SAPPI LTD (SAP) 6-K

INTERNAL CONTROL AND RISK MANAGEMENT
The Board is responsible for the Sappi Group’s systems of internal financial and operational control. The Sappi Group’s internal controls and systems are
designed to provide reasonable assurance as to the integrity and reliability of the annual financial statements, that assets are adequately safeguarded against
material loss and that transactions are properly authorised and recorded. Such controls are based on established written policies and procedures which are
monitored throughout the group and are applied by trained, skilled personnel with an appropriate segregation of duties through clearly defined lines of
accountability and delegation of authority. The control system includes comprehensive reporting and analysis of actual results against approved standards and
budgets. All employees are required to maintain the highest ethical standards in ensuring that the company’s business practices are conducted in a manner
which in all reasonable circumstances is above reproach. As part of an ongoing process, reviews are undertaken across the group of the effectiveness of
various elements of the group’s internal controls, procedures and systems. Where potential improvements are identified, they are being addressed. The
reviews enable management to further strengthen the group’s controls and the results of the reviews did not indicate any material breakdown in the
functioning of these controls, procedures and systems during the year under review. A material breakdown is defined as a critical weakness in process or
financial systems which would result in a material loss, contingency or uncertainty requiring disclosure in the published annual financial statements. Section
404 of the Sarbanes-Oxley Act promulgated in the United States of America requires companies registered with the Securities Exchange Commission to
complete a comprehensive evaluation and report on the effectiveness of their internal controls over financial reporting. Sappi conducted its second evaluation
at the end of fiscal 2007 and included its section 404 report in its Form 20-F filed with the United States Securities and Exchange Commission.
Disclosure controls
Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by the Sappi Group in the
reports that it files or submits is accumulated and communicated to the group’s management, including the chief executive officer and chief financial officer,
as appropriate to allow timely decisions regarding required disclosure. The Sappi Group has implemented disclosure controls and procedures as deemed
appropriate by management. A disclosure committee of management meets to review all Sappi external financial reports prior to their release.
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