Directors’ report

Nature of business

AngloGold Ashanti 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.

Shareholders holding 10% or more of AngloGold Ashanti’s issued share capital

Paulson & Co. Inc, an investment management company from the United States, holds 41,000,000 AngloGold Ashanti ADRs or some 10.76% of the issued share capital.

Share capital

Authorised

The authorised share capital of AngloGold Ashanti as at 31 December 2010 was made up as follows:

The following are the movements in the issued and unissued share capital from the beginning of the accounting period to the date of this report:

Issued

Ordinary shares

  Number
of shares
Rand Number
of shares
Rand
  2010 2009
At 1 January 362,240,669 90,560,167 353,483,410 88,370,853
Issued during year        
– Equity offering to fund the initial effective 35% interest in the Kibali gold project 7,624,162 1,906,041
– Equity raising – proceeds used to part fund the hedge elimination 18,140,000 4,535,000    
– Bokamoso ESOP on conversion of E ordinary shares 1,181 295
– Exercise of options by participants in the AngloGold Share Incentive Scheme 823,411 205,853 1,131,916 282,979
At 31 December 381,204,080 95,301,020 362,240,669 90,560,167
Issued subsequent to year-end        
– Exercise of options by participants in the AngloGold Share Incentive Scheme 2,812 703    
At 31 January 2011 381,206,892 95,301,723    

E ordinary shares

On 11 December 2006, shareholders in general meeting authorised the creation of a maximum 4,280,000 E ordinary shares to be issued pursuant to an Employee Share Ownership Plan and a black economic empowerment transaction (BEE transaction). All E ordinary shares have been issued.

  Number
of shares
Rand Number
of shares
Rand
  2010 2009
At 1 January 3,794,998 948,749 3,966,941 991,735
Cancelled in exchange for ordinary shares in terms of the cancellation formula (988,872) (247,218) (171,943) (42,986)
At 31 December 2,806,126 701,531 3,794,998 948,749
Cancelled subsequent to year-end        
– Cancelled and exchanged for ordinary shares issued in terms of the cancellation formula (16,360) (4,090)    
At 31 January 2011 2,789,766 697,441    

In terms of the authority granted by shareholders, on vesting, E ordinary shares are cancelled in exchange for ordinary shares, in accordance with the cancellation formula. All E ordinary shares which are cancelled may not be re-issued and therefore, does not form part of the unissued share capital of the company.

E ordinary share capital amounting to R89,954,970 in respect of 988,872 vested, unconverted and cancelled E ordinary shares, was transferred to ordinary share premium during 2010. E ordinary shares do not convert to ordinary shares in the instance when the market price of an AngloGold Ashanti ordinary share is less than the value of the E ordinary share as calculated in accordance with the cancellation formula.

On 1 November 2009, the first tranche of the E ordinary shares issued to the Bokamoso ESOP and to Izingwe Holdings (Pty) Limited (Izingwe) vested. In terms of the rules, if at the date of the vesting the cost price of the E Ordinary shares as calculated in accordance with the cancellation formula is greater than the market price on the last business day prior to the date of vesting, then the conversion of the E ordinary shares will be deferred. In respect of the Bokamoso ESOP and Izingwe, vesting was deferred to 1 May 2010 at which time the E ordinary shares were cancelled without benefit.

On 1 November 2010, the second tranche of the E ordinary shares issued to the Bokamoso ESOP and to Izingwe vested. In terms of the rules, if at the date of the vesting the cost price of the E Ordinary shares as calculated in accordance with the cancellation formula is greater than the market price of the last business day prior to the date of vesting, then the conversion of the E ordinary shares will be deferred. In respect of the Bokamoso ESOP vesting has been deferred to 1 May 2011 at which time, the E ordinary shares will either be exchanged for AngloGold Ashanti ordinary shares or will be cancelled without benefit, as calculated in accordance with the cancellation formula. In respect of the E ordinary shares issued to Izingwe, and in accordance with the rules, notice was received from Izingwe deferring vesting. Izingwe has during the period 1 November 2010 to and including 1 May 2011 (extended vesting period), the option to exercise its rights to exchange the E ordinary shares for AngloGold Ashanti ordinary shares on the giving of such notice to do so, in accordance with the cancellation formula. Any E ordinary shares that are unexercised during the extended vesting period will be cancelled.

Redeemable preference shares

The A and B redeemable preference shares, all of which are held by wholly owned subsidiary, Eastvaal Gold Holdings Limited, may not be transferred and are redeemable from the realisation of the assets relating to the Moab lease area after the cessation of mining operations in the area. The shares carry the right to receive dividends equivalent to the profits (net of royalty, ongoing capital expenditure and taxation) from operations in the area. No further A and B redeemable preference shares will be issued.

Further details of the authorised and issued shares, as well as the share premium, are given in note 25 to the group’s financial statements.

Unissued

  Ordinary number
of shares
  2010 2009
At 1 January 237,759,331 46,516,590
Authorised during the year 200,000,000
Issued during year (18,963,411) (8,757,259)
At 31 December 218,795,920 237,759,331
Issues subsequent to year-end (2,812)  
At 31 January 2011 218,793,108  

Ordinary shares under the control of directors

Pursuant to the authority granted by shareholders at the annual general meeting held on 7 May 2010, 5% of the number of shares in issue, from time to time, are placed under the control of the directors to allot and issue, for such purposes and on such terms as they may, in their discretion, determine. This authority expires, unless renewed, at the annual general meeting to be held on 11 May 2011.

At 31 December 2010, the total number of shares placed under the control of the directors was 19,060,204. In September 2010, the directors issued 18,140,000 ordinary shares in an equity offering, the proceeds from which were applied to eliminate, in part, the hedge book.

In terms of the Listings Requirements of the JSE, shareholders may, subject to certain conditions, authorise the directors to issue the ordinary shares held under their control for cash other than by means of a rights offer to shareholders. To enable the directors of the company to take advantage of favourable business opportunities which may arise for the issue of such ordinary 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 annual general meeting to be held on 11 May 2011.

At the annual general meeting to be held on 11 May 2011, shareholders will be asked to approve as a general authority, the acquisition by the company, or a subsidiary of the company, of its own shares from its issued ordinary share capital.

Depositary interests

American Depositary Shares

At 31 December 2010, the company had in issue, through The Bank of New York Mellon as Depositary and listed on the New York Stock Exchange (NYSE), 182,168,922 (2009: 176,762,305) American Depositary Shares (ADSs). Each ADS is equal to one ordinary share. At 31 January 2011, there were 182,168,922 ADSs in issue and listed on the NYSE.

CHESS Depositary Interests

At 31 December 2010 and 31 January 2011, the company had in issue through the Cleaning House Electronic Sub-register System (CHESS), and listed on the Australian Securities Exchange (ASX), 91,144,165 (2009: 91,443,205) CHESS Depositary Interests (CDI). Every 5 CDIs has one underlying AngloGold Ashanti ordinary share and carries the right to one vote.

Ghanaian Depositary Shares

At 31 December 2010 and 31 January 2011, the company had in issue, through NTHC Limited as Depositary and listed on the Ghana Stock Exchange (GhSE), 11,496,018 and 6,612,642 (2009: 11,512,534) Ghanaian Depositary Shares (GhDSs) respectively. Every 100 GhDSs has one underlying AngloGold Ashanti ordinary share and carries the right to one vote.

AngloGold Share Incentive Scheme

AngloGold Ashanti operates a share incentive scheme through which executive directors, executive vice presidents and management groups of the company and its subsidiaries are given the opportunity to acquire shares in the company. The objective is to incentivise such employees to identify themselves more closely with the fortunes of the group and its continued growth and to promote the retention of such employees.

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

At the annual general meeting held on 7 May 2010, shareholders authorised that 17,000,000 shares may be allocated for the purposes of the scheme. Prior to this authorisation, the maximum number of shares attributable to the scheme was 2.75% of the total number of ordinary shares in issue from time to time. The maximum aggregate number of shares which may be acquired by any one participant in the scheme is 5% of the shares attributable to the scheme or 850,000 ordinary shares per employee could be issued in aggregate (2009: 498,080).

Employees participate in the share incentive scheme to the extent that they are granted options or rights to acquire shares and accept them. All options or rights which have not been exercised within ten years from the date on which they were granted, automatically expire.

The incentives offered by AngloGold Ashanti are reviewed periodically to ensure that they remain globally competitive, so as to attract, reward and retain managers of the highest calibre. As a result, several types of incentives, each with their own issue and vesting criteria have been granted to employees. These are collectively known as the “AngloGold Share Incentive Scheme or share incentive scheme”.

Although the Remuneration Committee has the discretion to incentivise employees through the issue of shares, only options or rights have so far been granted.

The type and vesting criteria of the options or rights granted are:

Time-related

The granting of time-related options was 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, when it was agreed that no further time-related options would be granted and all options granted hereunder will terminate on 1 February 2012, being the date on which the last options granted under this criteria may be exercised or they will expire.

Time-related options vest over a five-year period from the date of grant and may be exercised in tranches of 20% each in years two, three and four and 40% in year five. As of the date of this report, all options granted and outstanding have vested in full.

Performance-related

The granting of performance-related options was approved by shareholders at the annual general meeting held on 30 April 2002 and amended at the annual general meeting held on 29 April 2005 when it was agreed that no further performance related options would be granted and all options granted hereunder will terminate on 1 November 2014, being the date on which the last options granted under this criteria may be exercised or they will expire.

Performance-related options granted vest in full, three years from the date of grant, provided that the conditions under which the options were granted are met. All options granted and outstanding vested in full on 1 November 2007.

Bonus Share Plan (BSP)

The granting of rights in terms of the BSP was approved by shareholders at the annual general meeting held on 29 April 2005 and amended at the general meeting held on 6 May 2008 when shareholders approved an increase in the maximum level of the bonus payable to eligible participants, as well as shortening the vesting period. Executive directors, executive vice presidents and other management groups are eligible for participation. Each award made in respect of the BSP entitles the holder to acquire one ordinary share at “nil” cost. In respect of all awards granted to and including 2007, these awards vest in full, three years from the date of grant, provided that the participant is still in the employ of the company at the date of vesting unless an event, such as death, occurs which may result in an earlier vesting date. In respect of awards granted in 2008 and onwards, the vesting period has been shortened to 40% in year one and 60% in year two from the date of grant or, in the event that the exercising of awards only takes place in year three, then 120% of awards granted will be available for exercising.

Long-Term Incentive Plan (LTIP)

The granting of rights in terms of the LTIP was approved by shareholders at the annual general meeting held on 29 April 2005. Executive directors, executive vice presidents and selected senior management are eligible for participation. Each award made in respect of the LTIP entitles the holder to acquire one ordinary share at “nil” cost. Awards granted vest three years from date of grant, to the extent that the stretched company performance targets, under which the rights were granted, are met and provided that the participant is still in the employ of the company, or unless an event, such as death, occurs which may result in an earlier vesting date.

Options and rights

As is required to be disclosed in terms of the AngloGold Share Incentive Scheme and stock exchange regulations, the movement in respect of options and rights granted and the ordinary shares issued as a result of the exercise of options and rights during the period 1 January 2010 to 31 January 2011 is as follows:

  Time-
Related
Perfor-
mance related
Bonus
Share
Plan(1)
Long-
Term
Incentive
Plan(1)
Total
Share
Incentive
Scheme
Total
shares
issued
At 1 January 2010 28,252 639,975 1,295,708 1,263,749 3,227,684 6,100,420
Movement during year            
– Granted 811,638 632,142 1,442,780  
– Exercised (27,611) (242,551) (468,327) (84,922) (823,411) 823,411
– Lapsed – terminations (5,492) (86,526) (211,279) (302,297)  
At 31 December 2010 641 391,932 1,552,493 1,599,690 3,544,756 6,923,831
Average exercise/issue price per share R194.00 R241.96 R283.39 R172.03 R241.96  
Subsequent to year-end            
– Granted  
– Exercised (2,362) (450) (2,812) 2,812
– Lapsed – terminations  
At 31 January 2011 641 391,932  1,550,131  1,599,240  3,541,944  6,926,643 

(1) BSP and LTIP awards granted at nil cost to participants.

Effective 15 October 2008, the JSE amended Schedule 14 (Requirements for share incentive schemes) of the Listings Requirements. AngloGold Ashanti is required to amend the terms of its Share Incentive Scheme by obtaining shareholder approval to amend the total number of shares attributable to the share incentive scheme, from 2.75% of issued share capital from time to time, to a fixed number of shares that may be issued to the scheme. Although the amendment only had to be in place by 1 January 2011, AngloGold Ashanti sought and obtained shareholder approval at the annual general meeting held on 7 May 2010 authorising the directors to issue up to 17,000,000 shares which was management’s estimate of options/awards to be granted over the next three years, including options/awards granted and outstanding as at 31 December 2010. The total number of options/awards that may be issued in aggregate to any one participant to the scheme will remain at 5% of the total number of shares attributable to the scheme.

Also effective 15 October 2008, the recycling of options/awards that have vested and which have been delivered and for which AngloGold Ashanti shares have been issued, is no longer allowed. The table below reflects the total number of options/awards that are unissued, as affected by this Listings Requirements rule change:

Details Options/Awards
Total number of options attributable to the scheme at 31 December 2010 17,000,000
Less:  
– Total number of options/awards granted and outstanding at 31 December 2010 3,544,756
– Total number of options/awards exercised:  
– During the period 15 October to 31 December 2008 (101,013)
– During the period 1 January to 31 December 2009 (1,131,916)
– During the period 1 January to 31 December 2010 (823,411)
Total options/awards available but unissued at 31 December 2010 11,398,904

Financial results

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 2010.

Review of operations

The performance of the various operations, which are unaudited, are comprehensively reviewed under Review of operations.

Dividend policy

Dividends are proposed by, and approved by the board of directors of AngloGold Ashanti, based on the interim and year-end financial statements. Dividends are recognised when declared by the board of directors of AngloGold Ashanti. AngloGold Ashanti expects to continue to pay dividends, although there can be no assurance that dividends will be paid in the future or as to the particular amounts that will be paid from year to year. The payments of future dividends will depend upon the board’s ongoing assessment of AngloGold Ashanti’s earnings, after providing for long-term growth, cash/debt resources, the amount of reserves available for a dividend based on the going-concern assessment, and restrictions placed by the conditions of the convertible bonds and other factors.

Dividends declared since 1 January 2010:

  Final dividend Number 107 Interim dividend Number 108 Final dividend Number 109
       
Declaration date 16 February 2010 10 August 2010 15 February 2011
Last date to trade ordinary shares cum dividend 5 March 2010 27 August 2010 4 March 2011
Record date 12 March 2010 3 September 2010 11 March 2011
Amount paid per ordinary share      
– South African currency (cents) 70 65 80
– United Kingdom currency (pence) 6.206 5.722 7.118
– Ghanaian currency (cedis) 13.220 12.668 17.384
Amount per CDI (1) – Australian currency (cents) 2.079 2.002 2.275
Payment date 19 March 2010 10 September 2010 18 March 2011
Amount per GhDS (2) – Ghanaian currency (cedis) 0.1322 0.1266 0.17384
Payment date 22 March 2010 13 September 2010 (4) 21 March 2011
Amount per ADS (3) – United States currency (cents) 9.495 9.003 11.000
Payment date 29 March 2010 20 September 2010 (4) 28 March 2011
Amount per E ordinary share South African currency (cents) 35 32.5 40
Payment date 19 March 2010 10 September 2010 18 March 2011

(1) Each CDI (CHESS Depositary Interest) is equal to one-fifth of one ordinary share.
(2) Each GhDS (Ghanaian Depositary Share) is equal to one-hundredth of one ordinary share.
(3) Each ADS (American Depositary Share) is equal to one ordinary share.
(4) Illustrative value assuming the following rates of exchange: R7.2728: $. The actual rate of payment will depend on the exchange rate on the currency conversion date and/or date of payment.

Withholding tax

On 21 February 2007, the South African Government announced a proposal to replace the Secondary Tax on Companies with a 10% withholding tax on dividends and other distributions payable to shareholders. The date for the implementation of the withholding tax on dividends has now been announced as 1 April 2012. Although this may reduce the tax payable by the South African operations of the group, thereby increasing distributable earnings, the withholding tax on dividends will generally reduce the amount of dividends or other distributions received by AngloGold Ashanti shareholders.

Shareholders on the South African register 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.

Borrowings

The company’s borrowing powers are unlimited. As at 31 December 2010, the group’s gross borrowings (including the mandatory convertible bonds) totalled $2,704m, R17,763m (2009: $1,931m, R14,355m).

Significant events during the year under review and subsequent to year-end

Appointment of chairman: Mr Tito Mboweni, the former Governor of the South African Reserve Bank was appointed to the board and as chairman of the company with effect from 1 June 2010. He succeeded Mr Russell Edey, who retired as chairman and from the board on 7 May 2010.

Joint venture in the Democratic Republic of the Congo: On 26 March 2010, AngloGold Ashanti announced that it has entered into a definitive joint venture agreement (JVA) with l’Office des Mines d’Or de Kilo-Moto (OKIMO) relating to the development of the Ashanti Goldfields Kilo (AGK) project in the Democratic Republic of the Congo (DRC) and the transfer of the exploitation permits to AGK. Under the JVA, AngloGold Ashanti and OKIMO agree to jointly develop the AGK project through the joint company AGK, in which AGA holds an 86.22% interest and OKIMO holds the remaining 13.78%. The JVA provides for the exploitation permits to be transferred from OKIMO to AGK covering an area of approximately 6,000 km² in the Ituri district in the northeastern DRC. This includes the Mongbwalu project where a Mineral Resource of approximately 3Moz has been identified by previous exploration work and where further exploration and feasibility studies are currently taking place.

Temporary suspension of operations at the Iduapriem and Obuasi mine: Following a temporary suspension of operations at the Iduapriem mine, AngloGold Ashanti with the approval of the Ghana EPA, constructed an interim tailings storage facility (TSF) for tailings deposition for a year while the greenfields tailings storage facility is being constructed. In addition, the water treatment plant on site was upgraded. The interim TSF was commissioned in April 2010 and water treatment plant in November 2010.

AngloGold Ashanti’s Obuasi mine in Ghana suspended operation of gold processing for five days to implement a revised water management strategy aimed at reducing contaminants contained in its discharge.

Investment grade ratings: On 9 April 2010 AngloGold Ashanti noted the following investment grade ratings assigned to it:

$1bn revolving credit facility: On 21 April 2010 AngloGold Ashanti secured a $1bn, four-year unsecured revolving credit facility, due 2014.

Issue of $1bn unsecured notes: On 22 April 2010, AngloGold Ashanti announced the pricing of an offering of US$1bn of 10-year and 30-year unsecured notes. The issue was significantly oversubscribed and the offering closed on 28 April 2010.

Cessation of services: On 1 June 2010, AngloGold Ashanti announced that it was halting the supply of services, including water, compressed air, electricity and sewerage, to the mines in Orkney following the failure by the liquidators of Pamodzi Gold Orkney, to settle debts owed for services supplied to the operations over the prior ten months. AngloGold Ashanti however would continue to supply potable water and electrical power to Pamodzi’s mine residences for as long as these were occupied.

Sale of Tau Lekoa Mine: The terms of the sale of the Tau Lekoa Mine to Simmer & Jack Mines Limited (Simmers) were announced on 17 February 2009. This sale was concluded effective 1 August 2010, following the transfer of the mining rights of the Tau Lekoa Mine and the adjacent properties of Weltevreden, Jonkerskraal and Goedgenoeg to Buffelsfontein Gold Mines Limited, a wholly owned subsidiary of Simmers on 20 July 2010.

Amendment to the joint venture agreement with B2Gold Corp: On 1 July 2010, AngloGold Ashanti increased its holding in the Gramalote project from 49% to 51%. On 12 August 2010, AngloGold Ashanti announced that it has entered into an agreement with B2Gold Corp. to amend the Gramalote Joint Venture Agreement. Under the amended terms, AngloGold retains its 51% interest in the Gramalote Joint Venture and will become manager of the Gramalote Project in Colombia. The Gramalote Project to date was managed by B2Gold, which will retain its 49% interest in the Gramalote Joint Venture.

Concurrent equity and mandatory convertible bond issue: On 15 September 2010, AngloGold Ashanti announced the launch and pricing of a concurrent equity and mandatory convertible offering which was followed by an announcement on 16 September 2010 advising of the exercise of an over-allotment option. The concurrent offering resulted in the issue of 18,140,000 ordinary shares or 5% of the ordinary issued share capital of the company at an issue price of R308.37 per share and an issue of $789,086,750 Mandatory Convertible Subordinated Bonds due 15 September 2013. On 26 October 2010, shareholders, by the requisite majority, approved a special resolution placing up to a maximum of 18,140,000 ordinary shares under the control of the directors, deliverable upon the conversion of the Mandatory Convertible Subordinated Bonds.

Elimination of hedge book: On 7 October 2010, AngloGold Ashanti completed the elimination of its gold hedge book, providing the company and its shareholders with full exposure to the prevailing gold price. As a result, the company will sell the gold it produces at market prices and therefore expects to enhance cash flow and profit margins as a result of removing hedge contracts with low committed gold prices.

Sale of B2Gold Corp shares: AngloGold Ashanti realised net proceeds of C$70m from the sale of its entire holding of shares in Vancouver-based gold producer B2Gold Corp. The stake, equivalent to about 10.17% of B2Gold's outstanding shares, was sold on 9 November 2010 in an orderly fashion, after the markets closed.

Development of the Tropicana Gold Project in Western Australia: On 11 November 2010, AngloGold Ashanti announced that the development of the Tropicana Gold Project in Western Australia had been approved by the boards of AngloGold Ashanti (70% interest) and Independence Group NL (30% interest).

Retirement of Deputy Chairman: Dr T J Motlatsi retired from the board of AngloGold Ashanti, effective from 17 February 2011.

Mankayi case – Constitutional Court ruling: On 3 March 2011, AngloGold Ashanti noted the decision of the Constitutional Court to grant Mr Mankayi leave to appeal against the decision of the Supreme Court of Appeal, which itself upheld the June 2008 Johannesburg High Court decision that employees who qualify for benefits in respect of the Occupational Diseases in Mines and Works Act (ODMWA) may not, in addition, lodge civil claims against their employers in respect of their relevant conditions.

The company is still studying the details of the judgement and its initial impression is that should the Executor of Mr Mankayi’s estate wish to pursue his claim, he or she will now need to return to the High Court to continue with the litigation action. AngloGold Ashanti will defend the case on its merits. Should other individuals lodge similar claims, these too would ultimately be defended by the company and judged on their merits.

Investments

Particulars of the group’s principal subsidiaries and operating entities are presented in the financials section.

Litigation

There are no legal or arbitration proceedings in which any member of the AngloGold Ashanti group is or has been engaged, including any such proceedings which are pending or threatened, of which AngloGold Ashanti is aware, which may have, or have had during the 12 months preceding the date of this Annual Report 2010, a material effect on the group’s financial position, other than those disclosed in group note 34 of the financial statements.

Material change

There has been no material change in the financial or trading position of the AngloGold Ashanti group since the publication of its results for the quarter and year ended 31 December 2010.

Material resolutions

Details of special resolutions and other resolutions of a significant nature passed by the company during the year under review, requiring disclosure in terms of the Listings Requirements of the JSE, are as follows:

  Nature of resolution Effective date
AngloGold Ashanti Limited Passed at the annual general meeting held on 7 May 2010: Approval for the company or any of its subsidiaries to acquire ordinary shares issued by the company. 2 July 2010
     
AngloGold Ashanti Limited Passed at the general meeting held on 26 October 2010: Approval to place 18,140,000 ordinary shares of R0.25 each in the authorised but unissued share capital of the company under the control of the directors of the company, as a specific authority and approval, to allot and issue for the purpose of the conversion of the $789,086,750 6.00% mandatory convertible subordinated bonds due 2013. 2 November 2010

Annual general meetings

At the 66th annual general meeting held on 7 May 2010, shareholders passed ordinary resolutions relating to the:

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

Notice of the 67th annual general meeting, which is to be held in the Auditorium, 76 Jeppe Street, Newtown, Johannesburg at 11:00 (South African time) on Wednesday, 11 May 2011, is enclosed as a separate document with the Annual Financial Statements 2010. Additional copies of the notice of meeting may be obtained from the company’s corporate contacts and the share registrars or they may be accessed from the company’s website.

Directorate and secretary

The following movements to the board of directors took place during the period from 1 January 2010 to 31 December 2010.

Executive directors

There were no changes to the executive directorate during the year under review.

Non-executive directors

Mr RP Edey retired as chairman and member of the board at the conclusion of the annual general meeting held on 7 May 2010.

Mr TT Mboweni was appointed as chairman and member of the board and Mr F Ohene-Kena was appointed as a member of the board with effect from 1 June 2010.

Mr R Gasant was appointed as a member of the board and as a member of the Audit and Corporate Governance Committee with effect from 12 August 2010.

The directors retiring by rotation at the forthcoming annual general meeting in terms of the articles of association are, Mr W A Nairn and Mr S M Pityana. Messrs Nairn and Pityana have made themselves available for re-election,

Messrs TT Mboweni, F Ohene-Kena and R Gasant, who were appointed as directors during 2010, will retire at the annual general meeting but will offer themselves for election.

In terms of the company’s memorandum and articles of association, there is no mandatory retirement age for non-executive directors. Non-executive directors do not hold service contracts with the company.

The names and biographies of the directors of the company are listed under board of directors and executive management.

There was no change in the office of the Company Secretary. The name, business and postal address of the Company Secretary are set out under contact details of this report.

Directors’ interests in shares

The interests of the directors in the ordinary shares of the company at 31 December 2010, which did not individually exceed 1% of the company’s issued ordinary share capital, were:

  Beneficial Beneficial
  Direct Indirect Direct Indirect
  31 December 2010 31 December 2009
Executive directors        
M Cutifani 10,000 10,000
S Venkatakrishnan 10,351 10,351
Total 20,351 20,351
Non-executive directors        
FB Arisman 4,984 4,984
RP Edey 3,063
LW Nkuhlu 800 800
Total 5,784 8,847
Grand total 20,351 5,784 20,351 8,847

There have been no changes in the above interests since 31 December 2010. A register detailing directors’ and officers’ interests in contracts is available for inspection at the company’s registered and corporate office.

Annual financial statements

The directors are required by the South African Companies Act to maintain adequate accounting records and are responsible for the preparation of the annual financial statements, which fairly present the state of affairs of the company and the AngloGold Ashanti group at the end of the financial year, including the results of operations and cash flows for the year, in conformity with the Companies Act, 61 of 1973 (as amended) and in terms of the JSE Listings Requirements.

In preparing the annual financial statements reflected in United States dollars and South African rands, the group has complied with International Financial Reporting Standards (IFRS) and used appropriate accounting policies supported by reasonable and prudent judgements and estimates. The directors are of the opinion that these financial statements fairly present the financial position of the company and the group at 31 December 2010, and the results of their operations and cash flow information for the year then ended.

AngloGold Ashanti, through its Executive Committee reviews its short-, medium- and long-term funding, treasury and liquidity requirements and positions monthly. The board of directors also review these on a quarterly basis at its meetings.

Cash and cash equivalents at 31 December 2010 amounted to $586m (2009: $1,100m), and together with cash budgeted to be generated from operations in 2011 and the net incremental borrowing facilities available are, in management’s view, adequate to fund operating, mine development and capital expenditure and financing obligations as they fall due for at least the next twelve months. Taking these factors into account, the directors of AngloGold Ashanti have formed the judgement that, at the time of approving the financial statements for the year ended 31 December 2010, it is appropriate to use the going concern basis in preparing these financial statements.

The external auditor, Ernst & Young Inc., is responsible for independently auditing and reporting on the financial statements in conformity with International Standards on Auditing and the Companies Act in South Africa, as per their unqualified report on these financial statements.

To comply with requirements for reporting by non-US companies registered with the SEC, the company will prepare a set of financial statements in accordance with US Generally Accepted Accounting Principles (US GAAP) which must be filed with the SEC by no later than 30 June 2011. Copies of the annual report on Form 20-F will be made available once the filing has been finalised, on request, from the Bank of New York Mellon, or from the company’s corporate office or its contacts as listed under contact details.

Under the Sarbanes-Oxley Act, the Chief Executive Officer and Chief Financial Officer are required to complete a group certificate stating that the US GAAP financial statements and reports are not misleading and that they fairly present the financial condition, results of operations and cash flows in all material respects. The design and effectiveness of the internal controls, including disclosure controls, are also included in this declaration. As part of the process, a declaration is also made that all significant deficiencies and material weaknesses, fraud involving management or employees who play a significant role in internal control and significant changes that could impact on the internal control environment, are disclosed to the Audit and Corporate Governance Committee and the board.

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