The Board has a Financial and Audit Committee to support the Board in maintaining the integrity of the Company’s financial reporting and the Board’s control functions. It regularly reviews the system of internal control, management and reporting of financial risks and the audit process. It makes recommendations regarding the appointment of external auditors for the parent company and the main subsidiaries.

The Committee is comprised of 3–5 non-executive board members who are independent and not affiliated with the Company. At least one committee member must be a financial expert who has significant knowledge and experience in accounting and accounting principles applicable to the Company.

The Financial and Audit Committee meets regularly at least twice a year. The Committee members meet the external auditor without the management being present in connection with its meetings. The Chairman of the Committee presents a report on each Financial and Audit Committee meeting to the Board.

The tasks and responsibilities of the Financial and Audit Committee are defined in its charter, which is approved by the Board. Financial and Audit Committee members may receive compensation solely based on their role as directors. The compensation is decided upon by the shareholders at an AGM.

In 2004

The Financial and Audit Committee comprised five members, Jan Sjöqvist (Chairman), Barbara Kux (from 18 March 2004 onwards), George W. Mead (until 18 March 2004), Ilkka Niemi, Paavo Pitkänen and Marcus Wallenberg, and convened seven times. In April 2004 the Committee appointed Jan Sjöqvist as a Financial Expert in line with the Sarbanes-Oxley Act of 2002. In addition to the regular tasks based on the Committee’s charter, during 2004 the Committee performed an evaluation of the Company’s key financial targets and reviewed the preparations for the internal control assessment pursuant to Section 404 of the Sarbanes-Oxley Act (see also Disclosure Committee’s tasks in 2004).

Remuneration

Chairman EUR 10 000 per annum and member EUR 7 000 per annum.

Summary of Charter

Main Tasks

• To support the Board in maintaining the integrity of the Company’s financial reporting and the Board’s control functions
• Regularly to review the system of internal control, management and reporting of financial risks and the audit process
• To make recommendations regarding the appointment of external auditors for the parent company and the main subsidiaries

Composition

• 3–5 non-executive Board members who are independent and not affiliated with the Company
• At least one committee member must be a financial expert who has significant knowledge and experience in accounting and accounting principles
  applicable to the Company
• Financial and Audit Committee members may receive compensation based solely on their role as Directors, such compensation to be decided by the shareholders at an AGM

Meetings and Reporting to the Board

• The Financial and Audit Committee meets regularly at least twice a year
• Regular participants in the Committee’s meetings
  • External Auditors
  • Head of Internal Audit, CFO and Legal Counsel acting as secretary to the Committee
  • Other persons such as SVP Finance, General Counsel and Group Controller invited by the Chairman
• The Committee members meet the external auditors without the management being present in connection with its meetings
• The Chairman of the Committee presents a report on each Financial and Audit Committee meeting to the Board