Arctic Paper S.A. — Audit Report / Information 2016

Aug 24, 2017

Attachment to the current report no. 15/2017 dated 23 August 2017 Adjusted financial data of the Company

1. Adjustment in the 2016 annual report, in the financial statements – adjustment of the opening balance as at 1 January 2016 – regards an increase of the impairment charge to the investment by PLN 61,136 thousand

Standalone balance sheet

		As at
		1 January 2016
	approved	adjustment	adjusted
ASSETS
Non-current assets
Property, plant and equipment	2 108		2 108
Intangible assets	1 322		1 322
Investment in subsidiaries	838 741	(61 136)	777 605
Other non-financial assets	1 103		1 103
	- 843 274	-	- 782 138
Current assets
Trade and other receivables	81 928		81 928
Income tax receivables	193		193
Other financial assets	12 683		12 683
Other non-financial assets	2 689		2 689
Cash and cash equivalents	9 435		9 435
	- 106 927		- 106 927
	0%		0%
TOTAL ASSETS	950 202 -		889 066 -
EQUITY AND LIABILITIES
Equity
Share capital	69 288		69 288
Share premium	447 641		447 641
Other reserves	147 871		147 871
Foreign currency translation	290		290
Retained earnings / Accumulated (unabsorbed) losses	3 870 -	(61 136) -	(57 266) -
Total equity	668 959 -		607 823 -
Non-current liabilities
Interest bearing borrowings and loans	203 357		203 357
Provisions	1 151		1 151
Other non-current liabilities	390		390
Accruals and deferred income	103		103
	205 001		205 001
Current liabilities
Interest bearing borrowings and loans	788		788
Interest bearing borrowings and loans	69 593		69 593
Other financial liabilities	187		187
Other current liabilities	1 688		1 688
Accruals and deferred income	3 985		3 985
	76 242		76 242
TOTAL LIABILITIES	- 281 243 -		- 281 243 -
TOTAL EQUITY AND LIABILITIES	950 202		889 066

1. Adjustment in the H1 2016 report, in the interim standalone financial statements – adjustment to the income statement H1 2016 – regards an increase of the impairment charge to the investment by PLN 26,637 thousand.

Standalone income statement

	6 months period ended 30 June 2016
	approved	adjustment	adjusted
Continuing operations
Sales of services	20 045		20 045
Interest income from subsidiaries	252		252
Dividend income	39 093		39 093
Sales revenues	59 389		59 389
Cost of interest to subsidiaries	(3 413)		(3 413)
Gross profit on sales	55 976		55 976
Other operating income	111		111
Selling and distribution costs	(2 041)		(2 041)
Administrative expenses	(18 551)		(18 551)
Other operating expenses	(20 710)	(26 637)	(47 347)
Operating profit / (loss)	14 784		(11 853)
Finance income	12		12
Finance costs	(4 599)		(4 599)
Profit / (loss) before tax	10 197		(16 440)
Income tax	-		-
Net profit (loss) from continuing operations	10 197		(16 440)
Discontinued operations
Profit (loss) for the period from discontinued operations	-
Net profit (loss) for the period	10 197		(16 440)
Earnings per share:
– basic from the profit (loss) for the period	0,15		(0,24)
– basic from the profit (loss) from continuing operations for the	0,15		(0,24)

Standalone statement of comprehensive income

	6 months period ended 30 June 2016
	approved	adjustment	adjusted
Net profit (loss) for the period	10 197 -	(26 637) -	(16 440) -
Other comprehensive income
Items to be recognised in profit/loss in future periods:
Exchange difference on translation of foreign operations	(107)		(107)
Other comprehensive income	(107) -		(107) -
Total comprehensive income	10 090		(16 547)

Standalone balance sheet

		30 June 2016
	approved	adjustment of opening	adjustment for the	adjusted
		balance as at 1 January 2016	period
ASSETS
Non-current assets
Property, plant and equipment	1 936			1 936
Intangible assets	1 338			1 338
Investment in subsidiaries	841 584	(61 136)	(26 637)	753 811
Other non-financial assets	1 115			1 115
	845 974			758 201
Current assets
Trade and other receivables	71 893			71 893
Income tax receivables	270			270
Other financial assets	11 297			11 297
Other non-financial assets	2 604			2 604
Cash and cash equivalents	7 681			7 681
	93 744			93 744
TOTAL ASSETS	939 718			851 945
EQUITY AND LIABILITIES
Equity
Share capital	69 288			69 288
Share premium	447 641			447 641
Other reserves	152 781			152 781
Foreign currency translation	184			184
Retained earnings / Accumulated (unabsorbed) losses	9 157	(61 136)	(26 637)	(78 616)
Total equity	679 049			591 276
Non-current liabilities
Interest bearing borrowings and loans	188 260			188 260
Provisions	1 164			1 164
Other non-current liabilities	293			293
Accruals and deferred income	213			213
	189 929			189 929
Current liabilities
Interest bearing borrowings and loans	875			875
Interest bearing borrowings and loans	62 423			62 423
Other financial liabilities	192			192
Other current liabilities	1 889			1 889
Accruals and deferred income	5 362			5 362
	70 740			70 740
TOTAL LIABILITIES	260 669			260 669
TOTAL EQUITY AND LIABILITIES	939 718			851 945

As at

Standalone cash flow statement

	6 months period ended 30 June 2016
	approved	adjustment	adjusted
Cash flow from operating activities
Profit (loss) before taxation	10 197	(26 637)	(16 440)
Adjustments for:
Amortization and depreciation	197		197
Gain / (loss) from foreign exchange differences	(107)		(107)
Impairment of assets	-	26 637	26 637
Net interest and dividends	706		706
Increase / decrease in receivables and other non-financial assets	10 108		10 108
Increase / decrease in payables except for loans, borrowings and bonds	(6 965)		(6 965)
Change in accruals and prepayments	1 486		1 486
Change in provisions	12		12
Income tax paid	(76)		(76)
Increase / decrease in loans to subsidiaries	(13 624)		(13 624)
Other	-		-
Net cash flow from operating activities	1 934		1 934
Cash flow from investing activities
Purchase of property, plant and equipment and intangible assets	(139)		(139)
Short-term deposit	-		-
Increase of shares in subsidiary	(2 843)		(2 843)
Net cash flow from investing activities	(2 982)		(2 982)
Cash flow from financing activities
Interest paid	(706)		(706)
Proceeds from finance lease liabilities	-		-
Net cash flow from financing activities	(706)		(706)
Net increase/(decrease) in cash and cash equivalents	(1 754)		(1 754)
Cash and cash equivalents at the beginning of the period	9 435		9 435
Cash and cash equivalents at the end of the period	7 681		7 681

Standalone statement on changes in equity - approved

	Attributable to equityholders of the Company
	Share capital	Reserv e capital	FX differences on translation of foreign operations	Other reserves	Retained earnings / (Accumulated losses)	Total equity
As at 1 January 2016	69 288	447 641	290	147 871	3 870	668 959
Foreign currency translation	-		(107)	-	-	(107)
Net profit/(loss) for the period	-	-	-	-	10 197	10 197
Total comprehensive income	-	-	(107)	-	10 197	10 090
Profit distribution	-	-	-	4 910	(4 910)	-
As at 30 June 2016 (unaudited)	69 288	447 641	184	152 781	9 157	679 049

Standalone statement on changes in equity - adjustment

			FX differences on translation of foreign		Retained earnings /
	Share capital	Reserv e capital	operations	Other reserves	(Accumulated losses)	Total equity
As at 1 January 2016	-	-	-	-	(61 136)	(61 136)
Other comprehensive income for the period	-	-	-	-	-	-
Net profit for the period	-	-	-	-	(26 637)	(26 637)
Total comprehensive income	-	-	-	-	(26 637)	(26 637)
Profit distribution	-	-	-	-	-	-
As at 30 June 2016 (unaudited)	-	-	-	-	(87 773)	(87 773)

Attributable to equityholders of the Company

Attributable to equityholders of the Company

Standalone statement on changes in equity - adjusted

	Share capital	Reserv e capital	translation of foreign operations	Other reserves	Retained earnings / (Accumulated losses)	Total equity
As at 1 January 2016	69 288	447 641	290	147 871	(57 266)	607 823
Other comprehensive income for the period	-	-	-	-	-	-
Net profit for the period	-	-	-	-	(16 440)	(16 440)
Total comprehensive income	-	-	-	-	(16 440)	(16 440)
Profit distribution	-	-	-	-	-	-
As at 30 June 2016 (unaudited)	69 288	447 641	184	152 781	(78 616)	591 276

1. Adjustment in the 2016 annual report, in the financial statements – adjustment to the income statement for 2016 regards a decrease of the impairment charge to the investment by PLN 128 thousand (the impairment charge was decreased by PLN 26,765 thousand in the second half of 2016 which in connection with the abovementioned adjustment to H1 2016 results in a total net adjustment for 2016 of PLN 128 thousand).

Standalone income statement

	Year ended 31 December 2016
	approved	adjustment	adjusted
Continuing operations
Sales of services	43 283		43 283
Interest income from subsidiaries	985		985
Dividend income	54 643		54 643
Sales revenues	98 911		98 911
Cost of interest to subsidiaries	(9 890)		(9 890)
Gross profit on sales	89 021		89 021
Other operating income	197		197
Selling and distribution costs	(4 072)		(4 072)
Administrative expenses	(34 571)		(34 571)
Other operating expenses	(70 128)	128	(70 000)
Operating profit / (loss)	(19 553)		(19 425)
Finance income	575		575
Finance costs	(13 452)		(13 452)
Profit / (loss) before tax	(32 430)		(32 302)
Income tax	(214)		(214)
Net profit (loss) from continuing operations	(32 644)		(32 516)
Discontinued operations
Profit (loss) for the period from discontinued operations	-
Net profit (loss) for the period	(32 644)		(32 516)
Earnings per share:
– basic from the profit (loss) for the period	(0,47)		(0,47)
– basic from the profit (loss) from continuing operations for the	(0,47)		(0,47)

Standalone statement of comprehensive income

	Year ended 31 December 2016
	approved	adjustment	adjusted
Net profit (loss) for the period	(32 644)	128	(32 516)
Other comprehensive income
Items to be recognised in profit/loss in future periods:
	(4 580)		(4 580)
Exchange difference on translation of foreign operations	60		60
Other comprehensive income	(4 520)		(4 520)
Total comprehensive income	(37 164)		(37 036)

Standalone balance sheet

			As at
			31 December 2016
	approved	adjustment of	adjustment for	adjustment for	adjusted
		opening balance	1H2016	2H2016
		as at 1 January
		2016
ASSETS
Non-current assets
Property, plant and equipment	1 979				1 979
Intangible assets	1 332				1 332
Investment in subsidiaries	802 682	(61 136)	(26 637)	26 765	741 674
	62 905				62 905
Other non-financial assets	1 268				1 268
	870 166				809 158
Current assets
Trade and other receivables	76 687				76 687
Income tax receivables	371				371
Other financial assets	77 332				77 332
Other non-financial assets	6 765				6 765
Cash and cash equivalents	10 863				10 863
	172 017				172 017
TOTAL ASSETS	1 042 184				981 176
EQUITY AND LIABILITIES
Equity
Share capital	69 288				69 288
Share premium	447 641				447 641
Other reserves	148 200				148 200
Foreign currency translation	350				350
Retained earnings / Accumulated (unabsorbed) losses	(34 445)	(61 136)	(26 637)	26 765	(95 453)
Total equity	631 034				570 026
Non-current liabilities
Interest bearing borrowings and loans	275 514				275 514
Provisions	1 357				1 357
Other non-current liabilities	300				300
	277 171				277 171
Current liabilities
Interest bearing borrowings and loans	48 894				48 894
Interest bearing borrowings and loans	73 472				73 472
Other financial liabilities	4 486				4 486
Other current liabilities	2 072				2 072
Accruals and deferred income	5 056				5 056
	133 979				133 979
TOTAL LIABILITIES	411 150				411 151
TOTAL EQUITY AND LIABILITIES	1 042 184				981 176

Standalone cash flow statement

	Year ended 31 December 2016
	approved	adjustment	adjusted
Cash flow from operating activities
Profit (loss) before taxation	(32 430)	128	(32 302)
Adjustments for:
Amortization and depreciation	402		402
Gain / (loss) from foreign exchange differences	2 688		2 688
Impairment of assets	38 896	(128)	38 768
Net interest and dividends	6 182		6 182
Increase / decrease in receivables and other non-financial assets	1 001		1 001
Increase / decrease in payables except for loans, borrowings and bonds	4 262		4 262
Change in accruals and prepayments	967		967
Change in provisions	206		206
Income tax paid	(392)		(392)
Increase / decrease in loans to subsidiaries	(270 120)		(270 120)
Other	(5 022)		(5 022)
Net cash flow from operating activities	(253 361)		(253 361)
Cash flow from investing activities
Purchase of property, plant and equipment and intangible assets	(283)		(283)
Increase of shares in subsidiary	(2 839)		(2 839)
Net cash flow from investing activities	(3 122)		(3 122)
Cash flow from financing activities
Interest paid	(5 536)		(5 536)
Proceeds from finance lease liabilities	263 446		263 446
Net cash flow from financing activities	257 911		257 911
Net increase/(decrease) in cash and cash equivalents	1 428		1 428
Cash and cash equivalents at the beginning of the period	9 435		9 435
Cash and cash equivalents at the end of the period	10 863		10 863

Standalone statement on changes in equity - approved

	Attributable to equityholders of the Company
	Share capital	Reserv e capital	FX differences on translation of foreign operations	Other reserves	Retained earnings / (Accumulated losses)	Total equity
As at 1 January 2016	69 288	447 641	290	147 871	3 870	668 959
Foreign currency translation	-	-	60	(4 580)	-	(4 520)
Net profit/(loss) for the period	-	-	-	-	(32 644)	(32 644)
Total comprehensive income	-	-	60	(4 580)	(32 644)	(37 164)
Profit distribution	-	-	-	4 909	(4 909)	-
Settlement of Swedish tax group	-	-	-	-	(761)	(761)
As at 31 December 2016	69 288	447 641	350	148 200	(34 445)	631 034

Standalone statement on changes in equity - adjustment

	Share capital	Reserv e capital	FX differences on translation of foreign operations	Other reserves	Retained earnings / (Accumulated losses)	Total equity
As at 1 January 2015	-	-	-	-	(61 136)	(61 136)
Other comprehensive income for the period	-	-	-	-	-	-
Net profit for the period	-	-	-	-	128	128
Total comprehensive income	-	-	-	-	128	128
Profit distribution	-	-	-	-	-	-
As at 31 December 2016	-	-	-	-	(61 008)	(61 008)

Attributable to equityholders of the Company

Standalone statement on changes in equity - adjusted

	Attributable to equityholders of the Company
			FX differences on translation of foreign		Retained earnings /
	Share capital	Reserv e capital	operations	Other reserves	(Accumulated losses)	Total equity
As at 1 January 2015	69 288	447 641	290	147 871	(57 266)	607 823
Other comprehensive income for the period	-	-	-	-	-	-
Net profit for the period	-	-	-	-	(32 516)	(32 516)
Total comprehensive income	-	-	-	-	(32 516)	(32 516)
Profit distribution	-	-	-	-	-	-
As at 31 December 2016	69 288	447 641	350	148 200	(95 453)	570 026