Group 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 date
IAS 39 & IFRS 7	Reclassification Amendments to IAS 39 Financial Instruments: Recognition and Measurement and IFRS 7 Financial Instruments: Disclosures	For reclassifications on or after 1 November 2008, date of reclassification or for previous reclassifications, 1 July 2008

The adoption of these amendments to standards and interpretations did not have any effect on the financial position or performance of the group.

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 1	First-time Adoption of International Financial Reporting Standards	1 January 2009
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 3	Business Combinations (revised)	1 July 2009
IFRS 8	Operating Segments	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 27	Consolidated and Separate Financial Statement (revised)	1 July 2009
IAS 39	Amendment – Eligible Hedged Items	1 July 2009
IFRSs	Annual Improvements Project – May 2008	1 January 2009 (amendment to IFRS 5 – 1 July 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
IFRIC 17	Distributions of Non-cash Assets to Owners	1 July 2009
IFRIC 18	Transfers of Assets from Customers	1 July 2009

The group has assessed the significance of these new standards, amendments to standards and new interpretations, which will be applicable from 1 January 2009 and later years and concluded that they will have no material financial impact. Currently, we do not expect IFRS 8 to have an impact on the geographic segments definition but IFRS 8 may have an impact on the amounts reported using the requirement to report data as reported to the Chief Operating Decision Maker, when adopted.

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

1. 1.1Basis 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 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 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 minority interests is reflected as an equity transaction. The entire difference between the cost of the additional interest and the minority'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.

2. 1.2 Changes in accounting policies

   IAS 31 – Interests in Joint Ventures

   In terms of IAS 31 "Interests in Joint Ventures" the group has previously proportionately consolidated jointly controlled entities. During the current year the group changed its accounting policy to account for these entities using the equity method, the alternative treatment permitted by this standard. Management's judgement is that, due to the nature of the group's jointly controlled entities, the change in accounting policy will result in more reliable and more relevant information and is in accordance with international trends in accounting. There is no effect on the results and financial position in 2008 as the policy changed retrospectively. The effect of the change in the accounting policy is as follows:

   Group income statement For the year ended 31 December

   2007	Figures in million	2007
   SA Rands		US Dollars
   (2,507)	Revenue	(359)
   (1,951)	Gold income	(278)
   1,254	Cost of sales	178
   (88)	Loss on non-hedge derivatives and other commodity contracts	(12)
   (785)	Gross loss	(112)
   (9)	Corporate administration and other expenses	(2)
   15	Exploration costs	3
   55	Operating special items	8
   (724)	Operating loss	(103)
   (10)	Interest received	(2)
   (10)	Exchange gain	(2)
   35	Finance costs and unwinding of obligations	5
   404	Share of equity accounted investments’ profit	58
   (305)	Loss before taxation	(44)
   305	Taxation	44
   –	Loss for the year	–

   The change in accounting policy had no effect on basic or diluted earnings per ordinary share.

   Group balance sheet As at 31 December

   2007	Figures in million	2007
   SA Rands		US Dollars
   	ASSETS
   	Non-current assets
   (688)	Tangible assets	(101)
   (137)	Intangible assets	(20)
   2,043	Investments in associates and equity accounted joint ventures	300
   (96)	Other investments	(14)
   (410)	Inventories	(60)
   (179)	Trade and other receivables	(26)
   (113)	Deferred taxation	(17)
   420		62
   	Current assets
   (850)	Inventories	(125)
   (203)	Trade and other receivables	(30)
   (135)	Cash and cash equivalents	(19)
   (1,188)		(174)
   (768)	Total assets	(112)
   	Non-current liabilities
   (25)	Borrowings	(4)
   (185)	Environmental rehabilitation and other provisions	(27)
   (59)	Deferred taxation	(9)
   (269)		(40)
   	Current liabilities
   (136)	Current portion of borrowings	(20)
   (231)	Trade, other payables and deferred income	(33)
   (132)	Taxation	(19)
   (499)		(72)
   (768)	Total liabilities	(112)

   Group cash flow For the year ended 31 December

   2007	Figures in million	2007
   SA Rands		US Dollars
   	Cash flows from operating activities
   (2,464)	Receipts from customers	(353)
   1,468	Payments to suppliers and employees	215
   (996)	Cash generated from operations	(138)
   443	Dividends received from equity accounted investments	65
   400	Taxation paid	57
   (153)	Net cash inflow from operating activities	(16)
   	Cash flows from investing activities
   	Capital expenditure
   28	– project expenditure	4
   32	– stay-in-business expenditure	5
   (13)	Interest received	(2)
   47	Net cash outflow from investing activities	7
   	Net cash flows from financing activities
   (193)	Proceeds from borrowings	(27)
   280	Repayment of borrowings	40
   9	Finance costs paid	1
   96	Net cash inflow from financing activities	14
   (10)	Net decrease in cash and cash equivalents	5
   45	Translation	–
   (170)	Cash and cash equivalents at beginning of year	(24)
   (135)	Cash and cash equivalents at end of year	(19)

3. 1.3Significant 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 Mineral Reserves 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 (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 Mineral Reserves 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 exceed the estimated mine life based on proved and probable mineral reserves 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 mineral reserves. This would generally arise when there are significant changes in any of the factors or assumptions used in estimating mineral reserves.

   These factors could include:

   • changes in proved and probable mineral reserves;
   • the grade of mineral reserves 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 mineral reserves 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 pre-production 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. 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 2008 was $128m, R1,208m (2007: $398m, R2,707m). The carrying amount of tangible assets at 31 December 2008 was $4,345m, R41,081m (2007: $6,621m, R45,095m).

   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 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 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 balance sheet 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 2008:

   • deferred tax asset: $50m, R475m (2007: $63m, R430m)
   • deferred tax liability: $617m, R5,838m (2007: $1,042m, R7,100m)
   • taxation liability: $109m, R1,033m (2007: $167m, R1,137m)

   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 2008 was $376m, R3,562m (2007: $422m, R2,872m).

   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 spot metal 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 tonnes 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.

   The carrying amount of inventories (excluding finished goods and mine operating supplies) for the group at 31 December was $585m, R5,518m (2007: $542m, R3,688m).

   Recoverable tax, rebates, levies and duties

   In a number of countries, particularly in Africa, AngloGold Ashanti Limited is due refunds of input tax and levies 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 for the group at 31 December 2008 was $99m, R942m (2007: $124m, R840m).

   Pension plans and post-retirement medical aid obligations

   The determination of AngloGold Ashanti'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 on 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 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 2008 was $135m, R1,276m (2007: $138m, R944m).

   Ore Reserve estimates

   Ore Reserves are estimates of the amount of product that can be economically and legally extracted from the group's properties. In order to calculate Ore Reserves, estimates and assumptions are required about a range of geological, technical and economic factors, including but not limited to 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 Reserves 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 Reserves in accordance with the SAMREC code.

   Because the economic assumptions used to estimate Ore Reserves change from period to period, and because additional geological data is generated during the course of operations, estimates of Ore Reserves may change from period to period. Changes in reported Ore Reserves 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 method, or where the useful economic lives of assets change;
   • overburden removal costs recorded on the balance sheet or charged in the income statement may change due to changes in stripping ratios or the units-of-production method of depreciation;
   • decommissioning site restoration and environmental provisions may change where changes in estimated Ore Reserves 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 2008 was $nil, R3m (2007: $55m, R372m).

   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 $43m, R355m (2007: $33m, R231m).

   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

   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 realised in connection with transactions between the group and jointly controlled entities are eliminated in proportion to share ownership. Such profits 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.

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

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

   Profits realised in connection with transactions between the group and associated companies are eliminated in proportion to share ownership. Such profits 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.

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

   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 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:

   • equity items other than retained earnings are translated at the closing rate on each balance sheet date;
   • retained earnings are converted at historical average exchange rates;
   • assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;
   • 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); and
   • all resulting exchange differences are recognised as a separate component of equity (foreign currency translation).

   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 shareholders' equity 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

   A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments. Management has determined that the group operates primarily in one business segment, gold. A geographical segment provides products or services within a particular economic environment that is subject to risks and returns that are different from those of segments operating in other economic environments.

   Tangible assets

   Tangible assets are recorded at cost less accumulated amortisation and impairments. Cost includes pre-production 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 reduce 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 period of the lease.

   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 balance sheet 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 Mineral Resources 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 Mineral Reserves. Proved and probable Mineral Reserves 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 Mineral Reserves. Other tangible assets comprising vehicles and computer equipment, are depreciated by the straight-line method over their estimated useful lives.

   Land

   Land is not depreciated and is 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 Mineral Reserves.

   Dumps are amortised over the period of treatment.

   Exploration and evaluation assets

   All exploration costs are expensed until the directors conclude that it is probable that a future economic benefit will 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 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 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 Reserves 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 resources 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 noncurrent 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. Byproducts 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 required to 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 balance sheet 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 balance sheet 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 balance sheet. 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 our employee benefit expense 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 balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet 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.

   Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are immediately recorded in the statement of recognised income and expense.

   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 the statement of recognised income and expense 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 balance sheet 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 comprehensive income 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 comprehensive income.

   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.

   Environmental rehabilitation obligations in respect of the non-South African operations are not funded through an established trust fund. Bank guarantees and reclamation bonds are provided for some of these liabilities.

   Decommissioning costs

   The provision for decommissioning represents the cost that will arise from rectifying damage caused before production commenced. Accordingly an 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 balance sheet 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 balance sheet 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 balance sheet 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 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 balance sheet date.

   Special items

   Items of income and expense that are material and require separate disclosure, in accordance with IAS 1.86, 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 income.

   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 income.

   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 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 equity (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. Then 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 equity 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 equity 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 balance sheet 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 gold sales 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 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 balance sheet 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 equity (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 is 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 is 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 is 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 re-acquired 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

Based on risks and returns the directors consider that the primary reporting format is by business segment. The directors consider that there is only one business segment being mining, extraction and production of gold. Therefore disclosures for the primary segment have already been given in these financial statements.

The secondary reporting format is by geographical analysis by origin and destination.

Group analysis by origin is as follows:

	Net operating assets		Total assets		Capital expenditure
Figures in million	2008	Restated 2007	2008	Restated 2007	2008	Restated 2007
US Dollars
South Africa (1)	1,453	1,843	1,861	2,293	337	361
Argentina	180	189	224	244	16	20
Australia (1) (2)	312	791	1,368	1,278	439	281
Brazil (2) (4)	618	524	824	709	148	142
Ghana	824	1,758	1,013	1,953	166	119
Guinea	242	220	320	312	22	21
Mali (3)	–	–	223	254	7	9
Namibia	37	38	71	79	12	6
Tanzania (2)	638	1,002	835	1,418	53	27
USA	490	426	573	530	27	23
Other, including corporate and non-gold producing subsidiaries (1)	105	159	748	638	12	50
	4,899	6,950	8,060	9,708	1,239	1,059
São Bento assets acquired (4)					(38)	–
					1,201	1,059
Equity accounted investments included above					(7)	(8)
					1,232	1,051

	Net operating assets		Total assets		Capital expenditure
Figures in million	2008	Restated 2007	2008	Restated 2007	2008	Restated 2007
SA Rands
South Africa (1)	13,739	12,550	17,599	15,616	2,779	2,535
Argentina	1,701	1,287	2,121	1,659	135	141
Australia (1) (2)	2,948	5,386	12,936	8,705	3,618	1,975
Brazil (2) (4)	5,846	3,571	7,795	4,826	1,222	995
Ghana	7,791	11,969	9,576	13,301	1,370	836
Guinea	2,291	1,496	3,028	2,127	178	146
Mali (3)	–	–	2,110	1,728	61	61
Namibia	346	258	668	536	98	43
Tanzania (2)	6,029	6,826	7,895	9,654	433	187
USA	4,636	2,898	5,422	3,608	221	161
Other, including corporate and non-gold producing subsidiaries (1)	989	1,092	7,052	4,353	103	364
	46,316	47,333	76,202	66,113	10,218	7,444
São Bento assets acquired (4)					(313)	–
					9,905	7,444
Equity accounted investments included above					(59)	(60)
					10,159	7,384

⁽¹⁾Assets held for sale in respect of Boddington $792m, R7,487m (2007: nil) are included in the Australian segment and in respect of the Weltevreden mining participation rights of nil (2007: $15m, R100m) are included in the South Africa segment. Properties held for sale by Rand Refinery of $1m, R10m (2007: $1m, R10m) and exploration properties acquired from Trans-Siberian Gold plc of nil (2007: $15m, R100m) are included in the Other segment (note 25).

⁽²⁾Includes allocated goodwill of $105m, R998m (2007: $266m, R1,814m) for Australia, $23m, R210m (2007: $23m, R151m) for Brazil, and nil (2007: $109m, R742m) for Tanzania (note 17).

⁽³⁾Equity accounted investments held.

⁽⁴⁾The São Bento assets are part of the Brazil segment.

	Gold production
	(oz '000)		(kg)
	2008	2007	2008	2007
South Africa	2,099	2,328	65,283	72,429
Argentina	154	204	4,799	6,338
Australia	433	600	13,477	18,675
Brazil	407	408	12,669	12,689
Ghana	557	527	17,328	16,388
Guinea	333	280	10,350	8,715
Mali	409	441	12,707	13,703
Namibia	68	80	2,126	2,496
Tanzania	264	327	8,203	10,166
USA	258	282	8,016	8,766
	4,982	5,477	154,958	170,365

	Gold income
Figures in million	2008	Restated 2007	2008	Restated 2007
	US Dollars		SA Rands
Geographical analysis of gold income by origin is as follows:
South Africa	1,466	1,399	12,068	9,843
Argentina	116	140	984	988
Australia	280	348	2,338	2,437
Brazil	330	285	2,739	2,001
Ghana	486	337	3,982	2,365
Guinea	334	211	2,724	1,483
Mali	186	278	1,568	1,951
Namibia	39	52	327	364
Tanzania	328	114	2,628	807
USA	240	116	1,984	813
	3,805	3,280	31,342	23,052
Equity accounted investments included above	(186)	(278)	(1,568)	(1,951)
(note 3)	3,619	3,002	29,774	21,101
Geographical analysis of gold income by destination is as follows:
South Africa	1,370	1,039	11,285	7,301
North America	1,057	741	8,706	5,208
Australia	7	90	60	632
Asia	255	267	2,099	1,875
Europe	307	734	2,532	5,163
United Kingdom	809	409	6,660	2,873
	3,805	3,280	31,342	23,052
Equity accounted investments included above	(186)	(278)	(1,568)	(1,951)
(note 3)	3,619	3,002	29,774	21,101

Restated 2007	2008	Figures in million	2008	Restated 2007
SA Rands			US Dollars
		3 REVENUE
		Revenue consists of the following principal categories:
21,101	29,774	Gold income (note 2)	3,619	3,002
457	480	By-products (note 4)	58	66
16	–	Dividend received from other investments	–	2
		Interest received (note 34)
30	18	– loans and receivables (1)	2	4
12	15	– held-to-maturity investments	2	2
37	52	– available-for-sale assets	6	6
223	451	– cash and cash equivalents	56	31
21,876	30,790		3,743	3,113
		(1) Interest received from loans and receivables comprises:
7	4	– related parties	–	1
23	14	– other loans	2	3
30	18		2	4
		4 COST OF SALES
12,799	17,151	Cash operating costs (1)	2,081	1,824
(457)	(480)	By-products (note 3)	(58)	(66)
12,342	16,671		2,023	1,758
492	634	Royalties	78	70
55	100	Other cash costs	12	8
12,889	17,405	Total cash costs	2,113	1,836
131	72	Retrenchment costs (note 10)	9	19
422	218	Rehabilitation and other non-cash costs	28	61
13,442	17,695	Production costs	2,150	1,916
3,980	4,620	Amortisation of tangible assets (notes 9, 16 and 34)	560	567
14	21	Amortisation of intangible assets (notes 17 and 34)	2	2
17,436	22,336	Total production costs	2,712	2,485
(195)	222	Inventory change	16	(27)
17,241	22,558		2,728	2,458
		(1) Cash operating costs comprises:
4,803	5,902	– salaries and wages	718	684
3,663	4,736	– stores and other consumables	574	522
2,448	3,684	– fuel, power and water	448	349
1,972	2,516	– contractors	305	281
(87)	313	– services and other charges	36	(12)
12,799	17,151		2,081	1,824
		5 OTHER OPERATING EXPENSES
23	(8)	Pension and medical defined benefit provisions Claims filed by former employees in respect of loss of employment, work-related accident injuries and diseases, governmental fiscal claims and costs of old tailings	2	3
97	37	operations	4	15
14	–	Miscellaneous	–	2
134	29		6	20
		6 OPERATING SPECIAL ITEMS
136	(198)	Indirect tax (reimbursement) expenses (1)	(22)	19
		Siguiri royalty payment calculation dispute with the Guinean
27	26	Administration	3	4
23	–	Buildings located at Siguiri destroyed by fire (note 14)	–	3
–	10	Contractor termination costs at Iduapriem	1	–
		Impairment net of reversals of tangible assets
6	14,792	(notes 14 and 16)	1,493	1
–	1,080	Impairment of goodwill (notes 14 and 17)	109	–
–	42	Impairment of investments (notes 14 and 19) (2)	6	–
		Net profit on disposal and abandonment of land, mineral
(79)	(381)	rights, tangible assets and exploration properties (note 14) (3)	(52)	(10)
		Profit on disposal of investment in Nufcor International
–	(14)	Limited (note 14) (4)	(2)	–
–	(19)	Nufcor Uranium Trust contributions by other members (note 1)	(3)	–
–	76	ESOP costs resulting from rights offer (note 11)	9	–
(29)	(35)	Recovery of exploration costs	(4)	(4)
84	15,379	(note 34)	1,538	13

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

• Reversal of provision of $6m, R56m following an agreement with the Guinea Revenue Authority on withholding tax for which $7m, R48m was provided in 2007;
• Reversal of provision of $15m, R135m 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 of which $3m, R21m was provided in 2007 and the balance of $13m, R92m raised prior to 2007;
• Reversal of provision relating to other indirect tax previously provided in 2007 of $1m, R7m;
• Audited and approved VAT claims rejected by the Tanzanian Revenue Authority nil (2007: $3m, R26m);
• AngloGold Ashanti Brasil Mineração anticipate that the recovery conditions of VAT will not be met and recovered from the Brazilian Government nil (2007: $5m, R34m).

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

⁽³⁾The profit on disposal and abandonment of land, mineral rights, tangible assets and exploration properties includes amongst others the following:

• In late February 2008, certain North American royalty and production related payment interests of the EI Chante and Marigold projects were sold to Royal Gold for $14m, R110m;
• On 16 May 2008, AngloGold Ashanti announced that it had completed the transaction with B2Gold Corporation in which B2Gold Corporation acquired from AngloGold Ashanti, additional interests in certain mineral properties in Colombia. In exchange, B2Gold issued to AngloGold Ashanti, 25 million common shares and 21.4 million common share purchase warrants in B2Gold $33m, R225m;
• Recognition of deferred proceeds $8m, R61m relating to the disposal of the La Rescatada Project situated in South America to Aruntani SAC;
• On 23 August 2006, AngloGold Ashanti Limited announced that it had entered into an agreement with Central African Gold plc (CAG) to sell its entire business undertaking for $40m, R280m, related to the Bibiani mine and Bibiani North prospecting permit and to transfer all assets, including all of Bibiani's employees, fixed mining and non-mining assets, inventory, trade debtors and intellectual property as well as the Bibiani lease and the North prospecting license, and procure the cessation and delegation of all contracts related to Bibiani to CAG. The delivery of the North lease permit valued at $4m, R28m was not concluded at 31 December 2006, consequently during 2006 only proceeds of $36m, R253m were recognised, resulting in a profit of $25m, R173m. The North lease permit was delivered during 2007 resulting in recognition of proceeds and profits of $4m, R31m;
• Sundry (loss) profit on disposal and abandonment of land, mineral rights, tangible assets and exploration properties amounted to ($3m), (R15m) (2007: $6m, R48m).

⁽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.

Restated 2007	2008	Figures in million	2008	Restated 2007
SA Rands			US Dollars
		7 FINANCE COSTS AND UNWINDING OF OBLIGATIONS
353	417	Finance costs on convertible bonds (1)	51	50
214	141	Finance costs on corporate bond (1)	18	31
125	403	Finance costs on bank loans and overdrafts (1)	49	18
30	10	Discounting of long-term trade and other receivables	1	4
22	27	Finance lease charges	3	3
17	32	Other	4	3
761	1,030		126	109
(68)	(263)	Amounts capitalised (note 16)	(32)	(10)
693	767		94	99
81	79	Unwinding of decommissioning obligation (note 29)	10	11
69	79	Unwinding of restoration obligation (note 29)	10	10
2	1	Unwinding of other provisions (note 29)	–	–
845	926	(note 34)	114	120
		(1)Finance costs have been determined using the effective interest rate method.
		8 SHARE OF EQUITY ACCOUNTED INVESTMENTS’ (LOSS) PROFIT
2,071	1,677	Revenue	199	295
(1,269)	(2,025)	Operating expenses	(244)	(180)
802	(348)	Gross (loss) profit	(45)	115
(55)	30	Operating special item (note 14)	3	(8)
(42)	(26)	Finance costs	(3)	(6)
705	(344)	(Loss) profit before taxation	(45)	101
(304)	(444)	Taxation	(54)	(43)
401	(788)	(Loss) profit after taxation	(99)	58
(161)	(389)	Impairment (note 14) (1)	(39)	(23)
240	(1,177)	(note 34)	(138)	35
		(1) In 2008, the Trans-Siberian Gold plc, Morila Limited, AGA-Polymetal Strategic Alliance 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 (2007: $23m, R161m) were recorded. Deferred taxation on impairments amounts to $5m, R51m (2007: nil).
		9 LOSS BEFORE TAXATION
		Loss before taxation is arrived at after taking account of:
		Auditors' remuneration
37	49	– audit fees	6	5
18	(1)	– (over) under provision prior year	–	3
12	13	– other assurance services	1	2
67	61		7	10
		Amortisation of tangible assets
3,962	4,591	– owned assets	556	564
18	29	– leased assets	4	3
3,980	4,620	(notes 4, 16 and 34)	560	567
56	129	Grants for educational and community development	16	8
359	243	Operating lease charges	30	51
		10 EMPLOYEE BENEFITS
		Employee benefits including executive directors' salaries
5,602	6,823	and other benefits	826	797
		Health care and medical scheme costs
393	438	– current medical expenses	53	56
94	94	– defined benefit post-retirement medical expenses	12	13
		Pension and provident plan costs
355	403	– defined contribution	49	51
(19)	(24)	– defined benefit pension plan	(3)	(3)
131	72	Retrenchment costs (note 4)	9	19
231	329	Share-based payment expense (note 11)	40	33
		Included in cost of sales, other operating expenses,
		operating special items and corporate administration
6,787	8,135	and other expenses	986	966
		Actuarial defined benefit plan expense analysis
		Defined benefit post-retirement medical
6	6	– current service cost	1	1
92	91	– interest cost	11	13
(4)	(3)	– expected return on plan assets	–	(1)
94	94		12	13
		Defined benefit pension plan
47	49	– current service cost	6	7
125	144	– interest cost	17	18
(191)	(217)	– expected return on plan assets	(26)	(28)
(19)	(24)		(3)	(3)
		Actual return on plan assets
191	(62)	– defined benefit pension and medical plans	(8)	27
		Refer to the Remuneration report for details of directors’ emoluments.
		11 SHARE-BASED PAYMENTS
		Share incentive schemes No new 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 re-issued to new employees. The total cost relating to share incentive schemes was $43m, R355m (2007: $33m, R231m) and is made up as follows:
64	59	Employee Share Ownership Plan (ESOP) – Free shares	7	9
64	57	Employee Share Ownership Plan (ESOP) – E ordinary shares to employees	7	9
–	50	Employee Share Ownership Plan (ESOP) – Rights offer to employees	6	–
70	117	Bonus Share Plan (BSP)	14	10
11	46	Long-Term Incentive Plan (LTIP)	6	2
23	–	Performance-related share-based remuneration scheme (PRO) – 1 November 2004	–	3
232	329	Total employee compensation cost	40	33
(1)	–	Employee compensation cost related to equity accounted joint ventures	–	–
231	329	Total employee compensation cost excluding equity accounted joint ventures (Note 10)	40	33
–	26	Rights offer to Izingwe Holdings (Proprietary) Limited (Izingwe)	3	–
231	355	Total share incentive scheme cost	43	33
		Included in:
133	176	– cost of sales	21	19
98	103	–corporate administration and other expenses	13	14
–	76	– operating special items (note 6)	9	–
231	355		43	33

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 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 2008 is R188.48 (2007: R305.99; 2006: R320.00). The fair value 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 in 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
SA Rands 2007			SA Rands 2008
928,590	–	Awards outstanding at beginning of year	910,260	–
77,490	–	Awards granted during the year	57,442	–
(49,230)	–	Awards lapsed during the year	(54,292)	–
(46,590)	–	Awards exercised during the year	(57,761)	–
910,260	–	Awards outstanding at end of year	855,649	–
–	–	Awards exercisable at end of year	–	–

Up to 31 December 2008, the rights to a total of 54,292 (2007: 49,230) shares were surrendered by the participants. A total of 57,761 (2007: 46,590) shares were allotted to deceased, retired or retrenched employees. The income statement charge for the year was $7m, R59m (2007: $9m, R64m).

The company awarded the right to acquire approximately one AngloGold Ashanti 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 of the E ordinary shares awarded to employees on 1 November 2008 was R13.40 per share (2007: R79.00; 2006: R105.00). 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
SA Rands 2007			SA Rands 2008
2,785,770	289.00	Awards outstanding at beginning of year	2,730,780	307.49
232,470	307.13	Awards granted during the year	172,354	323.89
(147,690)	296.97	Awards lapsed during the year	(162,904)	315.82
–	–	Awards cancelled during the year	(162,363)	317.93
(139,770)	298.15	Awards converted during the year	(10,926)	310.36
2,730,780	307.49	Awards outstanding at end of year	2,566,941	327.15

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 $7m, R57m (2007: $9m, R64m).

Up to 31 December 2008, the rights to a total of 162,904 (2007: 147,690) shares were surrendered by participants. A total of 10,926 (2007: 139,770) shares were allotted to deceased, retired or retrenched employees. A total of 162,363 (2007: nil) 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 ordinary share for every four E ordinary shares held during the rights offer finalised in July 2008. The benefit to employees were 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. 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
SA Rands 2007			SA Rands 2008
1,400,000	289.00	E ordinary shares outstanding at beginning of year	1,400,000	307.49
–	–	E ordinary shares granted during the year	–	–
–	–	E ordinary shares cancelled during the year	–	–
–	–	E ordinary shares converted during the year	–	–
1,400,000	307.49	E ordinary shares outstanding at end of year	1,400,000	327.15

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 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. 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. The AngloGold Ashanti Limited's Remuneration Committee has at their 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 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 made, the following information is available:

Award date	2005	2006	2007	2008
Calculated fair value	R197.50	R308.00	R322.00	R267.05
Vesting date	4 May 2008	8 Mar 2009	1 Jan 2010	1 Jan 2011
Expiry date	3 May 2015	7 Mar 2016	31 Dec 2016	31 Dec 2017

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
SA Rands 2007			SA Rands 2008
480,585	–	Awards outstanding at beginning of year	685,668	–
296,495	–	Awards granted during the year	389,973	–
–	–	Awards granted as a result of rights offer	75,103	–
(50,704)	–	Awards lapsed during the year	(90,259)	–
(40,708)	–	Awards exercised during the year	(115,458)	–
685,668	–	Awards outstanding at end of year	945,027	–
–	–	Awards exercisable at end of year	136,371	–

Up to 31 December 2008, the rights to a total of 90,259 (2007: 50,704) shares were surrendered by the participants. A total of 37,479 (2007: 40,708) shares were allotted to deceased, retired or retrenched employees.

The income statement charge for the year was $14m, R117m (2007: $10m, R70m).

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 be 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 2005 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 40% of an award will be determined by real growth (above US inflation) in adjusted earnings per share over the performance period;
• up to 20% 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 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 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 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 made, the following information is available:

Award date	2005	2006	2007	2008
Calculated fair value	R197.50	R327.00	R322.00	R267.05
Vesting date	4 May 2008	1 Aug 2009	1 Jan 2010	1 Jan 2011
Expiry date	3 May 2015	31 Jul 2016	31 Dec 2016	31 Dec 2017

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

Number of shares	Weighted average exercise price	Figures in million	Number of shares	Weighted average exercise price
SA Rands 2007			SA Rands 2008
660,175	–	Awards outstanding at beginning of year	783,425	–
321,664	–	Awards granted during the year	497,343	–
–	–	Awards granted as a result of rights offer	74,988	–
(198,414)	–	Awards lapsed during the year	(321,668)	–
–	–	Awards exercised during the year	(43,643)	–
783,425	–	Awards outstanding at end of year	990,445	–
–	–	Awards exercisable at end of year	64,560	–

The income statement charge for the year was $6m, R46m (2007: $2m, R11m).

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 4.33 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
SA Rands 2007			SA Rands 2008
885,900	221.90	Options outstanding at beginning of year	449,900	221.90
–	–	Options granted as a result of rights offer	83,324	194.00
(21,400)	221.90	Options lapsed during the year	(16,633)	218.63
(414,600)	221.90	Options exercised during the year	(132,800)	220.69
–	–	Options expired during the year	–	–
449,900	221.90	Options outstanding at end of year	383,791	216.48
449,900	221.90	Options exercisable at end of year	383,791	216.48

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 5.83 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
SA Rands 2007			SA Rands 2008
911,400	228.00	Options outstanding at beginning of year	672,900	228.00
–	–	Options granted as a result of rights offer	131,348	194.00
(40,526)	228.00	Options lapsed during the year	(80,886)	221.26
(197,974)	228.00	Options exercised during the year	(174,656)	226.09
–	–	Options expired during the year	–	–
672,900	228.00	Options outstanding at end of year	548,706	221.33
672,900	228.00	Options exercisable at end of year	548,706	221.33

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 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 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
SA Rands 2007			SA Rands 2008
788,500	299.50	Options outstanding at beginning of year	515,400	299.50
–	–	Options granted as a result of rights offer	98,410	194.00
(23,400)	299.50	Options lapsed during the year	(78,819)	294.25
(249,700)	299.50	Options exercised during the year	(77,655)	288.11
–	–	Options expired during the year	–	–
515,400	299.50	Options outstanding at end of year	457,336	279.64
515,400	299.50	Options exercisable at end of year	457,336	279.64

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 1.74 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
• 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
SA Rands 2007			SA Rands 2008
473,260	125.82	Options outstanding at beginning of year	206,960	124.69
–	–	Options granted as a result of rights offer	41,806	194.00
–	–	Options lapsed during the year	(3,942)	194.00
(266,300)	125.89	Options exercised during the year	(128,333)	124.68
–	–	Options expired during the year	–	–
206,960	124.69	Options outstanding at end of year	116,491	139.82
206,960	124.69	Options exercisable at end of year	116,491	139.82

No grants were made with respect to the time related scheme options and performance related options since 2005. The options granted during the year, 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 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

Restated 2007	2008	Figures in million	2008	Restated 2007
SA Rands			US Dollars
		12 TAXATION
		South African taxation
371	–	Mining tax (1)	–	55
212	85	Non-mining tax (2)	12	29
47	42	Under provision prior year	6	6
		Deferred taxation:
285	(161)	Temporary differences (3)	(30)	41
		Unrealised non-hedge derivatives and other
(634)	841	commodity contracts	89	(93)
57	62	Change in estimated deferred tax rate (4)	6	8
–	(70)	Change in statutory tax rate (5)	(9)	–
338	799		74	46
		Foreign taxation
726	651	Normal taxation (1)	79	103
(25)	(41)	Over provision prior year	(5)	(4)
		Deferred taxation:
(258)	(3,747)	Temporary differences (3)	(372)	(37)
(47)	259	Unrealised non-hedge derivatives and other commodity contracts	27	(7)
396	(2,878)		(271)	55
734	(2,079)		(197)	101
		Tax reconciliation A reconciliation of the effective tax rate charged in the income statement to the prevailing corporate tax rate is set out in the following table:
%	%		%	%
(22)	12	Effective tax rate	14	(19)
		Disallowable items:
59	8	Derivative losses	12	53
(3)	2	Share of equity accounted investments’ profit	4	(2)
5	(2)	Other	(2)	5
(3)	8	Foreign income tax allowances and rate differentials	8	(2)
(4)	(1)	Current tax assets previously unrecognised	(1)	(4)
7	1	Current unrecognised tax assets	1	6
2	–	Change in estimated deferred tax rate (4)	(1)	1
1	–	Prior year under provision	–	1
(5)	7	Other	–	(2)
37	35	Estimated corporate tax rate (5)	35	37

⁽¹⁾Included in South African mining taxation is tax on the disposal of tangible assets of nil (2007: $3m, R21m). There is no mining tax charge in 2008 as the mining income was primarily offset by the non-mining losses from the accelerated non-hedge derivative closeouts. Included in normal foreign taxation is tax on the disposal of tangible assets of $1m, R10m (2007: $3m, R19m) (note 14).

⁽²⁾In South Africa, non-mining income is taxed at the higher non-mining tax rate of 35% (2007: 37%) as the company has elected to be exempt from STC. Companies who elect to be subject to STC are taxed at the lower company tax rate of 28% (2007: 29%) 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, R75m (2007: tax charge $1m, R6m). Included in temporary differences of foreign taxation is a tax credit on the impairment and disposal of tangible assets of $387m, R3,840m (2007: $4m, R24m) (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 $6m, R62m (2007: $8m, R57m).

⁽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.

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 (2007: Y = 45 – 225/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.

Restated 2007	2008	Figures in million	2008	Restated 2007
SA Rands			US Dollars
1,692	3,204	Unrecognised tax losses Unrecognised tax losses of the US operations which are available for offset against future profits earned in the USA	339	248
–	1,741	Unrecognised tax losses of the Australian operations which are available for offset against future capital gains in Australia	184	–
1,692	4,945		523	248
		Analysis of tax losses Tax losses available to be used against future profits
8	–	utilisation required within one year	–	1
–	1,240	utilisation required between two and five years	131	–
1,684	3,705	utilisation in excess of five years	392	247
1,692	4,945		523	248
191	–	Unrecognised tax losses utilised Assessed losses utilised during the year	–	28
		13 DISCONTINUED OPERATIONS The Ergo reclamation surface operation, which formed part of the South African operations and was included under South Africa for segmental reporting, reached the end of its useful life on 1 February 2005 and mining operations ceased on 31 March 2005. The site restoration activities continued after the mining operation was discontinued. On 8 June 2007, AngloGold Ashanti sold the remaining assets of Ergo, the surface reclamation operation east of Johannesburg, to a consortium of Mintails South Africa (Pty) Limited/DRD South African Operations (Pty) Limited. The Competition Commissioner approved the transaction on 5 May 2008 without conditions. One of the main resolutive conditions of the sale agreement which is still outstanding, is the consent by the Minister of the cession of the mining rights from AngloGold Ashanti to ERGO Mining (Pty) Limited currently owned by Mintails South Africa (Pty) Limited and DRD South African Operations (Pty) Limited. The environmental rehabilitation liability remains with AngloGold Ashanti until all the resolutive sale conditions have been met.
		The results of Ergo are presented below:
5	–	Gold income	–	1
(22)	(49)	Cost of sales	(6)	(3)
37	32	Reversal of environmental provision	4	5
20	(17)	Gross (loss) profit	(2)	3
10	9	Other income	1	2
30	(8)	(Loss) profit before taxation	(1)	5
(2)	(17)	Normal taxation (note 33)	(2)	–
(21)	(1)	Deferred taxation (note 31)	–	(4)
7	(26)	Net (loss) profit after taxation	(3)	1
–	218	Profit on disposal of assets (note 14)	27	–
–	6	Deferred taxation (notes 14 and 31)	1	–
–	224		28	–
7	198	Profit from discontinued operations	25	1
SA Cents			US Cents
		14 EARNINGS PER ORDINARY SHARE
		Basic (loss) profit per ordinary share
(1,519)	(5,140)	– Continuing operations The calculation of basic loss per ordinary share is based on losses attributable to equity shareholders of $1,220m, R16,303m (2007 losses of: $669m, R4,276m) and 317,203,948 (2007: 281,455,107) shares being the weighted average number of ordinary shares in issue during the financial year.	(385)	(237)
3	63	– Discontinued operations The calculation of basic profit per ordinary share is based on profits attributable to equity shareholders of $25m, R198m (2007 profits of: $1m, R7m) and 317,203,948 (2007: 281,455,107) shares being the weighted average number of ordinary shares in issue during the financial year.	8	–
		Diluted (loss) profit per ordinary share
(1,519)	(5,140)	– Continuing operations The calculation of diluted loss per ordinary share is based on losses attributable to equity shareholders of $1,220m, R16,303m (2007 losses of: $669m, R4,276m) and 317,203,948 (2007: 281,455,107) shares being the diluted number of ordinary shares. In 2007 and 2008, no adjustment was made since the effect is anti-dilutive.	(385)	(237)
3	63	– Discontinued operations The calculation of diluted profit per ordinary share is based on profits attributable to equity shareholders of $25m, R198m (2007 profits of: $1m, R7m) and 317,203,948 (2007: 281,455,107) shares being the diluted number of ordinary shares. In 2007 and 2008, no adjustment was made since the effect is anti-dilutive.	8	–

	2008	2007
In calculating the diluted number of ordinary shares outstanding for the year, the following were taken into consideration:
	Number of shares
Ordinary shares	312,610,124	276,805,309
E ordinary shares (1)	4,046,364	4,117,815
Fully vested options (2)	547,460	531,983
Weighted average number of shares	317,203,948	281,455,107
Dilutive potential of share options (3)	–	–
Diluted number of ordinary shares	317,203,948	281,455,107

⁽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 872,373 (2007: 575,316) shares, issuable on share awards as the effect of this was anti-dilutive for this period.

The calculation of diluted earnings per share for 2008 did not take into account the effect of 15,384,615 (2007: 15,384,615) shares, issuable upon the exercise of convertible bonds, as the effect of this was anti-dilutive for this period.

Restated 2007	2008	Figures in million	2008	Restated 2007
SA Rands			US Dollars
		Headline loss The loss attributable to equity shareholders was adjusted by the following to arrive at headline loss:
(4,269)	(16,105)	Loss attributable to equity shareholders	(1,195)	(668)
6	14,792	Impairment net of reversals of tangible assets (notes 6 and 16)	1,493	1
–	1,080	Impairment of goodwill (notes 6 and 17)	109	–
–	42	Impairment of investments (notes 6 and 19)	6	–
(56)	(400)	Profit on disposal and abandonment of assets (note 6)	(55)	(7)
–	(14)	Profit on disposal of investment in associate (note 6)	(2)	–
161	389	Impairment of investment in associates (note 8)	39	23
–	(30)	Profit on disposal of assets in associates (note 8) (4)	(3)	–
		Taxation on items above
40	10	– current portion (note 12)	1	6
(18)	(3,915)	– deferred portion (note 12)	(395)	(3)
–	(218)	Profit on disposal of discontinued assets (note 13)	(27)	–
–	(6)	Discontinued operations taxation on item above (note 13)	(1)	–
(4,136)	(4,375)	Headline loss	(30)	(648)
(1,470)	(1,379)	Cents per share Headline loss removes items of a capital nature from the calculation of earnings per share, calculated in accordance with Circular 8/2007 issued by the South African Institute of Chartered Accountants (SAICA). The calculation of headline loss per ordinary share is based on headline losses of $30m, R4,375m (2007: $648m, R4,136m) and 317,203,948 (2007: 281,455,107) shares being the weighted average number of ordinary shares in issue during the year.	(9)	(230)
		(4) In 2007, the indirect taxes incurred in the Mali region have not been added back for headline loss.
		15 DIVIDENDS
		Ordinary shares
664	–	No. 101 of 240 SA cents per ordinary share was declared on 12 February 2007 and paid on 16 March 2007 (32 US cents per share).	–	90
249	–	No. 102 of 90 SA cents per ordinary share was declared on 30 July 2007 and paid on 31 August 2007 (12 US cents per share).	–	34
–	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	–
4	–	No. E1 of 120 SA cents per E ordinary share was declared on 12 February 2007 and paid on 16 March 2007 (16 US cents per share).	–	1
2	–	No. E2 of 45 SA cents per E ordinary share was declared on 30 July 2007 and paid on 31 August 2007 (6 US cents per share).	–	–
–	1	No. E3 of 26.5 SA cents per E ordinary share was declared on 6 February 2008 and paid on 7 March 2008 (4 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).	–	–
919	324	(note 27)	41	125
		No. 105 of 50 SA cents per ordinary share was declared on 6 February 2009 and will be paid on 13 March 2009 (approximately 5 US cents per share). The actual rate of payment will depend on the exchange rate on the date of currency conversion. No. E5 of 25 SA cents per E ordinary share was declared on 6 February 2009 and will be paid on 13 March 2009 (approximately 2.5 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 develop-ment costs	Mine infra- structure	Mineral rights and dumps	Exploration and evaluation assets	Land and buildings	Total
US Dollars
Cost
Balance at 1 January 2007 (restated)	5,419	2,295	1,079	31	26	8,850
Additions
– project expenditure	457	19	–	–	–	476
– stay-in-business expenditure	347	182	–	–	36	565
Acquisition of exploration assets (1)	–	3	–	25	–	28
Disposals	(3)	(11)	–	(1)	(1)	(16)
Transfers and other movements (2)	(148)	192	–	–	–	44
Finance costs capitalised (note 7)	10	–	–	–	–	10
Translation	157	24	13	–	3	197
Balance at 31 December 2007 (restated)	6,239	2,704	1,092	55	64	10,154
Accumulated amortisation
Balance at 1 January 2007 (restated)	1,773	1,062	79	1	–	2,915
Amortisation for the year (notes 4, 9 and 34)	357	193	15	–	2	567
Impairments (notes 6 and 14) (3)	1	–	–	–	–	1
Disposals	(1)	(8)	–	(1)	–	(10)
Transfers and other movements (2)	(19)	(3)	–	–	–	(22)
Translation	65	14	3	–	–	82
Balance at 31 December 2007 (restated)	2,176	1,258	97	–	2	3,533
Net book value at 31 December 2007 (restated)	4,063	1,446	995	55	62	6,621
Cost
Balance at 1 January 2008	6,239	2,704	1,092	55	64	10,154
Additions
– project expenditure	563	66	31	–	–	660
– stay-in-business expenditure	323	215	–	–	2	540
Disposals	(2)	(17)	–	(25)	–	(44)
Transfers and other movements (2)	(782)	(122)	(19)	–	(3)	(926)
Finance costs capitalised (note 7)	32	–	–	–	–	32
Translation	(951)	(221)	(40)	–	(13)	(1,225)
Balance at 31 December 2008	5,422	2,625	1,064	30	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 34)	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	2,696	1,398	204	–	47	4,345
SA Rands
Cost
Balance at 1 January 2007 (restated)	37,933	16,069	7,557	217	185	61,961
Additions
– project expenditure	3,209	134	–	–	–	3,343
– stay-in-business expenditure	2,440	1,276	–	–	256	3,972
Acquisition of exploration assets (1)	–	24	–	174	–	198
Disposals	(18)	(80)	(3)	(9)	(4)	(114)
Transfers and other movements (2)	(1,053)	1,348	–	–	–	295
Finance costs capitalised (note 7)	68	–	–	–	–	68
Translation	(81)	(353)	(120)	(10)	(2)	(566)
Balance at 31 December 2007 (restated)	42,498	18,418	7,434	372	435	69,157
Accumulated amortisation
Balance at 1 January 2007 (restated)	12,416	7,433	553	6	1	20,409
Amortisation for the year (notes 4, 9 and 34)	2,513	1,353	103	–	11	3,980
Impairments (notes 6 and 14) (3)	5	1	–	–	–	6
Disposals	(9)	(51)	–	(7)	–	(67)
Transfers and other movements (2)	(130)	(22)	–	–	–	(152)
Translation	24	(142)	4	1	(1)	(114)
Balance at 31 December 2007 (restated)	14,819	8,572	660	–	11	24,062
Net book value at 31 December 2007 (restated)	27,679	9,846	6,774	372	424	45,095
Cost
Balance at 1 January 2008	42,498	18,418	7,434	372	435	69,157
Additions
– project expenditure	4,645	537	259	–	3	5,444
– stay-in-business expenditure	2,664	1,776	–	–	12	4,452
Disposals	(14)	(140)	(4)	(205)	(3)	(366)
Transfers and other movements (2)	(6,452)	(1,008)	(156)	–	(26)	(7,642)
Finance costs capitalised (note 7)	263	–	–	–	–	263
Translation	7,665	5,237	2,526	114	51	15,593
Balance at 31 December 2008	51,269	24,820	10,059	281	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 34)	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	25,486	13,219	1,930	3	443	41,081

Included in the amounts above for mine infrastructure are assets held under finance leases with a net book value of $5m, R45m (2007: $5m, R37m). Included in land and buildings are assets held under finance leases with a net book value of $23m, R218m (2007: $34m, R235m).

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 8.17% (2007: 9.75%).

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⁾ Exploration assets of nil (2007: $43m, R298m) were acquired from Trans-Siberian Gold plc (TSG).

⁽²⁾ In 2008, transfers and other movements comprise amounts from deferred stripping, change in estimates, asset reclassifications and transfers to/from non-current assets held for sale.
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 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.

In 2007, assets to the value of $15m, R100m were transferred to non-current assets held for sale and were disposed of in 2008 (note 25).

⁽³⁾ Impairments include the following:

Restated 2007	2008	Figures in million	2008	Restated 2007
SA Rands			US Dollars
–	159	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 has been abandoned and will not generate future cash flows.	16	–
–	4,229	Tanzania Geita mine – cash generating unit The impairment is due to a combination of factors such as the lower forward gold curve 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 for mine development of $144m, R1,429m and for 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.	427	–
–	145	Ghana An impairment of the Obuasi mine in Ghana arose as follows The reserve power plant which is allocated to mine infrastructure has been placed on care and maintenance pending handover to the Volta Regional Authority in 2009. Abandoned shaft infrastructure that will not be utilised in the future mining plan has been impaired.	15	–
–	8,077	The Obuasi cash generating unit impairment is the result of factors such as the lower forward gold curve price, higher discount rates and a revised mine plan which incorporates changes in the cost of extraction due to the higher power costs recently experienced in Ghana. As a result, Obuasi's recoverable amount did not support its carrying value in 2008 and an impairment loss was recognised for mine development of $340m, R3,367m and for mineral rights and dumps of $475m, R4,710m. Recoverable amount was determined using a real pre-tax discount rate of 9% and was based on the impairment assumptions detailed below.	815	–
–	33	An impairment of the Iduapriem mine in Ghana arose as follows: The reserve power plant which is allocated to mine infrastructure has been placed on care and maintenance pending handover to the Volta Regional Authority in 2009	3	–
–	1,791	The Iduapriem cash generating unit impairment is the result of the lower forward gold curve price, higher discount rates and a revised mine plan which incorporates 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 was recognised for mine development. Recoverable amount was determined using a real pre-tax discount rate of 8.8% and was based on the impairment assumptions detailed below..	181	–
–	68	Guinea Siguiri mine – mine infrastructure The heap leaching process has been abandoned due to the lower recoveries and deteriorated condition of the stacking pads. The remaining heap leach infrastructure has been impaired.	7	–
–	292	Congo Exploration assets – exploration and evaluation assets Given the current volatile political environment in the DRC, commercial exploitation in the near term appears unlikely at this point and the mineral right value has as a result been impaired.	29	–
6	21	Impairment of various minor tangible assets and equipment.	2	1
6	14,815		1,495	1
		(4)Impairment reversal includes the following:
–	23	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 has become economically viable. The increased gold price will generate future cash flows, and as a result, the mpairment raised during 2005 has been partially reversed.	2	–
–	23		2	–

The impairments 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 forward gold price curve for the first 10 years, where a forward gold market and quoted prices exist (starting point based on a 30-day average during the fourth quarter of 2008 of $783/oz, (2007: $749/oz)). Thereafter, the estimated future gold price has been increased by 2.25% (2007: 2.25%) per annum over the remaining life of the mines. Although the starting point of the forward gold price curve was higher in 2008 compared with 2007, the slope or rate of escalation of the price curve was actually lower in 2008. The forward gold price curve if discounted at US CPI is $817/oz (2007: $887/oz). These prices have been adjusted for the effects of including normal sale forward contracts to arrive at an average received price across all the cash generating units.

Annual life-of-mine plans take into account the following:

• Proved and probable ore reserves;
• 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 2007. The WACC of 5.57% which is around 100 basis points higher than 2007 of 4.53%, 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, adjusted by country credit risk rating;
• 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 and forward 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 Reserves as well as value beyond proved and probable reserves;
• The grade of Ore Reserves 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		2008	US Dollars
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
		Restated 2007
10,890	12,048	Obuasi	1,599	1,769
3,654	3,876	Sunrise Dam (5)	537	569

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 2008 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 2008.

⁽⁵⁾The carrying value includes goodwill of $15m, R135m at AngloGold Ashanti Brasil Mineração and $8m, R75m at Serra Grande (2007: Sunrise Dam $133m, R907m) (note 17).

Restated 2007	2008	Figures in million	2008	Restated 2007
SA Rands			US Dollars
		17 INTANGIBLE ASSETS
2,591	2,707	Goodwill Net carrying value Balance at beginning of year	398	370
–	(1,080)	Impairment of goodwill (notes 6 and 14) (1)	(109)	–
–	(998)	Transferred to assets held-for-sale (2)	(105)	–
116	579	Translation	(56)	28
2,707	1,208	Balance at end of year	128	398
		Net carrying amount allocated to each of the cash generating units:
907	998	Sunrise Dam	105	133
97	135	AngloGold Ashanti Brasil Mineração	15	15
54	75	Serra Grande Company Limited	8	8
742	–	Geita Gold Mining Limited (1)	–	109
907	–	Boddington Gold Mine (2)	–	133
2,707	1,208		128	398
		Real pre-tax discount rates applied in impairment calculations on CGU’s for which the carrying amount of goodwill is significant are as follows:
		Sunrise Dam(3)	11.0%	11.0%
		Geita (3)	11.5%	10.5%
		(1) Goodwill has been allocated to its respective cash generating units (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. (2) Goodwill allocated to Boddington of $105m, R998m has been reclassified to assets held for sale. (3) The discount rates for 2008 were calculated on a consistent basis to the 2007 discount rates.
		Royalty, tax rate concession and other Cost
344	335	Balance at beginning of year	49	49
–	6	Additions	–	–
(9)	131	Translation	–	–
335	472	Balance at end of year	49	49
		Accumulated amortisation
174	183	Balance at beginning of year	27	25
14	21	Amortisation (notes 4 and 34)	2	2
(5)	73	Translation	–	–
183	277	Balance at end of year	29	27
152	195	Net book value	20	22
2,859	1,403	Total intangible assets	148	420

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.

Restated 2007	2008	Figures in million	2008	Restated 2007
SA Rands			US Dollars
		18INVESTMENTS IN ASSOCIATES AND EQUITY ACCOUNTED JOINT VENTURES
		The carrying value of investments in associates and equity accounted joint ventures can be analysed as follows:
372	381	Carrying value of investment in associates	41	55
83	11	Loans advanced to associates (1)	1	12
1,728	2,394	Carrying value of investment in equity accounted joint ventures	253	254
–	28	Loans advanced to equity accounted joint ventures (1)	3	–
2,183	2,814	Investments in associates and equity accounted joint ventures	298	321

In 2008, the Trans-Siberian Gold plc, Morila Limited, AGA-Polymetal Strategic Alliance 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 (2007: $23m, R161m) were recorded. Deferred taxation on impairments amounted to $5m, R51m (2007: nil).

⁽¹⁾ Loans advanced consist of $1m, R15m (2007: $2m, R15m) to Oro Group (Pty) Limited, $3m, R25m (2007: nil) to AGA-Polymetal Strategic Alliance and in 2007 $10m, R68m to Trans-Siberian Gold plc.

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.

During 2008, an amount of $6m, R44m of the loan advanced to Trans-Siberian Gold plc was converted into equity.

The AGA-Polymetal Strategic Alliance loan is interest free and is repayable on demand, only once profits have been generated.

Associates

The group has a 25% (2007: 25%) interest in Oro Group (Pty) Limited which is involved in the manufacture and wholesale of jewellery. The year-end of Oro Group (Pty) Limited is 31 March. Equity accounting is based on results to 30 September 2008 adjusted for material transactions.

The group has a 29.7% (2007: 29.8%) interest in Trans-Siberian Gold plc (listed on the London Stock Exchange), which is involved in the exploration and development of gold mines. The year-end of Trans-Siberian Gold plc is 31 December. Equity accounting is based on results to 30 September 2008 adjusted for material transactions. At 31 December 2008, the market value of our investment in Trans-Siberian Gold plc was $5m, R43m (2007: $6m, R41m).

The group has a 33.3% (2007: 33.3%) interest in the not-for-profit Margaret Water Company which is involved in the pumping of underground water in the Vaal River Region. The year-end of Margaret Water Company is 31 March. Equity accounting is based on results to 31 December 2008.

The group has a 15.36% (2007: nil) interest in B2Gold Corporation (listed on the Toronto Stock Exchange), which is a mineral exploration company. The group also holds share warrants which are immediately exercisable resulting in potential voting power of 26% in B2Gold Corporation. The year end of B2Gold Corporation is 31 December 2008. Equity accounting is based on results to 30 September 2008 adjusted for material transactions. At 31 December, the market value of our investment in B2Gold Corporation was $11m, R109m (2007: nil).

Restated 2007	2008	Figures in million	2008	Restated 2007
SA Rands			US Dollars
		Summarised financial information of equity accounted
		investments is as follows (not attributable):
		Balance sheet
357	1,596	Non-current assets	169	52
544	1,199	Current assets	127	80
901	2,795	Total assets	296	132
168	183	Non-current liabilities	19	25
170	280	Current liabilities	30	25
338	463	Total liabilities	49	50
563	2,332	Net assets	247	82
		Income statement
484	475	Revenue	58	68
(512)	(537)	Costs and expenses	(64)	(72)
(6)	(6)	Taxation	(1)	(1)
(34)	(68)	Loss after taxation	(7)	(5)

Joint ventures

The group has a 40% (2007: 40%) interest in Société des Mines de Morila S.A., which is involved in gold mining and related activities. The year-end of Société des Mines de Morila S.A. is 31 December. Equity accounting is based on results to 31 December 2008.

The group has a 38% (2007: 38%) interest in Société d'Exploitation des Mines d'Or de Sadiola S.A., which is involved in the commercial exploitation of gold. The year-end of Société d'Exploitation des Mines d'Or de Sadiola S.A. is 31 December. Equity accounting is based on results to 31 December 2008.

The group has a 40% (2007: 40%) interest in Société d'Exploitation des Mines d'Or de Yatela S.A., which is involved in the commercial exploitation of gold. The year-end of Société d'Exploitation des Mines d'Or de Yatela S.A. is 31 December. Equity accounting is based on results to 31 December 2008.

The group has a 50% (2007: 50%) interest in AGA-Polymetal Strategic Alliance which is involved in the exploration and development of gold mines. The year-end of AGA-Polymetal Strategic Alliance is 31 December. Equity accounting is based on results to 30 September 2008 adjusted for material transactions.

During the year the group sold its 50% interest in Nufcor International Limited (2007: 50%), which is involved in the trading of uranium and uranium related services. The year-end of Nufcor International Limited is 30 June. Equity accounting is based on results to 30 June 2008 being the date of sale.

Restated 2007	2008	Figures in million	2008	Restated 2007
SA Rands			US Dollars
		Summarised financial information of equity accounted investments is as follows (not attributable):
		Balance sheet
4,085	4,198	Non-current assets	444	600
2,883	3,809	Current assets	403	423
6,968	8,007	Total assets	847	1,023
668	1,170	Non-current liabilities	124	98
1,268	1,467	Current liabilities	155	186
1,936	2,637	Total liabilities	279	284
5,032	5,370	Net assets	568	739
		Income statement
5,098	4,001	Revenue	475	723
(3,514)	(4,953)	Costs and expenses	(596)	(498)
(706)	(1,122)	Taxation	(136)	(100)
878	(2,074)	(Loss) profit after taxation	(257)	125
		19 OTHER INVESTMENTS
		Listed investments
		Available-for-sale
219	226	Balance at beginning of year	34	31
30	43	Additions	5	4
(23)	(31)	Disposals	(4)	(3)
–	(51)	Fair value adjustments	(6)	–
–	(42)	Impairments (notes 6 and 14) (1)	(6)	–
–	17	Translation	(6)	2
226	162	Balance at end of year	17	34
		Available-for-sale listed investments consist of investments in ordinary shares, associated purchase warrants and options. Available-for-sale investments primarily consist of:
76	76	International Tower Hill Mines Limited (ITH)	8	11
89	66	Various listed investments held by Environmental Rehabilitation Trust Fund	7	13
56	18	Red 5 Limited	2	8
5	2	Other	–	2
226	162		17	34
		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 balance sheet date, the majority of listed equity investments were listed on the JSE Limited and the TSX Venture Exchange. The exposure to listed shares at fair value on the JSE Limited was $7m, R66m (2007: $13m, R89m). An analysis based on the assumption that the equity index (ALSI on the JSE Limited) had increased/decreased by 10% with all other variables held constant and all the group’s JSE Limited listed equity investments moved according to the ALSI, would impact equity (other comprehensive income) by $0.7m, R6.6m (2007: $1.3m, R8.9m). The exposure to listed shares at fair value on the Toronto TSX Venture Exchange was $8m, R76m (2007: $11m, R76m). An analysis based on the assumption that the S&P/TSX Venture Composite Index had increased/decreased by 10% with all other variables held constant and that ITH moved according to the index, would impact equity (other comprehensive income) by $0.8m, R7.6m (2007: $1.1m, R7.6m). There is no effect on the income statement unless the change is a decrease which results in an impairment charge.
124	104	Held-to-maturity Balance at beginning of year	15	18
15	50	Additions	6	2
(39)	(50)	Maturities	(6)	(6)
4	–	Interest earned	–	1
–	–	Translation	(4)	–
104	104	Balance at end of year	11	15
		Rehabilitation Trust Fund administered by RMB Private
		Bank comprising:
72	89	Government bonds	9	10
32	15	Quasi – Government bonds	2	5
104	104		11	15
330	266	Book value of listed investments	28	49
333	278	Market value of listed investments	29	49
2	2	The market value of held-to-maturity bonds is $12m, R116m (2007: $15m, R107m). The market value has a sensitivity of R34m (2007: R27m) for a 1% change in interest rates. Unlisted investments Available-for-sale Balance at beginning of year	–	–
2	2	Balance at end of year	–	–
		Available-for-sale unlisted investments consist primarily of the Chamber of Mines Building Company Limited.
2	2	Directors' valuation of unlisted investments (2)	–	–
448	367	Balance at beginning of year	54	64
15	725	Additions	88	2
(102)	(653)	Maturities	(79)	(15)
9	–	Interest earned	–	1
–	(99)	Re-allocation of Environmental Protection Agency Bond  to cash restricted for use	(12)	–
(3)	17	Translation	(13)	2
367	357	Balance at end of year	38	54
		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.
		Unlisted investments – held-to-maturity include:
		Negotiable Certificates of Deposit – Rehabilitation Trust
274	306	Fund administered by RMB Private Bank	32	40
–	33	Nufcor Uranium Trust Fund	3	–
76	–	Environmental Protection Agency Bond – fixed-term deposit required by legislation	–	12
17	18	Other	3	2
367	357		38	54
369	359	Book value of unlisted investments	38	54
367	360	Fair value of unlisted investments	38	54
699	625	Total book value (note 37)	66	103
700	638	Total fair value	67	103
		(1) Impairment of Red 5 Limited shares of $4m, R29m (2007: nil) and Dynasty Gold Corporation shares of $2m, R13m (2007: nil). Investments are impaired when a decline in value is not expected to recover the full cost of the investment over the near term. The quoted market prices of these investments have dropped significantly and there is no evidence to indicate that they will recover in the near term. (2) 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.
		20 INVENTORIES
		Non-current Raw materials
1,296	2,395	– heap-leach inventory	254	190
503	303	– ore stockpiles	32	74
1,799	2,698	Total metal inventories	286	264
8	12	Mine operating supplies	1	1
1,807	2,710		287	265
		Current Raw materials
983	1,704	– ore stockpiles	181	144
335	460	– heap-leach inventory	49	49
		Work in progress
571	656	– gold in process	69	85
		Finished goods
239	352	– gold doré / bullion	37	35
90	222	– by-products	23	13
2,218	3,394	Total metal inventories	359	326
1,535	2,269	Mine operating supplies	240	225
3,753	5,663		599	551
5,560	8,373	Total inventories (1)	886	816
		(1) The amount of the write-down of by-products, gold in process, gold on hand and ore stockpiles to net realisable value, and recognised as an expense is $35m, R329m (2007: $55m, R372m). This expense is included in cost of sales which is disclosed in note 4.
		21 OTHER NON-CURRENT ASSETS
244	–	AngloGold Ashanti Pension Fund (note 30)	–	36
19	17	Defined benefit post-retirement medical asset for Rand Refinery employees (note 30)	2	3
1	–	Retiree Medical Plan for Nufcor South Africa employees (note 30)	–	–
4	7	Loans and receivables Loan repayable between 31 December 2009 and 31 December 2011 bearing interest at 3% per annum	1	–
5	3	Other interest-bearing loan – repayable monthly to June 2010 at South African prime bank overdraft rates less 2%	–	1
7	7	Other non-interest bearing loans and receivables  repayable on various dates	–	1
280	34		3	41
(2)	(2)	Current portion of other non-current assets included in current assets	–	–
278	32		3	41
		22 TRADE AND OTHER RECEIVABLES
		Non-current
14	–	Trade debtor	–	2
56	102	Prepayments and accrued income	11	8
317	334	Recoverable tax, rebates, levies and duties (1)	35	47
–	149	Other debtors	16	–
387	585		62	57
		Current
236	367	Trade debtors	39	35
490	1,009	Prepayments and accrued income	107	72
523	608	Recoverable tax, rebates, levies and duties (1)	64	77
43	40	Amounts due from related parties	4	6
17	12	Interest receivable	1	2
75	40	Other debtors	5	11
1,384	2,076		220	203
1,771	2,661	Total trade and other receivables	282	260

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.

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

Recoverable value added tax due from the Tanzanian government amounts to $16m, R151m at 31 December 2008 (31 December 2007: $16m, R109m). The last audited value added tax return was for the period ended 30 November 2008 and at 31 December 2008 $15m, R142m (31 December 2007: $14m, R95m) was still outstanding and $1m, R9m (31 December 2007: $2m, R14m) 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 $37m, R350m at 31 December 2008 (31 December 2007: $37m, R252m). 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 $16m, R151m (31 December 2007: $21m, R143m) have been lodged with the Customs and Excise authorities, which are still outstanding, whilst claims for refund of $21m, R199m (31 December 2007: $16m, R109m) 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%.

Restated 2007	2008	Figures in million	2008	Restated 2007
SA Rands			US Dollars
		23 CASH RESTRICTED FOR USE
45	81	Cash restricted by prudential solvency requirements	9	7
179	326	Cash balances held by Environmental Rehabilitation Trust Funds	34	26
33	–	Cash balances held by the Boddington Joint Venture	–	5
7	8	Other	1	1
264	415	(notes 37 and 38)	44	39
		24 CASH AND CASH EQUIVALENTS
2,336	2,141	Cash and deposits on call	226	344
910	3,297	Money market instruments	349	133
3,246	5,438	(notes 37 and 38)	575	477
		25 NON-CURRENT ASSETS AND LIABILITIES HELD FOR SALE
100	–	Effective 30 June 2005, the investment in the Weltevreden mining rights was classified as held for sale. This investment was previously recognised as a tangible asset. A sale agreement was concluded subject to conditions precedent to sell Weltevreden's rights to Aflease Gold on 15 June 2005. On 19 December 2005, Aflease was acquired by SXR Uranium One (formerly Southern Cross Inc.) and the sale agreement was amended to recognise this change. During the quarter ended 30 June 2008, the investment in the Weltevreden mining rights with a net book value of $13m, R100m (2007: $15m, R100m) was reclassified from assets held for sale to tangible assets held for use because the conditions precedent in the sale agreement were not fulfilled and AngloGold Ashanti had no current prospective buyers to complete negotiations within a twelve month period.	–	15
100	–	Effective 30 June 2007, exploration properties of $15m, R100m acquired from Trans-Siberian Gold plc situated in Russia were classified as assets held for sale. The cash sale of these exploration properties formed part of the joint venture agreement between Polymetal and AngloGold Ashanti which was concluded during 2008.	–	15
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 achievement of suspensive condition regarding rezoning of the land and transfer of title deeds.	1	1
		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	In terms of the sale agreement the purchase consideration consists of three components: an initial cash payment upon the fulfilment of all conditions precedent to the transaction, a further payment being a combination of Newmont shares and/or a cash payment, and future royalty payments. In terms of the sale agreement the completion is subject to conditions precedent, including finalisation of Newmont’s financing; the receipt, to the extent required, of Ministerial consents and/or other Government agency approvals in Australia; the approval of the South African Reserve Bank and the Australian Foreign Investment Review Board; the execution by certain third parties of agreements with respect to the assignment of material tenements and land as related to the Boddington Gold Mine; and the receipt of certain other applicable third party approvals and consent.	792	–
210	7,497	Total non-current assets held for sale	793	31
–	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	Total non-current liabilities held for sale	48	–
		26 SHARE CAPITAL AND PREMIUM
		Share capital Authorised
100	100	400,000,000 ordinary shares of 25 SA cents each	11	15
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	102		11	15
		Issued and fully paid
69	88	353,483,410 (2007: 277,457,471) ordinary shares of 25 SA cents each(1)	9	10
1	1	3,966,941 (2007: 4,140,230) E ordinary shares of 25 SA cents each	–	–
1	1	2,000,000 (2007: 2,000,000) A redeemable preference shares of 50 SA cents each	–	–
–	–	778,896 (2007: 778,896) B redeemable preference shares of 1 SA cent each	–	–
71	90		9	10
71	90	Issued and fully paid brought forward	9	10
(1)	(1)	Treasury shares held within the group: 2,778,896 (2007: 2,778,896) A and B redeemable preference shares held within the group	–	–
–	–	855,649 (2007: 913,410) ordinary shares held within the group (2)	–	–
(1)	(1)	2,566,941 (2007: 2,740,230) E ordinary shares held within the group(2)	–	–
69	88		9	10
		Share premium
22,976	23,253	Balance at beginning of year	3,415	3,282
283	14,927	Ordinary shares issued	1,875	40
(6)	(22)	E ordinary shares cancelled	(2)	(1)
–	–	Translation	(1,252)	94
23,253	38,158	Balance at end of year	4,036	3,415
(312)	(312)	Redeemable preference shares held within the group	(33)	(46)
(292)	(273)	Ordinary shares held within the group	(29)	(43)
(347)	(325)	E ordinary shares held within the group	(34)	(51)
22,302	37,248		3,940	3,275
22,371	37,336	Share capital and premium	3,949	3,285

⁽¹⁾ During July 2008, 69,470,442 rights offer shares were issued at a subscription price of R194.00 per share.

⁽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 RETAINED EARNINGS, OTHER RESERVES AND MINORITY INTERESTS

Figures in million	Retained earnings (1)	Non- distri- butable reserves(2)	Foreign currency translation reserve	Actuarial gains (losses)	Other compre- hensive income (3)	Retained earnings and other reserves	Minority interests	Total
US Dollars
Balance at December 2006	(209)	20	241	(6)	(215)	(169)	62	(107)
Actuarial loss recognised				(14)		(14)		(14)
Net loss on cash flow hedges removed from equity and reported in gold sales					200	200	2	202
Net loss on cash flow hedges					(166)	(166)	(2)	(168)
Hedge ineffectiveness					10	10		10
Gain on available-for-sale financial assets					1	1		1
Share-based payment for share awards					27	27		27
Deferred taxation on items above				5		5		5
(Loss) profit for the year	(668)					(668)	32	(636)
Dividends (note 15)	(125)					(125)	(19)	(144)
Acquisition of minority interest (4)	(12)					(12)	(13)	(25)
Transfers to foreign currency translation reserve	(6)		6			–		–
Translation			11	(1)	(5)	5	1	6
Balance at December 2007 restated	(1,020)	20	258	(16)	(148)	(906)	63	(843)
Actuarial loss recognised				(44)		(44)		(44)
Net loss on cash flow hedges removed from equity and reported in gold sales					213	213	3	216
Net loss on cash flow hedges					(87)	(87)		(87)
Hedge ineffectiveness					8	8		8
Realised losses on hedges of capital items					(2)	(2)		(2)
Loss on available-for-sale financial assets (5)					(9)	(9)		(9)
Release on disposal of available- for-sale financial assets					(1)	(1)		(1)
Share-based payment for share awards					14	14		14
Deferred taxation on items above				15	(27)	(12)		(12)
(Loss) profit for the year	(1,195)					(1,195)	40	(1,155)
Dividends (note 15)	(41)					(41)	(17)	(58)
Acquisition of minority interest (4)	(111)					(111)	1	(110)
Transfers to foreign currency translation reserve	(1)		1			–		–
Translation		(5)	648	8	1	652	(7)	645
Balance at December 2008	(2,368)	15	907	(37)	(38)	(1,521)	83	(1,438)

Figures in million	Retained earnings (1)	Non- distri- butable reserves(2)	Foreign currency translation reserve	Actuarial gains (losses)	Other compre- hensive income (3)	Retained earnings and other reserves	Minority interests	Total
SA Rands
Balance at December 2006	(214)	138	436	(45)	(1,503)	(1,188)	436	(752)
Actuarial loss recognised				(99)			(99)	(99)
Net loss on cash flow hedges removed from equity and reported in gold sales					1,407	1,407	14	1,421
Net loss on cash flow hedges					(1,161)	(1,161)	(12)	(1,173)
Hedge ineffectiveness					69	69		69
Gain on available-for-sale financial assets					8	8		8
Share-based payment for share awards					190	190		190
Deferred taxation on items above				36		36		36
(Loss) profit for the year	(4,269)					(4,269)	222	(4,047)
Dividends (note 15)	(919)					(919)	(131)	(1,050)
Acquisition of minority interest (4)	(81)					(81)	(91)	(172)
Transfers to foreign currency translation reserve	(41)		41			–		–
Translation			(139)		(21)	(160)	(9)	(169)
Balance at December 2007 restated	(5,524)	138	338	(108)	(1,011)	(6,167)	429	(5,738)
Actuarial loss recognised				(364)			(364)	(364)
Net loss on cash flow hedges removed from equity and reported in gold sales					1,758	1,758	24	1,782
Net loss on cash flow hedges					(719)	(719)	(2)	(721)
Hedge ineffectiveness					64	64		64
Realised losses on hedges of capital items					(18)	(18)		(18)
Loss on available-for-sale financial assets (5)					(74)	(74)		(74)
Release on disposal of available-for-sale financial assets					(9)	(9)		(9)
Share-based payment for share awards					118	118		118
Deferred taxation on items above				124	(243)	(119)		(119)
(Loss) profit for the year	(16,105)					(16,105)	324	(15,781)
Dividends (note 15)	(324)					(324)	(131)	(455)
Acquisition of minority interest (4)	(914)				(914)	6	(908)	(908)
Transfers to foreign currency translation reserve	(12)		12			–		–
Translation			8,713	1	(221)	8,493	140	8,633
Balance at December 2008	(22,879)	138	9,063	(347)	(355)	(14,380)	790	(13,590)

⁽¹⁾ $453m, R4,236m (2007: $402m, R2,729m) of retained earnings arising at the joint venture operations and certain subsidiaries may not be remitted without third party shareholder consent.

⁽²⁾ Non-distributable reserves comprise a surplus on disposal of company shares of $15m, R141m (2007: $21m, R141m) and other transfers.

⁽³⁾ Other comprehensive income represents the effective portion of fair value gains or losses in respect of cash either flow hedges until the underlying transaction occurs, or the capital expenditure is complete, upon which the gains or losses are recognised earnings, fair value gains or losses on available-for-sale financial assets and the equity item for share-based payments.

⁽⁴⁾ With effect from 1 July 2008, AngloGold Ashanti acquired the remaining 33% shareholding in Cripple Creek & Victor Gold Mining Company from Golden Cycle Gold Corporation. Effective 1 September 2008, AngloGold Ashanti acquired a 70% interest in the Gansu Joint Venture and on 1 September 2007, AngloGold Ashanti acquired the remaining effective 15% minorities of Iduapriem.

⁽⁵⁾ Included in loss on available-for-sale financial assets is $3m, R23m relating to fair value adjustments on Nufcor instruments held by International Limited which was disposed of during the year.

Restated 2007	2008	Figures in million	2008	Restated 2007
SA Rands			US Dollars
		28 BORROWINGS
		Unsecured
6,654	9,492	Convertible bonds (1)	1,004	977
		Semi-annual coupons are paid at 2.375% per annum. The bonds were issued on 27 February 2004 and are convertible at the holders’ option into ADSs up to February 2009, and are US dollar-based. The bonds are convertible at a price of $65.00 per ADS. If the bonds have not been converted by 20 February 2009, they will be redeemed at par on 27 February 2009. AngloGold Ashanti Holdings plc has the option of calling an early redemption of all the bonds three years after their issuance, if the price of the ADSs exceeds 130% of the conversion price for more than 20 days during any period of 30-consecutive trading days.
3,556	7,931	Syndicated loan facility ($1,150m) – Drawn down in US dollars and Australian dollars (2)	839	522
		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.
–	222	Standard Bank Argentina S.A.	23	–
		Interest is charged at an average rate of 8.83% per annum. Loans are repayable in January, February and April 2009 and are US dollar-based.
–	101	Santander Banespa	11	–
		Interest is charged at LIBOR plus 1.45% per annum. Loan is repayable in monthly instalments terminating in September 2011 and is BRL-based.
–	57	Santander Rio S.A.	6	–
		Interest is charged at an average rate of 6.75% per annum. Loans are repayable in January and March 2009 and are US dollar-based.
–	48	Banco Itaú S.A.	5	–
		Interest is charged at a rate of 6.38% per annum. Loan is repayable in February 2009 and is US dollar-based.
–	39	Banco Itaú Buen Ayre S.A.	4	–
		Interest is charged at a rate of 8.75% per annum. Loan is repayable in March 2009 and is US dollar-based.
–	39	Banco Bradesco S.A.	4	–
		Interest is charged at an average rate of 7.49% per annum. Loans are repayable in April and June 2009 and are US dollar-based.
–	29	Unibanco S.A.	3	–
		Interest is charged at a rate of 6.3% per annum. Loan is repayable in February 2009 and is US dollar-based.
–	23	JP Morgan Chase Bank, N.A.	3	–
		Interest is charged at a rate of 3.72% per annum. Loan is repayable in January 2009 and is US dollar-based.
2,070	–	Corporate bond (3)	–	304
		Semi-annual coupons were paid at 10.5% per annum. The bond was repaid on 28 August 2008 and was rand-based.
2	2	Bank overdraft	–	–
		Bank overdrafts at market-related rates are US dollar-based.
12,282	17,983	Total unsecured borrowings	1,902	1,803
		Secured Finance leases
249	254	Turbine Square Two (Proprietary) Limited	27	37
		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 38).
35	24	Senstar Capital Corporation	3	5
		Interest charged at an average rate of 6.6% per annum. Loans are repayable in monthly instalments terminating in November 2009 and are US dollar-based. The equipment financed is used as security for these loans.
5	8	CSI Latina Arrendamento Mercantil S.A.	1	1
		Interest is charged at a rate of 11.7% per annum. Loan is repayable in monthly instalments terminating in May 2011 and is BRL-based. The equipment financed is used as security for these loans.
1	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.
17	–	Terex Africa (Proprietary) Limited	–	2
		Interest was charged at a rate of 9% per annum. Loan was repaid in January 2008 and was US dollar-based. The equipment financed was used as security for this loan.
12,589	18,270	Total borrowings (notes 37 and 38)	1,933	1,848
(2,173)	(10,046)	Current portion of borrowings included in current liabilities	(1,063)	(319)
10,416	8,224	Total long-term borrowings	870	1,529
		Amounts falling due
2,173	10,046		1,063	319
6,639	7,965	Between one and two years	843	975
3,612	114	Between two and five years	12	530
165	145	After five years	15	24
12,589	18,270	(notes 37 and 38.)	1,933	1,848
		Currency
		The currencies in which the borrowings are denominated are as follows:
9,245	12,982	US dollar	1,373	1,356
2,320	255	SA rand	27	341
1,019	4,924	Australian dollar	521	150
5	109	Brazilian real	12	1
12,589	18,270	(notes 37 and 38)	1,933	1,848
		Undrawn facilities
		Undrawn borrowing facilities as at 31 December are as follows:
4,270	3,092	Syndicated loan ($1,150m) – US dollar	327	627
341	473	FirstRand Bank Limited – US dollar	50	50
286	397	Absa Bank Limited – US dollar	42	42
14	19	Nedbank Limited – US dollar	2	2
260	185	Standard Bank of SA Limited – SA rand	20	38
220	220	FirstRand Bank Limited – SA rand	23	32
50	50	Nedbank Limited – SA rand	5	7
30	30	Absa Bank Limited – SA rand	3	4
20	–	Commerzbank AG – SA rand	–	3
10	–	ABN Amro Bank N.V. – SA rand	–	1
50	–	ABN Amro Bank N.V. – Euro	–	7
5,551	4,466		472	813
		(1) Convertible bonds
6,810	9,455	Senior unsecured fixed-rate bonds	1,000	1,000
(211)	(40)	Unamortised discount and bond issue costs	(4)	(31)
6,599	9,415		996	969
55	77	Accrued interest	8	8
6,654	9,492		1,004	977

On 20 November 2008, AngloGold Ashanti Holdings plc, a wholly-owned subsidiary of AngloGold Ashanti Limited, entered into a $1 billion Syndicated Term Facility Agreement (the 2008 term facility). $1 billion on the 2008 term facility was drawn on 26 February 2009 to redeem the $1 billion convertible bond due 27 February 2009 issued by AngloGold Ashanti Holdings plc upon its maturity.

The 2008 term facility is for an initial one-year period from the date of first drawdown and is extendible, if required, at the option of AngloGold Ashanti Holdings plc until 30 November 2010. The amounts drawn under the 2008 term facility will bear an interest margin over the lenders’ cost of funds (subject to a cap of 1.75 times applicable LIBOR) of 4.25% until six months after the date of first drawdown and 5.25% thereafter. AngloGold Ashanti Limited, AngloGold Ashanti USA Incorporated and AngloGold Ashanti Australia Limited have each guaranteed all payments and other obligations of AngloGold Ashanti Holdings plc under the 2008 term facility.

AngloGold Ashanti’s interest expense will increase substantially as a result of the higher interest rates and fees associated with the 2008 term facility. These fees will be amortised over the expected term of the 2008 term facility.

Based on an assumed cost of funds of 100 basis points and assuming that the 2008 term facility is fully drawn, the effective borrowing cost (including fees and applicable margin) on the 2008 term facility is estimated at approximately 10% per annum. The actual interest expense in 2009 will depend upon the amount actually drawn under the 2008 term facility, the lenders’ actual costs of funds and prevailing LIBOR rates.

Amounts outstanding under the 2008 term facility may be prepaid at any time prior to the maturity date. AngloGold Ashanti intends to refinance the 2008 term facility through one or more of the following: the proceeds of asset sales (which may include the sale of significant assets), long-term debt financing and/or the issuance of an equity-linked instrument. The nature and timing of refinancing the 2008 term facility will depend upon market conditions.

Subsequent to year-end, an amendment was made to the 2008 term facility – refer to note 40.

Restated 2007	2008	Figures in million	2008	Restated 2007
SA Rands			US Dollars
		(2) Syndicated loan facility ($1,150m)
3,576	7,922	Drawn down in US dollars and Australian dollars	838	525
(27)	(28)	Unamortised loan issue costs	(3)	(4)
3,549	7,894		835	521
7	37	Accrued interest	4	1
3,556	7,931		839	522
		(3) Corporate bond
2,000	–	Senior unsecured fixed-rate bond	–	293
(3)	–	Unamortised discount and bond issue costs	–	–
1,997	–		–	293
73	–	Accrued interest	–	11
2,070	–		–	304
		29 ENVIRONMENTAL REHABILITATION AND OTHER PROVISIONS
		Environmental rehabilitation obligations Provision for decommissioning
1,160	1,281	Balance at beginning of year	188	166
56	(74)	Change in estimates (1)	(9)	8
–	21	Additions	3	–
–	(8)	Transfer of liability to assets held for sale	(1)	–
81	79	Unwinding of decommissioning obligation (note 7)	10	11
(19)	(2)	Utilised during the year	–	(3)
3	228	Translation	(30)	6
1,281	1,525	Balance at end of year	161	188
		Provision for restoration
1,255	1,591	Balance at beginning of year	234	179
317	123	Charge to income statement	15	45
49	52	Change in estimates (1)	6	6
–	32	Additions	4	–
–	(160)	Transfer of liability to assets held for sale	(19)	–
69	79	Unwinding of restoration obligation (note 7)	10	10
(101)	(60)	Utilised during the year	(7)	(14)
2	380	Translation	(28)	8
1,591	2,037	Balance at end of year	215	234
		Other provisions
192	304	Balance at beginning of year	45	27
105	28	Charge to income statement	3	15
(6)	2	Change in estimates	–	(1)
–	11	Additions	1	–
2	1	Unwinding of other provisions (note 7)	–	–
(23)	(73)	Utilised during the year	(9)	(3)
34	25	Translation	(8)	7
304	298	Balance at end of year	32	45
		Other provisions comprise the following:
300	294	– provision for labour and civil claim court settlements in South America (2)	31	44
4	4	– provision for employee compensation claims in Australia (3)	1	1
304	298		32	45
3,176	3,860	Total environmental rehabilitation and other provisions	408	467

⁽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 a 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 Australia with regard to work-related incidents. The liability is expected to unwind over the next three-to five-year period.

Restated 2007	2008	Figures in million	2008	Restated 2007
SA Rands			US Dollars
		30 PROVISION FOR PENSION AND POST-RETIREMENT BENEFITS Defined benefit plans The group has made provision for pension, provident and medical schemes covering substantially all employees. The retirement schemes consist of the following:
(244)	100	AngloGold Ashanti Pension Fund (asset)	11	(36)
1,121	1,070	Post-retirement medical scheme for AngloGold Ashanti South African employees	113	165
67	106	Other defined benefit plans (1)	11	9
944	1,276	Sub-total	135	138
		Transferred to other non-current assets (note 21)
244	–	AngloGold Ashanti Pension Fund	–	36
19	17	Post-retirement medical scheme for Rand Refinery employees	2	3
1	–	Retiree Medical Plan for Nufcor South Africa employees	–	–
1,208	1,293		137	177
		(1) Other defined benefit plans comprise the following:
–	8	– Ashanti Retired Staff Pension Plan	1	–
67	86	– Obuasi Mines Staff Pension Scheme	9	9
(19)	(17)	– Post-retirement medical scheme for Rand Refinery employees    (asset)	(2)	(3)
13	20	– Retiree Medical Plan for North American employees	2	2
7	9	– Supplemental Employee Retirement Plan (SERP) for North    America (USA) Inc. employees	1	1
(1)	–	– Retiree Medical Plan for Nufcor South Africa employees (asset)	–	–
67	106		11	9
		AngloGold Ashanti 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 2008 was completed at the beginning of 2009 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 next statutory valuation will have an effective date no later than 31 December 2008 and will be completed during 2009. All South African pension funds are governed by the Pension Funds Act of 1956 as amended. Information with respect to the AngloGold Ashanti Pension Fund is as follows:
		Change in benefit obligation
1,568	1,753	Balance at beginning of year	257	224
47	49	Current service cost	6	7
124	139	Interest cost	17	18
14	14	Participants’ contributions	2	2
77	132	Actuarial loss	16	11
7	–	Increase as a result of transfers into the fund	–	1
(84)	(202)	Benefits paid	(24)	(12)
–	–	Translation	(75)	6
1,753	1,885	Balance at end of year	199	257
		Change in plan assets
1,835	1,997	Balance at beginning of year	293	262
191	214	Expected return on plan assets	26	28
(6)	(276)	Actuarial loss	(33)	(1)
40	38	Company contributions	5	6
14	14	Participants’ contributions	2	2
7	–	Increase as a result of transfers into the fund	–	1
(84)	(202)	Benefits paid	(24)	(12)
–	–	Translation	(81)	7
1,997	1,785	Fair value of plan assets at end of year	188	293
244	(100)	(Unfunded) funded status at end of year	(11)	36
244	(100)	Net amount recognised	(11)	36
		Components of net periodic benefit cost
124	139	Interest cost	17	18
47	49	Current service cost	6	7
(191)	(214)	Expected return on assets	(26)	(28)
(20)	(26)	Net periodic benefit cost	(3)	(3)

	2008	Restated 2007
	US Dollars
Assumptions Assumptions used to determine benefit obligations at the end of the year are as follows:
Discount rate	7.25%	8.25%
Rate of compensation increase (1)	5.25%	6.00%
Expected long-term return on plan assets	9.28%	11.14%
Pension increase	3.60%	4.73%
(1) The short-term compensation rate increase is 10% (2007: 8%) and the long-term compensation rate increase is 5.25% (2007: 6%).
The expected long-term return on plan assets is determined using the after tax yields of the various asset classes as a guide.
Plan assets AngloGold Ashanti’s pension plan asset allocations at the end of the year, by asset category, are as follows:
Equity securities	58%	68%
Debt securities	37%	27%
Other	5%	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		2008			2007 restated
Related parties
Investments held in related parties are summarised as follows:
Equity securities
AngloGold Ashanti Limited	115,970	1.6%	3	88,458	1.3%	4
Other investments exceeding 5% of total plan assets
Bonds
RSA R157 Government Bonds 13.5%					5.4%	16
IFM Corporate Bond Unit Trust	117,299,950	6.6%	12
Allan Gray Orbis Global
Equity Fund	316,082	13.4%	25
			37
SA Rands million
Related parties
Investments held in related parties are summarised as follows:
Equity securities
AngloGold Ashanti Limited	115,970	1.6%	29	88,458	1.3%	26
Other investments exceeding
5% of total plan assets
Bonds
RSA R157 Government Bonds 13.5%					5.4%	107
IFM Corporate Bond Unit Trust	117,299,950	6.6%	118
Allan Gray Orbis Global Equity Fund	316,082	13.4%	240
			358

Cash flows

Contributions

The company expects to contribute $4m, R37m (2008: $6m, R38m) to its pension plan in 2009.

Restated 2007	2008	Figures in million	2008	Restated 2007
SA Rands			US Dollars
		AngloGold Ashanti Pension Fund Estimated future benefit payments The following pension benefit payments, which reflect the expected future service, as appropriate, are expected to be paid:
	146	2009	15
	143	2010	15
	140	2011	15
	137	2012	14
	135	2013	14
	1,184	Thereafter	126
		Post-retirement medical scheme for AngloGold Ashanti South African employees The provision for post-retirement medical funding represents the provision for health care benefits for employees and retired employees and their registered dependants. The post-retirement benefit costs are assessed in accordance with the advice of independent professionally qualified actuaries. The actuarial method used is the projected unit credit funding method. This scheme is unfunded. The last valuation was performed as at 31 December 2008.
		Information with respect to the defined benefit liability is as follows: Change in benefit obligation
1,094	1,121	Benefit obligation at beginning of year	165	156
6	6	Current service cost	1	1
86	89	Interest cost	11	12
33	35	Participants’ contributions	4	5
(111)	(121)	Benefits paid	(15)	(16)
13	(60)	Actuarial (gain) loss	(7)	2
–	–	Translation	(46)	5
1,121	1,070	Balance at end of year	113	165
(1,121)	(1,070)	Unfunded status at end of year	(113)	(165)
(1,121)	(1,070)	Net amount recognised	(113)	(165)
		Components of net periodic benefit cost
6	6	Current service cost	1	1
86	89	Interest cost	11	12
92	95	Net periodic benefit cost	12	13

	2008	Restated 2007
Assumptions
Assumptions used to determine benefit obligations at the end of the year are as follows:
Discount rate	7.25%	8.25%
Expected increase in health care costs	5.50%	6.75%
Assumed health care cost trend rates at 31 December:
Health care cost trend assumed for next year	5.50%	6.75%
Rate to which the cost trend is assumed to decline (the ultimate trend rate)	5.50%	6.75%

Restated 2007	2008	Figures in million	2008	Restated 2007
SA Rands			US Dollars
	1% point increase	Assumed health care cost trend rates have a significant effect on the amounts reported for healthincrease care plans. A 1% point change in assumed health care cost trend rates would have the following effect:	1% point increase
	8	Effect on total service and interest cost	1
	102	Effect on post-retirement benefit obligation	11
	1% point decrease		1% point decrease
	(7)	Effect on total service and interest cost	(1)
	(88)	Effect on post-retirement benefit obligation	(9)
		Cash flows Contributions AngloGold Ashanti Limited expects to contribute $22m, R209m (2008: $28m, R189m) to the post-retirement medical plan in 2009. Estimated future benefit payments The following medical benefit payments, which reflect the expected future service, as appropriate, are expected to be paid:
	122	2009	13
	123	2010	13
	124	2011	13
	124	2012	13
	125	2013	13
	452	Thereafter	48

Other defined benefit plans

Other defined benefit plans include the Ashanti Retired Staff Pension Plan, the Obuasi Mines Staff Pension Scheme, the retirement 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.

Information in respect of other defined benefit plans for the year ended 31 December 2008 has been aggregated in the tables of change in benefit obligations, change in plan assets and compon net periodic benefit cost and is as follows:

Restated 2007	2008	Figures in million	2008	Restated 2007
SA Rands			US Dollars
		Change in benefit obligation
132	134	Balance at beginning of year	18	19
7	7	Interest cost	–	1
5	8	Actuarial loss	–	–
(10)	(16)	Benefits paid	(1)	(1)
–	33	Translation	–	(1)
134	166	Balance at end of year	17	18
		Change in plan assets
63	67	Fair value of plan assets at beginning of year	9	8
4	6	Expected return on plan assets	–	–
2	(13)	Actuarial (loss) gain	(1)	–
(2)	(2)	Benefits paid	–	–
–	2	Translation	(2)	1
67	60	Fair value of plan assets at end of year	6	9
(67)	(106)	Net amount recognised analysed as follows:	(11)	(9)
20	9	– funded plans	1	3
(87)	(115)	– unfunded plans	(12)	(12)
		Components of net periodic benefit cost
7	7	Interest cost	–	1
(4)	(6)	Expected return on plan assets	–	–
3	1	Net periodic benefit cost	–	1
		Cash flows The other retirement defined benefit plans are all closed to new members and current members are either retired or deferred members. The company does not make contributions to these plans. Estimated future benefit payments The following pension benefit payments, which reflect the expected future service, as appropriate, are expected to be paid:
	12	2009	1
	12	2010	1
	12	2011	1
	12	2012	1
	13	2013	1
	105	Thereafter	12

Five-year defined benefit plan disclosure

Figures in million	2008	Restated 2007	2006	2005	2004
US Dollars
AngloGold Ashanti Pension Fund
Defined benefit obligation	199	257	224	222	216
Plan assets	(188)	(293)	(262)	(230)	(204)
Net unfunded (funded)	11	(36)	(38)	(8)	12
Experience adjustments on plan liabilities	17	3	14	6	10
Experience adjustments on plan assets	33	1	(40)	(41)	(19)
Post-retirement medical scheme for AngloGold Ashanti South African employees
Defined benefit obligation	113	165	156	185	150
Unfunded	113	165	156	185	150
Experience adjustments on plan liabilities	6	(2)	(8)	6	15
Other defined benefit plans
Defined benefit obligation	17	18	19	18	41
Plan assets	(6)	(9)	(8)	(8)	(23)
Unfunded	11	9	11	10	18
Experience adjustments on plan liabilities	1	1	–	(1)	3
Experience adjustments on plan assets	1	–	–	–	(2)
SA Rands
AngloGold Ashanti Pension Fund
Defined benefit obligation	1,885	1,753	1,568	1,408	1,218
Plan assets	(1,785)	(1,997)	(1,835)	(1,459)	(1,150)
Net unfunded (funded)	100	(244)	(267)	(51)	68
Experience adjustments on plan liabilities	138	23	95	37	64
Experience adjustments on plan assets	276	6	(272)	(260)	(125)
Post-retirement medical scheme for AngloGold Ashanti South African employees
Defined benefit obligation	1,070	1,121	1,094	1,172	849
Unfunded	1,070	1,121	1,094	1,172	849
Experience adjustments on plan liabilities	46	(13)	(57)	38	99
Other defined benefit plans
Defined benefit obligation	166	134	132	116	238
Plan assets	(60)	(67)	(63)	(56)	(143)
Unfunded	106	67	69	60	95
Experience adjustments on plan liabilities	10	5	3	(4)	19
Experience adjustments on plan assets	13	(2)	–	(2)	(9)

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 $49m, R403m (2007: $51m, R358m).

Australia (Boddington and 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 $3m, R28m (2007: $3m, R20m).

Ghana and Guinea (Iduapriem, Obuasi and Siguiri)

AngloGold Ashanti mines in Ghana and Guinea contribute to provident plans for their employees which are defined contribution plans. The funds are administered by Boards of Trustees and invest mainly in Ghana and Guinea government treasury instruments, fixed term deposits and other projects. The cost of these contributions was $4m, R33m (2007: $4m, R22m).

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. AngloGold Ashanti seconded employees at Navachab remain members of the applicable pension or retirement fund in terms of their conditions of employment with AngloGold Ashanti. The cost to the group of all these contributions amounted to $1m, R7m (2007: $1m, R6m).

North America (Cripple Creek & Victor)

AngloGold Ashanti 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 USA. AngloGold Ashanti USA's contributions were $2m, R12m (2007: $1m, R10m).

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 $36m, R299m (2007: $36m, R257m).

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

The AngloGold Ashanti 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 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 $3m, R24m (2007: $5m, R36m).

Employees in Argentina contribute 11% of their salaries towards the Argentinian government 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. AngloGold Ashanti employees seconded to Tanzania remain members of the applicable pension or retirement fund in terms of their conditions of employment with AngloGold Ashanti. 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.

Restated 2007	2008	Figures in million	2008	Restated 2007
SA Rands			US Dollars
		31 DEFERRED TAXATION
		Deferred taxation relating to temporary differences is made up as follows:
		Liabilities
11,463	9,095	Tangible assets	962	1,683
108	156	Inventories	16	16
471	742	Derivatives	78	69
38	46	Other	5	6
12,080	10,039		1,061	1,774
		Assets
1,346	1,449	Provisions	153	198
2,521	1,336	Derivatives	141	370
1,465	1,830	Tax losses	194	215
78	61	Other	6	12
5,410	4,676		494	795
6,670	5,363	Net deferred taxation liability	567	979
		Included in the balance sheet as follows:
430	475	Deferred tax assets	50	63
7,100	5,838	Deferred tax liabilities	617	1,042
6,670	5,363	Net deferred taxation liability	567	979
		The movement on the deferred tax balance is as follows:
7,294	6,670	Balance at beginning of year	979	1,042
5	(1)	Taxation on fair value adjustments	–	1
(597)	(2,816)	Income statement movement	(289)	(88)
21	(5)	Discontinued operations (note 13)	(1)	4
1	253	Taxation on cash flow hedges and hedge ineffectiveness	31	–
(36)	(124)	Taxation on actuarial loss	(15)	(5)
38	(378)	Acquisition/disposal of assets and investments	(46)	5
(56)	1,764	Translation	(92)	20
6,670	5,363	Balance at end of year	567	979
		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. Unrecognised taxable temporary differences pertaining to undistributed earnings totalled $386m, R3,652m at 31 December 2008 (2007: $427m, R2,910m).
		32 TRADE, OTHER PAYABLES AND DEFERRED INCOME
		Non-current
75	68	Deferred income	7	11
4	4	Amounts due to related parties	–	1
–	27	Other creditors	4	–
79	99		11	12
		Current
2,698	2,964	Trade creditors	314	397
1,140	1,600	Accruals	169	167
139	47	Deferred income	5	20
291	256	Unearned premiums on normal sale exempted contracts	27	43
50	79	Other creditors	9	8
4,318	4,946		524	635
4,397	5,045	Total trade, other payables and deferred income	535	647
		Current trade and other payables are non-interest bearing and are normally settled within 60 days.
		33 TAXATION
1,042	1,137	Balance at beginning of year	167	149
(1,264)	(1,029)	Payments during the year	(125)	(180)
1,331	737	Provision during the year	92	189
6	23	Transfer to recoverable tax in non-current trade and other receivables	3	1
2	17	Discontinued operations (note 13)	2	–
20	148	Translation	(30)	8
1,137	1,033	Balance at end of year	109	167
		34 CASH GENERATED FROM OPERATIONS
(3,320)	(18,058)	Loss before taxation	(1,377)	(536)
		Adjusted for:
7,112	3,169	Movement on non-hedge derivatives and other commodity contracts	(88)	1,071
3,980	4,620	Amortisation of tangible assets (notes 4, 9 and 16)	560	567
845	926	Finance costs and unwinding of obligations (note 7)	114	120
266	38	Environmental rehabilitation and other expenditure	6	39
84	15,379	Operating special items (note 6)	1,538	13
14	21	Amortisation of intangible assets (notes 4 and 17)	2	2
(489)	(418)	Deferred stripping	(51)	(72)
(333)	(185)	Fair value adjustment on option component of convertible bond	(25)	(47)
(302)	(536)	Interest receivable (note 3)	(66)	(43)
(240)	1,177	Share of equity accounted investments’ loss (profit) (note 8)	138	(35)
381	776	Other non-cash movements	87	56
(1,079)	(1,221)	Movements in working capital	(206)	(152)
6,919	5,688		632	983
		Movements in working capital:
(1,410)	(3,588)	Increase in inventories	(151)	(224)
(404)	(618)	Increase in trade and other receivables	(9)	(64)
735	2,985	(Decrease) increase in trade and other payables	(46)	136
(1,079)	(1,221)		(206)	(152)
		35RELATED PARTIES
		Material related party transactions were as follows: Sales and services rendered to related parties
104	95	Joint ventures	11	15
5	–	Associates	–	1
		Purchases and services acquired from related parties
–	15	Associates	2	–
		Outstanding balances arising from sale of goods and services and other loans due by related parties
37	35	Joint ventures	4	5
89	47	Associates	5	13
		Outstanding balances arising from purchases goods and services and other loans owed to related parties
4	4	Other	1	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. AngloGold Ashanti, which holds an equity investment of 29.7% in Trans-Siberian Gold plc (TSG), entered into a significant transaction during the June 2007 quarter with TSG in which two exploration companies were acquired for a cash consideration of $40m, R284m. The companies acquired consist of Amikan (which holds the Veduga deposit and related exploration and mining licences) and AS APK (which holds the Bogunay deposit and related exploration and mining licences). Details of guarantees to associates are included in note 36. Directors and other key management personnel Details relating to directors' emoluments and shareholdings in the company are disclosed in the Remuneration and Directors' reports. Compensation to key management personnel included the following:
133	79	– short-term employee benefits	10	19
8	2	– post-employment benefits	–	1
54	3	– share-based payments	–	8
195	84		10	28
		Shareholders
		The major shareholders of the company.
		List of principal and subsidiaries.
		36 CONTRACTUAL COMMITMENTS AND CONTINGENCIES Operating leases At 31 December 2008, the group was committed to making the following payments in respect of operating leases for among 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:
72	279	– within one year	30	11
4	169	– between one and two years	18	1
11	447	– between two and five years	47	1
1	15	– after five years	1	–
88	910		96	13
		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
2008			2008
28	54	Within one year	6	3
13	114	Within 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
2007 restated			2007 restated
29	50	Within one year	7	4
24	121	Within one year but not more than five years	18	3
244	411	More than five years	60	36
297	582	Total minimum lease payments	85	43
–	(285)	Amounts representing finance charges	(42)	–
297	297	Present value of minimum lease payments	43	43

Restated 2007	2008	Figures in million	2008	Restated 2007
SA Rands			US Dollars
2,968	1,414	Capital commitments Acquisition of tangible assets Contracted for	162	436
5,511	11,362	Not contracted for	1,396	809
8,479	12,776	Authorised by the directors	1,558	1,245
		Allocated to:
		Project expenditure
2,874	8,384	– within one year	861	422
2,119	658	– thereafter	77	311
4,993	9,042		938	733
		Stay-in-business expenditure
3,208	3,325	– within one year	572	471
278	409	– thereafter	48	41
3,486	3,734		620	512
113	90	Share of underlying capital commitments of joint ventures	11	17
		Purchase obligations Contracted for
2,472	2,729	– within one year	289	363
1,995	3,744	– thereafter	396	293
4,467	6,473		685	656

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 2008

The group has the following forward pricing uranium commitments.

Year	000 lbs (1)	Average contracted price ($/lbs) (2)
2009	494	33.45
2010	988	33.46
2011-2013	1,482	35.94

Great Noligwa, Kopanang and Tau Lekoa produced 1.28 million pounds of uranium oxide in 2008 (2007: 1.23 million 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 37.

Liabilities included on balance sheet	Guaran-tees and contin-gencies	Liabilities included on balance sheet	Guaran-tees and contin-gencies		Guaran-tees and contin-gencies	Liabilities included on balance sheet	Guaran-tees and contin-gencies	Liabilities included on balance sheet
2007 restated		2008		Figures in million	2008		2007 restated
SA Rands					US Dollars
				Contingent liabilities
				Groundwater pollution
–	–	–	–	– South Africa (1)	–	–	–	–
				Deep groundwater pollution
–	–	–	–	– South Africa (2)	–	–	–	–
				Soil and sediment pollution
–	–	–	–	– South Africa (3)	–	–	–	–
				Sales tax on gold deliveries
–	429	–	524	– Brazil (4)	55	–	63	–
				Other tax disputes
–	108	–	175	– Brazil (5)	18	–	16	–
–	57	–	–	Other contingencies (6)	–	–	8	–
				Guarantees
				Financial guarantees
–	100	–	100	Oro Africa (7)	11	–	15	–
				Hedging guarantees (8)
3,382	10,176	3,559	9,335	Ashanti Treasury Services (9)	987	376	1,494	497
3,539	3,539	3,129	3,129	Geita Management Company (10)	331	331	520	520
1,501	1,501	1,142	1,142	AngloGold South America (11)	121	121	220	220
				AngloGold USA Trading
1,547	2,610	1,117	1,667	Company (11)	176	118	383	227
542	542	267	267	Cerro Vanguardia S.A. (11)	28	28	80	80
10,511	19,062	9,214	16,339		1,727	974	2,799	1,544

⁽¹⁾ AngloGold Ashanti Limited has identified a number of groundwater pollution sites at its current operations in South Africa has investigated a number of different technologies and methodologies that could possibly be used to remediate the groundwater pollution. The geology of the area is typified by a dolomite rock formation that is prone to solution cavities Polluted process water from the operations has percolated from pollution sources to this rock formation and has been transported three-dimensionally, creating pollution plumes in the dolomite aquifer. Numerous scientific, technical and reports have been produced and the remedying of the polluted soil and groundwater is the subject of a continued research programme between the University of the Witwatersrand and AngloGold Ashanti. Subject to the technology being developed as a proven remediation technique, no reliable estimate can be made for the obligation.

⁽²⁾ AngloGold Ashanti has identified a flooding and future pollution risk posed by deep groundwater, due to the interconnected nature of operations in the West Wits and Vaal River operations. AngloGold Ashanti is involved in Task Teams and other structures to find long term sustainable solutions for this risk, together with industry partners and government. There is little foundation for the accurate estimate of a liability and thus no reliable estimate can be made for the obligation.

⁽³⁾ AngloGold Ashanti identified offsite pollution impacts in the West Wits Area. This can be attributed to a long period of and uranium mining activity by a number of mining companies, as well as millennia of weathering of natural reef outcrops the catchment areas. Investigations are underway to confirm, quantify and, if necessary, address these impacts. It is too early in the process to make an estimate of the liability.

⁽⁴⁾ Mineração Serra Grande S.A.(MSG), the operator of the Crixas mine in Brazil, has received two tax assessments from the State of Goiás related to payments of sales taxes on gold deliveries for export, one for the period between February 2004 and June 2005 and the other for the period between July 2005 and May 2006. The tax authorities maintain that whenever a taxpayer exports gold mined in the State of Goiás through a branch located in a different Brazilian State, it must obtain authorisation from the Goiás State Treasury by means of a Special Regime Agreement (Termo de Acordo re Regime Especial Statements
– TARE). The MSG operation is co-owned with Kinross Gold Corporation. AngloGold Ashanti Brasil Mineração manages 2008 the operation and its attributable share of the first assessment is approximately $34m, R325m (2007: $39m, R266m). Although MSG requested the TARE in early 2004, the TARE, which authorised the remittance of gold to the company's branch in Minas Gerais specifically for export purposes, was only granted and executed in May 2006. 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 Goiás has appealed to the full board of the State of Goiás's tax administrative council. The second assessment was issued by the State of Goiás in October 2006 on the same grounds as the first one, and the attributable share of the assessment is approximately $21m, R199m (2007: $24m, R163m). AngloGold Ashanti Limited believes both assessments are in violation Federal legislation on sales taxes.

⁽⁵⁾ VAT disputes – Brazil – Mineração Serra Grande received a tax assessment in October 2003 from the State of Minas Gerais related to sales taxes on gold allegedly returned from the branch in Minas Gerais to the company head office in the State of Goiás. The tax administrators rejected the company's appeal against the assessment. The company is now dismissing case at the judicial sphere. The company’s attributable share of the assessment is approximately $6m, R59m (2007: $8m, R54m). Morro Velho, AngloGold Ashanti Brasil Mineração and Mineração Serra Grande are involved in disputes with tax authorities. These disputes involve federal tax assessments including income tax, social contributions and annual property based on ownership of properties outside of urban perimeters (ITR). The amount involved is approximately $12m, R116m (2007: $8m, R54m).

⁽⁶⁾ The group has several other insignificant contingent liabilities, including uncertainty around various tax assessments by Sadiola from the government of Mali.

⁽⁷⁾ The group has provided surety in favour of the lender in respect of gold loan facilities with two wholly owned subsidiaries Oro Group (Pty) Limited, an associate of the group. The group has a total maximum liability, in terms of the suretyships $11m, R100m (2007: $15m, R100m). The suretyship agreements have a termination notice period of 90 days. The group receives a fee from the associate for providing the surety.

⁽⁸⁾ The difference between the amounts stated under guarantees and contingencies, and liabilities included on balance sheet, the NPSE hedges which are covered by guarantees but not included on the balance sheet.

⁽⁹⁾ 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)

⁽¹⁰⁾ AngloGold Ashanti Limited and its wholly-owned subsidiary AngloGold Ashanti Holdings plc have issued hedging guarantees to several counterparty banks in which they have guaranteed the due performance by the Geita Management Company Limited (GMC) of its obligations under or pursuant to the hedging agreements entered into by GMC, and to the payment of all money owing or incurred by GMC as and when due.

⁽¹¹⁾ 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.

37 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 risk. Within the treasury function, there is an independent risk function, which monitors adherence to treasury risk management policy and counterpart limits and provides regular and detailed management reports.

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

• safeguarding the group'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 and 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, Argentinian 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 and silver 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 forward sales contracts was 39,990kg (2007: 108,403kg). The volume of outstanding net call options sold was 146,542kg (2007: 242,373kg) and the volume of outstanding net put options sold was 16,963kg (2007: 46,585kg).

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 and foreign exchange 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 equity (other comprehensive income) and are transferred to earnings when the forecast transactions affect the income statement.

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

The gains and losses on ineffective portions of such derivatives are recognised immediately in the income statement. During the year to 31 December 2008, a loss of $8m, R64m (2007: loss of $10m, R69m) was recognised in loss 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	2008	Restated 2007
US Dollars
Loss on non-hedge derivatives and other commodities	(310)	(808)
Unrealised gain on other commodity physical borrowings	8	3
Provision reversed for loss on future deliveries and other commodities	5	13
Loss on non-hedge derivatives and other commodity contracts per the income statement	(297)	(792)
SA Rands
Loss on non-hedge derivatives and other commodities	(6,388)	(5,272)
Unrealised gain on other commodity physical borrowings	74	23
Provision reversed for loss on future deliveries and other commodities	37	80
Loss on non-hedge derivatives and other commodity contracts per the income statement	(6,277)	(5,169)

Loss on non-hedge derivatives and other commodity contracts was $297m, R6,277m in 2008 compared to a loss of $792m, R5,169m in the previous year. The loss is as a result of the revaluation of 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. The realised loss as a result of the accelerated settlement of non-hedge derivatives was $1,088m, R8,634m in 2008 and is due to the hedge close-outs that were effected during the year.

Included above, the group recognised a loss of $173m, R1,520m (2007: nil) on forward gold contracts previously 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. However, 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. Accordingly, the remaining contracts with this counterparty 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 at fair value on the balance sheet, with a change in fair value reflected in the income statement.

Net open hedge position as at 31 December 2008

The marked-to-market value of all derivatives, irrespective of accounting designation, making up the hedge position was negative $2.46bn (negative R23.25bn) as at 31 December 2008 (as at 31 December 2007: negative $4.27bn, negative R29.10bn). These values were based on a gold price of $872 per ounce, exchange rates of $1 = R9.4550 and A$1 = $0.6947 and the prevailing market interest rates and volatilities at 31 December 2008. The values as at 31 December 2007 were based on a gold price of $836 per ounce, exchange rates of $1 = R6.8104 and A$1 = $0.8798 and the market interest rates and volatilities prevailing at that date.

The table below reflects the hedge position as at 31 December 2008 and includes the effect of all hedge close-outs undertaken during the year.

Summary: All open contracts in the group's commodity hedge position as at 31 December 2008

Year	2009	2010	2011	2012	2013	2014-2016	Total	2007
US Dollar/Gold
Forward contracts
Amount (kg)	(5,960) (1)	8,354	11,765	11,944	9,518	2,845	38,466	84,952
$/oz	$1,199	$204	$383	$404	$408	$510	$467	$322
Put options sold
Amount (kg)	4,043	4,226	3,048	1,882	1,882	1,882	16,963	39,120
$/oz	$671	$708	$533	$430	$440	$450	$579	$607
Call options purchased
Amount (kg)							–	9,813
$/oz								$427
Call options sold
Amount (kg)	14,805	33,394	38,312	24,461	17,857	22,067	150,896	245,093
$/oz	$442	$537	$530	$622	$601	$606	$557	$535
Rand/Gold
Forward contracts
Amount (kg)	(1,866) (1)						(1,866) (1)	933
R/kg	R157,213						R157,213	R116,335
Call options sold
Amount (kg)							–	8,958
R/kg								R216,522
Australian Dollar/Gold
Forward contracts
Amount (kg)	280	3,110					3,390	22,518
A$/oz	A$852	A$652					A$669	A$795
Put options sold
Amount (kg)							–	7,465
A$/oz								A$882
Call options purchased
Amount (kg)	1,244	3,110					4,354	7,464
A$/oz	A$694	A$712					A$707	A$696
Call options sold
Amount (kg)							–	5,599
A$/oz								A$954
Total net gold
Delta (kg) (2)	(4,501)	(36,523)	(44,466)	(31,629)	(24,106)	(20,998)	(162,223)	(323,121)
Delta (oz) (2)	(144,720)	(1,174,250)	(1,429,620)	(1,016,910)	(775,040)	(675,070)	(5,215,610)	(10,388,567)

The open delta hedge position of the group at 31 December 2008 was 5.22Moz or 162t (31 December 2007: 10.39Moz or 323t).

⁽¹⁾Indicates a net long position resulting from forward purchase contracts.

⁽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 2008.

Year	2009	2010	2011	2012	2013	2014-2016	Total	2007
US Dollar/Silver
Put options purchased
Amount (kg)							–	43,545
$/oz								$7.66
Put options sold
Amount (kg)							–	43,545
$/oz								$6.19
Call options sold
Amount (kg)							–	43,545
$/oz								$8.64

Certain of the hedging positions reported in the tables above are governed by early termination clauses in favour of certain counterparts.

Year	2009	2010	2011	2012	2013	2014-2016	Total	2007
Rand/US Dollar (000)
Forward contracts
Amount ($)							–	35,000
R per $								R6.94
Put options purchased
Amount ($)	30,000						30,000	120,000
R per $	R11.56						R11.56	R6.98
Put options sold
Amount ($)	50,000						50,000	120,000
R per $	R9.52						R9.52	R6.65
Call options sold
Amount ($)	50,000						50,000	135,000
R per $	R11.61						R11.61	R7.35
Australian Dollar/US Dollar (000)
Forward contracts
Amount ($)	450,000						450,000	190,000
$ per A$	$0.65						$0.65	$0.84
Put options purchased
Amount ($)	10,000						10,000	140,000
$ per A$	$0.69						$0.69	$0.83
Put options sold
Amount ($)	10,000						10,000	140,000
$ per A$	$0.76						$0.76	$0.87
Call options sold
Amount ($)	10,000						10,000	140,000
$ per A$	$0.64						$0.64	$0.81
Brazilian Real/US Dollar (000)
Forward contracts
Amount ($)	62,340						62,340	31,000
BRL per $	BRL1.86						BRL1.86	BRL1.99
Put options purchased
Amount ($)							–	24,000
BRL per $								BRL1.87
Call options sold
Amount ($)							–	68,000
BRL per $								BRL1.92

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 of good credit standing and counterpart credit ratings are regularly monitored.

The group has sufficient undrawn borrowing facilities available to fund working capital requirements (notes 28 and 38).

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		Total
	Million	Effective rate %	Million	Effective rate %	Million	Effective rate %	Million	Effective rate %	Million
2008
Borrowings	1,114		883		12		40		2,049
–In USD	1,072	2.6	326	2.6	–		–		1,398
–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	4	4.0	5	3.4	3	3.2	–		12
Trade and other payables	488		–		–		–		488
Restated 2007
Borrowings	397		1,041		570		60		2,068
– In USD	69	4.7	1,037	2.4	407	8.5	–		1,513
– ZAR in USD equivalent	327	10.5	3	9.9	12	9.9	60	9.8	402
– AUD in USD equivalent	1	7.7	1	7.7	150	7.7	–		152
– BRL in USD equivalent	–		–		1	5.0	–		1
Trade and other payables	571		1		–		–		572

The following are the undiscounted forecast principal cash flows arising from all on balance sheet derivative contracts (cash flow hedges and non-hedges).

Derivative financial assets and (liabilities)

	Within one year	Between one and two years	Between two and five years	After five years	Total
US Dollar million
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)
At 31 December 2007
Cash inflows from assets	381	72	59	44	556
Cash outflows from liabilities	(697)	(575)	(1,113)	(685)	(3,070)
Net cash outflows	(316)	(503)	(1,054)	(641)	(2,514)
SA Rand million
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)
At 31 December 2007
Cash inflows from assets	2,595	490	402	300	3,787
Cash outflows from liabilities	(4,747)	(3,916)	(7,580)	(4,665)	(20,908)
Net cash outflows	(2,152)	(3,426)	(7,178)	(4,365)	(17,121)

Credit risk

Credit risk arises from the risk that a counterpart may default or not meet its obligations timeously. The group minimises credit risk by ensuring that credit risk is spread over a number of counterparts. These counterparts are financial and banking institutions of good credit standing. Counterpart credit limits and exposures are reviewed by the Treasury Committee. Where possible, management tries to ensure that netting agreements are in place. No set-off is applied to the balance sheet due to the different maturity profiles of assets and liabilities. The combined maximum credit risk exposure at the balance sheet date by class of derivative financial instrument is $570m, R5,386m (2007: $516m, R3,516m) on a contract by contract basis.

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

Figures in million	2008	Restated 2007	2008	Restated 2007
	US Dollars		SA Rands
Commodity option contract	56	200	527	1,365
Foreign exchange option contracts	6	14	57	94
Forward sale commodity contracts	468	255	4,426	1,736
Forward foreign exchange contracts	25	12	239	82
Gold interest rate swap	15	35	137	239
All derivatives	570	516	5,386	3,516
Other investments	49	69	461	471
Other non-current assets	1	2	17	16
Trade and other receivables	82	60	773	385
Cash restricted for use (note 23)	44	39	415	264
Cash and cash equivalents (note 24)	575	477	5,438	3,246
Total financial assets	1,321	1,163	12,490	7,898
Financial guarantees	11	15	100	100
Total	1,332	1,178	12,590	7,998

In addition, the group has also guaranteed the hedging commitments of several subsidiary companies as disclosed in note 36. Credit risk exposure of all derivatives netted by counterparts amounts to $207m, R1,954m (2007: $123m, R839m). Trade and other receivables that are past due but not impaired totalled $8m, R74m (2007: $1m, R5m). Trade and other receivables that are impaired totalled $1m, R7m and other investments that are impaired totalled $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 values of financial instruments are determined at discrete points in time based on relevant market information.

These estimates involve uncertainties and cannot be determined with precision. The estimated fair values of the group's financial instruments as at 31 December 2008 are as follows:

Type of instrument

	Carrying amount	Fair value	Carrying amount	Fair value
Figures in million	2008		Restated 2007
US Dollars
Financial assets
Other investments (note 19)	66	67	103	103
Other non-current assets	1	1	2	2
Trade and other receivables	82	82	56	56
Cash restricted for use (note 23)	44	44	39	39
Cash and cash equivalents (note 24)	575	575	477	477
Derivatives (3)	570	570	516	516
Financial liabilities
Borrowings (note 28)	1,933	1,918	1,848	1,879
Trade and other payables	488	488	572	572
Derivatives (3)	1,762	3,068	2,918	4,883
SA Rands
Financial assets
Other investments (note 19)	625	638	699	700
Other non-current assets	17	17	16	16
Trade and other receivables	773	773	385	385
Cash restricted for use (note 23)	415	415	264	264
Cash and cash equivalents (note 24)	5,438	5,438	3,246	3,246
Derivatives (3)	5,386	5,386	3,516	3,516
Financial liabilities
Borrowings (note 28)	18,270	18,131	12,589	12,804
Trade and other payables	4,619	4,619	3,892	3,892
Derivatives (3)	16,661	29,006	19,873	33,253

⁽³⁾Carrying amounts represent on-balance sheet derivatives and fair value includes off-balance sheet normal sale exempted contracts.

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, cash and cash equivalents and trade and other payables

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

Trade and other receivables

The fair value of the non-current portion of trade and other receivables 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.

Borrowings

The fair values of listed fixed rate debt and the convertible bonds are shown at their closing market value as at 31 December 2008. 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 values of derivatives are estimated based on ruling market prices, volatilities, interest rates and credit risk as at 31 December 2008. The fair value amounts for derivatives include off balance sheet normal sale exempted gold contracts, which are not carried on the balance sheet and are excluded from the carrying amount. All other derivatives are carried on balance sheet at fair value.

The group uses the Black-Scholes option pricing formula to value option contracts. One of the inputs into the model is the level of volatility. These volatility levels are themselves not exchange traded and are not observable generally in the market. The group uses volatility inputs supplied by leading market participants (international banks). The group believes that no other possible alternative would result in significantly different fair value estimations.

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	2008
US Dollars
Commodity option contracts	–	–	56	56	(534) (4)	–	(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)
Sub-total hedging	–	–	570	570	(1,306)	(147)	(1,615)	(3,068)
Option component of convertible bonds	–	–	–	–	–	–	–	–
All derivatives	–	–	570	570	(1,306)	(147)	(1,615)	(3,068)
	Restated 2007
Commodity option contracts	–	–	200	200	(708) (4)	–	(2,230)	(2,938)
Foreign exchange option contracts	–	–	14	14	–	–	(20)	(20)
Forward sale commodity contracts	–	3	252	255	(1,230)	(339)	(302)	(1,871)
Forward foreign exchange contracts	–	4	8	12	–	–	(1)	(1)
Gold interest rate swaps	–	–	35	35	(27)	–	(1)	(28)
Sub-total hedging	–	7	509	516	(1,965)	(339)	(2,554)	(4,858)
Option component of convertible bonds	–	–	–	–	–	–	(25)	(25)
All derivatives	–	7	509	516	(1,965)	(339)	(2,579)	(4,883)
Figures in million				2008
SA Rands
Commodity option contracts	–	–	527	527	(5,048) (4)	–	(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)
Sub-total hedging	–	–	5,386	5,386	(12,345)	(1,394)	(15,267)	(29,006)
Option component of convertible bonds	–	–	–	–	–	–	–	–
All derivatives	–	–	5,386	5,386	(12,345)	(1,394)	(15,267)	(29,006)
	Restated 2007
Commodity option contracts	–	–	1,365	1,365	(4,822) (4)	–	(15,190)	(20,012)
Foreign exchange option  contracts	–	–	94	94	–	–	(136)	(136)
Forward sale commodity  contracts	–	19	1,717	1,736	(8,377)	(2,307)	(2,056)	(12,740)
Forward foreign exchange  contracts	–	28	54	82	–	–	(9)	(9)
Gold interest rate swaps	–	–	239	239	(181)	–	(5)	(186)
Sub-total hedging	–	47	3,469	3,516	(13,380)	(2,307)	(17,396)	(33,083)
Option component of  convertible bonds	–	–	–	–	–	–	(170)	(170)
All derivatives	–	47	3,469	3,516	(13,380)	(2,307)	(17,566)	(33,253)

The derivative assets (liabilities) are stated after taking into consideration the impact of credit risk totalling $227m at 31 December 2008 (2007: nil).

⁽⁴⁾ Deliverable call options sold.

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.

The following table discloses the approximate sensitivities of the US dollars marked-to-market value of the hedge book to key underlying factors at 31 December 2008 (actual changes in the timing and amount of the following variables may differ from the assumed changes below).

The table also 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 2009. 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 rate (+)	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
Currency (R/$)	Spot(+1)	–	(1)	2	1	(34)
Currency (A$/$)	Spot(+0.25)	43	–	132	175	62 (5)
Currency (BRL/$)	Spot(+0.25)	–	(1)	(4)	(5)	(4) (5)
Gold price ($/oz)	Spot(+200)	(546)	(58)	(449)	(1,053)	(2,095)
USD interest rate (%)	IR(+0.1)	(15)	–	(33)	(48)	(101)
ZAR interest rate (%)	IR(+1.5)	–	–	–	–	(6)
AUD interest rate (%)	IR(+1.5)	(1)	–	(1)	(2)	(2)
Gold interest rate (%)	IR(+0.5)	22	1	43	66	115

	Change in rate (-)	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
Currency (R/$)	Spot(-1)	–	1	(4)	(3)	29
Currency (A$/$)	Spot(-0.25)	(43)	–	(130)	(173)	(75) (6)
Currency (BRL/$)	Spot(-0.25)	–	1	5	6	4 (6)
Gold price ($/oz)	Spot(-200)	541	58	376	975	1,928
USD interest rate (%)	IR(-0.1)	15	–	35	50	104
ZAR interest rate (%)	IR(-1.5)	–	–	–	–	6
AUD interest rate (%)	IR(-1.5)	1	–	1	2	2
Gold interest rate (%)	IR(-0.5)	(23)	(1)	(44)	(68)	(118)

⁽⁵⁾ Change in rate (+) of Spot (+0.1).

⁽⁶⁾ Change in rate (-) of Spot (-0.1). IR represents Interest Rate.

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

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 2008 (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 in interest rates only absolute numbers are presented.

	Change in interest rate	Change in interest amount in currency	Change in interest amount US dollars	Change in interest rate	Change in interest amount in currency	Change in interest amount US dollars
	(%)	(million)	(million)	(%)	(million)	(million)
Figures in million	2008			Restated 2007
Financial assets
USD denominated (%)	1.00	1	1	1.00	1	1
ZAR denominated (%) (7)	1.50	10	1	1.50	13	2
AUD denominated (%)	1.50	–	–	1.50	1	1
BRL denominated (%)	2.50	4	2	2.50	2	1
NAD denominated (%)	1.50	1	–	1.50	1	–
Financial liabilities
USD denominated (%)	1.00	3	3	1.00	4	4
AUD denominated (%)	1.50	8	6	1.50	3	2

⁽⁷⁾ This is the only interest rate risk for the company.

38 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 $1.7 billion 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, AngloGold Ashanti secured a $1 billion one-year term facility with the option to extend to November 2010 for the purposes of refinancing the $1 billion convertible bond due for redemption in February 2009.

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	2008	Restated 2007
US Dollars
Borrowings (note 28)	1,933	1,848
Corporate office finance lease (note 28)	(27)	(37)
Unamortised portion of the convertible bond	(4)	23
Cash restricted for use (note 23)	(44)	(39)
Cash and cash equivalents (note 24)	(575)	(477)
Net debt	1,283	1,318
Net capital employed (1)	4,683	5,360
Gearing ratio	27%	25%
SA Rands
Borrowings (note 28)	18,270	12,589
Corporate office finance lease (note 28)	(254)	(249)
Unamortised portion of the convertible bond	(38)	157
Cash restricted for use (note 23)	(415)	(264)
Cash and cash equivalents (note 24)	(5,438)	(3,246)
Net debt	12,125	8,987
Net capital employed (1)	44,275	36,521
Gearing ratio	27%	25%

⁽¹⁾ Refer to Non-GAAP note 8.

39 CHANGES TO COMPARATIVE INFORMATION

Balance per annual financial statements 2007	The effect of equity accounted joint ventures	Revised 2007 comparative	Figures in million	Balance per annual financial statements 2007	The effect of equity accounted joint ventures	Revised 2007 comparative
SA Rands				US Dollars
			Income statement
24,383	(2,507)	21,876	Revenue	3,472	(359)	3,113
23,052	(1,951)	21,101	Gold income	3,280	(278)	3,002
(18,495)	1,254	(17,241)	Cost of sales	(2,636)	178	(2,458)
(5,081)	(88)	(5,169)	Loss on non-hedge derivatives and other commodity contracts	(780)	(12)	(792)
(524)	(785)	(1,309)	Gross loss	(136)	(112)	(248)
(885)	(9)	(894)	Corporate administration and other expenses	(126)	(2)	(128)
(115)	–	(115)	Market development costs	(16)	–	(16)
(839)	15	(824)	Exploration costs	(120)	3	(117)
(134)	–	(134)	Other operating expenses	(20)	–	(20)
(139)	55	(84)	Operating special items	(21)	8	(13)
(2,636)	(724)	(3,360)	Operating loss	(439)	(103)	(542)
16	–	16	Dividend received from other investments	2	–	2
312	(10)	302	Interest received	45	(2)	43
4	(10)	(6)	Exchange gain (loss)	1	(2)	(1)
333	–	333	Fair value adjustment on option component of convertible bond	47	–	47
(880)	35	(845)	Finance costs and unwinding of obligations	(125)	5	(120)
(164)	404	240	Share of equity accounted investments’ (loss) profit	(23)	58	35
(3,015)	(305)	(3,320)	Loss before taxation	(492)	(44)	(536)
(1,039)	305	(734)	Taxation	(145)	44	(101)
(4,054)	–	(4,054)	Loss after taxation from continuing operations	(637)	–	(637)
			Discontinued operations
7	–	7	Profit from discontinued operations	1	–	1
(4,047)	–	(4,047)	Loss for the year	(636)	–	(636)
			Allocated as follows
(4,269)	–	(4,269)	Equity shareholders	(668)	–	(668)
222	–	222	Minority interest	32	–	32
(4,047)	–	(4,047)		(636)	–	(636)
			Basic and diluted (loss) profit per ordinary share (cents)
(1,519)	–	(1,519)	Loss from continuing operations	(237)	–	(237)
3	–	3	Profit from discontinued operations	–	–	–
(1,516)	–	(1,516)	Loss	(237)	–	(237)

Balance per annual financial statements 2007	The effect of equity accounted joint ventures	Revised 2007 comparative	Figures in million	Balance per annual financial statements 2007	The effect of equity accounted joint ventures	Revised 2007 comparative
SA Rands				US Dollars
			Balance sheet
			ASSETS
			Non-current assets
45,783	(688)	45,095	Tangible assets	6,722	(101)	6,621
2,996	(137)	2,859	Intangible assets	440	(20)	420
140	2,043	2,183	Investments in associates and equity accounted joint ventures	21	300	321
795	(96)	699	Other investments	117	(14)	103
2,217	(410)	1,807	Inventories	325	(60)	265
566	(179)	387	Trade and other receivables	83	(26)	57
543	(113)	430	Deferred taxation	80	(17)	63
278	–	278	Other non-current assets	41	–	41
53,318	420	53,738		7,829	62	7,891
			Current assets
4,603	(850)	3,753	Inventories	676	(125)	551
1,587	(203)	1,384	Trade and other receivables	233	(30)	203
3,516	–	3,516	Derivatives	516	–	516
2	–	2	Current portion of other non-current assets	–	–	–
264	–	264	Cash restricted for use	39	–	39
3,381	(135)	3,246	Cash and cash equivalents	496	(19)	477
13,353	(1,188)	12,165		1,960	(174)	1,786
210	–	210	Non-current assets held for sale	31	–	31
13,563	(1,188)	12,375		1,991	(174)	1,817
66,881	(768)	66,113	Total assets	9,820	(112)	9,708
			EQUITY AND LIABILITIES
22,371	–	22,371	Share capital and premium	3,285	–	3,285
(6,167)	–	(6,167)	Retained earnings and other reserves	(906)	–	(906)
16,204	–	16,204	Shareholders' equity	2,379	–	2,379
429	–	429	Minority interests	63	–	63
16,633	–	16,633	Total equity	2,442	–	2,442
			Non-current liabilities
10,441	(25)	10,416	Borrowings	1,533	(4)	1,529
3,361	(185)	3,176	Environmental rehabilitation and other provisions	494	(27)	467
1,208	–	1,208	Provision for pension and post-retirement benefits	177	–	177
79	–	79	Trade, other payables and deferred income	12	–	12
1,110	–	1,110	Derivatives	163	–	163
7,159	(59)	7,100	Deferred taxation	1,051	(9)	1,042
23,358	(269)	23,089		3,430	(40)	3,390
			Current liabilities
2,309	(136)	2,173	Current portion of borrowings	339	(20)	319
4,549	(231)	4,318	Trade, other payables and deferred income	668	(33)	635
18,763	–	18,763	Derivatives	2,755	–	2,755
1,269	(132)	1,137	Taxation	186	(19)	167
26,890	(499)	26,391		3,948	(72)	3,876
50,248	(768)	49,480	Total liabilities	7,378	(112)	7,266
66,881	(768)	66,113	Total equity and liabilities	9,820	(112)	9,708

Balance per annual financial statements 2007	The effect of equity accounted joint ventures	Revised 2007 comparative	Figures in million	Balance per annual financial statements 2007	The effect of equity accounted joint ventures	Revised 2007 comparative
SA Rands				US Dollars
			Cash flow statement
			Cash flows from operating activities
24,059	(2,464)	21,595	Receipts from customers	3,424	(353)	3,071
(16,144)	1,468	(14,676)	Payments to suppliers and employees	(2,303)	215	(2,088)
7,915	(996)	6,919	Cash generated from operations	1,121	(138)	983
(14)	–	(14)	Cash utilised by discontinued operations	(2)	–	(2)
1	443	444	Dividends received from associates	–	65	65
(1,664)	400	(1,264)	Taxation paid	(237)	57	(180)
6,238	(153)	6,085	Netcash inflow from operating activities	882	(16)	866
			Cash flows from investing activities
			Capital expenditure
(3,440)	28	(3,412)	– project expenditure	(489)	4	(485)
(3,758)	32	(3,726)	– stay-in-business expenditure	(535)	5	(530)
			Acquisition of assets from Trans-Siberian
(284)	–	(284)	Gold plc	(40)	–	(40)
197	–	197	Proceeds from disposal of tangible assets	29	–	29
9	–	9	Proceeds from disposal of assets of discontinued operations	1	–	1
(190)	–	(190)	Other investments acquired	(27)	–	(27)
1	–	1	Associates loans repaid	–	–	–
174	–	174	Proceeds from disposal of investments	25	–	25
16	–	16	Dividend received from other investments	2	–	2
(177)	–	(177)	Increase in cash restricted for use	(25)	–	(25)
260	(13)	247	Interest received	37	(2)	35
(7)	–	(7)	Loans advanced	(1)	–	(1)
10	–	10	Repayment of loans advanced	1	–	1
(7,189)	47	(7,142)	Net cash outflow from investing activities	(1,022)	7	(1,015)
			Cash flows from financing activities
247	–	247	Proceeds from issue of share capital	34	–	34
(4)	–	(4)	Share issue expenses	–	–	–
6,111	(193)	5,918	Proceeds from borrowings	870	(27)	843
(3,932)	280	(3,652)	Repayment of borrowings	(560)	40	(520)
(511)	9	(502)	Finance costs paid	(73)	1	(72)
(1,050)	–	(1,050)	Dividends paid	(144)	–	(144)
861	96	957	Net cash inflow from financing activities	127	14	141
(90)	(10)	(100)	Net (decrease) increase in cash and cash equivalents	(13)	5	(8)
4	45	49	Translation	14	–	14
3,467	(170)	3,297	Cash and cash equivalents at beginning of year	495	(24)	471
3,381	(135)	3,246	Cash and cash equivalents at end of year	496	(19)	477

The 2007 Statement of recognised income and expense is not affected by any of the restatements included above.

40 RECENT DEVELOPMENTS

Repayment of convertible bond and term facility amendment

The $1 billion convertible bond matured on 27 February 2009 and was redeemed by the company using the proceeds from the Standard Chartered term facility that had been arranged for this purpose. The company has signed an agreement with Standard Chartered amending the terms of the term facility signed in November 2008. The amendment, which comes into effect upon repayment of $750 million of the facility prior to 26 August 2009 will, in addition to the outstanding balance of $250 million allow the company to retain revolving access to a further $250 million. The margin over the banks capped cost of funds will now remain fixed at 4.25% for the full two-year period of the facility.

AngloGold Ashanti to sell its 33.33% joint venture interest in Boddington Gold Mine to Newmont Mining Corporation

On 28 January 2009, AngloGold Ashanti announced that it had agreed to sell its indirect 33.33% joint venture interest in the Boddington Gold Mine in Western Australia to Newmont Mining Corporation (Newmont). Consideration for the sale consists of:

• $750 million payable in cash upon the fulfilment of all conditions precedent;
• $240 million that will be settled, at Newmont’s option in December 2009, payable either in cash and/or Newmont shares; and
• A royalty capped at $100 million, calculated as the product of, 50% of the amount by which the average spot gold price in each quarter exceeds the cash costs of the Boddington Gold Mine, as reported by Newmont, by $600 per ounce and, onethird of total gold production from the Boddington Gold Mine in that quarter. The royalty is payable in each quarter from and after the second quarter in 2010 that the above threshold is achieved.

AngloGold Ashanti will be reimbursed for all contributions made to the joint venture after 1 January 2009 and AngloGold Ashanti will pay Newmont $8 million in respect of its share of working capital at 1 January 2009.

AngloGold Ashanti to sell Tau Lekoa mine

On 17 February 2009, AngloGold Ashanti announced that it has agreed to sell with effect from 1 January 2010 (or after), the Tau Lekoa mine together with the adjacent Weltevreden and Goedgenoeg project areas to Simmer & Jack Mines Limited (Simmers) for an aggregate consideration of:

• R600 million less an offset up to a maximum of R150 million for unhedged free cash flow⁽¹⁾ generated by the Tau Lekoa mine in the period between 1 January 2009 and 31 December 2009 as well as an offset for unhedged free cash flow⁽¹⁾ generated by the Tau Lekoa mine in the period between 1 January 2010 and the effective date of the sale. Simmers shall endeavour to settle the full amount in cash, however it may issue to AngloGold Ashanti ordinary shares in Simmers up to a maximum value of R150 million with the remainder being payable in cash; and
• a royalty, (Royalty) determined at 3% of the net revenue (being gross revenue less state royalties) generated by the Tau Lekoa mine and any operations as developed at Weltevreden and Goedgenoeg. The Royalty will be payable quarterly for each quarter commencing from 1 January 2010 until the total production from the assets upon which the Royalty is paid is equal to 1.5 million ounces and provided that the average quarterly rand price of gold is equal to or exceeds R180,000/kg (in 1 January 2010 terms).

⁽¹⁾ Net cash inflow from operating activities less stay-in-business capital expenditure.