As filed with the United States Securities and Exchange Commission on 2 November 2006
 UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 20-F
 REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THESECURITIES EXCHANGE ACT OF 1934
 OR
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934 – for the year ended 30 June 2006
 OR
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934
 OR
 SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934
 Commission file number: 001-31615
 Sasol Limited
  Republic of South Africa
  1 Sturdee Avenue, Rosebank 2196
 South Africa
   Title of Each Class
 Name of Each Exchange on Which Registered
      Listed on the New York Stock Exchange not for trading or quotation purposes, but only in connection with the registration ofAmerican Depositary Shares pursuant to the requirements of the United States Securities and Exchange Commission.
 None
 None
   622,866,948 ordinary shares of no par value
  Yes     
  No
   Yes     
  No
  Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to filesuch reports), and (2) has been subject to such filing requirements for the past 90 days.
 Yes     
  No
   Large accelerated filer
 Accelerated filer
 Non-accelerated filer
  Item 17
 Item 18
   Yes     
  No


TABLE OF CONTENTS
 Page
 PART I


Page
                                                          PART II
     MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS ANDUSE OF PROCEEDS
                PART III
          GLOSSARY OF TERMS
  LOCATION MAPS


PRESENTATION OF INFORMATION
  law. Our consolidated financial statements included in our corporate filings in South Africa were prepared inaccordance with International Financial Reporting Standards (IFRS), for the financial years ended 30 June 2002,30 June 2003, 30 June 2004, 30 June 2005 and 30 June 2006.
  accordance with United States Generally Accepted Accounting Principles, or US GAAP. Our consolidatedfinancial statements for each of the financial years ended 30 June 2002, 30 June 2003, 30 June 2004, 30 June2005 and 30 June 2006 have been audited by KPMG Inc., independent accountants.
         this Form 20-F contains translations of certain rand amounts into US dollars at specified rates. These randamounts do not represent actual US dollar amounts, nor could they necessarily have been converted into US dollars at the rates indicated. Unless otherwise indicated, rand amounts have been translated into US dollarsat the rate of R7.76 per US dollar, which was the noon buying rate for customs purposes of the rand as reportedby the Federal Reserve Bank of New York on 29 September 2006.
 All references in this Form 20-F to “years” refer to the financial years ended on 30 June.
  International (SI) metric measures for all global operations. A ton or tonne denotes one metric ton equivalent to1,000 kilograms (kg). Sasol’s reference to metric tons should not be confused with an imperial ton equivalent to2,240 pounds (or about 1,016 kg). Barrels per day or bpd is used to refer to our oil and gas production.
   Limited, its group of subsidiaries and its interests in associates and joint ventures. All references in this Form20-F are to Sasol Limited or the companies comprising the group, as the context may require. All references to“(Pty) Limited” refers to (Proprietary) Limited, a form of corporation in South Africa which restricts the right oftransfer of its shares, limits the number of members and prohibits the public offering of its shares.
  Africa and its government. All references to the “JSE” are to the JSE Limited (formerly known as the JSESecurities Exchange, South Africa). All references to “SARB” refer to the South African Reserve Bank and allreferences to “PPI” refer to the Producer Price Index, which is a measure of inflation in South Africa. Allreferences to “GTL” and “CTL” refer to our gas-to-liquids and coal-to-liquids processes, respectively.


under US GAAP. Our discussion of business segment results follows the basis on which management measuresbusiness segment performance. Presentation of business segment results on a management basis differs fromresults on a US GAAP basis in certain respects. For more information on the reconciliation of segmentalturnover and operating profit see Note 3 to our consolidated financial statements.


FORWARD-LOOKING STATEMENTS
  other filings with the United States Securities and Exchange Commission, in reports to shareholders and in othercommunications. These statements may relate to analyses and other information which are based on forecasts offuture results and estimates of amounts not yet determinable. These statements may also relate to our futureprospects, developments and business strategies. Examples of such forward-looking statements include, but arenot limited to:
          Nigeria, the Arya Sasol Polymer Project, the potential development of two CTL projects in China and other investments), acquisitions of new businesses or the disposition of existing businesses;
                 “endeavor” and “project” and similar expressions are intended to identify forward-looking statements, but arenot the exclusive means of identifying such statements.


specific, and there are risks that the predictions, forecasts, projections and other forward-looking statements willnot be achieved. If one or more of these risks materialize, or should underlying assumptions prove incorrect, ouractual results may differ materially from those anticipated in this Form 20-F. You should understand that anumber of important factors could cause actual results to differ materially from the plans, objectives,expectations, estimates and intentions expressed in such forward-looking statements. These factors includeamong others, and without limitation:
                    make investment decisions, you should carefully consider the foregoing factors and other uncertainties andevents. Such forward-looking statements apply only as of the date on which they are made, and we do notundertake any obligation to update or revise any of them, whether as a result of new information, future eventsor otherwise.


ENFORCEABILITY OF CERTAIN CIVIL LIABILITIES
  officers reside outside the United States, principally in South Africa. You may not be able, therefore, to effectservice of process within the United States upon those directors and officers with respect to matters arisingunder the federal securities laws of the United States.
  United States. As a result, you may not be able to enforce against us or our directors and officers judgmentsobtained in United States courts predicated on the civil liability provisions of the federal securities laws of theUnited States.
        public policy, including observance of the rules of natural justice which require that the documentsinitiating the proceeding were properly served on the defendant and that the defendant was given theright to be heard and represented by counsel in a free and fair trial before an impartial tribunal;
      the person to whom the compensation is awarded. Although the award of punitive damages is generallyunknown to the South African legal system that does not mean that such awards are necessarily contrary topublic policy. Whether a judgment was contrary to public policy depends on the facts of each case. Exorbitant,unconscionable, or excessive awards will generally be contrary to public policy. South African courts cannotenter into the merits of a foreign judgment and cannot act as a court of appeal or review over the foreign court.South African courts will usually implement their own procedural laws and, where an action based on aninternational contract is brought before a South African court, the capacity of the parties to the contract willusually be determined in accordance with South African law. It is doubtful whether an original action based onUnited States federal securities law can be brought before South African courts. A plaintiff who is not resident inSouth Africa may be required to provide security for costs in the event of proceedings being initiated in SouthAfrica. Furthermore the Rules of the High Court of South Africa require that documents executed outside SouthAfrica must be authenticated for the purpose of use in South Africa.


PART I
 ITEM 1.
 IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS


ITEM 2.
 OFFER STATISTICS AND EXPECTED TIMETABLE


11
 ITEM 3.
 KEY INFORMATION
 3.A
 Selected financial data
 The following information should be read in conjunction with “Item 5. – Operating and financial review
 and prospects” and the consolidated financial statements, the accompanying notes and other financialinformation included elsewhere in this annual report on Form 20-F.
 The US GAAP financial data set forth below has been extracted from the audited consolidated financial
 statements for the years ended and as at 30 June 2006, 30 June 2005 and 30 June 2004 which are included inthis Form 20-F and which have been prepared in accordance with US GAAP. The US GAAP financialinformation for the two years ended and as at 30 June 2003 and 30 June 2002 has been extracted from auditedfinancial statements not included in this annual report on Form 20-F. The IFRS financial data set forth below forthe years ended as at 30 June 2006, 30 June 2005, 30 June 2004, 30 June 2003 and 30 June 2002 has beenderived from audited consolidated financial statements prepared in accordance with IFRS.
 Year ended
 30 June
 30 June
 30 June
 30 June
 30 June
 30 June
 1
 2002
 2003
 2004
 2005
 2006
 2006
 restated
 restated
 restated
 restated
 (US$ in
 (Rand in millions)
 millions)
 (except per share information and weighted average shares in issue)
 Income statement data:
 US GAAP
 Continuing operations
         2
        2
       Discontinued operations
 Net (loss)/income from discontinued operations (including fair value write-down), net of tax
     Earnings attributable to shareholders
 2
       IFRS
 Continuing operations
         3
        3
       Discontinued operations
      Total profit
 3


12
 Year ended
 30 June
 30 June
 30 June
 30 June
 30 June
 30 June
 1
 2002
 2003
 2004
 2005
 2006
 2006
 restated
 restated
 restated
 restated
 (US$ in
 (Rand in millions)
 millions)
 (except per share information and weighted average shares in issue)
 Per share information (Rand and US$):
 US GAAP
 Basic earnings/(loss) per share
                   Diluted earnings/(loss) per share
                   IFRS
 Basic earnings/(loss) per share
                   Diluted earnings/(loss) per share
                    4
       Weighted average shares in issue (in millions):
                   Balance Sheet data:
 IFRS
  5
        2
              US GAAPTotal assets
                      Translations into US dollars in this table are for convenience only and are computed at the noon buying rate of the Federal ReserveBank of New York on 29 September 2006 of R7.76 per US dollar. You should not view such translations as a representation that suchamounts represent actual US dollar amounts.
  In accordance with the adoption of SFAS 123(R), Share-based compensation, in 2006, the financial statement amounts for priorperiods presented have been adjusted to reflect the grant-date fair value of equity awards issued through the Sasol Share IncentiveScheme.
  In accordance with the adoption of IFRS 2, Share-based payment, in 2006, the financial statement amounts for prior periods presentedhave been adjusted to reflect the grant-date fair value of equity awards issued through the Sasol Share Incentive Scheme.
  Includes the final dividend which was declared subsequent to the balance sheet date and is presented for information purposes only.No provision for this final dividend has been recognized.
    All financial statement amounts in the periods previously presented have been adjusted to reflect the presentation of Sasol Olefins &Surfactants as discontinued operations.


Exchange rate information
   Rand per US dollar for the year ended 30 June or the respective month
 Average
 1
 High
 Low
                      2
                         2
    1.
 The average exchange rates for each full year are calculated using the average exchange rate on the last day of eachmonth during the period. The average exchange rate for each month is calculated using the average of the dailyexchange rates during the period.
 2.
 Through 29 September 2006.
  3.B
 Capitalization and indebtedness
  3.C
 Reasons for the offer and use of proceeds
  3.D
 Risk factors
 Fluctuations in exchange rates may adversely affect our business, operating results, cash flows andfinancial condition
  in US dollars and some part in euro, derived either from exports from South Africa or from our manufacturingand distribution operations outside South Africa. Also, a significant part of our turnover is determined by the US dollar, as petroleum prices in general and the price of most petroleum and chemical products in South Africaare based on global commodity and benchmark prices which are quoted in US dollars. Hence, a large part of ourgroup turnover is denominated in US dollars or influenced by the underlying global commodity and benchmarkprices which are quoted in US dollars. Furthermore, a significant part of our capital expenditure is also US dollar-denominated, as it is directed to investments outside South Africa or constitutes equipment or plantimported into South Africa. In our South African operations the majority of our costs are rand based and in ourEuropean operations a large part of our costs are euro based. Accordingly, fluctuations in the exchange ratesbetween the rand and US dollar, the rand and the euro and the euro and the US dollar may have a material effecton our business, operating results, cash flows and financial condition.
  R5.99 and R7.43. This compares to an average exchange rate of R6.21 during the 2005 financial year,fluctuating between R5.62 and R6.92. The rand exchange rate is impacted by various international and South


African economic and political factors and we are unable to forecast whether the relatively stable performanceof the rand in the 2005 and 2006 financial years will continue in the foreseeable future. Subsequent to 30 June2006 the rand has weakened significantly against the US dollar and euro.
  may not be an accurate reflection of its underlying value, due to the potential effect of, among other factors,exchange controls. For more information regarding exchange controls in South Africa see “Item 10.D –Exchange controls”.
  transactional risks in accordance with our group hedging policies see “Item 11 – Quantitative and qualitativedisclosures about market risk”.
 Fluctuations in refining margins and crude oil, natural gas and petroleum product prices may adverselyaffect our business, operating results, cash flows and financial condition
  and international supply and demand fundamentals and factors over which we have no control. Worldwidesupply conditions and the price levels of crude oil may be significantly influenced by international cartels, whichcontrol the production of a significant proportion of the worldwide supply of crude oil, and by politicaldevelopments, especially in the Middle East. Other factors which may influence the aggregate demand andhence affect the markets and prices for petroleum products in regions which influence South African fuel pricesthrough the Basic Fuel Price (BFP) price formula (used for the calculation of the refinery gate price in SouthAfrica) and/or where we market these products, may include changes in economic conditions, the price andavailability of substitute fuels, changes in product inventory, product specifications and other factors. In recentyears, prices for petroleum products have fluctuated widely. For most of the 2006 financial year the crude oilprice fluctuated at levels above US$60 per barrel. See “Item 5 – Operating and financial review and prospects”.
  Through our equity participation in the National Petroleum Refiners of South Africa (Pty) Limited (Natref)crude oil refinery, we are exposed to fluctuations in refinery margins resulting from differing fluctuations ininternational crude oil and petroleum product prices. We are also exposed to changes in absolute levels ofinternational petroleum product prices through our synthetic fuels and oil operations. Fluctuations ininternational crude oil prices affect our results mainly through their indirect effect on the BFP price formula, see“Item 4.B – Business overview – Sasol Synfuels” and “Sasol Oil”, as well as the impact on oil derivedfeedstock. Prices of petrochemical products and natural gas are also affected by fluctuation in crude oil prices.Fluctuations in the price of crude oil and petroleum products can have a material adverse effect on our business,operating results, cash flows and financial condition.
  exchange rate fluctuations affecting the acquisition cost of our crude oil needs. During the course of the 2006financial year, we have again hedged a portion of our synthetic fuel production against falling oil prices inrespect of the 2007 financial year. See “Item 11 – Quantitative and qualitative disclosures about market risk”.While the use of these instruments may provide some protection against short-term fluctuation in crude oilprices it does not protect us against longer term fluctuations in crude oil prices or differing trends between crudeoil and petroleum product prices.
  petroleum products prices. Fluctuations in any of these may have a material adverse effect on our business,operating results, cash flows and financial condition.


Cyclicality in petrochemical product prices may adversely affect our business, operating results, cashflows and financial condition
  cyclical. Typically, higher demand during peaks in the industry business cycles leads producers to increase theirproduction capacity. Although peaks in the business cycle have been characterized by increased selling pricesand higher operating margins, in the past such peaks have led to overcapacity and supply exceeding demandgrowth. Low periods in the business cycle are then characterized by decreasing prices and excess capacity,which can depress operating margins and may result in operating losses. We believe that some areas within thechemicals industry currently show overcapacity with the possibility of further capacity additions in the next fewyears. We cannot assure you that future growth in demand will be sufficient to absorb current overcapacity orfuture capacity additions without downward pressure on prices of chemical products. Such pressure may have amaterial adverse effect on our business, operating results, cash flows and financial condition.
 We may not be able to exploit technological advances quickly and successfully
  petrochemical products, are highly dependent on the development and use of advanced technologies. Thedevelopment, commercialization and integration of the appropriate advanced technologies can affect, amongother things, the competitiveness of our products, the continuity of our operations, our feedstock requirementsand the capacity and efficiency of our production.
  further developed in the fields in which we operate. Unexpected rapid advances in employed technologies or thedevelopment of novel processes can affect our operations and product ranges in that it could render thetechnologies we utilize or the products we produce obsolete or less competitive in the future. Difficulties inaccessing new technologies may impede us from implementing them and competitive pressures may force us toimplement these new technologies at a substantial cost. Examples of new technologies which may in the futureaffect our business include the following:
  including the further development of fuel cells or the large scale broadening of the application ofelectricity to drive motor vehicles. These may be disruptive to the use of hydrocarbon and refined crudeoil-derived fuels.
  equivalent properties to that of Fischer-Tropsch derived fuels, which may erode the competitiveadvantage of Fischer-Tropsch fuels.
  manipulated, resulting in highly selective and high purity chemical products, which may render the useof our mixed feed stream catalytic-based production processes uncompetitive.
  on our business or on our ability to provide competitive products. Our ability to compete will depend on ourtimely and cost-effective implementation of new technological advances. It will also depend on our success incommercializing these advances in spite of competition we face by patents registered by our competitors. If weare unable to implement new technologies in a timely or cost-efficient manner, or penetrate new markets in atimely manner in response to changing market conditions or customer requirements, we could experience amaterial adverse effect on our business, operating results, cash flows and financial condition.
 Our GTL projects may not prove sufficiently viable or as profitable as planned


solely or through our joint venture with Chevron Corporation (Chevron), is a capital-intensive process andrequires us to commit significant capital expenditure and devote considerable management resources in utilizingour existing experience and know-how, especially in connection with Fischer-Tropsch synthesis technologies.See “Item 4.B – Business overview – Sasol Synfuels International”. This process and its products may also giverise to patent risks in connection with the use of our GTL technology. See below, “Intellectual property risksmay adversely affect our products or processes and our competitive advantage”.
  believe that GTL fuels will in time develop to become an efficient and widely used alternative and/orsupplement to conventional diesel fuel. In assessing the viability of our GTL projects, we make a number ofassumptions relating to specific variables, mainly including:
              relevant factor, may adversely affect the profitability or even the viability of our GTL investments. Should wenot be successful in the implementation of our GTL projects, we may be required to write off significantamounts devoted to them and we may need to redirect our strategy for future growth. In view of the resourcesinvested in these projects and their importance to our growth strategy, problems we may experience as a result ofthese factors may have a material adverse effect on our business, operating results, cash flows and financialcondition and opportunities for future growth.
 There are risks relating to countries in which we operate that could adversely affect our business,
 operating results, cash flows and financial condition
  significantly differing political, social, economic and market conditions. See “Item 18 – Financial statements –Note 3 – Segmental analysis” for a description of the extent of our operations in the main countries and regionsin which we operate. We are a South African domiciled company. The majority of our operations are located inSouth Africa and 81% of our turnover from continuing operations is generated from our South African facilities.Specific aspects of country risks that may have a material impact on our business, operating results, cash flowsand financial condition include:


Middle Eastern countries that have in the past to a greater or lesser extent experienced social, economic andpolitical uncertainty. More recently certain countries in which we operate have achieved greater social, politicaland economic stability. Since 1994 South Africa, in particular, has experienced significantly improved social,economic and political conditions.
   possible reforms to the fiscal regime applicable to windfall profits in South Africa’s liquid fuel energy sector,with particular reference to the synthetic fuel industry. A discussion document for public comment was releasedin this regard. We have presented our submissions in writing to the task team and have made oral submissions atthe public hearings. We cannot predict whether this investigation will lead to amendments to the current fiscalregime, which we are presently subject to.
 
  interest rates. Should increases in these rates occur, our costs could increase and our operating margins could beaffected. High interest rates could also adversely impact on our ability to ensure cost-effective debt financing inSouth Africa.
 
  water supply in South Africa, may need to be further upgraded and expanded and in certain instances possibly atour own cost.
 
  general workers, artisans and technical operators. Although we have had minor labor disruptions in South Africaduring 2006 we have not experienced significant labor disruptions in recent years. We have constructive relationswith our employees and their unions, but we cannot assure you that significant labor disruptions will not occurin the future.
 
  Southern African region. Although we believe South Africa’s growing stature has increasingly separated it fromthe effects of regional issues, such political or economic instability in neighboring countries could negativelyaffect market conditions in South Africa.
 
  Common Monetary Area, which includes South Africa, subject to South African Reserve Bank dispensation.These regulations apply to transactions involving South African residents, including both natural persons andlegal entities. These regulations also affect our ability to borrow funds from non-South African sources for use inSouth Africa or to repay these funds from South Africa and, in some cases, our ability to guarantee theobligations of our subsidiaries with regard to these funds. These restrictions have affected the manner in whichwe have financed our acquisitions outside South Africa and the geographic distribution of our debt. See “Item 10.D – Exchange controls” and “Item 5.B – Liquidity and capital resources”.


levels of the organization, we estimate that 7% of our South African workforce may be currently infected, withthe highest concentration of infections in our mining operations. This is less than the 10% to 15% initiallyestimated during 2004. Based on an actuarial study, which excludes the positive impact of any prevention andmanagement intervention program, we estimate that, while the percentage of infected employees may not risesignificantly in the forthcoming years, there will be a significant increase in the number of AIDS-relatedfatalities. See “Item 6.D – Employees”.
  productivity. We also incur costs relating to the recruitment and training of new personnel. We are not in aposition to accurately quantify these costs. Based on our actuarial models, we estimate that the impact ofHIV/AIDS on our payroll expenses should be less than 1% of our current payroll for our South Africanemployees by the year 2007. This calculation is based on the estimated financial impact on production resultingfrom the projected prevalence of HIV/AIDS among our workforce, but does not take into account indirect costsof productivity losses. We are investing human and financial resources to establish and maintain programs toaddress the HIV/AIDS pandemic. In September 2002, we launched the Sasol HIV/AIDS Response Programme(SHARP), which is our initiative to respond to the HIV/AIDS pandemic, on which we have spent a total amountof approximately R22 million to June 2006. We are committed to the on-going funding of SHARP.
  with the HIV/AIDS pandemic will not have a material adverse effect on our business, operating results, cashflows and financial condition.
 
  ownership and other regulations which are designed to address country specific social and economictransformation issues.
  initiatives to bring about meaningful transformation to assist in correcting the imbalances and injustices of theapartheid era. We consider these initiatives to be a strategic imperative and we acknowledge the risk of notvigorously pursuing them or of them not succeeding and adversely impacting on the long-term sustainableperformance and reputation of our company. It is not currently known what additional costs or implications willarise for us to comply with these transformation initiatives.
  disadvantaged South Africans in the country’s economy, in November 2000, we became party to an agreementwith the government and the liquid fuels industry, the Charter for the South African Petroleum and Liquid FuelsIndustry on Empowering Historically Disadvantaged South Africans in the Petroleum and Liquid Fuels Industry(the Liquid Fuels Charter). The Charter deals with the following key matters:


Africans hold at least 25% equity ownership of our liquid fuels business by the year 2010. We entered into a25% equity transaction with Tshwarisano LFB Investment (Pty) Limited (Tshwarisano), on 1 July 2006 and weare now compliant with the equity ownership targets of the Liquid Fuels Charter. See “Item 8.B – Significantchanges”.
  Our operations are subject to various laws and regulations in the countires in which we operate” and “Item 8.B –Significant changes”.
  unions reached broad agreement on a charter (the Mining Charter), designed to facilitate the participation ofhistorically disadvantaged South Africans in the country’s mining industry. The Charter’s stated objectivesinclude the:
 
  
 
  
  Mining Charter, requires mining companies to ensure that historically disadvantaged South Africans hold at least15% ownership of mining assets or equity in South Africa within 5 calendar years (i.e. by 2009) and 26%ownership within 10 calendar years (i.e. by 2014) from the effective date of the Mineral and PetroleumResources Development Act which was on 1 May 2004. The Charter further specifies that the mining industry isrequired to assist historically disadvantaged South Africans in securing finance to fund their equity participationup to an amount of R100 billion within the first 5 calendar years after the implementation of the aforementionedAct. Beyond this R100 billion commitment, the Mining Charter requires that participation of historicallydisadvantaged South Africans should be increased towards the 26% target on a willing buyer-willing seller basis.See “Item 4.B – Business overview – Sasol Mining” and “Empowerment of historically disadvantaged SouthAfricans”.
  Minister of Minerals and Energy under the new Mineral and Petroleum Resources Development Act with respectto the South African mining industry. We have commenced a process to apply for the conversion of our existingmining licenses under the new Mineral and Petroleum Resources Development Act. See below “New mininglegislation may have an adverse effect on our mineral rights”. When considering applications for the conversionof existing mining licenses under the Mineral and Petroleum Resources Development Act, the Minister ofMinerals and Energy must take into account, among other factors, the applicant company’s compliance with theMining Charter. We have entered into a transaction with Eyesizwe Coal (Pty) Limited (Eyesizwe) for our miningexport activities which is expected to be effective in 2007. This venture will result in approximately an 8%indirect black economic empowerment (BEE) equity ownership in Sasol Mining and together with other BEEtransactions under consideration by Sasol Mining would result in 15% BEE equity ownership by 2009 and 26%by 2014.
  Broad-based Black Economic Empowerment for public comment pursuant to the Broad-based Black EconomicEmpowerment Act of 2003. These codes are intended to provide businesses with guidance on implementing therequirements of the Act. These Codes have been published for comments and we have commented on the Codesand await publication in the South African Government Gazette.


and other requirements of both the Liquid Fuels and Mining Charters or the Codes of Good Practice for Broad-based Black Economic Empowerment and we cannot assure you that these costs or implications will not have amaterial adverse effect on our shareholders or business operating results, cash flows and financial condition.
   shortage of engineering and construction resources and strains in these industries. These have impacted on someof our projects and have affected construction timing schedules and costs. Whilst higher international crude oilprices may boost post-commissioning income streams and compensate for construction delays and higher capitalcosts, these strains in the engineering and construction industries are nevertheless a cause for concern and mayimpact on our project plans and growth ambitions.
             investments are in various stages of developing institutions and legal and regulatory systems that arecharacteristic of parliamentary democracies. However, institutions in these countries may not yet be as firmlyestablished as they are in parliamentary democracies in South Africa, the United States and some Europeancountries. Some of these countries are also transitioning to a market economy and, as a result, experiencechanges in their economies and their government policies that could affect our investments in these countries.Moreover, the procedural safeguards of the new legal and regulatory regimes in these countries are still beingdeveloped and, therefore, existing laws and regulations may be applied inconsistently. In some circumstances, itmay not be possible to obtain the legal remedies provided under those laws and regulations in a timely manner.
  these countries face uncertainty as to the security of their investments. Any unexpected changes in the politicalor economic conditions in the countries in which we operate (including neighboring countries) may have amaterial adverse effect on the investments that we have made or may make in the future, which may in turn havea material adverse effect on our business, operating results, cash flows and financial condition.
 New mining legislation may have an adverse effect on our mineral rights
  principle of the Act is that mineral resources are the common heritage of all South Africans and collectivelybelong to all the people of South Africa. The Act provides that the right to prospect and mine, including the rightto grant prospecting and mining rights on behalf of the nation, be administered by the government of SouthAfrica which will have the right to exercise full and permanent custodianship over mineral resources.


prospecting and mining permits. A wide range of factors and principles must be taken into account by theMinister of Minerals and Energy when considering these applications. These factors include the applicant’saccess to financial resources and appropriate technical ability to conduct the proposed prospecting or miningoperation, the environmental impact of the operation and, in the case of prospecting rights, considerationsrelating to fair competition. Other factors include considerations relevant to promoting employment and thesocial and economic welfare of all South Africans and showing compliance with the provisions of the MiningCharter for the empowerment of historically disadvantaged South Africans in the mining industry. See “Item 4.B– Business overview – Regulation of mining activities in South Africa” and “– Empowerment of historicallydisadvantaged South Africans”.
  such mining right relates is not mined at an optimal rate. Furthermore, royalties from mining activities willbecome payable to the state under provisions contained in the “Mineral and Petroleum Resources Royalty Bill”.This Bill was first published in March 2003 and has since been revised, with the final Bill was published on 11 October 2006. The Bill provides for a royalty rate of 1% on coal with an ash content of higher than 15% forSouth African energy consumption and 3% on coal with an ash content lower than 15%. The royalty is revenuebased, payable bi-annually in arrears, and will take effect from 1 May 2009. The royalty will be deductible fornormal income tax purposes. It is the declared intent of the South African government not to disrupt operationsas a result of the introduction of the new legislation and we intend to undertake the appropriate actions in orderto ensure conversion of our existing prospecting and mining rights. However, we cannot assure you that we willbe successful in all our applications for conversion and that our rights on existing coal mine reserves will not beaffected, which could have a material adverse effect on our business, operating results, cash flows and financialcondition.
 New legislation on petroleum and energy activities may have an adverse impact on our business,
 operating results, cash flows and financial condition
  Petroleum Products Act, enacting provisions regulating a range of matters including the licensing of personsinvolved in the manufacturing, wholesale and retail sale of petroleum products. As the Act and regulations to bepromulgated there under regulate matters pertaining to wholesale and retail sales of petroleum products, SasolOil, Natref and Sasol Synfuels are currently in the process of applying for licenses for manufacturing andwholesale and site licenses for our plants, wholesale activities and retail sites as required by the Act andregulations. We cannot assure you that these licenses will be granted and if they are granted that the conditionsof the licenses will not have a material adverse impact on our business, operating results, cash flows andfinancial condition. New retail site development could be delayed given the requirements under the newregulations. See “Item 4.B – Business overview – Sasol Oil” and “- Regulation of petroleum-related activities inSouth Africa”.
  and storage and loading facility activities, including the construction and operation of petroleum pipelines andthe delivery of certain commercial services in connection with these pipelines and facilities. The PetroleumPipelines Act grants broad discretion to the Minister of Minerals and Energy to adopt different pricingmethodologies in connection with the setting of tariffs, which may prove advantageous for some competitors,because of different market and geographic positions. The regulations pertaining to pricing methodologies havenot been issued yet, but the regulations that may be promulgated under the Act may affect our advantage due tothe location in the economic heartland of the country of our Natref refinery and our synfuels facilities atSecunda. See “Item 4.B – Business overview – Sasol Oil” and “- Regulation of petroleum-related activities inSouth Africa”. We have applied for licenses under the Petroleum Pipelines Act and the rules issued by theNational Energy Regulator of South Africa (NERSA) for our depots and related infrastructure and await theissue of licenses. Notwithstanding continuous interaction and comments submitted in respect of regulations to beissued under these statutes, we cannot assure you that the enactment of new legislation or the amendment of


existing laws and regulations will not have a material adverse effect on our business, operating results, cashflows and financial condition. Among the matters governed by the Petroleum Pipelines Act, of particularsignificance to our business are issues relating to the discretion granted to the South African Minister ofMinerals and Energy with respect to the exercise of executive powers, the determination or approval of tariffsand the issue of open access to pipelines and depots.
  storage, distribution, liquefaction and re-gasification activities. Although we negotiated a ten year regulatorydispensation (8 years remaining until 2014) with the South African government covering the supply ofMozambican natural gas to the South African market, we cannot assure you that the enactment of the Gas Actand the appointment of the NERSA (appointed pursuant to the National Energy Regulator Act which becameeffective on 1 November 2005) will not have a material adverse impact on our business, operating results, cashflows and financial condition. See “Item 4.B – Business overview – Sasol Gas” and “- Regulation of gas relatedactivities in South Africa”.
  came into effect in January 2006 and resulted in regulations being issued on 23 June 2006. These specificationsrelate to the phasing out of lead from the petroleum products we manufacture, a reduction in the sulfur contentin certain of these products and a new national octane structure. The clean fuels introduction plans have beensuccessfully completed and in order to meet these new specifications we have made significant capitalinvestments at our manufacturing sites to modify our current petroleum production processes. It is as yetuncertain what the final market demand will be for the various new products. Should the demand for particularproducts outstrip our ability to manufacture them as a result of a delay in completing modifications to our plantsand/or anticipated demand projections being exceeded this could have a material adverse effect on our business,operating results, cash flows and financial condition.
  comment on 23 June 2006. From the guidelines it can be concluded that there may be more flexibility affordedto oil companies and wholesalers, including airline companies, to directly import petroleum products. Noprotection will be granted to local and domestic manufacturers to satisfy their needs from local productionbefore imports are undertaken.
  national norms and standards relating to consumer protection and prohibits certain unfair marketing and businesspractices and to promote responsible consumer behavior.
  Protection legislation are passed. This could have a material adverse effect on our business, operating results,cash flows and financial condition.
 We may not be successful in attracting and retaining sufficient skilled employees
  order to achieve this, we need to maintain a focus on recruiting and retaining qualified scientists and engineers.In the past, we have been successful in recruiting and retaining such personnel. We have also established certainresearch and development facilities overseas. However, demand for personnel with the range of capabilities andexperience required in our industry is high globally and success in attracting and retaining such employees is notguaranteed. The risk exists that our scientific, engineering and project execution skills base may be depleted overtime because of, for example, natural attrition and a shortage of people being available in these disciplines.Failure to attract and retain people with the right capabilities and experience could negatively affect our ability tointroduce and maintain the appropriate technological improvements to our business and our ability tosuccessfully construct and commission new plants. This may have a material adverse effect on our business,operating results, cash flows and financial condition.


Intellectual property risks may adversely affect our products or processes and our competitive advantage
  processes have unique characteristics and structures and, as a result, are subject to patent protection, the extentof which varies from country to country. The expiry of a patent results in increased competition in the market forthe previously patented products and processes. In addition, aggressive patenting by our competitors may resultin an increased patent infringement risk.
  characteristics and structure. These products are normally utilized by our clients as feedstock to manufacturespecialty chemicals or application-type products. We have noticed a worldwide trend of increased filing ofpatents relating to the composition of application-type products. These patents may create pressure on our clientswho market these application-type products which may adversely affect our sales to these clients. Patent-relatedpressures may adversely affect our business, operating results, cash flows and financial condition.
  area, provide us with a competitive advantage. A possible loss of experienced personnel to competitors, and apossible transfer of know-how and trade secrets associated therewith, may negatively impact this advantage.Similarly, operating and licensing technology in countries in which intellectual property laws are not wellestablished and enforced may result in some transfer of our know-how and trade secrets to our competitors. Thismay adversely affect our business, operating results, cash flows and financial condition.
 Increasing competition from products originating from countries with low production costs may adverselyaffect our business, operating results, cash flows and financial condition
  and Europe. Economic and political conditions in these countries result in relatively high labor costs and, insome regions, inflexible labor markets, compared to others. Increasing competition from regions with lowerproduction costs, for example the Middle East and China, exercises pressure on the competitiveness of ourchemical products and, therefore, on our profit margins and may result in withdrawal of particular products orclosure of facilities. We cannot assure you that increasing competition by products originating from countrieswith low production costs will not result in withdrawal of our products or closure of our facilities, which mayhave a material adverse effect on our business, operating results, cash flows and financial condition.
 Changes in consumer and safety, health and environmental regulations and legislation and public opinionmay adversely affect our business, operating results, cash flows and financial condition
  and safety of employees, the public and/or the end consumer, as well as customer needs. As these regulationsmay grow stricter, we may be required in some cases to incur additional expenditure in providing additional testdata in order to register our products or to adjust the manufacturing processes for certain of our products,including liquid fuels and chemicals, or even withdraw some of them, in order to be in a position to comply withmarket needs or more stringent regulatory requirements. For example, compliance with the registration,evaluation and authorization of chemicals (REACH) procedure proposed by the European Commission (EC)may have significant cost implications as we may be required, among other things, to provide risk assessmentsand apply for registration of our products. Similarly, public opinion is growing more sensitive to consumerhealth and safety and environmental protection matters, and, as a result, markets may apply pressure on usconcerning certain of our products. Should we be required to comply with REACH requirements we may incursignificant additional costs. We may be required to withdraw from the market certain products which weconsider uneconomical given these additional costs of compliance or otherwise due to public opinionconsiderations. These factors may have a material adverse effect on our business, operating results, cash flowsand financial condition.


protection of the environment, health and safety of the workforce and/or neighboring communities. As theseregulations may grow stricter, we may be required in some cases to incur additional expenditure in order toprovide additional protection or to adjust specifications or manufacturing processes or transport and distributionarrangements for certain of our operations or products. Should we make changes or incur such costs this mayhave a material adverse effect on our business, operating results, cash flows and financial condition. Morespecifically:
  which our Sasolburg operations are located) has been declared a Priority Area for purposes ofimplementation of an emission reduction and management plan by the South African Department ofEnvironmental Affairs and Tourism. The Department is also in the process of setting ambient air qualityand emission standards, which will form the basis for a review of atmospheric emission licenses for ouroperations in Sasolburg and Secunda. More stringent air quality standards may have significant costimplications for us; and
  petrochemicals, result in relatively high emission of carbon dioxide, a greenhouse gas. Although certaincountries in which we operate are exempt from greenhouse gas reduction targets set in terms of theKyoto Protocol, it is uncertain how any future developments in carbon dioxide restrictions will affect ourgroup.
 We may face potential costs in connection with industry-related accidents or deliberate acts of terrorcausing property damage, personal injuries or environmental contamination
  for the storage, processing and transportation of oil, chemicals and gas related raw materials, products andwastes. These facilities and their respective operations are subject to various risks, including, but not limited to,fire, explosion, leaks, ruptures, discharges of toxic hazardous substances, soil and water contamination, floodingand land subsidence, among others. As a result, we are subject to the risk of experiencing, and have in the pastexperienced, industry-related incidents.
  the world demonstrated the increased risk posed by the threat of terrorism. Our facilities, located mainly inSouth Africa, the United States and various European countries, as well as in various African countries, theMiddle East and Southeast Asia, are subject to the risk of experiencing deliberate acts of terror.
  shutdown of the affected facilities, thereby disrupting production and increasing production costs. Furthermore,acts of terror, accidents or our historical operations may cause, or may have caused, environmentalcontamination, personal injuries, health impairment or fatalities and may result in exposure to extensiveenvironmental remediation costs, civil litigation, the imposition of fines and penalties and the need to obtaincostly pollution control technology.
  limit certain of our exposures. In some cases we also have indemnity agreements with the previous owners ofacquired businesses which limit certain of our exposures to environmental contamination. As a result of theterrorist attacks on 11 September 2001 and more recently hurricanes Katrina and Rita, our insurance costs anddeductibles (retained risk) have increased significantly. We are implementing a number of programs, includingon-the job safety training, in order to increase safety, and we closely monitor our safety, health andenvironmental procedures. However, there can be no assurance that accidents or acts of terror will not occur inthe future, that insurance will adequately cover the entire scope or extent of our losses or that we may not befound directly liable in connection with claims arising from these events.


Failure to comply with safety, health and environmental and other laws may adversely affect our marketposition and our business, operating results, cash flows and financial condition
  legislation in jurisdictions in which we operate. Environmental requirements govern, among other things, landuse, air emissions, use of water, wastewater discharge, waste management and site remediation. Theseregulations often require us to obtain and operate in compliance with the conditions of permits, licenses andauthorizations from the appropriate regulatory authorities. Compliance with these laws, regulations, permits,licenses and authorizations is a significant factor in our business, and we incur, and expect to continue to incur,significant capital and operating expenditures in order to continue to comply, in all material respects, withapplicable laws, regulations, permits and authorizations.
  may result in fines or penalties or enforcement actions, including regulatory or judicial orders enjoining orcurtailing operations or requiring corrective measures, installation of pollution control equipment or otherremedial actions, any of which could entail significant expenditures.
  contamination. The process of investigation and remediation can be lengthy and is subject to the uncertainties ofsite specific factors, changing legal requirements, developing technologies, the allocation of liability amongmultiple parties and the discretion of regulators. Accordingly, we cannot estimate with certainty the actualamount and timing of costs associated with site remediation.
  to incur costs which we could finance from our available cash flows or from alternative sources of financing. Wemay be required to provide for financial security for environmental rehabilitation in the form of a trust fund,guarantee, deposit or any other method as may be required by the regulations (not yet promulgated) under thePetroleum Products Act in respect of the rehabilitation of environmental impacts. However, this is not requiredin terms of the Petroleum Products Amendment Act and the regulations if a license applicant at the time of thecommencement of the Petroleum Products Amendment Act, held or was in the process of developing a site,manufactured or wholesaled or retailed petroleum products. No assurance can be given that changes in safety,health and environmental laws and regulations or their application or the discovery of previously unknowncontamination or other liabilities will not have a material adverse effect on our business, operating results, cashflows and financial condition.
  priority, there are currently certain asbestos-containing materials at our facilities. In addition, our manufacturingprocesses may utilize and result in the emission of substances with potential carcinogenic properties. We alsomanufacture products which may contain carcinogenic components. Although we implement occupational healthand safety, product stewardship and other measures to eliminate or mitigate potential risks we cannot assure youthat no liabilities may arise as a result of the use or exposure to these materials.
  government authorities on our compliance with, inter alia, tax, customs and excise duty, anti-trust laws andregulations impacting our operations. Our product pricing structures are also reviewed from time to time byregulatory authorities. Whilst it is our policy to conduct our operations in accordance with applicable laws andregulations and we have established control systems to monitor such compliance, no assurance can be given thatthese control systems will not fail or that some of our product pricing structures will not change in the future.Failure to interpret correctly and comply with such laws and regulations and/or changes to our product pricingand cost structures may have a material adverse impact on our business, operating results, cash flows andfinancial condition.


Our coal, crude oil and natural gas reserve estimates may be materially different from reserves that wemay actually recover
  present and anticipated conditions have the potential to be economically mined and processed. Our proveddeveloped and undeveloped crude oil and natural gas reserves are estimates based on applicable reportingregulations. There are numerous uncertainties inherent in estimating quantities of reserves and in projectingpotential future rates of coal, oil and natural gas production, including many factors beyond our control. Inaddition, reserve/reservoir engineering is a subjective process of estimating underground deposits of reserves thatcannot be measured in an exact manner and the accuracy of any reserve estimate is a function of the quality ofavailable data and engineering and geological interpretation and judgment. Estimates of different engineers mayvary and results of our mining/drilling and production subsequent to the date of an estimate may justify revisionof estimates. Reserve estimates may require revision based on actual production experience and other factors. Inaddition, several factors including the market price of coal, oil and natural gas, reduced recovery rates orincreased production costs due to inflation or other factors may render certain of our estimated proved andprobable coal reserves and proved developed and undeveloped oil and natural gas reserves uneconomical toexploit and may ultimately result in a restatement of reserves. This may have a material adverse effect on ourbusiness, operating results, cash flows and financial condition. See “Item 4.D – Property, plants and equipment”.
 There is a possible risk that sanctions may be imposed by the US government as a result of our Iranrelated activities
  activities we are undertaking in the polymers field and considering in respect of a GTL opportunity (with respectto which no investment decision has yet been made) in Iran. For a description of our activities in Iran see “Item 4.B – Business overview – Sasol Polymers” and “Sasol Synfuels International”. The risks relate to twosanctions programs administered by the US government that we have considered: the Iranian TransactionsRegulations (ITR) administered by the US Treasury Department Office of Foreign Assets Control (OFAC) andthe Iran and Libya Sanctions Act (ILSA) administered by the US Department of State.
  OFAC, do not apply directly to either Sasol or the group entities involved in activities in Iran, because none ofthem would be considered a US person under these regulations. Nonetheless, because the group is amultinational enterprise, we are aware that the ITR may apply to certain entities associated with the group,including US employees, investors and certain subsidiaries.
  which the ITR applies will not violate the ITR as a result of their respective affiliations with the group. Forinstance, to that end, we are taking measures to:
 
  
 
 any funds directed to, or to be received from, these projects and monitoring the flow of funds to andfrom these projects; and
 
  with the group will be mitigated. Nevertheless, we cannot predict OFAC’s enforcement policy in this regard andit is possible that OFAC may take a different view of the measures described above. In such event, US personsor affiliates associated with the group may be subject to a range of civil and criminal penalties.


support acts of international terrorism and fund the development or acquisition of weapons of mass destruction.ILSA is now only applicable to Iran following the removal of sanctions imposed against Libya. ILSA grants thePresident of the United States discretion in imposing sanctions on companies found to be in violation of itsprovisions involving investment in the petroleum industry in Iran. Should the US government determine thatsome or all of our activities in Iran are investments in the petroleum industry, as statutorily defined by ILSA, thePresident of the United States may in his discretion impose, among other sanctions, restrictions on our ability toobtain credit from US financial institutions, restrictions on our ability to procure goods, services and technologyfrom the United States or restrictions on our ability to make sales into the United States.
  respect to ILSA. Although we believe that our polymers project is not in the petroleum industry and we wereonly involved in a feasibility study in connection with other activities in Iran, we cannot assure you that ouractivities in Iran would not be considered investments as statutorily defined by ILSA or that the imposition ofsanctions on the company or other entities of the group would not have a material adverse impact on ourbusiness, operating results, cash flows and financial condition.
 The exercise of voting rights by holders of American Depositary Receipts is limited in some circumstances
  shares underlying their American Depositary Shares (ADSs) only in accordance with the provisions of ourdeposit agreement (Deposit Agreement) with The Bank of New York, as the depositary (Depositary). Forexample, ADR holders will not receive notice of a meeting directly from us. Rather, we will provide notice of ashareholders meeting to The Bank of New York in accordance with the Deposit Agreement. The Bank of NewYork has undertaken in turn, as soon as practicable after receipt of our notice, to mail to holders of ADRs votingmaterials. These voting materials include information on the matters to be voted on contained in our notice ofthe shareholders meeting and a statement that the holders of ADRs on a specified date will be entitled, subject toany applicable provision of the laws of South Africa and our Articles of Association, to instruct The Bank ofNew York as to the exercise of the voting rights, pertaining to the shares underlying their respective ADSs on aspecified date. In addition, holders of our ADRs will be required to instruct The Bank of New York how toexercise these voting rights.
  practicable, to vote or cause to be voted the shares underlying the ADSs in accordance with the instructionsreceived. If instructions from an ADR holder are not received by The Bank of New York by the date specified inthe voting materials, The Bank of New York will not request a proxy on behalf of such holder. The Bank of NewYork will not vote or attempt to exercise the right to vote other than in accordance with the instructions receivedfrom ADR holders. We cannot assure you that you will receive the voting materials in time to ensure that youcan instruct The Bank of New York to vote the shares underlying your ADSs. In addition, The Bank of New Yorkand its agents are not responsible for failing to carry out voting instructions or for the manner of carrying outvoting instructions. This means that you may not be able to exercise your right to vote and there may be norecourse if your voting rights are not exercised as you directed.
 Sales of a large amount of Sasol’s ordinary shares and ADSs could adversely affect the prevailing marketprice of the securities
  other major markets. The ability of a holder to sell a substantial number of Sasol’s ordinary shares on the JSE ina timely manner, especially in a large block trade, may be restricted by this limited liquidity. Sales of ordinaryshares or ADSs, if substantial, or the perception that these sales may occur and be substantial, could exertdownward pressure on the prevailing market prices for the Sasol ordinary shares or ADSs, causing their marketprices to decline.


ITEM 4.
 INFORMATION ON THE COMPANY
 4.A
 History and development of the company
  the laws of the Republic of South Africa in 1979 and has been listed on the JSE since October 1979. Ourregistered office and corporate headquarters are at 1 Sturdee Avenue, Rosebank, 2196, South Africa, and ourtelephone number is +27 11 441 3111. Our agent for service of process in the United States is Puglisi andAssociates, 850 Library Avenue, Suite 204, P.O. Box 885, Newark, Delaware 19715.
  industry in South Africa. This followed 20 years after the publication of a White Paper by Parliament, aiming toprotect the country’s balance of payments against increasing crude oil imports in view of the lack of domesticcrude oil reserves. As a result of this initiative, the South African government in 1950, through the IndustrialDevelopment Corporation of South Africa Limited (IDC), a state-owned entity, formed our predecessor companyknown as the South African Coal, Oil and Gas Corporation Limited to manufacture fuels and chemicals fromindigenous raw materials.
  80 kilometres (km) south of Johannesburg, commenced in 1952, and in 1955, the original Sasol One productionunits were commissioned. We supplied our first gasoline and diesel to motorists at Sasolburg in November 1955.The operation of this plant was based on a combination of the German fixed-bed and the US fluidized-bedFischer-Tropsch technologies, together with German Lurgi coal gasification technologies for the syntheticproduction of gasoline, diesel, other liquid fuels and chemical feedstock from coal.
  products such as solvents for paints, butadiene and styrene for synthetic rubber and ammonia for nitrogenousfertilizer. When our first naphtha cracker became operational in the mid-1960s, we added ethylene and propylenefor the plastics industry to our product portfolio.
    commenced at Sasolburg. The refinery was commissioned in February 1971. Currently, we, as the majorshareholder, and Total South Africa (Pty) Limited (Total), a subsidiary of Total S.A. of France, hold 63.64% and36.36%, respectively, in Natref.
  production capacity and assist in reducing South Africa’s dependence on imported crude oil. We commenced theconstruction of Sasol Two in Secunda, 145 km southeast of Johannesburg in the Mpumalanga province, in 1976,and in March 1980, this plant produced its first synthetic fuel. During the final construction phases of Sasol Twoin 1979, work commenced on the construction of our third synfuels and chemicals plant, Sasol Three, which wascompleted in 1982. The virtually identical operations of Sasol Two and Sasol Three were merged in 1993 toform Sasol Synthetic Fuels, now Sasol Synfuels.
  development services were consolidated into a new company, Sasol Technology. Since then, Sasol Technologyhas been an important area of our activities, responsible for research and development, technology developmentand commercialization, project management and specialist engineering skills.
  the proceeds from the private and public issue to acquire 100% shareholding in Sasol One and 50% shareholdingin Sasol Two and Sasol Three from the IDC. During 1983 we acquired the IDC’s remaining interest in SasolTwo and the remaining interest in Sasol Three was acquired effective 1 July 1990. Subsequently, the interest inour share capital held by the South African government through the IDC was further reduced to its current 7.8%.


In 1982, our ADRs were quoted on the NASDAQ National Market through an unsponsored ADR program,which was later converted to a sponsored ADR program in 1994. With effect from 9 April 2003 we transferredour listing to the New York Stock Exchange (NYSE) from NASDAQ.
  nitrogenous fertilizers and commercial explosives in 1983 and 1984, respectively, and also of solvents,phenolics, waxes and alpha olefins.
  BASF gas-phase technology. Between 1990 and 1993, Sasol One underwent a R820 million renovation, duringwhich we discontinued the production of synfuels and increased the production of higher-value chemicals,including ammonia, solvents, phenolics, paraffin and waxes.
  Limited (AECI), a South African listed chemicals and explosives company. The joint venture manufactured andmarketed monomers and polymers. In 1996, Polifin was listed on the JSE. In 1999, pursuant to a takeover offer,we acquired Polifin’s remaining share capital from AECI and the public, delisted Polifin and subsequently itbecame part of our chemicals portfolio and was renamed Sasol Polymers.
    production in selected high potential areas in West and Southern Africa. SPI is active in South Africa, Gabon,Equatorial Guinea, Nigeria and, most notably, in Mozambique. In 2000 and 2001, we signed agreements withthe government of Mozambique for the development of natural gas fields and the construction of a gas pipelinetransporting gas to the South African market. The construction of this pipeline was completed in 2004. Weintroduced natural gas to the South African pipeline gas market as of 2004 and use natural gas as part of ourfeedstock for our chemicals and synfuels operations in both Secunda and Sasolburg.
  a merger of Sasol Waxes and the Hamburg-based Schümann wax operations. It produces paraffin and Fischer-Tropsch waxes and operates in various countries. Effective 1 July 2002, we acquired from Vara Holdings GmbHand Co KG the remaining third of the share capital of Schümann Sasol, for approximately 51.1 million euro(approximately R521 million at actual rates), and this group of companies, now 100% owned, has been renamedSasol Wax.
  Synthol (SAS) reactors at Secunda, and a ninth reactor was commissioned in 2001. The 1-octene plant, also atSecunda, was commissioned in April 1999 by Sasol Alpha Olefins and commenced supply to The DowChemical Company polyethylene plants in May 1999.
  the Sasol Slurry Phase Distillate (Sasol SPDTM) process technology for the production of high-quality,environment-friendly diesel and other higher-value hydrocarbons from natural gas. In October 2000, we signedagreements with Chevron for the creation of Sasol Chevron, a 50:50 global joint venture founded on GTLtechnology. Sasol Chevron was formed in order to take advantage of the synergies of Sasol’s and Chevron’sGTL strengths. Sasol has advanced Fischer-Tropsch technology and Chevron has extensive global experiencewith respect to natural gas utilisation, product marketing and hydrotreating technology.
  National Petroleum Corporation (NNPC) and Chevron Nigeria Limited at existing oil and gas facilities atEscravos in Nigeria. In April 2005, the engineering, procurement and construction contract for this project wasawarded to Team JKS, a consortium of the Japan Gasoline Corporation; Kellogg, Brown and Root (KBR), asubsidiary of Halliburton and Italy’s Snamprogetti. SSI and Sasol Chevron continue to explore opportunities todevelop other GTL plants over the next decade.


founded the Alliance for Synthetic Fuels in Europe (ASFE) with DaimlerChrysler, Renault, Royal Dutch Shelland Volkswagen, which was launched in Brussels in March 2006.
  49%) to establish Oryx GTL. The joint venture is constructing, on behalf of both venture partners, a GTL plantbased at Ras Laffan Industrial City to produce high quality synfuels from Qatar’s natural gas resources. Theinauguration ceremony of the ORYX GTL plant was held at Ras Laffan Industrial City in Qatar on 6 June 2006.The plant is scheduled to commence operations during the second quarter of 2007.
  Most of this business was subsequently hosted in Sasol Olefins & Surfactants with production facilities mainlyin the US, Europe and South Africa. In 2003, it was determined that we would continue to grow our chemicalbusinesses conditional upon projects leveraging our technology or securing integrated and highly cost-competitive feedstock positions. We announced in August 2005 that we are considering the divestment of theSasol Olefins & Surfactants business excluding our comonomers activities in South Africa. The Sasol Olefins &Surfactants business is not vertically integrated to our required standards; is not adequately linked to ourproprietary Fischer-Tropsch technology process and has not adequately provided the integration benefits whichwe require. The financial impact of changes in the input costs of the business – together with current market-place dynamics – exceeds the benefits of significant reductions that have successfully been achieved in the fixedcosts of the business and various other productivity improvements. After a review of valuations and bids receivedfrom interested parties, which confirmed our valuation, it was necessary to write-down the net asset value of thebusiness to its fair value. By 30 June 2006, we had substantially completed most of the activities required toprepare this business for sale and are presently in negotiations with potential buyers. It is envisaged that thedisposal of the Sasol Olefins & Surfactants business will be completed within the next 12 months, subject toobtaining the relevant regulatory and other approvals. Until the business is sold, we remain committed to thestrategic and operational goals of Sasol Olefins & Surfactants and will continue to provide the business with thesupport necessary to uphold its effectiveness and success.
  feedstock and enable concomitant investments by Sasol Polymers to expand its South African polymerproduction capacity by more than 80%. The synfuels catalytic cracker (SCC) at Secunda is being commissionedin four sections. The first three are currently being commissioned and the commissioning of the fourth sectioncommenced in June 2006. The SCC is expected to commence beneficial operation in October 2006.
  its first Sasol-branded retail convenience center (service station). Sasol Oil also completed the acquisition andintegration of Exel Petroleum in a major step towards forming Sasol Oil. We now have 376, compared to 345 in2005, Sasol- and Exel-branded retail convenience centres.
  empowerment strategy through the formation of Igoda Coal (Pty) Limited (Igoda Coal), an empowermentventure with Eyesizwe Coal (Pty) Limited (Eyesizwe), a black-owned mining company. Igoda Coal willcomprise the full value chain of Sasol Mining’s coal export business – the Twistdraai mine and beneficiationplant at Secunda, the marketing and logistics components of its coal export business, and Sasol Mining’s 5%shareholding in Richards Bay Coal Terminal.
  Corporation of the People’s Republic of China to proceed with the second stage of feasibility studies todetermine the viability of an 80,000 barrels per day (bpd) CTL plant in the Shaanxi Province, about 650 kilometres west of Beijing in China and for another 80,000 bpd CTL plant in the Ningxia Hui Autonomousregion, about 1,000 kilometres west of Beijing.


transaction, through partnership with Tshwarisano LFB Investment (Pty) Limited (Tshwarisano), wassuccessfully concluded following the prohibition by the Competition Tribunal of the proposed merger of ourliquid fuels business with Engen Limited, a South African subsidiary of Petroliam Nasional Berhad (Petronas).In terms of the agreement, Tshwarisano has acquired a 25% shareholding in Sasol Oil effective 1 July 2006.
  appropriate by management and consistent with the authorization of the shareholders. No repurchases weremade during the year ended 30 June 2006. At 30 June 2006, a total of 60,111,447 shares, representing 8.8% ofthe issued share capital of the company, had been repurchased since 9 May 2000 at an average price of R60.67per share. At a general meeting held on 3 October 2006, shareholders approved that we acquire 60,111,477 SasolLimited shares held by our subsidiary, Sasol Investment Company (Pty) Limited. These shares were cancelled on10 October 2006. Except for the related transaction costs, the repurchase and cancellation of these shares had noeffect on the consolidated financial position of the group. At the meeting of 3 October 2006, shareholders alsoapproved that we be granted the authority to acquire Sasol Limited shares by way of a general repurchase. Wemay consider repurchasing additional shares on the open market.
  capitalization (R174.8 billion), with total consolidated turnover from continuing operations of approximatelyR61,857 billion in 2006. We employ approximately 27,933 people in our continuing operations.
 Capital expenditure
  2005 and 2004, respectively, in capital expenditure (on a cash flow basis excluding capitalized interest andincluding projects and investments incurred by our equity accounted investees) to enhance our existing facilitiesand to expand operations. Capital expenditure incurred on key projects to expand our operations includes:
 30 June
 30 June
 30 June
 Projects and investments
 1
 Business categories
 2006
 2005
 2004
 (Rand millions)
    2,608
     1,734
     1,590
    nd
  rd
   714
     191
     38
     –
     –
     –
    th
   –
     820
   7,695
   1.
 The amounts include business development costs and our group’s share of capital expenditure of equity accountedinvestees. The amounts exclude borrowing costs capitalized. These amounts were approved by our board of directorsand are stated on a management reporting basis. We hedge all our major capital expenditure in foreign currencyimmediately upon commitment of the expenditure or upon approval of the project.


30 June
 30 June
 Projects and investments
 1
 Business categories
 2006
 2005
 (Rand millions)
   1,867
    224
    171
    98
   plant (Unit 24) and the revamp of the furnaces
  3
    2,968
  5,331
  1.
 The amounts include business development costs and our group’s share of capital expenditure of equity accountedinvestees. The amounts exclude borrowing costs capitalized. These amounts were approved by our board of directorsand are stated on a management reporting basis. We hedge all our major capital expenditure in foreign currencyimmediately upon commitment of the expenditure or upon approval of the project.
  equity accounted investees), mainly in respect of software, patents and trademarks during the year. For adiscussion of the method of financing for our capital expenditures, see “Item 5.B – Liquidity and capitalresources – liquidity”.
 Capital commitments
  we had spent R20 billion at 30 June 2006. Of the unspent capital commitments of R14 billion, R8 billion hasbeen contracted for. We expect to spend R9 billion in 2007, R5 billion in 2008 and the remainder in 2009 andthereafter of our unspent capital commitments. For more information regarding our capital commitments see“Item 5.B – Liquidity and capital resources – liquidity” and “Item 5.F – Tabular disclosure of contractualobligations”.
  R5 billion in other African countries, R2 billion in the Middle East and the remainder on projects in otherregions.


Total project
 Scheduled
 Project
 Business categories
 cost
 operation date
 (Rand in millions)
                    1
     2
   rd
      – low-density polyethylene and polypropylene
     Sasol Polymers International Investments
  3
  The amounts include business development costs and our group’s share of capital expenditure of equity accounted
 investees.
 1.
 The project cost of US$489 million and has been translated at a rate of R7.76 per US$1.00 solely for the reader’sconvenience.
 2.
 Sasol provides risk-based financing for 50% of the capital expenditure on the Escravos GTL joint venture. The projectcost is under review. Sasol’s portion is not expected to exceed US$ 1.45 billion. Due to concurrent increases incommodity values, this development is not expected to materially affect the returns of this project. This amount hasbeen translated at a rate of R7.76 per US$1.00 solely for the reader’s convenience.
 3.
 Sasol Polymers’ share of the estimated cost to establish the Arya Sasol Polymer production facilities is 494 million euro and has been translated at a rate of R9.88 per euro 1.00 solely for the reader’s convenience.
 4.B
 Business overview
  international development of synthetic-fuel ventures based on our proprietary Fischer-Tropsch (FT) technology.We mine coal in South Africa. Through Sasol Synfuels, we convert this coal, along with Mozambican naturalgas, into fuels and chemical feedstock through our FT technology.
  Our larger chemical portfolios include polymers, solvents, waxes, phenolics and nitrogenous products. We are advancing the divestiture process of Sasol Olefins & Surfactants business excluding its comonomersactivities in South Africa. The Sasol Olefins & Surfactants business has been presented in the financialstatements as discontinued operations.
  Africa and retails liquid fuels and lubricants produced in our refinery and by Sasol Synfuels through a growingnetwork of retail service centers. Our liquid fuels business includes wholesaling in South Africa and overlandexports to several sub-Saharan African countries.
    construction in Nigeria, for planned commissioning in 2010. These two GTL plants will incorporate ourproprietary Sasol SPDTM process.


Our activities
  information in the reportable segments, is presented based on IFRS. Since IFRS financial information is thebasis for segmental financial decisions, resource allocation and performance assessment, it forms the accountingbasis for segmental reporting that is disclosed to the investing and reporting public. The IFRS segmentalreporting information is reconciled to the amounts reported in our group consolidated financial statements,prepared in accordance with US GAAP, for all years presented. We divide our operations into the followingsegments (turnover percentages and amounts in terms of IFRS):
 Continuing operations:
 Sasol Mining.
 our South African plants and export about 3.6 Mt of coal annually. Sasol Mining accounted for 2% of ourtotal external segmental turnover from continuing operations in 2006.
 • Sasol Synfuels.
 facility at Secunda. We produce synthesis gas through coal gasification and natural gas reforming, anduse proprietary Fischer-Tropsch technology to convert synthesis gas into synthetic fuel components,pipeline gas and chemical feedstock. Sasol Synfuels accounted for 1% of our total external segmentalturnover from continuing operations in 2006.


• Sasol Oil (previously Sasol Liquid Fuels Business)
 and through our interest in the Natref refinery in Sasolburg (South Africa’s only inland crude oilrefinery). Liquid fuels include gasoline, diesel, jet fuel, bitumen and lubricants. Sasol Oil accounted for5% of our total external segmental turnover from continuing operations in 2006.
 • Sasol Gas
 customers in the Gauteng, Mpumulanga, Free State, and KwaZulu-Natal provinces of South Africa. Wehave a 49% interest in Spring Lights Gas (Pty) Limited, an empowerment gas marketing company inDurban, and a 75% interest in Republic of Mozambique Pipeline Investment Company (Pty) Limited(Rompco), the owner of the Mozambican-South African gas pipeline. Sasol Gas accounted for 3% of ourtotal external segmental turnover from continuing operations in 2006.
 • Sasol Synfuels International
 international ventures based on the Sasol SPDTM GTL process. We will bring our first international GTLplant into production with Qatar Petroleum during the second quarter of 2007. These activities are onlyexpected to contribute to our total external segmental turnover in 2007. We also pursue opportunitiesbased on other hydrocarbons that could be beneficiated through our Fischer-Tropsch technology.
 • Sasol Polymers.
 polyethylene, polyvinyl chloride, chlor-alkali chemicals and mining reagents to a diverse South Africanand international customer base. We also have an interest at Kertih, Malaysia in ethylene, propylene andpolyethylene production and marketing. Sasol Polymers accounted for 12% of our total externalsegmental turnover from continuing operations in 2006.
 • Sasol Solvents.
 (including alcohols and ketones) and associated products through various business units, including anacrylic acid and acrylates joint venture in South Africa with Mitsubishi Chemical Corporation and amaleic anhydride joint venture in Germany with Huntsman Corporation. The comonomers divisionpreviously included as part of Sasol Olefins & Surfactants is now included in Sasol Solvents. SasolSolvents accounted for 16% of our total external segmental turnover from continuing operations in 2006.
 • Other
 South Africa and abroad, which, among others, include international petroleum and gas exploration andproduction, production of other chemical products, production of wax and explosive products as well astechnology research and development, and our financing activities. These activities accounted for 15% ofour total external segmental turnover from continuing operations in 2006.
 Discontinued operations:
 • Sasol Olefins & Surfactants.
 as monomers and inorganic specialty chemicals, mainly at plants in Germany, Italy, the United States ofAmerica and South Africa, for customers across the globe. The Sasol Olefins & Surfactants business hasbeen disclosed as a discontinued operation and we expect to sell the business before the end of 2007.Thefollowing tables present our total external turnover after the elimination of inter-segment turnover bybusiness operation and geographic market (in terms of IFRS, except where otherwise indicated):


36
 Sasol
 Total
 Sasol
 Sasol
 Sasol
 Sasol
 Synfuels
 Sasol
 Sasol
 continuing
 2006
 Mining Synfuels
 Oil
 Gas
 International
 Polymers
 Solvents
 4
 Other operations
 (Rand in millions)
                                                                                 Total segment
 1,517
 915
 32,243
 1,663
 161
 7,537
 10,485
 9,329
 63,850
 Adjustments to US GAAP
  of proportionate consolidation
 2
  Turnover under US GAAP
 1
 61,857
 Sasol
 Total
 Sasol
 Sasol
 Sasol
 Sasol
 Synfuels
 Sasol
 Sasol
 continuing
 2005
 Mining Synfuels
 Oil
 Gas
 International
 Polymers
 Solvents
 4
 Other operations
 (Rand in millions)
                                                                                 Total segment
 1,471
 820
 23,525
 1,408
 –
 7,199
 9,361
 8,713
 52,497
 Adjustments to US GAAP
  of proportionate consolidation
 2
  Turnover under US GAAP
 1
 50,687


37
 Sasol
 Total
 Sasol
 Sasol
 Sasol
 Sasol
 Synfuels
 Sasol
 Sasol
 continuing
 2004
 Mining Synfuels
 Oil
 Gas
 International
 Polymers
 Solvents
 4
 Other operations
 (Rand in millions)
                                                                                 Total segment
 1,083
 1,329
 18,554
 1,389
 7
 6,576
 7,937
 8,124
 44,999
 Adjustments to US GAAP
  of proportionate consolidation
 2
    3
  Turnover under US GAAP
 1
 43,606
 1.
 For more information on the reconciliation of segmental turnover to the corresponding amounts prepared under US GAAP, see “Item 5.A – Operating results – Reconciliation of segmental results to US GAAP” and Note 3 of “Item 18 – Financial statements”.
 2.
 For the years ended 30 June 2006, 30 June 2005 and 30 June 2004, proportionate consolidation is applied with respectto incorporated joint ventures for management reporting purposes. Under US GAAP, the equity method of accountingis applied.
 3.
 Relates to Naledi Petroleum Holdings (Pty) Limited (included in the Sasol Oil segment) which was equity accountedfor management reporting purposes until 31 December 2003 and consolidated as a subsidiary with effect from 1January 2004. However, under US GAAP it is consolidated as a subsidiary for all reporting years.
 4.
 The segment information has been adjusted for the reclassification of the comonomers division from Sasol Olefins &Surfactants to Sasol Solvents.
 Our strategy
 We are active in the oil, gas and chemical sectors, primarily in integrated petroleum and chemical centers
 of activity in Southern Africa and other countries where we can obtain competitive feedstock advantages. Ourcore business is adding value to low-cost coal and gas feedstock through our unique Fischer-Tropsch synthesisand other proprietary technologies for the production of fuel, fuel components and chemical feedstock.
 Commercializing and expanding our Fischer-Tropsch GTL and CTL technology– We have made further
 progress towards the drive to commercialize our GTL technology based on the Sasol SPDTM process in naturalgas-rich regions. The Sasol SPDTM process allows us to monetize underutilized gas resources by converting theminto ultra-low sulfur, high-performing diesel in line with global trends towards cleaner fuel and reducedemissions to the environment.
 • SSI and Qatar Petroleum inaugurated their 49:51 joint venture in respect of the Oryx GTL plant in Ras
 Laffan, Qatar in June 2006. The plant with its capacity of 34,000 bpd is the world’s first commercialscale Slurry Phase Fischer-Tropsch GTL plant outside South Africa, developed and built specifically toproduce GTL diesel and to a lesser extent, GTL naphtha and liquefied petroleum gas (LPG). The GTLdiesel will be used either as a fuel neat or as a blend stock.


Limited is progressing according to plan. It is envisaged that the plant will be operational in 2009. Withits capacity of 34,000 bpd the Escravos GTL plant will produce GTL diesel, GTL naphtha and liquefiedpetroleum gas utilizing Sasol licensed technology.
  options include a second GTL plant in Qatar and possible GTL investments in Algeria and Australia. We are notprogressing with a feasibility study on a potential GTL project in Iran, although this may change pending areview of the political situation in Iran. The political situation in Iran is being monitored. If a stage-onefeasibility study is initiated it will, however, take up to two years before the investment merits of a potentialGTL project are precisely determined for consideration and scrutiny by the relevant risk assessment, governanceand investment decision-making bodies within the group, which will also take full cognizance of the politicalsituation prevailing in Iran at that time.
  technology, including our proprietary low-temperature Fischer-Tropsch Slurry Phase reactor and cobalt-basedcatalysts.
  development of two CTL plants in China. We anticipate completing the feasibility studies during 2008 for thetwo envisaged CTL plants in China. China has been able to sustain high levels of economic growth for morethan a decade, coupled with a growing demand for energy which outstrips the world average. With its vast coalreserves, China offers a potential opportunity for us to commercialize our CTL technology. Potential CTLopportunities in the United States and other coal-rich regions may also be considered.
  Tropsch synthesis technology for the beneficiation of coal and other hydrocarbon resources, includingenvironmentally friendly biomass.
 Grow our integrated chemicals portfolio in selected areas –
     business optimization and benefiting from a buoyant demand for polyethylene, polypropylene and polyvinylchloride. As part of Project Turbo, this division is advancing the construction of two new polymer plants inSouth Africa to increase our polymer capacity by about 80%. We intend to bring the two plants into operationduring 2007. Outside South Africa, our polymer business continues to gain momentum. In Iran, Sasol, throughSasol Polymers International Investments is investing up to euro 494 million (our 50% share of the total capitalproject) in a new polymer plant which is designed to produce one million tons of ethylene to be converted intopolyethylene, or exported as ethylene. This project is a 50:50 joint venture (called Arya Sasol PolymerCompany) between Sasol and the National Petrochemical Company of Iran, and comprise one ethane cracker forproducing polymer-grade ethylene and two polyethylene plants. The cracker start-up is currently targeted forbetween April and June 2007, followed by commissioning of the two polyethylene plants soon thereafter.
  solvents. The breadth of our solvents product portfolio and international market presence covering all majorregions are competitive strengths of this business unit.
  the start of the divestiture process in August 2005, international oil prices have increased significantly, whichrepresent fundamental changes in energy costs and their related impact on oil derived feedstock prices.Irrespective of the negative impact of the increased feedstock costs on the Sasol Olefins & Surfactants business,


the strategic rationale for considering the disposal of the business, as expressed in our initial announcement inAugust 2005, remains relevant and valid. It is not backward integrated into the primary feed streams to ourrequired standards and is also not adequately linked to our proprietary Fischer Tropsch technology process.
 Exploit upstream hydrocarbon opportunities –
 Temane field in Mozambique. We will continue to explore for additional natural gas reserves in and around theTemane and Pande onshore fields as well as two offshore fields. Moreover, SPI remains a 27.75% partner inGabon’s offshore Etame oil field, where crude oil production is being sustained at about 18,000 bpd.
  introduction of natural gas from Mozambique in 2004. At 30 June 2005 Sasol held a 100% interest in Republicof Mozambique Pipeline Investments Company (Pty) Limited (Rompco), a company which operates andmaintains the cross-border pipeline that conveys natural gas from the Temane central processing facility to thegas network at Secunda. On 1 July 2005, we sold a 25% interest in Rompco to South African Gas DevelopmentCompany (Pty) Limited (iGas), owned by the South African government), and realized a profit of R205 million.Companhia Mocambicana de Gasoduto S.A.R.L (CMG), a company owned by the Mozambique government,has taken steps to exercise its option to acquire a 25% interest in Rompco in 2007.
 Continuing operations
 Sasol Mining
 Nature of the operations and principal activities
   and Syferfontein) at Secunda supplying 40.3 Mt of coal to Sasol Synfuels, its primary customer. A newbusiness portfolio supplying utility coal to Eskom Holdings Limited (Eskom), South Africa’s state-ownedpower company, has been established and performed well during the year. In line with a supplyagreement, the company supplied 1.7 Mt of coal to Eskom power stations during 2006.
  producing coal for the international market (export coal sales of 3.6 Mt) as well as a secondary product(middlings), supplied to Sasol Synfuels.
  30 June 2006. It has been designed to supply utility coal to the group’s utility plants in Sasolburg at arate of about 1.9 Mt a year to replace the depleted Mohlolo underground operation and the Wonderwaterhigh-wall operation, which are undergoing final closure and rehabilitation.
  in production resulted from coal purchases from Anglo Operations (Pty) Limited (Anglo Operations) for supplyto Sasol Synfuels and the introduction of natural gas at Sasolburg. Saleable production volumes vary each yearaccording to inter-segment demand and export capacity.


Operational statistics
 2006
 2005
 2004
 (Mt, unless otherwise stated)
         Total production
 46.2
 47.7
 52.4
  1
                        Total sales including exports
 47.7
 46.5
 51.1
      1.
 Saleable production equals our total production minus discard and includes both product sold and movements instockpiles.
 Strategy
         Mining Charter compliance
 Economic empowerment of historically disadvantaged South Africans.
 formulation process, followed by a partner selection process, resulting in the selection of Eyesizwe as ourpreferred strategic BEE partner in our coal export operations. We announced in March 2006 the first phase of theimplementation of Sasol Mining’s broad-based BEE strategy through the formation of Igoda Coal, SasolMining’s 65:35 empowerment venture with Eyesizwe.
  about 8%. We are now expediting plans to advance the second phase of our broad-based BEE ownershipstrategy, pursuant to which we intend to achieve a 26% BEE equity ownership by 2014, in compliance with theMining Charter.
  to create a new, sustainable BEE entity, which will be involved in selected mining operations. This entitypreferably, will include a women’s group and other broad-based stakeholders drawn from historicallydisadvantaged groups in South Africa. We expect to finalise our next BEE equity ownership deal in the yearahead.


were provided to government. This submission provides detail and information on how stated objectives of theMining Charter will be addressed as well as plans on how to achieve the targets. See “Item 3.D – Keyinformation – Risk factors – New mining legislation may have an adverse effect on our mineral rights” and“Item 4.B – Business overview – Regulation – Empowerment of historically disadvantaged South Africans”.
 Safety, health and environmental
  work-related injuries and illnesses and other safety incidents resulting in injury) for 2006 was 0.93 compared to1.51 for 2005, and the lost work day case rate for 2006 was 0.25 compared to 0.24 for 2005. Safety is of criticalimportance and various interventions have and are being implemented in order to improve Sasol Mining’s safetyperformance. This includes entrenching safety as a key value at Sasol Mining, in line with the group’s focus onsafety. A process to improve safety-related behaviors was implemented two years ago and will be fullyimplemented at all our mining operations by the end of the 2008 calendar year.
   3
  3
   3
   as an internationally recognized Environmental Management System (ISO 14001). They are individually auditedat least annually.
 Continuous improvement
  supported by a tracking tool for monitoring progress and sustainability. This process will be implementedthroughout all the mining operations during the next eighteen months.
  average number of tons produced by one continuous miner in one eight-hour shift (t/cm/shift). Since launching adedicated productivity-improvement program seven years ago, Sasol Mining has increased its continuous minerproductivity by 108%, while also sustaining a general trend during this period of lowering its recordable injuries.Machine productivity increased by 7% during the year from 1,561 t/cm/shift to 1,674 t/cm/shift.
 Business and reserve optimization
  level to life-of-complex planning, ten year budgets and short-term planning. During 2006 the business hasoperated soundly within the context of this business plan. The business plan is focused to continuously operatethe mines in the most cost effective manner whilst also focusing on reserve optimization.
 Product and market optimization and logistics
  and the supply sources at the Secunda Mining Complex (less Twistdraai coal produced and more coal purchasesfrom Anglo Operations) have necessitated more focus to ensure stability in the coal blends supplied to ourinternal customers (Sasol Synfuels and Sasol Infrachem). Different computerized blending models have beendeveloped and implemented to manage coal quality and coal blends of products supplied to customers.


Winning with people
  to experience year on year improvements in people productivity. The relationship with all our union stakeholdersis good. We achieved 38% representation of historically disadvantaged South Africans (HDSAs) from first linesupervisory to senior management levels. The introduction of an additional 67 women in core business wassuccessfully completed. Currently we have over 100 women in core business and are well on our way towardsachieving targets set by the Mining Charter and relevant legislation. Overall progress towards the achievement ofemployment equity and Mining Charter targets is satisfactory. Current retention challenges in skilled,professional positions are mainly due to a national growth in the requirements for these skills. Strategies tomitigate these challenges including, targeted recruitment, fast-tracking of professional growth of employees andincreased artisan and miner learnership are yielding favorable outcomes, resulting in lower voluntary laborturnover for Sasol Mining as against the mining industry in general and continuous inflow of skilled employeesfrom internal development. With increased economic growth in the country, Sasol Mining will continue to seekand implement innovative ways to attract and retain talented people within the company.
 Principal markets
  are determined on an arm’s length basis. We export approximately 8% of the Secunda Mining Complex’sproduction. In 2006, external sales, primarily exports, amounted to 3.6 Mt, compared to 3.9 Mt in 2005. In avolatile market, US dollar export prices decreased by 7%, while the rand weakened by 3%. This resulted in a netdecrease in the rand export coal price of 4%.
  is our intention to increase our presence in the international market over the ensuing decade. This is currentlyconstrained by our throughput entitlement at the Richards Bay Coal Terminal, South Africa’s predominant coalexport outlet. The planned expansion of this terminal has been delayed and its timing is uncertain.
 Seasonality
  international market in which Sasol Mining is most active, is consistent throughout the year. Variations intonnage from season to season in the export market are therefore limited.
 Marketing channels
  own specific geographic markets. These agents operate on a commission basis and are authorized to act asintermediaries only. All sales require approval of Sasol Mining before they may be concluded with the customer.


Property, plants and equipment
  only) and the external market. The annual production of each mine, the primary market to which it supplies coaland the location of each mine are indicated in the table below:
 Mining activities
 Mine
 Market
 Location
 2006
 2005
 2004
 Production (Mt)
                           1
              1.
 The middlings product from the export beneficiation plant is supplied to the Synfuels market.
 Beneficiation Plant
  design capacity of the plant is 10.5 Mt throughput per annum. The plant feedstock is supplied by Twistdraaimine via overland conveyor belts of approximately 22 kilometres.
 Sasol Synfuels
 Nature of the operations and principal activities
  knowledge of the industry and publicly available information, we believe to be the world’s only largecommercial-scale facility of this type. Based at Secunda, we produce syngas primarily from low-grade coal witha smaller portion of feedstock being natural gas. The process uses advanced high temperature Fischer-Tropschtechnology to convert syngas into a range of synthetic fuel components, as well as industrial pipeline gas andchemical feedstock. We produce most of South Africa’s chemical and polymer building blocks, includingethylene, propylene, ammonia, phenols, alcohols and ketones. We operate the world’s largest oxygen productionfacilities (according to Air Liquide, the French industrial gas company), currently consisting of 15 units. As aresult, we also have the capacity to recover high volumes of two noble gases, krypton and xenon.
   Strategy


with Sasol Technology, Sasol Oil and key chemical businesses in a feasibility study for a phased 20% increase inproduction over the next 10 years. The envisaged first-phase growth of 10% would be based on higherthroughput of natural gas and thereafter on higher throughput of coal. The latter coal-based growth phase wouldrequire new-generation coal gasification technology. Sasol Synfuels envisages complementing the current low-temperature Lurgi coal gasifiers with high-temperature gasifiers, mostly to improve plant efficiency and reduceemissions to the atmosphere. High-temperature gasifiers produce carbon monoxide, which – along withhydrogen – can be used to produce synthesis gas instead of being emitted to the atmosphere. The additionalvolumes of reaction hydrogen would be sourced from natural gas.
  fuel specifications which were implemented on 1 January 2006. Besides terminating the production andmarketing of leaded fuel and introducing lead replacement fuel for older vehicles, we have introduced dieselwith a substantially lower sulfur content – a reduction from 3,000 parts per million (ppm) to 500ppm. ProjectTurbo, the fuel-optimization and polymer-expansion project entered the final stage during the last quarter of theyear. As part of the fuel-optimization portion of the project, we commenced with the commissioning of thesynfuels catalytic cracker (SCC) in August 2006. Project Turbo has necessitated the rerouting of almost one-million cubic meters a year of fuel precursors produced by Sasol Synfuels to the SCC, where they are now beingconverted into higher-octane fuel, as well as ethylene and propylene. As a result of starting up the SCC, we havea different end-product ratio because our fuel volumes will decrease slightly as some of the fuel streams will beconverted into polymer feedstock. In the longer term, however, our growth plans will offset the Project Turbo-related reduction in fuel volumes and the negative impact on unit cost. We expect that in addition to deliveringthe new fuels solution for 2006, this project will also address most of the envisaged more stringent fuelspecifications which are expected to be mandated in future years.
   Principal markets
  feedstocks are processed and marketed by Sasol and its joint ventures, including Merisol. Unrefined ethyleneand propylene are purified by Sasol Polymers’ monomers division at Secunda for the downstream production ofpolymers. Ammonia is sold to the fertilizer and explosives industries, including Sasol Nitro, our nitrogenousproducts division.
   Property, plants and equipment
 Specific product volumes
 2006
 2005
 2004
 (% of total production)
                  leading international energy and chemical companies. The planned March 2006 shutdown was postponed toSeptember 2006 to accommodate the complex scope of the work required for Project Turbo. Greater energyefficiency is also being pursued through new programs aimed at reducing overall unit cost, improvingenvironmental performance and assuring the reliability of electricity supply. This is particularly important at a


time when Sasol Synfuels are pursuing significant expansion plans. Sasol Synfuels have been given the go-aheadto commence work in the year ahead for the development of a 100 to 350-megawatt power-generation plant atSecunda. This facility will use waste-gas streams as an energy source to reduce costs and environmental impact.
  unplanned shutdowns. Ongoing programs are followed to improve plant reliability, availability and efficiency ofoperations. One of the year’s key initiatives was the formation of a dedicated operational improvement team tosupport Synfuel’s pursuit of operational excellence.
  initiative in South Africa to reduce our environmental footprint and enhance operational efficiency. We arepartnering with Sasol Nitro to build a R638 million sulfuric acid plant at Sasol Synfuels and an ammoniumsulfate facility at Sasol Nitro. The acid plant will use hydrogen sulfide and offtake gas from the Rectisol plant asfeedstock. Sasol Nitro will convert a large percentage of the sulfuric acid into ammonium sulfate, an importantfertilizer ingredient.
  as well as emissions of sulfur oxides (SOx) and nitrous oxides (NOx). Conceptual studies are progressing with aview to reduce emissions significantly below the VOC, SOx and NOx limits prescribed by South Africa’s morestringent new legislation, the National Environmental Management: Air Quality Act.
  ahead, besides the sulfur-reduction investments associated with building plants for producing sulfuric acid andammonium sulfate, Sasol Synfuels expects to invest a further R86 million to improve environmentalperformance.
 Sasol Oil
 Nature of the operations and principal activities
  retailing interests, including the Exel business, our shareholding in the Natref refinery, and the acquisition of fuelcomponents and the fuel blending and storage facilities at Sasol Synfuels in Secunda. Products include gasoline,diesel, jet fuel, fuel alcohol, illuminating paraffin, liquefied petroleum gas, fuel oils, motor and industriallubricants and bitumen. Sasol Oil also encompasses crude oil procurement, shipping and refining, as well asfinal product supply to, and trading with, other oil companies operating in Southern Africa.
 Strategy
  combination of Sasol’s liquid fuels business and Petronas’ South African liquid fuels businesses, Engen, in ajoint venture to create a leading South African liquid fuels business. On 23 February 2006, despite earlierapproval by the European Commission, the proposed joint venture was prohibited by the Competition Tribunalin South Africa as it ruled that it would have had anti-competitive effects on the industry. Since the ruling, SasolOil has reviewed and re-aligned its strategy and has also appropriately structured the organization andmanagement team to drive the revised strategy.
  Charter and the advancement of BEE we planned to attain the equity commitment through theabove mentioned joint venture transaction. The ruling by the Competition Tribunal delayed such realization,however, on 1 July 2006 we realized this commitment when Tshwarisano acquired a 25% shareholding in Sasol Oil. This transaction has facilitated the meeting of the 25% BEE ownership target in compliance with theLiquid Fuels Charter. See “Item 4.B – Business overview – Regulations – Empowerment of historicallydisadvantaged South Africans”.


Principal markets
 Liquid fuels marketed
 2006
 2005
 2004
  3
      3
     Natref refinery operational statistics
 1
 2006
 2005
 2004
  3
             1.
 Data based on our 63.64% share in Natref.
  In addition, 25% of South Africa’s fuel demand is met from components produced at Sasol Synfuels in Secunda.Our main wholesale customers in the South African liquid fuels market include Engen, BP, Chevron, Shell andTotal. These companies, amongst others, currently purchase part of their liquid fuels requirements for the SouthAfrican market from us through short to long term supply agreements. The process of concluding supplyagreements with smaller emerging oil companies is progressing as well.
 Raw materials
  from the Middle East approximately 12,000 bpd of crude oil is purchased from Naftiran Intertrade CompanyLimited of Iran and approximately 20,000 bpd of crude oil is purchased from Saudi Arabia) through crude oilterm contracts and the balance at spot prices from West Africa and other sources. Crude oil is landed at Durbanand is transferred to the refinery through a 670 kilometer pipeline owned by Petronet, a subsidiary of Transnet,which is a state-owned pipeline company.
 Marketing channels
  South Africa, where an estimated 63% of the country’s white products are consumed. We currently supplyapproximately 9.1 million m
 3
   3
  3
    concluded individual supply agreements with the main and emerging oil companies operating in South Africa.These agreements, differing in duration, cover the supply of liquid fuels, including gasoline, diesel, liquefiedpetroleum gas, jet fuel and illuminating paraffin. Over the last 12 months we have been able to supply ourcommitted volumes in terms of the supply agreements, albeit under very challenging circumstances. Oursupplies from Natref and Synfuels have been interrupted because of plant and/or refinery instability. We wereonly able to comply with our supply obligations by importing refined petroleum products. Even though Natrefand Synfuels have been stable over the last period, it is envisaged that the importation of refined petroleumproducts will continue because of planned plant shutdowns.
   3


agreement with the government of Swaziland for the supply of white product requirements. We have secured 11 retail service stations in Lesotho increasing our total market share from 19% to 36% to supplement ourcommercial market presence in that country.
  fuels and lubricants: the mining industry, the transport industry, reseller/distributors and governmentorganizations. Our marketing of products, such as our low-sulfur Sasol turbodieselTM, has promoted our sales inboth the commercial and retail markets.
  from 345 to 376 Sasol Convenience Centers and Exel-branded service stations as at 30 June 2006, in line withour dual-branding approach, which supports two distinctive but complementary marketing strategies.
    competitive and growth advantages and we intend to improve our position in the South African fuels market inthis respect. The previous restrictions on our direct sales to the South African market have been removedcreating opportunities to increase our fuel production and sales through access to the retail and commercialmarkets. We do, however, envisage that local and national regulatory requirements will delay the approval of sites.
 Property, plants and equipment
  diesel and other white products. It is South Africa’s only inland crude oil refinery, as the other three crude oilrefineries are located along the country’s shores. Its inland location does not allow the refinery easy access to thebunkers fuel market, as is the case for coastal refineries. Therefore, Natref focuses on the production of refineddistillate fuels and only produces a small percentage of fuel oil and bitumen. It is designed to upgrade relativelyheavy crude oil with a high sulfur content (sour) to yield about 90% white petroleum products. Crude oilselection and degree of upgrade are ultimately dictated by refinery configuration and overall economics. Otherproducts of the refinery include commercial propane, jet fuel, different grades of bitumen and fuel oils.
  of corporate actions, including, among others, increasing or reducing Natref’s share capital, amending Natref’sMemorandum and Articles of Association and the rights attaching to its shares, appointing directors to serve asexecutive officers and determining directors’ remuneration.
  13.64% of the ordinary shares in Natref from Sasol at fair market value upon the occurrence of certain events.Since December 2003 Total had two opportunities to increase its shareholding in Natref to 50%, the first beingthe termination of the Main Supply Agreements and the second the proposed transaction between Sasol andPetronas which was prohibited by the Competition Tribunal. On both occasions Total decided not to exercise itsoption to increase its shareholding in Natref.
  completed in October 2005. The project objectives to discontinue the addition of lead additive to gasoline and produce diesel that contains less than 500 ppm of sulfur were both achieved within the approved budget ofR531 million. The impact of this has been that Natref’s refining capacity is reduced to 89% of previous capacity.In addition, new processing units will have to be built to meet the further evolution of South African requiredfuel specifications (required for the control of exhaust emissions from road-going vehicles in South Africa) bythe earliest in 2010 and restore the reduced capacity of the refinery, which will require a substantial investment.


shutdowns the most significant were outages of the crude distillation unit and a power failure. A majorturnaround of the crude distillation unit and catalytic reforming units is planned for the 2007 financial year thatwill result in net budgeted availability, excluding unplanned downtime to reduce to 94% as opposed to 96% forthe 2006 financial year.
  terminate the agreement to transfer these components with effect from 1 January 2005. After evaluating varioustechnical options, agreement was reached with Petronet to continue with the transfer of synthetic fuelcomponents to Natref. Modifications to the pipeline have now been effected in order to ensure that the transferof synthetic fuel components can take place whilst allowing Petronet to also use the line for other products.
 Sasol Gas
 Nature of the operations and its principal activities
  Gas operates a 2,084 km pipeline network. Sasol Gas is a shareholder in ROMPCO and Spring Lights Gas (Pty)Limited (Spring Lights Gas). Sasol Gas operates and maintains the 865 km transmission pipeline from the gasfields in Mozambique to Secunda in South Africa on behalf of ROMPCO under a contractual agreement.
  250 industrial customers in the then Witwatersrand area. We expanded our network to more than 800 kilometresof distribution pipelines by 1977. During 1996 we concluded an agreement with Petronet to utilize the Lillypipeline in order to expand our network to the geographical area of KwaZulu-Natal. Our network has reached1,350 kilometres of distribution lines after the expansion to the Pretoria geographical area in 1997. Based on theavailability of methane-rich gas in Secunda we developed the industrial markets of Secunda, Witbank,Middelburg and developed the KwaZulu-Natal market down to the Durban South Area.
  from Mozambique, ROMPCO was established as the owner of the Mozambique to Secunda gas transmissionpipeline (MSP).
  the South African and Mozambican governments nominated shareholders, namely the South African GasDevelopment Company (Pty) Limited (iGas) and Companhia de Moçambicana de Gasoduto (CMG) wereafforded a deferred option to purchase in aggregate up to 50% of the shareholding in ROMPCO. With effectfrom 1 July 2005, iGas exercised its option and purchased 25% of the shares in ROMPCO. A profit of R205million was realized on this transaction. CMG is finalizing its financing arrangements for the exercise of itsoption to acquire a 25% interest in ROMPCO. CMG submitted a conditional offer to purchase on 26 June 2006,subject to the approvals of the respective financing institutions and the guarantor. These approvals have beenobtained subsequent to 30 June 2006. We anticipate this transaction will be finalized before the end of secondquarter of 2007. The business risk profile of the particular investment will not be adversely affected as a result ofthe exercise of the option. On the contrary, the exercise of the option would positively affect the political riskprofile of the investment in ROMPCO and the MSP.
  its business rights to market pipeline gas in the Durban South area to Spring Lights Gas which is now enteringits fourth year of successful commercial operations with increased operating profit on the previous year. A BEEcompany, Coal Energy and Power Resources, holds 51% of the shares and Sasol Gas the balance. During the lastquarter of 2006 the shareholders signed an amendment to the existing shareholders agreement to negotiate a newsupply agreement to expand the Spring Lights Gas marketing area to the remainder of KwaZulu-Natal.


Natal market. In April 2005 we renewed the gas transportation agreement to continue the use of the pipeline fora duration of 17 years (until 2022), with an option to extend the agreement for a further three years.
 Strategy
  Value Chain”, to add value to its stakeholders through the marketing of pipeline gas from various gas sources inSouthern Africa as it becomes available.
  141 MGJ/a by June 2008”, has been set and internally communicated to ensure alignment in objectives of theoriginal Natural Gas Project aimed to supply 120 MGJ/a natural gas for 25 years with a ramp-up period of fouryears to June 2008 as well as supply 21 MGJ/a methane-rich gas to the KwaZulu-Natal and Secunda, Witbankand Middelburg markets.
    strategy provides an incentive for further gas exploration by Sasol Petroleum International. Sasol Gas also addsvalue to methane-rich gas produced by the Synfuels plant in Secunda through the marketing of the gas.
  alternative market. The latter includes the wider definition of all applications of coal (e.g. power generation andcogeneration) and not only in boilers for steam generation. Growth opportunities in the high value markets,where the energy alternatives include liquefied petroleum gas, fuel oil and other oil products, especially throughorganic growth from existing customers, are regarded as being equally important.
  the remainder of the ramp-up to the full 120 MGJ/a natural gas, Sasol Synfuels will utilize additional gas. Thisincrease in the planned gas consumption during the ramp-up period will have a positive impact not only on SasolGas and Sasol Synfuels, but also on the overall economics of the Natural Gas Project.
  customer contracts encompasses the negotiation of long term commitments, gas supply contracts and capitalallocations. Large projects, such as co-generation, require significant time to be developed as it is integrated intothe customer’s production facility through the supply of electricity and steam utilities.
  further exploration activities in Mozambique by SPI be successful the second phase expansion of the supplyinfrastructure would enable a total of 240 MGJ/a to supplied to markets in South Africa and Mozambiquecommencing 2012.
 Principal markets
  Mozambique. In the energy market, our marketed gas competes with crude oil-derived products, electricity andcoal in various industries, such as ceramics, glass, metal, manufacturing, chemical, food, paper and pulp and anumber of other sectors.
  market will grow further as a result of the introduction of natural gas from Mozambique in 2004. The currentsupply of 106 MGJ/a of pipeline gas has increased from 53 MGJ/a in 2004. Compared to developed countries,South Africa is a small consumer of natural gas as a percentage of its total energy requirements. This presents uswith opportunities to increase sales of environmentally preferred natural gas. Environmental and technological


trends together with new environmental legislation are expected to entice customers to convert to gas as asubstitute for environmentally less desirable energy sources. During 2006 natural gas volumes sold reached 88 MGJ and methane-rich gas volumes 18 MGJ.
  Mpumalanga, Gauteng, KwaZulu-Natal, North-West and the Free State. Besides marketing pipeline gas to thesecustomers, natural gas is also supplied as feedstock to Sasol’s facilities in Sasolburg and Sasol Synfuels inSecunda.
 Raw materials
  from the Sasol Synfuels facility in Secunda pursuant to a gas supply agreement. Sasol Synfuels has beensupplying methane-rich gas to us since 1994. We have recently renewed the gas supply agreement which iseffective as from 1 July 2006. Methane-rich gas is transported through Petronet’s Lilly pipeline and distributedvia our own pipelines to customers in the Kwazulu-Natal area as well as via our own pipelines to customers inthe Secunda, Witbank and Middelburg area.
 Property, plants and equipment
 The Mozambique to Secunda Pipeline
 from the natural gas central processing facility at Temane in Mozambique and ends at the pressure protectionstation in Secunda in South Africa. The instantaneous peak capacity of the pipeline is 136 MGJ/a with anaverage of 120 MGJ/a.
 Inland Distribution Network
 The network is operated at a pressure of 3,350 kPa and lower and the capacity of the distribution network is 80 MGJ/a. These pipelines supply the various low pressure distribution areas as well as some customersdirectly. Where these lines enter the various distribution areas, a pressure reduction station reduces the pressureto 625 kPa.
 Secunda, Witbank and Middelburg Distribution Network
 gas to Sasol Gas. This is fed into the Secunda-Witbank-Middelburg pipeline to feed the customers and users inMpumalanga province. The normal maximum operating pressure for this pipeline is 3,000 kPa. The capacity ofthis distribution network is 10 MGJ/a.
 KwaZulu-Natal Network
 and fed into the Petronet transmission pipeline to feed our customers and users in the KwaZulu-Natal Province.The operating pressure of the pipeline is 5,300 kPa. The maximum operating pressure of the pipeline is 5,900 kPa and the capacity of the network is 20MGJ/a.
 Sasol Synfuels International
 Nature of operations and principal activities
  responsible for developing and implementing international business ventures based on our Fischer-Tropschsynthesis technology. SSI initiates and develops new ventures from project conception through to ventureimplementation. We expect that, in time, it will participate fully in supporting those ventures and the marketingof their products after commercial start-up.
  commercialize Sasol’s competitive Fischer-Tropsch synthesis technology for the beneficiation of coal and otherhydrocarbon resources, including biomass.


The Sasol SPDTM process
  we have successfully developed a Fischer-Tropsch-based SPDTM process for converting natural gas into high-quality, environment-friendly diesel and other liquid hydrocarbons. The GTL process consists of three mainsteps, each of which is commercially proven. These include:
      worldwide basis we have extensive experience in the application of Fischer-Tropsch technology on a commercialscale, with Shell being the only other company with significant experience in this field. Given the increasingdiscovery of extensive natural gas reserves, especially in remote regions, our Sasol SPDTM process can beapplied with significant commercial and efficiency advantages in various parts of the world. The transportationof fuels in liquid form is easier and cheaper than the transportation of gas. As a consequence, our technology hasevoked interest from countries and companies with extensive natural gas reserves as an appealing alternative forexploiting these reserves. In recent years, we have been actively promoting our Sasol SPDTM technology and areexamining several projects with a view to commencing commercial application at new GTL plants.
  generally more environment-friendly and of higher quality and performance compared to the equivalent crudeoil-derived products. In view of product specifications gradually becoming more stringent, especially withrespect to emissions, we believe that the option of environment-friendly GTL fuels will become more appealingin time. However, the construction of GTL facilities and the production of GTL fuels require significant capitalinvestments, at least during their initial stages, as is usually the case with the application of new technologies.GTL fuels can be used with optimized engines for best performance, although they can also be utilized withcurrent compression ignition engines. We also expect that GTL diesel may be suitable as a cost-competitiveblend stock for conventional diesels, thereby enabling diesel producers to improve the quality of their existingdiesel formulations without investing substantially in sophisticated new plants and infrastructure. We anticipatethe combined factors of GTL diesel’s superior characteristics and the prevailing market conditions in developedeconomies will enable GTL products to initially command premium prices for either niche applications or as ablend stock for upgrading off-specification products.
 The Sasol Chevron joint venture
  to identify and implement ventures based on the Sasol SPDTM process as part of our strategy to exploit ourFischer-Tropsch technology and to develop and commercialize the GTL process. We believe that there areconsiderable synergies between the two companies, which will enable the alliance to accelerate both theimplementation of GTL ventures and the development of markets for the new products, to be produced from theventures that will be established. We finalized and implemented our global joint venture in October 2000. SC and SSI continue to be involved in exploratory discussions and feasibility studies with some of the world’sgas-rich countries, including Qatar, Nigeria, Algeria and Australia, with the view to develop GTL plants over thenext decade.


Increasing cost challenges
  sharp increase in commodity prices and hence project cost. Because of the fortunate timing of the project awardand planning of orders for the major equipment our GTL project in Qatar has experienced only a limited impacton cost. The GTL project in Nigeria has been more exposed, but we are working closely with all stakeholders todeal with these challenges. We believe that these actions will be sufficient to address all known challenges. Bothprojects are however showing robust economics, partly as a result of the positive impact of higher crude oilprices.
  Johannesburg, SSI and SC are involved in an ongoing program aimed at further improving competitiveness bylowering the capital and operating costs of future GTL plants.
   The Qatari GTL project
  GTL venture, in respect of the joint development of a 34,000 bpd GTL plant at Ras Laffan Industrial City inQatar. We hold 49% in this venture, with QP holding 51%. Since the project commenced in March 2003 adedicated Sasol management team has been established in Qatar.
  recourse debt financing for the venture. QP and SSI awarded the lump-sum, turnkey engineering, procurementand construction (EPC) contract to the multinational, French-based engineering company, Technip, in December2002. The EPC contract became effective in March 2003 after finalization of the financing agreements. The EPCcontract is being executed from Technip’s operations in Rome. Sasol Technology design engineers and projectmanagers are managing the technology, engineering and project management portfolios for SSI and QP.
  including pipe laying, was completed by mid-2005. Most major pieces of long-lead-order equipment, includingthe two low-temperature Fischer-Tropsch Slurry Phase reactors fabricated in Japan, Haldor Topsøe autothermalreformers, a Chevron IsocrackingTM unit and the compressors arrived at Ras Laffan in phases during 2005. Theinauguration of the plant took place on 6 June 2006. The commissioning of the plant has been delayed to thesecond quarter of 2007 following damage during early commissioning to a supporting utility system. Most of theOryx GTL diesel will be marketed to customers in Western Europe, where much of this ultra-low-sulfur dieselwill most likely be used as blend stock for higher-sulfur diesel derived from conventional oil refining.
  to about 100,000 bpd. In support of these plans, SC and QP signed a memorandum of understanding for theexpansion project that would add a further capacity of about 66,000 bpd. This expansion is still under reviewand will partly depend on the timely availability of natural gas.
 Escravos GTL (EGTL)
  southern Nigeria. EGTL is a joint venture between the Nigerian National Petroleum Corporation and ChevronNigeria Limited, two companies with established petroleum production interests at Escravos. In April 2005 theEPC contract for this project was awarded to Team JKS. Site preparation was completed and plant constructioncommenced earlier this year and start-up of the EGTL facility is expected in the 2009 calendar year.


Early-stage investigation of potential GTL projects
  Qatar, with a capacity of about 130,000 bpd. SC has completed a feasibility study that will be presented to QPfor their support.
     Coal beneficiation study for China
  650 kilometers west of Beijing; and another in Ningxia Hui Autonomous Region at a site about 1,000 kilometerswest of Beijing. We have already established at Beijing a CTL project office with an initial complement of 10 specialists.
  joint-venture partners, Shenhua Corporation and Shenhua Ningxia Coal Limited, SSI recently completed the pre-feasibility studies for these CTL plants. The outcome of these pre-feasibility studies conducted during 2005 and2006 was favorable.
  China. In terms of these agreements, SSI and the Chinese partners will complete feasibility studies for theenvisaged development of two CTL plants in China during 2008.
  Should the investment decision be made to proceed with these projects, the plants could be brought intooperation as early as 2012/2013. The estimated capital cost for each plant is currently approximately US$ 5 billion to US$ 6 billion.
 Early-stage investigation of potential CTL projects
  This has resulted in the decision to open a representative office, likely in Mumbai, with an initial complement ofsix specialists.
  undertaken in response to the passing of the US Energy Policy Act of 2005, which aims to combat growingenergy problems. A decision to progress to a full feasibility study is expected during the first half of 2007calendar year.
 Catalyst facility
  cobalt catalyst for application in the Sasol SPDTM reactor to be utilized in future GTL plants. We entered in to aco-investment agreement with BASF Catalyst during 2002 to manufacture proprietary advanced cobalt catalyst.The first cobalt catalyst production facility with a current production capacity of 675 Mt per annum wascommissioned at De Meern in the Netherlands and has since been producing and stockpiling catalyst for ourNigerian and Qatari GTL plants. We are currently undertaking engineering studies for the second catalyst plantin the Netherlands.


Sasol Polymers
  Chemical Industries Limited and Sasol Polymers International Investments (Pty) Limited (Sasol PolymersInternational Investments) a subsidiary of the Sasol Investment Company. Sasol Polymers InternationalInvestments manages our offshore operations.
 Nature of the operations and its principal activities
  Sasol Synfuels and by cracking of ethane. Propylene is produced by depropanizing a propylene-containingFischer-Tropsch stream supplied from the Sasol process. The ethylene is polymerized into low densitypolyethylene (LDPE), linear low density polyethylene (LLDPE) and the propylene into polypropylene. Weoperate a fully integrated chlor-alkali/polyvinylchloride chain. Ethylene and chlorine, which arises from on-sitechlor-alkali plants, are reacted to produce vinyl chloride monomer and then polymerized to polyvinylchloride(PVC). Caustic soda, hydrochloric acid, soda hypochlorite and calcium chloride are other chlor-alkali productswhich are produced.
    joint venture between Sasol and AECI. In 2000 Sasol purchased AECI’s shareholding. Polifin was divisionalizedin Sasol Chemical Industries Limited.
        Limited, a manufacturer and supplier of organic peroxide chemicals and a 50% interest in DPI Holdings (Pty)Limited, a joint venture with Group Five Limited, a manufacturer of PVC pipes and components for the buildingindustry. Our board approved the disposal of interest in DPI Holdings (Pty) Limited to Dawn Limited for aconsideration of R51 million. The transaction was approved by the South African Competition Tribunal andbecame effective during October 2006.
   Dow Chemical Company of the USA), a manufacturer of ethylene and propylene. Optimal Olefinsoperates a 600 kilotons per annum (ktpa) ethane/propane cracker.
    subsidiary of the National Petrochemical Company, a manufacturer and supplier of ethylene (1,000 ktpa),LDPE (300 ktpa), and medium and high density polyethylene (300 ktpa). The facilities are underconstruction and are expected to be ready for operation between April and June 2007.


Strategy
       enlargement of the PVC/vinyl chloride monomer plants to 200 ktpa, two major expansions in pursuit of thesestrategic ambitions have been undertaken and are nearing completion:
  Synfuels at Secunda. This project will also result in increased ethylene and propylene feedstock andhence expansions of production and purification plants have taken place in Secunda and Sasolburg.Consumption of the additional ethylene and propylene will be in-house by means of a new tubularreactor LDPE plant of 220 ktpa using ExxonMobil technology at Sasolburg; enlargement of the existingUnivation linear low density polyethylene (LLDPE) plant to 150 ktpa; and a new 300 ktpa Innovenepolypropylene plant at Secunda. Except for the polypropylene plant which is still under construction, allother plants have achieved successful start-up and will consume monomers from Sasol Synfuels’ newselective catalytic cracker at Secunda; and
  Sabtec technology, and 300 ktpa medium density polyethylene using Basell’s Lupotech G technology areunder construction.
  polymer markets for the immediate future in terms of PVC and LLDPE and for the medium to long term interms of LDPE and polypropylene.
   Principal markets
    these markets. Our main competition is in the form of polymer imports from Asian and Middle Easternproducers. We supply 160 ktpa of ethylene and 100 ktpa of propylene under contract to The Dow ChemicalCompany’s plastics operation in Sasolburg, South Africa, by pipeline for the production of HDPE andpolypropylene, respectively. We compete directly with The Dow Chemical Company in the polypropylenemarket, where we hold 50% of the South African market. Caustic soda is sold into the pulp and paper, mineralsbeneficiation and soap and detergent industries in South Africa. We hold a 40% share of the caustic soda market.Another merchant supplier, NCP Chlorchem, has a 24% market share, the Mondi Paper Company producescaustic soda for its own use (6% of demand) and a 30% shortfall exists in the South African market which isserviced through imports.
  calcium cyanide for the reworking of goldmine sand deposits ceased operation in March 2005, and the cyanideassets were reconfigured to produce only sodium cyanide. Declining gold production in South Africa is the maincause for reduction in sales of sodium cyanide in the past year.


Angola, Ivory Coast, Senegal and the Democratic Republic of Congo); 23% is sold into China; 21% into EastAfrica (Tanzania, Uganda and Kenya); 19% into Southern Africa (Zimbabwe, Zambia, Malawi, Mozambiqueand Swaziland) and 8% into Western Europe with Spain being the largest market. Product from the Petlin plantin Malaysia is sold into Malaysia, India, China, Australia, and New Zealand.
 Seasonality
    and the size of plants. The duration of a typical cycle is seven years and margins can vary from low troughconditions to extreme peak conditions. During tight supply/demand periods, which usually coincide withincreases in economic activity as measured by gross domestic product, margins may increase disproportionatelywith high peaks. In time margins reduce as investment is stimulated or as demand dissipates. It may happen thattoo much capacity is installed which results in collapsed margins.
 Raw materials
  fuel-alternative values. The mechanism for determining the fuel-alternative value is based on the Basic FuelPrice. With the recent volatility in the oil price and refinery margins, our feedstock costs have put severe strainon margins particularly as Far East polymer prices, though high in dollar terms according to historical norms,have not fully responded to the increase in the oil-based costs of production. Salt used in our production processis imported from Namibia and Botswana at US-dollar denominated prices.
  Olefins) is purchased from Petronas at a set price, unrelated to oil, that escalates annually in line with USinflation rates. Petlin (Malaysia) buys its ethylene feedstock from Optimal Olefins at market related prices. AryaSasol (Sasol Polymers International Investments joint venture in Iran) will buy its feedstock, ethane, from thePars Petrochemical Company at a set price, unrelated to the oil price. In times of high oil prices this provides acompetitive advantage to the operations in Malaysia and Iran, compared to crude oil based producers.
 Marketing channels
  offices are located in Johannesburg, Durban and Cape Town. Account Managers are responsible for managementof our relationship with customers. Sales administration staff manage order processing, logistics and paymentcollections.
  through distributors and agents into East and West Africa, the Far East, Europe and South America. Noinfrastructure currently exists in the export markets with all administration and logistics arranged from theJohannesburg office.


Property, plants and equipment
  Production capacity
 Product
 South Africa
 Malaysia
 1
 (ktpa)
 (ktpa)
                                1.
 Includes our attributable share of the production capacity of equity accounted investees.
   Sasol Solvents
 Nature of the operations and its principal activities
  are used in the manufacture of paints, inks, coatings, adhesives, pharmaceuticals, cosmetics, fragrances and otherapplications. In addition to their solvent applications, a number of these products serve as intermediates for theproduction of downstream chemicals. We believe that the breadth of our product portfolio is a competitiveadvantage, compared to more limited portfolios of some of our competitors in the global solvents market.
 Strategy
   incorporated into Sasol Solvents for reporting purposes as a result of the proposed divestiture of Sasol Olefins &Surfactants. The alpha-olefin comonomers, 1-pentene, 1-hexene and 1-octene, are manufactured at facilities inSecunda as an integral part of Sasol’s synfuels process. The proposed divestiture of the Sasol Olefins &Surfactants business has also led to certain organizational changes. These changes have not had a significanteffect on the strategy of our solvents business.
  plant facility produces acrylic acid used captively for the production of glacial acrylic acid, butyl acrylate andethyl acrylate from feedstock produced by the group. This facility underscores our commitment to expand ourchemical portfolio by adding value to chemical feedstock we produce.


Principal markets
  offices in Johannesburg, South Africa and Hamburg, Germany. We operate thirteen regional sales offices andseven storage hubs in South Africa, the Asia-Pacific region, the Middle East, the United States and Europe.
  chemical companies. In the market for ketones, our main competitors are ExxonMobil, Shell Chemicals andIneos. In the alcohols market, our main competitors are BP Chemicals, Shell Chemicals, The Dow ChemicalCompany, Celanese and Equistar. In the market for acetates and acids, our main competitors include Celanese,Eastman and BP Chemicals.
  of polyethylene plastics, which end up in applications such as shrink-wrap film, woven plastic bags and refusebags. The main competitors include Ineos, Shell and Chevron.
 Marketing channels
   Property, plants and equipment
 Production capacity
 Product
 Facilities location
 Total
 1
 (ktpa)
 Ketones
 333
 Acetone
  175
 MEK
  130
 MiBK
  28
 Glycol ethers
 80
 Butyl glycol ether
  80
 Acetates
 60
 n-Propyl acetate
  10
 Ethyl acetate
  50
 Mixed alcohols
  181
 Pure alcohols
 860
 Methanol (C
 1
 )
  140
 Ethanol (C
 2
 )
  285
 n-Propanol (C
 3
 )
  45
 Isopropanol (C
 3
 )
  225
 n-Butanol (C
 3
 )
  150
 iso-Butanol
  15
 Acrylates
 94
 Ethyl acrylate
  26
 Butyl acrylate
  60
 Glacial acrylic acid
  8
 Comonomers
 275
    Other
  28
 1.
 Consolidated nameplate capacities excluding internal consumption, including our attributable share of the productioncapacity of equity accounted investees.


African production facilities are located at Secunda, Germiston and in Sasolburg. The German productionfacilities are located at Herne, Marl and Moers in the Ruhr area.
  will increase capacity by 30 ktpa is planned for the middle of 2008. The estimated expenditure amounts to R250 million. A number of small de-bottlenecking projects will also be implemented.
  Secunda and certain products are synthesized from chemical feedstock. Ethanol, isopropanol and methyl ethylketone (MEK) are synthesized from ethylene, propylene and butene, respectively, at the German plants. In SouthAfrica, butanol and acrylic acid are synthesized from propylene.
         for these products has been strong and, combined with the recent shutdown by a major competitor of a US production plant, the supply/demand balance is healthy and is expected to remain so for the foreseeablefuture.
 Other activities
 Sasol Wax
 Nature of the operations and its principal activities
  We manufacture crude oil-derived paraffin waxes, as well as synthetic waxes produced on the basis of ourFischer-Tropsch technology. Sasol Wax has its head office in Hamburg and employs 970 people globally.
 The overall volume of products marketed by the business amounts to 822 ktpa, of which 27% are productsderived from the Fischer-Tropsch process. The main product portfolio includes paraffin waxes, both fully refinedand semi-refined, produced and marketed in various grades, as well as Fischer-Tropsch-based synthetic waxeswhich include the Fischer-Tropsch-derived hard wax, the Fischer-Tropsch-derived medium wax and liquidparaffins in the carbon range C
 5
  20
  We continue to develop niche markets for higher-value specialty waxes, such as those used by the food,cosmetics, pharmaceutical, construction-board and adhesive industries. Demand for our liquid paraffins forenvironmentally preferred drilling fluids has been growing in the Gulf of Mexico following the introduction ofmore stringent US Environmental Protection Agency specifications for drilling fluids and other oilfieldchemicals. We produce, as a result, about 106 ktpa of wax emulsion at facilities in Germany, Austria and theUnited Kingdom.
 Strategy
 Our strategy is to beneficiate synthesis gas (South Africa) and slack wax (Hamburg) to create value addedproducts marketed globally. We are a unique and important player in the wax market, having a product portfoliosought after by customers in more than 100 countries.


Principal markets
  both Europe and the United States, approximately 50% of paraffin waxes are sold to candle manufacturingcompanies and the balance is sold to numerous industries, including rubber and tire, cosmetics, adhesives andsurface coatings industries and for use as a drilling fluid. Fischer-Tropsch-derived hard wax production is soldpredominantly in the United States and Europe, and also in Asia. Fischer-Tropsch-derived medium waxes andparaffin waxes produced in South Africa are predominantly sold to the candle industry in South Africa.
  market are the Chinese producers China Oil and Sinopec. In specialty wax markets our main competitor is H and R Wax Company.
 Marketing Channels
  areas are the United States and Europe, but we also market our products in Latin and South America, SouthernAfrica, the Middle East, North Africa, Asia, and Australia. Distributors and agents are used but operate underdirect guidance from our marketing team.
 Property, plants and equipment
    slack wax feedstock from numerous lube-oil-producing refineries predominantly in Western Europe and fromEastern Europe and Africa. We initially de-oil slack waxes to fully or semi-refined quality and fully hydrogenateall final products. Subsequently, various product blends are produced. Products are sold either in liquid bulk orin solidified form. This operation has a trading activity of about 100 ktpa.
  used coal-derived syngas as feedstock, which was converted to Mozambican natural gas as from July 2004. Weown and operate a wax plant integrated into the Engen refinery in Durban, South Africa. This plant produceswax blends predominantly for the South African and other African candle industries. The production capacity ofthe South African wax plants amounts to 240 ktpa of Fischer-Tropsch-derived products, of which 70 ktpa arehard waxes, 80 ktpa medium waxes, 30 ktpa waxy oils and 60 ktpa liquid paraffins.
    Inc.), based in Shelton, Connecticut, is engaged predominantly in trading activities, both in Fischer-Tropsch-derived and paraffin waxes. Sasol Wax Americas, Inc. holds a 50% share in the Lux International Corporationwax business based in Richmond, California. The total product manufactured and traded by Sasol WaxAmericas, Inc. in the United States amounts to approximately 100 ktpa.
 Production capacity
 Product
 Facilities location
 Total
 (ktpa)


Sasol Nitro
 Nature of the operations and its principal activities
  also markets ammonia, sulfur and specialty gases produced by other entities in the group. All our productionactivities are located in South Africa. We focus on supplying the Southern African market with selective exportsof fertilizers, ammonium nitrate-based explosives and explosives accessories.
            Strategy
  business is now well positioned to achieve growth. In the short-term (1-3 years) growth will be achieved mainlythrough expansion of our current business. Over the longer-term (3-5 years) growth will be achieved throughdevelopment of new business. Long-term plans include inter alia, a biodiesel plant and an ammonium sulfateplant.
 Principal markets
  and explosives. The remaining production is sold mainly to other South African explosives and fertilizermanufacturers with small quantities made available for industrial usage in chemical manufacture and mineralbeneficiation.
  ammonia and is the sole supplier to the market. Approximately 4% of South Africa’s ammonia requirement in2006 was imported. Omnia and AECI are our two major customers for ammonia and compete in the downstreamfertilizer and explosives markets. We have entered into market-related contractual arrangements with thesecustomers.
 Marketing channels
  planting season and sustained low prices for maize had a significant negative impact on maize plantings for the2005/2006 season and thereby also the demand for fertilizers in Southern Africa.


worldwide. Explosive products are supplied mainly to the Southern African market, with exports of explosivesgrade ammonium nitrate mainly to Australia. Some quantities of cartridged explosives are also exported to otherAfrican countries.
  required for extensive mining activities. Demand for products from Sasol Dyno Nobel (Pty) Limited, a jointventure, reached record levels, mainly as a result of growth in niche markets. This business is poised for further growth. The acquisition of the remaining 40% of Sasol Dyno Nobel (Pty) Limited for a consideration of US$ 31 million (approximately R213 million) was approved on 30 August 2006.
 Property, plants and equipment
  that is sold to the oil and metal refining industries in South Africa. We also derive 330 ktpa of ammonia as a by-product from coal gasification in Secunda.
  downstream ammonium nitrate plant. The ammonium nitrate produced in Sasolburg is used mainly for theproduction of explosive grade low-density ammonium nitrate. The 470 ktpa nitric acid plant in Secunda suppliesa downstream ammonium nitrate plant linked to a 500 ktpa granulation facility that produces limestoneammonium nitrate and various other grades containing nitrogen, phosphorus and potassium. Ammonium nitratefor industrial use is sourced from both sites.
  325 ktpa phosphoric acid plant, of which 100 ktpa capacity has been mothballed since 2004 due to adversemarket conditions. Sasol has been toll manufacturing phosphoric acid for Foskor since September 2005 and alonger term tolling deal is awaiting approval from the South African Competition Commission.
     Production capacity
 Product
 Facilities location
 Total
 (ktpa)
  1
             2
      1.
 Includes volumes produced by Sasol Synfuels.
 2.
 Includes 100 ktpa mothballed capacity at Phalaborwa.


Sasol Infrachem
 Nature of the operations and its principal activities
  Polymers, Sasol Solvents, Sasol Wax and Sasol Nitro) as well as external businesses in Sasolburg. We operateand maintain the autothermal reformer (ATR) which reforms natural gas into synthesis gas on behalf of SasolGas. Sasol Infrachem is also responsible for managing the group’s corporate affairs related to the Sasolburg andFree State regions.
  environmental benefits of converting from coal to natural gas are being realized through a substantial reductionin emissions to air (including hydrogen sulfide, carbon dioxide, NOx and volatile organic compounds).
 Strategy
     Property, plants and equipment
 Production capacity
 Product
 Facilities location
 Total
          Merisol
 Nature of the operations and its principal activities
  activities of Merichem Company, based in Houston, Texas. The joint venture partners each own 50% of Merisol.Merisol has a strong presence in the global market for natural phenolics and cresylics with manufacturingfacilities in Houston, Sasolburg and Oil City, Pennsylvania. Merisol has an interest in the production of syntheticmeta, para-cresol through a 50:50 manufacturing joint venture with Sumitomo Chemicals. Merisol also has a20:80 venture (Merisol holding 20%) with Chang Chun of Taiwan for the production in Sasolburg of ortho-cresol novolac, a precursor to high-performance epoxy resins used for encapsulating memory and processorchips. Merisol is the supplier of ortho-cresol feedstock to this plant.
  carbonization and certain petroleum refining processes and are recovered for purification and separation. Merisolmanufactures the pure products, phenol, ortho-cresol, meta-cresol and para-cresol, and a diverse range ofblended products, consisting of mixtures of phenol, cresols, xylenols and other phenol derivatives. These blendsare known collectively as cresylic acids. Both the Sasolburg and Houston plants produce phenol- and ortho-cresol and cresylic acids. The Houston plant uses proprietary separation technologies to produce high-puritymeta, para-cresol and pure meta-cresol and para-cresol, making Merisol one of the few producers of theseproducts in the world.


Principal markets
  United States and South Africa. Markets are served from product inventories held in Rotterdam, for theEuropean market, in Houston, for the US market and in Taiwan and Sasolburg for most other markets.
  synthetically produced equivalents. Merisol is relatively small in the global phenol market, but strong in theSouth African market and in selected niche markets elsewhere.
             Property, plants and equipment
  completed the first and major part of its R400 million project to expand and improve feedstock recovery andprocessing operations. This part of the investment includes a new Sasolburg plant to extract and refine additionalvolumes of Secunda tar acids, to enable Merisol to grow with future market demand and compensate for thedecrease of other feedstock globally. These additional volumes are further processed at the Houston plant.Following the successful completion of the new Sasolburg plant, the Houston operations are now in the finalstage of being rationalized and streamlined to reduce costs.
   Production capacity
 Product
 Facilities location
 Total
 (ktpa)


Sasol Petroleum International
 Nature of the operations and its principal activities
 Mozambique
  since the first quarter of calendar year 2004. Current gas production levels (at 75% of the design capacity) arevery much in line with original expectations at the time of project approval.
  plant has been initiated, and is scheduled for completion by the end of the 2007 calendar year. This is the secondstage of development of the business and will bring gas production to 100% of design capacity.
  they have now also acquired an interest in the gas processing plant. With effect from 1 April 2006, the effectiveownership structure of the current business in Mozambique is 70% Sasol Petroleum Temane Limitada (SPT),25% Companhia Moçambicana de Hidrocarbonetos, SARL (CMH) and 5% International Finance Corporation.
    2
  during 2005, and good progress having been made with the environmental impact assessment that is required toallow seismic surveys to be conducted in the Offshore Block 16/19 area during 2007. These explorationactivities are aimed at further expansion of gas reserves in support of market opportunities that have beenidentified, both in South Africa and in Mozambique.
 Gabon
  Inc. (28.07%) and other members of the consortium. Exploration efforts resulted in the discovery of the Etameoil field in 1998. The field went on stream in 2002 at an average rate of 15,000 bpd. During 2006, the fieldproduced oil, at an average rate of 18,500 bpd. The last development well, Etame-6-Horizontal, came on streamin July 2005. The field is currently producing from one vertical and three horizontal wells.
  that the Ebouri field was commercially viable. Both discoveries were made in the previous year. The Avoumafield is currently under development with the first oil expected to be produced by the end of the 2006 calendaryear. It will be tied back to the Floating Production Storage and Off-take (FPSO) vessel on the Etame field. Thiswill contribute significantly to the flow of oil from the block. The development plans of the Ebouri field arenearly completed and will be submitted to the Gabonese government for approval during 2007. The field isexpected to be on stream by the end of the 2007 calendar year. The Gabonese government also approved a threeyear extension of the exploration rights covering the acreage that is not yet producing. A large three dimensionalseismic survey will obtain a better understanding of a large structural closure.
    the block was acquired during the year and will be incorporated into existing information with the aim to definea location to drill a second exploration well. We are still deciding whether to enter the next exploration phase.


Equatorial Guinea
  (25%), and Tullow Oil (20%). We secured a farm-out agreement with Petrobras which when fully ratified by allpartners will reduce our interest to 5%. The Banyan L-2 well was drilled in 2006 and was a dry hole. Thepartners are currently considering the remaining prospectivity of the block prior to the end of the currentexploration period in October 2006. This block carries no outstanding obligations in the current explorationphase.
 Nigeria
  acreage in Nigeria. We have been offered a 5% interest in the OPL 214 permit. The farm-in has received all ofthe necessary approvals and is currently being finalized. A successful exploration well was drilled in 2005 andfollow up drilling is being planned. We currently hold a 3.75% interest, after all approvals were received in June2005, in the OPL 249 permit. The license includes part of the Bonga-SW/Aparo field on which a developmentplan has been presented to the government for consideration. Appraisal drilling was completed on the N’sikodiscovery and the development plan is in preparation. We have accepted a 6% interest in the OPL 247 permit.The farm-in has received all of the necessary approvals but still awaits Nigerian governmental ratification. A further opportunity to take up a 5.1% interest in Block 1 of the Nigeria/Sao Tome Principe joint developmentzone has been accepted and government approval has been received. The partners are concluding internalagreements to make this entry effective.
 South Africa
  West Coast. During the year, and as provided for in the 2005 farm-out agreement between Sasol and BHP Billiton, operatorship of the block was transferred to BHP Billiton upon commencement of the secondexploration period. BHP Billiton also concluded a farm-out agreement for a 30% participating interest with theSouth African State Oil Company, PetroSA. Reprocessing of three dimensional seismic data has been completedby BHP Billiton.
 Our strategy
  gas feedstock supplier to the group’s South African businesses and the gas markets. We are aligning ourselves tobe a gas feedstock supplier to the group’s international GTL opportunities. In addition, we are striving tobecome the centre of excellence within the group for enhanced oil and gas recovery uses for carbon dioxide.
 Principal markets
 Mozambique
  Africa. The Mozambican government is dedicating royalty gas for use in the vicinity of the processing plant inTemane as well as developing the gas market in the capital city, Maputo. The natural gas condensate produced inthe gas processing plant is currently exported via the port of Maputo to the Western European market, where it isused as a fuel blend stock.
 Gabon


Equatorial Guinea and Nigeria
   Marketing channels
 Mozambique
  the South African market. In the future it is foreseen that we will enter into a long-term sales agreement with asingle Mozambican entity that will purchase some of the additional gas volume that will become available fromthe proposed expansion of the current operations for use in Mozambique.
  future, it is foreseen that Sasol Petroleum Temane will enter into a long-term condensate sales agreement with aninternational commodity trading organization.
 Gabon
   Property, plants and equipment
 Mozambique
  Ownership is shared with the Mozambican government through CMH (25%) and the International FinanceCorporation (5%).
 Gabon
  Sasol Technology
 Nature of the operations and its principal activities
  sustain the Sasol growth initiatives. Sasol Technology aims to provide functionally driven support acrossgeographic boundaries through its research and development, new business development, engineering andproject management and plant technical support.
 Strategy


working together with the business units and taking responsibility for the long-term research and development oftechnology improvements as well as developing new technologies. Through engineering and project executionactivities Sasol Technology demonstrates its commitment to the delivery of functional plants to our businesspartners for their operation. Technical support works on an integrated basis with the business units’ operationspersonnel to improve the profitability throughout the group.
  constraints are manageable at this stage but are foreseen to become more problematic over the following years.Strategic plans are being developed to address these issues.
 Research and development
  focus on fundamental research, while the decentralized divisions focus on product applications. A phasedexpansion and modernization program of the Sasolburg research facility was implemented with the aim to:
       equipment and performance of the research and development facilities against those of other internationalorganizations. The enhanced facilities will allow the opportunity to commercialize new and improvedpetrochemical processes more effectively.
    100 research institutions, consortia and universities worldwide. In addition, strong emphasis is placed ontraining; as a result of this at least 20 of the employees from South Africa are at any given time studying abroadin a continuing effort to ensure top level in-house research competency.
 Fundamental research activities
  development of the Slurry Phase and Advanced Synthol reactors, the development of the proprietary cobaltcatalyst, the low temperature Fischer-Tropsch process, recarburized carbon, ethylene tetramerization and the 1-heptene to 1-octene conversion process.
  products. This includes research on coal gasification and gasification products, syngas conversion through theapplication of Fischer-Tropsch synthesis and research relating to adding value to Fischer-Tropsch-derivedproducts. Catalysis research includes the development of both iron- and cobalt-based proprietary Fischer-Tropsch catalysts. Sasol Technology has progressed in developing the second generation of the integrated SasolSPDTM process to convert natural gas into a clean-burning synthetic fraction of diesel and other premium-gradeproducts. In time, we plan to integrate some of the experience gained from operating the Nigerian and QatariGTL plants into the new-generation Sasol SPDTM process. Sasol Technology is also investigating chemicalexpansion opportunities based on GTL plants. In particular, the fuel products of the GTL plants can be divertedtowards the production of chemicals. As was the case with chemical production at Secunda, unique beneficiationtechnologies are being developed.


beneficiation, including separation and purification processes and new product development. Among othercarbon-based products and cresylic acids require adaptation of technology to meet product needs. Research hasbeen carried out on cresylic acids, another gasification by-product, on behalf of the Sasol joint venture withMerisol, relating to purification of various associated products and adding value to certain feed streams.
  olefins from Fischer-Tropsch products. This has helped to successfully develop purification processes for 1-pentene, 1-hexene, 1-heptene and 1-octene products, which allow the application of these products ascomonomers in polymers. Ongoing studies include those dedicated to the commercial viability of exploitingmetathesis and other processes to convert odd-number alpha olefins (such as 1-pentene and 1-heptene) into even-numbered counterparts (such as 1-hexene and 1-octene), which are in far greater demand. Sasol Technology isalso focused on improving hydroformylation as an alternative process for producing specialty alcohols fromolefins. Sasol Technology has also been successful at increasing the purities of hexene and octene comonomersto enable their optimal application with new-generation polyolefin catalyst systems. In order to benefit from theprojected demand growth in global markets for 1-hexene and 1-octene, we are investigating various potentialproduction routes, including ethylene trimerization and ethylene tetramerization.
  water treatment and purification. In this regard, special attention is given to water utilization, given the locationof some of the current and future plants in semi-arid areas. An integrated approach is being followed towardoptimization of current processes focusing, among others, on energy efficiency, emissions and water utilization.End of pipe solutions include technology such as microbial treatment processes and desalination technology,which has already been tested and implemented.
  cost. This includes research focusing on the application of catalytic distillation in various new and existingprocesses.
  Technology is investigating biodiesel and fuel cells. We are experimenting with the formulation and performanceof biodiesels derived from soya beans as well as from Fischer-Tropsch applied on biomass derived syngas. Weexpect that Sasol will be able to produce high-quality biodiesels based on renewable resources for potential useas a future fuel blend stock.
  chemistry during 2006, on a smaller scale, in order to improve productivity and speed up technologydevelopment efforts.
 Front end engineering and technology management
  Technology teams taking the ideas from our research and development teams and engineering them into acommercial proposition for exploitation by the group.
  undertaken on a integrated basis with the business unit leveraging with external technology suppliers andcontractors.
 Project execution and engineering
  projects in the group. The involvement is currently focussed in South Africa as well as Qatar for the executionand handover of the plants. Delivery of smaller projects and shutdowns are also undertaken.


African Amines
  alkylamines, principally for use in explosives, water-treatment chemicals and agricultural chemicals. Its productsrange includes:
      makes African Amines an efficient and cost-effective supplier to markets in Australasia, South America, theAsia-Pacific region and the Indian subcontinent. African Amines tends to be less competitive in the main ports ofEurope and the United States due to the density of local producers serving those markets.
 Discontinued operations
 Sasol Olefins & Surfactants
  to fair value being received. Substantial work was undertaken since the announcement to prepare the businessfor sale including:
         continuing operations and report these results as a single line item. In the 2006 balance sheet the assets andliabilities of Sasol Olefins & Surfactants have been classified as held for sale.
 Nature of the operations and its principal activities
      Alkylates and surfactants
  alkylbenzene (LAB) and their surfactant derivatives such as paraffin sulfonate and linear alkylbenzene sulfonate(LAS). LAB is the feedstock for the manufacture of LAS, an essential surfactant ingredient for the detergentsindustry. Paraffins (n-paraffins) and n-olefins are produced mainly as feedstock for the production of LAB andoxo-alcohols. A portion of this business unit’s products are used internally for the production of downstreamsurfactants.


Alcohols and surfactants
   6
  22+
  intermediates such as ethylene oxide, alkyl phenols and alkanolamines. The diversity of this product portfolio issupported by the wide range of raw materials (petrochemical, oleochemical and coal-based), technologies andmanufacturing facilities used. A portion of the alcohols production is consumed internally to produce surfactantsand specialty plasticizers.
 Inorganic specialties
  with alcohol) as well as in dedicated production units. The alumina is upgraded by means of a variety oftechnical processes to adapt the product characteristics, in some cases to highly specialized products. Thisbusiness unit also produces zeolites in a production facility in Italy.
 Monomers
   Strategy
  integration by being present in both the major value chains in surfactant manufacture and technical and siteintegration benefits from the three major producing countries, Germany, Italy and the United States. Furthermorethe business has fostered strong relationships with customers and has leveraged this to provide additional valuechain benefits by developing and supplying differentiated and specialty products. A challenge for the businesshas remained the increasing and fluctuating raw material/feedstock pricing associated with crude oil and energyprices.
 Principal markets
  either produced internally or by other parties having acquired the intermediates from us. The bulk of thesesurfactants in turn end in detergents or industrial or institutional cleaning products. The main competitorsinclude: ExxonMobil, Shell and Petresa in n-paraffins; Huntsman, Petresa and ISU in the LAB market; andStepan, Huntsman and Cognis in the LAS market.
  detergents and industrial and institutional products, these products also find wide application in industries suchas metalworking, flavors and fragrances, personal care, cosmetics, plastic additives, textiles and agriculture. Themain competitors include Shell and Cognis.
  catalyst support, raw material for ceramics, coatings and polymer additives. Competitors on aluminas includeAkzo Filtrol and BASF Catalyst. Zeolites are used as softening components in detergents. There are numerouscompetitors in zeolites.


Seasonality
  Cyclicality of this business is more related to the general chemical investment cycle, which impacts the supplyside of the market equation. Many of the markets that we serve typically follow global and regional grossdomestic product and are therefore impacted more by macro-economic factors.
 Raw materials
  aluminum (all purchased externally). The price of most of these materials are related to crude oil and energypricing and the prices would follow the crude oil and energy pricing reasonably closely. Over the past 4 yearsthese crude oil and energy prices have been increasing steeply and have been quite volatile.
 Marketing channels
  by our sales and marketing personnel. A limited number of distributors are used and are primarily centered inEurope. Approximately 60% of the total sales by Sasol Olefins & Surfactants are conducted under annual and insome cases multi-year contracts.
 Property, plants and equipment
  Production capacity
 Product
 Facilities location
 Total
 (ktpa)
     6+


Legal proceedings and other contingencies
 Litigation in respect of continuing operations
 Fly Ash Plant
 Ashcor has claimed damages of R313 million relating to its inability to develop its business and a projected lossof future cash flows. We believe the prospect of future loss is reasonably possible with the loss unlikely toexceed R10 million.
 Nationwide Poles
 (Carbo-Tar division) in April 2003. The complaint was referred by the plaintiff to the South African CompetitionTribunal. The Competition Tribunal found against Sasol that during the period of the complaint Sasol was adominant firm whose conduct met the test required in establishing prohibited price discrimination. The companyfiled a notice of appeal and the appeal was heard by the Competition Appeal Court during September 2005.Likelihood of loss is remote as the Competition Appeal Court found in favor of Sasol.
 Nutri-Flo
 discrimination, excessive pricing and exclusionary pricing. In November 2003, Nutri-Flo made an urgentapplication to the Competition Tribunal to obtain an interdict preventing Sasol from implementing a new pricelist. In this application Nutri-Flo again filed a complaint on grounds similar to those specified above. In additionit was alleged that Sasol, Kynoch and Omnia are acting as a cartel in fixing prices in the fertilizer industry.Nutri-Flo subsequently withdrew its application. However, the South African Competition Commission hasinvestigated the complaint and in May 2005, referred the matter to the Competition Tribunal, alleging findings ofprice fixing, prevention/lessening of competition, abuse of dominance and exclusionary conduct. TheCompetition Commission requested the Competition Tribunal to impose the maximum administrative penalty interms of the South African Competition Act. Sasol took the matter on review to the South African CompetitionAppeal Court. The court ruled against Sasol in April 2006 and the matter must consequently be heard by theCompetition Tribunal. Sasol has filed an exception to the referral of the complaint to the Competition Tribunalon the basis that it is vague and does not disclose a clear contravention of the Competition Act. On the basis ofthe pleadings in their current form, we believe the likelihood of a finding of unlawful conduct is remote. In theevent that the Competition Commission amends the referral, our current assessment may require review. For thisreason, it is currently not possible to make an estimate of the contingent liability (whether arising out ofpenalties that may be imposed by the Competition Tribunal or civil lawsuits that may arise in the event of afinding of unlawful conduct).
 Sasol Wax
 Sasol Wax International AG and its subsidiary Sasol Wax GmbH, both located in Hamburg, Germany. A parallelinvestigation is being conducted by the US Department of Justice. On 28 April 2005 Sasol Wax Americas Inc.received a subpoena for information from the United States District Court regarding its wax sales activities. Theinvestigations in the US and the European Union arise from alleged anticompetitive behavior among industrymembers in the paraffin wax industry. Sasol Wax is co-operating with the competition authorities in the US andin the European Union in order to clarify this issue. At this point of the investigation it is not possible to assessthe financial implications or inherent risk. A reliable estimate of the amount of the possible penalty cannot bemade, since the determination thereof is at the sole discretion of the antitrust authorities.
 Profert
 Profert, that discriminatory pricing towards Profert in sales of LAN was committed and that Sasol is engaged inexclusionary conduct to exclude Profert from the fertilizer market. In May 2006, the South African CompetitionCommission referred the complaint to the South African Competition Tribunal alleging that Sasol, AECI andKynoch have entered into agreements dividing the LAN market in order to make Sasol the exclusive supplier,that Sasol is engaged in conduct that favors Kynoch in supply arrangements to the exclusion of other suppliers,and that Sasol is committing discriminatory pricing against Profert. The Competition Commission requested theCompetition Tribunal to impose the maximum administrative penalty in terms of the South African CompetitionAct. Sasol filed a reply to the referral of the complaint on 4 August 2006. The Competition Commission has not


yet replied to Sasol’s submission. Preparations for the hearing are proceeding. On the basis of the pleadings intheir current form, we believe the likelihood of the Competition Tribunal imposing a penalty is remote. In theevent that the Competition Commission amends its referral, our current assessment may require review. For thisreason, it is currently not possible to make an estimate of the contingent liability (whether arising out ofpenalties that may be imposed by the Competition Tribunal or civil lawsuits that may arise in the event of afinding of unlawful conduct).
 Sale of Phosphoric Acid production assets
 an extent that Sasol indicated that it would shut down the operations in Phalaborwa. Sasol and Foskor thenentered into an agreement in terms of which Foskor would purchase the Phalaborwa plant. For the period thatthis intended sale was under assessment by the regulatory authorities, the parties entered into an agreement thatFoskor would supply phosphate rock at its cost and Sasol would toll manufacture phosphoric acid for Foskor.The toll manufacturing agreement commenced on 1 September 2005. In October 2005, the South AfricanCompetition Commission issued a recommendation that the proposed merger be prohibited and referred thematter to the South African Competition Tribunal. The parties abandoned the merger in June 2006 and notifiedthe Competition Commission that they intend to enter into a new toll manufacturing agreement for a period of 4 years. The Competition Commission has not expressed any view on whether the intended transaction wouldamount to a merger or not. The parties intend to finalize the terms of a new toll manufacturing agreement and tonotify the Competition Commission of the provisions of such agreement. Views that may be expressed by theCompetition Commission will be taken into consideration prior to implementation of the new agreement.
  commenced in September 2005) amounts to pre-implementation of a merger without the required approval bythe Competition Tribunal and/or if there were any other unlawful agreements between Foskor and Sasol relatingto the proposed sale of the phosphoric acid assets. If the matter is ultimately referred to the CompetitionTribunal and the parties are found to have implemented a merger without the necessary Tribunal approval, theparties could be faced with penalties of up to 10% of the turnover of their relevant businesses. We believe thelikelihood of the finding of unlawful conduct to be remote. In the event that the Competition Commission refersthe matter to the Tribunal, our current assessment may require review. For this reason, it is currently not possibleto make an estimate of the contingent liability.
 Other
 the normal course of business. Although the outcome of these proceedings and claims cannot be predicted withcertainty, the company does not believe that the outcome of any of these cases would have a material effect onthe group’s financial results.
 Litigation in respect of discontinued operations
 The EDC pipeline litigation
 originated as a result of a 1994 rupture of the ConocoPhillips ethylene dichloride (EDC) pipeline connectingConoco’s dock to Sasol NA’s vinyl chloride monomer plant in the United States. Plaintiffs are seekingcompensatory and punitive damages as a result of alleged exposure to EDC. As of 30 June 2006 there is a classaction and 13 lawsuits pending, brought by approximately 500 plaintiffs. Plaintiffs allege various personalinjuries resulting from exposure to EDC while employed as contractors of ConocoPhillips to clean up the EDCor to perform other projects on the ConocoPhillips refinery where the rupture occurred. The plaintiffs seekrecovery of unspecified compensatory and punitive damages. Sasol NA has successfully obtained substantialinsurance cover for costs to be incurred in connection with this litigation. Previous settlements for approximatelyUS$10 million of which Sasol NA’s share was US$3 million were made in 2003. While the cases are beingvigorously defended the likelihood of financial loss in the future is probable. The loss is unlikely to exceed theamount of US$3 million for previously settled cases.


Sulfur dioxide litigation
 sulfur dioxide into the environment as a result of a power outage in the ConocoPhillips Lake Charles refinery.Lawsuits were filed against ConocoPhillips and Sasol NA has since been added as a defendant. At 30 June 2006more than 600 lawsuits had been filed on behalf of more than 20,000 plaintiffs. ConocoPhillips and Sasol NAjointly defended the lawsuits and Sasol NA’s liability for defense and settlement costs has been limited byagreement. Sasol NA has paid the “cap” as per the agreement and therefore we believe the prospect of futureloss in this matter is remote, with no future loss expected.
 Yellow Rock litigation
 over US$1 million in damages and seeking an injunction that would require Sasol NA to remove its ethylenefrom Salt Storage Dome 1-A in Sulfur, Louisiana near the Lake Charles Chemical Complex. The suit allegesthat in 2004 the Dome 1-A was leaking ethylene and caused the “blow out” of an oil and gas exploration wellbeing drilled by Yellow Rock. An integrity assessment of the well performed by an independent consultant inearly 2005 concluded that the Dome 1-A was not leaking. While these results were conveyed to Yellow Rockand were approved by the Louisiana Department of Natural Resources, it did not deter the filing of suit. Webelieve the prospects of future events confirming a loss are therefore remote.
 US hearing loss cases
 business. These claims for occupational hearing loss in Louisiana are not covered by workers compensation. Thelikelihood of loss is considered reasonably possible as these claims will be settled. The range of expected futureloss through settlement is estimated to be between US$ 800,000 and US$ 1,150,000.
 Environmental Orders
  regulations that regulate the discharge of materials into the environment or that otherwise relate to the protectionof human health and the environment in all locations in which it operates. These laws and regulations may, infuture, require the group to remediate or rehabilitate the effects of its operations on the environment. Thecontingencies may exist at a number of sites, including, but not limited to, sites where action has been taken toremediate soil and groundwater contamination. These future costs are not fully determinable due to factors suchas the unknown extent of possible contamination, uncertainty regarding the timing and extent of remediationactions that may be required, the allocation of the environmental obligation among multiple parties, thediscretion of regulators and changing legal requirements.
  R2,268 million compared to R2,161 million in 2005 (R238 million and R158 million was accrued for 2006 and2005 respectively for our discontinued operations). Included in this balance is an amount accrued ofapproximately R395 million (R134 million for our discontinued operations) in respect of the costs ofremediation of soil and groundwater contamination and similar environmental costs. These costs relate to thefollowing activities: site assessments, soil and groundwater clean-up and remediation, and ongoing monitoring.Due to uncertainties regarding future costs the potential loss in excess of the amount accrued cannot bereasonably determined.
  RWE-DEA AG for most of the costs of remediation and rehabilitation of environmental contamination existingat Condea Vista Company located in the United States on or before 1 March 2001.
  estimable, the amount of additional future costs relating to remediation and rehabilitation may be material toresults of operations in the period in which they are recognized. It is not expected that these environmentalobligations will have a material effect on the financial position of the group.
  environmental, health, safety and process safety laws and regulations increases the overall cost of business,including capital costs to construct, maintain, and upgrade equipment and facilities. These laws and regulationshave required, and are expected to continue to require, the group to make significant expenditures of both acapital and expense nature.


September 2004 Accident Trust
    Workers’ Union and an attorney representing the unions have been in negotiations to find a mechanism to paycompensation to the dependants of people that died or were physically injured in the accident to the extent thatthey had not been previously compensated in terms of existing policies and practices. It was agreed to establishan independent trust, the September 2004 Accident Trust, to expeditiously make ex gratia grants to persons whowere physically injured in the 1 September 2004 explosion at our Secunda West ethylene production facilitiesand to the dependants of persons who died in that accident. The September 2004 Accident Trust was registeredon 29 June 2006. Qualifying victims of the accident have been invited to submit applications for compensation.These grants will be calculated in accordance with the applicable South African legal principles for the harm andloss suffered by them as a result of the accident to the extent that they have not already been compensated.
  social responsibility, the Company has not acknowledged legal liability in creating the trust. As at 30 June 2006it is believed that a loss contingency exists and that it is probable that the future claims will be received from thedependents of the deceased or from those physically injured and to whom ex gratia grants will be made. No accrual has been made as at 30 June 2006 as the amount of the loss cannot be reliably estimated. The futurepayments are dependent on the number of applications submitted to the Trust, the independent findings of eachapplication and the calculation of the grants based on the applicable South African legal principles. It is believedthat the possible loss is unlikely to exceed R20 million.
 Regulation
  throughout the world. In South Africa, we operate coal mines and a number of plants and facilities for thestorage, processing and transportation of raw materials, products and wastes related to coal, oil, chemicals andgas. These facilities and the respective operations are subject to various laws and regulations that may becomemore stringent and may, in some cases, affect our business, operating results, cash flows and financial condition.
 Empowerment of historically disadvantaged South Africans
 The Liquid Fuels Charter
  representatives of the companies in the liquid fuels industry, including Sasol Oil, signed the Liquid Fuels Chartersetting out the principles for the empowerment of historically disadvantaged South Africans in the South Africanpetroleum and liquid fuels industry.
  disadvantaged South Africans hold at least 25% equity ownership in the South African company holding theirliquid fuels assets by the calendar year 2010. It also envisages methods of measuring progress by requiringparticipants in the industry to meet targets set in connection with transformation of ownership. In addition, theLiquid Fuels Charter requires that historically disadvantaged persons be given preferred supplier status, wherepossible, in the procurement of supplies, products, goods and services, as well as access to use and ownership offacilities.
 Sasol and Exel’s BEE transaction
  shareholder. At the time of the merger with Sasol Oil, Exel was a model empowerment enterprise 77.5% ownedand controlled by HDSAs. With the help of Sasol, through the secondment of specialized personnel, the


provision of technical support and training, and other support services, Exel evolved rapidly from a zero base toestablishing 195 retail fuel stations by December 2003. By that time, Exel had won 4% and 7% of thecompetitive South African liquid fuels retail and commercial markets, respectively. Exel recorded an operatingprofit (before interest and tax) of almost R8 million in 1998. Five years later, the company posted an annualoperating profit of more than R100 million. Subsequently Sasol Oil acquired the entire shareholding of Exelwith the empowerment partners obtaining a 2% interest directly in Sasol Oil.
 Sasol and Tshwarisano BEE transaction
    the former proposed joint venture if the Competition Tribunal had approved the proposed merger of our liquidfuels business with Petronas’ South African liquid fuels business. Pursuant to the Competition Act of 2000, theCompetition Tribunal prohibited the merger on 20 February 2006.
   BEE policies
         Employees
  employment equity targets. This requires that advantageous treatment be given to HDSAs in aspects ofemployment such as hiring and promotion. Employment Equity targets are set out and reviewed periodically toensure that they are met. Special training and mentorship programs are in place to create a work environmentthat is suited to the successful nurturing of HDSA staff.
 Procurement
  charters and government policy. BEE procurement affords smaller industry players the opportunity to participatemeaningfully in the sector. As prescribed in the Liquid Fuels Charter, HDSA companies are accorded preferredsupplier status as far as possible.
   Corporate social investment


The Mining Charter
  mineworkers’ unions reached broad agreement on the Mining Charter, which is designed to facilitate theparticipation of HDSAs in the country’s mining industry. The Mining Charter’s stated objectives include the:
         interpretation of and compliance with the Mining Charter (the scorecard), requires mining companies to ensurethat HDSAs hold at least 15% ownership of mining assets or equity in South Africa within five calendar yearsand 26% ownership within ten calendar years from the enactment of the new Mineral and Petroleum ResourcesDevelopment Act (MPRD Act) which came into force on 1 May 2004. The Mining Charter further specifies thatthe mining industry is required to assist HDSAs in securing finance to fund their equity participation up to anamount of R100 billion within the first 5 calendar years after the coming into force of the aforementioned Act.Beyond this R100 billion commitment, the Mining Charter requires that participation of HDSAs should beincreased towards the 26% target on a willing-seller willing-buyer basis at fair market value
  Minister of Minerals and Energy under the MPRD Act with respect to the South African mining industry. Theseregulations came into force on 1 May 2004.
  mineral rights under the MPRD Act have complied with the provisions of the Mining Charter. It is intended thatthe entire scorecard would be taken into account in decision making. Notes attached to the scorecard provideguidance in interpreting the objectives of the Mining Charter.
  BEE strategy through the formation of Igoda Coal, an empowerment venture with Eyesizwe Coal, a black-owned mining company. Igoda Coal will be one of South Africa’s largest empowered coal export companies.Eyesizwe Coal will own 35% of Igoda Coal, while Sasol Mining holds the remaining 65%. Igoda Coal willbecome fully operational as a statutory business entity and take transfer of the relevant mining area from SasolMining once the transfer of the mining rights have been effected. It is expected that the transaction will becomeeffective in 2007.
  that we will further expedite plans to advance the second phase of Sasol Mining’s broad-based BEE ownershipstrategy. This strategy will see Sasol Mining achieve full compliance with the Mining Charter’s 2009 and 2014targets for BEE ownership, respectively, through conversion of its mining rights.


The Restitution of Land Rights Act
  of Land Rights Act 1994. Under this Act, any person who was dispossessed of rights in land in South Africa as aresult of past racially discriminatory laws or practices is granted certain remedies, including, but not limited to:
     could be successful. Once a land claim has been lodged with the Commission on Restitution of Land Rights, therights of any person in respect of such land are restricted in that he may not perform certain actions relating tothe land, including, but not limited to, selling, leasing or developing such land, without the consent of theCommission. The Commission is obligated to notify the land owner of such a claim lodged or any other partywhich might have an interest in a claim. All claims had to have been lodged with the Commission by 31 December 1998. Although this was the final date for filing claims, many claims lodged before the deadlineare still being reviewed and not all parties who are subject to claims have yet been notified. We have not beennotified of any land claim that could have a material adverse effect on our rights to any of our significantproperties.
  the absence of a court order, the power of the Minister for Agriculture and Land Affairs to acquire or expropriateland for restitution purposes is limited to circumstances where an agreement has been reached between theinterested parties. The Act would entitle the Minister to expropriate land in the absence of agreement. Such anexpropriation could be for restitution or other land reform purposes. Compensation payable to the owner of theland would be subject to the provisions of the Expropriation Act 63 of 1975 and section 25(3) of theConstitution which provides, in general, that compensation must be just and equitable.
 Broad-based Black Economic Empowerment Act
              President on BEE. In terms of the Act, the Minister of Trade and Industry may issue codes of practice on BEE,which may include:


pursuant to the Act in determining qualification criteria for the issuing of licenses and other authorizationspursuant to any law and in developing and implementing a preferential procurement policy.
  Codes of good practice for broad-based black economic empowerment (the Codes)
  2004 pursuant to the Act mentioned above. These draft codes are in the process of being amended so as toprovide further clarity as to the organization of the Codes.
       This phase of the Codes provides further clarity on Codes 000, 100 and 200 referred to above and set out inCodes 300 to 1000 outlining measurement of employment equity, skills development, preferential procurement,enterprise development, the residual element, any sector codes and qualifying small enterprises.
  contained in the Codes when implementing broad-based BEE initiatives. In interactions with public entities andorgans of state, it is considered essential that the private sector applies these principles to ensure full recognitionfor their efforts. Furthermore, it is considered desirable that the private sector also apply these principles in theirinteractions with one another.
  objectives, with the Act and the Codes. This will apply specifically to the Liquid Fuels Charter as contained inthe Petroleum Products Amendment Act and the Mining Charter as contained in the Mineral and PetroleumResources Development Act which shall remain in force unless amended, substituted or repealed. Alignment ofall such legislation, over time, will reduce any residual uncertainty.
 Regulation of mining activities in South Africa
 The Minerals Act
  held, either privately or by the government of South Africa. Ownership of private mineral rights was heldthrough title deeds and constitutes real rights in land, which are enforceable against any third party. Prospectingand mining were regulated by the Minerals Act and South African common law. The Minerals Act regulated theprospecting for and the optimal exploitation, processing and utilization of minerals, in addition to imposingreclamation requirements on prospecting and mining operations. The Act required that anyone undertakingprospecting or mining operations had to compile an environmental management program and to provide for theenvironmental impact of the proposed prospecting or mining activities. This program had to be approved by the


relevant Director of Mineral Development. The Minerals Act has subsequently been repealed by theimplementation of the Mineral and Petroleum Resources Development Act (Act 28 of 2002), which came intoeffect on 1 May 2004.
  authorizations, except for small tracts of land at Secunda, which were owned by the government of South Africaand for which we have obtained the government’s consent to mine in consideration for the payment of a royaltyper ton of coal mined from those properties.
 The Mineral and Petroleum Resources Development Act (MPRD Act)
  the common heritage of all South Africans and therefore belong to all the people of South Africa. The Act veststhe right to prospect and mine, including the right to grant prospecting and mining rights on behalf of the nation,in the state, to be administered by the government of South Africa. Thus, the state is the guardian of all mineralrights and has the right to exercise full and permanent custodianship over mineral resources.
  the repealed Minerals Act. However, it contains transitional arrangements for existing operations. Under thesetransitional provisions, the environmental management programs will continue in force, as the Department ofMinerals and Energy (DME) introduces the more stringent requirements of the MPRD Act.
  provisions of the National Environmental Management Act. The MPRD Act addresses the allocation ofresponsibilities for environmental damage, pollution and degradation and imposes rehabilitation obligations. Itsignificantly extends the scope of liability of directors who may be jointly and severally liable for anyunacceptable negative impact on the environment, advertently or inadvertently caused by the company. It alsoallows the state to take remedial action and claim costs. It maintains the requirement for an environmentalmanagement program for all mining operations, but with more detailed specifications than under the MineralsAct, and prohibits the carrying out of mining activities before the approval of the program. When rehabilitationis required, it is not limited to the land surface. We were in material compliance with the repealed Minerals Act,and we expect to continue to be in compliance with the new legislation.
 Mining rights
   
  
  
  holders of privately-held mineral rights had to apply for a prospecting or mining right in their own names toreplace their existing mineral rights by 30 April 2005. Under categories (b) and (c), any prospecting permit ormining authorization granted under the previous legislation would continue to be valid for a maximum period oftwo and five calendar years from enactment, respectively. After the lapse of the one-year period referred to incategory (a) and the respective periods in categories (b) and (c), the mineral rights will cease to exist. Withinthese periods, the holders of mineral rights and prospecting permits or mining authorizations, in order tocontinue with their mining or prospecting operations, must apply for a new prospecting right or mining right inrespect of category (a) and for conversion to new prospecting or mining rights in respect of categories (b) and (c).


could be renewed once, upon application, for a period not exceeding three calendar years. Mining rights will bevalid for a maximum period of thirty calendar years, and could be renewed, upon application, for furtherperiods, each not exceeding thirty calendar years. Provision is made for the grant of retention permits, whichwould have a maximum term of three calendar years and could be renewed once, upon application for a furthertwo calendar years.
  when considering these applications. These factors include the applicant’s access to financial resources andappropriate technical ability to conduct the proposed prospecting or mining operation, the environmental impactof the operation and, in the case of prospecting rights, considerations relating to fair competition. Other factorsinclude considerations relevant to promoting employment and the social and economic welfare of all SouthAfricans and showing compliance with the provisions of the Mining Charter for the empowerment of HDSAs inthe mining industry.
  accompany any application for a mining right. The Mining Titles Registration Amendment Act (Act 24 of 2003)and regulations have been implemented simultaneously with the implementation of the MPRD Act. It providesthe mechanism to give effect to the provisions of the MPRD Act, in particular with regard to the registration ofrights under that Act. Draft regulations under this Bill have also been published for comment.
  operations, which are now being classified as old order rights. We have commenced with the process to apply forconversion of our existing mining and prospecting rights into new order rights and for any new licenses SasolMining may require under the MPRD Act. It is the declared intent of the South African government not todisrupt operations as a result of the introduction of the new legislation. When considering applications for theconversion of existing mineral rights under the MPRD Act, the Minister of Minerals and Energy must take intoaccount, among other factors, the applicant company’s compliance with the Mining Charter. We intend toundertake any appropriate action required to ensure conversion of our existing mineral, prospecting and miningrights under the MPRD Act.
    in the Mineral and Petroleum Resources Royalty Bill. This Bill was first published in March 2003 and has sincebeen revised, with the final Bill being published on 11 October 2006. The Bill provides for a royalty rate of 1%on coal with an ash content of higher than 15% for South African energy consumption and 3% on coal with anash content lower than 15%. The royalty is revenue based, payable bi-annually in arrears to the state, and willtake effect on 1 May 2009. The royalty will be deductible for normal income tax purposes.
 Regulation of pipeline gas activities in South Africa
 The Gas Act
  matters relating to gas transmission, storage, distribution, liquefaction and re-gasification activities. Among itsstated objectives are:


consumers where there is inadequate competition as contemplated in the South African Competition Act.NERSA may impose fines not exceeding R2 million a day, if a licensee fails to comply with its licenseconditions or with any provisions of the Gas Act.
 The National Energy Regulator Act
  President. The National Energy Regulator Act provides for the establishment of a single regulator to regulate thepiped gas, petroleum pipeline and electricity industries and for the functions and composition of the energyregulator.
  appointment of the four full-time regulators, of which one is the designated chief executive officer of NERSA.The Regulator consists of nine members, including four full-time members and five part-time members.Although the full-time members of NERSA are appointed for specific portfolios (gas, electricity and petroleumpipelines), NERSA will operate as a collective and decisions will be made on a collective basis.
  submitted to NERSA within six months from the effective date of the Gas Act (2 May 2006) by any personowning or operating gas facilities or trading in gas. Accordingly, ROMPCO submitted an application for theoperation of a gas transmission facility whilst Sasol Gas submitted license applications for the operation ofdistribution facilities as well as for trading in gas.
  NERSA. In accordance with the rules, the applications were advertised, inviting objections within a 30-dayperiod. Thereafter NERSA has 60 days to consider the objections and responses thereon in order to decide onthe granting of the licenses. As the regulations under the Gas Act have not been promulgated yet, Sasol Gasenvisages that the decision on granting of the licenses should be concluded during the first quarter of the 2007calendar year.
 The Mozambique Gas Pipeline Agreement (Regulatory Agreement)
  Trade and Industry and our company in connection with the introduction of natural gas by pipeline fromMozambique into South Africa is incorporated into the Gas Act through the reference thereto in Section 36 ofthe Act. The Gas Act provides that the terms of the agreement bind the Gas Regulator for a period until 10 yearsafter natural gas is first received from Mozambique (26 March 2004). From the date of the conclusion of theagreement, the terms of the agreement relating to the following matters constitute conditions of the licenses tobe issued to Sasol Gas and ROMPCO under the Gas Act:


1 November 2005. It provides for the imposition of levies by the Gas Regulator on the amount of gas deliveredby importers and producers to inlet flanges of transmission or distribution pipelines. These levies will be used tomeet the general administrative and other costs of the gas regulation activities of NERSA and the functionsperformed by NERSA in this regard. In terms of the Act, NERSA has submitted a budget to the Minister ofMinerals and Energy, which after approval by the Minister in conjunction with the Minister of Finance, will berelayed into a levy charged as a per gigajoule levy on the volumes of gas transported. The regulations publishedunder the Gas Act for comment specifically precludes the recovery by licensees of such levies from theircustomers.
 Regulation of petroleum-related activities in South Africa
 The Petroleum Products Amendment Act
  Act by enacting provisions regulating a range of matters including the licensing of persons involved in themanufacturing, wholesale, holding or development of sites, and retail sale of petroleum products. TheAmendment Act prohibits licensed wholesalers from holding retail licenses, except for training purposes. As theAmendment Act and regulations to be promulgated thereunder regulate business activities conducted by SasolOil, Natref and Sasol Synfuels, they are currently in the process of applying for manufacturing licenses inrespect of our plants, wholesale licenses in respect of our wholesale activities and site licenses for our retailsites. We cannot assure you that these licenses will be granted. It should be noted that, as a person conductingthe aforesaid activities at the commencement of the Amendment Act, Sasol Oil and Sasol Synfuels are entitled tothe issue of such licenses if they are found to be in compliance with all legal requirements in force for theoperation of their respective activities. However, new site developments could be delayed given the requirementsunder the new regulations.
 The Petroleum Pipelines Act
  1 November 2005, among other things, establishes a petroleum pipelines authority as custodian and enforcer ofthe regulatory framework applicable to petroleum pipelines.
           facility without a license issued by the authority. It enables the authority to impose conditions to such licensesrelating, inter alia, to:


licensee is unable to acquire such land by agreement with the owner and the land is reasonably required forfacilities which will enhance South Africa’s petroleum pipelines infrastructure. The Act authorizes the SouthAfrican Minister of Minerals and Energy to promulgate regulations and we cannot assure you that theapplication of the provisions of the Act, or the promulgation of regulations in terms thereof, will not have amaterial adverse effect on our business, operating results, cash flows and financial condition.
   The Petroleum Pipelines Levies Act
  levies on petroleum transported by petroleum pipelines. The proposed levy will be based on the amount ofpetroleum, measured in liters, delivered by importers, refiners and producers to inlet flanges of petroleumpipelines and must be paid by the person holding the title to the petroleum immediately after it has entered theinlet flange.
    and must be approved by the Minister of Minerals and Energy, with the concurrence of the Minister of Finance.Levies lapse five years after their imposition and the Minister must approve a re-imposition of levies.
  Safety, health and environment
  environment (SH&E) performance is driven by the quest for continuous improvement that will help us achieveour vision of being a world class company.
  safety, health and environmental laws and regulations in Southern Africa, Europe, the United States, the Asia-Pacific region, the Middle East and the Indian subcontinent. Our global operations, including marketing andlogistics, are also affected by international environmental conventions.
  minimum requirements and are committed to ensure that we operate under safe working practices, safeguardagainst accidents and avoid harm to people and the environment in all our businesses.
  statutory requirements often require permits or licenses to be obtained for the use of natural resources such aswater, and for the operation of our facilities and the disposal of our waste products. They also prescribeminimum standards for the safety and health of our employees. They impose restrictions on the types andquantities of emissions that can be released into the environment, and also regulate issues of product safety,waste generation, management and ultimate disposal. It is our expectation that these laws and regulations willbecome more stringent in the future.


Safety, health and environment policy and management systems
  from a division-based safety, health and environment management policy to a structure directed on a group basis.We are committed to sustainable development and legal compliance being the minimum requirement for all ouroperations. Matters of safety, health and environment are treated as critical business issues. Planning of safety,health and environmental issues includes the setting of targets, performance measurement, reporting and review.
  and objectives, corporate governance and other audits are carried out regularly. All of our businesses are requiredto track their performance and furnish quarterly reports to their respective operating boards to the GroupExecutive Safety, Health and Environment Committee and to the group Risk and Safety, Health andEnvironment Committee. At the highest level, the Risk and Safety, Health and Environment Committee of theSasol Limited Board considers the major risks and liabilities, progress on our internal indicators of performanceand any major incidents and events of non-compliance. For information regarding our Group Executive Safety,Health and Environment Committee and the Risk and Safety, Health and Environment Committee of the SasolLimited Board, see also “Item 6.C—Board practices”. Similar reports are also required to address significantdivision-specific issues. We use the findings emanating from corporate governance and other audits toimplement improvement measures.
  internationally accredited management systems. On environmental management systems, we are well on the waytowards our group target of achieving ISO (International Standards Organization) 14001 certification for all ourbusinesses. The ISO 14001 standard is an internationally accepted standard for the development andimplementation of environmental management systems. Certification to the standard entails regular audits by anindependent, accredited third party auditor. We have also set OSHAS 18001 and Process Safety Management(based on the US Occupational Safety and Health Administration and other Sasol requirements) as additionalminimum corporate requirements, including a behavioral safety program for all Sasol businesses. These systemsand programs are being implemented and good progress has been made.
 Health and safety
 Safety.
 three fatalities – two underground and one on surface which resulted in the unfortunate deaths of two contractorsand one employee. In the other unfortunate incident a contractor fell from scaffolding during construction atSecunda and died as a result of his injuries.
  November 2004 to undertake a comparative safety review of its selected South African operations againstinternational best practices in the areas of leadership, organization, and operational and process safety. Theresults from this intense focus of safety resulted in an overall improved safety performance with Sasol achievingan all time low recordable case rate of 0.7. DuPont performed a second review during March 2006 to determineprogress with the implementation of actions as a result of the first review recommendations. The review reporthighlighted the fact that while there are still many improvement opportunities, Sasol has made good progress.The results, if measured by injury statistics, are clearly visible. Details of the second DuPont Safety Review areavailable on our website (www.sasol.com).
   Emissions.
 petrochemical products, our operations generate relatively high carbon dioxide emissions. Our coal gasificationoperations are situated in South Africa, which is classified as a developing country in terms of the KyotoProtocol and though we are largely exempt from the emissions reduction targets required under the Protocol we


have implemented a successful project to replace coal as a feedstock with natural gas at our Sasolburg chemicaloperations. Sasol is also committed to reducing greenhouse gas emissions. We support the voluntary EnergyEfficiency Accord championed by the South African Department of Minerals and Energy.
  also are part of an authority-led initiative to monitor ambient air concentrations, in order to identify and addressproactively major risks for community health in a timely manner. In addition, our operations in the United Stateshave reduced reported emissions under the Toxic Release Inventory by over 80% since reporting began in 1987.
  eliminated when natural gas replaced coal as a feedstock at our Sasolburg operations. Significant efforts are alsobeing made to reduce hydrogen sulfide emissions emanating from the Secunda operation. The sulfur recoveryplants are being upgraded to reduce levels of hydrogen sulfide emissions and improved monitoring and controlequipment will also be addressed as part of this long-term project. Sasol also conducted an international auditfocusing on air pollution management at our South African operations. Findings and recommendations madeduring the audit are being incorporated into current improvement and business plans.
 Water.
 operations, in particular in South Africa, Qatar and other arid countries. A series of water treatment and savingprograms and projects were introduced or are currently under way to address relevant challenges in all of ouroperations. We have progressed significantly in the research and development of managing the water-relatedimpacts of our mining activities.
  treatment is currently committed to researching innovative and cost-effective solutions to further reduce ourimpact on the environment.
  Eastern Sub-System Augmentation Project (VRESAP). The Trans-Caledon Tunnel Authority was mandated bythe Minister of Water Affairs and Forestry of South Africa to fund and implement the VRESAP project to meetthe growing demands of Eskom and Sasol in the Mpumalanga region. Construction of the VRESAP pipeline iscurrently in progress and completion is expected in the last quarter of 2007 calendar year.
 Fires, explosions and releases.
 flammable substances, often under high pressure and at high temperatures. Hence, managing the risk of fires,explosions and releases of hazardous substances is essential for us. In the course of our operations, weexperienced a number of fires, explosions and releases of hazardous chemical substances, the most significantbeing an explosion that occurred at Sasol Polymers on 1 September 2004. We have taken steps to reduce thefrequency and severity of these events, and do not expect any other past fires, explosions or releases to have amaterial effect on our results or operations.
  Safety and Health Administration Process Safety Management and US Environmental Protection Agency (US EPA) Risk Management Program regulations. Through the application of these regulations, we implement athorough safety management process designed to minimize the risks of accidents and releases of hazardoussubstances.
  United States has become an important focus. Our Baltimore and Lake Charles plants have since evaluated plantsecurity programs and made changes in procedures and physical security measures. As a member of theAmerican Chemistry Council, Sasol NA has also adopted a Security Code of Management Practice, whichrequires that we conduct a security vulnerability analysis to identify areas in which additional security measuresare necessary, and have a management system in place for other aspects of plant, distribution and cyber security.


Land remediation and rehabilitation.
 legacy and current risks that we have addressed or are currently addressing. We are consolidating our regionalstrategies to form a group-wide strategy to address potential liabilities associated with land remediation andrehabilitation.
  approach for the Mozambique natural gas project, for which we used World Bank guidelines for environmentalimpact assessment studies.
   Waste.
 accordance with relevant legal requirements, and cleaner production techniques are implemented to addressfuture risks. Where we acquire new plants, the attendant risks are identified and the necessary indemnitiessought from the sellers. Where we have not secured such indemnities, we are confident that such risks andattendant liabilities will not have a material adverse effect.
  specifically with regards to tar and oil waste, and ash at our operations in Sasolburg. The ash dump presently hasa negative growth rate due to ash sales for brick making.
  will be implemented by the Department of Water Affairs and Forestry over the next two to three years. Thefinancial impact to Sasol has yet to be quantified, but could be substantial. Waste and waste water effluentminimization projects are receiving specific attention.
 Asbestos.
 operations. We have implemented a policy to ensure that new sources of asbestos are not procured in theconstruction of new facilities worldwide. Asbestos is removed and disposed of under strict regulatoryrequirements as plant modifications are made or as necessary for maintenance.
 South Africa
 Environmental regulation
  in South Africa. Section 24 of the Constitution enshrines the right of all citizens to an environment that is notharmful to their health and well-being and provides individuals with a right to the protection of the environment.It further provides that these rights can be enforced through reasonable legislative and other measures to preventpollution and degradation, to promote conservation and to secure an ecologically sustainable development.Further constitutional provisions provide relevant rights of enforcement, including class actions. A number oflaws and regulations address specific issues relating to the protection of the environment. The following includesan analysis of some of these laws, which may be relevant to our operations.
 National Environmental Management Act.
 cooperative environmental governance and coordination of the environmental functions of the government. TheAct regulates environmental authorization requirements compliance and provides for enforcement measuresincluding provision for fines up to R5 million. The Act principally imposes a duty of care on persons who haveor may pollute or degrade the environment and other responsible parties to take reasonable measures to preventand remediate environmental damage, protects workers refusing to undertake environmentally hazardous work


and provides for control over emergency incidents. It promotes access to environmental information, protectswhistleblowers and allows for private prosecution and class actions. The Act was recently amended to includeprovisions and requirements for environmental authorizations and impact assessments. Provisions in this regardunder the Environment Conservation Act were repealed. Section 24G was also added to the Act, providing forretrospective applications in respect of activities undertaken in contravention of the law. Consideration ofapplications is subject to payment of a fine, up to R1 million.
 National Environmental Management: Biodiversity Act.
  National Environmental Management: Protected Areas Act.
 conservation areas. Of particular significance is that it provides for the expropriation of private land, includingservitudes, in the interests of conservation. We have not been notified of any action that could have a materialadverse effect on our rights to any of our significant properties.
 Mineral and Petroleum Resources Development Act.
 management of impacts associated with mining activities. An environmental management program (EMP) mustbe compiled, approved by the Department of Minerals and Energy, and regularly reviewed. The EMP is requiredto cover potential environmental as well as socio-economic impacts. The Act further requires the making offinancial provision for the rehabilitation or management of negative environmental impacts.
 Water protection
  resource management and the protection of the quality of water resources. The Act establishes watermanagement procedures and protects water resources through the licensing of various uses of water. It alsoincludes provisions for pollution prevention, remediation requirements and emergency incidents. TheDepartment of Water Affairs and Forestry is currently implementing a Waste Discharge Charge System, whichmay have a significant impact on operational costs.
  volumes of water. South Africa is generally an arid country and prolonged periods of drought or significantchanges to current water laws could increase the cost of our water supplies or otherwise impact our operations.In this regard, the Department of Water Affairs and Forestry is implementing a Pricing Strategy aimed atallocating the appropriate price for the use of water, which may have a significant impact on operational costs.Further initiatives in this regard include the National Water Resource Strategy and the National Water ResourceAllocation Strategy, aiming to ensure the equitable distribution of water.
 Air protection
  Department of Environmental Affairs and Tourism to set ambient air quality and emission standards, declarePriority Areas for the purposes of implementation of Air Quality Management Plans, and prepare for the reviewof atmospheric emission licenses. It is expected that this Act will impose stricter standards on air qualitymanagement in South Africa, through the adoption of internationally accepted ambient and emission standardsand that this will result in significant capital and operational costs. The Department of Environmental Affairs andTourism recently declared the Vaal Triangle as a Priority Area.
  emissions. South Africa is considered a developing country in terms of the Kyoto Protocol and, accordingly, it islargely exempt from the emissions reductions required. We are taking measures to reduce our emissions,amongst which has been the use of natural gas from Mozambique as of 2004 in lieu of coal, which is reducingsulfur dioxide emissions and hydrogen sulfide odors from gasification operations in the Sasolburg region. Wealso monitor air emissions at our plants to measure ambient air quality. The Department is also finalizingambient air quality standards. Compliance with these standards will require significant capital expenditure.


Waste and hazardous substances
 Environment Conservation Act.
 the establishment, operation and closure of any waste disposal site. The Department of Environmental Affairsand Tourism is currently finalizing a National Waste Management Implementation Programme, to be supportedby the Waste Management Bill, still to be drafted. The Bill is expected to cover solid waste management andincorporate the principles of the Basel Convention on the trans-boundary movement of waste.
 Hazardous Substances Act.
 substances that may cause injury, ill-health or death to human beings by reason of their toxic, corrosive, irritant,strongly sensitizing or flammable nature.
 Other environmental legislation
  substances. The Act provides specifications for road tankers, labeling, duties of responsible persons,compatibility of multi-loads, driver training and hazardous substance documentation. The National RailwaySafety Regulator Act provides for similar regulation in respect of rail transport.
  exportation and the use of explosives and imposes an authorization requirement for the manufacture and storage,as well as for the import, export and sale of explosives.
   Health and safety regulation
 Occupational Health and Safety Act.
 employment activity and use of machinery in South Africa, excluding mining activities. The Act imposes variousobligations on employers and others to maintain a safe workplace and minimize the exposure of employees andthe public to workplace hazards and establish penalties and a system of administrative fines for non-compliance.
 Mine Health and Safety Act.
 health and safety of persons at mines by requiring that employers and others ensure that their operating and non-operating mines provide a safe and healthy working environment, determining penalties and a system ofadministrative fines for non-compliance and giving the Minister of Minerals and Energy the right to restrict orstop work at any mine and require an employer to take steps to minimize health and safety risks at any mine.
 Compensation for Occupational Injuries and Diseases Act.
 compensation for disablement caused by occupational injuries or diseases sustained or contracted by employeesin the course of their employment, or for death resulting from such injuries or diseases. The Act is administeredby the Minister of Labor, through a Director-General who manages a compensation fund to which employerscontribute, directly or indirectly. Where indirect contributions are made, these contributions are made to a mutualassociation, which acts as the insurer in respect of claims against the employers. All employers, with theexception of those in national, provincial and local government, are required either to register under the Act or tobe fully insured against related liabilities.
 Occupational Diseases in Mines and Works Act.
 of certain diseases contracted by persons employed in mines or at locations where activities ancillary to miningare conducted. Any mine (including the Sasol Mining operations) at which risk work takes place is deemed to bea controlled mine in respect of the employees for whom the employer is required to make payments to the fundfor occupational diseases, in order to meet relevant claims. Persons who are employed in controlled mines arerequired to have a certificate of fitness, which must be renewed from time to time.


Germany
  chemical feedstock, products and wastes. These operations are subject to numerous laws and ordinances relatingto safety, health and the protection of the environment.
 General environmental care
  general environmental care. In terms of the Act on the Assessment of Environmental Impacts, the environmentimpact assessment (EIA) is an instrument of preventative environmental care that is legally binding. This hasbeen introduced in existing public procedures for the licensing of, or considerable amendment to, certainprojects of relevance to the environment, including chemical facilities. The EIA is based on the cooperationbetween the environmental authorities and the parties intending to carry out the project.
   Planning Act and other specific and planning law designed to ensure environmental soundness, as well as by theEnvironmental Liability Act, which provides for liability in the case of environmental risks. Where human life orhealth is disturbed and where emissions have entered the soil, water or the air, the owner of a facility is liable,even if he or she is not at fault and irrespective of whether the damage was caused as a result of a hazardousincident or during normal operations. Damage resulting from force majeure is excluded from liability. The rightto the restoration of the previous state also extends to nature and the landscape. Installations that pose aparticular risk to the environment must have provisions for sufficient cover, an obligation which may be met byarranging liability insurance.
  polluting activities, including water, soil and air pollution, environmentally damaging waste disposal and noise.It also addresses licensing of the operation of installations and the handling of hazardous substances and goodsand particularly serious environmental offences.
 Specific environmental protection legislation
 Emission control.
 noise pollution is the Federal Emission Control Act. This Act and the ordinances promulgated under it providethe framework for environmental protection and the technical safety of installations. It provides for licensing forinstallations that are particularly susceptible to causing harmful environmental impacts, including chemicalfacilities or mineral oil refineries.
 Regulation of hazardous substances.
 the harmful effects of hazardous substances and preparations are provided in the Chemicals Act, the relatedordinances on the Prohibition of Certain Chemicals and the Hazardous Incidents Ordinance. New substances aresubject, as laid down in European law, to a registration and notification obligation before they can be broughtonto the market. Old substances that have been on the market since 1981 are assessed on the basis of relevantEuropean regulation. Hazardous substances and preparations must be classified, labeled and packed in line withtheir hazardous properties, their manufacture, marketing and use may be prohibited or limited.
  well as by legislation on animal feedstuffs and human foodstuffs and by substance-related provisions in otherareas of care of the environment. This also includes the provisions concerning the environmental impacts ofgenetic technology under the Genetic Technology Act.


Avoidance, recovery and disposal of waste.
 regulates the avoidance, recovery and disposal of waste. The aim of the Act is to promote an economy based onclosed substance cycles, thus conserving resources, and to guarantee the environmentally sound disposal ofwaste. Wherever waste cannot be avoided, recovered or used to produce energy, it must be removed from thecycle and, as a matter of principle, be disposed of within Germany in a way that is not detrimental to thecommon good. Under law, waste is defined as a tangible item, which falls under one of the legally determinedcategories of waste, and which the owner is getting rid of, desires to get rid of or must get rid of.
  of the Act and creates the basis for the establishment of a solidarity fund to finance the return of waste exportedillegally.
 Water protection.
 requires everyone to exercise adequate care when carrying out measures which may have an impact on a waterbody so that water pollution or any other negative effect on water is prevented. Surface waters and groundwaterare, as public utilities, subject to a public management and utilization code, which leaves the allocation of users’rights at official discretion.
  waste water charge linked to the toxicity of the discharged waste water. Water legislation promulgated by theFederal States goes beyond merely the enforcement of the framework of federal law to determine administrativeprocedures and regulate issues of private water law.
  including the Chemicals Act, the Fertilizers Act and the Waste Avoidance and Waste Management Act. They alsocomprise provisions through which water is indirectly protected via the soil and the air.
 Soil protection.
 promoted by a range of environmental provisions, primarily the Federal Soil Protection Act. Soil protectionmeasures, preventative or remedial, aim at avoiding or reducing substance inputs into the soil, or removingalready existing soil damage, and at addressing the extensive land consumption caused by soil sealing.
 Health and safety
  the employer under a duty to assess hazards at the workplace, to take appropriate preventive measures, and toinstruct employees about measures used. The employer must take precautions for especially hazardous areas andsituations and provide preventive occupational healthcare. This Act is complemented by the Safety at Work Act,which places employers under a duty to appoint appropriately qualified officers to support them in occupationalhealth and safety matters, including ergonomic workplace design. Also, the Mining Act contains stipulationsregarding the health protection of mine workers and is complemented by a special ordinance treating this topic.
 Italy
  products and wastes. These operations are subject to numerous laws and ordinances relating to safety, health andthe protection of the environment.
 General environmental care
  the most important environmental matters, including authorizations, emissions, water management, wastes andremediation and environmental damages. The effectiveness of the authorization chapter has been postponed tothe beginning of the 2007 calendar year, and the environmental damage section will come in force in the 2008calendar year. Nonetheless, the company is liable for damages caused to the environment under general andspecial rules.


obtain an integrated authorization for all environmental impact. This directive has already been implemented inItaly but has not yet taken effect. Sasol Italy is preparing the documentation required to be compliant with thedirective.
 Specific environmental protection legislation
 Emission control.
  Regulation of hazardous substances.
 relevant to classification, packaging and labeling of dangerous substances. Legislative Decree 65/2003implemented the EU Directives relevant to classification, packaging and labeling or dangerous preparations.New substances are subject, as laid down in European law, to a registration and notification process before theycan be brought onto the market. Old substances that have been on the market since 1981 are assessed on thebasis of relevant European regulation. Hazardous substances and preparations must be classified, labeled andpacked in line with their hazardous properties; their manufacture, marketing and use may be prohibited orlimited.
 Avoidance, recovery and disposal of waste.
  Water protection.
 limits, in order to protect surface and underground water. Surface water and groundwater are, as public utilities,subject to a public management and utilization regulation which leaves the allocation of users’ rights at officialdiscretion.
 Soil protection.
 promoted by Legislative Decree 152/06, which essentially follows the Ministerial decree 471/1999 with somesimplification as far as documentation is concerned. Soil protection measures, preventative or remedial, aim atavoiding or reducing substance inputs into the soil, or removing already existing soil damage. The Legislativedecree sets forth both the acceptable limits and the rules for monitoring communication and reclamation.
 Health and safety
  of employees. It places the employer under a duty to assess hazards at the workplace, to take appropriatepreventive and protective measures, and to instruct employees about risks and relevant measures. The employermust take precautions for especially hazardous areas and situations and provide preventive occupationalhealthcare.
 United States
 Environmental compliance
  the discharge of materials into the environment or that otherwise relate to the protection of human health and theenvironment. As with the chemical industry, generally, compliance with existing and anticipated environmental,health, safety, and process safety laws and regulations increases the overall cost of business, including capitalcosts to construct, maintain, and upgrade equipment and facilities. These laws and regulations have required, andare expected to continue to require, Sasol NA and Merisol to make significant expenditures of both a capital andexpense nature. Environmental compliance expenditures for our interest in Merisol and Sasol NA’smanufacturing sites for the next 5 years are estimated to range from US$9 million to US$13 million per year.


we renamed Sasol Chemie, we received indemnities from the seller, RWE-DEA AG, for most of the costs ofoperational compliance with respect to conditions existing on or before 1 March 2001. These indemnitiesexpired on 1 March 2006.
  state and federal air emission laws and regulations. These allegations assert violations of air-based reporting andrecord-keeping requirements, as well as minor exceedance of permitted air emissions. Sasol NA settled theLDEQ air enforcement action in 2006 for a penalty of US$ 50,000 and performance of a BeneficialEnvironmental Project valued in the settlement at US$ 165,000.
  from the US EPA in 2006. The Baltimore Plant also received notices of violations in 2006 from US EPA withrespect to compliance with spill control and countermeasures and hazardous waste regulations, but no penaltieswere assessed.
 Remedial action
 Active and former manufacturing sites.
 groundwater contamination at the Lake Charles chemical complex (LCCC) and Baltimore plant sites resultingfrom historical operations under orders issued by LDEQ and the Maryland Department of the Environment(MDE). The Vinyl Chloride Monomer (VCM) Plant which was sold to Georgia Gulf in 1999 is also subject toUS Resource Conservation and Recovery Act (RCRA) corrective action requirements. The Baltimore Plant ismonitoring the natural attenuation of hydrocarbon contaminants in the groundwater and regularly reporting toMDE and is not being actively remediated. The current costs of monitoring the Baltimore Plant site and theVCM Plant site and any foreseeable remediation costs are not expected to be material.
  for the remediation of four manufacturing operations sold in November 1999 and located in Mansfield,Massachusetts, Aberdeen, Mississippi, Jeffersontown, Kentucky, and Oklahoma City, Oklahoma. The Mansfieldsite, which is still owned by Sasol NA, has been extensively investigated and remediated since 1991, and theremediation of groundwater and an area of soil contamination is ongoing. The Aberdeen plant site has also beeninvestigated under several orders issued by state authorities, and several areas of contamination have beenremediated. Property to the west of the Aberdeen plant was purchased in 2002 and part of the plume migratingoff-site was delineated and contained on-site during 2003. Further investigations of part of the Aberdeen site arestill being performed and the need for further remediation is currently being investigated.
  contamination from historical operations at its active and sold sites are being indemnified by RWE-DEA AG,and will continue to be indemnified until at least 1 March 2023 in respect of Lake Charles and Baltimore, and inperpetuity in respect of the Mansfield, Aberdeen, Jeffersontown, and Oklahoma City sites. In addition toindemnities from RWE-DEA AG, Sasol NA also has indemnities from some of its predecessors— BritishPetroleum for Mansfield and Reichhold Chemical for Jeffersontown—for contamination resulting from thosecompanies’ operations at the sites. Sasol NA does not expect costs to address contamination at these sites to havea material effect on operations or results.
 Calcasieu Estuary CERCLA Site.
 received letters from USEPA making demand under Section 107 of the Comprehensive Environmental Response,Compensation, and Liability Act (CERCLA) for past costs and future remedial investigation, remediation, andrestoration costs associated with the Calcasieu Estuary. The Calcasieu Estuary, which includes the CalcasieuRiver and several major tributaries in the vicinity of Lake Charles, Louisiana, has received releases anddischarges from Parish industry since the 1930s. Bayou Verdine has historically received releases and dischargesfrom the Conoco Lake Charles Refinery beginning in the 1940s and from the LCCC beginning in the 1960s. The“Bayou Verdine Area of Concern” is one of the areas of concern of the Calcasieu Estuary CERCLA Site.


Bayou Verdine under the oversight of state and federal authorities. In 2001, ConocoPhillips and Sasol NAcompleted ecological and human health risk assessments of Bayou Verdine and in 2002 performed anEngineering Evaluation and Cost Analysis (EE/CA) of removal actions for Bayou Verdine under anAdministrative Order on Consent (AOC) with USEPA.
  relatively small area of elevated EDC concentrations located near the confluence of Sasol NA’s West Ditch andBayou Verdine. The West Ditch Project was completed in July 2003 at a cost to Sasol NA of about US$ 2 million. To date, no third party claims have been filed in connection with the West Ditch Project.
  ConocoPhillips and Sasol NA intend to perform the Main Channel Removal Action under a Consent Decreewhich will be negotiated in 2005 and 2006. Under a Consent Decree, ConocoPhillips and Sasol NA hope toresolve all of the government’s CERCLA claims against the companies in connection with the Calcasieu Estuaryand will receive protection against CERCLA contribution claims by other “Potentially Responsible Parties”against the companies. An agreement in principle has been reached with US EPA and the resource trusteesconcerning the scope of Main Channel and natural resource restoration projects and the amount of past agencyresponse costs to be reimbursed by Sasol NA and ConocoPhillips. Sasol NA will pay 10% of these costs.
  is about US$ 1.7 million. Under the agreement for the acquisition of the Condea group (now renamed SasolChemie), 80% of Sasol NA’s Estuary-related remediation costs are expected to be indemnified by RWE-DEA AG, and will continue to be indemnified until 1 March 2023.
 Mozambique
  and transportation of natural gas. The Central Processing Facility has been in operation since 18 February 2004.These operations are subject to numerous Mozambican laws and regulations as well as World Bank requirementsand best practice standards.
 Environmental, health and safety regulations.
 (MICOA) was created in 1994 to coordinate environmental affairs in Mozambique. In 1995, the Ministry drewup a National Environmental Management Program, which is a policy document outlining the priorities forenvironmental management and sustainable development in Mozambique. This program contains a NationalEnvironmental Policy, a proposal for Framework Environmental Legislation and Environmental Legislation andan Environmental Strategy.
  provide a legal framework for the use and correct management of the environment and its components and toassure sustainable development in Mozambique. The Law is applicable to all public or private activities that maydirectly or indirectly influence the environment. It requires licensing of activities that are liable to causesignificant environmental impacts. The granting of an environmental license is subject to the preparation andapproval of an appropriate level of environmental impact study and management plan. Over the last year, newenvironmental legislation has been enacted, namely the Regulation on Environmental Quality and EffluentEmissions Standards (June 2004) and the Regulation on Environmental Impact Assessment Process (December2004), the latter revoking the 1998 regulation. In terms of environmental protection and safety, the PetroleumAct No. 3/2001 requires that holders of exploration and production rights conduct petroleum operations incompliance with environmental and other applicable legislation.


are governed by best practice environmental management approaches and periodic reports on environmentalperformance are submitted to MICOA. The seismic lines are aligned so that they avoid dwellings and noresettlement, temporary or permanent, is foreseen. Compensation due to affected community members as aresult of these activities is being undertaken under the Resettlement and Compensation Procedures for theNatural Gas Project, approved by the Mozambican Ministerial Project Liaison Committee in early 2003.
  Indian Ocean. Seismic activities are due to start on these blocks following a detailed Environmental ImpactAssessment (EIA) process. To ensure an open and transparent process, Sasol will promote wide and activepublic consultation and engagement with all identified stakeholders. This will be governed by the new EIARegulations, as will the planned expansion aimed at the de-bottle necking of the gas processing and transportingfacilities of the Natural Gas Project.
 Mineral Rights.
 Activities. The National Directorate of Coal and Hydrocarbons administers and regulates petroleum operationson behalf of the government. The Mozambique government encourages the exploration and development of thecountry’s hydrocarbon potential within a certain defined project framework.
  subsoil of the territorial waters and continental shelf are the property of the state, which determines theconditions for their development and use.
  which is appointed as the custodian of rights for the use, benefit, administration and disposal of hydrocarbonsand may grant licenses to international investors to conduct exploration and production.
 Other countries
  international laws, regulations and treaties. In Malaysia, China and other countries, we operate plants andfacilities for the storage, processing and transportation of chemical substances, including feedstock, products andwastes. In Qatar, the United Arab Emirates, Nigeria, Gabon, Equatorial Guinea and other countries, we areinvolved, or are in the process of being involved, in exploration, extraction, processing/or storage andtransportation activities in connection with feedstock, products and waste relating to natural gas, petroleum andchemical substances. Our operations in the respective jurisdictions are subject to numerous laws and regulationsrelating to exploration and mining rights and the protection of safety, health and the environment.


4.C
 Organizational Structure
  Investment Company (Pty) Limited, a company incorporated in the Republic of South Africa, holds our interestsin companies incorporated outside South Africa. The following table presents each of Sasol’s significantsubsidiaries (including direct and indirect holdings), the nature of business, percentage of shares of eachsubsidiary owned and the country of incorporation at 30 June 2006.
 Percentage
 Country of
 Name
 Nature of business
 ownership
 incorporation
                                explosives, gases, petrochemicals and,fertilizers
          1
     2
     in Mozambique and Secunda in South Africa for the transportation of natural gas produced in Mozambique to markets in Mozambique and South Africa
                                 of pipeline gas and the maintenance of pipelines used to transport gas
    1


Percentage
 Country of
 Name
 Nature of business
 ownership
 incorporation
                                                   3
  of oil products, petrochemicals and chemical products and derivatives
    3
   1.
 25% interest in Sasol Oil (Pty) Limited was sold to Tshwarisano LFB Investment (Pty) Limited effective 1 July 2006.
 2.
 CMG is finalizing its financing arrangements for the exercise of its option to acquire a 25% interest in ROMPCO.
 3.
 Subsidiaries which form part of our discontinued operations.
 4.D
 Property, plants and equipment
 Plants and facilities
  of oil, chemicals and gas related raw materials, products and wastes. For a detailed discussion regarding the use,capacity and products of these facilities provided for each business see “Item 4.B – Business overview”.
 Coal mining facilities
  mines (Bosjesspruit, Brandspruit, Middelbult, Syferfontein and Twistdraai export mine) and the Sigma MiningComplex, consisting of underground mines (Mohlolo and Mooikraal) near Sasolburg.
   Our Secunda facilities
  Synfuels operations and a range of our chemical industries operations, including explosives, fertilizers,monomers and polymers, solvents, alpha olefins and tar. The approximate size of this property is 82.5 squarekilometers (km  ).
 2


Our Sasolburg facilities
  ammonia, explosives, mining chemicals, phenols, solvents, polymers, fertilizers, tars and waxes operations. Theapproximate total size of these properties is 51.4 km
 2
   2
  Our Mozambican facilities
  (a subsidiary of Sasol Petroleum International). These facilities, located some 700 km north of the Mozambicancapital, Maputo, on a site of approximately 400,000 m
 2
  processed gas is supplied to the South African gas market, utilizing a newly installed high pressure pipeline,some 865 km in length owned by ROMPCO.
 Our facilities in Germany
   2
  2
   2
  2
    2
  2
 Our facilities in Italy
   2
  2
   2
  2
  Our facilities in the United States
  The most significant of these facilities are located at Lake Charles, Louisiana (site size approximately 3 millionm
 2
  2
  2
   2
    and operations, see “Item 4.A – History and development of the company – Capital expenditure” for adescription of our material plans to construct, expand and enhance our facilities.


Mining properties and operations
 Mine systems and their production capacity
   Nominated capacity and production
 Nominated
 2006
 capacity
 Actual
 Mine
 per year
 1
 production
 (Mt)
 (Mt)
                   1.
 The 2006 nominated capacity of the mines is the expected maximum production of that mine during normal operational hours.
  the Sigma Mine was first established in 1950. In the Secunda area, production at the first two mines, Brandspruitand Bosjesspruit commenced in 1977. Twistdraai and Middelbult followed during the early 1980s, whileSyferfontein started production in 1992. In 1996, the Twistdraai Export Mine was commissioned. The mineboundaries are adjusted into new reserve areas with brownfield extensions, facilitated by satellite shaft systems,based on ongoing studies and new planning. All the production equipment is either replaced or overhauled on aregular basis according to a managed maintenance system.
 Processing operations
 Export business – Secunda operations.
 growth strategy. To date, a total of 32.5 Mt of coal has been exported, beneficiated from 86.1 Mt at theTwistdraai Export Plant from 1996 through 2006. Coal is fed to the beneficiation plant from the existingTwistdraai Export Mine. The beneficiation plant produces primary export product with an ash content ofapproximately 10.3% as well as a secondary product for the Sasol Synfuels market.
  processed. The plant consists of a primary and secondary stage. The primary stage comprises three modules withtwo feed streams each. The coal is fed at a rate of 550 tons per hour into two 800 millimeter (mm) diameterdense medium cyclones per feed stream. There are a total of 18 cyclones in the primary stage. The secondarystage consists of two modules with two 1,000 mm diameter dense medium cyclones.
  from the Twistdraai export mine. The export product is loaded onto trains by means of a rapid load-out system,and then transported to the Richards Bay Coal Terminal in KwaZulu-Natal.
  this terminal, which relates to an existing entitlement of 3.6 Mt per year. It is expected that the planned RichardsBay Coal Terminal expansion project will increase the total throughput capacity to 82 Mt.
 Sasol Coal Supply – Secunda operations.


approximately 1.5 times per week. In addition, there is a reserve stockpile capacity of more than 2.2 Mt. Theobjectives of this facility are:
      Coal exploration techniques
  risks associated with the exploitation of the coal deposits. These techniques are applied in a mutually supportiveway to achieve an optimal geological model of the relevant coal seams, targeted for production purposes. TheHighveld Basin is considered to be structurally complex when compared to the other coalfields in South Africawhere mining activities are taking place. As a result, Sasol Mining bases its geological modeling on sufficientand varied geological information. This approach is utilized in order to achieve a high level of support to theproduction environment.
 Core recovery exploration drilling.
 exploration areas, especially during reconnaissance phases. In and around operational mines, the average verticalborehole density varies from 1:10 to 1:15 (boreholes per hectare), while in medium term mining areas, theaverage borehole density is in the order of 1:25. Usually, the drilling depth ranges from 200m to 250m. Depthsof the boreholes drilled vary, depending on the depth to the Pre-Karoo basement, which vary from 160m to380m. The major application of this technique is to locate the coal horizons, to determine coal quality and togather structural information about dolerite dykes and sills, and the associated de-volatilization. This informationis used to compile geological models and forms the basis of geological interpretation.
 Directional drilling (surface to in-seam).
 applied for several years. A circular area with a radius of approximately 2km of coal deposit can be covered bythis method, from one drill site. The main objective of this approach is to locate dolerite dykes and steep dippingdolerite sills, as well as faults with displacements larger than the coal seam thickness.
 Horizontal drilling.
 (minimum three months) exploration coverage per mining section. No core is usually recovered, although corerecovery is possible, if required. The main objective is to locate dolerite dykes and steep dipping sillsintersecting the coal mining horizon, by drilling horizontal holes in the coal seam from a mined out area. A drilling reach of up to 1km is possible, although the average length is usually 800m.
 Aeromagnetic surveys.
  Airborne electro-magnetic surveys.
 been necessary to survey certain exploration areas electro-magnetically to pinpoint these structures to optimizemine deployment.
 Geophysical wireline surveys of directional boreholes.
 completed directional drilled boreholes. This resulted in the availability of detailed information leading toincreased confidence of the surface directional drilling results. This technique has also been applied inunderground directional drilling with excellent results.


Secunda operations
    is undertaken to update and refine the geological models, which allows accurate forecasting of geologicalconditions and coal qualities, for the effective planning and utilization of the coal reserves.
 Computation and storage of geological information
  several in-house methods is conducted regularly. Data modeling is conducted by manual interpretation andcomputer-derived geological models, using the Minex 5 edition of the SURPAC/MINEX software. Reserves andcomposite qualities are computed using established and recognized geo-statistical techniques.
 General stratigraphy
  probable reserves. The Number 4 Lower Coal Seam is one of six coal horizons occurring in the VryheidFormation of the Karoo Supergroup, a permo-carboniferous aged, primarily sedimentary sequence. The coalseams are numbered from the oldest to the youngest.
 Characteristics of the Number 4 Lower Coal Seam.
      general, thinner coal is found to the south and thicker coal to the west adjacent to the Pre-Karoobasement highs.
         Mining parameters and assumptions used during reserve estimation
 Minimum Mining Height (meters);
  Maximum mining height (meters):
 Primary Safety factor.
 1
 :
   Secondary Safety factor.
 1
 :


Minimum dry ash free volatile matter content:
 indication of devolatilized coal. During estimations, areas with a dry, ash free volatile matter content ofless than 28%, are excluded, and considered to be devolatilized coal areas.
 Geological loss factor:
 to 35% (Block 5 East). The geological loss factor is a discount factor applied to the gross in situ tonnageto take into account as yet unobserved geological features, which may occur. The geological loss factor istherefore a function of the borehole density and known geological complexity of the area, as well as thejudgment of the competent person involved.
 Mine layout losses:
 vary between 11% (Rooipoort) and 28% (Block 5 East). The mine layout loss factor is a discount factorrequired to account for the expected loss of coal reserves, due to actual mining activities, not reachingthe defined boundary of the minable in situ coal reserve block. The mine layout loss factors applied aretherefore a function of the complexity of the depicted actual and anticipated geological structures and theactual historical loss factors experienced.
 Mine method losses:
 reserves vary between 40.4% (Twistdraai) and 50.6% (Syferfontein). The mine method loss factor is thediscount factor required to account for the expected loss of coal reserves, due to actual mining activities,which requires support pillars to be left in situ. The mine method loss factors applied are therefore afunction of the mine method used and planned to be used, as well as the actual historical loss factorsexperienced.
 Contamination factor:
 reserve, vary between 0% (Syferfontein) and 2.7% (Middelbult). The contamination factor refers to theextraneous coal and non-coal material which is unintentionally added to the practical mining horizon, asa result of the mining operations. The contamination factors applied are therefore a function of expectedgeological conditions in the immediate roof and floor of the mining horizon, as well as the actual andhistorical contamination factors experienced.
 Superficial moisture factor:
 coal reserve, vary between 4.5% (Middelbult) and 3.1% (Brandspruit). The superficial moisture refers tothe extraneous moisture added to the extracted coal as a result of the mining operations. The factorsapplied are therefore based mostly on the historical factors experienced.
 1.
 The safety factor is calculated by dividing the strength of the pillar by the stress acting on the pillar. The strength of thepillar is determined by the inherent strength of the coal material, the width of the pillar and the height of the pillar. Thestress on the pillar is the result of the pillar load, which is determined by the depth of mining, the pillar width and thebord width.
 Reserve estimation (remaining reserves at 31 March 2006)
  Secunda Deposit and approximately 1.5 Bt of recoverable reserves. The coal reserve estimations are set out inthe table 1 below. The different reserve areas are depicted on a map on page M–4, as well as whether the reserveareas are allocated or not.


Table 1.
 Coal reserve estimations
 1
 in the Secunda area where Sasol Mining has interim statutory rights (old order
 mining rights), for which applications were submitted to convert to mining rights in terms of the Mineraland Petroleum Resources Development Act, Act 28 of 2002
 Gross in
 Mine
 situ coal
 Geological
 layout
 Extraction
 Recoverable
 Beneficiated
 resource
 2
 discount
 losses
 rate
 reserves
 3
 yield
 Proven/
 Reserve area
 (Mt)
 5
 (Mt)
 5
 (Mt)
 5
 (%)
 (Mt)
 5
 (%)
 probable
                        4
                         6
                                          Total Secunda Area
 3,978
 1,462
 1.
 The coal reserve estimations in this table were compiled under supervision of Mr. Phill Grobler Pr. Nat. Sci(Professional Natural Scientist). The “South African Code for Reporting of Minerals Resources and Minerals reserves,(The SAMREC Code)”dealing with competence and responsibility, paragraph 4.1, state: Documentation detailingexploration results, mineral resources and mineral reserves estimates from which a public report on exploration results,mineral resources and mineral reserves is prepared, must be prepared by or under the direction of, and signed by, acompetent person. Paragraph 4.3 states: A competent person is a person who is a member of the South African Councilfor Natural Scientific Professions. Mr. JD Conradie, on behalf of Gemecs (Pty) Limited reviewed the correctness of themethodology and the assumptions used to obtain coal resource/reserve estimations in tables 1 and 2.
 2.
 The gross in Situ coal resource is an estimate of the coal tonnage, contained in the full coal seam above the minimumthickness cut off and relevant coal quality cut off parameters. No loss factors are applied and seam height does notinclude external dilution or contamination material.
 3.
 The recoverable coal reserve is an estimate of the expected recovery of the mines in these areas and is determined bythe subtraction of losses due to geological and mining factors and the addition of dilutants such as moisture andcontamination.
 4.
 The P% refers to the yield export product from the recoverable coal reserve and the S% refers to secondary productyield, which will be supplied to the Synfuels factory. The balance of this is discard material.
 5.
 Mt refers to 1 million tons. Reference is made of tons, each of which equals 1,000 Kilograms, approximately 2,205 pounds or 1,102 short tons.
 6.
 The Rooipoort area contains some coal which can be beneficiated for the export market. Investigations to prove theviability of beneficiation are underway.


Coal qualities per associated reserve estimation (remaining reserves at 31 March 2006)
  Table 2.
 Coal qualities, on an air dry basis, in respective coal reserve areas, where Sasol Mining has interimstatutory rights (old order mining rights), in the Secunda mining complex, for which applications weresubmitted to convert to mining rights, in terms of the Mineral and Petroleum Resources Development Act,Act 28 of 2002
 Average
 Average
 Heat
 inherent superficial
 value
 moisture moisture
 Steam/
 (air dry
 Sulfur
 Wet/dry
 content
 content
 Assigned/
 metallurgical basis)
 (air
 dry
 Reserve area
 tons
 (%)
 (%)
 unassigned
 coal
 MJ/kg
 basis)
                                                                                         Table 3.
 Coal qualities, on an as received basis, in respective coal reserve areas, where Sasol Mining has interimstatutory rights (old order mining rights), in the Secunda mining complex, to convert to mining rights interms of the Mineral and Petroleum Resources Development Act, Act 28 of 2002
 Average
 Average
 Heat
 inherent superficial
 value (as  Sulfur
 moisture moisture
 Steam/
 received (as
 
 Wet/dry
 content
 content
 Assigned/
 metallurgical basis)
 received
 Reserve area
 tons
 (%)
 (%)
 unassigned
 coal
 MJ/kg
 basis)


Criteria for proven and probable
  in Industry Guide 7, under the US Securities Act of 1933, as amended, which are included in our glossary, weconsider the following criteria to be pertinent to the classification of the reserves.
  the deposit under consideration, where conceptual mine design can be applied, and for which all the legal andenvironmental aspects have been considered. Probable reserves can be estimated with a lower level ofconfidence than a proven coal reserve. Currently this classification results in variable drill spacing depending onthe complexity of the area being considered and is generally less than 500 meters, although in some areas it mayextend to 880 meters. The influence of increased drilling in these areas should not materially change theunderlying geostatistics of the area on the critical parameters such as seam floor, seam thickness, ash andvolatile content.
  which a complete mine design has been applied which includes layouts and schedules resulting in a full financialestimation of the reserve. This classification has been applied to areas in the production stage or for which adetailed feasibility study has been completed.
 Legal rights on coalfields
  of the Mineral and Petroleum Resources Development Act, 2002 (Act 28 of 2002), which came into effect on 1 May 2004. Sasol, therefore, hold these interim statutory rights (old order mining rights), to mine more than98% of the mineral rights previously owned in the Secunda area. Sasol holds four old order mining rights,(previously Section 9 mining authorizations under the repealed Minerals Act), consisting of 157,000 hectares ofcoal rights. In terms of the aforementioned transitional provisions, Sasol must convert these interim rights tomining rights by May 2009. Applications for the conversion of the four old order mining rights have beensubmitted to the Department of Minerals and Energy during April 2006. See also “Item 4.B Business Overview– Regulation of mining activities in South Africa”.
 Sasolburg operations
 Exploration history
  drilling core recovery boreholes over the current Sasolburg area. Some boreholes were initially drilled by theSouth African government. The Sigma mine was established in 1950. Subsequent drilling by the General Miningand Finance Corporation in the 1960s identified more coal reserves in the southwest of the existing Sigma Mineas well as extensions to the south and east. Page M–3 includes a map showing the location of our Sasolburg coaloperations.
  the state laboratory, the Fuels Research Institute. More recently, it was conducted by the laboratories of theSouth African Bureau of Standards in Pretoria (now Coal and Mineral Technology).
 Coal seam geology
  These coal seams are separated by a carbonaceous mudstone to siltstone parting and consist of a number of coalplies and carbonaceous mudstone interburdens. The individual coal plies are numbered from the base upwardsand selected mining horizons are identified on the basis of the coal quality required. The major controlling factoron the coal development is the pre-Karoo basement.


the selected horizon. This has been done very successfully at the old Sigma underground operations and at theMohlolo underground operation, which was closed during the year. The same principles will be applied at theMooikraal Mine. In the visible coal seam a well-defined marker within the seam assists
  in the identification andverification of the pre-determined minable horizon underground, even in areas where the coal seam is displacedby faulting.
    developed carbonaceous mudstone lenses. Inorganic material occurs mainly towards the top of the coal seam,but has been excluded from the selected minable horizon.
  mining on both the major coal seams. The operations at the Mohlolo underground mines, developed from thehighwalls of the Wonderwater strip mine, was closed during 2006.
   Selected mining horizon
  steam process at Sasol Infrachem. In order to define the mining horizon, detailed sampling, with associated coalseam descriptions, are conducted. From this, both a visual and chemical correlation of the plies are made.
 Reserve estimation
   Table 4.
 Coal reserve estimation
 1
 of proven and probable reserves, in areas where Sasol Mining has interim
 statutory rights (old order mining rights) in the Sasolburg mining complex, to be converted to miningrights pursuant to the Mineral and Petroleum Resources Development Act, Act 28 of 2002
 Gross in
 Mine
 Recoverable
 situ coal
 Geological
 layout Extraction
 coal
 Proven/
 Coal
 resource
 2
 discount
 losses
 rate
 reserves
 3&4
 probable
 Reserve area
 seam
 (Mt)
 5
 (Mt)
 5
 (Mt)
 5
 (%)
 (Mt)
 5
 (%)
                  6
        Total Sasolburg area
 210
 73
 1.
 _______
 ________
 Mr. B Fourie compiled the coal reserve estimations in this table, under the supervision of Mr. Phill Grobler Pr.Nat.Sci.,Divisional Manager, Strategic Capacity Management, Sasol Mining. The “South African Code for Reporting ofMinerals Resources and Minerals reserves, (The SAMREC Code)”dealing with competence and responsibility,paragraph 4.1 states: Documentation detailing exploration results, mineral resources and mineral reserves estimatesfrom which a public report on exploration results, mineral resources and mineral reserves is prepared, must be preparedby or under the direction of, and signed by, a competent person. Paragraph 4.3 states: A competent person is a personwho is a member of the South African Council for Natural Scientific Professions (SACNASP).


2.
 The gross in situ coal resource is an estimate of the coal tonnage, contained in the full coal horizon, selected formining, above the minimum thickness cut off and relevant coal quality cut off parameters. No loss factors are appliedand seam height does not include external dilution or contamination material.
 3.
 Recoverable coal reserve refers to the economically minable coal, inclusive of diluting and contaminating material, andallows for losses that may occur when material is mined.
 4.
 At Sasolburg, no coal beneficiation is conducted with 100% of the recoverable coal supplied to the client.
 5.
 Mt refers to 1 million tons. One tons equals 1 000 kilograms, approximately 2 205 pounds or 1 102 short tons.
 6.
 In the southern portion of the Mooikraal reserve area, the coal is overlain by a dolerite sill, which had an effect on thecoal seam which is planned to be mined. The reserves in this area is therefore indicated as probable reserves. Thereserves’ minebility will be proven once mining is attempted in this area.
 Coal qualities per associated reserve estimation (remaining reserves at 31 March 2006)
  Table 5.
 Coal qualities on an Air Dry Basis, per reserve estimation area, in areas where Sasol Mining has interimstatutory rights (old order mining rights), in the Sasolburg mining complex, to be converted to miningrights in terms of the Mineral and Petroleum Resources Development Act, Act 28 of 2002.
 Average
 Average
 Heat
 inherent superficial
 value
 moisture moisture
 Steam/
 (air dry
 Sulfur
 Wet/dry
 content
 content
 Assigned/
 metallurgical basis)
 (air
 dry
 Reserve area
 tons
 (%)
 (%)
 unassigned
 coal
 MJ/kg
 basis)
                         Table 6.
 Coal qualities on an as received basis, per reserve estimation area, in areas where Sasol Mining hasinterim statutory rights (old order mining rights), in the Sasolburg mining complex, to be converted tomining rights pursuant to the Mineral and Petroleum Resources Development Act, Act 28 of 2002.
 Average
 Average
 Heat
 inherent superficial
 value (as  Sulfur
 moisture moisture
 Steam/
 received (as
 
 Wet/dry
 content
 content
 Assigned/
 metallurgical basis)
 received
 Reserve area
 tons
 (%)
 (%)
 unassigned
 coal
 MJ/kg
 basis)


Oil and gas production and exploration operations
   determined assessment of oil reserves was conducted during April 2006. As the license held over thisproperty is a Production Sharing Contract, reserves reported represent the net economic interest volumesattributable to the company, after deduction for royalties, grossed up for income taxes.
  internally determined assessment of gas reserves was conducted during April 2006. Reserves reportedrepresent the net economic interest volumes attributable to the company, after deduction of productiontax. Additionally, the volumes booked are restricted to the take-or-pay quantities defined in the gas salesagreement for the 25-year term. A phased approach to field development has been followed and only theTemane field has currently been developed. Development of the Pande field is planned to begin in 2007.
 Reserve and production disclosure
   Crude Oil and Condensate
 Natural Gas
 Other
 Mozambique
 areas
 Total
 Mozambique
 Total
 Millions of barrels
 Billions of cubic feet
 Proved developed and undeveloped reservesFirst estimate
                                           0.3
 0.2
 0.5
 (6.7)
 (6.7)
  0.1
 –
 0.1
 –
   (0.4)
 (1.4)
 (1.8)
 (55.1)
 (55.1)
  7.3
 8.6
 15.9
 1,306.1
 1,306.1
 Proved developed reservesAt 30 June 2004
             3.1
 3.0
 6.1
 373.5
 373.5


ITEM 4A.
 UNRESOLVED STAFF COMMENTS


ITEM 5.
 OPERATING AND FINANCIAL REVIEW AND PROSPECTS
  30 June 2006, 30 June 2005 and 30 June 2004, including the accompanying notes, that are included in thisannual report on Form 20-F. The following discussion of operating results and the financial review and prospectsas well as our consolidated financial statements have been presented and prepared in accordance with US GAAP.The Segment review included below is based on our segment results which have been prepared and presented inaccordance with IFRS and reconciled to US GAAP, as IFRS information is utilized by the company’s chiefoperating decision maker in allocating resources and making investment decisions. Certain informationcontained in the discussion and analysis set forth below and elsewhere in this annual report includes forward-looking statements that involve risks and uncertainties. See “Item 3.D – Key information – Risk factors” for adiscussion of significant factors that could cause actual results to differ materially from the results described inor implied by the forward-looking statements contained in this annual report.
 5.A
 Operating results
 Company and business overview
  international development of synthetic-fuel ventures based on our proprietary Fischer-Tropsch technology. Wemine coal in South Africa and through Sasol Synfuels, we convert this coal, along with Mozambican natural gas,into fuels and chemical feedstock utilizing our Fischer-Tropsch technology.
  States and Asia. Our chemical portfolios include monomers, polymers, solvents, comonomers, waxes, phenolics,ammonia, fertilizers and commercial explosives.
  our refinery and by Sasol Synfuels through Sasol convenience centres and Exel service stations. We alsowholesale fuels in South Africa and export fuels to sub-Saharan Africa. We produce and sell oil in Gabon.
  fuel and chemical production. We shall start up our first international GTL plant in Qatar in 2007. A secondGTL plant, under construction in Nigeria, is scheduled to be commissioned in 2009. These plants will use theSasol Slurry Phase DistillateTM process.
    leveraging its technology or securing integrated and highly cost-competitive feedstock positions. The SasolOlefins & Surfactants business is only partially integrated upstream into feedstocks and has not adequatelyprovided the integration benefits required. On 1 August 2005, Sasol announced that it was considering thedivestment of its Sasol Olefins & Surfactants business excluding its activities in South Africa subject to fairvalue being obtained. At 30 June 2006, the sales process was sufficiently advanced such that managementbelieve that the business will be sold, as a going concern, within the next financial year. With effect from 30 June 2006, the business has been classified as a disposal group held for sale and reported as discontinuedoperations.
  continuing operations and report these results as discontinued operations on a single line item underdiscontinued operations. The cash flow statement for all periods presented and the 2005 balance sheet includeboth continuing and discontinued operations. On classification as held for sale, the net assets of the businesswere written down by R3.1 billion (before tax) to the estimated fair value less costs to sell.


Continuing operations
          Discontinued operations
  External factors and conditions
  of external factors and conditions. These include conditions in the markets in which we sell our products,including the effect of fluctuations in the currency markets, most notably in the exchange rate between the randand the US dollar, fluctuations in the international price of crude oil, cyclicality in the prices of chemicalproducts, the effect of coal prices on export coal operations and the effects of inflation on our costs. Other factors which may influence our business and operating results include economic, social, political andregulatory conditions and developments in the countries in which we operate our facilities or market ourproducts. See “Item 3.D – Key information – Risk factors”.
 Exchange rate fluctuations
  turnover is denominated in US dollars and some part in euro, derived either from exports from South Africa orfrom our manufacturing and distribution operations outside South Africa. A significant part of our turnover isalso determined by the US dollar (approximately 90%), as petroleum prices in general and the price of mostpetroleum and chemical products are based on global commodity and benchmark prices which are quoted in US dollars. A significant part of our capital expenditure is also US dollar-denominated, as it is directed toinvestments outside South Africa or constitutes materials, engineering and construction costs imported intoSouth Africa.


the US dollar since 2003 to 2005. This appreciation had a negative impact on our operating results over thisperiod. During 2006 we saw a marginal weakening of the rand against the US dollar, with the average exchangerate for 2006 of R6.41 per US dollar compared to R6.21 per US dollar in 2005. This weakening in the rand hada positive impact on our operating results in 2006. Similarly, the strengthening of the euro against the US dollarover the last two years has negatively impacted the profitability of our European operations where our costs areeuro-based and a significant portion of our turnover is US-dollar based.
  accurate reflection of the underlying value of the rand, due to the potential effect of, among other factors,exchange controls. These regulations also affect our ability to borrow funds from non-South African sources foruse in South Africa or to repay these funds from South Africa and, in some cases, our ability to guarantee theobligations of our subsidiaries with regard to these funds. These restrictions have affected the manner in whichwe have financed our acquisitions outside South Africa and the geographic distribution of our debt. See “Item 10 – Additional information”.
  2007, for budgeting and forecasting purposes, we estimate that for every R0.10 weakening or strengthening inthe annual average rand/US dollar exchange rate, our operating profit will increase or decrease by approximatelyR570 million as applicable.
  currency swaps. We use forward exchange contracts to reduce foreign currency exposures arising from importsinto South Africa. Forward exchange contracts which result in exposure of R100 million or more require the pre-approval of our Group Executive Committee. We apply the following principal policies in order to protectourselves against the effects (on our South African operations) of a volatile rand against other major currenciesas well as an anticipated long-term trend of a devaluing rand:
  of the project (also with South African Reserve Bank approval), by way of forward exchange contracts;and


Fluctuations in refining margins and crude oil, natural gas and petroleum products prices
  resulting from fluctuations in international crude oil and petroleum product prices. We are also exposed tochanges in absolute levels of international petroleum product prices through our synfuels operations.Fluctuations in international crude oil prices affect our results mainly through their indirect effect on the BFP formula. A key factor in the BFP is the Mediterranean and Singapore (gasoline) or the Arab Gulf (diesel)spot price. See “Item 4.B – Business overview – Sasol Synfuels”, “Sasol Oil” and “Sasol PetroleumInternational”. Furthermore, prices of petrochemical products and natural gas are also affected by fluctuations incrude oil prices.
  international supply and demand fundamentals and factors over which we have no control. Worldwide supplyconditions and the price levels of crude oil may be significantly influenced by international cartels, whichcontrol the production of a significant proportion of the worldwide supply of crude oil, and by politicaldevelopments, especially in the Middle East.
  and average of the European Brent crude oil price (free on board) in US dollars for the past ten calendar yearsand to 26 September in the 2006 calendar year:
 US dollars per barrel (US$/b)
 Calendar year
 Average
 1
 High
 Low
                                                         Source: Energy Information Administration (US Department of Energy)
 1.
 The average price was calculated as an arithmetic average of the quoted daily spot price.


time may lead us to increase or decrease our production, which could have a material impact on our turnover.Decreases in the price of crude oil and petroleum products can have a material adverse effect on our business,operating results, cash flows and financial condition.
  products we sell may include changes in economic conditions, the price and availability of substitute fuels,changes in product inventory, product specifications and other factors. In recent years, prices for petroleumproducts have fluctuated widely.
  duration as a means of mitigating price and timing risks on crude oil and other energy-related product purchasesand sales. While the use of these derivative instruments provides some protection against short-term volatility incrude oil prices, it does not protect against longer-term trends in crude oil prices.
  deemed necessary to protect the group’s cash flow from fluctuations in crude oil prices by means of appropriatehedging strategies. For 2005, we hedged the equivalent of approximately 30% of Sasol Synfuels’ production(45,000 bpd) by entering into a forward sale agreement. This resulted in a charge to the income statement ofR1,147 million. After revising our hedging strategy, for 2006, we again hedged the equivalent of approximately30% of Sasol Synfuels’ production by entering into a zero cost collar pursuant to which the group was protectedat crude oil prices below US$45.00/b but able to take advantage of higher crude oil prices, only incurring a cashoutflow should average crude oil prices be above US$82.61/b. The crude oil price traded within the range of thiscollar throughout the hedging period and therefore the collar had no cash flow effect.
  and, as a result of our continued requirement to fund our extensive capital investment programme, we have againfor 2007, hedged the crude oil equivalent of approximately 30% of our Sasol Synfuels’ production (45,000 bpd)by means of a zero cost collar. In respect of the hedged portion of production, the group is protected at averagemonthly crude oil prices below US$63.00/b and will incur a cash outflow should average crude oil prices exceedUS$83.60/b during the period of the hedge. As a result of the significant increase in monthly crude oil prices


before 30 June 2006, after entering into the collar for 2007, the market value of the collar resulted in a charge ofR93 million at year end. See “Item 11. – Quantitative and qualitative disclosure about market risk”.
  average crude oil price, our group operating profit will increase by approximately US$45 million (approximatelyR290 million) (excluding Sasol Olefins & Surfactants). Should the average annual crude oil price move outsidethe range of our zero cost collar hedging instrument, the effect of the hedge on operating profit will beapproximately US$17 million (R110 million) for each US$1/b change in the average crude oil price above orbelow the range of the collar.
 Cyclicality in petrochemical products prices
  leads producers to increase production capacity, at which point prices decrease. Most commodity chemicalprices tend, over the longer term, to track the crude oil price. However, over the past years, in which significantincreases in the crude oil price have been experienced, we have been unable to pass all of these increases in rawmaterials costs on to our customers. We saw a 3% and 18% increase in the polymer and ammonia product pricesin 2006 compared to 2005 respectively and a 7% decrease in solvent product prices during 2006.
  operating margins, such peaks have prompted further world wide capital investment which has led to supplyexceeding demand and a resultant reduction in selling prices and operating margins.
  into the primary feed streams of those commodities. In times of high crude oil and related product prices (theprimary feedstock of most commodity chemicals), the profit margin shifts towards the feedstock producer whilein times of high chemical prices and lower feedstock prices, the profit margin shifts towards the downstreamactivities. Our decision to divest Sasol Olefins & Surfactants, as a result of it not having the required degree ofbackward integration into its feed streams evidences this strategy.
  chemical prices as this may, in part, negate the benefits of being backward integrated into its primary feedstreams.
 Divestment of Sasol Olefins & Surfactants business
  business excluding its comonomers activities in South Africa subject to an acceptable price being obtained.Since August 2005 substantial work was undertaken to prepare the business for sale as a going concernincluding:


business will be sold, as a going concern, within the next financial year. With effect from 30 June 2006, thebusiness has been classified as a disposal group held for sale and reported as discontinued operations.
  continuing operations and report these results as a single line item. In the 2006 balance sheet the assets andliabilities of Sasol Olefins & Surfactants have been classified as held for sale. The cash flow statement for allperiods and the 2005 and 2004 balance sheet includes both continuing and discontinued operations.
    significantly, which represent fundamental changes in energy costs and their related impact on oil derivedfeedstock prices. Irrespective of the negative impact of the increased feedstock costs on the Sasol Olefins &Surfactants business, the strategic rationale for considering the disposal of the business, as expressed in theinitial announcement, remains relevant and valid. It is not backward integrated into the primary feed streams toSasol’s required standards and is also not adequately linked to our proprietary Fischer-Tropsch technology.
  various assumptions, in particular long-term international oil prices and expected chemicals product prices. Theestimated fair value may be affected by the negotiation process with potential bidders.
 Coal prices
  predominantly in Europe and 2.1 Mt sold to the South African market). External sales to these marketsrepresented approximately 28% of the total turnover generated by Sasol Mining during 2006.
  performance. Sasol Mining’s policy is to sell partially based on an API index related basis, and partially on fixedprices. Sales at fixed prices are not extended beyond nine months forward. Internal coal sales are made to SasolSynfuels and Infrachem. Coal sales prices into this market are negotiated on a five year contractual basis and aresubject to periodic price adjustments. Transfer price negotiations are at arms length. Sasol Mining entered into athree year contract with Eskom during the 2004 financial year. Eskom uses the coal for the purposes of powergeneration.


Inflation
  South Africa, though currently well managed, at various times in the past has had high inflation and interestrates compared to the United States of America and Europe. Should these conditions recur, this would increaseour South African-based costs. High interest rates could adversely affect our ability to ensure cost-effective debtfinancing in South Africa. Sasol expects the impact of changes in the inflation rates on our internationaloperations to be less significant.
  average increase in the index for the past 10 calendar years and the annual percentage change on a monthly basisin calendar year 2006:
 Calendar year
 Average
                                     Source: Statistics South Africa
 Our operations are subject to various laws and regulations in the countries in which we operate
  regulations which may become more stringent. Our mining, gas and petroleum-related activities in South Africaare subject to, amongst others, the following laws or regulations:


regulations. Our global operations are also impacted by international environmental conventions. See “Item 4. –Business overview” and “Item 3.D – Key information – Risk factors” for the details of the various laws andregulations which may impact on our operating results, cash flows and financial condition.
  ownership and other regulations which have been designed to address the country’s specific transformationissues. These include the Mining Charter, the Liquid Fuels Charter, and the Broad-based Black EconomicEmpowerment Act along with the various Codes of Good Corporate Practice for broad-based Black EconomicEmpowerment, the MPRD Act and the Restitution of Land Rights Act. See “Item 4.B – Business overview”.
  empowerment strategy for compliance with the Mining Charter and the MPRD Act through the formation ofIgoda Coal, a 65:35 BEE venture with Eyesizwe. Igoda Coal will comprise the full value chain of SasolMining’s coal export business – the Twistdraai Colliery and beneficiation plant at Secunda in MpumalangaProvince, the marketing and logistics components of its coal export business, as well as Sasol Mining’s interestin the Richards Bay Coal Terminal.
  partner Tshwarisano. Tshwarisano acquired a 25% shareholding in Sasol Oil (Pty) Limited with effect from 1 July 2006. We are providing considerable facilitation and support for Tshwarisano’s financing requirements, ofapproximately R1.1 billion, which will significantly lower Tshwarisano’s cost of borrowing. In addition, we arealso establishing and funding trusts within Tshwarisano for the benefit of under-privileged communities.
    reforms to the fiscal regime applicable to windfall profits in South Africa’s liquid fuel energy sector, withparticular reference to the synthetic fuel industry and a discussion document for public comment was released bythe task team. During August 2006, we publicly released a comprehensive written submission in response to thediscussion document and also presented our views in an oral presentation to the members of the task team. Thetask team handed their report containing its recommendation to the Minister of Finance on 22 September 2006.It is expected that an announcement on the decision will be made during 2007 by the Minister of Finance. Wecannot predict whether this investigation will lead to amendments to the current fiscal regime.
 Competition from products originating from countries with low production costs
  located in developed countries, including the United States of America and Europe. Economic and politicalconditions in these countries result in relatively high labor costs and, in some regions, inflexible labor markets,compared to others. Increasing competition from regions with lower labor costs and feedstock prices, forexample the Middle East and China, exercises pressure on the competitiveness of our chemical products and,therefore, on our profit margins and may result in the withdrawal of particular products or closure of facilities.


Engineering contract costs
  engineering resources and strains in that industry. These have impacted on some of our projects and haveaffected construction timing schedules and costs. Whilst higher international crude oil prices may boost post-commissioning income streams and compensate for construction delays higher capital costs, these strains in theengineering industry are nevertheless a cause for concern and may impact on our project plans and growthambitions.
 HIV/AIDS in sub-Saharan Africa
  on an actuarial study, which excludes the positive impact of any prevention and management interventionprograms, we estimate that, while the percentage of infected employees may not rise significantly in theforthcoming years, there will be a significant increase in the number of AIDS-related fatalities. See “Item 6 –Directors, senior management and employees”.
  levels of the organization, we estimate that 7% of our South African workforce may be currently infected, withthe highest concentration of infections in our mining operations. This is less than the 10% to 15% initiallyestimated during 2004.
  productivity. We also incur costs relating to the recruitment and training of new personnel. We are not in aposition to accurately quantify these costs. Based on our actuarial models, we estimate that the impact ofHIV/AIDS on our payroll expenses should be less than 1% of our current payroll for our South Africanemployees by the year 2007. This calculation is based on the estimated financial impact on production resultingfrom the projected prevalence of HIV/AIDS among our workforce, but does not take into account indirect costsof productivity losses. We are investing human and financial resources to establish and maintain programs toaddress the HIV/AIDS pandemic. In September 2002, we launched SHARP, which is our initiative to respond tothe HIV/AIDS pandemic, on which we have spent a total sum of approximately R22 million to June 2006. Weare committed to the on-going funding of SHARP.
 Significant accounting policies and estimates
  assumptions that affect the reported results of its operations. Some of our accounting policies require theapplication of significant judgments and estimates by management in selecting the appropriate assumptions forcalculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertaintyand are based on our historical experience, terms of existing contracts, management’s view on trends in theindustries in which we operate and information from outside sources and experts. Actual results may differ fromthose estimates.
  statements. See “Item 18 – Financial statements”. This discussion and analysis should be read in conjunctionwith the consolidated financial statements and related notes included elsewhere in this annual report.
  significant judgments and estimates used in the preparation of Sasol’s consolidated financial statements andcould potentially impact our financial results and future financial performance.
  assets, income taxes, pension and other post-retirement benefits and contingencies and litigation on an ongoingbasis. We base our estimates on historical experience and on various other assumptions that we believe to bereasonable under the circumstances, the results of which form the basis for making our judgments about carryingvalues of assets and liabilities that are not readily available from other sources.


Share options and other share-based payments
  Sasol Limited over a prescribed period. The objective of the Scheme is the retention and reward of keyemployees.
  which establishes accounting for share-based awards exchanged for employee services. Under the provisions ofthe standard share-based payments expenditure is measured at the grant date, based on the fair value of theaward, and is recognized as an expense over the employee’s requisite service period. The application of themodified retrospective method provides that the financial results of prior periods are adjusted to reflect the fairvalue method of expensing share-based payments for all awards which had not vested as at 1 July 2000. Thedisclosure requirements of SFAS 123 were adopted by the group effective 1 July 2000 the first financial yearthat the group presented its financial results in terms of US GAAP.
  expensing share-based payments, which was consistent with the pro-forma disclosures required for those periodsby SFAS 123.
  2006
 2005
 2004
  169
    58.74
      2006
 2005
 2004
  8.00
    34
    4.0
    2, 4 & 6
    African government bonds in effect at the time of grant and the expected volatility in the value of the shareoptions granted is determined using the historical volatility of the Sasol share price.
 Estimation of oil and gas reserves
  demonstrate with reasonable certainty (reserves) to be recoverable in future years from known reservoirs underexisting economic and operating conditions, i.e., prices and costs as of the date the estimate is made.” Refer toTable 4, “Proved reserve quantity information,” on page G–4 for the estimates for the year ending 30 June 2006and to Table 5, “Standardized measure of discounted future net cash flows”, on page G–5 for our standardizeddiscounted future net cash flow information in respect of proved reserves for year-end 30 June 2006, which werebased on year-end prices at the time.
  subject to future revision. Accordingly, financial and accounting measures (such as the standardized measure ofdiscounted cash flows, depreciation and amortization charges and asset retirement obligations), that are based onproved reserves are also subject to change.


production and pressure trends for producing reservoirs and, in some cases, subject to definitional limits, andsimilar data in respect of other producing reservoirs. Proved reserves estimates are attributed to futuredevelopment projects only where there is significant commitment to project funding and execution and for whichapplicable governmental and regulatory approvals have been secured or are reasonably certain to be secured.Furthermore, estimates of proved reserves only include volumes for which access to markets is assured withreasonable certainty. All proved reserves estimates are subject to revision, either upward or downward, based onnew information, such as from development drilling and production activities or from changes in economicfactors, including product prices, contract terms or development plans. See “Item 4.D – Information on thecompany – Property, plants and equipment”.
  resulting in increased confidence in reserve levels and the effect of higher crude prices in the extension of theproduction plateau. Additionally condensate volumes which were excluded from estimates prior to 2005 are nowincluded based upon the recognition of a spot market and a history of sales. Revisions to our oil and gas reservesduring 2006 and 2005 did not have a material impact on our financial position and results of operations.
  our 5% interest in the OPL249 license in deepwater Nigeria. The costs include acquisition costs and explorationcosts for three wells. Current activities include unitization of one discovery in the license area with aneighboring field due to the field stretching across both license areas. Further exploration wells are planned to bedrilled in the license area in the near future. The declaration of proved reserves is pending commencement offront end engineering and design and finalization of the development plan. This is expected to be completed in 2007.
 Amortization of coal mining assets
  based on our proved and probable reserves. Proved and probable reserves used for the amortization of life-of-mine assets are the total proved and probable reserves assigned to that specific mine (accessible reserves) orcomplex which benefit from the utilization of those assets. Inaccessible reserves are excluded from thecalculation. A unit is considered to be produced once it has been removed from underground and taken to thesurface, passed the bunker and been transported by conveyor over the scale at the shaft head. The lives of themines are estimated by our geology department using interpretations of mineral reserves, as determined inaccordance with Industry Guide 7 under the US Securities Act of 1933, as amended. The estimate of the totalreserves of our mines could be materially different from the actual coal mined. The actual usage by the minesmay be impacted by changes in the factors used in determining the economic value of our mineral reserves, suchas the coal price and foreign currency exchange rates. Any change in management’s estimate of the totalexpected future lives of the mines would impact the amortization charge recorded in our consolidated financialstatements, as well as our estimated asset retirement obligations. See “Item 4.D – Information on the company –Property, plants and equipment”.
 Fair value and useful life of intangible assets
  unit) and other intangible assets, we must make assumptions (including inflation, exchange rates and oil andchemicals product prices amongst others) regarding estimated future cash flows and other factors to determinethe fair value of the respective assets. If these estimates or their fair value assessments change in the future, wemay need to record impairment charges for these assets. Identifiable intangible assets with definite useful lives,such as patents, trademarks and licenses, are currently amortized on a straight-line basis, over their estimateduseful lives.


Useful life of long-lived assets
    regarding the future utilization pattern of the assets to determine the depreciation to be charged on a straight-linebasis over the estimated useful lives of the assets. Annually, we review the useful lives and economic capacity ofthe long-lived assets with reference to any events or circumstances that may indicate that an adjustment to thedepreciation period is necessary. The assessment of the useful lives takes the following factors into account:
    for which the asset is to be used, the repair and maintenance program of the business and the care andmaintenance of the asset while idle;
      resulted in a reduction in our depreciation charge of approximately R1.5 billion. The assessment was undertakendue to recent significant capital expenditure incurred, for example Project Turbo, primarily designed to enableour facilities to produce fuel which meets the new South African fuel specifications with effect from 1 January2006 and to expand our polymers portfolio. As Sasol Synfuels is the primary downstream feedstock provider toa number of the chemical plants in the Secunda complex, the useful lives of these assets were also assessed. Thisresulted in a substantial increase in the expected remaining useful life of our assets in Secunda to a maximumremaining life of 25 years. In Sasolburg, the introduction of natural gas as the primary feedstock towards the endof 2004 and the replacement of coal resulted in a similar assessment of the useful lives of the assets in theSasolburg region as well as the group’s gas pipeline infrastructure. As part of this process the useful lives of theassets in our overseas facilities were also evaluated. There were no significant changes to the useful lives of ourlong-lived assets during 2006.
 Impairment of long-lived assets
  or a change in circumstance indicate that the carrying amount may not be recoverable. In carrying out theeconomic valuations, an assessment is made of the future cash flows expected to be generated by the assets,taking into account current market conditions, the expected lives of the assets and our latest budgets. The actualoutcome can vary significantly from our forecasts, thereby affecting our assessment of future cash flows. Assetswhose carrying values exceed their estimated recoverable amount, determined on an undiscounted basis, arewritten down to an amount determined using discounted net future cash flows expected to be generated by theasset. The expected future cash flows are discounted based on Sasol’s Weighted Average Cost of Capital(WACC) which, at 30 June 2006, was 11.75% for our South African operations and 7.25% for our operations inEurope and the United States. Refer to the discussions included below under the Segment Review for thefinancial impact of the impairment assessments performed during the current year.


Environmental and asset retirement obligations
  conduct operations upon termination of such operations and incur expenditure relating to environmentalcontamination treatment and cleanup. Environmental and asset retirement obligations are primarily associatedwith our mining and petrochemical operations around the world.
  the amount of the liability can be reasonably estimated. Expenditure related to environmental contaminationtreatment and cleanup is expensed. The estimated fair value of dismantling and removing these facilities isaccrued for as the obligation arises, if estimable, concurrent with the recognition of an increase in the relatedasset’s carrying value. Estimating the future asset removal expenditure is complex and requires management tomake estimates and judgments because most of the removal obligations will be fulfilled in the future andcontracts and regulations often have vague descriptions of what constitutes removal. Further, management isrequired to determine the discount rate to be used in calculating the obligation based on the amount of the creditrisk of the group which varies depending on the underlying interest rate environment. Future asset removal costsare also influenced by changing removal technologies, political, environmental, safety, business relations andstatutory considerations.
    R2,262 million compared to R2,002 million in 2005 (R238 million and R158 million was accrued for 2006 and2005, respectively, for our discontinued operations).
  obligation and the currency in which the obligation will be settled, and the discount rates which fall within arange of between 4.2% to 8.1%. An increase in the discount rate by one percentage point would result in adecrease in the long-term obligations recognized of approximately R426 million and a decrease of onepercentage point would result in an increase of approximately R523 million.
 Employee benefits
  contribution and defined benefit schemes, as well as post-retirement healthcare benefits. The amount provided isdetermined based on a number of assumptions and in consultation with an independent actuary. Theseassumptions are described in Note 21 to “Item 18 – Financial statements” and include, among others, thediscount rate, the expected long-term rate of return on pension plan assets, healthcare cost inflation and rates ofincrease in compensation costs. The nature of the assumptions is inherently long-term, and future experiencemay differ from these estimates. For example, a one percentage point increase in assumed healthcare cost trendrates would increase the accumulated post-retirement benefit obligation by R547 million.
  component of net pension cost for the year if the net cumulative unrecognized actuarial gains and losses at theend of the previous reporting period exceed the greater of:


Surplus Apportionment Scheme. Had this approval been obtained prior to year end, the prepaid pension assetwould have increased by R130 million.
 Fair value estimations of financial instruments
  are not available, fair value is determined based on other relevant factors, including dealers’ price quotations andprice quotations for similar instruments traded in different markets. Fair value for certain derivatives based onpricing models that consider current market and contractual prices for the underlying financial instruments orcommodities, as well as the time value and yield curve or fluctuation factors underlying the positions. Pricingmodels and their underlying assumptions impact the amount and timing of unrealized gains and lossesrecognized, and the use of different pricing models or assumptions could produce different financial results. See“Item 11—Quantitative and qualitative disclosures about market risk”.
 Deferred tax
    and the amounts used for tax purposes. These temporary differences result in tax liabilities being recognized anddeferred tax assets being considered based on the probability of our deferred tax assets being recoverable fromfuture taxable income. We provide deferred tax at the tax rate applicable to undistributed earnings on alltemporary differences arising between the carrying values of assets and liabilities for accounting purposes andthe amounts used for tax purposes unless there is a temporary difference that is specifically excluded inaccordance with generally accepted accounting principles. To the extent that we believe that recovery is notlikely, we establish a valuation allowance. A valuation allowance of R307 million (2005 – R671 million) hasbeen established for certain deferred tax assets which we believe are not more likely than not to be recovered.The carrying value of our net deferred tax assets assumes that we will be able to generate sufficient futuretaxable income in applicable tax jurisdictions, based on estimates and assumptions. While we have consideredfuture taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for thevaluation allowance, in the event that we were to determine that we would not be able to realize our deferred taxassets in the future, a valuation allowance may be required which would reduce income in the period that suchdetermination was made.
 Secondary Taxation on Companies
  companies at a rate of 12.5% of dividends distributed. In the case of liquidation STC is only payable onundistributed earnings earned after 1 April 1993. The tax becomes due and payable on declaration of a dividend.When dividends are received in the current year that can be offset against future dividend payments to reduce theSTC liability, a deferred tax asset is recognized to the extent of the future reduction in STC.
  consistent with the accounting principle that allows the accrual of dividend payments after dividend declaration.If we were to provide for deferred taxes on the potential STC arising on our undistributed earnings, should thesebe declared as dividends, there would be the following effects on our reported results:


2006
 2005
 (Rand in millions)
 Balance sheetNet deferred tax liability as reported
 4,963
   6,275
    11,238
   50,668
   (6,275)
    44,393
  2006
 2005
 2004
 (Rand in millions)
 Income statementIncome tax as reported
 (6,452)
    (732)
     (7,184)
    11,299
    (732)
     10,567
     Commitments and contingencies
  litigation, tax matters and environmental remediation is based on management’s judgment and estimates of theamount of loss. The actual costs may vary significantly from estimates for a variety of reasons. A liability isrecognized for these types of contingencies if management determines that the loss is both probable andestimable. We have recorded the estimated liability where such amount can be determined and the minimumliability related to those claims where there is a range of loss, and no amount within the range is more probablethan the others. As additional information becomes available, we will assess the potential liability related to ourpending litigation proceedings and revise our estimates. Such revisions in our estimates of the potential liabilitycould materially impact our results of operation and financial position. See “Item 5.E – Off-balance sheetarrangements”.


OUR RESULTS OF OPERATIONS
   Results of operations
 Change
 Change
 Change
 Change
 2006
 2005
 2006/2005
 2006/2005
 2004
 2005/2004
 2005/2004
 (Rand in millions)
 (%)
 (Rand in millions)
 (%)
  61,857
        205
         189
        (41,563)
       Operating profit
 20,688
 14,377
 6,311
  8,546
 5,831
   67
       Income before tax, earnings/
 (losses) of equity accounted investees and minority interest
 20,755
 14,292
 6,463
  8,638
 5,654
   (6,452)
       Income before earnings/
 (losses) of equity accounted investees and minority interest
 14,303
 9,406
 4,897
  5,516
 3,890
    13
        (157)
       Income from continuing
 operations
 14,159
 9,611
 4,548
  5,376
 4,235
   discontinued operations (including fair value write-down), net of tax
 (2,860)
   –
    Earnings attributable to
 shareholders
 11,299
 9,719
 1,580
  5,237
 4,482
  Overview
  and US$31.30/b in 2004) boosted operating profit in all three years. The benefit of higher oil prices was,however, mostly realized in the energy and fuel-related businesses and to a lesser extent in the group’s chemicalbusinesses which have been adversely impacted by the effect of higher crude oil prices on the cost of theirfeedstock. This benefit was further enhanced by the positive impact of the slightly weaker rand during 2006(average rate R6.41 per US dollar for the 2006 year compared to R6.21per US dollar for the 2005 year andR6.88 per US dollar in the 2004 year). The benefit of the higher oil price was partly offset during 2005 by theadverse impact of the stronger rand during that year compared to 2004.


Turnover
  Change
 Change
 Change
 Change
 2006
 2005
 2006/2005
 2006/2005
 2004
 2005/2004
 2005/2004
 (Rand in millions)
 (%)
 (Rand in millions)
 (%)
  60,639
        776
         442
       Turnover
 61,857
 50,687
 11,170
  43,606
 7,081
   Change
 Change
 2006/2005
 2005/2004
 (Rand in
 %
 (Rand in
 %
 millions)
 millions)
              – crude oil
 5,902
  6,349
 13
 – other products (including chemicals)
 3,624
  3,204
 6
         Other operating income
  8%, compared to R223 million in 2005. Included in operating income for the 2006 year is a gain on hedgingactivities of R84 million, insurance proceeds of R40 million and R24 million in respect of income recognizedrelating to emission rights.
  34%, compared to R166 million in 2004. Included in other operating income for 2005 is gain on hedgingactivities of R82 million and a profit recognized of R33 million on the sale of part of our participation rights inthe second phase of the Qatar GTL project.
 Net foreign exchange gains/(losses)
  and liabilities amounted to R189 million and R148 million respectively. A net foreign exchange loss of R1,260 million was recognized in 2004. The profit recognized in 2006 and 2005 is due to the weakening of therand/US dollar exchange rate towards the end of the year closing at R7.17 per US dollar at 30 June 2006compared to the closing exchange rate at 30 June 2005 of R6.67 per US dollar and as at 30 June 2004 of R6.21 per US dollar. Additionally the average exchange rate for 2006 was R6.41 per US dollar compared to R6.21 per US dollar for 2005 and R6.88 per US dollar for 2004. The closing rate is used to translate to randall our monetary assets and liabilities denominated in a currency other than the rand at balance sheet date and asa result a net profit was recognized on these translations.


Operating costs and expenses
  Change
 Change
 Change
 Change
 2006
 2005
 2006/2005
 2006/2005
 2004
 2005/2004
 2005/2004
 (Rand in millions)
 (%)
 (Rand in millions)
 (%)
  (28,970)
        (666)
        (3,895)
        (4,051)
        (3,981)
       Operating costs and expenses
 (41,563) (36,681)
 4,882
  (33,966)
 2,715
    Cost of sales.
 15%, compared to R25,112 million in 2005 which increased by 8% from R23,282 million in 2004. The increaseover the past two years is due to the increase in the crude oil price and other feedstock prices. Compared toturnover from the sale of products, the cost of sales was 48% in 2006, 50% in 2005 and 54% in 2004. Thisdecrease was mainly due to the positive effects of the increase in crude oil prices on our energy relatedbusinesses which generate the majority of the group’s operating profit.
 Cost of services rendered.
 R142 million or 27%, compared to R524 million in 2005 which increased by 6% from R495 million in 2004.Compared to turnover from services rendered, the cost of services rendered was 86% in 2006 and 98% in 2005and 2004. The decrease is mainly due to the higher refinery margins attained by Natref which resulted in anincrease in the turnover from services rendered.
 Selling and distribution costs.
 advertising, salaries and expenses of marketing personnel, freight, railage and customs and excise duty. Sellingand distribution costs in 2006 amounted to R3,895 million, R3,840 million in 2005 and R3,824 million in 2004.Compared to sales of products, selling and distribution costs represented 6% in 2006 compared to 8% in 2005and 9% in 2004. The increase in these costs has been contained during the years under review.
 Administrative expenses.
 including accounting, information technology, human resources, legal and administration, pension, post-retirement healthcare benefits and Sasol Share Incentive Scheme costs. Administrative expenses in 2006amounted to R4,051 million, an increase of R240 million or 6%, compared to R3,811 million in 2005 whichincreased by 8% from R3,541 million in 2004. Increased activity at SSI and SPI resulted in significant increasesin their administrative expenses for 2006. The increase in our administrative expenses during 2005 was also dueto costs incurred on our transaction to form the liquid fuels joint venture Uhambo Oil, and our readiness projectundertaken with respect to our adoption of Sarbanes-Oxley Act, Section 404.
 Other operating expenses.
 R587 million or 17%, compared to R3,394 million in 2005 which increased by 20% from R2,824 million in2004. This amount includes impairments of R119 million (2005 – R175 million and 2004 – R205 million),scrapping of assets of R264 million (2005 – R284 million and 2004 – R22 million) and net loss on the disposalof property, plant and equipment of R50 million (2005 – a net profit of R43 million and 2004 – a net profit ofR122 million). Other operating expenses includes the effects of our crude oil hedging activities amounting to aloss of R93 million (2005 – a loss of R1.2 billion and 2004 – a profit of R36 million). Details of theimpairments, scrapping of assets and profit/(loss) on disposals are detailed in the Segment review.


2006
 2005
 2004
 (Rand in millions)
  16
   – impairments
 –
 16
 –
 – scrapping of assets
 25
 4
 –
 – profit on disposal of property, plant and equipment
 (9)
 (36)
 (17)
  187
   – impairments
 –
 16
 2
 – scrapping of assets
 205
 123
 17
 – profit on disposal of property, plant and equipment
 (18)
 (17)
 (16)
  5
   – impairments
 2
 47
 –
 – loss on disposal of property, plant and equipment
 3
 10
 –
  67
   – impairments
 67
 –
 –
  (2)
   – impairments
 4
 5
 –
 – scrapping of assets
 2
 5
 5
 – (profit)/loss on disposal of property, plant and equipment
 (8)
 2
 (64)
  19
   – impairments
 12
 78
 42
 – scrapping of assets
 7
 151
 –
 – profit on disposal of property, plant and equipment
 –
 –
 (23)
  141
   – impairments
 34
 13
 161
 – scrapping of assets
 25
 1
 –
 – loss/(profit) on disposal of property, plant and equipment
 82
 (2)
 (2)
 433
 416
 105


Operating profit
  Change
 Change
 2006/2005
 2005/2004
 (Rand in
 %
 (Rand in
 %
 millions)
 millions)
     1
          – crude oil effects
 4,536
 32
 5,062
 58
 – effect of the crude oil hedge
 1,032
 7
 (1,147)
 (13)
 – other products (including chemicals)
 1,057
 7
 3,505
 40
            2
      3
        1.
 This arises primarily from the effects of the average US dollar exchange rate during the year on both turnover andoperating expenses.
 2.
 Included in capital items is the impairment of long-lived assets and other capital items.
 3.
 Included in other effects are R182 million relating to the capitalization of mining development costs during 2006 andthe reduction in the depreciation charge in 2005 after a reassessment of the useful lives of various items of property,plant and equipment was performed. The effect on each business is discussed in detail in the “Segment review”
  Net other income/(expenses)
  Change
 Change
 Change
 Change
 2006
 2005
 2006/2005
 2006/2005
 2004
 2005/2004
 2005/2004
 (Rand in millions)
 (%)
 (Rand in millions)
 (%)
  9
        261
        (203)
       – interest incurred
 (1,152)
       – interest capitalized
 949
         –
       Net other income/(expenses
  67
        2004. The increase in the interest received during 2006 is attributable to the significant increase in cash and cashequivalents available to the group during 2006. The decrease in 2005 is mainly attributable to translationdifferences on interest income from investments in foreign countries due to the appreciation of the rand againstthe US dollar, as well as lower average cash balances and declining interest rates.


was capitalized, compared to interest incurred of R1,208 million in 2005 and R1,235 million in 2004, of whichR1,028 million and R1,071 million was capitalized for the respective years. The decrease in 2006 is mainly dueto the 21% decrease in net debt from 2005. Further interest incurred decreased in 2006 and 2005 due todeclining interest rates which was partially offset in 2005 as a result of increased net borrowings due to capitalproject requirements. The Eurobond raised during 2005 in the European capital markets is at a favorable interestrate compared to our other external borrowings. Capitalized interest decreased due to the lower interest incurred,partially offset by increased capital expenditure on property, plant and equipment in 2006 and 2005.
   Taxation
    2006
 2005
 2004
 (Rand in millions)
 Current tax– South African normal tax
 (5,607)
    (551)
    (386)
    (6,544)
   Deferred tax– South African
 (123)
    215
    92
    (6,452)
    rate was 31.1% in 2006, 34.2% in 2005 and 36.1% in 2004. The difference between the South African statutorytax rate of 29% in 2006 and 30% in 2005 and 2004 and the effective tax rate results mainly from STC which islevied at a rate of 12.5% on dividends paid, differences in foreign tax rates, disallowed expenditure and theeffect of changes in tax rates. The decrease in average effective tax rate is due to the increase in the average rateof earnings to dividend distributions ratio from 2.1 times in 2004 to 2.9 times in 2005 and increased further to3.1 times in 2006 (based on continuing operations) which reduces the effect of STC on the effective tax rate.
 Earnings/(Losses) of equity accounted investees
 Earnings of equity accounted investees amounted to R13 million in 2006 compared to R308 million in 2005 andloss of equity accounted investees of R48 million in 2004. The earnings in 2006 and 2005 comprise ourattributable share of equity accounted investments held by our Sasol Polymers and Sasol Solvents businesses,offset in 2006 by losses mainly from equity accounted investments held by our SSI business. The loss incurredby our SSI business is due to increased activity in respect of developing our GTL projects by this business whichdoes not currently generate significant turnover. The earnings generated by the equity accounted investmentsheld by Sasol Polymers and Sasol Solvents are due to the increase in solvents and polymer chemical prices.


Net (loss)/income from discontinued operations (including fair value write-down)
  group held for sale and the results reported as discontinued operations. The income statement has been restatedfor all periods to exclude Sasol Olefins & Surfactants from continuing operations and reports these results as asingle line item. Detail of the performance of the Sasol Olefins & Surfactants business is included in theSegment review.
   2006
 2005
 2004
 (Rand in millions)
 – impairments
 131
 84
 79
 – fair value write-down
 3,110
 –
 –
 – scrapping of assets
 –
 16
 4
 – loss on disposal of property, plant and equipment
 14
 8
 11
 3,255
 108
 94
   Minority interest
  2004. The increase is mainly attributable to the increase in profits earned from certain operations of Sasol Oil inwhich outside shareholders have an interest. This is due to the increase in the refining margin which waspartially off-set by the appreciation of the rand in 2006.
 Segment overview
  management basis which is prepared in accordance with IFRS. This approach is based on the way in which theGroup Executive Committee organizes segments within our group for making operating decisions and assessingperformance. For more information on the reconciliation of segmental turnover and operating profit under IFRSto the corresponding amounts prepared under US GAAP, refer below “Reconciliation of segmental results to US GAAP” and Note 3 to our consolidated financial statements, see “Item 18. Financial statements”.
  conditions which would have been negotiated with an independent third party. The segment information for 2005and 2004 has been restated for the classification of Sasol Olefins & Surfactants as discontinued operations aswell as the reclassification of the comonomers division from Sasol Olefins & Surfactants to Sasol Solvents.


Turnover per segment
 Sasol
 Synfuels
 Total
 Sasol
 Sasol
 Sasol
 Sasol
 Inter-
 Sasol
 Sasol
 continuing
 2006
 Mining
 Synfuels
 Oil
 Gas
 national
 Polymers
 Solvents
 Other
 operations
 (Rand in millions)
 External turnover
 1,517
 915
 32,243
 1,663
 161
 7,537
 10,485
 9,329
 63,850
 % of external turnover
 2%
 1%
 51%
 3%
 –
 12%
 16%
 15%
 100%
 Inter-segment turnover
 3,949
 24,734
 544
 1,546
 –
 102
 1,181
 4,242
 36,298
 % of inter-segment
 turnover
 11%
 69%
 1%
 4%
 –
 –
 3%
 12%
 100%
 Aggregated turnover
 5,466
 25,649
 32,787
 3,209
 161
 7,639
 11,666
 13,571
 100,148
 Sasol
 Synfuels
 Total
 Sasol
 Sasol
 Sasol
 Sasol
 Inter-
 Sasol
 Sasol
 continuing
 2005
 Mining
 Synfuels
 Oil
 Gas
 national
 Polymers
 Solvents
 Other
 operations
 (Rand in millions)
 External turnover
 1,471
 820
 23,525
 1,408
 –
 7,199
 9,361
 8,713
 52,497
 % of external turnover
 3%
 1%
 45%
 3%
 –
 14%
 18%
 16%
 100%
 Inter-segment turnover
 3,744
 17,864
 187
 996
 –
 83
 947
 3,534
 27,355
 % of inter-segment
 turnover
 14%
 65%
 1%
 4%
 –
 –
 3%
 13%
 100%
 Aggregated turnover
 5,215
 18,684
 23,712
 2,404
 –
 7,282
 10,308
 12,247
 79,852
 Sasol
 Synfuels
 Total
 Sasol
 Sasol
 Sasol
 Sasol
 Inter-
 Sasol
 Sasol
 continuing
 2004
 Mining
 Synfuels
 Oil
 Gas
 national
 Polymers
 Solvents
 Other
 operations
 (Rand in millions)
 External turnover
 1,083
 1,329
 18,554
 1,389
 7
 6,576
 7,937
 8,124
 44,999
 % of external turnover
 2%
 3%
 41%
 3%
 –
 15%
 18%
 18%
 100%
 Inter-segment turnover
 4,161
 14,664
 297
 133
 –
 86
 748
 3,609
 23,698
 % of inter-segment
 turnover
 18%
 62%
 1%
 1%
 –
 –
 3%
 15%
 100%
 Aggregated turnover
 5,244
 15,993
 18,851
 1,522
 7
 6,662
 8,685
 11,733
 68,697


135
 Operating profit/(loss) per segment
 Sasol
 Synfuels
 Total
 Sasol
 Sasol
 Sasol
 Sasol
 Inter-
 Sasol
 Sasol
 continuing
 Mining
 Synfuels
 Oil
 Gas
 national
 Polymers
 Solvents
 Other
 operations
 (Rand in millions)


Reconciliation of segment results to US GAAP
  is consistent with the basis that is used by the GEC to measure and manage the segments of our business. Thisbasis differs from the presentation of our consolidated financial statements which are prepared under US GAAP.The differences between US GAAP and IFRS as they affect external turnover and operating profit are discussedbelow:
 30 June 2006
 30 June 2005
 30 June 2004
 Turnover
 Operating
 Turnover
 Operating
 Turnover
 Operating
 Note
 (external)
 profit
 (external)
 profit
 (external)
 profit
 (Rand in millions)
  consolidated income statements
 63,850
 20,732
     Reconciliation of IFRS to
 US GAAP:
  incorporated joint ventures and reversal of proportionate consolidation
  1,993)
 (123)
        –
 –
       –
 (15)
       –
 (60)
       –
 (4)
        –
       –
 36
       –
 134
        –
 –
       –
 (12)
      consolidated income statements
 61,857
 20,688
     Turnover.
  Decrease of R1,993 million (2005 – R1,810 million; 2004 – R1,659 million). Proportionateconsolidation is applied with respect to incorporated joint ventures for IFRS reporting purposes.Under US GAAP, the equity method of accounting is applied.
  Increase of Rnil (2005 – Rnil; 2004 – R266 million). From 1 January 2004, Naledi PetroleumHoldings (Pty) Limited (included in the Sasol Oil segment) was consolidated for both IFRS reportingpurposes and for US GAAP.
 Operating profit.
  Decrease of R123 million (2005 – decrease of R180 million; 2004 – increase of R56 million).Proportionate consolidation is applied with respect to incorporated joint ventures for IFRS reportingpurposes. Under US GAAP, the equity method of accounting is applied.
  Increase of Rnil (2005 – Rnil; 2004 – R106 million). From 1 January 2004, Naledi PetroleumHoldings (Pty) Limited (included in the Sasol Oil segment) was consolidated for both IFRS reportingpurposes and for US GAAP.


Decrease of R15 million (2005 – increase of R77 million; 2004 – decrease of R151 million). Thetiming and recording of certain fair value adjustments differs under US GAAP to those recorded forIFRS reporting purposes because the transactions were not accounted for at the same effective date.The difference will have a continuing impact on the depreciation of these items. Up to 30 June 2004,negative goodwill was recognized for IFRS reporting purposes and amortized over the remaininguseful life of non-financial assets acquired. With effect from 1 July 2004, negative goodwill waswritten off against opening retained earnings and is no longer amortized. US GAAP requires thatnegative goodwill be allocated to reduce the amounts of any non-financial assets acquired and anyexcess amount remaining is recognized as an extraordinary gain in the period that it arises.
  Decrease of R60 million (2005 – Rnil; 2004 – Rnil). For IFRS reporting purposes certain developmentcosts are capitalized. US GAAP requires that these development costs be recognized in the incomestatement as incurred.
  Decrease of R4 million (2005 – R1 million; 2004 – R12 million). Derivative contracts entered intosubsequent to 1 July 2004 met the criteria for hedge accounting under both US GAAP and for IFRSreporting purposes. Certain derivative contracts entered into prior to 30 June 2002 did not meet thehedge accounting criteria under US GAAP and as such hedge accounting was not applied. For IFRSreporting purposes cumulative gains/losses arising from hedge accounting are adjusted against the costof the non-financial asset upon recognition of the forecasted transaction. Under US GAAP cumulativegains/losses are reclassified to earnings over the same period during which the forecasted transactionaffects earnings.
  Increase of Rnil million (2005 – decrease of R3 million; 2004—increase of R253 million). Only oneentity was accounted for differently for IFRS reporting purposes and under US GAAP. As a result thetranslation gains and losses arising on translation of monetary assets and liabilities of this entity wererecognized in the income statement.
  Increase of R36 million (2005 – R372 million; 2004 – R83 million). For IFRS reporting purposes,property, plant and equipment is considered to be impaired when its carrying value exceeds thediscounted estimated future cash flows, whereas under US GAAP an initial impairment review isrequired to be performed on an undiscounted basis.
  Increase of R134 million (2005 – decrease of R94 million; 2004 – decrease of R23 million). For IFRSreporting purposes asset retirement obligations are discounted at a risk free discount rate which isreassessed annually, whereas under US GAAP, a credit adjusted rate is used for the entire period andnot reassessed. For IFRS reporting purposes, the accretion charge is recognized as an interest expensein the income statement in the year that it was incurred. Under US GAAP the accretion charge isrecognized as an operating expense.
  Decrease of R108 million in 2004 is due to the profit on sale of 2.04% shares in Sasol Oil (Pty)Limited which was not shown as operating profit for US GAAP and was shown as operating profit forIFRS reporting purposes.
  significant adjustments that affect some of our segments. Other contains non-significant adjustmentsrelated to capitalization of finance leases, depreciation methods and pensions.


Segment review – Continuing operations
 Sasol Mining – results of operations
 Change
 Change
 Change
 Change
 2006
 2005
 2
 2006/2005
 2006/2005
 2004
 2
 2005/2004
 2005/2004
 (Rand in millions)
 (%)
 (Rand in millions)
 (%)
 TurnoverExternal
 1,517
        3,949
       Aggregated turnover
 5,466
 5,215
 251
  5,244
 (29)
   1
 (4,286)
       Operating profit
 1,180
 1,239
 (59)
  1,185
 54
    22
   1.
 Operating costs and expenses net of other income.
 2.
 Restated for the adoption of IFRS 2, Share-based payment. A share-based payment expense of R8 million and R9 million for 2005 and 2004, respectively, has been recognized in operating costs and expenses.
 Results of operations 2006 compared to 2005
  from 46.5 Mt to 47.7 Mt mainly because of higher short-term sales to Eskom of 1.7 Mt compared with 0.2 Mt in2005. Contributing to the increased aggregated turnover was higher Eskom sales volumes and higher sales toSasol Synfuels mainly because of a higher transfer price. Export sales volumes for 2006 and 2005 was 3.6 Mtfor each year, however, the average free on board Richards Bay coal price decreased by 4% in rand terms.
    Change
 2006/2005
 (Rand in
 %
 millions)


Results of operations 2005 compared to 2004
  to the increase in the US dollar price of coal which increased turnover by R470 million. This was partiallynegated by the effect of the appreciation of the rand against the US dollar.
  volumes to Infrachem and Sasol Synfuels decreasing by 4.6 Mt or 10% to 42.4 Mt in 2005, due to theintroduction of natural gas at Infrachem and Sasol Synfuels.
  R4,059 million in 2004, a decrease of R83 million or 2%. The decrease was mainly attributable to lower salesvolumes and cost saving initiatives.
  These useful lives were reassessed during 2005. Due to the extension of the useful lives of certain items ofproperty, plant and equipment, the depreciation charge was reduced by R29 million for 2005. These changes inestimate were accounted for prospectively with no adjustment made to prior years.
 Capital items for the years under review
   2006
 2005
 2004
 (Rand in millions)
  –
    (25)
    –
    9
    (16)
      R36 million was realized on the sale of mining assets, certain assets excluded from the disposal were impaired.An impairment of R16 million was recognized.


Sasol Synfuels – results of operations
 Change
 Change
 Change
 Change
 2006
 2005
 2
 2006/2005
 2006/2005
 2004
 2
 2005/2004
 2005/2004
 (Rand in millions)
 (%)
 (Rand in millions)
 (%)
 TurnoverExternal
 915
        24,734
       Aggregated turnover
 25,649
 18,684
 6,965
  15,993
 2,691
   1
 (12,150)
       Operating profit
 13,499
 7,546
 5,953
  5,498
 2,048
    53
   1.
 Operating costs and expenses net of other income.
 2.
 Restated for the adoption of IFRS 2, Share-based payment. A share-based payment expense of R14 million for both2005 and 2004 has been recognized in operating costs and expenses.
 Results of operations 2006 compared to 2005
  all-round effort to streamline operations and lift productivity, which resulted in a record operating profit.Aggregated turnover increased by 37% from R18,684 million to a record R25,649 million on the strength ofhigher product prices and marginally higher sales volumes. Overall production was below target due toinstability in our support utilities. Despite this, we increased production by 1%. Our costs increased mainlybecause of higher coal and gas feedstock prices, as well as the unscheduled plant interruptions, including poweroutages.
  Change
 2006/2005
 (Rand in
 %
 millions)
         – crude oil effects
   – effect of the crude oil hedge
   – other products
          1
        1.
 Includes the net positive effects of the delay of the scheduled maintenance shutdown of the plant to 2007.


Results of operations 2005 compared to 2004
  R509 million or 38%, mainly resulting from the suspension of the sale of certain products (e.g. metcoke). Thisdecision was taken as a result of low profit margins earned on these products as well as lower sales volumes ofammonia, sulfur, krypton xenon and wood preservative product sales. The increase in Sasol Synfuels’ aggregatedturnover of R2,691 million was mainly due to higher crude oil prices of R5,614 million as well as higher otherproduct prices of R201 million partly reduced by the negative effect of a strengthening of the rand against theUS dollar of R2,278 million as well as lower production volumes of R846 million.
  R10,495 million in 2004, an increase of R643 million or 6 %. The increase includes a realized opportunity losson our commodity derivative financial instruments of R1,147 million, offset by a small profit realized on otherderivative instruments of R11 million, compared to the loss of R54 million in 2004. The other main reasons forthe increase in our costs is due to feedstock price increases of R79 million and higher overhead costs of R337 million. This was partly reduced by the decrease in costs due to lower volumes produced of R309 million,due to three unplanned shut downs mentioned below.
  mainly due to three unplanned shutdowns, most significantly the flooding of the ash dams due to a rainstorm.Sales volumes for 2005 decreased to 7.4 Mt, a decrease of 6% over 2004 sales of 7.9 Mt resulting in a stockbuild up of intermediate products at year end.
  The estimated useful life of certain assets was extended due to technological innovations, product life cycles andmaintenance programs. Due to these extensions of the useful lives of certain items of property plant andequipment the depreciation charge was reduced by R656 million for the 2005 year. These changes in estimateswere accounted for prospectively with no adjustment made to prior years.
 Capital items for the years under review
   2006
 2005
 2004
 (Rand in millions)
  –
    (205)
    18
    (187)
    remaining carrying value of costs capitalized as part of the C4 Skeletal Isomerisation scheme of R81 million,R79 million for items of property, plant and equipment which formed part of the sulfur recovery project and theremaining carrying value of R10 million on the CFB reactors were scrapped during the year.
   for processing low sulfur coke, the electrical kiln was idle for a period of eight months. Althoughpotential uses for this asset are being investigated, there are presently no expected future cash flows to bederived from this asset and as a result an impairment of the carrying value of the asset was recognized;and
  scrapped during the year. These consist mainly of development costs for certain projects as well ascertain smaller assets which are no longer being used by Sasol Synfuels.


Sasol Oil – results of operations
 Change
 Change
 Change
 Change
 2006
 2005
 2
 2006/2005
 2006/2005
 2004
 2
 2005/2004
 2005/2004
 (Rand in millions)
 (%)
 (Rand in millions)
 (%)
 TurnoverExternal
 32,243
        544
       Aggregated turnover
 32,787
 23,712
 9,075
  18,851
 4,861
   1
 (30,355)
       Operating profit
 2,432
 1,892
 540
  1,421
 471
    7
   1.
 Operating costs and expenses net of other income.
 2.
 Restated for the adoption of IFRS 2, Share-based payment. A share-based payment expense of R8 million for both2005 and 2004 has been recognized in operating costs and expenditure.
 Results of operations 2006 compared to 2005
  increase our market share, mostly on the strength of vigorous marketing efforts and the continuing expansion ofour retail network launched in January 2004. We increased our complement of Sasol Convenience Centres andExel retail service stations in South Africa by 9% from 345 to 376.
  increase in refining margins during 2006 and the weakening of the rand against the US dollar. Operating profitrose by 29% from R1,892 million to R2,432 million, due mostly to the strength of better refining margins andgreater efficiency. On the downside, a drop in production volumes from the Sasol Synfuels operations and theNatref refinery restrained profit growth. Operating costs and expenses increased by 39% as a result of higherfeedstock, such as crude oil.
  Change
 2006/2005
 (Rand in
 %
 millions)


Results of operations 2005 compared to 2004
  prices of R6,970 million (primarily as a result of higher refining margins) and higher sales volumes of R294 million, which was partially offset by the strengthening of the rand against the US dollar of R2,403 million.
  R17,430 million in 2004, an increase of R4,390 million or 25%. The increase of 25% is mainly due to increasesin direct productions costs as a result of higher prices of feedstock, such as crude oil prices, of R6,108 millionand increased costs as a result of higher production of R248 million reduced by the effects of the strengtheningof the rand against the US dollar resulting in reduction in feedstock cost of R2,024 million. Other operatingcosts increased as a result of annual fixed cost escalations of R84 million, increased depreciation cost of R76 million due to commencement of the depreciation of additional items of property, plant and equipmentcapitalized, an increase in the provision for doubtful debts of R16 million and other smaller increases of R12 million, offset by lower foreign exchange translation losses of R154 million.
  the useful lives of certain items of property plant and equipment the depreciation charge was reduced by R39 million. These changes in estimate were accounted for prospectively with no adjustment made to prioryears.
 Capital items for the years under review
   2006
 2005
 2004
 (Rand in millions)
  (4)
    (1)
    –
    (3)
  –
  (8)
       value of intangible assets of R1 million for 6 commercial contracts established in the allocation of thepurchase price was impaired during the year as these contracts were performing worse than expected.
   Petroleum, fourteen were terminated during the current year. The carrying value of these contractsamounting to R8 million were impaired; and
  investment in Black Top Holdings (Pty) Limited (BTH). It was anticipated that this investment would besold in the near future and it was therefore valued at fair value. During 2005, business problems surfacedat BTH which resulted in the deterioration of the cash flow position of the company and it was unable tomeet its obligations. Accordingly, the investment in BTH was impaired by R42 million to a zero carryingvalue.


Sasol Gas – results of operations
 Change
 Change
 Change
 Change
 2006
 2005
 2
 2006/2005
 2006/2005
 2004
 2
 2005/2004
 2005/2004
 (Rand in millions)
 (%)
 (Rand in millions)
 (%)
 TurnoverExternal
 1,663
        1,546
       Aggregated turnover
 3,209
 2,404
 805
  1,522
 882
   1
 (1,683)
       Operating profit
 1,526
 931
 595
  386
 545
    48
   1.
 Operating costs and expenses net of other income.
 2.
 Restated for the adoption of IFRS 2, Share-based payment. A share-based payment expense of R1 million for both2005 and 2004 has been recognized operating costs and expenses.
 Results of operations 2006 compared to 2005
  pipeline-gas sales and prices. The business completed its second full financial year as a supplier and marketer ofnatural gas, which is produced in Mozambique. Sasol Gas achieved a 22% increase in sales volumes from 87 MGJ to 106 MGJ. The increase was attributable to higher sales to the Sasol chemicals plant at Sasolburg,Sasol Synfuels at Secunda and to South African industrial and commercial customers, mostly in Gauteng,Mpumalanga and KwaZulu-Natal. The business again benefited from higher selling prices, which are based onindices linked to producer price inflation and alternative energy prices, specifically oil products. Operating costsand expenditure increased by 24% after the effects of the profit of R203 million recognized on the disposal of a25% interest in ROMPCO to iGas and the impairment R67 million of the dedicated pipeline during 2006. Theincrease was maintained in line with the increased gas sales through continued cost containment.
  Change
 2006/2005
 (Rand in
 %
 millions)


Results of operations 2005 compared to 2004
  volumes as a result of the introduction of natural gas from Mozambique to inter-segment operations. The naturalgas was introduced in March 2004, therefore the 2005 year reflects a full-year production compared to fourmonths in the 2004 year.
  achieved as a result of higher inflation and alternate energy price variations and higher volumes to newcustomers partly offset by energy optimization strategies followed by some of our major existing customers.
  of natural gas to the Sasol plants at Infrachem (Sasolburg) and Sasol Synfuels (Secunda) for the full year ascompared to a four month period (March 2004 to June 2004) in the 2004 year.
  R1,136 million in 2004, an increase of R337 million or 30%. This increase of 30% is mainly attributable to thehigher cost of gas of R141 million and increased fixed costs of R69 million as a result of increased activity,additional depreciation of R222 million due to the fact that certain items of property, plant and equipmentrelating to the natural gas project were depreciated for a full year in 2005 compared to four months in the 2004year, less other income of R5 million earned and customer plant conversion costs incurred by us of R50 million,all associated with the introduction of natural gas.
  2005. The useful lives of certain assets was extended due to technological innovations, product life cycles andmaintenance programs. Due to these extensions of the useful lives of certain items of property, plant andequipment the depreciation charge was reduced by R50 million in 2005. These changes in estimate wereaccounted for prospectively with no adjustment made to prior years.
 Capital items for the years under review
   2006
 2005
 2004
 (Rand in millions)
  (67)
    205
    138
    and natural gas during the period of converting customers to natural gas. A dedicated pipeline was built fromSasolburg to continue to supply hydrogen-rich gas. Upon completion of the natural gas conversion project,this pipeline was intended to be utilized in a number of applications which have proved not to be feasible. A portion of the pipeline with no alternative use to Sasol Gas has been impaired.
  (Pty) Limited was sold to iGas under the shareholders’ agreement. A profit of R205 million was realized on thistransaction.


Sasol Synfuels International – results of operations
 Change
 Change
 Change
 Change
 2006
 2005
 2
 2006/2005
 2006/2005
 2004
 2
 2005/2004
 2005/2004
 (Rand in millions)
 (%)
 (Rand in millions)
 (%)
 TurnoverExternal
 161
      –
     Aggregated turnover
 161
 –
 161
 7
 (7)
  1
 (803)
       Operating loss
 (642)
 (201)
 (441)
  (140)
 (61)
  1.
 Operating costs and expenses net of other income.
 2.
 Restated for the adoption of IFRS 2, Share-based payment. A share-based payment expense of R2 million for both2005 and 2004 has been recognized in operating costs and expenses.
 Results of operations 2006 compared to 2005
  Oryx GTL plant. This business hosts the growth ambitions of the group relating to GTL and CTL ventures. Itscosts are associated with establishing and advancing the various opportunities that Sasol has to commercialize itsproprietary Fischer-Tropsch technology. An operating loss of R642 million was incurred in the year as a directconsequence of our increased activity in this respect.
 Results of operations 2005 compared to 2004
  was derived from the external portion of recoveries from joint ventures. Operating costs and expenses of SasolSynfuels International amounted to R201 million in 2005, compared to R147 million in 2004, an increase ofR54 million or 37%. This increase is a direct consequence of these increased activities in advancing the variousopportunities.
  Chevron to enable the joint venture to participate in the second phase of the Qatar GTL project. A profit of R33 million was realized on this sale.


Sasol Polymers – results of operations
  Chemical Industries Limited and Sasol Polymers International Investments a subsidiary of the Sasol InvestmentCompany.
 Change
 Change
 Change
 Change
 2006
 2005
 2
 2006/2005
 2006/2005
 2004
 2
 2005/2004
 2005/2004
 (Rand in millions)
 (%)
 (Rand in millions)
 (%)
 TurnoverExternal
 7,537
        102
       Aggregated turnover
 7,639
 7,282
 357
  6 662
 620
   1
 (6,817)
       Operating profit
 822
 1,475
 (653)
  1,021
 454
    11
   1.
 Operating costs and expenses net of other income.
 2.
 Restated for the adoption of IFRS 2, Share-based payment. A share-based payment expense of R9 million for both2005 and 2004 has been recognized in operating costs and expenses.
 Results of operations 2006 compared to 2005
  marketing and logistics with particular emphasis on improving safety, productivity and customer service.Harsher trading conditions were attributable mostly to higher oil-derived feedstock costs and relatively lowinternational polymer prices. Polymer selling prices tend to move with oil prices, but during 2006 there was asignificant squeeze on our operating margin. On average, international oil prices rose by almost 35%, butaverage international polymer selling prices increased by only 3%. Having reported an 11% drop in productionvolumes in the previous year, due primarily to the incident at the Secunda ethylene plant, we increasedproduction volumes by 5% during 2006. A greater increase was targeted, but we had to contend with lowerproduction mostly due to upstream feedstock constraints, the impact of Project Turbo work at Sasolburg andSecunda and unplanned power outages at Sasolburg. Sasol Polymers increased aggregated turnover by 5% on thebasis of the increased sales volumes, however, the impact of a decrease in the operating margin, throughincreased feedstock prices, decreased operating profit by 44%.


Change
 2006/2005
 (Rand in
 %
 millions)
         – crude oil
   – other products
          1
        1.
 Includes the effect of the insurance proceeds received during 2005.
 Results of operations 2005 compared to 2004
  price increases of R1,764 million partially offset by the appreciation of the rand against the US dollar resultingin a negative financial impact of R567 million and decreased sales volumes of R577 million. Our sales volumesdecreased by 9% as production was interrupted for a 90 day period due to an explosion at the ethylene plant atthe Secunda site in September 2004.
  R5,641 million in 2004, an increase of R166 million or 3%. This increase is due to higher input cost as a resultof higher oil prices of R995 million and higher cost due to inflation of R38 million. This increase was partiallyoffset by the appreciation of the rand against the US dollar resulting in a positive effect of R257 million andlower input costs of R207 million resulting from the decreased volumes. R304 million, net of excess payments,was received as insurance payments to cover the contribution losses sustained in an explosion. An increase of R3 million due to various other differences was offset by management initiated cost reduction exercises of R42 million compared to the previous year.
  during the 2005 year. The useful life of certain assets was extended due to technological innovations, productlife cycles and maintenance programs. Due to these extensions of the useful lives of certain items of propertyplant and equipment the depreciation charge was reduced by R170 million for 2005. These changes in estimatewere accounted for prospectively with no adjustment made to prior years.


Capital items for the years under review
   2006
 2005
 2004
 (Rand in millions)
  (23)
    (2)
    8
    (17)
    interest, which has been classified as a disposal group held for sale during 2006, after identifying a potentialbuyer and approval by the Sasol Polymers divisional board to divest. The classification of DPI Holdings as heldfor sale necessitated the impairment of the net assets to the fair value less costs to sell.
 Sasol Solvents – results of operations
   Change
 Change
 Change
 Change
 2006
 2005
 2
 2006/2005
 2006/2005
 2004
 2
 2005/2004
 2005/2004
 (Rand in millions)
 (%)
 (Rand in millions)
 (%)
 TurnoverExternal
 10,485
        1,181
       Aggregated turnover
 11,666
 10,308
 1,358
  8,685
 1,623
   1
 (10,793)
       Operating profit
 873
 1,021
 (148)
  4
 1,017
   7
   1.
 Operating costs and expenses net of other income.
 2.
 Restated for the adoption of IFRS 2, Share-based payment. A share-based payment expense of R4 million and R5 million for 2005 and 2004, respectively, has been recognized in operating costs and expenses in operating costs and expenses.
 Results of operations 2006 compared to 2005
  for most of our product portfolios remained robust. Plants ran well mostly at or above design capacity; logisticaland marketing operations were well coordinated. While demand remained largely buoyant in most regionalmarkets, with some growth being achieved for certain portfolios, escalating oil and related commodity pricesimpacted on margins, with some products being more harshly affected. Mostly on the strength of higher salesvolumes and some price increases, aggregated turnover increased by 13%, however, operating costs andexpenses increased by 16% primarily because of increased feedstock prices, thus reducing operating margins,and the negative impact of increased expenditure on capital items. Total sales volumes increased from 1.38 Mt to 1.58 Mt.


Change
 2006/2005
 (Rand in
 %
 millions)
         – crude oil
   – other products
              Results of operations 2005 compared to 2004
 Change
 Change
 Aggregated turnover
 2005
 2004
 2005/2004
 2005/2004
 (Rand in millions)
 (%)
                 R1,949 million. This increase was due to the increase in external turnover of R2,107 million, which wasattributable to an increase in product prices of R2,026 million which was offset by the appreciation of the randagainst the US dollar resulting in a negative effect of R538 million and by an increase in sales volumes of R619 million. The increased prices and volumes were due to customer demand outstripping supply, and it isbelieved that these price levels have reached unsustainable levels. The increase in external turnover was partiallyoffset by the decrease in inter-segment turnover of R158 million, which was mainly attributable to a decrease insales volumes of R187 million and increase in product prices which was partly offset by the appreciation of therand against the US dollar resulting in a negative effect of R18 million, partly offset by price increases of R11 million.
 Change
 Change
 Operating costs and expenses
 2005
 2004
 2005/2004
 2005/2004
 (Rand in millions)
 (%)
                 million or 13%. This net increase is mainly attributable to variable costs increases of R771 million as a result thefollowing:


various other increases amounting to R18 million, which were offset by the appreciation of the rand against theUS dollar of R30 million. Additionally profits incurred on translation of foreign exchange transactions wereR367 million higher than in the previous year.
    depreciation on other property, plant and equipment was lower by R61 million due to the extension of the usefullife of certain items. The useful life of certain assets was extended due to technological innovations, product lifecycles and maintenance programs. These changes in estimate were accounted for prospectively with noadjustment made to prior years. Included in net operating costs and expenses in 2004 was the profits realized onthe disposal of the Acrylates plant of R50 million and various other items of property, plant and equipment of R2 million.
  due to the increase in chemical product prices which was partially offset by increases in the cost of feedstockdue to higher crude oil prices.
 Capital items for the years under review
   2006
 2005
 2004
 (Rand in millions)
  –
    140
    (26)
    (7)
    (2)
    –
 –
   105
     of R140 million for Octene train 3 project due to increases in the capital costs. This project was notimpaired under US GAAP. The successful outcome of negotiations of the selling price of the productwhich were finalized during the last quarter of 2005, has resulted in the return (based on a discountedcash flow model) expected to be generated by this plant exceeding the expected cost of construction. Asa result, due to the change in economic circumstances, the impairment has been reversed.
   Impairment of Acrylates train 2 technology license (South Africa) – An impairment of thetechnology license for the second train of R14 million was recognized due to uncertainty regardingthe expected product mix that will be manufactured and the decision to postpone the project due tothe current de-bottlenecking of train one.
  Impairment of emission rights (carbon credits) – The group accounts for emission rights granted bygovernment as an indefinite life intangible asset. This intangible asset is recognized at the fair valueof the allowance on the date it is granted. No amortization is provided and the intangible asset istested for impairment at least annually. Due to the decrease in the market price of emission rights


during the year, from euro 26.00 to euro 16.00 per right (one right unit entitles the holder the right toemit one ton of carbon dioxide per year), the carrying value of the intangible asset at year-end wasimpaired by R12 million.
    Impairment of Octene train 3 (South Africa) – The economic evaluation of the project indicated thatit will be substantially more expensive than the original approved amount. As a result the entireamount of capital expenditure (including interest capitalized of R8 million) of R140 million wasimpaired. The Octene train 3 was not impaired under US GAAP as the carrying value did not exceedthe undiscounted future cash flows. On 9 September 2005 the Sasol Limited board of directorsapproved the continuation of the project at a substantially higher capital cost subject to successfulrenegotiations of the product selling price to recover the cost of the capital to be invested. Thisimpairment relates to the comonomers activities which have been reclassified from Sasol Olefins &Surfactants;
  Impairment of ketones and alcohols plants (Germany) – Both the ketones and ethanol plants wereevaluated for impairment during 2005. The impairment assessment resulted in an impairment of theketones plant of R13 million and of the ethanol plant of R71 million including an impairment of R5 million of intangible assets; and
  Impairment of n-butanol plant (South Africa)—The lower than budgeted economic performance andfinal cost of the n-butanol plant both lead Solvents to perform an assessment of impairment on the n-butanol plant. The results of the impairment assessment yielded an impairment of R218 millionwhich is primarily attributed to the interest capitalized on the construction of the n-butanol plant.
  decisions taken by the Solvents board, the following items of property, plant and equipment assets werescrapped:


Other Businesses – results of operations
   Change
 Change
 Change
 Change
 2006
 2005
 2
 2006/2005
 2006/2005
 2004
 2
 2005/2004
 2005/2004
 (Rand in millions)
 (%)
 (Rand in millions)
 (%)
 TurnoverExternal
 9,329
        4,242
       Aggregated turnover
 13,571
 12,247
 1,324
  11,733
 514
   1
 (12,529)
       Operating profit
 1,042
 480
 562
  (239)
 719
  Sasol Financing
  101
       Sasol Petroleum International
  1,237
        600
       Sasol Nitro
  3,402
        466
       Sasol Wax
  4,584
        276
       Infrachem
  2,270
        (297)
       Merisol
  556
        (11)
       1.
 Operating costs and expenses net of other income.
 2.
 Restated for the adoption of IFRS 2, Share-based payment.
 Results of operations 2006 compared to 2005
  Its operating profit amounted to R101 million in 2006, compared to operating profit of R84 million in 2005.Changes in Sasol Financing’s operating profit are mainly attributable to movements in the rand against the US dollar.
  Naçional de Hidrocarbonetos de Moçambique and the International Finance Corporation produced and sold 94 MGJ of natural gas from the Temane field. Sasol Petroleum International’s share of the sales was 66 MGJ, a22% increase on the previous year’s 54 MGJ. Our share of gas condensate sales doubled from 225,000 b to450,000 b. Through our 27.75% stake in Gabon’s Etame field, we sold for our own account 1.7 million b ofcrude oil. Higher oil and gas prices, the weakening of the rand against the US dollar and increased volumesenabled Sasol Petroleum International to increase aggregated turnover by 47% and to more than double


operating profit from R280 million to R600 million. A loss of R82 million was recognized on the disposal of a30% interest in the Temane central processing facility to Companhia Moçambicana Hidrocarbonetos and theInternational Finance Corporation effective 1 April 2006 mainly due to the strengthening of the rand since theconstruction of the facility. Total exploration costs expensed against operating profit amounted to R123 millionfor 2006 compared to R121 million for 2005. A new onshore exploration, appraisal and development drillingcampaign will commence in 2007 with a budget of US$195 million. Drilling will be concentrated in the Pande and Temane field areas and targeted at increasing annual gas production over the next few years beyond 120 MGJ.
  from high ammonia prices and a strong performance from explosives being partially offset by a substantialdecrease in fertilizer sales. Sales volumes for our combined nitrogen value chain decreased by 20% mostly as a result of lower fertilizer sales and the switch of our Phalaborwa phosphoric acid operation to tollmanufacturing in September 2005. Capital items in the previous year included a R28 million profit on the sale ofour US operation, whereas 2006 includes a net loss of R28 million mostly due to the disposal of our electronicdetonator business. The average ammonia price was significantly higher than that of the previous year andbenefited Sasol Nitro by making a higher contribution to operating profit, which was also boosted by highermargins and strong sales for our non-fertilizer products. The ammonia production volumes at Sasolburg alsoincreased. Fertilizer sales were down substantially due to an estimated 44% decline in South African maizeplantings.
  globally. Sasol Wax maintained steady production and increased sales with the advantage of achieving bettermargins than in the previous year. High oil prices, however, impacted on feedstock prices in South Africa,Europe and the US, with the effects being more dramatic in the latter two regions. To Sasol Wax’s benefit, thesecond half of 2006 was characterized by a worldwide shortage of paraffin waxes due to an overall buoyantglobal market and, more so, because of strong growth in general demand for waxes and related products.Shortages drove sales prices up significantly for most wax grades, including those produced through Sasol’sFischer-Tropsch process. An impairment of R17 million was recognized for the Pass Christian plant in the USwhich was damaged by Hurricane Katrina.
  gas, which it produces at Sasolburg through two autothermal reformers operated on behalf of Sasol Gas.Reformed gas production was stable during the year and above the set target. Gas production increased byalmost 46% from 25.9 MGJ to 37.7 MGJ. Greater gas production – along with the increased provision of onsiteutilities and ongoing cost containment – enabled an increase in turnover by 13%.
  feedstock constraints at Secunda in South Africa early in 2006 and the disruptive impact of Hurricane Rita on itsUS operations at Houston, Texas, which lowered production. The hurricane interrupted the supply of gas andprocess chemicals to our plants for an extended period. This necessitated plant idling and a subsequentinterruption in our supply of products to customers. Sales volumes decreased by almost 5% from 103 kt to 99 kt.Turnover increased by 5% on the strength of higher prices necessitated by higher energy and feedstock prices.Variable costs increased by 20% because of higher utility and feedstock prices worldwide.
 Results of operations 2005 compared to 2004
  R154 million in 2004. Changes in Sasol Financing’s operating profit are mainly attributable to movements in therand against the US dollar.
  R312 million in 2004, mainly as a result of increased oil production and higher oil prices from the Etame oilfield in Gabon, and a full year of production from the Temane gas field in Mozambique. Operating profit


amounted to R280 million in 2005 compared to an operating loss of R119 million in 2004 largely as a result ofthe increase in turnover. Total exploration costs expensed against operating profit amounted to R121 million for2005 compared to R223 million for 2004 mainly as a result of a temporary decline in exploration activity inMozambique.
  increase of R259 million or 8%. This increase is mainly because of stronger selling prices, as well as higherexplosives and accessories volumes, which was partially offset by the stronger rand, lower phosphoric acid salesand the disposal of our investment in Sasol Southwest Energy joint venture in the United States. Following animpairment charge recognized in 2004, the final disposal of the investment realized a profit for the group of R28 million. Operating costs were contained through cost savings initiatives and greater efficiency, as well asbenefits arising from the repositioning of the electronic detonator business and the increased sales volumes fromthe Sasol Dyno Nobel joint venture. Sasol Nitro’s contribution to group profit was R449 million compared to theloss of R157 million in 2004.
  R4,042 million to R4,075 million. Higher oil-based feedstock prices kept operating margins under pressure.Sales volumes of wax and associated paraffinic products increased by 5% from 779.9Kt to 821.6Kt primarily asa result of securing new business. Sasol Wax’s contribution to group operating profit decreased by 22% fromR266 million to R208 million.
  end of 2004 went smoothly when the two new autothermal reformers were brought into commercial production.The reformers production during 2005 alternated between prolonged periods of stable operations in line withplanned production and intermittent downtime to resolve post commissioning technical shortcomings thatlimited full reformer capability. As a result of these interruptions, turnover dropped by almost 14% from R2,329 million to R2,013 million. Gas production fell from 53.4 MGJ (coal-based) to 25.9 MGJ (natural gas-based) and 12.5 MGJ (coal-based), a total of 38.4 MGJ. Sasol Infrachem incurred a loss of R364 million,primarily due to the consequence of the one-off costs incurred during the commissioning of the natural gas-fedautothermal reformers that have replaced the coal-fired gasifiers in Sasolburg which could not be passed on tocustomers.
  largely due to the strength of higher prices and sustained good sales across the product portfolio. Higher oilprices drove up costs for Merisol products manufactured in South Africa, Japan and the US. Merisol was able toabsorb cost increases through price increases. Feedstock constraints, however, reduced sales volumes to 103.3Kt.
  equipment. The useful life of certain assets was extended due to technological innovations, product life cyclesand maintenance programs. Due to these extensions of the useful lives of certain items of property, plant andequipment owned by Sasol Nitro, Sasol Wax and Sasol Technology, the depreciation charge was reduced by R25 million. These changes in estimate were accounted for prospectively with no adjustment made to prioryears.


Segment review – discontinued operations
 Sasol Olefins & Surfactants – results of operations
  Most of this business was subsequently hosted in Sasol Olefins & Surfactants with production facilities mainlyin the US, Europe and South Africa. In 2003, it was determined that we would continue to grow our chemicalbusinesses conditional upon projects leveraging our technology or securing integrated and highly cost-competitive feedstock positions. We announced in August 2005 that we are considering the divestment of theSasol Olefins & Surfactants business excluding our comonomers activities in South Africa. The Sasol Olefins &Surfactants business is not vertically integrated to our required standards; is not adequately linked to ourproprietary Fischer-Tropsch technology process and has not adequately provided the integration benefits whichwe require. The financial impact of changes in the input costs of the business – together with current market-place dynamics – exceeds the benefits of significant reductions that have successfully been achieved in the fixedcosts of the business and various other productivity improvements. After a review of valuations and bids receivedfrom interested parties, which confirmed our valuation, it was necessary to write-down the net asset value of thebusiness to its fair value. By 30 June 2006, we had completed most of the activities required to prepare thisbusiness for sale as a going concern and are presently in negotiations with potential buyers. It is envisaged thatthe disposal of the Sasol Olefins & Surfactants business will be completed within the next 12 months, subject toobtaining the relevant regulatory and other approvals. Until the business is sold, we remain committed to thestrategic and operational goals of Sasol Olefins & Surfactants and will continue to provide the business with thesupport necessary to uphold its effectiveness and success.
 Change
 Change
 Change
 Change
 2006
 2005
 2 & 3
 2006/2005
 2006/2005
 2004
 2 & 3
 2005/2004
 2005/2004
 (Rand in millions)
 (%)
 (Rand in millions)
 (%)
 TurnoverExternal
                Aggregated turnover
 19,095
 17,096
 1,999
  15,417
 1,679
   1
       Operating (loss)/profit
 (3,567)
 (14)
 (3,553)
 32
   1.
 Operating costs and expenses net of other income.
 2.
 Restated for the adoption of IFRS 2, Share-based payment. A share-based payment expense of R10 million for both2005 and 2004 has been recognized in operating costs and expenses.
 3.
 Restated for the reclassification of the comonomers operations to Sasol Solvents.
 Results of operations 2006 compared to 2005
  reducing fixed costs in a sustainable manner, improving customer relations, lifting productivity and optimizing itsportfolio of surfactants, surfactant intermediates and speciality inorganic chemicals in the face of tougher marketconditions. Despite ongoing optimization, the business was again severely hampered by largely unfavorablemarket conditions which impacted more harshly on some businesses. Most markets remain highly competitive dueto continuing and, in some cases, increasing oversupply. Further substantial increases in oil prices and relatedfeedstock prices, as well as natural gas and utility prices, could not be fully accommodated in higher sellingprices. This led to sustained margin pressure and, in some instances, severe margin erosion. Aggregated turnoverincreased by 12% due mostly to higher sales prices. This benefit was fully absorbed by the higher feedstock andenergy costs. Our global sales volumes were largely unchanged and, in general, the markets we sell into remainedstable to stronger with the dominating characteristic being the oversupply of many products.


dynamics – exceeds the benefits of significant reductions that have successfully been achieved in the fixed costsof the business and various other productivity improvements.
  Change
 2006/2005
 (Rand in
 %
 millions)
         – crude oil
   – other products
                 Results of operations 2005 compared to 2004
 Change
 Change
 Turnover
 2005
 2004
 2005/2004
 2005/2004
 (Rand in millions)
 (%)
                 higher product prices. This increase was partially offset by a decrease in sales volumes and the appreciation ofthe rand against the euro and the US dollar.
 Change
 Change
 Operating costs
 2005
 2004
 2005/2004
 2005/2004
 (Rand in millions)
 (%)
                 compared to R17,449 million in 2004, an increase of R1,166 million or 7%. This increase was mainly due tohigher chemical feedstock and crude oil related costs of R2,134 million, offset by the appreciation of the randagainst the euro and the US dollar which resulted in a positive effect of R1,229 million. The useful lives ofcertain items of property, plant and equipment were assessed during the 2005 year. Due to the extension of theuseful lives of certain items of property plant and equipment the depreciation charge was reduced by R517 million for the current year. These changes in estimate were accounted for prospectively with noadjustment made to prior years. Additionally the costs were reduced through our restructuring initiatives inNorth America and Italy and a reduction of certain of our environmental obligations of approximately R127 million.


Capital items for the years under review
   2006
 2005
 2004
 (Rand in millions)
  (804)
    (104)
    (4)
    (21)
    –
    (14)
   (947)
    (3,196)
    (4,143)
      Impairment of the organics business unit (Italy) – The organics business unit of Sasol Italycomprises the Augusta alkylates and alcohols plants, the Sardinian alkylates plant and the Terranovasurfactant plants. Based on current market conditions (i.e. high oil derived feedstock prices, pressureon sales prices due to over supply in the market, amongst other) the assets of the cash generatingunit have been impaired by R791 million to their estimated recoverable amount based on the value inuse. This cash generating unit has not been impaired under US GAAP as the carrying value did notexceed the undiscounted future cash flows;
  Impairment of Sasol Gulf assets (United Arab Emirates) – A significant increase in the productioncapacity in the Middle East and the Gulf has increased the competitiveness of the surfactants market.After the performance of an impairment review, based on value in use, the entire carrying value ofthe assets of R22 million was impaired.
  Impairment of inorganic specialities plant (Italy) – In the previous year, the carrying value of thisplant was impaired. During the current year, in order to support the business requirements of theglobal Sasol Olefins & Surfactants business unit, further capital expenditure was incurred oncontinuing operation of this plant. This expenditure, while meeting the requirements forcapitalization in order to continue operating the plant, was reviewed for impairment. The plantcontinues to incur losses and therefore all additional expenditure of R16 million on this asset hasbeen impaired.
  government as an indefinite life intangible asset. This intangible asset is recognized at the fair value ofthe allowance on the date it is granted. No amortization is provided and the intangible asset is tested forimpairment at least annually. Due to the decrease in the market price of emission rights during the year,from euro 26.00 to euro 16.00 per right (one right unit entitles the holder the right to emit one ton of carbon dioxide per year), the carrying value of the intangible asset at year-end was impaired by R83 million.
  was necessary to write-down the net asset value of the business to its fair value less costs to sell. This resulted in a reduction of net asset value and a charge to the income statement of R3.2 billion (R2.8 billion after tax).


Impairment of the alkylates plant (North America) – The alkylates cash generating unit comprisesthe assets of the Baltimore and Lake Charles alkylate plants and the Lake Charles paraffin andsolvents plants. An impairment was recognized of R288 million which is allocated first to goodwill(R79 million) and then to the underlying property, plant and equipment (R209 million). This cashgenerating unit has not been impaired under US GAAP as the carrying value did not exceed theundiscounted future cash flows;
  Impairment of inorganic specialties plant (Italy) – Due to prolonged losses being incurred by theinorganic business unit in Sasol Italy the long-lived assets were assessed for impairment. The netpresent value of estimated future cash flows is less than the carrying value of the asset andaccordingly an impairment of R103 million was recognized under IFRS and US GAAP;
  Goodwill of R130 million in Sasol Italy was impaired as a result of the losses incurred in thisbusiness.
      2004 was finalized. A reduction in the settlement proceeds and the profit on disposal realized in 2004 ofR11million was recognized during the current year.
  negative goodwill of R610 million at the beginning of the 2005 financial year, with a corresponding adjustmentto our opening retained earnings. As a result our net operating costs as internally reported in 2005 are higher dueto the fact that we have not amortized the goodwill during the current year and therefore excluded theamortization of R162 million, which was included in the 2004 year.
 RECENT ACCOUNTING PRONOUNCEMENTS
 The following recent accounting pronouncements which are applicable to the group have been issued by
 the FASB and have been adopted by the group during 2006:
 Statement of Financial Accounting Standards No. 123R, Share-based payment (SFAS 123(R)),
 FSP FAS 123(R)-1, FSP FAS 123(R)-2, FSP FAS 123(R)-3 and FSP FAS 123(R)-4
  of equity instruments based on the grant-date fair value of the award. The cost will be recognized over the periodduring which an employee is required to provide service in exchange for the reward.
  all periods presented. The impact of adopting this standard is set out in the accounting policies, see “Item 18 – Financial statements”.
 Statement of Financial Accounting Standards No. 151, Inventory costs, an amendment of ARB No. 43, Chapter 4(SFAS 151)
  Bulletin (ARB) No. 43, Chapter 4, “Inventory Pricing” to clarify the accounting for abnormal amounts of idlefacility expense, freight, handling costs and spoilage. In addition, the standard requires that allocation of fixedproduction overheads to the costs of conversion be based on the normal capacity of the production facilities.


Statement of Financial Accounting Standards No. 153, Exchanges of nonmonetary assets, an amendment to APB Opinion No. 29 (SFAS 153)
  productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not havecommercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entityare expected to change significantly as a result of the exchange. The standard requires nonmonetary exchangesto be accounted for at fair value of the assets exchanged, with gains and losses recognized, if the fair value isdeterminable and the transaction has commercial substance.
   FASB Interpretation No. 47, Accounting for conditional asset retirement obligations, an interpretation of FASB Statement No. 143 (FIN 47)
  clarifies that the phrase “conditional asset retirement obligation,” as used in SFAS 143, refers to a legalobligation to perform an asset retirement activity for which the timing and/or method of settlement areconditional on a future event that may or may not be within the control of the company. The obligation toperform the asset retirement activity is unconditional even though uncertainty exists about the timing and/ormethod of settlement. Uncertainty about the timing and/or method of settlement of a conditional asset retirementobligation should be factored into the measurement of the liability when sufficient information exists. It isacknowledged in SFAS143 that in certain cases, sufficient information may not be available to reasonablyestimate the fair value of an asset retirement obligation. FIN 47 clarifies when an entity would have sufficientinformation to reasonably estimate the fair value of an asset retirement obligation.
   EITF Issue 06-3, How taxes collected from customers and remitted to governmental authorities should bepresented in the income statement (that is, gross versus net presentation) (EITF 06-3)
  governmental authority that is directly imposed on a revenue-producing transaction between a seller and acustomer and collected from customers and remitted to governmental authorities, should be presented in theincome statement. Taxes within EITF 06-3 can be presented either on a gross (included in revenues and costs) ora net (excluded from revenues) basis as provided in the entities accounting policy. For taxes that are reported ona gross basis disclosure should be provided of the amount of those taxes for each period for which an incomestatement is presented if those amounts are significant.
   EITF Issue 04-6, Accounting for stripping costs incurred during production in the mining industry (EITF 04-6)
  incurred during the production phase of a mine. In March 2005, the EITF reached a consensus (ratified by theFASB) that stripping costs incurred during the production phase of a mine are variable production costs thatshould be included in the costs of inventory produced during the period that the stripping costs are incurred.


EITF Issue No. 04-13, Accounting for purchases and sales of inventory with the same counterparty (EITF 04-13)
  appropriate to measure purchases and sales of inventory at fair value and record the effect of this transaction incost of sales and turnover and when these transactions should be recorded as exchanges measured at the carryingvalue of the item sold. It was concluded that purchases and sales of inventory with the same counterparty thatare entered into in contemplation of one another should be combined and recorded as exchanges measured at thecarrying value of the items sold.
   EITF Issue No. 03-13, Applying the conditions in Paragraph 42 of FASB Statement No. 144, Accounting for theimpairment or disposal of long-lived assets, in determining whether to report discontinued operations (EITF 03-13)
  criteria in paragraph 42 of Statement of Financial Accounting Standards No. 144, Accounting for the impairmentor disposal of long-lived assets, have been met for the purposes of classifying the results of operations of anentity that either has been disposed or classified as held for sale as discontinued operations.
   The following recent accounting pronouncements which are applicable to the group but not yet effective havebeen issued and have not been adopted by the group:
 Staff Accounting Bulletin No. 108, Considering the effects of prior year misstatements when quantifyingmisstatements in current year financial statements (SAB 108)
  prior-year uncorrected misstatements should be considered when quantifying misstatements in the current yearfinancial statements. SAB 108 requires registrants to quantify misstatements using both an income statement(rollover) and balance sheet (iron curtain) approach and  evaluate whether either approach results in amisstatement that, when all relevant quantitative and qualitative factors are considered, is material. If prior yearerrors that had been previously considered immaterial now are considered material based on either approach, norestatement is required  so long as management properly applied its previous approach and all relevant facts andcircumstances were considered. If prior years are not restated, the cumulative effect adjustment is recorded inopening accumulated earnings (deficit) as of the beginning of the fiscal year of adoption. SAB 108 is effectivefor fiscal years ending on or after 15 November 2006, with earlier adoption encouraged. The group is currentlyin the process of assessing the impact the adoption of SAB 108 will have on its financial statements.
 Statement of Financial Accounting Standards No. 158, Employers’ accounting for defined benefit and otherpostretirement plans, an amendment to FASB Statements No. 87, 88, 106 and 132(R) (SFAS 158)
  employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan (other thana multiemployer plan) as an asset or liability in its statement of financial position and to recognize changes inthat funded status in the year in which the changes occur through comprehensive income. This statement alsoimproves financial reporting by requiring an employer to measure the funded status of a plan as of the date of itsyear-end statement of financial position, with limited exceptions. SFAS 158 requires a company to initially


recognize the funded status of a defined benefit postretirement plan and to provide the required disclosures as ofthe end of the year ending after 15 December 2006. The requirement to measure plan assets and benefitobligations as of the date of the employer’s fiscal year-end is effective for years ending after 15 December 2008.
   FASB Interpretation No. 48, Accounting for uncertainty in income taxes—an interpretation of FASB StatementNo. 109 (FIN 48)
  for the financial statement recognition and measurement of a tax position taken or expected to be taken in a taxreturn. The evaluation of a tax position in accordance with this interpretation firstly requires the determinationwhether it is more likely than not that a tax position will be sustained upon examination, based on the technicalmerits of the position and secondly the position is measured to determine the amount of benefit to recognize inthe financial statements. The Interpretation also provides guidance on derecognition, classification, interest andpenalties, accounting in interim periods, disclosure, and transition. FIN 48 is effective in fiscal years beginningafter 15 December 2006. The provisions of FIN 48 are to be applied to all tax positions upon initial adoption,with the cumulative effect adjustment reported as an adjustment to the opening balance of retained earnings.
   FASB Staff Position No. FAS 13-1, Accounting for rental costs incurred during a construction period (FSP No. 13-1)
  associated with operating leases that are incurred during a construction period. The guidance requires rentalcosts associated with ground or building operating leases that are incurred during a construction period to berecognized as rental expense. The rental costs shall be included in income from continuing operations. FSP FAS 13-1 is effective for reporting periods beginning after 15 December 2005 and will be adopted by thegroup in the year ended 30 June 2007.
   FASB Staff Position No. FAS 115-1 and FAS 124-1, The meaning of other-than-temporary impairment and
 its application to certain investments (FSP FAS 115-1 and FAS 124-1)
  determination as to when an investment is considered impaired, whether that impairment is other than temporary,and the measurement of an impairment loss. The guidance also includes accounting considerations subsequent tothe recognition of an other-than-temporary impairment and requires certain disclosures about unrealized lossesthat have not been recognized as other-than-temporary impairments. FSP FAS 115-1 and FAS 124-1 is effectivefor reporting periods beginning after 15 December 2005 and will be adopted by the group in the year ended 30 June 2007.


FASB Staff Position No. FIN 46(R)-6, Determining the variability to be considered in applying FASBInterpretation No. 46(R) (FSP FIN 46(R)-6)
  considered in applying FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable InterestEntities(FIN 46(R)). The variability to be considered in applying FIN 46(R) is based on an analysis of thedesign of the entity considering the nature of the risks in the entity, determining the purpose for which the entitywas created and determining the variability the entity is designed to create and pass along to its interest holders.FSP FIN 46(R)-6 is effective the first day of the first reporting period beginning after 15 June 2006.
   5.B
 Liquidity and capital resources
 Liquidity
  facilities, will be sufficient to cover our reasonably foreseeable working capital and debt requirements. Wefinance our capital expenditure from funds generated out of our business operations, existing borrowing facilitiesand, in some cases, additional borrowings to fund specific projects.
  2006
 2005
 2004
 (Rand in millions)
  18,875
    (11,766)
    (6,214)
    then to provide a return in the form of a dividend to our shareholders. The remaining cash is applied primarily toinvest in our capital investment program.
  operations in the presentation of the cash flow statement. The following table provides a summary of the cashflows of our discontinued operation (Sasol Olefins & Surfactants) for each of the three years ended 30 June:
 2006
 2005
 2004
 (Rand in millions)
  1,275
    (980)
    (17)
    significant impact on the liquidity of the group. Strong expected cash flows from continuing operations and theanticipated proceeds from the disposal of Sasol Olefins & Surfactants will have a positive impact on liquidity.


Operating activities
  R18,875 million in 2006 from R14,097 million in 2005 and R9,686 million in 2004. Cash flows generated byoperating activities include the following significant cash flows:
 Change
 Change
 Change
 Change
 2006
 2005
 2006/2005
 2006/2005
 2004
 2005/2004
 2005/2004
 (Rand in millions)
 (%)
 (Rand in millions)
 (%)
   24,215
        (5,484)
        average of US$ 46.17/b in 2005 and US$31.30/b in 2004. This increase in the crude oil price has had a positiveimpact on our operating profit and cash generated by operating activities. Cash generated by operating activitieshas increased by 36% to R24,215 million in 2006 and by 29% to R17,868 million in 2005. In line with operatingprofit generated by our businesses, the most significant contributor to our cash generated by operations is SasolSynfuels. The increase in tax paid during the year is due to the increase in taxable profit as discussed under theoperating results above.
 Investing activities
  three years from R9,677 million in 2004 to R11,732 million in 2005 and R11,766 million in 2006. Cash flowsutilized in investing activities include the following significant cash flows:
 Change
 Change
 Change
 Change
 2006
 2005
 2006/2005
 2006/2005
 2004
 2005/2004
 2005/2004
 (Rand in millions)
 (%)
 (Rand in millions)
 (%)
   (9,703)
         (1,831)


ventures is primarily due to an increase in capital expenditure on projects to expand our operations whichincludes the following key projects:
 Projects and investments
 1
 Business categories
 2006
 2005
 2004
 (Rand millions)
  low-density polyethylene and polypropylene
  2,608
     191
    nd
  rd
   714
     38
     –
     –
    th
   –
   Capital projects of equity
 accounted investees
   1,734
     1,590
   1.
 The amounts include business development costs and our group’s share of capital expenditure of equity accounted jointventures.
   Financing activities
  usually short-term in nature and are met primarily from short-term banking facilities and the commercial paperprogram. Long-term capital expansion projects and acquisitions of businesses are financed by a combination offloating and fixed rate debt. This debt is usually in the measurement currency of the project or acquisition beingfinanced and repayment terms match the expected cash flow to be generated by the asset or business acquired.
   Change
 Change
 Change
 Change
 2006
 2005
 2006/2005
 2006/2005
 2004
 2005/2004
 2005/2004
 (Rand in millions)
 (%)
 (Rand in millions)
 (%)
  (3,660)
        (5,035)
        1,840
        R2,748 million in 2004. Our dividend distribution policy is to distribute increasing dividends on a regular basis,to the extent permitted by our earnings. In particular, we intend to distribute dividends, provided our annualattributable earnings represent a range of 2.5 to 3.5 times the amount distributed in the form of dividends. Theaverage rate of earnings to dividend distributions in the past five years was approximately 2.7 times. Ourdividend cover for 2006 of 2.3 is outside the target range, however, when measured against earnings fromcontinuing operations is 3.1, which is within the target range.


used to reduce our short-term borrowings in South Africa and assist in diversifying and extending the averagetenure of our portfolio. In addition we replaced specific asset based financing used to acquire Condea with groupdebt. This debt has reduced the value of assets pledged as security, as well as the negotiation of better interestrates and less onerous covenants.
 Capital resources
  treasury, cash management and borrowing activities are facilitated through Sasol Financing and Sasol FinancingInternational.
  long-term debt. This debt is normally financed in the same currency as the underlying project and repaymentterms are designed to match the expected cash flows to be generated by that project.
  2006
 2005
 (Rand in millions)
  11,211
   1,606
   442
   13,259
   (2,808)
   10,451
   investment program and the excellent results generated by existing operations over the last three years. Thisoperating performance has reduced our dependency on short-term borrowing facilities.
  (2005 – R34,219 million). Of these facilities R13,259 million (2005 – R15,559 million) has been utilized at year end.


Expiry Date
 Currency
 Facilities
 Utilization
 (Rand in millions)
 Uncommitted facilities
                  Committed facilities
           Debt arrangements
                 1
     Asset based finance
   1
       1
     Property finance leases
  1
     Other banking facilities and debt arrangements
     34,689
 13,259
 ComprisingLong-term debt, including current portion
      13,259
 1.
 Facilities held by these subsidiaries.
  Facilities
 Utilization
 (Rand in millions)
             5,679
 4,925


to fund short-term funding requirements in South Africa is our commercial paper program of R6 billion,normally at fixed interest rates. We had no exposure on the program at 30 June 2006.
   Debt profile
   Less than
 More than
 1 year
 1 to 2 years
 2 to 5 years
 5 years
 Total
 (Rand in millions)
        Covenants
    definitions agreed to between the parties derived from amounts published in the financial statements of Sasolprepared in terms of IFRS for any year and adjusted in terms of the agreed definitions.
  ratings and a global Baa1 rating. Standard and Poor’s affirmed the long-term foreign-currency rating as BBB+equivalent to Moody’s global Baa1 rating.
   5.C
 Research and development, patents and licenses
 Research and development
  Africa, which focuses on fundamental research while our decentralized divisions focus on applications. Thecentral research function has a full suite of state-of-the-art pilot plants to support both current and futuretechnology being developed.


5.D
 Trend information
    US$71.10/b to US$58.53/b on 22 September 2006 with a high of US$78.26/b and a low of US$57.89/b duringthat period. Given the current uncertain political environment the oil price has been volatile and this volatility isexpected to continue in the foreseeable future. As discussed above, a high oil price generally results in increasedprofitability for our group.
  R6.72 and R7.23 to the US dollar during July and August 2006, the rand weakened further reaching R7.76 perUS dollar at 29 September 2006 with a high of R7.76 per US dollar and a low of R6.72 per US dollar duringthat period. Whilst the exchange rate during the current year has been relatively less volatile than in previousyears we are unable to forecast whether this will continue in the foreseeable future.
 5.E
 Off-balance sheet items
   Guarantees
   2006
 Maximum
 Guarantee
 potential
 included in the
 Note
 amount
 balance sheet
 (Rand in millions)
                                            Sasol Limited has issued the following significant guarantees for the obligations of various of itssubsidiaries in respect of the GTL Ventures. These guarantees relate to the construction and funding ofOryx GTL Limited in Qatar and Escravos GTL in Nigeria, including inter alia:
  capped at US$343 million (R2,459 million) plus interest and costs subject to the project demonstrating aminimum level of sustained production over a continuous period of ninety days and catalyst deactivationwithin acceptable parameters for at least two hundred and seventy days, after commissioning. It isestimated that the project will be commissioned during the fourth quarter of the 2006 calendar year.


sale and purchase agreement (GSPA) entered into between Oryx GTL Limited, Qatar Petroleum andExxonMobil Middle East Gas Marketing Limited, by virtue of this subsidiary’s 49% shareholding inOryx GTL Limited. Sasol’s exposure is limited to the amount of US$123 million (approximately R884 million). In terms of the GSPA, Oryx GTL Limited is contractually committed to purchaseminimum volumes of gas from Qatar Petroleum and ExxonMobil Middle East Gas Marketing Limited ona take-or-pay basis. Should Oryx GTL terminate the GSPA prematurely, Sasol Limited’s wholly ownedsubsidiary will be obliged to take or pay for its 49% share of the contracted gas requirements. The termof the GSPA is 25 years from the date of commencement of operations. It is estimated that the projectwill be commissioned during the fourth quarter of the 2006 calendar year.
  required equity in respect of the investment in Oryx GTL Limited. Sasol’s equity contribution isestimated at US$160 million (R1,147 million). It is expected that the project will be commissionedduring the fourth quarter of the 2006 calendar year.
  partners, amounting to approximately US$31million (R225 million). An amount of R109 million hasbeen accrued in respect of this guarantee. The inter-company guarantee and liability has been eliminatedon consolidation.
  of Escravos GTL in Nigeria for the duration of the investment in Escravos GTL Limited to an amount of US$250 million (R1,793 million).
  investment in Sasol Chevron Holdings Limited, limited to an amount of US$ 250 million (R1,793 million). Sasol Chevron Holdings Limited is a joint venture between a wholly owned subsidiaryof Sasol Limited and Chevron Corporation.
   Guarantees issued to various financial institutions in respect of debt obligations of joint venture companiesaccounted for using the equity method. The total liability included on the balance sheet of the joint ventureis R848 million.
    Various performance guarantees issued by subsidiaries. An accrual of R238 million was recognized inrespect of certain guarantees.
       Product warranties
  course of business. These warranties typically provide that products sold will conform to specifications. Thegroup generally does not establish a liability for product warranty based on a percentage of turnover or otherformula. The group accrues a warranty liability on a transaction-specific basis depending on the individual factsand circumstances related to each sale. Both the liability and the annual expense related to product warrantiesare immaterial to the consolidated group financial statements.


5.F
 Tabular disclosure of contractual obligations
 Contractual obligations/commitments.
  Amount
 More
 Contractual obligations
 Total
 finance
 Within
 1 to 2
 2 to 3
 3 to 4
 4 to 5
 than
 (excluding capital
 amount
 charges
 1 year
 years
 years
 years
 years
 5 years
 expenditure)
 (Rand in millions)
                                                       Total
 16,862
 (4,734)
 4,051
 3,836
 1,570
 4,114
 1,228
 6,797
 Capital commitments.
   Capital expenditure
 2006
 (Rand in millions)
  28,060
  6,306
  34,366
  (20,500)
  13,866
  762
 Total operations
 14,628
    Total
 Within
 1 to 2
 2 to 5
 Over
 Contractual commitments
 amount
 1 year
 years
 years
 5 years
 (Rand in millions)
          expenditure in foreign currency (i.e. contracts contracted in a currency other than the rand) immediately uponcommitment of expenditure or upon approval of the project. See “Item 11 – Quantitative and qualitativedisclosure about market risk”.


ITEM 6.
 DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
 6.A
 Directors and senior management
  executive. Corporate governance structures and processes are continuously reviewed to reflect national andinternational best practice.
  of the SEC, the NYSE and legislation such as the Sarbanes-Oxley Act. In addition we have compared ourcorporate governance practices to those required to be applied by domestic US companies listed on the NYSEand have confirmed to the NYSE that we comply in all significant respects with such NYSE corporategovernance standards, except as disclosed in our annual report and on our website (www.sasol.com). We endorsethe principles of the South African Code of Corporate Practices and Conduct (SA Code) as recommended in theKing II report.
 The board of directors
  were executive directors. During the reporting year all the non-executive directors, with the exception of Messrs.Pieter Cox, Anshu Jain, Dr. Mandla Gantsho and Ms Hixonia Nyasulu, were considered to be independent inaccordance with the SA Code and the rules of the NYSE. However, the Board is of the view that all our non-executive directors bring independent judgment to bear on material decisions of the company.
  non-executive director. With effect from 1 January 2006 Mr. Pieter Cox became the chairman in place of Mr. Paul Kruger. Mr. Pat Davies took over the role of chief executive from Mr. Pieter Cox on 1 July 2005.
  Current
 Name
 Position
 Age
 Member since
 term expires
 1


Current
 Name
 Position
 Age
 Member since
 term expires
 1
                      1.
 Under our Articles of Association, one-third of the serving directors shall retire at the annual general meeting of thecompany or, if the total number of serving directors who shall retire does not constitute a multiple of three, the numberof directors who shall retire shall be the number, adjusted upwards, that is the closest to one-third. The number ofdirectors that will retire at the annual general meeting in future years can therefore not be determined accurately inadvance.
 Pieter Cox
 became our director in 1996. From 1997 to 2005, he served as chief executive of our group. He is also a directorof a number of major companies in the group. In 1993, he was appointed managing director and chief executiveof Polifin Limited. In May 1996, he became chief operating officer of Sasol Limited and served in this role priorto assuming the position of chief executive of Sasol. He received a Bachelor of Science Engineering(Metallurgy) degree in 1966 and a Bachelor of Science Engineering (Mining) degree in 1968 from theUniversity of the Witwatersrand, South Africa. He attended the Executive Program at Stanford Business Schoolin the United States in 1990. He received honorary doctorates from the University of the Free State, South Africaand the University of St Andrews, Scotland in 2006.
 Pat Davies
 director of several other companies in the group. He joined the group in 1975 and has been responsible forvarious portfolios, the most recent of which was the oil, gas and liquid fuels businesses, including SasolSynfuels, Sasol Petroleum International, Sasol Synfuels International, Sasol Oil, Sasol Gas and SasolTechnology. He was also responsible for the globalization of Sasol’s GTL technology. He received a Bachelor ofScience Engineering (Mechanical) from the University of Natal, South Africa in 1975 and attended theManagement Program at Harvard Business School in the United States in 1986.
 Trevor Munday
 from 1 July 2005 and was chief financial officer until he relinquished the position on 1 May 2006. He will retirefrom our Board at the end of December 2006. He joined the group in 1996 and has been responsible for investorrelations, planning, corporate affairs, brand management and Sasol’s chemical businesses. He will remainresponsible for our chemical businesses until 31 December 2006. He served as the managing director of PolifinLimited from 1996 to 2001 prior to its acquisition by us. He received a Bachelor of Commerce from NatalUniversity, South Africa in 1970.
 Elisabeth Bradley
 Wesco Investments Limited, Metair Investments Limited and the Winkler Hotel. She is also a director of severalother companies, including Standard Bank Group Limited, the Tongaat-Hulett Group Limited and AnglogoldAshanti Limited. She is deputy chairman of the South African Institute of International Affairs and chairman ofthe Centre for Development and Enterprise. She received her Bachelor of Science from the University of theFree State, South Africa in 1961 and a Master of Science from the University of London in 1964.
 Warren Clewlow
 Pretoria Portland Cement Company Limited. He is past chairman of the State President’s Advisory Council andwas awarded the Order of Meritorious Service, Gold Class, for service to South Africa. He became a charteredaccountant in 1959 and was awarded an honorary doctorate by the University of Natal in 1990.


Brian Connellan
 Nampak Limited and from 2000 to 2001 as non-executive chairman of Nampak. He was a director of Nampakuntil September 2005. He is also a director of several other companies, including Tiger Brands Limited, ABSAGroup Limited, Reunert Limited, Illovo Sugar Limited and Oceana Group Limited. He is past councilor of theSouth African Foundation, The Corporate Forum and The Institute of Directors and a contributor to both KingReports on Corporate Governance in South Africa. He received his Certificate in Theory of Accountancy fromWitwatersrand University, South Africa in 1961 and became a chartered accountant in 1963.
 Henk Dijkgraaf
 Gasunie Trade and Supply BV and held various positions in the Royal Dutch Shell group between 1972 and2003 in the Netherlands, Malaysia, Gabon, Syria and the United Kingdom including the positions of President,Shell Nederland BV, Director, Shell Exploration and Production and Chief Executive, Gas, Power and Coal. Heis a member of the Board of the Royal Tropical Institute KIT and deputy chairman of the Netherlands Institutefor the Near East NINO. He obtained a Master of Science (Mining Engineering) from Delft University in 1972and attended the Senior Executive Program at the Massachusetts Institute of Technology in the United States in1987.
 Nolitha Fakude
 Resources for the group as well as stakeholder relationships and transformation. She is also a director of severalother companies in the group. Before joining Sasol, she was a member of the Group Executive Committee atNedbank Group Limited. She is also a non-executive director of BMF Investments (Pty) Limited, the majorityshareholder of the Black Management Forum, of which she is the president. She holds Bachelor of Arts andHonors degrees in Psychology from the University of Fort Hare and attended the Senior Executive Program atHarvard Business School in the United States in 1999.
 Mandla Gantsho
 Private Sector & Regional Integration of the African Development Bank, prior to which he was chief executiveofficer and managing director of the Development Bank of Southern Africa. Between 1999 and 2000 he wasseconded as advisor to a vice-president of the International Finance Corporation in Washington. He obtained aBachelor of Commerce from the University of Transkei in 1983 and a Certificate in Accountancy Theory and aBachelor of Commerce (with Honors) in Financial Management from the University of Cape Town, South Africain 1985 and 1986, respectively. He became a chartered accountant in 1987. He also obtained a Masters inScience from The George Washington University in 2002 and a PhD from the University of Pretoria, SouthAfrica in 2006.
 Anshu Jain
 of Deutsche Bank AG since 2002. He is currently the managing director and head of global markets at DeutscheBank. Prior to this appointment he was a managing director of Merrill Lynch in New York. He obtained aBachelor of Arts (with Honors) in economics from Delhi University in 1983 and a Master of BusinessAdministration in Finance from the University of Massachusetts in 1985.
 Imogen Mkhize
 Holdings Limited, Illovo Sugar Limited, Datacentrix Holdings Limited, Allan Gray South Africa Limited andVodafone Investments (SA) and serves on the Financial Markets Advisory Board. She was the chief executiveofficer of the 18th World Petroleum Congress from June 2003 to July 2006. Previously, she was the executivechairman of the Zitek Group and the managing director of Lucent Technologies South Africa. In 2001, the WorldEconomic Forum recognized her as a Global Leader for Tomorrow. She obtained a Bachelor in Science inInformation Systems from Rhodes University in 1984 and a Masters in Business Administration from HarvardBusiness School in 1995.
 Benny Mokaba
 including Sasol Mining, Sasol Synfuels, Sasol Oil, Sasol Gas and Sasol Secunda Shared Services. He is also adirector of several other companies in the group. Before joining Sasol, he was the executive chairman andregional vice president of Shell Southern Africa. He also worked for, among others, the Development Bank of


Southern Africa. He was acting director general in the national department of welfare, headed Steinmüller Africa(which was subsequently acquired by Deutsche Babcock) and was chairman of Siemens Southern Africa. Heobtained a Masters in Social Work from Fort Hare University, South Africa in 1988 and completed a doctorate inPublic Policy and Economics on a Fulbright Scholarship at Brandeis University in Waltham, Massachusetts inthe United States in 1993. He completed the Advanced Executive Programme at the University of South Africain 1997.
 Sam Montsi
 director of Independent News and Media (SA) (Pty) Limited, Business Arts South Africa and all companies inwhich Montsi Investments has invested. He received a Bachelor of Arts in Development Economics from theUniversity of Botswana, Lesotho and Swaziland in 1970 and a Masters in Development Economics fromWilliams College in Massachusetts in the United States in 1973.
 Hixonia Nyasulu
 Investments (Pty) Limited. She is also a director of Anglo Platinum Limited, Defy (Pty) Limited, the Tongaat-Hulett Group Limited and chairperson of the Development Fund of the Development Bank of Southern Africa.She has a Bachelor of Arts in Social Work and a Bachelor of Arts (Honors) degree in Psychology. She also holdsan Executive Leadership Development Programme certificate from the Arthur D Little Management EducationInstitute (Cambridge, Massachusetts) and attended the International Programme for Board Members at theInstitute of Management Development in Lausanne, Switzerland in 1997.
 Christine Ramon
 several other companies in the group. Before joining Sasol, she was the chief executive of Johnnic HoldingsLimited, prior to which she held several senior positions including acting chief operating officer and financialdirector. She started her career with Coopers & Lybrand and progressed to audit manager at their offices inSouth Africa and Italy. During this time she was, amongst other things, seconded to the Independent ElectoralCommission as deputy finance director. She is also a director of Transnet Limited. She obtained a Bachelor ofAccounting Science and Honors degree from the University of South Africa in 1988 and 1989 respectively andbecame a chartered accountant in 1990. She attended the Senior Executive Program at Harvard Business Schoolin the United States in 1999.
 Jürgen Schrempp
 management of DaimlerChrysler AG and a director of Vodafone Group, Compagnie Financière Richemont SAand non-executive chairman of Daimler Chrysler South Africa. He is founding chairman of the Southern AfricaInitiative of German Business (SAFRI), and a member of the South African President’s International InvestmentCouncil. He is chairman emeritus of the Global Business Coalition on HIV/AIDS and Honorary Consul-Generalin Germany of the Republic of South Africa. He has received numerous national and international awards,including the Order of Good Hope, South Africa’s highest civilian award. He holds a Professorship of theFederal State of Baden-Württemberg, Germany and Honorary Doctorates from the University of Graz, Austriaand the University of Stellenbosch, South Africa.
 Chief executive
  strategic direction of the company. Our Board may from time to time confer upon our chief executive any oftheir powers as they deem fit, and may confer, recall, revoke, vary or alter these powers.


Senior management
   Name
 Position and areas of responsibility
          Group general manager, responsible for operations excellence, includinghealth, safety and the environment, integration across business units andskills development.
  Executive director responsible for group human resources, key stakeholderrelationships and transformation.
  Group general manager and company secretary, responsible for legal,procurement and supply, insurance, risk management and internal auditfunctions.
  Executive director responsible for the energy businesses in South Africa,including Sasol Mining, Sasol Synfuels, Sasol Oil, Sasol Gas and SasolSecunda Shared Services.
  Group general manager currently handing over responsibility for governmentrelations to Ms Fakude in anticipation of his retirement at the end ofDecember 2006.
  Group general manager responsible for Sasol Petroleum International, SasolSynfuels International and Sasol Chevron.
  Group general manager responsible for Sasol Mining, the establishment ofan organizational approach suitable for Sasol’s future, Sasol Secunda SharedServices, and group information management.
  Group general manager, responsible for strategic projects such as our futureblack economic empowerment (BEE) equity ownership strategy and ourfuture joint venture business and partnership model, particularly for ourenvisaged offshore CTL and GTL ventures.
 Hannes Botha
 Technology since August 2006, prior to which he was responsible for Sasol’s liquid fuel business, gas businessand Sasol Synfuels. He joined Sasol in 1981 as a divisional manager and after acting as general managerresponsible for manufacturing facilities and engineering activities of various plants, was promoted to managingdirector of Sasol Synfuels in 1993 and the managing director of Sasol Oil in 1998. He is a director of severalcompanies in the group. He obtained his Bachelor of Science (Electrical Engineering) in 1970 from theUniversity of Pretoria, South Africa and in 1980 his Master of Business Leadership from the University of SouthAfrica.
 Bram de Klerk
 excellence, including health, safety and the environment, integration and skills development since August 2006.Prior to that he was responsible for Sasol Technology and safety, health and the environment. He was themanaging director of Sasol Synfuels from 1998 until 2003 and was appointed a director of Sasol Technology inSeptember 2003. He joined Sasol in 1973 as an assistant design engineer and became managing director of


National Petroleum Refiners of SA (Pty) Limited in 1993. He is a director of several companies in the Sasolgroup. He received a Bachelor of Science (Mechanical Engineering) from the University of Pretoria, SouthAfrica in 1973 and a Master of Business Administration from the University of Potchefstroom, South Africa in 1978.
 Nereus Joubert
 since 2003. Currently he is responsible for the group company secretarial, legal, procurement and supply,insurance, risk management and internal audit functions and serves on the boards of several of the companies ofthe Sasol group. He obtained a Bachelor of Laws degree, a post-graduate Bachelor of Laws degree and a Doctorof Laws degree from Rand Afrikaans University, South Africa (now the University of Johannesburg) in 1978,1980 and 1985 respectively and attended the Advanced Management Program at Harvard Business School in theUnited States in 2000. He also conducted post doctoral research at the University of Saarland, Germany as anAlexander Von Humboldt scholar during 1989 and 1993. Prior to joining the company, he was a professor of lawand vice dean of the faculty of law of the Rand Afrikaans University, South Africa (now the University ofJohannesburg).
 Max Sisulu
 for government relations to Ms. Fakude in anticipation of his retirement at the end of December 2006. He is acouncil member of the Human Sciences Research Council and a member of the recently established NationalEnvironment Advisory Forum of the Department of Environmental Affairs and Tourism. He is a non-executivedirector of African Rainbow Minerals Limited, Imperial Holdings Limited and the Resolve Group, non-executivechairman of Ukhamba Holdings as well as a director of several companies in the Sasol group. He obtained aMaster of Arts in Political Economy from the Plekhanov Institute in Moscow in 1969 and a Masters of Arts inPublic Administration from the Kennedy School for Government at Harvard University in the United States in1993. He was the recipient of the Govan Mbeki Fellowship at the University of Amsterdam, Netherlands, wherehe completed and published an extended research paper on the micro-electronics industry in South Africa from1984 to 1985.
 Lean Strauss
 International, Sasol Petroleum International and Sasol Chevron. He joined Sasol in 1982 as an investment officerof the Sasol Pension Fund. He spent most of his career with Sasol Oil and held the positions of general manager,manufacturing and supply as well as general manager, marketing. He was appointed general manager of SasolGas in 1997 and managing director of Sasol Nitro in 2002. He is also a director of several companies in theSasol group. He obtained Bachelor of Commerce and Honors degrees from the University of Stellenbosch priorto joining Sasol and a Masters of Commerce degree in Business Management from the Rand AfrikaansUniversity (now the University of Johannesburg) in 1986.
 Jannie van der Westhuizen
 division, the establishment of an organizational approach suitable for Sasol’s future, Sasol Secunda SharedServices, and group information management, previous to which he was the general manager responsible forgroup human resources and mining. He joined Sasol Mining in 1986 and was the general manager ofBrandspruit Colliery, Sasol Mining when he left in 1993 to join Eskom as Fuel and Water Manager. In 1996, hejoined Organization Development International as the Director and Head of Mining Practice and in April 1997rejoined Sasol as managing director, Sasol Mining. He is a director of several companies in the group. Heobtained his Bachelor of Science (Industrial Engineering) in 1972, a Master of Business Administration in 1975and in 1979 a Post Graduate Diploma in Mining (Cum Laude) from the University of Pretoria, South Africa. Heattended the Executive Management Program in 1991 at the Pennsylvania State University, United States and in2002, attended the Stanford Executive Program at Stanford University, United States.
 Rynhardt van Rooyen
 black economic empowerment (BEE) equity ownership strategy and our future joint venture business andpartnership model, particularly for our envisaged offshore CTL and GTL ventures. Prior to this he wasresponsible for the group financial function. He joined Sasol in 1977 as a senior accounting officer. He is adirector of several companies in the group. He obtained a Bachelor of Commerce from the University of theOrange Free State, South Africa in 1971 and a Bachelor of Accounting Science and Honors degree from the


University of South Africa in 1975. He became a chartered accountant in 1976 and is registered with the SouthAfrican Institute of Chartered Accountants. In 1986, he attended the Executive Management Program and in1994, the Strategic Purchasing Management Program at the Pennsylvania State University in the United States.
  6.B
 Compensation
 Compensation of senior management under the JSE Listings Requirements.
      Compensation
  Annual
 Retirement
 Other
 Total
  Salary incentives
 1
 funding
 benefits
 2006
  Executive directors
 R’000
 R’000
 R’000
 R’000
 R’000
       7,808
       2,692
 –
      979
 –
      6,894
       510
 –
      5,730
       n/a
  Total
     24,613
  1.
 Refers to incentives awarded, based on the group results for the 2005 financial year and includes the once-off sign-onbonus received by Ms Fakude and Dr Mokaba.
  Vehicle
 insurance
 Total
 Vehicle
 Medical
 fringe
 Security
 Other
 other
 benefits
 benefits
 benefits
 benefits
 benefits
 benefits
 Executive directors
 R’000
 R’000
 R’000
 R’000
 R’000
 R’000
       388
       246
       48
       400
       48
       1
 238
 1.
 Included under other benefits are travel benefits (R98,585), leave encashment on retirement (R117,962) and retirementfunding in compliance to retirement fund rules up to actual retirement date (R1,300), in respect of the period duringwhich Mr. Cox was an executive director.


Annual
 Retirement
 Other
 Total
  Salary incentives
 1
 funding
 benefits
 2006
  Group executive committee
 R’000
 R’000
 R’000
 R’000
 R’000
       23,356
     1.
 Refers to incentives awarded, based on the company results for the 2005 financial year.
  Share
 Board
 incentive
 meeting
 Paid by
 Committee
 trustee
 Total
 Total
 fees
 subsidiaries
 fees
 fees
 2006
 2005
 Non-executive directors
 R’000
 R’000
 R’000
 R’000
 R’000
 R’000
      408
       509
       651
   1
     2,479
 –
      364
   2
     519
       316
       553
   3
     26
 –
  2
     601
   4
     1,713
   5
     258
   6
     n/a
   7
     n/a
  Total
     8,397
  1.
 Deputy chairman of the board, thereafter appointed chairman from 1 January 2006
 2.
 Fees paid in US dollars. Rand equivalent of US$82,500 at actual exchange rates.
 3.
 Appointed as a non-executive director of Sasol Limited with effect from 1 June 2006.
 4.
 Retired as a non-executive director of Sasol Limited with effect from 1 January 2006.
 5.
 Retired as a non-executive director of Sasol Limited with effect from 2 December 2005.
 6.
 Mr. Fourie retired as non-executive director of Sasol Limited with effect from 1 January 2005.
 7.
 Mr. Pfeiffer resigned as non-executive director of Sasol Limited with effect from 31 October 2004.
 Directors’ service contracts
    extend his or her term. A non-executive director is required to retire from the board at the end of the year inwhich the director turns 70, unless the board, subject to the articles of association and by unanimous resolutionon a year-to-year basis, extends the director’s term of office until the year in which he or she turns 73.


6.C
 Board practices
 The board of directors
  Appointment, retirement and re-election of directors
  person as a director, either to fill a vacancy or as an addition to the Board, provided that the total number ofdirectors does not at any time exceed the maximum of 16 directors of which a maximum of five may beexecutive directors. Directors appointed by the Board in this manner are required to retire at the next annualgeneral meeting following their appointment, but are eligible for re-election. There is no requirement in theArticles of Association that directors must hold qualifying shares. If the number of persons nominated asdirectors does not exceed the number of vacancies available, then the nominated directors are deemed to havebeen duly elected.
  number of serving directors who shall retire does not constitute a multiple of three, the number of directors whoshall retire shall be the number, adjusted upwards, that is the closest to one-third.
  27 October 1997 shall retire five years after his initial appointment. Directors who have retired in this mannerare eligible for automatic re-election by the shareholders if they were re-appointed after retirement by either theBoard or the shareholders.
 Board procedures and matters
        directors in the securities of the company, declarations of conflicts of interest, Board meetingdocumentation and procedures and the nomination, appointment, induction, training and performanceevaluation of directors and members of Board committees.
  Board meets at least four times a year. It approves the strategic direction of the company defined by the chiefexecutive, maintains full and effective control over the company and monitors the executive managementthrough a structured approach to reporting and accountability. However, the company adopts a decentralizedapproach to the day-to-day running of the businesses of the group.
  bring independent, experienced judgment to bear on issues of strategy, performance and resources, including keyappointments, standards of conduct, protection of stakeholders’ interests and the setting of company policy.Considerations of gender and racial diversity, as well as diversity in respect of business, geographic andacademic backgrounds, are taken into account when appointments to the Board are considered.


accordance with the South African Companies Act, and who is responsible to the Board for ensuring the properadministration of Board proceedings. The company secretary also provides guidance to the directors inconnection with their legal duties and responsibilities and the manner in which such duties and responsibilities,including not dealing in the company’s securities during restricted periods, should be discharged. A report ondirectors’ dealings in the company’s securities is tabled at each Board meeting and publicly disclosed inaccordance with the applicable JSE and NYSE listings requirements.
   Board committees
  accountable to the Board and operate on the basis of specific charters. The charters of the Audit Committee, theCompensation Committee, the Nomination and Governance Committee and the Risk and Safety, Health andEnvironment Committee (Risk and SHE Committee) form part of the Board Charter and are available on ourwebsite (www.sasol.com).
  structures to ensure the maintenance of high standards and best practice with respect to corporate governanceand internal control. We retain decision-making involvement in respect of a defined list of material matters inrespect of the businesses of our subsidiaries. This list includes matters such as the appointment of directors,strategy charters, large capital expenditure and mergers, acquisitions and disposals. The boards of our mainsubsidiaries and divisions are constituted in such a way that a majority of directors of each main subsidiary ordivisional board are non-executive directors of the subsidiary or division.
  The attendance of the Chairman at our main subsidiary board meetings provides an essential link between ourbusinesses and the non-executive directors of our Board.
 The Compensation Committee
  four of whom are independent non-executive directors. As of 30 June 2006, its members were Pieter Cox(chairman), Elisabeth Bradley, Warren Clewlow, Brian Connellan and Sam Montsi. The CompensationCommittee meets at least twice a year to discuss and determine the group’s remuneration policy and strategy.
          that will attract, retain, motivate and reward employees with the skills required for us to achieve our businessgoals and to base remuneration on personal and company performance in accordance with competitive marketpractices.


The Nomination and Governance Committee
  of five directors, three of whom are independent non-executive directors. The members of this committee arePieter Cox (chairman), Elisabeth Bradley, Warren Clewlow, Sam Montsi and Hixonia Nyasulu. The Nominationand Governance Committee meets at least twice a year.
  recommendations to the Board on the general corporate governance framework of the group, the compositionand performance of the Board, its committees, individual directors and committee members, legal complianceand the company’s ethics policy and programs.
 The Audit Committee
  monitoring and control. The Audit Committee meets at least three times a year. All the members of the AuditCommittee are independent non-executive directors, financially literate and have extensive Audit Committeeexperience. They are Brian Connellan (chairman), Warren Clewlow and Jürgen Schrempp. Mr. Warren Clewlowhas been determined by the Board as the Audit Committee financial expert within the meaning of the Sarbanes-Oxley Act.
      requirements to the Audit Committee to perform the above functions. In line with these requirements, the AuditCommittee has, among other things, determined which categories of non-audit services provided by the externalauditors should be pre-approved by the Audit Committee and which may be approved by a designated memberof the Audit Committee.
  consider risk assessment and management, to review the audit plans of the external auditors, and to reviewaccounting, auditing, financial reporting, corporate governance and compliance matters. The Audit Committeeapproves the external auditors’ engagement letter on the terms, nature and scope of the audit function and theaudit fee. The internal audit charter, internal audit plan and internal audit conclusions are similarly reviewed andapproved by the Audit Committee. Interim and annual results of the group and trading statements of thecompany are reviewed by the Audit Committee before publication. The Audit Committee usually makesrecommendations and refers matters for information or approval to the Board.
  external and internal audit functions and that the independence of the internal and external auditors is not in anyway impaired or compromised.
 The Risk and Safety, Health and Environment Committee
  executive directors, Pat Davies, Nolitha Fakude, Benny Mokaba, Trevor Munday, Christine Ramon, Sam Montsi(chairman), Brian Connellan, Pieter Cox and Imogen Mkhize. The committee meets at least twice a year. Thefunctions of the committee include reviewing and assessing the integrity of our risk management processincluding effective management of risk policies and strategies in respect of safety, health and environmentalmatters.


The GEC
  including financial, strategic, operational, governance, risk and functional issues. Its focus is on the formulationof our group strategy and policy and the alignment of group initiatives and activities. The GEC meets weeklyand reports directly to our Board.
  The committee of managing directors (CMD)
  replaced the Southern African Executive Committee and International Executive Committee with effect from 17 August 2005. The committee of managing directors consists of the managing directors of Sasol’s mostsignificant businesses. The focus of the committee is on common material issues pertaining to Sasol’sbusinesses. The committee’s main functions include alignment of Sasol’s businesses with the group mission,vision, strategies, targets and policies and consideration of material business, strategic, financial and functionalissues. The committee meets once a month and reports to the GEC.
 Internal control and risk management
 Internal controls
  provide reasonable assurance against material misstatement. The group maintains systems of internal financialcontrols that are designed to provide assurance regarding the maintenance of proper accounting records and thereliability of financial information used within the group and for publication. These systems contain self-monitoring mechanisms and controls, and actions are taken to correct deficiencies as they are identified. Theinternal control systems include:
      formalized and are assessed periodically by management and our Board for effectiveness. For more informationon disclosure controls and internal controls over financial reporting see “Item 15. – Controls and procedures”.With effect from 1 July 2006, we are required to comply with the requirements of Section 404 of the Sarbanes-Oxley Act. We have concluded our project to comprehensively document and test the internal controlenvironment to conform to the Section 404 requirements. During 2006 a limited scope review of our testing andreporting process was performed by our external auditors. Both our testing process and the review by ourexternal auditors indicate that our internal financial reporting controls are operating effectively. Although someaspects of internal control were identified for improvement, we do not believe that any of these represent asignificant risk to our business. We expect all these internal control weaknesses to be remediated before the endof the 2006 calendar year.


Internal audit function
     ongoing basis to determine their efficiency and effectiveness and developing recommendations forimprovement.
       Committee and management. Audit plans are updated as appropriate to ensure that they are responsive tochanges in the business. Comprehensive findings are reported to the Risk and SHE Committee and the AuditCommittee at each of their scheduled meetings.
                  Risk management


components of the process which need to be further developed and embedded and programs are in place toaddress these.
          control audits of all our plants and operations using recognized international procedures and standards. We participate in an international insurance program that provides, at competitive costs, insurance cover forlosses above tolerable levels.
  these plans are subject to regular testing and, in other cases, are subjected to ongoing tests to ensure theirrobustness and reliability.
  Sustainability reporting
  environmental policies and practices to the Board and, from time to time, to the group’s stakeholders. A comprehensive sustainability report is published annually and is available on our website (www.sasol.com).
 6.D
 Employees
  strategic goals. The six Sasol values – customer focus, winning with people, safety, excellence in all we do,continuous improvement and integrityhave been rolled out to all of our employees. We continue to focus to fullyintegrate behavior in accordance with our values in our performance management system.
 Our human resources strategy
  with, and more effective support of, our business strategy. This is part of a wider commitment to make Sasol anemployer of choice while pursuing growth opportunities. Because of our strong presence in South Africa, weremain sensitive to national socioeconomic transformation issues and continue to progress our employmentequity (EE) and workplace transformation initiatives.


Workforce Composition
 1 &  2
 Region
 2006
 2005
 2004
                 Total
 27,933
 26,600
 27,066
 Business
 2006
 2005
 2004
 Continuing operations:Sasol Mining
    Sasol Synfuels
    Sasol Oil
    Sasol Gas
    Sasol Synfuels International
    Sasol Polymers
    Sasol Solvents
    Other
    Total
 27,933
 26,600
 27,066
 1.
 Includes the workforce of our incorporated joint ventures accounted for under the equity method for US GAAP.
 2.
 Excludes the workforce of Sasol Olefins & Surfactants of approximately 3,337 at 30 June 2006.
 Maintaining a skilled and stable workforce
  the application of accelerated development programs for our employees. In South Africa we invested more thanR113 million in employee training and development. This investment includes in-house technical training, andself-learning centres. An additional R25 million was invested in 400 undergraduate and 60 postgraduatebursaries, with emphasis on developing scientific, engineering and technological skills.
  businesses. We approved an enhanced strategy aimed at attracting and retaining top talent. This integratedapproach allows us to identify and develop high-caliber leadership, and fill critical and new positions quicklyand with confidence. Our strategic approach to planning HR allows us to anticipate future talent needs and todevelop talent pools of sufficient depth and experience to meet those needs. We were recently rated among theten best companies to work for in South Africa.
   Promoting workplace equity and diversity
  with South Africa’s Employment Equity Act. People from designated groups – Africans, Coloreds and Indians,women and people with disabilities – comprise 64.9% of our South African workforce. At year end, people fromdesignated groups held 43% of Sasol managerial, professional and supervisory posts. This is an improvement onthe 39% reported a year ago. We are targeting to increase this figure to 47% by 2007 and 50% by 2008.


achieving targets. We endeavor to nurture workplaces that are open, transparent and free from all forms ofdiscrimination. We also promote employee equity and diversity in all the countries in which we operate inharmony with global best practices.
 Encouraging positive labor relations
  of our employees in South Africa belong to unions. We experienced industrial action at only one operation, atSecunda, which led to 900 lost employee days over three working days.
  constructive dialogue. These forums discuss wages, conditions of employment, health and safety, training anddevelopment, community care and HIV/Aids, among other important issues. All representative unions andpensioners are represented on our medical scheme board and senior employees serve on the boards of unionretirement funds.
 Promoting employee well-being
  maintaining a healthy workforce. Focusing on the psycho-social risks of our employees and their dependants, theEAP provides confidential, professional consultation on any personal problem at no cost to employees.Employee satisfaction is tracked every two years through an independent external attitude survey of employeesand management. The results of the survey are benchmarked against similar global companies.
 HIV/Aids challenge in our South African operations
  Sasol HIV/Aids Response Programme (SHARP) in September 2002. This initiative – which involved input frombusiness, trade union, community representatives and independent experts – is an integrated approach focused onreducing the rate of infection throughout the group, and extending the quality of life of infected employeesthrough the provision of managed healthcare. In developing SHARP, an intensive group-wide risk assessmentwas undertaken to understand the impact of HIV/Aids on our operations and communities.
  committee program reviews are tabled at Sasol board meetings. Our chief executive serves as the groupchampion, with the managing directors of each business unit acting as business unit champions. Each Sasolbusiness site has a dedicated SHARP task team responsible for implementing and sustaining a site-specificresponse team.


access to healthcare options and a critical component of promoting behavioral change. As a result of ourcollaborative approach, we have had one of the highest uptakes for VCT in South Africa: 82% by year end forour South African operations. This compares with a rate of between 50% and 60% that is typical among mostcorporate programs. To date, about 7% of our tested South African employees have tested HIV-positive, which iswell below our estimated actuarial prevalence rate of 19%.
  training programs in our South African businesses. In the year ahead we will be extending our activities to coverour service providers and our franchise network of fuel retailers. Through this initiative we will provide trainingand awareness programs, as well as a referral network for VCT and health care services, to 300 franchisees and5,000 forecourt employees. We are also working with the Government of Mpumalanga Province and a nongovernmental organization (NGO) to identify opportunities to improve the level of service at one of theprovincial hospitals that provides services to many of our employees.
   Occupational health and safety
  with seventeen fatalities in 2005 and nine in our 2004 financial year. Our goal remains zero fatalities. Our fatalaccident rate (calculated as the number of employees and service providers per 100 million working hours) was2.57 compared with 11.31 in 2005. The steady reduction in our fatal accident rate is mainly attributable to theintensified focus on the implementation of our safety improvement plan, which was developed in response to theseries of incidents in 2004. In early 2006, DuPont undertook a comprehensive follow-up review of theimplementation of safety measures in selected South African operations.
  aimed at ensuring safety remains our first priority and a core value. The effectiveness of our safety improvementplan was demonstrated by the improvement in our safety record. By 30 June 2006, we achieved a RCR of 0.68.This compares with 1.23 in 2005 and 1.08 in 2004. Although this is an improvement, we did not reach the 0.5 group target we set for achievement by July 2006.


6.E
 Share ownership
 Shareholdings of directors and officers
  2006
 2005
 Number
 Total
 Number
 Total
 Number
 of share
 beneficial
 Number
 of share
 beneficial
 Beneficial shareholdings
 of shares
 options
 1
 shareholding
 of shares
 options
 1
 shareholding
 Executive directorsPat Davies
              Non-executive directorsElisabeth Bradley
                                          Total
 557,304
 465,800
 1,023,104
    1.
 Including share options which have vested or which vest within sixty days of 30 June.
 2006
 2005
 Number
 Total
 Number
 Total
 Number
 of share
 beneficial
 Number
 of share
 beneficial
 Beneficial shareholdings
 of shares
 options
 1
 shareholding
 of shares
 options
 1
 shareholding
 Group executive committee
 1
 39,461
 160,600
 200,061
    1.
 Excluding the executive directors disclosed separately in the table.
 Share ownership of senior managers under the JSE Listings Requirements
  than 1% of the outstanding share capital of the company. We are not required to disclose share ownership ofindividual senior managers in the share capital of the company.
 Our Share Incentive Scheme
  employees, including executive directors. Non-executive directors received a once-off allocation of share optionsin 2000. The non-executive directors at the time were granted 25,000 shares each, 12,500 vesting after two yearsand 12,500 vesting after four years from the date of the grant. The scheme is offered to approximately 1,200 ofour most senior employees and includes an option to buy our shares at a price equal to their closing price on themost recent trading day on the JSE prior to the grant date. The value of the shares offered to each employee isbased on a multiple of the employee’s total cash remuneration and occupation level. Should an employee acceptthe offer, he will be entitled to take up a maximum of one-third of the shares after two years, two-thirds of theshares after four years and the full allocation after six years from acceptance. A share option shall lapse, if,among other reasons:


190
 On retirement the options vest immediately and the nine year expiry period remains unchanged. On
 resignation, share options which have not yet vested will lapse unless the board decides otherwise and shareoptions which have vested may be taken up before the last day of service.
 The Sasol Share Trust allocates share options to employees, annually, at the instruction of our Board and
 our Compensation Committee.
 The following tables provide the number of share options granted to our executive directors and GEC
 through our Share Incentive Scheme:
 Share options granted – directors
 Balance at
 Granted
 Average
 Granted on
 Average
 Share
 Balance
 beginning
 on 8 July
 offer price 14 September offer price
 options
 at end
 of year
 2005
 per share
 2005
 per share
 exercised*
 of year
 (number)
 (number)
 (Rand)
 (number)
 (Rand)
 (number)
 (number)
 Executive directorsPat Davies
       691,600
    1
    121,900
        545,900
 Non-executive directorsWarren Clewlow
     25,000
  2
     202,700
       Total
     1,587100
      Share options granted – group executive committee
 Balance at
 Granted
 Average
 Granted on
 Average
 Share
 Balance
 beginning
 on 8 July
 offer price 14 September offer price
 options
 at end
 of year
 2005
 per share
 2005
 per share
 exercised*
 of year
 (number)
 (number)
 (Rand)
 (number)
 (Rand)
 (number)
 (number)
 Group executive
 committee
 1 & 2
             Includes share options issued to individuals during the years before they became members of the group executivecommittee.


Share options exercised * – directors
   Average
 Gain on exercise of
 Share
 offer
 Market
 share options
 options
 price per
 price per
 Exercise dates
 exercised
 share
 share
 2006
 2005
 (number)
 (Rand)
 (Rand)
 R’000
 R’000
 Executive directors
  7,670
      2,188
     1,048
     2,134
     1,696
     604
  8,069
      1,698
     3,862
     1,203
     1,306
 Non-executive directors
          1
 64,272
      13,575
  2
    3,858
  2
    9,080
  2
    6,472
  2
    16,517
  2
    7,374
  2
    7,396
           2
    4,409
 –
         Total
  84,420
  *
 Exercise in the context of this table means the implementation of the share option.
 1.
 The share options implemented were granted to Mr. Cox when he was an executive director.
 2.
 The shares were retained by the director after the implementation of the share option. The gain on the implementationof these shares options was determined using the closing share price on the date of implementation. These holdingshave been disclosed in the beneficial shareholding table.


Share options exercised * – group executive committee
 Gain on exercise
 of share options
 Share options
 exercised
 2006
 2005
 (number)
 R’000
 R’000
 Group executive committee
 1 & 2
  29,223
  *
 Exercise in the context of this table means the implementation of the share option.
 1.
 Excluding the executive directors disclosed separately in the table above.
 2.
 Included in the total share options implemented are the gains on the implementation of 35,800 share options on whichthe shares have been retained by the member. A gain of R5,782,467 on the implementation of these share options wasdetermined using the closing share price on the date of implementation.
  More
 Already
 Within
 1 to 2
 2 to 5
 than
 vested
 1 year
 years
 years
 5 years
 Total
 (number)
 Executive directorsPat Davies
      644,400
       121,900
       512,200
 Non-executive directorsWarren Clewlow
      25,000
  1
      202,700
 Total
      1,506,200
 1.
 The share options were granted to Mr. P V Cox when he was an executive director.
 More
 Already
 Within
 1 to 2
 2 to 5
 than
 vested
 1 year
 years
 years
 5 years
 Total
 (number)
 Group executive committee
 1
       824,800
 1.
 Excluding the executive directors disclosed separately in the table above.


ITEM 7.
 MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
 7.A
 Major shareholders
  including treasury shares of 60,111,477 with no par value. At a general meeting held on 3 October 2006,shareholders approved that we acquire 60,111,477 Sasol Limited shares held by our subsidiary, Sasol InvestmentCompany (Pty) Limited. These shares were cancelled on 10 October 2006. Except for the related transactioncosts, the repurchase and cancellation of these shares had no effect on the consolidated financial position of thegroup. To the best of our knowledge, Sasol Limited is not directly or indirectly owned or controlled by anothercorporation or the government of South Africa or any other government. Our management believes that no singleperson or entity holds a controlling interest in our share capital.
   Number of shares
 % of shares
     1
      1.
 A wholly owned subsidiary of Sasol Limited. As a result of our share repurchase program, Sasol Investment Company(Pty) Limited held the shares as treasury stock on which no dividends are paid outside the group and no voting rightsare exercised. These shares were repurchased by Sasol Limited and cancelled on 10 October 2006.
  holders are managed by various fund managers and that, as at 25 August 2006, the following funds managerswere responsible for managing 2% or more of the share capital of Sasol Limited.
 Number of shares
 % of shares
  2
                        2.
 The Public Investment Corporation Limited is the beneficial owner of the shares held by PIC Equities and this nomineeshareholding is included in the 94,158,063 shares held by the Public Investment Corporation Limited reflected in thetable of beneficial shareholdings in excess of 5%.
   form of ADRs. On the same date, 378 record holders in the United States held approximately 22% of our issuedshare capital in the form of either shares or ADRs.
 7.B
 Related party transactions
  nor are there proposed to be any material transactions at present to which we or any of our subsidiaries are orwere a party and in which any executive or independent director, or 10% shareholder, or any relative or spousethereof or any relative of such spouse, who shared a home with this person, or who is a director or executiveofficer of any parent or subsidiary of ours, had or is to have a direct or indirect material interest. Furthermore,


during our three most recent years, there has been no, and at 30 June 2006 there was no, outstandingindebtedness to us or any of our subsidiaries owed by any of our executive or independent directors or anyassociate thereof.
  sale transactions with associates, joint ventures and certain other related parties. The effect of these transactionsis included in the financial performance and results of the group. Terms and conditions are determined on anarm’s length basis.
  30 June 2006
 30 June 2005
 30 June 2004
 (Rand in millions)
 Sales and services rendered to related parties– Third parties
            Total
 2,120
 1,650
 932
 Purchases from related parties– Third parties
            Total
 1,091
 1,052
 1,155
   7.C
 Interests of experts and counsel


ITEM 8.
 FINANCIAL INFORMATION
 8.A
 Consolidated statements and other financial information
    2006 amounted to R37.8 billion, representing 47% of our total group turnover, compared to R33.1 billion or49% and R30.1 billion or 51% in 2005 and 2004, respectively.
  permitted by our earnings. More specifically, we intend to distribute dividends, provided our annual attributableearnings represent a range of 2.5 to 3.5 times the amount distributed in the form of dividends. The average rateof earnings to dividend distributions in the past five years was approximately 2.7 times. Our dividend cover for2006 of 2.3 is outside the target range; however, when measured against earnings from continuing operations,our dividend cover is 3.1 times, which is within the target range. We distribute dividends twice a year. On thedeclaration of a dividend, the company includes the 12.5% in respect of secondary tax on companies on thisdividend in its computation of the income tax expense for the corresponding period.
  8.B
 Significant changes
   successfully concluded. Pursuant to our agreement, Tshwarisano has, with effect from 1 July 2006, acquired a25% shareholding in Sasol Oil (Pty) Limited. We are providing considerable facilitation and support forTshwarisano’s approximately R1.1 billion financing requirements, which will significantly lower Tshwarisano’scost of borrowing.
  50% share to Dawn Limited for a consideration of R51 million. The transaction was approved by the SouthAfrican Competition Tribunal and became effective during October 2006.
  was approved, and an agreement for the acquisition has been signed for a consideration of US$ 31 million.Approval from the South African Competition Tribunal was obtained on 30 August 2006. The transactionbecame effective from 7 September 2006.
  Minister of Finance to assess possible reforms to the fiscal regime applicable to windfall profits in SouthAfrica’s Liquid Fuel Energy Sector, with particular reference to the synthetic fuel industry. We submitted to thetask team a written response to its document on 10 August 2006 assessing possible reforms to the fiscal regime.We participated in the task team’s public hearings held during August 2006. The task team handed their reportcontaining its recommendations to the Minister of Finance on 26 September 2006. It is expected that anannouncement on the decision made by the Minister of Finance will be made during 2007.
  60,111,477 Sasol Limited shares held by its subsidiary, Sasol Investment Company (Pty) Limited. Oncerepurchased, these shares will be cancelled. Except for the related transaction costs, the repurchase andcancellation of these shares will have no effect on the consolidated financial position of the group. At themeeting of 3 October 2006, shareholders also approved that Sasol be granted the authority to acquire SasolLimited shares by way of a general repurchase. Both of these special resolutions were registered by the SouthAfrican Registrar of Companies on 5 October 2005.
  Surplus Apportionment Scheme. Had this approval been obtained prior to year end, the prepaid pension assetwould have increased by R130 million.


ITEM 9.
 THE OFFER AND LISTING
 9.A
 Offer and listing details
  ordinary shares on the JSE and of our ADRs on the NYSE from 9 April 2003 and of the ADRs on the NASDAQprior to the delisting of our ADRs on 8 April 2003 from NASDAQ.
 Shares
 ADRs
 (Price per
 (Price per
 share in rand)
 ADR in US$)
 Period
 High
 Low
 High
 Low
 2002
     2003
     2004
     2005
                         2006
                                                       9.B
 Plan of distribution
  9.C
 Markets
  ADSs, have been listed on the New York Stock Exchange since 9 April 2003, each representing one commonordinary share of no par value, under the symbol “SSL”. The Bank of New York is acting as the Depositary forour ADSs and issues our ADRs in respect of our ADSs.
 9.D
 Selling shareholders
  9.E
 Dilution
  9.F
 Expenses of the issue


ITEM 10.
 ADDITIONAL INFORMATION
 10.A
 Share capital
  10.B
 Memorandum and articles of association
  Africa and is registered with the South African Registrar of Companies under registration number1979/003231/06. Our corporate seat is in Johannesburg, South Africa. According to our Memorandum, ourcompany’s main business includes, among other things, to act as an investment holding company, an investmentcompany and a management company and, whether on its own and/or in collaboration with other agencies:
        Our board of directors
 Appointment, retirement and re-election of directors.
  annual general meeting. The board of directors may appoint any person qualifying as a director in terms of theSouth African Companies Act, either to fill a vacancy or as an addition to the board, provided that the totalnumber of directors does not at any time exceed the maximum of 16 directors. Directors appointed by the boardin this manner are required to retire at the next annual general meeting following their appointment, but areeligible for re-election. There is no requirement in our Articles of Association that directors must hold qualifyingshares. If the number of persons nominated as directors does not exceed the number of vacancies available, thenthe nominated directors are deemed to have been duly elected.
  number of serving directors who shall retire does not constitute a multiple of three, the number of directors whoshall retire shall be the number, adjusted upwards, that is the closest to one-third.
  directors after 27 October 1997 shall retire five years after his initial appointment. Directors who have retired inthis manner are eligible for automatic re-election by the shareholders, if they have been nominated for re-appointment after retirement by either the board or the shareholders.
  Articles of Association, the board may, by unanimous resolution on a year-to-year basis, extend a director’s termof office until the end of the year in which the director turns 73.
 Remuneration.
  determine directors’ remuneration and has delegated this authority to the Compensation Committee. The SouthAfrican Code furthermore requires that proposed fees as recommended by the board should be submitted to theshareholders in general meeting for approval prior to implementation and payment. The Companies Act prohibitsloans or any form of credit or guarantee to be provided by us to any member of our board. Our CompensationCommittee determines the Group’s human resources policy and the remuneration of directors and seniormanagement. See “Item 6.C Board Practices – Board committees – The compensation committee”.


Interested transactions.
  participate in and vote on all decisions put before a meeting of the board or the respective committee. Nothingcontained in our Articles of Association prohibits a director from voting on any decisions put before a meetingof the board or one of its committees, whether or not a director has a personal interest or is in any mannerinvolved in the matter. However, directors are required to declare in the manner prescribed by the CompaniesAct any interest, whether direct or indirect, material or otherwise, in any other company, partnership or corporatebody, of which a director of ours is a director or shareholder, or any contract or transaction in which they havean interest in any manner.
 Managing Director
  number to the office of managing director or managing directors, or may appoint employees of the company inany other capacity, and may remove or dismiss them from office and appoint others in their place. Such anappointment is made by an independent quorum of directors and for a period not exceeding five years perappointment.
 Disclosure of interests in shares
  Pursuant to Section 140A of the Companies Act, where the securities of an issuer are registered in the name of aperson and that person is not the holder of the beneficial interests in all of the securities held by the registeredshareholder, the registered shareholder is obliged, at the end of every three-month period, to disclose to theissuer the identity of each person on whose behalf the registered holder holds securities and the number andclass of securities issued by that issuer held on behalf of each such person. Moreover, the issuer of securitiesmay, by notice in writing, require a person who is a registered shareholder and whom the issuer knows, or hasreasonable cause to believe, to have a beneficial interest in a security issued by the issuer, to confirm or denywhether it holds that beneficial interest and, if the security is held for another person, to disclose the identity ofthe person on whose behalf a security is held.
  held during the three years preceding the date of the notice. All issuers of securities are obliged to establish andmaintain a register of disclosures of interests in their securities as described above and to publish in their annualfinancial statements a list of the persons who hold beneficial interests equal to or in excess of 5% of the totalnumber of securities of that class issued by the issuer, together with the extent of those beneficial interests.
 Rights of holders of our securities
 Dividend rights.
  shares have equal rights to dividends. The directors may also pay to the shareholders such interim dividend asthey consider justified from the profit of the company. No dividends shall be paid except out of the profits oraccumulated distributable reserves of the company and no dividends bear interest against the company.
  or duty which may be chargeable. Dividends are declared payable to shareholders registered at a date subsequentto the date of the declaration of the dividend as determined by the rules of the JSE Limited (the JSE). The datesapplicable to the dividend payment are determined in accordance with the JSE listing requirements.
  revert to our company. All unclaimed dividends may be invested or otherwise utilized by the directors for thebenefit of the company until claimed.
  particular, of shares or debentures of any other company, or in cash or in any one or more of such ways as thedirectors may, at the time of the declaration of the dividend, determine and direct. Any dividend or other sumpayable in cash to a shareholder may be paid by check, warrant, coupon or otherwise as the directors may decide.


such regulations as they may deem appropriate with regard to the payment in any currency and the rate ofexchange, subject to the approval of the SARB. For further information on our dividend policy, see “Item 8.AConsolidated Statements and Other Financial Information”.
  the shares underlying the ADRs, subject to the terms of the Deposit Agreement. Cash dividends will be paid bythe Depositary to holders of ADRs in accordance with the Deposit Agreement.
 Voting rights.
  meeting has one vote on a show of hands, regardless of the number of shares he holds or represents, unless apoll is demanded. On a poll, a shareholder is entitled to one vote per ordinary share held.
   Rights of non-South African shareholders.
 Articles of Association on the rights of non-South African shareholders to hold or vote our shares. Acquisitionsof shares in South African companies are not generally subject to review by the SARB. However, its approvalmay be required in certain cases where share acquisition is financed by South African lenders.
 Rights of minority shareholders.
 duties under South African common law to minority shareholders. However, shareholders may, under theCompanies Act, seek court relief upon establishing that they have been unfairly prejudiced by the company.
 General meeting of shareholders
  within six months from the end of our financial year, and within 15 months after the date of our last precedingannual general meeting.
 Notices.
  annual general meeting and any meeting at which special resolutions are proposed, and at least 14 days’ noticeof all other meetings. Meetings of shareholders may be attended by shareholders on record in our share registeror by their proxies who need not be registered shareholders. Annual general meetings shall be described as suchin the notice convening the meeting. All other meetings shall be called general meetings and shall also bedescribed as such in the respective notice.
  shareholder, either by delivery or by post, properly addressed, to a shareholder at his or her address shown in theregister of shareholders. Any notice to shareholders must simultaneously be communicated to the JSE.
  total share capital, to give notice to our shareholders of any resolution that may be duly proposed and anyresolution intended to be proposed at a general meeting or annual general meeting.
 Attendance at meetings.
  beneficial owners who have dematerialized their shares, are required to contact the registered shareholder ortheir Central Securities Depository Participant (CSDP), as the case may be, for assistance to attend and vote atmeetings.
 Quorum.
  the commencement of proceedings. The quorum for the approval of special resolutions is shareholders holdingin the aggregate not less than one-fourth of the total votes of all shareholders entitled to vote at the meeting,present in person or by proxy. In all other cases, the quorum is three shareholders present in person or by proxyand entitled to vote or, if a shareholder is a corporate body, represented by a proxy.


the meeting, the meeting will stand adjourned to take place on a day determined by the shareholders present,which may be no earlier than seven days and no later than 21 days after the date of the meeting, at the same timeand venue, or if such venue is not available, another venue appointed by the directors present. If no shareholdersare present, the day and the venue of the adjourned meeting shall be determined by the directors. If no quorum ispresent within ten minutes from the time appointed for the adjourned meeting, those shareholders who arepresent in person shall form a quorum. If the meeting at which a quorum is not present is convened upon therequest of shareholders, this meeting will be dissolved.
   Manner of voting.
                   by a majority of the votes recorded at the meeting either by show of hands or by proxy. In the event of a tie, thechairman will have a casting vote.
 Changes in share capital and preemptive rights
  a number, or increase our shares without par value to a number, as we may deem appropriate. We may alsoincrease our share capital consisting of shares without par value by transferring reserves or profits to our statedcapital, with or without a distribution of shares. New shares are issued to persons, on terms and conditions andwith the rights and privileges attached thereto, as may be determined in general meeting.
  new shares, direct that they be offered in the first instance, either at par or at a premium or at a stated value inthe case of shares without par value, to all our shareholders in proportion to the amount of capital held by them,or take any other measure with regard to the issue and allotment of the new shares.


the time of the passing of the relevant resolution, have not been taken up by any person or which no person hasagreed to take up, and we may reduce the amount of our share capital by the amount of the shares so cancelled.
 Unissued shares placed under the control of directors.
 and the listing requirements of the JSE, we may, in a general meeting, place the balance of the ordinary sharesnot allotted under the control of the directors with general authorization to allot, and issue such shares at suchprices and upon such terms and conditions as they deem fit, provided that no such issue of such shares will bemade which could effectively transfer the control of the company without prior approval of the shareholders in ageneral meeting.
 Trading in our own shares
  provisions of the Company laws of South Africa and any other applicable rule of law or regulation. Suchresolution may grant a general approval or a specific approval for a particular acquisition.
 Regulation of repurchases of own shares.
 repurchase its own issued shares, provided its articles of association permit doing so. The approval must be inthe form of a special resolution, either as a general or a specific approval for a specific repurchase. If theapproval is a general approval, it only remains valid until the next general meeting of the company following thegrant of such general approval. A company may only repurchase its own shares provided that certain solvencyand liquidity requirements are met immediately subsequent to the repurchase. A company may not repurchase itsown shares if this would result in there being no shares left in issue other than convertible or redeemable shares.Any shares repurchased by the company will be cancelled as issued shares and treated as authorized shares.
  company up to a total maximum of 10% of the issued shares of the holding company. A subsidiary may notexercise voting rights in respect of its shares in its holding company, unless the subsidiary is acting in arepresentative capacity or as a trustee.
   pro rata
   excluding controlling shareholders, their associates, any party acting in concert and any shareholder thatis participating in the repurchase and is not regarded as being public.
  exceed 20% of the company’s issued share capital of that class in any one financial year. Companies may onlyconduct a general repurchase of their securities on the JSE and the repurchase price may not be greater than 10%above the weighted average of the market value for the securities for the five business days immediatelypreceding the date on which the transaction was effected.
 Rights on liquidation
  company and the costs of liquidation shall be distributed among the shareholders in proportion to the number ofshares respectively held by each of them.


the sanction of a special resolution of our shareholders, be divided in specie among our shareholders or may,with the same sanction, be vested in trustees for the benefit of such shareholders, and the liquidation of thecompany may be finalized and the company dissolved.
 Form and transfer of shares
  Sasol ordinary shares were dematerialized as of 19 November 2001. STRATE introduced the dematerializationof share certificates in a central securities depository and contractual rolling and electronic settlement. Sharestraded electronically in STRATE are settled five days after trade.
  been dematerialized, shareholders who have elected to do so have still retained their share certificates. Transferof shares in certificated form is effected by means of a deed.
 10.C
 Material contracts
  10.D
 Exchange controls
  former residents of South Africa. Investors should consult a professional advisor as to the exchange controlimplications of their particular investments.
  Common Monetary Area, which comprises South Africa, the Kingdoms of Lesotho and Swaziland and theRepublic of Namibia. The exchange control regulations, which are administered by the Exchange ControlDepartment of the SARB, are applied throughout the Common Monetary Area and regulate transactionsinvolving South African residents, including natural persons and legal entities.
  regulations when economic conditions permit such action. In recent years, the Government has incrementallyrelaxed aspects of exchange control for financial institutions and individuals. In October 2004 the SARBannounced further relaxation of the exchange control regulations, which include the following:
  it is still required to submit an application to the SARB and comply with certain criteria as determinedby SARB; and
  the SARB and profits earned abroad may be used abroad for any lawful purpose. Any foreign dividendsrepatriated to South Africa after 26 October 2004 may be transferred abroad at any time for any purposewithout specific application to SARB.
     Overseas financing and investments
 Overseas debt.


repayment applicable to such loans. Repayment of principal and interest on these loans is usually approved andis limited to the amount borrowed and a market-related rate of interest.
  under South African exchange control regulations and can be used for overseas investment, subject to anyconditions imposed by the SARB in connection with such overseas investment. We, and our South Africansubsidiaries, would, however, require SARB approval in order to provide guarantees for the obligations of any ofour subsidiaries with regard to funds obtained from non-residents of the Common Monetary Area.
  serviced by those foreign subsidiaries. Without SARB approval, we cannot use cash we earn in South Africa torepay or service such foreign debts. As a result of the recent amendments to the exchange control regulations setout above, we are permitted to use foreign dividend income to finance the operations of another foreignsubsidiary without specific SARB approval.
 Raising capital overseas.
  in connection with raising capital requires permission from the SARB. If a foreign listing were to result in aSouth African company being redomiciled, it would also need the approval of the Minister of Finance.
  capital raising activity involving a currency other than the rand. In granting its approval, the SARB may imposeconditions on our use of the proceeds of the capital raising activity outside South Africa, including limits on ourability to retain the proceeds of this capital raising activity outside South Africa or a requirement that we seekfurther SARB approval prior to applying any of these funds to any specific use. Any limitations imposed by theSARB on our use of the proceeds of a capital raising activity could adversely affect our flexibility in financingour investments.
 Overseas investments.
  subsidiaries, can invest overseas only if the investment meets certain criteria including one of national interest,as determined by the SARB. In accordance with the latest amendments to the South African exchange controlregulations there is no limitation placed on us with regard to the amount of funds that we can transfer fromSouth Africa for the purchase of shares in offshore entities or for the purchase of foreign assets subject tomeeting these criteria. The SARB may, however, request us to stagger the capital outflows relating to largeforeign investments in order to limit the impact of such outflows on the South African economy and the foreignexchange market.
  Investment in South African companies
 Inward investment.
  investors may also sell shares in a South African company and transfer the proceeds out of South Africa withoutrestriction. Acquisitions of shares or assets of South African companies by non-South African purchasers are notgenerally subject to review by the SARB when the consideration is in cash, but may require SARB review incertain circumstances, including when the consideration is equity in a non South African company or when theacquisition is financed by a loan from a South African lender.
 Dividends.
   Transfer of shares and ADSs.
 freely transferable outside South Africa among persons who are not residents of the Common Monetary Area.Additionally, where shares are sold on the JSE on behalf of our shareholders who are not residents of theCommon Monetary Area, the proceeds of such sales will be freely exchangeable into foreign currency andremittable to them. SARB may also require review to establish that the shares have been sold at market value


and arm’s length. Any share certificates held by non-resident shareholders will be endorsed with the words “non-resident”. The same endorsement, however, will not be applicable to ADSs held by non-resident shareholders.
 10.E
 Taxation
 South African taxation
  shares or ADSs by a US holder (as defined below). This summary is based upon current South African tax lawand the convention between the governments of the United States and the Republic of South Africa for theavoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capitalgains, signed 17 February 1997 (“the Treaty”). In addition, this summary is based in part upon representations ofthe Depositary, and assumes that each obligation provided for in, or otherwise contemplated by the DepositAgreement and any related agreement, will be performed in accordance with its respective terms.
  US holder that is resident in South Africa for South African tax purposes or whose holding of shares or ADSs iseffectively connected with a permanent establishment in South Africa through which such US holder carries onbusiness activities or who is not the beneficial recipient of the dividends or returns or, in the case of anindividual who performs independent personal services, who has a fixed base situated therein or the source ofthe transaction is deemed to be in South Africa, or who is otherwise not entitled to full benefits under the Treaty.
  South African law or in the interpretation thereof by the South African tax authorities, or in the Treaty, occurringafter the date hereof. For the purposes of the Treaty and South African tax law, a United States resident thatowns Sasol ADSs will be treated as the owner of Sasol shares represented by such ADSs. Holders are stronglyurged to consult their own tax advisors as to the consequences under South African, US federal, state and local,and other applicable laws, of the ownership and disposition of shares or ADSs.
 Taxation of dividends
  the distribution of earnings in the form of dividends on the company declaring the dividend. STC is a recognizedform of tax in terms of the Treaty, but is not a withholding tax on dividends. South Africa does not impose anywithholding tax or any other form of tax on dividends paid to US holders with respect to shares or ADSs.
  respect to shares or ADSs, the Treaty would limit the rate of this tax to 5% of the gross amount of the dividends,if a US corporate holder holds directly at least 10% of the voting stock of Sasol and 15% of the gross amount ofthe dividends in all other cases.
 Taxation of gains on sale or other disposition
  disposition of shares held by a US holder as a capital asset were not subject to taxation in South Africa. From 1 October 2001, South Africa has introduced a tax on capital gains, which only applies to South Africanresidents and to non-residents if the sale is attributable to a permanent establishment of the non-resident. Themeaning of the word “resident” is different for individuals and corporations and is governed by the SouthAfrican Income Tax Act of 1962 (“the Act”) and by the Treaty. In the event of conflict the Treaty would prevail.In terms of the Act and the Treaty, a US holder of shares or ADSs will not be subject to capital gains tax on thedisposal of securities held as capital assets unless such securities constitute the assets linked to a permanentestablishment in South Africa. In contrast, gains on the disposal of securities which are not capital in nature areusually subject to income tax. However, even in the latter case, a US holder will not be subject to income taxunless the US holder carries on business in South Africa through a permanent establishment situated therein. In


such a case, this gain may be subject to tax in South Africa, but only so much as is attributable generally to thatpermanent establishment for so long as it does not constitute a share repurchase resulting in the purchase pricebeing seen to be a dividend.
 Stamp duty and uncertified securities tax
    through the JSE, the exchange conducted by JSE and uncertificated securities tax, or UST, is generally payablefor on-market transactions (shares sold through the JSE in dematerialized form), each at 0.25% of the marketvalue of the shares concerned. Stamp duty is payable in South Africa regardless of whether the transfer isexecuted within or outside South Africa. A transfer of a dematerialized share can only occur in South Africa.
  executed outside of South Africa and registration of transfer is effected in any branch register kept by therelevant company, subject to certain provisions set forth in the South African Stamp Duties Act of 1968.Although technically under the terms of current legislation it could be interpreted that transfers of ADSs betweennon-residents of South Africa could attract either stamp duty or UST, such transfers have not to date attractedeither stamp duty or UST. However, if securities are withdrawn from the deposit facility or the relevant depositagreement is terminated, either stamp duty or UST will be payable on the subsequent transfer of the shares. Anacquisition of shares from the Depositary in exchange for ADSs representing the relevant underlying securitieswill also render an investor liable to pay South African stamp duty or UST in South Africa at the same rate asstamp duty or UST on a subsequent transfer of shares, upon the registration of the investor as the holder of theapplicable shares on the company’s register.
 Investigation of possible reforms to the fiscal regime applicable to windfall profits in South Africa’s liquidfuel energy sector
  Finance to assess possible reforms to the fiscal regime applicable to windfall profits in South Africa’s LiquidFuel Energy Sector, with particular reference to the synthetic fuel industry.
    profits tax and do not believe that such a tax would support government’s policy objectives of rewardingbeneficiation and providing energy security. Further, we do not believe that a windfall tax would benefit theconsumer by achieving lower fuel prices. The task team handed their report containing its recommendations tothe Minister of Finance on 26 September 2006. It is expected that an announcement on the decision will bemade by the Minister of Finance during 2007.
 United States Federal Income Taxation
  ownership and disposition of shares or ADSs to a US holder (as defined below) that holds its shares or ADSs ascapital assets. This summary is based on US tax laws, including the Internal Revenue Code of 1986, as amended(“the Code”), Treasury regulations, rulings, judicial decisions, administrative pronouncements, South African taxlaws, and the Treaty, all as currently in effect as of the date of this annual report, and all of which are subject tochange or changes in interpretation, possibly with retroactive effect. In addition, this summary is based in partupon the representations of the Depositary and the assumption that each obligation in the Deposit Agreementrelating to the ADSs and any related agreement will be performed in accordance with its terms.


subject to special tax rules, including US expatriates, insurance companies, tax-exempt organizations, banks,financial institutions, regulated investment companies, persons subject to the alternative minimum tax,securities-broker dealers, traders in securities who elect to apply a mark-to-market method of accounting,investors that actually or constructively own 10% or more of the share capital or voting stock of Sasol, personsholding their shares or ADSs as part of a straddle, hedging transaction or conversion transaction, persons whoacquired their shares or ADSs pursuant to the exercise of employee stock options or similar derivative securitiesor otherwise as compensation, or persons whose functional currency is not the US dollar. Such holders may besubject to US federal income tax consequences different from those set forth below.
         ADSs, the tax treatment of a partner generally will depend upon the status of the partner and the activities of thepartnership. A partner in a partnership that holds shares or ADS is urged to consult its own tax advisor regardingthe specific tax consequences of the ownership and disposition of the shares or ADSs.
  and local tax consequences of owning and disposing of shares or ADSs in light of their particular circumstancesas well as any consequences arising under the laws of any other taxing jurisdiction. In particular, US holders areurged to consult their own tax advisors regarding whether they are eligible for benefits under the Treaty.
  represented by those ADSs. The following discussion (except where otherwise expressly noted) applies equally toUS holders of shares and US holders of ADSs. Furthermore, deposits or withdrawals of shares by a US holder forADSs or ADSs for shares will not be subject to US federal income tax or South African income tax.
 Taxation of dividends
  US holder by Sasol will be taxable as dividend income to the US holder for US federal income tax purposes,based on the US dollar value of the distribution calculated by reference to the spot rate in effect on the date thedistribution is actually or constructively received by the US holder, in the case of shares, or by the Depositary, inthe case of ADSs. For foreign tax credit limitation purposes, dividends paid by Sasol generally will constituteforeign source “passive income” or, for some holders, foreign source “financial services income”. Dividendspaid by Sasol will not be eligible for the dividends-received deduction generally allowed to US corporations inrespect of dividends received from other US corporations. At present, South Africa does not impose awithholding tax on dividends.
  US holder of shares in an amount equal to the US dollar value of the foreign currency calculated by reference to the spot rate in effect on the date of receipt, regardless of whether the foreign currency is converted into US dollars. If the foreign currency is converted into US dollars on the date of receipt, a US holder of sharesgenerally should not be required to recognize foreign currency gain or loss in respect of the dividend. If theforeign currency received in the distribution is not converted into US dollars on the date of receipt, a US holderof shares will have a basis in the foreign currency equal to its US dollar value on the date of receipt.


be treated as US source ordinary income or loss. In the case of a US holder of ADSs, the amount of anydistribution paid in a foreign currency ordinarily will be converted into US dollars by the Depositary upon itsreceipt. Accordingly, a US holder of ADSs generally will not be required to recognized foreign currency gain orloss in respect of the distribution.
  maximum rate of 15%) in respect of “qualified dividend income” received in taxable years beginning before1 January 2011. For this purpose, qualified dividend income generally includes dividends paid by a non-US corporation if, among other things, the US holders meet certain minimum holding periods and the non-US corporation satisfies certain requirements, including that either:
      dividend income for US federal income tax purposes and Sasol anticipates that its dividends will be reported asqualified dividends on Form 1099-DIV delivered to US holders. Each individual US holder of shares or ADSs isurged to consult his own tax advisor regarding the availability to him of the reduced dividend tax rate in light ofhis own particular situation and regarding the computations of his foreign tax credit limitations with respect toany qualified dividend income paid by Sasol to him, as applicable.
  are inconsistent with the claiming of reduced tax rates in respect of qualified dividends by US holders of ADSs.Accordingly, the analysis of the availability of qualified dividend treatment could be affected by future actionsthat may be taken by the US Treasury with respect to ADSs.
 Taxation of capital gains
  be subject to South African tax on any capital gain or loss if it sells or exchanges its shares or ADSs. Specialrules apply to individuals who are potentially residents of more than one country. Refer to “South AfricanTaxation – Taxation of gains on sale or other disposition” above.
  gain or loss for US federal income tax purposes in an amount equal to the difference between the US dollarvalue of the amount realized on the disposition and the US holder’s adjusted tax basis, determined in US dollars,in the shares or ADSs. Such gain or loss generally will be US source gain or loss, and generally will be treatedas a long-term capital gain or loss if the holder’s holding period in the shares or ADSs exceeds 1 year at the timeof disposition. The deductibility of capital losses is subject to significant limitations. If the US holder is anindividual, any capital gain generally will be subject to US federal income tax at preferential rates if specifiedminimum holding periods are met.
 Passive foreign investment company considerations
  US federal income tax purposes for the taxable year ended 30 June 2006. US holders are advised, however, thatthis conclusion is a factual determination that must be made annually and thus may be subject to change. IfSasol were to be classified as a PFIC, the tax on distributions on its shares or ADSs and on any gains realizedupon the disposition of its shares or ADSs may be less favourable than as described herein. Furthermore,dividends paid by a PFIC are not “qualified dividend income” and are not eligible for the reduced rates oftaxation for certain dividends. US holders should consult their own tax advisors regarding the application of thePFIC rules to their ownership of the shares or ADSs.


US information reporting and backup withholding
  shares or ADSs may be subject to information reporting to the IRS. US federal backup withholding generally isimposed at a current rate of 28% on specified payments to persons who fail to furnish required information.Backup withholding will not apply to a holder who furnishes a correct taxpayer identification number orcertificate of foreign status and makes any other required certification, or who is otherwise exempt from backupwithholding. US persons who are required to establish their exempt status generally must provide IRS Form W-9(Request for Taxpayer Identification Number and Certification). Non-US holders generally will not be subject toUS information reporting or backup withholding. However, these holders may be required to providecertification of non-US status (generally on IRS Form W-8BEN) in connection with payments received in theUnited States or through certain US-related financial intermediaries.
  against a holder’s US federal income tax liability. A holder may obtain a refund of any excess amounts withheldunder the backup withholding rules by filing the appropriate claim for refund with the IRS and furnishing anyrequired information.
 10.F
 Dividends and Paying Agents
  10.G
 Statement by Experts
  10.H
 Documents on Display
  the Bank of New York, as Depositary for our ADSs at its Corporate Trust office, located at 101 Barclay Street,New York, New York 10286. These reports and other information can also be inspected without charge and copied at prescribed rates at the public reference facilities maintained by the SEC in Room 1024,450 Fifth Street, N.W., Washington, D.C. 20549. These reports may also be accessed via the SEC’s website(www.sec.gov).Also, certain reports and other information concerning us will be available for inspection at theoffices of the NYSE. In addition, all the statutory records of the company and its subsidiaries may be viewed atthe registered address of the company in South Africa.
 10.I
 Subsidiary Information


ITEM 11.
 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  anticipated transactions. We continuously monitor these exposures and enter into derivative financial instrumentsto reduce these risks. We do not enter into derivative transactions on a speculative basis. All fair values, with theexception of the sensitivity analysis, have been determined using current market pricing models.
       Foreign exchange risk
  exchange rate fluctuations that have an impact on our cash flows and financing activities. We manage ourforeign exchange risks through our group financing policies and the selective use of forward exchange contracts,cross currency swaps and cross currency options. We use foreign exchange contracts to reduce foreign currencyexposures arising from imports into South Africa. Hedging of local exports is evaluated on a case-by-case basis.
     Forward Exchange Contracts
 Fair value loss at
 Expected maturity date
 30 June 30 June
 2007
 2008
 2009
 2010
 2011
 Thereafter
 Total
 2006
 2005
 (Rand equivalent in millions)
           Average contractual exchange rate
            Average contractual exchange rate
            Average contractual exchange rate
  Other currencies–contract amount
          2,492
 1
 –
 –
 –
 –
 2,493
 137
 (19)
          Total
 2,957
 1
 –
 –
 –
 –
 2,956
 137
 (19)


Cross-currency swaps
 Fair value
 loss at
 Expected maturity date
 30 June 30 June
 2007
 2008
 2009
 2010
 2011
 Thereafter
 Total
 2006
 2005
 (Rand equivalent in millions – notional amounts)
                  –
           Commodity price risk
  duration as a means of mitigating price and timing risks on crude oil and other energy-related product purchasesand sales. In effecting these transactions, the group entities concerned operate within procedures and policiesdesigned to ensure that risks including those relating to the default of counter parties are minimized.
  significant losses or profits on these transactions, except for a loss of R93 million accounted for at 30 June 2006regarding the zero cost collar held at that date.
   Fair value
 gain/(loss) at
 Expected maturity date
 30 June 30 June
 2007
 2008
 2009
 2010
 2011
 Thereafter
 Total
 2006
 2005
 (Rand equivalent in millions)
 Future contractsOil futures (US$)
         SwapsFuel oil (US$)
         Zero cost collar
                   Options soldCall options sold (US$)
                             –
 Interest rate risk


Liabilities–notional
 2007
 2008
 2009
 2010
 2011
 Thereafter
 Total
 (Rand in millions)
                                                                                           2,619
 2,682
 613
 3,354
 602
 3,389 13,259
         Total
 2,635
 2,689
 619
 3,354
 602
 3,389 13,288
    Fair value
 gain/(loss) at
 Expected maturity date
 30 June
 2007
 2008
 2009
 2010
 2011
 Thereafter
 Total
 2006
 (Rand equivalent, in millions – notional amounts)
                   Total
 625
 625
 812
 –
 –
 –
 2,062
 28


ITEM 12.
 DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES


PART II
 ITEM 13.
 DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES


ITEM 14.
 MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USEOF PROCEEDS


ITEM 15.
 CONTROLS AND PROCEDURES
   the group’s disclosure controls and procedures (required by paragraph (b) of 17 CFR 240.13a-15) as of the endof the period covered by this annual report on Form 20-F, have concluded that, as of such date, the Company’sdisclosure controls and procedures were effective.
     the year ended 30 June 2006 that have materially affected, or are reasonably likely to affect, the group’s internalcontrol over financial reporting.


ITEM 16.
 Item 16A.
 Audit committee financial expert
  be an audit committee financial expert within the meaning of the Sarbanes-Oxley Act, in accordance with theRules of the NYSE and the SEC.
 Item 16B.
 Code of ethics
  respect – and 15 ethical standards. These ethical standards cover such issues as bribery and corruption, fraud,insider trading, human rights and discrimination and include a commitment to conduct our business with dueregard for the interests of all our stakeholders and the environment. The code embodies the highest standards ofcompliance with all applicable laws and regulations. An ethics forum has been established to monitor and reporton ethics, best practice and compliance requirements, and to recommend amendments to the code as required.Employee performance compared against our values, which incorporate the code of ethics, is assessed as part ofour performance appraisal system. Any amendment or waiver of the code as it relates to our chief executive orchief financial officer will be posted on our website within five business days following such amendment orwaiver. No such amendments or waivers are anticipated.
  our internet website. Our website address is www.sasol.comand the code is located on the investor relations sub-directory.
  hotline provides an independent facility for stakeholders of our company, including our employees, suppliers andcustomers, to report anonymously fraud, statutory malpractice and other crimes, deviations from theprocurement policy, financial and accounting reporting irregularities and other irregularities.
 Item 16C.
 Principal accountant fees and services
   Audit-related
 All other
 Audit fees
 fees
 Tax fees
 fees
 Total
 1
 (rand millions)
             1.
 In respect of our audit committee approval process, all of the non-audit and audit fees paid to KPMG Inc. have beenapproved by the audit committee.
  the statutory financial statements of the company’s subsidiaries, including fees billed for assurance and relatedservices that are reasonably related to the performance of the audit or reviews of the company’s financialstatements that are services that only an external auditor can reasonably provide.
  concerning financial accounting and reporting standards, review of security controls and operationaleffectiveness of systems, due diligence related to acquisitions and employee benefit plan audits. Audit-relatedfees include fees billed by KPMG Inc. in respect of the assistance provided on our Sarbanes-Oxley Act Section 404 readiness project of approximately R2 million and R22 million for 2006 and 2005, respectively.This project includes assistance relating to the documentation of internal control policies and procedures.


and amended tax returns; tax consultations, such as assistance in connection with tax audits and appeals; taxadvice relating to acquisitions, transfer pricing, and requests for rulings or technical advice from tax authorities;and tax planning services and expatriate tax compliance, consultation and planning services.
  fees. Specifically included in other fees for 2006 is R23 million in respect of the vendor due diligence performedfor the proposed divestiture of the Sasol Olefins & Surfactants business.
 Audit committee approval policy
  by our independent accountants have been approved by the audit committee of our board of directors, whichconcluded that the provision of such services by the independent accountants was compatible with themaintenance of that firm’s independence in the conduct of its auditing functions.
  specific pre-approval by the audit committee, prior to engagement, of such services, other than audit servicescovered by the annual audit engagement letter, provided that all such fees must be less than 20% of the totalaudit fees for Sasol’s annual audit engagement, unless otherwise directed by the audit committee. During thecurrent year this 20% was exceeded due to the fees relating to the vendor due diligence performed for theproposed divestiture of the Sasol Olefins & Surfactants business and in 2005 due to the Sarbanes-Oxley ActSection 404 readiness project. In addition, services to be provided by the independent accountants that are notwithin the category of approved services must be approved by the audit committee prior to engagement,regardless of the service being requested and the amount, but subject to the restriction above.
  required to be submitted to the audit committee by both management and the independent accountants and mustinclude a detailed description of the services to be provided and a joint statement confirming that the provisionof the proposed services does not impair the independence of the independent accountants.
  Mr. Brian Connellan (and if he is unavailable, any audit committee member), provided the fee so approved isless than R1 million per service and the cumulative amount approved per annum does not exceed the guidelineof 20% of the budgeted audit fees for the year. Mr. Connellan shall notify the Audit Committee of any suchapprovals at its next scheduled meeting. The audit committee does not delegate to management itsresponsibilities to approve services to be performed by the independent accountants.
   Item 16D.
 Exemptions from the listing standard for audit committees


Item 16E.
 Purchases of equity securities by the issuer and affiliated purchases
 Total
 Total number of
 Maximum number
 number
 Average
 shares purchased as
 of shares that may
 of shares
 price paid
 part of publicly
 yet be purchased
 Period
 purchased
 per share
 announced programs
 under the programs
 For the year ended 30 June 20062005-07-01 to 2005-07-31
                                                                  At each annual general meeting since 25 October 1999 until the meeting on 24 November 2004 theshareholders have authorized the directors to undertake a repurchase of issued securities limited to amaximum of 10% of the company’s issued securities at the time that the authority was granted. For moreinformation on the general requirements for trading in own shares refer to “Item 10.B – Memorandum andArticles of Association”.
  Any acquisition must not be made at a price more than 10% above the weighted average of the marketvalue of the securities for the 5 business days immediately preceding the date of such acquisition.
  The authority granted to the directors to acquire the company’s issued securities was valid only until thecompany’s next annual general meeting which was held on 2 December 2005.
  The authorization given to the directors to undertake a repurchase of issued securities on 24 November2004 limited to a maximum of 10% of the company’s issued securities at the time that the authority wasgranted, expired on 2 December 2005. In terms of the South African Companies Act, 1973, theauthorization is only valid until the next annual general meeting following the grant of such a generalapproval.


PART III
 ITEM 17.
 FINANCIAL STATEMENTS


ITEM 18.
 FINANCIAL STATEMENTS
   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED 30 JUNE 2006,30 JUNE 2005 AND 30 JUNE 2004
   Consolidated Financial Statements
             SUPPLEMENTARY OIL AND GAS INFORMATION (UNAUDITED)


Report of Independent Registered Public Accounting Firm
 The Board of Directors and Shareholders of Sasol Limited:
  (Group) as of 30 June 2006 and 30 June 2005, and the related consolidated income statements, statements ofcomprehensive income and changes in shareholders’ equity and cash flows for each of the years in the three-yearperiod ended 30 June 2006. These consolidated financial statements are the responsibility of the Group’smanagement. Our responsibility is to express an opinion on these consolidated financial statements based on ouraudits.
  Board (United States). Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement. An audit includes examining,on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit alsoincludes assessing the accounting principles used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis forour opinion.
  all material respects, the financial position of Sasol Limited and its subsidiaries as of 30 June 2006 and 30 June2005, and the results of their operations and their cash flows for each of the years in the three-year period ended30 June 2006, in conformity with US generally accepted accounting principles.
   /s/KPMG Inc.Registered Accountants and Auditors


F–2
 Sasol Limited and its subsidiaries
 Consolidated Income Statements
 for the years ended
 30 June
 30 June
 30 June
 30 June
 2006
 2006
 2005
 2004
 (US$ in
 millions)*
 (Rand in millions)
 Note
 (Unaudited)
   ]
 Continuing operationsSale of products
 7,816
 60,639
    100
 776
    57
 442
   Turnover
 7,973
 61,857
    26
 205
    24
 189
    (3,734)
 (28,970)
    (86)
 (666)
    (502)
 (3,895)
    (522)
 (4,051)
    (513)
 (3,981)
   Operating costs and expenses
 (5,357)
 (41,563)
   Operating profit
 5
 2,666
 20,688
   Other income/(expenses)Dividends received
 1
 9
    34
 261
    6
 (26)
 (203)
    4
 –
 –
 –
  Income before tax, earnings/(losses) of equity accounted investees and minority interests
 2,675
 20,755
    7
 (832)
 (6,452)
   Income before earnings/(losses) of equity accounted investees and minority interests
  1,843
 14,303
    2
 13
    (20)
 (157)
   Income from continuing operations
 1,825
 14,159
   Discontinued operationsNet (loss)/income from discontinued operations (including fair value write-down), net of tax
 12
 (369)
 (2,860)
   Earnings attributable to shareholders
 1,456
 11,299
   US$
 Rand
 Rand
 Rand
 Basic earnings/(loss) per share
 2.35
 18.22
    8
 2.94
 22.83
    (0.59)
 (4.61)
   Diluted earnings/(loss) per share
 2.31
 17.93
    2.90
 22.47
    (0.59)
 (4.54)
    US dollar information has been presented for the year ended 30 June 2006 on an unaudited basis solely for the convenience of the reader and is computed at the noon buying rate for customs purposes of R7.76/US dollar, as reported by the Federal Reserve Bank of New York on 29 September 2006.


Sasol Limited and its subsidiaries
 Consolidated Balance Sheets
 at
 30 June
 30 June
 30 June
 2006
 2006
 2005
 (US$ in millions)*
 (Rand in millions)
 Note
 (Unaudited)
  AssetsCurrent assetsCash and cash equivalents
 9
 362
 2,808
   9
 35
 271
   10
 1,451
 11,260
   9
 72
 –
  11
 990
 7,678
   12
 1,505
 11,679
   7
 34
 267
  Total current assets
 4,386
 34,035
  Non-current assetsInvestment in securities
 13
 51
 392
   14
 1,058
 8,207
   21
 62
 485
   100
 773
   7
 58
   30
 234
   15
 113
 881
   16
 6,180
 47,954
   7
 112
 869
  Total non-current assets
 7,713
 59,853
  Total assets
 12,099
 93,888
  Liabilities and shareholders’ equityCurrent liabilitiesBank overdraft
 56
 442
   604
 4,685
   17
 695
 5,391
   18
 281
 2,177
   238
 1,844
   12
 691
 5,364
   7
 35
 270
  Total current liabilities
 2,600
 20,173
  Non-current liabilitiesLong-term obligations, net of current portion
 19
 329
 2,556
   20
 1,371
 10,640
   21
 369
 2,862
   21
 111
 863
   7
 752
 5,829
  Total non-current liabilities
 2,932
 22,750
  Total liabilities
  5,532
 42,923
   38
 297
  Shareholders’ equityStated share capital – 1,175,000,000 authorised ordinary shares of no par value.682,978,425 shares (2005 – 676,877,125 shares) in issue and outstanding
 23
 569
 4,414
   23
 (470)
 (3,647)
   6,597
 51,192
   24
 (167)
 (1,291)
  Total shareholders’ equity
 6,529
 50,668
  Total liabilities and shareholders’ equity
 12,099
 93,888
  Commitments and contingencies – refer note 22
  US dollar information has been presented for the year ended 30 June 2006 on an unaudited basis solely for the convenience of the reader and is computed at the noon buying rate for customs purposes of R7.76/US dollar, as reported by the Federal Reserve Bank of New York on 29 September 2006.
 The accompanying notes form an integral part of these consolidated financial statements.
 F–3


F–4
 Sasol Limited and its subsidiaries
 Consolidated Statement of Changes in Shareholders’ Equity
 for the years ended 30 June 2006, 30 June 2005 and 30 June 2004
 Common Stock
 Number of
 Accumulated
 ordinary
 Stated
 other
 Total
 Total
 shares
 share
 Treasury
 Retained
 comprehensive
 shareholders’
 shareholders’
 issued
 capital
 shares
 earnings
 (loss)/income
 equity
 equity
 (Rand in millions)
 (US$ in millions)*
 (Unaudited)
 Balance as of 30 June 2003
 668,798,425
 2,842
 (3,614)
 34,470
 (905)
 32,793
        Balance as of 30 June 2003, as restated
 668,798,425
 3,111
 (3,614)
 34,201
 (905)
 32,793
                                                          Balance as of 30 June 2004, as restated
 671,271,425
 3,366
 (3,647)
 36,690
 (2,740)
 33,669
                                                   Balance as of 30 June 2005, as restated
  676,877,125
 3,814
 (3,647)
 43,553
 (2,775)
 40,945
 5,276
  –
 –
 –
 11,299
 –
 11,299
 1,456
  –
 –
 –
 –
 1,392
 1,392
 179
   –
 –
 –
 –
 65
 65
 8
  –
 –
 –
 –
 27
 27
 4
  –
 –
 –
 (3,660)
 –
 (3,660)
 (472)
  6,101,300
 431
 –
 –
 –
 431
 56
  –
 169
 –
 –
 –
 169
 22
 Balance as of 30 June 2006
 682,978,425
 4,414
 (3,647)
 51,192
 (1,291)
 50,668
 6,529
  US dollar information has been presented for the year ended 30 June 2006 on an unaudited basis solely for the convenience of the reader and is computed at the noon buying rate for customs purposes of R7.76/US dollar, as reported by the Federal Reserve Bank of New York on 29 September 2006.
 The accompanying notes form an integral part of these consolidated financial statements.


Sasol Limited and its subsidiaries
 Consolidated Statements of Cash Flows
 for the years ended
 30 June
 30 June
 30 June
 30 June
 2006
 2006
 2005
 2004
 (US$ millions)*
 (Rand in millions)
 Note
 (Unaudited)
   Cash receipts from customers
 10,093
 78,324
 66,597
 58,382
 Cash paid to suppliers and employees
 (6,973)
 (54,109)
 (48,729)
 (44,543)
 Net cash flow from operations
 26
 3,120
 24,215
 17,868
 13,839
 Interest received
 38
 294
 116
 183
 Dividends received
 27
 21
 161
 61
 37
 Finance costs paid
 (40)
 (311)
 (332)
 (368)
 Income tax paid
 (707)
 (5,484)
 (3,616)
 (4,005)
 Net cash generated by operating activities
 26
 2,432
 18,875
 14,097
 9,686
 Purchase of property, plant and equipment
 (1,251)
 (9,703)
 (10,157)
 (8,671)
 Purchase of intangible assets
 (10)
 (79)
 (83)
 (208)
 Investments in equity accounted investees
 (236)
 (1,831)
 (768)
 (376)
 Interest capitalized
 (122)
 (949)
 (1,038)
 (1,082)
 Non-current assets sold
 81
 629
 418
 747
 Acquisition of businesses, net of cash acquired
 28.1
 (33)
 (259)
 –
 (247)
 Disposal of businesses, net of cash disposed
 28.2
 76
 587
 (46)
 254
 Proceeds from insurance
 5
 40
 159
 –
 (Increase)/decrease in investments
 (14)
 (108)
 (19)
 7
 Increase in long-term receivables
 (12)
 (93)
 (198)
 (101)
 Net cash utilized in investing activities
 (1,516)
 (11,766)
 (11,732)
 (9,677)
 Share capital issued on exercising of share options
 56
 431
 311
 109
 Acquistion of treasury stock
 –
 –
 –
 (33)
 Dividends paid to minority shareholders
 (9)
 (73)
 (60)
 (200)
 Dividends paid to shareholders
 27
 (472)
 (3,660)
 (2,856)
 (2,748)
 Contributions from minority shareholders
 –
 –
 –
 75
 Proceeds from borrowings
 237
 1,840
 5,911
 11,932
 Repayment of debt
 (649)
 (5,035)
 (4,957)
 (10,789)
 Movement in bank overdraft
 36
 283
 186
 (75)
 Net cash utilized in financing activities
 (801)
 (6,214)
 (1,465)
 (1,729)
 Translation effects on cash and cash equivalents
 of foreign entities
 (7)
 (53)
 40
 (77)
 Net increase/(decrease) in cash and cash
 equivalents
 
 108
 842
 940
 (1,797)
 Cash and cash equivalents at beginning of year
 303
 2,350
 1,410
 3,207
 Cash in disposal group held for sale
 (49)
 (384)
 –
 –
 Cash and cash equivalents at end of year
 362
 2,808
 2,350
 1,410
  US dollar information has been presented for the year ended 30 June 2006 on an unaudited basis solely for the convenience of the readerand is computed at the noon buying rate for customs purposes of R7.76/US dollar, as reported by the Federal Reserve Bank of New Yorkon 29 September 2006.
 The accompanying notes form an integral part of these consolidated financial statements.
 F–5


Sasol Limited and its subsidiaries
 Consolidated Statements of Comprehensive Income
 for the years ended
 30 June
 30 June
 30 June
 30 June
 2006
 2006
 2005
 2004
 (US$ in millions)*
 (Rand in millions)
 (Unaudited)
 Comprehensive income
 Earnings attributable to shareholders
 1,456
 11,299
   Other comprehensive income/(loss) for the yearTranslation of foreign operations with a functional
 currency other than rand, net of tax of negative R2 million (2005 – negative R1 million,2004 – R5 million)
 179
 1,392
    cash flow hedging activities, net of tax of negative R70 million (2004 – negative R38 million, 2004 – R164 million)
 8
 65
    tax of negative R15 million (2005 – R38 million,2004 – negative R168 million)
 4
 27
   Net movement per statements of changes in
 shareholders’ equity
 191
 1,484
   Comprehensive income
 1,647
 12,783
   *
 US Dollar information has been presented for the year ended 30 June 2006 on an unaudited basis solely for the convenience of the readerand is computed at the noon buying rate for customs purposes of R7.76/US dollar, as reported by the Federal Reserve Bank of New Yorkon 29 September 2006.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements
 1.
 Nature of business and organisation
  international development of synthetic-fuel ventures based on our proprietary Fischer-Tropsch (FT) technology.We mine coal in South Africa and through Sasol Synfuels, we convert this coal, along with Mozambican naturalgas, into fuels and chemical feedstock through our FT technology.
  States and Asia. Our chemical portfolios include monomers, polymers, solvents, co-monomers, waxes,phenolics, ammonia, fertilisers and commercial explosives.
  our refinery and by Sasol Synfuels through Sasol convenience centres and Exel service stations. We alsowholesale fuels in South Africa and export fuels to sub-Saharan Africa. We produce oil in Gabon.
      leveraging its technology or securing integrated and highly cost-competitive feedstock positions. The SasolOlefins & Surfactants (O&S) business is only partially integrated upstream into feedstocks and has notadequately provided the integration benefits required. On 1 August 2005, Sasol announced that it wasconsidering the divestment from its O&S business excluding its activities in comonomers subject to fair valuebeing obtained. At 30 June 2006, the sales process was sufficiently advanced such that management believe thatthe business will be sold, as a going concern, within the next financial year.
    report these results as a single line item. In the 2006 balance sheet the assets and liabilities of O&S have beenclassified as held for sale. The cash flow statement and 2005 balance sheet include both continuing anddiscontinued operations. On classification as held for sale, the net assets of the business were written down byR3,1 billion to the estimated fair value less costs to sell.
  2.
 Significant accounting policies
   Basis of preparation
   Basis of consolidation


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 2.
 Significant accounting policies (Continued)
 Subsidiaries
  than 50% of the voting rights in an entity that is not a variable interest entity, except where minorityshareholders retain substantive participating rights, are classified as subsidiaries. Entities, other than variableinterest entities, in which the group owns more than 50% of the voting rights, but minority shareholders retainsubstantive participating rights, are accounted for according to the equity method of accounting. The results ofany subsidiary acquired or disposed of during the year are consolidated from the acquisition date or up to thedisposal date.
   has a statutory year end of 31 May and is included in the consolidated accounts up to that date. An adjustment tothe Sasol Italy SpA financial statements to 30 June, the group’s year end, would not result in a material effect onreported balance sheets and income statements.
 Investments in equity investees (associates and incorporated joint ventures)
 Investments in associates
  respect of which the group has the ability to exercise significant influence over operational and financialpolicies, normally owning between 20% and 50% of the voting equity.
 Investments in incorporated joint ventures
    acquisition date, the group’s share of profits or losses of associates and joint ventures is recognized in theincome statement as equity accounted earnings and its share of movements in equity reserves is recognizeddirectly in the statement of changes in shareholders’ equity. All cumulative post-acquisition movements in theequity of associates and joint ventures are adjusted against the cost of the investment.
  investment in those entities. The total carrying value of equity accounted investments in associates and jointventures, including goodwill, is evaluated for impairment when conditions indicate that a decline in fair valuebelow the carrying amount is other than temporary or at least annually on 31 March. When impaired, thecarrying value of the group’s investment in those entities is written down to its fair value. The group’s share ofresults of equity accounted investees, that have financial years within three months of the fiscal year-end of thegroup, is included in the consolidated financial statements based on the results reported by those investees fortheir financial years. There were no significant adjustments required to be made in respect of equity accountedinvestees which have financial years that are different to those of the group.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 2.
 Significant accounting policies (Continued)
 Foreign currency
   Rate
 30 June 2006
 30 June 2005
 30 June 2004
                   Foreign currency translation
 Foreign operations with a functional currency other than rand
  include fair value adjustments arising on acquisition, are translated into rand at the closing rate of exchangeruling at the balance sheet date. Results of operations are translated at the average rate of exchange for the year.Exchange differences arising on translation are classified as foreign currency translation adjustments inshareholders’ equity and included in determining other comprehensive income.
   Translation of foreign currency transactions
       Cash and cash equivalents
  a maturity period of three months or less at the date of purchase. Cash and cash equivalents are stated at cost,which approximates fair value. Cash subject to restrictions has been classified separately on the face of thebalance sheet.
 Property, plant and equipment
    method over their estimated useful lives. A review of the useful lives of property, plant and equipment isperformed at least annually. The depreciation rates applied are described in Note 16.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 2.
 Significant accounting policies (Continued)
  portion of project overheads. Expenditure incurred to replace or modify a significant component of plant iscapitalized and any remaining book value of the component replaced is written off immediately. All otherexpenditure on plant renewal is expensed as incurred.
  carrying value of the asset and depreciated on a straight-line basis over the estimated useful lives of the assets.Where asset retirement costs relate to mineral or exploration assets, the carrying amount is depreciated using theunits-of-production method.
  equivalent amount being shown as a capital lease liability. The amount capitalized is the lower of the fair valueof the leased asset and the present value of the minimum lease payments at the inception of the lease. Leasepayments are allocated between capital repayments and interest payments. Interest is recognized in the incomestatement using the effective interest rate method. Capitalized leased assets are depreciated over the shorter ofthe lease period or the estimated useful life of the leased asset.
 Mineral and exploration assets
 Coal mining
  feasibility study that has determined that a commercially minable deposit exists. Mining exploration expenditureincurred subsequent to proved and probable reserves being identified are capitalized.
  capitalized only when excavation or drilling has occurred to extend reserves or further delineate a reserveformation that has already been the subject of a feasibility study that has determined that a commerciallyminable deposit exists prior to these exploration expenditure being incurred. Exploration expenditure incurred toexplore outside or around the commercially minable deposit for additional reserves are expensed.
  method using estimated proved and probable coal reserves. A unit is considered to be produced once it has beenremoved from underground and taken to the surface, passed the bunker and been transported by conveyor overthe scale at the shaft head. Proved and probable reserves used for the amortization of life-of-mine assets are thetotal proved and probable reserves assigned to that specific mine (accessible reserves) or complex which benefitfrom the utilisation of those assets. Inaccessible reserves are excluded from the calculation.
 Oil and gas:
   .
  and gas reserves. The classification of these reserves as proved depends on whether major capital expenditure todevelop the property can be justified as a result of sufficient quantities of additional reserves being identified.
  appears with reasonable certainty to be recoverable in the future from known oil and gas reservoirs underexisting economic and operating conditions.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 2.
 Significant accounting policies (Continued)
  determination of whether proved reserves have been found. The following conditions should be met for thesecosts to remain capitalized:
       above conditions are not met or if information is obtained that raises doubt about the economic or operatingviability of the project, the costs would be recognized in the income statement.
   estimated proved developed oil and gas reserves, on a field-by-field basis. Depletion, depreciation andamortization of property acquisition costs is determined using the units-of-production method over provedreserves, on a field-by-field basis.
 Capitalization of interest costs
  takes a substantial period of time to get ready for its intended use or sale) and on the group’s investments inequity accounted investee’s while the investee has activities in progress necessary to commence its plannedprincipal operations, provided that the equity accounted investee’s activities include the use of funds to constructqualifying assets for its operations. All other interest costs are expensed as incurred.
 Goodwill and intangible assets
 Goodwill
  reporting unit level on an annual basis on 31 March, or more frequently if the group believes indicators ofimpairment exist. The performance of the test involves a two step process. The first step of the impairment testinvolves comparing the fair value of the reporting unit with the reporting unit’s carrying amount, includinggoodwill. The fair value of the reporting unit is determined based on estimated future discounted cash flows. Ifthe carrying amount of the reporting unit exceeds the reporting unit’s fair value, we perform the second step ofthe goodwill impairment test to determine the amount of the impairment necessary. The second step of thegoodwill impairment test involves comparing the implied fair value of our reporting unit’s goodwill with thecarrying amount of that goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the impliedfair value of that goodwill, an impairment loss is recognized in the income statement.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 2.
 Significant accounting policies (Continued)
 Intangible assets
    whenever events or changes in circumstances indicate that the carrying amount of an asset or group of assetsmay not be recoverable. Recoverability of an asset or asset group is assessed by comparing the carrying amountof an asset or group of assets to the estimated future undiscounted net cash flows of the asset or group of assets.If an asset or asset group is considered to be impaired, the impairment recognized is measured as the amount bywhich the carrying amount of the asset or group of assets exceeds the discounted future cash flows expected tobe derived from that asset or group of assets.
   Patents and trademarks
  useful lives. Expenditure incurred to extend the life of patents or trademarks is capitalized and amortized overthe remaining estimated useful life of the assets. All other expenditure is recognized in the income statement asincurred
 Capitalized software
     Emission rights
  time of issue. Purchased emission rights are recorded at acquisition cost. The emission rights allowances arecapitalized as indefinite life intangible assets.
 Environmental and asset retirement obligations
  and the amount of the liability can be reasonably estimated. Expenditure related to environmental contaminationtreatment and cleanup is expensed.
  the acquisition, construction and/or normal operation of a long-lived asset, following Statement of FinancialAccounting Standards No. 143, Accounting for asset retirement obligations(SFAS 143). The fair value ofobligations relating to dismantling and restoring production sites, in accordance with regulatory requirements, isaccrued as the obligation arises, if estimable, concurrent with the recognition of an increase in the related asset’scarrying value. The increase in the related asset’s carrying value is depreciated over the asset’s estimated usefullife. Fair value is determined by discounting estimated future cash flows at a discount rate at the time of initial


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 2.
 Significant accounting policies (Continued)
 recognition, which reflects the terms of the obligation adjusted for the entity’s credit risk. The discountassociated with the liability is accreted as a charge to income over the period leading up to the expected timingof the cash flow. The dismantling and restoration costs will be recognized in the income statement over the lifeof the related assets and will be adjusted for changes resulting from the passage of time (accretion expense) andrevisions to either the timing or amount of the original present value estimate.
   Business combinations
  acquired and liabilities assumed are recorded at fair value, reflecting their condition at the acquisition date. Theexcess of the cost of an acquisition over the fair value of the group’s interest in the net identifiable tangible andintangible assets of an entity acquired at the acquisition date is recognized as goodwill.
 Issue of shares by a subsidiary
  than the group’s average carrying amount per share, a gain or loss is recognized in the income statement in theperiod that the change of interest transaction occurs, as long as the transaction does not form part of a broadercorporate re-organization of the group.
 Investments in securities
      classified as available-for-sale securities and stated at fair value, with changes in fair value, net of related taxes,included in other comprehensive income. If the investment is disposed of, the cumulative change in fair value inrespect of that investment is recognized in the income statement. Unrealized losses, to the extent they arise froma decline in fair value that is assessed to be other than temporary, are recognized in the income statement.
     disposal of investments in securities, other than trading securities are recognized in the income statement asincurred.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 2.
 Significant accounting policies (Continued)
 Impairment of long-lived assets
  for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset orasset group may not be recoverable. Recoverability of an asset or asset group is assessed by comparing thecarrying amount of the asset or group of assets to the estimated future undiscounted net cash flows of the assetor asset group. If an asset or asset group is considered to be impaired, the impairment recognized is measured asthe amount by which the carrying amount of the asset or asset group exceeds the discounted future cash flowsexpected to be derived from that asset or group of assets.
  meets the requirements to be classified as assets held-for-sale, the carrying value of these assets is adjusteddownward, if necessary, to the estimated sales price, less costs to sell and the long-lived asset or group of assetsare reclassified as held-for-sale.
 Inventories
        Material costs incurred and allocation of directlabor and overheads
     Trade and other receivables
   Contingent obligations
  prior to issuance of the financial statements indicates that it is probable that an asset had been impaired or aliability had been incurred at the date of the financial statements and the amount of the loss can be reasonablyestimated.
 Trade and other payables
  Comprehensive income
  distributions to shareholders. The group’s comprehensive income comprises attributable earnings, foreigncurrency translation adjustments, changes in the fair value of derivative instruments designated as cash flowhedges and minimum pension liability adjustments.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 2.
 Significant accounting policies (Continued)
 Dividends payable
  Income tax
 Deferred income taxes
  are recognized for the future tax consequences attributable to differences between the financial statementcarrying amounts of assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxableincome in the years in which those temporary differences are expected to be recovered or settled. The effect ondeferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes theenactment date. Deferred tax assets are reduced by a valuation allowance to the amount that managementbelieves is more likely than not to be realized.
 Secondary Taxation on Companies (STC)
  declaration of a dividend by a South African entity. STC is recognized in the income statement when the relateddividends are declared.
 When dividends received in the current year can be offset against future dividend payments to reduce the STCliability, a deferred tax asset is recognized to the extent of the future reduction in STC.
 Turnover
        inventory that are entered into in contemplation of one another. These transactions are combined and accountedfor as a single exchange transaction. The exchange is recognized at the carrying amount of the inventorytransferred.
  transactions which are collected from customers and remitted to the governmental authority are presented on anet basis (excluded from turnover) in the income statement.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 2.
 Significant accounting policies (Continued)
 Shipping and handling fees
   Operating leases
  Research and development expenditure
  Derivative instruments
     exchange rate or similar variable) and either one or more notional amounts (i.e. a number of currencyunits, shares or other units) or payment provisions or both;
    rates, and commodity prices. The group does not deal in speculative trading of derivative instruments. The groupdesignates certain foreign currency related derivative financial instruments which hedge exposure to variabilityin cash flows that are either attributable to a particular risk associated with a recognized asset or liability or aforecasted transaction, as cash flow hedges when such derivative instruments effectively meet pre-determinedcriteria. In instances where a derivative instrument is designated as a cash flow hedge, the effective part of anychange in fair value of the derivative instrument is recognized in other comprehensive income in the statement ofchanges in shareholders’ equity. It is subsequently recognized in the income statement over the same period asthe hedged item is recognized in the income statement. The ineffective part of any change in fair value isimmediately recognized in the income statement.
  in fair value immediately recognized in the income statement. Further information on the group’s financialinstruments is included in Note 25.
 Employee benefits
 Pension plans


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 2.
 Significant accounting policies (Continued)
  with Statement of Financial Accounting Standards (SFAS) No. 87, Employers’ accounting for pensions (SFAS 87).
    individual best-estimate approach for the other assumptions that are pertinent to valuing the accrued obligations.The actuarial gains and losses, that emerge when individual plans’ performance differs from the assumptionsmade, are accumulated and amortized, over the future service lives of employees or the remaining lifeexpectancy of inactive participants, if they exceed 10% of the greater of the projected benefit obligation or themarket-related value of plan assets of the associated plan at the beginning of the year. Prior service costs orcredits that arise from plan amendments are amortized by assigning an equal amount to each future period ofservice of each employee active at the date of the amendment who is expected to receive benefits under the plan.Where all or almost all of the plans’ participants are inactive, the costs of retroactive plan amendments areamortized based on the remaining life expectancy of those participants.
  the contributions paid in respect of that plan. The balance sheet provision or prepayment will differ from thefunded status of the plan to the extent that there are unamortized actuarial gains or losses or unamortized priorservice costs or credits.
  additional minimum pension liability in accordance with SFAS 87, which requires that a liability be recognizedat year end in an amount equal to the amount by which the Accumulated Benefit Obligation (ABO) exceeds thefair value of the defined benefit pension plan assets. The additional minimum pension liability is recorded byrecognizing an intangible asset to the extent of any unrecognized prior service costs and unrecognized transitionobligations.
 Post-retirement healthcare
  with Statement of Financial Accounting Standards No. 106, Employers’ accounting for post-retirement benefitsother than pensions(SFAS 106). The projected unit credit method is used to determine the accrued benefitobligations based on completed service. The post-retirement healthcare plans are unfunded.
  individual best-estimate approach for the other assumptions that are pertinent to valuing the accrued obligations.The actuarial gains and losses that emerge when the plans’ experience differs from the assumptions made arerecognized in the period in which they arise, as permitted by SFAS 106. Prior service costs or credits that arisefrom plan amendments are amortized by assigning an equal amount to each future period of service of eachemployee active at the date of the amendment that is expected to receive benefits under the plan.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 2.
 Significant accounting policies (Continued)
 Share-based payments
  Sasol Limited over a prescribed period. The exercise price of these options equals the market price of theunderlying shares on the trading day immediately preceding the granting of the option.
 Share-
 based payment(SFAS 123(R)), were adopted under the modified retrospective transition method for the SasolShare Incentive Scheme. The group applied the modified retrospective transition method of SFAS 123(R) byadjusting the financial results of prior periods to reflect the fair value method of expensing share-based paymentsfor all awards which had not vested as at 1 July 2000, on a basis which is consistent with the pro-formadisclosures required for those periods in terms of SFAS 123. The group adopted the disclosure requirement ofSFAS 123 effective from 1 July 2000, upon listing on the NYSE and filing of its registration statement on 6 March 2003.
  Principles Board Opinion No. 25, Accounting for stock issued to employees(APB 25), and related interpretationsand disclosure requirements established by SFAS 123, Accounting for stock-based compensation,and SFAS 148,Accounting for stock-based compensation–transition and disclosure–an amendment of FASB Statement No. 123.
  calculated fair value of the award, and recognized as an expense over the employee requisite service period(generally the vesting period of the equity grant).


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 2.
 Significant accounting policies (Continued)
  shareholders, cost of sales, net (loss)/income from discontinued operations and earnings per share to the restatedresults for the years ended:
 Years ended
 30 June
 30 June
 2005
 2004
 (Rand in millions)
  44,011
 37,080
    Retained earnings, as restated
 43,553
 36,690
  3,356
 2,976
    Stated share capital, as restated
 3,814
 3,366
  9,787
 5,358
       Earnings attribuatble to shareholders, as restated
  9,719
 5,237
  (25,053)
 (23,170)
       Cost of sales, as restated
 (25,112)
 (23,282)
   117
 (130)
    Net (loss)/income from discontinued operations, as restated
  108
 (139)
 30 June
 30 June
 2005
 2004
 Rand
 Rand
 Earnings per shareBasic earnings per shareEarnings per share as previously reported
 15.94
 8.78
    Earnings per share, as restated
 15.83
 8.58
 Diluted earnings per shareDiluted earnings pe share as previously reported
 15.76
 8.74
    Diluted earnings per share, as restated
 15.65
 8.54


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 2.
 Significant accounting policies (Continued)
 Treasury shares
   Comparative information
  Use of estimates
  accepted in the United States of America. Preparation of these financial statements require group management tomake estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure ofcontingent assets and liabilities at the date of the financial statements and the reported amounts of turnover andexpenses during the reporting period. Actual results could differ from those estimates.
 Segmental reporting


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 2.
 Significant accounting policies (Continued)
  is based on the way management organizes segments within the group for making operating decisions andassessing performance. Additional geographical disclosure is provided. Segment results have been reported forthe years presented and are described in Note 3.
 Convenience translation to United States dollars
  reflects the economic substance of the underlying events and circumstances of the group. Solely for theconvenience of the reader, US dollar information has been presented on an unaudited basis for the 2006Consolidated Income Statement, Consolidated Balance Sheet, Consolidated Statement of Changes inShareholders’ Equity, Consolidated Statement of Cash Flow, and Consolidated Statement of ComprehensiveIncome. The convenience translation should not be construed as a representation that the rand amounts havebeen, could have been, or could in the future be, converted into US dollars at the noon buying rate for custompurposes as reported by the Federal Reserve Bank of New York.
 Recent accounting pronouncements
 The following recent accounting pronouncements which are applicable to the group have been issued by
 the FASB and have been adopted by the group during 2006:
 Statement of Financial Accounting Standards No. 123R, Share-based payment (SFAS 123(R)), FSP FAS123(R)-1, FSP FAS 123(R)-2, FSP FAS 123(R)-3 and FSP FAS 123(R)-4
  award of equity instruments based on the grant-date fair value of the award. The cost will be recognized over theperiod during which the employees are required to provide service in exchange for the reward.
   Statement of Financial Accounting Standards No. 151, Inventory costs, an amendment of ARB No. 43,Chapter 4 (SFAS 151)
  Bulletin (ARB) No. 43, Chapter 4, “Inventory Pricing” to clarify the accounting for abnormal amounts of idlefacility expense, freight, handling costs and spoilage. In addition, the standard requires that allocation of fixedproduction overheads to the costs of conversion be based on the normal capacity of the production facilities.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 2.
 Significant accounting policies (Continued)
 Statement of Financial Accounting Standards No. 153, Exchanges of nonmonetary assets, an amendment toAPB Opinion No. 29 (SFAS 153)
  productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not havecommercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entityare expected to change significantly as a result of the exchange. The standard requires nonmonetary exchangesto be accounted for at fair value of the assets exchanged, with gains and losses recognized, if the fair value isdeterminable and the transaction has commercial substance.
   FASB Interpretation No. 47, Accounting for conditional asset retirement obligations, an interpretation ofFASB Statement No. 143 (FIN 47)
  clarifies that the phrase “conditional asset retirement obligation,” as used in SFAS 143, refers to a legalobligation to perform an asset retirement activity for which the timing and/or method of settlement areconditional on a future event that may or may not be within the control of the company. The obligation toperform the asset retirement activity is unconditional even though uncertainty exists about the timing and/ormethod of settlement. Uncertainty about the timing and /or method of settlement of a conditional assetretirement obligation should be factored into the measurement of the liability when sufficient information exists.It is acknowledged in SFAS143 that in certain cases, sufficient information may not be available to reasonablyestimate the fair value of an asset retirement obligation. FIN 47 clarifies when an entity would have sufficientinformation to reasonably estimate the fair value of an asset retirement obligation.
   EITF Issue 06-3, How taxes collected from customers and remitted to governmental authorities should bepresented in the income statement (that is, gross versus net presentation) (EITF 06-3)
  governmental authority that is directly imposed on a revenue-producing transaction between a seller and acustomer and collected from customers and remitted to governmental authorities, should be presented in theincome statement. Taxes within EITF 06-3 can be presented either on a gross (included in revenues and costs) ora net (excluded from revenues) basis as provided in the entities accounting policy. For taxes that are reported ona gross basis disclosure should be provided of the amount of those taxes for each period for which an incomestatement is presented if those amounts are significant.
  (excluded from revenue). The EITF was considered in the presentation of the group financial statements. Theadoption of this guidance had no impact on the group’s accounting policies.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 2.
 Significant accounting policies (Continued)
 EITF Issue 04-6, Accounting for stripping costs incurred during production in the mining industry (EITF 04-6)
  incurred during the production phase of a mine. In March 2005, the EITF reached a consensus (ratified by theFASB) that stripping costs incurred during the production phase of a mine are variable production costs thatshould be included in the costs of inventory produced during the period that the stripping costs are incurred.
  material impact on the group’s results of operations, financial position or liquidity or the group’s accountingpolicies.
 EITF Issue No. 04-13, Accounting for purchases and sales of inventory with the same counterparty (EITF 04-13)
  appropriate to measure purchases and sales of inventory at fair value and record the effect of this transaction incost of sales and turnover and when these transactions should be recorded as exchanges measured at book valueof the item sold. It was concluded that purchases and sales of inventory with the same counterparty that areentered into in contemplation of one another should be combined and recorded as exchanges measured at bookvalue of the items sold.
   EITF Issue No. 03-13, Applying the conditions in Paragraph 42 of FASB Statement No. 144, Accounting forthe impairment or disposal of long-lived assets, in determining whether to report discontinued operations(EITF 03-13)
  paragraph 42 of Statement of Financial Accounting Standards No. 144, Accounting for the impairment ordisposal of long-lived assets, have been met for the purposes of classifying the results of operations of an entitythat either has been disposed or classified as held for sale as discontinued operations.
   The following recent accounting pronouncements which are applicable to the group but not yet effective havebeen issued by the FASB and have not been adopted by the group:
 FASB Interpretation No. 48, Accounting for uncertainty in income taxes–an interpretation of FASBStatement No. 109 (FIN 48)
  for the financial statement recognition and measurement of a tax position taken or expected to be taken in a taxreturn. The evaluation of a tax position in accordance with this interpretation firstly requires the determinationwhether it is more likely than not that a tax position will be sustained upon examination, based on the technicalmerits of the position and secondly the position is measured to determine the amount of benefit to be recognizedin the financial statements. The Interpretation also provides guidance on derecognition, classification, interestand penalties, accounting in interim periods, disclosure, and transition. FIN 48 is effective in fiscal yearsbeginning after 15 December 2006. The provisions of FIN 48 are to be applied to all tax positions upon initialadoption, with the cumulative effect adjustment reported as an adjustment to the opening balance of retainedearnings.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 2.
 Significant accounting policies (Continued)
   FASB Staff Position No. FAS 13-1, Accounting for rental costs incurred during a construction period (FSP No. 13-1)
  associated with operating leases that are incurred during a construction period. The guidance requires rentalcosts associated with ground or building operating leases that are incurred during a construction period to berecognized as rental expense. The rental costs shall be included in income from continuing operations. FSP FAS 13-1 is effective for reporting periods beginning after 15 December 2005 and will be adopted by thegroup in the year ended 30 June 2007.
   FASB Staff Position No. FAS 115-1 and FAS 124-1, The meaning of other-than-temporary impairment andits application to certain investments (FSP FAS 115-1 and FAS 124-1)
  determination as to when an investment is considered impaired, whether that impairment is other than temporary,and the measurement of an impairment loss. The guidance also includes accounting considerations subsequent tothe recognition of an other-than-temporary impairment and requires certain disclosures about unrealized lossesthat have not been recognized as other-than-temporary impairments. FSP FAS 115-1 and FAS 124-1 is effectivefor reporting periods beginning after 15 December 2005 and will be adopted by the group in the year ended 30 June 2007.
   FASB Staff Position No. FIN 46(R)-6, Determining the variability to be considered in applying FASB Interpretation No. 46(R) (FSP FIN 46(R)-6)
  considered in applying FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable InterestEntities(FIN 46(R)). The variability to be considered in applying FIN 46(R) is based on an analysis of thedesign of the entity considering the nature of the risks in the entity, determining the purpose for which the entitywas created and determining the variability the entity is designed to create and pass along to its interest holders.FSP FIN 46(R)-6 is effective the first day of the first reporting period beginning after 15 June 2006.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 2.
 Significant accounting policies (Continued)
 Statement of Financial Accounting Standards No. 158, Employers’ accounting for defined benefit and otherpostretirement plans, an amendment to FASB Statements No. 87, 88, 106 and 132(R) (SFAS 158)
  employer to recognize the over-funded or under-funded status of a defined benefit postretirement plan (otherthan a multiemployer plan) as an asset or liability in its statement of financial position and to recognize changesin that funded status in the year in which the changes occur through comprehensive income. This statement alsoimproves financial reporting by requiring an employer to measure the funded status of a plan as of the date of itsyear-end statement of financial position, with limited exceptions. SFAS 158 requires a company to initiallyrecognize the funded status of a defined benefit postretirement plan and to provide the required disclosures as ofthe end of the year ending after 15 December 2006. The requirement to measure plan assets and benefitobligations as of the date of the employer’s fiscal year-end is effective for years ending after 15 December 2008.
   Staff Accounting Bulletin No. 108, Considering the effects of prior year misstatements when quantifyingmisstatements in current year financial statements (SAB108)
  of prior-year uncorrected misstatements should be considered when quantifying misstatements in the curent yearfinancial statements. SAB 108 requires registrants to quantify misstatements using both an income statement(rollover) and balance sheet (iron curtain) approach and evalute whether either approach results in amisstatement that, when all relevant quantitative and qualitative factors are considered, is material. If prior errorsthat have been previously considered immaterial now are considered material based on either approach, norestatement is required so long as  management properly applied its previous approach and all relevant facts andcircumstances were considered. If prior years are not restated, the cumulative effect adjustment is recorded inopening accumulated earnings (deficit) as of the beginning of the fiscal year of adoption. SAB 108 is effectivefor fiscal years ending on or after 15 November 2006, with earlier adoption encouraged. The group is currentlyin the process of assessing the impact the adoption of SAB 108 will have on its financial statements.
 3.
 Segmental analysis
 Reporting segments
  Committee (GEC) to make key operating decisions and assess performance as noted in our significantaccounting policies.
  transfer the comonomers business, which does not form part of the divestiture group, to the solvents businessunit. Comparative information has been restated accordingly.
  undertakes and the products they manufacture and market. They are managed separately because each businessutilizes different technology, manufacturing and marketing strategies.
  accounts for inter-segment sales and transfers as if the sales and transfers were entered into under the sameterms and conditions as would have been entered into in a market related transaction.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 3.
 Segmental analysis (Continued)
  maker for purposes of making decisions about allocating resources to the segment and assessing its performance.The measurements of reportable segments’ profitability and assets are reconciled to the amounts reported in thegroup’s consolidated financial statements prepared in accordance with accounting principles generally acceptedin the United States of America.
  The group is promoting and marketing its gas-to-liquids (GTL) technology for converting remote or flarednatural gas into new-generation, low-emission GTL diesel, GTL naphtha and other products. It is envisaged thatSasol Synfuels International (SSI) through the recent development of the GTL plants in Qatar and Nigeria wouldcontribute significantly to the group results and will contribute to the growing of a global GTL business in thefuture. Consequently the chief operating decision maker has chosen to include SSI as a reportable operatingsegment. SSI did not meet any of the quantitative thresholds but has been considered reportable and has beenseparately disclosed in terms of SFAS 131, Disclosures about segments of an enterprise and related information,as the chief operating decision maker believes that the information about SSI would be useful to readers of thefinancial statements.
  information of the group’s reportable segments, is presented in accordance with International FinancialReporting Standards (IFRS). Since the IFRS financial information is the basis on which segmental financialdecisions are based, resources are allocated and performance is assessed, this is the accounting basis for segmentreporting that is required to be disclosed.
  financial statements prepared in accordance with accounting principles generally accepted in the United States ofAmerica for all years presented.
 Sasol Mining
    agreements. Turnover is recognized upon delivery of the coal to the customer, which, in accordance with therelated contract terms is the point at which the title and risks and rewards of ownership pass to the customer,prices are fixed or determinable and collectibility is reasonably assured. Shipping and handling costs areincluded in turnover when billed to customers in conjunction with the sale of the product.
   Sasol Synfuels
  using in-house technology to convert this into a wide range of liquid fuels intermediates and petrochemicals.Sasol Synfuels also provides chemical feedstock to, amongst others, Sasol Olefins & Surfactants, SasolPolymers and Sasol Solvents.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 3.
 Segmental analysis (Continued)
  determinable from the agreements. Turnover is recognized for the liquid fuel intermediates and petrochemicalswhen the title and risks and rewards of ownership pass to the customer, which is when the product has passedover the appropriate weigh bridge or flow meter, prices are fixed or determinable and collectibility is reasonablyassured.
 Sasol Oil
    and commercial sales including sales to other oil companies. The prices are regulated and fixed by South Africanlaw for retail sales, and the prices are fixed and determinable according to the specific contract with periodicprice adjustments for commercial sales and sales to other oil companies. Laboratory tests of the fuelspecifications and content are performed prior to delivery. Turnover is recognized under the followingarrangements:
  customer site, which is the point where the risks and rewards of ownership and title of the producttransfer to the customer, and collectibility is reasonably assured.
  which is the point where the risks and rewards of ownership of the product transfer to the customer. Titleunder these contracts is retained to enable recovery of the goods in the event of customer default onpayment. The title to the goods does not enable the group to dispose of the product or rescind thetransaction, and cannot prevent the customer from selling the product.
    Sasol Gas
    recognized at the intake flange of the customer where it is metered, which is the point at which the title and risksand rewards of ownership passes to the customer, and where prices are determinable and collectibility isreasonably assured. Gas analysis and tests of the specifications and content are performed prior to delivery.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 3.
 Segmental analysis (Continued)
 Sasol Synfuels International
  business ventures based on Sasol’s Fischer-Tropsch synthesis technology. SSI is also involved in thedevelopment of GTL fuels and production of other chemical products from GTL derived feedstock. SSI is currently involved in the establishment of two GTL production facilities in Qatar and Nigeria and isconducting feasibility studies at various other locations around the world.
   Sasol Polymers
   Sasol Solvents
   Sasol Olefins & Surfactants (discontinued operations)


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 3.
 Segmental analysis (Continued)
  sell much of their products under contracts at prices determinable from such agreements. Turnover is recognizedupon delivery to the customer which in accordance with the related contract terms, is the point at which the titleand risks and rewards of ownership transfer to the customer, prices are determinable and collectibility isreasonably assured. Turnover on consignment sales is recognized on consumption by the customer, when titleand the risks and rewards of ownership pass to the customer, prices are determinable and collectibility isreasonably assured. Product quality is safeguarded through quality assurance programs. The date of delivery isdetermined in accordance with the contractual agreements entered into with customers which are brieflysummarized as follows:
 Delivery terms
 Title and risks and rewards of ownership pass to the customer
  When products are loaded into the customer’s vehicle or unloadedfrom the seller’s storage tanks.
  On delivery of products to a specified location (main carriage is paidfor by the seller).
  When products are loaded into the transport vehicle – customer isresponsible for shipping and handling costs.
 Cost Insurance Freight (CIF) andCost Freight Railage (CFR)
 When products are loaded into the transport vehicle – seller isresponsible for shipping and handling costs which are included in theselling price.
     Other Businesses
  and marketing of wax and wax related products, manufacturing of ammonia and its derivatives, research anddevelopment activities, synthesis gas, manufacturing of phenolics and cresylics and central administrationactivities.


F–30
 Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 3.
 Segmental analysis (Continued)
 The results of the reporting segments were as follows:
 Year ended 30 June 2006
 Year ended 30 June 2005
 Year ended 30 June 2004
 Inter-
 Inter-
 Inter-
 Note
 External
 segment
 Total
 External
 segment
 Total
 External
 segment
 Total
 turnover turnover turnover turnover turnover turnover turnover turnover turnover
 (Rand in millions)
  1,517
 3,949
 5,466
        915
 24,734
 25,649
        32,243
 544
 32,787
        1,663
 1,546
 3,209
        161
 –
 161
        7,537
 102
 7,639
        10,485
 1,181
 11,666
        9,329
 4,242
 13,571
         63,850
 36,298
 100,148
         (36,298)
       63,850
   Reconciliation of segment
 information to consolidated financial statements
 Adjustments:Equity accounting and
 reversal of proportionate consolidation
 1
 (1,993)
     2
 –
   As reported in consolidated
 income statements
 61,857


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 3.
 Segmental analysis (Continued)
  Year ended
 Year ended
 Year ended
 30 June 2006
 30 June 2005
 30 June 2004
 Operating
 Operating
 Operating
 Note
 profit/(loss)
 profit/(loss)
 profit/(loss)
 (Rand in millions)
  1,180
    13,499
    2,432
    1,526
    (642)
    822
    873
    1,042
    20,732
   Reconciliation of segment information to
 consolidated financial statements
 Adjustments:Equity accounting and reversal of proportionate
  1
 (123)
    2
 –
    3
 (15)
    4
 (60)
    5
 (4)
    6
 –
    7
 36
    8
 134
    10
 –
    (12)
   As reported in consolidated income statements
 20,688


F–32
 Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 3.
 Segmental analysis (Continued)
 The results of the reporting segments were as follows (continued):
 Year ended 30 June 2006
 Year ended 30 June 2005
 Year ended 30 June 2004
 Cash flow information
 Cash flow information
 Cash flow information
 Depreciation
 Depreciation
 Depreciation
 Note
 Additions
 and
 Additions
 and
 Additions
 and
 to PPE*
 amortisation
 to PPE*
 amortisation
 to PPE*
 amortisation
 (Rand in millions)
  624
 (546)
      2,800
 (661)
      724
 (463)
      138
 (258)
      1,735
 (17)
      4,364
 (404)
      1,037
 (395)
      612
 (656)
      12,034
 (3,400)
       992
 (768)
      13,026
 (4,168)
     Reconciliation of segment
 information to consolidated financial statements
 Adjustments:Equity accounting and reversal of
  1
 (3,707)
 169
      2
 –
 –
      3
 –
 80
      4
 (61)
 37
      5
 292
 21
      7
 –
 (3)
      8
 (26)
 15
      11
 (56)
 10
      235
 (83)
      –
 669
     As reported in consolidated
 financial statements
 9,703
 (3,253)


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 3.
 Segmental analysis (Continued)
 The assets and capital commitments of the reporting segments were as follows:
 Year ended 30 June 2006
 Year ended 30 June 2005
 Year ended 30 June 2004
 Note
 Total
 Capital
 Total
 Capital
 Total
 Capital
 assets
 commitments
 assets
 commitments
 assets
 commitments
 (Rand in millions)
  4,176
 682
      14,832
 2,703
      13,129
 460
      5,722
 212
      9,320
 4,110
      18,700
 2,212
      12,625
 1,411
      11,723
 2,076
      90,227
 13,866
       11,836
 762
      102,063
 14,628
     Reconciliation of segment
 information to consolidated financial statements
 Adjustments:Equity accounting and reversal of
  1
 (8,984)
 –
      2
 –
 –
      3
 (1,248)
 –
      4
 (372)
 –
      5
 (732)
 –
      7
 981
 –
      9
 406
 –
      11
 285
 –
      12
 1,136
 –
      13
 (205)
 –
      14
 129
 –
      429
 –
     As reported in consolidated
 financial statements
  93,888
 14,628
     F–33


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 3.
 Segmental analysis (Continued)
 Notes on the reconciliation of segment information to the consolidated financial statements
  Equity accounting and reversal of proportionate consolidation
  with respect to incorporated joint ventures for IFRS reporting purposes. Under US GAAP, the equity method ofaccounting is applied.
  Entities previously not consolidated
  reporting purposes and for US GAAP. (See Note 4 Acquisitions for details relating to the acquisition of theremaining 75.63% of NPH).
  Business combinations
  value adjustments differs under US GAAP to those recorded for IFRS reporting purposes because transactionswere not accounted for at the same effective date. This will have a continuing impact on depreciation of theseitems.
  amortized over the remaining useful life of non-financial assets acquired. With effect from 1 July 2004, negativegoodwill was written off against opening retained earnings. US GAAP requires that negative goodwill beallocated to reduce the amounts of certain non-financial assets acquired and any excess amount remaining isrecognized as an extraordinary gain in the period that it arises.
  Research and development expensed
  costs are recognized in the income statement while certain development costs on capital projects are capitalized.US GAAP requires that certain of these development costs be recognized in the income statement as incurred.
  Derivative instruments
    at 30 June 2006, 30 June 2005 and 30 June 2004 did not meet the hedge accounting criteria under US GAAPand as such hedge accounting was not applied.
  capitalized to property, plant and equipment. Under US GAAP, the translation gains and losses arising on cashflow hedge accounting are recognized in equity, and are amortized over the useful life of the underlying asset.
  Foreign currency translation
  reporting purposes and under US GAAP. As a result the translation gains and losses arising on translation ofmonetary assets and liabilities of this entity were recognized in the income statement.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 3.
 Segmental analysis (Continued)
  Impairment
  recognized for IFRS reporting purposes is reversed under US GAAP. For IFRS reporting purposes, property,plant and equipment is considered to be impaired when its carrying value exceeds the discounted estimatedfuture cash flows, whereas under US GAAP an initial impairment review is required to be performed on anundiscounted basis.
  Asset retirement obligations
  retirement obligations are discounted at a risk free discount rate which is reassessed annually, whereas under US GAAP, a credit adjusted rate is used for the entire period and not reassessed. Also, for IFRS reportingpurposes, the accretion charge is recognized as an interest expense in the income statement in the year that itwas incurred. Under US GAAP the accretion charge is recognized as an operating expense.
  Pension asset
  unamortized prior service cost is recognized in the income statement in the year that the obligation arose. Under US GAAP, the unamortized prior service cost is recognized over the expected remaining working life ofparticipants, or where almost all of the plans’ participants are inactive, the unamortized prior service cost isrecognized over the remaining life expectancy of those participants.
 Gain arising from issuance of subsidiary’s shares
  subsidiary’s shares was reflected in operating income. Under US GAAP this gain has been reflected as non-operating income.
 Capital leases
   Deferred tax asset classification
     Assets held for sale
  IFRS and US GAAP due to fair value adjustments made at acquisition date and different impairment valuesbeing recorded.
 Unamortized borrowing costs
  costs associated with the arrangement of long-term debt financing are set-off against long-term debt. Under US GAAP, these costs are reflected as prepaid expenses.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 3.
 Segmental analysis (Continued)
 Geographic information
  reported by location of customer and other assets and expenditure by the location of the operating activities. Theprincipal geographic markets and operating activities are in Europe, Asia, North America and South Africa.Within the principal geographic market of Europe, the majority of assets are located in and turnover andoperating profit mainly derived from Germany and Italy. Within the principal geographic market of NorthAmerica, the majority of assets are located in and external turnover and operating profit are derived from theUnited States of America.
 Income statement
 Balance sheet
 Turnover
 Operating
 Aditions to
 Total
 Capital
 2006
 (external)
 profit/(loss)
 PPE*
 assets
 commitments
 (Rand in millions)
  2,614
 13
 108
 6,752
 71
  544
 (83)
 –
 1,981
 –
  1,211
 152
 –
 655
 31
  3,911
 501
 5
 3,785
 –
 Europe
 8,280
 583
 113
 13,173
 102
  86
 24
 1,590
 4,124
 1,190
  59
 (104)
 449
 3,847
 501
  1,228
 141
 –
 534
 –
 Middle East and India
 1,373
 61
 2,039
 8,505
 1,691
 Far East
 1,491
 10
 –
 1,110
 –
  2,861
 16
 22
 5,546
 9
  171
 4
 –
 206
 –
 North America
 3,032
 20
 22
 5,752
 9
 South America
 504
 30
 –
 223
 –
 Southeast Asia and Australasia
 1,334
 174
 3
 1,344
 –
  174
 483
 85
 3,381
 1,384
  190
 (6)
 1,290
 5,096
 3,783
  4,627
 788
 102
 920
 107
 Rest of Africa
 4,991
 1,265
 1,477
 9,397
 5,274
 Republic of South Africa
 42,845
 18,589
 8,380
 62,559
 6,790
 Total segments
 63,850
 20,732
 12,034
 102,063
 13,866


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 Income statement
 Balance sheet
 Turnover
 Operating
 Aditions to
 Total
 Capital
 2005
 (external)
 profit/(loss)
 PPE*
 assets
 commitments
 (Rand in millions)
  2,423
 252
 89
 5,848
 69
  584
 177
 –
 3,861
 –
  1,056
 165
 48
 440
 –
  4,134
 547
 11
 2,662
 –
 Europe
 8,197
 1,141
 148
 12,811
 69
  69
 (19)
 823
 1,823
 2,427
  41
 127
 872
 2,633
 1,503
  987
 139
 –
 482
 –
 Middle East and India
 1,097
 247
 1,695
 4,938
 3,480
 Far East
 1,619
 78
 –
 859
 –
  2,089
 84
 13
 6,665
 14
  76
 7
 –
 153
 –
 North America
 2,165
 91
 13
 6,818
 14
 South America
 371
 8
 –
 249
 –
 Southeast Asia and Australasia
 1,294
 85
 3
 1,456
 –
  44
 75
 87
 3,970
 427
  116
 29
 460
 1,964
 5,076
  2,282
 439
 68
 888
 145
 Rest of Africa
 2,442
 543
 615
 6,822
 5,648
 Republic of South Africa
 35,312
 12,190
 9,368
 53,507
 9,425
 Total segments
 52,497
 14,383
 11,842
 87,460
 18,636


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 Income statement
 Balance sheet
 Turnover
 Operating
 Aditions to
 Total
 Capital
 2004
 (external)
 profit/(loss)
 PPE*
 assets
 commitments
 (Rand in millions)
  4,646                
  81                 
  97
 5,108                 
  34
  –                  
  6                   
  –
 3,302                  
  –
  –                
  62
 170
 634
 –
  2,641
 115
 3
 2,076
 4
 Europe
 7,287
 264              
  270
 11,120
 38
  93                  
  2
 474
 711
 2,819
  47
 –            
  1,085
 1,510            
  2,010
  993
 96
 1
 358
 –
 Middle East and India
 1,133
 98
 1,560
 2,579
 4,829
 Far East
 1,248
 142
 –
 674
 –
  1,628
 17
 9
 5,944
 15
  442
 2
 –
 118
 –
 North America
 2,070
 19
 9
 6,062
 15
 South America
 340
 1
 –
 161
 –
 Southeast Asia and Australasia
 1,093
 42
 34
 1,456
 –
  32
 (207)
 1,021
 4,220
 305
  155
 28
 593              
  844
 3,472
  2,759
 387
 74
 484
 25
 Rest of Africa
 2,946
 208
 1,688
 5,548
 3,802
 Republic of South Africa
 28,882
 8,362
 6,961
 45,440
 15,863
 Total segments
 44,999
 9,136
 10,522
 73,040
 24,547


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 4.
 Acquisitions and disposals of businesses
 Acquisitions
 2006 Acquisitions
    Wax International AG obtained effective control of the business and therefore consolidated the entity fromJanuary 2006.
  2005 Acquisitions
  2004 Acquisitions
 Naledi Petroleum Holdings (Pty) Limited
  (Pty) Limited (NPH) for a total consideration of R369 million of which R223 million was settled in cash andR146 million by the issue of Sasol Oil (Pty) Limited shares. In terms of the transaction, 22 shares in Sasol Oil(Pty) Limited (representing 2% of the issued shares of the company) were issued to some of the previousshareholders of NPH. The issue of these shares had the effect of diluting Sasol’s interest in Sasol Oil (Pty)Limited by 2.04%. The effect of the dilution of the group’s interest in Sasol Oil (Pty) Limited resulted in a gainof R108 million being realized. NPH through its Excel brand supplies fuel and lubricants to retail andcommercial markets.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 Book value
 Fair value
 Total
 %  acquired
 at acquisition
 adjustments
 fair value
 75.63%
 (Rand in millions)
      Accounts receivable, net of allowance for doubtful accounts
         Current assets
                             Non-current assets
     Total assets acquired
                   Total liabilities assumed
     Net assets acquired
     Goodwill
  Consideration paid
     acquired the remaining 48,05% shares in G.D. Portbury Limited (Dubai) trading as Sasol Gulf for a cashconsideration of US$ 2.7 million (R17 million).
   Disposals
 2006 Disposals
  was sold to iGas Limited for a consideration of R595 million. The group recorded a profit on disposal of R269 million.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 2005 Disposals
  investment in Euro Schumann Sasol Wax GmbH and simultaneously acquired a 100% investment in Sasol WaxDanmark APS and a 31.25% direct interest in Paramelt RMC BV.
         2004 Disposals
  Sasol Servo BV (Sasol Servo)
  Elementis Plc for Euro 27 million (R204 million) in cash. The group recorded a profit on disposal of Euro 3.7 million (R28 million).
  Sasol as part of the Condea acquisition in 2001. Sasol Servo had an annual turnover of approximately Euro 120 million, and consists of four divisions: coating additives, oilfield chemicals, chemicals and specialitysurfactants, and pulp and paper chemicals.
   Energy Storage Technologies Inc. (EST)


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 5.
 Operating profit
  30 June
 30 June
 30 June
 2006
 2005
 2004
 (Rand in millions)
  263
   
 2,990
    770
    98
    2,122
    124
    93
        93
    50
    264
    (262)
             98
    21
         208
    62
    277
        311
    119
   6.
 Finance costs
 30 June
 30 June
 30 June
 2006
 2005
 2004
 (Rand in millions)
  1,152
   Less:
 (949)
   203
   Amounts capitalized to:Property, plant and equipment
 (587)
    (362)
   (949)


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 7.
 Income tax
 30 June
   2006
   (Rand in millions)
 Income/(loss) before tax
 South Africa
 19,396
 13,432
 9,721
 Foreign
 1,359
 860
 (1,083)
 20,755
 14,292
 8,638
 Income tax expense from continuing operations
 Current tax
 – South African normal tax
 (5,607)
 (3,325)
 (2,842)
 – Secondary tax on companies (STC)
 (551)
 (375)
 (343)
 – Foreign
 (386)
 (420)
 (158)
 Total current tax
 (6,544)
 (4,120)
 (3,343)
 Deferred tax
 – South African
 (123)
 (693)
 202
 – Foreign
 215
 (73)
 19
 Total deferred tax income/(expense)
 92
 (766)
 221
 Income tax expense for the year
 (6,452)
 (4,886)
 (3,122)
 Total income tax expense differs from the amount computed by applying the South African normal tax rate
 to income from continuing operations before tax. The reasons for these differences are as follows:
 30 June
   2006
   Reconciliation of tax rate
 %
 %
 %
 South African normal tax rate
 29.0
 30.0
 30.0
 Increase in rate of tax due to:
 – STC
 2.6
 2.6 4.0
 – Different foreign tax rates
 –
 0.1
 –
 – Prior year adjustments
 0.2
 0.6
 –
 – Disallowed expenditure
 1.7
 2.6
 3.6
 33.5
 35.9
 37.6
 Decrease in rate of tax due to:
 – Prior year adjustments
 –
 –
 (0.8)
 – Different foreign tax rates
 (0.2)
 –
 –
 – Exempt income
 (0.9)
 (1.4)
 (0.7)
 – Investment incentive allowance
 –
 (0.3)
 –
 – Change in tax rate
 (1.3)
 –
 –
 Effective tax rate
 31.1
 34.2
 36.1
 F–43


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
  30 June
 30 June
 2006
 2005
 (Rand in millions)
   284
   51
   94
   1,830
   101
   1,290
   354
  4,004
  Less:
 (307)
  Total deferred tax assets
 3,697
    (428)
   (390)
   (115)
   (7,470)
   (257)
  Total deferred tax liabilities
 (8,660)
   (4,963)
   30 June
 30 June
 2006
 2005
 (Rand in millions)
  267
   869
   (270)
   (5,829)
  (4,963)
   (4,660)
   439
   6
   (460)
   (288)
  (4,963)
   R5,690 million, of which R32 million will expire in 2013, R135 million between 2020 and 2026, and R5,523 million can be carried forward indefinitely. A portion of the calculated tax losses carried forward may besubject to various statutory limitations as to its usage in the event of significant changes in ownership or changein principal operating activity of the entity.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
    jurisdictional area, the group has recorded a valuation allowance from continuing operations of R307 million(2005 – R671 million, 2004 – R414 million). R433 million of the valuation allowance relating to O&S wastransferred to discontinued operations. The net change in the total valuation allowance for continuing operationsduring 2006 was an increase of R69 million. In 2005 and 2004, the net change in the valuation allowance wasR257 million and R65 million respectively.
     Unremitted earnings of foreign subsidiaries and foreign corporate joint ventures
  remittances of undistributed earnings of foreign subsidiaries or foreign corporate joint ventures because it isexpected that such earnings will be permanently reinvested in these foreign entities. The distribution of theseundistributed earnings of R3,787 million (2005 – R1,539 million, 2004 – R1,010 million) by these entitieswould result in income and foreign withholding taxes of approximately R51 million (2005 – R80 million,2004 – R55 million).
 Secondary taxation on companies (STC)
       R45,240 million, 2004 – R38,163 million) would be subject to STC, the group would have to pay additionaltaxes of R6,275 million (2005 – R5,027 million, 2004 – R4,240 million). If all the earnings attributable toshareholders for the year ended 30 June 2006 were distributed, the additional estimated STC charge would beR732 million (2005 – R789 million, 2004 – R478 million). The group expects that R1,877 million undistributedearnings earned before 1 April 1993 of two dormant companies could be distributed without being subject toSTC of R209 million.
   Change in South African Tax Rate
  all of our South African registered companies will be assessed at a tax rate of 29% for the year ended 30 June2005 and all years thereafter.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 Year ended 30 June 2005
 As reported
 As adjusted
 Change
 (Rand in millions)
 Balance sheetIncome tax payable
        Income statementIncome tax
                Earnings per share
 (Rands)
         8.
 Earnings per share
  average number of ordinary shares outstanding for the period. Diluted earnings per share reflect the potentialdilution that could occur if all of the group’s outstanding share options, to the extent that the effect would bedilutive, were exercised.
    earnings per share to the diluted weighted average number of shares used in the calculation of diluted earningsper share:
 30 June
 30 June
 30 June
 2006
 2005
 2004
 (Rand in millions)
 Earnings attributable to shareholdersIncome from continuing operations
 14,159
    (2,860)
   Earnings attributable to shareholders
 11,299
   Weighted average number of shares:
 (Number of shares)
  620.0
    10.2
    630.2


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 9.
 Cash and cash equivalents and cash restricted for use
 Cash and cash equivalents
 30 June
 30 June
 2006
 2005
 (Rand in millions)
  2,237
   259
   311
   1
  2,808
  Cash restricted for use
  129
   119
   –
   17
   6
  271
         to fund statutory obligations for mining rehabilitation which is to take place during the year ending 30 June 2007.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 10.
 Trade receivables, other receivables and prepaid expenses
 30 June
 30 June
 2006
 2005
 (Rand in millions)
  7,036
   (147)
   6,889
   1,729
   766
   780
   192
   142
   109
   25
   82
   546
  11,260
  Roll forward of provision for doubtful debts
  200
   33
   (90)
   5
   9
   (10)
   147
   materials are moved from the refineries. The recoverable amounts are only recorded to the extent that the risksand rewards of ownership of the materials have been transferred.
 11.
 Inventories
 30 June
 30 June
 2006
 2005
 (Rand in millions)
  1,565
   316
   1,013
   181
   4,548
   55
  7,678
  Roll forward of provision for inventory obsolescenceBalance at beginning of year
 195
   70
   (18)
   11
   8
   (94)
   172
 195


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 12.
 Discontinued operations
  technology or securing integrated and highly competitive feedstock positions. The Sasol Olefins & Surfactants(O&S) business is only partially integrated upstream into feedstocks and has not adequately provided theintegration benefits required.
    year. An information memorandum was released during May 2006 and indicative bids received during June 2006. The bids received on 31 August 2006 confirmed the valuation performed by management and thebusiness was accordingly written down by R3,110 million before tax to its fair value less costs to sell.
 30 June
 2006
 The disposal group includes the following asssets and liabilities
 (Rand in millions)
  384
  116
  3,524
  3,953
  83
  181
  41
  269
  3,128
 Assets held for sale
 11,679
  53
  1,999
  1,163
  16
  1
  438
  13
  28
  384
  630
  639
 Liabilities in disposal group held for sale
 5,364


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 30 June
 30 June
 30 June
 2006
 2005
 2004
 (Rand in millions)
 The results of operations of the O&S business were as follows
  18,563
    10
    36
  Turnover
 18,609
    317
    (11)
    (17,228)
    (5)
    (4,459)
   Operating costs and expenses
 (21,692)
   Operating (loss)/profit
 (2,777)
   Other income/(expenses)
  –
 
  24
    (108)
   (Loss)/income before tax, losses of equity accounted investees
 (2,861)
    2
   (Loss)/income before losses of equity accounted investees
 (2,859)
    (1)
   Net (loss) /income from discontinued operations (including fair value write-down)
 (2,860)
   Included in the operating expenses of the O&S business are the following capital items
  (131)
    (14)
    (3,110)
    (2,991)
  (6)
  (113)
 (3,255)
   The cash flows attributable to O&S were as follows
  1,275
    (980)
    (17)


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 13.
 Investments in securities
 Marketable equity and debt securities
      30 June 2006
 30 June 2005
 Amortised
 Amortised
 cost
 Fair value
 cost
 Fair value
 (Rand in millions)
  240
 240
     Unlisted equity securities
  30 June
 30 June
 Holding
 2006
 Holding
 2005
 %
 (Rand in
 %
 (Rand in
 millions)
 millions)
   –
 *
    139
    13
  Unlisted investments
 152
  Held-to-maturity investments
 240
  Total investments
 392
   currently in the process of discharging its liabilities and settling all claims in full. The company will beliquidated. It is expected that Sasol’s initial investment in the company will be repaid within the next year, oncethis process has been completed. The amount has been classified as a short-term investment.
   that there was an impairment charge of R37 million of which R35 million is directly attributable to Black TopHoldings (Pty) Limited.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 14.
 Investments in equity accounted investees
   30 June 2006
 30 June 2005
 Ownership
 Carrying value
 Ownership
 Carrying value
 %
 (Rand in millions)
 %
 (Rand in millions)
 Operational
  Sasol Dia Acrylates South Africa (Pty) Limited  and Sasol Dia Acrylates (Pty) Limited
 50%-75%
 1,168
    50%
 530
    12%
 424
    40%
 397
    50%
 321
    31%
 106
    40%
 99
    70%
 66
    50%
 50
    49%
 43
   Sasol Petroleum Mocambique Limitada (Petromoc)
 49%
 10
   Developing
   50%
 1,985
    37.5%
 1,741
    49%
 1,218
   Other – not considered signficant in aggregate
 49
  8,207
  *
 Operational equity accounted investees refer to entities that have commenced their planned principal operations.
 ** Developing equity accounted investees are investments where the investees still have activities in progress that are
 necessary to commence their planned principal operations.
    investments in developing equity accounted investees while the investee had activities in progress necessary tocommence its planned principal operations. The investees’ activities included the use of funds to constructqualifying assets for its operations.
  (2005 – R345 million). The movement was primarily attributable to the Petlin, Optimal, and Sasol-Huntsmanjoint ventures. Included in the carrying value of equity accounted investees is goodwill of R213 million (2005 – R196 million).
  that restricts Sasol’s ability to exercise control over the operations or assets due to certain approval or veto rightsgranted to those minority shareholders. The shareholder agreements entered into by Sasol provide the minorityshareholders with substantive participating interests in the operations of this investee such that Sasol is precludedfrom exercising control.
  its gains by selling the investments. Although unlikely and contrary to Sasol’s strategy, such disposal wouldresult in an insignificant amount of capital gains tax on recognized gains.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
  so that substantially none of their activities either involve or are conducted on behalf of the reporting enterpriseand its related parties as specified in FIN 46 (R).Hence Sasol has no ability to control these entities and doesnot substantially benefit from the shareholding, as the sales to Sasol are less than 30%. The shareholderagreements entered into by Sasol provide the other shareholder with equal substantive participating interests inthe operations of this investee such that Sasol is precluded from exercising control.
 Aggregated summarized financial information in respect of our GTL joint ventures (Escravos GTL and Oryx GTL):
 30 June
 30 June
 30 June
 2006
 2005
 2004
 (Rand in millions)
  1,054
    15,586
    16,640
    1,018
    10,068
    11,086
   –
    –
    36
  15.
 Goodwill and intangible assets
 Patents
 and
 Emission
 Capitalised
 Other
 Goodwill
 trademarks
 rights
 software
 intangibles
 Total
 (Rand in millions)
 CostBalance at 30 June 2004
              Transferred from property, plant and equipment
                               Balance at 30 June 2005
 277
 427
 –
 1,135
 505
 2,344
 Additions
  4 305 10
 65 384
 Transferred from/(to) property, plant
 and equipment
  16
 – 74 (91)
 (1)
 Acquisition
 of
 businesses
 6 – – –
  6
 Disposals
  (4)
 –
 (5)
 (16)
 (25)
 Impairment
 (9)
 (3)
 (101)
 – –
 (113)
 from continuing operations
 (3)
 –
 (18)
 –
 –
 (21)
 from discontinued operations
 (6)
 (3)
 (83)
 –
 –
 (92)
 Fair value write-down
 (6)
 (113)
 –
 –
 –
 (119)
 Transferred to discontinued operations
 –
 (289)
 (162)
 (194)
 (57)
 (702)
 Foreign currency translation
 5
 80
 –
 15
 131
 231
 Balance at 30 June 2006
 273
 118
 42
 1,035
 537
 2,005


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 Patents
 and
 Emission
 Capitalised
 Other
 Goodwill
 trademarks
 rights
 software
 intangibles
 Total
 (Rand in millions)
 AmortizationBalance at 30 June 2004
                        Transferred from property, plant and equipment
                  Balance at 30 June 2005
  253
 – 773 192
 1,218
 Current year charge
  28
 –
 185
 82
 295
 from continuing operations
  10
 – 171
 82
 263
 from discontinued operations
  18 – 14
 – 32
 Transferred from property, plant and
 equipment
   –
 4
 1
 5
 Disposals
  (2)
 – (4)
 (16)
 (22)
 Transferred to discontinued
 operations
  (274)
 – (155)
 (4)
 (433)
 Foreign currency translation
 51
 –
 10
 –
 61
 Balance at 30 June 2006
  56
 – 813 255
 1,124
 Net book value 2006
 273
 62
 42
 222
 282
 881


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
  Rates
               30 June
 30 June
 2006
 2005
 (Rand in millions)
 For the year ended 30 JuneWithin 1 year
 197
   126
   85
   55
   43
   60
  566
   amounts. The valuation is based on various analyzes including cash flow and profitability projections. The valuation necessarily involves significant management judgment.
  has determined that the net carrying value of certain of its intangible assets at 30 June 2006 has been impaired.The impairment of R21 million from continuing operations recorded in the current year relates mainly to thedecrease in the market price of emission rights compared to the price at which they were originally issued. The recoverable amount of the emission rights reviewed for impairment is based on the current market value aslisted on an international exchange.
  primarily to emission rights, mainly due to the decrease in the market price of emission rights compared to theprice at which they were originally issued.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 16.
 Property, plant and equipment
 30 June
 30 June
 2006
 2005
 (Rand in millions)
  2,873
   51,616
   8,644
   10,760
   106
  73,999
  Less:
 26,045
  47,954
        Units of production methodbased on life of relatedreserve base
   were included in plant, equipment and vehicles above. The cost of these assets amounted to R1,165 million andthe accumulated depreciation thereon was R326 million as at 30 June 2006.
  approximately R314 million (2005 – R209 million). These costs are capitalized to the cost of the asset anddepreciated over its estimated useful life.
  equipment. Included in the depreciation charge for the year is amortization relating to the capitalized interest ofR225 million (2005 – R190 million).
  to R4,985 million (2005 – R4,978 million). As at 30 June 2006, the carrying value of the secured debt, wasR3,441 million (2005 – R3,713 million).
  (2005 – 7,724 million) but are still in use by the company and are included in plant, equipment and vehiclesabove. The group did not have any idle facilities as at 30 June 2006.
  reduction in the depreciation charge for continuing and discontinued operations when compared to the expectedcharge had no review been performed, of R1,547 million before tax. The tax effect amounted to R494 millionwith a resulting increase in earnings attributable to shareholders of R1,053 million or R1.69 per share.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 Sasol Gas – R67 million
 Egoli Pipeline – (South Africa)
 was built to supply hydrogen rich gas during a conversion project. Upon completion of the project, the pipelinehad no strategic or commercial value; hence an impairment of R67 million has been recognized.
 Sasol Wax – R17 million
 Pass Christian Plant – (United States of America)
 Hurricane Katrina. Management does not intend to rebuild the facility and current plans are being made to sellthe plant which was initiated before 31 March 2006. Accordingly an impairment charge of R17 million has beenrecognized.
 17.
 Accrued expenses and other obligations
 30 June
 30 June
 2006
 2005
 (Rand in millions)
  1,233
   1,093
   510
   478
   472
   427
   413
   243
   238
   69
   –
   15
   –
   5
   195
  5,391
    18.
 Short-term debt
 30 June
 30 June
 2006
 2005
 (Rand in millions)
  1,102
   –
   487
   17
  1,606
   571
  2,177


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 19.
 Long-term obligations
 Environmental
 and asset
 retirement
 2006
 obligations
 Other
 Total
 (Rand in millions)
 Balance at 1 July 2005
 2,161
 741
 2,902
 Charge for year
 176
 628
 804
 Utilized during year
 (113)
 (173)
 (286)
 Capitalized to property, plant and equipment
 105
 117
 222
 Reversal of unused amounts
 (46)
 (122)
 (168)
 Accretion
 185
 37
 222
 Effect of change in estimated future cash flows
 (15)
 –
 (15)
 Transferred to discontinued operation
 (238)
 (603)
 (841)
 Foreign currency translation
 53
 90
 143
 Balance at 30 June 2006
 2,268
 715
 2,983
 Less:
 275
 152
 427
 Long-term obligations
 1,993
 563
 2,556
 Environmental
 and asset
 retirement
 2005
 obligations
 Other
 Total
 (Rand in millions)
                                    Less:
           the assets. During the year ended 30 June 2005, the group reviewed the useful lives of its assets. The effect ofthe increase in the useful lives during June 2005 had resulted in a decrease in the value of the obligation and hasbeen accounted for as a reversal of unused amounts of R628 million.
  and groundwater contamination. Included in the environmental and asset retirement obligation is an amountaccrued of approximately R395 million in respect of the costs of remediation of the contamination and similarenvironmental costs. The rehabilitation is usually only required when the site is vacated unless the contaminationis likely to threaten the surrounding areas. In this case, any rehabilitation required to prevent such a threat to thesurrounding area is initiated in collaboration with the relevant authorities.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
  securities (refer note 13) which is legally restricted for the purposes of the rehabilitation requirements incurredby Sasol Mining. The fair value of the investment is R240 million (2005 – R194 million). The carrying value ofthe obligation as at 30 June 2006 is R316 million (2005 – R303 million).
  environmental and asset retirement obligations in excess of the amounts provided will not have a materialadverse effect on its financial condition, liquidity or cash flow.
   20.
 Long-term debt
 30 June
 30 June
 Repayment terms
 Collateral
 Interest rate
 2006
 2005
 (Rand in millions)
 Collateralised loansRepayable in semi-annual instalments A pipeline asset with a carrying
  2,202
          1,202
         37
       –
  Capital lease liabilitiesRepayable in monthly instalments
   687
   value of R687 million (2005 – R590 million)
    207
      39
  value of R17 million (2005 – R52 million)
    9
  instalments until December 2015Repayable in equal monthly
   10
      5
    Redeemable preference shares of subsidiariySettled during the financial year
   –
  the shareholders of National Petroleum Refiners of South Africa (Pty) Limited


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 30 June
 30 June
 Repayment terms
 Interest rate
 2006
 2005
 (Rand in millions)
 Unsecured guaranteed registered notesRepayable on maturity in June 2010 Repayable on 1 September
  2007,
  2,750
  i nterest is paid semi-annually in arrearson 1 March and 1 September each year.
  2,000
  Unsecured loansRepayable in semi-annual instalments
    777
    419
    300
  in Republic of Mozambique Pipeline Investments Company (Pty) Limited. No fixed repayment terms.Repayable in semi-annual instalmentsending January 2014
  272
     146
    79
  Repayable in four equal annualinstalments until December 2006
  22
    19
    29
  Total debt
 11,211
  Less:
 571
  Long-term debt
 10,640
   preference shares were redeemed during the year. The redemption of these preference shares did not result in achange in control of the subsidiary and even if called upon the guarantees would have been redeemed inproportion to the existing shareholding. These preference shares did not result in the issue of shares of theholding company and as a result are classified as long-term debt instruments and the preference dividends areincluded in finance costs in the income statement.
   30 June
 30 June
 2006
 2005
 (Rand in millions)
  571
   2,682
   613
   3,354
   602
   3,389
   11,211


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 21.
 Pension and other post-retirement healthcare benefits
 Years ended
 30 June
 30 June
 2006
 2005
 Notes
 (Rand in millions)
   2,862
  Less:
   2,862
   868
    –
    868
  Less:
 (5)
  863
    485
    –
  485
  21.1
 Post-retirement healthcare benefits
 South Africa
  to 1 January 1998, who retire and satisfy the necessary requirements of the medical fund. Generally, healthcarecoverage provides for a specified percentage of most healthcare expenses, subject to preset rules and maximumamounts. The cost of providing these benefits is shared with the retirees. The plan is unfunded.
 North America
  Generally, healthcare coverage pays a specified percentage of most healthcare expenses, subject to presetmaxima and reduced for payments made by Medicare. The cost of providing these benefits is shared with theretirees. The plan is also unfunded.
 2006
 2006
 South Africa
 North America
  31 March 2006
 30 June 2006
  Full
 Full
  Projected unit credit
 Projected unit credit
  South Africa
 North America
 30 June
 30 June
 30 June
 30 June
 2006
 2005
 2006
 2005
 Weighted average assumptionsDiscount rate
 8.0%
  6.0%
   6.0%
  3.8%
  Expected future medical inflation Initial
 6.5%
  8.0%
   6.5%
  5.5%


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 South Africa
  from the 8.5% for the year ended 30 June 2005. This discount rate assumption is based on the discount yield ongovernment stock which had a 7.3% yield for short duration and 7.5% yield at longer durations at themeasurement rate.
 North America
  from the 5.3% for the year ended 30 June 2005. This discount rate assumption was determined by matchingfuture pension benefit payments with expected future AA bond yields for the same periods.
  Post retirement healthcare
 South Africa
 North America
 Total
 30 June
 30 June
 30 June
 30 June
 30 June
 30 June
 2006
 2005
 2006
 2005
 2006
 2005
 (Rand in millions)
 Amounts recognised in balance sheet consist ofLong-term portion
 2,862
  –
  2,862
   –
  –
  –
  Net liability recognised
 2,862
  –
  2,862
  Change in projected benefit obligationProjected benefit obligation at beginning of year
 2,389
  413
  2,802
   74
  5
  79
   200
  18
  218
   266
  (26)
 –
 240
   (67)
  (23)
  (90)
   –
  4
  4
   –
  19
  19
   –
  (410)
  (410)
  Projected benefit obligation at end of year
 2,862
  –
  2,862


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
   Post retirement healthcare
 South Africa
 North America
 Total
 30 June
 30 June
 30 June
 30 June
 30 June
 30 June
 30 June
 30 June
 30 June
 2006
 2005
 2004
 2006
 2005
 2004
 2006
 2005
 2004
 (Rand in millions)
 Components of net post retirement benefits cost
  74
   5
   79
   200
   18
  218
   266
   (26)
  240
    540
   (3)
   537
   –
   4
  4
  Net periodic benefit cost
 540
  1
   541
    540
   –
   540
    –
 1
   1
    The expected benefits are based on the same assumptions used to measure the group’s benefit obligation as at 30 June 2006 and include estimated future employee service.
 South Africa
 (Rand inmillions)
             1,203


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 Sensitivity analysis
  retirement healthcare benefits. A one percentage-point change in assumed healthcare cost trend rates could havethe following effect:
 Post-retirement healthcare benefits
 South Africa
 Foreign
 % Point
 %Point
 % Point
 %Point
 increase
 decrease
 increase
 decrease
 (Rand in millions)
 2006Effect on total service and interest cost components
 68
 (53)
 –
 –
 Effect on accumulated post-retirement benefit obligations
 547
 (434)
 –
 –
 2005Effect on total service and interest cost components
          2004Effect on total service and interest cost components
          21.2
 Pension liability
   and the United States of America, whilst no contributions are made by employees for plans established in othergeographic areas.
  South African operations
 Background
  pensionable salary. Prior to 1 April 1994 this fund was open to all employees of Sasol in South Africa. In 1994all members were given the choice to voluntarily move to the newly established defined contribution section ofthe fund, and approximately 99% of contributing members chose to do so. At that date, the calculated actuarialsurplus of approximately R1,250 million was apportioned to pensioners and members transferring to the definedcontribution section, and a R200 million balance was transferred to Sasol.
 Contributions
  pensionable salary. Sasol (South African operations) meets the balance of the cost of providing benefits.Company contributions are based on the results of the actuarial valuation of the fund in terms of South Africanlegislation and are agreed to by Sasol Limited and the fund trustees.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 Fund assets
  registered in terms of the South African Pension Funds Act, 1956. Included in the Fund assets are 2,369,708Sasol Limited shares valued at R652 million at year end (2005 – 2,369,708 shares at R428 million) purchased interms of an approved investment strategy. The Fund received dividends on Sasol Limited shares of R14 million(2005 – R11 million) during the year.
  calculated using the same assumptions as those used at the last actuarial valuation of the fund. The fund assetshave been valued at fair value.
 Prepaid pension asset
      equitable manner between existing members including pensioners, former members and the employerin such proportions as the Trustees of the Fund shall determine.
  Fund’s independent actuary, calculated the potential cost of the payment of enhanced benefits to formermembers and minimum pension increases for pensioners. This resulted in a R478 million increase in theprojected benefit obligation, which was disclosed as a plan amendment. The remaining unrecognized priorservice cost related to the plan amendment has been included in the prepaid pension asset of the Fund at 30 June 2006.
  submitted to the South African Financial Services Board for their approval, the prepaid pension asset recognizedhas been limited. Only once approval has been obtained from the Financial Services Board will finality beachieved regarding the surplus that may be allocated to Sasol in terms of the scheme.
 Other
  cases, multi-employer defined contribution pension plans. Information from the administrators of these plansoffering defined benefitsis not sufficient to permit the company to determine its share, if any, of any unfundedvested benefits.
 Foreign operations
  group systematically provides for obligations under such plans as services are rendered by qualifying employeesby depositing funds with Trustees for those plans operating in the United States of America, or by creation ofaccounting obligations for other plans.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 21.2.1
 FUNDED PLANS
 Valuation
  2006
 2006
 South Africa
 North America
  31 March 2006
 30 June 2006
  Full
 Full
  R4,640 million
 R703 million
  Projected unit credit
 Projected unit credit
  1.3 times
 1.1 times
 Investment
   South
 North
 South
 North
 Asset classes
 Africa
 America
 Africa
 America
 2006
 2005
    60
 50
    8
 16
    11
 30
    15
 –
    6
 4
   Total
 100
 100


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 Investment strategy
  plans to meet their future obligations. The precise amount for which these obligations will be settled depends onfuture events, including the life expectancy of the plan’s members and salary inflation. The obligations areestimated using actuarial assumptions, based on the current economic environment.
  as returns greater than its policy benchmark reflecting the target weights of the asset classes used in its targetedstrategic asset allocation.
  each individual asset class, and the benefits of diversification among multiple asset classes. Consideration is alsogiven to the proper long-term level of risk for the plan, particularly with respect to the long-term nature of theplan’s liabilities, the impact of asset allocation on investment results, and the corresponding impact on thevolatility and magnitude of plan contributions and expense and the impact certain actuarial techniques may haveon the plan’s recognition of investment experience.
  South Africa
 North America
 Ranges
 Ranges
 Asset classes
 Minimum
 Maximum
 Minimum
 Maximum
 Equities– local
                          regular basis to ensure that managers are meeting expectations with respect to their investment approach. Thereare restrictions and controls placed on managers in this regard.
 Principal actuarial assumptions
  Pension Benefits
 South Africa
 North America
 30 June
 30 June
 30 June
 30 June
 2006
 2005
 2006
 2005
  8.0%
  6.0%
   8.5%
  7.5%
   6.0%
  3.8%
  South Africa
  from the 8.5% for the year ended 30 June 2005. This discount rate assumption is based on the discount yield ongovernment stock which had a 7.3% yield at short durations and 7.5% yield at longer durations at themeasurement date.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
  30 June 2006. The assumption was supported by an analysis performed of the weighted average yield expectedto be achieved with the anticipated make up of investments. In excess of 60% of the assets are invested inequities and the balance in lower yielding investments.
 North America
  for the year ended 30 June 2005. This discount rate assumption was determined by matching future pensionbenefit payments with expected future AA bond yields for the same periods.
  30 June 2006. The assumption was supported by an analysis performed of the weighted average yield expectedto be achieved with the anticipated make up of investments. The investment makeup is heavily weighted towardsequities.
 Contributions
   South
 North
 Africa
 America
 Projected
 (Rand in millions)
     South Africa
 North America
 Total
 30 June
 30 June
 30 June
 2006
 2006
 2006
 (Rand in millions)


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 Funding
  Pension Benefits
 South Africa
 North America
 Total
 30 June
 30 June
 30 June
 30 June
 30 June
 30 June
 2006
 2005
 2006
 2005
 2006
 2005
 (Rand in millions)
  1,058
  –
  1,058
   (3,582)
  –
  (3,582)
   4,640
  –
  4,640
   (797)
  –
  (797)
   224
  –
  224
  Net asset/(liability) recognised
 485
  –
  485
  Amounts recognised in balance sheet consist of:Prepaid pension asset
 485
  –
  485
   –
  –
  –
  Net (asset)/liability recognised
 485
  –
  485


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
  Pension liability
 South Africa
 North America
 Total
 30 June
 30 June
 30 June
 30 June
 30 June
 30 June
 2006
 2005
 2006
 2005
 2006
 2005
 (Rand in millions)
 Change in projected benefit obligation
 Projected benefit obligation at beginning of year
 2,519
  649
  3,168
   5
  28
  33
   206
  48
  254
   2
  –
  2
   746
  (65)
  681
   (209)
  (48)
  (257)
   –
  44
  44
   –
  –
  –
   313
  –
  313
   –
  –
  –
   –
 –
 (656)
  (656)
  Projected benefit obligation at end of year
 3,582
  –
  3,582
  Change in fair value of plan assetsFair value of plan assets at beginning of year
 3,240
  590
  3,830
   1,290
  71
  1,361
   4
  38
  42
   2
  –
  2
   (209)
  (48)
  (257)
   –
  52
  52
   –
  –
  –
   313
  –
  313
   –
  –
  –
   –
  (703)
  (703)
  Fair value of plan assets at end of year
 4,640
  –
  4,640
  ^ Amount represents retired employees who on retirement have elected to participate in the Defined Benefit Plan by
 purchasing a Defined Benefit Pension.
 * During the year ended 30 June 2005, the Group restructured certain of its shareholdings in Sasol Wax International’s
 underling subsidiaries, thereby resulting in a dilution of its interest in Paramelt RMC B.V.
 The entity is now equity accounted, hence the Funded Plan has been accounted for on the disposal line.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
   Pension Benefits
 South Africa
 North America
 Total
 30 June
 30 June
 30 June
 30 June
 30 June
 30 June
 30 June
 30 June30 June
 2006
 2005
 2004
 2006
 2005
 2004
 2006
 2005
 2004
 (Rand in millions)
 Components of net periodic pension cost
 Service cost
  5
 5
 3
 28
 21
 26
 33
 26
 29
 Interest
 cost
 
 206
 202
 231
 48
 40
 39
 254
 242
 270
 Expected
 return
 on
 plan
 assets
 (278)
 (224)
 (193)
 (42)
 (42)
 (38)
 (320)
 (266)
 (231)
 Settlement
 or
 curtailment
 cost
 –
 –
 –
 –
 5
 27
 –
 5
 27
 Amortisation of:– Unrecognised
 prior
 service
 cost
 60
 60
 60
 –
 –
 –
 60
 60
 60
 – Unrecognised
 net
 loss
 (30)
 –
 39
 17
 5
 12
 (13)
 5
 51
 Net periodic pension cost
 
 (37)
 43
 140
 51
 29
 66
 14
 72
 206
 Continuing
 operations
 (37)
 43
 140
 –
 –
 –
 (37)
 43
 140
 Discontinued
 operations
 –
 –
 –
 51
 29
 66
 51
 29
 66
  The expected benefits are based on the same assumptions used to measure the group’s benefit obligation as at 30 June 2006 and include estimated future employee service:
 South Africa
 (Rand inmillions)


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 21.2.2
 UNFUNDED PLANS
 Valuation
  30 June 2006
  Full
  Projected unit credit
 Actuarial assumptions
   Europe
 30 June
 30 June
 2006
 2005
  4.5%
   2.5%
   from 4.2% for the year ended 30 June 2005. This discount rate assumption is based on annuity insurance tariffsfrom a group of leading German insurers.
 Funding
 Europe
 30 June
 30 June
 2006
 2005
 (Rand in millions)
  1,055
   (223)
   (4)
   40
  Net liability recognized
 868
  Amounts recognised in balance sheet consist of
 Accrued pension liabilitiesLong-term portion
 863
   5
  Net liability recognized
 868
  Change in projected benefit obligation
  1,489
   49
   58
   12
   (35)
   206
   7
   (731)
  Projected benefit obligation at end of year
 1,055


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 30 June
 30 June
 30 June
 2006
 2005
 2004
 (Rand in millions)
 Components of net periodic pension cost
  49
    58
    13
   Net periodic pension cost
 120
    68
    52
    The expected benefits are based on the same assumptions used to measure the group’s benefit obligation as at 30 June 2006 and include estimated future employee service.
 Europe
 2006
 (Rand inmillions)
  36
  39
  41
  44
  47
  251
 458
 22.
 Commitments and contingencies
 Lease and purchase commitments
  leases which expire at various dates until 2034. Olefins & Surfactants (discontinued operations) had variousoutstanding purchase commitments primarily for feedstock purchases. The commitments arise mainly from take-or-pay agreements. In general such commitments are at prices not in excess of current market prices.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
  2006
 Capital
 Operating
 Purchase
 commitments
 (Rand in millions)
  165
 261
 94
  156
 225
 86
  158
 206
 73
  145
 181
 20
  143
 173
 –
  1,015
 1,326
 –
 Total minimum lease/purchase commitments
 1,782
 2,372
 273
 Less:
 (824)
 –
 –
 From continuing operations
 958
 2,372
 273
  11
 493
 16,802
 Total operations
 969
 2,865
 17,075
     Capital commitments
     30 June
 30 June
 2006
 2005
 (Rand in millions)
 Capital expenditure
  28,060
   6,306
  Authorized capital expenditure
 34,366
  Less:
 (20,500)
  Continuing operations
 13,866
   762
 14,628
  which we had spent R20 billion up to 30 June 2006. Of the unspent capital commitments of R14 billion, weexpect to spend R9 billion in 2007 and R5 billion in 2008 and thereafter.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
   Years ended:
 30 June
 30 June
 2006
 2005
 Project
 Business unit
 (Rand in millions)
  (1)
  3,574
    1,209
    1,190
    913
    1,229
    471
    608
    240
    236
    163
    4,795
  14,628
  (1) Sasol provides risk-based financing for 50% of the capital expenditure on the EGTL joint venture. The project cost is
 under review. Sasol’s portion is not expected to exceed US$ 1.45 billion. Due to concurrent increases in commodityvalues, this development is not expected to materially affect the returns of this project.


F–76
 Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 Guarantees
 The group has issued the following guarantees for which the liabilities have not been included in the
 balance sheet:
 30 June
 30 June
 2006
 2006
 Guarantee
 Maximum
 included in the
 potential amount
 balance sheet
 Notes
 (Rand in millions)
 Guarantees in respect of GTL ventures
 i
 8,301
 109
 Guarantees in respect of joint venture commitments
 ii
 1,360
 –
 Letters of credit
 iii
 1,172
 –
 Performance guarantees
 iv
 1,035
 238
 Other guarantees and claims
 v
 313
 24
 Guarantee to RWE-DEA
 vi
 276
 –
 Customs and excise
 vii
 111
 –
 Guarantees in respect of natural gas pipeline
 70
 –
 Subsidiaries’ external obligations
 18
 –
 12,656
 371
 Continuing operations
 12,001
 371
 Discontinued operations
 655
 –
 12,656
 371
 Notes:
  Sasol has issued the following significant guarantees for the obligations of several of its subsidiaries in respect of theGTL ventures. These guarantees relate to the construction and funding of Oryx GTL Limited in Qatar and EscravosGTL in Nigeria, including, inter alia:
  US$343 million (R2,459 million) plus interest and costs subject to the project demonstrating a minimum level ofsustained production over a continuous period of ninety days and catalyst deactivation within acceptable parametersfor at least two hundred and seventy days, after commissioning. It is estimated that the project will be commissionedduring the fourth quarter of 2006 calendar year.
  purchase agreement (GSPA) entered into between Oryx GTL Limited, Qatar Petroleum and ExxonMobil MiddleEast Gas Marketing Limited, by virtue of this subsidiary’s 49% shareholding in Oryx GTL Limited. Sasol’s exposureis limited to the amount of US$123 million (R884 million). In terms of the GSPA, Oryx GTL Limited iscontractually committed to purchase minimum volumes of gas from Qatar Petroleum and ExxonMobil Middle EastGas Marketing Limited on a take-or-pay basis. Should Oryx GTL terminate the GSPA prematurely, Sasol Limited’swholly owned subsidiary will be obliged to take-or-pay for its 49% share of the contracted gas requirements. Theterm of the GSPA is 25 years from the date of commencement of operations. It is estimated that the project will becommissioned during the fourth quarter of 2006 calendar year.
  in respect of the investment in Oryx GTL Limited. Sasol’s equity contribution is estimated at US$160 million(R1,147 million). It is expected that the project will be commissioned during the fourth quarter of 2006 calendaryear.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 • A performance guarantee for the obligations of subsidiaries has been issued in respect of the construction of
 Escravos GTL in Nigeria for the duration of the investment in Escravos GTL limited to an amount of US$250 million (R1,793 million).
 • Sasol Limited issued a performance guarantee for the obligations of its subsidiaries in respect of and for the duration
 of the investment in Sasol Chevron Holdings Limited, limited to an amount of US$ 250 million (R1,793 million).Sasol Chevron Holdings Limited is a joint venture between a wholly owned subsidiary of Sasol Limited andChevron Corporation. All guarantees listed above are issued in the normal course of business.
 ii.
 Guarantees issued to various financial institutions in respect of debt obligations of joint venture companies accountedfor using the equity method.
 iii.
 Various guarantees issued in respect of letters of credit issued by subsidiaries.
 iv.
 Various performance guarantees issued by subsidiaries. An accrual of R238 million was recognised in respect of certainguarantees.
 v.
 Included in other guarantees are environmental guarantees of R123 million.
 vi.
 Various performance guarantees issued in favour of RWE-DEA.
 vii.
 Various guarantees were issued in respect of the group’s customs and excise obligations.
 Product warranties
  course of business. These warranties typically provide that products sold will conform to specifications. Thegroup generally does not establish a liability for product warranty based on a percentage of turnover or otherformula. The group accrues a warranty liability on a transaction-specific basis depending on the individual factsand circumstances related to each sale. Both the liability and the annual expense related to product warrantiesare immaterial to the consolidated group financial statements.
 Contingencies – Litigation and competition matters
 Subsidiaries
     Mineral rights
  associated statutory competencies of Sasol Mining have been converted to interim statutory rights (Old OrderRights). Sasol Mining is entitled to convert these Old Order Rights to statutory mining and prospecting rights(New Order Rights) after complying with certain statutory requirements. All applications due to date, includingthe conversion of the four old order mining rights covering the Secunda operations, have been submitted to theDepartment of Minerals and Energy (DME), and we are awaiting approval in this regard. To date we havesubmitted 41 applications to the DME to acquire prospecting and mining rights. Thus far, five prospecting rightshave been granted. These applications cover all the prospecting rights in the Free State and Waterberg as well asthe prospecting and mining rights in Secunda. No value has been atributed to these rights in the financialstatements.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 Litigation in respect of continuing operations
 Fly Ash Plant
  claimed damages of R313 million relating to their inability to develop their business and a projected loss offuture cash flows. The prospect of future loss is deemed to be reasonably possible and the loss is unlikely toexceed R10 million.
 Nationwide Poles
  The complaint was referred by the plaintiff to the Competition Tribunal. The Competition Tribunal found againstSasol that during the period of the complaint Sasol was a dominant firm whose conduct met the test required inestablishing prohibited price discrimination. The company filed a notice of appeal and the appeal was heard bythe Competition Appeal Court during September 2005. Likelihood of loss is remote as the Competition AppealCourt found in favour of Sasol.
 Nutri-Flo
  pricing and exclusionary pricing. In November 2003, Nutri-Flo made an urgent application to the CompetitionTribunal to obtain an interdict preventing Sasol from implementing a new price list. In this application Nutri-Floagain filed a complaint on grounds similar to those specified above, in addition it is alleged that Sasol, Kynochand Omnia are acting as a cartel in fixing prices in the fertilizer industry. Nutri-Flo subsequently withdrew itsapplication, however, the Competition Commission has investigated the complaint and in May 2005, referred thematter to the Competition Tribunal, alleging findings of price fixing, prevention/lessening of competition, abuseof dominance and exclusionary conduct. The Competition Commission requested the Competition Tribunal toimpose the maximum administrative penalty in terms of the Competition Act. Sasol took the matter on review tothe Competition Appeal Court. The court ruled against Sasol in April 2006 and the matter must consequently beheard by the Competition Tribunal. Sasol has filed an exception to the referral of the complaint to theCompetition Tribunal on the basis that it is vague and does not disclose a clear contravention of the CompetitionAct. On the basis of the pleadings in their current form, we believe the likelihood of a finding of unlawfulconduct is remote. In the event that the Competition Commission amends the referral, our current assessmentmay require review. For this reason, it is currently not possible to make an estimate of the contingent liability(whether arising out of penalties that may be imposed by the Competition Tribunal or civil lawsuits that mayarise in the event of a finding of unlawful conduct).
 Sasol Wax
  International AG and its subsidiary Sasol Wax GmbH, both located in Hamburg, Germany. A parallelinvestigation is being conducted by the US Department of Justice in the United States. On 28 April 2005 SasolWax Americas Inc. received a subpoena for information from the United States District Court regarding its waxsales activities. The investigations in the US and the European Union arise from alleged anticompetitivebehaviour among industry members in the paraffin wax industry. Sasol Wax is co-operating with the competitionauthorities in the US and in the European Union in order to clarify this issue. At this point of the investigation itis not possible to assess the financial implications or inherent risk. A reliable estimate of the amount of thepossible penalty cannot be made, since the determination thereof is at the sole discretion of the antitrustauthorities.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 Profert
  that discriminatory pricing towards Profert in sales of LAN was committed and that Sasol is engaged inexclusionary conduct to exclude Profert from the fertilizer market. In May 2006, the Competition Commissionreferred the complaint to the Competition Tribunal alleging that Sasol, AECI and Kynoch have entered intoagreements dividing the LAN market in order to make Sasol the exclusive supplier, that Sasol is engaged inconduct that favours Kynoch in supply arrangements to the exclusion of other suppliers, and that Sasol iscommitting discriminatory pricing against Profert. The Competition Commission requested the CompetitionTribunal to impose the maximum administrative penalty in terms of the Competition Act. Sasol filed a reply tothe referral of the complaint on 4 August 2006. The Competition Commission has not yet replied to Sasol’ssubmission. Preparations for the hearing are proceeding. On the basis of the pleadings in their current form, webelieve the likelihood of the Competition Tribunal imposing a penalty is remote. In the event that theCompetition Commission amends its referral, our current assessment may require review. For this reason, it iscurrently not possible to make an estimate of the contingent liability (whether arising out of penalties that maybe imposed by the Competition Tribunal or civil lawsuits that may arise in the event of a finding of unlawfulconduct).
 Sale of Phosphoric Acid production assets
  shut down the operations in Phalaborwa. Sasol and Foskor then entered into an agreement in terms of whichFoskor would purchase the Phalaborwa plant. For the period that this intended sale was under assessment by theregulatory authorities, the parties entered into an agreement that Foskor would supply phosphate rock at its costand Sasol would toll manufacture phosphoric acid for Foskor. The toll manufacturing agreement commenced on1 September 2005. In October 2005, the South African Competition Commission issued a recommendation thatthe proposed merger be prohibited and referred the matter to the South African Competition Tribunal. Theparties abandoned the merger in June 2006 and notified the Competition Commission that they intend to enterinto a new toll manufacturing agreement for a period of 4 years. The Competition Commission has notexpressed any view on whether the intended transaction would amount to a merger or not. The parties intend tofinalize the terms of a new toll manufacturing agreement and to notify the Competition Commission of theprovisions of such agreement. Views that may be expressed by the Competition Commission will be taken intoconsideration prior to implementation of the new agreement.
  commenced in September 2005) amounts to pre-implementation of a merger without the required approval bythe Competition Tribunal and/or if there were any other unlawful agreements between Foskor and Sasol relatingto the proposed sale of the phosphoric acid assets. If the matter is ultimately referred to the CompetitionTribunal and the parties are found to have implemented a merger without the necessary Tribunal approval, theparties could be faced with penalties of up to 10% of the turnover of their relevant businesses. We believe thelikelihood of the finding of unlawful conduct to be remote. In the event that the Commission refers the matter tothe Tribunal, our current assessment may require review. For this reason, it is currently not possible to make anestimate of the contingent liability.
 Other
  normal course of business. Although the outcome of these proceedings and claims cannot be predicted withcertainty, the company does not believe that the outcome of any of these cases would have a material effect onthe group’s financial results.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 Litigation in respect of discontinued operations
 The EDC pipeline litigation
  1994 rupture of the ConocoPhillips ethylene dichloride (EDC) pipeline connecting Conoco’s dock to Sasol NA’svinyl chloride monomer plant in the United States. Plaintiffs sought compensatory and punitive damages as aresult of alleged exposure to EDC. As of 30 June 2006 there is a class action and 13 lawsuits pending, broughtby approximately 500 plaintiffs. Plaintiffs allege various personal injuries resulting from exposure to EDC whileemployed as contractors of ConocoPhillips to clean up the EDC or to perform other projects on theConocoPhillips refinery where the rupture occurred. The plaintiffs seek recovery of unspecified compensatingand punitive damages. Sasol NA has successfully obtained substantial insurance cover for costs to be incurred inconnection with this litigation. Previous settlements for approximately $10 million of which Sasol NA’s sharewas $3 million were made in 2003. While the cases are being vigorously defended the likelihood of financialloss in future is probable. The loss is unlikely to exceed the amount of $3 million for previously settled cases.
   Sulfur dioxide litigation
  environment as a result of a power outage in the ConocoPhillips Lake Charles refinery. Lawsuits were filedagainst ConocoPhillips and Sasol NA has since been added as a defendant. At 30 June 2006 more than 600 lawsuits had been filed on behalf of more than 20,000 plaintiffs. ConocoPhillips and Sasol NA jointlydefended the lawsuits and Sasol NA’s liability for defense and settlement costs has been limited, by agreement.Sasol NA has paid the “cap” as per the agreement and therefore the prospect of future loss in this matter isremote and no future loss in this regard is expected.
 Yellow Rock litigation
  and seeking an injunction that would require Sasol NA to remove its ethylene from Salt Storage Dome 1-A inSulfur, Louisiana near the Lake Charles Chemical Complex. The suit alleges that in 2004 the Dome 1-A wasleaking ethylene and caused the “blow out” of an oil and gas exploration well being drilled by Yellow Rock. Anintegrity assessment of the well performed by an independent consultant in early 2005 concluded that the Dome1-A was not leaking. These results were conveyed to Yellow Rock and were signed off on by the LouisianaDepartment of Natural Resources, but did not deter the filing of suit. Prospects of future events confirming a lossare therefore remote.
 US hearing loss cases
  for occupational hearing loss in Louisiana are not covered by Workman’s Compensation. The likelihood of lossis considered reasonably possible as these claims will be settled. The range of expected future loss throughsettlement is estimated to be between US$ 800,000 and US$ 1,150,000.
 Environmental orders


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 of human health and the environment in all locations in which it operates. These laws and regulations may, infuture, require the group to remediate or rehabilitate the effects of its operations on the environment. Thecontingencies may exist at a number of sites, including, but not limited to, sites where action has been taken toremediate soil and groundwater contamination. These future costs are not fully determinable due to factors suchas the unknown extent of possible contamination, uncertainty regarding the timing and extent of remediationactions that may be required, the allocation of the environmental obligation among multiple parties, thediscretion of regulators and changing legal requirements.
  compared to R2,161 million in 2005 (R238 million and R158 million was accrued for 2006 and 2005respectively for our discontinued operations). Included in this balance is an amount accrued of approximatelyR395 million (R134 million for our discontinued operations) in respect of the costs of remediation of soil andgroundwater contamination and similar environmental costs. These costs relate to the following activities: siteassessments, soil and groundwater clean-up and remediation, and ongoing monitoring. Due to uncertaintiesregarding future costs the potential loss in excess of the amount accrued cannot be reasonably determined.
  for most of the costs of remediation and rehabilitation of environmental contamination existing at Condea VistaCompany located in the United States on or before 1 March 2001.
  estimable, the amount of additional future costs relating to remediation and rehabilitation may be material toresults of operations in the period in which they are recognized. It is not expected that these environmentalobligations will have a material effect on the financial position of the group.
  environmental, health, safety and process safety laws and regulations increases the overall cost of business,including capital costs to construct, maintain, and upgrade equipment and facilities. These laws and regulationshave required, and are expected to continue to require, the group to make significant expenditures of both acapital and expense nature.
 September 2004 Accident Trust
    Workers’ Union and an attorney representing the unions have been in negotiations to find a mechanism to paycompensation to the dependants of people that died or were physically injured in the accident to the extent thatthey had not been previously compensated in terms of existing policies and practices. It was agreed to establishan independent trust, the September 2004 Accident Trust, to expeditiously make ex gratia grants to persons whowere physically injured in the 1 September 2004 explosion at our Secunda West ethylene production facilitiesand to the dependants of persons who died in that accident. The September 2004 Accident Trust was registeredon 29 June 2006. Qualifying victims of the accident have been invited to submit applications for compensation.These grants will be calculated in accordance with the applicable South African legal principles for the harm andloss suffered by them as a result of the accident to the extent that they have not already been compensated.
  social responsibility, the Company has not acknowledged legal liability in creating the trust. As at 30 June 2006it is believed that a loss contingency exists and that it is probable that the future claims will be received from thedependents of the deceased or from those physically injured and to whom ex gratia grants will be made. Noaccrual has been made as at 30 June 2006 as the amount of the loss cannot be reliably estimated. The future


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 payments are dependent on the number of applications submitted to the Trust, the independent findings of eachapplication and the calculation of the grants based on the applicable South African legal principles. It is believedthat the possible loss is unlikely to exceed R20 million.
 Borrowing facilities
  approximately R40,000 million (2005- R40,000 million). Of these facilities approximately R18,000 million(2005 – R19,000 million) had been utilized at year end.
  List of major banking facilities and debt arrangements at 30 June 2006:
 Expiry Date
 Currency
 Facility
 Utilization
 (millions)
 (Rand in millions)
 Sasol Financing
 Uncommitted facilities
           Committed facilityRevolving credit facility (syndicated)
     Debt arrangements
           Sasol Financing InternationalUncommitted facilitiesCommercial banking facilities
     Committed facilitiesRevolving credit facility
     Debt arrangementEurobond
     Other Sasol businesses
 Asset based finance
 Republic of Mozambique Pipeline Investments Company (Pty) Limited *
           Debt arrangements
 National Petroleum Refiners of South Africa (Pty) Limited *
     Property finance leases
      Other banking facilities and debt arrangements
     34,689
 13,259


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 Facility
 Utilization
 (Rand in millions)
 Comprising:Long-term debt (refer note 20)
      13,259
 * Facilities held by these subsidiaries.
 Excluded from the above analysis are borrowing facilities held by the group’s joint ventures
             5,679
 4,925
 23.
 Shareholders’ equity
 Ordinary shares in issue
 30 June
 30 June
 30 June
 2006
 2005
 2004
 (Number of shares)
  676,877,125
    6,101,300
    682,978,425
   Less:
 (60,111,477)
   622,866,948
   Treasury shares
  shareholders have authorized the directors to undertake a repurchase of issued securities limited to a maximumof 10% of the company’s issued securities at the time that the authority was granted.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
       terms of the general authority an announcement shall be made in accordance with the requirements of theJSE Limited.
  the authorization of the shareholders. No shares of the company were repurchased for years ended 30 June 2006and 30 June 2005.
   Share-based payments
  of SFAS 123(R), which establishes accounting for share-based payments exchanged for employee services.Under the provisions of SFAS 123(R), share-based payment expense is measured at the grant date, based on thefair value of the award, and is recognized as an expense over the employee’s requisite service period (generallythe vesting period of the award).
    30 June
 30 June
 30 June
 2006
 2005
 2004
 (Rand in millions)
  156
    13
   169
       Sasol Limited over a prescribed period. The exercise price of these options equals the market price of theunderlying shares on the trading day immediately preceding the granting of the option.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 For options granted prior to 25 October 1999, vesting periods for these options are as follows:
 • 4 years – 1st third
 • 6 years – 2nd third
 • 8 years – final third
 The offer price of these options equals the closing market price of the underlying shares on the trading day
 immediately preceding the granting of the option.
 In terms of the scheme, options to a maximum of 60,000,000 ordinary shares may be offered by the
 trustees to eligible group employees. Each employee is limited to holding a maximum of 1,000,000 options toacquire Sasol Limited shares.
 On resignation, share options which have not yet vested will lapse and share options which have vested
 may be taken up at the employee’s election before their last day of service. Payment on shares forfeited willtherefore not be required. On death, all options vest immediately and the deceased estate has a period of twelvemonths to exercise these options. On retirement the options vest immediately and the nine year expiry periodremains unchanged.
 30 June
   2006
   Number of shares
 Shares allotted
 32,305,600
 26,204,300
 20,598,600
 Share options granted
 23,818,700
 24,975,700
 27,097,900
 Available for allocation
 3,875,700
 8,820,000
 12,303,500
 60,000,000
 60,000,000
 60,000,000
 The following tables summarize the activity of share options and provide further information of the
 outstanding share options:
 Weighted
 Number of shares
 average
 Movements in the number of options granted
 option price
 Rand
 Outstanding at 30 June 2003
 26,495,200
 66.40
 Options granted
 3,950,700
 90.99
 Options exercised
 (2,473,000)
 45.26
 Options forfeited
 (63,100)
 92.14
 Options expired
 (811,900)
 74.14
 Outstanding at 30 June 2004
 27,097,900
 71.77
 Options granted
 4,208,800
 120.34
 Options exercised
 (5,605,700)
 55.33
 Options forfeited
 (43,700)
 128.70
 Options expired
 (681,600)
 83.99
 Outstanding at 30 June 2005
 24,975,700
 83.18
 Options granted
 5,390,500
 218.95
 Options exercised
 (6,101,300)
 70.52
 Options forfeited
 (37,700)
 218.18
 Options expired
 (408,500)
 137.95
 Outstanding at 30 June 2006
 23,818,700
 116.32
 F–85


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 30 June
 30 June
 30 June
 2006
 2005
 2004
 (Rand)
 Weighted average price at which share options were granted during year
 218.95
    58.74
    234.13
    26.17
   (Rand in millions)
  998
   30 June
 30 June
 30 June
 2006
 2005
 2004
 Number of shares
 Vesting periods of options granted
  5,295,500
    5,208,500
    4,751,700
    2,624,400
    2,891,000
    1,291,400
    1,756,200
   23,818,700
   Weighted
 Weighted
 Aggregate
 average
 average
 intrinsic
 Range of exercise prices
 Number
 exercise
 remaining
 value
 of shares
 price
 life
 (Rand in
 (Rand)
 (Years)
 millions)
 Share options outstanding at 30 June 2006
  1,753,700
 29.23
 1.64
  3,184,000
 47.79
 2.69
  2,324,800
 77.15
 4.07
  3,736,000
 89.99
 6.10
  6,312,900
 112.91
 6.01
  497,000
 127.39
 6.79
  663,100
 151.44
 8.00
  84,100
 170.20
 8.00
  695,300
 193.33
 8.00
  3,339,300
 216.83
 8.08
  857,700
 228.84
 8.31
  197,800
 253.84
 9.00
  173,000
 274.50
 9.00
 23,818,700
 115.97
 5.63
 3,788


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 Weighted
 Weighted
 Aggregate
 average
 average
 intrinsic
 Range of exercise prices
 Number
 exercise
 remaining
 value
 of shares
 price
 life
 (Rand in
 (Rand)
 (Years)
 millions)
 Share options vested but not yet exercised at30 June 2006
  743,100
 33.87
  1,828,100
 48.44
  863,700
 77.48
  687,000
 90.59
  1,110,300
 113.12
  62,600
 132.40
   –
  700
 218.00
 5,295,500
 71.18
 3.84
 1,079
  provisions of SFAS 123(R) and the Securities and Exchange Commission Staff Accounting Bulletin No, 107.Key input assumptions used to estimate the fair value of share options include the grant price of the award, theexpected option term, volatility of the Sasol share price, the risk-free interest rate, and the dividend yield.Management believes that the valuation technique and the approach utilized to develop the underlyingassumptions are appropriate in calculating the fair values of the share options granted. Estimates of fair value arenot intended to predict actual future events or the value ultimately realized by employees who receive equityawards.
  30 June
 30 June
 30 June
 2006
 2005
 2004
  1
 8.00
    2
 34
    4.0
    2, 4 and 6
   1.
 The risk-free rate for periods within the contractual term of the share options is based on the South African governmentbonds in effect at the time of grant.
 2.
 The expected volatility in the value of the share options granted is determined using the historical volatility of the Sasolshare price.
 Dividends
  10 April 2006. A final dividend in respect of the year ended 30 June 2006 of R4.30 per share (2005 – R3.10 pershare, 2004 – R2.35 per share) was declared on 12 September 2006. As the final dividend for 2006 was declaredsubsequent to the financial year end, no liability was recognized in the annual financial statements in respect ofthis final dividend.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 24.
 Accumulated other comprehensive loss
  30 June
 30 June
 30 June
 2006
 2005
 2004
 (Rand in millions)
 Realised and unrealised holding losses from cash flow hedging activities, net of tax
 (1,371)
   Translation of foreign operations with a functional currency other than rand, net of tax
 117
    (37)
   (1,291)
   25.
 Concentration of risk
 Financial and market risk
  crude oil price risks. In order to manage these risks, the group has developed a comprehensive risk managementprocess to facilitate control and monitoring of these risks. General corporate hedging unrelated to specifictransactions or projects is not undertaken. Throughout the years ended 30 June 2006 and 30 June 2005 it hasbeen, and remains, our policy that no speculative trading in derivative instruments be undertaken.
   Liquidity risk
  flows. We finance our operations through a mixture of retained profits, short-term and long-term bank funding, acommercial paper programme and corporate bond issues. Adequate banking facilities and reserve borrowingcapacities are maintained. We have sufficient undrawn call/demand borrowing facilities, which could be utilizedto fund any potential shortfall in cash resources.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 Maturity profile as at 30 June 2006
 Financial assets and liabilities
  Maturity
 More
 Carrying
 Within
 1 – 2
 2 – 3
 3 – 4
 4 – 5
 than
 value
 one year
 years
 years
 years
 years
 5 years
 (Rand in millions)
 Financial assets
                                                          (i)
        19,875 18,437
 327
 18
 27
 13
 1,053
 Financial liabilities
                                        (i)
        26,579 15,926
 2,689
 619
 3,354
 602
 3,389
 (i)
 Relates to O&S and reflects the maturity in respect of that business.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 Forward exchange contracts
 Contract
 Within 1 year
 1 – 2
 amount
 years
 (Rand in millions)
 Transactions which have already occurred
 Imports – capital
            Imports – goods
                      Exports
                   Other payables (liabilities)
            Other receivables (assets)
     Related to future commitments
 Imports
                Other payables (liabilities)


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 Forward exchange contracts
 Contract
 Within 1 year
 1 – 2
 amount
 years
 (Rand in millions)
 Commodity derivatives
                 Maturity
 Nominal
 Within
 More than
 Cross currency swaps
 value
 1 year
 1 – 2 years
 2 – 4 years
 4 years
 (Rand in millions)
                        Interest rate derivatives
 Pay fixed rate receiving floating rateRand
      Interest rate cap or collar(relating to long-term debt)
       Credit risk
  equivalents, held-to-maturity investments and derivative contracts. The exposure to credit risk with regard totrade receivables is not concentrated due to a large customer base. Adequate provision is made for doubtfuldebts.
  institutions on listed exchanges. Counterparty credit limits are in place and reviewed and approved by therespective subsidiary boards.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
  2006
 2005
 %
 %
 By business segment
  2
   2
   40
   2
   13
   24
   17
   100
     By geographic location
  62
   6
   19
   5
   6
   –
   –
   2
  100
    Foreign currency risk
  currency fluctuations that have an impact on our cash flows and financing activities. We manage our foreignexchange risks through our group financing policies and the selective use of forward exchange contracts, crosscurrency swaps and cross currency options. We use foreign exchange contracts to reduce foreign currencyexposures arising from imports into South Africa. Hedging of exports from South Africa is evaluated regularlyand on a case-by-case basis.
   each currency using a forward rate interpolator model. The net market value of all forward exchange contracts atyear end was then calculated by comparing the forward exchange contracted rates to the equivalent year endmarket foreign exchange rates. The present value of these net market values was then calculated using theappropriate currency specific discount curve.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
  Contract
 foreign
 Estimated fair
 currency
 Contract
 value gains/
 Calculated
 Forward exchange contracts
 amount
 amount
 (losses)
 average rate
 (Millions)
 (Rand in millions)
 Transactions which have already occurred
 Imports – capital
             Imports – goods
                           Exports
                     Other payables (liabilities)
             Other receivables (assets)
      Related to future commitments
 Imports


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 Contract
 foreign
 Estimated fair
 currency
 Contract
 value gains/
 Calculated
 Forward exchange contracts
 amount
 amount
 (losses)
 average rate
 (Millions)
 (Rand in millions)
 Other payables (liabilities)
             Cross currency swaps
                  Interest rate risk
  The financing of the group is structured on a combination of floating and fixed interest rates. The benefits offixing or capping interest rates on debt to achieve improved predictability of cash flows are considered andimplemented on a case-by-case basis.
  Estimated fair
 Notional contract amount
 Rand
 Average
 value gains/
 equivalent
 Expiry Date
 fixed rate
 (losses)
 (Rand in
 (Rand in
 millions)
 millions)
 Interest rate derivatives
 Pay fixed rate receive floating rate
              Interest rate cap or collar
 (relating to long-term debt)
      Crude oil price risk
  futures contracts of short duration as a means of mitigating price and timing risks on crude oil and other energyrelated product purchases and sales. In effecting these transactions, the companies concerned operate withinprocedures and policies designed to ensure that risks, including those relating to the default of counterparties areminimized.
  fluctuations adversely affecting the cost of crude oil purchases (approximately 54000 b/d) used in our Natrefrefinery, a combination of forward exchange contracts and crude oil futures are used. This hedging mechanismdoes not protect the group against longer term trends in crude oil prices.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
  deemed necessary to protect the group’s income from fluctuations in crude oil prices by means of appropriatehedging strategies, it was deemed necessary to protect the group’s income from fluctuations in crude oil pricesby means of appropriate hedging strategies.
  by entering into a forward sale agreement. This resulted in an opportunity loss for the year on this hedge ofR1,147 million before tax.
  of Sasol Synfuels’ production by entering into a zero cost collar in terms of which the group was protected atmonthly average dated Brent crude oil prices below US$45.00/b but able to take advantage of higher crude oilprices, only incurring a cash outflow at monthly average dated Brent crude oil prices above US$82.61/b. Themonthly average dated Brent crude oil price traded within the range of this collar throughout the hedging periodand therefore the collar had no cash flow effect.
  and, as a result of our continued requirement to fund our extensive capital investment programme, have againhedged the crude oil equivalent of approximately 30% of our Sasol Synfuels’ production by entering into a zerocost collar in terms of which the group was protected at monthly average dated Brent crude oil prices belowUS$63.00/b and will incur a cash outflow should average monthly average dated Brent oil prices be in excess ofUS$83.60/b. As a result of the significant increase in monthly average dated Brent crude oil prices toward theend of the year, after entering into the collar, the market value of the collar resulted in an expense of R93 millionbeing recognized.
   Estimated
 Contract
 fair value
 foreign
 Contract
 gains/
 currency
 amount
 (losses)
 Average price
 (Millions)
 (Rand in millions)
 US dollar
 Commodity derivatives
 Futures
      Zero cost collar
          Other
     Commodity chemical prices
  are based on international chemical prices of those commodities, which include ethylene, propylene, ammoniaand certain solvents and polymer prices. No derivative instruments were entered into to hedge these risks.
 Disclosures regarding fair value of financial instruments
 Cash and cash equivalents and bank overdraft


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 Investments
  determine the fair value of unlisted equity investments. These investments are carried at their original cost in thebalance sheet.
 Long-term receivables
   Long-term and short-term debt
  flows. The fair value of short-term debt approximates the carrying value as a result of the short-term maturityperiods.
 Forward exchange contracts and cross-currency options
  a forward rate interpolator model. The net market value of all forward exchange contracts at year end was thencalculated by comparing the forward exchange contracted rates to the equivalent year end market foreignexchange rates. The present value of these net market values were then calculated using the appropriate currencyspecific discount curve.
 Interest rate swaps and oil futures
    2006
 2006
 2005
 2005
 Carrying
 Carrying
 value
 Fair value
 value
 Fair value
 (Rand in millions)
  2,808
 2,808
    271
 271
    72
 72
     240
 240
    152
 –
    773
 773
    (442)
 (442)
    (12,817)
 (12,817)
    137
 137
    (166)
 (166)
    28
 28
    (93)
 (93)


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 Labour risk
  majority of the union members are blue-collar employees. The unions negotiate an annual wage agreementwhich is binding on employees in the bargaining unit which consists of occupational groupings of mainly bluecollar workers in the organisation. These agreements are valid from 1 July to 30 June of each year. There are nolong-term wage agreements in place.
   Mining Charter
  unions reached broad agreement on the Mining Charter, which is designed to facilitate the participation ofhistorically disadvantaged South Africans in the country’s mining industry. The Mining Charter’s statedobjectives include the:
         interpretation of and compliance with the Mining Charter (the scorecard) requires mining companies to ensurethat DHSAs hold at least 15% ownership of mining assets or equity in South Africa within 5 calendar years and26% ownership within 10 calendar years from the enactment of the new Mineral and Petroleum ResourcesDevelopment Act which came into force on 1 May 2004. The Mining Charter further specifies that the miningindustry is required to assist DHSAs in securing finance to fund their equity participation up to an amount ofR100 billion within the first 5 calendar years after the coming into force of the aforementioned Act. Beyond thisR100 billion commitment, the Mining Charter requires that participation of DHSAs should be increased towardsthe 26% target on a willing seller-willing-buyer basis at fair market value
  Minister of Minerals and Energy under the Mineral and Petroleum Resources Development Act (MPRD Act)with respect to the South African mining industry. These regulations came into force on 1 May 2004.
  mineral rights under the MPRD Act have complied with the provisions of the Mining Charter. It is intended thatthe entire scorecard would be taken into account in decision making. Notes attached to the scorecard provideguidance in interpreting the objectives of the Mining Charter.
  BEE strategy through the formation of Igoda Coal, an empowerment venture with Eyesizwe Coal, a black-owned mining company. Igoda Coal will be one of South Africa’s largest empowered coal export companies.Eyesizwe Coal owns 35% of the empowerment venture, while Sasol Mining holds the remaining 65%. Igodawill become fully operational as a statutory business entity and take transfer of the relevant mining area fromSasol Mining once the transfer of the mining rights have been effected.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
  that we will further expedite plans to advance the second phase of Sasol Mining’s broad-based BEE ownershipstrategy. This strategy will see Sasol Mining achieve full compliance with the Mining Charter’s 2009 and 2014targets, respectively, in pursuance of the conversion of its mining rights.
 Liquid Fuels Charter
  at least 25% ownership of the liquid fuels business by the year 2010. Initially it was envisaged that Tshwarisanowould acquire a 12.5% shareholding in the former proposed joint venture, Uhambo Oil, if the CompetitionTribunal had approved the proposed merger of our liquid fuels business with Petronas’ South African liquid fuelsbusiness. Pursuant to the Competition Act of 2000, the Competition Tribunal prohibited the merger on 20 February 2006.
   26.
 Net cash generated by operating activities
 30 June
 30 June
 30 June
 2006
 2005
 2004
 (Rand in millions)
  11,299
    157
    (13)
   Net loss/(income) from discontinued operations (including fair value write-down)
 2,860
     14,303
    (9)
    (261)
    203
    –
    6,452
    20,688
     26.1
 4,805
     26.2
 1,770
   27,263
    26.4
 (3,048)
    24,215
    294
    161
    (311)
    (5,484)
   18,875


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 26.1
 Non-cash items relating to continuing operations
 30 June
   2006
   (Rand in millions)
 Continuing operations
 amortization of intangible assets
 263
 300
 430
 capitalised exploration expenditure written off
 –
 33
 153
 depreciation of property, plant and equipment
 2,990
 2,755
 3,248
 effect of cash flow hedge accounting
 7
 20
 –
 share-based payments
 156
 128
 137
 impairment of:
 property, plant and equipment
 98
 134
 174
 goodwill
 3
 –
 21
 intangible assets
 18
 13
 5
 investments in securities
 –
 2
 5
 investments in equity accounted investees
 –
 35
 –
 loss/(gain) on disposal of:
 non-current assets
 50
 (7)
 (202)
 investments in businesses
 (262)
 (9)
 (50)
 equity accounted investees
 –
 (31)
 27
 scrapping of property,plant and equipment
 264
 250
 22
 proceeds from insurance
 (40)
 (159)
 –
 movement in long-term prepaid expenses
 71
 21
 –
 movement in provision for doubtful debts
 33
 (10)
 44
 movement in provision for inventory obsolescence
 23
 25
 (111)
 movement in short-term obligations
 317
 65
 –
 movement in pension and other post-retirement benefits
 38
 –
 –
 movement in long-term obligations
 421
 243
 (66)
 realisation of foreign currency translation reserve
 –
 (8)
 –
 translation effect of foreign currency loans
 198
 –
 –
 translation of net investment in foreign operations
 38
 210
 (570)
 write-down of inventories to market value
 119
 33
 60
 4,805
 4,043
 3,327
 26.2
 Cash flow from operations relating to discontinued operations
 Discontinued operations
 Net (loss)/income from discontinued operations
 (2,860)
 108
 (139)
 Losses of equity accounted investees
 1
 1
 1
 (Loss)/income before losses of equity accounted investees
 (2,859)
 109
 (138)
 Dividends received
 –
 (10)
 (8)
 Interest received
 (24)
 (34)
 (41)
 Finance costs
 108
 152
 204
 Income tax
 (2)
 271
 55
 Operating (loss)/profit
 (2,777)
 488
 72
 Adjusted for non-cash items (refer to note 26.3)
 4,547
 1,111
 1,834
 1,770
 1,599
 1,906
 F–99


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 26.3
 Non-cash items relating to discontinued operations
 30 June
 30 June
 30 June
 2006
 2005
 2004
 (Rand in millions)
 Discontinued operations
  32
    637
     39
    6
    86
     14
    –
    13
    3,110
    10
    6
    458
    136
    –
   4,547
   26.4
 (Increase)/decrease in working capital
  (65)
    (1,614)
    (748)
    (1,483)
    1,142
    (24)
    (256)
   (3,048)
   27.
 Dividends
 30 June
 30 June
 30 June
 2006
 2005
 2004
 (Rand in millions)
 Dividends paid
  (1,920)
    (1,740)
   (3,660)
   Dividends received
  –
    161
   161


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 28.
 Cash flow from investing activities
 28.1
 Acquisition of business
 30 June
 30 June
 30 June
 2006
 2005
 2004
 (Rand in millions)
  (355)
    2
    94
    (259)
   28.2
 Disposal of businesses
  1
    –
    –
    *
 324
    325
    –
    262
    587
   *Included in liabilities disposed of including deferred tax is R299 million which
 iGas Limited assumed as its portion of the shareholder’s loan granted to Republic of Mozambique Pipeline Investments Company (Pty) Limited.
 28.3
 Assets acquired under finance lease obligations
  –
   29.
 Related parties
  materials. These sales are in the ordinary course of business and terms and conditions are determined on anarm’s length basis.
  30 June
 30 June
 30 June
 2006
 2005
 2004
 (Rand in millions)
 Income
  1,742
   Expenses
  905


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
   30 June
 30 June
 30 June
 Relationship
 2006
 2005
 2004
 (Rand in millions)
 Receivables
   72
     63
     –
     129
     34
     42
     47
     15
     2
          –
     34
     –
    121
   559
   Long term receivables
   45
     –
     4
     29
     7
    7
   92
   Payables
   55
     87
     13
     4
     7
     –
     –
     –
    39
   205


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements (Continued)
 30.
 Post balance sheet events
   empowerment transaction had been successfully concluded. In terms of the agreement, Tshwarisano has, witheffect from 1 July 2006, acquired a 25% shareholding in Sasol Oil (Pty) Limited. Sasol is providing considerablefacilitation and support for Tshwarisano’s financing requirements.
  50% share to Dawn Limited for a consideration of R51 million. The transaction was approved by the SouthAfrican Competition Tribunal and became effective during October 2006.
  was approved, and an agreement for the acquisition has been signed for a consideration of US$ 31 million.Approval from the South African Competition Tribunal was obtained on 30 August 2006. The transactionbecame effective from 7 September 2006.
  appointed to investigate a windfall tax which may affect Sasol. In response to a report by the National TreasuryTask Team, Sasol, on 10 August 2006, submitted a written submission assessing possible reforms to the fiscalregime applicable to windfall profits in South Africa’s liquid fuel energy sector, with particular reference to thesynthetic fuel industry. Sasol participated in the public hearings held during August 2006. The task team handedtheir report containing their recommendations to the Minister of Finance on 26 September 2006. It is expectedthat the Minister of Finance’s decision will be announced in 2007.
  60,111,477 Sasol Limited shares held by its subsidiary, Sasol Investment Company (Pty) Limited. Oncerepurchased, these shares were cancelled. Except for the related transaction costs, the repurchase andcancellation of these shares will have no effect on the consolidated financial position of the group. At themeeting of 3 October 2006, shareholders also approved that Sasol be granted the authority to acquire SasolLimited shares by way of a general repurchase. Both of these special resolutions were registered by the SouthAfrican Registrar of Companies on 5 October 2005.
  Surplus Apportionment Scheme. Had this approval been obtained prior to year end, the prepaid pension assetwould have increased by R130 million.





Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements
 SUPPLEMENTAL OIL AND GAS INFORMATION (Unaudited)
  US Securities and Exchange Commission, this section provides supplemental information about oil and gasexploration and production operations. Tables 1 through to 3 provide historical information pertaining to costsincurred for property acquisitions, exploration and development; capitalized costs and results of operations.Tables 4 through to 6 present information on the estimated net proved reserve quantities; standardized measureof estimated discounted future net cash flows related to proved reserves and changes therein.
 TABLE 1 – COSTS INCURRED IN OIL AND GAS PROPERTY ACQUISITION, EXPLORATION,
 AND DEVELOPMENT ACTIVITIES
 Other
 Mozambique
 areas
 Total
 (Rand in millions)
 Year ended 30 June 2004Acquisition of unproved properties
                Year ended 30 June 2005Acquisition of unproved properties
                Year ended 30 June 2006Acquisition of unproved properties


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements
 TABLE 2 – CAPITALIZED COSTS RELATING TO OIL AND GAS PRODUCING ACTIVITIES
 Other
 Mozambique
 areas
 Total
 (Rand in millions)
 Year ended 30 June 2004Proved properties
                    Unproved propertiesUncompleted and non-producing wells and equipment
                Year ended 30 June 2005Proved properties
            Unproved propertiesUncompleted and non-producing wells and equipment
                Year ended 30 June 2006Proved properties
            Unproved propertiesUncompleted and non-producing wells and equipment


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements
 TABLE 3 – RESULTS OF OPERATIONS FOR OIL AND GAS PRODUCING ACTIVITIES
 Other
 Mozambique
 areas
 Total
 (Rand in millions)
 Year ended 30 June 2004Sales to unaffiliated parties
                                            Year ended 30 June 2005Sales to unaffiliated parties
                                    Year ended 30 June 2006Sales to unaffiliated parties


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements
 TABLE 4 – PROVED RESERVE QUANTITY INFORMATION
 Crude Oil and Condensate
 Natural Gas
 Other
 Other
 Mozambique
 areas
 Total
 Mozambique
 areas
 Total
 Millions of barrels
 Billions of cubic feet
 Proved developed and undeveloped reservesFirst estimate
                                                                             Proved developed reservesAt 30 June 2004
                         determined assessment of oil reserves was conducted during April 2006. As the license held over this property isa Production Sharing Contract, reserves reported represent the net economic interest volumes attributable to thecompany, after deduction for royalties, grossed up for income taxes.
  internally determined assessment of gas reserves was conducted during April 2006. In respect of Mozambicangas the standard pressure base used is 14.70 Psia and the standard temperature is 59°F in accordance with thespecifications set by the Government of Mozambique. Reserves reported represent the net economic interestvolumes attributable to the company, after deduction of production tax. Additionally, the volumes booked arerestricted to the take-or-pay quantities defined in the gas sales agreement for the 25-year term. A phasedapproach to field development has been followed and only the Temane field has currently been developed. It isplanned to commence with the development of the Pande field in 2007 and subsequently bringing it intoproduction.


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements
 NOTES & DEFINITIONS
    geologic and engineering data, appear with reasonable certainty to be recoverable in the future from known oiland gas reservoirs under existing economic and operating conditions i.e. prices and costs as of the date theestimate is made. Prices include consideration of changes in existing prices provided only by contractualarrangements, but not on escalations based upon future conditions. Proved reserves are limited to thosequantities of oil and gas which can be expected, with little doubt, to be recoverable commercially at currentprices and costs, under existing regularity practices and with existing conventional equipment and operatingmethods. Depending upon their status of development, such proved reserves are subdivided into “proveddeveloped reserves” and “proved undeveloped reserves”.
     TABLE 5 – STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS
 Other
 Mozambique
 areas
 Total
 (Rand in millions)
 Year ended 30 June 2004Future cash inflows
                            Year ended 30 June 2005Future cash inflows
                            Year ended 30 June 2006Future cash inflows


Sasol Limited and its subsidiaries
 Notes to the Consolidated Financial Statements
  is calculated in accordance with the requirements of FAS 69. Estimated future cash inflows from production arecomputed by applying year-end prices and year-end quantities of estimated net proved reserves. Futuredevelopment and production costs are those estimated future expenditures necessary to develop and produceyear-end estimated proved reserves based on year-end cost indices, assuming continuation of year-end economicconditions. Estimated future income taxes are calculated by applying appropriate year-end statutory tax rates.
  flows or value of proved oil and gas reserves. Estimates of proved reserve quantities shall change over time asnew information becomes available. Moreover, probable and possible reserves, which may become proved in thefuture, are excluded from the calculations. The arbitrary valuation prescribed under SFAS 69 requiresassumptions as to the timing of future development and production costs. The calculations are made as of eachfiscal year-end and should not be relied upon as an indication of the companies’ future cash flows or value oftheir oil and gas reserves.
 TABLE 6 – CHANGES IN THE STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET
 CASH FLOWS
 Other
 Mozambique
 areas
 Total
 (Rand in millions)


ITEM 19.
 EXHIBITS
          Christine Ramon, chief financial officer of Sasol Limited pursuant to 18 U.S.C. Section 1350, as adoptedpursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 *Incorporated by reference to our registration statement on Form 20-F filed on 6 March 2003.


SIGNATURES
    By:/s/ KANDIMATHIECHRISTINE RAMONKandimathie Christine RamonChief Financial officer


GLOSSARY OF TERMS
  The chemical compound acetic acid, systematically calledethanoic acid. Acetic acid is a carboxylic acid with chemicalformula C
 2
  4
  2
  3
  chemical structure. In pure form it has an ice crystal form, whichis called
  In chemistry, acetone is the simplest representative of theketones. It is a colorless mobile flammable liquid. The mostfamiliar household use of acetone is as the active ingredient innail polish remover. Acetone is also used to make plastic, fibers,drugs, and other chemicals.
  Acrylates are a family of polymers and are a type of vinylpolymer. Acrylates are produced from acrylate monomers.Acrylate monomers are esters which contain vinyl groups, thatis, two carbon atoms double-bonded to each other, directlyattached to the carbonyl carbon.
  An unsaturated acid produced mainly by oxidation of propylenethat polymerizes readily and is used as a building block foracrylic polymers.
  The determinations of the variability of the surface magnetismby trailing a detector behind an aircraft at a certain altitude abovesurface. These surveys are used to determine discrete magneticbodies in the near surface strata such as dolerite dykes and sills.
  Besides the potable form which is ethanol, the term refers to abroader class of chemicals. Alcohols are produced either fromnatural feedstocks such as sugar and coconut oil or syntheticallyfrom petroleum derivatives such as ethylene and propylene. Usedas solvents, fuels and beverages, or as intermediate in productionof range of products such as detergents, pharmaceuticals,plasticizers and fuels
    Derivative of ammonia in which one or more of the hydrogenatoms is replaced by a hydrocarbon group and not an alcoholgroup.
  Is a product formed by reacting an olefin with an aromaticcompound. In the case of linear alkylbenzene (“LAB”) this is thereaction of a C11 to C14 linear olefin with benzene. The LAB isthen normally reacted with sulfonic acid to produce a surfactantcalled Linear Alkylbenzene Sulfonate LAS.
  An olefin with a double bond between the 1st and 2nd carbonatoms. An Alpha Olefin can be linear or branched. Sasol Olefinsand Surfactants manufacture 1-Pentene, 1-Hexene, 1-Octene inSecunda, which are all Alpha Olefins.


A compound of nitrogen and hydrogen and used amongst othersfor the production of fertilizers, explosives and nitrogen-containing acids such as nitric acids.
  A solution in water of the ammonium nitrate salt used as anitrogen source in fertilizers and as an oxidising medium incommercial explosives.
  The continuous, recurrent volume of pipeline gas provided to amarket through a gas pipeline network, which determines theeconomic viability of the particular gas pipeline project,including the ability to obtain and repay financing for theproject.
    The ratio of the surface area divided by the number of boreholesand is an indication of the level of information for a specificproperty.
  The expansion of an existing mine working into adjacent reserveareas that are situated next to the existing mine boundaries. It iscontrary to greenfields development, where the development isnot done via an existing working mine.
  A chemical molecule consisting of 4 carbon atoms andhydrogen, containing two double-bonds in its structure. Usedpredominantly in the production of synthetic rubber.
  An organic chemical gas used extensively as a propellant orcarrier gas in spray aerosol cans (e.g. deodorants and othercosmetic applications)
  One of the olefins. Used: (1) as gasoline component,(2) comonomer for polyethylene, (3) polymerized with itself oralkylated with aromatics to produce high-octane gasolinecomponents.
  Butyl acrylate and ethyl acrylate are acrylic acid esters. Acrylicacid and its esters are perhaps some of the most versatilemonomers for improving performance characteristics tothousands of polymer formulations. Major markets for estersinclude coatings, textiles, adhesives, paper and plastics. Acrylicpolymers are considered as nontoxic.
  Butyl glycol ether (“BGE”) is a high performing ethylene glycolether solvent used in a wide range of applications. BGE can beused in both solvent and water based systems and is one of thebest available coupling agents and active solvents for waterbased coatings on the market today.
  An inorganic salt sold as a colourless liquid solution, is widelyused in dust control, moisture-absorbing, as an accelerator forconcretes.


A compound of carbon and a metallic or semi-metallic element(e.g., calcium, silicon, aluminum, boron).
  Clay sized sedimentary material that is encountered betweendiscrete correlateable coal seams.
 
 Material that may be present within a coal seam which iscomposed of sedimentary material, deposited in varyingvelocities of water, stagnant conditions for carbonaceousmudstone to slowly moving for siltstone.
  Gas produced by complete combustion of carbon-containingcompounds. Uses include dry ice (in solid form) and forcarbonation of beverages.
  A material that accelerates or retards a chemical reaction withoutbeing chemically affected itself (although it may be physicallychanged or even destroyed).
  A strong industrial alkali sold as a 50% m/m solution, is used inthe manufacture of pulp and paper, aluminium, base metals suchas copper and nickel.
  A hard and durable material with a crystalline structure and highresistance to chemical corrosion and heat, with a broad range ofapplications.
  The formation of new chemical substances from one or morereactants through the breakage of existing bonds between atomsand the creation of new ones.
  Is an inorganic liquid used as an intermediate in the productionof inter alia polyvinyl chloride (PVC polymer) and in waterpurification plants.
  The size fraction of coal, passing through a screen with anaperture of 6.3mm.
  Individual bands or laminations of different types of coal withinan individual coal seam that can be correlated horizontally for afinite distance.
  That part of the coal deposit which, after appropriateassessments, are considered to be economically mineable, at thetime of the reserve determination. It is inclusive of diluting andcontaminating materials and allows for losses that can occurwhen the material is mined.
  A metal element often found in the ores of other metals, soils,plants and animals. Component of catalyst systems used in thepetrochemical and oil refining industries.
  A brittle, solid, black, lightweight, hydrocarbon material, nearlypure carbon, left as a residual, after the volatiles and most of thenon-combustibles have been removed from coal.


A critical period during which a newly constructed or modifiedproduction facility is de-bugged, tested and “switched-on”,following which the facility is formally declared commerciallyproduction ready.
  A component added in smaller quantities to the base monomer inthe production of polymers (see Polymer) that by their presencein the polymer (e.g. automobile trim, plastic bag, water pipes)convey enhanced performance (appearance, flexibility, impactstrength) attributes to the polymer. Examples of co-monomersare: propylene, butene, hexene, octene and butyl acrylate.
  A hydrocarbon liquid that condenses from a gaseous state to aliquid state when produced.
  A remote-controlled vehicle used in an underground coal mine tocut and remove coal from the coalface with the aid of a spiked,rotating cutting drum.
    The slow destruction of metal by chemical reaction; for example,iron or steel can rust away through their reaction with oxygencontained in air or water.
  The technology that is used to partially decompose highmolecular weight compounds to lighter low boiling compoundsby using elevated temperatures to induce carbon-carbon bondcleavage.
  A black liquid derived from the gasification of coal and thesubsequent distillation of the coal tars. Commonly used as atimber preservative.
  A liquid obtained from coal tar and containing not more than 5 per cent phenol, ranging from colorless to yellow, brown, orpink. Its primary use is for sterilizing instruments, dishes,utensils, and other inanimate objects. Called also cresylic acid.
  A commercial blend of phenolic (ring shaped) molecules withhydroxyl groups (consisting of an oxygen and hydrogen atom)attached to it. Normally produced from coal tars when coal isgasified. Used in a wide range of applications such as resins,gasoline additive, coatings for magnet wire for small electricmotors, and disinfectants.
  A generic term for a mining reagent in the form of calcium orsodium cyanide solution.
  A separation device found on chemical facilities to separatematerial based on their densities which also separates course andfine particles.
  This refers to the changing of the nature of a chemical byreaction with a second chemical. For example, when an alcoholsuch as ethanol is reacted with acetic acid, ethyl acetate isproduced. Ethyl acetate is then a derivative of ethanol.


The effect that heating of the coal measures due to emplacementof dolerite dykes and sills, resulting in the coal losing some ofthe volatile matter content contained within the coal.
  The drilling of a continually steered drill hole from the surfaceinto the selected coal seam, in a predetermined direction and at apredetermined elevation.
  A process whereby mixtures of liquids are separated into theirindividual components under conditions of controlled heatingand pressure. Each component of the mixture has a boiling-pointunique to its chemical and physical properties enablingseparation.
  The igneous intrusions (cross cutting the strata–dykes, andpartially conformable to the strata–sills) in the strata related tothe emplacement of the basaltic lavas of the Lesotho BasaltFormation during the break up of the Gondwanaland supercontinent about 145 million years ago.
  Produced chemically from ethylene. Used as a gasoline octaneenhancer and oxygenate. Ethanol also can be used in higherconcentration in alternative-fuel vehicles optimized for its use.
  Surfactants that are produced by reacting long-chain alcoholmolecules with ethylene oxide (ethylene molecules combinedwith an oxygen molecule). Commonly used in detergentformulations.
  A colorless liquid at room temperature and atmospheric pressure.Commonly known in the chemical industry as an “ester”.Normally made from acetic acid and ethanol. Commonly used asa cleansing and extraction agent, in the paper and perfumeindustry and as a solvent (in ink and paint).
  One of the fundamental building blocks of the chemical industry.A colorless gas usually produced by cracking crude oil derivedfractions such as naphtha or natural gas fractions such as ethaneat high temperature. Used as a building block in the productionof polymers (polyethylene and polyvinyl chloride) and a wholerange of other chemicals.
  A term commonly used in the petrochemical industry to describea specific “range” (fraction) of hydrocarbons in a mixture, interms of their chemical and physical properties.
    The process where coal is reacted with oxygen, steam or carbondioxide at temperatures of above 850 degrees Celsius to producecarbon monoxide and hydrogen.
  Acrylic acid serves as an industrial intermediate product.Furthermore, acrylic acid is used as an ingredient and occurs asresidual monomer in consumer products like adhesives, paints,binding agents and printing inks. Crude acrylic acid is processedto purified (glacial) acrylic acid.


A co-monomer (see Co-monomer). A straight chain hydrocarbonmolecule containing 6 carbon atoms with one double bondbetween 2 carbon (usual terminal) atoms.
  A polymer made from a single monomer. The polymer does notcontain any co- monomer, example: polyethylene.
  The drilling of a horizontally orientated drill hole into the coalhorizon from the mine workings. These drill holes are used todetermine the presence of gas accumulations and displacementof the coal seam horizon.
  The broad classification of compounds that are comprised of acarbon skeleton to which hydrogen is bonded.
      A particular form of polymer that by chemical and mechanicaldesign is able to resist impact, e.g. automotive components.
  A process that changes the chemical and physical properties of amolecule without changing the atoms that make up thatmolecule. Typically used to upgrade marginal product streams ina refinery, i.e. from a lower to a higher octene rating.
  Ketones are a class of organic compound that contain one ormore carbonyl groups bound to two aliphatic, aromatic, oralicyclic substituents, and are represented by the general formula.Ketones are an important class of industrial chemicals that havefound widespread use as solvents and chemical intermediates.Acetone is the simplest and most important ketone and findsubiquitous use as a solvent
  Rare noble gases found in minute quantities in nature and usedin the lighting and laser technologies as well as flat panel TVand computer screens.
  A sedimentary rock composed mostly of calcium (the shellremains of marine animals), carbon and oxygen. One of itsindustrial uses is as an agricultural fertilizer, especially whenmixed with ammonium nitrate, which is rich in nitrogen.
  The dominant component of natural gas, which is highlyflammable. Used in the production of ammonia, methanol, as asource of heat and a feedstock for our GTL process.
  Colorless gas with a strong ammonia smell derived frommethanol and ammonia. It is used as an intermediate for dyes,pharmaceuticals, fungicides, tanning and solvents.
  A colorless liquid commonly used as a solvent (in adhesives,inks and paints) and a selective extractant.
  A flammable colorless liquid. It is used largely as a solvent insurface coatings.


A chemical capable of converting to long-chain polymers(plastics) or synthetic resins by combination with itself or othersimilar molecules or compounds.
  A crude oil fraction used in the fuel market as a primarycomponent for gasoline production. Also used as a feedstock forproduction of petrochemical products such as olefins andaromatics, which are the basic building blocks of otherdownstream chemical products.
  A straight chain hydrocarbon molecule containing 4 carbonatoms and a hydroxyl group at the end of the molecule. Also partof a family of molecules called “alcohols” (see Alcohols) or“oxygenates”(see Oxygenates). Used as a solvent for resins andcoatings or as an intermediate for production of other chemicals.
  A colorless strong acidic, corrosive liquid produced by oxidizingammonia. It is primarily used for the production of fertilizers andsome industrial explosives and chemicals.
  Noble gas is the family of gases that are chemically very stableand form the Group 0 elements in the periodic table.
  A comonomer (see Comonomer). A straight chain hydrocarbonmolecule containing eight carbon atoms and one double bondbetween carbon atoms. Used as a co-monomer in the productionof polymers.
  Hydrocarbon molecules of varying carbon chain lengthcharacterized by a double bond between atoms. They have abonding propensity which allows formation of larger molecules.They are used as chemical intermediates for production of avariety of components such as plasticizer alcohols, polymers,polyethylene, fatty acids, detergent alcohol, lube oil additivesand surfactants.
  The process of joining double bond hydrocarbon molecules(monomers) together to form short chained molecules consistingonly of a few monomers.
  Organic peroxides are a family of highly reactive agents used ascatalysts.
  Organic compounds containing one or two oxygen atoms in theirstructure. They include ketones, alcohols, phenols, esters andaldehydes which are used as intermediates for producing anumber of chemical products used in industries such as paints,adhesives, printing, coatings and pharmaceuticals.
  Straight or branched saturated hydrocarbons chain containingonly carbon and hydrogen atoms with its physical form varyingfrom gases to waxy solids as the length of the chain increases.They are derived from gas oil fractions. Their primary usage israw material for the production of olefins, Linear Alkylbenzenes(“LAB”), solvents, detergent alcohol and lubricants.


A white, translucent solid, consisting of hydrocarbons of highmolecular weight and derived from crude wax. Different waxesexhibit different physical properties such as structure of crystals,melting point and molecular weight. It can be used neat or asblends with additives for specific applications, such as candles,adhesives, polishes and cosmetics.
  A double bonded hydrocarbon with five carbon atoms. 1-Pentene(the double bond between atoms is at the start or the end of thechain) is used as a co-monomer in polypropylene production.
  Colorless liquid, used for applications like dry-cleaning solvent,vapor- degreasing solvent, drying agent and heat-transfermedium.
  A ring shaped molecule most commonly produced from cumene.It can also be recovered from coal tar and petroleum streams. Itis mainly used as a chemical intermediate for downstreamchemicals.
  The inorganic acid of phosphorus used in large quantities in theproduction of fertilizers, animal feeds, detergents and numerousother industrial applications.
    Phosphorous and phosphoric acid derived chemical, withcommercial markets in agricultural and industrial sectors, e.g.fertilizers, livestock supplements, paper and water treatment.
  Chemical additives used as processing aids to facilitate theproduction of PVC, resins and polymers and influencing thephysical properties of desired products.
  The lateral continuity of a similar type of coal within a coalseam, as opposed to the vertical continuity of a particular type ofcoal.
  A macromolecule consisting of a long chain of ethylenemolecules. It can be composed of straight-chain molecules (in aline formation), which provide a dense material known as high-density polyethylene, or of branched chain molecules (in abranch formation) that yield a product called low-densitypolyethylene. Used in a broad range of applications e.g. wire andcable coatings, pipe and molded fittings and packaging inespecially the food industry.
  A collective term typically used in reference to polyethylene,polypropylene and other polymers.
  To join molecules (monomers) of the same structure together soas to form larger molecules (polymers).
  A macromolecule consisting of a long chain of repeatingpropylene molecules. Commonly used for packaging film,molded parts for cars, appliances, housewares, fibers for carpetsand upholstery, crates for soft drink bottles, toys.


A polymer made from styrene, commonly used in applicationslike packaging, disposables, toys, construction and housewares.
    The plastic known as PVC commonly used for piping and otherapplications such as the production of gutters, toys, and gardenhoses. PVC is produced by first reacting ethylene with chlorineand subsequently using a suitable catalyst to convert theintermediate product to a long-chain molecule.
  One of the elemental metals that is essential in plant growth,animal and human nutrition, occurring in all soils. Potassium iscommonly used as a laboratory reagent, and as a component offertilizers.
  A physical form in which a chemical (e.g. urea, polyethylene) assolid is processed and sold.
  Reserves which can be expected to be recovered through existingwells with existing equipment and operating methods.
  Reserves which are expected to be recovered from new wells onundrilled acreage, or from existing wells where a relatively majorexpenditure is required for recompletion.
  Reserves for which quantity and grade and/or quality arecomputed from information similar to that used for proven(measured) reserves, but the sites for inspection, sampling, andmeasurement are farther apart or are otherwise less adequatelyspaced. The degree of assurance, although lower than that forproven (measured) reserves, is high enough to assume continuitybetween points of observation.
  Is a hydrocarbon used as an intermediate in the production ofpolypropylene (PP polymer) and n-Butanol.
  Reserves for which: (a) quantity is computed from dimensionsrevealed in outcrops, trenches, workings or drill holes; gradeand/or quality are computed from the results of detailedsampling; and (b) the sites for inspections, sampling andmeasurement are spaced so closely and the geologic character isso well defined that size, shape, depth and mineral content ofreserves are well-established.
  Industrial unit to provide the physical conditions required forspecific chemical reactions to take place.
  The tonnage of mineable, in situcoal reserves that are expectedto be recovered after all geological losses, dilution, mining losses(mining layout loss, mining layout extraction loss, miningrecovery efficiency factor), contamination and moisture contentcorrection factors have been applied. The assessmentsdemonstrate that at the time of reporting, economic extraction isreasonably justified. The recoverable coal reserves aresubdivided in order of increasing confidence into probable andproven recoverable reserves.


Large automated machines that consist of a rotating drum whichpicks up coal laid out on a pad in an orderly fashion and placesthat coal on a conveyor belt. Normally reclaimers will reclaimcoal at a constant rate.
  The recordable case rate (RCR) is the standard internationalmeasure for reporting work-related injuries and illnesses andother safety incidents resulting in injury. The RCR is the numberof fatalities, lost workdays, restricted work cases, transfer toanother job cases and medical treatments beyond first-aid casesfor every 200,000 employee hours worked, on a 12 month rollingaverage basis.
  Rearrangement or composition of hydrocarbon gases or low-octane petroleum fractions by heat and pressure, often in thepresence of a catalyst. Steam reforming of natural gas is animportant method of producing hydrogen.
  The mining method used in flat-lying shallow mineral deposits,where a number of roads are developed leaving pillars to hold upthe roof.
      A substance capable of dissolving another substance to form asolution at the molecular or ionic level. The main uses of organicsolvents are in the coatings field (paints, varnishes and lacquers),industrial cleaners, printing inks, extractive processes andpharmaceuticals.
  Large automated machines that stack coal from a conveyor belton to a flat pad in an orderly fashion. They consist of an inclinedconveyor and swinging boom.
  A liquid hydrocarbon partly composed of a ring-shaped molecule(benzene) with an ethylene side chain which can be easilyconverted to polystyrene used in packaging.
  A splitter column is used to separate a mixture of liquids intodifferent boiling fractions.
  A pale yellow non-metallic element found as a component ofcrude oil, natural gas and coal. Sulfur is commonly used inmaking gunpowder, matches, sulfuric acid, the vulcanizing ofrubber, and the treatment of skin diseases.
  The inorganic acid of Sulfur used as a leaching agent in mineralprocessing in the mining sector as well as in the production offertilizers and numerous other industrial applications
  Any compound that reduces surface tension when dissolved in water or water solutions, or which reduces interfacial tension between two liquids, or between a liquid and a solid. A surfactant facilitates the solution of otherwise immisciblecomponents e.g., oil and water. Also called surface-active agents.Used as the active ingredient in detergents.


The family of fuels that have comparable or better propertiesthan that of crude oil derived fuels but they are derived via oneof several potential synthesis routes using alternative feedstocksuch as coal or petroleum coke. Two examples of synfueltechnologies are indirect and direct liquefaction of coal.
  A sequence of processing units, each of them performing adifferent function to arrive at the final product.
  Trimerization is the joining of three molecules into one moleculesuch as trimerization of ethylene to form 1-hexene
  A soluble, colorless, crystalline, nitrogen-containing compoundderived from ammonia primarily used as a fertilizer.
         2
   2
   3
                       3
           The drilling of a drill hole using a diamond impregnated drill bitto acquire drill core for the entire length of the drill hole.Therefore a continuous sample of the rock mass is obtained overthe mineral bearing strata.
  A chemical substance consisting of silica and aluminumextensively used as a water-softener and a detergent component.








LOCALITY PLAN 1


LOCALITY PLAN 2


LOCALITY PLAN 3





Exhibit 8.1
 LIST OF SUBSIDIARIES
 Name
 Nature of business
 Country of incorporation
 Interest %
         chemical products and the refing of tar acids
      development and technology transfer
    investment and procurementof loans
            mining explosives, gases,petrochemicals, fertilizers
               required to enable them to thrive in the chemical industry
        between Temane in Mozambique and Secunda in South Africa forthe transportation of natural gas produced in Mozambique to markets in Mozambique and South Africa
                       of chemical productsSurfactants GmbH


Name
 Nature of business
 Country of incorporation
 Interest %
 
          investment and procurement of loans
     transportation of pipeline gas and the maintenance and operation of pipelines used for thetransportation of various types of gas
     distribution of olefin and surfactant products
     transportation of oil products,petrochemicals and chemical products and derivatives
               and distribution of petroleum and natural gas
            international GTL and CTL ventures
           distribution of waxes and wax related products
    distribution of waxes and wax related products


INCORPORATED JOINTLY CONTROLLED ENTITIES
 Name
 Nature of business
 Country of incorporation
 Interest %
                    which manufactures and markets plastic piping systems
           joint venture interests with Chevron corporation
                            of low-density polyethylene pellets