2012 Integrated report - Sappi

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Notice to shareholders “Resolved that an audit committee be and is hereby elected, by separate election to the committee of the following independent directors: 4.1 Dr Deenadayalen Konar Chairman 4.2 Mr Godefridus Peter Franciscus Beurskens Member 4.3 Mr Michael Anthony Fallon Member 4.4 Mr Nkateko Peter Mageza Member 4.5 Mrs Karen Rohn Osar Member* in terms of the Companies Act of South Africa, to hold office until the conclusion of the next annual general meeting and to perform the duties and responsibilities stipulated in section 94(7) of the Companies Act and in King III and to perform such other duties and responsibilities as may from time to time be delegated to it by the board.” In order for these resolutions to be adopted, the in each case support of more than 50% of the voting rights exercised on the resolution by shareholders present or represented by proxy at the annual general meeting and entitled to exercise voting rights on the resolutions is required. * Subject to her re-election as a director pursuant to ordinary resolution number 3.3. 5. Ordinary resolution number 5: Re-appointment of auditors The board has evaluated the performance of Deloitte & Touche and recommends and supports their re-appointment as auditors of Sappi. “Resolved to re-appoint Deloitte & Touche (with the designated registered auditor currently being Mr R C Campbell) as the auditors of Sappi Limited for the financial year ending September 2013 and to remain in office until the conclusion of the next annual general meeting.” In order for this resolution to be adopted, the support of more than 50% of the voting rights exercised on the resolution by shareholders present or represented by proxy at the annual general meeting and entitled to exercise voting rights on the resolution is required. 6. Ordinary resolutions number 6.1 and 6.2: Provision of Sappi shares required by the Sappi Limited Share Incentive Trust and The Sappi Limited Performance Share Incentive Trust The passing of resolutions 6.1 and 6.2 will enable the directors to continue to meet the share requirements of The Sappi Limited Share Incentive Trust and The Sappi Limited Performance Share Incentive Trust (collectively ‘the Schemes’), both of which Schemes were approved by shareholders, are already in place and are subject to the Listings Requirements of the JSE Limited. The passing of resolution 6.2 will provide directors with the flexibility to utilise shares repurchased from time to time by a wholly-owned subsidiary of Sappi and held in treasury by the subsidiary company, for the purposes of satisfying the share requirements of the Schemes, at times when the directors consider that to be more efficient than issuing new shares in the capital of Sappi. In terms of the Schemes the combined maximum number of shares that can be issued pursuant to both the Schemes is 42,700,870 shares (being 7.89% of the issued ordinary share capital of Sappi at 30 September 2012) of which 14,664,815 shares have already been issued to, or transferred to the Schemes, leaving a balance of up to 28,036,055 shares which could still need to be issued or transferred to the Schemes. Some shareholders and their advisors commented earlier in the year about the company’s practice of continuing to allocate share options to participants of the Sappi Limited Share Incentive Scheme, the vesting of which options begins one year after allocation and is not subject to any performance criteria. Following these comments, it has been decided to discontinue the allocation of options. Instead, for 2012 and thereafter, only allocations of performance share plan awards (whose vesting is after four years of allocation subject to meeting certain performance criteria), will be made to all eligible participants in the Schemes. Because of the higher value of performance share plan awards to participants, compared to the value of options, although the number of participants who are allocated performance share awards in 2012 and thereafter, will increase, the total number of shares forming the annual allocations will be less. The total number of participants will continue to be similar to previous levels. Ordinary resolution number 6.1: “Resolved as an ordinary resolution that all the ordinary shares required for the purpose of carrying out the terms of The Sappi Limited Performance Share Incentive Trust (the ‘Plan’), other than those which have specifically been appropriated for the Plan in terms of ordinary resolutions duly passed at previous general meetings of Sappi, be and are hereby specifically placed under the control of the directors who be and are hereby authorised to allot and issue those shares in terms of the Plan.” Ordinary resolution number 6.2: “Resolved as an ordinary resolution that any subsidiary of Sappi (‘Subsidiary’) be and is hereby authorised in terms of the Listings Requirements of the JSE Limited to sell at the price at which the participant is allowed to acquire the company’s shares and to transfer to The Sappi Limited Share Incentive Trust and/or The Sappi Limited Performance Share Incentive Trust (collectively ‘the Schemes’) those numbers of Sappi’s shares acquired by that Subsidiary from time to time but not exceeding the maximum number of Sappi’s shares available to the Schemes as may be required by the Schemes when a participant to whom Sappi’s shares will be allocated has been identified.” In order for these resolutions to be adopted, the in each case support of more than 50% of the voting rights exercised on the resolution by shareholders present or represented by proxy at the annual general meeting and entitled to exercise voting rights on the resolution is required. 7. Ordinary resolution number 7: Remuneration policy “Resolved as an ordinary resolution, that the company’s remuneration policy as contained in the compensation report on pages 83 to 91 of the annual report, be and is hereby endorsed by way of a non-binding advisory vote.” This non-binding advisory vote is being proposed in accordance with the recommendations of King III. In order for this resolution to be adopted, the support of more than 50% of the voting rights exercised on the resolution by shareholders present or represented by proxy at the annual general meeting and entitled to exercise voting rights on the resolution is required. 188
8. Special resolution number 1: Non-executive directors’ fees* “Resolved that, with effect from 01 October 2012 and until otherwise determined by Sappi in general meeting, the remuneration of the non-executive directors for their services shall be increased as follows: From 1. Sappi board fees Chairperson ZAR2,120,000** ZAR2,247,200** ** Inclusive of all committee fees. Lead independent director If South African resident ZAR434,600 ZAR460,675 If European resident GBP58,760 GBP60,670 If USA resident US$87,290 US$89,910 Other directors If South African resident ZAR290,440 ZAR307,865 If European resident GBP39,160 GBP40,430 If USA resident US$58,140 US$59,885 From To 2. Audit committees Group committee Chairperson If South African resident ZAR301,570 ZAR319,665 If European resident GBP39,730 GBP41,020 If USA resident US$60,260 US$62,065 Other members If South African resident ZAR150,790 ZAR159,835 If European resident GBP19,970 GBP20,620 If USA resident US$29,360 US$30,240 Regional audit committees Chairperson If South African resident ZAR38,000 per meeting ZAR40,280 per meeting If European resident GBP5,100 per meeting GBP5,265 per meeting If USA resident US$7,370 per meeting US$7,590 per meeting From To 3. Human resources and compensation committee, nomination and governance committee, social, ethics, sustainability and transformation committee and any other committees Chairperson If South African resident ZAR181,260 ZAR192,135 If European resident GBP23,610 GBP24,375 If USA resident US$34,400 US$35,430 Other members If South African resident ZAR94,340 ZAR100,000 If European resident GBP16,540 GBP17,080 If USA resident US$21,010 US$21,640 To From 4. Additional meeting fees for board meetings in excess of five meetings per annum (whether attended in person or by teleconference/videoconference) If South African resident ZAR29,100 per meeting ZAR30,845 per meeting If European resident GBP3,870 per meeting GBP3,995 per meeting If USA resident US$5,810 per meeting Travel compensation (increase of 3.33%) For more than 10 flight hours return * Fees per annum unless otherwise indicated. US$3,000 per meeting To US$5,985 per meeting US$3,100 per meeting Sappi’s practice, as recorded previously, is to review directors’ fees annually. Special resolution number 1 increases the remuneration currently paid to non-executive directors and board committee members by between approximately 3% and 6% per annum depending generally on the domicile of the directors and the currency in which they are paid, with effect from 01 October 2012. The fees were last increased with effect from 01 October 2011 and have been reviewed to ensure that Sappi’s fees remain generally comparable with those of its peer companies in the various countries in which its directors are domiciled. The review also takes into account that the responsibility of non-executive directors continues to increase substantially flowing from legislative, regulatory and corporate governance developments and requirements in South Africa and elsewhere. It was decided during the year to align payment of the fees with common practice in South Africa and pay the fees quarterly and not half-yearly, as had previously been Sappi’s practice. Fees are now paid quarterly (in March, June, September and December each year) and the proposed increase, if approved, will be applicable to payments to be made in December 2012 onwards. Initially the December 2012 payment will be made on the basis of the existing fee structure, and following shareholder approval of the proposed increases, the shortfall in the December 2012 payment will be made up in the March 2013 payment. The practice has been and will continue to be that directors’ fees and board fees are paid to non-executive directors only. In order for this resolution to be adopted, the support of at least 75% of the voting rights exercised on the resolution by shareholders present or represented by proxy at the annual general meeting and entitled to exercise voting rights on the resolution is required. 9. Special resolution number 2: Loans or other financial assistance to related or inter-related companies The Companies Act provides, among other things, that, except to the extent that the Memorandum of Incorporation of a company provides otherwise, the board may authorise the company to provide direct or indirect financial assistance (which includes lending money, guaranteeing a loan or other obligation and securing any debt or obligation) to a related or inter-related company or corporation, provided that such authorisation shall be made pursuant to a special resolution of the shareholders adopted within the previous two years, which approved such assistance either for the specific recipient or generally for a category of potential recipients and the specific recipient falls within that category. sappi Integrated Report 2012 189
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Sappi Group (Sappi Limited) INTEGRA
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About this report Introduction Our
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2012 was a year that positioned us
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global Sales by source 2012: US$6,3
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Non-financial highlights Specific p
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performance the region as a whole.
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The restructuring of our paper oper
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Group overview continued Q&A with R
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Focus on product development Produc
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4 electricity steam black liquor pu
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commitment Europe Our European empl
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iodiversity Sustainable fibre suppl
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Exciter value delivery was US$23.9
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market leaders > Print is particula
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Focus on innovation Knowledge, insi
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Pulp Share of sales paper pulp + di
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governance Deenadayalen (Len) Konar
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guidance Executive management Mark
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Review of operations Sappi Fine Pap
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streamlined The closure of the Bibe
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Focus on skills development Sappi c
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accelerate Capacity (’000) Divisi
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progress The year ahead The demand
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US$ million September 2012 Septembe
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Share statistics 2012 2011 2010 200
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Chief financial officer’s report
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positive Section 2 Financial perfor
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improvement Operating profit exclud
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cost reduction Taxation The tax exp
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service Sappi Fine Paper North Amer
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priority Section 4 Cash flow In the
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Defined benefit liabilities US$ mil
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Group debt profile We show the majo
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performance Section 6 Share price p
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Governance and compensation Corpora
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encourage Audit committee The audit
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Group IT steering committee The Gro
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During 2012 a board committee was e
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Governance element Principle Summar
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External assurance providers Report
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Principle Chapter 7 - Internal audi
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Stakeholder engagement report Sappi
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Compensation report The two large s
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strategic The primary components of
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Component Purpose Characteristics V
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competitive The policy on fatalitie
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empower Service contracts Mr Boëtt
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The dissolving wood pulp capacity c
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Focus on local communities Our busi
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Directors’ approval The directors
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Audit committee report for the year
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Directors’ report for the year en
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Group income statements for the yea
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Group statements of cash flows for
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Group income statements in Rands (c
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Group statements of cash flows in R
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Notes to the group annual financial
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Page 142 and 143: 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 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
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Page 204 and 205: Notes to proxy The form of proxy mu
Page 206: Inspired to co-create We operate wi
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2012 Integrated report - Sappi

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