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Reviewed condensed consolidated financial statements for the year ended 30 June 2016
Sasol Inzalo Public Limited (RF)
(Incorporated in the Republic of South Africa)
(Registration number 2007/030646/06)
Sasol Inzalo Public Ordinary Share code: JSE: SIPBEE
Sasol Inzalo Public Ordinary ISIN: ZAE000210050
("Sasol Inzalo Public" or "Company")
Reviewed condensed consolidated financial statements
for the year ended 30 June 2016
Sasol Inzalo Public Limited (RF) and Sasol Inzalo Public Funding (Pty) Ltd (RF) (the group) forms part of Sasol Limited's 2008
broad-based BEE ownership transaction equal to 10% of its issued share capital. The group owns 2,37% of Sasol Limited's issued
share capital.
The main business of the group is to acquire and hold shares in Sasol Limited on behalf of the members of the black public.
Financial overview
The group recorded a net loss for the year ended 30 June 2016 of R95 million (2015: R84 million). The increased loss was mainly
due to R9 million costs incurred in respect of listing on the JSE Limited's Empowerment Segment (JSE) on 1 December 2015.
Finance income remained flat at R497 million while finance costs were slightly higher than the previous year by R4 million.
The group generated sufficient cash from dividends received from the investment in Sasol Limited to fund operating activities,
finance costs and to repay short-term debt during the year. Cash generated from operating activities for the year ended
30 June 2016 amounted to R260 million (2015: R256 million).
Our investment in Sasol Limited was revalued at the closing market price of R397,17 (2015: R450,00) per Sasol Limited ordinary
share as at 30 June 2016, to a value of R6 388 million (2015: R7 238 million) in line with the group's accounting policy for
investments classified as available-for-sale financial assets. Refer to Table 2 for historical listed prices per share of
Sasol Limited ordinary shares at 30 June.
Even though the group reflected a negative net asset value of R955 million (2015: (R150 million)), we expect that sufficient cash
will be generated out of dividends received from Sasol Limited to pay for the operating expenses, finance costs and capital
repayments due in the short-term and the group is therefore regarded as a going concern.
Key financial highlights
How we used our cash
2016 2015
Rm Rm
Dividend received 495 495
Operating activities 17 8
Repayment of capital and
finance costs 507 507
Sasol Limited loan funding (9) -
Taxation paid 1 4
Utilised from cash brought
forward (21) (24)
495 495
Repayment of capital and finance costs
(A preference shares): R213 million - 43%
Repayment of finance costs
(B preference shares): R101 million - 20%
Repayment of finance costs
(C preference shares): R193 million - 39%
Operating activities - 4%
Sasol Limited loan funding - (2%)
Utilised from cash brought forward - (4%)
Listing of Sasol Inzalo ordinary shares
On 1 December 2015 Sasol Inzalo Public Limited (RF) (Sasol Inzalo) was listed on the JSE's Empowerment Segment.
The listing provides existing and prospective shareholders with access to a licensed trading platform and the flexibility of
transacting on a world-class stock exchange. This listing continues to ensure that Sasol Inzalo Public ordinary shares are traded
exclusively amongst BEE compliant persons, as defined in the JSE Listings Requirements. Refer to Table 1 for historical listed
prices per share of Sasol Inzalo Public Limited (RF) ordinary shares at 30 June.
Table 1: Sasol Inzalo Public Limited (RF) ordinary shares
2009* 2010* 2011* 2012** 2013** 2014** 2015** 2016
Listed price per share
year end n/a n/a n/a 40,00 51,06 138,00 70,11 39,70
year high - - - 50,00 100,00 160,00 153,00 51,90
year low - - - 25,00 30,02 45,10 60,00 21,60
* Not applicable as prior to 8 September 2011, the shares were not yet traded.
** Sasol Inzalo Public Limited (RF)'s shares started trading over-the-counter through Computershare from 8 September 2011.
*** Sasol Inzalo Public Limited (RF)'s shares were listed on the JSE's Empowerment Segment on 1 December 2015.
Table 2: Sasol Limited ordinary shares
2009 2010 2011 2012 2013 2014 2015 2016
Listed price per share
year end 269,98 274,60 355,98 342,40 431,54 632,36 450,00 397,17
year high 454,00 318,00 403,55 409,99 452,96 645,10 642,72 492,50
year low 221,00 255,56 270,03 303,45 336,00 420,00 365,10 358,79
Subsequent events
There were no events subsequent to 30 June 2016 requiring disclosure.
Change in directors
Ms Z Malinga (nee Ntwasa) was appointed as a Non-executive Director with effect from 1 December 2015. Mss L Mogudi and
TP Zondi resigned as Non-executive Directors with effect from 21 November 2015. Mss V Doo and MT Maake resigned as
Non-executive Directors with effect from 15 March 2016 and 31 March 2016 respectively.
Declaration of cash dividend
Taking into account the continued decline in the value of the investment in Sasol Limited due to the low oil price and current
volatile macro-economic environment, The Sasol Inzalo Public Limited (RF) Board of Directors has deemed it prudent to conserve
cash and have concluded that no cash dividend be declared for the year ended 30 June 2016 (2015: Rnil).
Sasol Inzalo Public Limited (RF) Group
Reviewed condensed consolidated financial statements
Statement of financial position
at 30 June 2016
Group
2016 2015
Rm Rm
ASSETS
Non-current asset
Investment in security 6 388 7 238
Current asset
Cash 20 39
Total assets 6 408 7 277
EQUITY AND LIABILITIES
Shareholders' deficit (955) (150)
Long-term debt 7 101 7 022
Deferred tax liability 112 252
Non-current liabilities 7 213 7 274
Short-term debt 145 148
Other payables 5 5
Current liabilities 150 153
Total equity and liabilities 6 408 7 277
Income statement
for the year ended 30 June 2016
Group
2016 2015
Rm Rm
Other expenses (17) (7)
Operating loss (17) (7)
Net finance costs (77) (73)
finance income 497 497
finance costs (574) (570)
Loss before tax (94) (80)
Taxation (1) (4)
Loss for year (95) (84)
Per share information Rand Rand
Basic loss per share (5,91) (5,22)
Diluted loss per share (5,91) (5,22)
Statement of comprehensive income
for the year ended 30 June 2016
Group
2016 2015
Rm Rm
Loss for year (95) (84)
Other comprehensive loss, net of tax
Items that can be subsequently reclassified to the income statement (710) (2 387)
Fair value of investment available-for-sale (850) (2 934)
Tax on items that can be subsequently reclassified to the income statement 140 547
Total comprehensive loss for year (805) (2 471)
Statement of changes in equity
for the year ended 30 June 2016
Group
Total
Share capital Investment shareholders'
and share fair value Accumulated equity/
premium reserve loss (deficit)
Rm Rm Rm Rm
Balance at 30 June 2014 371 3 486 (1 536) 2 321
Total comprehensive loss for year - (2 387) (84) (2 471)
Balance at 30 June 2015 371 1 099 (1 620) (150)
Total comprehensive loss for year - (710) (95) (805)
Balance at 30 June 2016 371 389 (1 715) (955)
Statement of cash flows
for the year ended 30 June 2016
Group
2016 2015
Rm Rm
Cash utilised in operating activities (17) (8)
Finance income received 497 497
Finance costs paid (219) (229)
Tax paid (1) (4)
Cash generated from operating activities 260 256
Repayment of capital (95) (1 455)
Repayment of finance costs (193) (1 000)
Loan raised 9 2 177
Cash effect of financing activities (279) (278)
Decrease in cash (19) (22)
Cash at beginning of year 39 61
Cash at end of year 20 39
Long-term debt
The group's borrowing powers are restricted by its memorandum of incorporation.
Group
Interest rate
at 30 June 2016 2015
Terms of repayment Security/Guarantee Currency 2016 Rm Rm
Secured debt
A preference shares repayable in Secured by Sasol
semi-annual instalments by preferred ordinary
September 2018 shares held by the
company Rand Fixed 11,1% 1 024 1 123
B preference shares repayable in Secured by Sasol
September 2018 preferred ordinary
shares held by the
company Rand Fixed 13,3% 791 792
C preference shares repayable in Guarantee by Variable 68%
September 2018 Sasol Limited Rand of prime 5 429 5 265
Unsecured debt
Sasol Limited interest-free loan
repayable in September 2018(1) Rand - 9 -
Non-participating preference share(2) Rand - * *
7 253 7 180
Unamortised loan costs (amortised over period of debt
using the effective interest rate method) Rand (7) (10)
7 246 7 170
Repayable within one year included in
short-term debt Rand (145) (148)
7 101 7 022
(*) Less than R500 000.
(1) An unsecured interest-free loan was obtained from Sasol Limited for the purpose of paying for costs associated with the listing of the BEE
shares of the company on the JSE Limited's Empowerment Segment on 1 December 2015.
(2) One 'A' ordinary share of R0,01 was issued to Sasol Limited during the period ended 30 June 2008. The rights to this share provide that
immediately when any ordinary share is issued, it is converted to a preference share. As a result of the ordinary shares issued during the year
ended 30 June 2009, the share was converted to a preference share. The preference share will be entitled in the aggregate to a dividend of R1,00
immediately prior to redemption, on 8 September 2018, and to redemption proceeds of R0,01.
Basic loss per share
Basic loss per share is derived by dividing loss for the year by the weighted average number of shares.
Number of shares Number of shares
Weighted average number of shares 16 085 199 16 085 199
Rm Rm
Basic loss for the year (95) (84)
Rands per share Rands per share
Basic loss per share (5,91) (5,22)
Due to the nature of the business, no potential dilution of shares exist and no headline earnings adjustments have arisen over
the last two years.
Basis of preparation
The condensed consolidated financial statements are prepared in accordance with the requirements of the JSE Limited Listings
Requirements for preliminary reports and the requirements of the Companies Act of South Africa. The JSE Listings Requirements
require preliminary reports to be prepared in accordance with the framework concepts and the measurement and recognition
requirements of International Financial Reporting Standards (IFRS) and the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council and
to also, as a minimum, contain the information required by IAS 34 Interim Financial Reporting. The accounting policies applied
in the preparation of the condensed consolidated financial statements are in terms of IFRS and are consistent with those
applied in the previous consolidated annual financial statements. The condensed consolidated financial statements are the
responsibility of the directors. The directors take full responsibility for the preparation of the condensed consolidated
financial statements. Dashni Sinivasan CA(SA), Senior Manager Finance: Reporting at Sasol South Africa (Pty) Ltd, is responsible
for this set of condensed consolidated financial statements and has supervised the preparation thereof in conjunction with Loyd
Matsilele CA(SA), Senior Accountant: Reporting at Sasol South Africa (Pty) Ltd.
Going concern
The group incurred a net loss of R95 million for the year ended 30 June 2016 and, as of that date, the group's total liabilities
exceeded its total assets by R955 million. Due to the structure of the BEE transaction, the group is regarded as a going
concern despite the negative equity position. Sufficient cash will be generated out of dividends received from Sasol Limited
to pay for the operating expenses as well as preference dividends and capital repayment on the preference shares which are
due in the short term. The A preference shares are secured by a first right over the Sasol preferred ordinary shares and the B
preference shares are secured by a second right over the Sasol preferred ordinary shares. The C preference shares are
guaranteed by Sasol Limited. At the end of the empowerment period in 2018, the Sasol ordinary shares remaining after
redeeming the preference share debt and paying costs may then be distributed to the black public in proportion to their
shareholding. Any shortfall between the value of the investment in Sasol Limited and the outstanding C preference debt value at
the end of the transaction will be settled directly by Sasol Limited in terms of the guarantee issued to the lenders. The directors
have made an assessment of the group's ability to continue as a going concern and there is no reason to believe the business
will not be a going concern in the year ahead.
Related party transactions
The group, in the ordinary course of business, entered into various transactions with related parties.
Significant financial instruments
Fair value
Valuation techniques and assumptions utilised for the purpose of calculating fair value. Fair value is determined using valuation
techniques as outlined below. Where possible, inputs are based on quoted prices and other market determined variables.
Fair value hierarchy
The following table is provided representing the significant financial instruments measured at fair value at reporting date, or
for which fair value is disclosed at 30 June 2016. The calculation of fair value requires various inputs into the valuation
methodologies used. The source of the inputs used affects the reliability and accuracy of the valuations. Significant inputs have
been classified into the hierarchical levels in line with IFRS 13, as shown below:
Level 1 Quoted prices in active markets for identical assets or liabilities.
Level 2 Inputs other than quoted prices that are observable for the asset or liability (directly or indirectly).
IFRS 13 fair value Fair value
Instrument hierarchy Rm Valuation method Significant input
Investment in security Level 1 6 388 Fair value Quoted market price for the same
- measured at fair value or similar instruments
Long-term debt Level 2 7 217 Discounted cash flow Market interest rate for the same
or similar instruments with
the same maturity profile and with
similar cash flows
These condensed consolidated financial statements for the year ended 30 June 2016 have been reviewed
by PricewaterhouseCoopers Inc., who expressed an unmodified review conclusion. A copy of the auditor's
review report is available for inspection at the company's registered office together with the financial
statements identified in the auditor's report.
The auditor's report does not necessarily report on all of the information contained in this
announcement/financial results. Shareholders are therefore advised that in order to obtain a full
understanding of the nature of the auditor's engagement they should obtain a copy of the auditor's report
together with the accompanying financial information from the issuer's registered office.
Contact information
Shareholder helpline Sasol contacts
Assistance with Shareholder and AGM queries Business address and registered office
Call centre: 0800 000 222 1 Sturdee Avenue
Telephone: +27 11 370 5000 Rosebank
Telefax: +27 11 688 5238 Johannesburg 2196
Email: sasolinzalo@computershare.co.za Republic of South Africa
Assistance with Forms of proxy Postal and electronic addresses
Call centre: 0800 000 222 and telecommunication numbers
Telephone: +27 11 370 5000 PO Box 5486
Email: proxy@computershare.co.za Johannesburg 2000
Republic of South Africa
Share registrars
Telephone: +27 11 441 3111
Computershare Investor Services (Pty) Ltd
Telefax: +27 11 788 5092
70 Marshall Street
Website: www.sasolinzalo.com
Johannesburg 2001
Republic of South Africa
PO Box 61051
Marshalltown 2107
Republic of South Africa
Telephone: +27 11 370 5000
Email: sasolinzalo@computershare.co.za
JSE Sponsor
Deutsche Securities (SA) Proprietary Limited
Directors (Independent Non-executive)
Ms K Njobe (Chairman)
Ms T Boikhutso, Ms A Haroon, Dr S Koyana,
Ms Z Malinga, Ms N Manyika, Ms Z Monnakgotla,
Ms CK Mokoena
Company Secretary
Sasol South Africa (Pty) Ltd
Company registration number
2007/030646/06, incorporated in the Republic of South Africa
Income tax reference number
9261678164
Sasol Inzalo ordinary shares
JSE: Share code: SIPBEE
ISIN: ZAE000210050
16 September 2016
Johannesburg
Sponsor: Deutsche Securities (SA) Proprietary Limited
Date: 16/09/2016 03:04:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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