UPM Annual Report 2015
UPM Annual Report 2015
77
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contents
Independent Practitioner’s Assurance Report
To theManagement ofUPM-KymmeneCorporation
We have been engaged by the Management of
UPM-Kymmene Corporation (hereinafter also
the Company) to perform a limited assurance
engagement on selected corporate responsibility
information for the reporting period 1 January
2015 to 31 December 2015, disclosed in UPM-
Kymmene Corporation’s Annual Report 2015 and
on its website in section “Responsibility” (here-
inafter CR Reporting). The assured information
is indicated in the Company’s GRI Content Index
2015 on the Company’s website.
Furthermore, the assurance engagement has
covered UPM-Kymmene Corporation’s adher-
ence to the AA1000 AccountAbility Principles
with moderate (limited) level of assurance.
Management’s responsibility
TheManagement of UPM-Kymmene Corporation
is responsible for preparing the CRReporting in
accordance with the Reporting criteria as set out in
the Company’s reporting instructions and the G4
Sustainability Reporting Guidelines of the Global
Reporting Initiative. TheManagement of UPM-
Kymmene Corporation is also responsible for such
internal control as themanagement determines is
necessary to enable the preparation of CRReport-
ing that is free frommaterial misstatement, wheth-
er due to fraud or error.
The Management of UPM-Kymmene Corpo-
ration is also responsible for the Company’s
adherence to the AA1000 AccountAbility Princi-
ples of inclusivity, materiality and responsiveness
as set out in AccountAbility’s AA1000 Account-
Ability Principles Standard 2008.
Practitioner’s responsibility
Our responsibility is to express a limited assur-
ance conclusion on the CR Reporting and on the
Company’s adherence to the AA1000 Account-
Ability Principles based on the procedures
we have performed and the evidence we have
obtained. We conducted our limited assurance
engagement in accordance with the International
Standard on Assurance Engagements (ISAE)
3000 (Revised) “Assurance Engagements Other
than Audits or Reviews of Historical Financial
Information”. That Standard requires that we
plan and perform the engagement to obtain
limited assurance about whether the CR Report-
ing is free frommaterial misstatement.
In addition, we have conducted our work in
accordance with the AA1000 Assurance Standard
2008. For conducting a Type 2 assurance engage-
ment as agreed with the Company, the AA1000AS
(2008) requires planning and performing of the
assurance engagement to obtain moderate (lim-
ited) assurance on whether any matters come to
our attention that cause us to believe that UPM-
Kymmene Corporation does not adhere, in all
material respects, to the AA1000 AccountAbility
Principles and that the CR Reporting is not reli-
able, in all material respects, based on the Report-
ing criteria.
In a limited assurance engagement the evi-
dence-gathering procedures are more limited
than for a reasonable assurance engagement, and
therefore less assurance is obtained than in
a reasonable assurance engagement. An assur-
ance engagement involves performing proce-
dures to obtain evidence about the amounts
and other disclosures in the CR Reporting, and
about the Company’s adherence to the AA1000
AccountAbility Principles. The procedures
selected depend on the practitioner’s judge-
ment, including an assessment of the risks of
material misstatement of the CR Reporting
and an assessment of the risks of the Com-
pany’s material nonadherence to the AA1000
AccountAbility Principles.
Our work consisted of, amongst others,
the following procedures:
• Interviewing senior management of the
Company.
• Interviewing employees from various organi-
sational levels of the Company with regards
to materiality, stakeholder expectations,
meeting of those expectations, as well as
stakeholder engagement.
• Assessing stakeholder inclusivity and respon-
siveness based on the Company’s documenta-
tion and internal communication.
• Assessing the Company’s defined material
corporate responsibility topics as well as
assessing the CR Reporting based on these
topics.
• Visiting the Company’s Head Office as well
as two sites in the United Kingdom.
• Interviewing employees responsible for
collecting and reporting the information
presented in the CR Reporting at the Group
level and at the different sites where our
visits took place.
• Assessing how Group employees apply the
reporting instructions and procedures of
the Company.
• Testing the accuracy and completeness of
the information from original documents
and systems on a sample basis.
• Testing the consolidation of information and
performing recalculations on a sample basis.
Limited assurance conclusion
Based on the procedures we have performed
and the evidence we have obtained, nothing
has come to our attention that causes us to
believe that UPM-Kymmene Corporation does
not adhere, in all material respects, to the
AA1000 AccountAbility Principles.
Furthermore nothing has come to our atten-
tion that causes us to believe that UPM-
Kymmene Corporation’s CR Reporting for the
reporting period ended 31 December 2015 is not
properly prepared, in all material respects, in
accordance with the Reporting criteria, or that
the CR Reporting is not reliable, in all material
respects, based on the Reporting criteria.
When reading our assurance report, the
inherent limitations to the accuracy and com-
pleteness of sustainability information should
be taken into consideration.
Our assurance report has been prepared in
accordance with the terms of our engagement.
We do not accept, or assume responsibility to
anyone else, except to UPM-Kymmene Corpo-
ration for our work, for this report, or for the
conclusions that we have reached.
Observations and recommendations
Based on the procedures we have performed
and the evidence we have obtained, we provide
the following observations and recommendations
in relation to UPM-Kymmene Corporation’s
adherence to the AA1000 AccountAbility Princi-
ples. These observations and recommendations do
not affect the conclusions presented earlier.
• Regarding Inclusivity:
UPM-Kymmene Corpo-
ration has processes in place for stakeholder
inclusivity and engagement. Stakeholder Rela-
tions coordinates stakeholder engagement at the
group level, while businesses are responsible for
local activity. Diverse stakeholder engagement
activities have been undertaken both at the
group level and at the local level in 2015. We
recommend that the Company continues to
develop the coordination of stakeholder engage-
ment activities by ensuring Stakeholder Func-
tions’ awareness of the local issues as well as the
related action plans.
•
Regarding Materiality:
UPM-Kymmene
Corporation has a systematic process in place to
evaluate and determine the materiality of corpo-
rate responsibility topics. In 2015, the Company
conducted a materiality analysis in association
with the update of its responsibility focus areas,
targets and performance indicators. We recom-
mend that the Company pays particular atten-
tion to business area specific characteristics in
implementing the responsibility activities in the
responsibility focus areas.
• Regarding Responsiveness:
UPM-Kymmene
Corporation has processes in place for respond-
ing to stakeholder needs and concerns. In future,
we recommend that the Company considers the
possibility to increase the disclosures onmaterial
sustainability topics at the business area level.
This would provide stakeholders further opportu-
nities to assess the Company’s performance in the
responsibility focus areas.
Practitioner’s independence,
qualifications and quality control
We have compliedwith the independence and other
ethical requirements of the
Code of Ethics for
Professional Accountants
issued by the Interna-
tional Ethics Standards Board for Accountants,
which is founded on fundamental principles of
integrity, objectivity, professional competence and
due care, confidentiality and professional behaviour.
Our multi-disciplinary team of corporate
responsibility and assurance specialists possesses
the requisite skills and experience within financial
and non-financial assurance, corporate responsi-
bility strategy and management, social and envi-
ronmental issues, as well as the relevant industry
knowledge, to undertake this assurance engage-
ment.
PricewaterhouseCoopers Oy applies Interna-
tional Standard on Quality Control 1 and accord-
ingly maintains a comprehensive system of quality
control including documented policies and proce-
dures regarding compliance with ethical require-
ments, professional standards and applicable legal
and regulatory requirements.
Helsinki, 19 February 2016
PricewaterhouseCoopers Oy
Merja Lindh
Maj-Lis Steiner
Authorised Public
Authorised Public
Accountant
Accountant
IN BRIEF
STRATEGY
BUSINESSES
STAKEHOLDERS
GOVERNANCE
ACCOUNTS
79 Report of the Board of Directors 89 Board of Directors’ proposal for the distribution of profits 90 Consolidated financial statements, IFRS 90 Consolidated income statement and statement of comprehensive income 91 Consolidated balance sheet 92 Consolidated statement of changes in equity 93 Consolidated cash flow statement 94 Notes to the consolidated financial statements 130 Parent company accounts 136 Information on shares 140 Key figures 2006–2015 142 Quarterly figures 2014–2015 144 Auditor’s report1 Accounting policies
2 Critical judgements in applying accounting
policies and key sources of estimation uncertainty
3 Financial risk management
4 Segment information
5 Acquisitions and disposals and notes to the
cash flow statement
6 Other operating income
7 Costs and expenses
8 Change in fair value of biological assets
and wood harvested
9 Share of results of associated companies
and joint ventures
10 Depreciation, amortisation and impairment charges
11 Gains on available-for-sale investments, net
12 Finance costs
13 Income taxes
14 Earnings per share
15 Dividend per share
16 Goodwill
17 Other intangible assets
18 Property, plant and equipment
19 Investment property
20 Biological assets
21 Investments in associated companies
and joint ventures
22 Available-for-sale investments
23 Other non-current financial assets
24 Other non-current assets
25 Inventories
26 Trade and other receivables
27 Equity and reserves
28 Deferred income taxes
29 Retirement benefit obligations
30 Provisions
31 Interest-bearing liabilities
32 Other liabilities
33 Trade and other payables
34 Financial instruments by category
35 Derivative financial instruments
36 Principal subsidiaries and joint operations
37 Share-based payments
38 Related party transactions
39 Commitments and contingencies
40 Events after the balance sheet date
Accounts for 2015