This is a Part A Statement given by AngloGold Investments Australia Pty Ltd ACN 090 112
459 (AngloGold Investments Australia), a wholly owned subsidiary of AngloGold, to
Acacia pursuant to Part 6.3 of the Corporations Law. AngloGold Investments Australia
proposes making takeover offers (Offers) under a takeover scheme in respect of all the
issued fully paid ordinary shares in the capital of Acacia (Shares) which are on issue as at
the date of the Offers and Shares which are issued by Acacia to a person pursuant to the
exercise of options granted under Acacia?s employee share option plan during the offer
period. The consideration to be offered involves fully paid ordinary shares in AngloGold.
Relationship between AngloGold Investments Australia and AngloGold
AngloGold Investments Australia is a wholly owned subsidiary of AngloGold. It was
established in order to make the Offers and currently has no other business.
The directors of AngloGold Investments Australia are Robert M Godsell, Jonathan G Best,
Kelvin H Williams, Nigel W Unwin and Peter J Mansell. The occupations and addresses of
Messrs Godsell, Best and Williams are set out in section 1.2 of the document entitled
?Information about AngloGold?. Mr Unwin is an executive officer of AngloGold with
responsibility for Australasian activities. His address is 11 Diagonal Street, Johannesburg,
2001, South Africa. Mr Mansell is a solicitor and partner of Freehill, Hollingdale & Page in
Perth. His address (and the registered address of AngloGold Investments Australia) is Level
22, AMP Building, 140 St George?s Terrace, Perth, Western Australia.
Under an agreement between AngloGold Investments Australia and AngloGold, AngloGold
has agreed to allot shares to Acacia shareholders who become entitled to an allotment of
AngloGold shares under the Offers. In consideration, AngloGold Investments Australia has
agreed to allot one ordinary share in itself to AngloGold Finance Australia Limited, the
immediate holding company of AngloGold Investments Australia, for every share allotted
AngloGold has agreed to lend sufficient cash resources to AngloGold Investments Australia
to enable it to meet its obligations to pay any cash consideration to Acacia shareholders
required under the Offers in order to avoid Acacia shareholders being entitled to a fractional
entitlement of AngloGold shares. The maximum amount of consideration which may be
required will depend on the number of Acacia shareholders who are affected. It is thought
this would be no more than A$400,000. AngloGold intends to obtain these funds from its
existing cash reserves, though no particular funds or deposits have yet been earmarked for
this purpose by AngloGold. There are no outstanding conditions precedent to draw down
under this loan facility (other than the giving of appropriate drawdown notices).
Any statement given in this Part A Statement, including any document forming part of this
Part A Statement, which is attributed to AngloGold is also to be attributed to AngloGold
Investments Australia, unless a contrary intention is expressed.
Entitlement to shares in Acacia
At the date of this Statement, AngloGold Investments Australia and AngloGold are each
entitled to 165,000 Shares in Acacia, registered in the name of Firecrest Investments
Limited, a body corporate which is related to AngloGold.
No entitlement to other marketable securities of Acacia
At the date of this Statement, neither AngloGold Investments Australia nor AngloGold is
entitled to any marketable securities (not being shares) issued by Acacia.
In the 4 months immediately preceding the date on which this Statement was lodged for
registration with the Australian Securities and Investments Commission (ASIC):
there were no acquisitions or disposals of Shares in Acacia by AngloGold or any
associate of AngloGold; and
there were no acquisitions or disposals of shares in AngloGold by any associate of
AngloGold, other than:
acquisitions by directors (or former directors) of AngloGold or
subsidiaries of AngloGold on the exercise of options issued under the
AngloGold Share Incentive Scheme and the disposal of those shares in the
ordinary course of trading on the JSE as follows:
the acquisition of one ordinary share in AngloGold Investments Australia,
being all the issued share capital in that company, by AngloGold on 28
October 1999 on its incorporation; and
the following acquisitions by AA plc of shares in AngloGold in the
ordinary course of trading on the JSE:
No restriction on transfer
There is no restriction on the right to transfer Shares in the constitution of Acacia that has
the effect of requiring the holders of Shares, before transferring them, to offer them for
purchase to members of Acacia or to any other person.
No prescribed benefits to officers of Acacia
In connection with the Offers:
no prescribed benefit (other than an excluded benefit) will or may be given to a
person in connection with the retirement of a person from a prescribed office in
relation to Acacia; and
no prescribed benefit will or may be given to a prescribed person in relation to
Acacia in connection with the transfer of the whole or any part of the undertaking
or property of Acacia.
No agreements with directors of Acacia
There is no agreement made between AngloGold Investments Australia or AngloGold and
any of the directors of Acacia in connection with or conditional upon the outcome of the
Change in financial position of Acacia
So far as is known to AngloGold Investments Australia, the financial position of Acacia has
not materially changed since the date of the last balance sheet laid before Acacia
shareholders in general meeting (being the balance sheet for Acacia for the period ended 30
June 1999) otherwise than:
on 24 August 1999, Roebuck Resources NL announced drilling results in a gold
exploration programme relating to the Melville gold project in which Acacia is
earning a 75% interest, returning significant gold assays and several high grade
on 27 August 1999, Acacia announced that it had signed a joint venture agreement
with PlatSearch enabling Acacia to farm in to the Rudall Project. Acacia can earn a
51% interest in the project by expending A$150,000 within the first two years and
may increase its interest to 75% by a further expenditure of A$250,000 within the
following three years. A minimum commitment of A$75,000 must be expended
within the first twelve months;
on 30 August 1999, Acacia announced that its Boddington?s Wandoo (Acacia
share 33.33%) resource estimate has been further increased to 441 million tonnes
at 1.08 g/t of gold and 0.11% copper (comprising Wandoo South and Wandoo
North). Thus, the resource estimate contains 15.3 million ounces of gold (of which
Acacia?s share is 5.1 million ounces of gold) and 500,000 tonnes of copper, being
an increase of 31% in contained gold and 26% in contained copper. The resource
remains open at depth. The feasibility study is investigating throughput of
approximately 18 million tonnes a year and average annual gold production of
about 500,000 ounces;
on 29 September 1999, Acacia announced an issue of 206,000 fully paid ordinary
shares at an issue price of A$2.00 pursuant to the Acacia employee share option
on 5 and 6 October 1999, Roebuck Resources NL announced drilling results
relating to the Melville gold project to 24 September 1999. These returned a
number of gold assays and high grade intercepts;
on 19 October 1999, Acacia announced an issue of 205,238 fully paid ordinary
shares pursuant to the exercise of employee options. The issue price of these shares
A$2.10 for 95,238 shares;
A$1.88 for 40,000 shares;
A$2.00 for 50,000 shares; and
A$2.22 for 20,000 shares.
on 20 October 1999, Acacia announced an issue of 142,857 fully paid ordinary
shares at the issue price of A$2.10 pursuant to the exercise of employee options.
on 21 October 1999, Acacia announced an issue of 210,476 fully paid ordinary
shares pursuant to the exercise of employee options. The issue price of these shares
A$2.10 for 190,476 shares; and
A$1.88 for 20,000 shares;
on 26 October 1999, Acacia announced an issue of 20,000 fully paid ordinary
shares at the issue price of A$2.22 pursuant to the exercise of employee options;
on 27 October 1999, Acacia announced an issue of 60,000 fully paid ordinary
shares pursuant to the exercise of employee options. The issue price of these shares
A$2.22 for 20,000 shares;
A$2.00 for 20,000 shares; and
A$1.88 for 20,000 shares.
No agreement to transfer Shares acquired under Offers
There is no agreement whereby any Shares acquired by AngloGold Investments Australia
pursuant to the Offers will or may be transferred to any other person.
No escalation agreements
There is no agreement for the acquisition of any Shares by AngloGold Investments
Australia or by an associate of AngloGold Investments Australia, being an agreement under
which the person, or either or any of the persons, from whom the Shares have been or are to
be acquired or an associate of that person or of either or any of those persons may, at any
time after an offer is sent, become entitled to any benefit, whether by way of receiving an
increased price for those shares or by payment of cash or otherwise, that is related to,
dependent upon, or calculated in any way by reference to, the consideration payable for
Shares acquired after the agreement was entered into.
Information relating to the CUFS system
The Clearing House Electronic Subregister System
The ASX has implemented an electronic transfer system, called the Clearing House
Electronic Subregister System (CHESS), for the transfer and settlement of securities quoted
on ASX. Transfers of CHESS securities are effected electronically and so share certificates
are not issued or required.
CHESS cannot be used directly for the transfer of securities of foreign companies where the
laws of the foreign company?s place of incorporation do not recognise CHESS. At present,
the securities of AngloGold cannot be CHESS approved.
To enable companies such as AngloGold to have their securities cleared and settled
electronically in CHESS, depositary instruments called CHESS Units of Foreign Securities
(CUFS) have been established. CUFS enable AngloGold shares to be cleared and settled
As AngloGold wishes to give its shareholders the opportunity to participate in the electronic
transfer and settlement of AngloGold shares in Australia, Acacia shareholders who accept
the Offer will receive their AngloGold shares in the form of CUFS.
CHESS Units of Foreign Securities (CUFS)
Unlike a shareholding in a certificated form, CUFS are units of beneficial ownership in
securities, the legal title to the securities being held by an Australian depositary entity.
Where CUFS are issued, CHESS Depositary Nominees Pty Ltd (CDN), a wholly owned
subsidiary of ASX, will be registered as the legal owner of AngloGold shares on the
Australian register, holding on behalf of, and for the benefit of, the CUFS holder.
CUFS provides holders with the following benefits;
the need for share certificates is eliminated;
the problem of having to keep certificates securely stored is avoided;
shareholders are not required to provide share certificates to their brokers when
they wish to sell their shares;
shareholders are able to transfer and settle their shares electronically;
settlement cashflows are more predictable and settlement risks are reduced as a
result of the regulation of electronic transfers; and
holders receive holding statements just like a bank statement.
A CUFS holder will receive a holding statement rather than a share certificate. The holding
statement sets out the number of AngloGold CUFS issued to (or, subsequently transferred to
or by) each holder. The holding statement will also advise the holder of the holder reference
number of their holding. A holding statement will be provided to holders on a periodic basis
if there is a change in their holding of AngloGold CUFS.
A summary of the rights and entitlements of CUFS holders is set out below. Further
information about CUFS is available from Computershare Registry Services Pty Limited or
Number of CUFS issued in relation to AngloGold shares
Shareholders will be issued with one (1) CUF for every AngloGold share to which they
Converting from a CUFS holding to a certificated holding
Shareholders may at any time convert their AngloGold CUFS holding to a certificated
in the case of issuer sponsored CUFS, notifying AngloGold?s Australian share
registry (Computershare Registry Services Pty Limited); or
in the case of CUFS sponsored on the CHESS subregister, notifying their
Controlling Participant (in most cases, a stockbroker).
In both cases, once AngloGold?s Australian share registry has been notified, it will provide
the holder with the necessary transfer form.
Dividends, rights and other shareholder entitlements
The SCH Business Rules, which have force under the Corporations Law, require
AngloGold to treat CUFS holders as if they were the holders of the underlying AngloGold
shares. The SCH Business Rules ensure that CUFS holders have all the direct economic
benefits of legal ownership (such as the right to receive the same dividends, rights issues
and bonus issues as certificated shareholders are entitled to). If a cash dividend or any other
cash distribution is made in a currency other than A$, AngloGold?s Australian share registry
(acting as CDN?s agent) will convert the dividend or other cash disbursement into A$
(unless the foreign currency is not readily convertible into A$). The dividend or cash
disbursement will then be distributed to AngloGold CUFS holders in A$ in accordance with
each CUFS holder?s entitlement.
As CUFS holders will not appear on the AngloGold share register as the legal holders of the
AngloGold shares, CUFS holders will not be entitled to attend and vote in person at
AngloGold shareholders meetings. However, CUFS holders will receive notice of
shareholder meetings and can vote by way of proxy. The proxy form permits the CUFS
holder to direct the registered AngloGold shareholder (that is, CDN) to cast proxy votes at
the relevant AngloGold shareholder meeting in the manner directed by the CUFS holder.
CUFS holders will also be permitted to attend as a visitor to the meeting. CUFS holders
cannot vote on a show of hands. If a shareholder wishes to vote on a show of hands at
AngloGold shareholder meetings, they should notify AngloGold?s Australian share registry,
either personally or through their stockbroker, to arrange for conversion of their holdings to
a certificated form.
Because CUFS holders will not appear on the AngloGold share register as the legal holders
of the AngloGold shares, any other rights conferred on AngloGold shareholders may only
be capable of exercise by CUFS holders by instructing CDN (including the rights
summarised in section 3.15 of this Statement).
A CUFS holder will not incur any additional fees or charges as a result of being a CUFS
Local and international trading in CUFS
CUFS holders who wish to trade in AngloGold shares will be transferring beneficial title
rather than transferring legal title. The transfer will be settled electronically by delivery of
AngloGold CUFS holdings through CHESS, thereby avoiding the need to effect settlement
on a paper basis by the physical delivery of certificates.
Trading in CUFS holdings is no different to trading in other CHESS approved securities.
More information on trading AngloGold CUFS electronically on ASX is available from
ASX and from stockbrokers.
CUFS holders can trade their AngloGold CUFS holdings internationally by first notifying
AngloGold?s Australian share registry, either personally or through their stockbroker, to
arrange for the conversion of their holdings to a certificated form to enable the trade to be
settled. AngloGold?s Australian share registry will then liaise with the relevant foreign
AngloGold share registry to transfer the holding from the Australian registry to that foreign
registry. No trading can take place on those AngloGold shares until the relevant share
registries involved have been notified. Once the registers have been rectified, the holder is
able to trade their AngloGold shares on that foreign exchange.
Low brokerage share sale facility
Deutsche Bank AG has established a facility under which all Acacia shareholders who
accept the Offer can elect to:
Term of facility
The low brokerage facility will be available for a period commencing from the date of the
Offer and ending on the date that is 2 months after close of the Offer.
Scope of facility
The low brokerage facility will only be available in respect of AngloGold shares that are
issued to former Acacia shareholders who accept the Offer. The facility is not available for
AngloGold shares acquired on market.
Mechanism for sale of AngloGold shares
AngloGold Investments Australia?s share registry will provide to Deutsche Bank AG by
4:00pm on each day during which the low brokerage facility is available an order to sell all
AngloGold shares held by or for the benefit of persons electing to use the low brokerage
Deutsche Bank AG will process all sale orders on the NYSE, JSE, LSE, ASX or the Paris or
Brussels Bourses. By processing sale orders in this way, AngloGold shareholders should
receive a price for their shares which reflects the price they could obtain in markets where
the shares are actively traded.
Proceeds and charges
Acacia shareholders who elect to use the low brokerage facility will:
receive a cheque payment equivalent to the value of the AngloGold shares sold by
Deutsche Bank AG (less brokerage, as set out below, and any applicable stamp
be charged a flat brokerage fee equivalent to 1% of the sale proceeds. Deutsche
Bank AG will deduct these brokerage fees directly from the proceeds of sale of the
relevant AngloGold shares.
Electing to use the low brokerage facility
Acacia shareholders may utilise the low brokerage facility by either:
placing a tick in the appropriate box on the Form of Acceptance and Transfer and
accepting the Offer; or
if they accept the Offer and receive AngloGold shares but subsequently wish to sell
those shares, calling (toll free) Computershare Registry Services Pty Limited on
1800 083 131 and providing their shareholder details to the operator.
Acacia shareholders should consider the following advantages and risks in deciding whether
to accept AngloGold?s Offer.
The advantages of becoming an AngloGold shareholder include:
AngloGold has the financial strength to pursue significant development and
exploration projects, and is pursuing a strategy to be an active participant in all
aspects of the gold business.
AngloGold?s operations are geographically diverse, with current production in
South Africa, Mali, Namibia, the United States, Brazil and Argentina and
exploration in ten countries. An acquisition of Acacia would continue AngloGold?s
policy of diversification and would offer Acacia shareholders gold asset risk
Shareholders will have the opportunity to continue participation in Acacia?s assets
through a shareholding in AngloGold, while the company is committed to growing
these gold assets.
AngloGold is the largest gold producing company in the world, with a market
capitalisation of A$8.3 billion at 28 October 1999. AngloGold shares or depositary
receipts are listed on the JSE, LSE and NYSE and the Brussels and Paris Bourses.
A listing is also being sought on the ASX.
An investment in AngloGold carries with it risks which are generally associated with
investment in a publicly listed company, and specific risks which are associated with its
gold mining and exploration activities. Investors in Acacia are already exposed to many of
General economic conditions affect interest rates and inflation rates, which in turn
have an affect on AngloGold?s revenues and expenses.
Sharemarket conditions, both in Australia and overseas, may have an impact on
AngloGold?s share price regardless of the company?s operating performance.
AngloGold is an international company, listed on several stock exchanges
throughout the world, and its share price may be affected by conditions in any of
||Year 2000 date change
AngloGold has undertaken extensive investigation of the possible impact on its
computer systems of the date change from 1999 to 2000, and has taken steps to
endeavour to ensure that it is Year 2000 compliant. However, there can be no
certainty that the date change will not adversely affect AngloGold?s operations and
its profitability. AngloGold may also be affected by the impact of the date change
on its customers, suppliers, joint venture partners and other third parties.
||Risks of gold mining
The business of mineral exploration, development and production by its nature
involves significant risks. The business depends on, amongst other things,
successful location of mineable ore reserves and skilful management. Profitable
mining can be affected by unforeseen changes in operating circumstances, ore
reserves and technical issues. Natural events, such as earthquakes, fire and flood
can also affect production.
||Estimation of reserves and resources
AngloGold?s estimates of reserves and resources as set out in sections 1.9 and 1.10
of this Statement have been calculated using methods which are generally
employed in the gold industry, and which are appropriate and reasonable in the
view of AngloGold?s management. However, these calculations necessarily
depend on inferences and assumptions. They are therefore inherently imprecise and
there can be no assurance that they will ultimately prove to be accurate.
||Gold price fluctuations
The market price of gold has a significant effect on AngloGold results and the
price of AngloGold shares. Gold prices are influenced by numerous factors over
which AngloGold has no control, including expectations with respect to the rate of
inflation, the relative strength of the US Dollar and certain other currencies,
interest rates, global or regional political or economic crises, and other supply and
AngloGold manages its exposure to volatility in the market price of gold through
an active hedging programme, and this is expected to continue. However, there
can be no assurance that this hedging programme will be successful, or that
fluctuations in the gold price will not adversely affect AngloGold?s profitability or
financial position. See section 1.17 of this Statement for more information on
AngloGold?s hedging position.
Gold is sold throughout the world at a price denominated in US Dollars, while
AngloGold?s operating expenses are incurred principally in local currencies.
AngloGold has operations in six countries, with the majority of its production in
South Africa. AngloGold has conducted, and expects to continue to conduct,
currency hedging programs to manage its exposure to currency fluctuations.
In addition, AngloGold Shares are traded principally in Rand on the JSE, and in
US Dollars on the NYSE. For this reason, the value of AngloGold shares and
dividends in Australian Dollars may be affected by the value of the Australian
Dollar relative to the Rand and the US Dollar.
AngloGold?s mining operations and exploration activities are subject to extensive
regulation governing development, production, proposed amendments, labour
standards, occupational health, waste disposal, protection and remediation of the
environment, mine safety, toxic substances, and other matters in each of the
countries where it operates.
Certain countries in which AngloGold operates may carry greater political and
regulatory risks than those of more developed countries. These risks may include
exchange control restrictions, political or economic instability, civil unrest and the
risk of change in regulation or policy which is unfavourable to foreign investment
or mining activity.
The following is intended to provide a general overview of the taxation implications for
Australian residents in disposing of Acacia Shares and holding or disposing of AngloGold
shares. The implications for non-resident shareholders will vary according to their particular
circumstances. This summary is not intended to be comprehensive and is based upon
income tax legislation currently in force as at the date of this document.
Acacia shareholders should not rely on these comments as advice in relation to their own
affairs. The taxation laws are complex and there could be implications in addition to those
generally described below. It is recommended that Acacia shareholders consult their own
tax advisers for advice applicable to their individual needs and circumstances.
Disposal of Acacia Shares held as a capital investment
Acceptance of an Offer will constitute a disposal of Acacia Shares. If these are held by
Australian resident shareholders as a capital investment, this may result in a taxable gain or
loss for Australian capital gains tax purposes. The proceeds on disposal will be deemed to
be the sum of the market value of the AngloGold shares (and any cash) received in
exchange for the Acacia Shares.
A taxable capital gain will arise for those Acacia Shares acquired after 19 September 1985,
if there is an excess of the proceeds on disposal over the cost base of the Acacia Shares,
indexed for the effect of inflation if held in excess of twelve months. (The Federal
Government has proposed changes to the capital gains tax law which, if enacted, are to
apply from 1 October 1999. Indexation for inflation is proposed to be frozen at 30
September 1999. However, individuals and complying superannuation funds disposing of
shares held for more than 12 months are proposed to be given a choice between indexation
up to 30 September 1999, and a fixed reduction in the amount of the nominal capital gain -1/
2 for individuals and 1/3 for complying superannuation funds).
A capital loss will arise if the proceeds on disposal are less than the cost base of the Acacia
Shares. In calculating a capital loss, the cost base is not indexed for inflation, irrespective of
how long the Acacia Shares have been held. A capital loss may be offset only against
capital gains arising in the same or subsequent year of income.
Disposal of Acacia Shares held as revenue assets
In certain circumstances, Australian resident shareholders may be subject to the general
income tax provisions (rather than the capital gains tax provisions) of the Income Tax
Assessment Act in respect of profits or losses arising on disposal of their Acacia Shares.
Examples of this would include situations where the shareholder is in the business of trading
in shares or where their Acacia Shares were acquired with a dominant purpose of profit-making
In calculating a gain or loss in these circumstances, the consideration will be the sum of the
market value of the AngloGold shares (and any cash) received under the Offer. A taxable
gain will arise if the consideration received by Acacia shareholders exceeds the cost of the
Acacia Shares. A loss will arise where the consideration received is less than the cost of the
Acacia Shares. These losses can be offset against profits or capital gains.
Dividends paid on AngloGold shares
Dividends paid on AngloGold Shares would be subject to Australian income tax in the
hands of Australian resident holders. The entire amount of the dividend would be taxable.
Dividends paid by AngloGold cannot be franked for Australian taxation purposes, nor can
they qualify for the inter-corporate rebate.
Subsequent disposal of AngloGold Shares
A gain or loss from the sale of or other disposal of AngloGold shares will generally be
subject to the same tax rules described above in respect of Acacia Shares.
Rights of holders of AngloGold shares
The rights and privileges attached to AngloGold shares are governed by the South African
Companies Act, the Securities Regulation Code, the JSE listings requirements as well as the
AngloGold articles of association.
What follows below is a summary of the rights attaching to AngloGold shares based on
relevant legislative provisions and listing rules and AngloGold?s articles of association.
(This summary should be read in conjunction with and subject to the summary information
relating to the CUFS system set out in section 3.11 of this Statement.)
||Transfer of shares
Shares in AngloGold can be freely sold and bought on the JSE, NYSE, LSE and
the Paris and Brussels Bourses. A listing is also being sought on the ASX.
There are no restrictions that apply to selling shares on those stock exchanges,
subject to the following qualification which applies only to sales on the JSE.
Non-residents can dispose of their AngloGold shares on the JSE (provided they are
certificated, in which case the certificates will be endorsed with the words ?non-resident?)
and remit the proceeds out of South Africa without restriction provided
that the disposal is for fair value and at arm?s length and that the non-resident has
discharged all liabilities and obligations to South African residents in relation
thereto. The proceeds can be remitted out of South Africa or to a South African
bank account of non-residents? choice.
South African residents can acquire JSE listed AngloGold shares from a non-resident
on the JSE. In those cases, the transaction will be effected through a
broker and a broker?s note is produced. If the seller is an emigrant from South
Africa, the proceeds from the sale will be deposited into the emigrant?s frozen bank
account in South Africa.
The AngloGold articles of association provide that every member present at a
meeting in person or, in the case of a body corporate, represented, is entitled to one
vote only on a show of hands. Upon a poll members present or any duly appointed
proxy shall have one vote for every share held. There are no limitations on the right
of non-South African shareholders to hold or exercise voting rights attaching to any
shares in the company.
||Dividends, rights and distributions
The holders of AngloGold shares are entitled to receive dividends as and when
declared by the company. No dividends shall be payable except out of the profits
of the company.
Dividends are payable to shareholders registered at a record date subsequent to the
date of declaration.
The company may only declare dividends in South African currency to be paid,
subject to the consent of the Exchange Control Department of the South African
Reserve Bank, to shareholders resident outside South Africa, at the prevailing rate
of exchange. Dividends paid to registered holders of CUFS will be paid in
Australian currency (see section 3.11 of this Statement).
||Directors qualification and number of directors
The JSE listings requirements require a listed company to have at least 4 directors.
AngloGold has 15 directors. The SA Companies Act allows a company to vary the
number of its directors in general meeting, provided that the number does not fall
below the minimum prescribed by the JSE listings requirements. AngloGold
articles of association do not require directors to hold any AngloGold shares to
qualify them for appointment as directors.
||Removal of directors, filling of vacancies
The SA Companies Act provides that directors may be removed by a vote of the
majority of shareholders at a meeting of which special notice has been given.
Under the AngloGold articles of association a director may be removed by a
resolution signed by all other directors of the company.
The SA Companies Act permits a company?s articles of association to provide for
the filling of casual vacancies when a director is disqualified or removed. The
AngloGold articles of association provide that the directors may appoint any
person as a director either to fill a casual vacancy or as an addition to the board,
provided that the maximum permitted number of directors is not exceeded.
||Rotation of directors
The AngloGold articles of association specify that one third of the directors or, if
their number is not a multiple of 3, then the number nearest to, but not less than,
one third, must retire from office at each annual general meeting. Retiring directors
shall be eligible for re-election.
||Quorum of members for a general meeting
The AngloGold articles of association provide that a quorum for a general meeting
consists of 3 shareholders present personally, or if the shareholder is a body
corporate, represented, and entitled to vote.
||Adjournment of inquorate meetings
The SA Companies Act provides that, if a meeting convened upon requisition by a
company?s shareholders is not quorate, such meeting is dissolved. Any other
meeting of a company?s shareholders which is not quorate shall be adjourned to a
date not earlier than 7 days and not later than 21 days after such adjourned
meeting. If at the second meeting a quorum is not present then the shareholders
present in person, by representative or by proxy, as the case may be, shall be a
quorum. Where a meeting stands adjourned, the directors shall upon a date not
later than 3 days after the adjournment publish a notice in a newspaper circulating
in the province of the company?s registered office setting out the information
pertaining to the forthcoming meeting.
||Calling of special members meeting
The directors of a South African incorporated company such as AngloGold must,
on the requisition of 100 shareholders of the company or of shareholders holding
not less than 5% of the company?s capital, within 14 days of the lodging of a
requisition by such shareholders, issue a notice to shareholders convening a general
meeting for a date not less than 21 days and not more than 35 days from the date of
the notice. If the directors fail to convene the meeting, the requisitionists may
convene such meeting upon 21 days notice.
||Notice of members? meetings
The AngloGold annual general meeting and a meeting of AngloGold shareholders
for the purpose of passing a special resolution may be called by giving 21 clear
days notice in writing of that meeting. For any other meeting of AngloGold
shareholders, 14 clear days notice must be given.
||Nomination of directors
Directors of AngloGold may be nominated and appointed at a general meeting of
AngloGold shareholders. Once appointed, a director must sign a consent form to
act as such. The JSE listing requirements provide that the period to be allowed
before the date of an annual general meeting for the nomination of a new director
must be such as to give sufficient time after the notice of the holding of the meeting
for nominations to reach the company?s office from any part of South Africa.
The Code of Corporate Practices and Conduct of the King Report on Corporate
Governance, 1994 (the King Report) sets out guidelines to promote the highest
standards of corporate governance among South African companies. The JSE has
recommended that all companies listed on the JSE comply with the King Report.
The provisions of the King Report are not mandatory but are merely
Some of the salient features of the King Report are:
a unitary board of directors structure is preferable to a management
supervisory board structure;
no board should have less than 2 non-executive directors;
the board must retain full and effective control over the company, monitor
the executive management and ensure that the decision of material matters
is in the hands of the board;
the chairman, unless it is considered by the board not to be in the
company?s interest, should be a non-executive director of the company
and should not also be the chief executive;
the non-executive directors should bring an independent judgment to bear
on issues of strategy, performance, resources (including key
appointments) and standards of conduct;
board meetings must be held regularly, having regard to the company?s
own circumstances, however, meetings should be held at least once a
affirmative action programmes should be part of each company?s business
plan which is important for operations to survive and thrive in the new
South Africa; and
there should also be a code of ethics which the company should commit to
with the highest standards of behaviour and there should be a sufficiently
detailed and clear guide on ethics so that all employees should be aware of
the expected behaviour.
The board of directors of AngloGold believes that the business of AngloGold
should be conducted according to the highest legal and ethical standards.
AngloGold is committed to a system of sound corporate governance, including the
provisions of the King Report.
Under the AngloGold articles of association, if AngloGold were to be wound up
the assets remaining after payment of all the debts and liabilities of AngloGold,
including the costs of liquidation, must be applied to repay to the AngloGold
shareholders the amount paid up on the issued capital of AngloGold and thereafter
the balance shall be distributed to AngloGold shareholders in proportion to their
respective shareholdings, subject to the rights attached to any preference shares.
||Business introduced by members at annual meeting
The AngloGold articles of association provide that all business to be laid before a
general meeting (other than the prescribed business to be laid before the annual
general meeting) shall be specified in the notice convening such meeting and no
other business shall be transacted.
At an annual general meeting, the matters to be dealt with are prescribed by the SA
Companies Act and are stated in the AngloGold articles of association. These
considering the annual financial statements and report of the auditors;
the election of directors;
the appointment of auditors;
any business arising from the annual financial statements which are laid
before the meeting; and
any matters capable of being dealt with at any general meeting.
||Rights to inspect corporate books and records
Under the SA Companies Act, every member of a company at the member?s
request and on payment of the prescribed fee may request a copy of the company?s
memorandum and articles of association, including any alteration to them.
A copy of the certificate of incorporation and the memorandum and articles of
association, certified by a notary public, are to be kept at the registered office of
the company and members are entitled to make copies. In addition, these
documents are public documents and upon payment of the prescribed fee, can be
obtained by any member of the public from the office of the Registrar of
Under the SA Companies Act, each member is entitled to receive a copy of the
company?s last annual financial statements, the provisional annual financial
statements and the last interim report within 7 days of a request being made.
Under the AngloGold articles of association, the accounting records must be kept
at the registered office or such other place as the directors may think fit. The
directors may determine whether and to what extent the accounting records shall be
open to inspection by shareholders, subject to the rights granted to members under
the SA Companies Act.
||Right to inspect the register of members
Under the SA Companies Act, the register of members of a company must during
business hours be open for inspection by any member or his authorised agent free
of charge and by any other member of the public upon payment of a prescribed fee.
Any person may apply to a company for a copy of an extract from the register of
members which the company must furnish upon payment of the prescribed fee.
This also applies in respect of any register of transfers kept by the company as well
as the register of directors, officers, company secretaries and auditors of the
company. The above registers must be kept at the registered office of the company
and if the registers are moved then the Registrar of Companies must be informed
||Derivative action and shareholder class action suits
Under the common law of South Africa a company is the proper plaintiff to bring
an action in respect of a wrong done to it. However, members of a company have a
choice between a common law action or a statutory derivative action to sue on
behalf of the company to assert the company?s rights and to seek relief for the
company. The common law derivative action may be instituted by a member of the
company. It is generally accepted that such an action may be instituted if an
unratifiable wrong has been done to the company and the company cannot or will
not institute action against the wrongdoers because such wrongdoers control the
Under the SA Companies Act, a statutory derivative action may be instituted by a
member of a company if that company has suffered damages or loss or has been
deprived of any benefit as a result of a wrong, a breach of trust or a breach of faith
that has been committed by any director or officer of the company or any past
director or officer of the company while he was a director or officer of that
company, where that company has refused to redress the wrong. However, this
action is limited to the extent that an action can only be instituted in respect of
damage or loss suffered by the company and not the members. Furthermore, the
action is only available if the company has not itself instituted action. Such
proceedings can be instituted even if the company has ratified or condoned the
cause of action or any conduct or omission relating thereto.
Under the SA Companies Act any member has a remedy in cases of oppressive or
unfairly prejudicial conduct. Any member complaining of a particular act or
omission of the company which is believed to be unfairly prejudicial, unjust or
inequitable may apply to court for an order. The court may, with a view to
bringing an end to the matters complained of, make such orders as it deems fit,
whether for regulating the future conduct of the company?s affairs or for the
purchase of the shares of any shareholders of the company by other shareholders or
by the company, or for the alteration of its memorandum or articles of association.
||Indemnification of officers and directors
Section 247 of the SA Companies Act provides that a company may indemnify a
director, officer or auditor in respect of any liability incurred by that person in
defending any proceedings against them (in their capacity as director, officer or
auditor of the company) whether civil or criminal in which judgment is given in
their favour or in which they are acquitted or in respect of any such proceedings
which are abandoned. The indemnity may include expenses (including attorneys?
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with the action, suit or proceedings.
Section 248 of the SA Companies Act allows the court to grant relief to any
director, officer or auditor of a company if it appears to the court that the person
concerned is or may be liable in respect of the negligence, default, breach of duty
or breach of trust, but has acted honestly and reasonably, and that having regard to
all the circumstances of the case, including those connected with the appointment,
that person ought fairly to be excused for such negligence, default or breach of
trust, the court may relieve them, either wholly or partly, from its liability on such
terms as the court may deem fit.
The AngloGold articles of association provide that, subject to the provisions of the
SA Companies Act, every director, manager, secretary, and other officer or servant
of AngloGold shall be indemnified by AngloGold against all costs, losses and
expenses which any such officer or servant may incur or become liable to pay by
reason of any contract entered into, or any act or omission done or omitted to be
done by them in the discharge of their duties, including travelling expenses.
Under South African common law, directors are required to comply with certain
fiduciary obligations to the company and to exercise proper care and skill in
discharging their responsibilities. In this regard, a director owes to the company a
duty to exercise his powers in what he honestly believes is in the best interests of
the company. These fiduciary duties include: the duty to act in good faith; to
exercise their powers for a proper purpose; not to fetter their discretion; to avoid
conflicts of interest; not to use corporate property, information or opportunities for
personal profit; to exercise care and skill; and, the duty to disclose or account for
In addition to these common law duties, directors of South African companies are
required to comply with a number of statutory duties imposed by the SA
Companies Act. A few of the more relevant duties are:
the duty to ensure that the company does not give directly or indirectly,
any financial assistance for the purpose of or in connection with the
purchase of its shares or the shares of its holding company (except in
respect of the purchase by a company of its own shares, and in respect of
the purchase by a subsidiary of shares in its holding company, as
permitted under the SA Companies Act);
the duty not to allot or issue shares of the company without the prior
approval of the shareholders in general meeting (which approval may be
given specifically or generally);
directors who are directly or indirectly interested in contracts with the
company must disclose their interests in such contracts to their co-directors
and provide all relevant information relating to the contracts,
before or at the directors? meeting at which the contract is first considered.
In addition, a director is not permitted to enter into such contracts before a
resolution approving the conclusion of such contracts has been passed by
directors must ensure that the notice convening a meeting to confirm or
authorise a contract in which a director is materially interested, whether
directly or indirectly, states the full particulars of the interest of the
director in such contract. Such declarations of interest by the directors
must be recorded in the minutes of any meeting of directors at which the
declaration is made;
directors must not carry on the business of the company recklessly or
fraudulently. Directors who are knowingly party to the business being
carried out in such a manner will be personally liable for the company?s
liabilities and will also be guilty of a criminal offence; and
the directors may not, without the approval of the shareholders in general
meeting, dispose of the whole or the greater part of the company?s
undertaking or assets.
||Amendment to memorandum or articles of association
Under the SA Companies Act, a company may by special resolution amend its
memorandum of association and articles of association.
||Vote required for extraordinary corporate transactions
The SA Companies Act requires the following matters to be resolved by a
company by special resolution:
the change of name of a company;
any amendment to the existing share capital of a company;
the conversion of a company from one type or form to another; and
a decision to wind up the company.
Under the SA Companies Act a special resolution may be passed by the company if
not less than 21 clear days notice of a general meeting is given, which notice
specifies the intention to propose a special resolution and shareholders holding at
least 25% of the total votes of the shareholders entitled to vote are present in
person or by proxy. If the meeting is not quorate it shall stand adjourned to a date
not earlier than 7 days and not later than 21 days after the adjourned meeting, and
the members present at the second meeting shall constitute a quorum. A special
resolution may only be passed by a vote of 75% of the shareholders present
personally or by proxy and entitled to vote. A majority representing 75% of the
votes exercisable by members or a class of members is required to approve a
scheme of arrangement, subject to court approval.
The SA Companies Act requires the following matters to be resolved by a
company by special resolution:
the change of name of a company;
any amendment to the existing share capital of a company;
the conversion of a company from one type or form to another; and
a decision to wind up the company.
Takeovers, schemes of arrangement, mandatory offers and sale of assets are
governed by the SA Companies Act as well as the Securities Regulation Code.
A mandatory offer is governed by the Securities Regulation Code. When any
person holding less than a specified percentage (35%) acquires securities which
together with securities already held by such person carry the specified percentage
or more of the voting rights of a company, or any person who together with other
persons acting in concert with them, holds not less than the specified percentage
but not more than 50% of the voting rights of a company and such person, or any
person acting in concert with them, acquires in any period of 12 months additional
securities which carry more than 5% of the voting rights, then such person must
extend offers to the holders of any class of equity capital and also to the holders of
any class of voting non-equity capital to acquire all of their securities or such
portion of their securities as the Securities Regulation Panel may determine. The
offer shall be for the same or comparable consideration. Offers for different
classes of equity must be comparable and the Securities Regulation Panel must be
consulted in advance in such cases. All shareholders must be treated equally and
the offer must remain open for a period of 21 days. If an offer is conditional then
after the offer has become unconditional as to acceptances it must remain open for
at least 14 days after the period of at least 21 days. The offer must become
unconditional as to acceptances by no later than the 60 th day after the posting of the
If, in the event of a takeover offer under the Securities Regulation Code, 90% or
more of the offerees accept the offer, the shares of the remaining offerees can be
compulsorily acquired under section 440K of the SA Companies Act. A circular is
required which has to be approved by the JSE and the Securities Regulation Panel.
Shareholders are also given the opportunity to apply to the court for an order that
the shares should not be compulsorily acquired or that they should be compulsorily
acquired for different consideration. The onus is on the shareholders applying to
court to satisfy the court that the offer is not fair once the 90% of the minority have
already accepted the offer.
The SA Companies Act allows a scheme of arrangement between a company and
its members, if that scheme is sanctioned by the High Court of South Africa. The
procedure involved is firstly the preparation of a detailed circular, an application to
the court for an order convening the scheme meeting, the holding of a scheme
meeting and a further application to the court for the sanctioning of the scheme and
for confirmation of the scheme. All of the members of the company are bound by
any order of the court sanctioning the scheme. An order to this effect will only be
made by the court where it is satisfied that 75% of the members present and voting
at the scheme meeting approved the scheme.
Under the SA Companies Act, when a company wishes to sell a major portion of
its assets, an ordinary resolution must be passed by the majority of shareholders
approving the disposal of such assets. In addition, the transaction would be subject
to the Securities Regulation Code.
||Exchange control requirements
In South Africa, exchange control regulations exist which are enforced by the
South African Reserve Bank. Exchange control regulations apply by and large
only to South African residents.
Other material information
There is no other information material to the making of a decision by an offeree whether or
not to accept an Offer, being information that is known to AngloGold and has not
previously been disclosed to the holders of shares in Acacia, other than the following:
On 2 September 1999, Delta Gold NL announced a proposed offer for all of the
issued shares in Acacia. The consideration proposed was one share in Delta Gold
NL for every share in Acacia. On 21 October 1999, Delta Gold NL announced it
would not proceed with its proposed offer.
On 15 September 1999, Acacia announced that:
20,000 unlisted options in Acacia expiring 22 April 2003 had lapsed; and
15,000 unlisted options in Acacia expiring 28 April 2004 had lapsed.
On 11 October 1999, in response to the announcement of the takeover scheme by
AngloGold, Acacia announced that it was the intention of the Acacia board of
directors to recommend shareholders accept AngloGold?s offer, in the absence of a
On 15 October 1999, Colonial Limited announced an increase in its substantial
holding in Acacia from 5.15% to 6.48%.
AngloGold Investments Australia will seek various exemptions and modifications
of the Corporations Law from ASIC in relation to this Statement and the proposed
offers. These may be summarised as follows:
modification to permit the Offers to extend to any shares in Acacia which
may be issued during the offer period on the exercise of options granted
under the Acacia employee share option plan. AngloGold Investments
Australia does not presently intend to make offers to acquire those options
and does not intend, if it is required under section 703(4) of the
Corporations Law to give notice to the optionholders, to propose terms for
the acquisition of the options;
modification to permit the payment of cash to persons who might
otherwise be entitled to a fraction of an AngloGold share under the Offers;
modification to permit AngloGold Investments Australia to arrange for the
sale by a nominee of AngloGold shares which might otherwise be allotted
to United States, Japanese and Canadian residents or to persons who
would be entitled to 5 or less AngloGold shares and for the sale proceeds
to be sent to those persons (as described in clause 8.4 of the proposed
modification to relieve AngloGold Investments Australia of the
requirement to show details of changes in AngloGold?s capital structure
which occurred on or before 29 June 1998, being the effective date of the
Scheme of Arrangement which restructured AngloGold and to permit
details of changes in the capital structure of AngloGold as a result of the
exercise of employee options to be presented in summary form.
ASIC has given in principle approval for these modifications and exemptions.
Proposed offer period
The Offers are intended to remain open for a period of one month after the date of the
Offers unless they are withdrawn, or this period is extended, as permitted by the
In this Statement, unless the contrary intention appears, words and phrases have the same
meaning and interpretation as in Chapter 6 of the Corporations Law. The documents entitled
?Information about AngloGold?, ?Intentions and the effect of the takeover on AngloGold?
and the attachments to this document form part of this Statement and any definitions in
those documents apply throughout this Statement.
being directors of AngloGold Investments Australia authorised to sign this Statement pursuant to a
resolution passed at a meeting of directors held on 29 October 1999.
A copy of this Part A Statement has been registered by the Australian Securities & Investments
Commission on 1 November 1999. The Commission takes no responsibility as to its contents.