ENGLISH WHISTLEBLOWER CAREER OUR OFFICES Divisions Services Sustainability & CSR About Home About Tax Strategy About Tax Strategy CellMark Group Tax Strategy This strategy has been prepared by the CellMark Group Accounting and has been approved by the Vice President Accounting, the CFO and CEO of CellMark Group. 16 October 2019 Table of contents Introduction Background Scope Ownership and audience Strategy Company overview and business strategy Our business offerings The CellMark Guiding Principles are the foundation of our mission Tax Risks Tax Policy Statement Transparent dialogue with tax authoritites Governance, Structure & Organisation Governance Structure & Organisation 1. Introduction 1.1 Background The CellMark Group’s Tax Strategy has been created to articulate and communicate their worldwide tax strategy and strategic tax objectives. The CellMark Group will publish their Tax Strategy on the CellMark website to be able to inform a wider range of stakeholders. This is anticipated to fulfil policy disclosure requirements in the territories where the CellMark Group operates. The CellMark Group’s approach to tax seeks to align with the long-term interests of all its stakeholders, including employees, governments and communities. We also note an increasing amount of regulations applicable to the CellMark Group in addition to our own continuing growth in size and complexity. This requires a reliable, centralized and formalized internal tax function. This tax strategy satisfies paragraph 19 of schedule 19 to the UK Financing Act 2016. A list of the UK entities to which it applies is set out in Appendix 1 below. The tax strategy has been published in accordance with paragraph 16(2) of the Schedule by CellMark AB (hereinafter “CMAB”) as the Head of the CellMark Group. This strategy applies from the date of publication until it is superseded. References to “UK taxation” are to the taxes and duties set out in paragraph 15(1) of the Schedule which include Income Tax, Corporation Tax, PAYE, NIC, VAT, Insurance Premium Tax, and Stamp Duty Land Tax. References to “tax”, “taxes” or “taxation” are to UK taxation and to all corresponding worldwide taxes and similar duties in respect to which the Group has legal responsibilities. 1.2 Scope This tax strategy is applicable for all companies that are controlled by CMAB. The tax strategy and our strategic objectives encompass a range of taxes including for example, corporate income tax, indirect taxes, employment taxes and similar levies applicable to the CellMark Group. 1.3 Ownership and audience This document is owned by the CellMark Group’s accounting department (hereinafter “Group Accounting”), which reports directly to the CFO. The strategy is reviewed and approved by the Vice President Accounting (hereinafter “VP Accounting”), CFO and CEO on an annual basis, as part of their responsibility for the CellMark Group’s tax position. The strategy is supported and reinforced by Group Accounting, the central Compliance Manager and Divisional Presidents supported by Local Managing Directors (“MDs”) of the CellMark Group’s companies, who are fully involved in and responsible for compliance with local tax legislation. 2. Strategy 2.1 Company overview and business strategy The CellMark Group (hereinafter also referred to as “CellMark” or “the Group”) is headquartered in Gothenburg, Sweden, and the Group consists of subsidiaries and rep offices located worldwide. CellMark is a leader in international trade and business development for the global industry. The company offers services in sales & marketing, finance, logistics and business development. With a network of 70 offices in over 30 countries, CellMark connects entrepreneurs across a wide range of industries including chemicals, metals, wood pulp, paper, packaging, recycling, energy and medical devises. A key element in the CellMark Group is its large and profound global network of supplier, customers, shipping and forwarding companies, international banks and insurance institutions among others. The diversity of CellMark’s resource platform enhance the business relationship and makes it possible for the CellMark Group to act as a full service provider. Our business strategy is to put buyers and sellers together, facilitating international trade and business development for the global industry. A key part of the Group’s strategy is doing more than what is expected and always try to surpass expectations. This is done not only through the broad range of products that the CellMark Group distributes, but also through the Group’s service offering and business solutions, which facilitates companies to exchange products and services more efficiently. At the centre of the CellMark Group’s business strategy lies to streamline business transactions while mitigating risk and minimizing impacts on natural resources, as well as to facilitate superior, day-to-day interaction with clients and continuously guide and serve our business partners. 2.2 Our business offerings Sales & Marketing Our long term experience enables us to develop services that help our industrial partners improve performance. CellMark partners enjoy powerful local sales and marketing capabilities, including timely, accurate market information, risk management, order track­ing and invoicing and trade documentation, among other services. Financial Services Our years as a leader in global trade have given Cell­Mark deep financial insight and built close relationships with international banks and insurance institutions. That allows us to tailor innovative financial and risk management solutions that help importers and exporters worldwide to stay competitive, as well as match the needs of both buyer and seller. Logistics Customer Services As a large shipper of goods, CellMark has cultivated close relationships with major shipping lines, forwarding companies, terminals, haulers and insurance companies. These partnerships complement our deep product knowledge, resulting in high-quality transportation at competitive costs. We integrate these services with our divisions. Regulatory Compliance and Support CellMark helps customers and suppliers navigate the complexities of domes­tic and foreign markets, and proactively updates customers on regulatory changes around the world. At the same time, we identify new business opportunities created by regulatory changes. Custom Manufacturing and Product Development Through our teams, we leverage global knowledge with industry-specific expertise. We make innovation tangible, with strategic exploration and a structured vetting process. CellMark collaborates with business partners that continuously design and develop products that meet the specific manufacturing needs of our customers. Our Chemical partners’ global lab capabilities and research and development platforms deliver innovative solutions to everyday manufacturing challenges. 2.3 The CellMark Guiding Principles are the foundation of our mission CellMark’s success stems from vision and dedication to the principles below – the CellMark Guiding Principles. CellMark’s Guiding Principles are the bedrock of all of CellMark’s actions. Integrity is the foundation of our relationships, with each other and with our business partners. The five Guiding Principles express the beliefs and values shared by CellMark. All CellMark team members, at every level, are expected to apply these values in their daily work and relations with others. We empower each other to be creative and decisive. We are a company of global entrepreneurs; we generate ideas and welcome change. We care about the welfare, health and well-being of our people, our business partners, and the communities where we are present. We build strong, agile teams of dedicated people with a results-oriented work ethic to align towards common goals. We develop long-lasting relationships while having fun. We are supportive, promote open dialogues and treat each other with respect. We celebrate our accomplishments and learn from our experiences. We develop tools, training and guardrails to facilitate sustainable growth. 2.4 Tax Risks Since the CellMark Group has a network of 70 offices in over 30 countries, the Group is exposed to a variety of tax risks. The identified risks are described in more detail below: Tax compliance and reporting risk: Covers risks associated with compliance failures, such as submissions of late or inaccurate income tax returns, the failure to submit claims, failures to comply with local rules and regulations, failure to maintain sufficient systems and controls in place to support tax compliance and reporting requirements. Transactional risks: arise where transactions are carried out or actions are taken without appropriate consideration of the potential tax consequences or where advice taken are not correctly implemented. Reputational risks: the risk that non-compliance with local tax rules and regulations will impact our relationships with stakeholders, clients, tax authorities, partners and the general public. Our tax management strategy is described in the tax policy statement below. 2.5 Tax Policy Statement Our goal is to take care of our stakeholders, to nurture a growing trust and generate more and better business. By following our values and implementing our objectives stated below, we will be able to achieve our mission for tax. Operate in a manner that demonstrates strong integrity We seek to build trust with our wider stakeholders, including tax authorities, by acting in an open and transparent way and maintaining an ongoing dialogue. In particular, we strive to have an open and honest relationship with the local tax authorities in all countries where we operate. In situations where tax law is unclear, we will engage with external tax advisors to ensure compliance and that we meet our statutory and legislative tax obligations. Where any disputes arise with tax authorities, we will resolve these in a timely manner by being co-operative, and seeking relevant approval from tax authorities prior to entering into any transactions, where appropriate. Apply responsibility, ownership and entrepreneurship to achieve financial targets The CellMark Group will meet its legal obligation to pay the correct amount of tax due in relation to its business activities and model. We act firmly to avoid engagement in any tax planning that may harm the CellMark Group’s business operations, reputation or stakeholders. We are working hard to achieve strong commercial results and ensure our future existence for the next generation. We will therefore operate within the letter and the spirit of the law. Ensuring a high standard of corporate governance, enforced by vigilant employees The level of risk appetite that the CellMark Group is willing to accept in relation to UK taxation is consistent with its overall objective of achieving certainty in the Group’s tax affairs, which is approved and communicated by CMAB’s Board of Directors. This also defines how we approach tax management and the mitigation of our tax risks. Our tax control framework ensures that ongoing compliance is achieved by managing tax processes with the implementation of appropriate policies, procedures and controls. Our central Compliance Manager as well as our Local MDs are skilled and educated in order to meet the CellMark Group’s tax responsibilities. In particular, we strive to meet our obligations of paying the relevant cash taxes due, and ensuring accurate and timely reporting and submissions of our tax returns. Every day, our customers, employees and stakeholders expect us to keep our promises and meet their expectations. Provide commercial support to facilitate technological development and geographical expansion A key to our success is the determination and desire to contribute to the expansion and well-being of the CellMark Group. Group Accounting is consulted and involved in advance of changes in the CellMark Group’s legal structure, and any significant business transactions. Our regular internal dialogue with the rest of the business aims to identify and mitigate any potential tax risks and ensures compliance with laws and regulations. Tax does not influence our commercial decision-making, instead commercial opportunities and rationales are the driving force behind every business decision. 3. Transparent dialogue with tax authorities The CellMark Group seeks to comply with its tax filing, tax reporting, tax payment and other tax obligations globally, as well as to provide any other relevant information requested by a tax authority without delay in order to accurately establish the relevant CellMark entity’s tax liabilities. In particular Group Accounting will pro-actively manage CellMark’s relationship with tax authorities with the aim of minimising the risk of challenge, dispute or damage to the Group’s credibility. Group Accounting and the local accounting department in each CellMark entity is required to foster good professional and transparent relationships with their respective tax authority. Also, CellMark adheres to local rules and regulations on documentation retention requirements. As a minimum, each tax-paying entity within the CellMark Group should document and retain all information required to determine the taxable amount and related taxation, such as accounting workbooks and sheets, files and other documentation. 4. Governance, Structure & Organisation 4.1 Governance The CellMark Group is committed to meeting high standards of Corporate Governance and the CellMark Group has therefore created a structure for responsibility and governance. CellMark’s governance ensures value creation for the CellMark Group and serves to protect stakeholder’s interests. 4.2 Structure & Organisation The responsibilities and roles within the CellMark Group in relation to the Tax Strategy are as follows: Group Accounting is responsible for the execution of this policy and reports to the CFO; The VP Accounting, CEO and CFO are responsible for reviewing and approving this Policy. CMAB’s Board of Directors is ultimately responsible for the CellMark Group’s tax position and strategies and should also approve this Policy, after review and approval from the VP Accounting, CFO and CEO. The central Corporate Compliance Manager and Divisional Presidents support and reinforce this policy. Local MDs of the CellMark Group’s companies are fully involved in and responsible for preparing and providing part of the necessary tax information, as well as being responsible for the compliance with local rules. Local MDs liaise with and continuously seek support from Group Accounting; The Group Accounting reviews tax matters on a regular basis. The Audit committee also reviews tax matters as part of their rolling yearly calendar or quarterly in case of relevant developments; The local HR functions, as well as the local accounting departments within the CellMark Group, are responsible for compliance in respect of employee taxes; Group Accounting and Local MDs engage external advisors when it is deemed prudent to obtain a third party’s expert view on a specific issue. The governance model is illustrated in the figure below: Local accounting are normally the primary contact with stakeholders in local matters (supported if necessary by Group Accounting) Group Accounting is normally the primary contact with stakeholders in regards to Swedish tax matters and strategical tax matters for the CellMark Group Appendix 1 – List of entities CellMark Chemicals Ltd CellMark UK Ltd CellMark Global Divisions Basic Materials Chemicals Paper Packaging Pulp Recycling Energy CellMark Ingredients Foundry & Shot Blasting NorCell Paper Plastics Semper Exeter Sunset Trading Services Sales & Marketing Logistics & Customer Services Financial Services Regulatory & Compliance Support Custom Manufacturing & R&D Sustainability & CSR Sustainability & CSR Responsible Business CellMark Cares PaperSeed Foundation About How we can help Our People Our Company Our Values Code of Conduct Key Financial Figures Board of Directors Group Management A Word from the President Press & Media News Certifications General Trade Rules Privacy Policy Privacy Law Tax Strategy 2021 COPYRIGHT CELLMARK AB. 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