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Note 13 Equity accounted investments
Accounting principles
Consolidation principles
Associated companies over which Stora Enso exercises significant influence are accounted for using the equity method, which involves recognising in the Consolidated Income Statement the group’s share of the equity accounted investment profit or loss for the year. The group’s interest in an associated company is carried in the Consolidated Statement of Financial Position at an amount that reflects its share of the net assets of the associate.

The group’s share of results in equity accounted investments is reported in operating profit to reflect the operational nature of these investments, especially those in wood supply. There is no material goodwill in the Statements of Financial Position of equity accounted investments.
Principal equity accounted investments
As at 31 December
Proportion of ownership interest/voting rights held % EUR million
Company Reportable segment Domicile and principal place of operations 2016 2015 2016 2015
Bergvik Skog AB: forest Other Sweden 49.00/36.701 49.00/36.701 1 265 1 300
Tornator Oyj: forest Other Finland 41.00 41.00 246 186
Bulleh Shah Packaging (Private) Limited: packaging goods Consumer Board Pakistan 35.00 35.00 34 33
Arauco Florestal Arapoti S.A.: plantation Paper Brazil 20.00 20.00 26 19
1 571 1 538
Others 23 32
Carrying Value at 31 December 1 594 1 570
1 The group's shareholding in Bergvik Skog AB is 49%, however, the voting rights are limited to 36.7%.
Group share of equity accounted investment income statements
Year Ended 31 December
EUR million 2016 2015
Sales 297 345
Net operating expenses -200 -229
IAS 41 valuation 136 575
Operating Profit 233 691
Net financial items -53 -34
Net Profit before Tax 180 657
Income tax -24 -138
Net Profit for the Year 156 519
All of the above companies are accounted for using the equity method in these Consolidated financial statements.

In April 2016, Stora Enso divested its 33.33% shareholding in the Swedish recycled materials company IL Recycling AB for SEK 239 (EUR 26) million. Related to the transaction Stora Enso recorded a capital gain of EUR 16 million in Division Paper second quarter 2016 results.

The average number of personnel in the equity accounted investments was 2 797 in 2016, compared with 3 460 in 2015.

Summarised financial information in respect of the group’s material associates, Bergvik Skog AB and Tornator Oyj, is set out below. The group’s share of these associated companies is reported under segment Other and covers the majority of the group’s total share of results of equity accounted investments. The summarised financial information below represents amounts shown in the associate’s financial statements prepared in accordance with IFRS.
Bergvik Skog AB
EUR million 2016 2015
Current assets 43 53
Non-current assets 5 074 5 149
Current liabilities 362 299
Non-current liabilities 1 111 1 160
Tax liabilities 1 072 1 102
Sales 234 214
Net profit for the year 127 1 015
Other comprehensive income -6 6
Total comprehensive income 121 1 021
Dividends received from the associate during the financial year 44 22
Net assets of the associate 2 572 2 641
Proportion of the Group's ownership interest in Bergvik Skog AB 49.00% 49.00%
Goodwill 5 6
Carrying amount of the Group's interest in Bergvik Skog AB 1 265 1 300
In 2004, 56.7% of Stora Enso’s Swedish forest holding company Bergvik Skog was divested to institutional investors leaving the group with a minority shareholding of 43.26%. In May 2014 the group spent SEK 891 million (EUR 97 million) to increase its shareholding in Bergvik Skog to 49%. As part of the acquisition the group recorded goodwill of EUR 5 million.

Stora Enso’s shareholding in the company was valued at EUR 1 265 (EUR 1 300) million at the year-end 2016. In 2016, the group’s share of Bergvik Skog’s net profit was EUR 62 (EUR 498) million, including a forest valuation gain of EUR 52 (gain EUR 581) million. The fair value change of Bergvik Skog’s forest holdings was mainly due to the decrease of discount rate used in the discounted cash flow based valuation of the biological assets, an adjustment to the price curve, and a correction in the model from last year. In 2015, the fair value change of Bergvik Skog’s forest holdings was mainly due to the decrease of discount rate used in the discounted cash flow based valuation of the biological assets. Fair value change in 2015 increased income tax approximately EUR 128 million.

During the fourth quarter of 2015 Bergvik Skog had material land disposal transactions. The arrangements resulted in a gain in Bergvik Skog’s income statement of which Stora Enso’s share amounted approximately to EUR 33 million.
Tornator Oyj
EUR million 2016 2015
Current assets 26 37
Non-current assets 1 355 1 143
Current liabilities 69 78
Non-current liabilities 579 553
Tax liabilities 132 96
Sales 97 114
Net profit for the year 173 39
Other comprehensive income 5 4
Total comprehensive income 178 43
Dividends received from the associate during the financial year 12 9
Net assets of the associate 601 453
Proportion of the Group's ownership interest in Tornator Oyj 41.00% 41.00%
Carrying amount of the Group's interest in Tornator Oyj 246 186
Stora Enso’s Finnish forest holdings were divested into an equity accounted investment, Tornator, in 2002. The group’s 41% residual interest was worth EUR 246 (EUR 186) million at the year-end 2016. In 2016, the group’s share of Tornator’s net profit was EUR 71 (EUR 16) million, including a forest valuation gain of EUR 83 (loss EUR 7) million.

During the fourth quarter of 2015 Tornator had a material land disposal transaction which resulted in a gain in Tornator’s income statement of which Stora Enso’s share amounted approximately to EUR 3 million.
Aggregate information of equity accounted investments that are not individually material
As at 31 December
EUR million 2016 2015
PPE1, goodwill and other intangible assets 74 92
Biological assets 22 16
Operative receivables:
Non-current - 1
Current 24 26
Inventories 17 22
Cash 9 10
Total Assets 146 167
Operative Liabilities:
Non-current 5 8
Current 22 36
Debt:
Non-current 18 25
Current 10 8
Tax liabilities 8 6
Total Liabilities 63 83
Net Equity in the Group Statement of Financial Position 83 84
Represented by
Capital and Reserves 83 84
OCI - -
Equity Accounting Value 83 84
Equity Accounting Value for Bergvik Skog AB 1 265 1 300
Equity Accounting Value for Tornator Oyj 246 186
Total Equity Accounting Value 1 594 1 570
1 PPE = Property, Plant and Equipment
Equity accounted investment company balances
As at 31 December
EUR million 2016 2015
Receivables from Equity Accounted Investments
Non-current loan receivables 5 5
Trade receivables 3 6
Current loan receivables - 3
Liabilities due to Equity Accounted Investments
Trade payables 40 32
Equity accounted investment transactions
Year Ended 31 December
EUR million 2016 2015
Sales to equity accounted investments 53 49
Purchases from equity accounted investments 202 182
The group engages in transactions with equity accounted investments such as sales and purchases of wood. All agreements are negotiated at arm’s length and are conducted on terms that the group considers customary in the industry and generally no less favourable than would be available from independent third parties.

Total loans including interest receivable to equity accounted investments at the year-end 2016 amounted to EUR 5 (EUR 8) million.

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