Arctic Paper Group Annual Report 2013 toghether with

Management Board of Arctic Paper S.A. herewith publishes the Annual Report for Arctic Paper Group. Selected consolidated financial data For the For the For the For the period period period period from 01.01.2012 from from from to 31.12.2012 01.01.2013 01.01.2012 01.01.2013 to to to 31.12.2013 31.12.2012 31.12.2013 000'PLN 000'PLN 000'EUR 000'EUR Revenues 3 104 901 2 631 717 739 685 628 812 Operating (151 641) (19 998) (36 126) (4 778) profit (loss) Profit (182 719) (59 908) (43 529) (14 314) (loss) before tax Profit (152 153) 23 699 (36 248) 5 663 (loss) from continuing operations Profit (152 153) 23 699 (36 248) 5 663 (loss) for the period Profit (132 266) (102 353) (31 510) (24 456) (loss) for the period attributable to equity holders of the parent Net 14 857 167 054 3 539 39 915 operating cash flow Net (85 797) (54 967) (20 439) (13 133) investment cash flow Net (8 705) (73 391) (2 074) (17 536) financial cash flow Net change (79 645) 38 696 (18 974) 9 246 in cash and cash equivalents Weighted 68 905 218 55 727 201 68 905 218 55 727 201 average number of shares Weighted 68 905 218 55 727 201 68 905 218 55 727 201 average diluted number of shares EPS (in (1,92) (1,84) (0,46) (0,44) PLN/EUR) Diluted EPS (1,92) (1,84) (0,46) (0,44) (in PLN/EUR) Average 4,1976 4,1852 PLN/EUR rate* As at As at As at As at 31 31 31 31 December 2012 December December December 2013 2012 2013 000'PLN 000'PLN 000'EUR 000'EUR Assets 1 784 458 2 045 599 430 280 500 367 Long-term 428 151 433 432 103 239 106 020 liabilities Short-term 684 774 782 681 165 117 191 449 liabilities Equity 671 532 829 487 161 924 202 898 Share 69 288 55 404 16 707 13 552 capital Number of 69 287 783 66 144 483 69 287 783 66 144 483 shares Diluted 69 287 783 66 144 483 69 287 783 66 144 483 number of shares Book value 9,69 12,54 2,34 3,07 per share (in PLN/EUR) Diluted book 9,69 12,54 2,34 3,07 value per share (in PLN/EUR) Declared or 9 972 630 - 2 439 369 paid dividend (in PLN/EUR) Declared or - 0,18 - 0,04 paid dividend per share (in PLN/EUR) PLN/EUR rate - - 4,1472 4,0882 at the end of the period** * Items of the income and cash flow statement are converted at the exchange rate which is the arithmetic mean of average rates announced by the NBP in the given reporting period. ** Items of balance sheet and book value per share were converted at the average exchange rate announced by the NBP and prevailing at the balance sheet date. INDEPENDENT AUDITORS’ OPINION To the Supervisory Board of Arctic Paper S.A. 1. We have audited the attached consolidated financial statements of Arctic Paper S.A. Group (‘the Group’), for which the holding company is Arctic Paper S.A. (‘the Company‘) located in Pozna? at D?browskiego 334A, for the year ended 31 December 2013 containing the consolidated balance sheet as at 31 December 2013, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of changes in equity, the consolidated statement of cash flow for the period from 1 January 2013 to 31 December 2013 and the summary of significant accounting policies and other explanatory notes (‘the attached consolidated financial statements’). 2. The truth and fairness[1] (http://#_ftn1) of the attached consolidated financial statements, the preparation of the attached consolidated financial statements in accordance with the required applicable accounting policies and the proper maintenance of the consolidation documentation are the responsibility of the Company’s Management Board. In addition, the Company’s Management Board and Members of the Supervisory Board are required to ensure that the attached consolidated financial statements and the Directors’ Report meet the requirements of the Accounting Act dated 29 September 1994 (Journal of Laws 2013.330 with subsequent amendments – ‘the Accounting Act’). Our responsibility was to audit the attached consolidated financial statements and to express an opinion on whether, based on our audit, these financial statements comply, in all material respects, with the required applicable accounting policies and whether they truly and fairly[2] (http://#_ftn2) reflect, in all material respects, the financial position and results of the operations of the Group. 3. We conducted our audit of the attached consolidated financial statements in accordance with: · chapter 7 of the Accounting Act, · national auditing standards issued by the National Council of Statutory Auditors, in order to obtain reasonable assurance whether these financial statements are free of material misstatement. In particular, the audit included examining, to a large extent on a test basis, documentation supporting the amounts and disclosures in the attached consolidated financial statements. The audit also included assessing the accounting principles adopted and used and significant estimates made by the Company’s Management Board, as well as evaluating the overall presentation of the attached consolidated financial statements. We believe our audit has provided a reasonable basis to express our opinion on the attached consolidated financial statements treated as a whole. 4. In our opinion, the attached consolidated financial statements, in all material respects: · present truly and fairly all information material for the assessment of the results of the Group’s operations for the period from 1 January 2013 to 31 December 2013, as well as its financial position[3] (http://#_ftn3) as at 31 December 2013; · have been prepared in accordance with International Financial Reporting Standards as adopted by the EU; · are in respect of the form and content, in accordance with the legal regulations governing the preparation of financial statements. 5. We have read the ‘Directors’ Report for the period from 1 January 2013 to 31 December 2013 and the rules of preparation of annual statements’ (‘the Directors’ Report’) and concluded that the information derived from the attached consolidated financial statements reconciles with these financial statements. The information included in the Directors’ Report corresponds with the relevant regulations of the Decree of the Minister of Finance dated 19 February 2009 on current and periodic information published by issuers of securities and conditions for recognition as equivalent the information required by laws of non -EU member states (Journal of Laws 2009.33.259 with subsequent amendments). on behalf of Ernst & Young Audyt Polska spó?ka z ograniczon? odpowiedzialno?ci? sp. k. (formerly: Ernst & Young Audit sp. z o.o.) Rondo ONZ 1, 00-124 Warsaw Reg. No 130 Key Certified Auditor Andrzej Kowal certified auditor No. 90032 Warsaw, 21 March 2014 ---------------------------------------------------------------------- [1] (http://#_ftnref1) Translation of the following expression in Polish: ‘rzetelno?? i jasno??’ [2] (http://#_ftnref2) Translation of the following expression in Polish: ‘rzetelne i jasne’ [3] (http://#_ftnref3) Translation of the following expression in Polish: ‘sytuacja maj?tkowa i finansowa’ For additional information, please contact: Wolfgang Luebbert, CEO, tel. +49 40 51485310