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UPM Annual Report 2014
UPM Annual Report 2014
107
108
CONTENTS
ACCOUNTS
Non-controlling interests
On 11 December 2014, the Group acquired the remaining 10% of the
issued shares of Wisapower Oy for a purchase consideration of EUR 4
million. The Group now holds 100% of the equity share capital of
Wisapower Oy. The carrying amount of the non-controlling interests in
Wisapower Oy on the date of acquisition was EUR 3 million. The
Group derecognised non-controlling interests of EUR 3 million and
recorded a decrease in equity attributable to owners of the parent of
EUR 1 million. The effect of changes in the ownership interest of
Wisapower Oy on the equity attributable to owners of the parent com-
pany during the year is summarised as follows:
28 Deferred income taxes
Reconciliation of the movements of deferred tax asset and liability balances during the year 2014
EURm
As at
1 Jan.
2014
Charged to
the income
statement
Charged to
OCI
Translation
differences
As at
31 Dec.
2014
Deferred tax assets
Intangible assets and property, plant and equipment
213
–53
–
–
160
Inventories
27
8
–
–
35
Retirement benefit obligations and provisions
135
–23
46
–
158
Other temporary differences
30
7
–
–
37
Tax losses and tax credits carried forward
252
–12
–
1
241
Deferred tax assets, total
657
–73
46
1
631
Deferred tax liabilities
Intangible assets and property, plant and equipment
239
–28
–
–
211
Biological assets
198
3
–
4
205
Retirement benefit obligations and provisions
18
–1
–8
–
9
Other temporary differences
139
8
–45
–
102
Deferred tax liabilities, total
594
–18
–53
4
527
The amounts recognised in the balance sheet
Deferred tax assets
564
–79
46
1
532
Deferred tax liabilities
501
–24
–53
4
428
Deferred tax liabilities, less deferred tax assets
–63
55
–99
3
–104
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income
taxes relate to the same fiscal authority.
Year ended 31 December
EURm
2014
2013
Carrying amount of non-controlling interests
acquired
3
–
Consideration paid to non-controlling interests
–4
–
Excess of consideration paid recognised in
equity attributable to owners of the parent
company
–1
–
Reconciliation of the movements of deferred tax asset and liability balances during the year 2013
EURm
As at
1 Jan.
2013
Charged to
the income
statement
Charged to
OCI
Translation
differences
As at
31 Dec.
2013
Deferred tax assets
Intangible assets and property, plant and equipment
221
–8
–
–
213
Inventories
40
–13
–
–
27
Retirement benefit obligations and provisions
164
–12
–18
1
135
Other temporary differences
68
–39
–
1
30
Tax losses and tax credits carried forward
368
–103
–
–13
252
Deferred tax assets, total
861
–175
–18
–11
657
Deferred tax liabilities
Intangible assets and property, plant and equipment
366
–127
–
–
239
Biological assets
224
–26
–
–
198
Retirement benefit obligations and provisions
5
–3
16
–
18
Other temporary differences
139
–2
2
–
139
Deferred tax liabilities, total
734
–158
18
–
594
The amounts recognised in the balance sheet
Deferred tax assets
739
–146
–18
–11
564
Deferred tax liabilities
612
–129
18
–
501
Deferred tax liabilities, less deferred tax assets
–127
17
36
11
–63
At 31 December 2014, net operating loss carry-forwards for which the
Group has recognised a deferred tax asset amounted to EUR 782 million
(831 million), of which EUR 630 million (678 million) was attributable
to German subsidiaries and EUR 39 million (74 million) to a Canadian
subsidiary. In Germany the net operating loss carry-forwards do not
expire. In other countries net operating loss carry-forwards expire at
various dates and in varying amounts. The net operating loss carry-for-
wards for which no deferred tax is recognised due to uncertainty of their
utilisation amounted to EUR 1,088 million (903 million) in 2014. These
net operating loss carry-forwards are mainly attributable to a Canadian
subsidiary and certain German and French subsidiaries.
No deferred tax liability has been recognised for the undistributed
profits of Finnish subsidiaries and associated companies as such earn-
ings can be distributed without any tax consequences.
In addition the Group does not recognise a deferred tax liability in
respect of undistributed earnings of non-Finnish subsidiaries to the
extent that such earnings are intended to be permanently reinvested in
those operations or such earnings can be distributed without any tax
consequences.
29 Retirement benefit obligations
The Group operates a number of defined benefit and contribution plans
in accordance with local conditions and practices in the countries in
which it operates. About 90% of the Group's defined benefit arrange-
ments exist in Finland, in the UK and in Germany. The Group has
defined benefit obligations also in Austria, Holland, France, Canada and
in US. Globally about one quarter of employees belong to defined bene-
fit arrangements.
In Finland employers have to insure their employees for statutory
benefits, as determined in Employee’s Pension Act (TyEL). Under TyEL,
the benefits that are funded during employment are old age benefit and
disability benefit. The benefits can be insured with an insurance company
or the employer can establish a fund or a foundation to manage the
statutory benefits. Approximately 92% of UPM’s Finnish employees are
insured with an insurance company and these arrangements are regarded
as defined contribution plans. In addition, the Group operates a TyEL
foundation to fulfil the requirement for approximately 8% of employees.
The TyEL foundation, Kymin Eläkesäätiö, is regarded as a defined
benefit plan for the benefits that are based on employee's average salary.
The TyEL Foundation is administered by the representatives of both the
employer and the employees. The foundation has named an authorised
representative to take care of its regular operations. The Plan is
supervised by Financial Supervisory Authority.
In the UK, the Group operates a legacy defined benefit scheme,
which is closed both to new members and future accrual. A defined con-
tribution section also exists and is open to all current employees. The
UK Pension Scheme operates under a single Trust which is independent
from the Group.
In Germany employees within defined benefit arrangements are
entitled to annual pensions on retirement based on their service and final
salary. The members also receive benefits on disability and on death.