Maintaining positive relationships with our various stakeholders is an important part of the way we do business. our key relationships The relationships we build and maintain with all our stakeholders are guided by our shared values. our vital statistics year ended 30 June 2010 o Regulatory authorities We work to establish and maintain constructive relationships with governments of the countries in which we operate, or plan to operate. We seek to identify how Sasol’s growth can support the growth strategies of these countries – ensuring alignment with their development and economic requirements and challenges. o Employees Without our employees there would be no other stakeholders; they are the foundation upon which all our activities depend. Maintaining effective communication with our staff is fundamental to the success of the company. We communicate with employees in many different ways, including through a regular letter from the chief executive, internal newsletters, the Sasol intranet, shop-floor briefings, posters and 360º performance reviews. While we conduct internal staff surveys and focus groups, we recognise that there is scope for further engagement, specifically on sustainable development. Market capitalisation (cap) Year-end share price (JSE, SA) Year-end share price (NYSE, USA) Total assets Total interest bearing debt Enterprise value (cap + debt) Rm R US$ Rm Rm Rm 2010 183 350 274,60 35,27 156 484 15 032 186 764 2009 179 780 269,98 34,82 145 865 17 814 181 194 Turnover External turnover, SA Rm Rm 2010 122 256 62 014 60 242 15 941 47 996 16 108 2009 137 836 68 561 69 275 13 648 50 503 15 672 External turnover, rest of world Rm Attributable earnings Wealth created Capital invested for growth and business enhancement Rm Rm Rm o Customers We interact directly with many of our customers, both to solicit their feedback on our products and services, and also as part of our commitment to ensure effective product stewardship, particularly for some of our more hazardous products. o Investors We keep shareholders and the investment community updated on our financial results and topical issues. This includes regular presentations and discussions on group performance and strategy with investment analysts, institutional investors and journalists in South Africa, North America and Europe. We also publish highlights of our annual and interim financial results in the main South African daily newspapers. o Business organisations We are active members of relevant industry associations in the countries in which we operate, enabling us to channel our views into governmental initiatives, as well as working cooperatively on industry initiatives with our peers, within the ambit of applicable legislation. Number of employees worldwide Employee cost to turnover 33 339 12,9 56% R386 m 0,51 Return on equity (ROE) Enterprise value: Earnings before tax, depreciation and amortisation (EBITDA) Earnings yield Dividend yield Dividend cover (times) Gearing 17,9 6,1 9,7% 3,82% 2,6 1,0% o The media We maintain a well-resourced group communication, investor relations, sponsorship and brand management team. In addition, most of our major businesses employ full-time communication staff whose tasks include media support. o Joint-venture partners We have joint ventures (JVs) in ten countries (including South Africa), covering all major areas of our business from chemicals to retailing fuel. Our shareholding varies from 40% – 50%, and the nature of our control over their operating activities ranges from total management control (contracted to Sasol), 100% control by the JV management, or management control by the other JV partners. While the nature and form of our engagement will vary depending on the level of control, the underlying principle of maintaining active and open engagement applies equally to all our JVs. Employment equity positions in SA Investment in employee training and development Safety recordable case rate (RCR)* (including occupational illnesses and service providers) o Local communities and civil society organisations In addition to the public participation initiatives implemented as part of new projects, we undertake community outreach initiatives at most of our existing operations. These engagements provide us with a deeper understanding of community interests and enable us to work in a proactive rather than reactive manner. o Suppliers and service providers We engage with our suppliers and service providers to understand and address their concerns, and to ensure they adopt and adhere to our safety standards. Their safety records are included in the group recordable case rate (RCR). o Tertiary institutions Our work with tertiary institutions remains an important component of our skills development initiatives – both for internal and external talent pools – and is key to our global research and development work. R:US$ exchange rate – average R:US$ exchange rate – closing 7,59 7,67 R: exchange rate – average R: exchange rate – closing 10,55 9,39 SD A more detailed review of our approach to stakeholder engagement is provided in our separate sustainable development report and on our website. * The recordable case rate (RCR) is a standard international measure for reporting work-related injuries and illnesses and other safety incidents resulting in injury. The RCR is the number of fatalities, lost workday cases, restricted work cases, medical treatments beyond first-aid cases and accepted illnesses, for every 200 000 employee hours worked, reported on a 12-month moving average basis. sasol group services 9 8 annual review 2010 • our business • our vital statistics sasol financing Securing competitive funding Sasol Financing is responsible for the group’s central treasury, ensuring that Sasol can meet its funding requirements and expansion objectives in time and as cost-effectively as possible, while keeping financial risks to a minimum. We had another busy and successful year in 2010. Due to the cash-conservation approach adopted by management in the volatile economic climate, Sasol maintained solid cash balances on a strong, deleveraged balance sheet. The group continued to generate considerable cash flows in the year, ensuring that it remained in a favourable position to fund its growth programme and meet all debt service requirements. It also allowed for the adoption of a progressive dividend policy. In June 2010, Sasol Financing secured a US$300 million multi-currency revolving credit facility from China Construction Bank at competitive terms. This facility is for global general corporate purposes and has a tenor of three years, with two extension options of a year each. The facility replaces the 400 million, five-year syndicated revolving credit facility which expired in May 2010. Sasol Financing also maintains sufficient short-term credit lines with a number of relationship banks for general treasury purposes. requirements for new growth opportunities. We work to secure the most appropriate financing structure in terms of cost, size and risk sharing. In the final quarter of 2010, BNP Paribas was appointed as the project financial adviser to assist with the funding of Sasol Synfuels International’s Uzbekistan joint-venture GTL opportunity. This is an important mandate. Sasol, along with its partners, Uzbekneftegaz and Petronas, aim to secure approximately 70% project debt. Project financing is new to Uzbekistan, a landlocked country where the primary funding risks relate to logistics and the political environment. To mitigate these risks, correct lender selection is imperative. We believe export credit agencies and development finance institutions will play an important role in securing the most competitive and appropriate financing for this opportunity. In December 2009, Sasol Financing assisted Sasol Oil and Total, the shareholders of the Sasolburg crude oil refinery, Natref, in concluding a ten-year financing facility. The R735 million facility has been provided by Nedbank. It will be used to upgrade the dispatch area, carry out phases one and two of the hydrofluoride-alky unit risk mitigation project, as well as to increase the capacity of the diesel unifiner unit. Most of these projects, which meet the group’s strategic goal of nurturing its existing assets, will be completed during 2011. Eurobond matured and was repaid. With a coupon rate of 3,375% per annum, the bond provided an attractive funding rate throughout its lifetime. It also raised Sasol’s credit profile in the international capital market. Sasol Group Services (SGS) coordinates all group activities and provides specialised services to the various business units. It aims to improve the efficiency, effectiveness and sustainability of all Sasol functions, avoiding duplication and endeavouring to provide streamlined services in a more cost-effective manner. Its activities are strategically aligned to Sasol’s Functional Excellence programme. In the pages that follow, we provide details of some of the key SGS functions and their highlights for the 2010 financial year. Other SGS functions include taxation, group strategy, corporate finance, investor relations and company secretarial services. Although the Sasol Inzalo Foundation is not managed as part of Sasol Group Services, it is an important part of Sasol’s investment in broader skills development in South Africa. It is therefore included after the corporate affairs review. Ø Human resources Sasol’s human resources strategy focuses on the sourcing of key skills, promoting long-term talent and career development, ensuring competitive rewards, and fostering sound employee relations and cultural transformation. These enable the group’s growth agenda. At year-end, Sasol had a total of 33 399 employees in our global operations. This comprises of 28 978 employees in our South African companies and 4 421 employees in our international companies. Net employment creation figures indicated a negative growth rate of 939 for the year (excluding joint ventures). Our employee turnover rate for the year in our South African operations was 5,05%, comprising 2,17% voluntary turnover and 2,88% involuntary turnover. The employee turnover rate for the year in our international companies was 9,68%, comprising 2,05% voluntary turnover and 7,63% involuntary turnover. More than 60% of Sasol employees are members of trade unions and are covered by collective agreements/works council agreements that have been entered into with trade unions within the various jurisdictions in which we operate. Trade union representatives are part of our formal joint management-worker health and safety committees, and also serve on the boards of our medical schemes and retirement funds. A wage negotiation process this year in our South African operations resulted in one strike exceeding Managing risks Sasol Financing, the group executive committee and the Sasol board of directors review the use of oil price hedges as a part of risk management. Although Sasol Financing has assisted in the past five years in arranging a hedge on 30% of Sasol Synfuels’ production, Sasol did not enter into a strategic oil hedge in 2010. Given that our balance sheet was strong and effective cost-cutting measures had been implemented early in the global economic crisis, hedging at the levels available in the market were not considered to be appropriate. We will continue to review hedging opportunities in the year ahead. Confirming our credit ratings Sasol’s corporate global credit ratings have been reviewed and confirmed by Moody’s and by Standard and Poor’s at Baa1/ stable/P-2 and BBB+/Negative/A-2, respectively. Our ratings have been retained at investment grade throughout the global economic crisis. Continuous improvement In 2010, in line with the group’s shared value of continuous improvement, Sasol Financing upgraded its SAP treasury risk management system to allow for improved efficiencies and controls. Sasol’s human resources strategy focuses on sourcing key skills, promoting talent and career development, ensuring competitive rewards and fostering sound employee relations and cultural transformation. annual review 2010 • operating reviews • sasol group services • human resources Facilitating new projects Sasol Financing is a specialist business partner to group and joint-venture companies, providing assistance and guidance to best meet their funding 70 An initial HIV testing drive, conducted throughout our South African operations between 2002 and 2005, found an incidence rate of 7,1% based on an 82% uptake of testing. Business units have been focusing on access to testing by increasing knowledge of its importance. Ongoing awareness programmes and encouraging testing through community and medical aid resources, as well as offering free voluntary counselling and testing (VCT) at wellness days and at our occupational health clinics, are part of this drive. The Sasol HIV/Aids policy commits to providing access to anti-retroviral therapy. The medical aid schemes provide HIV/Aids disease management to Sasol employees. A workplace treatment programme is operational at the Sasol Mining Medical Centre in Sasolburg. Anti-retroviral therapy is also available through public healthcare facilities in South African communities. Our testing and treatment initiatives are supported by comprehensive communications that encourage an interactive approach relating to the goals of prevention, support and care. Capacity building for the implementation and integration of the treatment programme within all businesses has been conducted by accredited coordinator training of peer educators and HIV/Aids coordinators. This year we embarked on a communication campaign to ensure a more visible and interactive prevention and support effort. The campaign’s theme “I am part of the solution” was based on the international World Aids Day 2009 theme “I am”. Launched in December 2009, it continued to September 2010. A campaign communications toolkit was developed to assist business units that are responsible for driving and supporting the campaign. Repaying our Eurobond At the end of the 2010 financial year, Sasol Financing’s five-year, 300 million 71 strive to create co-ownership in the achievement of our diversity aspirations. In March 2009, we launched a disability equity awareness campaign in our South African operations, with the aim of informing employees of their rights as members of this designated group, and to encourage them to voluntarily declare their disabilities. Medical verification of declared disabilities was also conducted, which gave employees the opportunity to apply for reasonable accommodation if required. A comprehensive audit of all our human resource policies and procedures, as well as of our physical facilities, was conducted by Wits University. This will ensure that any discriminatory barriers towards persons with disabilities are removed. Disability equity management principles and reasonable accommodation guidelines were also compiled and disability equity orientation workshops were presented to leaders and human resources practitioners. A summary of our progress on promoting employment equity in our South African operations, as required in terms of Section 22 of the Employment Equity Act (55 of 1998), is provided in the table below. Enhancing workforce diversity Apart from actively striving to reflect the economically active population of South Africa in our workforce profile at all levels (see table below), we are also embarking on a global diversity journey. This will aim to establish an integrated community of Sasol employees that leverages its diversity to achieve business success. We have set up diversity forums in our various business units. These forums – chaired by the business unit managing directors and attended by business unit leadership, unions and employee representatives – constantly Sasol is embarking on a global diversity journey to further expand its integrated community of employees. Thomas Sentsho, Eunice Mahlangu, Johan de Jager and Johnny Mofokeng are pictured in front of a heat recovery steam generation unit under construction at Secunda. a week’s duration. During the year, a total of 6 976 employee-days were lost due to industrial action. The group’s remuneration approach aims to ensure we remain globally competitive by supporting the attraction, retention and motivation of the right calibre of employees. Annual increases are determined in relation to market movements, inflation indicators and company performance. They are then translated into individual increases taking into account the scope and nature of the employee’s role, market benchmarks for similar positions and the employee’s personal performance and competence. Our performance management policy makes provision for a predefined performance appraisal process where this is not in conflict with bargaining council negotiation structures. A formal process exists within the organisation where, from the age of 50, structured sessions are held with employees to prepare them for retirement. We see retrenchment as a last resort, with alternate 72 positions always being sought first within the organisation. Should options of redeployment be found, training is offered to the affected employees to prepare them for the new role. Sasol supports its employees during times of restructuring and retrenchment, for example, through workshops aimed at empowering managers and employees to deal with the process, and providing on-site counselling. SD Our sustainable development report includes further details on our HR practices, and includes a detailed breakdown of our workforce by region and employment type, as well as further details on employee turnover. SD Promoting the wellbeing of our employees Our employee assistance programme (EAP) focuses on the psychosocial health of our employees and their dependants. The programme utilisation has increased from 18,2% in 2009 to 18,8% of employees for 2010. The provision of face-to-face counselling is well utilised, reflecting both the employees’ needs as well as their confidence in the EAP. Since May 2009, we have been monitoring an employee wellness scorecard for most business units in South Africa. We have also embarked on a programme to integrate occupational health data with Further details on our HIV/Aids programme, including data on the utilisation of our anti-retroviral therapy treatment programmes, are provided in our sustainable development report. Sasol group workforce profile at Sasol’s South African operations as at 30 June 2010 Summary of the employment equity progress report for public companies, as required in terms of Section 22 of the Employment Equity Act (55 of 1998). at June 2010 Top management Senior management Middle management Junior management Semi-skilled Defined decision (lowest entry level) Total permanent Non-permanent employees Grand total 9 31 851 3 595 6 976 1 288 12 750 74 12 824 Males African Coloured 0 9 93 255 73 12 442 2 444 Indian 2 23 367 350 82 1 825 5 830 White 71 205 2 417 4 382 1 124 167 8 366 12 8 378 Females African Coloured 2 4 250 737 884 395 2 272 18 2 290 1 2 43 136 48 6 236 0 236 Indian 1 6 210 172 43 0 432 1 433 White 4 25 763 1 468 613 15 2 888 7 2 895 Foreign National Male 1 9 123 81 341 37 592 1 593 Female 0 1 22 28 4 0 55 0 55 Total 91 315 5 139 11 204 10 188 1 921 28 858 120 28 978 other areas pertaining to healthcare and wellness, to ensure we have a holistic view of the health risks profile of employees. Our integrated Sasol HIV/Aids Response Programme (SHARP), now in its eighth year, is driven at business unit level and focuses on identifying and providing support services to HIV-infected employees and their families, as well as on preventing new infections through awareness, education and access to testing, counselling and treatment. annual review 2010 • operating reviews • sasol group services • human resources continued 73 in a stronger, more coordinated governance structure and strategy development process. We expect this to enhance the effectiveness of SH&E performance through greater shared learning and standardisation of best practices. This will be achieved by establishing coordinated communities of specialists who will be transferred from their current positions at the business units to a centralised shared services function. A strong compliance focus Part of our broader compliance-related activities entails an enhanced focus on compliance with SH&E legislation. During the year, we strengthened aspects of our compliance programme, including additional compliance monitoring actions. We continued to participate in the development of new policies and legislation in 2010, both on our own and through representative bodies. We monitor and report annually on the potential risks associated with laws and regulations in the countries in which we operate. sustainable development initiatives. Since 2001, we have been a signatory of the United Nations Global Compact (UNGC), an international initiative of the United Nations and business that addresses human rights, labour, environmental and corruption issues through a commitment to ten principles. In March 2008, we endorsed the UN Global Compact CEO Water Mandate. We also participate in the Global Product Strategy (GPS) initiative of the International Council of Chemical Associations (ICCA) that is designed to improve product stewardship in the global chemical industry. We support the principles of the Extractive Industries’ Transparency Initiative (EITI), and we are considering full endorsement of the EITI. We are corporate members of numerous local and international business, engineering, scientific and other organisations. We play an active role in the development and implementation of Responsible Care® initiatives and participate in various working groups of the European Chemical Industries’ Council (CEFIC) and South African Chemical and Allied Industries’ Association (CAIA). Sasol once again qualified for inclusion in the 2010 Dow Jones Sustainability Index (DJSI), and was ranked global leader in the oil and gas producers’ sector with an overall score of 76%. This was an improvement on our score of 75% in 2009. SD Independent accounts of our recent stakeholder processes on sustainable development are provided in our online sustainable development report. A list of our key memberships is available in our online report. Our 2010 safety, health and environmental performance Reaching a plateau in occupational safety Tragically, eight people (six Sasol employees and two service providers) died this year as a result of injuries sustained at Sasol. In addition, there was one service provider fatality at premises leased from Sasol by the service provider and not under the control of Sasol. Fatalities at our facilities are unacceptable and are avoidable. With this in mind, each safety incident has been carefully reviewed to identify the underlying root cause and to ensure that appropriate preventive measures are identified and implemented. The year-on-year improvement in our safety performance achieved up to 2008 has not been sustained during 2009 and 2010. Having achieved our earlier group target of a recordable case rate (RCR)* of 0,50 by June 2008, we committed ourselves in 2008 to a group target of less than 0,30 by June 2013. The RCR for the group in the 2010 financial year was 0,51 and, although it still compares favourably with global benchmarks, the result was only a 5% improvement over Recognised for our sustainability reporting and performance We have been recognised as among the leaders in corporate sustainable development reporting since our first stand-alone environmental report in 1996, having won numerous awards from independent panels. This year we received the following accolades for our reporting and performance practices: o Ranked global sector leader of the DJSI for the Oil and Gas Producers’ sector. o Achieved highest score in a GRI benchmarking review of 399 South African companies by Sustainability Services. o Ranked first for SA companies “making the greatest effort to address environmental impacts” and third for SA companies “with the best public reputation for addressing environmental issues” in an independent survey of the views of 100 South African companies conducted by the Trialogue consultancy. o Included in the Carbon Disclosure Project’s “2009 Carbon Disclosure Leadership Index” for South African companies. * The recordable case rate is a standard international measure for reporting work-related injuries and illnesses and other safety incidents resulting in injury. The RCR is the number of fatalities, lost workdays, restricted work cases, medical treatments beyond first-aid cases and accepted illnesses for every 200 000 employee hours worked. From 2006 onwards, our RCR includes employees and service providers, and recordable injuries as well as occupational illnesses. Currently, about 11% of the RCR is attributable to illnesses. Engaging in stakeholder dialogue on sustainable development issues In addition to our interactions with various stakeholders almost daily, over the past few years we have also entered into dialogue with some stakeholders specifically on sustainable development issues. The aim of these consultations has been to identify and respond to our stakeholders’ interests, and to understand their views regarding our performance. These consultations have included externally facilitated processes with trade unions, employees, investors, non-governmental organisations and community representatives, as well as academics and researchers. Participating in global initiatives As a global operation actively engaged in different regional markets, Sasol participates in various international Lucas Mngomezulu, production standby, checking for the possible presence of gases in a vessel that requires special safety measures for confined space entry. 76 annual review 2010 • operating reviews • sasol group services • safety, health and environment continued 77 www.blacksunplc.com © Black Sun Plc 2011 23
