.2 t 1 t IB VOIMA 2 t 0.1 t 1.5 t 0.2 t 0.2 t 0.5 t 0.3 t 2 t MSV FENNICA 4.01 t 0.15 t 1 t 4.01 t - - 0.33 t 31.75 t MSV NORDICA 10 m3 1 m3 5 m3 16 m3 21 m3 10 m3 - 231 m3

Problem waste, solid Problem waste, liquid

Oily waste Batteries Lamps, etc. Other Oils Coolants Refrigerants Paint Other IB KONTIO 0.5 t 4/200 pcs 150 pcs 5,000 kg* 43 m3** - - 10 kg - IB OTSO 0.4 t 200 pcs 160 pcs - 13,000 l** - - 10 kg - IB SISU 2 t 300 pcs 220 pcs 22 kg* 81,700 l*** - - 7 kg - IB URHO 0.4 t 50 pcs 50 pcs 20 kg* - - - 50 kg 100 kg IB VOIMA 0.2 t 300 pcs 150 pcs 15 kg* - - - 150 kg 30 kg MSV FENNICA 0.3 t 915 pcs 200 pcs - 77,500 l** - 10.1 kg - 760 kg MSV NORDICA 1 m3 400 pcs 450 pcs 100 kg* 47.5 m3 - - 110 kg -

Liquid waste

Bilge water, other oily water Lavatory water Into city network (suction draining) Other IB KONTIO 40 m3 500 m3 - - IB OTSO 130 m3 800 m3 200 m3 - IB SISU 38 m3 350 m3 - 300 m3 IB URHO 44 m3 - 10 m3 - IB VOIMA 54 m3 30 m3 30 m3 - MSV FENNICA 106.1 m3 380 m3 159.9 m3 2,153.9 m3 MSV NORDICA 52.3 m3 83 m3 20 m3 -

*incl. asbestos **delivered on shore / off board also in ports other than Katajanokka ***delivered on shore, L&T Ltd responsible for management

21 Offshore services Offshore services Clear rules for subcontractors

STUDYING THE BOTTOM OF A purchase centralisation project was launched in 2014 in order to ensure THE ARCTIC OCEAN responsibility across the subcontracting chain. MSV Fennica provided assistance in seafloor research off Responsibility guidelines the east coast of Greenland during the period. for equipment suppliers and service providers are an The ship was tasked with breaking the ice on the integral part of the project. In the future, Arctia route of a seismic research vessel. During the Shipping Ltd will select its domestic icebreaking season, the ships focused suppliers on the basis of written selection criteria. on maintenance and renovation work. The criteria specify the bases for auditing suppliers and/or subcontractors, the responsibility requirements set by Arctia for its suppliers, and the documentation required before entering into a partnership. Purchasing will be limited to suppliers who comply with the occupational safety requirements of

Continues >

22 For Arctia Offshore’s vessels, the mul- icebreaking season, when our Arctic ment between Arctia Offshore and tipurpose icebreakers Fennica and customer announced that it would skip RMC Rauma provided shore power in Offshore services Nordica, the season was mostly spent the 2014 operating season and focus place of electricity generated by har- in maintenance and renovation work. fully on preparations for 2015. bour generators. The agreement is val- Arctia Shipping. Company The ships were chartered to the Finn- Together with the main customer, we id indefinitely and enables the Fennica personnel responsible for ish Transport Agency from early Janu- looked for alternative chartering op- and Nordica to be based in Rauma also procurement will follow the ary until the middle of April. Due to the portunities for our vessels, and the Fen- in future seasons. same criteria in their work. mild ice winter in the Baltic Sea, how- nica conducted an approximately three Arctia’s service providers ever, the vessels did not take part in ac- months long Ice Management opera- must be registered with tual icebreaking operations in Finland. tion to the east of Greenland, assisting Focus on maintenance and renovation a contractors’ obligations Towards the end of the year, the Finn- the vessels of the TGS hydrographical and liability service or ish Transport Agency announced that it surveying operation. The operational situation enabled Arc- be otherwise capable of would exercise its icebreaking contract tia Offshore to invest in extensive main- demonstrating that their options for the Fennica and Nordica for tenance and renovation work on its ves- operations are at the level 2017 and 2018. Berth in Rauma sels. New deck cranes suited for five-ton required by the Act on personnel lifting were installed on both Contractor’s Obligations The berths of our multipurpose ice- ships, and the electrical systems of the and Liability when Work is MSV Fennica in the waters off breakers changed many times during Nordica received an update. The looks Contracted Out. Suppliers Greenland the season, alternating between Hel- of the vessels were spruced up ,and are required to act in sinki, Inkoo, Naantali and Rauma. The crew comfort was promoted by reno- accordance with good The initial uncertainty surrounding berth was finally established in the vating the interior surfaces and making business ethics. summer operations was lifted after the dockyards of Rauma, where an agree- improvements to exercise facilities. The The shipping company end of the season saw the ships in fan- audits its suppliers in order tastic shape for future operations on to ensure the realisation of Turnover Operating profit the world’s oceans. their responsible operating methods and development MEUR 2014 MEUR 2014 plans. Supplier audits are 38 14 principally carried out by 37 35.8 13 11.8 Arctia employees with IRCA

36 2013 12 2013 QMS Lead Auditor training. 35 37.3 11 13.0 34 10 13 14 13 14

23 Oil recovery services Oil recovery services Northern challenges CONTINUOUS LEARNING The cold and dark conditions create challenges for Finnish Arctia invests heavily in oil re- The constantly increasing volume of recovery of oil from icy waters in par- and Arctic oil recovery alike marine oil transport, particularly in the ticular is a special field of expertise in in winter. The growing inter- covery research and develop- Baltic Sea, and the opening of the Arctic which great expectations are placed on national interest in oil recov- ment. The objective is to in- to the exploitation of natural resources innovative Finnish technology. Efficient ery from icy waters will also are placing increasing emphasis on oil oil recovery also requires up-to-date improve Finland’s capacities crease an awareness of and recovery expertise also in icebreaker ice and weather information and mod- and readiness in the Gulf of practical skills in oil recovery operations. The growth of the com- els for predicting the movement of oil Finland and Bay of Bothnia. pany’s business also requires the con- slicks. Unlike in the Baltic, oil from the sea, particularly in icy tinuous improvement of oil recovery recovery methods in the competence and capacity. The world’s large oceans are not conditions. limited to mechanical recov- ery. Plans include the use of dispersants (agents that alter the chemical composition of oil) and burning. Mechani- cal oil recovery is the least controversial method, but its application is mostly limited to small oil spills. Improving the capacity of mechanical oil recovery, particularly in winter conditions, is a major challenge for oil recovery equipment manufacturers. Continues >

24 which float next to the vessel’s enhance current oil recovery prepared- Trained crews and first-class equipment and guide the oil into the oil recovery ness. Adding oil recovery capability to

Oil recovery services system. The oil collectors attached to existing icebreakers would be an ex- The discussion on oil recov- Arctia Shipping has been determined- the rigid sweeping arms can be either tremely cost-effective way of increasing ery should also take account ly improving its oil recovery capacity. skimmers or brush skimmers. The oil recovery capacity. The conversion only of the characteristics of the Practically the entire crew of Arctia has collector type depends on the qualities costs a few million euros, whereas the oil being recovered and the been trained in oil recovery operations of the oil to be collected. With its rigid cost of a new vessel is measured in doz- consequent demands on the in recent years. sweeping arms, the vessel has a sweep- ens of millions. recovery equipment. Only a The Kontio is the first icebreaker in ing breadth of over 48 metres. small number of vessels in the world with oil recovery capacity. The other collection system consists Finland’s current oil recovery The Kontio offers on-call oil recovery of a robot skimmer and heavy, inflated State-of-the-art technology fleet are suitable for recover- services to the European Maritime Safe- open-sea boom, which an assisting ves- for the Ahto ing the most common varie- ty Agency (EMSA), and the icebreaker sel tows in a J-shaped configuration to ties of crude oil. Such oil serves as the EMSA’s flagship in the the side of the main vessel. The harbour icebreaker Ahto, com- contains volatile gases and northern Baltic Sea. The crews of Arc- A radio-controlled robotic skimmer pleted for service in the Bothnian Arc, require ignition protection tia’s other icebreakers take turns in oil is then laid inside the boom’s J-shaped will also be equipped with the latest in the vessels. recovery duty on board the Kontio in curve alongside the vessel’s hull. The oil recovery equipment. Even before Another significant chal- the summer. The practical competence skimmer collects oil from the bottom of construction of the Ahto began, Arctia lenge to oil recovery in the of personnel is honed by quarterly ex- the boom curve as the two vessels move Shipping made a Commitment for the Arctic is posed by the thin- ercises held in the Baltic. slowly ahead. The skimmer can also be Baltic to the Baltic Sea Action Group ness of logistics networks in However, the European Union does used in winter conditions. Depending (BSAG) regarding the improvement of northern areas. Oil recovery not offer this service for first stage oil on the receiver’s capacity, the Kontio’s oil recovery capacity in the Bay of Both- will require the processing of spill response by Member States. In- pumps can empty its oil collection tanks nia. large material flows, which stead, the intention is to offer addition- in less than four hours. Arctia also contributes actively to re- in turn requires careful plan- al response capacity in major oil spills. search on oil recovery from icy waters. ning and the reinforcement The company is a member of the oil of northern infrastructure. An icebreaker is a cost-effective recovery working group of the Arctic It has also been suggested The world’s first oil recovery oil recovery vessel Council, which launched the IMOR pro- that oil recovery equipment icebreaker ject for studying the behaviour of oil in should be made mandatory Arctia is also interested in upgrading icy seas towards the end of the period on all vessels navigating The Kontio’s tanks can hold over two its other icebreakers into oil-recovery as part of the Arctic Seas programme northern areas. thousand cubic metres of collected oil, vessels. Particularly in winter, icebreak- funded by the Finnish Funding Agency and it has two separate oil collection ers work at crossing points for mer- for Innovation TEKES. systems. One of the oil collection sys- chant vessel traffic. Equipping them as tems is based on rigid sweeping arms, oil-recovery vessels would significantly

25 Harbour icebreaking services

Harbour icebreaking services Ahto participated in the FINLAND’S NEWEST ICEBREAKER development of Arctic oil recovery From now on, the increas- Ahto improves safety and smoothness Towards the end of the peri- ing amount of shipping in the of winter navigation in the Bay of od, Arctia launched the IMOR Bothnian Arc will be safeguard- Bothnia research project to improve the possibilities for oil recov- ed by a next-generation ice- The latest addition to Finland’s ice- ery in icy conditions at sea. breaker with excellent towing breaking fleet was christened Ahto. The The project’s primary focus new harbour icebreaker commissioned is to examine how icebreak- capabilities. The Ahto, mostly by Arctia Karhu Ltd was launched in ers should be used in oil spill constructed in Finland, start- March in Riga, . After outfitting areas in order to facilitate in Uusikaupunki, the icebreaker per- optimal success in oil recov- ed its work in the ports of formed trial runs in July and was chris- ery, for instance when a large tened in mid-August. Kemi, the home brush skimmer is used. Other Kemi and Tornio. port of the Ahto, organised a handover focus areas include the be- celebration in September. haviour and drifting of oil in In November, Arctia Karhu began the recovery area. harbour icebreaking operations in the IMOR is a joint project of ports of Tornio and Kemi in accordance Lamor Corporation and Lap- with its long-term service agreements. land rescue department, part The new harbour icebreaker was thus of the Arctic Seas programme put into action immediately at the start funded by Tekes – the Finn- ish Funding Agency for Inno- vation. Field testing for the project will be carried out on the harbour icebreaker Ahto.

26 Harbour icebreaking services of the icebreaking season. The ves- ume of traffic in the area is growing sel will be outfitted with oil recovery and reliable year-round harbour servic- equipment during 2015. es are a precondition for the systematic IB Ahto In addition to icebreaking, the Ahto development of business operations. Length: ...... 40 m is capable of performing demanding A transfer of business between Port of Beam:...... 12.8 m escort towing operations. Icebreaking Kemi Ltd and Arctia Karhu Ltd was car- Draught:...... 5.5 m and escort towing are different types of ried out in September, when the tow- Propulsion output: �������� 3.6 MW activities. In icebreaking, the icebreaker ing business operations of the Port of Crew:...... 3 persons typically breaks the ice and tows the Kemi were transferred to Arctia Karhu Ice class:...... 1A Super assisted vessel. Escort towing, on the along with most of the permanent staff. contrary, is more dynamic since the ice- The lease agreements between the breaker may have to tow the assisted company and the Port of Kemi for the vessel sideways, which involves large old harbour tugs Jääsalo and Ulla also power variations. This is the first time entered into force at the same time. these functions have been combined in a single vessel. Agreement with Port of Oulu expired

High proportion of domestic work During the 2014 fiscal period, Arctia Karhu Ltd continued providing harbour The next-generation harbour ice- icebreaking and towing services to the breaker was built by Uudenkaupungin Port of Oulu, using the harbour ice- Työvene Ltd. The ship was designed in breaker Tuura owned by the City of Finland. The hull was built in the Riga Oulu. The harbour icebreaking Shipyard docks from Finnish Ruukki agreement with Port of Oulu steel. The main engines were delivered Ltd expired at the end of the by Wärtsilä’s plant in Vaasa, and the review period. propulsion devices by Rolls Royce from Rauma. For the Port of Kemi, the new ice- Kai Valtari, breaker entails improved icebreaking, Master of harbour towing and assistance capacity and, icebreaker Ahto above all, increased reliability. The vol-

27 Events services Events services We favour A CONFERENCE VENUE FOR GASTRONOMES local food The mess of the icebreaker On the eve of May Day, a festival tent The restaurant services was erected on the aft deck of the Urho offered by Arctia Events Urho has hosted a variety of for summer visitors. Covering the out- whenever possible use local guests over the decades, from door deck space enabled the icebreaker ingredients produced in Fin- to accommodate 100 conference guests land. The menus offered by heads of state to ice hockey or 70 dinner guests, whereas the mess Events are designed around world champions. room can only fit 40 guests in normal local food by the chefs serv- circumstances. This expanded venue ing on board our ships. The staff received a magnificent saw heavy use all the way until late "Our customers have given recognition for their commit- September. positive and encouraging feedback," says Event Coor- ment to excellence: the Shield dinator Pia Broumand. of the Rôtisseurs. Better quality through training A top-level training event was organ- ised in the premises of Helsinki Culinary Festive mood all year School Perho for our chefs in 2014. The chefs were trained by chef Risto Mikko- We were able to offer Events services la, known as a judge from Master Chef throughout the fiscal period, since ei- Finland, and chef Tommi Karhu, who ther the Urho or Sisu was at berth in has also been trained as a ship’s chef. Katajanokka and available for visits at The three-day event focused on build- all times. A multitude of conference, ing the expertise of our galley staff and dinner or state guests accordingly fre- improving their product knowledge. quented the mess rooms of the ice- The main themes of the training includ- breakers every week. ed new vegetarian menus and lighten- Continues >

28 ing the daily meals of our crews. The Voima was premiered at the birthday chefs also planned and cooked 1970s party, to which many veterans of ice- Events services banquet menus and a trendy Finland breaking who have served on the Vo- Particular attention has menu and rehearsed some special situ- ima were invited. A part of the Voima been paid to the energy ef- ations that may arise when catering to exhibition will be transferred to the ficiency of our ships’ galleys international customers. Maritime Museum of Finland in Kotka. when replacing equipment Our galley crews have also learned and appliances. For example, how to use kitchen appliances in a the refrigeration equipment more diverse manner and tested some In the photograph from the left: Arctia’s family day became tradition of the Urho was replaced in new cooking methods. Markku Veijalainen, 2014. Mikko Ervast, Juhani Luoto, Arctia’s family day, organised for the We have also switched to Ari Arvonen, third time in 2014, attracted approxi- environmentally friendly Icebreaker Urho received Markus Karjalainen, mately one hundred family members, detergents across the board, the Shield of the Rôtisseurs Matti Björkman, relatives and friends of Arctia employ- even for the dishes. Pia Broumand and Juha Ojamo. ees on board the icebreaker Urho in late "It is important for our The saloon of Icebreaker Urho is adorned September. Once each year, the family Events staff to receive infor- with the recently awarded shield of the members of employees can explore the mation and training regard- Chaîne des Rôtisseurs. The organisa- after all, the world’s first gourmet ice- working environments in the shipping ing new opportunities for tion’s Finnish chapter, Paistinkääntäjät breaker. company and on board icebreakers. reducing our environmental ry, granted Arctia Events the right to The programme is designed with chil- burden. We guarantee this display the shield as proof of the high dren in mind. This year, the main attrac- through constant training level of gastronomy on board the Urho. Grand Old Man Voima turns 60 tion was Siina & Taikaradio from the and getting to know local The shield was handed over at a dinner Pikku Kakkonen children’s show. The producers and suppliers," held for shipping company personnel Icebreaker Voima celebrated its 60th galley of the Urho had conjured up an Broumand says. and a delegation of the gastronomic anniversary in February on the job, by unforgettable feast for the visitors. society on 13 October 2014. assisting merchant vessels on the Gulf The shield and ribbons are a fantastic of Finland. The actual party was held acknowledgement of the perseverance on shore after the holiday season. and systematic training of our staff. The most venerable member of Arc- According to the Chaîne des Rôtis- tia’s fleet was also celebrated by a Vo- seurs, the nomination of the Urho will ima exhibition staged in the lobby of receive a great deal of international the floating office. publicity within the organisation. It is, A video about the history of the

29 04 Personnel and governance Arctia as an employer GOOD RESULTS THROUGH TEAMWORK The systematic development of the pro- We placed particular emphasis on occupational fessional competence of our staff and well-being during the past fiscal period. As an ex- ample, a regularly convening Well-Being Group regular training ensure that Arctia’s ex- was instituted in the shipping company, with rep- resentation from personnel and management alike. pertise ranks in the global elite. During The adoption of an early support model was also the past fiscal period, we have placed agreed on, and the model will be implemented in 2015. particular emphasis on the cooperation We continued analysing and processing the re- between ships and Group management. sults of the personnel survey conducted in 2013. All those in charge of the report reviewed the results with their staffs and agreed on measures based on Competence and its development the results. EOC cards, and the shipping company gives annual More permanent staff were transferred into the safety awards during the Shipping Company days. We have continued the three-year investment pro- service of Arctia Karhu Ltd as a result of the trans- The update of the Group’s safety management gramme in supervisory and management training fer of business carried out in the autumn. system continued during the reporting year. The begun in 2013. The objective of this training is to system will be changed in order to encompass the improve the cooperation between ships and the safety management system, ship maintenance and Group’s Management Team, to develop the work Occupational health and safety purchasing. of ships’ management teams, and to ensure the Ship’s safety is monitored by the Group through availability of human resources for key positions in A total of 13 (3) occupational accidents happened regular internal audits. The Finnish Transport Safe- the long term. at Arctia in 2014. In order to reinforce safety aware- ty Agency Trafi inspects Arctia’s vessels each year. Arctia engaged in close cooperation with person- ness, we have adopted safety bulletins for employ- Action and repair plans have been drawn up on the nel representatives in 2014. Company representa- ees and enhanced the investigation of occupation- basis of the observations made during the audits tives have met with chief shop stewards in the free- al accidents, among other measures. Occupational and inspections, and the plans have been imple- form Cooperation Forum organised on a monthly safety awards were also handed out during the mented as far as possible. No serious non-conform- basis. A number of official meetings was addition- fiscal period for noteworthy contributions to oc- ities were identified in audits or inspections during ally arranged at the local and union levels. cupational safety: ships give awards to the best the fiscal period.

31 Number of personnel Age structure and average age of personnel

NUMBER OF PERSONNEL (31 DEC) 2014 2013 2012 AVERAGE AGE OF PERSONNEL, YEARS (31 DEC) 2014 2013 2012 Shore personnel 31 31 32 Ship personnel 230 236 254 All employees 47.5 48.5 48.66 Ship personnel, Employment contracts men 48.5 48.16 49.16 Ship personnel, EMPLOYMENT CONTRACT DISTRIBUTION (31 DEC) 2014 2013 2012 women 48.5 47.66 46.08 Shore personnel 46.0 46.66 45.75 Shore personnel, permanent 31 31 33 Ship personnel, permanent 204 220 250 Temporary 26 16 22 Personnel gender distribution Share of full-time and part-time employment contracts (%) Shore personnel, part time 6.5 6.5 0 The Equality Plan of Arctia Shipping Ltd has been Ship personnel, part time 0.4 0.4 0.66 approved by the Ombudsman for Equality. The Equality Plan will be updated in 2015. Personnel turnover PERSONNEL GENDER DISTRIBUTION LEAVING RATE (31 DEC) 2014 2013 2012 (31 DEC) 2014 2013 2012 Total personnel / leaving and part-time employees (%) All employment contracts, Shore personnel 6.5 18 9.3 Women (%) Ship personnel on average during the year 23.3 35 34 Ship personnel 14.8 14.8 14.2 Shore personnel 45.1 45.4 39.4 Employment duration Board of Directors gender distribution Women 2* 2 3 AVERAGE LENGTH OF EMPLOYMENT CONTRACTS, YEARS (31 DEC) 2014 2013 2012 Men 3* 2 3 All employees 15.3 16.4 17 Gender distribution in senior management (Management Team) Women 1 1 0 Men 5 5 6

*Members at the beginning of 2014.

32 Board of Directors

Christer Granskog Ilpo Nuutinen Antti Pankakoski Maire Laitinen Päivi Söderholm Chairman of the Board Vice-Chairman of the Board Board member since 2012 Senior Legal Counsel, Fondia Ltd Senior Planning Officer, CEO, Oy Piceum Ab Senior Government Adviser, Year of birth: 1954 Board member since 2010 Centre for Maritime Studies Board member since 2014 Prime Minister’s Office Education: LLM Year of birth: 1953 Board member since 2010 Year of birth: 1947 Board member since 2013 Education: LLM Year of birth: 1958 Education: MSc (Tech.) Year of birth: 1964 Education: Master Mariner Education: LLM with court training, Licentiate of Laws, MSc (Econ.)

33 Management Team

Tero Vauraste Markus Karjalainen Markku Tuhkanen Kari Patrakka David Lindström Heli Lehtonen Chief Executive Officer (CEO) Vice President, Icebreaking Communications Director Technical director HR Director Financial director

Member of the Management Member of the Management Member of the Management Member of the Management Member of the Management Member of the Management Team since 2010 Team since 2013 Team since 2011 Team since 2010 Team since 2012 Team since 2013 Year of birth: 1967 Year of birth: 1961 Year of birth: 1965 Year of birth: 1967 Year of birth: 1968 Year of birth: 1963 Education: Naval officer, MSc Education: Sea Captain Education: MA Education: MSc (Tech.) Education: MSc. (Econ.) Education: MSc. (Econ.)

34 Fleet, 31 Dec 2014 ICEBREAKERS AND MULTIPURPOSE ICEBREAKERS

Length, m / Beam, m / Draught, m / Power, kW IB KONTIO 98.6 / 24.2 / 8.0 / 15,000 IB OTSO 98.6 / 24.2 / 8.0 / 15,000

IB SISU 106.6 / 23.8 / 8.3 / 16,200 IB URHO 106.6 / 23.8 / 8.3 / 16,200 IB VOIMA 83.5 / 19.4 / 7.0 / 10,200

MSV FENNICA 116.0 / 26.0 / 8.4 / 15,000 MSV NORDICA 116.0 / 26.0 / 8.4 / 15,000 IB AHTO 40.0 / 12.8 / 5.5 / 3,600

35 05 Financial statements and governance Arctia Shipping Ltd Major events during the fiscal period

The planned summer chartering projects of Offshore were replaced by upkeep and maintenance activi- ANNUAL REPORT 2014 ties in Finland and icebreaking services in seismic research in the waters of eastern Greenland, since the Alaskan project of Offshore’s customer was on hold. Due to contractual arrangements, this devia- tion from plan did not have a marked impact on profits. Arctia Karhu Ltd’s next-generation harbour ice- breaker was completed in the autumn of 2014. The ship’s home port is Kemi, and the vessel be used to the needs of industry. The engine power of new help meet the needs of growing traffic in the Bay Market development customer vessels will be reduced due to new envi- of Bothnia and to safeguard the icebreaking service ronmental regulations. These factors are expected level. The vessel can also be used for towing, oil re- The growth of the Finnish economy was weak dur- to increase the demand for icebreaking assistance covery and, to a limited extent, lane icebreaking. ing the review period, and this affected the vol- in the Baltic Sea in the future. Furthermore, the ice- The owner outlined policies for Arctia’s opera- ume of freight shipping in the Baltic Sea and, as a breaking treaty signed between Finland and Rus- tions in the autumn. The company’s main task is the consequence, reduced the demand for icebreak- sia is anticipated to improve the opportunities for efficient management of icebreaking in the Baltic ing services. icebreaking cooperation in the Baltic. Sea, but the owner also supports the company’s The past year was characterised by international Despite the recession in Europe and fluctuation business operations in Polar areas and demands a uncertainty. The Polar market was not spared the of the global market price of oil, there are plans for renewal of the fleet and an increase in its utilisation global market impact of the sanctions imposed on the sustainable exploitation of natural resources in rate. In combination, these factors provide Arctia Russia in the summer, nor from the developments of the Polar market. These plans will be advanced in with better opportunities for expanding its opera- oil, gas and other raw material prices on the global the long term regardless of the cycles of the glob- tions and finding new customers. Additional income market. Some projects in the Polar market were put al economy. is required in order to secure national icebreaking on hold until further notice. services in a cost-effective manner. The company The Baltic market is projected to grow in the com- strategy will be updated to correspond to the de- ing years. The logistics network will develop to meet mands and opportunities outlined by the owner.

37 the mild winter, as traffic restrictions were compa- FINANCIAL KEY FIGURES DESCRIBING THE OPERATIONS OF THE ARCTIA GROUP rably shorter than in 2013. 2014 2013 2012 2011 2010 The 2013–2014 icebreaking season started on 13 Turnover, MEUR 61.3 63.0 75.3 59.5 58.8 EBIT, earnings before interests and taxes, MEUR 16.8 17.5 44.6 -1.7 -2.9 December 2013 and ended on 14 May 2014. The % of turnover 27.4 27.8 59.2 -2.9 -5.0 fleet accumulated a total of 350 operating days dur- Profit / Loss for financial period, MEUR 12.9 13.4 39.9 -4.7 -5.8 ing the season (579). A total of 6,518 (13,484) port % of turnover 21.0 21.3 53.0 -7.9 -9.9 visits were made when traffic restrictions were in Equity, MEUR 134.8 121.4 108.0 68.1 72.8 force during the icebreaking season. Equity ratio, % 72.7 70.7 69.2 40.8 40.6 Demand for Events services remained brisk. Op- Gearing, % -15.6 -12.0 -0.9 107.9 105.2 Interest-bearing liabilities, MEUR 34.7 33.2 27.6 82.7 87.0 erations included icebreaker tours in the summer Return on investment, % 11.3 12.5 32.3 -1.1 -1.6 season, as well as meeting and event services. Return on equity, % 10.0 11.7 44.6 -6.7 -7.7 The turnover of Icebreaking totalled EUR 24.3 Gross investment, MEUR 15.6 17.8 16.0 6.2 14.0 million (25.2 MEUR) with an operating profit of % of turnover 25.5 28.2 21.3 10.3 23.9 EUR 5.0 million (4.9 MEUR). Balance sheet total, MEUR 185.7 175.6 157.0 167.0 179.4

The sale of fixed assets increased other operating income in 2012. In addition, through a sale decided upon on 31 May 2012, Arctia sold all of its holdings in Arctia Saaristovarustamo Ltd to Suomen Lauttaliikenne Ltd. Excluding the Saaristovarustamo, the Group’s Offshore 2012 turnover amounted to EUR 71.9 million. Operating profit in 2012 amounted to EUR 19.7 million after profits from the sale of fixed assets and Saaristovarustamo’s contribution were deducted. From January to April, the multipurpose vessels Fennica and Nordica were chartered for icebreak- ing in the Baltic Sea in accordance with the agree- ment signed with the Finnish Transport Agency. the ships accumulated no operating days in icebreak- Turnover and profit Icebreaking ing during 2014 (0). After the icebreaking season, the vessels moved The turnover of the Arctia Group for the review peri- All conventional icebreakers with the exception of to offshore season chartering. MSV Nordica re- od decreased slightly short of the previous year’s lev- Sisu assisted winter navigation in the Gulf of Fin- mained in Finland for the duration of the charter- el, being EUR 61.3 million (63.0 MEUR). The Group land, in Kvarken and in the Bay of Bothnia during ing period. MSV Fennica spent the beginning of accumulated an operating profit of EUR 16.8 mil- the fiscal period. A total of 338 (573) icebreaking the period in Finland and the remainder in Green- lion (17.5 MEUR). Profit for the financial period was days were accumulated during the periods 1 Janu- land. Despite the low number of operating days at EUR 12.9 million (13.4 MEUR). ary – 14 May and 25–31 December. A total of 6,367 78 (244), the business unit’s turnover and profit fell (13,423) port visits were made to traffic-restricted only slightly from the previous year due to contrac- ports in 2014. The drop in port visits was a result of tual arrangements.

38 The turnover of Offshore totalled EUR 35.8 mil- measures for the promotion of well-being, such as lion (37.3 MEUR) with an operating profit of EUR Staff regular information meetings for ship personnel 11.8 million (13.0 MEUR). on board the vessels. The three-year training programme for supervisors Plans for securing the availability of competence and management, begun in 2013, continued dur- were also realised during the fiscal period, for ex- Harbour icebreaking ing the fiscal period. The members of the Group’s ample by planning and carrying out recruitment Management Team and masters of Arctia’s ships processes and increasing cooperation with colleges. The new harbour icebreaker Ahto was completed participated in the first phase of the training in in September 2014. The ship’s home port is Kemi. 2013–2014. In 2014, the management teams of Arc- KEY FIGURES, PERSONNEL In addition to icebreaking and escort towing, the tia’s vessels participated in the training under the 2014 2013 2012 ship is also used for oil recovery, which improves oil direction of their masters, along with supervisors Average number of 273.5 278.6 283 recovery capacity in the Bay of Bothnia. from shore personnel. The training phase current- personnel during the fiscal period During the 2014 fiscal period, the company con- ly under way will last for slightly less than a year, Icebreaking 140.8 147.1 116 tinued providing harbour icebreaking and towing and its objective is to clarify the responsibilities of Offshore 93.7 97.9 130 services to the Port of Oulu, using the harbour ice- supervisors and enhance supervisory work within Harbour icebreaking 8.5 1.9 4 breaker Tuura owned by the City of Oulu. A trans- the organisation. Shore personnel 30.5 31.7 33 fer of business between Port of Kemi Ltd and Arctia Close cooperation with the shop steward organi- Temporary 26 16 22 Karhu Ltd was carried out in September, when the sation was continued in 2014 in the form of monthly Part-time retirement 1 1 2 towing business operations of the Port of Kemi were cooperation forum meetings. The purpose of this Part-time 2 1 1 transferred to Arctia Karhu Ltd along with most of forum is to help the company to better meet future Ship personnel at end of year 230 236 279 the permanent staff. The lease agreements between needs through closer dialogue. Office workers/emplyees at 31 31 32 the company and the Port of Kemi for the harbour The improvement of well-being at work was a end of year tugs Jääsalo and Ulla also entered into force at the particular focus area during the fiscal period. A Well- Total personnel at end of 261 267 311 year same time. Being Group was established in cooperation with Women at end of year 48 50 52 In November, the company began harbour ice- the shop steward and occupational safety organisa- Men at end of year 213 217 259 breaking operations in the ports of Tornio and Kemi tions. The purpose of the group is to achieve con- Average age of personnel 47.5 48.4 48.4 in accordance with its long-term service agreements. crete measures for the maintenance and further The harbour icebreaking agreement with Port of improvement of well-being at work. In 2014, the Oulu Ltd expired at the end of the review period. company organised a Well-Being Seminar in which occupational well-being experts from outside the company also participated. The Well-Being Group has convened regularly and implemented various

39 Arctia always considers the environment in its op- Financing Safety erations and complies with the regulations of the International Maritime Organisation’s (IMO) Inter- The Group’s cash assets at end of year totalled EUR Ship safety is monitored by the Group through reg- nal Safety Management Code (ISM Code) and the 55.7 million (47.7 MEUR). The cash assets are invest- ular internal audits. The Finnish Transport Safety International Convention for the Prevention of Pol- ed in low-risk bond funds. Cash assets are main- Agency Trafi inspects Arctia’s vessels each year. Ac- lution from Ships (MARPOL Convention), along with tained in preparation for the maintenance of Arc- tion and repair plans have been drawn up on the national guidelines and regulations. tia’s ageing fleet, renovation investments, and for basis of the observations made during the audits extensive future replacement investments across and inspections, and the plans have been imple- the entire fleet. mented as far as possible. No serious non-conform- The environment At the end of the year, the Group had EUR 34.1 ities were identified in audits or inspections during million of long-term debt (33.0 MEUR) from external the fiscal period. Arctia uses the icebreaker Kontio to provide oil- financial institutions. The Group had no short-term In late 2014, the Finnish Transport Safety Agen- recovery readiness services for the European Mari- debt at end of year. The interest rates of the Group’s cy (Trafi) decreed that the Nordica and Fennica will time Safety Agency EMSA. The operating area of loans are tied to market rates and fixed using inter- henceforth be classified as special-purpose vessels. the on-duty service is the northern Baltic Sea. Four est rate derivatives. The loan terms do not include The technical alterations and inspections required by oil recovery exercises, the so-called quarterly exer- covenants relating to profitability or solvency. the change will be performed after the end of the cises, and an oil recovery course were held in 2014 2014–2015 icebreaking season. The required meas- according to schedule. The final exercise also in- ures and preparations for the alteration work were cluded a seminar on the subject. Investment begun immediately after Trafi had announced its The entry into force of the Sulphur Directive will decision. not require action on the part of the company. Cata- Gross investment in 2014 were EUR 15.6 million A total of 13 (3) occupational accidents happened lytic converters were installed on Arctia’s multipur- (17.7 MEUR). at Arctia in 2014. In order to reinforce safety aware- pose icebreakers in 2012 in order to reduce emis- The largest single investment was the modernisa- ness, we adopted safety bulletins for employees and sions, and the vessels use fuel with an extremely tion of the electronics automation of the Kontio’s enhanced the investigation of occupational acci- low sulphur content. Due to these factors, the ves- engine system. System updates were also carried out dents, among other measures. Occupational safety sels remain well under the emission limits. Arctia’s for the automation systems of the Otso. The repair awards were also handed out for significant con- conventional icebreakers use the low-sulphur diesel and warranty work for the sea water pipe replace- tributions to occupational safety during the fiscal oil specified in the directive. The Voima, Urho and ment project related to the life span extension of period. Sisu were already using this type of diesel oil. The the Sisu were completed during the fiscal period. The update of the Group’s safety management Kontio and Otso also switched over to the new oil, The maintenance and upkeep work on convention- system continued during the reporting year. The sys- and this did not require any technical modifications al icebreakers was performed at the Katajanokka tem will be changed to encompass the safety man- to their engines. base and the work on multipurpose icebreakers in agement system, ship maintenance and purchasing. Rauma, and no vessels were docked.

40 Arctia Karhu Ltd will purchase oil recovery equip- contractors and own suppliers. The supplier audits accordance with the proposal of the General Meet- ment suitable for icy waters and start providing on- continued according to plan in 2014. ing. Ilpo Nuutinen served as Chairman of the Board duty oil recovery services for Lapland’s rescue servic- Arctia held its first supplier day in 2014, with par- of Directors until 9 June 2014. es. According to current plans, the equipment will ticipants invited from the equipment suppliers and The Board of Directors convened 14 times in 2014, be installed on the Ahto sometime in 2015. installation and subcontracting companies deemed with an attendance rate of 100.0 per cent. Environmental targets were set for Arctia in 2013. most important to the company’s operations. The At its meeting on 19 June 2014, the Board of Di- Key targets included reducing the consumption of programme of the day revolved around Arctia’s safe- rectors elected Christer Granskog as the Chairman of fuel and fresh water and the start of environmental ty considerations and quality standards. The next the Remuneration and Nomination Committee and investments by the company. Work on these themes supplier day will be organised in the spring of 2015. Maire Laitinen, Antti Pankakoski and Ilpo Nuutinen continued in 2014. The Arctia Group is involved in several research as members of the Committee. Ilpo Nuutinen served Services such as unloading organic waste at ports projects under the ”Arctic Seas” programme of the as Chairman of the Committee until 19 June 2014. were arranged for the waste management of ves- Finnish Funding Agency for Innovation TEKES. Most The Committee met four times in 2014, with an sels. A separate unloading service was required, due of these projects will take place in the years 2015– attendance rate of 93.8 per cent. to the inadequate reception facilities for organic 2016. The largest single project is the IMOR (Ice Man- The auditor of the Arctia Group is Ernst&Young waste at ports. We have improved the waste re- agement in Oil Recovery) project for the research Ltd, with Mikko Rytilahti, Authorised Public Ac- porting of our vessels in cooperation with the waste and development of oil recovery from ice-covered countant, Chartered Public Finance Auditor, as chief management company. seas. Arctia also launched a project in cooperation auditor. Arctia’s icebreakers are always connected to pub- with VTT Technical Research Centre of Finland for lic utility services when at berth in Katajanokka, improving the suitability of various ship systems to which enables the production of electricity and heat demanding ice conditions. The project has a dura- Management and the processing of waste water in a more eco- tion of two years. logical manner. Arctia Karhu Ltd was issued an ISO 9001 quality The CEO of Arctia Shipping Ltd in 2014 was Tero certificate in the spring of 2014. Vauraste. In addition to the CEO, the following per- sons were part of the Group Management Team Quality and research during the financial period Board of Directors and auditors • Markus Karjalainen, Vice President, Icebreaking Arctia began auditing its suppliers in 2013. Major • Heli Lehtonen, Chief Financial Officer suppliers working on board the Group’s ships and The General Meeting of 9 June 2014 appointed • David Lindström, HR Director in the harbour area were selected for auditing. The Christer Granskog as Chairman of the Board of Di- • Kari Patrakka, Technical Director audits focused on occupational safety, guidelines for rectors of Arctia Shipping Ltd, with Maire Laitinen, • Markku Tuhkanen, Communications Director working on board and compliance with the guide- Ilpo Nuutinen, Antti Pankakoski and Päivi Söder- lines, as well as the guidance of the suppliers’ sub- holm continuing as members. The Board of Direc- tors elected Ilpo Nuutinen as its Vice-Chairman in

41 vessels are environmental friendliness and a suffi- Shares cient polar ice class. Board of Directors’ proposal on the use of If companies operating in the Arctic suffer ma- retained earnings The share capital of Arctia Shipping Ltd is EUR jor accidents, this could retard the growth of the 18,700,000. The number of shares is 748,000. The market. Environmental regulation also increases The company’s distributable assets total EUR nominal value of Arctia shares is EUR 25. The com- the growth risk of operating costs. Arctia hedges 94,999,937.18, of which EUR 7,024,534.94 consists pany’s entire share capital is owned by the Repub- against these risks through insurance and contrac- of the operating profit for the fiscal period. The lic of Finland. tual arrangements. Board of Directors proposes the payment of a divi- dend of EUR 10.55 per share. The dividends will not Risks related to personnel jeopardise the company’s solvency. Estimate of key risks and uncertainties Arctia Group will experience a large turnover in personnel in the next few years due to ageing. The ageing of the company’s fleet increases the risk This turnover increases the risk of not being able Major events after the fiscal period and outlook of technical problems and increased maintenance to maintain the current level of professional compe- for future development costs. The risk of not finding spare parts for old tence. Arctia is seeking to mitigate this risk through vessels is also growing. Technical reliability plays a pre-emptive HR planning. The year 2015 is operationally secure, since the com- major role in offshore chartering and is particular- pany’s entire fleet capacity will be utilised in accord- ly emphasised in Arctic operations. Arctia seeks to Financing and accident risks ance with existing agreements. manage this risk through long-term maintenance If required, currency and interest rate derivatives The exploitation of Arctic and Sub-Arctic natural programmes. are used to mitigate financial risks related to the resources and the charting of unexploited reserves Since the operating areas are distant, particular Group’s chartering, working capital financing and is expected to continue. On this basis, it is antici- attention is paid to the serviceability, spare parts acquisition of financing. pated that demand for the supporting ice man- needs and crew rotation of vessels, and the avail- Credit-loss risks involved in chartering are man- agement and other ship services will remain brisk ability of maintenance, in order to ensure undis- aged by determining the credit ratings of custom- and create new opportunities for signing long-term turbed operations. ers and use of payment terms based on the custom- agreements. The company’s fleet and capacity will Increasing requirements are being set for oper- er’s credit rating and, possibly, sufficient securities. be developed in accordance with the policies out- ating in Arctic regions, particularly with regard to Extensive insurance coverage protects the Group lined by the owner. conservation of the environment. Arctia’s vessels en- from risks related to accidents. sure the safety of operations for their part. Special expertise in the field and region is required of per- sonnel operating in the Arctic, and suitable fleets are required of operators. The principal criteria for

42 INCOME STATEMENT (EUR) GROUP PARENT COMPANY Note 2014 2013 2014 2013 TURNOVER 1 61,314,666.39 63,001,944.61 4,524,158.62 4,373,814.00 OTHER OPERATING INCOME 389,143.06 732,104.83 8,558.33 1,383.06 Materials and services Raw materials, consumables and supplies Purchases during fiscal period 4,249,997.24 2,831,224.66 1,131.40 1,177.62 Stock increase (-) or decrease (+) 48,331.01 -149,524.24 0.00 0.00 External services 5,222,562.98 5,095,173.34 0.00 0.00 Materials and services Total 9,520,891.23 7,776,873.76 1,131.40 1,177.62 Personnel expenses 2 Salaries and remunerations 15,848,189.46 17,894,414.46 1,701,181.68 1,858,532.35 Indirect personnel costs Pension costs 2,051,907.97 2,292,025.01 297,370.95 360,512.69 Other indirect personnel costs 1,004,036.53 1,113,495.69 54,878.73 61,110.49 Personnel costs Total 18,904,133.96 21,299,935.16 2,053,431.36 2,280,155.53 Depreciation and reduction in value Depreciation and reduction in value according to plan 9,407,912.15 9,089,070.53 285,062.45 146,603.68 Other operating costs 3 7,051,486.54 8,056,269.87 2,449,326.61 2,753,581.12

EBIT, EARNINGS BEFORE INTERESTS AND TAXES 16,819,385.57 17,511,900.12 -256,234.87 -806,320.89

Financial income and expenses Income from shares From other companies in the group 0.00 0.00 0.00 21,517,541.85 Other interest and financial income From other companies in the group 415,277.01 616,937.59 Short-term, from other sources 1,472,290.52 565,147.40 1,500,412.10 459,594.86 Financial income Total 1,472,290.52 565,147.40 1,915,689.11 22,594,074.30 Other interest and financial expenses From other sources 2,196,667.28 1,362,967.09 2,118,383.71 1,082,039.40 Financial expenses Total 2,196,667.28 1,362,967.09 2,118,383.71 1,082,039.40 Financial income and expenses Total -724,376.76 -797,819.69 -202,694.60 21,512,034.90

PROFIT (LOSS) BEFORE EXTRAORDINARY ITEMS 16,095,008.81 16,714,080.43 -458,929.47 20,705,714.01

Extraordinary items 4 Extraordinary income 0.00 0.00 9,303,000.00 8,000,000.00 Extraordinary items Total 0.00 0.00 9,303,000.00 8,000,000.00 Appropriations Increase (-) / decrease (+) in depreciation difference 0.00 0.00 -70,666.30 -194,000.00 Total appropriations 0.00 0.00 -70,666.30 -194,000.00 Income tax Taxes during fiscal period 1,768,542.08 1,789,163.02 1,749,868.14 1,706,905.38 Other direct taxes -1,190.30 1,224.47 -998.85 369.91 Deferred income tax 1,473,533.26 1,480,600.00 0.00 0.00 Income tax Total 3,240,885.04 3,270,987.49 1,748,869.29 1,707,275.29 Minority shares -18,011.68 8,120.37 0.00 0.00

PROFIT/LOSS FOR FISCAL PERIOD 12,872,135.45 13,434,972.57 7,024,534.94 26,804,438.72

43 BALANCE SHEET (EUR) GROUP PARENT COMPANY Note 31/12/2014 31/12/2013 31/12/2014 31/12/2013 ASSETS

FIXED ASSETS 5 Intangible assets Intellectual property rights 36,810.24 65,280.72 35,739.34 64,209.82 Intangible assets Total 36,810.24 65,280.72 35,739.34 64,209.82 Tangible assets Land and water areas 175,535.71 175,535.71 175,535.71 175,535.71 Buildings and structures 4,233,351.24 4,071,055.96 4,233,351.24 4,071,055.96 Vessels 104,521,329.15 92,783,325.58 0.00 0.00 Other plants and machinery 2,975,583.25 2,759,594.52 645,869.84 519,999.20 Other tangible assets 86,386.67 85,886.67 86,386.67 85,886.67 Advance payments and acquisitions in progress 4,806,530.53 14,631,286.53 93,611.55 251,671.77 Tangible assets Total 116,798,716.55 114,506,684.97 5,234,755.01 5,104,149.31 Investments Shares in group companies 0.00 0.00 81,889,548.40 80,091,798.40 Other unquoted shares 5,000.00 5,000.00 0.00 0.00 Shares in associated companies 3,200.00 3,200.00 0.00 0.00 Investments Total 8,200.00 8,200.00 81,889,548.40 80,091,798.40

FIXED ASSETS TOTAL 116,843,726.79 114,580,165.69 87,160,042.75 85,260,157.53

CURRENT ASSETS Stocks Raw materials and consumables 1,802,523.21 1,850,854.22 0.00 0.00 Long-term assets Assets from group companies 8,050,000.00 10,326,222.00 Long-term assets Total 8,050,000.00 10,326,222.00 Short-term assets Accounts receivable 4,909,339.28 8,499,451.31 24,587.86 23,622.00 Assets from group companies 6 0.00 0.00 9,571,064.02 8,023,744.54 Other assets 2,609,315.12 1,018,196.61 120,359.63 2,500.00 Deferred assets 7 3,796,742.82 1,959,533.04 3,317,551.71 1,170,181.83 Short-term assets Total 11,315,397.22 11,477,180.96 13,033,563.22 9,220,048.37 Liquid securities Other securities 8 42,005,299.99 32,005,299.99 42,005,299.99 32,005,299.99 Disposable assets 13,684,578.85 15,726,190.00 13,684,578.79 11,230,078.13

CURRENT ASSETS TOTAL 68,807,799.27 61,059,525.17 76,773,442.00 62,781,648.49

ASSETS TOTAL 185,651,526.06 175,639,690.86 163,933,484.75 148,041,806.02

44 BALANCE SHEET (EUR) GROUP PARENT COMPANY Note 31/12/2014 31/12/2013 31/12/2014 31/12/2013 EQUITY AND LIABILITIES

EQUITY 9 Equity capital 18,700,000.00 18,700,000.00 18,700,000.00 18,700,000.00 Other equity 66,780,736.91 66,780,736.91 66,780,736.91 66,780,736.91 Profit / Loss from previous fiscal periods 36,477,756.99 22,536,904.76 21,194,665.33 -6,115,653.05 Profit / Loss for fiscal period 12,872,135.45 13,434,972.57 7,024,534.94 26,804,438.72 EQUITY TOTAL 134,830,629.35 121,452,614.24 113,699,937.18 106,169,522.58

MINORITY SHARES 190,746.33 9,008.02 0.00 0.00

APPROPRIATION ACCUMULATION Depreciation difference 0.00 0.00 264,666.30 194,000.00 TOTAL APPROPRIATION ACCUMULATION 0.00 0.00 264,666.30 194,000.00

PROVISIONS 10 Other provisions 474,720.96 656,040.72 0.00 0.00

LIABILITIES Long-term Loans from financial institutions 34,057,836.96 33,158,690.00 22,647,324.00 21,158,690.00 Imputed tax liability 5,208,133.26 3,734,600.00 0.00 0.00 Long-term liabilities Total 39,265,970.23 36,893,290.00 22,647,324.00 21,158,690.00

Short-term Loans from financial institutions 11 600,000.00 0.00 0.00 0.00 Advances received 0.00 3,791,230.16 0.00 0.00 Accounts payable 3,569,417.80 3,375,570.68 97,446.92 157,588.14 Liabilities to group companies 12 25,953,746.82 17,664,362.51 Other liabilities 813,550.92 898,078.34 134,643.61 151,770.83 Deferred liabilities 13 5,906,490.47 8,563,858.70 1,135,719.92 2,545,871.96 Short-term liabilities Total 10,889,459.19 16,628,737.88 27,321,557.27 20,519,593.44

LIABILITIES TOTAL 50,155,429.42 53,522,027.88 49,968,881.27 41,678,283.44

EQUITY AND LIABILITIES TOTAL 185,651,526.06 175,639,690.86 163,933,484.75 148,041,806.02

45 FINANCIAL STATEMENT (EUR) GROUP PARENT COMPANY 2014 2013 2014 2013 CASH FLOW FROM OPERATIONS Profit / Loss for fiscal period 12,872,135.45 13,434,972.57 7,024,534.94 26,804,438.72 Adjustments Depreciation according to plan 9,407,912.15 9,089,070.53 285,062.45 146,603.68 Profits (-) and losses (+) on the realisation of fixed assets Other items not involving payments (net) Financial income and expenses 724,376.76 797,819.69 202,694.60 -21,512,034.90 Income tax 3,240,885.04 3,270,987.49 1,748,869.29 1,707,275.29 Change in provisions -181,319.76 -181,319.76 0.00 Minority share -18,011.68 8,120.37 0.00 0.00 Other adjustments 0.00 0.00 -9,232,333.70 -7,806,000.00 Cash flow before change in working capital 26,045,977.96 26,419,650.89 28,827.58 -659,717.21

Change in working capital -4,147,901.78 5,809,575.69 6,152,464.09 -1,751,186.74 Paid interest and other finance costs -848,243.36 -1,003,131.55 -612,694.00 -625,727.13 Received dividends 0.00 0.00 0.00 21,517,541.85 Received interest and other finance profits 1,472,290.52 108,839.40 1,915,689.11 620,224.45 Other financial items 0.00 0.00 Taxes paid -3,084,524.20 -433,537.14 -3,121,060.45 26,467.48 CASH FLOW FROM OPERATIONS 19,437,599.14 30,901,397.29 4,363,226.33 19,127,602.70

Repayment of loan receivables 0.00 0.00 2,276,222.00 4,000,000.00 Investments in tangible and intangible assets -11,671,473.25 -17,722,016.79 -2,184,947.67 -2,362,798.58 INVESTMENT CASH FLOW -11,671,473.25 -17,722,016.79 91,274.33 1,637,201.42

Financing cash flow Minority capital investment 199,750.00 0.00 0.00 0.00 Long-term loans -7,487.04 6,000,000.00 0.00 0.00 Group contributions paid and received 0.00 0.00 8,000,000.00 0.00 FINANCING CASH FLOW 192,262.96 6,000,000.00 8,000,000.00 0.00

CHANGE IN AVAILABLE ASSETS 7,958,388.85 19,179,380.50 12,454,500.66 20,764,804.12 Available assets at the beginning of the fiscal period 47,731,489.99 28,552,109.52 43,235,378.12 22,470,574.00 Available assets at the end of the fiscal period 55,689,878.84 47,731,489.99 55,689,878.78 43,235,378.12

CHANGE IN WORKING CAPITAL Increase (-) / decrease (+) in short-term receivables 1,556,297.40 9,338,862.45 -2,004,635.19 6,308,144.20 Increase (-) / decrease (+) in inventories 48,331.01 -149,524.24 Increase (+) / decrease (-) in short-term loans -5,752,530.19 -3,379,762.52 8,157,099.28 -8,059,330.94

CHANGE IN WORKING CAPITAL -4,147,901.78 5,809,575.69 6,152,464.09 -1,751,186.74

46 Notes to the financial statements

1. ACCOUNTING POLICIES OF THE FINANCIAL STATEMENTS

1.1. VALUATION PRINCIPLES Depreciation times Years 1.2. DEFERRED INCOME TAX Intangible assets 5 The imputed tax liability has been calculated for the temporary ITEMS IN FOREIGN CURRENCIES differences between taxation and the financial statements, us- Buildings 10–20 Receivables and debts in foreign currencies have been converted ing the tax rate valid at the time of drawing up the financial into euros using the currency rate on the date of the drawing Vessel stock statements. The entire imputed tax liability is included in the up of the financial statements. Icebreakers 30–40 balance. Imputed tax liability is related to the depreciation dif- The premium payments for open currency options are en- Docking 2.5–5 ferences recorded for subsidiaries. These differences have been tered into the balance sheet as expenses during the validity pe- Other long-term repair and maintenance divided into equity and imputed tax liability in the consolidated riod of the options. Significant decrease in the market value of costs 3 financial statements. the acquisition cost of premiums is entered as expenses in the Communications and navigation equipment 3–5 financial statements. Computers and related devices 3 1.3. PENSIONS The statutory pension schemes for personnel are managed by Other plants and machinery 5–15 INVENTORIES external insurance companies. Pension costs are entered as ex- Inventories include the fuel and lubricant stocks of vessels. In- penses for the year during which they were incurred. ventories are valued at acquisition expenses or at lower net re- Expenses from repair and maintenance during vessel docking alisable value. are capitalised and entered as expenses according to the eco- 1.4. COMPARABILITY OF INFORMATION FROM PREVIOUS FIS- nomic working life of the docking (5 years). Long-term repair CAL PERIODS FIXED ASSETS and maintenance expenses unrelated to docking are capitalised Turnover has been presented by line of business in the notes, Intangible and tangible assets are marked as acquisition expenses and calculated as expenses with three-year straight line depre- with the domestic icebreaking performed by Arctia Offshore Ltd on the balance sheet with depreciation according to plan. De- ciations. Repair and maintenance expenses with effects of less included in icebreaking turnover. preciations according to plan are calculated as straight line de- than three years and a maximum sum of EUR 50,000 of are en- preciations based on the target’s economic duration. Deprecia- tered as annual expenses. 1.5. ACCOUNTING POLICIES OF THE CONSOLIDATED FINAN- tions are calculated from the month of the asset’s application. CIAL STATEMENTS All group companies and associated companies are included in the consolidated financial statements. The consolidated finan- cial statements have been drawn up using the acquisition cost method. All subsidiary companies have been founded indepen- dently. Business transactions, receivables and debts between group companies have been eliminated. Minority shares have been separated from group equity and the profit for the fiscal period, and are presented as their own item.

47 2. NOTES TO THE INCOME STATEMENT (EUR) Note GROUP PARENT COMPANY 2.1. TURNOVER BY MARKET AREA AND LINE OF BUSINESS 1 2014 2013 2014 2013

BY MARKET AREA Finland 34,735,518.60 35,147,202.36 4,524,158.62 4,373,814.00 EU countries 710,631.72 755,614.29 0.00 0.00 Countries outside the EU 25,868,516.07 27,099,127.96 0.00 0.00 61,314,666.39 63,001,944.61 4,524,158.62 4,373,814.00 BY LINE OF BUSINESS Icebreaking 34,701,776.25 35,147,202.36 0.00 0.00 Offshore 25,953,556.42 27,182,827.96 0.00 0.00 Oil spill response 659,333.72 671,914.29 0.00 0.00 Internal administration services 0.00 0.00 4,524,158.62 4,373,814.00 61,314,666.39 63,001,944.61 4,524,158.62 4,373,814.00

2.2. NOTES ON PERSONNEL 2

AVERAGE NUMBER OF PERSONNEL Average number of personnel 274 279 22 24

NUMBER OF PERSONNEL Clerical employees 31 31 22 24 Maritime personnel 230 236 0 0 Total 261 267 22 24

MANAGEMENT SALARIES AND REMUNERATIONS Chief Executive Officer (CEO) 328,027.71 291,470.74 328,027.71 291,470.74 Board members 89,313.24 97,300.07 89,313.24 97,300.07 Managing Directors of subsidiaries 123,118.40 130,389.06 0.00 0.00 540,459.35 519,159.87 417,340.95 388,770.81 The CEO’s salary is a total salary that includes car and telephone benefits. The CEO’s retirement age is 63. Pension benefits are provided by the statutory TyEL pension insurance.

48 Note GROUP PARENT COMPANY 2.3. OTHER OPERATING COSTS 3 2014 2013 2014 2013

OTHER OPERATING COSTS Voluntary indirect personnel costs 1,922,860.03 2,030,572.06 345,813.86 237,835.02 Property rents 31,826.78 146,352.29 1,800.03 140,036.53 Telephone, IT, vehicle and office expenses 1,265,362.70 649,370.36 729,461.23 371,797.65 Marketing costs 124,777.19 129,082.31 53,745.44 60,370.41 Travel expenses 754,061.98 1,503,515.96 157,207.40 134,331.75 Administrative expenses 2,831,165.92 3,484,649.33 1,090,314.72 1,684,813.25 Credit losses and recovery 49,335.05 0.00 0.00 371.00 Other operating costs, intra-group 0.00 0.00 26,919.78 19,062.21 Other operating costs 72,096.89 112,727.56 44,064.15 104,963.30 Other operating costs Total 7,051,486.54 8,056,269.87 2,449,326.61 2,753,581.12

AUDITORS’ FEES Audit 37,746.00 71,807.00 17,662.00 56,707.00 Taxation advice 10,575.00 27,120.00 10,575.00 21,320.00

2.4. EXTRAORDINARY ITEMS 4

Extraordinary income / group contribution 0.00 0.00 9,303,000.00 8,000,000.00 0.00 0.00 9,303,000.00 8,000,000.00

49 3. NOTES ON BALANCE SHEET ASSETS (EUR) Note 3.1. FIXED ASSETS, GROUP 5 Intellectual INTANGIBLE ASSETS 2014 property rights Total Acquisition costs 1 January 222,727.75 222,727.75 Increases 0.00 0.00 Decreases 0.00 0.00 Transfers between items 0.00 0.00 Acquisition costs 31 December 222,727.75 222,727.75

Accumulated depreciations 1 January -157,447.03 -157,447.03 Transfers between items 0.00 0.00 Depreciations for the fiscal period -28,470.48 -28,470.48 Accumulated depreciations 31 December -185,917.51 -185,917.51

Book value 31 December 36,810.24 36,810.24

Advance payments and Land and water Buildings and Other plants and Other tangible acquisitions in TANGIBLE ASSETS 2014 areas structures Vessels machinery assets progress Total Acquisition costs 1 January 175,535.71 4,857,994.57 183,266,606.95 5,765,041.50 85,886.87 14,631,286.53 208,782,352.13 Increases 0.00 335,081.29 20,600,245.07 560,402.89 500.00 15,473,701.58 36,969,930.83 Increases (interest and management fees) 0.00 0.00 0.00 0.00 0.00 160,493.33 160,493.33 Decreases 0.00 0.00 0.00 0.00 0.00 -3,963,221.66 -3,963,221.66 Transfers between items 0.00 0.00 0.00 0.00 0.00 -21,495,729.25 -21,495,729.25 Acquisition costs 31 December 175,535.71 5,193,075.86 203,866,852.02 6,325,444.39 86,386.87 4,806,530.53 220,453,825.38

Accumulated depreciations 1 January 0.00 -786,938.61 -90,483,281.37 -3,005,446.98 0.00 0.00 -94,275,666.96 Depreciations for the fiscal period 0.00 -172,786.01 -8,862,241.50 -344,414.16 0.00 0.00 -9,379,441.67 Accumulated depreciations 31 December 0.00 -959,724.62 -99,345,522.87 -3,349,861.14 0.00 0.00 -103,655,108.83

Book value 31 December 175,535.71 4,233,351.24 104,521,329.15 2,975,583.25 86,386.87 4,806,530.53 116,798,716.55

50 3.1. FIXED ASSETS, PARENT COMPANY Intellectual INTANGIBLE ASSETS 2014 property rights Total Acquisition costs 1 January 215,195.75 215,195.75 Increases 0.00 0.00 Decreases 0.00 0.00 Transfers between items 0.00 0.00 Acquisition costs 31 December 215,195.75 215,195.75

Accumulated depreciations 1 January -150,985.93 -150,985.93 Transfers between items 0.00 0.00 Depreciations for the fiscal period -28,470.48 -28,470.48 Accumulated depreciations 31 December -179,456.41 -179,456.41

Book value 31 December 35,739.34 35,739.34

Advance payments and Land and water Buildings and Other plants and Other tangible acquisitions in TANGIBLE ASSETS 2014 areas structures machinery assets progress Total Acquisition costs 1 January 175,535.71 4,150,592.61 717,580.03 85,886.67 251,671.77 5,381,266.79 Increases 0.00 335,081.29 209,676.60 500.00 387,197.67 932,455.56 Transfers between items 0.00 0.00 0.00 0.00 -545,257.89 -545,257.89 Acquisition costs 31 December 175,535.71 4,485,673.90 927,256.63 86,386.67 93,611.55 5,768,464.46

Accumulated depreciations 1 January 0.00 -79,536.65 -197,580.83 0.00 0.00 -277,117.48 Depreciations for the fiscal period 0.00 -172,786.01 -83,805.96 0.00 0.00 -256,591.97 Accumulated depreciations 31 December 0.00 -252,322.66 -281,386.79 0.00 0.00 -533,709.45

Book value 31 December 175,535.71 4,233,351.24 645,869.84 86,386.67 93,611.55 5,234,755.01

Shares in group INVESTMENT IN 2014 companies Total Acquisition costs 1 January 80,091,798.40 80,091,798.40 Increases 1,797,750.00 1,797,750.00 Decreases 0.00 0.00 Revaluation (net) 0.00 0.00 Transfers between items 0.00 0.00 Acquisition costs 31 December 81,889,548.40 81,889,548.40

Book value 31 December 81,889,548.40 81,889,548.40

51 Note GROUP PARENT COMPANY 2014 2013 2014 2013 3.1.2 GROUP SUBSIDIARIES Share of ownership Share of ownership Arctia Icebreaking Ltd 100% 100% JM Voima Ltd 100% 100% Arctia Offshore Ltd 100% 100% Arctia Karhu Ltd 90% 90%

3.1.3 ASSOCIATED COMPANIES Ice Advisors Ltd, Helsinki Share of ownership 40% 40% Equity 70,397.98 70,747.49 Profit for the fiscal period -349.51 26,535.31

3.2. SHORT-TERM ASSETS 3.2.1. ASSETS FROM GROUP COMPANIES 6 Accounts receivable 0.00 23,744.54 Group account receivables 268,064.02 0.00 Group contribution assets 9,303,000.00 8,000,000.00 9,571,064.02 8,023,744.54 3.2.2. RELEVANT ITEMS IN DEFERRED RECEIVABLES 7 Interest receivables 2,647,324.00 1,158,690.00 2,647,324.00 1,158,690.00 Tax receivable 81,373.81 140,039.57 0.00 0.00 Personnel expenditures 674,042.23 227,804.39 670,227.71 0.00 Other deferred receivables, from expenses 394,002.78 432,999.08 0.00 11,491.83 3,796,742.82 1,959,533.04 3,317,551.71 1,170,181.83

3.2.3. LIQUID SECURITIES 8 Book value 42,005,299.99 32,005,299.99 42,005,299.99 32,005,299.99 Market value 43,001,149.43 32,539,633.21 43,001,149.43 32,539,633.21

52 4. NOTES ON BALANCE SHEET LIABILITIES (EUR) Note GROUP PARENT COMPANY 4.1. EQUITY INCREASE AND DECREASE 2014 2013 2014 2013

Share capital 1 Jan 18,700,000.00 18,700,000.00 18,700,000.00 18,700,000.00 Share capital 31 Dec 18,700,000.00 18,700,000.00 18,700,000.00 18,700,000.00

Other equity Reserve for invested unrestricted equity Reserve for invested unrestricted equity 1 Jan 66,780,736.91 66,780,736.91 66,780,736.91 66,780,736.91 Reserve for invested unrestricted equity 31 Dec 66,780,736.91 66,780,736.91 66,780,736.91 66,780,736.91

Profit/Loss from previous fiscal periods 1 Jan 35,971,877.33 22,536,904.76 20,688,785.67 -6,115,653.05 Adjustment of the profit/loss from previous fiscal periods 505,879.66 0.00 505,879.66 0.00 Profit/Loss from previous fiscal periods 31 Dec 36,477,756.99 22,536,904.76 21,194,665.33 -6,115,653.05

Profit / Loss for fiscal period 12,872,135.45 13,434,972.57 7,024,534.94 26,804,438.72

Equity total 134,830,629.35 121,452,614.24 113,699,937.18 106,169,522.58

Distributable assets 94,999,937.18 87,469,522.58

The adjustment to the profit/loss from previous fiscal periods relates to the adjustment of pension liabilities.

4.2. OTHER PROVISIONS 10 Crane leasing 474,720.96 656,040.72 0.00 0.00

The group’s and subsidiary’s expense and decrease in provisions for 2014 was recorded as EUR 181,319.76.

4.3. SHORT-TERM LIABILITIES 11 Loans from financial institutions 600,000.00 0.00 0.00 0.00 600,000.00 0.00 0.00 0.00

4.3.2. LIABILITIES TO GROUP COMPANIES 12 Group subsidies 0.00 764,698.38 Group account liabilities 25,953,746.82 16,899,664.13 25,953,746.82 17,664,362.51

4.3.3. RELEVANT ITEMS INCLUDED IN DEFERRED LIABILITIES 13 Personnel expenditures 5,113,759.98 6,524,809.44 352,943.43 517,283.32 Income tax 475,776.49 1,730,013.26 475,776.49 1,721,588.64 Interest liabilities 309,036.00 309,036.00 307,000.00 307,000.00 Other deferred liabilities 7,918.00 0.00 0.00 0.00 5,906,490.47 8,563,858.70 1,135,719.92 2,545,871.96

53 5. NOTES ON SECURITIES AND CONTINGENT LIABILITIES (EUR) GROUP PARENT COMPANY RENT/LEASING AGREEMENTS 2014 2013 2014 2013 To be paid during subsequent fiscal period Leasing agreements 72,861.38 82,392.28 50,454.17 56,074.62 Rent liabilities 302,064.00 302,064.00 0.00 0.00 374,925.38 384,456.28 50,454.17 56,074.62 To be paid later Leasing agreements 45,682.67 64,021.11 22,044.82 41,627.01 Rent liabilities within 1–5 years 1,283,772.00 1,510,320.00 0.00 0.00 Non-current rent liabilities 0.00 75,516.00 0.00 0.00 1,329,454.67 1,649,857.11 22,044.82 41,627.01 The sums are presented with VAT included.

CONTINGENT LIABILITIES GUARANTEES For group companies 10,800,000.00 10,800,000.00

Each subsidiary has issued a EUR 10 million guarantee for the parent company. The parent company has issued a guarantee for Arctia Offshore Ltd related to future chartering agreements. The parent company, together with Port of Kemi Ltd, has issued an absolute joint and several guarantee of EUR 10,800,000 to Nordea Pankki Plc for the bank loan taken out by Arctia Karhu Ltd.

OTHER CONTINGENT LIABILITIES The group account receivables act as a general guarantee to the bank for all loan balances, interest, penal interest, costs and remunerations on valid group accounts linked to the Group Accounts Agreement, as well as for the bank’s debt-collection costs.

INVESTMENT COMMITMENTS To be paid during subsequent fiscal period 2,629,442.00 11,866,520.00 0.00 0.00 To be paid later 0.00 427,360.00 0.00 0.00

DERIVATIVES OPEN Interest rate and currency swap agreements Value of underlying assets 20,000,000.00 20,000,000.00 20,000,000.00 20,000,000.00 Market value of agreements 2,295,799.00* 668,398.00 2,295,799.00* 668,398.00

Interest rate swap agreements Value of underlying assets 10,000,000.00 10,000,000.00 10,000,000.00 10,000,000.00 Market value of agreements -579,077.00 -458,864.00 -324,957.00 -427,270.00

The interest rate and currency swap agreements have been made to hedge foreign currency loans. The market value of derivatives and forward agreements is based on generally used pricing models. * EUR 1,488,634.00 of the item has been recognised as a profit or loss.

Credit facility agreements Total amount of the facility 250,000.00 0.00 0.00 0.00 In use 10,512.96 0.00 0.00 0.00

VAT RETURN LIABILITIES VAT return liabilities for real estate in 2014 equalled EUR 776,938.89 (EUR 874,056.25 in 2013). 54 Signatures to the financial statements and annual report Helsinki, 11 February 2015

Christer Granskog Tero Vauraste Chairman of the Executive Board CEO

Maire Laitinen Ilpo Nuutinen

Antti Pankakoski Päivi Söderholm

List of accounting books, record types and storage media Annual accounts books Separately bound Journal and general ledger On CD-ROM Purchase invoices Scanned, on CD-ROM Auditors’ report Payment receipts Paper receipts A report on the audit of accounts has been issued today. Sales invoices Paper receipts Transaction receipts Paper receipts Bank receipts Paper receipts Helsinki, 13 February 2015 Memo receipts Paper receipts Payroll accounting receipts Paper receipts Ernst & Young Ltd Intangible asset transactions Paper receipts Cash vouchers Paper receipts Corporation of Authorised Public Accountants Travelling expense receipts In electronic form

Mikko Rytilahti Authorised Public Accountant, Chartered Public Finance Auditor

55 Auditor’s report

ducted our audit in accordance with good auditing To the Genera Meeting of Arctia Shipping Ltd practice followed in Finland. Good auditing prac- Audit opinion tice requires that we plan and perform the audit We have audited the accounts, financial statements, to obtain reasonable assurance about whether the In our opinion, the financial statements and annu- annual report and governance of Arctia Shipping Ltd financial statements and the report of the Board of al report give a true and fair view of the financial for the fiscal period 1 January–31 December 2014. Directors are free from material misstatement, and performance and financial position of the Group The financial statements comprise the balance sheets, whether the members of the Board of Directors or and the parent company in accordance with the income statements and financial statements of the CEO are guilty of any act or negligence which may regulations governing the preparation of financial Group and parent company and the notes to these. result in liability for damages against the company statements and annual reports in force in Finland. or have violated the Limited Liability Companies The information in the annual report is consistent Act or the Articles of Association of the company. with the information in the financial statements. Responsibility of the Board of Directors and CEO An audit involves procedures to obtain audit evi- dence about the amounts and disclosures in the fi- The Board of Directors and CEO are responsible for nancial statements and annual report. The choice Other opinions the preparation of financial statements and an an- of procedures depends on the auditor’s judgment, nual report that give a true and fair view in accord- including the assessment of the risks of material mis- We are in favour of adopting the financial state- ance with the regulations governing the prepara- statement, whether due to fraud or error. In making ments. The Board of Directors’ proposal regarding tion of financial statements and annual reports in such risk assessments, the auditor considers internal the application of profits shown on the balance force in Finland. The Board of Directors is respon- control where relevant to the entity’s preparation of sheet is in compliance with the Finnish Limited Li- sible for the appropriate arrangement of the con- financial statements and an annual report that give ability Companies Act. We are in favour of discharg- trol of the company’s accounts and finances, and a true and fair view. The auditor evaluates internal ing the members of the Board and the CEO from the CEO ensures that the accounts of the company control in order to design audit procedures that are liability for the financial period we have audited. are in compliance with the law and that its finan- appropriate to the circumstances, but not for the cial affairs have been arranged in a reliable manner. purpose of expressing an opinion on the effective- ness of the company’s internal control procedures. Helsinki, 13 February 2015 An audit also includes evaluating the appropriate- Ernst & Young Ltd Duties of the auditor ness of the accounting policies used and reasonable- Corporation of Authorised Public Accountants ness of accounting estimates made by management, Mikko Rytilahti Our duty is to express an opinion on the financial as well as evaluating the overall presentation of the Authorised Public Accountant, statements, the consolidated financial statements financial statements and annual report. Chartered Public Finance Auditor and the annual report on the basis of our audit. We believe that the audit evidence we have ob- The Auditing Act requires that we comply with the tained is sufficient and appropriate to provide a requirements of professional ethics. We have con- basis for the audit opinion.

56 Arctia Shipping Laivastokatu 9, 00160 Helsinki, Finland Tel. +358 30 620 7000 www.arctia.fi