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Issue 2003	DRD Business Review • 30 June 2003 JHB: DUR NY: DROOY Sydney: DRD
Home Corporate profile Financial highlights Chairman’s statement Directorate & management Directors’ report Corporate governance statement Statement of reserves & resources Exploration Management discussion and analysis Statement of responsibility by the board of directors Company secretary’s report Report of the independent auditors Annual financial statements: Income statements Balance sheets Statements of shareholders’ equity Cash flow statements Notes to the cash flow statements Notes to the annual financial statements Condensed consolidated financial statements - US GAAP Notice to shareholders Shareholder analysis Shareholders’ diary Conversion table Glossary of terms Form of proxy Notes to proxy Notice of direction Contacts	First floor  financial highlights | at a glance | measuring up | gold bugs and proud of it | looking east | over the hedge, into the straight | shot in the arm | a bit of R&R | staying on the right side of the law From the field v8 : blyvoor | leaner, meaner | crown of thorns | health and safety | scorecard | green machine | people power It's a wrap new broom Left field keeping it clean Freelance mining writer Julie Walker reflects on the importance of good corporate governance in the South African mining industry During Johannesburg’s mini gold-boom in the 1980s it was strongly rumoured that the only person to have keys to the gold-safe at a certain mine was the entrepreneurial owner-operator. While the family was by far the largest shareholder in the publicly quoted company, minorities did exist and had furnished capital.     No doubt the family believed that no one else was to be trusted with the gold itself. The point is, could outside shareholders trust the family members to account for all the gold?     When reporting results, how easy could it be for them to observe "a sudden drop in grade", or "an unexpected increase in operating costs", or "problems with recovery in the plant"?     There cannot be a mining company in history that has not experienced these or similar problems that genuinely contributed to lower profitability. It takes a brave shareholder to stand up at the annual general meeting and accuse the management of theft when it has laid out its excuses for all to scrutinise.     When a high-street bank-teller is caught with his fingers in the till, the public does not automatically label the entire bank crooked. How could management reasonably pre-empt every last vestige of dishonesty in its thousands of employees?     What the public expects is for management to make good any loss or damage, and to fire and prosecute the recalcitrant.     What about investors in gold companies? Every mine complains about gold theft – some say the amount stolen is perhaps 10% of the amount produced. Employees usually get the blame, not management or the board. It could be asked just how this much gold could disappear as though under a magic cloak of protection. Investors expect management to do something about it, management brings in private investigators, sometimes there is a "find" and gold comes back. It is a wrong righted.     Corporate governance cannot legislate morality. Crooks will be crooks. King II aspires to contain the potential for damage by calling for adherence to a sensible set of parameters.     Companies that merely pay lip-service to the objectives will sooner or later find themselves without investors. More than 200 small companies have elected to delist from the JSE in the past three years, usually being bought back by the former principals, because adhering to the rules is too much bother. Of necessity, they have to source capital elsewhere.     It is incumbent upon the management of publicly quoted gold-mining companies to bring to book those who would by-pass safety regulations or discriminatory practices. So why should dishonest white-collar workers get off with a warning?     It is regrettable that white-collar crime is taken far less seriously in South Africa than it is in many other countries. That SA is lenient is doubtless historical: white management counted for more than did black labour. Improved corporate governance recommendations are going some of the way towards redressing the imbalance by making those responsible really accountable. South African companies will fall short in the global market if they cannot be seen to be playing by the rules.