Our performance in 2009 - Sappi

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27. Post-employment benefits – pensions Defined-contribution plans 2009 annual report The group operates defined-contribution schemes of various sizes for all qualifying employees in most regions throughout the group. The assets of the schemes are held separately from those of the group in funds under the control of trustees. In addition, the group participates in country-wide union/industry schemes in certain locations open to eligible employees. The number of schemes increased following an acquisition during the year. The total cost charged to profit or loss of US$33 million (September 2008: US$23 million; September 2007: US$18 million) represents contributions payable to these schemes by the group, based on the rates specified in the rules of these schemes. As at September 2009, US$2 million (September 2008: US$2 million; September 2007: nil) was the net position of contributions in the current reporting period that had not yet been paid over to the schemes and prepayments made for contributions due in the next fiscal year. Defined-benefit plans The group operates 14 principal defined-benefit plans plus a number of smaller plans. The number of plans has increased following an acquisition during the year. This includes plans closed to new entrants and plans closed to future accrual for existing members. Plans still open to new entrants or future accrual, cover all qualifying employees. All plans have been established in accordance with applicable legal requirements, customs and existing circumstances in each country. Plans remain open to new members except for the following: Plans in Southern Africa, Austria, some in Germany and one in North America are closed to new entrants. Schemes in the UK are closed to future accrual. Benefits are generally based upon compensation and years of service, with varying definitions of compensation such as average salary close to retirement or career average salary. Exceptions are for some of our German and Austrian plans which provide fixed benefits and some of our North American plans that provide benefits based on years of service and a ‘$ multiplier’, which historically has increased from time to time. Our pension plan in Switzerland is a defined contribution plan with guaranteed minimum investment returns and pays pensions. The scheme has a liability under IAS19 which is disclosed with other defined benefit plan liabilities in this note. With the exception of our German and Austrian plans (which are unfunded), the assets of these plans are held in separate trustee administered funds, which are subject to varying statutory requirements in the particular countries concerned. In terms of these requirements, periodic actuarial valuations of these funds are performed by independent actuaries. Actuarial valuations of the European and North American funds are performed annually. Actuarial assessments on the funding bases are performed triennially for the South African and United Kingdom funds. As at September 2009, the number of active members in plans is approximately 8,000. Group companies have no other significant post employment benefit liabilities, except for the following: – healthcare benefits provided to persons in North America and in South Africa (refer to note 28); and – jubilee (long service award schemes) provided in continental Europe, an early retirement (termination) plan in Belgium and ATZ liabilities in Germany totalling US$36 million (included within other non-current liabilities in note 21). All obligations and assets were measured at the end of this financial year. 151 financials
152 Notes to the group annual financial statements continued 27. Post-employment benefits – pensions continued US$ million Southern Africa Europe (incl UK) 2009 2008 North America Total Southern Africa Europe (incl UK) North America Total Change in present value of defined benefit obligation Defined benefit obligation at beginning of year 271 765 378 1,414 305 889 413 1,607 Current service cost 6 10 5 21 8 12 6 26 Past service (credit) cost – (5) 1 (4) – 1 – 1 Interest cost 22 53 28 103 24 47 26 97 Plan participants’ contribution 3 1 – 4 4 – – 4 Actuarial loss (gain) experience Actuarial loss (gain) 17 (13) 5 9 11 (2) 7 16 assumptions Gain on curtailment and 5 130 110 245 (11) (127) (51) (189) settlement – (1) – (1) – (1) – (1) Acquisition – 225 – 225 – – – – Benefits paid (28) (54) (24) (106) (26) (50) (23) (99) Translation difference 30 5 – 35 (44) (4) – (48) Defined benefit obligation at end of year 326 1,116 503 1,945 271 765 378 1,414 Present value of wholly unfunded obligations Present value of wholly and – 186 4 190 – 114 3 117 partly funded obligations 326 930 499 1,755 271 651 375 1,297 Change in fair value of plan assets Fair value of plan assets at beginning of year 332 693 362 1,387 398 763 384 1,545 Expected return on plan assets Actuarial (loss) gain on plan 28 48 28 104 36 46 33 115 assets (6) 18 35 47 (30) (93) (66) (189) Employer contribution* 7 30 17 54 9 33 34 76 Plan participants’ contribution 3 2 – 5 4 – – 4 Acquisition – 173 – 173 – – – – Benefits paid Loss on curtailment and (28) (54) (24) (106) (26) (50) (23) (99) settlement – (1) – (1) – – – – Translation difference 31 1 – 32 (59) (6) – (65) Fair value of plan assets at end of year 367 910 418 1,695 332 693 362 1,387 * Includes ‘additional employer contribution’ of US$1 million disclosed in 2008.
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SAPPI GROUP (Sappi Limited) ANNUAL
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• the impact of future investment
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Our reporting strategy As a leading
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1 2 North America 2 4 1 San Francis
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4 Our performance in 2009 Financial
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6 Our performance against financial
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8 Our performance against sustainab
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10 Our performance against sustaina
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12 Our performance against sustaina
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14 Our sustainable business cycle T
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16 Our products 1 2 3 Coated paper
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Our objectives for 2010 Improve pro
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20 Letter to shareholders continued
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22 Letter to shareholders continued
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24 Interview with Ralph Boëttger,
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26 Our leadership Independent non-e
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28 Our leadership continued Indepen
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30 Review of operations Sappi Fine
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32 Review of operations | Sappi Fin
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34 Review of operations | Sappi Fin
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36 Review of operations Sappi Fores
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38 Review of operations | Sappi For
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40 Value added statement for the ye
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42 Chief financial officer’s repo
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62 Five-year review for the year en
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64 Share statistics at September 20
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Risk management Global economic con
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Risk philosophy The Sappi Limited b
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Independence Accountability Given t
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Fairness Social responsibility Lege
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2009 annual report 75 Induction and
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2009 annual report 77 employment of
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2009 annual report 79 board to esta
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As part of continuous improvement t
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Compensation report In 2009, the co
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Balance between fixed and variable
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Executive directors (1) Details of
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2009 annual report 89 R J Boëttger
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2009 annual report 91 Board Committ
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Auditor’s report Independent audi
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Audit committee report The legal re
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Directors’ report for the year en
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Litigation We become involved from
Page 106 and 107: Group balance sheet at September 20
Page 108 and 109: Group statement of changes in equit
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Page 112 and 113: Notes to the group annual financial
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Page 126 and 127: 2009 annual report US$ million 2009
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Page 132 and 133: 2009 annual report 9. Property, pla
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Page 152 and 153: 22. Provisions continued September
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Page 166 and 167: 29. Share-based payments continued
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Page 172 and 173: 30. Financial instruments continued
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Page 194 and 195: 2009 annual report 31. Related-part
Page 196 and 197: 2009 annual report 33. Environmenta
Page 198 and 199: Company auditor’s report for the
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Page 202 and 203: 2009 annual report Notes to the con
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not be comparable with similarly ti
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No issue and/or sale of these share
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Notes Confirmation of appointment o
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Proxy form for annual general meeti
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forward-looking statements Certain
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Our performance in 2009 - Sappi

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