ANNUAL REPORT
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 4
1. Overview 6
PURPOSE, MISSION, VISION AND VALUES 6
MESSAGE FROM THE CHAIRMAN OF THE BOARD OF DIRECTORS 8
MESSAGE FROM THE CEO 12
NAVIGATOR IN 2022 18
2. Business performance 28
2.1. BLEACHED EUCALYPTUS KRAFT PULP (BEKP) 29
2.2. PAPER 30
2.3. PACKAGING 35
2.4. TISSUE 37
2.5. ENERGY 39
2.6. FINANCIAL PERFORMANCE 40
2.7. SUSTAINABLE FINANCIAL MANAGEMENT 42
2.8. PERFORMANCE IN THE CAPITAL MARKET 42
2.9. CONTRIBUTION TO STATE TAX REVENUE 43
2.10. NAVIGATOR GROUP TAX POLICY 48
2.11. RISK MANAGEMENT 49
3. Involvement with Stakeholders 53
3.1. OUR TEAM 53
3.2. OUR CUSTOMERS 59
3.3. OUR SUPPLIERS 62
3.4. LOGISTICS 63
3.5. SOCIAL RESPONSIBILITY 64
4. Strategic priorities 71
4.1. FORESTRY 71
4.2. RESEARCH AND DEVELOPMENT 82
4.3. MOZAMBIQUE 85
4.4. DECARBONISATION PROJECT 90
5. European taxonomy 91
5.1. EUROPEAN ENVIRONMENTAL TAXONOMY FRAMEWORK 91
5.2. ELIGIBILITY ANALYSIS 92
5.3. ALIGNMENT ANALYSIS 92
5.4. DISCLOSURE OF KPIS 95
5.5. NEXT STEPS IN IMPLEMENTATION OF TAXONOMY 103
CONTENTS
REPORT OF THE BOARD
OF DIRECTORS
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 5
6. Proposed appropriation of profit or treatment of loss 104
7. Declaration referred to by Article 29-G(1)(c) of the
Portuguese Securities Code 105
8. Alignment with TCFD (Task Force on Climate Related
Financial Disclosures) Recommendations 107
8.1. FRAMEWORK 107
8.2. OUR PATH 108
8.3. GOVERNANCE 109
8.4. STRATEGY 113
8.5. RISK MANAGEMENT 120
8.6. METRICS AND GOALS 121
8.7. NEXT STEPS 123
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 6
1. OVERVIEW
Purpose, mission
Purpose
People, their quality of life, and the planet's future are what inspire and move us.
We want to share with society not only our outcomes, but also our knowledge, experience and
resources in the search for a better future.
This is why we are committed to creating sustainable value for our shareholders and for society
at large, making a better planet to hand down to future generations through sustainable
products and solutions that are natural, recyclable and biodegradable, and that contribute
towards carbon sequestration, oxygen production, the protection of biodiversity, soil formation,
and the fight against climate change.
Mission
Our mission is to be a global company with a reputation for innovation and sustainability in
processing forestry materials into products and services that improve people's lives.
Vision
To extend our leadership position in printing and writing paper to other business areas and add
to Portugal's international stature.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 7
Values
Trust
We believe in people, we welcome everyone's contribution, we respect their identity, promoting
development, cooperation and communication.
Integrity
We are guided by principles of transparency, ethics and respect in our dealings amongst
ourselves and with others.
Entrepreneurship
We are passionate about what we do, we like to get out of our comfort zone, we have the
courage to make decisions and to accept risks in a responsible way.
Innovation
We seek to bring out everyone's skills and creative potential to achieve the impossible.
Sustainability
Industrial, social and environmental sustainability is our business model.
Excellence
In our work we focus on quality, efficiency, safety and getting it right.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 8
MESSAGE FROM THE CHAIRMAN
OF THE BOARD OF DIRECTORS
Ricardo Pires
Chairman of the Board of Directors
Navigator is an engine of the rural economy, in particular
in the inner regions of the country; valuing the forest,
multiplying opportunities along the value chain and
managing close to 106,000 ha of a fully certified forest; valuing
its more than 7,300 suppliers, of which 73% are Portuguese
and is the 3rd largest exporter and the company
generating the highest Added Value in Portugal. A
company with a good track record as regards assisting
in the production of scientific knowledge and innovation.
And this, in light of the results now achieved and its
investment projects, generates opportunities to value also the
talent of its more than 3,200 employees.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 9
Revisiting The Navigator Company's year of 2022 is also, first and foremost, acknowledging its
staff's resolve, strategic focus and ability to engage around collective goals.
After two highly demanding and unpredictable years, when the pandemic took us through
unchartered territories, which we thought we would not cross in our times, 2022 was there and
some effects of the pandemic were still being felt. And after the outbreak of another war in
Europe, significant increases in production costs ensued, along with the return to high inflation,
interest rates increase and fears of economic slowdown.
This context thus amplifies the reach of The Navigator Company's staff's efforts, resolve and
performance.
I would therefore like to start by thanking all employees for such a remarkable year. We live in
a time when transformation, both profound and swift, challenges us to engage all our energy
and creativity in the search for new approaches, and it is extraordinary to witness such
responsiveness.
The 2022 results highlight this performance and the solidity of our business and also prove our
ability to pursue the most structuring projects, anchoring growth prospects even in adverse
scenarios.
The Navigator Company increased its investment this year
by more than 40% to €112.5 million, of which 35% – close
to 39.1 million – are of an environmental nature.
The Navigator Company increased its investment this year by more than 40% to €112.5
million, of which 35% – close to 39.1 million – are of an environmental nature. I would like to
recall the replacement of Fuel-Oil Boilers in the Setúbal Industrial Complex, a further step in
our commitment to achieving carbon neutrality of its industrial complexes by 2035, 15 years
before the Portuguese and European targets.
The ambitious diversification and product development plan remain some of the Group's top
priorities, e.g. in the tissue and sustainable packaging solutions segments, whose performance
in 2022 is worth highlighting.
As regards tissue, Navigator engaged in securing a disruptive positioning, assisted by the
development of advanced solutions based on proprietary technologies. As a result of this
ongoing bet on innovation, sales of new products resulting therefrom almost tripled compared
to 2021.
In the packaging segment, the paper brand gKraft materialised the advantages of
differentiation and sustainability, resulting from the exceptional features of the globulus
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 10
eucalyptus fibre and the contribution of the Navigator solutions for the replacement of plastic.
The Company is committed to increasing the level of investment in this field in the coming
years, namely under the Recovery and Resilience Plan (RRP), with a clear emphasis on the
Agenda "From Fossil to Forest – Sustainable Packaging Products for Fossil Plastic Replacement".
In 2022, Navigator also laid the foundations of the P2X project to implement an industrial unit
to produce eSAFs, non-fossil fuels for the aviation sector, from green hydrogen and biogenic
CO
2
obtained from the energy recovery of waste and forest spoils and wood by-products.
Inpactus was also concluded, the largest ever investment in
Portugal in an R&D project in the forest-based bio economy.
Inpactus was also concluded, the largest ever investment in Portugal in an R&D project in the
forest-based bio economy, for a total of €14.6 million, to promote a whole new generation of
bioproducts, thus providing its contribution to decarbonisation and a more sustainable, circular
and competitive economy.
Innovation, and the industrialisation of knowledge in particular, is an integral element of The
Navigator Company's history and an unequivocal identity trait.
These investment and innovation dynamics are a clear sign of Navigator's confidence in the
future and its ability to implement its strategic vision.
Its robust financial position and unique talent pool enable us to face the coming years with the
ambition to further increasing our capacity to innovate and to invest in this Company's
development projects.
This investment, I am sure, should have a positive impact on society, in line with the goals of
Navigator, which stands for the creation of sustainable value, “leaving future generations a
better planet, through the use of sustainable natural, recyclable and biodegradable products
and solutions towards carbon sequestration, oxygen production, protection of biodiversity, soil
formation and the combat against climate change”.
The central concept of our 2030 Agenda – "Create Value with Responsibility" – represents this
clear principle of our performance, translating not only the value created by this company but
also the way it operates.
Navigator is an engine of the rural economy, in particular in the inner regions of the country;
valuing the forest, multiplying opportunities along the value chain and managing close to
106,000 ha of a fully certified forest; valuing its more than 7,300 suppliers, of which 73% are
Portuguese and is the 3rd largest exporter and the company generating the highest Added
Value in Portugal. A company with a good track record as regards assisting in the production of
scientific knowledge and innovation. And this, in light of the results now achieved and its
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 11
investment projects, generates opportunities to value also the talent of its more than 3,200
employees.
We shall continue to embrace the best we have and grow it. In light of the major challenges
currently facing humanity, companies represent an indispensable agent of change, through the
creation of a positive impact on society. I believe this impact is, and should increasingly be, the
measure of our relevance.
Innovation, and the industrialisation of knowledge in
particular, is an integral element of The Navigator Company's
history and an unequivocal identity trait.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 12
MESSAGE FROM THE CEO
António Redondo
Chief Executive Officer
The Navigator Company's achievements throughout 2022
clearly prove our staff's commitment, energy and capacity
to overcome difficulties. The best of the human factor,
in boldness and perseverance, in rigour and courage,
made a difference once again, and this is a clear reminder
that this is the trait that best defines our identity
as a Company.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 13
The Navigator Company's achievements throughout 2022 clearly prove our staff's commitment,
energy and capacity to overcome difficulties. The best of the human factor, in boldness and
perseverance, in rigour and courage, made a difference once again, and this is a clear reminder
that this is the trait that best defines our identity as a Company.
We stated in both our corporate mission and before society
that "it's the people, their quality of life and the future
of the planet that inspire and move us" and we follow this
commitment valuing what we have today, bearing in mind also
our contribution to a better and sustainable world.
The year 2022 was here to attest to the character of the entire company, which once again was
not deterred by adverse scenarios and sought the creation of lasting value.
We stated in both our corporate mission and before society that "it's the people, their quality of
life and the future of the planet that inspire and move us" and we follow this commitment
valuing what we have today, bearing in mind also our contribution to a better and sustainable
world.
Throughout 2022, we focused on our current business areas, but we also felt motivated to
move beyond the management of global uncertainty. We firmly boosted our most defining
projects for the future, reinforced the investment and valued the Company's talents.
In previous years' annual reports, I have made a point of highlighting the remarkable quality of
our staff. This year, I shall do it again and I would like to acknowledge the strength and
motivation of this great team, people who give their best over and over. I would, therefore, like
to thank all employees who wrote together the extraordinary chapter of 2022 in The Navigator
Company's history.
Agility is in our DNA
It was a period of constant oscillations, sometimes large, thus requiring considerable agility
from our teams.
The significant increase in production costs, along with the large increase in logistics costs and
a shortage of means of transportation of goods, along with the imbalances in supply and
demand witnessed throughout the year, were distressing factors in all our business areas.
Teams were able to respond promptly, thus enabling the Company to adjust the pricing policy
to international developments, improve the product mix and increase productivity across the
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 14
board. I would like to emphasise the increase in production volume of all our products, e.g.
growth of more than 3% in the pulp segment, 4% in the paper segment and 1% in tissue, and
more than 2% regarding finished products.
The paper segment, which accounted for 70% of turnover, witnessed the most abrupt changes
in market dynamics. Navigator has positioned itself effectively in the face of the overall price
increase and reached sales values around 55% higher than in 2021. I would also like to
emphasise that this positive price evolution contributed to the improvement of the product mix,
and Navigator reached a high level of sales of premium products and factory brands, clear
proof of the responsiveness of our teams and the value and reputation of our products and
brands.
In the tissue segment, we witnessed this year the launch and consolidation of several
innovative products for this sector as a result of multidisciplinary work that involved the
continuous collaboration between researchers of the RAIZ Institute and the operational teams
in the product development, production and marketing departments. The result was an
increase in the number of factory brands that stand out for their disruptive and technologically
advanced products - creation of 7 trademarks of proprietary technologies – and whose
acceptance is there in the sales increase of almost 9%. Our brands already represent around
28 % of finished product sales (in tons), compared to 26 % in 2021, a figure higher than the
industry average in the most relevant markets and which, according to our estimations, stands
at about 20%.
Navigator has positioned itself effectively in the face of
the overall price increase and reached sales values
around 55% higher than in 2021.
I would also like to highlight the positive signs from our Packaging segment, which in just two
years alone already accounts for 4% of the Company's revenue, and whose customer base
keeps growing, with the gKraft brand securing the preference as regards large exposure brands
in a wide range of sectors from fashion to food retail, e-commerce, industry or agriculture. In
2022, Navigator achieved €90 million sales, doubling the 2021 sales figure.
The €2,465 million turnover, above the two billion euro threshold for the first time at Navigator,
and which corresponded to an EBITDA of €736 million, is a clear sign of the strategic and
operational agility of our teams, a clear proof of the resilience of our business in the face of the
most demanding and unusual stress tests we have has to face in this fast-changing world.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 15
Looking beyond uncertainty
In addition to the good performance of its current business areas, the low level of indebtedness
gives the company the necessary strength to embrace growth and diversification strategies.
In 2022, we increased the investment value by more than 40 % to €112.5 million. Of these,
close to €39.1 million was allocated to projects classified as environmental, representing 35%
of the total.
Not only did we speed up the development of highly innovative products in the Tissue and
Packaging segments, but we also invested in strengthening Navigator's leadership in the
creation of a whole new generation of sustainable bioproducts based on the eucalyptus forest,
with a view to decarbonising the economy and changing the current paradigm based on fossil-
based raw materials.
Navigator laid this year also the foundations for a highly
disruptive project, with a view to creating an industrial
unit focused on the production of e-SAFs (e-Sustainable
Aviation Fuels), synthetic, carbon-neutral jet fuel.
We have reported this year also the results of the Inpactus project and highest investment ever
in the country in a forest-based bio-economy R&D project, leading up to 37 patents, 4 new
products, 8 potential new bioproducts or businesses already in the technical-economic
evaluation stage. The company was also particularly active and successful in the generation of
scientific knowledge and the establishment of a university-industry platform of excellence in a
major area for the national economy.
Navigator laid this year also the foundations for a highly disruptive project, with a view to
creating an industrial unit focused on the production of e-SAFs (e-Sustainable Aviation Fuels),
synthetic, carbon-neutral jet fuel, produced from green hydrogen and biogenic CO
2
obtained
from the energy recovery of waste and forest spoils and wood by-products, in the operation of
our integrated pulp and paper factories.
We are firmly committed to these paths, in alignment with our purpose of sustainable value
creation, within the framework of a circular forest-based bio economy. Navigator is poised to
boost the level of investment in the coming years, namely under the Recovery and Resilience
Plan (RRP), with emphasis on the From Fossil to Forest Agenda – "Sustainable packaging and
products to replace fossil plastic", and has already started a project to build a factory to
produce 100 million moulded cellulose parts, intended to replace plastic parts that protect food
and used in single-use packaging in points of sale. This unit shall operate on the company's
industrial site in Aveiro, and production is due to start in the first half of 2024.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 16
We develop an effort to value the Portuguese forest
and promote sustainable forest management through
initiatives relying on close engagement with thousands
of forest producers.
In this process, the robustness of the company's legacy areas is the pillar allowing us to
leverage current assets, transform pulp mills into biorefineries, and value the several
components of the wood to come up with new products and solutions. The strength of this
traditional production base is a prerequisite, given both the resources to allocate to investment
and our track record of experience, industrialisation of knowledge and - especially in the case of
The Navigator Company - innovation capacity. This Company has been generating materials,
products and energy from renewable biological resources.
However, for such a transformation to happen, we need to tackle the current shortage of raw
materials in Portugal. We need to improve the productivity of our forest, mindful of the fact
that well-managed forests not only provide more raw material but generate more positive
externalities enhanced by good management practices, such as carbon sequestration, oxygen
production, promotion of biodiversity, soil protection, regulation of torrential hydrological
regimes or the creation of landscape amenities.
The Navigator Company manages, in Portugal, close to 106,000 ha of forest, but its daily and
comprehensive work goes beyond these areas. We develop an effort to value the Portuguese
forest and promote sustainable forest management through initiatives relying on close
engagement with thousands of forest producers when it comes to knowledge transfer, technical
advice, training in forestry, certification, or safety of operations, among many others. We also
extended this proactive positioning within the scope of Biond, the paper industry association, in
programs such as Limpa and Aduba, which involved, in 2022 alone, 14,500 hectares of third-
party-owned forest. And we bet on R&D applied to forests, of which I would like to highlight the
systematic action of the RAIZ institute, or projects such as rePLANT, aimed at developing
innovative technological solutions to forest problems, and Transform, to produce alternative
fertilisers to replace synthetic fertilisers from a circular bio-economy perspective.
Valuing our best
The world in 2022 was anything but stable and predictable, and adding up to the difficulties felt
in 2020 and 2021, a new geopolitical instability of global reach took hold, along with economic
pressures that affected the activity of companies and impacted the lives of families.
In this context, The Navigator Company, following the good results achieved, reinforced the
investment in its staff, increasing by €31 million the funds allocated to human capital and was,
therefore, able to grant the highest performance premium ever, a new productivity premium to
employees, and to strengthen the rejuvenation program, under which more than 240 people
aged up to 35 years old, 186 of whom were 30 or younger, were invited to join the Company.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 17
Our work is committed to strengthening the skills involved, and in 2022, 96% of employees
attended around 151,000 hours of training classes. Our Learning Centre platform, of open
access and digital, offers more than 600 courses in many fields, from security to leadership,
sales or information systems, among others.
In 2022, promotions and career progressions covered more than 2,300 employees,
representing 71% of the Company's total.
The "Crescer" project, launched at the end of 2022, represents one of the biggest and most
complete initiatives in this particular field. This a wide-ranging and mobilising program aimed at
helping the organisation to focus around its Mission, in alignment with the commitments
undertaken before society and expressed in the 2030 Navigator's Agenda. In a fast-changing
world, this project is here to stimulate a sense of belonging, create new ways of working, re-
skill current leasers and prepare future leaders at Navigator.
The human and comprehensive dimension of Navigator, with more than 3,200 employees from
around 30 nationalities, is its core differentiating element and the reason beyond our
systematic investment in training and multiplication of opportunities to value talent.
Valuing is part of us. It inspires our mission, it's our raison d'être, and represents an essential
pillar of our responsible business strategy.
That's the path we chose to take. With people at the centre of everything.
Valuing is part of us. It inspires our mission,
it's our raison d'être, and represents an essential pillar
of our responsible business strategy.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 18
NAVIGATOR IN 2022
MAIN INDICATORS
€736M
€393M
€112.5M
EBITDA
Net Income
CapEx
29.9%
€463M
€250M
EBITDA/Sales
Free Cash Flow
Dividends Paid
0.52 times
34.1%
34.9%
Net Debt/EBITDA
ROE
ROCE
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 19
MAIN INDICATORS
VALUE GENERATED AND DISTRIBUTED
Volume de Negócios
1.424
1.627
2.536
2020 2021 2022
Revenue
B€
€185M
Employee salaries
€250M
Shareholder dividends
€1.934B
Supplier expenses
≈3%
Exports
of goods
1st
in National Added Value
1%
of GDP
3rd
Biggest
Exporter
€2.465B
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 20
Economic and financial indicators
Million euros
2018
2019
2020
2021
2022
Total Sales
1,691.6
1,687.9
1,385.4
1,595.9
2,464.6
EBITDA
(1)
455.2
372.1
285.5
354.7
736.4
Operating Profit (EBIT)
303.2
233.6
140.4
229.6
573.5
Financial Results
-22.5
-18.9
-14.7
-17.8
-57.0
Net Profit
225.1
168.3
109.2
171.4
392.5
Operating cash flow
(2)
377.2
306.8
254.3
296.6
555.4
Free cash flow
(3)
210.5
186.2
233.5
234.7
462.6
Investments
216.5
158.0
80.6
80.1
112.5
Net interest-bearing debt
(4)
683.0
715.3
680.0
594.8
382.2
Net assets
2,549.8
2,533.7
2,552.9
2,534.4
2,916.1
Liabilities
1,362.6
1,506.2
1,526.7
1,482.2
1,656.4
Equity
1,187.2
1,027.4
1,026.2
1,045.1
1,259.7
Gross debt
763.8
877.1
982.4
833.9
725.1
Cash
80.9
161.9
302.4
239.2
343.1
Own shares (vs market)
(5)
3.1
22.7
15.8
0.0
0.0
No. shares held on 31/12 (million)
0.9
6.3
6.3
0.0
0.0
EBITDA/Sales (%)
26.9%
22.0%
20.6%
22.2%
29.9%
ROS (%)
13.3%
10.0%
7.9%
10.7%
23.3%
(1) Operating profit + depreciation + provisions
(2) Net profit + depreciation + provisions
(3) FCF for the years 2014-2019, with treasury shares valued at acquisition price
(4) Gross interest-bearing debt - cash
(5) In 2021, 6.3 million treasury shares were extinguished due to capital reduction, followed by a capital increase through incorporation of reserves
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 21
Profile
The Navigator Company is an integrated producer of forest, pulp, paper, tissue, sustainable
packaging solutions, and bioenergy, whose business is founded on state-of-the-art factories on
a worldwide scale, with cutting-edge technology. It is recognised as a benchmark in quality in
its sector throughout the world.
People, their quality of life and the planet's future are what inspire and guide The Navigator
Company. The company is committed to creating sustainable value for its shareholders and for
society at large, making a better planet to hand down to future generations through sustainable
products and solutions that are natural, recyclable and biodegradable, and that contribute
towards carbon sequestration, oxygen production, the protection of biodiversity, soil formation,
and the fight against climate change.
The Navigator Company produces pulp and paper using forests which are planted exclusively
for this purpose. Each year, Navigator nurseries give life to more than 12 million trees. These
nurseries – among the largest in Europe – produce more than 130 different species of plants
and shrubs. Many of them, although not economically viable, are financed by the company to
preserve biodiversity and ensure the continuity of these species.
The forests under The Navigator Company's management in Portugal represent a carbon stock,
excluding carbon in the soil, equivalent to 6.1 million tons of CO
2
. This stock has remained
stable thanks to the sustainable management model followed by the company.
The Group’s forestry business is vertically integrated, with its own Forestry Research Institute.
The Group is responsible for planting a vast forested area in mainland Portugal (1.2% of the
country’s land area), 100% certified by FSC
®
1
and PEFC
2
systems. The Company has a
production capacity of 1.6 million tonnes of paper, 1.6 million tonnes of pulp, 130,000 tonnes
of tissue per year, and 375.5 MW of installed capacity for energy consumption. In 2022, 66%
of the energy produced by Navigator at its four industrial complexes was obtained from
renewable sources, including biomass, making it the leading operator in this sector, producing
approximately 34% of all energy derived from this ecological non-fossil fuel in Portugal.
In November 2021, the Navigator Company launched its latest line of packaging products,
through the new gKraft brand, to help accelerate the transition from plastic to the use of
natural, sustainable, recyclable and biodegradable fibres, once again demonstrating its
commitment to sustainability and preserving the environment.
The Company is the third largest exporter in Portugal and the largest generator of National
Added Value, representing approximately 1% of national GDP, around 3% of national exported
goods, and more than thirty thousand direct, indirect, and generated jobs. In 2022, The
Navigator Company had a turnover of €2.465 billion. More than 80% of the Group's products
are sold outside Portugal and are shipped to approximately 130 countries.
Navigator became the first Portuguese company, and one of the first in the world, to make the
ambitious commitment to move towards carbon neutrality at its industrial facilities 15 years
1
FSC – Forest Stewardship Council
®
(Licence no. FSC
®
– C010852)
2
PEFC – Programme for the Endorsement of Forest Certification schemes (PEFC Licence/13-23-001)
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 22
earlier than planned, and it has already invested more than 200 million euros to this end. Part
of this commitment has already been implemented with the construction of a Biomass Boiler in
Figueira da Foz and another part has been applied for as part of the Decarbonisation in
Industry component of the Recovery and Resilience Plan, which will enable the targets initially
proposed in the Decarbonisation Roadmap for the end of 2029 to be achieved by the end of
2026.
This commitment is the culmination of a responsible business management strategy which was
distinguished by the CDP (formerly Carbon Disclosure Project, now Disclosure Insight Action)
with the maximum "A" rating for global leadership in combating climate change in 2022. The
Navigator Company was recognised for its efforts in reducing emissions, reducing climate risks,
and developing a low-carbon economy. The Company's forest management operations were
also praised, with CDP Forest awarding it an "A-" rating, which places it as a leader in this area
as well. CDP Forest evaluates the robustness of the systems that the Company uses to trace
and monitor the origin of its raw materials, based on the certification of the forest management
model of the forests under its management and its demanding wood procurement policies.
At the end of 2022, The Navigator Company received approval for its greenhouse gas emission
reduction targets from the Science Based Targets initiative (SBTi). The Company has
committed to reducing greenhouse gas emissions in scopes 1 and 2 (relating to emissions
released into the atmosphere as a direct result of its operations and indirect emissions from the
electricity acquired for its use) by 63% by 2035, compared to 2020. Scope 3 emissions, which
occur in the value chain, will be reduced by 37.5%. These targets are aligned with
internationally recognised science-based criteria and methodologies as part of the global
climate agenda, thereby affirming Navigator's role as a leader in sustainability.
In 2023, the Company was again classified as a low-risk company for investors, and recognised
as an “ESG Industry Top Rated Company” in Sustainalytics' ESG Risk Rating for the year 2022.
Growth with a purpose
In a year of adverse market conditions – marked by uncertainty and insecurity from the
Russian invasion of Ukraine, with direct impacts on energy costs, logistics and raw materials –
Navigator's business model, sound knowledge and experienced teams were proof positive of its
resilience and flexibility, allowing it to achieve record results.
Thanks to the soundness and merit of its strategy, Navigator grew in 2022, although not alone:
its investments, research projects and products had a direct or indirect positive impact on
society and on the planet.
Navigator grew, and helped others to grow, in a deliberate and consequential manner – with a
purpose, making itself part of the solution to our great challenges that lie ahead. It did so by
investing in a forest-based circular bioeconomy, helping to reduce dependence on fossil
resources, on the path towards decarbonisation; by creating innovative products and solutions
in the areas of paper, pulp and energy, and increasingly in the areas of biofuels, biomaterials
and biochemicals; and by focusing on people – whether by investing in employee well-being,
attracting talent for the professional challenges of the future, or sharing its knowledge and
resources with communities.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 23
On the path towards long-lasting sustainability
The commitment to sustainability, assumed in a more ambitious and comprehensive manner in
the 2030 Responsible Management Agenda, was strengthened in 2022 with a review of this
agenda's material topics, so as to ensure that the Company's efforts remain focused on the
areas where it can have a greater impact.
Navigator takes on a proactive role in the low-carbon economy by sustainably managing its
forests, investing in renewable energy sources and focusing on a forest-based bioeconomy
through bioproducts capable of replacing various items of fossil origin.
Of particular note in 2022 was the completion of the project "Inpactus – Innovative Products
and Technologies Based on the Eucalyptus", the nation's largest R&D programme in the forest-
based bioeconomy which, after almost five years of research, development and innovation, has
resulted in 37 new patents, four new industrialised products, eight technical/economic viability
studies for potential new business in bioproducts, 66 prototypes, 114 proofs-of-concept and
147 scientific publications. Also of note was the start of "From Fossil to Forest – Sustainably
Packaged Products to replace Fossil Plastic", funded by the Recovery and Resilience Plan (PRR),
whose purpose is to develop new packaging materials based on cellulose fibres and other
sustainable bioproducts as an alternative to single-use plastic.
In 2022, in an initiative combining innovation with sustainability, The Navigator Company
entered into an agreement in principle with German company P2X Europe to create a joint
venture – P2X Portugal – whose goal is to create a cutting-edge industrial unit to produce non-
fossil fuels for the aviation industry.
Sales dynamics
and positive pricing trends
The acute shortage in the European paper supply, especially in the first half of the year,
coupled with a major rise in production and logistics costs, increased the prices of paper to
record-breaking levels. The average sale price for the year was 55% higher compared to 2021.
With the lower availability of UWF paper during the year, in particular more economical, lower
quality Asian and Russian products, several markets prioritised Navigator's quality, with a
higher appreciation for premium products in the product mix.
This shortage could also be seen in the market's pulp supply, making 2022 a record year in
terms of price hikes on a worldwide scale. In a year also marked by disruptions to supply
chains, Navigator fulfilled its supply agreements, and was even able to improve its performance
in this area.
Of particular note was the annual production of the Figueira da Foz pulp mill which – thanks to
investments in recent years, various operational improvements and a constant focus on yield –
reached a historic record of 603.3 ktAD.
After being launched in November 2021, the paper brand for packaging "gKraft" arrived in full
force on the market, doubling sales. This brand continues to base its growth strategy on
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 24
products of higher added value, gradually asserting its arguments of differentiation and
sustainability, which are largely rooted in raw materials (virgin fibre of Eucalyptus globulus).
Despite being available for sale worldwide, the gKraft brand is more focused on markets of
geographic proximity, mainly the Iberian, Italian and French markets.
Innovating in tissue
There were major price increases in the global tissue market, in a setting marked by
disruptions and instability in value chains, together with geopolitical tensions in the case of
Europe.
Despite these challenging circumstances, highly proactive sales management resulted in sales
growth of 36% overall and 38% in finished product compared to 2021. The Company was
especially successful in selling its brands, which were up nearly 9% on the whole in their
various channels and markets.
Our tissue business focused on innovation, with products of a disruptive nature, such as Amoos
Air Sense toilet tissue, with fragrant micro-pearls whose contents are only released when
touched for a longer-lasting aroma, and Amoos Calorie Control kitchen rolls, with micro-cells to
make them especially effective at absorbing liquids and fats from fried foods.
As a result of this constant focus on innovation, the resulting new products nearly tripled their
sales compared to 2021.
Responsible forest management
In 2022, Navigator managed a total of 105,733 hectares of forest in Portugal
3
, having planted
more than 3,800 hectares – the largest area in the past 22 years. This area is 100% certified,
as reconfirmed last year through an audit of the Company's management system.
The Company continued to promote third-party forest management certification, increasing the
percentage of certified national wood it purchased (since the wood it produces is 100%
certified) from 63% (in 2021) to 65%.
Proximity initiatives with forestry producers remained one of the main strategic focuses, based
on know-how transfer, technical advising, training on issues involving forestry and operational
safety, among others. Direct investments in the forestry value chain of mainland Portugal's 18
districts totalled €28.9 million.
In 2022, assets under the Company's management included 12.3% areas of conservation
interest (11.8% in 2021), with growth encompassing an additional 168 hectares classified as
protected habitat by the Natura 2000 Network.
3
About 106,800 hectares, including Galicia (Spain)
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 25
The annual biodiversity monitoring plan implemented at managed properties identified new
species of fauna and flora to be added to Navigator's protected list: there are now around 900
species and subspecies of flora, and 252 species of fauna.
Mozambique continues wood exports
In Mozambique, where The Navigator Company managed 14,000 hectares of forest through
Portucel Moçambique, eucalyptus wood harvesting and export operations continued in 2022.
Over the course of the year, the Company planted around 400 new hectares of eucalyptus
forest and replanted around 270 hectares.
The Social Development Programme expanded its activities, particularly in the areas of health,
education, access to potable water and environmental awareness. There was a continued focus
on both food safety and income generation.
Focus on young talent
In 2022, The Navigator Company and the Employees' Representative Organisations signed an
unprecedented two-year agreement.
A Productivity Bonus was also created with the aim of increasing the variable components of
pay, putting the focus on productivity, improving disposable income and reducing absenteeism.
With regard to attracting and managing talent, investments were increased in the younger age
groups. The employer branding plan was reformulated to prioritise more direct and
personalised contact, resulting in the creation of 50 new internships. The Trainee Programme, a
two-year development programme to welcome employees who have distinguished themselves
during their internship, was also launched.
A concern with supporting the early years of young executives' careers led to the creation of
the Future Leaders Forum, aimed at employees under the age of 33 who have been at the
company for at least one year, which involved 55 people and contributes to a closer and more
participatory company culture.
The training initiatives done in 2022 involved 96% of Navigator's internal employees, from all
geographic locations.
Updating of 2030 Agenda
Against a backdrop marked by challenges on a global scale, and in an effort to meet the
challenges and opportunities faced by The Navigator Company's business, the Company's 2030
Responsible Management Agenda was launched in 2020, aimed at increasing the Company's
positive contribution to the creation of value and sustainable growth in a changing world.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 26
The Agenda was built on a process of analysing materiality, involving a listening exercise with
more than 540 internal and external stakeholders to jointly identify the topics most relevant to
Navigator's future.
In the last quarter of 2022, in line with the Global Reporting Initiative (GRI) and the European
Commission's Corporate Sustainability Reporting Directive (in force since 5 January 2023),
Navigator carried out a review of material topics following the principles of “double materiality”,
with a view to ensuring that the Company's efforts remain geared towards the areas where it
can have the highest impact.
Two complementary analyses were thus performed – one dedicated to the impacts of
Navigator's activities on the exterior (“impact materiality”) and another to the risks and
opportunities arising from the external environment that could affect value generation at
Navigator (“financial materiality”).
This exercise was based on a listening exercise involving more than 50 people, from within and
outside of the Company, specialising in their areas of business and activities, along with the
Executive Committee and an independent team of sustainability experts. The result was an
updating of the materiality matrix, comprising 15 material topics incorporated into Navigator's
2030 Agenda.
Therefore, according to the degree of strategic priority and relevance of the topics examined,
there was a reconfiguration of Navigator's Responsible Business Agenda which, in line with its
corporate purpose, has two strategic axes of action: For Society (People) and for Climate and
Nature (Planet).
For further details about the 2030 Agenda and The Navigator Company's Responsible Business
Management strategy on the whole, please see our 2022 Sustainability Report.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 27
A responsible business
For Society
For Climate and Nature
Strategic topics
Talent management and development
of human capital
Relationship with communities
Climate change and CO
2
fixation
Sustainable forest management
Water management
Energy and raw material management
Relevant topics
Bioproducts
Supplier chain management
Sustainable value creation
Responsible governance
Innovation, technology and R&D
Customer management
Health, safety and well-being
Conservation of biodiversity
Circular economy
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 28
2. BUSINESS PERFORMANCE
Summary of main indicators
2022
2021
Change
(7)
2022/2021
Amounts in million euros
Total Sales
2,464.6
1,595.9
54.4%
EBITDA
(1)
736.4
354.7
107.6%
Operating Profit (EBIT)
573.5
229.6
149.8%
Financial Results
-57.0
-17.8
-220.5%
Net Profit
392.5
171.4
129.0%
Operating cash flow
555.4
296.6
258.9
Free cash flow
(2)
462.6
234.7
227.9
Investments
112.5
80.1
32.4
Net interest-bearing debt
(3)
382.2
594.8
-212.6
EBITDA/Sales
29.9%
22.2%
7.6 pp
ROS
23.3%
14.4%
8.9 pp
ROE
(4)
34.1%
16.4%
17.7 pp
ROCE
(5)
34.9%
13.7%
21.2 pp
Financial Autonomy
43.2%
41.4%
1.8 pp
Net Interest-Bearing Debt/EBITDA
(6) (7)
0.52
1.68
-1.16
(1) Operating profit + depreciation + provisions;
(2) Change in net debt + dividends + purchase of own shares
(3) Interest-bearing liabilities – cash and cash equivalents (does not include the effect of IFRS 16)
(4) ROE= Annualised Net Profit / Average Equity (N+(N-1))/2
(5) ROCE = Annualised operating profit / Average capital employed (N+(N-1))/2
(6) (Earning liabilities – cash) / EBITDA corresponding to the last 12 months; IFRS 16 Impact: Net Debt / EBITDA 2021 of 1.83; Net Debt / EBITDA 2020 of 2.58;
(7) Variation of unrounded values
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 29
Throughout 2022, Europe's fast-changing macroeconomic and geopolitical environment due to
the Russian invasion of Ukraine caused an overall increase in uncertainty and insecurity. Due to
persistent inflation since the second half of 2021, the cost of energy, logistics and raw materials
–already at record highs at the start of the year – rose substantially.
The sector experienced unprecedented times, with a number of different factors contributing
towards a shortage in the European paper supply in the first half of 2022. This situation of
undersupply, coupled with a sharp rise in production and logistics costs, contributed towards
record highs in producers' order portfolios and delivery times, together with widespread price
increases in all graph papers.
In the second half of the year, fears of an economic slowdown led to a sudden drop in apparent
demand, at a time when stocks were quite high throughout the entire supply chain, and when
logistics chains were relatively quickly on their way back to normal. The ability to lower this
accumulated stock will take more or less time according to developments in demand, especially
in Asia, the speed at which supply and logistics chains return to normal, and the intensity of
any economic slowdown.
The differentiating characteristics of Navigator as an integrated forestry, pulp, paper, tissue,
packaging and energy producer, with a flexible business model and sound market knowledge
rooted in experienced teams, have earned confidence in the Group's resilience and positive
performance under adverse market circumstances.
In 2022, Navigator's turnover was €2.465 billion, with paper sales accounting for around 74%
of turnover (vs 72%), pulp sales 8% (vs 11%), tissue sales 8% (vs 9%) and energy sales 10%
(vs 8%). The international pricing dynamics of pulp, paper, packaging and tissue, leveraged by
an enriched product mix and a focus on yield, coupled with developments in the sale prices of
renewable energy, were the driving factors of the year's positive results.
2.1. Bleached eucalyptus kraft pulp
(BEKP)
Pulp market in 2022, with record highs
The reference index of short-fibre pulp (hardwood) in Europe – PIX BHKP in dollars – hit record
highs in 2022 (1,380 USD/tonne), where it remained from early August until the end of the
year (21 consecutive weeks), up 21% since the year began. In turn, the average price in 2022
was 26% higher than in 2021.
Pricing trends were driven by the severe imbalance between supply and demand. Different
factors contributed towards this imbalance, including: i) the opportune moment of global
demand for short-fibre eucalyptus, which grew +7.8% in 2022; ii) the delayed launch of new
pulp investments in LatAm (which did not happen until December 2022); iii) the strike in
northern Europe, which persisted during the first four months of the year, eliminating more
30.2%
Sales growth
in turnover in Europe
23.2%
Sales growth in turnover
globally
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 30
than half a million tonnes of pulp from the market; iv) persisting logistical constraints, which
penalised the available supply of pulp in the market.
In addition, particularly in its first half, 2022 was marked by unplanned shutdowns due to
environmental issues (droughts), fires and logistical problems (road and maritime) in Europe,
Indonesia and Canada, which also impacted the availability of pulp.
Global demand for pulp in 2022 grew by 1.3%, with long fibre down 1.8% and short fibre up
2.7%. Also of note, as previously mentioned, was the positive performance of short-fibre
eucalyptus, which was up 7.8% in 2022.
Operational data
BEKP pulp (ktAD)
2018
2019
2020
2021
2022
Aveiro
357.5
350.2
323.9
347.4
353.9
Figueira da Foz
575.1
585.5
572.7
582.9
603.3
Setúbal
519.1
490.2
467.5
529.7
550.7
Total Pulp Output
1,452
1,426
1,364
1,460
1,508.0
Total Pulp Sales
253.4
313.8
394.1
292.2
255.3
FOEX - BHKP EUR/t
880
762
596
867
1,232
FOEX - BHKP USD/t
1,038
855
680
1,023
1,291
2.2. Paper
Focus on premium products
and proprietary brands
On a global scale, the printing and writing paper industry experienced a unique moment in
2022, although with a clear distinction between the first and second halves of the year.
Fears of a sharp decrease in post-pandemic demand for UWF paper accelerated decisions to
close and reconvert factories in Europe and the USA which, tied to logistical difficulties and
higher energy costs, significantly reduced supply, particularly in these regions.
The major rise in costs, especially for energy, which hit record highs since the invasion of
Ukraine by Russia, forced some companies (mainly unintegrated ones) to temporarily close or
cut down their operations, being unable to pass on those increases in their prices.
As a result, in the first half of 2022, there was a major shortage in Europe's paper supply,
which was not exclusive to UWF paper. The majority of graph papers, subject to significant
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 31
capacity reductions in the past three years, and as a result of the strike referred to above, also
experienced a situation of undersupply. This imbalance, coupled with the sharp rise in
production costs (affecting fibre, chemicals, energy, packaging materials) and logistics costs
(through higher costs and a shortage of resources) contributed towards a constant, widespread
price increase throughout the year for all graph paper, together with record levels in the order
portfolio of producers and delivery times.
The acute supply shortage described above resulted in an abnormal order volume in the first
half of the year, with customers reacting to fears of a prolonged lack of paper availability. Fears
of an economic slowdown, however, which escalated primarily in the middle of the year, led to
a decrease in demand, at a time when stocks were high and logistics chains were returning
relatively quickly to normal. The ability to lower this accumulated stock in the pipeline will take
more or less time according to the speed at which supply and logistics chains return to normal,
the intensity of any economic slowdown that may occur, and developments in demand in Asia
for the new graph paper capacities constructed in recent years.
Demand for UWF paper grew 0.3%, while coated papers were down 2.5%. Conversely, paper
made with fibre obtained by mechanical means saw a sharp decline of 9.9%. As such, in 2022,
global demand for printing and writing paper fell 2.3%, with UWF continuing to show
remarkable resiliency.
In Europe, the apparent demand for UWF paper in the last quarter was down 12% year-over-
year, resulting in accumulated demand from 2022 which was 6.7% below the previous year.
This downturn in apparent demand results from the calculation model (based on deliveries from
producers), reflecting a latent demand that has not been met.
In fact, Europe saw a severe reduction in capacity (-10% YoY, primarily in the wake of a factory
closing in Scandinavia at the end of the third quarter of 2021, and the conversion to packaging
of a factory in France in the first quarter of this year), coupled with the strike in northern
Europe, which persisted over the first 16 weeks of 2022. Furthermore, there was the restriction
on the volume of importing, which saw levels below normal, as a result of the well-known
logistical difficulties. Therefore, if we consider the reduction in capacity that occurred, and the
resulting declines in production and deliveries, we can estimate that – without these factors –
the decline in apparent demand for UWF paper in Europe would have been much lower, and in
line with the average decrease in consumption in recent years.
Conversely, the United States saw impressive growth of 5.3% in the demand for UWF paper in
2022, while in the world's remaining regions this growth stood at 0.7%.
Navigator's UWF sales totalled 1.5 million tonnes, an increase of 1.7% compared to 2021,
demonstrating the Company's significant efforts to meet the needs of its customers in an
environment of limited available supply, reductions to capacity and serious logistical
restrictions, particularly in the first half of the year. Sales were driven by the widespread
increase in prices on an international scale, which Navigator led or kept pace with, resulting in
year-over-year growth of 57%.
The positive pricing trend was largely leveraged by the enriched product mix, with Navigator
achieving record sales in premium and factory-brand products.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 32
Improved product mix
Given the lower availability of paper during the year (especially more economical, lower quality
Asian and Russian products), several markets prioritised Navigator's quality. In the United
States – where the seven-member team is being expanded and renovated with the hiring of
two new salespersons in 2022 – there was also a change in the product mix, with a higher
focus on premium products, which grew 24% to account for 68% of total sales, and a 16%
increase in proprietary brands, accounting for 63% of the operation.
The protectionist laws in the United States, which prohibit the importing of paper from several
markets, led to four major price hikes over the course of 2022, resulting in growth of 13% in
Navigator's sales, with demand exceeding its capacity to deliver. Although the Company's
market share in this country is no more than 2%, its focus has been on products of higher
quality: in the premium cutsize segment, Navigator's share is up to nearly 10%, while in offset
premium it ranges from 6 to 8%. Given the circumstances, as would be expected, 2022 was a
year in which premium sales reached their highest levels in the United States, a region that
incorporated the most premium products into its sales mix.
In the rest of the world, the sales volume was down around 26% year-over-year in 2022,
having been channelled to Europe to win market share. This decrease required better
management of volumes, giving priority to the countries where the Company's presence was
already strong, such as Mediterranean countries, where volumes held steady, with cuts in
markets more distant from Europe. It also allowed greater selectivity in terms of which
customers and orders to accept. As a result, the product mix improved here as well: 64% of
sales were premium (with an increase of 30% in the sale of Navigator cutsize), and 93% of the
cutsize and folio sold were proprietary brands, a historic record in markets outside of Europe
and North America. Despite the reduction in volume, sales grew 25%, hitting a record high.
The team also grew, with one more sales manager in Türkiye and another headquartered in
South Africa to manage the business in the continent's southern countries.
Operational data
Paper (kton.)
2018
2019
2020
2021
2022
Figueira da Foz
744
719
649
729
733
Setúbal
791
721
646
731
785
Total Paper Output
1,535
1,441
1,295
1,460
1,518
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 33
Sales developments in tonnes per segment and product mix
4
Format
% of each
segment
in 2022
Change
vs 2021
Cutsize
51%
5%
Folio
23%
4%
Reels
27%
-13%
Total
100%
-1%
Quality
% of each
segment
in 2022
Change
vs 2021
Premium
66%
30%
Standard
33%
-23%
Economy
2%
-79%
Total
100%
-1%
Turnover developments by segment and product mix
5
Format
Change
vs 2021
Cutsize
55%
Folio
63%
Reels
47%
Total
55%
Quality
Change
vs 2021
Premium
96%
Standard
22%
Economy
-71%
Total
55%
4
Data related to UWF paper
5
Data related to UWF paper
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 34
Pricing developments by format and quality
6
Format
Change
vs 2021
Cutsize
49%
Folio
57%
Reels
69%
Average increase
56%
6
Data related to UWF paper
Quality
Change
vs 2021
Premium
51%
Standard
59%
Economy
37%
Average increase
56%
EUA
10%
Resto do Mundo
26%
UWF paper sales by region
(volume in tonnes)
Europa
61%
EUA
13%
Resto do Mundo
26%
UWF paper sales by region
(turnover)
Rest of the world
Rest of the world
USA
USA
Europe
Europe
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 35
A new sub-brand: Navigator Professional
2022 saw the consolidation of new UWF product ranges, with specific applications, brought together under a sub-brand created
last year called Navigator Professional. It includes reels of Navigator Premium Writing notebook paper, designed specifically for
optimum writing performance – with more retention capacity, it stops the pen pressing through and ink from bleeding through
the page; Premium Books paper for books, with a natural tone to facilitate reading; Premium Envelopes paper, which represents
an opportunity, given the ever-decreasing number of producers in this segment; and Premium Inkjet paper, specifically designed
for high-speed inkjet printing in the graphic world.
Discovery: webinar on sustainability and paper
In the wake of the more sustainable repositioning of the Discovery brand (available exclusively in 70 g/m2 and 75 g/m
2
, using
fewer resources and generating less waste) achieved in 2021, Navigator held a webinar entitled “Discover Forests, Sustainability
and Paper” in February last year. This event, which underscored the advantages of recyclable and biodegradable products
originating from certified renewable forests, had 362 enrolled members and was followed online by 281 people. [See
https://www.youtube.com/watch?v=AqK5lizuoNs]
Pioneer continues to inspire hope
In keeping with Navigator's commitment to positively impact society and people, the Pioneer brand continued to support the fight
against breast cancer in 2022, through a partnership with the iMM-Laço Hub, and held another edition of the Pioneer Inspire Hope
initiative. During Breast Cancer Prevention Month in October, 1,300 Pioneer paper flowers were handed out to researchers from
the iMM-Laço Hub, Navigator employees and cancer patients and their family members at Santa Maria Hospital. Since 2005,
Pioneer has invested €480,000 to support this research. [See https://www.youtube.com/watch?v=Mb2gKXScHQA]
2.3. Packaging
From Fossil to Forest – focus on sustainability
and innovation through packaging
The development of the new Packaging segment continues to show positive signs thanks to its
growing customer base, the recognised quality of our products and, as a result, of the gKraft
brand, serving high-profile brands in a wide range of sectors including fashion, food retail, e-
commerce, industry and agriculture.
However, the Packaging segment has proven to be more sensitive to the market climate, given
that the sudden, sharp downturn in demand ended up impacting this sector the most,
particularly so in the last quarter of 2022.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 36
In 2022, despite the negative macroeconomic backdrop, Navigator's sales exceeded €90
million, doubling its 2021 sales in the packaging sector, namely for the industries of
manufacturing, paper bags, flexible packaging and boxes for food products.
The gKraft brand's strategy continues to be based on growth in products with higher added
value, gradually asserting its propositions of differentiation and sustainability, largely founded
on the quality of raw materials (especially from Eucalyptus globulus), which boasts highly
compelling unique features allowing lower fibre consumption compared to long fibre, as well as
distinct technical benefits, in particular its printing quality and surface characteristics.
Food packaging shows high growth potential, considering the mounting awareness and global
action to replace plastic with paper, and because virgin fibre is well-suited to food packaging. In
these products, for reasons of food safety and hygiene, recycled fibre is not suitable or
prioritized, which offers major opportunities for growth.
Several developments are currently underway that may, in the short term, open the doors to
other segments of high added value.
In the wake of the strategy laid out for the area of Packaging, Navigator began a project for the
construction of a factory to produce moulded cellulose parts, for the purpose of replacing plastic
parts that protect food used in packaging at sales outlets, or used on a single-use basis. The
factory will be located at the Aveiro industrial site and is scheduled to start production in the
first quarter of 2024. The factory will have an initial capacity of 100 million parts, with the
option to increase capacity in subsequent years. One major challenge associated with this
project is the development of biodegradable barrier properties to handle the functions of food
protection and appropriate insulation from their liquids and fats.
Percentage of gKraft sales by segment (turnover)
+50%
New gKraft
customers in 2022
+119%
Sales volume
compared to 2021
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 37
The sustainability of paper packaging
Navigator organised the webinar entitled “gKraft – From Fossil to Forest. A Game Changer in Packaging Solutions”, held on 24
November, to discuss the main aspects associated with sustainable packaging, in particular the essential role of cellulose fibres
in the urgent and much needed transition away from fossil raw materials towards new solutions. Attendees included the
certification entity PEFC, the individuals in charge of sustainability at Navigator and one representative from Two Sides, a
European entity that brings together companies from the supply chain of the paper printing industry. The initiative had 244
enrolments, and was watched live by 141 people – a success, given that it involved a new brand and a niche product.
[See https://gkraft-paper.com/webinar/webinar.mp4]
2.4. Tissue
Tissue business maintains its positive
performance and focus on innovation
2022 was marked by disruptions and instability in value chains, together with geopolitical
tensions in the case of Europe, with a particularly high impact on trends in energy costs and
significant growth in pricing levels.
Despite these challenging circumstances, management of production capacities, logistical
services and the resulting price increases was achieved with customers in a fluid and consistent
manner.
Navigator's sales volume in Tissue was 102,000 tonnes, down 4% compared to 2021, while the
sales volume of finished product (tonnes) was up around 2% over 2021. Sales were driven by
higher prices, growing 36% compared to 2021 (38% in finished product).
Sales growth was primarily due to the At Home channel, which was up 5%, driven by attracting
new customers and strengthening the position in the pre-existing base.
The overall customer base remained quite diversified – around 600 customers with active
purchases in 2022 – thereby ensuring sustainable business diversification.
The Company was particularly successful in the sales growth and distribution of its factory
brands, taking steps forward in conveying its value proposition in terms of quality,
sustainability and innovation. As a result, the sales of Navigator brands grew almost 9% in all
of its various channels and markets, with a total of around 28% in finished product sales
(tonnes) in 2022 compared to 26% in 2021, higher than the industry's average in major
markets, which is 20%-25%.
In the structural plan, efforts were ramped up to reduce operating complexity, focusing on a
less extensive and complex product portfolio which, over time, will optimise production and
service levels.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 38
From the standpoint of production capacity, equipment was acquired to streamline and boost
production, and to improve the quality of products delivered to customers, namely in the
napkins category.
Operational data
Tissue (kton.)
2018
2019
2020
2021
2022
Reel output
71.7
102.3
112.7
111.1
112.2
Finished Product Output
66.0
72.8
79.5
82.0
83.7
Reel Sales
1.9
21.1
25.9
24.5
18.7
Finished Product Sales
61.2
74.5
80.1
80.9
82.6
Total Tissue Sales
63.1
95.7
106.0
105.4
101.5
Innovation that adds value to tissue
Innovation at The Navigator Company has been supported and enhanced by working closely with teams at RAIZ – Forest and Paper
Research Institute. Ongoing collaboration between the institute and teams involved in product development,
industrial/manufacturing processes and company marketing have leveraged a pipeline of innovation that extends into the future
and is part of the sustainable competitive advantages of Navigator's value proposition for the tissue business.
Amoos Airsense receives “2023 Five-Star” product distinction
The first range of toilet tissue with a long-lasting fragrance was the winner in the “Toilet Tissue” category of the “2023 Five-Star”
award, given based on surveying a sample group of consumers from the Portuguese market. This new product,
dermatologically tested for sensitive skin, includes small micro-spheres of perfume on its surface, which are only activated by touch
when used, guaranteeing a minimum 24 days of scent.
Fostering a healthier life
In late 2022, Navigator launched a three-ply kitchen roll with an embedded micro-honeycomb structure, thereby ensuring high
capacity and fast absorption of liquids and, in particular, fats. Ideal for absorbing fats from fried foods, the technology employed in
this household kitchen roll has allowed the Company to align the concept with trends encouraging healthier lifestyles, something to
which consumers are paying more and more attention.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 39
2.5. Energy
Sales up over 2021
2022 was marked by an energy crisis in Europe and, as a result, higher energy costs. In this
context, electricity produced by co-generation plants was sold on a market basis. In late 2021,
after the natural gas combined-cycle power plant of the Setúbal industrial unit began selling
electricity on a market basis, renewable co-generation began to do so as well in 2022, following
the publication of Decree Law no. 119-A/2021 of 22 December, specifically Article 35 -
Exceptional regime applicable to co-generation. Leveraging the higher market price for
electricity, which averaged €167.9/MWh in 2022 for the Portugal area of the Iberian Electricity
Market (MIBEL), sales totalled €258.5 million.
The Group's net electricity production totalled 1,745 GWh in 2022, in line with figures from the
previous year. Renewable sources continued to have a significant weight on total net energy
production, reaching 1,150 GWh, 66% of the total produced by the Group in 2022.
With 7 MWp of installed capacity associated with the five solar photovoltaic facilities operating
at the industrial complexes of Figueira da Foz and Setúbal, at the RAIZ Institute in Aveiro and
at Herdade de Espirra, Navigator continued to develop other solar photovoltaic energy projects
in 2022 which, in the future, will add around 25 MW of installed capacity for self-consumption.
The new photovoltaic facilities will be located in the industrial complexes of Aveiro, Figueira da
Foz and Vila Velha de Ródão, which will more than quadruple the current installed capacity.
As a result of the risk management strategy, two electricity supply contracts were signed on a
PPA (Power Purchase Agreement) basis. These long-term contracts will allow the company to
benefit from substantially more competitive terms and conditions vis-à-vis current market
prices, giving it more protection against long-term market volatility.
Of particular note in 2022 was Navigator's acquisition of the status of "intensive electricity
consumer" at all of its industrial units. This rating gives the Company's industrial units a
potential discount on the overall tariff for system use and exemption from applicable proximity
criteria between production units for renewable self-consumption and the location of the
consumption facility.
In Aveiro, the tissue unit received certification in ISO 50001- Energy Management Systems, a
standard in which Navigator's remaining units have already been certified, whose underlying
purpose is to improve the company's energy performance.
The higher price of natural gas over the year, and ensuing rise in the value of acquisitions on
the part of the Company, was minimised by a change to the lime kilns, which began operating
on fuel. This option had an impact on CO
2
emissions under scope 1, which were up 2.2%
compared to 2021.
Another key milestone in 2022 was the fact that The Navigator Company began offering the
Regulation Reserve Band service. This is a service provided to the operator of the national
power system by large electricity consumers, who are willing to reduce consumption if the
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 40
national network is affected by some sort of anomaly. This mechanism, of a competitive nature,
resulted in revenues of approximately €7.3 million in 2022.
2.6. Financial performance
Sales dynamics and positive
pricing trends offset surging costs
and result in an EBITDA of €736 million
In 2022, production costs increased dramatically, hit primarily by the higher cost of wood, due
to the major price hike at the factory door for domestic wood, the exchange rate, the supply
mix and the higher cost of external fibres, energy and chemicals.
There was also a sharp rise in logistics costs, coupled with a major shortage in means of
transporting merchandise, compared to the previous year. In the second half of the year, the
availability of logistical resources improved, although costs have remained quite high, with a
slight decrease in late 2022. The price reduction started from Asia to Europe and, only later and
to a lesser extent, from Europe to other markets. The lack of alternatives for transporting
merchandise between Portugal and the United States persisted, continuing to affect price
levels.
The increase in personnel costs of around €31 million was caused, to a great extent, by
Navigator's positive performance in the year, allowing it to hand out more performance-related
bonuses, distribute a new productivity bonus to employees and reinforce the rejuvenation
programme. Total fixed costs ended up at 17% above those of 2021, essentially due to the
item of personnel costs, for the reason explained above, as well as the item of maintenance
costs, impacted by the widespread increase in costs for materials and services in an
environment of inflationary pressure, and by higher operating costs, namely for projects aimed
at supporting and diversifying the Group's business, plus higher outsourcing costs, primarily as
a result of wage increases and those associated with the post-pandemic business rebound.
Against this backdrop, the international environment conducive to favourable pricing trends and
efforts to boost productivity and efficiency offset the sharp rise in the cost of production factors,
resulting in an EBITDA of €736 million in the period. The EBITDA/Sales margin was 29.9%
(+7.6 p.p. compared to 2021). Also of note was the positive net impact of the exchange rate
on EBITDA of around €52 million, with an average EUR/USD rate in 2022 of 1.05 vs 1.18 in
2021.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 41
Non-recurring costs, previously recognised
in equity, impacted the financial results
by €38 million.
The financial results totalled €-57.0 million (vs €-17.8 million), i.e., down €39.2 million,
primarily due to the non-recurring impacts (€38.0 million) of negative accumulated exchange
rate differences associated with the reimbursement of capital granted to the subsidiary Portucel
Moçambique recognised, in the first quarter, under results for the year (in lieu of equity).
Without these non-recurring impacts, the financial results would have been €-19.0 million.
During the period, there was an improvement to the result of financing operations (€0.5
million) due to the lower volume of interest-bearing debt compared to the same period, as well
as an improvement to the current exchange results (€2.4 million), which were slightly positive
in 2022 compared to extremely negative in the previous year. Furthermore, there was a highly
negative change in other financial costs and income (€4.6 million), mainly due to the non-
existence of compensatory interest in this year which, in 2021, was extremely positive as a
result of favourable decisions from tax courts during that year.
As a result of the periodic assessment of tangible fixed assets done by a recognised
independent entity, and taking into account the use of these assets, technology advancements
and the investment prospects foreseen by the Group over the next five years, particularly as a
result of decarbonisation commitments and the Recovery and Resilience Plan (PRR), the useful
life of a collection of assets was revised so as to result, on average, in a shorter useful life and
thus higher depreciation for the year.
Results before taxes totalled €516.5 million, and the Corporate Income Tax (IRC) charge for
the year was €123.9 million, at a tax rate of 24% during the period compared to 19% in the
previous year. Insofar as IRC is a progressive tax, accentuated by the application of local state
tax, the increase in results for the year generated a more-than-proportional rise in taxes due.
The results were €392.5 million vs €171.4 million in 2021.
Strong generation of free cash flow in 2022
of €463 million
The year was marked by the generation of high free cash flow of €463 million (vs €235 million),
reflecting outstanding operational performance, and allowing the favourable international
market circumstances to be capitalised on in full, particularly with regard to sales volume and
prices.
The amount of working capital has remained relatively stable. There was a significant increase
in the values of Inventories (due to both volume and higher prices) and Customers (in line with
the strong business expansion), but the growth trend in working capital that would have
resulted from this was tempered by the simultaneous increase in the balance of Suppliers.
Along these lines was the implementation of a supplier management policy, which included
ongoing solutions to support the liquidity of our partners.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 42
2.7. Sustainable financial management
Net debt saw a significant decline compared to the end of 2021, from €595 million to €382
million, despite the distribution of dividends and reserves throughout the year totalling €250
million. The ratio of net interest-bearing debt/EBITDA was thus 0.52, strongly confirming a
downward trend, and consolidating the sound financial profile demonstrated by the Group in
recent years.
Of particular note was the issuance of a bond loan in June, in the amount of €150 million, with
a maturity date in 2028, under a Sustainability-Linked Bonds Framework. Simultaneously,
financing in this same amount that due in 2023 was paid off early.
This operation will help to extend the average life of the Group's debt, as well as lower the
Company's financing cost, and includes conditions associated with sustainability commitments.
The loan conditions are indexed to three ESG indicators in the Company's Sustainability Agenda
and, in turn, aligned with the United Nations Sustainable Development Goals.
With this financing operation, we wrapped up the year with an adequate average debt maturity,
with a properly phased repayment profile, and with around 40% of the total debt issued of a
sustainable nature and 94% of the total debt issued by the Group at a fixed rate, allowing us to
maintain low financing costs at a time of sharp interest rate hikes.
Furthermore, also of note in 2022 were the efforts to align the Pension Fund management
policy with a Responsible Investment Policy. The Fund follows a responsible investment policy
so that, through the investments made, beyond the traditional financial criteria, Environmental,
Social, and Corporate Governance (ESG) aspects are highlighted, with efforts to help ensure
the long-term sustainability of the market as a whole.
2.8. Performance in the capital market
2022 was again marked by high volatility in the world's key stock markets. It was a year
marked by fast-paced change in the macroeconomic and geopolitical environment, triggered by
the Russian invasion of Ukraine, with a resulting rise in aversion to risk, the highest inflation
rates in decades and prospects for an economic slowdown, coupled with restrictive central bank
policies forcing corrections to the prices of most assets, particularly shares and bonds.
The reference index of the Euro Area, the Eurostoxx 600, had a negative return of around -
13%. Note that the devaluation of the euro through the third quarter, below par for several
weeks, together with the geopolitical circumstances in Europe, discouraged investment in the
European stock market among international (particularly American) investors.
In this environment, the stock performance of most companies in the paper and pulp sector
was negative.
Navigator shares were among those with positive performance in the sector in 2022,
appreciating at a rate higher than the PSI (3.10% vs 2.81%), and wrapping up the year at
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 43
€3.454 per share. Navigator shares traded at their lowest price of €2.95 on 8 March, in line
with the widespread decline in the financial market at the time of the Russian invasion of
Ukraine. Its highest price in the year was €4.176 on 30 May, after the dividend distribution
dates were published.
Navigator held its Annual General Meeting of Shareholders on 27 May 2022 and distributed
dividends totalling €99.99 million on 7 June, equivalent to a gross value of €0.1406/share. On
21 November, an Extraordinary General Meeting of Shareholders was held to approve the
distribution of reserves in the amount of €149,995,621, which were distributed on 12
December, with a gross value per share of €0.16642.
In 2022, the average daily trading volume of shares was 912,354, up over the previous year
(838,230). Navigator's shareholders had a total shareholder return (TSR) of 12.8% in 2022,
assuming that dividends received were automatically invested in new shares.
Currently, eight analysts are actively covering Navigator, one more equity research house than
in the previous year, bearing out the interest in its shares. At year-end, with no
recommendations to sell, Navigator had three recommendations to buy and five
recommendations to hold.
2.9. Contribution to State tax revenue
Within the scope of the activity carried out by companies that make up the Navigator Group,
such companies incur a multitude of taxes, fees and contributions, making the Group an
important contributor to government revenue in Portugal, and thus to the achievement of social
objectives and national development. Fiscal policy thus has a significant impact on the business
community, affecting the Group's entire value chain.
For this reason, the Navigator Group has a tax policy in line with the Group's business
development strategy, defined in accordance with the economic substance of its activity,
aiming to ensure that the entities that make up the Group are fully compliant with their tax
obligations in all jurisdictions in which they carry out their activity, seeking to maintain full
compliance with the spirit and letter of the applicable legislation.
Aware of the role that it represents in the Portuguese business community, and as required
from a transparency perspective by its stakeholders, Navigator in recent years has sought to
determine its tax footprint, identifying the level of taxes it incurs economically and the values of
tax that it collects and administers on behalf of the State or third parties, thereby doubly
contributing to the State's tax revenue.
As shown in the graph “Taxes borne”, in 2022, in terms of taxes paid – which includes more
than 20 different taxes, contributions and fees – the Group paid a total of €166 million (2021:
€90 million), equivalent to an effective tax burden of 32.12% in 2022 (2021: 42.51%),
calculated on pre-tax profit. Such tax burden pertained primarily to the amount paid for
Corporate Income Tax (IRC), including "derrama" surcharges (municipal and state),
Autonomous Taxation (TA) and Social Security contributions, the latter totalling €135 million
(2021: €44 million) and €21 million (2021: 20 million), respectfully.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 44
Main taxes borne
The taxes borne include significant environmental taxes, totalling €6.5 million – including Tax
on Petroleum Products, Tax on Water Resources, Fee on Public Maritime Domain, Fee on Public
Water Domain, Waste Management Fee, Special Electricity Consumption Tax (IEC), Special
Energy Sector Contribution (CESE), Motor Vehicle (IUC) and CO
2
Tax, down considerably
compared to the previous year (2022: €6.5 million versus 2021: €23.5 million), due to the
lower need to acquire CO
2
licences. This reduction also demonstrates the contribution from a
tax standpoint towards achieving sustainability goals, in line with the Group's policy. Even so,
the amounts borne by the Group continue to demonstrate its high sectoral contribution, even
today, which, in the future, with the creation of new rates or financial contributions, will
certainly imply double taxation and a negative tax burden on the Group, the consequence of
which will be to limit Navigator's ability to invest in new, more sustainable projects, as it has
been doing.
Autonomous taxation, 1%
Municipal and
state tax, 22%
Social Security
under responsibility
of the Company,
13%
Corporate income tax (IRC), 64%
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 45
Total taxes borne
With regard to taxes collected on behalf of the State, in 2022, Navigator concentrated an
amount of €1.465 billion (2021: €1.004 billion); once again, VAT contributed the most to this
amount (2022: 1.345 billion versus 2021: 904 million), which highlights the Group's
contribution towards collecting tax revenue for the Portuguese State. It should be noted that
Navigator is not remunerated by the State for collecting these taxes, unlike in other
jurisdictions. Even in Portugal, other economic operators are remunerated by the Tax Authority
(e.g. pledges made at the request of the Tax Authority), which means that Navigator
internalises and fully bears the costs inherent to collecting these taxes on behalf of the State.
Taxes collected
Corporate income
tax (IRC), 82%
Social Security
under the
responsibility of
the Company,
13%
Environmental
taxes, 4%
VAT – Non-deductible,
0%
Wealth taxes, 0%
Stamp duty, 1%
Other taxes, 0%
Paid and self-
assessed VAT, 92%
Personal/corporate
income tax
(IRS/IRC)
withholdings, 2%
Social Security under the
responsibility of the
employee, 1%
Pledges, 0%
Paid and self-assessed VAT (VAT records
abroad) , 5%
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 46
It is also important to mention the VAT assessed and self-assessed by Navigator in other
jurisdictions where it is registered for VAT purposes outside Portugal, where it collected an
additional total of €82 million of VAT (2021: €66 million) for the respective states.
VAT collected for other states
Country
2022
Amounts in euros
Netherlands
€17,635,416
Poland
€16,918,685
United Kingdom
€13,100,495
Germany
€25,859,755
Spain
€3,909,288
France
€3,775,702
Switzerland
€465,771
Italy
€102,395
Total
81,767,507
The Group also collects €9.8 million in Social Security contributions owed by employees (2021:
€9.4 million) and €28 million in withholding income tax (2021: €22.7 million), essentially on
salaries paid to its employees. The “labour tax rate” in 2022 was 11.4% (2021: 24.7%), with
the variation essentially due to the improvement in the Group's consolidated results. This
indicator equals the ratio between tax on labour resources (Social Security contributions by
both the company and employees and Personal Income Tax [IRS] withholdings on revenue
from employed work) and pre-tax profit.
As for the geographic distribution in Portugal of taxes levied on a territorial basis ("derrama
municipal" [municipal surcharge], IMI [municipal property tax], IMT [municipal real estate
transfer tax] and other municipal taxes), the Group has the greatest presence in the regions of
Setúbal, Figueira da Foz, Aveiro and Vila Velha de Ródão, with taxes of €4.6 million, €3.2
million, €0.9 million and €0.27 million, respectively.
Furthermore, as regards the worldwide geographic distribution of corporate income tax in 2021,
calculated on a cash flow basis, the Group paid a total of €24.6 million, broken down in
following table that shows the payment of income taxes by jurisdiction/country:
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 47
Jurisdiction
Accounting
result
in 2020
Income
tax
paid in 2021
Proportion
of income
tax
paid in 2021
Amounts in euros
Spain
1,414,600
1,172,971
4.75%
Netherlands
54,521
7,332
0.03%
Portugal
255,307,716
19,461,688
78.87%
France
103,027
32,620
0.13%
Germany
538,513
20,836
0.08%
Austria
29,551
11,279
0.05%
United Arab Emirates
10,708
0
0.00%
United States of America
4,697,171
306,846
1.24%
Italy
135,810
17,380
0.07%
Morocco
14,337
1,592
0.01%
Mexico
10,311
6,692
0.03%
Poland
5,939,204
2,945,849
11.94%
United Kingdom
1,572,739
306,101
1.24%
Russia
24,218
975
0.00%
Türkiye
7,062
4,353
0.02%
Egypt
0
2,176
0.01%
Ireland
1,506,747
375,032
1.52%
Mozambique
15,513,296
1,016
0.00%
Total
286,879,532
24,674,738
100%
In fulfilling the Group's country-by-country tax reporting obligations, in 2021 the Group paid
overall Corporate Income Tax (IRC) of 78.87% in Portugal (2020: 80.92%; 2019: 95.95%;
2018: 92.93%; 2017: 93.78%) in the 18 jurisdictions (2020-2019: 16; 2018: 18; 2017:17)
where it is represented by a company, together with 19.82% in Europe, 0.04% in Africa and
the Middle East and 1.27% of the total corporate income tax in the Americas.
The Tax Footprint report is particularly important for the Group in an effort to digitise the tax
function, the reliability of tax information in order to comply with reporting and tax obligations,
also insofar as it aggregates the compilation and analysis of the key indicators concerning the
multiplicity of taxes borne and collected on behalf of the State and the Group's significant
contribution to public revenue in Portugal.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 48
2.10. Navigator Group tax policy
The Navigator Group achieves its corporate citizenship by fulfilling its obligation of helping to
create value and fund the general functions of the states where it does business through the
payment of taxes, contributions, fees and other charges due pursuant to the law, and by
cooperating in the sustainable socio-economic development of these states.
The Navigator Group's tax policy aims to ensure that the Group's companies fully meet their
tax obligations in all of the jurisdictions where they do business, seeking to maintain full
compliance with the spirit and letter of the applicable legislation.
For this purpose, the Navigator Group uses internal specialists and outside consultants (if
necessary) to ensure a proper and prudent interpretation of tax laws applicable to its business
and transactions, and requests information which is binding to the tax authorities when
permitted and appropriate, so as to ensure compliance with its tax obligations under a
cooperative approach, while proactively minimising risks and potential tax contingencies.
Since the Navigator Group's tax policy is aligned with the Group's business development
strategy, it has been shaped according to the economic substance of its activity. For this
reason, from a tax standpoint, the Group's transactions are handled in response to its economic
activity, while the tax implications of these same transactions are just one of a number of
economic reasons to be considered in the Navigator Group's management decisions.
Obviously, as with any other business-related expense, the Navigator Group has the obligation
of managing its tax burdens in a manner that is financially responsible to the Company and its
Shareholders. As such, the Navigator Group's tax policy leverages tax benefits and incentives
applicable under the tax legislation of the countries where it does business, as appropriate to
the business carried out, in view of its economic substance.
Furthermore, transactions with related parties take into account the applicable rules, OECD
guidelines and best international practices concerning transfer pricing when determining the
terms and conditions of these intra-group transactions.
The Navigator Group also seeks to proactively establish a relationship of cooperation with the
tax authorities of the countries where it does business, so as to ensure compliance with tax
laws, which is further achieved by providing information and documentation which is
mandatory or legally requested by these tax authorities, thereby ensuring compliance with its
own obligations, as well as compliance with tax obligations by the economic agents that
interact with the Navigator Group.
The Navigator Group also properly and effectively discloses its tax policy and its tax footprint
each year, identifying and disclosing the tax amounts paid, and those collected and
administered on behalf of the State or third parties, thereby making a two-fold contribution
towards the tax revenue of the State and payments made to public entities.
Finally, the Navigator Group creates and follows internal procedures to adequately and
regularly oversee its tax practices and review its tax policy with the involvement of its
corporate boards, with a view to minimising potential financial and reputational risks when
making tax-related decisions.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 49
2.11. Risk management
The Company regards Risk Management as a core process in its business activities. A
permanent risk management monitoring system is therefore in place in The Navigator
Company Group, involving all organisational units, the Risk Management Division (DGR) and
the Supervisory Board.
This system is based on a systematic and explicit assessment of business risks by all
organisational divisions in The Navigator Company Group and identification of the main controls
in place in all business processes. This basis allows the Company to continually evaluate the
adequacy of its internal control system for the risks perceived to be most critical at any given
moment.
As part of this periodic assessment, an annual internal audit programme has been instituted, to
be implemented by DGR in conjunction with each division involved, to monitor and evaluate the
appropriateness of the internal control system to the perceived risks and to help the
organisation to implement programmes to improve this system.
This risk governance system is headed by the Supervisory Board and the Board of Directors.
In this way, The Navigator Company Group has identified a variety of risks to which it is
exposed. In conducting its business, the main risks originate from external aspects (e.g., social,
political, financial environment, regulatory and legislative changes), internal aspects (e.g.,
strategic and operating areas) and interactions between various circumstances. A selection of
these risks is presented below, in accordance with their quantification within the scope of
periodic risk management:
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 50
NVG risk matrix
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 51
#
Main risks
(not exhaustive)
Summary Description
1
Access to raw
material
Risk that raw materials are actually unavailable, or at economically infeasible prices vis-à-vis the cost
structure, due to market movements (e.g., higher wood consumption in emerging markets) or due to
regulatory or legislative restrictions (e.g., restrictions on planting eucalyptus).
2
Cybersecurity
Risk of compromising the confidentiality, integrity or availability of data and systems due to unauthorized or
accidental events that exploit vulnerabilities in information and communication, corporate and industrial
control technologies, in processes or in human resources, with a significant impact on the business.
3
Changes to logistics
chains
Risk of decreased efficiency of paper distribution channels leading to a change in the distribution model. This
decreased efficiency is aggravated by high concentration pressure between players in the distribution market,
which may result in repositioning in the value chain.
4
Talent
Risk of the inability to hire and retain the expertise and qualifications needed to cope with the loss of staff in
critical or difficult to replace business areas, or to address additional staffing needs in businesses or new
areas. This risk has the biggest impact on the administration, first line of management and specific operating
areas.
5
Legal and regulatory
framework in
Portugal
Risk of regulatory amendments in Portugal arising from policy options, namely involving taxation, the
environment or the economy, having a significant direct or indirect impact on Navigator's operations and/or
results. This risk is aggravated by the high concentration of operational and economic activities in Portugal,
and by the possibility that some decisions or options may be conditional upon adverse events involving the
public accounts or external macroeconomic environment.
6
External shock
Risk of significant or disruptive changes to Navigator's external environment with serious and harmful
repercussions on markets (demand, prices), production (energy, water and raw materials) or people.
7
Business
Risk of a major irreversible decline or discontinuation of product consumption or in Navigator's markets with
consequences in terms of its economic viability, value and liquidity.
8
Investment
decision-making
Risk of shortcomings or mistakes in decisions involving significant investment or disinvestment transactions
due to actions or omissions, procedural quality or the time of making the decision, potentially impacting the
ability to properly identify and implement investment opportunities and carry out the established strategy. The
consequence of this risk is the inability to leverage the existing portfolio's value, or the loss of opportunities to
create value.
9
Obsolete assets
Risk of deterioration, and the need to replace, production equipment due to reaching the end of its useful life,
regulatory non-compliance or a lack of competitiveness/efficiency requiring substantial investments.
10
Reputational capital
Risk that existing reputational capital may deteriorate, cannot be capitalized or does not appreciate in the
medium and long term, due to events that are damaging to the company's reputation, or due to management
inaction with regard to this capital. This risk is aggravated by Navigator's inherent exposure to environmental
and sustainability issues, together with the asymmetry of reputational appreciation time (slow) and
depreciation time (fast).
11
Portfolio
Risk that an adverse business event in terms of net results, cash flow generation or asset appreciation has
major repercussions on Navigator's results and financing capacity.
12
Interest rate
Risk of unfavourable interest rate variations having a significant negative impact on the Group's financial
results, access to affordable financing or debt servicing capacity.
13
Foreign exchange
Risk of unfavourable variations in the exchange rates (against the euro) of currencies from regions relevant to
Navigator, whose impact is a major devaluation of Navigator's assets and results. This risk is aggravated by
the significant weight of purchase and sale transactions in dollars and potential sizeable investments in
regions outside the Euro Area.
14
Natural disasters
Risk of a serious environmental accident due to non-natural causes occurring in the assets under the
organization's responsibility, internal or external in origin, such as a potential leak or spill of chemical products
in liquid, gas or solid form.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 52
#
Main risks
(not exhaustive)
Summary Description
15
Regulatory breach
Risk of incapacity or unintentional failures that entail the exceeding of legal or regulatory limits with regard to
environmental parameters, deadlines for reporting or the governance model.
16
Climate
Risk associated with acute weather events (e.g., hurricanes) or chronic weather events (e.g., droughts), with
physical impacts on facilities, areas operated by the Group, operations and/or people. It also includes risks of
transition, arising from the Group's inability to adapt to structural and long-term changes in technological
terms, public policies and consumer preferences (e.g., market downturn and non-compliance with legal and
regulatory requirements).
17
Asset devaluation
Risk of losses from the devaluation of assets that significantly impact the Group's balance sheet, with ensuing
shareholder losses.
18
Credit
Risk of the difficulty or inability to collect customer credit within the agreed timelines, significantly affecting
the Group's financial results.
19
Fraud
Risk of illegal acts involving dishonesty, deception or breach of trust without the threat of violence or physical
force, originating from within or outside the organization, for the purposes of obtaining money, property or
services, avoiding payment or the loss of services, or aimed at obtaining a personal or business advantage.
Exposure to acts of corruption or intentional failure/error in the internal or external reporting of financial or
non-financial information is particularly significant.
20
Access to funding
Risk of unavailability of internal or external financing due to endogenous causes (e.g. over-indebtedness) or
exogenous causes (e.g. contraction and negative outlook for business development, decline in existing market
liquidity). This risk is enhanced by concentration of the Group's financing or activity in Portugal
Many of the risk factors highlighted are not controllable by the Navigator Group, particularly
market factors that may adversely affect the market price of the Company's shares, regardless
of the Group's operational and financial performance.
Climate change related risks, along with developments in ESG issues, have gained particular
prominence in the Navigator Group's risk management. Besides being directly linked to
Navigator's business processes, with mitigation controls defined and subject to monitoring,
climate change is reflected on multiple fronts in our risk management framework. For example,
the risk of access to raw materials may largely derive from drought phenomena or the
(de)carbonisation issues of economies, which Navigator aims to anticipate and which are
extensively discussed elsewhere in this report.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 53
3. INVOLVEMENT
WITH STAKEHOLDERS
3.1. Our team
In a year marked by historic labour agreements with the unions, The Navigator Company paid
particular attention to the youngest members of its teams, seeking to strengthen this
relationship and provide new opportunities for growth throughout all stages of their connection
to the Group.
In July, a two-year agreement was signed with Employees' Representative Organisations,
something unprecedented to date. This agreement covers around 1,700 technical officers and is
accompanied by an increase in variable pay. It establishes a minimum starting salary in 2023
of more than 1,000 euros for employees starting their careers, including a food allowance and
automatic advancement to the next pay scale if there is a positive performance evaluation in
the previous two years.
The Productivity Bonus was created, which increased the variable pay of employees in 2022 up
to a maximum of one salary, putting the focus on yield, improving disposable income, and
reducing absenteeism. In addition to the award, positive reinforcements were also developed,
including the strengthening of occupational health, with particular attention to the company's
medical posts.
As far as the attraction and management of talent is concerned, investment in the younger age
groups was enhanced. In the relationship with universities and centres of knowledge, employer
branding was reformulated to favour more direct and personalised contact, with the aim of
offering opportunities that meet the needs of future employees. As a result of this effort, 50
new internships were created.
Recognizing that internships are largely a pipeline for new appointments, the Trainee
Programme was launched: a two-year development programme to welcome employees who
have distinguished themselves during their internship. The first round of the initiative covers
nine young people, who will be involved in four projects for 14 months that will enable them to
develop a broad vision of the Company. Specific training sessions were also held, such as
Trainees Day, when short- and long-term trainees were able to have more direct contact with
Top Management.
A concern with supporting the early years of young executives' careers led to the creation of
the Future Leaders Forum, aimed at employees under the age of 33 who have been at the
company for at least one year, which involved 55 people. This forum meets every six months
and elects eight members, representing different areas, to make up the Future Leaders Board,
a structure that is responsible for working on a challenge set by the Executive Committee for
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 54
the following six months. As this project also involves middle management, who act as mentors
to the Future Leaders Board, it contributes to a closer and more participatory Company culture.
547
1079
1031
233
1
135
13
520
1137
1003
235
123
9
521
1070
1000
230
114
9
Aveiro
Industrial
Complex
Setúbal
Industrial
Complex
Figueira da
Foz Industrial
Complex
Vila Velha de
Ródão Mill
Aveiro
Research
Institute
Lisboa
Aliança
Nurseries
2021
2020
2022
Employees in Portugal
Total 2022: 3,039
Total 2021: 2,944
Aliança
Nurseries
Lisbon
Aveiro
Research
Institute
Vila Velha
de Ródão
Mill
Figueira da
Foz Industrial
Complex
Setúbal
Industrial
Complex
Aveiro
Industrial
Complex
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 55
Breakdown by gender (total employees)
2021, 17%
2021, 83%
2022, 18%
2022, 82%
Women
Men
28%
30%
32%
33%
35%
72%
70%
68%
67%
65%
2018 2019 2020 2021 2022
Women Men
Quadros médios e superiores
(Dados sem Colaboradores de Moçambique)
Middle and senior management
(data does not include Mozambique employees)
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 56
Straight to the Top
In 2022, the Straight to the Top operational efficiency programme was extended to various departments/areas in the four
manufacturing complexes and also to the Supply Chain, Wood Supply and Forest Management areas. This selection aimed to meet
the increase in variable costs in energy, wood and chemicals.
Throughout the year, 35 new ideas proposed by Employees were captured and may be implemented after an approval process.
The aim is to enhance participation and involvement, and at the same time give employees a voice. The originators of approved
ideas receive a prize of up to €5,000 or 5% of the economic gain that the company will get from the ideas that are approved and
implemented over one year.
Health and Safety
The Ergonomics Project was scaled up in 2022, not only because of the importance of the topic,
but also thanks to the positive results achieved. The initiative started in the Setúbal plant the
previous year, and now covers more jobs, since it was extended to the tissue units in Aveiro
and Vila Velha de Ródão. The area chosen in all industrial units was transformation, with
various improvements implemented and many others still in progress. Also in 2022, work
began on the mandrel and paper machine areas.
From its inception, this has been a multidisciplinary project, which in addition to the
Occupational Health and Safety team at Navigator, has brought together a company
specialising in ergonomics, the team of physiotherapists at NVG, the employees concerned and
18%
12%
13%
61%
61%
61%
21%
27%
26%
Women Men Total
<30 30-50 >50
Age distribution
(all employees)
26%
18%
14%
18%
74%
82%
86%
82%
<30 30-50 >50 Total
Women Men
Gender distribution
(all employees)
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 57
their superiors. A close and individualised approach led to a more accurate diagnosis of needs
and the creation of solutions that guarantee more appropriate responses.
Due to its nature, which involves intervention at work stations and prior testing of proposed
solutions, this is an initiative that requires great interaction, integration and teamwork, but its
results are visible: in one year, the rate of accidents related to musculoskeletal injuries at
Navigator fell from 50% in 2021 to 32% in 2022. With the extension of the project to the
Figueira da Foz unit and forestry areas at the Espirra Nurseries in 2023, the Ergonomics Project
will cover the entire Company.
To streamline processes and ensure a faster and more efficient decision-making chain, a
governance model for safety was devised, with the creation of three committees to monitor the
entire decision-making process. The meetings of the Executive Committee with the plant
managers (quarterly), Corporate Committees (monthly) and Local Committees (fortnightly or
weekly, between the management of the industrial units and their teams), all guarantee better
knowledge of the situation, swifter assessment and approval of measures, and a more agile
and effective implementation of these measures. At the same time, the sharing of knowledge at
the meetings held during the year (three of the EC Committee, six of the Corporate and 44
Local), made it easier to assess good practices, which can more easily be applied in the
different Navigator units. Overall the new governance model has brought greater speed and
efficiency to the development, approval and implementation of company safety measures.
Safety Olympics
The strong return to face-to-face activity in 2022 brought greater participation in the safety month activities, which took place in
April. One of the most popular initiatives was the Safety Olympics, in which various challenges were set throughout the month, the
last of which was a test in an escape room, in which the different teams had to pass tests relating to procedures, personal
protection equipment and emergencies, among others, to be able to exit the room. In total, 192 Employees took part in the Safety
Olympics across 45 teams, four of which emerged as winners.
Training
The year 2022 saw a strong return to training, with 96% of employees from Portugal,
Mozambique and international offices involved in the various training activities carried out,
totalling 150,904 hours.
Over the years, Navigator has invested in training programmes and professional internships as
a recruitment strategy. In 2022, more than 70 young people were covered by the new courses
for Industrial Production Technicians, developed in partnership with the Employment and
Professional Training Institute (IEFP), which took place at the Setúbal and Figueira da Foz units.
With a workload of approximately 600 hours, these courses include theoretical input and
practical training in a work context at The Navigator Company. This provides initial contact with
industrial areas and prepares young people for their future jobs, with a professional internship
at the end of the course. In total, this is a journey that takes nearly 14 months, which reflects
the Group's commitment to the training of new technicians.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 58
In support of training, the new regulations for co-funding academic training were also
approved. This now allows two application phases. The programme is aimed at all employees
who want to invest in continuing their training, and covers first degrees, Master's degrees,
post-graduate courses and doctorates in areas relevant the employee's role within the
Company or for career development. Seven applications were approved in 2022.
The progressive easing of Covid-19 prevention measures allowed the Sales Training
Programme, aimed at all sales teams, to be held in Aveiro, Lisbon, Paris and Madrid. In total,
the six rounds had 56 participants from the UWF paper and Tissue teams, Sales Managers,
Regional and General Managers. They received training in advanced negotiation techniques and
team management. Training content was adapted to the needs of each job, with three different
programmes offered.
With around 72% of the training being given internally, and taking into account the increasing
uptake of new formats by employees, there was an enhancement in online formats throughout
the year. Eight new courses were opened in 2022, covering topics as diverse as Internal
Policies or the Code of Ethics and Conduct. The courses enable employees to better understand
and align themselves with the Company's principles.
The Language Training Platform was launched in early 2022 for all Employees, and was
available in 12 different languages. Access was subsequently extended to direct family
members.
Following the work done in 2021, the Valences Project was continued – its goal is to support
the career plan created in 2021 for maintenance, production, tissue and quality process control
areas. In 2022, the implementation began of some of the new valences programmes
developed, with the conclusion of the 213 training programmes planned for 2023.
Throughout the year, new Departmental Open Days were also held, an initiative aimed at
promoting organisational knowledge and contributing to networking between people from
different areas.
Leadership Passport
In 2022, the new supervisors received their "Leadership Passport", the new training programme for supervisors. Technical and
safety training specific to Navigator was given over two weeks to provide the new supervisors – who represent the first line of
team management – with a broader vision of the whole business chain. Given the nature of their new role in the Company, this
was followed by three weeks of specific leadership training, carried out by an external entity, focusing on leadership and team
management tools.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 59
Navigator Training
7
2020
2021
2022
Training hours
135,787
136,118
150,904
Employees involved
2,753
2,283
3,118
% of Employees involved
85%
72%
96%
No. of hours per Employee
42
43
46
3.2. Our customers
In a year marked by shortages of paper and pulp, Navigator was nonetheless able to make
progress in winning new customers and gaining market share.
In UWF paper, the Company ended 2022 with 107 new customers in Europe and 64 in the rest
of the world, a total of 171. Active customers to whom sales were made in 2022 totalled 1,242.
Proximity and service to customers proved to be essential in managing product availability and
pricing policy. On the one hand, it was important to value regular customers and, on the other,
to carry out a gradual and responsible price increase, passing on the idea that it reflected cost
increases.
UWF Navigator customers per region
7
This training was delivered to all employees at Navigator during 2022 (including Portugal, Mozambique and international offices)
Europe, 812
(65%)
USA, 130
(11%)
Rest of the world, 300
(24%)
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 60
In Packaging, in accordance with the initial strategy, the business customer base is still very
much centred on Europe, and especially on the neighbouring markets of Iberia and Italy.
However, this base is in a phase of expansion, in order to match sales growth and entry into
new market segments in 2023.
The Company ended 2022 with sales to 150 Customers in Europe, and 35 in the rest of the
world, totalling 185 and representing 50% growth in its customer base compared to 2021.
Navigator Packaging customers per region
The Tissue business added 4 more customers during 2022, ending the year with a total of 630.
Over 90% of Navigator tissue customers are based in Portugal, Spain and France.
Europa, 150
(81%)
Resto do mundo, 35
(19%)
Rest of the world, 35
(19%)
Europe, 150
(81%)
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 61
Navigator Tissue customers per region
Despite the limited pulp available for the market for most of the year, it was possible to
increase and diversify the customer base in this area, focusing on high added-value sectors.
The Company ended 2022 with 9 new customers in Europe and 2 in the rest of the world,
bringing the total to 158.
Navigator BEKP customers per region
With the constraints of the pandemic over, contact with customers was once again more face-
to-face. However, Navigator also invested in the development of digital tools to enable a faster
Europe, 80
(51%)
Rest of the world, 78
(49%)
Iberian Peninsula, 540
(85%)
Rest of Europe, 78
(12%)
Rest of the world, 18
(3%)
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 62
and easier relationship between companies, and allow communication to focus on quality rather
than on procedural issues.
The Navigator HUB is one example of this. This is an e-commerce platform developed by all the
Company's departments to improve the level of service, accessibility and transparency of
information provided to all customers. This portal allows Customers to consult all their account
information, such as order status, invoices and current account, but also to obtain product
technical data sheets and place orders online 24 hours a day.
In 2022, the tissue business unit was added to the platform, in addition to UWF paper, along
with the complaints portal. The year ended with 660 Customers from all markets using the
HUB, representing 60 per cent of customers and a growth of 490 per cent over the previous
year. With most traffic operations concentrated in Europe, the HUB's expansion potential now
extends to markets in the rest of the world, where digital access is more limited. In 2023, we
expect all UWF and tissue customers to be using the portal.
Celebrating the 30th anniversary of the Navigator brand with customers
In 2022, the Navigator paper brand celebrated three decades of existence with nine events, gathering together 454 guests in
London, Istanbul, Lisbon, Paris, Antwerp, Madrid, Bologna and Hamburg. For this celebration to take place in the Company's main
markets, as a constant commitment to customer proximity, members of the Marketing, Supply Chain, European and International
Sales Departments and the Executive Board attended these events.
Under the theme “A natural leader for the future”, the Company aimed to convey a message of stability in its relationship with
Customers, at a time of uncertainty when some important brands are leaving the market or are in the buying and transition
phase.
The event was also marked by the launch of a competition for end customers, where 130 iPhone 13s were given away through
promotional codes written on reams of Navigator paper.
3.3. Our suppliers
The year 2022 was marked by a sharp increase in the costs of Navigator's chemical,
petrochemical and packaging raw materials, both due to increased demand after the pandemic
period and to price increases in energy, natural gas, transport and oil. By way of example, the
TTF index, to which natural gas is indexed, rose by approximately 170% from 2021 to 2022.
In the last quarter of the year the deceleration of this scenario began to be perceptible, with
some prices falling.
This situation of generalised price increases in most of the year was compounded by some
supply difficulties resulting from the conflict in Ukraine, particularly in the production and sale
of corn used for the production of starch, one of the raw materials necessary for Navigator
operations. As the conflict escalated, fears about the risk to the supply of this raw material
increased. To mitigate this, the Materials Management team reacted promptly, investing in the
search for other sources that would guarantee the continuity of supply of this type of raw
material. As a result, the Supplier base recorded a slight increase, which should continue in
2023.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 63
As in the previous year, the Materials Management team focused on seeking strategies to
contain price increases, the main vectors of which were negotiation and the search for
alternative sources of supply. In this context, there was a redirection of the search for new
suppliers in markets less affected by the increase in energy and natural gas costs felt in
Europe.
A procurement project was also developed with a national lime supplier, in which Navigator was
a sponsor, encouraging and supporting investment in energy production from biomass as a way
to mitigate the rising costs of gas.
As part of a long-term strategy, the first steps were also taken in a feasibility study for the
construction of a chemical island in Portugal, which involved Navigator Suppliers and internal
Stakeholders. If it comes to fruition, this is a project that could boost the market and reduce
the level of dependence on external suppliers.
3.4. Logistics
During 2022, The Navigator Company's logistic model once again showed its resilience.
In a troubled period for the sector, marked by rising freight costs, port congestion and rising
energy prices, the Company managed, thanks to its policy of strategic partnerships, to keep
the operation running, moving a total of two million tonnes to 102 countries and 3,751 delivery
points.
During the first seven months of the year, the constraints that had already marked 2021
worsened. Congestion at ports increased overall, particularly in March, when the beginning of
the conflict in Ukraine led to the cancellation of many shippers' services with Russia, and the
consequent parking of goods in transit at major European ports. This situation led to greater
restrictions on shipping capacity and a rise in freight rates, which had already increased in
2021.
With a business model based on partnerships with shipowners that make it possible for
Navigator to benefit from preferential treatment as an anchor-customer, it was possible to
guarantee some service and price stability in short-sea shipping. However, on the transatlantic
routes, which were the most affected by the increase in costs, it was not possible to mitigate
the impacts in the same way.
The year 2022 was also marked by rising energy and fuel prices, with direct impacts on
logistics on a global scale. In March, when fuel price rises peaked, there were even fears that
some road hauliers were considering leaving the market, with available road transport capacity
falling by 16% in Europe. The Navigator Company's reaction to this problem was swift and once
again involved partnerships, through the creation of an additional fuel fee. The objective was to
support the hauliers and thus avoid possible disruption to the service.
From the second half of the year on, there was an improvement in disruptions in the transport
chain, enabling Navigator – which moved 66% of its cargo by sea and 34% by road – to
renegotiate lower freight rates with the maritime shipowners at the end of the summer.
102
Recipient countries
3,751
Delivery points
2.1 M
Tonnes transported
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 64
Towards the end of the year, as port congestion continued to ease, shipowners began to have
more shipping capacity. It was at this point, in order to reduce the freight burden, that the
logistics team at Navigator made use of e-sourcing tools to reach a more global supplier base,
which will be reflected in cost savings throughout 2023.
Internally, the company continued to focus on rail transport to connect their industrial units to
the ports, with 23% of containers being moved from the mills by this route. The focus on rail
and alternative transport, such as the Ro-Ro service, (roll-on/roll-off – the trucks enter a ship
at the port of origin, leave at the destination port and only travel the 'last mile' by road) meets
the Group's environmental concerns while responding to the shrinking availability of drivers
which affects road transport in Europe.
3.5. Social Responsibility
The impact of The Navigator Company transcends what the company produces, and the
connections it establishes go beyond the purely commercial. In line with our corporate purpose,
we invest in a strategy of proximity with communities, based on the active sharing of
knowledge and know-how, to foster a relationship of trust and dialogue.
In 2022, the lifting of the restrictions imposed by the pandemic allowed us to return to direct
contact with our Stakeholders. We resumed our regular visits to our industrial complexes, tree-
planting initiatives, attendance at sector fairs and events for the target audiences of the various
projects we promote, and workshops and demonstration sessions in the field.
We always walked by your side, supporting organisations, institutions, programmes, ideas and
people. But in 2022, we were able to do it face-to-face once again.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 65
Biodiversity by The Navigator Company
The preservation of biodiversity is part of the day-to-day running of The Navigator Company's
forestry operations and sharing knowledge, experience and resources with society is a
fundamental part of the Company's purpose. Bringing these two factors together,
the digital platform www.biodiversidade.com.pt was created in 2022. It has educational and
inspiring content that aims to provide greater awareness and information on the importance of
biodiversity in forests.
The project is based on systematised information about habitats and species that can be found
in Portuguese forests, good practices in the monitoring, conservation and restoration of
ecosystems, and compatibility between forestry operations, biodiversity and natural capital,
highlighting the specific case of Navigator's sustainably managed forests.
The platform has versions in Portuguese and English, as it was considered that the topic was
also relevant for international stakeholders.
In 2022, Biodiversity by The Navigator Company supported a mycological inventory in the
forest areas managed by the Company in south-west Alentejo. A team led by researcher Vasco
Fachada, from the University of Jyväskylä in Finland, travelled around several properties,
cataloguing the mushrooms found there. The results, which are still being analysed, will then
be published on the project website.
A window on biodiversity
To mark the launch of biodiversidade.com.pt, The Navigator Company's shop window in Lisbon was invaded by biodiversity on
paper: trees, plants and animals, such as the strawberry tree, the Portuguese sundew, eucalyptus, Bonelli's eagle and the Iberian
wolf, which looked out at passers-by. This was a creative work by the Oupas! design studio, built from the new gKraft packaging
paper, whose differentiating element is the use of Eucalyptus globulus raw material. Its characteristics offer benefits such as lower
wood consumption, greater compostability, greater recyclability, unique printing quality and generation of more resilient
recyclates.
WEBSITE
www.biodiversidade.com.pt
33,163
visitors
SOCIAL NETWORKS
3,340
followers
1,151
followers
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 66
Forest Producers
Navigator is developing a relationship with producers based on knowledge sharing and
educational action around the values of sustainable forest management, yield and certification,
which all contributes to a better forest.
The return of field activity, fundamental in a project of this nature, enabled us to re-establish
our proximity to the rural community, particularly in the various sector fairs in which the
project participated. But we also decentralised information in a clear and unambiguous way, to
help it reach those who need it, through practical demonstrations and workshops with forestry
producers.
This knowledge sharing is done through the forestry department at The Navigator Company
and its partners, namely RAIZ – the Forest and Paper Research Institute, and Biond –
Associação das Bioindústrias de Base Florestal.
In 2022, we should highlight our collaboration with the Authority for Working Conditions (ACT)
and the Minho-Lima Forest Certification Association in organising the seminar "Safety in
Forestry Work and New Challenges", held in April – an initiative intended to raise awareness
among the various sector stakeholders of the need to improve good safety practices in forestry
activities.
The year was also marked by the first Forestry Producers Meeting, an initiative that will
continue in 2023. This first edition focused on the theme of smallholding management, one of
the main challenges facing Portuguese forests.
2022 was also the year in which the "Practical Guide to the Forestry Sector" was launched, in
partnership with the Portuguese Farmers' Confederation (CAP). There are four issues,
distributed free of charge with Produtores Florestais magazine. The first issue, published in
2022, provides information on the main regulatory and forestry policy instruments, as well as
the main entities involved in the sector and their competences.
Annual Forest Producers' Meeting
Under the theme "Greater profitability and better management in smallholdings", the Annual Meeting of Forestry Producers
brought together producers and forest owners, public institutions, service companies, local councils, associations and industry, to
create an opportunity for the exchange of knowledge and experiences. Grouped Forest Areas, Integrated Landscape Management
Areas, plant quality as a guarantee of profitability and the recovery of biomass were some of the topics addressed. The
programme included contributions by The Navigator Company, the Baixo Vouga Forest Association, RAIZ, Unimadeiras, ICNF –
Institute for Nature Conservation and Forests, Biond (at the time, CELPA) and Mortágua Municipal Council.
Demonstration sessions were also held, in which efficient tools and techniques for forestry operations were presented, including
land preparation, selection of stakes, planting and fertilising.
MAGAZINE
12,450
subscribers
WEBSITE
www.produtoresflorestais.pt
113,793
visitors
SOCIAL NETWORKS
8,678
followers
3,349
followers
245
subscribers
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 67
My Planet
In 2022, My Planet went out again to plant trees, in activities promoted in partnership with
local organisations. A total of 2,922 trees were gifted by Navigator and planted by enthusiastic
volunteers.
The project channels (magazine, website and social networks) continued to focus on
sustainability issues, particularly the preservation of the forest and biodiversity, responsible
consumption and healthy lifestyles, as a way of creating value for a community concerned
about the planet.
During the year, My Planet magazine included two special themed issues. One was dedicated to
biodiversity and its importance to the planet and to humanity, taking an in-depth look at life in
the forests and how The Navigator Company has been helping to preserve them. The other was
devoted to the widespread uncertainty that has taken hold of our lives, challenging us to face
instability with determination and resolve, through the stories shared by dozens of guests and
experts, and also through Navigator's example.
Papies Grand Prize 2022
My Planet magazine was awarded the Papies Grand Prize 2022. This competition recognises the best graphic communications work
carried out in Portugal, and honoured the 10th edition of My Planet magazine, an issue with a new format, more pages, and
inspiring stories and features that celebrate biodiversity.
Forest for all in Jamor
The My Planet and Give the Forest a Hand project teams came together to take part in two activities at Jamor Park in Oeiras, to
raise awareness on the issues of environmental literacy, the importance of outdoor sports and social inclusion. Firstly, in June, at
the "Floresta em Família" event, 250 trees were planted in the Jamor Urban Park, and the younger members of the family got the
chance to have fun with the Give the Forest a Hand games and characters. In September, in partnership with the Portuguese
Institute of Sport and Youth (IPDJ), two Navigator projects returned to Jamor as part of the European Week of Sport. In addition
to various recreational and educational outdoor activities, with the forest as a backdrop, 28 September was dedicated to inclusive
adapted sports.
MAGAZINE
14,003
subscribers
WEBSITE
www.myplanet.pt
271,387
visitors
SOCIAL NETWORKS
33,528
followers
9,588
followers
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 68
Give the Forest a Hand
Educating, teaching, helping to study, but also entertaining, amusing and playing. Give the
Forest a Hand (DMF) continued its mission to support young people at school and during their
free time, while making them aware of the importance and value of the forest.
In 2022, inclusion and solidarity were also in focus. During the European Week of Sport in
September, the project team went to the National Sports Centre in Jamor, for an event with
CERCI on inclusive sport. And in November, the Give the Forest a Hand Christmas story
travelled the country visiting children in need, with a staged reading version, in collaboration
with social welfare organisations that carry out their work at the Navigator Company's mills.
This story also provided the opportunity to introduce a new member of the DMF family:
Francisca the Ant [see text "Francisca the Ant has joined the family"].
In March, Give the Forest a Hand visited Dino Parque, in Lourinhã, with the initiative "Smells of
the Forest". This experience was guided by the sense of smell, to explore smells like
eucalyptus, pine and wet earth. The children also learned about the many benefits and powers
of trees and took home their favourite smells in little perfumed cloth bags. In July, the project
linked up with the Panda Festival, and was presented with a dedicated area to promote
knowledge and appreciation of the forest through play.
Francisca the Ant has joined the family.
In 2022 a new member of the Give the Forest a Hand family arrived: Francisca the Ant. Always ready to help her friends and
anyone who seeks her help, this character personifies solidarity and cooperation, motivating everyone to behave in a more
sustainable way. She encourages those around her to be aware of their individual impact on the planet and is a fan of products
made from environmentally friendly materials, of which her sports shoes are an example. Francisca the Ant always carries her
rucksack, which, besides being used to store the food she collects for her colony, represents the baggage of knowledge she has
about the world.
MAGAZINE
14,929
subscribers
WEBSITE
www.daamaoafloresta.pt
372,904
visitors
SOCIAL NETWORKS
46,549
visitors
45,432
followers
14,385
followers
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 69
Florestas.pt
This platform, in partnership with RAIZ – Forest and Paper Research Institute, continued its
mission to provide the general public with official information and technical and scientific
knowledge about the forestry sector in its various dimensions – natural, environmental,
recreational and socio-economic.
In 2022, the partnerships were extended to six more renowned institutions – FSC, PEFC
Portugal, BCSD, CESAM, Forestis, Floresta do Saber – and a "Comments" section was created
on the website, with articles by guest authors – national experts from various fields, to enhance
the plurality of perspectives.
As part of Science Week in November, the scientific team at Florestas.pt made two
presentations in schools, at the Professor Egas Moniz Elementary School, in Massamá, and the
Montemor-o-Novo School Cluster. In this pilot roadshow, the importance, challenges and
opportunities of Portuguese forests and agroforestry were shared with around 200 students.
Navigator Tour
The resumption of face-to-face initiatives, following the pandemic, has brought back the
Navigator Tour, with visits to the Company's industrial complexes in Spain, as well as Herdade
de Espirra, Aliança Nurseries and the RAIZ institute.
From May onwards, visits resumed without restrictions. There were many requests, and the
year ended with the first three months of 2023 already planned. There were 56 visits, with a
total of 1,350 visitors. There were some special interactions with various groups of
Stakeholders, including universities, institutions, companies and Company employees, fostering
closer ties and greater proximity.
As part of the Navigator presence at the Woodfiber Conference 2022, one of the most
prestigious international conferences in the sector, participants were invited to visit RAIZ, the
Setúbal Industrial Complex and the Herdade de Espirra nurseries.
WEBSITE
www.florestas.pt
323,236
visitors
SOCIAL NETWORKS
10,252
followers
6,792
followers
506
subscribers
56
visits
1,350
visitors
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 70
Internally, there was also "Family Day" at the Vila Velha de Ródão plant, when employees
welcomed their families into the workplace and showed them the jobs they do and the
processes at one of the largest industrial units in the region.
Direct support
In 2022, direct support by Navigator to the community represented investment of over
€170,000.
The Company supported various institutions with around 120 tonnes of paper, namely schools
and civil parish councils where its industrial units are located. But it also supported other
organisations at national level, such as the Higher Institute of Agronomy, the Nossa Senhora do
Bom Sucesso Foundation, the Portuguese Engineers Society, the Santa Casa da Misericórdia of
Funchal and the Portuguese Embassy in the United States.
Cultural and social inclusion continued to be significant aspects of this support. In addition to
continuing to donate paper for the Braille edition of Visão magazine, in 2022 Navigator also
provided paper for the new edition of "The Tree in Portugal", by the Portuguese Association of
Landscape Architects, and for "Forest and Fire during the Pandemic", by CoLAB ForestWISE -
Collaborative Laboratory for Integrated Forest and Fire Management.
The União das Misericórdias [Portuguese Charitable Organisations Union] and the Liga dos
Bombeiros [League of Portuguese Firefighters] received a donation of 78 tonnes of tissuepaper
and this product was distributed by the various Misericórdias and Fire Brigades nationwide.
This support and action reflects Navigator's corporate purpose, which seeks to share its
knowledge, experience and resources with society, towards a better future.
Navigator Park
The plants from the Aliança nurseries are another important area of support provided by Navigator. In 2022, 7,900 trees, bushes
and herbaceous plants of 20 different species were donated to the Universidade Nova de Lisboa for afforestation on the Carcavelos
campus of the Nova School of Business and Economics. The area, which was named Navigator Park, covers 3,000 m
2
.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 71
4. STRATEGIC PRIORITIES
4.1. Forestry
The year 2022 set a record for the area of planted forest, at over 3,800 hectares. This is the
highest total we have recorded in the last 22 years, even with one of the driest springs.
In addition to this effort, vegetation control operations were carried out, which added value to
the forest, reducing competition with the undergrowth and helping to lower the risk of fire.
Internally, within the scope of certified forest management, an audit of the Company's
management system renewed its sustainable forest management certificate, which covers
100% of the forest area it manages. As regards the wood purchased on the domestic market, it
was possible to further increase the volume of certified wood purchased to 65% (63% in 2021).
There was a further development in the weighting of certification within the whole supply chain.
At present, 87% of Suppliers are certified, and 97% of these Suppliers delivered certified wood
to the Company during 2022.
Proximity initiatives with forestry producers remained one of the Company's main strategic
focuses. These initiatives take the form of thousands of individual contacts, know-how transfer,
technical advice, training on forestry or operational safety issues, and so on. Our main
objective is to put the knowledge we generate internally at the service of the sector, and collect
experiences different from our own, in order to improve the range of solutions we can later
offer.
The year 2022 was particularly demanding in terms of Innovation and Development, with a
flurry of activity (with the presentation of work and demonstrations) in projects such as
rePLANT, a programme to develop innovative technological solutions to forestry problems,
which is taking place within the ForestWISE collaborative laboratory and which Navigator is
leading.
At the same time, the entire Group was involved in the preparation of applications to the PRR -
Recovery and Resilience Plan. Benefiting from the experience of rePLANT, an application called
Transform was launched, with more than 50 partners, including companies, universities,
equipment suppliers and others, in a total investment of €150 million, €1.7 million of which is
Navigator's responsibility. The project started in 2022 and includes a proposal by the Company
to create a production line that uses the residual heat from the mill to dehydrate the residual
sludge from the industrial process (composed of organic matter from wood) and turn it into
pellets, thereby producing an alternative to synthetic fertilisers, as part of the circular
bioeconomy.
The year continued to support and promote good forestry practices, as part of the activities of
Biond the association of forest-based bioindustries, in programmes such as Limpa e Aduba
(which covered 14,500 hectares of third-party forest, combining more than 47,500 hectares in
smallholding forest throughout the country), and the recovery of burnt areas, with the recovery
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 72
of around 600 hectares in Mortágua and the replanting of a further 31 hectares in Pedrógão
Grande.
In 2022, Navigator managed around 106,000 hectares in mainland Portugal, with some 55%
its own assets and the remainder from leases to owners. Of the total hectares, 73% are
eucalyptus. In addition to this area in Portugal, there are around 1,000 hectares in Spain
(Galicia region) and 14,000 hectares in Mozambique.
Forestry is in fashion
At Expoflorestal, held in May in Albergaria-a-Velha, Navigator teamed up with 2BForest to organise the event “Forestry in
Fashion”. With the support of the personal protective equipment (PPE) companies Lavoro and Stihl, the aim was to demonstrate
safety and comfort developments in PPE. The involvement of the safety certification groups in the company invitations led to the
participation of 17 "models", who took to the catwalk with equipment for chainsaw and brush cutters, and protective boots.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 73
Investment in the value chain in Portugal by district
(amounts in euros)
District
2021
2022
Amounts in euros
Santarém
5,301,080
3,634,670
Beja
7,575,875
6,013,519
Coimbra
3,315,999
2,625,745
Castelo Branco
3,479,910
3,483,892
Faro
1,926,838
2,042,463
Évora
2,849,492
1,562,553
Porto
2,136,356
1,659,719
Aveiro
933,280
1,316,927
Setúbal
2,516,918
2,902,935
Portalegre
1,884,056
1,102,677
Viseu
740,565
536,909
Viana do Castelo
424,759
310,498
Braga
391,708
576,062
Lisbon
681,699
620,545
Leiria
669,174
179,240
Bragança
469,204
173,405
Vila Real
103,410
40,016
Guarda
5,226
119,125
Total
35.6 M
28.9 M
Fire prevention and fire fighting
Although it was a challenging year in terms of weather, with the country in a situation of
extreme drought, the firefighting campaign was in line with the previous year. The Company's
total investment in action to prevent and fight forest fires amounted to €4.7 million.
Afocelca (Complementary Group of Companies, controlled by the forestry companies of the Altri
and The Navigator Company groups, which is part of the national system), had more than 500
operatives in 2022, including the planning and communications component, present during the
critical period in all the District Commands for Rescue Operations. The operational structure on
the ground consisted of 29 Ground Combat Teams (ECT), 14 Light Combat Teams (ECL), 3
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 74
Helicopter-borne Combat Teams (ECH), which deployed in 3 helicopters stationed at strategic
bases, and 7 Dozer Teams (EMR), pre-positioned from north to south of the country.
The Afocelca team also included 52 employees from The Navigator Company's Forest
Management Department and Wood Supply Department who performed different tasks,
ranging from monitoring and managing forest fire incidents to providing logistical support to the
operatives involved in operations.
The integration of Navigator's employees into Afocelca's operational structure ensures better
operational performance, optimising means and resources in safeguarding the forest heritage.
Besides operational involvement in various incidents, throughout the year this group of
Company Employees regularly participates in meetings of the Municipal and District Forest
Defence Committees, and in briefings held by the National Authority for Emergency and Civil
Protection at its District Commands for Rescue Operations.
Navigator has an active policy of defence against forest fires (DFCI), and is in constant liaison
with various important stakeholders, both at local level and with institutions which are part of
the national DFCI system (ICNF, Civil Protection, GNR, fire service, local authorities and forest
owners and producers' organisations), so that strategies can be defined jointly.
Use of Afocelca resources in the 2022 campaign
58,436
km
79,567
km
Light Combat Teams
Ground Combat Teams
e
590
hrs
172
hrs
Dozer Teams
Helicopter in the service of Afocelca
e
€4.7M
Total investment
by Navigator in
forest fire prevention
and combat in 2022
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 75
Afocelca Training
Course
Classes
Days
Trainees
Operational communications in rural fires
4
4
52
Rural firefighting operations – introduction
6
18
112
Rural firefighting operations – continuation
3
9
33
Extinguishing rural fires with dozers
2
6
46
Rural firefighting operations with helicopters – introduction
1
1
25
Rural firefighting operations with helicopters – continuation
1
3
7
Total
17
41
275
Wood supply and Logistics
Because of the shortage of domestic wood to supply Portuguese industry, Navigator acquires
this raw material (roundwood and chips) in other world markets, such as Spain (Galicia and
Andalusia), Brazil, Uruguay, Mozambique and Chile.
In the case of significant imports from outside Europe, the national ports of Setúbal, Aveiro,
Leixões and, occasionally, Figueira da Foz, are used to receive the products, and Navigator is a
major customer at these ports.
In Spain, and specifically in Galicia, and similarly to the situation in Portugal, the Company has
a complete and integrated supply chain, with wood purchases and leasing and land purchases,
based on a system with three logistics parks (two maritime-railway) that deal with shipments
to Portugal, mainly by rail (dedicated round-trip flows) and by sea, the latter from the ports of
A Coruña and Ferrol.
Of the total wood supplied to industrial complexes in 2022, around 32% came from imports
from outside the Iberian Peninsula, which represents a lost opportunity to create value for the
national economy.
In the supply of wood and biomass, the impacts of the lower availability of wood continued, as
a result of the fires that occurred particularly in 2016-2017, of less labour, of strong
government restrictions imposed on forestry due to the risk of fire in much of the summer –
not explained in the ICNF indicators – and of the very significant increase in demand for
eucalyptus by other industries (pellets, agglomerates and pulp producing industries in Europe).
Added to this was the significant growth in production costs due to the increase in the price of
fuel, oil and tyres, among others, which affected the cost of the suppliers' activity.
Faced with this situation, Navigator implemented a dynamic commercial policy, with various
price incentives to offset cost increases in the supply chain and help suppliers, in addition to
developing and consolidating financial initiatives (advances, aid for the purchase of machinery,
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 76
confirming, among others), to encourage more efficient management of certified wood, through
the creation of a portal by Biond, and to support owners in forest management.
The supply of wood (roundwood and chips) and biomass is a demanding and complex activity,
as it combines road, rail and maritime transport, logistics parks and operations at national and
international ports, with deliveries of very significant daily volumes to mills with high safety,
quality and environmental standards. Deliveries are normally made six days a week (mostly 24
hours a day), to an industry that operates without breaks seven days a week.
In the supply of biomass, diversification of the type of product received in 2022 was achieved
through greater acquisition of raw biomass, complementing the shredded biomass regularly
received to meet mill needs, especially in the form of stumps and wood chip bales, forest
activity waste or reforestation products. All this is always being evaluated, as it is necessary to
maintain the balance of sustainability of plots, without removing too much organic matter from
the soil.
In land procurement, the year 2022 saw continuity in regular land leasing and purchases, but
also great diversification in the solutions presented and implemented in the market (as is the
case of the ATOMO project), with financial support for reforestation and silvicultural operations,
to ensure greater sustainability of the forest and more wood for the future.
Logistics is essential to ensure that most of the flows to the mills are carried out on time and at
the lowest cost. In 2022, some optimisation projects were implemented which led to even
greater efficiency in the supply chain, safety and respect for the environment, while the
supplier base outside the Iberian Peninsula was also strengthened and new sources and species
were identified. This increase in volume outside the Peninsula has significantly helped to boost
cargo and the development of seaports close to the Navigator mills.
Wood acquired in 2022
65
%
68
%
of national wood supplied was certified (63% in 2021)
of the total raw material that entered
the industrial complexes was certified
e
87
%
97
%
of suppliers have
Certified Chain of Custody
of certified wood comes
from certified suppliers
e
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 77
Wood transport managed by the Group
Origin of wood
2020, 76%
2020, 13%
2020, 11%
2021, 68%
2021, 10%
2021, 22%
2022, 68%
2022, 7%
2022, 25%
Rodoviário
Ferroviário
Marítimo
2020, 90%
2020, 10%
2021, 75%
2021, 25%
2022, 68%
2022, 32%
Mercado ibérico
Mercado extraibérico
Road
Rail
Maritime
Iberian market
Non-Iberian market
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 78
Biodiversity
The assets under the management of The Navigator Company in 2022 consisted of 12.3% of
areas of conservation interest (11.8% in 2021), an increase which included an additional 168
hectares classified as habitats protected by the Natura 2000 Network.
The Company's annual biodiversity monitoring plan was implemented in the spring and summer
of last year at 13 managed properties in Malcata/Penamacor and Tagus Valley, at a total of 44
sampling sites. This work has identified new fauna and flora to be added to the list of species
protected by Navigator: there are now around 900 species and subspecies of flora (an increase
of 10 per cent) and 252 species of fauna (seven more than in 2021).
One of the endangered species of flora, which was not yet described in the Navigator assets of
importance from a conservation point of view, is Rhaponticum exaltatum, discovered in
Penamacor by a Floradata team. Rare and little known, it is a plant considered "Critically
Endangered" in Portugal and its presence was thought to be confined to a small area in Trás-
os-Montes.
Specialists carrying out this monitoring also recorded the following flower species: Eryngium
galioidesand Utricularia gibba, both classified as “Vulnerable” in Portugal, and Potamogeton
trichoides and Thelypteris palustris classified as “Near threatened”. In terms of fauna, the
Nightjar (Caprimulgus europaeus) is worth highlighting.
In 2022, around 71 hectares were targeted for restoration or rehabilitation, to maintain or
improve the conservation status of natural and semi-natural habitats. The focus remained on
ongoing projects, since, in a restoration context, the objectives are always long-term. However,
attention was also given to habitat improvement at new sites, identified in accordance with the
Company's priority matrix.
Between autumn 2021 and spring 2022, nine nesting sites of the Bonelli's eagle (Aquila
fasciata) were monitored. In one of them, the nesting of a chick was confirmed, and in another
this was assessed as likely, although visual confirmation was not possible. The nesting site of a
black stork (Ciconia nigra) was also observed, although it was not used this year. Also, 40 nest
boxes – installed to encourage the reproduction of insectivorous species which control pests in
cork oak forest – were monitored. Most of the boxes were occupied by great tits (Parus major),
blue tits (Cyanistes caeruleus) and nuthatches (Sitta europaea), and, in half of the nests, the
birds reproduced.
To analyse the gain in biodiversity in plots previously occupied by eucalyptus which are at
different stages of restoration, Navigator established an informal partnership with the
University of Lisbon Faculty of Sciences (FCUL) to help develop master's degrees in this field.
In terms of the highest profile ecological restoration projects and the preparation of projects
with a major positive impact in this field, the year was marked by the preparatory work for
"Zambujo reCover", a forest rehabilitation and soil protection project on the Zambujo property,
located within the International Tagus Natural Park and the International Tagus Special
Protection Area, classified under the Natura 2000 Network. The aim of the project is the
ecological restoration of a 153-hectare area by reforesting it with native species, to improve
protected habitats. This initiative is promoted by Navigator in partnership with RAIZ – Forest
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 79
and Paper Research Institute, with a total budget of €225,774.79, and funding from the
COMPETE 2020 Programme.
Another project in 2022, called "Genetic improvement and forest reproductive materials", was
included in the Transform Mobilising Agenda, created for the digital transformation of forest
value chains under the Recovery and Resilience Plan. The project includes a genetic
conservation and ecosystem recovery initiative, focusing on some of the most threatened trees
in Portugal, including several native oaks (such as Quercus canariesis) and associated species,
such as strawberry trees, rhododendron and riparian galleries that are the preferred habitat of
alders.
Continuing its collaboration with FCUL and the University of Aveiro on the WildForests project,
Navigator is also providing logistical support for the new FORCE – FORest CErtification project
as a tool to preserve vertebrate biodiversity in exotic forestry plantations. The aim is to
understand whether forest certification can be a tool for ensuring the functional and
conservation role of eucalyptus plantations for vertebrates.
Information sharing
A unique project dedicated to sharing knowledge about biodiversity in forest ecosystems was launched in March 2022, entitled
“Biodiversity by The Navigator Company”. The new platform, available at www.biodiversidade.com.pt, aims to help raise
awareness and inform society about the importance of biodiversity in forests, through accessible, educational and inspiring
content.
Mycological research records new species
In autumn 2022, Navigator supported the systematic inventorying of macrofungi in the area of Southwest Alentejo and
Monchique. Researchers Vasco Fachada, from University of Jyväskylä in Finland, and João Silva toured several properties for a
week, including Vale de Beja and Roncão, and catalogued the mushrooms they found there, to get to know the area's macrofungi.
They made 190 records and identified about 180 species; some will be new for the region, the country, the peninsula or for
Europe, and further office/laboratory studies will need to be conducted to confirm this. The fact that there is little existing research
work and knowledge in Portugal about the fungi, and in these places in particular, emphasizes the importance of this work.
€45,550
Investment dedicated
to ecological restoration
and rehabilitation projects.
€20,000
Rehabilitation of ponds important
for conserving biodiversity and defending
the forest against fires
€23,537
Annual monitoring of biodiversity
(fauna, flora and habitats) and support
for inventorying of macrofungi
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 80
Commitment to sustainability
Navigator participated throughout the year in various national and international initiatives –
congresses, conferences, days, forums and academic gatherings – testifying to its commitment
to sustainability.
One highlight was the Company's presence at the Vision 2045 Summit, which took place as
part of COP 27, [see text “Navigator forestry at COP 27”]; participation in the World Forestry
Congress (WFC 2022), in an event organised by Ibá – Indústria Brasileira de Árvores, on the
theme “Strategy for Conserving Biodiversity in forests under production in Portugal”; or its
intervention in the case study presentation session, at the Capital Natural do BCSD Portugal
Conference.
The Company was also represented at the Biodivsummit, dedicated to the theme “Biodiversity
in the Age of Digital and Climate Transition”; at Green Week, held at the Instituto Superior de
Agronomia, on Forest Sustainability and Protection, with a presentation on “The Contribution of
the paper industry to Sustainability and responsible forest management: the case of The
3
13
27
19
171
3
13
27
19
168
4
13
31
20
180
4
13
36
21
182
5
13
39
24
195
Critically
endangered
Endangered
Vulnerable
Near
endangered
Least concern
2022 2021 2020 2019 2018
Species protected in Navigator forest
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 81
Navigator Company”; at the third annual InSustentável – Congress on sustainability in the
value chain; at the Sustainability Days at Nova School of Business and Economics; at ESG
Week, at a round table organised by APCER on “ESG – Challenges and Opportunities”; at the
Bootcamp of the Portuguese Chamber of Commerce and Industry, as key-note speaker on the
theme “Accelerating Sustainability”; and at the meeting organised by the platform New
Generation Plantations and the International Union of Forest Research Organisations in France,
sharing the Company's experience in the topics of landscape-scale eucalyptus plantation
management, its effect on conservation management and its connection to the Circular
Bioeconomy.
Navigator was also included in another publication by the WBCSD - World Business Council for
Sustainable Development, as a member of the Forest Solutions Group, entitled “Forest Sector
Nature-Positive Roadmap – Phase I”. This document is intended to be the starting point for a
guide and support tool for companies in the forestry sector in implementing positive strategies
and measures for nature throughout the entire value chain.
At the end of the year, The Navigator Company held the 14th Sustainability Forum which
debated the issue of the “Bioeconomy: the Path to a Sustainable Future”.
Governance for sustainability
The Sustainability Forum is a governance body for Sustainability at Navigator, which is sustained by a consolidated model of
involvement with the different stakeholders. As a space for internal and external dialogue, made up of a group of members who
are specialists in the Company's various spheres of activity, it meets twice a year with one session set aside for permanent
members.
In 2020, a new cycle of this Forum started, with the adoption of a decentralised model for the sessions, as a way to increase
proximity to local communities and the various municipalities where the company operates.
The 14th Navigator Sustainability Forum was held in November 2022, in Aveiro. The location chosen is based on the development
of a significant industrial project by the Company in this region, which began in the 1950s, and in the development of a solid R&D
activity, through the work carried out by RAIZ (Forest and Paper Research Institute).
Dedicated to the theme "Bioeconomy: the Path to a Sustainable Future", the session featured several national and international
experts who discussed the importance of the bioeconomy and of bioproducts as a way to create sustainable value from renewable
solutions present in nature, as an alternative to the use of fossil-based resources.
Navigator forestry at COP 27
The Company was invited to share its vision for sustainable forestry at the Vision 2045 Summit event, held as part of the 27th
United Nations Climate Change Conference (COP27) in Egypt, at which leading global companies shared their vision for a more
sustainable world and the efforts each is making to achieve this goal. Those who participated in this forum recognised the work
undertaken by Navigator to this end, particularly through its 2030 Agenda, which aims to contribute to the creation of value and
sustainable growth in three strategic areas: Nature, Climate and Society. The Company was part of panel 14 – "Fostering
Sustainable Ecosystems", dedicated to the importance of preserving sustainable ecosystems, and had the opportunity to
demonstrate that planted forests provide a platform for facing global challenges, both by capturing carbon and by the raw
material, wood, which contains components with the potential to replace several fossil-based products with countless advantages.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 82
Navigator recognised as a leader in climate action
In 2022, the Company was awarded the highest rating ("A") for global leadership in the fight against climate change, thanks to its
actions to reduce emissions, reduce climate risks and develop a low-carbon economy. The award is from CDP – Disclosure Insight
Action, a non-profit organisation recognised for running the largest and most comprehensive global independent environmental
disclosure system for companies, regions, cities, and states. Navigator is part of a select group of 330 companies worldwide (less
than 2% of the over 18,000 that took part) that has achieved this classification. The score awarded by CDP measures the
companies' governance and transition strategies, as well as the measures and targets set to reduce impacts in line with the
science.
In addition to the climate change questionnaire, for the first time in 2021 Navigator submitted its participation in CDP Forest,
focused on forest management, and saw its performance recognised in the second year in this category as well. It rose to "A-" and
now also occupies a leading position in this area. CDP Forest evaluates the robustness of the systems that the Company uses to
trace and monitor the origin of its raw materials, based on the certification of the management model of the forests under its
control and its demanding wood procurement policies.
4.2. Research and development
The activities of RAIZ – the Forest and Paper Research Institute – are carried out in three R&D
areas: forestry, industrial/technological and specialised services to support operational areas,
education and dissemination, to promote sustainable development and the bio-economy based
on eucalyptus forests.
In 2022, several projects were initiated, consolidated and concluded in this R&D and knowledge
transfer centre, mostly funded by The Navigator Company.
They include the completion of the 'Inpactus – Innovative products and technologies from
eucalyptus' project, started in 2018 [see text "Inpactus gives rise to 37 new patents"] which
comfortably met or exceeded all performance indicators. And for the start of three projects,
presented in consortium and financed by the Recovery and Resilience Plan (RRP), called
Transform, From Fossil to Forest and Be@T – Bioeconomia Têxtil. The first, in the R&D
component developed by RAIZ, aims for a more productive and resilient eucalyptus forest
through the development of new genetic materials and good silvicultural and forest
management practices. The second aims to develop new packaging materials based on
cellulose fibres and other sustainable bioproducts as an alternative to single-use plastics. The
third aims to develop cellulose biocomposites with thermoplastic matrices for textile
applications.
In the Industrial/Technological area, which generates knowledge to promote business
competitiveness and sustainability, the year was marked by the start-up of the Bioproducts
Pilot Laboratory, with two pilot scale-up processes at the level of bioactive compounds from the
foliage (essential oils) and biocomposites, with bioplastics that will allow product development
and market testing.
The first laboratory tests for manufacturing moulded pulp products with 100% eucalyptus fibre
were also carried out. The recyclability of eucalyptus fibre was studied and its superior
suitability compared to other paper fibres was demonstrated. The first laboratory tests were
conducted to produce packaging paper with oil and fat barrier properties for food contact.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 83
In this field of new differentiating roles, RAIZ supported the development of the new tissue
product Amoos Calories Control, which is already on the market. And in the area of packaging,
some strategic projects have included the production of a new paper cup.
Science in the forest
In forestry, within genetic research, biotechnology and plant production, 114 clones were
rescued for nursery tests, with average gains of 43% in relation to unimproved forest. The
selection put the emphasis on resistance to eucalyptus diseases.
In terms of forest protection, the official request for the release of Anagonia, a new natural
enemy of the pest Gonipterus, was approved by the ICNF – Institute for Nature Conservation
and Forests, together with a risk study for its introduction, which could be a turning point in the
biological fight against the main pest affecting the eucalyptus. The dispersal of Trachimela was
monitored as was its inclusion in the National Control Plan and the approval of an insecticide to
control it, and the development of an app to help define priorities in the fight against invasive
species.
In terms of developing good forestry and environmental practices, the environmental and
technical performance of Ecovas from industrial ash and sludge was analysed, and two
demonstration areas of adaptive forestry (Silviculture 4 Future) were established. The e-
globulus platform was strengthened with a module on installation in smallholdings, and the
manuals "Selection of Stakes" and "Regeneration by Eucalyptus Seed" were produced, as well
as the "Improvement Programme" leaflet.
Stronger paper with microfibrillar cellulose
In order to develop innovative and differentiating paper products, the R&D activity carried out at RAIZ over the last few years has
made it possible to observe the effect of incorporating microfibrillar cellulose (ten times thinner than a strand of hair) in increasing
the strength of paper sheets, by binding the fibres together. In 2022, the first industrial tests were performed for the incorporation
of this innovative material, obtained exclusively from eucalyptus fibre pulp produced by Navigator, into the production of packaging
paper. This initiative took place at the Setúbal Paper Mill and involved more than 20 employees from RAIZ, the Setúbal Industrial
Division, the Product Technical Division and the Project Division. It was possible to confirm the potential of microfibrillar cellulose in
the production of packaging paper with greater mechanical strength, and to obtain essential information for the work to be carried
out up to the end of 2025, under the From Fossil to Forest Agenda of the Recovery and Resilience Plan (PRR).
Co-creation for leveraging scientific knowledge
RAIZ boosted its co-creation dynamics – with a view to economically leveraging the knowledge generated in R&D – with the launch
of the first edition of the "Co-creation Programme for Leveraging Scientific and Technological Knowledge in a Circular and Digital
Forest-based Bioeconomy", a project under the INOV C+ programme, funded by the Centro Regional Coordination and
Development Commission, aimed at national startups and SMEs. The aim of this initiative is to bring in external players, with
complementary skills and synergies, and in 2022, seven projects were started within its scope.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 84
Award for new cellulose fibre biocomposite
An innovative biocomposite, made entirely of bioproducts of vegetable origin, including more than 40 percent cellulose fibre, was
awarded a prize in the Blue Sky Young Researchers and Innovation Award Europe 2022, held in November by CEPI - Confederation
of European Paper Industries. The R&D work was carried out at the University of Aveiro and at RAIZ, in the context of a PhD
programme by researcher Bruno Valente, and has already led to two patents. In the laboratory, a new approach was developed to
produce biocomposites consisting only of bioproducts: cellulose fibre, cellulose acetate butyrate, and a flax oil derivative
(plasticizer).
Inpactus gives rise to 37 new patents
The Inpactus project – the largest national R&D programme on the forest-based bioeconomy, led by Navigator – ended in 2022,
after almost five years of research, development and innovation work. The visible results are 37 new patents, four new
industrialised products, eight techno-economic feasibility studies for potential new businesses in bioproducts, 66 prototypes, 114
proofs of concept, and 147 scientific publications. This has involved more than 200 professionals, and the training of highly
specialised staff in the field of forest-based bioeconomy: 24 PhDs, 45 master's degrees and two International Invited Chairs.
In order to help encourage decarbonisation and a more sustainable, circular and competitive economy, the project was created as a
co-promotion between Navigator, RAIZ, the University of Coimbra and the University of Aveiro, but with the involvement of partner
institutions, such as the universities of Beira Interior and Minho, Instituto Superior Técnico, Universidade Nova de Lisboa, Instituto
Ibérico de Nanotecnologia, RISE Bioeconomy (from Sweden) and Fraunhofer (from Germany) R&D Centres and the spin-off
Satisfibre. Some of the results of this project are:
New paper products on the market
o gKraft (packaging)
o Amoos Aquactive (tissue)
o Amoos Naturally Soft (tissue)
o Amoos Air sense (tissue)
Techno-economic feasibility studies of new processes and bioproducts
o Bioethanol from biomass/primary sludge
o Fibre biocomposites with biopolymers
o Prebiotics from the white pulp
o Bioactive compounds from biomass
o Deconstructing biomass for sugar production
o Bacterial cellulose from biomass sugars and its applications
o Polyols from lignin
o Modified Lignin for Cement Applications
€14.6M
Total investment
of Inpactus,
between 2018 and 2022
37
patents
>200
researchers and technicians
involved in the project
66
prototypes
4
new industrialised
products
114
proofs of concept
8
Potential new bioproducts
or businesses in the techno-
economic evaluation phase
147
publications
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 85
Navigator leads From Fossil to Forest Agenda
The "From Fossil to Forest – Sustainable Packaging Products to Replace Fossil Plastic" Agenda is one of the five applications to the
Recovery and Resilience Plan (RRP) in which Navigator was involved in 2022. The Company is leading this consortium, with 27
national partners, including companies, universities and research centres, with the aim of developing, patenting, producing and
commercialising solutions for packaging with renewable and biodegradable forest-based materials.
The investment that Navigator and RAIZ have made in the project totals €93.2 million, out of a total budget of €118.6 million, and
is expected to create 102 new jobs and develop 17 new products.
There are six lines of action: pulp and brown paper for packaging, with a 20 percent reduction in wood consumption; optimisation
of the mechanical properties of paper strength; paper with sustainable barrier properties (to water and fat); development of
intelligent paper with the incorporation of sensors; moulded cellulose for single-use packaging; and biocomposites for application in
packaging produced by injection.
RAIZ in 2022
91
20
39
Employees
Patents submitted,
out of a total of 38 developed
Articles published in 2022
45
8
Representations in national
and international scientific
events
New products or businesses
developed
4.3. Mozambique
In 2022, Portucel Moçambique continued the harvesting and export of eucalyptus wood from
Manica province, activities that started in late 2020 and are intended to help position the
country as a leading player in the forestry sector. The Company dispatched three more ships in
2022, with a total of about 95,000 cubic meters of wood with controlled origin certification.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 86
In Zambezia province, where Portucel has a significant part of its forestry assets, the operation
focused on maintaining these assets, including the monitoring and management of areas
impacted by extreme weather phenomena, which occurred at the beginning of the year, as well
as the harvesting and sale of biomass, with about 18,000 cubic meters.
About 400 hectares of eucalyptus forest were planted in the two provinces and about 270
hectares were replanted.
The forest fire defence campaign once again returned good results, with a total of 32 hectares
affected by fire (0.23% of the forest estate), a reduction of 50% compared to the previous year
and a clear consolidation of the risk management matrix and activities initiated in the 2020
campaign.
In terms of job creation, the number of direct and indirect company employees reached 250 by
the end of 2022, plus more than a thousand full-time equivalent (FTE) jobs in the community.
The various activities carried out by Portucel in 2022 gave rise to the payment of taxes and
contributions to the Mozambican state of about US $650,000.
Social Development Programme
Portucel's Social Development Program (PDSP) is an integral part of the forestry project, and
has to date reached around seven thousand families. In 2022, activities in this area were
enhanced and, in parallel, we sought to deepen the indicators that have a more lasting impact,
as a way to improve monitoring, robustness and effectiveness. This programme of tools will
help empower families in food security, diversity, income generation and welfare.
Portucel's first investments in PDSP gave priority to food security and income generation. While
maintaining activities in these two areas, some of which have already been positively
implemented, the Company opened the way to intensifying well-being activities. Efforts were
focused on health and education, as well as access to clean water and environmental
awareness.
In this context, support for the construction of an operating theatre in Ile district hospital in
Zambezia province should be highlighted. Equally of note was the construction of four
classrooms at Munhinga Secondary School in Sussundenga district, Manica province. There was
also the opening and repairing of several water boreholes.
Health priorities
Health is one of the priorities of Portucel's Social Development Programme (PDSP), under which the company is investing about US
$150,000 in construction of the Operating Theatre at Ile District Hospital, in response to needs identified by the Zambezia
Provincial Government. This should be completed in 2023.
Equally noteworthy was the preventive medicine programme for the Company's Employees, designed to promote health and to
prevent and detect illnesses or injuries, implemented in the three provinces where we operate – Maputo, Manica and Zambezia.
With an investment of around US $25,000, the programme relies on the presence of a competent medical staff, providing a high-
quality, reliable and skilled service, and it obtained a voluntary participation rate of 91%.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 87
Environmental awareness
Portucel Moçambique's technical officers regularly carry out environmental awareness campaigns in the community. One of the
focuses of Portucel's awareness-raising activities is efficient land use, through conservation agriculture techniques, which helps to
improve productivity and reduce deforestation. In the year 2022 alone, 3,625 people were involved, of which 1,574 were women.
Altogether, 171 awareness-raising sessions have already been delivered, involving more than 5,300 people.
The PDSP in 2022
935 t
100 t
894,000
Improved seeds
Sweet potato slips
Cassava cuttings and seedlings
1,281
1,782
35
Beehives
Goats
Water boreholes sunk
36
40
587,000
Water boreholes repaired
Fish tanks built
Vaccines given to protect birds
against Newcastle disease
Involvement with Stakeholders
In 2022, the partnerships developed continued with the aim of strengthening the inclusion of
the various Stakeholders in the project, specifically communities, Government entities, civil
society organisations, non-governmental organisations, the media and academia, to address
issues of material concern for the parties involved, such as talent management, sustainable
forest management and climate change.
One of the examples of involvement with Stakeholders was the participation of Portucel in
revising Mozambique's Forestry Law, through specific contributions and participation in public
debates with Stakeholders. Another case was support for the GirlMove project, in which young
Mozambican women test and validate ideas for impactful solutions to the country's economic
and social challenges. Portucel participated, with various Stakeholders, in creating a
Biodiversity Conservation Room at Sussundenga Secondary School in Manica province, a pilot
project aimed at raising awareness and generating action in favour of biodiversity among the
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 88
younger generations. It also collaborated with the Combo project, an initiative of the Wildlife
Conservation Society (WCS), which invited Portucel Moçambique to be a case study in applying
the impact mitigation hierarchy on biodiversity. And it has joined the Circular Bioeconomy
Alliance project, an initiative by the King of the United Kingdom to develop a "living laboratory"
of how to involve communities and local governments in the restoration and rehabilitation of
natural forest areas, namely through the creation of new forest-related businesses, the
empowerment and awareness-raising of communities and the improvement of their livelihoods.
Debate with civil society
In October, Portucel Moçambique took part in a technical debate on the Socio-economic and Environmental Impacts of Developing
Forestry Plantations, as part of the ongoing revision of Mozambique's Forestry Law. Promoted by civil society organisations and
with the involvement of the government, cooperation partners, academia and the private sector, the event was a space to lay out
and debate the various points of view and contributions to the revision of the Forest Law. In its intervention, Portucel presented
the benefits and challenges in establishing its forestry plantations and shared its contributions to the revision of the said Forestry
Law.
Education for biodiversity
Portucel Moçambique supported the first Biodiversity Conservation Room, inaugurated at Sussundenga Secondary School, in
Manica province, in a project involving the Sussundenga District Administration, the Biofund Foundation and Chimanimani National
Park, amongst others. The aim is to build capacity for the development of environmental education activities in this school and
surrounding schools, as well as to promote improved knowledge about biodiversity. The inauguration took place on 11 July, and on
the occasion Portucel emphasized its commitment to defend biodiversity and the environment, values which are transversal in the
development of its project. The proximity of Portucel's operations to the school site has facilitated more frequent monitoring of this
project, namely with support for the creation of a school garden and other materials for the Conservation Room.
Prevention and mitigation of impacts
Portucel Moçambique was the subject of a case study under the Combo programme of the Wildlife Conservation Society (WCS)
Mozambique in order to analyse the measures taken to prevent and mitigate the impacts on biodiversity in its eucalyptus forest
plantation project in Zambezia province. The company has already implemented a comprehensive management plan that
addresses potential negative impacts and uses prevention as the main criterion, respecting residential areas, sacred and religious
sites, natural forests, protection and conservation areas, agricultural areas and others indicated by the communities. In keeping
with its policy of continuous improvement, the constructive dialogue between WCS/Combo and Portucel Moçambique has made it
possible to validate the work done so far and identify additional measures to be put in place.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 89
Portucel Moçambique project in figures
14,000
ha
2,348
ha
€2.5M
Area with stands of eucalyptus
Protection and Conservation
Areas
Investment in forestry in 2022
4,000
95%
US $14.5M
Land Transfer Agreements signed with
families and communities
Employees
of Mozambican nationality
Wages paid to seasonal and casual
workers, since 2013
30%
250
US $152M
of employees are women
Permanent, direct
and indirect jobs
Investment made until 2022
95,000
m
3
1.9 Mt
US $6.3M
Own wood harvested
in 2022 for export totalling 190,000 cubic
metres of wood exported
CO
2
captured
Taxes, fees and social contributions paid
to the Mozambican state
>US $7M
invested in the Social Development
Programme since 2015
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 90
4.4. Decarbonisation project
In 2022, The Navigator Company saw its work on decarbonisation recognised with the approval
of its greenhouse gas (GHG) emissions reduction targets by the Science Based Targets
initiative (SBTi), an internationally recognised global organisation for assessing companies'
initiatives towards a low carbon economy.
Based on the 2020 ratios, the Company commits to reduce Scope 1 and 2 greenhouse gas
emissions by 63% (referring to emissions released into the atmosphere as a direct result of its
operations, as well as indirect emissions from electricity acquired for company use) by 2035. A
commitment is also assumed to reduce scope 3 emissions (produced along the value chain,
upstream and downstream of the company's operations) by 37.5%.
It should be remembered that in its Carbon Neutral Roadmap, created in 2018, Navigator set
the ambition of reducing its emissions by 86% no later than 2035. The approval of the targets
by SBTi represents validation of what the Company's ambitions were, aligned with the
objectives set out in the Paris Agreement of not exceeding a 1.5°C temperature increase,
currently the most ambitious designation under the approval process by this organisation.
The completion of a new natural gas and hydrogen boiler, designed to replace the existing fuel
oil boilers at the Setúbal complex, represented another important step in Navigator's
decarbonisation strategy. In the future, besides making it possible to stop one of the natural
gas cogeneration groups (which represents around 25% of the Group's ETS emissions), it will
enable the gradual elimination of fuel oil from that industrial complex. This is because,
associated with the new boiler, a natural gas network was installed that will allow the
replacement of the fuel consumed in the recovery and biomass boilers in Setúbal.
Despite the efforts made over recent years, in 2022 Navigator recorded a 2.2% increase in its
scope 1 emissions in relation to 2021, due to a change in the fuel used in the lime kilns, which
switched to fuel oil in an attempt to minimise the impact of rising natural gas costs, but also
due to the extended maintenance of the Setúbal Biomass Boiler, which required increased
steam generation from natural gas.
The first step towards greener flights
In a move to combine innovation with sustainability, in 2022 The Navigator Company signed an agreement in principle with the
German company P2X Europe for the creation of a joint venture – P2X Portugal – whose aim is to develop a state-of-the-art
industrial unit to produce non-fossil fuels for the aviation sector: carbon-neutral synthetic jet-fuel (paraffin) produced from green
hydrogen and biogenic CO
2
.
Also known as eSAFs (e-Sustainable Aviation Fuels), these synthetic fuels are key to decarbonising the aviation sector, as they
represent the only viable option for decreasing the carbon emissions associated with large aircraft and long-haul flights.
This partnership combines the know-how of P2X Europe, a forerunner in the development of Power-to-Liquids (PtL) projects at
international level, with Navigator's industrial experience in managing biorefineries and sustainable forests.
The project takes advantage of Portugal's high competitiveness in the production of renewable energy (solar and wind) and
biogenic CO
2
generated by Navigator's biorefineries.
PtL-derived eSAF (eKerosene) generated from renewable electricity and biogenic CO
2
sources, such as P2X Portugal will produce,
is especially promising as it reduces carbon emissions by 90-100% compared to conventional aviation fuel.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 91
5. EUROPEAN TAXONOMY
5.1. European Environmental Taxonomy
Framework
The European Commission presented in 2019 the European Green Deal, a new growth strategy
with the aim of achieving climate neutrality by 2050, with a view to supporting economic
growth through more efficient means and the sustainable use of natural resources. Also in this
field, Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020
on Taxonomy frames the concept of sustainable investment. The Taxonomy works as a
standardized mandatory classification system that determines which economic activities are
considered “environmentally sustainable” within the European Union (EU). The aim is for
companies to direct investment flows towards activities considered sustainable, while
maintaining transparency in reporting and reducing the possibility of greenwashing.
According to the Taxonomy Regulation (Regulation 2020/852), for an economic activity to be
regarded as environmentally sustainable, it should:
1. Contribute to at least one of the environmental objectives identified in the Regulation
(Climate change mitigation, Climate change adaptation, The sustainable use and protection
of water and marine resources, Transition to a circular economy, Pollution prevention and
control, Protection and restoration of biodiversity and ecosystems);
2. Do no significant harm to any of the five remaining objectives; and
3. Comply with all minimum corporate safeguards around Human Rights, Corruption, Taxation
and Fair Competition.
In 2021, non-financial companies reported their taxonomy-eligible activities in relation to the
activities listed in the Climate Delegated Act (contribution to climate change mitigation and
adaptation objectives). The eligibility of economic activities, in terms of turnover, capital
expenditure (Capex) and operating expenditure (Opex), was reported on these activities. For
fiscal year 2022, in addition to eligible activities, non-financial companies must assess and
report on the alignment of these activities with the application of technical screening criteria
and minimum social safeguards.
In February 2022, the European Commission presented a Supplementary Delegated Act that
includes, under strict conditions, specific nuclear energy and gas activities in the list of
economic activities covered by the taxonomy. The draft was formally adopted on 9 March 2022
(Regulation 2022/1214) and published in the Official Journal on 15 July 2022. It is applicable
from 1 January 2023. According to the Supplementary Delegated Act the companies covered
must disclose additional information regarding their activities in these two sectors (nuclear
energy and natural gas).
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 92
In this context, the Group discloses, in its 2022 report, the results inherent to the analysis of
eligibility and alignment of its economic activities.
5.2. Eligibility analysis
In 2022 the Navigator Group analysed which of its economic activities were Taxonomy-eligible
under the Climate Delegated Act and the Supplementary Delegated Act. The following economic
activities have been identified:
Activity
Description
NACE
Codes
1.3 – Forest management
Navigator conducts vertically integrated forestry operations, promoting efficient and
responsible management of 105,733 hectares of forest in Portugal. This area is 100%
certified by the FSC and PEFC systems. Forestry activity in Mozambique is not included in
the EU Taxonomy report.
A21.00
4.8 – Electricity generation
from bioenergy
The Group owns two biomass thermoelectric power stations whose electricity is injected into
the national grid.
D35.11
4.20 – Cogeneration of heat/cool
and power from bioenergy
The Group owns three biomass cogeneration plants that simultaneously produce electricity
and thermal energy, the latter being fully used in the pulp and paper manufacturing
processes.
D35.11
and
D35.30
4.30 – High-efficiency
cogeneration of heat/cool and
power from fossil gaseous fuels*
The Group owns two natural gas combined cycle cogeneration plants (Figueira
da Foz and Setúbal).
D35.11
* Activity included in the Supplementary Delegated Act (Regulation 2022/1214)
Currently, the Taxonomy Delegated Act places greater emphasis on the most carbon-intensive
and green energy-intensive industries, which is why the Group's core activities, namely pulp
and paper production, are not covered by Annexes I and II of the Delegated Regulation, and
therefore cannot be encompassed in the Navigator Group's eligible activities. For this reason,
the indicators for taxonomy-eligible activities are low.
The Taxonomy Regulation is still under development and is expected to be expanded to the
remaining four environmental objectives with the publication of the next Delegated Act.
5.3. Alignment analysis
The assessment of alignment with Taxonomy was carried out by the Navigator Group based on
the best interpretation of the Taxonomy Regulation and the Climate Delegated Act and
available guidance from the European Commission.
During 2022, Navigator established an internal multidisciplinary working group to assess
whether its eligible activities met the alignment criteria set out in the taxonomy regulations.
For each economic activity, the Group has assessed the criteria of "Substantial contribution"
and "Do no significant harm" to determine the % alignment of its activities. Alignment has been
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 93
determined for the climate change mitigation objective. The analysis of compliance with
minimum safeguards was carried out at Group level.
From the analysis carried out on each of the technical screening criteria established for the
activities related to forest management and bioenergy and identified as taxonomy-eligible, it
was concluded that activities 1.3 (Forest management), 4.8 (Production of electricity from
bioenergy) and 4.20 (Cogeneration of heat/cold and electricity from bioenergy) are taxonomy-
eligible.
With regard to activity 4.30 – High-efficiency cogeneration of heat/cool and power from fossil
gaseous fuels, included in the Supplementary Delegated Act (Regulation 2022/1214), to date,
due to the criteria applicable to its classification as a transitional activity, namely at the level of
maximum emissions (gCO
2
/KWh), it has been considered not aligned with the taxonomy.
Nevertheless, it should be noted that:
• By 2035, the Group plans to halt natural gas cogeneration in Setúbal, with heat
currently produced by this asset being generated using biomass in High Efficiency
Renewable Cogeneration, as recommended in Navigator's Roadmap for Carbon
Neutrality; it should also be noted that the existing natural gas cogeneration plant in
Setúbal is a highly efficient facility which allows primary energy savings of more than
10% and its direct GHG emissions are less than 270 gCO
2
/kWh of energy produced, in
line with the criteria for this activity;
• The Figueira da Foz natural gas cogeneration plant is currently in backup, having
operated for only 114 hours in 2022. Since the end of 2020, with the construction of
the new biomass boiler, the steam needs of the Figueira da Foz industrial complex are
being met, in normal operation, by using renewable energy from biomass.
Minimum Safeguards
To ensure the alignment classification of eligible activities, compliance with Minimum Social
Safeguards is required. Taxonomy defines Minimum Safeguards as "alignment with the OECD
Guidelines for Multinational Enterprises, the UN Guiding Principles on Business and Human
Rights, including the principles and rights set out in the eight core conventions identified in the
International Labour Organisation Declaration on Fundamental Principles and Rights at Work
and the International Bill of Human Rights".
In October 2022, the European Commission's Sustainable Finance Platform published the Final
Report on Minimum Safeguards where the four areas that companies should address to ensure
compliance with Minimum Safeguards are identified: Human Rights, Corruption, Taxation and
Fair Competition.
Human Rights
The Navigator Group accepts the importance of respect for human and labour rights as an
integral part of the overall development of its business activities, through the adoption and
implementation of several internal instruments, namely the Human Rights Policy, the Code of
Ethics and Conduct, the Plan for Gender Equality, and the Code of Good Conduct to Prevent and
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 94
Combat Harassment in the Workplace. In the guiding documents of its responsible conduct,
and in the commitments assumed by the Group, a long list of Human Rights is recognised, such
as Freedom, equality and dignity; Non discrimination and coercion; Freedom of thought,
conscience and religion; Prohibition of slavery and child labour; Health and safety at work;
Recognition of freedom of association and collective bargaining; Equal opportunities and gender
equality.
In its Human Rights Policy, Navigator undertakes to promote measures aimed at identifying the
main impacts and potential risks of the company's activity in terms of human rights, namely
through suitable due diligence procedures, and to adopt appropriate measures to resolve and
remedy any situations of non-compliance.
In compliance with the principles set out in this Policy, Navigator also undertakes to encourage
the different levels of its value chains to observe human and labour rights, namely through
appropriate contractual rules that encourage the adoption of the necessary preventive and
corrective measures and the transparent treatment of information regarding possible violations
of human or labour rights, as well as the evaluation of the respective compliance in these
matters.
Also recognising the importance of the role of its Suppliers in respecting Human Rights, it has
implemented a Code of Conduct for Suppliers, complementing the Code of Ethics and Conduct,
which applies the principles followed by the Navigator Group to all its Suppliers.
In January 2023, the Navigator Company Group signed the "More and Better Jobs for Young
People Pact", reinforcing its commitment to the issue of Labour Rights. The Group commits,
until 2026, to hiring and retaining young workers, guaranteeing them specialised training and a
career development plan.
Corruption, Fair Competition and Taxation
In view of the international context in which it operates and the growing involvement of the
private sector in combating corruption and related offences, as well as the legal obligations to
which it is bound, The Navigator Company has implemented a Policy for the Prevention of
Corruption and Related Offences, through which it aims to establish a set of values and
standards of professional integrity to be shared by all its employees.
The underlying principles of this Policy, in addition to those already detailed in its Code of Ethics
and Conduct, are Navigator's total commitment to preventing corruption, the general and
across-the-board prohibition of acts of corruption and related infractions and the
implementation of a culture of ethics and integrity, both in the performance of their duties and
in their relations with third parties with whom Navigator has any business relationship, or other
third parties with whom Navigator's employees have dealings in the course of their duties.
Thus, Navigator is forbidden from corrupt practices and bribery, in all their active and passive
forms, through acts or omissions, or by creating or maintaining situations of favouritism or
irregularities, and from adopting conduct which may create expectations of favouritism in
dealings with the Group.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 95
With regard to competition, the Group undertakes to act in compliance with competition laws,
in accordance with market rules and criteria and promoting fair competition. These
commitments are reflected in internal instruments, namely in the Code of Ethics and Conduct
and in the Code of Conduct for Suppliers, which expressly state that its business and the
business of its suppliers must be conducted in accordance with the rules governing fair
competition and all laws on fair competition.
In tax matters, and within the scope of the business carried on by the companies that make up
the Navigator Company Group, a multiplicity of taxes, duties and contributions are payable
under the terms of the law. This makes the Group an important contributor to the State's
revenue, the fulfilment of social objectives and the sustainable and economic development of
the country.
The tax policy is defined according to the economic substance of its activity, aiming to ensure
full compliance by the entities that make up the Group with their tax obligations, in all
jurisdictions where they carry out their activity, seeking to maintain full compliance with the
spirit and letter of the applicable legislation. Aware of the role it plays in Portugal's business
fabric and in order to ensure transparency vis-à-vis its stakeholders, in recent years Navigator
has sought to determine its tax footprint, identifying and disclosing annually the volume of
taxes it pays and those it collects and manages on behalf of the State or third parties, thereby
contributing in this twofold manner to the State's tax revenues and the payments made to
public entities.
In 2022, the Group organised a series of training courses on Ethics and Integrity, aimed at all
its Employees, in order to reinforce the importance of the rules set out in the Code of Ethics
and Conduct and other internal regulations addressing the issues of Human Rights, Corruption
and Fair Competition.
It should also be noted that, in the year under review, and in the course of its activities eligible
for the taxonomy, the Navigator Group did not identify any relevant convictions in Human
Rights, Corruption, Taxation or Fair Competition.
Notwithstanding the foregoing, attention is drawn to the anti-dumping proceedings brought by
the Department of Commerce of the United States of America, in the context of an
investigation into alleged dumping practices on imports of paper in various formats from five
countries (Australia, Brazil, China, Indonesia and Portugal). At present, as a result of this
procedure, an anti-dumping duty is applied to exports from Portugal to the United States of
certain types of paper marketed by Navigator. These exports are related to an activity not
eligible for Taxonomy.
5.4. Disclosure of KPIs
The Delegated Act (Article 8) of the Taxonomy establishes a set of performance indicators
(KPIs) associated with environmentally sustainable economic activities that non-financial
companies must disclose: the proportion of their turnover (Turnover KPI), the proportion of
their capital expenditure (Capex KPI) and the proportion of their operating expenditure (Opex
KPI).
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 96
Accounting policies
As defined by the taxonomy, the amounts reported have been calculated in accordance with
Navigator's Consolidated Financial Statements for the year ended 31 December 2022, which
have been prepared in accordance with International Financial Reporting Standards (IFRS),
effective 1 January 2022 and as adopted by the European Union.
The European Taxonomy requires companies to disclose how they have avoided duplication in
the consideration of eligible economic activities (numerator), i.e., in determining turnover,
capital expenditure and operating expenses. The Navigator Group calculated the eligible
expenses based on its financial and cost accounting and ensured that the cost elements were
considered only once in the calculation of the indicators.
Turnover
Turnover was based on the same accounting principles applicable to revenue in accordance
with International Financial Reporting Standards (IFRS), i.e., considering sales and services
rendered as part of the Navigator Group's normal activities. The total turnover (denominator of
the calculation of the ratio of taxonomy-eligible activities) thus corresponds to the revenue
reported in the Consolidated Financial Statements (Note 2.1).
Taxonomy-aligned turnover (numerator) corresponds to cogeneration and electricity production
from bioenergy. The production resulting from the forest management activity is mainly used in
the Group's internal operations and, as such, is not considered for the purposes of this
indicator. The natural gas cogeneration activity was considered to be non-aligned.
CapEx
The amount shown as total CapEx in the denominator of the calculation of the ratio of
taxonomy-eligible activities corresponds to the sum of acquisitions of tangible assets, intangible
assets (excluding CO
2
licenses) and right-of-use assets made in 2022, disclosed in Notes 3.2,
3.3 and 3.6 of Navigator's Consolidated Financial Statements. For the purposes of calculating
this ratio, additions of intangible assets related to the acquisition of CO
2
licenses were excluded,
since this is not actually an acquisition of licenses, but of licenses granted to the Group, and its
classification as intangible assets results from the accounting principle adopted by the Group.
In 2022, no additions were recorded to the Group's investment properties.
The CapEx values classified as taxonomy-eligible, whether they are considered taxonomy-
aligned or not taxonomy-aligned, correspond to investments in assets or processes associated
with the respective activities, namely:
Investments to support forest management activities, namely the acquisition of forest
land;
Investments associated with Biomass Power Plants in Aveiro and Setúbal;
Investments associated with biomass cogeneration plants;
New biomass boiler at the Figueira da Foz industrial complex; and
Investments associated with the Group's environmental and decarbonisation plan.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 97
OpEx
The total OpEx shown in the denominator of the aligned activities ratio calculation corresponds
to the following expenses determined on the basis of the Consolidated Financial Statements as
at 31 December 2022, which are included in Note 2.3 - Operating Expenses and Losses:
Research and development costs not capitalised;
Forestry costs not capitalised;
Expenditure on industrial cleaning and waste treatment;
Maintenance and repair costs;
Costs with short-term leases not capitalised; and
Other expenditure directly related to the maintenance of tangible assets or investment
property.
The OpEx figures associated with eligible Group activities (whether or not in line with the
taxonomy) correspond essentially to non-capitalised forestry costs, research and development
costs associated with forests, non-capitalised costs necessary to operate the cogeneration and
biomass power plants and other costs associated with technologies and products dedicated to
reducing GHG emissions.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 98
Proportion of Turnover from products or services associated with Taxonomy-aligned economic activities
(including activities associated with fossil gas)
Substantial contribution
criteria
"Do no significant harm"
criteria (DNSH)
Economic activities
NACE Code
Absolute turnover
Proportion of
turnover
Climate change
mitigation
Climate change
adaptation
Water and marine
resources
Circular economy
Pollution
prevention and
control
Biodiversity and
ecosystems
Climate change
mitigation
Climate change
adaptation
Water and marine
resources
Circular economy
Pollution
prevention and
control
Biodiversity and
ecosystems
Minimum
Safeguards
Taxonomy-
aligned
proportion of
Turnover,
year 2022
Category
(enabling
activity)
Category
(transitional
activity)
euros
%
%
%
%
%
%
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
T
A. Taxonomy-eligible activities
A.1. Environmentally sustainable activities (Taxonomy-aligned)
4.8. Electricity generation
from bioenergy
35.11
22,133,167
1%
100%
0%
Y
Y
Y
Y
Y
1%
4.20. Cogeneration of heat/cool and power from
bioenergy
35.11
155,708,440
6%
100%
0%
Y
Y
Y
Y
Y
6%
Turnover of environmentally sustainable
activities (Taxonomy-aligned) (A1)
177,841,607
7%
7%
A.2. Taxonomy-eligible but not environmentally sustainable activities
(not Taxonomy-aligned activities) (A2)
4.30 High-efficiency cogeneration of heat/cool
and power from fossil gaseous fuels
35.11
75,874,257
3%
Turnover of Taxonomy-eligible but not
environmentally sustainable activities (not
Taxonomy-aligned activities) (A2)
75,874,257
3%
Total (A.1 + A.2)
253,715,864
10%
B. Taxonomy non-eligible activities
Turnover of Taxonomy non-eligible
activities (B)
2,210,908,827
90%
Total (A + B)
2,464,624,691
100%
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 99
Proportion of CapEx from products or services associated with Taxonomy-aligned economic activities
(including activities associated with fossil gas)
Substantial contribution
critera
"Do no significant harm"
criteria (DNSH)
Economic activities
NACE Code
Absolute CapEx
Proportion of
CapEx
Climate change
mitigation
Climate change
adaptation
Water and marine
resources
Circular economy
Pollution
prevention and
control
Biodiversity and
ecosystems
Climate change
mitigation
Climate change
adaptation
Water and marine
resources
Circular economy
Pollution
prevention and
control
Biodiversity and
ecosystems
Minimum
Safeguards
Taxonomy-
aligned
proportion
of CapEx,
year 2022
Category
(enabling
activity)
Category
(transitional
activity)
euros
%
%
%
%
%
%
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
T
A. Taxonomy-eligible activities
A.1. Environmentally sustainable activities
(Taxonomy-aligned)
1.3 Forest management
21.00
11,729,272
9%
100%
0%
Y
Y
Y
Y
Y
Y
9%
4.8. Electricity generation
from bioenergy
35.11
2,296,112
2%
100%
0%
Y
Y
Y
Y
Y
2%
4.20. Cogeneration of heat/cool and power from
bioenergy
35.11
19,182,365
15%
100%
0%
Y
Y
Y
Y
Y
15%
CapEx of environmentally sustainable
activities (Taxonomy-aligned) (A1)
33,207,749
26%
26%
A.2. Taxonomy-eligible but not environmentally sustainable activities
(not Taxonomy-aligned activities) (A2)
4.30 High-efficiency cogeneration of heat/cool
and power from fossil gaseous fuels
35.11
4,703,320
4%
CapEx of Taxonomy-eligible but not
environmentally sustainable activities (not
Taxonomy-aligned activities) (A2)
4,703,320
4%
Total (A.1 + A.2)
37,911,069
30%
B. Taxonomy non-eligible activities
CapEx of Taxonomy non-eligible activities
(B)
89,086,117
70%
Total (A + B)
126,997,186
100%
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 100
Proportion of OpEx from products or services associated with Taxonomy-aligned economic activities
(including activities associated with fossil gas)
Substantial contribution
criteria
"Do no significant harm"
criteria (DNSH)
Economic activities
NACE Code
Absolute OpEx
Proportion of OpEx
Climate change
mitigation
Climate change
adaptation
Water and marine
resources
Circular economy
Pollution
prevention and
control
Biodiversity and
ecosystems
Climate change
mitigation
Climate change
adaptation
Water and marine
resources
Circular economy
Pollution
prevention and
control
Biodiversity and
ecosystems
Minimum
Safeguards
Taxonomy
-aligned
proportion
of OpEx,
year 2022
Category
(enabling
activity)
Category
(transitional
activity)
euros
%
%
%
%
%
%
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
T
A. Taxonomy-eligible activities
A.1. Environmentally sustainable activities (Taxonomy-aligned)
1.3 Forest management
21.00
6,253,319
7%
100%
0%
Y
Y
Y
Y
Y
Y
7%
4.8. Electricity generation
from bioenergy
35.11
2,354,622
2%
100%
0%
Y
Y
Y
Y
Y
2%
4.20. Cogeneration of heat/cool and
power from bioenergy
35.11
2,846,289
3%
100%
0%
Y
Y
Y
Y
Y
3%
OpEx of environmentally
sustainable activities (Taxonomy-
aligned) (A1)
11,454,230
12%
12%
A.2. Taxonomy-eligible but not environmentally sustainable activities
(not Taxonomy-aligned activities) (A2)
4.30 High-efficiency cogeneration of
heat/cool and power from fossil
gaseous fuels
35.11
202,297
0%
OpEx of Taxonomy-eligible but not
environmentally sustainable
activities (not Taxonomy-aligned
activities) (A2)
202,297
0%
Total (A.1 + A.2)
11,656,527
12%
B. Taxonomy non-eligible activities
OpEx of Taxonomy non-eligible
activities (B)
87,738,622
88%
Total (A + B)
99,395,148
100%
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 101
Templates according to Regulation 2022/1214
Table 1: Fossil gas related activities
Line
Fossil gas related activities
1.
The company carries out, funds or has exposures to construction or operation of electricity generation facilities that produce
electricity using fossil gaseous fuels.
NO
2.
The company carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cold and
power generation facilities using fossil gaseous fuels.
YES
3.
The company carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities
that produce heat/cool using fossil gaseous fuels.
NO
Table 2: Taxonomy-eligible but not taxonomy-aligned economic activities – Turnover
Line
Economic activities
Amount and proportion
(information should be presented in monetary
amounts and percentages)
CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA)
Amount
%
Amount
%
Amount
%
1.
Amount and proportion of taxonomy-eligible but not
taxonomy-aligned economic activity referred to in section
4.30 of Annexes I and II to Delegated Regulation
2021/2139 in the turnover denominator
€75,874,257
3%
€75,874,257
3%
€0
0%
2.
Amount and proportion of other taxonomy-eligible but not
taxonomy-aligned economic activities not referred to in
the line above in the turnover denominator
€0
0%
€0
0%
€0
0%
3.
Total amount and proportion of taxonomy-eligible but not
taxonomy-aligned economic activities in the turnover
denominator
€75,874,257
3%
€75,874,257
3%
€0
0%
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 102
Table 3: Taxonomy-eligible but not taxonomy-aligned economic activities – CapEx
Line
Economic activities
Amount and proportion
(information should be presented in monetary
amounts and percentages)
CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA)
Amount
%
Amount
%
Amount
%
1.
Amount and proportion of taxonomy-eligible but not
taxonomy-aligned economic activity referred to in section
4.30 of Annexes I and II to Delegated Regulation
2021/2139 in the CapEx denominator
€4,703,320
4%
€4,703,320
4%
€0
0%
2.
Amount and proportion of other taxonomy-eligible but not
taxonomy-aligned economic activities not referred to in the
line above in the CapEx denominator
€0
0%
€0
0%
€0
0%
3.
Total amount and proportion of taxonomy-eligible but not
taxonomy-aligned economic activities in the CapEx
denominator
€4,703,320
4%
€4,703,320
4%
€0
0%
Table 4: Taxonomy-eligible but not taxonomy-aligned economic activities – OpEx
Line
Economic activities
Amount and proportion
(information should be presented in monetary
amounts and percentages)
CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA)
Amount
%
Amount
%
Amount
%
1.
Amount and proportion of taxonomy-eligible but not
taxonomy-aligned economic activity referred to in section
4.30 of Annexes I and II to Delegated Regulation 2021/2139
in the OpEx denominator
€202,297
0%
€202,297
0%
€0
0%
2.
Amount and proportion of other taxonomy-eligible but not
taxonomy-aligned economic activities not referred to in the
line above in the OpEx denominator
€0
0%
€0
0%
€0
0%
3.
Total amount and proportion of taxonomy-eligible but not
taxonomy-aligned economic activities in the OpEx
denominator
€202,297
0%
€202,297
0%
€0
0%
The remaining models were considered not applicable to the Navigator Group.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 103
5.5. Next steps in implementation
of taxonomy
As part of the Group's strategy and its sustainability objectives, efforts are being made to
continuously implement the European environmental taxonomy, namely with the development
of the following activities:
1. Strengthening the implementation of the climate risk analysis (Appendix A of the
Delegated Climate Act – Annex I) in line with the development of work under the
recommendations of the Task Force on Climate Related Financial Disclosures (TCFD);
2. Follow-up to the publication of the criteria associated with the remaining environmental
objectives of the Taxonomy, namely transition to a circular economy, the sustainable
use and protection of water and marine resources, pollution prevention and control and
protection and restoration of biodiversity and ecosystems.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 104
6. PROPOSED APPROPRIATION OF
PROFIT OR TREATMENT OF LOSS
Considering that:
a) The net profit in the individual financial statements amounted to €392,537,070,
calculated according to the IFRS;
The Board of Directors proposes that the net profit of €392,537,070 calculated under IFRS,
not yet distributed, be applied as follows:
Dividends to outstanding shares ........................................................... .. €199,984,679
(€0.2812 per share)
Retained Earnings .............................................................................. €162,552,391
Employee profit-sharing for the year up to ............................................... €30,000,000
(already assumed in the financial statements)
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 105
7. DECLARATION REFERRED TO
BY ARTICLE 29-G(1)(C) OF THE
PORTUGUESE SECURITIES CODE
Article 29-G(1)(c) of the Portuguese Securities Code provides that each of the persons
responsible for the issuer, whose names and functions must be clearly indicated, must make a
number of declarations set out therein. In the case of The Navigator Company a uniform
statement was adopted, which reads as follows:
"I hereby declare, under the terms and for the purposes of Article 29-G(1)(c) of the Portuguese
Securities Code that, to the best of my knowledge, the management report, annual accounts,
legal certification of accounts and other reporting documents required by law or regulation, even
if not submitted to the general meeting of The Navigator Company, S.A., all relating to the
financial year 2022, were drawn up in accordance with the applicable accounting standards, and
provide a true and fair view of the assets and liabilities, the financial situation and the results of
that company and of the companies included in the consolidation perimeter, and that the
management report faithfully sets out the business evolution, performance and position of the
company and of the companies included in the consolidation perimeter, containing a description
of the main risks and uncertainties which they face."
Under the terms of the cited legal provision, the following is a list of the names of the
undersigned persons and their duties:
Ricardo Miguel dos Santos Pacheco Pires Chairman of the Board of Directors
António José Pereira Redondo Chief Executive Officer
Adriano Augusto da Silva Silveira Executive Director
João Paulo Araújo Oliveira Executive Director
João Paulo Cabete Gonçalves Lé Executive Director
José Fernando Morais Carreira de Araújo Executive Director
Nuno Miguel Moreira de Araújo dos Santos Executive Director
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 106
Manuel Soares Ferreira Regalado Non-Executive Director
Maria Teresa Aliu Presas Non-Executive Director
Mariana Rita A. Marques dos Santos Non-Executive Director
Sandra Maria Soares Santos Non-Executive Director
Vítor Manuel Galvão Rocha Novais Gonçalves Non-Executive Director
Vitor Paulo Paranhos Pereira Non-Executive Director
José Manuel Oliveira Vitorino Chairman of the Supervisory Board
Gonçalo Nuno Palha Gaio Picão Caldeira Full Member of the Supervisory Board
Maria da Graça da Cunha Gonçalves Full Member of the Supervisory Board
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 107
8. ALIGNMENT WITH TCFD
(TASK FORCE ON CLIMATE RELATED
FINANCIAL DISCLOSURES)
RECOMMENDATIONS
8.1. Framework
Climate change is perhaps the most structural challenge facing modern society, since it has a
transversal impact on society, the economy and natural resources. There is a growing interest
among stakeholders to consult consistent, comparable, reliable and clear information related to
climate risks and opportunities, and their financial impact on an organisation.
In 2015, the Financial Stability Board (FSB) established the Task Force on Climate-Related
Financial Disclosures (TCFD) with the objective of promoting transparency and supporting
financial entities and investors to understand climate risks, opportunities and impacts through
the development of a set of clear and consistent Climate Change-related disclosure
recommendations.
The Navigator Company is aligning its reporting with the TCFD
recommendations, which are organised around four pillars, representing
the core elements of how organisations operate: Governance, Strategy,
Risk Management and Metrics and Objectives.
To this end, the Group discloses, for the first time, and on a voluntary
basis, information regarding its strategic approach and corporate climate
risk management processes, in accordance with the TCFD
recommendations, assessing the impacts arising from climate change
and presenting adaptation responses.
Governance
Strategy
Risk
Management
Metrics
and Goals
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 108
8.2. Our Journey
"We play an active role in climate action, promoting a
circular and low-carbon economy, based on research,
technology and development. We have invested in
bringing forward international targets for carbon
neutrality through our Decarbonisation Roadmap and set
emissions reduction targets based on the latest climate
science and aligned with 1.5°C (for scopes 1+2),
positioning us at the forefront of companies actively
working towards climate change mitigation and
adaptation."
The following time line summarises how the management of climate issues has been integrated
into the Group's strategy and operations over the years.
Governance
Disclosure of the governance approach to climate-related
risks and opportunities.
Risk management
Disclosure of the processes implemented to identify,
assess and manage climate-related risks.
Strategy
Disclosure of the actual and potential impacts of climate
risks and opportunities on business, strategy and financial
planning.
Metrics and Goals
Disclosure of metrics and objectives defined to assess and
manage relevant climate-related risks and opportunities.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 109
2005
Publication of the 1st
Sustainability Report:
"The Road to
Sustainability"
2017
Submission and publication
of the first response
to CDP Climate Change
2021
8
Complete inventory of GHG
emissions and SBTi
membership
2023
Publication of the first
report aligned with TCFD
2016
Approval of the corporate
energy efficiency
programme
2020
Launch of Agenda 2030
9
and the Carbon Neutrality
Roadmap at Navigator
2022
Validation of GHG emissions
reduction targets, scopes 1,
2 and 3, by SBTi
2035
Emissions reduction
targets for scopes 1,
2 and 3 (and
temperature
increase limit of
1.5ºC)
8.3. Governance
Reporting Recommendation
Additional reporting location
a) Describe the board's oversight of climate-related
risks and opportunities.
Sustainability Report
Chapter 4.1
Corporate Governance Report
Part I C. III
b) Describe management's role in assessing and
managing climate-related risks and opportunities
Sustainability Report
Chapter 4.1
Corporate Governance Report
Part I C. III
The Navigator Company Group, as an industrial group, manager of forestry holdings and
producer of renewable electricity, has climate change at the heart of its concerns, and therefore
has a governance structure supported by several bodies with well-defined functions in relation
to managing climate-related impacts.
Oversight of Climate-related Risks and Opportunities
The Board of Directors (BD) is responsible for the approval of climate-related issues - which
includes the approval of plans and macro measures within the scope of climate action - and
delegates these powers to the Executive Committee (EC). The EC, in turn, has the deliberative
power on climate-related issues within the scope of macro decisions approved by the BD and is
8
The GHG emissions were calculated according to the GHG Protocol.
9
Agenda 2030 available at: http://www.thenavigatorcompany.com/agenda2030/conteudos.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 110
supported in its decisions by the Sustainability Department, the Risk Management Department
and by two committees: the Sustainability Forum and the Environmental Board.
At the EC, the CEO and two other Executive Directors, responsible for Sustainability, Forestry,
Wood Supply and Research and Development and Environment, oversee climate-related issues
within the scope of their direct responsibilities.
Assessment and Management of Climate-related Risks and Opportunities
Climate-related issues play a fundamental role in the Navigator Group's strategic planning and
business continuity, and are therefore a regular topic on the agenda of the Board of Directors
and the EC, as well as of the Sustainability Forum and the Environmental Board.
The Board of Directors is involved in climate issues through strategic – the implementation of
which it delegates to the EC – and investment decisions in industrial structures that enable the
reduction of greenhouse gas emissions, energy efficiency plans, the monitoring of the
Decarbonisation Plan, projects to align the plans with science-based initiatives (such as joining
SBTi) or through the disclosure of the financial impact of climate risks (implementation of TCFD
recommendations), the promotion and encouragement of capacity building of the organisation
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 111
through training on the topic of climate, among others. As Navigator's risk assessment,
including climate risk, is a subject of great importance to the Group, updates are regularly
submitted to the Board of Directors and the Executive Committee for discussion and approval.
Risk Management is dealt with and developed in the Group's Corporate Governance Report. This
management is the responsibility of the Risk Management Department, which has a role of
monitoring and controlling the main risks, where climate risks are included, through a
systematic and structured approach that involves all the operational areas and identifies the
control activities inherent to each situation, an activity that is ensured by internal audits, as
illustrated in the following diagram.
The EC meets on a weekly basis, regularly addressing ESG, Climate and the impact of climate
change on its activities. Climate is one of the strategic pillars of Navigator's Agenda 2030 and
therefore climate commitments, objectives and targets are regularly monitored by the EC and
submitted to it for consideration. The commitments and targets that are part of the 2030
Roadmap of the Group's Responsible Business Agenda are also reviewed annually by the
different areas of activity, and submitted to the EC for approval through the Sustainability
Report, by the Director of Sustainability.
Furthermore, within the remuneration policy, monetary incentives for EC members are
established, promoting the management of climate-related issues. These incentives are
dependent on Navigator's environmental performance, in order to achieve the defined targets
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 112
and goals. For this reason, the topic of remuneration policies will be addressed in more detail in
the Metrics and Objectives pillar.
Set up in 2015, the main mission of Navigator's Sustainability Forum is to foster dialogue and
cooperation with the main stakeholders on relevant sustainability issues, including climate
change, so as to ensure that these issues are properly managed, by supporting and advising the
Board of Directors and the Executive Committee on Navigator's Sustainability Agenda.
The Sustainability Forum is chaired by the Group's CEO and its members include the other
members of the EC and a number of external members, among whom is Professor Filipe Duarte
Santos, Chairman of the National Council for the Environment and Sustainable Development
and an international expert in climate change.
In general, the Sustainability Forum meets twice a year, with one session set aside for the
permanent members and another extended to various stakeholders, creating platforms for
understanding and cooperation between them and the Navigator Group. The impacts of climate
change integrate, either directly or indirectly, the agendas of the Sustainability Forum meetings.
In 2022, the internal session of the Forum promoted the debate on "Corporate Performance in
ESG Criteria" and the external session was dedicated to the theme "Bioeconomy: The Path to a
Sustainable Future", highlighting the role of the Bioeconomy as an economic model that
envisages replacing the use of fossil resources with renewable, bio-based resources,
contributing to a low-carbon economy [http://thenavigatorcompany.com/forum-
sustentabilidade-2022/].
In view of the specific nature of the Navigator Group's business and the environmental concerns
inherent to it, the Board of Directors set up an Environmental Board in 2008 to monitor and
issue its opinion on environmental aspects of the Company's operations and to make
recommendations on the environmental impact of its main undertakings, paying particular
attention to legal requirements, licensing conditions and the Navigator Group's policy in this
area.
The Environmental Board has four members: Maria da Conceição Cunha (Chair), Ana Isabel
Miranda, Maria Margarida Tomé and Joaquim Poças Martins, all of them independent academics
with recognised technical and scientific expertise, particularly in the most important areas of
environmental concern for the Navigator Group's operations as they exist today.
The Environmental Board is in direct contact with the Navigator Group’s business world through
meetings held at its industrial facilities, main forest plantations and its research institute, RAIZ.
During 2022, a meeting of the Environmental Council was held at which the following issues
were addressed:
1. Environmental Status – Overview of Compliance with Legal Obligations;
2. Energy situation and impact on Navigator;
3. Recovery and Resilience Plan (PRR), applications under the mobilising and
decarbonisation agendas;
4. PRUA Project: reduction of water use.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 113
In the year 2022, a training programme was designed covering the various ESG pillars,
including the main climate-related topics, such as the TCFD recommendations. This programme
started in 2023 and covers, in a first phase, the EC members and some employees from key
areas of the Group. Throughout 2023, it is planned to extend this training to the other directors
and, subsequently, to all the Group's employees. The objective of this training is to increase
knowledge and capacity building on sustainability issues and, in particular, on the issue of
climate change.
8.4. Strategy
Reporting Recommendation
Additional reporting location
a) Describe the climate-related risks and opportunities the organisation
has identified over the short, medium and long term.
Sustainability Report
Chapters 3.1 and 4.1
Corporate Governance Report
Part I C. III
Annual Report
Chapter 2.11
b) Describe the Impacts of Climate related risks and opportunities
on the organisation’s business, strategy and financial planning.
Sustainability Report
Chapter 3.1
Corporate Governance Report
Part I C. III
c) Describe the resilience of the organisation’s strategy, taking into
consideration different climate-related scenarios, including a 2ºC
or lower scenario.
Sustainability Report
Chapters 3.1 and 3.2
Corporate Governance Report
Part I C. III
One of the most important aspects of building a resilient and future-proof business is defining a
robust strategy that takes a long-term approach to climate risk management. Successful
implementation of a TCFD-compliant strategy can offer several benefits for Navigator, including:
Transparency in the disclosure of information on climate risks and the actions taken to
manage them, promoting clear and consistent reporting in order to increase investor
confidence;
Improved risk management, with the identification and monitoring of climate risks, as a
support for decision making and implementation of measures to minimise its exposure to
the identified risks and associated impacts;
Business opportunities, by anticipating and responding to climate trends, allowing new
business opportunities to be identified and Navigator's competitiveness to be increased;
Protection of assets, in the implementation of responsible climate practices and risk
management, ensuring business continuity;
Reputation, contributing to the Group's leadership on climate issues by meeting the
expectations and needs of its stakeholders, including investors and customers committed
to climate issues.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 114
Climate-related Risks and Opportunities
Navigator constantly analyses the business context, seeing its potential impact on the objectives
defined for the Group. In addition to the common objectives related to business profitability, the
Group is also committed to contributing to achieving the targets of the United Nations
Sustainable Development Goals (SDGs). The 2030 Agenda includes those that the Group
considers a priority insofar as it can make a greater and more direct contribution: SDG 8 Decent
work and economic growth; SDG 9 Industry, Innovation and Infrastructure; SDG 12
Responsible consumption and production; SDG 13 Climate action and SDG 15 Life on land.
Navigator recognises the importance of disclosing the real and potential impacts of climate-
related risks and opportunities on its Business, Strategy and Financial Planning, in order to
maximise positive and minimise negative impacts. Through a clear understanding of climate
opportunities and risks, the Group will be able to develop solutions and products that support its
climate ambitions.
In 2022, a double materiality exercise was conducted to ensure alignment with the Corporate
Sustainability Reporting Directive (CSRD) and to identify Navigator's external impacts on ESG
issues, with a focus on climate change and the risks and opportunities this poses to the Group's
value creation.
The material topic "Climate Change and CO
2
Fixation" was considered a strategic priority for
Navigator, and was selected by its internal and external stakeholders as the most relevant in
terms of impact materiality (from the inside-out perspective, of the impacts of Navigator's
activities on the outside) and financial materiality (from the outside-in perspective, of how
external risks and opportunities may affect value creation).
The risks associated with climate change are also reflected in the Group's accounting principles
and financial reporting. The impact of climate change is considered in the estimates of future
cash flows used in the goodwill impairment assessment, as referred to in note 3.1 of the
Consolidated Financial Statements. Climate change is, as mentioned in note 3.8, also included
as a factor affecting the assumptions used in the valuation of the Group's biological assets. The
Group's accounting principles also reflect the impact of climate change considerations in the
evaluation of the estimated economic useful lives of Property, Plant and Equipment, as
mentioned in note 3.7.
Taking an active role in describing climate-related risks and opportunities and following the
TCFD recommendations, in this report, the Navigator Group has identified and assessed the
main climate-related risks and opportunities, describing their potential impact on the
organisation in the short, medium and long term, in order to ensure the integration of the TCFD
recommendations into the corporate risk management strategy and processes. In this exercise
the following time horizons were considered: short term (0 to 2 years), medium term (2 to 5
years) and long term (5 to 20 years).
Climate-related risks fall into two main categories: risks inherent to the transition to a low-
carbon economy (transition risks) and risks inherent to the physical impacts of climate change
(physical risks).
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 115
Transition Risks
In order to respond to climate change mitigation and adaptation requirements, the transition to
a low-carbon economy may entail policy, regulatory, technological and market changes. These
risks may pose varying levels of financial and reputational risk to the Company depending on
the nature, speed and focus of these political, regulatory, technological and market changes.
Within the category of transition risks, the TCFD distinguishes four types of risks: (i) policy and
legal risks, (ii) technological, (iii) market, and (iv) reputational risks.
Physical Risks
These risks can affect infrastructure, production and the value chain, the availability of
natural resources and human health. Weather-related physical hazards include:
Storms and extreme weather events: floods, forest fires, windstorms and hurricanes;
Change in mean sea level: sea level rise and coastal erosion;
Water scarcity: drought, water scarcity and changes in water availability;
Changes in temperatures: extreme heat waves and discontinuities in seasonal weather
patterns;
Biodiversity loss and ecosystem change: changes in plant and animal populations, and
ecosystem collapse.
Within the category of physical hazards, the TCFD recognises two types of climate hazards:
chronic hazard and acute hazard. Chronic Risk is a risk that evolves slowly over time and is
related to long-term trends in climate change, such as rising temperatures and water scarcity.
This type of risk could affect the Company's business strategy in the long term. Acute Risk is a
risk of a single, unexpected weather event, such as storms, floods or forest fires. This type of
risk may affect the immediate operation of the Company and its ability to continue to operate.
Following the TCFD recommendations related to the Strategy pillar, Navigator carried out a first
identification of climate risks and opportunities, disclosing the potential short-, medium- and
long-term impacts and presenting information on how these risks are managed and how they
are incorporated into its Business strategy.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 116
Transition Risks
Category
Risk Description
Potential Impact
Time
Horizon
Policy and legal
New and more demanding environmental
and climate regulation due to advancing
maturity of global targets
Increased capital expenditure and investments
required for compliance with environmental,
climate and energy transition regulations.
Increase in logistics costs, due to the regulation
promoting decarbonisation in transport (ETS).
Adverse effect on business due to the approval of
regulations that limit or negatively discriminate
against production forests for obtaining timber
raw materials, as opposed to other land uses,
without taking into account good management
criteria or economic and environmental value.
Increased costs associated with complying with
regulations requiring the rehabilitation of forest
areas and improving native forest management as
national actions to combat climate change.
Reduced raw material production and consequent
increase in procurement costs as a result of legal
restrictions on forest production.
Short term
Reduction in the availability of licences
under the EU-ETS system
Increased costs of GHG emissions for the pulp and
paper industry.
Short term
Biomass no longer being considered a
sustainable alternative to fossil fuels
Increase in the area covered by "green energy"
facilities (e.g., solar panels) and the distribution
network (e.g., power lines) with consequent
reduced availability of soil for forestry production.
Medium term
Market
Increased demand for forest products and
bioenergy, as a consequence of global
population growth, may exceed the
production of wood materials and
compromise supply
Increase in cost of raw materials (e.g. wood),
energy and water consumption.
Increased requirements associated with
production (e.g. wastewater quality, solid waste,
associated emissions, among others).
Medium term
Increased cost of raw materials
Increase in capital expenditure directly related to
operations or, indirectly, through increased prices
of transport, energy and other inputs/raw
materials required in the production of paper, pulp
and other forest-based products.
Medium term
Shifts in consumer preferences
Need to adapt the portfolio to meet consumer
expectations and demand.
Reduced revenue associated with consumer
demand for other solutions on the market that
replace paper.
Medium term
Reputation
Pressure from society to restrict/impose
limits on forest production areas to the
detriment of non-timber/conservation
forests
Adverse effect on business due to the
implementation of restrictions for forest
production areas to the detriment of non-
timber/conservation forests.
Medium term
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 117
Physical Risks
Category
Climate
Component
Risk Description
Potential Impact
Time
Horizon
Acute
Temperature
Increased severity and
frequency of occurrence of
forest fires
Reduced production capacity due to loss or damage
to forests.
Failure in the supply of wood.
Loss of biodiversity in forest areas.
Reduced revenue due to reduced production and
sales.
Increased forestry costs to replant damaged
forests.
Short term
Water resources
Drought conditions as a
result of water scarcity
where the Group's industrial
complexes are located
Restrictions to the collection and use of water, as a
result of the reduction in rainfall, paralysing the
operations of the Group's industrial complexes and
resulting in production losses and, consequently,
reduced revenue.
Medium term
Wind
Water resources
Increased incidence and
severity of extreme weather
events such as cyclones or
floods
Reduction in production capacity and revenue
obtained, due to losses in plantations and forestry
production, disruption in supply chains and
production operations and transport difficulties.
Damage and/or loss to existing facilities and assets
and associated costs.
Long term
Chronic
Water resources
Reduction in the volume and
changes in the quality of
water sources for pulp mills
Reduction in quality and production due to
restrictions on the abstraction and use of water
that may impact the operations of the Group's
industrial complexes.
Need for investment in research in the field of
adaptation to different chemical compositions in
the water sources of pulp mills.
Medium term
Water resources
Rise of the average sea
water
level
Reduction of production capacity due to the
reduced availability of soils suitable for agriculture
or forestry.
Damage to facilities and assets in coastal areas
(e.g., industrial complexes) and logistical problems
in distribution networks.
Increase in insurance premiums and reduction of
the potential availability of insurance for assets
located in areas with a high risk of rising average
sea levels.
Long term
Temperature
Increase in average
temperature leading to
changes in species
composition of trees and
increased susceptibility of
forests to outbreaks
of pests and diseases
Loss or damage to forests and plantations and
consequent reduction in revenue as a result of
lower production and sale of products.
Increased forestry costs for replanting degraded
forests and substitution to pest-adapted species.
Long term
Water resources
Changes in rainfall patterns
and other climatic factors
leading to loss of
productivity of production
forest
Reduced production capacity due to loss or damage
to forests and plantations and limited water use as
a result of low rainfall frequency, leading to a
consequent reduction in revenue.
Increase in the cost of raw materials.
Long term
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 118
Opportunities
Category
Description of Opportunity
Potential Impact
Time
Horizon
Energy
Source
Participation in the voluntary carbon market
Development of new revenue streams.
Medium term
Substitution of fossil fuels with renewable fuels (e.g.
biomass, solar and hydrogen)
Competitive positioning, given the new
climate regulation.
Reducing energy dependency from fossil
fuels, including reducing the associated
costs and market price fluctuations.
Short term
Resilience
Regulations encouraging reforestation and afforestation
of degraded areas
Promoting the preservation of the forest
and raw material, contributing to
resilience to climate change.
Medium term
Participation in renewable energy programmes and
adoption of energy efficiency measures
Increasing market value through
resilience planning (e.g. infrastructure,
land, buildings).
Increased reliability of the supply chain
and ability to operate under various
conditions.
Medium term
Products
and Services
Investment in R&D to develop new forest-based, low-
carbon products or products that can replace fossil-
based products (e.g. using lignin or formed fibre
biocomposites), promoting the circular bioeconomy
Adapting the portfolio to the impacts of
climate change in a way that responds
to consumer preferences, reinforcing the
competitive advantage in the market.
Increased revenues through demand for
lower emission products.
Long term
Resilience of Navigator's strategy
Navigator developed a study to analyse climate scenarios, with support from RAIZ, in order to
assess the exposure of Navigator's assets to physical climate risks.
Two Representative Concentration Pathways (i.e., climate scenarios), namely RCPs 4.5 and 8.5,
were evaluated, which assume differing greenhouse gas (GHG) emission pathways.
The study calculated the vulnerability of Navigator's forest property in Portugal to climate
change, taking into account existing conditions and those projected for 2040 in each scenario.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 119
The vulnerability components include the exposure factor, the sensitivity factor and adaptive
capacity. The exposure factor evaluates how they are subject to climate impacts, resources,
systems, ecosystems, infrastructures, species or populations in a given area; the sensitivity
factor determines the magnitude of the direct or indirect effects of climate; and the adaptive
capacity is defined as the capacity to respond to climate change or climate events.
The combination of the three factors makes it possible to assess climate vulnerability in a given
region. The methodology adopted for calculating the vulnerability of eucalyptus stock took into
account the definition of exposure and sensitivity on a scale of 5 classes, to describe the levels
of exposure and sensitivity for the different climate scenarios. Navigator has also developed a
methodology for determining suitability for eucalyptus, based on climatic variables (average
annual rainfall, summer rainfall and number of days with >1mm, average annual temperature,
maximums for the hottest month and minimums for the coldest month) and soil quality
(texture, depth, hazardousness and organic matter).
The calculation of vulnerability resulted from the mean potential impact of each type of
exposure weighted for each factor using the Hierarchical Analysis method, participative analysis
method and multi-criteria decision.
Exposure Sensitivity
Potential Impact
Adaptive Capacity
Vulnerability
Exposure
Sensitivity
Exposure
Exposure
Exposure
Exposure
Sensitivity
Sensitivity
Sensitivity
Sensitivity
Potential
Drought
Impact
Potential
Heat Wave
Impact
Potential
Cold Wave
Impact
Potential
Pest
Impact
Potential
Fire
Impact
Vulnerability
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 120
Using this analysis, Navigator obtained information on the exposure of its property to the
physical risks of drought, heat waves, cold snaps, fires and pests, for each region of the
country.
The results obtained make it possible to identify the most critical areas to monitor, in order to
implement adaptation strategies and targets that promote Navigator's resilience to climate
change.
In the future, the Group intends to continue to evolve in the analysis of the impacts of climate
change on its businesses and to develop additional scenario analysis studies in order to assess
the effects on its risks and opportunities.
8.5. Risk management
Reporting Recommendation
Additional reporting location
a) Describe the organisation's processes for identifying
and assessing climate-related risks.
Sustainability Report
Chapter 4.1
Corporate Governance Report
Part I C. III
Annual Report
Chapter 2.11
b) Describe the organisation's processes for managing
climate-related risks.
Sustainability Report
Chapter 4.1
Corporate Governance Report
Part I C. III
Annual Report
Chapter 2.11
c) Describe how processes for identifying, assessing, and managing
climate-related risks are integrated into the organisation's overall
risk management.
Sustainability Report
Chapter 4.1
Corporate Governance Report
Part I C. III
Annual Report
Chapter 2.11
Navigator considers risk management to be a core business process. Thus, the Company has a
permanent system for monitoring risk management, involving all units, the Risk Management
Department (RMD) and the Supervisory Board. This system is based on the systematic and
explicit assessment of business risks by all the Group's organisational divisions and on the
identification of the main controls in place in all business processes. This basis allows the
Company to continuously evaluate and adapt the internal control system to the risks identified
as most critical at any given time.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 121
Integration of climate risks into Navigator's general risk management
The risks associated with climate change are included in the set of risks identified by Navigator.
Management of these risks, through mitigation controls and monitoring processes, is reflected in
several fronts of the Group's risk management structure.
Relevant climate risks and opportunities are identified and assessed by a multidisciplinary team
through an iterative process of continuous improvement. Their annual review considers the
breadth of the Group's business, in all locations in which it operates and its product portfolio,
including consultation with technical experts where necessary.
Climate change-related risks and mitigation actions are reviewed and updated annually, along
with the Group's main risks, and are approved by the Executive Committee.
The Group has several mechanisms in place to monitor and mitigate these risks through
proactive management and early detection. The Group has incorporated climate change
considerations into reforestation practices, conservation of species biodiversity and increased
monitoring during periods of fire risk. Climate change related risks and opportunities are
managed and, where possible, mitigated by the operational teams and through the investment
programme.
For more information on the Navigator Group's risk management methodology please refer to
Chapter 2.11.
8.6. Metrics and Goals
Reporting Recommendation
Additional reporting location
a) Disclose the metrics used by the organisation to assess
climate-related risks and opportunities in line with its strategy
and risk management process
Sustainability Report
Chapters 3.1, 5.1, and 6
b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas
(GHG) emissions, and the related risks.
Sustainability Report
Chapter 6
c) Describe the targets used by the organisation to manage climate-
related risks and opportunities and performance against targets
Sustainability Report
Chapters 3.1, 5.1, and 6
To face the challenges and opportunities of the next decade, Navigator has set out its 2030
Agenda, an agenda for responsible business management that will increase the Group's positive
contribution to creating value and sustainable growth in a changing world. The 2030 Agenda
was based on the results obtained from a consultation process with 540 internal and external
Stakeholders, a benchmarking analysis of international trends and using the United Nations
Sustainable Development Goals as a reference. The targets for reducing GHG emissions
approved by the Science Based Targets initiative (SBTi) and aligned with the global challenge of
limiting the mean temperature increase to 1.5°C are some of the objectives set out in the 2030
Agenda.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 122
Navigator has defined the climate metrics presented in the following table as the most relevant
for the business. The performance of these metrics is regularly assessed and is published
annually through the Group's Sustainability Report.
Metrics
Indicators
Objectives and Goals
Performance
Greenhouse
Gas
(GHG)
Emissions
Scope 1 absolute GHG emissions
10
SBTi Validated Targets
11
Reduction of Scope 1
and 2 GHG Emissions by 63% by 2035
(reference year: 2020)
Reduction of Scope 3 GHG emissions by 37.5%
by 2035 (reference year: 2020)
Specific targets for industrial activity
Reduction of direct ETS CO
2
emissions from
industrial complexes by 86% by 2035
(reference year: 2018)
GRI 305
(Sustainability Report –
Chapter 6)
Scope 2 absolute GHG emissions
12
Scope 3 absolute GHG emissions
13
>Upstream categories:
1. Goods and services purchased
3. Fuel and energy related
activities (not included in
Scopes 1 and 2)
4. Transport and distribution
>Downstream categories:
9. Transport and distribution
10. Use of products sold
11. Treatment and end of life of
products sold
Carbon Intensity
Water and
Wastewater
Management
Water Catchment
Reduce specific water use (m
3
/t product) by at
least 33% by 2030 (base year: 2019)
GRI 303
(Sustainability Report –
Chapters 5.4 and 6)
Waste
Management
Waste Production
Achieve, by 2030, an industrial landfill rate of
less than 10%
GRI 306
(Sustainability Report –
Chapter 6)
Internal Carbon Price
The Navigator Group has pursued a strategy of implementing a series of environmental
investments which, among other advantages, have resulted in a continuous reduction in CO
2
emissions, despite the continuous increase in production volume in recent years. Using forest
biomass to produce energy is Navigator's main way of reducing consumption of fossil fuels. The
installation of new biomass boilers not only contributes to fire prevention by removing
undergrowth from forests, but also means that less controlled burning (avoiding the
concomitant risks) is necessary. In addition to the new biomass boiler at the Figueira da Foz
plant allowing a 32% reduction in the Navigator Group's total CO
2
emissions, the Aveiro unit is
looking at installing a steam turbine and the Setúbal Complex is assessing a project to use
biomass as fuel for the lime kilns.
10
Historical record of values for the last 3 years shown
11
The targets include emissions and removals of bioenergy from biogenic sources.
12
Historical record of values for the last 3 years shown
13
Historical record of values for the last 2 years (2020 and 2021) shown
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 123
The differential between the free allocations given by the ETS and the forecast emissions has to
be bought in the market. The Company has already negotiated contracts for the estimated
deficit up to 2022. The price referred to is the average price of those purchases:
Purchase: Minimum: 65.91 €/ton; Maximum: 68.25 €/ton; Average: 67.74 €/ton.
Remuneration policies
With regard to management of climate issues, Navigator promotes incentives for the Board of
Directors through its remuneration system, which incorporates, in the case of Executive
Directors, a variable component, determined on the basis of an assessment of the actual
performance of the Company and of the Director. Actual performance is assessed against
expectations and targets and is weighted against a set of quantitative and qualitative KPIs that
include EBITDA, net income, cash flow and total shareholder return vs peers.
In line with the commitments made by Navigator in its sustainability strategy and in recognition
of the importance of efficient energy use and the need to reduce CO
2
emissions from economic
activities, the implementation of the corporate energy efficiency programme, approved in 2016,
is also included in the weighting (energy reduction target).
Recognition of Navigator's Climate Action
CDP
Climate
Change
2020
2021
2022
8.7. Next steps
The year 2022 marks the publication of the first climate action report aligned with TCFD
recommendations, reinforcing the way Navigator is managing the impacts of climate risks and
opportunities, through its strategic approach and risk management processes that enable it to
respond to inherent impacts. In order to continuously improve the alignment of its reporting
with TCFD disclosure recommendations, the main areas of focus for Navigator and the next
steps to be considered are presented below.
2022 ANNUAL REPORT REPORT OF THE BOARD OF DIRECTORS 124
Governance
Strategy
Strengthen the supervision, evaluation and
management model of climate-related risks and
opportunities.
Continue the Training Programme on the issue of
climate change and the Organisation's
adaptation response to climate challenges. The
design of the programme, which started in 2023,
has programme contents and complexity levels
adapted to the different trainees, covering the
main functions.
Conclude the reassessment of the matrix for
identifying climate risks and opportunities,
covering the entire value chain, in order to
determine the potential financial impact in the
short, medium and long term for the most
relevant ones.
Notify the validated GHG near-term reduction
targets (1.5°C by 2035) and review them in light
of the development of the GHG Protocol and FLAG
Guidance.
Carry out a new study of climate scenario analysis
with the aim of re-evaluating Navigator's
adaptation and resilience strategies against
climate change.
Ensure continuous monitoring and follow-up of
new climate-related regulations and legal
requirements.
Risk Management
Metrics and Goals
Strengthen the processes of identification and
assessment of climate-related risks, ensuring
that they are aligned with the recommendations
of the framework.
Review the climate risk management procedure
in order to improve support for decision-making
on climate risk mitigation or control.
Incorporate in the risk prioritization procedures
(risk matrix) the climate risks with the greatest
impact for Navigator.
Review and define the KPIs used to measure the
Group's performance against the defined climate
targets.
Continue calculating, monitoring and reporting all
categories (applicable to Navigator) of scope 3
GHG emissions.
Set Net-Zero targets for the whole Group, in line
with the strategic transition plan for a low carbon
economy.
Consolidated Financial Statements
2022 ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS 126
Consolidated Income Statement
For the periods ended 31 December 2022 and 31 December 2021
Amounts in Euro
Note
2022
2021
Revenue
2.1
Other operating income
2.2
Changes in the fair value of biological assets
3.8
(24,824,186 )
(1,260,391 )
Costs of goods sold and materials consumed
4.1
(968,849,205 )
(629,794,745 )
Variation in production
4.1
External services and supplies
2.3
(626,158,733 )
(449,402,361 )
Payroll costs
7.1
(186,239,235 )
(155,015,795 )
Other operating expenses
2.3
(73,837,092 )
(38,674,036 )
Net provisions
10.1
(1,621,447 )
(3,142,944 )
Depreciation, amortisation and impairment losses in non-financial assets
3.7
(161,277,579 )
(121,999,345 )
Operating income
Financial income and gains
5.11
Other financial expenses and losses
5.11
(58,671,991 )
(21,207,843 )
Net financial results
(56,983,010 )
(17,777,209 )
Gains/(losses) of associates and joint ventures
Profit before income tax
Income tax
6.1
(123,937,812 )
(40,378,319 )
Net profit for the period
Attributable to Navigator's equity holders
Attributable to non-controlling interests
5.6
Earnings per share
Basic earnings per share, Euro
5.3
Diluted earnings per share, Euro
5.3
2022 ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS 127
Consolidated statement of comprehensive income
For the periods ended 31 December 2022 and 31 December 2021
Amounts in Euro
Note
2022
2021
Net profit for the period
before non-controlling interests
Items that may be reclassified to profit and loss
Hedging derivative financial instruments
Changes in fair value
8.2
Tax effect
(15,021,412 )
(393,456 )
Currency translation differences
(3,464,432 )
Tax on conventional capital remuneration
(1,020,250 )
(770,000 )
Items that cannot be reclassified to profit and loss
Remeasurement of post-employment benefits
Remeasurement
7.2.5
Tax effect
7.2.5
(223,719 )
Comprehensive income of associates and joint ventures
(1,448,450 )
Total other comprehensive income net of taxes
(2,944,322 )
Total comprehensive income
Attributable to:
Navigator's equity holders
Non-controlling interests
2022 ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS 128
Consolidated statement of financial position
As at 31 December 2022 and 31 December 2021
Amounts in Euro
Note
2022
2021
ASSETS
Non-current assets
Goodwill
3.1
Intangible assets
3.2
Property, plant and equipment
3.3
Right-of-use assets
3.6
Biological assets
3.8
Investment properties
3.4
Non-current receivables
4.2
Deferred tax assets
6.2
Current assets
Inventories
4.1
Current receivables
4.2
Income tax
6.1
Cash and cash equivalents
5.9
Total Assets
EQUITY AND LIABILITIES
Capital and Reserves
Share capital
5.2
Treasury shares
5.2
Currency exchange reserve
5.5
(24,346,001 )
Fair value reserves
5.5
(5,604,076 )
Legal reserve
5.5
Other reserves
5.5
Retained earnings
5.5
Net profit for the period
Prepaid dividends
5.4
(49,996,170 )
Equity attributable to Navigator's equity holders
Non-controlling interests
5.6
Total Equity
Non-current liabilities
Interest-bearing liabilities
5.7
Lease liabilities
5.8
Pensions and other post-employment benefits
7.2
Deferred tax liabilities
6.2
Provisions
10.1
Non-current payables
4.3
Current liabilities
Interest-bearing liabilities
5.7
Lease liabilities
5.8
Current payables
4.3
Income tax
6.1
Total Liabilities
Total Equity and Liabilities
2022 ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS 129
Statement of Changes in Equity
For the periods ended 31 December 2022 and 31 December 2021
Amounts in Euro
Note
Share
capital
Treasury
shares
Currency
translation
reserve
Fair value
reserves
Legal
reserves
Other
reserves
Retained
earnings
Net profit for
the period
Prepaid
dividends
Total
Non-
controlling
interests
Total
Equity as at 1 January
2022
(24,346,001 )
(5,604,076 )
(49,996,170 )
Net profit for the period
Other comprehensive income
(net of taxes)
Total comprehensive
income for the period
Application of 2021 net profit
for the period:
- Dividends paid
5.4
(131,632,875 )
(131,632,875 )
(131,632,875 )
- Application of prior period's
net profit
(171,411,455 )
- Bonus to employees
(11,000,000 )
(11,000,000 )
(11,000,000 )
Distribution of reserves
(118,355,086 )
(118,355,086 )
(118,355,086 )
Incorporation of reserves
Cancellation of treasury
shares
5.2
Prepaid dividends
5.4
Total transactions with
shareholders
(118,355,086 )
(10,217,590 )
(171,411,455 )
(249,987,961 )
(249,987,961 )
Equity as at 31 December
2022
Amounts in Euro
Note
Share
capital
Treasury
shares
Currency
translation
reserve
Fair value
reserves
Legal
reserves
Other
reserves
Retained
earnings
Net profit for
the period
Prepaid
dividends
Total
Non-
controlling
interests
Total
Equity as at 1 January
2021
(20,189,264 )
(20,881,569 )
(6,641,368 )
Net profit for the period
Other comprehensive income
(net of taxes)
(3,464,432 )
(521,838 )
(2,948,978 )
(2,944,322 )
Total comprehensive
income for the period
(3,464,432 )
(521,838 )
Application of 2020 net profit
for the period:
- Dividends paid
5.4
(99,565,630 )
(99,565,630 )
(99,565,630 )
- Application of prior period's
net profit
(109,213,720 )
- Bonus to employees
(7,000,000 )
(7,000,000 )
(7,000,000 )
Transfer of free reserves to
retained earnings
(138,290,615 )
Incorporation of reserves
(6,316,931 )
Cancellation of treasury
shares
5.2
(6,316,931 )
(13,872,333 )
Prepaid dividends
5.4
(49,996,170 )
(49,996,170 )
(49,996,170 )
Total transactions with
shareholders
(144,607,546 )
(109,213,720 )
(49,996,170 )
(149,561,800 )
(149,561,800 )
Equity as at 31 December
2021
(24,346,001 )
(5,604,076 )
(49,996,170 )
2022 ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS 130
Consolidated Statement of Cash Flows
For the periods ended 31 December 2022 and 31 December 2021
Amounts in Euro
Notes
2022
2021
OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers
(1,704,131,480 )
(1,165,320,806 )
Payments to employees
(127,038,497 )
(111,579,111 )
Cash flow from operations
Income tax received/ (paid)
6.1
(64,765,380 )
(20,649,602 )
Other (payments)/ receipts relating to operating activities
Cash flows from operating activities (1)
INVESTING ACTIVITIES
Inflows:
Property, plant and equipment
Interest and similar income
Outflows:
Property, plant and equipment
(120,784,217 )
(86,841,984 )
Intangible assets
(3,288,016 )
(17,416,194 )
(124,072,233 )
(104,258,178 )
Cash flows from investing activities (2)
(122,152,763 )
(95,884,141 )
FINANCING ACTIVITIES
Inflows:
Interest-bearing liabilities
5.10
Government grants
5.10
Outflows:
Interest-bearing liabilities
5.10
(533,070,676 )
(291,527,778 )
Amortisation of lease agreements
3.6
(8,837,422 )
(8,965,290 )
Interest and similar expense
(33,816,287 )
(14,161,246 )
Distribution of dividends
5.4
(131,632,875 )
(149,561,800 )
Distribution of reserves
5.4
(118,355,086 )
Refundable grants
5.10
(5,636,313 )
(4,472,875 )
(831,348,659 )
(468,688,989 )
Cash flows from financing activities (3)
(401,252,604 )
(321,188,989 )
CHANGES IN CASH AND CASH EQUIVALENTS (1)+(2)+(3)
(63,319,623 )
Effect of exchange rate differences
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD
5.9
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD
5.9
2022 ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS 131
1. Introduction 133
1.1. THE GROUP 133
1.2. IMPACTS ARISING FROM THE MILITARY CONFLICT IN UKRAINE 135
1.3. SUBSEQUENT EVENTS 137
1.4. BASIS FOR PREPARATION 138
1.5. NEW IFRS STANDARDS ADOPTED AND TO BE ADOPTED 144
1.6. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS 147
2. Operational performance 148
2.1. REVENUE AND SEGMENT REPORTING 148
2.2. OTHER OPERATING INCOME 155
2.3. OTHER OPERATING EXPENSES 157
3. Investments 159
3.1. GOODWILL 159
3.2. INTANGIBLE ASSETS 163
3.3. PROPERTY, PLANT AND EQUIPMENT 166
3.4. INVESTMENT PROPERTIES 170
3.5. GOVERNMENT GRANTS 171
3.6. RIGHT-OF-USE ASSETS 175
3.7. DEPRECIATION, AMORTISATION AND IMPAIRMENT LOSSES 177
3.8. BIOLOGICAL ASSETS 178
4. Working capital 182
4.1. INVENTORIES 182
4.2. RECEIVABLES 185
4.3. PAYABLES 189
5. Capital structure 191
5.1. CAPITAL MANAGEMENT 191
5.2. SHARE CAPITAL AND TREASURY SHARES 192
5.3. EARNINGS PER SHARE 194
5.4. DIVIDENDS AND RESERVES DISTRIBUTED 195
5.5. RESERVES AND RETAINED EARNINGS 195
5.6. NON-CONTROLLING INTERESTS 198
5.7. INTEREST-BEARING LIABILITIES 199
5.8. LEASE LIABILITIES 204
5.9. CASH AND CASH EQUIVALENTS 205
5.10. CASH FLOWS FROM FINANCING ACTIVITIES 206
5.11. NET FINANCIAL RESULTS 206
CONTENTS
CONSOLIDATED FINANCIAL
STATEMENTS
2022 ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS 132
6. Income tax 207
6.1. INCOME TAX FOR THE PERIOD 207
6.2. DEFERRED TAXES 212
7. Payroll 214
7.1. PAYROLL COSTS 214
7.2. EMPLOYEE BENEFITS 215
7.3. REMUNERATION OF KEY MANAGEMENT PERSONNEL 222
8. Financial instruments 223
8.1. FINANCIAL RISK MANAGEMENT 223
8.2. DERIVATIVE FINANCIAL INSTRUMENTS 234
8.3. FINANCIAL ASSETS AND LIABILITIES 238
9. Operational risk management 242
9.1. SPECIFIC RISKS INHERENT TO THE SECTORS OF ACTIVITY IN WHICH THE NAVIGATOR GROUP OPERATES243
10. Provisions, commitments and contingencies 261
10.1. PROVISIONS 261
10.2. COMMITMENTS 263
10.3. CONTINGENT ASSETS AND LIABILITIES 264
11. Group structure 266
11.1. COMPANIES INCLUDED IN THE CONSOLIDATION PERIMETER 266
11.2. CHANGES IN THE CONSOLIDATION PERIMETER 268
11.3. TRANSACTIONS WITH RELATED PARTIES 268
12. Explanation added for translation 269
2022 ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS 133
1. Introduction
The following symbols are used in the presentation of the Notes to the financial statements:
Accounting policies
This symbol indicates the disclosure of accounting policies specifically applicable to the items in
the respective Note.
Significant Estimates and Judgements
This symbol indicates the disclosure of the estimates and/or judgements made regarding the
items in the respective Note. Significant estimates and judgements are indicated in Note 1.8.
References
This symbol indicates a reference to another Note or another section of the Financial
Statements were more information about the items disclosed is presented.
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14
CO
2
emissions from assets in factories, Scope 1 - EU ETS basis.
2022 ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS 159
3. Investments
2022 ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS 160
2022 ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS 161
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4. Working capital
2022 ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS 183
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10. Provisions, commitments
and contingencies
2022 ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS 262
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BOARD OF DIRECTORS
Ricardo Miguel dos Santos Pacheco Pires
Chairman of the Board of Directors
António José Pereira Redondo
Chairman of the Executive Board
Adriano Augusto da Silva Silveira
Executive Board Member
José Fernando Morais Carreira de Araújo
Executive Board Member
Nuno Miguel Moreira de Araújo Santos
Executive Board Member
João Paulo Araújo Oliveira
Executive Board Member
João Paulo Cabete Gonçalves Lé
Executive Board Member
Manuel Soares Ferreira Regalado
Member
Maria Teresa Aliu Presas
Member
Mariana Rita Antunes Marques dos Santos
Member
Sandra Maria Soares Santos
Member
Vítor Manuel Rocha Novais Gonçalves
Member
Vítor Paulo Paranhos Pereira
Member
272
STATUTORY AUDITORS’ REPORT and AUDITORS’ REPORT
(Free translation from a report originally issued in Portuguese language. In case of doubt
the Portuguese version will always prevail.)
REPORT ON THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS
Opinion
We have audited the accompanying consolidated financial statements of The Navigator
Company, S.A. (the Group), which comprise the consolidated statement of financial
position as at 31 December 2022 (showing a total of Euro 2,912,028,095 and total equity
of Euro 1,259,707,514, including a profit for the year of Euro 392,537,070), the
consolidated income statement by nature, consolidated statement of comprehensive
income, consolidated statement of changes in equity and consolidated statement of cash
flows for the year then ended, and the accompanying notes to the consolidated financial
statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements give a true and fair
view, in all material respects, of the consolidated financial position of The Navigator
Company, S.A. as at 31 December 2022 and of its consolidated financial performance
and its consolidated cash flows for the year then ended in accordance with the
International Financial Reporting Standards (IFRS) as adopted by the European Union.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISA) and
further technical and ethical standards and guidelines as issued by Ordem dos Revisores
Oficiais de Contas (the Portuguese Institute of Statutory Auditors). Our responsibilities
under those standards are further described in the “Auditors’ Responsibilities for the Audit
of the Consolidated Financial Statements” section below. We are independent of the
entities that comprise the Group in accordance with the law and we have fulfilled other
ethical requirements in accordance with the Ordem dos Revisores Oficiais de Contas’
code of ethics.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
273
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the consolidated financial statements of the current year. These
matters were addressed in the context of our audit of the consolidated financial statements
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
on these matters.
Recoverability of Goodwill (Euro 377,339,466) and Property, plant and equipment
(Euro 1,099,689,407)
See Note 1.6 Significant accounting estimates and judgements and Notes 3.1 and 3.3 of the notes
to the Financial Statements
The Risk
Our response to the identified risk
The recoverability of goodwill and property,
plant and equipment is critical due to the
materiality of the amounts involved and the
complexity and subjectivity associated with
impairment tests, namely as a result of the
uncertainty inherent to financial projections,
which rely on the Board of Directors'
expectations, materialised in business and
investment plans, which are based on
several assumptions, associated with
discount rates, expected margins, short-
and long-term growth rates, and demand
behaviour, decarbonisation initiatives in
response to changes in laws and
regulations and assumptions that are not
observable in the market.
Our audit procedures included, amongst
others, those that we describe below:
We assessed the design and
implementation of the main controls
implemented by the Group related to
this matter and analysed the budgeting
procedures on which the projections are
based, by comparing the current
performance with estimates made in
previous periods, and the integrity of the
discounted cash flow model;
We assessed the internal and external
assumptions used and their
reasonableness, such as current
business trends, market performance,
inflation, projected economic growth
and discount rates;
We performed sensitivity analyses of
the assumptions and forecasts used;
We involved our experts in
benchmarking the average cost of
capital rate; and,
We reviewed the adequacy of the
disclosures to the financial statements,
in accordance with the applicable
accounting standards.
274
Fair value of biological assets (Euro 122,499,875)
See Note 1.6 Significant accounting estimates and judgements and Note 3.8 of the notes to the
Financial Statements.
The Risk
Our response to the identified risk
The fair value of biological assets is
determined through an internally developed
model, based on economic and market
projections, whose assumptions, namely
forest productivity, wood sales price
deducted by harvesting costs, the value of
own and leased land rents, logging and
transportation costs, plantation and
maintenance costs and discount rate,
require a high degree of estimation and
judgment by the Board of Directors.
Our audit procedures included, amongst
others, those that we describe below:
We assessed the design and
implementation of the main controls
implemented by the Group related to
this matter;
We tested the model's mathematical
accuracy and integrity;
We analysed the budgeting procedures
on which projections are based;
We compared the current performance
of the variables underlying the model
with estimates made in previous
periods, on the main variables: forest
productivity, the value of land rents,
structure costs, logging and
transportation costs, plantation and
maintenance costs;
We compared the internal and external
assumptions used in the model, such as
spot and trend price and the discount
rate with market data and assessed
their sensitivity;
We reviewed the adequacy of the
disclosures to the financial statements,
in accordance with the applicable
accounting standards.
275
Uncertainty over income tax treatments
See Note 1.6 Significant accounting estimates and judgements and Notes 6.1 and 6.2 of the notes
to the Financial Statements
The Risk
Our response to the identified risk
The application of tax law to different
transactions and circumstances of uncertain
tax treatment has an inherent complexity
and requires judgment in determining and
measuring the risks and uncertainties in
defining the best estimate, by weighing all
possible outcomes under its control and
their associated probabilities.
The estimate of possible amounts payable
requires a high degree of judgment by the
Board of Directors, which assesses the
probability of the outcome, supported by the
opinion of legal and tax advisors.
Our audit procedures included, amongst
others, those that we describe below:
We assessed the processes for
monitoring uncertain tax positions
regarding the income tax treatment,
including design and implementation
testing of the main controls in place and
inquiries to the Board of Directors and
to tax managers on the basis of their
estimates and judgements;
We analysed ongoing tax proceedings
and potential uncertain tax positions,
considering the effect of uncertainty for
each uncertain tax treatment, with the
support of tax experts, and reviewed
existing documentation;
We analysed the responses to the
confirmation requests received from
external lawyers;
We assessed the consistency of the
criteria followed in the previous years;
and
We reviewed the adequacy of the
disclosures to the financial statements,
in accordance with the applicable
accounting standards.
276
Responsibilities of Management and the Supervisory Body for the
consolidated financial statements
Management is responsible for:
preparing consolidated financial statements that give a true and fair view of the Group’s
consolidated financial position, financial performance and the consolidated cash flows,
in accordance with the International Financial Reporting Standards (IFRS) as adopted
by the European Union;
preparing the consolidated management report, corporate governance report,
consolidated non-financial statement and remuneration report in accordance with
applicable laws and regulations;
designing and maintaining an appropriate internal control system to enable the
preparation of consolidated financial statements that are free from material
misstatements, whether due to fraud or error;
adopting accounting policies and criteria appropriate in the circumstances; and
assessing the Group’s ability to continue as a going concern, and disclosing, as
applicable, the matters that may cast significant doubt about the Group’s ability to
continue as a going concern.
The supervisory body is responsible for overseeing the Group’s financial reporting
process.
Auditors’ responsibilities for the audit of the consolidated financial
statements
Our responsibility is to obtain reasonable assurance about whether the consolidated
financial statements as a whole are free from material misstatements whether due to fraud
or error, and to issue an auditors’ 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 ISAs will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
As part of an audit in accordance with ISA, we exercise professional judgment and
maintain professional scepticism throughout the audit. We also:
identify and assess the risks of material misstatement of the consolidated 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 Group’s internal control;
evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by Management;
conclude on the appropriateness of Management’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty
277
exists related to events or conditions that may cast significant doubt on the Group’s
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditors’ report to the related disclosures in the
consolidated 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 auditors’ report. However, future events or conditions may cause the Group to
cease to continue as a going concern;
evaluate the overall presentation, structure and content of the consolidated financial
statements, including the disclosures, and whether the financial statements represent
the underlying transactions and the events in a manner that achieves fair presentation;
obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the Group to express an opinion on the
consolidated financial statements. We are responsible for the direction, oversight, and
performance of the Group’s audit. We remain solely responsible for our audit opinion;
communicate with those charged with governance, including the supervisory body,
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;
determine, from the matters communicated with those charged with governance,
including the supervisory body, those matters that were of most significance in the audit
of the consolidated financial statements of the current year and are therefore the key
audit matters. We describe these matters in our auditors’ report unless law or
regulation precludes their public disclosure; and,
provide the supervisory body with a statement that we have complied with the relevant
ethical requirements regarding independence and communicate to 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.
Our responsibility also includes verifying that the information contained in the consolidated
management report is consistent with the consolidated financial statements, and the
verification of the requirements as provided in Article 451(4) and (5) of the Portuguese
Companies’ Code regarding the corporate governance report, as well as the verification that
the consolidated non-financial information and the remuneration report were presented.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
On the consolidated management report
Pursuant to Article 451(3)(e) of the Portuguese Companies' Code, it is our opinion that the
consolidated management report was prepared in accordance with the applicable legal
and regulatory requirements and the information contained therein is consistent with the
audited consolidated financial statements and, having regard to our knowledge and
assessment of the Group, we have not identified any material misstatements.
On the corporate governance report
Pursuant to Article 451(4) of the Portuguese Companies' Code, it is our opinion that the
corporate governance report includes the information required to the Group to provide
under Article 29-H of the Securities Code, and we have not identified any material
misstatements on the information provided therein in compliance with paragraphs c), d), f),
h), i) and l) of number 1 of that Article.
278
On the non-financial information
Pursuant to Article 451(6) of the Portuguese Companies' Code, we inform that the Group
has prepared a separate report which includes the consolidated non-financial information
as provided for in Article 508-G of the Portuguese Companies’ Code and was disclosed
together with the consolidated management report.
On the remuneration report
Pursuant to Article 26-G(6), of the Securities Code, we inform that the Group has included
in the corporate governance report, in a separate chapter, the information provided in
number 2 of that Article.
On the European single electronic format (ESEF)
The consolidated financial statements of The Navigator Company, S.A. for the year ended
31 December 2022 must comply with the applicable requirements established by the
European Commission Delegated Regulation 2019/815, of 17 December 2018 (ESEF
Regulation).
Management is responsible for the preparation and disclosure of the annual report in
accordance with the ESEF Regulation.
Our responsibility is to obtain reasonable assurance about whether the consolidated
financial statements, included in the annual report, have been prepared in accordance with
the requirements of the ESEF Regulation.
Our procedures considered the OROC (Portuguese Institute of Statutory Auditors)
technical application guide on ESEF reporting and included, amongst others:
obtaining an understanding of the financial reporting process, including the
presentation of the annual report in a valid XHTML format; and
identifying and assessing the risks of material misstatement related to the tagging of
information in the financial statements, in XBRL format using iXBRL technology. This
assessment was based on an understanding of the information tagging process
implemented by the Group.
In our opinion, the consolidated financial statements, included in the annual report, are
presented, in all material respects, in accordance with the requirements established by the
ESEF Regulation.
279
On the additional matters provided in Article 10 of the Regulation (EU)
537/2014
Pursuant to article 10 of the Regulation (EU) 537/2014 of the European Parliament and of
the Council, of 16 April 2014, and in addition to the key audit matters mentioned above, we
also report the following:
We were first appointed as auditors of The Navigator Company, S.A. (parent Entity of
the Group) in the shareholders general assembly held on 22 September 2017 for a first
mandate from 2015 to 2018. We were appointed at the shareholders general assembly
held on 9 April 2019 for a second mandate from 2019 to 2022.
Management has confirmed to us that they are not aware of any fraud or suspicion of
fraud having occurred that has a material effect on the financial statements. In planning
and executing our audit in accordance with ISAs we maintained professional
scepticism, and we designed audit procedures to respond to the possibility of material
misstatement in the consolidated financial statements due to fraud. As a result of our
work, we have not identified any material misstatement of the consolidated financial
statements due to fraud.
We confirm that the audit opinion we issue is consistent with the additional report that
we prepared and delivered to the supervisory body of the Group on 30 March 2023.
We declare that we have not provided any prohibited services as described in Article 5
of the Regulation (EU) 537/2014 of the European Parliament and of the Council, of 16
April 2014, and we have remained independent of the Group in conducting the audit.
3 April 2023
KPMG & Associados
Sociedade de Revisores Oficiais de Contas, S.A.
(no. 189 and registered at CMVM with no. 20161489)
represented by
Rui Filipe Dias Lopes
(ROC no. 1715 and registered at CMVM with no. 20161325)
2022 ANNUAL REPORT & ACCOUNTS CONSOLIDATED FINANCIAL STATEMENTS 280
2022 ANNUAL REPORT REPORT AND OPINION OF THE AUDIT BOARD 281
The Navigator Company, S.A.
Report and Opinion of the Audit Board
Consolidated Financial Accounts
2022 Financial Year
Shareholders,
1. In accordance with the Law, the Articles of Association of the Company and the terms of our mandate, we hereby
submit the report on our supervisory activities in 2022 and issue our opinion on the Consolidated Management
Report and Consolidated Financial Statements presented by the Board of Directors of the Navigator Company,
S.A., for the financial year ended 31 December 2022.
2. Over the course of the year we regularly monitored the affairs of the Company and its most significant affiliates
and associates, with the frequency and to the extent we deemed appropriate, through periodic meetings with the
Company’s directors and senior management. We monitored the verification of the accounting records and
respective supporting documentation, as well as the effectiveness of the risk management, internal control and
internal audit systems. We monitored compliance with the Law and the Articles of Association. In the course of
our work we encountered no constraints whatsoever.
3. We met several times with the Statutory Auditor and External Auditor, KPMG & Associados, SROC, Lda, monitoring
the auditing activities carried out and checking its independence, and we appraised the Legal Accounts Certificate
and Audit Report, with which we agree. We assessed the Legal Accounts Certificate and the Audit Report, with
which we agree.
4. The Audit Board analyzed the proposals submitted to it for the provision of non-audit services by the Statutory
Auditor, and approved those that concerned permitted services, did not affect the independence of the Statutory
Auditor and complied with additional legal requirements.
5. In the course of our work we found that:
a) The Consolidated Income Statement, the Consolidated Statement of Financial Position, the Consolidated
Statement of Comprehensive Income, the Consolidated Statement of Changes in Equity, the Consolidated
Statement of Cash Flows and the related Notes to the Consolidated Financial Statements, provide an adequate
understanding of the Company's financial position and results, comprehensive income, changes in equity, and
cash flows;
b) The accounting policies and valuation criteria adopted comply with the International Financial Reporting
Standards (IFRS) as adopted in the European Union and are suitable to ensure that such criteria lead to a
correct valuation of the Company’s assets and profits, taking due account of the analyses and
recommendations of the External Auditor;
c) The Management Report provides a sufficient description of the business affairs of the Company and its
affiliates included in the consolidated accounts, offering a clear account of the most significant developments
in its activities;
2022 ANNUAL REPORT REPORT AND OPINION OF THE AUDIT BOARD 282
d) The Corporate Governance Report includes the information required by Article 29H of the Securities Code
and takes into account the recommendations of the Code of the Portuguese Institute for Corporate
Governance (IPCG).
6. Accordingly, taking into consideration the information received from the Board of Directors and the Company
departments, and also the conclusions of the Legal Accounts Certificate and the Audit Report, we recommend that:
a) The Management Report be approved;
b) The Consolidated Financial Statements be approved.
7. Finally, the members of the Audit Board wish to acknowledge and express their appreciation for the assistance
received from the Board of Directors, the senior managers of the Company and other staff, as well as the External
Auditor, KPMG & Associados, SROC, Lda.
Lisbon, 3 April 2023
The Chairman of the Audit Board
José Manuel Oliveira Vitorino
Member
Gonçalo Nuno Palha Gaio Picão Caldeira
Member
Maria da Graça Torres Ferreira da Cunha Gonçalves
SEPARATE FINANCIAL STATEMENTS
2022 ANNUAL REPORT SEPARATE FINANCIAL STATEMENTS 283
2022 ANNUAL REPORT SEPARATE FINANCIAL STATEMENTS 284
2022 ANNUAL REPORT SEPARATE FINANCIAL STATEMENTS 285
2022 ANNUAL REPORT SEPARATE FINANCIAL STATEMENTS 286
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2022 ANNUAL REPORT SEPARATE FINANCIAL STATEMENTS 288
2022 ANNUAL REPORT SEPARATE FINANCIAL STATEMENTS 289
1. Introduction 291
1.1 INTRODUCTION 291
1.2 IMPACTS ARISING FROM THE MILITARY CONFLICT IN UKRAINE 294
1.3 SUBSEQUENT EVENTS 296
1.4 BASIS FOR PREPARATION 296
1.5 NEW IFRS ADOPTED AND TO BE ADOPTED 300
1.6 SIGNIFICANT ESTIMATES AND JUDGEMENTS 303
2. Operational performance 304
2.1 REVENUE AND SEGMENT REPORTING 304
2.2 OTHER OPERATING INCOME 307
2.3 OTHER OPERATING EXPENSES 308
3. INVESTMENTS 310
3.1 PROPERTY, PLANT AND EQUIPMENT 310
3.2 RIGHT-OF-USE ASSETS 312
3.3 DEPRECIATION, AMORTISATION AND IMPAIRMENT LOSSES 313
4. Working capital 314
4.1 INVENTORIES 314
4.2 RECEIVABLES 316
4.3 PAYABLES 318
5. Capital structure 319
5.1 CAPITAL MANAGEMENT 319
5.2 SHARE CAPITAL AND TREASURY SHARES 319
5.3 EARNINGS PER SHARE 322
5.4 DIVIDENDS 322
5.5 RESERVES AND RETAINED EARNINGS 323
5.6 INTEREST-BEARING LIABILITIES 325
5.7 LEASE LIABILITIES 329
5.8 CASH AND CASH EQUIVALENTS 330
5.9 CASH FLOWS FROM FINANCING ACTIVITIES 331
5.10 NET FINANCIAL RESULTS 331
6. Income tax 332
6.1 INCOME TAX FOR THE PERIOD 332
6.2 DEFERRED TAXES 336
7. Payroll 338
7.1 PAYROLL COSTS 338
TABLE OF CONTENTS
SEPARATE FINANCIAL
STATEMENTS
2022 ANNUAL REPORT SEPARATE FINANCIAL STATEMENTS 290
7.2 EMPLOYEE BENEFITS 339
7.3 REMUNERATION OF CORPORATE BODIES 343
8. Financial instruments 344
8.1 FINANCIAL RISK MANAGEMENT 344
8.2 FINANCIAL RISK MANAGEMENT 353
8.3 FINANCIAL ASSETS AND LIABILITIES 356
9. Provisions, commitments and contingencies 358
9.1 PROVISIONS 358
9.2 COMMITMENTS 359
9.3 CONTINGENT ASSETS AND LIABILITIES 360
10. Group structure 362
10.1 INVESTMENTS IN SUBSIDIARIES 362
10.2 TRANSACTIONS WITH RELATED PARTIES 366
11. Explanation added for translation 368
2022 ANNUAL REPORT SEPARATE FINANCIAL STATEMENTS 291
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2022 ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS 360
2022 ANNUAL REPORT SEPARATE FINANCIAL STATEMENTS 361
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BOARD OF DIRECTORS
Ricardo Miguel dos Santos Pacheco Pires
Chairman of the Board of Directors
António José Pereira Redondo
Chairman of the Executive Board
Adriano Augusto da Silva Silveira
Executive Board Member
José Fernando Morais Carreira de Araújo
Executive Board Member
Nuno Miguel Moreira de Araújo Santos
Executive Board Member
João Paulo Araújo Oliveira
Executive Board Member
João Paulo Cabete Gonçalves Lé
Executive Board Member
Manuel Soares Ferreira Regalado
Member
Maria Teresa Aliu Presas
Member
Mariana Rita Antunes Marques dos Santos
Member
Sandra Maria Soares Santos
Member
Vítor Manuel Rocha Novais Gonçalves
Member
Vítor Paulo Paranhos Ferreira
Member
Certificação Legal de Contas Dem. Separadas
STATUTORY AUDITORS’ REPORT and AUDITORS’ REPORT
(Free translation from a report originally issued in Portuguese language. In case of doubt
the Portuguese version will always prevail.)
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
Opinion
We have audited the accompanying financial statements of The Navigator Company,
S.A. (the Entity), which comprise the statement of financial position as at 31 December
2022 (showing a total of Euro 3,435,313,379 and total equity of Euro 1,259,409,537,
including a profit for the year of Euro 392,537,070), the income statement by nature,
statement of comprehensive income, statement of changes in equity and statement of
cash flows for the year then ended, and the accompanying notes to the financial
statements, including a summary of significant accounting policies.
In our opinion, the accompanying financial statements give a true and fair view, in all
material respects, of the financial position of The Navigator Company, S.A. as at 31
December 2022 and of its financial performance and its cash flows for the year then ended
in accordance with the International Financial Reporting Standards (IFRS) as adopted by
the European Union.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISA) and
further technical and ethical standards and guidelines as issued by Ordem dos Revisores
Oficiais de Contas (the Portuguese Institute of Statutory Auditors). Our responsibilities
under those standards are further described in the Auditors’ Responsibilities for the Audit
of the Financial Statements section of our report. We are independent of the Entity in
accordance with the applicable law and we have fulfilled our other ethical responsibilities in
accordance with the Code of Ethics of the Portuguese Institute of Statutory Auditors.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial statements of the current year. These matters were
addressed in the context of our audit of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters.
372
Valuation of financial investments (Euro 2,093,159,574)
See Note 1.6 Significant accounting estimates and judgements and Note 10.1 of the notes to the
Financial Statements
The Risk
Our response to the identified risk
The valuation of the Entity's financial
investments requires a high degree of
estimate and judgement by the Board of
Directors, namely with regard to the
calculation of the recoverable value of the
investments made when signs of impairment
are identified.
Our audit procedures included, amongst
others, those that we describe below:
We assessed the design and
implementation of the main controls
implemented by the Entity and analysed
the budgeting procedures on which the
projections are based, by comparing the
current performance with estimates made
in previous periods, and the integrity of
the discounted cash flow model;
We assessed whether there were signs
of impairment in the financial
investments;
When signs of impairment are identified,
we review the impairment tests of the
financial investments, based on
discounted cash flow models, performing
the following procedures:
- We verified the arithmetic accuracy of
the models;
- We assessed the internal and
external assumptions used and their
reasonableness, such as current
business trends, market
performance, inflation, projected
economic growth and discount rates;
- We performed sensitivity analyses of
the assumptions and forecasts used;
and
- We involved our experts in
benchmarking the average cost of
capital rate;
We reviewed the adequacy of the
disclosures to the financial statements, in
accordance with the applicable
accounting standards.
373
Responsibilities of Management and the Supervisory Body for the Financial
Statements
Management is responsible for:
preparing financial statements that give a true and fair view of the Entity’s financial
position, financial performance and the cash flows, in accordance with the International
Financial Reporting Standards (IFRS) as adopted by the European Union;
preparing the management report, corporate governance report, non-financial statement,
and the remuneration report in accordance with applicable laws and regulations;
designing and maintaining an appropriate internal control system to enable the
preparation of financial statements that are free from material misstatements, whether
due to fraud or error;
adopting accounting policies and criteria appropriate in the circumstances; and
assessing the Entity’s ability to continue as a going concern, and disclosing, as
applicable, the matters that may cast significant doubt about the Entity’s ability to
continue as a going concern.
The supervisory body is responsible for overseeing the Entity’s financial reporting process.
Auditors’ responsibilities for the audit of the financial statements
Our responsibility is to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatements whether due to fraud or error,
and to issue an auditors’ 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 ISAs
will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.
As part of an audit in accordance with ISA, we exercise professional judgment and
maintain professional scepticism throughout the audit. We also:
identify and assess the risks of material misstatement of the 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 Entity’s internal control;
evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by Management;
374
conclude on the appropriateness of Management’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 Entity’s
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditors’ report to the related disclosures in the
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 auditors’
report. However, future events or conditions may cause the Entity to cease to continue
as a going concern;
evaluate the overall presentation, structure and content of the financial statements,
including the disclosures, and whether the financial statements represent the
underlying transactions and the events in a manner that achieves fair presentation;
communicate with those charged with governance, including the supervisory body,
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;
determine, from the matters communicated with those charged with governance,
including the supervisory body, those matters that were of most significance in the audit
of the financial statements of the current year and are therefore the key audit matters.
We describe these matters in our auditors’ report unless law or regulation precludes
their public disclosure; and,
provide the supervisory body with a statement that we have complied with the relevant
ethical requirements regarding independence and communicate to 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.
Our responsibility also includes the verification that the information contained in the
management report is consistent with the financial statements, and the verification of the
requirements as provided in Article 451(4) and (5) of the Portuguese Companies’ Code
regarding the corporate governance report, as well as the verification that the
remuneration report was presented.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
On the management report
Pursuant to Article 451(3)(e) of the Portuguese Companies' Code, it is our opinion that the
management report was prepared in accordance with the applicable legal and regulatory
requirements and the information contained therein is consistent with the audited financial
statements and, having regard to our knowledge and assessment of the Entity, we have
not identified any material misstatements.
On the corporate governance report
Pursuant to Article 451(4) of the Portuguese Companies' Code, it is our opinion that the
corporate governance report includes the information required to the Entity to provide
under Article 29-H of the Securities Code, and we have not identified any material
misstatements on the information provided therein in compliance with paragraphs c), d), f),
h), i) and l) of number 1 of that Article.
375
On the non-financial information
Pursuant to Article 451(6) of the Portuguese Companies' Code, we inform that the Entity
has prepared a separate report which includes the non-financial information as provided
for in Article 66-B of the Portuguese Companies’ Code and was disclosed together with
the management report.
On the remuneration report
Pursuant to Article 26-G(6), of the Securities Code, we inform that the Entity has included
in the corporate governance report, in a separate chapter, the information provided in
number 2 of that Article.
On the European single electronic format (ESEF)
The financial statements of The Navigator Company, S.A. for the year ended 31
December 2022 must comply with the applicable requirements established by the
European Commission Delegated Regulation 2019/815, of 17 December 2018 (ESEF
Regulation).
Management is responsible for the preparation and disclosure of the annual report in
accordance with the ESEF Regulation.
Our responsibility is to obtain reasonable assurance about whether the financial
statements, included in the annual report, have been prepared in accordance with the
requirements of the ESEF Regulation.
Our procedures considered the OROC (Portuguese Institute of Statutory Auditors)
technical application guide on ESEF reporting and included, amongst others:
obtaining an understanding of the financial reporting process, including the presentation
of the annual report in a valid XHTML format; and
identifying and assessing the risks of material misstatement related to the tagging of
information in the financial statements, in XBRL format using iXBRL technology. This
assessment was based on an understanding of the information tagging process
implemented by the Entity.
In our opinion, the financial statements, included in the annual report, are presented, in all
material respects, in accordance with the requirements established by the ESEF
Regulation.
On the additional matters provided in Article 10 of the Regulation (EU)
537/2014
Pursuant to Article 10 of the Regulation (EU) 537/2014 of the European Parliament and of
the Council, of 16 April 2014, and in addition to the key audit matters mentioned above, we
also report the followin:
We were first appointed as auditors of The Navigator Company, S.A. in the
shareholders general assembly held on 22 September 2017 for a first mandate from
2015 to 2018. We were appointed at the shareholders general assembly held on 9 April
2019 for a second mandate from 2019 to 2022.
376
Management has confirmed to us that they are not aware of any fraud or suspicion of
fraud having occurred that has a material effect on the financial statements. In planning
and executing our audit in accordance with ISA we maintained professional scepticism,
and we designed audit procedures to respond to the possibility of material
misstatement in the financial statements due to fraud. As a result of our work, we have
not identified any material misstatement of the financial statements due to fraud.
We confirm that the audit opinion we issue is consistent with the additional report that
we prepared and delivered to the supervisory body of the Entity on 30 March 2023.
We declare that we have not provided any prohibited services as described in Article 5
of the Regulation (EU) 537/2014 of the European Parliament and of the Council, of 16
April 2014, and we have remained independent of the Entity in conducting the audit.
3 April 2023
KPMG & Associados
Sociedade de Revisores Oficiais de Contas, S.A.
(no. 189 and registered at CMVM with no. 20161489)
represented by
Rui Filipe Dias Lopes
(ROC no. 1715 and registered at CMVM with no. 20161325)
Report and Opinion of the Audit Board
2022 ANNUAL REPORT REPORT AND OPINION OF THE AUDIT BOARD 378
The Navigator Company, S.A.
Report and Opinion of the Audit Board
Separate Financial Accounts
2022 Financial Year
Shareholders
8. In accordance with the Law, the Articles of Association and the terms of our mandate, we hereby submit the report
on our supervisory activities in 2022 and issue our opinion on The Individual Management Report and Separate
Financial Statements presented by the Board of Directors of the Navigator Company, SA, for the financial year
ended 31 December 2022.
9. Over the course of the year we regularly monitored the affairs of the Company and its most significant affiliates
and associates, with the frequency and to the extent we deemed appropriate, through periodic meetings with the
Company’s directors and senior management. We monitored the verification of the accounting records and
respective supporting documentation, as well as the effectiveness of the risk management, internal control and
internal audit systems. We monitored compliance with the Law and the Articles of Association. In the course of
our work we encountered no constraints whatsoever.
10. We met several times with the Statutory Auditor and External Auditor, KPMG & Associados, SROC, Lda, monitoring
its auditing activities and checking its independence. We assessed the Legal Accounts Certificate and the Audit
Report, with which we agree.
11. The Audit Board analyzed the proposals submitted to it for the provision of non-audit services by the External
Auditor, and approved those that concerned permitted services, did not affect the independence of the External
Auditor and complied with additional legal requirements.
12. In the course of our work we found that:
e) The Separate Statement of Income by Nature, the Separate Statement of Financial Position, the Separate
Statement of Comprehensive Income, the Separate Statement of Changes in Equity, the Separate Statement
of Cash Flows and the related Notes to the Separate Financial Statements, provide an adequate understanding
of the Company's financial position and results, comprehensive income, changes in equity, and cash flows;
f) The accounting policies and valuation criteria adopted comply with the International Financial Reporting
Standards (IFRS) as adopted in the European Union and are suitable to ensure that such criteria lead to a
correct valuation of the Company’s assets and results, following the analyses and recommendations issued
by the External Auditor;
g) The Management Report is sufficiently clear as to the evolution of the business and the situation of the
Company, offering a clear account of the most significant developments in its activities;
h) The Corporate Governance Report includes the information required by Article 29H of the Securities Code
and takes into account the recommendations of the Code of the Portuguese Institute for Corporate
Governance (IPCG).
2022 ANNUAL REPORT REPORT AND OPINION OF THE AUDIT BOARD 379
13. We are of the opinion that the proposal for application of results presented by the Board of Directors is not contrary
to the applicable legal and statutory provisions.
14. Accordingly, taking into consideration the information received from the Board of Directors and the Company
departments, and also the conclusions of the Legal Accounts Certificate and the Audit Report, we are of the opinion
that:
c) The Management Report be approved;
d) The Separate Financial Statements be approved;
e) The proposal for the application of results presented by the Board of Directors be approved.
15.
Finally, the members of the Audit Board wish to acknowledge and express their appreciation for the assistance
received from the Board of Directors, the senior managers of the Company and other staff, as well as the External
Auditor, KPMG & Associados, SROC, Lda.
Lisbon, 3 April 2023
The Chairman of the Audit Board
José Manuel Oliveira Vitorino
Member
Gonçalo Nuno Palha Gaio Picão Caldeira
Member
Maria da Graça Torres Ferreira da Cunha Gonçalves
Relatório do Governo Societário
RELATÓRIO & CONTAS 2022 DEMONSTRAÇÕES FINANCEIRAS SEPARADAS 380
2022 ANNUAL REPORT CORPORATE GOVERNANCE 381
Part I - Information on Shareholder Structure,
Organisation and Corporate Governance 382
A. SHAREHOLDER STRUCTURE 382
B. STATUTORY BODIES AND COMMITTEES 386
C. INTERNAL ORGANIZATION 437
D. REMUNERATION AND REMUNERATION REPORT 452
E. RELATED PARTY TRANSACTIONS AND CONFLICTS OF INTEREST 462
Part II - Corporate Government Assessment 465
Part III – Other Information 477
ANNEX 1 477
1) DISCLOSURES REFERRED TO IN ARTICLES 447 OF THE COMPANIES’ CODE (WITH REFERENCE TO 2022) 477
2) INFORMATION ON OWN SHARES (REQUIRED BY ARTICLES 66 AND 324 NO. 2 OF THE COMPANIES CODE) 477
ANNEX 2 478
REMUNERATION POLICY FOR MEMBERS OF THE CORPORATE BODIES
OF THE NAVIGATOR COMPANY (2021-2024) 478
ANNEX 3 484
CODE OF ETHICS AND CONDUCT 484
CONTENTS
CORPORATE GOVERNANCE
REPORT
2022 ANNUAL REPORT CORPORATE GOVERNANCE 382
Part I - Information on Shareholder Structure,
Organisation and Corporate Governance
A. Shareholder Structure
I. Capital Structure
1. Capital structure (share capital, number of shares, capital distribution
among shareholders, etc.), including indication of shares not admitted to
trading, different categories of shares, rights and duties attached to the
same, and the percentage of the capital represented by any such category
(article 29.º-H, no. 1, para. a) of the CVM)
The Navigator Company, S.A. has a share capital of 500,000,000 euros, fully paid up,
represented solely by 711,183,069 ordinary shares, without nominal value, the same rights
and duties being attached to all shares.
All shares representing the Company’s share capital are listed on the regulated Euronext Lisbon
market, managed by Euronext Lisbon – Sociedade Gestora de Mercados Regulamentados, S.A.
At the end of 2022, the Company carried out a new analysis of its shareholder base, identifying
and characterising its main institutional shareholders.
In addition to the Semapa Group, the majority shareholder with 69.67% of Navigator’s share
capital, about 185 institutional shareholders were identified and characterised, representing
about 15% of the shares issued.
Thus, in December 2022, the shareholder composition identified was as follows:
Shareholder composition
* Others does not include non identified, brokerage/trading and several
Semapa
Institutional Investors
Private Investors
Others*
2022 ANNUAL REPORT CORPORATE GOVERNANCE 383
Navigator's institutional shareholders, excluding the majority shareholder, were mainly from the
United States and Europe, at the end of 2022. The proportion of shareholders based in the United
States grew again in 2022 to 38% (vs. 26% in 2021 and 22% in 2020). Regarding shareholders
from Europe, we highlight Portuguese shareholders with 33% (vs. 33%), shareholders based in
the UK with around 7% (vs. 5%), and shareholders based in Germany with close to 7% (vs. 5%).
On the other hand, we verified a reduction in the weight of shareholders based in Spain to about
5% (vs. 13%).
In addition, a breakdown by investment style shows that around 25% of the shares were held by
institutional investors that pursue an Index Funds style strategy, approximately 24% of the
investors pursue a Value focused strategy and around 23% have a Growth strategy. 13% of
investors have GARP (Growth at Reasonable Price) strategies.
Shareholders by geography
(Institutional – excluding Semapa)
Shareholders by type of investment
(Institutional)
2022 ANNUAL REPORT CORPORATE GOVERNANCE 384
2. Restrictions on the transferability of shares, such as consent clauses for
disposal, or limitations on ownership of shares (Art. 29.º-H, no. 1, para.
b))
All Navigator shares are freely transferable.
3. Number of own shares, corresponding percentage of share capital and
percentage of voting rights which would correspond to own shares (Art.
29.º-H, no. 1, para. b))
On 31 December 2022, Navigator does not hold any own shares.
4. Significant agreements to which the Company is a party and which take
effect, are amended or terminate in the event of a change in the control of
the Company as a result of a takeover bid, together with the respective
effects, unless, due to its nature, disclosure of such agreements would be
seriously detrimental to the Company, except if the Company is
specifically required to disclose such information by other mandatory
provisions of law (Art. 29-H, no. 1, para. j).
The Company is not a party to significant financing, debt issue or other agreements entering
into effect, being amended or terminating in the event of a change to the Company’s control
following a takeover bid.
The Company has not adopted any mechanisms that determine payments or assumption of
fees in the case of the change of control or in the composition of the managing body, and which
are likely to harm the free transferability of shares and a shareholder assessment of the
performance of the members of the managing body.
5. Rules applicable to the renewal or revocation of defensive measures, in
particular those providing for limits on the number of votes which can be
held or cast by a single shareholder individually or in a concerted manner
with other shareholders
No defensive measures exist in the Company, particularly those providing for limits on the
number of votes which can be held or cast by a single shareholder individually or in a concerted
manner with other shareholders.
6. Shareholders’ agreements known to the Company or which might lead to
restrictions on the transfer of securities or voting rights (Art. 29-H, no. 1,
para. g).
The Company is not aware of the existence of any shareholder agreement which might lead to
restrictions on the transfer of securities or voting rights.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 385
II. Holdings of Shares and Bonds
7. Identification of persons and organisations who, directly or indirectly, own
qualifying holdings (articles 29-H, no. 1, para. c) and d) and 16), detailing
the attributable percentage of the share capital and votes and the
respective grounds
The owners of qualifying holdings in Navigator on 31 December 2020 are identified in the
following table:
Entity
Attribution
No. of shares
% capital
% voting rights not
suspended
Semapa – Sociedade de
Investimento e Gestão, SGPS, S.A.
Direct
497,617,299
69.9704%
69.9704%
8. Indication of the number of shares and bonds held by members of the
management and supervisory bodies
This information is provided in Annex I to this Report.
9. Special powers of the management board, in particular concerning
resolutions to increase capital (article 245-A (1) (i)) indicating, with
regard to these, the date on which they were granted, the period during
which such powers may be exercised, the upper limit for the increase in
share capital, shares already issued under the powers granted and the
manner in which the powers granted are implemented.
The Company’s Articles of Association do not authorize the Board of Directors to adopt
resolutions approving increases in share capital.
10. Information on the existence of significant dealings of a commercial
nature between holders of qualifying holdings and the Company.
All transactions taking place in 2022 between the company and qualifying shareholders are
described in Note 11.3 of the Annex to the consolidated accounts and Note 10.2 of the annex to
the individual financial statements. In 2022, in accordance with the Regulation on Conflict of
Interests and Related Parties Transactions and under the terms and conditions set out therein,
as described in point 89 et seq. of this report, there were no significant dealings of a
commercial nature between qualifying shareholders and the Company.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 386
B. Statutory Bodies and Committees
I. General Meeting
a) Composition of the general meeting*
* Over the reporting period
11. Officers of the General Meeting and their term of office (starting and
ending dates).
Rui Manuel Pinto Duarte (term of office from 05/27/2022 to 12/31/2022). The position of
Chairman of the General Meeting was vacant from June 10, 2021 until May 27, 2022, due to
the passing of the previous Chairman of the General Meeting.
Secretary: Luís Nuno Pessoa Ferreira Gaspar (term of office from 9/04/2019 to 31/12/2022)
b) Exercise of voting rights
12. Any restrictions on voting rights, such as limitations on the exercise of
voting rights based on the ownership of a given number or percentage of
shares, time limits for exercising voting rights, or systems for detaching
voting rights from ownership rights (Art. 29-H, no. 1, para. f);
There are no limits, in the Company, to the exercise of voting rights by the respective
shareholders.
Under Navigator’s Articles of Association, each share in the Company carries one vote.
Although the articles of association set out time limits for attending the General Meeting, the
mandatory legal rules governing this matter apply, such as Article 23-C of the Securities Code.
The time limit established in the Articles of Association for exercise of postal rights is the day
prior to the General Meeting.
The Company's Articles of Association were amended at the Annual General Meeting held on 27
May 2022, and from them they specifically govern electronic and postal voting. It is the
responsibility of the Chairman of the General Meeting to verify vote authenticity and regularity
and to ensure confidentiality up to the moment of voting, in accordance with the following
rules:
a) The voting declarations must be addressed to the Chairman of the General Meeting, and
received at the head office until the day before the General Meeting;
b) In case of electronic voting, the email message addressed to the Chairman of the General
Meeting of Shareholders must contain, as an attachment, a document in PDF format,
signed in accordance with the signature contained in the valid identification document of
the respective holder, containing the voting declarations regarding each of the items on
the agenda, as well as a copy of the holder's identification document. The Chairman of the
General Meeting may establish in the notice convening the meeting in question a system
2022 ANNUAL REPORT CORPORATE GOVERNANCE 387
different from the one described in this paragraph, which ensures equivalent security and
reliability;
c) In the case of exercising the right to vote by post, the envelope must contain a letter
addressed to the Chairman of the General Meeting, duly signed in accordance with the
signature on the valid identification document of the respective holder and containing the
voting declarations concerning each of the items on the agenda, as well as a copy of the
holder's identification document
d) Votes cast by these means shall be computed together with the votes that may be cast in
the General Assembly, and shall be considered as negative votes in relation to proposals
presented after they have been issued.
The General Meeting of Shareholders may also be held by telematic means, whenever this is
deemed appropriate and convenient, provided that the Chairman of the General Meeting
confirms that, for the purposes of holding the meeting, the respective means, the authenticity
of the declarations and the security of communications are ensured, and the company registers
its content and the respective participants.
For the purpose of identifying the Company's shareholders and end investors, the Company
has, in accordance with and for the purposes of the Securities Code, the right to be provided
with information on the identity of its shareholders by the entity managing the centralized
system or by the relevant financial intermediaries at any time, in order to be able to
communicate directly with them and facilitate the exercise of the rights inherent in their shares
and their involvement in the Company.
Prior to this statutory change, the Articles of Association allowed the Board of Directors to
regulate ways of exercising the right to vote other than in paper format, as long as they also
ensured the authenticity and confidentiality of the votes up to the moment of voting.
Although the Board of Directors has not exercised these powers, the Chairman of the Board of
the General Meeting has always accepted electronic voting as long as it is received under
equivalent conditions to paper ballots in terms of deadlines, intelligibility, guaranteed
authenticity, confidentiality and other formalities.
There are no systems for detaching rights of equity content.
13. Indication of the maximum percentage of the voting rights which can be
exercised by a single shareholder or by shareholders connected in any of
the forms envisaged in article 20 (1).
There are no provisions to this effect in the Articles of Association.
14. Identification of shareholder resolutions which, under the Articles of
Association, can only be adopted with a qualified majority, in addition to
those provided for by law, and details of the majorities required.
The Company has established no quorums for meeting and adopting resolutions at the General
Meeting different from those provided for on a supplementary basis in law.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 388
II. Corporate Boards and Supervision
(Board of Directors, Executive Committee and General and Supervisory Board)
a) COMPOSITION*
* Over the reporting period
15. Identification of the governance model adopted.
The company has adopted a statutory single-tier management model, i.e. with a Board of
Directors comprising executive and non-executive members, an Audit Board and a Statutory
Auditor, in accordance with the provisions of articles 278(1)(a) and 413(1)(b) of the Companies
Code.
16. Rules in the Articles of Association on procedural and material
requirements applicable to the appointment and replacement of members,
as the case may be, of the Board of Directors, the Executive Committee
and the General and Supervisory Board (article 29-H, no. 1, para. h).
Diversity Policy.
Presently, the Company’s Articles of Association contain no special rules on the appointment
and replacement of directors, and the general supplementary rules contained in the Companies
Code therefore apply here, i.e. shareholders have the power to appoint the directors (three to
seventeen) and the audit board.
However, the Articles of Association establish that a Director may be elected individually if
there are proposals subscribed and tabled by groups of shareholders, provided none of these
groups holds shares representing more than twenty per cent and less than ten per cent of the
share capital. No shareholder shall sign the proposal form for more than one list. Each proposal
shall identify no less than two electable persons.
If there are various proposals signed by different shareholders or shareholder groups, the
voting shall apply to the collection of these lists.
During 2020, the Navigator Board of Directors approved the Company's Diversity Principles,
which were reviewed in 2021. These principles enshrine the requirements and criteria regarding
the profile of new members of corporate bodies and are published on the company's website
(http://www.thenavigatorcompany.com/investidores/governo-da-sociedade)
These Diversity Principles consist of the formal recognition by the Company of the benefits of
diversity in its governing bodies, namely as a way to ensure greater balance in its composition,
to enhance the performance of each member and, together, in each body, to improve the
quality of decision-making processes and to contribute to their sustainable development.
Accordingly, and in order to promote diversity within the Company, the Company has accepted
that in addition to individual attributes such as competence, independence, integrity of
character, availability and experience, other requirements and diversity criteria are also
relevant in the composition of its governing bodies, such as gender diversity, different
2022 ANNUAL REPORT CORPORATE GOVERNANCE 389
professional qualifications and experience, the inclusion of members of different ages and from
different backgrounds or geographical origins.
In addition, in 2019 the Board of Directors changed the Regulations of the Appointments and
Appraisals Committee, which has consulting powers in terms of the appointment of the
governing bodies, to support the identification of potential members of the governing bodies
and in assessing the adequacy of their profile, knowledge, and curriculum, and should induce
transparent selection processes and that candidates who have greater merit be proposed and
better adapt to the requirements of the function, and promote within the organisation,
adequate diversity, including gender.
In this way, the Company understands that all the objectives resulting from the formal
adoption of a diversity policy are achieved, which is also demonstrated in reality.
Finally, and reinforcing the promotion of diversity, in 2022 the Company approved the 2023
Plan for Equality, with progress in relation to the 2021-2022 Plan for Equality, and disclosed
this Plan to the CMVM, and on the Navigator website, where it is also published
(http://www.thenavigatorcompany.com/Sustentabilidade/Planos-para-a-Igualdade).
17. Composition, as the case may be, of the Board of Directors, the Executive
Committee and the General and Supervisory Board, detailing the
provisions of the Articles of Association concerning the minimum and
maximum number of directors, duration of term of office, number of full
members, and the date when first appointed and the end of their terms of
office for each member.
The Articles of Association establish that the Board of Directors includes three to seventeen
members appointed for a renewable four-year term. At the General Meeting held on 27 May
2022, Shareholders approved the change of term in office of the members of the corporate
bodies to thee years, renewable.
On 9 April 2019, the Company’s General Meeting approved a resolution electing the members
of the Board of Directors for a four-year term from 2019 to 2022.
We indicate below the date of first appointment of each member, together with the date on
which their term of office expires:
2022 ANNUAL REPORT CORPORATE GOVERNANCE 390
Name
Date of first appointment
and end of mandate
Ricardo Miguel dos Santos Pacheco Pires
15
2015 – 2022
António José Pereira Redondo
2007 – 2022
Adriano Augusto da Silva Silveira
2007 – 2022
João Paulo Araújo Oliveira
2015 – 2022
João Paulo Cabete Gonçalves Lé
2020 – 2022
José Fernando Morais Carreira de Araújo
2007 – 2022
Nuno Miguel Moreira de Araújo Santos
2015 – 2022
Manuel Soares Ferreira Regalado
2004 – 2022
Maria Teresa Aliu Presas
2019 – 2022
Mariana Rita Antunes Marques dos Santos
2019 – 2022
Sandra Maria Soares Santos
2019 – 2022
Vítor Manuel Rocha Novais Gonçalves
2015 – 2022
Vítor Paulo Paranhos Pereira
2020 – 2022
The composition of the Board of Directors is freely available on the Company’s website at
http://www.thenavigatorcompany.com/Investidores/Governo-da-Sociedade.
18. Distinction between executive and non-executive members of the Board of
Directors and, in relation to non-executive directors, identification of
those who can be regarded as independent or, if applicable, identification
of the independent members of the General and Supervisory Board.
During 2022, and to date, six members of the Board of Directors exercised executive functions
and formed an Executive Committee, which was elected and whose powers were delegated by
the Board of Directors, and seven of the Directors exercised non-executive functions.
The executive members of the Board of Directors belong to the Executive Committee and are
identified below in point 28, the remaining being non-executive members.
Since throughout 2022 the number of non-executive directors represented 53% of the
members of the Board of Directors, we consider this percentage to be adequate to the size of
the Company and to the complexity of the risks associated to its activities and sufficient to
carry our efficiently the functions that are committed to them.
This suitability judgment took into account, in particular, the size of the Executive Committee
and the delegation of powers entrusted to it by the Board of Directors, the profile, age,
background and professional experience and the integrity of the members of that body, the set
of diversified competencies and the availability of non-executive members to carry out their
duties, which through the close cooperation developed with the Chairman of the Board of
Directors and the members of the Executive Committee, ensure an effective capacity for
monitoring, supervising and evaluating the activity of the executive members of the Board of
Directors.
15
Is Company Chairman since 1 January 2022.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 391
At the annual General Meeting held on 9 April 2019, which elected members of the governing
bodies, three new non-executive members of the Board of Directors were elected - Maria
Teresa Aliu Presas, Mariana Rita Antunes Marques dos Santos and Sandra Maria Soares Santos
- which can be considered independent, according to the criteria for measuring independence
defined in point 18.1 above and in Recommendation III.4 of the IPCG Corporate Governance
Code. The company therefore includes a number of independent non-executive directors of
42.86%, over one third, in accordance with the Recommendations of the IPCG Corporate
Governance Code.
The remaining 4 Non-Executive Directors, although not independent according to the above
criteria, gather the necessary suitability, experience and proved professional competence,
which allows to enrich and optimise the management of the Company from the perspective of
creating value, as well as ensuring an effective defence of the interests of all shareholders and
to ensure that Executive Directors are supervised and evaluated in an impartial, independent
and objective manner and, at the same time, that there are no conflicts of interest between the
interest and position of the shareholder and the Company.
19. Professional qualifications and other relevant biographical details of each
member, as applicable, of the Board of Directors, the General and
Supervisory Board and the Executive Committee.
Ricardo Miguel dos Santos Pacheco Pires
Ricardo Pires is a graduate in business administration from the Portuguese Catholic University,
with a specialisation in Corporate Finance from ISCTE and an MBA in business management
from Universidade Nova de Lisboa. He began his career in management consulting between
1999 and 2002, first at BDO Binder and later at GTE Consultores. From 2002 to 2008, he
worked at the Corporate Finance Department of ES Investment, where he carried out a number
of M&A and capital market projects in the sectors of Energy, Pulp & Paper and Food &
Beverages. Since 2008 he has worked at Semapa, initially as a Strategic Planning and New
Business Manager and later, starting in 2011, as Head of the Office of the Chairman of the
Board of Directors. He has been an Executive Director at Semapa since 2014, as well as holding
positions at other related companies. Since 2015, he has performed management duties at The
Navigator Company and at Secil. Since 2017, he is CEO of Semapa Next and took over in
March 2020 as Chairman of the Board of Directors of ETSA. He has been an executive director
of Semapa since 2014 and Chairman of its Executive Board since 2022, and also holds office in
other related companies. Since 2015, he has held directorships at The Navigator Company and
Secil, and in 2022 will become Chairman of the Board of Directors of these companies. In 2017,
he was appointed CEO of Semapa Next and in 2022 he will become Chairman of the Board of
Directors of that company. He has been Chairman of the Board of Directors of ETSA since
2020. In 2021, he taught a subject in a master's degree course at Universidade Católica de
Lisboa.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 392
António José Pereira Redondo
António Redondo holds a degree in chemical engineering from the Science and Technology
Faculty of the University of Coimbra, attended the Business Management course and has an
MBA specialising in marketing, from the Portuguese Catholic University. He joined Soporcel in
1987 where he held a series of posts in technical, production, marketing and sales
management areas of the company. He has been an executive director of the Company since
April 2007, was Chief Commercial Officer from 2007 to 2019, with responsibilities in the areas
of Marketing, Sales, Revenue Management, Supply Chain, Logistics and Product Development.
In 2020 he was appointed CEO of the Company. In 2020 he is appointed CEO of the Company.
He is also Chairman of Biond – Associação das Bioindústrias de Base Florestal, Director of CIP
(Confederação Empresarial de Portugal), member of the Boards of CEPI (Confederation of
European Paper Industries) and EURO-GRAPH (European Association of Graphic Paper
Producers) and Member of the Board of COTEC Portugal - Associação Empresarial para a
Inovação.
Adriano Augusto da Silva Silveira
Adriano Silveira has a degree in chemical engineering from the School of Engineering of the
University of Porto. He began his career at the Environmental Studies Service, having been part
of Empresa Nacional de Urânio (1979) and Empresa Minas de Jales (1983). He joined Soporcel
in 1983, where he held several positions of responsibility in the areas of energy recovery, pulp
and paper production, project management, maintenance and engineering. He has been a
member of the Company’s Board of Directors since 2007, serving as an Executive Director from
April 2007 to July 2015, having reinstated the Executive Committee on 1 January 2020.
João Paulo Araújo Oliveira
João Paulo Oliveira has a degree in industrial engineering from the Faculty of Science and
Technology, Universidade Nova de Lisboa (1988) and an MBA in Commercial Engineering and
Management from AEP – ESADE, Spain (1994). He began his career at the Bosch Group in
1989. He was industrial manager for Bosch in China from 1994 to 1996. Subsequently, he was
involved in an acquisition project for a company in Chile, and also held positions in the Bosch
Group’s operations in France and Germany. From 2002 to 2015, he was Managing Director of
Bosch Termotecnologia S.A. In his last 8 years at the Bosch Group, he was Chairman of the
Group’s Hot Water Business Unit, whose global competence centre is located in Aveiro. He was
chairman of the Portuguese-German Chamber of Commerce and Industry from 2009 to 2012.
He also sits on the the AICEP Advisory Board and the Supervisory Board of the Fraunhofer
Institute in Portugal. He has been an executive director of the Company since July 2015.
João Paulo Cabete Gonçalves Lé
João Lé has a degree in Agronomy in the specialty of Agrarian Economics from the Instituto
Superior de Agronomia (ISA) of the Technical University of Lisbon, has a Postgraduate Diploma
in Silviculture of the Fast-Growing Species by ISA and University of Trás-os-Montes and Alto
Douro and a Postgraduate Diploma in Management with a Specialisation in Finance from ISCTE,
University of Lisbon. He has been with The Navigator Company Group for about 30 years
having assumed responsibility for the Forestry Area in August 2007 and in July 2016 he was
appointed CEO of Portucel Mozambique, responsible for the project to implement a forest-based
industry in Mozambique through DUAT (areas assigned by the Government) with about 360
2022 ANNUAL REPORT CORPORATE GOVERNANCE 393
thousand hectares in two provinces. He has been an Executive Director of the Company since
January 2020.
José Fernando Morais Carreira de Araújo
Fernando Araújo has a Law degree from Universidade Lusíada do Porto (2000) and a bachelor's
degree in Accounting and Management from Instituto Superior de Contabilidade e
Administração do Porto (ISCAP - 1986) and a specialist diploma in Financial Control from the
same institution (1992). He is a Chartered Accountant since 1995. Certified Accountant since
1987. He is Vice-Chairman of the Board of the General Meeting of BIOND since 2022. He is a
member of the Audit Board of the Order of Statutory Auditors since January 2021. He has been
a member of the Board of Directors of the Portuguese Tax Association since 2019. He has a
postgraduate degree in Advanced Financial Accounting (ISCTE - 2002/2003), a postgraduate
degree in Tax Law from the Lisbon Law School (FDL - 2002/2003) and a postgraduate degree
in Corporate Governance from the Instituto Superior de Economia e Gestão de Lisboa (ISEG -
2006/2007). He completed an MBA in Corporate Reporting at ISCTE - IUL in 2016. He began
his professional career in 1987, at Sportrade, having taken on the role of head of accounting at
Eurofer between 1988 and 1993 and was head of Administrative Services at COLEP from 1991
to 1993. Between 1993 and 2001 he worked in the tax area at KPMG, where he was Senior Tax
Manager from 1993 to 2001. He was Director of Tax and Accounting at Secil between 2001 and
2005, at Semapa between 2002 and 2006, and at the Company between 2006 and 2007. He
has been an executive director of the Company since April 2007.
Nuno Miguel Moreira de Araújo Santos
Nuno Santos has a degree in Civil Engineering from Instituto Superior Técnico (1993) and an
MBA from INSEAD (1996). He started his professional career at McKinsey & Company in 1993
and until March 2015 he was Senior Partner (Director) and leader of the Energy, Commodities
& Industry Practice at the Iberian Office of McKinsey & Company. He was also a member of the
McKinsey & Company Global Energy, Commodities & Industry Practice Leadership Committee.
He assumed the functions of Executive Director of The Navigator Company in April 2015.
Manuel Soares Ferreira Regalado
Manuel Regalado has a degree in finance from Instituto Superior de Economia e Gestão (ISEG)
in Lisbon (1972) and completed the Senior Executive Programme of the London Business
School (1997). He began his professional career in 1971, holding various internal auditing,
management control and planning and investment project analysis positions from this year
until 1984. From 1984 to 1994, and from 1998 to 2004, he was appointed to a variety of
management positions and directorships in a range of sectors, including banking, insurance,
manufacturing and energy, in Edinfor, COSEC, IAPMEI and Hidroelétrica de Cahora-Barra and
Banco BPI (in Portugal, Africa and Latin America). Between 1994 and 1998, he served on the
Board of Directors of Portucel, and was also part of the statutory bodies of INAPA and CELPA.
He is member of the Board of Directors of The Navigator Company since 2004 and was an
executive director until 2016.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 394
Maria Teresa Aliu Presas
Maria Teresa Aliu Presas is a graduate of the Instituto Superior de Psicologia Aplicada, in
Lisbon. She made her career in the paper industry, having joined the Tetra Pak Group in 1982,
where she held several positions in Portugal, Switzerland, international headquarters, and in
Brussels, in the areas of Marketing and Communication, Environment and European Affairs,
namely Vice President for Europe and responsible for the environment for the entire Group.
From 2003 to 2011 she directed the European Confederation of the Paper Industry (CEPI). She
was a member of the board of directors of several European associations as well as a non-
executive director of the company Powerflute Oy. She currently collaborates with the consultant
Magellan in Brussels, is a non-executive director of the World Bioeconomy Forum and has been
a non-executive director of Navigator since 2019.
Mariana Rita Antunes Marques dos Santos
Mariana Marques dos Santos graduated in Business Management from Universidade Católica
Portuguesa and complemented her training with an MBA from INSEAD (Fontainebleau), having
also attended the same programme at Kellogg - Northwestern University, in Chicago. From
1989 to 2006, she was a lecturer at ISCTE, both in the areas of quantitative methods, and on
internationalisation strategy and policies, at the executive school, IBS-ISCTE Business School.
Along with academic activities, she developed a business career linked to different areas and
functions. Starting by experiencing the dynamics of the financial markets, she collaborated with
Lloyds Bank in the area of securities portfolio management. She then joined a venture capital
team - SFIR, where she was a project analyst from 1991 to 1992. She was also a consultant in
Madrid, in a multinational company, Arthur D. Little, being associated with several projects,
including the launch of the Portuguese branch, in the years 1995 and 1996. She then took on
different international areas, within Grupo Abrantina, between 1996 and 2007, namely in
Mozambique and Germany, managing projects in several areas such as food and the production
and distribution of construction materials. At the end of 2007, she embraced her own business
project, launching NBC Medical, in the area of international trade of medicine, where she was
managing partner up to June 2021. She has been a member of the Board of FAE – Forum de
Administradores e Gestores de Empresas, since March 2022. She has been a non-executive
Director of The Navigator Company since May 2019.
Sandra Maria Soares Santos
Sandra Maria Soares Santos has a degree in management from the Faculty of Economics of
Porto (1989-94) and completed an MBA at PBS - Porto Business School (1999). She started her
career at Banco Espírito Santo and at the University of Porto in 1994, where she taught as a
guest lecturer. At BES, she performed several technical and commercial functions, at a time
when the Bank was incorporating young managers and substantially transforming its
organisational and business structure. She started her career at Grupo BA, at the end of 1999,
as Controller, a role she built when the group started its geographical expansion. Since then,
she has held various positions, such as financial director, human resources director, factory
director and CFO. As CFO (2007), she had an active participation in the acquisition and
integration processes of the acquired companies. In 2012, she was posted to be CFO in another
business, plastic packaging, in which BA shareholders decided to invest, a mission that ended a
year later. Since 2014 she is CEO and member of the Board of Directors of Grupo BA. Grupo BA
now has industrial operations in 7 European countries, 12 industrial units, 4,100 employees and
an annual turnover of 1,500 million euros. Presently, she is part of the Board of Directors of the
2022 ANNUAL REPORT CORPORATE GOVERNANCE 395
Business Roundtable Portugal Association, created in 2021 with the ambition of helping to
make Portugal grow. She has been a non-executive director of Navigator since April 2019.
Vítor Manuel Rocha Novais Gonçalves
Vítor Novais Gonçalves has a degree in business management from ISC-HEC in Brussels and
has more than 30 years of professional experience with executive management responsibilities
in the Consumer Products, Telecommunications and Finance sectors. He began his professional
career in 1984 at Unilever as a Management Trainee, and subsequently as a Product Manager
and Market Manager. From 1989 to 1992, he worked at Citibank Portugal, initially as a Venture
Capital Business Manager and later as head of Corporate Finance and member of the
Management Committee. Between 1992 and 2000, he worked in the financial area of the José
de Mello Group, served as director at several companies and serving, among other things, as
Strategic Marketing and Development Manager of Banco Mello and General Manager of
Companhia de Seguros Império. From 2001 to 2009, he worked in the telecommunications
area of the SGC Group as a director of SGC Comunicações, where he was in charge of strategic
marketing and international business development. He was a non executive dorector at
SEMAPA until 27 May 2022. Among other positions, he has been a Director at Zoom
Investment, Semapa and The Navigator Companys, in the latter case from 2015.
Vítor Paulo Paranhos Pereira
Vítor Paranhos Pereira has a degree in Economics from the Catholic University of Portugal and
attended AESE (University of Navarra). He started his professional activity in 1982, at the
company Gaspar Marques Campos Correia & Cª. Lda., as Financial Director until 1987. From
1987 to 1989, he held the position of Deputy Financial Director at the Instituto do Comércio
Externo de Portugal (ICEP). In 1989 he joined the Group as Financial Director of Sodim, having
been appointed member of the Board of Directors of Sodim in 2009, a function he held until
May 2018, and subsequently from March 2020 until the present date. He also performs
management functions in several companies related to Sodim, namely, since 1998 at Hotel
Ritz. Between 2001 and 2016, he held management positions at Hotel Villa Magna. He has
been a director of Sonagi since 1995 and Chairman of the Board of Directors since 2020. He
was appointed director of Refundos in 2005, serving as Chairman of the Board of Directors of
that company from 2018 until May 2020. From 2006 to 2015, he held the position of Chairman
of the Audit Board of the Portuguese Hospitality Association (AHP) and in April 2019 he was
appointed Chairman of the Board of the General Meeting of this entity. From 2007 to 2016, he
was Chairman of the Board of the General Meeting of the Portuguese Association of Investment
Funds, Pensions and Wealth (APFIPP). He served as Member of the Supervisory Board of
Eurovida - Companhia de Seguros, S.A. and Popular Seguros - Companhia de Seguros, S.A.
from 2009 to 2018. In 2014, he was appointed member of the Board of Directors of Semapa.
Since 2020 he has been an Executive Director of Semapa, and other related companies, and
has held management positions at The Navigator Company and Secil since February and March
2020.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 396
20. Regular and significant family, professional or business relationships of
the members, as applicable, of the Board of Directors, General and
Supervisory Board and Executive Committee with shareholders with
qualified holdings exceeding 2% of voting rights.
Among the members of the Company's Board of Directors, during the reporting year, the
Directors Ricardo Miguel dos Santos Pacheco Pires, Vítor Paulo Paranhos Pereira and Vítor
Manuel Galvão Rocha Novais Gonçalves were also Directors of the shareholder SEMAPA, in the
latter case until 27 May 2022.
21. Organisational or functional charts showing the division of powers
between the different corporate boards, committees and/or company
divisions, including information on delegated powers, in particular with
regard to delegation of the daily management of the Company.
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NOTE
Changes in 2022
- Creation of a structure of Business Intelligence, Analysis and Planning (BIA&P) dedicated to Forestry in May;
- Creation of a structure of Business Intelligence, Analysis and Planning (BIA&P) dedicated to Tissue in July;
- Creation of a structure of E-Commerce in October;
* Positions occupied internaly
2022 ANNUAL REPORT CORPORATE GOVERNANCE 398
EXECUTIVE COMMITTEE
Between 1 January and 31 December 2022, the Executive Committee (which can include three
to nine members, in accordance with the articles of association) was composed of six members,
who shared among themselves the following list of responsibilities:
António José Pereira Redondo
Communication and Brand Division
Risk Management Division
Talent Management and Organisational Development Division
Adriano Augusto da Silva Silveira
Environment Division
Aveiro Industrial Division
Figueira da Foz Industrial Division
Setubal Industrial Division
Central Technical Division
João Paulo Araújo Oliveira
Logistics Division
Marketing Division
Revenue Management Department
Supply Chain Division
Technical Product Division
Europe Paper Sales Division
International Paper Sales Division
João Paulo Cabete Gonçalves Lé
Wood Supply Division
Forestry Management Division
Portucel Mozambique
RAIZ – Forest and Paper Research Institute
Sustainability Division
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José Fernando Morais Carreira de Araújo
Accounting and Remuneration Division
Management Control Division
Financial Division
Tax Division
Human Resources Division
Legal Services, Compliance and Public Affairs Division
Information Systems Division
Digital Transition Division
Empremédia – Insurance Brokers
Investor Relations
Nuno Miguel Moreira de Araújo Santos
Business Development and New Business Division
Tissue Sales Division
Energy
Tissue Industrial Division
Materials Management Division
Supply Chain Tissue
Pulp Sales Division
The following powers are delegated to the Executive Committee:
a) To propose the Company’s policies, aims and strategies to the Board of Directors;
b) To propose to the Board of Directors operating budgets and medium- and long-term
investment and development plans, and to implement these once approved;
c) To approve budget alterations during the year, including transfers between cost
centres not exceeding twenty million euros each year;
d) To approve contracts for the acquisition of goods and services of a value each year no
greater than twenty million euros;
e) To approve financing contracts, to apply for bank guarantees, or to accept any other
liabilities which represent increased indebtedness, totalling no more than twenty
million euros each year;
f) To acquire, dispose of or encumber the Company’s fixed assets of a value, in each
individual case, of up to five per cent of the paid-up share capital;
2022 ANNUAL REPORT CORPORATE GOVERNANCE 400
g) To lease or let any immoveable property;
h) To represent the Company in or out of court, as claimant or respondent, and to bring
or follow up any judicial or arbitral actions, confess or desist, settle or agree to
arbitration;
i) To acquire, dispose of or encumber holdings in other companies, of a value of no more
than twenty million euros each year;
j) To resolve on executing acquisition and disposal of own shares, when this has been
deliberated by the General Meeting, in keeping with the terms of such resolution;
k) To manage holdings in other companies, jointly with the Chairman of the Board of
Directors, namely by designating, with the agreement of the latter, the representatives
in the respective governing bodies, and setting guidelines for the acts of these
representatives;
l) To enter into, amend and terminate employment contracts;
m) To open, transact and close bank accounts;
n) To appoint Company attorneys;
o) In general, all powers which may lawfully be delegated, with any limitations deriving
from the provisions of the preceding paragraphs.
Jointly with the Chairman of the Board of Directors, the Executive Committee may also resolve
on the matters indicated in items c), d), e) and i) above when the respective values, calculated
on the terms set out therein, are greater than twenty million euros but no greater than fifty
million euros.
The Chairman of the Board of Directors has the powers assigned to him by Law and the Articles
of Association. The competence to change any conditions of contracts previously entered into
and covered by the aforementioned items c), d), e) and i) will fall to the body or bodies that
would be competent to execute them.
The Executive Committee may discuss all matters within the sphere of competence of the
Board of Directors, notwithstanding that it may only resolve on matters delegated to it.
The Regulation of the Executive Committee, approved by the Board of Directors, also
establishes the performance regime for Executive Directors.
Decisions regarding the definition of the Company's strategy, as well as its general policies and
the corporate structure of the Navigator Group, are matters for the Board of Directors, and the
Executive Committee does not have delegated powers in this regard. Thus, Non-Executive
Directors participate in the definition of the strategy, main policies, business structure and
decisions that should be considered strategic due to their amount or risk, as well as in the
assessment of their compliance.
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The Company's management is centered on the articulation between the Board of Directors and
the Executive Committee. Coordination and approximation were ensured by the close
cooperation developed by the Chairman of the Board of Directors, Ricardo Pires, with the
executive team, by the availability of the members of the Executive Committee for the regular
transmission of all relevant or urgent information, or that is requested, regarding the current
management of the Company to the non-executive members of the Board of Directors, in order
to allow permanent monitoring of corporate life, and by calling meetings of the Board of
Directors for all strategic decisions or considered especially relevant, even if these fall within
the scope of generally delegated powers, and also by the presence of the Chairman of the
Board of Directors in some meetings of the Executive Committee of the Company.
Also, for the other members of the governing bodies, the requested information is provided by
the members of the Executive Committee in a timely and appropriate manner.
To ensure a regular transmission of information, the Chairman of the Executive Committee
sends the notices and minutes of the respective meetings to the Chairman of the Supervisory
Board. The Company's other committees and governing bodies also ensure, in a timely and
appropriate manner and in accordance with the respective operating regulations, the flow of
information, namely, through the availability of notices and minutes, under the terms
necessary and appropriate to the exercise of legal and statutory powers by the remaining
bodies and commissions.
In relation to strategic planning and investment policy, and without prejudice to the portfolio to
which reference is made, it is clarified that it is by nature an area of greater intervention by
non-executive members and that had significant involvement by the Chairman of the Board of
Directors. Thus, non-executive directors participate in the definition of the strategy, main
policies, business structure and decisions that should be considered strategic due to their
amount or risk, as well as in the assessment of their compliance.
It is important to mention, in terms of sustainability, the functions of the Sustainability Division
which, jointly with those of the different Divisions of the Company and the Sustainability
Forum, form several working groups to deal with specific topics, which have been developing
their activity under the supervision of Executive Committee and involving all group companies
in a transversal way. As a result of this activity, the Company prepares its “Sustainability
Report” annually, which, in a consolidated perspective, and in response to the legal
requirements introduced by Decree-Law no. 89/2017, of 28 July, contains a detailed analysis of
the approach and commitment of the Company to sustainability topics. Thus, and through the
observance and implementation of the mentioned strategic principles and in the terms best
developed in the referred report, the Company ensures long-term success, and with a
significant contribution to the community in general.
At the end of 2018, internal regulations of the Board of Directors and Supervisory Board were
reviewed, approved and disclosed, as well as the internal commissions identified below, which
contain rules of operation, competence and articulation between the various bodies and
commissions. Under the terms of the aforementioned regulations and other applicable rules,
the corporate bodies and the other committees of the Company must prepare complete
minutes of the respective meetings.
The governing bodies and internal commissions identified above are required, under their
terms, internal operating regulations to make available to each other, under the legally and
2022 ANNUAL REPORT CORPORATE GOVERNANCE 402
statutory required terms, all the information and documentation necessary for the exercise of
the legal and statutory powers of each of the other bodies and commissions, and the various
departments and divisions of the Company must collaborate in the production, treatment and
dissemination of said information, in an appropriate, rigorous and timely manner.
The regulations of the Board of Directors and of the Supervisory Board also establish, in
particular, mechanisms that guarantee, within the limits of the applicable legislation and
regulations, the access of its members to the Company's Employees and to all information that
is necessary for the assessment of the performance, situation and development prospects of
the Company, including and without limiting minutes, supporting documentation of the
resolutions taken, notices and archives of the meetings of the Board of Directors and the
respective Executive Committee, without prejudice to being able to access other documents or
people who may be asked for clarification.
It should be noted that the internal regulations of the Board of Directors and the Audit Board
were revised in 2020, following the publication of Law no. 50/2020, of 25 August and the
revision to the 2018 IPCG Corporate Governance Code that took place in 2020.
b) OPERATION
22. Existence of rules of procedure for the Board of Directors, the General and
Supervisory Board and the Executive Committee, as the case may be, and
place where these may be consulted.
The Internal Rules of Procedure of the Board of Directors of Navigator are published on the
Company’s website, in the Investor Relations area, and are therefore freely available for
consultation at http://www.thenavigatorcompany.com/Investidores/Governo-da-Sociedade.
The Internal Rules of Procedure of the Board of Directors govern the exercise of the functions,
chairman, frequency of the meetings, functioning and framework of duties of its members.
In accordance with these Rules of Procedure, and the applicable legislation:
Directors may have access to all Company information and staff for assessing
performance, the situation and the outlooks on the development of the Company,
including, namely, minutes, documents supporting decisions taken, convening notices
and records on the meetings of the Executive Committee, without prejudice to access to
all other documents or persons who may be called upon to provide clarifications.
The Board of Directors must ensure the timely and suitable flow of information, especially
regarding the respective calls for meetings and minutes, required for the performance of
the functions, determined by law and the bylaws, of each of the remaining corporate
bodies and committees.
Non-executive Directors should participate in the definition, by the managing body, of the
strategy, main policies, business structure and decisions that should be deemed strategic for
the Company due to their amount, risk or special characteristics as well as in the assessment of
the accomplishment of these actions.
The Directors in the Executive Committee may not perform executive functions in entities
outside of the Company’s group, except if the activity of such entities is deemed to be ancillary
or complementary to the group’s activity or is not very time-consuming.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 403
The Directors who are not in the Executive Committee may perform management functions
(executive or not) in entities outside of the Company’s group, where such companies do not
carry out activities that compete with that of the Company, or in companies directly or
indirectly held by the Company, and the Chairman of the Board of Directors must be notified
before the start of such functions.
The following matters may not be generally delegated:
a) The definition of the strategy and main policies of the Company, although the Board of
Directors may delegate to the Executive Committee the drafting of the preliminary
strategic plan and investment policy, subject to the approval of the Board of Directors;
b) The organisation and coordination of the business structure; and
c) Matters that should be considered strategic, by virtue of the amounts involved, the
risk, or special characteristics.
The Board of Directors shall evaluate its performance annually, as well as the performance of
the Executive Committee and of other Committees and managing directors, if any, taking into
account the compliance with the Company’s strategic plan and budget, risk management, its
internal operation and the contribution of each member to that purpose, and the functioning
between the Company’s Bodies and Committees, identifying the ways in which such
performance may be improved.
23. Number of meetings held and rate of meeting attendance of each member
of the Board of Directors, General and Supervisory Board and Executive
Committee, as applicable.
During the 2022 financial year, the Board of Directors held seven meetings, minutes of which
were drawn up. All members of the Board of Directors attended all seven meetings, which
corresponds to an attendance rate of 100%, except for Sandra Maria Soares Santos, who was
unable to attend one meeting, her absence having been duly justified.
Detailed minutes are drawn up for the Board of Directors’ meetings, in accordance with its
Rules of Procedure.
The number of meetings of the Board of Directors is freely available on the Company’s website
at http://www.thenavigatorcompany.com/Investidores/Governo-da-Sociedade.
24. Indication of the company bodies empowered to assess the performance
of executive directors.
The Remuneration Committee draws up the Remuneration Policy, which defines how the
system will work, and prepares the entire framework for assessing executive directors. The
performance assessment of each executive director follows an internal process structured
under the leadership of the respective person in charge (i.e. under the responsibility of the
person who chairs the team, in the case of the members of the Executive Committee, and
under the responsibility of the Chairman of the Board of Directors, in the case of the Chairman
of the Executive Committee) and in which the non-executive directors whom the person in
charge considers pertinent to involve also participate.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 404
The Nomination and Evaluation Committee is also involved in this process, currently made up
of 3 non-executive members of the Board of Directors, which is responsible for monitoring the
performance evaluation system of the executive management and the attribution of
remuneration by the company and for pronouncing on proposals for the individual performance
evaluation of the executive management, which makes it unnecessary for the Board of
Directors itself to be involved in the performance evaluation of the executive directors.
Finally, the Remuneration Committee is responsible for confirming, with regard to the
performance evaluation, the respective achievement factors and ensuring the overall
consistency of the process by setting the variable remuneration.
Therefore, in 2022 and for the year 2021, the Appointments and Assessment Committee met
and decided on the individual performance proposals of the members of the Executive
Committee, Adriano Augusto da Silva Silveira, João Paulo Araújo Oliveira, João Paulo Cabete
Gonçalves Lé, José Fernando Morais Carreira de Araújo and Nuno Miguel Moreira Araújo
Santos, issued by the respective Chairman, and of the latter, António José Pereira Redondo,
issued by the Chairman, communicating its opinion to the Remuneration Committee. These
appraisal proposals were based on application of the basic criteria for assessing the
performance of executive directors in force in Navigator and better described in item 25.
In turn, and as provided in the Regulations of the Board of Directors and the Regulations of the
Remuneration Committee, the Board of Directors, with the Remuneration Committee, shall
assess annually its performance, as well as the performance of its committees, including the
Executive Committee, taking into account compliance with the Company's strategic plan and
budget, risk management, its internal functioning and the contribution of each member to this
effect, and the relationship between the bodies and committees of the company. Under the
terms foreseen in the respective regulations, the Appointments and Assessment Committee
monitors the overall assessment of the performance of the Board of Directors.
The evaluation of the executive directors as well as the self-assessment of the Board of
Directors and its committees took place in 2022 for the performance in 2021 and will take place
in 2023 for the performance in 2022, as described above.
25. Predetermined criteria for assessing the performance of executive
directors.
The basic criteria for assessing the performance of executive directors for the 2021-2024 period
are those defined in section 7 of chapter IV of the Remuneration Policy for defining the variable
component of remuneration. These criteria are materialized through a system of quantitative
and qualitative KPIs, related to the performance of the company (general business indicators,
with a weight of 65%) and of the director in question (specific objectives, with a weight of
20%, and behavioral indicators, with a weight of 15%). Within the general business indicators,
EBITDA, net income, cash flow, and Total Shareholder Return vs Peers are of particular
relevance, while the behavioral competencies include the alignment of each director with the
long-term interests and sustainability of the company.
In addition to these criteria, in alignment with the commitments assumed by the Company in
its sustainability strategy and recognizing the importance of the efficient use of energy and the
need to reduce fossil CO2 emissions from economic activities, the implementation of the
corporate program for energy efficiency, approved in 2016, is also considered in the weighting.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 405
26. Availability of each of the members of the Board of Directors, the General
and Supervisory Board and the Executive Committee, as the case may be,
indicating office held simultaneously in other companies, inside and
outside the Group, and other relevant activities carried out by the
members of these bodies during the period.
The members of the Board of Directors have the appropriate availability to perform the duties
entrusted to them. The Directors’ other activities, outside the business group to which
Navigator belongs, do not impede their availability for performing their duties within the
Navigator Group.
In addition to the activities listed in item 19, the directors also hold corporate office in other
companies as detailed below:
Ricardo Miguel dos Santos Pacheco Pires
Offices held in Navigator Group Companies
Chairman of the Board of Directors of The Navigator Company, S.A.
Offices held in other companies/entities
Chairman of the Board of Directors of ABAPOR - Comércio e Indústria de Carnes, S.A.
16
Chairman of the Board of Directors of Aphelion, S.A.
Member of the Board of Directors of Biological - Gestão de Resíduos Industriais, Lda.
17
Member of the Board of Directors of CIMO – Gestão de Participações, SGPS, S.A.
Chairman of the Board of Directors of ETSA LOG, S.A.
18
Chairman of the Board of Directors of ETSA - Investimentos, SGPS, S.A.
Chairman of the Board of Directors of I.T.S. - Indústria Transformadora de
Subprodutos, S.A.
19
Member of the Board of Directors of Pyrus Agricultural LLC
Member of the Board of Directors of Pyrus Investments LLC
Member of the Board of Directors of Pyrus Real Estate LLC
Chairman of the Board of Directors of Sebol - Comércio e Indústria de Sebo, S.A.
20
Chairman of the Board of Directors of Secil - Companhia Geral de Cal e Cimento, S.A.
Member of the Board of Directors and CEO at Semapa – Sociedade de Investimento e
Gestão, SGPS, S.A.
Member of the Board of Directors of Semapa Inversiones, S.L.
Member of the Board of Directors of Semapa Next, S.A.
16
In office until 27 May 2022.
17
In office until 27 May 2022.
18
In office until 27 May 2022.
19
In office until 27 May 2022.
20
In office until 27 May 2022.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 406
Member of the Board of Directors of SODIM, SGPS, S.A.
Member of the Board of Directors of UPSIS, S.A.
António José Pereira Redondo
Offices held in Navigator Group Companies
CEO and member of the Board of Directors at The Navigator Company, S.A.
Member of the Board of Directors of Bosques do Atlantico, S.L.
Chairman of the Board of Directors of Enerpulp - Cogeração Energética de Pasta, S.A.
Chairman of the Board of Directors of Eucaliptusland - Sociedade de Gestão de
Património Florestal, S.A.
Chairman of the Board of Directors of Navigator Brands, S.A.
Chairman of the Board of Directors of Navigator International Holding, SGPS, S.A.
21
Member of the Board of Directors of Navigator North America, INC.
Chairman of the Board of Directors of Navigator Paper Figueira, S.A.
Member of the Board of Directors of Navigator Paper México S. DE R.L. DE C.V.
Chairman of the Board of Directors of Navigator Paper Setúbal, S.A.
Chairman of the Board of Directors of Navigator Parques Industriais, S.A.
Chairman of the Board of Directors of Navigator Pulp Aveiro, S.A.
Chairman of the Board of Directors of Navigator Pulp Figueira, S.A.
Chairman of the Board of Directors of Navigator Pulp Setúbal, S.A.
Chairman of the Board of Directors of Navigator Tissue Aveiro, S.A.
Chairman of the Board of Directors of Navigator Tissue Ibérica, S.A.
22
Chairman of the Board of Directors of Navigator Tissue Ródão, S.A.
Offices held in other companies/entities
Did not perform functions in other companies/entities in 2022.
Adriano Augusto da Silva Silveira
Offices held in Navigator Group Companies
Member of the Board of Directors and of the Executive Committee of The Navigator
Company, S.A.
Chairman of the Board of Directors of About The Future, S.A.
23
Member of the Board of Directors of Enerpulp - Cogeração Energética de Pasta, S.A.
21
In office until 11 October 2022, date of company liquidation.
22
In office until 31 January 2022.
23
In office until 30 September 2022, date of company liquidation.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 407
Member of the Board of Directors of Eucaliptusland - Sociedade de Gestão de
Património Florestal, S.A.
Member of the Board of Directors of Navigator Brands, S.A.
Member of the Board of Directors of Navigator International Holding, SGPS, S.A.
24
Member of the Board of Directors of Navigator Paper Figueira, S.A.
Member of the Board of Directors of Navigator Paper Setúbal, S.A.
Member of the Board of Directors of Navigator Parques Industriais, S.A.
Member of the Board of Directors of Navigator Pulp Aveiro, S.A.
Member of the Board of Directors of Navigator Pulp Figueira, S.A.
Member of the Board of Directors of Navigator Pulp Setúbal, S.A.
Member of the Board of Directors of Navigator Tissue Aveiro, S.A.
Member of the Board of Directors of Navigator Tissue Ibérica, S.A.
25
Member of the Board of Directors of Navigator Tissue Ródão, S.A.
Member of the Board of Directors of RAIZ - Instituto de Investigação da Floresta e do
Papel
Offices held in other companies/entities
Member of the Board of Directors of APIGEE in representation of The Navigator
Company, S.A.
Member of the Consultant Board of APCER – Associação Portuguesa de Cerificação
Member of the General Board of Biond – Associação das Bioindústrias de Base
Florestal, representing Navigator Pulp Aveiro, S.A.
João Paulo Araújo Oliveira
Offices held in Navigator Group Companies
Member of the Board of Directors and Executive Director of The Navigator Company,
S.A.
Member of the Board of Directors of Bosques do Atlantico, S.L.
Member of the Board of Directors of Enerpulp - Cogeração Energética de Pasta, S.A.
Member of the Board of Directors of Eucaliptusland - Sociedade de Gestão de
Património Florestal, S.A.
Member of the Board of Directors of Navigator Afrique du Nord, SARLAU
Member of the Board of Directors of Navigator Brands, S.A.
Member of the Board of Directors of Navigator Deutschland GMBH
General Manager of Navigator Egypt (LLC)
24
In office until 11 October 2022, date of company liquidation.
25
From 31 January 2022.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 408
Chairman of the Board of Directors of Navigator Eurasia Kağit Ve Kağit Ürünleri Sanayi
Ve Ticaret Anonim Şirketi
Chairman of the Board of Directors of Navigator France SAS
Member of the Board of Directors of Navigator International Holding, SGPS, S.A.
26
Chairman of the Board of Directors of Navigator Itália, S.R.L.
Chairman of the Board of Directors of Navigator Middle East Trading DMCC
Chairman of the Board of Directors of Navigator Netherlands B.V.
Member of the Board of Directors of Navigator North America, INC.
Member of the Board of Directors of Navigator Paper Austria GMBH
Chairman of the Board of Directors of Navigator Paper España S.A.
Member of the Board of Directors of Navigator Paper Figueira, S.A.
Member of the Board of Directors of Navigator Paper Setúbal, S.A.
Member of the Board of Directors of Navigator Paper UK LTD.
Member of the Board of Directors of Navigator Parques Industriais, S.A.
Chairman of the Board of Directors of Navigator Poland Paper Spółka Z Ograniczoną
Odpowiedzialnością
Member of the Board of Directors of Navigator Pulp Aveiro, S.A.
Member of the Board of Directors of Navigator Pulp Figueira, S.A.
Member of the Board of Directors of Navigator Pulp Setúbal, S.A.
Member of the Board of Directors of Navigator Tissue Aveiro, S.A.
Member of the Board of Directors of Navigator Tissue Ibérica, S.A.
27
Member of the Board of Directors of Navigator Tissue Ródão, S.A.
Member of the Board of Directors of RAIZ - Instituto de Investigação da Floresta e do
Papel
Offices held in other companies/entities
Member of the General Board of Biond – Associação das bioindústrias de base florestal,
representing The Navigator Company, S.A.
Member of the Consulting Board of AICEP
Member of the Supervisory Board of Fraunhofer Institute in Portugal
26
In office until 11 October 2022, date of company liquidation.
27
In office until 31 January 2022.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 409
João Paulo Cabete Gonçalves Lé
Offices held in Navigator Group Companies
Member of the Board of Directors and of the Executive Committee of The Navigator
Company, S.A.
Chairman of the Board of Directors of Atlantic Forests - Comércio de Madeiras, S.A.
28
Member of the Board of Directors of Enerpulp - Cogeração Energética de Pasta, S.A.
Member of the Board of Directors of Eucaliptusland - Sociedade de Gestão de
Património Florestal, S.A.
Director of Navigator Abastecimento De Madeira, ACE
Member of the Board of Directors of Navigator Africa, S.R.L.
Member of the Board of Directors of Navigator Brands, S.A.
Chairman of the Board of Directors of Navigator Forest Portugal, S.A.
Member of the Board of Directors of Navigator International Holding, SGPS, S.A.
29
Member of the Board of Directors of Navigator Paper Figueira, S.A.
Member of the Board of Directors of Navigator Paper Setúbal, S.A.
Member of the Board of Directors of Navigator Parques Industriais, S.A.
Member of the Board of Directors of Navigator Pulp Aveiro, S.A.
Member of the Board of Directors of Navigator Pulp Figueira, S.A.
Member of the Board of Directors of Navigator Pulp Setúbal, S.A.
Member of the Board of Directors of Navigator Tissue Aveiro, S.A.
Member of the Board of Directors of Navigator Tissue Ibérica, S.A.
30
Member of the Board of Directors of Navigator Tissue Ródão, S.A.
Chairman of the Board of Directors of Portucel Moçambique - Sociedade de
Desenvolvimento Florestal e Industrial, S.A.
Chairman of the Board of Directors of RAIZ - Instituto de Investigação da Floresta e do
Papel
Chairman of the Board of Directors of Sociedade de Vinhos da Herdade de Espirra -
Produção e Comercialização de Vinhos, S.A.
Chairman of the Board of Directors of Viveiros Aliança - Empresa Produtora de Plantas,
S.A.
Offices held in other companies/entities
Member of the General Board of Biond – Associação das Bioindústrias de Base
Florestal, representing Navigator Forest Portugal, S.A.
28
In office until 30 June 2022, date of company merger into Navigator Forest Portugal, S.A.
29
In office until 11 October 2022, date of company liquidation.
30
From 31 January 2022.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 410
José Fernando Morais Carreira de Araújo
Offices held in Navigator Group Companies
Member of the Board of Directors and of the Executive Committee of The Navigator
Company, S.A.
Member of the Board of Directors of Bosques do Atlantico, S.L.
Member of the Board of Directors of Empremedia Re Designated Activity Company
Member of the Board of Directors of Enerpulp - Cogeração Energética de Pasta, S.A.
Member of the Board of Directors of Eucaliptusland - Sociedade de Gestão de
Património Florestal, S.A.
Member of the Board of Directors of Navigator Africa, S.R.L.
Member of the Board of Directors of Navigator Afrique du Nord, SARLAU
Member of the Board of Directors of Navigator Brands, S.A.
Member of the Board of Directors of Navigator Deutschland GMBH
Director of Navigator Egypt (LLC)
Vice-Chairman of the Board of Directors of Navigator Eurasia Kağit Ve Kağit Ürünleri
Sanayi Ve Ticaret Anonim Şirketi
General manager of Navigator France SAS
Member of the Board of Directors of Navigator International Holding, SGPS, S.A.
31
Member of the Board of Directors of Navigator Itália, S.R.L.
Member of the Board of Directors of Navigator Middle East Trading DMCC
Member of the Board of Directors of Navigator Netherlands B.V.
Member of the Board of Directors of Navigator North America, INC.
Member of the Board of Directors of Navigator Paper Austria GMBH
Member of the Board of Directors of Navigator Paper España S.A.
Member of the Board of Directors of Navigator Paper Figueira, S.A.
Member of the Board of Directors of Navigator Paper México S. DE R.L. DE C.V.
Member of the Board of Directors of Navigator Paper Setúbal, S.A.
Member of the Board of Directors of Navigator Paper UK LTD.
Member of the Board of Directors of Navigator Parques Industriais, S.A.
Member of the Board of Directors of Navigator Poland Paper Spółka Z Ograniczoną
Odpowiedzialnością
Member of the Board of Directors of Navigator Pulp Aveiro, S.A.
Member of the Board of Directors of Navigator Pulp Figueira, S.A.
31
In office until 11 October 2022, date of company liquidation.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 411
Member of the Board of Directors of Navigator Pulp Setúbal, S.A.
Member of the Board of Directors of Navigator Tissue Aveiro, S.A.
Member of the Board of Directors of Navigator Tissue Iberica, S.A.
Member of the Board of Directors of Navigator Tissue Ródão, S.A.
Member of the Board of Directors of Portucel Moçambique - Sociedade de
Desenvolvimento Florestal e Industrial, S.A.
Offices held in other companies/entities
Vice-Chairman of the General Meeting of Biond – Associação das Bioindústrias de Base
Florestal.
32
Member of the Board of Directors of AFP – Associação Fiscal Portuguesa
Member of the Audit Board of Statutory Auditors’ Association
Nuno Miguel Moreira de Araújo Santos
Offices held in Navigator Group Companies
Member of the Board of Directors and of the Executive Committee of The Navigator
Company, S.A.
Member of the Board of Directors of Bosques do Atlantico, S.L.
Member of the Board of Directors of Enerpulp - Cogeração Energética de Pasta, S.A.
Member of the Board of Directors of Eucaliptusland - Sociedade de Gestão de
Património Florestal, S.A.
Chairman of the Board of Directors of Navigator Africa, S.R.L.
Member of the Board of Directors of Navigator Brands, S.A.
Member of the Board of Directors of Navigator International Holding, SGPS, S.A.
33
Member of the Board of Directors of Navigator North America, INC.
Member of the Board of Directors of Navigator Paper Figueira, S.A.
Member of the Board of Directors of Navigator Paper Setúbal, S.A.
Member of the Board of Directors of Navigator Parques Industriais, S.A.
Member of the Board of Directors of Navigator Pulp Aveiro, S.A.
Member of the Board of Directors of Navigator Pulp Figueira, S.A.
Member of the Board of Directors of Navigator Pulp Setúbal, S.A.
Member of the Board of Directors of Navigator Tissue Aveiro, S.A.
Chairman of the Board of Directors of Navigator Tissue Iberica, S.A.
Member of the Board of Directors of Navigator Tissue Ródão, S.A.
32
Since 27 Jule 2022, having been Chairman of the General Meeting until that date.
33
In office until 11 October 2022, date of company liquidation.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 412
Chairman of the Board of Directors of Pulpchem Logistics, ACE
Member of the Board of Directors of RAIZ - Instituto de Investigação da Floresta e do
Papel
Offices held in other companies/entities
Member of the General Board of Biond – Associação das bioindústrias de base florestal,
representing Navigator Tissue Ródão, S.A.
Manuel Soares Ferreira Regalado
Offices held in Navigator Group Companies
Member of the Board of Directors of The Navigator Company, S.A.
Offices held in other companies/entities
Did not perform functions in other companies/entities in 2022.
Maria Teresa Aliu Presas
Offices held in Navigator Group Companies
Member of the Board of Directors of The Navigator Company, S.A.
Offices held in other companies/entities
Member of the Board of Directors of World Bioeconomy Forum.
Senior consultant at Magellan Association.
Mariana Rita Antunes Marques dos Santos
Offices held in Navigator Group Companies
Member of the Board of Directors of The Navigator Company, S.A.
Offices held in other companies/entities
Member of the Board of Directors of FAE – Forum de Administradores e Gestores de
Empresas
Sandra Maria Soares Santos
Offices held in Navigator Group Companies
Member of the Board of Directors of The Navigator Company, S.A.
Offices held in other companies/entities
Chairman of the Board of Directors of Moldin, S.A.
Chairman of the Board of Directors of Barbosa & Almeida, SGPS, S.A.
Chairman of the Board of Directors of BA Vidro II, SGPS, S.A.
Chairman of the Board of Directors of BA Glass Packaging, S.A.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 413
Member of the Board of Directors of Artividro, Lda.
Member of the Board of Directors of BA Glass I – Serviços de Gestão e Investimentos, S.A.
Member of the Board of Directors of BA Glass Portugal, S.A.
Chairman of the Board of Directors of BA Glass Spain, S.A.U.
Chairman of the Board of Directors of BA - Vidrio Distribución y Comercialización de
Envases de Vidrio, S.A.
Chairman of the Board of Directors of Minas de Valdeastillo, S.A.U.
Member of the Board of Directors of BA Glass Germany, GmbH.
Member of the Board of Directors of BA Glass Poland, Sp. z.o.o.
Chairman of the Board of Directors of BA Glass Bulgaria, S.A.
Chairman of the Board of Directors of BA Glass Romania, S.A.
Vítor Paulo Paranhos Pereira
Offices held in Navigator Group Companies
Member of the Board of Directors of The Navigator Company, S.A.
Offices held in other companies/entities
Member of the Board of Directors of APHELION, S.A.
Member of the Board of Directors of ANTASOBRAL – Sociedade Agropecuária, S.A.
Member of the Board of Directors of CAPITAL HOTELS - Sociedade de Investimentos e
Gestão, S.A.
Member of the Board of Directors of CIMO – Gestão de Participações, SGPS, S.A.
Chairman of the Board of Directors of GALERIAS RITZ, S.A.
Member of the Board of Directors of HOTEL RITZ, S.A.
Chairman of the Board of Directors of PARQUE RITZ, S.A.
Member of the Board of Directors of SECIL - Companhia Geral de Cal e Cimento, S.A.
Chairman of the Board of Directors of SEMAPA Inversiones, S.L.
Member of the Board of Directors and of the Executive Committee of Semapa –
Sociedade de Investimento e Gestão, SGPS, S.A.
Member of the Board of Directors of SODIM, SGPS, S.A.
Member of the Board of Directors of Sociedade Agrícola da Herdade dos Fidalgos,
Unip., Lda
Chairman of the Board of Directors of SONAGI, SGPS, S.A.
Chairman of the Board of Directors of SONAGI – Imobiliária, S.A.
Chairman of the General Meeting of Associação da Hotelaria de Portugal
2022 ANNUAL REPORT CORPORATE GOVERNANCE 414
Vítor Manuel Rocha Novais Gonçalves
Offices held in Navigator Group Companies
Member of the Board of Directors of The Navigator Company, S.A.
Offices held in other companies/entities
Member of the Board of Directors of Beldevelopment, S.A.
Member of the Board of Directors of Extrasearch, SGPS, S.A.
Member of the Board of Directors of Euromidlands - Sociedade Imobiliária, Lda.
Member of the Board of Directors of Magalhães e Gonçalves – Consultoria e Gestão,
Lda.
Member of the Board of Directors of Prudentarbítrio, Lda.
Member of the Board of Directors of Qualquer Ponto – Sociedade Imobiliária, Lda.
Member of the Board of Directors of Qualquer Prumo – Sociedade Imobiliária, Lda.
Gerente da Terraponderada, Lda.
Member of the Board of Directors of Semapa – Sociedade de Investimento e Gestão,
SGPS, S.A.
34
Member of the Board of Directors of Vanguardintegral, Lda.
Member of the Board of Directors of VRES – Vision Real Estate Solutions, S.A.
Member of the Board of Directors of Zoom Investment, SGPS, S.A.
Member of the Board of Directors of Zoom Investment Turismo, S.A.
Member of the Board of Directors of 2For Venture, SGPS, S.A.
c) Committees belonging to the management or supervisory bodies and
managing directors
27. Identification of committees set up by the Board of Directors, the General
and Supervisory Board and the Executive Committee, as the case may be,
and place where the rules of procedure may be consulted.
The following committees report to the Company’s Board of Directors:
Executive Committee
Corporate Governance Committee
Sustainability Forum
Pension Fund Supervisory Board
Asset Risk Analysis and Monitoring Committee
Ethics Committee
34
In office until the General Meeting held on 27 May 2022.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 415
Environmental Board
Appointments and Appraisals Committee
The Operating Rules of the Internal Committees make reference to their respective powers,
presidency, meeting frequency, functioning and duties of the members, with detailed minutes
of their meetings drawn up, available at the Company’s website at
http://www.thenavigatorcompany.com/Investidores/Governo-da-Sociedade.
The composition and number of annual meetings of internal committees are published at the
Company’s website at http://www.thenavigatorcompany.com/Investidores/Governo-da-Sociedade.
In accordance with their respective Operating Rules, Internal Committees must ensure a timely
and adequate flow of information, from their respective meeting notices and minutes, as
required to exercise the powers under the law and Articles of Association of each of the
remaining boards and committees.
28. Composition, if applicable, of the Executive Committee and/or
identification of the Managing Director(s)
On 31 December 2022, the Executive Committee comprised the following Directors:
Chairman
- António José Pereira Redondo
Members
- Adriano Augusto da Silva Silveira
- João Paulo Araújo Oliveira
- João Paulo Cabete Gonçalves Lé
- José Fernando Morais Carreira de Araújo
- Nuno Miguel Moreira de Araújo Santos
29. Indication of the powers of each of the committees created and summary
of the activities carried on the exercise of these responsibilities.
EXECUTIVE COMMITTEE
The powers of the Executive Committee are described in item 21 of this report.
The Executive Committee is the Company’s executive management body and has performed its
duties by exercising the powers entrusted to it by the Board of Directors. This Committee
meets regularly and whenever required by the evolution of the Company’s affairs and to
monitor its business activities; a total of 44 meetings were held in 2022. In addition to the
members of the Executive Committee, whenever the matters so justify, Non-Executive
Directors and Group Companies are present at these meetings and members of the various
Navigator departments.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 416
CORPORATE GOVERNANCE COMMITTEE
The Corporate Governance Committee comprises of three members: Mariana Marques dos
Santos, Manuel Regalado and António Neto Alves.
The Corporate Governance Committee, in addition to monitoring, on a continuous basis, the
Company’s compliance with the provisions of the law, regulations and articles of association
applicable to corporate governance, is responsible for the critical analysis of the Company’s
practices and conduct in the field of corporate governance, and for the initiative of proposing
for debate, amendment and introducing new procedures designed to improve the structure and
governance of the Company. The Corporate Governance Committee is also required to assess
annually the corporate governance status of the Company and submit to the Board of Directors
any proposals as it sees fit.
In 2022, in addition to the work and current communications carried out by telematic means,
the Committee held two meetings in which the following topics were analysed:
1. Analysis and proposals to the Corporate Governance Report for 2021;
2. Analysis of and comments on the proposal to amend Navigator's Articles of Association, to
be submitted to the Annual General Meeting.
3. Analysis of the assessment of compliance with the Corporate Governance Code of the
Portuguese Corporate Governance Institute (IPCG) conducted by the Executive Monitoring
and Follow-Up Committee (CEAM), with reference to the period 2021;
4. Comparison analysis of the compliance with the Recommendations of the CGC of the IPCG
by other listed companies;
5. Analysis of a proposal to change the IPCG CGC, as of 2023.
6. Presentation of activities to the Audit Board.
SUSTAINABILITY FORUM
In recognition of the fundamental role played by sustainability in the Navigator Company
Group's strategic development, the Navigator Sustainability Forum was set up in 2015.
The main aim of the Forum is to foster cooperation between the Navigator Company Group and
leading figures in its sphere of influence, from non-governmental organisations to universities,
as well as social organisations, clients and suppliers.
This initiative seeks to strengthen dialogue with its main stakeholders, promoting debate and
active listening on issues of importance to the Company and to society.
In general, the Sustainability Forum meets twice a year: a session dedicated to permanent
members and another extended session for various stakeholders. The extended sessions have
a central theme, which is debated in depth, contributing to the formulation of corporate and
strategic policy on issues of social and environmental responsibility, creating platforms for
2022 ANNUAL REPORT CORPORATE GOVERNANCE 417
understanding and cooperation between the Navigator Company Group and its main
stakeholders.
The Sustainability Forum comprises internal and external members, and is chaired by the CEO,
António Redondo, with Teresa Presas as Secretary-General.
Internal members are António Redondo (CEO), Adriano Silveira, João Paulo Oliveira, João Lé,
Fernando Araújo and Nuno Santos (members of the Executive Committee), Teresa Presas
(member of the Board of Directors and Secretary-General), Manuel Regalado (member of the
Board of Directors), and Ana Miranda, Maria da Conceição Cunha, Margarida Tomé and Joaquim
Poças Martins, members of the Environmental Board.
The following relevant personalities linked to the activities of the Company's main stakeholder
groups are external members of the Sustainability Forum: Cristina Tomé, Filipe Duarte Santos,
Francisco Ferreira, Francisco Gomes da Silva, José Júlio Norte, Luís Neves da Silva and Rosário
Alves.
In 2022, two sessions of the Sustainability Forum were held, one internal, aimed at the
Permanent Members of the Forum (internal and external), and another external with the
participation of a wide range of the Company's Stakeholders.
The internal session, held in June 2022, promoted debate on "Corporate Performance in ESG
Criteria", in addition to reflection on the theme of the external session of the Forum, held in
Aveiro in November 2022, which was dedicated to the topic "Bioeconomy: The Path to a
Sustainable Future".
PENSION FUND MONITORING COMMITTEE
The functions of the Pension Fund Monitoring Committee include verifying compliance with the
provisions applicable to the pension plan and to the management of the respective pension
fund, pronouncing on proposals for transferring management and other relevant alterations to
the constitutive and management contracts of the funds, as well as on the winding-up of the
pension fund or a quota thereof.
Law 27/2020 of July 23 introduced several alterations to the Legal Regime of Pension Funds,
namely with respect to the composition of the Monitoring Committee which, in addition to the
two representatives of the participants and beneficiaries of the Fund already foreseen in the
previous legislation, now also foresees the participation of two representatives indicated by the
two most significant unions in the Company, and one representative of the Workers'
Committee.
Following this legislative change, a new Monitoring Committee was appointed, consisting of 6
representatives of the Company (Manuel Arouca, António Cunha Reis, João Ventura, Alexandre
Vale, Ana Duarte Ferreira and Teresa Valdez), two representatives of the participants (João
Manuel Nunes de Oliveira and António Tavares Melo) and one representative of the Workers'
Committee (Ricardo David Gomes Arede). The unions have not yet nominated any
representatives. This new Committee took office on December 13, 2021.
The Pension Fund Monitoring Committee held a meeting on October 18, 2022, at which
several themes were analyzed, namely the evolution of the funds and respective performance,
2022 ANNUAL REPORT CORPORATE GOVERNANCE 418
compliance with information duties by the management company, actuarial results to June, the
new Norm 10/2022 on the governance structure of Pension Funds and the change made to the
investment policy in order to start incorporating ESG factors.
ASSET RISK ANALYSIS AND MONITORING COMMITTEE
The Company has an Asset Risk Analysis and Monitoring Committee, which is coordinated by
the directors responsible for finance, risk or assets, who in this case are Fernando Araújo and
Adriano Silveira, and includes the plant managers, who, during 2022, were Alexandre Vale,
Pedro Matos Silva, Dorival Martins de Almeida, António Estudante de Oliveira, and Joaquim
Belfo, the Finance Director, Manuel Arouca, the Risk Management Director, Gonçalo Monteiro
Duarte, and the Management Control Director, Gonçalo Veloso de Sousa. It has also had the
regular presence of Alexandra Fernandes, Empremédia's operational manager.
This Committee meets as and when required, and its role is to pronounce on the property risk
prevention systems in place in the Company, in particular on measures taken to meet the
recommendations resulting from inspections conducted by reinsurers, and to pronounce on the
adequacy, in terms of scope, type of cover and capital sums, of the insurance taken out by the
Navigator Company Group; discuss and issue opinions or recommendations on policies,
procedures, significant risks, risk limits and extraordinary situations in terms of property risks;
promote and monitor the maintenance of the inventory of the most significant property risks, in
close liaison with the risk governance system in force in the Navigator Company Group.
The Property Risks Analysis and Monitoring Committee held a meeting on 27 July, at which it
examined a number of issues, including: a progress report on recommendations following risk
analyses in 2021 and pending recommendations from previous years; identification and
quantification of claims in the last ten years (2011-2022); consideration of Navigator's risk
retention policy for 2023; capital to be insured in 2023, gross profit insured in 2022 and
estimates for 2023; and calculation of estimated maximum loss (PML).
ETHICS COMMITTEE
Following the drafting and approval of the Code of Ethics and Conduct by the Executive
Committee during 2010, the Ethics Committee was established, which prepares an annual
report on compliance with the rules contained in the Code of Ethics. This report shall detail all
irregular situations of which the Committee is aware, as well as the conclusions and follow-up
proposals which it has adopted in the various cases analyzed.
The Ethics Committee is required to monitor, impartially and independently, the conduct of the
Company's bodies and officers as regards disclosure and compliance with the Code of Ethics in
all companies in the Navigator Company Group.
In performing its duties, the Ethics Committee is particularly responsible for:
Verifying that the Code of Ethics and Conduct is integrated into the Company's usual
internal control systems, namely within the scope of the Risk Management Department
(DGR);
Appreciate the conclusions drawn by the DGR from any audits it conducts on matters
covered by the Code of Ethics and Conduct;
2022 ANNUAL REPORT CORPORATE GOVERNANCE 419
To ensure the functioning of a mechanism for reporting violations of the Code of Ethics
and Conduct, as part of the Group's mechanism for reporting irregularities;
To evaluate and assess any situation that arises concerning compliance with the precepts
included in the Code of Ethics and Conduct involving any member of a corporate body;
To submit to the Corporate Governance Committee the adoption of any measures
deemed convenient in this regard, including the review of internal procedures;
To submit to the Board of Directors, should it deem necessary, proposals to amend the
Group's Code of Ethics and Conduct;
To draw up an annual report on its performance in the scope of compliance with the rules
contained in the Code of Ethics and Conduct in the Group's companies.
The Ethics Committee is composed of three members: Henrique Trocado, Rui Gouveia and
Jaime Falcão.
Three meetings were held in 2022, at which the activities carried on in 2021 and 2022 were
reviewed, as were the main issues which have been reported and raised in connection with the
Company's Code of Ethics and Conduct and the Company's Whistleblowing Channel, in Portugal
and abroad, and the functioning and mode of operation of the same were debated. The report
on the Ethics Committee's activities during the year ended December 31, 2021 was also
discussed and approved.
ENVIRONMENTAL BOARD
In view of the specific nature of the Navigator Company Group's business and its inherent
environmental concerns, the Board of Directors decided in 2008 to set up an Environmental
Board, to monitor and issue its opinion on environmental aspects of the Company's operations
and to make recommendations on the environmental impact of its main undertakings, paying
special attention to legal requirements, licensing conditions and the Navigator Company
Group's policy in this area.
The Environmental Board has four members: Maria da Conceição Cunha (Chairman), Ana
Isabel Miranda, Maria Margarida Tomé and Joaquim Poças Martins, all of them independent
academic personalities of recognized technical and scientific competence, particularly in the
most important areas of environmental concern for the Navigator Company Group's business in
its current configuration.
The Environmental Board establishes direct contact with the Navigator Company Group's
business universe, through meetings held at its industrial sites, at its main forestry plantations
and at its research institute, RAIZ.
A meeting of the Environmental Board was held during 2022, at which the following topics were
tackled:
Environmental Situation - Overview of compliance with Legal obligations;
Energy situation and impact on Navigator;
2022 ANNUAL REPORT CORPORATE GOVERNANCE 420
PRR, applications under the mobilizing and decarbonizing agendas;
PRUA Project: reducing water use.
REMUNERATION COMMITTEE
The remuneration assignment process, which is monitored by the Nomination and Appraisals
Committee, is in particular the responsibility of the Remuneration Committee existing in the
Company, created under article 399 of the Portuguese Companies Code.
Until the date of entry into force of Law no. 50/2020, of 25 August, the Remuneration
Committee drew up annually – which happened in 2020 - the statement on the remuneration
policy for the members of the management and supervisory bodies. After the entry into force of
the referred Law, this Committee has the functions to prepare the remuneration policy for the
members of the management and supervisory bodies and to carry out all the work of analyzing
and fixing the remuneration of the directors.
The Remuneration Committee participates, equally and actively, in the performance evaluation,
and it is responsible for carrying out all work concerning analyses and setting Directors’
remuneration, in particular setting the variable remuneration of the Executive Directors.
During 2022, the Remuneration Committee was composed, until the General Meeting of May
27th, by Mr. José Gonçalo Ferreira Maury, Mr. João Rodrigo Appleton Moreira Rato and Mr. João
do Passo Vicente Ribeiro and, after that date, by Mrs. Maria Eduarda Faria e Maia de Oliveira
Luna Pais, Mr. João do Passo Vicente Ribeiro and Mrs. Carlota Infante da Câmara Albergaria
Caldeira.
In keeping with its responsibilities, the Remuneration Committee held four meetings in the
course of 2022, at which it discussed various matters relating to the remuneration of company
officers (in particular the variable remuneration to be attributed to the executive directors for
2021, and the remuneration of the members of the General Meeting Board and the Audit
Board), analysed the possible review of the Remuneration Policy and the Remuneration Report
2021, and also assessed the results of the CEAM's appraisal of Navigator's Corporate
Governance Report, for the financial year 2021.
In order to provide information or clarifications to the shareholders, the members of the
Remuneration Committee are present at the annual General Meeting and in any others if the
respective agenda includes a matter related to the remuneration of the members of the bodies
and committees of the Company or if such presence has been required by shareholders.
Within the budgetary limitations of the Company, the Remuneration Committee can freely
decide whether to hire, through the Company, the necessary or convenient consultancy
services to perform its functions.
The Remuneration Committee must ensure that the services are provided independently and
that the respective providers are not contracted to provide any other services to the Company
itself or to others that are in a controlling or group relationship without the express
authorisation of the Committee.
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APPOINTMENTS AND APPRAISALS COMMITTEE
In 2018, the Company established an Appointments Committee. In 2019, the Committee's
powers were extended, as described below, and its designation changed to the Appointments
and Appraisals Committee.
This Committee is composed of three to seven members, including a majority of Directors who
do not perform executive functions, one of whom will be Chairman, appointed by the Board of
Directors, for a period of four years, coinciding with the mandate of the Board of Directors.
In 2022, this Committee had three members: Ricardo Miguel dos Santos Pacheco Pires
(Chairman), Mariana Rita Antunes Marques dos Santos and Vítor Paulo Paranhos Pereira. In
2022, Isabel Viegas, Chief Peopple Officer for the Group, also participated in this Commission
as consultant.
In accordance with its Internal Regulations, the Appointments and Appraisals Committee is
responsible for monitoring and supporting the appointments of management officers of the
Company and the Navigator Group, as well as assessing the performance of the same
management staff.
In the performance of its duties, and without prejudice to other powers attributed to it by the
Company's Board of Directors, the Appointments and Appraisals Committee is particularly
responsible for the governing bodies:
In terms of appointments:
Assist the Board of Directors in identifying and assessing the adequacy of the profile,
knowledge, and curriculum of members of the governing bodies to be designated,
namely, the appointment by co-option for the performance of functions of member of the
Board of Directors of the Company, as well as, in the choice of administrators who will
perform executive functions;
Make its terms of reference available and induce, to the extent of its competencies,
transparent selection processes that include effective mechanisms for identifying
potential candidates, through which the ones with the greatest merit are selected, that
are best suited to the job requirements and promote, within the organisation, adequate
diversity including gender;
Whenever deemed convenient, to know and accompany the selection processes of
potential candidates for the performance of executive functions of administration in the
Group's subsidiary companies, in cases where the Company intends to present the
respective elective proposal.
In terms of appraisals:
To monitor the management's performance evaluation and remuneration attribution
system;
2022 ANNUAL REPORT CORPORATE GOVERNANCE 422
To comment on the proposals for individual annual performance evaluation of the
members of the Executive Committee, issued by the respective Chairman, and on the
latter, issued by the Chairman of the Board of Directors;
To monitor the overall assessment of the performance of the Board of Directors, as a
body, taking into account compliance with the Company's strategic plan and budget, risk
management, its internal functioning and the contribution of each member.
In addition to other functions that are expressly assigned to it by the Board of Directors, the
Appointments and Appraisals Committee is responsible, especially with regard to the remaining
management staff, to:
Monitor and issue recommendations on the Group's internal talent management policies
and procedures;
Periodically assess the need and availability of talent at the Group level and recommend
appropriate actions to ensure the Group's capacity to respond to the challenges that
arise, namely to monitor and issue recommendations on internal policies and procedures
related to selection, hiring, remuneration, evaluation remuneration and incentives
policies, as well as the succession plan for management staff, and formulate the
recommendations that it considers appropriate.
The Committee is also responsible for talent management, particularly with regard to senior
management: (i) monitoring and issuing recommendations on the Group's internal talent
management policies and procedures and (ii) periodically assessing the need for and availability
of talent within the Group and recommending appropriate actions to ensure the Group's ability
to respond to the challenges that arise.
By virtue of its members and their competences, in matters of remuneration, performance
evaluation and appointments, the existence of this Committee reflects adherence to
Recommendation III.9 of the IPCG Corporate Governance Code.
Attentive to its competencies, in 2022, in addition to the current work and communications
carried out by telematic means, the Appointments and Evaluation Committee held two XXXX
meetings in which the following topics were discussed: (a) performance evaluations for the
2021 fiscal year; (b) performance evaluation process for the 2022 fiscal year; (c) succession
plans and (d) presentation to the Supervisory Board of proposals for a talent development plan
and a succession plan.
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III. Auditing
(Supervisory Board, Audit Committee or General and Supervisory Board)
a) COMPOSITION*
* Over the reporting period
30. Identification of the supervisory body (Supervisory Board, Audit
Committee or General Supervisory Board) corresponding to the model
adopted.
Under the single-tier management model adopted, the Company’s supervisory body is the
Supervisory Board.
31. Composition, as applicable, of the Supervisory Board, the Audit
Committee, the General and Supervisory Board or the Committee for
Financial Affairs, indicating the minimum and maximum numbers of
members and duration of their term of office, as established in the Articles
of Association, number of full members, date of first appointment and end
date of the term of office of each member; reference may be made to the
item in the report where this information is contained in accordance with
paragraph 18.
Chairman: José Manuel Oliveira Vitorino
Full Members Gonçalo Nuno Palha Gaio Picão Caldeira
Maria da Graça Torres Ferreira da Cunha Gonçalves
Alternate Member Ana Isabel Moraes Nobre de Amaral Marques
Under the Articles of Association, the Company’s Audit Body comprises of three full members,
one of whom is Chairman, and one alternate member. With the amendment to the Articles of
Association approved by the General Assembly in 2022, the terms of office of the governing
bodies were changed from four to three years, starting in 2023.
The current members of the Supervisory Board were appointed for the current term, from 2019
to 2022, at the General Meeting held on 9 April 2019, at which the members of Navigator's
governing bodies were elected.
José Manuel Oliveira Vitorino was elected as alternate member on 29 April 2015. On 2 July
2015, José Manuel Oliveira Vitorino took the position of full member of the Supervisory Board
for the 2015-2018 term of office, replacing full member Duarte Nuno d’Orey da Cunha following
his resignation.
At the ordinary General Meeting of 19 April 2016, José Manuel de Oliveira Vitorino was
appointed as a full member of the Supervisory Board, until the end of the current term of office
of the other members of statutory bodies. However, since the composition of Navigator’s
Supervisory Board and its majority shareholder Semapa – Sociedade de Investimento e
Gestão, SGPS, S.A. have been coinciding; since an election was held in 2018 for the 2018-2022
2022 ANNUAL REPORT CORPORATE GOVERNANCE 424
term of office of the Semapa Supervisory Board, thereby changing its composition; and given
the intent expressed by the Chairman of the Supervisory Board, Miguel Camargo de Sousa Eiró,
to also resign from Navigator in the General Meeting of 23 May 2018, José Manuel Oliveira
Vitorino, previously a full member of the Supervisory Board, was appointed to the position of
Chairman of the Supervisory Board until the end of the current term of office of other members
of statutory bodies. He was elected Chairman of the Supervisory Board on 9 April 2019 for the
term of 2019 to 2022.
Gonçalo Nuno Palha Gaio Picão Caldeira was elected as a full member of the Supervisory Board
for the first time with effect as from the start of the term running from 2007 to 2010 and was
re-elected for the terms from 2011 to 2014, 2015 to 2018 and 2019 to 2022.
Maria da Graça Torres Ferreira da Cunha Gonçalves was appointed as full member of the
Supervisory Board in the General Meeting on 23 May 2018, until the end of the current term of
office of the other members of statutory bodies, having been re-elected for the 2019-2022
term.
Ana Isabel Moraes Nobre de Amaral Marques was appointed as alternate member of the
Supervisory Board on 19 April 2016, until the end of the current term of office of the other
members of statutory bodies, having been re-elected for the 2019-2022 term.
The Company believes that the number of members of the Supervisory Board is perfectly
adequate in view of its size and the complexity of risks inherent to its activity, efficiently
ensuring the duties entrusted to them. This suitability judgment took into account, in particular,
the activities of the Company, the stability of the shareholder structure, as well as the set of
diversified skills and the availability of the members of the Audit Board to carry out their duties,
namely, through close collaboration with the remaining bodies and commissions of the
Company and the External Auditor and Statutory Auditor.
32. Identification, as applicable, of the members of the Supervisory Board, the
Audit Committee, the General and Supervisory Board or the Committee for
Financial Affairs who are deemed independent, in accordance with article
414 (5) of the Companies Code; reference may be made to the item in the
report where this information is contained in accordance with item 19.
The members of the Audit Board Jose Manuel Oliveira Vitorino (Chairman) and Maria da Graca
Torres Ferreira da Cunha Goncalves are considered by Navigator to be independent, in the light
of the criteria laid down in Article 414 no. 5 of the Companies Code, with the former serving his
second term in office and the latter her first.
As a result of the appointment of Goncalo Nuno Palha Gaio Picão Caldeira at the Annual General
Meeting of May 24, 2018 for a fourth term in office as a member of the Audit Board, he became
a non-independent member of the said corporate body, as is clear from the application of
Article 414.5(b) of the Companies Code.
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33. Professional qualifications, as applicable, of each of the members of the
Audit Board, the Audit Committee or the General and Supervisory Board or
the Committee for Financial Affairs and other relevant biographical
details; reference may be made to the item in the report where this
information is contained in accordance with item 21.
José Manuel Oliveira Vitorino
(Chairman of the Audit Board)
José Manuel Vitorino graduated in Business Administration and Organisation from the
University of Lisbon’s Instituto Superior de Economia. He is qualified as a statutory auditor, and
in the executive training programme of Universidade Nova de Lisboa.
He was Assistant Lecturer at the Faculty of Economics of the University of Coimbra where he
remained until 1980, having then joined PricewaterhouseCoopers and divided his activity
between auditing and financial advisory areas, both in national and foreign companies and
groups, as well as in projects in which he integrated international teams.
He had been a Partner for several years when he left PricewaterhouseCoopers in 2013, due to
reaching the age limit of the position.
He was also Chairman of the Audit Board of Novo Banco, S.A. until 2017 and is a member of
the Audit Board of ANA - Aeroportos de Portugal, S.A.
He is a member of the internal control committee of Jerónimo Martins, SGPS, SA. since May
2022. He has been a member of the Audit Board of The Navigator Company since 2015 and of
Semapa and Secil since 2016, serving as Chairman of these supervisory bodies since 2018.
Gonçalo Nuno Palha Gaio Picão Caldeira
(Full member of the Audit Board)
Gonçalo Picão Caldeira has a degree in Law and was admitted to the Portuguese Bar
Association in 1991, after completing his law practice. He has a post-graduate degree in
Management (MBA - Universidade Nova de Lisboa) and attended the Real Estate Management
and Valuation course at ISEG. He has been working in real estate management and
development through family companies since 2004. Before that, he collaborated with the BCP
Group from 1992 to 1998 and with the Sorel Group from October 1998 to March 2002. He was
also an employee of Semapa from April 2002 to February 2004. He has been a member of the
Audit Board of the Company since 2007, of Semapa since 2006, and of Secil since 2013.
Maria da Graça Torres Ferreira da Cunha Gonçalves
(Full member of the Audit Board)
Maria da Graça Torres Ferreira da Cunha Gonçalves has a degree in Company Organization and
Management from the Instituto de Ciências do Trabalho e da Empresa (ISCTE) and is a
chartered accountant. From June 1978 to November 1985, she performed various functions in
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the areas of General Accounting, Analytical and Financial Planning and Analysis at Magnetic
Peripherals Inc. Portugal. She was a financial analyst at Shell Portuguesa, S.A. between
December 1985 and November 1989. Between December 1989 and July 1994, was Controller
and CFO at United Distillers Comp. Velha, Ld.ª, with responsibility for all Financial, IT and
Procurement areas. Between August 1994 and July 1995, he was CFO of ITT Automotive
Europe GmbH, with responsibility for all Finance and Personnel.
From August 1995 to June 2015, he was Back Office Director at Pernod Ricard Portugal, with
responsibility for Finance, Management Control, Purchasing, Logistics, Production, Human
Resources and Legal. In 2001 and 2002, he was responsible in Portugal for the acquisition
process of Seagram (Sandeman & Co.).
Later, in 2005 and 2006, he was responsible for the Financial and Human Resources areas of
the acquisition process of Allied Domecq (Cockburn Smithes & C.ª). He was vice-president in
the sector's Association, ACIBEV, as representative of Pernod Ricard. He has been a member of
the Audit Board of the Company, Semapa and Secil since 2018.
b) OPERATION
34. Existence of operating regulations, and place where they can be
consulted, as applicable, of the Supervisory Board, the Audit Committee,
the General and Supervisory Board or the Committee for Financial Affairs;
reference may be made to the item in the report where this information is
contained in accordance with item 24.
The Company’s Audit Board has internal operating regulations, which are published at the
Company’s website in the investors’ area (corporate governance section), freely available for
consultation at http://www.thenavigatorcompany.com/ Investidores/Governo-da-Sociedade.
The annual report issued by the Audit Board on its work during the year is published in
conjunction with the Report & Accounts and is available at the Navigator Group’s website.
35. Number of meetings held and rate of attendance at meetings of the
Supervisory Board, the Audit Committee or the General and Supervisory
Board and the Committee for Financial Affairs, as the case may be;
reference may be made to the item in the report where this information is
contained in accordance with item 25.
The Audit Board held twenty meetings during the 2022 financial year, and all agendas and the
respective minutes were sent to the Chairman of the Board of Directors, and are also at the
disposal of the Risk Management Department.
Its members were present at all meetings held while they were in office, so that there was an
attendance rate of 100%.
The number of meetings of the Audit Board held is freely available for consultation on the
company's website, at www.thenavigatorcompany.com/Investidores/Governo-da-Sociedade.
In accordance with the Audit Board Regulations, detailed minutes of the respective meetings
are drawn up.
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36. Availability of each of the members of the Audit Board, the Audit
Committee or the General and Supervisory Board and the Committee for
Financial Affairs, as the case may be, indicating offices held
simultaneously in other companies, inside and outside the group, and
other relevant activities carried out by the members of these bodies
during the period; reference may be made to the item in the report where
this information is contained in accordance with item 26.
Essa informação está disponível no anterior ponto 33 referente às qualificações profissionais e
outros elementos curriculares relevantes de cada membro dos órgãos sociais em epígrafe.
Os membros do Conselho Fiscal têm a disponibilidade adequada ao desempenho das funções
que lhes estão acometidas.
Para além das atividades referidas no ponto 33, os membros do Conselho Fiscal desempenham
as funções que se descrevem infra:
José Manuel Oliveira Vitorino
Offices held in Navigator Group companies
No offices held in other companies belonging to the same group as Navigator.
Offices held in other companies/entities
- Member of the Audit Board of ANA Aeroportos de Portugal, S.A.
- Member of the internal control committee at Jerónimo Martins, SGPS, SA.
- Chairman of the Audit Board of a SECIL Companhia Geral de Cal e Cimento, S.A.
- Chairman of the Audit Board of SEMAPA Sociedade de Investimento e Gestão, SGPS,
S.A.
Gonçalo Nuno Palha Gaio Picão Caldeira
Offices held in Navigator Group companies
No offices held in other companies belonging to the same group as Navigator.
Offices held in other companies/entities
- Director at LINHA DO HORIZONTE Investimentos Imobiliários, Lda.
- Director at LOFTMANIA – Gestão Imobiliária, Lda.
- Member of the Audit Board of SECIL Companhia Geral de Cal e Cimento, S.A.
- Member of the Supervisory Board of SEMAPA - Sociedade de Investimento e Gestão,
SGPS, S.A.
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Maria da Graça Torres Ferreira da Cunha Gonçalves
Offices held in Navigator Group companies
No offices held in other companies belonging to the same group as Navigator.
Offices held in other companies/entities
- Member of the Audit Board of Secil Companhia Geral de Cal e Cimento, S.A.
- Member of the Supervisory Board of Semapa - Sociedade de Investimento e Gestão,
SGPS, S.A.
c) POWER AND RESPONSIBILITIES
37. Description of applicable procedures and criteria for the supervisory
body’s involvement in hiring additional services from the external auditor
In accordance with the rules in the European Audit Regulation, in article 77, paragraphs 10 and
11 of the Bylaws of the Association of Statutory Auditors (Ordem dos Revisores Oficiais de
Contas), approved by Law no. 140/2015, of 7 September, the Rules of Procedure of the
Supervisory Board, approved on 9 November 2018, and the Rules of Procedure for the approval
of services beyond the scope of auditing, approved on 1 June 2016, the contracting of different
auditing services, which are not required by law or constitute prohibited services, to the
External Auditor and Statutory Auditor or to any member of its network, by Navigator or by
companies within its domain or group, is subject to prior approval by the Navigator Supervisory
Board, duly substantiated.
As such, proposals submitted are handed over to the Supervisory Board for analysis and
validation, with a view to essentially ensuring (i) that the services in question are permitted, (ii)
that the provision of services will not affect the independence and impartiality of the External
Auditor, as needed to provide auditing services, (iii) that the combined value of fees for the
provision of services other than auditing services does not exceed the limit of the Bylaws of the
Association of Statutory Auditors (EOROC), and (iv) that the additional services in question are
provided with a high degree of quality and autonomy.
The Audit Board has thus applied the rules set out in the Statute of the Order of Statutory
Auditors, approved by Law 140/2015 of September 7, in the version in force until December
31, 2021, and observes the internal procedures instituted in the Internal Regulations on the
approval of non-audit services to ensure that the legal provisions are complied with.
38. Other duties of the supervisory bodies and, if applicable, of the Committee
for Financial Affairs
1. The Audit Board has the powers that result from the law, with no delegated powers or
responsibilities. The functions and duties of the Audit Board are expressly set out in its Internal
Rules of Procedure, which governs the exercise of the functions, the chairman, the frequency of
the meetings, functioning and framework of duties of its members and determines that detailed
minutes of its meetings are written. These Rules are published the Company’s website, at
http://www.thenavigatorcompany.com/Investidores/Governo-da-Sociedade.
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In accordance with the Rules of Procedure, amended on December 2020, the Audit Board
ensures the timely and suitable flow of information, especially regarding the respective calls for
meetings and minutes, required for the performance of the functions, determined by law and
the bylaws, of each of the remaining corporate bodies and committees.
2. In the performance of its duties, without prejudice to other powers assigned to it by law, in
particular by Article 420 of the Companies Code, in accordance with its Rules of Procedure, the
Audit Board has the following functions and powers:
a) To supervise the management of the Company, including, in this context, annually
assessing the budget, the internal functioning of the Board of Directors and its
committees, as well as the relationship between the various bodies and committees of
the Company;
b) To ensure compliance with the law and the articles of association;
c) To verify that books, accounting records and the respective supporting documents are
in order;
d) To verify, when it deems to be appropriate and as it sees fit, the state of cash and
inventories of any type of goods or assets belonging to the Company or received by
the same as security, deposit or on another basis;
e) To verify the accuracy of the financial statements;
f) To verify that the accounting policies and valuation criteria adopted by the Company
lead to a correct valuation of the Company’s assets and results;
g) To draw up an annual report on its audit activities and issue its opinion on the report,
accounts and proposals submitted by management;
h) To convene the General Meeting when the Chairman of the meeting fails to do so;
i) To evaluate and comment on strategic lines and risk policy prior to their final approval
by the management body;
j) To supervise and evaluate the effectiveness of the internal control system, including
the functions of risk management and internal audit, being able to propose any
necessary adjustments;
k) To issue an opinion on the work plans and resources allocated to the services of the
internal control system, including the functions of risk management and internal audit,
and may propose any necessary adjustments;
l) To receive reports of irregularities (whistleblowing) submitted by shareholders,
collaborators of the Company or others;
m) To contract the provision of services by experts to assist one or more of its members
in the exercise of their functions; whereas the contracts with and remuneration to be
2022 ANNUAL REPORT CORPORATE GOVERNANCE 430
paid to such experts shall be in line with the importance of the matters entrusted to
them and the economic situation of the Company;
n) To supervise the appropriateness of the procedure for preparation and disclosure of
financial information by the Board of Directors, including the adequacy of the
accounting policies, estimates, evaluations, relevant disclosures and a consistent
implementation thereof in each year, that shall be fully documented and
communicated;
o) To propose to the General Meeting the appointment of the Statutory Auditor and its
remuneration, indicating the criteria which governed the selection of the statutory
auditor and describing the auditor’s selection procedure it conducted;
p) To propose to the General Meeting the dismissal of the Statutory Auditor or the
termination of the services provision agreement, whenever there are justifiable
grounds for that purpose;
q) To supervise the auditing of the Company’s financial statements and reports;
r) To supervise the independence of the Statutory Auditor, namely with regard to the
provision of additional services, and assess, yearly, the work carried out by the
Statutory Auditor and its suitability for the performance of the tasks assigned to it;
s) To confirm if the disclosed report on the corporate governance structure and practices
includes the information listed in Article 245-A of the Portuguese Securities Code;
t) To issue a previous and binding opinion on the Regulation on Conflicts of interests and
Related Party Transactions to be drawn up and approved by the Board of Directors or,
in the absence of such Regulation, on the definition to be made by management, on
whether the transactions that the company carries out with related parties are carried
out within the scope of its current activity and under market conditions;
u) To issue, within a reasonable period, a prior opinion regarding any business with
related parties that are not carried out within the scope of the Company's current
activity and under market conditions;
v) To verify that the transactions with related parties that the Company carries out are
carried out within the scope of the Company's current activity and under market
conditions;
w) Comply with the other attributions contained in the law or in the articles of association.
3. Concerning its powers, in the performance of its functions, and without prejudice to other
powers assigned to it by law, members of the Audit Board may, acting jointly or separately:
a) Obtain from the Management, for examination and certification, any books, records
and documents belonging to the Company, and verify the existence of any type of
assets, namely cash, securities and commodities;
2022 ANNUAL REPORT CORPORATE GOVERNANCE 431
b) Obtain from the Management or any of the Directors, information or clarifications on
the course of operations or activities of the Company or on any of its businesses;
c) Have access to all Company information and Staff for assessing performance, the
situation and the outlooks on the development of the Company, including, namely,
minutes, documents supporting decisions taken, convening notices and records on the
meetings of other corporate bodies, without prejudice to access to all other documents
or people who may be called upon to provide clarifications;
d) Obtain the reports made by the Company's internal control services, including
regarding the risk management and internal audit functions, in particular those on
matters related to the rendering of accounts, the identification or resolution of conflicts
of interest and the detection of potential irregularities;
e) Receive from the Company’s Statutory Auditor the clarifications which are necessary
for the annual assessment, by the Supervisory Board, of the work carried out by the
Statutory Auditor, and of its independence and its suitability for the performance of the
tasks assigned to it;
f) To obtain from third parties who have carried out transactions on behalf of the
Company any information required for proper clarification of such transactions;
g) Attend meetings of the Management, whenever it deems appropriate.
4. In order to perform their duties, the Audit Board may be assisted by a technical team
specially appointed for this purpose and also by a specialised audit firm, and may contract the
provision of services by experts, to assist one or more of its members in the exercise of their
duties.
5. In the performance of its functions, without prejudice to other powers assigned to it by law,
members of the Audit Board have the following duties:
a) To inform themselves and prepare Supervisory Board meetings diligently;
b) To participate in Board meetings and attend General Meetings and meetings of the
Board of Directors to which they are summoned by the Chairman or in which the
accounts for the financial year are to be discussed;
c) To exercise a conscientious and impartial supervision;
d) To keep confidential any facts and information which come to their knowledge by
virtue of their functions, without prejudice to the duties enshrined in paragraphs 2 and
3 of this Article;
e) To inform the Board of Directors of any verifications, inspections and measures,
undertaken and the results thereof;
f) To report, at the first general meeting held, all irregularities and inaccuracies verified
by this Board and whether it obtained all clarifications required for the performance of
its functions;
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g) To record in writing all checks, inspections, complaints received, and measures taken
and their outcome;
h) To inform the Board of Directors of the results of the statutory audit and explain how
this has contributed to the integrity of the procedure for preparing and disclosing
financial information, as well as the role that the audit body played in this process;
i) To monitor the process for preparation and disclosure of the financial information and
submit recommendations or proposals to ensure their integrity;
j) To supervise the effectiveness of the internal quality control and risk management
systems and, if applicable, of the internal audit, with regard to the procedure for
preparing and disclosing financial information, while preserving its independence;
k) To monitor the annual statutory audit of individual and consolidated accounts, namely
the execution thereof;
l) To verify and monitor the audit firm’s independence in the exercise of its activity of
statutory audit or in the provision of other services legally permitted under the terms
defined in the applicable law and regulation, namely:
i. Demonstrate, during the selection process of the company of statutory
auditors, that this company has and has implemented internal mechanisms
that ensure independence and prevention of conflicts of interest;
ii. Regular verification by the audit firm that the aforementioned internal
mechanisms remain adequate and in compliance with the applicable
legislation and regulations;
iii. Obtain an annual declaration of independence;
iv. Annual communication of the different audit services that have been
provided;
v. Reasoned proposal regarding the possible extension of the functions of the
audit firm, beyond the maximum legal period, with the weighting of the
respective conditions of independence and the advantages and costs
associated with their replacement;
vi. Communication from the audit firm on exceeding the threshold in terms of
fees; and
vii. Joint analysis of possible threats to its independence and the application of
safeguards to mitigate them;
m) To select audit firms to submit to the General Meeting for election and justifiably
recommend one of them for approval;
n) To treat in confidence any documents of the Company which they have access to in
the exercise of their functions, including the content of the Board meetings and of the
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other corporate bodies in which they participate and the preparatory information of the
meetings; and
o) To provide other corporate bodies and committees, in accordance with legal statutory
requirements, with all necessary information and documents required for the exercise
of legal and statutory functions of such bodies and committees.
6. The members of the Audit Board must refer to the Public Prosecution Office any criminal
offences that they are aware of and which constitute a public crime.
7. If any of the members of the Audit Board becomes aware of any difficulties in the pursuit of
its corporate purpose, they must inform the Statutory Auditor immediately.
In addition, the Audit Board is the main correspondent of the Statutory Auditor and Chartered
Accountant of the Company and has access to and direct knowledge of the activities carried out
by it. The Company believes that this supervisory activity by the Audit Board, without any
interference from the Board of Directors, of the works of the Statutory Auditor and Chartered
Accountant, provided it does not jeopardise the timely and adequate knowledge of the Board of
Directors, ultimately responsible for Company matters and financial statements, in what
concerns these tasks. In compliance with this principle, reports of the Statutory Auditor and
Chartered Accountant are addressed to the Audit Board and discussed in joint meetings of the
Audit Board with a member of the Board of Directors, where the Audit Board informs, notably,
of the results of the statutory audit, ensuring that conditions required to provide audit services
exist within the Company. It is also the responsibility of the Audit Board to propose and
monitor, with support from internal divisions of the Company, the fees of the Statutory Auditor
and Chartered Accountant.
The Statutory Auditor and Chartered Accountant also cooperates with the Audit Board,
providing, immediately and in accordance with applicable laws and regulations, information on
irregularities relevant for the exercise of its functions that the Audit Board has detected, as well
as any issues arising in the exercise of its duties.
Under the terms of the Audit Board's regulations, the Statutory Auditor and the Company
maintain permanent and adequate communication channels, namely through regular meetings
with the Board of Directors, the Audit Board and with the services and departments with
responsibilities in matters under analysis and with the consequent discussion and analysis of all
the information that is pertinent in the scope of the exercise of the corresponding activity.
IV. Statutory Auditor
39. Identification of the statutory audit firm and the partner and statutory
auditor representing the same
The Company’s acting Statutory Auditor is KPMG & Associados – Sociedade de Revisores
Oficiais de Contas, S.A., registered with the Association of Statutory Auditors (Ordem dos
Revisores Oficiais de Contas) under no. 189 and registered with the Portuguese Securities
Market Commission (CMVM) under no. 20161489, represented by Rui Filipe Dias Lopes
(statutory auditor [ROC] no. 1715).
2022 ANNUAL REPORT CORPORATE GOVERNANCE 434
The alternate Statutory Auditor is Vítor Manuel da Cunha Ribeirinho (statutory auditor [ROC]
no. 1081).
40. Indication of the consecutive number of years for which the statutory
audit firm has held office in the Company and/or Group
The Statutory Auditor referred to in item 39 has been working with the Company since 2018.
41. Description of other services provided by the statutory auditor to the
company.
In addition to the statutory audit services provided in the Company and its subsidiaries, the
Statutory Auditor also provided other assurance and reliability services, as well as providing
financial information review services, in accordance with the provisions of Law 140/2015, of
September 7.
The amounts paid for these services over the course of 2022 are detailed in items 46 and 47
below.
V. External Auditor
42. Identification of the external auditor appointed for the purposes of article
8 and the partner and statutory auditor representing such firm in the
performance of these duties, together with their respective registration
number with the Portuguese Securities Market Commission.
The Company’s external auditor is KPMG & Associados – Sociedade de Revisores Oficiais de
Contas, S.A., registered with the Association of Statutory Auditors (Ordem dos Revisores
Oficiais de Contas) under no. 189 and registered with the Portuguese Securities Market
Commission (CMVM) under no. 20161489, represented in the performance of these duties by
partner Rui Filipe Dias Lopes (statutory auditor [ROC] no. 1715).
43. Indication of the consecutive number of years for which the external
auditor and the respective partner and statutory auditor representing the
same in the performance of these duties has held office in the Company
and/or Group.
The External Auditor and the respective partner that represents it in performing these duties
were appointed at the General Meeting in September 2017, for the financial year beginning on
January 1, 2018. They were re-elected to the position at a General Meeting held on April 9,
2019. Accordingly, 2022 was their fifth year in office with the Company and/or the Group.
44. Policy on rotation of the external auditor and the respective partner and
statutory auditor representing the same in the performance of these
duties, and the respective frequency of rotation.
The policy and frequency of rotation of the External Auditor and Statutory Auditor and its
representative is determined by article 54 of Law 140/2015, of 7 September (Statute of the
Association of Statutory Auditors), which came into force on 1 January 2016 and established a
2022 ANNUAL REPORT CORPORATE GOVERNANCE 435
new legal regime applicable to the mandatory rotation of Statutory Auditors in public interest
companies, such as Navigator.
In 2019, at the proposal of the Audit Board, which considered that the applicable legal
conditions were met, the General Meeting of Shareholders approved the reappointment of
KPMG & Associados - Sociedade de Revisores Oficiais de Contas, S.A. for the four-year period
2019-2022 as Statutory Auditor of the Company, under the terms of the Statute of the
Portuguese Institute of Statutory Auditors and the maximum time limits for the performance of
statutory auditing duties established therein.
45. Indication of the body responsible for assessing the external auditor and
the intervals at which this assessment is conducted
As part of its supervisory and review function with regard to the Company's financial
statements, the Audit Board assesses the External Auditor and Statutory Auditor on an ongoing
basis and in particular as part of the preparatory work for its Report and Opinion on the annual
accounts.
The Audit Board, in addition to being responsible for proposing to the General Assembly the
appointment of the Statutory Auditor and respective remuneration, is the body responsible for
evaluating and monitoring all audit work performed by the External Auditor on an ongoing
basis, having the possibility to propose its dismissal with just cause at the General Meeting,
provided the proper formalities to do so are met. In this sense, throughout the year the Audit
Board meets regularly with the Statutory Auditor and External Auditor, establishing a
permanent and direct relationship between these two bodies, and the latter is the recipient of
the respective reports, including when matters related to accountability and the detection of
potential irregularities are at issue. At these meetings the Audit Board may assess all the
accounting and financial information it deems necessary at each moment, and may request
from them any information it deems necessary for its supervision.
Additionally, the Audit Board, in the exercise of its supervisory and review functions with regard
to the Company's financial statements, carries out each year an overall assessment of the
performance of the External Auditor as part of the preparatory work for its Report and Opinion
on the annual accounts, and also supervises its independence, namely by obtaining written
confirmation of the auditor's independence; confirmation of compliance with rotation
requirements for the partner responsible and identification of threats to independence and
safeguard measures adopted to mitigate them.
To this end, the Audit Board has unrestricted access to the documentation produced by the
Company's auditors, being entitled to request from them any information it deems necessary
and being the first recipient of the final reports drawn up by the external auditors.
Under the provisions of Article 420.2 of the Companies Code, the Audit Board is responsible for
proposing to the General Meeting the appointment of the Company's Statutory Auditor.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 436
46. Identification of work, other than auditing, done by the external auditor
for the company and/or for companies in a control relationship with it,
together with internal procedures for approving the hiring of such
services, specifying the reasons for doing so
As described in item 47, in the year ended December 31, 2022, fees were invoiced by KPMG, a
firm of chartered accountants, and other entities belonging to the same network, for the
statutory audit of the annual accounts, limited review of interim accounts and reliability
assurance services and other non-audit services. The breakdown of the billing for these
services is detailed below in item 47.
The services indicated as "reliability assurance services" relate to the issue of reports on
financial information and verification services of the Sustainability Information. With regard to
services other than auditing, these refer to opinions on merger operations as part of the
Statutory Auditor's duties at companies in the Navigator Company Group and the provision of
financial information auditing services to a number of companies in a group as part of a
potential acquisition by Navigator. As mentioned above, these services are not included in the
list of prohibited services set out in Article 5(1) of Regulation (EU) No. 537/2014 of the
European Parliament and of the Council of Europe. °537/2014 of the European Parliament and
of the Council, of April 16, 2014, and, the legal requirements of independence, threats to it,
were guaranteed and safeguard measures to limit those threats by the auditor were ensured.
In 2022, the provision of non-audit services by the Statutory Audit Firm to the Company and
subsidiaries is regulated in the Internal Regulations on the approval of non-audit services,
approved on June 1, 2016, which provide for non-audit services that cannot be provided by the
SROC and processes for prior control and authorization of such services by the Audit
Committee. The regime defined in this internal rule is fully in line with the provisions of the
Statute of the Order of Statutory Auditors, approved by Law No. 99-A/2021, the Legal Regime
of Audit Supervision, approved by Law No. 148/2015 and Regulation (EU) No. 537/2014 of the
European Parliament and of the Council, of April 16, 2014.
Thus, the services provided by the External Auditor and Statutory Auditor, other than auditing
services, were always approved by the Audit Board, in compliance with the applicable legal
rules in force in 2022 and the internal procedures instituted for this purpose.
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47. Indication of the annual remuneration paid by the company and/or
controlled, controlling or group entities to the auditor and other
individuals or organisations belonging to the same network, specifying the
percentage relating to the following services (for the purposes of this
information, the concept of network is as defined in Commission
Recommendation No. C [2002] 1873 of 16 May 2002)
By the Company *
Value of auditing services (€)
130,762
44%
Value of assurance services (€)
53,000
18%
Value of tax consulting services (€)
0
0%
Value of services other than auditing (€)
114,250
38%
By Group Entities *
Value of auditing services (€)
403,055
80%
Value of assurance services (€)
94,500
20%
Value of tax consultancy services (€)
0
0%
Value of services other than auditing (€)
1,500
0%
* Including individual and consolidated accounts
In 2022, services other than auditing services billed to the Company or to entities in a
controlling relationship with it by the External Auditor and the Statutory Auditor, including
entities in a holding relationship with it or that are part of the same network, represented 33%
of the total services provided.
C. Internal Organization
I. Articles of Association
48. Rules applicable to amendment of the Company’s Articles of Association
(art. 29-H, no. 1, al. h).
The Company’s Articles of Association contain no specific rules on amendments of the articles,
so the general supplementary rules contained in the Companies Code therefore apply here.
II. Reporting of irregularities (whistleblowing)
49. Means and policy for reporting of irregularities (whistleblowing) occurring
in the company.
The Navigator Company, as a listed company with a rigorous governance system, has
reformulated its Irregularities' Reporting Channel - which it has implemented for more than 10
years, in compliance with the new general regime for the protection of whistleblowers,
established in Law no. 93/2021, of December 20, which came into force on June 18, 2022.
The reformulated Irregularities' Reporting Channel - known as the Whistleblowing Channel - is
made available through a new portal and reinforces the Company's aim of having an internal
2022 ANNUAL REPORT CORPORATE GOVERNANCE 438
mechanism whereby reports of irregularities are submitted through an effective, fast and
suitable system for detecting, investigating and resolving them, in keeping with the rules of
conduct established by Navigator and with the principles of guaranteed anonymity,
confidentiality, safeguarding and non-retaliation in dealings with whistleblowers, as well as
compliance with data protection and information security rules.
This Whistleblowing Channel is an independent service for reporting possible irregular practices,
managed by an external entity on behalf of Navigator and intended for communications from
employees, suppliers, customers, service providers or any other stakeholders, as set out in the
Whistleblowing Regulations.
The Whistleblowing Regulations establish a general duty to report alleged irregularities
occurring within the Navigator Company Group, helping to maintain its position as a business
group with integrity, reputation and credibility, and as a fair, honest and safe workplace.
Under the terms of these regulations, irregularities can be defined as breaches of the rules set
out in the Code of Ethics and Conduct and other internal regulations, or of a legal nature, with
a material impact on Navigator (e.g. breach of rules of conduct or ethics, fraud, corruption and
related offences, protection of privacy and personal data, health and safety, environmental
protection, human rights, amongst others).
The regulations indicate a multidisciplinary team responsible for following up on the complaints
received, called the Whistleblowing Committee (CDI), which is made up of the Director of
Legal, Compliance and Public Affairs (DLC), the Director of Risk Management (DGR) and the
Compliance Officer. In cases where the complaint may relate to any member of this
Committee, it is referred to the Audit Board.
The person responsible for following up on the complaint must determine whether the
complaint contains the minimum grounds for triggering an investigation process, as well as
determine the involvement of other bodies, departments or employees, when certain
requirements are met.
If the complaint has the minimum grounds, the investigation procedure is initiated, which
consists of verifying all the facts necessary to assess the alleged irregularity. This process ends
with the closure of the case or with a proposal to apply the measures best suited to the
irregularity in question.
All persons with an interest that conflicts with the situation that is the subject of the complaint
are excluded from the investigation and decision process, in order to ensure that the receipt,
screening, analysis and filing of the complaint are handled in an independent, autonomous and
impartial manner.
During the 2022 fiscal year, six potential irregularities related to logistics, human resources and
occupational health, hygiene and safety were reported. For these, the mechanisms for
assessing the reported facts, the respective investigation process and the decision on the
measures to be taken were, or are being, duly followed.
With regard to events occurring in 2020 and 2021, supported by the criminal investigation in
2020 concerning alleged corruption in the wood receiving activity at the Setúbal manufacturing
2022 ANNUAL REPORT CORPORATE GOVERNANCE 439
center, which led to the dismissal with just cause of the workers involved in that activity, legal
proceedings are still underway in the labor and criminal areas.
In fact, in the course of the year 2022 and as a result of this investigation, Navigator has been
following up, in the competent labour courts, the legal challenges to the regularity and
lawfulness of the dismissals of 28 employees.
In addition, in the criminal field, Navigator, as an assistant, followed the prosecution brought
by the Public Prosecutor's Office against the suppliers and workers involved in the
aforementioned criminal proceedings, having also made the appropriate claim for civil
compensation.
III. Internal Control and Risk Management
50. People, bodies or committees responsible for internal audits and/or
implementation of internal control systems.
The Company regards Risk Management as a process central to its business. A system has
accordingly been implemented for permanent monitoring of risk management in the Navigator
Company Group, involving the Board of Directors, the Chief Executive Officer, as well as all the
organizational units, the RMD, the Compliance Department and the Audit Board.
This system is based on a systematic and explicit assessment of business risks by all
organizational departments in the Navigator Company Group and identification of the main
controls in place in all business processes. This basis will allow the Company to assess on an
ongoing basis the adequacy of its internal control system to the risks perceived at each
moment as most critical.
As part of this periodic evaluation, an annual internal audit program is established, to be
carried out by the RMD in conjunction with each department involved, to monitor and evaluate
the adequacy of this internal control system to the perceived risks and to support the
organization in implementing programs to improve this system.
At the head of this risk governance system are the Audit Board and the Board of Directors, as
detailed below.
BOARD OF DIRECTORS
The responsibilities of the Board of Directors in this regard are:
To review and approve the risk policy defined for The Navigator Company Group,
including the risk appetite and tolerance;
To review and approve the risk policy defined for The Navigator Company Group,
including the risk appetite and tolerance;
To set objectives in terms of risk-taking and ensure that they are pursued;
To approve the risk governance model adopted by The Navigator Company Group;
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To supervise the application of the risk policy in The Navigator Company Group;
To discuss and approve the Company's strategic plan and risk policy, including the
definition of risk levels deemed acceptable;
To approve strategies for dealing with risks, namely very high risks;
To promote a risk culture in The Navigator Company Group.
AUDIT BOARD
The powers and responsibilities of the Audit Board in this regard are:
To supervise the effectiveness of the risk management system, the internal control
system and the internal audit system, proposing adjustments as necessary;
To evaluate and propose improvements to the model, processes and procedures of risk
management and internal control;
To monitor the execution of the activity plans in the scope of risk management and
internal control;
To monitor, evaluate and express an opinion on the strategic guidelines, objectives and
risk policy defined by the Board of Directors, proposing and implementing mechanisms
and procedures for periodic control with a view to ensuring that the risks effectively
incurred by the company are consistent with the objectives set by the management
body;
To issue opinion on the work plans and resources allocated to the internal control
services, including the control of compliance with the rules applied to the Company and
internal audit;
To be informed of the internal control and risk assessment reports issued by the SROC
and to propose the adoption of measures deemed necessary or convenient in light of
such reports;
To be informed of the risk management follow-up reports issued by the Risk
Management Department and to propose the adoption of the measures deemed
necessary or convenient in light of those reports with regard to internal control;
To be aware of and express an opinion on the activity carried out in this area by the Risk
Management Department, on the resources allocated to the services that also perform
internal control functions, being the recipient, if any, of reports or opinions made by
these services when matters relating to accountability, the identification or resolution of
conflicts of interest and the detection of potential illegalities and irregularities are at
issue.
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CHIEF EXECUTIVE OFFICER
The Chief Executive Officer has the following responsibilities:
To define the risk policy of The Navigator Company Group, including the risk appetite;
To take the risk policy into consideration when defining the Navigator Company Group's
strategic objectives;
To provide means and resources with a view to effective and efficient risk management;
Approve the risk management model, processes and procedures;
To define the risk management governance model to be adopted by the Navigator
Company Group, including the responsibilities to be assigned;
To approve the risk management activity plans;
To ensure that the main risks to which The Navigator Company Group is exposed are
identified and reduced to acceptable levels, in line with the risk appetite and tolerance
defined;
To discuss and approve options for the treatment of risks whose residual risk level is
above the risk tolerance levels;
To monitor and review the work carried out by the Risk Management Department in the
area of risk management;
Communicate results to the Board of Directors.
RISK MANAGEMENT DEPARTMENT
The responsibilities of the Risk Management Department in this regard are:
Define the risk management model, processes and procedures;
To elaborate the activity plans in the scope of risk management;
To identify and implement means and resources (human, procedural and technological)
that facilitate risk identification, analysis and management;
Alert to potential risks in the definition of strategic and operational objectives;
To support the definition of risk appetite and risk tolerance;
To assist in defining the responsibilities to be assigned in the context of risk
management;
To support the identification and characterization of risks;
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To monitor risk indicators;
To support the definition of risk mitigation measures;
Evaluate the effectiveness of risk mitigation measures;
Assess compliance with risk tolerance;
Ensure compliance with risk mitigation action plans;
Prepare risk management monitoring reports.
BUSINESS AREAS/DEPARTMENTS
The responsibilities of the business areas/directions in this regard are:
Define risk tolerance;
Identify and characterize risks;
Define and monitor risk indicators;
Define, implement and execute risk mitigation measures, in accordance with the risk
mitigation action plans;
Perform risk and control assessments.
COMPLIANCE AREA (LEGAL, COMPLIANCE AND PUBLIC AFFAIRS DEPARTMENT)
In line with developments in best international practice, Navigator set up a Compliance
Department at the end of 2021, as part of the Legal, Compliance and Public Affairs
Department, underlining the importance of pursuing a compliance policy that encompasses its
activities throughout the entire value, legal and regulatory chain, with a view to transparency
and justice, within the scope of preventing and combating illegal acts.
Navigator therefore considers that a system which promotes legal compliance and ethical
conduct is essential to the proper management and mitigation of the compliance risks
associated with its business and economic activities.
The compliance system implemented in 2022 is designed to assure compliance with the
applicable legal requirements, in particular with a view to preventing corruption, money
laundering, terrorist financing, breaches of international sanctions and protection of personal
data, and to reinforce the ethical culture of the company and of a number of its stakeholders,
namely members of governing bodies, employees and suppliers, by promoting training and
communication activities on matters of legal compliance and ethical conduct.
This system is crucial if the Company is to have adequate capacity to carry on its business in
compliance with the legal requirements applicable in these matters and to promote ethical
conduct on the part of the relevant stakeholders, encouraging respect for the most appropriate
rules and practices in the decision-making process, in the context of the challenges posed by
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the business environment, and also contributing to the creation of value and to the
sustainability of the Group.
To achieve these objectives, the compliance system is aligned with the following key
organizational dimensions of the Navigator Company Group:
The governance model established in the respective articles of association and in the
internal regulations of the Company's management and supervisory bodies;
The business strategy and objectives, in particular through the focus on prevention,
detection and remediation of non-compliance which may have an impact on the
economic and financial value of the Company;
The risk management and internal control system, to allow the second line of defense of
the COSO model to incorporate and act effectively in the management of compliance
risks to which the company is exposed; and
The organizational culture, to promote the assimilation of the importance of compliance
matters for the operation, resilience and reputation of the organization and
simultaneously encourage the adoption of conducts that minimize the tangible and
intangible costs of non-compliance for the company and its people.s
In order to make its compliance system effective, also in 2022, Navigator adopted an effective
and efficient compliance system governance model which clearly identifies the competences of
the various players involved in the processes associated with its business and which
encourages proper coordination and communication between them, based on simple processes
and procedures oriented by business objectives, in order to avoid bureaucratization and loss of
agility in business development.
The structure and organization of the Navigator Company Group's compliance system is based
on the coordinated action of the functional units of the Group's internal structure, in
coordination with the management and supervisory bodies and in accordance with generally
accepted best practices, with a view to supporting the decision-making process.
Within the scope of internal control and risk management, the responsibilities of the
Compliance Area are as follows:
Preventing and detecting situations of legal non-compliance or inappropriate ethical
conduct;
To present and coordinate the implementation of corrective measures or the remediation
of situations of legal non-compliance or inadequate ethical conduct;
To prepare and propose, every year, a three-year plan for the development and updating
of the compliance system;
Prepare and propose the internal rules and procedures in compliance matters;
To carry out integrity assessments of third parties who have dealings with the Navigator
Company Group;
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To identify and manage the compliance risks relevant to Navigator;
To define guidelines on compliance matters;
To coordinate the activity of the compliance officers and to establish the communication
and reporting mechanisms appropriate to their respective functions;
Promote training sessions and other initiatives to develop knowledge in compliance
matters for employees and members of the corporate bodies;
Support the Ethics Committee in the treatment of communications about irregularities
concerning the breach of the Code of Ethics and Conduct;
To monitor the level of compliance in Navigator Company Group companies.
51. Description of the lines of command in this area in relation to other bodies
or committees; an organisational chart may be used to provide this
information.
It is clear from the previous point that risk management in the Company is the responsibility of
the entire organization, with the functions detailed therein.
In terms of the hierarchical and functional framework, it should be noted that the Internal Audit
Department (Risk Management Department), in addition to reporting functionally to the Chief
Executive Officer, also reports to the Audit Board, thus ensuring the necessary support for the
proper execution of its duties. These relationships are schematically shown in the organizational
chart below:
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52. Existence of other divisions with responsibilities in the field of risk control
The Company has the following committees, which complement the work of the Audit Board
and the Chairman of the Executive Board in controlling and monitoring specific risks:
Property Risk Analysis and Monitoring Committee - pronounces on property risk
prevention systems in place in the Company, in close liaison with the risk governance
system in place in the Navigator Company Group; and assesses the adequacy of the
property risk insurance policies in place in the Navigator Company Group, and of the
policies into which they translate.
Corporate Governance Committee - oversees application of the Navigator Company
Group's Corporate Governance rules, as well as the Code of Ethics, and supervises
internal procedures relating to matters of conflict of interests, in particular with regard to
relations between the Navigator Company Group and its shareholders or other
stakeholders.
Sustainability Forum - implements corporate and strategic policy on matters of social and
environmental responsibility, and on prevention of potential risks affecting these issues.
Ethics Committee - oversees compliance with the provisions of the Code of Ethics and
identifies situations affecting compliance.
53. Identification of the main risks (economic, financial and legal) to which
the company is exposed in the course of its business.
In the course of its business, the main risks stem from external aspects (e.g. social and political
changes, financial, regulatory and legislative environment), internal (e.g. strategic and
operational areas) and from the interaction between the various realities.
In order to ensure prompt identification and quantification of the risks to which the business is
exposed, the Navigator Company Group periodically promotes the analysis of each risk in terms
of impact and probability of occurrence. In this context and according to the quantification of
risks carried out, the main risks are presented below:
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#
Main risks (non
exhaustive)
Summary description
1
Raw Material
Access Risk
Risk of unavailability of raw material, or at economically unviable prices given the cost
structure, due to market movements (e.g. increased wood consumption in emerging
markets) or regulatory or legislative restrictions (e.g. restrictions on the planting of
eucalyptus).
2
Cybersecurity Risk
Risk of confidentiality, integrity or availability of data and systems being compromised due
to the occurrence of unauthorized or accidental events that exploit vulnerabilities in
information and communication technologies, corporate and industrial control, processes
or human resources, with significant impact on the business.
3
Changes in logistics
chains
Risk of a reduction in the efficiency of paper distribution channels leading to a change in
the distribution model. This reduction in efficiency is enhanced by the high concentration
pressure between players in the distribution market and may lead to a repositioning in the
value chain.
4
Talent
Risk of inability to hire and retain skills and qualifications to cope with outflows of
resources in critical business areas or areas that are difficult to replace or to meet
additional resource needs in new businesses or areas. This risk has a greater impact at
board level, first line management and in specific operational areas.
5
Legal and
regulatory
framework risk in
Portugal
Risk of regulatory changes in Portugal resulting from political choices, namely in the tax,
environmental or economic areas, significantly affecting, directly or indirectly, Navigator's
operations and/or results. This risk is heightened by the highly concentrated operational
and economic activity in Portugal and the possibility that certain decisions or options may
be conditioned by adverse events in public accounts or the external macroeconomic
environment.
6
Risk of External
Shock
Risk of significant or disruptive changes in Navigator's external environment with serious
adverse effects on markets (demand, prices), production factors (energy, water and raw
materials) or people.
7
Business Risk
Risk of a significant irreversible decline or discontinuity in the consumption of Navigator's
products or in its markets with consequences in terms of its economic viability, value and
liquidity.
8
Investment
Decision taking
Risk of failures or errors in decisions on significant investment or divestment operations,
by action or inaction, quality of decision-making process or timing, with potential impact
on the inability to identify and realize investment opportunities and develop the defined
strategy. The consequence of this risk is the inability to enhance the value of the existing
portfolio or the loss of value creation opportunities.
9
Asset obsolescence
Risk of degradation and need for replacement of production equipment due to exhaustion
of useful life, non-compliance with regulations or lack of competitiveness/efficiency and
that imply heavy investments.
10
Reputational Capital
Risk
Risk of degradation, inability to monetize or increase the value of existing reputation
capital in the medium-long term due to reputationally damaging events or inaction in the
management of existing reputation capital. This risk is enhanced by Navigator's inherent
exposure to environmental and sustainability issues and by the asymmetry in the timing
of reputation appreciation (slow) and devaluation (fast).
11
Portfolio
Risk that an adverse event in a business, in terms of net income, cash flow generated and
valuation of assets, could have a significant impact on Navigator's results and ability to
pay.
12
Interest Rate
Risk of unfavorable interest rate changes that negatively and significantly impact the
Group's financial results, access to competitively priced financing, or cause the inability to
service debt.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 447
#
Main risks (non
exhaustive)
Summary description
13
Exchange ratesz
Risk of unfavourable evolution of the exchange rates of the currencies of geographies
relevant to Navigator against the Euro, with impact on the significant decrease in the
valuation of Navigator's assets and results. This risk is enhanced by the significant weight
of purchase and sale transactions in dollars and possible large investments in countries
outside the Euro zone.
14
Environmental
accident
Risk of a major environmental accident due to incidents of non-natural causes occurring
on assets under the organization's responsibility, with internal or external origin,
corresponding for example to possible leakage or spillage of chemicals in liquid, gaseous
or solid form.
15
Regulatory non-
compliance
Risk of inability or existence of unintentional failures that imply exceeding legal or
regulatory limits regarding environmental parameters, reporting deadlines, or governance
model.
16
Climate Risk
Risk associated with acute (e.g. hurricanes) or chronic (e.g. droughts) climatic events,
with physical impacts on facilities, areas operated by the Group, operations and/or people.
Additionally, it also contemplates transition risks, arising from the Group's inability to
adapt to structural and long-term changes in technology, public policies and consumer
preference (e.g. market failure and non-compliance with regulatory and legal
requirements).
17
Asset devaluation
Risk of losses in the valuation of assets that significantly impact the Group's balance sheet
value and consequently inflict losses on shareholders.
18
Credit
Risk of difficulty or inability to collect all the amounts granted as credit to customers
within the agreed timings and that has a significant impact on the Group's financial
results.
19
Fraud Risk
Risk of occurrence of illegal acts characterized by dishonesty, concealment or breach of
trust that do not involve the use of threat of violence or physical force, perpetrated from
inside or outside the organization with the purpose of obtaining money, property or
services, avoiding payment or loss of services, or to obtain personal or business
advantage. Particularly relevant is exposure to acts of corruption or intentional
failure/error in the internal or external reporting of financial or non-financial information.
20
Access to Finance
Risk
Risk of unavailability of internal or external financing due to endogenous causes (e.g.
over-indebtedness) or exogenous causes (e.g. contraction and negative outlook for
business evolution, decrease in existing market liquidity). This risk is enhanced by the
concentration of the Group's funding or activity in Portugal
Many of the risk factors indicated are beyond the Navigator Company Group's control, namely
market factors that could fundamentally and unfavorably affect the market price of the
Company's shares, regardless of the Group's operational and financial performance.
The risks brought about by climate change, along with the evolution of ESG issues, have taken
on particular prominence in the Navigator Company Group's risk management. In addition to
being directly linked to Navigator Company's business processes, with mitigation controls
described and subject to monitoring, climate change is reflected on multiple fronts in our risk
management structure. For example, obviously the risk of access to raw material or CO2
licenses can to a large extent derive from drought phenomena or the issues of the
(de)carbonization of economies, which Navigator aims to anticipate and which are dealt with
extensively elsewhere in this report.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 448
We continue to build on the solid risk management foundation that helped us maintain
resilience during events such as the Covid-19 pandemic, supply chain shocks, and the
geopolitical turmoil that occurred with Russia's invasion of Ukraine.
Given the potential impact of the Ukraine crisis on the business (e.g. energy supply), processes
were developed to enable a quick response mitigating the impact on operations. The main
areas of focus in 2022 were related to managing high paper demand, upstream and
downstream supply chain disruptions, managing margins and profitability in a scenario of rising
costs throughout the value chain, optimizing Navigator's position as a buyer and supplier of
energy in the market, and managing cybersecurity and compliance issues.
In addition, in 2022, at an early stage of the year, the Group kept the Crisis Management Office
in operation to continue to ensure support for the pandemic crisis. However, as the pandemic
evolved, the Office met only when necessary and on an ad hoc basis. Even so, the Navigator
Company Group continues to provide support whenever necessary, ensuring that all its
Employees remain healthy and that all its sites continue to operate at full capacity.
54. Description of the process of identification, assessment, monitoring,
control and management of risks
For the Navigator Company Group, risk management is an essential decision-making tool
through permanent monitoring of the risks to which it is exposed, making the Group
comprehensively aware of a risk culture that includes the perspective of avoiding risks, but also
the positive perspective of taking risks.
At the same time, the various areas/divisions benefit from risk management through the
possibility of anticipating situations of uncertainty, mitigating the risks of adverse consequences
and enhancing the risks that hold opportunities. The Navigator Company Group also obtains
greater and more sustained decision-making capacity in the face of risk events, responding in a
coordinated and integrated manner to risks with causes, impacts or vulnerabilities which cover
more than one area.
Finally, from the standpoint of Internal Audit and the control environment, risk management is
of particular importance, through the possibility of ongoing assessment of the Navigator
Company Group's risk profile and of strengthening the level of internal control. Risk
management's contribution to Internal Audit is also relevant, directing its action towards the
areas/processes of greatest risk and concern to the business - "Risk-based Internal Audit". As
an immediate result of this approach, it will be possible to plan and carry out audits which take
into consideration the most relevant risks for the Navigator Company Group, using a
methodology for planning audits.
The Navigator Company Group's risk management process follows internationally accepted best
practices, models and frameworks for risk management, among which are the "COSO II -
Integrated Framework for Enterprise Risk Management" and the ISO 31000 standard.
For the elaboration of the risk management process, the ISO 31000 standard was taken into
consideration in what concerns its main phases, and COSO II for the systematization and
structuring of risks. This process is composed of a set of seven interrelated phases, comprising
in itself an iterative process of continuous improvement, embodied by a process of
2022 ANNUAL REPORT CORPORATE GOVERNANCE 449
communication and consultation, and a process of monitoring and review. The following figure
schematically represents the risk management process flow.
The external audit is the responsibility of KPMG. The Company's External Auditor verifies the
application of the remuneration policies and systems, as well as the efficiency and functioning
of the internal control mechanisms through the elements provided by the Company.
The conclusions of the verifications made are reported by the External Auditor to the Fiscal
Council, which, if applicable, reports the deficiencies found.
In view of the main risks identified, the monitoring and control function led by the Risk
Management Department was maintained through the execution of internal control audits. In
this context, during the year 2022 a set of internal control audits were carried out and open
issues from previous audits were followed up.
This year's work focused mainly on internal control processes, namely strengthening the
evaluation of information systems in the Cybersecurity component, analysis of wood supply
processes and talent management. Additionally, the monitoring of internal control issues
identified by the External Auditor was reinforced.
55. Main components of internal control and risk management systems
implemented at the company for the disclosure of financial information
(art. 29-H, no. 1, para. l).
The Company has an internal control system for the preparation and disclosure of financial
information, ensured by Departments/Business Areas of the Company, namely the Accounting
Department, the Taxation Department, the Management Control Department, the Risk
2022 ANNUAL REPORT CORPORATE GOVERNANCE 450
Management Department and the Investor Relations Department, and is regularly monitored
by the Audit Board. Under this system, the Fiscal Council evaluates the financial information
every quarter based on the reports from the department that prepares them and supported, on
a half-yearly and annual basis, by the opinion issued by the Statutory Auditor and External
Auditor. In this context, meetings are also held with the participation of the Risk Management
Department, members of the
Executive Committee, the Chartered Accountant and External Auditor, and those responsible
for accounting and management planning and control, with a view to monitoring the processes
in progress. The elements of the internal control and risk management system are described in
item 54.
IV. Investor support
56. Office responsible for investor support, composition, functions,
information provided and contact details
The Company has had an Investor Relations Office since November 1995, whose mission is to
plan, manage and coordinate all the activities needed to handle contacts, on a permanent and
appropriate basis, with the financial community – investors, shareholders, financial analysts
and regulatory authorities – and to publish the Company’s financial reports and any other
information of relevance to the stock market performance of Navigator shares in the capital
markets.
In keeping with the principles of coherence, integrity, regularity, fairness, credibility and
opportunity, the office helps to facilitate the investment decision-making process and sustained
value creation for shareholders.
The mission of the Investor Relations Office is to comply with its legal obligations of reporting
to the regulator and to the market, and in particular to disclose the Group’s profits and
activities, reply to information requests from investors, financial analysis and other agents and
also to support the Executive Committee in making public The Navigator Company’s strategy
for growth and development.
As such, this office adequately and rigorously handles the production, processing and timely
disclosure of information to the Management, shareholders, investors, other stakeholders,
financial analysts and the market in general.
The Investor Relations Office comprises of a single person, who also acts as market relations
officer and whose contact details are provided in the following item.
All mandatory disclosures, such as information on the Company name, its status as a public
company, registered offices and other details required by article 171 of the Companies Code,
are available on the Navigator Group’s website, at http://www.thenavigatorcompany.com/.
Also available in the investors’ section of the Navigator website, in Portuguese and English, are
disclosures of quarterly results, half-yearly and annual reports and accounts, together with the
respective statements and press releases, description of statutory bodies, the financial
calendar, the Company’s Articles of Association, notices of General Meetings, and all motions
tabled for discussion and vote at General Meetings, resolutions approved and statistics relating
to attendance, together with relevant developments.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 451
57. Investor Relations Officer
The Company's Investor Relations representative is Ana Rosa Pinelo Esteves Canha and can be
contacted through the Company's general phone number (+351 219017300) or email address:
ana.canha@thenavigatorcompany.com.
These contacts are available on Navigator's website, in the Investors area.
58. Information on the proportion and response time to information requests
during the year or pending from previous years
Requests for information placed with the Investor Relations Office are mostly made by email or
telephone. All requests are answered or forwarded to the competent services, and the
estimated average response time is less than three working days.
Over 2022, nearly 90 requests for information were received by email and about 120 by phone,
requests from investors, financial analysts or other entities. There were 41 face-to-face
meetings with investors, 5 visits to the Group's plants and nurseries, and 18 virtual conferences
with investors. As of December 31, 2022, all requests for information received had been
considered complete, so that there were no pending requests as of that date.
V. Website
59. Address(es).
Navigator’s website is at: http://www.thenavigatorcompany.com/.
60. Location information on the company name, public company status,
registered office and other items referred to in article 171 the Companies
Code
The above information is available in the Investors’ area of Navigator’s website at
http://www.thenavigatorcompany.com/Investidores/Accao-Navigator.
61. Location of the articles of association and operating regulations of boards
and/or committees
The above information is available in the Investors’ area (Corporate Governance section) of
Navigator’s website at http://www.thenavigatorcompany.com/Investidores/Governo-da-Sociedade.
62. Location of information on the identities of members of statutory bodies,
the market relations officer and the Investor Support Office or equivalent
structure, and their respective duties and means of access
The above information is available in the Investors’ area (specifically in the Corporate
Governance section) as well as in the area entitled “Profile” of Navigator’s website, respectively,
at http://www.thenavigatorcompany.com/Investidores/Governo-da-Sociedade and
http://www.thenavigatorcompany.com/Investidores/Contactos.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 452
63. Location for consultation of financial statements and reports, which must
be accessible for no less than five years, together with the six-monthly
corporate diary, disclosed at the start of each semester, including,
amongst other things, General Meetings, disclosure of annual, half-yearly
and (if applicable) quarterly accounts
Navigator’s quarterly, half-yearly and annual results, published since 2003, are available in the
Investors’ area (in the section entitled “Financial information”), at
http://www.thenavigatorcompany.com/Investidores/Informacao-Financeira. There is a specific
tab in the investors’ area for the corporate diary for the current year, available at
http://www.thenavigatorcompany.com/Investidores/Calendário.
64. Location for publishing the meeting notice for the General Meeting and all
preparatory and subsequent information related to it
General Meeting notices and all related preparatory and subsequent information are available in
the Investors’ area (in a separate tab entitled “General Meetings”) at
http://www.thenavigatorcompany.com/Investidores/Assembleias-Gerais.
65. Location for publishing a historical archive of decisions made at the
company’s general meetings, share capital representation and voting
results for the 3 preceding years
The above information is available at the same location as information on General Meetings, i.e.
in the investors’ area (in a separate tab entitled “General Meetings”) at
http://www.thenavigatorcompany.com/Investidores/Assembleias-Gerais.
D. Remuneration and Remuneration Report
I. Powers to determine remuneration
66. Indication of the powers for determining the remuneration of statutory
bodies, members of the executive committee or managing director and
company managers
Powers to determine the remuneration of the Board of Directors and the Audit Board lie with
the Remuneration Committee.
Powers to determine the remuneration of company managers lie with the Board of Directors.
II. Remuneration Committee
67. Composition of the Remuneration Committee, including identification of
individuals or organisations contracted to provide support, and
declaration regarding the independence of each member and adviser
During 2022, the Remuneration Committee was composed, until the General Meeting of May
27th, by José Gonçalo Ferreira Maury, João Rodrigo Appleton Moreira Rato and João do Passo
Vicente Ribeiro and, after that date, by Maria Eduarda Faria e Maia de Oliveira Luna Pais, João
do Passo Vicente Ribeiro and Carlota Infante da Câmara Albergaria Caldeira.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 453
The Company considers all members of the Remuneration Committee to be independent.
The Remuneration Committee does not have any persons hired to assist it. The Company may
freely decide to contract any services that are deemed necessary or appropriate, within the
limits of the Company's budget, a right it has exercised in the past, in which case it must
ensure that the services are provided independently and that the respective providers are not
hired to provide other services to the Company itself or to other companies in a controlling or
group relationship, without the express authorization of the Committee. The Company
considers that the composition of the Remuneration Committee ensures its independence from
management, as all its members are independent.
In the Company, the Remuneration Committee provides all information or clarifications to the
shareholders at the respective Annual General Meetings or any other General Meetings, if the
respective agenda includes a matter related to the remuneration of the members of the
Company's governing bodies and committees or if this is requested by the shareholders, and
does so through the presence of at least one of its members. This was the case at the Annual
General Meeting of May 27, 2022, which was attended by all of its outgoing members.
68. Expertise and experience of the members of the Remuneration
Committee in the field of remuneration policy
Two of the members of the Remuneration Committee, Eduarda Luna Pais and Carlota
Albergaria Caldeira, have extensive knowledge and experience in remuneration policy.
Eduarda Luna Pais was a consultant at Egon Zehnder for several years, and later Office Leader
and Partner of this firm, which has extensive experience and is a leader in executive
recruitment, which involves deep and permanently updated knowledge of the processes and
evaluation criteria and associated remuneration packages.
Carlota Albergaria Caldeira has solid experience in human resources consulting with a focus on
executive search projects management (national and international market) and assessments,
having, for several years, conducted consulting projects in companies providing services in the
area of talent management and executive recruitment, such as Jason Associates, Argo Talents
and Mercer. She was also a Senior Associate at Heidrick & Struggles where she managed
several consulting projects in Human Capital/Leadership Services.
III. Remuneration Structure
69. Description of the remuneration policy of the management and
supervisory bodies referred to in article 26-A et seq. of the CVM.
The remuneration policy for the management and supervisory bodies ("Remuneration Policy")
for the year 2022, prepared by the Remuneration Committee, was approved at the Annual
General Meeting of May 11, 2021, and corresponds to Annex II of this Report, and there is no
departure from the procedure for applying the approved remuneration policy or any
derogations to it.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 454
70. Information on the means of structuring remuneration to align the
interests of managing board’s members with the long-term interests of
the company, and how this is based on performance assessment,
discouraging the assumption of excessive risk
The way in which the remuneration of the corporate bodies was structured and how the
performance assessment of the executive board was based in 2022 followed the model and the
principles - duties performed, the state of the company's affairs and market criteria - set out in
the Remuneration Policy for members of Navigator's management and supervisory bodies in
force, namely in chapters III and IV and V, to which reference is made. The process and the
bodies involved in assessing the performance of executive directors are described in item 24
above.
The remuneration system in force in Navigator ensures its business strategy and also, in the
long term, the alignment of the interests of the members of the Board of Directors with the
interests of the company and its sustainability, in particular because the remuneration is fair
and equitable within the scope of the principles set out and because it links the members of the
Board of Directors to results through a variable remuneration component which is based on
results but also takes into account the behavioral skills of each director such as their alignment
with the long-term interests of the company and its sustainability.
In relation to remuneration components: (i) the remuneration of the members of the Board of
Directors consists of a fixed component, corresponding to an annual amount, payable
throughout the year, and, for the Executive Directors, also incorporates a variable component
that may correspond to a percentage not exceeding five percent of the net income of the
previous year in accordance with the Company's articles of association, (ii) the remuneration of
the members of the Audit Board corresponds to an annual fixed amount, payable throughout
the year, and (iii) the remuneration of the members of the General Meeting consists only of a
fixed amount determined according to the meetings actually held.
With regard to the variable component of the remuneration of executive directors, this is based
on a target value applicable to each director and which is due under the conditions of
performance of the director and of the company that match the expectations and objectives
previously set. This target value is defined by weighting the principles mentioned above -
market, specific duties, the company's situation -, with emphasis on comparable market
situations in functions of equivalent relevance. The weightings of the actual performance
against expectations and goals, which determine the variation in relation to the target, are
based on a set of KPIs, as mentioned in point 25 above, quantitative and qualitative, related to
the performance of the company (general business indicators) and of the director in question
(specific goals and behavioral indicators). Within the general business indicators, EBITDA, net
income, cash flow and Total Shareholder Return vs. This system has ensured that Navigator
has no discretionary variable remuneration.
In addition to the statutory limit on directors' participation in the profits for the period, the
company also has procedures for limiting variable remuneration: (i) the variable component is
eliminated in the event of the results showing a deterioration regarded as significant in the
Company's performance in the last period for which accounts have been closed or when such a
deterioration may be expected in the period underway, and (ii) the amount of the variable
component assignable has a cap defined in order to prevent good performance at any one time,
with immediate remuneration advantages for the directors, being at the cost of good future
2022 ANNUAL REPORT CORPORATE GOVERNANCE 455
performance. In view of the above, it is clear that the criteria for assigning remuneration
contribute to achieving the strategy defined by Navigator, as well as to the long-term interests
and sustainability of the company.
Although the Company has no independent remuneration mechanism specifically designed to
discourage excessive risk-taking, Navigator does not include in its directors' performance
targets any specific objectives which encourage excessive risk-taking, nor has it instituted any
mechanism which allows future remuneration to be paid in advance. Risk is a characteristic
inherent to any act of management and, as such, is unavoidably and permanently subject to
consideration in any management decision. Its qualitative or quantitative assessment as good
or bad cannot be made in isolation in itself, but only in its result in the performance of the
company over time, thus being confused with long-term interests, and therefore benefiting
from the incentives to general long-term alignment and sustainability referred to above.
71. Reference, if applicable, to the existence of a variable remuneration
component and information on any impact on this from performance
assessments
The remuneration of executive directors includes a variable component which depends on the
performance evaluation, as described in the previous point and in the Remuneration Policy, in
particular in points 3 and 7 of chapter IV.
The individual and qualitative component of the performance evaluation had a considerable
impact of 35% (specific objectives, with a weight of 20%, and behavioral indicators, with a
weight of 15%) on this variable component of the remuneration, percentages that will apply in
the performance evaluation for the year 2022.
With regard to non-executive directors, it should be noted that although it is only composed of
a fixed portion, it may be differentiated by virtue of the accumulation of functions and added
responsibilities, namely through the performance of functions in specialized committees or
commissions.
Other than the statutory limit on management profit sharing, there are no other maximum
compensation limits and no mechanism is in place for the company to request the refund of
variable compensation paid.
The remuneration of the members of the Audit Board does not include any variable component.
72. Deferred payment of the variable remuneration component, with
reference to the deferral period
In the Company there is no deferment of payment of the variable component of remuneration.
73. Criteria applied in allocating variable remuneration in shares and on the
continued holding by executive directors of these shares, on any
contracts concluded with regard to these shares, specifically hedging or
transferring risk, the respective limits and the respective proportion
represented of total annual remuneration
In the Company, the variable remuneration does not include any component in shares.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 456
74. Criteria applied on the allocating of variable remuneration in options and
an indication of the deferral period and value
In the Company, the variable remuneration does not include any component in options.
75. Main parameters and grounds for any annual bonus system and any
other non-cash benefits
The criteria governing the setting of annual bonuses are those relating to variable remuneration
described in item 7 of chapter IV of the Remuneration Policy and in items 25 and 70, above.
Apart from the variable component that may be attributed to the members of the executive
management bodies, no other non-pecuniary benefits are attributed to the members of the
management and supervisory bodies, without prejudice to the means placed at their disposal.
76. Main features of complementary or early retirement schemes for
directors, and the date of approval by the General Meeting for each
individual
In the company there are currently no complementary pension or early retirement schemes for
directors.
In 2019, a proposal was submitted to the Insurance and Pension Fund Supervisory Authority
(ASF) to alter the Pension Fund Contract whereby The Navigator Company Pension Plan was
altered, so that directors would no longer be entitled to a pension supplement under the Plan.
This alteration was approved by ASF in 2022 with retroactive effect from 2 December 2021.
However, under the terms of the Regulations of The Navigator Company Pension Plan (former
Portucel S.A. Pension Plan) in force up to the date on which the alteration of the Articles of
Association took effect, the Company's directors who were remunerated as such, and who had
served at least one full term of office in accordance with the articles of association, were
entitled, after retirement or in the event of disability, if this occurred during their term of office,
to a monthly supplementary old-age or disability pension respectively.
If the disability occurred after the end of the term of office, the aforementioned members of the
Board of Directors would only be entitled to the disability pension supplement if they were
granted the corresponding disability pension by the Social Security body to which they were
affiliated and if they requested it from the Company.
This complement was defined according to a formula that takes into consideration the gross
monthly remuneration and the number of years of service, with a minimum of 10 years and a
maximum of 30 years.
At December 31, 2022, Manuel Soares Ferreira Regalado was the only director who was a
beneficiary of The Navigator Company Pension Plan. In addition, the directors António José
Pereira Redondo, Adriano Augusto da Silva Silveira and João Paulo Cabete Gonçalves Lé are
participants in pension plans of Navigator Brands, S.A., a subsidiary of the Company, in the
capacity of employees of that company, prior to taking up management positions.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 457
Due to the specific nature of the Navigator Company Group's pension plan, the General Meeting
has not, to date, intervened in approving the main features concerning the specific rules
applicable to the retirement of directors.
It should be noted in this regard that the Company was a public company until 1991, with its
activity and form of operation regulated by the special law applicable to this type of company,
with the specific rules applied to the retirement of members of the Board of Directors having
been approved during this period.
However, it should be noted that the pension supplement plans in force in the Company are
described in Note 7 of the notes to the consolidated accounts for the year, which are part of the
Report and Accounts subject to approval by the General Meeting.
IV. Disclosure of Remuneration
77. Indication of the annual amount of remuneration earned, in aggregate
and individual form, by the members of the management bodies of the
company, from the company, including fixed and variable remuneration
and, in relation to this, mention of the different components that gave
rise to it
Indicated below is the amount of remuneration earned in 2022, with variable remuneration
paid in 2022 but relating to performance in 2021, by members of the Company's management
body from Navigator, with a distinction between fixed and variable remuneration, and relative
percentages, but without distinguishing the different components that gave rise to the variable
remuneration, because the variable component is defined as a whole, weighting the elements
explained in the Remuneration Policy, without identifying components.
Fixed Remuneration
Variable Remuneration
Amount (
Relative
Percentage
Amount
(Euros)
Relative
Percentage
António José Pereira Redondo
651,780
45.60%
777.486
54.40%
Adriano Augusto da Silva Silveira
319,214
33.80%
625.240
66.20%
João Paulo Cabete Gonçalves Lé
319,214
34.62%
602.857
65.38%
João Paulo Araújo Oliveira
319,199
36.01%
567.308
63.99%
José Fernando Morais Carreira de Araújo
319,213
33.85%
623.780
66.15%
Nuno Miguel Moreira de Araújo Santos
319,199
34.25%
612.855
65.75%
Manuel Soares Ferreira Regalado
77,000
100%
-
0%
Maria Teresa Aliu Presas
77,000
100%
-
0%
Mariana Rita Antunes Marques dos Santos
105,000
100%
-
0%
Sandra Maria Soares Santos
77,000
100%
-
0%
Vítor Manuel Galvão Rocha Novais Gonçalves
98,000
100%
-
0%
(in Euros)
The table above shows the annual amount corresponding to the period during which the
members of the Board of Directors held office.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 458
The tables below set out, for the purposes of Article 26.2.c) of the Securities Code, the annual
variations over the last five financial years in the remuneration paid individually by the
Company to the members of the Board of Directors, as well as the average remuneration of the
Company's full-time equivalent employees, and the Company's performance indicators:
Amount in Euros
Board of Directors
2018
2019
2020
2021
2022
António José Pereira
Redondo
Fixed remuneration
314,486
319,203
655,698
668,349
651,780
Variable remuneration
523,551
548,702
185,984
839,967
777,486
% variation
0.1%
3.6%
-3.0%
79.2%
-5.2%
Adriano Augusto da Silva
Silveira
fixed remuneration
397,108
297,108
313,172
319,214
319,214
Variable remuneration
-
-
117,000
628,891
625,240
% variation
-
-25.2%
44.8%
120.4%
-0.4%
João Paulo Cabete
Gonçalves Lé
fixed remuneration
-
-
315,392
319,214
319,214
Variable remuneration
-
-
15,074
524,141
602,857
% variation
-
-
100%
155.2%
9.3%
João Paulo Araújo Oliveira
fixed remuneration
314,482
319,190
313,157
319,806
319,199
Variable remuneration
456,349
485,485
121,627
582,448
567,308
% variation
-8.3%
4.4%
-46.0%
107.5%
-1.7%
José Fernando Morais
Carreira de Araújo
Fixed remuneration
314,496
319,213
313,171
319,213
319,213
Variable remuneration
489,410
554,110
175,663
599,172
623,780
% variation
-5.8%
8.6%
-44.0%
87.9%
2.7%
Nuno Miguel Moreira de
Araújo Santos
Fixed remuneration
314,486
319,199
313,157
319,199
319,199
Variable remuneration
562,493
415,447
128,915
474,022
612,855
% variation
6.6%
-16.2%
-39.8%
79.4%
17.5%
Manuel Soares Ferreira
Regalado
Fixed remuneration
77,000
77,000
75,543
77,000
77,000
Variable remuneration
-
-
-
-
-
% variation
-69.7%
-
-1.9%
1.9%
0.0%
Maria Teresa Aliu Presas
Fixed remuneration
-
56,023
75,522
77,000
77,000
Variable remuneration
-
-
-
-
-
% variation
-
100%
34.8%
2.0%
-
Mariana Rita Antunes
Marques dos Santos
Fixed remuneration
-
76,395
102,984
105,000
105,000
Variable remuneration
-
-
-
-
-
% variation
-
100%
34.8%
2.0%
0.0%
Sandra Maria Soares
Santos
Fixed remuneration
-
56,023
75,522
77,000
77,000
Variable remuneration
-
-
-
-
-
% variation
-
100%
34.8%
2.0%
-
Vítor Manuel Galvão
Rocha Novais Gonçalves
Fixed remuneration
98,000
98,000
96,145
77,000
98,000
Variable remuneration
-
-
-
-
-
% variation
-
-
-1.9%
-19.9%
27.3%
Pedro Mendonça de
Queiroz Pereira
Fixed remuneration
689,200
-
-
-
-
Variable remuneration
967,061
-
-
-
-
% variation
-8.9%
-
-
-
-
Diogo António Rodrigues
da Silveira
Fixed remuneration
517,713
259,033
-
-
-
Variable remuneration
620,627
653,534
-
-
-
% variation
-0.7%
-19.8%
-
-
-
Luís Alberto Caldeira
Deslandes
Fixed remuneration
117,579
77,000
-
-
-
Variable remuneration
-
-
-
-
-
% variation
-25.7%
31.0%
-
-
-
2022 ANNUAL REPORT CORPORATE GOVERNANCE 459
Amount in Euros
Audit Board
2018
2019
2020
2021
2022
José Manuel Vitorino
Fixed remuneration
19,854
21,994
21,994
21,994
21,994
% variation
24.1%
10.8%
-
-
-
Gonçalo Picão Caldeira
Fixed remuneration
16,002
16,002
16,002
16,002
16,002
% variation
-
-
-
-
-
Maria da Graça
Gonçalves
Fixed remuneration
9.399
16,002
16,002
16,002
16,002
% variation
100%
70.26%
-
-
-
Miguel Camargo de
Sousa Eiró
Fixed remuneration
31.957
-
-
-
-
% variation
45,3%
35
-
-
-
-
78. Amounts paid on any basis by other controlled, controlling or group
companies or companies under common control
It is important to clarify that the amounts referred to in this paragraph relate only to companies
not controlled by Navigator. Also included are amounts that are alien to the Navigator and its
governing bodies, as they relate to its shareholders, shareholders of shareholders and other
companies controlled by shareholders, provided there is a relationship of dominance.
Directors Ricardo Miguel dos Santos Pacheco Pires (1,293,077.05 euros), Vítor Manuel Galvão
Rocha Novais Gonçalves (27,500.00 euros) and Vítor Paulo Paranhos Pereira (1,293,077.05
euros) earned remunerations in other companies in a control relationship or that are subject to
a common control. It should be clarified that the remaining members of the Board of Directors
did not receive any remuneration from other companies in a group relationship. It should be
clarified that the other members of the Board of Directors did not earn remuneration from other
companies in a group relationship with Navigator, based on the definition of group within the
meaning of article 2(1)(g) of Decree-Law 158/2009, of 13 July, in accordance with article
26g(2)(d) of the CVM.
79. Remuneration paid in the form of profit sharing and/or payment of
bonuses, and the grounds on which these bonuses and/or profit sharing
were granted
The amount of the remuneration paid by the Company in the form of profit-sharing and/or
payment of bonuses corresponds to the variable remuneration referred to in item 77 of this
report, which amounts were determined by the Remuneration Committee based on the actual
application of the criteria described in item 2 of chapter VI of the Remuneration Policy
Statement.
80. Compensation paid or due to former executive directors for their
dismissal during the year
No compensation was paid during the year, nor is any compensation due, to former Executive
Directors for their dismissal.
35
The apparent increase in the fixed remuneration of the Chairman of the Audit Board in 2018 was due to the fact that he terminated his term of office early
and therefore earned the remuneration he would have received until the end of the period for which he was elected.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 460
81. Indication of the annual remuneration earned, on an aggregate and
individual basis, by the members of the Company’s supervisory bodies,
for the purposes of Law 28/2009 of 19 June
Fixed Remuneration
Variable Remuneration
Amount (Euros)
Relative percentage
Amount (Euros)
Relative percentage
José Manuel Vitorino
21,994
100%
0
0.0%
Gonçalo Picão Caldeira
16,002
100%
0
0.0%
Maria da Graça Gonçalves
16,002
100%
0
0.0%
82. Indication of remuneration earned in the reporting period by the
Chairman of the General Meeting
The Chairman of the General Meeting only receives a fixed remuneration, taking into
consideration the number of meetings of the General Meeting each year.
In 2022, the Chairman of the Board of the General Meeting received a fixed remuneration in
the amount of €3,000 (three thousand euros).
V. Agreements with implications for remuneration
83. Contractual limits on severance pay for directors, and the respective
relationship with the variable remuneration component.
The Company has no contract with directors limiting or otherwise altering the supplementary
legal rules on fair or unfair termination; the Remuneration Policy approved by the Company’s
Remuneration Committee provides that the supplementary legal rules will apply in case of
termination of directors term in office.
Therefore, considering the absence of individual contracts with directors in this regard and the
provisions of the Remuneration Policy approved by the Company's Remuneration Committee,
where the removal of a director is not due to serious breach of their duties nor to their
unfitness for the normal exercise of their functions, the Company will be obliged to pay
compensation in accordance with the general terms of the law, although such compensation
shall not exceed the value of the remuneration they would presumably have received through
to the end of their term of office.
Dismissal before the expiry of the mandate does not entitle the director, either directly or
indirectly, to compensation beyond the statutory amounts.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 461
84. Reference to the existence and description, with indication of the
amounts involved, of agreements between the company and the
members of the management body and directors, as defined by article
248-B (3) of the Securities Code, which provide for compensation in the
event of dismissal, unfair dismissal or termination of employment as a
result of a change in control of the company. (article 29-H, (1) (k)).
There are also no agreements between the Company and Board members or managers, which
provide for compensation in the event of resignation, dismissal without due cause or
termination of employment contract as a result of a change of control of the Company.
VI. Stocks or stock option plans
85. Identification of plan and beneficiaries.
The company has no stock or stock option plans.
86. Description of plan (terms of allocation, non-transfer of share clauses,
criteria on the price of shares and the price of exercising options, the
period during which the options may be exercised, the characteristics of
the shares to be distributed, the existence of incentives to purchase
shares and/or exercise options).
Not applicable.
87. Stock-option rights for which the company’s workers and Employees are
the beneficiaries.
Not applicable.
88. Control mechanisms in an employee ownership scheme insofar as voting
rights are not directly exercised by Employees (article 245-A (1) (e)).
There is no employee ownership scheme in Navigator.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 462
E. Related party transactions and conflicts of interest
I. Control mechanisms and procedures
89. Procedures implemented by the Company for controlling related party
transactions (reference is made for this purpose to the concept deriving
from IAS 24).
The Company has a Regulation on Conflicts of Interest and Related Party Transactions, through
which rules were defined relating to conflicts of interest and transactions with related parties, to
which the Company is party, in addition to the internal mechanisms that the Company has in
place for compliance with international accounting standard IAS 24 (Related Party Disclosures),
and is applicable without prejudice to the obligations of the Company and of its officers in
matters of Privileged Information, to the legal regime of the Company's dealings with directors,
and to the internal regulation on the Reporting of Irregularities and to other applicable
legislation on this matter. This regulation was amended due to the changes resulting from Law
no. 50/2020, of August 25 and by resolution of the Board of Directors of December 17, 2020,
with a favorable and binding opinion from the Audit Board, which now includes the applicable
legal and regulatory regime in force on this matter.
Such regulations are available for consultation on the company website
(http://www.thenavigatorcompany.com/Investidores/Governo-da-Sociedade).
In accordance with the Regulation on Conflicts of Interest and Related Party Transactions,
Related Party Transactions are the transactions that are defined as such by the international
accounting standards adopted in accordance with Regulation (EC) No. 1606/2002 of the
European Parliament and of the Council, of 19 July, and in particular by the International
Accounting Standard (IAS) 24 (Related Party Disclosures). They are subject to the following
approval procedures.
The following Transactions are approved by the Executive Committee:
a) Loans granted to the Company by shareholder companies with a value of less than or
equal to one hundred million euros;
b) Transactions under the taxation regime for company groups, with a value of less than
or equal to one hundred million euros;
c) Transactions with controlled companies that consolidate accounts with the Company,
with an individual or accumulated annual value of less than or equal to two percent of
the controlled company's revenue, assessed according to the latest approved annual
accounts;
d) Loans to controlled companies that consolidate accounts with the Company and, thus,
holds their debt, (i) with a maturity of less than six months, (ii) individual or
cumulative annual value of less than one fifth of the controlled company's revenue,
assessed according to the latest approved annual accounts and not exceeding one
hundred million euros and (iii) as long as the controlled company ensures credit lines
for the reimbursement of the operation, and
2022 ANNUAL REPORT CORPORATE GOVERNANCE 463
e) All other Transactions with an individual or cumulative annual amount of less than or
equal to one million euros.
Transactions that (i) do not fall within the scope of the previous paragraphs or (ii) fall within
those paragraphs but are not carried out within the Company’s ordinary course of business, are
adopted by the Board of Directors, subject to prior approval by the Audit Board.
Under said Regulation, only transactions carried out under market conditions are permitted and
if there is a justified interest of the Company.
With regard to the procedures for information, verification and formalization of transactions
with related parties, the regulation provides that:
The Board of Directors is informed every six months of resolutions regarding transactions
in which it has not participated;
The Audit Board is informed of the transactions that the Company carries out for the
purposes of verifying the compliance of the transactions with the above described regime
and with the applicable legislation and regulations, and the related parties will not be
able to participate in the verification in question;
It is also incumbent upon the Company's Managers who intervene in the formalization of
transactions with related parties to ensure that the transactions are previously submitted
to the deliberations required by the regulation and in the applicable legislation and
regulation, and
The formalization and execution of resolutions on transactions with related parties must
be subject to special monitoring by the Executive Committee.
The Company will disclose the transactions that must be disclosed under applicable legislation
and regulations, namely because they have not met any of the legal requirements or due to the
amount in question, in accordance with and in the period provided for in the applicable laws
and regulations.
The regulation will not apply to transactions treated as exempt by applicable law and
regulation.
With regard to the procedures applicable in the area of conflicts of interest, the regulation
provides that a situation of conflict exists whenever any decision maker or participant in a
decision-making process (Manager) is in a position that, viewed objectively, may compromise
his independence and cause in his judgment an influence of interests that differ from the
interests of the Company, be they financial or not, his own or belonging to third parties, and
that, for the purposes of its adequate prevention, identification and resolution, the Manager
must:
Communicate the existence of a conflict of interest, even if potential, to his superior or,
in the case of a member of a collegiate body, to the body in question, in accordance with
the relevant operating regulations, and
Refrain from interfering or participating in the decision-making process whenever they
are in conflict of interest, and record this impediment in the minutes or other written
2022 ANNUAL REPORT CORPORATE GOVERNANCE 464
document that registers the decision, without prejudice to the duty to provide
information and clarifications the body concerned and its members request.
In addition, all regulations governing the operation of the corporate bodies and internal
commissions contain provisions on conflicts of interest in accordance with the rules described
above.
90. Indication of transactions subject to control in the reporting period.
In 2022, there were no other transactions subject to control given that, in accordance with the
criteria referred to in item 91 below, none of the Company’s transactions with qualifying
shareholders or any other related entities, under article 20 of the Securities Code, were subject
to prior clearance by the Supervisory Board. It should also be noted that there was no business
between the Company and qualifying shareholders outside normal market conditions.
91. Description of the procedures and criteria applicable to intervention by
the supervisory body for the purposes of prior evaluation of transactions
to be carried out between the Company and qualifying shareholders or
related entities, under article 20 of the Securities Code.
The procedures and criteria applicable to intervention by the supervisory body for the purposes
of prior evaluation of transactions to be carried out between the Company and qualifying
shareholders or related entities, under article 20 of the Securities Code, are described in item
89.
II. Details of Transactions
92. Indication of the place in the financial reports and account where
information is available on related party transactions, in accordance with
IAS 24, or, alternatively, reproduction of this information.
The information available on related party transactions is included in the Company’s Report and
Accounts, in no. 11.3 of the Notes to the Consolidated Financial Statements.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 465
Part II - Corporate Government Assessment
I. Identification of the Corporate Governance code Adopted
In 2018, Navigator adopted the Corporate Governance Code of the Portuguese Institute of
Corporate Governance (“IPCG”) of 2018, in accordance with and for purposes of article 2 of
CMVM Regulation no. 4/2013.
The adopted Code was revised by the IPCG in 2020. It is released by the IPCG and can be
accessed on the respective website, at
http://cam.cgov.pt/images/ficheiros/2020/revisão_codigo_en_2018_ebook-05.11.2020.pdf
II. Analysis of compliance with the Corporate Governance Code
adopted
Navigator has adopted most of the IPCG Corporate Governance Code Recommendations.
The Principles and Recommendations of this Code are listed in the table below, with
indication of the Recommendations adopted, not applicable and not adopted, and
reference is made to the points in this Report where the matter is developed. In relation
to the Recommendations not adopted, justification for non-adoption and a mechanism
equivalent to the adopted “explain”.
Compliance
Comments
CHAPTER I – GENERAL PROVISIONS
General Principle
Corporate Governance should promote and enhance the performance of companies, as well as of the capital markets, and strengthen the
trust of investors, employees and the general public in the quality and transparency of management and supervision, as well as in the
sustained development of the companies.
I.1 Company’s relationship with investors and disclosure
Principle
Companies, in particular its directors, should treat shareholders and other investors equitably, namely by ensuring mechanisms and
procedures are in place for the suitable management and disclosure of information.
Recommendation
I.1.1. The Company should establish mechanisms to ensure the timely disclosure of
information to its governing bodies, shareholders, investors and other stakeholders, financial
analysts, and to the markets in general.
Adopted
Part I, no. 21, 22, 38
and 56 to 65
2022 ANNUAL REPORT CORPORATE GOVERNANCE 466
Compliance
Comments
I.2 Diversity in the composition and functioning of the company’s governing bodies
Principles
I.2.A. Companies ensure diversity in the composition of its governing bodies, and the adoption of requirements based on individual
merit, in the appointment procedures that are exclusively within the powers of the shareholders.
I.2.B. Companies should be provided with clear and transparent decision structures and ensure a maximum effectiveness of the
functioning of their governing bodies and commissions.
I.2.C. Companies ensure that the functioning of their bodies and committees is duly recorded, namely in minutes, to allow an
understanding not only of the meaning of the decisions taken, but also of their grounds and opinions expressed by their members.
Recommendations
I.2.1. Companies should establish standards and requirements regarding the profile of
new members of their governing bodies, which are suitable according to the roles to be
carried out. Besides individual attributes (such as competence, independence, integrity,
availability, and experience), these profiles should take into consideration general diversity
requirements, with particular attention to gender diversity, which may contribute to a better
performance of the governing body and to the balance of its composition.
Adopted
Part I, no. 16
I.2.2. The company’s managing and supervisory boards, as well as their committees,
should have internal regulations — namely regulating the performance of their duties, their
Chairmanship, periodicity of meetings, their functioning and the duties of their members —,
disclosed in full on the company’s website. Minutes of the meetings of each of these bodies
should be drawn out.
Adopted
Part I, no. 22, 27, 29,
34 and 38
I.2.3. The composition and the number of annual meetings of the managing and
supervisory bodies, as well as of their committees, should be disclosed on the company’s
website.
Adopted
Part I, no. 22, 27, 34
and 61
I.2.4. A policy for the communication of irregularities (whistleblowing) should be
adopted that guarantees the suitable means of communication and treatment of those
irregularities, with the safeguarding of the confidentiality of the information transmitted and
the identity of its provider, whenever such confidentiality is requested.
Adopted
Part I, no. 49, 50, 54
and 89
I.3 Relationships between the company bodies
Principle
Members of the company’s boards, especially directors, should create, considering the duties of each of the boards, the appropriate conditions
to ensure balanced and efficient measures to allow for the different governing bodies of the company to act in a harmonious and coordinated
way, in possession of the suitable amount of information in order to carry out their respective duties.
Recommendations
I.3.1 The bylaws, or other equivalent means adopted by the company, should establish
mechanisms that, within the limits of applicable laws, permanently ensure the members of
the managing and supervisory boards are provided with access to all the information and
company’s collaborators, in order to appraise the performance, current situation and
perspectives for further developments of the company, namely including minutes,
documents supporting decisions that have been taken, calls for meetings, and the archive of
the meetings of the managing board, without impairing the access to any other documents
or people that may be requested for information.
Adopted
Part I, no. 21, 22 and
38
I.3.2. Each of the company’s boards and committees should ensure the timely and
suitable flow of information, especially regarding the respective calls for meetings and
minutes, necessary for the exercise of the competences, determined by law and the bylaws,
of each of the remaining boards and committees.
Adopted
Part I, no. 21, 22, 27
and 38
2022 ANNUAL REPORT CORPORATE GOVERNANCE 467
Compliance
Comments
I.4 Conflicts of Interests
Principle
The existence of current or potential conflicts of interest, between members of the company’s boards or committees and the company, should
be prevented. The non-interference of the conflicted member in the decision process should be guaranteed.
Recommendations
I.4.1. The members of the managing and supervisory boards and the internal
committees are bounded, by internal regulation or equivalent, to inform the respective
board or committee whenever there are facts that may constitute or give rise to a conflict
between their interests and the company’s interest.
Adopted
Part I, no. 89
I.4.2. Procedures should be adopted to guarantee that the member in conflict does not
interfere in the decision-making process, without prejudice to the duty to provide
information and other clarifications that the board, the committee or their respective
members may request.
Adopted
Part I, no. 89
I.5. Related Party Transactions
Principle
Due to the potential risks that they may hold, transactions with related parties should be justified by the interest of the company and carried
out under market conditions, subject to principles of transparency and adequate supervision.
Recommendations
I.5.1. The managing body should disclose in the corporate governance report or by
other means publicly available the internal procedure for verifying transactions with related
parties.
Adopted
Part I, no. 38 and 89
to 91
I.5.2. The managing body should report to the supervisory body the results of the
internal procedure for verifying transactions with related parties, including the transactions
under analysis, at least every six months.
Adopted
Not applicable
Recommendation, due
to the provisions of
Note 3 on
Interpretation of the of
the Corporate
Governance Code IPCG
2018 (revised in 2020)
CHAPTER II. SHAREHOLDERS AND GENERAL MEETINGS
Principles
II.A. As an instrument for the efficient functioning of the company and the fulfilment of the corporate purpose of the company, the
suitable involvement of the shareholders in matters of corporate governance is a positive factor for the company’s governance.
II.B. The company should stimulate the personal participation of shareholders in general meetings, which is a space for communication
by the shareholders with the company’s boards and committees, and for reflection about the company itself.
II.C. The company should implement adequate means for the participation and remote voting by shareholders in meetings.
Recommendations
II.1. The company should not set an excessively high number of shares to confer
voting rights, and it should make its choice clear in the corporate governance report every
time its choice entails a diversion from the general rule: that each share has a
corresponding vote.
Adopted
Part I, no. 12 and 13
II.2. The company should not adopt mechanisms that make decision making by its
shareholders (resolutions) more difficult, specifically, by setting a quorum higher than that
established by law.
Adopted
Part I, no. 14
II.3. The company should implement adequate means for the remote participation by
shareholders in the general meeting, which should be proportionate to its size.
Adopted
Part I, no. 12
2022 ANNUAL REPORT CORPORATE GOVERNANCE 468
Compliance
Comments
II.4. The company should also implement adequate means for the exercise of remote
voting, including by correspondence and electronic means.
Adopted
Part I, no. 12
II.5. The bylaws, which specify the limitation of the number of votes that can be held
or exercised by a sole shareholder, individually or in coordination with other shareholders,
should equally provide that, at least every 5 years, the amendment or maintenance of this
rule will be subject to a shareholder resolution — without increased quorum in comparison
to the legally established — and in that resolution, all votes cast will be counted without
observation of the imposed limits.
Adopted
Part I, no. 5, 13 and
14
II.6. The company should not adopt mechanisms that imply payments or assumption
of fees in the case of the transfer of control or the change in the composition of the
managing body, and which are likely to harm the free transferability of shares and a
shareholder assessment of the performance of the members of the managing body.
Adopted
Part I, no. 4, 83 and
84
CHAPTER III - NON - EXECUTIVE MANAGEMENT, MONITORING AND SUPERVISION
Principles
III.A. The members of governing bodies who possess non-executive management duties or monitoring and supervisory duties should, in
an effective and judicious manner, carry out monitoring duties and incentivise executive management for the full accomplishment of the
corporate purpose, and such performance should be complemented by committees for areas that are central to corporate governance.
III.B. The composition of the supervisory body and the non-executive directors should provide the company with a balanced and suitable
diversity of skills, knowledge, and professional experience.
III.C. The supervisory body should carry out a permanent oversight of the company’s managing body, also in a preventive perspective,
following the company’s activity and, in particular, the decisions of fundamental importance.
Recommendations
III.1. Without prejudice to the legal powers of the chair of the managing body, if he or
she is not independent, the independent directors should appoint a coordinator from
amongst them, namely, to: (i) act, when necessary, as an interlocutor near the chair of the
board of directors and other directors, (ii) make sure there are the necessary conditions and
means to carry out their functions; and (iii) coordinate the independent directors in the
assessment of the performance of the managing body, as established in recommendation
V.1.1.
Not adopted
Explanation of
recommendations not
adopted below
III.2. The number of non-executive members in the managing body, as well as the
number of members of the supervisory body and the number of the members of the
committee for financial matters should be suitable for the size of the company and the
complexity of the risks intrinsic to its activity, but sufficient to ensure, with efficiency, the
duties which they have been attributed. The formation of such suitability judgment should
be included in the corporate governance report.
Adopted
Part I, no. 18, 31, 50,
51 and 54
III.3. In any case, the number of non-executive directors should be higher than the
number of executive directors.
Adopted
Part I, no. 18
2022 ANNUAL REPORT CORPORATE GOVERNANCE 469
Compliance
Comments
III.4. Each company should include a number of non-executive directors that
corresponds to no less than one third, but always plural, who satisfy the legal requirements
of independence. For the purposes of this recommendation, an independent person is one
who is not associated with any specific group of interest of the company, nor under any
circumstance likely to affect his/her impartiality of analysis or decision, namely due to:
i. having carried out functions in any of the company’s bodies for more than twelve
years, either on a consecutive or non- consecutive basis;
ii. having been a prior staff member of the company or of a company which is
considered to be in a controlling or group relationship with the company in the last three
years;
iii. having, in the last three years, provided services or established a significant
business relationship with the company or a company which is considered to be in a
controlling or group relationship, either directly or as a shareholder, director, manager or
officer of the legal person;
iv. having been a beneficiary of remuneration paid by the company or by a company
which is considered to be in a controlling or group relationship other than the remuneration
resulting from the exercise of a director’s duties;
v. having lived in a non-marital partnership or having been the spouse, relative or
any first degree next of kin up to and including the third degree of collateral affinity of
company directors or of natural persons who are direct or indirect holders of qualifying
holdings, or
vi. having been a qualified holder or representative of a shareholder of qualifying
holding.
Adopted
Part I, no. 18
III.5. The provisions of paragraph (i) of recommendation III.4 does not inhibit the
qualification of a new director as independent if, between the termination of his/her
functions in any of the company’s bodies and the new appointment, a period of 3 years has
elapsed (cooling-off period).
Not applicable
Part I, no. 18
III.6. The supervisory body, in observance of the powers conferred to it by law, should
assess and give its opinion on the strategic lines and the risk policy prior to its final approval
by the management body.
Adopted
Part I, no. 38 and 50
III.7. Companies should have specialised committees, separately or cumulatively, on
matters related to corporate governance, appointments, and performance assessment. In
the event that the remuneration committee provided for in article 399 of the Commercial
Companies Code has been created and should this not be prohibited by law, this
recommendation may be fulfilled by conferring competence on such committee in the
aforementioned matters.
Adopted
Part I, no. 21, 27 and
29
CHAPTER IV – EXECUTIVE MANAGEMENT
Principles
IV.A. As way of increasing the efficiency and the quality of the managing body’s performance and the suitable flow of information in the
board, the daily management of the company should be carried out by directors with qualifications, powers and experience suitable for the
role. The executive board is responsible for the management of the company, pursuing the company’s objectives and aiming to contribute
towards the company’s sustainable development.
IV.B. In determining the number of executive directors, it should be taken into account, besides the costs and the desirable agility in the
functioning of the executive board, the size of the company, the complexity of its activity, and its geographical spread.
Recommendations
IV.1. The managing body should approve, by internal regulation or equivalent, the
rules regarding the action of the executive directors applicable to their performance of
executive functions in entities outside of the group.
Adopted
Part I, no. 22
IV.2. The managing body should ensure that the company acts consistently with its
objects and does not delegate powers, namely, in what regards: i) the definition of the
strategy and main policies of the company; ii) the organisation and coordination of the
business structure; iii) matters that should be considered strategic in virtue of the amounts
involved, the risk, or special characteristics.
Adopted
Part I, no. 21 and 22
2022 ANNUAL REPORT CORPORATE GOVERNANCE 470
Compliance
Comments
IV.3. In the annual report, the managing body explains in what terms the strategy and
the main policies defined seek to ensure the long-term success of the company and which
are the main contributions resulting therein for the community at large.
Adopted
Part I no. 21
Management Report
Sustainability Report,
notably: pg. 7-10, 27,
29, 37, 38, 42-48,
section 4.7
CHAPTER V - PERFORMANCE EVALUATION, REMUNERATION AND APPOINTMENTS
V.1. Annual performance evaluation
Principle
The company should promote the assessment of performance of the executive board and of its members individually, and also the
assessment of the overall performance of the managing body and its specialized committees.
Recommendation
V.1.1. The managing body should annually evaluate its performance as well as the
performance of its committees and executive directors, taking into account the
accomplishment of the company’s strategic plans and budget plans, the risk management,
the internal functioning and the contribution of each member of the body to these
objectives, as well as the relationship with the company’s other bodies and committees.
Adopted
Part I, no. 22, 24 and
25
V.2. Remuneration
Principles
V.2.A. The remuneration policy of the members of the managing and supervisory boards should allow the company to attract qualified
professionals at an economically justifiable cost in relation to its financial situation, induce the alignment of the member’s interests with those
of the company’s shareholders — taking into account the wealth effectively created by the company, its financial situation and the market’s —
and constitute a factor of development of a culture of professionalization, sustainability, promotion of merit and transparency within the
company.
V.2.B. Directors should receive compensation:
i) that suitably remunerates the responsibility taken, the availability and the expertise placed at the disposal of the company;
ii) that guarantees a performance aligned with the long-term interests of the shareholders and promotes the sustainable performance
of the company; and
iii) that rewards performance.
Recommendations
V.2.1. The company should create a remuneration committee, the composition of which
should ensure its independence from the management, which may be the remuneration
committee appointed under the terms of article 399 of the Commercial Companies Code.
Adopted
Part I, no. 24, 27, 66
and 67
V.2.2. The remuneration should be set by the remuneration committee or the general
meeting, on a proposal from that committee.
Adopted
Part I, no. 24, 27, 66
and 67
V.2.3. For each term of office, the remuneration committee or the general meeting, on
a proposal from that committee, should also approve the maximum amount of all
compensations payable to any member of a board or committee of the company due to the
respective termination of office. The said situation as well as the amounts should be
disclosed in the corporate governance report or in the remuneration report.
Not adopted
Explanation of
recommendations not
adopted below
V.2.4. In order to provide information or clarifications to shareholders, the chair or, in
case of his/her impediment, another member of the remuneration committee should be
present at the annual general meeting, as well as at any other, whenever the respective
agenda includes a matter linked with the remuneration of the members of the company’s
boards and committees or, if such presence has been requested by the shareholders.
Adopted
Part I, no. 76
V.2.5. Within the company’s budgetary limitations, the remuneration committee should
be able to decide, freely, on the hiring, by the company, of necessary or convenient
consulting services to carry out the committee’s duties.
Adopted
Part I, no. 66
2022 ANNUAL REPORT CORPORATE GOVERNANCE 471
Compliance
Comments
V.2.6. The remuneration committee should ensure that those services are provided
independently and that the respective providers do not provide other services to the
company, or to others in controlling or group relationship, without the express authorization
of the committee.
Adopted
Part I, no. 66
V.2.7. Taking into account the alignment of interests between the company and the
executive directors, a part of their remuneration should be of a variable nature, reflecting
the sustained performance of the company, and not stimulating the assumption of excessive
risks.
Adopted
Part I, no. 70, 71 and
75, Annex II
V.2.8. A significant part of the variable component should be partially deferred in time,
for a period of no less than three years, being necessarily connected to the confirmation of
the sustainability of the performance, in the terms defined by a company’s internal
regulation.
Not adopted
Explanation of
recommendations not
adopted below
V.2.9. When variable remuneration includes the allocation of options or other
instruments directly or indirectly dependent on the value of shares, the start of the exercise
period should be deferred in time for a period of no less than three years.
Not applicable
Part I, no. 73
and 74
V.2.10. The remuneration of non-executive directors should not include components
dependent on the performance of the company or on its value.
Adopted
Part I, no. 71
V.3. Appointments
Principle
Regardless of the manner of appointment, the profile, the knowledge, and the curriculum of the members of the company’s governing bodies,
and of the executive staff, should be suited to the functions carried out.
Recommendations
V.3.1. The company should, in terms that it considers suitable, but in a demonstrable
form, promote that proposals for the appointment of the members of the company’s
governing bodies are accompanied by a justification in regard to the suitability of the profile,
the skills and the curriculum vitae to the duties to be carried out.
Adopted
Part I, no. 16
V.3.2. The overview and support to the appointment of members of senior management
should be attributed to a nomination committee unless this is not justified by the company’s
size.
Adopted
Part I, no. 29
V.3.3. This nomination committee includes a majority of non- executive, independent
members.
Not adopted
Explanation of
recommendations not
adopted below
V.3.4. The nomination committee should make its terms of reference available, and
should foster, to the extent of its powers, transparent selection processes that include
effective mechanisms of identification of potential candidates, and that those chosen for
proposal are those who present a higher degree of merit, who are best suited to the
demands of the functions to be carried out, and who will best promote, within the
organisation, a suitable diversity, including gender diversity.
Adopted
Part I, no. 16 and 29
CHAPTER VI – INTERNAL CONTROL
Principle
Based on its mid and long-term strategies, the company should establish a system of risk management and control, and of internal audit,
which allow for the anticipation and minimization of risks inherent to the company’s activity.
Recommendations
VI.1. The managing body should debate and approve the company’s strategic plan and
risk policy, which should include the establishment of limits on risk-taking.
Adopted
Part I, no. 22, 24 and
50
2022 ANNUAL REPORT CORPORATE GOVERNANCE 472
Compliance
Comments
VI.2. The supervisory board should be internally organised, implementing mechanisms
and procedures of periodic control that seek to guarantee that risks which are effectively
incurred by the company are consistent with the company’s objectives, as set by the
managing body.
Adopted
Part I, no. 38, 50 and
54
VI.3. The internal control systems, comprising the functions of risk management,
compliance, and internal audit should be structured in terms adequate to the size of the
company and the complexity of the inherent risks of the company’s activity. The supervisory
body should evaluate them and, within its competence to supervise the effectiveness of this
system, propose adjustments where they are deemed to be necessary.
Adopted
Part I, no. 50, 51, 52,
54 and 55
VI.4. The supervisory body should provide its view on the work plans and resources
allocated to the services of the internal control system, including the risk management,
compliance and internal audit functions, and may propose the adjustments deemed to be
necessary.
Adopted
Part I, no. 38 and 50
VI.5. The supervisory body should be the recipient of the reports prepared by the
internal control services, including the risk management functions, compliance and internal
audit, at least regarding matters related to the approval of accounts, the identification and
resolution of conflicts of interest, and the detection of potential irregularities.
Adopted
Part I, no. 45 and 50
VI.6. Based on its risk policy, the company should establish a risk management
function, identifying (i) the main risks it is subject to in carrying out its activity; (ii) the
probability of occurrence of those risks and their respective impact; (iii) the devices and
measures to adopt towards their mitigation; and (iv) the monitoring procedures, aiming at
their accompaniment.
Adopted
Part I, no. 38 and 49
to 55
VI.7. The company should establish procedures for the supervision, periodic
evaluation, and adjustment of the internal control system, including an annual evaluation of
the level of internal compliance and the performance of that system, as well as the
perspectives for amendments of the risk structure previously defined.
Adopted
Part I, no. 38 and 49
to 55
CHAPTER VII FINANCIAL INFORMATION
VII.1. Financial information
Principles
VII.A. The supervisory body should, with independence and in a diligent manner, ensure that the managing body complies with its duties
when choosing appropriate accounting policies and standards for the company, and when establishing suitable systems of financial reporting,
risk management, internal control, and internal audit.
VII.B. The supervisory body should promote an adequate coordination between the internal audit and the statutory audit of accounts.
Recommendation
VII.1.1. The supervisory body’s internal regulation should impose the obligation to
supervise the suitability of the preparation process and the disclosure of financial
information by the managing body, including suitable accounting policies, estimates,
judgments, relevant disclosure and its consistent application between financial years, in a
duly documented and communicated form.
Adopted
Part I, no. 38
VII.2. Statutory Audit of Accounts and Supervision
Principle
The supervisory body should establish and monitor clear and transparent formal procedures on the relationship of the company with the
statutory auditor and on the supervision of compliance, by the auditor, with rules regarding independence imposed by law and professional
regulations.
Recommendations
VII.2.1. By internal regulations, the supervisory body should define, according to the
applicable legal regime, the monitoring procedures aimed at ensuring the independence of
the statutory audit.
Adopted
Part I, no. 37, 38 and
46
2022 ANNUAL REPORT CORPORATE GOVERNANCE 473
Compliance
Comments
VII.2.2. The supervisory body should be the main interlocutor of the statutory auditor in
the company and the first recipient of the respective reports, having the powers, namely, to
propose the respective remuneration and to ensure that adequate conditions for the
provision of services are ensured within the company.
Adopted
Part I no. 38 and 45
VII.2.3. The supervisory body should annually assess the services provided by the
statutory auditor, their independence and their suitability in carrying out their functions, and
propose their dismissal or the termination of their service contract by the competent body
when this is justified for due cause.
Adopted
Part I, no. 38 and 45
Explanation of non adoption of adopted recommendations
III.1. Without prejudice to the legal powers of the chair of the managing
body, if he or she is not independent, the independent directors should appoint
a coordinator from amongst them, namely, to: (i) act, when necessary, as an
interlocutor near the chair of the board of directors and other directors, (ii)
make sure there are the necessary conditions and means to carry out their
functions; and (iii) coordinate the independent directors in the assessment of
the performance of the managing body, as established in recommendation
V.1.1.
In view of the specific characteristics of the Company, in particular its family owned nature and
the concentration of its capital structure, and the total number of non-executive directors and,
among these, of independent directors, as well as the characteristics and current position of the
Chairman of the Board of Directors, the Company considers that the appointment of a
coordinator would be inappropriate and would merely seek formal compliance with this
recommendation, with which the Company does not agree.
In fact, and as already mentioned in this report, several rules and procedures are in place in
the company that allow a close and regular articulation between the various members of the
Board of Directors, namely between the Chairman and the other Directors, and the existence of
the conditions and means required for the performance of their functions in an independent,
informed and efficient manner, ensuring the supervisory and oversight function of the
executive management.
In this regard, we highlight the various mechanisms provided for in the Regulations of the
Board of Directors and the company's various internal committees, under the terms of which:
a) The members of the Board of Directors, including non-executive members, may have
access to all the company's information and collaborators for the evaluation of the
company's performance, situation and development prospects, including, namely, the
minutes, the documentation supporting the resolutions taken, the notices of meetings
and the archive of the meetings of the other corporate bodies, without prejudice to
access to any other documents or persons from whom clarifications may be requested;
b) The Chairman of the Board of Directors must inform the company's directors, at the
start of every meeting of the Board of Directors, of the most relevant resolutions and
acts carried out by the Executive Committee since the previous meeting, which are not
yet known to the other directors;
2022 ANNUAL REPORT CORPORATE GOVERNANCE 474
c) Minutes of all Executive Committee meetings shall be drawn up which shall be kept by
the Company Secretary and made available to any member of the Board of Directors
who requests them;
d) The Chairman of the Executive Committee shall, to the extent possible, promote the
involvement of the non-executive directors in specific projects and acts, in order to
allow a closer monitoring and proximity of the non-executive directors to the
company's activity, in accordance with the matters in question and the specific
qualifications and preferences of each one;
e) All executive directors shall be available to provide clarifications and information which
may be requested by non-executive directors;
f) The Chairman of the company's Internal Committees must inform the Board of
Directors of the committee's resolutions which, given their relevance, should be
brought to the Board's attention. In the case of the Executive Committee, this duty
falls to the Chairman of the Executive Committee;
g) All members of the company's Internal Committees must be available to provide any
clarifications and information that may be requested by other directors;
h) h) The supporting documents relating to the various points on the agenda of the
meetings of the Board of Directors and of the company's Internal Committees must be
distributed to all members in time to allow for their timely analysis, preferably together
with the notice of the meeting.
In addition, at least one non-executive director sits on the Corporate Governance Committee
and on the Appointments and Assessment Committee - the Chairman of the Board of Directors
is also Chairman of the Appointments and Assessment Committee - thus reinforcing the
coordination and performance of the work of the members with non-executive functions.
Therefore, this recommendation has not been formally adopted by the Company, although all
the objectives resulting from it have been achieved.
V.2.3. For each term of office, the remuneration committee or the general
meeting, on a proposal from that committee, should also approve the
maximum amount of all compensations payable to any member of a board or
committee of the company due to the respective termination of office. The said
situation as well as the amounts should be disclosed in the corporate
governance report or in the remuneration report.
This recommendation is not complied with since the Remuneration Committee, although it is a
matter within its power, did not define the maximum amount of all compensation to be paid to
the member of any body or committee of the Company due to the respective termination of
duties.
In fact, the Remuneration Committee has never, until today, felt the need to create a self-
limitation in relation to the aforementioned maximum amount regardless of the form of
termination of duties that is at stake. The specific circumstance to which this limitation refers
does not take place frequently and, when it happens, the sensitivity and specificity is always so
2022 ANNUAL REPORT CORPORATE GOVERNANCE 475
great that it cannot fail to impose a case-by-case assessment, even if integrated into the
general remuneration regime and with historical weighting.
In addition, Navigator believes that, given the existing regulation in the Portuguese regime, the
prior setting of a maximum amount may even work in the opposite way to that intended by the
scope of this recommendation, constituting an incentive for the premature termination of
management functions.
It should be noted, however, that where the dismissal of directors does not result from a
serious violation of the duties of the director or from inability to carry out the normal duties,
the company will be obliged to pay compensation under the general terms of law, that may not
exceed the amount of remuneration that it would presumably receive until the end of the
period for which it was elected.
It should also be noted that during the 2022 fiscal year no resignations were submitted by
members of the company's bodies or committees.
V.2.8. A significant part of the variable component should be partially
deferred in time, for a period of no less than three years, being necessarily
connected to the confirmation of the sustainability of the performance, in the
terms defined by a company’s internal regulation.
The explanation for the non-adoption of this recommendation is set out in the statement on the
remuneration policy in force, which corresponds to Annex II to this Report, and reads as
follows:
“Several writings sustain profusely the deferral of the payment of the variable part of
remuneration to a later time, which will enable the establishment of a direct relation between
remuneration and the impact of management on the Company over a longer period.
We accept this principle as theoretically sound, but the historical element, associated to the
stability and the practice that has been followed successfully for years without the element of
deferral, leads us to not adopt that option for the time being.”
The Company has not therefore accepted this recommendation, without prejudice to ensuring
the substance which justifies it to an even greater extent than would result from compliance
with it.
It should also be noted that Navigator's consolidated results for the financial year have
repeatedly and consistently been very positive, demonstrating the sustainability of performance
which the Recommendation seeks to safeguard. It follows from this background that the
possible partial deferral for a period of no less than three years of the variable component of
remuneration would have no impact on the right to the variable component for Navigator's
directors.
However, it should be clarified that Navigator is currently analyzing the model for deferring
payment of part of the variable remuneration with a view to its possible implementation.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 476
V.3.3. This nomination committee includes a majority of non- executive,
independent members.
The Company's Nominations and Evaluation Committee is entirely composed of non-executive
directors, but only one is independent - Mariana Rita Antunes Marques dos Santos. In choosing
the members of this Committee, preference was given to a diversity of profiles (age, gender,
qualifications, experience and professional career), ensuring that all of them have full
impartiality of analysis and decision, and demonstrated integrity of character.
The Company believes that this diversity of profiles, together with the fact that the Nominations
and Evaluation Committee uses, whenever necessary, market studies and the analysis of
comparable situations within the Group, is sufficient to guarantee that its analyses are in line
with the best practices and strengthen independent and impartial decision-making.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 477
Part III – Other Information
There are no other elements or additional information that are relevant to the understanding of
the governance model and practices adopted.
ANNEX 1
1) DISCLOSURES REFERRED TO IN ARTICLES 447 OF THE COMPANIES’ CODE
(WITH REFERENCE TO 2022)
Securities issued by Company and held by company officers:
António José Pereira Redondo: 6,000 shares
Adriano Augusto da Silva Silveira: 2,000 shares
2) INFORMATION ON OWN SHARES (required by Articles 66 and 324 no. 2 of
the Companies Code)
On 31 December 2022, Navigator did not hold any own shares.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 478
ANNEX 2
REMUNERATION POLICY FOR MEMBERS
OF THE CORPORATE BODIES OF
THE NAVIGATOR COMPANY (2021-2024)
I. Introduction
The Remuneration Committee of Navigator has been drawing up the remuneration policy statement since 2008, originally
in the context of a recommendation from the Securities Market Commission (Comissão de Mercado de Valores Mobiliários
– CMVM), from 2009 according to Law no. 28/2009, of 19 June, and more recently in line with the recommendations of the
2018 Corporate Governance Code of the Portuguese Corporate Governance Institute.
With the entry into force of Law no. 50/2020, of 25 August, and the consequent repeal of Law no. 28/2009, of 19 June, the
Navigator Remuneration Committee must prepare a Remuneration Policy for the members of its management and
supervisory bodies in accordance with the new legal regime.
It should be noted that, with the 2020 revision to the Corporate Governance Code of the Portuguese Institute of Corporate
Governance, and in view of the necessary harmonization with Law no. 50/2020, of 25 August, the content of the policy
remuneration is no longer based on a recommendation.
This Remuneration Policy thus reflects the work carried out by the Remuneration Committee, based on the previous
statement on the remuneration policy and taking into account the aforementioned new framework.
Considering Navigator's trajectory, this Committee continued to choose to reconcile, on the one hand, new trends in terms
of management remuneration options, and on the other, the weight of history, previous options and the own features of
this company.
The elaboration of the remuneration policy is the exclusive responsibility of the Remuneration Committee, composed of
three members, all of whom are independent from the management, and must approved by the General Meeting, at least
every four years and at every material change to it.
In its performance, namely in determining, reviewing and applying the Policy, the Remuneration Committee observes the
applicable legislation and the policies and regulations in force at Navigator, namely, the regulation on Conflicts of Interest
and Related Parties Transactions, which sets out operating rules with a view to preventing, identifying and resolving conflicts
of interest between society and its managers.
II. Legal and statutory regime
This policy is issued within the legal framework of the above mentioned Law 50/2020, of 25 August, which amended the
Securities Code.
As for that legal diploma, in addition to what it determines as to the frequency of the policy, its approval and the disclosure
of its content, it determines, in number 2 of article 26-C of the Securities Code, in respect of its content, that the Policy
have in consideration:
a) An explanation of how it contributes to the company’s business strategy, its long-term interests and
sustainability;
2022 ANNUAL REPORT CORPORATE GOVERNANCE 479
b) An explanation of how the employment and pay conditions of employees of the company were taken into
account when establishing the remuneration policy;
c) A description of the different components of fixed and variable remuneration,
d) A explanation of all bonuses and other benefits, in whatever form, which can be awarded to members of the
management and supervisory bodies, and indicate their relative proportion;
e) An indication of the duration of the contracts or arrangements with members of the management and
supervisory bodies, the applicable notice periods, termination clauses and payments linked to their termination;
f) Indication of the main characteristics of supplementary pension or early retirement schemes.
In addition, paragraph 3 of article 26-C of the Securities Code stipulates that, in case the provision of variable remuneration
to directors is foreseen, the remuneration policy must identify:
a) The criteria applied to the attribution of variable remuneration, including financial and non-financial criteria
and, if applicable, the criteria related to corporate social responsibility, in a clear and comprehensive manner,
and explain how these criteria contribute to the company's corporate strategy, to its long-term interests and
to its sustainability;
b) The methods to be applied to determine to which extent the performance criteria have been met;
c) The deferral periods and the possibility for the company to request the refund of the variable remuneration
already delivered.
On the other hand, number 4 of article 26-C of the Securities Code establishes that, in case the provision of a share-based
remuneration component is foreseen, the remuneration policy must identify:
a) The periods for acquiring rights;
b) If applicable, the period for keeping shares after acquiring said rights;
c) The way in which share-based remuneration contributes to the company's corporate strategy, its long-term
interests and its sustainability.
In addition to the aforementioned Law no. 50/2020, of 25 August, any definition of remuneration cannot fail to take into
account both the general legal regime and the specific regime adopted in the company's articles of association, when
applicable.
The legal regime for the Board of Directors is essentially established in article 399 of the Commercial Companies Code, and
it essentially establishes the following:
The setting of remunerations is the responsibility of the general meeting of shareholders or of a commission
appointed by it.
That definition of the remuneration must take into account the functions performed and the economic situation
of the company.
The remuneration may be fixed or consist partially of a percentage of the profits of the financial year, but the
maximum percentage intended for the directors must be authorized by a clause of the articles of association
and not cover distributions of reserves or any part of the profit of the year that could not, by law, be distributed
to shareholders.
For the Audit Board and for the members of the Board of the General Meeting, the law determines that the remuneration
must consist of a fixed amount, and that it be determined in the same way by the general meeting of shareholders or by a
committee appointed by the same, taking into account functions performed and the economic situation of the company.
As for the articles of association, in the case of Navigator, there is a specific article only for the Board of Directors, twenty-
one, which simultaneously governs the retirement scheme, and has, in the part that matters here, the following content:
“Article 21 – 1 - The remunerations of the directors, which may be different, shall be established by a
remunerations committee elected by the General Meeting for such purpose, for periods of four years.”
This is the formal framework within which the remuneration policy must be defined.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 480
III. General Principles
The general principles to be observed when setting the remuneration of the Company officers are essentially those which
in very general terms derive from the law: on the one hand, the duties performed and on the other the state of the
Company’s affairs. If we add to these the general market terms for similar situations, we find that these appear to be the
three main general principles:
a) Duties performed.
The functions performed by each Company officer include functions in the formal sense, but also the functions in the broader
sense of the specific level of responsibility of the function carried out, taking into account criteria as varied as, for example,
commitment and dedicated time, the nature, dimension, complexity and required skills for the function or the added value
to the Company resulting from a given type of intervention or an institutional representation.
The fact that time is spent by the officer on duties in other controlled companies also cannot be taken out of the equation,
due to the added responsibility this represents and in terms of the existence of another source of income.
b) The state of the Company’s affairs.
The size of the Company and the inevitable complexity of the associated management responsibilities, are clearly relevant
aspects of the state of affairs, understood in the broadest sense. And these aspects have implications in the need to
remunerate a responsibility which is greater in larger companies with complex business models and for the capacity to
remunerate management duties appropriately.
c) Market Criteria.
It is unavoidably necessary to match supply to demand when setting any level of pay, and the officers of a corporation are
no exception.
It is essential to have the ability to attract, develop and retain competent professionals, which requires that the
Remuneration Policy be competitive and attractive in order to ensure the legitimate individual interests, but essentially
those of the Company, and the generation of sustainable value to shareholders.
In the case of this Company, in view of its characteristics and size, the market criteria and practices to be considered are
those prevailing internationally, as well as those to be observed in Portugal.
IV. Compliance of principles with the legal regime
Having stated the adopted general principles, it is now necessary to frame the principles in the applicable legal regime.
1. Paragraph a) of number 2 of article 26-C of the Securities Code. Strategy, long-term interests and sustainability.
Practice has shown that the remuneration system in force at Navigator is successful in ensuring its corporate strategy
and, in the long term, in aligning the interests of the members of the management body with the interests of the
company and its sustainability, especially for the reasons set out below.
Firstly, for it is a remuneration that is sought to be fair and balanced within the principles set out, and secondly, by
associating the members of the management body to the results through a variable component of the remuneration,
which has the results as its main factor, but also takes into account the behaviour skills of each director, such as their
alignment with the long-term interests of the company.
2. Paragraph b) of number 2 of article 26-C of the Securities Code. Employment and pay conditions of employees.
The alignment between this Policy and the pay and employment conditions of Navigator employees is ensured given
that both remuneration systems are based on the same General Principles set out in this Remuneration Policy, in
particular market conditions in the reference markets for the functions performed.
3. Paragraph c) of number 2 of article 26-C of the Securities Code. Fixed and variable components of the remuneration.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 481
The remuneration of the members of the Board of Directors consists of a fixed component, corresponding to an annual
amount, payable throughout the year, and, for Executive Directors, it also incorporates a variable component that may
correspond to a percentage not exceeding five per percent of the previous year's net result.
The remuneration of the members of the Audit Board corresponds to a fixed annual amount, payable throughout the
year.
Finally, the remuneration of the members of the Board of the General Meeting consists only of a fixed amount,
determined in accordance with the meetings that are actually held.
It should be noted that the specific values of the remunerations are fixed in compliance with the principles defined
above in chapter III of this Policy.
4. Paragraph d) of number 2 of article 26-C of the Securities Code. Bonuses and other benefits.
In addition to the variable component that may be attributed to the members of the management bodies, no other non-
cash benefits are attributed to the members of the management and supervisory bodies, without prejudice to the means
made available to them for the exercise of their functions. and health and personal accident insurance in line with
market practices.
5. Paragraph e) of number 2 of article 26-C of the Securities Code. Arrangements relating to the termination of Directors’
functions
There are not and have never been fixed by this Committee any arrangements relating to the dismissal or termination
of Directors’ functions. This fact is the natural result of the particular situations existing in the company, and not a
position of principle taken by this Committee against the existence of agreements of this nature. Therefore, only the
supplementary legal regime defined in the Companies’ Code applies, which governs the payment of any amounts to
directors in case of termination of their mandates before expiry of the term in office.
6. Paragraph f) of number 2 of article 26-C of the Securities Code. Supplementary pension or early retirement schemes.
At Navigator there are presently no Supplementary pension or early retirement schemes for Directors.
7. Paragraph a) of number 3 of article 26-C of the Securities Code. Criteria for the variable component.
The definition, by this Committee, of a variable component of remuneration is based on a target amount applied to each
Director which is due in accordance with the individual's performance and performance of the Company, that meet the
expectations and the criteria defined previously. The target amount is weighed by the aforementioned principles -
market, specific functions, state of the Company -, in particular comparable market circumstances in positions
equivalent in function. Another important factor that is taken into account when setting the targets is Navigator’s option
not to provide any share or share acquisition option plans.
Actual performance compared to the expectations and goals, which determine variations vis-à-vis the target, is weighed
against a set of quantitative and qualitative KPIs of the Company's performance (general business indicators) and of
the relevant board member (specific targets and behaviour indicators). Within the general business indicators, EBITDA,
net results, cash flow and Total Shareholder Return vs Peers are particularly relevant, and in the behavioral skills, the
alignment of each director with the long-term interests of the company is highlighted.
In addition to those criteria, in accordance with commitments undertaken by the Company within its sustainability
strategy and recognizing the importance of an efficient use of energy, and the need to reduce fossil CO2 emissions from
its economic activities, the implementation of a corporate program for energy efficiency, approved in 2016, is also
included in the weighing.
In addition to the limit on management's profit sharing for the year, the Company also has mechanisms for limiting
variable remuneration.
On the one hand, the variable component is eliminated if the results show a deterioration considered relevant to the
company's performance in the last year or when it is expectable in the year in course. And, on the other hand, the
amount of the attributable variable component has a cap defined in order to prevent that the positive performance at a
2022 ANNUAL REPORT CORPORATE GOVERNANCE 482
time, with immediate remuneration advantages for the management, be made at the sacrifice of a good future
performance.
In view of the above, it is clear that the criteria for the attribution of remuneration contribute to the implementation of
the strategy defined by Navigator, as well as to the long-term interests and the sustainability of the Company.
8. Paragraph b) of number 3 of article 26-C of the Securities Code. Compliance with performance criteria.
The performance criteria referred to in the previous paragraph are applied mathematically in their quantitative part,
and through valuation assessments with regard to the qualitative part.
Within the process of determining the variable remuneration, the Remuneration Committee prepares this Policy, and
the performance assessment of each executive director follows an internal structured process under the responsibility
/ leadership of the respective person in charge (i.e., under the responsibility of the person who chairs the team, in the
case of the members of the Executive Committee, and under the responsibility of the Chairman of the Board of Directors,
in the case of the Chairman of the Executive Committee) and in which also participate the non-executive directors that
the responsible person deems relevant to involve.
This process also involves the Appointments and Appraisals Committee, which is responsible for monitoring the
management's performance appraisal and remuneration attribution system and giving its opinion on the individual
performance appraisal proposals of the executive management.
Finally, the Remuneration Committee is responsible for confirming, with regard to performance assessment, the
respective factors of achievement and ensuring the overall consistency of the process, setting the variable remuneration.
9. Paragraph c) of number 3 of article 26-C of the Securities Code. Deferral and repayment of remuneration.
Several writings sustain profusely the deferral of the payment of the variable part of remuneration to a later time, which
will enable the establishment of a direct relation between remuneration and the impact of management on the Company
over a longer period.
We accept this principle as theoretically sound, but the historical element, associated to the stability and the practice
that has been followed successfully for years without the element of deferral, leads us to not adopt that option for the
time being.
As for the obligation to refund variable remuneration already delivered, and without prejudice to the applicable legal
regime, no mechanism is in place to allow the company to request the same from the respective members of the
management.
10. Number 4 of article 26-C of the Securities Code. Stock plans.
At Navigator, remuneration does not include a stock component.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 483
V. Specific options
The specific options for the proposed remuneration policy can therefore be summarized as follows:
1 In setting all remunerations, the general principles set out above will be observed: functions performed, the state of
the company and market criteria.
2 Executive Directors
The remuneration of the executive directors will consist of a fixed component and a variable component;
The fixed component of the remuneration will consist of an annual amount, payable throughout the year;
The variable component of remuneration is associated with both the performance of Navigator and the individual
performance of each director;
The process of attributing variable remuneration to executive directors, which is monitored by the Appointments
and Appraisals Committee, must follow the criteria defined by the Remuneration Committee, and must not exceed
the overall value of five percent of the result consolidated net in IFRS format.
3 Non-Executive Directors
The remuneration of non-executive directors will only consist of a fixed component, which may be differentiated due
to the accumulation of functions and increased responsibilities, for example members of specialized committees or
committees;
The fixed component of remuneration will consist of an annual amount, payable throughout the year, or a
predetermined amount for each participation in the Board of Directors' meeting.
4 Audit Board
The remuneration of the members of the Audit Board will consist only of a fixed component, which will consist of a
fixed annual amount, payable throughout the year.
5 Board of the General Meeting
A remuneração dos membros da Mesa da Assembleia Geral será composta apenas por uma componente fixa, que
consistirá num valor predeterminado por cada reunião, sendo inferior o valor para as segunda e seguintes reuniões
que tenham lugar durante o mesmo ano.
The remuneration of the members of the Board of the General Meeting will consist only of a fixed component, which
will consist of a predetermined amount for each meeting, where the amount for the second and subsequent meetings
that take place during the same year is lower that the amount for the first meeting.
Lisbon, 6 April 2021
The Remuneration Committee
José Gonçalo Ferreira Maury
João Rodrigo Appleton Moreira Rato
João do Passo Vicente Ribeiro
2022 ANNUAL REPORT CORPORATE GOVERNANCE 484
ANNEX 3
CODE OF ETHICS AND CONDUCT
I. General Objectives and Values
1. The Code of Ethics and Conduct
as the basis of the culture of
The Navigator Group
The pursuit of the aims set out in this Code of Ethics
and Conduct, respect for its values and compliance
with its rules of conduct together form the professional
ethos of The Navigator Group business universe.
The Code of Ethics and Conduct is to be viewed as
setting standards of conduct interpreted as a
benchmark for behaviour, which The Navigator Group
and all its Collaborators should follow and respect.
2. Fundamental Mission and Objectives
The Navigator Group aspires to extend the leadership
earned in the printing and writing paper business to
other businesses, thereby asserting Portugal in the
world, as a global company, renown for developing, in
an innovative and sustainable manner, the forest and
providing products and services which contribute to the
prosperity of individuals.
The fundamental aims pursued by The Navigator Group
are based on the sustained creation of value and the
protection of shareholders’ interests, with an
appropriate level of investor return, by offering the
highest standards of quality in the supply of goods and
services to customers, and through the recruitment,
motivation and development of the most able and
highly skilled professionals. The Navigator Group will
always promote a meritocratic culture which allows the
personal and professional development of its
Collaborators and, through their commitment, position
the Group at the forefront of the markets in which it
operates, maintaining a policy on the sustainable
management of natural resources, mitigation of
environmental impacts and fostering social
development in the areas in which it carries on its
business operations.
Due to their being core principles and of a general
nature, the matters governed in the Code of Ethics and
Conduct may be detailed in internal guidelines, policies
and procedures, or in specific codes of conduct.
3. Values
The principles and rules of conduct set out in the Code
of Ethics and Conduct result from the establishment of
values deemed to be fundamental to The Navigator
Group, and which should be permanently pursued
within its corporate activity, in particular:
(a) Trust – We believe in people, we welcome
everyone’s contribution, we respect their identity,
promoting development, cooperation and
communication;
(b) Integrity – We are guided by principles of
transparency, ethics and respect in our dealings
amongst ourselves and with others;
(c) Entrepreneurship – We are passionate about
what we do, we like to get out of our comfort zone,
we have the courage to take decisions and to
accept risks in a responsible way;
(d) Innovation – We seek to bring out everyone’s
skills and creative potential to do the impossible;
(e) Sustainability – Corporate, social and
environmental sustainability is our business model;
(f) Excellence –In our work we focus on quality,
efficiency, safety and getting it right.
II. Scope of Application and Interpretation
4. Scope of Application
The Code of Ethics and Conduct applies to all
Collaborators of all entities in The Navigator Group.
The rules set out herein should govern the ethical and
professional conduct of all those working in The
Navigator Group, in the pursuance of its corporate
activity and in their relationships with third parties, and
are an essential tool of the corporate policy and culture
followed and fostered by The Navigator Group.
5. Interpretation
For the purposes of this Code of Ethics and Conduct,
the following defined terms shall have the following
meanings:
(a) Collaborators – all persons who work in or provide
services, in a permanent or merely casual form, to
companies in The Navigator Group, including,
notably, members of corporate bodies, employees,
service providers, representatives and auditors or
consultants;
(b) Clients – natural or legal entities to which
companies in The Navigator Group supply their
products or provide their services;
(c) Suppliers – natural or legal entities which supply
products or provide services to The Navigator Group
companies;
(d) Stakeholders – natural or legal entities with which
The Navigator Group companies deal in their
business, institutional or social activities, including
shareholders, members of corporate bodies,
Collaborators, Clients, Suppliers, business partners
2022 ANNUAL REPORT CORPORATE GOVERNANCE 485
or members of the communities with whom The
Navigator Group interacts.
III. Rules of Conduct
6. Compliance with Legislation and Regulation
The activity of The Navigator Group and its
Collaborators shall be based on strict compliance with
legal, statutory and regulatory regulations, applicable
to the activity and companies of The Navigator Group,
in the jurisdictions of the countries where they operate.
7. Public Authorities
The activity of The Navigator Group and its
Collaborators shall be based on a permanent
collaboration with public authorities, notably with
regulatory bodies, complying with requests legitimately
made to them and which are at their reach and
adopting the behaviour which permits these authorities
to exercise their powers.
8. Integrity
The practice of corruption and bribery is forbidden, in
all active or passive forms, through act or omission, by
creating or maintaining situations of favouritism or
other irregularities, or adopting behaviours which may
create, in their counterparts, expectations of
favouritism in their relations with The Navigator Group.
9. Transparency
The Navigator Group is committed to reporting is
performance in a transparent way, taking into
consideration applicable legal duties and good practices
of the capital and financial markets.
10. Confidentiality
10.1. Collaborators must keep the confidentiality of all
information concerning The Navigator Group, other
Collaborators, Clients, Suppliers or Stakeholders, of
which they have knowledge by virtue of carrying out
their functions and which are not publicly known or
notorious. Such information is restricted and only for
internal use in The Navigator Group.
10.2. Collaborators must maintain confidential the
information mentioned in the previous paragraph, even
after termination of their functions in The Navigator
Group and regardless of the cause of such termination.
10.3. Confidential information may only be disclosed to
third parties in accordance with legal requirements or
provided disclosure thereof is previously authorized, in
writing, by the Board of Directors.
11. Securities trading
Any Collaborators who are in possession of information
relating to The Navigator Company, of a precise
nature, which has not been made public, and which, if
it were made public, would be likely to have a
significant effect on the prices of The Navigator
Company shares and other related financial
instruments, may not, in the period prior to disclosure
of such information, trade securities issued by The
Navigator Company, its strategic partners or
companies involved in transactions or dealings with The
Navigator Company, not disclose same information to
third parties.
In particular, estimates of results, decisions on
significant acquisitions, sales or partnerships and
winning or losing of important contracts constitute
forms of inside information.
12. Conflicts of Interest
12.1. The Navigator Group undertakes to adopt measures
which ensure impartiality of decision making processes,
in cases of a potential conflict of interests involving The
Navigator Group or its Collaborators.
12.2. Collaborators may not pursue private objectives in
competition with The Navigator Group and obtain
benefits, advantages or personal favours by virtue of
the position held or the functions performed.
12.3. Collaborators must promptly inform their immediate
superior of any situation which might create a conflict
of interests, notably if, as part of their functions, they
are called on to intervene in procedures or decisions
which involve, directly or indirectly, organisations,
entities or persons with whom they collaborate or have
collaborated, or with whom they have a relation, by
virtue of family ties, proximity or influence. In addition,
they may also make such communication in any other
cases where their impartiality may be questioned.
13. Relations with Shareholders
13.1. The primary objectives of The Navigator Group are
the protection of shareholders and investors and a
quest to create value for Shareholders.
13.2. The Navigator Company undertakes to respect the
principle of equal treatment of Shareholders, taking
into consideration the proportion of their holdings in
the share capital of The Navigator Company, notably
ensuring the timely provision of information, in
accordance with the applicable legal duties.
14. Competition
The competition practices of The Navigator Group shall
comply strictly with applicable competition laws, in
accordance with market rules and criteria, and with a
view to promoting fair competition.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 486
15. Intellectual and Industrial Property
The Navigator Group and its Collaborators must respect
Intellectual and Industrial Property of Suppliers, Clients
and Stakeholders.
16. Relations with Clients, Suppliers, Services
Providers and Third Parties
16.1. The Navigator Group shall ensure that the conditions
of sale of products to its Clients are clearly defined, and
all companies in The Navigator Group and its
Collaborators must ensure compliance with such
conditions.
16.2. Suppliers and providers of services to The Navigator
Group shall be selected on the basis of objective
criteria, taking into consideration the terms proposed,
guarantees effectively provided and the overall
optimization of advantages for The Navigator Group.
16.3. Suppliers and services providers of The Navigator
Group must comply with the provisions of The Code of
Ethics and Conduct for Suppliers and services providers
of The Navigator Group.
16.4. The Navigator Group and its Collaborators shall
always negotiate in compliance with the principle of
good faith and applicable legal obligations and good
practices.
17. Relations with Political Parties and Movements
Dealings between The Navigator Group and its
Collaborators with political parties or movements shall
be conducted in compliance with applicable legal rules,
and in the course of such dealings Collaborators may
not invoke their relation with The Navigator Group.
18. Social Responsibility and Sustainable
Development
18.1. The Navigator Group accepts its social responsibility
to the communities in which it carries on its business
activities, as a means of contributing to their
advancement and well-being.
18.2. The Navigator Group undertakes to adopt, comply
with and promote a Policy on sustainability and
environment protection.
19. Safety and Working Conditions
19.1. The Navigator Group will never employ child or
forced labor, nor will it ever collude with such practices,
and it shall adopt the measures deemed appropriate to
combat such situations, notably by public denunciation,
whenever they come to its attention.
19.2. The health and safety of its Collaborators is a priority
for The Navigator Group, and accordingly all
Collaborators shall seek to know and comply with the
legislation in force and with internal rules and
recommendations on such matters.
19.3. Collaborators must give immediate notice of any
accident or hazard to hygiene, safety and health in the
workplace, in accordance with the above mentioned
rules, and the necessary or advisable preventative
measures shall be adopted.
20. Professional development
and progression
20.1. The Navigator Group provides appropriate training
activities to its Collaborators and fosters their
continued training, as a driver of their motivation and
improved performance, recognizing the added value of
their professional and personal development.
20.2. The Navigator Group values and holds responsible
Collaborators in the performance of their functions,
taking into consideration their individual merit, allowing
them to assume the level of independence and
responsibilities associated with their skills and
commitment.
20.3. The Navigator Group policies on selection, hiring,
remuneration and professional progression are based
on merit criteria and reference market practices.
20.4. The Navigator Group shall ensure equality of
opportunities and respect for gender equality in
recruitment, hiring and professional development,
attaching value only to professional aspects. To that
effect, all Collaborators shall adopt the measures
deemed appropriate to combat and prevent any form of
discrimination or differentiated treatment on the basis
of, notably, ethnic or social origin, religious beliefs,
nationality, gender, marital status, sexual orientation
or physical disability.
21. Respect
In their relations with other Collaborators and
Suppliers, counterparts, Clients and Stakeholders, all
Collaborators shall proactively act in a correct,
respectful, loyal and civil manner.
22. Non-discrimination and harassment
22.1. Collaborators may not act in a discriminatory manner
in relation to other Collaborators or other persons,
notably based on race, religion, gender, sexual
orientation, origin, age, language, territory of origin,
political or ideological convictions, economic situation,
social and economic situation or type of contract, and
must foster respect for human dignity as one of the
basic principles of the culture and policy of The
Navigator Group.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 487
22.2. Any practice which may correspond to a form of
harassment, notably through personal offence,
mobbing, moral or sexual harassment or bullying is
strictly forbidden.
23. Use of Assets
23.1. Collaborators shall make sensible and reasonable use
of the working resources at their disposal, avoiding
waste and undue use.
23.2. Collaborators shall care for the property of The
Navigator Group, and not behave wilfully or negligently
in any manner which might undermine its state of
repair.
24. Personal Data Protection
24.1. The Navigator Group understands the key role of
privacy and protection of personal data of its Clients,
Stakeholders, Suppliers, Collaborators or any other
natural persons or collaborators of any other entities.
Accordingly, The Navigator Group and its Collaborators
undertake to use such information in a responsible
manner, in strict compliance with laws and regulations
governing the protection of personal data.
24.2 Collaborators must not collect personal data, create
lists of personal data or process or transfer personal
data without prior consultation and authorisation from
the division which is responsible for data protection.
25. External Communication – Media and Advertising
Information provided by The Navigator Group and its
Collaborators to the media, including for advertising
purposes, shall:
(a) Be released exclusively by management and
divisions authorised for that purpose and to act as
representative or spokesman of The Navigator
Group;
(b) To comply with the principles of legality, accuracy,
opportunity, objectivity, truthfulness and clarity;
(c) Protect the secrecy and confidentiality of the
information, in order to protect the interests of The
Navigator Group;
(d) Respect cultural and ethical parameters of the
community and human dignity;
(e) Contribute to an image of consistency, creation of
value and dignity of The Navigator Group,
promoting its good name in society.
26. Communicating in social networks
and media
Collaborators are fully aware that the new forms of
communication, which are continually evolving, may
have a strong impact on The Navigator Group and its
Collaborators and that the dissemination and
distribution of information through those channels may
easily represent loss of control over those contents.
Accordingly, Collaborators undertake as their
commitment that, when using social networks and
means of communication (both traditional and recent),
they:
(a) Shall act in an ethically responsible way,
contributing to the creation of value and dignity of
The Navigator Group and to reinforce its image in
society;
(b) Shall respect, comply with and reflect the
principles, values and rules of conduct established
in this Code of Ethics and Conduct;
(c) Shall not post or otherwise disclose confidential or
internal information of The Navigator Group;
(d) Shall not communicate, identifying themselves as
Collaborators of The Navigator Group, without
authorization for that purpose.
IV. Supervision, Default
and Communication
27. Non-compliance
Failure to comply with the rules of conduct established
in this Code of Ethics and Conduct shall constitute
serious misconduct, subject to disciplinary proceedings,
in addition to any possible civil, administrative or
criminal liability, in accordance with applicable laws and
regulations.
28. Comunnication
28.1 Collaborators should report the occurrence of any
conduct which is not compatible with the rules set out
in this Code of Ethics and Conduct, of which they are
aware or justifiably suspicious, in a timely and efficient
way, through the proper channels, in accordance with
the internal rules of procedure governing the reporting
of irregularities.
28.2. The Navigator Group guarantees the confidentiality
of information conveyed in reports, in accordance with
the internal rules of procedure governing the reporting
of irregularities.
28.3. The Navigator Group shall not retaliate, in any way,
against a person who reports any non-compliance with
the Code of Ethics and Conduct or another irregularity,
shall ensure a fair treatment of the persons addressed
therein and will not allow the resulting detrimental
treatment where a Collaborator has acted in good faith,
thoughtfully and diligently.
2022 ANNUAL REPORT CORPORATE GOVERNANCE 488
28.4. In accordance with the general terms of the law,
misuse or abuse of the arrangements for reporting
irregularities may render the author of a report liable to
disciplinary measures and/or legal proceedings.
29. Doubts and Questions
Collaborators may place doubts and queries in respect
of the interpretation or application of the Code of Ethics
and Conduct, to the Risk Management Division or to
the Legal Services Division. The Navigator Group also
establishes a permanent arrangement for
communications, direct and confidential, through the
Board of Directors, to which any Collaborator may
resort, through the internal rules of procedure
governing the reporting of irregularities.
30. Procedure
30.1. All reports received by The Navigator Company will
be dealt with in accordance with the internal rules of
procedure governing the reporting of irregularities.
30.2. The Executive Committee and the Audit Board will be
informed of all reports received which concern a
member of the Board of Directors or of the Audit
Board.
31. Annual Report
31.1. The Ethics Committee shall draw up an annual report
on compliance with the rules established in this Code of
Ethics and Conduct, detailing all irregularities of which
it is aware, and setting out the conclusions and follow-
up proposals adopted in the different cases which it
examined.
31.2. For the purposes of the preceding paragraph, the
Risk Management and Legal Services Divisions shall
report to the Ethics Committee all relevant facts which
come to their attention.
V. Communication
32. Communication of the Code of Ethics
and Conduct
32.1. The Code of Ethics and Conduct of The Navigator
Group shall be published on the company’s website and
as an appendix to the annual account reporting
documents, so that they may be known by
Shareholders, Clients, Suppliers, Stakeholders,
investors and other entities with whom the Group
relates.
32.2. The Navigator Group shall make the Code of Ethics
and Conduct available to all Collaborators and promote
its disclosure and general awareness and mandatory
compliance with its provisions.