Group notes to the financial statements

1 Accounting policies

Statement of compliance

The consolidated and company financial statements are prepared in compliance with International Financial Reporting Standards (IFRS) and Interpretations of those standards, as adopted by the International Accounting Standards Board (IASB) and applicable legislation.

During the current financial year the following new or revised accounting standards, amendments to standards and new interpretations were adopted by AngloGold Ashanti Limited:

Standard or Interpretation	Title	Effective for annual periods beginning on or after
IFRS 1/IAS 27	Amendments – Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate	1 January 2009
IFRS 2	Amendments – Vesting Conditions and Cancellations	1 January 2009
IFRS 7	Amendment – Improving Disclosure about Financial Instruments	1 January 2009
IFRS 8	Operating Segments	1 January 2009
IFRS’s	Annual Improvement Project – May 2008	Mostly 1 January 2009
IAS 1	Presentation of Financial Statements (revised)	1 January 2009
IAS 32/IAS 1	Amendments – Puttable Financial Instruments and Obligations arising on Liquidation	1 January 2009
IAS 39/IFRIC 9	Embedded Derivatives	Periods ending on or after 30 June 2009
IFRIC 15	Agreements for the Construction of Real Estate	1 January 2009
IFRIC 16	Hedges of a Net Investment in a Foreign Operation	1 October 2008

The adoption of these new or revised standards, amendments to standards and interpretations did not have any effect on the financial position or performance of the group. As a result of the revision of IAS 1, a statement of comprehensive income, which discloses non owner changes in equity, and a statement of changes in equity are presented.

During the current financial year no new or revised accounting standards, amendments to standards and new interpretations were early adopted by AngloGold Ashanti Limited.

The following accounting standards, amendments to standards and new interpretations, which are not yet mandatory for AngloGold Ashanti Limited, have not been adopted in the current year:

Standard or Interpretation	Title	Effective for annual period beginning on or after
IFRS 2	Group Cash-settled and Share-based Payment Transactions	1 January 2010
IFRS 3	Business Combinations (revised)	1 July 2009
IFRS 9	Financial Instruments	1 January 2013
IFRS’s	Annual Improvement Project – May 2009	Mostly 1 January 2010
IAS 24	Related Party Disclosures	1 January 2011
IAS 27	Consolidated and Separate Financial Statements (revised)	1 July 2009
IAS 32	Amendment – Classification of Rights Issues	1 February 2010
IAS 39	Amendment – Eligible Hedged Items	1 July 2009
IFRIC 14	Prepayments of a Minimum Funding Requirement – amendment	1 January 2011
IFRIC 17	Distributions of Non-cash Assets to Owners	1 July 2009
IFRIC 18	Transfers of Assets from Customers	1 July 2009
IFRIC19	Extinguishing Financial Liabilities with Equity Instruments	1 July 2010

The group has assessed the significance of these new standards, amendments to standards and new interpretations, which will be applicable from 1 July 2009 and later years and concluded that they will have no material financial impact.

IAS 27 and IFRS 3 will have an impact on the financial reporting of new acquisitions and disposals.

1.1 Basis of preparation

The financial statements are prepared according to the historical cost accounting convention, except for the revaluation of certain financial instruments to fair value. The group’s accounting policies as set out below are consistent in all material respects with those applied in the previous year, except for the adoption of the new and revised standards and interpretations mentioned above and the change in accounting policy described in Note 1.2.

AngloGold Ashanti Limited presents its consolidated financial statements in South African rands and US dollars for the benefit of local and international investors. The functional currency of a significant portion of the group’s operations is the South African rand. Other main subsidiaries have functional currencies of US dollars and Australian dollars.

The group financial statements incorporate the financial statements of the company, its subsidiaries and its equity accounted interests in joint ventures and associates.

The financial statements of all material subsidiaries, the Environmental Rehabilitation Trust Fund and joint ventures, are prepared for the same reporting period as the holding company, using the same accounting policies, except for Rand Refinery Limited which reports on a three-month time lag. Adjustments are made to the subsidiary financial results for material transactions and events in the intervening period.

Subsidiaries are all entities (including special purpose entities) over which the group has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are de-consolidated from the date on which control ceases.

The acquisition of non-controlling interests is reflected as an equity transaction. The entire difference between the cost of the additional interest and the non-controlling entity’s share at the date of acquisition is reflected as a transaction between owners.

Intra-group transactions, balances and unrealised gains and losses on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are accounted for at cost and are adjusted for impairments where appropriate in the company financial statements.

1.2 Changes in accounting policies

In terms of IAS 21 “The Effects of Changes in Foreign Exchange Rates”, the group has previously presented share capital and premium at the closing rate of exchange. During the current year, the group changed its accounting policy to account for share capital and premium using historical rates of exchange. Management’s judgement is that the change in accounting policy will provide more relevant and reliable information when the group is compared to its gold mining peers, as they report their share capital and premium at historical rates of exchange. The effects of the change in accounting policy have been calculated retrospectively and are as follows as at 31 December 2008 and 2007:

Share capital and premium

US Dollar million	2008	2007
Previously at closing balance	3,949	3,285
Restated at historical cost	5,485	3,608
Impact on translation	1,536	323

IAS 1 (Revised) requires the presentation of a statement of financial position as at the beginning of the earliest comparative period when a retrospective change in accounting policy is applied. Accordingly a statement of financial position is presented for 31 December 2009, 2008 and 2007.

1.3 Significant accounting judgements and estimates

Use of estimates: The preparation of the financial statements requires the group’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The determination of estimates requires the exercise of judgement based on various assumptions and other factors such as historical experience, current and expected economic conditions, and in some cases actuarial techniques. Actual results could differ from those estimates.

The more significant areas requiring the use of management estimates and assumptions relate to Ore Reserve that are the basis of future cash flow estimates and unit-of-production depreciation, depletion and amortisation calculations; environmental, reclamation and closure obligations; estimates of recoverable gold and other materials in heap leach pads; asset impairments/reversals (including impairments of goodwill), write-downs of inventory to net realisable value; post-employment, post-retirement and other employee benefit liabilities; the fair value and accounting treatment of financial instruments and deferred taxation.

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

As a global company, the group is exposed to numerous legal risks. The outcome of currently pending and future proceedings cannot be predicted with certainty. Thus, an adverse decision in a lawsuit could result in additional costs that are not covered, either wholly or partly, under insurance policies and that could significantly influence the business and results of operations.

The judgements that management have applied in the application of accounting policies, and the estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.

Carrying value of goodwill and tangible assets

All mining assets are amortised using the units-of-production method where the mine operating plan calls for production from well-defined Ore Reserve over proved and probable reserves.

For mobile and other equipment, the straight-line method is applied over the estimated useful life of the asset which does not exceed the estimated mine life based on proved and probable Ore Reserve as the useful lives of these assets are considered to be limited to the life of the relevant mine.

The calculation of the units-of-production rate of amortisation could be impacted to the extent that actual production in the future is different from current forecast production based on proved and probable Ore Reserve. This would generally arise when there are significant changes in any of the factors or assumptions used in estimating Ore Reserve.

These factors could include:

• changes in proved and probable Ore Reserve;
• the grade of Ore Reserve may vary significantly from time to time;
• differences between actual commodity prices and commodity price assumptions;
• unforeseen operational issues at mine sites;
• changes in capital, operating, mining, processing and reclamation costs, discount rates and foreign exchange rates; and
• changes in Ore Reserve could similarly impact the useful lives of assets depreciated on a straight-line basis, where those lives are limited to the life of the mine.

The recoverable amounts of cash-generating units and individual assets have been determined based on the higher of value in use calculations and fair values less costs to sell. These calculations require the use of estimates and assumptions. It is reasonably possible that the gold price assumption may change which may then impact the estimated life of mine determinant and may then require a material adjustment to the carrying value of goodwill and tangible assets.

The group defers stripping costs incurred during the production stage of its open-pit operations, for those operations, where this is the most appropriate basis for matching the costs against the related economic benefits. This is generally the case where there are fluctuations in stripping costs over the life of the mine.

In the production stage of some open-pit operations, further development of the mine requires a phase of unusually high overburden removal activity that is similar in nature to preproduction mine development. The costs of such unusually high overburden removal activity are deferred and charged against reported profits in subsequent periods on a units-of-production basis. This accounting treatment is consistent with that for stripping costs incurred during the development phase of a mine, before production commences.

If the group were to expense production stage stripping costs as incurred, this would result in volatility in the year to year results from open-pit operations and excess stripping costs would be expensed at an earlier stage of a mine’s operation.

Deferred stripping costs are included in ‘Mine development costs’, within tangible assets. These form part of the total investment in the relevant cash-generating unit, which is reviewed for impairment if events or a change in circumstances indicate that the carrying value may not be recoverable. Amortisation of deferred stripping costs is included in operating costs, or in the group’s share of the results of its equity accounted units, as appropriate.

The group reviews and tests the carrying value of assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. In addition, goodwill is tested on an annual basis for impairment. Assets are grouped at the lowest level for which identifiable cash flows are largely independent of cash flows of other assets. If there are indications that impairment may have occurred, estimates are prepared of expected future cash flows for each group of assets. Expected future cash flows used to determine the value in use of goodwill and tangible assets are inherently uncertain and could materially change over time. They are significantly affected by a number of factors including published reserves, resources, exploration potential and production estimates, together with economic factors such as spot and future gold prices, discount rates, foreign currency exchange rates, estimates of costs to produce reserves and future capital expenditure.

An individual operating mine is not a typical going-concern business because of the finite life of its reserves. The allocation of goodwill to an individual mine will result in an eventual goodwill impairment due to the wasting nature of the mine reporting unit. In accordance with the provisions of IAS 36, the group performs its annual impairment review of assigned goodwill during the fourth quarter of each year.

The carrying amount of goodwill in the consolidated financial statements at 31 December 2009 was $159m, R1,178m (2008: $128m, R1,208m). The carrying amount of tangible assets at 31 December 2009 was $5,819m, R43,263m (2008: $4,345m, R41,081m).

Production start date

The group assesses the stage of each mine construction project to determine when a mine moves into the production stage. The criteria used to assess the start date are determined by the unique nature of each mine construction project and include factors such as the complexity of a plant and its location. The group considers various relevant criteria to assess when the mine is substantially complete and ready for its intended use and moves into the production stage.
Some of the criteria would include but are not limited to the following:

• the level of capital expenditure compared to the construction cost estimates;
• completion of a reasonable period of testing of the mine plant and equipment;
• ability to produce gold in saleable form (within specifications and the de minimis rule); and
• ability to sustain ongoing production of gold.

When a mine construction project moves into the production stage, the capitalisation of certain mine construction costs ceases and costs are either regarded as inventory or expensed, except for capitalisable costs related to mining asset additions or improvements, underground mine development or Ore Reserve development.

Income taxes

The group is subject to income taxes in numerous jurisdictions. Significant judgement is required in determining the worldwide provision for income taxes due to the complexity of legislation. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

The group recognises the net future tax benefit related to deferred income tax assets to the extent that it is probable that the deductible temporary differences will reverse in the foreseeable future. Assessing the recoverability of deferred income tax assets requires the group to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the group to realise the net deferred tax assets recorded at the reporting date could be impacted.

Additionally, future changes in tax laws in the jurisdictions in which the group operates could limit the ability of the group to obtain tax deductions in future periods.

Carrying values of the group at 31 December 2009:

• deferred tax asset: $61m, R451m (2008: $50m, R475m);
• deferred tax liability: $753m, R5,599m (2008: $617m, R5,838m); and
• taxation liability: $142m, R1,059m (2008: $109m, R1,033m).

Provision for environmental rehabilitation obligations

The group’s mining and exploration activities are subject to various laws and regulations governing the protection of the environment. The group recognises management’s best estimate for decommissioning and restoration obligations in the period in which they are incurred. Actual costs incurred in future periods could differ materially from the estimates. Additionally, future changes to environmental laws and regulations, life of mine estimates and discount rates could affect the carrying amount of this provision. Such changes could similarly impact the useful lives of assets depreciated on a straight-line-basis, where those lives are limited to the life of mine.

The carrying amount of the rehabilitation obligations for the group at 31 December 2009 was $418m, R3,109m (2008: $376m, R3,562m).

Stockpiles, gold in process and ore on leach pad

Costs that are incurred in or benefit the production process are accumulated as stockpiles, gold in process and ore on leach pads. Net realisable value tests are performed at least annually and represent the estimated future sales price of the product, based on prevailing and long-term metals prices, less estimated costs to complete production and bring the product to sale.

Stockpiles and underground gold in process are measured by estimating the number of tonnes added and removed from the stockpile and from underground, the number of contained gold ounces based on assay data, and the estimated recovery percentage based on the expected processing method. Stockpile and underground ore tonnages are verified by periodic surveys.

Estimates of the recoverable gold on the leach pads are calculated from the quantities of ore placed on the pads based on measured tons added to the leach pads, the grade of ore placed on the leach pads based on assay data and a recovery percentage based on metallurgical testing and ore type.

Although the quantities of recoverable metal are reconciled by comparing the grades of ore to the quantities of gold actually recovered (metallurgical balancing), the nature of the process inherently limits the ability to precisely monitor recoverability levels. As a result, the metallurgical balancing process is constantly monitored and engineering estimates are refined based on actual results over time.

Variations between actual and estimated quantities resulting from changes in assumptions and estimates that do not result in write-downs to net realisable value are accounted for on a prospective basis.

The carrying amount of inventories (excluding finished goods and mine operating supplies) for the group at 31 December 2009 was $661m, R4,919m (2008: $585m, R5,518m).

Recoverable tax, rebates, levies and duties

In a number of countries, particularly in Africa, AngloGold Ashanti Limited is due refunds of input tax which remain outstanding for periods longer than those provided for in the respective statutes.

In addition, AngloGold Ashanti Limited has unresolved tax disputes in a number of countries, particularly in Tanzania and Mali. If the outstanding input taxes are not received and the tax disputes are not resolved in a manner favourable to AngloGold Ashanti Limited, it could have an adverse effect upon the carrying value of these assets.

The carrying value of recoverable tax, rebates, levies and duties for the group at 31 December 2009 was $138m, R1,025m (2008: $99m, R942m).

Pension plans and post-retirement medical aid obligations

The determination of AngloGold Ashanti Limited’s obligation and expense for pension and provident funds, as well as post-retirement health care liabilities, depends on the selection of certain assumptions used by actuaries to calculate amounts. These assumptions include, among others, the discount rate, the expected long-term rate of return of plan assets, health care inflation costs, rates of increase in compensation costs and the number of employees who reach retirement age before the mine reaches the end of its life. While AngloGold Ashanti Limited believes that these assumptions are appropriate, significant changes in the assumptions may materially affect pension and other post-retirement obligations as well as future expenses, which may result in an impact on earnings in the periods that the changes in these assumptions occur.

The carrying value of the defined benefit plans (including the net asset position disclosed under non-current assets) at 31 December 2009 was $152m, R1,125m, (2008: $135m, R1,276m).

Ore Reserve estimates

An Ore Reserve estimate is an estimate of the amount of product that can be economically and legally extracted from the group’s properties. In order to calculate Ore Reserve, estimates and assumptions are required about a range of geological, technical and economic factors, including quantities, grades, production techniques, recovery rates, production costs, transport costs, commodity demand, commodity prices and exchange rates.

Estimating the quantity and/or grade of Ore Reserve requires the size, shape and depth of orebodies to be determined by analysing geological data such as the logging and assaying of drill samples. This process may require complex and difficult geological judgements and calculations to interpret the data.

The group is required to determine and report Ore Reserve in accordance with the SAMREC code.

Because the economic assumptions used to estimate Ore Reserve change from period to period, and because additional geological data is generated during the course of operations, estimates of Ore Reserve may change from period to period. Changes in reported Ore Reserve may affect the group’s financial results and financial position in a number of ways, including the following:

• asset carrying values may be affected due to changes in estimated future cash flows;
• depreciation, depletion and amortisation charged in the income statement may change where such charges are determined by the units-of-production basis, or where the useful economic lives of assets change;
• overburden removal costs recorded on the statement of financial position or charged in the income statement may change due to changes in stripping ratios or the units-of-production basis of depreciation;
• decommissioning site restoration and environmental provisions may change where changes in estimated Ore Reserve affect expectations about the timing or cost of these activities; and
• the carrying value of deferred tax assets may change due to changes in estimates of the likely recovery of the tax benefits.

Exploration and evaluation expenditure

The group’s accounting policy for exploration and evaluation expenditure results in certain items of expenditure being capitalised for an area of interest where it is considered likely to be recoverable by future exploitation. This policy requires management to make certain estimates and assumptions as to future events and circumstances, in particular whether an economically viable extraction operation can be established. Any such estimates and assumptions may change as new information becomes available. If, after having capitalised the expenditure, a judgement is made that recovery of the expenditure is unlikely, the relevant capitalised amount will be written off to the income statement.

The carrying value of capitalised exploration assets at 31 December 2009 was $1m, R10m (2008: $0.3m, R3m).

Development expenditure

Development activities commence after project sanctioning by the appropriate level of management. Judgement is applied by management in determining when a project has reached a stage at which economically recoverable reserves exist such that development may be sanctioned. In exercising this judgement, management is required to make certain estimates and assumptions similar to those described above for capitalised exploration and evaluation expenditure. Any such estimates and assumptions may change as new information becomes available. If, after having started the development activity, a judgement is made that a development asset is impaired, the appropriate amount will be written off to the income statement.

Share-based payments

The group issues equity-settled share-based payments to certain employees and third parties outside the group. Equity-settled share-based payments are measured at fair value (excluding the effect of non-market based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed as services are rendered over the vesting period, based on the group’s estimate of the shares that will eventually vest and adjusted for the effect of non-market-based vesting conditions.

Fair value is measured using the Black-Scholes pricing model. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

The income statement charge for the year was $41m, R337m (2008: $43m, R355m).

Contingencies

By their nature, contingencies will only be resolved when one or more future events occur or fail to occur. The assessment of such contingencies inherently involves the exercise of significant judgement and estimates of the outcome of future events.

Litigation and other judicial proceedings as a rule raise difficult and complex legal issues and are subject to uncertainties and complexities including, but not limited to, the facts and circumstances of each particular case, issues regarding the jurisdiction in which each suit is brought and differences in applicable law. Upon resolution of any pending legal matter, the group may be forced to incur charges in excess of the presently established provisions and related insurance coverage. It is possible that the financial position, results of operations or cash flows of the group could be materially affected by the unfavourable outcome of litigation.

1.4 Summary of significant accounting policies

Equity accounted investments

Joint ventures

A joint venture is an entity in which the group holds a long-term interest and which the group and one or more other venturers jointly control under a contractual arrangement, that provides for strategic, financial and operating policy decisions relating to the activities requiring unanimous consent of the parties sharing control. The group’s interests in jointly controlled entities are accounted for using the equity method.

Profits and losses realised in connection with transactions between the group and jointly controlled entities are eliminated in proportion to share ownership. Such profits and losses are deducted from the group’s equity and related balance sheet amount and released in the group accounts when the assets are effectively realised outside the group.

Joint ventures are accounted for at cost and are adjusted for impairments where appropriate in the company financial statements.

Associates

The equity method of accounting is used for an investment over which the group exercises significant influence and normally owns between 20% and 50% of the voting equity. Associates are equity accounted from the effective date of acquisition to the effective date of disposal. If necessary, impairment losses on the equity value are reported under share of profit and loss from investments accounted for using the equity method.

Profits and losses realised in connection with transactions between the group and associated companies are eliminated in proportion to share ownership. Such profits and losses are deducted from the group’s equity and related balance sheet amount and released in the group accounts when the assets are effectively realised outside the group.

As the group only has significant influence, it is unable to obtain reliable information at year-end on a timely basis. The results of associates are equity accounted from their most recent audited annual financial statements or unaudited interim financial statements, all within three months of the year-end of the group. Adjustments are made to the associates’ financial results for material transactions and events in the intervening period.

Associates are accounted for at cost and are adjusted for impairments where appropriate in the company financial statements.

Joint ventures and associates

Any losses of equity accounted investments are brought to account in the consolidated financial statements until the investment in such investments is written down to zero. Thereafter, losses are accounted for only insofar as the group is committed to providing financial support to such investees.

The carrying value of equity accounted investments represent the cost of each investment, including goodwill, balance outstanding on loans advanced if the loan forms part of the net investment in the investee, any impairment losses recognised, the share of post-acquisition retained earnings and losses, and any other movements in reserves. The carrying value of equity accounted investments is reviewed when indicators arise and if any impairment in value has occurred, it is recognised in the period in which the impairment arose.

Foreign currency translation

Functional currency

Items included in the financial statements of each of the group’s entities are measured using the currency of the primary economic environment in which the entity operates (the ‘functional currency’).

Transactions and balances

Foreign currency transactions are translated into the functional currency using the approximate exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of foreign currency transactions and from the translation at the year-end exchange rate of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except for hedging derivative balances that are within the scope of IAS 39. Translation differences on these balances are reported as part of their fair value gain or loss.

Translation differences on non-monetary items, such as equities classified as available for sale financial assets, are included in other comprehensive income in equity.

Group companies

The results and financial position of all group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

• share capital and premium are translated at historical rates of exchange at the reporting date;
• retained earnings are converted at historical average exchange rates;
• assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position;
• income and expenses for each income statement presented are translated at monthly average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rates prevailing at the date of the transaction);
• all resulting exchange differences are recognised as a separate component of equity (foreign currency translation); and
• other reserves, other than those translated above, are converted at the closing rate at each reporting date. These resulting exchange differences are recognised in retained earnings.

Exchange differences arising from the translation of the net investment in foreign operations, and of borrowings and other currency instruments designated as hedges of such investments, are taken to other comprehensive income on consolidation. For the company, the exchange differences on such monetary items are reported in the company income statement.

When a foreign operation is sold, such exchange differences are recognised in the income statement as part of the gain or loss on sale.

Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate.

Segment reporting

An operating segment is a business activity, whose results are regularly reviewed by the chief operating decision maker in order to make decisions about resources to be allocated to it and assess its performance and for which discrete financial information is available. The chief operating decision maker has been determined to be the Executive Committee.

Tangible assets

Tangible assets are recorded at cost less accumulated amortisation and impairments/reversals. Cost includes preproduction expenditure incurred during the development of a mine and the present value of related future decommissioning costs.

Interest on borrowings relating to the financing of major capital projects under construction is capitalised during the construction phase as part of the cost of the project. Such borrowing costs are capitalised over the period during which the asset is being acquired or constructed and borrowings have been incurred. Capitalisation ceases when construction is interrupted for an extended period or when the asset is substantially complete. Other borrowing costs are expensed as incurred.

If there is an indication that the recoverable amount of any of the tangible assets is less than the carrying value, the recoverable amount is estimated and an allowance is made for the impairment in value.

Subsequent costs are included in the asset’s carrying amount only when it is probable that future economic benefits associated with the asset will flow to the group, and the cost of the addition can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

To the extent a legal or constructive obligation to a third party exists, the acquisition cost includes estimated costs of dismantling and removing the asset and restoring the site. A change in estimated expenditures for dismantling, removal and restoration is added to and/or deducted from the carrying value of the related asset. To the extent that the change would result in a negative carrying amount, this effect is recognised as income. The change in depreciation charge is recognised prospectively.

For those assets not amortised on the units-of-production method, amortisation of assets is calculated to allocate the cost of each asset to its residual value over its estimated useful life as follows:

• buildings up to life of mine;
• plant and machinery up to life of mine;
• equipment and motor vehicles up to five years;
• computer equipment up to three years; and
• leased assets over the shorter of the period of the lease and the useful life.

Major renovations are depreciated over the remaining useful life of the related asset or to the date of the next major renovation, whichever is sooner.

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.

Gains and losses on disposals are determined by comparing net sale proceeds with the carrying amount. These are included in the income statement.

Mine development costs

Capitalised mine development costs include expenditure incurred to develop new orebodies, to define further mineralisation in existing orebodies and, to expand the capacity of a mine. Where funds have been borrowed specifically to finance a project, the amount of interest capitalised represents the actual borrowing costs incurred. Mine development costs include acquired proved and probable Ore Reserve at cost at the acquisition date.

Depreciation, depletion and amortisation of mine development costs are computed by the units-of-production method based on estimated proved and probable Ore Reserve. Proved and probable Ore Reserve reflect estimated quantities of economically recoverable reserves which can be recovered in the future from known mineral deposits. These reserves are amortised from the date on which commercial production begins.

Stripping costs incurred in open-pit operations during the production phase to remove additional waste are charged to operating costs on the basis of the average life of mine stripping ratio and the average life of mine costs per tonne. The average stripping ratio is calculated as the number of tonnes of waste material expected to be removed during the life of mine per tonne of ore mined. The average life of mine cost per tonne is calculated as the total expected costs to be incurred to mine the orebody, divided by the number of tonnes expected to be mined. The average life of mine stripping ratio and the average life of mine cost per tonne are recalculated annually in the light of additional knowledge and changes in estimates.

The cost of the excess stripping is capitalised as mine development costs when the actual mining costs exceed the sum of the adjusted tonnes mined, being the actual ore tonnes plus the product of the actual ore tonnes multiplied by the average life of mine stripping ratio, multiplied by the life of mine cost per tonne. When the actual mining costs are below the sum of the adjusted tonnes mined, being the actual ore tonnes plus the product of the actual ore tonne multiplied by the average life of mine stripping ratio, multiplied by the life of mine cost per tonnes, previously capitalised costs are expensed to increase the cost up to the average.

The cost of stripping in any period will be reflective of the average stripping rates for the orebody as a whole. Changes in the life of mine stripping ratio are accounted for prospectively as a change in estimate.

Mine infrastructure

Mine plant facilities, including decommissioning assets, are amortised using the lesser of their useful life or units-of-production method based on estimated proved and probable Ore Reserve. Other tangible assets comprising vehicles and computer equipment, are depreciated by the straight-line method over their estimated useful lives.

Land and assets under construction

Land and assets under construction are not depreciated and are measured at historical cost less impairments.

Mineral rights and dumps

Mineral rights are amortised using the units-of-production method based on estimated proved and probable Ore Reserve. Dumps are amortised over the period of treatment.

Exploration and evaluation assets

All exploration costs are expensed until the directors conclude that a future economic benefit will more likely than not be realised. In evaluating if expenditures meet this criterion to be capitalised, the directors use several different sources of information depending on the level of exploration. While the criterion for concluding that expenditure should be capitalised is always probable, the information that the directors use to make that determination depends on the level of exploration.

• Costs on greenfields sites, being those where the group does not have any mineral deposits which are already being mined or developed, are expensed as incurred until the directors are able to demonstrate that future economic benefits are probable, which generally will be the establishment of proved and probable reserves at this location.
• Costs on brownfields sites, being those adjacent to mineral deposits which are already being mined or developed, are expensed as incurred until the directors are able to demonstrate that future economic benefits are probable, which generally will be the establishment of increased proved and probable reserves after which the expenditure is capitalised as a mine development cost.
• Costs relating to extensions of mineral deposits, which are already being mined or developed, including expenditure on the definition of mineralisation of such mineral deposits, is capitalised as a mine development cost.

Costs relating to property acquisitions are capitalised within development costs.

Intangible assets

Acquisition and goodwill arising thereon

Where an investment in a subsidiary, joint venture or an associate is made, any excess of the purchase price over the fair value of the attributable Mineral Resource including value beyond proved and probable, exploration properties and net assets is recognised as goodwill. Goodwill in respect of subsidiaries is disclosed as goodwill. Goodwill relating to equity accounted joint ventures and associates is included within the carrying value of the investment and tested for impairment when indicators exist.

Goodwill relating to subsidiaries is tested annually for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to cash-generating units for the purpose of impairment testing.

Royalty rate concession

Royalty rate concession with the government of Ghana was capitalised at fair value at agreement date. Fair value represents a present value of future royalty rate concessions over 15 years. The royalty rate concession has been assessed to have a finite life and is amortised on a straight-line method over a period of 15 years, the period over which the concession runs. The related amortisation expense is charged through the income statement. This intangible asset is also tested for impairment when there is an indicator of impairment.

Impairment of assets

Intangible assets that have an indefinite useful life and separately recognised goodwill are not subject to amortisation and are tested annually for impairment and whenever events or changes in circumstance indicate that the carrying amount may not be recoverable. Assets that are subject to amortisation are tested for impairment whenever events or changes in circumstance indicate that the carrying amount may not be recoverable.

An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).

Impairment calculation assumptions include life of mine plans based on prospective reserves and resources, management’s estimate of the future gold price, based on current market price trends, foreign exchange rates, and a pre-tax discount rate adjusted for country and project risk. It is therefore reasonably possible that changes could occur which may affect the recoverability of tangible and intangible assets.

Leased assets

Assets subject to finance leases are capitalised at the lower of fair value or present value of minimum lease payments measured at inception of the lease with the related lease obligation recognised at the same amount. Capitalised leased assets are depreciated over the shorter of their estimated useful lives and the lease term. Finance lease payments are allocated using the rate implicit in the lease, which is included in finance costs, and the capital repayment, which reduces the liability to the lessor.

Operating lease rentals are charged against operating profits in a systematic manner related to the period the assets concerned will be used.

Non-current assets held for sale

Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as having been met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell.

Exploration and research expenditure

Pre-licence costs are recognised in profit or loss as incurred. Exploration and research expenditure is expensed in the year in which it is incurred. These expenses include: geological and geographical costs, labour, Mineral Resource and exploratory drilling costs.

Inventories

Inventories are valued at the lower of cost and net realisable value after appropriate allowances for redundant and slow moving items. Cost is determined on the following bases:

• gold in process is valued at the average total production cost at the relevant stage of production;
• gold doré/bullion is valued on an average total production cost method;
• ore stockpiles are valued at the average moving cost of mining and stockpiling the ore. Stockpiles are classified as a non-current asset where the stockpile exceeds current processing capacity;
• by-products, which include uranium oxide and sulphuric acid are valued on an average total production cost method. By-products are classified as a non-current asset where the by-products on hand exceed current processing capacity;
• mine operating supplies are valued at average cost; and
• heap leach pad materials are measured on an average total production cost basis. The cost of materials on the leach pad from which gold is expected to be recovered in a period longer than 12 months is classified as a non-current asset.

A portion of the related depreciation, depletion and amortisation charge is included in the cost of inventory.

Provisions

Provisions are recognised when the group has a present obligation, whether legal or constructive, because of a past event for which it is probable that an outflow of resources embodying economic benefits will be requiro settle the obligation and a reliable estimate can be made of the amount of the obligation. Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement is recognised only when the reimbursement is virtually certain. The amount to be reimbursed is recognised as a separate asset. Where the group has a joint and several liability with one or more other parties, no provision is recognised to the extent that those other parties are expected to settle part or all of the obligation.

Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the obligation at the reporting date. The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability.

Litigation and administrative proceedings are evaluated on a case-by-case basis considering the information available, including that of legal counsel, to assess potential outcomes. Where it is considered probable that an obligation will result in an outflow of resources, a provision is recorded for the present value of the expected cash outflows if these are reasonably measurable. These provisions cover the estimated payments to plaintiffs, court fees and the cost of potential settlements.

AngloGold Ashanti Limited does not recognise a contingent liability on its statement of financial position except in a business combination. A contingent liability is disclosed when the possibility of an outflow of resources embodying economic benefits is not remote.

Borrowed commodities

When commodities are borrowed to meet contractual commitments, the fair value at inception is charged to the income statement as cost of sales, and it is reflected as a liability on the statement of financial position. The liability is subsequently measured at fair value with changes in fair value recorded through the income statement until settlement occurs.

Employee benefits

Pension obligations

Group companies operate various pension schemes. The schemes are funded through payments to insurance companies or trustee-administered funds, determined by periodic actuarial calculations. The group has both defined benefit and defined contribution plans. A defined benefit plan is a pension plan that defines an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation.

A defined contribution plan is a pension scheme under which the group pays fixed contributions into a separate entity. The group has no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in current and prior periods. The contributions are recognised as employee benefit expenses when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future contribution payments is available.

The asset/liability recognised in the statement of financial position in respect of defined benefit pension plans is the present value of the defined benefit obligation at the reporting date less the fair value of plan assets, together with adjustments for past service costs. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The value of any defined benefit asset recognised is restricted to the sum of any past service cost and actuarial gains and losses not yet recognised and the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are immediately recorded in other comprehensive income.

Other post-employment benefit obligations

Some group companies provide post-retirement health care benefits to their retirees. The entitlement to these benefits is usually conditional on the employee remaining in service up to retirement age and completion of a minimum service period. The expected costs of these benefits are accrued over the period of employment using an accounting methodology on the same basis as that used for defined benefit pension plans. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recorded in other comprehensive income immediately. These obligations are valued annually by independent qualified actuaries.

Termination benefits

Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. The group recognises termination benefits when it is demonstrably committed to either: terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal; or providing termination benefits as a result of an offer made to encourage voluntary redundancy based on the number of employees expected to accept the offer. Benefits falling due more than 12 months after reporting date are discounted to present value.

Profit-sharing and bonus plans

The group recognises a liability and an expense for bonuses and profit-sharing, based on a formula that takes into consideration the profit attributable to the group’s shareholders after certain adjustments. The group recognises a provision where contractually obliged or where there is a past practice that has created a constructive obligation.

Share-based payments

The group’s management awards certain employees bonuses in the form of equity settled share-based payments on a discretionary basis.

The fair value of the equity instruments granted is calculated at measurement date, for transactions with employees this is at grant date. For transactions with employees, fair value is based on market prices of the equity instruments granted, if available, taking into account the terms and conditions upon which those equity instruments were granted. If market prices of the equity instruments granted are not available, the fair value of the equity instruments granted is estimated using an appropriate valuation model. Vesting conditions, other than market conditions, are not taken into account when estimating the fair value of shares or share options at measurement date.

Over the vesting period, the fair value at measurement date is recognised as an employee benefit expense with a corresponding increase in other capital reserves based on the group’s estimate of the number of instruments that will eventually vest. The income statement charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period. Vesting assumptions for non-market conditions are reviewed at each reporting date to ensure they reflect current expectations.

When options are exercised or share awards vest, the proceeds received, net of any directly attributable transaction costs, are credited to share capital (nominal value) and share premium.

Where the terms of an equity settled award are modified, as a minimum, an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any modification which increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of the modification.

In the company financial statements, share-based payment arrangements with employees of other group entities are recognised by charging that entity its share of the expense and a corresponding increase in other capital reserves.

Environmental expenditure

The group has long-term remediation obligations comprising decommissioning and restoration liabilities relating to its past operations which are based on the group’s environmental management plans, in compliance with current environmental and regulatory requirements. Provisions for non-recurring remediation costs are made when there is a present obligation, it is probable that expenditure on remediation work will be required and the cost can be estimated within a reasonable range of possible outcomes. The costs are based on currently available facts, technology expected to be available at the time of the clean up, laws and regulations presently or virtually certain to be enacted and prior experience in remediation of contaminated sites.

Annual contributions for the South African operations are made to Environmental Rehabilitation Trust Funds, created in accordance with local statutory requirements where applicable, to fund the estimated cost of rehabilitation during and at the end of the life of a mine. The amounts contributed to the trust funds are accounted for as non-current assets in the company. Interest earned on monies paid to rehabilitation trust funds is accrued on a time proportion basis and is recorded as interest income. For group purposes the trusts are consolidated.

Decommissioning costs

The provision for decommissioning represents the cost that will arise from rectifying damage caused before production commenced. Accordingly a provision is recognised and a decommissioning asset is recognised and included within mine infrastructure.

Decommissioning costs are provided at the present value of the expenditures expected to settle the obligation, using estimated cash flows based on current prices. The unwinding of the decommissioning obligation is included in the income statement. Estimated future costs of decommissioning obligations are reviewed regularly and adjusted as appropriate for new circumstances or changes in law or technology. Changes in estimates are capitalised or reversed against the relevant asset. Estimates are discounted at a pre-tax rate that reflects current market assessments of the time value of money.

Gains or losses from the expected disposal of assets are not taken into account when determining the provision.

Restoration costs

The provision for restoration represents the cost of restoring site damage after the start of production. Increases in the provision are charged to the income statement as a cost of production.

Restoration costs are estimated at the present value of the expenditures expected to settle the obligation, using estimated cash flows based on current prices. The estimates are discounted at a pre-tax rate that reflects current market assessments of the time value of money and risks specific to the liability.

Revenue recognition

Revenue is recognised at the fair value of the consideration received or receivable to the extent that it is probable that economic benefits will flow to the group and revenue can be reliably measured. The following criteria must also be present:

• the sale of mining products is recognised when the significant risks and rewards of ownership of the products are transferred to the buyer;
• dividends are recognised when the right to receive payment is established;
• interest is recognised on a time proportion basis, taking account of the principal outstanding and the effective rate over the period to maturity, when it is determined that such income will accrue to the group; and
• where a by-product is not regarded as significant, revenue is credited against cost of sales, when the significant risks and rewards of ownership of the products are transferred to the buyer.

Taxation

Deferred taxation is provided on all qualifying temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax assets are only recognised to the extent that it is probable that the deductible temporary differences will reverse in the foreseeable future and future taxable profit will be available against which the temporary difference can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient future taxable profit will be available to allow all or part of the deferred tax asset to be utilised.

Deferred tax assets and liabilities are measured at future anticipated tax rates, which have been enacted or substantively enacted at the reporting date.

Current and deferred tax is recognised as income or expense and included in profit or loss for the period, except to the extent that the tax arises from a transaction or event which is recognised, in the same or a different period directly in components of equity, or a business combination that is an acquisition.

Current tax is measured on taxable income at the applicable statutory rate enacted or substantively enacted at the reporting date.

Special items

Items of income and expense that are material and require separate disclosure, in accordance with IAS 1.97, are classified as special items on the face of the income statement. Special items that relate to the underlying performance of the business are classified as operating special items and include impairment charges and reversals. Special items that do not relate to underlying business performance are classified as non-operating special items and are presented below operating loss on the income statement.

Dividend distribution

Dividend distribution to the group’s shareholders is recognised as a liability in the group’s financial statements in the period in which the dividends are declared by the board of directors of AngloGold Ashanti Limited.

Financial instruments

Financial instruments are initially measured at fair value when the group becomes a party to their contractual arrangements. Transaction costs are included in the initial measurement of financial instruments, except financial instruments classified as at fair value through profit and loss. The subsequent measurement of financial instruments is dealt with below.

A financial asset is derecognised when the right to receive cash flows from the asset has expired or the group has transferred its rights to receive cash and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.

On derecognition of a financial asset, the difference between the proceeds received or receivable and the carrying amount of the asset is included in profit or loss.

On derecognition of a financial liability, the difference between the carrying amount of the liability extinguished or transferred to another party and the amount paid is included in profit or loss.

Regular way purchases and sales of all financial assets and liabilities are accounted for at settlement date.

Derivatives

The group enters into derivatives to ensure a degree of price certainty and to guarantee a minimum revenue on a portion of future planned gold production. In addition, the group enters into derivatives to manage interest rate and currency risk.

The method of recognising fair value gains and losses depends on whether derivatives are classified as held for trading or are designated as hedging instruments, and if the latter, the nature of the risks being hedged. The group designates derivatives as either, hedges of the variability in highly probable future cash flows attributable to a recognised asset or liability, or a forecast transaction (cash flow hedges), or hedges of the fair value of recognised asset or liability or a firm commitment (fair value hedges).

For cash flow hedges, the effective portions of fair value gains or losses are recognised in other comprehensive income until the hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting or when the hedge transactions affect earnings. Any cumulative gain or loss existing in equity at that time remains in equity until the forecast transaction is recognised in the income statement. If a hedge of a forecast transaction subsequently results in the recognition of a non-financial asset or liability, the associated cumulative gains and losses that were recognised directly in other comprehensive income are reclassified into earnings in the same periods during which the asset acquired or the liability assumed affects earnings for the period.

When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in other comprehensive income is immediately transferred to the income statement. The ineffective portion of fair value gains and losses is reported in earnings in the period to which they relate. For fair value hedges, the gain or loss from changes in fair value of the hedged item is reported in earnings, together with the offsetting gains and losses from changes in fair value of the hedging instrument.

All other derivatives are classified as held for trading and are subsequently measured at their estimated fair value, with the changes in estimated fair value in the statement of financial position as either a derivative asset or derivative liability, including translation differences, at each reporting date being reported in earnings in the period to which it relates. Fair value gains and losses on these derivatives are included in gross profit in the income statement.

Commodity based (normal purchase or normal sale) derivative contracts that meet the requirements of IAS 39 are recognised in earnings when they are settled by physical delivery.

Hedge accounting

Hedge accounting is applied to derivatives designated as hedging instruments in a cash flow hedge provided certain criteria in IAS 39 are met. At the inception of a hedging relationship, the relationship between the hedging instruments and the hedged items, its risk management objective and its strategy for undertaking the hedge, is documented. A documented assessment, both at hedge inception and on an ongoing basis, of whether or not the hedging instruments, primarily derivatives, that are used in hedging transactions are highly effective in offsetting the changes attributable to the hedged risks in the cash flows of the hedged items, is also prepared.

Hedge ineffectiveness is recognised in the income statement in “Loss on non-hedge derivatives and other commodity contracts”.

The estimated fair values of derivatives are determined at discrete points in time based on the relevant market information. These estimates are calculated with reference to the market rates using industry standard valuation techniques.

Unearned premiums

Call option premiums received are recorded as trade and other payables until the option matures at which time the premium is recorded in revenue. This only applies to normal sale exempt designated deliverable call options.

Other investments

Listed equity investments and unlisted equity investments, other than investments in subsidiaries, joint ventures, and associates, are classified as available for sale financial assets and subsequently measured at fair value. Listed investments’ fair values are calculated by reference to the quoted selling price at the close of business on the reporting date. Fair values for unlisted equity investments are estimated using methods reflecting the economic circumstances of the investee. Equity investments for which fair value cannot be measured reliably are recognised at cost less impairment. Changes in fair value are recognised in other comprehensive income in the period in which they arise. These amounts are removed from equity and reported in income when the asset is derecognised or when there are evidence that the asset is impaired.

Investments which management has the intention and ability to hold to maturity are classified as held to maturity financial assets and are subsequently measured at amortised cost using the effective interest rate method. If there is evidence that held to maturity financial assets are impaired, the carrying amount of the assets are reduced and the loss recognised in the income statement.

Investments in subsidiaries, joint ventures, associates and the rehabilitation trusts are carried at cost less any accumulated impairments in the company’s separate financial statements.

Other non-current assets

• Loans and receivables are subsequently measured at amortised cost using the effective interest rate method. If there is evidence that loans and receivables are impaired, the carrying amount of the assets are reduced and the loss recognised in the income statement.
• Post-retirement assets are measured according to the employee benefits policy.

Trade and other receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less accumulated impairment. Impairment of trade and other receivables is established when there is objective evidence as a result of a loss event that the group will not be able to collect all amounts due according to the original terms of the receivables. Objective evidence includes failure by the counterparty to perform in terms of contractual arrangements and agreed terms. The amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The impairment is recognised in the income statement.

Cash and cash equivalents

Cash and cash equivalents are defined as cash on hand, demand deposits and short-term, highly liquid investments which are readily convertible to known amounts of cash and subject to insignificant risk of changes in value. They are measured at cost which is deemed to be fair value as they have a short-term maturity.

Cash restricted for use

Cash which is subject to legal or contractual restrictions on use is classified separately as cash restricted for use.

Financial liabilities

Financial liabilities, other than derivatives, are subsequently measured at amortised cost, using the effective interest rate method.

Financial guarantee contracts are accounted for as financial instruments and measured initially at estimated fair value. They are subsequently measured at the higher of the amount determined in accordance with IAS 37 “Provisions, contingent liabilities and contingent assets”, and the amount initially recognised less (when appropriate) cumulative amortisation recognised in accordance with IAS 18 “Revenue”.

Foreign currency convertible bonds

Foreign currency convertible bonds issued are accounted for entirely as liabilities. The option component is treated as a derivative liability and carried at fair value with changes in fair value recorded in the income statement. The bond component is carried at amortised cost using the effective interest rate method.

Treasury shares

Own equity instruments which are reacquired or held by subsidiary companies (treasury shares) are deducted from equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the group’s own equity instruments.

Accounting for BEE transactions

Where equity instruments are issued to a BEE party at less than fair value, these are accounted for as share-based payments.

Any difference between the fair value of the equity instrument issued and the consideration received is accounted for as an expense in the income statement.

A restriction on the BEE party to transfer the equity instrument subsequent to its vesting is not treated as a vesting condition, but is factored into the fair value determination of the instrument.

2 Segmental information

AngloGold Ashanti Limited has implemented IFRS 8 “Operating Segments” with effect from 1 January 2009 and this has resulted in a change to the segmental information reported by AngloGold Ashanti Limited. Comparative information has been restated. AngloGold Ashanti Limited’s operating segments are being reported based on the financial information provided to the chief executive officer and the executive management team, collectively identified as the chief operating decision maker. Individual members of the executive management team are responsible for geographic regions of the business.

Group analysis by origin is as follows:

	Net operating assets Restated		Total assets Restated		Capital expenditure Restated
Figures in million	2009	2008	2009	2008	2009	2008
US Dollars
Southern Africa (1)	1,880	1,506	2,713	2,141	405	349
Continental Africa (2) (3)	3,155	1,950	3,838	2,581	178	250
Australasia (4)	342	312	604	1,368	177	439
North America	603	490	723	573	87	27
South America (4)	871	791	1,247	1,098	171	127
Other, including non-gold producing subsidiaries (1)	98	51	739	388	9	9
	6,949	5,100	9,864	8,149	1,027	1,201
Equity accounted investments included above	(567)	(201)	(77)	(89)	(8)	(7)
	6,382	4,899	9,787	8,060	1,019	1,194
SA Rands
Southern Africa (1)	13,979	14,241	20,169	20,241	3,392	2,877
Continental Africa (2) (3)	23,455	18,433	28,539	24,405	1,490	2,059
Australasia (4)	2,542	2,948	4,494	12,936	1,599	3,618
North America	4,484	4,636	5,373	5,422	727	221
South America (4)	6,474	7,479	9,269	10,386	1,430	1,044
Other, including non-gold producing subsidiaries (1)	730	482	5,493	3,661	88	86
	51,664	48,219	73,337	77,051	8,726	9,905
Equity accounted investments included above	(4,214)	(1,903)	(567)	(849)	(70)	(59)
	47,450	46,316	72,770	76,202	8,656	9,846

⁽¹⁾Assets held for sale in respect of Tau Lekoa $71m, R529m are included in the Southern Africa region. Properties held for sale by Rand Refinery of $1m, R10m (2008: $1m, R10m) and exploration interests held for sale in Amikan Holding of $15m, R111m are included in the “Other” segment (note 25).

⁽²⁾Includes equity accounted joint ventures.

⁽³⁾Includes the acquisition during 2009 of an effective 45% interest in the Kibali gold project in the Democratic Republic of the Congo (equity accounted investment).

⁽⁴⁾Includes allocated goodwill of $136m, R1,013m (2008: $105m, R998m) for Australasia and $23m, R165m (2008: $23m, R210m) for South America (note 17).

	Gold production
	(oz ’000)		(kg)
		Restated		Restated
	2009	2008	2009	2008
Southern Africa	1,862	2,167	57,922	67,409
Continental Africa	1,520	1,562	47,278	48,588
Australasia	401	433	12,477	13,477
North America	218	258	6,768	8,016
South America	598	562	18,604	17,468
	4,599	4,982	143,049	154,958

	Gold income
Figures in million	2009	2008	2009	2008
	US Dollars		SA Rands
Geographical analysis of gold income by origin is as follows:
Southern Africa	1,723	1,505	14,114	12,395
Continental Africa	1,377	1,334	11,234	10,902
Australasia	221	280	1,819	2,338
North America	171	240	1,376	1,984
South America	634	446	5,176	3,723
	4,126	3,805	33,719	31,342
Equity accounted investments included above	(358)	(186)	(2,974)	(1,568)
(note 3)	3,768	3,619	30,745	29,774
Geographical analysis of gold income by destination is as follows:
South Africa	1,815	1,370	14,832	11,285
North America	719	1,057	5,878	8,706
Australia	84	7	690	60
Asia	373	255	3,047	2,099
Europe	447	307	3,652	2,532
United Kingdom	688	809	5,620	6,660
	4,126	3,805	33,719	31,342
Equity accounted investments included above	(358)	(186)	(2,974)	(1,568)
(note 3)	3,768	3,619	30,745	29,774

	Gross (loss) profit
Figures in million	2009	2008	2009	2008
	US Dollars		SA Rands
Southern Africa	(251)	390	(1,735)	2,144
Continental Africa	(120)	(50)	(1,019)	(2,778)
Australasia	(168)	8	(1,325)	318
North America	(50)	118	(410)	520
South America	139	81	1,145	375
Other	28	16	244	135
	(422)	563	(3,100)	714
Equity accounted investments included above	(156)	31	(1,309)	225
	(578)	594	(4,409)	939

3 Revenue

2008	2009	Figures in million			2009	2008
SA Rands					US Dollars
		Revenue consists of the following principal categories:
29,774	30,745	Gold income (note 2)			3,768	3,619
480	772	By-products (note 4)			94	58
		Interest received (note 33)
18	112	– loans and receivables (1)			14	2
67	50	– available for sale and held to maturity investments			6	8
451	282	– cash and cash equivalents			34	56
30,790	31,961				3,916	3,743
		(1)	Interest received from loans and receivables comprises:
4	–		–	related parties	–	–
14	112		–	other loans	14	2
18	112				14	2

4 Cost of sales

2008	2009	Figures in million		2009	2008
SA Rands				US Dollars
17,151	18,844	Cash operating costs (1)		2,277	2,081
(480)	(772)	By-products (note 3)		(94)	(58)
16,671	18,072			2,183	2,023
634	699	Royalties		84	78
100	134	Other cash costs		16	12
17,405	18,905	Total cash costs		2,283	2,113
72	110	Retrenchment costs (note 10)		14	9
218	182	Rehabilitation and other non-cash costs		22	28
17,695	19,197	Production costs		2,319	2,150
4,620	4,615	Amortisation of tangible assets (notes 9, 16 and 33)		555	560
21	18	Amortisation of intangible assets (notes 17 and 33)		2	2
22,336	23,830	Total production costs		2,876	2,712
222	(610)	Inventory change		(63)	16
22,558	23,220			2,813	2,728
		(1)	Cash operating costs comprises:
5,902	6,747	– salaries and wages		815	718
4,736	5,316	– stores and other consumables		638	574
3,684	3,019	– fuel, power and water		363	448
2,516	2,971	– contractors		358	305
313	791	– services and other charges		103	36
17,151	18,844			2,277	2,081

5 Other operating expenses

2008	2009	Figures in million	2009	2008
SA Rands			US Dollars
(8)	44	Pension and medical defined benefit provisions	5	2
37	31	Claims filed by former employees in employment, work-related accident diseases, governmental fiscal claims and tailings operations	3	4
–	5	Miscellaneous	–	–
29	80		8	6

6 Operating special items

2008	2009	Figures in million	2009	2008
SA Rands			US Dollars
(198)	219	Indirect tax expenses (reimbursement) (1)	29	(22)
14,792	(5,115)	Net (reversals) impairments of tangible assets (notes 14, 16 and 25)	(683)	1,493
(381)	(420)	Net profit on disposal and abandonment of land, mineral rights, tangible assets and (note 14) (2)	(49)	(52)
–	95	Loss on consignment stock	12	–
–	66	Impairment of Pamodzi Gold debtor	7	–
–	(54)	Insurance claim recovery	(7)	–
1,080	–	Impairment of goodwill (notes 14 and 17)	–	109
76	–	ESOP costs resulting from rights offer (note 11)	–	9
42	–	Impairment of investments (notes 14 and 19 (3))	–	6
26	–	Siguiri royalty payment calculation dispute with the Guinean Administration	–	3
10	–	Contractor termination costs at Iduapriem	–	1
(14)	–	Profit on disposal of investment in Nufcor International Limited (note 14) (4)	–	(2)
(19)	–	Nufcor Uranium Trust contributions by (note 14)	–	(3)
(35)	–	Recovery of exploration costs	–	(4)
15,379	(5,209)		(691)	1,538

⁽¹⁾ Indirect tax expenses (reimbursement) include the following:

• provision for non-recovery of $25m, R183m VAT and fuel duties in Tanzania during 2009. Reversal of provision of $15m, R135m during 2008 following a re-assessment by the Tanzanian Revenue Authority of VAT claimed on the difference between fuel invoiced at the contract rate against the prevailing market rate;
• reversal of provision of $6m, R56m during 2008 following an agreement with the Guinea Revenue Authority on withholding tax; and
• net provision for non-recovery of other indirect tax of $4m, R36m during 2009 (2008: reversal $1m, R7m).

⁽²⁾The net profit on disposal and abandonment of land, mineral rights, tangible assets and exploration properties includes amongst others the following:

• on 26 June 2009 AngloGold Ashanti Limited concluded the sale of its indirect 33.3% joint venture interest in the Boddington Gold Mine in Western Australia to Newmont Mining Corporation resulting in a profit on disposal of $62m, R523m;
• in February 2008, certain North American royalty and production related payment interests of the EI Chante and Marigold projects were sold to Royal Gold resulting in a profit of $14m, R110m;
• on 16 May 2008, AngloGold Ashanti Limited announced that it had completed the transaction with B2Gold Corporation in which B2Gold Corporation acquired from AngloGold Ashanti Limited, additional interests in certain mineral properties in Colombia. In exchange, B2Gold Corporation issued to AngloGold Ashanti Limited, 25m common shares and 21.4m common share purchase warrants in B2Gold Corporation for a profit of $33m, R225m;
• profit from recognition of deferred proceeds during 2008 of $8m, R61m relating to the disposal of the La Rescatada Project situated in South America to Aruntani SAC; and
• loss on disposal and abandonment of land, mineral rights, tangible assets and exploration properties amounted to $13m, R102m (2008: $3m, R15m).

⁽³⁾Impairment of Red 5 Limited shares of $4m, R29m and Dynasty Gold Corporation shares of $2m, R13m during 2008.

⁽⁴⁾On 27 June 2008, AngloGold Ashanti Limited sold its 50% interest in Nufcor International Limited, a London-based uranium marketing, trading and advisory business to Constellation Energy Commodities Group for net proceeds of $48m, R382m and realised a profit of $2m, R14m.

7 Finance costs and unwinding of obligations

2008	2009	Figures in million	2009	2008
SA Rands			US Dollars
417	332	Finance costs on convertible bonds (1)	41	51
141	–	Finance costs on corporate bond (1)	–	18
403	719	Finance costs on bank loans and overdrafts (1)	85	49
10	44	Discounting of long-term trade and other receivables	6	1
27	28	Finance lease charges	3	3
32	38	Other	5	4
1,030	1,161		140	126
(263)	(135)	Amounts capitalised (note 16)	(15)	(32)
767	1,026		125	94
79	59	Unwinding of decommissioning obligation (note 28)	7	10
79	60	Unwinding of restoration obligation (note 28)	7	10
1	1	Unwinding of other provisions (note 28)	–	–
926	1,146	(note 33)	139	114

⁽¹⁾ Finance costs have been determined using the effective interest rate method.

8 Share of equity accounted investments’ profit (loss)

2008	2009	Figures in million	2009	2008
SA Rands			US Dollars
1,677	3,095	Revenue	372	199
(2,025)	(1,887)	Operating expenses	(229)	(244)
(348)	1,208	Gross profit (loss)	143	(45)
30	(12)	Operating special items (note 14) (1)	(1)	3
(26)	(7)	Finance costs	(1)	(3)
(344)	1,189	Profit (loss) before taxation	141	(45)
(444)	(403)	Taxation	(47)	(54)
(788)	786	Profit (loss) after taxation	94	(99)
(389)	(76)	Impairment (note 14) (2)	(10)	(39)
–	75	Reversal of impairment (note 14) (3)	10	–
(1,177)	785	(note 33)	94	(138)

⁽¹⁾ Operating special items include profit on disposal of assets of $0.2m, R2m, and impairments of assets of $0.2m, R1m.

⁽²⁾ In 2009, Amikan Holding Limited, AS APK Limited and Margaret Water Company investments were impaired. Impairments of $10m, R76m were recorded. No deferred tax was raised. In 2008, the Trans-Siberian Gold plc, Morila Limited, Amikan Holding Limited, AS APK Limited and the Margaret Water Company investments were impaired. The impairment tests considered the investment’s fair value and anticipated future cash flows. Impairments of $44m, R440m were recorded. Deferred taxation on impairments amounted to $5m, R51m.

⁽³⁾ In 2009, the Trans-Siberian Gold plc impairment of $10m, R75m was reversed due to the increase in the listed share price.

9 Loss before taxation

2008	2009	Figures in million	2009	2008
SA Rands			US Dollars
		Loss before taxation is arrived at after taking account of:
		Auditors’ remuneration
49	61	– audit fees	7	6
(1)	(3)	– over provision prior year	–	–
13	8	– other assurance services	1	1
61	66		8	7
		Amortisation of tangible assets
4,591	4,589	– owned assets	552	556
29	26	– leased assets	3	4
4,620	4,615	(notes 4, 16 and 33)	555	560
66	91	Grants for educational and community development	11	8
243	280	Operating lease charges	33	30

10 Employee benefits

2008	2009	Figures in million	2009	2008
SA Rands			US Dollars
6,823	7,871	Employee benefits including executive directors’ salaries and other benefits	937	826
		Health care and medical scheme costs
438	492	– current medical expenses	59	53
94	79	– defined benefit post-retirement medical expenses	10	12
		Pension and provident plan costs
403	447	– defined contribution	53	49
(24)	25	– defined benefit pension plan	3	(3)
72	110	Retrenchment costs (note 4)	14	9
329	337	Share-based payment expense (note 11)	41	40
8,135	9,361	Included in cost of sales, other operating expenses, operating special items and corporate administration and other expenses	1,117	986
		Actuarial defined benefit plan expense analysis
		Defined benefit post-retirement medical
6	4	– current service cost	1	1
91	77	– interest cost	9	11
(3)	(2)	– expected return on plan assets	–	–
94	79		10	12
		Defined benefit pension plan
49	51	– current service cost	6	6
144	141	– interest cost	17	17
(217)	(167)	– expected return on plan assets	(20)	(26)
(24)	25		3	(3)
		Actual return on plan assets
(62)	265	– defined benefit pension and medical plans	32	(8)
		Refer to the Remuneration report for details of directors’ emoluments.

11 Share-based payments

Share incentive schemes

No new equity settled share incentive schemes were approved by the shareholders of AngloGold Ashanti Limited during the current financial year. New awards were made under the existing BSP and LTIP plans. ESOP awards that were surrendered by participants during the year were allocated to employees who did not receive their full allocation in 2008. On 28 April 2009 a cash settled share incentive scheme was implemented in Ghana (Ghana ESOP). The total cost relating to share incentive schemes was $41m, R337m (2008: $43m, R355m) and is made up as follows:

2008	2009	Figures in million	2009	2008
SA Rands			US Dollars
59	49	Employee Share Ownership Plan (ESOP) – Free shares	6	7
57	48	Employee Share Ownership Plan (ESOP) – E ordinary shares to employees	6	7
50	–	Employee Share Ownership Plan (ESOP) – Rights offer to employees	–	6
–	16	Ghana Employee Ownership Plan (Ghana ESOP) – Share appreciation rights	2	–
117	174	Bonus Share Plan (BSP)	21	14
46	53	Long-Term Incentive Plan (LTIP)	6	6
329	340	Total employee compensation cost	41	40
–	(3)	Employee compensation cost related to equity accounted joint ventures	–	–
329	337	Total employee compensation cost excluding equity accounted joint ventures (note 10)	41	40
26	–	Rights offer to Izingwe Holdings (Pty) Limited (Izingwe)	–	3
355	337	Total share incentive scheme cost	41	43
		Included in:
176	236	– cost of sales	29	21
103	101	– corporate administration and other expenses	12	13
76	–	– operating special items (note 6)	–	9
355	337		41	43

Equity-Settled Share Incentive Schemes

Employee Share Ownership Plan (ESOP)

On 12 December 2006, AngloGold Ashanti Limited announced the finalisation of the Bokamoso Employee Share Ownership Plan (Bokamoso ESOP) with the National Union of Mineworkers, Solidarity and United Association of South Africa. The Bokamoso ESOP creates an opportunity for AngloGold Ashanti Limited and the unions to ensure a closer alignment of the interest between South African-based employees and the company, and the seeking of shared growth solutions to build partnerships in areas of shared interest. Participation is restricted to those employees not eligible for participation in any other South African Share Incentive Plan.

The company also undertook an empowerment transaction with a Black Economic Empowerment investment vehicle, Izingwe in 2006.

In order to facilitate this transaction the company established a trust to acquire and administer the ESOP shares. AngloGold Ashanti Limited allotted and issued free ordinary shares to the trust and also created, allotted and issued E ordinary shares to the trust for the benefit of employees. The company also created, allotted and issued E ordinary shares to Izingwe. The key terms of the E ordinary shares are:

• AngloGold Ashanti Limited will have the right to cancel the E ordinary shares, or a portion of them, in accordance with the ESOP and Izingwe cancellation formulae, respectively;
• the E ordinary shares will not be listed;
• the E ordinary shares which are not cancelled will be converted into ordinary shares; and
• the E ordinary shares will each be entitled to receive a dividend equal to one-half of the dividend per ordinary share declared by the company from time to time and a further one half is included in the strike price calculation.

The award of free ordinary shares to employees

The fair value of each free share awarded on 1 November each year was as follows:

Award date	2006	2007	2008
Calculated fair value	R320.00	R305.99	R188.48

The fair value is equal to the market value at the date-of-grant. Dividends declared and paid to the trust will accrue and be paid to ESOP members, pro rata to the number of shares allocated to them. An equal number of shares vests from 2009 and each subsequent year up to the expiry date of 1 November 2013.

Accordingly, for the awards issued, the following information is available:

Number of shares	Weighted average exercise price	Figures in million	Number of shares	Weighted average exercise price
2008			2009
910,260	–	Awards outstanding at beginning of year	855,649	–
57,442	–	Awards granted during the year	24,741	–
(54,292)	–	Awards lapsed during the year	(24,741)	–
(57,761)	–	Awards exercised during the year	(189,787)	–
855,649	–	Awards outstanding at end of year	665,862	–
–	–	Awards exercisable at end of year	–	–

Up to 31 December 2009, the rights to a total of 24,741 (2008: 54,292) shares were surrendered by the participants. A total of 56,443 (2008: 57,761) shares were allotted to deceased, retired or retrenched employees. The income statement charge for the year was $6m, R49m (2008: $7m, R59m).

The company awarded the right to acquire approximately one AngloGold Ashanti Limited ordinary share for every four free ordinary shares held during the rights offer finalised in July 2008. The benefit to employees was in terms of the anti-dilution clause of the original grant, therefore no additional compensation cost was recognised.

The award of E ordinary shares to employees

The average fair value per share of the E ordinary shares awarded to employees on 1 November each year was as follows:

Award date	2006	2007	2008
Calculated fair value	R105.00	R79.00	R13.40

Dividends declared in respect of the E ordinary shares will firstly be allocated to cover administration expenses of the trust, whereafter they will accrue and be paid to ESOP members, pro rata to the number of shares allocated to them. At each anniversary over a five year period commencing on the third anniversary of the original 2006 award, the company will cancel the relevant number of E ordinary shares as stipulated by a cancellation formula.

Any E ordinary shares remaining in that tranche will be converted to ordinary shares for the benefit of employees. All unexercised awards will be cancelled on 1 May 2014.

Accordingly, for the E ordinary shares issued, the following information is available:

Number of shares	Weighted average exercise price	Figures in million	Number of shares	Weighted average exercise price
2008			2009
2,730,780	307.49	Awards outstanding at beginning of year	2,566,941	327.15
172,354	323.89	Awards granted during the year	75,449	341.69
(162,904)	315.82	Awards lapsed during the year	(75,449)	334.81
(162,363)	317.93	Awards cancelled during the year	(138,059)	336.55
(10,926)	310.36	Awards converted during the year	(33,884)	333.39
2,566,941	327.15	Awards outstanding at end of year	2,394,998	346.82

The weighted average exercise price is calculated as the initial grant price of R288.00 plus an interest factor less dividend apportionment. This value will change on a monthly basis, to take account of employees leaving the company and those shares being reissued to new employees. The income statement charge for the year was $6m, R48m (2008: $7m, R57m).

Up to 31 December 2009, the rights to a total of 75,449 (2008: 162,904) shares were surrendered by participants. A total of 33,884 (2008: 10,926) E ordinary shares converted into 1,181 ordinary shares and allotted to deceased, retired or retrenched employees. A total of 138,059 (2008: 162,363) shares were cancelled as the result of the exercise price exceeding the share price on conversion date.

In addition to the above share scheme expenses relating to the Bokamoso ESOP plan, the company awarded the right to acquire approximately one AngloGold Ashanti Limited ordinary share for every four E ordinary shares held during the rights offer finalised in July 2008. The benefit to employees was in excess of the anti-dilution clause of the original grant, therefore additional compensation cost was recognised. The fair value at grant date of these rights awarded to Bokamoso was calculated at R76.05. The income statement charge relating to the rights offer to Bokamoso participants was $6m, R50m in 2008. As the rights were issued as fully vested, the expense was recorded immediately.

The award of E ordinary shares to Izingwe

The average fair value of the E ordinary shares granted to Izingwe on 13 December 2006 was R90.00 per share. Dividends declared in respect of the E ordinary shares will accrue and be paid to Izingwe, pro rata to the number of shares allocated to them. At each anniversary over a five year period commencing on the third anniversary of the award, Izingwe has a six month period to instruct the company to cancel the relevant number of E ordinary shares as stipulated by a cancellation formula. Any E ordinary shares remaining in that tranche will be converted to ordinary shares for the benefit of Izingwe. If no instruction is received at the end of the six month period, the cancellation formula will be applied automatically.

Accordingly, for the awards issued, the following information is available.

Number of shares	Weighted average exercise price	Figures in million	Number of shares	Weighted average exercise price
2008			2009
1,400,000	307.49	E ordinary shares outstanding at beginning of year	1,400,000	327.15
–	–	E ordinary shares granted during the year	–	–
–	–	E ordinary shares cancelled during the year	–	–
–	–	E ordinary shares converted during the year	–	–
1,400,000	327.15	E ordinary shares outstanding at end of year	1,400,000	346.82

The weighted average exercise price is calculated as the initial grant price of R288.00 per share plus an interest factor less dividend apportionment. There was no income statement charge for the year as the full amount was expensed in 2006 (2006: $19m, R131m).

In addition to the above share scheme expenses relating to the Izingwe BEE plan, the company awarded the right to acquire approximately one AngloGold Ashanti Limited ordinary share for every four E ordinary shares held during the rights offer finalised in July 2008. The benefit to Izingwe was in excess of the anti-dilution clause of the original grant, therefore additional cost was recognised. The fair value at grant date of these rights awarded to Izingwe was calculated at R76.05. The income statement charge relating to the rights offer to Izingwe was $3m, R26m in 2008. As the rights were issued as fully vested, the expense was recorded immediately.

The fair value of each share granted for the ESOP and Izingwe schemes was estimated on the date of grant using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires the input of subjective assumptions, including the expected term of the option award and share price volatility. Expected volatility is based on the historical volatility of our shares. These estimates involve inherent uncertainties and the application of management judgement. In addition, we are required to estimate the expected forfeiture rate and only recognise expenses for those options expected to vest. As a result, if other assumptions had been used, our recorded share-based compensation expense could have been different from that reported.

The Black-Scholes option-pricing model used the following assumptions, at grant date:

	2006	2007	2008
Risk-free interest rate	7.00%	7.00%	7.00%
Dividend yield	2.30%	2.06%	1.39%
Volatility factor of market share price	36.00%	33.00%	35.00%

Bonus Share Plan (BSP)

The BSP is intended to provide effective incentives to eligible employees. An eligible employee is one who devotes substantially the whole of his working time to the business of AngloGold Ashanti Limited, any subsidiary of AngloGold Ashanti Limited or a company under the control of AngloGold Ashanti Limited, unless the board of directors (the board) excludes such a company. An award in terms of the BSP may be made at any date at the discretion of the board, the only vesting condition being three years’ service for awards granted prior to 2008. For all BSP awards granted from 2008, 40% will vest after one year and the remaining 60% will vest after two years. An additional 20% of the original award will be granted to employees if the full award remains unexercised after three years.

The board is required to determine a BSP award value and this will be converted to a share amount based on the closing price of AngloGold Ashanti Limited’s shares on the JSE on the last business day prior to the date of grant. AngloGold Ashanti Limited’s Remuneration Committee has at its discretion, the right to pay dividends, or dividend equivalents, to the participants of the BSP. Having no history of any discretionary dividend payments, the fair value includes dividends and was used to determine the income statement expense. The fair value is equal to the award value determined by the board.

Additional BSP awards were made to all scheme participants in 2008 as a result of the rights offer made to ordinary shareholders. The award was made in terms of the anti-dilution clause of the original grant. Employees did therefore not receive any benefit in excess of the original grant value and no additional compensation cost was recognised.

Accordingly, for the awards issued, the following information is available:

Award date (unvested awards and awards vested during the year)	2006	2007	2008	2009
Calculated fair value	R308.00	R322.00	R267.05	R293.99
Vesting date (100%)	8 Mar 2009	1 Jan 2010	–	–
Vesting date (40%)	–	–	1 Jan 2009	18 Feb 2010
Vesting date (60%)	–	–	1 Jan 2010	18 Feb 2011
Vesting date (conditional 20%)	–	–	1 Jan 2011	18 Feb 2012
Expiry date	7 Mar 2016	31 Dec 2016	31 Dec 2017	17 Feb 2019

Number of shares	Weighted average exercise price	Figures in million	Number of shares	Weighted average exercise price
2008			2009
685,668	–	Awards outstanding at beginning of year	945,027	–
389,973	–	Awards granted during the year	666,541	–
75,103	–	Awards granted as a result of rights offer	–	–
(90,259)	–	Awards lapsed during the year	(68,988)	–
(115,458)	–	Awards exercised during the year	(246,872)	–
945,027	–	Awards outstanding at end of year	1,295,708	–
136,371	–	Awards exercisable at end of year	242,610

Up to 31 December 2009, the rights to a total of 68,988 (2008: 90,259) shares were surrendered by the participants. A total of 57,420 (2008: 37,479) shares were allotted to deceased, retired or retrenched employees.

The income statement charge for the year was $21m, R174m (2008: $14m, R117m).

Long-Term Incentive Plan (LTIP)

The LTIP is an equity-settled share-based payment arrangement, intended to provide effective incentives for executives to earn shares in the company based on the achievement of stretched company performance conditions. Participation in the LTIP will be offered to executive directors, executive officers/management and selected members of senior management of participating companies. Participating companies include AngloGold Ashanti Limited, any subsidiary of AngloGold Ashanti Limited or a company under the control of AngloGold Ashanti Limited, unless the board excludes such a company.

An award in terms of the LTIP may be granted at any date during the year that the board of AngloGold Ashanti Limited determine and may even occur more than once a year. The board is required to determine an LTIP award value and this will be converted to a share amount based on the closing price of AngloGold Ashanti Limited’s shares on the JSE on the last business day prior to the date of grant. AngloGold Ashanti Limited’s Remuneration Committee has at their discretion the right to pay dividends, or dividend equivalents to the participants of the LTIP. Having no history of any discretionary dividend payments, the fair value includes dividends and was used to determine the income statement expense. The fair value is equal to the award value as determined by the board.

The main performance conditions in terms of the LTIP issued in 2007 and 2006 are:

• up to 40% of an award will be determined by the performance of total shareholder returns (TSR) compared with that of a group of comparative gold-producing companies;
• up to 30% of an award will be determined by adjusted earnings per share compared to planned adjusted earnings per share over the performance period;
• up to 30% of an award will be dependent on the achievement of strategic performance measures which will be set by the Remuneration Committee; and
• three-years’ service is required.

The main performance conditions in terms of the LTIP issued in 2009 and 2008 are:

• up to 30% of an award will be determined by the performance of total shareholder returns (TSR) compared with that of a group of comparative gold-producing companies;
• up to 30% of an award will be determined by real growth (above US inflation) in adjusted earnings per share over the performance period;
• up to 40% of an award will be dependent on the achievement of strategic performance measures which will be set by the Remuneration Committee; and
• three-years’ service is required.

Additional LTIP awards were made to all scheme participants in 2008 as a result of the rights offer made to ordinary shareholders. The award was made in terms of the anti-dilution clause of the original grant. Employees therefore did not receive any benefit in excess of the original grant value and no additional compensation cost was recognised.

Accordingly, for the awards issued, the following information is available:

Award date (unvested awards and awards vested during the year)	2006	2007	2008	2009
Calculated fair value	R327.00	R322.00	R267.05	R293.99
Vesting date	1 Aug 2009	1 Jan 2010	1 Jan 2011	18 Feb 2012
Expiry date	31 Jul 2016	31 Dec 2016	31 Dec 2017	17 Feb 2019

Number of shares	Weighted average exercise price	Figures in million	Number of shares	Weighted average exercise price
2008			2009
783,425	–	Awards outstanding at beginning of year	990,445	–
497,343	–	Awards granted during the year	534,574	–
74,988	–	Awards granted as a result of rights offer	–	–
(321,668)	–	Awards lapsed during the year	(190,085)	–
(43,643)	–	Awards exercised during the year	(71,185)	–
990,445	–	Awards outstanding at end of year	1,263,749	–
64,560	–	Awards exercisable at end of year	72,257	–

The income statement charge for the year was $6m, R53m (2008: $6m, R46m).

Performance-related share-based remuneration scheme – 1 May 2003

The options, if vested, may be exercised at the end of a three-year period commencing 1 May 2003. The share options were granted at an exercise price of R221.90. The performance condition applicable to these options was that the US dollar EPS must increase by at least 6% in real terms, after inflation, over the next three years, in order to vest. As none of the performance criteria were met, in the initial three years, the grantor decided to roll the scheme forward on a ‘roll over reset’ basis, in February 2006, to be reviewed annually. The performance criteria of these options was achieved during 2006. The remaining weighted average contractual life of the options granted is 3.33 years. An employee would only be able to exercise his options after the date upon which he receives written notification from the directors that the previously specified performance criteria have been fulfilled.

As a result of the rights offer to ordinary shareholders, finalised during July 2008, additional options were awarded to existing option holders in terms of the anti-dilution provision of the original grant. As the employees did not receive any benefit in excess of the original grant value, no additional compensation cost was recognised. Approximately one option was awarded for every four held at an exercise price of R194.00.

Number of shares	Weighted average exercise price	Figures in million	Number of shares	Weighted average exercise price
2008			2009
449,900	221.90	Options outstanding at beginning of year	383,791	216.48
83,324	194.00	Options granted as a result of rights issue	–	–
(16,633)	218.63	Options lapsed during the year	(6,232)	216.38
(132,800)	220.69	Options exercised during the year	(199,088)	216.12
–	–	Options expired during the year	–	–
383,791	216.48	Options outstanding at end of year	178,471	216.87
383,791	216.48	Options exercisable at end of year	178,471	216.87

There was no income statement charge for the year, as the total compensation cost was expensed up to the date of vesting in 2006 (2006: $10m, R69m).

Performance-related share-based remuneration scheme – 1 November 2004

The options, if vested, may be exercised at the end of a three-year period commencing 1 November 2004. The share options were granted at an exercise price of R228.00. The performance condition applicable to these options was that US dollar EPS must increase from the 2004 year by at least 6% in real terms, i.e. after inflation, over the following three years in order to vest. The performance criteria was met during 2006. The remaining weighted average contractual life of options granted is 4.83 years. An employee would only be able to exercise his options after the date upon which he has received written notification from the directors that the previously specified performance criteria have been fulfilled.

As a result of the rights offer to ordinary shareholders, finalised during July 2008, additional options were awarded to existing option holders in terms of the anti-dilution provision of the original grant. As the employees did not receive any benefit in excess of the original grant value, no additional compensation cost was recognised. Approximately one option was awarded for every four held at an exercise price of R194.00.

Number of shares	Weighted average exercise price	Figures in million	Number of shares	Weighted average exercise price
2008			2009
672,900	228.00	Options outstanding at beginning of year	548,706	221.33
131,348	194.00	Options granted as a result of rights issue	–	–
(80,886)	221.26	Options lapsed during the year	(7,780)	222.41
(174,656)	226.09	Options exercised during the year	(298,119)	221.36
–	–	Options expired during the year	–	–
548,706	221.33	Options outstanding at end of year	242,807	221.25
548,706	221.33	Options exercisable at end of year	242,807	221.25

There was no income statement charge for the year as the total compensation cost was expensed up to the date of vesting in 2007 (2007: $3m, R23m).

There are currently two equity-settled share incentive schemes that fall outside the transitional provisions of IFRS 2, as the options were granted prior to 7 November 2002. The details of these schemes are as follows:

Performance-related share-based remuneration scheme – 1 May 2002

The share options were granted at an exercise price of R299.50 per share. The performance condition applicable to these options was that US dollar EPS must increase by 7.5% for each of the three succeeding years. On 24 December 2002, AngloGold Ashanti Limited underwent a share split on a 2:1 basis therefore the EPS target was reduced accordingly. As none of the performance criteria was met, in the initial three years, the grantor decided to roll the scheme forward on a ‘roll over reset’ basis, to be reviewed annually. The performance criteria of these options were achieved during 2006. The remaining weighted average contractual life of options granted is 2.33 years. An employee would only be able to exercise his options after the date upon which he receives written notification from the directors that the previously specified performance criteria have been fulfilled.

As a result of the rights offer to ordinary shareholders, finalised during July 2008, additional options were awarded to existing option holders in terms of the anti-dilution provision of the original grant. As the employees did not receive any benefit in excess of the original grant value, no additional compensation cost was recognised. Approximately one option was awarded for every four held at an exercise price of R194.00.

Number of shares	Weighted average exercise price	Figures in million	Number of shares	Weighted average exercise price
2008			2009
515,400	299.50	Options outstanding at beginning of year	457,336	279.64
98,410	194.00	Options granted as a result of rights issue	–	–
(78,819)	294.25	Options lapsed during the year	(10,226)	281.69
(77,655)	288.11	Options exercised during the year	(228,413)	275.90
–	–	Options expired during the year	–	–
457,336	279.64	Options outstanding at end of year	218,697	283.45
457,336	279.64	Options exercisable at end of year	218,697	283.45

Time-related share-based remuneration scheme – granted up to 30 April 2002

Except where the directors at their sole and absolute discretion decide otherwise, a grantee may not exercise his options until after the lapse of a period calculated from the date on which the option was granted. The remaining weighted average contractual life of options granted is 1.12 years. The period in which and the extent to which the options vest and may be exercised are as follows:

• after two years – up to 20% of options granted;
• after three years – up to 40% of options granted;
• after four years – up to 60% of options granted; and
• after five years – up to 100% of options granted.

As a result of the rights offer to ordinary shareholders, finalised during July 2008, additional options were awarded to existing option holders in terms of the anti-dilution provision of the original grant. As the employees did not receive any benefit in excess of the original grant value, no additional compensation cost was recognised. Approximately one option was awarded for every four held at an exercise price of R194.00.

Number of shares	Weighted average exercise price	Figures in million	Number of shares	Weighted average exercise price
2008			2009
206,960	124.69	Options outstanding at beginning of year	116,491	139.82
41,806	194.00	Options granted as a result of rights issue	–	–
(3,942)	194.00	Options lapsed during the year	–	–
(128,333)	124.68	Options exercised during the year	(88,239)	137.75
–	–	Options expired during the year	–	–
116,491	139.82	Options outstanding at end of year	28,252	146.28
116,491	139.82	Options exercisable at end of year	28,252	146.28

No grants were made with respect to the time related scheme options and performance related options since 2005. The options granted during 2008, as a result of the rights offer, carry no additional accounting charge. The value of each option granted during 2002, 2003 and 2004 is estimated on the date of grant using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires the input of subjective assumptions, including the expected term of the option award and share price volatility. The expected term of options granted is derived from historical data on employee exercise and post-vesting employment termination behaviour. Expected volatility is based on the historical volatility of our shares. These estimates involve inherent uncertainties and the application of management’s judgement. In addition, we are required to estimate the expected forfeiture rate and only recognise an expense for those options expected to vest. As a result, if other assumptions had been used, the recorded share-based compensation expense could have been different from that reported.

The Black-Scholes option-pricing model used the following assumptions, at grant date:

	2002	2003	2004
Risk-free interest rate	11.00%	11.00%	8.18%
Dividend yield	4.27%	4.27%	2.27%
Volatility factor of market share price	0.390	0.390	0.300
Weighted average expected life	7 years	7 years	7 years
Calculated fair value	R100.20	R77.76	R94.65

Cash-Settled Share Incentive Scheme

Ghana Employee Share Ownership Plan (Ghana ESOP)

A memorandum of understanding was signed with the Ghanaian employees on 28 April 2009 to usher in the Ghana ESOP under defined rules.

In terms of the rules of the scheme, every eligible employee is entitled to 20 AngloGold Ashanti Limited share appreciation rights (phantom shares), which will be paid out in four equal tranches, commencing in May 2009 and ending in May 2012.

The value of the rights are equal to the value of AngloGold Ashanti Limited American Depositary Receipts (ADRs) as listed on the New York Stock Exchange, converted into Ghanaian Cedis at the prevailing US dollar exchange rate.

The share price on the day of issue as at 29 April 2009 was $32.15, whilst the share price used in the payment of the first tranche was $28.46 per share.

The award of share appreciation rights to employees

Accordingly, for the rights issued, the following information is available:

Number of shares	Weighted average exercise price	Figures in million	Number of shares	Weighted average exercise price
2008			2009
–	–	Rights outstanding at beginning of year	–	–
–	–	Rights granted during the year	100,860	–
–	–	Rights lapsed during the year	(455)	–
–	–	Rights exercised during the year	(25,290)	–
–	–	Rights outstanding at end of year	75,115	–
–	–	Rights exercisable at end of year	–	–

Up to 31 December 2009, a total of 455 share appreciation rights were surrendered by the participants. The income statement charge for the year was $2m, R16m. The liability recognised in the statement of financial position in respect of unexercised rights was $1m, R9m.

12 Taxation

2008	2009	Figures in million			2009	2008
SA Rands					US Dollars
		South African taxation
–	153		Mining tax (1)		19	–
85	89		Non-mining tax (2)		10	12
42	33		Under provision prior year		4	6
			Deferred taxation:
(161)	535			Temporary differences (3)	61	(30)
				Unrealised non-hedge derivatives and other
841	(1,451)			commodity contracts	(181)	89
62	(156)			Change in estimated deferred tax rate (4)	(21)	6
(70)	–			Change in statutory tax rate	–	(9)
799	(797)				(108)	74
		Foreign taxation
651	1,113		Normal taxation (1)		138	79
(41)	(50)		Over provision prior year		(7)	(5)
			Deferred taxation:
(3,747)	1,220			Temporary differences (3)	164	(372)
259	(314)			Unrealised non-hedge derivatives and other commodity contracts	(40)	27
(2,878)	1,969				255	(271)
(2,079)	1,172				147	(197)
		Tax reconciliation
%	%	A reconciliation of the effective tax rate charged in the income statement to the prevailing estimated corporate tax rate is set out in the following table:			%	%
12	(100)		Effective tax rate		(121)	14
			Disallowable items:
8	204			Derivative losses	236	12
2	(23)			Share of equity accounted investments’ profit (loss)	(27)	4
(2)	(3)			Other	(3)	(2)
8	5		Foreign income tax allowances and rate differentials		31	8
–	(39)		Exchange variation and translation adjustments		(68)	–
(1)	–		Current tax assets previously unrecognised		–	(1)
1	10		Current unrecognised tax assets		12	1
–	(13)		Change in estimated deferred tax rate (4)		(17)	(1)
–	(1)		Prior year under provision		(3)	–
7	(5)		Other		(5)	–
35	35		Estimated corporate tax rate (5)		35	35

⁽¹⁾ There was no mining tax charge in 2008 as the mining income was primarily offset by the non-mining losses from the accelerated non-hedge derivative buy-backs. Included in normal foreign taxation is tax on the disposal of tangible assets of $18m, R145m (2008: $1m, R10m) (note 14).

⁽²⁾ In South Africa, non-mining income is taxed at the higher non-mining tax rate of 35% (2008: 35%) as the company has elected to be exempt from STC. Companies who elected to be subject to STC are taxed at the lower company tax rate of 28% (2008: 28%) for non-mining taxation purposes.

⁽³⁾ Included in temporary differences in South African taxation is a tax credit on the impairment and disposal of tangible assets of $8m, R61m (2008: tax credit $8m, R75m). Included in temporary differences of foreign taxation is a tax charge on the impairment reversals and disposal of tangible assets of $190m, R1,421m (2008: tax credit of $387m, R3,840m) (note 14).

⁽⁴⁾ In South Africa the mining operations are taxed on a variable rate that increases as profitability increases. The tax rate used to calculate deferred tax is based on the group’s current estimate of future profitability when temporary differences will reverse. Depending on the profitability of the operations, the tax rate can consequently be significantly different from year to year. The change in the estimated deferred tax rate at which the temporary differences will reverse amounts to a credit of $21m, R156m (2008: tax charge of $6m, R62m).

⁽⁵⁾ Mining tax on mining income in South Africa is determined according to a formula based on profit and revenue from mining operations. The company has elected to be exempt from STC and is taxed at a higher rate of company tax for mining and non-mining income tax purposes.

2008	2009	Figures in million	2009	2008
SA Rands			US Dollars
		All mining capital expenditure is deducted to the extent that it does not result in an assessed loss and depreciation is ignored when calculating the South African mining income. Capital expenditure not deducted from mining income is carried forward as unredeemed capital to be deducted from future mining income. South Africa operates under two tax paying operations, Vaal River Operation and West Wits Operation. Under ring-fencing legislation, each operation is treated separately and deductions can only be utilised against income generated by the relevant tax operation.
		The formula for determining the South African mining tax rate is:
		Y = 43 – 215/X (2008: Y = 43 – 215/X) where Y is the percentage rate of tax payable and X is the ratio of mining profit net of any redeemable capital expenditure to mining revenue expressed as a percentage.
		Unrecognised tax losses
3,204	2,964	Unrecognised tax losses of the US operations which are available for offset against future profits earned in the USA	399	339
1,741	–	Unrecognised tax losses of the Australian operations which are available for offset against future capital gains in Australia	–	184
4,945	2,964		399	523
		Analysis of tax losses
		Tax losses available to be used against future profits
–	943	– utilisation required within one year	127	–
1,240	36	– utilisation required between two and five years	5	131
3,705	1,985	– utilisation in excess of five years	267	392
4,945	2,964		399	523
		Unrecognised tax losses utilised
–	1,741	Assessed losses utilised during the year	184	–

13 Discontinued operations

2008	2009	Figures in million	2009	2008
SA Rands			US Dollars
		The Ergo reclamation surface operation, which formed part of the Southern Africa region, was included under South Africa for segmental reporting, and has been discontinued as the operation had reached the end of its useful life and the assets were no longer in use. The pretax gain on disposal of $27m, R218m recorded in 2008 related to the remaining moveable and immovable assets of Ergo, that were sold by AngloGold Ashanti Limited to ERGO Mining (Pty) Limited, a joint venture between Mintails South Africa (Pty) Limited and DRD South African Operations (Pty) Limited.
		The results of Ergo are presented below:
–	–	Gold income	–	–
(49)	–	Cost of sales	–	(6)
32	–	Reversal of environmental provision	–	4
(17)	–	Gross loss	–	(2)
9	–	Other income	–	1
(8)	–	Loss before taxation	–	(1)
(17)	–	Normal taxation (note 32)	–	(2)
(1)	–	Deferred taxation (note 30)	–	–
(26)	–	Net loss after taxation	–	(3)
218	–	Profit on disposal of assets (note 14)	–	27
6	–	Deferred taxation (notes 14 and 30)	–	1
224	–		–	28
198	–	Profit from discontinued operations	–	25

14 Earnings per ordinary share

2008	2009	Figures in million	2009	2008
SA Cents			US Cents
		Basic (loss) profit per ordinary share
(5,140)	(765)	Continuing operations	(89)	(385)
		The calculation of basic loss per ordinary share is based on losses attributable to equity shareholders of $320m, R2,762m (2008: losses of $1,220m, R16,303m) and 361,228,295 (2008: 317,203,948) shares being the weighted average number of ordinary shares in issue during the financial year.
63	–	Discontinued operations	–	8
		There was no profit or loss from discontinued operations for the year (2008: profits of $25m, R198m and weighted average number of ordinary shares in issue of 317,203,948).
		Diluted (loss) profit per ordinary share
(5,140)	(765)	Continuing operations	(89)	(385)
		The calculation of diluted loss per ordinary share is based on losses attributable to equity shareholders of $320m, R2,762m (2008: losses of $1,220m, R16,303m) and 361,228,295 (2008: 317,203,948) shares being the diluted number of ordinary shares. In 2008 and 2009, no adjustment was made since the effect is anti-dilutive.
63	–	Discontinued operations	–	8
		There was no profit or loss from discontinued operations for the year (2008: profits of $25m, R198m and weighted average number of ordinary shares in issue of 317,203,948). In 2008, no adjustment was made since the effect is anti-dilutive.

	2009	2008
	Number of shares
In calculating the diluted number of ordinary shares outstanding for the year, the following were taken into consideration:
Ordinary shares	356,563,773	312,610,124
E ordinary shares (1)	3,873,169	4,046,364
Fully vested options (2)	791,353	547,460
Weighted average number of shares	361,228,295	317,203,948
Dilutive potential of share options (3)	–	–
Diluted number of ordinary shares	361,228,295	317,203,948

⁽¹⁾ As E ordinary shares participate in the profit available to ordinary shareholders, these shares were included in basic earnings per share.

⁽²⁾ Employee compensation awards, are included in basic earnings per share from the date that all necessary conditions have been satisfied and it is virtually certain that shares will be issued as a result of employees exercising their options.

⁽³⁾ The calculation of diluted earnings per share did not take into account the effect of 1,234,858 (2008: 872,373) shares, issuable on share awards as the effect of this was anti-dilutive for this period

The calculation of diluted earnings per share did not take into account the effect of 15,384,615 (2008: 15,384,615) shares, issuable upon the exercise of convertible bonds, as the effect of this was anti-dilutive for this period.

2008	2009	Figures in million	2009	2008
SA Rands			US Dollars
		Headline loss
		The loss attributable to equity shareholders was adjusted by the following to arrive at headline loss:
(16,105)	(2,762)	Loss attributable to equity shareholders	(320)	(1,195)
14,792	(5,115)	Net (reversals) impairments of tangible assets (notes 6, 16 and 25)	(683)	1,493
1,080	–	Impairment of goodwill (notes 6 and17)	–	109
42	–	Impairment of investments (notes 6 and 19)	–	6
(381)	(420)	Net profit on disposal and abandonment of assets (note 6)	(49)	(52)
(19)	–	Nufcor Uranium Trust contributions by other members (note 6)	–	(3)
(14)	–	Profit on disposal of investment in associate (note 6)	–	(2)
389	76	Impairment of investment in associates and joint ventures (note 8)	10	39
–	(75)	Reversal of impairment in associates (note 8)	(10)	–
(30)	1	Operating special items of associates (note 8)	–	(3)
		Taxation on items above
10	145	– current portion (note 12)	18	1
(3,915)	1,360	– deferred portion (note 12)	182	(395)
(218)	–	Profit on disposal of discontinued assets (note 13)	–	(27)
(6)	–	Discontinued operations taxation on item above (note 13)	–	(1)
(4,375)	(6,790)		(852)	(30)
		Cents per share
		Headline loss removes items of a capital nature from the calculation of earnings per share, calculated in accordance with Circular 3/2009 issued by the South African Institute of Chartered Accountants (SAICA).
(1,379)	(1,880)	The calculation of headline loss per ordinary share is based on headline losses of $852m, R6,790m (2008: $30m, R4,375m) and 361,228,295 (2008: 317,203,948) shares being the weighted average number of ordinary shares in issue during the year.	(236)	(9)

15 Dividends

2008	2009	Figures in million	2009	2008
SA Rands			US Dollars
		Ordinary shares
147	–	No. 103 of 53 SA cents per ordinary share was declared on 6 February 2008 and paid on 7 March 2008 (7 US cents per share).	–	18
175	–	No. 104 of 50 SA cents per ordinary share was declared on 30 July 2008 and paid on 29 August 2008 (6 US cents per share).	–	23
–	177	No. 105 of 50 SA cents per ordinary share was declared on 6 February 2009 and paid on 13 March 2009 (5 US cents per share).	18	–
–	213	No. 106 of 60 SA cents per ordinary share was declared on 29 July 2009 and paid on 28 August 2009 (8 US cents per share).	27	–
1	–	No. E3 of 26.5 SA cents per E ordinary share was declared on 6 February 2008 and paid on 7 March 2008 (3.5 US cents per share).	–	–
1	–	No. E4 of 25 SA cents per E ordinary share was declared on 30 July 2008 and paid on 29 August 2008 (3 US cents per share).	–	–
–	1	No. E5 of 25 SA cents per E ordinary share was declared on 6 February 2009 and paid on 13 March 2009 (2.5 US cents per share).	–	–
–	1	No. E6 of 30 SA cents per E ordinary share was declared on 29 July 2009 and paid on 28 August 2009 (4 US cents per share).	–	–
324	392		45	41
		No. 107 of 70 SA cents per ordinary share was declared on 16 February 2010 and will be paid on 19 March 2010 (approximately 9 US cents per share). The actual rate of payment will depend on the exchange rate on the date of currency conversion.
		No. E7 of 35 SA cents per E ordinary share was declared on 16 February 2010 and will be paid on 19 March 2010 (approximately 4.5 US cents per share). The actual rate of payment will depend on the exchange rate on the date of currency conversion.

16 Tangible assets

Figures in million	Mine development costs	Mine infrastructure	Mineral rights and dumps	Exploration and evaluation assets	Assets under construction (1)	Land and buildings	Total
US Dollars
Cost
Balance at 1 January 2008	5,882	2,639	1,050	55	464	64	10,154
Additions
– project capital	135	9	31	–	485	–	660
– stay-in-business capital	307	148	–	–	83	2	540
Disposals	(2)	(17)	–	(25)	–	–	(44)
Transfers and other movements (2)	(90)	(64)	21	–	(790)	(3)	(926)
Finance costs capitalised (note 7)	5	–	–	–	27	–	32
Translation	(914)	(220)	(38)	–	(40)	(13)	(1,225)
Balance at 31 December 2008	5,323	2,495	1,064	30	229	50	9,191
Accumulated amortisation
Balance at 1 January 2008	2,176	1,258	97	–	–	2	3,533
Amortisation for the year
(notes 4, 9 and 33)	358	187	13	–	–	2	560
Impairments (notes 6 and 14) (3)	683	26	756	30	–	–	1,495
Impairments reversal (notes 6 and 14) (4)	(2)	–	–	–	–	–	(2)
Disposals	(2)	(12)	–	–	–	–	(14)
Transfers and other movements (2)	(62)	(111)	9	–	–	–	(164)
Translation	(425)	(121)	(15)	–	–	(1)	(562)
Balance at 31 December 2008	2,726	1,227	860	30	–	3	4,846
Net book value at 31 December 2008	2,597	1,268	204	–	229	47	4,345
Cost
Balance at 1 January 2009	5,323	2,495	1,064	30	229	50	9,191
Additions
– project capital	122	5	–	–	289	–	416
– stay-in-business capital	394	125	–	1	81	1	602
Disposals	(1)	(11)	–	–	–	–	(12)
Transfers and other movements (2)	(134)	161	(18)	–	(373)	3	(361)
Finance costs capitalised (note 7)	4	–	–	–	11	–	15
Translation	737	148	32	–	14	8	939
Balance at 31 December 2009	6,445	2,923	1,078	31	251	62	10,790
Accumulated amortisation
Balance at 1 January 2009	2,726	1,227	860	30	–	3	4,846
Amortisation for the year
(notes 4, 9 and 33)	366	177	10	–	–	2	555
Impairments (notes 6, 14 and 25) (3)	3	4	–	–	–	–	7
Impairments reversal
(notes 6, 14 and 25) (4)	(348)	–	(369)	–	–	–	(717)
Disposals	(1)	(10)	–	–	–	–	(11)
Transfers and other movements (2)	(163)	(5)	(7)	–	–	–	(175)
Translation	373	76	16	–	–	1	466
Balance at 31 December 2009	2,956	1,469	510	30	–	6	4,971
Net book value at 31 December 2009	3,489	1,454	568	1	251	56	5,819
SA Rands
Cost
Balance at 1 January 2008	40,062	17,975	7,153	372	3,160	435	69,157
Additions
– project capital	1,108	74	259	–	4,000	3	5,444
– stay-in-business capital	2,536	1,221	–	–	683	12	4,452
Disposals	(14)	(140)	(4)	(205)	–	(3)	(366)
Transfers and other movements (2)	(735)	(531)	170	–	(6,520)	(26)	(7,642)
Finance costs capitalised (note 7)	38	–	–	–	225	–	263
Translation	7,336	4,992	2,481	114	619	51	15,593
Balance at 31 December 2008	50,331	23,591	10,059	281	2,167	472	86,901
Accumulated amortisation
Balance at 1 January 2008	14,819	8,572	660	–	–	11	24,062
Amortisation for the year
(notes 4, 9 and 33)	2,955	1,544	104	–	–	17	4,620
Impairments (notes 6 and 14) (3)	6,772	258	7,494	291	–	–	14,815
Impairments reversal (notes 6 and 14) (4)	(23)	–	–	–	–	–	(23)
Disposals	(13)	(100)	–	–	–	–	(113)
Transfers and other movements (2)	(511)	(913)	70	–	–	–	(1,354)
Translation	1,784	2,240	(199)	(13)	–	1	3,813
Balance at 31 December 2008	25,783	11,601	8,129	278	–	29	45,820
Net book value at 31 December 2008	24,548	11,990	1,930	3	2,167	443	41,081
Cost
Balance at 1 January 2009	50,331	23,591	10,059	281	2,167	472	86,901
Additions
– project capital	1,024	43	–	–	2,424	–	3,491
– stay-in-business capital	3,302	1,047	–	8	683	4	5,044
Disposals	(9)	(95)	–	–	–	(1)	(105)
Transfers and other movements (2)	(1,120)	1,349	(156)	–	(3,245)	28	(3,144)
Finance costs capitalised (note 7)	33	–	–	–	102	–	135
Translation	(5,644)	(4,199)	(1,891)	(60)	(267)	(41)	(12,102)
Balance at 31 December 2009	47,917	21,736	8,012	229	1,864	462	80,220
Accumulated amortisation
Balance at 1 January 2009	25,783	11,601	8,129	278	–	29	45,820
Amortisation for the year
(notes 4, 9 and 33)	3,048	1,469	82	–	–	16	4,615
Impairments (notes 6, 14 and 25) (3)	22	28	–	–	–	–	50
Impairments reversal
(notes 6, 14 and 25) (4)	(2,601)	–	(2,764)	–	–	–	(5,365)
Disposals	(7)	(85)	–	–	–	–	(92)
Transfers and other movements (2)	(1,363)	(44)	(56)	–	–	–	(1,463)
Translation	(2,906)	(2,043)	(1,600)	(59)	–	–	(6,608)
Balance at 31 December 2009	21,976	10,926	3,791	219	–	45	36,957
Net book value at 31 December 2009	25,941	10,810	4,221	10	1,864	417	43,263

Included in the amounts for mine infrastructure are assets held under finance leases with a net book value of $17m, R126m (2008: $5m, R45m). Included in land and buildings are assets held under finance leases with a net book value of $27m, R201m (2008: $23m, R218m).

The majority of the leased assets are pledged as security for the related finance lease.

No assets are encumbered by project finance.

The weighted average capitalisation rate used to determine the amount of borrowing costs eligible for capitalisation is 4.10% (2008: 8.17%).

A register containing details of properties is available for inspection by shareholders or their duly authorised agents during business hours at the registered office of the company.

⁽¹⁾ Assets under construction account for the expenditures recognised in the carrying amount of property, plant and equipment in the course of its construction. The 2008 amounts were reclassified to include the effect of separate disclosure to enhance disclosure of tangible assets.

⁽²⁾ Transfers and other movements comprise amounts from deferred stripping, change in estimates of decommissioning assets, asset reclassifications and transfers to/from non-current assets held for sale.

In 2009 transfers to/from non-current assets held for sale comprise:

• assets with a net book value of $84m, R704m relating to Tau Lekoa were transferred to non-current assets held for sale.
• assets with a net book value of $145m, R1,335m relating to the 33.33% joint venture interest in Boddington Gold Mine were transferred to non-current assets held for sale.

In 2008 transfers to/from non-current assets held for sale comprise:

• assets with a net book value of $672m, R6,355m relating to the 33.33% joint venture interest in Boddington Gold Mine were transferred to non-current assets held for sale.
• assets with a net book value of $3m, R22m relating to the discontinued operations were transferred to non-current assets held for sale and disposed of during 2008.
• assets with a net book value of $13m, R100m relating to Weltevreden were transferred from non-current assets held for sale to tangible assets held for use.

⁽³⁾ Impairments include the following:

South Africa

Below 120 level at TauTona – mine development costs

Due to a change in the mine plan resulting from safety-related concerns following seismic activity, a portion of the below 120 level development had been abandoned and will not generate future cash flows. During 2008, an impairment loss of $16m, R159m was recognised.

Tanzania

Geita mine – cash generating unit
The 2008 impairment was due to a combination of factors such as the lower gold price, higher discount rates and a change in the mine plan revised mainly due to a reduction in reserves resulting from resource model changes, grade factors and an increase in the cost of extraction. As a result, Geita’s recoverable amount did not support its carrying value in 2008 and an impairment loss was recognised of $427m, R4,229m consisting of mine development of $144m, R1,429m and mineral rights and dumps of $283m, R2,800m. The recoverable amount was determined using a real pre-tax discount rate of 11.5% and was based on the impairment assumptions detailed below.

Ghana

• An impairment of the Obuasi mine arose as follows:
  During 2008, the reserve power plant which was allocated to mine infrastructure had been placed on care and maintenance pending handover to the Volta Regional Authority in 2009 and the abandoned shaft infrastructure was impaired by $15m, R145m.
The Obuasi cash generating unit impairment was the result of factors such as the lower gold price, higher discount rates and a revised mine plan which incorporated changes in the cost of extraction due to the higher cost of power experienced recently in Ghana. As a result, Obuasi’s recoverable amount did not support its carrying value in 2008 and an impairment loss was recognised of $815m, R8,077m consisting of mine development of $340m, R3,367m and for mineral rights and dumps of $475m, R4,710m. The recoverable amount was determined using a real pre-tax discount rate of 9% and was based on the impairment assumptions detailed below.


• An impairment of the Iduapriem mine arose as follows:
  The reserve power plant which was allocated to mine infrastructure had been placed on care and maintenance pending handover to the Volta Regional Authority in 2009. During 2008, $3m, R33m was recognised as an impairment loss.
  
  The Iduapriem cash generating unit impairment was the result of factors such as the lower gold price, higher discount rates and a revised mine plan which incorporated changes in the cost of extraction due to the higher cost of power experienced recently in Ghana. As a result, Iduapriem’s recoverable amount did not support its carrying value in 2008 and an impairment loss of $181m, R1,791m was recognised for mine development. The recoverable amount was determined using a real pretax discount rate of 8.8% and was based on the impairment assumptions detailed below.

Guinea

Siguiri mine – mine infrastructure
The heap leaching process was abandoned due to the lower recoveries and deteriorated condition of the stacking pads. During 2008, the remaining heap leach infrastructure was impaired by $7m, R68m.

Democratic Republic of the Congo

Exploration assets – exploration and evaluation assets
During 2008, with the volatile political environment in the Democratic Republic of the Congo, commercial exploitation in the near term appeared unlikely and the mineral right value was impaired by $29m, R292m.

Impairment of various minor tangible assets and equipment $7m, R50m (2008: $2m, R21m).

⁽⁴⁾ Impairment reversal includes the following:

South Africa

East of Bank Dyke at TauTona – mine development cost
Due to a re-assessment of the mine plan, the East of Bank Dyke access development had become economically viable. The increased gold price will generate future cash flows, and as a result, the impairment raised during 2005 was partially reversed by $2m, R23m during 2008.

Tanzania

Geita mine – cash generating unit
The Geita mine impairment recognised in 2008 was partially reversed. The impairment reversal was largely due to an increase in the long term real gold price resulting in increased future discounted cash flows. As a result, Geita’s recoverable amount exceeded its carrying value in 2009 and an impairment reversal was recognised of $261m, R1,954m consisting of mine development of $106m, R793m and mineral rights and dumps of $155m, R1,161m. The recoverable amount was determined using a real pre-tax discount rate of 13.6% (2008: 11.5%) and was based on the impairment assumptions detailed below.

Ghana

• An impairment reversal of the Obuasi mine arose as follows:

The Obuasi mine impairment recognised in 2008 was partially reversed. The impairment reversal was largely due to an increase in the long term real gold price resulting in increased future discounted cash flows. As a result, Obuasi’s recoverable amount exceeded its carrying value in 2009 and an impairment reversal was recognised of $373m, R2,790m consisting of mine development of $159m, R1,187m and mineral rights and dumps of $214m, R1,603m. The recoverable amount was determined using a real pre-tax discount rate of 8.4% (2008: 9%) and was based on the impairment assumptions detailed below.


• An impairment reversal of the Iduapriem mine arose as follows:

The Iduapriem mine impairment recognised in 2008 was partially reversed. The impairment reversal was largely due to an increase in the long term real gold price resulting in increased future discounted cash flows. As a result, Iduapriem’s recoverable amount exceeded its carrying value in 2009 and an impairment reversal was recognised of $83m, R621m consisting of mine development. The recoverable amount was determined using a real pre-tax discount rate of 13.4% (2008: 8.8%) and was based on the impairment assumptions detailed below.

The impairments/reversals relate to mining properties, mine development costs and mine plant facilities, and have been recognised in operating special items (note 6). The recoverable amount was determined by reference to value in use at an individual mine level.

Impairment calculation assumptions – tangible assets and goodwill

Management assumptions for the value in use of tangible assets and goodwill include:

• the gold price assumption represents management’s best estimate of the future price of gold. In arriving at an estimated long-term gold price, management considered all available market information, including current prices, historical averages and forward-pricing curves. A long-term real gold price of $906/oz (2008: $817/oz) is based on a range of economic and market conditions that will exist over the remaining useful life of the assets.

Annual life of mine plans take into account the following:

• proved and probable Ore Reserve as included in the Mineral Resource and Ore Reserve.
• value beyond proved and probable reserves (including exploration potential) determined using the gold price assumption referred to above;
• the real pre-tax discount rate is derived from the group’s weighted average cost of capital (WACC) and risk factors which is consistent with the basis used in 2008. The WACC of 6.4% which is 83 basis points higher than in 2008 of 5.57%, is based on the average capital structure of the group and three major gold companies considered to be appropriate peers. The risk factors considered are country risk as well as project risk for cash flows relating to mines that are not yet in production and deep level mining projects. The country risk factor is based on the group’s internal assessment of country risk relative to the issues experienced in the countries in which it operates and explores;
• foreign currency cash flows translated at estimated forward exchange rates and then discounted using appropriate discount rates for that currency;
• cash flows used in impairment calculations are based on life of mine plans which exceed five years for the majority of the mines; and
• variable operating cash flows are increased at local Consumer Price Index rates.

The group reviews and tests the carrying value of assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. In addition, goodwill is tested on an annual basis for impairment. Assets are grouped at the lowest level for which identifiable cash flows are largely independent of cash flows of other assets and liabilities. If there are indications that impairment may have occurred, estimates are prepared of expected future cash flows for each group of assets. Expected future cash flows used to determine the value in use of goodwill and tangible assets are inherently uncertain and could materially change over time. The cash flows are significantly affected by a number of factors including reserves and production estimates, together with economic factors such as spot gold prices, discount rates, foreign currency exchange rates, estimates of costs to produce reserves and future capital expenditure.

Should management’s estimate of the future not reflect actual events, further impairments may be identified. Factors affecting the estimates include:

• changes in proved and probable Ore Reserve as well as value beyond proved and probable reserves;
• the grade of Ore Reserve as well as value beyond proved and probable reserves may vary significantly from time to time;
• differences between actual commodity prices and commodity price assumptions;
• unforeseen operational issues at mine sites; and
• changes in capital, operating mining, processing and reclamation costs and foreign exchange rates.

Based on an analysis carried out by the group, the carrying value and value in use of cash generating units that are most sensitive to a 5% movement in gold price, ounces, costs and discount rate assumptions are:

Carrying value	Value in use	Figures in million	Carrying value	Value in use
SA Rands		2009	US Dollars
8,669	8,669	Obuasi	1,166	1,166
6,978	6,978	Geita Gold Mining Limited	939	939
2,126	2,126	Iduapriem	286	286
		2008
7,923	7,923	Obuasi	838	838
6,741	6,741	Geita Gold Mining Limited	713	713
4,746	6,184	AngloGold Ashanti Brasil Mineração (5)	502	654
1,494	1,494	Iduapriem	158	158
1,068	1,428	Serra Grande (5)	113	151
378	1,711	Navachab	40	181

Should any of the assumptions used change adversely and the impact not be mitigated by a change in other factors, this could result in an impairment of the above assets.

It is impracticable to disclose the extent of the possible effects of changes in assumptions for the future gold price and hence life of mine plans at 31 December 2009 because these assumptions and others used in impairment testing of tangible assets and goodwill are inextricably linked. In addition, for those mines with a functional currency other than the US dollar, movements in the US dollar exchange rate will also be a critical factor in determining life of mine and production plans.

Therefore it is possible, that outcomes within the next financial year that are different from the assumptions used in the impairment testing process for goodwill and tangible assets could require a material adjustment to the carrying amounts disclosed at 31 December 2009.

⁽⁵⁾ The carrying value includes goodwill of $15m, R106m (2008: $15m, R135m) at AngloGold Ashanti Brasil Mineração and $8m, R59m (2008: $8m, R75m) at Serra Grande (note 17).

17 Intangible assets

2008	2009	Figures in million	2009	2008
SA Rands			US Dollars
		Goodwill
		Cost
3,965	3,461	Balance at beginning of year	366	582
(1,356)	–	Transferred to assets held for sale (1)	–	(148)
852	(432)	Translation	42	(68)
3,461	3,029	Balance at end of year	408	366
		Accumulated amortisation and impairment losses
1,258	2,253	Balance at beginning of year	238	184
(358)	–	Transferred to assets held for sale (1)	–	(43)
1,080	–	Impairment of goodwill (notes 6 and 14) (2)	–	109
273	(402)	Translation	11	(12)
2,253	1,851	Balance at end of year	249	238
1,208	1,178	Net book value	159	128
		Net carrying amount allocated to each of the cash generating units:
998	1,013	Sunrise Dam	136	105
135	106	AngloGold Ashanti Brasil Mineração	15	15
75	59	Serra Grande	8	8
1,208	1,178		159	128
		Real pre-tax discount rates applied in impairment calculations on cash generating units (CGUs) for which the carrying amount of goodwill is significant are as follows:
		Sunrise Dam (3)	9.9%	11.0%
		(1) Goodwill allocated to Boddington joint venture of $105m, R998m was reclassified to assets held for sale during 2008. (2) Goodwill has been allocated to its respective CGUs where it is tested for impairment as part of the CGU (note 16). The group reviews and tests the carrying value of goodwill on an annual basis for impairment. Following the impairment review, goodwill to the value of $109m, R1,080m at Geita Gold Mining Limited was impaired utilising a real pre-tax discount rate of 11.5% during 2008. (3) The discount rates for 2009 were calculated on a basis consistent with the 2008 discount rates.
		Royalty, tax rate concession and other
		Cost
335	472	Balance at beginning of year	49	49
6	–	Additions	–	–
131	(101)	Translation	–	–
472	371	Balance at end of year	49	49
		Accumulated amortisation and impairment losses
183	277	Balance at beginning of year	29	27
21	18	Amortisation (notes 4 and 33)	2	2
73	(62)	Translation	–	–
277	233	Balance at end of year	31	29
195	138	Net book value	18	20
1,403	1,316	Total intangible assets	177	148
		The government of Ghana agreed to a concession on the royalty payments by maintaining a rate of 3% for 15 years from 2004.
		The tax rate concession was granted at a rate of 30% for the Ashanti business combination in 2004. During 2005, the corporate tax rate in Ghana decreased to 25% and the tax rate concession, which expires in 2019, was fully impaired.

⁽¹⁾ Goodwill allocated to Boddington joint venture of $105m, R998m was reclassified to assets held for sale during 2008.

⁽²⁾ Goodwill has been allocated to its respective CGUs where it is tested for impairment as part of the CGU (note 16). The group reviews and tests the carrying value of goodwill on an annual basis for impairment. Following the impairment review, goodwill to the value of $109m, R1,080m at Geita Gold Mining Limited was impaired utilising a real pre-tax discount rate of 11.5% during 2008.

⁽³⁾ The discount rates for 2009 were calculated on a basis consistent with the 2008 discount rates.

18 Investments in associates and equity accounted joint ventures

2008	2009	Figures in million	2009	2008
SA Rands			US Dollars
		The carrying value of investments in associates and equity accounted joint ventures can be analysed as follows:
377	117	Carrying value of investment in associates	16	40
15	17	Loans advanced to associates (1)	2	2
2,394	4,587	Carrying value of investment in equity accounted joint ventures	617	253
28	37	Loans advanced to equity accounted joint ventures (2)	5	3
2,814	4,758	Investment in associates and equity accounted joint ventures	640	298

⁽¹⁾ Loans advanced to associates consist of $1.6m, R12m (2008: $2m, R15m) to Oro Group (Pty) Limited and $0.6m, R5m (2008: nil) to Orpheo (Pty) Limited. The Oro loan bears interest at a rate determined by the Oro Group (Pty) Limited's board of directors and is repayable at their discretion. The Orpheo (Pty) Limited loan is unsecured, interest free and there are no fixed terms of repayment.

⁽²⁾ Loans advanced to equity accounted joint ventures consist of $3m, R25m (2008: $3m, R28m) to the AGA-Polymetal Strategic Alliance and $2m, R12m (2008: nil) to AuruMar (Pty) Limited. The AGA-Polymetal Strategic Alliance loan is interest free and is repayable on demand, only once profits have been generated. There are no fixed terms for the repayment on the AuruMar (Pty) Limited loan.

In 2009, the Amikan Holding Limited, AS APK Limited and Margaret Water Company investments were impaired and the Trans- Siberian Gold plc impairment was reversed. In 2008, the Trans-Siberian Gold plc, Soci?t? des Mines de Morila S.A., Amikan Holding Limited, AS APK Limited and Margaret Water Company investments were impaired. The impairment tests considered the investment's fair value and anticipated future cash flows. Impairments of $10m, R76m (2008: $44m, R440m) were recorded. An impairment reversal of $10m, R75m was recorded. In 2009, no deferred taxation on impairments was raised (2008: $5m, R51m).

	2009	2008
	Effective
Name	%	%	Description
Oro Group (Pty) Limited (1)	25	25	Manufacture and wholesale of jewellery.
Margaret Water Company	33.3	33.3	Pumping of underground water in the Vaal River Region.
Orpheo (Pty) Limited	33.3	–	Design, manufacture and wholesale of jewellery.
Wonder Wise Holdings Limited	25	–	Marketing and wholesale of jewellery.
Trans-Siberian Gold plc (1) (2)	29.7	29.7	Exploration and development of gold mines.
B2Gold Corporation (3)	–	15.4	Mineral exploration.

⁽¹⁾ Equity accounting is based on results to 30 September 2009, adjusted for material transactions.

⁽²⁾ At 31 December 2009, the fair value of our investment in Trans-Siberian Gold plc was $12m, R89m (2008: $5m, R43m).

⁽³⁾ As a result of not meeting the significant influence criteria, during June 2009 the group transferred its interest in B2Gold Corporation (listed on the Toronto Stock Exchange), to other investments (note 19). B2Gold Corporation was equity accounted up to the date of transfer.

Summarised financial information of equity accounted associates is as follows (not attributable):

2008	2009	Figures in million	2009	2008
SA Rands			US Dollars
		Statement of financial position
1,596	661	Non-current assets	89	169
1,199	328	Current assets	44	127
2,795	989	Total assets	133	296
183	129	Non-current liabilities	17	19
280	166	Current liabilities	23	30
463	295	Total liabilities	40	49
2,332	694	Net assets	93	247
		Income statement
475	521	Revenue	62	58
(537)	(780)	Costs and expenses	(94)	(64)
(6)	(3)	Taxation	–	(1)
(68)	(262)	Loss after taxation	(32)	(7)

Investments in equity accounted joint ventures comprises:

	2009	2008
	Effective
Name	%	%	Description
Kibali Goldmines s.p.r.l.	45	–	Exploration and development of gold mines.
Société des Mines de Morila S.A.	40	40	Commercial exploitation of gold.
Société d’Exploitation des Mines d’Or de Sadiola S.A. (1)	41	38	Commercial exploitation of gold.
Société d’Exploitation des Mines d’Or de Yatela S.A.	40	40	Commercial exploitation of gold.
AGA-Polymetal Strategic Alliance (2)	50	50	Exploration and development of gold mines.
AuruMar (Pty) Limited	50	–	Global exploration of marine deposits containing gold as the primary mineral.

⁽¹⁾ Effective 29 December 2009, AngloGold Ashanti Limited increased its holding in Soci?t? d'Exploitation des Mines d’Or de Sadiola S.A. from 38% to 41%.

⁽²⁾ Equity accounting is based on results to 30 September 2009, adjusted for material transactions. The AGA-Polymetal Strategic Alliance consists of the AGA-Polymetal Strategic Alliance Management Company, Amikan Holding Limited, AS APK Holdings Limited, Imizoloto Holdings Limited and Yeniseiskaya Holdings Limited. During December 2009, Amikan Holding Limited was transferred to non-current assets and liabilities held for sale (note 25).

During 2008 the group sold its 50% interest in Nufcor International Limited, which is involved in the trading of uranium and uranium related services. Equity accounting for 2008 was based on results to 30 June 2008 being the date of the sale.

Summarised financial information of equity accounted joint ventures is as follows (not attributable):

2008	2009	Figures in million	2009	2008
SA Rands			US Dollars
		Statement of financial position
4,449	4,428	Non-current assets	596	471
3,932	3,304	Current assets	445	416
8,381	7,732	Total assets	1,041	887
1,553	897	Non-current liabilities	121	164
1,485	806	Current liabilities	108	157
3,038	1,703	Total liabilities	229	321
5,343	6,029	Net assets	812	566
		Income statement
4,001	7,367	Revenue	912	475
(4,953)	(4,284)	Costs and expenses	(534)	(596)
(1,122)	(998)	Taxation	(121)	(136)
(2,074)	2,085	Profit (loss) after taxation	257	(257)

19 Other investments

2008	2009	Figures in million	2009	2008
SA Rands			US Dollars
		Listed investments
		Available for sale
226	162	Balance at beginning of year	17	34
43	75	Additions	9	5
(31)	(14)	Disposals	(2)	(4)
–	221	Transfer of B2Gold Corporation from investment in associates	26	–
(51)	482	Fair value adjustments	57	(6)
(42)	–	Impairments (notes 6 and 14)(1)	–	(6)
17	(97)	Translation	4	(6)
162	829	Balance at end of year	111	17
		Available for sale listed investments consist of investments in ordinary shares.
		Available for sale investments primarily consist of:
76	407	International Tower Hill Mines Limited	55	8
–	248	B2Gold Corporation	33	–
66	80	Various listed investments held by Environmental Rehabilitation Trust Fund	11	7
18	60	Red 5 Limited	8	2
–	24	Commander Resources Limited	3	–
–	8	Laurentian Goldfields Limited	1	–
2	2	Other	–	–
162	829		111	17

The group’s available for sale listed equity investments are susceptible to market price risk arising from uncertainties about the future values of the listed equity investments. The group manages the equity price risk through diversification.

At the reporting date, the majority of listed equity investments were listed on the Toronto TSX Venture Exchange, the Toronto Stock Exchange and the JSE.

Based on the share price of International Tower Hill Mines Limited (ITH) over the past year and carrying value at 31 December 2009 of $55m, R407m, if ITH achieved the high that it achieved during 2009 of 8 Canadian dollars per share, other comprehensive income (OCI) would increase by $4m, R33m. If it achieved the low of 1.57 Canadian dollars per share, OCI would decrease by $43m, R320m, if objective evidence of impairment existed, an impairment of $9m, R27m would be recognised in the income statement.

Based on the share price of B2Gold Corporation over the past year and carrying value at 31 December 2009 of $33m, R248m, if B2Gold Corporation achieved the high that it achieved during 2009 of 1.46 Canadian dollars per share, OCI would increase by $7m, R55m. If it achieved the low of 0.45 Canadian dollars per share, OCI would decrease by $21m, R156m, if objective evidence of impairment existed, an impairment of $17m, R120m would be recognised in the income statement.

The exposure to listed shares at fair value on the JSE was $11m, R80m. An analysis based on the assumption that the equity index (ALSI on the JSE) had increased/decreased by 10% with all other variables held constant and all the group’s JSE listed equity investments moved according to the ALSI, would impact OCI by $1.1m, R8m.

Based on the share price of Red 5 Limited over the past year and carrying value at 31 December 2009 of $8m, R60m, if Red 5 Limited achieved the high that it achieved during 2009 of 0.18 Australian dollars per share, OCI would increase by $2m, R16m. If it achieved the low of 0.04 Australian dollars per share, OCI would decrease by $6m, R43m.

⁽¹⁾ During 2008, the Red 5 Limited investment and Dynasty Gold Corporation shares were impaired by $4m, R29m and $2m, R13m respectively.

2008	2009	Figures in million	2009	2008
SA Rands			US Dollars
		Held to maturity
104	104	Balance at beginning of year	11	15
50	58	Additions	7	6
(50)	(88)	Maturities	(11)	(6)
–	–	Translation	3	(4)
104	74	Balance at end of year	10	11
		Rehabilitation Trust Fund administered by RMB Private
		Bank comprising:
89	74	Government bonds	10	9
15	–	Quasi – Government bonds	–	2
104	74		10	11
266	903	Book value of listed investments	121	28
278	906	Market value of listed investments	121	29
		The market value of held to maturity bonds is $10m, R77m (2008: $12m, R116m). The market value has a sensitivity of R44m (2008: R34m) for a 1% change in interest rates.
		Unlisted investments
		Available for sale
2	2	Balance at beginning of year	–	–
–	27	Additions	4	–
–	(3)	Translation	–	–
2	26	Balance at end of year	4	–
		Available for sale unlisted investments consist primarily of XDM Resources Limited.
		There is no active market for the unlisted equity investments and fair value cannot be reliably measured. The unlisted equity investments are carried at cost. The group does not intend to sell the investments in the foreseeable future.
		Held to maturity
367	357	Balance at beginning of year	38	54
725	541	Additions (2)	65	88
(653)	(525)	Maturities	(63)	(79)
(99)	–	Re-allocation of Environmental Protection Agency Bond to cash restricted for use	–	(12)
17	–	Translation	10	(13)
357	373	Balance at end of year	50	38
		Unlisted investments – held to maturity include:
		Negotiable Certificates of Deposit – Rehabilitation Trust
306	319	Fund administered by RMB Private Bank	43	32
33	36	Nufcor Uranium Trust Fund	5	3
18	18	Other	2	3
357	373		50	38
359	399	Book value of unlisted investments	54	38
360	399	Fair value of unlisted investments	54	38
625	1,302	Total book value of other investments (note 36)	175	66
638	1,305	Total fair value of other investmentss	175	67

⁽²⁾ Additions to unlisted investments consist of contributions to the Environmental Rehabilitation Trust Fund and the Nufcor Uranium Trust Fund. These investments are collateral for certain of the group’s environmental obligations.

20 Inventories

2008	2009	Figures in million	2009	2008
SA Rands			US Dollars
		Non-current
		Raw materials
2,395	2,356	– heap-leach inventory	317	254
303	144	– ore stockpiles	19	32
2,698	2,500	Total metal inventories	336	286
12	8	Mine operating supplies	1	1
2,710	2,508		337	287
		Current
		Raw materials
1,704	1,567	– ore stockpiles	211	181
460	300	– heap-leach inventory	40	49
		Work in progress
656	552	– gold in process	74	69
		Finished goods
352	556	– gold doré/bullion	75	37
222	255	– by-products	34	23
3,394	3,230	Total metal inventories	434	359
2,269	1,872	Mine operating supplies	252	240
5,663	5,102		686	599
8,373	7,610	Total inventories (1)	1,023	886

⁽¹⁾ The amount of the write-down of ore stockpiles, gold in process, gold doré/bullion, by-products and mine operating supplies to net realisable value, and recognised as an expense is $48m, R412m (2008: $60m, R530m). This expense is included in cost of sales which is disclosed in note 4.

21 Other non-current assets

2008	2009	Figures in million	2009	2008
SA Rands			US Dollars
–	38	AngloGold Ashanti Limited Pension Fund (note 29)	5	–
		Defined benefit post-retirement medical asset for Rand
17	16	Refinery employees (note 29)	2	2
		Loans and receivables
		Loan repayable between 31 December 2009 and
7	5	31 December 2011 bearing interest at 3% per annum	1	1
3	2	Other interest-bearing loan – repayable monthly to June 2010 at South African prime bank overdraft rates less 2%	–	–
7	5	Other non-interest bearing loans and receivables – repayable on various dates	–	–
34	66		8	3
(2)	(3)	Current portion of other non-current assets included in current assets	–	–
32	63		8	3

22 Trade and other receivables

2008	2009	Figures in million	2009	2008
SA Rands			US Dollars
		Non-current
102	199	Prepayments and accrued income	27	11
334	417	Recoverable tax, rebates, levies and duties (1)	56	35
149	172	Other debtors	23	16
585	788		106	62
		Current
367	334	Trade debtors	45	39
1,009	384	Prepayments and accrued income	52	107
608	608	Recoverable tax, rebates, levies and duties (1)	82	64
40	35	Amounts due from related parties	5	4
12	13	Interest receivable	2	1
40	45	Other debtors	5	5
2,076	1,419		191	220
2,661	2,207	Total trade and other receivables	297	282

Current trade debtors are non-interest bearing and are generally on terms less than 90 days.

There is no concentration of credit risk with respect to trade receivables, as the group has a large number of internationally dispersed customers.

There is a concentration of risk in respect of recoverable value added tax and fuel duties from the Tanzanian government.

As at 31 December 2009, trade and other receivables were impaired by $34m, R251m (2008: $2m, R14m).

⁽¹⁾ Recoverable tax, rebates, levies and duties includes the following:

Recoverable value added tax due from the Tanzanian government amounts to $36m, R268m at 31 December 2009 (2008: $16m, R151m). The last audited value added tax return was for the period ended 31 October 2009 and at 31 December 2009 $28m, R209m (2008: $15m, R142m) was still outstanding and $8m, R59m (2008: $1m, R9m) is still subject to audit. The accounting processes for the unaudited amount are in accordance with the processes advised by the Tanzanian government in terms of previous audits. The amounts outstanding have been discounted to their present value at a rate of 7.82%.

Recoverable fuel duties from the Tanzanian government amounts to $48m, R357m at 31 December 2009 (2008: $37m, R350m). Fuel duty claims are required to be submitted after consumption of the related fuel and are subject to authorisation by the Customs and Excise authorities. Claims for the refund of fuel duties amounting to $44m, R327m (2008: $16m, R151m) have been lodged with the Customs and Excise authorities, which are still outstanding, whilst claims for a refund of $4m, R30m (2008: $21m, R199m) have not yet been submitted. The accounting processes for the unauthorised amount are in accordance with the processes advised by the Tanzanian government in terms of previous authorisations. The amounts outstanding have been discounted to their present value at a rate of 7.82%.

23 Cash restricted for use

2008	2009	Figures in million	2009	2008
SA Rands			US Dollars
81	60	Cash restricted by prudential solvency requirements	8	9
		Cash balances held by an Employee Share Scheme
–	1	Trust Fund	–	–
		Cash balances held by Environmental Rehabilitation
326	391	Trust Funds	53	34
–	21	Cash balances held by the Tropicana joint venture	3	–
8	8	Other	1	1
415	481	(notes 36 and 37)	65	44

24 Cash and cash equivalents

2008	2009	Figures in million	2009	2008
SA Rands			US Dollars
2,141	2,535	Cash and deposits on call	341	226
3,297	5,641	Money market instruments	759	349
5,438	8,176	(notes 36 and 37)	1,100	575

25 Non-current assets and liabilities held for sale

2008	2009	Figures in million	2009	2008
SA Rands			US Dollars
		Effective 17 February 2009, the interest in the Tau Lekoa mine together with the adjacent Weltevreden, Jonkerskraal and Goedgenoeg project areas in South Africa were classified as held for sale. Tau Lekoa was previously recognised as a combination of tangible assets, current assets and current and long-term liabilities. The company has agreed to sell Tau Lekoa, subject to conditions precedent usual to a transaction of this nature, to Simmer and Jack Mines Limited (Simmers).
		Purchase consideration consists of two components: an initial cash payment or combination of cash payment and Simmers shares together with future royalty payments.
		The effective date will occur on the later of 1 January 2010, or the first day in the calendar month following the fulfilment of all conditions precedent to the transaction. The company will continue to operate Tau Lekoa until the effective date with appropriate joint management arrangements with Simmers.
–	529	Following the classification of Tau Lekoa as held for sale, an impairment loss of $27m, R200m was recognised in 2009 to reduce the carrying amount of the disposal group to the fair value less costs to sell (notes 6 and 14).	71	–
10	10	Effective December 2007, Rand Refinery allocated parts of its premises that were no longer utilised $1m, R10m (previously recognised as tangible assets), to assets held for sale. On 1 April 2008, a sale agreement was concluded subject to the suspensive condition regarding rezoning of the land and transfer of title deeds. Rand Refinery currently awaits the rezoning transfer notification from the municipal and deeds office in order to conclude the sales transaction.	1	1
–	111	Effective 2 December 2009, Amikan Holding Limited (Amikan) was classified as held for sale. AngloGold Ashanti Holdings plc, a wholly owned subsidiary entered into a memorandum of understanding with Polyholding Limited relating to the disposal of Amikan. Amikan was previously recognised as an equity accounted investment. Completion is expected to occur on or before 30 April 2010. An impairment loss of $9m, R75m was recognised in share of equity accounted investments’ profit (loss) to reduce the carrying amount of the investment to fair value less costs to sell (note 8).	15	–
		Effective 31 December 2008, the 33.33% joint venture interest in Boddington Gold Mine was classified as held for sale. The 33.33% joint venture interest in Boddington Gold Mine was previously recognised as a combination of tangible assets, goodwill and current assets. The 33.33% joint venture interest in the Boddington Gold Mine was sold, subject to conditions precedent, to Newmont Mining Corporation.
7,487	–	On 26 June 2009 AngloGold Ashanti Limited announced that the sale had been completed in accordance with the sale agreement with all conditions precedent being met. A profit on disposal of $62m, R523m was realised on the sale of Boddington.	–	792
7,497	650	Total non-current assets held for sale	87	793
–	56	Non-current liabilities held for sale relating to Tau Lekoa being classified as held for sale.	7	–
456	–	Non-current liabilities held for sale relating to 33.33% joint venture interest in Boddington Gold Mine being classified as held for sale.	–	48
456	56	Total non-current liabilities held for sale	7	48

26 Share capital and premium

2008	2009	Figures in million	2009	2008
SA Rands			US Dollars
		Share capital
		Authorised
100	150	600,000,000 (2008: 400,000,000) ordinary shares of 25 SA cents each	23	17
1	1	4,280,000 E ordinary shares of 25 SA cents each	–	–
1	1	2,000,000 A redeemable preference shares of 50 SA cents each	–	–
–	–	5,000,000 B redeemable preference shares of 1 SA cent each	–	–
102	152		23	17
		Share capital and premium
		Issued and fully paid
88	90	362,240,669 (2008: 353,483,410) ordinary shares of 25 SA cents each (1)	16	15
1	1	3,794,998 (2008: 3,966,941) E ordinary shares of 25 SA cents each	–	–
1	1	2,000,000 (2008: 2,000,000) A redeemable preference shares of 50 SA cents each	–	–
–	–	778,896 (2008: 778,896) B redeemable preference shares of 1 SA cent each	–	–
90	92		16	15
		Treasury shares held within the group:
(1)	(1)	2,778,896 (2008: 2,778,896) A and B redeemable preference shares held within the group	–	–
–	–	665,862 (2008: 855,649) ordinary shares held within the group (2)	–	–
(1)	(1)	2,394,998 (2008: 2,566,941) E ordinary shares held within the group (2)	–	–
88	90		16	15
		Share premium
23,253	38,158	Balance at beginning of year	5,609	3,737
14,927	2,436	Ordinary shares issued (1)	312	1,875
(22)	(22)	E ordinary shares cancelled	(2)	(3)
38,158	40,572		5,919	5,609
		Less: held within the group
(313)	(313)	Redeemable preference shares	(53)	(53)
(272)	(212)	Ordinary shares	(32)	(39)
(325)	(303)	E ordinary shares	(45)	(47)
37,248	39,744		5,789	5,470
37,336	39,834	Share capital and premium	5,805	5,485

⁽¹⁾ During September 2009, AngloGold Ashanti Limited issued 7,624,162 ordinary shares at an issue price of R288.32 per share in terms of an equity offering. Total proceeds of $284m, R2.2bn was received. During July 2008, 69,470,442 rights offer shares were issued at a subscription price of R194.00 per share. Total proceeds of $1.7bn, R13.5bn were raised.

⁽²⁾ These shares relate to the Black Economic Empowerment transactions more fully described in note 11 and as a result participate in dividends declared by the group.

The rights and restrictions applicable to the A and B redeemable preference shares:

A redeemable preference shares are entitled to:

• an annual dividend, after payment in full of the annual dividend on the B preference shares, equivalent to the balance of after tax profits from mining the Moab Mining Right Area; and
• on redemption, the nominal value of the shares and a premium per share equal to the balance of the net proceeds from disposal of assets relating to the Moab Mining Right Area, after redemption in full of the B preference shares and payments of the nominal value of the A preference shares.

B redeemable preference shares are entitled to:

• an annual dividend limited to a maximum of 5% of their issue price from the period that profits are generated from the Moab Mining Right Area; and
• on redemption, the nominal value of the shares and a premium of up to R249.99 per share provided by the net proceeds from disposal of the assets relating to the Moab Mining Right Area.

The Moab Mining Right Area consists of the Moab Khotsong mine operations.

The B preference shares will only be redeemed from any net proceeds remaining after the disposal of the Moab Mining Right Area following permanent cessation of mining activities. The maximum redemption price will be R250 per share.

In the event of any surplus remaining after the redemption in full of the B preference shares, the A preference shares will be redeemable at such value as would cover the outstanding surplus.

27 Borrowings

2008	2009		Figures in million	2009	2008
SA Rands				US Dollars
			Unsecured
7,931	7,616		Syndicated loan facility ($1,150m) – Drawn down in US dollars and Australian dollars (1)	1,024	839
			Interest charged at LIBOR plus 0.4% per annum. Loan is repayable in December 2010 and is US dollar-based and is subject to debt covenant arrangements for which no default event occurred.
–	4,433		3.5% convertible bonds (2)	596	–
			Semi-annual coupons are paid at 3.5% per annum and the bonds are convertible into ADS’s up to May 2014 and are US dollar-based. The bonds are convertible, at the holders option, at an initial price of $47.6126 per ADS and in certain circumstances for a cash settlement.
			AngloGold Ashanti Limited may redeem by giving between 30 and 90 days notice to the bondholders at any time after 11 June 2012, if the price of the ADS’s exceeds 130% of the conversion price for more than 20 consecutive dealing days, five days prior to notice or at any time if conversion rights have been exercised or purchases effected on 85% of the bonds issued.
9,492	–		2.375% convertible bonds (3)	–	1,004
			Semi-annual coupons were paid at 2.375% per annum, the bonds were convertible at the holders’ option into ADS’s up to February 2009, and were US dollar-based. The bonds were convertible at a price of $65.00 per ADS. The entire amount of $1bn of the Standard Chartered term facility available as at 26 February 2009 was drawn down to refinance the $1bn convertible bonds issued by AngloGold Ashanti Holdings plc, which matured on 27 February 2009.
–	1,772		Standard Chartered term facility (4)	238	–
			Interest is charged at a margin over the lenders’ cost of funds (subject to a cap of 1.25% plus LIBOR) of 4.25%. Loan is repayable on 24 August 2010 and is US dollar-based.
101	58		Santander Banespa	8	11
			Interest is charged at LIBOR plus 1.45% per annum. Loan is repayable in quarterly instalments terminating in September 2011 and is US dollar-based.
–	48		Santander Banespa	6	–
			Interest is charged at 6% per annum. Loans are repayable in monthly instalments terminating in November 2013 and April 2014 and are BRL-based.
459	–		Various US dollar-based loans and overdrafts with interest rates ranging from 3.72% to 8.69% were repaid during 2009.	–	48
17,983	13,927		Total unsecured borrowings	1,872	1,902
			Secured Finance leases
254	258		Turbine Square Two (Pty) Limited	35	27
			The leases are capitalised at an implied interest rate of 9.8% per annum. Lease payments are due in monthly instalments terminating in March 2022 and are rand-based. The buildings financed are used as security for these loans (note 37).
–	115		Caterpillar Financial Services Corporation	16	–
			Interest charged at an average rate of 5.46% per annum.
			Loans are repayable in monthly instalments terminating in
			December 2014 and are US dollar-based. The equipment financed is used as security for these loans.
–	48		Mazuma Capital Corporation	7	–
			Interest charged at an average rate of 5.6% per annum.
			Loans are repayable in monthly instalments terminating in November 2012 and are US dollar-based. The equipment financed is used as security for these loans.
24	–		Senstar Capital Corporation	–	3
			Interest was charged at an average rate of 6.6% per annum. Loans were repaid in monthly instalments terminating in December 2009 and were US dollar-based. The equipment financed was used as security for these loans.
8	7		CSI Latina Arrendamento Mercantil S.A.	1	1
			Interest is charged at a rate of 6.74% per annum. Loan is repayable in monthly instalments terminating in February 2012 and is BRL-based. The equipment financed is used as security for these loans.
1	–		Vehicle leases	–	–
			Interest charged at a rate of 15.5% per annum. Loans are repayable in monthly instalments terminating in February 2011 and are rand-based. The vehicles financed are used as security for these loans.
18,270	14,355		Total borrowings (notes 36 and 37)	1,931	1,933
(10,046)	(9,493)		Current portion of borrowings included in current liabilities	(1,277)	(1,063)
8,224	4,862		Total long-term borrowings	654	870
			Amounts falling due
10,046	9,493		Within one year	1,277	1,063
7,965	79		Between one and two years	11	843
114	4,543		Between two and five years	611	12
145	240		After five years	32	15
18,270	14,355		(notes 36 and 37)	1,931	1,933
			Currency The currencies in which the borrowings are denominated are as follows:
12,982	14,042		US dollar	1,889	1,384
255	258		SA rand	35	27
4,924	–		Australian dollar	–	521
109	55		Brazilian real	7	1
18,270	14,355		(notes 36 and 37)	1,931	1,933
			Undrawn facilities
			Undrawn borrowing facilities as at 31 December are as
			follows:
–	1,859		Standard Chartered PLC – US dollar	250	–
3,092	929		Syndicated loan ($1,150m) – US dollar	125	327
473	372		FirstRand Bank Limited – US dollar	50	50
397	312		Absa Bank Limited – US dollar	42	42
19	15		Nedbank Limited – US dollar	2	2
220	220		FirstRand Bank Limited – SA rand	30	23
185	185		Standard Bank of SA Limited – SA rand	25	20
50	105		Nedbank Limited – SA rand	14	5
30	30		Absa Bank Limited – SA rand	4	3
4,466	4,027			542	472
		(1)	Syndicated loan facility ($1,150m)
7,922	7,621		Drawn down in US dollars and Australian dollars	1,025	838
(28)	(9)		Unamortised loan issue costs	(1)	(3)
7,894	7,612			1,024	835
37	4		Accrued interest	–	4
7,931	7,616			1,024	839
		(2)	3.5% convertible bonds
–	5,450		Senior unsecured fixed-rate bonds	733	–
–	(1,033)		Unamortised discount and bond issue costs	(139)	–
–	4,417			594	–
–	16		Accrued interest	2	–
–	4,433			596	–
		(3)	2.375% convertible bonds
9,455	–		Senior unsecured fixed-rate bonds	–	1,000
(40)	–		Unamortised discount and bond issue costs	–	(4)
9,415	–			–	996
77	–		Accrued interest	–	8
9,492	–			–	1,004
		(4)	Standard Chartered term facility
–	1,860		Drawn down	250	–
–	(103)		Unamortised loan issue costs	(14)	–
–	1,757			236	–
–	15		Accrued interest	2	–
–	1,772			238	–
			On 24 August 2009, AngloGold Ashanti Limited completed an amendment to the Standard Chartered term facility by prepaying an amount of $750m and satisfying certain other conditions. As a result the balance of the Standard Chartered term facility has been converted into a new term loan of $250m (the 2009 term facility) and a new revolving credit facility of $250m has been made available (the 2009 Revolving Credit Facility).
			The 2009 term facility and the 2009 Revolving Credit Facility will each mature on 24 August 2010 (extendable, if required, at the option of AngloGold Ashanti Limited until 24 August 2011) and will bear an interest margin of 4.25% per annum over the higher of the applicable LIBOR and the lenders’ cost of funds (subject to a cap of LIBOR plus 1.25% per annum).

28 Environmental rehabilitation and other provisions

2008	2009	Figures in million		2009	2008
SA Rands				US Dollars
		Environmental rehabilitation obligations
		Provision for decommissioning
1,281	1,525		Balance at beginning of year	161	188
(74)	(51)		Change in estimates (1)	(6)	(9)
21	–		Additions	–	3
(8)	(21)		Transfer of liability to assets held for sale	(2)	(1)
79	59		Unwinding of decommissioning obligation (note 7)	7	10
(2)	–		Utilised during the year	–	–
228	(167)		Translation	21	(30)
1,525	1,345		Balance at end of year	181	161
		Provision for restoration
1,591	2,037		Balance at beginning of year	215	234
123	21		Charge to income statement	3	15
52	10		Change in estimates (1)	1	6
32	–		Additions	–	4
(160)	(13)		Transfer of liability to assets held for sale	(2)	(19)
79	60		Unwinding of restoration obligation (note 7)	7	10
(60)	(64)		Utilised during the year	(8)	(7)
380	(287)		Translation	21	(28)
2,037	1,764		Balance at end of year	237	215
		Other provisions
304	298		Balance at beginning of year	32	45
28	23		Charge to income statement	3	3
2	3		Change in estimates	–	–
11	–		Additions	–	1
–	(22)		Transfer to trade and other payables	(3)	–
1	1		Unwinding of other provisions (note 7)	–	–
(73)	(84)		Utilised during the year	(10)	(9)
25	23		Translation	11	(8)
298	242		Balance at end of year	33	32
		Other provisions comprise the following:
294	232	–	provision for labour and civil claim court settlements in South America (2)	32	31
4	10	–	provision for employee compensation claims in Australasia (3)	1	1
298	242			33	32
3,860	3,351	Total environmental rehabilitation and other provisions		451	408

⁽¹⁾ The change in estimates relates to changes in laws and regulations governing the protection of the environment and factors relating to rehabilitation estimates and a change in the quantities of material in reserves and corresponding change in the life of mine plan. These provisions are expected 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, governmental fiscal claims relating to levies and surcharges and closure costs of old tailings operations. The liability is expected to unwind over the next two-to five-year period.

⁽³⁾ Comprises workers compensation claims filed by employees in Australasia with regard to work-related incidents. The liability is expected to unwind over the next three-to five-year period.

29 Provision for pension and post-retirement benefits

2008	2009	Figures in million			2009	2008
SA Rands					US Dollars
		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:
100	(38)	AngloGold Ashanti Limited Pension Fund (asset) liability			(5)	11
		Post-retirement medical scheme for AngloGold Ashanti
1,070	1,095	Limited South African employees			147	113
106	68	Other defined benefit plans (1)			10	11
1,276	1,125	Sub-total			152	135
		Transferred to other non-current assets (note 21):
–	38		–	AngloGold Ashanti Limited Pension Fund	5	–
			–	Post-retirement medical scheme for Rand Refinery
17	16			employees	2	2
1,293	1,179				159	137
		(1)	Other defined benefit plans comprise the following:
8	1		–	Ashanti Retired Staff Pension Plan	–	1
86	59		–	Obuasi Mines Staff Pension Scheme	9	9
(17)	(16)		–	Post-retirement medical scheme for Rand Refinery employees (asset)	(2)	(2)
20	17		–	Retiree Medical Plan for North American employees	2	2
9	7		–	Supplemental Employee Retirement Plan (SERP) for North America (USA) Inc. employees	1	1
–	–		–	Retiree Medical Plan for Nufcor South Africa employees (asset)	–	–
106	68				10	11
		AngloGold Ashanti Limited Pension Fund
		The plan is evaluated by independent actuaries on an annual basis as at 31 December of each year. The valuation as at 31 December 2009 was completed at the beginning of 2010 using the projected unit credit method. In arriving at their conclusions, the actuaries took into account reasonable long-term estimates of inflation, increases in wages, salaries and pensions as well as returns on investments.
		A formal statutory valuation is required by legislation every three years. The previous statutory valuation had an effective date of 31 December 2005, and was completed in June 2006. The statutory valuation effective 31 December 2008 is in the process of being finalised and should be submitted to the Registrar of Pension Funds before 31 March 2010. The next statutory valuation of the Fund will have an effective date no later than 31 December 2011.
		All South African pension funds are governed by the Pension Funds Act of 1956 as amended.
		Information with respect to the AngloGold Ashanti Limited Pension Fund is as follows:
		Benefit obligation
1,753	1,885	Balance at beginning of year			199	257
49	51	Current service cost			6	6
139	137	Interest cost			16	17
14	13	Participants’ contributions			2	2
132	(20)	Actuarial (gain) loss			(2)	16
(202)	(68)	Benefits paid			(8)	(24)
–	–	Translation			56	(75)
1,885	1,998	Balance at end of year			269	199
		Plan assets
1,997	1,785	Balance at beginning of year			188	293
214	165	Expected return on plan assets			20	26
(276)	99	Actuarial gain (loss)			12	(33)
38	42	Company contributions			5	5
14	13	Participants’ contributions			2	2
(202)	(68)	Benefits paid			(8)	(24)
–	–	Translation			55	(81)
1,785	2,036	Fair value of plan assets at end of year			274	(11)
(100)	38	Funded (unfunded) status at end of year			5	(11)
(100)	38	Net amount recognised			5	17
		Components of net periodic benefit cost				6
139	137	Interest cost			16	(26)
49	51	Current service cost			5	(3)
(214)	(165)	Expected return on assets			(20)
(26)	23	Net periodic benefit cost			2

Assumptions
Assumptions used to determine benefit obligations at the end of the year are as follows:
Discount rate	9.25%	7.25%
Rate of compensation increase (1)	7.50%	5.25%
Expected long-term return on plan assets (2)	10.63%	9.28%
Pension increase	4.95%	3.60%
(1) The short-term compensation rate increase is 7% (2008: 10%) and the long-term compensation rate increase is 7.5% (2008: 5.25%) (2) 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 Limited’s pension plan asset allocations at the end of the year, by asset category, are as follows:
Equity securities	60%	58%
Debt securities	32%	37%
Other	8%	5%
	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.

	Number of shares	Percentage of total assets	Fair value	Number of shares	Percentage of total assets	Fair value
US Dollars million	2009			2008
Related parties
Investments held in related parties are summarised as follows:
Equity securities
AngloGold Ashanti Limited	296,410	4.5%	12	115,970	1.6%	3
Other investments exceeding 5% of total plan assets
Equities
Sasol Limited	424,680	6.2%	17	–		–
SABMiller Plc	759,600	8.0%	22	–		–
Bonds
IFM Corporate Bond Unit Trust	158,630,977	7.3%	20	117,299,950	6.6%	12
Allan Gray Orbis Global Equity Fund	312,715	13.0%	36	316,082	13.4%	25
			95			37
SA Rands million
Related parties
Investments held in related parties are summarised as follows:
Equity securities
AngloGold Ashanti Limited	296,410	4.5%	91	115,970	1.6%	29
Other investments exceeding 5% of total plan assets
Equities
Sasol Limited	424,680	6.2%	127	–		–
SABMiller Plc	759,600	8.0%	164	–		–
Bonds
IFM Corporate Bond Unit Trust	158,630,977	7.3%	148	117,299,950	6.6%	118
Allan Gray Orbis Global Equity Fund	312,715	13.0%	264	316,082	13.4%	240
			703			358

Cash flows
Contributions

The company expects to contribute $6m, R41m (2009: $4m, R37m) to its pension plan in 2010.

Estimated future benefit payments

The following pension benefit payments, which reflect the expected future service, as appropriate, are expected to be paid:

2008	2009	Figures in million	2009	2008
SA Rands			US Dollars
	127	2010	17
	127	2011	17
	128	2012	17
	129	2013	17
	130	2014	17
	1,357	Thereafter	184
		Post-retirement medical scheme for AngloGold
		Ashanti Limited 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 2009.
		Information with respect to the defined benefit
		liability is as follows:
		Benefit obligation
1,121	1,070	Benefit obligation at beginning of year	113	165
6	4	Current service cost	1	1
89	75	Interest cost	9	11
(86)	(86)	Benefits paid	(10)	(11)
(60)	32	Actuarial loss (gain)	4	(7)
–	–	Translation	30	(46)
1,070	1,095	Balance at end of year	147	113
(1,070)	(1,095)	Unfunded status at end of year	(147)	(113)
(1,070)	(1,095)	Net amount recognised	(147)	(113)
		Components of net periodic benefit cost
6	4	Current service cost	1	1
89	75	Interest cost	9	11
95	79	Net periodic benefit cost	10	12
		Assumptions
		Assumptions used to determine benefit obligations at the end of the year are as follows:
		Discount rate	9.25%	7.25%
		Expected increase in health care costs	7.00%	5.50%
		Assumed health care cost trend rates at 31 December:
		Health care cost trend assumed for next year	7.00%	5.50%
		Rate to which the cost trend is assumed to decline (the ultimate trend rate)	7.00%	5.50%
	1% point increase	Assumed health care cost trend rates have a significant effect on the amounts reported for health care plans.	1% point increase
		A 1% point change in assumed health care cost trend rates would have the following effect:
	13	Effect on total service and interest cost	2
	128	Effect on post-retirement benefit obligation	17
	1% point decrease		1% point decrease
	(11)	Effect on total service and interest cost	(1)
	(109)	Effect on post-retirement benefit obligation	(15)
		Cash flows
		Contributions
		AngloGold Ashanti Limited expects to contribute $14m, R104m (2009: $22m, R209m) to the post-retirement medical plan in 2010.
		Estimated future benefit payments
		The following medical benefit payments, which reflect the expected future service, as appropriate, are expected to be paid:
	104	2010	14
	106	2011	14
	105	2012	14
	108	2013	15
	110	2014	15
	562	Thereafter	75

Other defined benefit plans

Other defined benefit plans include the Ashanti Retired Staff Pension Plan, the Obuasi Mines Staff Pension Scheme, the Postretirement medical scheme for Rand Refinery employees, the Retiree Medical Plan for North American employees, the Supplemental Employee Retirement Plan for North America (USA) Inc. employees and the Nuclear Fuels South Africa (NUFCOR) – Retiree Medical Plan for Nufcor South Africa employees.

2008	2009	Figures in million	2009	2008
SA Rands			US Dollars
		Information in respect of other defined benefit plans for the year ended 31 December 2009 has been aggregated in the tables of change in benefit obligations, change in plan assets and components of net periodic benefit cost and is as follows:
		Benefit obligation
134	166	Balance at beginning of year	17	18
7	6	Interest cost	–	–
8	(2)	Actuarial (gain) loss	–	–
(16)	(14)	Benefits paid	(1)	(1)
33	(25)	Translation	2	–
166	131	Balance at end of year	18	17
		Plan assets
67	60	Fair value of plan assets at beginning of year	6	9
6	4	Expected return on plan assets	–	–
(13)	3	Actuarial gain (loss)	–	(1)
(2)	(3)	Benefits paid	–	–
2	(1)	Translation	2	(2)
60	63	Fair value of plan assets at end of year	8	6
(106)	(68)	Net amount recognised analysed as follows:	(10)	(11)
9	15	– funded plans	2	1
(115)	(83)	– unfunded plans	(12)	(12)
		Components of net periodic benefit cost
7	6	Interest cost	–	–
(6)	(4)	Expected return on plan assets	–	–
1	2	Net periodic benefit cost	–	–
		Cash flows
		The other retirement defined benefit plans are all closed to new members and current members are either retired or deferred members. The companies do not make contributions to these plans
		Estimated future benefit payments
		The following pension benefit payments, which reflect the expected future service, appropriate, are expected to be paid:
	10	2010	1
	10	2011	1
	10	2012	1
	9	2013	1
	9	2014	1
	83	Thereafter	13

Figures in million	2009	2008	2007	2006	2005
Five-year defined benefit plan disclosure
AngloGold Ashanti Limited Pension Fund
Defined benefit obligation	269	199	257	224	222
Plan assets	(274)	(188)	(293)	(262)	(230)
Net (funded) unfunded	(5)	11	(36)	(38)	(8)
Experience adjustments on plan liabilities	3	17	3	14	6
Experience adjustments on plan assets	(12)	33	1	(40)	(41)
Post-retirement medical scheme for AngloGold Ashanti Limited South African employees
Defined benefit obligation	147	113	165	156	185
Unfunded	147	113	165	156	185
Experience adjustments on plan liabilities	16	6	(2)	(8)	6
Other defined benefit plans
Defined benefit obligation	18	17	18	19	18
Plan assets	(8)	(6)	(9)	(8)	(8)
Unfunded	10	11	9	11	10
Experience adjustments on plan liabilities	–	1	1	–	(1)
Experience adjustments on plan assets	–	1	–	–	–
SA Rands
AngloGold Ashanti Limited Pension Fund
Defined benefit obligation	1,998	1,885	1,753	1,568	1,408
Plan assets	(2,036)	(1,785)	(1,997)	(1,835)	(1,459)
Net (funded) unfunded	(38)	100	(244)	(267)	(51)
Experience adjustments on plan liabilities	24	138	23	95	37
Experience adjustments on plan assets	(99)	276	6	(272)	(260)
Post-retirement medical scheme for AngloGold Ashanti Limited South African employees
Defined benefit obligation	1,095	1,070	1,121	1,094	1,172
Unfunded	1,095	1,070	1,121	1,094	1,172
Experience adjustments on plan liabilities				(57)	38
Other defined benefit plans
Defined benefit obligation	131	166	134	132	116
Plan assets	(63)	(60)	(67)	(63)	(56)
Unfunded	68	106	67	69	60
Experience adjustments on plan liabilities	(2)	10	5	3	(4)
Experience adjustments on plan assets	(3)	13	(2)	–	(2)

Defined contribution funds

Contributions to the various retirement schemes are fully expensed during the year in which they are made and the cost of contributing to retirement benefits for the year amounted to $53m, R447m (2008: $49m, R403m).

Australia (Sunrise Dam)

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. The cost to the group of all these contributions amounted to $4m, R34m and in 2008, which included the Boddington joint venture, of $3m, R28m.

Ghana and Guinea (Iduapriem, Obuasi and Siguiri)

AngloGold Ashanti Limited’s 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 government treasury instruments, fixed term deposits and other investments. The cost of these contributions was $4m, R34m (2008: $4m, R33m).

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 contribute to this fund. The cost to the group of all these contributions amounted to $1m, R10m (2008: $1m, R7m).

North America (Cripple Creek & Victor)

AngloGold Ashanti Limited USA sponsors a 401(k) savings plan whereby employees may contribute up to 60% of their salary, of which up to 5% is matched at a rate of 150% by AngloGold Ashanti Limited USA. AngloGold Ashanti Limited USA’s contributions were $2m, R14m (2008: $2m, R12m).

South Africa (Great Noligwa, Kopanang, Moab Khotsong, Mponeng, Savuka, Tau Lekoa and TauTona)

South Africa contributes to various industry-based pension and provident retirement plans which cover 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 $41m, R344m (2008: $36m, R299m).

South America (AngloGold Ashanti Brasil Mineração, Cerro Vanguardia and Serra Grande).

The AngloGold Ashanti Limited South America region operates defined contribution arrangements for their employees in Brazil. These arrangements are funded by the operations (basic plan) and operations/employees (optional supplementary plan). A PGBL (Plano Gerador de Beneficio Livre) fund, similar to the American 401(k) type of plan was started in December 2001. Administered by Bradesco Previdencia e Seguros (which assumes the risk for any eventual actuarial liabilities), this is the only private pension plan sponsored by the group. Contributions amounted to $1m, R11m (2008: $3m, R24m).

Employees in Argentina contribute 11% of their salaries towards the Argentinean pension fund. The company makes a contribution of 17% of an employee’s salary on behalf of employees to the same fund.

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 has set up a supplemental provident fund which is administered by the PPF with membership available to permanent national employees on a voluntary basis. The company makes no contribution towards any retirement schemes for contracted expatriate employees. The company contributes to the NSSF on behalf of expatriate employees. On termination of employment the company may apply for a refund of contributions from the NSSF.

30 Deferred taxation

2008	2009	Figures in million	2009	2008
SA Rands			US Dollars
		Deferred taxation relating to temporary differences is made up as follows: Liabilities
9,095	9,883	Tangible assets	1,329	962
156	85	Inventories	11	16
742	9	Derivatives	1	78
46	26	Other	4	5
10,039	10,003		1,345	1,061
		Assets
1,449	1,326	Provisions	178	153
1,336	2,488	Derivatives	335	141
1,830	998	Tax losses	134	194
61	43	Other	6	6
4,676	4,855		653	494
5,363	5,148	Net deferred taxation liability	692	567
		Included in the statement of financial position as follows:
475	451	Deferred tax assets	61	50
5,838	5,599	Deferred tax liabilities	753	617
5,363	5,148	Net deferred taxation liability	692	567
		The movement on the deferred tax balance is as follows:
6,670	5,363	Balance at beginning of year	567	979
119	304	Taxation on items included in other comprehensive income	40	12
(2,816)	(166)	Income statement movement	(17)	(289)
(5)	–	Discontinued operations (note 13)	–	(1)
(378)	–	Disposal of assets and investments	–	(46)
1,773	(353)	Translation	102	(88)
5,363	5,148	Balance at end of year	692	567
		No provision has been made for South African income tax or foreign tax that may result from future remittances of undistributed earnings of foreign subsidiaries or foreign corporate joint ventures because it is expected that such earnings will not be distributed as a dividend in the foreseeable future. These foreign subsidiaries reinvest the undistributed earnings into future capital expansion projects, maintenance capital and ongoing working capital funding requirements. Unrecognised taxable temporary differences pertaining to undistributed earnings totalled $409m, R3,045m at 31 December 2009 (2008: $386m, R3,652m).

31 Trade, other payables and deferred income

2008	2009	Figures in million	2009	2008
SA Rands			US Dollars
		Non-current
–	58	Accruals	8	–
68	42	Deferred income	5	7
4	–	Amounts due to related parties	–	–
27	8	Other creditors	1	4
99	108		14	11
		Current
2,964	2,531	Trade creditors	340	314
1,600	1,569	Accruals	211	169
47	93	Deferred income	13	5
256	–	Unearned premiums on normal sale exempted contracts	–	27
79	139	Other creditors	18	9
4,946	4,332		582	524
		Total trade, other payables and deferred income
5,045	4,440	Current trade and other payables are non-interest bearing and are normally settled within 60 days.	596	535

32 Taxation

2008	2009	Figures in million	2009	2008
SA Rands			US Dollars
1,137	1,033	Balance at beginning of year	109	167
(1,029)	(1,232)	Payments during the year	(147)	(125)
737	1,338	Provision during the year	164	92
23	3	Transfer to recoverable tax in non-current trade and other receivables	–	3
17	–	Discontinued operations (note 13)	–	2
148	(83)	Translation	16	(30)
1,033	1,059	Balance at end of year	142	109
		Included in the balance sheet as follows:
–	127	Taxation asset included in trade and other receivables	17	–
1,033	1,186	Taxation liability	159	109
1,033	1,059		142	109

33 Cash generated from operations

2008	2009	Figures in million	2009	2008
SA Rands			US Dollars
(18,058)	(1,173)	Loss before taxation	(121)	(1,377)
		Adjusted for:
3,169	14,417	Movement on non-hedge derivatives and other commodity contracts	1,787	(88)
4,620	4,615	Amortisation of tangible assets (notes 4, 9 and 16)	555	560
21	18	Amortisation of intangible assets (notes 4 and 17)	2	2
926	1,146	Finance costs and unwinding of obligations (note 7)	139	114
38	(47)	Environmental rehabilitation and other expenditure	(6)	6
15,379	(5,148)	Operating special items	(683)	1,538
(418)	(467)	Deferred stripping	(48)	(51)
(185)	249	Fair value adjustment on option component of convertible bond	33	(25)
(536)	(444)	Interest received (note 3)	(54)	(66)
1,177	(785)	Share of equity accounted investments’ (profit) loss (note 8)	(94)	138
776	(853)	Other non-cash movements	(115)	87
(1,221)	(951)	Movements in working capital	(50)	(206)
5,688	10,577		1,345	632
		Movements in working capital:
(3,588)	634	(Increase) decrease in inventories	(155)	(151)
(618)	106	(Increase) decrease in trade and other receivables	(45)	(9)
2,985	(1,691)	Increase (decrease) in trade and other payables	150	(46)
(1,221)	(951)		(50)	(206)

34 Related parties

2008	2009	Figures in million	2009	2008
SA Rands			US Dollars
		Material related party transactions were as follows:
		Sales and services rendered to related parties
95	155	Joint ventures	19	11
–	(1)	Associates	–	–
		Purchases and services acquired from related parties
15	16	Associates	2	2
		Outstanding balances arising from sale of goods and services and other loans due by related parties
35	34	Joint ventures	5	4
47	59	Associates	8	6
		Outstanding balances arising from purchases of goods and services and other loans owed to related parties
4	–	Other	–	1
		Amounts owed to/due by related parties are unsecured and non-interest bearing. Terms relating to associate related parties are detailed in note 18.
		Details of guarantees to related parties are included in note 35.
		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 here to here).
		Compensation to key management personnel includes the following:
79	92	– short-term employee benefits	11	10
2	13	– post-employment benefits	1	–
3	23	– share-based payments	3	–
84	128		15	10

35 Contractual commitments and contingencies

2008	2009	Figures in million	2009	2008
SA Rands			US Dollars
		Operating leases
		At 31 December 2009, the group was committed to making the following payments in respect of operating leases for amongst others, the hire of plant and equipment and land and buildings. Certain contracts contain renewal options and escalation clauses for various periods of time.
		Expiry:
201	70	– within one year	9	21
29	13	– between one and two years	2	3
28	28	– between two and five years	4	3
15	1	– after five years	–	2
273	112		15	29
		Operating lease commitments include contracts with minimum notice periods. The 2008 comparative data have been aligned to replace the commitment related to the full duration of the contract with the minimum notice period commitment.

Finance leases

The group has finance leases for plant and equipment, buildings and motor vehicles. The leases for plant and equipment and buildings have terms of renewal but no purchase options. The motor vehicle leases have no purchase options. 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
2009		Figures in million	2009
SA Rands			US Dollars
40	73	Within one year	10	5
149	262	After one year but not more than five years	35	20
241	350	More than five years	48	34
430	685	Total minimum lease payments	93	59
–	(255)	Amounts representing finance charges	(34)	–
430	430	Present value of minimum lease payments	59	59
2008			2008
28	54	Within one year	6	3
13	114	After one year but not more than five years	12	1
250	383	More than five years	40	27
291	551	Total minimum lease payments	58	31
–	(260)	Amounts representing finance charges	(27)	–
291	291	Present value of minimum lease payments	31	31
2008	2009		2009	2008
		Capital commitments
		Acquisition of tangible assets
1,414	976	Contracted for	131	162
11,362	12,515	Not contracted for	1,683	1,396
12,776	13,491	Authorised by the directors	1,814	1,558
		Allocated to:
		Project capital
8,384	1,965	– within one year	264	861
658	4,419	– thereafter	594	77
9,042	6,384		858	938
		Stay-in-business capital
3,325	5,244	– within one year	705	572
409	1,863	– thereafter	251	48
3,734	7,107		956	620
90	42	Share of underlying capital commitments of joint ventures	6	11
		Purchase obligations
		Contracted for
2,729	2,573	– within one year	346	289
3,744	713	– thereafter	96	396
6,473	3,286		442	685

Purchase obligations represent contractual obligations for the purchase of mining contract services, power, supplies, consumables, inventories, explosives and activated carbon.

To service these capital commitments, purchase obligations and other operational requirements, the group is dependent on existing cash resources, cash generated from operations and borrowing facilities.

Cash generated from operations is subject to operational, market and other risks. Distributions from operations may be subject to foreign investment, exchange control laws and regulations, and the quantity of foreign exchange available in offshore countries. In addition, distributions from joint ventures are subject to the relevant board approval.

The credit facilities and other finance arrangements contain financial covenants and other similar undertakings. To the extent that external borrowings are required, the group’s covenant performance indicates that existing financing facilities will be available to meet the commitments detailed above. To the extent that any of the financing facilities mature in the near future, the group believes that sufficient measures are in place to ensure that these facilities can be refinanced.

Summary of contracted uranium sales as at 31 December 2009

The group has the following forward pricing uranium commitments:

		Average contracted price
Year	000 lbs (1)	($/lbs) (2)
2010	494	34.20
2011	494	35.06
2012-2013	988	36.38

Great Noligwa, Kopanang and Moab Khotsong produced 1.44m pounds of uranium oxide in 2009 (2008: 1.28m pounds).

⁽¹⁾ Certain contracts allow the buyer to adjust the purchase quantity within a specified range.

⁽²⁾ Certain contracts are subject to market related price adjustment mechanisms. In these cases the price disclosed indicates the previous periodic price reset.

In addition, the group has gold sale commitments as disclosed in note 36.

Liabilities included on the statement of financial position	Guarantees and contingencies	Liabilities included on the statement of financial position	Guarantees and contingencies		Guarantees and contingencies	Liabilities included on the statement of financial position	Guarantees and contingencies	Liabilities included on the statement of financial position
2008		2009		Figures in million	2009		2008
SA Rands					US Dollars
				Contingent liabilities
–	–	–	–	Groundwater pollution –	–	–	–	–
				South Africa (1)
–	–	–	–	Deep groundwater pollution –	–	–	–	–
				South Africa (2)
–	524	–	560	Sales tax on gold deliveries –	76	–	55	–
				Brazil (3)
–	175	–	191	Other tax disputes – Brazil (4)	25	–	18	–
–	–	–	67	Withholding taxes – Ghana (5)	9	–	–	–
				Contingent assets
				Royalty – Boddington Gold
–	–	–	–	Mine (6)	–	–	–	–
				Insurance Claim – Savuka
–	–	–	–	Gold Mine (7)	–	–	–	–
				Guarantees
				Financial guarantees
–	100	–	100	Oro Group (Pty) Limited (8)	13	–	11	–
				Hedging guarantees (9)
3,559	9,335	3,293	3,293	Ashanti Treasury Services (10)	443	443	987	376
3,129	3,129	3,213	3,213	Geita Management Company (11)	432	432	331	331
1,142	1,142	1,071	1,071	AngloGold South America (12)	144	144	121	121
1,117	1,667	1,679	1,679	AngloGold USA Trading	226	226	176	118
				Company (12)
267	267	–	–	Cerro Vanguardia S.A. (12)	–	–	28	28
9,214	16,339	9,256	10,174		1,368	1,245	1,727	974

Contingent liabilities

⁽¹⁾ The company has identified groundwater contamination plumes at its Vaal River and West Wits operations in South Africa, which have occurred primarily as a result of seepage from mine residue stockpiles. Numerous scientific, technical and legal studies have been undertaken since 2002 to assist in determining the magnitude of the contamination and to find sustainable remediation solutions. The company has instituted processes to reduce future potential seepage and it has been demonstrated that Monitored Natural Attenuation (MNA) by the existing environment will contribute to improvement in some instances. Furthermore, literature reviews, field trials and base line modelling techniques suggest, but are not yet proven, that the use of phyto-technologies can address the soil and groundwater contamination at all South African operations. Subject to the completion of trials and the technology being a proven remediation technique, no reliable estimate can be made for the obligation.

⁽²⁾ The company has identified a flooding and future pollution risk posed by deep groundwater in the Klerksdorp and Far West Rand gold fields. Various studies have been undertaken by AngloGold Ashanti since 1999. Due to the interconnected nature of mining operations, any proposed solution needs to be a combined one supported by all the mines located in these gold fields. As a result, the Department of Mineral Resource and affected mining companies are involved in the development of a “Regional Mine Closure Strategy”. In view of the limitation of current information for the accurate estimation of a liability, no reliable estimate can be made for the obligation.

⁽³⁾ Mineração Serra Grande S.A. (MSG), received two tax assessments from the State of Goiás related to payments of sales taxes on gold deliveries for export. AngloGold Ashanti Brasil Mineração Ltda. manages the operation and its attributable share of the first assessment is approximately $47m, R347m (2008: $34m, R325m). In November 2006, the administrative council’s second chamber ruled in favour of MSG and fully cancelled the tax liability related to the first period. The State of Goiás has appealed to the full board of the State of Goiás tax administrative council. The second assessment was issued by the State of Goiás in October 2006 on the same grounds as the first assessment, and the company’s attributable share of the assessment is approximately $29m, R213m (2008: $21m, R199m). The company believes both assessments are in violation of federal legislation on sales taxes.

⁽⁴⁾ MSG received a tax assessment in October 2003 from the State of Minas Gerais related to sales taxes on gold. The tax administrators rejected the company’s appeal against the assessment. The company is now appealing the dismissal of the case. The company’s attributable share of the assessment is approximately $8m, R66m (2008: $6m, R59m). Subsidiaries of the company in Brazil are involved in various disputes with tax authorities. These disputes involve federal tax assessments including income tax, royalties, social contributions and annual property tax. The amount involved is approximately $17m, R125m (2008: $12m, R116m).

⁽⁵⁾ AngloGold Ashanti (Ghana) Limited received a tax assessment for $9m, R67m (2008: nil) during September 2009 following an audit by the tax authorities related to indirect taxes on various items. Management is of the opinion that the indirect taxes are not payable and the company has lodged an objection.

Contingent assets

⁽⁶⁾ As a result of the sale of the interest in the Boddington Gold Mine joint venture during 2009, the group is entitled to receive a royalty on any gold recovered or produced by the Boddington Gold Mine, where the gold price is in excess of Boddington Gold Mine’s cash cost plus $600/oz. The royalty commences on 1 July 2010 and is capped at a total amount of $100m, R744m.

⁽⁷⁾ On 22 May 2009 an insurable event occurred at Savuka Gold Mine. The amounts due from the insurers are subject to a formula based on lost production, average gold price and average exchange rates subject to various excesses and the production and the preparation of supportable data. The insurable amount is not yet determinable, but management expects that it is likely to exceed $40m, R297m and will be received during the first half of 2010.

Guarantees

⁽⁸⁾ The company has provided surety in favour of the lender in respect of gold loan facilities to wholly owned subsidiaries of Oro Group (Pty) Limited, an affiliate of the group. The company has a total maximum liability, in terms of the suretyships, of $13m, R100m (2008: $11m, R100m). The probability of the non-performance under the suretyships is considered minimal.

⁽⁹⁾ Included in the amounts stated under “guarantees and contingencies” are the NPSE contracts which are covered by guarantees but not previously included on the statement of financial position. NPSE accounted contracts are fair valued at $nil, Rnil (2008: $669m, R6,326m).

⁽¹⁰⁾ 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).

⁽¹¹⁾ The group 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.

⁽¹²⁾ The group has issued gold delivery guarantees to several counterparty banks in which it guarantees the due performance of its subsidiaries AngloGold USA Trading Company, AngloGold South America Limited and Cerro Vanguardia S.A. under their respective gold hedging agreements.

36 Financial risk management activities

In the normal course of its operations, the group is exposed to gold price, other commodity price, foreign exchange, interest rate, liquidity, equity price 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 and 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 treasury counterparts, limits, instruments and hedge strategies. The treasurer is responsible for managing gold and other commodity price, foreign exchange, interest rate, liquidity and credit risks. 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’s core earnings stream from its major assets through the effective control and management of gold price risk, other commodity 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; and
• ensuring that all contracts and agreements related to risk management activities are coordinated, consistent throughout the group and that they comply where necessary with all relevant regulatory and statutory requirements.

Gold price and foreign exchange risk

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 group has transactional foreign exchange exposures. Such exposure arises from sales or purchases by an operating unit in currencies other than the unit’s functional currency. 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, Argentinean peso/US dollar and Australian dollar/US dollar exchange rates may also have an adverse effect on current or future earnings. The group is also exposed to certain by-product commodity price risk.

A number of products, including derivatives, are used to manage the 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 manage these risks. At year-end, the volume of outstanding net forward sales contracts was 571kg (2008: 39,990kg). The volume of outstanding net call options sold was 120,594kg (2008: 146,542kg) and the volume of outstanding net put options sold was 27,071kg (2008: 16,963kg).

As the group does not enter into financial instruments for trading purposes, the risks inherent to financial instruments are always offset by the underlying risk being hedged. The group further manages such risks by ensuring that the level of hedge cover does not exceed expected sales in future periods, that the tenor of instruments does not exceed the life of mine and that no basis risk exists.

Cash flow hedges

The group’s cash flow hedges consist of commodity and foreign exchange forward contracts that are used to protect against exposures to variability in future commodity, foreign exchange and capital expenditure cash flows. The amounts and timing of future cash flows are projected for each portfolio of financial assets and liabilities on the basis of their contractual terms and other relevant factors, including estimates of prepayments and defaults. The contractual cash flows across all portfolios over time form the basis for identifying gains and losses on the effective portions of derivatives designated as cash flow hedges of forecast transactions. Gains and losses are initially recognised directly in other comprehensive income and reclassified to earnings as gold income or as an adjustment to depreciation expense pertaining to capital expenditure, when the forecast transactions affect the income statement.

The cash flow hedge forecast transactions are expected to occur in the next year, in line with the maturity dates of the hedging instruments and will affect profit and loss simultaneously in an equal and opposite way.

The gains and losses on ineffective portions of such derivatives are recognised immediately in the income statement. During the year to 31 December 2009, a loss of $5m, R40m (2008: loss of $8m, R64m) was recognised on non-hedge derivatives and other commodities in the income statement due to hedge ineffectiveness.

Non-hedge derivatives

Loss on non-hedge derivatives and other commodity contracts is summarised as follows:

Figures in million	2009	2008
US Dollars
Loss on non-hedge derivatives and other commodity contracts	(1,533)	(310)
Unrealised gain on other commodity physical borrowings	–	8
Provision reversed for loss on future deliveries and other commodities	–	5
Loss on non-hedge derivatives and other commodity contracts per the income statement	(1,533)	(297)
SA Rands
Loss on non-hedge derivatives and other commodity contracts	(11,934)	(6,388)
Unrealised gain on other commodity physical borrowings	–	74
Provision reversed for loss on future deliveries and other commodities	–	37
Loss on non-hedge derivatives and other commodity contracts per the income statement	(11,934)	(6,277)

Loss on non-hedge derivatives and other commodity contracts was $1,533m, R11,934m in 2009 compared to a loss of $297m, R6,277m in the previous year. The loss is as a result of forward gold contracts previously qualifying for the normal sale exemption being included in the statement of financial position, with a change in fair value reflected in the income statement as non-hedge derivatives, $556m, R4,144m (2008: $173m, R1,520m), as well as the revaluation of existing and new non-hedge derivatives resulting from changes in the prevailing spot gold price, exchange rates, interest rates, volatilities and credit risk compared to the previous year.

During 2009 the company embarked on a hedge buy-back that resulted in the accelerated settlement of both non-hedge and forward and option gold contracts qualifying for the normal sale exemption (which permits the group to not record such amounts in its financial statements until the maturity date of the contract) under which the group had committed to deliver a specified quantity of gold at a future date in exchange for an agreed price. As a result of the accelerated settlement of the normal sale exempted contracts, all remaining contracts scheduled to mature in later periods have been determined to not meet all of the requirements necessary for them to continue to qualify for the normal sales exemption in future periods and are being accounted for as non-hedge derivatives and recorded on the statement of financial position at fair value with fair value changes reflected in the income statement. During 2008, due to the inability of a single counterparty to accept the physical delivery of gold for the forward contracts expiring in April through June 2008, the group cash settled such contracts during the period. This resulted in the remaining contracts with this counterparty scheduled to mature in later periods being accounted for as non-hedge derivatives at fair value on the statement of financial position, with a change in fair value reflected in the income statement.

The total realised loss before taxation as a result of the hedge buy-back effected during the year was $797m, R6,315m (2008: $1,088m, R8,634m), of which $217m, R1,719m (2008: $1,088m, R8,634m) was due to the accelerated settlement of non-hedge derivatives and $580m, R4,596m (2008: nil) was due to the accelerated settlement of forward gold contracts previously qualifying for the normal sale exemption.

Net open hedge position as at 31 December 2009

The marked-to-market value of derivatives, irrespective of accounting designation, making up the hedge position was negative $2.18bn, negative R16.18bn as at 31 December 2009 (as at 31 December 2008: negative $2.46bn, negative R23.25bn). These values were based on a gold price of $1,102 per ounce, exchange rates of $1 = R7.4350 and A$1 = $0.8967 and the prevailing market interest rates and volatilities at 31 December 2009. The values as at 31 December 2008 were based on a gold price of $872 per ounce, exchange rates of $1 = R9.4550 and A$1 = $0.6947 and the market interest rates and volatilities prevailing at that date.

The table below reflects the hedge position as at 31 December 2009 and includes the effect of all hedge buy-backs undertaken during the year.

Summary: All open contracts in the group’s commodity hedge position as at 31 December 2009

Year	2010	2011	2012	2013	2014	2015	Total	2008
US Dollar/Gold
Forward contracts
Amount (kg)	(13,534) (1)	1,866	3,810	3,717	2,846		(1,295) (1)	38,466
$/oz	$909 (1)	$227	$418	$477	$510		$5,457 (1)	$467
Put options sold
Amount (kg)	14,801	4,603	2,659	1,882	1,882		25,827	16,963
$/oz	$929	$623	$538	$440	$450		$764	$579
Call options sold
Amount (kg)	33,137	24,161	25,238	17,857	21,165	902	122,460	150,896
$/oz	$619	$554	$635	$601	$604	$670	$605	$557
Rand/Gold
Forward contracts
Amount (kg)	(1,244) (1)						(1,244) (1)	(1,866)(1)
R/kg	R232,225 (1)						R232,225 (1)	R157,213 (1)
Put options sold
Amount (kg)	1,244						1,244
R/kg	R240,354						R240,354
Call options sold
Amount (kg)	1,244						1,244
R/kg	R262,862						R262,862
Australian Dollar/Gold
Forward contracts
Amount (kg)	3,110						3,110	3,390
A$/oz	A$646						A$646	A$669
Call options purchased
Amount (kg)	3,110						3,110	4,354
A$/oz	A$712						A$712	A$707
Total net gold
Delta (kg) (2)	(13,582)	(24,567)	(26,855)	(20,278)	(22,383)	(817)	(108,482)	(162,223)
Delta (oz) (2)	(436,666)	(789,849)	(863,406)	(651,962)	(719,638)	(26,258)	(3,487,779)	(5,215,610)

The open delta hedge position of the group at 31 December 2009 was 3.49Moz or 108t (31 December 2008: 5.22Moz or 162t).

⁽¹⁾ Represents a net long gold position and net short US dollars/rands position resulting from both forward sales and purchases for the period.

⁽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 2009.

Summary: All open contracts in the group’s currency hedge position as at 31 December 2009.

Year	2010 – 2015	2008
Rand/US Dollar (000)
Put options purchased
Amount ($)	–	30,000
R per $	–	R11.56
Put options sold
Amount ($)	–	50,000
R per $	–	R9.52
Call options sold
Amount ($)	–	50,000
R per $	–	R11.61
Australian Dollar/US Dollar (000)
Forward contracts
Amount ($)	–	450,000
$ per A$	–	$0.65
Put options purchased
Amount ($)	–	10,000
$ per A$	–	$0.69
Put options sold
Amount ($)	–	10,000
$ per A$	–	$0.76
Call options sold
Amount ($)	–	10,000
$ per A$	–	$0.64
Brazilian Real/US Dollar (000)
Forward contracts
Amount ($)	–	62,340
BRL per $	–	BRL1.86

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 the underlying at a specified price.

A put option gives the put buyer the right, but not the obligation, to sell the underlying 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 the underlying from the call seller at a predetermined price on a predetermined date.

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 counterparts are financial and banking institutions and their credit ratings are regularly monitored.

The group has sufficient undrawn borrowing facilities available to fund working capital requirements (notes 27 and 37).

The following are the contractual maturities of financial liabilities, including interest payments. Non-derivative financial liabilities

	Within one year		Between one and two years		Between two and five years		After five years
	Effective rate		Effective rate		Effective rate		Effective rate		Total
	Million	%	Million	%	Million	%	Million	%	Million
2009
Financial guarantees (3)	–		–		–		13		13
Borrowings	1,332		41		826		47		2,246
– In USD	1,327	2.3	35	3.5	810	3.5	–		2,172
– ZAR in USD equivalent	3	9.8	4	9.8	12	9.8	47	9.8	66
– BRL in USD equivalent	2	6.1	2	6.0	4	6.0	–		8
Trade and other payables	573		–		–		–		573
2008
Financial guarantees (3)	–		–		–		11		11
Borrowings	1,114		882		13		40		2,049
– In USD	1,075	2.6	330	2.6	4	2.9	–		1,409
– ZAR in USD equivalent	3	10.7	3	9.9	9	9.8	40	9.8	55
– AUD in USD equivalent	35	6.1	549	6.1	–		–		584
– BRL in USD equivalent	1	11.7	–		–		–		1
Trade and other payables	488		–		–		–		488

⁽³⁾ Not included in the statement of financial position.

The following are the undiscounted forecast principal cash flows arising from derivative contracts included in the statement of financial position (cash flow hedges and non-hedges).

Derivative financial assets and (liabilities)

Figures in million	Within one year	Between one and two years	Between two and five years	After five years	Total
US Dollar
At 31 December 2009
Cash inflows from assets	277	46	13	–	336
Cash outflows from liabilities	(722)	(543)	(1,468)	(18)	(2,751)
Net cash outflows	(445)	(497)	(1,455)	(18)	(2,415)
At 31 December 2008
Cash inflows from assets	436	121	41	–	598
Cash outflows from liabilities	(213)	(305)	(845)	(292)	(1,655)
Net cash inflows (outflows)	223	(184)	(804)	(292)	(1,057)
SA Rand
At 31 December 2009
Cash inflows from assets	2,068	339	93	–	2,500
Cash outflows from liabilities	(5,367)	(4,038)	(10,915)	(136)	(20,456)
Net cash outflows	(3,299)	(3,699)	(10,822)	(136)	(17,956)
At 31 December 2008
Cash inflows from assets	4,120	1,142	389	–	5,651
Cash outflows from liabilities	(2,011)	(2,888)	(7,991)	(2,755)	(15,645)
Net cash inflows (outflows)	2,109	(1,746)	(7,602)	(2,755)	(9,994)

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. Counterpart credit limits and exposures are reviewed by the Treasury Committee. Where possible, management ensures that netting agreements are in place. No set-off is applied to the statement of financial position due to the different maturity profiles of assets and liabilities. The combined maximum credit risk exposure at the reporting date by class of derivative financial instrument is $335m, R2,490m (2008: $570m, R5,386m) on a contract-by-contract basis.

The combined maximum credit risk exposure of the group is as follows:

Figures in million	2009	2008	2009	2008
	US Dollars		SA Rands
Commodity option contracts	47	56	351	527
Foreign exchange option contracts	–	6	–	57
Forward sale commodity contracts	283	468	2,099	4,426
Forward foreign exchange contracts	–	25	–	239
Gold interest rate swap	–	15	–	137
Warrants on shares	5	–	40	–
Total derivatives	335	570	2,490	5,386
Other investments	60	49	447	461
Other non-current assets	1	1	12	17
Trade and other receivables	80	82	599	773
Cash restricted for use (note 23)	65	44	481	415
Cash and cash equivalents (note 24)	1,100	575	8,176	5,438
Total financial assets	1,641	1,321	12,205	12,490
Financial guarantees	13	11	100	100
Total	1,654	1,332	12,305	12,590

In addition, the group has also guaranteed the hedging commitments of several subsidiary companies as disclosed in note 35.

Credit risk exposure of derivatives netted by counterparts amounts to $104m, R773m (2008: $207m, R1,954m). Trade and other receivables that are past due but not impaired totalled $45m, R337m (2008: $8m, R74m). Trade and other receivables that are impaired totalled $34m, R251m (2008: $2m, R14m) and other investments that are impaired totalled nil (2008: $6m, R60m). No other financial assets are past due but not impaired.

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. The group’s reserves and financial strength have allowed it to arrange unmargined credit lines with counterparts.

Fair value of financial instruments

The estimated fair value of financial instruments are determined at discrete points in time based on relevant market information. The estimated fair value of the group’s financial instruments as at 31 December are as follows:

Type of instrument

	Carrying amount	Fair value	Carrying amount	Fair value
Figures in million	2009		2008
US Dollars
Financial assets
Other investments (note 19)	175	171	66	67
Other non-current assets	1	1	1	1
Trade and other receivables	80	80	82	82
Cash restricted for use (note 23)	65	65	44	44
Cash and cash equivalents (note 24)	1,100	1,100	575	575
Derivatives (4)	335	335	570	570
Financial liabilities
Borrowings (note 27)	1,931	2,153	1,933	1,918
Trade and other payables	573	572	488	488
Derivatives (4)	2,701	2,701	1,762	3,068
SA Rands
Financial assets
Other investments (note 19)	1,302	1,279	625	636
Other non-current assets	12	13	17	17
Trade and other receivables	599	599	773	773
Cash restricted for use (note 23)	481	481	415	415
Cash and cash equivalents (note 24)	8,176	8,176	5,438	5,438
Derivatives (4)	2,490	2,490	5,386	5,386
Financial liabilities
Borrowings (note 27)	14,355	16,004	18,270	18,131
Trade and other payables	4,272	4,266	4,619	4,619
Derivatives (4)	20,080	20,080	16,661	29,006

⁽⁴⁾ Carrying amounts represent on-balance sheet derivatives and fair value includes off-balance sheet normal sale exempted contracts in 2008.

The amounts in the tables above do not necessarily agree with the totals in the notes as only financial assets and liabilities are shown.

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Cash restricted for use and cash and cash equivalents

The carrying amounts approximate fair value because of the short-term duration of these instruments.

Trade and other receivables and trade and other payables

The fair value of the non-current portion of trade and other receivables and trade and other payables has been calculated using market interest rates.

Investments and other non-current assets

Listed equity investments classified as available for sale are carried at fair value while fixed income investments and other non-current assets are carried at amortised cost. The fair value of fixed income investments and other non-current assets has been calculated using market interest rates. The unlisted equity investment is carried at cost. There is no active market for the unlisted equity investment and fair value cannot be reliably measured.

Borrowings

The fair value of the convertible bonds are shown at their closing market value as at 31 December 2009. The interest rate on the remaining borrowings is reset on a short-term floating rate basis, and accordingly the carrying amount is considered to approximate fair value.

Derivatives

The fair value of derivatives are estimated based on ruling market prices, volatilities, interest rates and credit risk as at
31 December 2009 and includes all derivatives carried on the statement of financial position. In 2008, the fair value for derivatives included off-balance sheet normal sale exempted gold contracts, which were not carried on the statement of financial position and were excluded from the carrying amount.

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. The group uses volatility inputs supplied by leading market participants (international banks).

Derivative assets (liabilities) comprise the following:

		Assets				Liabilities
	Normal sale exempted	Cash flow hedge accounted	Non-hedge accounted	Total	Normal sale exempted	Cash flow hedge accounted	Non-hedge accounted	Total
Figures in million				2009
US Dollars
Commodity option contracts	–	–	47	47	–	–	(2,034)	(2,034)
Forward sale commodity contracts	–	–	283	283	–	(37)	(441)	(478)
Gold interest rate swaps	–	–	–	–	–	–	(13)	(13)
Sub-total hedging	–	–	330	330	–	(37)	(2,488)	(2,525)
Embedded derivative	–	–	–	–	–	–	(1)	(1)
Warrants on shares	–	–	5	5	–	–	–	–
Option component of convertible bonds	–	–	–	–	–	–	(175)	(175)
Total derivatives	–	–	335	335	–	(37)	(2,664)	(2,701)
				2008
Commodity option contracts	–	–	56	56	(534)(5)	–	(1,311)	(1,845)
Foreign exchange option contracts	–	–	6	6	–	–	(5)	(5)
Forward sale commodity contracts	–	–	468	468	(748)	(146)	(290)	(1,184)
Forward foreign exchange contracts	–	–	25	25	–	(1)	(9)	(10)
Gold interest rate swaps	–	–	15	15	(24)	–	–	(24)
Total derivatives	–	–	570	570	(1,306)	(147)	(1,615)	(3,068)
		Assets				Liabilities
	Normal sale exempted	Cash flow hedge accounted	Non-hedge accounted	Total	Normal sale exempted	Cash flow hedge accounted	Non-hedge accounted	Total
Figures in million				2009
SA Rands
Commodity option contracts	–	–	351	351	–	–	(15,122)	(15,122)
Forward sale commodity
contracts	–	–	2,099	2,099	–	(276)	(3,273)	(3,549)
Gold interest rate swaps	–	–	–	–	–	–	(99)	(99)
Sub-total hedging	–	–	2,450	2,450	–	(276)	(18,494)	(18,770)
Embedded derivative	–	–	–	–	–	–	(10)	(10)
Warrants on shares	–	–	40	40	–	–	–	–
Option component of
convertible bonds	–	–	–	–	–	–	(1,300)	(1,300)
Total derivatives	–	–	2,490	2,490	–	(276)	(19,804)	(20,080)
	2008
Commodity option contracts	–	–	527	527	(5,048)(5)	–	(12,391)	(17,439)
Foreign exchange option
contracts	–	–	57	57	–	–	(45)	(45)
Forward sale commodity
contracts	–	–	4,426	4,426	(7,069)	(1,385)	(2,744)	(11,198)
Forward foreign exchange
contracts	–	–	239	239	–	(9)	(86)	(95)
Gold interest rate swaps	–	–	137	137	(228)	–	(1)	(229)
Total derivatives	–	–	5,386	5,386	(12,345)	(1,394)	(15,267)	(29,006)

The derivative assets (liabilities) are stated after taking into consideration the impact of credit risk adjustment totalling $150m, R1,113m at 31 December 2009 (2008: $227m, R2,146m).

⁽⁵⁾ Deliverable call options sold.

The group uses the following hierarchy for determining and disclosing the fair value of financial instruments:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices); and Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The following tables set out the group’s financial assets and liabilities measured at fair value by level within the fair value hierarchy as at 31 December:

Type of instrument

Assets measured at fair value

	Level 1	Level 2	Level 3	Total	Level 1	Level 1	Level 1	Total
Figures in million	2009				2008
Financial assets at fair value through profit or loss
Commodity option contracts – non-hedged	–	47	–	47	–	56	–	56
Foreign exchange option contracts – non-hedged	–	–	–	–	–	6	–	6
Forward sale commodity contracts – non-hedged	–	283	–	283	–	468	–	468
Forward foreign exchange contracts – non-hedged	–	–	–	–	–	25	–	25
Warrants on shares	–	5	–	5	–	–	–	–
Gold interest rate swaps – non-hedged	–	–	–	–	–	15	–	15
Available for sale financial assets
Equity securities	111	–	–	111	17	–	–	17
SA Rands
Financial assets at fair value through profit or loss
Commodity option contracts – non-hedged	–	351	–	351	–	527	–	527
Foreign exchange option contracts – non-hedged	–	–	–	–	–	57	–	57
Forward sale commodity contracts – non-hedged	–	2,099	–	2,099	–	4,426	–	4,426
Forward foreign exchange contracts – non-hedged	–	–	–	–	–	239	–	239
Warrants on shares	–	40	–	40	–	–	–	–
Gold interest rate swaps – non-hedged	–	–	–	–	–	137	–	137
Available for sale financial assets
Equity securities	829	–	–	829	164	–	–	164

Liabilities measured at fair value

Level 1	Level 1	Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
Figures in million		2009				2008
US Dollars
Financial liabilities at fair value through profit or loss
Commodity option contracts – non-hedged (6)	–	2,034	–	2,034	–	1,845	–	1,845
Foreign exchange option contracts – non-hedged	–	–	–	–	–	5	–	5
Forward sale commodity contracts – non-hedged (6)	–	441	–	441	–	1,038	–	1,038
Forward foreign exchange contracts – non-hedged	–	–	–	–	–	9	–	9
Gold interest rate swaps – non- hedged (6)	–	13	–	13	–	24	–	24
Option component of convertible bonds	–	175	–	175	–	–	–	–
Embedded derivatives	–	1	–	1	–	–	–	–
Cash flow hedges
Forward sale commodity contracts cash flow hedged	–	37	–	37	–	146	–	146
Forward foreign exchange contracts cash flow hedged	–	–	–	–	–	1	–	1
SA Rands
Financial liabilities at fair value through profit or loss
Commodity option contracts – non-hedged (6)	–	15,122	–	15,122	–	17,439	–	17,439
Foreign exchange option contracts – non-hedged	–	–	–	–	–	45	–	45
Forward sale commodity contracts – non-hedged (6)	–	3,273	–	3,273	–	9,813	–	9,813
Forward foreign exchange contracts – non-hedged	–	–	–	–	–	86	–	86
Gold interest rate swaps – non- hedged (6)	–	99	–	99	–	229	–	229
Option component of convertible bonds	–	1,300	–	1,300	–	–	–	–
Embedded derivatives	–	10	–	10	–	–	–	–
Cash flow hedges
Forward sale commodity contracts cash flow hedged	–	276	–	276	–	1,385	–	1,385
Forward foreign exchange contracts cash flow hedged	–	–	–	–	–	9	–	9

⁽⁶⁾ Fair value of financial instrument liabilities includes off-balance sheet normal sale exempted contracts in 2008.

Sensitivity analysis

Derivatives

A principal part of the group’s management of risk is to monitor the sensitivity of derivative positions in the hedge book to changes in the underlying factors, viz. commodity price, foreign exchange rate and interest rates under varying scenarios. Additionally the group’s management of risk is to monitor the sensitivity of the convertible bond to changes in AngloGold Ashanti Limited’s share price and warrants on shares.

The following table discloses the approximate sensitivities of the US dollars marked-to-market value of the hedge book, warrants on shares and the convertible bond to key underlying factors at 31 December 2009 (actual changes in the timing and amount of the following variables may differ from the assumed changes below).

The table sets out the impact on the marked-to-market value of the hedge book of an incremental parallel fall or rise in the respective yield curves at the beginning of each month, quarter or year (as is appropriate) from 1 January 2010. The yield curves match the maturity dates of the individual derivative positions in the hedge book. These figures incorporate the impact of any option features in the underlying exposures.

	Change in underlying factor (+)	Normal sale exempted (million)	Cash flow hedge accounted (million)	Non-hedge accounted (million)	Total change in fair value (million)	Total change in fair value (million)
US Dollars		2009				2008
Hedge book
Currency (R/$)	Spot(+R1)	–	–	2	2	1
Currency (A$/$)	Spot(+A$0.25)	–	–	2	2	175
Currency (BRL/$)	Spot(+BRL0.25)	–	–	–	–	(5)
Gold price ($/oz)	Spot(+$250)	–	(12)	(903)	(915)	(1,053) (7)
USD interest rate (%)	IR(+0.1%)	–	–	(4)	(4)	(48)
AUD interest rate (%)	IR(+1.5%)	–	–	–	–	(2)
Gold interest rate (%)	IR(+0.1%)	–	–	11	11	66 (8)
Convertible bond
AngloGold Ashanti Limited share price (US$)	Spot (+$1)	–	–	(9)	(9)	–
Warrants on shares
B2Gold Corporation share price	Spot (+C$0.1)	–	–	1	1	–
	Change in underlying factor (-)	Normal sale exempted (million)	Cash flow hedge accounted (million)	Non-hedge accounted (million)	Total change in fair value (million)	Total change in fair value (million)
US Dollars		2009				2008
Hedge book
Currency (R/$)	Spot(-R1)	–	–	(6)	(6)	(3)
Currency (A$/$)	Spot(-A$0.25)	–	–	(2)	(2)	(173)
Currency (BRL/$)	Spot(-BRL0.25)	–	–	–	–	6
Gold price ($/oz)	Spot(-$250)	–	12	789	801	975 (7)
USD interest rate (%)	IR(-0.1%)	–	–	4	4	50
AUD interest rate (%)	IR(-1.5%)	–	–	–	–	2
Gold interest rate (%)	IR(-0.1%)	–	–	(11)	(11)	(68) (8)
Convertible bond
AngloGold Ashanti Limited share price (US$)	Spot (-$1)	–	–	9	9	–
Warrants on shares
B2Gold Corporation share price	Spot (-C$0.1)	–	–	(1)	(1)	–

IR represents interest rate.

⁽⁷⁾ Change in gold price (+) of spot (+$200) and change in gold price (-) of spot (- $200).

⁽⁸⁾ Change in interest rate (+) of IR (+0.5%) and change in interest rate (-) of IR (- 0.5%).

The sensitivity analysis in SA rands can be calculated by applying the exchange rate in US dollars of $1 = R7.4350 at 31 December 2009 (2008: $1 = R9.4550).

Interest rate risk on other financial assets and liabilities (excluding derivatives)

The group also monitors interest rate risk on other financial assets and liabilities.

The following table shows the approximate interest rate sensitivities of other financial assets and liabilities at 31 December 2009 (actual changes in the timing and amount of the following variables may differ from the assumed changes below). As the sensitivity is the same (linear) for both increases and decreases in interest rates only absolute numbers are presented.

	Change in interest rate (%)	Change in interest amount in currency (million)	Change in interest amount US dollars (million)	Change in interest rate (%)	Change in interest amount in currency (million)	Change in interest amount US dollars (million)
Figures in million		2009			2008
Financial assets
USD denominated (%)	1.00	2	2	1.00	1	1
ZAR denominated (%) (9)	1.50	13	2	1.50	10	1
BRL denominated (%)	2.50	4	2	2.50	4	2
NAD denominated (%)	1.50	–	–	1.50	1	–
Financial liabilities
USD denominated (%)	1.00	13	13	1.00	3	3
AUD denominated (%)	1.50	–	–	1.50	8	6

⁽⁹⁾ This is the only interest rate risk for the company.

37 Capital management

The primary objective of managing the group’s capital is to ensure that there is sufficient capital available to support the funding requirements of the group, including capital expenditure, in a way that optimises the cost of capital, maximises shareholders’ returns and ensures that the group remains in a sound financial position.

The group manages and makes adjustments to the capital structure as opportunities arise in the market place, as and when borrowings mature or as and when funding is required. This may take the form of raising equity, market or bank debt or hybrids thereof.

The group raised finance of $1.7bn in July 2008 by way of a rights offer enabling the group to reduce the hedge book and redeem the South African corporate bond.

In December 2008, the group secured a $1bn term facility with Standard Chartered PLC which was applied to repay the $1bn convertible bond due for redemption in February 2009. The Boddington sale closed during June 2009 and the first tranche of $750m payment received was applied in August 2009 towards reducing $500m on the Standard Chartered term facility and $250m towards the creation of a revolver facility for $250m resulting in a total facility of $500m. The Standard Chartered term facility was renegotiated for another year to August 2010 and is further extendable thereafter for another year to August 2011.

In addition, during May 2009 the group secured a successful five year convertible bond issue raising $732.5m. The instrument carries a competitive coupon rate of 3.5% and a conversion price of $47.6126, a premium of 37.5% above the VWAP (volume weighted average price) on the day of the issue. The financing extends the tenor for some of the debt and reduces borrowing costs on the term facility. In July 2009 the group applied $797m to further reduce the hedge book and improve earnings leverage to a higher gold price.

During September 2009, $284m before underwriting discount and issue expenses was raised through an offering of 7,624,162 ordinary shares priced at $37.25 or R288.32 per ADS to part fund the acquisition of an effective 45% interest in the Kibali gold project. The second tranche of the Boddington sale for $240m received towards the end of 2009 was applied to reduce debt.

All the above has restructured the statement of financial position to a net debt to EBITDA of 0.52 times which is well below the banking covenant limit of 3.0 times.

The group monitors capital using a gearing ratio, which is defined as net debt divided by EBITDA. The elements considered to form part of capital are as listed in the Non-GAAP disclosure.

Figures in million	2009	2008
US Dollars
Borrowings (note 27)	1,931	1,933
Corporate office finance lease (note 27)	(35)	(27)
Unamortised portion of the convertible bond	137	(4)
Cash restricted for use (note 23)	(65)	(44)
Cash and cash equivalents (note 24)	(1,100)	(575)
Net debt	868	1,283
EBITDA (1)	1,663	1,131
Gearing ratio (Net debt to EBITDA)	0.52:1	1.13:1
SA Rands
Borrowings (note 27)	14,355	18,270
Corporate office finance lease (note 27)	(258)	(254)
Unamortised portion of the convertible bond	1,019	(38)
Cash restricted for use (note 23)	(481)	(415)
Cash and cash equivalents (note 24)	(8,176)	(5,438)
Net debt	6,459	12,125
EBITDA (1)	13,771	9,237
Gearing ratio (Net debt to EBITDA)	0.47:1	1.31:1

⁽¹⁾ Refer to Non-Gaap note.