ANNUAL REVIEW 2024

Table of Contents

President and CEO's review ...................................................... 3

Corporate governance statement 2024 ............................. 7

Remuneration report for governing bodies 2024 ......... 19

The board of directors’ review 2024 ................................... 28

Sustainability statement 2024 ................................................ 47

Consolidated financial statements .................................... 101

Consolidated statement of profit or loss ...................... 102

Consolidated statement of

Comprehensive income ......................................................... 103

Consolidated statement of financial position ........... 104

Consolidated statement of changes in equity ......... 105

Consolidated statement of cash flows .......................... 107

Supplemental information for statement

of cash flows ................................................................................... 108

General accounting policies ................................................. 109

Parent company financial statements ........................... 183

Income statement of the parent

Company (FAS) ............................................................................ 183

Balance sheet of the parent company (FAS) ............ 184

Parent company cash flow statement (FAS) ............ 185

Notes to parent company financial

statements (FAS) ......................................................................... 186

Auditor’s report ............................................................................. 196

Assurance Report on the Sustainability Report (translation) .................................................................................... 20 0

The year 2024 demonstrated that with focus and dedication, Glaston can progress steadily in its strat- egy execution even if the markets aren’t favorable. Our customers and partners around the world value the technology and process know-how that Glaston offers. Complemented by our service capabilities, it builds a solid foundation for Glaston’s growth opportunities that arise from new product innovations, services and upgrade products.

Throughout 2024, the market environment was challenging. The Architectural market remained soft, and EMEA was particularly affected by the weaker market environment.The Americas was more stable. The Mobil- ity market developed well, mainly in China, supported by the transition to electric vehicles. In addition to oper- ational efficiencies, we can see that concentrating all Mobility pre-pro- cessing production to China has ben-

Consistent profitability development through strategy implementation

President & CEO’s Review

efitted us as the region contributed to order intake with a 22% share.

Overall, Glaston’s full-year 2024 order intake was down 8% reflect- ing the lower construction activity in several regions, which also affected net sales development. For the full- year, net sales at EUR 217.9 million was recorded. Insulating Glass and Mobility Technologies showed positive growth figures.

Despite the cautious markets, the stable progress in comparable EBITA continued as we started to benefit from the implemented and ongoing structural cost-saving actions taken in 2024. Full-year comparable EBITA improved and was EUR 15.3 million (7.0% margin).

Taking the next steps in strategy execution

In February, the timeframe for achiev- ing the strategic targets was adjusted from 2025 to the medium-term (3−5

years) except for the emissions reduction targets with a timeframe up to 2032. Net sales and comparable return on capital employed (ROCE) targets were slightly adjusted. The other targets remained the same.

Our group-wide safety target is zero accidents. In 2024, our perfor- mance improved slightly and our accident frequency rate LTIFR was 5.7 (6.3) as the number of accidents decreased by one to nine. The direc- tion is right, but the numbers show that we need to continue our system- atic safety work.

Customer satisfaction measured by Net Promoter Score (NPS) continued at a high level and was 64 (62). We will continue innovating together with our customers, and focus on further developing the industry-leading customer experience. Our employee engagement improved to 76 from 70 and the target, 75 out of 100, was achieved. To enhance our progress

in being a good employer, a new DEI roadmap (Diversity, Equity, Inclusion) was drawn up. The DEI roadmap aims to create a diverse, equal and inclusive work environment for all employ- ees regardless of their background or minority. One of the goals of the roadmap is to increase the proportion of women among the personnel and the company's senior management.

Glaston Annual Review 2024 3

With the organizational changes done in the final quarter of the year, we aim to strengthen the customer experience, especially in services, enhance collaboration between factories, and boost technology development with an extended focus on continued positive profitability development and reaching additional operational efficiencies in the coming years.

Dedication to sustainability and technology leadership

Glaston is committed to keeping its technology leadership position and plans to continue investments in product development and service capabilities. In 2024, we introduced to the market many innovations that enhance our customers’ capabilities to improve their production efficiency, increase energy efficiency and the level of automation.

Our ambition is to remain at the forefront of moving the industry towards a more sustainable future, and we focus on developing and delivering sustainable, upgradea- ble, and energy-efficient products. We continue to believe that global megatrends e.g. fight against climate change support our business in the long term.

We want to systematically progress on our sustainability journey. As one of the first glass processing technology companies, Glaston’s greenhouse gas emissions reduction targets were validated by the international Science Based Targets initiative (SBTi). We have also been assessed by EcoVadis. In 2024, our results improved in all

areas and Glaston is ranked among the top 17% of companies assessed globally.

2024 was another busy year for the company and I want to thank the Glaston team for their contribution throughout the year. The high level of competence of our people in their fields of expertise is important for

keeping Glaston competitive.

I also want to thank our customers, shareholders and other stakeholders for your continuous trust and support.

Toni Laaksonen, President and CEO

Glaston’s strategic targets and execution

Glaston Annual Review 2024 4

Net sales per region, %

Received orders by product area, € million

Order book, € million

Comparable EBITA, € million

Employees per region 31.12.2024, %, (fte)

Glaston Annual Review 2024 5

GOVERNANCE

Corporate Governance Statement 2024 ................................ 7

Remuneration Report for Governing Bodies 2024 .......... 19

Glaston Annual Review 2024 6

Corporate Governance Statement 2024

Glaston Corporation’s administration and management are based on the Company’s Articles of Association, the Finnish Companies Act and Securities Markets Act, and the rules and guide- lines of Nasdaq Helsinki Ltd. In addi- tion, Glaston complies with the Finnish Corporate Governance Code 2025 (also the “Corporate Governance Code”), which is publicly available at: www.cgfinland.fi.

This statement has been approved by the Company’s Board of Directors (also the “Board”). The Corporate Governance Statement is issued as a separate report and is published together with the financial state- ments, the Report of the Board of Directors and the Remuneration Report on the Company’s website at https://glaston.net/governance/. The information is also included in the Annual Review 2024.

Duties and Responsibilities of Governing Bodies

The General Meeting of Sharehold- ers, the Board of Directors and the President & CEO, whose duties are determined mainly in accordance with the Finnish Companies Act, are responsible for the management of Glaston Group. The General Meeting of Shareholders elects the Board of Directors and the Auditors. The Board of Directors appoints the President & CEO, who is responsible for the Com- pany’s daily operational management. The President & CEO is supported by the Executive Leadership Team.

Board of Directors

The Board of Directors is responsible for the appropriate arrangement of the Company's administration and operations. The Board of Directors consists of a minimum of five and a maximum of nine members elected by a General Meeting of Shareholders. The term of office of Members of the Board of Directors expires at the end of the next Annual General Meeting that follows their election.

Under Recommendation 10 of

the Corporate Governance Code, a majority of Members of the Board of Directors shall be independent of the Company, and at least two Members who are independent of the Com- pany shall also be independent of the Company’s significant shareholders. The shareholders’ Nomination Board prepares proposals on the nomination and remuneration of Members of the Board of Directors to be dealt with by a General Meeting of Shareholders. In the selection of members, atten- tion shall be paid to the diversity of the Board of Directors, which means, among other things, that the mem- bers’ experience and competence in the Company’s field of business and development stage are mutually complementary. In addition, educa- tion, age and gender shall be taken into account. Both genders must be represented on Glaston’s Board of Directors.

The notice to attend an Annual General Meeting shall include a pro- posal on the composition of the Board of Directors. The personal information of the candidates shall be published on Glaston’s website in connection

Governance model December 31, 2024

Business Functions

Business Functions

Business Functions

GENERAL MEETING OF SHAREHOLDERS

CEO

EXECUTIVE LEADERSHIP TEAM

Administration, Group functions

Shareholders

Shareholders' Nomination Board

Internal control

Risk Management

Financial Reporting

Auditor

Internal Audit

Glaston Annual Review 2024 7

with the notice to attend an Annual General Meeting.

The Board of Directors shall elect from among its members a Chair and a Deputy Chair to serve for one year at a time. The Board of Directors has a quorum if more than half of its mem- bers are present at the meeting.

The Board of Directors’ tasks and responsibilities are determined by the Company’s Articles of Association, the Finnish Companies Act and other legislation and regulations. It is the responsibility of the Board of Directors to further the interests of the Com- pany and all of its shareholders.

The main duties and operating principles of the Board of Directors are defined in the board charter approved by the Board. It is the Board’s duty to prepare the matters to be dealt with by a General Meeting and to ensure that the decisions made by a General Meeting are appropriately imple- mented. It is also the Board’s task to ensure the appropriate arrangement of the control of the Company’s accounts and finances. In addition, the Board directs and supervises the Company’s executive leadership, appoints and dismisses the President & CEO and decides on the President & CEO’s employment and other bene- fits. In addition, the Chair of the Board

approves the salary and other benefits of the Executive Leadership Team. The Board approves the Executive Leadership Team’s charter.

The Board of Directors also decides on far-reaching and fundamentally important issues affecting the Group. Such issues are the Group’s strategy, approving the Group’s action plans and monitoring their implementa- tion, monitoring the Group’s financial development, acquisitions and the Group’s operating structure, signif- icant capital expenditures, internal control systems and risk manage- ment, key organizational issues and incentive schemes.

The Board of Directors is also responsible for monitoring the reporting process of the financial statements, the financial and sus- tainability reporting processes and the efficiency of the Company's internal control, internal auditing, and risk management systems pertain- ing to the financial and sustainability reporting processes, monitoring the statutory audit of the financial state- ments and consolidated financial statements, monitoring the assurance of the sustainability report, evaluating the independence of the statutory auditor or audit firm, particularly with respect to the provision of services

unrelated to the audit, and preparing a proposal for resolution on the election of the auditor and assurance provider of the sustainability report. The Board of Directors also regularly evaluates its own actions and working practices.

Meetings of the Board of Directors are held as a rule in Helsinki. The Board of Directors also endeavors each year to visit the Group's other operating locations and hold meetings there. The Board of Directors may also, if necessary, hold video and telephone conferences. The Board of Direc- tors meets according to a timetable agreed in advance, generally approx- imately 10 times per year and addi- tionally, if necessary. The Company’s President & CEO and Chief Financial Officer generally attend the meetings of the Board. The Company’s Gen- eral Counsel acts as Secretary to the Board. If necessary, such as in con- nection with the handling of strategy or the annual plan, other Members of the Executive Leadership Team may also attend meetings of the Board. The Auditor attends all Audit Commit- tee meetings and at least one Board meeting per year.

Board of Directors in 2024

At the Annual General Meeting, held on April 9, 2024, the Members of the

Board of Directors Veli-Matti Reinik- kala, Sebastian Bondestam, Antti Kau- nonen, Sarlotta Narjus, Arja Talma, Tero Telaranta and Michael Willome were re-elected as members of the Board of Directors. The Board of Directors was elected for a term of office end- ing at the closing of the next Annual General Meeting. Of the members, 29% are women and 71% are men.

In 2024, Veli-Matti Reinikkala served as Chair of the Board, and Sebastian Bondestam as Deputy Chair.

In 2024, the Board evaluated its performance and procedures through a self-evaluation questionnaire. In the evaluation, the members considered, among other things, the diversity of the Board, the quality of the Board and committee work, and information sharing between the Board and the management. The board discussed and analyzed the evaluation results, and improvement proposals were agreed upon based on these discus- sions.

In 2024, key themes on the Board’s agenda were the approval of the extension of the company’s strategy period from 2025 to the medium-term (3−5 years) and the reorganization plan, including the pre-processing equipment production transfer from Switzerland to China, as well as plan-

Glaston Annual Review 2024 8

ning and follow-up of the strategic initiatives. In addition, the finalization of the recruitment process for the new CEO was handled.

Independence of Members of the Board

According to an independence assessment performed by the Com- pany’s Board of Directors, all of the Members of the Board were inde- pendent of the Company except for Antti Kaunonen, who due to his role as interim CEO was dependent on the company as of November 15, 2023 until August 12, 2024. After Kaunonen stepped down from his role as the interim CEO, all of the Members were independent of the Company. Board Members Tero Telaranta and Sebas- tian Bondestam are dependent on a significant shareholder of the Com- pany, Ahlstrom Capital B.V., whose ownership was 26.39% on December 31, 2024. The Members of the Board have no conflicts of interest between the duties they have in the Company and their private interests.

General Counsel Kaisa Latva served as the secretary to the Board of Direc- tors.

The CV details of the members of the Board are available on the com- pany website. The remuneration of the Board is described in the Remu- neration Report 2024.

Glaston Annual Review 2024 9

Members of the Board of Directors December 31, 2024

Glaston Annual Review 2024 10

Committees of the Board of Directors

Glaston’s Board of Directors has two committees: the Audit Committee and the People and Remuneration Committee. The Board of Directors appoints the members and chairs of the committees, taking into account the expertise and experience required for the duties of the committees. The members of the committees are appointed for the term of office of the Board of Directors. The committees are preparatory bodies of the Board of Directors and do not have their own decision-making power.

Audit Committee

The Audit Committee assists the Board of Directors by preparing matters within the competence of the Board of Directors. The Commit-

tee reports to the Board of Directors on matters discussed and measures taken at least four times a year and makes proposals to the Board for decision-making, if necessary.

The Board of Directors specifies the duties of the Audit Committee in a charter confirmed by the Board of Directors. The Audit Committee oversees the financial and sustainabil- ity reporting processes and monitors the effectiveness of internal control, internal audit and risk management systems. In addition, the Committee reviews the description of the main features of the internal control and risk management systems associated with the financial reporting process, monitors the statutory audit of the financial statements and the consoli- dated financial statements, monitors

the assurance of the sustainability reporting, evaluates the independ- ence of the statutory audit firm and prepares a proposal for the election and remuneration of the auditor and sustainability report assurance pro- vider. Other duties include evaluating compliance with laws, regulations and corporate practices, overseeing significant litigation concerning Group companies, and performing any other duties assigned to the Committee by the Board of Directors.

The Audit Committee carries out a self-evaluation of its work annu- ally, and the Chair of the Committee reports the results to the Board of Directors.

Audit Committee in 2024

Until the Annual General Meeting on April 9, 2024, Arja Talma served as Chair, and Sarlotta Narjus and Tero Telaranta as members of the Audit Committee. The members of the Audit Committee were independent of the Company. Tero Telaranta is dependent on a significant share- holder of the Company. As of April 9, 2024, the composition of the Audit Committee remained unchanged, and Arja Talma served as Chair, and Sarlotta Narjus and Tero Telaranta as members of the Audit Committee.

In 2024, the Audit Committee met six times. The meeting attendance is reported in the table to the left.

In 2024, the committee closely followed the preparations of the sus- tainability statement and the progress as well as findings of the internal audit besides its regular reviews of financial reporting, audit and risk management.

People and Remuneration Committee

The People and Remuneration Com- mittee assists the Board of Direc- tors by preparing matters within the competence of the Board of Directors. The Board of Directors is responsible for the duties it assigns to the Com- mittee.

The Board of Directors specifies the duties of the People and Remuner- ation Committee in a charter con- firmed by the Board of Directors. Key duties of the Committee include pre- paring the remuneration policy and remuneration report for the Board and the Annual General Meeting, prepar- ing salaries and other benefits of Glas- ton’s CEO and other members of the Executive Leadership Team, preparing the nomination of the CEO and other members of the Executive Leadership Team and their successors, and pre- paring proposals for Glaston's short- and long-term incentive schemes as

Glaston Annual Review 2024 11

well as monitoring the company’s key personnel’s successor and develop- ment plan. In addition, the Commit- tee's duties include carrying out all other duties assigned to the Commit- tee by the Board of Directors.

The People and Remuneration Committee convenes at the invita- tion of the Chair, as necessary and at least twice a year. The Members of the Board of Directors and the CEO have the right to attend the meetings of the Committee.

The People and Remuneration Committee regularly carries out self-evaluation of its work, and the Chair of the Committee reports the results to the Board of Directors.

People and Remuneration Committee in 2024

Until the Annual General Meeting on April 9, 2024, Veli-Matti Reinik- kala served as Chair, and Sebastian Bondestam and Michael Willome as members of the People and Remu- neration Committee. After the Annual General Meeting, Veli-Matti Reinikkala continued as Chair, with Sebastian Bondestam and Michael Willome as members of the committee. As of August 12, 2024, Antti Kaunonen resumed his position as a member of the People and Remuneration Com-

mittee as his role as the interim CEO of the company ended.

The members of the People and Remuneration Committee were inde- pendent of the Company. Sebastian Bondestam is dependent on a signifi- cant shareholder of the Company.

In 2024, the People and Remuner- ation Committee met four times. The meeting attendance is reported in the table on page 11. On the committee’s agenda were the incentive program for top management and the out- come of the same, top management review and remuneration as well as a talent review follow-up. In accordance with its duties, the committee also prepared the selection and appoint- ment of Glaston’s new President & CEO. In addition, the committee pre- pared the remuneration report for the governing bodies.

Shareholders’ Nomination Board

The Nomination Board’s task is to prepare and present annually for the Annual General Meeting and, if nec- essary, for an Extraordinary General Meeting, a proposal concerning the number of Members of the Board of Directors, a proposal on the identities of the Members of the Board, and a proposal on the remuneration of the Members of the Board. An additional

task of the Nomination Board is to seek candidates as potential Members of the Board of Directors.

In its activities, the Nomination Board complies with current legisla- tion, stock exchange rules applicable to the Company, and the Corporate Governance Code.

The Nomination Board consists of four (4) members, all of whom are appointed by the Company’s four largest shareholders, who appoint one member each. The Chair of the Com- pany’s Board of Directors serves as an advisory member of the Nomination Board.

The Company’s largest share- holders entitled to appoint members to the Nomination Board are deter- mined annually on the basis of the registered holdings in the company’s shareholder register held by Euroclear Finland Ltd on the first working day in September of the year in question. The Nomination Board elects a Chair from among its members.

The Nomination Board is estab- lished to serve until a General Meeting of Shareholders decides otherwise. The members of the Nomination Board are appointed annually and the term of office of the members expires when new members are appointed to the Board.

The members of the Nomination Board shall be independent of the company, and no person belonging to the Company’s executive leadership shall be a member of the Nomination Board.

The Nomination Board shall submit its proposals to the Company’s Board of Directors annually by the end of January preceding the Annual General Meeting. Proposals for an Extraordi- nary General Meeting shall be sub- mitted to the Company’s Board of Directors so that they can be included in the notice to attend the meeting.

A decision of the Nomination Board shall be the opinion of a majority of the members of Nomination Board. If the votes are tied, then the Chair’s vote shall be decisive. If the votes are tied in the election of the Chair, the member candidate for Chair nomi- nated by the shareholder who had the largest number of shares when the Nomination Board was established shall be elected as Chair.

A report on the activities of the Nomination Board shall be presented at the Annual General Meeting and published on the Company’s website.

Glaston Annual Review 2024 12

Shareholders’ Nomination Board 2024

Until August 31, 2024, the Shareholders’ Nomination Board comprised of Lasse Heinonen (Chair), as the represent- ative nominated by Ahlstrom Capital B.V., Jaakko Kurikka, as the represent- ative nominated by Hymy Lahtinen Oy, Pekka Pajamo, as the representative nominated by Varma Mutual Pension Insurance Company, and Esko Torsti, as the representative nominated by llmarinen Mutual Pension Insurance Company.

In accordance with its charter, the Nomination Board prepared its proposal concerning the Board composition and remuneration for the AGM 2024 and the proposals were approved at the AGM held on 9 April 2024.

Based on ownership on September 2, 2024, the Shareholders’ Nomination Board comprised of Jyrki Vainionpää, as the representative nominated by Ahlstrom Capital B.V., Jaakko Kurikka, as the representative nominated by Hymy Lahtinen Oy, Pekka Pajamo, as the representative nominated by Varma Mutual Pension Insurance Company, and Esko Torsti, as the rep- resentative nominated by llmarinen Mutual Pension Insurance Company. Veli-Matti Reinikkala, Chair of the Glas- ton Corporation’s Board of Directors,

served as an advisory member of the Nomination Board.

In its organizing meeting on Sep- tember 9, 2024, the Nomination Board elected Jyrki Vainionpää amongst its members as the Chair. The Board met four times during 2024 and the average attendance of members was 100%. No fees were paid to the mem- bers of the Nomination Board.

President & CEO

The President & CEO handles the operational management of the Com- pany in accordance with instructions issued by the Board of Directors. He is responsible to the Board of Direc- tors for fulfilling the targets, plans and goals that the Board sets. The Presi- dent & CEO is responsible for ensur- ing that the Company’s accounting is in compliance with the law and that financial management has been arranged in a reliable manner. The President & CEO is supported by the Executive Leadership Team.

Glaston’s Board of Directors nomi- nated Board member Antti Kaunonen as the interim CEO of the company on November 15, 2023, and he served in this role until August 12, 2024.

On March 22, 2024, Glaston announced the appointment of Toni Laaksonen as the new CEO & Presi-

dent of Glaston Corporation and he assumed his duties on August 12, 2024.

Deputy CEO

Sasu Koivumäki, CSO (Chief Sales Officer), served as Deputy CEO during January 1, 2015−July, 31, 2024. The Dep- uty to the CEO carries out the duties of the CEO after the termination of his/her service or when he/she is temporarily prevented from perform- ing his/her duties.

The Board of Directors decided on May 2, 2024 to abolish the role of dep- uty CEO as of August 1, 2024.

Executive Leadership Team

The Chair of the Company’s Board of Directors appoints, on the proposal of the President & CEO, the Members of the Executive Leadership Team and confirms their remuneration and other contractual terms. The Company’s President & CEO acts as the Chair of the Executive Leadership Team. The Executive Leadership Team han- dles the Group’s and business areas’ strategy issues, capital expenditure, financial development, product policy, Group structure and control systems, and supervises the Company’s oper- ations.

The Members of the Execu- tive Leadership Team report to the

President & CEO and assist him in implementing the Company’s strat- egy, operational planning and man- agement, and in reporting the devel- opment of business operations. The Executive Leadership Team meets under the direction of the President & CEO.

In 2024, the composition of the Executive Leadership Team was the following: Interim CEO Antti Kaunonen (until August 12, 2024), President & CEO Toni Laaksonen (as of August 12, 2024), CSO Sasu Koivumäki, SVP People & Culture Riikka Laitasalo, General Counsel Kaisa Latva, CFO Päivi Lindqvist, SVP Architecture Miika Äppelqvist, SVP Services Artturi Mäki (until April 30, 2024), SVP Automation & SCM Robert Prange (until October 13, 2024), and SVP Mobility, Display & Solar José Yepes (until October 31, 2024).

In order to accelerate the execution of the strategy, Glaston announced in October 2024 the plan to reorganize the company’s structure. In the new structure that is planned to come into effect on January 1, 2025, Glaston has three Business Functions: Mar- ket Areas, Solutions & Operations, and Service Supply & Development. In connection to the reorganiza-

Glaston Annual Review 2024 13

tion, Miika Äppelqvist was appointed Chief Solutions & Operations Officer, in effect as of January 1, 2025. The financial reporting segments remain unchanged: Architecture and Mobility, Display & Solar.

The Executive Leadership Team convened 12 times in 2024.

Glaston Annual Review 2024 14

Executive Leadership Team on December 31, 2024

*) Share ownership includes also the ownership of Glaston Corporation shares by the entities controlled by the person in question.

Remuneration of the CEO & President and the Executive Leadership Team is described in the Remuneration Report 2024 and on the company’s website.

Glaston Annual Review 2024 15

Main Features of Internal Control and Risk Management Pertaining to the Financial Reporting Process

Internal control is an essential part of the Company’s administration and management. Its aim is to ensure that the Group’s operations are efficient, productive and reliable and that legislation and other regulations are complied with. The Group has spec- ified Group-wide principles for the main areas of its operations that form the basis for internal control.

The Group’s internal control sys- tems serve to provide reasonable assurance that the financial reports published by the Group give reason- ably correct information about the Group's financial position. The Board of Directors and the President & CEO are responsible for arranging internal control. A report covering the Group's financial situation is supplied monthly to the Board of Directors. The Group's internal control is decentralized to dif- ferent Group functions, which super- vise compliance with instructions approved by the Board of Directors within their areas of responsibility. The Group’s financial management and operational control are supported and coordinated by the Group Finance and controller network.

The Group’s financial reporting

process complies with the Group’s operating guidelines and standards relating to financial reporting. The interpretation and application of financial reporting standards has been concentrated in the Group Finance organization, which maintains operat- ing guidelines and standards relating to financial reporting and is responsible for internal communication relating to them. The Group Finance organization also supervises compliance with these guidelines and standards.

The Group’s Finance organization regularly monitors the reporting of the Group’s units and addresses devia- tions perceived in reporting and, if necessary, performs either its own separate internal control auditing or commissions the internal con- trol auditing from external experts. Control of reporting and forecasting processes is based on the Group’s reporting principles, which are deter- mined and centrally maintained by the Group Finance's organization. The principles are applied consistently throughout the Group and a consist- ent Group reporting system is in place.

The Audit Committee approved an internal audit charter and internal audit plan for 2024. In 2024 internal audit was performed by an outsourced service provider.

Risk Management

Risk management is an essential part of Glaston's management and control sys- tem. The purpose of risk management is to ensure the identification, manage- ment and monitoring of risks relating to business targets and operations. Risk management principles and operating practices have been specified in a risk management policy approved by the Company’s Board of Directors.

The principle guiding Glaston's risk management is the continuous, sys- tematic and appropriate development and implementation of the risk man- agement process, with the objective being the comprehensive recogni- tion and appropriate management of risks. Glaston’s risk management focuses on the risks relating to busi- ness opportunities and on risks that threaten the achievement of Group objectives in a changing operating environment. From the perspective of risk management, the Company has divided risks into four different groups: strategic risks, operational risks, financial risks and hazard risks. Risks relating to property, business inter- ruption as well as liability arising from the Group’s operations have been covered by appropriate insurances. Management of financial risks is the responsibility of the Group Treasury in

the Group’s parent company.

Glaston's risk management policy includes guidelines relating to the Group's risk management. Risk man- agement policy also specifies the risk management processes and respon- sibilities. Glaston's risk management consists of the following stages: risk recognition, risk assessment, risk treatment, risk reporting and com- munication, and control of risk man- agement activities and processes. As part of the risk management process, the most significant risks and their possible impacts are reported to the Company’s management and the Board of Directors regularly, based on which management and the Board are able to determine the level of risk that the Company’s business func- tions are potentially ready to accept in each situation or at a certain time.

It is the duty of Glaston’s Board of Directors to supervise the implementa- tion of risk management and to assess the adequacy and appropriateness of the risk management process and of risk management activities. In practice, risk management consists of appro- priately specified tasks, operating practices and tools, which have been adapted to Glaston’s business functions and Group-level management systems. Risk management is the responsibility

Glaston Annual Review 2024 16

of the SVP of each segment and the head of Group-level function. Risk rec- ognition is in practice the responsibility of every Glaston employee.

The Group Legal function is respon- sible for guidelines, support, control and monitoring of risk management measures. In addition, the function consolidates segment and Group- level risks. The Group Legal function reports on risk management issues to the President & CEO and the Execu- tive Leadership Team and assesses in collaboration with them any changes in the probabilities or the impacts of identified risks and in the level of their management. The Group Legal function also reports the results of risk management processes to the Board of Directors.

Segment and Group-level risk management is included in the annual Group-wide risk management pro- cess. The process can also always be initiated when required if substantial strategic changes requiring the initia- tion of the risk management process take place in a certain segment.

The management group of each segment and function identifies and assesses its operational risks and specifies risk management measures by which an acceptable level of risk can be achieved.

Utilizing the risk management pro- cess, risks are systematically identified and assessed in each segment and at Group level. In addition, at each level actions are specified to achieve an acceptable risk level. Risks are consol- idated at Group level. Action plans are prepared at each level of operations to ensure risks remain at an accept- able level.

The Group's risks are covered in more detail in the Report of the Board of Directors on page 37. The manage- ment and organization of the Group’s financial risks are presented in more detail in Note 5.4 of the consolidated financial statements on page 162.

Information and Communications

An effective internal control system requires sufficient, timely and reliable information to enable management to assess the achievement of the company’s goals. There is a need for both financial and other information on the Company’s internal and exter- nal events and activities. Employees have the opportunity to report, also through a whistleblowing channel, any questionable activity they observe. All external communications are han- dled in accordance with the Group’s Disclosure policy.