SAPPI LIMITED

TABLE OF CONTENTS
Our Use of Terms and Conventions in this Annual Report ........................... iv
Accounting Periods and Principles ............................................ v
Currency of Presentation and Exchange Rates ................................... v
Forward-Looking Statements ................................................ v
PART I
Item 1. Identity of Directors, Senior Management and Advisers .................... 1
Item 2. Offer Statistics and Expected Timetable ............................... 1
Item 3. Key Information ................................................ 1
Selected Financial Data ....................................... 1
Risk Factors ................................................ 3
Item 4. Information on the Company ....................................... 14
History and Development of the Company .......................... 14
Business Overview ........................................... 15
Sappi Fine Paper ............................................ 24
Sappi Southern Africa ......................................... 32
Supply Requirements ......................................... 38
Environmental and Safety Matters ................................ 43
Organizational Structure ....................................... 47
Property, Plant and Equipment .................................. 48
Item 4A. Unresolved Staff Comments ........................................ 49
Item 5. Operating and Financial Review and Prospects .......................... 50
Company and Business Overview ................................ 50
Principal Factors Impacting our Group Results ....................... 51
Markets ................................................... 53
Currency Fluctuations ......................................... 58
Inflation and Interest Rates ..................................... 60
South African Economic and Political Environment .................... 61
Environmental Matters ........................................ 64
Operating Results ............................................ 64
Liquidity and Capital Resources .................................. 82
Off-Balance Sheet Arrangements ................................. 94
Contractual Obligations ........................................ 95
Research and Development, Patents and Licenses, etc. ................ 96
Share Buy Backs ............................................ 98
Dividends .................................................. 98
Mill Closures, Acquisitions, Dispositions, Impairment, Joint Venture and Broad
Based Black Economic Empowerment ........................... 98
Pensions and Post-retirement Benefits Other than Pensions .............. 100
Insurance .................................................. 102
Critical Accounting Policies and Estimates .......................... 102
Adoption of Accounting Standards in Fiscal 2010 ..................... 107
Item 6. Directors, Senior Management and Employees .......................... 109
Directors and Senior Management ................................ 109
Compensation .............................................. 117
Board Practices ............................................. 117
Corporate Governance ........................................ 118
Employees ................................................. 119
Share Ownership ............................................ 122
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