Our performance in 2009 - Sappi

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Glossary General definitions bleached pulp – pulp that has been bleached by means of chemical additives to make it suitable for fine paper production chemical cellulose – highly purified chemical pulp intended primarily for conversion into chemical derivatives of cellulose and used mainly in the manufacture of viscose staple fibre, solvent spin fibre and filament chemical pulp – a generic term for pulp made from wood fibre that has been produced in a chemical process coated fine paper – coated paper made from chemical pulp. Also referred to as coated free sheet coated papers – papers that contain a layer of coating material on one or both sides. The coating materials, consisting of pigments and binders, act as a filler to improve the printing surface of the paper coated mechanical – coated paper made from groundwood pulp which has been produced in a mechanical process, primarily used for magazines, catalogues and advertising material coated woodfree – coated paper made from chemical pulp which is made from wood fibre that has been produced in a chemical process, primarily used for high end publications and advertising material corrugating medium – paperboard made from chemical and semi-chemical pulp, or waste paper, that is to be converted to a corrugated board by passing it through corrugating cylinders. Corrugating medium between layers of linerboard form the board from which corrugated boxes are produced COSO – the Committee of Sponsoring Organisations of the Treadway Commission fibre – fibre is generally referred to as pulp in the paper industry. Wood is treated chemically or mechanically to separate the fibres during the pulping process fine paper – paper usually produced from chemical pulp for printing and writing purposes and consisting of coated and uncoated paper FSC – in terms of the Forest Stewardship Council (FSC) scheme, there are two types of certification. In order for land to achieve FSC endorsement, its forest management practices must meet the FSC’s ten principles and other assorted criteria. For manufacturers of forest products, including paper manufacturers like Sappi, Chain-of-Custody certification involves independent verification of the supply chain, which identifies and tracks the timber through all stages of the production process from the tree farm to the end product Greenhouse gases (GHGs) – the GHGs included in the Kyoto Protocol are carbon dioxide, methane, nitrous oxide, hydro- fluorocarbons, perfluorocarbons and sulphur hexafluoride ISO – developed by the International Standardisation Organi- sation (ISO), ISO 9000 is a series of standards focused on 2009 annual report 199 quality management systems, while the ISO 14001 series is focused on environmental performance and management JSE Limited – the main securities exchange in South Africa, previously known as the Johannesburg Stock Exchange kraft paper – packaging paper (bleached or unbleached) made from kraft pulp kraft pulp – chemical wood pulp produced by digesting wood by means of the sulphate pulping process Kyoto Protocol – a document signed by over 160 countries at Kyoto, Japan in December 1997 which commits signatories to reducing their emission of greenhouse gases relative to levels emitted in 1990 Lost Time Injury Rate (LTIFR) Frequency = number of lost time injuries x 200,000 manhours linerboard – the grade of paperboard used for the exterior facings of corrugated board. Linerboard is combined with corrugating medium by converters to produce corrugated board used in boxes market pulp – pulp produced for sale on the open market, as opposed to that produced for own consumption in an integrated mill mechanical pulp – pulp produced by means of the mechanical grinding or refining of wood or wood chips NBSK – Northern Bleached Softwood Kraft pulp. One of the main varieties of market pulp, produced from coniferous trees (ie spruce, pine) in Scandinavia, Canada and northern USA. The price of NBSK is a benchmark widely used in the pulp and paper industry for comparative purposes newsprint – paper produced for the printing of newspapers mainly from mechanical pulp and/or recycled waste paper OHSAS – is an international health and safety standard aimed at minimising occupational health and safety risks firstly, by conducting a variety of analyses and secondly, by setting standards packaging paper – paper used for packaging purposes PEFC – the world’s largest forest certification system, the PEFC is focused on promoting sustainable forest management. Using multi-stakeholder processes, the organisation develops forest management certification standards and schemes which have been signed by 37 nations in Europe and other intergovernmental processes for sustainable forestry management around the world pulpwood – wood suitable for producing pulp – usually not of sufficient standard for saw-milling release paper – embossed paper used to impart design in polyurethane or polyvinyl chloride plastic films for the production of synthetic leather and other textured surfaces. The term also applies to backing paper for self adhesive labels financials
200 Glossary continued sackkraft – kraft paper used to produce multiwall paper sacks silviculture costs – growing and tending costs of trees in forestry operations speciality paper – a generic term for a group of papers intended for commercial and industrial use such as flexible packaging, metallised base paper, coated bag paper, etc thermo-mechanical pulp – pulp produced by processing wood fibres using heat and mechanical grinding or refining wood or wood chips tons – term used in this report to denote a metric ton of 1,000kg uncoated woodfree paper – printing and writing paper made from bleached chemical pulp used for general printing, photocopying and stationery, etc. Referred to as uncoated as it does not contain a layer of pigment to give it a coated surface woodfree paper – paper made from chemical pulp General financial definitions acquisition – the acquisition of M-real’s coated graphic paper business on 31 December 2008 acquisition date – the date on which control in respect of subsidiaries, joint control in joint ventures and significant influence in associates commences associate – an entity, other than a subsidiary or joint venture, over which the group has significant influence over financial and operating policies basic earnings per share – net profit for the year divided by the weighted average number of shares in issue during the year commissioning date – the date that an item of property, plant and equipment, whether acquired or constructed, is brought into use control – the ability, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain economic benefit from its activities. When assessing the ability to control an entity, the existence and effect of potential voting rights that are presently exercisable or convertible are taken into account diluted earnings per share – is calculated by assuming conversion or exercise of all potentially dilutive shares, share options and share awards unless these are anti-dilutive discount rate – the rate used for purposes of determining discounted cash flows. This pre-tax interest rate reflects the current market assessment of the time value of money. In determining the cash flows the risks specific to the asset or liability are taken into account in determining those cash flows and are not included in determining the discount rate disposal date – the date on which control in respect of subsidiaries, joint control in joint ventures and significant influence in associates ceases fair value – the value for which an asset could be exchanged or a liability settled in a market related transaction financial results – comprise the financial position (assets, liabilities and equity), results of operations (revenue and expenses) and cash flows of an entity and of the group functional currency – the currency of the primary economic environment in which the entity operates foreign operation – an entity whose activities are based or conducted in a country or currency other than that of the reporting entity group – the group comprises Sappi Limited, its subsidiaries and its interest in joint ventures and associates joint venture – an economic activity over which the group exercises joint control established under a contractual arrangement operation – a component of the group: • that represents a separate major line of business or geographical area of operation; and • is distinguished separately for financial and operating purposes presentation currency – the currency in which financial results of an entity are presented qualifying asset – an asset that necessarily takes a substantial period (normally in excess of six months) to get ready for its intended use recoverable amount – the amount that reflects the greater of the net selling price and the value in use that can be attributed to an asset as a result of its ongoing use by the entity. In determining the value in use, expected future cash flows are discounted to their present values using the discount rate related party – parties are considered to be related if one party directly or indirectly has the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions or is a member of the key management of Sappi Limited share-based payment – a transaction in which Sappi Limited issues shares or share options to group employees as compensation for services rendered significant influence – the ability, directly or indirectly, to participate in, but not exercise control over, the financial and operating policy decisions of an entity so as to obtain economic benefit from its activities Non-GAAP financial definitions The group believes that it is useful to report these non-GAAP measures for the following reasons: • these measures are used by the group for internal performance analysis; • the presentation by the group’s reported business segments of these measures facilitates comparability with other companies in our industry, although the group’s measures may
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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
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Group balance sheet at September 20
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Group statement of changes in equit
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Group balance sheet in Rands conven
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Notes to the group annual financial
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• Financial assets and financial
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2.2.10 Non-current assets held for
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(iii) Dividends Dividends are recog
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uyer and seller) multiple used in o
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2.4 Adoption of accounting standard
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Corporate and eliminations Group 20
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2009 annual report US$ million 2009
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6. Taxation (benefit) charge contin
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7. Earnings per share and headline
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2009 annual report 9. Property, pla
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US$ million 2009 annual report 2009
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13. Joint ventures and associates*
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16. Trade and other receivables con
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2009 annual report 17. Ordinary sha
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20. Interest-bearing borrowings con
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2009 annual report 20. Interest-bea
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22. Provisions continued September
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Our performance in 2009 - Sappi

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