IAS financial statements - Notes to the group financial statements (Page 1)

Notes to the group financial statements
for the year 1998
Figures in million unless otherwise stated


1997	1998			1998	1997

SA Rand				US Dollars

		1.	Revenue
11 602,0	11 654,9		Gold ? normal	2 116.4	2 527.8
309,7	348,0		Gold ? accelerated hedge	68.2	65.7
262,9	279,7		Uranium oxide and sulphuric acid	51.0	55.8

12 174,6	12 282,6			2 235.6	2 649.3


		2.	Cost of sales
			Gold
9 388,4	8 224,4		Cash costs	1 499.1	2 045.1
309,7	348,0		Retrenchments	68.2	65.7
267,6	140,0		Rehabilitation and other non-cash costs	23.1	56.4

9 965,7	8 712,4		Production costs	1 590.4	2 167.2
923,9	744,8		Amortisation of mining assets	135.5	200.5
497,4	230,6		Inventory change	42.5	108.8

11 387,0	9 687,8			1 768.4	2 476.5

			Uranium oxide and sulphuric acid
109,0	139,0		Production and selling costs	25.5	23.8
69,7	41,7		Inventory change	7.6	14.1

178,7	180,7			33.1	37.9

11 565,7	9 868,5		Total cost of sales	1 801.5	2 514.4


		3.	Income from associates
774,5	856,3		Gold revenue	154.8	167.8
519,0	652,4		Cost of sales	119.1	112.4
255,5	203,9		Profit from operations	35.7	55.4
33,0	(159,8)		Other operating (income) expenses	(32.7)	7.2
222,5	363,7		Profit on ordinary activities before taxation	68.4	48.2

1997	1998			1998	1997

SA Rand				US Dollars

		4.	Profit on ordinary activities before taxation
			Includes:
40,8	13,4		Dividends received ? unlisted investments	2.4	8.7
923,9	744,8		Amortisation of mining assets	135.5	200.5
2,9	4,8		Auditors' remuneration	0.9	0.7
2,1	3,7		Audit fees	0.7	0.5
0,8	1,1		Other services	0.2	0.2
19,3	15,7		Grants for educational and community development	2.9	4.2
33,8	94,4		Interest paid	17.1	7.2
8,1	68,3		Borrowings	12.3	1.6
25,7	26,1		Other loans	4.8	5.6
5 261,4	4 652,9		Total employees costs	847.5	1 146.3
4 583,0	3 982,5		Salaries and wages	720.6	1 000.2
333,5	287,1		Contribution to retirement benefits	52.3	72.7
35,2	35,3		Contributions to post-retirement medical benefits	6.4	7.7
309,7	348,0		Retrenchment payments	68.2	65.7
			The average monthly number of employees including
			contractors during the year was made up as follows:	93 316	134 273
			Surface	18 462	27 099
			Underground	74 854	107 174
			Exceptional items:
56,2	(107,3)		(Loss)/profit on sale of mining assets	(9.1)	12.1
?	160,5		Surplus on disposal of investment by associate	32.4	?
(13,0)	123,5		Taxation effect of exceptional items	17.3	(2.8)

43,2	176,7			40.6	9.3


		5.	Mining and normal taxation
			The taxation charge comprises:
115,2	319,0		Mining taxation	58.4	24.4
295,3	550,6		Non-mining taxation	97.8	64.9
(514,2)	(197,0)		Deferred taxation	(33.1)	(111.3)
38,0	20,9		Share of associates taxation	3.7	8.2

(65,7)	693,5			126.8	(13.8)

			Mining tax on mining income is determined according to a formula which varies the taxation rate in accordance with the ratio of profit to revenue from mining operations. This formula also allows an initial tranche of mining income to be earned free of taxation. Non-mining income, the taxable element of which consists primarily of interest received, is taxed at the non-mining taxation rate.
			Deferred taxation is provided at the current mining cost formula rate of 51% for mining temporary differences. Non-mining income does not give rise to temporary differences. Because the mining taxation formula imposes variable taxation rates, no reconciliation of the company's income taxation charge has been prepared.
			The company has, in terms of taxation legislation, opted for a tax regime which does not require it to deduct Secondary Tax on Companies (STC) on dividends declared. Notwithstanding this, if any of the company's shareholders are themselves subject to STC, this legislation entitles them to deduct their dividend accruals from this company in the determination of their own STC liabilities.

		6.	Earnings per share
			Basic
			The calculation of basic earnings per share is based on earnings of $317.5; R1 710,5 (1997: $179.2; R814,9) and 97 842 263 (1997: 97 839 399) being the weighted average number of shares in issue of during the financial year
			Diluted
			There are no material differences between basic earnings per share and diluted earnings per share.
			Headline
			Headline earnings removes items of a capital nature from the calculation of earnings per share. The basic earnings have been adjusted by the ollowing to arrive at headline earnings:
814,9	1 710,5		Basic earnings	317.5	179.2
43,2	176,7		Less: Exceptional items as per note 4	40.6	9.3

771,7	1 533,8		Headline earnings	276.9	169.9


		7.	Dividends
			Ordinary shares
511,8	732,5		No. 84 of 127 US cents (750 SA cents) per share declared on 17 July 1998 and paid on 18 September 1998	123.5	113.0
599,5	782,8		No. 85 of 136 US cents (800 SA cents) per share declared on 2 February 1999 and payable on 26 March 1999	133.1	123.1

1 111,3	1 515,3			256.6	236.1