Annual Financial Statements for the year ended 30 June 2021 0 - Book - Page 159
Market risk is the risk arising from possible market price movements and their impact on the future cash flows of the business. The
market price movements that the company is exposed to include foreign currency exchange rates. The company has developed
policies aimed at managing the volatility inherent in these exposures which are discussed in the risks below.
Foreign currency risk
The following significant exchange rates applied during the year:
Average rate
Rand/US dollar
Closing rate
2021
2020
2021
2020
15,40
15,69
14,28
17,33
2021
US dollar
Rm
2020
US dollar
Rm
SASOL LIMITED GROUP
CONSOLIDATED FINANCIAL STATEMENTS
Market risk
Other receivables
Other payables
Net exposure on balances between group companies
50
–
846
–
(86)
453
Total net exposure
896
367
Sensitivity analysis
The following sensitivity analysis is provided to show the foreign currency exposure of the individual entities at the end of the
reporting period. This analysis is prepared based on the statement of financial position balances that exist at year-end, for which
there is currency risk. The effect on equity is calculated as the effect on profit and loss.
A 10 percent strengthening of the rand on the company's exposure to foreign currency risk at 30 June would have increased either
the equity or the income statement by the amounts below before the effect of tax. This analysis assumes that all other variables, in
particular interest rates, remain constant and has been performed on the same basis for 2020.
2021
(90)
US dollar
2020
Income
statement
Rm
Equity
Rm
(90)
Income
statement
Rm
(37)
(37)
A 10 percent weakening in the rand against the above currency at 30 June would have the equal but opposite effect on the above
currency to the amounts shown above, on the basis that all other variables remain constant.
Interest rate risk
Fluctuations in interest rates impact on the value of short-term investments and financing activities, giving rise to interest rate risk.
Exposure to interest rate risk is particularly with reference to changes in South African interest rates.
At the reporting date, the interest rate profile of the company’s interest-bearing financial instruments was:
Carrying value before ECL
2021
Rm
2020
Rm
9 253
14 378
9 253
14 378
46 877
46 877
46 877
46 877
16:84
23:77
SASOL LIMITED COMPANY
Equity
Rm
NOTES TO THE FINANCIAL STATEMENTS
The most significant exposure of the company’s financial assets and liabilities to currency risk is as follows:
Variable rate instruments
Financial assets
Fixed rate instruments
Financial assets
OTHER
Interest profile (variable: fixed rate as a percentage of total interest bearing)
157
Sasol Annual Financial Statements 2021