|
Diluted earnings per share 1.65 1.13 2.50
(1)Basic and diluted earnings per share are shown based on headline and
underlying earnings, which the directors believe to be useful additional
measures of the Group"s performance.
The calculation of the basic and diluted earnings per share is based on the
following data:
US$ million (unless otherwise stated) 6 months 6 months Year
ended ended ended
30.06.06 30.06.05 31.12.05
Earnings
Basic earnings, being profit for the 2,943 1,838 3,521
financial period attributable to equity
shareholders
Effect of dilutive potential ordinary
shares
Interest on convertible bonds 2 15 29
(net of tax)
Unwinding of discount on - - 20
convertible bonds (net of tax)
Diluted Earnings 2,945 1,853 3,570
Number of shares (million)
Basic number of ordinary shares 1,475 1,442 1,447
outstanding (1)
Effect of dilutive potential ordinary
shares (2)
Share options 19 19 18
Convertible bonds 25 48 48
Diluted number of ordinary shares 1,519 1,509 1,513
outstanding (1)
(1)Basic and diluted number of ordinary shares outstanding represent the
weighted average for the period. The average number of ordinary shares in
issue excludes own shares held.
(2)Diluted earnings per share is calculated by adjusting the weighted
average number of ordinary shares in issue on the assumption of conversion
of all potentially dilutive ordinary shares.
`Underlying earnings" is an alternative earnings measure, which the
directors
believe provides a clearer picture of the underlying financial performance
of the Group"s operations. Underlying earnings is presented after minority
interests and excludes
special items and remeasurements (see note 6). Underlying earnings is
distinct
from `headline earnings", which is a Johannesburg Stock Exchange (`JSE
Ltd")
defined performance measure.
9. Earnings per share (continued)The calculation of basic and diluted
earnings per share, based on headline and underlying earnings, uses the
following earnings data:
Basic earnings per share
Earnings (US$ million) (US$)
6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
30.06.06 30.06.05 31.12.05 30.06.06 30.06.05 31.12.05
Profit for 2,943 1,838 3,521 2.00 1.27 2.43
the
financial
period
attributable
to equity
shareholders
Special 462 55 186 0.31 0.04 0.13
items:
operating
Net (927) 1 (87) (0.63) - (0.06)
(profit)/los
s on
disposals
Special (108) (68) (74) (0.07) (0.04) (0.05)
items:
associates
(1)
Related tax (71) (28) 6 (0.05) (0.02) -
Related (2) (14) (36) - (0.01) (0.02)
minority
interest
Headline 2,297 1,784 3,516 1.56 1.24 2.43
earnings for
the
financial
period
Unrealised 442 28 315 0.30 0.02 0.22
net losses
on non-hedge
derivatives
Fair value 31 (32) 32 0.02 (0.02) 0.02
loss/(gain)
on AngloGold
Ashanti
convertible
bond
Exchange (44) (91) (72) (0.03) (0.06) (0.05)
gain/loss on
DBI
preference
shares
Share of De 20 - 113 0.01 - 0.08
Beers" legal
settlement
Related tax (63) 6 (21) (0.04) - (0.02)
Related (181) 4 (147) (0.12) - (0.10)
minority
interest
Underlying 2,502 1,699 3,736 1.70 1.18 2.58
earnings for
the
financial
period
(1) Excluding legal settlements.
The following instruments are potentially dilutive but have not been
included in the calculation of diluted earnings per share because they
are anti-dilutive for the periods presented:
6 months Year ended
6 months ended 31.12.05
ended 30.06.05
30.06.06
Number of shares (million)
Share options - 8 -
Potentially dilutive shares - 8 -
10. Called-up share capital
As at 30.06.05 As at 31.12.05
As at 30.06.06
Number of US$ Number of US$ Number of US$
shares million shares million shares million
Authorised
5%
cumulative
preference
shares of 50,000 - 50,000 - 50,000 -
GBP1 each
Ordinary 2,000,000 1,000 2,000,000 1,000 2,000,000 1,000
shares of ,000 ,000 ,000
50 US cents
each
Called-up,
allotted
and fully
paid
5%
cumulative
preference
shares of 50,000 - 50,000 - 50,000 -
GBP1 each
Ordinary 1,530,894 765 1,493,849 747 1,493,855 747
shares of ,824 ,673 ,896
50 US cents
each
In the event of winding up, the holders of the cumulative preference shares
will be entitled to the repayment of a sum equal to the nominal capital
paid up, or credited as paid up, on the cumulative preference shares held
by them and any accrued dividend, whether such dividend has been earned or
declared or not, calculated up to the date of the winding up.
11. Reconciliation of changes in equity
Attributable to equity shareholders of the
Company
Cumulat
Total Share- ive Fair
US$ million sharecap Retained basedpaym transla value and
ital earnings entreserv tion otherrese
(1) (2) e adjustm rves
ent
reserve
Balance at 1 2,380 17,440 55 2,247 998
January 2005
Total recognised - 1,798 - (2,147) (97)
income and
expense
Dividends paid - (734) - - -
Shares issued 1 - - - -
Share-based - - 44 - -
payments
Disposal of - - - - -
businesses
Issue of shares - - - - -
to minority
interests
Dividends paid to - - - - -
minority
interests
Exercise of - 82 - - -
employee share
options
Purchase of - - - - -
minority
interests
Balance at 30 2,381 18,586 99 100 901
June 2005
Total recognised - 1,566 - 239 (65)
income and
expense
Dividends paid - (403) - - -
Shares issued 3 - - - -
Share-based - - 56 - -
payments
Issue of shares - - - - -
to minority
interests
Dividends paid to - - - - -
minority
interests
Exercise of - 158 - - -
employee share
options
Purchase of - - - - -
minority
interests
Balance at 31 2,384 19,907 155 339 836
December 2005
Total recognised - 2,980 9 (946) (222)
income and
expense
Dividends paid - (1,406) - - -
Shares issued(3) 828 - - - -
Reclassification 27 - - - (27)
on conversion of
bond(3)
Share-based - - 47 - -
payments
Disposal of - - - - -
businesses
Issue of shares - - - - -
to minority
interests
Treasury share - (1,585) - - -
buy back
Purchase of - (13) - - -
treasury shares
for share schemes
Convertible bond - 87 - - (87)
reserve transfer
to retained
earnings
Reclassification - 20 (20) - -
of vested awards
Current tax on - 20 - - -
share-based
payments
Dividends paid to - - - - -
minority
interests
Exercise of - 192 (2) - -
employee share
options
Balance at 30 3,239 20,202 189 (607) 500
June 2006
Fair
US$ million value and Minorityin Totalequity
otherrese terests
rves
Balance at 1 998 4,466 27,586
January 2005
Total recognised (97) (123) (569)
income and expense
Dividends paid - - (734)
Shares issued - - 1
Share-based - 3 47
payments
Disposal of - (3) (3)
businesses
Issue of shares to - 3 3
minority interests
Dividends paid to - (165) (165)
minority interests
Exercise of - - 82
employee share
options
Purchase of - 1 1
minority interests
Balance at 30 June 901 4,182 26,249
2005
Total recognised (65) 205 1,945
income and expense
Dividends paid - - (403)
Shares issued - - 3
Share-based - 3 59
payments
Issue of shares to - 13 13
minority interests
Dividends paid to - (256) (256)
minority interests
Exercise of - - 158
employee share
options
Purchase of - (190) (190)
minority interests
Balance at 31 836 3,957 27,578
December 2005
Total recognised (222) (8) 1,813
income and expense
Dividends paid - - (1,406)
Shares issued(3) - - 828
Reclassification (27) - -
on conversion of
bond(3)
Share-based - - 47
payments
Disposal of - (1,186) (1,186)
businesses
Issue of shares to - 12 12
minority interests
Treasury share buy - - (1,585)
back
Purchase of - - (13)
treasury shares
for share schemes
Convertible bond (87) - -
reserve transfer
to retained
earnings
Reclassification - - -
of vested awards
Current tax on - - 20
share-based
payments
Dividends paid to - (193) (193)
minority interests
Exercise of - - 190
employee share
options
Balance at 30 June 500 2,582 26,105
2006
(1) Total share capital comprises called-up share capital $765 million (30
June 2005: $747 million; 31 December 2005: $747 million) and the share
premium account $2,474 million (30 June 2005: $1,634 million; 31 December
2005: $1,637 million).
(2) Retained earnings is stated after deducting $1,894 million of
`own shares". Own shares comprise shares of Anglo American plc held in the
employee benefit trust, treasury shares and those held by Epoch Investment
Holdings Limited (Epoch). Epoch is a South African registered entity owned
by a charitable trust whose trustees are independent of the Group.
Although the Group has no voting rights in Epoch and cannot appoint or
remove trustees, it does meet the accounting definition of a subsidiary in
accordance with IAS 27 Consolidated and Separate Financial Statements and
as a result is consolidated. Own shares held by the employee benefit trust
were $586 million as at 30 June 2005 and $456 million as at 31 December
2005.
(3) During the 6 months ended 30 June 2006, 77.5% of the Anglo
American plc convertible bond was converted to equity by bondholders. This
has resulted in a reduction in the discounted balance sheet liability of
$828 million and a corresponding increase in issued share capital and share
premium. A further reserve transfer of $27 million has been made from the
convertible bond reserve to share premium to reflect the total fair value
of shares issued to bondholders. During the 6 months ended 30 June 2006,
the number of shares converted was 37,038,523, at a conversion price of
$23.12 to 3 May 2006, and $22.76 subsequently.
Fair value and other reserves comprise:
Convertib Available Cash Total
US$ million le debt for sale flow Other fair
reserve reserve hedge reserves value and
reserve (1) other
reserves
Balance at 1 128 48 50 772 998
January 2005
Total recognised - (41) (56) - (97)
income and
expense
Balance at 30 128 7 (6) 772 901
June 2005
Total recognised 3 47 (115) - (65)
income and
expense
Balance at 1 131 54 (121) 772 836
January 2006
Total recognised 9 89 (320) - (222)
income and
expense
Convertible bond (27) - - - (27)
reserve transfer
to share premium
Convertible bond (87) - - - (87)
reserve transfer
to retained
earnings
Balance at 30 26 143 (441) 772 500
June 2006
(1) Other reserves comprise $690 million (30 June 2005: $690 million; 31
December 2005: $690 million) legal reserve and $82 million (30 June 2005:
$82 million; 31 December 2005: $82 million) capital redemption reserve.
12. Consolidated cash flow analysis
a) Reconciliation of profit before tax to cash inflows from operations
US$ million 6 months Year
6 months ended ended
ended 30.06.05 31.12.05
30.06.06
Profit before tax 4,373 2,657 5,208
Depreciation and amortisation 1,163 1,199 2,441
Share option expense 47 40 92
Special items and remeasurements (86) (48) 365
of subsidiaries and joint ventures
Net finance costs before 88 224 428
remeasurements
Fair value gains before special (120) (61) (278)
items and remeasurements
Net income from associates (369) (407) (657)
Additional pension contribution (232) - -
Provisions 31 60 113
Increase in inventories (295) (113) (453)
Increase in operating receivables (698) (471) (600)
Increase in operating payables 197 13 539
Other adjustments (39) (19) 67
Cash inflows from operations 4,060 3,074 7,265
b)Reconciliation to the balance sheet
Cash and cash equivalents
US$ million As at As at As at
30.06.06 30.06.05 31.12.05
Balance sheet
Continuing operations 2,638 2,788 3,430
Disposal groups(2) 226 38 -
Bank overdrafts
Continuing operations (175) (143) (111)
Disposal groups(2) - (7) -
Net debt classification 2,689 2,676 3,319
Short term borrowings(1) Medium and long term
borrowings
US$ million As at As at As at As at As at As at
30.06.06 30.06.05 31.12.05 30.06.05 31.12.0
30.06.06 5
Balance
sheet
Continuing (1,710) (2,623) (2,076) (3,310) (7,250) (6,363)
operations
Disposal (272) - - (240) (5) -
groups(2)
Bank
overdrafts
Continuing 175 143 111 - - -
operations
Disposal - - - - - -
groups(2)
Net debt (1,807) (2,480) (1,965) (3,550) (7,255) (6,363)
classificati
on
(1) Short term borrowings on the balance sheet include overdrafts which
are included within cash and cash equivalents for net debt.
(2) Disposal group balances are shown as `assets classified as held for
sale" and `liabilities associated with assets classified as held for sale"
on the balance sheet.
12. Consolidated cash flow analysis (continued)
c)Movement in net debt
Debt due within Debt due
one year after(3)one year
US$ million Cash and Carrying Carrying
cash value Hedge value
equivalents (2) Hedge
(1) (2)
Balance at 1 2,781 (3,272) 55 (7,961) 302
January 2005
Cash flow 52 510 - 33 -
Acquisition/dispo - - - 1 -
sal of businesses
Unwinding of - - - (23) -
discount on
convertible bonds
Reclassifications - (59) - 59 -
Movement in fair - - (13) (25) (201)
value
Currency (157) 341 - 661 -
movements
Balance at 30 2,676 (2,480) 42 (7,255) 101
June 2005
Cash flow 550 846 25 599 -
Acquisition/dispo - 2 - 4 -
sal of businesses
Unwinding of - - - (30) -
discount on
convertible bonds
Reclassifications - (241) - 240 -
Movement in fair - - (54) 37 (101)
value
Other non-cash - - - - -
movements
Currency 93 (92) - 42 -
movements
Balance at 31 3,319 (1,965) 13 (6,363) -
December 2005
Cash flow (417) 251 - 84 -
Acquisition/dispo - 116 - 1,758 -
sal of businesses
Conversion to - - - 828 -
equity(3)
Unwinding of - - - (17) -
discount on
convertible bonds
Reclassifications (270) - 270 -
Movement in fair - - 129 33 (30)
value
Other non-cash - - - - -
movements
Currency (213) 61 - (143) -
movements
Closing balance 2,689 (1,807) 142 (3,550) (30)
at 30 June 2006
US$ million Current
financial Totalnet
asset debt
investments (4)
Balance at 1 January 2005 2 (8,093)
Cash flow 5 600
Acquisition/disposal of businesses - 1
Unwinding of discount on convertible - (23)
bonds
Reclassifications - -
Movement in fair value - (239)
Currency movements (2) 843
Balance at 30 June 2005 5 (6,911)
Cash flow (18) 2,002
Acquisition/disposal of businesses - 6
Unwinding of discount on convertible - (30)
bonds
Reclassifications 1 -
Movement in fair value - (118)
Other non-cash movements 29 29
Currency movements (1) 42
Balance at 31 December 2005 16 (4,980)
Cash flow - (82)
Acquisition/disposal of businesses (9) 1,865
Conversion to equity(3) - 828
Unwinding of discount on convertible - (17)
bonds
Reclassifications - -
Movement in fair value - 132
Other non-cash movements (6) (6)
Currency movements 1 (294)
Closing balance at 30 June 2006 2 (2,554)
(1) The Group operates in certain countries (principally South Africa and
Venezuela) where the existence of exchange controls may restrict the use of
certain cash balances. These restrictions are not expected to have any
material effect on the Group"s ability to meet its ongoing obligations.
(2) Derivative instruments that have been designated as hedges of assets
and liabilities included in net debt are included above to reflect the true
net debt position of the Group at the period end. These instruments are
classified within other financial assets and liabilities on the balance
sheet.
(3) Debt due after more than one year includes $nil of convertible bond
(30 June 2005: $1,954 million; 31 December 2005: $1,975 million). During
the 6 months ended 30 June 2006 77.5%, ($828 million), of the convertible
bond held by Anglo American plc was converted to equity. The remaining
$239 million is due to mature in April 2007 and has therefore been
reclassified to debt due within 1 year. $924 million of AngloGold Ashanti
convertible bond was disposed on the sale of Anglo American plc"s
controlling interest.
(4) Net debt excluding the impact of hedges is $2,666 million (30 June
2005: $7,054 million; 31 December 2005: $4,993 million) and consists of
cash and cash equivalents $2,689 million (30 June 2005: $2,676 million; 31
December 2005: $3,319 million), short term borrowings $1,807 million (30
June 2005: $2,480 million; 31 December 2005: $1,965 million), medium and
long term borrowings $3,550 million (30 June 2005: $7,255 million; 31
December 2005: $6,363 million) and current financial asset investments $2
million (30 June 2005: $5million; 31 December 2005: $16 million).
13. EBITDA by business segment
EBITDA is operating profit before special items and remeasurements plus
depreciation and amortisation in subsidiaries and joint ventures and share
of EBITDA of associates:
US$ million 6 months Year ended
6 months ended 31.12.05
ended 30.06.05
30.06.06
Operating profit including 4,563 2,993 6,376
associates" operating profit
before special items and
remeasurements
Depreciation and amortisation
Subsidiaries and joint 1,163 1,199 2,441
ventures
Associates 130 75 142
5,856 4,267 8,959
US$ million 6 Year
6 months mont ended
ended hs 31.12
30.06.06 ende .05
d
30.0
6.05
By business segment
Platinum 1,171 610 1,282
Gold 540 433 871
Diamonds 341 337 655
Coal 464 476 1,243
Base Metals 2,022 875 1,990
Industrial Minerals 275 317 618
Ferrous Metals and 783 961 1,779
Industries
Paper and Packaging 435 449 916
Exploration (66) (67) (150)
Corporate Activities (109) (124 (245)
)
EBITDA 5,856 4,26 8,959
7
EBITDA is stated before special items and
remeasurements and is reconciled to `Total profit
from operations and associates" as follows:
US$ million 6 months Year
6 months ended ended
ended 30.06.05 31.12.05
30.06.06
Total profit from 4,448 2,759 5,601
operations and
associates
Special items and 924 82 633
remeasurements
(including associates)
Net profit on disposals (1,035) (67) (185)
(including associates)
Depreciation and 1,163 1,199 2,441
amortisation:
subsidiaries and joint
ventures
Share of associates" 356 294 469
interest, tax,
depreciation,
amortisation and
underlying minority
interest
EBITDA 5,856 4,267 8,959
EBITDA is reconciled to cash inflows from operations as follows:
US$ million 6 months Year
6 months ended ended
ended 30.06.05 31.12.05
30.06.06
EBITDA 5,856 4,267 8,959
Share of operating profit of (557) (567) (1,032)
associates, before special items and
remeasurements
Underlying depreciation and (130) (75) (142)
amortisation in associates
Share option expense 47 40 92
Fair value gains before (120) (61) (278)
remeasurements
Additional pension contributions (232) - -
Provisions 31 60 113
Increase in inventories (295) (113) (453)
Increase in operating receivables (698) (471) (600)
Increase in operating payables 197 13 539
Other adjustments (39) (19) 67
Cash inflows from operations 4,060 3,074 7,265
14. Acquisition of subsidiaries
The Group made one material acquisition in the 6 months ended 30 June 2006.
The Group acquired a 100% interest in AltaSteel for a total cash
consideration of $85 million (including transaction costs). Net assets
acquired in the transaction were $88 million. $3 million negative goodwill
arising on acquisition has been written back to the income statement as a
special operating item.
The fair values of the acquired assets and liabilities relating to
AltaSteel in the table below are provisional, and will be finalised in the
2006 annual report when the final values arising from the fair value
exercises are confirmed.
US$ million AltaStee Other Total
l
Net assets acquired
Tangible fixed assets 74 140 214
Investment in associate - (1) (1)
Deferred tax asset - 1 1
Other financial assets (derivatives) 35 - 35
Inventories 30 19 49
Trade and other receivables 27 37 64
Cash and cash equivalents 8 1 9
Short term borrowings - (31) (31)
Trade and other payables (21) (15) (36)
Provisions for liabilities and (43) (2) (45)
charges
Medium and long term borrowings (14) - (14)
Deferred tax liability (8) (17) (25)
Minority interest - (4) (4)
Net assets acquired 88 128 216
Goodwill arising on acquisition - 14 14
Negative goodwill arising on (3) - (3)
acquisition
Total cost of acquisition 85 142 227
Satisfied by
Net cash acquired 8 1 9
Deferred consideration - 3 3
Net cash paid 77 138 215
15. Partial and deemed disposals of AngloGold Ashanti shares
On 20 April 2006 the Group completed the sale of 19.7 million ordinary
shares held in AngloGold Ashanti Limited for cash of $978 million. This,
together with the Group"s non-participation in the issue of additional
ordinary shares by AngloGold Ashanti, diluted the Group"s percentage
investment from 50.9% to 41.8%. With effect from that date, the Group
ceased to account for AngloGold Ashanti as a subsidiary and began
accounting for it as an associate under the equity method.
The net asset position at the date of disposal, together with the
reclassification to an associate and resulting gain on disposal of shares
and related net cash inflow are shown below:
US$ million 30.06.06
Tangible assets 6,613
Other non-current assets 856
Current assets 2,162
Current liabilities (2,596)
Non-current liabilities (4,233)
Net assets 2,802
Minority interest (1,101)
Group"s share of AngloGold Ashanti 1,701
net assets immediately prior to
disposal
Less: Retained investment in an (1,451)
associated undertaking immediately
after disposal
Net assets disposed of 250
Cumulative translation differences (9)
recycled from reserves
Net gain on disposal 737
Net sale proceeds 978
Less: Net cash and cash (147)
equivalents disposed
Add: Costs accrued not yet paid 3
Add: Realised foreign exchange 5
gain
Net cash inflow from partial 839
disposal of AngloGold Ashanti
The non-participation in the issue of additional shares by AngloGold
Ashanti further diluted the percentage investment and thereby resulted in a
deemed disposal. The gain on deemed disposal is:
30.06.06
US$ million
Movement in share of net assets as a result of 174
share issue
Deemed disposal of goodwill and mining (17)
properties
Cumulative translation differences recycled 2
from reserves
Deemed gain on disposal 159
16. Disposals of subsidiaries
Other than the partial disposal of AngloGold Ashanti in note 15, no
significant disposals were made during the 6 months to 30 June 2006.
The following assets and liabilities relating to disposal groups have been
reclassified as held for sale at 30 June 2006. The Group expects to
complete the sale of these businesses within 12 months of the period end.
US$ million Highveld Other(1) Total
Kumba (1)
(non iron-
ore)
(1)
Intangible fixed assets 11 - - 11
Tangible fixed assets 1,222 232 36 1,490
Biological assets 4 - - 4
Environmental 23 - - 23
rehabilitation trusts
Investments in associates 20 - - 20
Financial asset 23 15 1 39
investments
Deferred tax assets 57 - - 57
Total non-current assets 1,360 247 37 1,644
Inventories 161 119 17 297
Trade and other 177 127 19 323
receivables
Other current financial 6 2 - 8
assets
Cash and cash equivalents 141 80 5 226
Total current assets 485 328 41 854
Total assets(2) 1,845 575 78 2,498
Short term borrowings (163) (109) - (272)
Trade and other payables (148) (171) (19) (338)
Other current financial (2) (5) - (7)
liabilities
Short term provisions (2) (3) - (5)
Total current liabilities (315) (288) (19) (622)
Medium and long term (233) (5) (2) (240)
borrowings
Provisions (87) (14) (3) (104)
Deferred tax liabilities (182) (23) - (205)
Retirement benefit - (13) - (13)
obligations
Total non-current (502) (55) (5) (562)
liabilities
Total liabilities(2) (817) (343) (24) (1,184)
Net assets 1,028 232 54 1,314
(1) Kumba (non iron-ore) and Highveld disposal groups are included in
the Ferrous Metals and Industries business segment. The `other" disposal
group is included in the Industrial Minerals business segment.
(2) The carrying amount of assets ($757 million) and associated
liabilities ($283 million), reclassified as held for sales at 30 June 2005
(31 December 2005: $nil) were held principally within the Ferrous Metals
and Industries business segment.
17. Capital expenditure on fixed assets and biological assets
US$ million 6 months 6 months Year ended
ended ended 31.12.05
30.06.06 30.06.05
Platinum 276 243 616
Gold 196 311 722
Coal 290 126 331
Base Metals 104 100 271
Industrial Minerals 115 120 274
Ferrous Metals and Industries 222 133 373
Paper and Packaging 254 392 691
Other 9 8 28
Purchase of tangible fixed 1,466 1,433 3,306
assets
Investment in biological 33 26 55
assets
1,499 1,459 3,361
Capital expenditure shown above comprises cash expenditure on fixed assets
and biological assets. Segmental capital expenditure shown in note 3 also
includes accruals and expenditure on acquisitions and intangible assets and
capitalised interest, but excludes expenditure on biological assets.
18. Contingent liabilities and contingent assets
There have been no significant changes in contingent liabilities from those
reported at 31 December 2005, other than reductions arising from the
classification of AngloGold Ashanti as an associate.
The Group is subject to various claims which arise in the ordinary course
of business. Having taken appropriate legal advice, the Group believe that
the likelihood of a material liability arising is remote.
At 30 June 2006, contingent liabilities comprise aggregate amounts of $86
million (30 June 2005: $272 million; 31 December 2005: $163 million) in
respect of loans and performance guarantees given to banks and other third
parties.
There were no significant contingent assets in the Group at 30 June 2006,
30 June 2005 or 31 December 2005.
19. Related party transactions
The Group has related party relationships with its subsidiaries, associates
and joint ventures.
At 30 June 2006, Anglo American holds $175 million (30 June 2005: $350
million; 31 December 2005: $350 million) of 10% non-cumulative redeemable
preference shares in DB Investments, the holding company of De Beers
Societe Anonyme.
On 20 April 2006 the Group completed the sale of 19.7 million ordinary
shares held in AngloGold Ashanti Limited. This, together with the Group"s
non-participation in the issue of additional ordinary shares by AngloGold
Ashanti, diluted the Group"s percentage investment from 50.9% to 41.8%.
Thus, effective from that date, the Group ceased to account for AngloGold
Ashanti as a subsidiary and began accounting for it as an associate under
the equity method.
The Company and its subsidiaries, in the ordinary course of business, enter
into various sales, purchase and service transactions with joint ventures
and associates and others in which the Group has a material interest. These
transactions are under terms that are no less favourable than those
arranged with third parties. These transactions are not considered to be
significant.
Dividends received from associates during the period totalled $100 million
(30 June 2005: $300 million; 31 December 2005: $461 million), as disclosed
in the consolidated cash flow statement.
The directors of the Company and their immediate relatives control 4% (30
June 2005: 4%; 31 December 2005: 3%) of the voting shares of the Company.
20. Events occurring after the period end
On 14 July 2006, the Group announced the sale of Anglo American"s 79% stake
in Highveld Steel and Vanadium Corporation Limited to Evraz Group SA and
Credit Suisse for a total consideration of $678 million. Following the
disposal of the initial 49.8%, for which Anglo American received $412
million, Evraz has an option to acquire Anglo American"s remaining 29.2%
stake in Highveld Steel and Vanadium Corporation Limited for $226 million.
This amount will be reduced by any dividends paid by Highveld Steel and
Vanadium Corporation Limited prior to Anglo American selling its remaining
shares. The deal represents a substantial foreign direct investment in
South Africa.
Since the period ended 30 June 2006, the remaining 22.5% of the Anglo
American plc convertible bond was converted to equity by bondholders. This
was completed on 25 July 2006. The number of shares converted subsequent
to the period end was 10,754,465 at a conversion price of $22.76.
INDEPENDENT REVIEW REPORT TO ANGLO AMERICAN PLC
Introduction
We have been instructed by the Company to review the financial information
for the six months ended 30 June 2006 which comprises the consolidated
income statement, the consolidated balance sheet, the consolidated cash
flow statement, the consolidated statement of recognised income and expense
and related notes 1 to 20. We have read the other information contained in
the interim report and considered whether it contains any apparent
misstatements or material inconsistencies with the financial information.
This report is made solely to the Company in accordance with Bulletin
1999/4 issued by the Auditing Practices Board. Our work has been
undertaken so that we might state to the Company those matters we are
required to state to them in an independent review report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company, for our review work, for
this report, or for the conclusions we have formed.
Directors" responsibilities
The interim report, including the financial information contained therein,
is the responsibility of, and has been approved by, the directors. The
directors are responsible for preparing the interim report in accordance
with the Listing Rules of the Financial Services Authority and the
requirements of IAS 34 Interim Financial Reporting, which require that the
accounting policies and presentation applied to the interim figures are
consistent with those applied in preparing the preceding annual accounts
except where any changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with the guidance contained in
Bulletin 1999/4 issued by the Auditing Practices Board for use in the
United Kingdom. A review consists principally of making enquiries of Group
management and applying analytical procedures to the financial information
and underlying financial data and, based thereon, assessing whether the
accounting policies and presentation have been consistently applied unless
otherwise disclosed. A review excludes audit procedures such as tests of
controls and verification of assets, liabilities and transactions. It is
substantially less in scope than an audit performed in accordance with
International Standards on Auditing (UK and Ireland) and therefore provides
a lower level of assurance than an audit. Accordingly, we do not express
an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications
that should be made to the financial information as presented for the six
months ended 30 June 2006.
Deloitte & Touche LLP
Chartered Accountants
London
3 August 2006
Production statistics
The figures below include the entire output of consolidated entities and
the Group"s share of joint ventures
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