sasol - notes to the financial statements

sasol limited group notes to the financial statements

for the year ended 25 June

2000	2001				2001	2000
USDm	USDm				Rm	Rm

		1.	Property, plant and equipment
2 714	3 483		Total book value		27 925	18 798

			For further details of property, plant and equipmen click here


		2.	Intangible assets
84	134		Total book value		1 071	590

			For further details of Intangible assets click here


		3.	Township land and residential buildings
4	3		Undeveloped and developed land		23	26
1	—		Development of leasehold property		2	4
14	11		Residential buildings		85	95

19	14				110	125

			Depreciation rates
			Buildings	2,5 - 4,9%
			Residential buildings	2,0 - 2,5%


		4.	Goodwill
			Cost
16	23		Balance at beginning of year		160	97
9	7		Acquisition of businesses (see note 31)		53	60
(2)	(1)		Arising on translation of foreign entities (see note 23)		16	3

23	29		Balance at end of year		229	160

			Amortisation
1	3		Balance at beginning of year		19	9
2	2		Current (see note 16)		15	10
—	(1)		Arising on translation of foreign entities (see note 23)		1	—

3	4		Balance at end of year		35	19

20	25		Book value at end of year		194	141

			Negative goodwill
			Cost
—	(98)		Acquisition of businesses (see note 31)		(783)	—
—	1		Arising on translation of foreign entities (see note 23)		7	—

—	(97)		Balance at end of year		(776)	—

			Amortisation
—	(8)		Current (see note 16)		(59)	—
—	1		Arising on translation of foreign entities (see note 23)		—	—

—	(7)		Balance at end of year		(59)	—

—	(90)		Book value at end of year		(717)	—

20	(65)		Net book value of goodwill at end of year		(523)	141

			Comprising
—	(84)		Sasol Chemie		(674)	—
7	9		Schümann Sasol International Aktiengesellschaft		71	47
9	9		Sasol Southwest Energy LLC		70	63
—	(5)		Fedmis Phalaborwa		(43)	—
4	6		Other – not considered significant in aggregate		53	31

20	(65)				(523)	141



		5.	Investments
			Investments in associates
1	1		At cost		10	4

1	3		Equity accounted		28	4

			Unlisted shares
38	102		At cost		817	261

38	102		Directors' valuation		821	261

			As the Group has more than five investments, a register is maintained in terms of paragraph 27 of Schedule 4 of the South African Companies Act, 1973. For further details of investments click here


		6.	Long-term loans and debtors
60	45		Post-employment benefits – pension asset		362	413
17	18		Long-term interest-bearing loans		147	120
28	38		Long-term interest-free loans		302	192

105	101				811	725


		7.	Inventories
121	225		Crude oil and other raw materials	1 806	838
22	42		Process material	337	155
108	114		Maintenance and other materials	911	747
281	518		Manufactured products	4 156	1 946

532	899			7 210	3 686

			Included in the above are inventories carried at net realisable value
—	21		Crude oil and other raw materials	167	—
1	1		Process material	11	10
7	8		Maintenance and other materials	65	51
—	—		Manufactured products	3	—

8	30			246	61

			Inventories to the value of R2 804 million (USD350 million) have been pledged as security over long-term liabilities (see page 141).


		8.	Trade and other receivables
623	1 012		Trade receivables	8 122	4 315
(16)	(31)		Less provision for doubtful debts	(251)	(110)

607	981		Net trade receivables	7 871	4 205
—	3		Current portion of long-term loans and debtors	21	—
90	276		Other receivables	2 217	624

697	1 260			10 109	4 829

			Other receivables include insurance debtors, employee loans, prepayments and VAT receivable.

61	53		Average debtors' collection period (days)	53	61


		9.	Long-term liabilities
84	669		Total long-term liabilities	5 364	590
(21)	(49)		Portion repayable within one year included in short-term loans (see note 12)	(394)	(145)

63	620			4 970	445

			For further details of long-term liabilities click here


		10.	Long-term provisions
365	604		Total long-term provisions	4 841	2 530
(1)	(73)		Portion repayable within one year included in short-term provisions (see note 13)	(592)	(4)

364	531			4 249	2 526

			For further details of long-term provisions click here


2000	2001			2001	2000
USDm	USDm			Rm	Rm

		11.	Deferred taxation
			The deferred taxation liability arises from the following temporary differences:
565	639		Property, plant and equipment	5 124	3 914
(7)	(8)		Intangible assets	(65)	(47)
6	6		Prepayments	52	45
(50)	(36)		Provisions	(289)	(345)
(13)	(16)		Assessed losses	(126)	(89)
—	(1)		Other	(7)	(1)

501	584			4 689	3 477

			Reconciliation of movement:
499	501		Balance at beginning of year	3 477	2 720
(25)	(68)		Per the income statement (see note 19)	(521)	(158)
132	221		Effect of businesses acquired (see note 31)	1 770	913
(55)	(70)		Arising on translation of foreign entities (see note 23)	(37)	2

501	584		Balance at end of year	4 689	3 477


		12.	Short-term loans
21	49		Short-term portion of long-term liabilities (see note 9)	394	145
39	229		Bank loans	1 835	272
—	129		Trade finance	1 036	—
92	27		Other	214	639

152	434			3 479	1 056


		13.	Short-term provisions
1	73		Short-term portion of long-term provisions (see note 10)	592	4

			For further details of short-term provisions see pages 142 and 143.


		14.	Trade and other payables
221	492		Trade payables	3 945	1 528
236	433		Other payables	3 474	1 632

457	925			7 491	3 160

			Other payables include and insurance loss reserve, bonuses, leave pay, VAT payable and accruals,

41	45		Average creditors' settlement period (days)	45	41


		15.	Sales
4 019	5 314		Sale of products	40 641	25 247
82	85		Other trading income	648	515

4 101	5 399			41 289	25 762

3 062	3 377		Local sales	25 829	19 237
682	899		Export sales	6 873	4 281
357	1 123		Foreign sales	8 587	2 244

4 101	5 399			41 289	25 762

			Local sales are defined as sales of products manufactured and sold in the Republic of South Africa. Export sales are sales of products manufactured in the Republic of South Africa and sold elsewhere in the world. Foreign sales are sales of products manufactured outside the Republic of South Africa, regardless of where they are sold.


		16.	Operating profit
			Operating profit is arrived at after taking into account:
			Amortisation of
2	2		– goodwill	15	10
—	(8)		– negative goodwill	(59)	—
3	6		– intangible assets	53	18
			Amounts written off less recovered on township land
—	—		and residential buildings	(2)	5
			Auditors' remuneration
2	2		– audit fees	15	10
—	1		– other consulting and financial services	4	3
308	305		Depreciation of property, plant and equipment	2 339	1 934
628	648		Employee costs (see page 144)	4 957	3 943
13	24		Exploration expenditure	185	84
			Impairment of
24	4		– intangible assets	35	153
19	82		– property, plant and equipment	628	117
			Loss on disposal of
—	—		– intangible assets	1	—
2	16		– property, plant and equipment	119	11
			Movement in provisions
38	91		– increase during year	710	237
			Operating lease charges
7	9		– buildings	69	44
4	4		– plant and equipment	34	23
(11)	(24)		Profit on foreign exchange transactions	(182)	(69)
(1)	(2)		Profit on translation of foreign operations	(17)	(9)
8	—		Provision for loss on disposal of businesses	—	50
37	35		Research and development expenditure	268	230
—	14		Scrapping of property, plant and equipment	116	—
5	10		Technical and other fees	79	33
—	17		Write-down of investment in businesses	132	—


		17.	Non-trading income
			Dividends received
—	1		– foreign	11	—
31	30		Interest received	233	198
27	18		– Republic of South Africa	141	170
4	12		– foreign	92	28

31	31			244	198


		18.	Finance costs
29	39		Republic of South Africa	299	185
32	27		Foreign	210	202

61	66			509	387


		19.	Taxation
324	471		Republic of South Africa normal taxation	3 599	2 031
326	471		– current year	3 601	2 045
(2)	—		– prior years	(2)	(14)
16	28		Secondary taxation on companies (STC)	211	102
(25)	(68)		Deferred taxation	(521)	(158)
(31)	(60)		– current year	(459)	(193)
6	(8)		– prior years	(62)	35
3	23		Foreign taxation	178	19

318	454		Net taxation for the year	3 467	1 994

%	%		Reconciliation of taxation rate	%	%
30,0	30,0		Normal taxation rate	30,0	30,0
			Increase in rate of taxation due to:
1,7	2,0		– secondary taxation on companies	2,0	1,7
0,8	0,7		– different foreign tax rates	0,7	0,8
2,9	1,1		– disallowed expenditure	1,1	2,9

35,4	33,8			33,8	35,4
			Decrease in rate of taxation due to:
(2,0)	(0,6)		– prior years	(0,6)	(2,0)
(0,3)	(0,2)		– utilisation of assessed losses	(0,2)	(0,3)
(0,4)	—		– exempt income	—	(0,4)

32,7	33,0		Effective rate of taxation	33,0	32,7

			The reason for the difference in the effective rate oftaxation over the two years is due mainly to the increased secondary taxation on companies and the reduction in prior year adjustments offset by the reduction in disallowed expenditure.

USDm	USDm		Estimated taxation losses	Rm	Rm
			Estimated taxation losses available for set-off againstfuture taxable income amount to approximately
69	114			911	479

43	52		Utilised to reduce the deferred taxation balance	420	297

1	—		Available STC credits at year end	1	7


		20.	Income from associates
—	—		Share of associates after tax income	2	—
1	1		Dividends received	9	6

1	1			11	6


2000	2001			&nb