Translation note:
This
version
of
our
report
is
a
translation
from
the
original,
which
was
prepared
in
Polish.
All
possible
care
has
been
taken
to
ensure
that
the
translation
is
an
accurate
representation
of
the
original.
However,
in
all
matters
of
interpretation
of
information,
views
or
opinions,
the
original
language
version
of
our
report
takes precedence over this translation.
PricewaterhouseCoopers Polska spółka z ograniczoną
odpowiedzialnością Audyt sp. k.,
Nowy Rynek, ul. Wierzbięcice 1A, 61-569 Poznań, Polska
T: +48 (61) 851 1500, F: +48 (61) 851 1501, www.pwc.com
PricewaterhouseCoopers Polska spółka z ograniczoną odpowiedzialnością Audyt Sp. k.
is entered into the National Court Register maintained by the District Court for the Capital City
of Warsaw, under KRS number 0000750050, NIP 526-021-02-28. The seat of the Company is
in Warsaw at Polna 11
Independent Statutory Auditor’s Report
To the General Shareholder’s Meeting and the Supervisory Board of Arctic Paper S.A.
Report on the audit of separate financial statements
Our Opinion
In our opinion, the annual separate financial statements:
give a true and fair view of the separate financial position of Arctic Paper S.A. (the “Company”) as at
31 December 2025 and the Company’s separate financial performance and separate cash flows for
the year then ended in accordance with the applicable International Financial Reporting Standards
as adopted by the European Union and the adopted accounting policies;
comply in terms of form and content with the laws applicable to the Company articles of association;
have been prepared on the basis of properly maintained books of accounts in accordance with the
provisions of Chapter 2 of the Accounting Act of 29 September 1994 (the “Accounting Act”).
Our opinion is consistent with our additional report to the Audit Committee of the Company issued on the
date of this report.
What we have audited
We have audited the annual separate financial statements of Arctic Paper S.A. which comprise:
•
the separate statement of financial position as at 31 December 2025;
•
the separate statement of profit or loss for the financial year then ended;
•
the separate statement of other comprehensive income for the financial year then ended;
•
the separate statement of changes in equity for the financial year then ended;
•
the separate statement of cash flows for the financial year then ended, and
•
the additional information comprising the introduction to the financial statements and additional
notes and explanations.
Basis for opinion
We conducted our audit in accordance with the National Standards on Auditing in the wording of the
International Standards on Auditing as adopted by the resolutions of the National Council of Statutory
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Auditors and the resolution of the Council of the Polish Agency for Audit Oversight (“NSA”) and
pursuant to the act of 11 May 2017 on Statutory Auditors, Audit Firms and Public Oversight (the “Act on
Statutory Auditors”) and the Regulation (EU) No. 537/2014 of 16 April 2014 on specific requirements
regarding the statutory audit of public interest entities and repealing Commission Decision 2005/909/EC
(the “EU Regulation”). Our responsibilities under NSA are further described in the Auditor’s
responsibilities for the audit of the separate financial statements section.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We are independent of the Company in accordance with the ethical requirements of the EU Regulation
that are relevant to audits of financial statements of public interest entities, the ethical requirements of
the Act on Statutory auditors that are relevant to audits of financial statements in Poland and “the
Handbook of the International code of ethics for professional accountants (including International
independence standards) (the “Code of ethics”) as adopted by resolution of the National Council of
Statutory Auditors as applicable to audits of financial statements of public interest entities. We have also
fulfilled our other ethical responsibilities in accordance with ethical requirements of the EU Regulation,
ethical requirements of the Act on Statutory Auditors and the Code of ethics. During the audit, the key
statutory auditor and the audit firm remained independent of the Company in accordance with the
independence requirements set out in the Act on Statutory Auditors and in the EU Regulation.
Our audit approach
Overview
The overall materiality threshold adopted for our audit was set
at PLN 12 580 thousand, which represents 1% of total assets
of the Company
Impairment of selected non
-
current assets – investments in
the subsidiary Rottneros AB
3
As part of designing our audit, we determined materiality and assessed the risks of material
misstatement in the separate financial statements. In particular, we considered where the Company’s
Management Board made subjective judgements; for example, in respect of significant accounting
estimates that involved making assumptions and considering future events that are inherently uncertain.
As in all of our audits we also addressed the risk of management override of internal controls, including
among other matters, consideration of whether there was evidence of bias that represented a risk of
material misstatement due to fraud.
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion
on the separate financial statements as a whole, taking into account the structure of the Company, the
accounting processes and controls, and the industry in which the Company operates.
Materiality
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain
reasonable assurance whether the separate financial statements are free from material misstatement.
Misstatements may arise due to fraud or error. They are considered material if, individually or in
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of the separate financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall materiality for the separate financial statements as a whole , as set out in the table
below. These, together with qualitative considerations, helped us to determine the scope of our audit
and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, if
any, both individually and in aggregate on the separate financial statements as a whole.
Overall Company materiality
1% total assets of the Company
Rationale for the materiality benchmark
applied
For Arctic Paper S.A., we selected total assets as the
benchmark for determining materiality, as in our view
this measure is appropriate for assessing the
Company’s performance by users of the financial
statements and is a generally accepted benchmark for
parent entities providing services within a capital group.
We set materiality at 1%, which, based on our
professional judgement, falls within the range of
acceptable quantitative materiality thresholds.
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We agreed with the Audit Committee of the Company that we would report to them misstatements of the
separate financial statements identified during our audit above PLN 1 250 thousand, as well as
misstatements below that amount that, in our view, warranted reporting for qualitative reasons.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the separate financial statements of the current period. These matters were addressed in the
context of our audit of the separate financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
How our audit addressed the key audit matter
Impairment of selected non
-
current assets –
investments in the subsidiary Rottneros AB
In Note 4.1 to the Company’s separate financial
statements, the Company described its
accounting policies and presented detailed
disclosures relating to investments in subsidiaries
and impairment. As at 31 December 2025, the
balance of investments in subsidiaries amounted
to PLN 1,142.3 million (31 December 2024: PLN
1,070.8 million). The Company measures its
investments at cost less impairment losses. In
accordance with IFRSs, the Management Board
annually performs, as a first step, an assessment
of indicators of impairment and, where such
indicators are identified, carries out impairment
tests. Due to the persisting unfavourable market
conditions, including lower demand for the
products of the Rottneros AB Group (which
constitutes the consolidated operating group for
the pulp segment), the Company performed an
impairment test of its investment in Rottneros AB
as at 31 December 2025 and estimated its
recoverable amount, which was determined as
value in use (estimated on the basis of a
discounted projected cash flow model). The
identification of impairment indicators, the
Our audit procedures included, in particular:
• obtaining an understanding of and evaluating
the process for identifying indicators of
impairment of assets;
• performing a critical assessment and analysis of
indicators triggering the requirement to perform
an impairment test, including, among other
matters, for all subsidiaries, comparing the net
asset values of those subsidiaries with the
carrying amounts of the investments in those
subsidiaries as presented in the Company’s
separate financial statements;
• evaluating the appropriateness and
completeness of disclosures relating to
impairment testing in the separate financial
statements;
• verifying the mathematical accuracy and
methodological consistency (with the involvement
of PwC internal valuation specialists) of the
valuation model prepared by the Management
Board based on discounted forecast cash flows
and discounted dividends;
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performance of the impairment test and the
appropriate determination of the impairment loss
require the Management Board to apply a number
of assumptions and exercise significant
judgement. In particular, the Management Board’s
estimates and judgements relate, among other
matters, to the Company’s adopted strategy,
financial plans and cash flow forecasts for future
periods, as well as macroeconomic and market
assumptions. Given the significance of this
balance in the separate financial statements and
the sensitivity of the results of the above analyses
to changes in assumptions and estimates, we
considered this matter to be a key audit matter.
• performing a critical assessment of the
assumptions adopted and estimates made by the
Management Board for the purposes of
determining the recoverable amount of
non-current assets, including, among other
matters:
• the five-year projection period of future cash
flows and the assumed level of revenues,
operating margins and forecast changes in net
working capital;
• the discount rates applied (based on the
weighted average cost of capital), with the
involvement of PwC internal specialists;
• terminal growth rates applied beyond the
forecast period; and
• evaluating the sensitivity analysis performed by
the Management Board with respect to changes
in key assumptions used in the valuation.
Responsibility of the Management and Supervisory Board for the separate financial statements
The Management Board of the Company is responsible for the preparation, based on the properly
maintained books of accounts of the annual separate financial statements that give a true and fair view
of the Company’s financial position and financial performance, in accordance with International Financial
Reporting Standards as adopted by the European Union, the adopted accounting policies, the applicable
laws and the Company’s Articles of Association, and for such internal control as the Company’s
Management Board determines is necessary to enable the preparation of separate financial statements
that are free from material misstatement, whether due to fraud or error.
In preparing the separate financial statements, the Company’s Management Board is responsible for
assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless the Company’s
Management Board either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.
The Company’s Management Board are obliged to ensure that the separate financial statements comply
with the requirements specified in the Accounting Act. Members of the Supervisory Board are
responsible for overseeing the financial reporting process.
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Auditor’s responsibility for the audit of the separate financial statements
Our objectives are to obtain reasonable assurance about whether the separate financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with the NSA will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in
aggregate, they could reasonably be expected to influence economic decisions of users taken on the
basis of these separate financial statements.
The scope of the audit does not include an assurance on the Company’s future profitability nor the
efficiency and effectiveness of conducting its affairs by the Company’s Management Board, now or in
future.
As part of an audit in accordance with NSA, we exercise professional judgement and maintain
professional scepticism throughout the audit.
We also:
•
identify and assess the risks of material misstatement of the separate financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks,
and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or
the override of internal control;
•
obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control;
•
evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the Company’s Management Board;
•
conclude on the appropriateness of the Company’s Management Board’s use of the going
concern basis of accounting and, based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast significant doubt on the
Company’s ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the
separate financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Company to cease to continue as a going
concern;
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•
evaluate the overall presentation, structure and content of the separate financial statements,
including the disclosures, and whether the separate financial statements represent the underlying
transactions and events in a manner that achieves fair presentation;
•
plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business units within the Company as a basis for forming
an opinion on the separate financial statements. We are responsible for the direction, supervision
and review of the audit work performed for the purpose of the group audit. We remain solely
responsible for our audit opinion.
We communicate with the Audit Committee of the Company regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any significant deficiencies
in internal control that we identify during our audit.
We also provide the Audit Committee of the Company with a statement that we have complied with
relevant ethical requirements regarding independence, and communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where applicable,
actions taken to eliminate threats or safeguards applied.
From the matters communicated to the Audit Committee of the Company, we determine those matters
that were of most significance in the audit of the separate financial statements of the current period and
are therefore the key audit matters. We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences
of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Other information, including the report on operations
Other information comprises:
•
the Report on the Company’s operations for the financial year ended 31 December 2025 (“the
Report on the operations”) together with the corporate governance statement which is a separate
part of the Report on the operations,
•
other documents included in the Annual Report for the financial year ended 31 December 2025
(together “Other Information”). Other information does not include the separate financial statements and
our auditor’s report thereon.
8
Responsibility of the Management and Supervisory Board of the Company
The Management Board of the Company is responsible for the preparation of the Other Information in
accordance with the law.
The Company’s Management Board and the members of the Supervisory Board are obliged to ensure
that the Report on the operations including its separate part comply with the requirements of the
Accounting Act.
Statutory auditor’s responsibility
Our opinion on the separate financial statements does not cover the Other Information .
In connection with our audit of the separate financial statements, our responsibility under NSA is to read
the Other Information and, in doing so, consider whether the Other Information is materially inconsistent
with the information in the separate financial statements, our knowledge obtained in our audit, or
otherwise appears to be materially misstated. If, based on the work performed, we identified a material
misstatement in the Other Information, we are obliged to inform about it in our audit report.
In accordance with the requirements of the Act on Statutory Auditors, we are also obliged to issue an
opinion on whether the Report on the operations has been prepared in accordance with the
requirements of Article 49 of the Accounting Act and para. 72 of the Regulation of the Minister of
Finance dated 6 June 2025 on current and periodical information submitted by issuers of securities and
conditions for considering as equivalent the information required under the legislation of a non-Member
State (the “Regulation on current information”), is consistent with information included in separate
financial statements and to issue a statement as to whether, in the light of the knowledge about the
Company and its environment obtained during the audit, any material misstatements have been
identified in the Report on the operations and an indication of what any such material misstatement is.
Moreover, we are obliged to issue an opinion on whether the Company provided the required
information in its corporate governance statement.
Statement on the Other information
We declare that, based on the knowledge of the Company and its environment obtained during our
audit:
•
we have nothing to report regarding identification of material misstatements in the Other
information;
•
we have not identified any material misstatements in the Report on the operations.
9
Opinion on the Report on the operations
Based on the work we carried out during our audit, in our opinion, the Report on the operations:
•
has been prepared in accordance with the requirements of Article 49 of the Accounting Act and
para. 72 of the Regulation on current information;
•
is consistent with the information in the separate financial statements.
Opinion on the corporate governance statement
In our opinion, in its corporate governance statement, the Company included information set out in para.
72.7 (5) of the Regulation on current information. In addition, in our opinion, information specified in
paragraph 72.7 (5)(c)–(f), (h) and (i) of the said Regulation included in the corporate governance
statement are consistent with the applicable provisions of the law and with information included in the
separate financial statements.
Report on other legal and regulatory requirements
Statement on the provision of non-audit services
To the best of our knowledge and belief, we declare that the non-audit services that we provided to the
Company and its parent and its controlled entities within the European Union the Fund and the
Management Company The Management Company and managed investment funds are in accordance
with the applicable laws and regulations in Poland and that we have not provided non-audit services that
are prohibited under Article 5(1) of the EU regulation and Article 136 of the Act on Statutory Auditors.
The non-audit services which we have provided to the Company and its controlled entities during the
period from the beginning of the audited period to the date of issuing this report are disclosed in the
Report on the operations.
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Appointment
We have been appointed to audit the annual separate financial statements of the Company by the
Resolution of the Supervisory Board of 22 February 2023, and re-appointed by the resolution of 6
August 2025. We have been auditing the Company’s separate financial statements without interruption
since the financial year ended 31 December 2023, i.e. for 3 consecutive years.
The Key Statutory Auditor responsible for the audit on behalf of PricewaterhouseCoopers Polska spółka
z ograniczoną odpowiedzialnością Audyt sp.k., a company entered on the list of audit firms with the
number 144., is Krzysztof Zech.
Original report is signed in Polish
Krzysztof Zech
Key Statutory Auditor
No. in the registry: 13917
Poznań, 21 April 2026
