Sasol Form 20-F for the year ended 30 June 2021 - Book - Page 24
management has concluded, through testing, that these
controls were operating effectively. As a result of the
material weakness described above, management
concluded that our disclosure controls and procedures
remain ineffective as of 30 June 2021.
acceptable commercial premiums. However, full cover
for all loss scenarios may not be available at acceptable
commercial rates, and we cannot give any assurance
that the insurance procured for any particular year
would cover all potential risks sufficiently or that the
insurers will have the financial ability to pay all claims
that may arise.
We cannot be certain that any remedial
measures we are currently in the process of
implementing, or our internal controls over financial
reporting more generally, will ensure that we design,
implement and maintain adequate controls over our
financial processes and reporting in the future. Our
failure to implement our remediation plans referred to
above, or to implement newly required or improved
controls or to adapt our controls, or difficulties
encountered in their operation, or difficulties in the
assimilation of acquired businesses into our control
system, could prevent us from meeting our financial
reporting obligations or result in a restatement of
previously disclosed financial statements. These
financial reporting obligations include filing our
periodic reports with the SEC on a timely basis and
maintaining compliance with applicable New York
Stock Exchange (NYSE) listing requirements.
The costs we may incur as a result of the
above or related factors could have a material adverse
effect on our business, operating results, cash flows and
financial condition.
Risks related to legal, regulatory and governance
matters
We identified a material weakness in our internal
controls over financial reporting in 2020, which we
are still in the process of remediating. If we are
unable to remediate this material weakness, or if we
experience additional material weaknesses or other
significant deficiencies in the future or otherwise fail
to maintain an effective system of internal controls,
we may not be able to accurately and timely report
our financial results, which could cause
shareholders to lose confidence in our financial and
other public reporting, and adversely affect our
share price
If other currently undetected material
weaknesses in our internal controls exist, they could
result in material misstatements in our financial
statements requiring us to restate previously issued
financial statements. In addition, material weaknesses,
and any resulting restatements, could cause investors to
lose confidence in our reported financial information.
They could also subject us to regulatory scrutiny and to
litigation from shareholders, which could have a
material adverse effect on our business. Furthermore,
the remediation of any such material weakness could
require additional remedial measures including
additional personnel, which could be costly and timeconsuming. The implementation of the remediation
actions could further be impacted by the increased
demand on employees. This is because there are
increased requirements related to the activities from our
optimisation of the business, as well as the personnel
impact of the strategic reset through Future Sasol. If we
do not maintain adequate financial and management
personnel, processes and controls, we may not be able
to manage our business effectively or accurately report
our financial performance on a timely basis. This, in
turn, could cause a decline in our share price and
adversely affect our results of operations and financial
condition. Failure to comply with the Sarbanes-Oxley
Act of 2002 (Sarbanes-Oxley Act) could potentially
subject us to sanctions or investigations by the SEC or
Our management is responsible for
establishing and maintaining adequate internal controls
over financial reporting and for evaluating and
reporting on the effectiveness of our system of internal
control. Under “Item 15— Controls and Procedures”, a
material weakness in internal control over financial
reporting was disclosed for the financial year ended 30
June 2021. The material weakness was identified in
2020 and relates to the level of precision applied to the
impairment assessments performed on the South
African integrated value chain cash generating units
(CGUs) within one segment of the company and has
now been expanded to all CGUs within the South
African integrated value chain. This material weakness
is still in the process of being remediated.
While the material weakness relating to the
LCCP capital cost estimation process was fully
remediated as at 30 June 2021 and while we are
currently implementing remedial measures, there can be
no assurance that our efforts will be successful. The
material weakness was not considered remediated until
completion of the design and implementation of the
longer-term remediation efforts and the applicable
remedial controls operate for a few cycles and
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