SAPPI LIMITED

SAPPI
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS (Continued)
for the year ended September 2010
2. ACCOUNTING POLICIES (Continued)
– IAS 24 Related Party Disclosures—Revised definition of related parties (September 2012)
– IAS 32 Financial Instruments: Presentation—Amendments relating to classification of rights
issues (September 2011)
– IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments (September 2011)
– Various improvements to IFRSs
3. SEGMENT INFORMATION
Sappi adopted IFRS 8 ‘‘Operating Segments’’ in fiscal 2010. The adoption of this standard did not
have an impact on the group’s reported results, financial position or cash flows.
IFRS 8 requires an entity to report financial and descriptive information about its reportable
segments. The group’s reportable segments are North America, Europe and Sappi Southern Africa.
Reportable segments are components of an entity for which separate financial information is available
that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources
and assess performance. Prior year segment disclosure has been revised as reflected below.
Sappi reports and discloses segment information on the basis of information that is reviewed by the
chief operating decision maker to make decisions when allocating resources and to assess
performance of the group’s reportable segments. Information reported to the chief operating decision
maker for the purpose of resource allocation and assessment of segment performance is focused on a
geographical region. The group accounts for intra-group sales and transfers as if the sales or transfers
were to third parties, that is, at current market prices. All such sales and transfers are eliminated on
consolidation.
The group operates a trading network called Sappi Trading for the international marketing and
distribution of chemical cellulose and market pulp throughout the world and of the group’s other
products in areas outside its core operating regions of North America, Europe and Southern Africa. The
financial results and position associated with Sappi Trading are allocated to our reportable segments.
Revised segmental reporting disclosure
Prior to the adoption of IFRS 8, the Sappi Fine Paper segment included the group’s fine paper
operations in southern Africa. Sappi has since changed the structure of its internal organization in a
manner that has caused the composition of its reportable segments to change such that Sappi Fine
Paper South Africa is now reported as part of the Sappi Southern African segment in accordance with the
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