Annual Financial Statements for the year ended 30 June 2021 0 - Book - Page 5
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SASOL LIMITED GROUP
REPORT OF THE AUDIT COMMITTEE
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Maintaining a sound control
environment was paramount
for the Audit Committee as the
group undertook a substantial
reorganisation.
SASOL LIMITED GROUP
CONSOLIDATED FINANCIAL STATEMENTS
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Colin Beggs
Chairman of the Audit Committee
Introduction
In 2021, the Audit Committee (the Committee) faced with the
ongoing unprecedented circumstances caused by the COVID-19
pandemic, continued to monitor the integrity of financial reporting
systems and disclosures through the review of judgements,
estimates and accounting for significant transactions.
Areas of special focus that the Committee provided oversight on
included:
• The Sasol 2.0 transformation programme to enable the
repositioning of the business. This programme commenced
in financial year 2021, together with the introduction of a new
operating model consisting of a global chemicals business and a
Southern Africa energy business, supported by a lean corporate
centre. The transition to this new operating model commenced
on 1 November 2020. As a consequence of the change in
operating model, the business segments were refined and the
Committee reviewed the restated segment results;
• Management’s conclusion on going concern through a review
of their assessment on liquidity, the debt covenants and
arrangements held with financial institutions and the financial
leverage of the Company. At 30 June 2021, the balance sheet
saw a significant improvement in the gearing at 61,5% and Net
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• Reviewed the judgement applied by management on accounting
matters, considering the volatility and uncertainty of the current
environment, particularly as it relates to the impairment and
recoverability of the carrying value of assets;
• Reviewed management’s conclusion on the R1,4 billion provision
relating to the retrospective application of the National Energy
Regulator (NERSA) ruling on the maximum gas price. NERSA
published a final decision on the maximum gas prices for Sasol
Gas (Pty) Ltd, a subsidiary of Sasol South Africa Limited, on
6 July 2021, which determines the maximum prices for piped-gas
sold in South Africa;
• Oversight of the process relating to material asset disposals
including the accounting implications. During the year disposals
relating to 50% of the US LCCP Base Chemical assets, our
interest in Gemini HDPE LLC, 16 of our Air Separation units, our
Gabon exploration assets and other smaller disposals were
concluded;
• Concluding on the material weakness related to the LCCP.
In relation to the project cost overruns identified during
the FY19 financial year, the Committee concluded that the
remediation efforts have been successful in addressing the
material weakness; and
• Accounting provisions made relating to environmental
regulatory requirements.
SASOL LIMITED COMPANY
▪ Oversight of the Sasol 2.0 transformation programme and
repositioning the business
▪ Assessing management conclusion regarding going
concern assumption, including financial liquidity risks and
balance sheet management
▪ Considering accounting matters, with specific focus on
management’s conclusions on the recoverable value of
assets
▪ Assessing management’s conclusion on the NERSA
maximum gas price provision
▪ Resolution on accounting and control environment
matters relating to Lake Charles Chemical Project (LCCP)
▪ Oversight on significant asset disposals including 50% of
the US LCCP Base Chemical business
▪ Assessing the accounting impact of increasing
environmental regulatory pressures on Sasol’s operations
▪ Oversight and mandate support for hedging activities
debt: EBITDA of 1,5 times, well below the re-instated June 2021
covenant level of 3,0 times. The Committee oversaw the issue of
bonds of US$1,5 billion (R21,4 billion) in the US capital market;
In responding to these challenges during 2021, the Committee
reviewed all significant financial risks and associated appetite
statements and metrics and assessed the adequacy of controls
and the combined assurance provided over these identified risks.
It monitored the effectiveness of the control environment through
the review of reports from internal audit, management and the
external auditor, and ensured the quality of financial reporting
through review of the interim financial statements and the 2021
annual financial statements.
The Committee is responsible for overseeing the:
• Quality and integrity of the Company’s integrated reporting,
including its financial statements and public announcements in
respect of the financial results;
• Appointment, remuneration, independence and performance
of the external auditor and the integrity of the audit
process, including the approval of non-audit services by the
external auditor;
Sasol Annual Financial Statements 2021
OTHER
FOCUS AREAS
NOTES TO THE FINANCIAL STATEMENTS
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