Business description – setting the scene? Sasol annual review and summarised financial information 2010 2010 Annual Review focused and energised sasol annual review and summarised financial information 2010 Oil & Gas South Africa ww.sasol.com AR Our business Our structure Our global presence Our integrated business model Our products Our key relationships Our vital statistics Our strategic direction Our growth opportunities worldwide Principal integrated risks Our board of directors Our group executive committee Business reviews Chairman’s statement Chief executive’s report Operating reviews Sasol Mining Sasol Gas Sasol Synfuels Sasol Oil Sasol Synfuels International (SSI) Sasol Petroleum International (SPI) Sasol Polymers Sasol Solvents Sasol Olefins & Surfactants Sasol Nitro, Sasol Wax, Sasol Infrachem, ChemCity and Merisol Sasol Technology Sasol New Energy Sasol Financing Sasol group services Human resources Safety, health and environment (SH&E) Legal compliance Corporate affairs Sasol Inzalo Foundation Information management Supply chain management Summarised financial information Salient features Statement of financial position Income statement Contact information 2 3 4 6 8 9 10 14 16 18 20 22 26 The adoption of the third King Code of Governance Principles (King III) in 2010, and its specific requirements for “integrated reporting”, is reflected in the changes made to the narrative structure of this year’s annual review. We believe that a more holistic articulation of a business – one that does not artificially split financial and “nonfinancial” disclosure – will provide a more complete analysis to satisfy the information needs of the broad range of stakeholders that use the annual review. A core part of this approach is the integration of social and environmental performance issues within our operating reviews. This complements our separate sustainable development report on www.sasolsdr.com. In line with this approach, the sustainable development-related issues managed by functional departments within Sasol are reported in a newly-introduced review for Sasol Group Services, and not in a summarised sustainable development chapter as in the past. For 60 years, Sasol has demonstrated its innovative spirit in the energy and chemicals sectors in South Africa. Sasol has grown to become the country’s leading fuel provider. Today we are an international player in the energy and chemicals sectors, and a preferred technology partner. Sasol’s liquid fuels and chemicals products are used in almost every sphere of life. Sasol is also a major contributor to the development of people and the improvement of socioeconomic conditions in the countries in which we operate. In the last ten years, we have made significant strides in our commitment to As an integrated energy and chemicals company Sasol aims to meet stakeholders’on our innovation environmental sustainability, premised expectations and technology leadership. 30 33 36 39 42 45 48 51 54 57 63 66 69 Through our commitment to integrated sustainability reporting, Sasol aims to provide stakeholders with a balanced view of the performance of our business through a suite of reporting publications, indicated below. and to exceed targeted rates of return in a sustainable manner. The 2010 Sasol annual report consists of two books: AR Annual review Including business overview, chairman’s statement, chief executive’s report and operating reviews. our integrated business model emerge from the economic turmoil of the last 18 months, As we we are focused and energised. We have scrutinised our assets and interrogated our plans for the future. We are leaner and Exploration and production more fl raw materials through its coal-mining activities, Sasol obtains itsexible, and we understand what we have to do to oil and gas exploration, and purchasesprofitably market.sustainably. transform and grow, from the open and Some raw materials are sold directly to external markets. We have the people and the technology, the experience and the innovative spirit to reach new frontiers, to meet the challenges of the future, and to grow our business significantly beyond where it is today. Innovation In downstream chemical process technology, we have developed several proprietary processes for recovering and processing a range of solvents, waxes and phenolics for the world market, as well as 1-pentene, 1-hexene, 1-heptene, 1-octene and higher alpha olefins, the last of which we convert into Safol™ H(C12,13) alcohols. We have developed and patented several base-metal catalysts for our FT synthesis processes. We have also been innovative in coal exploration and mining, where Sasol Mining (sometimes in partnership with technology suppliers) has developed high-extraction mining methods, advanced directional drilling techniques, roof-bolting systems, continuousminer systems and a virtual-reality training system for continuousminer operators, among other cost-saving innovations. FIN Annual financial statements Including a full analysis of the group’s results by the chief financial officer. Research Besides the research and development and new-product formulation and testing work we do at Sasolburg through Sasol Technology’s fuel research group, we conduct further fundamental research at the Sasol Advanced Fuels Laboratory (SAFL), in collaboration with the University of Cape Town, and the Sasol Fuels Application Centre (SFAC). SFAC enables us to conduct sea-level engine and fuel research and tests in line with international trends. Other related publications: 20F Form 20-F Our annual report under the Securities Exchange Act of 1934 on Form 20-F was filed with the United States Securities and Exchange Commission on 28 September 2010. The Form 20-F is available on our website (www.sasol.com). o 71 75 82 84 85 86 86 SD 0Sustainable development report This separate report provides more detail of particular interest to certain of our stakeholder groups, such as sustainable development analysts and professionals. In the interests of shortening the printed report and making for easier and more focused reading, we have included additional detail on our website (www.sasolsdr.com). These reports provide a complete view of the group’s strategy, businesses, performance against objectives, and prospects. 88 90 91 ibc www.sasol.com Through Sasol Petroleum International (SPI) and Sasol Gas, we obtain natural gas through the cross-border pipeline linking the Pande and Temane fields in Mozambique to our Secunda complex. We use this gas as our sole hydrocarbon feedstock at Sasolburg and as a supplementary feedstock to coal at Secunda. Sasol Mining supplies most of the feedstock coal we need for our Sasol petrochemical plants. o Our GTL diesel has a higher quality than diesels derived from crude oil. GTL diesel has a high cetane number (70+ versus the conventional 45 – 55), low sulphur (less than five parts per million), low aromatics (less than 1%) and excellent cold-flow characteristics. Our GTL diesel, therefore, is ideal as a low-emissions, premium grade fuel and as a blend stock for upgrading conventional diesels. Markets Sasol markets products directly to the consumer, as well as to commercial and industrial customers, thereby integrating its upstream and downstream activities. o Our proprietary Fischer-Tropsch technology annual review 2010 1 Greenhouse gas (GHG) emissions Coal is an important part of the world’s energy mix, and Sasol will continue to produce transportation fuels from coal and gas. However, we are committed to substantially reducing our carbon emissions by, among others, developing more efficient production processes and investigating carbon capture and storage (CSS) solutions. We have set several targets to reduce our greenhouse gas emissions intensity by 15% (on the 2005 baseline) in all our operations by 2020, and we have spent R100 million (US$11,1 million) in 2009 on energy efficiency-related projects, which should achieve a reduction of around 760 000 tons of GHG emissions a year. Our global emissions of GHG, which have been independently verified, increased from 71,3 million tons (Mt) in 2009 to 75,8 Mt in 2010, mainly due to the inclusion of Oryx GTL emissions data. However, our emissions intensity improved to 3,05 (measured as carbon dioxide equivalent per ton of production) in 2010. This compares with 3,24 in 2009 and 3,02 (restated) in 2008. The improved overall GHG intensity is a result of the inclusion of Oryx GTL, and Sasol Polymers and Sasol Synfuels significantly increasing production volumes, which offset the emissions increase. The targets we have set for all our operations reflect not only our desire to be a responsible company, but also our awareness that a strong business case exists for sustainable development. Water Various technological advancements in effluent recycling, cooling, pre-treatment of water for steam generation and solids handling are paving the way for significantly improved zero liquid effluent discharge designs, which are being developed irrespective of water availability or pricing. New energy Sasol New Energy Holdings (SNE) was created to focus on new technologies that can be integrated with our core technologies to reduce our GHG footprint. As part of our commitment to reduce production of carbon dioxide in our operations and integrate new technology into our FT processes, SNE will look into renewable and lower-carbon energy options such as solar, biofuels and biomass, as well as nuclear, hydro and natural gas. 4 annual review 2010 • our business • our integrated business model 5 pp IFC-1 and pp 4-5 Sasol introduce their report by providing a brief outline of what information is contained within the report as well as sign-posting the reader to other related publications. To provide information of the business actions, processes and outcomes, Sasol demonstrate their integrated business model. Issues which arise as a result of the business activities, including greenhouse gas emissions, water, and new energy, are discussed in this spread showing that these issues are regarded as central to the Company. www.blacksunplc.com © Black Sun Plc 2011 7
