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## Delivering reliable returns through the cycle 

Over the past financial year, Sasol continued to deliver on its strategy by focusing on the world-class performance of our existing assets and progressing growth opportunities, based on our proprietary technology. The prompt actions taken in response to the global economic crisis, though painful, have resulted in a more efficient and effective organisation. Our financial position is strong and we have the fl exibility to pursue our sustainable growth strategy with vigour. Our focus remains on optimising our businesses, leveraging our technology and investing strategically to enhance shareholder returns on a sustainable basis. A particular area of focus in the year was ensuring full compliance with all aspects of competition law and improving and strenthening our compliance programme. 

## A strategic commitment to sustainability 

Sasol’s group executive committee (GEC) formally adopted sustainable development as a group-wide strategic business philosophy in 2000. Since then, we have taken various steps towards integrating sustainability principles in our activities, in the belief that a commitment to sustainable development yields an important competitive advantage. As part of fulfilling this commitment, we have developed, implemented and are continuously improving our management framework  to provide our businesses with the policies, governance structures, targets and reporting systems that are required to manage the risks and opportunities that sustainability presents. 

This commitment to sustainable development is coordinated at group level and implemented at business level, with ultimate responsibility residing with our board of directors. Our group chief executive takes formal responsibility for sustainability, both in his role as the group’s chief safety, health and environment (SH&E) 

FIN 

More detail on the composition and activities of these various committees is provided in the corporate governance report in our separately published annual fi nancial statements. 

Sasol reduced its cash fixed costs in 2010 while increasing volumes, particularly at Sasol Synfuels, Sasol Mining and Arya Sasol Polymer Company. Sasol Mining and our black economic empowerment (BEE) partner, Ixia Coal, delivered a remarkable 12% improvement in productivity alongside a cost saving of R125 million during the year. Seen in the context of sharply higher electricity costs in South Africa, which had a signifi cant impact on Sasol Synfuels and Sasol Mining in particular, this cost reduction is a great achievement. I am particularly pleased that we managed to reduce our cost base without forced retrenchments. 

Our chemicals businesses implemented far-reaching turnaround programmes to reduce costs and improve margins, and to introduce more flexibility to respond to changes in the macroenvironment. The results have been remarkable, with the chemicals businesses contributing 

officer, and through his leadership role in driving a values-based culture throughout the organisation. He is assisted on the GEC by an executive director who has responsibility for sustainable development issues, greenhouse gas management, skills development, Operations Excellence, and SH&E. The GEC receives strategic and operations-specifi c inputs from all businesses, as well as from specialised committees. One of these is the group executive SH&E committee, which reviews performance and considers and approves recommendations on sustainable development and SH&E guidelines and policy for the group. 

The board also receives input from the group risk and SH&E committee and the audit committee. In line with King III requirements, the audit committee plays a role in reviewing the integrated report and the nature of any associated external assurance processes. 

approximately 23% to the group’s operating profit. These businesses are well-positioned for the future. 

These operational achievements across the group translated into an operating profit of R23,9 billion, despite the rand’s 16% appreciation against the US dollar in the year. Throughout the economic turbulence of the last few years Sasol has maintained its record of profi tability and cash generation. This consistent performance has allowed the company to steadily reduce gearing from a high of 37% in 2005 to the unleveraged position we have held since last year. I believe this to be a testament to the actions taken by management over the last year, as well as to the inherent strength of Sasol’s existing energy and chemicals businesses. 

We have adopted a progressive dividend policy as indicated to the market in June. The final dividend declared was R7,70 per share, bringing the total dividend for the year to R10,50 per share. 

The strong financial performance, under difficult economic circumstances, was overshadowed by the tragic fatalities that occurred during the year. The deaths of eight people – employees and service providers – while carrying out their duties at Sasol has eclipsed an improved RCR of 0,51 for the year. In addition, there was one service provider fatality at premises leased from Sasol by the service provider, and not under Sasol’s control. Such avoidable loss of life is of great personal distress to me and several interventions are underway to rectify this unacceptable situation. These interventions underline the seriousness with which we take the safety of our people and our target of zero harm. 

## Delivering growth through technology and project execution 

Our strategy of securing low-value hydrocarbon resources and converting them, through our technology, into high-value energy and chemical products remains compelling. Our GTL technology puts us in a position to monetise low-value gas feedstock by producing high-quality liquid fuels. As gas prices decline relative to oil prices, as has been the case recently, our process becomes increasingly profi table. 

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