SAPPI LIMITED

SAPPI
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS (Continued)
for the year ended September 2010
11. DEFERRED TAX (Continued)
Secondary Tax on Companies (STC)
Current and deferred tax are measured at the tax rate applicable to undistributed income and
therefore only take STC into account to the extent that dividends have been received or declared.
2010 2009
(US$ million)
Undistributed earnings that would be subject to STC ........... 484 465
Tax effect if distributed ................................. 44 42
12. GOODWILL AND INTANGIBLE ASSETS
2010 2009
Licence Licence
Goodwill fees Patents Brands Total Goodwill
(US$ million)
fees Patents Brands Total
Net carrying amount at
beginning of year ..... 4 3 — 25 32 4 3 — — 7
Acquisitions ........... — — — — — — — — 25 25
Amortization ........... — — — (2) (2) — — — (2) (2)
Translation difference .... — — — (3) (3) — — — 2 2
Net carrying amount .....
Cost (gross carrying
4 3 — 20 27 4 3 — 25 32
amount) ............
Accumulated amortization
4 3 20 24 51 4 3 21 27 55
and impairment ....... — — (20) (4) (24) — — (21) (2) (23)
Net carrying amount ..... 4 3 — 20 27 4 3 — 25 32
13. JOINT VENTURES AND ASSOCIATES*
2010 2009
(US$ million)
Cost of equity investments ............................... 96 99
Share of post-acquisition profit, net of distributions received ....... 8 24
Foreign currency translation effect ......................... 21 —
Summarised financial information in respect of the group’s equity
investments is set out below:
125 123
Total assets ......................................... 640 638
Total liabilities ........................................ 298 312
Net assets .......................................... 342 326
Group’s share of equity investments’ net assets ............... 125 123
* Where the year ends of joint ventures and associates are different to Sappi’s, the unaudited management accounts of the
joint ventures and associates are used for the periods to Sappi’s year end.
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