1. Trusted to deliver excellence © 2015 Rolls-Royce plc and/or its subsidiaries The information in this document is the property of Rolls-Royce plc and/or its subsidiaries and may not be copied or communicated to a third party, or used for any purpose other than that for which it is supplied without the express written consent of Rolls-Royce plc and/or its subsidiaries. This information is given in good faith based upon the latest information available to Rolls-Royce plc and/or its subsidiaries, no warranty or representation is given concerning such information, which must not be taken as establishing any contractual or other commitment binding upon Rolls-Royce plc and/or its subsidiaries. Performance Based Oversight – The Implications for Rolls-Royce? CAA and Industry Part 145 Maintenance and Specialised Services Organisations Airworthiness Seminar 28th October 2015 Gordon McKechnie Director of Quality, HSE & Business Improvement Civil Large Engines

2. Rolls-Royce Proprietary Information Agenda Rolls-Royce UK EASA Part 145 Approval Performance Based Oversight - The Implications for Rolls-Royce Summary Questions

3. Rolls-Royce Proprietary Information Rolls-Royce UK EASA Part 145 Approval UK - Derby Off Wing Services (Repair and Overhaul) UK - Derby Off Wing Services (Repair and Overhaul) UK - Ansty Repair and Overhaul UK - East Kilbride Repair & Overhaul UK - Inchinnan Repair & Overhaul (open variation) UK – London Heathrow – Off Wing Services On Wing Services team operate globally The UK EASA Part 145 approved organisation supports the Rolls-Royce large engine fleet. We have 1299 employees with 121 Certifying Staff. We also hold Part 145 approvals from: USAVietnam CanadaSouth Africa ChinaQatar SingaporeChile Kingdom of Saudi ArabiaBrazil BahrainJapan Korea Ten global sub- contract Repair Suppliers UK - East Rogerton – Test Facility Singapore - On Wing Services (open variation) UAE - Abu Dhabi – On Wing Services (open variation)

4. Rolls-Royce Proprietary Information Agenda Rolls-Royce UK EASA Part 145 Approval Performance Based Oversight - The Implications for Rolls-Royce Summary Questions

5. Rolls-Royce Proprietary Information PBO - The Implications for Rolls-Royce Performance Based Oversight to Rolls-Royce is about: Continually improving maintenance activity, Being a trusted partner with the CAA as a PBO entity, Having a robust and integrated SMS with clear accountabilities for product safety, Sharing the right metrics and to show sustained improvement, Delivering performance improvement via risk management and audit, Demonstrating our regulatory understanding and having independent specialists to advise and coach the business. We are not supporting PBO to reduce our CAA oversight – this may ultimately occur but we have to earn it. 5

6. Rolls-Royce Proprietary Information PBO - The Implications for Rolls-Royce For PBO to be effective we need to: o Ensure our employees fully understand our SMS and processes, o Continue to enable an effective safety culture, o Have an effective risk management and audit process, o Focus on preventive / proactive approaches - not just reactive, o Have effective reporting, investigation and lessons learnt processes, o Continue to improve our training approach on regulatory understanding, o Be open with the CAA on our metrics, risks and audit outcomes, o Ensure the CAA understand and have confidence in our systems and processes, o Be trusted by the CAA that we can deliver our side of PBO. 6

7. Rolls-Royce Proprietary Information Rolls-Royce Risk Assessment approach 7 Impact Probability 914192429 712172227 410152025 38131823 16111621 Some of our Part 145 activity risks: Human Factors. On and Off wing maintenance activity. Robustness of the assurance system to find a significant process weakness / non- compliance. Oversight and use of Sub-Contractors Effectiveness of our problem management, containment and lessons learnt processes.

8. Rolls-Royce Proprietary Information Rolls-Royce Safety Management System 8

9. Rolls-Royce Proprietary Information Enabling a Safety Culture 9 Safety Culture ladder

10. Rolls-Royce Proprietary Information Supplier Advanced Business Requirements (SABRe) SABRe defines Rolls-Royce’s requirements for its external supply chain. Whilst fully deployed for production suppliers it is now being rolled out for all our Maintenance suppliers even if they have their own Part 145 Approval. SABRe includes requirements for : -Maintenance Process Design -Product & Process Approvals -Process Control & Capability -Quality Audit -Performance monitoring and reporting -Continuous Improvement -Training & Competency Page 10

11. Rolls-Royce Proprietary Information Agenda Rolls-Royce UK EASA Part 145 Approval Performance Based Oversight - The Implications for Rolls-Royce Summary Questions

12. Rolls-Royce Proprietary Information Summary 12 Results Internal Audit Safety Culture Part 145 audit

13. Rolls-Royce Proprietary Information Questions? 13