G4. Transactions with related parties

Up until the split of SCA into two listed companies on June 15, 2017, Essity had a number of transactions with SCA units, both the former Forest Products business areas and the Parent Company Svenska Cellulosa Aktiebolaget SCA. These transactions and dealings are outlined in the table below. In relation to remuneration of senior executives, refer to Note C3 Remuneration of senior executives and for disclosures regarding transactions with associates, joint ventures and joint operations to Notes F3 Joint ventures and associates and to F4 Joint operations.

Purchases from Forest Products relate primarily to pulp used in Essity’s manufacturing process. Pricing between units has adhered to the transfer pricing policy that applied at the SCA Group. Other income relates to management fees that are invoiced to Forest Products for such items as management functions and which have been allocated to Essity in connection with the preparation of the combined financial statements. The financial income is attributable to the internal bank’s lending to Forest Products.

The most significant dealing during the presented fiscal years relates to the lending that Essity has conducted via the internal bank to Forest Products, which is classified as current financial receivables, Group companies. Transactions in the form of lending and reallocation of net debt have been classified as transactions with shareholders in equity, refer to Note E8 Equity. The take over by Essity Aktiebolag (publ) on December 30, 2016 of the majority of the external financing that existed within SCA in connection with the final allocation of assets and liabilities between Essity and SCA is the reason for the major change in transactions with shareholders in equity in 2016.

The remaining financial dealings between Essity and SCA were settled in conjunction with the split of the Group into two listed companies on June 15, 2017.