ANNUAL REVIEW 2014 CONTENT \ PATRIA ANNUAL REVIEW 2014 \ 2

Content

Business 3 Patria briefly 3 Key figures 4 Review by the President and CEO 6 Aviation 8 Land 10 Systems 12 Millog 14 Nammo 16

Corporate Responsibility 17 Responsibility as the Basis of Operations 17 Ethical conduct 18 Good employer 20 Good partner 22 Environment 24

Governance 26 Risk management and internal control 26 Corporate governance 27 Group management 29 Board of Directors 30 Consultative Committee 31 GRI-table 32

Patria’s Annual Review consists of the Business Units’ Review, the Corporate Responsibility Progress Report and a separate Financial Statements Report. These parts complement each other. Patria’s Annual Review is published only at the company’s website www.patria.fi. PATRIA BRIEFLY \ PATRIA ANNUAL REVIEW 2014 \ 3

Patria briefly

Patria is a trusted provider of defence, security and aviation life cycle support services and technology solutions. Besides Finland, the Group has operations in Sweden, Norway, Estonia, Poland, the United Arab Emirates, the United States, and South Africa. Patria employs 2,800 professionals.

PATRIA’S BUSINESS UNITS AND NET SALES AS A SHARE OF PATRIA’S OPERATIONAL SITES GROUP NET SALES: IN FINLAND:

1. Espoo 2. Halli ADMINISTRATION 3. Hamina Admin, Finance, Marketing, 4. Hattula Business Development and Communication 5. Helsinki 6. Hämeenlinna 7. Jyväskylä AVIATION , AEROSTRUCTURES 8. Kajaani Extensive life cycle support for aircraft and helicopter fleet management including pilot 9. Kangasala training. The design and manufacture of 25% 10. Keuruu composite structures for aircraft and spacecraft. 11. Lappeenranta 12. Lapua 13. Lievestuore LAND Armoured wheeled vehicles, mortar systems, 14. Linnavuori ammunition, and life-cycle support services for 40% 15. Lyly these products. 16. Malmi 17. Niinisalo 18. Orivesi SYSTEMS 19. Oulu Systems for situational awareness and 20. Pansio applications and services supporting critical 9% infrastructure. 21. Pirkkala 22. Riihimäki 23. Rovaniemi MILLOG 24. Sastamala Patria’s subsidiary (61,8%) Millog produces life 25. Siikakangas cycle support services for the Finnish Army and Navy material. 26% 26. Sodankylä 27. Säkylä 28. Tampere 29. Tervola NAMMO Patria’s 50% owned Nammo AS focuses on development 30. Tikkakoski and provision of ammunition systems, missile and space 31. Upinniemi propulsion products as well as environmentally friendly 32. Utti demilitarisation services. 33. Vekaranjärvi 34. Vihtavuori

PATRIA’S VALUES

We want to succeed Our operations are customer oriented Together we create success KEY FIGURES \ PATRIA ANNUAL REVIEW 2014 \ 4 Key figures

In many respects, Patria Group’s earnings for the financial period 2014 measured up to expectations. As expected, net sales fell, but profitability remained satisfactory. The Group’s operating profit represented 12.1% of net sales. Sales outside Finland for the Financial Period accounted for 50% of the net sales.

Net sales Net sales* EUR million Operating pro t* EUR million EUR 462.4 million 87.8 Operating profit 78.3 589.5

EUR 56.0 million 514.2 462.4 56.0 52.1 415.0 Personnel average 348.5 2,546

0.9

2010 2011 2012 2013 2014 2010 2011 2012 2013 2014

Gross investments Personnel average* Order stock* EUR million in xed assets* EUR million

1,582.3 1,418.4 2,627 2,612 2,546 2,427 2,493 1,201.7 15.1 1,021.5 13.1 12.5 780.6 8.8 8.1

2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014

Equity ratio* % Net sales outside Finland* % TAX FOOTPRINT

55.8 56.1 Patria is subject to corporate income 54.6 43 48 49.7 tax in the following countries: Finland, 45.3 Sweden, Norway, Germany and Poland. 2010 2011 Patria does not have operative compa- 50 nies in low taxation countries. A dormant company in Delaware, U.S. Vammas Corporation, was liquidated in 2014. 44 54 2014 Patria’s tax strategy is to support 2012 2013 business solutions and ensure that 2010 2011 2012 2013 2014 they are implemented properly and in a compliant manner also from a taxation perspective. The starting point is comp- * The years 2010–2012 pro forma due to the change liance with applicable local legislation of Nammo’s consolidation method. From the year 2013 and handling reporting obligations. onwards, in Patria’s financial statements, Nammo is consolidated using the equity method. FURTHER INFORMATION www.patria.fi KEY FIGURES \ PATRIA ANNUAL REVIEW 2014 \ 5

Personnel Statistics

Personnel figures 2012 2013 2014

Personnel, on average 2,627 2,612 2,546

Personnel in Finland 2,567 2,592 2,436

Blue collar, % 41 41 40

Salaried, % 22 22 21

Senior salaried, % 37 37 39

Proportion of women, % 17 17 17

Proportion of women in Board of Directors 1/6 1/6 1/6

Proportion of women in Board of Management 1/7 1/7 1/7

Education level 2012 2013 2014

University, % 17 17 17

University of applied sciences, % 34 33 32

Vocational/upper secondary school, % 46 47 49

Basic education, % 3 3 2

Employment 2012 2013 2014

Average age 43.7 43.8 44.2

Length of services, yrs 13.9 13.9 14.3

Personnel turnover, % 4.5 2.9 2.4

Permanent employees, % 95 92 95

Part-time employees, % 2.2 2.6 2.4

Occupational health and safety 2012 2013 2014

Absenteeism attributable to sickness, % 3.9 3.9 4.2

The frequency of accidents, qty per million work hours* 13 13 17

Employer image 2012 2013 2014

Technology students, Universum - Patria’s ranking 25 31 23

Working people (technical education) Universum 29 52 26

* The figure is calculated according to the instructions of the Federation of Accident Insurance Institutions (FAII). The figure is based on accidents at work that have brought costs. The figure does not include occupational diseases nor work trip related accidents.

The figures cover Patria and the employees of Finnish companies of which Patria owns more than 50%.

Stakeholder-specific capital flows (MEUR)

Direct economic value, EUR million 2011 2012 2013 2014

Consolidated net sales 618.4 736.1 589.5 462.4

Other operating income 5.0 7.9 27.7 28.5

Financial income 1.3 1.3 0.4 1.3

Customers Sales Income total 624.7 745.3 617.6 492.1 Suppliers Goods, materials and services Operating costs excluding depreciation 338.2 411.0 356.0 265.5 and personnel expenses Personnel Wages, salaries and fees Personnel expenses 203.4 224.7 156.5 154.7

Public sector Taxes Payments to government (taxes) 6.5 6.1 5.9 4.6 Not-for-profit Support and donations Donations and other charitable payments 0.1 0.0 0.0 0.0 organisations Payments made to shareholders and loan providers

Shareholders Dividends Dividends 0.0 10.3 19.0 38.0

Investors Financial costs Interest and other financial expenses 4.0 3.7 3.5 2.5

Expenses Distributed, total 552.2 655.8 540.9 465.4

Sales-expenses = added value Economic value retained for operational development 72.5 89.5 76.7 26.7 Investments Investments in tangible and intagible assets 28.9 31.4 17.7 8.1 as well as acquisitions

Nammo Group has been consolidated using the equity method starting from 1st of January 2014 instead of the proportionate method line by line used earlier. The comparative information of the year 2013 has been restated to be in line with the new consolidation method. The comparative information based on the previous consolidation method is presented in the Financial Statements Report, which can be read at http://patria.fi/en/patria/financial/financial-reviews. REVIEW BY THE PRESIDENT AND CEO \ PATRIA ANNUAL REVIEW 2014 \ 6

A year of adaptation confirms expectations

n many respects, Patria Group’s earnings for the financial period I2014 measured up to expecta- During the financial year, tions. As expected, our net sales fell, but profitability remained operations were reorga- satisfactory. The signing of a long- nised and adapted to the term contract between Millog and the Finnish Defence Forces (FDF) on changed conditions. the deepening of the two parties’ strategic partnership represents the most notable step forward in fleet progressed as planned. We se- 2014, bringing the Army garrison cured an agreement on provision of repair shops and the Navy mainte- support for the maintenance of Swe- nance centres under the respon- den’s HKP16 Black Hawk helicopters, sibility of Millog. Not only Millog we also started retrofit installations but also the Aviation Business Unit on the NH90 helicopters already exhibited an increase in the number delivered. of new orders. By contrast, the Deliveries of AMV vehicles to order intake of the Land Business Sweden entered their final phase, Unit decreased compared with the progressing according to plan. A previous year, due to project post- project on vehicle deliveries to South ponements, a fitting indication for African National Defence Force was the current market situation, in the launched. In Finland, the first mod- international market in particular. In ernised XA-180 armoured personnel the course of the financial period, carrier was delivered to the FDF. our operations were developed At the end of the year, the Land further, and were geared in a more Business Unit signed a strategically cost-effective and flexible direction important contract on the delivery in order to cope with the changes of AMV component kits to Poland, that had occurred in the operating a follow-up measure to the man- environment. At the end of the fi- ufacturing of AMV vehicles under nancial period, a substantial change licence in Poland over a period of in Patria’s ownership structure took more than ten years. In order to place, as the Airbus Group sold its secure a vehicle project in Aus- share (26.8%) of the company. tralia, an extensive agreement on cooperation with BAE Systems was PROGRESS IN PROJECTS signed. We delivered Nemo mor- Many projects important to Patria tar systems to Canada, under the made headway during the financial Foreign Military Sales project of the period. The Hawk trainer fighter United States government, as well modernisation project was com- as Nemo Navy systems to the the pleted, and the second life-cycle United Arab Emirates Navy. Our joint upgrade of Hornet fighters and the venture Patria Hägglunds delivered structural upgrade of the fighter to the FDF the last AMOS mortar REVIEW BY THE PRESIDENT AND CEO \ PATRIA ANNUAL REVIEW 2014 \ 7

systems manufactured in the serial Industry Group (ELDIG), which production phase. operates under the auspices of the Other key events during the The signing of a long-term AeroSpace and Defence Industries financial period included the delivery Association of Europe (ASD). This of the modernised Rauma Class Fast contract between Millog will open up new opportunities for Attack Crafts to the Finnish Navy, and the Finnish Defence the development of the industry showcasing of a new training simu- and for creating standardised indus- lator for the Patria Nemo mortar sys- Forces on the deepening of try-wide practices. tem, and the launch of a new wireless the two parties’ strategic In Finland, we have continued our networking data link called CANDL. long-term work in the prevention of In addition to Millog’s partner- partnership represents the youth marginalisation. We sup- ship agreement, a contract signed most notable step forward port the activities of the Save the between Millog and the Army on the Children Finland organisation, also delivery of fire control sensors, and during the year. acting as the main sponsor of the a contract signed by Oricopa with VL Myrsky (‘Storm’) fighter aircraft Norwegian Kongsberg concerning restoration project which engages missile systems, marked other note- young people through workshops. worthy events. Kanta-Häme District Court in the autumn of 2014. A GLANCE AT THE FUTURE REORGANISATION OF After the financial period, in The forecast for the Group’s opera- OPERATIONS February 2015 the District Court of tions on the whole is stable. Many During 2014, operations were Kanta-Häme issued its judgment of the projects already under way, reorganised and adapted to the that sentenced two (2) former Patria related to equipment life-cycle changed conditions. The Sastamala employees to conditional imprison- management, as well as the main- ammunition unit was sold to Nammo ment. Charges against one former tenance activities outsourced to Lapua Oy, and the space business Patria employee were dismissed. Millog, are progressing as planned. operations to RUAG. Due to financial A corporate fine was imposed on In terms of orders, the situation will and production reasons, coopera- Patria Land Services Oy. Patria has depend on whether certain large ex- tion negotiations were conducted appealed against the verdict and port projects, now at the tendering in the Land, Aviation, Systems and the process will continue in the stage, are launched on international Aerostructures Business Units. Appeal Court. markets. The company is involved These measures were put in place to in several significant tendering adapt the headcount and organisa- ETHICAL AND RESPONSIBLE processes. Internally, we continue to tion of the various Business Units to PRACTICES develop our operations along more match their work situation and order Patria’s Board of Directors and cost-effective and flexible lines. book, and to ensure their future senior management have clearly At the beginning of the financial competitiveness. communicated their requirement period 2015, the state owner, in for zero tolerance for unethical collaboration with Patria, began JUDICIAL PROCEEDINGS practices. Ethical practices consti- measures to find a new minority PROGRESSED tute part of Patria’s values and lay shareholder for the company. The In its judgment issued January 2014, the foundations for our operations, objective is to find a strong indus- the District Court of Kanta-Häme their constant development being trial partner that will bring with it dismissed all bribery charges and very important to us. We have again know-how, thus strengthening the the corporate fine claim against the organised online training on ethical company’s business development company related to the Slovenian practices for our entire personnel, and creating synergy benefits export project during 2005–2007. with excellent results, supporting especially for the international The State Prosecutor has appealed it with a variety of targeted infor- market. against the verdict and the case is mation sessions at a large number I would like to thank all of our cus- pending with the Appeal Court. of Patria sites. Ethical practices also tomers, owners, partners and other The main hearing concerning the played a prominent role at the Patria stakeholders and all of our employ- bribery charges and the corporate Day event, arranged for the entire ees for excellent cooperation. fine claim against the company personnel. related to the Croatian vehicle deal Patria has begun its chairman- Heikki Allonen in the year 2007 was conducted at ship of the European Land Defence President and CEO AVIATION \ PATRIA ANNUAL REVIEW 2014 \ 8

Pilot training and life-cycle support services for aircraft

The Aviation Business Unit continued work on key projects. The delivery of modernised Hawk trainer aircraft to the Finnish Air Force (FAF) marked one of the major events. An agreement on the provision of pilot training was signed with the Kazakhstan Civil Aviation Academy.

atria’s know-how with regard SUPPORTING THE CUSTOMER to airplanes and helicopters in- IN THE DEFENCE REFORM AVIATION Pcludes assembly, manufacture In response to the defence reform of repair parts, maintenance, devel- and the FAF cost-saving programme, The Aviation and Aerostruc- opment as well as modifications Patria provided new solutions, tures business units offer life- and pilot training. Experience ensuring the continued capability of cycle support services for air- dating back for decades the FAF to maintain and develop its craft and helicopters, primarily lays a strong foundation performance level, even at times of to the authorities and military for Patria’s expertise shrinking economic resources. Patria clients in Northern Europe. and commitment has reorganised its operations in or- Life-cycle support services cover to the devel- der to meet the requirements set by fuselage, engine, and equip- opment the defence reform. The target is set ment repair, maintenance and of avia- in terms of ensuring the availability, modification and pilot training. tion. quality and cost-effectiveness of the Additionally, Patria offers design life-cycle support services provided and manufacture of composite by the company. structures. In connection with the reform, some maintenance functions Personnel were transferred to the Tikkakoski and Pirkkala 1,022 units, close to the Net sales as a share customer. Some of of group net sales Patria’s Hawk- related op- 25% erations Personnel as a share are of group personnel 40% AVIATION \ PATRIA ANNUAL REVIEW 2014 \ 9

now concentrated to Tikkakoski. structures, product support During the summer, maintenance of and deliveries to Airbus A380, transport aircraft was transferred from Experience dating back A400M and A330 aircraft pro- Tikkakoski to Pirkkala, to the premises for decades lays a strong grams. Structures were also delivered under the Satakunta Air Command. to other defence and aerospace foundation for Patria’s technology companies. KEY PROJECTS IN PROGRESS expertise and commitment The Hawk trainer aircraft mod- FLIGHT TRAINING ernisation project was completed, to the development UNDER DEVELOPMENT with the last upgraded Hawk Mk66 of aviation. In April, The Kazakhstan Civil aircraft delivered to the FAF in Aviation Academy and Patria Pilot March. After this modernisation, the Training signed an agreement on the avionics system of the Hawk Mk66 in collaboration with the customer. provision of commercial pilot train- aircraft includes all the features In August, Patria and the Swedish ing. Patria will train 12 Kazakh stu- required in modern pilot training. Defence Materiel Administration dents by the end of 2015. Upon com- The Hawks’ training efficiency will (FMV) signed a major agreement pletion of the training, the students be improved and instead of the on provision of support for the will receive commercial pilot licences Hornet fighters currently used, the maintenance of Sweden’s HKP16 (CPL) with multi-engine and instru- Hawk fleet will be deployable for Black Hawk helicopter in Linköping, ment ratings in compliance with a number of training tasks, but at Sweden. This agreement covers the decrees issued by the Council more affordable operating costs. the years 2015–2017, including an of Europe. The students will also be The Mid Life Update of Hornet option for extending it until 2020. fully trained in airline transport pilot fighters (MLU2) progressed as The assembly of NH90 transport theory and crew operations. Patria planned, with deliveries continuing helicopters for Finland and Sweden, is also negotiating with the Kazakh- until the end of 2016. Structural up- continued in Halli. The last NH90 stan Civil Aviation Academy on the grade (SPR) of the fighter fleet also for Finland was ready for delivery at training of flight instructors for the progressed as planned, and these the end of the year. The assembly of Academy and the establishment of a deliveries will continue until 2018. last helicopters for Sweden will be local training centre in Kazakhstan. In January, Patria and the Swiss completed in 2015. At the end of May, Patria and the company RUAG signed an agree- In the beginning of 2014, the Finnish Aviation Academy (SIO) signed ment on industrial cooperation Halli unit began retrofit installa- a contract on training cooperation, regarding life-cycle support ser- tions for NH90 helicopters, thereby covering the years 2014 and 2015. vices for Finnish and Swiss F/A-18 launching a major project spanning Patria is investigating options Hornets. Similar services will be the years 2014–2018 to upgrade available to it in the development offered to other countries using the helicopters already delivered to of its civilian pilot training and as Hornet aircraft, including the USA, the final operational configuration. a solution to the decision to close Canada, Australia, Spain, Kuwait Patria signed a subcontracting the Malmi airport. and Malaysia. This agreement will agreement with Turbomeca S.A. for Military pilot training and main- improve cooperation and exchange maintenance services for the TM322 tenance of the Vinka trainer aircraft of information and experiences engines used in NH90 helicopters has progressed along established between the countries involved, globally. This contract will boost lines. The Finnish Air Force has contributing towards improved significantly Patria’s exports of started a process of finding a suc- cost-effectiveness. maintenance services, as well as cessor for the Vinka trainer. Patria Maintenance of NH90 helicopters enhance the capabilities of serving will be interested in participating at the Army Aviation Base in Utti, Nordic customers through expanded in the maintenance of the new has worked as planned, providing spare-part services. aircraft, as well as in offering flight an opportunity for finding ways to Patria’s Aerostructures unit contin- training for this aircraft. improve the usability of helicopters ued the manufacturing of composite LAND \ PATRIA ANNUAL REVIEW 2014 \ 10

Strong export products for the international market

Deliveries by Land business unit proceeded according to plans. Patria introduced new technology such as the training simulator for Patria Nemo mortar system and a new member to AMV product family, Patria AMVXP vehicle, developed to meet customers’ future needs. Due to a difficult market situation, Patria adapted its operations to match the order book and to improve its future competitiveness.

ith deliveries to seven to pursue a major Australian combat countries, Patria AMV is the vehicle program Land 400 with LAND market leader among 8x8 BAE Systems as prime contractor. W Patria’s core expertise is in the armoured wheeled vehicles, with BAE Systems and Patria are now the latest addition to this product engaged in collaboration to develop high-quality armoured wheeled family, Patria AMVXP, providing further a solution, based on Patria AMV, for vehicles, mortar systems, and in the strength to the company’s product the Australian project. related life-cycle support services. range. This vehicle’s highly intensive The delivery project on 113 vehi- Patria AMV product family and Patria testing phase verified that its features cles for the Swedish Armed Forces Nemo mortar system are the high- met the expectations. Patria AMVXP proceeded according to plan, with est-profile products in this range. provides the best solutions to match all the products and services being Both AMV and Nemo are market the customer needs of tomorrow. delivered during 2014, in accord- leaders in their product segments. Key events of the year included ance with the contract. The contract the showcasing of the training simu- also includes an option for 113 Personnel lator for Patria Nemo mortar system vehicles and the related life cycle at Eurosatory exhibition in Paris. This support services. 450 training simulator creates a realis- The serial production and deliv- Net sales as a share tic, virtual training environment for ery project of Patria AMVs for the of group net sales the provision of training on firing South African National Defence procedures enabled by Patria Nemo Force was launched in accordance 40% mortar system. with the contract. The contract Personnel as a share includes 238 vehicles; of these, of group personnel PROJECTS MAKING PROGRESS five prototype series vehicles In September BAE Systems and were already delivered during the 18% Patria signed a teaming agreement development phase of the project. LAND \ PATRIA ANNUAL REVIEW 2014 \ 11

Patria will be responsible for the products were delivered to Cana- production of the first 16 vehicles. Ongoing projects are da. There, General Dynamics Land Thereafter, serial production will be Systems Canada integrates the moved to South Africa, with Denel expected to provide a Nemo systems in the LAV II vehicles Land Systems being responsible for successful continuation it has manufactured. US Govern- the production and final integration ment verification tests, part of the of the vehicles and Patria delivering to the export efforts of project, continued according to plan the basic component kits. the Land Business Unit in in Arizona, United States. The Nemo In November, Patria delivered system passed these stringent the first in a series of modernised the coming years. tests, earning the product approval XA-180 personnel carrier, known as of the US Army. Pasi, to the Finnish Defence Forces an ensuing redundancy of the unit’s Patria delivered the last in the (FDF), in line with an agreement 23 employees. A solution to contin- series of Nemo Navy mortar sys- between the FDF and Patria’s sub- uing the unit’s operations presented tems to the United Arab Emirates sidiaries. Based on the first pre-se- itself when Patria sold the unit to Navy, which has already put the ries product, a production series of Nammo Lapua Oy, a company that first ones of them in operation. 70 vehicles will be manufactured will continue the unit’s production In Finland’s AMOS project, Patria in 2015–2017. The contract also in- and has employed a significant por- delivered, via Patria Hägglunds, the cludes an option, whose implemen- tion of the former personnel. prime contractor, the rest of the tation would extend to 2021, for In April, on financial or produc- vehicles coming from the serial pro- the modernisation of 210 vehicles. tive grounds, cooperation nego- duction, according the contract, also At the end of the year, negotia- tiations were commenced at the completing all the modifications to tions were concluded and a contract Business Unit, affecting the Unit’s the pre-series vehicles in order to was reached on the delivery of all functions and all personnel make them equivalent to the serial AMV components to Poland, whose groups and leading to a reduction production version. Furthermore, defence ministry had placed an ad- of 100 fixed-term employees in Patria ensured the utility of the ditional order for AMV 8x8 vehicles the headcount in the course of the AMOS systems already delivered with Rosomak S.A., Patria’s Polish summer and autumn, after the ne- for conscript training, within the partner. According to this contract gotiations had been terminated. A framework of a support programme. Patria will deliver components for further 30 employees were laid off. Patria’s role as one of the FDF’s 200 vehicles for Rosomak S.A., Objective of the negotiations has partners requires engagement in which produces the vehicles under been to adapt the number of em- R&D and testing activity, including Patria’s license. ployees and organisation to meet test firing. FDF firing ranges are the current workload and order used for the testing of weapons REORGANISATION OF stock. The main target has been systems, ensuring continuation of OPERATIONS to secure competitiveness of the the development of such systems Patria conducted cooperation Land business unit in the future. within Finland. negotiations at the Sastamala ammunition unit, due to a MARKET LEADER IN TURRETED MARKETING AND SALES reduction in the number MORTAR SYSTEMS PROJECTS UNDER WAY of orders from the Patria’s turreted mortar systems In addition to contracts already FDF. A decision are among the most advanced signed, Patria has armoured was made to indirect fire systems on the market. wheeled vehicle and mortar system close the Key products include single and marketing and sales projects under unit, twin-barrelled 120 mm mortar sys- way for several old and new cus- with tems, in which Patria is an interna- tomers. The company is involved tional market leader. in tendering processes in various Serial production of the Nemo countries, including the United Arab mortar systems, under the Foreign Emirates, Switzerland and Austral- Military Sales project of the ia. These projects are expected to United States government, provide a successful continuation to continued throughout the export of the Land Business Unit the year 2014 in in the coming years. Hämeenlinna, from where the completed SYSTEMS \ PATRIA ANNUAL REVIEW 2014 \ 12

Integration projects and systems expertise

Key events for the Systems Business Unit included delivering the modernised Rauma Class Fast Attack Crafts to the Navy, showcasing the new training simulator for the Patria Nemo mortar system, and the launch of the new wireless networking data link called CANDL. Business was consolidated through the divestment of the Systems Business Unit’s space business.

atria’s key competence areas include systems integration SYSTEMS Pprojects, of which the company The Patria Nemo mortar has acquired solid experience both system training simulator Systems makes comprehensive in Finland and abroad. In these pro- system and equipment deliveries jects, Patria assumes responsibility creates a realistic, virtual to defence forces and security au- for the functionality of the overall training environment for thorities. Areas of special exper- systems assembled from sub- tise are intelligence, surveillance systems, as well as for the life-cycle the provision of training and command and control sys- management of such systems and tems, as well as their integration, on firing procedures. software. The successful way in software and life-cycle support. which the modernisation project of the Rauma Class Fast Attack Crafts the 2020s, enhancing their per- Personnel was carried out constitutes sound formance. Patria was the prime proof of Patria’s expertise. contractor in the project. 266 The four Rauma Class Fast Attack Net sales as a share Crafts – Rauma, Raahe, Porvoo COST-EFFECTIVE of group net sales and Naantali – were delivered to SIMULATOR TRAINING FOR the Navy in March, after the up- THE NEMO MORTAR SYSTEM 9% grade project, begun in 2010, was In June, Patria showcased the train- Personnel as a share completed. This major life-cycle ing simulator for the Patria Nemo of group personnel upgrade project for the Rauma class mortar system at the Eurosatory vessels, completed in 1990–1992, exhibition. This training simulator 10% will extend their lifespan well into creates a realistic, virtual training SYSTEMS \ PATRIA ANNUAL REVIEW 2014 \ 13

environment for the provision of and robust communications, such training on firing procedures of the as transfer of unmanned systems’ Reliable data communications Patria Nemo mortar system. The payload and control data. CANDL are central to all defence sys- simulator makes use of Patria’s provides a solution to the demands broad expertise, which enables the for a compact data link system com- tems and also an important company to meet the increasingly bining secure control data connec- area of expertise for Patria. strict customer requirements set tion and high data rate. for the Nemo system. The simulator also combines Patria’s long-term ADAPTATION TO THE MARKET experience of aviation training During February and March, Patria’s simulators, fire control systems and Systems Business Unit held coop- weapons systems into one product. eration negotiations, resulting to a reduction of 39 employees in the NEW AND RELIABLE headcount. In the same connection, DATA TRANSFER TECHNOLOGY the Business Unit’s organisation Reliable data communications are and structure were geared towards central to all defence systems: this meeting the changes in the operat- is also an important area of exper- ing environment. tise for Patria. The company has In December, Patria and RUAG further expanded its offering in announced the acquisition by RUAG the field of secure data communica- of Patria’s Space Unit, whereby it tions solutions. became part of RUAG’s space busi- Patria’s new data communications ness. This transaction also includes solution, named CANDL (Compact Patria’s business operations related Airborne Networking Data Link), to space business. All the 29 employ- was showcased at the MILCOM 2014 ees at the Patria Space Unit, located conference in the United States in Tampere, will be transferred to in October. CANDL is designed for the employment of RUAG Space Fin- applications which require reliable land, a company recently founded. MILLOG \ PATRIA ANNUAL REVIEW 2014 \ 14

Millog – the strategic partner of the Finnish Defence Forces

Millog, the provider of life-cycle support services for the Finnish Defence Forces FDF, continues positive development. The key events of the year were the signing of the extended strategic partnership contract, the contract for delivering night vision devices to the FDF and its subsidiary Oricopa’s entering to the delivery contract of the NASAMS ground-to-air missile system project with Kongsberg Defence & Aerospace AS.

SIGNIFICANT ENLARGEMENT maintenance responsibilities of OF THE FDF PARTNERSHIP Army and Navy material. This part- MILLOG CONTRACT nership contract covers the period In September of 2014, Millog and between 2015 and 2020 at a fixed Patria’s subsidiary Millog (Patria’s the FDF signed a partnership price of €581 million and being share of Millog’s stocks is 61.8%) is contract, thereby expanding effective until further notice. The the FDF’s strategic partner, and deepening their exist- contract covers life-cycle support providing life-cycle support servic- ing strategic partner- and repair services for Army mate- es for material under the responsi- ship. The company rial related to wheeled and tracked bility of the Army and the Navy, in assumed a vehicles, electronics, missile and both normal and crises time. Such greater role weapon systems and equipment, services include the maintenance in the as well as related modifications and of wheeled and tracked vehicles, FDF’s installations. The enlarged contract weapon and electronic systems, also includes vessel and system naval vessels and systems, as well maintenance and related services as the materiel services and life-cy- for the Navy. As a result of the FDF cle services including modifications reform the Logistics Command and installations. became operational from 1st of January 2015 and Personnel Millog was given a more prominent role in the 698 annual planning and imple- Net sales as a share mentation of group net sales of the 26% Personnel as a share of group personnel 27% MILLOG \ PATRIA ANNUAL REVIEW 2014 \ 15

The fact that Millog was chosen as the supplier for the Finnish Defence Forces as a result of in- tense international competition provides an im- portant reference for the company in its efforts to bring products to the international market.

maintenance process. A total of 317 chosen as the supplier as a result of people were transferred from the intense international competition FDF to Millog. After the transfer provides an important reference for Millog employs more than one thou- the company in its efforts to bring sand maintenance professionals. products to the international market.

DEMAND FOR SIGNIFICANT CONTRACT NIGHT VISION DEVICES FOR ORICOPA The Finnish Defence Forces and Mil- In May, Oricopa Oy, a 100% owned log signed an agreement on target subsidiary of Millog, and Norwegian acquisition sensors. The value of Kongsberg Defence & Aerospace AS the contract is €26.8 million. The signed a contract, worth €25 mil- deliveries of the Millog LISA sensors lion, on deliveries for the NASAMS and accessories will take place in anti-aircraft system. Oricopa’s role 2014–2017. The sensors, based on in the deal is the manufacturing uncooled thermal imaging technol- of containers for housing commu- ogy will be manufactured by Millog nications and command systems in Finland. Amounting to almost 140 and devices. Oricopa will install the person-years, this deal will have a systems in containers and manufac- significant employment effect for ture components for the systems. Millog and its subcontractors. The contract will provide employ- The contract will strengthen ment to Oricopa and its supply chain Millog’s position as a domestic amounting to nearly 100 person- developer and supplier of optronics years. Deliveries will take place in products. The fact that Millog was 2015–2017. NAMMO \ PATRIA ANNUAL REVIEW 2014 \ 16

Nammo – high-tech ammunition

Specialising in ammunition, missile rocket motors and environmentally sound demilitarisation services, Nammo continued on a track of stable development.

ammo Group is owned in Finland. Nammo will take owner­ship equal shares by Patria (50%) of the Sastamala production facility, NAMMO Nand the state of Norway providing employment to a substan- (50%). In Patria’s financial state- tial proportion of the personnel now Nammo AS develops and ments, Nammo Group was rede- engaged in production at the plant. manufactures high-technology fined, at the beginning of 2014, as a Earlier during the financial year, ammunition both for military joint venture, and is now consolidat- Nammo Lapua Oy purchased the and civilian uses. Other products ed using the equity method instead Vihtavuori gunpowder factory from include shoulder-launched muni- of the proportionate method. the French Eurenco. tions systems and rocket motors Nammo is strongly focused on Nammo’s strengths include high for military and space applications. the international market, with more technology, an extensive product Nammo is the world-leading than 70 per cent of its turnover range and operations in the inter- provider of environmentally sound originating from outside the Nordic national market. The company’s key demilitarisation services. Nammo countries, with the USA and Cana- market areas include the Nordic has subsidiaries in Australia, da being the largest markets. The countries, North America and Eu- Canada, Finland, Germany, Nor- company has continued develop- rope. way, Sweden, Switzerland, Spain ing along a stable track, despite Nammo’s business focus areas and the USA. Nammo is owned in significant cuts to defence budgets vary from year to year, depending equal shares by Patria (50%) and worldwide. on market developments, with the the state of Norway (50%). various areas even compensating NEW BUSINESS AREAS for each other’s developments. The IN FINLAND Nammo Group continues to seek In 2014, Nammo Lapua Oy, a subsidi- growth in its current markets, both ary of Nammo, acquired an ammuni- organically and through acqui- tion production facility, located sitions. Nammo AS publishes its in Sastamala and owned at the time own annual report and corporate by Patria. With this contract in effect, responsibility report, available on the production of components for the company’s website at heavy ammunition will continue in www.nammo.com. RESPONSIBILITY AS THE BASIS OF OPERATIONS \ PATRIA ANNUAL REVIEW 2014 \ 17

Responsibility as the Basis of Operations

n defence business environment, embrace. Patria provides, requires At Patria, ethical conduct has been safeguarding business continuity and develops cost-effective opera- adopted throughout the organisa- Iis of paramount importance. This tions together with its stakeholders. tion, with the operational metrics, requires profitable and responsible evaluated by the senior manage- operations. In addition to financial BEING AN EMPLOYER ment on a regular basis, constitut- performance, Patria bears respon- Patria holds transparent cooper- ing part of the conscious choices sibility for the well-being of its ation in high regard, values com- made by the company. employees and the environment. petence and experience, treats Patria also acknowledges its role in its personnel in an equal and just ENVIRONMENTAL increasing responsibility across the manner, and attends to the person- RESPONSIBILITY industry at national and interna- nel’s well-being. At Patria, responsibility for the tional level. environment finds an expression Patria bases its profitable busi- ETHICAL CONDUCT in the company’s recognition of ness operations on good partnership Patria’s ethical business practice the possible environmental impact relations. The Group aims to be a is founded on an absolute require- that its products and services pose, good partner by being a good em- ment for zero tolerance with regard and in the active measures taken ployer and an ethical player. Patria to unethical conduct, set by the to diminish such impact. We abide takes into account all identified envi- Board and the senior management. by the environmental legislation, ronmental issues, including their im- Ethics are embedded in everyday obtaining all environmental permits pact on business planning, business work, begin with the individual, and required by authorities for our oper- operations and management. apply to everyone. Ethical conduct ations. Our most significant pro- goes beyond compliance with laws, duction facilities feature certified PARTNERSHIP international treaties and customer environmental systems. For Patria, a good partnership is contracts, including collaborative defined in terms of professional, re- agreements, and encompasses the FURTHER INFORMATION liable, open and transparent collabo- prevention, detection and inspec- www.patria.fi/EN/ > Corporate ration, which all parties involved can tion of identifiable industry risks. responsibility

GOOD PARTNER

GOOD ETHICAL ENVIRON- EMPLOYER CONDUCT MENT ETHICAL CONDUCT \ PATRIA ANNUAL REVIEW 2014 \ 18

Ethical conduct is a prerequisite for success

In Patria ethical conduct is founded on the absolute requirement for zero tolerance with regard to unethical conduct, set by the Board and the senior management. Ethics are embedded in everyday work, begin with the individual, and apply to everyone. Ethical conduct goes beyond compliance with laws, international treaties and customer contracts, as well as agreements on collaboration, and encompasses the prevention, detection and inspection of identifiable industry risks. Ethical conduct has been adopted throughout the organisation and indicators of ethical conduct are regularly monitored by top management and affect the company’s conscious decisions.

ost of the targets set for the EDUCATION year 2014 were achieved. Patria’s personnel engage in ethical MWith regard to the training training seeking to increase their of the personnel, a coverage rate awareness and understanding of 99 per cent was achieved and by undergoing an annual online Patria took an active partition in the training programme. Out of Patria’s survey conducted by Transparency personnel in Finland, 99 per cent International. The results will be completed this training, compared published in April of 2015. with 92 per cent in 2013. All new At Patria, continued efforts were Patria employees learn about our directed towards the development policies regarding ethical operations of ethical practices and anti-cor- during their orientation period. ruption measures. The company Ethical training was also expand- actively and openly communicated ed to Sweden, where a coverage of its commitment to these impor- rate of 90 per cent was achieved, as tant matters. well as to Millog, a Finnish com- Patria signed the UN Global Com- pany whose stocks are 61.8 per pact initiative to combat corruption, cent owned by Patria, where the and reported for the first time on entire staff not only participated in its operations to promote the UN classroom training but also under- Global Compact’s principles. went an online course. At Millog, a Patria signed the UN Global new guidebook for ethical practices, MANAGEMENT Compact initiative to entitled “The Millog Code” , was The steering of ethical practices published, corresponding to a pub- was made the responsibility of combat corruption. lication by Patria entitled “Ethical the Group Board of Management, Method of Operation”. a task held previously by a sepa- Ethical practice was one of the rate steering group. This will add themes on Patria’s company-wide to transparency and encourage training day in Tampere, held in dialogue across the entire Group. November. The responsibilities were also more clearly defined; responsibility for OBSERVATION providing guidance on and monitor- Patria’s personnel are encouraged to ing for ethical practices was written report on unethical activity, primar- into the charter of the Audit Board ily to their supervisors or through of the Board of Directors. their shop steward’s organisation. ETHICAL CONDUCT \ PATRIA ANNUAL REVIEW 2014 \ 19

Out of Patria’s personnel in Finland, 99 per cent completed the ethical operations training.

A channel for anonymous reporting no discernible potential for serious is also available. A total of 12 reports infringements exists at Patria. OBJECTIVES TO BE were submitted through the re- The survey results have been ACHIEVED BY 2017 porting channel, five of which were taken up in the risk management • Patria’s principles re- anonymous, with one report being steering group, as part of the risk garding ethical practices submitted directly to the General management process. and the anti-corruption Counsel. All the reports were inves- measures it takes have tigated and results were reported PARTNERS permeated the company’s to the Audit Committee. No indica- Patria’s partners are obliged to stakeholders, with Patria tions of serious infringements were achieve, in their operations, a level being viewed as a company detected in the reports. The number corresponding to that specified by with a high standard for of reports fell compared with the Patria’s ethical guidelines. During the ethical practices. previous year when they numbered financial period, Patria was engaged • Patria’s most important 15. This reduction is believed to be in an active dialogue on ethical prac- partners operate on a level attributable to active training. tices with South African Denel, Polish corresponding, at mini- The reporting and investigation Rosomak, Croatian Duro Dakovic and mum, to that specified in processes were described in Patria’s Norwegian Kongsberg. Patria’s ethical guidelines. Integrated Management System, A further step in this sphere • Patria’s personnel is aware with a description being drafted of was the introduction of a process of the ethical principles and the management of personal data. for the evaluation of the vendors’/ the right conduct in the var- subcontractors’ economic situation ious aspects of their work. FIGHT AGAINST CORRUPTION and ethical practices, as well as the Combating corruption was made a creation of a system for the conduct FOCUS AREAS IN 2015 separate development area, with of background surveys, to enable • To increase openness and Patria’s policy statements regarding improved partner and supplier chain transparency in Patria’s such activity being collected and management. ethical practices presented on Patria’s website. • To develop collaboration The company participated ac- LEGAL PROCEEDINGS and dialogue with our part- tively in a survey entitled ‘Defence Patria has been in the public eye ners and vendors Companies Anti-Corruption Index’, following certain court cases. In • To expand our training conducted by Transparency Interna- its judgment issued January 2014, offering through increased tional, whose results will be pub- the District Court of Kanta-Häme use of eLearning modules lished in April of 2015. dismissed all bribery charges and • To develop further the pro- Patria signed the UN Global Com- the corporate fine claim against the cess applied to the selec- pact initiative to combat corruption. company related to the Slovenian tion of business partners export project 2006. The State RISK MANAGEMENT Prosecutor has appealed against A survey of the possible occurrence the verdict and the case is pending of serious infringements in Patria’s with the Appeal Court of Turku. The operations was conducted in the main hearing of the case shall take fine was imposed on Patria Land company. This survey will be repeat- place at the Appeal Court during Services Oy. Patria has appealed ed every two years. The manage- spring 2015. against the verdict and the process ment of the Group’s Business Units, On 16 February 2015 the District will continue in the Appeal Court. the sales and marketing personnel Court of Kanta-Häme issued its and the financial and procurement judgment that sentenced two FURTHER INFORMATION personnel were selected as re- (2) former Patria employees to www.patria.fi/en/ > corporate spondents for the survey, in addition conditional imprisonment for responsibility > Ethical conduct to which 10 per cent of the compa- aggravated giving a bribe in relation • Anti-corruption ny’s other personnel were randomly to the Croatian export project • Export licence procedure sampled. According to the survey, during 2005–2008. Also a corporate • Corporate responsibility networks GOOD EMPLOYER \ PATRIA ANNUAL REVIEW 2014 \ 20

Responsible employer

Patria holds transparent cooperation in high regard, places a value on competence and experience, treats its personnel in an equal and just manner, and attends to the personnel’s well-being at work.

n 2014, Patria’s headcount fell framework under which those in by approximately five per cent. a managerial position can develop I Although jobs in certain sec- their supervisory and management tors decreased, in others more skills. The guiding principle behind staff were hired. According to the the programme’s renewal was to employer survey conducted by create a tighter and more practical Universum, Patria ranks among the link between new skills and the 30 most interesting workplaces in daily routines, and to encourage Finland; according to the Federation supervisors to assume a stronger of Finnish Technology Industries, role in the renewal process for the company is the 10th biggest their areas of responsibility and in employer. the leadership of their teams. The Patria paid attention to develop- renewal of the STEP programme ing managerial skills and personnel was a remarkable success, with the assessments, as well as to staff’s participants giving its first module well-being, health and occupational an average rating of 4.6 points out safety. The development has by and of five possible. large been positive. With regard to the employer image and devel- IDENTIFICATION OF TALENT opment discussions, the meas- New methods for personnel urements developed in a positive assessment were introduced at direction, but absenteeism due Patria, aimed at identifying talent In the employer image to sickness exhibited a trend that and singling out people’s varying survey by Universum, was more negative than expected, motivational factors. Experiences albeit understandable considering obtained from these methods have Patria’s ranking rose the work situation. been encouraging, and they will see from No. 31 to No. 23. a more widespread application in PERFORMANCE MANAGEMENT the development of work teams. Patria’s supervisors were trained A special two-year programme, to set annual targets, review them named Patria LEAP, is helping em- with their teams, specify the skills ployees with recognised potential required for the work, and monitor to develop their skills. People par- target achievement on a regular ticipating in the programme receive basis. In addition, targeted supervi- both individual and group-level were well-being and coping with sor training events were arranged. support, aiding them to grow as work. Feedback obtained on the Personal targets for annual target employees and to assume more Patria Day provided further proof achievement are agreed in perfor- responsible positions at Patria. The of a positive employer image. The mance reviews, with the achieve- programme has received positive participants gave the event an aver- ment rates and their usefulness feedback – 5.6 points out of seven age rating of 4.1 points out of five. A being monitored on a regular basis. possible. corresponding event was arranged The implementation rate for perfor- for Millog’s personnel. mance reviews was 93% while in WELL-BEING AT WORK, HEALTH Patria employees, whose work 2013 this figure was 90%. AND OCCUPATIONAL SAFETY focuses on occupational safety The training programme aimed A training event, the Patria Day, issues, convened at their annu- at supervisors was renewed, and which is already a tradition, was al meeting. The themes of the today this programme, now un- arranged for the Patria staff in meeting were occupational health der the name of STEP, offers a Finland. Key themes at the event services and their costs, accidents GOOD EMPLOYER \ PATRIA ANNUAL REVIEW 2014 \ 21

dents was fairly good. The figure for OBJECTIVES TO BE the year 2014 was not yet available ACHIEVED BY 2017 The training programme when Patria’s annual review was • Patria employees find their aimed at supervisors was published. work meaningful • The company offers its per- renewed. The programme ADJUSTMENT OF OPERATIONS sonnel an opportunity for offers a framework Cooperation negotiations were personal development conducted in the Aerostructures, • Integration of work and under which those in a Aviation, Land and Systems Busi- other sectors of life is managerial position can ness Units. In the course of these easier than before negotiations, the various options develop their supervisory for solving the difficult economic FOCUS AREAS IN 2015 and management skills. and production-related problems • Renewal of the principles were charted in group work with and methods guiding lead- the personnel. Employment coach- ership in expertise ing sessions were arranged for • Surveying personnel satis- people made redundant, in order faction – Patria Pulssi 2015 to aid them in finding new jobs and • Bringing the role of the coping with the situation. Follow- expert to the forefront ing the cooperation negotiations, a • Development of the total of 127 Patria employees were employer image at work and problems attributable made redundant, the number of to people’s inappropriate treatment laid off people being 36. In addition at the workplace. A new process on 20 employees were made redun- how to resolve conflict situations is dant in the Aviaton Business Unit’s FURTHER INFORMATION on the drawing board at Patria. Swedish unit. Personnel statistics, p. 5 Absenteeism attributable to sick- Personnel turnover was 2.4%, www.patria.fi/EN/ > Corporate ness has risen, and is now at 4.2 % the figure being 2.9 in 2013. The responsibility > Good employer (as opposed to 3.9% in 2013). This target level is 3%, which enables • Competence development figure is somewhat higher than the an optimal level of renewal in the and training Confederation of Finnish Industries organisation. The higher figure is • Compensation and remuneration average. This rise is assumed to considered to be a consequence of • Co-operation and employee influence reflect the challenging economi- adjustments of operation and reor- cal situation and the cooperation ganisations taken place in 2014. negotiations conducted within the company. EMPLOYER IMAGE With regard to accidents, the The employer image that Patria pre- situation was fairly satisfactory, the sents outside the company is meas- frequency of accidents being 17, ured through regular participation compared with 13 the year before. in employer image surveys conduct- The figure is calculated according ed by Universum. Patria’s employer to the instructions of the Federa- image has developed along desired tion of Accident Insurance Institu- lines. Among technology students, tions (FAII). The figure is based on Patria’s ranking in terms of employ- accidents at work that have brought er image rose from No. 31 to No. 23. costs. The figure does not include Correspondingly, among the tech- occupational diseases nor work trip nology professionals, Patria’s image related accidents. According to the rose from position 52 to 26. statistics of FAII, the frequency of An internal employer image accidents of companies manufac- survey will be conducted in 2015, to turing motor vehicles and trailers be followed by regular repetitions. was 54 in the year 2013. Compared The previous survey was conducted to this Patria’s frequency of acci- in 2008. GOOD PARTNER \ PATRIA ANNUAL REVIEW 2014 \ 22

Successful collaboration

Collaboration with customers, subcontractors, suppliers, and other stakeholders is close and planned for the long term. For Patria, a gratifying partnership is defined in terms of professional, reliable, open and transparent collaboration, which all parties involved can embrace. Patria provides, requires, and develops cost-effective operations together with its stakeholders.

he collaboration focus areas but also at garrison repair shops and included developing the Navy maintenance centres. TGroup’s internal operations In response to the defence to improve its competitiveness and reform and the Finnish Air Force effectiveness; developing the man- cost-saving programme, Patria has agement of the procurement chain; reorganised its activities, moving arranging regular meetings with some of its maintenance functions non-governmental organisations to the Tikkakoski and Pirkkala units, with interests in the defence sector; close to the customer. and contributing towards more open BAE Systems and Patria signed corporate communications and a an agreement on cooperation better dialogue with the stakehold- regarding the tendering process ers. In many respects, our activities for the LAND 400 programme, a developed and improved in line with project targeted on finding a combat our objectives. reconnaissance vehicle for the Aus- tralian Land Forces. Patria and Denel COST-EFFECTIVE OPERATIONS Systems, for their part, continued a Development of internal operations joint project focused on the deliv- within the scope of the ALERT ery of AMV vehicles to the South programme will continue in order African Defence Force. Similarly, the to enhance competitiveness and long partnership with Patria’s Polish Millog and the Finnish efficiency. For the strategy period partner was extended, with Roso- Defence Forces signed a 2014–2015, a cumulative effect mak S.A. manufacturing the vehicles on earnings amounting to EUR 50 for a new follow-up order under a partnership contract, million was set. During 2014, efforts licence from Patria. thereby expanding and to harmonise operations were As in previous years, customer continued, as was the development satisfaction was measured on vari- deepening their existing of business operations and the re- ous organisational levels. Construc- strategic partnership. finement of the processes of Group tive, mostly positive feedback was Services and common key figures. also received from the customers in The impacts of the ALERT pro- the follow-up meetings for various gramme are assessed by the Board projects. of Management on a regular basis. EFFICIENT PROCUREMENT CHAIN A RELIABLE PARTNER Development of procurement The most significant partnership chain management will continue. agreement of the year was the one The implementation of a new signed by Millog and the Finnish management model for indirect Defence Forces (FDF) on the expan- procurement continued. A sion and deepening of the existing process for the evaluation of the strategic partnership between the vendors’/subcontractors’ economic two parties. Millog is now respon- situation and ethical practices was sible for the maintenance of Army introduced, as well as a system for material not only at the depot level the conduct of background surveys, GOOD PARTNER \ PATRIA ANNUAL REVIEW 2014 \ 23

to enable improved partner and supplier chain management. The OBJECTIVES TO BE number of suppliers was reduced in Patria began chairmanship ACHIEVED BY 2017 order to achieve a better overview • Our operations are cost- of the supplier chains. of ELDIG, the European Land effective and competitive Defence Industry Group. • Our production capacity has INFLUENCING THE DEFENCE been adapted to reflect the MATERIEL INDUSTRY changes taking place with The President and CEO of Patria our principal customer, continued in his role as Chairman SPONSORSHIP AND DONATIONS the FDF of the Finnish Defence and Avia- In 2014, Patria began cooperation • Our cooperation has tion Industry Association (AFDA). with the Finnish Aviation Museum become increasingly Patria employees also participate Society and the Aviation Museum transparent in the work conducted in its various of Central Finland with the target • We are familiar with the subcommittees. The company plays of restoring the VL Myrsky (‘Storm’) expectations of our part- a significant role in AFDA in order to fighter aircraft to its original appear- ners, responding to them communicate, among other things, ance. Patria is the main sponsor of in an appropriate manner the importance of ethical practices the project. Young people studying to all the member companies. at a number of technical education FOCUS AREAS IN 2015 Through AFDA, Patria takes an institutions are involved in the • Our Corporate Responsibil- active part in NORDEFCO, which im- restoration project, as well as youth ity Essentiality Chart will proves Nordic defence cooperation. workshops from locations such be updated, with the new In 2014, AFDA chaired the collab- as Jyväskylä and Vantaa, whose targets being set to meet oration between Nordic defence participation is central to the project the expectations of the industry associations. in its objective of preventing youth various stakeholders Patria began chairmanship of ELD- marginalisation. • The rules applied to our IG, the European Land Defence Indus- In 2014, the company continued lobbying strategy towards try Group. This organisation operates its cooperation with the Finnish stakeholders will be under the auspices of the Aerospace Military Sport Federation. This combined into a single and Defence Industries Association cooperation seeks to provide con- set of guidelines of Europe (ASD) and serves as a tinuity for the concept of conscript • Openness and transparen- forum for the land systems industry, exercise clubs after the end of the cy will become an increas- promoting standardised procedures three-year Get Moving project at the ingly important element across the sector. The industry within training units. This will promote the in the development of our its sphere provides employment to sports-oriented lifestyle, even after operations and interaction approximately 100,000 people. The their conscription. ELDIG chairmanship circulates every Since 2011, the company has second year. supported the Finnish national team in biathlon, continuing this activi- FURTHER INFORMATION CONTACTS WITH NGOS ty during the season 2013–2014. Stakeholder-specific capital flows, p. 5 During 2014, Patria met repre- Patria’s CEO is the Deputy Chairman www.patria.fi/EN/ >Corporate sentatives for non-governmental of the Biathlon Association and responsibility>Good partner organisations at various events. The has excluded himself from any • Stakeholders-specific capital flows company also arranged a morning decision-making concerning the • Patria’s certificates event for the representatives of the sponsorship. organisations, opening up commu- Patria supports the United nication channels for future discus- Nations Global Compact operations sions. Such meeting will be made through voluntary donations. a recurrent event. The company Patria supported Save the Chil- also participated in a survey called dren Finland, a national organisation Defence Companies Anti-Corruption fighting for children’s rights, by do- Index, conducted by Transparency nating funds for Christmas presents. International and directed at compa- The charity is annually chosen by nies operating in the defence sector. the Patria Consultative Committee. ENVIRONMENT \ PATRIA ANNUAL REVIEW 2014 \ 24

Responsibility for the environment

Patria is familiar with the environmental impacts of its operations, products and services, taking active measures to reduce such effects. The company abides fully by the provisions of environmental legislation and ensures that all the permits required by the authorities are secured. Patria’s most significant production facilities feature certified environmental systems.

atria’s Business Units are ried, upon which all chemicals no responsible for implementing longer serving any useful purpose P the Group’s environmental were sent for treatment. The geo- policy in their operations. The com- technical survey found no soils to be pany’s most significant production classified as contaminated. facilities have in place environmen- Patria expanded its operations at tal standards that are in compliance the Tikkakoski site, and started new with the ISO 14001 standard. Op- activities in Pirkkala, in response to erations are developed in line with the defence reform. The environ- environmental targets and within mental aspects and risks related the framework of environmental to the reform were assessed in the programmes, individually set for same connection. each Business Unit. A new environ- mental permit was obtained for the PROPERTY ENERGY EFFICIENCY Halli site, in addition to which Patria Caverion Suomi Oy is responsible, on submitted, in late 2014, an applica- behalf of Patria, for maintaining tion for a revision of the conditions and improving the energy- of the permit for the company’s efficiency of approximately 175,000 Linnavuori site. square metres of property. In 2013 A survey related to the practices and 2014, investments aimed at currently applied to the manage- energy savings were carried out ment practices of environmental in Halli, Hämeenlinna, Tikkakoski, A survey related to the issues was conducted. The survey Linnavuori, and Utti. In addition a practices currently applied assessed the management of remarkable amount of adjustments environmental issues in relation to to property automation including re- to the management legislation and the expectations visions of air-conditioning operation practices of environmental and requirements set forth by the times, additions to sensor-based key stakeholders, taking account of control systems, and upgrades of AC issues was conducted. foreseeable changes. machines to include heat recovery, have been made. The actions so ENVIRONMENTAL ASPECTS IN THE far have brought 4,5 GWh of yearly FACE OF OPERATIONAL CHANGE electricity and heat energy saving. Patria sold its Sastamala ammuni- tion production facility to Nammo CARBON DIOXIDE EMISSIONS Lapua Oy. The environmental permit Due to the video conferencing covering ammunition production systems that were put in place, was transferred to Nammo as part travel between the Group’s various of the transaction. Prior to the units was reduced. Carbon dioxide transfer, a geotechnical survey was emissions caused by travel were conducted on the site grounds, and reduced by approximately 19,000 kg the chemical storage was invento- from 2013. ENVIRONMENT \ PATRIA ANNUAL REVIEW 2014 \ 25

OBJECTIVES TO BE Common rules and ACHIEVED BY 2017 compensations related • Improved property energy efficiency to the use of the water • Better gathering and areas of Vattaja firing utilisation of and reporting on environmental indicator range were agreed on. values • Group’s environmental systems meet the require- ments of the ISO 14001 WASTE standard by the end of the At the Halli and Linnavuori sites, transition period the target was set for reducing the proportion of landfill waste in the FOCUS AREAS IN 2015 total amount of waste, prompting • Identification of the effects training sessions to be arranged for brought forth by the re- the personnel, among other similar drafting of the ISO 14001 measures. environmental standard, including the implementa- CHEMICALS tion of the required chang- Patria complies with the REACH es in the procedures of the regulation related to chemicals. operational system and its For example, a needs assessment guidelines and a procurement process for a • Implementation of the pro- replacement for trichloroethylene visions of the new environ- are under way. mental permits at Patria’s Halli and Linnavuori sites WATER AREA USAGE • Inclusion of the fourteen Patria agreed with the Lohtaja and new sites, transferred Karhi partition units on the rules to under the responsibility of be applied to the use of the water Millog on 1 January 2015, in areas off the shore of the Vattaja the environmental system shooting range, including compen- sations to be paid for the use of these areas. This five year agree- ment is based on rules which will FURTHER INFORMATION guarantee both the development www.patria.fi/EN/ >Corporate work on Patria’s weapons systems responsibility >Environmental and ensure the opportunities of responsibility the local people to use these water • Environmental statistics areas for recreation and fishing. • Patria AMV eco balance

MONITORING THE CONDITION OF THE ENVIRONMENT To monitor environmental condi- tions, Patria’s various sites analyse, on a regular basis, subsoil, surface and/or storm water samples, as well as samples obtained from sewage water, and conduct noise measure- ments. The results thus obtained are reported to the environmental au- thorities. In 2014, monitoring found no deviations from the limit values. RISK MANAGEMENT AND INTERNAL CONTROL \ PATRIA ANNUAL REVIEW 2014 \ 26

Risk management and internal control

In Patria risk management and internal control are defined as the coordinated activities to direct and control the organization with regard to risks. The objective is to provide reasonable assurance regarding the achievement of the Patria’s strategic, operations, reporting and compliance objectives.

isk management and internal New significant risks are reported to control are an important part of Group management without delay, RPatria’s management system and immediately after they have been control system. Risk management and identified. The most significant risks internal control also help to ensure that faced by the Group, together with operational and profitability targets the related risk treatment activities, can be achieved and loss of resources are reported to the Board of Direc- prevented. Furthermore, risk man- tors and the Audit Committee. agement and internal control help to Due to the nature of Patria’s ensure appropriate reporting, compli- business, individual sales and delivery ance with laws and regulations, as well projects can be very large in relation as avoid damage to Patria’s reputation. to the Group’s annual turnover. They Patria has a Risk management may include product development, and internal control policy, approved require extensive subcontracting and by the Board of Directors, which other co-operation with third parties, specifies the related tasks, objec- and result in deliveries that take place tives, components, responsibilities over several years. Moreover, the and authorities. The primary respon- contents of deliveries and the forms sibility for risk management and of industrial co-operation implement- internal control lies with the business ed together with partners can be units and Group services in their Internal control activities are complex in nature. The risks involved area of responsibility. Patria’s Group in such projects are typically versatile services provide guidelines for risk part of everyday work and and significant, requiring thorough management and internal control, they are implemented in assessment and management. and perform monitoring on different The risks related to Patria’s major levels. The Internal Audit Function the operational processes. projects are assessed with regulari- and the Auditors, security and quality ty by the Risk and Revenue Recogni- auditors, as well as customers, mon- development, and implementation tion Board and the Board of Man- itor and evaluate the effectiveness of risk management processes. agement, and thereafter reported of risk management and internal Risks are classified into strategic, to the Board of Directors. control. The Board provides the ulti- operations and financial risks, caused The policies and guidelines ac- mate oversight and direction for risk either by external conditions and cepted by the Board, the completing management and internal control. events or activities within the Group. guidance given by the Group or busi- The Audit Committee of the Board Risk identification and assessment, ness units as well as the organiza- monitors the effectiveness of risk as well as the planning and moni- tion structure of the Group and the management and internal control. toring of risk treatment activities, defined authorities, responsibilities The CEO is responsible for the are part of Patria’s annual business and job descriptions provide the ba- proper functioning and monitoring operations planning and an integral sis for internal control. Internal con- of the Group’s risk management and part of the daily operations of the trol activities are part of everyday internal control. Patria also has a risk business units and Group services. work and they are implemented in management steering group that Twice a year, Patria’s business the operational processes. Internal supports the Group and business units and Group services report their control activities are carried out at all unit management in the planning, major risks to Group management. levels and functions of the Group. CORPORATE GOVERNANCE \ PATRIA ANNUAL REVIEW 2014 \ 27

Corporate governance

APPLICABLE STATUTES, GUIDE- General Meeting of Shareholders. LINES AND RECOMMENDATIONS The Articles of Association further Administration and governance of state that the Board of Directors Patria is subject to the provisions shall consult the Consultative of the Finnish Companies Act and Committee on matters that concern other legislation relevant to its op- major decrease or increase of opera- erations. In addition, Patria follows tional activities, material changes in other guidelines and recommen- the company’s organization, and on dations concerning good corporate issues which are otherwise of mate- governance applicable to companies rial importance to the industry that in which the Finnish state is the the company is engaged in, either in majority shareholder. Finland or internationally. The Consultative Committee GROUP ORGANISATION consists of a chairman, a vice-chair- AND ADMINISTRATIVE SYSTEM man, and a maximum of ten other Patria is operationally divided into members. During the current business units. Patria Group consists financial period, the committee had of the parent company, Patria Oyj, 11 members. As a general rule, the and its wholly owned subsidiaries. Consultative Committee convened In addition to its statutory In addition to the wholly owned four times a year. In 2014, the Con- duties,the Board’s principal subsidiaries, Patria owns 61.8% of sultative Committee convened three Millog Oy and 50% of Nammo AS, a times. The average attendance of duty is to make decisions on Norwegian company. The statutory the members of the Consultative the Group’s strategic focus, bodies of Patria Oyj – the General Committee was 91%. Meeting of Shareholders, the Board to monitor and steer the of Directors, and the President and COMPOSITION OF Group’s business operations. CEO – are responsible for the compa- THE BOARD OF DIRECTORS ny’s administration and operations. AND THE ELECTION PROCEDURE The Group’s operating activities As per the Articles of Association, are managed by the President amended in December 2014, the and CEO, assisted by the Board Board of Directors of Patria Oyj of Management. Each business consists of a minimum of three and of the first Annual General Meeting unit and the group services has a a maximum of eight members. In held subsequent to their election. management group of its own. The the financial period under review, The Board of Directors meets at statutory boards of wholly owned the Board had six members until 11 least eight times a year. The Board Group companies other than the December 2014 when two members convened fifteen times in 2014. parent company are only responsible of the Board resigned as a result of The average attendance of Board for the statutory minimum duties Airbus Group NV selling its share of members was 98%. specified in the relevant legislation. Patria Oyj. The two resigned mem- The Consultative Committee of bers were not replaced with new PRINCIPAL DUTIES OF Patria Oyj is an advisory body serving members. THE BOARD OF DIRECTORS the Board of Directors and as such The General Meeting of Share- AND DISTRIBUTION OF DUTIES does not have statutory duties. holders elects the chairman, the The Board of Directors is responsible vice-chairman, and other Board for the governance of Patria and the CONSULTATIVE COMMITTEE members, and decides on their re- appropriate organization of Patria’s According to the Articles of Associa- muneration. The Board members are operations in accordance with appli- tion, Patria Oyj must have a Consul- elected for one year at a time, their cable legislation, the Articles of Asso- tative Committee appointed by the terms of office ending at the close ciation and any instructions issued by CORPORATE GOVERNANCE \ PATRIA ANNUAL REVIEW 2014 \ 28

the General Meeting of Shareholders. ny’s and the Patria Group’s business accounting complies with legislation In addition to its statutory duties, activities and administration, in and that the funds management is the Board’s principal duty is to make accordance with the provisions of reliably organized. Patria’s manage- decisions on the Group’s strategic fo- the Companies Act and any instruc- ment is responsible for ensuring cus, to monitor and steer the Group’s tions and guidelines issued by the that the Group’s day-to-day opera- business operations, to ensure Board of Directors. The President tions comply with all applicable legal that the Group complies with legal and CEO is assisted in Group manage- requirements and Board decisions, provisions applicable to its operations ment by the Board of Management, and that the Group’s risk manage- and conducts business in a commer- which convenes monthly and which ment has been organized in an cially sustainable manner, providing consists of each Business Unit’s Di- appropriate manner. added value to its owner. The Board rectors, Chief Administrative Officer, also makes decisions on the Group’s General Counsel & Chief Compliance key operating principles, approves Officer, and Director of Strategy. In annually the Group’s financial targets addition, the Group management The Audit Committee is and operational objectives, as well as meets in other combinations as and its financial statement and any inter- when necessary for management responsible for monitoring im reports, and decides on material purposes. of ethics and compliance investments of the Group. Patria also has an Administrative The Board confirms the ethical Management Group chaired by the related activities. values and operational principles of Chief Administration Officer. The the Group and monitors compliance purpose of the Administrative Man- with these values and principles. agement Group is to develop and ra- The Board also approves the general tionalize Patria’s administration and The Group’s division into business setup of the Group’s organizational to ensure the quality and efficiency units increases efficiency and focus of and operational structure. The Board of administrative services required management thereof and facilitates of Directors has set up a Nomination by Patria’s business operations. The organization of efficient monitoring and Compensation Committee as Administrative Management Group and control thereof. An operational well as an Audit Committee. The members are heads of Patria’s HR, reporting system has been set up for Nomination and Compensation Com- Finance, ICT, Procurement, Legal and the Group’s financial monitoring and mittee consists of three members. It Compliance, and Risk Management control. It produces versatile informa- prepares the Group’s and the man- as well as Communications function. tion on the Group’s financial standing agement’s payroll structures as well In Patria corporate responsibil- and development on a monthly basis. as any bonus and incentive systems. ity related activities and reporting The Group also has clearly defined It also approves key appointments are steered by Patria’s Corporate decision-making authorizations relat- and nominations. The Audit Commit- Responsibility Steering Group. The ed to investments. tee also consists of three members. Steering Group is chaired by Patria’s Patria has an independent, Its responsibility is to monitor e.g. General Counsel and Chief Compli- external Internal Audit function, implementation of the Group’s ance Officer. Patria’s Ethics Officer which evaluates and contributes to internal controls, risk management, participates in the steering group’s ensuring the efficiency and feasibil- financial reporting and it is responsi- meetings and supports the work ity of risk management and internal ble for supervising the Group’s com- of the Steering Group. The General controls, the reliability of financial pliance and ethics related (including Counsel and Chief Compliance Officer reporting and the compliance of the specifically anti-corruption related) reports to the Audit Committee. operations, and which reports to the program and activities. No other Audit Committee. The Internal Au- particular distribution of duties has COMPENSATION AND BENEFITS ditors comply with the International been agreed upon among Board Information regarding compensa- Standards for the Professional Prac- members. tion and benefits of the manage- tice of Internal Auditing. Internal As of 11.12.2014 the Nomina- ment is available in the attachment Audit reports on its activities and tion and Compensation Committee of the Financial Statement, see findings to the Audit Committee consisted of two members after chapter 4 (Personnel expenses). and Patria’s management. The Audit the board members appointed by Committee confirms the audit plans Airbus Group NV resigned from the MONITORING AND CONTROLS annually. The company’s auditors re- Board of Directors of Patria Oyj on In accordance with the Compa- port their observations at least once 11.12.2014 due to Airbus Group nies Act, the Board of Directors is a year to the relevant business units selling its share of Patria Oyj. responsible for ensuring that the and to the Group’s financial man- monitoring and controls of ac- agement, as well as to the Board of THE PRESIDENT AND CEO counts and funds management has Directors and the Audit Committee. AND THE GROUP MANAGEMENT been organized appropriately. The The auditors also submit a statutory Patria Oyj’s president and CEO is president and CEO is responsible auditors’ report to the company’s responsible for managing the compa- for ensuring that the company’s shareholders. GROUP MANAGEMENT \ PATRIA ANNUAL REVIEW 2014 \ 29 Group management

Patria Group’s president and CEO is assisted in Group management by the Board of Management, which convenes monthly. Operational transparency and responsible operations form part of the management system and provide the basis for the strategic planning of operations from the outset.

Heikki Allonen, b. 1954 President and CEO Master of Science (Eng.) Employed by Patria since 2008

Jukka Holkeri, b. 1962 Ville Jaakonsalo, b. 1971 Hanna Kyrki, b. 1962 Chief Strategy Officer, Chief Administration Officer General Counsel, Deputy to the President (CAO) Chief Compliance Officer and CEO LL.M./MBA Master of Laws, EMBA Master of Science (Eng.) Employed by Patria since 2010 Employed by Patria as of Employed by Patria since 1988 1 August 2014

Mika Kari, b. 1969 Lassi Matikainen, b. 1961 Pasi Niinikoski, b. 1961 President, Land President, Aviation President, Systems Master of Science (Eng.) Master of Science (Eng.) Doctor of Science (Techn.) Employed by Patria since 2013 Employed by Patria since 2008 Employed by Patria since 2006 BOARD OF DIRECTORS \ PATRIA ANNUAL REVIEW 2014 \ 30

Board of Directors

The Board of Directors is responsible for the management of Patria Group and the appropriate organisation of its operations, in accordance with legislation, the Articles of Association and any instructions issued by the General Meeting of Shareholders. The Board’s principal duty is to make decisions on the Group’s strategic policy, as well as to guide and monitor the Group’s business operations. During the 2014 accounting period, the Board met fifteen times. In the Board of Directors the Audit Committee is responsible for ethics and compliance issues.

Christer Granskog Kirsi Komi Maximilian Thomasius Chairman Vice Chairman Head of Participation Management Master of Science (Eng.) Master of Laws Airbus Defence and Space Board member since 2010 Board member since 2011 Board Member since 2013 Chairman of the Audit Committee

Arto Honkaniemi Kari Rimpi Jussi Itävuori Master of Laws, Master of Science Lieutenant General (Ret.) Senior Partner (Econ. & Bus. Adm.) Board member since 2012 RJI Partners Limited Board member since 2009 Board Member since 2003

Maximilian Thomasius and Jussi Itävuori resigned from the Board of Directors on 11th of December 2014 after Airbus Group NV sold its share of Patria Oyj. CONSULTATIVE COMMITTEE \ PATRIA ANNUAL REVIEW 2014 \ 31

Consultative Committee

Patria Oyj has a Consultative Committee appointed by the General Meeting of Shareholders. The Articles of Association further state that the Board of Directors shall consult the Consultative Committee on matters that concern major decrease or increase of operational activities, material changes in the company’s organization, and on issues which are otherwise of material importance to the industry that the company is engaged in, either in Finland or internationally. The Consultative Committee consists of a chairman, a vice-chairman, and a maximum of ten other members. During the current financial period, the committee had 11 members. In 2014, the Consultative Committee convened three times.

Consultative Committee

Raimo Vistbacka Juha Kuusi Tuula Peltonen Chairman System Specialist, Patria Member of Parliament Master of Laws Member since 2011 Member since 2012 Member since 2012 Seppo Kääriäinen Petri Pitkänen Thomas Blomqvist Member of Parliament Workshop Manager, Patria Vice Chairman Member since 2012 Member since 2013 Member of Parliament Member since 2012 Petri Peltonen Juha Rannikko Director General, Department of Vice Admiral, Chief of Defence Jussi Karimäki Enterprise and Innovation, Command Finland Equipment Assembler, Patria Ministry of Employment Member since 2011 Member since 2009 and Economy Member since 2012 Kari Tolvanen Ilkka Kokko Member of Parliament System Engineer, Patria Member since 2012 Member since 2014 GRI-TABLE \ PATRIA ANNUAL REVIEW 2014 \ 32

GRI Content Index

REPORTING AND CALCULATION figures. The data for the report PRINCIPLES was gathered from Patria Group’s This is Patria’s fourth Corporate internal data systems. Financial Responsibility Report. This report figures were aggregated using the covers the progress during the pe- Hyperion system, after first ac- riod from 1 January to 31 December quiring each business unit’s figures 2014. The report covers all subsid- from their own ERP systems. Per- iaries of which Patria owns more sonnel figures were obtained from than 50%. These are described in the Group’s ARC HR information the Annual Report. Nammo (50% system. Accident statistics came ownership) publishes its own re- from insurance company Pohjola’s ports. The financial statement fig- data system. Environmental figures ures and the total number of em- were acquired from location- ployees include 50% of Nammo’s specific environmental reports.

Section of the GRI guidelines Notes/comments Standard disclosures 1. Strategy and analysis 1.1 CEO Statement Reported 6–7 Description of key impacts, risks, 1.2 Reported 17 and opportunities 2. Organisational profile 2.1–2.10 Basic information on Patria Reported 3–5 3. Report parameters 3.1–3.4 Report profile Reported 2, 32 http://patria.fi/en/corporate-responsibility/ 3.5–3.11 Report scope and boundary Reported 5 management-and-organisation/essentiatility-chart 3.12 GRI content index Reported Quality and accuracy of the data presented in the 3.13 Approach to external assurance Reported report is monitored and ensured internally. External assurance is not included. 4. Governance, commitments and engagement Governance http://patria.fi/en/corporate-responsibility/mana- 4.1–4.10 Governance Reported 18, 27–31 gement-and-organisation/christer-granskog-chair- man-board The Audit Committee nominated by the Board has a res- ponsibility to monitor compliance with ethical principles. Commitments to external initiatives 4.11 Precautionary principles Reported 18, 26 External principles or initiatives 4.12 Reported 18 Patria endorses 4.13 Membership in associations and Reported 18–19, 22–23 http://patria.fi/en/corporate-responsibility/ethi- organisations cal-conduct/corporate-responsibility-networks Engagement 4.14–4.17 Stakeholder engagement Reported 22–23 GRI-TABLE \ PATRIA ANNUAL REVIEW 2014 \ 33

Section of the GRI guidelines Notes/comments Management approach and performance indicators Economic responsibility Disclosure on management Reported 18, 27–28 approach Economic performance Direct economic value generated EC1 Reported 5 and distributed Coverage of defined benefit plan Note to the Consolidated Financial Statements EC3 Reported obligations 4. Personnel expenses Environmental responsibility Disclosure on management Reported 24–25 approach Materials http://patria.fi/en/corporate-responsibility/ EN1 Materials used Reported environmental-responsibility/materials Energy http://patria.fi/en/corporate-responsibility/ EN4 Indirect energy consumption Reported environmental-responsibility/eco-balance Initiative to reduce indirect energy EN7 Reported 24 consumption Emissions, effluents and waste Initiatives to reduce greenhouse gas EN18 Reported 24 emissions http://patria.fi/en/corporate-responsibility/ EN20 Other significant air emissions Reported environmental-responsibility/eco-balance http://patria.fi/en/corporate-responsibility/ EN21 Total water discharge Reported environmental-responsibility/eco-balance http://patria.fi/en/corporate-responsibility/ EN22 Waste Reported environmental-responsibility/eco-balance Compliance Sanctions for non-compliance with EN28 Reported 24 environmental laws and regulations Social responsibility Disclosure on management Reported 18–21 approach Labor practices and decent work Employment Personnel by employment type, LA1 Reported 5 contract and gender LA2 Employee turnover Reported 21 Labor/management relations Percentage of employees covered by All employees except the top management and certain LA4 Reported collective bargaining agreements expert positions Occupational health and safety LA7 Injuries and absenteeism Reported 5, 20–21 Training LA11 Programmes for skills management Reported 20–21 and life-long learning LA12 Performance reviews Reported 20 Diversity and equal opportunities LA13 Composition of governance bodies Reported 5, 30–31 and breakdown of employees Human rights Investment and procurement practices HR3 Human rights training given to Reported 18–19 Training in Ethical Code of Conduct employees GRI-TABLE \ PATRIA ANNUAL REVIEW 2014 \ 34

Society Corruption SO2 Corruption risk assessment Reported 18–19 http://patria.fi/en/corporate-responsibility/ ethical-conduct/active-anti-corruption SO3 Training in anti-corruption policies Reported 18–19 Training in Ethical Code of Conduct SO4 Actions taken in response to Reported 18–19 incidents of corruption Public policy SO5 Participation in public policy and Reported 22–23 lobbying SO6 Contribution to political parties Reported According to the Ethical Code of Conduct Patria does not give gifts or make donations to political parties nor does it participate in party-political activities Compliance SO8 Sanctions for non-compliance with Reported 19 laws and regulations Product responsibility Product and service labelling PR5 Customer satisfaction Reported 22 Contact Information Patria Oyj Kaivokatu 10 A, FI-00100 Helsinki, Finland [email protected]

PATRIA’S ANNUAL REVIEW 2014

Editor in Chief Editing and layout Birgitta Selonen, [email protected] Miltton Oy

Patria’s Communications Team Photos Vice President, Corporate Communications Birgitta Selonen Patria, Pentti Hokkanen, The Finnish Air Force, Information Officer Juha Jäppinen Nammo, Wille Nyyssönen Web Communications Manager Ilona Kauppinen Communications Manager Raili Saarinen Feedback, request for information and subscriptions Marketing Manager Päivi Sipiläinen [email protected]