2012 Integrated report - Sappi

More documents

Recommendations

Info

Group statements of cash flows in Rands (convenience translation) for the year ended September 2012 ZAR million Unaudited 2012 2011 2010 Cash retained from operating activities 3,311 2,825 3,964 Cash generated from operations 5,863 5,552 5,521 – Increase in working capital (821) (682) (37) Cash generated from operating activities 5,042 4,870 5,484 – Finance costs paid (1,659) (1,851) (1,543) – Finance revenue received 89 70 90 – Taxation paid (161) (264) (67) Cash utilised in investing activities (2,287) (1,691) (1,409) Investment to maintain operations (1,425) (1,482) (1,296) Investment to expand operations (1,458) (341) (285) Proceeds on disposal of non-current assets 572 42 157 Decrease in other non-current assets 24 90 15 Cash effects of financing activities (831) (2,060) (1,917) Proceeds from interest-bearing borrowings 8,254 9,490 1,528 Repayment of interest-bearing borrowings (8,585) (10,979) (3,326) Share issue costs – – (22) Cash costs attributable to refinancing transactions (532) (543) – Movement in bank overdrafts 32 (28) (97) Net movement in cash and cash equivalents 193 (926) 638 Cash and cash equivalents at beginning of year 5,174 5,559 5,707 Translation effects (7) 541 (786) Cash and cash equivalents at end of year 5,360 5,174 5,559 Note: The above financial results have been translated into ZAR from US Dollars using the exchange rates as set out in accounting policies note 2.2.1. The year-end rate was used for translating assets and liabilities and the average rate for translating income, expenditure and cash flow items. The translation was made solely for the convenience of the readers and is not defined in IAS 21. It should be noted that the translated ZAR figures from US Dollars do not necessarily represent that these US Dollar amounts could be converted into ZAR at the time when the transaction occurred. 110
Notes to the group annual financial statements for the year ended September 2012 1. Business Sappi Limited, a corporation organised under the laws of the Republic of South Africa (the ‘company’ and, together with its consolidated subsidiaries, ‘Sappi’ or the ‘group’), was formed in 1936 and is a global company focused on providing dissolving wood pulp, paper-pulp and paper-based solutions to its direct and indirect customer base across more than 100 countries. The group’s dissolving wood pulp products are used worldwide by converters to create viscose fibre for clothing and textiles, acetate tow, pharmaceutical products as well as a wide range of consumer products. The group’s market-leading range of paper products includes: coated fine papers used by printers, publishers and corporate end-users in the production of books, brochures, magazines, catalogues, direct mail and many other print applications; casting release papers used by suppliers to the fashion, textiles, automobile and household industries; and in the Southern African region newsprint, uncoated graphic and business papers and premium quality packaging papers and tissue products. The group is comprised of Sappi Fine Paper North America, Sappi Fine Paper Europe and Sappi Southern Africa reportable segments. Sappi Fine Paper, which comprises Sappi Fine Paper Europe and Sappi Fine Paper North America, has manufacturing and marketing facilities in North America, Europe and Asia and produces mainly high quality branded coated fine paper. The group operates a trading network called Sappi Trading for the international marketing and distribution of dissolving wood pulp and market pulp throughout the world and of the group’s other products in areas outside its core operating regions of North America, Europe and Southern Africa. The financial results and position associated with Sappi Trading are allocated to the group’s reportable segments. 2. Accounting policies The following principal accounting policies have been consistently applied in dealing with items that are considered material in relation to the group annual financial statements. 2.1 Basis of preparation The group’s annual financial statements have been prepared in accordance with: • International Financial Reporting Standards (‘IFRS’) issued by the International Accounting Standards Board (‘IASB’); • Interpretations issued by the IFRS Interpretations Committee of the IASB; • the AC 500 Standards issued by the Accounting Practices Board in South Africa; and • the requirements of the Companies Act of South Africa. The group annual financial statements are presented in United States Dollars (US$), as it is the major trading currency of the pulp and paper industry, and are rounded to the nearest million except as otherwise indicated. The group annual financial statements are prepared on the historical-cost basis, except as set out in the accounting policies below. Certain items, including derivatives, are stated at their fair value while plantations are stated at fair value less costs to sell and non-current assets held for sale are stated at the lower of cost or fair value less costs to sell. The preparation of the group annual financial statements was supervised by the chief financial officer, S R Binnie CA(SA). The group has made the following significant accounting policy elections in terms of IFRS: • regular way purchases or sales of financial assets are recognised and derecognised using trade date accounting; • cumulative gains and losses recognised in other comprehensive income (‘OCI’) for cash flow hedge relationships are transferred from equity included in the initial measurement of the non-financial asset or liability when the hedged item is recognised; • jointly controlled entities are accounted for using the equity method; • property, plant and equipment are accounted for using the cost model; • actuarial gains or losses on post-employment benefits are recognised in OCI; and • step-by-step method of reclassification of foreign currency translation reserves from equity to profit or loss on disposal. The elections are explained further in each specific policy in sections 2.2 and 2.3. (i) Fiscal year The group’s financial year-end is on the Sunday closest to the last day of September. Accordingly, the last three financial years were as follows: • 03 October 2011 to 30 September 2012 (52 weeks) • 27 September 2010 to 02 October 2011 (53 weeks) • 28 September 2009 to 26 September 2010 (52 weeks) The group has disclosed two years’ comparative information for the income statement, statement of comprehensive income and the statement of cash flows to be consistent with its disclosure in the annual report prepared on Form 20-F that is filed with the United States Securities Exchange Commission. (ii) Underlying concepts The group annual financial statements are prepared on the going concern basis. Assets and liabilities and income and expenses are not offset in the income statement or balance sheet unless specifically permitted by IFRS. Changes in accounting estimates are recognised prospectively in profit or loss, except to the extent that they give rise to changes in the carrying amount of recognised assets and liabilities where the change in estimate is recognised immediately. 2.2 Summary of accounting policies 2.2.1 Foreign currencies (i) Foreign currency transactions Transactions in foreign currencies are converted into the functional currency of the group’s individual operations at the rate of exchange ruling at the date of such transactions. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. The functional currency of the parent company is Rand. The share capital and share premium of the parent company are translated into US Dollars at the period-end rate. The exchange differences arising on this translation are included in the foreign currency translation reserve, but cannot be recycled through profit or loss. Monetary assets and liabilities in foreign currencies are translated into the functional currency of the entities in the group at rates of exchange ruling at the reporting date. Exchange gains and losses on the translation and settlement of foreign currency monetary assets and liabilities during the period are recognised in profit or loss in the period in which they arise. (ii) Consolidation of foreign operations The assets and liabilities, including goodwill of entities that have non-Dollar functional currencies, are translated at the period-end rate, while the income and expenses are translated using the average exchange rate. The differences that arise on translation are reported directly in other comprehensive income and are only sappi Integrated Report 2012 111
Page 1 and 2:
Sappi Group (Sappi Limited) INTEGRA
Page 4:
About this report Introduction Our
Page 7 and 8:
2012 was a year that positioned us
Page 9 and 10:
global Sales by source 2012: US$6,3
Page 11 and 12:
Non-financial highlights Specific p
Page 13 and 14:
performance the region as a whole.
Page 15 and 16:
The restructuring of our paper oper
Page 17 and 18:
Group overview continued Q&A with R
Page 19 and 20:
Focus on product development Produc
Page 21 and 22:
4 electricity steam black liquor pu
Page 23 and 24:
commitment Europe Our European empl
Page 25 and 26:
iodiversity Sustainable fibre suppl
Page 27 and 28:
Exciter value delivery was US$23.9
Page 29 and 30:
market leaders > Print is particula
Page 31 and 32:
Focus on innovation Knowledge, insi
Page 33 and 34:
Pulp Share of sales paper pulp + di
Page 35 and 36:
governance Deenadayalen (Len) Konar
Page 37 and 38:
guidance Executive management Mark
Page 39 and 40:
Review of operations Sappi Fine Pap
Page 41 and 42:
streamlined The closure of the Bibe
Page 43 and 44:
Focus on skills development Sappi c
Page 45 and 46:
accelerate Capacity (’000) Divisi
Page 47 and 48:
progress The year ahead The demand
Page 49 and 50:
US$ million September 2012 Septembe
Page 51 and 52:
Share statistics 2012 2011 2010 200
Page 53 and 54:
Chief financial officer’s report
Page 55 and 56:
positive Section 2 Financial perfor
Page 57 and 58:
improvement Operating profit exclud
Page 59 and 60:
cost reduction Taxation The tax exp
Page 61 and 62:
service Sappi Fine Paper North Amer
Page 63 and 64: priority Section 4 Cash flow In the
Page 65 and 66: Defined benefit liabilities US$ mil
Page 67 and 68: Group debt profile We show the majo
Page 69 and 70: performance Section 6 Share price p
Page 71 and 72: Governance and compensation Corpora
Page 73 and 74: encourage Audit committee The audit
Page 75 and 76: Group IT steering committee The Gro
Page 77 and 78: During 2012 a board committee was e
Page 79 and 80: Governance element Principle Summar
Page 81 and 82: External assurance providers Report
Page 83 and 84: Principle Chapter 7 - Internal audi
Page 85 and 86: Stakeholder engagement report Sappi
Page 87 and 88: Compensation report The two large s
Page 89 and 90: strategic The primary components of
Page 91 and 92: Component Purpose Characteristics V
Page 93 and 94: competitive The policy on fatalitie
Page 95 and 96: empower Service contracts Mr Boëtt
Page 97 and 98: The dissolving wood pulp capacity c
Page 99: Focus on local communities Our busi
Page 102 and 103: Directors’ approval The directors
Page 104 and 105: Audit committee report for the year
Page 106 and 107: Directors’ report for the year en
Page 108 and 109: Group income statements for the yea
Page 110 and 111: Group statements of cash flows for
Page 112 and 113: Group income statements in Rands (c
Page 116 and 117: Notes to the group annual financial
Page 164 and 165:
Notes to the group annual financial
Page 166 and 167:
Page 168 and 169:
Page 170 and 171:
Page 172 and 173:
Page 174 and 175:
Page 176 and 177:
Page 178 and 179:
Page 180 and 181:
Page 182 and 183:
Page 184 and 185:
Page 186 and 187:
Annexure A - Investments at Septemb
Page 188 and 189:
Glossary market pulp - pulp produce
Page 190 and 191:
Glossary net operating assets - tot
Page 192 and 193:
Notice to shareholders “Resolved
Page 194 and 195:
Notice to shareholders “Resolved
Page 196 and 197:
Notice to shareholders Annexure to
Page 198 and 199:
Notice to shareholders The MOI prov
Page 200 and 201:
Shareholder’s diary Annual genera
Page 202 and 203:
198
Page 204 and 205:
Notes to proxy The form of proxy mu
Page 206:
Inspired to co-create We operate wi
show all

2012 Integrated report - Sappi

Create successful ePaper yourself

Delete template?

Save as template?