Group – Notes to the 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 or early adopted by AngloGold Ashanti Limited:

Standard or Interpretation	Title	Effective for annual periods beginning on or after
IFRS 2	Amendment – Group cash-settled and share-based payment transactions	1 January 2010
IFRS 3	Business Combinations (revised)	1 July 2009
IFRS's	Annual Improvement Project – May 2009	Mostly 1 January 2010
IAS 27	Amendment – Consolidated and Separate Financial Statements	1 July 2009
IAS 32	Amendment – Classification of Rights Issues	1 February 2010
IAS 39	Amendment – Eligible Hedged Items	1 July 2009
IFRIC 17	Distributions of Non-cash Assets to Owners	1 July 2009
IFRIC 18	Transfers of Assets from Customers	1 July 2009
IFRIC 19	Extinguishing Financial Liabilities with Equity Instruments	1 July 2010

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

The following accounting standards, amendments to standards and new interpretations (as at 10 March 2011, the last practicable date), which are not yet mandatory for AngloGold Ashanti Limited, have not been adopted in the current year:

Standard or Interpretation	Title	Effective for annual periods beginning on or after
IFRS 7	Amendment – Derecognition disclosures	1 July 2011
IFRS 9	Financial Instruments	1 January 2013
IFRS 9	Amendment – Accounting for financial liabilities	1 January 2013
IFRS's	Annual Improvement Project – May 2010	Mostly 1 January 2011
IAS 24	Related Party Disclosures	1 January 2011
IFRIC 14	Prepayments of a minimum funding requirement – amendment	1 January 2011
IAS 12	Amendment – Deferred tax: Recovery of Underlying assets	1 January 2012

The group has assessed the significance of these new standards, amendments to standards and new interpretations, and concluded that they will have no material financial impact.

1.1 Basis of preparation

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

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

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

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

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

The acquisition of non-controlling interests is reflected as an equity transaction. The entire difference between the cost of the additional interest and the non-controlling interests' 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, including any resulting tax effect are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

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

1.2 Significant accounting judgements and estimates

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

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

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

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

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

Carrying value of goodwill and tangible assets

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

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

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

These factors could include:

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

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

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

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

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

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

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

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

The carrying amount of goodwill in the consolidated financial statements at 31 December 2010 was $177m, R1,164m (2009: $159m, R1,178m). The carrying amount of tangible assets at 31 December 2010 was $6,180m, R40,600m (2009: $5,819m, R43,263m).

Production start date

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

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

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

Income taxes

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

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

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

Carrying values of the group at 31 December 2010:

• deferred tax asset: $20m, R131m (2009: $61m, R451m);
• deferred tax liability: $900m, R5,910m (2009: $753m, R5,599m); and
• taxation liability: $107m, R706m (2009: $142m, R1,059m).

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.

The carrying amount of the rehabilitation obligations for the group at 31 December 2010 was $551m, R3,623m (2009: $418m, R3,109m).

Stockpiles, metals in process and ore on leach pad

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

Stockpiles and underground metals 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.

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

The carrying amount of inventories (excluding finished goods and mine operating supplies) for the group at 31 December 2010 was $860m, R5,651m (2009: $661m, R4,919m).

Recoverable tax, rebates, levies and duties

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

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

The carrying value of recoverable tax, rebates, levies and duties for the group at 31 December 2010 was $188m, R1,235m (2009: $138m, R1,025m).

Pension plans and post-retirement medical aid obligations

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

The carrying value of the defined benefit plans (including the net asset position disclosed under non-current assets) at 31 December 2010 was $188m, R1,238m, (2009: $152m, R1,125m).

Ore Reserve estimates

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

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

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

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

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

Exploration and evaluation expenditure

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

The carrying value of capitalised exploration assets at 31 December 2010 was $3m, R17m (2009: $1m, R10m).

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 $59m, R434m (2009: $41m, R337m).

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.

In determining the threshold for disclosure, management considers the potential for a disruptive effect on the normal functioning of the group and/or whether the contingency could impact investment decisions. Such qualitative matters considered are reputational risks, regulatory compliance issues and reasonable investor considerations. For quantitative purposes an amount of $5m, R33m has been considered.

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.

1.3 Summary of significant accounting policies

Equity accounted investments

Joint ventures

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

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

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

Associates

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

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

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

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

Joint ventures and associates

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

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

Foreign currency translation

Functional currency

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

Transactions and balances

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

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

Group companies

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

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

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

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

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

Segment reporting

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

Tangible assets

Tangible assets are recorded at cost less accumulated amortisation and impairments/reversals. Cost includes 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 allocate the cost of each asset to its residual value over its estimated useful life as follows:

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

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

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the beginning of each financial year.

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

Mine development costs

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

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

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

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

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

Mine infrastructure

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

Land and assets under construction

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

Mineral rights and dumps

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

Exploration and evaluation assets

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

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

Costs relating to property acquisitions are capitalised within development costs.

Intangible assets

Acquisition and goodwill arising thereon

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

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

Royalty rate concession

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

Impairment of assets

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

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

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

Leased assets

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

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

Non-current assets held for sale

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

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

Exploration and research expenditure

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

Inventories

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

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

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

Provisions

Provisions are recognised when the group has a present obligation, whether legal or constructive, because of a past event for which it is probable that an outflow of resources embodying economic benefits will be 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 reporting date. The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability.

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

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

Borrowed commodities

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

Employee benefits

Pension obligations

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

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

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

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

Other post-employment benefit obligations

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

Termination benefits

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

Profit-sharing and bonus plans

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

Share-based payments

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

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

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

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

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

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

Environmental expenditure

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

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

Decommissioning costs

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

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

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

Restoration costs

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

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

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

Taxation

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

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

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

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

Current and deferred tax is recognised as income or expense and included in profit or loss for the period, except to the extent that the tax arises from a transaction or event which is recognised, in the same or a different period in other comprehensive income or 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 reporting date.

Special items

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

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

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

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

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

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

Derivatives and hedge accounting

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

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

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

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

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

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

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

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

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

Unearned premiums

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

Other investments

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

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

Other non-current assets

• Loans and receivables are subsequently measured at amortised cost using the effective interest rate method. If there is evidence that loans and receivables are impaired, the carrying amount of the assets 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. Impairments relate to specific accounts whereby the carrying amount is directly reduced. 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 amortised 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 and liabilities classified as at fair value through profit or loss, are subsequently measured at amortised cost, using the effective interest rate method.

Financial liabilities designated on initial recognition as being at fair value through profit or loss are recognised at fair value, with transaction costs being recognised in profit or loss, and are subsequently measured at fair value. Gains and losses on financial liabilities that are designated as at fair value through profit or loss are recognised in profit or loss as they arise. Fair value of a financial liability that is quoted in an active market is the current offer price times the number of units of the instrument held or issued.

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".

Convertible bonds

Convertible bonds (except equity components) are accounted for entirely as liabilities. Option components are treated as derivative liabilities and carried at fair value, with changes in fair value recorded in the income statement as a separate instrument where the host bond is carried at amortised cost and included within the carrying value where the host contract is carried at fair value. The bond component is carried at amortised cost using the effective interest rate. Where the fair value option is elected, the bonds are carried at fair value with changes in fair value recorded in the income statement.

Treasury shares

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

Accounting for BEE transactions

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

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

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

2 Segmental information

AngloGold Ashanti Limited’s operating segments are being reported based on the financial information provided to the chief executive officer and the executive management team, collectively identified as the chief operating decision maker (CODM). As a result of changes in management structure and reporting from 1 January 2010, the CODM has changed its reportable segments. Individual members of the executive management team are responsible for geographic regions of the business. Comparative information has been presented on a consistent basis. Navachab which was previously included in Southern Africa now forms part of Continental Africa and North and South America has been combined into Americas. Southern Africa has been renamed to South Africa. The Johannesburg corporate office was previously included in Southern Africa and now forms part of “Other”. Where applicable, the corresponding items of segment information for prior periods presented have been restated to reflect this.

Group analysis by origin is as follows:

Figures in million	Net operating assets		Total assets		Capital expenditure
US Dollars	2010	2009	2010	2009	2010	2009
South Africa (1)	2,122	1,839	2,469	2,295	424	385
Continental Africa (2) (3)	3,345	3,234	3,966	3,954	234	198
Australasia (4)	281	342	555	604	40	177
Americas (4)	1,653	1,474	2,109	1,970	311	258
Other, including non-gold producing subsidiaries (1)	63	60	515	1,041	6	9
	7,464	6,949	9,614	9,864	1,015	1,027
Equity accounted investments included above	(581)	(567)	(82)	(77)	(42)	(8)
	6,883	6,382	9,532	9,787	973	1,019
SA Rands
South Africa (1)	13,942	13,670	16,226	17,061	3,096	3,228
Continental Africa (2) (3)	21,978	24,045	26,060	29,401	1,708	1,654
Australasia (4)	1,848	2,542	3,644	4,494	290	1,599
Americas (4)	10,860	10,958	13,855	14,642	2,270	2,157
Other, including non-gold producing subsidiaries (1)	411	449	3,384	7,739	49	88
	49,039	51,664	63,169	73,337	7,413	8,726
Equity accounted investments included above	(3,818)	(4,214)	(540)	(567)	(305)	(70)
	45,221	47,450	62,629	72,770	7,108	8,656

Material non-current assets by foreign countries have not been disclosed as it is impracticable.

(1)	Assets held for sale in respect of Tau Lekoa nil (2009: $71m, R529m) are included in the South Africa segment. Assets held for sale in respect of ISS International Limited of $15m, R100m (2009: nil), properties held for sale by Rand Refinery of $1m, R10m (2009: $1m, R10m) and exploration interests held for sale in Amikan Holding Limited of nil (2009: $15m, R111m) are included in the “Other” segment (note 24).
(2)	Includes equity accounted joint ventures.
(3)	Includes the acquisition during 2009 of an effective 45% interest in the Kibali gold project in the Democratic Republic of the Congo (equity accounted investment).
(4)	Includes allocated goodwill of $154m, R1,018m (2009: $136m, R1,013m) for Australasia and $23m, R146m (2009: $23m, R165m) for Americas (note 16).

	Gold production
	(000oz)		(kg)
	2010	2009	2010	2009
South Africa	1,785	1,797	55,528	55,908
Continental Africa	1,492	1,585	46,390	49,292
Australasia	396	401	12,313	12,477
Americas	842	816	26,187	25,372
	4,515	4,599	140,418	143,049
Figures in million	Gold income
	2010	2009	2010	2009
	US Dollars		SA Rands
Geographical analysis of gold income by origin is as follows:
South Africa	2,207	1,665	16,056	13,625
Continental Africa	1,868	1,435	13,604	11,723
Australasia	466	221	3,391	1,819
Americas	1,124	805	8,202	6,552
	5,665	4,126	41,253	33,719
Equity accounted investments included above	(331)	(358)	(2,420)	(2,974)
(note 3)	5,334	3,768	38,833	30,745
Foreign countries included in the above and considered material are:
Ghana	566	503	4,119	4,110
Brazil	599	437	4,361	3,560
Geographical analysis of gold income by destination is as follows:
South Africa	2,820	1,815	20,534	14,832
North America	609	719	4,438	5,878
Australia	273	84	1,988	690
Asia	647	373	4,708	3,047
Europe	511	447	3,721	3,652
United Kingdom	805	688	5,864	5,620
	5,665	4,126	41,253	33,719
Equity accounted investments included above	(331)	(358)	(2,420)	(2,974)
(note 3)	5,334	3,768	38,833	30,745
Figures in million	Gross profit (loss)
	2010	2009	2010	2009
	US Dollars		SA Rands
South Africa	429	(255)	3,180	(1,778)
Continental Africa	604	(116)	4,219	(976)
Australasia	(206)	(168)	(1,452)	(1,325)
Americas	357	89	2,664	735
Other	23	28	171	244
	1,207	(422)	8,782	(3,100)
Equity accounted investments included above	(125)	(156)	(918)	(1,309)
	1,082	(578)	7,864	(4,409)

2009	2010	Figures in million	2010	2009
SA Rands			US Dollars
		3 Revenue
		Revenue consists of the following principal categories:
30,745	38,833	Gold income (note 2)	5,334	3,768
772	935	By-products (note 4)	129	94
–	56	Royalties received (note 6)	8	–
		Interest received (note 32)
112	86	– loans and receivables (1)	12	14
50	41	– available-for-sale and held-to-maturity investments	6	6
282	184	– cash and cash equivalents	25	34
31,961	40,135		5,514	3,916
		(1) Interest received from loans and receivables comprises:
–	2	– related parties	–	–
112	84	– other loans	12	14
112	86		12	14
		4 Cost of sales
18,844	20,084	Cash operating costs (1)	2,756	2,277
–	(123)	Insurance reimbursement	(16)	–
(772)	(935)	By-products revenue (note 3)	(129)	(94)
18,072	19,026		2,611	2,183
699	1,030	Royalties	142	84
134	182	Other cash costs	25	16
18,905	20,238	Total cash costs	2,778	2,283
110	166	Retrenchment costs (note 10)	23	14
182	756	Rehabilitation and other non-cash costs	109	22
19,197	21,160	Production costs	2,910	2,319
4,615	5,022	Amortisation of tangible assets (notes 9, 15 and 32)	690	555
18	18	Amortisation of intangible assets (notes 16 and 32)	2	2
23,830	26,200	Total production costs	3,602	2,876
(610)	(367)	Inventory change	(52)	(63)
23,220	25,833		3,550	2,813
		(1) Cash operating costs comprises:
6,747	6,882	– salaries and wages	944	815
5,316	4,688	– stores and other consumables	642	638
3,019	3,459	– fuel, power and water	475	363
2,971	3,128	– contractors	429	358
791	1,927	– services and other charges	266	103
18,844	20,084		2,756	2,277
		5Other operating expenses
44	28	Pension and medical defined benefit provisions	3	5
31	121	Claims filed by former employees in respect of loss of employment, work-related accident injuries and diseases, governmental fiscal claims and care and maintenance of old tailings operations	17	3
5	–	Miscellaneous	–	–
80	149		20	8
		6 Special items
(5,115)	634	Net impairments (reversals) of tangible assets (notes 13, 15 and 24)	91	(683)
–	396	Mandatory convertible bonds issue discount, underwriting and professional fees	56	–
(420)	191	Net loss (profit) on disposal and derecognition of land, mineral rights, tangible assets and exploration properties (note 13) (1)	25	(49)
219	125	Indirect tax expenses and legal claims (2)	17	29
66	67	Impairment of other receivables	9	7
–	16	Impairment of investment (notes 13 and 18) (3)	2	–
–	8	Contractor termination costs at Geita Gold Mining Limited	1	–
–	(314)	Profit on disposal of investments (note 13) (4)	(43)	–
(54)	(134)	Insurance claim recovery	(19)	(7)
–	(56)	Royalties received (note 3)	(8)	–
95	(39)	(Recovery) loss on consignment inventory	(5)	12
(5,209)	894		126	(691)

(1)	The net loss (profit) on disposal and derecognition of land, mineral rights, tangible assets and exploration properties includes amongst others the following: on 1 August 2010, the sale of Tau Lekoa mine to Simmers & Jack Mines Limited was finalised, resulting in a loss on disposal of $7m, R41m; on 26 June 2009, AngloGold Ashanti Limited concluded the sale of its indirect 33.3% joint venture interest in the Boddington Gold Mine in Western Australia to Newmont Mining Corporation, resulting in a profit on disposal of $62m, R523m; and loss on disposal and derecognition of land, mineral rights, tangible assets and exploration properties amounted to $18m, R150m (2009: $13m, R102m).
(2)	Indirect tax expenses and legal claims include the following: provision for non-recovery of VAT and fuel duties in Tanzania and Guinea amounting to $13m, R95m (2009: $25m, R183m); and net provision for non-recovery of other indirect tax and legal claims of $4m, R30m (2009: $4m, R36m).
(3)	Impairment of Corvus Gold Inc. shares of $2m, R16m (2009: nil).
(4)	The profit on disposal of investments includes the following: on 9 November 2010, AngloGold Ashanti Limited disposed of its entire holding of 31,556,650 shares in Vancouver-based gold producer B2Gold Corp., resulting in a realised profit on disposal of $36m, R250m (2009: nil); and profit on disposal of minor investments amounted to $7m, R64m (2009: nil).

2009	2010	Figures in million	2010	2009
SA Rands			US Dollars
		7 Finance costs and unwinding of obligations
		Finance costs
–	275	Finance costs on rated bonds (1)	38	–
173	163	Finance costs on convertible bonds (1)	22	22
471	135	Finance costs on bank loans and overdrafts (1)	19	55
–	72	Finance costs on mandatory convertible bonds (1)	10	–
260	146	Amortisation of fees	20	31
28	34	Finance lease charges	5	3
38	9	Other finance costs	1	5
970	834		115	116
(135)	–	Amounts capitalised (note 15)	–	(15)
835	834	Total finance costs	115	101
		Unwinding of obligations, accretion of convertible bonds and other discounts
59	62	Unwinding of decommissioning obligation (note 27)	9	7
60	65	Unwinding of restoration obligation (note 27)	9	7
1	–	Unwinding of other provisions (note 27)	–	–
44	45	Discounting of other long-term receivables	6	6
147	97	Accretion of convertible bonds discount	27	18
311	369	Total unwinding of obligations, accretion of convertible bonds and other discounts	51	38
1,146	1,203	Total finance costs, unwinding of obligations, accretion of convertible bonds and other discounts (note 32)	166	139
		The disclosure in this note has been enhanced and comparatives restated in line with requirements of the credit rating agencies and other users of these financial statements.
		(1) Finance costs have been determined using the effective interest rate method.

2009	2010	Figures in million		2010	2009
SA Rands				US Dollars
		8 Share of equity accounted investments’ profit
3,095	2,507	Revenue		343	372
(1,887)	(1,637)	Operating expenses		(225)	(229)
1,208	870	Gross profit		118	143
(12)	7	Special items (note 13) (1)		1	(1)
–	8	Interest received		1	–
(7)	(9)	Finance costs		(1)	(1)
1,189	876	Profit before taxation		119	141
(403)	(378)	Taxation		(51)	(47)
786	498	Profit after taxation		68	94
(76)	(157)	Impairment (note 13) (2)		(24)	(10)
75	126	Reversal of impairment (note 13) (3)		19	10
785	467	(note 32)		63	94
		(1)	During 2010, special items included the write down of loans of $1m, R7m. During 2009, special items included a profit on disposal of assets of $0.2m, R2m and impairments of assets of $0.2m, R1m.
		(2)	In 2010, the Margaret Water Company and the AGAPolymetal Strategic Alliance investments were impaired. In 2009, Amikan Holding Limited, AS APK Limited and Margaret Water Company investments were impaired. Impairments of $24m, R157m (2009: $10m, R76m) were recorded.
		(3)	The Trans-Siberian Gold plc impairment of $19m, R126m (2009: $10m, R75m) was reversed due to the increase in the listed share price.

		9 Profit (loss) before taxation
		Profit (loss) before taxation is arrived at after taking account of:
		Auditors’ remuneration
61	61	– audit fees	8	7
(3)	(1)	– over provision prior year	–	–
8	11	– other assurance services	2	1
66	71		10	8
		Amortisation of tangible assets
4,589	4,977	– owned assets	684	552
26	45	– leased assets	6	3
4,615	5,022	(notes 4, 15 and 32)	690	555
91	117	Community investment	16	11
280	170	Operating lease charges	23	33
		10 Employee benefits
7,871	8,201	Employee benefits including executive directors’ salaries and other benefits	1,123	937
		Health care and medical scheme costs
492	580	– current medical expenses	79	59
79	103	– defined benefit post-retirement medical expenses	14	10
		Pension and provident plan costs
447	471	– defined contribution	64	53
25	20	– defined benefit pension plan	3	3
110	166	Retrenchment costs (note 4)	23	14
337	434	Share-based payment expense (note 11)	59	41
9,361	9,975	Included in cost of sales, other operating expenses, special items and corporate administration, marketing and other expenses	1,365	1,117
		Actuarial defined benefit plan expense analysis
		Defined benefit post-retirement medical
4	6	– current service cost	1	1
77	100	– interest cost	13	9
(2)	(3)	– expected return on plan assets	–	–
79	103		14	10
		Defined benefit pension plan
51	50	– current service cost	7	6
141	182	– interest cost	25	17
(167)	(212)	– expected return on plan assets	(29)	(20)
25	20		3	3
		Actual return on plan assets
265	298	– defined benefit pension and medical plans	42	32
		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 allocated to employees who did not receive their full allocation in 2008. On 28 April 2009, a cash-settled share incentive scheme was implemented in Ghana (Ghana ESOP). The total cost relating to share incentive schemes was $59m, R434m (2009: $41m, R337m) and is made up as follows:
49	48	Employee Share Ownership Plan (ESOP) – Free shares	6	6
48	42	Employee Share Ownership Plan (ESOP) – E ordinary shares to employees	6	6
		Ghana Employee Ownership Plan (Ghana ESOP)
16	11	– Share appreciation rights	2	2
174	221	Bonus Share Plan (BSP)	30	21
53	116	Long-Term Incentive Plan (LTIP)	16	6
340	438	Total employee compensation cost	60	41
(3)	(4)	Employee compensation cost related to equity accounted joint ventures	(1)	–
337	434	Total employee compensation cost excluding equity accounted joint ventures (note 10)	59	41
		Included in:
236	276	– cost of sales	37	29
101	158	– corporate administration, marketing and other expenses	22	12
337	434		59	41

Equity-settled share incentive schemes

Employee Share Ownership Plan (ESOP)

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

The company also undertook an empowerment transaction with a black economic empowerment investment vehicle, Izingwe in 2006.

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

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

The award of free ordinary shares to employees

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

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

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

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

Number of shares	Weighted average exercise price		Number of shares	Weighted average exercise price
2009			2010
855,649	–	Awards outstanding at beginning of year	665,862	–
24,741	–	Awards reallocated during the year	21,004	–
(24,741)	–	Awards lapsed during the year	(21,004)	–
(189,787)	–	Awards exercised during the year	(230,921)	–
665,862	–	Awards outstanding at end of year	434,941	–
–	–	Awards exercisable at end of year	–	–

Up to 31 December 2010, the rights to a total of 21,004 (2009: 24,741) shares were surrendered by the participants. A total of 104,741 (2009: 56,443) shares were allotted to deceased, retired or retrenched employees. The income statement charge for the year was $6m, R48m (2009: $6m, R49m).

The award of E ordinary shares to employees

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

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

Dividends declared in respect of the E ordinary shares will firstly be allocated to cover administration expenses of the trust, where after 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		Number of shares	Weighted average exercise price
2009			2010
2,566,941	327.15	Awards outstanding at beginning of year	2,394,998	346.82
75,449	341.69	Awards reallocated during the year	69,146	361.16
(75,449)	334.81	Awards lapsed during the year	(69,146)	354.07
(138,059)	336.55	Awards cancelled during the year	(708,872)	354.35
(33,884)	333.39	Awards converted during the year	–	–
2,394,998	346.82	Awards outstanding at end of year	1,686,126	366.30

The weighted average exercise price is calculated as the initial grant price of R288.00 plus an interest factor less dividend apportionment. This value will change on a monthly basis, to take account of employees leaving the company and those shares being reissued to new employees. The income statement charge for the year was $6m, R42m (2009: $6m, R48m).

Up to 31 December 2010, the rights to a total of 69,146 (2009: 75,449) shares were surrendered by participants. No E ordinary shares were converted into ordinary shares during the year. In 2009, a total of 33,884 E ordinary shares were converted into 1,181 ordinary shares and allotted to deceased, retired or retrenched employees. A total of 708,872 (2009: 138,059) shares were cancelled as the result of the exercise price exceeding the share price on conversion date.

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		Number of shares	Weighted average exercise price
2009			2010
1,400,000	327.15	E ordinary shares outstanding at beginning of year	1,400,000	346.82
–	–	E ordinary shares granted during the year	–	–
–	–	E ordinary shares cancelled during the year	(280,000)	353.04
–	–	E ordinary shares converted during the year	–	–
1,400,000	346.82	E ordinary shares outstanding at end of year	1,120,000	366.30

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). A total of 280,000 (2009: nil) shares were cancelled as the result of the exercise price exceeding the share price on conversion date.

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 AngloGold Ashanti Limited’s shares. These estimates involve inherent uncertainties and the application of management judgment. In addition, the company is 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, 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:

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

Bonus Share Plan (BSP)

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

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

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

Award date (unvested awards and awards vested during the year)
		2007	2008	2009	2010
Calculated fair value		R322.00	R267.05	R293.99	R280.90
Vesting date (100%)		1 Jan 2010	–	–	–
Vesting date (40%)		–	1 Jan 2009	18 Feb 2010	24 Feb 2011
Vesting date (60%)		–	1 Jan 2010	18 Feb 2011	24 Feb 2012
Vesting date (conditional 20%)		–	1 Jan 2011	18 Feb 2012	24 Feb 2013
Expiry date		31 Dec 2016	31 Dec 2017	17 Feb 2019	23 Feb 2020

Number of shares	Weighted average exercise price		Number of shares	Weighted average exercise price
2009			2010
945,027	–	Awards outstanding at beginning of year	1,295,708	–
666,541	–	Awards granted during the year	811,638	–
(68,988)	–	Awards lapsed during the year	(86,526)	–
(246,872)	–	Awards exercised during the year	(468,327)	–
1,295,708	–	Awards outstanding at end of year	1,552,493	–
242,610	–	Awards exercisable at end of year	450,999	–

Up to 31 December 2010, the rights to a total of 86,526 (2009: 68,988) shares were surrendered by the participants. A total of 43,394 (2009: 57,420) shares were allotted to deceased, retired or retrenched employees.

The income statement charge for the year was $30m, R221m (2009: $21m, R174m).

Long-Term Incentive Plan (LTIP)

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

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

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

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

The main performance conditions in terms of the LTIP issued in 2010, 2009 and 2008 are:

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

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

Award date (unvested awards and awards vested during the year)
	2007	2008	2009	2010
Calculated fair value	R322.00	R267.05	R293.99	R280.90
Vesting date	1 Jan 2010	1 Jan 2011	18 Feb 2012	24 Feb 2013
Expiry date	31 Dec 2016	31 Dec 2017	17 Feb 2019	23 Feb 2020

Number of shares	Weighted average exercise price		Number of shares	Weighted average exercise price
2009			2010
990,445	–	Awards outstanding at beginning of year	1,263,749	–
534,574	–	Awards granted during the year	632,142	–
(190,085)	–	Awards lapsed during the year	(211,279)	–
(71,185)	–	Awards exercised during the year	(84,922)	–
1,263,749	–	Awards outstanding at end of year	1,599,690	–
72,257	–	Awards exercisable at end of year	85,457	–

The income statement charge for the year was $16m, R116m (2009: $6m, R53m).

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 2.33 years. An employee would only be able to exercise his options after the date upon which he receives written notification from the directors that the previously specified performance criteria have been fulfilled.

Number of shares	Weighted average exercise price		Number of shares	Weighted average exercise price
2009			2010
383,791	216.48	Options outstanding at beginning of year	178,471	216.87
(6,232)	216.38	Options lapsed during the year	–	–
(199,088)	216.12	Options exercised during the year	(65,511)	215.81
–	–	Options expired during the year	–	–
178,471	216.87	Options outstanding at end of year	112,960	217.49
178,471	216.87	Options exercisable at end of year	112,960	217.49

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 3.83 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.

Number of shares	Weighted average exercise price		Number of shares	Weighted average exercise price
2009			2010
548,706	221.33	Options outstanding at beginning of year	242,807	221.25
(7,780)	222.41	Options lapsed during the year	–	–
(298,119)	221.36	Options exercised during the year	(92,037)	220.82
–	–	Options expired during the year	–	–
242,807	221.25	Options outstanding at end of year	150,770	221.51
242,807	221.25	Options exercisable at end of year	150,770	221.51

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

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

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

The share options were granted at an exercise price of R299.50 per share. The performance condition applicable to these options was that US dollar EPS must increase by 7.5% for each of the three succeeding years. On 24 December 2002, AngloGold Ashanti Limited underwent a share split on a 2:1 basis therefore the EPS target was reduced accordingly. As none of the performance criteria was met, in the initial three years, the grantor decided to roll the scheme forward on a ‘roll over reset’ basis, to be reviewed annually. The performance criteria of these options were achieved during 2006. The remaining weighted average contractual life of options granted is 1.33 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.

Number of shares	Weighted average exercise price		Number of shares	Weighted average exercise price
2009			2010
457,336	279.64	Options outstanding at beginning of year	218,697	283.45
(10,226)	281.69	Options lapsed during the year	(4,492)	287.94
(228,413)	275.90	Options exercised during the year	(86,003)	279.13
–	–	Options expired during the year	–	–
218,697	283.45	Options outstanding at end of year	128,202	286.18
218,697	283.45	Options exercisable at end of year	128,202	286.18

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 0.80 years. The period in which and the extent to which the options vest and may be exercised are as follows:

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

Number of shares	Weighted average exercise price		Number of shares	Weighted average exercise price
2009			2010
116,491	139.82	Options outstanding at beginning of year	28,252	146.28
–	–	Options lapsed during the year	–	–
(88,239)	137.75	Options exercised during the year	(27,611)	145.17
–	–	Options expired during the year	–	–
28,252	146.28	Options outstanding at end of year	641	194.00
28,252	146.28	Options exercisable at end of year	641	194.00

No grants were made with respect to the time related scheme options and performance related options since 2005. 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 AngloGold Ashanti Limited’s shares. These estimates involve inherent uncertainties and the application of management’s judgment. In addition, the company is required to estimate the expected forfeiture rate and only recognise an expense for those options expected to vest. As a result, if other assumptions had been used, the recorded share-based compensation expense could have been different from that reported.

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

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

Cash-settled share incentive scheme

Ghana Employee Share Ownership Plan (Ghana ESOP)

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

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

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

The share price on the day of issue as at 29 April 2009 was $32.15, whilst the share price used in the payment of the first tranche was $28.46 per share. The share price used in the payment of the second tranche was $39.50 per share.

The award of share appreciation rights to employees

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

Number of shares	Weighted average exercise price		Number of shares	Weighted average exercise price
2009			2010
–	–	Rights outstanding at beginning of year	75,115	–
100,860	–	Rights granted during the year	–	–
(455)	–	Rights lapsed during the year	(720)	–
(25,290)	–	Rights exercised during the year	(25,270)	–
75,115	–	Rights outstanding at end of year	49,125	–
–	–	Rights exercisable at end of year	–	–

Up to 31 December 2010, a total of 720 (2009: 455) share appreciation rights were surrendered by the participants. The income statement charge for the year was $2m, R11m (2009: $2m, R16m). The liability recognised in the statement of financial position in respect of unexercised rights was $2m, R11m (2009: $1m, R9m).

2009	2010	Figures in million				2010	2009
SA Rands						US Dollars
		12 Taxation
		South African taxation
153	–		Mining tax (1)			–	19
89	112		Non-mining tax (2)			13	10
33	(628)		(Over) under provision prior year			(89)	4
			Deferred taxation
535	(1,377)				Temporary differences (3)	(195)	61
(1,451)	2,353				Unrealised non-hedge derivatives and other commodity contracts	334	(181)
(156)	(39)				Change in estimated deferred tax rate (4)	(6)	(21)
(797)	421					57	(108)
		Foreign taxation
1,113	1,628		Normal taxation (5)			226	138
(50)	(17)		Over provision prior year			(3)	(7)
			Deferred taxation
1,220	(37)			Temporary differences (3)		(7)	164
(314)	23			Unrealised non-hedge derivatives and other commodity contracts		3	(40)
1,969	1,597					219	255
1,172	2,018					276	147
		Tax reconciliation
		A reconciliation of the effective tax rate charged in the income statement to the prevailing estimated corporate tax rate is set out in the following table:
%	%					%	%
(100)	66	Effective tax rate				68	(121)
		Disallowable items
204	(12)		Derivative losses			(12)	236
–	(20)		transaction and finance costs			(20)	–
(23)	5		Share of equity accounted investments’ profit (loss)			5	(27)
(3)	(7)		Other			(7)	(3)
5	–	Foreign income tax allowances and rate differentials				(11)	31
(39)	–	Exchange variation and translation adjustments				9	(68)
10	(18)	Current unrecognised tax assets				(19)	12
(13)	1	Change in estimated deferred tax rate (4)				1	(17)
(1)	20	Prior year’s provision				21	(3)
(5)	–	Other				–	(5)
35	35	Estimated corporate tax rate (6)				35	35

(1)	There was no mining tax charge in the current year as it was primarily offset by losses from the accelerated non-hedge derivative buy-backs.
(2)	In South Africa, non-mining income is taxed at the higher non-mining tax rate of 35% (2009: 35%) as the company has elected to be exempt from STC. Companies that elected to be subject to STC are taxed at the lower company tax rate, that of 28% (2009: 28%) for non-mining taxation purposes.
(3)	Included in temporary differences in South African taxation is a tax credit on the impairment and disposal of tangible assets of $28m, R193m (2009: tax credit $8m, R61m). Included in temporary differences of foreign taxation is a tax charge on the impairment reversals and disposal of tangible assets of $5m, R37m (2009: tax charge of $190m, R1,421m) (note 13).
(4)	In South Africa the mining operations are taxed on a variable rate that increases as profitability increases. The tax rate used to calculate deferred tax is based on the group’s current estimate of future profitability when temporary differences will reverse. Depending on the profitability of the operations, the tax rate can consequently be significantly different from year to year. The change in the estimated deferred tax rate at which the temporary differences will reverse amounts to a credit of $6m, R39m (2009: tax credit of $21m, R156m).
(5)	Included in normal foreign taxation is tax on the disposal of tangible assets of $nil, R4m (2009: $18m, R145m) (note 13).
(6)	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.

2009	2010	Figures in million	2010	2009
SA Rands			US Dollars
		All mining capital expenditure is deducted to the extent that it does not result in an assessed loss and depreciation is ignored when calculating the South African mining income. Capital expenditure not deducted from mining income is carried forward as unredeemed capital to be deducted from future mining income. South Africa operates under two tax paying operations, Vaal River Operation and West Wits Operation. Under ring-fencing legislation, each operation is treated separately and deductions can only be utilised against income generated by the relevant tax operation. The formula for determining the South African mining tax rate is: Y = 43 – 215/X (2009: Y = 43 – 215/X) where Y is the percentage rate of tax payable and X is the ratio of mining profit net of any redeemable capital expenditure to mining revenue expressed as a percentage.
		Unrecognised tax losses
2,964	1,548	Unrecognised tax losses of the US operations which are available for offset against future profits earned in the US	236	399
		Analysis of tax losses
		Tax losses available to be used against future profits
943	–	– utilisation required within one year	–	127
36	32	– utilisation required between two and five years	5	5
1,985	1,516	– utilisation in excess of five years	231	267
2,964	1,548		236	399
		Unrecognised tax losses utilised
1,741	1,416	Assessed losses utilised during the year	163	184
		13 Earnings per ordinary share
(765)	171	Basic profit (loss) per ordinary share The calculation of basic profit (loss) per ordinary share is based on profits attributable to equity shareholders of$76m, R637m (2009: losses of $320m, R2,762m)and 371,870,821 (2009: 361,228,295) shares being the weighted average number of ordinary shares in issue during the financial year.	20	(89)
(765)	171	Diluted profit (loss) per ordinary share The calculation of diluted profit (loss) per ordinary share is based on profits attributable to equity shareholders of $76m, R637m (2009: losses of $320m, R2,762m) and 373,440,427 (2009: 361,228,295) shares being the diluted number of ordinary shares. In 2009, no adjustment was made since the effect is anti-dilutive.	20	(89)

	2010	2009
	Number of shares
In calculating the basic and diluted number of ordinary shares outstanding for the year, the following were taken into consideration:
Ordinary shares	367,664,700	356,563,773
E ordinary shares (1)	3,182,662	3,873,169
Fully vested options (2)	1,023,459	791,353
Weighted average number of shares	371,870,821	361,228,295
Dilutive potential of share options (3)	1,569,606	–
Diluted number of ordinary shares	373,440,427	361,228,295

(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 in 2009 did not take into account the effect of 1,234,858 shares, issuable on share awards as the effect of this was anti-dilutive for this period.

The calculation of diluted earnings per share did not take into account the effect of 33,524,615 (2009: 15,384,615) shares, issuable upon the exercise of convertible bonds, as the effect of this was anti-dilutive for this period.

2009	2010	Figures in million	2010	2009
SA Rands			US Dollars
		Headline earnings (loss) The profit (loss) attributable to equity shareholders was adjusted by the following to arrive at headline earnings (loss):
(2,762)	637	Profit (loss) attributable to equity shareholders	76	(320)
(5,115)	634	Net impairments (reversals) of tangible assets (notes 6, 15 and 24)	91	(683)
(420)	191	Net loss (profit) on disposal and derecognition of land, mineral rights, tangible assets and exploration properties (note 6)	25	(49)
–	16	Impairment of investment (notes 6 and 18)	2	–
76	157	Impairment of investment in associates and joint ventures (note 8)	24	10
(75)	(126)	Reversal of impairment in associates (note 8)	(19)	(10)
1	(7)	Special items of associates (note 8)	(1)	–
–	(314)	Profit on disposal of investments (note 6)	(43)	–
		Taxation on items above
145	4	– current portion (note 12)	–	18
1,360	(230)	– deferred portion (note 12)	(33)	182
(6,790)	962		122	(852)
(1,880)	259	Cents per share Headline earnings (loss) removes items of a capital nature from the calculation of earnings per share, calculated in accordance with Circular 3/2009 issued by the South African Institute of Chartered Accountants (SAICA). The calculation of headline earnings (loss) per ordinary share is based on headline earnings of $122m, R962m (2009: losses of $852m, R6,790m) and 371,870,821 (2009: 361,228,295) shares being the weighted average number of ordinary shares in issue during the year.	33	(236)
		14 Dividends
		Ordinary shares
177	–	No. 105 of 50 SA cents per ordinary share was declared on 6 February 2009 and paid on 13 March 2009 (5 US cents per share).	–	18
213	–	No. 106 of 60 SA cents per ordinary share was declared on 29 July 2009 and paid on 28 August 2009 (8 US cents per share).	–	27
–	254	No. 107 of 70 SA cents per ordinary share was declared on 16 February 2010 and paid on 19 March 2010 (9 US cents per share).	34	–
–	236	No. 108 of 65 SA cents per ordinary share was declared on 10 August 2010 and paid on 10 September 2010 (9 US cents per share).	33	–
1	–	No. E5 of 25 SA cents per E ordinary share was declared on 6 February 2009 and paid on 13 March 2009 (2.5 US cents per share).	–	–
1	–	No. E6 of 30 SA cents per E ordinary share was declared on 29 July 2009 and paid on 28 August 2009 (4 US cents per share).	–	–
–	1	No. E7 of 35 SA cents per E ordinary share was declared on 16 February 2010 and paid on 19 March 2010 (4.5 US cents per share).	–	–
–	1	No. E8 of 32.5 SA cents per E ordinary share was declared on 10 August 2010 and paid on 10 September 2010 (4.5 US cents per share).	–	–
392	492		67	45
		No. 109 of 80 SA cents per ordinary share was declared on 15 February 2011 and will be paid on 18 March 2011 (approximately 11 US cents per share). The actual rate of payment will depend on the exchange rate on the date of currency conversion. No. E9 of 40 SA cents per E ordinary share was declared on 15 February 2011 and will be paid on 18 March 2011 (approximately 5.5 US cents per share). The actual rate of payment will depend on the exchange rate on the date of currency conversion.

15 Tangible assets

Figures in million	Mine develop- ment costs	Mine infra- structure	Mineral rights and dumps	Explora- tion and evaluation assets	Assets under construc- tion	Land and buildings	Total
US Dollars
Cost
Balance at 1 January 2009	5,323	2,495	1,064	30	229	50	9,191
Additions
– project capital	122	5	–	–	289	–	416
– stay-in-business capital	394	125	–	1	81	1	602
Disposals	(1)	(11)	–	–	–	–	(12)
Transfers and other movements (1)	(134)	161	(18)	–	(373)	3	(361)
Finance costs capitalised (note 7)	4	–	–	–	11	–	15
Translation	737	148	32	–	14	8	939
Balance at 31 December 2009	6,445	2,923	1,078	31	251	62	10,790
Accumulated amortisation
Balance at 1 January 2009	2,726	1,227	860	30	–	3	4,846
Amortisation for the year (notes 4, 9 and 32)	366	177	10	–	–	2	555
Impairments (notes 6, 13 and 24) (2)	3	4	–	–	–	–	7
Impairments reversal (notes 6, 13 and 24) (3)	(348)	–	(369)	–	–	–	(717)
Disposals	(1)	(10)	–	–	–	–	(11)
Transfers and other movements (1)	(163)	(5)	(7)	–	–	–	(175)
Translation	373	76	16	–	–	1	466
Balance at 31 December 2009	2,956	1,469	510	30	–	6	4,971
Net book value at 31 December 2009	3,489	1,454	568	1	251	56	5,819
Cost
Balance at 1 January 2010	6,445	2,923	1,078	31	251	62	10,790
Additions
– project capital	130	10	–	–	110	–	250
– stay-in-business capital	447	183	–	2	90	1	723
Disposals	–	(40)	–	–	–	–	(40)
Transfers and other movements (1)	(203)	41	(31)	–	34	6	(153)
Translation	491	105	18	1	17	5	637
Balance at 31 December 2010	7,310	3,222	1,065	34	502	74	12,207
Accumulated amortisation
Balance at 1 January 2010	2,956	1,469	510	30	–	6	4,971
Amortisation for the year (notes 4,9 and 32)	478	198	11	1	–	2	690
Impairments (notes 6, 13 and 24) (2)	20	16	–	–	47	–	83
Disposals	–	(40)	–	–	–	–	(40)
Transfers and other movements (1)	(8)	(18)	–	–	8	–	(18)
Translation	273	53	11	–	3	1	341
Balance at 31 December 2010	3,719	1,678	532	31	58	9	6,027
Net book value at 31 December 2010	3,591	1,544	533	3	444	65	6,180
SA Rands
Cost
Balance at 1 January 2009	50,331	23,591	10,059	281	2,167	472	86,901
Additions
– project capital	1,024	43	–	–	2,424	–	3,491
– stay-in-business capital	3,302	1,047	–	8	683	4	5,044
Disposals	(9)	(95)	–	–	–	(1)	(105)
Transfers and other movements (1)	(1,120)	1,349	(156)	–	(3,245)	28	(3,144)
Finance costs capitalised (note 7)	33	–	–	–	102	–	135
Translation	(5,644)	(4,199)	(1,891)	(60)	(267)	(41)	(12,102)
Balance at 31 December 2009	47,917	21,736	8,012	229	1,864	462	80,220
Accumulated amortisation
Balance at 1 January 2009	25,783	11,601	8,129	278	–	29	45,820
Amortisation for the year (notes 4,9 and 32)	3,048	1,469	82	–	–	16	4,615
Impairments (notes 6, 13 and 24)  (2)	22	28	–	–	–	–	50
Impairments reversal (notes 6, 13 and 24)  (3)	(2,601)	–	(2,764)	–	–	–	(5,365)
Disposals	(7)	(85)	–	–	–	–	(92)
Transfers and other movements (1)	(1,363)	(44)	(56)	–	–	–	(1,463)
Translation	(2,906)	(2,043)	(1,600)	(59)	–	–	(6,608)
Balance at 31 December 2009	21,976	10,926	3,791	219	–	45	36,957
Net book value at 31 December 2009	25,941	10,810	4,221	10	1,864	417	43,263
Cost
Balance at 1 January 2010	47,917	21,736	8,012	229	1,864	462	80,220
Additions
– project capital	950	72	1	–	806	–	1,829
– stay-in-business capital	3,267	1,333	–	17	657	4	5,278
Disposals	(3)	(294)	–	–	–	(1)	(298)
Transfers and other movements (1)	(1,480)	303	(229)	–	246	45	(1,115)
Translation	(2,624)	(1,980)	(788)	(27)	(274)	(25)	(5,718)
Balance at 31 December 2010	48,027	21,170	6,996	219	3,299	485	80,196
Accumulated amortisation
Balance at 1 January 2010	21,976	10,926	3,791	219	–	45	36,957
Amortisation for the year (notes 4, 9 and 32)	3,481	1,437	78	9	–	17	5,022
Impairments (notes 6, 13 and 24)  (2)	136	111	–	–	329	–	576
Disposals	(3)	(291)	–	–	–	–	(294)
Transfers and other movements (1)	(61)	(129)	–	–	62	–	(128)
Translation	(1,095)	(1,031)	(377)	(26)	(7)	(1)	(2,537)
Balance at 31 December 2010	24,434	11,023	3,492	202	384	61	39,596
Net book value at 31 December 2010	23,593	10,147	3,504	17	2,915	424	40,600

Included in the amounts for mine infrastructure are assets held under finance leases with a net book value of $20m, R134m (2009: $17m, R126m). Included in land and buildings are assets held under finance leases with a net book value of $28m, R185m (2009: $27m, R201m). The majority of the leased assets are pledged as security for the related finance lease. No assets are encumbered by project finance. No borrowing costs were capitalised in 2010. The weighted average capitalisation rate used to determine the amount of borrowing costs eligible for capitalisation in 2009 was 4.10%. 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)	Transfers and other movements comprise amounts from deferred stripping, change in estimates of decommissioning assets, asset reclassifications and transfers to/from non-current assets held for sale. In 2010 transfers to/from non-current assets held for sale comprise: assets with a net book value of $10m, R74m relating to Tau Lekoa were transferred to non-current assets held for sale. In 2009 transfers to/from non-current assets held for sale comprise: assets with a net book value of $84m, R704m relating to Tau Lekoa were transferred to non-current assets held for sale. assets with a net book value of $145m, R1,335m relating to the 33.33% joint venture interest in Boddington Gold Minewere transferred to non-current assets held for sale.
(2)	Impairments include the following: South Africa Below 120 level at TauTona – assets under constructionDue to a change in the mine plan resulting from safety-related concerns following seismic activity, the below 120 level development has been abandoned and will not generate future cash flows. An impairment loss of $47m, R329m, was recognised in the income statement. Savuka – mine development and mine infrastructure costs Due to a change in the mine plan, the Savuka assets have been abandoned and will not generate future cash flows. An impairment loss of $16m, R114m was recognised in the income statement. Ghana Induapriem – mine infrastructure costs The use of a tailings storage facility was discontinued, resulting in an impairment loss of $8m, R61m. Other Impairment of various minor tangible assets and equipment $12m, R72m (2009: $7m, R50m).
(3)	Impairments of cash generating units recognised in 2008 were partially reversed during 2009. The impairment reversals were largely due to increases in the long-term real gold price resulting in increased future discounted cash flows. Tanzania Geita mine As a result, Geita’s recoverable amount exceeded its carrying value in 2009 and an impairment reversal was recognised of $261m, R1,954m consisting of mine development of $106m, R793m and mineral rights and dumps of $155m, R1,161m. The recoverable amount was determined using a real pre-tax discount rate of 13.6% and was based on the impairment assumptions detailed below. Ghana Obuasi mine As a result, Obuasi’s recoverable amount exceeded its carrying value in 2009 and an impairment reversal was recognised of $373m, R2,790m consisting of mine development of $159m, R1,187m and mineral rights and dumps of $214m, R1,603m. The recoverable amount was determined using a real pre-tax discount rate of 8.4% and was based on the impairment assumptions detailed below. Iduapriem mine As a result, Iduapriem’s recoverable amount exceeded its carrying value in 2009 and an impairment reversal was recognised of $83m, R621m consisting of mine development. The recoverable amount was determined using a real pre-tax discount rate of 13.4% and was based on the impairment assumptions detailed below. The impairments/reversals relate to mining properties, mine development costs and mine plant facilities, and have been recognised in special items (note 6). The recoverable amount was determined by reference to value in use at an individual mine level. Impairment calculation assumptions – tangible assets and goodwill Management assumptions for the value in use of tangible assets and goodwill include: the gold price assumption represents management’s best estimate of the future price of gold. In arriving at the estimated long-term gold price, management considered all available market information, including current prices, historical averages, and forward-pricing curves. A long-term real gold price of $1,113/oz (2009: $906/oz) is based on a range of economic and market conditions that will exist over the remaining useful life of the assets. Annual life of mine plans take into account the following: proved and probable Ore Reserve; 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 2009. The WACC of 5.8% which is 60 basis points lower than in 2009 of 6.4%, is based on the average capital structure of the group and three major gold companies considered to be appropriate peers. The risk factors considered are country risk as well as project risk for cash flows relating to mines that are not yet in production and deep level mining projects. The country risk factor is based on the group’s internal assessment of country risk relative to the issues experienced in the countries in which it operates and explores; foreign currency cash flows translated at estimated forward exchange rates and then discounted using appropriate discount rates for that currency; cash flows used in impairment calculations are based on life of mine plans which exceed five years for the majority of the mines; and variable operating cash flows are increased at local Consumer Price Index rates. The group reviews and tests the carrying value of assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. In addition, goodwill is tested on an annual basis for impairment. Assets are grouped at the lowest level for which identifiable cash flows are largely independent of cash flows of other assets and liabilities. If there are indications that impairment may have occurred, estimates are prepared of expected future cash flows for each cash generating unit. Expected future cash flows used to determine the value in use of goodwill and tangible assets are inherently uncertain and could materially change over time. The cash flows are significantly affected by a number of factors including reserves and production estimates, together with economic factors such as spot gold prices, discount rates, foreign currency exchange rates, estimates of costs to produce reserves and future capital expenditure. Should management’s estimate of the future not reflect actual events, further impairments may be identified. Factors affecting the estimates include: changes in proved and probable Ore Reserve as well as value beyond proved and probable reserves; the grade of Ore Reserve as well as value beyond proved and probable reserves may vary significantly from time to time; differences between actual commodity prices and commodity price assumptions; unforeseen operational issues at mine sites; and changes in capital, operating mining, processing and reclamation costs and foreign exchange rates. There were no impairment indicators or impairment reversal indicators for cash generating units during 2010. Based on an analysis carried out by the group in 2009, the carrying value and value in use of cash generating units that were most sensitive to a 5% movement in gold price, ounces, costs and discount rate assumptions are:

Carrying value	Value in use	Figures in million	Carrying value	Value in use
SA Rands		2009	US Dollars
8,669	8,669	Obuasi	1,166	1,166
6,978	6,978	Geita Gold Mining Limited	939	939
2,126	2,126	Iduapriem	286	286

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 cash generating units. 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 2010 because these assumptions and others used in impairment testing of tangible assets and goodwill are inextricably linked. In addition, for those cash generating units 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 2010.

2009	2010	Figures in million	2010	2009
SA Rands			US Dollars
		16 Intangible assets
		Goodwill
		Cost
3,461	3,029	Balance at beginning of year	408	366
(432)	(187)	Translation	25	42
3,029	2,842	Balance at end of year	433	408
		Accumulated amortisation and impairment losses
2,253	1,851	Balance at beginning of year	249	238
(402)	(173)	Translation	7	11
1,851	1,678	Balance at end of year	256	249
1,178	1,164	Net book value	177	159
		Net carrying amount allocated to each of the cash generating units:
1,013	1,018	Sunrise Dam	154	136
106	94	AngloGold Ashanti Córrego do Sitío Mineração	15	15
59	52	Serra Grande	8	8
1,178	1,164		177	159
		Real pre-tax discount rates applied in impairment calculations on cash generating units (CGUs) for which the carrying amount of goodwill is significant are as follows:
		Sunrise Dam (1)	11.1%	9.9%
		Royalty, tax rate concession and other
		Cost
472	371	Balance at beginning of year	49	49
–	4	Additions	1	–
–	4	Transfers and other movements	–	–
(101)	(44)	Translation	–	–
371	335	Balance at end of year	50	49
		Accumulated amortisation and impairment losses
277	233	Balance at beginning of year	31	29
18	18	Amortisation (notes 4 and 32)	2	2
(62)	(29)	Translation	–	–
233	222	Balance at end of year	33	31
138	113	Net book value	17	18
1,316	1,277	Total intangible assets	194	177
The government of Ghana agreed to a concession on the royalty payments by maintaining a rate of 3% for 15 years from 2004. The tax rate concession was granted at a rate of 30% for the Ashanti business combination in 2004. During 2005, the corporate tax rate in Ghana decreased to 25% and the tax rate concession, which expires in 2019, was fully impaired. (1) The discount rates for 2010 were determined on a basis consistent with the 2009 discount rates.
		17 Investments in associates and equity accounted joint ventures
		The carrying value of investments in associates and equity accounted joint ventures can be analysed as follows:
117	244	Carrying value of investments in associates	37	16
17	17	Loans advanced to associates (1)	3	2
4,587	3,791	Carrying value of investments in equity accounted joint ventures	577	617
37	35	Loans advanced to equity accounted joint ventures (2)	5	5
4,758	4,087	Investments in associates and equity accounted  joint ventures	622	640

In 2010, the Margaret Water Company and AGA-Polymetal Strategic Alliance investments were impaired and the balance of the Trans-Siberian Gold plc impairment was reversed. In 2009, the Amikan Holding Limited, AS APK Limited and Margaret Water Company investments were impaired and part of the Trans-Siberian Gold plc impairment was reversed. The impairment tests considered the investments fair value and anticipated future cash flows. Impairments of $24m, R157m (2009: $10m, R76m) were recorded. An impairment reversal of $19m, R126m (2009: $10m, R75m) was recognised in the income statement. Investments in associates comprises:

Name	Effective %		Description
	2010	2009
Margaret Water Company	33.3	33.3	Pumping of underground water in the Vaal River Region.
Oro Group (Pty) Limited (3)	25	25	Manufacture and wholesale of jewellery.
Orpheo (Pty) Limited (3)	50	33.3	Design, manufacture and wholesale of jewellery.
Trans-Siberian Gold plc (3) (4) (5)	30.7	29.7	Exploration and development of gold mines.
Wonder Wise Holdings Limited	–	25	Marketing and wholesale of jewellery.

(1)	Loans advanced to associates consist of $1.8m, R12m (2009: $1.6m, R12m) to Oro Group (Pty) Limited and $0.7m, R5m (2009: $0.6m, R5m) to Orpheo (Pty) Limited. The Oro loan bears interest at a rate determined by the Oro Group (Pty) Limited’s board of directors and is repayable at its discretion. The Orpheo (Pty) Limited loan is unsecured, interest free and there are no fixed terms of repayment.
(2)	Loans advanced to equity accounted joint ventures consist of $5m, R35m (2009: $2m, R12m) to AuruMar (Pty) Limited. The AGA-Polymetal Strategic Alliance loan of $3m, R25m in 2009 was written off during the year. The loan to AuruMar (Pty) Limited is interest free and has no fixed terms of repayment.
(3)	Equity accounting is based on results to 30 September 2010, adjusted for material transactions.
(4)	At 31 December 2010, the fair value of the group’s investment in Trans-Siberian Gold plc was $33m, R219m (2009: $12m, R89m).
(5)	Effective 23 March 2010, AngloGold Ashanti Limited increased its holding in Trans-Siberian Gold plc from 29.7% to 30.7%.

2009	2010	Figures in million	2010	2009
SA Rands			US Dollars
		Summarised financial information of equity accounted associates is as follows (not attributable):
		Statement of financial position
661	724	Non-current assets	110	89
328	301	Current assets	46	44
989	1,025	Total assets	156	133
129	260	Non-current liabilities	40	17
166	129	Current liabilities	20	23
295	389	Total liabilities	60	40
694	636	Net assets	96	93
		Income statement
521	398	Revenue	56	62
(780)	(411)	Costs and expenses	(58)	(94)
(3)	(3)	Taxation	–	–
(262)	(16)	Loss after taxation	(2)	(32)

Investments in equity accounted joint ventures comprises:

Name	Effective %		Description
	2010	2009
AGA-Polymetal Strategic Alliance (6)	50	50	Exploration and development of gold mines.
AuruMar (Pty) Limited	50	50	Global exploration of marine deposits containing gold as the primary mineral.
Kibali Goldmines s.p.r.l.	45	45	Exploration and development of gold mines.
Société des Mines de Morila S.A.	40	40	Commercial exploitation of gold.
Société d'Exploitation des Mines d'Or de Sadiola S.A.	41	41	Commercial exploitation of gold.
Société d'Exploitation des Mines d'Or de Yatela S.A.	40	40	Commercial exploitation of gold.

(6)

Equity accounting is based on results to 30 September 2010, adjusted for material transactions. The AGA-Polymetal Strategic Alliance consists of the AGA-Polymetal Strategic Alliance Management Company, Amikan Holding Limited, AS APK Holdings Limited, Imizoloto Holdings Limited and Yeniseiskaya Holdings Limited.

2009	2010	Figures in million	2010	2009
SA Rands			US Dollars
		Summarised financial information of equity accounted joint ventures is as follows (not attributable):
		Statement of financial position
4,428	3,837	Non-current assets	584	596
3,304	2,505	Current assets	381	445
7,732	6,342	Total assets	965	1,041
897	1,363	Non-current liabilities	207	121
806	874	Current liabilities	133	108
1,703	2,237	Total liabilities	340	229
6,029	4,105	Net assets	625	812
		Income statement
7,367	5,985	Revenue	819	912
(4,284)	(3,816)	Costs and expenses	(525)	(534)
(998)	(933)	Taxation	(126)	(121)
2,085	1,236	Profit after taxation	168	257
		18 Other investments
		Listed investments
		Available-for-sale
162	829	Balance at beginning of year	111	17
75	149	Additions	21	9
(14)	(587)	Disposals	(81)	(2)
		Transfer of B2Gold Corporation from investment
221	–	in associates	–	26
482	529	Fair value adjustments	73	57
–	(16)	Impairment (notes 6 and 13) (1)	(2)	–
(97)	(90)	Translation	2	4
829	814	Balance at end of year	124	111
		(1) Impairment of Corvus Gold Inc. shares of $2m, R16m (2009: nil).
		The available-for-sale investments consist of ordinary shares and primarily comprise:
407	640	International Tower Hill Mines Limited	98	55
80	95	Various listed investments held by Environmental Rehabilitation Trust Fund	15	11
248	–	B2Gold Corporation	–	33
60	–	Red 5 Limited	–	8
34	79	Other	11	4
829	814		124	111

The group’s listed available-for-sale equity investments are susceptible to market price risk arising from uncertainties about the future values of the investments. At the reporting date, the majority of equity investments were listed on the Toronto Stock Exchange and the JSE. Based on the share price of International Tower Hill Mines Limited (ITH) over the past year and carrying value at 31 December 2010 of $98m, R640m, if ITH achieved the high that it achieved during 2010 of C$10.49 per share, other comprehensive income (OCI) would increase by $2m, R16m. If it achieved the low of C$5.67 per share, OCI would decrease by $43m, R286m. The exposure to listed shares held by the Environmental Rehabilitation Trust Fund at fair value on the JSE was $15m, R95m. An analysis based on the assumption that the equity index (ALSI on the JSE) had increased/decreased by 10% with all other variables held constant and all the group’s JSE listed equity investments moved according to the ALSI, would impact OCI by $1.5m, R9.5m.

		Held-to-maturity
104	74	Balance at beginning of year	10	11
58	20	Additions	3	7
(88)	(12)	Maturities	(2)	(11)
–	–	Translation	2	3
74	82	Balance at end of year	13	10
		Rehabilitation Trust Fund administered by RMB Private Bank comprising:
74	82	Government bonds	13	10
74	82		13	10
903	896	Book value of listed investments	137	121
906	907	Market value of listed investments	138	121
		The market value of bonds held-to-maturity is $14m, R93m (2009: $10m, R77m). The market value has a sensitivity of R39m (2009: R44m) for a 1% change in interest rates.
		Unlisted investments
		Available-for-sale
2	26	Balance at beginning of year	4	–
27	41	Additions	5	4
–	(1)	Disposals	–	–
(3)	(7)	Translation	–	–
26	59	Balance at end of year	9	4
		The available-for-sale investments consist primarily of XDM Resources Limited. There is no active market for the unlisted equity investments and fair value cannot be reliably measured. The unlisted equity investments are carried at cost. The group does not intend to sell the investments in the foreseeable future.
		Held-to-maturity
357	373	Balance at beginning of year	50	38
541	657	Additions	90	65
(525)	(430)	Maturities	(59)	(63)
–	–	Translation	10	10
373	600	Balance at end of year	91	50
		The held-to-maturity investments include:
319	543	Negotiable Certificates of Deposit – Rehabilitation Trust Fund administered by RMB Private Bank	83	43
36	39	Nufcor Uranium Trust Fund	6	5
18	18	Other	2	2
373	600		91	50
399	659	Book value of unlisted investments	100	54
399	659	Fair value of unlisted investments	100	54
1,302	1,555	Total book value of other investments (note 35)	237	175
1,305	1,566	Total fair value of other investments	238	175
		19 Inventories
		Non-current
		Raw materials
2,356	2,137	– heap-leach inventory	325	317
144	131	– ore stockpiles	20	19
2,500	2,268	Total metal inventories	345	336
8	–	Mine operating supplies	–	1
2,508	2,268		345	337
		Current
		Raw materials
1,567	2,170	– ore stockpiles	331	211
300	601	– heap-leach inventory	91	40
		Work in progress
552	612	– metals in process	93	74
		Finished goods
556	506	– gold doré/bullion	77	75
255	281	– by-products	43	34
3,230	4,170	Total metal inventories	635	434
1,872	1,678	Mine operating supplies	255	252
5,102	5,848		890	686
7,610	8,116	Total inventories (1)	1,235	1,023
		(1) The amount of the write-down of ore stockpiles, metals in process, gold doré/bullion, by-products and mine operating supplies to net realisable value, and recognised as an expense is $21m, R151m (2009: $48m, R412m). This expense is included in cost of sales which is disclosed in note 4.
		20 Other non-current assets
38	1	AngloGold Ashanti Limited Pension Fund (note 28)	–	5
16	17	Post-retirement medical scheme for Rand Refinery employees (note 28)	3	2
–	1	Ashanti Retired Staff Pension Fund (note 28)	–	–
–	1	Retiree Medical Plan for Nufcor South Africa employees (note 28)	–	–
		Loans and receivables
–	36	Loan receivable at 31 December 2020 bearing interest at 8% per annum	5	–
5	4	Loan receivable at 31 December 2011 bearing interest at 3% per annum	1	1
2	–	Other interest-bearing loan – receivable monthly to June 2010 at South African prime bank overdraft rate less 2%	–	–
5	3	Other non-interest bearing loans and receivables – receivable on various dates	1	–
66	63		10	8
(3)	(4)	Current portion of other non-current assets included in current assets	(1)	–
63	59		9	8
		21 Trade and other receivables
		Non-current
199	207	Prepayments and accrued income	31	27
417	538	Recoverable tax, rebates, levies and duties (1)	82	56
172	255	Other receivables	39	23
788	1,000		152	106
		Current
334	344	Trade receivables	53	45
384	393	Prepayments and accrued income	60	52
608	697	Recoverable tax, rebates, levies and duties (1)	106	82
35	21	Amounts due from related parties	3	5
13	57	Interest receivable	9	2
45	113	Other receivables	16	5
1,419	1,625		247	191
2,207	2,625	Total trade and other receivables	399	297

Current trade receivables 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.

During the year, trade and other receivables were impaired by $8m, R21m (2009: $32m, R237m).

(1)

Recoverable tax, rebates, levies and duties includes the following:Recoverable value added tax due from the Tanzanian government amounts to $49m, R322m at 31 December 2010 (2009: $36m, R268m). The last audited value added tax return was for the period ended 31 October 2010. At 31 December 2010, $49m, R320m (2009: $28m, R209m) was still outstanding and $nil, R2m (2009: $8m, R59m) is still subject to audit. The accounting processes for the unaudited amounts 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% (2009: 7.82%).

Recoverable fuel duties from the Tanzanian government amount to $62m, R407m at 31 December 2010 (2009: $48m, R357m). 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 $43m, R282m (2009: $44m, R327m) have been lodged with the Customs and Excise authorities, which are still outstanding, whilst claims for a refund of $19m, R125m (2009: $4m, R30m) 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% (2009: 7.82%).

		22 Cash restricted for use
		Non-current (1)
3	5	Cash restricted by prudential solvency requirements	1	–
391	209	Cash balances held by Environmental Rehabilitation Trust Funds	32	53
394	214		33	53
		Current (1)
57	52	Cash restricted by prudential solvency requirements	8	8
1	3	Cash balances held by an Employee Share Scheme Trust Fund	–	–
21	5	Cash balances held by the Tropicana joint venture	1	3
8	9	Other	1	1
87	69		10	12
481	283	Total cash restricted for use (notes 35 and 36)	43	65
		(1) During 2010, management determined that certain cash balances should be reclassified to non-current as they are restricted beyond 12 months. The 2009 and 2008 financial statements were adjusted to reflect this reclassification. Non-current and current cash restricted for use in 2008 was $34m, R326mb and $10m, R89m respectively.
		23 Cash and cash equivalents
2,535	3,036	Cash and deposits on call	462	341
5,641	740	Money market instruments	113	759
8,176	3,776	(notes 35 and 36)	575	1,100
		For the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise the following:
2,535	3,036	Cash and deposits on call	462	341
5,641	740	Money market instruments	113	759
–	73	Cash and cash equivalents included in assets held for sale	11	–
8,176	3,849		586	1,100

24 Non-current assets and liabilities held for sale Effective 17 February 2009, the interest in the Tau Lekoa mine together with the adjacent Weltevreden, Jonkerskraal and Goedgenoeg project areas in South Africa were classified as held for sale. Tau Lekoa was previously recognised as a combination of tangible and current assets, and current and long-term liabilities. The purchase consideration consists of two components: an initial cash payment or combination of cash payment and Simmer & Jack Mines Limited (Simmers) shares together with future royalty payments. The Department of Mineral Resources has transferred the mining rights for its Tau Lekoa mine to Buffelsfontein Gold Mines Limited, a wholly owned subsidiary of Simmers. Full ownership of Tau Lekoa and the adjacent properties of Weltevreden, Jonkerskraal and Goedgenoeg passed to Simmers on 1 August 2010.

2009	2010	Figures in million	2010	2009
SA Rands			US Dollars
529	–	Following the classification of Tau Lekoa as held for sale, an impairment loss of $8m, R58m (2009: $27m, R200m) was recognised to reduce the carrying amount of the disposal group to fair value less costs to sell (notes 6 and 13).	–	71
10	10	Effective December 2007, Rand Refinery allocated parts of its premises that were no longer utilised $1m, R10m (previously recognised as tangible assets), to assets held for sale. On 1 April 2008, a sale agreement was concluded subject to the suspensive condition regarding rezoning of the land and transfer of title deeds. Rand Refinery currently awaits the rezoning transfer notification from the municipal and deeds office in order to conclude the sales transaction.	1	1
111	–	Effective 2 December 2009, Amikan Holding Limited (Amikan) was classified as held for sale. AngloGold Ashanti Holdings plc, a wholly owned subsidiary entered into a memorandum of understanding with Polyholding Limited relating to the disposal of Amikan. Amikan was previously recognised as an equity accounted investment. Completion was expected to occur on or before 30 April 2010, but agreement could not be reached and the transaction was subsequently cancelled.	–	15
–	100	Effective 3 November 2010, ISS International Limited (ISSI) was classified as held for sale. AngloGold Ashanti Limited entered into a memorandum of understanding with The Institute of Mine Seismology (IMS) relating to the disposal of ISSI. The transaction was completed on 28 February 2011.	15	–
650	110	Total non-current assets held for sale	16	87
		Non-current liabilities held for sale:
56	–	– Tau Lekoa mine	–	7
–	22	– ISSI	3	–
56	22	Total non-current liabilities held for sale	3	7
		25 Share capital and premium
		Share capital
		Authorised
150	150	600,000,000 ordinary shares of 25 SA cents each	23	23
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	–	–
152	152		23	23
		Issued and fully paid
90	95	381,204,080 (2009: 362,240,669) ordinary shares of 25 SA cents each (1)	16	16
1	1	2,806,126 (2009: 3,794,998) E ordinary shares of 25 SA cents each	–	–
1	1	2,000,000 (2009: 2,000,000) A redeemable preference shares of 50 SA cents each	–	–
–	–	778,896 (2009: 778,896) B redeemable preference shares of 1 SA cent each	–	–
92	97		16	16
		Treasury shares held within the group:
(1)	(1)	2,778,896 (2009: 2,778,896) A and B redeemable preference shares held within the group	–	–
–	–	434,941 (2009: 665,862) ordinary shares held within the group (2)	–	–
(1)	(1)	1,686,126 (2009: 2,394,998) E ordinary shares held within the group (2)	–	–
90	95		16	16
		Share premium
38,158	40,572	Balance at beginning of year	5,919	5,609
2,436	5,766	Ordinary shares issued (1)	812	312
(22)	(90)	E ordinary shares cancelled	(13)	(2)
40,572	46,248		6,718	5,919
		Less: held within the group
(313)	(313)	Redeemable preference shares	(53)	(53)
(212)	(139)	Ordinary shares	(22)	(32)
(303)	(213)	E ordinary shares	(32)	(45)
39,744	45,583		6,611	5,789
39,834	45,678	Share capital and premium	6,627	5,805

(1)	The most significant movement was the equity offering which resulted in the issue of 18,140,000 (2009: 7,624,162) ordinary shares at an issue price of R308.37 (2009: R288.32) per share. Total proceeds of $789m, R5.6bn (2009: $284m, R2.2bn) were received.
(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 company.

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.

2009	2010	Figures in million	2010	2009
SA Rands			US Dollars
		26 Borrowings
		Unsecured
		Debt carried at fair value
–	5,739	Mandatory convertible bonds – issued September2010 (1)	874	–
		Quarterly coupons are paid at 6% per annum and the bonds are convertible into a variable number of shares ranging from 18,140,000 shares at a price equal to or less than $43.50 per share, to 14,511,937 shares at a price equal to or greater than $54.375 per share, each as calculated in accordance with the formula set forth in the bond agreement. The bonds are US dollar-based and are convertible into shares in September 2013. The shareholders have authorised the convertible bonds to be settled in equity and not have any cash settlement potential except if a fundamental change or conversion rate adjustment causes the number of shares deliverable upon conversion to exceed the number of shares reserved for such purpose, among other circumstances provided for in the bond agreement.
		Debt carried at amortised cost
–	6,537	Rated bonds – issued April 2010 (2)	995	–
		Semi-annual coupons are paid at 5.375% per annum on $700m 10-year bonds and at 6.5% on $300m 30-year bonds. The $700m bonds are repayable in April 2020 and the $300m bonds are repayable in April 2040. The bonds are US dollar-based.
4,433	4,089	3.5% Convertible bonds – issued May 2009 (3)	623	596
		Semi-annual coupons are paid at 3.5% per annum. The bonds issued on 22 May 2009, are convertible into ADS’s up to May 2014 and are US dollar-based. The bonds are convertible, at the holders option, at an initial price of $47.6126 per ADS. AngloGold Ashanti Limited may redeem the bonds by giving between 30 and 90 days notice to the bondholders at any time after 11 June 2012, if the price of the ADS’s exceeds 130% of the conversion price for more than 20 consecutive dealing days, five days prior to notice or at any time if conversion rights have been exercised or purchases effected on 85% of the bonds issued.
–	701	FirstRand Bank Limited loan facility (R1.5bn) (4)	107	–
		Interest charged at JIBAR plus 0.95% per annum. Loan is repayable in May 2011 and is SA rand-based, the loan is subject to debt covenant arrangements for which no default event occurred
–	251	Syndicated loan facility ($1bn) (5)	38	–
		Interest charged at LIBOR plus 1.75% per annum. Loan is repayable in April 2014 and is US dollar-based, the loan is subject to debt covenant arrangements for which no default event occurred.
58	29	Grupo Santander Brasil	5	8
		Interest charged at LIBOR plus 1.45% per annum. Loan is repayable in quarterly instalments terminating in September 2011 and is US dollar-based.
48	28	Grupo Santander Brasil	4	6
		Interest charged at 6% per annum. Loans are repayable in monthly instalments terminating in November 2013 and April 2014 and are BRL-based. Syndicated loan facility ($1,150m) – Drawn down in
7,616	–	US dollars and Australian dollars (6)	–	1,024
		Interest charged at LIBOR plus 0.4% per annum. Loan was repaid in June 2010 and was US dollar-based, the loan was subject to debt covenant arrangements for which no default event occurred.
1,772	–	Standard Chartered term facility (7)	–	238
		Interest charged at a margin of 4.25% over the lenders’ cost of funds (subject to a cap of 1.25% plus LIBOR). Loan was repaid in May 2010 and was US dollar-based.
–	4	Brazilian Economic and Social Development Bank	–	–
		Interest charged at a rate of 4.5% per annum. Loans are repayable by June 2020 and are BRL-based.
13,927	17,378	Total unsecured borrowings	2,646	1,872
		Secured
		Finance leases
258	259	Turbine Square Two (Pty) Limited	39	35
		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 SA rand-based. The buildings financed are used as security for these loans (note 36).
115	86	Caterpillar Financial Services Corporation	13	16
		Interest charged at an average rate of 5.46% per annum. Loans are repayable in monthly instalments terminating in January 2015 and are US dollar-based. The equipment financed is used as security for these loans.
48	29	Mazuma Capital Corporation	4	7
		Interest charged at an average rate of 5.6% per annum. Loans are repayable in monthly instalments terminating in November 2012 and are US dollar-based. The equipment financed is used as security for these loans.
7	11	CSI Latina Arrendamento Mercantil S.A.	2	1
		Interest charged at a rate of 3.3% per annum. Loans are repayable by June 2013 and are BRL-based. The equipment financed is used as security for these loans.
14,355	17,763	Total borrowings (notes 35 and 36)	2,704	1,931
(9,493)	(886)	Current portion of borrowings included in current liabilities	(135)	(1,277)
4,862	16,877	Total long-term borrowings	2,569	654
		Amounts falling due
9,493	886	Within one year	135	1,277
79	50	Between one and two years	8	11
4,543	10,134	Between two and five years	1,542	611
240	6,693	After five years	1,019	32
14,355	17,763	(notes 35 and 36)	2,704	1,931
		Currency
		The currencies in which the borrowings are denominated are as follows:
14,042	16,760	US dollar	2,552	1,889
258	960	SA rand	146	35
55	43	Brazilian real	6	7
14,355	17,763	(notes 35 and 36)	2,704	1,931
		Undrawn facilities
		Undrawn borrowing facilities as at 31 December are as follows:
–	6,242	Syndicated loan ($1bn) – US dollar	950	–
1,859	–	Standard Chartered PLC – US dollar	–	250
929	–	Syndicated loan ($1,150m) – US dollar	–	125
372	329	FirstRand Bank Limited – US dollar	50	50
312	276	Absa Bank Limited – US dollar	42	42
15	–	Nedbank Limited – US dollar	–	2
220	913	FirstRand Bank Limited – SA rand	139	30
185	185	Standard Bank of SA Limited – SA rand	28	25
105	120	Nedbank Limited – SA rand	18	14
30	30	Absa Bank Limited – SA rand	5	4
4,027	8,095		1,232	542
		(1)Mandatory convertible bonds – issued September 2010
–	5,729	Senior unsecured fixed-rate bonds	872	–
–	10	Accrued interest	2	–
–	5,739		874	–
		(2)Rated bonds – issued April 2010
–	6,570	Senior unsecured fixed-rate bonds	1,000	–
–	(110)	Unamortised discount and bond issue costs	(17)	–
–	6,460		983	–
–	77	Accrued interest	12	–
–	6,537		995	–
		(3)3.5% Convertible bonds – issued May 2009
5,450	4,813	Senior unsecured fixed-rate bonds	733	733
(1,033)	(744)	Unamortised discount and bond issue costs	(113)	(139)
4,417	4,069		620	594
16	20	Accrued interest	3	2
4,433	4,089		623	596
		(4)FirstRand Bank Limited loan facility (R1.5bn)
–	700	Drawn down	107	–
–	1	Accrued interest	–	–
–	701		107	–
		(5)Syndicated loan facility ($1bn)
–	329	Drawn down	50	–
–	(79)	Unamortised loan issue costs	(12)	–
–	250		38	–
–	1	Accrued interest	–	–
–	251		38	–
		(6)Syndicated loan facility ($1,150m)
7,621	–	Drawn down in US dollars and Australian dollars	–	1,025
(9)	–	Unamortised loan issue costs	–	(1)
7,612	–		–	1,024
4	–	Accrued interest	–	–
7,616	–		–	1,024
		(7)Standard Chartered term facility
1,860	–	Drawn down	–	250
(103)	–	Unamortised loan issue costs	–	(14)
1,757	–		–	236
15	–	Accrued interest	–	2
1,772	–		–	238

		27 Environmental rehabilitation and other provisions
		Environmental rehabilitation obligations
		Provision for decommissioning
1,525	1,345		Balance at beginning of year	181	161
(51)	86		Change in estimates (1)	11	(6)
(21)	(1)		Transfer to assets held for sale	–	(2)
59	62		Unwinding of decommissioning obligation (note 7)	9	7
(167)	(89)		Translation	12	21
1,345	1,403		Balance at end of year	213	181
		Provision for restoration
2,037	1,764		Balance at beginning of year	237	215
21	259		Charge to income statement	36	3
10	343		Change in estimates (1)	47	1
(13)	–		Transfer to assets held for sale	–	(2)
60	78		Unwinding of restoration obligation (note 7) (2)	11	7
(64)	(45)		Utilised during the year	(6)	(8)
(287)	(179)		Translation	13	21
1,764	2,220		Balance at end of year	338	237
		Other provisions
298	242		Balance at beginning of year	33	32
23	128		Charge to income statement	17	3
3	–		Change in estimates	–	–
(22)	–		Transfer to trade and other payables	–	(3)
1	–		Unwinding of other provisions (note 7)	–	–
(84)	(98)		Utilised during the year	(13)	(10)
23	(22)		Translation	1	11
242	250		Balance at end of year	38	33
		Other provisions comprise the following:
232	245		–provision for labour, environmental, tax and civil court settlements in South America (3)	37	32
10	5		–provision for employee compensation claims in Australasia (4)	1	1
242	250			38	33
3,351	3,873	Total environmental rehabilitation and other provisions		589	451

(1)	The change in estimates relates to changes in laws and regulations governing the protection of the environment and factors relating to rehabilitation estimates and a change in the quantities of material in reserves and corresponding change in the life of mine plan. These provisions are expected to unwind beyond the end of the life of mine.
(2)	Included in the unwinding of the restoration obligation is $2m, R13m (2009: nil) which is recoverable from a third party. The asset is included in non-current debtors.
(3)	Comprises claims filed by former employees in respect of loss of employment, work-related accident injuries and diseases, governmental fiscal claims relating to levies, surcharges and environmental legal disputes. The liability is expected to unwind over the next two-to-five-year period.
(4)	Comprises an estimate of potential workers compensation liability in Australia based on claims with regard to work-related incidents. The liability is expected to be settled in the next three-to-five-year period.

		28 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:
(38)	(1)	AngloGold Ashanti Limited Pension Fund asset		–	(5)
1,095	1,161	Post-retirement medical scheme for AngloGold Ashanti Limited South African employees		176	147
68	78	Other defined benefit plans (1)		12	10
1,125	1,238	Sub-total		188	152
		Transferred to other non-current assets (note 20):
38	1		– AngloGold Ashanti Limited Pension Fund	–	5
16	17		– Post-retirement medical scheme for Rand Refinery employees	3	2
–	1		– Ashanti Retired Staff Pension Plan	–	–
–	1		– Retiree Medical Plan for Nufcor South Africa employees	–	–
1,179	1,258			191	159
			(1)Other defined benefit plans comprise the following:
1	(1)		– Ashanti Retired Staff Pension Plan (asset) liability	–	–
59	74		– Obuasi Mines Staff Pension Scheme	11	9
(16)	(17)		– Post-retirement medical scheme for Rand Refinery employees (asset)	(3)	(2)
17	17		– Retiree Medical Plan for North American employees	3	2
7	6		– Supplemental Employee Retirement Plan (SERP) for North America (USA) Inc. employees	1	1
–	(1)		– Retiree Medical Plan for Nufcor South Africa employees (asset)	–	–
68	78			12	10
		AngloGold Ashanti Limited Pension Fund The plan is evaluated by independent actuaries on an annual basis as at 31 December of each year. The valuation as at 31 December 2010 was completed at the beginning of 2011 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 regulatory valuation is required by legislation every three years. The regulatory valuation effective 31 December 2008 was completed in March 2010. The next regulatory valuation of the Fund will have an effective date no later than 31 December 2011. All South African pension funds are governed by the Pension Funds Act of 1956 as amended. Information with respect to the AngloGold Ashanti Limited Pension Fund is as follows:
		Benefit obligation
1,885	1,998	Balance at beginning of year		269	199
51	50	Current service cost		7	6
137	179	Interest cost		25	16
13	13	Participants’ contributions		2	2
(20)	154	Actuarial loss (gain)		21	(2)
(68)	(203)	Benefits paid		(28)	(8)
–	–	Translation		38	56
1,998	2,191	Balance at end of year		334	269
		Plan assets
1,785	2,036	Balance at beginning of year		274	188
165	209	Expected return on plan assets		29	20
99	81	Actuarial gain		11	12
42	56	Company contributions		8	5
13	13	Participants’ contributions		2	2
(68)	(203)	Benefits paid		(28)	(8)
–	–	Translation		38	55
2,036	2,192	Fair value of plan assets at end of year		334	274
38	1	Funded status at end of year		–	5
38	1	Net amount recognised		–	5
		Components of net periodic benefit cost
137	179	Interest cost		25	16
51	50	Current service cost		7	6
(165)	(209)	Expected return on assets		(29)	(20)
23	20	Net periodic benefit cost		3	2
		Assumptions
		Assumptions used to determine benefit obligations at
		the end of the year are as follows:
		Discount rate		8.50%	9.25%
		Rate of compensation increase (1)		7.25%	7.50%
		Expected long-term return on plan assets (2)		9.99%	10.63%
		Pension increase		4.73%	4.95%
		(1) The short-term compensation rate increase is 7.5% (2009: 7%) and the long-term compensation rate increase is 7.25% (2009: 7.5%). (2) The expected long-term return on plan assets is determined using the after tax yields of the various asset classes as a guide.
		Plan assets
		AngloGold Ashanti Limited’s pension plan asset allocations at the end of the year, by asset category, are as follows:
		Equity securities		60%	60%
		Debt securities		36%	32%
		Other		4%	8%
				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	2010		2009
Related parties
Investments held in related parties are summarised as follows:
Equity securities
AngloGold Ashanti Limited	119,758	1.8%	6	296,410	4.5%	12
Other investments exceeding 5% of total plan assets
Equities
Sasol Limited	–		–	424,680	6.2%	17
SABMiller Plc	–		–	759,600	8.0%	22
Bonds
IFM Corporate Bond Unit Trust	267,975,059	12.2%	41	158,630,977	7.3%	20
Allan Gray Orbis Global Equity Fund	243,210	9.0%	30	312,715	13.0%	36
			71			95
SA Rands million
Related parties
Investments held in related parties
are summarised as follows:
Equity securities
AngloGold Ashanti Limited	119,758	1.8%	39	296,410	4.5%	91
Other investments exceeding 5% of total plan assets
Equities
Sasol Limited	–		–	424,680	6.2%	127
SABMiller Plc	–		–	759,600	8.0%	164
Bonds
IFM Corporate Bond Unit Trust	267,975,059	12.2%	268	158,630,977	7.3%	148
Allan Gray Orbis Global
Equity Fund	243,210	9.0%	196	312,715	13.0%	264
			464			703

Cash flows
Contributions
The company expects to contribute $7m, R44m (2010: $6m, R41m) to its pension plan in 2011.

2009	2010	Figures in million	2010	2009
SA Rands			US Dollars
		Estimated future benefit payments
		The following pension benefit payments, which reflect the expected future service, as appropriate, are expected to be paid:
	167	2011	25
	167	2012	25
	167	2013	25
	168	2014	26
	169	2015	26
	1,353	Thereafter	207
		Post-retirement medical scheme for AngloGold Ashanti Limited South African employees The provision for post-retirement medical funding represents the provision for health care benefits for employees and retired employees and their registered dependants. The post-retirement benefit costs are assessed in accordance with the advice of independent professionally qualified actuaries. The actuarial method used is the projected unit credit funding method. This scheme is unfunded. The last valuation was performedas at 31 December 2010. Information with respect to the defined benefit liability is as follows:
		Benefit obligation
1,070	1,095	Balance at beginning of year	147	113
4	6	Current service cost	1	1
75	97	Interest cost	13	9
(86)	(104)	Benefits paid	(14)	(10)
32	67	Actuarial loss	9	4
–	–	Translation	20	30
1,095	1,161	Balance at end of year	176	147
(1,095)	(1,161)	Unfunded status at end of year	(176)	(147)
(1,095)	(1,161)	Net amount recognised	(176)	(147)
		Components of net periodic benefit cost
4	6	Current service cost	1	1
75	97	Interest cost	13	9
79	103	Net periodic benefit cost	14	10
		Assumptions
		Assumptions used to determine benefit obligations at the end of the year are as follows:
		Discount rate	8.50%	9.25%
		Expected increase in health care costs	7.60%	7.00%
		Assumed health care cost trend rates at 31 December:
		Health care cost trend assumed for next year	7.60%	7.00%
		Rate to which the cost trend is assumed to decline (the ultimate trend rate)	7.60%	7.00%
	1% point increase	Assumed health care cost trend rates have a significant effect on the amounts reported for health care plans. A 1% point change in assumed health care cost trend rates would have the following effect:	1% point increase
	13	Effect on total service and interest cost	2
	142	Effect on post-retirement benefit obligation	22
	1% point decrease		1% point decrease
	(11)	Effect on total service and interest cost	(2)
	(120)	Effect on post-retirement benefit obligation	(18)
		Cash flows
		Contributions AngloGold Ashanti Limited expects to contribute $14m, R95m (2010: $14m, R104m) to the post-retirement medical plan in 2011.
		Estimated future benefit payments The following medical benefit payments, which reflect the expected future service, as appropriate, are expected to be paid:
	95	2011	14
	105	2012	16
	107	2013	16
	108	2014	16
	107	2015	16
	639	Thereafter	98
		Other defined benefit plans Other defined benefit plans include the Ashanti Retired Staff Pension Plan, the Obuasi Mines Staff Pension Scheme, the Post-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 2010 has been aggregated in the tables of change in benefit obligations, change in plan assets and components of net periodic benefit cost and is as follows:
		Benefit obligation
166	131	Balance at beginning of year	18	17
6	6	Interest cost	1	–
(2)	35	Actuarial loss (gain)	5	–
(14)	(15)	Benefits paid	(2)	(1)
(25)	(14)	Translation	–	2
131	143	Balance at end of year	22	18
		Plan assets
60	63	Fair value of plan assets at beginning of year	8	6
4	5	Expected return on plan assets	1	–
3	3	Actuarial gain	1	–
(3)	(4)	Benefits paid	(1)	–
(1)	(2)	Translation	1	2
63	65	Fair value of plan assets at end of year	10	8
(68)	(78)	Net amount recognised analysed as follows:	(12)	(10)
15	19	– funded plans	3	2
(83)	(97)	– unfunded plans	(15)	(12)
		Components of net periodic benefit cost
6	6	Interest cost	1	–
(4)	(5)	Expected return on plan assets	(1)	–
2	1	Net periodic benefit cost	–	–
		Cash flows The other retirement defined benefit plans are all closed to new members and current members are either retired or deferred members. The companies do not make contributions to these plans.
		Estimated future benefit payments
		The following pension benefit payments, which reflect the expected future service, as appropriate, are expected to be paid:
	12	2011	2
	11	2012	2
	11	2013	2
	11	2014	2
	11	2015	2
	87	Thereafter	12

Five-year defined benefit plan disclosure <>>

Figures in million	2010	2009	2008	2007	2006
US Dollars
AngloGold Ashanti Limited Pension Fund
Defined benefit obligation	334	269	199	257	224
Plan assets	(334)	(274)	(188)	(293)	(262)
Net (funded) unfunded	–	(5)	11	(36)	(38)
Experience adjustments on plan liabilities	–	3	17	3	14
Experience adjustments on plan assets	(11)	(12)	33	1	(40)
Post-retirement medical scheme for AngloGold Ashanti Limited South African employees
Defined benefit obligation	176	147	113	165	156
Unfunded	176	147	113	165	156
Experience adjustments on plan liabilities	1	16	6	(2)	(8)
Other defined benefit plans
Defined benefit obligation	22	18	17	18	19
Plan assets	(10)	(8)	(6)	(9)	(8)
Unfunded	12	10	11	9	11
Experience adjustments on plan liabilities	5	–	1	1	–
Experience adjustments on plan assets	–	–	1	–	–
SA Rands
AngloGold Ashanti Limited Pension Fund
Defined benefit obligation	2,191	1,998	1,885	1,753	1,568
Plan assets	(2,192)	(2,036)	(1,785)	(1,997)	(1,835)
Net (funded) unfunded	(1)	(38)	100	(244)	(267)
Experience adjustments on plan liabilities	3	24	138	23	95
Experience adjustments on plan assets	(81)	(99)	276	6	(272)
Post-retirement medical scheme for AngloGold Ashanti Limited South African employees
Defined benefit obligation	1,161	1,095	1,070	1,121	1,094
Unfunded	1,161	1,095	1,070	1,121	1,094
Experience adjustments on plan liabilities	6	134	46	(13)	(57)
Other defined benefit plans
Defined benefit obligation	143	131	166	134	132
Plan assets	(65)	(63)	(60)	(67)	(63)
Unfunded	78	68	106	67	69
Experience adjustments on plan liabilities	31	(2)	10	5	3
Experience adjustments on plan assets	(3)	(3)	13	(2)	–

Defined contribution funds

Contributions to the various retirement schemes are fully expensed during the year in which they are made and the cost of contributing to retirement benefits for the year amounted to $64m, R471m (2009: $53m, R447m).

Australia (Sunrise Dam)

The region contributes to various approved superannuation funds 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. The contributions by the operation are legally enforceable to the extent required by the Superannuation Guarantee legislation and relevant employment agreements. The cost to the group of all these contributions amounted to $4m, R26m (2009: $4m, R34m).

Ghana and Guinea (Iduapriem, Obuasi and Siguiri)

AngloGold Ashanti Limited’s mines in Ghana and Guinea contribute to provident plans for their employees which are defined contribution plans. The funds are administered by Boards of Trustees and invest mainly in Ghana and Guinea government treasury instruments, fixed term deposits and other investments. The cost of these contributions was $5m, R38m (2009: $4m, R34m).

Namibia (Navachab)

Navachab employees are members of a defined contribution provident fund. The fund is administered by the Old Mutual Life Assurance Company (Namibia) Limited. Both the company and the employees contribute to this fund. The cost to the group of all these contributions amounted to $1m, R11m (2009: $1m, R10m).

North America (Cripple Creek & Victor)

AngloGold Ashanti Limited US sponsors a 401(k) savings plan whereby employees may contribute up to 60% of their salary, of which up to 5% is matched at a rate of 150% by AngloGold Ashanti Limited USA. AngloGold Ashanti Limited USA’s contributions were $2m, R14m (2009: $2m, R14m).

South Africa (Great Noligwa, Kopanang, Moab Khotsong, Mponeng, Savuka 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 $48m, R353m (2009: $41m, R344m).

South America (AngloGold Ashanti Córrego do Sitío Mineração, Cerro Vanguardia and Serra Grande)

AngloGold Ashanti in South America operates defined contribution arrangements for its employees. These arrangements are funded by the operations (basic plan) and operations/employees (optional supplementary plan). A PGBL (Plano Gerador de Beneficio Livre) fund, similar to the American 401(k) type of plan was started in December 2001. Administered by Bradesco Previdencia e Seguros (which assumes the risk for any eventual actuarial liabilities), this is the only private pension plan sponsored by the group. Employees in Argentina contribute 11% of their salaries towards the Argentinean pension fund. The company makes a contribution of 17% of an employee’s salary on behalf of employees to the same fund. Contributions amounted to $4m, R29m (2009: $1m, R11m).

Tanzania (Geita)

Geita does not have a retirement scheme for employees. Tanzanian nationals contribute to the National Social Security Fund (NSSF) or the Parastatal Provident Fund (PPF), depending on the employee’s choice, and the company also makes a contribution on the employee’s behalf to the same fund. On leaving the group, employees may withdraw their contribution from the fund. From July 2005, the company has set up a supplemental provident fund which is administered by the PPF with membership available to permanent national employees on a voluntary basis. The company makes no contribution towards any retirement schemes for contracted expatriate employees. The company contributes to the NSSF on behalf of expatriate employees. On termination of employment the company may apply for a refund of contributions from the NSSF.

2009	2010	Figures in million		2010	2009
SA Rands				US Dollars
		29 Deferred taxation
		Deferred taxation relating to temporary differences is made up as follows:
		Liabilities
9,883	9,137	Tangible assets	1,391	1,329
85	67	Inventories	10	11
9	–	Derivatives	–	1
26	29	Other	4	4
10,003	9,233		1,405	1,345
		Assets
1,326	1,672	Provisions	254	178
2,488	7	Derivatives	1	335
998	1,739	Tax losses	264	134
43	36	Other	6	6
4,855	3,454		525	653
5,148	5,779	Net deferred taxation liability	880	692
		Included in the statement of financial position as follows:
451	131	Deferred tax assets	20	61
5,599	5,910	Deferred tax liabilities	900	753
5,148	5,779	Net deferred taxation liability	880	692
		The movement on the deferred tax balance is as follows:
5,363	5,148	Balance at beginning of year	692	567
304	39	Taxation on items included in other comprehensive income	5	40
(166)	923	Income statement movement	129	(17)
(353)	(331)	Translation	54	102
5,148	5,779	Balance at end of year	880	692

No proision has been made for South African income tax or foreign tax that may result from future remittances of undistributed earnings of foreign subsidiaries or foreign corporate joint ventures because it is expected that such earnings will not be distributed as a dividend in the foreseeable future. These foreign subsidiaries reinvest the undistributed earnings into future capital expansion projects, maintenance capital and ongoing working capital funding requirements. Unrecognised taxable temporary differences pertaining to undistributed earnings totalled $532m, R3,492m (2009: $409m, R3,045m).

		30 Trade, other payables and deferred income
		Non-current
58	58	Accruals	9	8
42	44	Deferred income	7	5
8	8	Other payables	1	1
108	110		17	14
		Current
2,531	2,653	Trade payables	404	340
1,569	1,749	Accruals	266	211
93	69	Deferred income	10	13
139	159	Other payables	25	18
4,332	4,630		705	582
4,440	4,740	Total trade, other payables and deferred income	722	596
		Current trade and other payables are non-interest bearing and are normally settled within 60 days.

		31 Taxation
1,033	1,059	Balance at beginning of year	142	109
(1,232)	(1,371)	Payments during the year	(188)	(147)
1,338	1,095	Provision during the year	147	164
3	6	Transfer to recoverable tax in non-current trade and other receivables and assets held for sale	1	–
(83)	(83)	Translation	5	16
1,059	706	Balance at end of year	107	142
		Included in the statement of financial position as follows:
127	176	Taxation asset included in trade and other receivables	27	17
1,186	882	Taxation liability	134	159
1,059	706		107	142
		32 Cash generated from operations
(1,173)	3,036	Profit (loss) before taxation	405	(121)
		Adjusted for:
14,417	2,946	Movement on non-hedge derivatives and other commodity contracts	408	1,787
4,615	5,022	Amortisation of tangible assets (notes 4, 9 and 15)	690	555
1,146	1,203	Finance costs and unwinding of obligations (note 7)	166	139
(47)	535	Environmental rehabilitation and other expenditure	78	(6)
(5,148)	1,076	Special items	152	(683)
18	18	Amortisation of intangible assets (notes 4 and 16)	2	2
(467)	921	Deferred stripping	125	(48)
249	(39)	Fair value adjustment on option component of convertible bonds	1	33
–	382	Fair value loss on mandatory convertible bonds	55	–
(444)	(311)	Interest received (note 3)	(43)	(54)
(785)	(467)	Share of equity accounted investments’ profit (note 8)	(63)	(94)
(853)	250	Other non-cash movements	37	(115)
(951)	(1,537)	Movements in working capital	(299)	(50)
10,577	13,035		1,714	1,345
		Movements in working capital:
634	(667)	(Increase) decrease in inventories	(236)	(155)
106	(781)	(Increase) decrease in trade and other receivables	(142)	(45)
(1,691)	(89)	Increase (decrease) in trade and other payables	79	150
(951)	(1,537)		(299)	(50)

		33 Related parties
		Material related party transactions were as follows (not attributable):
		Sales and services rendered to related parties
155	137	Joint ventures	19	19
(1)	(5)	Associates	(1)	–
		Purchases and services acquired from related parties
16	20	Associates	3	2
		Outstanding balances arising from sale of goods and services and other loans due by related parties
34	56	Joint ventures	8	5
59	17	Associates	3	8
		Amounts owed to/due by related parties are unsecured and non-interest bearing. Terms relating to associate and joint venture related parties are detailed in note 17. Details of guarantees to related parties are included in note 34.
		Directors and other key management personnel
		Details relating to directors’ emoluments and shareholdings in the company are disclosed in the Remuneration and Directors’ reports. (Detailed from page 214).
		Compensation to key management personnel includes the following:
92	97	– short-term employee benefits	13	11
13	12	– post-employment benefits	2	1
23	9	– share-based payments	1	3
128	118		16	15
		34 Contractual commitments and contingencies
		Operating leases
		At 31 December 2010, the group was committed to making the following payments in respect of operating leases for amongst others, the hire of plant and equipment and land and buildings. Certain contracts contain renewal options and escalation clauses for various periods of time.
		Expiry:
70	116	– within one year	18	9
13	48	– between one and two years	7	2
28	12	– between two and five years	2	4
1	3	– after five years	–	–
112	179		27	15
		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	Figures in million	Minimum payments	Present value of payments
2010			2010
SA Rands			US Dollars
37	68	Within one year	10	6
118	222	After one year but not more than five years	34	17
228	314	More than five years	48	35
383	604	Total minimum lease payments	92	58
–	(221)	Amounts representing finance charges	(34)	–
383	383	Present value of minimum lease payments	58	58
2009			2009
40	73	Within one year	10	5
149	262	After one year but not more than five years	35	20
241	350	More than five years	48	34
430	685	Total minimum lease payments	93	59
–	(255)	Amounts representing finance charges	(34)	–
430	430	Present value of minimum lease payments	59	59
2009	2010	Figures in million	2010	2009
SA Rands			US Dollars
		Capital commitments
		Acquisition of tangible assets
976	1,156	Contracted for	176	131
12,515	6,494	Not contracted for	988	1,683
13,491	7,650	Authorised by the directors	1,164	1,814
		Allocated to:
		Project capital
1,965	2,841	– within one year	433	264
4,419	702	– thereafter	107	594
6,384	3,543		540	858
		Stay-in-business capital
5,244	2,664	– within one year	404	705
1,863	1,443	– thereafter	220	251
7,107	4,107		624	956
42	81	Share of underlying capital commitments of joint ventures	12	6
		Purchase obligations
		Contracted for
2,573	2,614	– within one year	398	346
713	922	– thereafter	140	96
3,286	3,536		538	442

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 2010

The group had the following forward pricing uranium commitments:

Year	000lbs (1)	Average contracted price ($/lbs) (2)
2011	494	33.97
2012	494	34.35
2013	494	34.74

Great Noligwa, Kopanang and Moab Khotsong produced 1.46m pounds of uranium oxide in 2010 (2009: 1.44m pounds).

(1)	Certain contracts allow the buyer to adjust the purchase quantity within a specified range.
(2)	Certain contracts are subject to price adjustment mechanisms. In these cases the price disclosed indicates the previous periodic price reset.

In addition, the group had gold sale commitments as disclosed in note 35.

Liabilities included in the statement of financial position	Guaran- tees and contin- gencies	Liabilities included in the statement of financial position	Guaran- tees and contin- gencies	Figures in million	Guaran- tees and contin- gencies	Liabilities included in the statement of financial position	Guaran- tees and contin- gencies	Liabilities included in the statement of financial position
2009		2010			2010		2009
SA Rands					US Dollars
				Contingent liabilities
–	–	–	–	Groundwater pollution (1)	–	–	–	–
–	–	–	–	Deep groundwater pollution – South Africa (2)	–	–	–	–
–	560	–	587	Sales tax on gold deliveries – Brazil (3)	89	–	76	–
–	191	–	219	Other tax disputes – Brazil (4)	34	–	25	–
–	67	–	70	Indirect taxes – Ghana (5)	11	–	9	–
–	–	–	–	ODMWA litigation (6)	–	–	–	–
				Contingent assets
–	–	–	–	Royalty – Boddington Gold Mine (7)	–	–	–	–
–	–	–	–	Royalty – Tau Lekoa Gold Mine (8)	–	–	–	–
				Guarantees
				Financial guarantees
–	100	–	100	Oro Group (Pty) Limited (9)	15	–	13	–
3,293	3,293	–	–	Hedging guarantees Ashanti Treasury Services (10) (13)	–	–	443	443
3,213	3,213	–	–	Geita Management Company (11) (13)	–	–	443	443
1,071	1,071	–	–	AngloGold South America (12) (13)	–	–	144	144
1,679	1,679	–	–	AngloGold USA Trading Company (12) (13)	–	–	226	226
–	–	–	–	Cerro Vanguardia S.A. (12) (13)	–	–	–	–
9,256	10,174	–	976		149	–	1,368	1,245

Contingent liabilities
(1)	AngloGold Ashanti has identified groundwater contamination plumes at certain of its operations, which have occurred primarily as a result of seepage from mine residue stockpiles. Numerous scientific, technical and legal studies have been undertaken to assist in determining the magnitude of the contamination and to find sustainable remediation solutions. The group has instituted processes to reduce future potential seepage and it has been demonstrated that Monitored Natural Attenuation (MNA) by the existing environment will contribute to improvement in some instances. Furthermore, literature reviews, field trials and base line modelling techniques suggest, but are not yet proven, that the use of phyto-technologies can address the soil and groundwater contamination. Subject to the completion of trials and the technology being a proven remediation technique, no reliable estimate can be made for the obligation.
(2)	The company has identified a flooding and future pollution risk posed by deep groundwater in the Klerksdorp and Far West Rand gold fields. Various studies have been undertaken by AngloGold Ashanti Limited since 1999. Due to the interconnected nature of mining operations, any proposed solution needs to be a combined one supported by all the mines located in these gold fields. As a result, the Department of Mineral Resources and affected mining companies are involved in the development of a “Regional Mine Closure Strategy”. In view of the limitation of current information for the accurate estimation of a liability, no reliable estimate can be made for the obligation.
(3)	Mineração Serra Grande S.A. (MSG), received two tax assessments from the State of Goiás related to payments of sales taxes on gold deliveries for export. AngloGold Ashanti Córrego do Sitío Mineração S.A. manages the operation and its attributable share of the first assessment is approximately $55m, R363m (2009: $47m, R347m). In November 2006, the administrative council’s second chamber ruled in favour of MSG and fully cancelled the tax liability related to the first period.
	The State of Goiás has appealed to the full board of the State of Goiás tax administrative council. The second assessment was issued by the State of Goiás in October 2006 on the same grounds as the first assessment, and the company’s attributable share of the assessment is approximately $34m, R224m (2009: $29m, R213m). The company believes both assessments are in violation of federal legislation on sales taxes.
(4)	MSG received a tax assessment in October 2003 from the State of Minas Gerais related to sales taxes on gold. The tax administrators rejected the company’s appeal against the assessment. The company is now appealing the dismissal of the case. The company’s attributable share of the assessment is approximately $10m, R64m (2009: $8m, R66m). AngloGold Ashanti Limited subsidiaries in Brazil are involved in various disputes with tax authorities. These disputes involve federal tax assessments including income tax, royalties, social contributions and annual property tax. The amount involved is approximately $24m, R155m (2009: $17m, R125m).
(5)	AngloGold Ashanti (Ghana) Limited received a tax assessment for $11m, R70m (2009: $9m, R67m) during September 2009 in respect of the 2006, 2007 and 2008 tax years, following an audit by the tax authorities related to indirect taxes on various items. Management is of the opinion that the indirect taxes are not payable and the company has lodged an objection.
(6)	The case of Mr Thembekile Mankayi was heard in the High Court of South Africa in June 2008, and an appeal heard in the Supreme Court of Appeals in 2010. In both instances judgement was awarded in favour of AngloGold Ashanti Limited. A further appeal that was lodged by Mr Mankayi was heard in the Constitutional Court in 2010. Judgement in the Constitutional Court was handed down on 3 March 2011.
	Following the judgement, Mr Mankayi’s executor may proceed with his case in the High Court. This will comprise, amongst others, providing evidence showing that Mr Mankayi contracted silicosis as a result of negligent conduct on the part of AngloGold Ashanti.
	The company is still studying the details of the Constitutional Court judgement and will defend the case and any subsequent claims on their merits. Should other individuals or groups lodge similar claims, these too would be defended by the company and adjudicated by the Courts on their merits. In view of the limitation of current information for the accurate estimation of a possible liability, no reliable estimate can be made for this possible obligation.
Contingent assets
(7)	As a result of the sale of the interest in the Boddington Gold Mine joint venture during 2009, the group is entitled to receive a royalty on any gold recovered or produced by the Boddington Gold Mine, where the gold price is in excess of Boddington Gold Mine’s cash cost plus $600/oz. The royalty commenced on 1 July 2010 and is capped at a total amount of $100m, R657m. Royalties of $4m, R30m were received during the year.
(8)	As a result of the sale of the interest in the Tau Lekoa Gold Mine during 2010, the group is entitled to receive a royalty on the production of a total of 1.5Moz by the Tau Lekoa Gold Mine and in the event that the average monthly rand price of gold exceeds R180,000/kg (subject to inflation adjustment). Where the average monthly rand price of gold does not exceed R180,000/kg (subject to inflation adjustment), the ounces produced in that quarter do not count towards the total 1.5Moz upon which the royalty is payable. The royalty will be determined at 3% of the net revenue (being gross revenue less state royalties) generated by the Tau Lekoa assets. Royalties of $3m, R21m were received during the year.
Guarantees
(9)	The company has provided sureties in favour of a lender on a gold loan facility with its affiliate Oro Group (Pty) Limited and one of its subsidiaries to a maximum value of $15m, R100m (2009: $13m, R100m). The suretyship agreements have a termination notice period of 90 days.
(10)	The group, together with its wholly owned subsidiary, AngloGold Ashanti Holdings plc, has provided guarantees to several counterparty banks for the hedging commitments of its wholly owned subsidiary Ashanti Treasury Services Limited (ATS).
(11)	The group and its wholly owned subsidiary, AngloGold Ashanti Holdings plc, have issued hedging guarantees to several counterparty banks in which they have guaranteed the due performance by the Geita Management Company Limited (GMC) of its obligations under or pursuant to the hedging agreements entered into by GMC, and to the payment of all money owing or incurred by GMC as and when due.
(12)	The group has issued gold delivery guarantees to several counterparty banks in which it guarantees the due performance of its subsidiaries AngloGold USA Trading Company, AngloGold South America Limited and Cerro Vanguardia S.A. under their respective gold hedging agreements.
(13)	At 31 December 2010, the group had no open gold hedge contracts.

35 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 speculative 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, counterparty limits and controlling and reporting structures.

Managing risk in the group

Risk management activities within the group are the ultimate responsibility of the board of directors. The chief executive officer is responsible to the board of directors for the design, implementation and monitoring of the risk management plan. The newly formed Risk and Information Integrity Committee is responsible for overseeing risk management plans and systems, and the Audit and Corporate Governance Committee oversees financial risks which include a review of treasury activities and the group’s counterparties.

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 counterparties; and
• ensuring that all contracts and agreements related to risk management activities are co-ordinated, 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, which arise from sales or purchases by an operating unit in currencies other than the unit’s functional currency. The gold market is predominately priced in US dollars which exposes the group to the risk that fluctuations in the SA rand/US dollar, Brazilian real/US dollar, Argentinean peso/US dollar and Australian dollar/US dollar exchange rates may also have an adverse effect on current or future earnings. The group is also exposed to certain by-product commodity price risk.

During the year, the group had utilised derivatives as part of its hedging of these risks. In order to provide financial exposure to the rising spot price of gold and the potential for enhanced cash-flow generation the group completed its final tranche of the hedge buy-back programme and settled all forward gold and foreign exchange contracts that had been used by the group in the past to manage those risks. At year-end there were no net forward sales contracts (2009: 571kg), net call options sold (2009: 120,594kg) and net put options sold (2009: 27,071kg) outstanding.

Cash flow hedges

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

The group does not have any cash flow hedge contracts relating to product sales as at 31 December 2010. Cash flow hedge losses pertaining to capital expenditure of $3m, R21m as at 31 December 2010 (2009: $4m, R27m) are expected to be reclassified from accumulated other comprehensive income and recognised as an adjustment to depreciation expense until 2017.

The gains and losses on ineffective portions of such derivatives are recognised in the income statement. During the year to 31 December 2010, a loss of nil (2009: $5m, R40m) was recognised on non-hedge derivatives and other commodity contracts 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	2010	2009
US Dollars
Loss on hedge buy-back costs	(2,698)	(797)
(Loss) gain on realised non-hedge derivatives and other commodity contracts	(277)	254
Gain (loss) on unrealised non-hedge derivatives and other commodity contracts	2,273	(990)
Loss on non-hedge derivatives and other commodity contracts per the income statement	(702)	(1,533)
SA Rands
Loss on hedge buy-back costs	(18,954)	(6,315)
(Loss) gain on realised non-hedge derivatives and other commodity contracts	(2,073)	2,476
Gain (loss) on unrealised non-hedge derivatives and other commodity contracts	15,891	(8,095)
Loss on non-hedge derivatives and other commodity contracts per the income statement	(5,136)	(11,934)

The loss on non-hedge derivatives and other commodity contracts was $702m, R5,136m (2009: $1,533m, R11,934m). This is as a result of the accelerated hedge book settlement, normal realised losses on non-hedge derivatives and the revaluation of non-hedge derivatives resulting from changes in the prevailing spot gold price, exchange rates, interest rates and volatilities. In 2009, forward gold contracts previously qualifying for the normal sale exemption were included in the statement of financial position, with a change in fair value recognised in the income statement as a non-hedge derivative loss of $556m, R4,144m.

During 2010, the group eliminated its gold hedge book resulting in full exposure to the prevailing gold price. The loss on scheduled hedge book maturities during 2010 was $277m, R2,073m. The loss on non-hedge derivatives includes a realised loss of $2,698m, R18,954m, relating to the final tranche of the accelerated hedge buy-back of approximately 3Moz that commenced in September 2010 and was concluded on 7 October 2010 at an average price of $1,300/oz. The realised loss mainly consists of accelerated cash settlement of non-hedge derivative positions of $2,611m, R18,333m. The final phase of hedge restructuring was funded with proceeds from the equity offering and the mandatory convertible bonds issued in September, as well as cash from internal sources and debt facilities.

During 2009, the company embarked on a hedge buy-back that resulted in the accelerated settlement of both non-hedge, forward and option gold contracts qualifying for the normal sale exemption (which permits the group to not record such amounts in its financial statements until the maturity date of the contract) under which the group had committed to deliver a specified quantity of gold at a future date in exchange for an agreed price. As a result of the accelerated settlement of the normal sale exempted contracts, all remaining contracts scheduled to mature in later periods had 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 were accounted for as non-hedge derivatives and recorded on the statement of financial position at fair value with fair value changes recognised in the income statement.

The total realised loss before taxation as a result of the hedge elimination (hedge buy-back) effected during the year was $2,698m, R18,954m (2009: $797m, R6,315m), of which $2,293m, R16,077m (2009: $217m, R1,719m) was due to the accelerated settlement of non-hedge derivatives and $405m, R2,877m (2009: $580m, R4,596m) was due to the accelerated settlement of forward gold contracts previously qualifying for the normal sale exemption.

Net open hedge position as at 31 December 2010

As at 31 December 2010, AngloGold Ashanti had no outstanding commitments against future production as a result of the elimination of the hedge book. At 31 December 2009, the marked-to-market value of all derivatives, irrespective of accounting designation, making up the hedge position was negative $2.18bn, negative R16.18bn based on a gold price of $1,102 per ounce, exchange rates of $1 = R7.4350 and A$1 = $0.8967 and the market interest rates and volatilities prevailing at that date.

The table below reflects the hedge position as at 31 December 2010 and includes the effect of all accelerated non-hedge settlements undertaken during the year.

Summary: All open contracts in the group’s commodity hedge position as at 31 December 2010

Year	2010	2009
US Dollars/Gold
Forward contracts
Amount (kg)	–	(1,295) (1)
$/oz	–	$5,457 (1)
Put options sold
Amount (kg)	–	25,827
$/oz	–	$764
Call options sold
Amount (kg)	–	122,460
$/oz	–	$605
SA Rands/Gold
Rand/Gold
Forward contracts
Amount (kg)	–	(1,244) (1)
R/kg	–	R232,225 (1)
Put options sold
Amount (kg)	–	1,244
R/kg	–	R240,354
Call options sold
Amount (kg)	–	1,244
R/kg	–	R262,862
Australian Dollars/Gold
Forward contracts
Amount (kg)	–	3,110
A$/oz	–	A$646
Call options purchased
Amount (kg)	–	3,110
A$/oz	–	A$712
Total net gold
Delta (kg)	–	(108,482) (2)
Delta (oz)	–	(3,487,779) (2)

The open delta hedge position of the group at 31 December 2010 was nil (31 December 2009: 3.49Moz or 108t).

(1)	Represents a net long gold position and net short US dollars/rands position resulting from both forward sales and purchases for the period.
(2)	The delta of the hedge position indicated above, is the equivalent gold position that would have the same marked-to-market sensitivity for a small change in the gold price. This is calculated using the Black-Scholes option formula with the ruling market prices, interest rates and volatilities as at 31 December 2009.

As at 31 December 2010, the group had no open forward exchange or option contracts in its currency and gold hedge position.

The mix of hedging instruments, the volume of production hedged and the tenor of the hedge 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 counterparties are financial and banking institutions and their credit ratings are regularly monitored.

The group has sufficient undrawn borrowing facilities available to fund working capital requirements (notes 26 and 36).

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

			Between		Between
	Within one year		one and two years		two and five years		After five years
	Million	Effective rate %	Million	Effective rate %	Million	Effective rate %	Million	Effective rate %	Million
2010
Financial guarantees (3)	15		–		–		–		15
Borrowings	306		142		1,792		1,695		3,935
– In USD	190	5.2	136	5.2	1,775	5.2	1,647	5.7	3,748
– ZAR in USD equivalent	114	7.3	4	9.8	15	9.8	48	9.8	181
– BRL in USD equivalent	2	5.3	2	5.7	2	6.0	–		6
Trade and other payables	703		–		–		–		703
2009
Financial guarantees (3)	–		–		–		13		13
Borrowings	1,332		41		826		47		2,246
– In USD	1,327	2.3	35	3.5	810	3.5	–		2,172
– ZAR in USD equivalent	3	9.8	4	9.8	12	9.8	47	9.8	66
– BRL in USD equivalent	2	6.1	2	6.0	4	6.0	–		8
Trade and other payables	573		–		–		–		573

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

The contractual maturities of financial liabilities in SA rands can be calculated by applying the exchange rate in US dollars of $1 = R6.5701 at 31 December 2010 (2009: $1 = R7.4350).

Derivative financial assets and (liabilities)

At 31 December 2010, the group had no open hedge and non-hedge contracts as a result of the hedge book elimination. The following were the undiscounted forecast principal cash flows arising from all derivative contracts included in the statement of financial position (cash flow hedges and non-hedges) as at 31 December 2009 based on scheduled maturity dates:

Figures in million	Within one year	Between one and two years	Between two and five years	After five years	Total
US Dollars
At 31 December 2009
Cash inflows from assets	277	46	13	–	336
Cash outflows from liabilities	(722)	(543)	(1,468)	(18)	(2,751)
Net cash outflows	(445)	(497)	(1,455)	(18)	(2,415)
SA Rands
At 31 December 2009
Cash inflows from assets	2,068	339	93	–	2,500
Cash outflows from liabilities	(5,367)	(4,038)	(10,915)	(136)	(20,456)
Net cash outflows	(3,299)	(3,699)	(10,822)	(136)	(17,956)

Credit risk

Credit risk arises from the risk that a counterparty may default or not meet its obligations timeously. The group minimises credit risk by ensuring that credit risk is spread over a number of counterparties. These counterparties are financial and banking institutions. Counterparty credit limits and exposures are reviewed by the Executive Committee. Where possible, management ensures that netting agreements are in place. No set-off is applied to the statement of financial position due to the different maturity profiles of assets and liabilities. The combined maximum credit risk exposure at the reporting date by class of derivative financial instrument is $1m, R6m (2009: $335m, R2,490m) on a contract-by-contract basis.

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

Figures in million	2010	2009	2010	2009
	US Dollars		SA Rands
Commodity option contracts	–	47	–	351
Forward sale commodity contracts	–	283	–	2,099
Warrants on shares	1	5	6	40
Total derivatives	1	335	6	2,490
Other investments	104	60	682	447
Other non-current assets	7	1	43	12
Trade and other receivables	120	80	790	599
Cash restricted for use (note 22)	43	65	283	481
Cash and cash equivalents (note 23)	575	1,100	3,776	8,176
Total financial assets	850	1,641	5,580	12,205
Financial guarantees	15	13	100	100
Total	865	1,654	5,680	12,305

In addition, the group has also guaranteed the hedging commitments of several subsidiary companies as disclosed in note 34.

Credit risk exposure of all derivatives netted by counterparties amounts to nil (2009: $104m, R773m). Trade and other receivables that are past due but not impaired totalled $85m, R556m (2009: $45m, R337m). Trade and other receivables that are impaired totalled $8m, R21m (2009: $32m, R237m) and other investments that are impaired totalled $2m, R16m (2009: nil). No other financial assets are past due but not impaired.

Trade receivables mainly comprise banking institutions purchasing gold bullion. Normal market settlement terms are two working days. No impairment was recognised as the principal receivables 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 counterparties.

Fair value of financial instruments

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

Type of instrument

Figures in million	Carrying amount	Fair value	Carrying amount	Fair value
US Dollars	2010		2009
Financial assets
Other investments (note 18)	237	229	175	171
Other non-current assets	7	7	1	1
Trade and other receivables	120	120	80	80
Cash restricted for use (note 22)	43	43	65	65
Cash and cash equivalents (note 23)	575	575	1,100	1,100
Derivatives	1	1	335	335
Financial liabilities
Borrowings (note 26)	2,704	3,054	1,931	2,153
Trade and other payables	703	702	573	572
Derivatives	176	176	2,701	2,701
SA Rands
Financial assets
Other investments (note 18)	1,555	1,507	1,302	1,279
Other non-current assets	43	43	12	13
Trade and other receivables	790	790	599	599
Cash restricted for use (note 22)	283	283	481	481
Cash and cash equivalents (note 23)	3,776	3,776	8,176	8,176
Derivatives	6	6	2,490	2,490
Financial liabilities
Borrowings (note 26)	17,763	20,060	14,355	16,004
Trade and other payables	4,610	4,603	4,272	4,266
Derivatives	1,158	1,158	20,080	20,080

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

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

Cash restricted for use and cash and cash equivalents

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

Trade and other receivables and trade and other payables

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

Investments and other non-current assets

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

Borrowings

The mandatory convertible bonds are carried at fair value. The convertible and rated bonds are carried at amortised cost and their fair values are their closing market value at the reporting date. 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.

Mandatory convertible bonds carried at fair value

In September 2010, the group issued mandatory convertible bonds at a coupon rate of 6% due in September 2013. The conversion of the mandatory convertible bonds into ADSs was subject to shareholder approval, which was granted in October 2010. These bonds are convertible into a variable number of shares ranging from 18,140,000 at a share price equal to or less than $43.50, to 14,511,937 at a share price equal to or greater than $54.375, each as calculated in accordance with the formula set forth in the indenture.

The mandatory convertible bonds contain certain embedded derivatives relating to change in control and anti-dilution protection provisions. The shareholders have authorised that the convertible bonds will be settled in equity and not have any cash settlement potential except if a fundamental change or conversion rate adjustment causes the number of ADSs deliverable upon conversion to exceed the number of shares reserved for such purpose, among other circumstances provided in the indenture, and therefore the group has chosen to recognise the instrument, in its entirety, at fair value. Depending on the final calculated share price on the date of conversion, the liability recognised may differ from the principal amount.

Other convertible bonds that have been issued by the group will only be settled in equity if future events, outside the group's control, result in equity settlement and thus have a potential cash settlement at maturity that will not exceed the principal amount, in those circumstances the liabilities are recognised at amortised cost.

In determining the fair value liability of the mandatory convertible bonds, the group has measured the effect based on the ex interest NYSE closing price on the reporting date. The ticker code used by the NYSE for the mandatory convertible bonds is AUPRA. The accounting policy of the group is to recognise interest expense separately from fair value adjustments in the income statement. Interest is recognised on the yield to maturity basis determined at the date of issue, which was 4.55%.

The contractual principal amount of the mandatory convertible bonds is $789m, provided the calculated share price of the group is within the range of $43.50 to $54.375. If the calculated share price is below $43.50, the group will recognise a gain on the principal amount and above $54.375 a loss. As at 31 December 2010, the actual share price was $49.23.

The total fair value of the mandatory convertible bonds on 15 September 2010 (date of issue) amounted to $819m. A bond issue discount of $30m was recognised in special items in the income statement. The mandatory convertible bonds were issued by AngloGold Ashanti Holdings Finance plc, a finance company wholly owned by AngloGold Ashanti Limited. AngloGold Ashanti Limited has fully and unconditionally guaranteed the mandatory subordinated convertible bonds issued by AngloGold Ashanti Holdings Finance plc. There are no significant restrictions on the ability of AngloGold Ashanti Limited to obtain funds from its subsidiaries by dividend or loan. 

Derivatives

The fair value of derivatives are estimated based on ruling market prices, volatilities, interest rates and credit risk as at 31 December 2010 and includes all derivatives carried in the statement of financial position.

The group uses the Black-Scholes option pricing formula to value option contracts. One of the inputs into the model is the level of volatility. These volatility levels are themselves not exchange traded. The group uses volatility inputs supplied by leading market participants (international banks).

Derivative assets (liabilities) comprise the following:

Figures in million	Cash flow hedge accounted	Assets Non- hedge accounted	Total	Cash flow hedge accounted	Liabilities Non- hedge accounted	Total
US Dollars	2010
Embedded derivative	–	–	–	–	–	–
Warrants on shares	–	1	1	–	–	–
Option component of convertible bonds	–	–	–	–	(176)	(176)
Total derivatives	–	1	1	–	(176)	(176)
	2009
Commodity option contracts	–	47	47	–	(2,034)	(2,034)
Forward sale commodity contracts	–	283	283	(37)	(441)	(478)
Gold interest rate swaps	–	–	–	–	(13)	(13)
Sub-total hedging	–	330	330	(37)	(2,488)	(2,525)
Embedded derivative	–	–	–	–	(1)	(1)
Warrants on shares	–	5	5	–	–	–
Option component of convertible bonds	–	–	–	–	(175)	(175)
Total derivatives	–	335	335	(37)	(2,664)	(2,701)
SA Rands	2010
Embedded derivative	–	–	–	–	(2)	(2)
Warrants on shares	–	6	6	–	–	–
Option component of convertible bonds	–	–	–	–	(1,156)	(1,156)
Total derivatives	–	6	6	–	(1,158)	(1,158)
	2009
Commodity option contracts	–	351	351	–	(15,122)	(15,122)
Forward sale commodity
contracts	–	2,099	2,099	(276)	(3,273)	(3,549)
Gold interest rate swaps	–	–	–	–	(99)	(99)
Sub-total hedging	–	2,450	2,450	(276)	(18,494)	(18,770)
Embedded derivative	–	–	–	–	(10)	(10)
Warrants on shares	–	40	40	–	–	–
Option component of convertible bonds	–	–	–	–	(1,300)	(1,300)
Total derivatives	–	2,490	2,490	(276)	(19,804)	(20,080)

At 31 December 2010, the group had no open derivative positions in its hedge book. The impact of credit risk adjustment totalled $150m, R1,113m at 31 December 2009.

The group uses the following hierarchy for determining and disclosing the fair value of financial instruments:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices); and

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

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

Type of instrument
Assets measured at fair value

Figures in million	Level 1	Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
US Dollars	2010				2009
Financial assets at fair value through profit or loss
Commodity option contracts – non-hedged	–	–	–	–	–	47	–	47
Forward sale commodity contracts – non-hedged	–	–	–	–	–	283	–	283
Warrants on shares	–	1	–	1	–	5	–	5
Available-for-sale financial assets
Equity securities	124	–	–	124	111	–	–	111
SA Rands
Financial assets at fair value through profit or loss
Commodity option contracts – non-hedged	–	–	–	–	–	351	–	351
Forward sale commodity ontracts – non-hedged	–	–	–	–	–	2,099	–	2,099
Warrants on shares	–	6	–	6	–	40	–	40
Available-for-sale financial assets
Equity securities	814	–	–	814	829	–	–	829
US Dollars	2010				2009
Financial liabilities at fair value through profit or loss
Commodity option contracts – non-hedged	–	–	–	–	–	2,034	–	2,034
Forward sale commodity contracts – non-hedged	–	–	–	–	–	441	–	441
Gold interest rate swaps – non-hedged	–	–	–	–	–	13	–	13
Option component of convertible bonds	–	176	–	176	–	175	–	175
Embedded derivatives	–	–	–	–	–	1	–	1
Mandatory convertible bonds	872	–	–	872	–	–	–	–
Cash flow hedges
Forward sale commodity
contracts – cash flow hedged	–	–	–	–	–	37	–	37
SA Rands
Financial liabilities at fair value through profit or loss
Commodity option contracts – non-hedged	–	–	–	–	–	15,122	–	15,122
Forward sale commodity contracts – non-hedged	–	–	–	–	–	3,273	–	3,273
Gold interest rate swaps – non-hedged	–	–	–	–	–	99	–	99
Option component of
convertible bonds	–	1,156	–	1,156	–	1,300	–	1,300
Embedded derivatives	–	2	–	2	–	10	–	10
Mandatory convertible bonds	5,729	–	–	5,729	–	–	–	–
Cash flow hedges
Forward sale commodity contracts – cash flow hedged	–	–	–	–	–	276	–	276

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. There are no open hedge positions as a result of the hedge book elimination during 2010. Additionally, the group’s management of risk is to monitor the sensitivity of the convertible bonds to changes in the AngloGold Ashanti Limited’s share price and warrants on shares.

The following table discloses the approximate sensitivities of the US dollar’s marked-to-market value of the hedge book, warrants on shares and the convertible bonds to key underlying factors at 31 December 2010 (actual changes in the timing and amount of the following variables may differ from the assumed changes below).

	Change in underlying factor (+)	Normal sale exempted million	Cash flow hedge accounted million	Non-hedge accounted million	Total change in fair value million	Total change in fair value million
US Dollars	2010			2009
Hedge book
Currency (R/$)	Spot(+R1)				–	2
Currency (A$/$)	Spot(+A$0.25)				–	2
Currency (BRL/$)	Spot(+BRL0.25)				–	–
Gold price ($/oz)	Spot(+$250)				–	(915)
USD interest rate (%)	IR(+0.1%)				–	(4)
AUD interest rate (%)	IR(+1.5%)				–	–
Gold interest rate (%)	IR(+0.1%)				–	11
Convertible bonds
AngloGold Ashanti Limited share price (US$)	Spot(+$1)			(10)	(10)	(9)
Warrants on shares
B2Gold Corporation share price	Spot(+C$0.25)			1	1	1 (4)
US Dollars	2010			2009
Hedge book
Currency (R/$)	Spot(-R1)				–	(6)
Currency (A$/$)	Spot(-A$0.25)				–	(2)
Currency (BRL/$)	Spot(-BRL0.25)				–	–
Gold price ($/oz)	Spot(-$250)				–	801
USD interest rate (%)	IR(-0.1%)				–	4
AUD interest rate (%)	IR(-1.5%)				–	–
Gold interest rate (%)	IR(-0.1%)				–	(11)
Convertible bonds
AngloGold Ashanti Limited share price (US$)	Spot(-$1)			9	9	9
Warrants on shares
B2Gold Corporation share price	Spot(-C$0.25)				–	(1) (4)

IR represents interest rate.

⁽⁴⁾ Change in B2Gold Corporation share price (+) of spot (+C$0.1) and change in share price (–) of spot (–C$0.1).

The sensitivity analysis in SA rands can be calculated by applying the exchange rate in US dollars of $1 = R6.5701 at 31 December 2010 (2009: $1 = R7.4350).

Mandatory convertible bonds

"The mandatory convertible bond valuation is primarily linked to the AngloGold Ashanti Limited share price traded on the NYSE and fluctuates with reference to the NYSE share price and market interest rates. A change of $1 in the AngloGold Ashanti Limited share price will generally impact the value of the mandatory convertible bond price in a stable interest environment by $0.83.

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 2010 (actual changes in the timing and amount of the following variables may differ from the assumed changes below). As the sensitivity is the same (linear) for both increases and decreases in interest rates only absolute numbers are presented.

	Change in interest rate %	Change in interest amount in currency million	Change in interest amount US dollars million	Change in interest rate %	Change in interest amount in currency million	Change in interest amount US dollars million
	2010			2009
Financial assets
USD denominated (%)	1.00	2	2	1.00	2	2
ZAR denominated (%) (5)	1.50	1	–	1.50	13	2
BRL denominated (%)	2.50	1	1	2.50	4	2
NAD denominated (%)	1.50	3	1	1.50	–	–
Financial liabilities
USD denominated (%)	1.00	–	–	1.00	13	13
ZAR denominated (%)	1.50	2	–	1.50	–	–

The sensitivity analysis in SA rands can be calculated by applying the exchange rate in US dollars of $1 = R6.5701 at 31 December 2010 (2009: $1 = R7.4350).

⁽⁵⁾ This is the only interest rate risk for the company.

Foreign exchange risk

Foreign exchange risk arises on financial instruments that are denominated in a foreign currency.

The following table discloses the approximate foreign exchange risk sensitivities of borrowings at 31 December 2010 (actual changes in the timing and amount of the following variables may differ from the assumed changes below).

	Change in exchange rate	Change in borrowings total US dollars million	Change in borrowings total SA rands million	Change in exchange rate	Change in borrowings total US dollars million	Change in borrowings total SA rands million
	2010			2009
Borrowings
USD denominated (R/$)	Spot (+R1)	–	2,551	Spot (+R1)	–	1,889
ZAR denominated (R/$)	Spot (+R1)	(19)	–	Spot (+R1)	(4)	–
BRL denominated (BRL/$)	Spot			Spot
	(+BRL0.25)	(1)	(5)	(+BRL0.25)	(1)	(7)
USD denominated (R/$)	Spot (-R1)	–	(2,551)	Spot (-R1)	–	(1,889)
ZAR denominated (R/$)	Spot (-R1)	26	–	Spot (-R1)	5	–
BRL denominated (BRL/$)	Spot			Spot
	(-BRL0.25)	1	7	(-BRL0.25)	1	9

The borrowings total in the denominated currency will not be influenced by a movement in its exchange rate.

36 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.

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

During September 2009, $284m before underwriting discount and issue expenses was raised through an offering of 7,624,162 ordinary shares priced at $37.25 or R288.32 per ADS to partially finance the acquisition of an effective 45% interest in the Kibali gold project for a total consideration including liabilities of approximately $344m. The second tranche of the Boddington sale of $240m received towards the end of 2009 was applied to reduce debt.

During April 2010, the group completed the following key financing transactions:

• the issue of $1bn of 10-year and 30-year unsecured notes. The net proceeds were applied to repay and cancel amounts drawn under the $1,150m syndicated loan facility and the 2009 term facility. The offering consisted of $700m of 10-year unsecured notes at a semi-annual coupon of 5.375% and $300m of 30-year unsecured notes at a semi-annual coupon of 6.5%; and
• the entering of a four-year unsecured syndicated loan facility with a group of banks for $1bn which is charged at 175 basis points above LIBOR. The 2009 revolving credit facility, which was undrawn, was cancelled.

During September 2010, the group issued equity and mandatory convertible bonds. The equity offering raised $789m via the issue of 18,140,000 shares. The mandatory convertible bonds issued at a coupon rate of 6% raised a further $789m which will be settled in September 2013 by the issue of shares. On 26 October 2010, shareholders, by the requisite majority, approved a special resolution placing up to a maximum of 18,140,000 ordinary shares under the control of the directors, deliverable upon the conversion of the mandatory convertible bonds. These proceeds along with existing bank balances and facilities were deployed to eliminate all outstanding hedge commitments.

Gearing ratio (Net debt to EBITDA)

Figures in million	2010	2009
US Dollars
Borrowings (note 26)	2,704	1,931
Mandatory convertible bonds (note 26) (1)	(874)	–
Corporate office finance lease (note 26)	(39)	(35)
Unamortised portion of the convertible and rated bonds	115	137
Cash restricted for use (note 22)	(43)	(65)
Cash and cash equivalents (note 23)	(575)	(1,100)
Net debt	1,288	868
EBITDA (2)	1,897	1,663
Gearing ratio (Net debt to EBITDA)	0.68:1	0.52:1
SA Rands
Borrowings (note 26)	17,763	14,355
Mandatory convertible bonds (note 26) (1)	(5,739)	–
Corporate office finance lease (note 26)	(259)	(258)
Unamortised portion of the convertible and rated bonds	757	1,019
Cash restricted for use (note 22)	(283)	(481)
Cash and cash equivalents (note 23)	(3,776)	(8,176)
Net debt	8,463	6,459
EBITDA (2)	13,769	13,771
Gearing ratio (Net debt to EBITDA)	0.61:1	0.47:1

(1)	For the purposes of this note, the mandatory convertible bonds are treated as equity and excluded from borrowings.
(2)	Refer to Non-GAAP note 6.