Annual Review 2025

Table of Contents

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Glaston 2025

Governance

Board of Directors’ Review

Financial Review

Glaston Annual Review 2025

In 2025, investment conditions in our primary markets, Architecture and Mobility, were challenging. In this market environment, we maintained a strong focus on disciplined execution, effective cost management, and care- fully selected growth opportunities.

Due to global economic unpredict- ability and prolonged investment hesitation, our full-year order intake was down by 13%, which also affected net sales development. For the full year, net sales of EUR 208.8 million were recorded. The lower volume affected profitability development. However, supported by our cost con- trol measures, comparable EBITA was EUR 14.0 million.

To ensure profitable performance amid sustained low market activity, we launched a program in August to improve our efficiency and reduce costs. We sharpened our organiza- tional model, clarified accountabilities, adapted our structure and ways of working to increase our efficiency in the prevailing market. Strict cost con- trol measures are in place, and cost discipline is now better embedded in our operating model.

From the President & CEO

Despite the challenges we currently face, I view this moment as an oppor- tunity to develop the company to be more resilient and position Glaston for improved performance when market conditions begin to recover. As we aim for sustainable growth, our Services business is key, and we expect it to be an important growth and profitability driver across market cycles.

Addressing new markets

Expanding our addressable market is another central pillar of our growth agenda. Launched to the market in October, our second brand Uniglass is a concrete example of how we are expanding into new market segments and addressing customers with differ- entiated value propositions. Currently, Uniglass’ offering covers tempering and insulating technologies, and the digital and scalable sales model ena- bles fast and transparent interaction with customers.

High employee engagement

Safety at work and employee engage- ment are among our strategic targets. Our group-wide safety target is zero

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Glaston 2025

Glaston Annual Review 2025

Governance

Board of Directors’ Review

Financial Review

accidents. In 2025, our lost time injury frequency rate LTIFR was 5.8 (5.7), indicating that continued systematic safety work is required. Our employee engagement level scored to an all- time high of 78, exceeding our target of 75. This is a strong result and shows the resilience and commitment within our teams, even during challenging times. In 2025, we made significant improvements in topics related to workload balance and Diversity, Equity and Inclusion, DEI.

Technology forerunner

Glaston has a long tradition as a tech- nology frontrunner. In 2025, we contin- ued to build on this legacy, focusing on projects and innovations to automate our core products. We introduced the latest version of the Autopilot, which offers a fully automated tempering process for variable mixed production. The new automatic trimming system, Autotrim, helps increase capacity and reduce manual labor in the laminat- ing process by automating a typically manual step. In insulating glass tech- nologies, demand for the ULTRA TPS ® line for triple TPS ® insulating glass units with ultra-thin center glass, developed well. Further, the MUNTIN'MASTER, an automatic muntin positioning station for TPS ® insulating glass units, repre-

sents an important step towards fully automated production.

Creating customer value

Innovation is at the core of how we create value to our customers. By deepening our customer under- standing, we not only enhance the customer experience but also strengthen the competitiveness of our own operations.

Customer driven innovation is what enables us to anticipate future needs and differentiate our offering. By integrating lifecycle thinking, contin- uous innovation, and energy efficient technologies across our portfolio, we are building a strong foundation for long term, profitable, and sustainable growth.

2025 was a turbulent year, and I want to extend my sincere thanks to

Glaston’s team for their hard work and dedication throughout the year. I would also like to thank our customers, shareholders, and all our stakeholders for your continuous trust and support. We are clear about our direction, and confident in our ability to build strong performance going forward.

Miika Äppelqvist

President & CEO

Glaston’s strategic targets and execution

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Glaston 2025

Glaston Annual Review 2025

Governance

Board of Directors’ Review

Financial Review

Employees per region 31.12.2025, %, (FTE)

Received orders by product area, € million

Comparable EBITA, € million

Net sales per region, %

Order book, € million

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Glaston 2025

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Board of Directors’ Review

Financial Review

Governance

Corporate Governance Statement 2025 ................................ 7

Remuneration Report for Governing Bodies 2025 .......... 18

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Financial Review

Corporate Governance Statement 2025

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 2025.

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.

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 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

Governance model December 31, 2025

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

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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, signi- ficant 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 sustain- ability reporting processes and the efficiency of the Company's internal control, internal auditing, and risk management systems pertaining to the financial and sustainability report- ing processes, monitoring the statu- tory audit of the financial statements and consolidated financial statements, monitoring the assurance of the sus- tainability statement, 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 statement. The Board of Directors also regularly evaluates its own actions and working practices.

Meetings of the Board of Direc- tors are generally held in Helsinki. The Board of Directors also visits the Group's other operating locations and hold meetings there. The Board of Directors may also hold on-line meet-

ings. The Board of Directors meets according to a timetable agreed in advance, generally approximately 10 times per year and additionally, if necessary. The Company’s President & CEO and Chief Financial Officer generally attend the meetings of the Board. The Company’s General Coun- sel acts as Secretary to the Board. If necessary, such as in connection with the handling of strategy or the annual plan, other Members of the Executive Leadership Team may also attend Board meetings. The Auditor attends all Audit Committee meetings and at least one Board meeting per year.

Board of Directors in 2025

At the Annual General Meeting, held on April 16, 2025, the Members of the Board of Directors Veli-Matti Rein- ikkala, Sebastian Bondestam, Antti Kaunonen, Arja Talma, Tero Telaranta and Michael Willome were re-elected as members of the Board of Directors, and Tina Wu was elected as a new member of the Board of Directors. The Board of Directors was elected for a term of office ending at the closing of the next Annual General Meeting.

In 2025, Veli-Matti Reinikkala served as Chair of the Board, and Sebastian Bondestam as Deputy Chair.

In 2025, the Board evaluated its

performance and procedures through a self-evaluation questionnaire. The evaluation, encompassed 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. Improvement proposals were agreed upon based on these discussions.

In 2025, key themes on the Board’s agenda were the recruitment of the new CEO, the approval and follow-up of the cost saving program, the finalization of the pre-processing equipment production transfer from Switzerland to China as well as review of the company’s updated strategy.

Diversity of the Board of Directors

The Board has a diversity policy. According to the policy, when plan- ning the composition of the Board, the Shareholder’s Nomination Board takes into account the needs and development stages of the compa- ny’s businesses as well as the areas of expertise required by the Board. Diversity ensures that the Board’s overall competence profile effectively supports Glaston’s current and future business development as well as the achievement of its strategic objectives.

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Glaston Annual Review 2025

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Board diversity is examined from various perspectives. For Glaston, essential factors include complemen- tary expertise among members, edu- cation and experience from different professions and industries, businesses at various stages of development, and leadership, as well as the personal qualities of the members. Diversity is further supported by experience in an international operating environment, expertise in the company’s industry and stage of development, as well as consideration of age and gender distribution. Both genders must be represented on Glaston’s Board of Directors.

In 2025, the board had seven members of which two were female (ca. 29 percent) and five were male (ca. 71 percent). Board members brought together diverse professional experience and educational back- grounds, particularly in engineering and economics. The members of Glaston’s Board hold, or have previ- ously held, management and board positions in both listed and unlisted companies across sectors relevant to Glaston’s business. The board also reflects diversity in background, with members born across three decades and three different nationalities repre- sented.

Glaston’s objective is to achieve a more balanced gender distribution of the Board. To reach this goal, the Nomination Board seeks to ensure that representatives of both genders are involved in the search and evalua- tion process for new Board members.

Independence of Members of the Board

According to an independence assessment performed by the Company’s Board of Directors, all of the Members of the Board 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, 2025. The Members of the Board have no conflicts of interest between the duties they have in the Company and their private interests.

As the secretary to the Board of Directors served General Counsel Kaisa Latva until July 31, 2025, and as of September 15, 2025, General Counsel Minna Toiviainen.

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 2025.

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Members of the Board of Directors on December 31, 2025

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Meeting attendance of Members of the Board 2025

In 2025, Glaston’s Board of Directors convened 13 times. The meeting attendance is reported in the table below.

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 annually, and the Chair of the Committee reports the results to the Board of Directors.

Audit Committee in 2025

Until the Annual General Meeting on April 16, 2025, 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 16, 2025, the composition of the Audit Committee was the following: Arja Talma served as Chair, and Tero Telar- anta and Tina Wu as members of the Audit Committee.

In 2025, the Audit Committee met six times. The meeting attendance is reported in the table to the left.

In 2025, the Committee focused on regular reviews of financial reporting, audit and risk management. In addi- tion, the committdde closely followed the finalization of the sustainability statement.

People and Remuneration Committee

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

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

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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 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 2025

Until the Annual General Meeting on April 16, 2025, Veli-Matti Reinik- kala served as Chair, and Sebastian Bondestam, Antti Kaunonen and Michael Willome as members of the People and Remuneration Committee. After the Annual General Meeting, Veli-Matti Reinikkala contin-

ued as Chair, with Sebastian Bondes- tam, Antti Kaunonen and Michael Willome as members of the commit- tee. 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 2025, 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.

Shareholders’ Nomination Board 2025

Until August 31, 2025, the Shareholders’

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Nomination Board comprised of Jyrki Vainionpää (Chair), as the represent- ative nominated by Ahlstrom Capital B.V., Jaakko Kurikka as the representa- tive 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 pro- posal concerning the Board compo- sition and remuneration for the AGM 2025, and the AGM resolved in accord- ance with the proposal.

Based on ownership on September 1, 2025, 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

September 24, 2025, the Nomina- tion Board elected Jyrki Vainionpää amongst its members as the Chair. The Board met three times during 2025, and the average attendance of members was 100%. No fees were paid to the members of the Nomina- tion 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.

On February 17, 2025, Glaston announced that President & CEO Toni Laaksonen had submitted his resigna- tion from his position as the President & CEO of Glaston Corporation to join another company. On May 14, 2025, Glaston announced the appointment of Miika Äppelqvist as the new CEO & President of the company and he assumed his duties on June 1, 2025.

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 handles the Group’s and business function’s strategy issues, capital expenditure, financial development, product policy, Group structure and control systems, and supervises the Company’s oper- ations.

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

In 2025, the composition of the Executive Leadership Team was the following: CEO Toni Laaksonen (until May 31, 2025), President & CEO Miika Äppelqvist (as of June 1, 2025), CSO Sasu Koivumäki (until May 9, 2025), EVP Sales & Service Americas Joe Butler (as of May 6, 2025), EVP Sales

& Services EMEA & APAC Kimmo Kuusela (as of May 6, 2025), SVP People & Culture Riikka Laitasalo, General Counsel Kaisa Latva (until July 31, 2025), General Counsel Minna Toiviainen (as of September 15, 2025), CFO Päivi Lindqvist (until February 28, 2025), CFO Magnus Sjöblom (as of March 1, 2025), EVP Solutions & Opera- tions Jens Mayr (as of July 1, 2025) EVP Services Robert Jenks (as of April 1, 2025).

The Executive Leadership Team convened 11 times in 2025.

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Executive Leadership Team on December 31, 2025

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

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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 rea- sonably 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 decen- tralized to different Group functions, which supervise 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 stand- ards relating to financial reporting. The interpretation and application of financial reporting standards has been concentrated in the Group Finance organization, which maintains operating guidelines and standards relating to financial reporting and is responsible for internal communi- cation 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.

In 2025, internal audit was per- formed by an outsourced service provider.

Risk Management

Risk management is an essential part of Glaston's management and control system. The purpose of risk manage- ment is to ensure the identification, management and monitoring of risks relating to business targets and oper- ations. 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 mana- gement 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 implemen- tation of risk management and to assess the adequacy and appropri- ateness of the risk management pro- cess and of risk management activ- ities. In practice, risk management consists of appropriately specified tasks, operating practices and tools, which have been adapted to Glaston’s business functions and Group-level

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management systems. Risk manage- ment is the responsibility of the EVP of each Business Function and the head of Group-level function. Risk recogni- tion 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 Business Function and Group-level risks. The Group Legal function reports on risk management issues to the President & CEO and the Executive 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.

Business Function and Group-level risk management is included in the annual Group-wide risk management process. The process can also always be initiated when required if substan- tial strategic changes requiring the initiation of the risk management pro- cess take place in a certain function.

The management of each 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 Business Func- tion and at Group level. In addition, at each level actions are specified to achieve an acceptable risk level. Risks are consolidated at Group level. Action plans are prepared at each level of operations to ensure risks remain at an acceptable level.

The Group's risks are covered in more detail in the Report of the Board of Directors on page 34. 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 157.

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.

Auditing

The Company has one Auditor, which must be an auditing firm authorized by the Finnish Patent and Regis- tration Office. The Annual General Meeting elects the Auditor to audit the accounts for the financial year, and the Auditor’s duties cease at the close of the subsequent Annual General Meeting. It is the Auditor’s duty to audit the consolidated and parent company financial statements and accounting as well as the par- ent company’s governance, and to give reasonable assurance that the financial statements as a whole are free from material misstatement. The Company’s Auditor presents the audit report required by law to the Compa- ny’s shareholders in connection with the annual financial statements and reports regularly to the Board of Direc- tors. The Auditor, in addition to fulfilling general competency requirements, must also comply with certain legal independence requirements guaran- teeing the execution of an independ- ent and reliable audit.