SAPPI LTD (SAP) 6-K

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Other operating expenses include allocated corporate costs of approximately EUR 8,600, EUR 8,000 and EUR 7,300 for the years ended 31 December 2007, 2006 and 2005, respectively. These costs are primarily related to corporate level administrative services (executive personnel costs, human resources, legal services, IT services, insurance and other administrative services), and are generally allocated based on the ratio of the Company’s annual net sales or other specific allocation keys, to the Parent’s comparable amounts. Corporate expense allocations are in addition to business level expenses which are invoiced to the individual Company businesses on at least a quarterly basis. Management considers that such allocations have been made on a reasonable basis, but may not necessarily be indicative of the costs incurred had the Company operated as a separate entity during the periods presented. Certain corporate costs incurred by the Parent that did not directly or indirectly benefit the Company entities were not allocated to the combined financial statements as such expenses could not be reasonably allocated. Also as further described in Note 2, Metsä Finance has entered into related party interest bearing loan agreements with certain of the Company entities. These agreements have contractual maturity dates and interest rates. At 31 December 2007, 2006 and 2005 the average interest rate on outstanding related party interest bearing liabilities was 5.21%, 4.29% and 2.78%, respectively. As of 31 December 2007, 2006 and 2005, the Company recognised non-current interest bearing liabilities in the amount of EUR 55,661, EUR 197,935, and EUR 197,968, respectively, and current interest bearing liabilities in the amount of EUR 12,000, EUR 24,444 and EUR 26,244 for amounts due to Metsä Finance under such agreements. The Company recognised interest expense relating to these obligations in the amount of EUR 5,054, EUR 9,867 and EUR 8,412 for the years ended 31 December 2007, 2006 and 2005, respectively, which is reported in other financial expense in the combined income statements. Stockstadt and CWZ participate in a profit and loss transfer arrangement (“PLTA”) with its holding company M-real Deutsche Holding GmbH for all periods presented in the combined financial statements. Under the PLTA, Stockstadt and CWZ are obligated to transfer their entire profits, as determined under the German Commercial Code (HGB), to Deutsche Holding GmbH during the term of the agreement. Conversely, Deutsche Holding GmbH is obliged to compensate any net loss generated by Stockstadt and CWZ as determined under HGB. Both the right to transfer profits and the compensation claim for any net losses arises at the end of the financial year. The Companies recognised the obligation to transfer profits under the PLTA by recognizing EUR 1,667 and EUR 2,697 in current accounts payable as of 31 December 2006 and 2005, respectively, offset with a corresponding reduction in invested equity. The Companies recognised the right to be compensated for net loss generated by recognizing EUR 15,791 in current accounts receivable as of 31 December 2007 offset with a corresponding increase in invested equity. The following shows related party transactions as of and for the years ended 31 December: 2007 2006 2005 Sales 73,811 101,268 89,468 Other operating income 2,557 2.333 3,900 Purchases 462,568 421,475 338,573 Other operating expenses 51,656 53,755 36,719 Interest income 972 1,574 1,386 Interest expenses 5,054 9,867 8,412 Receivables Current 33,267 40,706 60,163 Liabilities Non-current 55,661 197,935 197,968 Current 33,693 41,664 46,815 Other operating expenses include allocated corporate costs and other operating expenses. 77
The compensation paid to management is presented in Note 7. The Company’s management is not part of any stock based compensation schemes. Note 5•Geographical data The following shows the distribution of the Company’s combined total sales to customers by geographical market based upon the location in which the customers reside for the years ended 31 December: 2007 2006 2005 Europe 1,124,412 1,084,040 992,167 America 115,743 113,799 100,699 Asia 38,830 57,128 69,075 Oceania 44,720 50,398 52,057 Africa 9,082 10,420 11,216 Total 1,332,787 1,315,785 1,225,214 Personnel data by country see Note 7, “Personnel data”. All of the Company’s long-lived assets, which primarily are comprised of property, plant, and equipment, are located in Europe. Note 6•Other operating income The Company’s other operating income consist of the following components for the years ended 31 December: 2007 2006 2005 Rental income 883 1,052 1,106 Service income 6,821 6,225 5,499 Government grants 589 2,716 3,657 Other allowances and subsidies 314 667 474 Scrap and waste sales 1,694 1,477 1,533 Gains on sale of fixed assets 159 43 79 Other operating income 4,992 4,932 6,420 15,452 17,112 18,768 Other operating income consists of several items, which are not separately material. 78
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SAPPI LTD (SAP) 6-K Current report
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INCORPORATION BY REFERENCE Sappi Li
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CERTAIN FORWARD-LOOKING STATEMENTS
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South African legal advisor to Sapp
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TABLE OF CONTENTS Page CORPORATE IN
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ACTION REQUIRED BY SAPPI SHAREHOLDE
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IMPORTANT DATES/TIMES SALIENT DATES
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“CSDP” “CWF” “Deloitte So
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“Sappi Papier Holding” “Sappi
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CURRENCY TRANSLATION This Circular
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The tables below highlight certain
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Reconciliation from profit for the
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3. PRINCIPAL TERMS AND CONDITIONS O
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• dispose of any of the Settlemen
Page 30 and 31: There is no accrued taxation, which
Page 32 and 33: (d) all of the know-how, brands, or
Page 34 and 35: The map below sets out the location
Page 36 and 37: Name Age Position Experience Martti
Page 38 and 39: 5. FINANCIAL INFORMATION ON THE ACQ
Page 40 and 41: The registered address of Metsälii
Page 42 and 43: Pro forma financial effects for the
Page 44 and 45: G. Financial information for Sappi
Page 46 and 47: 13.3. Major Shareholders prior to t
Page 48 and 49: Dr D.C Cronje was appointed in Janu
Page 50 and 51: Executive Directors RJ Boëttger (3
Page 52 and 53: 14.2.2. Changes in executive direct
Page 54 and 55: 2007 2006 Direct Interests Indirect
Page 56 and 57: Other than described above, there a
Page 58 and 59: 21. DIRECTORS’ RESPONSIBILITY STA
Page 60 and 61: 25. EXCHANGE CONTROL AUTHORITY Subj
Page 62 and 63: • Audited Annual Financial Statem
Page 64 and 65: HISTORIC FINANCIAL INFORMATION RELA
Page 66 and 67: COMBINED STATEMENTS OF CASH FLOWS F
Page 68 and 69: Note 1• Background and basis of p
Page 70 and 71: The translation of foreign currency
Page 72 and 73: Goodwill that arose prior to 1 Janu
Page 74 and 75: Revenue recognition Revenue compris
Page 76 and 77: Application of new and amended IFRS
Page 78 and 79: Liquidity risk is defined as the ri
Page 82 and 83: Note 7•Personnel data The Company
Page 84 and 85: Note 9•Financial income and expen
Page 86 and 87: The Company has offset deferred tax
Page 88 and 89: Note 12•Property, plant and equip
Page 90 and 91: Property, plant and equipment inclu
Page 92 and 93: Note 16•Cash and cash equivalents
Page 94 and 95: The Company expects to contribute E
Page 96 and 97: Note 20•Maturity of repayment and
Page 98 and 99: Maturity of repayment and interest
Page 100 and 101: Note 22•Other non-current liabili
Page 102 and 103: 2. Interim Condensed Combined Finan
Page 104 and 105: INTERIM CONDENSED COMBINED CASH FLO
Page 106 and 107: NOTES TO THE INTERIM CONDENSED COMB
Page 108 and 109: A reconciliation of income tax expe
Page 110 and 111: Sales of goods to related parties d
Page 112 and 113: 3. Interim condensed combined finan
Page 114 and 115: INTERIM CONDENSED COMBINED CASH FLO
Page 116 and 117: NOTES TO THE INTERIM CONDENSED COMB
Page 118 and 119: Depreciation of buildings and machi
Page 120 and 121: As of 31 December 2007 and 2006, cu
Page 122 and 123: ANNEXURE 2 INDEPENDENT REPORTING AC
Page 124 and 125: Opinion In our opinion, the combine
Page 126 and 127: Yours sincerely PRICEWATERHOUSECOOP
Page 128 and 129: The pro forma adjustments reflect t
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• anticipated synergies and effic
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(A) (B) Financial information for t
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(2) Adjustments to the equity balan
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ASSETS EUR’000 US$’000 Acquired
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UNAUDITED PRO FORMA INCOME STATEMEN
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Pro forma notes (1) Reflects the el
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* The number of shares in issue at
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Notes to the unaudited pro forma co
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(2) (EUR54,970) has been reallocate
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We do not accept any responsibility
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ANNEXURE 5 MATERIAL LOANS RELATING
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(4) The financial covenant relates
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The fair value of non-current borro
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ADDITIONAL MATERIAL LOANS OF THE GR
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Directorships in the last five year
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David Charles Brink Age 69 Business
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Directorships in last five years Cu
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Directorships in last five years Fo
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Directorships in last five years Cu
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Experience Jan joined Sappi in 1992
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Experience Berry Wiersum joined Sap
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ANNEXURE 7 DETAILS ON THE SAPPI SHA
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SPECIAL RESOLUTION NUMBER 1 Increas
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Explanatory Note to Ordinary Resolu
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This Page Printed On Pink Paper Sap
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FORM OF DIRECTION FOR HOLDERS OF DE
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(Incorporated in the Republic of So
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TABLE OF CONTENTS Page REVISED LIST
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2.2 Background Sappi Limited was fo
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Where shareholders are required to
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6. INFORMATION RELATING TO THE DIRE
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6.4 Additional information pertaini
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No commissions are payable or have
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15. MATERIAL VENDORS There have not
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ANNEXURE A TRADING HISTORY OF SAPPI
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ANNEXURE B PRINCIPAL IMMOVABLE PROP
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ANNEXURE C APPOINTMENT, QUALIFICATI
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If any question arises at any meeti
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As at the termination of each annua
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At every annual general meeting of
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Human Resources committee The respo
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Risk management The Sappi Board rec
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Interest in contracts The Sappi Gro
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ANNEXURE E CAPITAL COMMITMENTS AND
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Westbrook Cogeneration Agreement: I
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SIGNATURE Pursuant to the requireme
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