AngloGold Limited conducts mining operations in Africa, North and South America and Australia and undertakes exploration activities worldwide. In addition, the company is involved in the manufacturing, marketing and selling of gold products, as well as the development of markets for gold.

Following the initial announcement in May 2003 regarding the proposed merger between AngloGold and Ashanti Goldfields Company Limited, the detailed terms were announced on 4 August 2003. Shareholders have continually been updated regarding negotiations with Ashanti and other parties involved in the transaction. It is proposed that, subject to a scheme of arrangement being approved by Ashanti shareholders and the High Court of Ghana, Ashanti shareholders will be entitled to receive 29 AngloGold shares for every 100 Ashanti shares held. AngloGold shareholders in general meeting will be asked to approve a change of name of the company to AngloGold Ashanti Limited. A separate circular will be sent regarding the change of name and, assuming all approvals are received, the merger is expected to be effective and the name changed on 26 April 2004.

All the issued A and B redeemable preference shares are held by a wholly owned subsidiary and further details of the authorised, issued and unissued shares, as well as the share premium, are given in note 27 to the group’s financial statements.

At the annual general meeting to be held on 29 April 2004, shareholders will be asked to consider an ordinary resolution placing the number of unissued ordinary shares, exclusive of the number of shares reserved for purposes of the Share Incentive Scheme as at that date, under the control of the directors until the next annual general meeting.

In terms of the Listings Requirements of the JSE Securities Exchange South Africa (JSE), shareholders may, subject to certain conditions, authorise the directors to issue the shares held under their control for cash other than by means of a rights offer to shareholders. In order that the directors of the company may be placed in a position to take advantage of favourable circumstances which may arise for the issue of such shares for cash without restriction for the benefit of the company, shareholders will be asked to consider an ordinary resolution to this effect at the forthcoming annual general meeting.

The company has not exercised the general approval to buy back shares from its issued ordinary share capital granted at the annual general meeting held on 30 April 2003. At the next annual general meeting shareholders will be asked to renew the general authority for the acquisition by the company, or a subsidiary of the company, of its own shares.

As AngloGold is not incorporated in Australia, the acquisition of its shares by another company or person is not subject to the takeovers and substantial holding provisions of Chapter 6 of the Australian Corporations Act. However, AngloGold is required to comply with those provisions in the case of a bid for an Australian company.

At 31 December 2003, the company had in issue through The Bank of New York as Depositary, and listed on the New York Stock Exchange (NYSE), 36,753,386 (2002: 39,879,957) American Depositary Shares (ADSs). Each ADS is equal to one ordinary share.

At 24 February 2004, there were 36,017,376 ADSs in issue and listed on the NYSE.

As approved by shareholders, AngloGold operates two share incentive schemes (as detailed below), for the purpose of providing an incentive to executive directors, executive officers and managers of the company and its subsidiaries to identify themselves more closely with the fortunes of the group and its continued growth, and also to promote the retention of such employees by giving them an opportunity to acquire shares in the company. Employees participate in the schemes to the extent that they are granted options and accept them.

The maximum number of ordinary shares that may be allocated for the purposes of the schemes, equivalent to 2.75% of the total number of ordinary shares in issue at that date, is:

The maximum aggregate number of shares which may be acquired by any one participant in the scheme is 300,000.

All options which have not been exercised within ten years from the date on which they were granted automatically lapse, unless otherwise stated.

Non-executive directors are not eligible for participation in the share incentive schemes.

This share incentive scheme provides for the granting of options, based on two separate criteria:

Time-related options were approved by shareholders at the general meeting held on 4 June 1998, and amended by shareholders at the annual general meeting held on 30 April 2002.

Time related options granted, may be exercised as follows:

No further options will be granted under this plan which will terminate on 1 February 2012, being the date on which the last options may be exercised or will expire.

Performance-related options were approved by shareholders at the annual general meeting held on 30 April 2002.

Performance related options granted, may be exercised in full, three years after date of grant, provided that the condition on which the options were granted, namely related to the performance of the company, as determined by the directors, are met.

As is required to be disclosed in terms of the AngloGold Share Incentive Scheme and stock exchange regulations, the movement in respect of options granted and the ordinary shares issued as a result of the exercise of options during the period 1 January 2003 to 24 February 2004 was as follows:

The company’s wholly owned subsidiary, AngloGold Australia Limited (originally Acacia Resources Limited) operated the Acacia Employee Option Plan for certain of its employees. In terms of this plan, on exercising of options, a ratio of seven AngloGold ordinary shares for every
100 options held was applicable. The issue price of the AngloGold shares was calculated using the A$/R exchange rate ruling on the date of allotment. At 31 December 2003, all options granted in terms of the Acacia Employee Option Plan had been exercised or lapsed and the plan has now been terminated.

The movement in respect of options during the period 1 January 2003 to 31 December 2003 was as follows:

The financial statements set out fully the financial position, results of operations and cash flows of the group and the company for the financial year ended 31 December 2003. A synopsis of the financial results for the year is set out in the Financial Review on pages 10 to 13.

The performance of the various regions are comprehensively reviewed on pages 18 to 30.

The company’s dividend policy is to declare an interim and a final dividend in respect of each financial year and to pay out a high proportion of its earnings after providing for long-term growth. This policy is reviewed by the board from time to time in the light of the group’s cash requirements and financial position.

Shareholders who have dematerialised their ordinary shares receive payment of their dividends electronically, as provided for by STRATE. For those shareholders who have not yet dematerialised their shares, or who may intend retaining their shareholding in the company in certificated form, the company operates an electronic funds transmission service, whereby dividends may be electronically transferred to shareholders’ bank accounts. These shareholders are encouraged to mandate this method of payment for all future dividends.

On 21 August 2003, AngloGold launched and priced an issue of senior unsecured 10.5% bonds due on 28 August 2008 in an aggregate principal amount of R2,000m. The bonds, the proceeds of which are for general corporate purposes, are listed on the Bond Exchange of South Africa.

The company’s borrowing powers are unlimited. At 31 December 2003, the group’s borrowings totalled $1,158m, R7,723m (2002: $926m, R7,938m).

On 13 March 2003, AngloGold announced that its wholly owned subsidiary, AngloGold Australia Limited, had signed a new joint venture agreement with Striker Resources NL and De Beers Australia Exploration Limited, to undertake further exploration work covering an area in excess of 17,000km² in the east Kimberley region of Western Australia. An expenditure of $4.61m (A$7.75m) entitles AngloGold to a 51% return on income.

On 23 May 2003, AngloGold announced that it had signed an agreement to sell its wholly-owned Amapari project to Mineração Pedra Branca do Amapari, for the total consideration of $18.2m. The Amapari project is located in the State of Amapá, North Brazil. Since acquiring the property from Minorco, AngloGold has sought to prove up additional reserve ounces in order to get it to a size and life that would justify the management resources needed to run it effectively. This was not achieved and AngloGold, on receiving a fair offer from a purchaser who could constructively turn this orebody to account, agreed to sell.

On 6 June 2003, AngloGold announced that it had finalised the sale of its 49% stake in the Gawler Craton Joint Venture, including the Tunkillia project located in South Australia to Helix Resources Limited. Consideration for the sale comprised cash of $500,000 (A$750,000), 1.25m fully-paid Helix shares issued at A$0.20 per share and 1.25m Helix options exercisable at A$0.25 per option before 30 November 2003 with an additional payment of $335,000 (A$500,000) deferred to the delineation of a mineable resource of 350,000 ounces. Helix’s proposed acquisition of AngloGold’s rights to the Tarcoola Project, 60km to the south, was excluded from the final agreement. This resulted in a restructure of the original agreement terms, as announced on 8 April 2003.

With effect from 30 June 2003, the company disposed of its 70% interest in the Jerritt Canyon Joint Venture to Queenstake Resources USA Inc. In terms of the agreement of sale, Queenstake paid to the Joint Venture partners, AngloGold and Meridian Gold, $1.5m in cash and 32m shares issued by a subsidiary, Queenstake Resources Limited, with $6m in deferred payments and $4m in future royalty payments. Queenstake accepted full closure and reclamation liabilities. During November 2003 AngloGold sold its entire equity interest in Queenstake Resources for a consideration of $9.4m, resulting in a profit of $3m.

On 18 September 2003 AngloGold and Gold Fields jointly announced that agreement had been reached on the sale by Gold Fields of a portion of the Driefontein mining area, known as Block 1C11, to AngloGold for a cash consideration of R315m. The area can be accessed from AngloGold’s adjacent TauTona mine and is estimated to contain 1.4Mt of reserves at a grade of 12.7g/t, which should result in recoverable gold of 576,000oz.

On 14 November 2003 AngloGold announced that it had entered into an agreement with Greater Pacific Gold Limited, for the sale of its Union Reefs Gold Mine at Pine Creek, which closed in October 2003, together with associated assets and tenements. The staged purchase consideration for these assets is A$6.2m. The effective date of sale has not yet been finalised.

On 24 November 2003, AngloGold announced its agreement to sell its Western Tanami Project to Tanami Gold NL for a staged payment of A$9m, the receipt of 25m Tanami Gold shares and the payment of a royalty based on production. In November, an initial payment of A$250,000 was received and in January 2004, a cash payment of A$3.75m and the 25m shares were received. AngloGold Australia is currently Tanami Gold’s largest shareholder with a 10.25% interest. The Western Tanami Project comprises an established exploration camp and associated equipment, a number of exploration licences in northern Western Australia and includes the Coyote gold deposit.

Particulars of the group’s principal subsidiaries and joint venture interests are reflected on page 148.

In February 2004, AngloGold’s wholly owned subsidiary incorporated in the Isle of Man, AngloGold Holdings plc, issued $1,000m 2.375% Guaranteed Convertible Bonds due 2009. The bonds, which are guaranteed by AngloGold, are convertible into AngloGold American Depositary Shares (ADSs) at a strike price of $65 per ADS at the option of the holder. The proceeds of the bonds will be used to repay outstanding indebtedness, to pay transaction costs associated with the proposed merger with Ashanti Goldfields Company and for general corporate purposes, including planned capital expenditure. The bonds have been admitted to the Official List of the United Kingdom Listing Authority and to trading on the London Stock Exchange’s market for listed securities. Further information in respect of the bonds is given in note 38 to the group’s financial statements.

At the 59th annual general meeting held on 30 April 2003, shareholders passed ordinary resolutions relating to:

Details concerning the special resolutions passed by shareholders at this meeting are disclosed above.

Notice of the 60th annual general meeting, which is to be held in Johannesburg at 11:00 on Thursday, 29 April 2004, is enclosed as a separate document with the annual report. Additional copies of the notice of meeting may be obtained from the company’s corporate contacts and the share registrars or may be accessed from the company’s website.

The directors retiring by rotation at the forthcoming annual general meeting in terms of the articles of association are Mr J G Best,
Mrs E le R Bradley, Mr J Ogilvie Thompson, Mr N F Oppenheimer and Mr A J Trahar. Mr Ogilvie Thompson and Mr Oppenheimer have advised that they wish to retire from the board and, therefore, have not made themselves available for re-election. However, Mr J G Best, Mrs E le R Bradley and Mr A J Trahar, being eligible, offer themselves for re-election.

The names of the directors and alternate directors of the company in office at the date of this report are listed on page 156.

Biographies of the board of directors appear on pages 37 and 38.

There has been no change in the offices of managing secretary and company secretary whose names and business and postal addresses are set out on page 156.

The interests of the directors and alternate directors in the ordinary shares of the company at 31 December 2003, which did not individually exceed 1% of the company’s issued ordinary share capital, were:

* Restated.
 
There have been no changes in the above interests since 31 December 2003.
A register detailing directors’ and officers’ interests in contracts is available for inspection at the company’s registered and corporate office.