SAPPI LIMITED

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Risks Related to Our Shares Your ability to sell a substantial number of ordinary shares may be restricted by the limited liquidity of shares traded on the JSE Limited. The principal trading market for our ordinary shares is on the exchange operated by the JSE Limited (‘‘JSE’’) (formerly known as the Johannesburg Stock Exchange). Historically, trading volumes and liquidity of shares listed on the JSE have been low in comparison with other major international markets. In fiscal 2010, 467 million of our ordinary shares were traded on the JSE and 11 million ADSs were traded on the New York Stock Exchange. The relatively low liquidity of shares traded on JSE Limited could affect your ability to sell ordinary shares. See ‘‘Item 7—Major Shareholders and Related Party Transactions— Major Shareholders’’, ‘‘Item 9—The Offer and Listing—Offer and Listing Details’’ and ‘‘Item 9—The Offer and Listing—Markets’’. Significant shareholders may be able to influence the affairs of our Company. Although our investigation of beneficial ownership of our shares identified only one beneficial owner of more than 5% of our ordinary shares, holding approximately 11.9%, as shown in our shareholders’ register on October 1, 2010, the four largest shareholders of record, all of which are nominees that hold shares for a multitude of beneficial owners, owned approximately 90.1% of our ordinary shares as of September 23, 2010. These significant potential voting blocks of nominee registered shareholders may have the power to influence voting decisions for the shares they hold. See ‘‘Item 7—Major Shareholders and Related Party Transactions—Major Shareholders’’. Risks Related to Our Indebtedness To service our other indebtedness, we will require a significant amount of cash, and our ability to generate cash will depend on many factors beyond our control. Our ability to make payments on our indebtedness, and to refinance our indebtedness, and to fund planned capital expenditures and working capital requirements will partly depend on our ability to generate cash in the future. This ability is, to a certain extent, subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. See ‘‘—Risks Related to Our Industry’’ and ‘‘—Risks Related to Our Business’’. We cannot assure you that we will generate sufficient cash flow from operations, that we will realize operating improvements on schedule or that future borrowings will be available to us in an amount sufficient to enable us to service and repay our indebtedness or to fund our other liquidity needs. If we are unable to satisfy our debt obligations, we may have to undertake alternative financing plans, such as refinancing or restructuring our indebtedness, selling assets, reducing or delaying capital investments or seeking to raise additional capital. We cannot assure you that any refinancing or debt restructuring would be possible, that any assets could be sold or that, if sold, the timing of the sales and the amount of proceeds realized from those sales, or that additional financing could be obtained on acceptable terms. Some of our credit facilities contain covenants that restrict some of our corporate activities, including our ability to: make acquisitions or investments; make loans or otherwise extend credit to others; incur indebtedness or issue guarantees; create security; sell, lease, transfer or dispose of assets; 12
merge or consolidate with other companies; and make substantial changes to the general nature of our business. In addition, certain of our credit facilities require us to comply with certain covenants and specified financial covenants and ratios. Our ability to comply with these covenants and restrictions may be affected by events beyond our control. These include prevailing economic, financial and industry conditions. If we breach any of these covenants or restrictions, we could be in default under the credit facilities and other indebtedness. This would permit the lending banks under our credit facilities to take certain actions, including declaring all amounts that we have borrowed to be due and payable, together with accrued and unpaid interest. The lending banks could also refuse to extend further credit under their facilities. If we are unable to repay our debt to the lending banks, they could proceed against any collateral that secures the debt under the credit facilities. If we are unable to make payments on time or refinance our indebtedness, or if our debt or any other material financing arrangement that we enter into is accelerated, this could have a material adverse effect on our business and financial condition. 13
Page 1 and 2: As filed with the Securities and Ex
Page 3 and 4: Item 7. Major Shareholders and Rela
Page 5 and 6: References to ‘‘NBSK’’ are
Page 7 and 8: PART I ITEM 1. IDENTITY OF DIRECTOR
Page 9 and 10: Risk Factors In addition to other i
Page 11 and 12: For further information, see ‘‘
Page 13 and 14: terms of the debt being refinanced.
Page 15 and 16: The inability to recover increasing
Page 17: A large percentage of our employees
Page 21 and 22: we operate. The transaction was app
Page 23 and 24: currencies as we can benefit from i
Page 25 and 26: Major Product Categories Pulp: Desc
Page 27 and 28: for coated mechanical paper decline
Page 29 and 30: The chart below represents our oper
Page 31 and 32: The following table sets out the ap
Page 33 and 34: The following table sets forth sale
Page 35 and 36: Kangas. As a direct result of the g
Page 37 and 38: Customers Sappi Fine Paper sells it
Page 39 and 40: The following chart sets forth cert
Page 41 and 42: Construction on the expansion proje
Page 43 and 44: lease extendable to 2089. The locat
Page 45 and 46: North America Wood In connection wi
Page 47 and 48: Pulp Sappi Fine Paper Europe produc
Page 49 and 50: ENVIRONMENTAL AND SAFETY MATTERS En
Page 51 and 52: and management of forests are all r
Page 53 and 54: ORGANIZATIONAL STRUCTURE Sappi Limi
Page 55 and 56: Approximate Secured / Location Use
Page 57 and 58: than we use. By region, the South A
Page 59 and 60: ‘‘—Markets’’ for a furthe
Page 61 and 62: '000 metric tonnes 8,000 7,000 6,00
Page 63 and 64: The price of NBSK and Bleached Hard
Page 65 and 66: ZAR/US$ 16.00 14.00 12.00 10.00 8.0
Page 67 and 68: The fiscal period average three-mon
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employees from the beginning of 200
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The Sappi Southern Africa reportabl
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Movements in operating profit and o
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Operating profit in fiscal 2009 was
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Sappi Southern Africa Key figures:
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Comparing fiscal 2010 with fiscal 2
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This comparison includes the closur
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African operations into the US doll
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Sappi Fine Paper North America Comp
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Taxation 2010 2009 (US$ million) 20
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elation to inventory levels and rec
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Capital expenditure by region is as
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Over the past three years the relat
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Group’s securitization programs,
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Credit Facility terminate on May 31
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quarters ending from January 2012 t
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As no default event has occurred, n
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In addition, Sappi Fine Paper North
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areas where our South African busin
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Recoveries in equity markets couple
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Impairment of assets other than goo
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The gains or losses, which are reco
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The Group’s policy is to recogniz
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ITEM 6. DIRECTORS, SENIOR MANAGEMEN
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Deenadayalen (Len) Konar Sappi boar
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Mohammed Valli (Valli) Moosa Other
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Rudolf Thummer Sappi board committe
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Executive Officers The Executive Di
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companies have to comply with domes
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average more than 45% of the employ
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For a detailed description of the S
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Pursuant to the Companies Amendment
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Post transaction shareholding struc
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Dividends We consider dividends on
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ITEM 9. THE OFFER AND LISTING Offer
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ITEM 10. ADDITIONAL INFORMATION Mem
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holder of the beneficial interest i
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Voting Rights Subject to any rights
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provision of the New Act by any oth
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South African Companies Act, 2008 A
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state securities laws. The securiti
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documents are the agent for the new
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Dividends There are no restrictions
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STC STC is imposed on South African
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with any connected persons) held mo
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of our ordinary shares or ADSs, as
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of gain recognized on a sale or oth
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integrated operations could be adve
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PART II ITEM 13. DEFAULTS, DIVIDEND
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(d) Changes in Internal Control ove
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PART III ITEM 17. FINANCIAL STATEME
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4.13 Credit Agreement, dated August
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SIGNATURES The registrant hereby ce
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REPORT OF THE INDEPENDENT REGISTERE
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SAPPI GROUP STATEMENT OF COMPREHENS
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SAPPI GROUP CASH FLOW STATEMENT for
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SAPPI NOTES TO THE GROUP ANNUAL FIN
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10. PLANTATIONS SAPPI NOTES TO THE
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22. PROVISIONS SAPPI NOTES TO THE G
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SAPPI CONDENSED SAPPI LIMITED COMPA
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SAPPI NOTES TO THE CONDENSED SAPPI
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SAPPI LIMITED

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