SASOL LTD — Regulatory Filings 2003

Sep 8, 2003

6-K 1 a03-3203_16k.htm 6-K

*SECURITIES AND EXCHANGE COMMISSION*

*Washington, D.C. 20549*

*FORM 6-K*

*Report of Foreign Private Issuer*

*Pursuant to Rule 13a -16 or 15d -16 of the Securities Exchange Act of 1934*

*Report on Form 6-K for September 8, 2003*

*Sasol Limited 1 Sturdee Avenue Rosebank 2196 South Africa*

(Name and address of registrant’s principal executive office)

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

Form 20-F ý Form 40-F o

Enclosures:

Audited consolidated profit statement and declaration of dividend number 48 for the year ended 30 June 2003

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant, Sasol Limited, has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

| (sgd) N L
Joubert | |
| --- | --- |
| Name: | Nereus Louis
Joubert |
| Title: | Company
Secretary |

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| ● |
| --- |
| clear
direction in stormy seas |
| Audited
consolidated profit statement and declaration of dividend number 48 for the
year ended 30 june 2003 |

**Sasol is an integrated oil and gas company with substantial chemical interests.****

**Sasol is listed on the JSE Securities Exchange South Africa and on the New York Stock Exchange.****

• Strong rand results in adverse currency effects - R4,2 billion

• Excluding currency effects operating profit up by 9%

• Including currency effects operating profit and attributable earnings down by 19% and 20%

• Severe margin pressures in chemical businesses

• Total dividend held at 450 cents

• Five year growth targets met and major capital projects on track

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A billion is defined as one thousand million.

The consolidated financial statements of Sasol Limited are presented on a summarised basis.

balance sheet

at 30 June

2002 Restated US$m		2003 US$m			2003 Rm		2002 Restated Rm
				ASSETS
3 744		5 652		Property,
plant and equipment	42 363		38
453
(50	)	(42	)	Goodwill
and negative goodwill	(314	)	(518	)
181		274		Intangible
assets	2 051		1
854
48		60		Retirement
benefit assets	451		497
186		263		Other
long-term assets	1 971		1
915
4 109		6 207		Non-current assets	46 522		42
201
878		1 167		Inventories	8 748		9
013
1 024		1 486		Trade
and other receivables	11 140		10
515
22		2		Short-term
financial assets	12		232
367		514		Cash	3 851		3
769
2 291		3 169		Current assets	23 751		23
529
6 400		9 376		TOTAL ASSETS	70 273		65
730
				EQUITY AND LIABILITIES
3 050		4 472		Total
shareholders’ equity	33 518		31
315
26		40		Minority
interest	300		272
528		611		Long-term
debt	4 581		5
427
282		332		Long-term
provisions	2 486		2
892
271		345		Retirement
benefit obligations	2 589		2
778
6		13		Long-term
deferred income	96		65
590		816		Deferred
tax	6 113		6
062
1 677		2 117		Non-current liabilities	15 865		17
224
338		865		Short-term
debt	6 481		3
474
1 136		1 446		Other
current liabilities	10 841		11
671
173		436		Bank
overdraft	3 268		1
774
1 647		2 747		Current liabilities	20 590		16
919
6 400		9 376		TOTAL EQUITY AND LIABILITIES	70 273		65
730

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income statement

for the year ended 30 June

| 2002 Restated US$m — 5 882 | | 2003 US$m — 7 148 | | Turnover | 2003 Rm — 64 555 | | 2002 Restated Rm — 59
590 | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (3
436 | ) | (4 356 | ) | Cost
of sales and services rendered | (39 347 | ) | (34
812 | ) |
| 2 446 | | 2 792 | | Gross profit | 25 208 | | 24
778 | |
| 122 | | 67 | | Non-trading
income | 604 | | 1
241 | |
| (422 | ) | (551 | ) | Marketing
and distribution expenditure | (4 977 | ) | (4
273 | ) |
| (407 | ) | (488 | ) | Administrative
expenditure | (4 407 | ) | (4
125 | ) |
| (335 | ) | (312 | ) | Other
operating expenditure | (2 809 | ) | (3
394 | ) |
| 1 404 | | 1 508 | | Operating profit before translation (losses)/gains | 13 619 | | 14
227 | |
| 55 | | (189 | ) | Translation
(losses)/gains | (1 708 | ) | 556 | |
| 1 459 | | 1 319 | | Operating profit | 11 911 | | 14
783 | |
| 23 | | 18 | | Dividends
and interest received | 167 | | 230 | |
| 3 | | 7 | | Income
from associates | 60 | | 31 | |
| (28 | ) | (25 | ) | Borrowing
costs | (225 | ) | (284 | ) |
| 1 457 | | 1 319 | | Net income before tax | 11 913 | | 14
760 | |
| (484 | ) | (444 | ) | Taxation | (4 007 | ) | (4
905 | ) |
| 973 | | 875 | | Net income after tax | 7 906 | | 9
855 | |
| (4 | ) | (10 | ) | Minority
interest | (89 | ) | (38 | ) |
| 969 | | 865 | | Attributable earnings | 7 817 | | 9
817 | |
| | | | | Basic earnings per share (cents) | | | | |
| 158 | | 142 | | - attributable
earnings basis | 1 283 | | 1
603 | |
| 158 | | 142 | | - headline
earnings basis | 1 280 | | 1
597 | |
| | | | | Diluted earnings per share (cents) | | | | |
| 155 | | 140 | | - attributable
earnings basis | 1 262 | | 1
571 | |
| 154 | | 139 | | - headline
earnings basis | 1 259 | | 1
565 | |
| | | | | Dividends per share (cents) | | | | |
| 20 | | 27 | | - interim | 215 | | 200 | |
| 24 | | 31 | | - final* | 235 | | 250 | |
| 44 | | 58 | | | 450 | | 450 | |

| Taking
the Sasol Share Incentive Scheme into account. |
| --- |
| *Subject
to exchange rate ruling on payment date. |
| The
US dollar convenience translation is calculated on a line-by-line basis in
accordance with IFRS. |

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cash flow statement

for the year ended 30 June

Cash receipts from customers	2003 Rm — 64 696		2002 Restated Rm — 60 049
Cash paid to suppliers and employees	(48 699	)	(40
592	)
Cash generated by operating activities	15 997		19
457
Investment income	178		247
Borrowing costs paid	(1 286	)	(863	)
Dividends paid	(2 835	)	(2
325	)
Tax paid	(5 527	)	(4
749	)
Cash available from operating activities	6 527		11
767
Additions to property, plant and equipment	(10 272	)	(7
945	)
Acquisition of businesses	(155	)	(565	)
Sasol Chemie purchase price reduction	—		341
Cash acquired on acquisition of businesses	119		35
Other net expenditure in investing activities	(413	)	(295	)
Cash utilised in investing activities	(10 721	)	(8
429	)
Share capital issued	77		76
Share buyback programme	(185	)	(1
020	)
Dividends paid to minority shareholders	(65	)	(76	)
Increase/(decrease) in long-term debt	122		(2
457	)
Increase/(decrease) in short-term debt	3 088		(962	)
Cash effect of financing activities	3 037		(4
439	)
Decrease in cash and cash equivalents	(1 157	)	(1
101	)
Cash and cash equivalents
- opening balance	1 995		2
370
- arising on translation	(255	)	726
Cash and cash equivalents at end of year	583		1
995
Comprising
- cash	3 851		3
769
- bank overdraft	(3 268	)	(1
774	)
	583		1
995

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changes in equity statement

for the year ended 30 June

| Opening balance | 2003 Rm | | 2002 Restated Rm — 22
217 | |
| --- | --- | --- | --- | --- |
| Effect of change in accounting policy | | | 920 | |
| Restated opening balance | 31 315 | | 23
137 | |
| Shares issued | 77 | | 76 | |
| Shares purchased | (185 | ) | (1
020 | ) |
| Attributable earnings for the year | 7 817 | | 9
817 | |
| Dividends paid | (2 835 | ) | (2
325 | ) |
| (Decrease)/increase in foreign currency translation
reserve | (2 570 | ) | 1
869 | |
| Increase in non-trading financial assets reserve | — | | 2 | |
| Decrease in cash flow hedge accounting reserve | (101 | ) | (241 | ) |
| Closing balance | 33 518 | | 31
315 | |
| Comprising | | | | |
| Share capital | 2 783 | | 2
706 | |
| Share buyback programme | (3 614 | ) | (3
429 | ) |
| Accumulated earnings | 35 041 | | 30
059 | |
| Foreign currency translation reserve | (352 | ) | 2
218 | |
| Non-trading financial assets reserve | 2 | | 2 | |
| Cash flow hedge accounting reserve | (342 | ) | (241 | ) |
| Total shareholders’ equity | 33 518 | | 31
315 | |

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value added statement

for the year ended 30 June

| Turnover | 2003 Rm — 64 555 | | 2002 Restated Rm — 59
590 | |
| --- | --- | --- | --- | --- |
| Purchased materials and services | (39 066 | ) | (32
820 | ) |
| Value added | 25 489 | | 26
770 | |
| Investment income | 227 | | 261 | |
| Wealth created | 25 716 | | 27
031 | |
| Employees | 9 055 | | 7
921 | |
| Providers of equity capital | 2 924 | | 2
363 | |
| Providers of loan capital | 225 | | 284 | |
| Government | 3 651 | | 4
669 | |
| Reinvested in the group | 9 861 | | 11
794 | |
| Wealth distribution | 25 716 | | 27
031 | |

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salient features

		2003		2002 Restated
Selected ratios
Return on equity	%	24,1		36,1
Return on total assets	%	17,8		25,7
Operating margin	%	18,5		24,8
Borrowing cost cover	times	9,4		17,4
Dividend cover	times	2,9		3,5
Share statistics
Total shares in issue	million	668,8		666,9
Treasury shares (share buyback programme)	million	59,7		57,9
Weighted average number of shares	million	609,3		612,5
Fully diluted number of shares	million	619,6		625,0
Share price (closing)	cents	8 355		11
000
Market capitalisation	Rm	55 878		73
359
Net asset value per share	cents	5 503		5
142
Other financial information
Total debt (including bank overdraft)
- interest bearing	Rm	14 289		10
579
- non-interest bearing	Rm	41		96
Capital commitments
- authorised and contracted	Rm	9 562		7
430
- authorised, not yet contracted	Rm	8 510		16
632
Guarantees and contingent liabilities	Rm	18 358		10
114
Significant items in operating profit
- employee costs	Rm	9 055		7
921
- depreciation of property, plant and
equipment	Rm	4 468		4
221
- operating lease charges	Rm	378		369
Directors’ remuneration	Rm	29		23
Share options granted to directors - cumulative	‘000	1 450		1
508
Effective tax rate	%	33,6		33,2
Number of employees	number	31 150		31
100
Average crude oil price - Dated Brent	US$/bbl	27,83		23,24
Reconciliation of headline earnings
Attributable earnings		7 817		9
817
Impairment of assets		83		145
Loss on disposal of assets		90		46
Scrapping of property, plant and equipment		69		52
Amortisation of goodwill		42		33
Amortisation of negative goodwill		(301	)	(282	)
Tax effect of reconciling items		(2	)	(30	)
Headline earnings		7 798		9
781

The reader is referred to the definitions contained in the 2002 annual report.

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**financial overview****

For the 2003 financial year, operating profit before currency translation effects decreased by 4% from R14 227 million to R13 619 million compared to the last financial year. After currency translation effects, operating profit decreased by 19% from R14 783 million to R11 911 million. Attributable earnings and earnings per share decreased by 20% from R9 817 million to R7 817 million and from 1 603 cents to 1 283 cents respectively. During the year the group changed its accounting policy with respect to borrowing costs. Excluding the effect of this change, attributable earnings and earnings per share on a comparable basis decreased by 24% from R9 496 million to R7 174 million and from 1 550 cents to 1 177 cents respectively.

International oil prices were on average 14% higher than in the previous financial year. The following, however, more than offset this benefit and were the main causes of the decrease in basic attributable earnings:

• the strengthening of the rand-US$ exchange rate from an average of R10,13:US$ 1 in the previous reporting period to R9,03:US$ 1 (R1,9 billion), and from a closing rate at 30 June 2002 of R10,27:US$ 1 to R7,50:US$1 (R2,3 billion) at 30 June 2003. The total adverse impact on operating profit of these currency effects amounted to R4,2 billion,

• the depressed margins of various chemicals and in particular alkylates, and

• the losses arising from the extended Natref shutdown and unforeseen problems and delays experienced with the refinery expansion project.

Other than Sasol Olefins & Surfactants and Sasol Oil, the group performed reasonably well in difficult global trading conditions that were exacerbated by the effects of the Middle East war and the SARS virus in Asia.

Sasol’s plants world-wide ran well and customers’ requirements were met. Pleasing improvements were made in safety, environmental and risk management.

Capital expenditure incurred amounted to R11 billion. Major projects advanced or completed during the year include:

• the pioneering gas-to-liquid (GTL) fuels projects in Qatar and Nigeria,

• the Mozambique gas project which will bring natural gas for the first time to the industrial heartland of South Africa, and

• the n-butanol and acrylic acid and acrylates projects at Sasolburg.

At 30 June 2003, gearing (total debt less cash as a percentage of shareholders’ equity) amounted to 33% which was within the company’s targeted range of 20% to 40%. In response to the group’s capital expansion programme and debt-funding requirements, the group’s gearing target-range was increased to 30% - 50% during the year. This decision followed substantial research and stress-testing of Sasol’s balance sheet and business plans.

The total dividend declared of R4,50 is equivalent to that of the previous reporting period and reflects a dividend cover of 2,9.

Notable achievements during the year included Sasol’s improved credit rating by international agency Standard and Poor’s, and the successful secondary listing of Sasol on the New York Stock Exchange.

**sasol mining****

Lower international coal prices and the stronger rand adversely impacted on Sasol Mining’s export revenues resulting in operating profit decreasing by 4% from R1 335 million to R1 277 million.

Various productivity improvements were again achieved as a continuation of Sasol Mining’s business renewal initiatives. Machine and per-capita productivity improved by 9% and 3% respectively and increases in cash costs per ton were contained to 4%, which is within the South African Producer Price Index (PPI) rate of inflation.

Sasol Mining was recognised for its successes and business stature when it received the International Coal Company of the Year Award at the 2002 Platts/Business Week Global Energy Awards in New York.

**sasol synfuels****

Sasol Synfuels advanced its business renewal initiatives launched in the mid-1990s and maintained turnover at the record levels achieved in the 2002 financial year. The benefit of higher international crude oil prices was mostly offset by the impact of a stronger rand resulting in operating profit increasing slightly to R8 048 million.

An initiative was advanced in partnership with Sasol Technology and Sasol Oil to ensure compliance with the new fuel specifications that are expected to become mandatory in South Africa in 2006. It is estimated that about R7 billion will be invested to modify the liquid fuel refining and blending operations and to construct new plants to increase the octane rating of Secunda’s synthetic petrol.

This project will liberate significant further quantities of monomer feedstock which will enable Sasol Polymers to progress with value-adding polymer expansion projects.

**sasol oil and gas****

Operating profit reduced by 39% from R2 021 million to R1 223 million. The benefit of higher oil and fuel prices as well as higher gas sales was more than offset by the impact of a stronger rand and losses arising from the Natref shutdown (R200 million) and difficulties experienced with the Natref expansion project (R200 million). The plant has since operated satisfactorily and record production levels have been achieved.

The introduction of the new Basic Fuel Price (BFP) mechanism in April 2003 to replace the in-bond landed cost (IBLC) pricing formula had minimal effect on profits.

Negotiations have progressed with other oil companies to conclude new supply agreements to replace the Main Supply Agreement which expires on 31 December 2003.

Preparation for the introduction of natural gas from Mozambique into South African markets is progressing well.

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**sasol’s chemical businesses****

**•* sasol olefins and surfactants (O&S)***

The depressed global economy and significant margin pressures caused by lower product prices and higher feedstock costs resulted in operating profit reducing by 95% from euro 133 million to euro 7 million. In rand terms, operating profit reduced from R1 207 million to R67 million.

The performance of the alkylates business was particularly disappointing. Linear alkylbenzene (LAB) selling prices came under pressure because of surplus global capacity. Kerosene and benzene feedstock costs increased to an all-time high.

Low capacity utilisation at Sasol’s LAB plants led to the suspension of production at the Porto Torres LAB facility in Italy and a 30% reduction of the workforce of the LAB plant at Baltimore in the USA.

While the monomers business within Sasol O & S also had disappointing results primarily because of low co-monomer prices, all other businesses in Sasol O & S achieved satisfactory performances in Euro, but in rand terms were adversely affected by the stronger rand.

Various businesses in the chemical portfolio are being scrutinised and reviewed to ensure strategic fit and the ability to meet financial performance targets on a sustainable basis. Certain businesses and product groups are being considered for rationalisation, potential disposal and/or an intensified process of cost reduction and productivity improvement.

• *sasol polymers***

Turnover increased by 12% from R5 580 million to R6 245 million. Higher feedstock costs and rand appreciation resulted in operating profit decreasing by 3% from R913 million to R890 million. A focus on continuous improvement was maintained and the business increased per capita production by 9%.

Plant operations remained stable with some units achieving production records. The polyethylene plant in Malaysia overcame start-up problems experienced during the first half of the financial year and by year-end was running at full capacity.

Sasol Polymers Germany entered into a joint venture with the National Petrochemical Company of Iran to construct and operate an integrated world-scale ethylene and polyethylene complex in Iran.

• *sasol solvents***

The benefits of cost-cutting initiatives and record turnover resulted in Sasol Solvents increasing its operating profit before translation effects by 3% from R704 million to R728 million. The rand’s appreciation, however, resulted in a 45% decrease in operating profit after translation effects from R786 million to R436 million.

Most business units performed to expectations and contributed satisfactorily to profits. Closer collaboration with Sasol O&S world-wide is yielding even more operational synergies which, together with the establishment of various shared services, will contribute to further reduce costs.

• *sasol wax***

Sasol Wax achieved satisfactory results during the year despite aggressive competition and margin pressures caused by higher oil prices. Operating profit increased by 33% from R175 million to R233 million. Demand for Fischer-Tropsch waxes produced at Sasolburg was buoyant while competition from Chinese wax producers resulted in margins for commodity waxes eroding in European markets.

• *sasol nitro***

In a year characterised by higher demand for fertilisers and lower demand for explosives, Sasol Nitro performed reasonably well. Rand appreciation and increased logistics costs partly offset the benefit of higher fertiliser prices resulting in operating profit decreasing by 23% to R414 million. Cash cost increases were contained to well within the PPI rate of inflation.

During the year a decision was taken to divest from Sasol Nitro’s underperforming explosives businesses in the USA and Canada resulting in a further impairment cost of R158 million.

**sasol petroleum international****

The development of the Mozambique gas fields at Temane and Pande progressed satisfactorily during the year. It is currently estimated that Sasol has access to Mozambican gas reserves of about 3,2 trillion cubic feet (tcf), or more than 500 million barrels of oil equivalent.

**sasol synfuels international****

Sasol’s ambition to pioneer new-generation GTL conversion technology in selected gas-rich regions advanced during the year. Through the joint venture with Qatar Petroleum work commenced on the construction of the plant at Ras Laffan, Qatar. In November 2002, non-recourse financing amounting to US$ 700 million was successfully arranged for the project. The engineering, procurement and construction (EPC) contract was awarded in December 2002. The plant is expected to be ready for commissioning before the end of December 2005.

The Sasol Chevron joint venture (between Sasol and ChevronTexaco) made progress with the full-scale design of the GTL plant to be built in Nigeria. It is envisaged that the EPC contract will be awarded during 2004 and commissioning of the plant is expected during 2007.

**profit outlook****

International chemical prices are predicted to drift upwards or remain unchanged and margins should improve because average oil prices in the 2004 financial year are expected to be lower than in the past year. A dominating influence on overall financial performance is, however, expected from the rand’s relationships with major currencies. If the prevailing strength of the rand persists, it is unlikely that rand earnings in the new financial year will match those of the 2003 financial year.

Looking ahead, the group is poised to enter its next growth phase which will be spearheaded by the rollout of the GTL ventures over the next few years. This will be supported by both the harvesting of returns from our chemical investments and continuing major contributions from our mining, oil and gas and synthetic fuels businesses.

**corporate governance****

Following its listing on the New York Stock Exchange (NYSE) on 9 April 2003 and the publication of new listings requirements by the JSE Securities Exchange South Africa (JSE) effective from 1 September 2003, the group had the opportunity to review its corporate governance practices comprehensively. Sasol complies, to the extent required, with the new JSE Listings Requirements, as well as the comprehensive US governance standards recently augmented by rules adopted by the NYSE and the US Securities and Exchange Commission in consequence of the Sarbanes-Oxley Act. The group subscribes to, affirms its commitment to and complies, in all material respects with the principles of the Code on Corporate Practices and Conduct as contained in the second King Report on Corporate Governance for South Africa. All the key principles underlying responsible and effective corporate governance practices and conduct are reflected in Sasol’s corporate governance structures and practices.

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**declaration of final dividend number 48****

The directors of Sasol Limited have declared a final dividend of 235 cents per share (2002: 250 cents per share) for the year to 30 June 2003. The dividend has been declared in the currency of the Republic of South Africa.

Trading in the STRATE environment requires settlement within five business days. In accordance with the settlement procedures of STRATE, the following dates will apply to the final dividend:

Last day for trading to qualify for and participate in the final dividend (cum dividend) Friday, 3 October 2003

Trading ex dividend commences Monday, 6 October 2003

Record date Friday, 10 October 2003

Dividend payment date (electronic and certificated register) Monday, 13 October 2003

Dividend cheques in payment of this dividend to certificated shareholders will be posted to shareholders on or about Monday, 13 October 2003. Electronic payment to certificated shareholders will be undertaken simultaneously.

Shareholders who have dematerialised their share certificates will have their accounts, at their Central Securities Depository Participant or Broker credited on Monday, 13 October 2003.

In the case of certificated shareholders, notice of any change of address of shareholders must reach the transfer secretaries, Computershare Limited, on or before Friday, 3 October 2003. Share certificates may not be dematerialised or rematerialised between Monday, 6 October 2003 and Friday, 10 October 2003, both days inclusive.

On behalf of the board

/s/ P du P Kruger	/s/ P V Cox
P du P Kruger	P V Cox
Chairman	Deputy chairman and chief executive
Sasol Limited
5
September 2003

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**report of the independent auditors****

To the members of Sasol Limited

The summarised consolidated financial statements of Sasol Limited have been derived from the audited consolidated financial statements, prepared in accordance with South African Statements of Generally Accepted Accounting Practice, International Financial Reporting Standards and in the manner required by the Companies Act in South Africa, of the company for the year ended 30 June 2003. We have audited the consolidated financial statements in accordance with statements of South African Auditing Standards. In our report dated 5 September 2003, we expressed an unqualified opinion on the consolidated financial statements from which the summarised consolidated financial statements were derived.

**audit opinion****

In our opinion, the accompanying summarised consolidated financial statements are consistent, in all material respects, with the audited consolidated financial statements from which they were derived and are prepared in accordance with the presentation and disclosure requirements of South African Statements of Generally Accepted Accounting Practice, International Financial Reporting Standards and the requirements of the Companies Act in South Africa.

For a better understanding of the scope of our audit and the company’s consolidated financial position, results of operations and cash flows, the summarised consolidated annual financial statements should be read in conjunction with our audit report included in the consolidated financial statements from which the summarised consolidated financial statements were derived.

KPMG Inc

Registered Accountants and Auditors Chartered Accountants (SA)

Johannesburg

5 September 2003

2002 Restated — Turnover Rm	2003	Business unit	2003 — Operating profit Rm		2002 Restated
1 239	1 013	Sasol Mining	1 277		1 335
12
620	13 643	Sasol
Synfuels	8 048		8
030
6 414	8 507	Sasol
Oil and Gas	1 223		2
021
39
023	41 030	Sasol’s
chemicals businesses	2 240		3
681
19
129	19 543	Sasol
Olefins and Surfactants	67		1
207
5 580	6 245	Sasol
Polymers	890		913
5 666	5 950	Sasol
Solvents	436		786
3 840	4 663	Sasol
Wax	233		175
3 984	3 810	Sasol
Nitro	414		535
824	819	Other
chemicals	200		65
294	362	Other	(635	)	(41	)
59
590	64 555		12 153		15
026
		Capital items	(242	)	(243	)
			11 911		14
783

| Turnover — 26
735 | 31 136 | Geographic analysis — South
Africa | Operating profit — 10 896 | | 12
115 |
| --- | --- | --- | --- | --- | --- |
| 2 079 | 1 959 | Rest
of Africa | 15 | | 12 |
| 16
390 | 17 149 | Europe | 781 | | 1
491 |
| 3 208 | 3 710 | Middle East, India and Far East | 453 | | 510 |
| 9 514 | 8 809 | North
America | (229 | ) | 528 |
| 675 | 697 | South
America | 7 | | 63 |
| 989 | 1 095 | Southeast
Asia | (12 | ) | 64 |
| 59
590 | 64 555 | | 11 911 | | 14
783 |

11

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**notes to the financial statements****

**basis of preparation and accounting policies****

The summarised consolidated financial statements have been prepared in compliance with the Listings Requirements of the JSE Securities Exchange South Africa, in accordance with International Financial Reporting Standards (IFRS) and the requirements of the South African Companies Act, 1973, as amended.

The accounting policies applied in the presentation of the group’s summarised consolidated financial statements for the year ended 30 June 2003 are consistent with those applied in the previous year except for the change in accounting policy to capitalise borrowing costs.

These summarised consolidated financial statements have been prepared in accordance with the historic cost convention except for certain financial instruments which are stated at fair value.

The principal reporting currency of the Sasol group is rand. This currency reflects the economic substance of the underlying events and circumstances of the group. US$ figures are presented for the balance sheet and income statement for convenience purposes only. Other US$ figures are not presented as they are not considered to be meaningful

**change in accounting policy****

During the year, the group changed its accounting policy to the allowed alternative treatment of the IFRS standard on Borrowing Costs - IAS23. This treatment requires the capitalisation of borrowing costs to certain qualifying assets during construction. The group’s external debt has increased materially over the past three financial years and is used primarily to finance the group’s capital expansion programme. It was thus considered appropriate to capitalise borrowing costs to certain qualifying assets rather than to expense it as incurred.

Comparative figures have been restated as if they had always been prepared in accordance with this policy.

The effect of the change in accounting policy is as follows:

Increase in depreciation expense	2003 Rm — (142	)	2002 Rm — (112	)
Reduction in borrowing costs	1 061		579
Tax effect	(276	)	(136	)
Minority interest	—		(10	)
Net increase in attributable earnings	643		321
Increase in opening accumulated earnings	1 241		920

**related party transactions****

During the year, the group, in the ordinary course of business, entered into various sale and purchase transactions with related parties. The group enters into these transactions on an arm’s length basis at market rates.

**post-balance sheet events****

Sasol successfully issued a R 2 000 million corporate bond on 1 September 2003. The maturity date of the bond is 1 September 2007. Interest is charged at 10,5% per annum payable 1 March and 1 September each year.

On 11 July 2003 Sasol Italy S.p.A. acquired the remaining 48,05% shares in G.D. Portbury Limited (Dubai) trading as Sasol Gulf for a cash consideration of US$ 2,65 million (R20 million).

Anglo Operations Limited and Sasol Mining (Pty) Limited entered into an agreement to develop the Kriel South coal reserves in Mpumalanga province, South Africa. Anglo Operations Limited will invest R769 million (US$ 96 million) and Sasol R320 million (US$ 40 million) in the project.

This Petroleum Products Amendment Bill aims to create a legislative framework for the governance of the fuel industry. In issuing wholesale licenses, wholesalers will be required to procure products made from coal, natural gas or vegetable matter before buying or selling products made from other raw materials.

The South African government has amended the Petroleum Pipelines Bill such as to guarantee Natref’s supply of crude oil at its current capacity. This bill is of an enabling nature and provides for a pipeline authority that will be empowered to set tariffs for petroleum pipelines. The Bill does not specifically provide for a continued differentiation between the pipeline tariff for the transport of crude-oil and that of refined products. A reduction in this differential would have an adverse effect on the refining margins of the Natref refinery. Until such time as a decision on tariffs has been taken, the impact on Sasol’s share in Natref cannot be ascertained.

**principle foreign currency conversion rates****

| One unit of
foreign currency equals | 2003 | 2002 |
| --- | --- | --- |
| Rand/US$ (closing) | 7,50 | 10,27 |
| Rand/US$ (average) | 9,03 | 10,13 |
| Rand/euro (closing) | 8,63 | 10,19 |
| Rand/euro (average) | 9,41 | 9,08 |

Annual report: the annual report will be posted to shareholders and will be available on Sasol’s website on or about

20 October 2003.

In this report we make certain statements that are not historical facts and relate to analyses and other information based on forecasts of future results and estimates of amounts not yet determinable, relating, amongst other things, to volume growth, increases in market share, total shareholder return and cost reductions. These are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as “believe”, “anticipate”, “expect”, “intend”, “seek”, “will”, “plan”, “could”, “may”, “endeavor” and “project” and similar expressions are intended to identify such forward-looking statements, but are not the exclusive means of identifying such statements.

Forward-looking statements involve inherent risks and uncertainties and, if one or more of these risks materialize, or should underlying assumptions prove incorrect, actual results may be very different from those anticipated. The factors that could cause our actual results to differ materially from such forward-looking statements are discussed more fully in our registration statement under the Securities Exchange Act of 1934 on Form 20-F filed on March 6, 2003 and in other filings with the United States Securities and Exchange Commission.

**registered office****

sasol limited, 1 sturdee avenue, rosebank, johannesburg 2196

po box 5486, johannesburg 2000

**transfer secretaries****

computershare limited, 70 marshall street, johannesburg 2001

po box 1053, johannesburg 2000, south africa

tel: +27 11 370-5000 fax: +27 11 370 5271/2

**directors****

**non-executive****

P du P Kruger (Chairman), E le R Bradley, W A M Clewlow, B P Connellan, M S V Gantsho, A Jain (Indian), S Montsi, S B Pfeiffer (USA), J E Schrempp (German), C B Strauss

**executive****

P V Cox (Deputy chairman and chief executive), L P A Davies, J H Fourie, T S Munday

**company secretary* *N L Joubert

**company registration number* *1979/003231/06 incorporated in the republic of south africa

**isin code* *ZAE000006896

**share code* *SOL

**american depository receipt (ADR) program* *cusip number 543210

ADR to ordinary share 1:1 depositary The Bank of New York, 22nd floor, 101 Barclay Street, New York, N.Y. 10286, U.S.A.

**information agent* *Taylor Rafferty.

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