Annual Financial Statements for the year ended 30 June 2021 0 - Book - Page 9
• Computation of the
• The Committee reviewed the
Group’s Income tax
judgements exercised on tax
expense and liability,
provisions as part of its annual review
provisions for potential tax
of key provisions.
liabilities, and recognition • In relation to the recognition
of deferred tax assets
of the deferred tax assets, the
in terms of the Group’s
Committee challenged management’s
taxation policy.
expectations for future taxable
income, specifically in the areas where
• Recognition of deferred
impairments were recognised and in
tax assets in respect of
considering management’s position,
accumulated tax losses
the Committee took into account the
and the assessment as
work and views of external audit.
to whether an entity can
generate future taxable
• The Committee reviewed adherence
income, specifically in the
to the Group taxation policy including
areas where impairments
transparency and due regard to
were recognised,
commercial and reputational risks.
are underpinned by
The effective tax rate is analysed
management judgement.
by country to ensure accuracy and
completeness.
• The Committee considered
management’s assessment of
the Group’s tax exposures and
the appropriateness of provisions
recognised.
• The conclusion by
the Board to prepare
the annual financial
statements on a going
concern basis requires
management judgement
on issues which include
uncertain future forecasts
of net group cash inflows,
management’s ability to
achieve targets set as part
of the comprehensive
response plan strategy,
net debt and financing
facilities available and
utilised by the Group, debt
structure, debt maturity
profile and covenants.
The assessment was
done for the foreseeable
future based on current
assumptions and stress
tested against several
scenarios.
• The Committee assessed the liquidity
of Sasol based on the latest projected
future cash flows and stress tested
it using lower oil and product
prices and stronger exchange rates.
These projections were compared
with cash balances and committed
facilities available to the Group,
after considering the Committee’s
assessment of management’s ability
to achieve targets set as part of
the comprehensive response plan
strategy, net debt and financing
facilities utilised by the Group, debt
structure, debt maturity profile and
covenants.
• A focus of the Committee was on
tax litigation claims related to Sasol
Financing International Limited.
Following advice from external
legal advisors and conclusions by
management, as well as external
audit, the Committee agreed with the
accounting treatment and disclosures
set out in note 13.
• The Committee reviewed a report
during the year from management on
the Group’s tax policy, approach to tax
management and status of compliance.
• The Committee requested and received
a report from management detailing
the key tax exposures across the Group
against which provisions had been
made and the methodologies used
to determine the appropriate level of
each provision based on management’s
assessment of the facts, circumstances
and advice from our external tax and
legal advisers.
• After examining the forecast and
stress tested scenarios along with
Sasol’s ability to generate capital
and raise funding in current market
conditions, the Committee concluded
that Sasol’s liquidity and capital position
was adequate to meet its obligations
over the ensuing year and that the
going concern basis of accounting is
appropriate.
• The external auditors have confirmed
that the going concern basis is
appropriate.
• Accordingly, the Committee
recommended to the Board the
adoption by the Group of the going
concern basis of preparation of the
annual financial statements.
OTHER
Going concern
assessment
Conclusions
SASOL LIMITED GROUP
CONSOLIDATED FINANCIAL STATEMENTS
Audit Committee Review
NOTES TO THE FINANCIAL STATEMENTS
Accounting for
Income taxes
Judgments in Financial
Reporting
SASOL LIMITED COMPANY
Key Issues
7
Sasol Annual Financial Statements 2021