- Note 1 Accounting principles
- Note 2 Critical accounting estimates and judgements
- Note 3 Segment information
- Note 4 Acquisitions and disposals
- Note 5 Other operating income and expense
- Note 6 Personnel expenses
- Note 7 Board and executive remuneration
- Note 8 Net financial items
- Note 9 Income taxes
- Note 10 Depreciation, amortisation and impairment charges
- Note 11 Intangible assets and property, plant and equipment
- Note 12 Biological assets
- Note 13 Equity accounted investments
- Note 14 Available-for-sale investments
- Note 15 Other non-current assets
- Note 16 Inventories
- Note 17 Receivables
- Note 18 Shareholders’ equity
- Note 19 Non-controlling interests
- Note 20 Post-employment benefits
- Note 21 Employee variable compensation and equity incentive schemes
- Note 22 Other provisions
- Note 23 Operative liabilities
- Note 24 Financial risk management
- Note 25 Fair values
- Note 26 Debt
- Note 27 Derivatives
- Note 28 Cumulative translation adjustment and equity hedging
- Note 29 Commitments and contingencies
- Note 30 Principal subsidiaries and joint operations
- Note 31 Related party transactions
- Note 32 Earnings per share and equity per share
Note 31 Related party transactions
Balances and transactions between the Group and its subsidiaries and joint operations, which are classified as related parties, have been eliminated on consolidation and are not disclosed in this note.
The key management personnel of the Group are the members of the Group Leadership Team and the Board of Directors. The compensation of key management personnel is presented in Note 7 Board and executive remuneration.
In the ordinary course of business, the Group engages in transactions on commercial terms with equity accounted investments and other related parties that are not any more favourable than would be available to other third parties – with the exception of Veracel and Pohjolan Voima Oy (PVO). Stora Enso intends to continue with transactions on a similar basis with its equity accounted investments further details of which are shown in Note 13 Equity accounted investments.
The Group’s principal subsidiary companies and joint operations are listed in Note 30 Principal subsidiaries and joint operations.
The Group holds a 15.6% interest in Pohjolan Voima Oy (PVO), a privately owned group of companies in the energy sector that produces electricity and heat for its shareholders in Finland. Each subsidiary of the PVO group has its own class of shares that entitle the shareholder to the energy produced in proportion to its ownership of that class of share. Stora Enso is the second-largest shareholder in PVO, being entitled to a capacity share of 468 MWe and Seppo Parvi, as group representative, has been the Deputy Chairman of PVO’s Board of Directors since 2015. Prices paid to PVO for electricity are based on production costs, which are generally lower than market prices and in 2017, amounted to EUR 34 (EUR 37) million. For information about the amount of electricity generated, purchased and sold, please see Stora Enso's Sustainability Report 2017, section Materials, water & energy. Sustainability Report 2017 will be published during week 9.
The Group borrows from or has financial arrangements with several financial institutions where certain members of the Stora Enso Board of Directors or Group Leadership Team also act as members of the Board of Directors, Supervisory Board or Executive Management Group of one or more of those bodies. All group borrowings and financial arrangements have been negotiated on arms-length terms and several have existed for a number of years and prior to the current Board membership.
In 2014, International Finance Corporation (IFC) agreed to invest CNY 356 million (EUR 46 million) in an equity stake in Stora Enso’s Guangxi project, representing a 5% shareholding in the project. By the end of 2017, IFC has already invested CNY 245 million (EUR 31 million). Stora Enso’s outstanding loan balances from IFC amounted to EUR 348 (EUR 436) million at year end. The funding is based at USD 6-month LIBOR plus margins ranging from +2.30% to +2.80%.
Research and development
Stora Enso conducts research and development in its own research centres and together with an external network. In addition, interests are held in the following research partners: Swetree Technologies AB, Cellutech AB, Combient AB, Amexci AB and Clic Innovation Ltd.
Paper for recycling
The Group owns non-controlling interests in several paper recyclers from which paper for recycling is purchased at market prices.
Forest assets and wood procurement
The Group has a 41% interest in Tornator with the remaining 59% being held mainly by Finnish institutional investors. Stora Enso has long-term purchase contracts with the Tornator Group for approximately 2 million cubic metres of wood annually at market prices, and in 2017 purchases of 2 (2) million cubic metres came to EUR 62 (EUR 65) million.
In 2017, the Group has a 49.28% interest in Bergvik Skog with the remaining 50.72% held mainly by institutional investors. The Group has long-term supply contracts with Bergvik Skog under which Bergvik Skog sells some 5 million cubic metres of wood annually to Stora Enso at market prices. In 2017, these purchases of 5 (5) million cubic metres amounted to EUR 106 (EUR 103) million and Group sales to Bergvik Skog amounted to EUR 39 (EUR 41) million, mainly for forest management services.
Stora Enso has a significant land leasing contract with its non-controlling interest partner Guangxi Forestry Group Co. Ltd. in China. The leases paid during 2017 amounted to EUR 16 (EUR 16) million.
The Group owns 34.4% of the shares of Steveco Oy, a Finnish company engaged in loading and unloading vessels. The other shareholders in Steveco are UPM-Kymmene, Finnlines, Ahlström Capital and Myllykoski. The stevedoring services are provided by Steveco at market prices and in 2017 amounted to EUR 25 (EUR 25) million.