Financial Statements ANGLO AMERICAN SA FINANCE LIMITED (Incorporated in the Republic of South Africa) Company Registration number 2003/015144/06 Interim Report For the six months ended 30 June 2012 A member of the Anglo American plc group Anglo American SA Finance Limited Contents Company information 2 Directors? approval of the interim report 3 Balance sheet 4 Income statement 5 Statement of comprehensive income 5 Statement of changes in equity 5 Cash flow statement 6 Notes to the financial statements 7 – 14 1 Anglo American SA Finance Limited Company information Directors S. Mayet G.G. Gomwe N.J. Mason-Gordon N.B. Mbazima Resigned 31 August 2012 C. Goosen J.G. Williams K.T. Kweyama Appointed 1 September 2012 Company secretary Anglo Operations Limited Administrative and technical advisers and secretaries Anglo Operations Limited Physical address: Postal address: 44 Main Street P.O. Box 61587 Johannesburg Marshalltown 2001 2107 Registered office 44 Main Street Johannesburg 2001 Preparation of Interim Report The Interim Report was prepared under the supervision of Saleh Mayet CA (SA). 2 Anglo American SA Finance Limited Directors’ approval of the interim report For the six months ended 30 June 2012 The interim financial statements were approved by the Board of Directors on 21 September 2012 and are signed on its behalf by: S. Mayet G.G. Gomwe Director Director JOHANNESBURG 21 September 2012 3 Anglo American SA Finance Limited Balance sheet at 30 June 2012 6 months ended 6 months ended Year ended Rand Note 30.06.12 30.06.11 31.12.11 Deferred tax asset 2 28 720 526 39 648 252 49 192 780 External loans 3 906 708 401 1 538 780 366 1 501 946 953 Loans to group companies 4 12 819 833 824 8 782 835 810 9 302 354 675 Other financial assets (derivatives) 15 237 609 583 126 878 253 187 141 279 Total non-current assets 13 992 872 334 10 488 142 681 11 040 635 687 Trade and other receivables 34 526 115 86 100 123 71 711 699 Loans to group companies 4 7 895 259 440 5 812 934 416 5 009 697 222 Amounts due by group companies 262 883 837 227 595 044 238 012 181 Other financial assets (derivatives) 15 98 069 070 46 149 822 107 113 685 Cash and cash equivalents 15 155 563 302 23 538 940 176 21 129 355 112 Total current assets 23 446 301 764 29 711 719 581 26 555 889 899 Total assets 37 439 174 098 40 199 862 262 37 596 525 586 Short term borrowings 5 - 170 000 000 170 000 000 Trade and other payables 125 586 901 83 713 781 64 340 670 Current tax liability 57 963 881 12 439 583 14 083 149 Deposits from group companies 6 28 824 885 832 33 477 880 326 30 601 096 112 Amounts due to group companies 9 311 211 21 435 886 24 081 376 Other financial liabilities (derivatives) 15 98 069 070 46 149 822 107 113 685 Total current liabilities 29 115 816 895 33 811 619 398 30 980 714 992 Long term borrowings 5 7 937 006 001 5 884 725 452 5 922 786 142 Total non-current liabilities 7 937 006 001 5 884 725 452 5 922 786 142 Total liabilities 37 052 822 896 39 696 344 850 36 903 501 134 Net assets 386 351 202 503 517 412 693 024 452 Equity Share capital and share premium 7 2 910 000 000 210 000 000 210 000 000 Accumulated profit (2 523 648 798) 293 517 412 483 024 452 Equity attributable to equity 386 351 202 503 517 412 693 024 452 shareholder of the Company 4 Anglo American SA Finance Limited Income statement for the six months ended 30 June 2012 6 months ended 6 months ended Year ended Rand Note 30.06.12 30.06.11 31.12.11 Interest income 8 1 475 763 231 1 442 335 387 2 979 259 243 Commitment fee income 735 259 7 224 884 14 142 478 Interest expense 9 (1 152 208 068) (1 101 447 122) (2 341 047 343) Commitment and guarantee fees (35 846 474) (32 393 048) (65 797 795) expense Net interest income 288 443 948 315 720 101 586 556 583 Currency loss (6 541) (30 592) (545 138) Impairment of intercompany loan 4 (3 213 116 418) - - Fair value hedge adjustment 4 904 586 2 601 506 4 006 278 Corporate activity costs (6 615 372) (6 038 906) (13 258 712) (Loss) \ profit before taxation 10 (2 926 389 797) 312 252 109 576 759 011 Income tax expense 11 (80 283 453) (86 420 472) (161 420 334) (Loss) \ profit for the period (3 006 673 250) 225 831 637 415 338 677 Statement of comprehensive income for the six months ended 30 June 2012 6 months ended 6 months ended Year ended Rand 30.06.12 30.06.11 31.12.11 (Loss) \ profit for the year (3 006 673 250) 225 831 637 415 338 677 Total comprehensive income for the year (3 006 673 250) 225 831 637 415 338 677 Statement of changes in equity for the six months ended 30 June 2012 Rand Share capital Share premium Accumulated profit Total Balance at 1 January 2011 10 100 209 989 900 467 686 175 677 686 175 Profit for the period 225 831 637 225 831 637 Dividends paid (400 000 000) (400 000 000) Balance at 30 June 2011 10 100 209 989 900 293 517 412 503 517 412 Profit for the period 189 507 040 189 507 040 Balance at 31 December 2011 10 100 209 989 900 483 024 452 693 024 452 Loss for the period (3 006 673 250) (3 006 673 250) Issue of share capital 10 000 2 699 990 000 2 700 000 000 Balance at 30 June 2012 20 100 2 909 979 900 (2 523 648 798) 386 351 202 5 Anglo American SA Finance Limited Cash flow statement for the six months ended 30 June 2012 6 months ended 6 months ended Year ended Rand Note 30.06.12 30.06.11 31.12.11 Cash flows from operating activities Cash inflow \ (outflow) from operations 56 705 227 (54 427 103) (93 118 757) 12 Income tax paid 13 (15 930 467) (65 958 710) (148 859 534) Net cash inflow \ (outflow) used in 40 774 760 (120 385 813) (241 978 291) operating activities Cash flows from investing activities Interest received 1 450 891 574 1 447 517 143 2 974 023 863 Decrease in external loans 595 238 552 37 171 848 74 005 261 (Increase) \ decrease in loans to group (9 616 164 326) 80 840 539 364 044 322 companies Net cash (outflow) \ inflow from (7 570 034 200) 1 565 529 530 3 412 073 446 investing activities Cash flows from financing activities Interest paid (1 188 085 216) (1 107 208 565) (2 364 853 754) Dividends paid to shareholders - (400 000 400) (400 000 400) Increase \ (decrease) in long term borrowings 2 035 326 844 (71 433 557) (182 682 410) Increase \ decrease) in short term borrowings (170 000 000) - 170 000 000 Proceeds from issue of share capital 2 700 000 000 - - (Increase) \ decrease in net financial assets (derivatives) (45 563 718) 70 132 183 11 273 937 (Decrease) \ increase in deposits from group companies (1 776 210 280) 8 861 303 462 5 984 519 248 Net cash inflow from financing 1 555 467 630 7 352 793 123 3 218 256 621 activities Net (decrease) \ increase in cash and (5 973 791 810) 8 797 936 840 6 388 351 776 cash equivalents Cash and cash equivalents at start of 21 129 355 112 14 741 003 336 14 741 003 336 period Cash and cash equivalents at end of 15 155 563 302 23 538 940 176 21 129 355 112 period 6 Anglo American SA Finance Limited Notes to the financial statements 30 June 2012 1. Accounting policies These interim financial statements („the interim financial statements?) are for the six months ended 30 June 2012 and have been prepared in accordance with IFRS including International Accounting Standard (IAS) 34, Interim Financial Reporting. The interim financial statements have been prepared under the historical cost convention as modified by the revaluation of certain financial instruments . 2. Deferred tax asset 6 months ended 6 months ended Year ended Rand 30.06.12 30.06.11 31.12.11 At 1 January 49 192 780 55 012 890 55 012 890 Charge to income statement (20 472 254) (15 364 638) (5 820 110) At 30 June 28 720 526 39 648 252 49 192 780 Deferred taxation comprises the following: Rand 30.06.12 30.06.11 31.12.11 Fair value adjustment 17 088 399 29 535 397 23 742 069 Derivatives 12 554 119 10 962 382 26 207 226 Other temporary differences (921 992) (849 527) (756 515) 28 720 526 39 648 252 49 192 780 The current expectation regarding the maturity of the deferred taxation balance is: 6 months ended 6 months ended Year ended Rand 30.06.12 30.06.11 31.12.11 Recoverable within 12 months 13 830 998 9 451 036 25 212 218 Recoverable after 12 months 14 889 528 30 197 216 23 980 562 28 720 526 39 648 252 49 192 780 3. External loans 6 months ended 6 months ended Year ended Rand 30.06.12 30.06.11 31.12.11 Main Street 333 Proprietary Limited 873 991 914 895 404 421 897 899 057 Exxaro Resources Limited - 613 920 150 572 992 140 Pamodzi Coal Proprietary Limited 32 716 487 29 455 795 31 055 756 At 30 June 906 708 401 1 538 780 366 1 501 946 953 The loans are unsecured and bear interest based on variable market benchmark rates. The interest is calculated monthly and is payable according to the specific terms of the loans. The loan to Main Street 333 Proprietary Limited is repayable by the end of 2013. The loan to Pamodzi Coal Proprietary Limited has no fixed terms of repayment and is secured by shares in Anglo American Inyosi Coal Proprietary Limited. 7 Anglo American SA Finance Limited Notes to the financial statements (continued) 30 June 2012 4. Loans to group companies 6 months ended 6 months ended Year ended Rand 30.06.12 30.06.11 31.12.11 Long-term Fellow subsidiary companies Anglo Platinum Management Services Proprietary Limited 6 100 000 000 - - Scaw South Africa Proprietary Limited 4 419 973 192 3 353 604 266 3 634 592 840 Anglo American Inyosi Coal Proprietary Limited 5 512 977 050 5 429 231 544 5 667 761 835 16 032 950 242 8 782 835 810 9 302 354 675 Impairment against loan to Scaw South Africa Proprietary Limited (3 213 116 418) - - 12 819 833 824 8 782 835 810 9 302 354 675 Short-term Fellow subsidiary companies Anglo Platinum Management Services Proprietary Limited 2 500 000 000 5 800 131 000 4 996 524 000 Anglo Operations Limited – Coal Division 5 380 482 316 - - Other companies 14 777 124 12 803 416 13 173 222 7 895 259 440 5 812 934 416 5 009 697 222 20 715 093 264 14 595 770 226 14 312 051 897 The long term loan to Anglo Platinum Management Services Proprietary Limited is unsecured and bears interest at a variable rate based on JIBAR. Interest is calculated monthly and payable according to the terms of the drawing. The loan has been provided under a facility maturing in 2015. The short term loan is unsecured and bears interest at a market related interest rate. The loan has been provided under an uncommitted facility. Interest is calculated monthly and payable according to the terms of the drawing. The loan to Scaw South Africa Proprietary Limited is unsecured and bears interest at a variable rate based on JIBAR. Interest is calculated monthly and payable on a six monthly basis. The loan is repayable in 2017. The loan to Anglo American Inyosi Coal Proprietary Limited is unsecured and bears interest at a market rate based on JIBAR. The interest is calculated monthly and payable on a six month basis. The loan has been provided under a project financing facility maturing in 2018. The loans to fellow subsidiary companies are unsecured and bear interest at a variable rate based on the weighted average rate of the Company?s external borrowings. The interest is calculated and payable monthly. The loans have no fixed repayment terms but will become repayable should the committed and uncommitted facilities become repayable (refer note 5). Detailed risk profiles of the above companies are disclosed in their individual financial statement. Other than the impairment of the loan to Scaw South Africa Proprietary Limited, the Directors are of the opinion that there is no reason to doubt the recoverability of these loans since there are no impairment indicators. 8 Anglo American SA Finance Limited Notes to the financial statements (continued) 30 June 2012 5. External borrowings 6 months ended 6 months ended Year ended Rand 30.06.12 30.06.11 31.12.11 Long-term Floating rate notes with a weighted average maturity of 4.5 years (30 June 2011: 4.7 years, 31 December 2011: 4.2 years). Interest is payable at a weighted average rate of 3 month JIBAR plus 1.16% (30 June 2011: 0.5%, 31 December 2011: 0.5%). 798 629 915 199 494 329 199 651 423 Fixed rate bonds with a weighted average maturity of 5.1 years (30 June 2011: 3.9 years, 31 December 2011: 3.4 years). Interest is payable semi annually at a weighted average rate of 9.48% (30 June 2011: 9.77%, 31 December 2011: 9.77%). 2 514 678 054 997 471 646 1 056 283 874 Term loan maturing in 2013 at an effective interest rate of 9.44% per annum. 3 023 698 032 3 087 759 477 3 066 850 845 Bank loans drawn under long term committed facilities of R8.7 billion (30 June 2011: R8.7 billion, 31 December 2011: R8.7 billion) with interest payable at a weighted average rate of JIBAR plus 1.41% (30 June 2011: 1.44%, 31 December 2011: 1.44%) per annum for the relative interest period. 1 600 000 000 1 600 000 000 1 600 000 000 7 937 006 001 5 884 725 452 5 922 786 142 Short-term Bank loans drawn under short term committed facilities of R9.8 billion (30 June 2011: 10.0 billion, 31 December 2011: R10.0 billion) with interest payable at a weighted average rate of JIBAR plus 0.70% (30 June 2011: 0.82%, 31 December 2011: 0.79%) per annum for the relative interest period. - 170 000 000 170 000 000 - 170 000 000 170 000 000 7 937 006 001 6 054 725 452 6 092 786 141 Committed facilities The maturity and interest rate profiles for drawings under facilities are as follows: Long-term committed facilities Weighted average maturity 1.7 years 2.7 years 2.2 years Weighted average interest rate per annum 8.45% 8.43% 8.43% Short-term committed facilities Weighted average maturity - 0.7 years 0.2 years Weighted average interest rate per annum - 8.08% 8.08% 9 Anglo American SA Finance Limited Notes to the financial statements (continued) 30 June 2012 5. External borrowings (continued) Facilities The above facilities have been arranged with a number of financial institutions. The use of these facilities may give rise to interest rate risk due to changes in the market rates. Commitment fees Commitment fees are payable to financial institutions based on the undrawn amount on committed facilities. The commitment fees are due and payable annually in November of each year. Guarantees Anglo American plc (“AA plc”) has guaranteed the Company?s due and punctual observance and performance of all the terms, conditions and covenants under the Company?s Domestic Medium Term Note programme (“the programme”) and certain facilities with external parties. In consideration for this guarantee, AA plc charges the Company a guarantee fee which amounts to 0.30% of the average value issued by the Company under the programme for each quarter of a calendar year (or any part thereof). Anglo American South Africa Limited (“AASA”) has guaranteed the Company?s due and punctual observance and performance of all the terms, conditions and covenants under various facilities/loan agreements with external parties. In consideration for this guarantee, AASA charges the Company a guarantee fee which amounts to 0.25% of the average value of the amounts advanced to the Company and owing by the Company under such agreement for each quarter of a calendar year (or any part thereof). The guarantee fees are due and payable to AASA and AA plc quarterly. 6. Deposits from group companies 6 months ended 6 months ended Year ended Rand 30.06.12 30.06.11 31.12.11 Holding company Anglo American South Africa Limited 19 872 618 551 26 807 540 922 24 754 898 993 Fellow subsidiary companies Term deposits 9 155 546 504 621 703 2 009 683 089 Call deposits 8 943 111 735 6 165 717 701 3 836 514 030 8 952 267 281 6 670 339 404 5 846 197 119 28 824 885 832 33 477 880 326 30 601 096 112 At 30 June 2012 the rate of interest paid on these deposits ranged between 5.30% and 5.72% (30 June 2011: 4.90% and 5.90%; 31 December 2011: 5.15% and 6.20%) per annum. 10 Anglo American SA Finance Limited Notes to the financial statements (continued) 30 June 2012 7. Share capital and share premium Number of Number of Number of shares Rand shares Rand shares Rand 30.06.12 30.06.12 30.06.11 30.06.11 31.12.11 31.12.11 Authorised: Shares of R1 each 50 000 50 000 50 000 50 000 50 000 50 000 Issued: Shares of R1 each 20 100 20 100 10 100 10 100 10 100 10 100 Share premium - 2 909 979 900 - 209 989 900 - 209 989 900 2 910 000 000 210 000 000 210 000 000 The remaining unissued shares are under the control of the directors until the forthcoming annual general meeting. 8. Interest income 6 months ended 6 months ended Year ended Rand 30.06.12 30.06.11 31.12.11 Fellow subsidiary companies 881 627 702 792 520 326 1 608 047 182 Interest and other income 594 135 529 649 815 061 1 371 212 061 1 475 763 231 1 442 335 387 2 979 259 243 9. Interest expense 6 months ended 6 months ended Year ended Rand 30.06.12 30.06.11 31.12.11 Committed facilities 69 767 190 73 606 082 148 486 765 Bonds 101 993 457 54 638 869 109 762 919 Term loan 138 638 981 139 796 805 279 940 501 Net settlement on debt related interest rate swaps (58 146 457) (51 171 943) (101 931 838) 252 253 171 216 869 813 436 258 347 Holding company 628 938 840 568 330 410 1 278 685 288 Fellow subsidiary companies 271 016 057 316 246 899 626 103 708 899 954 897 884 577 309 1 904 788 996 1 152 208 068 1 101 447 122 2 341 047 343 11 Anglo American SA Finance Limited Notes to the financial statements (continued) 30 June 2012 10. Profit before taxation The following items have been included in arriving at profit before taxation: 6 months ended 6 months ended Year ended Rand 30.06.12 30.06.11 31.12.11 Auditors? remuneration - Audit fees current year 313 586 45 600 616 911 - Other services - - 147 060 Fees for services - Administration fee to Anglo Operations Limited 4 572 860 4 596 383 9 218 445 Fair value on interest rate derivative - Fair value on interest rate swap (43 478 545) 69 147 782 9 324 046 - Fair value on hedged interest rate risk 38 573 959 (71 749 288) (13 330 324) Foreign exchange forward contracts - Fair value through profit or loss 1 118 1 510 057 545 138 - Net foreign exchange loss (7 659) (1 540 649) - 11. Income tax expense 6 months ended 6 months ended Year ended Rand 30.06.12 30.06.11 31.12.11 South African normal taxation Current taxation (59 811 199) (71 055 834) (155 600 224) Deferred taxation (note 2) (20 472 254) (15 364 638) (5 820 110) Total income tax charge (80 283 453) (86 420 472) (161 420 334) Tax rate reconciliation 6 months ended 6 months ended Year ended Percentage 30.06.12 30.06.11 31.12.11 South African tax at normal rate 28.00 28.00 28.00 Prior year tax adjustment 0.03 (0.32) - Effective tax rate 28.03 27.68 28.00 12 Anglo American SA Finance Limited Notes to the financial statements (continued) 30 June 2012 12. Reconciliation of profit before tax to cash outflow from operations 6 months ended 6 months ended Year ended Rand 30.06.12 30.06.11 31.12.11 (Loss) \ profit before taxation (2 926 389 797) 312 252 109 576 759 011 Interest income (1 475 763 231) (1 442 335 388) (2 979 259 243) Interest expense 1 173 315 053 1 120 877 904 2 381 168 574 Currency loss 6 541 30 592 545 138 Amortisation of fair value adjustment (21 106 985) (19 430 782) (40 121 240) Fair value hedge adjustment (4 904 586) (2 601 506) (4 006 278) Decrease \ (increase) in operating 37 185 584 (44 919 318) (30 530 894) receivables Increase in operating payables 61 246 230 21 699 286 2 326 175 Impairment of intercompany loan 3 213 116 418 - - Cash inflow \ (outflow) from operations 56 705 227 (54 427 103) (93 118 757) 13. Income tax paid 6 months ended 6 months ended Year ended Rand 30.06.12 30.06.11 31.12.11 Balance at start of period (14 083 149) (7 342 459) (7 342 459) Income tax charge (Note 11) (59 811 199) (71 055 834) (155 600 224) Balance at end of period 57 963 881 12 439 583 14 083 149 (15 930 467) (65 958 710) (148 859 534) 14. Related party transactions The Company enters into various financial transactions with group companies. These transactions are in the ordinary course of business and are conducted on an arms-length basis. Loans to group companies are disclosed in note 4 and deposits from group companies are disclosed in note 6. A guarantee fee, amounting to R3 914 199 (30 June 2011: R4 027 870; 31 December 2011: R8 122 500) was due to Anglo American South Africa Limited in respect of the period under review (refer note 5). As at 30 June 2012 an amount of R2 025 062 (30 June 2011: R2 025 062; 31 December 2011: R2 047 315) was still outstanding and is included in “Amounts due to group companies” on the balance sheet. A guarantee fee amounting to R5 875 623 (30 June 2011: R4 413 823; 31 December 2011: R9 103 933) was due to Anglo American plc in respect of the period under review (refer note 5). As at 30 June 2012 an amount of R3 590 138 (30 June 2011: R2 593 398; 31 December 2011: R2 245 808) was still outstanding and is included in “Trade and other payables” on the balance sheet. Interest received from group companies is disclosed in note 8. Interest paid to group companies is disclosed in note 9. Administration fees paid to a group company is disclosed in note 10. A commitment fee amounting to R735 259 (30 June 2011: R6 945 432; 31 December 2011: R13 863 026) was receivable from Anglo Platinum Management Services (Pty) Limited in respect of the period under review 30 June 2012. As at 30 June 2012 an amount of R4 335 (30 June 2011: R1 620 444; 31 December 2011: R8 538 038) was still outstanding and is included in “Trade and other receivables” on the balance sheet. 13 Anglo American SA Finance Limited Notes to the financial statements (continued) 30 June 2012 15. Derivatives and other financial instruments 15(a) Fair value of financial assets and liabilities The estimated fair value of financial instruments approximates their carrying value. Derivatives instruments as at 30 June 2012: Estimated Estimated Net fair value fair value carrying Rand asset liability value Derivatives to manage foreign exchange risks 98 069 070 98 069 070 - Derivatives to manage interest rate risk 237 609 583 - 237 609 583 335 678 653 98 069 070 237 609 583 Derivatives instruments as at 30 June 2011: Estimated Estimated Net fair value fair value carrying Rand asset liability value Derivatives to manage foreign exchange risks 46 149 822 46 149 822 - Derivatives to manage interest rate risk 126 878 253 - 126 878 253 173 028 075 46 149 822 126 878 253 Derivatives instruments as at 31 December 2011: Estimated Estimated Net fair value fair value carrying Rand asset liability value Derivatives to manage foreign exchange risks 107 113 685 107 113 685 - Derivatives to manage interest rate risk 187 141 279 - 18 141 279 294 254 964 107 113 685 187 141 279 The fair value of the derivative instruments is determined by reference to market prices where available, otherwise pricing or valuation models are applied to current market information to estimate their value. 15(b) Undrawn borrowing commitments The Company had the following undrawn committed borrowing facilities at: Rand 30.06.12 30.06.11 31.12.11 Expiry date In one year or less 11 282 000 000 9 782 000 000 9 782 000 000 Between one and two years 1 818 000 000 1 500 000 000 1 500 000 000 In more than two years 3 800 000 000 5 618 000 000 5 618 000 000 16 900 000 000 16 900 000 000 16 900 000 000 14 Date: 27/09/2012 03:15:00 Produced by the JSE SENS Department. 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