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Notes to company financial statements
for the year ended 31 December 2000

Figures in million

		2000	1999
		SA Rands
1	Revenue
	Revenue consists of the following principal categories:
	Sale of gold	11,021	11,055
	Sale of uranium, silver and sulphuric acid	245	282
	Interest receivable (note 4)	138	321
	Dividends received from other investments (note 4)	-	417
		11,404	12,075
2	Cost of sales
	Cash operating costs	8,121	7,892
	Other cash costs	34	58
	Total cash costs	8,155	7,950
	Retrenchment costs (note 7)	98	54
	Rehabilitation and other non-cash costs	(48)	57
	Production costs	8,205	8,061
	Amortisation of mining assets (note 10)	704	676
	Total production costs	8,909	8,737
	Inventory change	(60)	10
		8,849	8,747
3	Other net income
	Other net income consists of the following principal categories:
	Exchange gain on transactions other than sales	14	17
	Profit on sale of assets	7	14
		21	31
	Unwinding of decommissioning obligation (note 21)	-	(15)
		21	16
4	Investment income
	Investment income consists of the following principal categories:
	Interest receivable (note 1)	138	321
	Income from associates before taxation	27	43
	Dividends received from other investments (note 1)	-	417
		165	781

		2000	1999
		SA Rands
5	Finance costs
	Interest paid on bank loans and overdrafts	90	68
	Interest paid on debentures	16	17
		106	85
6	Profit before exceptional items is arrived at after taking account of:
	Auditors' remuneration	4	2
	Audit fees	3	2
	Underprovision prior year	1	-
	Other services	-	-
	Grants for educational and community development	14	5
	Operating lease charges	9	8
7	Employee benefits
	The average monthly number of employees, including contractors during the year
	was made up as follows:	79,124	82,645
	Surface	16,130	17,022
	Underground	62,994	65,623
	Employee costs including executive directors	4,976	4,770
	Salaries, wages and other benefits	4,496	4,269
	Defined contribution pension plans expense	303	353
	Post-retirement medical costs	36	48
	Defined benefit expense
	- current service cost	32	30
	- interest cost	75	67
	- expected return on plan assets	(24)	(189)
	- actuarial (gain) loss	(40)	108
	- past service costs	-	30
	Retrenchment costs (note 2)	98	54
	Actual return on plan assets
	- defined benefit pension plan	24	189
	Refer to directors' report for details of directors' emoluments.

 

		2000	1999
		SA Rands
8	Taxation
	Current taxation	235	363
	Mining taxation	44	33
	Non-mining taxation	187	331
	Under (over) provision prior years	3	(13)
	Share of associates' taxation	1	12
	Deferred taxation	(48)	(433)
	Current (note 22)	148	27
	Impairment (note 22)	(196)	-
	Rate change (note 22)	-	(423)
	Share of associates' taxation - rate change	-	(37)
		187	(70)

 

			2000			1999
		Non-mining		Mining	Non-mining		Mining
	Tax reconciliation	%		%	%		%
	A reconciliation of the mining and non-mining tax rate compared with
	that charged in the income statement is set out in the following table:
	Marginal tax rate	38		46	38		46
	Adjusted for hedge revenue	27		(13)	32		(23)
	Disallowed expenditure	2		6	1		12
	Write back of amortisation and inventory change	-		26	-		26
	Mining capital appropriation	-		(32)	-		(35)
	Mining tax formula adjustment	-		-	-		(12)
	Dividends received	(31)		-	(26)		-
	Royalties	-		(25)	-		(25)
	Change in tax rate	-		-	-		(37)
	Other	5		(4)	3		14
	Effective tax rate	41		4	48		(34)
	The company has unredeemed capital expenditure estimated at R3,161 million (1999: R2,995 million) which is available for set-off against future taxable income from the mining operations of Joel mine.

 

		2000	1999
		SA Rands
9	Dividends
	Ordinary shares
	No.87 of 1,100 SA cents per ordinary share declared on 9 February 2000
	and paid on 31 March 2000.	1,178	783
	No.88 of 750 SA cents per ordinary share declared on 26 July 2000
	and paid on 22 September 2000.	803	881
		1,981	1,664
	Dividend No. 89 of 650 SA cents per ordinary share was declared on 30 January 2001.

				Mineral
		Mine	Mine	rights,
		development	infra-	dumps and
		costs	structure	ore reserves	Land	Total
10	Mining assets
	SA Rands
	Cost
	Balance at 31 December 1998	12,530	4,314	367	35	17,246
	Additions	922	3	5	-	930
	Transfers and disposals	26	(2)	-	-	24
	Balance at 31 December 1999	13,478	4,315	372	35	18,200
	Additions	1,010	56	-	-	1,066
	Transfers and disposals	-	(19)	-	-	(19)
	Balance at 31 December 2000	14,488	4,352	372	35	19,247
	Accumulated amortisation
	Balance at 31 December 1998	3,953	2,260	15	-	6,228
	Amortisation charge for the year (note 2)	534	111	31	-	676
	Transfers and disposals	25	-	-	-	25
	Balance at 31 December 1999	4,512	2,371	46	-	6,929
	Amortisation charge for the year (note 2)	556	125	23	-	704
	Impairments	470	-	-	-	470
	Balance at 31 December 2000	5,538	2,496	69	-	8,103
	Net book value at 31 December 1999	8,966	1,944	326	35	11,271
	Net book value at 31 December 2000	8,950	1,856	303	35	11,144

 

	South Africa The South African operations consisting of several cash generating units, recognised an impairment loss of R470 million (before taxation) in respect of mining assets. The impairment loss was made up as follows:
		2000
		SA Rands
	Ergo and Matjhabeng based on the value in use and at the relevant discount rate.	173
	Freddies Four Shaft being a discontinued project at the full remaining book value of the mining assets	23
	Elandsrand and Deelkraal operations based on the net selling price per the agreement with Harmony
	Gold Mining Company Limited dated 31 January 2001.	274
		470

	The impairment loss in respect of the cash generating units arose from the declining values of the remaining ore reserves and the view that the bullion price was unlikely to recover substantially from its low levels in the medium-term.
				2000	1999
				SA Rands
11	Investment in associates
	The company has the following associated undertakings:
	-	A 42.73% (1999: 42.73%) interest in Rand Refinery Limited, which is involved in the refining of
		bullion and by-products which are sourced inter alia from South African and foreign gold
		producing mining companies. The year end of Rand Refinery Limited is 30 September.
	-	A 25% (1999: Nil) interest in Oro Group (Proprietary) Limited which is involved in the manufacture
		and wholesale of jewellery. The year end of Oro Group (Proprietary) Limited is March.
		Equity accounting is based on the results for the six months ended 30 September 2000.
	Carrying value of associates consists of:
	Unlisted shares at cost			9	9
	Share of retained earnings			71	71
	Profit after taxation			26	-
	Acquisitions			55	-
	Dividends			(12)	-
	Disposals			(1)	-
	Carrying value			148	80
	Directors' valuation of unlisted associates			148	80

 

		2000	1999
		SA Rands
11	Investment in associates (continued)
	The company's effective share of certain balance sheet items of its associates are as follows:
	Non-current assets	79	65
	Current assets	94	62
	Total assets	173	127
	Non-current liabilities	34	6
	Current liabilities	37	41
	Total equity and liabilities	71	47
	Net assets	102	80
	Reconciliation of the carrying value of investments in associates with net assets
	Net assets	102	80
	Goodwill	46	-
	Carrying value of investment in associates	148	80
12	Other investments
	Listed investments
	Balance at beginning of year	-	1
	Disposals	-	(1)
	Balance at end of year	-	-
	Market value of listed investments	-	-
	Unlisted investments
	Balance at beginning of year	11	17
	Additions	11	4
	Disposals	-	(10)
	Balance at end of year	22	11
	Directors' valuation of unlisted investments	22	11
	Total other investments	22	11
	Total valuation	22	11
13	AngloGold Environmental Rehabilitation Trust
	Balance at beginning of year	220	191
	Contributions	59	29
	Balance at end of year	279	220
	Market value of investments held in the AngloGold Environmental Rehabilitation Trust	379	285
14	Long-term loans
	Unsecured
	Loan to AngloGold Limited Employees' Share and Debenture Trust on which interest is payable annually
	at the official interest rate per the seventh schedule of the South African Income Tax Act (note 20)	120	115
	Other	37	42
		157	157
		2000	1999
		SA Rands
15	Inventories
	At cost
	Gold in process	317	277
	Gold on hand	20	-
	By-products	89	80
	Total metal inventories	426	357
	Consumable stores at average cost	213	237
		639	594
16	Trade and other receivables
	Trade debtors	114	170
	Prepayments and accrued income	3	39
	South African Revenue Services - Value added taxation	111	121
	Other debtors	466	480
		694	810
17	Cash and cash equivalents
	Cash and deposits on call	76	1,715
	Money market instruments	158	500
		234	2,215
18	Share capital and premium
	Share capital
	Authorised
	200,000,000 ordinary shares of 50 cents each	100	100
	2,000,000 A redeemable preference shares of 50 cents each	1	1
	5,000,000 B redeemable preference shares of 1 cent each	-	-
		101	101
	Issued
	107,021,087 (1999: 106,614,678) ordinary shares of 50 cents each
	Balance at beginning of year	53	49
	Issue of shares	1	4
	Balance at end of year	54	53
	2,000,000 A redeemable preference shares of 50 cents each	1	1
	778,896 B redeemable preference shares of 1 cent each	-	-
	Balance at end of year	1	1
	Share premium
	Balance at beginning of year	8,111	5,556
	Movement arising from issue of shares	116	2,597
	Share issue expenses written off	(18)	(42)
	Balance at end of year	8,209	8,111
	Share capital and premium	8,264	8,165
		2000	1999
		SA Rands
19	Borrowings
	Unsecured loans
	Dresdner Gold Loan	1,136	923
	The loan has been swapped into dollars. Interest charged at libor plus 1% per annum.
	Loan is repayable in March 2001.
	Credit Agricole	910	-
	Interest charged at libor plus 0.75% per annum. Loan is repayable by July 2002.
	Economic Development Corporation	9	11
	Interest charged at libor plus 0.6% per annum. Loan is repayable in half-yearly instalments
	terminating in December 2002.
	Local money market short-term borrowings	514	-
	Total borrowings	2,569	934
	Less: Current portion of borrowings included in current liabilities	1,651	4
	Total long-term borrowings	918	930
	Amounts falling due
	Within one year	1,651	4
	Between one and two years	918	926
	Between two and five years	-	4
		2,569	934
20	Debentures
	Balance at beginning of year	115	92
	Allocations during the year	13	34
	Exercised during the year	(3)	(11)
	Repurchased during the year	(5)	-
	Balance at end of year (note 14)	120	115
	494,900 (1999: 487,500) unsecured variable rate compulsory convertible debentures issued in terms of
	the AngloGold Share Incentive Scheme.
	Interest on these debentures is payable annually at the official interest rate per the seventh schedule
	of the South African Income Tax Act.
	The terms and conditions of the debentures are detailed in the directors' report.
21	Provisions
	Post-retirement medical funding	746	746
	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.
	The main assumptions used in calculating the costs were an annual discount rate of 13.5 per cent, health
	care inflation of 10.5 per cent, normal retirement age of 63 years, and fully eligible age of 55 years.
	The last valuation was performed as at 31 December 2000.
	Environmental rehabilitation obligations
	Provision for decommissioning
	Balance at beginning of year	312	297
	Unwinding of decommissioning obligation (note 3)	-	15
	Balance at end of year	312	312
		2000	1999
		SA Rands
21	Provisions (continued)
	Provision for restoration
	Balance at beginning of year	392	337
	Charge to income statement	(54)	55
	Balance at end of year	338	392
	Total provisions	1,396	1,450
22	Deferred taxation
	Deferred taxation relating to temporary differences is made up as follows:
	Deferred taxation liabilities
	Mining assets	4,294	4,460
	Inventories	142	121
	Other	4	10
		4,440	4,591
	Deferred taxation assets
	Provisions	573	676
	Net deferred taxation	3,867	3,915
	The movement on the deferred tax balance is as follows:
	Balance at beginning of year	3,915	4,311
	Income statement charge (note 8)	148	27
	Taxation on impairment (note 8)	(196)	-
	Taxation rate change (note 8)	-	(423)
	Balance at end of year	3,867	3,915
23	Trade and other payables
	Trade creditors	437	324
	Accruals	326	691
	Other creditors	546	463
		1,309	1,478
24	Retirement benefits
	Defined benefit pension fund
	Fair value of fund assets	687	647
	Present value of fund obligation	669	587
	Funded benefit plan asset	18	60
	Market value of plan assets	687	647
	The assumptions used in calculating the above amounts as at 31 December are:	%	%
	Discount rate	12	12
	Rate of compensation increase	9	9
	Pension increase	8	8
	Rate of return on assets	12	12
24	Retirement benefits (continued)
	The company has made provision for pension and provident schemes covering substantially all employees. Eligible employees are members of either AngloGold's defined benefit fund or one of the industry-based defined contribution funds. At the last statutory valuation of the fund as at 31 December 1999 the Pension Fund was certified by the reporting actuaries as being in a sound financial position, subject to the continuation of the current contribution rates. In arriving at their conclusions, the actuaries took into account reasonable long-term estimates of inflation, increases in wages, salaries and pension as well as returns on investments. The interim valuation of the fund as at 31 December 2000 is reflected above. Any deficits in the defined benefit scheme advised by the actuaries are funded either immediately or through increased contributions to ensure the ongoing soundness of the scheme. Contributions to the various defined contribution retirement schemes are fully expensed during the year in which they are funded and the cost of providing retirement benefits for the year amounted to R303 million (1999: R353 million).
	All funds are governed by the Pension Funds Act of 1956.
		2000	1999
		SA Rands
25	Cash generated from operations
	Profit on ordinary activities before taxation	1,115	2,401
	Adjusted for:
	Amortisation of mining assets (note 10)	704	676
	Profit on sale of assets (note 3)	(7)	(14)
	Non-cash movements	(48)	57
	Interest receivable (note 4)	(138)	(321)
	Income from associates before taxation (note 4)	(27)	(43)
	Dividends received from other investments	-	(417)
	Unwinding of decommissioning obligation (note 3)	-	15
	Finance costs (note 5)	106	85
	Profit on sale of associate	-	(543)
	Impairment of mining assets (note 10)	470	-
	Movements in working capital	(141)	(44)
		2,034	1,852
	Movements in working capital:
	(Increase) decrease in inventories	(45)	83
	Decrease (increase) in trade and other receivables	116	(76)
	(Decrease) increase in trade and other payables	(64)	190
	Decrease in current portion of inter-group balances	(148)	(241)
		(141)	(44)
26	Related parties
	Related party transactions are concluded on an arm's length basis. Details of material transactions with those related parties not dealt with elsewhere in the financial statements are summarised below:

		2000		1999
		Purchases	Amounts owed	Purchases	Amounts owed
		from related	to related	from related	to related
		parties	parties	parties	parties
	With fellow subsidiaries, associates and joint ventures of the Anglo
	American plc group
	Boart Longyear Limited - mining services	52	9	64	1
	Haggie Limited - mining equipment	32	3	35	2
	Mondi Limited - timber	153	-	138	-
	Scaw Metals Limited - steel and engineering	55	-	50	-
	Shaft Sinkers (Pty) Ltd - mining services	93	-	112	-
	With associates
	Rand Refinery Limited - gold refinery	27	-	25	-

		2000	1999
		SA Rands
27	Commitments and contingencies
	Mining assets
	Contracted for	356	331
	Not contracted for	4,638	5,237
	Authorised by the directors	4,994	5,568
	Allocated for:
	Expansion of capacity
	- within one year	327	1,133
	- thereafter	3,998	4,355
		4,325	5,488
	Maintenance of capacity
	- within one year	29	10
	- thereafter	640	70
		669	80
	This expenditure will be financed from existing cash resources and future borrowings. The company has given collateral security to certain banks in respect of mortgage loans advanced to employees under its home ownership scheme amounting to R3 million (1999: R8 million). There is a potential claim against the South African region in respect of contamination of the water supply amounting to R9 million.

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