Annual Report 2024
Arctic Paper SA
Translat orʼs E xplanatory 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.
Table of contents
Selected separate financial data ........................................................................................................................................................................... 2
Management Board’s report from operations of Arctic Paper SA .......................................................................................................................... 4
Letter from the President of the Management Board of Arctic Paper SA ......................................................................................................... 4
Description of the business of Arctic Paper .................................................................................................................................................... 5
Summary of financial results ........................................................................................................................................................................... 8
Relevant information and factors affecting the financial results and the assessment of the financial standing ............................................... 11
Factors affecting the development of the Company ...................................................................................................................................... 12
Supplementary information ........................................................................................................................................................................... 13
Changes to the bodies of Arctic Paper SA .................................................................................................................................................... 14
Management of financial resources .............................................................................................................................................................. 15
Statement on the application of the Corporate Governance Rules ................................................................................................................ 16
Information compliant with the requirements of Swedish regulations concerning corporate governance. ...................................................... 25
Information by the Management Board of Arctic Paper SA on selection of the audit firm .............................................................................. 27
Statements of the Management Board ......................................................................................................................................................... 27
Financial Statements for the year ended 31 December 2024 together with the auditor’s report .......................................................................... 29
Separate financial statements ...................................................................................................................................................................... 29
Notes to the separate financial statements ................................................................................................................................................... 33
1. General information ................................................................................................................................................................................ 33
1.1 Name, registered office, scope of business activity ....................................................................................................................... 33
1.2 Identification of the separate financial statements ......................................................................................................................... 33
1.3 Composition of the Company’s Management Board...................................................................................................................... 33
1.4 Approval of the financial statements.............................................................................................................................................. 33
1.5 Investments by the Company ........................................................................................................................................................ 34
2. Accounting principles ............................................................................................................................................................................. 34
2.1 Basis of preparation of the financial statements ............................................................................................................................ 34
2.2 Compliance statement .................................................................................................................................................................. 35
2.3 Functional currency and presentation currency ............................................................................................................................. 35
2.4 Changes in applied accounting policies ........................................................................................................................................ 35
2.5 New and amended standards and interpretations applied ............................................................................................................. 35
2.6 New standards and interpretations that have been published and are not yet effective ................................................................. 35
2.7 Foreign currency translation .......................................................................................................................................................... 36
2.8 Material values based on professional judgement and estimates .................................................................................................. 37
3. Notes to the separate statement of profit or loss and other comprehensive income ................................................................................ 37
3.1 Revenue ....................................................................................................................................................................................... 37
3.2 Other income and costs ................................................................................................................................................................ 38
3.3 Income tax .................................................................................................................................................................................... 39
3.4 Earnings/(loss) per share .............................................................................................................................................................. 41
3.5 Dividend paid and proposed ......................................................................................................................................................... 41
Annual Report 2024
Arctic Paper SA
4. Notes to the separate statement of financial position .............................................................................................................................. 42
4.1 Investments in subsidiaries ........................................................................................................................................................... 42
4.2 Other financial assets ................................................................................................................................................................... 44
4.3 Trade and other receivables ......................................................................................................................................................... 46
4.4 Other non-financial assets ............................................................................................................................................................ 47
4.5 Cash and cash equivalents ........................................................................................................................................................... 47
4.6 Share capital and other capitals .................................................................................................................................................... 47
4.7 Interest-bearing bank loans and cash-pooling ............................................................................................................................... 49
4.8 Trade and other payables and other financial liabilities ................................................................................................................. 50
4.9 Contingent liabilities ...................................................................................................................................................................... 51
5. Notes on financial instruments ............................................................................................................................................................... 51
5.1 Fair value of each class of financial instruments ........................................................................................................................... 52
5.2 Changes in assets and liabilities arising from financing activities .................................................................................................. 53
5.3 Collateral ...................................................................................................................................................................................... 53
6. Financial risk management .................................................................................................................................................................... 54
6.1 Financial risk factors ..................................................................................................................................................................... 54
6.2 Capital risk management .............................................................................................................................................................. 57
7. Other explanatory notes ......................................................................................................................................................................... 58
7.1 Information on related parties ....................................................................................................................................................... 58
7.2 Employment structure ................................................................................................................................................................... 59
7.3 Events after the balance sheet date .............................................................................................................................................. 59
7.4 Information on auditor’s remuneration ........................................................................................................................................... 60
Annual Report 2024
Arctic Paper SA
2
Selected separate financial data
Period
from
01.01.2024
to 31.12.2024
Period
from
01.01.2023
to 31.12.2023
Period
from
01.01.2024
to 31.12.2024
Period
from
01.01.2023
to 31.12.2023
PLN ‘000
PLN ‘000
EUR ‘000
EUR ‘000
Sales revenue
123 857
195 486
28 776
43 169
Operating profit/(loss)
192 024
248 537
44 614
54 885
Gross profit/(loss)
193 631
249 158
44 987
55 022
Net profit/(loss) from continuing operations
197 292
251 216
45 838
55 476
Net profit/(loss) for the financial year
197 292
251 216
45 838
55 476
Net cash flows from operating activities
(6 232)
298 125
(1 448)
65 835
Net cash flows from investing activities
(5 530)
(26 624)
(1 285)
(5 879)
Net cash flows from financing activities
(74 421)
(218 489)
(17 290)
(48 249)
Change in cash and cash equivalents
(86 182)
53 011
(20 023)
11 707
Weighted average number of ordinary shares
69 287 783
69 287 783
69 287 783
69 287 783
Diluted weighted average number of ordinary shares
69 287 783
69 287 783
69 287 783
69 287 783
EPS in PLN/EUR
2,85
3,63
0,66
0,80
Diluted EPS in PLN/EUR
2,85
3,63
0,66
0,80
Mean PLN/EUR exchange rate*
4,3042
4,5284
As at
31 December
2024
As at
31 December
2023
As at
31 December
2024
As at
31 December
2023
PLN ‘000
PLN ‘000
EUR ‘000
EUR ‘000
Total assets
1 341 458
1 287 686
313 938
296 156
Non-current liabilities
41 563
44 668
9 727
10 273
Current liabilities
335 192
405 043
78 444
93 156
Equity
964 703
837 975
225 767
192 727
Share capital
69 288
69 288
16 215
15 935
Number of ordinary shares
69 287 783
69 287 783
69 287 783
69 287 783
Diluted number of ordinary shares
69 287 783
69 287 783
69 287 783
69 287 783
Book value per share in PLN/EUR
13,92
12,09
3,26
2,78
Diluted book value per share in PLN/EUR
13,92
12,09
3,26
2,78
Declared or paid dividend in PLN/EUR
69 287 783
187 077 014
16 215 255
43 025 992
Declared or paid dividend per share in PLN/EUR
1,00
2,70
0,23
0,62
PLN/EUR exchange rate at the end of the period**
4,2730
4,3480
* Items of the Statement of profit or loss and Statement of cash flows have been translated at the mean arithmetic exchange rates published by the National Bank
of Poland, prevailing in the period that the presented data refers to.
** Balance sheet items have been translated at the mean arithmetic exchange rates published by the National Bank of Poland, prevailing on the balance sheet
date.
Annual Report 2024
Arctic Paper SA
4
Management Board’s report from operations of Arctic Paper SA
to the report for 2024
Letter from the President of the Management Board of Arctic Paper SA
Dear Sirs,
I am pleased to present to you the Arctic Paper SA Annual Report for 2024.
The past 12 months have been a time of investment for the Company and the Arctic Paper Group, preparing us for new challenges. Thanks to
a strong balance sheet and lack of debt, we have accelerated the implementation of investments in new segments. Last year, the expected
recovery of the European economy did not take place, which was reflected in the weak economic situation for paper products. In a rapidly changing
economic environment, it is even more important to maintain a strong balance sheet and low debt. Despite significant investments and
a declaration of dividend payment of approximately 30% of the generated profit, the Group still has a strong balance sheet and no net debt.
The consistent implementation of the 4P strategy and the results achieved as a result confirm that the whole Arctic Paper SA is a reliable and
solid partner for its Customers and meets the expectations of the shareholders’ expectations.
I would like to thank the entire Arctic Paper SA team for the effort they put into the tasks set before them.
Michał Jarczyński
President of the Management Board of Arctic Paper SA
Annual Report 2024
Arctic Paper SA
5
Description of the business of Arctic Paper
General information
Arctic Paper SA 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
SA Previously they were owned by Trebruk AB (formerly Arctic Paper AB), the parent company of the Issuer In addition, under the expansion, the
Group acquired the Paper Mill Arctic Paper Mochenwangen (Germany) in December 2008 and the Paper Mill Grycksbo (Sweden) in March 2010.
In 2012 and 2013 Arctic Paper SA acquired shares in Rottneros AB, a company listed at NASDAQ in Stockholm, Sweden, holding 100% shares
in two Pulp Companies, Procurement Office and a company manufacturing food packaging.
Since 23 October 2009, Arctic Paper SA has been listed on the primary market of the Warsaw Stock Exchange and since 20 December 2012 on
the NASDAQ.
The main statutory activity of the Company is the activity of a holding company, consisting in managing of entities belonging to the controlled
Capital Group. The operations are conducted through Paper Mills and Pulp Mills as well as Sales Offices and Procurement Office. The description
of the Arctic Paper Group was provided in the Management Board’s Report from operations of the Arctic Paper Group for the year ended on
31 December 2024.
The Company is entered in the register of entrepreneurs of the National Court Register maintained by the District Court in Zielona Góra – 8th
Commercial Division of the National Court Register, under KRS number 0000306944. The Parent Company holds statistical number REGON
080262255. The Company has a foreign branch in Göteborg (Sweden).
Business activity
The core business of Arctic Paper SA covers holding activities.
Subsidiaries
As at 31 December 2024, Arctic Paper SA held investments in the following subsidiaries:
‒ Arctic Paper Kostrzyn SA – Paper Mill in Kostrzyn nad Odrą (Poland);
‒ Arctic Paper Munkedals AB – Paper Mill in Munkedal (Sweden);
‒ Arctic Paper Sverige AB – a sales office operating in Sweden;
‒ Arctic Paper Norge AS – a sales office operating in Norway;
‒ Arctic Paper Danmark A/S – a sales office operating in Denmark;
‒ Arctic Paper UK Limited – a sales office in the United Kingdom;
‒ Arctic Paper Baltic States SIA – a sales office covering the Baltic States;
‒ Arctic Paper Benelux SA – a sales office covering the Benelux countries;
‒ Arctic Paper Schweiz AG – a sales office in Switzerland;
‒ Arctic Paper Italia srl – a sales office in Italy;
‒ Arctic Paper France SAS – a sales office in France;
‒ Arctic Paper Espana SL – a sales office in Spain;
‒ Arctic Paper Papierhandels GmbH – a sales office in Austria;
‒ Arctic Paper Deutschland GmbH – a sales office in Germany;
‒ Arctic Paper Polska Sp. z o.o. – a sales office in Poland;
‒ Arctic Power Sp. z o.o. – an energy project company;
‒ Kostrzyn Packaging Spółka z o.o. – a packaging production company;
‒ Arctic Paper Investment GmbH – a holding company established to acquire shares in the Paper Mill in Mochenwangen;
‒ Arctic Paper Investment AB – a holding company established for the purpose of acquisition of Arctic Paper Grycksbo AB;
‒ Rottneros AB – a holding company with shares in the Paper Mills of Rottneros Bruk AB, Rottneros Vallvik AB, in the procurement office and
in the company manufacturing food packaging.
Information on percentage holdings in each subsidiary is provided in the Company’s financial statements (note 1.5).
Changes in the capital structure of the Arctic Paper Group
In 2024, a change was made to the structure of Arctic Power Sp. z o.o., resulting in a surcharge of PLN 5,000,000. The surcharge was intended
to finance ongoing investment projects in the energy sector, including the purchase of a photovoltaic farm in Garwolin.
Services provided
As a holding company, Arctic Paper SA receives dividend, interest on loans granted and revenue for the management services it provides for
related parties operating within the Arctic Paper Group.
In connection with restructuring activities in the Arctic Paper Group, at the beginning of 2016 a centralised logistics department started to operate
within the structures of Arctic Paper SA The logistics department provides services in planning and coordinating transport to the Paper Mills in
Kostrzyn, Grycksbo and Munkedals.
The range of products manufactured by the Arctic Paper Group’s paper mills is described in the Management Board’s Report from operations of
the Arctic Paper Group for 2024.
Annual Report 2024
Arctic Paper SA
6
Modifications to the core management principles
In 2024, there were no material modifications to the core management principles.
Shareholding structure
Nemus Holding AB, a company under Swedish law (a company owned indirectly by Mr Thomas Onstad), is the majority shareholder of Arctic
Paper SA, holding (as at 31 December 2024) 41,374,890 shares of our Company, which constitutes 59.71% of its share capital and corresponds
to 59.71% of the total number of votes at General Meetings. Thus Nemus Holding AB is the parent company of the Issuer.
Additionally, Mr Thomas Onstad, an indirect shareholder of Nemus Holding AB, holds directly 5,323,658 shares representing 7.68% 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 SA as at 31 December 2024 was 68.26% and has not changed
until the date hereof.
as at 31.12.2024
Shareholder
Number of shares
Share in the share capital
[%]
Number of votes
Share in the total number
of votes [%]
Thomas Onstad
47 298 548
68,26%
47 298 548
68,26%
- indirectly via
41 974 890
60,58%
41 974 890
60,58%
Nemus Holding AB
41 374 890
59,71%
41 374 890
59,71%
other entity
600 000
0,87%
600 000
0,87%
- directly
5 323 658
7,68%
5 323 658
7,68%
Other
21 989 235
31,74%
21 989 235
31,74%
Total
69 287 783
100,00%
69 287 783
100,00%
Treasury shares
-
0,00%
-
0,00%
Total
69 287 783
100,00%
69 287 783
100,00%
The table above shows the shareholders holding directly or indirectly at least 5% of the total number of votes at the Company’s General Meeting.
This status has changed since the publication date of the interim report, 8 August 2024. The values before the change are shown in the table
below:
as at 08.08.2024
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%
- indirectly via
41 581 449
60,01%
41 581 449
60,01%
Nemus Holding AB
40 981 449
59,15%
40 981 449
59,15%
other entity
600 000
0,87%
600 000
0,87%
- directly
5 623 658
8,12%
5 623 658
8,12%
Other
22 082 676
31,87%
22 082 676
31,87%
Total
69 287 783
100,00%
69 287 783
100,00%
Treasury shares
-
0,00%
-
0,00%
Total
69 287 783
100,00%
69 287 783
100,00%
Market environment
The Company provides no services directly to external entities. The Company’s financial condition and its ability to distribute dividend is primarily
affected by the market environment in which the Paper and Pulp Mills controlled by the Company operate.
Information on the core products offered by the Group with details of their value and quantities and the share of each product in total sales of the
Group as well as information on markets with a split into domestic and foreign markets and information on procurement sources of materials for
production and services, are all provided in the consolidated Annual Report for 2024.
Development directions and strategy
On 4 October 2021, the Company’s Supervisory Board approved the “Arctic Paper Group Strategy for 2022-2030” presented by the Issuer’s
Management Board. With the Group’s new strategy to 2030, Arctic Paper will accelerate its transformation into a more comprehensive company,
Annual Report 2024
Arctic Paper SA
7
leveraging the synergies and competencies of its existing businesses. The Company’s strategic directions are reflected in its 4 pillars: packaging,
energy, graphic paper and pulp.
For details, please refer to the Report from Operations of the Arctic Paper Group.
The total investment between 2022 and 2030 in all four pillars is planned at more than PLN 1.5 billion, of which around 40 per cent of this amount
will be allocated to new business areas. The Group assumes that it will achieve carbon neutrality by 2035 at the latest.
Sales structure
In 2024, the sales structure by main sources of the Company’s revenue was as follows:
PLN ‘000
2024
% Share
2023
% Share
Services
15 180
12%
14 321
7%
Dividend
106 097
86%
179 235
92%
Interest income on loans
2 580
2%
1 930
1%
Total
123 857
100%
195 486
100%
The Company provides management services to companies pursuant to agreements signed with those entities.
PLN ‘000
2024
% Share
2023
% Share
Arctic Paper Kostrzyn SA
94 934
77%
137 705
70%
Rottneros AB
14 727
12%
44 083
23%
Arctic Paper Munkedals AB
6 638
5%
5 779
3%
Arctic Paper Grycksbo AB
6 135
5%
6 314
3%
Other
1 423
1%
1 604
1%
Total
123 857
100%
195 486
100%
Below, revenue from contracts with customers and other revenue by geography:
Year ended
on 31 December 2024
Year ended
on 31 December 2023
revenue from contracts with customers
Poland
4 155
4 126
Sweden
11 026
10 194
other
-
-
15 180
14 321
Other income (dividends and interest)
Poland
92 188
133 578
Sweden
16 489
46 001
other
-
1 585
108 677
181 165
Total
123 857
195 486
Information on the seasonal or cyclical nature of business
The demand for the Group’s products is subject to slight variations throughout the year. Reduced demand for paper occurs each year during
summer holidays and around Christmas when some printing houses, in particular in Western Europe are closed. Global graphic paper markets
are also subject to structural decline due to digitalisation , but thanks to its efficient sales process and strong brands, Arctic Paper manages its
market shares and overall paper decline better than its competitors.
Research and development
The Company has no direct expenses on research and development.
The Arctic Paper Group mainly carries out development work aimed at streamlining and modernizing production processes, improving cost and
energy efficiency and improving the quality of the products offered. In the period covered with this report, the Paper Mills and Pulp Mills carried
out development works to improve production processes, in particular to shorten the idle time of paper machines as well as works aimed at
improving the paper/pulp quality and extending the assortment and to improve the quality of products and decrease costs.
Annual Report 2024
Arctic Paper SA
8
An important goal of development works last year was the development of new products, especially packaging and barrier papers. In the area of
packaging papers, the work focused on obtaining a product with increased resistance to water and fats. The worldwide trend of replacing plastic
with cellulose and paper packaging, especially in the food packaging segment, is expected to have a positive impact on the company’s business.
Natural environment
A description of the impact of environmental legislation on the operations of the Company’s controlled Paper and Pulp Mills is included in
a separate report on non-financial information – Sustainability Report 2024.
Summary of financial results
Selected items of the statement of profit or loss
PLN ‘000
2024
2023
Change %
2024/2023
Sales revenue
123 857
195 486
-37%
of which:
Revenue from sales of services
15 180
14 321
6%
Interest income on loans
2 580
1 930
34%
Dividend income
106 097
179 235
-41%
Costs of sales of logistics services
(8 212)
(7 311)
12%
Costs from borrowings received
(4 891)
(5 447)
-10%
Profit on sales
110 754
182 727
-39%
% of sales revenue
89,42
93,47
(4.1) p.p.
Administrative expenses
(22 970)
(13 131)
75%
Other operating income
104 497
78 987
32%
Other operating expenses
(257)
(46)
465%
EBIT
192 024
248 537
-23%
% of sales revenue
155,04
127,14
27,9 p.p.
EBITDA
191 601
248 220
-23%
% of sales revenue
154,70
126,98
27,7 p.p.
Finance income
7 362
5 439
35%
Finance costs
(5 755)
(4 818)
19%
Gross profit
193 631
249 158
-22%
Income tax
3 661
2 058
78%
Net profit
197 292
251 216
-21%
% of sales revenue
159,29
128,51
30,8 p.p.
Revenue, costs of sales and profit on sales
The main statutory activity of the Company is the activity of a holding company, consisting in managing of entities belonging to the controlled
Capital Group. The operations of the Group are conducted through Paper Mills and Pulp Mills as well as Sales Offices and Procurement Office.
In 2024, the separate sales revenue reached PLN 123,857 thousand and comprised: dividend income (PLN 106,097 thousand), services provided
to Group companies (PLN 15,180 thousand) and interest income on loans (PLN 2,580 thousand). In 2023, the Company’s separate revenue
amounted to PLN 195,486 thousand and included: dividend income (PLN 179,235 thousand), services provided to Group companies (PLN 14,321
thousand) and interest income on loans (PLN 1,930 thousand).
In 2024 and in 2023, the Company did not provide services to the Pulp Mills of the Rottneros Group.
The costs of sales (PLN -13,103 thousand) include the own cost of providing logistics services (PLN -8,212 thousand) and interest on cash-pooling
(PLN -4,891 thousand).
Administrative expenses
In 2024, the administrative expenses amounted to PLN 22,970 thousand. They cover costs of the administration of the Company operation, costs
of services provided to the companies in the Group and all costs incurred by the Company for the purposes of pursuing holding company activities.
The above costs include a group of costs that are related solely to statutory activities and cover, inter alia: audit costs of financial statements,
functioning costs of the Supervisory Board, costs of periodic owners’ inspections in the Company, etc.
Selling and distribution costs
The company has not recognised any selling and distribution costs in 2024 and 2023.
Annual Report 2024
Arctic Paper SA
9
Other operating income and expenses
Other operating income amounted to PLN 104,497 thousand in 2024, an increase of 32% y/y. The increase in revenue in 2024 was due to the
reversal of the impairment allowance on the shares in Arctic Paper Investment AB in the amount of PLN 104,775 thousand in 2024, and in 2023
the reversal of the impairment loss amounted to PLN 80,208 thousand.
In 2024, there was an increase in other operating expenses, which reached PLN -257 thousand (in 2023 it was PLN -46 thousand).
Finance income and finance costs
In 2024, the finance income amounted to PLN 7,362 thousand and was by PLN 1,923 thousand higher than generated in the equivalent period
last year. The increase in finance income was mainly due to higher interest on bank balances. At the same time, there was an increase of finance
costs from PLN 4,818 thousand in 2023 to PLN 5,755 thousand. It resulted from the higher guarantee paid to the companies.
Profitability analysis
EBITDA in 2024 was PLN 191,601 thousand, while in was PLN 224,692 thousand in 2023. PLN 248,220 thousand).
EBIT in 2024 amounted to PLN 192,024 thousand as compared to PLN 248,537 thousand in the previous year.
The net profit in 2024 amounted to PLN 197,292 thousand as compared to the net profit of PLN 251,216 thousand in 2023.
PLN ‘000
2024
2023
Change %
2024/2023
Profit on sales
110 754
182 727
-39%
% of sales revenue
89,42
93,47
(4.1) p.p.
EBITDA
191 601
248 220
-23%
% of sales revenue
154,70
126,98
27,7 p.p.
EBIT
192 024
248 537
-23%
% of sales revenue
155,04
127,14
27,9 p.p.
Net profit
197 292
251 216
-21%
% of sales revenue
159,29
128,51
30,8 p.p.
Return on equity / ROE (%)
20,5
30,0
(9.5) p.p.
Return on assets / ROA (%)
14,7
19,1
(4.4) p.p.
The Company uses alternative performance measurements when describing its financial position. In the opinion of the Management Board, these
selected indicators provide valuable information on the financial and operational situation (in addition to the data provided by the Company in its
financial statements), as well as facilitating the analysis and evaluation of the Company’s financial results over the individual reporting periods.
The Company presents alternative performance measurements as they represent standard measures and ratios commonly used in financial
analysis, however, these ratios may be calculated and presented differently by different companies. Therefore, the Issuer provides the exact
definitions used by the Company in its reporting process. The selection of alternative performance measures was preceded by a thorough analysis
of their usefulness in terms of providing shareholders, analysts and investors with useful information on financial position and financial efficiency,
which the Company believes allows for an optimal assessment of its financial results.
The ratios presented by the Company were calculated according to the formulas described below.
*EBITDA – Operating profit from continuing operations plus depreciation and amortisation and impairment allowances from continuing operations
* Return on equity, return on equity, ROE – net profit/(loss) to equity
* Return on assets, return on assets, ROA – the ratio of net profit/(loss) to total assets
In 2024, return on equity was 20.5% while in 2023 it was 30.0%. Return on assets fell by 4.4 p.p., where the return on assets was 14.7 per cent
in 2024 and 19.1 per cent in 2023.
Annual Report 2024
Arctic Paper SA
10
Selected items of the statement of financial position
PLN ‘000
31.12.2024
31.12.2023
Change
31.12.2024-31.12.2023
Non-current assets
1 130 202
989 972
140 230
of which:
Loans granted
50 084
25 356
25 862
Receivables
23 724
18 126
5 598
Other current assets
10 546
15 436
(4 890)
Cash and cash equivalents
176 985
264 150
(87 165)
Total assets
1 341 458
1 287 686
53 772
Equity
964 703
837 975
126 728
Current liabilities
335 192
405 043
(69 851)
of which:
Interest-bearing debt
304 269
380 057
(75 788)
Non-current liabilities
41 563
44 668
(3 105)
of which:
Interest-bearing debt
38 602
42 080
(3 478)
Total equity and liabilities
1 341 458
1 287 686
53 772
As at 31 December 2024, total assets amounted to PLN 1,341,458 thousand as compared to PLN 1,287,686 thousand at the end of 2023.
Non-current assets
The company’s non-current assets include property, plant and equipment, intangible assets, shares in subsidiaries and joint ventures, other
financial assets and deferred tax assets. At the end of December 2024 non-current assets accounted for about 84.3% of total assets and their
share in total assets increased as compared to December 2023 (76.9%).
Current assets
As at the end of December 2024, current assets amounted to PLN 211,256 thousand as compared to PLN 297,712 thousand at the end of 2023.
Equity
Shareholders’ equity at the end of December 2024 amounted to PLN 964,703 thousand, compared with PLN 837,975 thousand at the end of
2023.
The increase in equity is due to the net profit generated in 2024.
Current liabilities
As at the end of September 2024, current liabilities amounted to PLN 335,192 thousand (25.0% of balance sheet total) as compared to PLN
405,043 thousand as at the end of 2023 (31.5% of balance sheet total). The decrease in current liabilities is due to a decrease in cash-pool
liabilities.
Non-current liabilities
As at the end of March 2024, non-current liabilities amounted to PLN 41,563 thousand (3.1% of balance sheet total) as compared to PLN 44,668
thousand as at the end of 2023 (3.5% of balance sheet total).
Debt analysis
2024
2023
Change %
2024/2023
Debt to equity ratio (%)
39,1
53,7
(14.6) p.p.
Equity to non-current assets ratio (%)
85,4
84,6
0,7 p.p.
Interest-bearing debt-to-equity ratio (%)
35,5
50,4
(14.8) p.p.
* Equity debt ratio (%) – total liabilities to equity ratio
* Equity to non-current assets ratio – equity to non-current assets ratio
* Equity debt to interest-bearing debt – the ratio of interest-bearing debt and other financial liabilities to equity
As at the end of December 2024, the equity debt ratio was 39.1% and was lower by 14.6 p.p. compared to the end of December 2023. The ratio
of non-current assets to equity increased slightly from 84.6% at the end of 2023 to 85.4% at the end of December 2024. The debt-to-equity ratio
with interest-bearing debt was 35.5 per cent at the end of 2024, down 14.8 p.p. compared to 2023.
Annual Report 2024
Arctic Paper SA
11
Liquidity analysis
2024
2023
Change %
2024/2023
Current ratio
0,63x
0,80x
(0.0)
Quick ratio
0,63x
0.74x
(0.1)
Cash solvency ratio
0,53x
0.65x
(0.1)
* Current ratio – the ratio of current assets to current liabilities
* Quick ratio – the ratio of current assets minus inventory and short-term accruals and deferred income to current liabilities
* Cash solvency ratio – the ratio of the sum of cash assets and other cash assets to current liabilities
The current ratio and the quick ratio were 0.63 and 0.63, respectively, at the end of December 2024, lower than at the end of December 2023.
The cash solvency ratio decreased compared to December 2023 and stood at 0.53 at the end of December 2024.
Selected items of the statement of cash flow
PLN ‘000
2024
2023
Change %
2024/2023
Cash flows from operating activities
(5 596)
298 125
(101.9)
of which:
Gross profit
193 631
249 158
(22.3)
Depreciation/amortisation
423
317
33,4
Changes to working capital
3 416
(4 534)
(175.3)
Net interest and dividends
3 764
3 713
1,4
Change in loans granted to subsidiaries
(20 651)
130 626
(115.8)
Impairment (reversal)
(104 775)
(80 208)
30,6
Other adjustments
(81 404)
(948)
8 490,2
Cash flows from investing activities
(5 530)
(26 624)
(79.2)
Cash flows from financing activities
(75 058)
(218 489)
(65.6)
Total cash flows
(86 184)
53 011
(262.6)
Cash flows from operating activities
In 2024, net cash flow from operating activities was PLN - 5,596 thousand, a significant decrease compared to PLN 298,125 thousand in 2023.
This decrease was mainly due to lower gross profits, lower dividends received from subsidiaries and changes in cashpooling.
Cash flows from investing activities
In 2024, net cash flow from investing activities amounted to PLN - 5,530 thousand. This amount was mainly influenced by capital contributions to
Arctic Power Sp. z o.o. in the amount of PLN 5,000 thousand and the purchase of property, plant and equipment.
Cash flows from financing activities
In 2024, cash flows from financing activities amounted to PLN -75,058 thousand as compared to PLN -218,489 thousand in 2023. In 2024, flows
from financing activities were related to the payment of dividends, to the repayment of existing bank loans and to the receipt of an additional loan.
Relevant information and factors affecting the financial results and the assessment of the financial standing
Key factors affecting the performance results
The operations of the Company are indirectly affected by factors that have direct impact on the business of the Group’s operational units – Paper
Mills and the factors include:
‒ macroeconomic and other economic factors,
‒ demand growth for products based on natural fibres,
‒ reduced demand for certain paper types,
‒ fluctuations of paper prices,
‒ pulp price fluctuations for Paper Mills, timber for Pulp Mills and energy prices,
‒ FX rates fluctuation.
The impact of the factors on the Group’s business was described in detail in the consolidated Annual Report for 2024.
Annual Report 2024
Arctic Paper SA
12
Unusual events and factors
In the period under the report there were no unusual events and/or other factors affecting Arctic Paper SA
Other material information
Joint investments
In March 2024, the company granted a loan of PLN 9,900 thousand to Kostrzyn Packaging Sp. z o.o. The funds were earmarked for the purchase
of machinery and property, plant and equipment to increase efficiency and support the further technological development of the company.
In H2 2024, Arctic Paper SA granted a loan to Arctic Paper Grycksbo AB (APG) to finance the construction costs of a biomass drying and pellet
production facility in the amount of PLN 24,869 thousand. The loan was provided under the revolving credit facility as an additional loan.
In November 2024, a change was made to the structure of Arctic Power Sp. z o.o., resulting in a capital surcharge of PLN 5,000 thousand. These
funds were used to finance ongoing investment projects in the energy sector. In addition, a loan of PLN 14,300 thousand was granted for the
purchase of a photovoltaic farm in Garwolin.
Other information
From 1 January 2022, the Company is part of the Arctic Paper Tax Group (PGK). The Tax Group was concluded for a period of three fiscal years
starting from 1 January 2022. PGK comprises Arctic Paper SA as the parent company and Arctic Paper Kostrzyn SA as a subsidiary. At the end
of 2024, the Tax Group amended the agreement to extend the life of the group indefinitely. The PGK agreement was notified by Arctic Paper SA,
designated as the parent company of the Arctic Paper Tax Group, at the First Mazovian Tax Office.
Factors affecting the development of the Company
Information on market trends and in factors affecting the Company’s financial results over the next year is provided in the consolidated Annual
Report. Below is a description of risk factors that directly affect the Company’s business, other risk factors affecting the Company via its
subsidiaries, are described in detail in the consolidated Annual Report.
Risk factors
Risk factors related to the environment in which the Company operates
The sequence in which the risk factors are presented below does not reflect the likelihood of occurrence, extent or materiality of the risks.
Risk of changing legal regulations
The Company operates in a legal environment characterised with a high level of uncertainty. The regulations affecting our business have been
frequently amended and there are no consistent interpretations which generates a risk of violating the existing regulations and the resultant
consequences even if such breach was unintentional.
Risk related to disadvantageous global economic situation
The global economic situation is affected by the effects of the recent financial crisis, in particular the continued loss of trust on the part of consumers
and entrepreneurs, concerns related to the availability and increasing costs of loans, decrease in consumer and investment spending, volatility
and strength of capital markets. We anticipate that the difficult global economic conditions may result in an overall decreased of demand and
average prices of high quality paper which in turn may adversely affect the dividends received from subsidiaries.
FX risk
revenue, expenses and results of the Company are exposed to FX risk, in particular relating to exchange rates of PLN and SEK to EUR, GBP and
other currencies. Our Group exports a majority of its produced paper to European markets, generating a material part of its sales revenue in EUR,
GBP, PLN and SEK. Sales revenue of pulp in the Pulp Mills is subject to USD fix risk. The purchase costs of materials for paper production, in
particular pulp for paper mills are paid primarily in USD and EUR. By making APSA’s income dependent on dividends from subsidiaries, the
Group’s situation affects APSA’s bottom line. Additionally, we hold loan liabilities mainly in PLN, EUR and SEK. The currency used in the financial
statements is PLN, and therefore the revenue, costs and results of the subsidiaries located abroad (and the fact that the company has a Swedish
branch, whose financial figures are translated from SEK to PLN) are dependent on the development of exchange rates. Thus FX rate fluctuations
may have a strong adverse effect on the results, financial conditions and prospects of the Company.
Interest rate risk
The Company is exposed to interest rate risk mainly due to its existing interest-bearing debt. This risk arises from fluctuations in reference interest
rates such as WIBOR for PLN debt, EURIBOR for EUR debt and. The interest rate for the PLN funds made available under the cash management
system agreement for the group of accounts was set at WIBOR 1M+1.50% per annum if the subrogation creditor is the Pool Leader and WIBID
O/N x 0.5 per annum if the subrogation creditor is a Participant other than the Pool Leader. The interest rate for funds in EUR under the cash
concentration agreement was set at EURIBOR 1M+1.90% per annum if the subrogation creditor is the Pool Leader and 0% per annum if the
subrogation creditor is a Participant other than the Pool Leader. Adverse changes in interest rates could adversely affect the entity’s results,
financial position and prospects.
The objectives and methods of financial risk management in the Company along with hedging methods of major transactions are detailed in note
6.1 to the separate financial statements.
Annual Report 2024
Arctic Paper SA
13
Risk factors relating to the business of the Company
The sequence in which the risk factors are presented below does not reflect the likelihood of occurrence, extent or materiality of the risks.
Risk related to maintaining and retaining of management staff and qualified staff
The achievement of strategic objectives by the Company is subject to the know-how and experience of the professional management staff and
the ability to hire and retain qualified specialists. The Company may not be able to retain its management staff and other key specialists or to
attract new specialists. If the Company is not able to recruit and retain management staff and personnel, this may adversely affect its business,
operational results and financial condition.
Risk related to the debt of the Company
Arctic Paper has mainly debt under a loan agreement with a consortium of banks (Pekao SA, Santander Bank SA and BNP Paribas SA of 2 April
2021) and under lease agreements.
Failure to meet the Company’s obligations, including the level of agreed financial ratios (covenants) under the loan agreements, results in an
event of default. Events of default may in particular result in demand for repayment of our debt, banks taking control over important assets like
Paper Mills or Pulp Mills and loss of other assets which serve as collateral, deterioration of creditworthiness and lost access to external funding
which will be converted into lost liquidity and which in turn may materially adversely affect our business and development prospects and our stock
prices.
Risk related to the capacity of the Company to pay dividend
The Issuer is a holding company and therefore its capacity to pay dividend is subject to the level of potential disbursements from its subsidiaries
involved in operational activity, and the level of cash balances. Certain subsidiaries of the Group involved in operational activity may be subject to
certain restrictions concerning disbursements to the Issuer. No certainty exists that such restrictions will have no material impact on the business,
results on operations and capacity of the Company to distribute dividend.
In connection with the term and revolving loan agreements, and the agreement between creditors signed on 2 April 2021, the Company’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 loan agreement) and there being no event of default (as that term is defined in the term and revolving loan agreement).
Supplementary information
The Management Board position on the possibility to achieve the projected financial results published earlier
The Management Board of Arctic Paper SA did not publish projections of financial results for 2024 and has not published and does not intend to
publish projections of financial results for 2025.
Principles for the preparation of annual financial statements
The Company’s financial statements for the period from 1 January 2024 to 31 December 2024 have been prepared on the basis of International
Financial Reporting Standards and related interpretations promulgated as regulations of the European Commission. The financial statements
have been prepared on a going concern basis for the foreseeable future. As at the date of the financial statements, there are no circumstances
indicating a threat to the Issuer’s going concern. Details of the preparation of the separate and consolidated financial statements are discussed in
note 2 to the 2024 Separate Financial Statements.
Dividend information
Dividend is paid based on the net profit disclosed in the separate annual financial statements of Arctic Paper SA after covering losses carried
forward from the previous years.
In accordance with provisions of the Code of Commercial Companies and Partnerships, the parent company is obliged to establish supplementary
capital to cover potential losses. At least 8% of the profit for the financial year disclosed in the separate financial statements of the parent company
should be transferred to the category of capital until the capital has reached the amount of at least one third of the share capital of the parent
company. The Company has complied with this requirement. The use of supplementary capital and reserve funds is determined by the General
Meeting; however, a part of reserve capital equal to one third of the share capital can be used solely to cover the losses disclosed in the separate
financial statements of the parent company and cannot be distributed to other purposes.
As on the date hereof, the Company had no preferred shares.
In 2024, the Company paid a total dividend of PLN 69,287,783, or PLN 1.40 gross per share.
The possibility of disbursement of potential dividend by the Company to its shareholders depends on the level of payments 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
2024.
On 18 February 2025, the Management Board of the Parent Company, taking into account the preliminary financial results of the Parent Company
and the Arctic Paper SA Group for 2024, 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 2024, in the total amount of PLN 48,501,448.10, i.e. PLN 0.70 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 2024 profit and the payment of the dividend will be taken by the Annual General Meeting.
Annual Report 2024
Arctic Paper SA
14
Changes to the bodies of Arctic Paper SA
As at 31 December 2024, the Supervisory Board of the Parent Company (appointed on 22 June 2021) comprised:
‒ 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;
Until the date hereof, there were no changes to the composition of the Supervisory Board of the Parent Company.
As at 31 December 2024, the Parent Company’s Management Board (appointed by resolution of 9 May 2023) comprised:
‒ 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.
Until the date hereof, there were no changes in the composition of the Management Board of the Parent Company.
Changes to the share capital of Arctic Paper SA
In 2024 there were no changes to the Company’s share capital.
Purchase of treasury shares
In 2024 and 2023 the Company did not acquire any treasury stock.
Remuneration paid to Members of the Management Board and the Supervisory Board
The table below presents information on the total amount of remuneration and other benefits paid or payable to members of the Management
Board and of the Supervisory Board of the Parent Company in the period from 1 January 2024 to 31 December 2024 (data in full PLN).
Managing and supervising persons
Remuneration for the functions performed at
Arctic Paper SA
Retirement plan
Other
Total
Management Board
Michał Jarczyński
1 134 000
434 577
1 568 577
Katarzyna Wojtkowiak
805 020
170 439
975 459
Fabian Langendskiold
23 671
23 671
2 567 707
Supervisory Board
Per Lundeen
369 935
369 935
Roger Mattsson
261 935
261 935
Thomas Onstad
187 097
187 097
Zofia Dzik
224 516
224 516
Anna Jakubowski
187 097
187 097
1 230 581
Agreements with Members of the Management Board guaranteeing financial compensation
As at 31 December 2024 and as at the approval date of this Annual Report, Members of the Management Board are entitled to compensation in
case of their resignation or dismissal from their respective positions with no valid reason or when they are dismissed or their employment is
terminated as a result of a merger of the Issuer by take-over. The amount of such compensation will correspond to their remuneration for 6 to
24 months.
Annual Report 2024
Arctic Paper SA
15
Changes in holdings of the Issuer’s shares or rights to shares by persons managing and supervising Arctic Paper SA
Managing and supervising persons
Number of shares
or rights to shares
as at 31.12.2024
Number of shares
or rights to shares
as at 30.09.2024
Number of shares
or rights to shares
as at 08.08.2024
Change
Management Board
Michał Jarczyński
5 572
5 572
5 572
-
Katarzyna Wojtkowiak
-
-
-
-
Fabian Langenskiöld
900
900
900
-
Supervisory Board
Per Lundeen
34 760
34 760
34 760
-
Thomas Onstad
5 323 658
5 323 658
5 623 658
(300 000)
Roger Mattsson
-
-
-
-
Zofia Dzik
-
-
-
-
Anna Jakubowski
-
-
-
-
Management of financial resources
As of the date hereof, the Company held sufficient funds and creditworthiness to ensure financial liquidity of Arctic Paper SA
Capital investments
In 2024, the Company used short-term deposits with a maturity of up to six months.
Information on financial instruments
Information on financial instruments on:
1. the risks of: price changes, credit, material disruption of cash flows and loss of liquidity to which the Company is exposed; and
2. the entity’s financial risk management objectives and policies, including its methods of hedging significant types of forecast transactions for
which hedge accounting is used, are disclosed in the consolidated financial statements in notes 5 and 6.
Information on sureties, guarantees and contingent liabilities
In connection with the term and revolving loan agreements signed on 2 April 2021, on 11 May 2021 the Company signed agreements and
declarations pursuant to which, in favour of Bank Santander Bank Polska SA, acting as Security Agent, collateral was established for the above
receivables and other claims, i.e.
1. under Polish law – Collateral Documents establishing the following Collateral:
➢ financial and registered pledges on all shares or interests held by the Company and Arctic Paper Kostrzyn SA registered in Poland, with
the exception of the Company’s shares;
➢ mortgages on all real properties located in Poland and owned by the Guarantors;
➢ registered pledges on all material rights and movable assets owned by the Company and the Guarantors, constituting an organised part
of enterprise, located in Poland (with the exception of the assets listed in the Loan Agreement);
➢ assignment of (existing and future) insurance policies relating to the assets of the Company Arctic Paper Kostrzyn SA (with the exception
of the insurance policies listed in the Loan Agreement);
➢ declarations by the Company and Arctic Paper Kostrzyn SA on voluntary submission to enforcement, in the form of a notary deed;
➢ financial pledges and registered pledges on the bank accounts of the Company and Arctic Paper Kostrzyn SA registered in Poland (the
pledges relate to current and future bank accounts; in the event of an event of default, in the event that the pledged receivable or part
thereof becomes due, the Company may not draw funds from the pledged receivable, nor may it instruct the bank maintaining the account
to disburse the funds);
➢ powers of attorney to the Polish bank accounts of the Company and Arctic Paper Kostrzyn SA;
➢ civil surety for liabilities granted by Arctic Paper SA, Arctic Paper Kostrzyn SA, Arctic Paper Munkedals AB, Arctic Paper Grycksbo AB
2. under Swedish law – Collateral Documents establishing the following Collateral:
➢ pledges over all the Company’s and Arctic Paper Munkedals AB, Arctic Paper Grycksbo AB shares or interests registered in Sweden
➢ mortgages on all real properties located in Sweden and owned by Arctic Paper Munkedals AB, Arctic Paper Grycksbo AB, provided that
only existing mortgage deeds are subject to such security;
➢ corporate mortgage loans granted by the Guarantors registered in Sweden as long as such collateral covers solely the existing mortgage
deeds;
➢ assignment of (existing and future) insurance policies covering the assets of Arctic Paper Munkedals AB and Arctic Paper Grycksbo AB
(with the exception of insurance policies listed in the Loan Agreement);
Annual Report 2024
Arctic Paper SA
16
➢ pledges on Swedish bank accounts of Arctic Paper Munkedals AB and Arctic Paper Grycksbo AB, as long as such collateral is without
prejudice to free management of funds deposited on bank accounts until an event of default specified in the Loan Agreement.
In the period covered with this report, Arctic Paper SA and its subsidiaries did not grant or receive any guarantee to loans or borrowings, and did
not grant any guarantees – totally to one entity or a subsidiary of such entity – with the total value exceeding equivalent of 10% of the Company’s
equity.
Material off-balance sheet items
Information on off-balance sheet items is provided in the Company’s separate financial statements for 2024 in note 4.9.
Assessment of the feasibility of investment plans
Arctic Paper SA plans no material investments to be made in 2025. Material investments are carried out by the Issuer’s subsidiaries, in particular
the Paper Mills as described in the Consolidated Annual Report for 2024.
Information on significant court and arbitration proceedings and proceedings pending before public administrative authorities
In the period covered by this report, Arctic Paper SA and its subsidiaries were not a party to any material proceedings pending before a court,
a competent authority for arbitration proceedings or a public administration authority.
Information on transactions with related parties executed on non-market terms and conditions
During the period under report, Arctic Paper SA and its subsidiaries did not execute any material transactions with related parties on non-market
terms and conditions.
Information on agreements resulting in changes to the proportions of share holdings
The Issuer is not aware of any agreements that may result in future changes in the proportions of shares held by existing shareholders.
Information on remuneration of the entity authorised to audit the financial statements
On 22 February 2023, the Company’s Supervisory Board decided to appoint PricewaterhouseCoopers Polska Spółka z ograniczoną
odpowiedzialnością Audyt Sp.k. as the auditor of the Company and the Arctic Paper SA Group to audit the financial statements for 2023 and
2024.
On 22 February 2023, the Company’s Supervisory Board, based on the Audit Committee’s recommendation on the selection of an auditor, decided
to select PricewaterhouseCoopers Polska Spółka z ograniczoną odpowiedzialnością Audyt Sp.k. as the auditor of the Company and the Arctic
Paper SA Group to audit the financial statements for 2023 and 2024. The recommendation of the Audit Committee was issued as a result of the
selection procedure in compliance with the “Policy and procedure for the selection of the audit firm for the statutory and voluntary audit of the
consolidated and separate financial statements of Arctic Paper SA with its registered office in Kostrzyn nad Odrą”. On 13 July 2023, an agreement
was concluded with PricewaterhouseCoopers Polska spółka z ograniczoną odpowiedzialnością Audyt Sp.k. on the audit of the Employer’s financial
statements for the financial periods from 1 January 2023 to 31 December 2023 and for the financial periods from 1 January 2024 to 31 December
2024.
Headcount
Information on the headcount is provided in note 7.2 to the separate financial statements for 2024.
Information on the preparation of a separate group report on non-financial information
The Company has prepared the non-financial information referred to in Article 49b(2) to (8) of the Accounting Act in the form of a separate
document entitled “Sustainability Report 2024” of the Arctic Paper SA Group. (hereinafter referred to as the CSR Report), in accordance with the
requirements set out in this Act. This document, once published, together with the Annual Report and the Consolidated Annual Report for 2024,
will be posted on the Company’s website in accordance with Article 49b(6) of the aforementioned Act.
Statement on the application of the Corporate Governance Rules
Corporate governance rules
On 29 March 2021, the Supervisory Board of the Warsaw Stock Exchange (Giełda Papierów Wartościowych w Warszawie SA) by Resolution
No. 13/1834/2021 adopted new corporate governance rules for companies listed on the WSE Main Market – “Best Practice of GPW Listed
Companies (Best Practice 2021, DPSN2021).
Best Practice 2021 came into force on 1 July 2021.
Application by companies of the corporate governance rules contained in the Best Practice is voluntary, but reporting on their application is an
obligation of every listed company, enshrined in the Regulations of the WSE. Companies had to publish their reports on the application of
DPSN2021 by 31 July 2021.
The text of the “Best Practice of WSE Listed Companies 2021” is available on the websites of the Stock Exchange SA and the Company:
https://www.gpw.pl/pub/GPW/files/PDF/dobre_praktyki/DPSN21_BROSZURA.pdf
https://www.arcticpapergroup.pl/globalassets/arcticpapergroup.com/02-about/04-corporate-governance/dpsn21_broszura_wersja_do_druku.pdf
Annual Report 2024
Arctic Paper SA
17
On 22 June 2022, the General Meeting of Shareholders of Arctic Paper SA adopted the "Diversity Policy for the Management Board and
Supervisory Board of Arctic Paper SA" by Resolution No. 21/2022.
The policy applies to the Management Board and the Supervisory Board of Arctic Paper SA Its purpose is to regulate the recruitment and election
of members of the Company’s Management and Supervisory Boards and to ensure non-discrimination and equal opportunities in the process.
In accordance with the regulations of the Policy, candidates are assessed in accordance with the principles of independence and merit and
diversity criteria. The Company endeavours to ensure that the persons selected have a diverse range of education, experience, knowledge and
skills, gender and age.
The functions of the members of the Management Board and the Supervisory Board shall be entrusted to specific persons, irrespective of their
gender, but in accordance with the professional preparation and experience of these persons. The composition of the Company’s bodies largely
depends on the decisions of the Company’s shareholders.
The Company aims to keep the proportion of women on the Company’s boards to no less than 30%. This aspect is taken into account in the
planned recruitment processes.
Information on the extent the Issuer waived the provisions of the corporate governance rules
Arctic Paper SA was striving at applying corporate governance rules as set forth in the document “Best Practice of GPW Listed Companies 2021”.
In 2024, Arctic Paper SA did not apply the following rules:
Best practice – information policy, communication with investors
Rule 1.3.2
“The company also includes ESG topics in its business strategy, in particular covering:
social and labour matters, concerning, inter alia, measures taken and planned to ensure gender equality, sound working conditions, respect for
employees’ rights, dialogue with local communities, customer relations.”
Explanation: a detailed development of ESG issues covering the entire capital group is presented by the Company in the CSR reports published
each year. CSR reports take into account environmental, social, employee and sustainable development issues, including, among others,
measures and established goals, description of undertaken and planned actions in the ESG area.
Rule 1.4.2
“In order to ensure proper communication with stakeholders regarding the business strategy adopted, the company publishes on its website
information on the assumptions of its strategy, measurable objectives, including in particular long-term objectives, planned activities and progress
in its implementation, defined by means of metrics, financial and non-financial. Information on ESG strategies should, among other things:
provide the value of the pay equity ratio paid to its employees, calculated as a percentage of the difference between average monthly pay (including
bonuses, prizes and other allowances) of women and men for the last year, and provide information on actions taken to eliminate possible
inequalities in this respect, together with a presentation of the risks involved and the time horizon over which equality is planned to be achieved.
Explanation: a detailed development of ESG issues covering the entire capital group is presented by the Company in the CSR reports published
each year. CSR reports take into account environmental, social, employee and sustainable development issues, including, among others,
measures and established goals, description of undertaken and planned actions in the ESG area.
Best practice – systems and internal functions
Rule 3.3
“A company included in the WIG20, mWIG40 or sWIG80 index shall appoint an internal auditor heading the internal audit function, who shall act
in accordance with internationally recognised standards of professional practice for internal auditing. In other companies where no internal auditor
meeting the aforementioned requirements has been appointed, the audit committee (or the supervisory board if it performs the functions of an
audit committee) shall annually assess whether there is a need to appoint such a person.”
Explanation:
Given the size of the Company and the structure and nature of its business, the appointment of an internal auditor is not justified by the
assessments carried out by the Management Board and the Supervisory Board. Audit functions responsible for auditing the various divisions of
the operating companies have been established in the Company’s group entities.
Rule 3.10
“At least every five years, a company included in the WIG20, mWIG40 or sWIG80 index shall have its internal audit function reviewed by an
independent auditor selected with the participation of the audit committee.”
Explanation:
Given the size of the Company and the structure and nature of its business, the Management Board, the Supervisory Board and the Audit
Committee acting within it will consider the need for an independent audit in the future.
Annual Report 2024
Arctic Paper SA
18
Best practice – General Meeting and relations with shareholders
Rule 4.1
“The company should enable shareholders to participate in a general meeting using electronic means of communication (e- meeting) if this is
justified by the expectations of shareholders communicated to the company, as long as it is able to provide the technical infrastructure necessary
for holding such a general meeting.”
Explanation:
Given the need for many technical and organisational steps and the associated costs and legal risks, the Company has not decided to hold an
electronic general meeting at this time.
Rule 4.3
“The company shall provide a publicly available real-time broadcast of the general meeting.”
Explanation:
Taking into account the costs and legal risks, the Company has not decided at this time to carry out a general broadcast of the General Meeting.
The Company will consider this possibility in the future.
Internal control and risk management systems with reference to the development processes of financial statements
The Management Board of Arctic Paper SA is responsible for the internal control system in the Company and for its efficiency in the development
process of financial statements and interim reports, prepared and published in compliance with the rules of the Regulation of the Minister of
Finance on current and periodical disclosure by issuers of securities and conditions to recognise as equivalent the information that is required by
the law in Non-Member States of 29 March 2018. The preparation of the Group’s financial statements and interim reports is the responsibility of
the Company’s finance department, headed by the Chief Financial Officer. The Company prepares its financial statements and interim reports
based on the procedures in force at Arctic Paper SA for the preparation and publication of interim reports. The financial data underlying the
preparation of the Company’s financial statements is derived from the accounting system. The Management Board, after the accounting closure
of each calendar month, analyses the company’s financial performance in comparison with the budgeted assumptions and the results achieved
in the previous reporting year.
The Company’s Management Board systematically evaluates, the quality of the internal control and risk management systems in relation to the
financial reporting process. On the basis of such review, the Company’s Management Board found that as at 31 December 2024 there were no
weaknesses that could materially affect the effectiveness of internal control with respect to financial reporting.
Shareholders that directly or indirectly hold significant packages of shares
Information on the shareholders that directly or indirectly hold large packages of shares is presented in the table below – the table presents the
situation as at the date of approval of this report.
Shareholder
Number of shares
Share in the share capital
[%]
Number of votes
Share in the total number
of votes
[%]
Thomas Onstad
47 298 548
68,26%
47 298 548
68,26%
indirectly via
41 974 890
60,58%
41 974 890
60,58%
Nemus Holding AB
41 374 890
59,71%
41 374 890
59,71%
other entity
600 000
0,87%
600 000
0,87%
directly
5 323 658
7,68%
5 323 658
7,68%
Other
21 989 235
31,74%
21 989 235
31,74%
Total
69 287 783
100,00%
69 287 783
100,00%
Treasury shares
-
0,00%
-
0,00%
Total
69 287 783
100,00%
69 287 783
100,00%
Securities with special control rights
There are no securities in the Company with special control rights – in particular, no shares in the Company are privileged.
Information on major restrictions on transfer of title to the Issuer’s securities and all restrictions concerning the exercising of voting
rights
The Company’s Articles of Association do not provide for any restrictions concerning transfer of title to the Issuer’s securities.
With the exception of restrictions on the transfer and acquisition of the Company’s shares that arise under common law, there are no restrictions
on the transfer of ownership of the Company’s securities.
Annual Report 2024
Arctic Paper SA
19
The Company’s Articles of Association do not provide for any restrictions on the exercise of voting rights on Arctic Paper SA shares.
Description of the principles of amending the Issuer’s Articles of Association
Changes to the Company’s Articles of Association fall within the sole competences of the General Meeting.
There were no changes to the Issuer’s Articles of Association in 2024.
Unless the Code of Commercial Companies and Partnerships or the Articles of Association of the Company provide otherwise, resolutions of the
General Meeting require an absolute majority of votes;
Description of the functioning of the General Meeting
The rules of procedure of the General Meeting and its core competences result straight from applicable laws and are partly incorporated in the
Company’s Articles of Association.
The Company’s Articles of Association are available at:
https://www.arcticpapergroup.pl/globalassets/arcticpapergroup.com/02-about/04-corporate-governance/corporate-
documents/pl/arctic_paper_statut_tekst_jednolity_aktualny_2019_pl.pdf
General Meetings are held in accordance with the following basic rules:
‒ General Meetings are held in the Company’s offices or in Warsaw;
‒ General Meetings may be ordinary or extraordinary;
‒ Ordinary General Meetings shall be held within six months after the end of the financial year;
‒ General Meetings are opened by the Chairperson of the Supervisory Board or a person designated by him/her which is followed by election
of the Chairperson of the General Meeting;
‒ Voting shall be open unless a Shareholder demands a secret ballot or a secret ballot is required by the provisions of the Code of Commercial
Companies and Partnerships;
‒ Unless the Code of Commercial Companies and Partnerships or the Articles of Association of the Company provide otherwise, resolutions of
the General Meeting require an absolute majority of votes;
‒ In compliance with the Company’s Articles of Association, the following matters fall within the exclusive competences of the General Meeting:
➢ considering and approving the Management Board’ report on the Company’s and Group’s activities and the Company’s financial
statements and the Group’s consolidated financial statements for the previous financial year;
➢ granting a vote of approval to members of the Management Board and members of the Supervisory Board for the performance of their
duties;
➢ decisions concerning distribution of profit or coverage of losses;
➢ changes to the business objects of the Company;
➢ changes to the Articles of Association of the Company;
➢ increase or decrease in the Company’s share capital;
➢ merger of the Company with another company or other companies, split of the Company or transformation of the Company;
➢ dissolution and liquidation of the Company;
➢ issues of convertible bonds or pre-emption bonds and issues of subscription warrants;
➢ purchase and sale of real properties ;
➢ disposal and lease of the entire enterprise or an organised part thereof or establishment of limited rights in rem thereon;
➢ all other issues for which the Articles of Association or the Code of Commercial Companies and Partnerships require a resolution of the
General Meeting.
General Meetings may approve resolutions in the attendance of minimum one half of the Company’s share capital.
General Meetings approve resolutions with an absolute majority of votes unless the Articles of Association or applicable regulations require
a qualified majority.
The shareholders’ rights and the way to enforce them result explicitly from law that has been partly incorporated in the Company’s Articles of
Association.
Operation of the Issuer’s managing and supervising bodies and its committees as well as information on the composition of those
bodies
Management Board
Composition of the Management Board
‒ The Management Board is composed of one to five members, including President of the Management Board;
‒ The Management Board is appointed and dismissed by the Supervisory Board for a joint term of office;
‒ The term of office of members of the Management Board is 3 (three) years;
‒ When the Management Board is composed of more than one person, the Supervisory Board – upon a proposal by the President – may appoint
up to three Vice-Presidents from among members of the Management Board. Vice-Presidents may be dismissed subject to a resolution of
the Supervisory Board;
‒ A member of the Management Board may be dismissed by the Supervisory Board at any time;
‒ A member of the Management Board may be dismissed or suspended in their duties at any time by the General Meeting.
Annual Report 2024
Arctic Paper SA
20
Core competences of the Management Board
‒ The Management Board directs the affairs of the Company and represents the Company;
‒ If the Management Board is composed of more than one person, declarations of intent on the Company’s behalf shall be made by the President
of the Management Board individually or two Members of the Management Board acting jointly or a Member of the Management Board acting
jointly with a Proxy;
‒ The Management Board is obliged to exercise their duties with due diligence and comply with law, the Company’s Articles of Association,
approved regulations and resolutions of the Company’s bodies; decisions shall be taken in line with reasonable economic risk with a view to
the interests of the Company and its shareholders;
‒ The Management Board is obliged to manage the assets and business of the Company and perform its duties subject to due diligence required
in business operations and subject to strict compliance with applicable laws, provisions of the Articles of Association and internal regulations
as well as resolutions approved by the General Meeting and the Supervisory Board;
‒ The Company’s Management Board shall not be entitled to take decisions on share issues and redemption.
‒ Each member of the Management Board shall be liable for any damage inflicted upon the Company as a result of their actions or omissions
breaching the provisions of law or the Company’s Articles of Association;
‒ The responsibilities of the Management Board include – in compliance with the Code of Commercial Companies and Partnerships – all affairs
of the Company not reserved to the General Meeting of the Supervisory Board;
‒ Guided with the interests of the Company, the Management Board defines the strategy and core objectives of the Company’s business;
‒ The Management Board shall comply with the regulations relating to confidential information within the meaning of the Act on Trading and to
comply with all the duties resulting therefrom.
Otherwise, the individual members of the Management Board shall be responsible for their running of the affairs of the Company as resulting from
the internal delegation of duties and functions approved by a decision of the Management Board.
The Management Board may approve resolutions at meetings or outside meetings in writing or with the use of direct means of remote
telecommunications. The Management Board approves resolutions with a majority of votes cast. Resolutions shall be valid if minimum one half of
members of the Management Board are present at the meeting. In case of equal number of votes, the President of the Management Board shall
have the casting vote.
The detailed mode of operation of the Management Board is set forth in the Regulations of the Management Board with its updated version
available at:
https://www.arcticpapergroup.pl/globalassets/arcticpapergroup.com/02-about/04-corporate-governance/corporate-documents/pl/regulamin-
zarzadu-ap-sa.pdf
The Management Board of the Company as at the publication hereof was composed as follows:
‒ Michał Jarczyński – President of the Management Board appointed on 1 February 2019;
‒ Katarzyna Wojtkowiak – Member of the Management Board appointed with effect from 9 May 2023;
‒ Fabian Langenskiöld – Member of the Management Board appointed with effect from 14 August 2023.
The Management Board was appointed for a new term of office by resolution of 9 May 2023.
Supervisory Board
Composition and organisation of the Supervisory Board
‒ The Supervisory Board is composed of 5 (five) to 7 (seven) members elected by the General Meeting for a joint three-year term of office.
a member of the Supervisory Board may be dismissed at any time;
‒ The Supervisory Board is composed of the Chairperson, Deputy Chairpersons and other members. The Chairperson of the Supervisory Board
and Deputy Chairperson are elected by the Supervisory Board from among its members at the first meeting and – if so required – during the
term of office in by-elections;
‒ Since the General Meeting approved resolutions on the first public issue of shares and having them listed, two members of the Supervisory
Board have to be independent;
‒ When an independent member of the Supervisory Board is nominated, resolutions on the following matters require consent of minimum one
independent member of the Supervisory Board:
➢ any benefits to be provided by the Company and any entity related to the Company for members of the Management Board;
➢ consent to the Company or its subsidiary to enter into a material agreement with a member of the Supervisory Board or the Management
Board and with their related parties, other than agreements concluded in the normal course of the Company’s business subject to normal
terms and conditions applied by the Company;
➢ election of auditor to perform audits of the Company’s financial statements;
‒ For the avoidance of doubt, it is assumed that loss of the independent status by a member of the Supervisory Board and failure to appoint an
independent member of the Supervisory Board shall not invalidate the decisions approved by the Supervisory Board. Loss by an Independent
Member of their independent status during the performance of their function of a member of the Supervisory Board shall not affect the validity
or expiry of their mandate;
‒ In case of expiry of the mandate of a Member of the Supervisory Board before the term of office, the other Members of the Supervisory Board
shall be entitled to co-opt a new Member of the Supervisory Board is such vacated position by way of a resolution approved with an absolute
majority of the other Members of the Supervisory Board. The mandate of such co-opted Member of the Supervisory Board shall expire if the
first Ordinary General Meeting to be held after such Member has been co-opted, fails to approve such Member. At any time, only two persons
elected as Members of the Supervisory Board in the co-option procedure and who were not approved as candidates by the Ordinary General
Meeting, may act as Members of the Supervisory Board. Expiry of the mandate of a co-opted Member of the Supervisory Board as a result of
Annual Report 2024
Arctic Paper SA
21
failure to approve such candidate by the Ordinary General Meeting may not be treated as finding any resolution approved with the participation
of such Member as invalid or ineffective.
‒ Chairperson and Deputy Chairperson of the Supervisory Board:
➢ maintain contact with the Company’s Management Board;
➢ manage the operations of the Supervisory Board;
➢ represent the Supervisory Board in external contacts and in contacts with the other bodies of the Company, including in contacts with
members of the Company’s Management Board;
➢ approve the presentation of initiatives and proposals submitted for meetings of the Supervisory Board;
➢ take other actions as specified in the Company’s Regulations and Articles of Association;
➢ Members of the Supervisory Board should not resign from their function during the term of office if that could prevent the operation of the
Supervisory Board, in particular prevent timely approval of major resolutions;
➢ Members of the Supervisory Board shall be loyal to the Company. Should a conflict of interests arise, members of the Supervisory Board
shall report it to other members of the Supervisory Board and refrain from participating in discussions and from voting on the issue to
which the conflict of interests is related;
➢ Members of the Supervisory Board shall comply with law, the Company’s Articles of Association and Regulations of the Supervisory
Board.
Competences of the Supervisory Board
‒ The Supervisory Board performs overall supervision over the business of the Company in all areas of its operation;
‒ The Supervisory Board approves resolutions, issues recommendations and opinions and submits proposals to the General Meeting;
‒ The Supervisory Board may not issue binding instructions to the Management Board concerning the management of the Company’s affairs;
‒ Disputes between the Supervisory Board and the Management Board shall be resolved by the General Meeting;
‒ In order to exercise their rights, the Supervisory Board may review the business of the Company in any respect, request the presentation of
any documents, reports and clarification from the Management Board and issue opinions on issues related to the Company and submit
proposals and initiatives to the Management Board;
‒ Apart from other issues specified in law or in the Company’s Articles of Association, the competences of the Supervisory Board include, inter
alia:
➢ review of the financial statements of the Company;
➢ review of the Management Board’s report from operations of the Company and proposals of the Management Board concerning profit
distribution and coverage of losses;
➢ submission to the General Meeting of an Annual Report from results of the above reviews;
➢ appointment and dismissal of members of the Management Board, including the President and Vice-Presidents, and setting the
remuneration of members of the Management Board;
➢ appointment of the auditor of the Company;
➢ suspension of Members of the Management Board in their functions for valid reasons;
➢ approval of annual financial plans for the capital group of which the Company and its subsidiaries are members;
➢ approval of terms and conditions of bond issues by the Company (other than convertible bonds or bonds with priority rights, referred to in
Article 393.5 of the Code of Commercial Companies and Partnerships) and issues of other debt securities, provision of consent to contract
financial liabilities or taking actions resulting in contracting any financial liabilities, such as borrowings, loans, overdraft facilities, conclusion
of factoring, forfaiting, lease contracts and other generating liabilities in excess of PLN 10,000,000;
➢ approval of the principles and amounts of remuneration of members of the Management Board and other persons in key management
functions in the Company as well as approval of any incentive programme, including incentive programmes for members of the
Management Board, persons in key management functions in the Company or any persons cooperating with or related to the Company,
including incentive programmes for employees of the Company;
‒ Annually the Supervisory Board submits to the General Meeting a brief assessment of the Company’s condition ensuring that it is made
available to all shareholders at a time that they are able to review it before the Ordinary General Meeting;
‒ The Supervisory Board concludes contracts with members of the Management Board on behalf of the Company and represents the Company
in disputes with members of the Management Board. The Supervisory Board may authorise by way of a resolution one or more of its members
to perform such legal actions.
The Supervisory Board may approve resolutions in writing or with the use of direct means of remote telecommunications. Resolutions approved
as specified above shall be valid if all members of the Supervisory Board were notified of the content of the draft resolution. The approval date of
the resolution approved as above shall be equivalent to the date of signing by the last member of the Supervisory Board;
Resolutions of the Supervisory Board may be approved when all members have been notified by registered letter, fax or e-mail message, sent
minimum 15 days in advance and the meeting is attended by a majority of members of the Supervisory Board. Resolutions may be approved
without formal convening a meeting when all members of the Supervisory Board agreed to vote on the specific issue or to the content of the
resolution to be approved;
Resolutions of the Supervisory Board require a simple majority of votes; in case of equal votes, the Chairperson of the Supervisory Board shall
have the casting vote;
The detailed mode of operation of the Supervisory Board is set forth in the Regulations of the Supervisory Board with its updated version available
at:
https://www.arcticpapergroup.pl/globalassets/arcticpapergroup.com/02-about/04-corporate-governance/corporate-
documents/pl/1_11_2016_appendix-pl_ap-sa---regulamin-rady-nadzorczej_fin.pdf
Annual Report 2024
Arctic Paper SA
22
The Supervisory Board of the Company as at the publication hereof was composed as follows:
‒ Per Lundeen – Chairman of the Supervisory Board appointed on 14 September 2016;
‒ Roger Mattsson – Deputy Chairman of the Supervisory Board appointed on 16 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 (independent member);
‒ Anna Jakubowski – Member of the Supervisory Board appointed on 22 June 2021 (independent member).
By resolution of 22 June 2021, the Supervisory Board was appointed for a new term.
In 2024, the Supervisory Board held meetings on: 2 February, 19 April, 1 July, 7 August, 29 October and 10 December.
Audit Committee
Composition and organisation of the Audit Committee
‒ The Audit Committee is composed of minimum three members of the Supervisory Board, including the Chairperson of the Committee, elected
by the Supervisory Board from among its members in compliance with the Articles of Association and Regulations of the Supervisory Board.
‒ Members of the Audit Committee shall be appointed for three-year terms of office, however no longer than the term of office of the Supervisory
Board;
‒ A majority of the members of the Audit Committee, including the Chairman of the Audit Committee, must be independent members;
‒ The Audit Committee operates on the basis of the Act on Statutory Auditors, Best Practice of GPW Listed Companies, Regulations of the
Supervisory Board and the Regulations of the Audit Committee;
‒ The Audit Committee performs advisory and consulting functions, operates as a collective body within the Company’s Supervisory Board;
‒ The Audit Committee carries out its tasks by providing the Supervisory Board with its proposals, opinions and reports on its scope in the form
of resolutions;
‒ At least one member of the audit committee shall have knowledge and skills in terms of accounting or auditing financial statements. The
Supervisory Board is of the opinion that the requirement of competences in the sphere accounting and financial audit is recognised as satisfied
if a member of the Audit Committee has a major experience in financial management in commercial partnerships, internal audit or audit of
financial statements, and additionally:
➢ has the title of a certified auditor or equivalent international certificate, or
➢ has an academic degree in the field of accounting or financial audit, or
➢ has long-term experience as a financial director in public companies or in working in an audit committee of such companies;
‒ Members of the Audit Committee shall have knowledge and skills relating to the industry in which the Issuer operates. This condition is
recognised as satisfied if at least one member of the Audit Committee has knowledge and skills relating to that industry or individual members
within specific scopes have knowledge and skills relating to the scope of that industry. The Supervisory Board is of the opinion that the
requirement of competences relating to the industry is recognised as satisfied if a member of the Audit Committee has information on the
characteristics of the sector, that allows him or her to obtain a complete picture of the sector’s complexity or has knowledge on part of the
chain of activities carried out by the Company.
Competences of the audit committee
‒ The basic task of the Audit Committee is advisory to the Supervisory Board on issues of proper implementation and control of the financial
reporting processes in the Company, effectiveness of the internal control and risk management systems and cooperation with statutory
auditors;
‒ The tasks of the Audit Committee resulting from supervising the Company’s financial reporting process, ensuring the effectiveness of the
Company’s internal control systems and monitoring of internal audit operations, include in particular:
➢ control if the financial information provided by the Company is correct, including the accuracy and consistency of the accounting principles
applied in the Company and its Capital Group as well as the consolidation principles of financial statements;
➢ assessment minimum once a year of the internal control and management systems in the Company and its Capital Group in order to
ensure adequate recognition and management of the Company;
➢ ensuring the effective functioning of internal control, in particular by providing recommendations to the Supervisory Board with respect to:
‒ strategic and operational internal audit plans and material modifications to such plans;
‒ internal audit policies, strategy and procedures, developed in compliance with the approved internal audit standards;
‒ audits of specific areas of the Company’s operations;
‒ The tasks of the Audit Committee resulting from monitoring the independence of the statutory auditor and the entity authorised to audit financial
statements, include in particular:
➢ issuing recommendations to the Supervisory Board relating to the election, appointment and re-appointment and dismissal of the entity
acting as the statutory auditor;
➢ control of independence and impartiality of the statutory auditor, in particular with a view to replacing the statutory auditor, the level of its
remuneration and other relationships with the Company;
➢ verification of the effectiveness of the works performed by the statutory auditor;
➢ review of reasons of resignation by the statutory auditor;
‒ The Audit Committee may resort to advisory services and assistance by external legal, accounting or other advisers if it finds it necessary to
perform its duties;
‒ The Audit Committee is obliged to file Annual Reports from its operations to the Supervisory Board by 30 September in each calendar year.
The Audit Committee meets at least three times a year.
In 2024, the Audit Committee held meetings on: 28 March, 7 August and 9 December.
Annual Report 2024
Arctic Paper SA
23
As at 5 August 2021, the Audit Committee was composed of:
‒ Anna Jakubowski – Chairperson of the Audit Committee. Member meeting the criteria for independence. According to the declaration
submitted by Ms Anna Jakubowski, she meets the condition of knowledge and skills in accounting or auditing. Ms Anna Jakubowski has
several years of experience as a member of the Audit Committee of financial institutions, including Bank Millennium.
‒ Zofia Dzik – Member of the Audit Committee meeting the independence criteria. According to the declaration submitted by Ms Zofia Dzik, she
meets the condition of knowledge and skills in accounting or auditing. Ms Zofia Dzik has several years of experience working for Arthur
Andersen and Andersen Business Consulting, where she was responsible, among others, for the area of auditing financial statements and
consulting in the area of finance.
‒ Roger Mattsson – Member of the Audit Committee – due to his long-standing experience as the financial controller of the Arctic Paper Group
and his participation in the Audit Committee for more than three years, Mr Roger Mattsson fulfils the condition for the Audit Committee member
to have knowledge and skills in the Company’s business. Additionally, he has knowledge and skills in the sphere of accounting or auditing
financial statements;
The detailed mode of operation of the Audit Committee is set forth in the Regulations of the Audit Committee.
Core assumptions underlying the policy of selecting an audit firm to conduct audits
‒ According to the regulations applicable to the Company, the Company’s Supervisory Board shall select – by way of a resolution and acting
under a recommendation of the Audit Committee – the auditor authorised to carry out the audit;
‒ The selection is made taking into account the principles of impartiality and independence of the audit firm and the analysis of the audit firm’s
work carried out in the Company which falls beyond the scope of the audit of financial statements, in order to avoid any conflict of interest
(observance of impartiality and independence);
‒ A request for proposals concerning the selection of an audit firm for statutory audit of the Company’s financial statements is developed by the
Audit Committee in cooperation with the Company’s CFO;
‒ After analysing the submitted offers, the Audit Committee shall develop a recommendation with conclusions from the selection procedure to
be approved by the Audit Committee and shall submit a recommendation on the selection of the audit firm to the Supervisory Board within
such time that will support a resolution on audit firm selection;
‒ The Supervisory Board shall select the audit firm on the basis of the submitted offers and after becoming acquainted with the Audit Committee’s
opinion and recommendation;
‒ If the Supervisory Board’s decision differs from the recommendation of the Audit Committee, the Supervisory Board shall justify the reasons
for its failure to comply with the Audit Committee’s recommendation and shall submit such justification to the body approving the financial
statements.
‒ The Company’s Management Board shall enter into a contract with the selected audit firm for the audit of financial statements of the Company.
‒ The first contract is concluded for minimum 2 years and it may be extended for another two or three years. The duration of the cooperation
shall be counted from the first financial year covered by the audit contract, in which the authorised auditor was appointed for the first time to
carry out the consecutive statutory audits of the Company.
‒ After expiry of the maximum period of the cooperation, the authorised auditor or, where applicable, any member of its network, may not
undertake a statutory audit of the Company’s financial statements for further 4 years.
‒ The key statutory auditor may not perform a statutory audit in the Company for a period longer than 5 years. The key statutory auditor may
conduct a statutory audit again after the expiry of 3 years.
‒ The maximum period of uninterrupted performance of statutory audits by the same audit firm or an audit firm related to that audit firm or any
member of the network operating in the European Union of which the audit firms are members, may not exceed 10 years.
Core assumptions underlying the policy of the provision of permitted services other than audit services by the audit firm performing
the audit, by entities related to the audit firm and by a member of the audit firm’s network;
‒ The Audit Committee of Arctic Paper SA shall be responsible for the policy covering the provision of permitted services other than audit
services by the audit firm performing the audit, by entities related to the audit firm and by a member of the audit firm’s network;
‒ The Audit Committee of Arctic Paper SA controls and monitors the independence of the auditor and the audit firm, in particular if the audit firm
provides other services than audit of statutory financial statements to Arctic Paper SA
‒ The Audit Committee of Arctic Paper SA, when so requested by a competent body or person, approves the provision of permitted services by
the auditor that are not an audit of Arctic Paper SA
‒ The prohibited services do not include:
➢ carrying out due diligence procedures for economic and financial condition,
➢ issue of letters of support,
➢ attestation services related to pro forma financial information, forecast of results, or estimation of results, contained in the issue prospectus
of the audited entity;
➢ review of historic financial information for projects referred to in the Commission Regulation (EC) No 809/2004 of 29 April 2004
implementing Directive 2003/71/EC of the European Parliament and of the Council as regards information contained in prospectuses as
well as the format, incorporation by reference and publication of such prospectuses and dissemination of advertisement;
➢ verifying consolidation packages;
➢ confirming the fulfilment of terms and conditions of concluded loan agreements on the basis of the analysis of financial information from
the financial statements audited by the audit firm;
➢ attestation services related to reporting on corporate governance, risk management, and corporate social responsibility;
➢ services consisting in assessing the conformity of information disclosed by financial institutions and investment firms with requirements
for disclosure of information on capital adequacy and variable remuneration components;
➢ certifying financial statements or other financial information intended for supervisory authorities, supervisory board or other supervisory
body of the Company or owners, which falls beyond the scope of statutory audit and helps these bodies to fulfil their statutory obligations.
Annual Report 2024
Arctic Paper SA
24
‒ Provision of the above services is possible solely to the extent not related to the entity’s tax policies after a review by the Audit Committee of
hazards and mitigants of the audit firm’s independence as referred to in Article 69-73 of the Act on Certified Auditors, Audit Firms and Public
Supervision.
On 22 February 2023, the Company’s Supervisory Board, based on the Audit Committee’s recommendation on the selection of an auditor, decided
to select PricewaterhouseCoopers Polska Spółka z ograniczoną odpowiedzialnością Audyt Sp.k. as the auditor of the Company and the Arctic
Paper SA Group to audit the financial statements for 2023 and 2024. The recommendation of the Audit Committee was issued as a result of the
selection procedure in compliance with the “Policy and procedure for the selection of the audit firm for the statutory and voluntary audit of the
consolidated and separate financial statements of Arctic Paper SA with its registered office in Kostrzyn nad Odrą”. The audit firm and members
of its team performing the audit comply with the requirements to make an impartial and independent report from the audit of the annual consolidated
and separate financial statements of the Arctic Paper Group and of the Company in compliance with the applicable regulations, professional
standards and the rules of professional ethics.
Remuneration Committee
Composition and organisation of the Remuneration Committee
‒ The Remuneration Committee is composed of minimum two members of the Supervisory Board, including the Chairperson of the Committee,
elected by the Supervisory Board from among its members in compliance with the Articles of Association and Regulations of the Supervisory
Board;
‒ Members of the Remuneration Committee shall be appointed for three-year terms of office, however no longer than the term of office of the
Supervisory Board;
‒ The Chairperson of the Remuneration Committee shall be elected with a majority of votes of its members;
‒ The Remuneration Committee operates pursuant to the Regulations of the Supervisory Board and the Regulations of the Remuneration
Committee;
‒ The Remuneration Committee performs advisory and consulting functions, operates as a collective body within the Company’s Supervisory
Board;
‒ The Remuneration Committee carries out its tasks by providing the Supervisory Board with its proposals, opinions and reports in the form of
resolutions.
Competences of the Remuneration Committee
‒ The basic task of the Remuneration Committee is advisory support to the Supervisory Board on issues related to remuneration policy, bonus
policy and other issues related to the remuneration of the employees, members of the Company’s authorities and the authorities of Capital
Group companies;
‒ The tasks of the Remuneration Committee resulting from supervision over the Company’s remuneration policy and ensuring the effective
functioning of the Company’s remuneration policy, is to provide recommendations to the Supervisory Board in particular with respect to:
➢ approval and changes to the remuneration principles of members of the Company’s bodies;
➢ the amount of total remuneration to members of the Company’s Management Board;
➢ legal disputes between the Company and Members of the Management Board with respect to the tasks of the Committee;
➢ proposing remuneration and approving additional benefits to individual members of the Company’s bodies, in particular under
management option plans (convertible into shares of the Company);
➢ strategy of the Company’s remuneration and bonus policies and HR policies;
‒ The Remuneration Committee may resort to advisory services and assistance by external legal or other advisers if it finds it necessary to
perform its duties;
‒ The Remuneration Committee is obliged to file Annual Reports from its operations to the Supervisory Board by 30 September in each calendar
year.
On 31 August 2020, the General Meeting of the Company, bearing in mind Article 90d(1) in connection with Article 90c(2)(1) of the Act of 29 July
2005 on public offerings and conditions for the introduction of financial instruments into the organised trading system and on public companies
(i.e. Journal of Laws 2022, item 2554, as amended) adopted the "Remuneration Policy for Members of the Management Board and Members of
the Supervisory Board of Arctic Paper SA". Under the above-mentioned Acts of public companies, including the Company, were obliged to adopt,
by resolution, the Remuneration Policy of Management Board and Supervisory Board Members, which is the rules for determining the
remuneration of Members of the Management Board and Supervisory Board, by the General Meeting of Shareholders, and to publish
a remuneration report. The Company shall pay remuneration to the Members of the Management Board and the Supervisory Board solely in
compliance with the adopted Policy. The policy prepared by the Company was drawn up in accordance with the principles set out in the above-
mentioned Act and refers to the required elements related to remuneration and other terms of employment for Members of the Management Board
and Members of the Supervisory Board. The policy received an opinion from the Remuneration Committee operating at the Supervisory Board,
as well as by the Supervisory Board.
On 29 May 2024, the General Meeting of the Company gave a positive opinion on the remuneration report for 2023 prepared by the Supervisory
Board. The resolution of the General Meeting on the aforementioned issue is advisory in nature. The report was reviewed by the auditor. The
independent auditor’s report on the performance of a service providing reasonable assurance on the assessment of the remuneration report was
attached as Appendix 2 to current report No. 12/2024 – "Resolutions adopted by the Annual General Meeting of Arctic Paper SA on 29 May 2024".
Remuneration Committee meetings were held on: 2 February, 28 February, 28 March.
Annual Report 2024
Arctic Paper SA
25
Since 9 February 2017 the Remuneration Committee has been operating in the following composition:
‒ Per Lundeen – Chairman of the Remuneration Committee,
‒ Thomas Onstad – Member of the Remuneration Committee,
‒ Roger Mattsson – Member of the Remuneration Committee.
The detailed mode of operation of the Remuneration Committee is set forth in the Regulations of the Remuneration Committee.
Risk Committee
Composition and organisation of the Risk Committee
‒ The Risk Committee is composed of minimum three members of the Supervisory Board, including the Chairperson of the Committee, elected
by the Supervisory Board from among its members. Minimum one member of the Risk Committee shall be independent and hold qualifications
and experience in the sphere of finances;
‒ Members of the Risk Committee shall be appointed for three-year terms of office, however no longer than the term of office of the Supervisory
Board;
‒ The Chairperson of the Risk Committee shall be elected with a majority of votes of its members;
‒ The Risk Committee operates on the basis of commonly accepted corporate risk management models (e.g. COSO-ERM);
‒ The Risk Committee performs advisory and consulting functions, operates as a collective body within the Company’s Supervisory Board;
‒ The Risk Committee carries out its tasks by providing the Supervisory Board with its proposals, opinions and reports in the form of resolutions.
Competences of the Risk Committee
‒ The basic task of the Risk Committee is advisory support to the Supervisory Board on issues related to the proper identification, assessment
and control of potential risks, i.e. opportunities and threats to realization of the Company’s strategic goals, with particular consideration for
financial risk, related to both external factors (such as volatility of FX rates, interest rates, general international economic condition) and
internal factors (such as cash flows, liquidity management, variation of budget and financial forecasts);
‒ The tasks of the Risk Committee resulting from the supervision over the risk management process, include in particular:
➢ Supervision over correct identification, analysis and assigning priority to types of risk inherent in the operational strategy and business
pursued;
➢ Confirmation to the identified risk appetite of the Company;
➢ Verification if actions used to mitigate risk are planned and implemented so that the risk is mitigated to a level acceptable by the Company;
➢ Monitoring verifying correct risk assessment by the Management Board and the effectiveness of control tools;
➢ Supervision over correct notification of stakeholders on the risks, risk strategies and control tools.
‒ The Risk Committee may resort to advisory services and assistance by external advisers if it finds it necessary to perform its duties.
Since 5 August 2021 the Risk Committee has been operating in the following composition:
‒ Per Lundeen – Chairman of the Risk Committee,
‒ Zofia Dzik – Independent Member of the Risk Committee,
‒ Roger Mattsson – Member of the Risk Committee.
The Risk Committee met on 27 May and on 9 December 2024.
Information compliant with the requirements of Swedish regulations concerning corporate governance.
Arctic Paper SA is a company registered in Poland which stock has been admitted to trading at the Warsaw Stock Exchange and at NASDAQ in
Stockholm. The Company’s primary market is in Warsaw with a parallel market in Stockholm. Companies not registered in Sweden which shares
have been admitted to trading at NASDAQ in Stockholm are obliged to comply with:
‒ the corporate governance rules in force in the country of their registration or
‒ the corporate governance rules in force in the country where they have their primary trading market, or
‒ the Swedish corporate governance code (hereinafter the “Swedish Code”).
Arctic Paper SA follows the principles set forth in the “Best Practice of GPW Listed Companies 2021” (hereinafter the “Best Practice”) that may
be applied by companies listed at the Warsaw Stock Exchange and not the Swedish Code. As a result, the conduct of Arctic Paper SA is different
from the one set forth in the Swedish Code in the following material aspects.
General Meeting of Shareholders
The core documents related to General Meetings of Shareholders, such as notices, reports and approved resolutions, are made in Polish and in
English instead of Swedish.
Appointment of governing bodies of the company
The Polish corporate governance model provides for a two-tier system of the Company’s bodies which is composed of the Management Board
being the executive body appointed by the Management Board which in turns supervises the Company’s operations and is appointed by the
General Meeting of Shareholders. Auditors are selected by the Supervisory Board.
Neither the Best Practice, nor any other Polish regulations require the establishment of a commission in the Company to elect candidates and
therefore such commission does not exist among the bodies of the Company. Each shareholder may propose candidates to the Supervisory
Board. Appropriate information on candidates proposed to the Supervisory Board is published on the Company’s website with appropriate advance
so that all shareholders could take an informed decision when voting on the resolution appointing a new member of the Supervisory Board.
Annual Report 2024
Arctic Paper SA
26
Tasks of the bodies of the Company
In compliance with the two-tier system of the Company’s bodies, the tasks usually performed by the management of Swedish-registered
companies are performed by the Management Board or the Supervisory Board of companies subject to Polish law.
In accordance with the Polish applicable regulations, members of the Management Board, including its General Director who is the President of
the Management Board, may not get involved in competitive activities outside the Company. Pursuing of other business outside the Company is
not regulated either in the Best Practice or other Polish regulations; however, certain restrictions are usually incorporated in individual employment
contracts.
Size and composition of the Company’s bodies
The composition of the Supervisory Board should reflect the independence criteria, just like those specified in the Swedish Code. However, the
Management Board being the executive body is composed of persons in executive positions at Arctic Paper SA, and these members may not be
treated as independent of the Company. The terms of office of members of the Management Board – just like the members of the Supervisory
Board – lasts three years.
Chairpersons of the bodies of the Company
It is the Supervisory Board and not the General Meeting that elects the chairperson and the deputy chairperson from its members.
Procedures of the bodies of the Company
Both the Rules of Procedure for the Management Board and the Rules of Procedure for the Supervisory Board are adopted by the Supervisory
Board. The Regulations are not reviewed each year – they are reviewed and modified as need arises. The same principles apply to regulations
of committees operating within the Supervisory Board that are approved by the Supervisory Board. The operation of the General Director is not
regulated separately since he/she also acts as the president of the Management Board.
Remuneration of members of the bodies of the Company and management staff
The Company shall pay remuneration to the Members of the Management Board and the Supervisory Board solely in compliance with the
Remuneration Policy adopted by the General Meeting.
Information on corporate governance
The Polish corporate governance rules do not require the same detail as to the disclosed information as required by the Swedish Code. However,
information on members of the Company’s bodies, company’s Articles of Association, internal regulations and a summary of material differences
between the Swedish and Polish approach to corporate governance and shareholders’ rights is published on the Company’s website.
Annual Report 2024
Arctic Paper SA
27
Information by the Management Board of Arctic Paper SA on selection of the audit firm
Based on the statement of the Supervisory Board of Arctic Paper SA on the selection of the auditing firm to audit the annual consolidated financial
statements of the Arctic Paper Group and the annual separate financial statements of the Company for the financial year ended December 31,
2024 in accordance with the regulations and on the basis of the statement received from PricewaterhouseCoopers Polska spółka z ograniczoną
odpowiedzialnością Audyt Sp.k, it was decided to select PricewaterhouseCoopers Polska Spółka z ograniczoną odpowiedzialnością Audyt Sp.k.
as the auditor of the Company and the Arctic Paper SA Group to audit the financial statements for 2023 and 2024.
The Management Board of the Company informs that the selection of the auditing firm by the Supervisory Board took place in accordance with
the regulations and the “Policy and procedure for the selection of the audit firm for the statutory and voluntary audit of the consolidated and
separate financial statements of Arctic Paper SA with its registered office in Kostrzyn nad Odrą”.
The audit firm and members of the audit team complied with the criteria to issue an impartial and independent report on the audit of the annual
consolidated financial statements of the Company for the financial year ended on 31 December 2024, in compliance with the applicable laws,
professional standards, and the principles of professional conduct.
The Management Board of the Company also informs that the applicable laws with regard to a change of the audit firm and the key statutory
auditor, as well as mandatory periods of grace have been complied with. The Arctic Paper Group has a policy relating to the selection of the
auditing company and a policy of the provision of services that are not an audit by the audit firm, entities related to the audit firm or a member of
its group, including services that are not covered with the ban on being provided by audit firms.
Signatures of the Members of the Management Board
Position
First and last name
Date
Signature
President of the Management Board
CEO
Michał Jarczyński
29 April 2025
signed with a qualified electronic signature
Member of the Management Board
CFO
Katarzyna Wojtkowiak
29 April 2025
signed with a qualified electronic signature
Member of the Management Board
Vice-President for Sales and Marketing
Fabian Langenskiöld
29 April 2025
signed with a qualified electronic signature
Statements of the Management Board
Accuracy and reliability of the presented reports
Members of the Management Board of Arctic Paper SA represent that to the best of their knowledge:
‒ The financial statements of Arctic Paper SA for the year ended on 31 December 2024 and the comparable data were prepared in compliance
with the applicable accounting principles and they reflect Company’s economic and financial condition and its financial result for 2024 in a true,
reliable and clear manner.
‒ The Management Board’s Report from operations of Arctic Paper SA in 2024 contains a true image of the development, achievements and
condition of Arctic Paper SA, including a description of core hazards and risks.
Signatures of the Members of the Management Board
Position
First and last name
Date
Signature
President of the Management Board
CEO
Michał Jarczyński
29 April 2025
signed with a qualified electronic signature
Member of the Management Board
CFO
Katarzyna Wojtkowiak
29 April 2025
signed with a qualified electronic signature
Member of the Management Board
Vice-President for Sales and Marketing
Fabian Langenskiöld
29 April 2025
signed with a qualified electronic signature
Annual Report 2024
Arctic Paper SA
(unless specified otherwise, all amounts are in PLN ‘000)
The accounting policies and additional notes included on pages from 33 to 60
form an integral part of these financial statements.
29
Financial Statements for the year ended 31 December 2024 together with the auditor’s
report
Separate financial statements
Separate statement of profit or loss
Note
Year ended
on 31 December 2024
Year ended
on 31 December 2023
Continuing operations
Revenue from sales of services
3.1
15 180
14 321
Interest income on loans
3.1
2 580
1 930
Dividend income
3.1
106 097
179 235
Sales revenue
3.1
123 857
195 486
Costs of sales of logistics services
3.2.4
(8 212)
(7 311)
Costs from borrowings received
(4 891)
(5 447)
Gross profit/(loss) on sales
110 754
182 727
Other operating income
154
68
Administrative expenses
3.2.4
(22 970)
(13 131)
Impairment allowances to assets
3.2.1
104 343
78 919
Other operating expenses
(257)
(46)
Operating profit/(loss)
192 024
248 537
Finance income
3.2.2
7 362
5 439
Finance costs
3.2-3
(5 755)
(4 818)
Gross profit/(loss)
193 631
249 158
Income tax
3.3
3 661
2 058
Net profit/(loss) for the reporting period
197 292
251 216
Earnings/(loss) per share in PLN:
– basic earnings from the profit/(loss) for the period
3.4
2,85
3,63
– diluted earnings from the profit/(loss) for the period
3.4
2,85
3,63
Separate statement of total comprehensive income
Note
Year ended
on 31 December 2024
Year ended
on 31 December 2023
Net profit/(loss) for the reporting period
197 292
251 216
Items to be reclassified to profit/(loss) in future reporting periods:
Measurement of financial instruments
5.1, 5.2
(2 111)
(4 703)
Deferred tax on the measurement of financial instruments
401
894
FX differences on translation of foreign operations
4.6.2
433
676
Other total comprehensive income
(1 276)
(3 134)
Total comprehensive income
196 016
248 083
Annual Report 2024
Arctic Paper SA
(unless specified otherwise, all amounts are in PLN ‘000)
The accounting policies and additional notes included on pages from 33 to 60
form an integral part of these financial statements.
30
Separate statement of financial position
Note
As at
31 December 2024
As at
31 December 2023
ASSETS
Non-current assets
Property, plant and equipment
1 174
1 026
Intangible assets
1 319
1 331
Shares in subsidiaries and joint ventures
4.1.1
1 070 752
960 977
Other financial assets
4.2
51 218
25 356
Deferred tax
3.3.3
5 739
1 283
1 130 202
989 972
Current assets
Trade and other receivables
4.3
17 606
15 935
Income tax receivables
6 118
2 192
Other financial assets
4.2
197
7 519
Other non-financial assets
4.4
10 349
7 916
Cash and cash equivalents
4.5
176 985
264 150
211 256
297 712
TOTAL ASSETS
1 341 458
1 287 686
Note
As at
31 December 2024
As at
31 December 2023
EQUITY AND LIABILITIES
Equity
Share capital
4.6.1
69 288
69 288
Supplementary capital
4.6.3
625 736
443 808
Other capital
4.6.4
136 588
138 298
FX differences on translation
4.6.2
2 571
2 138
Retained earnings/Accumulated losses
4.6.5
130 520
184 444
964 703
837 975
Non-current liabilities
Interest-bearing loans and borrowings
4.7
38 602
42 080
Other financial liabilities
-
17
Deferred tax provision
3.3.3
2 961
2 570
41 563
44 668
Current liabilities
Loans payables
4.7
304 269
380 057
Trade payables
4.8.1
17 829
18 939
Other financial liabilities
4.8.2
17
38
Other current liabilities
4.8
9 274
1 488
Employee liabilities
3 803
2 960
Income tax liability
-
1 561
335 192
405 043
Total liabilities
376 755
449 710
TOTAL EQUITY AND LIABILITIES
1 341 458
1 287 686
Annual Report 2024
Arctic Paper SA
(unless specified otherwise, all amounts are in PLN ‘000)
The accounting policies and additional notes included on pages from 33 to 60
form an integral part of these financial statements.
31
Separate statement of cash flow
Note
Year ended
on 31 December 2024
Year ended
on 31 December 2023
Cash flows from operating activities
Gross profit/(loss)
193 631
249 158
Adjustments for:
Depreciation/amortisation
3.2.5
423
317
FX gains/(losses)
736
(741)
Impairment of interests
4.1.2
(104 775)
(80 208)
Net interest and dividends
3 764
3 713
Profit/(loss) from investing activities
(30)
(2)
Change in receivables and other non-financial assets
(4 104)
(468)
Change in liabilities excluding loans and borrowings and other financial liabilities
7 521
(4 066)
Income tax
(5 491)
3 271
Change to liabilities due to cash-pooling
4.7
(73 467)
120 023
Change in loans granted to subsidiaries
4.2.1
(20 651)
10 604
Interest received on loans granted and cash-pooling
1 966
1 972
Interest paid under cash-pooling
(4 891)
(5 447)
Other
(226)
-
Net cash flows from operating activities
(5 596)
298 125
Cash flows from investing activities
Sale of property, plant and equipment and intangible assets
178
-
Purchase of property, plant and equipment and intangible assets
(708)
(752)
Increase of interests in subsidiaries
(5 000)
(25 940)
Sale of shares to non-controlling shareholders
-
68
Net cash flows from investing activities
(5 530)
(26 624)
Cash flows from financing activities
Repayment of leasing liabilities
(38)
(126)
Repayment of liabilities from loans and borrowings
4.7
(28 784)
(29 257)
Loans received
4.7
24 869
-
Interest paid
(1 817)
(2 028)
Dividend paid
3.5
(69 288)
(187 077)
Net cash flows from financing activities
(75 058)
(218 489)
Cash and cash equivalents at the beginning of the period
4.5
264 150
213 272
Change in cash and cash equivalents
(86 184)
53 011
Net FX differences
(981)
(2 135)
Cash and cash equivalents at the end of the period
4.5
176 985
264 150
Annual Report 2024
Arctic Paper SA
(unless specified otherwise, all amounts are in PLN ‘000)
The accounting policies and additional notes included on pages from 33 to 60
form an integral part of these financial statements.
32
Separate statement of changes in equity
Note
Share capital
Supplementary
capital
FX differences
on translation of
investments
in foreign entities
Other capital
Retained earnings
/Accumulated
losses
Total
As at 1 January 2024
69 288
443 808
2 138
138 298
184 444
837 975
Net profit/(loss) for the period
-
-
-
-
197 292
197 292
Other total comprehensive income for the period
-
-
433
(1 710)
-
(1 276)
Total comprehensive income for the period
-
-
433
(1 710)
197 292
196 016
Financial profit distribution
4.6.3
-
181 928
-
-
(181 928)
-
Dividend distribution
-
-
-
(69 288)
(69 288)
As at 31 December 2024
69 288
625 736
2 571
136 588
130 520
964 703
Note
Share capital
Supplementary
capital
FX differences
on translation of
investments
in foreign entities
Other capital
Retained earnings
/Accumulated
losses
Total
As at 1 January 2023
69 288
427 502
1 463
106 725
171 993
776 969
Capital presentation adjustment
-
(19 523)
-
35 382
(15 859)
-
As at 1 January 2023, after presentation adjustment
69 288
407 979
1 463
142 107
156 134
776 969
Net profit/(loss) for the period
-
-
-
-
251 216
251 216
Other total comprehensive income for the period
-
-
676
(3,809)
-
(3 134)
Financial profit distribution
-
35 829
-
-
(35 829)
-
Dividend distribution
-
-
-
-
(187 077)
(187 077)
As at 31 December 2023
69 288
443 808
2 138
138 298
184 444
837 975
Annual Report 2024
Arctic Paper SA
(unless specified otherwise, all amounts are in PLN ‘000)
33
Notes to the separate financial statements
1. General information
1.1 Name, registered office, scope of business activity
The financial statements of Arctic Paper S.A cover the year ended on 31 December 2024 and contain comparative data for the year ended on
31 December 2023. These financial statements include the financial data of Arctic Paper SA (head office) and the financial data of the Swedish
branch independently reporting in SEK.
Arctic Paper SA (hereinafter: (“Company”, “Entity”) is a joint stock company established with Notary deed on 30 April 2008 with its stock publicly
listed. The Company’s registered office is located in Kostrzyn nad Odrą, ul. Fabryczna 1. The Company also has a foreign branch in Göteborg,
Sweden.
The Company is entered in the register of entrepreneurs of the National Court Register maintained by the District Court in Zielona Góra –
8th Commercial Division of the National Court Register, under KRS number 0000306944. The Company holds statistical number REGON
080262255. The duration of the Company is indefinite.
The main area of the Company’s business activity is holding activity for the benefit of the Arctic Paper Group.
Nemus Holding AB is the direct Parent Company to the Company. The ultimate parent company of the Group that prepares the consolidated
financial statements is Nemus Holding AB.
1.2 Identification of the separate financial statements
The Company has prepared separate financial statements for the year ended 31 December 2024, which were authorised for issue on 29 April
2025.
1.3 Composition of the Company’s Management Board
As at 31 December 2024, the Company’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.
There have been no changes to the composition of the Company up to the date of this report.
1.4 Approval of the financial statements
These financial statements were approved for publication by the Management Board on 29 April 2025.
Annual Report 2024
Arctic Paper SA
(unless specified otherwise, all amounts are in PLN ‘000)
34
1.5 Investments by the Company
The Company holds interests in the following subsidiaries:
Unit
Registered office
Business activity
31.12.2024
31.12.2023
Arctic Paper Kostrzyn SA
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 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 SA
Belgium, Interleuvenlaan 62 bus 14,
B-3001 Heverlee
Trading company
100%
100%
Arctic Paper Schweiz AG
Switzerland, Gutenbergstrasse 1,
CH-4552 Derendingen
Trading company
100%
100%
Arctic Paper Italia srl
Italy, Via Chiaravalle 7, 20 122 Milan
Trading company
100%
100%
Arctic Paper Danmark A/S
Denmark, Korskildelund 6
DK-2670 Greve
Trading company
100%
100%
Arctic Paper France SAS
Francja, 30 rue du Chateau des Rentiers,
75013 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 Vienna
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
Energy projects
100%
100%
Arctic Paper Investment GmbH
Germany, Am Sandtorkai 71, D-20457
Hamburg
Activities of holding companies
100%
100%
Arctic Paper Investment AB **
Sweden, Box 383, 401 26 Göteborg
Activities of holding companies
100%
100%
Kostrzyn Packaging Spółka z o.o.
Poland, ul. Fabryczna 1,
66-470 Kostrzyn nad Odrą
Production of packaging
50%
50%
Rottneros AB
Sweden, Box 144, Sunne
Activities of holding companies
51,27%
51,27%
As at 31 December 2024 and as at 31 December 2023, the share in the overall number of votes held by the Company in its subsidiaries was
equal to the share of the Company in the share capital of those entities.
2. Accounting principles
2.1 Basis of preparation of the financial statements
These financial statements have been prepared on the historical cost basis except for derivative financial instruments, which are measured at fair
value.
These separate financial statements are presented in Polish zloty (“PLN”) and all values are disclosed in PLN thousand unless specified otherwise.
Annual Report 2024
Arctic Paper SA
(unless specified otherwise, all amounts are in PLN ‘000)
35
These separate financial statements have been prepared based on the assumption that the Company will continue as a going concern in the
foreseeable future.
As at the publication date hereof, no circumstances were identified that would pose a threat to the Company continuing as a going concern.
2.2 Compliance statement
These financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”), endorsed by the
European Union. IFRS cover standards and interpretations approved by the International Accounting Standards Board (IASB).
2.3 Functional currency and presentation currency
The Polish zloty (PLN) is the functional currency and the presentation currency of the Company in these financial statements.
2.4 Changes in applied accounting policies
The accounting policies applied in the preparation of the financial statements are consistent with those applied in the preparation of the Company’s
financial statements for the year ended 31 December 2024.
The Company did not decide to adopt earlier other standards, interpretations or amendments that were issued but are not yet effective for periods
commencing on 1 January 2024.
2.5 New and amended standards and interpretations applied
The following new standards and amendments to existing standards, which become effective in 2024, have been applied for the first time in these
financial statements:
a) Lease liability under sale and leaseback – Amendments to IFRS 16 Leases
The amendments to IFRS 16 set out the requirements that a seller-lessee is required to apply in measuring a lease liability arising from a sale
and leaseback transaction so that it does not recognise a gain or loss associated with a right-of-use that it retains.
These changes have no impact on these financial statements.
b) Classification of liabilities as current or non-current and non-current liabilities linked to conditions – Amendments to IAS 1 Presentation of
Financial Statements
The amendments to IAS 1 set out the requirements for classifying liabilities as short-term or long-term.
The amendments to IAS 1 clarify:
‒ which implies the right to postpone maturity;
‒ that the right to deferral must exist at the end of the reporting period;
‒ that classification is not affected by the likelihood of an individual exercising his or her right to deferral;
‒ that only when the option to settle a liability by issuing its own equity instruments is classified as an equity instrument, the settlement of such
option is not taken into account for the purpose of classifying the liability itself as short-term or long-term.
In addition, an entity has been required to disclose information when a liability under a loan agreement is classified as a non-current liability and
the entity’s right to defer repayment of the liability is conditional on the satisfaction of future covenants within twelve months.
The changes had no impact on the classification of liabilities.
In addition, the amendments to IAS 1 Presentation of Financial Statements and the IFRS Board’s guidance on disclosure of accounting policies
in practice – the issue of materiality in relation to accounting policies – are effective from 1 January 2023. The Company has reviewed the range
of accounting policies presented in the separate financial statements and discloses the significant accounting principles/(policies) in the individual
Notes to this report.
a) Supplier finance arrangements – Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures
The amendments set out the features of supplier financing mechanisms and require additional disclosures about such mechanisms.
Supplier financing mechanisms are often referred to as supply chain financing, accounts payable financing or reverse factoring mechanisms.
The disclosure requirements are intended to help users of financial statements understand the impact of supplier financing mechanisms on an
entity’s liabilities, cash flows and liquidity risk exposure. These changes have no impact on these financial statements.
2.6 New standards and interpretations that have been published and are not yet effective
In these separate financial statements, the Company has not decided to early apply the following published standards, interpretations or
amendments to existing standards before their effective date:
a) IFRS 14 Regulatory Accruals (published 30 January 2014) – in accordance with the European Commission’s decision, the approval
process for the preliminary version of the standard will not be initiated until the final version is published – not endorsed by the EU until
the date of approval of these financial statements – effective for annual periods beginning on or after 1 January 2016;
b) Amendments to IFRS 10 and IAS 28: Transactions for the sale or contribution of assets between an investor and its associate or joint
venture (published 11 September 2014) – the work leading to the approval of these amendments has been postponed indefinitely by the
EU – the effective date has been postponed indefinitely by the IASB;
Annual Report 2024
Arctic Paper SA
(unless specified otherwise, all amounts are in PLN ‘000)
36
c) Amendments to IAS 21: Effects of changes in foreign exchange rates: Non-convertibility (published 15 August 2023) – applicable for
annual periods beginning on or after 1 January 2025;
d) IFRS 18: Presentation and Disclosure in Financial Statements (published on 9 April 2024) – not endorsed by the EU at the date of approval
of these financial statements – applicable for annual periods beginning on or after 1 January 2027;
e) IFRS 19: Subsidiaries without public accountability: disclosure (published on 9 May 2024) – not endorsed by the EU until the date of
approval of these financial statements – applicable for annual periods beginning on or after 1 January 2027;
f) Amendments to IFRS 9 and IFRS 7: Amendments relating to the classification and measurement of financial instruments (published
30 May 2024) – not endorsed by the EU up to the date of approval of these financial statements – applicable for annual periods beginning
on or after 1 January 2026;
g) Annual Improvements, Volume 11 (published 18 July 2024) – not endorsed by the EU until the date of approval of these financial
statements – applicable for annual periods beginning on or after 1 January 2026;
h) Amendments to IFRS 9 and IFRS 7: Agreements referring to nature-dependent electricity (published on 18 December 2024) – not
endorsed by the EU at the date of approval of these financial statements – applicable for annual periods beginning on or after 1 January
2026;
As at the date of approval of these financial statements for publication, the Management Board does not expect the introduction of the other
standards and interpretations to have a material impact on the Company’s accounting policies.
The Group has not opted for early application of any standard, interpretation or amendment that has been published but is not yet effective under
European Union legislation.
2.7 Foreign currency translation
Swedish krona is the functional currency of the Company’s foreign branch. As at the balance sheet date, assets and liabilities of the branch are
translated into the presentation currency of the Company using the FX rate prevailing on that date and its statement of profit or loss is translated
using a weighted average FX rate for the reporting period.
The FX differences arising from the translation are recognised in other total comprehensive income and accumulated in a separate item of equity
– FX differences on translation.
Transactions denominated in currencies other than Polish zloty are translated to Polish zloty at the FX rate prevailing on the transaction date.
As at the balance sheet date, assets and monetary liabilities expressed in currencies other than Polish zloty are translated into Polish zloty using
the National Bank of Poland’s mean FX rate prevailing for the given currency as at the end of the reporting period.
FX differences resulting from translation are recognised under finance income (expenses), or – in cases defined in the accounting policies – are
capitalised in assets. Non-monetary foreign currency assets and liabilities recognised at historical cost in foreign currency are translated at the
historical FX rates prevailing on the transaction date. Non-monetary foreign currency assets and liabilities recognised at fair value in foreign
currency are translated using the FX rates prevailing as at the date of fair value measurement.
The following exchange rates were used for book valuation purposes:
31 December 2024
31 December 2023
USD
4,1012
3,9350
EUR
4,2730
4,3480
SEK
0,3731
0,3919
DKK
0,5730
0,5833
NOK
0,3624
0,3867
GBP
5,1488
4,9997
CHF
4,5371
4,6828
01.01 – 31.12.2024
01.01 – 31.12.2023
USD
3,9799
4,2030
EUR
4,3065
4,5437
SEK
0,3768
0,3962
DKK
0,5774
0,6098
NOK
0,3705
0,3984
GBP
5,0868
5,2230
CHF
4,5231
4,6753
For translation of assets and liabilities of the foreign branch as at 31 December 2024, the exchange rate SEK/PLN of 0.3731 was applied
(31 December 2023: 0.3919). For translation of the items of comprehensive income for the year ended on 31 December 2024, the exchange rate
SEK/PLN of 0.3768 was applied (for the year ended on 31 December 2023: 0.3962) which is an arithmetic mean of NBP’s mean exchange rates
published by NBP in 2019 in 2024.
Annual Report 2024
Arctic Paper SA
(unless specified otherwise, all amounts are in PLN ‘000)
37
2.8 Material values based on professional judgement and estimates
The preparation of separate financial statements in accordance with IFRS requires certain assumptions, estimates and judgements to be made
that affect the accounting policies adopted and the amounts reported in the separate financial statements. Assumptions and estimates are based
on past experience and other factors, including predictions of future events that seem reasonable in a given situation. The resulting accounting
estimates will, by definition, rarely coincide with the actual results. Accounting estimates and judgements are subject to regular review.
Significant accounting principles and significant values based on judgements and estimates are presented as part of the individual notes to the
separate financial statements.
3. Notes to the separate statement of profit or loss and other comprehensive income
3.1 Revenue
Significant accounting principles (policies)
Provision of services
The Company recognises revenue when the performance obligation is fulfilled (or in the process of being fulfilled) by transferring the promised
good or service to the customer. With regard to contracts for continuing services, under which the Company has the right to receive from the
customer an amount of remuneration that corresponds directly to the value to the customer of the service provided to date, the Company
recognises revenue at the amount it is entitled to invoice.
Arctic Paper SA is a holding company. The company provides services to companies in the Group and these are mainly consulting and logistics
services. Revenue is recognised over time as services are provided. Since the Company is entitled to receive remuneration from customers in an
amount that corresponds directly to the value to the customers of the service already rendered by the entity, the Company recognises revenue in
the amount that it is entitled to invoice.
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. The Company recognises interest
only on loans and cash-pooling to related companies (as opposed to interest on deposits and other interest related to financing activities and
reported in financing activities) in its core operating income.
Dividend
Dividend is recognised when the shareholders’ rights to receive dividend are established.
Sales revenue
The table below presents a geographical split of revenue from sales of services, revenue from contracts with customers as well as dividend and
interest income in 2023-2024.
Year ended
on 31 December 2024
Year ended
on 31 December 2023
revenue from contracts with customers
Poland
4 155
4 126
Sweden
11 026
10 194
other
-
-
15 180
14 321
Other income (dividends and interest)
Poland
92 188
133 578
Sweden
16 489
46 001
other
-
1 585
108 677
181 165
Total
123 857
195 486
The above information about revenue is based on data regarding registered offices of subsidiaries of Arctic Paper SA
Service revenue (management, logistics) represents revenue recognised over time. The Company usually applied a 14 or 21 day payment term,
and does not receive payments before services are completed.
Annual Report 2024
Arctic Paper SA
(unless specified otherwise, all amounts are in PLN ‘000)
38
3.2 Other income and costs
3.2.1 Impairment allowances to assets
Year ended
on 31 December 2024
Year ended
on 31 December 2023
Impairment allowance to financial assets (Arctic Paper Mochenwangen GmbH)
(432)
(1 289)
Reversal of impairment allowance to assets (Arctic Paper Sverige AB)
104 775
80 208
Total
104 343
78 919
3.2.2 Finance income
Year ended
on 31 December 2024
Year ended
on 31 December 2023
Interest income on funds in bank accounts
4 340
2 946
Financial services
3 022
2 493
Total
7 362
5 439
3.2.3 Finance costs
Year ended
on 31 December 2024
Year ended
on 31 December 2023
Interest on loans and other liabilities
1 134
840
FX losses
619
516
Warranty costs
3 112
2 645
Other finance costs
890
817
Total
5 755
4 818
3.2.4 Prime costs
Year ended
on 31 December 2024
Year ended
on 31 December 2023
Depreciation/amortisation
423
317
Materials
167
173
Third party services
15 619
8 816
Taxes and charges
225
100
Wages and salaries
11 358
7 896
Employee benefits
1 980
1 672
Other prime costs
1 411
1 468
Total
31 182
20 443
Interest not recognised in costs by type
4 891
5 447
Total
36 074
25 890
3.2.5 Depreciation/amortisation
Year ended
on 31 December 2024
Year ended
on 31 December 2023
Depreciation of property, plant and equipment
410
294
Depreciation of intangible assets
12
23
Total
423
317
Attributable to:
– continuing operations
423
317
Annual Report 2024
Arctic Paper SA
(unless specified otherwise, all amounts are in PLN ‘000)
39
3.2.6 Employee benefit costs
Year ended
on 31 December 2024
Year ended
on 31 December 2023
Wages and salaries
11 358
7 924
Social insurance premiums
1 980
1 644
Total
13 338
9 568
3.3 Income tax
From 1 January 2022, the Company is part of the Arctic Paper Tax Group (PGK). The Tax Group was concluded for a period of three fiscal years
starting from 1 January 2022. PGK comprises Arctic Paper SA as the parent company and Arctic Paper Kostrzyn SA as a subsidiary. At the end
of 2024, the Tax Group amended the agreement to extend the life of the group indefinitely. The PGK agreement was notified by Arctic Paper SA,
designated as the parent company of the Arctic Paper Tax Group, at the First Mazovian Tax Office.
Significant accounting principles (policies)
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 in Poland and Sweden (to be recovered from tax authorities) with tax rates and based on tax regulations legally or actually applicable
as at the balance sheet date.
Deferred tax
For financial reporting purposes, deferred 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.
Deferred tax provision is recognised for all positive temporary differences:
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 tax asset to be utilised. Unrecognised deferred 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 assets and deferred tax liabilities are measured using the tax rates in Poland and Sweden that are expected to apply in the period
when the asset is realised or the liability is released, based on tax rates (and tax laws) in force at the balance sheet date or those that are certain
to apply in the future 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 tax asset and deferred 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 tax relates to the same taxable entity and the same tax authority.
Annual Report 2024
Arctic Paper SA
(unless specified otherwise, all amounts are in PLN ‘000)
40
3.3.1 Tax liability
The major components of income tax liabilities for the year ended on 31 December 2024 and on 31 December 2024 are as follows:
Year ended
on 31 December 2024
Year ended
on 31 December 2023
Current income tax liability
(3)
4 101
Deferred tax
3 664
(2 043)
Tax charge disclosed in the statement of profit or loss
3 661
2 058
3.3.2 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 Company’s effective income tax rate for the year ended on 31 December 2024 and 31 December 2023 is as follows:
Year ended
on 31 December 2024
Year ended
on 31 December 2023
Gross profit/(loss) before tax
193 631
249 158
Tax at the statutory rate in Poland of 19%
(36 790)
(47 340)
Benefit of accounting for tax losses within the Tax Group
-
303
Dividend income
20 158
34 055
Impact of the amortised cost of the loan on interest calculations
532
173
Costs that are permanently non-tax deductible
(84)
(234)
Realisation of SWAP by result (valuation by capital)
-
106
Adjustment of income tax from previous years
19
-
Impairment allowances for interests and loans
19 825
14 995
Income tax (charge) recognised in profit or loss
3 661
2 058
3.3.3 Deferred tax
Deferred tax relates to the following items:
Balance sheet
Profit and loss
31 December 2024
31 December 2023
Year ended
on 31 December 2024
Year ended
on 31 December 2023
Deferred tax liability
Valuation of loans at amortised cost
1 166
552
614
552
FX gains
1 532
1 108
424
1 108
Amortisation of right-of-use assets
10
10
-
446
IRS valuation
253
-
253
-
Gross deferred tax provision
2 961
1 670
1 291
2 106
Deferred 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.
Balance sheet
Profit and loss
31 December 2024
31 December 2023
Year ended
on 31 December 2024
Year ended
on 31 December 2023
Deferred tax asset
Uninvoiced liabilities and holiday and salary provisions
1 206
1 261
56
350
Accrued interest on loans received and bonds
100
-
(100)
-
tax loss asset
4 237
-
(4 237)
-
Other
196
21
(174)
34
Gross deferred tax assets
5 739
1 283
(4 455)
583
Deferred tax liability
-
-
(1 873)
4 795
Net deferred tax liability recognised in other
comprehensive income
31 December 2024
31 December 2023
Year ended
on 31 December 2024
Year ended
on 31 December 2023
of which:
Measurement of financial instruments
401
894
894
894
Annual Report 2024
Arctic Paper SA
(unless specified otherwise, all amounts are in PLN ‘000)
41
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.
Deferred income tax asset has not been recognised for the following titles:
‒ in respect of tax losses and negative temporary differences as it is not probable that there will be sufficient taxable income, which would allow
to deduct such differences.
‒ in respect of recognized impairment in subsidiaries as it is not probable that in the foreseeable future the above differences will be reversed
and sufficient taxable income to deduct such temporary negative differences.
2024
2024
2023
2023
Gross value
Tax effect
Gross value
Tax effect
Impairment allowances on shares in subsidiaries
(134 086)
(25 476)
(238 861)
(45 384)
Tax losses
12 869
6 682
20 829
3 958
(121 218)
(18 795)
(218 032)
(41 426)
Tax losses for which deferred tax have not been recognised expire in the years 2024-2029.
3.4 Earnings/(loss) per share
Significant accounting principles (policies)
The Company does not have instruments that cause dilution of potential ordinary shares. Accordingly, diluted earnings per share equals the
Company’s basic earnings per share and is calculated by dividing the profit attributable to equity holders of the Company by the weighted average
number of ordinary shares during the year.
The information regarding profit and the number of shares which was the base for calculation of earnings per share and diluted earnings per share
is presented below:
Year ended
on 31 December 2024
Year ended
on 31 December 2023
Net profit/(loss) for the reporting period
197 292
251 216
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
Weighted average diluted number of shares
69 287 783
69 287 783
Profit per share (in PLN)
2,85
3,63
Diluted profit per share (in PLN)
2,85
3,63
3.5 Dividend paid and proposed
Significant accounting principles (policies)
Dividend payments to shareholders are recognised as a liability in the Company’s separate financial statements in the period in which shareholder
approval occurs.
Dividend is paid based on the net profit disclosed in the separate annual financial statements of Arctic Paper SA after covering losses carried
forward from the previous years.
In 2024, the Company paid a total dividend of PLN 69,287,783, or PLN 1.40 gross per share.
As at the date of this report, the Company did not hold any preference shares in respect of dividends.
The possibility of disbursement of potential dividend by the Company to its shareholders depends on the level of payments 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
2024.
On 18 February 2025, the Management Board of the Parent Company, taking into account the preliminary financial results of the Parent Company
and the Arctic Paper SA Group for 2024, 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 2024, in the total amount of PLN 48,501,448.10, i.e. PLN 0.70 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 2024 profit and the payment of the dividend will be taken by the Annual General Meeting.
Annual Report 2024
Arctic Paper SA
(unless specified otherwise, all amounts are in PLN ‘000)
42
4. Notes to the separate statement of financial position
4.1 Investments in subsidiaries
4.1.1 Shares in subsidiaries and joint ventures
Significant accounting principles (policies)
Shares in subsidiaries
Shares in subsidiaries, affiliated entities and joint ventures are presented at historical cost basis, subject to impairment allowances.
As at
31 December 2024
As at
31 December 2023
Arctic Paper Kostrzyn SA
442 535
442 535
Arctic Paper Munkedals AB
88 175
88 175
Rottneros AB
101 616
101 616
Arctic Paper Investment AB, of which:
390 567
285 792
Arctic Paper Investment AB (shares)
307 858
307 858
Arctic Paper Investment AB (loans)
82 709
82 709
Arctic Paper Investment AB (impairment allowance)
-
(104 775)
Arctic Paper Investment GmbH
–
–
Arctic Paper Investment GmbH (shares)
120 031
120 031
Arctic Paper Investment GmbH (impairment allowance)
(120 031)
(120 031)
Arctic Paper Sverige AB
2 936
2 936
Arctic Paper Sverige AB (shares)
11 721
11 721
Arctic Paper Sverige AB (impairment allowance)
(8 785)
(8 785)
Arctic Paper Danmark A/S
2 947
2 947
Arctic Paper Danmark AB (shares)
5 539
5 539
Arctic Paper Danmark A/S (impairment allowance)
(2 592)
(2 592)
Arctic Paper Deutschland GmbH
4 977
4 977
Arctic Paper Norge AS
516
516
Arctic Norge AS (shares)
3 194
3 194
Arctic Paper Norge AS (impairment allowance)
(2 678)
(2 678)
Arctic Paper Italy srl
738
738
Arctic Paper UK Ltd.
522
522
Arctic Paper Polska Sp. z o.o.
406
406
Arctic Paper Benelux SA
387
387
Arctic Paper France SAS
326
326
Arctic Paper Espana SL
196
196
Arctic Paper Papierhandels GmbH
194
194
Arctic Paper Power Sp. z o.o. (formerly Arctic Paper East Sp. z o.o.)
7 600
2 602
Arctic Paper Baltic States SIA
64
64
Arctic Paper Schweiz AG
61
61
Kostrzyn Packaging Spółka z o.o.
25 990
25 990
Total
1 070 752
960 978
The value of investments in subsidiaries was disclosed on the basis of historic costs. In 2024, there was a surcharge on the shares of Arctic Power
Sp. z o.o. in the amount of PLN 5,000 thousand. In 2024, the impairment loss on the shares of Arctic Paper Investment AB in the amount of PLN
104,775 thousand was reversed.
4.1.2 Impairment of investments in subsidiaries
Significant estimates and judgements
As at 31 December 2024, an impairment test was carried out by the Company on its interest in Arctic Paper Grycksbo AB (100% of whose shares
are held by Arctic Paper Investment AB, a direct subsidiary of Arctic Paper SA) using the discounted cash flow method for the value of the
investment in both companies (note 4.1.1).
In connection with the test, the Company made a number of estimates, of which the forecast sales volume, sales prices, raw material purchase
prices, energy prices, discount rate and growth rate in the residual period had the greatest impact on the values recognised in these separate
financial statements. Some of the assumptions used to determine the value in use of the investments in Arctic Paper Grycksbo AB and Arctic
Paper Investment AB are based on unobservable inputs and are therefore subject to estimation uncertainty.
Annual Report 2024
Arctic Paper SA
(unless specified otherwise, all amounts are in PLN ‘000)
43
Impairment test of investments in subsidiaries
As at 31 December 2024 and 31 December 2023, and in earlier periods, the Company performed impairment tests in respect of its interest in
Arctic Paper Grycksbo AB.
As a result of the analysis, it was decided that is was necessary to carry out an impairment test of the investment in the subsidiary Arctic Paper
Grycksbo AB (directly and solely controlled by Arctic Paper Investment AB, in which the Parent Company holds 100% of the shares). The need
to test the investment in Arctic Paper Grycksbo was determined by the achievement of higher results than expected by the Company’s
Management Board realised as a result of market conditions, such as macroeconomic factors and higher demand in the paper segment produced
by Arctic Paper Grycksbo AB.
As at 31 December 2024 the Company held impairment tests to the value of its holding in Arctic Paper Investment AB, which is a direct shareholder
of Arctic Paper Grycksbo AB. The shares in Arctic Paper Grycksbo AB are the main component of the net assets of Arctic Paper Investment AB.
The estimated value of the investment (recoverable amount) of the shares in Arctic Paper Investment AB was determined as the value in use of
Arctic Paper Grycksbo AB determined by the discounted cash flow method as at 31 December 2024, which amounted to 249,122 thousand. In
addition, the value in use of Arctic Paper Grycksbo AB was reduced by financial liabilities (including Arctic Paper Grycksbo AB’s financial liabilities
to the Parent Company) and increased by cash and cash-pool, which is shown in Arctic Paper Grycksbo AB’s receivables. The total value in use
of the investment in shares in Arctic Paper Investment AB was PLN 411,469 thousand as at the balance sheet date, while the carrying amount of
the investment in Arctic Paper Investment AB as at 31 December 2024 was PLN 285,791 thousand.
As a result of the impairment test carried out as at 31 December 2024, it was decided to fully reverse the impairment allowances to the shares in
Arctic Paper Investment AB recognised in previous years, amounting to PLN 104,775 thousand. The reversal of the impairment allowance is
shown in the statement of profit or loss under Impairment of assets.
The key assumptions of the impairment test performed at 31 December 2024 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:
‒ 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 on the basis of budget data based on the expected demand for a particular type of paper
produced at AP Grycksbo and in correlation with raw material prices, mainly pulp. Sales prices take into account 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 9.8% (the
rate applied as at 31 December 2024: 9,7%). 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 table below shows the main assumptions used to calculate the value in use at 31 December 2024. The individual values represent the
Management Board’s assessment of the future trends of each assumption and are based on historical data from both internal and external sources
of the Paper Mill.
Main assumptions
2024
2023
Approved projections based on
2025-2029
2024-2028
Income tax rate
20,6%
20,6%
Weighted average cost of capital (WACC)
9,8%
9,7%
Growth rate in the residual period
0,0%
0,0%
The test conducted assumes that the Paper Mill will continue to operate during the residual period.
Annual Report 2024
Arctic Paper SA
(unless specified otherwise, all amounts are in PLN ‘000)
44
The table below presents an analysis of an impairment test held on 31 December 2024:
Parameter
Average annual change
of the parameter by
Impact on the value of
assets in use PLN
31 December 2024
Weighted average cost of capital (WACC)
+0.1 p.p.
(3 001)
Growth rate in the residual period
+0.1 p.p.
1 310
Sales volume only in the first year of the projection
1%
9 371
Sales prices only in the first year of the projection
1%
6 725
Pulp purchase prices only in the first year of the projection
1%
(2 133)
Energy purchase prices only in the first year of the projection
10%
(3 896)
Weighted average cost of capital (WACC)
-0.1 p.p.
3 063
Growth rate in the residual period
-0.1 p.p.
(1 283)
Sales volume in the first year of the projection
-1%
(9 473)
Sales prices only in the first year of the projection
-1%
(6 739)
Pulp purchase prices in the first year of the projection
-1%
2 133
Energy purchase prices in the first year of the projection
-10%
3 896
In the case of other companies, no grounds for conducting an impairment test were identified.
4.2 Other financial assets
Significant accounting principles (policies)
Financial assets
In compliance with IFRS 9, the Company 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.
‒ measured at fair value through profit or loss are mainly derivatives not designated for hedge accounting purposes.
‒ hedging financial instruments: Hedging financial instruments (interest rate swaps) are valued in accordance with the hedge accounting
principles recognised under 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. The Company divides financial assets into long-term and short-term.
The Company reports loans granted and interest on loans in the statement of cash flows under cash flows from operating activities.
The Company considers a financial asset to be past due when it is more than 90 days past due.
The Company considers financial instruments to have low credit risk if the instrument’s rating is within an investment grade – depending on the
rating agency.
Annual Report 2024
Arctic Paper SA
(unless specified otherwise, all amounts are in PLN ‘000)
45
Repayment date
As at
31 December 2024
As at
31 December 2023
Short-term
Loans granted to Paper Grycksbo AB
2024 *
140
7 519
– amount: EUR 8,400 thousand (accrued interest)
Loans granted to Paper Grycksbo AB
57
-
– amount: EUR 5,820 thousand (BIO25 loan accrued interest)
Loans granted to Arctic Paper Mochenwangen GmbH
29 288
28 856
– amount: EUR 6,543 thousand
Loan granted to Arctic Paper Investment GmbH
30 269
30 269
– amount: EUR 6,992 thousand
Impairment allowances on assets
(59 557)
(59 125)
– applies to Arctic Paper Investment GmbH and Arctic Paper Mochenwangen GmbH
Total
197
7 519
*The possibility of repayment on demand within 14 days
Repayment date
As at
31 December 2024
As at
31 December 2023
Long-term
Loan granted to Paper Grycksbo AB
24 869
21 914
– amount: EUR 5,820 thousand (BIO25 Loan)
Loan granted to Arctic Paper Power Sp. z o.o
14 453
-
– amount: PLN 14,300 (plus accrued interest)
Loan granted to Kostrzyn Packaging Sp. z o.o.
10 565
-
amount: PLN 9 900 thousand (plus accrued interest)
Loan granted to Arctic Paper Investment GmbH
4 286
4 286
– amount: EUR 990 thousand
Impairment allowances on assets
(4 286)
(4 286)
– applies to Arctic Paper Investment GmbH
Measurement of financial instruments
1 331
3 442
Total
51 218
25 356
Total other financial assets
51 415
32 875
4.2.1 Change in loans in 2024
01.01.2024
Proceeds
Expenditure
FX
differences
Accrued
interest
Creation of an
allowance
31.12.2024
Arctic Paper Grycksbo AB
29 433
(28 695)
(523)
(74)
141
Arctic Paper Grycksbo AB Bio25
24 985
(117)
58
24 926
Kostrzyn Packaging Spółka z o.o.
9 900
665
10 565
Arctic Power Sp. z. o.o.
14 300
153
14 453
Arctic Paper Mochenwangen
432
(432)
Annual Report 2024
Arctic Paper SA
(unless specified otherwise, all amounts are in PLN ‘000)
46
4.3 Trade and other receivables
Significant accounting principles (policies)
Trade receivables are recognised and reported at the amounts originally invoiced, including an allowance for doubtful debts. The allowance for
receivables is estimated according to principles presented in note 7.1. The allowance for doubtful receivables is estimated when collection of the
full amount of the receivable is no longer probable.
If the effect of the time value of money is material, the value of receivables is determined by discounting the estimated future cash flows to present
value using a discount rate that reflects current market assessments of the time value of money. If the discounting method is used, the increase
in receivables due to the passage of time is recognised as finance income.
Budgetary receivables are presented within trade and other receivables, except for corporate income tax receivables that constitute a separate
item in the statement of financial position. These are income tax receivables from an entity within the Tax Group.
Impairment of receivables
As at each balance sheet date, the Company assesses whether there is any objective evidence that a financial asset or a group of financial assets
is impaired.
Under IFRS 9, financial assets are measured at amortised cost or fair value through other comprehensive income (except for investments in
capital assets and contract assets). The impairment model is based on expected loss calculations. The most significant item of financial assets in
the Company’s financial statements that is subject to the expected credit loss calculation rules are loans and trade receivables.
In accordance with IFRS 9, the Entity 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. For trade receivables, the Company applies a simplified approach and measures
the allowance for expected credit losses at an amount equal to the expected credit losses over the life of the asset.
For trade receivables, the Company classifies receivables into the following categories:
‒ group 1 – includes trade receivables for which a simplified approach has been applied to the valuation of expected credit losses over the
lifetime of receivables, except for receivables included in group 2;
‒ group 2 – includes trade receivables identified individually as uncollectible.
The Company applies a simplified model to recognise impairment allowances to trade receivables. In the simplified model, the Company 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 Company 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.
The Company only holds trade receivables and financial assets from related parties, so in determining expected credit losses it analyses the
budgets of these companies, which also take into account macroeconomic factors
In determining whether the credit risk of a financial asset has increased significantly since initial recognition and in estimating expected credit
losses, the company considers reasonable and demonstrable information that is relevant and available without undue cost or effort The company
assumes that the credit risk of a financial asset has increased significantly if it is more than 60 days past due.
Note
As at
31 December 2024
As at
31 December 2023
Trade receivables from related parties
7.1
47 349
38 317
Trade receivables from other entities
168
148
Total (gross) receivables
47 517
38 466
Impairment allowances to receivables
(29 911)
(22 531)
Net receivables
17 606
15 935
The Company has no receivables payable after 12 months.
As at 31 December 2024, the total cumulative value of short-term receivables write-downs from AP Investment GmbH and AP Mochenwangen
GmbH is PLN 29,911 thousand .
Terms and conditions of transactions with related parties are presented in note 7.1.
Annual Report 2024
Arctic Paper SA
(unless specified otherwise, all amounts are in PLN ‘000)
47
Ageing of trade receivables as at 31 December 2024
Ageing of trade receivables as at 31 December 2024
current
1-30
31-90
91-180
181-365
over 365
Trade receivables from related parties
17 438
17 176
258
0
0
0
4
Trade receivables from other entities
168
87
19
6
47
0
9
Net receivables
17 606
17 263
277
6
47
0
13
4.4 Other non-financial assets
As at
31 December 2024
As at
31 December 2023
Insurance
140
204
VAT refundable
7 481
4 747
Accounting for costs related to financing
1 691
1 985
Other
1 037
980
Total
10 349
7 916
– short-term
10 349
7 916
Total
10 349
7 916
4.5 Cash and cash equivalents
Significant accounting principles (policies)
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 3 months or less, as well as deposits with a longer maturity, provided they are repayable on demand.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above.
Cash and cash equivalents
Cash at bank earns interest at variable interest rates based on overnight bank deposit rates.
Short-term deposits are made for varying periods of between one day to 6 months depending on the immediate cash requirements of the Company
and earn interest at the respective short-term deposit rates. As at 31.12.2024, the Company had short-term deposits of PLN 75,343 thousand.
The fair value of cash and cash equivalents at 31 December 2024 is PLN 176,985 thousand (31 December 2023: PLN 264.150 thousand).
Cash
As at
31 December 2024
As at
31 December 2023
Cash in bank and on hand
101 642
166 320
Short-term deposits
75 343
97 830
Total
176 985
264 150
4.6 Share capital and other capitals
4.6.1 Share capital
Share capital
As at
31 December 2024
As at
31 December 2023
Ordinary series a shares
50 000
50 000
Ordinary series B shares
44 253 500
44 253 500
Ordinary series C shares
8 100 000
8 100 000
Ordinary series E shares
3 000 000
3 000 000
Ordinary series F shares
13 884 283
13 884 283
Total number of shares
69 287 783
69 287 783
Value of share capital (in PLN)
69 287 783
69 287 783
Annual Report 2024
Arctic Paper SA
(unless specified otherwise, all amounts are in PLN ‘000)
48
Nominal value of shares
All outstanding shares currently have a nominal value of PLN 1 and have been fully paid.
Purchase of treasury shares
Until the day of these financial statements, the Management Board of Arctic Paper SA has not purchased any treasury shares of the Company.
Major shareholders
As at
31 December 2024
As at
31 December 2023
Share in the share capital
Share in the total number of
votes
Share in the share capital
Share in the total number of
votes
Thomas Onstad
68,26%
68,26%
68,13%
68,13%
– indirectly via
60,58%
60,58%
60,01%
60,01%
Nemus Holding AB
59,71%
59,71%
59,15%
59,15%
other entity
0,87%
0,87%
0,87%
0,87%
– directly
7,68%
7,68%
8,12%
8,12%
Other
31,74%
31,74%
31,87%
31,87%
4.6.2 FX differences on translation of investments in foreign entities
Swedish krona is the functional currency of the Company’s foreign branch.
As at the balance sheet date, the assets and liabilities of the branch are translated into the presentation currency of the Group and its statement
of profit or loss is translated using the average weighted exchange rate for the relevant reporting period. The FX differences on translation are
recognised in other total comprehensive income and cumulated in a separate equity item.
As at 31 December 2024, FX differences on translation of the foreign branch recognised in capital amounted to PLN 2,571 thousand (as at
31 December 2023: PLN 2.138 thousand). The FX differences on translation of the foreign branch, recognised in the statement of total
comprehensive income, amounted to PLN 433 thousand in 2024 and PLN 676 thousand in 2023.
4.6.3 Supplementary capital
The supplementary capital was originally established from the issue premium in 2009 of PLN 35,985 thousand which was reduced by the costs
of the issue recognised as a decrease of the supplementary capital and was modified over the successive years as a result of subsequent share
issues and allocations from profit.
As at 31.12.2024
As at 31 31.12.2023
Excess of issue price over nominal value (agio)
134 257
134 257
Capitals under Article 396 of the Code of Commercial Companies and Partnerships
19 771
19 771
Decrease of share capital
498 632
498 632
Capital created from company profits
217 757
35 829
Coverage of losses with supplementary capital
(244 683)
(244 683)
TOTAL
625 734
443 806
Pursuant to Article 396 of the Code of Commercial Companies and Partnerships, the company also includes in the item of supplementary capital
the amount of profits representing 8% to cover losses of PLN 19,771 thousand.
As at 31 December 2024, the total value of the Company’s supplementary capital is PLN 625,734 thousand (31 December 2023: PLN 443.806
thousand). The increase in the supplementary capital by PLN 181,928 thousand resulted from the distribution of profit for 2023 in accordance with
the resolution of the General Meeting of Shareholders of Arctic Paper SA
4.6.4 Other capital
As at 31 December 2024, the total value of the Company’s other reserves is PLN 136,588 thousand (31 December 2023: PLN 138.298 thousand).
The negative valuation of financial instruments in the amount of PLN 1,710 thousand contributed to the change in other reserves.
4.6.5 Retained earnings / Uncovered losses and dividend restrictions
As at 31.12.2024, retained earnings amounted to PLN 130,520 thousand. During 2024, the company achieved a net profit of PLN 197,292
thousand. Restrictions on dividends and distributions for 2024 are set out in note 3.5.
Annual Report 2024
Arctic Paper SA
(unless specified otherwise, all amounts are in PLN ‘000)
49
4.7 Interest-bearing bank loans and cash-pooling
Significant accounting principles (policies)
At initial recognition, all bank loans are recognised at fair value less costs associated with obtaining the loan, split into long-term and short-term
portions.
After initial recognition, interest-bearing term loans are measured at amortised cost using the effective interest rate method.
revenue 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.
Cash-pooling (group cash management) is a core activity of the company and therefore cash-pooling-related flows are presented in the operating
section of the statement of cash flows.
Pursuant to the loan agreement, the Company repaid principal and interest instalments of PLN 28,784 thousand in 2024. Other changes in the
value of loans and borrowings result, among other things, from a decrease in cash-pool liabilities (PLN -73,467 thousand).
4.7.1 Interest-bearing bank loans and cash-pooling
Repayment
date
Interest rate
As at
31 December 2024
As at
31 December
2023
Short-term
Long-term loan syndicate of banks (Santander,
Pekao, BNP) PLN short-term part
2026
*
7,64%
12 126
13 383
Long-term loan syndicate of banks (Santander,
Pekao, BNP) EUR short-term part
2026
*
4,51%
12 161
13 225
Cashpooling Arctic Paper Grycksbo AB
151 509
148 064
Cashpooling Arctic Paper Kostrzyn SA
93 916
183 227
Cashpooling Arctic Paper Munkedals AB
34 557
22 159
Total
304 269
380 057
Repayment
date
Interest rate
As at
31 December 2024
As at
31 December
2023
Long-term
Long-term loan syndicate of banks (Santander,
Pekao, BNP) PLN long-term part
2026
*
7,64%
7 060
21 417
Long-term loan syndicate of banks (Santander,
Pekao, BNP) EUR long-term part
2026
*
4,51%
31 542
20 663
Total
38 602
42 080
* The interest rate depends on the reference rates (WIBOR 3M, EURIBOR 3M) and on compliance with certain financial ratios
** The interest rate depends on the reference rates (WIBOR 1M, EURIBOR 1M) and on compliance with certain financial ratios
In connection with the term and revolving loan agreements, signed on 2 April 2021, the Company agreed to maintain specified financial ratios
Group that are calculated at the end of each quarter. As at 31 December 2024, the Group has not maintained the level of Cashflow Cover required
by the loan agreement with the consortium of financing banks (Pekao SA, Santander Bank SA and BNP Paribas SA). The main reason for this
was the high level of investment associated with the implementation of the 4P strategy in 2024. Prior to the balance sheet date, Arctic Paper SA
received written assurance from the syndicate of financing banks that the Group’s failure to meet the required Cashflow Cover ratio as at
31 December 2024 does not constitute an event of default under the loan agreement of 2 April 2021 (“default"), and therefore this situation has
no impact on the presentation of data in the Group’s consolidated financial statements. The second of the ratios specified in the agreement, Net
debt/EBITDA, remains at a level that meets the requirements of the loan agreement.
4.7.2 Collateral to loans
In connection with the term and revolving loan agreements signed on 2 April 2021, on 11 May 2021 the Company signed agreements and
declarations pursuant to which, in favour of Bank Santander Bank Polska SA, acting as Security Agent, collateral was established for the above
receivables and other claims, i.e.
1. under Polish law – Collateral Documents establishing the following Collateral:
‒ financial and registered pledges on all shares or interests held by the Company and Arctic Paper Kostrzyn SA registered in Poland, with the
exception of the Company’s shares;
‒ mortgages on all real properties located in Poland and owned by the Guarantors;
‒ registered pledges on all material rights and movable assets owned by the Company and the Guarantors, constituting an organised part of
enterprise, located in Poland (with the exception of the assets listed in the Loan Agreement);
Annual Report 2024
Arctic Paper SA
(unless specified otherwise, all amounts are in PLN ‘000)
50
‒ assignment of (existing and future) property insurance policies relating to the assets of the Company Arctic Paper Kostrzyn SA;
‒ declarations by the Company and Arctic Paper Kostrzyn SA on voluntary submission to enforcement, in the form of a notary deed;
‒ financial pledges and registered pledges on the bank accounts of the Company and Arctic Paper Kostrzyn SA registered in Poland (the
pledges relate to current and future bank accounts; in the event of an event of default, in the event that the pledged receivable or part thereof
becomes due, the Company may not draw funds from the pledged receivable, nor may it instruct the bank maintaining the account to disburse
the funds);
‒ powers of attorney to the Polish bank accounts of the Company and Arctic Paper Kostrzyn SA;
‒ civil surety for liabilities granted by Arctic Paper SA, Arctic Paper Kostrzyn SA, Arctic Paper Munkedals AB, Arctic Paper Grycksbo AB
2. under Swedish law – Collateral Documents establishing the following Collateral:
‒ pledges over all the Company’s and Arctic Paper Munkedals AB, Arctic Paper Grycksbo AB shares or interests registered in Sweden
‒ mortgages on all real properties located in Sweden and owned by Arctic Paper Munkedals AB, Arctic Paper Grycksbo AB, provided that only
existing mortgage deeds are subject to such security;
‒ corporate mortgage loans granted by the Guarantors registered in Sweden as long as such collateral covers solely the existing mortgage
deeds;
‒ assignment of (existing and future) insurance policies covering the assets of Arctic Paper Munkedals AB and Arctic Paper Grycksbo AB (with
the exception of insurance policies listed in the Loan Agreement);
‒ pledges on Swedish bank accounts of Arctic Paper Munkedals AB and Arctic Paper Grycksbo AB, as long as such collateral is without
prejudice to free management of funds deposited on bank accounts until an event of default specified in the Loan Agreement.
4.8 Trade and other payables and other financial liabilities
Significant accounting principles (policies)
In accordance with IFRS 9, the Company classifies financial liabilities (trade payables, loans and leases) as measured at amortised cost:
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, cancelled or expired.
Other current liabilities include, in particular, liabilities to the tax office for personal income tax and liabilities to Social Security.
Other non-financial liabilities are recognised at the amount payable.
4.8.1 Trade and other payables (short-term)
Note
As at
31 December 2024
As at
31 December 2023
Due to related parties
7.1
433
471
Due to other entities
17 396
18 468
Trade payables
17 829
18 939
Liabilities towards the budget
761
610
Advisory services
11
470
Other liabilities*
8 501
408
Other liabilities
9 274
1 488
The terms and conditions of financial liabilities presented above:
‒ Terms and conditions of transactions with related parties are presented in note 7.1.
‒ the remaining liabilities are interest-free, with an average maturity of 30 days.
* At the end of 2024, the company shows a liability to its subsidiary Arctic Paper Kostrzyn SA for reimbursement of advance income tax payments
in the amount of PLN 8,438 thousand. In order to better reflect the nature of this liability, it is presented in these financial statements under Other
current liabilities in the balance sheet. This liability arises from settlements within the Arctic Paper Tax Group (PGK), which was formed by Arctic
Paper SA and Arctic Paper Kostrzyn SA under the concluded agreement.
Annual Report 2024
Arctic Paper SA
(unless specified otherwise, all amounts are in PLN ‘000)
51
4.8.2 Other financial liabilities
As at
31 December 2024
As at
31 December 2023
Other financial liabilities
Lease liabilities
17
55
Total
17
55
Other financial liabilities
Long-term
-
17
Short-term
17
38
Total
17
55
4.9 Contingent liabilities
As at 31 December 2024, the Company had no contingent liabilities.
4.9.1 Tax settlements
Tax settlements on goods and services and other areas of activity subject to regulations (like customs or FX matters) may be inspected by
administrative bodies that are entitled to impose high penalties and sanctions.
No reference to stable legal regulations in Poland results in lack of clarity and consistency in the regulations. Frequent differences of opinion as
to legal interpretation of tax regulations – both inside state authorities and between state authorities and enterprises – generate areas of uncertainty
and conflicts. As a result, tax risks in Poland are much higher than in countries with a more developed tax system.
4.9.2 Uncertainties related to tax settlements
Corporate income tax regulations 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.
Tax settlements may be audited by the authorities, who have the power to impose heavy fines and penalties, and any additional tax liabilities
resulting from the audit must be paid with high interest. As a result, tax risk in Poland is higher than in countries with more mature tax systems.
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 Company recognises and measures assets or liabilities applying the requirements of IAS 12 Income Taxes, on the basis of profit (tax loss),
taxation base, carried forward tax losses, unutilised tax credits and applicable tax rates, and further subject to uncertainties related to 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.
Tax settlements may be subject to inspections for five years from the end of the year in which the tax was paid. Consequently, the Company may
be subject to additional tax liabilities, which may arise as a result of additional tax audits.
In the opinion of the Management Board, such risk does not exist as at 31 December 2024 and therefore the Company has not established any
provision for recognised and quantifiable tax risk.
5. Notes on financial instruments
Major accounting policies
The Company holds the following categories of financial instruments:
‒ instruments measured at amortised cost,
‒ instruments measured at fair value through profit or loss,
‒ hedging instruments (see Note 5.3 for a description of hedge accounting policies).
The derivatives used by the Company to hedge its exposure to interest rate movements are primarily interest rate swap contracts (interest rate
swaps). Such derivative financial instruments are measured at fair value. Such derivatives are stated as assets when the value is positive and as
liabilities when the value is negative.
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,
Annual Report 2024
Arctic Paper SA
(unless specified otherwise, all amounts are in PLN ‘000)
52
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 Company 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.
Fair value of financial instruments for which there is no active market is measured using the appropriate valuation techniques. In selecting
appropriate methods and assumptions, the Company is guided by professional judgment
The fair value of interest rate swap contracts is determined based on a valuation model which takes into account observable market data,
particularly including current term interest rates.
In hedge accounting, hedges held by the Company are classified as cash flow hedges, hedging against changes in cash flows that are attributable
to a particular risk associated with a recognised asset, liability or forecasted transaction.
At the inception of a hedge relationship, the Company formally designates and documents the hedge relationship as well as the risk management
objective and strategy for undertaking the hedge. 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.
Cash flow hedge
Cash flow hedges are hedges securing for the risk of cash flow fluctuations which can be attributed to a particular kind of risk inherent in the given
item of assets or liabilities or in a contemplated investment of high probability, and which could influence 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 statement of profit or loss in the same period
or periods in which the asset acquired or liability assumed affects profit or loss.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or the hedge no longer qualifies for
hedge accounting. At that point in time, any cumulative profit or loss on the hedging instrument that has been recognised directly in other
comprehensive income and accumulated in equity, remains recognised in equity until the forecast transaction occurs. If the forecast transaction
is no longer expected to occur, the net cumulative profit or loss recognised in equity is recognised in net profit or loss for the period.
The Company holds the following financial instruments: cash in bank accounts, loans, borrowings, receivables, finance lease obligations and
interest SWAP contracts.
5.1 Fair value of each class of financial instruments
As the book values of the Company’s financial instruments do not differ significantly from their fair value (except as described in the table below).
The table below shows all financial instruments by their carrying amounts, broken down by asset and liability category.
Category
in compliance with IFRS 9
Carrying amount
31 December
2024
31 December
2023
Financial assets
Other (long-term) financial assets
WwZK
49 887
21 914
Trade and other receivables
WwZK
17 606
15 935
Cash and cash equivalents
WwZK
176 985
264 150
Derivative instruments
IRZ
1 331
3 442
Other (short-term) financial assets
WwZK
197
7 519
Total
246 006
312 960
Financial liabilities
Interest-bearing bank loans
WwZK
342 871
422 137
Trade payables
WwZK
17 829
18 939
Finance lease liabilities/other liabilities
WwZK
17
55
Total
360 717
441 131
WwZK – Financial assets/liabilities measured at amortised cost
WwWGpWF – financial assets/liabilities measured at fair value through profit or loss
IRZ – Hedge accounting instruments
Loans with the carrying amount of PLN 342,871 thousand as at 31 December 2024 have fair value of PLN 348,106 thousand.
Annual Report 2024
Arctic Paper SA
(unless specified otherwise, all amounts are in PLN ‘000)
53
As at 31 December 2024 and as at 31 December 2023, financial instruments as at the measurement hierarchy are qualified to level 2 and in case
of derivative instruments.
5.2 Changes in assets and liabilities arising from financing activities
Year ended
on 31 December 2024
01 January
2024
Changes resulting from
cash flows from financing
activity
Effects of currency
exchange rate
fluctuations
Change to fair
values
Other
changes
31 December
2024
Interest-bearing bank loans
(68 684)
3 915
679
-
1 201
(62 889)
Finance lease liabilities
(55)
38
-
-
(17)
Derivative financial instruments (assets)
3 442
(2 734)
-
623
-
1 331
Total assets and liabilities arising from
financing activities
(65 297)
1 219
679
623
1 201
(61 575)
5.3 Collateral
In connection with interest rate risk as detailed in note 6.1.1, the Company hedges its future cash flows that may fluctuate as a result of the risk.
As at 31 December 2024, the Company had loans with a fair value of PLN 43,139 thousand (PLN 75,501 thousand as at 31 December 2023)
bearing a variable interest rate, which were hedged with SWAP derivatives.
The effectiveness of the hedging instruments is very high due to the fact that the parameters of the hedging instruments are matched to the
hedged items, particularly with regard to the denominations and dates of the cash flows, the interest rate underlying the calculation of these flows,
and the interest accrual conventions. The company assesses whether the derivative designated in each hedging relationship will effectively offset
changes in the cash flows of the hedged item using the notional derivative method. The hedge ratios are 100% and the only source of potential
ineffectiveness we identify is the two-day difference in maturity of the hedged item and the hedging instrument. The ratios and sources of
ineffectiveness are presented in the hedge accounting documentation.
Cash flow hedge
As at 31 December 2024, the Company used cash flow hedge accounting for the following hedging items:
‒ the Company designated SWAP derivatives to hedge accounting to hedge interest payments in EUR on a bank loan in EUR,
‒ the Company designated SWAP derivatives to hedge accounting to hedge interest payments in PLN on a bank loan in PLN,
Cash flow volatility hedge accounting related to variable loan interest rate of the long-term loan with the use of SWAP transactions
‒ The table below presents detailed information concerning the hedging relationship in the cash flow hedge accounting related to the payment
of interest:
SWAP on the interest rate
EUR
PLN
Type of hedge
Hedge of cash flows related to variable interest rate on
the EUR long-term loan
Hedge of cash flows related to variable interest rate on
the PLN long-term loan
Hedged position
The hedged item are future EUR interest flows in EUR
related to a loan in EUR calculated on the basis of 3M
EURIBOR
Future PLN interest flows on PLN loan calculated on the
basis of 3M WIBOR
Hedging instruments
SWAP transaction under which the Company agreed
to pay interest in EUR on the EUR loan on the basis of
a fixed interest rate
SWAP transaction under which the Company agreed to
pay interest in PLN on the PLN loan on the basis of
a fixed interest rate
Currency
Date
Fair value of the loan PLN at 31.12.2024 *
EUR
2021-04-02 – 2026-04-02
7 392 123
EUR
2021-04-02 – 2026-04-02
5 721 103
EUR
2021-04-02 – 2026-04-02
5 721 103
18 834 328
PLN
2021-04-02 – 2026-04-02
7 518 569
PLN
2021-04-02 – 2026-04-02
5 834 505
PLN
2021-04-02 – 2026-04-02
5 834 505
19 187 579
The value secured is the interest calculated on the value of the loan in the amount of
38 021 907
Interest secured by an interest rate swap
2 316 015
* values given in full PLN
The fixed interest rate on the EUR flow hedge is: 0.11%, and for flows in PLN it is: 1,21%.
Annual Report 2024
Arctic Paper SA
(unless specified otherwise, all amounts are in PLN ‘000)
54
The table below presents the fair value of hedging instruments in cash flow hedge accounting as at 31 December 2024 and the comparative data:
Status as at 31 December 2024
Status as at 31 December 2023
Assets
Equity and liabilities
Assets
Equity and liabilities
SWAP
1 331
-
3 442
-
Total hedging derivative instruments
1 331
-
3 442
-
Up to 1 year
1 to 5 years
Over 5 years
Total
interest rate SWAP
interest repayments (in PLN 000)
1 475
841
-
2 316
The table below presents the amounts related to cash flow hedge accounting that were recognised in 2024 by the Company in the statement of
profit or loss and in the statement of total comprehensive income:
Year ended on
31 December 2024
Revaluation reserve as at 31 December 2024 – changes of fair value of hedging derivative instruments due to the
hedged risk, corresponding to effective hedging, less the tax effect
(1 710)
Ineffective part of the change in fair value measurement due to the hedged risk, recognised in finance income or
expenses
-
The period of the anticipated hedged flows
01 January 2025 – 02 April 2026
The table below presents changes to revaluation reserve due to cash flow hedge accounting in 2024:
Year ended on
31 December 2024
Revaluation reserve as at 1 January 2024
2 788
Deferral to changes of fair value measurement of the hedging derivative instruments due to the hedged risk,
corresponding to the effective hedge, less the tax effect
(1 710)
The amount of the changes of fair value measurement of the hedging derivative instruments due to the hedged
risk, removed from the revaluation reserve and transferred to finance income or expenses
-
Revaluation reserve as at 31 December 2024
1 078
6. Financial risk management
6.1 Financial risk factors
The core financial instruments used by the Company include bank loans, cash on hand and loans granted and borrowings received within the
Group. The main purpose of these financial instruments is to raise finance for the Company’s and Group’s operations. The Group has various
other financial instruments such as trade receivables and payables which arise directly from its operations.
The principle used by the Company currently and throughout the whole period covered with these financial statements is not to trade in financial
instruments for speculative purposes.
The core risks arising from the Company’s financial instruments include: interest rate risk, liquidity risk, FX risk and credit risk.
The Management Board verifies and approves the management principles of each type of risk – the principles are presented herebelow. The
Company has been monitoring market prices of holdings of financial instruments.
6.1.1 Interest rate risk
The Company’s exposure to the risk of changes in market interest rates relates primarily to financial liabilities and granted variable interest loans.
Annual Report 2024
Arctic Paper SA
(unless specified otherwise, all amounts are in PLN ‘000)
55
Interest rate risk – sensitivity to fluctuations
The following table shows financial instruments broken down into fixed and floating rates
31.12.2024
31.12.2023
Financial instruments
carrying amount
carrying amount
- with a fixed interest rate
Trade receivables
17 606
15 935
Loans granted and the employee fund
50 084
29 433
Other financial assets
1 331
3 442
Cash and cash equivalents
176 985
264 150
Trade payables
(17 829)
(18 939)
228 177
294 021
- with a variable interest rate
Interest-bearing bank loans
(62 889)
(68 687)
Lease liabilities
(17)
(55)
(62 906)
(68 743)
* cash-pool settlement was not included in the analysis, as it is only between participants, i.e. affiliated companies (negligible risk).
The following table shows the sensitivity of gross profit/(loss) to reasonably possible changes in interest rates assuming other factors remain
constant. No impact on equity or total comprehensive income has been presented.
Impact on profit before tax 2024
interest rate
interest of the financial year
(+) 1%
(-) 1%
bank loans in EUR
4,51%
843
187
(187)
bank loans in PLN
7,64%
1 751
229
(229)
leases
5,70%
2
-
-
SWAP settlement
fixed interest rate
(2 734)
n/a
n/a
6.1.2 FX risk
The Company is exposed to transactional FX risk. Such risks arise mainly from the Company’s receipt of dividends from subsidiaries and the
granting and receiving of loans in currencies, and to a lesser extent from purchase transactions in currencies other than its functional currency.
The following table demonstrates the sensitivity of gross profit/(loss) (due to changes in the fair value of monetary assets and liabilities) and the
Company’s equity to reasonably possible change of FX rates with all other variables held constant. The calculations include only the impact of
exchange rate changes on balance sheet items expressed in foreign currencies, and then for each currency an increase or decrease in the
exchange rate by 1% was assumed.
31.12.2024
PLN
EUR
SEK
Other
Trade receivables
9 523
3 717
3 889
477
Loans granted
25 018
25 066
-
-
Cash
38 143
135 007
3 309
526
Bank loans
19 188
43 703
-
-
Trade payables
9 627
3 584
4 237
381
Net exposure
43 869
116 503
2 960
623
31.12.2023
PLN
EUR
SEK
Other
Trade receivables
9 645
2 856
3 175
259
Loans granted
-
29 433
-
-
Cash
51 332
203 770
8 519
529
Bank loans
34 800
33 888
-
-
Trade payables
9 912
3 708
5 033
286
Net exposure
16 266
198 463
6 661
502
Annual Report 2024
Arctic Paper SA
(unless specified otherwise, all amounts are in PLN ‘000)
56
Increase/decrease of FX rates
Impact on gross profit or loss
31 December 2024 – SEK
+1%
30
-1%
(30)
31 December 2024 – EUR
+1%
1 164
-1%
(1 164)
31 December 2024 – other
+1%
6
-1%
(6)
Increase/decrease of FX rates
Impact on gross profit or loss
31 December 2023 – SEK
+1%
67
-1%
(67)
31 December 2023 – EUR
+1%
1 985
-1%
(1 985)
31 December 2023 – other
+1%
5
-1%
(5)
6.1.3 Credit risk
With respect to the Company’s financial assets such as cash and cash equivalents, the Company’s exposure to credit risk arises from default of
the counter party, with a maximum exposure equal to the carrying amount of those instruments.
31.12.2024
31.12.2023
Other financial assets
51 415
32 875
Trade receivables
17 606
15 935
Cash and cash equivalents
176 985
*
264 150
Total
246 007
312 960
* cash in the amount of PLN 176,985 thousand serves as collateral for loan liabilities
There are no significant concentrations of credit risk in the Company with the exception of Group entities, in particular relating to loans to Arctic
Paper Grycksbo AB (other financial assets) and cash resulting from Group companies’ participation in the cash-pool system.
The table below presents information on credit risk exposure for trade receivables and other financial assets (loans and cash-pooling) as at
31 December 2024 and 31 December 2023:
31.12.2024
31.12.2023
Group 1
Group 2
Group 1
Group 2
Trade receivables – gross value
17 606
29 911
15 935
22 531
Impairment allowances
29 911
-
22 531
Trade receivables – carrying amount
17 606
-
15 935
-
Other financial assets – gross value
51 415
63 843
32 875
59 125
Impairment allowances
-
63 843
-
59 125
The company only works with group entities. Credit risk is assessed taking into account the individual characteristics of each of the Company’s
counterparties. Group 2 assets were fully covered by an impairment allowance. For group 1, the default rates calculated for the previous 3 years
are zero, therefore the Company did not recognize expected credit losses on these assets as at 31 December 2024 and 31 December 2023.
The Company recognises impairment allowances that correspond to the estimated values of expected credit losses. The core component of such
allowances is the part covering specific losses due to exposure to a single material risk. There is a significant concentration of risk in the “Germany
non-business” segment.
Annual Report 2024
Arctic Paper SA
(unless specified otherwise, all amounts are in PLN ‘000)
57
Poland
Sweden
Germany
Other
Carrying out economic activities
Trade receivables
6 077
11 350
-
169
Allowances for trade receivables
-
-
-
-
Loans granted
25 018
25 066
-
-
Allowance for loans granted
-
-
-
-
Not carrying out economic activities
Trade receivables
-
-
7 388
-
Allowances for trade receivables
-
-
(7 380)
-
Loans granted
-
-
3 184
-
Allowance for loans granted
-
-
(3 184)
-
6.1.4 Liquidity risk
The Company monitors its risk to a shortage of funds using a recurring liquidity planning tool. The tool considers the maturity of both its financial
investments and financial assets (e.g. receivables, other financial assets) and projected cash flows from guaranteed bank loans. Information on
financial assets is included in note 4.2.
The table below presents the maturity profile of the Company’s financial liabilities at 31 December 2024 based on maturities of contractual
undiscounted payments.
31 December 2024
Carrying
amount
Upon request
Less than 3
months
3 to 12
months
1 to 5
years
Over
5 years
Total
Interest-bearing bank loans
342 871
280 569
25 763
14 574
24 896
345 775
Other liabilities
26 284
26 271
13
-
26 284
306 840
25 776
14 574
24 869
372 059
31 December 2023
Carrying
amount
Upon request
Less than 3
months
3 to 12
months
1 to 5
years
Over
5 years
Total
Interest-bearing bank loans
422 137
353 670
28 390
44 905
-
426 965
Other liabilities
18 939
18 948
29
17
-
18 994
372 398
28 419
44 922
-
445 959
Financial liabilities with a maturity period of less than 3 months include, among others, cash-pooling liabilities towards related parties, as at
31 December 2024 they amounted to PLN 280,569 thousand.
As at 31 December 2024, the Company held no contingent liabilities.
6.2 Capital risk management
The primary objective of the Company’s capital management is to ensure that it maintains an appropriate credit rating and healthy capital ratios
in order to support its business and maximise shareholder value. The Company has not set a specific level of credit rating and capital ratios that
it considers appropriate, as it depends on current market conditions and the Group’s situation.
The Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions. No changes were made in
the objectives, policies or processes during the year ended on 31 December 2024 and 31 December 2023.
As at
31 December 2024
As at
31 December 2023
Interest-bearing bank loans and leasing liabilities
342 888
336 834
Trade and other payables
27 103
20 558
Minus cash and cash equivalents
(176 985)
(213 272)
Net debt
193 006
144 119
Equity
964 703
776 970
Equity and net debt
1 157 709
921 089
Leverage ratio
0,17
0,16
The Company monitors its equity using a leverage ratio, which is net debt divided by total equity plus net debt. The Company’s net debt includes
interest-bearing loans and borrowings, trade payables and other current liabilities, less cash and cash equivalents.
Annual Report 2024
Arctic Paper SA
(unless specified otherwise, all amounts are in PLN ‘000)
58
7. Other explanatory notes
7.1 Information on related parties
Sales to
related
parties
Interest –
operational
income
Dividend
received
Interest –
finance
costs
Guarantees
obtained –
other
finance
costs
Receivable
s from
related
parties
including
overdue
Loan
receivables
, including
cash-
pooling
Liabilities to
related
parties*
including
overdue,
after the
payment
date
Loans
liabilities,
including
cash-
pooling
Parent company:
Nemus Holding AB
2024
-
-
-
-
-
-
-
-
-
-
-
2023
2
-
-
-
-
-
-
-
-
-
-
Subsidiaries
2024
15 180
2 580
106 097
4 891
3 112
47 349
29 911
196 635
8 871
-
279 982
2023
14 321
1 930
179 235
5 447
2 645
38 317
22 531
175 553
471
-
353 450
Total
2024
15 180
2 580
106 097
4 891
3 112
47 349
29 911
196 635
8 871
-
279 982
impairment allowances
-
-
-
-
-
(29 911)
-
(63 843)
-
-
-
presentation as interests in subsidiaries
-
-
-
-
-
-
-
(82 709)
-
-
-
2024 following impairment allowances and changes to
presentation
15 180
2 580
106 097
4 891
3 112
17 438
29 911
50 084
8 871
-
279 982
-
-
2023
14 322
1 930
179 235
5 447
2 645
38 317
22 531
175 553
471
-
353 450
impairment allowances
-
-
-
-
-
(22 531)
-
(63 411)
-
-
-
presentation as interests
in subsidiaries
-
-
-
-
-
-
-
(82 709)
-
-
-
2023 following impairment allowances and changes to
presentation
14 322
1 930
179 235
5 447
2 645
15 786
22 531
29 433
471
-
353 450
* included Liability for reimbursement of advance income tax payments to APK in the amount of PLN 8,438 thousand
Annual Report 2024
Arctic Paper SA
(unless specified otherwise, all amounts are in PLN ‘000)
59
7.1.1 Transactions with the parent company
No transactions between the Company and Nemus Holding AB took place during the year ended on 31 December 2024 and 31 December 2023.
7.1.2 Terms and conditions of transactions with related parties
Related party transactions are made at arm’s length.
The related parties Arctic Paper Kostrzyn SA, Arctic Paper Grycksbo AB and Arctic Paper Munkedals AB (the “Guarantors”) have provided
guarantees to the Company in connection with the term and revolving loan agreements concluded on 2 April 2021. The fees for the guarantees
were confirmed on the basis of a benchmarking exercise carried out in accordance with the OECD Transfer Pricing Guidelines for Multinational
Enterprises and Tax Administrations. The guarantors issue invoices to the Company once a year for the guarantee fees, payable within 21 days.
Receivables from related parties (trade receivables and loans) are unsecured, their maturity is 14-21 days and they are settled by bank transfer.
7.1.3 Loan granted to members of the Management Board
In the period covered by these financial statements, the Company did not grant any loans to management staff and did not grant any loans in the
comparable period.
7.1.4 Remuneration of the Company’s management staff and of the Supervisory Board
Management staff of the Company as at 31 December 2024 comprised three persons: President of the Management Board and Members of the
Management Board.
The table below presents the total value of remuneration to the members of the Management Board and the members of the Supervisory Board
for the current and previous year:
Year ended
on 31 December 2024
Year ended
on 31 December 2023
Management Board
Short-term employee benefits
2 568
2 280
Post-employment benefits
-
335
2 568
2 615
Supervisory Board
Short-term employee benefits
1 231
1 098
Total
3 798
3 713
Short-term employee benefits (PLN 2,568 thousand) include costs incurred by the Company for management services provided by a separate
management unit in the amount of PLN 1,231 thousand.
As at the balance sheet date, there were no outstanding balances with management staff.
7.2 Employment structure
The average headcount in the Company in the year ended on 31 December 2024 and 31 December 2023 was as follows:
As at
31 December 2024
As at
31 December 2023
Management Board*
2
2
Finances
4
4
Logistics
25
26
Administration
2
2
IT
1
1
Total
34
35
* The figure relates only to Board Members employed at the date of the report
7.3 Events after the balance sheet date
After the balance sheet date, on 21 March 2025, the Management Board of the subsidiary Rottneros AB, listed on the NASDAQ Stockholm,
announced the expected weaker financial result of Rottneros Group for first quarter of 2025 compared to the fourth quarter of 2024. The Issuer
reported this in current report no. 5/2025 dated 21 March 2025.
These results of the subsidiary are primarily affected by high prices of raw materials (wood) and negative market development, especially for
CTMP pulp. An additional unfavorable factor is weakening USD currency against SEK. As a result of the above, the Rottneros Group carried out
a cost analysis and announced a decision to partially reduce employment.
Annual Report 2024
Arctic Paper SA
(unless specified otherwise, all amounts are in PLN ‘000)
60
On the basis of this information, Rottneros carries out an analysis in the scope of long-term cost and capital structure, financing conditions,
covenants and the resulting from it subsequent necessary actions.
The described events after the balance sheet date do not affect the financial statements as at 31 December 2024 and do not change the
Management Board's assessment of the Group's and Company’s ability to continue as a going concern.
7.4 Information on auditor’s remuneration
The table below presents the remuneration of the statutory auditor, paid or payable for the year ended on 31 December 2024 and 31 December
2023 by category of services:
Service type
Year ended
on 31 December 2024
Year ended
on 31 December 2023
Statutory audit of the annual financial statements
340
335
Review of interim financial statements
173
115
Statutory audit of the annual non-financial statements
520
-
Total
1 033
450
Signatures of the Members of the Management Board
Position
First and last name
Date
Signature
President of the Management Board
CEO
Michał Jarczyński
29 April 2025
signed with a qualified electronic signature
Member of the Management Board
CFO
Katarzyna Wojtkowiak
29 April 2025
signed with a qualified electronic signature
Member of the Management Board
Vice-President for Sales and Marketing
Fabian Langenskiöld
29 April 2025
signed with a qualified electronic signature
