2012 Integrated report - Sappi

More documents

Recommendations

Info

Notes to the group annual financial statements for the year ended September 2012 22. Provisions continued Sappi Southern Africa Adamas Mill. During the fiscal year ended September 2011, Sappi Southern Africa announced the decision to permanently close the Adamas Mill and integrate the mill’s products into the production lines at Stanger Mill and Enstra Mill. A total of 215 employees were affected by the closure of Adamas Mill. The mill was a producer of uncoated woodfree specialities paper. A provision of approximately US$7 million relating to restructuring charges and scrapping of spares was raised and utilised during that year. Sappi Paper and Paper Packaging Operations. Our review of the paper and paper packaging operations, completed in the fourth fiscal quarter of 2011, indicated that the production of certain paper and paper packaging products would need to be curtailed. As a result of the curtailment, a restructuring charge of US$29 million was raised and approximately 560 employees were expected to be affected. By the end of fiscal 2012, 325 employees had been impacted and the remaining provision of US$6 million was released to profit or loss. Usutu Mill. At the end of January 2010, Usutu Mill ceased operations and the pulp mill was permanently closed. In fiscal 2011, an additional restructuring charge of US$3 million was incurred against the spares related to the mill. Sappi Southern Africa: Central Services. During the fiscal year ended September 2011, Sappi announced the decision to restructure the support function which included Human Resources, Finance, Procurement and Corporate Affairs. A total of 200 employees were expected to be affected by this restructure and a restructuring provision of US$5 million was raised. By the end of fiscal 2012, 91 employees were affected and the remaining provision of US$2 million was released to profit or loss. US$ million 2012 2011 2010 23. Notes to the group statements of cash flows 23.1 Cash generated from operations Profit (loss) for the year 104 (232) 66 Adjustment for: – Depreciation 367 414 411 – Fellings 73 82 71 – Amortisation 2 3 2 – Taxation charge 34 11 20 – Net finance costs 283 307 255 – Impairments (reversals) of assets and investments 10 167 (20) – Restructuring provisions and closure costs (reversed) raised (2) 135 46 – Fair value adjustment gains and growth on plantations (68) (65) (98) – Post-employment benefits funding (62) (70) (73) – Profit on disposal of investment (11) – – – Profit on disposal of non-current assets (52) (1) (5) – Broad-based Black Economic Empowerment transaction charge 3 5 23 – Other non-cash items 47 42 39 728 798 737 23.2 Increase in working capital Decrease (increase) in inventories 1 62 (72) Decrease (increase) in receivables 35 66 (74) (Decrease) increase in payables (138) (226) 141 (102) (98) (5) 23.3 Finance costs paid Interest and other finance costs on liabilities carried at amortised cost (311) (348) (309) Net foreign exchange gains 5 13 17 Net fair value gains on financial instruments 5 16 21 Premium and costs on early redemption of redeemable bonds and other loans 46 43 – Non-cash movements included in items above 49 10 65 (206) (266) (206) 23.4 Taxation paid Amounts unpaid at beginning of year (13) (35) (54) Translation effects 1 (2) 4 Taxation (charge) benefit to profit or loss (28) (14) 6 Net amounts unpaid at end of year 20 13 35 Cash amounts paid (20) (38) (9) 23.5 Investments to maintain operations Property, plant and equipment (177) (213) (173) 140 23.6 Proceeds on disposal of non-current assets Book value of non-current assets disposed of 93 5 16 Profit on disposal 52 1 5 Realisation of foreign currency translation reserves related to assets sold (32) – – Other sundry receivables (42) – – 71 6 21
US$ million 2012 2011 2010 23. Notes to the group statements of cash flows continued 23.7 Cash and cash equivalents Cash and deposits on call 593 595 791 Money market instruments 52 44 1 645 639 792 US$ million 2012 2011 24. Encumbered assets The book values of assets which are mortgaged, hypothecated or subject to a pledge as security for borrowings, subject to third party ownership in terms of capitalised leases or suspensive sale agreements, are as follows: Land and buildings 261 278 Plant and equipment 1,327 1,164 Inventory 174 178 Trade receivables 490 491 2,252 2,111 Suspensive sale agreements are instalment sale agreements which the group has entered into in respect of certain property, plant and equipment where the assets purchased are encumbered as security for the outstanding liability until such time that the liability is discharged. The encumbered assets relate mainly to the security provided under the following facilities: • Public high yield bonds of (refer to note 20): – €31 million due in 2014; – US$400 million due in 2017; – €250 million due in 2018; – US$300 million due in 2019; and – US$350 million due in 2021. • The committed revolving credit facility of €350 million that was undrawn at year-end (refer to note 20). • The securitisation facility with UniCredit Bank of €360 million with a current balance of €293 million (refer to notes 16 and 20). The security consists substantially of (i) the land, plant and equipment located at Sappi’s production facilities in Gratkorn, Austria; Kirkniemi, Finland; Maastricht, The Netherlands; Nijmegen, The Netherlands; Skowhegan/Somerset, Maine, USA, and Cloquet, Minnesota, USA and (ii) certain inventory owned by SD Warren Company and Sappi Cloquet LLC. The security also includes certain shares in subsidiaries and certain inter-company receivables which are not reflected in the total above. US$ million 2012 2011 25. Commitments Capital commitments Contracted but not provided 267 61 Approved but not contracted 244 416 511 477 Future forecasted cash flows of capital commitments at September: 2011 2012 365 2013 458 75 2014 (2011: thereafter) 40 37 Thereafter 13 511 477 Capital commitments largely relate to the dissolving wood pulp conversion projects in Sappi Southern Africa and Sappi Fine Paper North America as well as a conversion project to increase the production of speciality paper in Sappi Fine Paper Europe. These projects are expected to be financed by funds generated by the business, existing cash resources and borrowing facilities available to the group. sappi Integrated Report 2012 141
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 114 and 115: Group statements of cash flows in R
Page 116 and 117: Notes to the group annual financial
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

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?