2007 Annual Report - Sappi

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Notes to the group annual financial statements continued for the year ended September 2007 31. Financial Instruments continued 2. Derivative financial instruments The following tables indicates the different types of derivative financial instruments for 2007 and 2006, included within the various categories on the face of the balance sheet. The reported maturity analysis is calculated based on an undiscounted basis. Gross flows on derivative instruments Fair value at Fair value at Sept 2007 Sept 2006 Fair value Fair value US$ million Total hedge Total hedge Assets Fair value of derivatives by risk factor Interest rate risk Interest rate swaps 137 137 102 102 receiving leg 536 536 509 509 paying leg (399) (399) (407) (407) Foreign exchange risk FX forward contracts 7 4 receiving leg 309 766 paying leg (302) (761) Liabilities Fair value of derivatives by risk factor Interest rate risk Interest rate swaps (12) (12) (23) (23) paying leg (246) (246) (289) (289) receiving leg 234 234 266 266 Foreign exchange risk FX forward contracts (31) (4) (14) – paying leg (879) (89) (251) (21) receiving leg 848 85 238 21 144 sappi limited | 07 | annual report
31. Financial Instruments continued 3. Interest rate risk-quantitative data Interest-bearing borrowings The table below provides information about Sappi’s non-current borrowings that are sensitive to changes in interest rates. The table presents discounted cash flows by expected maturity dates. The average fixed effective interest rates presented below are based on weighted average contract rates applicable to the amount expected to mature in each respective year. Forwardlooking average variable effective interest rates for the financial years ended September 2007 and thereafter are based on the yield curves for each respective currency as published by Reuters on 30 September 2007. The information is presented in US$, which is the group’s reporting currency. A detailed analysis of the group’s borrowings is performed under note 21. Expected maturity date Total 2007 2006 2006 carrying Fair Carrying Fair US$ million 2008 2009 2010 2011 2012 2013+ value value value value US Dollar Fixed rate 17 – 38 – – – 55 56 54 44 Average interest rate (%) 6.13 – 4.49 – – – 5.01 4.5 Variable rate (1)(2) 145 – – – 469 332 946 947 1,071 1,174 Average interest rate (%) 4.86 – – – 7.83 7.87 7.39 7.1 Euro Fixed rate 128 6 6 570 1 5 716 721 651 673 Average interest rate (%) 5.02 5.97 6.13 4.62 2.49 2.46 4.69 4.7 Variable rate (1)(3) 297 – – – – – 297 297 273 273 Average interest rate (%) 3.98 – – – – – 3.98 3.7 Rand Fixed rate 6 7 23 53 149 161 399 408 235 150 Average interest rate (%) 9.42 9.56 8.69 8.84 10.65 9.53 9.81 9.6 Variable rate (1)(4) 36 6 2 – – – 44 44 44 44 Average interest rate (%) 9.84 9.86 9.86 – – – 9.84 8.7 sappi limited | 07 | annual report 145
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annual report 2007
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Our business Sappi is a global pape
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Our top risks These risks are furth
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Financial targets and performance*
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Our Charter commitments Examples of
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Business structure Johannesburg Asi
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Our brands and products Coated pape
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Non-executive directors continued D
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Divisional and corporate management
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In Europe we face major challenges.
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We expect to continue our improving
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Q: How will you improve delivery on
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Overview Description The main produ
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A major feature of the year has bee
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In the year ahead, we will continue
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Overview The Forest Products busine
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Value added statement for the year
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Sappi has a global insurance struct
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Sales Sales volume (in metric tons)
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Divisional contributions to operati
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The impact of these changes on oper
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Cash flow analysis In the table bel
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project and again aim to fund this,
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In 2006, both Standard & Poor’s (
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y certain of the individual direct
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Not restated for IFRS* September Se
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September September September Septe
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Element/Best practice Sappi applica
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The board of directors The basis fo
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Our compensation philosophy is base
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stakeholders with whom they interac
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Auditor’s report Independent audi
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Directors’ report for the year en
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Directors and secretaries The names
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Group balance sheet at September 20
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Group statement of recognised incom
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Group balance sheet in Rands conven
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Notes to the group annual financial
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Fair value hedge A hedge of the exp
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(ii) Associates The results and ass
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• it transfers (or it assumes an
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2.3.8 Inventories Inventories are a
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2.3.13 Plantations Plantations are
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the year that are declared after th
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Owner-occupied investment propertie
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into account, unadjusted current ma
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The group is required to record pro
Page 95 and 96: second where a share-based payment
Page 97 and 98: 3. Segment information continued Sa
Page 99 and 100: US$ million 2007 2006 4.1 Operating
Page 101 and 102: US$ million 2007 2006 6. Taxation c
Page 103 and 104: 7. Earnings per share and headline
Page 105 and 106: US$ million 2007 2006 10. Property,
Page 107 and 108: 2007 2006 US$ million Assets Liabil
Page 109 and 110: US$ million 2007 2006 12. Deferred
Page 111 and 112: 14. Joint ventures and associates c
Page 113 and 114: US$ million 2007 2006 17. Trade and
Page 115 and 116: 17. Trade and other receivables con
Page 117 and 118: 19. Reconciliation of changes in eq
Page 119 and 120: US$ million 2007 2006 21. Interest-
Page 121 and 122: 21. Interest-bearing borrowings con
Page 127 and 128: 23. Provisions continued September
Page 129 and 130: US$ million 2007 2006 24. Notes to
Page 131 and 132: US$ million 2007 2006 27. Contingen
Page 133 and 134: 28. Post-employment benefits - pens
Page 135 and 136: Europe US$ million Southern Africa
Page 137 and 138: 29. Post-employment benefits other
Page 139 and 140: 30. Share-based payment The Sappi L
Page 141 and 142: 30. Share-based payment continued T
Page 143 and 144: 30. Share-based payment continued T
Page 145: 31. Financial Instruments The group
Page 149 and 150: 31. Financial Instruments continued
Page 161 and 162: 33. Events after Balance Sheet date
Page 163 and 164: 35. Summary of differences between
Page 171 and 172: 36. New United States accounting st
Page 173 and 174: 37. Directors’ remuneration conti
Page 175 and 176: 38. Directors’ interests The foll
Page 177 and 178: M R Thompson (1) E van As Total 200
Page 179 and 180: M R Thompson (1) E van As Total 200
Page 181 and 182: Company auditor’s report Independ
Page 183 and 184: Condensed company balance sheet at
Page 185 and 186: Notes to the condensed company fina
Page 187 and 188: Investments at September 2007 Share
Page 189 and 190: Non-GAAP financial definitions The
Page 191 and 192: - the general authority shall only
Page 193 and 194: corporate governance requirements.
Page 195 and 196: Franklin Abraham Sonn (68) BA Hons,
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Proxy form for annual general meeti
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Forward looking statements Certain
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2007 Annual Report - Sappi

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