FULLTEXT DEL 1 AV 3
Årsredovisning 2023
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1
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Skonsolidowane Sprawozdanie Finansowe 2023 GK Arctic Paper S.A. 2
Translatorʼs Explanatory Note: the following document is a free translation of the report of the above-mentioned Company. In the
event of any discrepancy in interpreting the terminology in Polish version is binding.
Arctic Paper has prepared its 2023 consolidated annual financial statement in the European Single Electronic Format(ESEF) which is the
electronic reporting format in which issuers on EU regulated markets shall prepare their annual financial reports from 1 January 2020 based
on Commission Delegated Regulation (EU) 2019/815 of 17 December 2018 supplementing Directive 2004/109/EC of the European Parliament
and of the Council with regard to regulatory technical standards on the specification of a single electronic reporting format as amended.
This PDF version of consolidated annual financial statement of Arctic Paper Capital Group has been prepared solely only for the convenience
of digital reading.
Despite all the efforts devoted to the conversion of XHTML file into PDF format, certain discrepancies, omissions or approximations may exist.
In case of any differences between the PDF and the XHTML versions, the XHTML version is the only one legally binding and shall prevail.
Arctic Paper, its representatives and employees decline all responsibility in this regard.
Table of contents
Information on consolidated financial statements ........................................................................... 5
Definitions and abbreviations ........................................................................................................... 6
Abbreviations applied to business entities, institutions and authorities of the Company ......................................................... 6
Definitions of selected terms abbreviations of currencies .................................................................................................... 8
Consolidated profit and loss account ............................................................................................................................... 11
Consolidated statement of total comprehensive income .................................................................................................... 12
Consolidated statement of financial position .................................................................................................................... 13
Consolidated cash flow statement ................................................................................................................................... 15
Consolidated statement of changes in equity ................................................................................................................... 17
1. General information ............................................................................................................................................. 19
2. Group composition .............................................................................................................................................. 21
3. Composition of the management and supervisory bodies ........................................................................................ 22
4. Approval of the financial statements ..................................................................................................................... 23
5. Relevant values based on professional judgement and estimates ............................................................................ 24
6. Basis for the preparation of the consolidated financial statements ........................................................................... 25
7. Changes in previously applied accounting policies and comparability of data ........................................................... 26
8. New standards and interpretations that have been published and are not yet effective.............................................. 27
9. Major accounting policies ..................................................................................................................................... 29
10. Operating segments ............................................................................................................................................ 44
11. Income and costs ................................................................................................................................................ 48
12. Items of other comprehensive income ................................................................................................................... 51
13. Income tax .......................................................................................................................................................... 51
14. Earnings per share .............................................................................................................................................. 54
15. Dividend paid and proposed ................................................................................................................................. 55
16. Tangible fixed assets ........................................................................................................................................... 56
17. Leases ............................................................................................................................................................... 59
18. Investment property ............................................................................................................................................. 59
19. Intangible assets and goodwill .............................................................................................................................. 61
20. Other assets ....................................................................................................................................................... 62
21. Impairment tests on fixed and intangible assets ..................................................................................................... 63
22. Inventories .......................................................................................................................................................... 66
23. Trade and other receivables ................................................................................................................................. 67
24. Cash and cash equivalents .................................................................................................................................. 68
25. Share capital and other capital ............................................................................................................................. 69
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Skonsolidowane Sprawozdanie Finansowe 2023 GK Arctic Paper S.A. 3
26. Liabilities under bank loans and other financial liabilities ....................................................................................... 75
27. Employee benefits ............................................................................................................................................... 77
28. Provisions ........................................................................................................................................................... 81
29. Trade and other payables, grants and deferred income .......................................................................................... 82
30. Investment plans ................................................................................................................................................. 83
31. Contingent liabilities ............................................................................................................................................ 83
32. Information on related entities .............................................................................................................................. 83
33. Information on the agreement and remuneration of the statutory auditor or entity authorised to audit financial
statements .................................................................................................................................................................... 85
34. Financial risk management objectives and principles .............................................................................................. 86
35. Financial instruments ........................................................................................................................................... 92
36. Capital management ............................................................................................................................................ 97
37. Employment structure .......................................................................................................................................... 98
38. Certificates in cogeneration .................................................................................................................................. 98
39. Grants ................................................................................................................................................................ 98
41. Impact of the war in Ukraine on the Group’s operations .......................................................................................... 99
42. Material events after the balance sheet date ......................................................................................................... 99
Statement of the Management Board ............................................................................................ 100
Accuracy and reliability of the presented reports ............................................................................................................ 100
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Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 5
Introduction
Information on consolidated financial statements
These Consolidated Financial Statements, which are a component of the Consolidated Annual Report for 2023 were prepared in
accordance with the Regulation of the Minister of Finance of 29 March 2018 on the current and periodic information provided by
securities issuers and on the conditions for recognizing information required by the law of a non‐member state as equivalent
information (Journal of Laws of 20018, item 757, as amended) and in accordance with International Financial Reporting
Standards (IFRS), approved by the EU (IFRS, EU).
As at the approval date of these Consolidated Financial Statements for publication, in light of the current process of IFRS
endorsement in the European Union and the nature of the Group’s activities, there is no difference between the effective IFRS
standards and the IFRS standards endorsed by the European Union. IFRS cover standards and interpretations approved by the
International Accounting Standards Board (IASB).
These Consolidated Financial Statements present data in PLN, and all figures, unless otherwise specified, are disclosed in PLN
‘000.
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Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 6
Introduction
Definitions and abbreviations
Unless the context requires otherwise, the following definitions and abbreviations are used in the whole document:
Abbreviations applied to business entities, institutions and authorities of the Company
Arctic Paper, Company, Issuer, Parent Entity, AP Arctic Paper Spółka Akcyjna with its registered office in
Kostrzyn nad Odrą, Poland
Capital Group, Group, Arctic Paper Group, AP Group Capital Group comprised of Arctic Paper Spółka Akcyjna and
its subsidiaries as well as joint ventures
Arctic Paper Kostrzyn, AP Kostrzyn, APK Arctic Paper Kostrzyn Spółka Akcyjna with its registered office
in Kostrzyn nad Odrą, Poland
Arctic Paper Munkedals, AP Munkedals, APM Arctic Paper Munkedals AB with its registered office in
Munkedal Municipality, Västra Götaland County, Sweden
Arctic Paper Mochenwangen, AP Mochenwangen, APMW Arctic Paper Mochenwangen GmbH with its registered office in
Mochenwangen, Germany
Arctic Paper Grycksbo, AP Grycksbo, APG Arctic Paper Grycksbo AB with its registered office in
Kungsvagen, Grycksbo, Sweden
Paper Mills Arctic Paper Kostrzyn, Arctic Paper Munkedals, Arctic Paper
Grycksbo
Arctic Paper Investment AB, API AB Arctic Paper Investment AB with its registered office in
Göteborg, Sweden
Arctic Paper Investment GmbH, API GmbH Arctic Paper Investment GmbH with its registered office in
Wolpertswende, Germany
Arctic Paper Verwaltungs Arctic Paper Verwaltungs GmbH with its registered office in
Wolpertswende, Germany
Arctic Paper Immobilienverwaltungs Arctic Paper Immobilienverwaltungs GmbH & Co. KG with its
registered office in Wolpertswende, Germany
Kostrzyn Group Arctic Paper Kostrzyn Spółka Akcyjna with its registered office
in Kostrzyn nad Odrą and EC Kostrzyn Sp. z o.o. with its
registered office in Kostrzyn nad Odrą
Mochenwangen Group Arctic Paper Investment GmbH, Arctic Paper Mochenwangen
GmbH, Arctic Paper Verwaltungs GmbH, Arctic Paper
Immobilienverwaltungs GmbH & Co.KG
Grycksbo Group Arctic Paper Grycksbo AB, Arctic Paper Investment AB, Arctic
Paper Finance AB;
Sales Offices Arctic Paper Papierhandels GmbH with its registered office in
Vienna (Austria);
Arctic Paper Benelux SA with its registered office in Oud-
Haverlee (Belgium);
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Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 7
Introduction
Arctic Paper Danmark A/S with its registered office in Greve
(Denmark);
Arctic Paper France SA with its registered office in Paris
(France);
Arctic Paper Deutschland GmbH with its registered office in
Hamburg, Germany;
Arctic Paper Italia Srl with its registered office in Milan (Italy);
Arctic Paper Baltic States SIA with its registered office in Riga
(Latvia);
Arctic Paper Norge AS with its registered office in Oslo
(Norway);
Arctic Paper Polska Sp. z o.o. with its registered office in
Warsaw (Poland);
Arctic Paper España SL with its registered office in Barcelona
(Spain);
Arctic Paper Finance AB with its registered office in Munkedal
(Sweden);
Arctic Paper Schweiz AG with its registered office in
Derendingen (Switzerland)
Arctic Paper UK Ltd with its registered office in London (UK)
Arctic Power Sp. z o.o.
(formerly Arctic Paper East Sp. z o.o.)
Arctic Power Sp. z o.o. with its registered office in Kostrzyn
nad Odrą (Poland)
Kostrzyn Packaging Spółka z o.o. Arctic Paper East Sp. z o.o. with its registered office in
Kostrzyn nad Odrą (Poland)
Rottneros, Rottneros AB Rottneros AB with its registered office in Sunne (Sweden)
Rottneros Group, Rottneros AB Group Rottneros AB with its registered office in Söderhamn, Sweden;
Rottneros Bruk AB with its registered office in Rottneros,
Sweden; Utansjo Bruk AB with its registered office in
Söderhamn, Sweden, Vallviks Bruk AB with its registered
office in Vallvik, Sweden; Rottneros Packaging AB with its
registered office in Sunne, Sweden; SIA Rottneros Baltic with
its registered office in Kuldiga, Latvia; since 1 January 2020 –
Nykvist Skogs AB with its registered office in Gräsmark,
Sweden
Pulp Mills Rottneros Bruk AB with its registered office in Rottneros,
Sweden; Vallviks Bruk AB with its registered office in Vallvik,
Sweden
Rottneros Purchasing Office SIA Rottneros Baltic with its registered office in Kuldiga, Latvia
Office Kalltorp Kalltorp Kraft Handelsbolaget with its registered office in
Trollhattan, Sweden
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Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 8
Introduction
Nemus Holding AB Nemus Holding AB with its registered office in Göteborg,
Sweden
Thomas Onstad The Issuer’s core shareholder, holding directly and indirectly
over 50% of shares in Arctic Paper S.A.; a member of the
Issuer’s Supervisory Board
Management Board, Issuer’s Management Board,
Company’s Management Board, Group’s Management
Board
Management Board of Arctic Paper S.A.
Supervisory Board, Issuer’s Supervisory Board,
Company’s Supervisory Board, Group’s Supervisory
Board, SB
Supervisory Board of Arctic Paper S.A.
AGM, GM, Issuer’s General Meeting, Company’s General
Meeting
Annual General Meeting of Arctic Paper S.A.
EGM, Extraordinary General Meeting, Issuer’s
Extraordinary General Meeting, Company’s Extraordinary
General Meeting
Extraordinary General Meeting of Arctic Paper S.A.
Articles of Association, Issuer’s Articles of Association,
Company’s Articles of Association
Articles of Association of Arctic Paper S.A.
SEZ Kostrzyńsko-Słubicka Special Economic Zone
Registration Court District Court in Zielona Góra
Warsaw Stock Exchange, WSE Giełda Papierów Wartościowych w Warszawie Spółka Akcyjna
KDPW, Depository Krajowy Depozyt Papierów Wartościowych Spółka Akcyjna
with its registered office in Warsaw
PFSA Polish Financial Supervision Authority
SFSA Swedish Financial Supervisory Authority, equivalent to PFSA
NASDAQ in Stockholm, Nasdaq Stock Exchange in Stockholm, Sweden
CEPI Confederation of European Paper Industries
EURO-GRAPH The European Association of Graphic Paper Producers
Eurostat European Statistical Office
GUS Central Statistical Office of Poland
NBSK Northern Bleached Softwood Kraft
BHKP Bleached Hardwood Kraft Pulp
Definitions of selected terms abbreviations of currencies
FY Financial year
Q1 1st quarter of the financial year
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Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 9
Introduction
Q2 2nd quarter of the financial year
Q3 3rd quarter of the financial year
Q4 4th quarter of the financial year
H1 First half of the financial year
H2 Second half of the financial year
YTD Year-to-date
Like-for-like, LFL Analogous, with respect to operating result.
p.p. Percentage point, difference between two amounts of one item
given in percentage
PLN, zł, złoty Monetary unit of the Republic of Poland
gr grosz – 1/100 of one zloty (the monetary unit of the Republic
of Poland)
Euro, EUR Monetary unit of the European Union
GBP Pound sterling, monetary unit of the United Kingdom
SEK Swedish krona – the monetary unit of Sweden;
DKK Danish krona – the monetary unit of Denmark;
NOK Norwegian krona – the monetary unit of Norway;
CHF Swiss franc – the monetary unit of Switzerland;
USD United States dollar, the legal tender in the United States of
America
IAS International Accounting Standards
IFRS International Financial Reporting Standards
IFRS EU International Financial Reporting Standards endorsed by the
European Union
GDP Gross Domestic Product.
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.
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Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 11
(unless specified otherwise, all amounts are in PLN ‘000)
Accounting principles (policies) and additional explanatory notes to the financial statements
provided on pages 19 to 98 constitute an integral part hereof
Consolidated profit and loss account
Note
Year ended on
31 December
2023
Year ended on
31 December
2022
Continuing operations
Revenues from sales of paper and pulp 10.1 3 549 153 4 894 276
Sales revenues 3 549 153 4 894 276
Costs of sales 11.5 (2 803 469) (3 483 519)
Profit/(loss) on sales 745 684 1 410 757
Selling and distribution costs 11.5 (340 973) (445 197)
Administrative expenses 11.5 (124 077) (138 766)
Other operating income 11.1 129 397 85 778
Other operating expenses 11.2 (52 963) (69 593)
Operating profit/(loss) 357 068 842 979
Financial income 11.3 15 069 92 767
Financial expenses 11.4 (31 220) (8 169)
Gross profit/(loss) 340 917 927 577
Income tax 13 (68 529) (170 755)
Net profit/(loss) from continuing operations 272 388 756 822
Net profit/(loss) for the financial year 272 388 756 822
Attributable to:
The shareholders of the Parent Entity 247 132 631 001
To the non-controlling shareholder 25 256 125 821
Earnings/(loss) per share:
– basic earnings from the profit/(loss)
attributable to the shareholders of the Parent
Entity 14 3,57 9,11
– diluted earnings from the profit attributable
to the shareholders of the Parent Entity 14 3,57 9,11
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Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 12
(unless specified otherwise, all amounts are in PLN ‘000)
Accounting principles (policies) and additional explanatory notes to the financial statements
provided on pages 19 to 98 constitute an integral part hereof
Consolidated statement of total comprehensive income
Note
Year ended on
31 December
2023
Year ended on
31 December
2022
Net profit/(loss) for the reporting period 272 388 756 822
Items of other comprehensive income to be reclassified to profit or loss, before
taxation (344 643) 141 734
FX differences on translation of foreign operations 25.2 (99 034) (71 265)
Measurement of financial instruments, including: (245 609) 212 999
Measurement of financial instruments (items to be reclassified in future periods) 12 (224 619) 466 958
Measurement of financial instruments (items reclassified in the period) 12 (20 990) (253 959)
Items of other comprehensive income not to be reclassified to profit or loss, before
taxation 282 1 935
Actuarial profit/(loss) for defined benefit plans 27.2 282 1 935
Other comprehensive income before tax (344 361) 143 669
Income tax relating to items of other comprehensive income that will be reclassified to
profit or loss 50 399 (43 940)
Deferred income tax on the measurement of financial instruments, of which: 13.1 50 399 (43 940)
Deferred income tax on the measurement of financial instruments 46 092 (96 332)
Deferred income tax on the measurement of financial instruments (reclassified in the
period) 4 307 52 392
Income tax relating to items of other comprehensive income not to be reclassified to
profit or loss (174) 438
Deferred income tax on actuarial profit/(loss) relating to defined benefit plans 13.1 (174) 438
Other net comprehensive income (294 136) 100 167
Total comprehensive income for the period (21 748) 856 989
Total comprehensive income attributable to:
The shareholders of the Parent Entity 42 885 703 197
Non-controlling shareholders (64 633) 153 792
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Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 13
(unless specified otherwise, all amounts are in PLN ‘000)
Accounting principles (policies) and additional explanatory notes to the financial statements
provided on pages 19 to 98 constitute an integral part hereof
Consolidated statement of financial position
Note
As at 31 December
2023
As at 31 December
2022
ASSETS
Fixed assets
Tangible fixed assets 16 1 166 171 1 125 004
Investment properties 18 1 751 1 763
Intangible assets 19 58 464 63 899
Goodwill 19 8 230 8 847
Interest in joint ventures 20.3 4 891 4 264
Other financial assets 20.1 49 414 162 617
Other non-financial assets 20.2 158 277
Deferred income tax asset 13.3 3 183 5 196
TOTAL FIXED ASSETS 1 292 262 1 371 867
Current assets
Inventories 22 444 930 601 205
Trade and other receivables 23 415 421 503 391
Corporate income tax receivables 847 633
Other non-financial assets 20.2 17 170 12 048
Other financial assets 20.1 51 798 283 411
Cash and cash equivalents 24 500 449 481 930
TOTAL CURRENT ASSETS 1 430 615 1 882 618
TOTAL ASSETS 2 722 877 3 254 485
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Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 14
(unless specified otherwise, all amounts are in PLN ‘000)
Accounting principles (policies) and additional explanatory notes to the financial statements
provided on pages 19 to 98 constitute an integral part hereof
Note
As at 31 December
2023
As at 31 December
2022
EQUITY AND LIABILITIES
Equity
Equity (attributable to the shareholders of the Parent
Entity)
Share capital 25.1 69 288 69 288
Supplementary capital 25.3 443 805 407 976
Other capital 25.4 175 639 312 447
FX differences on translation 25.2 (107 341) (39 794)
Retained earnings/Accumulated losses 25.5 862 036 837 702
1 443 427 1 587 619
Non-controlling interests 25.6 358 081 464 563
TOTAL EQUITY 1 801 508 2 052 182
Long-term liabilities
Loans payables 26 79 311 139 166
Provisions 28 5 095 1 264
Employee liabilities 27 41 139 43 547
Other financial liabilities 26 24 887 23 158
Deferred income tax provision 13.3 121 208 177 750
Grants and deferred income 29.2 8 113 10 512
279 753 395 397
Short-term liabilities
Loans payables 26 43 862 35 387
Provisions 28 1 240 9 202
Other financial liabilities 26 4 880 8 055
Trade and other payables 29.1 447 917 551 211
Employee liabilities 27 105 525 133 165
Income tax liability 29 485 55 043
Grants and deferred income 29.2 8 707 14 843
641 616 806 906
TOTAL LIABILITIES 921 369 1 202 303
TOTAL EQUITY AND LIABILITIES 2 722 877 3 254 485
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Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 15
(unless specified otherwise, all amounts are in PLN ‘000)
Accounting principles (policies) and additional explanatory notes to the financial statements
provided on pages 19 to 98 constitute an integral part hereof
Consolidated cash flow statement
Note
12-month period ended
on 31 December 2023
12-month period
ended on 31
December 2022
Cash flows from operating activities
Gross profit/(loss) 340 917 927 577
Adjustments for: 217 095 (255 264)
Depreciation/amortisation 11.6 118 237 130 994
Impairment of non-financial assets - -
FX gains/(loss) (4 610) 7 371
Interest, net 6 682 3 315
Profit/(loss) on investing activities 2 291 1 714
(Increase)/decrease in trade and other receivables 64 913 (124 010)
(Increase)/decrease in inventories 129 807 (223 436)
Increase/(decrease) of liabilities except loans, borrowings, bonds and
other financial liabilities (96 201) 89 375
Change in non-financial assets (27 959) (4 569)
Change in provisions 4 797 (8 888)
Change in pension provisions and employee liabilities (17 820) (26 663)
Change in grants and deferred income (7 813) 4 868
Co-generation certificates and CO2 emission rights (increase) 2 221 (11 746)
Change in settlement of realised forward contracts that meet hedge
accounting rules (reduction) 46 526 (20 913)
Change in accounting for unrealized forward contracts not meeting hedge
accounting rules (3 566) (72 340)
Other (410) (336)
Total flows from operations 558 012 672 313
Income tax paid (86 808) (64 930)
Net cash flows from operating activities 471 204 607 383
Cash flows from investing activities
Disposal of tangible fixed assets and intangible assets 2 989 -
Purchase of tangible fixed assets and intangible assets (200 172) (154 879)
Outflows from bank deposit set up for more than 3 months (41 520) -
Proceeds from bank deposit set up for more than 3 months 41 520 -
Interest received 531 -
Proceeds from forward contracts that do not comply with hedge accounting
rules 61 013 -
Acquisition of long-term financial assets (11 490) -
Other capital outflows / inflows 409 (1 000)
Net cash flows from investing activities (146 720) (155 879)
Cash flows from financing activities
Change to overdraft facilities - (18 313)
Repayment of leasing liabilities (9 795) (6 790)
Repayment of other financial liabilities (795) 1
Proceeds from borrowing 39 619 -
Repayment of loans (80 761) (48 049)
Dividend paid to shareholders of AP SA 15 (187 077) (27 715)
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Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 16
(unless specified otherwise, all amounts are in PLN ‘000)
Accounting principles (policies) and additional explanatory notes to the financial statements
provided on pages 19 to 98 constitute an integral part hereof
Dividend paid to non-controlling shareholders 25.6 (41 849) (20 088)
Interest paid (8 276) (3 634)
Net cash flows from financing activities (288 934) (124 588)
Increase/(decrease) in cash and cash equivalents 35 550 326 916
Net FX differences (17 031) (12 913)
Increase (decrease) in cash and cash equivalents after effects of exchange
rate changes
18 519 314 003
Cash and cash equivalents at the beginning of the period 481 930 167 927
Cash and cash equivalents at the end of the period 24 500 449 481 930
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Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 17
(unless specified otherwise, all amounts are in PLN ‘000)
The accounting policies and additional notes included on pages from 19 to 98 form an integral part of these financial statements.
Consolidated statement of changes in equity
Attributable
to the
shareholders
of the Parent
Entit
Note
Share
capital
Supplementary
capital
FX
differences
on
translation
of foreign
operations
Other
capital
Retained earnings
(Accumulated
losses) Total
Equity attributable
to non-controlling
shareholders Total equity
As at 1 January 2023 69 288 407 976 (39 794) 312 447 837 702 1 587 619 464 563 2 052 182
Net profit/(loss) for the period - - - - 247 132 247 132 25 256 272 388
Other net comprehensive income for the period - - (67 547) (136 808) 108 (204 247) (89 889) (294 136)
Total comprehensive income for the period - - (67 547) (136 808) 247 240 42 885 (64 633) (21 748)
Profit distribution - 35 829 - - (35 829) - - -
Payment of dividend to shareholders of AP SA 15, 26.6 - - - - (187 077) (187 077) (41 849) (228 926)
The sum of the changes in the capital - 35 829 (67 547) (136 808) 24 334 (144 192) (106 482) (250 674)
As at 31 December 2023 69 288 443 805 (107 341) 175 639 862 036 1 443 427 358 081 1 801 508
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Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 18
(unless specified otherwise, all amounts are in PLN ‘000)
The accounting policies and additional notes included on pages from 19 to 98 form an integral part of these financial statements.
Attributable
to the
shareholders
of the Parent
Entity
Note
Share
capital
Supplementary
capital
FX
differences
on
translation
of foreign
operations Other capital
Retained earnings
(Accumulated losses) Total
Equity attributable
to non-controlling
shareholders Total equity
As at 1 January 2022 69 288 407 976 7 534 201 226 226 113 912 137 330 859 1 242 996
Net profit/(loss) for the period - - - - 631 001 631 001 125 821 756 822
Other net comprehensive income for the period - - (47 328) 117 149 2 375 72 196 27 971 100 167
Total comprehensive income for the period - - (47 328) 117 149 633 376 703 197 153 792 856 989
Payment of dividend to shareholders of AP SA 15, 26.6 - - - (5 928) (21 787) (27 715) (20 088) (47 803)
Total changes in capital - - (47 328) 111 221 611 589 675 482 133 704 809 186
As at 31 December 2022 69 288 407 976 (39 794) 312 447 837 702 1 587 619 464 563 2 052 182
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Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 19
(unless specified otherwise, all amounts are in PLN ‘000)
Accounting principles (policies) and additional explanatory notes
1. General information
The Arctic Paper Group is a paper and pulp producer. We offer voluminous book paper and a wide range of products in this
segment, as well as high-grade graphic paper. The Group produces numerous types of uncoated and coated wood-free paper as
well as wood uncoated paper for printing houses, paper distributors, book and magazine publishing houses and the advertising
industry. As at 31 December 2023, the Arctic Paper Group employs over 1,500 people in its Paper Mills, companies involved in
sale of paper and in pulp producing companies, procurement office and a company producing food packaging. Our Paper Mills
are located in Poland and Sweden. Pulp Mills are located in Sweden. As at 31 December 2023, the Group had 13 Sales Offices
ensuring access to all European markets, including Central and Eastern Europe . Our consolidated sales revenues for 12 months
of 2023 amounted to PLN 3,549 million.
Arctic Paper Spółka Akcyjna is a holding company set up in April 2008. As a result of capital restructuring carried out in 2008, the
Paper Mills Arctic Paper Kostrzyn (Poland) and Arctic Paper Munkedals (Sweden), Distribution Companies and Sales Offices
have become the properties of Arctic Paper S.A. Previously they were owned by Arctic Paper AB (later Trebruk AB), the indirect
Parent Entity of Arctic Paper S.A. In addition, in its expansion, the Group acquired the Paper Mill Arctic Paper Mochenwangen
(Germany) in November 2008 and the Paper Mill Grycksbo (Sweden) in March 2010. In December 2012, the Group acquired a
controlling package of shares in Rottneros AB, a company listed on NASDAQ in Stockholm, Sweden, holding interests in two pulp
companies (Sweden).
The Parent Entity is entered in the register of entrepreneurs of the National Court Register maintained by the District Court in
Zielona Góra (Poland) – 8th Commercial Division of the National Court Register, under KRS number 0000306944. The Parent
Entity holds statistical number REGON 080262255.
The company’s registered office is located in Poland, in Kostrzyn nad Odrą (ul. Fabryczna 1). The Company also has a foreign
branch in Göteborg, Sweden.
Business activity
The core business of the Arctic Paper Group is the production of paper and pulp.
The Group’s additional business, subordinate to paper and pulp production, covers:
— Production of packaging,
— Generation of electricity,
— Transmission of electricity,
— Electricity distribution,
— Heat production,
— Heat distribution,
— Logistics services,
— Paper and pulp distribution
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Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 20
(unless specified otherwise, all amounts are in PLN ‘000)
Shareholding structure
As at 31.12.2023 As at 31.12.2022
Shareholder Number of
shares
Share
in the
share
capital
[%]
Number of
votes
Share in
the total
number of
votes
[%]
Shareholder Number of
shares
Share in
the share
capital
[%]
Number of
votes
Share in
the total
number of
votes
[%]
Thomas Onstad 47 205 107 68,13% 47 205 107 68,13% Thomas Onstad 47 205 107 68,13% 47 205 107 68,13%
- indirectly via 41 581 449 60,01% 41 581 449 60,01% - indirectly via 40 981 449 59,15% 40 981 449 59,15%
Nemus Holding AB 40 981 449 59,15% 40 981 449 59,15% Nemus Holding AB 40 381 449 58,28% 40 381 449 58,28%
other entity 600 000 0,87% 600 000 0,87% other entity 600 000 0,87% 600 000 0,87%
- directly 5 623 658 8,12% 5 623 658 8,12% - directly 6 223 658 8,98% 6 223 658 8,98%
Other 22 082 676 31,87% 22 082 676 31,87% Other 22 082 676 31,87% 22 082 676 31,87%
Total 69 287 783 100,00% 69 287 783 100,00% Total 69 287 783 100,00% 69 287 783 100,00%
Treasury shares - 0,00% - 0,00% Treasury shares - 0,00% - 0,00%
Total 69 287 783 100,00% 69 287 783 100,00% Total 69 287 783 100,00% 69 287 783 100,00%
Nemus Holding AB a company under Swedish law (a company owned indirectly by Mr Thomas Onstad), is the majority
shareholder of Arctic Paper S.A., holding (as at 31 December 2023) 40,981,449 shares of our Company, which constitutes
59.15% of its share capital and corresponds to 59.15% of the total number of votes at General Meetings. Thus Nemus Holding AB
is the parent entity of the Issuer.
Additionally, Mr Thomas Onstad, an indirect shareholder of Nemus Holding AB, holds directly 5,623,658 shares representing
8.12% of the total number of shares in the Company, and via another entity – 600,000 shares accounting for 0.87% of the total
number of shares of the Issuer. Mr Thomas Onstad’s total direct and indirect holding in the capital of Arctic Paper S.A. as at 31
December 2023 was 68.13% (31 December 2022: 68.13%) and has not changed until the date hereof.
The ultimate Parent Entity of the Group that prepares the consolidated financial statements is Nemus Holding AB. The ultimate
owner for the Group is Mr Thomas Onstad.
===== SIDA 21 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 21
(unless specified otherwise, all amounts are in PLN ‘000)
2. Group composition
The Group is composed of Arctic Paper S.A. and the following subsidiaries:
Unit Registered office Business activity
Group’s interest in
the equity of the
subsidiary entities
as at
31
December
2023
31
December
2022
Arctic Paper Kostrzyn S.A. Poland, Fabryczna 1, 66-470
Kostrzyn nad Odrą Paper production 100% 100%
Arctic Paper Munkedals AB Sweden, SE 455 81 Munkedal Paper production 100% 100%
Arctic Paper Mochenwangen GmbH Germany, Fabrikstrasse 62, DE-
882, 84 Wolpertswende
Non-operating
company, formerly
paper production
99,74% 99,74%
Arctic Paper Grycksbo AB Sweden, Box 1, SE 790 20
Grycksbo Paper production 100% 100%
Arctic Paper UK Limited United Kingdom, 8 St Thomas
Street SE1 9RR London Trading company 100% 100%
Arctic Paper Baltic States SIA Latvia, K. Valdemara iela 33-20,
Riga LV-1010 Trading company 100% 100%
Arctic Paper Deutschland GmbH Germany, Am Sandtorkai 71, D-
20457 Hamburg Trading company 100% 100%
Arctic Paper Benelux S.A. Belgium, Ophemstraat 24, B-
3050 Oud-Heverlee Trading company 100% 100%
Arctic Paper Schweiz AG Switzerland, Gutenbergstrasse 1,
CH-4552 Derendingen Trading company 100% 100%
Arctic Paper Italia srl Piazzale Biancamano 8
20121 Milano, Italia Trading company 100% 100%
Arctic Paper Danmark A/S Denmark, Korskildelund 6 DK-
2670 Greve Trading company 100% 100%
Arctic Paper France SAS France, 43 rue de la Breche aux
Loups, 75012 Paris Trading company 100% 100%
Arctic Paper Espana SL Spain, Avenida Diagonal 472-474,
9-1 Barcelona Trading company 100% 100%
Arctic Paper Papierhandels GmbH Austria, Hainborgerstrasse 34A,
A-1030 Wien Trading company 100% 100%
Arctic Paper Polska Sp. z o.o. Poland, Okrężna 9, 02-916
Warszawa Trading company 100% 100%
Arctic Paper Norge AS Norway, Eikenga 11-15, NO-0579
Oslo Trading company 100% 100%
Arctic Paper Sverige AB Sweden, SE 455 81 Munkedal Trading company 100% 100%
Arctic Power Sp.z o.o. (formerly
Arctic Paper East Sp. z o.o.)
Poland, Fabryczna 1, 66-470
Kostrzyn nad Odrą Production of energy 100% 100%
Arctic Paper Investment GmbH * Germany, Fabrikstrasse 62, DE-
882, 84 Wolpertswende
Activities of holding
companies 100% 100%
Arctic Paper Finance AB Sweden, Box 383, 401 26
Göteborg
Activities of holding
companies 100% 100%
Arctic Paper Verwaltungs GmbH * Germany, Fabrikstrasse 62, DE-
882, 84 Wolpertswende
Activities of holding
companies 100% 100%
Arctic Paper Immobilienverwaltung
GmbH&Co. KG*
Germany, Fabrikstrasse 62, DE-
882, 84 Wolpertswende
Activities of holding
companies 94,90% 94,90%
Arctic Paper Investment AB ** Sweden, Box 383, 401 26
Göteborg
Activities of holding
companies 100% 100%
===== SIDA 22 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 22
(unless specified otherwise, all amounts are in PLN ‘000)
Unit Registered office Business activity
Group’s interest in
the equity of the
subsidiary entities
as at
31
December
2023
31
December
2022
EC Kostrzyn Sp. z o.o. Poland, ul. Fabryczna 1, 66-470
Kostrzyn nad Odrą
Rental of properties
and machines and
equipment
100% 100%
Munkedals Kraft AB Sweden, 455 81 Munkedal Production of
hydropower 100% 100%
Kostrzyn Packaging Spółka z o.o. Poland, ul. Fabryczna 1,
66-470 Kostrzyn nad Odrą
Production of
packaging 76% 100%
Kalltorp Kraft Hb Sweden, Trollhatan Production of
hydropower 50% 50%
Rottneros AB Sweden, Söderhamn Activities of holding
companies 51,27% 51,27%
Rottneros Bruk AB Sweden, Rottneros Pulp production 51,27% 51,27%
Utansjo Bruk AB Sweden, Söderhamn Non-operating company 51,27% 51,27%
Vallviks Bruk AB Sweden, Vallvik Pulp production 51,27% 51,27%
Nykvist Skogs AB Sweden, Gräsmark Company grouping
forest owners 51,27% 51,27%
Rottneros Packaging AB Sweden, Sunne Production of food
packaging 51,27% 51,27%
SIA Rottneros Baltic Latvia, Kuldiga Procurement bureau 51,27% 51,27%
* – companies established for the purpose of the acquisition of Arctic Paper Mochenwangen GmbH
** – company established to acquire Grycksbo Paper Holding AB (closed in 2015) and indirectly Arctic Paper Grycksbo AB
As at the date of this report, there were no changes from 31 December 2023.
As at 31 December 2023 and as well as on the day hereof, the percentage of voting rights held by the Group in its subsidiaries
corresponded to the percentage held in the share capital of those entities. All subsidiaries in the Group are consolidated using
the full method from the date on which the Group obtains control over them and cease to be consolidated from the date on
whichcontrol ceases.
3. Composition of the management and supervisory bodies
Management Board of the Parent Entity
As at 31 December 2023, the Parent Entity’s Management Board was composed of:
— Michał Jarczyński – President of the Management Board appointed on 10 December 2018, with effect from 1 February 2019;
— Katarzyna Wojtkowiak – Member of the Management Board appointed on 29 May 2023;
— Fabian Langenskiöld – Member of the Management Board appointed on 14 August 2023.
On 9 May 2023, Mr Göran Eklund resigned as Member of the Management Board and CFO of the Parent Entity with effect from 29
May 2023.
===== SIDA 23 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 23
(unless specified otherwise, all amounts are in PLN ‘000)
The Supervisory Board, by resolution of 9 May 2023, appointed Ms Katarzyna Wojtkowiak as a Member of the Parent Entity’s
Management Board with effect from 29 May 2023. Ms Katarzyna Wojtkowiak also holds the position of CFO.
The Supervisory Board, by resolution of 9 August 2023, appointed Mr Fabian Langenskiöld as a Member of the Parent Entity’s
Management Board with effect from 14 August 2023. Mr Fabian Langenskiöld also holds the position of Executive Vice-President
for Sales and Marketing.
Members of the Executive Board shall hold office continuously from the date of their appointment.
From 31 December 2023 until the publication date of the financial statements no other changes in the composition of the
Management Board of the Company occurred.
Supervisory Board of the Parent Entity
As at 31 December 2023, the Parent Entity’s Supervisory Board was composed of:
Per Lundeen – Chairman of the Supervisory Board appointed on 22 September 2016 (appointed to the Supervisory Board on
14 September 2016);
Roger Mattsson – Deputy Chairman of the Supervisory Board appointed on 22 September 2016 (appointed as a Member of the
Supervisory Board on 14 September 2014);
Thomas Onstad – Member of the Supervisory Board appointed on 22 October 2008;
Zofia Dzik – Member of the Supervisory Board appointed on 22 June 2021;
Anna Jakubowski – Member of the Supervisory Board appointed on 22 June 2021.
Members of the Supervisory Board shall hold office continuously from the date of their appointment.
Up to the date of publication of these consolidated financial statements, there were no changes in the composition of the Parent
Entity’s Supervisory Board.
Audit Committee of the Parent Entity
As at 31 December 2023, the Parent Entity’s Audit Committee was composed of:
Anna Jakubowski – Chairperson of the Audit Committee appointed on 22 June 2021 (appointed as Member of the Audit
Committee on 5 August 2021);
Zofia Dzik – Member of the Audit Committee appointed on 22 June 2021 (appointed as Member of the Audit Committee on 5
August 2021);
Roger Mattsson – Audit Committee Member appointed on 14 September 2014 (appointed as Audit Committee Member on 23
June 2016).
The members of the Audit Committee shall hold office continuously from the date of their appointment
Up to the date of publication of these consolidated financial statements, there were no changes in the composition of the Parent
Entity’s Audit Committee.
4. Approval of the financial statements
These consolidated financial statements were approved for publication by the Parent Entity’s Management Board on 04 April
2024.
===== SIDA 24 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 24
(unless specified otherwise, all amounts are in PLN ‘000)
5. Relevant values based on professional judgement and
estimates
Professional judgement
In the process of applying accounting policies to the areas presented below, professional judgement of the management has the
most significant effect, apart from accounting estimates.
Liabilities under leases – the Group as the lessee
The Group has lease contracts which it recognizes in accordance with IFRS 16. IFRS 16 introduced a uniform lessee accounting
model and requires the lessee to recognize the assets and liabilities arising from each lease. On the lease commencement date,
the lessee recognizes an asset with respect to the right to use the underlying asset and a lease liability that reflects the lessee’s
obligation to make lease payments. The Parent Entity’s management exercises its professional judgement, inter alia, in
determining whether a contract constitutes a lease and in determining the lease term when there is an option to extend the
contract term, and makes an estimate in determining the marginal interest rate for leases based on the requirements in IFRS 16.
For more information, see Note 17.
Uncertainty of estimates
The basic assumptions for the future and other key sources of uncertainties as at the balance sheet date that affect the risk of
major adjustments in the carrying amount of assets and liabilities in the next financial year are presented below.
Impairment of tangible and intangible fixed assets in Arctic Paper Grycksbo
Due to the high demand for paper and the strong financial performance of Arctic Paper Grycksbo, following the annual
assessment of the impairment rationale for tangible fixed assets and intangible assets, the Management Board identified the need
to test the non-financial fixed assets for impairment for the Paper Mill in order to update impairment allowances recognised in
previous years.
In connection with the test, the Company makes a number of estimates, of which the forecast sales volumes, selling prices, raw
material purchase prices, energy prices, discount rate and the growth rate over the residual period have the greatest impact on
the value in use of the assets. Some of the assumptions used to determine the value in use of assets are based on unobservable
inputs and are therefore subject to estimation uncertainty.
The results of the test as at 31 December 2023 were presented in note 21.2. The test performed as at 31 December 2023
resulted in the reversal of part of the impairment allowance.
Impairment for unamortised intangible assets and goodwill
As at 31 December 2023, in accordance with the requirements of EU IFRS, Rottneros performed an impairment test for
trademarks and goodwill arising from the acquisition of a subsidiary in January 2020. The test did not show the need to make an
impairment allowance for this asset. The results of the test as at 31 December 2023 were presented in note 21.1.
Retirement benefits and other post-employment benefits
The costs of retirement post-employment benefits is determined with actuarial techniques. The estimates were presented in note
27.2. Actuarial measurements require certain assumptions as to the applicable discount rates, anticipated salary increases,
mortality ratio and projected growth of retirement benefits. Due to the long-term nature of the programmes, the estimates are
subject to certain uncertainties. For more information, see Note 27.2.
Deferred income tax asset
The Group recognises a deferred income tax asset assuming that taxable profit will be generated in the future to utilise the asset.
Material deterioration of the generated taxable profit in the future could render this assumption unjustified. The calculation of the
deferred income tax asset is presented in note 13.3.
===== SIDA 25 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 25
(unless specified otherwise, all amounts are in PLN ‘000)
Fair value of financial instruments
Fair value of financial instruments for which there is no active market is measured using the appropriate valuation techniques.
The Group uses professional judgement to select adequate methods and to make assumptions. The fair value of financial
instruments is presented in note 35.1.
Depreciation/amortisation rates
Depreciation/amortisation rates are determined on the basis of the anticipated useful lives of tangible fixed assets and intangible
assets. Every year, the Group reviews the approved economic useful lives on the basis of current estimates. The approved
economic useful lives for each tangible fixed asset are presented in note 9.5 and for intangible assets in note 9.7.
Uncertainties related to tax settlements
Regulations related to VAT, corporate income tax and charges related to social insurance are subject to frequent changes. Those
frequent changes result in unavailability of appropriate points of reference, inconsistent interpretations and few precedents that
could apply. Additionally, the applicable regulations contain also certain ambiguities that result in differences of opinion as to
legal interpretations of tax regulations – among public authorities and between public authorities and enterprises.
Therefore, the amounts presented and disclosed in the financial statements may change in the future as a result of final decisions
by tax inspection authorities.
The Group recognises and measures current and deferred tax assets or liabilities using the requirements of IAS 12 Income Taxes
on the basis of tax profit/(loss), tax base and tax rates, taking into account an assessment of the uncertainties associated with tax
settlements. When an uncertainty exists if and to what extent the tax authority accepts tax settlements to specific transactions,
the Group recognises those settlements subject to uncertainty assessment.
Impairment allowances to inventories and receivables
The Group estimates its impairment allowance to receivables in the amount of anticipated credit losses over the whole life of the
receivables since the initial recognition. The amount of impairment for receivables is the difference between the carrying amount
of the receivables and the estimated probable collectible amount.
Impairment allowances for inventories are made when the carrying amount of a specific assortment is lower than its net realisable
price. The net sales price is estimated as the realisable price of the assortment net of selling and distribution costs. Several factors
are taken into account when creating inventory impairment allowances. The most important of these are the duration of the backlog
and the assessment of the possibility of finding its use. When calculating such an allowance, the possibility of reusing the product
in the production process is also taken into account, in which case the allowance is reduced by this value.
More information on impairment allowances on inventories is included in note 22, and impairment allowances on receivables in
note 23.
6. Basis for the preparation of the consolidated financial
statements
These Consolidated Financial Statements have been made in accordance with the historical cost convention, with the exception
of investment properties and derivative financial instruments that are measured at fair value.
These Consolidated Financial Statements are presented in the Polish Zloty (“PLN”), and all values, unless indicated otherwise,
are stated in PLN ‘000.
===== SIDA 26 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 26
(unless specified otherwise, all amounts are in PLN ‘000)
These Consolidated Financial Statements have been prepared based on the assumption that the Group will continue as a going
concern in the foreseeable future.
Compliance statement
These consolidated financial statements have been prepared in accordance with the Regulation of the Minister of Finance of 29
March 2018 on current and periodic information provided by issuers of securities and the conditions for recognising as equivalent
the information required by the laws of a non-member state (Journal of Laws 20018, item 757, as amended), and the International
Financial Reporting Standards (“IFRS”) as endorsed by the European Union (“EU IFRS”).
IFRS cover standards and interpretations approved by the International Accounting Standards Board (IASB).
Certain subsidiaries of the Group maintain their books of account in compliance with the accounting policies (principles) as set
forth in the Accounting Act of 29 September 1994 (“Act”) as amended, and the regulations issued pursuant thereto (“Polish
accounting standards”) or in compliance with other local accounting standards applicable to foreign operations. The consolidated
financial statements contain adjustments that are not incorporated in the books of account of the Group entities, implemented to
make the financial data of those entities compliant with EU IFRS.
Currency of the financial statements and functional currencies
The Group’s consolidated financial statements are presented in PLN which is also the functional currency of the Parent Entity. A
functional currency is determined for each subsidiary and the assets and liabilities of each entity are measured in its relevant
functional currency. The functional currencies of the Group companies included in these consolidated financial statements are as
follows: Polish zloty (PLN), Swedish krona (SEK), euro (EUR), Norwegian krone (NOK), Danish krona (DKK), pound sterling
(GBP) and Swiss franc (CHF).
7. Changes in previously applied accounting policies and
comparability of data
Modifications to the existing accounting principles
The accounting policies applied in the preparation of the interim abbreviated consolidated financial statements are consistent with
those used in the preparation of the Group’s annual consolidated financial statements for the year ended 31 December 2022,
except as set out below.
a) IFRS 17 “Insurance contracts” and amendments to IFRS 17
IFRS 17 “Insurance Contracts” was issued by the International Accounting Standards Board on 18 May 2017, while the
amendments to IFRS 17 were published on 25 June 2020. The new standard is effective for annual periods beginning on or after
1 January 2023.
IFRS 17 Insurance Contracts will replace the current IFRS 4, which allows for a variety of practices in accounting for insurance
contracts. The new standard will fundamentally change the accounting for all entities that deal with insurance contracts and
investment contracts; however, the scope of the standard is not limited to insurance companies only, and contracts entered into
by entities other than insurance companies may also contain an element that meets the definition of an insurance contract (as
defined in IFRS 17).
b) Amendment to IFRS 17 “Insurance Contracts”
The amendment relates to the transitional requirements in connection with the first-time application of IFRS 17 “Insurance
Contracts” and IFRS 9 “Financial Instruments”. The purpose of the amendment is to ensure the usefulness of financial information
===== SIDA 27 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 27
(unless specified otherwise, all amounts are in PLN ‘000)
for investors in the period of initial application of the new standard by introducing certain simplifications with regard to the
presentation of comparative information.
The amendment relates only to the application of the new IFRS 17 standard and does not affect any other requirements in IFRS
17.
c) Amendments to IAS 1 “Presentation of Financial Statements” and the IFRS Board’s guidance on disclosure of accounting
policies in practice
The amendment to IAS 1 introduces the requirement to disclose material information about accounting policies as defined in the
standard. The amendment clarifies that information on accounting policies is material if, in its absence, users of the financial
statements would not be able to understand other relevant information contained in the financial statements. In addition, the
Board’s guidance on the application of the concept of materiality in practice has also been revised to provide guidance on the
application of the concept of materiality to accounting policy disclosures. The change is effective from 1 January 2023.
d) Amendments to IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors”:
In 2021 the Board published an amendment to IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors”
regarding the definition of estimates. The amendment to IAS 8 clarifies how entities should distinguish between changes in
accounting policies and changes in accounting estimates. The change is effective from 1 January 2023.
e) Amendments to IAS 12 “Income Taxes”
The amendments to IAS 12 clarify how to account for deferred tax on transactions such as leases and retirement obligations.
Prior to the amendment to the standard, there was ambiguity as to whether the recognition of equal amounts of an asset and a
liability for accounting purposes (e.g. the initial recognition of a lease) with no impact on current tax settlements necessitates the
recognition of deferred tax balances or whether the so-called initial recognition exemption applies, which states that deferred tax
balances are not recognised if the recognition of an asset or liability has no impact on the accounting or tax outcome at the time
of that recognition. Revised IAS 12 addresses this issue by requiring deferred tax to be recognised in the above situation by
additionally stating that the exemption from initial recognition does not apply if an entity simultaneously recognises an asset and
an equivalent liability and each creates temporary differences.
The amendment is effective for financial statements for periods beginning on or after 1 January 2023.
f) Amendments to IAS 12 Income Tax: Global Minimum Tax (Pillar Two)
In May 2023 the Management Board published amendments to IAS 12 “Income Tax” in response to the Pillar Two global minimum
income tax regulations issued by the Organisation for Economic Co-operation and Development (OECD) in connection with
international tax reform. The amendment to IAS 12 provides a temporary exemption from the requirement to recognise deferred
tax arising from enacted tax law that implements the Pillar Two model rules. Companies can apply the guidance of the revised
IAS 12 standard immediately, while specific disclosures are required for annual periods beginning on or after 1 January 2023. At
the date of these consolidated financial statements, this amendment has not yet been approved by the European Union.
The Group did not decide to adopt earlier any other standards, interpretations or amendments that were issued but are not yet
effective for periods commencing on 1 January 2023.
8. New standards and interpretations that have been published
and are not yet effective
In these consolidated financial statements, the Group has not decided to early apply the following published standards,
interpretations or amendments to existing standards before their effective date:
a) Amendment to IFRS 16 “Leases”
In September 2022 the Supervisory Board amended IFRS 16 “Leases” by supplementing the requirements for the subsequent
measurement of the lease liabilities for sale and leaseback transactions, where the criteria of IFRS 15 are met and the
transaction should be accounted for as a sale.
===== SIDA 28 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 28
(unless specified otherwise, all amounts are in PLN ‘000)
The change requires the seller-lessee to subsequently measure the lease liabilities resulting from the leaseback in such a way as
not to recognize a gain or loss related to the retained right of use. The new requirement is particularly relevant where sale-
leasebacks include variable lease payments that do not depend on an index or rate, as these payments are excluded from “lease
payments” under IFRS 16. The revised standard includes a new example that illustrates the application of the new requirement in
this respect. The amendment is effective from 1 January 2024. At the date of these consolidated financial statements, the
amendment has not yet been approved by the European Union.
b) Amendments to IAS 1 “Presentation of Financial Statements”
In 2020, the Supervisory Board published amendments to IAS 1, which clarify the presentation of liabilities as long-term and
short-term. In October 2022, the Supervisory Board issued further amendments to the IAS 1 standard, which address the issue of
classifying liabilities as long-term and short-term, in relation to which the entity is obliged to meet certain contractual
requirements, the so-called covenants. The amended IAS 1 provides that liabilities are classified as short-term or long-term
depending on the rights existing at the end of the reporting period. Neither the entity’s expectations nor events after the reporting
date (for example, waiver or breach of covenant) affect the classification.
The published amendments are effective for financial statements for periods beginning on or after 1 January 2024.
At the date of these consolidated financial statements, these amendments have not yet been approved by the European Union.
c) Amendments to IAS 7 “Statement of cash flows” and IFRS 7 “Financial instruments: disclosures” – disclosure of supplier
finance arrangements
In May 2023, the Supervisory Board published amendments to IAS 7 “Statement of cash flows” and IFRS 7 “Financial
instruments: disclosures. The amendments to the standards introduce disclosure requirements for supplier financing
arrangements. The amendments require specific disclosures about the entity’s financial contracts with suppliers to enable readers
of the financial statements to assess the impact of those contracts on the entity’s liabilities and cash flows and the entity’s
exposure to liquidity risk. These amendments are intended to increase the transparency of disclosures about arrangements made
with suppliers. The changes do not affect recognition and measurement principles, only disclosure requirements. The new
disclosure obligations will be effective for annual reporting periods beginning on or after 1 January 2024.
At the date of these consolidated financial statements, these amendments have not yet been approved by the European Union.
d) IAS 21 “The Effects of Changes in FX Rates”
In August 2023 the Supervisory Board published amendments to IAS 21 “The Effects of Changes in FX Rates”. The changes
introduced are intended to make it easier for entities to determine whether a currency is convertible into another currency and to
estimate the immediate FX rate when a currency is not convertible. In addition, the amendments to the standard introduce
additional disclosures when currencies are not convertible on how the alternative FX rate is determined.
The published amendments are effective for financial statements for periods beginning on or after 1 January 2025.
At the date of these consolidated financial statements, these amendments have not yet been approved by the European Union.
e) IFRS 14 “Regulatory accruals”
This standard allows entities that prepare their financial statements in accordance with IFRS for the first time (on or after 1
January 2016) to recognise amounts arising from price-regulated activities in accordance with existing accounting policies. To
improve comparability, with entities that already apply IFRS and do not report such amounts, under published IFRS 14, amounts
arising from regulated price activities should be presented as a separate line item in both the statement of financial position and
the statement of profit and loss and statement of other comprehensive income.
By a decision of the European Union, IFRS 14 will not be endorsed.
f) Amendments to IFRS 10 and IAS 28 on the sale or contribution of assets between an investor and its associates or joint
ventures
===== SIDA 29 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 29
(unless specified otherwise, all amounts are in PLN ‘000)
The amendments resolve the current inconsistency between IFRS 10 and IAS 28. The accounting treatment depends on whether
the non-monetary assets sold or contributed to the associate or joint venture constitute a “business”.
Where non-monetary assets constitute a “business”, the investor shows a full profit or loss on the transaction. If, on the other
hand, the assets do not meet the definition of a business, the investor only recognises a gain or loss to the extent of the portion
representing the interests of other investors.
The amendments were published on 11 September 2014. At the date of these consolidated financial statements, approval of this
amendment is deferred by the European Union.
g) Reform of the interest rate reference index (IBOR reform)
On 1 January 2018, Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices to be
used as benchmarks in financial instruments and contracts (“IBOR Reform”) entered into force. An amendment to the regulation
was issued in February 2021. The regulation introduced a new standard for the determination and application of reference rates
used in the financial market. Consequently, the approach to setting WIBOR and EURIBOR rates has been reformed. The LIBOR
rates for the British pound, Swiss franc, yen and euro ceased to be quoted from 1 January 2022 and were replaced by alternative
rates. At the same time, the 1W and 2M LIBOR rates for the US dollar ceased to be quoted. In line with the current decisions of
the reform appointees, the remaining USD LIBOR rates are likely to exist until 30 June 2023.
It is not expected that the above Amendments, other than the application of the changes arising from IAS 1, will have a
significant impact on the Group’s financial statements.
Implementation of new standards
As at the date of approval of these Consolidated Financial Statements for publication, the Management Board of the Parent Entity
does not expect material impact of the introduction of other standards and interpretations on the accounting principles (policy)
applied by the Group with respect to the Group’s operations or its financial results.
9. Major accounting policies
Principles of consolidation
These Consolidated Financial Statements cover financial statements of Arctic Paper S.A. and its subsidiaries for the year ended
on 31 December 2023. The financial statements of subsidiary entities, subject to adjustments to achieve compliance with EU
IFRS, are made for the same reporting period as the financial statements of the patent entity relying on consistent accounting
principles, applied to similar transactions and economic events. In order to eliminate any discrepancies in the applied accounting
standards, adjustments are made. All material balances and transactions among Group entities, including unrealised profit on
transactions within the Group, have been fully eliminated. Unrealised losses are eliminated unless they evidence impairment.
Subsidiaries are consolidated using the full method from the date on which the Group obtains control over them and cease to be
consolidated from the date on which control ceases. Control by the Parent Entity occurs when:
— it exercises power over the entity,
— it is exposed to variable return or is entitled to variable return as a result of its involvement in the entity,
— it is able to exercise its power to affect the level of generated return.
The Company verifies its effective control over other entities if a situation occurs that may indicate a change to one or more of
the above requirements for control to be effective.
When the Company holds less than a majority of votes in an entity but the held voting rights are sufficient to unilaterally direct the
essential matters of the entity, this means that control is exercised. When assessing if the voting rights in an entity are sufficient
to ensure power, the Company analyses all material circumstances, such as:
===== SIDA 30 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 30
(unless specified otherwise, all amounts are in PLN ‘000)
— the volume of the package of voting rights versus the volumes of other packages and distribution of voting rights held by
other shareholders;
— potential voting rights held by the Company, other shareholders or other parties;
— rights resulting from contractual arrangements; and
— additional circumstances that may prove if the Company is or is not able to direct material operations when decisions are
taken, including voting schemes observed at previous shareholder meetings.
Change to the holdings by the Parent Entity that do not result in loss of control over subsidiary entities, are recognised as capital
transactions. In such instances, in order to reflect the changes in relative interests in subsidiary entities, the Group adjusts the
carrying amount of controlling interests and non-controlling interests. All differences between the adjustment amounts to non-
controlling interests and the fair value of the amount paid or received, are recognised to equity and attributed to the owners of the
Parent Entity.
Involvement in joint ventures
Joint ventures are contractual arrangements pursuant to which two or more parties take up economic operations that is subject to
joint control. W przypadku Grupy, wspólne przedsięwzięcie dotyczy spółki Kalltorp Kraft Hb.
The Group’s investments in joint ventures are recognised in the consolidated financial statements with the equity method. In
accordance with the equity method, investments in joint ventures are initially recognised at cost and afterwards adjusted to reflect
the Group’s share in the financial result and other comprehensive income of the joint venture. If the Group’s share in losses of a
joint venture exceeds the value of its interest in the entity, the Group discontinues to disclose its share in further losses.
Additional losses are recognised solely to the extent corresponding to legal or customary obligations assumed by the Group or
payments made on behalf of the joint venture.
Investments in joint ventures are disclosed with the equity method since the day the entity has obtained the status of a joint
venture. On the day the investment is made in a joint venture, the amount by which the investment costs exceed the Group’s
interest in the net fair value of identifiable assets and liabilities of the entity, is recognised as goodwill and included in the
carrying amount of the investment. The amount by which the Group’s interest in the net fair value of identifiable assets and
liabilities exceeds the costs of the investment, is recognised directly in profit and loss of the period in which the investment was
made.
If necessary, the entire carrying amount of the investment is tested for impairment in compliance with IAS 36 Impairment of
Assets as a single asset and its realisable value is compared to the carrying amount. Such recognised impaired value constitutes
a part of the carrying amount of the investment. Such impairment is reversed in compliance with IAS 36 to the extent
corresponding to a subsequent increase in the realisable value of the investment.
The Group discontinues to apply the equity method on the day the investment stops being a joint venture and when it is
reclassified to assets available for sale. The difference between the carrying amount of a joint venture as at the day the equity
method is no longer applied and the fair value of retained interests and proceeds from the sale of certain interests in the entity, is
taken into account when calculating the profit or loss on disposal of such joint venture.
If the Group decreases its interests in a joint venture and continues to account for it with the equity method, in its financial result
it recognises the part of profit or loss previously recognised in other comprehensive income corresponding to the reduced interest
if such profit or loss is subject to re-classification to financial result at disposal of the related assets or liabilities.
Gains/losses on measurement of interests in joint ventures are recognised as other financial income/expenses.
===== SIDA 31 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 31
(unless specified otherwise, all amounts are in PLN ‘000)
Fair value measurement
The Group measures financial instruments such as derivative instruments and non-financial assets such as investment properties
at fair value as at each balance sheet date. Additionally, the fair value of financial instruments measured at amortised cost is
disclosed in note 35.1.
The fair value is understood as the price that could be received for the sale of an asset or paid as a result of transfer of a liability
subject to ordinary sale of such asset between market players as at the measurement date at the prevailing market conditions.
Fair value measurement is based on an assumption that the sale transaction of an asset or transfer of a liability is executed:
in the main market for such asset or liability;
if no main market exists, in the most advantageous market for such asset or liability.
Both the main and most advantageous market must be accessible to the Group.
The fair value of an asset or liability is measured subject to an assumption that market players act in their best economic
interests when setting the price of such asset or liability.
The measurement of the fair value of a non-financial asset provides for the possibility of a market player to generate economic
benefits as a result of most intensive and best use of the asset or sale thereof to another market player that would ensure the
most intensive and best use of such asset.
The Group applies measurement techniques that are adequate to the circumstances at hand and when adequate data is available
to measure the fair value with maximum use of adequate observable input data and minimum use of non-observable input data.
All assets and liabilities that are measured at fair value or their fair value is disclosed in the financial statements, are classified in
the hierarchy of fair value in the way described below to the lowest level of input data which is material for the measurement at
fair value treated as a whole:
— Level 1 – Listed (unadjusted) market prices in an active market for identical assets or liabilities,
— Level 2 – Measurement techniques for which the lowest level of input data that is material for the measurement at fair
value as a whole is observable or indirectly observable,
— Level 3 – Measurement techniques for which the lowest level of input data that is material for the measurement at fair
value as a whole is not observable.
As at each balance sheet date, for assets and liabilities occurring as at each balance sheet date in the financial statements, the
Group assesses if there have been transfers between the hierarchy levels by re-assessment of the classification to each level,
following the materiality of the input data from the lowest level which is material for measurement at fair value treated as a whole.
Summary of material accounting principles relating to measurement at fair value.
The Management Board of Arctic Paper S.A. define policies and procedures for both systematic fair value measurement of
investment properties, hedging instruments (SWAPs, forwards) and other derivatives to be used by the boards of directors of
subsidiaries.
Independent appraisers are retained to measure material assets such as properties as at the end of each financial year.
Measurement at fair value of financial instruments is performed by independent financial institutions specialised in the
measurement of such instruments.
===== SIDA 32 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 32
(unless specified otherwise, all amounts are in PLN ‘000)
For the disclosure of results of such measurement at fair value, the Group has defined classes of assets and liabilities on the
basis of the type, features and risks related to individual assets and liabilities and the level in the hierarchy of fair value, as
described above.
Foreign currency translation
Transactions denominated in currencies other than the functional currency of the entity are translated into the presentation
currency at the FX rate prevailing on the transaction date.
On the balance sheet date, monetary assets and liabilities expressed in currencies other than the functional currency of the entity
are translated into the functional currency using the mean foreign exchange rate prevailing for the presentation currency as at the
end of the reporting period. FX differences from translation are recognised under financial income or financial expenses or are
capitalised as cost of assets, as defined in the accounting policies. Non-monetary foreign currency assets and liabilities
recognised at historical cost are translated at the historical foreign exchange rates prevailing on the transaction date. Non-
monetary assets and liabilities denominated in a currency other than the functional currency, recognised at fair value are
translated into the functional currency using the rate of exchange prevailing on the date of revaluation to fair value.
The functional currencies of the foreign subsidiaries are EUR, SEK, DKK, NOK, GBP and CHF. As on the balance sheet date, the
assets and liabilities of those subsidiaries are translated into the presentation currency of the Group (PLN) at the rate of
exchange prevailing on the balance sheet date and their statement of profit and loss is translated using the average weighted
exchange rates for the relevant reporting period. The FX differences on translation are recognised in other total comprehensive
income and cumulated in a separate equity item. On disposal of a foreign operation, the cumulative amount of the deferred FX
differences recognised in equity and relating to that particular foreign operation shall be recognised in the statement of profit and
loss.
The following exchange rates were used for book valuation purposes:
31 December 2023
31 December 2022
USD 3,9350 4,4018
EUR 4,3480 4,6899
SEK 0,3919 0,4213
DKK 0,5833 0,6307
NOK 0,3867 0,4461
GBP 4,9997 5,2957
CHF 4,6828 4,7679
Mean currency exchange rate for the reporting periods are as follows:
Średnie kursy wymiany za poszczególne okresy obrotowe kształtowały się następująco:
01/01 - 31/12/2023 01/01 - 31/12/2022
USD 4,2030 4,4615
EUR 4,5437 4,6876
SEK 0,3962 0,4411
DKK 0,6098 0,6301
NOK 0,3984 0,4643
GBP 5,2230 5,4989
CHF 4,6753 4,6700
===== SIDA 33 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 33
(unless specified otherwise, all amounts are in PLN ‘000)
Tangible fixed assets
Tangible fixed assets are measured at purchase price or construction cost reduced by accumulated depreciation and all
impairment allowances. The initial value of fixed assets comprises their purchase price and any directly attributable costs of
bringing the asset to working condition for its intended use. The cost also comprises the expenses for replacement of fixed asset
components when incurred, if the recognition criteria are met. Costs incurred after the date the fixed asset is placed in service,
such as maintenance and repair costs, are charged to the statement of profit and loss as they are incurred.
Upon purchase, fixed assets are divided into components which represent items with a significant value that can be allocated a
separate economic useful life. Overhauls also represent asset components. These expenditures are only capitalised if it is likely
that they will result in an economic benefit to the Group associated with the expenditure.
Tangible fixed assets are depreciated using the straight-line method over their estimated useful lives as follows:
Type Period
Buildings and structures 25-50 years
Plant and machinery 5-20 years
Office equipment 3-10 years
Motor vehicles 5-10 years
Computers 1-10 years
Residual values, useful lives and depreciation methods of asset components are reviewed annually and, if necessary, adjusted
retrospectively i.e. with effect from the beginning of the financial year that has just ended.
An item of tangible fixed assets may be removed from the statement of financial position upon disposal or when no economic
benefits are expected from the continued use of such an asset. Any profit or loss arising from the derecognition of an asset from
the statement of financial position (calculated as the difference between the net disposal proceeds, if any, and the carrying
amount of the item) is recognised in the statement of profit and loss in the period in which the derecognition occurs. Construction
in progress refers to fixed assets under construction or assembly and is stated at cost, less any impairment allowances. Assets
under construction are not depreciated until completed and brought into use.
9.5.1. Right-of-use assets and leasing
In accordance with IFRS 16, the Group applies a uniform lessee accounting model, which requires the lessee to recognize assets
and liabilities resulting from each lease. On the lease commencement date, the lessee recognizes an asset with respect to the
right to use the underlying asset and a lease liability that reflects the lessee’s obligation to make lease payments.
The lessee separately recognizes depreciation of an asset with respect to the right of use and interest on the lease liability.
The lessee updates the measurement of the lease liability after the occurrence of certain events (e.g. changes in the lease
period, changes in future lease payments resulting from a change in the index or the rate used to determine such payments). In
such instances, the lessee recognises the revaluation of the lease liability as an adjustment to the value of the asset with respect
to the right of use.
As at 1 January 2019, the Group applied IFRS 16 for the first time and introduced a prospectively uniform lessee accounting
model, accounting for a lease agreement with a period exceeding 12 months, in accordance with the standard, unless the
underlying asset had a value not greater than EUR 5,000
The Group is a lessee primarily in case of perpetual usufruct right of land, rental contracts for office space, lease of motor
vehicles and machines and equipment.
===== SIDA 34 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 34
(unless specified otherwise, all amounts are in PLN ‘000)
Investment properties
The initial recognition of investment properties is at the purchase price, including transactional costs. The carrying amount of an
asset covers the replacement cost of the component of the investment property when incurred as long as the recognition criteria
are satisfied, and it does not include the current maintenance costs of such properties.
After initial recognition, investment properties are disclosed at fair value. Gains or losses resulting from changes to the fair value
are recognised in the profit or loss in the period they arose, subject to the related impact on deferred income tax.
Investment properties are removed from the statement of financial position when they are disposed of or when an investment
property is permanently withdrawn from use when no future benefits are expected from its sale. Any profit or loss arising on
derecognition of an investment property from the statement of financial position are recognised as profit or loss in the period
when such derecognition occurred.
Assets are transferred to investment properties only when a change of their use takes place, confirmed with the end of use of
such asset by the owner or conclusion of an operational lease contract. If an asset is used by the owner – the Group, it becomes
an investment property when the Group applies the principles described in the section Tangible fixed assets (note 9.5) until the
date the use of the property is changed.
When an investment property is transferred to assets used by the owner or to inventories, the alleged cost of such asset to be
applied to recognise it in another category, shall be equal to the fair value of the property determined as at the date its mode of
use was changed.
Intangible assets and goodwill
9.7.1. Intangible assets
The Group owns the following intangible assets: customer relationships, trademarks, goodwill and software.
Acquired intangible assets (if they meet the recognition criterion for development costs) are measured on initial recognition at
cost or production cost, respectively. The cost of intangible assets acquired in a business combination is equal to their fair value
as at the date of combination. After initial recognition, intangible assets (except goodwill and trademarks) are carried at cost less
accumulated amortisation and impairment allowances.
The useful lives of intangible assets are assessed by the Group to be either finite or indefinite. Intangible assets with finite lives
are amortised over the useful life and assessed for impairment whenever there is an indication that the intangible asset may be
impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at
least at each financial year end. Changes in the expected useful life or the expected pattern of consumption of future economic
benefits embodied in the asset are accounted for by changing the amortisation period or method, as appropriate, and treated as
changes in accounting estimates. The amortisation expense on intangible assets with limited useful live is recognised in profit or
loss in the expense category consistent with the function of the intangible asset.
Intangible assets with indefinite useful lives include goodwill and trademarks. Intangible assets with indefinite useful lives are
reviewed annually for possible impairment, either on an asset-by-asset basis or at the cash-generating unit level.
Useful lives are reviewed on an annual basis and, if necessary, are adjusted with effect from the beginning of the financial year
that has just ended.
===== SIDA 35 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 35
(unless specified otherwise, all amounts are in PLN ‘000)
The policies applied to the Group’s intangible assets are summarised as follows:
Goodwill
Relations with
customers Trademarks Software
Useful life Unspecified 10 years Unspecified 2-5 years
Depreciation method Is not depreciated 10 years with the
straight-line method Is not depreciated 2-5 years with the
straight-line method
Internally generated or
acquired Acquired Acquired Acquired Acquired
Impairment test
Annual verification and in
case of any impairment
indications
Annual assessment of
any impairment
indications
Annual verification and
in case of any
impairment indications
Annual assessment of
any impairment
indications
After analysing the relevant factors, for trademarks the Group does not define any time limit of their useful life. The intention of
the Group is to operate for an indefinite period under the same trademark and it is believed that it will not become impaired.
Consequently, and in accordance with IAS 38, the Group does not amortise intangible assets with indefinite useful lives. Useful
life of such resources should be reviewed in each reporting period, in order to determine whether events and circumstances
continue to confirm the assumption of the indefinite useful life of such asset.
Profit or loss arising from the removal of intangible assets from the statement of financial position is measured at the difference
between the net disposal proceeds and the carrying amount of the asset and are recognised in profit or loss when the asset is
removed from the statement of financial position.
9.7.2. Goodwill
The Group has goodwill arising from the acquisition of the Rottneros Group. Goodwill resulting from acquisition of an entity is
initially recognised at the purchase prices being the amount of surplus:
— of the sum of:
› payment transferred,
› amount of all non-controlling interests in the acquired entity, and
— over the fair value determined as at the acquisition date of the acquired identifiable acquired assets and liabilities.
After initial recognition, the goodwill is recognised at the purchase cost reduced by all accumulated impairment allowances. An
impairment test is held annually or more often if required. Goodwill is not amortised.
As at the acquisition date, goodwill is allocated to all cash generating centres that may benefit from combination synergies. Each
centre or group of centres to which goodwill has been attributed:
— corresponds to the lowest level in the Group at which goodwill is monitored for internal management purposes, and
— is not larger than one operational segment determined in compliance with IFRS 8 Operating Segments.
Impairment allowances are determined on the basis of an estimated value of each cash generating centre to which the goodwill
was allocated. When the recoverable value of a cash generating centre is lower than its carrying amount, an impairment
allowance is recognised.
===== SIDA 36 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 36
(unless specified otherwise, all amounts are in PLN ‘000)
9.7.3. Emission rights
The Group owns a heat and power plant and as a result holds rights to emissions generated in its operations. The Group
discloses its rights to emit greenhouse gases in a net amount. This means that rights acquired free of charge are recognised in
the statement of financial position at their purchase price of “zero”, and a provision relating to the obligation to redeem an
appropriate number of rights is created at the time of the occurrence of a deficit in the rights held and is charged to the costs of
heat generation and electricity generation, in proportion to the consumption of gas for each activity. When emission rights to
greenhouse gases are acquired to cover a future deficit, at acquisition the rights are recognised as intangible assets. When a
surplus of greenhouse gas emission rights is generated in excess of their expected consumption, the Company recognises the
result from the sale of these rights within other operating activities when the sale transaction physically takes place. The
provision for a deficit of emission rights is measured at the value of the acquired intangible assets. The provision is recognised in
the amount relying on the annual limit of emission rights.
9.7.4. Certyfikaty w kogeneracji
Grupa, jako jednostka produkująca energię elektryczną w kogeneracji otrzymuje świadectwa pochodzenia, („certyfikaty”).
Przychody z tytułu certyfikatów rozpoznawane są, jako pomniejszenie kosztów w momencie produkcji i wyceniane po aktualnie
obowiązującej na rynku cenie, pod warunkiem, że rynek ww. certyfikatów jest aktywny. W przeciwnym wypadku przychody
rozpoznawane są w momencie sprzedaży certyfikatów. Prawa materialne wynikające z wyceny ujmowane są w aktywach
niematerialnych. Dane szczegółowe dotyczące otrzymanych w bieżącym roku certyfikatów zostały przedstawione zostały w nocie
nr 38.
Impairment of non-financial fixed assets
An assessment is made by the Group as at each balance sheet date to determine whether there is any indication that a
component of non-financial fixed assets may be impaired. If such indications are identified, or if an annual impairment test is
required, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The recoverable amount of a cash-generating unit is the higher of the cash-generating unit’s fair value or its value in use. The
recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or groups of assets. If the carrying amount of a cash-generating unit is greater than its
recoverable amount, an impairment allowance has occurred and an allowance to the determined recoverable amount is then
made. In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment
allowances of continuing operations are recognised in the expense categories consistent with the function of the impaired asset.
At each balance sheet date, the Group assesses whether there are indications that an impairment allowance recognised in prior
periods in respect of a cash-generating unit is unnecessary or should be reduced. If such indications exist, the Group estimates
its recoverable amount. A previously recognised impairment allowance is reversed if, and only if, there has been a change in the
estimates used to determine the recoverable amount of the cash-generating unit since the last impairment allowance was
recognised. In this case, its carrying amount is increased to its recoverable amount. The increased amount must not exceed the
carrying amount that would have been determined (net of amortisation and depreciation) had no impairment allowance been
recognised for that cash-generating unit in prior years. A reversal of an impairment allowance for a cash-generating unit is
recognised immediately as income. Once an impairment allowance has been reversed, the depreciation charge relating to an
asset is adjusted in subsequent periods so that its revised carrying amount less residual value is systematically written off over
the remaining useful life of that cash-generating unit.
===== SIDA 37 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 37
(unless specified otherwise, all amounts are in PLN ‘000)
External borrowing costs
Borrowing costs are capitalised as part of the cost of tangible fixed assets. External borrowing costs include interest calculated
using the effective interest rate method, finance charges in respect of leases and FX differences incurred in connection with the
external financing to the extent that they are regarded as an adjustment to interest expense.
Financial assets
In compliance with IFRS 9, the Group classifies financial assets to one of the following categories:
— measured at amortised cost: To measure its financial assets measured at amortised cost, the Group applies the effective
interest rate method; those are trade receivables, loans granted, other financial receivables and cash and cash
equivalents. After initial recognition, trade receivables are measured at amortised cost with the effective interest rate
method subject to impairment allowances’ trade receivables due within 12 months of the day of their origin (without
financing elements) and not forwarded to factoring, are not discounted and are measured at nominal value; interest
income, exchange differences and impairment allowances are recognised in profit or loss; profits or losses on
derecognition of a financial instrument are recognised in profit or loss for the period;
— measured at fair value through financial results: profit or loss resulting from measurement of financial assets, classified as
measured at fair value through profit and loss, are recognised in profit and loss account in the period in which it was
generated; those are primarily derivative instruments not designated for hedge accounting. Profit or loss on items at fair
value through profit or loss includes interest income, interests in joint ventures and financial instruments held for sale.
— hedging financial instruments: Hedging financial instruments (SWAP contracts and energy forwards) are valued in
accordance with the hedge accounting principles included in IFRS 9.
The Company classifies financial assets to an appropriate category subject to the business model of managing financial assets
and to the characteristics of contractual cash flows for each financial asset.
Impairment of financial assets
As at each balance sheet date, the Group assesses whether there is any objective evidence that a financial asset or a group of
financial assets is impaired.
In accordance with IFRS 9, the Company measures allowances for expected credit losses in the amount equal to the 12-month
expected credit losses or expected credit losses in the life of the financial instrument. In case of trade receivables, the Company
applies a simplified approach and estimates allowances for anticipated credit loss equal to anticipated credit loss over the life of
the receivables which does not exceed 12 months.
Trade receivables are the most important financial asset in the Group’s financial statements that are subject to the principles of
calculating anticipated credit losses.
The Group applies a simplified model to recognise impairment allowances to trade receivables.
In the simplified model, the Group does not monitor changes to credit risk level over the life of the instrument and estimates
anticipated credit losses over the horizon until the maturity of the instrument. In order to estimate the anticipated credit loss, the
Group applies a provision matrix estimated on the basis of historic collectibility levels and recoveries from counterparties. The
anticipated credit loss is calculated at the time the receivables are recognised in the statement of financial position and it is
updated as at each closing of reporting periods, subject to the number of overdue dates.
In determining whether the credit risk of a financial asset has increased significantly since initial recognition and in estimating
expected credit losses, the Group considers reasonable and documentable information that is relevant and available without
undue cost or effort. this includes both quantitative and qualitative analysis, based on the group’s historical experience and credit
rating. The Group assumes that the credit risk of a financial asset has increased significantly if it is more than 60 days past due.
===== SIDA 38 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 38
(unless specified otherwise, all amounts are in PLN ‘000)
Signs of increased credit risk can be (among other things):
Delayed instalment or interest payment of 60 days or more
Significant deterioration in the borrower’s financial situation (profitability, indebtedness, liquidity ratios)
Commencement of formal restructuring, bankruptcy or liquidation process
Lack of ability to obtain financial information for the entity, etc.
The Group considers a financial asset to be past due when it is more than 90 days past due.
The Group considers financial instruments to have low credit risk if the instrument’s rating is within an investment grade –
depending on the rating agency.
The Group divides trade receivables into insured receivables and uninsured receivables, and on the basis of historical data and
taking into account expected future factors, it calculates the percentage of expected loss for each aging range of trade
receivables. The receivables aging ranges are as follows: maturity range, up to 30 days, up to 60 days, up to 90 days, up to 120
days, up to 360 days and over 360 days.
Financial derivatives and hedges
The derivatives used by the Group to hedge the risks associated with changes in interest rates and electricity prices are mainly
interest rate swaps and forward energy contracts. Such financial derivatives are measured at fair value through other
comprehensive income. Such derivatives are stated as assets when the value is positive and as liabilities when the value is
negative.
Any gains or losses arising from changes in the fair value of the derivatives that do not qualify for hedge accounting are
recognised directly in the net profit or loss for the financial year.
For the purpose of hedge accounting, hedges are classified as:
— fair value hedges when hedging the exposure to changes in the fair value of a recognised asset or liability, or
— cash flow hedges when hedging exposure to variability in cash flows that is attributable to a particular risk inherent in the
recognised asset or liability or a forecast transaction, or
When a hedge is established, the Group formally identifies and documents the hedging relationship, as well as the objective of
risk management and the hedging strategy. The documentation includes identification of the hedging instrument, the hedged item
or transaction, the nature of the risk being hedged and the assessment method of the hedging instrument’s effectiveness in
offsetting the exposure to changes in the hedged item’s fair value or cash flows attributable to the hedged risk. Hedges are
expected to be highly effective in offsetting the exposure to changes in the fair value or cash flows attributable to the hedged risk.
Hedge effectiveness is assessed on a regular basis to check if the hedge is highly effective throughout all reporting periods for
which it was designated.
9.12.1. Cash flow hedges
A cash flow hedge is a hedge against the risk of variability in cash flows (interest on loans and electricity prices) that is
attributable to a specific risk associated with a recognised asset or liability or a highly probable forecast transaction, and which
could affect profit or loss. The part of profit or loss related to the hedging instrument which constitutes an effective hedge is
recognised directly in other comprehensive income and the non-effective part is recognised in profit or loss.
If a hedged intended transaction subsequently results in the recognition of a financial asset or financial liability, the associated
gains or losses that were recognised in other comprehensive income and accumulated in equity shall be reclassified to the
statement of profit and loss in the same period or periods in which the asset acquired or liability assumed affects profit or loss.
For derivatives that do not qualify for hedge accounting, any gains or losses arising from changes in fair value are recognised
directly to net financial result for the period.
===== SIDA 39 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 39
(unless specified otherwise, all amounts are in PLN ‘000)
.
Inventories
Inventories are valued at the lower of purchase price/construction cost and realisable net selling price. Purchase price or
construction cost of every item of inventories includes all purchase expenses, transformation expenses and other costs incurred
in bringing each inventory item to its present location and conditions are accounted for as follows for both the current and
previous year:
Materials at purchase cost, disposal at average weighted cost
Finished products and work in
progress
cost of direct materials and labour and an appropriate surcharge of
indirect production costs determined with an assumption of normal use of
production capacities with the exclusion of external financing costs
Goods at purchase cost, disposal at average weighted cost
Net realisable value is the estimated selling price in the ordinary course of economic activity, reduced by estimated costs of
necessary to finish the items and to finalise the sale.
Several factors are taken into account when creating impairment allowances on inventories. The most important of these are the
duration of the backlog and the assessment of the possibility of finding its use. The calculation of such an allowance also takes
into account the possibility of the product being reused in the production process, in which case the allowance is reduced by this
value.
Budget receivables
Budget receivables are presented within other receivables, with the exception of corporate income tax receivables (from tax
offices e.g. in Sweden), which are a separate item in the statement of financial position.
Cash and cash equivalents
Cash and short-term deposits reported in the statement of financial position include cash at bank and in hand and short-term
deposits with an original maturity of three months or less, as well as deposits with a longer maturity if they are repayable on
demand.
For the purpose of the cash flow statement, cash and cash equivalents consist of cash and cash equivalents as defined above.
Interest-bearing loans
At initial recognition, all bank loans are recognised at fair value, less the costs associated with obtaining the loan.
After initial recognition, interest-bearing loans are measured at amortised cost using the effective interest rate method.
In determining amortised cost, account is taken of the costs associated with obtaining the loan and the discounts or premiums
received in respect of the liability.
Revenues and expenses are recognised in profit or loss when the liabilities are derecognised from the statement of financial
position or accounted for with the effective interest method.
===== SIDA 40 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 40
(unless specified otherwise, all amounts are in PLN ‘000)
Financial liabilities
Financial liabilities are classified as measured, at amortized cost (trade and other payables for the purchase of tangible fixed
assets and intangible assets, other payables, credit and lease liabilities or as hedging instruments.
The Company excludes a financial liability from its statement of financial position when the liability has expired – that is, when the
obligation specified in the contract has been fulfilled, canceled or expired. Replacement of an existing debt instrument with an
instrument with basically different conditions, made between the same entities, is recognised by the Company as expiry of the
original financial liability and recognition of a new financial liability. When a financial liability is derecognised from the statement
of financial position, the difference between the carrying amount of the extinguished liability and the consideration paid (including
any non-cash assets transferred or liabilities assumed) is recognised in the income statement.
Provisions
Provisions are created when the Group is charged with a (legal or customary) obligation relating to past events, and when it is
likely that satisfaction of such obligation shall result in a necessity of an outflow of economic benefits and an amount of such
obligation may be reliably estimated. Where the Group expects some or all of the provisioned costs to be reimbursed, for example
under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually
certain. The expense relating to any provision is presented in the profit and loss account after the deduction of any
reimbursement.
The Group calculates provisions for discounts on the basis of signed agreements with customers), In addition, the Group is obliged
to cover the costs of any complaints about products sold. Such events may occur in the future and therefore the Group makes a
professional judgement based on historical data to determine the value of this allowance.
Provisions for wages and salaries and unused leave are calculated based on the best knowledge of its future realisation.
.
Offsetting financial assets and liabilities
Financial assets and liabilities are offset, and the net amount is shown in the statement of financial position only if the Group has
a valid legal title to set off and intends to settle these amounts net or to realize the asset and settle the liability at the same time.
Severance payments
In accordance with the Group’s remuneration principles, the employees of the Group are entitled to a retirement allowance. It is a
one-off payment due to employees upon their retirement. The amount of retirement allowance depends on the seniority and the
average salary of the employee. The Group sets up a provision for future retirement allowance liabilities in order to allocate the
costs to the relevant periods. In accordance with IAS 19, retirement allowances are defined post-employment benefit plans. The
present value of the liabilities is calculated by an independent actuary as at each balance sheet date. The accrued liability is
equal to discounted payments to be made in the future subject to staff rotation and applies to the period until the balance sheet
date. Demographic information and information on staff rotation is based on historical data.
On the basis of measurements performed by professional actuarial companies, the Group recognises a provision for future
employee benefits.
Re-measurement of employee benefits related to defined benefit plans, covering actuarial gains and losses, is recognised in
other comprehensive income and is not later re-classified to profit or loss.
The Group recognises the following changes to its net liabilities relating to defined benefit plans within costs of sales,
administrative expenses, selling and distribution costs and financial expenses, composed of:
— service costs (including, inter alia, the current service costs, future service costs)
— net interest on the net liability under the defined benefit plans.
===== SIDA 41 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 41
(unless specified otherwise, all amounts are in PLN ‘000)
Revenue from contracts with customers and other income
9.21.1. Revenues from contracts with customers
Revenue from the sale of products (paper and pulp) is recognised if control of the commodity or product has been transferred to
another entity.
Pursuant to IFRS 15, the Group applies a five-step model to recognise revenues from contracts with customers.
— Requirements applicable to identifying contracts with customers: contracts with customers meet the definition when all of
the following criteria have been satisfied: the parties to the contract have concluded the contract and are obliged to
perform their obligations; the Group is able to identify the rights of each party concerning the goods and services to be
provided; the Group is able to identify the payment terms for the goods and services to be provided; the contract has
economic content and it is likely that the Group will receive its remuneration due to it in exchange for the goods and
services to be provided to the customer.
— Identification of obligations to perform the service: at contract conclusion the Group assesses the goods and services
promised in the contract and identifies each promise as a liability for delivery to the customer: the goods or services (or a
package of goods or services) that may be identified or a group of separate goods or services that are basically the same
and when the delivery has the same nature.
— Identification of the transactional price: in order to determine the transactional price, the Group takes the contractual
conditions into account as well as its customary commercial practices. The transactional price is the amount that – as the
Group expects – will be due to it in exchange for the delivery of the promised goods or services to the customer, net of any
amounts collected on behalf of third parties. The contractual remuneration may cover fixed amounts, variable amounts or
both types; in order to estimate the variable remuneration, the Group has decided to apply the most probable value
method.
— The allocation of the transactional price of each liability to perform: The Group allocates the transactional price to each
obligation to perform (or for separate goods or separate services) in an amount that reflects the remuneration amount, in
line with the Group’s expectations – it is due to the Group in exchange for the delivery of the promised goods or services
to the customer.
— Revenue recognition when the obligation to perform is being executed: The Group recognises revenues at completion (or
during completion) of its obligation to perform by delivery of the promised goods or services (an asset) to the customer
(the customer acquires control over the asset). Revenues are recognised in the remuneration amount which – as expected
by the entity – is due to it in exchange for the goods or services promised to customers.
9.21.2. Interest
Interest income is recognised as interest accrues (using the effective interest rate method that is the rate that discounts the
estimated future cash receipts over the anticipated life of the financial instrument) to the net carrying amount of the financial
asset.
9.21.3. Grants
If it is certain that a grant will be obtained and all the related conditions will be satisfied, then public grants are recognised at fair
value.
If the grant applies solely to a specific cost item, then it is recognised as revenues commensurate to the costs that the grant is to
compensate. If the grant applies to an asset, then its fair value is recognised in the account of deferred income and then
gradually – in equal annual charges – it is recognised in profit or loss over the estimated useful life of the asset.
===== SIDA 42 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 42
(unless specified otherwise, all amounts are in PLN ‘000)
Taxes
9.22.1. Current tax
Current income tax liabilities and receivables for the current period and previous periods are measured at amounts projected to
be paid to tax authorities (to be recovered from tax authorities) with tax rates and based on tax regulations legally or actually
applicable as at the balance sheet date.
9.22.2. Deferred tax
For financial reporting purposes, deferred income tax is recognised, using the liability method, regarding temporary differences as
at the balance sheet date between the tax value of assets and liabilities and their carrying amount disclosed in the financial
statements.
A deferred tax liability is recognised for all taxable temporary differences, except where the deferred tax liability arises from the
initial recognition of an amount and, at the time of recognition, has no effect on either pre-tax profit or loss, taxable profit or tax
loss, and
Deferred income asset is recognised for all negative temporary differences, carry-forward of unused tax credits and unused tax
losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences,
and the carry-forward of unused tax credits and unused tax losses can be utilised:
The carrying amount of the deferred tax asset is reviewed as at each balance sheet date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.
Unrecognised deferred income tax asset is reassessed as at each balance sheet date and is recognised to the extent that it has
become probable that future taxable profit will be available that will allow the deferred tax asset to be recovered.
Deferred tax asset and provisions are measured at the tax rates that are expected to apply in the period in which the asset is
realised or the provision applied, based on tax rates (and tax laws) that have been enacted or substantively enacted as at the
balance sheet date.
Income tax relating to items recognised outside profit or loss is recognised outside profit or loss: in other comprehensive income
in correlation items recognised in other comprehensive income or directly in equity with reference to items recognised directly in
equity.
Deferred income tax asset and deferred income tax liability are offset, if a legally enforceable right exists to set off current
income tax asset against current income tax liability and the deferred income tax relates to the same taxable entity and the same
tax authority.
9.22.3. Value added tax
Revenues, expenses, assets and liabilities are recognised after the deduction of the amount of VAT, except:
— where VAT incurred on a purchase of assets or services is not recoverable from the tax authority, in which case VAT is
recognised as part of the cost of purchase of the asset or as part of the expense item as applicable and
— receivables and payables which are disclosed with the VAT amount inclusive.
The net amount of VAT recoverable from or payable to the tax authority is included in the statement of financial position as part
of receivables or payables.
9.22.4. Excise tax
The amount of excise tax payable in respect of the electricity produced is recognised in the statement of profit and loss in the
same period as revenue from energy sales and in the statement of financial position under liabilities.
Excise tax on energy used for own consumption is recognised as costs of sales in the statement of profit and loss.
===== SIDA 43 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 43
(unless specified otherwise, all amounts are in PLN ‘000)
Net earnings per share
Net earnings per share are calculated by dividing the net profit and the net profit on continuing operations for the period,
attributable to the shareholders of the Parent Entity, by the weighted average number of shares outstanding in the reporting
period. Diluted earnings per share are calculated by dividing the net profit and the net profit on continuing operations for the
period, attributable to the shareholders of the Parent Entity, by the diluted weighted average number of shares outstanding in the
reporting period.
===== SIDA 44 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 44
(unless specified otherwise, all amounts are in PLN ‘000)
10. Operating segments
Operating segments include continuing operations. The Group’s principal activity is the production of paper and pulp.
The paper production business is presented as the “Paper” segment and includes the financial results of, among others, three
paper mills:
— Arctic Paper Kostrzyn S.A. (Poland) – produces high-quality uncoated graph paper under the Amber brand;
— Arctic Paper Munkedals AB (Sweden) – produces high quality uncoated graphic paper under the Munken brand;
— Arctic Paper Grycksbo (Sweden) – production of coated wood-free paper under the brands of G-Print and Arctic.
The cellulose business is presented as the “Cellulose" segment and includes, among others, two cellulose plants:
— the Pulp Mill in Rottneros (Sweden) produces mainly two types of mechanical pulp: groundwood and chemo-thermo
mechanical pulp (CTMP);
— the Pulp Mill in Vallvik (Sweden) produces two types of long-fibre sulphate pulp: fully bleached sulphate pulp and
unbleached sulphate pulp. The most of Vallvik Pulp Mill production is known as NBSK pulp.
The Group identifies the following business segments:
— Paper – this segment includes uncoated and coated papers. Uncoated paper – paper for printing or other graphic
purposes, including wood-free and wood paper. Uncoated wood-free paper can be produced from various types of pulp,
with different filler content, and can undergo various finishing processes, such as surface sizing and calendering. Two
main categories of this type of paper are graphic paper (used for example for printing books and catalogues) and office
papers (for instance, photocopy paper); however, the Group currently does not produce office paper. Uncoated wood paper
from mechanical pulp intended for printing or other graphic purposes. That type of paper is used to print magazines with
rotogravure and offset techniques. The Group’s products in this segment are usually used for printing paperbacks, Coated
paper – wood-free paper for printing or other graphic purposes, one-side or two-side coated with mixtures containing
mineral pigments, such as china clay, calcium carbonate, etc. The coating process can involve different methods, both on-
line and off-line, and can be supplemented by super-calendering to ensure a smooth surface. Coating improves the quality
of printed photos and illustrations.
— Pulp – fully bleached sulphate pulp and unbleached sulphate pulp which is used mainly for the production of printing and
writing papers, cardboard, toilet paper and white packaging paper as well as chemi thermo mechanical pulp (CTMP) and
groundwood which are used mainly for production of printing and writing papers.
Exclusions include the exclusion of turnover and inter-segment settlements (transactions relating to Kostrzyn Packaging including
fixed assets under construction and sales with the Rottneros Group) and the results of operations of Arctic Paper S.A. (primarily
the provision of services between companies)
The division of the business segments into paper and pulp is dictated by the following considerations:
— Demand for products and their supply as well as the prices of products sold in the market are affected by operational
factors characteristic for each segment, such as e.g. the production capacity level in the specific paper and pulp segment,
— The key operating parameters such as inflow of orders or the level of production costs are determined by the factors that
are similar for each paper and pulp segment,
— The results of the Arctic Paper Group are under the pressure of global market trends with respect to the prices of paper
and pulp, and to a lesser extent are subject to the specific conditions of the production entities.
Every month, on the basis of internal reports received from companies (apart from companies of the Rottneros Group), the results
in each operating segment are analysed by the management of the Group. The financial results of companies in the Rottneros
Groups are analysed on the basis of quarterly financial results published on the websites of Rottneros AB.
The operating results are measured primarily on the basis of EBITDA calculated by adding depreciation/amortisation and
impairment allowances to tangible fixed assets and intangible assets to operating profit/(loss), in each case in compliance with
===== SIDA 45 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 45
(unless specified otherwise, all amounts are in PLN ‘000)
EU IFRS. In accordance with EU IFRS, EBITDA is not a metric of operating profit/(loss), operational results or liquidity. EBITDA is
the measure that the Parent Entity’s Management Board uses to manage the business.
Transactions between segments are concluded at arms’ length like between unrelated entities.
The table below presents data concerning revenues and profit as well as certain assets and liabilities under continuing
operations, split by segments of the Group for the period of 12 months ended on 31 December 2023 and as at 31 December
2023.
Twelve-month period ended on 31 December 2023 and as at 31 December 2023
Paper Pulp Total Exclusions
Total
continuing
operations
Revenues
Sales to external customers 2 460 441 1 088 712 3 549 153 - 3 549 153
Sales between segments - 2 794 2 794 (2 794) -
Total segment revenues 2 460 441 1 091 506 3 551 947 (2 794) 3 549 153
Result of the segment
Adjusted EBITDA 380 946 104 198 485 144 (9 839) 475 304
Depreciation/amortisation (83 255) (34 665) (117 920) (317) (118 237)
Operating profit/(loss) 297 691 69 533 367 224 (10 156) 357 068
Interest income 7 366 5 547 12 912 (2 581) 10 331
Interest expense (4 342) (3 566) (7 908) 1 624 (6 284)
FX gains and other financial income 3 446 3 962 7 408 (2 670) 4 738
FX losses and other financial expenses (19 951) (4 754) (24 705) (231) (24 936)
Gross profit 284 209 70 722 354 931 (14 014) 340 917
Assets of the segment 1 762 824 1 057 151 2 819 975 (105 172) 2 714 803
Liabilities of the segment 670 887 279 817 950 704 (150 542) 800 162
Capital expenditures (123 971) (80 166) (204 136) 3 964 (200 172)
Interest in joint ventures 4 891 - 4 891 - 4 891
— Revenues from inter-segment transactions are eliminated on consolidation.
— The segment result does not include financial income (PLN 15,069 thousand, of which PLN 10,331 thousand is interest
income and PLN 4,738 thousand is FX differences) and financial expenses (PLN 31,220 thousand, of which PLN 6,284
thousand is interest expense and PLN 24,936 thousand is FX differences), depreciation/amortisation (PLN 118,237
thousand), as well as income tax liabilities (PLN 68,528 thousand).
— Segment assets do not include deferred tax (PLN 3,183 thousand), as this item is managed at Group level and interests in
joint ventures (PLN 4,891 thousand). Segment liabilities do not include deferred tax (PLN 121,208 thousand), as this item
is managed at Group level.
The following table sets out revenue and profit figures and certain assets and liabilities from continuing operations by Group
segment for the 12 months ended 31 December 2022 and as at 31 December 2022 [the note has been modified from the 2022
version due to a change in segment presentation].
===== SIDA 46 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 46
(unless specified otherwise, all amounts are in PLN ‘000)
Twelve-month period ended on 31 December 2022 and as at 31 December 2022
Paper Pulp Total Exclusions
Total
continuing
operations
Revenues
Sales to external customers 3 582 179 1 314 473 4 894 276 - 4 894 276
Sales between segments - - - - -
Total segment revenues 3 582 179 1 314 473 4 896 653 (2 377) 4 894 276
Result of the segment
Adjusted EBITDA 697 052 288 478 985 530 (11 557) 973 973
Depreciation/amortisation (79 821) (50 945) (130 766) (228) (130 994)
Operating profit/(loss) 617 231 237 534 854 764 (11 785) 842 979
Interest income 1691 1 764 3 455 (588) 2 867
Interest expense (4 709) (2 205) (6 914) 269 (6 646)
FX gains and other financial income 3 117 89 102 92 218 (2 318) 89 900
FX losses and other financial expenses (210) - (210) (1 313) (1 523)
Gross profit/(loss) 617 119 326 194 943 314 (15 736) 927 578
Assets of the segment 1 859 228 1 414 303 3 273 531 (28 505) 3 245 026
Liabilities of the segment 804 515 348 415 1 152 930 (128 378) 1 024 552
Capital expenditures (99 930) (54 815) (154 745) (134) (154 879)
Interest in joint ventures 4 264 - 4 264 - 4 264
— Revenues from inter-segment transactions are eliminated on consolidation.
— Segment results do not include financial income (PLN 92,k767 thousand of which PLN 2,867 thousand is interest income)
and financial expenses (PLN 8,169 thousand of which PLN 6,646 thousand is interest expense), depreciation/amortisation
(PLN 130,994 thousand) as well as income tax cost (PLN 170,756 thousand).
— Segment assets do not include deferred tax (PLN 5,196 thousand), as this item is managed at Group level and interests in
joint ventures (PLN 4,264 thousand). Segment liabilities do not include deferred tax (PLN 177,750 thousand), as this item
is managed at Group level.
Revenue from contracts with customers
The table below presents the Group’s revenues from sales of paper and pulp to external customers in each segment, split by
countries and regions, in 2023 and 2022:
Geographical information
Year ended on 31 December 2023
Revenues from sales of paper and pulp from
external customers by segment:
Paper Pulp Total
Germany 540 316 146 591 686 907
France 217 531 7 924 225 455
UK 287 745 23 771 311 517
Scandinavia 242 716 297 519 540 235
Western Europe (other countries) 319 787 176 701 496 488
Poland 414 438 792 415 230
Central and Eastern Europe (other than Poland) 404 880 57 844 462 723
Outside Europe 33 027 377 570 410 597
Total segment revenues 2 460 441 1 088 712 3 549 153
===== SIDA 47 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 47
(unless specified otherwise, all amounts are in PLN ‘000)
Geographical information
Year ended on 31 December 2022
Revenues from sales of paper and pulp from
external customers by segment:
Paper Pulp Total
Germany 722 082 199 682 921 764
France 333 612 15 303 348 915
UK 381 950 24 814 406 764
Scandinavia 293 545 370 515 664 060
Western Europe (other countries) 526 400 277 687 804 087
Poland 595 087 2 717 597 804
Central and Eastern Europe (other than Poland) 657 937 37 495 695 432
Outside Europe 69 190 386 261 455 451
Total segment revenues 3 579 803 1 314 473 4 894 276
Sales revenues related to the item “Western Europe” cover mainly sales in Belgium, the Netherlands, Austria, Switzerland, Italy
and Spain. Sales revenues related to the item “Central and Eastern Europe” cover mainly sales in Ukraine, the Czech Republic,
Slovakia, Hungary and Bulgaria. Sales revenues related to the item “Outside Europe” cover mainly sales in China and the USA.
Sales to no buyer exceed 10% of total revenues.
Fixed assets by country and region
The table below presents the Group’s fixed assets reduced by deferred income tax asset split by country and region, as at 31
December 2023 and 31 December 2022:
Geographical information
Fixed assets:
As at 31 December
2023
As at 31
December 2022
Germany 2 521 3 295
France 223 405
Scandinavia 818 430 930 972
Western Europe (other countries) 419 344
Poland 467 398 431 512
Central and Eastern Europe (other than Poland) 86 144
Total fixed assets 1 289 078 1 366 671
===== SIDA 48 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 48
(unless specified otherwise, all amounts are in PLN ‘000)
The decrease in the Group’s fixed assets is primarily due to lower capital expenditure on tangible fixed assets made at the
Swedish Paper and Pulp Mills during 2023 and a decrease in other financial assets comprising a positive valuation of derivatives,
mainly power forwards.
11. Income and costs
Other operating income
Year ended on 31
December 2023
Year ended on 31
December 2022
Reversal of provisions - 3
Damages received 1 819 33
Rental income 3 509 2 613
Sales of services 6 031 1 342
Grants 6 376 163
Sale of utilities 66 630 37 502
Sale of materials 1 482 10 703
Profit on disposal of tangible fixed assets 1 206 173
Profit on sale of CO2 emission rights 8 777 17 629
Compensation of R&D projects from the National Centre for Research and
Development 24 8 590
CO2 compensation 31 263 -
Other 6 700 7 027
Total 129 397 85 778
Other operating costs
Year ended on 31
December 2023
Year ended on 31
December 2022
Real estate tax (887) (803)
Costs of sales of utilities (45 692) (31 162)
Costs of sales of materials (80) (10 093)
Reorganisation costs in subsidiary entity 39 (288)
Loss on disposal/liquidation of tangible fixed assets (517) (3 868)
Decreasing the value of property investments - (1 215)
Costs of research projects from the National Centre for Research and Development - (16 708)
Humanitarian aid for Ukraine - (581)
Other (5 826) (4 875)
Total (52 963) (69 593)
===== SIDA 49 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 49
(unless specified otherwise, all amounts are in PLN ‘000)
Financial income
Year ended on 31 December
2023
Year ended on 31 December
2022
Interest income on funds in bank accounts 8 518 2 781
Interest income on loans granted - -
Interest income on receivables 206 44
Other interest income 1 607 42
FX gains - 16 650
Profit on interests in joint ventures 776 459
Other financial income 396 9
Gain on forward contracts not meeting hedge accounting rules
measured at fair value through profit or loss 3 566 45 433
Profit on other forward contracts - 27 348
Total 15 069 92 767
.
Financial expenses
Year ended on 31
December 2023
Year ended on 31
December 2022
Interest on bank loans measured at amortised cost (979) (3 735)
Interest on other financial liabilities (4 423) (2 243)
Interest on actuarial provisions (1 172) (508)
Finance expenses from leasing contracts (529) (634)
Bank charges (859) (401)
FX losses (21 844) -
Measurement effect of the adjusted purchase price (816) (601)
Ineffective remeasurement to fair value of derivatives (396) -
Other financial expenses (203) (46)
Total (31 220) (8 169)
Costs by type
Year ended on 31
December 2023
Year ended on 31
December 2022
Depreciation/amortisation (118 237) (130 994)
Consumption of materials and energy
(2 839 460)
Third party services (492 631) (616 137)
Taxes and charges (10 437) (15 818)
Employee benefit costs
(502 861)
Other prime costs
(96 864)
Value of goods sold
(11 432)
Prime costs
(4 213 566)
Changes in product inventories
145 336
Change to impairment allowances to receivables
748
TOTAL (3 268 519) (4 067 482)
of which:
Items recognised as costs of sales:
(3 483 519)
Items recognised as selling and distribution costs:
(445 197)
Items recognised as administrative expenses
(138 766)
===== SIDA 50 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 50
(unless specified otherwise, all amounts are in PLN ‘000)
Depreciation/amortisation expense and impairment allowances recognised in profit or
loss
Year ended on 31
December 2023
Year ended on 31
December 2022
Items recognised as costs of sales:
Depreciation of fixed assets and intangible assets (113 009) (125 687)
Impairment of tangible fixed assets (reversal) - -
Impairment of intangible assets (reversal) - -
Items recognised as costs of sales:
Depreciation of fixed assets and intangible assets (2 399) (3 094)
Impairment of tangible fixed assets - -
Impairment of intangible assets - -
Items recognised as administrative expenses:
Depreciation of fixed assets and intangible assets (2 829) (2 212)
Impairment of tangible fixed assets - -
Impairment of intangible assets - -
Employee benefit costs
Note
Year ended on
31 December
2023
Year ended on
31 December
2022
Salary costs (353 016) (414 079)
Social insurance premiums (92 323) (86 494)
Costs of retirement benefits 27.2 (640) (351)
Total costs of employee benefits,
of which:
(445 979) (500 925)
Items recognised as costs of sales: (334 920) (363 740)
Items recognised as selling and distribution costs: (46 619) (57 532)
Items recognised as administrative expenses (64 721) (81 588)
Items recognised as other comprehensive income 281 1 935
===== SIDA 51 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 51
(unless specified otherwise, all amounts are in PLN ‘000)
12. Items of other comprehensive income
The components of other total comprehensive income for the year ended on 31 December 2023 and 31 December 2022 that are
re-classified to profit or loss, are as follows:
Year ended on 31
December 2023
Year ended on 31
December 2022
Cash flow hedges
Profit/(loss) for the period resulting from contracts settled during the reporting
period (20 990) (326 740)
Profit/(loss) for the period resulting from contracts not settled as the reporting
date (224 619) 466 958
Adjustments resulting from re-classification to profit/(loss) - 72 782
Total other comprehensive income (245 609) 212 999
The adjustments resulting from the reclassification to profit/(loss) relate to the valuation of power purchase forwards due to the
cessation of production of one of the mechanical pulp grades, wood pulp, at the Rottneros mill. For this reason, some of the
contracts concluded in previous years no longer met the criteria for hedge accounting
Cash flow hedges are described in detail in note 35 to this report.
13. Income tax
Tax burden
The major components of income tax liabilities for the year ended on 31 December 2023 and on 31 December 2022 are as
follows:
Rok zakończony
31 grudnia 2023
Rok zakończony
31 grudnia 2022
Skonsolidowany rachunek zysków i strat
Consolidated profit and loss account
Current income tax (62 563) (126 695)
Current income tax liability 1 318 (515)
Deferred income tax
Resulting from the establishment and reversal of temporary differences (7 285) (43 545)
Tax credit/(liability) disclosed in the consolidated income statement (68 529) (170 756)
Consolidated statement of changes in equity
Current income tax - -
Tax effects of the costs of increase of share capital - -
Tax benefit (tax liability) recognised in equity - -
Consolidated statement of total comprehensive incoe
Deferred income tax
===== SIDA 52 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 52
(unless specified otherwise, all amounts are in PLN ‘000)
Deferred income tax on the measurement of hedging instruments 50 399 (43 941)
Deferred income tax on actuarial profit/loss (174) 438
Tax benefit (tax liability) recognised in other comprehensive income 50 225 (43 504)
Recognition of effective tax rate
A reconciliation of income tax expense applicable to gross profit/(loss) before income tax at the statutory income tax rate, to
income tax expense at the Group’s effective income tax rate for the year ended on 31 December 2023 and 31 December 2022 is
as follows:
Year ended on 31
December 2023
Year ended on 31
December 2022
Gross profit/(loss) before tax 340 917 927 578
Tax at the statutory rate prevailing in Poland in
2008-2023, of 19% (64 774) (176 240)
Tax adjustments from previous years, recognised in the current income tax 1 318 (515)
Difference resulting from income tax rates in force in other countries (4 360) (10 008)
Tax loss not incorporated in deferred income tax assets calculation (45) -
Use of tax expenses on which no deferred tax has been recognised - 9 251
Non-taxable revenues 606 3 164
Costs that are not tax deductible (3 378) (3 599)
Effects of the tax group in Sweden - 4 335
Effects of the tax group in Poland 2 058 2 856
Tax at the effective tax rate of 20% (2022: 18%) (68 528) (170 755)
Income tax (charge) stated in the consolidated income statement (68 528) (170 755)
The amount of unrecognised deferred income tax asset relates mainly to tax losses that are expected to be time barred before
realised, as well as those temporary differences that in the Group’s opinion may not be used for tax purposes.
Deferred income tax asset is recognised for tax losses carried forward to the extent that realisation of the related tax benefit
through future taxable profit is probable.
The Polish tax system provides for restrictions in cumulating tax losses by legal persons that remain under joint control which is
the case for Group member companies. Therefore, each subsidiary of the Group in Poland may utilise solely their own tax losses
in order to reduce taxable income in subsequent years.
The amounts and expiry dates of tax losses for which deferred tax assets were not recognised are as follows:
2023 Expiry date 2023 Expiry date
Expiring tax losses 20 829 2024-2028 34 076 2023-2027
Tax losses and temporary differences without time limit - -
TOTAL 20 829 34 076
===== SIDA 53 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 53
(unless specified otherwise, all amounts are in PLN ‘000)
The potential tax effect of non-activated tax losses and temporary differences amounts to PLN 3,958 thousand and relates to tax
losses at Arctic Paper S.A. incurred prior to the establishment of the tax group in Poland.
Deferred income tax
Deferred income tax relates to the following items:
Net deferred income tax asset/provision
of which:
31 December
2023
31 December
2022
– Adjustment to presentation (11 766) (15 884)
– Deferred income tax asset 3 183 5 196
Deferred income tax liability 121 208 177 750
Consolidated balance sheet as
at
Consolidated profit and loss
account for the year ended
31 December 2023 31 December
2022
31 December
2023
31 December
2022
Deferred income tax liability
Fixed assets 122 996 115 360 (7 635) (15 151)
Hedging instruments 9 979 78 273 68 295 (56 526)
- -
Gross deferred income tax provision 132 975 193 634 60 659 (71 677)
Consolidated balance sheet as
at
Consolidated profit and loss
account for the year ended
31 December 2023 31 December
2022
31 December
2023
31 December
2022
Deferred income tax asset
Post-employment payments 8 539 2 516 6 023 (2 927)
Uninvoiced liabilities 3 566 10 637 (7 071) 2 673
Inventories 1 322 899 423 (588)
Trade receivables 1 523 7 028 (5 505) 2 763
Losses deductible from future taxable income - - - (10 469)
Gross deferred income tax asset 14 949 21 079 (6 130) (8 548)
FX differences (11 589) (6 824)
Total, of which 42 941 (87 049)
Changes to deferred income tax recognised in
other comprehensive income 50 225 (43 504)
Changes to deferred income tax recognised in
profit and loss account (7 285) (43 545)
===== SIDA 54 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 54
(unless specified otherwise, all amounts are in PLN ‘000)
The table shows the sum of the positive and negative temporary differences for each Group company, without offsetting at entity
level. The presentation adjustment offsets assets and provision at the individual company level.
The Management Board made an assessment of recoverability of the deferred income tax asset related to tax losses and
determined the asset was recoverable, inter alia, due to the fact that AP Grycksbo and AP Munkedals are part of a tax group in
Sweden, and tax regulations in Sweden do not temporarily limit the use of tax losses incurred in previous years.
The Group did not recognise any deferred income tax asset on the tax losses suffered by Arctic Paper SA due to the limited
period of applying the losses in the coming years when the Company does not expect to generate taxable income to be offset
against the losses.
The decision to create or not create an asset is dictated by the recoverability of the asset at the entity level.
14. Earnings per share
Earnings per share are established by dividing the net profit/(loss) for the reporting period attributable to the Company’s ordinary
shareholders by the weighted average number of ordinary shares outstanding in the reporting period.
The information regarding profit/(loss) and the number of shares which constituted the base to calculate earnings per share and
diluted earnings (loss) per share is presented below (all shares are ordinary shares and belong to the same class):
Year ended on
31 December
2023
Year ended on
31 December
2022
Net profit/(loss) attributable to the shareholders of the Parent Entity 247 132 631 001
Number of ordinary shares – A series 50 000 50 000
Number of ordinary shares – B series 44 253 500 44 253 500
Number of ordinary shares – C series 8 100 000 8 100 000
Number of ordinary shares – E series 3 000 000 3 000 000
Number of ordinary shares – F series 13 884 283 13 884 283
Total number of shares 69 287 783 69 287 783
Weighted average number of shares 69 287 783 69 287 783
Diluted weighted average number of ordinary shares 69 287 783 69 287 783
Profit/(loss) per share (in PLN)
– basic earnings from the profit/(loss) for the period attributable to the
shareholders of the Parent Entity 3,57 9,11
Diluted profit/(loss) per share (in PLN)
– from the profit/(loss) for the period attributable to the shareholders of
the Parent Entity 3,57 9,11
There were no transactions in ordinary shares between the balance sheet date and the date of these consolidated financial
statement.
===== SIDA 55 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 55
(unless specified otherwise, all amounts are in PLN ‘000)
15. Dividend paid and proposed
Dividend is paid based on the net profit disclosed in the standalone annual financial statements of Arctic Paper S.A. after
covering losses carried forward from the previous years.
At the date of this report, the Parent Entity did not hold any preference shares.
The Parent Entity’s ability to pay potential dividends to shareholders is dependent on the level of distributions received from its
subsidiaries. The risk associated with the Company’s ability to disburse dividend was described in the part “Risk factors” of the
annual report for 2023.
In connection with the term and revolving loan agreements signed on 2 April 2021, the Parent Entity’s ability to pay dividends is
subject to the Group meeting certain financial ratios in the period prior to payment (as that term is defined in the term and
revolving credit facility agreement) and there being no event of default (as that term is defined in the term and revolving loan
agreement).
On 15 February 2024, the Management Board of the Company, taking into account the preliminary financial results of the
Company and the Arctic Paper S.A. Capital Group for 2023, decided to recommend to the Annual General Meeting of the
Company the payment of a dividend from the Company’s net profit for the financial year 2023, in the total amount of PLN
69,287,783, i.e. PLN 1.00 gross per share. The Management Board’s recommendation will be reviewed by the Supervisory Board
and will be submitted to the Annual General Meeting for resolution. The final decision on the distribution of the Company’s 2023
profit and the payment of the dividend will be taken by the Annual General Meeting.
Dividend payment restrictions are described in note 25.5.
On 15 February 2024, the Management Board of the Parent Entity, taking into account the preliminary financial results of the
Parent Entity and the Arctic Paper S.A. Capital Group for 2023, decided to recommend to the Annual General Meeting of the
Company the payment of a dividend from the Company’s net profit for the financial year 2023, in the total amount of PLN
69,287,783, i.e. PLN 1.00 gross per share. The Management Board’s recommendation will be reviewed by the Supervisory Board
and will be submitted to the Annual General Meeting for resolution. The final decision on the distribution of the Company’s 2023
profit and the payment of the dividend will be taken by the Annual General Meeting.
The table below provides a summary of dividend amounts in 2024:
Type of dividend amount
Dividends recognised as distributions to owners per share (PLN) 0,00
Dividends proposed or enacted up to the date the financial statements
were authorised for issue but not recognised as distributed to share
holders (in PLN ‘000). PLN) 69 288
Dividends proposed or enacted by the date the financial statements
were authorised for issue but not recognised as distributed to holders
of shares, per share (PLN) 1,00
===== SIDA 56 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 56
(unless specified otherwise, all amounts are in PLN ‘000)
16. Tangible fixed assets
Tangible fixed assets include tangible fixed assets excluding right-of-use assets and right-of-use assets.
Table As at 31 December
2023
As at 31 December
2022
Tangible fixed assets 16.1 1 137 780 1 095 320
Right-of-use assets 16.2 28 391 29 684
TOTAL 1 166 171 1 125 004
===== SIDA 57 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 57
(unless specified otherwise, all amounts are in PLN ‘000)
Tangible fixed assets without assets with the right of use
Land and
buildings
Plant
and machinery
Fixed assets
under
construction Total
Net carrying amount as at 1 January 2022 267 632 757 262 90 532 1 115 425
Increase due to purchase 12 729 52 944 79 100 144 773
Increase due to transfer of tangible fixed assets under construction 7 940 70 309 (78 248) -
Decreases due to disposal - (165) - (165)
Decreases due to liquidation - (432) - (432)
Depreciation allowance for the period (17 493) (96 689) - (114 183)
Impairment - (4 411) - (4 411)
Change to presentation within groups - (241) - (241)
FX differences on translation (10 989) (29 866) (4 591) (45 446)
Transfer to right-of-use assets - - - -
Net carrying amount as at 31 December 2022 259 818 748 709 86 793 1 095 320
Net carrying amount as at 1 January 2023 259 818 748 709 86 793 1 095 320
Increase due to purchase 18 037 60 773 124 362 203 172
Increase due to transfer of tangible fixed assets under construction 396 53 020 (53 416) -
Decreases due to disposal - (2 101) - (2 101)
Decreases due to liquidation - (10) - (10)
Depreciation allowance for the period (18 697) (89 838) - (108 535)
FX differences on translation (11 428) (33 441) (5 198) (50 067)
-
Net carrying amount as at 31 December 2023 248 126 737 113 152 541 1 137 780
Balance as at 1 January 2022
Gross carrying amount 583 677 2 181 612 90 532 2 855 821
Depreciation/amortisation and impairment allowances (316 045) (1 424 351) - (1 740 396)
Net carrying amount 267 632 757 262 90 532 1 115 425
Balance as at 31 December 2022
Gross carrying amount 580 482 2 146 173 86 793 2 813 448
Depreciation/amortisation and impairment allowances (320 664) (1 397 463) - (1 718 128)
Net carrying amount 259 818 748 709 86 793 1 095 320
Balance as at 1 January 2023
Gross carrying amount 580 482 2 146 173 86 793 2 813 448
Depreciation/amortisation and impairment allowances (320 664) (1 397 463) - (1 718 128)
Net carrying amount 259 818 748 709 86 793 1 095 320
Balance as at 31 December 2023
Gross carrying amount 570 812 2 160 025 152 541 2 883 378
Depreciation/amortisation and impairment allowances (322 687) (1 422 911) - (1 745 598)
Net carrying amount 248 126 737 113 152 541 1 137 780
===== SIDA 58 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 58
(unless specified otherwise, all amounts are in PLN ‘000)
As at 31 December 2023, an impairment test of the assets of Arctic Paper Grucksbo and the Rottneros Group was carried out, the
results of the test are described in note 21 of the later report. Impairment of tangible fixed assets for the year ended on 31
December 2023 was PLN 0 thousand (in the year ended on 31 December 2022: PLN -4.411 thousand).
Tangible fixed assets excluding rights-of-use assets with a carrying amount of PLN 731,515 thousand (as at 31 December 2022:
PLN 718,891 thousand are subject to mortgage to secure the bank loans (note 26.2).
The amount of capitalised external funding costs and FX gains/losses in the year ended on 31 December 2023 was PLN 72
thousand (in the year ended on 31 December 2022: PLN 0 thousand).
The value of depreciation for 2023 for additions to tangible fixed assets made during 2023 amounted to PLN 1,651 thousand and
related mainly to machinery and equipment (2022: PLN 5.936 thousand).
Right-to-use assets
Right-of-use assets with a carrying amount of PLN 4,255 thousand as at 31 December 2023 (PLN 7,399 thousand as at 31
December 2022) are covered by mortgages/pledges established to secure lease liabilities.
Land and
buildings
Plant
and machinery Total
Net carrying amount as at 1 January 2022 27 532 9 618 37 150
Increases due to the extension or conclusion of new contracts 12 274 1 702 13 976
Reductions due to termination of contracts (437) - (437)
Decreases due to liquidation - - -
Depreciation allowance for the period (6 685) (3 714) (10 399)
FX differences on translation (228) (208) (436)
Net carrying amount as at 31 December 2022 32 455 7 399 39 854
Net carrying amount as at 1 January 2023 32 455 7 399 39 854
Increases due to the extension or conclusion of new contracts 4 654 4 174 8 829
Reductions due to termination of contracts - (3 797) (3 797)
Decreases due to liquidation (3 823) (79) (3 902)
Depreciation allowance for the period (7 213) (3 094) (10 307)
FX differences on translation (646) (348) (994)
Net carrying amount as at 31 December 2023 25 429 4 255 29 684
Balance as at 1 January 2022
Gross carrying amount 40 584 16 887 57 471
Depreciation/amortisation and impairment allowances (13 052) (7 269) (20 321)
Net carrying amount 27 532 9 618 37 150
Balance as at 1 January 2022
Gross carrying amount 52 436 16 360 68 795
Depreciation/amortisation and impairment allowances (19 980) (8 961) (28 941)
Net carrying amount 32 455 7 399 39 854
Balance as at 1 January 2022
Gross carrying amount 52 436 16 360 68 795
Depreciation/amortisation and impairment allowances (19 980) (8 961) (28 941)
Net carrying amount 32 455 7 399 39 854
===== SIDA 59 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 59
(unless specified otherwise, all amounts are in PLN ‘000)
17. Leases
The Group entered into lease contracts covering selected motor vehicles, technical equipment, offices and warehouses and
perpetual usufruct right of land.
As at 31 December 2023 and 31 December 2022 the future minimum lease fees and the present value of minimum net lease fees
were as follows:
As at 31 December 2023 As at 31 December 2022
Minimum fees
Present value of
the fees Minimum fees
Present value of
the fees
In 1 year 5 103 4 720 8 537 7 881
In 1 to 5 years 14 536 13 032 14 316 11 254
Over 5 years 49 626 10 990 46 137 11 061
Total minimum lease fees 69 265 28 743 68 989 30 197
Minus financial expenses (40 511) (38 792)
Value of present minimum
lease fees, of which: 28 754 28 743 30 197 30 197
- short-term 4 720 7 881
- long-term 24 022 22 315
The Group applies leasing simplifications for leases of low value and a term of 12 months or less. In 2023, the value of the costs
incurred for low-value assets amounted to PLN 42 thousand (2022: PLN 26 thousand). In 2023 and 2022, the Group did not enter
into leases of 12 months or less.
18. Investment property
Year ended on 31
December 2023
Year ended on 31
December 2022
Opening balance as at 1 January 1 763 2 978
Increases (subsequent expenditures) - -
Sale of properties - -
Profit/(loss) on fair value measurement (12) (1 215)
- -
Closing balance as at 31 December 1 751 1 763
Investment properties include undeveloped plots of land in Warsaw.
Investment properties were disclosed at fair value as a result of an appraisal by an accredited appraiser. The appraisal was made
with a comparative approach, the adjusted average price method.
===== SIDA 60 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 60
(unless specified otherwise, all amounts are in PLN ‘000)
The property appraiser holds a license in property appraising granted by the President of the Housing and City Development
Office. The market value of a property is the most likely price that may be realised in the market, determined with reference to
transactional prices and subject to the following assumptions:
— the parties to the transaction were independent of each other, were not forced to act and were willing to enter into the
transaction,
— sufficient time has expired to expose the property to the market and to negotiate contractual terms and conditions.
The market value for the current method of use (WRU) was appraised subject to:
— purpose of the appraisal,
— type and location of the property,
— function in the local development plan,
— existence of technical infrastructure,
— condition of the property,
— available data on prices of similar properties.
The current costs incurred in 2023 included real estate tax of PLN 11 thousand (2022: PLN 11 thousand).
===== SIDA 61 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 61
(unless specified otherwise, all amounts are in PLN ‘000)
19. Intangible assets and goodwill
Goodwill
Relations
with
customers Trademarks
Co-generation
certificates and
CO2 emission
rights Other* Total
Net value as at 1 January 2023 8 847 - 39 808 23 563 527 72 746
Increases - - - 15 984 116 16 100
Decreases - - - (18 617) - (18 617)
Depreciation for the period - - - - (204) (204)
Impairment (reversal) - - - - - -
FX differences on translation (617) - (2 686) (28) (0) (3 332)
Net value as at 31 December 2023 8 230 - 37 122 20 902 439 66 694
As at 1 January 2023
Gross value 8 847 35 115 84 136 23 563 40 576 192 237
Depreciation/amortisation and impairment
allowances - (35 115) (44 327) - (40 049) (119 491)
Net value 8 847 - 39 808 23 563 527 72 746
As at 31 December 2023
Gross value 8 230 35 115 78 356 20 902 39 611 182 214
Depreciation/amortisation and impairment
allowances - (35 115) (41 234) - (39 172) (115 521)
Net value 8 230 - 37 122 20 902 439 66 694
* the item other contains computer software
Goodwill
Relations
with
customers Trademarks
Co-generation
certificates and
CO2 emission
rights Other* Total
Net value as at 1 January 2022 9 421 - 42 302 11 752 2 613 66 088
Increases - - - 21 782 127 21 910
Decreases - - - (10 038) - (10 038)
Depreciation for the period - - - - (2 093) (2 093)
Impairment (reversal) - - - - - -
FX differences on translation (573) - (2 494) 67 (120) (3 120)
Net value as at 31 December 2022 8 847 - 39 808 23 563 527 72 746
As at 1 January 2022
Gross value 9 421 35 115 89 502 11 752 41 739 187 528
Depreciation/amortisation and impairment
allowances - (35 115) (47 200) - (39 126) (121 440)
Net value 9 421 - 42 302 11 752 2 613 66 088
As at 31 December 2022
Gross value 8 847 35 115 84 136 23 563 40 576 192 237
Depreciation/amortisation and impairment
allowances - (35 115) (44 327) - (40 049) (119 491)
Net value 8 847 - 39 808 23 563 527 72 746
* – The item Other contains mainly computer software.
===== SIDA 62 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 62
(unless specified otherwise, all amounts are in PLN ‘000)
As at 31 December 2023, an impairment test of the assets of Arctic Paper Grucksbo and the Rottneros Group was carried out, the
results of the test are described in note 21 of the later report.
At 31 December 2023 and 31 December 2022, trademarks include Arctic Paper’s trademarks (net value at 31 December 2023 and
31 December 2022: PLN 1,319 thousand), AP Grycksbo (net value at 31 December 2023: PLN 7,294 thousand, net value at 31
December 2022: PLN 7,841 thousand) and Rottneros (net worth at 31 December 2023: PLN 28,509 thousand and 31 December
2022: PLN 30,648 thousand). The Arctic Paper and Rottneros trademarks are not impaired. The trademark in AP Grycksbo as at
31 December 2023 is subject to an impairment allowance of PL 41,230 thousand (as at 31 December 2022: PLN 44,327
thousand).
Impairment of intangible assets recognised in the year ended 31 December 2023 amounted to PLN 0 thousand (recognised in the
year ended 31 December 2022: PLN 0 thousand).
Intangible assets with a carrying amount of PLN 29,942 thousand (as at 31 December 2022: PLN 33,250 thousand) are used as
collateral for bank loans (Note 26.2).
20. Other assets
Other financial assets
Note
As at 31 December
2023
As at 31 December
2022
Hedging instruments 35.3.1 46 629 309 406
Derivative instruments measured at fair value through profit and loss 7 838 72 781
Investments in equity instruments 14 500 3 370
Receivable from realised forward contracts 11 008 37 641
Receivables from pension fund 21 236 22 829
Total 101 211 446 027
– short-term 51 798 283 411
– long-term 49 414 162 617
Other non-financial assets
As at 31 December 2023 As at 31 December 2022
Insurance costs 531 573
Lease fees 476 131
Advance payments for services 13 177 8 488
Rent 479 1 521
Other 2 665 1 612
Total 17 328 12 325
– short-term 17 170 12 048
– long-term 158 277
===== SIDA 63 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 63
(unless specified otherwise, all amounts are in PLN ‘000)
Interests in joint ventures
Interests in joint ventures include shares in the Kalltorp Kraft Hb hydroelectric power plant. The purpose of acquiring the
shares was to implement the strategy of increasing its own energy capacity.
21. Impairment tests on fixed and intangible assets
Rottneros Group
As at 31 December 2023 and 31 December 2022, the Rottneros Group performed impairment tests for goodwill using the
discounted cash flow method. Tests showed no need to write down goodwill at this date.
The carrying amount of the Rottneros Group’s fixed assets and intangible assets adopted for consolidation of the Arctic Paper
Group in these consolidated financial statements is measured at comparable amounts to those presented in the Rottneros
Group’s consolidated financial statements. For this reason, the impairment analysis of the assets allocated to the Rottneros
Group cash generating unit was based on the impairment analysis prepared by the Rottneros Group. The unit is allocated
goodwill and a trademark with an indefinite useful life.
An impairment test of the Rottneros Group’s cash flow generating unit was carried out as at 31 December 2023.
The cash-generating unit is classified in the pulp segment. The recoverable amount of the facility has been determined based on
value in use using the discounted cash flow method. A discount rate (WACC) of 10% and a forecast period from 2023 to a
maximum of 2028 were used to calculate the value in use of the net assets attributable to the cash-generating unit. The projected
flows included a residual period of more than 5 years due to the Group’s strategy of operating the centre indefinitely. As at 31
December 2023, the total net assets tested for impairment amounted to PLN 678,450 thousand (including goodwill of PLN 8,229
thousand and trademark of PLN 28,509 thousand). As at 31 December 2022, the total net assets tested for impairment amounted
to PLN 629,843 thousand (including goodwill of PLN 8,847 thousand and trademark of PLN 30,648 thousand). The residual value
of the cash-generating unit as at 31 December 2023 was defined as its value in use amounting for PLN 830,853 thousand.
The recoverable amount of the net assets allocated to the cash-generating units was higher than the carrying amount of these
assets and therefore the test did not indicate an impairment of the Rottneros Group’s tangible fixed assets and intangible assets
(including trademark and goodwill) recognised in these consolidated financial statements as at 31 December 2023 and 31
December 2022.
===== SIDA 64 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 64
(unless specified otherwise, all amounts are in PLN ‘000)
Key assumptions
Main assumptions 2023
2022
Approved projections based on 2024-2028 2023-2027
Weighted average cost of capital (WACC) 10,0% 11,5%
Growth rate in the residual period 0,0% 0,0%
Impact on the value of assets in use
Parameter Change of the
parameter by 2023 2022
Weighted average cost of
capital (WACC) +0,1 p.p. No data No data
Growth rate in the residual
period +0,1 p.p. No data No data
Weighted average cost of
capital (WACC) -0,1 p.p. No data No data
Growth rate in the residual
period -0,1 p.p. No data No data
Arctic Paper Grycksbo
As at 31 December 2023 and 31 December 2022 earlier impairment tests were conducted at Arctic Paper Grycksbo with reference
to tangible fixed assets and intangible assets.
The carrying amount of the cash-generating unit as at 31 December 2023 was determined to be PLN 147,872 thousand. It
comprised the following components: tangible fixed assets, intangible assets, net working capital, cash and cash equivalents
decreased by previously recognized cumulative impairment for Arctic Paper Grycksbo.
The total cumulative impairment allowance for Arctic Paper Grycksbo as at 31 December 2023 amounted to PLN 248,521
thousand (31 December 2022: PLN 267,164 thousand). The difference in the impairment allowance was due to the measurement
of the impairment allowance from previous years denominated in SEK to the presentation currency – PLN.
The recoverable amount of the cash-generating unit as at 31 December 2023 was determined as its value in use and amounted to
PLN 146,371 thousand. The test did not result in a change in the impairment allowance as at 31 December 2023. The difference
between the use value and the carrying value was calculated and amounted for PLN 1,501 thousand, which was not reflected in
the statement of financial position and profit and loss account.
Due to the recognition of the impairment in previous periods, the management board will monitor the issue of potential reversal of
the impairment, however, only up to the carrying amount of the assets that would be determined in a normal life cycle (after
depreciation).
The impairment test as at 31 December 2023 at Arctic Paper Grycksbo was related to higher-than-expected results of the
company realised as a result of market conditions such as macroeconomic factors, competitive environment and higher demand
in the paper segment produced by Grycksbo. The cash-generating unit is classified as a paper segment.
The value of the weighted average cost of capital (WACC) at 31 December 2023 was 9.7% (at 31 December 2022 9.4%).
The key assumptions of the impairment test carried out as at 31 December 2023 are described below.
Key assumptions underlying the calculation of value in use
Calculations of the value in use of the paper sale centre at the Grycksbo Paper Mill is most sensitive to the following variables:
===== SIDA 65 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 65
(unless specified otherwise, all amounts are in PLN ‘000)
— Level of sales;
— Selling prices;
— Discount rate;
— Changes in commodity prices;
— Energy price developments.
Level of sales – estimates of the level of sales are made based on budget data on the basis of the expected demand for a given
type of paper manufactured at AP Grycskbo and taking into account the paper mill’s production capacity.
Selling prices – estimates of selling prices are made based on budget data on the basis of the expected demand for a given type
of paper manufactured at AP Grycksbo and in correlation with the prices of raw materials, mainly pulp.
Sales prices include discounts and rebates granted.
Discount rate – reflects the assessment of risks inherent to the centre estimated by the management. This is the rate applied by
the management to estimate the operational effectiveness (results) and future investment proposals. In the budgeted period the
applied discount rate is 9.7% (the rate applied as at 31December 2022: 9.4%). The discount rate was determined on the basis of
the following: Weighted average cost of capital (WACC)
Changing raw material prices (mainly pulp) – estimates concerning changes to raw materials are made on the basis of the
external data related to pulp prices. The main source of data underpinning the assumptions made are forecasts from a reputable
external pulp market research company. It should be noted that the costs of pulp is characterised by high volatility.
Changing energy prices – a growth of energy prices, mainly electricity, listed at Nordpool, the commodity exchange in Sweden,
and of the energy generated from biomass as the core source of energy, results from the assumptions applied to the projections
approved by the local management of the Grycksbo Paper Mill. The assumed power purchase prices also take into account price
levels that have been hedged by the company by forward contracts.
The tables below will present the assumptions and sensitivity analysis for the impairment test carried out as at 31 December 2023
and 31 December 2022:
Key assumptions
===== SIDA 66 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 66
(unless specified otherwise, all amounts are in PLN ‘000)
Main assumptions 2023 2022
Approved projections based on 2024-2028 2023-2027
Weighted average cost of capital (WACC) 9,7% 9,4%
Sales volume [tonnes] 180 000 210 000
Average annual change in selling prices over the projection
period 0,5% (1,8%)
Average annual change in pulp purchase prices over the
projection period 0,0% 17,8%
Average annual change in power purchase prices over the
projection period 0,0% (0,7%)
Growth rate in the residual period 0,0% 0,0%
Sensitivity of assumptions – influence on assets value reported in the statement of financial position
Parameter
Change of the
parameter by
2023
Impact on the value
of assets in use
2022
Impact on the
value of assets
in use
31 December 2023
Weighted average cost of capital (WACC) +0,1 p.p. brak brak
Growth rate in the residual period +0,1 p.p. brak brak
Sales volume during the projection period 1% brak brak
Selling price during the projection period 1% brak brak
Purchase price of pulp during the projection period 1% brak brak
Purchase price of energy during the projection period 10% brak brak
Weighted average cost of capital (WACC) -0,1 p.p. brak brak
Growth rate in the residual period -0,1 p.p. brak brak
Sales volume during the projection period -1% brak brak
Selling price during the projection period -1% brak brak
Purchase price of pulp during the projection period -1% brak brak
Purchase price of energy during the projection period -10% brak brak
22. Inventories
As at 31 December 2023 As at 31 December 2022
Materials (at purchase prices) 187 943 258 076
Production in progress (at manufacturing costs) 8 428 9 170
Finished products, of which:
At purchase price / manufacturing costs 247 760 333 922
At net realisable price - -
Advance payments for deliveries 800 37
Total inventories, at the lower of cost and net realisable value 444 930 601 205
Impairment allowance to inventories 16 556 9 703
Total inventories before impairment allowance 461 487 610 909
Goods amounted to PLN 23 thousand at 31 December 2023 (31 December 2022: PLN 327 thousand).
The value of inventories recognised in 2023 costs is PLN 1,887 million (2022: PLN 2,694 million). In the year ended 31 December
2023, the Group increased inventory allowances by a net amount of PLN 6,853 thousand (2022: net reduction of PLN 748
thousand). The reduction in the allowance was mainly due to the sale or scrapping of spare parts.
===== SIDA 67 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 67
(unless specified otherwise, all amounts are in PLN ‘000)
The difference in the impairment allowances is referred to costs of sales in the profit and loss account. The impairment allowance
is related to finished products and slowly (including spare parts) rotating materials and exposed to the risk of damage,
obsolescence or non use for internal needs.
In the financial year ended on 31 December 2023 the Group had a pledge agreement on its entire movable assets understood as
inventories, trade receivables and cash for PLN 823,436 thousand, SEK 135 thousand.
In the financial year ended on 31 December 2022 the Group had a pledge agreement on its entire movable assets understood as
inventories, trade receivables and cash for PLN 952,687 thousand, NOK 58 thousand.
23. Trade and other receivables
As at 31 December
2023 As at 31 December 2022
Trade receivables 365 415 457 032
VAT receivables 40 146 38 442
Other third party receivables 9 860 5 201
Other receivables from related entities - 2 716
Total (net) receivables 415 421 503 391
Impairment allowances to receivables 4 150 5 482
Gross receivables 419 572 508 873
All the trade receivables specified above are receivables under contracts with customers and they do not contain any material
financing element.
The terms and conditions of transactions with related entities are presented in note 32.
Trade receivables do not earn interest and have customary payment terms of 30 to 90 days.
The Group has an appropriate policy of selling solely to verified customers. Therefore, in the opinion of the management, there is
no additional credit risk in excess of the level identified with the impairment allowance to uncollectible receivables characteristic
for the Group’s trade receivables.
As at 31 December 2023, trade receivables of PLN 4,150 thousand (as at 31 December 2022: PLN 5,482 thousand) were deemed
uncollectible and therefore written off.
===== SIDA 68 =====
Consolidated Financial Statements 2023 of the Arctic Paper S.A. Capital Group 68
(unless specified otherwise, all amounts are in PLN ‘000)
The changes to impairment allowances to receivables were as follows:
Year ended on 31
December 2023
Year ended on 31
December 2022
Impairment allowance as at 1 January 5 482 15 954
Increase (724) (209)
Utilisation (335) (10 484)
Release of unused allowance (177) (7)
FX differences on translation of foreign operations (96) 227
Impairment allowance as at 31 December 4 150 5 482
The impairment allowance fully refers to receivables under contracts with customers.
Below is an analysis of trade receivables that as at 31 December 2023 and 31 December 2022 were overdue but not treated as
uncollectible:
Total Not overdue
Overdue but collectible
< 30 days 30-60
days
60-90
days
90-120
days >120 days
As at 31 December 2023 365 415 322 217 39 940 1 047 48 122 2 042
As at 31 December 2022 457 032 399 413 52 226 2 401 172 248 2 573
Receivables over 120 days in the prospective assessment of the Company’s management qualify as collectible and therefore no
impairment was recognised.
The maturities of other receivables from third parties do not exceed 360 days. The policy regarding the recognition of impairment
allowances on receivables is described in Notes 9.11 and 35.
24. Cash and cash equivalents
Cash at bank earns interest at variable interest rates based on overnight bank deposit rates.
The fair value of cash and cash equivalents at 31 December 2023 is PLN 500,449 thousand (31 December 2022: PLN 481,930
thousand).
As at 31 December 2023, the Group had unused cash under current facilities of PLN 215,329 thousand (31 December 2022: PLN
227,286 thousand).
As at 31 December 2023, the Group had a used overdraft facility of PLN 0 thousand (31 December 2022: PLN 0 thousand).
===== SIDA 69 =====