The directors believe that the group complies with the provisions of the King Report's Code of Corporate Practices and Conduct.

Financial statements
The directors are required by the South African Companies Act to maintain adequate accounting records and to prepare financial statements which fairly present the state of affairs of the company and the AngloGold group at the end of the financial year, and the results of operations and cash flows for the year, in conformity with generally accepted accounting practice.

In preparing the statutory annual financial statements reflected in both South African rand and United States dollars on pages 34 to 68, the group has consistently used appropriate accounting policies supported by reasonable and prudent judgements and estimates, and has complied with all applicable accounting standards generally adopted by the mining industry in South Africa. The directors are of the opinion that these financial statements fairly present the financial position of the company and the group at 31 December 1998, and the results of these operations and cash flow information for the year then ended.

The directors have reviewed the group's budget and cash flow forecast for the year to 31 December 1999. On the basis of this review, and in the light of the current financial position and existing borrowing facilities, the directors are satisfied that AngloGold is a going concern and have continued to adopt the going-concern basis in preparing the financial statements.

The external auditors, Ernst & Young, are responsible for independently auditing and reporting on the financial statements in conformity with generally accepted South African auditing standards. Their unqualified report on these financial statements appears on page 33.

For the convenience of international investors, the financial statements of the company and the group for the year ended 31 December 1998, based on International Accounting Standards (IAS), and reflecting amounts in United States dollars and in South African rand, are included on pages 71 to 92 The report of the external auditors on these financial statements is set out on page 70.

As part of the process of listing on the New York Stock Exchange (NYSE) during August 1998, the company was required to register with the United States Securities and Exchange Commission (SEC). To comply with requirements for reporting by non-US companies registered with the SEC, the company has prepared a set of financial statements in accordance with US generally accepted accounting principles which are available from the Bank of New York to holders of the company's securities listed in the form of American Depositary Shares on the NYSE. Copies of these particular financial statements are also available to stakeholders and other interested parties upon request to the company's registered office.

Internal control
To enable the directors to fulfil their responsibilities, the group maintains systems of internal control which are designed to provide reasonable assurance that the accounting records accurately reflect the transactions of the group and provide protection against serious risk of error or loss in a cost-effective manner.

To combat the incidence of gold theft at the group's South African mining operations, a multi-disciplinary gold control project team was established during 1998. The objective of the team is to audit gold control procedures and monitor performance in this regard.

The appropriateness of the internal controls is independently appraised by an internal audit department. Regular meetings are held between management and the internal and external auditors to review matters relating to internal accounting controls, auditing and financial reporting. The directors are of the opinion, based on the information and explanations given by management and the internal auditors, and on comment by the external auditors on the results of their audit, that internal accounting controls are adequate, so that the accounting records may be relied on for preparing the group financial statements and maintaining accountability for assets and liabilities. The directors believe that, in all material respects, assets are protected and used as intended with appropriate authorisation. Nothing has come to the attention of the directors to indicate that any material breakdown in these controls has occurred during the year under review.

The external auditors concur with the above statements by the directors regarding internal accounting controls.

Board and committee structure
The company has a unitary board structure comprising 12 non-executive directors, five of whom, including the chairman, are directors of AngloGold's holding company, with the seven remaining being independent of management. Non-executive directors derive no benefits from the company for their services as directors other than their fee. The non-executive directors are of a high calibre and sufficient number for their independent views to carry significant weight in the board's deliberations and decisions. There are also three executive directors including the chief executive officer. No executive directors hold service contracts. All directors are subject to retirement by rotation and re-election by shareholders at least once every three years in accordance with the company's articles of association. The appointment of new directors is approved by the board as a whole.

The board retains full and effective control over the company, meeting on a quarterly basis with additional meetings being arranged when necessary, to review strategy, planning, operational performance, acquisitions and disposals, major capital expenditure, stakeholder communications and other material matters reserved for its decision. The board is also responsible for monitoring the activities of executive management within the group.

The directors have access to the advice and services of a managing secretary, as well as a company secretary, who are both responsible to the board for ensuring compliance with procedures and regulations of a statutory nature. Directors are entitled to seek independent professional advice concerning the affairs of the group at the group's expense, should they believe that course of action would be in the best interests of the group.

The board has established a number of standing committees in which, with the exception of the Executive Committee, the non-executive directors play an active role, particularly in the capacity as chairman of the committee concerned. All standing committees operate within written terms of references established by the board. Remuneration of non-executive directors for their services on the various committees has been determined by the board.