Annual Financial Statements for the year ended 30 June 2021 0 - Book - Page 66
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SASOL LIMITED GROUP
Reporting Segments continued
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Going concern
Introduction
In determining the appropriate basis of preparation of the annual financial statements, the directors are required to consider
whether the Sasol Group (Group) and Sasol Limited (Company) can continue in operational existence for the foreseeable future.
Solvency and Liquidity
Solvency
At 30 June 2021, after impairments, the valuations of the Group’s assets indicate that their recoverable amount exceed their
carrying values as well as the external debt. The asset base of the Group comprises mainly tangible assets with significant value,
reflected in the records of the underlying businesses.
As such, the Board is of the view that given the sufficient headroom in the recoverable amount of the assets over the fair value
of the liabilities (including contingent liabilities), the Group is solvent as at 30 June 2021 and at the date of this report.
At 30 June 2021, the balance sheet saw an improvement in the gearing at 61,5% (30 June 2020: 117%) and Net debt: EBITDA
of 1,5 times (30 June 2020: 4,3 times) (based on the Revolving Credit facility and US dollar term loan covenant definition),
well below the re-instated June 2021 covenant level of 3,0 times. The Group is targeting Net debt: EBITDA to remain within
our covenant levels in the foreseeable future. The Group will achieve this through cash generated from operations as well as
proceeds from the accelerated asset divestment programme.
Liquidity management
At 30 June 2021, the Group had cash and cash equivalents of R31,0 billion, (30 June 2020: R34,1 billion) and available facilities of
R54,7 billion, (30 June 2020: R10,5 billion).
Increased cash generation, through delivery of Sasol’s self-help measures and asset disposals contributed to balance sheet
deleveraging and complying with debt covenant levels at 30 June 2021.
Conclusion
The events and conditions described above indicate considerable improvement in the liquidity position of the Group at
30 June 2021 compared to 30 June 2020.
Based on the above, the Directors are therefore of the opinion that the going concern assumption is appropriate in the
preparation of the consolidated and separate financial statements.
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Sasol Annual Financial Statements 2021