2012 Integrated report - Sappi

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Governance and compensation continued Corporate governance continued Management committees The board assigns responsibility for the day-to-day management of the group to the CEO. To assist the CEO in discharging his duties, a number of management committees have been formed. Some of these committees also provide support for specific board committees. The structure is set out below. Executive committee This committee comprises executive directors and senior management from Sappi Limited as well as the chief executive officers of the three main regional business operations. The chief executive officer has assigned responsibility to the executive committee for a number of functional areas relating to the management of the group, including the development of policies and alignment of initiatives regarding strategic, operational, financial, governance, sustainability, social and risk processes. The executive committee meets monthly. Disclosure committee The disclosure committee comprises members of the executive committee and senior management from various disciplines whose objective is to review and discuss financial and other information prepared for public release. The head of internal audit attends meetings by invitation. Treasury committee The treasury committee meets regularly to assess risk and advise on treasury related matters. Technical committees The technical committees focus on global technical alignment, performance and efficiency measurement as well as new product development. Group risk management team The board mandates the group risk management team (GRMT) to establish, coordinate and drive the risk management process throughout Sappi. It has established a risk management system to identify and manage significant risks. The group risk management team reports regularly on risks to the audit committee and the board. The main focus in 2012 was the updating of the risk management policy to improve alignment with practices recommended in King III. In addition, risk management software was implemented to support the risk management process throughout the group. Improvement areas for the GRMT during 2013 include the periodic review of updated risk profiles, risk treatments and related assurance as to the effectiveness thereof. We continue to improve our plant and equipment risk profile by making use of an internationally recognised third party to audit and identify potential risks and where applicable recommend the use of best practices to mitigate such risks. There will be more focus in 2013 on embedding risk management activities in the business, benchmarking and reporting. Sappi management committees Audit committee Group risk management team Technical committees Board of directors CEO, CFO and executive committee Human resources and compensation committee Social, ethics transformation and sustainability committee Regional sustainability councils IT steering committee Treasury committee Disclosure committee Regional human resources and compensation committees 70
Group IT steering committee The Group IT steering committee promotes IT governance throughout the group. The committee has a charter approved by the audit committee and the board. An IT governance framework has been developed and IT feedback reports have been presented to the audit committee and the board. Sappi IT has implemented a standardised approach to IT risk management through a group-wide risk framework supported by the use of risk management software. IT management is improving the quantification of IT project spend, related value to the business, disaster recovery plans and IT risk in its reporting to the audit committee. Financial statements The directors are responsible for overseeing the preparation and final approval of the group annual financial statements, in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board. The group’s results are reviewed, prior to submission to the board, as follows: > All quarterly results – by the disclosure committee and audit committee, and > Interim and final results – by external audit. Internal controls The board is responsible for the group’s systems of internal financial and operational control. The group’s internal controls and systems are designed to provide reasonable assurance as to the integrity and reliability of the annual financial statements and operational management information, that assets are adequately safeguarded against material loss and that transactions are properly authorised and recorded. Internal controls also provide assurance that the group’s resources are utilised efficiently and that the activities of the group comply with applicable laws and regulations. As part of an ongoing comprehensive evaluation process, control self-assessments, year end external audits and independent reviews by internal audit and other assurance providers were undertaken across the group to test the effectiveness of various elements of the group’s financial, disclosure and other internal controls as well as procedures and systems. Identified areas of improvement are being addressed to strengthen the group’s controls further. The results of the reviews did not indicate any material breakdown in the functioning of these controls, procedures and systems during the year. The internal controls in place, including the financial controls and financial control environment are considered to be effective. A Section 404 report in the Form 20-F is to be filed with the United States Securities and Exchange Commission in this regard. Sappi combined assurance framework Identify principal objectives Review and framework Assess principal risks Take action to improve controls Reporting to audit committee and the board Identify key controls Analyse and assess assurances on controls Identify sources of assurance sappi Integrated Report 2012 71
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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
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: encourage Audit committee The audit
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
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Notes to the group annual financial
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Annexure A - Investments at Septemb
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Glossary market pulp - pulp produce
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Glossary net operating assets - tot
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Notice to shareholders “Resolved
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Notice to shareholders “Resolved
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Notice to shareholders Annexure to
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Notice to shareholders The MOI prov
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Shareholder’s diary Annual genera
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Notes to proxy The form of proxy mu
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Inspired to co-create We operate wi
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2012 Integrated report - Sappi

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