Interim Results

ANGLOVAAL MINING LIMITED (Reg. No. 1933/004580/06) (Incorporated in the Republic of South Africa) ('Avmin' or 'the Company') Interim Results for the period ended 31 December 2002 HIGHLIGHTS * Good contributions from Assmang and Nkomati * Avgold's Target mine production included for the full six months * Chambishi's furnace now operating at full capacity * Debt to equity ratio declines significantly due to stronger rand * ETC sold by Avgold for R300 million in February 2003 FORWARD LOOKING STATEMENT Certain statements included in this report constitute 'forward looking statements'. Such statements involve known and unknown risks, uncertainties and other factors that may cause the results, performances, objectives or achievements of Anglovaal Mining Limited and its subsidiary or associated companies to be materially different from future results, performances, objectives or achievements expressed or implied by these forward looking statements. Anglovaal Mining Limited is subject to the effect of changes in the minerals and metals commodity prices, currency fluctuations and the risks involved in mining operations. Financial summary and statistics Unaudited Audited Half-year ended Year ended 31 December 30 June 2002 2001 2002 Rm Rm Rm BALANCE SHEET Total assets 8 990 8 332 8 786 Total interest bearing borrowings 2 669 2 883 2 696 Shareholders' equity 4 924 4 146 4 591 INCOME STATEMENT Revenue 2 340 1 663 4 047 Earnings 118 (1 125) (866) Headline earnings 105 31 204 Basic earnings per share (cents) 106 (1 017) (780) Headline earnings per share (cents) 94 28 184 CASH FLOW STATEMENT Cash generated from operations 198 160 619 Cash and cash equivalents 905 472 779 Cash generated from operations per share 177 145 558 (cents) JSE SECURITIES EXCHANGE SOUTH AFRICA PERFORMANCE Ordinary shares - high (cents) 4 225 4 280 4 280 - low (cents) 3 550 3 200 3 100 - period end (cents) 3 950 4 080 3 701 Volume of shares traded (thousands) 10 892 11 104 51 524 Number of ordinary shares in issue (thousands) 112 225 111 159 111 444 FINANCIAL STATISTICS Definition Effective taxation rate 1 (per cent) 38 - - Interest rate 2 (times) 3,88 3,38 5,34 Debt: equity ratio 3 0,36 0,58 0,42 Net asset value per share 4 (cents) 2 486 2 062 2 337 (cents) Market capitalisation 5 (R million) 4 433 4 535 4 125 (R million) Definitions 1. Effective taxation rate (per cent) Taxation charge per income statement less Secondary Tax on Companies divided by profit before taxation. 2. Interest cover (times) Profit before exceptional items, finance costs and taxation divided by finance costs. 3. Debt: equity ratio Total debt divided by total equity. Total debt comprises long-term borrowings, overdrafts and short-term borrowings less cash and cash equivalents. Total equity comprises total shareholders' interest. 4. Net asset value per share (cents) Ordinary shareholders' interest in capital and reserves divided by number of shares in issue. 5. Market capitalisation (R million) Number of ordinary shares in issue multiplied by market value of shares at reporting date. COMMENTARY GROUP RESULTS Avmin's revenue and headline earnings increased at the rates of 41 per cent and 239 per cent to R2,34 billion (R1,66 billion) and R105 million (R31 million), respectively, for the six months ended 31 December 2002 compared to the 2001 comparative period. Headline earnings per share were 94 cents (28 cents). Assmang Limited (Assmang) and Nkomati nickel mine (Nkomati) continued to perform satisfactorily. Increased contributions were received from Avgold Limited (Avgold) and losses have been contained at Chambishi Metals plc (Chambishi). A major determinant of the Group's financial performance was the stengthening of the rand/US dollar exchange rate during the period under review. This has adversely affected rand revenue of US dollar priced products and generated exchange gains on borrowings denoted in US dollars. Avgold's results showed an improvement as Target attained full production, while ETC also performed well. Avgold benefited from an exchange gain on the US$35 million of borrowings following the strengthening of the rand/US dollar exchange rate. Avgold concluded an agreement to sell its ETC assets for R300 million to a consortium that includes a significant Black Economic Empowerment component. The Chambishi cobalt/copper operation in Zambia is now running at planned production levels following the commissioning of the redesigned furnace. The low cobalt price caused Chambishi to incur a loss during the period. There has been an increase in the cobalt price in 2003. Two Rivers Platinum (Proprietary) Limited (Two Rivers) signed a memorandum of understanding with a Black Economic Empowerment consortium to acquire up to 25 per cent of Two Rivers. The consortium is to be managed by TISO Capital (Proprietary) Limited, The Two Rivers and TISO consortium shareholders' agreement will, when fully implemented, result in Avmin holding 41,3 per cent of the venture, with Impala Platinum Holdings Limited (Implats) holding 33,7 per cent and the TISO consortium 25 per cent. Avmin and Implats will combine their interests into a new holding structure managed by Avmin with 75 per cent of the project's equity. Total capital expenditure for the period amounted to R257 million, expended as follows: precious metals -- R74 million; ferrous metals - R140 million; cobalt/ copper - R25 million; and nickel - R17 million. The Group's debt-to-equity ratio showed a significant improvement, falling to 36 per cent (58 per cent), and similarly net borrowings (borrowings less deposits and cash) declined 27 per cent to R1,8 billion (R2,4 billion) as a result of the strengthening of the rand/US dollar exchange rate. SAFETY Three employees tragically lost their lives in two separate accidents at the Black Rock and Beeshoek mines during December 2002. The Board very much regrets these deaths and extends its condolences to the bereaved families and friends. All operations showed a decrease in reportable incidents compared to the previous quarter. Target achieved one million fatality free shifts in November 2002. FERROUS METALS Avmin's 50,3 per cent held manganese, chrome and iron ore producer, Assmang, reported a 14 per cent increase in headline earnings to R138 million (R121 million). The increase in earnings was mainly attributable to increased sales volumes for all products and higher prices received for manganese alloys in both US dollar and rand terms. Sales Volume Six months to: 31 Dec 2002 31 Dec 2001 % Change Manganese ore (tons)* 409 000 382 000 7,1 Iron ore (tons) 2 259 000 2 149 000 5,1 Ferro-manganese (tons) 96 900 85 400 13,5 Ferro-chrome (tons) 103 600 88 900 16,5 *excludes intra group sales Capital expenditure to maintain and improve operations during the period under review amounted to R140 million (R186 million) and was spent mainly on: * The development of the Nchwaning III shaft complex: This project is scheduled for completion by 31 December 2003. Problems associated, inter alia, with ground conditions and the commissioning of the 2,2 km long decline conveyor have caused the final estimated cost to completion to increase by R68 million to R585 million. This complex will have a life in excess of 20 years and will supply the total estimated sales requirement for high-grade manganese ore. * The chrome division's new 54 MVA furnace and 350 000 tons per annum pelletising plant. These have experienced some technical problems, which delayed the attainment of sustained planned production levels. These problems have been addressed and full production is expected to be reached during the March 2003 quarter. NICKEL The Nkomati nickel mine, 75 per cent owned by Avmin, posted a lower profit before taxation of R105 million (R109) mainly as a result of the firmer rand/US dollar exchange rate. However, Nkomati's results reflect a good operating performance. Total ore treated increased to 137 000 tons (135 000 tons), producing 28 900 tons (23 700 tons) of concentrates with average grades of 10,2 per cent (9,3 per cent) for nickel and 6,5 per cent (6,8 per cent) for copper. The grade of the nickel feed was above two per cent. Sales achieved were higher at 2 620 tons (1 880 tons) of nickel, 1 670 tons (1 380 tons) of copper, 33 tons (26 tons) of cobalt and 19 040 ounces (16 940 ounces) of Platinum Group Metals (PGMs). Despite the rand's gains against the US dollar the mine remains cost competitive with a nickel production cost, net of by-product credits, of US$0,50/lb, while the average nickel price over the period amounted to US$3,16/lb (US$2,40/lb). The Nkomati expansion project's feasibility study has been concluded and regulatory issues pertaining to environmental and mining authorisations are being progressed. In addition to the current feasibility study, which envisages nickel production to increase to some 16 000 tons, various alternatives are being considered to ensure the optimal return on investment. COBALT/COPPER Chambishi, owned 90 per cent by Avmin, continued to address and resolve the issues affecting production at the plant, resulting in the plant processing a total of 76 900 tonnes (64 500 tonnes) of slag during the period. Cobalt production increased 43 per cent to 2 200 tons during the period, of which 1 300 tons (300 tons) were for Chambishi's own account. Some 5 300 tons (6 400 tons) of copper were produced, of which 610 tons (240 tons) were from Chambishi's own metal. The average cobalt price received during the period was significantly lower than the previous period at US$6,22/lb (US$8,00 lb). The lower realised cobalt price and the reduced output resulting from the refurbishment of the furnace in August/September 2002 adversely impacted on Chambishi's results. Chambishi reported an operating loss attributable to Avmin of R61 million (R82 million loss). Chambishi continues to discuss with the Government of the Republic of Zambia (GRZ) the full implementation of the development agreement signed in 1998. The GRZ has undertaken to implement the development agreement and apply equal fiscal treatment and lower tariff arrangements to the mining industry. Chambishi's continues to seek a partner to share risk at Chambishi. Any transaction may effect the carrying value of the Chambishi. PRECIOUS METALS Avmin's 56 per cent held gold producer, Avgold, increased revenue to R502 million (R128 million) following Target's commissioning on 1 May 2002. The results for the previous period excludes Target and therefore are not comparable. Costs and expenses amounted to R453 million (R114 million). Operating profit increased to R50 million (R14 million). Headline earnings increased to R79 million (R15 million), largely as a result of an unrealised exchange gain of R52 million on the US$35 million borrowing following the strengthening of the rand. The gain helped to offset the effects of the rand selling price, which reduced to R83 488/kg (R89 133/kg), or US$299/oz (US$306/ oz) as a result of the hedges put in place when the funding for Target was arranged. Capital expenditure declined significantly to R58 million from R369 million. The mark-to-market value of Avgold's hedge book as at 31 December 2002 was a negative R485 million - significantly lower than 31 December 2001's negative R1 036 million - as a result of the strengthening of the rand/US dollar exchange rate and delivery into the hedge book. Ore milled at ETC declined to 162 700 tonnes (169 800 tonnes); gold sold increased to 1 486 kg (1 438 kg) as a result of the grade improving to 9,13g/t (8,47g/t). Cash costs increased to R71 097/kg (R68 140/kg), but declined in dollar terms to US$218/oz (US$233/oz). Ore milled at Target amounted to 576 400 tonnes, while gold sold was 4 524 kg. The yield was 7,85g/t, while the cash cost was R53 634/kg, or US$165/oz. Capital expenditure totalled R47 million (R346 million). Target's Life of Mine plan was updated during the period, resulting in an increased life of 18 years, compared to the previous 13 years. Exploration work continued in the northern Free State in the Paradise area, immediately north of the Target mine. Pre-feasibility work on a mine design using the updated geological model and the latest mineral resource estimate is underway and is expected to be presented to Avgold's Board by 30 June 2003. A detailed feasibility study on Two Rivers has been completed. The study suggests that the sinking of a decline shaft is the best option to access the ore body and that mechanised mining would allow the mine to attain full production within two years after the completion of the shaft. A concentrator would be erected on site and the concentrates sold to Impala Refining Services. Implats will undertake marketing of the PGMs while the marketing of the base metals contained in the concentrate will be conducted by Avmin. PROSPECTS FOR THE FINANCIAL YEAR 2003 The stabilisation of the Chambishi operation and Target's contribution to Avgold's earnings for the entire 2003 financial year are expected to improve Avmin's headline earnings for the year as a whole compared to the 2002 financial year. The rand/US dollar exchange rate will remain a key determinant in Avmin's financial performance for the year to 30 June 2003. RESIGNATIONS OF DIRECTORS Roy Oron and Nir Livnat resigned as non-executive directors on 24 October and 9 December 2002 respectively. For and on behalf of the Board: RP Menell DN Murray Chairman Chief executive officer Johannesburg 28 February 2003 Group balance sheet Unaudited Audited Half-year ended Year ended 31 December 30 June 2002 2001 2002 Rm Rm Rm ASSETS Non-current assets 5 627 5 520 5 686 Tangible assets Intangible assets 7 8 7 Deferred tax assets 38 39 38 Environmental rehabilitation trust funds 64 59 64 Investments 215 104 176 5 951 5 730 5 971 Current assets 1 148 867 976 Inventories 986 1 263 1 060 Trade and other receivables 905 472 779 Deposits and cash 3 039 2 602 2 815 Total assets 8 990 8 332 8 786 EQUITY AND LIABILITIES Capital and reserves Ordinary share capital 6 6 6 Share premium 69 59 62 Non-distributable reserves 184 85 110 Distributable reserves 2 531 2 142 2 401 Shareholders' interest in capital and reserves 2 790 2 292 2 579 Minority interest 2 134 1 854 2 012 Total shareholders's interest 4 924 4 146 4 591 Non-current liabilities Long-term borrowings - interest bearing 1 367 1 478 1 181 Deferred tax liabilities 524 369 493 Long-term provisions 219 212 215 2 110 2 059 1 889 Current liabilities Trade and other payables 523 591 637 Provisions 60 63 62 Taxation 68 68 45 Derivative instruments 3 - 47 Overdrafts and short-term borrowings 1 302 1 405 1 515 1 956 2 127 2 306 Total equity and liabilities 8 990 8 332 8 786 Group income statement Unaudited Audited Half-year ended Increase/ Year ended 31 December (Decrease) 30 June 2002 2001 2002 Rm Rm % Rm Revenue 2 340 1 663 41 4 047 Cost of sales 1 828 1 271 44 2 985 Gross profit 512 392 31 1 062 Other operating income 234 153 53 215 Other operating expenses 354 322 10 478 Profit from oeprations 392 223 76 799 Interest received 47 27 74 55 Finance costs 113 74 53 160 Profit before taxation and 326 176 85 694 exceptional items Exceptional items 13 (1 157) (1 084) Profit/(loss) before taxation 339 (981) 135 (390) Taxation 128 134 (4) 313 Profit/(loss) after taxation 211 (1 115) 119 (703) Minority interest 92 10 830 163 Earnings 118 (1 125) (866) Headline earnings 105 31 239 204 Basic earnings per share 106 (1 017) (780) (cents) Headline earnings per share 94 28 184 (cents) Full diluted earnings per 104 (1 002) (771) share (cents) Full diluted headline 93 28 182 earnings per share (cents) Number of shares in issue at 112 225 111 159 111 444 end of period (thousands) Weighted average number of 111 783 110 661 110 977 shares in issue (thousands) Weighted average number of 113 303 112 246 112 367 shares used in calculating fully diluted earnings per share (thousands) Group cash flow statement Unaudited Audited Half-year ended Year ended 31 December 30 June 2002 2001 2002 Rm Rm Rm CASH FLOW FROM OPERATING ACTIVITIES Cash receipts from customers 2 399 1 651 3 823 Cash paid to suppliers and employees 2 201 1 491 3 204 Cash generated from operations 198 160 619 Interest received 46 25 55 Interest paid (113) (74) (160) Dividends received 1 1 2 Dividends paid to minorities (12) (9) (23) Taxation paid (78) (116) (197) Net cash inflow/(outflow) from operating 42 (13) 296 activities CASH FLOW FROM INVESTING ACTIVITIES Additions to fixed assets to maintain (199) (144) (122) operations Additions to fixed assets to expand operations (58) (599) (1 101) Proceeds on disposal of investments 13 713 1 013 Proceeds on dilution of interest in - - 139 investments in subsidiaries Net cash outflow from investing activities (244) (30) (71) CASH FLOW FROM FINANCING ACTIVITIES Funding received from shareholders 7 3 6 Funding received from minority shareholders 8 248 264 Long-term borrowings raised 348 312 314 Long-term borrowings repaid (62) - (153) Increase/(decrease) in short-term borrowings 27 (487) (316) Net cash inflow from financing activities 328 76 115 Net increase in cash and cash equivalents 126 33 340 Cash and cash equivalents at beginning of 779 439 439 period Cash and cash equivalents at end of period 905 472 779 Statement of changes in equity Share Currency capital trans- Reval- and lation uation Retained premium reserve surplus Other profit Total Rm Rm Rm Rm Rm Rm Half-year ended 31 December 2002 Balance at 30 June 2002 68 (42) 141 11 2 401 2 579 Currency translation - 32 - - - 32 reserve Revaluation of listed - - 40 - - 40 investments Earnings - - - - 118 118 Share options exercised 7 - - - - 7 Allocation to minority - (24) - - 14 (10) shareholders Mark to market of currency derivative contracts - - - 24 - 24 Other movements - - - 2 (2) - Balance at 31 December 75 (34) 181 37 2 531 2 790 2002 Half-year ended 31 December 2001 Balance at 30 June 2001 62 6 638 35 3 267 4 008 Earnings - - - - (1 125) (1 125) Currency translation - (24) - - - (24) reserve Revaluation and - - (570) - - (570) disposal of listed investments Share options exercised 3 - - - - 3 Transfer to reserves - - 3 (3) - - Balance at 31 December 65 (18) 71 32 2 142 2 292 2001 Year ended 30 June 2002 Balance at 30 June 2001 62 6 638 35 3 267 4 008 Earnings - - - - (866) (866) Revaluation of listed - - 65 - - 65 investments Disposal of listed - - (562) - - (562) investments Foreign entity - (48) - - - (48) translations Unrealised loss on - - - (26) - (26) currency derivative contracts Share options exercised 6 - - - - 6 Other - - - 2 - 2 Balance at 30 June 2002 68 (42) 141 11 2 401 2 579 Notes to the financial statements for the half-year ended 31 December 2002 1. BASIS OF PREPARATION AND ACCOUNTING POLICIES The financial information for the half-year ended 31 December 2002 has been prepared adopting the same accounting policies used in the most recent annual financial statements which are in accordance with South African Statements of Generally Accepted Accounting Practice and International Accounting Standards. These condensed financial statements are prepared in accordance with AC 127 - interim reporting, and are prepared on the historical cost basis as adjusted for financial instruments and investment properties. These are accounted for on the fair value or amortised cost basis. Unaudited Audited Half-year ended Year ended 31 December 30 June 2002 2001 2002 Rm Rm Rm 2. INVESTMENTS Listed Original cost 31 31 31 Revaluation surplus 178 68 138 Closing carrying amount 209 99 169 Unlisted - book value 6 5 7 Total carrying amount of investments 215 104 176 3. BORROWINGS Long-term borrowings are made up as follows: - Anglovaal Mining Limited 454 - - - Assmang Limited - 4 1 - Avgold Limited 502 657 548 - Chambishi Metals plc 411 812 632 - Two Rivers Platinum (Proprietary) Limited - 5 - 1 367 1 478 1 181 Overdrafts and short-term borrowings are made up as follows: - Anglovaal Mining Limited 301 712 595 - Assmang Limited 656 424 577 - Anglovaal Air (Proprietary) Limited - 12 - - Avgold Limited 120 3 126 - Chambishi Metals plc 1 302 1 405 1 515 Total Borrowings 2 669 2 883 2 696 Borrowings are reflected net of amounts utilised by companies from Group cash resources. No interest was capitalised for the half-year ended 31 December 2002 (2001: R53 million). No interest was capitalised for the year ended 30 June 2002 (2001: R94 million). Unaudited Audited Half-year ended Year ended 31 December 30 June 2002 2001 2002 Rm Rm Rm 4. EXCEPTIONAL ITEMS Surplus on disposal of Iscor Limited - 343 343 investments Surplus on disposal of other investments 13 123 197 Exchange gain - Chambishi Metals plc - 400 400 Impairment of assets - (2 019) (2 019) Provision for guarantees - (4) (5) Exceptional items as per income statement 13 (1 157) (1 084) Taxation - (55) (52) Minority interest - 56 66 Net exceptional items 13 (1 156) (1 070) 5. HEADLINE EARNINGS Earnings per income statement 118 (1 125) (866) Impairment of assets - 1 619 1 619 Provisions for guarantees - 4 5 Surplus on disposal of investments (13) (466) (540) 105 32 218 Taxation - 55 52 Minority interest - (56) (66) Headline earnings as per income statement 105 31 204 6. COMMITMENTS AND CONTINGENT LIABILITIES Commitments in respect of capital expenditure: Approved by directors - contracted for 511 523 229 - not contracted for 371 512 588 Total commitments 882 1 035 817 Contingent liabilities - Back-to-back guarantees 180 180 180 Total commitments and contingent liabilities 1 062 1 215 997 The Company has a contingent liability for tax relating to the Anglovaal Limited loan stock redemption premium that the South African Revenue Service disallowed in 1998. The potential liability for tax is R107 million at a tax rate of 30 per cent plus interest. The matter is currently under appeal. A back-to-back guarantee to Assore Limited (Assore) is in respect of guarantees issued to bankers by Assore to secure a short-term export finance agreement facility of R180 million (2001: R180 million). Short-term export finance loans negotiated in terms of the above facility in the ordinary course of business at 31 December 2002 were R9 million (2001: R105 million) Anglovaal Mining Limited has provided an irrevocable and unconditional guarantee to Copperbelt Energy Corporation plc (CEC) and The Development Bank of Southern Africa Limited (DBSA) for the due and punctual payment by Chambishi Metals plc (Chambishi) of the capital charge component of the power supply assets installed and owned by CEC for which financing was obtained by CEC from DBSA. The total outstanding capital charge obligation at 31 December 2002 amounted to US$10,8 million (2001: US$11,5 million) and will reduce over 10 years ending June 2012 as capital charge payments are made by Chambishi. A contingent liability exists, arising from an agreement with LTA Process Engineering whereunder Avgold Limited is liable for the erection costs of a tailing dam, should a dump reclamation project at the latter's ETC mining complex be cancelled. Corporate Precious Cobalt/ Ferrous and metals copper metals Nickel other Total Rm Rm Rm Rm Rm Rm 7. SEGMENTAL INFORMATION Primary segmental information Half-year ended 31 December 2002 Revenue External revenue 502 287 1 351 200 - 2 340 Cost of sales (439) (291) (993) (105) - (1 828) Other operating 53 31 13 6 131 234 income Other operating (11) (70) (112) (23) (138) (354) expenses Reallocated corporate - 1 20 1 (22) - expenditure Segment result 105 (42) 279 79 (29) 392 Income from 6 - 1 1 39 47 investments Finance cost (29) (29) (42) - (13) (113) Exceptional items - - - - 13 13 Taxation - - (80) (23) (25) (128) Minority interest (35) 10 (68) - - (93) Contribution to 47 (61) 90 57 (15) 118 earnings Other information 3 028 1 150 3 318 266 901 8 663 Consolidated total operating assets Intangibles and 141 - 179 - 7 327 mineral rights Consolidated total 3 169 1 150 3 497 266 908 8 990 assets Consolidated total 823 885 1 258 68 1 033 4 067 liabilities Capital expenditure 74 25 140 17 1 257 Depreciation 92 20 68 8 2 190 Half-year ended 31 December 2001 Revenue External revenue 128 232 1 162 141 1 663 Cost of sales (109) (233) (850) (79) - (1 271) Other operating - - 26 28 99 153 income Other operating (7) (52) (106) (10) (147) (322) expenses Reallocated corporate - (10) 23 3 (16) - expenditure Segment result 12 (63) 255 83 (64) 223 Income from - - 1 1 25 27 investments Finance cost - (19) (43) - (12) (74) Exceptional items - Chambishi Metals - (1 619) - - - (1 619) plc - Other - - - - 462 462 Taxation - 1 (68) (27) (40) (134) Minority interest (6) 56 (60) - - (10) Contribution to 6 (1 644) 85 57 371 (1 125) earnings Contribution to 6 (82) 85 57 (35) 31 headline earnings Other information Consolidated total 2 992 1 226 2 652 243 890 8 003 operating assets Depreciation Intangibles and 141 - 184 - 4 329 mineral rights Consolidated total 937 1 236 1 000 68 945 4 186 liabilities Capital expenditure 369 274 186 14 - 843 Depreciation 14 34 51 7 2 108 US$ REPORTING For the benefit of international investors, the group's balance sheet, income statement, the cash flow statement and statement of changes in equity, presented in South African rand and set out on pages 7 to 10, have been translated into United States dollars and are presented on pages 15 to 18. The balance sheet is translated at the rate of exchange ruling at at the close of business on the last day of the periods and the income statement and cash flow statement are translated at the average exchange rates for the periods reported. These schedules do not form part of the financial statements. Half-year ended Year ended 31 December 30 June Exchange rates used: 2002 2001 2002 R/US$ R/US$ R/US$ Balance sheets R8,65 R11,50 R10,25 Income and cash flow statements R10,10 R9,29 R10,15 US$ GROUP BALANCE SHEET US$m US$m US$m ASSETS Non-current assets Tangible assets 651 480 555 Intangible assets - - 1 Deferred tax assets 4 3 4 Environmental rehabilitation trust funds 8 5 6 Investments 25 9 17 688 497 583 Current assets Inventories 133 75 95 Trade and other receivables 114 110 103 Deposits and cash 105 41 76 352 226 274 Total assets 1 040 723 857 EQUITY AND LIABILITIES Capital and reserves Ordinary share capital 1 1 1 Share premium 8 5 6 Non-distributable reserves 21 7 10 Distributable reserves 293 186 235 Shareholders' interest in capital and reserves 323 199 252 Minority interest 247 161 196 Total shareholders' interest 579 360 448 Non-current liabilities Long-term borrowings - interest bearing 158 129 115 Deferred tax liabilities 61 32 48 Long-term provisions 25 18 21 244 179 184 Current liabilities Trade and other payables 60 51 62 Provisions 7 5 6 Taxation 8 6 4 Derivative instruments - - 5 Overdrafts and short-term borrowings 151 122 148 226 184 225 Total equity and liabilities 1 040 723 857 US$ GROUP INCOME STATEMENT Half-year ended Year ended 31 December 30 June 2002 2001 2002 US$m US$m US$m Revenue 232 179 399 Cost of sales 181 137 294 Gross profit 51 42 105 Other operating income 23 16 21 Other operating expenses 35 35 47 Profit from operationgs 39 23 79 Interest received 5 3 5 Finance costs 11 8 16 Profit before taxation and exceptional items 33 18 68 Exceptional items 1 (125) (107) Profit/(loss) before taxation 34 (107) (39) Taxation 13 14 31 Profit/(loss) after taxation 21 (121) (70) Minority interest 9 1 16 Earnings 12 (122) (86) Headline earnings 11 4 20 US$ Basic earings per share (cents) 11 (110) (77) Headline earnings per share (cents) 10 4 18 Fully diluted earnings per share (cents) 11 (109) (76) Fully diluted headline earnings per share 10 4 18 (cents) Number of shares in issue at end 112 225 111 159 111 444 of period (thousands) Weighted average number of shares 111 783 110 661 110 977 in issue (thousands) Weighted average number of shares 111 783 110 661 110 977 used in calculating fully diluted earnings per share (thousands) US$ GROUP CASH FLOW STATEMENT Half-year ended Year ended 31 December 30 June 2002 2001 2002 US$m US$m US$m CASH FLOW FROM OPERATING ACTIVITIES Cash receipts from customers 238 178 377 Cash paid to suppliers and employees 217 160 318 Cash generated from operations 21 18 59 Translation adjustment 16 (59) (11) Interest received 5 3 5 Dividends paid to minorities (1) (1) (2) Taxation paid (8) (12) (19) Net cash inflow/(outflow) from operating 22 (59) 16 activities CASH FLOW FROM INVESTING ACTIVITIES Additions to fixed assets to maintain (20) (16) (12) operations Additions to fixed assets to expand operations (6) (64) (108) Proceeds on disposal of investments 1 117 100 Proceeds on dilution of interest in - - 14 investments in subsidiaries Net cash outflow from investing activities (25) 37 (6) CASH FLOW FROM FINANCING ACTIVITIES Funding received from shareholders 1 - 1 Funding received from minority shareholders - 27 26 Long-term borrowings raised 34 34 31 Long-term borrowings repaid (6) - (15) Increase/(decrease) in short-term borrowings 3 (52) (31) Net cash inflow from financing activities 32 9 12 Net increase/(decrease) in cash and cash 29 (13) 22 equivalents Cash and cash equivalents at beginning of 76 54 54 period Cash and cash equivalents at end of period 105 41 76 US$ Statement of changes in equity Share Currency capital trans- Reva- and lation luation Retained premium reserve surplus Other profit Total Rm Rm Rm Rm Rm Rm Half-year ended 31 December 2002 Balance at 30 June 7 (4) 14 - 235 252 2002 Currency translation 1 6 2 - 44 53 reserve Revaluation of listed - - 5 - - 5 investments Earnings - - - - 12 12 Share options 1 - - - - 1 exercised Allocated from - (3) - 1 2 - minority shareholders Balance at 31 9 (1) 21 1 293 323 December 2002 Half-year ended 31 December 2001 Balance at 30 June 8 1 80 3 405 497 2001 Foreign currency (2) - (25) - (97) (124) translation reserve Earnings - - - - (122) (122) Revaluation and - - (52) - - (52) disposal of listed investments Balance at 31 6 1 3 3 186 199 December 2001 Year ended 30 June 2002 Balance at 30 June 8 1 80 3 405 497 2001 Currency translation (1) - (18) - (85) (104) reserve Earnings - - - - (85) (85) Revaluation of listed - - 6 - - 6 investments Disposal of listed - - (54) - - (54) investments Unrealised loss on currency derivative contracts - - - (3) - (5) Other - (5) - - - (5) Balance at 30 June 7 (4) 14 - 235 252 2002 Directors: Executive: RP Menell (Chairman) DN Murray (Chief executive officer) Non-executive: DD Barber PM Baum BE Davison B Frank DE Jowell KW Maxwell JR McAlpine BM Menell Dr MZ Nkosi WA Nairn (Alternated to BE Davison) Group company secretary: RH Phillips Share codes: JSE Securities Exchange South Afirca: AIN ISIN000017141 London Stock Exchange: AGM Registered office: Anglovaal Mining Limited 56 Main Street Johannesburg 2001 South Africa Transfer secretaries: Computershare Investor Services Limited 70 Marshall Street Johannesburg, 2001 South Africa Transfer secretaries' postal address: PO Box 1053 Johannesburg, 2000 South Afirca Telephone (+27 11) 370-5000 Telefax (+27 11) 370-5271/2 London secretaries: St James's Corporate Services Limited 6 St James's Place London SW1A1NP United Kingdom Telephone (020) 7499-3916 Telefax (020) 7491-1989 United Kingdom share registrars: Capita Registrars Balfour House 390/398 High Road llford, Essex IGI 1NQ United Kingdom For further information, please contact: Ebrahim Takolia on (+27 11) 634-0333 or e-mail ebrahimt@avmin.co.za

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