UPM Annual Report 2019

8.2 Principal subsidiaries and joint operations

COUNTRY OF INCORPORATION HOLDING % 2019 HOLDING % 2018

SUBSIDIARIES

COUNTRY OF INCORPORATION HOLDING % 2019 HOLDING % 2018

JOINT OPERATIONS

Blandin Paper Company Forestal Oriental S.A.

US UY DE UA DE DE DE RU RU DE AT CN VN CH ID

100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 91.00

100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 91.00

Oy Alholmens Kraft Ab (Pohjolan Voima Oyj, G series) EEVG Entsorgungs- und Energieverwertungsgesellschaft m.b.H.

FI

27.88 50.00 50.00 50.00 54.00 76.00 50.00 71.95

27.88 50.00 50.00 50.00 54.00 76.00 50.00 71.95

AT

Gebr. Lang GmbH Papierfabrik

Järvi-Suomen Voima Oy

FI FI FI FI

LLC UPM Ukraine

Kainuun Voima Oy

Nordland Papier GmbH

Kaukaan Voima Oy (Pohjolan Voima Oyj, G9 series) Kymin Voima Oy (Pohjolan Voima Oyj, G2 series)

NorService GmbH

nortrans Speditionsgesellschaft mbH

Madison Paper Industries

US

OOO UPM-Kymmene

Rauman Biovoima Oy (Pohjolan Voima Oyj, G4 series)

FI

OOO UPM-Kymmene Chudovo PT UPM Raflatac Indonesia

Rhein Papier GmbH

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 2019 and 2018. For information concerning shares held by members of the Board of Directors 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 Encore Ympäristöpalvelut Oy (until 1.1.2019 by name 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 93% (89%) 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.

Pension Funds In Finland, the group has the pension foundation, UPM Sellutehtaiden eläkesäätiö, which is a separate legal entity. Pensions for about 18% (18%) of the group’s Finnish employees are arranged through the Foundation. In 2019, the contributions paid by UPM to the Foundation amounted to EUR 20 million (23 million). The Foundation manages and invests the contributions paid to the plan. The fair value of the Foundation’s assets at 31 December 2019 was EUR 537 million (470 million), of which 50% was in the form of equity instruments, 42% in the form of debt instruments and 8% 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 8 million (8 million) to the defined benefit sections of the Scheme in 2019. The fair value of the UK defined benefit fund assets at 31 December 2019 was EUR 491 million (417 million), of which 10% was invested in equity instruments, 43% in debt instruments, 42% in property and money market and 5% in other investments. 8.4 Assets held for sale Assets classified as held for sale EUR 18 million relate to UPM Chapelle paper mill assets located in France. In September UPM announced that it plans to sell its Chapelle newsprint mill in Grand- Couronne, France. No assets were classified as held for sale at the end of 2018. 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.

Steyrermühl Sägewerksgesellschaft m.b.H. Nfg KG

UPM (China) Co., Ltd UPM (Vietnam) Ltd

UPM AG UPM AS

EE

UPM Asia Pacific Pte. Ltd

SG UY

UPM Biofuels S.A.

UPM Communication Papers Oy

FI FI

UPM Energy Oy UPM France S.A.S.

FR DE BR

UPM GmbH

UPM Manufatura e Comércio de Produtos Florestais Ltda

UPM Plywood Oy UPM Pulp Sales Oy

FI FI

UPM Raflatac (China) Co., Ltd. UPM Raflatac (S) Pte Ltd UPM Raflatac (UK) Limited UPM Raflatac Chile SpA UPM Raflatac Co., Ltd UPM Raflatac Iberica S.A.

CN SG GB CL TH ES US MX NZ

UPM Raflatac Inc.

UPM Raflatac Mexico S.A. de C.V.

UPM Raflatac NZ Limited UPM Raflatac Oy UPM Raflatac Pty Ltd UPM Raflatac s.r.l. UPM Raflatac SAS UPM Raflatac Sdn. Bhd.

FI

AU AR

FR

MY ZA

UPM Raflatac South Africa (Pty) Ltd

UPM Raflatac Sp.z.o.o.

PL

UPM S.A.

UY DE

EURm

2019

2018

UPM Sales GmbH UPM Sales Oy UPM Silvesta Oy

Dividends received

2

2

FI FI FI FI

Purchases of raw materials and services

73

87

Loan receivables

5 1 6

6 1 9

UPM Specialty Papers Oy UPM Sähkönsiirto Oy UPM-Kymmene (Korea) Ltd UPM-Kymmene (UK) Ltd

Trade and other receivables Trade and other payables

KR GB SE AT NL US IN

UPM-Kymmene AB

UPM-Kymmene Austria GmbH

Subsidiaries and joint operations

UPM-Kymmene B.V. UPM-Kymmene Inc.

» Refer Note 8.2 Principal subsidiaries and joint operations.

UPM-Kymmene India Private Limited

UPM-Kymmene Japan K.K.

JP TR EE ES

UPM-Kymmene Kagit Urunleri Sanayi ve Ticaret Ltd. Sti.

UPM-Kymmene Otepää OÜ

UPM-Kymmene S.A.

UPM-Kymmene Seven Seas Oy

FI IT

UPM-Kymmene S.r.l.

Werla Insurance Company Ltd

MT

The table includes subsidiaries with sales exceeding EUR 2 million in 2019.

198

199

UPM ANNUAL REPORT 2019

UPM ANNUAL REPORT 2019

CONTENTS

ACCOUNTS

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS