Table of ContentsVeikkaus 2010–2011 ........................................................1

Excellence Award .............................................................2

Strategy ............................................................................ 2

Mission and vision ............................................................4

Targets 2010..................................................................... 4

Targets 2011..................................................................... 6

CEO's review ....................................................................7

Key figures........................................................................ 9

Operations ...................................................................... 10

Customer understanding ................................................10

Registered players ..........................................................11

Customer contacts ..........................................................12

Customer service............................................................14

Our responsibilities to our customers ............................14

Marketing and communications ......................................16

R&D ................................................................................ 17

Games ............................................................................ 18

Sales channels ...............................................................20

Sales network .................................................................20

Sales clerks training........................................................22

Sales clerk communication .............................................23

Online channels ..............................................................24

Veikkaus and social media .............................................26

Veikkaus and smart phones ...........................................27

Market review .................................................................28

Future-outlook.................................................................29

Responsible operator......................................................30

Stakeholder cooperation.................................................31

The Ethical Council .........................................................36

CSR program..................................................................37

Responsible lottery .........................................................38

Verified responsibility ......................................................39

Security and reliability .....................................................39

Risks and uncertainty factors..........................................39

Consumer protection for players’ advantage ..................40

Preventing problem gambling .........................................41

Tools to control gaming ..................................................41

Peluuri helpline ...............................................................42

Profits distributed to Finns ..............................................43

The path of the Veikkaus euro ........................................45

Thousands of beneficiaries .............................................45

Case: Arts ....................................................................... 47

Case: Science.................................................................48

Case: Sports ...................................................................49

Case: Youth work ...........................................................50

Personnel........................................................................ 51

Management and supervisors ........................................52

Development of personnel ..............................................52

Remuneration .................................................................55

Occupational wellbeing...................................................55

Cooperation ....................................................................56

Personnel key figures .....................................................57

Environmental actions ....................................................58

Environmental impact .....................................................59

Results with environmental deeds ..................................61

GRI table......................................................................... 63

Assurance report ............................................................73

Corporate Governance review 2010...............................75

Governing bodies............................................................75

Supervision of gaming activities .....................................81

Internal control ................................................................82

Risks and risk management ...........................................84

Supervision and control measures and supervisoryresponsibilities ................................................................87

Communications and public relations .............................87

Monitoring ....................................................................... 88

Internal and external audit ..............................................89

Corporate Governance Code and deviations .................90

Board of Directors ...........................................................90

Supervisory Board ..........................................................92

Supervisors & auditors....................................................93

Executive teams .............................................................93

Strategic executive team ................................................94

Operative executive team ...............................................96

Board of Directors’ Report 2010 ...................................100

Statement of comprehensive income ...........................106

Balance sheet ...............................................................108

Cash-flow statement .....................................................109

Changes in shareholders’ equity ..................................110

Accounting principles....................................................111

Notes to the financial statements..................................116

1. Turnover by games and motivational states .............117

2. Development of financial result.................................118

3. Other operating income ............................................119

4. Depreciations............................................................120

5. Purchase of services ................................................121

6. Other operating expenses ........................................122

7. Financial income and expenses ...............................123

8. Tangible assets and depreciations ...........................124

9. Intangible assets and depreciations .........................126

10. Investments and long-term investments .................127

11. Investments held for sale ........................................128

12. Short-term receivables............................................129

13. Liquid assets ...........................................................130

14. Share capital and undistributed prizes' fund ...........131

15. Short-term liabilities ................................................132

16. Liabilities from employee benefits...........................133

17. Related party transactions ......................................135

18. Contingent liabilities and amounts payable on otherleasing agreements ......................................................136

19. Signatures...............................................................137

20. List of accounting books and record formats ..........138

Auditors’ report .............................................................139

Statement by the Supervisory Board ............................141

VEIKKAUS 2010–2011

Developing enjoyable gaming in the long termVeikkaus has been offering Finns enjoyable gaming experiences for over 70 years. Our mission, A FINN TOWIN, gives us a strong identity – one that every Veikkaus employee can identify with. Veikkaus' operations arebased on promoting responsible gaming in which a large number of players place moderate stakes.

Veikkaus' values:

Responsibly

Veikkaus organises gaming responsibly and reliably, and also channels Finnish gaming. Thissecures the support and approval of the society.

Reliably

Veikkaus employees can rely on each other under any circumstances. Reliable operationsalso involve open dialogue. Customers can always have confidence in the games Veikkausoffers.

Creatively

Veikkaus wants its games, services and way of working to reflect creativity and enjoyment.Personnel are also encouraged to be innovative.

For the common good

Veikkaus produces broad-ranging value for Finns. Veikkaus gives Finns the chance to worktowards the common good by offering safe and reliable gaming. Veikkaus indirectly employstens of thousands of Finns.

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Excellence Award Finland 2010

Excellence Award in recognition of long-termdevelopment efforts

Veikkaus won the Excellence Award Finland 2010, a competitionin which companies' operations and results are evaluatedaccording to the EFQM excellence model.

This award is recognition of the development efforts thatVeikkaus has been engaged in since 2004. During this time,Veikkaus has implemented a major development programme tooverhaul the company's strategy, operational steering and aconsiderable number of operating models.

In addition to the award, Excellence Finland also grantedVeikkaus the five-star ‘Recognised for Excellence' rating. In the2007 competition, Veikkaus was awarded the four-star‘Recognised for Excellence' rating.

Strategy

Using strategies to achieve targetsVeikkaus wants to continue being both successful and a pioneer in its industry. Veikkaus' chosen strategyensures that the company will achieve its targets by operating efficiently, reliably and responsibly.

Veikkaus' strategy comprises five sub-strategies: business, operating environment, development, service andpersonnel.

• Veikkaus' business strategy aims to ensure profitable operations in a changing operating environment.• The operating environment strategy seeks to influence Veikkaus' long-term capacity to operate.• With the company's development strategy Veikkaus ensures its position as a pioneer in its field also in the

future.• The target of the service strategy is to ensure customers' high-quality and user friendly gaming

experiences and game transactions.• In its internal operations, Veikkaus' personnel strategy seeks to create an excellent workplace.

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Veikkaus' process map

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In order to develop operations and implement its business strategy, Veikkaus has defined three essential coreprocesses: the service process, the R&D process and the steering process. These three core processes willensure that Veikkaus' operations take a customer-oriented approach and meet customers' needs. Besides thecore processes, Veikkaus also has support processes to ensure that the core processes can operate.

The world's leading lottery in 2013MissionVeikkaus produces broad-ranging value for Finnish society by organising gaming reliably and responsibly.

Vision 2013In 2013, Veikkaus is the world's leading lottery. Veikkaus' success in realising this vision will be measured usingthe following targets:

• Veikkaus organises gaming responsibly and reliably, and channels Finnish gaming. Veikkaus has securedsociety's support and acceptance for its operations.

• Veikkaus is managed and developed in a way that ensures high esteem for the company. The company isfurther developed to become the leader in its industry.

• Veikkaus offers its personnel a challenging and meaningful working environment in which to develop andproduce targeted services to consumers.

Stable operations and responsible growthVeikkaus is committed to CSR in all of its operationsIn 2010, Veikkaus received CSR certification from the World Lottery Association (WLA). In 2009, Veikkausensured that its responsibility practices meet European Lotteries (EL) standards.The standard comprises tensub-areas, each with its own detailed criteria for promoting responsibility.

In TNS Gallup's survey ‘Corporate reputations and responsibility 2010', Veikkaus' responsibility index was thebest within its own comparison group (Trade&Services). Veikkaus' strengths were stable and soundoperations, economic responsibility, profitability and competitiveness.

Increasing Veikkaus' valueVeikkaus' value to society increased in 2010, not only due to growth in Veikkaus' business volume and profit,but also thanks to the company's proactive development of its games and operations. The greatest strides weremade in Internet gaming, but Veikkaus also forged ahead with the development of traditional games. TheMinistry of Education and Culture distributed a record amount of Veikkaus funds: EUR 463 million.

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Economic responsibility - targets and achievements

Responsible profit growth continues

Veikkaus' result for the financial year was EUR 503.7 million, representing a rise of 7.5% on the previous year.Veikkaus achieved its profit targets and returned a total of EUR 462.7 million to the State to support the arts,sport, science and youth work. This was 11.8% more than in 2009.

During 2010, there were 89.8 million retail customer visits, which was 7% less than in 2009. Veikkaus extendedthe opening hours of its game system, and the system is now open every day from 6 a.m. to 12 midnight. Thisextension applies to both point-of-sale transactions and Internet gaming.

Social responsibility - targets and achievements

Increased customer numbers

The number of registered players rose by 13.6% to over 1.2 million in 2010. A total of 2.7 million customers areestimated to have played Veikkaus games (Atlas study, 1-6/2010).

Veikkaus Card sales accounted for an increased percentage of total POS sales - 23% in 2010 compared to20% in 2009. The number of customers using Veikkaus Cards also increased, as the average number ofweekly players totalled 220,000 in 2010, representing growth of 16% on the previous year.

Developing tools to control gaming

Veikkaus has launched ‘Test Your Gaming Habits', a website feature that allows customers to test their owngaming habits. On the basis of their results, customers are given tips on how to control their gaming. In 2010,Veikkaus also overhauled its ‘Game Pause' website, which explains the risks associated with gaming and offersadvice on how to control gaming. The revamped website also offers a broader range of gaming restrictions,which now enable customers to close their accounts for the rest of the day, week, month or year, as desired.

Seeking excellent performance through enhanced personnel competence

During 2010, all supervisors took part in training that covered managing and changing Veikkaus' corporateculture. Personnel received small group coaching that supported workplace performance and achieving targets.Veikkaus also offered training in a variety of areas through its Game Academy. These courses were open toeveryone. Those approaching retirement also mentored younger employees.

Environmental responsibility - targets and achievements

Analysing environmental impact

Veikkaus' actual environmental impact was analysed and the results were used to calculate the company'scarbon footprint.

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Environmental programme drawn up

The environmental programme drawn up for Veikkaus contains measures to achieve its new goal, which wasset in 2010: by the end of 2013, Veikkaus aims to have reduced its carbon dioxide emissions by 35 per cent.

Boosting growth and competitivenessVeikkaus is seeking responsible profit growth in 2011. The company's goal is to increase both the number ofregistered customers and the number of regular players. Veikkaus also wants to further increase thepercentage of total sales accounted for by registered players. The goal is to increase Veikkaus' value to society.New business opportunities are being developed and Veikkaus is investing in enhancing its competitiveness inorder to retain its leading market position.

Financial targets• Target operating profit: EUR 524.7 million• Total expenses as a percentage of gross profit margin: maximum 21.8%• Target return to the State: EUR 469.6 million

Social targets• Increasing the percentage of registered gaming transactions• Developing Veikkaus' customer base responsibly• The Veikkaus brand combines appeal and responsibility

Environmental target• By the end of 2013, Veikkaus is aiming to have reduced its carbon dioxide emissions to 65 per cent of

their 2009 level.*

* The deadline for this environmental target is the end of 2013. Emissions trends will be calculated with the same exclusions as in

2009, except for electricity consumption at retailers' points-of-sale, which is no longer included in the calculations.

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CEO's review2010 was an excellent year for Veikkaus. Our turnover rose by almost 9% toEUR 1,690 million. Veikkaus' profit also increased respectively by almost 8%to EUR 504 million - and all this will be used to support the arts, sport,science and youth work.

An excellent result, responsiblyVeikkaus' profits have risen by EUR 100 million in only four years! The wayin which Veikkaus has managed to combine recognisably responsibleoperations in the gaming industry with an exceptional capacity for profitgrowth has been the subject of international amazement. For example,Veikkaus' marketing expenses are significantly lower in all respects thanthose of comparable companies throughout the world, and even in the otherNordic countries.

This good result is a result of Veikkaus' long-term, determined and ambitiousefforts to develop its business. Winning the Excellence Award Finland is oneindication of our success. Veikkaus wants to be not only the best lottery inthe world, but also one of the leading companies in Finland.

In the gaming industry, responsibility is a many-layered concept.Responsibility is an integral part of all of our operations and processes. Butresponsibility also requires the ability to meet customers' needs and changesin demand. Otherwise, our main mission - to steer gaming demand intoresponsible channels - will not be achieved.

Simultaneous changes in FinlandWe must nott take it for granted that a national lottery company can successfully meet all the challenges posedby the many rapid changes in our operating environment.Some of the most important changes in 2010 were the rapid growth in Internet gaming and amendments toFinnish legislation governing the whole industry. Veikkaus' online marketing is much stronger today than it wasa year ago, and we will be able to further increase our market share in Internet gaming. Veikkaus has alreadybegun adapting to the amended Lotteries Act by, for example, introducing the new age limits long before thelegislation comes into force.

It's evident that the Finnish gaming industry's fine monopoly system requires further development and fine-tuning. When it comes to the responsibility, profitability and legality of this system, our goal is very clear andstraightforward.

...and abroadThe entire global lottery market is undergoing a revolution. New corporate entities and alliances are forming inthe industry. They will be much larger and stronger than the previous commercial players.

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Many countries are also shaping gaming systems and/or their operators in accordance with their needs andcircumstances, often adhering to a principle of exclusive rights.

It's strategically vital for both Veikkaus and Veikkaus' beneficiaries to take part in these developments.Participation offers the best resources for continued success. Thanks to its expertise and reputation, Veikkausis currently a sought-after partner among industry players. Our way of working that combines responsibility,efficiency and innovation provides both a good example and a basis for partnership anywhere in the world.

Thank you!I would like to thank all of our employees, retailers, games sales clerks and partners for their hard work andsolid support in development of Veikkaus in 2010. We now stand more prepared than ever for the comingchallenges.

Risto Nieminen

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Key CSR indicatorsEconomic responsibility 2010 2009 change, %

Turnover (MEUR) 1,689.9 1,557.6 8.5 %

Operating profit (MEUR) 501.4 464.6 7.9 %

Profit before appropriations 503.7 468.8 7.5 %

Result 503.7 468.8 7.5 %

Investments (MEUR) 34,0 30.7 10.7 %

Prize payouts to players (MEUR) 888.0 791.1 12.2 %

Number of POS (year end) 3,280 3,208 2.2 %

Retail commissions (MEUR) 85.1 82.5 3.2 %

Lottery tax (MEUR) 76.1 72.6 4.9 %

Return to the Ministry of Education and Culture (MEUR) 1) 462.7 414.0 11.8 %

Social responsibility 2010 2009 change, %

Registered players (year end) 1,223,652 1,077,566 13.6 %

Veikkaus Card holders (year end) 966,790 744,846 29.8 %

Number of employees (year end) 2) 364 355 2.8 %

Employee turnover – hiring rate (%) 9.9 6.5 38.1 %

Employee turnover – leaving rate (%) 7.4 6.2 7.3 %

Average duration of employment (year) 12.4 12.8 -3.1 %

Development discussions held (%) 100 100 0,0 %

Overall satisfaction (GPW) (%) 68 70 -2.9 %

Environmental responsibility 2010 2009 change, %

Electricity consumption at head office (MWh) 4,900 4,400 11.4 %

Heat energy consumption at head office (MWh) 3,060 2,980 2.7 %

Water consumption at head office (mз) 4,300 4,730 -9.1 %

Waste re-utilisation rate at head office (%) 3) 99 99 0.0 %

1) In addition to this EUR 462.7 million return, during the financial year Veikkaus also paid the Ministry of Education and Culture a

total of EUR 30.0 million in undistributed prize funds from previous years.2) At the beginning of 2010, 11 employees who regularly work for Veikkaus on short-term temporary contracts were given

permanent positions. They also worked for Veikkaus in 2009, when short-term temporary employees were not reported on. If they

had been included, the 2009 figure would have been 366. Personnel figures do not include short-term temporary contracts or

summer jobs.3) The waste re-utilisation rate shows the volume of waste that has been reused. The remainder is mixed landfill waste. The re-

utilisation rate is calculated by subtracting mixed and hazardous waste from the total volume of waste.

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BUSINESS OPERATIONS

Strong growth by listening to customers' wishesVeikkaus' operations have developed rapidly in recent years. The company has exceeded its financial targets interms of both turnover and earnings and has also strengthened its leading market position. Thesedevelopments have also occurred responsibly, on the basis of Veikkaus' profound customer understanding.

In 2010, the fastest growth was seen in Internet games (+26.0%). Transactions at retailers' points-of-sale alsofurther increased (+3.6%). In the in-store sales channel, large grocery stores in particular rapidly increased theirshare of total game sales.

Lotto games continued to drive Veikkaus' brisk sales. The additional prize tiers - LottoPlus and VikingPlus -combined with huge, record-breaking jackpots lent wings to their popularity in 2010.

The amended Lotteries Act was the most significant change in the gaming market during 2010. The newlegislation came into force at the beginning of October. It included new restrictions on marketing and an agelimit of 18 years.

Customer understanding

Many players, moderate stakesIn line with Veikkaus' updated business strategy, which was updated last year, the company is developing itsgames, services and offering with an even more customer-oriented approach. This customer-oriented approachis already part of everyday life at Veikkaus, as we have been developing our strategy on this premise since2004. A good understanding of customers, games and the gaming environment is vital for Veikkaus' operations.The number of registered players has been rising continually and Veikkaus customers are, therefore, morefrequently engaging in identified gaming.

Finns are familiar with Veikkaus games and close to 90% of adult Finns have played a Veikkaus game at somepoint during their lives. In 2010, almost 79% of adults had played at least once during the year and 45% hadplayed at least once a week (Atlas study, 1-6/2010).

There are many players, but they place moderate stakes: in 2010, Finns spent an average of EUR 318 perperson on Veikkaus games. Veikkaus' game system logged a total of about 294 million game transactionsduring 2010.

Gaming is not only a question of money. Veikkaus wants to offer Finns a broad-ranging and enjoyable gamingexperience: a little bit of excitement, an opportunity to test your own knowledge, and the chance to dream.

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Customers benefit from registrationVeikkaus' customer relations are based on registration. Customers can engage in identified gaming throughVeikkaus' Internet and mobile phone services, or by using their Veikkaus Cards at points-of-sale. Identifiedgaming is of concrete benefit to customers, as winnings are paid directly and risk-free into their personalaccounts.

By registering, customers also gain access to useful tools for monitoring their own gaming and game history.Veikkaus' customer loyalty programme, which contains a broad range of perks, also provides Veikkaus Cardholders with concrete benefits.

Veikkaus' business strategy seeks to provide the best possible service to different types of players bydeveloping the product range and all of the gaming channels to meet the players' individualexpectations.Veikkaus promises a diverse game offering that offers dreams, excitement and enjoyment, whilealso being unquestionably reliable and responsible.

One of Veikkaus' key customer relations targets of 2010 was to increase the proportion of identified gaming.We achieved this goal, as identified gaming accounted for about 44% of total sales in 2010 (38% in 2009).

By the end of 2010, Veikkaus had a total of over 1,223,000 registered customers, representing growth of 13.6%on the previous year (1,077,000 in 2009). Almost 967,000 of these players owned a Veikkaus Card. The reasonwhy some registered customers do not have a Veikkaus Card is that Veikkaus launched Internet gaming, whichrequires registration, back in 1997, while the Veikkaus Card, which enables identified gaming at points-of-sale,was only launched in 2006. Nowadays, all newly registered customers receive a Veikkaus Card.

During 2010, Veikkaus conducted two extensive customer satisfaction surveys, which also analysed VeikkausCard acquisition and asked for customers' opinions on jackpots and our direct communication. In the October

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survey, Veikkaus customers' overall satisfaction with the company and its services was at a good level. Over90% of respondents to both surveys were either very or quite satisfied with Veikkaus.

The October customer satisfaction survey was influenced by the revamped website, which was launched inSeptember. When asked, ‘How satisfied are you with the veikkaus.fi website as a whole?', 62% of respondentsstated that they were either very or quite satisfied. Young people and young adults were more satisfied thanother age groups. Reasons for dissatisfaction included unfamiliarity with the new website and the fact thatcertain functions were either unreliable or did not function properly on all browsers. On the basis of thefeedback received, Veikkaus began to implement high-quality solutions to these problems as quickly aspossible. The next customer satisfaction survey will be conducted in spring 2011, and this will show whether wehave succeeded in returning customer satisfaction to an excellent level.

Active communication with registered customersDuring 2010, Veikkaus increased the amount of targeted customer relations communication with registeredplayers, providing news on Veikkaus games and information on promotions and benefits. Veikkaus exercisesjudgement when targeting its direct marketing to registered players, paying close attention to responsibility andthe use of customer data. Those registered customers who have given Veikkaus permission to contact themreceive direct marketing communications via e-mail, mobile phone and post. A total of about 13 millionmessages were sent in 2010.

CRM communications 2010:

1. E-mail: total number of messages sent approx. 7,980,0002. Mobile messages: total number of messages sent approx. 1,810,0003. Post: total number of messages sent approx. 876,000

Veikkaus' customer magazine X also played an important role in communications during 2010. X is mailed to allVeikkaus Card holder households, unless customers have specifically opted out of receiving the magazine.

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A diverse customer loyalty programmeVeikkaus' customer loyalty programme is an essential aspect of itscustomer-oriented strategy. It seeks customer commitment andcommunicates Veikkaus' importance to society.

Veikkaus has a diverse customer loyalty programme that includesMonthly Draws, Weekly Draws, Wild Card draws, Free AdmissionBenefits and Discount Benefits, as well as Surprise Draws, whichwere held three times in 2010. The Surprise Draw prizes were VIPtickets to Veikkaus' customer events, a U2 concert and a trip to theFormula One Monaco Grand Prix - and, towards the end of theyear, a summer cottage holiday in July 2011. A total of 85 separatedraws were held.

The first Veikkaus festival was held in Kaisaniemi, Helsinki inhonour of Veikkaus' 70th anniversary. Veikkaus Card holders wereable to enter a draw for a total of 5,000 avec tickets to the event.

Immense growth in draw participationVeikkaus' range of monthly offers has something to appeal to many of Veikkaus' target groups and the offersare widely available throughout Finland. In 2010, a total of almost 900,000 customers took part in Veikkaus'various registered customer draws, which is more than double the number in 2009 (380,000).

Developing our customer loyalty programme has generated results: in a loyal customer barometer conducted inNovember, Veikkaus' programme rose to second place among Finland's best-known customer loyaltyprogrammes.

Recognition for Veikkaus' customer loyalty programmeIn November, the Loyal Customer Forum chose Veikkaus' programme as customer loyalty programme of theyear 2010. The choice was based on an annual customer loyalty barometer, which measures customersatisfaction with companies' loyalty programmes. Veikkaus was considered to have achieved great success inits operating environment, in which the objectives and customer benefits of loyalty programmes must followstrict principles with regard to gaming control. Many benchmarks indicate that Veikkaus' programme is one ofthe leading loyalty and benefit programmes.

Winning customer loyalty programme of the year 2010 is also a reward for our long-term development efforts.Planning for our customer loyalty programme began back in 2004 and culminated in the launch of the VeikkausCard in 2006 and the customer loyalty programme in 2007.

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Customer service

Smooth customer serviceSince Veikkaus games involve hundreds of thousands of transactions every day, fast, up-to-date services forplaying games, finding out results and receiving prize payouts are essential. Good service at Veikkaus'approximately 3,200 points-of-sale also plays a key role in solving problems and ensuring smooth salestransactions.

Veikkaus' customer service line provides advice to both customers and games sale clerks, and is availableduring the game system's opening hours, from 6 a.m. to midnight, seven days a week. Every month, the serviceline takes an average of just under 16,500 calls from customers and 12,000 from games sale clerks. Onaverage, Veikkaus' advisors contacted customers and games sale clerks about 2,700 times a month. Theaverage annual response rate for all of the line's services (customer service, support service and sales support)stands at about 74%.

Good customer feedbackIn recent years, Veikkaus' service line has received extremely positive feedback on its service-mindedness andaccessibility. In a telephone interview survey conducted by TNS Gallup in 2010, Veikkaus' customer servicereceived a grade of 3.6 on a scale of 1-4 (3.8 in 2009). Its support services for sales and games sale clerks alsoscored 3.6 (3.7 for support services in 2009). Sales clerks, customers and professional evaluators all rateVeikkaus' service line as one of the best in Finland.

Our responsibilities to our customers

An offering that meets customers' expectationsIf Veikkaus is to succeed, it's vital that our offering meets customers' expectations. Offering the best possiblerange of games, which have been responsibly developed using a customer-oriented approach, will ensure thatVeikkaus games continue to appeal to Finns.

Alongside customer expertise, responsible gaming operations also involve pre-emptive steps to prevent thedrawbacks of gaming. A safe gaming environment has both restrictions and a variety of tools to help playerscontrol their gaming. Age limits are an example of these restrictions.

The amended Lotteries Act, which came into force at the beginning of October 2010, included marketingrestrictions and a new age limit for gambling (18 years). Veikkaus pre-empted the new legislation by introducingan age limit of 18 for all of its games back in June 2009. Internet sales channels already had an age limit of 18.Age limits seek to prevent children and youth from the potential side effects of gaming.

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The new marketing restrictions ban the advertising of harmful games and the provision of illegal gamblinggames. These restrictions mean that Veikkaus has, for example, stopped product advertisements for bettinggames and eInstants. Only product information can be given for these games.

Privacy protection highly valuedPrivacy protection and its development are of primary importance as the number of registered players and theamount of customer data increases. Veikkaus uses the information contained in its consumer-customer registerin accordance with the Finnish Personal Data Act. The privacy protection section on Veikkaus' web pageincludes information on how customer information is used and how personal data is stored. When developingour customer relations, we respect our customers' wishes and opinions above all else.

Veikkaus has its own Privacy Policy Team whose task it is to develop and coordinate data protection issues.Veikkaus develops its operating procedures according to the guidelines issued by the Data ProtectionOmbudsman. The team consists of experts from different functions and units.

A versatile set of tools for controlling gamingIn order to have enjoyable gaming experiences, players must remain in control of their gaming. If desired,Veikkaus' Internet players can set themselves daily, weekly or monthly limits in euros. In 2010, Veikkausexpanded the range of restrictions available on its website. Players can now choose to restrict access to theiraccounts for the rest of the day, week, month or year.

During December 2010, over 7,600 Internet players had set themselves a voluntary gaming restriction. In 2010,over 900 players set a total of over 2,000 daily restrictions. Almost 3,000 customers took advantage of theweekly, monthly or yearly restrictions during 2010. The website overhaul has increased registered players'awareness of the gaming restrictions available, as the Game Pause button now appears on players' homepages.

Internet gaming increases in popularityIn September 2010, Veikkaus launched its revamped Internet gaming service. The service's popularitycontinued to rise in 2010, as more and more customers are using the Internet service to play Veikkaus games.About 16,400 Finns registered as customers every month and an average of over 286,000 players used theInternet service every week (231,000 in 2009). In 2010, veikkaus.fi was Finland's largest online store with aturnover of EUR 445 million. Internet gaming turnover rose by 25% on 2009.

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Veikkaus active in social mediaSocial media are becoming an ever more significant aspect of customer and marketing communications everyyear. Veikkaus has begun systematic use of the Facebook and Twitter channels that were opened in 2009. Lastyear, Veikkaus established a social media strategy group whose task it is to create working methods tomaintain an active presence in social media. In 2010, Veikkaus harnessed the potential of social media to takea more expansive and more coordinated view of marketing, communications and customer services. Readmore in the digital channels section.

Marketing and communicationsIn the Brand Valuation 2010 survey conducted by Taloustutkimus and the magazine Markkinointi & Mainonta,Veikkaus' most respected brands were Veikkaus and Lotto. Out of the 1,125 brands evaluated, Lotto wasranked 159th and Veikkaus 204th.

During 2010, Veikkaus spent EUR 14.7 million on product advertising, which represents 0.9 per cent of thecompany's turnover. Social responsibility is at the heart of Veikkaus' marketing communications: marketingrespects consumers' personal freedom and does not glorify or encourage large-scale consumption. Veikkaus'marketing communications are not targeted at people under 18 or consumer groups that are consideredparticularly vulnerable due to their social status or other characteristics.

A higher standard of communications year after yearVeikkaus openly provides information about the company, its products and any changes that are occurring. Thecompany engages in proactive, up-to-date communication with customers and media representatives. Gamingis based on chance and results can never be known in advance. Veikkaus' marketing and othercommunications openly provide information about our games and do not contain any misleading notions.

In a corporate communications survey of journalists conducted by Taloustutkimus in spring 2010, Veikkaus'communications received a grade of 8.24, which was the highest grade of any major company. Out of the 236organisations, public services, associations and companies included in the study, Veikkaus finished in second

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place after the Finnish Meteorological Institute. Veikkaus has achieved a higher standard of communicationsyear after year: our grade was 8.15 in 2009 and 8.07 in 2008.

RGame concepts are ethically evaluatedWhen beginning the development of a new product, Veikkaus immediately considers how to prevent thedrawbacks of gambling. Veikkaus and Finland's Slot Machine Association have worked together to develop theResponsibility Evaluatior Tool (RaVa) to ethically evaluate games. This tool is used to evaluate new gameconcepts and overhauls to existing games from the perspective of gambling addiction.

The Responsibility Evaluatior Tool consists of nine elements, each containing detailed questions to measureany features of a new game concept that could potentially feed gambling addiction. The results are then used tosuggest changes and issue cautions. Potential restrictions may also be suggested for a game or its marketing.A total of 14 responsibility evaluations were carried out during 2010.

The nine elements of the Responsibility Evaluatior Tool:

1. game elements2. the risk of financial loss3. winning and stake structure4. the role played by skill, knowledge, chance and rules5. how tempting is the game and its environment?6. additional temptations7. social characteristics8. availability9. marketing

Veikkaus has also developed its own battery of questions to evaluate service concepts and distributionchannels. These questions have been derived from the elements of the Responsibility Evaluatior Tool.

Using the Responsibility Evaluatior Tool ensures that all of the games launched by Veikkaus are responsibleand ethically conscious.

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Games

Lotto games drive growthLotto games were strong growth drivers in 2010. The introduction of additional prize tiers (LottoPlus andVikingPlus) had a significant impact on their popularity. The total sales of additional prize tiers amounted toEUR 82.6 million.

Lotto is a game of big dreams. There were several record-breaking Lotto jackpots in honour of Veikkaus' 70thanniversary. In January, an Internet player from Kotka filled out a lotto row worth EUR 7.0 million. September'sEUR 7.2 million jackpot went to Kalajoki, while shouts of delight echoed around Kangasniemi after December'sEUR 7.3 million jackpot was drawn. A total of EUR 468.9 million (-1.4%) was played on Lotto.

A large Lucky Numbers jackpot, which reached a high of EUR 15 million, fuelled the increased turnover ofViking Lotto (+17.0%) for many weeks early in the year. Joker was reformed in late 2009, which increased theturnover of Wednesday and Saturday Joker to a total of EUR 98.3 million (+17.3%) during the financial year.

The turnover of Keno, Veikkaus' second most popular game, rose to EUR 346.5 million (+4.2%). The revampedeInstants were also highly successful and their full-year sales volume rose to EUR 34.6 million (+31.8%).

Two new games - eBingo and Syke - were introduced as part of the Internet overhaul in September. Thepopularity of eBingo in particular exceeded initial expectations. Over EUR 1 million a week was played oneBingo, and its turnover totalled EUR 19.7 million by the end of the year.

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Strong growth in sports games was evident in Fixed Odds Betting (+12.6%) in particular. A wider range ofevents, higher payout percentages and the summer's 2010 FIFA World Cup increased the turnover of the mostpopular betting games.

Record-breaking number of wins fuelled by KenoPlayers enjoyed a record-breaking number of wins in 2010. Players received a total of EUR 888.0 million(+12.2%) in prizes. Veikkaus paid out over 200,000 prizes to lucky winners every day.

History was made in November when Keno players were paid a total of EUR 10.2 million in prizes on a singleday. This was ten times the euro sum of the stakes played.

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Sales channels

Investments in both in-store and InternetchannelsVeikkaus invests in both retail sales and Internet gaming. During 2010, Veikkaus launched numerousdevelopment projects aimed at boosting retailers' sales. The current revolution in the retail trade is reflected inVeikkaus' retail sales, and the structure of its sales network is also keeping pace with the changes.

Veikkaus' Internet gaming service was completely overhauled in August, and Veikkaus introduced several newgames specifically designed for the Internet. The revamp sought to improve contact with customer groups whoplayed infrequently and to offer safe gaming options for young adults. Internet gaming increased in popularitywithin the desired target groups and, for example, the proportion of women using the service grew significantly.

Veikkaus' sales network offers servicesthroughout FinlandVeikkaus' sales network offers comprehensive gaming services throughout Finland. Retail outlets account forabout 73.6% of Veikkaus' sales. In 2010, retail sales grew by 3.6% (over EUR 40 million) and turnover reachedover EUR 1.240 billion.

At the end of the year, the number of retailers stood at just over 3,200. Points-of-sale receive an averagecommission of 6.8%* on sales of Veikkaus games. In 2010, Veikkaus paid retailers a total of EUR 85.1 million.

About 300 new retail outlets were opened and180 closed and about 240 changed ownership. Retail outlets soldVeikkaus games worth an average of about EUR 8,000 per week.

* The commission percentage has been calculated from retailers' turnover.

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Retail sales grow and developVeikkaus is developing its products and services, and seeks continued retail sales growth. Last year, Veikkauslaunched numerous development projects aimed at boosting retailers' sales. Projects completed during 2010included a competiveness plan for retailers, which seeks to prepare Veikkaus for future challenges andchanges in the competitive field.

The revolution in the retail industry was reflected in Veikkaus' retail sales, and the structure of its sales networkhas kept, and will continue to keep, pace with the changes. Grocery stores and hypermarkets strengthenedtheir market shares, while the number of smaller kiosks and convenience stores continued to decline. A changein opening hours has also influenced people's weekly shopping habits and consumers are increasingly takingadvantage of Sunday opening. Changes in consumers' weekly rhythms can also be seen in daily sales ofVeikkaus games.

In February, Veikkaus increased the opening hours of its game system by several hours - the system opens at6 a.m. and closes at midnight. The new opening hours mainly influenced Internet sales, but service stations andsmall shops with longer opening hours now also have the opportunity to sell Veikkaus games during thoseadditional hours.

The amended Lotteries Act brings changes to retail outletsThe amended Lotteries Act, which came into force on 1 October 2010, brought two changes: 18 years becamethe legal age for gambling and new marketing policies were introduced.

The 18-year age limit posed no problem for Veikkaus, as the company had voluntarily introduced this age limitback in 2009, on 1 June. Retail outlets and sales clerks were therefore already partly trained in the newlegislation.

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The Lotteries Act also defined new policies and restrictions on the marketing of games. Veikkaus' retailers areonly allowed to provide product information for the betting games they sell, and only Veikkaus can market itsgames. All marketing carried out by retailers and retail outlets must be coordinated by Veikkaus and approvedin advance.

During 2010, particular attention was paid to ensuring that retail outlets complied with the 18-year age limit andthe new marketing policies. In addition to the continual supervision of retail outlets, 150 retail outlet audits wereconducted in 2010. The results indicated that retail outlets followed Veikkaus' guidelines closely with regard toboth checking players' ages and marketing games.

Training ensures professional skills for salesclerksAn estimated 15,000 game sales clerks work at Veikkaus' points-of-sale, and they play an important role incustomer contacts. Veikkaus organises free training to ensure professional skills for sales clerks. In addition togame and sales information, the training also covers responsibility issues such as problem gambling.Responsible gaming is also regularly addressed in Veikkaus' professional newsletters to retailers. In 2010,Veikkaus' trainers organised 504 training events, which were attended by over 6,800 participants. Our ‘BoostYour Veikkaus Sales' events, which covered new products and services, were incredibly popular. Over 2,000participants attended these events alone. The Veikkaus Day Cruise was another significant event that gatheredtogether game sales professionals from all around Finland.

The ‘Learning to be a Game Sales Clerk' online course, which was launched in October 2009, has earned itsplace in Veikkaus' training offering. The course offers an alternative to Veikkaus' basic training. 1,900 clerkscompleted the online course in 2010. A further thousand clerks have also gone through the course to revisetheir training or update their expertise.

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Communications to retailers and sales clerks areunder continual developmentIn September, Veikkaus' professional newsletter to retailers and game sales clerks got both a new name and anew look and feel. Veikkaus News comes out about 16 times a year. It's mailed directly to retail outlets and isalso sent by e-mail to Veikkaus' most important stakeholders and partners.

In September 2010, Veikkaus launched a project to overhaul and develop its Internet services for sales clerks.Myynet will undergo developments during 2011, so that it can better support retailers and games sales clerks intheir work.

First-rate feedback from the fieldThe Retailer Barometer was conducted four times during 2010. Retailers and sales clerks were asked for theiropinions on, for example, Veikkaus' services, communications, training and marketing materials.

The year's final barometer indicated that cooperation between Veikkaus and retail outlets had developedfavourably. Respondents were most satisfied with Veikkaus' training services and communications. Most salesclerks also reacted favourably to enquiries about the Veikkaus Card, and marketing materials were consideredsupportive of their work.

In September 2010, Veikkaus launched a project to overhaul and develop its Internet services for sales clerks.Myynet will undergo developments during 2011, so that it can better support retailers and games sales clerks intheir work.

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Internet gaming increases in popularity yearafter yearVeikkaus' Internet gaming channel is increasing in popularity every year. In 2010, the Internet service's turnoverwas up by 24.6% on 2009. The most popular game on Veikkaus.fi was Lotto, whose sales totalled EUR 98.9million. Fixed Odds Betting came in second place after its sales accelerated to EUR 77 million in 2010. Kenotook the bronze medal with sales of EUR 73.9 million.

2010 - a year of renewalVeikkaus completely overhauled its Internet gaming service in 2010. The website revamp, which was launchedin September, provided customers a new kind of Internet service aimed at offering all the fun of the Internet.

Veikkaus.fi's most prominent new feature was its completely new look and feel. The revamp created a gamingservice that will encourage customers not only to renew their games, but also to spend more time enjoying thesite's interesting content and exciting games.

Internet gaming turnover by game category 2010

EUR million change, %

Draw games (including Lotto games, Jokers and Keno) 221 23.2

Game Room games 56 112.0

Sports games: Betting 132 14.6

Sports games: Veikkaus games 36 2.4

Total 445 24.9

New Internet games: Syke and eBingoThe revamp's greatest investments were made in the new Game Room section, which contains two games thatcan only be played online: eBingo * and Syke *.

Syke boasts a brand new feature: an entertaining depiction of the draw. The results of the draw are shown asan animation in which balls compete against one another on a track. Six balls make it to the finish, and the lastone across the line defines the correct letter. Syke generated turnover of EUR 1.8 million in 2010.

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eBingo contains brand new social elements, as it enables players to chat with the host and other players duringthe game. The chat feature seeks to increase players' enjoyment of the game, and Veikkaus intends tocontinue developing eBingo products by, for example, inviting chat guests to entertain players. eBingo'sturnover totalled EUR 19 million during its launch year.

The high-speed game Live Betting was overhauled and now offers considerably more sports-based webcasts.The number of Live Betting webcast events will be further increased in 2011.

* eBingo is a number draw game. Players participate using coupons that contain three grids. In simple terms,the idea of the game is to be the first player to cross off one full horizontal row, two horizontal rows, threehorizontal rows, four horizontal rows or a Full House.

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* Syke is a number-based game that is drawn once an hour. Players choose six numbers (from 1–16) and oneletter (S, Y, K, E). Each round closes 7 minutes before the draw animation is shown.

A digital presence in social media2010 was a year of development in social media. Veikkaus established a social media strategy group whosetask is to create working methods for social media processes. Veikkaus opened its Facebook and Twitterchannels in 2009, and Veikkaus already had over 14,555 fans by the end of 2010. These channels haveboosted Veikkaus' digital presence by offering the chance to highlight customer service, marketingcommunications and Veikkaus' customer relations.

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Social media channels were also developed for internal use: a communal wiki-database was set up forVeikkaus' advisory unit. Every customer service employee can now enter information that they believe will be ofassistance to their colleagues. The changes brought about by social media have also been addressed in awider context; in the early spring, Veikkaus published ground rules for personnel using social media.

Ground rules:

@veikkaus.fi is a work address.

• Do not use your work address in forums.• When you use your work address, you represent Veikkaus.

Think before you publish.

• Things you write on the Internet may gain greater exposure than you initially intended.• Don't publish anything that is insulting, illegal or confidential, and do not reveal business secrets.

Be open.

• If you want to take part in an online discussion about Veikkaus, do so honestly and openly.• Veikkaus will be participating in online discussions. Veikkaus will choose and personally appoint its official

representatives.

A Veikkaus app for smart phonesIn 2010, Veikkaus also introduced new features for mobile phones, such as the Veikkaus app for Apple iPhoneand Nokia smart phones.

The applications contain:

• game results, upcoming jackpots, the ability to play on the mobile site• Veikkaus Card perks• loyal customer draws and registration• game news

The app seeks to offer a new kind of service experience by harnessing smart phone technology, such as touchscreens. One special feature of the iPhone app, for example, is the ability to run your own lottery machine.Android smart phones will also get their own Veikkaus app in 2011.

About 12,000 iPhone apps were downloaded, while a good 18,000 downloads were made through Nokia's OviStore.

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Market review

Growth in Internet gaming labels the 2010gaming marketIn 2010, the Finnish gaming market increased by 6.1% to a total value of EUR 2,557 million. The fastest growthwas in Internet gaming: 21% on 2009. Internet gaming grew at a faster rate than had been expected. Theexpansion of Veikkaus’ Internet offering in autumn 2010 did not affect demand for Internet games.

Point-of-sale gaming transactions also continued to increase. The growth rate remained at the same level as in2009, that is, 3.6%. In the in-store sales channel, large grocery stores in particular rapidly increased their shareof total game sales.

New customer groups go onlineThe launch of Veikkaus’ new Internet games sought responsible growth. Veikkaus wanted to improve contactwith customer groups who played infrequently and to offer safe gaming options for young adults.

Internet gaming increased in popularity within the desired target groups and, for example, the proportion ofwomen using the service grew significantly. Identified gaming increased by 5.7% and already accounts for43.7% of total sales.

Amended Lotteries Act comes into forceThe amended Lotteries Act, which came into force at the beginning of October, constituted the most significantchange in the gaming market during 2010. New regulations include marketing restrictions and a minimum agelimit of 18 years. A new offence, the gaming offence, was added to the Criminal Code and carries a moresevere penalty than the lottery offence.

The new marketing restrictions govern all gaming operations. These forbid the marketing of some existinggames and all those provided without a gaming licence. As far as Veikkaus is concerned, the restrictions meanthat we can no longer market betting games and eInstants – only product information can be supplied. At thebeginning of October, Veikkaus published its own marketing policies to supplement existing ethical marketingguidelines.

In the autumn, the Finnish State sent a declaration to the European Commission regarding the second stage ofthe Lotteries Act. The second stage will, for example, create a legal monopoly and regulate the inspection ofwork distribution between lottery companies operating under licence. Malta issued a detailed statement on thedeclaration and the Commission issued a warning on the legal monopoly model that Finland is proposing for thegaming industry.

In spite of the statements made on the declaration, a legal monopoly will come into force in Finland at thebeginning of 2012. This will change Veikkaus’ status in the gaming market. Legal monopoly status will inevitablybring stricter regulations and operational limitations that could weaken Veikkaus’ position and long-term abilityto operate.

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Strong winds of change in EuropeEuropean countries follow a variety of different gaming regulation practices. Many countries are also in theprocess of amending legislation and are seeking an appropriate model for their market. The EuropeanCommission is also preparing a Green paper on gaming. The paper is expected to be submitted for comment in2011, after which the Commission will consider which follow-up measures it will undertake on the basis of thestatements.

The prevailing model for lotto games is based on an exclusive right system, either a State monopoly or licence-based exclusive right system. For other games, the general trend is a move towards an open market system.The UK, Italy, France, Spain and Denmark have for example, either already opened up their gaming markets orare in the process of doing so. Only a few member states still operate on an exclusive right system for bettinggames.

There is a strong legislative trend towards more open systems in Europe.

Future outlook

Favourable financial trends are expected tocontinueVeikkaus’ operations have developed rapidly in recent years. The company has exceeded its financial targets interms of both turnover and earnings. This growth has also been achieved responsibly and the company hasstrengthened its leading market position.

In spite of the changes occurring in Veikkaus’ operating environment, the company’s favourable financial trendsare expected to continue in 2011. Fairly rapid growth is expected to continue in Internet gaming in particular,and other gaming is also forecast to increase. Although the second stage of the amended Lotteries Act willforce Veikkaus to give up games based on equestrian events, this change will not have a significant impact onthe company’s business.

The European gaming market is undergoing a revolution that is characterised by legislative amendments inmany countries, considerable investments in business development by industry players, and the formation oflarger-than-ever commercial alliances in the gaming market. In addition to traditional lotteries, global gamesystem operators and major media groups in particular are driving change in the corporate field.

Veikkaus’ ambition is to take an active part in this revolution at an early stage in order to ensure that thecompany retains its solid position in the future. Veikkaus’ potential to keep up with developments in the gamingmarket will be decided by Finnish legislation, which should ensure that Finnish companies are able to continueoperating in changing international markets.

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2010 In 2010, Veikkaus spent over EUR 3.8 million (+6.6%) on measures to support andpromote responsible gaming. Veikkaus employs these measures to promoteresponsible gaming both in its own operations and in cooperation with stakeholders.The total expenses also include Veikkaus’ share of the expenses incurred by theMinistry of Social Affairs and Health’s research into the detrimental effects of gamingand the Peluuri helpline for problem gamblers and their relatives. These expensestotalled EUR 793,000.

RESPONSIBLE PLAYER

Responsibility is the foundation for everythingwe doVeikkaus wants to offer its customers an enjoyable and responsible range of games, that is, to meet itscustomers’ expectations while minimising the drawbacks of gaming. The company seeks steady, profitablegrowth that safeguards its beneficiaries’ long-term ability to operate.

The principles that govern Veikkaus’ exclusive right to operate are supplemented by the company’s own policyof promoting responsible gaming. We must earn a responsible corporate image in order to achieve ourbusiness targets.

Successful operations can only be based on an extensive customer base and the general acceptance ofgambling. Veikkaus employs a broad range of methods to prevent problem gambling.Gaming is restricted andplayers are offered tools to control their gaming.

The Executive Team is responsible for defining the focal points of Veikkaus’ corporate social responsibility.During 2010, we defined our CSR policies and their importance to the company’s success. The OperativeExecutive Team has also defined a number of responsibility sub-categories and their importance to both thecompany and stakeholders.

Promoting responsibility is the duty of every Veikkaus employeeThe communications and CSR function is responsible for coordinating practical CSR measures. Twoemployees work full-time on promoting responsibility. All of Veikkaus’ functions are committed to CSR and eachfunction’s experts ensure that CSR measures are put into practice. Promoting responsibility is part of everyVeikkaus employee’s work.

The diagram below shows Veikkaus’ assessment of various CSR issues from the perspective of bothstakeholders and the company. It describes Veikkaus’ central CSR themes and topics. This diagram forms thestructural basis of Veikkaus’ CSR and defines the CSR Report’s focal areas.

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Assesment of various CSR issues

Stakeholder cooperation

Open dialogue with stakeholdersVeikkaus seeks open dialogue in discussions and cooperation with all of its stakeholders. It’s important that weknow and understand our stakeholders’ expectations. In addition to providing information, we also havediscussions, answer questions, take part in seminars and meet with stakeholders. Last year, we also becameactive in social media.

We want to engage in regular, proactive dialogue with stakeholder representatives. An understanding of ourstakeholders and their expectations, and their confidence in Veikkaus and its operations, are necessary for oursuccess.

New stakeholder events

In honour of Veikkaus’ 70th anniversary, we organised the first Veikkaus Festival and an Open Doors event forlocal organisations. Certain customer groups had the chance to participate in both events. At the beginning ofJune, almost 6,000 Veikkaus Card holders attended the Veikkaus Festival in Kaisaniemi, Helsinki after winningfree tickets in our prize draw.

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The Open Doors event was attended by about 150 representatives from local organisations. Veikkaus invitedlocal residents, company representatives and decision-makers from the City of Vantaa to visit the Veikkaushead office. Veikkaus employees led guided tours that covered the company’s history, operations and theimportance of CSR.

Dialogue and extensive contact

In 2009, Veikkaus invited all of its stakeholder representatives to respond to an online interview entitled, ‘Whatdo you expect from Veikkaus in the future?’ In just over two weeks, a total of more than 5,200 customers,Veikkaus game sales clerks, media representatives, political decision-makers, authorities, partners incooperation, beneficiaries and personnel representatives had responded. We gleaned a total of 9,300 ideasand expectations from these responses. The results of this extensive online interview were used to restructureour view of the company’s stakeholders. We also used the results and feedback obtained during 2010 to updateand supplement our stakeholder descriptions.

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See how Veikkaus works with stakeholders in traditional table format ›

Working with stakeholders

CUSTOMERS

All players of Veikkaus games

Their expectations

• Open and reliableoperations

• Appealing games, aharmless pastime,and a little excitementto spice up everydaylife

• A Finnish gameoperator

• Profit goes to a broadrange of beneficiaries

Veikkaus’ way ofworking

• Making proactive useof customer data andfeedback

• Customer service andadvice line

• Loyal customermagazine, X

• A responsible andappealing range ofgames

• Increasing theproportion ofidentified gaming

• Reliable prize payouts

Achievements 2010

• Veikkaus.fi overhauled to meetcustomers’ wishes

• According to the customer satisfactionsurvey and loyal customer barometer,customer satisfaction is at a good level

• The number of registered customersrose to over 1.2 million and the numberof Veikkaus card holders to almost amillion

• The development of online tools forcontrolling gaming; introduction of, forexample, the gaming habit test

• Veikkaus Festival was held• An Open Doors afternoon for

representatives of local organisationswas arranged at the Vantaa head office

BENEFICIARIES

All the Finns who benefit from Veikkaus’ profits

Their expectations

• Steady income forbeneficiaries,guaranteed continuity

• Proactivecommunications

• Cooperation

Veikkaus’ way ofworking

• Stable profit growthensures thatbeneficiaries cancontinue operating

• Regular contact• Game event and

marketingcooperation with

Achievements 2010

• Veikkaus’ earnings rose by 7.5%• A survey of associations was

conducted among sports beneficiaries• Unique cooperation with the Finnish

cinema industry• Visibility in major sport events in

Finland

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associations, clubs,leagues and divisions

POLITICAL DECISION-MAKERS

Parliament, Government, European Parliament and European Commission

Their expectations

• Retaining exclusiveright status

• Responsible gamingpolicies

• Finnishness• Sustainable income

for society• Openness and

reliability• Preventing crime and

fraud

Veikkaus’ way ofworking

• Regular meetings• The Annual General

Meeting• The Supervisory

Board• Quarterly financial

reports• CSR and Annual

Reports

Achievements 2010

• Veikkaus was well ranked in bothnational and international industrycomparisons and was, for example, themost profitable lottery per capita

MINISTRIES AND AUTHORITIES

The Ministry of Education and Culture (Veikkaus’ shareholder), the Ministry of the Interior, The NationalPolice Board*, official State supervisors, the Ministry of Social Affairs and Health, National Institute forHealth and Welfare

Their expectations

• Controlled,sustainable andguaranteed profitgrowth

• Responsible gamingoperations

• Preventing socialproblems

• Preventing crime andfraud

Veikkaus’ way ofworking

• Regular contact• Quarterly financial

reports• CSR and Annual

Reports

Achievements 2010

• New games launched and existinggames revamped

• Completely revamped website,Veikkaus.fi, launched; includes aseparate Game Room for high-speedgames

MEDIA

National, regional and local media; print, radio, TV and social media

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Their expectations

• Rapid, opencommunications

• Social responsibilityand reliability

• Accessibility• Game proceeds play

a key role in Finnishsociety

Veikkaus’ way ofworking

• Press releases andthe publication ofprize winnings

• Regular meetingswith the media

• One-on-one meetingswith reporters

• Media follow-up

Achievements 2010

• Communications survey of mediarepresentatives generated excellentfeedback

• Veikkaus became active on Facebook• The effectiveness of media

communications is regular monitored

PARTNERS IN COOPERATION

Subcontractors, IT partners, media, advertising and communications agencies, retail chains, sportsfederations and associations, the Peluuri helpline

Their expectations

• An innovative,diverse andresponsible range ofgames

• An open, reliable andlong-term relationship

Veikkaus’ way ofworking

• Long-term contractsand partnerships

• Centralisedprocurements

Achievements 2010

• Updated contracts

RETAILERS AND GAMES SALES CLERKS

Retailers in contractual relationships with Veikkaus, game sales clerks

Their expectations

• A good source ofincome

• Wide range of games• Customer service• Sales support• Proactive

communications• Information about

beneficiaries

Veikkaus’ way ofworking

• Successful salessupport throughcommunication andtraining

• The game systemand its salesterminals operatesmoothly

• Continual learningand training

Achievements 2010

• Customer barometer implemented• Training for game sales clerks and the

Internet training programme forretailers were both revised

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PERSONNEL

Veikkaus personnel at head office and regional offices, a total of 364 employees

Their expectations

• Transparency andopen communications

• Equal and impartialtreatment

• Fairness

Veikkaus’ way ofworking

• An outstandingworkplace

• Personnel surveys• Individual and group

developmentdiscussions

• Staff Intranet (Innet)• IdeaSampo• Personnel magazine

1X2• News and market

place forums forpersonnel

• Investments intraining anddevelopment for avariety of personnelgroups

Achievements 2010

• Finland’s ‘Great Place to Work’ surveywas conducted

• All of the company’s supervisors tookpart in the ‘Veikkaus Rocks’ trainingprogramme

* As of 1 January 2010, the Ministry of the Interior is responsible for approving game regulations and theNational Police Board is responsible for supervising compliance.

The Ethical Council provides an externalviewpointThe Ethical Council is an expert advisory body appointed by Veikkaus’ Board of Directors. The Council providesVeikkaus’ Board of Directors and operative management with an external perspective on gaming – especiallyethical issues concerning games and their marketing – and also on issues such as gambling addiction.

The Council also suggests concrete solutions for, and issues ethical statements on, practical issues anddebates concerning gaming.

The Ethical Council convened three times in 2010. At its meetings, the Council considered Veikkaus’operational culture, ethical issues concerning Veikkaus’ marketing, responsibility and business policies, theInternet overhaul, and Veikkaus’ participation in social media.

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The Ethical Council began a new two-year term at the beginning of 2011. Veikkaus’ Board of Directorsappointed the new Council, which contained one change. Tuula Tamminen, Professor of Child Psychology,asked to resign from the Council and was replaced by Leena Huovinen, University Chaplain of the Parish Unionof Helsinki.

The members of Veikkaus’ Ethical Council, 2011–2012:

• Olli Alho, Professor, Chairman• Jaana Haapala, Strategy Director, Folk Finland• Ossi Heinänen, Head of the ‘Your Move’ Campaign, Youth Finland Association• Leena Huovinen, University Chaplain of the Parish Union of Helsinki, Chaplain of the Finnish Olympic

Committee• Timo Laitinen, Director General of the State Treasury, Chairman of the Finnish Sports Federation• Sanna-Mari Myllynen, Manager of Human Risk and Work Welfare Service• Matti Rönkä, News Editor, YLE• Matias Åberg, student/reporter

CSR program

Seeking an extensive customer base andmoderate stakesVeikkaus seeks to maintain an extensive customer base whose members place moderate stakes. This willensure that the money played by individual players does not burden their finances.

Veikkaus seeks steady, long-term profit growth.

Veikkaus aims to raise the number of identified gaming transactions by increasing both the number ofregistered Internet players and the use of Veikkaus Cards at retail outlets.

Veikkaus places restrictions on gaming and offers voluntary tools to help players control their gaming(Pelipaussi website in Finnish).

Veikkaus has developed a Responsibility Evaluation Tool (RaVa) and a battery of ethical questions derivedfrom it. These are used to evaluate the responsibility of new game concepts, game overhauls and distributionchannels at a very early stage in the R&D process.

Marketing communications adhere to strict ethical guidelines:

• Advertisements may not give incorrect information or a misleading image of the actual chances of winning.• Veikkaus respects consumers’ personal freedom and avoids marketing that glorifies or encourages

gaming.• Marketing communications are never targeted at consumer groups who are considered to be particularly

vulnerable due their age, social status or any other characteristics.

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2010In a CSR survey conducted in spring 2010, Veikkaus was proven to be one of the mostresponsible Finnish companies. In an evaluation of five different factors and theirapplicability to Veikkaus, Veikkaus received the best grades for reliability.

Read Veikkaus’ ethical guidelines for marketing communications in full (PDF) ›

Veikkaus bears responsibility for problem gambling by creating awareness and providing information at points-of-sale and on its website. The company makes sure that its personnel and game sales clerks know aboutproblem gambling and where people that suffer from itcan seek help. Veikkaus pays a proportion of the runningand development costs of the Peluuri helpline for problem gamblers and their families and friends. Veikkausalso finances the Ministry of Social Affairs and Health’s research into the detrimental effects of gaming.

With its actions, Veikkaus aims to prevent fraud and criminal activity, and assists with anti-money launderingmeasures.

Veikkaus bears environmental responsibility for the company’s operations and requires its partners to do so, aswell.

Promoting Veikkaus’ corporate social responsibility is the duty of every employee. It’s a natural aspect of oureveryday working lives and everything we do.

Responsible lottery

One of the most responsible Finnish companiesIn a CSR survey conducted in spring 2010, Veikkaus was proven to be one of the most responsible Finnishcompanies. In an evaluation of five different factors and their applicability to Veikkaus, Veikkaus received thebest grades for reliability.

According to a survey by Taloustutkimus, four out of five Finns (80%) think that Veikkaus' exclusive right andthe return of its profit to society is a good thing. Up to 97% of respondents thought that it was either important orvery important that gaming income is channelled back to Finns.

In TNS Gallup's survey ‘Corporate reputations and responsibility 2010', which was carried out in October,Veikkaus' responsibility index was the best within its own comparison group (Trade&Services). Veikkaus'strengths were delivery and service reliability, a forward-looking approach, economic responsibility, a goodgrowth outlook, good profitability and competitiveness.

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Responsibility verified by internationalcertificationIn April 2010, Veikkaus received World Lottery Association (WLA) CSR certification and the company achievedthe highest standard (on a scale of 1-4).

In order to achieve the highest standard, the company's compliance with the European Lotteries (EL)responsible gambling standards must be verified by an external organisation. Veikkaus was one of the firstlotteries to acquire EL verification in May 2009.

Responsibility is part of everything we doThe verification process guarantees that all of Veikkaus' actions promote responsible gaming.This means thatthe company considers responsibility in all of its operations, such as marketing, game sales and R&D.

EL requires comprehensive verification by an external organisation every three years. A lighter verification mustbe carried out sometime during this three-year period as an indication of an organisation's commitment tocontinuous development of responsibility. Veikkaus will implement this intermediate verification in spring 2011.

Supervision and cooperation create security andreliabilityGaming has always involved risks, even with highly comprehensive supervision. There is no foolproof methodto prevent criminal attempts in the gaming industry. Veikkaus has noted these risks in both its own operationsand those with its partners.

Stake distribution is closely supervised and sporting events on which bets may be placed are also monitored todetect any potential abnormalities. Veikkaus' own supervision and monitoring systems will be triggered by anygame sales transactions that deviate significantly from the norm.

When it comes to betting on international football fixtures in particular, gaming companies inform each other ifthey notice any exceptional behaviour during matches governed by UEFA (Union of European FootballAssociation) and FIFA (International Federation of Association Football).

A new supervision community, the European Lotteries Monitoring System (ELMS), started up in 2009. TheELMS further strengthens regular cooperation and information exchange between national European gamingorganisations that organise betting on sporting events.

Risk management is integrated into planningprocessesVeikkaus' risk management is a part of its COSO ERM framework for internal control. Risk management hasbeen integrated into operational planning processes to enable regular identification and evaluation of both the

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risks inherent in Veikkaus' business operations and strategic goals and the preparations that have been madefor them.

Responsible parties and risk management measures are assigned to the most significant risks. Thesemeasures are included in the company's action plans, operating models and other processes. Riskmanagement measures are monitored as part of the supervision of operational planning and other internalcontrols.

Management holds responsibilityVeikkaus' Strategic Executive Team is in charge of the company's risk management. The Team is assisted by aspecially appointed Risk Management Group, which develops the company's risk management process,participates in risk identification, coordinates risk evaluation and prioritisation, and ensures that riskmanagement processes run smoothly.

In addition to company-level risk management, the risks associated with financial reporting, Compliance,operative functions and Veikkaus' business are also evaluated as part of the company's routine operations. Thehead of each responsibility area is in charge of conducting these assessments.

Future risksThe most significant risks threatening the company's long-term objectives are uncertainty factors associatedwith legislation, the Finnish national gaming system, ICT functionality and data systems.

Strong consumer protection to guaranteecustomers' rightsFirst-rate consumer protection is an important aspect of well-run gaming operations. Strong consumerprotection guarantees legal protection for customers if problems arise and a customer feels that he or she hasbeen unfairly treated.

Request a recommended decision in ambiguous circumstancesPlayers can seek help from the Ministry of the Interior in ambiguous circumstances concerning prize payouts forVeikkaus games. A total of 44 requests for a recommended decision were handled in 2010 (56 in 2009).

EUR 3,000 daily limitIn order to manage risks, both Internet gaming and point-of-sale transactions are subject to a daily limit of EUR3,000. Once a player has placed stakes of EUR 3,000 during a single day (either in one go or as separatetransactions), the Money Laundering Act dictates that that player must verify his or her identity and the salesclerk must fill out a money laundering report.

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Preventing problem gambling

Preventing problematic gambling requiresawareness of the risksFor the majority of Finns, gambling is predominantly an enjoyable and harmless pastime. However, gamblingalways involves risks that must be managed, and in order to do so, players must be made aware of these risks.

Gambling must never be considered as a source of regular income, nor should gambling jeopardise a player'sfinancial position. It should be a harmless and enjoyable pastime that also includes the chance to win somemoney - ultimately, however, people do play to win.

In principle, there are potentially addictive elements inherent in all forms of gambling. This risk increases asofferings expand and game rhythms accelerate. Players may also overestimate their own skills.In addition tofinancial interests, gaming also has a great entertainment value, and gaming accounts for an ever-increasingpercentage of the entertainment on offer.

The drawbacks of enjoyable gamesAlthough an unquestionable majority of Veikkaus' customers play moderately and with complete control,gaming poses a problem for some players. Gambling always involves risks that must be managed, and in orderto do so, players must be made aware of these risks. A problem gambler can be defined as someone whosegaming causes financial, social or health-related problems (to either him/herself or family and friends).

A big-time player is not necessarily a problem gambler. Many so-called big-time players manage their gaming inrelation to their personal ‘game wallet' without endangering their financial position. Gaming also involves strongfinancial interests - and these can also lead to the risk of abuse, fraud and organised crime.

Gaming is only enjoyable when you're in controlIn order to have enjoyable gaming experiences, players must remain in control of their gaming. Veikkaus paysparticular attention to the detrimental social effects of gaming by placing restrictions on gaming and offeringcustomers optional tools for self-management.

Veikkaus' restrictions on gaming• The age limit for all Veikkaus games is 18 years - both on the Internet and at points-of-sale• Gaming is not possible during the night (opening hours Mon-Sun, 6 a.m. to midnight)• Games cannot be sold on credit (Lotteries Act §10)• Customers can only register one account• Accounts have a maximum balance of EUR 5,000• eInstants, eBingo and Syke are subject to a daily limit of EUR 100 (irrespective of winnings)• Live Betting is subject to a daily limit of EUR 300 (irrespective of winnings)

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Optional online tools for the self-management of gaming• Players can close their accounts for the rest of the day, week, month or year (during this period, accounts

cannot be used to play or transfer money)• Players can set their own personal limits in euros for a period of 1, 7 and/or 30 days.• Players can order a monthly account statement, which is sent by email• An account history summary showing all the games played during the last month and detailing all the

losses, wins and payout percentages.• The gaming habits test, which players can use to evaluate their own gaming habits.• A website dedicated to controlling gaming, at veikkaus.fi/pelipaussi in Finnish.

Other• The identity of anyone who registers on the Internet is checked at the Population Register Centre.• The Veikkaus Card is only available to over-18s.

The toll-free Peluuri helpline helps problemgamblersIn accordance with the Lotteries Act, Finland’s national gaming organisations work together to prevent problemgambling. Gaming organisations finance the Peluuri helpline for those affected by problem gambling. Theservice is provided by the Finnish Blue Ribbon and the A Clinic Foundation, which also offer treatment toproblem gamblers.

Peluuri is a toll-free helpline aimed at problem gamblers and their families and friends. During the five yearssince its launch, the Peluuri helpline has established its position as a key nation-wide service providingassistance for those affected by problem gambling.

Peluuri took 2,838 calls in 2010. 28% of these calls were made by players, 10% by players’ family and friends,while the reminder were prank calls, test calls, transferred customer service line calls, and calls from thoseotherwise interested in problem gambling. Veikkaus’ games were the primary cause of problems for about 6%of callers.

Help on the InternetThe Peluuri website (www.peluuri.fi) contains comprehensive information about gambling problems and offersan anonymous, toll-free eCounselling service that answers questions on problem gambling. In 2010, Peluuri'swebsite logged over 57,000 visits and the eCounselling answered 130 questions on problem gambling. 114people completed the Time to Fold programme.

The Peluuri website also offers a discussion forum called ‘Valtti’ (‘Trumps’), where problem gamblers can seekpeer support and engage in lively debates. Family members and friends of problem gamblers can seek help ontheir own discussion forum ‘Tuuletin’ (‘Fan’).

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Peluuri and the A-Clinic Foundation also jointly provide a sms service, the ‘Gambling Power Circle’(Pelivoimapiiri > www.pelivoimapiiri.fi), which offers peer support and self-help tools via sms and the Internet.238 new customers joined the Gambling Power Circle in 2010.

The Time to Fold treatment modelThe Time to Fold treatment model, which is also run by Peluuri, continued in 2010. Time to Fold is an onlineself-treatment guidance programme for gambling problems. It consists of eight week-long independent worksections via the Internet and a brief weekly guidance session with a therapist. 114 people took the Time to Foldprogramme in 2010. Participants’ experiences of the treatment model have been very encouraging.

Profits distributed to Finns

EUR 463 million to be enjoyed by all FinnsBig or small, individual or institution, near or far. Veikkaus’ operations bring enjoyment to all Finns. Every one ofus is a winner through the activities of sports facilities, cinemas, theatres, scouts and much more. Manyunforgettable experiences would be lost without the accurate and planned distribution of all the euros lost onVeikkaus games.

In 2010, the Ministry of Education and Culture distributed a record-breaking total of EUR 462.7 million, anaverage of EUR 9 million per week. Veikkaus’ good result significantly increased beneficiaries’ allocations. TheMinistry also distributed EUR 30 million in undistributed prize funds from previous years, in particular to projectspromoting employment for young people.

Veikkaus’ proceeds are the primary source of the Ministry of Education and Culture’s funding for sport (99%)and youth work (74%). Veikkaus funds account for about 54% of total funding for the arts and 29% for science.

Share of Veikkaus funds of all funds allocated by the Ministry of Education and Culture in2010

Sector Funds total EUR million Share of Veikkaus funds in %

Arts 386.7 54.2 %

Sports 137.8 98.7 %

Science 325.6 29.4 %

Youth work 69.4 74.0 %

Veikkaus funds are distributed to Finnish culture in accordance with the Funds Distribution Act laid down by theParliament of Finland. According to the act, 38.5 percent of the funds are allocated to arts, 25 percent to sports,17.5 percent to science and 9 percent to youth work. Further, ten percent of the funds are channelled each yearto the above-mentioned beneficiaries as separately specified in the State Budget.

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Beneficiary sectors’ shares of Veikkaus funds distributed by the Ministry of Education andCulture 2007–2010

EUR million 2010 % 2009 2008 2007

Arts 1) 197.9 42.8% 204.7 189.2 184.8

Sports 128.5 27.8% 124.4 104.1 100.2

Science 90.0 19.4% 86.6 77.1 76.6

Youth work 46.3 10.0% 44.8 37.5 36.1

Total 462.7 4) 100.0% 460.5 3) 407.9 397.7 2)

1) Up until 2009, arts funding includes the Ministry of Education and Culture’s allocation to libraries. From 2010, State library

funding is no longer included in these figures.2) In 2007, the Ministry of Education and Culture distributed an additional EUR 4.2 million of Veikkaus’ retained funds.3) In 2009, the Ministry of Education and Culture distributed EUR 17.0 million in undistributed prize funds.4) In 2010, the Ministry of Education and Culture distributed EUR 30.0 million in undistributed prize funds to projects promoting

youth employment in particular. Arts and culture received EUR 11.6 million of this sum, sports EUR 7.5 million, science EUR 5.8

million and youth work EUR 5.1 million.

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See the path of the Veikkaus euro as a static web page >

The path of the Veikkaus euro• A Veikkaus customer plays a row. This time our customer doesn't win, and the euro that was invested in

the game starts on its journey.• Veikkaus Oy: Veikkaus' Board of Directors estimates the amount of Veikkaus funds that will be returned to

the Ministry of Education and Culture.• The Ministry of Education and Culture: Officials prepare a budget proposal. Veikkaus funds are distributed

in accordance with the Funds Distribution Act.• Government budget session: The government considers the Ministry of Finance's draft proposal and

approves its submission to Parliament.• Parliamentary debate• Finance Committee divisions: the budget proposal is considered and potential changes are suggested• Parliament's decision• The Ministry of Education and Culture: Veikkaus funds are distributed in accordance with the Funds

Distribution Act.

Thousands of beneficiaries throughout FinlandAbout 3,000 different organisations received Veikkaus funds in 2010.

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Arts funding was granted to a broad range of practitioners, museums, theatres, the Finnish National Opera anda variety of music events. The assistance given to beneficiaries engaged in arts and cultural activities has risenby a total of EUR 54.6 million from 2007-2011. The greatest growth has been in allocations to promote theFinnish film industry, the theatrical arts and dance.

Youth work funding is mainly channelled to support civic organisations and hobbies, such as youthassociations. The increased funds of recent years have been used to, for example, expand exploratory youthwork and to finance youth information and advisory services and youth media, research and social work.Allocations to youth work have increased by a notable 34% from 2007-2011.

Sports receive support from Veikkaus funds through, for example, sports associations, grants for theconstruction of sports facilities, sports research, and sports for children and youth. Allocations to sports haveincreased by 33%, that is, about EUR 34 million, from 2007-2011. The key additions to the latest sports budgetare funding for world-class sports, the construction of sports facilities, running training centres, providingimproved sporting activities for children and youth, and developing sports that promote health.

Science's most important beneficiary (65% of the allocation) is the Academy of Finland, which funds hundredsof scientific projects every year. Veikkaus funds also finance the support services required for conductingresearch, the preservation of national cultural heritage, scientific libraries and archives, Finnish languageresearch and the translation of scientific literature. Communities that supplement national research systemsalso receive support. These include the Finnish Science Centre Heureka and Finnish scientific institutesabroad.

Something for everyoneBig or small, individual or institution, near or far. Sports, science, culture, youth.Veikkaus funds support almost every Finn in one way or another. Six different people tell their stories.

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International Finnish photosSOK's former head office - a functionalist building on the outskirts of Kuopio Harbour - is now home to the MyllyCentre for Creative Industries. Huge windows flood the high rooms of the fourth floor with a fantastic naturallight.

"This is a marvellous space, I've waited a long time to get a studio here," says photographer Nanna Hänninen.

Hänninen's grandfather was a portrait photographer, and she's always owned a camera. At 16, she took aCamera Club course in printing photographs and, while studying at evening school, she photographed theKuopio Museum's collection.

"It soon became clear that I was an artist through and through, and it went on from there."

Hänninen studied at the Lahti Institute of Design and the Helsinki School of Art and Design, and also undertookfurther training in Switzerland. Five years ago, she returned to her hometown of Kuopio. She still works therenow, although her current job entails fascinating visits to exhibitions and galleries in cities such as Madrid,Milan, London and Prague, to name just a few.

But New York is her favourite. She returns there time and again, and it is there that she photographed her latestwork - HDR images of skyscrapers. Although Hänninen has built up a reputation in Finland, she's better knownabroad.

"I'm not exactly famous abroad, but there's a bigger market and good gallerists, and you can also find anaudience and buyers for your work."

Hänninen doesn't let herself off lightly, and the same goes for those viewing her photos. She describes her styleas minimalist and her viewpoint as deceptive. She uses long exposure times or takes macro images ofminiature models whose surfaces form surprising structures.

"My work doesn't seek to please a wide audience. I'm not a traditional photographer, you could say I use mycamera ‘incorrectly' and draw out its potential. My photographs depict reality, but not the same reality that theeye sees."Society's support is vital for an artist. Hänninen receives a variety of grants, including Veikkausfunds, towards the costs of mounting her exhibitions.

"The arts should be supported - otherwise they can't exist. Finland is a small country with few buyers. Manyphotographic artists have to earn their keep through photojournalism.

"But I want to focus on art alone. And I've managed to sell enough of my work to make that possible."

Text by Sami Turunen / Photo by Pentti Vänskä

Nanna Hänninen, EUR 4,000 to support her solo exhibition

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To confront a tricky enemyThere's a great battle going on in a laboratory on the fifth floor of the Biomedicum building in Meilahti, Helsinki.Academy Professor Kari Alitalo's research team is curing cancer.

‘I care not for the sun and the stars, I see but man in torment.' This quote from Nobel prize-winning authorAleksandr Solzhenitsyn's novel The First Circle prompted Alitalo to change field. Decades later, the young manwho had once been interested in mathematical logic is now one of Finland's most respected cancerresearchers. Alitalo's research team has also risen to the forefront internationally.

The Meilahti laboratory has expanded over the years. Doctors' coats hang on the walls, the tables are coveredin microscopes and test tubes. Alitalo sits at his office computer and brings up his team's research results.

"We are getting up to speed in two sub-areas. First, we have found ways to prevent blood flow to cancer cells.Secondly, our experimental models have succeeded in developing targeted treatments based on humanbiology. These are now progressing to patient studies."

The team's efforts have been recognised with numerous scientific awards across the globe. Considering itspopulation, Finland is indeed one of the top nations for cancer research. However, international research pullstogether.

"We are developing cancer research on a single front. Every day, scientists from all around the worldcommunicate via hundreds of emails. They arrive from the East in the morning and the West at night."

In the next room, Tuomas Tammela, a postdoctoral researcher of the younger generation, is peering throughthe eyepiece of a confocal microscope. He joined the team in 2002.

"In the morning, you never know what the day will bring. In cancer research, results can sometimes beachieved quite quickly. There is always the possibility that someone may find something that will revolutionisethe entire field. Cancer is a challenging opponent: you think you've invented a weapon, but then cancer soonfinds new means of attack."

Tammela is one of the few male rising stars, and he's not cut from the traditional researcher's mould either. Infact, no-one in Alitalo's team is: the atmosphere in the lab is open and relaxed and there's plenty of room forhumour.

"Joining this team was an easy decision to make. The team has a good dynamic and a strong desire to moveforward and undertake pioneering research."

Text by Felix Siivonen / Photo by Mervi Ahlroth

The Academy of Finland, EUR 59 million in Veikkaus funds - the Academy is onesource of financing for Finnish medical research.

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Fleas and a giantThe volleyball flies through the air. A flock of girls in red tracksuits scurry across the parquet floor.The Salon Viesti junior girls are getting down to some serious playing.

A male figure, twice the height of the rest, soars up from among the gaggle. He's Sami Heikkiniemi, a 2.06metre-tall world-class volleyball player. Heikkiniemi has been coaching young volleyball players in Salo since2008.

"After my own career ended, I felt it was time to come back here and repay my debt," says Heikkiniemi.

The Salon Viesti junior girls, aka ‘the Fleas', skilfully keep the ball in the air as they move around nimbly and inbare feet. At his height, Heikkiniemi is easily able to dodge the ball as it whizzes past.

"Keeping up with these young people gives an ‘old' man new energy."

Salon Viesti has focused on the junior girls' club. The older Fleas are over-18 and the youngest are about 4-5years old. A few hundred children and young people play volleyball in the club's colours. And dozens of childrentake up a new hobby through the volleyball school every year.

Volleyball is a popular sport in Finland. A couple of dozen new adaptations of the traditional rules have sprungup, the most popular being beach volley and swamp volley. The number of volleyball players in Finland haslong remained steady at about 130,000. The international volleyball association has 220 member countries andthere are an estimated billion plus players in the world.

"In volleyball, Finland is small but tough. We've been doing a lot of good work here for a long time and, at leastin the provinces, the conditions are good. But our battle with the flabby Playstation generation continues."

Autumn is mainly a time for practicing technique, while winter and spring are full of decisive league matches.In Finland, the juniors' season culminates in the annual Power Cup tournament in the early summer, when8,000 juniors from 90 teams compete for gold and glory.

"But like they say, summer makes a volleyball player. That's when you develop your physique, speed and agility- you get into shape."

Text by Felix Siivonen / Photo by Miika Kainu

The Finnish Volleyball Association, EUR 900,000 in Veikkaus funds

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Candystruction for allA delicious smell wafts around the upper floor of the ARX Cultural Centre in Hämeenlinna. Toothpicks andcandy are being used to conjure up visions of the architects' dream homes.

"Candystruction (‘Karkkitehtuuri' in Finnish) is one of our most popular workshops," says Riikka-Leena Puistola,one of the producers of the Hippalot children's festival.

Contrary to what you would imagine, the children working away by bowls full of colourful candy are not poppinganything into their mouths - building work requires a candystructor's full attention. And their concoctions do notget devoured at home either.

The Hippalot festival has been organised under different names, but around the same concept, since 1978.These four days of fun and frolics offer movies, music, workshops and theatre shows.

"We offer activities for the whole family to enjoy together, as well as thought-provoking culture for children. Thefestival reaches everyone, as there are so many free activities available every day," says Puistola.

Elsewhere upstairs, a variety of dolls and toys are being fashioned from recycled materials. Professionalguidance enables the creation of everything from traditional soft Afghan dolls to wooden dolls for puppettheatre.

"Everyone gets to keep the doll they make. Any dolls that are left are put on display," says workshop leaderEmmi Fjällström.

The doll workshop is free and open to all, as is the street chalk art outside the Verkatehdas Arts & CongressCentre. The chalkers soon decorate the asphalt with bunnies, hearts, stars, flowers, suns, cats and even thefamous Japanese Anime character Totoro. The only limits are those of your own imagination, and yourcreations will remain on display until the first shower.

Many adults are also inspired to grasp a chunky stick of chalk and paint the pavement. Jenni Lehto is attendingthe Hippalot festival for the first time after spotting an advert in the paper.

"I took my nephew along as an excuse for coming here," she laughs.

Text by Irina Mikkola / Photo by Laura Vuoma

The Hippalot arts festival in Hämeenlinna, supported by EUR 42,000 in Veikkausfunds

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Personnel

Working together to create the world's bestworkplaceVeikkaus seeks to be an excellent workplace that offers personnel a challenging and meaningful workingenvironment and creates an opportunity for continual personal development. An excellent workplace operatesefficiently, is responsive, continually renews itself and offers a competitive salary and bonuses. Veikkaus wantsto be an appealing and esteemed employer.

An efficient, agile and productive organisation and satisfied, motivated and competent personnel play animportant role in achieving Veikkaus' vision. The 2010 theme for Veikkaus' HR development was ‘TogetherTowards Excellence'. During the year, Veikkaus' organisation was updated and investments were made in theareas for development identified in the 2009 personnel survey *. These were supervisory work, dialogue withmanagement and management presence. In order to standardise supervisory work, all supervisors attendedtraining on changing corporate culture to support the recently launched cornerstones of leadership. Personaldevelopment was also supported with small group training and evaluations to support workplace performance.

Veikkaus' investments in leadership and HR development were recognised during the Excellence FinlandAward 2010 competition. According to the judges, Veikkaus showed many of the trademarks of excellence in itsoperations, such as visionary, motivational and responsible leadership and personnel as a success factor.

During the year, Veikkaus also analysed the current status of information flow and any potential challenges.Veikkaus also carried out a survey that collected feedback on the company's internal communications and thetools it employed.

In 2011, the internal areas for development identified by the personnel survey will be increasing interactionthroughout the organisation, participation in decision-making preparations, more extensive use of expertresources, and workload distribution. Veikkaus employees will work together to solve these challenges as partof the 2011 HR training programme.

Encouraging excellent performance is another one of our focal points for 2011. Veikkaus has introduced anupdated compensation schemeand is also seeking improved performance through training. All personnel will beoffered HR training in 2011.

An efficient and agile organisationContinual changes in Veikkaus' operating environment mean that Veikkaus must have a responsiveorganisation with correctly targeted resources. Every year, Veikkaus assesses the functionality of itsorganisation not only with regard to its vision, strategy and the results of its personnel survey, but also from theperspective of costs, responsiveness and brand image.In 2010, Veikkaus aimed to make more efficient use ofits human resources. Veikkaus' organisation was updated twice during the year, with the latter update cominginto force at the beginning of 2011.

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Personnel's productivity, which is measured as the ratio between Veikkaus' gross margin and the number ofpersonnel, has steadily improved over the last five years.

* Personnel satisfaction surveyVeikkaus conducts an annual survey of personnel satisfaction and workplace atmosphere. Since 2009, thesesurveys have followed Finland’s ‘Great Place to Work’ concept. The survey asks employees to assess 59statements on what constitutes a good workplace. In the 2010 survey, 68% of respondents thought that thesurvey’s statements applied to Veikkaus either well or very well.

A more standardised corporate cultureIn 2010, all supervisors took part in extensive management training aimed at supporting changes in Veikkaus'corporate culture. As part of the training, supervisors committed to changing their everyday routines to fit thecornerstones of leadership. The training covered, for example, those personal areas for development insupervisory work that had been identified in the 360 survey *. Other topics included in the training were resultsand setting targets, reforms, dialogue and listening, atmosphere and charisma.

The cornerstones of leadership - results, reforms and interaction - have brought changes to Veikkaus'leadership practices. In order to improve results, Veikkaus has launched measures to intervene in cases of poorperformance, and a development programme to encourage excellent performance is scheduled to begin in2011. In order to improve interaction, Veikkaus is supporting working communities with training that helpsemployees to identify both their own working styles and those of their colleagues, and also to understand thedifferences. Reforms have been seen in, for example, more efficient meeting practices.

* In the 360 Survey, supervisors receive feedback on their strengths and weaknesses from their ownsupervisors, colleagues and team members. The survey also contains a self-evaluation section. A comparable270 Survey is carried out for those who do not supervise team members. Feedback is given on results, thecapacity to implement reforms, interactive skills, initiative, and work management.

Continual developments towards excellenceIn order to achieve our vision, every Veikkaus employee must work towards continual personal developmentand excellent performance. Evaluating and developing workplace performance towards excellence was one ofthe focal points for HR development in 2010.

In order to develop their performance, all employees received feedback from their own supervisors andcolleagues in the 270 Survey *. Training events were organised for employees to go through their evaluations.Employees also learnt how to work together to change leadership culture and what the change would require ofeach employee. The results of the survey were used to draw up a personal development programme for eachemployee. Employees later went through these programmes at follow-up discussions with their supervisors.Small group coaching was also used to support workplace performance and achieving targets.

During objective and development discussions, supervisors evaluated the performance of their team members.If an employee's performance was significantly below the requirements of his or her role, the development

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targets for the employee were set and progress was monitored with HR. In 2011, Veikkaus will be launching aprogramme to encourage excellent performance. The programme seeks to support the personal developmentand professional goals of selected employees, and to secure personnel's commitment to the company.

Three-part development discussionsAll personnel participate in three-part development discussions. A unit-level group development discussion isheld at the end of the year. A summary of the past year is presented, the following year's targets are agreedupon and competency requirements are discussed. The objective and development discussions in Januaryensure that the whole company takes a standardised direction in its operations and that its operationalrequirements are met. Employees receive feedback on their performance, personal goals are set anddevelopment plans are drawn up. Employees must meet their personal objectives in order to receive aperformance bonus, which is in turn based on the company's scorecard. Development plans contain personaltargets and any competence development that is required to support personal growth. During the summer,follow-up discussions are held to monitor progress and set personal targets for the autumn performance bonus.

Three-part development discussions

See also Veikkaus' annual strategic schedule ›

Targeted trainingPersonnel competence development is included in both Veikkaus' HR strategy and its company-levelscorecard. Competence development will focus on strategically important areas.

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Competence management tools

Veikkaus' Game Academy organises targeted training and small group coaching. 2010 topics includedbeneficiary benefit and corporate social responsibility, data protection and corporate security, the R&D process,finances and procurement, and the Lotteries Act. The Game Academy also offered language and officesoftware courses, and training in meeting practices and negotiation and brainstorming techniques.

Veikkaus employees are actively encouraged to pursue their personal development goals. We support thosewho wish to study and work by granting local, salaried study leaves and a bonus upon graduation.

Employees are also offered the chance to develop their skills through internal job rotation. The mentoringprogramme, which facilitates the passing on of tacit knowledge from employees who are about to retire, willalso be continued.

Introductions for new employees include information about the company, a presentation of HR matters, a visit tothe customer service line unit, a coffee break with management and the completion of an online CSR learningmodule (The Responsibility Network).

In 2011, Veikkaus will launch an HR training programme for all employees. The programme seeks to supportdevelopmental targets aimed at changing Veikkaus' corporate culture. These targets, which were identified inthe personnel survey, are: participation in decision-making, making better use of available experts, andincreasing interaction throughout the organisation. Veikkaus is also seeking to strengthen its core competenceby developing customised gaming courses and using small group coaching to improve performance.

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* In the 360 Survey, supervisors receive feedback on their strengths and areas for improvement from their ownsupervisors, colleagues and team members. The survey also contains a self-evaluation section. A comparable270 Survey is carried out for those who do not supervise team members. Feedback is given on results, thecapacity to implement reforms, interactive skills, initiative, and work management.

Developing a more motivational compensationschemeEncouraging excellent performance is also one of the reasons why we've developed a new compensationscheme. The new scheme, which came into force at the beginning of 2011, clearly distinguishes between task-specific and employee-specific pay. The task-specific component is a civil service salary based on the HAYclassification. The employee-specific component is influenced by an employee's competence and performanceand, in the case of supervisors, also successful supervisory work. Veikkaus' salary components will beredefined in early 2011.

Veikkaus' salary and incentive scheme covers all personnel and consists of four components: task-specific pay,employee-specific pay, a special bonus and a performance incentive. The employee-specific component isbased on a performance evaluation conducted by the employee's supervisor, and requires continued goodperformance. Special bonuses may be granted for particularly good individual performances. The performanceincentive is based on how successful the company has been in achieving its strategic goals with regard toearnings, the functionality of core process, the results of customer and responsibility barometers, and thetargets contained in action plans.

Veikkaus also recognises good performance in other ways. Anyone can propose a Focus on Success diplomafor another employee or entire unit as, for example, a token of gratitude for a job well done or having a positiveinfluence on workplace atmosphere. Other recognitions include the idea of the month award and celebratingbirthdays, service milestones and other anniversaries.

Diverse investments in occupational wellbeingVeikkaus makes diverse investments in its personnel's wellbeing. Our occupational healthcare aims for ahealthy and safe working environment, a smoothly functioning working community, and promoting personnel'shealth and working capacity. We offer comprehensive occupational healthcare services: in addition to statutoryhealth checks and examinations, our personnel are entitled to ergonomics checkups and, after a four-monthtrial period, also to physiotherapy and specialist consultations. Veikkaus also reimburses a percentage ofemployees' pharmaceutical, dental, and spectacle costs.

Veikkaus also promotes occupational wellbeing through an early intervention model. Supervisors closelymonitor absences and, in the case of recurrent absenteeism, the employee will discuss both the reasons fortheir absence and treatment methods with HR and occupational healthcare staff. Problems in the workingcommunity are tackled by arranging specially targeted training sessions. During 2010, we focused on thepsychological aspects of coping at work.

Veikkaus also promotes occupational wellbeing by serving a company breakfast and offering flexible workinghours, shorter workdays in summer, a company cafeteria at head office and luncheon vouchers at regional

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offices. Other features that help maintain working capacity include leisure vouchers, leisure activities, thelibrary, gym and swimming pool at head office, and the sports vouchers and facilities (in Kirkkonummi,Vierumäki and Saariselkä) for personnel at regional offices.

An industrial safety risk analysis was conducted in late 2009 and its recommendations were implemented in2010. For example, the occupational healthcare unit arranged support for service line employees in how to dealwith aggressive callers. The occupational healthcare nurse and the industrial safety delegate also visited theVantaa head office and premises in Helsinki. On the basis of these inspections, we improved ergonomics withthe aid of an occupational physiotherapist.

Terms of employment are jointly agreed upon49.5% of Veikkaus personnel belong to Veikkauksen Henkilöstö ry (Veikkaus Staff Association), a trade unionunder Trade Union PRO. Veikkaus is a member of the Employers' Association of the Special Branches, whoseumbrella organisation is the Confederation of Finnish Industries.

Veikkaus' collective labour agreement is company-specific and is negotiated centrally at union level. Veikkausalso has the option of making local agreements. Negotiations were held in 2010, culminating in a new collectivelabour agreement that will run until 31 October 2011. Salary negotiations for 2011 will be held in early 2011,and negotiations for the next collective labour agreement will begin in autumn 2011. The collective labouragreement covers all personnel, except management.

Codetermination negotiations at VeikkausIn autumn 2010, Veikkaus held co-determination negotiations on organisational restructuring. The negotiationsaffected all personnel and resulted in the following decisions: a reduction in the number of supervisors,simplifying the company's corporate structure and strengthening the position of experts. As a result of thenegotiations, fifteen jobs will be lost by the end of 2011. The reductions will be implemented by means of, forexample, pension arrangements and decreasing the number of tasks. Three employees were laid off as a resultof the negotiations.

In spring 2011, Veikkaus will look into outsourcing certain functions. Veikkaus complies with Finnish legislationon codetermination.

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Personnel key figures2010 2009 2008

Personnel 1)

Number of employees at 31 Dec 2) 364 355 354

Permanent, % 94 95 97

Fixed-term, % 6 5 3

Full-time, % 90 94 91

Part-time, % 10 6 9

Women, % 55 55 55

Men, % 45 45 45

Women in management positions (SET & OET), % 21 13 13

Women supervisors, % 42 44 – *)

Aged under 30, % 8 9 8

Aged 30–49, % 70 68 67

Aged over 50, % 22 23 25

Average monthly salary 3) 3 597 3 511 3 439

Employees covered by collective labour agreements, % 96 96 96

Employees belonging to Veikkauksen Henkilöstö ry, % 49,5 52 52

Employee turnover 1)

Hiring rate, % 9,9 6,5 2,8

Leaving rate, % 7,4 6,2 7,3

The number of employees leaving 27 22 26

Average duration of employment contracts 12,4 12,8 13

Occupational health

Number of work-related accidents 4) 3 2 – *)

Sickness absence rate, % 3,95 4,20 3,80

Training

Training days per employee 1,97 1,75 – *)

Employees who attend regular development discussions, % 100 100 100

The calculations for HR indicators were revised in 2010.1) Does not include short-term temporary contracts or summer jobs.2) At the beginning of 2010, 11 employees who regularly work for Veikkaus on short-term temporary contracts were given

permanent positions. They also worked for Veikkaus in 2009, when short-term temporary employees were not reported on. If they

had been included, the 2009 figure would have been 366.3) This figure does not include performance incentives for employees nor salaries and performance incentives for Executive Team

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members.4) An accident resulting in at least one day of sickness absence.*) Comparison figures are not available.

Equality at VeikkausAt Veikkaus, equality and equal opportunities are treated as a wide concept in which respect for individualsholds a key position.

55% of Veikkaus personnel are women and 42% of supervisors are women. The Strategic Executive Team hasone woman member and the Operative Executive Team three. Veikkaus' Board of Directors has four womenmembers and the Supervisory Board five.

Veikkaus recruits the most qualified applicant. When recruiting from amongst equally qualified and competentapplicants, positive discrimination will be applied and the applicant representing the minority gender will berecruited. Employees holding positions with equal requirement standards will be entitled to the same salary,irrespective of gender. Salaries are determined on the basis of personal performance and the task-specific HAYclassification.

Environmental actions

Multiple ways of promoting sustainabledevelopment

Veikkaus undertakes a variety of environmentally friendly actions to promote sustainable development. In 2010,Veikkaus took a significant step regarding environmental responsibility by committing to reducing its carbondioxide emissions by one third by the end of 2013. Veikkaus also pays attention to environmental issues at itsoffice premises. Veikkaus' head office has been a WWF Green Office since 2007.

A significant proportion of Veikkaus' environmental impact is caused by the electricity consumption of its salesterminals, servers and their cooling equipment. Veikkaus analysed its environmental impact in 2010. Part of thisanalysis included determining the company's carbon footprint* in cooperation with Gaia Consulting Oy.Veikkaus has committed to reducing its carbon dioxide emissions to 65% of their 2009 levels by the end of2013.

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In order to reduce carbon dioxide emissions, Veikkaus will, for example, switch to green electricity and is payingattention to heat recovery and server cooling technology. Veikkaus also intends to replace 10% of air travel withother forms of transportation and teleconferences. Procurements will consider the environmental impact ofmaterials. Emissions limits will be set for company cars and special bonuses will be used to encourage theacquisition of low-emission vehicles.

Our emissions reduction target does not cover electricity consumption at retail outlets. This environmentaltarget will also help us to achieve the targets of the Energy Efficiency Agreement for Industries, which Veikkaussigned in 2008. In the Energy Efficiency Agreement for Industries, Veikkaus has committed to boosting theefficiency of energy usage (excluding production) at its head office by 9% of 2005 levels by 2016.

As gaming activities increase, Veikkaus' energy requirements also increase. Energy consumption is forecast torise in the future.

* Included in the calculations: vehicles' fuel consumption, heating oil for properties, electricity, district heating, the electricity

consumption of game terminals at retail outlets, wastes, purchased transportation, paper consumption, postage, and travel (both

during working hours and commuting).

Environmental impacts are measured by carbonfootprint

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Our carbon footprint covers all operationsIn the gaming industry, the most significant environmental impact is caused by the electricity consumption ofgame terminals, servers and telecommunications, as well as the cooling required by ICT equipment. Thelargest share of emissions is generated by the electricity consumption of game terminals. Electricity and heatconsumption generate about a quarter of all our carbon dioxide emissions and mainly comprise theconsumption at the Vantaa head office. The calculations have also taken into consideration consumption atVeikkaus' district centre, sales offices, conference premises and leisure-time facilities.

Vantaa head office – electricity, heating energy and water consumption

2010 2009

District heating (MWh) 3,060 2,980

Electricity (MWh) 4,900 4,400

Water (m3) 4,300 4,730

Water consumption at head office fell by 9.1% on 2009, whilst energy consumption rose. No electricity-savingmeasures were carried out at head office during 2010. Veikkaus will begin full implementation of its energy-saving measures as part of the upcoming renovations in 2011, when the ventilation system will be renewed andequipped with a heat recovery system.

Most personnel commute by car. About 10% take the bus. Most of the emissions caused by business travelcome from flights, car journeys and the annual cruise Veikkaus organises for its game sales clerks andretailers. Emissions from fuel consumption are mainly generated by Veikkaus' own vehicles and the use ofemergency generators.

Emissions limits for Veikkaus' company cars were tightened in autumn 2010 as part of Veikkaus' environmentalprogramme.The upper emission limit for new company cars was set at 190g CO2/km. A special bonus was alsointroduced to encourage the acquisition of vehicles with emissions limits of under 130g CO2/km.

Reusing wasteSorting waste is already a well-established practice at Veikkaus. All workstations have separate receptacles forenergy waste, office paper, and recyclable paper.Receptacles for confidential papers, mixed waste, andbiowaste are located in communal areas. There are also collection points for other types of waste, such asbatteries, wood and hazardous waste. Thanks to efficient sorting, the waste re-utilisation rate* at Veikkaus'head office has remained at 99% (99% in 2009). Only one per cent of waste ends up at the landfill.

Vantaa head office – waste generation

2010 2009

Energy waste (tonnes) 18.5 17.7

Mixed waste (tonnes) 1.2 1.1

Office paper (tonnes) 1.3 2.7

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*The waste re-utilization rate covers the waste that has been utilized for further purposes. The remaining part of the waste is mixed

waste that ends up in a landfill. The waste re-utilization rate is calculated by deducting mixed waste and hazardous waste from the

total amount of waste.

Planning reduces emissions66% of Veikkaus' carbon emissions from goods transportation are caused by flights. Veikkaus' instants areflown to Finland from Canada and England. Other transportation includes postage and road transport.

When delivering point-of-sale materials, Veikkaus aims for well-planned routes and combined deliveries.Combined deliveries are a key way of working at Veikkaus. They decrease not only expenses, but also reducethe number of kilometres driven and thereby also our environmental loading. In 2010, Veikkaus made a total ofapproximately 260,000 deliveries to retail outlets. We aim to centralise our deliveries, thereby further reducingthe number of deliveries and the number of kilometres driven. The transportation companies we use have theirown environmental programmes.

FacilitiesIn addition to our head office in Vantaa and a district centre in Tampere, Veikkaus has small sales officesaround the country in Vaasa, Turku, Kuopio and Oulu. Veikkaus also has conference premises in the centre ofHelsinki and at the Vierumäki Sports Institute, and recreational facilities for personnel in Kirkkonummi and inSaariselkä.

Veikkaus can only obtain energy certificates and waste volumes for its own properties, that is, those in Vantaa,Kirkkonummi and Saariselkä. Detailed consumption and waste breakdowns are not available for leasedpremises. The majority of Veikkaus' energy consumption and waste generation occurs at the Vantaa headoffice.

* What is a carbon footprint?A carbon footprint is a measure of the greenhouse emissions generated by an operation or organisation.Veikkaus has introduced emissions calculations for all of its operations.

Environmentally friendly deeds throughout theorganisationVeikkaus pays attention to energy consumption in office environments when acquiring IT and other equipment,and also by informing and motivating personnel.

Veikkaus' head office has been a WWF Green Office since the beginning of autumn 2007. A Green Officebadge indicates that the company in question follows an environmental programme and pays attention tosaving energy, sorting waste, recycling, and creating awareness of environmental responsibility issues. In 2010,the Green Office programme's three-year audit was carried out. Veikkaus passed the audit and was thereforeable to continue as a Green Office. The auditors commended Veikkaus for motivating personnel and creatingawareness of environmental issues in particular.

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Personnel motivation generates resultsVeikkaus' head office has an Ecological Team, which was set up by personnel in 2004. The team putsVeikkaus' environmental responsibility into practice and increases personnel's understanding of environmentalissues. In 2010, the team had fifteen members representing different units and locations. During the year, theEcological Team organised collection points for old clothes and other unwanted goods, and took part in theMotiva energy saving week and the WWF's Earth Hour. The team proactively provided personnel withinformation throughout the year.

Procurements take environmental issues into considerationOur procurement process includes CSR requirements and their associated analyses, such as determining theenvironmental status of our goods suppliers and service providers. For the past few years, Veikkaus hasincluded a questionnaire when asking for quotes. In the future, Veikkaus will require environmentalmanagement from its material suppliers and service providers. In 2011, Veikkaus will define the material criteriafor its main product groups.

In-store materials to be recycledGaming generates waste, mainly in the form of playslips, instant tickets, sales terminal receipts and promotionalmaterials. The materials that Veikkaus delivers to points-of-sale - playslips, receipts, posters and guides andtheir cardboard packaging - are all recyclable. Retail outlets receive regular guidance on material sorting atsales clerk training events, on the sales clerks' extranet service and in Veikkaus' professional newsletters to itsretailers.

Veikkaus' promotional events follow written instructions for sorting waste.

The suppliers who provide the paper used in point-of-sale materials, such as playslips, posters and professionalnewsletters, have been awarded either a Nordic or EU environmental badge. All packaging plastics are suitablefor incineration. Any instant tickets that are returned to retail outlets are shredded for reasons of security. Theshredded tickets are classified as energy waste.

In 2010, Veikkaus switched to the Itella Green postage service. Itella Green is a carbon neutral service thatcompletely offsets the carbon dioxide emissions generated.

Veikkaus has signed an agreement with Globe Hope, which produces ecological design products. Theagreement covers the after-use of Veikkaus' marketing and advertising materials, which will be used to makeVeikkaus' PR gifts.

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GRI Table

GRI Content Included Section Remarks

1. Strategy and Analysis1.1 CEO's statement Yes CEO's Review

1.2 Key impacts, risks and opportunities Partly A ResponsiblePlayer

Risks and riskmanagement

Targets 2010

Future outlook

Targets 2011

2. Organisational Profile2.1 Name of the organisation Yes The Board of

Directors' report2010

2.2 Primary brands, products and services Yes Games

Online channels

2.3 Operational structure Yes Veikkaus'organisation:

www.veikkaus.fi

2.4 Location of organisation's headquarters Yes Contact details

2.5 Number of countries and location of operations Yes Sales network

2.6 Nature of ownership and legal form Yes CorporateGovernancereview 2010

Accountingprinciples

2.7 Markets served Yes Market review

Sales network

2.8 Scale of the reporting organisation Yes Key figures

2.9 Significant changes regarding size, structure orownership

Yes No significantchanges duringthe reportingperiod.

2.10 Awards received in the reporting period Yes ExcellenceFinland Award2010

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3. Reporting PrinciplesReport profile

3.1 Reporting period Yes Content andboundary of thereport

3.2 Date of most recent report Yes Content andboundary of thereport

3.3 Reporting cycle Yes Content andboundary of thereport

3.4 Contact point for questions regarding the report Yes Contact details

Report scope and boundary

3.5 Process for defining report content (materiality,prioritising topics and stakeholders using the report)

Yes Responsibleplayer

Stakeholdercooperation

Content andboundary of thereport

3.6 Scope and boundary of the report Yes Content andboundary of thereport

3.7 Limitations on the report's scope or boundary Yes Content andboundary of thereport

3.8 Basis for reporting subsidiaries, joint ventures, leasedpremises, outsourced operations and other entitiesaffecting comparability

Yes Content andboundary of thereport

3.9 Data measurement techniques and bases ofcalculations

Yes Content andboundary of thereport

3.10 Explanation of re-statements Yes Content andboundary of thereport

3.11 Significant changes from previous reporting periods inthe scope, boundary or measurement methods

Yes Content andboundary of thereport

GRI content index

3.12 GRI content index Yes GRI table

Assurance

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3.13 Assurance policy and practice Yes AssuranceReport

Content andboundary of thereport

4. Governance, Commitments and EngagementGovernance

4.1 Governance structure of the organisation Yes Governing bodies

4.2 Position of the Chairman of the Board Yes Governing bodies

Board ofDirectors

4.3 Independence of the Board members Yes Governing bodies

4.4 Mechanism for shareholder and employee consultation Yes Governing bodies

4.5 Impact of organisation's performance on executivecompensation (inc. CSR)

Yes Governing bodies

4.6 Processes for avoiding conflicts of interest Yes Governing bodies

4.7 Processes for determining the Board members'expertise in strategic management and CSR

Partly Board ofDirectors

4.8 Implementation of mission and values statements, codeof conduct and other principles

Yes Veikkaus2010–2011

Marketing andcommunications

Mission andvision

4.9 Procedures of the Board for overseeing CSRmanagement, including risk management

Partly Governing bodies

4.10 Processes for evaluating the Board's own performance Yes Governing bodies

Commitments to External Initiatives

4.11 Addressing precautionary approach Yes Risks and riskmanagement

R&D

4.12 Voluntary charters and other initiatives Yes Verifiedresponsibility

Environmentalactions

Supervision ofgaming activities

4.13 Memberships in associations No

Stakeholder engagement

4.14 List of stakeholder groups Yes Stakeholdercooperation

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4.15 Identification and selection of stakeholders Yes Stakeholdercooperation

4.16 Approaches to stakeholder engagement Yes Stakeholdercooperation

4.17 Key topics raised through stakeholder engagement Yes Stakeholdercooperation

Development ofpersonnel

Registeredplayers

Marketing andcommunications

Economic Performance IndicatorsManagement approach to economic responsibility Partly Targets 2011

CSR program

Targets 2010

Risks and riskmanagement

Strategy

Economic Performance

EC1* Direct economic value generated and distributed amongstakeholders

Partly CRS Report andAnnual Report2010

Proceeds forFinns

Key figures

EC2* Financial implications, risks and opportunities due toclimate change

No

EC3* Coverage of defined benefit plan obligations Yes 16. Liabilitiesfrom employeebenefits

Governing bodies

EC4* Significant State subsidies No

Market presence

EC5 Entry level wage compared to local minimum wage Partly Personnel keyfigures

EC6* Policy, practices and spending on local suppliers No

EC7* Local hiring procedures and proportion of local seniormanagement

No

Indirect Economic Impacts

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EC8* Development and impact of infrastructure investmentsprovided for public benefit

No

EC9 Significant indirect economic impacts Yes Proceeds forFinns

Thousands ofbeneficiaries

Environmental Performance IndicatorsManagement approach to environmental responsibility Partly Environmental

actions

Risks and riskmanagement

Results withenvironmentaldeeds

Materials CSR program

EN1* Materials used by weight or volume No

EN2* Recycled materials used No

Energy

EN3* Direct energy consumption No

EN4* Indirect energy consumption Partly Environmentalimpact

EN5 Energy saved due to conservation and efficiencyimprovements

Partly Environmentalactions

EN6 Initiatives to provide energy-efficient or renewableenergy based products and services

Partly Environmentalimpact

EN7 Initiatives to reduce indirect energy consumption andreductions achieved

Partly Environmentalactions

Environmentalimpact

Water

EN8* Total water withdrawal by source Yes Environmentalimpact

Waterconsumption athead office.

EN9 Water sources significantly affected by theorganisation's water consumption

No

EN10 Percentage and total volume of water recycled andreused

No

Biodiversity

EN11* Location and size of land holdings in areas of highbiodiversity

No

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EN12* Description of significant impact of activities, products,and services on biodiversity

No

EN13 Habitats protected or restored No

EN14 Managing impacts on biodiversity No

EN15 Endangered species with habitats in areas affected byoperations

No

Emissions, Effluents and Waste

EN16* Total direct and indirect greenhouse gas emissions Yes Environmentalimpact

2009 emissionsreported. Figuresfor 2010 not yetavailable.

EN17* Other relevant indirect greenhouse gas emissions Yes Environmentalimpact

2009 emissionsreported. Figuresfor 2010 not yetavailable.

EN18 Initiatives to reduce greenhouse gas emissions Partly Environmentalactions

EN19* Emissions of ozone-depleting substances No

EN20* NOx, SOx, and other significant air emissions No

EN21* Total discharge of wastewater and other substances intobodies of water, by type

No

EN22* Total amount of waste by type and disposal method Yes Environmentalimpact

Waste generatedat head office.

EN23* Significant spills (oil, chemical, etc.) No

EN24 Transported, imported, exported, or treated hazardouswaste

No

EN25 Water bodies and habitats affected by discharges ofwater

No

Products and Services

EN26* Mitigating environmental impacts of products andservices

Partly Results withenvironmentaldeeds

EN27* Reclaimable products and reuse Partly Results withenvironmentaldeeds

Compliance

EN28* Significant fines and sanctions for non-compliance withenvironmental regulations

Yes No incidents ofnon-complianceduring thereporting period.

Transport

EN29 Environmental impacts of transportation Partly Environmentalimpact

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Overall

EN30 Total environmental protection expenditures andinvestments

No

Social Performance IndicatorsManagement approach to social responsibility Partly Registered

players

Customerunderstanding

Targets 2010

Risks and riskmanagement

CSR program

Personnel

Labor practices and working conditions

Employment

LA1* Total workforce by employment type, employmentcontract and region

Yes Personnel keyfigures

LA2* Total number and rate of employee turnover Partly Personnel keyfigures

LA3 Employee benefits to full-time employees Yes Remuneration

Occupationalwellbeing

Labor/Management Relations

LA4* Coverage of collective bargaining agreements Yes Cooperation

LA5* Minimum notice period regarding operational changes Yes Cooperation Veikkauscomplies withFinnishcodeterminationlegislation.

Occupational Health and Safety

LA6 Representation in joint health and safety committees No

LA7* Rates of injury, occupational diseases, lost days,fatalities and absenteeism

Partly Personnel keyfigures

LA8* Education and prevention programmes regardingserious diseases

Yes Occupationalwellbeing

LA9 Health and safety topics covered in formal agreementswith trade unions

No

Training and Education

LA10* Average training hours per year Partly Personnel keyfigures

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LA11 Programmes for skills management and lifelong learning Yes Personnel keyfigures

LA12 Employees receiving regular performance and careerdevelopment reviews

Yes Personnel keyfigures

Diversity and Equal Opportunity

LA13* Composition of governance bodies and breakdown ofemployees

Yes Personnel keyfigures

Governing bodies

LA14* Ratio of basic salary of men to women by employeecategory

Partly Remuneration

Personnel keyfigures

Human Rights

HR1* Investment agreements that include human rightsclauses

No

HR2* Suppliers and contractors that have undergone humanrights screening

No

HR3 Human rights related training for employees No

HR4* Incidents of discrimination and actions taken Yes No incidents ofdiscriminationduring thereporting period.

HR5* Supporting right to freedom of association and collectivebargaining in risk areas

Yes Veikkaus'operations do notcontain any risksin which the rightto freedom ofassociation orcollectivebargaining wouldbe jeopardised.Veikkausoperates inFinland andcomplies withFinnishlegislation.

HR6* Measures taken to eliminate child labour in risk areas Yes There is no riskof child labour inVeikkaus' ownoperations.

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HR7* Measures taken to eliminate forced labour in risk areas Yes There is no riskof forced labourin Veikkaus' ownoperations.

HR8 Human rights related training for security personnel No

HR9 Incidents involving rights of indigenous people andactions taken

Yes No incidentsduring thereporting period.

Society

Community

SO1* Managing impacts of operations on communities No

Corruption

SO2* Business units analysed for corruption risks No

SO3* Anti-corruption training No

SO4* Actions taken in response to incidents of corruption Yes No incidents ofcorruption duringthe reportingperiod.

Public Policy

SO5* Public policy positions and participation in public policydevelopment and lobbying

No

SO6 Contributions to political parties and related institutions Yes Veikkaus doesnot providepolitical support.

SO7 Legal actions for anti-competitive behaviour, anti-trust,and monopoly

Yes No incidentsduring thereporting period.

Compliance

SO8* Fines and sanctions for non-compliance with laws andregulations

Yes No incidents ofnon-complianceduring thereporting period.

Product Responsibility

Customer Health and Safety

PR1* Assessment of health and safety impacts of products Yes R&D

PR2 Non-compliance with regulations concerning health andsafety impacts of products

No

Product and Service Labeling

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PR3* Product information required by procedures Yes Legislation, andin particular theConsumerProtection Act,requires productinformation to bemade available tocustomers onplayslips, gameguides andVeikkaus'website.

PR4 Non-compliance with regulations concerning productinformation and labelling

Yes No incidents ofnon-complianceduring thereporting period.

PR5 Customer satisfaction Yes Customer service

Registeredplayers

Marketing Communications

PR6* Adherence to marketing communication legislation,standards and voluntary codes (inc. sponsorship)

Yes Marketing andcommunications

PR7 Non-compliance with marketing communicationlegislation and voluntary codes

Yes No incidents ofnon-complianceduring thereporting period.

Customer Privacy

PR8 Complaints regarding breaches of customer privacy Yes No breachesduring thereporting period.

Compliance

PR9* Fines for non-compliance concerning the provision anduse of products and services

Yes No incidents ofnon-complianceduring thereporting period.

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Independent assurance report

(Translation from the Finnish original)

To the Management of Veikkaus OyAt the request of the Management of Veikkaus Oy we have performed a limitedassurance engagement on the information on economic, social and environmentalresponsibility disclosed in Veikkaus Oy's CSR Report & Annual Report 2010 onlinepublication's sections Veikkaus 2010-2011, Business, Responsibility, CorporateGovernance within reporting period 1.1.-31.12.2010 (hereinafter "Corporate social responsibility information").

Management's responsibilityThe Management Veikkaus Oy is responsible for preparing the Corporate social responsibility information inaccordance with the reporting criteria as set out in the Global Reporting Initiative's (GRI) Guidelines version G3,as well as the company's own reporting guidelines.

Practitioner's responsibilityIt is our responsibility to present an independent conclusion on the Corporate social responsibility informationbased on our work performed. We do not accept, nor assume responsibility to anyone else, except to VeikkausOy for our work, for the assurance report, or for the conclusions that we have reached.

We have conducted the engagement in accordance with the assurance engagement standard (ISAE 3000)‘Assurance Engagements Other than Audits or Reviews of Historical Financial Information'. The ISAE 3000standard requires compliance with as well as planning and performing the assurance engagement to obtainlimited assurance on whether any matters have come to our attention that would cause us to believe that theCorporate social responsibility information has not been prepared, in all material respects, in accordance withthe reporting criteria.

Assurance is provided only on the Corporate social responsibility information disclosed in CSR Report & AnnualReport 2010 online publication, not on information linked to and disclosed on other web pages. We have notbeen engaged to provide assurance on CEO's Review.

In a limited assurance engagement the evidence-gathering procedures are more limited than in a reasonableassurance engagement, and therefore less assurance is obtained than in a reasonable assurance engagement.The procedures selected depend on the practitioner's judgment, including an assessment of the risks that theCorporate social responsibility information would not in all material respects comply with the reporting criteria.We have planned and performed our engagement to obtain sufficient appropriate evidence on which to baseour conclusion. Our work consisted of, among others, the following evidence-gathering procedures:

• Interviewed representatives of senior management in order to ascertain the current targets for VeikkausOy's corporate social responsibility as part of the business strategy and operations;

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• Interviewed persons responsible for corporate social responsibility reporting in order to clarify the re-porting process;

• Familiarized ourselves with the management and reporting systems and documentation relating to thecorporate social responsibility information;

• Interviewed persons on materiality of reported information and the practices used for data compilation andconsolidation;

• Evaluated the data management procedures used in compiling, recording and reporting the quantitativedata;

• Tested the information in the systems on a sample basis and recalculated some of the indicators andtested the existence of reported information on a sample basis from original documents;

• Evaluated the content of the corporate social responsibility information, materiality of indicators as well asboundary setting of the report.

The assurance of information regarding economic responsibility is based on audited information obtained fromthe financial administration.

Our conclusionBased on our work described in this report, nothing has come to our attention that causes us to believe that theCorporate social responsibility information, in all material respects, based on the aforementioned assurancecriteria, has not been prepared in accordance with the reporting criteria.

Our assurance report should be read in conjunction with the inherent limitations of accuracy and completenessfor Corporate social responsibility information. This independent assurance report should not be used on itsown as a basis for interpreting Veikkaus Oy's performance in relation to its principles of corporate socialresponsibility.

Helsinki, 15 March 2011

PricewaterhouseCoopers Oy

Sirpa JuutinenPartner, Sustainability & Climate Change

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GOVERNANCE

Corporate Governance review 2010Veikkaus' mission is to generate broad-ranging value for Finnish society by operating games reliably andresponsibly. Veikkaus is a state-owned limited company that operates in the administrative sector of the FinnishMinistry of Education and Culture. The State's responsibility for the company's operations is determined solelyby its share capital and its role is limited to the responsibilities of a shareholder.

Veikkaus' corporate governance is based on the Finnish Companies Act, the company's Articles of Association,the Lotteries Act (1047/2001) and the gaming licence granted to the company by virtue of the Lotteries Act. TheCouncil of State has granted Veikkaus the exclusive right to operate lotteries, betting and pools games. Thecompany's current gaming licence entered into force on 1 January 2007 and will be effective until the end of2011. Veikkaus has also adopted the Finnish Corporate Governance Code 2010.

The company's administrative bodies

Governing bodiesGeneral MeetingVeikkaus' highest administrative body is the General Meeting, which appoints the Board of Directors and theSupervisory Board in accordance with the company's Articles of the Association. The Ministry of Education and

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2010 During the period under review, one Annual General Meeting was convened andattended by the Minister of Culture and Sports (as the Finnish State's representative),officials from the Ministry of Education and Culture, the chairmen of the company'sBoard of Directors and Supervisory Board, the auditor, the CEO and other companyrepresentatives.

Culture is always represented at the Annual General Meeting and any potential Extraordinary GeneralMeetings, where it exercises its shareholder's voting rights. The State's representative from the Ministry ofEducation and Culture is the applicable Minister, Permanent Secretary, Permanent Under-Secretary, Director ofAdministrative Affairs or another official from the Department of Administrative Affairs.

Board of DirectorsAccording to the company's Articles of Association, Veikkaus' Board of Directors may have a minimum of fiveand a maximum of eight members. The Board of Directors consisted of eight members in 2010. The GeneralMeeting appoints the Chairman and Vice Chairman of the Board for one calendar year at a time. None of themembers of the Board belong to the company's operative management.

The tasks and responsibilities of Veikkaus' Board are determined by the Finnish Companies Act. The Boardconsiders all issues that have broad-ranging significance for the company. These include considering andmonitoring the company's strategic direction, key investments, risk management principles, annual action planand budget. The Board appoints the CEO and the Vice Presidents working directly under the CEO, and alsodetermines their salaries and other benefits.

The Board drafts an annual operational agenda that includes the primary tasks of the Board of Directors and itsChairman, a profile of the Board Committees, a meeting schedule and the issues to be addressed. The Boardalso conducts an annual self-assessment of its activities.

Every term, members give a declaration that is used to assess the independence of Board members. RiittaKaivosoja holds an office at the Ministry of Education and Culture. On the basis of their declarations, the otherBoard members are independent of both the company and its shareholder.

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2010 The Board of Directors convened seven times during 2010 with a participation rateaveraging 95 per cent. At its meetings, the Board focused on plans for realising thecompany's 2010-2013 vision. These measures have been divided into six categories,each with a specific primary goal:

1) ensuring responsibility2) ensuring operational viability both in Finland and internationally3) developing business strategy4) boosting marketing and strengthening the Veikkaus brand5) cost-efficiency in production and technology6) a functional organisation that can react quickly

2010 In addition to mandatory items, the 2010 Audit Committee also considered theprogress of the 2010 action plan and the Internet gaming service overhaul.

The 2010 Audit Committee consisted of Ari Lahti (Chairman), Jouko Ahtola, RiittaKaivosoja and Leena Paananen, who was replaced by Eva Liljeblom as of 26 April2010. During the period under review, the Audit Committee convened six times with anaverage attendance rate of 92 per cent.

The Board has two internal committees, the Audit Committee and the Personnel Committee, which makeregular reports to the Board.

The Audit Committee assists the Board of Directors in ensuring that the company's accounting and financialadministration are appropriately organised and monitored, and that internal control, risk management, and theexternal and internal audits are arranged in accordance with legislation, regulations and the operating principlesapproved by the Board of Directors. The Audit Committee's make-up, meeting practices and tasks have beendefined in the Audit Committee's rules of procedure, which have been approved by the Board of Directors.

The Audit Committee

• reviews the information contained in the interim reports, financial statements and annual report andassesses the adequacy of these reports

• assesses the adequacy and effectiveness of the company's internal control and risk management systems• handles the Corporate Governance Statement• approves the internal control function's annual action plan, reads the annual ac-tion plan for the external

audit, and studies reports on the company's internal audit and controls• assesses how well the company has complied with legislation, regulations and internal guideline

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2010 In addition to mandatory items, the 2010 Personnel Committee also focused onpreparing rec-ommendations on the long-term remuneration and commitment systemfor management.

The 2010 Personnel Committee consisted of Juha Niemelä (Chairman), LeenaHarkimo, Mikael Ingberg and Maija-Riitta Ollila, who was replaced by Leena Paananenas of 26 April 2010. During the period under review, the Personnel Committeeconvened six times with an average attendance rate of 92 per cent.

The Personnel Committee assists the Board of Directors in organisational development and in matters relatingto managerial appointments, employee incentive schemes and remuneration for the CEO and other executives.The Personnel Committee's make-up, meeting practices and tasks have been defined in the PersonnelCommittee's rules of procedure, which have been approved by the Board of Directors.

The Personnel Committee

• prepares recommendations on the general remuneration principles for manage-ment and personnel• prepares recommendations on issues relating to the CEO's salary and incentives, as well as the terms

and conditions relating to remuneration for those working directly below the CEO• assesses the performance of the CEO and Senior Management• assesses the organisation's structure and effectiveness• assesses the company's HR policy and practices

The Board of Directors' monthly and meeting fees (EUR) and attendance rates in 2010

TOTAL FEES ATTENDANCE

Monthly

fees, total

Meeting

fees, total

Total

fees

Boerd

meetings

Audit

Committee

Personel

Committee

Juha Niemelä

(Chairman)22,981 5,200 28,181 7/7 5/6

Leena Harkimo

(Vice Chairman)16,742 5,650 22,392 7/7 6/6

Jouko Ahtola 13,890 4,750 18,640 7/7 5/6

Mikael Ingberg 13,890 4,750 18,640 6/7 5/6

Riitta Kaivosoja 13,890 4,750 18,640 6/7 6/6

Ari Lahti 13,890 5,200 19,090 7/7 6/6

Eva Liljeblom 11,341 4,050 15,391 6/6 4/4

Maija-Riitta Ollila 3,058 - 3,058 0/1 0/1

Leena Paananen 13,890 5,750 19,640 7/7 1/2 5/5

Total fees 2010 123,572 40,100 163,672

Total fees 2009 105,600 43,220 148,820

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2010 The Supervisory Board convened five times during 2010. Special themes during 2010were changes in the operating environment and issues associated with amendments tothe Lotteries Act.

Supervisory BoardVeikkaus' Supervisory Board has 14 members. One member is a personnel representative, who also has anamed deputy. Other members reflect the relative strengths of parliamen-tary groups. The General Meetingappoints the Supervisory Board for a two-year term. The Supervisory Board appoints two of its members asChairman and Vice Chairman to serve for a period of one year at a time. Read the personal particulars ofSupervisory Board members.

The Supervisory Board is responsible for supervising the Board of Directors and the CEO's administration ofthe company, and for issuing a statement on the Financial Statements and Auditors' Report at the GeneralMeeting. Due to the special status of the company, the Supervisory Board acts an important forum forcooperation and discussion.

Supervisory Board members' monthly and meeting fees (EUR) and attendance rates in2010

Monthly fees, total Meeting fees, total Total fees Attendance

Ilkka Kanerva (Chairman) 12,000 1,000 13,000 5/5

Matti Saarinen (Vice Chairman) 7,200 1,000 8,200 5/5

Merikukka Forsius 6,000 800 6,800 4/5

Jukka Gustafsson 6,000 600 6,600 3/5

Tuomo Hänninen 6,000 600 6,600 3/5

Heli Järvinen 6,000 800 6,800 4/5

Antti Kaikkonen 2,984 600 3,584 3/3

Jari Leppä 6,000 800 6,800 4/5

Heikki A. Ollila 6,000 800 6,800 4/5

Sirpa Paatero 6,000 600 6,600 3/5

Aila Paloniemi 6,000 600 6,600 3/5

Juha Rehula 3,000 200 3,200 1/2

Kari Uotila 6,000 1,000 7,000 5/5

Ulla-Maj Wideroos 6,000 600 6,600 3/5

Riitta Nissi (hlöstöedustaja) - - - 5/5

Total fees 2010 85,184 10,000 95,184

Total fees 2009 84,624 8,800 93,424

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2010 The Strategic Executive Team had, in addition to the CEO, seven members during theearly part of the financial year and five members during the latter part. The StrategicExecutive Team convened seven times during 2010. The Operative Executive Teamhad 13 members and was chaired by the Executive Vice President. The OperativeExecutive team convened a total of 47 times.

There were changes in the company's management during the year under review.Executive Vice President Jussi Isotalo retired in March after twenty-two years withVeikkaus. Olli Sarekoski, Senior Vice President, Business Operations, was appointedas the new Executive Vice President. Marilene Mäkipää, Vice President, Finances, leftthe company in May and was replaced by Financial Manager Maija Hjelt. Hjelt joinedthe Strategic Executive Team on 1 January 2011.

Company ManagementThe CEO manages and supervises the company's business operations in accordance with the FinnishCompanies Act and in line with the strategy and guidelines approved by the company's Board of Directors. TheStrategic and Operative Executive Teams assist the CEO in this task. The Strategic Executive Team's tasksinclude drafting the company's strategy, action plan and a budget proposal for consideration by the Board ofDirectors, as well as making decisions on and monitoring significant projects and investments.

The Board of Directors appoints Veikkaus' CEO and the Vice Presidents working directly under the CEO. Themembers of both Executive Teams file annual stakeholder reports. On the basis of these reports, all themembers of the Executive Teams are independent of the company's stakeholders.

Benefits, bonuses and incentivesEmployees who joined Veikkaus before 1 January 1994 may retire at a maximum age of 63. Management donot enjoy any special benefits, except for the CEO's and Executive Vice President's supplementary pensionschemes, which are based on a retirement age of 63 and a target pension of 66 per cent of salary. The targetpension is calculated on the basis of the last five years' income. Management executives are not entitled to ashare-based or any other long-term incentive system.

The CEO has a six-month notice period. On the termination of his or her contract of employment, the CEO isentitled to compensation corresponding to twelve months' salary. Executives have a two-month notice period.On the termination of their employment contracts, members of the Strategic Executive Team are entitled tocompensation corresponding to nine months' salary and members of the Operative Executive Team tocompensation corresponding to six months' salary.

Veikkaus has an incentive scheme that covers all personnel. This scheme includes discretionary performance-based bonuses (personal salary raises from 2011 onwards), special bonuses and performance incentives.

The performance incentive is an annual onetime payment based on how successful the company has been inachieving its strategic goals. Function and unit-specific targets and benchmarks are set as part of the

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operational planning process. Incentives for both management and personnel are linked to promotingresponsibility: performance incentives are only paid if responsibility benchmarks are achieved. The company'ssuccess in achieving its objectives is assessed at the end of the financial year, and the size of the incentivespaid is calculated as a percentage of the recipient's annual salary. The maximum percentage varies from 7 to30 per cent, depending on personnel group, with a 40 per cent maximum for the CEO.

Incentives for the CEO and Executive Teams involve targets in three areas. The first covers trends in thecompany's operating profit. The second aims at enhancing responsibility and customer relations throughregistered gaming. The third deals with selected focal areas from the company's scorecard. In addition tosuccess in the previously mentioned areas, the CEO's incentive includes a ten-percentage-point portion basedon an overall evaluation by the Board of Directors.

The Board of Directors determines incentives for members of the Strategic Executive Team and the bases forawarding performance incentives to all personnel. Special bonuses and discretionary performance-basedbonuses are determined by the Human Resources Steering Group.

2010 fixedportion*

2010 variableportion*

2009 fixed

portion

2009 variable

portion

CEO 326,530 128,650 320,849 86,603

Other members of the Executive

Teams1,814,510 540,434 1,829,555 396,026

Total 2,141,040 669,084 2,150,404 482,629

* The fixed portion includes monthly salary, fringe benefits and additional holiday pay. The variable portion is a performance-based

incentive.

Supervision of gaming activitiesIn accordance with the Lotteries Act (1047/2001), Veikkaus' lottery, pools and betting operations are supervisedby the Ministry of the Interior's National Police Board. The Ministry approves the regulations governing gamingand the National Police Board supervises compliance. In order to ensure that Veikkaus complies with legislationand regulations, the company engages in continual dialogue with representatives of both the Ministry of theInterior and the National Police Board.

Veikkaus' gaming activities are monitored by Ministry-appointed supervisors who also confirm the results andprizes for each round of a game. The Ministry handles players' complaints concerning prize payouts and issuesa recommended decision.

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2010 44 recommended decisions were issued in 2010 compared to 56 in 2009.

In addition to the gaming industry's security certificate, Veikkaus has also beenawarded information security and quality certificates. External supervisors ensure thatthe company operates according to these standards. Det Norske Veritas (DNV) auditsVeikkaus' compliance with the World Lottery Association Security Standards WLA-SCS:2006. Compliance with the ISO 9001:2008 quality standard and ISO 27001:2005information security standard is assessed by Inspecta Sertifiointi Oy, which conductedtwo audits in 2010.

Internal control

Overview of internal control

Veikkaus' internal control model is based on the COSO ERM framework. Internal control is a process that helpsthe Board of Directors and operative management to obtain adequate assurance that

• operations are profitable, efficient, responsible and consistent with the company's strategy• financial reporting and other information used by management is reliable, sufficient and up to date• the company complies with legislation and regulations, game rules and the gaming licence, and its internalrules and guidelines.

Processes of internal control

Internal control and risk management are not separate processes - they are a fundamental aspect of all ofVeikkaus' operations. Veikkaus' internal control covers all strategies, processes, practices and organisationalstructures that contribute to the attainment of Veikkaus' targets.

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Control Environment

The company's mission and values

Veikkaus' mission and values form the basis for internal control. Veikkaus' mission is to operate games reliablyand responsibly.

The company's values are based on its mission ‘A Finn to Win' and its vision ‘The world's best gaming companyin 2013'. Veikkaus' vision steers the company towards excellence. Veikkaus' values - ‘For the common good,responsibly, reliably and creatively' - guide the company's activities.

Management and steering system

Operation planning and setting targets form the basis of Veikkaus' management. The company's management,planning and steering are based on the company's vision. Long-term strategic goals are derived from Veikkaus'vision, and these are in turn used to set annual goals in the form of a company-level scorecard.

During operational planning, the scorecard's annual strategies are converted into important unit-specificoperative targets, measures and benchmarks, and also personal goals for employees. Sufficiently challengingtargets and benchmarks pave the way for success and operational development and efficiency. Measuresbased on regular monitoring and assessments steer the company's operations.

Veikkaus' performance barometer, which identifies and defines benchmarks for the most influential successfactors, is a key tool for ensuring the continuous improvement of operations. The performance barometeridentifies trends in Veikkaus' performance rate and has been integrated into both planning processes andmonitoring.

The company's administration has been organised in accordance with the Finnish Companies Act and theFinnish Corporate Governance Code. Read the tasks and responsibilities of the Board of Directors, CEO andother members of the Executive Teams. (Linkitä!) Veikkaus' organisation consists of six different functions.Each function has its own steering group, which makes decisions at the chairman's discretion. In addition toeach function's steering group, operations are also steered by a variety of separate steering groups whosetasks include coordinating working practices in, for example, personnel and ICT matters.

Veikkaus' management model is functional, but core processes have been identified and are used to steer anddevelop operations. Three core processes have been identified for realising Veikkaus' business strategy: theservice process, R&D process and steering process. Veikkaus also has support processes, such as financialand HR management processes, which ensure that core processes can operate.

Data systems

Veikkaus' business is entirely reliant on technical systems. The game system consists of a central system thatis connected to retailers' sales terminals, the Internet channel and support systems. Reliability is a crucial factorin gaming operations. Veikkaus' game systems aim for a high level of usability. Technical back-ups cover notonly the game system, but also the support systems that control and monitor gaming.

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Rules, guidelines, regulations and legislation

Veikkaus' operations are governed not only by its values, but also by its rules, guidelines and operatingprinciples. Veikkaus' management and steering system and organisational structure (Linkitä!) steer internalcontrols for the efficiency, effectiveness, responsibility and strategic consistency of operations.

The internal control of financial reporting has been planned to provide reasonable assurance of its reliability andcompliance with current legislation, regulations and accounting standards. Veikkaus has voluntarily adoptedinternational IAS/IFRS standards in its financial reporting. In addition to legislation, Veikkaus' financial reportingis also governed by the company's standing orders on commercial transactions and other financial guidelines.These cover, for example, key financial administration principles and the authorisation of individuals or bodiesto grant approvals. The operating models for financial reporting have been described and defined in therelevant regulations, working instructions and process descriptions.

Compliance activities have been defined in a separate Compliance programme, which is part of riskmanagement and internal control. Within the framework of this programme, Veikkaus regularly and continuallymonitors its operations, identifies potential areas for development, and undertakes measures to correctproblems.

Compliance activities are controlled by, for example, the Lotteries Act, which governs gaming. The Actregulates the provision and supervision of lotteries, the payment and intended use of lottery profits, andsupervision of how this profit is used. Operations are also regulated by the gaming licence issued by theCouncil of State. This licence contains regulations concerning the industry, game rules and the percentagesthat should be paid to customers as prizes. The Lotteries Act, gaming licence and game rules also govern thecompany's financial reporting and accounting.

Risks and risk management1. Risk managementVeikkaus' risk management is part of the company's COSO ERM framework. A risk is defined as any real orpotential event, action or omission that would weaken the company's chances of attaining its targets. Riskmanagement has been integrated into operational planning to enable the regular identification and evaluation ofboth the risks inherent in Veikkaus' business operations and strategic goals and the preparations that havebeen made for them.

Responsible parties and risk management measures are assigned to the most significant risks. Thesemeasures are included in the company's action plans, operating models and other processes. Riskmanagement measures are monitored as part of the supervision of operational planning and other internalcontrols.

Veikkaus' Strategic Executive Team is in charge of the company's risk management. The Team is assisted by aspecially appointed Risk Management Group, which develops the company's risk management process,participates in risk identification, coordinates risk evaluation and prioritisation, and ensures that riskmanagement processes run smoothly.

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In addition to company-level risk management, the risks associated with financial reporting, Compliance,operative functions and Veikkaus' business are also evaluated as part of the company's everyday operations.The head of each responsibility area is in charge of conducting these assessments.

The risk management process – strategic risks

2. RisksVeikkaus' risk management has been divided into three main categories.

Veikkaus' most significant long-term uncertainty factors are changes in legislation and the Finnish nationalgaming system, and issues concerning ICT, data systems and management models.

2.1 Legislation and the national gaming system

Changes in Veikkaus' operating environment, and in particular the national gaming system and the LotteriesAct, are central to determining whether the industry will continue to operate as a monopoly, which has aconsiderable impact on the company's market share, profitability and operating models. The juridicalenvironment is affected by both Finnish and EU-level legislation.

Gaming regulations have not been standardised within the European Union, so regulations are implemented ata national level. The resolutions of the Court of Justice of the European Communities play a central role insteering gaming operations. Veikkaus continually monitors the Court's resolutions and their impact.

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2010 The key risks in 2010 were uncertainty factors connected to the scheduling andfunctionality of the Internet gaming service revamp. Risks associated with theamended Lotteries Act, such as the processing schedule and its impact on theindustry's playing field, also constituted an uncertainty factor. The Internet revampcarried out in the autumn can be considered a great success that achieved itsobjectives.

In November 2007, the Ministry of the Interior launched a project to amend the Lotteries Act in two stages inaccordance with the objectives already recorded in that year's government platform. These objectives were toretain the State's industry monopoly, to limit social problems associated with gaming and to prevent crime.

The amendments contained in the first stage came into force on 1 October 2010. These included regulations onmarketing, new legal provisions regarding penalties, a new age limit and changes to the jurisdiction ofsupervisory authorities. Proposals for the second stage are contained in the government bill 207/2010. The billproposes a shift from the current system of official licences to a legal monopoly, and that betting on horseevents be centralised at Fintoto Oy. The second stage went before Parliament in October 2010. A declarationwas also sent to the European Commission, which issued a warning on the bill in December 2010.

2.2 ICT functions and data systems

ICT functions and data systems are a core aspect of Veikkaus' business. The growing number of game eventsand the increasing complexity of game systems, as well as the impact they have on reliability, pose additionalchallenges. Reliability has a direct impact on customer commitment.

The functionality of key systems is actively monitored, and systems are regularly evaluated and tested. Theuninterrupted operation of key systems has been ensured with, for example, adequate back-up systems, spareequipment, a continuity plan, and regular testing of systems and plans. Both the game system and vital supportsystems have been designed to be fault tolerant and are equipped with back-up systems.

2.3 Management models

The major challenge facing management is to adapt the company's operations to changes in the operatingenvironment and to implement any changes in a timely and efficient manner. The company's organisationalstructure has been simplified and streamlined to facilitate this process. Operational planning is now conductedover a shorter timeframe - plans will now be drawn up every six months instead of annually. Regular scenariowork is also being employed to identify key changes in the operating environment in good time.

2.4 Short-term risks

Veikkaus predicts that the most significant risks threatening the attainment of its 2011 objectives will beuncertainty factors associated with the second stage of the Lotteries Act. There is also an inherent risk inmaking changes to products and delivery channels - how well will the changes be received and will customersapprove of them? Successful updates to key products and their impact on customer numbers, turnover andprofitability are uncertainty factors affecting Veikkaus' 2011 objectives.

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Another uncertainty factor that threatens Veikkaus' short-term financial targets are large prize payouts tocustomers in games with fixed odds, such as Keno and Fixed Odds Betting. In order to manage this risk, gamerules include maximum limits on prize payouts. The financial risks associated with sports games in particularare actively monitored on a daily basis and action is taken when necessary.

The key risk in financial reporting concerns the company's game system and recording gaming transactions.This process involves a considerable number of gaming transactions, an average of about 6.9 million per week.Internal and external audits are used to conduct regular checks of the transaction recording process and theaccuracy of the data generated. Systems are also regularly synchronised to ensure consistency betweenfinancial reporting, the game system and other auxiliary accounting systems.

Supervision and control measures and supervisory responsibilitiesSupervision and control measures consist of those procedures, guidelines and regulations that ensurecompliance with the company's operating principles and help the company to attain its objectives. Thesesupervision and control measures help to identify and manage those risks that pose a threat to the attainmentof these objectives.

The management and steering system and its associated operational planning and monitoring form a corecomponent of Veikkaus' internal control. The control function also includes approval procedures, grantingauthorisations, detailing employees' tasks, back-up procedures, securing assets, and data system controls. Thecompany's operative management has been authorised to make decisions in specific areas. Read the internalcontrol tasks of the Board of Directors and its Committees.

At company level, the Operative Executive Team and its chairman are responsible for ensuring the efficiency ofoperations and operative functions. The Vice President, Strategy and Development, is in charge of coordinatingstrategic planning and targets. The Vice President, Finances, is responsible for the internal control of financialreporting, while the Vice President, Legal Affairs and Human Resources, is in charge of compliance. The VicePresident, Production, is responsible for monitoring ICT operations and data systems.

Communications and public relationsA key component of internal control is adequate, reliable and correctly timed information that enables thecompany to monitor its progress towards achieving its objectives. Successful internal communications andmanagement reporting ensures that any risks that threaten the company's key objectives will come to theattention of the Board of Directors and the Executive Teams.

Risk factors associated with efficiency, financial objectives and the operating environment are regularlydiscussed at Board meetings. A more extensive review of risk management is presented to the Board ofDirectors once a year. Annual reports are also made to the Board of Directors and Executive Teams as part ofthe Compliance programme. The Board also receives regular reports concerning changes in key legislation andthe policies of the Court of Justice of the European Communities. Management provide status reports on theirareas of responsibility and make regular reviews of any changes in administration and steering systems, ICToperations, reporting principles and, in particular, legislation.

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During operational planning and budgeting, reports are made on any threats that would prevent the companyfrom implementing its action plan and thereby realising its strategy. All functions are required to inform theExecutive Teams of any risk factors in their areas of responsibility.

The company's intranet and a variety of briefings are used to inform personnel of strategic objectives,budgetary targets and the goals contained in the action plan, as well as how they are to be realised. Operatingmodels for financial reporting are available on the intranet and are therefore accessible to all those involved infinancial reporting. Operating models, rules and guidelines are also communicated to personnel throughtargeted training.

MonitoringThe Board of Directors and its Committees assess the adequacy and effectiveness of internal controls and riskmanagement. The Board's Audit Committee ensures that appropriate internal controls are in place for financialadministration and accounting. The Board and the Audit Committee receive regular information on thecompany's progress towards attaining its objectives in the form of profit reports and forecasts, budget andaction plan reports, and other key benchmarks.

This information is compared to the budget, the previous year and other key figures. Any major changes inreporting principles are handled by the Board's Audit Committee. Due to the central status of data systems and,in particular, the game system, the Board of Directors receives regular reports on developments in usability,functionality and cost-effectiveness.

The weekly monitoring of targets is the most valuable supervisory tool for Veikkaus' operative management.These reports can be used to evaluate key financial and operative benchmarks. Monthly financial reports andquarterly reports can also be compared to assess progress in the company's strategic objectives, businessplans, and other plans and measures. The Financial Administration, Strategy and Development, and CustomerRelations and Business Intelligence units support the Executive Teams and the company's operations byproducing and analysing information than is essential for attaining the company's objectives.

The reporting and supervisory mechanisms used to monitor the company's business and operations hold a keyposition with regard to internal control and, in particular, when as-sessing the effectiveness, efficiency,responsibility and strategic consistency of operations. Functions and their heads are required to ensure that theprocesses and supervisory mechanisms within their areas of responsibility are appropriately arranged.

Financial reporting processes are regularly assessed and updated in accordance with current legislation,regulations, the reporting standards governing financial statements, and any other requirements concerningfinancial reporting. The company's auditors conduct an annual assessment of financial reporting controls andtheir effectiveness.

As part of its Compliance programme, Veikkaus continually monitors its operations, identifies potential areas fordevelopment, and undertakes measures to correct problems. Compliance activities monitor the operatingenvironment, and the programme is updated to reflect current legislation, Veikkaus' gaming licence and anyother requirements.

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2010 A Veikkaus employee is appointed to take responsibility for the internal audit incooperation with external partners. In 2010, Veikkaus' partners were Ernst & Young Oyand PricewaterhouseCoopers Oy. The internal audit covers the entire organisation andfalls under the jurisdiction of the Vice President, Legal Affairs and Human Resources.Reports on the internal audit are made to the Board of Directors' Audit Committee.

During the period under review, internal audits have been conducted on, for example,game risk management and processes associated with financial reporting and R&D.

2010 The audit for the period under review assessed the appropriateness of the internalcontrols used in financial administration, as well as the accuracy of the informationgenerated by the company's accounting and its key support systems. During the yearunder review, there were external audits of, for example, game system controls andinternal control arrangements.

Internal and external auditIn addition to the previously mentioned continual monitoring, internal and external audits are also used toassess internal controls and their effectiveness in various sub-areas.

In accordance with the company's approved operating principles, the internal audit assesses the adequacy,reliability and effectiveness of risk management, supervision and administrative processes. The internal auditalso assesses whether operations comply with legislation, regulations and guidelines, and seeks to prevent anypotential malpractice.

According to the company's Articles of Association, the General Meeting appoints the auditor, who must be anauditor or audit firm authorised by the Central Chamber of Commerce (KHT). KPMG Oy Ab is the company'scurrent auditor, and Authorised Public Accountant Lasse Holopainen has been chief auditor since 2004.Veikkaus regularly invites bids from auditors, the last occasion being in 2009. In accordance with the company'sArticles of Association, the auditors are appointed until further notice. The auditors report to the Board ofDirectors' Audit Committee and the auditor attends the General Meeting.

Auditors' fees included in the purchase of services 2010 (EUR)

2010 2009

Audit 45,444 45,468

Other services* 146,288 167,707

Total 189,732 213,175

* Other services primarily involve technical audits that focused on the evaluation and testing of telecommunications and server data

protection.

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Corporate Governance Code and deviationsVeikkaus complies with the Finnish Corporate Governance Code 2010 (following the Comply or Explainprinciple) and the ownership policy guidelines issued by the Ministry of Education and Culture on 23 September2010. On 8 September 2009, the Cabinet Committee on Economic Policy also issued guidelines on theremuneration policies and pension schemes of state-owned companies.

The Corporate Governance Statement has been provided separately rather than as part of the Report of theBoard of Directors. The section covering internal control includes a de-scription of the internal controls used infinancial reporting and the main features of the company's risk management systems. The Finnish CorporateGovernance Code 2010 is publicly accessible at www.cgfinland.fi.

Veikkaus' deviations from the Finnish Corporate Governance Code mainly stem from its ownership structureand relate to the specified aspects (in brackets) of the following rec-ommendations: recommendation 1(publishing the minutes of the General Meeting); recommendation 4 (the attendance of nominees for the Boardof Directors at the General Meeting); recommendation 11 (notifying shareholders of the nominees for the Boardof Directors); recommendations 28-30 (the appointment of a Nomination Committee and its operations);recommendation 42 (paying Board fees in shares); recommendation 51 (the Helsinki Exchange's guidelines forinsiders); recommendation 52 (notification of auditor candidates) and recommendation 55 (notifications on thecompany's website resulting from some of the aforementioned deviations).

Board of Directors 2010

Juha Niemelä

Chairman, born 1946M.Sc. (Econ.)D.Sc. (Econ.), h.c.D.Sc. (Tech.), h.c.Vuorineuvos (Finnish honorary title)

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Professional experience in the forestry industry from marketing management to business management; UPM-Kymmene, President & CEO 1994-2004A member of the Board since 10 October 2000, Chairman of the Personnel CommitteeOther current Board memberships: M-real Oyj, Powerflute Oyj, Green Resources A.S.Previous positions of trust: Confederation of European Paper Industries (CEPI), Chairman of the Board2000-2002

Leena Harkimo

Vice Chairman, born 1963Diploma in Business StudiesMember of ParliamentProfessional experience as the CEO of the Finnish ice-hockey team Jokerit and several terms as an MPA member of the Board since 1 January 2008, Member of the Personnel CommitteeOther current Board memberships: National Sports Council (Vice Chairman), Jokerit HC Oy (member of theBoard of Directors), WWF Finland (member of the Board of Trustees)Previous positions of trust: member of the Boards of Suomen Posti/Itella Corporation and Liikenneturva

Jouko Ahtola

born 1952M.Sc. (Econ.)CFO, The Federation of Public and Private Sector Employees (Jyty)Professional experience in financial administration and internal auditsA member of the Board since 1 January 2006, Member of the Audit Committee

Mikael Ingberg

born 1951Ph.D (Econ.)Professional experience as CEO of Samfundet Folkhälsan and Aktia BankA member of the Board since 1 January 2008, Member of the Personnel CommitteeOther current Board memberships: Oral Hammaslääkärit Oyj, Andelslaget Varuboden

Riitta Kaivosoja

born 1957Master of Laws (trained on the bench)Director General, Ministry of Education and CultureProfessional experience in management positions and expert tasks at the Ministry of Education and CultureA member of the Board since 1 January 2008, Member of the Audit Committee

Ari Lahti

born 1963Lic. Soc. Sc.Managing Director, ICECAPITAL Pankkiiriliike LtdProfessional experience in management positions and expert tasks in financial and capital marketsA member of the Board since 1 January 2002, Chairman of the Audit Committee

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Other current Board memberships: Oy Turo Tailor Ab, companies in the ICECAPITAL GroupPrevious positions of trust: member of the Boards of Wulff Group plc and Helsinki Stock Exchange

Eva Liljeblom

born 1958D.Sc. (Econ.)Rector, Hanken School of EconomicsA member of the Board since 18 March 2010Other current Board memberships and positions of trust: Chairman of the State Pension Fund'sInvestment Consultative Committee in Finland; member of the Boards of Kirkon keskusrahaston eläkerahasto,Kuntarahoitus Oyj, Fennia Mutual Insurance Company, Hanken School of Economics, Stockmann Oyj andCatella Property OyPrevious positions of trust: member of the Boards of Sonera Corporation, TeliaSonera AB (publ), MetsoCorporation and The State Pension Fund - Utlandet, Stategirådet

Leena Paananen

born 1950M.Sc. (Econ.)Partner, Ovia OyProfessional experience in management positions at marketing communications and media companiesA member of the Board since 1 January 2000, Member of the Audit Committee until 26 April 2010, Member ofthe Personnel Committee from 26 April 2010Other current Board memberships: A-Lehdet Oy, Kalevala Koru Oy, Juuriharja Consulting Group, HelsinginMusiikkitalo OyPrevious positions of trust: memberships and chairmanships of the Boards of the Salomaa Group and itssubsidiaries

Supervisory Board 2010Member of Parliament Ilkka Kanerva, ChairmanMember of Parliament Matti Saarinen, Vice ChairmanMember of Parliament Merikukka ForsiusMember of Parliament Jukka GustafssonMember of Parliament Tuomo HänninenMember of Parliament Heli JärvinenMember of Parliament Jari LeppäMember of Parliament Heikki A. OllilaMember of Parliament Sirpa PaateroMember of Parliament Aila PaloniemiMember of Parliament Juha Rehula, until 2 July 2010Member of Parliament Antti Kaikkonen, from 2 July 2010Member of Parliament Kari UotilaMember of Parliament Ulla-Maj Wideroos

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Personnel representatives

Head of Communications Riitta NissiProduction Controller Teijo Loikkanen, Deputy Personnel Representative

Official Supervisors and Auditors

Official Supervisors

Chief Police Inspector Reijo HyytiäinenAdministrative Officer Hannele JuuselaChief Police Inspector Seppo JuvonenSenior Officer Kirsi HackDirector, Police College of Finland Seppo KolehmainenChief Police Inspector Mia PoutanenInspector General of the Police Reijo PöyhönenChief Police Inspector Seppo RuotsalainenChief Security Officer Kari SantalahtiHead of Press and Communication Services Kaija Uusisilta

Auditors

Authorised Public Accountant Lasse Holopainen, KPMG Oy Ab

Strategic and Operative executive teamsVeikkaus' operations are steered by two executive teams: the Strategic Executive Team and the OperativeExecutive Team.The Strategic Executive Team prepares recommendations for the Board of Directors on the company'sstrategy, action plan and proposed budget, and also monitors and makes decisions on significant projects andinvestments. Veikkaus' President & CEO is Chairman of the Strategic Executive Team.The Operative Executive Team manages Veikkaus' routine operations at an operative level by carrying out thedecision-making and coordination required by the action plan and budget.

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Veikkaus' Senior Vice President, Business Operations, is Chairman of the Operative Executive Team.

Strategic executive team

President and CEO Risto Nieminen, Chairman

born 1951M.A.With Veikkaus 1989–2000 and from 2001Appointed CEO in 2001Previous experience as a CEO, Communications Director and MuseumDirector Member of the Executive Team since 1991

Executive Vice President Olli Sarekoski, Vice Chairman

born 1965M.Sc. (Econ.)Responsible for operative and business managementJoined Veikkaus in 2003Previous experience in management positionsMember of the Executive Team since 2003

Vice President, FinancesMaija Hjelt

born 1970Diploma in Business AdministrationResponsible for internal and external accounting, and real estate servicesJoined Veikkaus in 1988Member of the Executive Team since 2010

Vice President, Legal Affairs and Human ResourcesPekka Ilmivalta

born 1970Master of Laws (trained on the bench)Responsible for legal affairs and human resourcesJoined Veikkaus in 2003Previous experience as an advocate and with sports organisationsMember of the Executive Team since 2004

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Vice President, CommunicationsIlkka Juva

born 1952Joined Veikkaus in 2000Responsible for communications, corporate social responsibility, and stakeholder andmarketing cooperationPrevious experience as Editor-in-Chief of Länsi-Savo newspaper and as an editor at,for example, Uusi Suomi and Turun Sanomat newspapersMember of the Executive Team since 2000

Vice President, ProductionEsa Valtonen

born 1952B.Sc. (Natural Science)Responsible for information management, games production, production servicesand corporate securityJoined Veikkaus in 1991Previous experience includes management positions in information management andsoftware productionMember of the Executive Team since 1997

Senior Vice President, International Affairs and BusinessDevelopmentJari Vähänen

born 1965M.Soc.Sc.Responsible for international affairs and business developmentJoined Veikkaus in 1995Previous experience at, for example, the Finnish Trotting and Breeding Association(Hippos)Member of the Executive Team since 2004

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Operative executive team

Executive Vice PresidentOlli Sarekoski, Chairman

born 1965M.Sc. (Econ.)Responsible for operative and business managementJoined Veikkaus in 2003Previous experience in management positionsMember of the Executive Team since 2003

Senior Vice President, International Affairs and BusinessDevelopmentJari Vähänen, Vice Chairman

born 1965M.Soc.Sc.Responsible for international affairs and business developmentJoined Veikkaus in 1995Previous experience at, for example, the Finnish Trotting and Breeding Association(Hippos)Member of the Executive Team since 2004

Vice President, Customer Relations and Business IntelligenceAriAarnihuhta

born 1962Responsible for game product management and developmentJoined Veikkaus in 2003Previous experience in the gaming business at Oy Lottex Ab and Rautakirja, andalso in management positions for the Veikkausrasti chain of betting shops.Member of the Executive Team since 2008

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Vice President, FinancesMaija Hjelt

born 1970Diploma in BusinessAdministration Responsible for internal and external accounting, and real estateservicesJoined Veikkaus in 1988Member of the Executive Team since 2010

Vice President, Legal Affairs and Human ResourcesPekkaIlmivalta

born 1970Master of Laws (trained on the bench)Responsible for legal affairs and human resourcesJoined Veikkaus in 2003Previous experience as an advocate and with sports organisationsMember of the Executive Team since 2004

Vice President, CommunicationsIlkka Juva

born 1952Joined Veikkaus in 2000Responsible for communications, corporate social responsibility, and stakeholderand marketing cooperationPrevious experience as Editor-in-Chief of Länsi-Savo newspaper and as an editor at,for example, Uusi Suomi and Turun Sanomat newspapersMember of the Executive Team since 2000

Vice President, Public RelationsHannu Kareinen

born 1962Social Pedagogue (M.Soc.Sc.)Responsible for community relations and cooperation with beneficiaries Previousexperience at the Ministry of Education, Finnish Youth Cooperation – Allianssi andthe Finnish National Pesäpallo AssociationMember of the Executive Team since 2009

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Vice President, Brand and Marketing CommunicationsAmiMiettinen

born 1952 M.Sc. (Econ.)Responsible for customer relations management and development, and customerand retailer advisory servicesJoined Veikkaus in 2005Previous experience in marketing management positions for Canon and ElisaMember of the Executive Team since 200

Vice President, Strategy and DevelopmentKarri Paavilainen

born 1970M.Sc. (Econ.)Responsible for strategy programmes, management systems and businessintelligenceJoined Veikkaus in 2005Pervious experience in expert service development, sales and managementMember of the Executive Team since 200

Vice Precident, Product ManagementAntti Tiihonen

born 1974M.Soc.Sc.Responsible for digital channelsJoined Veikkaus in 1999Previous experience includes management positions in Veikkaus’ R&D and sportsgames operationsMember of the Executive Team since 2008

Vice Preseident, Digital ChannelsKimmo Tolonen

born 1960M.Sc. (Pedagogy)Responsible for the Veikkaus brand and product marketing, cooperation withtelevision, and commercially significant cooperation with sports associationsJoined Veikkaus in 2008Previous experience as a managing director and vice president, digital channels, inmarketing management positions, and with sports organisationsMember of the Executive Team since 2008

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Vice President, ProductionEsa Valtonen

born 1952B.Sc. (Natural Science)Responsible for information management, the production of games, productionservices and corporate securityJoined Veikkaus in 1991Previous experience includes management positions in information managementand software productionMember of the Executive Team since 199

Vice President, Sales NetworkNora Vähävirta

born 1969M.A.Responsible for retailer sales network management and retailer competencemanagementJoined Veikkaus in 2006Previous experience includes business consultancy and data system implementationat Accenture OyMember of the Executive Team since 2008

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Board of Directors' Report 2010Veikkaus Oy's 70th anniversary was a successful year. Veikkaus' strong earnings trend was exceptional in alottery market burdened by a generally weak economic climate. Our success is the result of systematic efforts incustomer relations and effectively harnessing customer knowledge in the development of products andservices.

Veikkaus' turnover amounted to EUR 1,689.9 million, the largest in the company's history. This represents agrowth of EUR 132.3 million (+8.5%) on 2009. The fastest growth was in Internet gaming (+25%). Oursuccessful overhaul of Internet gaming sought a responsible increase in business by offering safe gamingoptions to new target groups.

Veikkaus' profit for the financial year totalled EUR 503.7 million (+7.5%). This favourable earnings trend can beattributed to increased turnover in games with large margins in particular.

Veikkaus returned EUR 462.7 million to the Ministry of Education and Culture, to be distributed to Finnish arts,sports, science, and youth work. The difference between Veikkaus' profit and the sum returned, EUR 41.0million, will be distributed to the beneficiaries in a manner to be specified separately by the Ministry at a laterdate. During the financial year, Veikkaus paid the Ministry of Education and Culture a total of EUR 30.0 millionin undistributed prize funds accumulated over the previous years.

Veikkaus also paid EUR 76.1 million in lottery tax (+4.9%) to the State. As Veikkaus is not VAT liable, thecompany cannot deduct VAT on its purchases of goods and services. In 2010, Veikkaus paid a total of EUR22.3 million (+11.5%) in VAT to the State.

Lotto games fuel growthVeikkaus games are divided into three groups based on different motivational states: dreams (lotto games andJokers), leisure-time (sports games) and excitement (Keno, eBingo, Syke and instant tickets). The turnover ofall game groups increased during the financial year. Dream games generated turnover of EUR 762.4 million(+9.7%), leisure-time games EUR 381.7 million (+3.5%) and excitement games EUR 545.8 million (+10.5%).

The popularity of Plus prize tiers in lotto games (LottoPlus and VikingPlus) in particular had a significant impacton the increased turnover of dream games. The combined total sales of Plus prize tiers reached EUR 82.6million. A large Lucky Numbers jackpot, which reached a high of EUR 15 million, fuelled the increased turnoverof Viking Lotto (+17.0%) for many weeks early in the year. Joker was reformed in late 2009, which increasedthe turnover of Wednesday and Saturday Joker to a total of EUR 98.3 (+17.3%) million during the financialyear.

The turnover of Keno, Veikkaus' second most popular game, rose to EUR 346.5 million (+4.2%) in 2010. Therevamped eInstants were another type of excitement game that was also highly successful in 2010. Their full-year sales volume rose to EUR 34.6 million (+31.8%). Two new games - eBingo and Syke - were introduced aspart of the Internet gaming overhaul carried out in September. The popularity of eBingo in particular exceededinitial expectations. Over EUR 1 million a week was played on eBingo, and its turnover totalled EUR 19.7 millionby the end of the year.

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Strong growth in sports games was evident in Fixed Odds Betting (+12.6%) in particular. A wider range ofevents, higher payout percentages and the summer's 2010 FIFA World Cup increased the turnover of the mostpopular betting games.

A record-breaking number of prizes for playersDuring the financial year, players were paid a total of EUR 888.0 million (+12.2%) in prizes. History was madein November when Keno players were paid a total of EUR 10.2 million in prizes on a single day. This was tentimes the euro sum of the stakes played.

Veikkaus' retail commissions totalled EUR 85.1 million (+3.2%) in 2010. The costs incurred by draws andpublishing result information amounted to EUR 10.6 million (+1.3%). Playslip and ticket expenses totalled EUR7.5 million (-5.9%). EUR 14.7 million (+10.5%) was spent on product advertising, which included EUR 10.1million for the purchase of media space and EUR 0.1 million for distributing product information. Game eventcooperation cost EUR 3.6 million (-1.8%).

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Creating a good earnings trend responsiblyVeikkaus' strong earnings trend is based on our ability to create the best possible combination of responsible,customer-oriented operations and appealing products. Veikkaus offers a safe channel for gaming. This meanseffective protection for consumers and adequate limitations on gaming.

In 2010, Veikkaus invested over EUR 3.8 million (+6.6%) in measures to support and promote responsiblegambling. Veikkaus employs these measures to promote responsible gambling, honesty and increasedawareness of the existence and importance of the national gaming system, either in its own operations or incooperation with stakeholders.

For a company like Veikkaus, responsibility does not only involve gaming, but also extends to a responsibilityfor the environment. This is why Veikkaus is committed to its environmental programme and to reducingemissions. By the end of 2013, Veikkaus is aiming to have reduced its carbon footprint to 65 per cent of its2009 level. In 2010, Veikkaus received recognition for its environmental responsibility in the form of the 2009HSY ‘Preserver of Natural Resources' (Helsinki Region Environmental Services Authority's ‘Luonnonvarojensäästäjä') award. The award was presented for long-term efforts in reducing waste volumes.

Amended Lotteries ActThe amended Lotteries Act came into force at the beginning of October. New regulations include marketingrestrictions and a minimum age limit of 18 years. A new offence, the gaming offence, was added to the CriminalCode and carries a more severe penalty than the lottery offence. Marketing restrictions prohibit the marketing ofharmful games and the provision of gaming without a gaming licence. As far as Veikkaus is concerned, therestrictions mean that we can no longer market betting games and eInstants - only product information can besupplied.

In the autumn, the Finnish State sent a declaration to the European Commission regarding the second stage ofthe Lotteries Act. The second stage will, for example, regulate legal monopolies and the inspection of workdistribution between lottery companies operating under licence. In its white paper, the Commission did notquestion the monopoly system, but suspected that the various parties within the monopolies were competingamong themselves. In the warning issued by the Commission to the Finnish State in December, theCommission asked how competition promoted the achievement of the targets sought through a monopoly. Theright to a monopoly is founded on player protection and crime prevention.

Other major events of the periodVeikkaus opened a new Internet gaming service at the beginning of September. In addition to completelyredesigning the website's look and feel and diversifying its content, Veikkaus also launched two new games:eBingo (a community interaction game) and Syke (a lottery). The revamp seeks to ensure a steady increase inturnover in Veikkaus' online distribution channel, too, which already accounts for 26% of total sales. After therevamp, the weekly sales of Internet gaming rose by an average of about EUR 1.9 million. Both customerregistration and player activity is rising in accordance with targets, especially among young adults(18–39-years-old).

Veikkaus' good earnings trend is based on extensive customer information and knowledge. During 2010, thenumber of registered customers rose to over 1,223,000 (+13.6%). About 16,400 Finns registered as Veikkauscustomers every month. Registered gaming accounted for 43.7% of total sales (38.0% in 2009) and almost

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91% of those who have registered signed in to play during the year. In November, the Loyal Customer Forumchose Veikkaus' programme as customer loyalty programme of the year.

Veikkaus also received the Excellence Award Finland 2010 in recognition of its long-term development efforts.In addition to the award, Excellence Finland granted Veikkaus the five-star ‘Recognised for Excellence'emblem. According to the judges, Veikkaus has exhibited many of the trademarks of excellence in itsoperations, such as visionary, motivational and responsible leadership; personnel as a success factor; andforging partnerships. Veikkaus has also been a pioneer and role model in its industry.

International cooperation and active international engagement are an important part of Veik-kaus' operations.As well as furthering business development, cooperation also promotes responsibility in national gamingactivities. In November, CEO Risto Nieminen was elected Chairman of the World Lottery Association (WLA) fora two-year term. A total of 147 lottery companies in 92 countries belong to the association.

R&D focused on the Internet gaming revamp and customerrelationsVeikkaus spent a total of EUR 7.1 million (+44.9%) on research and product development during the financialyear. The year's key R&D investments centred on revamping the Internet gaming service and the new gameseBingo and Syke.

Veikkaus' own research focused on analysing customer information and behaviour. External research centredon the Gaming Research Foundation, which is funded by Veikkaus. The Gaming Research Foundationpromotes multi-disciplinary research on gaming as a social and cultural phenomenon. During the financial year,the foundation distributed EUR 185,350 to cultural research on gaming and projects in the fields of economicsand social sciences.

Personnel motivated by the meaningfulness of their work toFinnish societyAt the end of 2010, Veikkaus had 364 employees, of whom 326 were full-time and 38 part-time employees.Most employees (94%) had permanent employment contracts. Women numbered 199 and men 165 (Thecompany's personnel key figures and comparison figures are presented in more detail as part of the socialresponsibility report in the Personnel section).

During the year under review, 36 new employees were hired, 10 retired, 15 gave their notice, and the fixed-termemployment contracts of two people ended. The average personnel turnover was 8.7% (6.3% in 2009).

Veikkaus invests in personnel wellbeing in many ways. Employees are supported by, for example,comprehensive occupational healthcare, industrial safety, and activities to promote personnel's workingcapacity. Veikkaus also employs an early intervention system. During 2010, sick leave averaged 10.0 days peremployee (10.5 in 2009) and there were three work-related accidents that resulted in sick leave.

In the Great Place to Work 2010 survey, 83% of employees regarded Veikkaus as a good work-place.Personnel said they were motivated by the meaningfulness of their work to Finnish society. They were satisfiedwith the benefits and training opportunities offered by Veikkaus.

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In November-December, Veikkaus conducted co-determination negotiations in accordance with the Co-Determination Act. This led to a significant change in the company's organization. Fifteen employees (20%)transferred from managerial to expert positions. As a result of the reorganization, three employees were givennotice and the number of positions will be reduced by about fifteen in total over the following year. By makingthese changes, Veikkaus seeks cost-effectiveness, a smoother-running organization and optimally targetedresources.

Veikkaus' personnel expenses amounted to EUR 27.6 million (+5.8%) in 2010. Salaries accounted for EUR21.3 million, while the remaining EUR 6.3 million covered statutory personnel insurances, voluntary pensionexpenses and indirect personnel costs. Veikkaus' bonus scheme covers all personnel and its various formatsare closely tied to achieving the company's targets.

Control and risk managementIn accordance with the Finnish Lotteries Act (1047/2001), Veikkaus' lottery, pools and betting activities aresupervised by the Ministry of the Interior's National Police Board. Veikkaus' risk management and internalcontrol model is based on the COSO ERM framework. Risk management has been integrated into planningprocesses to enable regular identification and evaluation of both the risks inherent in Veikkaus' businessoperations and strategic goals and the preparations that have been made for them.

Veikkaus' most significant long-term uncertainty factors are changes in legislation and the Finnish nationalgaming system, and issues concerning ICT and data systems.

The key risks in 2010 were uncertainty factors connected to the scheduling and functionality of the Internetgaming service revamp. Risks associated with the amended Lotteries Act, such as the processing schedule andits impact on the industry's playing field, also constituted a significant uncertainty factor. (Veikkaus' riskmanagement and internal control is presented in more detail in the Corporate Governance 2010 section.)

Future prospectsVeikkaus' vision is to be the best lottery in the world by 2013. This vision guides us towards outstandingperformance. The core objectives in achieving this vision are: effectively channelling demand, productivity,increasing shareholder value, and responsible decision-making.

We seek to increase our profit responsibly, and in particular by reaching a broader customer base and bychannelling gaming into games that involve smaller risks from the perspective of gaming control. We also aim toincrease the number of identified gaming transactions. Veikkaus invests heavily in both digital and traditionalsales channels.

Parliament will continue to debate the second stage of the Lotteries Act in 2011. This Act is central todetermining whether the industry will continue to operate as a monopoly, which has a considerable impact onmarket share, profitability and operating models. Veikkaus considers it important that the monopoly isimplemented consistently, operations are organised efficiently and beneficiaries are treated fairly.

The major challenges with regard to operative functions are the growing number of customer events andincreasing the complexity of the system's structure to meet customer needs. The success of key product

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revamps and their impact on customer numbers, turnover and profitability constitute uncertainty factors for thecoming year's goals.

Veikkaus' projected profit in the 2011 State Budget is EUR 515.8 million, of which EUR 469.6 million has beenearmarked for return to the State. The company will also return EUR 46.2 million in undistributed prize fundsfrom previous years. In the light of current evidence, this level of income should be attainable.

The Board of Directors' proposal for the distribution of profitsThe Board of Directors proposes that EUR 462,723,938.77 of the company's total profit of EUR 503,723,938.77for the 2010 financial year be returned to the Ministry of Education and Culture, and that EUR 41,000,000.00 betransferred to the undistributed prizes' fund.

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Statement of comprehensive incomeNote 2010 2009

TURNOVER 1 1,689,902,160.62 1,557,633,786.99

Other operating income 3 2,359,672.71 2,087,407.35

Prizes 887,972,540.74 791,087,451.85

Lottery tax 76,117,302.28 72,551,654.81

Raw materials and services

Retail commissions 85,082,201.35 82,478,482.62

Payments to authorities and supervision fees 9,662,940.89 10,184,214.05

Playslips and lottery tickets 7,537,073.45 8,013,060.87

Drawing expenses and result service 10,617,998.37 10,479,975.33

Game event cooperation 3,622,645.55 3,690,741.25

Product advertising 14,671,804.88 13,273,412.69

Data communications 570,099.39 583,090.44

131,764,763.88 128,702,977.25

Expenses from employee benefits

Salaries and compensations 21,349,484.15 20,722,228.89

Pensions 5,174,507.77 4,366,877.68

Other indirect personnel expenses 1,110,108.70 1,036,543.70

27,634,100.62 26,125,650.27

Purchased services 5 23,488,033.47 17,017,577.24

Depreciations and write-downs 4, 8, 9 15,900,274.37 31,625,313.98

Other operating expenses 6 27,965,304.93 28,013,631.14

OPERATING PROFIT 501,419,513.04 464,596,937.80

Financial income and expenses

Financial income 7 2,304,868.58 4,181,068.88

Financial expenses 7 442.85 1,499.77

2,304,425.73 4,179,569.11

NET PROFIT FOR THE FINANCIAL YEAR 503,723,938.77 468,776,506.91

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Income/share *)

Number of shares 498 498

Income per share (EUR thousand) 1,011 941

*) Income per share has been calculated by dividing the profit for the financial year by the number of shares.

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Balance sheetNote 2010 2009

ASSETS

NON-CURRENT ASSETS

Tangible assets 8 39,392,854.53 38,215,172.68

Intangible assets 9 49,897,747.08 33,000,749.06

Investments available for sale 11 481,647.26 481,647.26

OTHER RECEIVABLES

Advance payments 373,766,938.37 352,447,315.48

Receivables 12 16,462,730.82 15,105,138.95

Liquid funds 13 245,928,422.89 220,934,338.48

TOTAL ASSETS 725,930,340.95 660,184,361.91

SHAREHOLDERS' EQUITY AND LIABILITIES

SHAREHOLDERS' EQUITY

Subscribed capital 14 445,698.01 445,698.01

Undistributed prizes' fund 14 113,817,449.45 89,067,449.45

Profit for the financial year 503,723,938.77 468,776,506.91

Total shareholders' equity 617,987,086.23 558,289,654.37

LIABILITIES

LONG-TERM LIABILITIES

Liabilities arising from employee benefits 16 1,891,000.00 2,324,000.00

Other long-term liabilities 16 441,789.20 464,616.20

SHORT-TERM LIABILITIES

Advances for multi-week subscriptions 15 18,106,150.04 16,107,133.97

Trade payables 15 5,716,466.92 7,153,117.30

Winnings payable 15 32,930,092.21 25,785,935.92

Settlement debts to the State 15 14,841,202.84 15,558,983.14

Accruals and deferred income 15 21,014,820.15 20,784,932.17

Other short-term liabilities 15 13,001,733.36 13,715,988.84

TOTAL SHAREHOLDERS' EQUITY ANDLIABILITIES 725,930,340.95 660,184,361.91

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Cash-flow statementEUR thousand Note 2010 2009

Cash flow from business operations

Operating profit 501,420 464,597

Adjustments

Business operations with no related payment transaction 15,858 41,395

Change in working capital

Change in non-interest bearing receivables -1,358 -1,693

Change in trade and other payables -23,951 -47,228

Dividends received 2 2

Interest received 2,303 4,179

Interest paid 0 -1

Net cash flow from business operations 494,272 461,251

Cash flow from investments

Investments in tangible and intangible

assets 10 -34,009 -30,714

Sales of tangible and intangible

assets and investments 76 10,203

Repayments on loan receivables 0 2

Net cash flow from investments -33,932 -20,508

Cash flow from financing

Returned to the Ministry of Education and Culture -435,346 -427,945

Net cash flow from financing -435,346 -427,945

Change in liquid funds 24,994 12,798

Liquid funds at the beginning of the financial year 220,934 208,137

Liquid funds at the end of the financial year 245,928 220,934

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Changes in shareholders' equity

EUR thousand

Sharecapital

Reservefund

Undistributedprizes' fund

Retainedearnings

Totalshareholders'

equity

Shareholders' equity 31 Dec 2008 169 276 94,867 449,135 544,449

Return to the Ministry of Education and

Culture -407,935

Transferring the reserve fund into share

capital 276 -276 0

Transfer to the undistributed prizes' fund 41,200 -41,200

Additional transfer to the Ministry of

Education and Culture -47,000 0

Net profit for the financial year 468,777

Shareholders' equity 31 Dec 2009 446 89,067 468,777 558,290

Return to the Ministry of Education and

Culture -414,027

Transfer to the undistributed prizes' fund 54,750 -54,750

Additional transfer to the Ministry of

Education and Culture -30,000

Net profit for the financial year 503,724

Shareholders' equity 31 Dec 2010 446 113,817 503,724 617,987

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Accounting principles 2010Corporate profileVeikkaus Oy is a Finnish lottery domiciled in the City of Vantaa. Its operations are regulated in accordance withthe Lotteries Act and its gaming licence, effective until 31 December 2011. Veikkaus is a State-owned, publiclimited company that operates in the administrative sector of the Finnish Ministry of Education and Culture. Itsgaming operations are supervised by the Ministry of the Interior.

The Board of Directors of Veikkaus Oy approved these financial statements for publication at its meeting on 7February 2011. According to the Finnish Companies Act, the owner has the right to approve or reject or decideto make changes to the financial statements at the General Meeting following their publication.

Basis of presentationThese financial statements have been prepared in accordance with the IFRS standards effective on 31December 2010. IFRS standards refer to the international accounting standards accepted for use within the EU.

The notes to the financial statements also comply with the requirements of the Finnish Accounting Act andCompanies Act, supplementing the IFRS standards. Veikkaus has adopted the new IFRS 3 BusinessCombinations standard, which was amended in 2010. This would affect Veikkaus' financial statements if thecompany were to make any acquisitions. According to the standard, the contingent purchase price is measuredat fair value and any later change is recognized through profit or loss. All expenses associated with anacquisition, such as expert fees, are now entered as expenses rather than capitalisation. Veikkaus has alsoadopted the annual Improvements to IFRSs. The Annual Improvements process deals with minor and non-urgent but necessary amendments to the standards by publishing them in single exposure draft once a year.

The other new or amended standards and interpretations do not have a material impact on Veikkaus' financialstatements.

General remarksThe figures in the financial statements, except for the balance sheet and comprehensive income statement, arepresented in thousands of euros and, unless otherwise indicated in the accounting principles below, are basedon the original acquisition costs.

When preparing financial statements in accordance with international accounting standards, it is necessary tomake estimates and assumptions about the future. These estimates have an effect on the asset and liabilityfigures in the balance sheet, as well as on the net profits and losses for the financial year. The most importantestimates in Veikkaus' financial statements concern the depreciation periods of fixed assets and theassumptions used for calculating pension-based liabilities. Realized figures may therefore deviate from theseestimates. Judgement must also be exercised in the application of accounting policies.

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Items in foreign currencyVeikkaus' functional currency is the euro. Foreign currency business transactions have been recorded in eurosusing the prevailing exchange rate on the transaction date. Receivables and liabilities have been translated intothe functional currency using the prevailing rate on the financial statement date. Profits and losses arising fromforeign currency transactions and the translation of receivables and liabilities have been recorded in the incomestatement. The translation profits and losses of business operations are included in the respective items abovethe operating profit. Veikkaus had no foreign currency receivables or liabilities on the financial statement date.

Property, plant and equipmentProperty, plant and equipment have been measured at their original acquisition cost less the accumulateddepreciations in the balance sheet. The share of the company's own work, entered into intangible assets, iscapitalized as part of the acquisition cost. An asset's subsequent expenses are capitalized when they increasefuture financial benefit. Other expenses, such as standard maintenance and repair, are recorded as costs in theincome statement on the date of occurrence. Any expenses incurred by the game system's joint testing systemduring the introduction of new games or eInstants are recorded as expenses on the date of occurrence.

Depreciation periods for property, plant and equipment (years):

• buildings and structures 25• basic apartment renovations 5• property fixtures, machinery and equipment 5• other machinery and equipment 4• IT software and devices 4-6

The profits and losses resulting from the sale or surrender of property, plant and equipment are recorded asother operating income and expenses in the comprehensive income statement. The balance sheet values ofproperty, plant and equipment are examined in the financial statements to detect possible impairment.

Research and developmentResearch costs are recorded as expenses for the financial year during which they occurred. Expenses relatedto the development of new products, offerings, and processes are capitalized if the intangible asset resultingfrom the development work will generate future financial benefit. Any costs incurred by development must bereliably definable.

Loyal Customer ProgrammeVeikkaus uses a Loyal Customer Programme for registering customers. The Loyal Customer Programme doesnot contain any benefits based on purchases. Veikkaus' Loyal Customer Programme does not comply with theIFRS standards' IFRIC Interpretation 13 Customer loyalty programmes.

LeasesIn accordance with the rental agreements made by Veikkaus, the lessor retains the risks and benefits ofownership, and payments made under operating leases are charged to the comprehensive income statementon a straight-line basis over the period of the lease.

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Financial assets and liabilitiesFinancial assets are divided into different categories at the time of acquisition. Their categorization depends onthe purpose the financial asset has been acquired for. The sales and purchases of financial assets are recordedon the transaction date.

Long-term investments held for sale include stocks, shares and marketable interest instruments. They aremeasured at fair value. Untraded stocks are measured at acquisition cost, as their fair value cannot be definedreliably.

Loans and other receivables include sales and other receivables, as well as bank deposits. The differencebetween retailers' sales and retail commissions and the prizes they pay out is recorded under salesreceivables.

Financial liabilities include short-term liabilities with no interest.

Short-term investments held for sale, financial liabilities, and the loans and other receivables group have shortmaturity periods and their fair values are therefore considered to correspond to their carrying amount.

The carrying amount of the investments included under financial assets is measured at fair value due to theinvestments' short term of maturity. The financial assets in the cash flow statement correspond to the financialassets in the balance sheet.

Advance payments to the Ministry of Education and CultureVeikkaus makes quarterly advance payments on its full-year result to its owner. Following a decision by theGeneral Meeting, the result for the financial year is charged from the shareholders' equity.

Post-employment benefitsIn accordance with the IFRS, pension schemes are classified as either defined contribution or defined benefitplans. Defined contribution schemes include those in which Veikkaus pays fixed amounts to a pensioncompany without any obligation to make additional payments even if the fund lacks sufficient assets to pay thepensions. Payments made to defined contribution schemes are recorded as pension expenses in thecomprehensive income statement. Payments made to the TyEL pension insurance scheme are regarded aspayments to a defined contribution plan.

The remaining pension schemes are defined benefit plans. For these, a liability based on certain assumptions isrecorded in the balance sheet, illustrating the future pensions to be paid on the basis of the scheme. Thepension cost recorded in the income statement illustrates, for example, the increase in liabilities arising from thework performed by personnel during the financial year.

Items recorded from defined benefit schemes are based on actuarial calculations. These calculations are madeon the basis of assumptions concerning, for example, the termination of employment of personnel belonging tothe pension scheme before the age of retirement; the future level of salaries and the discount rate used in thecalculations. The differences between the assumptions and realizations or the changes in the realizationsgenerate actuarial gains and losses. To record them, Veikkaus uses a corridor method in accordance with the

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IFRS standard. On the IFRS transition date, all accumulated actuarial gains and losses were recorded undershareholders' equity.

Long-term employee benefitsA one-time payment equivalent to a month's gross salary is paid as a bonus when an employee has been in thecompany' employ for 30, 35, 40 and 45 years. The compensation liability has been calculated on the basis ofwhen personnel joined the company, by discounting the compensation liability realized at the end of each yearto the present.

Other short-term liabilities - the prize fundThe prize fund is not an actual fund, but the company's liability to players. In accordance with Veikkaus' gaminglicence, both the cents accumulated through the rounding of prize sums and the undistributed portion of thetotal prize sum of a game are immediately transferred to the prize fund during prize distribution. After the one-year claim period, any unclaimed prizes are also transferred to the prize fund. The assets in the prize fund areused for additional prize distributions in the games in question. In accordance with Veikkaus' gaming licence,the company is obliged to distribute the prize sums in their entirety to players.

TurnoverThe turnover from sales of Veikkaus games is divided according to the draw date. The draws take place eitherweekly or daily. The turnover from Live Betting consists of gaming income less prizes charged to the game inquestion.

Other operating income and expensesOther operating income includes indemnifications, profit from the sale of assets, and profits from operationsother than those related to the company's actual business operations, for example, income from leasing and themessaging service.

Other operating expenses include losses from the sale of assets and expenses related to actual businessoperations.

PrizesThe prizes (in accordance with each game's rules) are entered as turnover in the comprehensive incomestatement.In accordance with Veikkaus' gaming licence, both unclaimed prizes from the previous year and profit from therounding of prize sums shall be paid out on later rounds of the games in question, during the following calendaryear at the latest.

Raw materials and servicesRetail commissions consist of compensation paid to retailers on the basis of their game sales. Commissionpercentages vary by game.

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Annual report 2010

Payments to authorities and supervision fees include game supervision fees, round-specific game eventcompensations paid to Fintoto for V5 and V75 games, expenses incurred from researching and monitoringproblem gambling, and the expenses of the Finnish Problem Gambling helpline Peluuri.

Expenses incurred through the printing of lottery tickets, playslips and receipt rolls, as well as those associatedwith the Veikkaus Card, are recorded as expenses on the acquisition date.

Draw and result information expenses include costs related to TV cooperation agreements and other expensesassociated with publishing results.

Game event cooperation covers the expenses arising from the right to use information about the event inquestion. These expenses may be contractual commitments or they may be entirely determined according tothe games' round-specific or annual turnover.

TaxesThe lottery tax is 9.5% of the accounted sum that is allocated to a calendar month from the sale of game andlottery tickets minus the prizes recorded as expenses on the basis of these tickets. The funds that arewithdrawn from or paid into the prize fund during this calendar month are added to or subtracted from theaforementioned sum.

In accordance with Section 59 of the Value Added Tax Act, Veikkaus is not VAT liable. The company'sexpenses and investments include VAT at the current rate.

In accordance with Section 21 of the Income Tax Act, Veikkaus is only liable to pay income tax on income thatis not treated as business income by the Lottery Tax Act. Veikkaus' financial statements do not contain anyincome that is subject to income tax.

Application of new or revised IFRS standardsVeikkaus will implement the following revised standards in either 2011 or at a later date:

Amendment to IAS 24 Related party disclosures (effective during financial periods beginning on 1 January 2011or thereafter). This amendment simplifies the disclosure requirements for government-related entities andclarifies the definition of a related party.

Improvements to IFRSs, May 2010 (in primary effect from 1 July 2010 or during financial periods beginningthereafter). The Annual Improvements process deals with minor and non-urgent but necessary amendments tothe standards by publishing them in single exposure draft once a year. The amendment has not yet beenapproved for application within the EU.

IFRS 9 Financial instruments (effective from 1 January 2013 or during financial periods beginning thereafter).IFRS 9 simplifies the valuation of financial assets. From now on, financial assets will be classified into two maingroups: those valued at the periodized acquisition cost and those valued at fair value. This standard has not yetbeen approved for application within the EU.

The other new or revised standards do not have a significant impact on Veikkaus' financial statements.

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Annual report 2010

Notes to the financial statements1. Turnover by games and motivational state2. Development of financial result3. Other operating income4. Depreciations5. Purchase of services6. Other operating expenses7. Financial income and expenses8. Tangible assets and depreciations9. Intangible assets and depreciations

10. Investments and long-term investment11. Investments held for sale12. Short-term receivables13. Liquid assets14. Share capital and undistributed prizes' fund15. Short-term liabilities16. Liabilities from employee benefits17. Related party transactions18. Contingent liabilities and amounts payable on other leasing agreements19. Signatures20. List of accounting books and record formats

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Annual report 2010

1. Turnover by games and motivational states

EUR thousand 2010 % of turnover 2009 % of turnover

Lotto 468,911 27.7 475,788 30.5

LottoPlus 60,241 3.6 29,690 1.9

Viking Lotto 112,694 6.7 96,324 6.2

VikingPlus 22,336 1.3 9,201 0.6

Jokeri 98,262 5.8 83,759 5.4

Dreams 762,444 45.1 694,762 44.6

Football Pools 63,491 3.8 65,892 4.2

V75 Off-track Horse Betting 27,377 1.6 29,078 1.9

V5 Off-track Horse Betting 23,046 1.4 25,367 1.6

Other V Games 171 0 92 0

Fixed Odds Betting 151,357 9.0 134,467 8.6

Result Odds Betting 37,492 2.2 32,746 2.1

Multibet 66,931 4.0 70,159 4.5

Winner Odds Betting 11,341 0.7 10,857 0.7

Live Winner Odds Betting 500 0 295 0

Leisure-time 381,707 22.6 368,951 23.7

Keno 346,506 20.5 332,604 21.4

Syke 1,828 0.1 - -

eBingo 19,725 1.2 - -

Veikkaus bingo 199 0 329 0

Ässä Instant 37,899 2.2 38,983 2.5

Mega Ässä Instant 10,920 0.6 9,371 0.6

Mini Ässä Instant 6,638 0.4 8,459 0.5

Casino Instant 41,154 2.4 42,619 2.7

Nature Instant 5,845 0.3 5,420 0.3

Lucky Words Instant 23,703 1.4 25,030 1.6

Themed instants 12,652 0.7 559 0

Christmas Instant 4,047 0.2 4,263 0.3

eInstants 34,635 2.0 26,283 1.7

Excitement 545,751 32.3 493,921 31.7

Motivational states total 1,689,902 100.0 1,557,634 100.0

Round 52/10 of Viking Lotto, Viking Lotto Plus, Wednesday Joker, V5 Off-track Horse Betting and the daily-drawn

games Keno, eBingo and Syke, as well as any betting games played between 27–31 December 2010, are included in

Veikkaus' 2010 turnover in accordance with their draw date.

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Annual report 2010

2. Development of financial result 2006–2010

EUR thousand 2010 2009 2008 2007 2006

Turnover 1,689,902 1,557,634 1,474,759 1,391,360 1,361,210

Game margin 801,930 766,546 720,184 678,372 659,425

% of turnover 47.5 % 49.2 % 48.8 % 48.8 % 48.4 %

Operating profit 501,420 464,597 440,745 421,119 403,288

% of turnover 29.7 % 29.8 % 29.9 % 30.3 % 29.6 %

Result before appropriations 503,724 468,777 449,135 427,385 407,672

% of turnover 29.8 % 30.1 % 30.5 % 30.7 % 29.9 %

Result for the financial year 503,724 468,777 449,135 427,385 407,689

% of turnover 29.8 % 30.1 % 30.5 % 30.7 % 30.0 %

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Annual report 2010

3. Other operating income

EUR thousand 2010 2009

Rental income 8 10

Messaging service income 54 62

Indemnifications 438 332

Profit from investments in the retail terminal network's data communications 940 940

Annulment of tax audit provisions 800 0

Refund on Sports TV's subordinated debts 0 576

Returned prizes from fixed-match gaming 0 16

Other income 119 152

Total 2,360 2,087

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Annual report 2010

4. Depreciations

EUR thousand 2010 2009

Intangible assets 10,200 23,466

Buildings and structures 1,041 3,142

Machinery and equipment 4,659 5,017

Total 15,900 31,625

Fixed assets are subject to straight-line depreciations according to their economic lifespan.In 2010 a total of EUR 0.9 million were recorded as onetime depreciations of the acquisitions and in 2009, EUR11.3 million, which are not expected to generate income in the next few years. In addition, EUR 5.3 million ofone-time depreciations were recorded in 2009 in accordance with an amendment to the accounting practicesintroduced in 2009. Lands, housing stocks, and works of arts are not subject to depreciations.

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Annual report 2010

5. Purchase of services

EUR thousand 2010 2009

Purchase of services 23,488 17,018

Auditors' fees included in the purchase of services

Audit 43 45

Other services 146 168

Total 190 213

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Annual report 2010

6. Other operating expenses

EUR thousand 2010 2009

Other advertising and marketing expenses 6,223 6,531

Other voluntary personnel expenses 1,362 1,365

Travel expenses 1,209 1,096

Representation and negotiation expenses 653 653

Car expenses 567 662

Equipment and freight charges 4,207 4,640

Machinery and equipment 2,551 3,467

Real estate expenses 2,500 2,314

Maintenance and servicing of software 5,237 3,951

Banking expenses 1,666 1,633

Telephone expenses 746 701

Other office expenses 1,044 1,000

Total 27,965 28,014

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Annual report 2010

7. Financial income and expenses

EUR thousand 2010 2009

Dividend income from investments held for sale 2 2

Interest income from investments held for sale 346 802

Interest income from loans and receivables 1,941 3,372

Other financial income 15 5

Total financial income 2,305 4,181

Interest expenses 0 1

Financial expenses total 0 1

Total 2,304 4,180

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Annual report 2010

8. Tangible assets and depreciations

EUR thousand Land and waters

Buildings and

structures

Machinery and

equipment Other Total

Acquisition cost 1 Jan 2010 1,906 38,252 77,187 622 117,967

Increase 0 3,056 3,852 9 6,917

Decrease 0 0 124 0 124

Acquisition cost 31 Dec 2010 1,906 41,307 80,915 632 124,759

Accumulated depreciation 1

Jan 2010 - 18,635 61,116 - 79,751

Depreciation for the financial

year - 1,041 4,664 - 5,705

Accumulated depreciation on

the decrease - 0 90 - 90

Accumulated depreciation 31

Dec 2010 - 19,676 65,690 - 85,367

Carrying amount 31 Dec

2010 1,906 21,631 15,225 632 39,393

Carrying amount 1 Jan 2010 1,906 19,616 16,071 622 38,215

EUR thousand Land and waters

Buildings and

structures

Machinery and

equipment Other Total

Acquisition cost 1 Jan 2009 1,906 34,653 73,818 622 110,999

Increase 0 3,770 3,664 0 7,434

Decrease 0 172 294 0 466

Acquisition cost 31 Dec 2009 1,906 38,252 77,187 622 117,967

Accumulated depreciation 1

Jan 2009 - 15,493 56,356 - 71,849

Depreciation for the financial

year - 3,142 5,017 - 8,159

Accumulated depreciation on

the decrease - 0 257 - 257

Accumulated depreciation 31

Dec 2009 - 18,635 61,116 - 79,751

Carrying amount 31 Dec

2009 1,906 19,616 16,071 622 38,215

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Annual report 2010

Carrying amount 1 Jan 2009 1,906 19,160 17,462 622 39,150

125 (141)

Annual report 2010

9. Intangible assets and depreciations

2010 2009

EUR thousand

Software and

capitalized

development costs EUR thousand

Software and

capitalized

development costs

Acquisition cost 1 Jan 2010 125,217 Acquisition cost 1 Jan 2009 105,645

Increase 27,092 Increase 23,452

Decrease 0 Decrease 3,880

Acquisition cost 31 Dec 2010 152,308 Acquisition cost 31 Dec 2009 125,217

Accumulated depreciation 1 Jan

2010 92,216Accumulated depreciation 1 Jan

2009 72,630

Depreciation for the financial year 10,195 Depreciation for the financial year 23,466

Accumulated depreciation on the

decrease 0Accumulated depreciation on the

decrease 3,880

Accumulated depreciation 31 Dec

2010 102,411Accumulated depreciation 31 Dec

2009 92,216

Carrying amount 31 Dec 2010 49,898 Carrying amount 31 Dec 2009 33,001

Carrying amount 1 Jan 2010 33,001 Carrying amount 1 Jan 2009 33,015

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Annual report 2010

10. Investments and long-term investments

EUR thousand 2010 2009

Software 34,066 15,000

IT equipment 1,308 63

Office equipment 60 220

Fittings, fixtures and other equipment 976 961

Real estate

Basic improvements 2,710 3,930

Machinery, equipment, fittings 1,604 4,314 1,286 5,215

Shares in housing cooperatives 426 0

Company cars 366 651

Works of art 9 0

Investments in progress -7,517 8,603

Total 34,009 30,714

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Annual report 2010

11. Investments held for sale

EUR thousand 2010 2009

Untraded shares 482 482

Total 482 482

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Annual report 2010

12. Short-term receivables

EUR thousand 2010 2009

Trade receivables 13,575 11,256

Accrued income 2,712 3,742

Other receivables 176 107

Total 16,463 15,105

Trade receivables consist of uncharged game fees from retailers. The charging period runs from Monday to Sunday and

the amount for the previous week is charged by direct debit on Tuesdays. Veikkaus charges game fees from a total of

3,280 retailers.

Due to the nature of these trade receivables, there is traditionally no credit risk.

On the financial statement date, the balance sheet values of trade receivables did not deviate from their fair values.

KEY ITEMS OF ACCRUED INCOME

EUR thousand 2010 2009

Periodic interest income 580 404

Periodic game event cooperation and draw expenses 6 116

Gtech receivables 1,899 2,397

Sanoma Entertainment, refund on Sports TV's subordinated debts 0 576

The Finnish Olympic Committee receivables 0 157

Other accrued income 225 93

Total 2,712 3,742

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Annual report 2010

13. Liquid assets

EUR thousand 2010 2009

Cash in hand and at bank 5,532 6,697

Investments held for sale 43,191 44,087

Loans and receivables 197,205 170,151

Total 245,928 220,934

Investments held for sale are certificates of deposit with short maturity.

Loans and receivables are deposits with short maturity.

Interest rate risk

Short-term financial investments expose Veikkaus' cash flow to an interest rate risk, but they are, as a whole, of minor

significance. Income and operative cash flows are largely independent of changes in market interest rates.

Investments are made in accordance with guidelines approved by the shareholder and the Board of Directors. According

to these guidelines, investments are made by securing the capital without currency risks and for a maximum of five

years. Investing in stocks is prohibited.

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Annual report 2010

14. Share capitalThere are 498 shares in total with a nominal value of EUR 445,698.01.

UNDISTRIBUTED PRIZES' FUND

The difference between the net profit for the financial year and the return to the Ministry of Education andCulture is entered into the undistributed prizes' fund in accordance with a decision by the General Meeting.

The General Meeting decides how the undistributed prize funds shall be used and the Ministry of Education andCulture later distributes them to the beneficiaries.

According to a decision by the Council of State, the undistributed prizes' fund can total a maximum of EUR 150million.

At the financial statement date, the undistributed prizes' fund totalled EUR 17.8 million in unused funds from2007, EUR 41.2 million from 2008 and EUR 54.8 million from 2009, totalling EUR 113.8 million.

The undistributed prizes' fund includes EUR 46.2 million that is included in the State's 2011 budget and is to bedisbursed and entered as additional income in 2011. (IAS 1 Capital Management)

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Annual report 2010

15. Short-term liabilities

EUR thousand 2010 2009

Advance payments for multi-week subscriptions 18 106 16 107

Trade payables 5 716 7 153

Accruals and deferred income

Allocated personnel expenses 7 702 7 259

Accrued winnings payable 7 259 7 333

Expenses of the cashier line reform, uninvoiced portion 1 322 1 322

International lotto game, uninvoiced portion 384 413

Renovation of energy systems at HQ, uninvoiced portion 250 0

Other accruals 4 098 4 457

Total 21 015 20 785

Winnings payable 32 930 25 786

Settlement debt to the State

Lottery tax 13 395 13 937

Withholding tax liability 538 507

Social security liability 36 32

Value-added tax 873 1 083

14 841 15 559

Other short-term liabilities 13 002 13 716

Total 105 610 99 106

Winnings payable include uncashed prizes and return payments on betting games, as well as the funds deposited in

Internet players' gaming accounts.

Other short-term liabilities include, for example, prize funds. In the balance sheet of 31 Dec 2009, prize funds totalled

EUR 13.6 million. In 2010, a total of EUR 14.0 million in prize funds were accumulated and used to pay out prizes worth

EUR 14.7 million. Prizes funds totalled EUR 12.9 million in the balance sheet of 31 Dec 2010. According to the rules,

this balance includes EUR 4.2 million that can only be used for prize payouts in Lotto.

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Annual report 2010

16. Liabilities from employee benefits

Defined benefit pension schemes

The defined benefit pension schemes include benefit pensions and additional pensions that enable some of Veikkaus'

employees to retire at an earlier age without losing part of their pension. The special pension schemes were granted to

employees who joined Veikkaus before 1985 and the additional pension schemes were granted to employees who

joined before 1994.

Defined benefit pension liabilities in the balance sheet:

EUR thousand 2010 2009

Present value of liabilities 2,975 3,769

Fair value of funds -1,646 -1,420

Balance underfund 1,329 2,349

Actuarial gains (+) and losses (-) not yet recorded 562 -25

Net post-employment scheme liabilities in the balance sheet 1,891 2,324

Net post-employment scheme in the income statement:

EUR thousand 2010 2009

Costs based on service during the financial period 64 37

Interest costs 173 197

Expected gain from the funds in the scheme -57 -79

Actuarial gains (+) and losses (-) 0 -48

Total 180 107

Change in the present value of pension liabilities in the balance sheet

EUR thousand 2010 2009

At the beginning of the financial year 3,769 3,491

Costs based on service during the financial period 64 37

Interest costs 173 197

Actuarial gains (+) and losses (-) -618 481

Benefits paid -413 -437

At the end of the financial year 2,975 3,769

Change in the fair value of funds in the scheme

EUR thousand 2010 2009

Fair value of the funds at the beginning of the financial year 1,420 1,539

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Annual report 2010

Expected gain from the funds in the scheme 57 79

Payments made into the scheme 613 370

Benefits paid -413 -437

Actuarial gains (+) and losses (-) -31 -131

At the end of the financial year 1,646 1,420

The realized gain from the funds in the schemes was EUR 26,000 in 2010 and EUR -52,000 in 2009. The funds in the

scheme consist of the sum accumulated from pension premiums, which is the responsibility of the insurance company.

Veikkaus expects to pay EUR 167,000 into the scheme in 2011.

The amounts for the financial year and the previous financial year are as follows:

EUR thousand 2010 2009 2008

Present value of the liability 2,975 3,769 3,491

Fair value of the funds in the scheme -1,646 -1,420 -1,539

Balance underfund 1,329 2,349 1,952

Experience-based adjustments to the funds in the schemes -31 -131 51

Experience-based adjustments to the liabilities involved in the

schemes -796 274 151

Most important actuarial assumptions made in the scheme

2010 2009

Discount rate 4.25% 4.75%

Expected gain from the funds in the scheme 4.00% 4.00%

Expected future pay rise 2.60% 2.60%

OTHER LONG-TERM EMPLOYEE BENEFITS: BONUS FOR YEARS OF SERVICE

Veikkaus grants its personnel a bonus for years of service, and this is classified as a long-term employee benefit.

Liability recorded in the balance sheet

EUR thousand 2010 2009

At the beginning of the financial year 465 355

Change -23 110

At the end of the financial year 442 465

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Annual report 2010

17. Related party transactions

Veikkaus' related parties include the CEO, the Strategic Executive Team, the Operative Executive Team, the Board of

Directors, the Supervisory Board, and the other state-owned companies.

Salaries paid; compensations and employee benefits

EUR thousand 2010 2009

CEO 455 407

Other members of the Executive Team* 2,355 2,226

Board of Directors 164 149

Supervisory Board 98 93

Total 3,072 2,875

* The Executive Teams had 14 members at the end of the financial year 2010 and 15 at the end of 2009.

Salaries paid include full-year salaries plus performance-based bonuses.

The CEO has a six-month notice period. On the termination of his or her contract of employment, the CEO is, under

certain conditions, entitled to compensation corresponding to twelve months' salary.

If notice is given by the company, the period of notice for Executive Team members is subject to the Employment

Contracts Act and is two months for executives. Under certain conditions, the members of the Strategic Executive Team

are entitled to compensation corresponding to nine months' salary and the members of the Operative Executive Team to

compensation corresponding to six months' salary on the termination of their employment contracts.

Neither the members of the Board of Directors nor the company's management are entitled to extraordinary benefits

differing from those determined in a regular employment contract, with the exception of the additional pension schemes

for the CEO and the Executive Vice President. These schemes are based on a retirement age of 63 and a target

pension of 66% of salary, calculated on the basis of the person's salary over the last five years. The company

management is not granted option rights.

Other related party transactions

Veikkaus may purchase goods or services from other state-owned companies. The purchase prices and delivery

conditions for these goods and services are the same as for any other group of customers and are low in number.

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Annual report 2010

18. Contingent liabilities and amounts payable on other leasingagreements

EUR thousand 2010 2009

Lease payments due during the next financial year 205 261

Lease payments due at a later date and in a maximum of five years 234 322

Other lease liabilities total 439 583

Most vehicle lease agreements are made for 4 years.

Veikkaus has committed to purchasing 32-65 person years of employment every year until the end of 2013 in order to

maintain and develop its gaming system.

On 31 Dec 2010, Veikkaus had a total of EUR 16,000 in guarantor's liabilities related to personnel loans from the

company's financial services office.

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Annual report 2010

19. Signatures of the Financial Statements and the Board ofDirectors' Report

Vantaa, 7 February 2011

Juha Niemelä Leena HarkimoChairman of the Board Vice Chairman of the Board

Jouko Ahtola Mikael Ingberg

Riitta Kaivosoja Ari Lahti

Eva Liljeblom Leena Paananen

Risto NieminenCEO

A report on the audit has been issued today.

Helsinki, 7 February 2011

KPMG OY AB

Lasse Holopainen, Authorised Public Accountant

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Annual report 2010

20. List of accounting books and record formats

General ledger in electronic formatJournal in electronic formatCash accounting and payment transaction records in printed documentsTravel expense claim records in printed documentsMemorandum records in printed documentsAccounts receivable ledger in printed documentsOnnet accounts receivable ledger in printed documentsAccounts payable ledger in printed documentsPayroll accounting records in printed documentsDepreciation records in printed documentsPrize records in electronic format

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Annual report 2010

Auditor's reportTo the General Meeting of Veikkaus OyWe have audited the accounts, Financial Statements, Report of the Board of Directors and the administration ofVeikkaus Oy for the financial year 1 January–31 December 2010. The Financial Statements include the balancesheet, comprehensive income statement, cash flow statement, statement on the changes in shareholders'equity, and Notes to the Financial Statements.

Board of Directors' and CEO's responsibilities

The Board of Directors and CEO are responsible for preparing the financial statements and the report of theBoard of Directors, as well as ensuring that the financial statements provide correct and sufficient information inaccordance with the international auditing standards (IFRS) as adopted by the EU; and that the financialstatements and the report of the Board of Directors provide correct and sufficient information in accordance withthe laws and regulations governing the preparation of financial statements and reports of the Board of Directorseffective in Finland. The Board of Directors is responsible for arranging appropriate supervision of thecompany's accounts and finances. The CEO is responsible for ensuring that accounting procedures adhere tothe law and that the company's finances have been managed in a reliable manner.

Auditor's responsibilities

Our responsibility is to express an opinion on the financial statements and the report of the Board of Directorson the basis of our audit. The Auditing Act requires us to comply with the ethical principles of the auditingprofession. We have conducted our audit in accordance with good accounting practice in Finland. Goodauditing practice requires that we plan and perform the audit to obtain reasonable assurance of whether thefinancial statements and the report of the Board of Directors are free from material misstatement; and alsowhether the CEO and the members of the Supervisory Board and the Board of Directors have contravened theLimited Liability Companies Act or Articles of Association, or are guilty of any deeds or omissions that mayresult in the company being liable for damages.

An audit involves procedures to obtain audit evidence on the amounts and disclosures in the financialstatements and the report of the Board of Directors. The procedures selected depend on the auditor'sjudgment, which includes the assessment of the risks of material misstatement in the financial statements,whether due to fraud or error. In order to design audit procedures that are appropriate in the circumstances, theauditor evaluates the internal controls relevant to the preparation and true and fair presentation of the financialstatements and report of the Board of Directors, but not with the intention of giving a statement on theeffectiveness of the company's internal control. An audit also includes evaluating the appropriateness of theaccounting policies employed and the reasonableness of the estimates made by management, as well asassessing the overall presentation of the financial statements and the report of the Board of Directors.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for ouraudit opinion.

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Annual report 2010

Opinion on the company's Financial Statements and Report of the Board of Directors.

In our opinion, the Financial Statements give a true and fair view of the company's financial position, financialperformance and cash flows in accordance with the international audit standards (IFRS) as adopted by the EU.The Financial Statements and the Report of the Board of Directors provide correct and sufficient information onthe company's financial position and performance in accordance with the laws and regulations governing thepreparation of financial statements and reports of the Board of Directors effective in Finland. The informationcontained in the Report of the Board of Directors is consistent with the Financial Statements.

Other statements

The Financial Statements can be approved, and the CEO and the members of the Board of Directors andSupervisory Board can be discharged from liability for the period audited by us. The proposal of the Board ofDirectors on the distribution of profit for the year complies with the Finnish Companies Act.

Helsinki, 7 February 2011KPMG OY AB

Lasse HolopainenAuthorised Public Accountant

140 (141)

Annual report 2010

Statement by the Supervisory BoardThe Supervisory Board of Veikkaus Oy examined the Financial Statements for the financial year 1 January-31December 2010 and the Auditors' Report. The Supervisory Board has decided to propose in its statement to theAnnual General Meeting that the income statement and balance sheet be approved and the profit shown in theFinancial Statements be used in accordance with the Board of Directors' proposal.

The Supervisory Board finds that its decisions and guidelines have been complied with and that it has receivedthe information it has deemed necessary from the company's Board of Directors and CEO.

Helsinki, 10 February 2011

Ilkka Kanerva, Chairman Matti Saarinen, Vice ChairmanMerikukka Forsius Jukka Gustafsson Tuomo Hänninen Heli JärvinenAntti Kaikkonen Jari Leppä Heikki A. Ollila Sirpa PaateroAila Paloniemi Kari Uotila Ulla-Maj Wideroos Riitta Nissi

141 (141)

Annual report 2010