Annual Financial Statements for the year ended 30 June 2021 0 - Book - Page 112
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SASOL LIMITED GROUP
Provisions continued
33 Long-term provisions continued
The following risk-free rates were used to discount the estimated cash flows based on the underlying currency and time duration of
the obligation.
2021
%
2020
%
South Africa
4,2 to 10,3
3,6 to 9,4
Europe
United States of America
Canada
0,0 to 0,5
0,2 to 1,8
0,5 to 2,3
–
0,2 to 0,9
0,5 to 1,4
2021
Rm
2020
Rm
(4 352)
(3 836)
(1 250)
(3 102)
(2 767)
(1 069)
5 266
4 297
1 787
3 479
3 115
1 182
for the year ended 30 June
for the year ended 30 June
A 1% point change in the discount rate would have the following effect on the long-term
provisions recognised
Increase in the discount rate
amount capitalised to property, plant and equipment
income recognised in income statement
Decrease in the discount rate
amount capitalised to property, plant and equipment
expense recognised in income statement
Share Appreciation Rights scheme
All rights issued in terms of the Share Appreciation Rights scheme (SARs) have vested and will be settled in cash when exercised.
As at 30 June 2021 there were 2,2 million vested rights not yet exercised with an intrinsic value of R0 (2020: R0). The final rights
awarded under the scheme will expire in September 2022.
for the year ended 30 June
Note
34 Short-term provisions
Other provisions*
Short-term portion of
long-term provisions
post-retirement benefit obligations
33
35
2021
Rm
2020
Rm
3 370
649
1 197
497
1 048
505
5 064
2 202
* Increase mainly relates to the National Energy Regulator of South Africa's final decision on the maximum gas price methodology for Sasol Gas.
A provision of R1,4 billion was raised in this regard. Refer note 37.1. It also includes employee related provisions of approximately R950 million.
Accounting policies:
Estimated long-term environmental provisions, comprising pollution control, rehabilitation and mine closure, are based on
the group’s environmental policy taking into account current technological, environmental and regulatory requirements. The
provision for rehabilitation is recognised as and when the environmental liability arises. To the extent that the obligations relate
to the construction of an asset, they are capitalised as part of the cost of those assets. The effect of subsequent changes to
assumptions in estimating an obligation for which the provision was recognised as part of the cost of the asset is adjusted
against the asset. Any subsequent changes to an obligation which did not relate to the initial construction of a related asset
are charged to the income statement. The increase in discounted long-term provisions as a result of the passage of time is
recognised as a finance expense in the income statement.
The estimated present value of future decommissioning costs, taking into account current environmental and regulatory
requirements, is capitalised as part of property, plant and equipment, to the extent that they relate to the construction of the
asset, and the related provisions are raised. These estimates are reviewed at least annually.
Deferred tax is recognised on the temporary differences in relation to both the asset to which the obligation relates to and
rehabilitation provision.
Termination benefits are recognised as a liability at the earlier of the date of recognition of restructuring costs or when the group
is demonstrably committed, without realistic possibility of withdrawal, to a formal detailed plan to either terminate employment
before normal retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary
redundancy. In the case of an offer to encourage voluntary redundancy, the termination benefits are measured based on the
number of employees expected to accept the offer. Benefits that are expected to be wholly settled more than 12 months after the
end of the reporting period are discounted to their present value.
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Sasol Annual Financial Statements 2021