UPM annual report 2015

UPM Annual Report 2015

115

116

contents

accounts

IN BRIEF

STRATEGY

BUSINESSES

STAKEHOLDERS

GOVERNANCE

ACCOUNTS

Main items included in prepayments and accrued income

As at 31 December

EURm

2015

2014

Personnel expenses

Interest income

Energy and other excise taxes

Other items

At 31 Dec.

134

143

27 Equity and reserves

Share capital

EURm

Number of shares

(1,000)

Share

capital

At 1 Jan. 2014

529,302

890

Exercise of share options

4,434

–

At 31 Dec. 2014

533,736

890

At 31 Dec. 2015

533,736

890

At 31 December 2015, the number of the company’s shares was

533,735,699. Each share carries one vote. The shares do not have

any nominal counter value. The shares are included within the book

entry system for securities.

Reserve for invested non-restricted equity

Reserve for invested non-restricted equity includes, under the Compa-

nies’ Act, the exercise value of shareholders’ investments in the compa-

ny unless otherwise decided by the company.

Treasury shares

The Annual General Meeting held on 9 April 2015 authorised the

Board of Directors to acquire no more than 50,000,000 of the compa-

ny's own shares. The authorisation is valid for 18 months from the date

of the decision.

As at 31 December 2015, the company held 230,737 (230,737)

of its own shares, 0.04% (0.04%) of the total number of shares.

211,481 of the shares were returned upon their issue in 2011 to UPM

without consideration as part of the contractual arrangements relating

to the Myllykoski transaction and 19,256 shares in accordance with

the Group’s share reward scheme due to the termination of employ-

ment contracts in 2012.

Authorisations to increase the number of shares

The Annual General Meeting, held on 4 April 2013, authorised the

Board of Directors to decide on the issuance of shares and/or the

transfer of the company’s own shares held by the company and/or the

issue of special rights entitling holders to shares in the company as

follows: (i) the maximum number of new shares that may be issued and

the company’s own shares held by the company that may be trans-

ferred is, in total, 25,000,000 shares. This figure also includes the

number of shares that can be received on the basis of the special

rights. (ii) new shares and special rights to shares in the company may

be issued and the company’s own shares held by the company may be

transferred to the company’s shareholders in proportion to their exist-

ing shareholdings or in a directed share issue, deviating from the

shareholder’s pre-emptive subscription rights. This authorisation is valid

until 4 April 2016.

Aside from the above, the Board of Directors has no current

authorisation to issue shares, convertible bonds or share options.

The shares available for subscription under the Board’s share issue

authorisation may increase the total number of the company’s shares

by 4.68%, i.e. by 25,000,000 shares, to 558,735,699 shares.

Redemption clause

Under § 12 of UPM-Kymmene Corporation’s Articles of Association, a

shareholder who, alone or jointly with another shareholder owns

33 1/3 percent or 50 percent or more of all the company’s shares or

their associated voting rights shall, at the request of other shareholders,

be liable to redeem their shares and any securities that, under the

Companies Act, carry the right to such shares, in the manner pre-

scribed in § 12.

A resolution of a general meeting of shareholders to amend or

delete this redemption clause must be carried by shareholders repre-

senting not less than three-quarters of the votes cast and shares repre-

sented at the meeting.

Fair value and other reserves

As at 31 December

EURm

2015

2014

Fair value reserve of available-for-sale investments

1,582

1,988

Hedging reserve

–104

–128

Share-based compensation

At 31 Dec.

1,486

1,867

Changes in hedging reserve

Year ended 31 December

EURm

2015

2014

At 1 Jan.

–128

–21

Gains and losses on cash flow hedges

–85

–102

Transfers to sales

–85

Transfers to costs and expenses

Transfers to financial costs

Tax on gains and losses on cash flow hedges

Tax on transfers to income statement

–23

At 31 Dec.

–104

–128

Components of other comprehensive income

Year ended 31 December

EURm

2015

2014

Actuarial gains and losses on defined

benefit obligations

113

–181

Translation differences

221

291

Net investment hedge

–28

–41

Cash flow hedges

Fair value gains/losses arising during the year

–68

–82

Reclassification adjustments

–25

–107

Available-for-sale investments

Fair value gains/losses arising during the year

–405

–164

–405

–164

Other comprehensive income

–75

–202

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 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

company 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 2015

EURm

As at

1 Jan.

2015

Charged to

the income

statement

Charged to

OCI

Translation

differences

As at

31 Dec.

2015

Deferred tax assets

Intangible assets and property, plant and equipment

160

–27

–

–1

132

Inventories

–

Retirement benefit obligations and provisions

158

–1

–28

–

129

Other temporary differences

–

Tax losses and tax credits carried forward

241

–

241

Deferred tax assets, total

631

–13

–28

–1

589

Deferred tax liabilities

Intangible assets and property, plant and equipment

211

–

217

Biological assets

205

–

256

Retirement benefit obligations and provisions

–2

–

Other temporary differences

102

–4

–11

–

Deferred tax liabilities, total

527

–

579

The amounts recognised in the balance sheet

Deferred tax assets

532

–37

–28

–1

466

Deferred tax liabilities

428

–

456

Deferred tax liabilities, less deferred tax assets

–104

–10

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

2015

2014

Carrying amount of non-controlling interests

acquired

–

Consideration paid to non-controlling interests

–

–4

Excess of consideration paid recognised in

equity attributable to owners of the parent

company

–

–1