Annual Financial Statements for the year ended 30 June 2021 0 - Book - Page 65
SASOL LIMITED GROUP
CONSOLIDATED FINANCIAL STATEMENTS
As a result of the Phase 2 amendments:
• When the contractual terms of the group’s borrowings are amended as a direct consequence of the interest rate benchmark
reform and the new basis for determining the contractual cash flows is economically equivalent to the basis immediately
preceding the change, the group changes the basis for determining the contractual cash flows prospectively by revising
the effective interest rate. If additional changes are made, which are not directly related to the reform, the applicable
requirements of IFRS 9 are applied to the other amendments.
• When changes are made to the hedging instruments, hedged item and hedged risk as a result of the interest rate benchmark
reform, the group will update the hedge documentation without discontinuing the hedging relationship and the cumulative
gain or loss in the cash flow hedge accounting reserve will be deemed to be based on the alternative benchmark rate.
The group is still assessing its approach to implementing the transition. As at 30 June 2021 no modifications to any of the group’s
derivative or non-derivative financial instruments have been made in response to the reform. Negotiations with counterparties
on appropriate changes and resetting of rates are expected to continue in the following months. Management expects that the
transition will be concluded on an economically equivalent basis.
Financial liabilities measured at amortised cost
US$ term loan
US$ Revolving credit facility
Interest rate swap
Furthermore, the Financial Stability Board has initiated a fundamental review and reform of the major interest rate benchmarks
tasked globally by financial market participants. This review seeks to replace existing interbank offered rates (IBORs) with alternative
risk-free rates (ARRs) to improve market efficiency and mitigate systemic risk across financial markets. The South African Revenue
Bank ("SARB") has indicated their intention to move away from Johannesburg Interbank Average Rate (JIBAR) and to create an
alternative reference rate for South Africa. This reform is at various stages globally, a suitable alternative for South Africa is only
expected to be announced in a few years’ time. Accordingly, there is uncertainty surrounding the timing and manner in which the
transition would occur and how this would affect various financial instruments held by the group. Management is monitoring
developments in this reform.
NOTES TO THE FINANCIAL STATEMENTS
The following table contains details of all of our financial instruments at 30 June 2021 which reference the US LIBOR and have not yet
transitioned to an alternative interest rate benchmark:
The following amendments to IFRS were mandatorily effective for the first time from 1 July 2020:
• Amendments to IFRS 3 ‘Business Combinations’ on the definition of a ‘business’; and
Amendments to IAS 1 ‘Presentation of Financial Statements’ and IAS 8 ‘Accounting Policies, Changes in Accounting Estimates
and Errors’ on the definition of ‘material’.
The following amendments to IFRS were early adopted by the group effective from 1 July 2020:
Amendments to IFRS 16 ‘Leases’ to extend the optional relief with regards to COVID-19-related rent concessions;
Amendments to IAS 1 ‘Presentation of Financial Statements’ and IFRS Practice Statement 2 with regards to the disclosure of
Amendments to IAS 8 ‘Accounting Policies, Changes in Accounting Estimates and Errors’ relating to the definition of
‘accounting estimates’; and
Amendments to IAS 12 ‘Income Taxes’ relating to deferred tax on assets and liabilities arising from a single transaction.
SASOL LIMITED COMPANY
The adoption of these amendments had no material impact on the consolidated financial statements.
Accounting standards, interpretations and amendments not yet effective
IFRS 17 ‘Insurance Contracts’
IFRS 17 requires insurance liabilities to be measured at a current fulfilment value and provides a more uniform measurement and
presentation approach for all insurance contracts. IFRS 17 supersedes IFRS 4 ‘Insurance Contracts’. IFRS 17 is effective for the group
from 1 July 2023, will be applied prospectively and is not expected to significantly impact the group.
The amendments provide guidance on the classification of liabilities as current or non-current in the statement of financial position
and does not impact the amount or timing of recognition of any asset, liability income or expenses, or the information that entities
disclose about those items. They clarify that the classification of liabilities as current or non-current should be based on rights that
are in place at the end of the reporting period which enable the reporting entity to defer settlement by at least twelve months. The
amendments further make it explicit that classification is unaffected by expectations about whether an entity will exercise its right
to defer settlement of a liability. The amendments are effective for the group from 1 July 2023, will be applied retrospectively and are
not expected to significantly impact the group.
Sasol Annual Financial Statements 2021
Amendments to IAS 1 ‘Presentation of Financial Statements’