17. Investments in associates
| US$ million | 2007 | 2006 |
|---|---|---|
| At 1 January | 4,780 | 3,165 |
| Net income from associates(1) | 107 | 685 |
| Dividends received(2) | (327) | (276) |
| Other equity movements | 31 | (23) |
| Share of cash injection from associates’ share issues | – | 225 |
| Transfer to assets held for sale | (74) | (64) |
| Transfer to financial asset investments | (606) | – |
| Movement on cash flow hedge reserves | 12 | (24) |
| Movement on available for sale reserves | 10 | – |
| Reversal of impairment | 1 | – |
| Actuarial (loss)/gain on post retirement benefits | (6) | 3 |
| Acquired | 2 | 11 |
| Disposed | (957) | (40) |
| Other capital distributions | (32) | – |
| Transfer from subsidiary | 393 | 1,451 |
| Repayments of capitalised loans(3) | (44) | (219) |
| Currency movements | 51 | (114) |
| At 31 December(4) | 3,341 | 4,780 |
(1) Includes loss in respect of discontinued operations of $90 million (2006: $78 million profit).
(2) Dividends received include $52 million (2006: $35 million) relating to discontinued operations.
(3) Excludes the $43 million (2006: $175 million) redemption by De Beers of preference shares included within financial asset investments.
(4) The fair value of the investments in Tongaat-Hulett and Hulamin at 31 December 2007 are $667 million and $292 million respectively based on the closing share prices. With effect from 30 June 2007 the Group began accounting for these investments as associates under the equity method. The fair value of the investment in AngloGold Ashanti at 31 December 2006 was $5,420 million based on the closing share price. With effect from 2 October 2007 it was transferred to a financial asset investment.
The Group’s total investments in associates comprise:
| US$ million | 2007 | 2006 |
|---|---|---|
| Equity(1) | 2,968 | 4,369 |
| Loans(2) | 373 | 411 |
| Total investments in associates | 3,341 | 4,780 |
(1) Investments in associates at 31 December 2007 include $377 million of goodwill (2006: $515 million).
(2) The Group’s total investments in associates include long term debt interests which in substance form part of the Group’s net investments. These loans are not repayable in the foreseeable future.
The Group’s share of the summarised financial information of associates is as follows:
| US$ million | 2007 | 2006 |
|---|---|---|
| Total non-current assets | 5,734 | 7,919 |
| Total current assets | 1,864 | 2,715 |
| Total current liabilities | (1,254) | (1,961) |
| Total non-current liabilities | (3,003) | (3,893) |
| Group’s share of associates’ net assets | 3,341 | 4,780 |
| Revenue | 5,089 | 4,413 |
| Operating costs | (4,482) | (3,590) |
| Net profit on disposals | 24 | 182 |
| Financing remeasurements | (4) | 1 |
| Net finance costs | (85) | (70) |
| Income tax expense | (303) | (300) |
| Minority interests | (42) | (29) |
| Group’s share of associates’ net income – continuing operations | 197 | 607 |
| Revenue | 1,053 | 1,152 |
| Operating costs | (1,072) | (1,008) |
| Net profit on disposals | 7 | 17 |
| Financing remeasurements | 13 | 25 |
| Net finance costs | (30) | (31) |
| Income tax expense | (51) | (68) |
| Minority interests | (10) | (9) |
| Group’s share of associates’ net income – discontinued operations | (90) | 78 |
| Group’s share of associates’ net income – total Group | 107 | 685 |
Segmental information is provided for primary and secondary reporting segments as follows:
| Net income | Aggregate investment |
|||
|---|---|---|---|---|
| US$ million | 2007 | 2006 | 2007 | 2006 |
| By business segment | ||||
| Platinum | 38 | 40 | 57 | 135 |
| Diamonds | (229) | 337 | 1,802 | 2,062 |
| Coal | 190 | 185 | 702 | 647 |
| Ferrous Metals and Industries | 198 | 44 | 778 | 302 |
| Industrial Minerals | – | 1 | 2 | 2 |
| Total continuing operations | 197 | 607 | 3,341 | 3,148 |
| Gold | (92) | 72 | – | 1,623 |
| Paper and Packaging | 2 | 6 | – | 9 |
| Total discontinued operations | (90) | 78 | – | 1,632 |
| Total Group | 107 | 685 | 3,341 | 4,780 |
| Aggregate investment | ||
|---|---|---|
| US$ million | 2007 | 2006 |
| By geographical segment | ||
| South Africa | 1,704 | 1,860 |
| Rest of Africa | 677 | 1,442 |
| Europe | 98 | (126) |
| North America | 36 | 549 |
| South America | 641 | 687 |
| Australia and Asia | 185 | 368 |
| 3,341 | 4,780 | |
The Group’s share of associates’ contingent liabilities incurred jointly by investors is $190 million (2006: $158 million).
Details of principal associates are set out in note 41.