Entire Annual Report - Anglo American Platinum

Principal Accounting PoliciesThe financial statements are prepared on the historicalcost basis. Set out below are significant features of theCompany’s and the Group’s accounting policies whichare consistent with those applied in the previous yearwith the exception of the newly adopted accountingpolicies referred to in the subsequent paragraphs. Thesepolicies comply with the accounting standards issued bythe International Accounting Standards Committee andthe South African Institute of Chartered Accountants andwith the disclosure requirements of the South AfricanCompanies Act.The Group adopted IAS 28 (AC 110), Accounting forinvestments in associates as a result of acquiring a 22,5%interest in Northam Platinum Limited. The accountingpolicy adopted is described in note 2, Investment in associate.The effect of adopting IAS 28 (AC 110) is evident in theincome statement and balance sheet as reflected inrespect of Income from associate and Investment in associateand the related notes 17 and 19 respectively. There wasno impact on past earnings, as the investment in the associatewas acquired during the year ended 31 December 2000.In order to comply with the revised requirements ofIAS 10 (AC 107), Events after the balance sheet date, theGroup changed the treatment of dividends proposed,whereby dividends and secondary taxation on companies(STC) thereon are recorded when the dividend is declared.The adoption of this treatment as described in theaccounting policy note 8 has the effect that the relatedtaxation charge (STC) is decreased by R411,2 million forthe year ended 31 December 2000 (R24,9 million for theyear ended 31 December 1999). The cumulative effect onAccumulated profits as a result of this treatment is reflected inthe Statements of Change in Shareholders’ Equity.During the year the Group changed its accounting policywith reference to Environmental rehabilitation – Restorationcosts. The effect of the time value of money is now accountedfor in respect of provisions pertaining to Restoration costs.The revised accounting policy is more fully described innote 15 Environmental rehabilitation – Restoration costs of theaccounting policies. The change in this accounting policyhad no material effect on past earnings.The Group has adopted IAS 39 (AC 133) FinancialInstruments: Recognition and Measurement, ahead of its effectivedate. In terms of this accounting standard, reportingenterprises should apply hedge accounting when and onlywhen all requirements set by the standard have beenmet, otherwise financial instruments should be accountedfor on a fair value basis. The fair value basis of accountingwas adopted and the accounting policy is more fully set outin note 13, Financial instruments, of the accounting policies.The early adoption of this standard had no effect on pastearnings.1. ConsolidationThe Group financial statements include the resultsand financial position of Anglo American PlatinumCorporation Limited and its subsidiaries. The resultsof any subsidiaries acquired or disposed of duringthe year are included from the dates control wasacquired and up to the date control ceased. Where anacquisition of a subsidiary is made during thefinancial year, any excess or deficit of the purchaseprice compared with the fair value of the attributablenet assets is recognised as goodwill and accounted foras described in the Goodwill accounting policy note 3.All intergroup transactions and balances areeliminated on consolidation. Unearned profits thatarise between Group entities are eliminated.2. Investment in associateAn associate is an entity, other than a subsidiary, inwhich the Group has a material long-term interestand in respect of which the Group exercises significantinfluence over its operational and financial policies.The results of such investments are accounted forusing the equity method of accounting based on themost recent audited financial statements or unauditedinterim financial statements of such associates.Unrealised profits and losses arising from intercompanytransactions are eliminated. The carryingvalues of investments in associates represent the costof the investment, including unamortised goodwill,140