2006 20-F - Sappi

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SAPPI NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS (Continued) 2. ACCOUNTING POLICIES (Continued) for the year ended September 2006 The option of setting the corridor to zero was not applicable because the Group elected to apply SORIE accounting to acturial gains and losses. (e) Property, Plant and Equipment—IAS16 Changes to IAS 16 Property, Plant and Equipment include the requirement that the useful lives of fixed assets are re-evaluated on an annual basis, changed capitalisation criteria and more explicit guidance on the capitalisation of fixed assets. These changes have led to the revision of the relevant accounting policies. In addition a detailed review of the group’s assets including a benchmarking exercise against peergroup companies was completed. Management concluded that no adjustment to the carrying value of property, plant and equipment was necessary with the first-time adoption of IFRS. The Group did not apply the exemption to deem the fair value or revalued amounts of property, plant and equipment as deemed cost due to the previous accounting standard being consistently applied. Effect of IFRS adoption on group income statement September September note 2005 Effect of 2005 Previous SA GAAP transition to IFRS US$ million IFRS Sales................................................... 5,018 — 5,018 Cost of sales ............................................ a,d 4,514 (7 ) 4,507 Gross profit............................................. 504 7 511 Selling, general and administrative expenses................. a,c,d 382 (21 ) 361 Other operating expenses................................. 259 — 259 Operating loss........................................... (137) 28 (109) Net finance costs ........................................ 87 (7 ) 80 Finance costs.......................................... c 146 15 161 Finance revenue....................................... (36) — (36) Interest capitalised..................................... (1) — (1) Net foreign exchange gains.............................. (5) — (5) Net fair value gain on financial instruments............... c (17) (22) (39) Loss before taxation...................................... (224) 35 (189) Taxation benefit......................................... c,d (11) 6 (5) Loss for the year......................................... (213) 29 (184) F-40
SAPPI NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS (Continued) 2. ACCOUNTING POLICIES (Continued) Reconciliation of previous SA GAAP to IFRS loss for the year ended September 2006 F-41 note September 2005 US$ million Loss under SA GAAP ........................................................ (213) Share-based payment expense—IFRS 2 ........................................ a (10) Reduction in expense due to recognition of actuarial gains and losses—IAS 19 . . . . . . d 23 Deferred taxation impact of IAS 19............................................ 1 Gains from cash flow hedges that do not qualify for hedge accounting—IAS 39 . . . . . . c 22 Deferred taxation impact of IAS 39............................................ (7) Loss under IFRS ............................................................ (184)
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As filed with the Securities and Ex
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OUR USE OF TERMS AND CONVENTIONS IN
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FORWARD-LOOKING STATEMENTS In order
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2 Year Ended September 2006 2005 (U
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Risk Factors In addition to other i
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New technologies or changes in cons
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Several customers account for a sig
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Maintain a global presence. One of
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Major Product Categories Descriptio
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market share was negatively affecte
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The chart below represents the oper
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The following table sets forth appr
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Paper North America’s on-line fin
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of 860,000 metric tonnes of triple-
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a capacity of 60,000 metric tonnes
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customers use our products in the p
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(1) The following table sets forth
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The mill markets paper and excess p
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Pulp Sappi Fine Paper North America
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equired for its operations. Sappi F
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• The National Environmental Mana
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PROPERTY, PLANT AND EQUIPMENT For a
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ITEM 5. OPERATING AND FINANCIAL REV
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) Movement in market prices for our
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The recent price history for benchm
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Demand from all of the market segme
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Raw Material and Other Input Costs
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The exchange rate impact on raw mat
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Our South African businesses have f
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• Any debtors or creditors not in
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Year Ended September 2006 Compared
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US$28 million. Decreased selling pr
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enefit of the reversal of the Usutu
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accounting mismatch, as a result of
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South African residents, who are na
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The increase of US$11 million in fi
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June 2010. The OeKB A tranche and t
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impact on liquidity varies accordin
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Contractual Obligations We have var
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mill is located in Nanchang, the ca
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product pricing, raw material costs
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flows of the related underlying exp
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increases, health care cost trends,
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alance sheet date. Risks, uncertain
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If the Group had applied IFRS 3 ret
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IFRS. The Group did not apply the e
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Where BEE equity credentials are ob
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Environmental Matters We operate in
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Klaas de Kluis (70) (independent).
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Mark Richard Thompson (54) BCom, BA
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Audit Committee An Audit Committee
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estructuring initiatives that occur
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Levies Act, was paid via Internal R
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Pursuant to the Companies Amendment
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on Restitution of Land Rights and a
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(“the Depositary”) with respect
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• any proposal concerning the ado
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Voting Rights Subject to any rights
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equest not less than one-twentieth
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Financial Assistance The Bill enhan
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At the Annual General Meeting of Sh
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African shareholders will be paid t
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purpose of Capital Gains Tax in Sou
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Page 135 and 136: ITEM 16E. PURCHASES OF EQUITY SECUR
Page 137 and 138: 4.10 Credit Facility, dated May 7,
Page 139 and 140: SAPPI Group Annual Financial Statem
Page 141 and 142: SAPPI GROUP INCOME STATEMENT for th
Page 143 and 144: SAPPI GROUP CASH FLOW STATEMENT for
Page 145 and 146: 1. BUSINESS SAPPI NOTES TO THE GROU
Page 147 and 148: SAPPI NOTES TO THE GROUP ANNUAL FIN
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SAPPI NOTES TO THE GROUP ANNUAL FIN
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SAPPI CONDENSED COMPANY BALANCE SHE
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SAPPI CONDENSED COMPANY STATEMENT O
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5. OTHER INCOME 2006 2005 ZAR milli
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2006 20-F - Sappi

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