LEONARDO UK LTD

The purpose of this policy is to provide clear guidelines to employees, suppliers and all other stakeholders in respect of the payment policies of Leonardo UK Ltd. The over-riding principle when writing the policy is to ensure suppliers are treated fairly, and that the company and our suppliers both benefit from reasonable terms of payment, that are both achievable and do not adversely affect cash-flow for either party.

We therefore endeavour to ensure:

• The company aims to ensure suppliers are paid on time within the terms agreed at the outset of the contract.
• The company will not attempt to change the payment terms retrospectively without good reason.
• The company will not change practice on the length of payment for smaller companies on unreasonable grounds.
• The company will provide suppliers with clear and easily accessible guidance on payment procedures.
• The company provides a method for dealing with complaints and disputes in relation to payment processing, and a method for escalation of the before-mentioned complaint.
• The company will endeavour to advise if there is a reason an invoice may not be settled within the agreed terms.
• The company endeavours to comply with all applicable law and regulation, in relation to supplier payments.
• The company maintains a Corporate Social Responsibility policy, which applies to all company activity including payments.
• The company provides a method of electronic invoicing, either by fax or email transmission or by use of an invoicing portal.

Default Payment Terms
All Customer funded Purchase Orders (PO’s) placed on Suppliers shall include our standard 30 days payment terms from receipt of invoice, as defined in our General conditions of Purchase.
• The company recognises that on some contracts, that there is an overarching pay when paid clause present which takes precedence over terms detailed on purchase orders.
• PO (or Agreement) milestone payments in advance of Supplier delivery, shall not be permitted unless exceptional circumstances apply.
• If an invoice is becoming due and approved it can be expected to be included on the next payment run, which occurs weekly for GBP, and twice a month for Foreign currencies.
• Leonardo funded order (including stock orders, PVPD projects and Capital investment projects) are subject to 60 days payment terms.

Other Information on payment terms & calculation methods

The supplier invoice date has been used instead of the invoice receipt date, in instances where we currently have no other consistent reliable method of recording the date of receipt.

Our date of receipt is measured from the date the invoice is received by our Accounts Payable team and this is used as the basis for the report. However, some of these invoices are not contractually due from this date. Those that relate to workshare partner performance on certain contracts are contractually due from the point that we receive payment from our customer on behalf of the partner which can often be some time later. This results in adverse reporting on workshare partner invoices, whereas in fact we are complying with our agreed payment terms.

Where invoices were settled in full through the raising of a credit note, the credit note and matching invoice were not included in the payment statistics. If there is a partial match, then the remainder of the invoice is included in the payment statistics.

We make payment either through bank settlements or by the use of corporate purchasing cards. If the purchasing card was used to make payment then same day receipt by the supplier is assumed.

Invoices relating to intercompany activity with Leonardo SpA have been excluded from the statistics. These follow a different payment process due to additional factors arising from circumstances outside of our direct control. i.e. Italian Military licencing.

The company is committed to dealing with suppliers in a fair, honest and professional manner regarding any payment disputes. If a supplier has any dispute or concern regarding a payment, their first contact should be with their procurement relationship contact within the business. In their absence, an alternative route would be to contact the Leonardo UK Ltd accounts payable department.

In the event that those involved are unable to find a solution, then the issue can be escalated through the relevant managerial levels with the business.