UPM Annual Report 2016

144-145 / 176

ACCOUNTS
UPM Annual Report 2016 UPM Annual Report 2016 144 145
In brief Strategy Businesses Stakeholders Governance Accounts
CONTENTS
8.2 Principal subsidiaries and joint operations
SUBSIDIARIES
COUNTRY OF
INCORPORATION
HOLDING %
2016
HOLDING %
2015
Blandin Paper Company US 100.00 100.00
Forestal Oriental S.A. UY 100.00 100.00
Gebrüder Lang GmbH Papierfabrik DE 100.00 100.00
LLC UPM Ukraine UA 100.00 100.00
MD Papier GmbH DE 100.00 100.00
Nordland Papier GmbH DE 100.00 100.00
NorService GmbH DE 100.00 100.00
nortrans Speditionsgesellschaft mbH DE 100.00 100.00
OOO UPM-Kymmene RU 100.00 100.00
OOO UPM-Kymmene Chudovo RU 100.00 100.00
PT UPM Raflatac Indonesia ID 100.00 100.00
Rhein Papier GmbH DE 100.00 100.00
Steyrermühl Sägewerksgesellschaft m.b.H. Nfg KG AT 100.00 100.00
UPM (China) Co., Ltd CN 100.00 100.00
UPM (Vietnam) Ltd VN 100.00 100.00
UPM AS EE 100.00 100.00
UPM Asia Pacific Pte. Ltd SG 100.00 100.00
UPM Energy Oy FI 100.00 –
UPM France S.A.S. FR 100.00 100.00
UPM GmbH DE 100.00 100.00
UPM Manufatura e Comércio de Produtos Florestais Ltda BR 100.00 100.00
UPM Paper ENA Oy FI 100.00 –
UPM Plywood Oy 1) FI 100.00 100.00
UPM Pulp Sales Oy FI 100.00 100.00
UPM Raflatac (China) Co., Ltd CN 100.00 100.00
UPM Raflatac (S) Pte Ltd SG 100.00 100.00
UPM Raflatac Co., Ltd TH 100.00 100.00
UPM Raflatac Iberica S.A. ES 100.00 100.00
UPM Raflatac Inc. US 100.00 100.00
UPM Raflatac Mexico S.A. de C.V. MX 100.00 100.00
UPM Raflatac NZ Limited NZ 100.00 100.00
UPM Raflatac Oy FI 100.00 100.00
UPM Raflatac Pty Ltd AU 100.00 100.00
UPM Raflatac s.r.l. AR 100.00 100.00
UPM Raflatac Sdn. Bhd. MY 100.00 100.00
UPM Raflatac South Africa (Pty) Ltd ZA 100.00 100.00
UPM Raflatac Sp.z.o.o. PL 100.00 100.00
UPM S.A. UY 91.00 91.00
UPM Sales GmbH DE 100.00 100.00
UPM Sales Oy FI 100.00 100.00
UPM Silvesta Oy FI 100.00 100.00
UPM Specialty Papers Oy 1) FI 100.00 –
UPM Sähkönsiirto Oy FI 100.00 100.00
UPM-Kymmene (UK) Ltd GB 100.00 100.00
UPM-Kymmene AB SE 100.00 100.00
UPM-Kymmene Austria GmbH AT 100.00 100.00
UPM-Kymmene B.V. NL 100.00 100.00
UPM-Kymmene Inc. US 100.00 100.00
UPM-Kymmene India Private Limited IN 100.00 100.00
UPM-Kymmene Japan K.K. JP 100.00 100.00
UPM-Kymmene Kagit Urunleri Sanayi ve Ticaret Ltd. Sti. TR 99.99 99.99
UPM-Kymmene Otepää AS EE 100.00 100.00
UPM-Kymmene S.A. ES 100.00 100.00
UPM-Kymmene Seven Seas Oy FI 100.00 100.00
UPM-Kymmene S.r.l. IT 100.00 100.00
Werla Insurance Company Ltd MT 100.00 100.00
1) UPM-Kymmene Wood Oy’s legal company name has changed to UPM Plywood Oy and UPM Paper Asia Oy’s legal company name has changed to UPM Specialty
Papers Oy as of 1 February 2017.
The table includes subsidiaries with sales exceeding EUR 2 million in 2016.
JOINT OPERATIONS
COUNTRY OF
INCORPORATION
HOLDING %
2016
HOLDING %
2015
Oy Alholmens Kraft Ab (Pohjolan Voima Oy, G series) FI 27.88 27.88
EEVG Entsorgungs- und Energieverwertungs-
gesellschaft m.b.H. AT 50.00 50.00
Järvi-Suomen Voima Oy FI 50.00 50.00
Kainuun Voima Oy FI 50.00 50.00
Kaukaan Voima Oy (Pohjolan Voima Oy, G9 series) FI 54.00 54.00
Kymin Voima Oy (Pohjolan Voima Oy, G2 series) FI 76.00 76.00
Madison Paper Industries US 50.00 50.00
Rauman Biovoima Oy (Pohjolan Voima Oy, G4 series) FI 71.95 71.95
In 2016, UPM changed its corporate structure in Finland to better
match its current business structure. Three new subsidiaries were
established in Finland: UPM Energy Oy, UPM Paper Asia Oy and
UPM Paper ENA Oy. The personnel and assets of UPM Energy, UPM
Specialty Papers and UPM Paper ENA (Europe & North America) in
Finland were transferred to the new companies on 1 July 2016.
UPM Raflatac and UPM Plywood already operated in their own
subsidiaries in Finland. Assets and personnel of UPM Biorefining
continued to remain part of UPM-Kymmene Corporation.
8.3 Related party transactions
The Board of Directors and the Group Executive Team
There have not been any material transactions between UPM and its
members of the Board of Directors or the Group Executive Team (key
management personnel) or persons closely associated with these
members or organisations in which these individuals have control or
significant influence. There are no loans granted to any members of
the Board of Directors or the Group Executive Team at 31 December
2016 and 2015.
For information concerning shares held by members of the Board
of Directors and members of the Group Executive Team, as well as
remuneration to members of the Board of Directors and the Group
Executive Team are disclosed in » Note 3.2. Key management
personnel.
Associates and joint ventures
In Finland, the group organises its producer’s responsibility of
recovered paper collection through Paperinkeräys Oy. Austria Papier
Recycling GmbH purchases recovered paper in Austria and L.C.I s.r.l.
in Italy. ASD Altpapier Sortierung Dachau GmbH is a German
recovered paper sorting company. The purchases from those four
companies represented approximately 79% (81%) of total recovered
paper purchase amount from associates and joint ventures.
Transactions with associates and joint ventures are presented in the
table below. The group has no individually material associates or joint
ventures.
EURm 2016 2015
Dividends received 3 1
Sales – 1
Purchases of raw materials and services 90 89
Loan receivables 9 9
Trade and other receivables 1 1
Trade and other payables 3 1
Subsidiaries and joint operations
» Refer Note 8.2 Principal subsidiaries and joint operations.
Pension Funds
In Finland, group has the pension foundation, Kymin Eläkesäätiö,
which is a separate legal entity. Pensions for about 10% of the
group’s Finnish employees are arranged through the foundation.
In 2016, the contributions paid by UPM to the Foundation amounted
to EUR 10 million (10 million). The Foundation manages and invests
the contributions paid to the plan. The fair value of the Foundation’s
assets at 31 December 2016 was EUR 347 million (357 million),
of which 48% was in the form of equity instruments, 41% in the form
of debt instruments and 11% was invested in property and money
market.
In the UK, the single UPM Pension Scheme operates under a Trust
which is independent from the group. The Trust consists of various
defined benefit sections, all of which are closed to future accrual and
one common defined contribution section which is open to all UPM
employees in the UK. The group made contributions of EUR 5 million
(28 million) to the defined benefit sections of the Scheme in 2016.
The fair value of the UK defined benefit fund assets at 31 December
2016 was EUR 426 million (409 million), of which 55% was invested
in equity instruments, 28% in debt instruments, 9% in property and
money market and 8% in other investments.
8.4 Assets held for sale
Assets classified as held for sale at the end of 2016 relate to hydro
power assets located at the mill site in Madison Paper Industries in
the US amounting to EUR 8 million. At the end of 2015, there were
no assets classified as held for sale.
Accounting policies
Non-current assets (or disposal groups) are classified as assets held
for sale and stated at the lower of carrying amount and fair value less
costs to sell, if UPM will recover their carrying amount through a sale
transaction which is considered highly probable. Non-current assets
classified as held for sale, or included within a disposal group that is
classified as held for sale, are not depreciated after the classification.