Financials

Notes to group financial statements (PDF - 295 KB)

Group financial statements

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Notes to the group financial statements

for the year ended 31 December 2004

Income statement
Balance sheet
Cash flow statement
Statement of recognised income and expense
Notes to the financial statements
- Notes 1 to 14
- Notes 15 to 28
- Notes 29 to 42

Notes to group financial statements (XLS - 839KB)

29 Retained earnings and other reserves
Figures in million	Retained earnings ⁽¹⁾	Non- distri- butable reserves ⁽²⁾	Foreign currency translation reserve	Actuarial gains (losses) ⁽³⁾	Other compre- hensive income ⁽⁴⁾	Total
US Dollars
Balance at December 2003 as previously reported	577	21	(113)	–	(307)	178
Change in accounting policy for translation of retained earnings (IAS 21 revised)	(220)		220			–
Change in accounting policy for actuarial gains and losses				(18)		(18)
As restated	357	21	107	(18)	(307)	160
Actuarial gains and losses recognised				(3)		(3)
Deferred taxation recognised directly in equity (note 34)				1		1
Profit attributable to equity shareholders	108					108
Dividends (note 16)	(179)					(179)
Net loss on cash flow hedges removed from equity and reported in income					134	134
Net gain on cash flow hedges					48	48
Deferred taxation on cash flow hedges (note 34)					(43)	(43)
Gain on available-for-sale financial assets					2	2
Translation		3	(424)	(2)	(18)	(441)
Balance at December 2004 (restated) ⁽⁵⁾	286	24	(317)	(22)	(184)	(213)
Actuarial gains and losses recognised				(27)		(27)
Deferred taxation recognised directly in equity (note 34)				11		11
Loss attributable to equity shareholders	(183)					(183)
Dividends (note 16)	(149)					(149)
Net loss on cash flow hedges removed from equity and reported in income					17	17
Net loss on cash flow hedges					(200)	(200)
Deferred taxation on cash flow hedges (note 34)					58	58
Gain on available-for-sale financial assets					2	2
Share-based payment expense					2	2
Translation		(2)	250	2	44	294
Balance at December 2005	(46)	22	(67)	(36)	(261)	(388)

Figures in million	Retained earnings ⁽¹⁾	Non- distri- butable reserves ⁽²⁾	Foreign currency translation reserve	Actuarial gains (losses) ⁽³⁾	Other compre- hensive income ⁽⁴⁾	Total
SA Rands
Balance at December 2003 as previously reported	3,848	138	(755)	–	(2,047)	1,184
Change in accounting policy for actuarial gains and losses				(112)		(112)
As restated	3,848	138	(755)	(112)	(2,047)	1,072
Actuarial gains and losses recognised				(15)		(15)
Deferred taxation recognised directly in equity (note 34)				5		5
Profit attributable to equity shareholders	728					728
Dividends (note 16)	(1,197)					(1,197)
Net loss on cash flow hedges removed from
equity and reported in income					864	864
Net gain on cash flow hedges					239	239
Deferred taxation on cash flow hedges (note 34)					(291)	(291)
Gain on available-for-sale financial assets					12	12
Translation			(2,797)		183	(2,614)
Balance at December 2004 (restated) ⁽⁵⁾	3,379	138	(3,552)	(122)	(1,040)	(1,197)
Actuarial gains and losses recognised				(173)		(173)
Deferred taxation recognised directly in equity (note 34)				68		68
Loss attributable to equity shareholders	(1,262)					(1,262)
Dividends (note 16)	(926)					(926)
Net loss on cash flow hedges removed from equity and reported in income					387	387
Net loss on cash flow hedges					(1,272)	(1,272)
Deferred taxation on cash flow hedges (note 34)					377	377
Gain on available-for-sale financial assets					17	17
Share-based payment expense					15	15
Translation			1,642		(139)	1,503
Balance at December 2005	1,191	138	(1,910)	(227)	(1,655)	(2,463)

(1)	$297m, R1,881m of retained earnings arising at the joint venture operations and certain subsidiaries may not be remitted without third party shareholder consent.
(2)	Non-distributable reserves comprise a surplus on disposal of company shares of $22m, R141m (2004: $25m, R141m) and other transfers.
(3)	With the adoption of IAS 19 revised, actuarial gains and losses are accounted for through equity reserves. Actuarial gains and losses arise from a change in assumption parameters and the difference between the actual and expected return on plan assets.
(4)	Other comprehensive income represents the effective portion of fair value gains or losses in respect of cash flow hedges until the underlying transaction occurs, upon which the gains or losses are recognised in earnings, fair value gains or losses on available-for-sale financial assets and the equity item for share-based payments.
(5)	The 2004 opening balances and comparative amounts have been restated in terms of the effects of changes in foreign exchange rates (IAS 21 revised).

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2004	2005		Figures in million		2005	2004
SA Rands					US Dollars
		30	Minority interests
354	327		Balance at beginning of year		58	53
123	146		Profit for the year		23	19
(125)	(125)		Dividends paid		(20)	(19)
18	-		At acquisition of subsidiaries (note 37)		-	3

3	4		Net loss on cash flow hedges removed from equity and reported in income		1	-
(3)	(9)		Net loss on cash flow hedges		(2)	-
(43)	31		Translation		(1)	2
327	374		Balance at end of year		59	58
		31	Borrowings
			Unsecured
5,191	5,867		Convertible Bonds ⁽¹⁾		925	920
			Semi-annual coupons are paid at 2.375% per annum. The bonds are convertible at the holders' option into ADSs up to February 2009 and are dollar-based. The bonds are convertible at a price of $65.00 per ADS.
			If the bonds have not been converted by 20 February 2009, they will be redeemed at par on 27 February 2009. AngloGold Ashanti Holdings plc has the option of calling an early redemption of all the bonds three years after their issuance, if the price of the ADSs exceeds 130% of the conversion price for more than 20 days during any period of 30-consecutive trading days.
-	2,927		Syndicated loan facility ($700m)		461	-
			Interest charged at LIBOR plus 0.4% per annum. This dollar-based loan is repayable in January 2008 and is subject to debt covenant arrangements for which no default event occurred.
2,057	2,062		Corporate Bond ⁽²⁾		325	364
			Semi-annual coupons are payable at 10.5% per annum.
			The bond is repayable on 28 August 2008 and is rand-based.
-	818		Money-market short-term borrowings at market-related interest rates are rand-based		129	-

87	124		RMB International (Dublin) Limited		20	16
			Interest charged at LIBOR plus 0.82% per annum. Loan is of a short-term nature, has no fixed repayment date and is dollar-based.
28	28		Bank Belgolaise		4	5
			Interest charged at LIBOR plus 1.5% per annum. Loan is repayable in 24 equal monthly instalments commencing October 2005 and is dollar-based.
12	13		Government of Mali		2	2
			Interest charged at LIBOR plus 2% per annum. Loans are repayable by December 2007 and are dollar-based.
8	4		Precious Fields Estates Company Ltd		1	1
			Annuity based repayments expiring October 2006. Loan is dollar-based.
8	3		Investec		1	1
			Interest charged at 6.5% per annum. Loan is repayable in half-yearly instalments terminating in June 2006 and is dollar-based.
-	3		Bank overdraft at market related rates is rand-based		-	-
1,498	-		Syndicated loan facility ($600m)		-	265
			Interest charged at LIBOR plus 0.7% per annum. Loan was repaid in February 2005, and was dollar-based.
56	-		Iduapriem - Syndicated Project Finance		-	10
			Interest charged at LIBOR plus 2% per annum. Loan was repaid in February 2005 and was dollar-based.
8,945	11,849		Total unsecured borrowings		1,868	1,584

2004	2005		Figures in million		2005	2004
SA Rands					US Dollars
		31	Borrowings (continued)
			Secured
			Finance leases
72	66		Senstar Capital Corporation		10	13
			Interest charged at an average rate of 6.83% per annum. Loans are repayable in monthly instalments terminating in November 2009 and are dollar-based. The equipment financed is used as security for these loans.
33	30		Rolls Royce		5	6
			Interest is charged at a variable rate of approximately 20% per annum, based on the lease contract. Loan is repayable in monthly instalments terminating in March 2011 and is dollar-based. The equipment financed is used as security for this loan.
6	6		Kudu Finance Company		1	1
			Interest charged at LIBOR plus 2% per annum. Loan is repayable in monthly instalments terminating in December 2010 and is dollar-based. The equipment financed is used as security for this loan.
			Other loans
-	64		Nulux Nukem Luxemburg GmbH		10	-
			Uranium repurchase agreement, dollar-based, with repurchases commencing in December 2006 and terminating in December 2008. Rate of finance is 5.42% per annum. Uranium inventory is secured against the contract.
6	-		Geita Syndicated Project Finance		-	1
			Interest charged at LIBOR plus 1.95% per annum. Loan was repaid in June 2005 and was dollar-based. Secured by pledge over the shares in the project company.
9,062	12,015		Total borrowings		1,894	1,605
1,800	1,190		Less: Current portion of borrowings included in current liabilities		188	319
7,262	10,825		Total long-term borrowings		1,706	1,286
			Amounts falling due
1,800	1,190		Within one year		188	319
35	65		Between one and two years		10	6
7,220	10,757		Between two and five years		1,696	1,279
7	3		After five years		-	1
9,062	12,015		(note 40)		1,894	1,605
			Currency
			The currencies in which the borrowings are denominated are as follows:
7,005	9,132		US dollars		1,440	1,241
2,057	2,883		SA rands		454	364
9,062	12,015				1,894	1,605
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2004	2005		Figures in million		2005	2004
SA Rands					US Dollars
		31	Borrowings (continued)
			Undrawn facilities
			Undrawn borrowing facilities as at 31 December 2005 are as follows:
-	1,555		Syndicated loan ($700m) - US dollar		245	-
-	266		Amalgamated Banks of South Africa Limited - US dollar		42	-
1,891	-		Syndicated loan ($600m) - US dollar		-	335
45	49		Citibank, N.A. - US dollar		8	8
54	35		RMB International (Dublin) Limited - US dollar		5	9
120	107		FirstRand Bank Limited - SA rands		17	21
45	45		Nedbank Limited - SA rands		7	8
-	30		Amalgamated Banks of South Africa Limited - SA rands		5	-
5	20		Commerzbank AG - SA rands		3	1
221	232		Australia and New Zealand Banking Group Limited - Australian dollar		37	39
2,381	2,339				369	421
			⁽¹⁾ Convertible Bonds
5,645	6,345		Senior unsecured fixed-rate bonds		1,000	1,000
444	529		Less: unamortised discount and bond issue costs		83	78

56	-		Less: fair value hedge accounting adjustment as a result of the interest rate swap		-	10
5,145	5,816				917	912
46	51		Add: accrued interest		8	8
5,191	5,867				925	920
			⁽²⁾ Corporate Bond
2,000	2,000		Senior unsecured fixed-rate bond		315	354
16	11		Less: unamortised discount and bond issue costs		2	3
1,984	1,989				313	351
73	73		Add: accrued interest		12	13
2,057	2,062				325	364
		32	Environmental rehabilitation and other provisions
			Environmental rehabilitation obligations
			*Provision for decommissioning*
326	566			Balance at beginning of year	100	49
148	-			Acquisition of subsidiaries (note 37)	-	22
84	282			Change in estimates ⁽¹⁾	44	13
51	21			Unwinding of decommissioning obligation (note 8)	3	8
(43)	39			Translation	(4)	8
566	908			Balance at end of year	143	100
			*Provision for restoration*
562	658			Balance at beginning of year	117	84
202	-			Acquisition of subsidiaries (note 37)	-	29
(10)	-			Disposal of subsidiaries (note 37)	-	(1)
116	149			Charge to income statement	23	18
(39)	408			Change in estimates ⁽¹⁾	64	(6)
-	40			Unwinding of restoration obligation (note 8)	6	-
(90)	(65)			Utilised during the year	(10)	(14)
(83)	45			Translation	(6)	7
658	1,235			Balance at end of year	194	117
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2004	2005		Figures in million		2005	2004
SA Rands					US Dollars
		32	Environmental rehabilitation and other provisions (continued)
			Other provisions
33	70			Balance at beginning of year	13	5
101	72			Charge to income statement	11	16
(52)	(36)			Utilised during the year	(6)	(8)
(12)	16			Translation	1	-
70	122			Balance at end of year	19	13
			Other provisions comprise the following:
70	119		Provision for labour and civil claim court settlements in South America ⁽²⁾		19	13
-	3		Provision for employee compensation claims in Australia ⁽³⁾		-	-
70	122				19	13
		⁽¹⁾	The change in estimates relates to changes in laws and regulations governing the protection of the environment and factors relative to rehabilitation estimates and a change in the quantities of material in reserves and a corresponding change in the life of mine plan. These provisions are anticipated to unwind beyond the end of the life of mine.
		⁽²⁾	Comprises claims filed by former employees in respect of loss of employment, work-related accident injuries and diseases, government fiscal claims relating to levies and surcharges and closure costs of old tailings operations. The liability is anticipated to unwind over the next two to five-year period.
		⁽³⁾	Comprises workers compensation claims filed by employees in Australia with regard to work-related incidents. The liability is anticipated to unwind over the next three to five-year period.
1,294	2,265		Total environmental rehabilitation and other provisions		356	230
		33	Provision for pension and post-retirement benefits
			Defined benefit plans
			The group has made provision for pension provident and medical schemes covering substantially all employees. The retirement schemes consist of the following:
69	(51)		AngloGold Ashanti Pension Fund (asset)		(8)	12
40	-		South American Brasil Fundambrás Pension Plan		-	7
2	1		Ashanti Retired Staff Pension Plan		-	-
60	58		Obuasi Mines Staff Pension Scheme		9	11
			Post-retirement medical scheme for AngloGold Ashanti South
924	1,172		African employees		185	164
(14)	(16)		Post-retirement medical scheme for Rand Refinery employees (asset)		(2)	(2)
11	12		Retiree Medical Plan for North American employees		2	2
			Supplemental Employee Retirement Plan (SERP) for North America
6	6		(USA) Inc employees		1	1
-	(1)		Retiree Medical Plan for Nufcor South Africa employees (asset)		-	-
1,098	1,181		Sub-total		187	195
			Transferred to other non-current assets (note 23):
-	51		AngloGold Ashanti Pension Fund		8	-
-	1		Retiree Medical Plan for Nufcor South Africa employees		-	-
14	16		Post-retirement medical scheme for Rand Refinery employees		2	2
1,112	1,249				197	197
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2004	2005		Figures in million		2005	2004
SA Rands					US Dollars
		33	Provision for pension and post-retirement benefits (continued)
			AngloGold Ashanti Pension Fund
			The plan is evaluated by independent actuaries on an annual basis as at 31 December of each year and a formal statutory valuation required by legislation as at 31 December 2005 will be completed during the first six months of 2006. In arriving at their conclusions, the actuaries took into account reasonable long-term estimates of inflation, increases in wages, salaries and pension as well as returns on investments.
			All South African pension funds are governed by the Pension Funds Act of 1956 as amended.
			Information with respect to the AngloGold Ashanti Pension Fund is as follows:
			Change in benefit obligation
1,089	1,219		Balance at beginning of year		216	163
41	40		Current service cost		6	6
91	88		Interest cost		14	14
14	13		Participants' contributions		2	2
65	200		Actuarial loss		31	10
(81)	(152)		Benefits paid		(24)	(13)
-	-		Translation		(23)	34
1,219	1,408		Balance at end of year		222	216
			Change in plan assets
920	1,150		Balance at beginning of year		204	138
95	106		Expected return on plan assets		16	15
124	260		Actuarial gain		41	19
78	82		Company contributions		13	12
14	13		Participants' contributions		2	2
(81)	(152)		Benefits paid		(24)	(13)
-	-		Translation		(22)	31
1,150	1,459		Balance at end of year		230	204
(69)	51		Funded status at end of year		8	(12)
(69)	51		Net amount recognised		8	(12)
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2004	2005		Figures in million		2005	2004
SA Rands					US Dollars
		33	Provision for pension and post-retirement benefits (continued)
			Pension benefit obligation
1,219	1,408		Benefit obligation		222	216
1,150	1,459		Fair value of plan assets		230	204
			Components of net periodic benefit cost
41	40		Current service cost		6	6
91	88		Interest cost		14	14
(95)	(106)		Expected return on assets		(16)	(15)
37	22		Net periodic benefit cost		4	5
			Assumptions
			Assumptions used to determine benefit obligations at the end of the year are as follows:
			Discount rate		7.75%	7.50%
			Rate of compensation increase ⁽¹⁾		5.00%	5.00%
			Expected long-term return on plan assets		10.14%	7.50%
			Pension increase		4.05%	2.90%
			⁽¹⁾ The short-term compensation rate increase is 5% and the long-term rate is 5.25%.
			The expected long-term return on plan assets is determined using the after tax yields of the various asset classes as a guide.
			Plan assets
			AngloGold Ashanti's pension plan weighted-average asset allocations at the end of the year, by asset category, are as follows:
			Asset category
			Equity securities		69%	65%
			Debt securities		30%	32%
			Other		1%	3%
					100%	100%
			Investment policy
			The Trustees have adopted a long-term horizon in formulating the Fund's investment strategy, which is consistent with the term of the Fund's liabilities. The investment strategy aims to provide a reasonable return relative to inflation across a range of market conditions.
			The Trustees have adopted different strategic asset allocations for the assets backing pensioner and active member liabilities. The strategic asset allocation defines what proportion of the Fund's assets should be invested in each major asset class. The Trustees have then selected specialist investment managers to manage the assets in each asset class according to specific performance mandates instituted by the Trustees.
			The Trustees have also put in place a detailed Statement of Investment Principles that sets out the Fund's overall investment philosophy and strategy.
			Fund returns are calculated on a monthly basis, and the performance of the managers and Fund as a whole is formally reviewed by the Fund's Investment Sub-Committee at least every six months.
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33	Provision for pension and post-retirement benefits (continued)
			2005		2004
		Number of shares	Percentage of total assets	Fair value	Percentage of total assets	Fair value
	US Dollars million
	Related parties
	Investments held in related parties are summarised as follows:
	Equity securities
	Holding company Anglo American plc	821,513	11.9%	27	2.2%	4
	Fellow subsidiaries of Anglo American plc group
	Anglo Platinum Group	432,310	13.5%	31	0.1%	-
	The Tongaat-Hulett Group	189,975	1.1%	3	-	-
	AngloGold Ashanti	36,936	0.8%	2	0.3%	1
				63		5
	Other investments exceeding 5% of total plan assets
	Bonds
	RSA 2015 Government Bonds 13.5%		5.4%	18	-	-
	RSA 2010 Government Bonds 13%		7.8%	12	8.5%	17
				30		17
	SA Rands million
	Related parties
	Investments held in related parties are summarised as follows:
	Equity securities
	Holding company Anglo American plc	821,513	11.9%	174	2.2%	23
	Fellow subsidiaries of Anglo American plc group
	Anglo Platinum Group	432,310	13.5%	198	0.1%	-
	The Tongaat-Hulett Group	189,975	1.1%	15	-	-
	AngloGold Ashanti	36,936	0.8%	11	0.3%	6
				398		29
	Other investments exceeding 5% of total plan assets
	Bonds
	RSA 2015 Government Bonds 13.5%		5.4%	113	-	-
	RSA 2010 Government Bonds 13%		7.8%	79	8.5%	96
				192		96
	Cash flows
	Contributions
	The company expects to contribute $7m, R46m (2005: $13m, R82m) to its pension plan in 2006. The reduction arises as additional contributions may no longer be required as the fund is likely to be fully funded at its next statutory actuarial valuation.

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2004	2005		Figures in million	2005	2004
SA Rands				US Dollars
		33	Provision for pension and post-retirement benefits (continued)
			Estimated future benefit payments
			The following pension benefit payments, which reflect the expected future service, as appropriate, are expected to be paid:
	92		2006	15
	92		2007	15
	94		2008	15
	95		2009	15
	96		2010	15
	939		Thereafter	147
			South American Brasil Fundambrás pension plan
			On 30 November 1998, the defined benefit fund was converted to a defined contribution fund with an actuarial net liability of $6m, R51m. This liability was revised annually by Mercer, the plan's actuary. The transfer of funds has been approved by the governmental SPC agency and the actuarial net liability of $10m, R61m has been funded and transferred to a defined contribution plan on 30 September 2005.

			Information with respect to the South American Brasil Fundambrás pension plan is as follows:
			Change in benefit obligation
112	126		Balance at beginning of year	22	16
12	13		Interest cost	2	2
15	3		Actuarial loss	1	3
-	(160)		Settlements and curtailments	(25)	-
(3)	(6)		Benefits paid	(1)	(1)
(10)	24		Translation	1	2
126	-		Balance at end of year	-	22
			Change in plan assets
79	86		Fair value of plan assets at beginning of year	15	11
8	8		Expected return on plan assets	1	1
9	-		Actuarial gain	-	2
-	(99)		Settlements and curtailments	(15)	-
(3)	(6)		Benefits paid	(1)	(1)
(7)	11		Translation	-	2
86	-		Fair value of plan assets at end of year	-	15
(40)	-		Funded status at end of year	-	(7)
(40)	-		Net amount recognised	-	(7)

2004	2005		Figures in million	2005	2004
SA Rands				US Dollars
		33	Provision for pension and post-retirement benefits (continued)
			Pension benefit obligation
126	-		Benefit obligation	-	22
86	-		Fair value of plan assets	-	15
			Components of net periodic benefit cost
12	13		Interest cost	2	2
(8)	(8)		Expected return on plan assets	(1)	(1)
4	5		Net periodic benefit cost	1	1
			Assumptions
			Assumptions used to determine benefit obligations at the end of the year are as follows:
			Discount rate	N/A	11.30%
			Rate of compensation increase	N/A	7.10%
			Expected long-term return on plan assets	N/A	11.30%
			Pension increase	N/A	5.00%
			Plan assets
			The Brasil Fundambrás defined benefit pension plan weighted-average asset allocations, by asset category, at the end of the year are as follows:
			Asset category
			Debt securities	-	95%
			Property	-	4%
			Cash	-	1%
				-	100%
			No valuation is necessary at 31 December 2005 as the fund has converted during the year to a defined contribution plan.
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2004	2005		Figures in million	2005	2004
SA Rands				US Dollars
		33	Provision for pension and post-retirement benefits (continued)
			Cash flows
			Contributions
			No company or participant contributions were made to this fund. The fund has been discontinued and the fund assets transferred to a defined contribution fund.
			Estimated future benefit payments
			There are no future benefit payments as the fund was terminated on 30 September 2005.
			Ashanti Retired Staff pension plan
			The pension scheme provides a retirement benefit to former Ashanti employees that were based at the former London office. The scheme is closed to new members and participants are either retired or are deferred members. The plan is evaluated by actuaries on an annual basis using the projected unit credit funding method. No contributions are made to the plan and it is funded with a marginal shortfall of $0.2m, R1m.
			Information with respect to the Ashanti Retired Staff pension plan is as follows:
			Change in benefit obligation
-	20		Balance at beginning of year	3	-
20	-		Acquisition of subsidiary	-	3
-	1		Interest cost	-	-
-	2		Actuarial loss	-	-
-	(1)		Translation	-	-
20	22		Balance at end of year	3	3
			Change in plan assets
-	18		Fair value of plan assets at beginning of year	3	-
18	-		Acquisition of subsidiary	-	3
-	1		Expected return on plan assets	-	-
-	2		Actuarial gain	-	-
18	21		Fair value of plan assets at end of year	3	3
(2)	(1)		Funded status at end of year	-	-
(2)	(1)		Net amount recognised	-	-
			Pension benefit obligation
20	22		Benefit obligation	3	3
18	21		Fair value of plan assets	3	3
			Components of net periodic benefit cost
-	1		Interest cost	-	-
-	(1)		Expected return on plan assets	-	-
-	-		Net periodic benefit cost	-	-

2004	2005		Figures in million	2005	2004
SA Rands				US Dollars
		33	Provision for pension and post-retirement benefits (continued)
			Assumptions
			Assumptions used to determine benefit obligations at the end of the year are as follows:
			Discount rate	5.00%	5.80%
			Expected long-term return on plan assets	6.07%	5.80%
			Pension increase	2.50%	2.50%
			The expected long-term return on plan assets is determined using the after tax return of domestic bonds and fixed-term investments.
			Plan assets
			The Ashanti Retired Staff defined benefit pension plan weighted-average asset allocations as at the end of the year, by asset category are as follows:
			Asset category
			Equity securities	51%	53%
			Debt securities	41%	43%
			Property	2%	0%
			Cash	6%	4%
				100%	100%
			Investment policy
			The general policy of the fund is to select investments that will achieve an optimal return on the plan assets.
			No investments are made in related party entities.
			Cash flows
			Contributions

			No contributions are made to this fund since the fund is closed to new members and the current members are retired or deferred.
			Estimated future benefit payments
			The following benefit payments, which reflect the expected future service, as appropriate, are expected to be paid:
	1		2006	-
	1		2007	-
	1		2008	-
	1		2009	-
	1		2010	-
	17		Thereafter	3
^ Back to top...
2004	2005		Figures in million	2005	2004
SA Rands				US Dollars
		33	Provision for pension and post-retirement benefits (continued)
			Obuasi Mines Staff Pension Scheme
			The scheme provides monthly payments in Ghanaian currency (indexed to the US dollar) to retirees until death. The benefits under the scheme are based on the years of service and the compensation levels of the covered retirees. The scheme is closed to new members and all the scheme participants are retired. The scheme is unfunded and accordingly, no assets related to the scheme are recorded. The scheme is evaluated by actuaries on an annual basis.
			Information with respect to the Obuasi Mines Staff Pension Scheme is as follows:
			Change in benefit obligation
-	60		Balance at beginning of year	11	-
73	-		Acquisition of subsidiary	-	11
-	3		Interest cost	-	-
-	(7)		Actuarial gain	(1)	-
-	(5)		Benefits paid	(1)	-
(13)	7		Translation	-	-
60	58		Balance at end of year	9	11
(60)	(58)		Funded status at end of year	(9)	(11)
(60)	(58)		Net amount recognised	(9)	(11)
			Pension benefit obligation
60	58		Benefit obligation	9	11
-	-		Fair value of plan assets	-	-
			Components of net periodic benefit cost
-	3		Interest cost	-	-
			Assumptions
			Assumptions used to determine benefit obligations at the end of the year are as follows:
			Discount rate	4.0%	4.0%
			Rate of compensation increase	N/A	N/A
			Pension increase	3.0%	4.5%

2004	2005		Figures in million	2005	2004
SA Rands				US Dollars
		33	Provision for pension and post-retirement benefits (continued)
			Cash flows
			Contributions
			No contributions are made to this fund since the fund is closed to new members and the current members are all retired.
			Estimated future benefit payments
			The following pension benefit payments, which reflect the expected future service, as appropriate, are expected to be paid:
	6		2006	1
	6		2007	1
	6		2008	1
	6		2009	1
	6		2010	1
	28		Thereafter	4
			Post-retirement medical scheme for AngloGold Ashanti South African employees
			The provision for post-retirement medical funding represents the provision for health care benefits for employees and retired employees and their registered dependants.
			The post-retirement benefit costs are assessed in accordance with the advice of independent professionally qualified actuaries. The actuarial method used is the projected unit credit funding method. This scheme is unfunded. The last valuation was performed as at 31 December 2005.
			Information with respect to the defined benefit liability is as follows:
			Change in benefit obligation
850	924		Benefit obligation at beginning of year	164	128
4	7		Current service cost	1	1
81	80		Interest cost	12	13
62	30		Participants' contributions	5	10
(156)	(105)		Benefits paid	(16)	(24)
9	-		Plan amendments	-	1
74	236		Actuarial loss	37	11
-	-		Translation	(18)	24
924	1,172		Balance at end of year	185	164
(924)	(1,172)		Funded status at end of year	(185)	(164)
(924)	(1,172)		Net amount recognised	(185)	(164)
^ Back to top...
2004	2005		Figures in million	2005	2004
SA Rands				US Dollars
		33	Provision for pension and post-retirement benefits (continued)
			Components of net periodic benefit cost
4	7		Current service cost	1	1
81	80		Interest cost	12	13
9	-		Amortisation of past service cost	-	1
94	87		Net periodic benefit cost	13	15
			The assumptions used in calculating the above amounts at year end are:
			Discount rate	7.75%	9.00%
			Expected increase in health care costs	5.00%	5.00%
			Assumed health care cost trend rates at 31 December:
			Health care cost trend assumed for next year	5.00%	5.00%
			Rate to which the cost trend is assumed to decline (the ultimate trend rate)	5.00%	5.00%
			Year that the rate reaches the ultimate trend	N/A	N/A
	1% point increase		Assumed health care cost trend rates have a significant effect on the amounts reported for health care plans. A 1% point change in assumed health care cost trend rates would have thefollowing effect:	1% point increase
	10		Effect on total service and interest cost	2
	125		Effect on post-retirement benefit obligation	19
	1% point decrease			1% point decrease
	(9)		Effect on total service and interest cost	(1)
	(107)		Effect on post-retirement benefit obligation	(16)
			Cash flows
			Post-retirement medical plan AngloGold Ashanti expects to contribute $13m, R82m (2005: $12m, R75m) to the post-retirement medical plan in 2006.
			Estimated future benefit payments
			The following medical benefit payments, which reflect the expected future service, as appropriate, are expected to be paid:
	82		2006	13
	86		2007	14
	90		2008	14
	95		2009	15
	100		2010	16
	719		Thereafter	113
			Post-retirement medical scheme for Rand Refinery Limited employees
			The Rand Refinery Retiree Medical Plan (Medipref) is a non-contributory defined benefit plan in respect of certain past qualifying employees. The accumulated post-employment medical aid obligation was determined by independent actuaries in September 2005 using the projected unit credit funding method. Movements that could impact the valuation between the interim date and the date of the balance sheet have been considered. The plan is fully funded and is evaluated by independent actuaries on an annual basis.

2004	2005		Figures in million	2005	2004
SA Rands				US Dollars
		33	Provision for pension and post-retirement benefits (continued)
			Information with respect to the post-retirement medical plan and obligation for the Rand Refinery Ltd past employees is as follows:
			Change in benefit obligation
-	16		Balance at beginning of year	3	-
18	-		Transfer in	-	3
3	1		Interest cost	-	-
(1)	(1)		Benefits paid	-	-
(4)	-		Actuarial gain	-	-
16	16		Balance at end of year	3	3
			Change in plan assets
-	30		Fair value of plan assets at beginning of year	5	-
29	-		Transfer in	-	5
2	3		Expected return on plan assets	-	-
(1)	(1)		Benefits paid	-	-
30	32		Fair value of plan assets at end of year	5	5
14	16		Funded status at end of year	2	2
14	16		Net amount recognised (note 23)	2	2
			Components of net periodic benefit cost
3	1		Interest cost	-	-
(2)	(3)		Expected return on plan assets	-	-
1	(2)		Net periodic benefit cost	-	-
			Assumptions
			Assumptions used at year end are as follows:
			Discount rate	7.75%	10.00%
			Expected increase in health care costs	5.75%	8.00%
			Expected return on plan assets	7.26%	10.00%
			Assumed health care cost trend rates at 31 December:
			Health care cost trend assumed for next year	5.75%	8.00%
			Rate to which the cost trend is assumed to decline (the ultimate trend rate)	5.75%	8.00%
			Year that the rate reaches the ultimate trend	N/A	N/A
	1% point increase		Assumed health care cost trend rates have a significant effect on the amounts reported for health care plans. A 1% point change in assumed health care cost trend rates would have the following effect:	1% point increase
	-		Effect on total service and interest cost	-
	2		Effect on post-retirement benefit obligation	-
	1% point decrease			1% point decrease
	-		Effect on total service and interest cost	-

	(1)		Effect on post-retirement benefit obligation	-
^ Back to top...
2004	2005		Figures in million	2005	2004
SA Rands				US Dollars
		33	Provision for pension and post-retirement benefits (continued)
			Plan assets
			The weighted-average asset allocation of the Rand Refinery post retirement medical fund as at the end of the year, by asset category, is as follows:
			Asset category
			Debt securities	75%	90%
			Cash	25%	10%
				100%	100%
			Cash flows
			Post-retirement medical plan
			Rand Refinery Limited does not make a contribution to the scheme as the scheme is closed to new members and the current members are retired.
			Estimated future benefit payments
			The following medical benefit payments, which reflect the expected future service, as appropriate, are expected to be paid:
	1		2006	-
	1		2007	-
	1		2008	-
	2		2009	-
	2		2010	-
	9		Thereafter	3
			North America Retiree Medical Plan
			AngloGold Ashanti USA provides health care and life insurance benefits for certain retired employees under the AngloGold North America Retiree Medical Plan (the Retiree Medical Plan). With effect from 31 December 1999, no additional employees were eligible to receive post-retirement benefits under the Retiree Medical Plan. Curtailment accounting was applied at 31 December 1999.
			The Retiree Medical Plan is a non-contributory defined benefit plan. This plan is evaluated by independent actuaries on an annual basis. It was last evaluated by independent actuaries in September 2005 who took into account reasonable long-term estimates of increases in health care costs and mortality rates in determining the obligations of AngloGold Ashanti USA under the Retiree Medical Plan. The evaluation of the Retiree Medical Plan reflected liabilities of $2m, R12m (2004: $2m, R11m). The Retiree Medical Plan is an unfunded plan. The Retiree Medical Plan is evaluated using the projected unit credit funding method. The company does not share in future cost increases and therefore the rate of compensation increase is not applicable.

2004	2005		Figures in million	2005	2004
SA Rands				US Dollars
		33	Provision for pension and post-retirement benefits (continued)
			Information with respect to the Retiree Medical Plan is as follows:
			Change in benefit obligation
13	11		Balance at beginning of year	2	2
1	1		Interest cost	-	-
(1)	(1)		Benefit paid	-	-
(2)	1		Translation	-	-
11	12		Balance at end of year	2	2
(11)	(12)		Funded status at end of year	(2)	(2)
(11)	(12)		Net amount recognised	(2)	(2)
			Net periodic pension and post-retirement benefit costs include:
1	1		Interest cost	-	-
1	1		Net periodic benefit cost	-	-
			Assumptions used in calculating benefit obligations at the end of the year are as follows:
			Discount rate	5.5%	6.0%
			Benefits are fixed and independent from inflation and consequently health care increases are not relevant.
	1% point increase		Assumed health care cost trend rates have a significant effect on the amounts reported for health care plans. A 1% point change in assumed health care cost trend rates would have the following effect:	1% point increase
	-		Effect on total service and interest cost	-
	1		Effect on post-retirement benefit obligation	-
	1% point decrease			1% point decrease
	-		Effect on total service and interest cost	-
	(1)		Effect on post-retirement benefit obligation	-
^ Back to top...
2004	2005		Figures in million	2005	2004
SA Rands				US Dollars
		33	Provision for pension and post-retirement benefits (continued)
			Cash flows
			Contributions
			No contributions are made to this fund since the fund is closed to new members and the current members are all retired.
			Estimated future benefit payments
			The following pension benefit payments, which reflect the expected future service, as appropriate, are expected to be paid:
	1		2006	-
	1		2007	-
	2		2008	-
	1		2009	-
	1		2010	-
	6		Thereafter	2
			North America Supplemental Employee Retirement Plan
			Certain former employees of Minorco (USA) Inc. were covered under the Minorco (USA) Inc. Supplemental Employee Retirement Plan (The SERP), a non-contributory defined benefit plan. The SERP was last evaluated by independent actuaries in 2005 who took into account long-term estimates of inflation, mortality rates in determining the obligation of AngloGold Ashanti USA under the SERP. This evaluation of the SERP reflected plan liabilities of $1m, R6m (2004: $1m, R6m). The SERP is an unfunded plan and is evaluated by actuaries on an annual basis using the projected unit credit funding method.
			Information with respect to the SERP is as follows:
			Change in benefit obligation
6	6		Balance at beginning and end of year	1	1
(6)	(6)		Funded status at end of year	(1)	(1)
(6)	(6)		Net amount recognised	(1)	(1)
			There is no net periodic pension and post-retirement cost during 2005 and 2004. The discount rate used to determine the benefit obligation at 31 December was 5.5% (2004: 6.0%).
			No contributions are made to this fund since the fund is closed to new members and the current members are all retired.
			Estimated future benefit payments
			The pension benefit payments, which reflect the expected future service, as appropriate, are expected to be paid after 2010 and amount to $1m, R6m.
			Nuclear Fuels South Africa (NUFCOR) - Retiree Medical Plan
			The Nufcor South Africa Retiree Medical Plan (Mascom) is a defined benefit plan in respect of certain past qualifying employees. The accumulated post-employment medical aid obligation was determined by independent actuaries in September 2005 using the projected unit credit funding method. Movements that could impact the valuation between the interim date and the date of the balance sheet have been considered. The plan is fully funded.

2004	2005		Figures in million	2005	2004
SA Rands				US Dollars
		33	Provision for pension and post-retirement benefits (continued)
			Information with respect to the Nufcor South Africa Retiree Medical Plan is as follows:
			Change in benefit obligation
2	2		Balance at beginning of year	-	-
-	(1)		Benefit paid	-	-
-	1		Actuarial loss	-	-
2	2		Balance at end of year	-	-
			Change in plan assets
2	2		Fair value of plan assets at beginning of year	-	-
-	1		Expected return on plan assets	-	-
-	1		Employee contributions	-	-
-	(1)		Benefits paid	-	-
2	3		Fair value of plan assets at end of year	-	-
-	1		Funded status at end of year	-	-
-	1		Net amount recognised	-	-
			Components of net periodic benefit cost
-	(1)		Expected return on plan assets	-	-
			Assumptions
			Assumptions used at year end are as follows:
			Discount rate	7.75%	11.00%
			Expected increase in health care costs	5.75%	9.00%
			Expected return on plan assets	7.75%	11.00%
			Assumed health care cost trend rates at 31 December:
			Health care cost trend assumed for next year	5.75%	9.00%
			Rate to which the cost trend is assumed to decline (the ultimate trend rate)	5.75%	9.00%
			Year that the rate reaches the ultimate trend	N/A	N/A
	1% point increase		Assumed health care cost trend rates have a significant effect on the amounts reported for health care plans. A 1% point change in assumed health care cost trend rates would have the following effect:	1% point increase
	-		Effect on total service and interest cost	-
	-		Effect on post-retirement benefit obligation	-
	1% point decrease			1% point decrease
	-		Effect on total service and interest cost	-
	-		Effect on post-retirement benefit obligation	-
^ Back to top...
2004	2005		Figures in million	2005	2004
SA Rands				US Dollars
		33	Provision for pension and post-retirement benefits (continued)
			Cash flows
			Contributions
			No contributions are made to this fund since the fund is closed to new members and the current members are all retired.
			Estimated future benefit payments
			The medical benefit payments, which reflect the expected future service, as appropriate, are expected to be paid after 2010 and amount to $nil, R2m.
			Plan assets
			The weighted-average asset allocation of the Nufcor South Africa post-retirement medical fund as at the end of the year, by asset category, is as follows:
			Asset category
			Unit trust investment funds	100%	100%

Defined Contribution Funds
Contributions to the various retirement schemes are fully expensed during the year in which they are funded and the cost of contributing to retirement benefits for the year amounted to $31m, R199m (2004: $40m, R254m).

Australia
The region contributes to the Australian Retirement Fund for the provision of benefits to employees and their dependants on retirement, disability or death. The fund is a multi-industry national fund with defined contribution arrangements. Contribution rates by the operation on behalf of employees varies, with minimum contributions, meeting compliance requirements under the Superannuation Guarantee legislation. Members also have the option of contributing to approved personal superannuation funds. The contributions by the operation are legally enforceable to the extent required by the Superannuation Guarantee legislation and relevant employment agreements.

Namibia (Navachab)
Navachab employees are members of a defined contribution provident fund. The fund is administered by the Old Mutual insurance company. Both the company and the employees make contributions to this fund. AngloGold Ashanti seconded employees at Navachab remain members of the applicable pension or retirement fund in terms of their conditions of employment with AngloGold Ashanti. The cost to the group of all these contributions amounted to $1m, R6m (2004: $1m, R6m) during the year.

Mali (Sadiola, Yatela and Morila)
The Malian operations do not have retirement schemes for employees. All employees (local and expatriate) contribute towards the Government social security fund, and the company also makes a contribution towards this fund. On retirement, Malian employees are entitled to a retirement benefit from the Malian government. Expatriate employees are reimbursed only their contributions to the social security fund. AngloGold Ashanti seconded employees in Mali remain members of the applicable pension or retirement fund in terms of their conditions of employment with AngloGold Ashanti. The cost to the group of all these contributions amounted to $2m, R12m (2004: $4m, R19m) during the year.

Tanzania (Geita)
Geita does not have a retirement scheme for employees. Tanzanian nationals contribute to the National Social Security Fund (NSSF) or the Parastatal Provident Fund (PPF), depending on the employee's choice, and the company also makes a contribution on the employee's behalf to the same fund. On leaving the group, employees may withdraw their contribution from the fund. From July 2005, the company contributes to a supplemental provident fund which has been opened with the Parastatal Provident Fund (PPF). The company makes no contribution towards any retirement schemes for contracted expatriate employees that are members of a pension or provident fund. Contracted expatriate employees who are not members of a pension or provident fund contribute to the National Social Security Fund (NSSF) and the company also makes a contribution to the same fund on behalf of these employees. AngloGold Ashanti employees seconded in Tanzania remain members of the applicable pension or retirement fund in terms of their conditions of employment with AngloGold Ashanti.

North America
AngloGold Ashanti USA sponsors a 401(k) savings plan whereby employees may contribute up to 17% of their salary, of which up to 5% is matched at a rate of 150% by AngloGold Ashanti USA. AngloGold Ashanti USA's contributions were $2m, R13m (2004: $2m, R13m) during the year ended 31 December 2005.

South America
The AngloGold Ashanti South America region operates a number of defined contribution arrangements for their employees. These arrangements are funded by the operations (basic plan) and operations/employees (optional supplementary plan). In December 2001, contributions commenced to a PGBL fund, a plan similar to the American 401 (k) type of plan. This plan is administered by Bradesco Previdencia e Seguros (which assume the risk for any eventual actuarial liabilities).

In 2005, the local authorities approved the withdrawal of sponsorship to the previous portfolio administrator, Fundambras Sociedade de Previdencia Privada. With this scheme, the actuarial risk was carried by the sponsors and AngloGold Ashanti mines in Brazil had to fund the $10m, R61m in cash in order to have the process completed by 29 September 2005. From 1 October 2005, the PGBL fund is the only private pension plan sponsored by the group and contributions amounted to $1m, R6m (2004: $1m; R6m) during the year.

Ghana and Guinea
AngloGold Ashanti mines in Ghana and Guinea contribute to provident plans for their employees which are defined contribution plans. The funds are administered by Boards of Trustees and invest mainly in Ghana and Guinea governments' treasury instruments, fixed term deposits and other projects. The cost of these contributions were $3m, R20m (2004: $2m, R12m) for the year ended 31 December 2005.

South Africa
South Africa contributes to various industry-based pension and provident retirement plans which covers substantially all employees and are defined contribution plans. These plans are all funded and the assets of the schemes are held in administrated funds separately from the group's assets. The cost of providing these benefits amounted to $19m, R122m (2004: $29m, R181m) during the year.

^ Back to top...
2004	2005		Figures in million		2005	2004
SA Rands					US Dollars
		34	Deferred taxation
			Deferred taxation
			Deferred taxation relating to temporary differences is made up as follows:
			Liabilities
9,088	9,424			Tangible assets	1,485	1,610
96	115			Inventories	18	17
445	189			Derivatives	30	79
160	312			Other	49	28
9,789	10,040				1,582	1,734
			Assets
577	914			Provisions	144	102
358	1,099			Derivatives	173	63
1,042	841			Tax assets	132	184
159	112			Other	18	29
2,136	2,966				467	378
7,653	7,074		Net deferred taxation liability		1,115	1,356
			Included in the balance sheet as follows:
-	279			Deferred tax asset	44	-
7,653	7,353			Deferred tax liabilities	1,159	1,356
7,653	7,074			Net deferred taxation liability	1,115	1,356
			The movement on the deferred tax balance is as follows:
3,929	7,653			Balance at beginning of year	1,356	589
-	(1)			Fair value adjustments	-	-
(572)	(732)			Income statement charge (note 13)	(115)	(107)
291	(377)			Taxation on other comprehensive income (note 29)	(58)	43
(5)	(68)			Tax on actuarial loss (note 29)	(11)	(1)
4,927	-			Acquisition of subsidiaries (note 37)	-	728
(8)	-			Disposal of subsidiaries (note 37)	-	(1)
(909)	599			Translation	(57)	105
7,653	7,074			Balance at end of year	1,115	1,356

2004	2005		Figures in million		2005	2004
SA Rands					US Dollars
		35	Trade, other payables and deferred income
			Non-current
21	87		Deferred income		14	4
21	87		(note 40)		14	4
			Current
1,175	1,374		Trade creditors		216	209
56	-		Interest payable		-	10
980	815		Accruals		128	174
27	31		Amounts due to related parties		5	4
11	36		Deferred income		6	2
335	321		Unearned premiums on normal sale exempted contracts		51	59
45	134		Other creditors		21	8
2,629	2,711		(note 40)		427	466
			Current trade and other payables are non-interest bearing and are normally settled within 60 days.

2004	2005		Figures in million		2005	2004
SA Rands					US Dollars
		36	Cash generated from operations
745	(1,117)		(Loss) profit before taxation		(160)	97
			Adjusted for:
6	267		Non-cash movements		41	4
1,055	1,744		Movement on non-hedge derivatives		262	181
2,423	3,203		Amortisation of tangible assets (notes 4, 10 and 17)		503	380
(144)	(153)		Deferred stripping		(24)	(21)
(318)	(155)		Interest receivable (note 3)		(25)	(49)
(80)	444		Operating special items		68	(12)
563	690		Finance costs and unwinding of decommissioning and restoration obligations (note 8)		108	87
208	13		Amortisation of intangible assets (notes 18 and 19)		2	32
(160)	211		Fair value adjustment on option component of convertible bond		32	(27)
(776)	(714)		Movements in working capital		(108)	(84)
3,522	4,433				699	588
			Movements in working capital:
(1)	(1,086)		Increase in inventories		(123)	(56)
1	(46)		Decrease (increase) in trade and other receivables		23	(40)
(776)	418		(Decrease) increase in trade and other payables		(8)	12
(776)	(714)				(108)	(84)

2004	2005		Figures in million		2005	2004
SA Rands					US Dollars
		37	Acquisitions and disposals of subsidiaries
			Acquisitions and disposals can be summarised as follows:
17,603	-		Tangible assets		-	2,587
312	-		Intangible assets		-	49
526	-		Inventories		-	77
28	-		Other investments		-	5
302	-		Trade and other receivables		-	45
356	-		Cash and cash equivalents		-	51
(18)	-		Minority interests (note 30)		-	(3)
(1,333)	-		Borrowings		-	(195)
(415)	-		Provisions (notes 32 and 33)		-	(61)
(4,919)	-		Deferred taxation (note 34)		-	(727)
(1,612)	-		Trade and other payables		-	(233)
(25)	-		Taxation		-	(4)
10,805	-		Carrying value		-	1,591
-	-		Profit on disposal of subsidiary		-	-
10,805	-		Net purchase consideration		-	1,591
(9,297)	-		Non-cash settlement - shares		-	(1,366)
15	-		Deferred sale consideration		-	2
(356)	-		Cash and cash equivalents		-	(51)
(28)	-		Term deposits included in other investments		-	(5)
1,139	-		Net cash flow on (acquisition) disposal		-	171
(1,139)	-		Net cash flow on (acquisition) disposal can be summarised as follows:		-	(171)
(1,139)	-		Purchase of Ashanti Goldfields Company Limited		-	(171)
-	-		Deferred sale consideration of Freda-Rebecca		-	-
Ashanti						Ashanti
Goldfields						Goldfields
Company						Company
Limited			Acquisition comprises the following:			Limited
17,639	-		Tangible assets (note 17)		-	2,592
312	-		Intangible assets (note 18)		-	49
28	-		Other investments		-	5
546	-		Inventories		-	80
312	-		Trade and other receivables		-	46
356	-		Cash and cash equivalents		-	51
(18)	-		Minority interests (note 30)		-	(3)
(1,343)	-		Borrowings		-	(197)
(425)	-		Provisions (notes 32 and 33)		-	(62)
(4,927)	-		Deferred taxation (note 34)		-	(728)
(1,635)	-		Trade and other payables		-	(236)
(25)	-		Taxation		-	(4)
10,820	-		Carrying value		-	1,593
-	-		Goodwill		-	-
10,820	-		Purchase consideration		-	1,593
(9,297)	-		Non cash settlement - shares		-	(1,366)
(356)	-		Cash and cash equivalents		-	(51)
(28)	-		Term deposits included in other investments		-	(5)
1,139	-		Cash flow on acquisition		-	171
Freda-						Freda-
Rebecca			Disposals comprise the following:			Rebecca
36	-		Tangible assets (note 17)		-	5
20	-		Inventories		-	3
10	-		Trade and other receivables		-	1
(10)	-		Borrowings		-	(2)
(10)	-		Provisions (note 32)		-	(1)
(8)	-		Deferred taxation (note 34)		-	(1)
(23)	-		Trade and other payables		-	(3)
15	-		Carrying value		-	2
-	-		Profit on disposal of subsidiary		-	-
15	-		Sale consideration		-	2
(15)	-		Deferred sale consideration		-	(2)
-	-		Cash flow on disposal		-	-
			On 23 April 2004, the High Court of Ghana confirmed the scheme of arrangement between Ashanti Goldfields Company Limited and its shareholders pursuant to which AngloGold would acquire the entire issued ordinary share capital of Ashanti. The confirmation of the High Court was lodged with the Registrar of Companies in Ghana on Monday, 26 April 2004, and the acquisition of Ashanti and the name change to AngloGold Ashanti Limited became effective on 26 April 2004.
			On 10 September 2004, AngloGold Ashanti confirmed its agreement to sell its entire interest in Ashanti Goldfields Zimbabwe Limited to Mwana Africa Holdings (Pty) Limited for a deferred consideration of $2m, R15m. The sole operating asset of Ashanti Goldfields Zimbabwe Limited is the Freda-Rebecca Gold Mine.

38 Related parties
Details of material transactions with those related parties not dealt with elsewhere in the financial statements are summarised below:
Figures in million	Purchases by (from) related parties	Amounts owed to (by) related parties 2005	Purchases by (from) related parties	Amounts owed to (by) related parties 2004
US Dollars
Holding company Anglo American plc	5	1	5	-
Fellow subsidiaries of the Anglo American plc group
Anglo Coal - a division of Anglo Operations Limited	1	-	1	-
Boart Longyear Limited - mining services ⁽¹⁾	5	-	9	1
Haggie Steel Wire Rope Operations ⁽²⁾	8	1	9	-
Mondi Limited - timber	16	2	16	2
Scaw Metals - a division of Anglo Operations Limited - steel and engineering	6	1	5	1
The Tongaat-Hulett Group Limited	-	-	-	-
Joint ventures of AngloGold Ashanti Limited
BGM Management Company Pty Ltd	-	-	-	-
Geita Gold Mining Limited	-	-	-	-
Societé d' Exploitation des Mines d' Or de Sadiola S.A.	-	-	1	-
Societé d' Exploitation des Mines d' Or de Yatela S.A.	-	-	1	-
Societé des Mines de Morila S.A.	(2)	-	(1)	-

SA Rands
Holding company Anglo American plc	30	7	34	-
Fellow subsidiaries of the Anglo American plc group
Anglo Coal - a division of Anglo Operations Limited	4	2	6	2
Boart Longyear Limited - mining services ⁽¹⁾	30	-	60	6
Haggie Steel Wire Rope Operations ⁽²⁾	50	6	59	-
Mondi Limited - timber	105	11	101	10
Scaw Metals - a division of Anglo Operations Limited - steel and engineering	40	4	32	5
The Tongaat-Hulett Group Limited	1	-	-	-
Joint ventures of AngloGold Ashanti Limited
BGM Management Company Pty Ltd	1	-	-	-
Geita Gold Mining Limited	-	-	(2)	-
Societé d' Exploitation des Mines d' Or de Sadiola S.A.	(3)	1	5	2
Societé d' Exploitation des Mines d' Or de Yatela S.A.	3	-	6	1
Societé des Mines de Morila S.A.	(10)	-	(7)	1

Amounts owed to related parties are unsecured non-interest bearing and normally settled within 60 days.
⁽¹⁾	Anglo American plc sold their interest in Boart Longyear Limited with effect from 29 July 2005.
⁽²⁾	Haggie Steel Wire Rope Operation's related party transactions, previously included in Scaw Metals - a division of Anglo Operations Limited. During the year, Haggie Steel Wire Rope Operations were unbundled and are now reported separately.
Directors and other key management personnel Details relating to directors' emoluments and shareholdings in the company are disclosed in the remuneration and directors' reports. (Detailed on pages 113 to 126) Compensation to key management personnel totalled $13m, R79m (2004: $9m, R55m). This total comprised short-term employee benefits of $11m, R69m (2004: $8m, R51m); post-employment benefits of $1m, R7m, (2004: $1m, R4m); and share-based payments of $1m, R3m (2004: nil). Shareholders The principal shareholders of the company are detailed on page 118 and 265.

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2004	2005		Figures in million	2005	2004
SA Rands				US Dollars
		39	Contractual commitments and contingencies
			Operating leases
			At 31 December 2005, the group was committed to making the following payments in respect of operating leases for amongst others, hire of plant and equipment and land and buildings.
			Expiry within
347	209		- One year	33	62
147	163		- Between one and two years	26	26
223	127		- Between two and five years	20	39
4	2		- After five years	-	1
721	501			79	128
			Finance leases
			The group has finance leases for plant and equipment. These leases have terms of renewal but no purchase options and escalation clauses. Renewals are at the option of the specific entity that holds the lease. Future minimum lease payments under finance lease contracts together with the present value of the net minimum lease payments are as follows:

Present value of payments	Minimum payments			Minimum payments	Present value of payments
2005				2005
SA Rands				US Dollars
28	44		Within one year	7	5
77	96		Within one year but not more than five years	15	12
2	2		More than five years	-	-
107	142		Total minimum lease payments	22	17
-	35		Less: amounts representing finance charges	5	-
107	107		Present value of minimum lease payments	17	17

Present value of payments	Minimum payments			Minimum payments	Present value of payments
2004				2004
SA Rands				US Dollars
23	39		Within one year	7	4
88	117		Within one year but not more than five years	20	16
7	10		More than five years	2	1
118	166		Total minimum lease payments	29	21
-	48		Less: amounts representing finance charges	8	-
118	118		Present value of minimum lease payments	21	21

2004	2005		Figures in million	2005	2004
SA Rands				US Dollars
			Capital commitments
			Acquisition of tangible assets
835	1,182		Contracted for	186	148
3,716	4,597		Not contracted for	725	658
4,551	5,779		Authorised by the directors	911	806
			Allocated for:
			Project expenditure
1,741	1,204		- within one year	190	308
833	671		- thereafter	106	148
2,574	1,875			296	456
			Stay-in-business expenditure
818	3,628		- within one year	572	145
1,159	276		- thereafter	43	205
1,977	3,904			615	350
1	50		Share of underlying capital commitments of joint ventures	8	-
			This expenditure will be financed from existing cash resources, cash from operations and future borrowings.
			Contingent liabilities
			The South African Department of Water Affairs and Forestry issued a new Directive on 1 November 2005 ordering the four mining groups, Simmer and Jack Investments (Proprietary) Limited, Simmer and Jack Mines Limited (collectively known as Simmers who purchased the Buffelsfontein shafts from DRDGold Limited), Harmony Gold Mining Company Limited, AngloGold Ashanti and Stilfontein Gold Mining Company to share equally, the costs of pumping water at Stilfontein's Margaret Shaft. This follows an interdict application made by AngloGold Ashanti in response to DRDGold Limited's threat to cease funding the pumping of water at the Margaret and Buffelsfontein shafts, after placing Buffelsfontein, its subsidiary that operated the North West operations, into liquidation on 22 March 2005. Simmers have purchased the Buffelsfontein shafts from DRDGold Limited and have assumed the environmental and water management liabilities associated with the Buffelsfontein shafts.
-	-		The directive also orders the mining companies to submit an agreement and a joint proposal towards the long term sustainable management of water arising from the mining activities in the area. The group believes that it is not liable to fund these pumping costs but cannot make any assurances regarding the ultimate result until the matter has been settled.	-	-
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2004	2005		Figures in million	2005	2004
SA Rands				US Dollars
-	-		The group has identified a number of groundwater pollution sites at its current operations in South Africa. The group has investigated a number of different technologies and methodologies that could possibly be used to remediate the pollution plumes. The viability of the suggested remediation techniques in the local geological formation in South Africa is however unknown. No sites have been remediated in South Africa. Present research and development work is focused on several pilot projects to find a solution that will in fact yield satisfactory results in South African conditions. Subject to the technology being developed as a remediation technique, no reliable estimate can bemade for the obligation.	-	-
-	-		Following the decision to discontinue operations at Ergo in 2005, employees surplus to requirements have been terminated and retrenchment packages settled. Ergo continues to retain various staff members to complete the discontinuance and the attendant environmental obligations which are expected to be completed by 2015. The retained employees may resign, be transferred within the group, attain retirement age or be retrenched as their current position is made redundant. The group is currently unable to determine the effects, if any, of any potential retrenchment costs.	-	-
8	34		The group has undertaken to re-export certain gold artifacts, temporarily imported into South Africa, for which custom and value added tax was waived. The group will be required to pay if it fails to comply with the re-export arrangements agreed with the South African Revenue Service.	5	1
-	100		The group has provided surety in favour of the lender in respect of gold loan facilities to wholly-owned subsidiaries of Oro Group (Proprietary) Limited, an associate of the group. The group has a total maximum liability, in terms of the suretyships of R100m. The suretyship agreements have a termination notice period of 90 days.	16	-
			Mineração Serra Grande S.A., the operator of the Crixas mine in Brazil, has received assessments from the State of Goias tax inspection related to payments of sales taxes on gold deliveries for export. Serra Grande is owned by AngloGold Ashanti and Kinross Gold Corporation in a 50:50 arrangement. AngloGold Ashanti manages the operation and its attributable share of the assessment is approximately $29m, R184m. Mineração Serra Grande S.A. believes the assessments are in violation of federal legislation on sales taxes and that there is a remote chance of success for the State of Goias.
-	-		The assessment has been appealed.	-	-

2004	2005		Figures in million	2005	2004
SA Rands				US Dollars
–	16		A group of employees of Mining and Building Contractors (MBC), the Obuasi underground developer, are claiming to be employees of the group. If successful there is the risk of some employees claiming rights to share options.	3	–
–	17		Bayswater Construction and Mining Limited (BCM) has instituted court proceedings against Ashanti Goldfields Bibiani Limited (AGB). This matter concerns a contractual dispute. This matter is currently stayed on technical grounds as litigation cannot commence until arbitration has been concluded. A loss of $2m, R13m is considered likely and has been raised as a provision. The amount disclosed under contingent liabilities is over and above the provision.	3	–
–	6		BCM claims against AGB, $1m, R6m in relation to a wall slip which BCM considered that they have the exclusive right under their contract to repair, but which was awarded by AGB to a third party.	1	–
1	1		The group has a potential liability at Navachab in Namibia to pay the outstanding capital cost of the water pipeline and electricity supply in case of mine closure prior to 2019. Based on current life-of-mine business plans, the group believes the likelihood of this potential liability being realised to be more than remote but less than likely.	–	–
			Sierra Club and Mineral Policy Center filed two lawsuits against Cripple Creek & Victor Gold Mining Company, AngloGold Ashanti (Colorado) Corp., AngloGold Ashanti North America Inc., and Golden Cycle Gold Corporation alleging various past and ongoing violations of the federal Clean Water Act at the Cresson Project near Victor, Colorado. The defendants dispute that there have been or that there are ongoing violations of the Clean Water Act, and have been vigorously defending themselves. The trial is scheduled February 2006. Without conceding any liability but in an attempt to resolve these matters without the cost and expense of trial the parties have held settlement discussions and the defendants have offered approximately $0.5m, R3m to conduct on-the-ground activities and pay some of plaintiffs costs.
–	3		At this time, no settlement has been reached.	1	–
			Pursuant to the assignment of equipment leases to Queenstake Resources USA Inc., as a result of the sale of Jerritt Canyon effective 30 June 2003, AngloGold Ashanti USA has become secondarily liable in the event of a default by Queenstake Resources USA Inc. in performance of any of the lessee's obligations arising under the lease.
3	2		These agreements have an approximate term remaining of three years.	–	1
			AngloGold Ashanti North America had a potential liability in respect of preference claims from a third party. This was in respect of gold shipments returned by the third party to AngloGold Ashanti North America, which the bankruptcy trustee claimed should not have been returned and final shipments that should not have been paid, as the third party had filed for protection under Chapter 11 of the US
11	–		Bankruptcy Code. These claims were dismissed during 2005.	–	2
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2004	2005		Figures in million	2005	2004
SA Rands				US Dollars
			Guarantees
			The following amounts have been guaranteed and have been recognised on balance sheet:
–	–		AngloGold Offshore Investments Limited a wholly-owned subsidiary of AngloGold Ashanti has given a guarantee of 50% of the Nufcor International Limited loan facility with RMB International (Dublin) Limited amounting to $25m, R159m.	–	–
–	–		AngloGold Ashanti Limited and its wholly-owned subsidiary AngloGold Ashanti Holdings plc have issued hedging guarantees to several counterparty banks in which they have guaranteed the due performance by the Geita Management Company Limited (GMC) of its obligations under or pursuant to the hedging agreements entered into by GMC, and to the payment of all money owing or incurred by GMC as and when due. The guarantee shall remain in force until no sum remains to be paid under the hedging agreements and the Bank has irrevocably recovered or received all sums payable to it under the hedging agreements. The maximum potential amount of future payments is all monies due, owing or incurred by GMC under or pursuant to the hedging agreements. At 31 December 2005 the marked-to-market valuation of the GMC hedge book was negative $172m, R1,090m of which $122m, R771m was raised on the balance sheet and the remainder treated under the NPNS exemption.	–	–
			The group has guaranteed all payments and other obligations of AngloGold Ashanti Holdings plc regarding the convertible bonds issued during 2004 with a fiscal maturity date of 27 February 2009. The bonds issued amounted to $1billion at 2.375%. The group’s obligations regarding the guarantee will be direct, unconditional and unsubordinated.
–	–		The group has issued gold delivery guarantees to several counterparty banks in which it guarantees the due performance of its wholly-owned subsidiaries AngloGold Ashanti USA Inc. and AngloGold Ashanti South America under their respective gold hedging agreements.	–	–
–	–		The group, together with its wholly-owned subsidiary, AngloGold Ashanti Holdings plc, has provided guarantees to several counterparty banks for the hedging commitments of its wholly owned subsidiary Ashanti Treasury Services Limited (ATS). At 31 December 2005, the marked-to-market valuation of the ATS hedge book was negative $723m, R4,591m, of which $112m, R711m was raised on the balance sheet while the remainder was treated under the NPNS exemption.	–	–
23	179			29	4

40 Financial risk management activities

In the normal course of its operations, the group is exposed to gold price, currency, interest rate, liquidity and credit risks. In order to manage these risks, the group may enter into transactions which make use of both on- and off-balance sheet derivatives. The group does not acquire, hold or issue derivatives for trading purposes. The group has developed a comprehensive risk management process to facilitate, control and monitor these risks. The board has approved and monitors this risk management process, inclusive of documented treasury policies, counterpart limits, controlling and reporting structures.

Controlling risk in the group

The Executive Committee and the Treasury Committee are responsible for risk management activities within the group. The Treasury Committee, chaired by the independent chairman of the AngloGold Ashanti Audit and Corporate Governance Committee, comprising executive members and treasury executives, reviews and recommends to the Executive Committee all treasury counterparts, limits, instruments and hedge strategies. The treasurer is responsible for managing investment, gold price, currency, liquidity and credit risk. Within the treasury function, there is an independent risk function, which monitors adherence to treasury risk management policy and counterpart limits and provides regular and detailed management reports.

The financial risk management objectives of the group are defined as follows:

Safeguarding the group core earnings stream from its major assets through the effective control and management of gold price risk, foreign exchange risk and interest rate risk;
Effective and efficient usage of credit facilities in both the short and long term through the adoption of reliable liquidity management planning and procedures;
Ensuring that investment and hedging transactions are undertaken with creditworthy counterparts;
Ensuring that all contracts and agreements related to risk management activities are coordinated, consistent throughout the group and comply where necessary with all relevant regulatory and statutory requirements.

Gold price and currency risk and cash flow hedging

Gold price risk arises from the risk of an adverse effect on current or future earnings resulting from fluctuations in the price of gold. The gold market is predominately priced in US dollars which exposes the group to the risk that fluctuations in the SA rand/US dollar, Brazilian real/US dollar, Argentinian peso/US dollar and Australian dollar/US dollar exchange rates may also have on current or future earnings.

A number of products, including derivatives, are used to manage well-defined gold price and foreign exchange risks that arise out of the group's core business activities. Forward-sales contracts and call and put options are used by the group to protect itself from downward fluctuations in the gold price. These derivatives may establish a minimum price for a portion of future production while the group maintains the ability, to benefit from increases in the spot gold price for the majority of future gold production. At year end, hedge cover was at 35% of five years production.

Some of the instruments described above are designated and accounted for as cash flow hedges. The hedge forecast transactions are expected to occur over the next 10 years, in line with the maturity dates of the hedging instruments and will affect profit and loss simultaneously in an equal and opposite way. The fair value of all instruments so designated at the balance sheet date is a negative $338m, R2,142m.

Net delta open hedge position as at 31 December 2005

The group had the following net forward-pricing commitments outstanding against future production.

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Summary: All open contracts in the group's commodity hedge position as at 31 December 2005
Year		2006	2007	2008	2009	2010	2011-2015	Total
US Dollar/Gold
Forward contracts
Amount (kg)		8,592	25,469	30,076	26,288	16,328	37,239	143,992
$/oz		$279	$357	$365	$380	$382	$411	$375
Put options purchased
Amount (kg)		8,592	1,455					10,047
$/oz		$345	$292					$337
Put options sold
Amount (kg)		6,532		855	1,882	1,882	7,527	18,678
$/oz		$389		$390	$400	$410	$435	$411
Call options purchased
Amount (kg)		12,144	6,357					18,501
$/oz		$346	$344					$345
Call options sold
Amount (kg)		32,157	32,544	32,500	31,194	28,054	72,911	229,360
$/oz		$386	$387	$393	$418	$429	$497	$432

Summary: All open contracts in the group's commodity hedge position as at 31 December 2005
Year		2006	2007	2008	2009	2010	2011-2015	Total
Rand/Gold
Forward contracts
Amount (kg)			2,449		933			3,382
R/kg			R97,520		R116,335			R102,711
Put options purchased
Amount (kg)		1,875						1,875
R/kg		R93,602						R93,602
Put options sold
Amount (kg)		2,333						2,333
R/kg		R93,713						R93,713
Call options sold
Amount (kg)		3,306	311		2,986	2,986	2,986	12,575
R/kg		R102,447	R108,123		R202,054	R216,522	R230,990	R183,851
Australian Dollar/Gold
Forward contracts
Amount (kg)		(3,110)⁽¹⁾	6,843	2,177	3,390	3,110		12,410
A$/oz		A$625	A$640	A$665	A$656	A$684		A$664
Call options purchased
Amount (kg)		3,110	3,732	3,110	1,244	3,110		14,306
A$/oz		A$673	A$668	A$680	A$694	A$712		A$684
Total net gold
Delta (kg) ⁽²⁾		23,848	56,229	59,740	57,703	42,074	97,482	337,076
Delta (oz) ⁽²⁾		766,730	1,807,802	1,920,683	1,855,192	1,352,709	3,134,115	10,837,231
⁽¹⁾	Indicates a long position resulting from forward purchase contracts. The group enters into forward purchase contracts as part of its strategy to actively manage and reduce the size of the hedge book.
⁽²⁾	The Delta of the hedge position indicated above, is the equivalent gold position that would have the same marked-to-market sensitivity for a small change in the gold price. This is calculated using the Black-Scholes option formula with the ruling market prices, interest rates and volatilities as at 31 December 2005.
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US Dollar/Silver
Put options purchased
Amount (kg)		43,545	43,545	43,545				130,635
$/oz		$7.11	$7.40	$7.66				$7.39
Put options sold
Amount (kg)		43,545	43,545	43,545				130,635
$/oz		$6.02	$5.93	$6.19				$6.05
Call options sold
Amount (kg)		43,545	43,545	43,545				130,635
$/oz		$8.11	$8.40	$8.64				$8.38

Summary: All open contracts in the group's currency hedge position as at 31 December 2005
Year		2006	2007	2008	2009	2010	2011-2015	Total
Rand/US Dollar (000)
Put options purchased
Amount ($)		60,000						60,000
R per $		R6.89						R6.89
Put options sold
Amount ($)		60,000						60,000
R per $		R6.56						R6.56
Call options sold
Amount ($)		60,000						60,000
R per $		R7.28						R7.28
Australian Dollar (000)
Forward contracts
Amount ($)		59,149						59,149
$ per A$		$0.75						$0.75
Put options purchased
Amount ($)		80,000						80,000
$ per A$		$0.73						$0.73
Put options sold
Amount ($)		80,000						80,000
$ per A$		$0.76						$0.76
Call options sold
Amount ($)		130,000						130,000
$ per A$		$0.72						$0.72
Brazilian Real/US Dollar (000)
Forward contracts
Amount ($)		24,000	4,000					28,000
BRL per $		BRL3.18	BRL3.31					BRL3.20
Call options sold
Amount ($)		20,000						20,000
BRL per $		BRL3.29						BRL3.29
The mix of hedging instruments, the volume of production hedged and the tenor of the hedging book is continually reviewed in the light of changes in operational forecasts, market conditions and the group's hedging policy. Forward sales contracts require the future delivery of gold at a specified price. A put option gives the put buyer the right, but not the obligation, to sell gold to the put seller at a predetermined price on a predetermined date. A call option gives the call buyer the right, but not the obligation, to buy gold from the call seller at a predetermined price on a predetermined date. The marked-to-market value of all derivatives, irrespective of accounting designation, making up the hedge position was negative $1.94bn (negative R12.32bn) as at 31 December 2005 (as at 31 December 2004: negative $1.16bn, negative R6.58bn). These values were based on a gold price of $517.00/oz, exchange rates of $1 = R6.305 and A$1 = $0.7342 and the prevailing market interest rates and volatilities at 31 December 2005. Interest rate and liquidity risk Fluctuations in interest rates impact on the value of short-term cash investments and financing activities, giving rise to interest rate risk. In the ordinary course of business, the group receives cash from the proceeds of its gold sales and is required to fund working capital requirements. This cash is managed to ensure surplus funds are invested in a manner to achieve market-related returns while minimising risks. The group is able to actively source financing at competitive rates. The syndicated $600m facility was repaid on 4 February 2005, and a new three year $700m syndicated facility was signed in January 2005, with an interest rate of LIBOR plus 0.4% per annum. The group has sufficient undrawn borrowing facilities available to fund working capital requirements.

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Cash and short-term loans advanced
Maturity date		Currency		Fixed rate investment amount million	Effective rate %	Floating rate investment amount million	Effective rate %
All less than one year		USD		9	3.8	64	3.6
		ZAR		52	6.0	12	5.9
		AUD		22	5.4	30	6.0
		EUR		1	3.8	5	2.5
		HKD				1	1.8
		BRL				10	19.0
		ARS				2	5.1
		NAD				45	7.5

Borrowing maturity profile (note 31)
				Between one and two years		Between two and five years
		Within one year		Between one and two years		Between two and five years
Currency		Borrowings amount million	Effective rate %	Borrowings amount million	Effective rate %	Borrowings amount million	Effective rate %
$		47	5.0	10	5.3	1,383	3.3
ZAR		894⁽¹⁾	7.4			1,989	10.5

Interest-rate risk

	Fixed for less than one year		Fixed for between one and three years		Fixed for greater than three years
Currency	Borrowings amount million	Effective rate %	Borrowings amount million	Effective rate %	Borrowings amount million	Effective rate %	Total Borrowings amount million
$	501	5.3	22	5.3	917	2.4	1,440
ZAR	894⁽¹⁾	7.4			1,989	10.5	2,883

⁽¹⁾

Includes R73m interest accrual on the corporate bond as at 31 December 2005.

Interest on financial instruments classified as floating rate is repriced at intervals of less than one year. Interest on financial instruments classified as fixed rate is fixed until the maturity of the instrument. The other financial instruments of the group that are not included in the tables above are non-interest bearing and are therefore not subject to interest rate risk.

Interest rate swaps
The group previously entered into a convertible interest rate swap. The swap was a derivative instrument as defined by IAS39 and had been designated as a fair value hedge. The swap hedged the group's exposure to fair value changes on the $1 billion convertible bonds attributable to changes in interest rates and had the effect of swapping the 2.375% fixed coupon into a LIBOR-based floating rate. As the swap was considered an integral part of the bond, the interest expense on the convertible bonds, for the portion of the year that the swap was in place, is disclosed after adjusting such expense for the interest income and expense under the swap.

The swap was unwound during September 2005. Since then the carrying value of the bond was no longer adjusted for changes in fair value attributable to the hedged interest rate risk. At that point the amortisation profile was recalculated to a new effective interest rate that will result in the bond being amortised up to redemption value by maturity.

The group had vanilla interest rate swap agreements to convert R750m of its R2,000m fixed-rate corporate bond to variable-rate debt. These interest rate swaps ran over the term of the bond and received interest at a fixed rate of 10.5% and paid floating JIBAR (reset quarterly) plus a spread of 0.915%.

These swaps were unwound during April 2005. All changes in the fair value of the swaps up to that point are recorded in the income statement as the swaps were not designated as a hedge.

Credit risk
Credit risk arises from the risk that a counterpart may default or not meet its obligations timeously. The group minimises credit risk by ensuring that credit risk is spread over a number of counterparts. These counterparts are financial and banking institutions of good credit quality. Where possible, management tries to ensure that netting agreements are in place. The combined maximum credit risk exposure at the balance sheet date is $713m, R4,523m on a contract by contract basis. Credit risk exposure netted by counter parties amounts to $18m, R115m. No set-off is applied to the balance sheet due to the different maturity profiles of assets and liabilities.

Trade debtors mainly comprise banking institutions purchasing gold bullion. Normal market settlement terms are two working days. No impairment was recognised as the principal debtors continue to be in a sound financial position.

The group does not generally obtain collateral or other security to support financial instruments subject to credit risk, but monitors the credit standing of counterparts.

Fair value of financial instruments
The estimated fair values of financial instruments are determined at discrete points in time based on relevant market information. These estimates involve uncertainties and cannot be determined with precision. The estimated fair values of the group's financial instruments as at 31 December 2005 are as follows:

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40 Financial risk management activities (continued)
Type of instrument
		2005		2004
Figures in million		Carrying amount	Fair value	Carrying Amount	Fair Value
US Dollars
Financial assets
Other investments (note 20)		102	102	107	107
Other non-current assets (note 23)		13	13	17	17
Trade and other receivables (note 24)		109	109	143	143
Cash restricted for use (note 25)		8	8	26	26
Cash and cash equivalents (note 26)		209	209	289	289
Financial liabilities
Borrowings (note 31)		1,894	1,915	1,605	1,623
Trade, other payables and deferred income (note 35)		370	370	405	405
Derivatives comprise the following:		(749)	(2,029)	(393)	(1,217)
	Forward sale commodity contracts	(81)	(909)	(172)	(666)
	Option contracts	(612)	(1,058)	(177)	(507)
	Foreign exchange contracts	6	6	16	16
	Foreign exchange option contracts	(5)	(5)	(2)	(2)
	Interest rate swaps	31	25	(2)	(2)
	Option component of convertible bond	(88)	(88)	(56)	(56)

SA Rands
Financial assets
Other investments (note 20)		645	645	608	608
Other non-current assets (note 23)		77	75	92	91
Trade and other receivables (note 24)		688	688	805	805
Cash restricted for use (note 25)		52	52	148	148
Cash and cash equivalents (note 26)		1,328	1,328	1,630	1,630
Financial liabilities
Borrowings (note 31)		12,015	12,147	9,062	9,523
Trade, other payables and deferred income (note 35)		2,354	2,354	2,283	2,283
Derivatives comprise the following:		(4,751)	(12,873)	(2,218)	(6,900)
	Forward sale commodity contracts	(517)	(5,768)	(972)	(3,787)
	Option contracts	(3,883)	(6,713)	(998)	(2,865)
	Foreign exchange contracts	41	41	90	90
	Foreign exchange option contracts	(33)	(33)	(10)	(10)
	Interest rate swaps	197	156	(11)	(11)
	Option component of convertible bond	(556)	(556)	(317)	(317)
The fair value amounts include off balance sheet normal sale exempted contracts, which are not carried on the balance sheet and excluded from the carrying amount. All other derivatives are carried at fair value.
The amounts in the tables above do not necessarily agree with the totals in the notes referenced as only financial assets and liabilities are shown.
		2005
Figures in million		Normal sale exempted	Cash flow hedge accounted	Non- hedge accounted	Total
US Dollars
Derivatives comprise the following:		(1,280)	(338)	(411)	(2,029)
	Forward sale commodity contracts	(828)	(342)	261	(909)
	Options contracts	(446)	(4)	(608)	(1,058)
	Foreign exchange contracts	-	8	(2)	6
	Foreign exchange option contracts	-	-	(5)	(5)
	Interest rate swaps	(6)	-	31	25
	Option component of convertible bond	-	-	(88)	(88)

		2004
Figures in million		Normal sale exempted	Cash flow hedge accounted	Non- hedge accounted	Total
US Dollars
Derivatives comprise the following:		(824)	(238)	(155)	(1,217)
	Forward sale commodity contracts	(494)	(252)	80	(666)
	Options contracts	(330)	(1)	(176)	(507)
	Foreign exchange contracts	-	15	1	16
	Foreign exchange option contracts	-	-	(2)	(2)
	Interest rate swaps	-	-	(2)	(2)
	Option component of convertible bond	-	-	(56)	(56)

		2005
Figures in million		Normal sale exempted	Cash flow hedge accounted	Non- hedge accounted	Total
SA Rands
Derivatives comprise the following:		(8,122)	(2,142)	(2,609)	(12,873)
	Forward sale commodity contracts	(5,251)	(2,170)	1,653	(5,768)
	Options contracts	(2,830)	(22)	(3,861)	(6,713)
	Foreign exchange contracts	-	50	(9)	41
	Foreign exchange option contracts	-	-	(33)	(33)
	Interest rate swaps	(41)	-	197	156
	Option component of convertible bond	-	-	(556)	(556)

		2004
Figures in million		Normal sale exempted	Cash flow hedge accounted	Non- hedge accounted	Total
SA Rands
Derivatives comprise the following:		(4,682)	(1,342)	(876)	(6,900)
	Forward sale commodity contracts	(2,815)	(1,420)	448	(3,787)
	Options contracts	(1,867)	(7)	(991)	(2,865)
	Foreign exchange contracts	-	85	5	90
	Foreign exchange option contracts	-	-	(10)	(10)
	Interest rate swaps	-	-	(11)	(11)
	Option component of convertible bond	-	-	(317)	(317)

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Derivative maturity profile
		2005
Figures in million		Total	Assets	Liabilities
US Dollars
Total		(749)	713	(1,462)
Less:	Amounts to mature within 12 months of balance sheet date	399	(675)	1,074
	Amounts to mature between one and two years	117	(30)	147
	Amounts to mature between two and five years	233	(8)	241
Amounts to mature thereafter		-	-	-

SA Rands
Total		(4,751)	4,523	(9,274)
Less:	Amounts to mature within 12 months of balance sheet date	2,534	(4,280)	6,814
	Amounts to mature between one and two years	745	(188)	933
	Amounts to mature between two and five years	1,472	(55)	1,527
Amounts to mature thereafter		-	-	-

		2004
Figures in million		Total	Assets	Liabilities
US Dollars
Total		(393)	677	(1,070)
Less:	Amounts to mature within 12 months of balance sheet date	43	(490)	533
	Amounts to mature between one and two years	246	(128)	374
	Amounts to mature between two and five years	97	(59)	156
Amounts to mature thereafter		(7)	-	(7)

SA Rands
Total		(2,218)	3,822	(6,040)
Less:	Amounts to mature within 12 months of balance sheet date	240	(2,767)	3,007
	Amounts to mature between one and two years	1,389	(725)	2,114
	Amounts to mature between two and five years	552	(330)	882
Amounts to mature thereafter		(37)	-	(37)
The following methods and assumptions were used to estimate the fair value of each class of financial instrument: Trade and other receivables, cash restricted for use, cash and cash equivalents and trade and other payables The carrying amounts approximate fair value because of the short-term duration of these instruments. Investments and other non-current assets Listed investments are carried at fair value while unlisted investments are carried at amortised cost. The fair value of unlisted investments and other non-current assets has been calculated using market interest rates. Borrowings The fair values of listed fixed rate debt and the convertible bonds are shown at their closing market value. The remainder of debt re-prices on a short-term floating rate basis, and accordingly the carrying amount is considered to approximate fair value. Derivatives The fair values of derivatives are estimated based on the ruling market prices, volatilities and interest rates as at 31 December 2005. The group uses the Black-Scholes option pricing formula to value option contracts. One of the inputs into the model is the level of volatility. These volatility levels are themselves not exchange traded and are not observable generally in the market. The group uses volatility input supplied by leading market participants (international banks). The group believes that no other possible alternative would result in significantly different fair value estimations.

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41 Changes to comparative information
	Change in accounting policies			Reclassifications
US Dollar million	Balance per annual financial statements 2004	Fair value adjustment on option component of bond ⁽¹⁾	Equity portion of the convertible bond reallocated to deriva- tives ⁽¹⁾	Change in accounting treatment for actuarial gains and losses	Other reclassifi- cations	Ergo treated as a dis- continued opera- tion ⁽²⁾	Rounding	Revised 2004 com- parative
Income statement
Revenue ⁽³⁾	2,521	-	-	-	5	(92)	-	2,434
Gold income	2,396	-	-	-	-	(87)	-	2,309
Cost of sales	(2,022)	-	-	-	-	98	-	(1,924)
Non-hedge derivative loss ⁽⁴⁾	-	-	-	-	(142)	-	-	(142)
Gross profit ⁽⁴⁾	374	-	-	-	(142)	11	-	243
Corporate administration and other expenses	(51)	-	-	-	-	-	-	(51)
Market development costs	(15)	-	-	-	-	-	-	(15)
Exploration costs	(44)	-	-	-	-	-	-	(44)
Amortisation of intangible assets	(31)	-	-	-	-	-	-	(31)
Impairment of tangible assets ⁽⁵⁾	(1)	-	-	-	1	-	-	-
Non-hedge derivative loss ⁽⁴⁾	(142)	-	-	-	142	-	-	-
Other net operating expenses ⁽⁶⁾	(12)	-	-	-	1	-	(1)	(12)
Other operating income ⁽⁶⁾	1	-	-	-	(1)	-	-	-
Operating special items ^{(5) (8)}	-	-	-	-	12	-	-	12
Operating profit	79	-	-	-	13	11	(1)	102
Interest received ⁽³⁾	44	-	-	-	5	-	-	49
Other net income ^{(3) (7)}	9	-	-	-	(9)	-	-	-
Exchange gain ⁽⁷⁾	-	-	-	-	4	-	-	4
Profit on disposal of assets and subsidiaries ⁽⁸⁾	13	-	-	-	(13)	-	-	-
Fair value adjustment on option component of convertible bond	-	27	-	-	-	-	-	27
Finance costs and unwinding of decommissioning obligations	(87)	-	-	-	-	-	-	(87)
Fair value gains on interest rate swaps	2	-	-	-	-	-	-	2
Share of associates profit ⁽⁹⁾	-	-	-	-	-	-	-	-
Profit before taxation	60	27	-	-	-	11	(1)	97
Taxation	40	-	-	-	-	-	1	41
Profit after taxation from continuing operations	100	27	-	-	-	11	-	138
Discontinued operations
Loss for the year for discontinued operations	-	-	-	-	-	(11)	-	(11)
Profit for the year	100	27	-	-	-	-	-	127
Allocated as follows
Equity shareholders of the parent	81	27	-	-	-	-	-	108
Minority interests	19	-	-	-	-	-	-	19
	100	27	-	-	-	-	-	127

⁽¹⁾	The convertible bonds were previously accounted for as compound financial instruments, part equity and part liability. The equity component was not remeasured for changes in fair value. Convertible bonds are now accounted for entirely as a liability, with the option component disclosed as a derivative liability, carried at fair value. Changes in such fair value are recorded in the income statement.
⁽²⁾	Ergo reclassified as a discontinued operation from 1 February 2005 as it has reached the end of its useful life.
⁽³⁾	Growth in AngloGold Environmental Rehabilitation Trust Fund reclassified to be included in interest received. Interest received is included in revenue.
⁽⁴⁾	Non-hedge derivative loss reclassified to be included in gross profit.
⁽⁵⁾	Impairment of tangible assets reclassified to operating special items.
⁽⁶⁾	Other operating income reclassified to other net operating expenses.
⁽⁷⁾	Exchange gain reclassified to be reported separately on the face of the income statement.
⁽⁸⁾	Profit on disposal of assets and subsidiaries reclassified to operating special items.
⁽⁹⁾	Share of associates profit reclassified from other net income to comply with IAS 28.

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		Change in accounting policies			Reclassifications
SA Rands million	Balance per annual financial statements 2004	Fair value adjustment on option component of bond ⁽¹⁾	Equity portion of the convertible bond reallocated to deriva- tives ⁽¹⁾	Change in accounting treatment for actuarial gains and losses	Other reclassifi- cations	Ergo treated as a dis- continued opera- tion ⁽²⁾	Rounding	Revised 2004 com- parative
Income statement
Revenue ⁽³⁾	16,150	-	-	-	33	(591)	-	15,592
Gold income	15,348	-	-	-	-	(560)	-	14,788
Cost of sales	(12,933)	-	-	-	-	628	-	(12,305)
Non-hedge derivative loss ⁽⁴⁾	-	-	-	-	(786)	-	-	(786)
Gross profit ⁽⁴⁾	2,415	-	-	-	(786)	68	-	1 697
Corporate administration and other expenses	(331)	-	-	-	-	-	-	(331)
Market development costs	(100)	-	-	-	-	-	-	(100)
Exploration costs	(283)	-	-	-	-	-	-	(283)
Amortisation of intangible assets	(200)	-	-	-	-	-	-	(200)
Impairment of tangible assets ⁽⁵⁾	(8)	-	-	-	8	-	-	-
Non-hedge derivative loss ⁽⁴⁾	(786)	-	-	-	786	-	-	-
Other net operating expenses ⁽⁶⁾	(78)	-	-	-	9	-	-	(69)
Other operating income ⁽⁶⁾	9	-	-	-	(9)	-	-	-
Operating special items ^{(5) (8)}	-	-	-	-	80	-	-	80
Operating profit	638	-	-	-	88	68	-	794
Interest received ⁽³⁾	285	-	-	-	33	-	-	318
Other net income ^{(3) (7)}	59	-	-	-	(59)	-	-	-
Exchange gain ⁽⁷⁾	-	-	-	-	25	-	-	25
Profit on disposal of assets and subsidiaries ⁽⁸⁾	88	-	-	-	(88)	-	-	-
Fair value adjustment on option component of convertible bond	-	160	-	-	-	-	-	160
Finance costs and unwinding of decommissioning obligations	(563)	-	-	-	-	-	-	(563)
Fair value gains on interest rate swaps	10	-	-	-	-	-	-	10
Share of associates profit ⁽⁹⁾	-	-	-	-	1	-	-	1
Profit before taxation	517	160	-	-	-	68	-	745
Taxation	174	-	-	-	-	5	-	179
Profit after taxation from continuing operations	691	160	-	-	-	73	-	924
Discontinued operations
Loss for the year from discontinued operations	-	-	-	-	-	(73)	-	(73)
Profit for the year	691	160	-	-	-	-	-	851
Allocated as follows
Equity shareholders of parent	567	160	-	-	-	-	1	728
Minority interests	124	-	-	-	-	-	(1)	123
	691	160	-	-	-	-	-	851

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	Change in accounting policies				Reclassifications		Restate- ment
US Dollar million	Balance per annual financial statements 2004	Fair value adjustment on option component of bond ⁽¹⁾	Equity portion of the convertible bond reallocated to deriva- tives ⁽¹⁾	Change in accounting treatment for actuarial gains and losses ⁽²⁾	Other reclassifi- cations	Ergo treated as a dis- continued opera- tion	Tax rate conces- sion ⁽³⁾	Rounding	Revised 2004 com- parative
Balance sheet
Assets
Non-current assets
Tangible assets ⁽⁴⁾	5,880	-	-	-	8	-	-	-	5,888
Intangible assets	416	-	-	-	-	-	20	(1)	435
Investments in associates	8	-	-	-	-	-	-	-	8
Other investments ^{(4) (5)}	40	-	-	-	67	-	-	-	107
Inventories ⁽⁶⁾	22	-	-	-	13	-	-	-	35
Derivatives	187	-	-	-	-	-	-	-	187
Trade and other receivables ⁽⁷⁾	-	-	-	-	10	-	-	-	10
Other non-current assets ^{(5) (8)}	106	-	-	(20)	(68)	-	-	-	18
	6,659	-	-	(20)	30	-	20	(1)	6,688
Current assets
Inventories ⁽⁶⁾	419	-	-	-	(13)	-	-	-	406
Trade and other receivables ⁽⁷⁾	309	-	-	-	(8)	-	-	1	302
Derivatives	490	-	-	-	-	-	-	-	490
Current portion of other non-current assets	1	-	-	-	-	-	-	-	1
Cash restricted for use ^{(5) (9)}	-	-	-	-	26	-	-	-	26
Cash and other cash equivalents⁽⁹⁾	312	-	-	-	(23)	-	-	-	289
	1,531	-	-	-	(18)	-	-	1	1,514

Total assets	8,190	-	-	(20)	12	-	20	-	8,202
EQUITY AND LIABILITIES
Share capital and premium	3,364	-	-	-	-	-	-	-	3,364
Retained earnings and other reserves	(135)	25	(82)	(22)	-	-	-	1	(213)
Shareholders' equity	3,229	25	(82)	(22)	-	-	-	1	3,151
Minority interests	58	-	-	-	-	-	-	-	58
Total equity	3,287	25	(82)	(22)	-	-	-	1	3,209
Non-current liabilities
Borrowings	1,286	-	-	-	-	-	-	-	1,286
Environmental rehabilitation and other provisions ⁽¹⁰⁾	231	-	-	-	(1)	-	-	-	230
Provision for pension and post-retirement benefits ^{(8) (10)}	171	-	-	13	13	-	-	-	197
Trade, other payables and deferred income ⁽¹¹⁾	-	-	-	-	4	-	-	-	4
Derivatives	481	(25)	82	-	-	-	-	(1)	537
Deferred taxation	1,347	-	-	(11)	-	-	20	-	1,356
	3,516	(25)	-	2	16	-	20	(1)	3,610
Current liabilities
Trade, other payables and deferred income ⁽¹¹⁾	470	-	-	-	(4)	-	-	-	466
Current portion of borrowings	319	-	-	-	-	-	-	-	319
Derivatives	533	-	-	-	-	-	-	-	533
Taxation	65	-	-	-	-	-	-	-	65
	1,387	-	-	-	(4)	-	-	-	1,383

Total liabilities	4,903	(25)	82	2	12	-	20	(1)	4,993

Total equity and liabilities	8,190	-	-	(20)	12	-	20	-	8,202

⁽¹⁾	The convertible bonds were previously accounted for as compound financial instruments, part equity and part liability. The equity component was not remeasured for changes in fair value. Convertible bonds are now accounted for entirely as a liability, with the option component disclosed as a derivative liability, carried at fair value. Changes in such fair value are recorded in the income statement.
⁽²⁾	The AngloGold Ashanti group has adopted IAS 19 (revised) whereby actuarial gains and losses are recognised through equity reserves.
⁽³⁾	Restatement of deferred tax asset being tax rate concession in Ghana, to intangible assets in terms of IAS 38.
⁽⁴⁾	Investment properties included in other investments, reclassified to tangible assets.
⁽⁵⁾	Fixed-term deposits held by the AngloGold Environmental Rehabilitation Trust Fund and Environmental Protection Bond reclassified to other investments and restricted cash from other non-current assets.
⁽⁶⁾	Reclassification of inventories from current to non-current assets.
⁽⁷⁾	Reclassification of trade and other receivables from current to non-current assets.
⁽⁸⁾	Reclassification of AngloGold Ashanti Pension Fund credit balance from other non-current assets to provisions for pension and post-retirement benefits.
⁽⁹⁾	Reclassification from cash and cash equivalents to cash restricted for use.
⁽¹⁰⁾	Reclassification of North America Pension Plan from other provisions to retirement provisions.
⁽¹¹⁾	Reclassification of deferred income from current to non-current trade and other payables.

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	Change in accounting policies				Reclassifications		Restate- ment
SA Rand million	Balance per annual financial statements 2004	Fair value adjustment on option component of bond ⁽¹⁾	Equity portion of the convertible bond reallocated to deriva- tives ⁽¹⁾	Change in accounting treatment for actuarial gains and losses ⁽²⁾	Other reclassifi- cations	Ergo treated as a dis- continued opera- tion	Tax rate conces- sion ⁽³⁾	Rounding	Revised 2004 com- parative
Balance sheet
ASSETS
Non-current assets
Tangible assets ⁽⁴⁾	33,195	-	-	-	44	-	-	-	33,239
Intangible assets	2,347	-	-	-	-	-	111	-	2,458
Investments in associates	43	-	-	-	-	-	-	-	43
Other investments ^{(4) (5)}	223	-	-	-	385	-	-	-	608
Inventories ⁽⁶⁾	124	-	-	-	78	-	-	-	202
Derivatives	1,055	-	-	-	-	-	-	-	1,055
Trade and other receivables ⁽⁷⁾	-	-	-	-	55	-	-	-	55
Other non-current assets ^{(5) (8)}	601	-	-	(113)	(387)	-	-	-	101
	37,588	-	-	(113)	175	-	111	-	37,761
Current assets
Inventories ⁽⁶⁾	2,363	-	-	-	(78)	-	-	-	2,285
Trade and other receivables ⁽⁷⁾	1,747	-	-	-	(48)	-	-	1	1,700
Derivatives	2,767	-	-	-	-	-	-	-	2,767
Current portion of other non-current assets	5	-	-	-	-	-	-	-	5
Cash restricted for use ^{(5) (9)}	-	-	-	-	148	-	-	-	148
Cash and cash equivalents ⁽⁹⁾	1,758	-	-	-	(128)	-	-	-	1,630
	8,640	-	-	-	(106)	-	-	1	8,535

Total assets	46,228	-	-	(113)	69	-	111	1	46,296
EQUITY AND LIABILITIES
Share capital and premium	18,987	-	-	-	-	-	-	-	18,987
Retained earnings and other reserves	(759)	147	(463)	(122)	-	-	-	-	(1,197)
Shareholders' equity	18,228	147	(463)	(122)	-	-	-	-	17,790
Minority interests	327	-	-	-	-	-	-	-	327
Total equity	18,555	147	(463)	(122)	-	-	-	-	18,117
Non-current liabilities
Borrowings	7,262	-	-	-	-	-	-	-	7,262
Environmental rehabilitation and other provisions ⁽¹⁰⁾	1,297	-	-	3	(6)	-	-	-	1,294
Provision for pension and post-retirement benefits ^{(8) (10)}	968	-	-	69	75	-	-	-	1,112
Trade, other payables and deferred income ⁽¹¹⁾	-	-	-	-	21	-	-	-	21
Derivatives	2,716	(147)	463	-	-	-	-	1	3,033
Deferred taxation	7,605	-	-	(63)	-	-	111	-	7,653
	19,848	(147)	463	9	90	-	111	1	20,375
Current liabilities
Trade, other payables and deferred income ⁽¹¹⁾	2,650	-	-	-	(21)	-	-	-	2,629
Current portion of borrowings	1,800	-	-	-	-	-	-	-	1,800
Derivatives	3,007	-	-	-	-	-	-	-	3,007
Taxation	368	-	-	-	-	-	-	-	368
	7,825	-	-	-	(21)	-	-	-	7,804

Total liabilities	27,673	(147)	463	9	69	-	111	1	28,179

Total equity and liabilities	46,228	-	-	(113)	69	-	111	1	46,296x

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	Change in accounting policies				Reclassifications
US Dollar million	Balance per annual financial statements 2004	Fair value adjustment on option component of bond ⁽¹⁾	Equity portion of the convertible bond reallocated to deriva- tives ⁽¹⁾	Change in accounting treatment for actuarial gains and losses	Other reclassifi- cations	Ergo treated as a dis- continued opera- tion ⁽²⁾	Rounding	Revised 2004 com- parative
Cash flow
Cash flows from operating activities
Receipts from customers ⁽³⁾	2,480	-	-	-	(56)	(92)	-	2,332
Payments to suppliers and employees	(1,895)	-	-	-	57	94	-	(1,744)
Cash generated from operations	585	-	-	-	1	2	-	588
Cash utilised from discontinued operations	-	-	-	-	-	(2)	-	(2)
Interest received ⁽⁵⁾	37	-	-	-	(37)	-	-	-
Environmental, rehabilitation and other expenditure ⁽⁶⁾	(24)	-	-	-	6	-	-	(18)
Finance costs ⁽⁵⁾	(72)	-	-	-	72	-	-	-
Taxation paid	(34)	-	-	-	-	-	-	(34)
Net cash inflow from operating activities	492	-	-	-	42	-	-	534
Cash flows from investing activities
Capital expenditure
- project expenditure	(256)	-	-	-	-	-	-	(256)
- stay-in-business expenditure	(329)	-	-	-	-	-	-	(329)
Proceeds from disposal of tangible assets	10	-	-	-	-	-	-	10
Other investments acquired ⁽⁶⁾	(20)	-	-	-	(10)	-	-	(30)
(Acquisition) disposal of subsidiaries net of cash ⁽⁷⁾	(171)	-	-	-	171	-	-	-
(Acquisition) disposal of subsidiaries ⁽⁷⁾	-	-	-	-	(227)	-	-	(227)
Cash in subsidiary acquired ⁽⁷⁾	-	-	-	-	56	-	-	56
Cash restricted for use ^{(4) (6)}	-	-	-	-	(6)	-	-	(6)
Interest received ⁽⁵⁾	-	-	-	-	37	-	-	37
Loans advanced	(2)	-	-	-	-	-	-	(2)
Repayment of loans advanced	85	-	-	-	-	-	-	85
Utilised in hedge restructure	(123)	-	-	-	-	-	-	(123)
Net cash outflow from investing activities	(806)	-	-	-	21	-	-	(785)
Cash flows from financing activities
Proceeds from issue of share capital	3	-	-	-	-	-	-	3
Share issue expenses	-	-	-	-	-	-	-	-
Proceeds from borrowings	1,077	-	-	-	-	-	-	1,077
Repayment of borrowings	(818)	-	-	-	-	-	-	(818)
Finance costs ⁽⁵⁾	-	-	-	-	(72)	-	-	(72)
Dividends paid	(198)	-	-	-	-	-	-	(198)
Proceeds from hedge restructure	40	-	-	-	-	-	-	40
Net cash inflow (outflow) from financing activities	104	-	-	-	(72)	-	-	32
Net decrease in cash and cash equivalents	(210)	-	-	-	(9)	-	-	(219)
Translation ⁽⁸⁾	17	-	-	-	(4)	-	-	13
Cash and cash equivalents at beginning of year	505	-	-	-	(10)	-	-	495
Net cash and cash equivalents at end of year	312	-	-	-	(23)	-	-	289

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	Change in accounting policies				Reclassifications
US Dollar million	Balance per annual financial statements 2004	Fair value adjustment on option component of bond ⁽¹⁾	Equity portion of the convertible bond reallocated to deriva- tives ⁽¹⁾	Change in accounting treatment for actuarial gains and losses	Other reclassifi- cations	Ergo treated as a dis- continued opera- tion ⁽²⁾	Rounding	Revised 2004 com- parative
Cash flow (continued)
Cash generated from operations
Profit before taxation	60	27	-	-	-	11	(1)	97
Adjusted for:
Non-cash movements ⁽⁹⁾	3	-	-	-	5	(5)	1	4
Movement on non-hedge derivatives	185	-	-	-	-	(4)	-	181
Amortisation of tangible assets	380	-	-	-	-	-	-	380
Deferred stripping	(21)	-	-	-	-	-	-	(21)
Interest received⁽⁹⁾	(44)	-	-	-	(5)	-	-	(49)
Operating special items^{(10) (11)}	-	-	-	-	(12)	-	-	(12)
Finance costs and unwinding of decommissioning obligations	87	-	-	-	-	-	-	87
Amortisation of intangible assets	32	-	-	-	-	-	-	32
Impairment of tangible assets ⁽¹⁰⁾	1	-	-	-	(1)	-	-	-
Profit on disposal of assets and subsidiaries ⁽¹¹⁾	(13)	-	-	-	13	-	-	-
Fair value adjustment on option component of convertible bond	-	(27)	-	-	-	-	-	(27)
Movements in working capital	(85)	-	-	-	1	-	-	(84)
	585	-	-	-	1	2	-	588
Movements in working capital:
Increase in inventories	(56)	-	-	-	-	-	-	(56)
(Increase) decrease in trade and other receivables ⁽⁴⁾	(41)	-	-	-	1	-	-	(40)
Increase in trade and other payables	12	-	-	-	-	-	-	12
	(85)	-	-	-	1	-	-	(84)

⁽¹⁾	The convertible bonds were previously accounted for as compound financial instruments, part equity and part liability. The equity component was not remeasured for changes in fair value. Convertible bonds are now accounted for entirely as a liability, with the option component disclosed as a derivative liability, carried at fair value. Changes in such fair value are recorded in the income statement.
⁽²⁾	Ergo reclassified as a discontinued operation from 1 February 2005 as it has reached the end of its useful life.
⁽³⁾	Effect of reallocations within trade and other receivables on receipts from customers.
⁽⁴⁾	Reallocation of Disaster Compensation Fund to restricted cash.
⁽⁵⁾	Interest received and finance costs have been reclassified from operating activities to investing and financing activities respectively.
⁽⁶⁾	Contributions to the Environmental Rehabilitation Trust Fund reallocated to other investments acquired $6m, $4m reallocated to cash restricted for use.
⁽⁷⁾	Cash in subsidiaries acquired reclassified to be shown separately on the cash flow.
⁽⁸⁾	Translation on amounts reallocated to cash restricted for use.
⁽⁹⁾	Growth in AngloGold Environmental Rehabilitation Trust Fund reclassified as interest received.
⁽¹⁰⁾	Impairment of tangible assets reclassified to operating special items.
⁽¹¹⁾	Profit on disposal of assets and subsidiaries reclassified to operating special items.

	Change in accounting policies				Reclassifications
US Dollar million	Balance per annual financial statements 2004	Fair value adjustment on option component of bond ⁽¹⁾	Equity portion of the convertible bond reallocated to deriva- tives ⁽¹⁾	Change in accounting treatment for actuarial gains and losses	Other reclassifi- cations	Ergo treated as a dis- continued opera- tion ⁽²⁾	Rounding	Revised 2004 com- parative
Cash flow
Cash flows from operating activities
Receipts from customers ⁽³⁾	15,928	-	-	-	(314)	(591)	-	15,023
Payments to suppliers and employees	(12,423)	-	-	-	319	603	-	(11,501)
Cash generated from operations	3,505	-	-	-	5	12	-	3,522
Cash utilised from discontinued operations	-	-	-	-	-	(12)	-	(12)
Interest received ⁽⁵⁾	236	-	-	-	(236)	-	-	-
Environmental, rehabilitation and other expenditure ⁽⁶⁾	(148)	-	-	-	35	-	-	(113)
Finance costs ⁽⁵⁾	(465)	-	-	-	465	-	-	-
Taxation paid	(218)	-	-	-	-	-	-	(218)
Net cash inflow from operating activities	2,910	-	-	-	269	-	-	3,179
Cash flows from investing activities
Capital expenditure
- project expenditure	(1,645)	-	-	-	-	-	-	(1,645)
- stay-in-business expenditure	(2,119)	-	-	-	-	-	-	(2,119)
Proceeds from disposal of tangible assets	69	-	-	-	-	-	-	69
Other investments acquired ⁽⁶⁾	(127)	-	-	-	(69)	-	-	(196)
(Acquisition) disposal of subsidiaries net of cash⁽⁷⁾	(1,139)	-	-	-	1,139	-	-	-
(Acquisition) disposal of subsidiaries⁽⁷⁾	-	-	-	-	(1,523)	-	-	(1,523)
Cash in subsidiary acquired ⁽⁷⁾	-	-	-	-	384	-	-	384
Cash restricted for use ^{(4) (6)}	-	-	-	-	(45)	-	-	(45)
Interest received ⁽⁵⁾	-	-	-	-	236	-	-	236
Loans advanced	(13)	-	-	-	-	-	-	(13)
Repayment of loans advanced	539	-	-	-	-	-	-	539
Utilised in hedge restructure	(703)						-	(703)
Net cash outflow from investing activities	(5,138)	-	-	-	(122)	-	-	(5,016)
Cash flows from financing activities
Proceeds from issue of share capital	22	-	-	-	-	-	-	22
Share issue expenses	(1)	-	-	-	-	-	-	(1)
Proceeds from borrowings	7,236	-	-	-	-	-	-	7,236
Repayment of borrowings	(5,348)	-	-	-	-	-	-	(5,348)
Finance costs ⁽⁵⁾	-	-	-	-	(465)	-	-	(465)
Dividends paid	(1,322)	-	-	-	-	-	-	(1,322)
Proceeds from hedge restructure	228	-	-	-	-	-	-	228
Net cash inflow (outflow) from financing activities	815	-	-	-	(465)	-	-	350
Net decrease in cash and cash equivalents	(1,413)	-	-	-	(74)	-	-	(1,487)
Translation ⁽⁸⁾	(196)	-	-	-	10	-	-	(186)
Cash and cash equivalents at beginning of year	3,367	-	-	-	(64)	-	-	3,303
Net cash and cash equivalents at end of year	1,758	-	-	-	(128)	-	-	1,630

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	Change in accounting policies				Reclassifications
US Dollar million	Balance per annual financial statements 2004	Fair value adjustment on option component of bond ⁽¹⁾	Equity portion of the convertible bond reallocated to deriva- tives ⁽¹⁾	Change in accounting treatment for actuarial gains and losses	Other reclassifi- cations	Ergo treated as a dis- continued opera- tion ⁽²⁾	Rounding	Revised 2004 com- parative
Cash generated from operations
Profit before taxation	517	160	-	-	-	68	-	745
Adjusted for:
Non-cash movements ⁽⁹⁾	3	-	-	-	33	(30)	-	6
Movement on non-hedge derivatives	1,081	-	-	-	-	(26)	-	1,055
Amortisation of tangible assets	2,423	-	-	-	-	-	-	2,423
Deferred stripping	(144)	-	-	-	-	-	-	(144)
Interest receivable ⁽⁹⁾	(285)	-	-	-	(33)	-	-	(318)
Operating special items ^{(10) (11)}	-	-	-	-	(80)	-	-	(80)
Finance costs and unwinding of decommissioning obligation	563	-	-	-	-	-	-	563
Amortisation of intangible assets	208	-	-	-	-	-	-	208
Impairment of tangible assets ⁽¹⁰⁾	8	-	-	-	(8)	-	-	-
Profit on disposal of assets and subsidiaries ⁽¹¹⁾	(88)	-	-	-	88	-	-	-
Fair value adjustment on option component of convertible bond	-	(160)	-	-	-	-	-	(160)
Movements in working capital	(781)	-	-	-	5	-	-	(776)
	3,505	-	-	-	5	12	-	3,522
Movements in working capital:
Increase in inventories	(1)	-	-	-	-	-	-	(1)
(Increase) decrease in trade and other receivables ⁽⁴⁾	(4)	-	-	-	5	-	-	1
Decrease in trade and other payables	(776)	-	-	-	-	-	-	(776)
	(781)	-	-	-	5	-	-	(776)

⁽¹⁾	The convertible bonds were previously accounted for as compound financial instruments, part equity and part liability. The equity component was not remeasured for changes in fair value. Convertible bonds are now accounted for entirely as a liability, with the option component disclosed as a derivative liability, carried at fair value. Changes in such fair value are recorded in the income statement.
⁽²⁾	Ergo reclassified as a discontinued operation from 1 February 2005 as it has reached the end of its useful life.
⁽³⁾	Effect of reallocations within trade and other receivables on receipts from customers.
⁽⁴⁾	Reallocation of Disaster Compensation Fund to restricted cash.
⁽⁵⁾	Interest received and finance costs have been reclassified from operating activities to investing and financing activities respectively.
⁽⁶⁾	Contributions to the Environmental Rehabilitation Trust Fund reallocated to other investments acquired R35m; R34m reallocated to cash restricted for use.
⁽⁷⁾	Cash in subsidiaries acquired reclassified to be shown separately on the cash flow.
⁽⁸⁾	Translation on amounts reallocated to cash restricted for use.
⁽⁹⁾	Growth in AngloGold Environmental Rehabilitation Trust Fund reclassified as interest received.
⁽¹⁰⁾	Impairment of tangible assets reclassified to operating special items.
⁽¹¹⁾	Profit on disposal of assets and subsidiaries reclassified to operating special items.

42 Exchange rates
	2005	2004

Rand/US dollar average for the year	6.37	6.44
Rand/US dollar closing	6.35	5.65
Rand/Australian dollar average for the year	4.85	4.82
Rand/Australian dollar closing	4.65	4.42
Australian dollar/US dollar average for the year	1.31	1.36
Australian dollar/US dollar closing	1.36	1.28

Group notes to financial statements | Next > Company financial statements...

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Annual Report 2005

Financials

Group financial statements

Notes to the group financial statements

29 Retained earnings and other reserves

30

Minority interests

31

Borrowings

32

Environmental rehabilitation and other provisions

33

Provision for pension and post-retirement benefits

33

Provision for pension and post-retirement benefits (continued)

34

Deferred taxation

35

Trade, other payables and deferred income

36

Cash generated from operations

37

Acquisitions and disposals of subsidiaries

38 Related parties

39

Contractual commitments and contingencies

40 Financial risk management activities

40 Financial risk management activities (continued)

41 Changes to comparative information

42 Exchange rates