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<strong>SAPPI</strong><br />
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS (Continued)<br />
for the year ended September 2010<br />
13. JOINT VENTURES AND ASSOCIATES* (Continued)<br />
2010 2009 2008<br />
(US$ million)<br />
Sales .......................................... 691 756 902<br />
Profit for the period ............................... 35 28 46<br />
Group’s share of equity investments’ profit for the period .... 13 11 17<br />
Jiangxi Chenming<br />
Sappi owns 34% of Jiangxi Chenming Paper Company Limited (Jiangxi Chenming) under a joint<br />
venture arrangement. Jiangxi Chenming is established in the People’s Republic of China and is<br />
principally engaged in the manufacturing and sales of paper and paper products. The financial<br />
statements of Jiangxi Chenming are to 31 December of each year which was the reporting date when the<br />
company was established. The last audited financials were to 31 December 2009.<br />
Umkomaas Lignin (Pty) Ltd<br />
A 50% joint venture agreement with Borregaard Industries Limited for the construction and<br />
operation of a lignin plant at Umkomaas and the development, production and sale of products based<br />
on lignosulphates in order to build a sustainable lignin business. The financial statements of Umkomaas<br />
Lignin (Pty) Ltd are to 31 December of each year which is the year end of Borregaard. The last audited<br />
financials were to 31 December 2009.<br />
Sapin S.A.<br />
A 50% joint venture with Sapin S.A. located in Belgium for the buying and selling of wood and wood<br />
chips to Sappi and other paper manufacturers. The financial statements of Sapin S.A. are to<br />
31 December of each year which is the year end of Sapin S.A. The last audited financials were to<br />
31 December 2009.<br />
Papierholz Austria GmbH<br />
A 43% joint venture agreement for the buying and selling of wood and wood chips to Sappi and<br />
other paper and pulp manufacturers. The financial statements of Papierholz Austria GmbH are to<br />
31 December of each year which is the year end of Papierholz Austria GmbH. The last audited financials<br />
were to 31 December 2009.<br />
Timber IV<br />
A special purpose entity (SPE) into which Sappi contributed promissory notes (relating to certain<br />
timberlands, equipment and machinery sold by Sappi to a third party timber company) which were<br />
pledged as collateral for the SPE to issue bonds. The SPE is not consolidated in our financial statements<br />
because we have taken the position that it is controlled by an unrelated investor which has sufficient<br />
equity capital at risk. Sappi’s investment in the SPE is US$6 million as of September 2010 (2009:<br />
US$6 million). The financial statements of Timber IV are to 30 September of each year. The results are<br />
unaudited.<br />
F-41
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