Notes to the group financial statements

SA rand					US dollar
2009	2010	Figures in million			2010	2009
		31	Cash generated by operations
			All amounts disclosed include discontinued operations.
			Reconciliation of profit before taxation to cash generated by operations:
3 851	143		Profit before taxation⁽¹⁾		20	405
			Adjustments for:
1 467	1 375		Amortisation and depreciation		181	167
484	331		Impairment of assets		43	61
(2 751)	(104)		Profit on sale of mining assets		(14)	(287)
6	(14)		Net (decrease)/increase in provision for post retirement benefits		(3)	1
3	18		Net increase in provision for environmental rehabilitation		2	–
(12)	(56)		(Profit)/loss from associates		(7)	(1)
112	–		Impairment of investment in associate		–	14
113	148		Share-based payments		20	13
101	(38)		Net (gain)/loss on financial instruments		(5)	10
(1)	–		Profit on sale of investment in associate		–	–
–	24		Loss on sale of investment in subsidiary		3	–
(2)	(3)		Dividends received		–	–
(455)	(184)		Interest received		(25)	(51)
232	229		Interest paid		30	26
100	(16)		Provision for doubtful debts		(2)	11
31	29		Bad debts written off		4	3
5	42		Other non cash transactions		8	–
			Effect of changes in operating working capital items:
(132)	(100)		Receivables		(13)	(15)
(177)	(153)		Inventories		(20)	(20)
(162)	(60)		Accounts payable and accrued liabilities		(8)	(18)
2 813	1 611		Cash generated by operations		214	319
			⁽¹⁾Includes discontinued operations

			Additional cash flow information
			The income and mining taxes paid in the statement of cash flow represents actual cash paid less refunds received.

			Acquisitions and disposals of subsidiaries/businesses:
			For the financial year ended June 2010
			(a)	Disposal of Big Bell Operations

				On 10 January 2010, the group concluded the sale of Big Bell Operations (Proprietary) Limited, a wholly owned subsidiary operating in Western Australia, for a total consideration of R24 million (US$3.2 million).

				The aggregate fair values of assets and liabilities sold were:
–	64			Property, plant and equipment	8	–
–	(45)			Rehabilitation liability	(6)	–
–	5			Profit on disposal	1	–
–	24			Proceeds received in cash	3	–

			(b)	Acquisition of Pamodzi FS assets.
				On 18 February 2010, the group concluded the acquisition of the Pamodzi FS assets for a total consideration of R405 million, of which R280 million (US$36 million) is attributable to property, plant and equipment and R120 million (US$16 million) to inventories.

			The principal non-cash transactions for the year were the issue of shares for the acquisition of 26% share of the mining titles on Doornkop South Reef from AVRD (refer to note 25) and share-based payments (refer to note 34).

			For the financial year ended June 2009
			(a)	Disposal of Randfontein Cooke Assets
				During the year, the group disposed of its Cooke and Old Randfontein assets to Rand Uranium, a wholly owned subsidiary. In a related transaction, 60% of Rand Uranium’s shares were disposed of to PRF in two tranches. For details, refer to note 21(b).

				The aggregate fair value of the assets and liabilities sold were:
				Transaction one
449	–			Property, plant and equipment	–	42
35	–			Environmental trust fund	–	3
(41)	–			Rehabilitation liability	–	(4)
(19)	–			Other costs	–	(2)
(25)	–			Foreign exchange movements	–	5
1 627	–			Profit on disposal	–	153
2 026	–			Proceeds received in cash	–	197
				Transaction two
12	–			Property, plant and equipment	–	1
73	–			Environmental trust fund	–	8
(116)	–			Rehabilitation liability	–	(13)
(19)	–			Foreign exchange movements	–	(2)
159	–			Profit on disposal	–	18
109	–			Proceeds received in cash	–	12

			(b)	MMJV
				During the year Harmony and Newcrest entered into a joint venture agreement, which provided that Newcrest would purchase a 30.01 participating interest and a further buy-out of an additional 19.99% participating interest in Harmony's MMJV gold and copper assets.
				The aggregate fair value of the assets and liabilities sold were:
				Stage 1: 30.01% participating interest
1 404	–			Property, plant and equipment	–	185
42	–			Trade and other receivables	–	6
7	–			Inventory	–	1
(74)	–			Long-term loans	–	(10)
(3)	–			Rehabilitation liability	–	–
–	–			Foreign exchange movements	–	(11)
416	–			Profit on disposal	–	58
1 792	–			Proceeds received in cash	–	229
			Stage 2: 10% participating interest
512	–		Property, plant and equipment		–	52
7	–		Trade and other receivables		–	1
8	–		Inventory		–	1
(30)	–		Long-term loans		–	(3)
(50)	–		Trade and other payables		–	(5)
(1)	–		Rehabilitation liability		–	–
439	–		Profit on disposal		–	44
885	–		Disposal proceeds		–	90
-	–		Proceeds received in cash		–	–
885	–		Proceeds received by way of the farm-in agreement		–	90
			Stage 3: 9.99% Participating interest
556	–		Property, plant and equipment		–	72
13	–		Trade and other receivables		–	2
24	–		Inventory		–	3
(21)	–		Long-term loans		–	(3)
(45)	–		Trade and other payables		–	(6)
(22)	–		Rehabilitation liability		–	(3)
76	–		Profit on disposal		–	10
581	–		Disposal proceeds		–	75
(47)	–		Proceeds received in cash		–	(6)
534	–		Proceeds received by way of the farm-in agreement		–	69

			The principal non-cash transactions for the year were the acquisition of PNG royalty agreement (refer to note 16(c)), share-based payments (refer to note 34) and share exchange of Dioro for Avoca (refer to note 20(b)).

31

Cash generated by operations