2008 Annual report - Sappi

Notes to the group annual financial statements // continued
for the year ended September 2008
US$ million 2008 2007 2006
5. Net finance costs
Gross interest and other finance costs on liabilities
carried at amortised cost 181 173 162
– Interest on bank overdrafts 4 8 11
– Interest on redeemable bonds and other loans 174 161 143
– Interest cost on finance lease obligations 3 4 8
Finance revenue received on assets carried at amortised cost (38) (21) (26)
– Interest on bank accounts (22) (3) (8)
– Interest revenue on other loans and investments (16) (18) (18)
Interest capitalised to property, plant and equipment (16) (14) (2)
Net foreign exchange gains (8) (13) (7)
Net fair value loss on financial instruments 7 9 3
– Loss on intercompany non hedged loans 2 7 4
– Amortisation of cost of de-designated hedges 5 2 2
– Hedge ineffectiveness
– (gain) loss on hedging instrument (derivative) (30) (14) 14
– loss (gain) on hedged item 30 14 (17)
126 134 130
6. Taxation charge (benefit)
Current taxation:
– Current year 23 44 8
– Prior year over provision* (19) (7) (3)
– Other company taxes 2 1 –
Deferred taxation: (refer note 11)
– Current year** 89 36 (6)
– Prior year (over) under provision – (8) 1
– Attributable to tax rate changes (9) (19) (1)
86 47 (1)
* Primarily relates to the expiration of statute of limitations
in various jurisdictions
** Includes Secondary Tax on Companies (STC) (1) 7 8 9
Due to the utilisation of previously unrecognised tax assets,
the deferred taxation expense for the year has been reduced by 19 11 24
In addition to income taxation expense charges to profit and loss, a deferred taxation charge of US$1 million (2007: US$18 million;
2006: US$13 million) has been recognised directly in equity (refer note 11).
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