UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 20-F
 REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
 OR
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 OR
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 OR
 SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT 1934
 For the fiscal year ended June 30, 2013
 Commission file number 0-28800
 DRDGOLD LIMITED
 (Exact name of Registrant as specified in its charter and translation of Registrant's name into English)
 REPUBLIC OF SOUTH AFRICA
 (Jurisdiction of incorporation or organization)
 50 Constantia Boulevard, Constantia Kloof Ext 28, Roodepoort, 1709, South Africa
 (Address of principal executive offices)
 Craig Barnes, Chief Financial Officer, Tel. no. +27 11 470 2600, Email craig.barnes@drdgold.com
 50 Constantia Boulevard, Constantia Kloof Ext 28, Roodepoort, 1709, South Africa
 (Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person)
     Title of each class:
 Name of each exchange on which registered:
      None
  None
   period covered by the annual report.
 
 As of June 30, 2013 the Registrant had outstanding 385,383,767 ordinary shares, of no par value.
  
  
  Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to filesuch reports), and (2) has been subject to such filing requirements for the past 90 days.
 
  every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232-405 of this chapter)during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes
 
 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. Large accelerated filer  Accelerated filer  Non-accelerated filer  Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this
 .


TABLE OF CONTENTS
 Page
 PART I
 ITEM 1.
 IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
  .................................................................
 4
 ITEM 2.
 OFFER STATISTICS AND EXPECTED TIMETABLE
  ...............................................................................................    
  4
 ITEM 3.
 KEY INFORMATION
  .................................................................................................................................................    
  4
 
 3A.
 Selected Financial Data
  ................................................................................................................................................    
  4
 
 3B.
 Capitalization And Indebtedness
  ..................................................................................................................................     
  6
 
 3C.
 Reasons For The Offer And Use Of Proceeds ..............................................................................................................     
  6
 3D.
 Risk
 Factors
 ................................................................................................................................................................     
  6
 ITEM 4.
 INFORMATION ON THE COMPANY
  ......................................................................................................................   
  18
 
 4A.
 History And Development Of The Company
  .............................................................................................................
 18
 4B.
 Business
 Overview
 ......................................................................................................................................................   
  20
 4C.
 Organizational
 Structure
 .............................................................................................................................................    
  29
 
 4D.
 Property, Plant And Equipment
  .................................................................................................................................
 29
 ITEM 4A.
 UNRESOLVED STAFF COMMENTS
  .........................................................................................................................    
  44
 ITEM 5.
 OPERATING AND FINANCIAL REVIEW AND PROSPECTS
  ..................................................................................    
  45
 
 5A.
 Operating Results
  ........................................................................................................................................................
 46
 5B.
 Liquidity
 And
 Capital
 Resources
 ................................................................................................................................    
  66
 
 5C.
 Research And Development, Patents And Licenses, Etc .............................................................................................    
  68
 5D.
 Trend
 Information
 ......................................................................................................................................................
 68
 
 5E.
 Off-Balance Sheet Arrangements
  ................................................................................................................................    
  68
 
 5F.
 Tabular Disclosure Of Contractual Obligations ............................................................................................................    
  69
 5G.
 Safe
 Harbor
  ................................................................................................................................................................
 69
 ITEM 6.
 DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
  ...................................................................................    
  69
 
 6A.
 Directors And Senior Management
  .............................................................................................................................    
  69
 6B.
 Compensation
  ............................................................................................................................................................
 71
 6C.
 Board
 Practices
 ...........................................................................................................................................................    
  73
 6D.
 Employees
 ..................................................................................................................................................................    
  77
 6E.     
  Share Ownership
 .........................................................................................................................................................
 79
 ITEM 7.
 MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
  ...................................................................
 81
 7A.
 Major
 Shareholders
 ....................................................................................................................................................    
  81
 7B.
 Related
 Party
 Transactions
 .........................................................................................................................................    
  83
 
 7C.
 Interests Of Experts And Counsel
  ................................................................................................................................   
  84
 ITEM 8.
 FINANCIAL INFORMATION
  ....................................................................................................................................   
  84
 
 8A.
 Consolidated Statements And Other Financial Information .........................................................................................   
  84
 8B.
 Significant
 Changes
 ....................................................................................................................................................   
  84
 ITEM 9.
 THE OFFER AND LISTING
  .......................................................................................................................................   
  84
 
 9A.
 Offer And Listing Details
  ............................................................................................................................................   
  84
 9B.
 Plan
 Of
 Distribution
 ....................................................................................................................................................   
  86
 9C.
 Markets
 .......................................................................................................................................................................   
  86
 9D.
 Selling
 Shareholders
 ...................................................................................................................................................   
  86
 9E.      
  Dilution
 .......................................................................................................................................................................   
  86
 
 9F.
 Expenses Of The Issue
  ................................................................................................................................................
 86
 ITEM 10.
 ADDITIONAL INFORMATION
  ................................................................................................................................   
  86
 10A.
 Share
 Capital
 ..............................................................................................................................................................   
  86
 
 10B.
 Memorandum of Incorporation
  ..................................................................................................................................
 86
 10C.
 Material
 Contracts
 ......................................................................................................................................................    
  89
 10D.
 Exchange
 Controls
 .....................................................................................................................................................    
  90
 10E.
 Taxation
 .....................................................................................................................................................................
 92
 
 10F.
 Dividends And Paying Agents
  .....................................................................................................................................    
  96
 
 10G.
 Statement By Experts
  ................................................................................................................................................     
  96
 10H.
 Documents
 On
 Display
 ..............................................................................................................................................     
  96
 10I.
 Subsidiary
 Information
 ..............................................................................................................................................     
  96
 ITEM 11.
 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  .................................................
 97
 ITEM 12.
 DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
  ................................................................
 98
 12A.
 Debt Securities
  ...........................................................................................................................................................     
  98
 12B.
 Warrants and Rights
  ..................................................................................................................................................     
  98
 12C.
 Other Securities
  ..........................................................................................................................................................    
  98
 12D
 American Depositary Shares
  ......................................................................................................................................     
  98


TABLE  OF  CONTENTS
 PART II
 ITEM 13.
 DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
  ............................................................................
 99
 ITEM 14.
 MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS .
 99
 ITEM 15.
 CONTROLS AND PROCEDURES .............................................................................................................................    
  99
 ITEM 16A.
 AUDIT COMMITTEE FINANCIAL EXPERT
  .........................................................................................................    100
 ITEM 16B.
 CODE OF ETHICS
  ....................................................................................................................................................   
  100
 ITEM 16C.
 PRINCIPAL ACCOUNTANT FEES AND SERVICES
  ...............................................................................................   
  100
 ITEM 16D.
 EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
  ................................................
 101
 ITEM 16E.
 PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
  ..............................
 101
 ITEM 16F
 CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT
  .................................................................................   
  101
 ITEM 16G.
 CORPORATE GOVERNANCE
  .................................................................................................................................    
  101
 ITEM 16H.
 MINE SAFETY DISCLOSURES
  ...............................................................................................................................    
  101
 PART III
 ITEM 17.
 FINANCIAL STATEMENTS
  ..................................................................................................................................     
  102
 ITEM 18.
 FINANCIAL STATEMENTS
  ..................................................................................................................................
 F-pages
 ITEM 19.
 EXHIBITS
  ..............................................................................................................................................................      
  103


1
 Preparation of Financial Information
   Accordingly, our books of account are maintained in South African Rand. Our financial statements included in our corporate filings in South Africa were prepared in accordance with International Financial Reporting Standards (IFRS), as approved by the International Accounting Standards Board (IASB) for the financial years ended June 30, 2011, 2012 and 2013. All references to “dollars” or “$” herein are to United States Dollars, references to “rand” or “R” are to South African Rands.
   IFRS as issued by the IASB. All financial information, except as otherwise noted, are stated in accordance with IFRS as issued by the IASB.
   Annual Report on Form 20-F contains translations of certain rand amounts into dollars at specified rates. These rand amounts donot represent actual dollar amounts, nor could they necessarily have been converted into dollars at the rates indicated. Unlessotherwise indicated, rand amounts have been translated into dollars at the rate of R10.0623 per $1.00, which was the noon buyingrate in New York City on September 30, 2013.
   operating costs per kilogram”, “all-in sustaining costs per kilogram” and “all-in costs per kilogram” which have been determinedusing industry guidelines promulgated by the World Gold Council and “capital expenditure (cash)”, which we use to determine costs associated with producing gold, cash generating capacities of the mines and to monitor performance of our mining operations. An investor should not consider these items in isolation or as alternatives to cash and cash equivalents, operating costs, profit/(loss) attributable to equity owners of the parent, profit/(loss) before taxation and other items or any other measure offinancial performance presented in accordance with IFRS or as an indicator of our performance. While the World Gold Council has provided definitions for the calculation of cash operating costs, the calculation of cash operating costs per kilogram, all-insustaining costs and all-in costs per kilogram may vary significantly among gold mining companies, and these definitions by themselves do not necessarily provide a basis for comparison with other gold mining companies. See “Glossary of Terms and Explanations” and Item 5A.: “Operating Results - Cash operating costs, all-in sustaining costs and all-in costs per kilogram- Reconciliation of cash operating costs per kilogram, all-in sustaining costs per kilogram, all-in costs per kilogram and capitalexpenditure (cash).”
 DRDGOLD Limited
    Special Note Regarding Forward-Looking Statements
   regarding future events or other future financial performance and information relating to us that are based on the beliefs of our management, as well as assumptions made by and information currently available to our management. Some of these forward-looking statements include phrases such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “should,” or “will continue,” or similar expressions or the negatives thereof or other variations on these expressions, or similar terminology, or discussions of strategy, plans or intentions. These statements also include descriptions in connection with, among other things:
 · estimates regarding future production and throughput capacity; · our anticipated commitments; · our ability to fund our operations in the next 12 months; and · estimated production costs, cash operating costs per ounce, all-in sustaining costs per ounce and all-in costs per ounce.
  assumptions. Many factors could cause our actual results, performance or achievements to be materially different from any futureresults, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others:
 · adverse changes or uncertainties in general economic conditions in South Africa;  · regulatory developments adverse to us or difficulties in maintaining necessary licenses or other governmental approvals; · changes in our competitive position; · changes in business strategy; · any major disruption in production at our key facilities; or  · adverse changes in foreign exchange rates and various other factors.


2
  results, causing these results to differ materially from these expressed in any forward-looking statements. These factors are notnecessarily all of the important factors that could cause our results to differ materially from those expressed in any forward-looking statements. Other unknown or unpredictable factors could also have material adverse effects on future results.
   thereof. We do not undertake any obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this Annual Report or to reflect the occurrence of unanticipated events.
 Imperial units of measure and metric equivalents
   Metric
 Imperial
 Imperial
 Metric
                                         Glossary of Terms and Explanations
 All-in sustaining costs per kilogram
  ................................
 All-in sustaining costs is a measure on which guidance were provided by the World Gold Council and include cash operating costs of production plus, on-site general and administrative costs, royalties and production taxes, sustaining capital, sustaining exploration, the accretion of rehabilitation costs, but excludes depreciation, retrenchment costs, finance costs, depletion and amortization, reclamation and closure costs. All-in sustaining costs per kilogram are calculated by dividing all-in sustaining costs by kilograms of gold produced. This is a non-IFRS financial measure and should not be considered a substitute measure of costs and expenses reported by us in accordance with IFRS.
  total operating costs, plus all-in sustaining costs, non-sustaining capital costs relating to projects, retrenchment costs, capital recoupment relating to non-sustaining capital, ongoing rehabilitation expenditure, and non-operating costs, but exclude taxation, minority interest, finance costs, profit or loss from associates and the cumulative effect of accounting adjustments. All-in costs per kilogram are calculated by dividing all-in costs by kilograms of gold produced. This is a non-IFRS financial measure and should not be considered a substitute measure of costs and expenses reported by us in accordance with IFRS.
 Assaying
  ................................ The chemical testing process of rock samples to determine mineral content. $/oz
  ....................................... US dollar per ounce Care and maintenance ............. Cease active mining activity at a shaft, but continue to incur costs to ensure that the Ore Reserves are
  Cash operating costs per kilogram
  .................................
 Cash operating costs are operating costs incurred directly in the production of gold and include labor costs, contractor and other related costs, inventory costs and electricity costs. Cash operating costs per kilogram are calculated by dividing cash operating costs by kilograms of gold produced. Cash operating costs per kilogram have been calculated on a consistent basis for all periods presented. This is a non-IFRS financial measure and should not be considered a substitute measure of costs and expenses reported by us in accordance with IFRS.
 Conglomerate
  ......................... A coarse-grained sedimentary rock consisting of rounded or sub-rounded pebbles. Cut-off grade
  .......................... The minimum in-situ grade of ore blocks for which the cash operating costs per ounce, excluding
  Depletion
  ............................... The decrease in the quantity of ore in a deposit or property resulting from extraction or production. Deposition
  ............................. Deposition is the geological process by which material is added to a landform or land mass. Fluids
 such as wind and water, as well as sediment flowing via gravity, transport previously eroded sediment, which, at the loss of enough kinetic energy in the fluid, is deposited, building up layers of sediment. Deposition occurs when the forces responsible for sediment transportation are no longer sufficient to overcome the forces of particle weight and friction, creating a resistance to motion.


3
       g/t
  .......................................... Grams per ton. Horizon
  ................................. A plane indicating a particular position in a stratigraphic sequence. This may be a theoretical surface
  Life of mine
  ........................... Projected life of a mining operation based on the Proven and Probable Ore Reserves. Metallurgical plant
  ................. A processing plant (mill) erected to treat ore and extract the contained gold. Mine call factor
  ..................... This is the gold content recovered expressed as a percentage of the gold content called.Mill
  ........................................ Material passed through the metallurgical plant for processing.Mt
  .......................................... Million  tons. Opening up
  ............................. The potential that previously abandoned shafts and mining or developed areas, have to be reopened
    Ore Reserves ........................... Attributable total ore reserves of subsidiaries.Pay-limit
  ................................ The minimum in-situ grade of ore blocks for which cash operating costs, including all overhead costs,
   workings or drill holes; grade and/or quality are computed from the results of detailed sampling and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth, and mineral content of Ore Reserves are well-established.
  used for Proven Ore Reserves, but the sites for inspection, sampling, and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for Proven Ore Reserves, is high enough to assume continuity between points of observation.
 oz/t
  ........................................ Ounces per ton. Reef
  ....................................... A  gold-bearing  sedimentary horizon, normally a conglomerate band that may contain economic levels
  Refining
  ................................. The final purification process of a metal or mineral. Rehabilitation
  ......................... The process of restoring mined land to a condition approximating its original state. Reserves
  ................................. That part of a mineral deposit which could be economically and legally extracted or produced at the
     also used for ventilation and as an auxiliary exit. It is equipped with a hoist system that lowers and raises a cage in the shaft, transporting equipment, personnel, materials, ore and waste. A shaft generally has more than one compartment.
   Sloughing
  ............................... The localized failure of part of the slimes dam wall caused by a buildup of water within the dam. Stope
  ..................................... Underground production working area on the Ore Horizon. Stoping
  .................................. The removal of the wanted ore from an underground mine leaving behind an open space known as a
 stope. Stoping is used when the country rock is sufficiently strong not to cave into the stope, although in most cases artificial support is also provided.
 t’000
  ...................................... Tons in thousands. Tailings
  .................................. Finely ground rock from which valuable minerals have been extracted by milling, or any waste rock,
     reserves of gold-bearing material in-situ or quantities of ore and waste material mined, transported or milled.
 Tpm
  ....................................... Tonne  per  month. Waste rock
  ............................. Non-auriferous rock. Yield
  ...................................... The amount of recovered gold from production generally expressed in ounces or grams per tonne of


PART I
 ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
 Not  applicable.
 ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
 Not  applicable.
 ITEM 3. KEY INFORMATION
 3A. SELECTED FINANCIAL DATA
 
 The following selected consolidated financial data as at June 30, 2013, 2012 and 2011 and for the years ended June 30,
 2013, 2012 and 2011 are derived from our consolidated financial statements set forth elsewhere in this Annual Report, which havebeen prepared in accordance with IFRS, as issued by the IASB. These consolidated financial statements have been audited by KPMG Inc.  The selected consolidated financial data as at June 30, 2010 and 2009, and for the years ended June 30, 2010 and 2009 is derived from audited consolidated financial statements not appearing in this Annual Report which have been prepared in accordancewith IFRS as issued by the IASB. The selected consolidated financial data set forth below should be read in conjunction with Item 5.: “Operating and Financial Review and Prospects” and with the consolidated financial statements and the notes thereto and the other financial information appearing elsewhere in this Annual Report.


5
 Selected Consolidated Financial Data
 (in thousands, except share, per share and ounce data)
 
 Year ended June 30,
 2013
 1
 2013
 20122
 20112  20102
 2009
 2
 $’000
 R’000
 R’000
 R’000  R’000
 R’000
 Profit or loss Data
                                owners of the parent from continuing operations
  ....................................................
       Per Share Data
                                                 
      Statement of financial position data
                      Month
 2013
 2013
 2013
 2013  2013
 2013
 September
 August
 July
 June  May
 April
 Exchange Rate Data
                      
 1
 Translations into Dollars in this table are for convenience only and are computed at the noon buying rate in New York City at September 30,
 2013 of R10.0623 per $1.00. You should not view such translations as a representation that such amounts represent actual Dollar amounts. 2 Comparatives have been restated for the reclassification of Blyvooruitzicht Gold Mining Company Limited (Blyvoor) as a discontinued operation (disposed June 1, 2012). 3 Ordinary share capital is stated after the deduction of R44.4 million (2012: R44.8 million) share capital relating to treasury shares held within the Group.


6
 3B. CAPITALIZATION AND INDEBTEDNESS
 
 3C. REASONS FOR THE OFFER AND USE OF PROCEEDS
 
 3D. RISK FACTORS
  our operational processes, while others relate to our business environment. It is important to understand the nature of these risks and the impact they may have on our business, financial condition and operating results.
   · Risks related to our business and operations; · Risks related to the gold mining industry; · Risks related to doing business in South Africa; and  · Risks related to ownership in our ordinary shares or American Depositary Shares, or ADSs.
 Risks related to our business and operations
 Changes in the market price for gold, which in the past has fluctuated widely, and exchange rate fluctuations affect the
 profitability of our operations and the cash flows generated by those operations.
   financial condition have been and could be materially harmed in the future by an appreciation in the value of the rand. Due to the marginal nature of our operations any sustained decline in the market price of gold, would adversely affect us, and any decline in the price of gold below the cost of production could result in the closure of some or all of our operations which would result in significant costs and expenditure, for example, incurring retrenchment costs earlier than expected.  Accordingly, any sustaineddecline in the price of gold would negatively and adversely affect our business, operating results and financial condition.
   rate movements of the rand. We sell our gold and trade our foreign currency at the spot price in the market on the date of trade. If the dollar gold price should fall and/or the rand should strengthen against the dollar, this would adversely affect us and we may experience losses, and if these changes result  in revenue below our cost of production and remain at such levels for any sustained period, we may be forced to curtail or suspend some or all of our operations. We might not be able to recover any losses we mayincur during that period or maintain adequate gold reserves for future exploitation.
   19.3% and 21.1% respectively, however in fiscal 2011, the rand strengthened against the dollar by 10.8% (based on exchange rates at June 30 of each year). From December 2001, when the exchange rate  reached R13.44 = $1.00, the rand has appreciated by 26.6% against the dollar to R9.8675= $1.00 at June 30, 2013 (based on closing rates). At September 30, 2013 the rand traded at R10.0623 = $1.00, a 2.0% weakening relative to the Dollar from June 30, 2013.
   in a decrease in our profitability. In fiscal 2013, 2012 and 2011 all of our production was from South Africa providing significant exposure to the strengthening of the rand and a decrease in profitability. If the rand were to appreciate against the dollar for a continued time, our operations could experience a reduction in cash flow and profitability and this would adversely affect our business, operating results and financial condition.
 Inflation may have a material adverse effect on our results of operations.
   our future operational costs in rand, unless such inflation is accompanied by a concurrent devaluation of the rand against the dollar or an increase in the dollar price of gold.   Significantly higher and sustained inflation in the future, with a consequent increase in operational costs could have a material adverse effect on our results of operations and our financial condition, and could result in operations being discontinued or reduced or rationalized.


7
 We have incurred losses in the past and may incur losses in the future
   compared to  a net loss of R415.4 million for fiscal 2011. The profit in fiscal 2013 was largely due to a 9% increase in the averagerand gold price received amounting to R458,084 per kilogram and an 8% increase in gold produced from continuing operations, which was partly offset by an impairment of R238.0 million relating to R110.2 million against property, plant and equipment, R101.3 million against available-for-sale financial assets and R25.6 million against investments. The profit in fiscal 2012 was largely due to a 36% increase in the average rand gold price received amounting to R418,538 per kilogram. The loss in fiscal 2011 was mainly as aresult of an impairment of R546.6 million ($80.0 million) against the property, plant and equipment of Blyvooruitzicht Gold Mining Company Limited, or Blyvoor, due to the uncertainties surrounding the business rescue proceedings Blyvoor underwent at the end offiscal 2011.
    We may not be able to meet our cash requirements because of a number of factors, many of which are beyond our
 control and cannot guarantee that alternative financing would be available.
   volumes, recovered grades and costs. If we are unable to meet our cash requirements out of cash flows generated from our operations, we would need to fund our cash requirements from alternative financing and we cannot guarantee that any such financing would bepermitted under the terms of our existing financing arrangements, or would be available on acceptable terms, or at all.  In the absence of sufficient cash flows or adequate financing, our ability to respond to changing business and economic conditions, make futureacquisitions, react to adverse operating results, meet our debt service obligations and fund required capital expenditures or increased working capital requirements may be adversely affected.
 The failure to discover or acquire new Ore Reserves could negatively affect our cash flow, results of operations and
 financial condition.
  and acquisition efforts in South Africa and any new regions that we identify for future growth opportunities. Our Ore Reserves for 2013 decreased by 8%, mainly due to depletion from mining activities. Our Ore Reserves for fiscal 2012 decreased by 75%, mainly due to the disposal of Blyvoor which represented 73% of our Ore Reserves on June 30, 2011. Our Ore Reserves for fiscal 2011 increased by 5% due to the higher rand gold price used in the Ore Reserve calculation. Any new or ongoing exploration programs may not result in new mineral producing operations that will sustain or increase our Ore Reserves. A failure to discoveror acquire new Ore Reserves in sufficient quantities to maintain or grow the current level of our reserves will negatively affect our future cash flow, results of operations and financial condition. In addition, if we are unable to identify Ore Reserves that have reasonable prospects for economic extraction while maintaining sufficient controls on production and other costs, this will have a material influence on the future viability of our operations.
 
 We may need to improve our internal controls over financial reporting and our independent auditors may not be able to
 attest to their effectiveness because of inherent limitations.
  to the effectiveness of these controls, as required by Section 404 of the United States Sarbanes-Oxley Act of 2002. Management has determined that these controls were effective for the 2013, 2012 and 2011 fiscal years respectively and did not identify any material weaknesses within our internal controls surrounding the financial reporting process. These internal controls over financial reporting may not be sufficient to prevent significant deficiencies or material weaknesses in the future, and we may also identify other conditions that could result in significant deficiencies or material weaknesses. In this event, we could experience a negative reaction in the financial markets and incur additional costs in improving the condition of our internal controls. For a detailed discussion of controls and procedures, see Item 15.: “Controls and Procedures.”
 
 Single point of failure due to one operating segment
   processing plants, pump stations and deposition site of this business are linked through pipeline infrastructure. The Brakpan plant is now our major processing plant and we have one deposition site. The pipeline infrastructure relating to the Brakpan plant and Brakpan tailings facility are exposed to numerous risks, including operational down time due to unplanned maintenance, destructionof infrastructure, spillages, higher than expected operating costs, or lower than expected production each of which could have amaterial adverse effect on our business, operating results and financial condition.


8
 
 Increased production costs could have an adverse effect on our results of operations.
    · labor stability, lack of productivity and increases in labor costs; · increases in electricity and water prices; · increases in crude oil and steel prices; · unforeseen changes in ore grades and recoveries; · unexpected changes in the quality or quantity of reserves; · technical production issues; · environmental and industrial accidents; · gold theft; · environmental factors; and · pollution.
   petroleum based products. The production costs incurred at our operations have in the past, and could in the future, increase at rates in excess of our annual expected inflation rate and result in the restructuring of these operations at substantial cost. The majority of our South African labor force is unionized and their wage increase demands are usually above the then prevailing rates of inflation. Ergo and ERPM signed a two year wage settlement agreement with effect from July 1, 2013, with the National Union of Mineworkers, or NUM and United Association of South Africa, or UASA, on October 9, 2013, which provides for average annual compensation increases in year one of 10% for categories 4 – 5, 9% for categories 6 – 7 and 8% for categories 8 – 15; and in year two 8% forcategories 4 – 5 and 7.5% for categories 6 – 15. In addition, in the past, we have been impacted by large price increases imposed by our South African steel suppliers and parastatal entities which supply us with electricity and water. Increases in steel, electricity or water prices combined with the increases in labor costs, could result in our costs of production increasing above the gold pricereceived. Discussions with steel suppliers and parastatal entities to moderate price increases have been unsuccessful in the past.
   inflation wage increases prior to expiry of the then outstanding wage agreements. As at September 30, 2013, no such demands havebeen made by our employees but we cannot guarantee that no such demands will be made in the future.
   increases for Ergo and ERPM. The NUM also rejected the 10% increases in the living out allowances for fiscal 2013 and fiscal 2014. The NUM was granted strike certificates in respect of the two operations and strike action started with the morning shift on Tuesday, October 8, 2013. On October 9, 2013, Ergo and ERPM signed a two year wage settlement agreement with effect from July 1, 2013, with NUM and UASA, which provides for average annual compensation increases in year one of 10% for categories 4 – 5, 9% for categories 6 – 7 and 8% for categories 8 – 15; and in year two 8% for categories 4 – 5 and 7.5% for categories 6 –15.
   weakening of the exchange rate although there was a general decrease in the cost of crude oil in global markets. In the event that crude oil prices increase, this could have a significant impact on our production costs.
   controls, may not be sufficient to offset the increases affecting our operations and could adversely affect our business, operating results and financial condition.
 Our operations are subject to extensive environmental regulations which could impose significant costs and liabilities.
   various state, provincial and local laws, which regulate air and water quality, hazardous waste management and environmental rehabilitation and reclamation. Our mining and related activities impact the environment, including land, habitat, streams and environment near the mining sites. Failure to comply with environmental laws or delays in obtaining, or failures to obtain government permits and approvals may adversely impact our operations. In addition, the regulatory environment in which we operate could change in ways that could substantially increase costs to achieve compliance, therefore having a material adverse effect on our profitability.


9
  We have estimated our aggregate group Rehabilitation, Reclamation and Closure cost provision at R524.3 million which is includedin our statement of financial position as at June 30, 2013. However, the ultimate amount of rehabilitation costs may in the futureexceed the current estimates due to factors beyond our control, such as changing legislation, higher than expected cost increases, or unidentified rehabilitation costs. We have funded these environmental rehabilitation costs by making contributions over the life of the mine to environmental trust funds or funds held in insurance instruments established for our operations. If any of the operations are prematurely closed, the rehabilitation funds may be insufficient to meet all the rehabilitation obligations of those operations. The closure of mining operations, without sufficient financial provision for the funding of rehabilitation liabilities, or unacceptable damage to the environment, including pollution or environmental degradation, may expose us and our directors to litigation and potentially significant liabilities.
 
 Flooding at our abandoned underground operations may cause us to incur liabilities for environmental damage.
   surface or decant into surrounding underground mining areas or natural underground water sources. Progressive flooding of theseabandoned underground mining areas and surrounding underground mining areas could eventually cause the discharge of polluted water to the surface and to local water sources.
   to the surface, we may face, together with all other mining companies in those areas, claims relating to environmental damage as a result of pollution of ground water, streams and wetlands. These claims may have a material adverse effect on our business, operating results and financial condition.
 
 Damage to tailings dams and excessive maintenance and rehabilitation costs could result in lower production and health,
 safety and environmental liabilities.
  of such a facility. These may include sabotage, failure by our employees to adhere to the codes of practice and natural disasters such as excessive rainfall, any of which could force us to stop or limit operations. In addition, the dams could overflow and the health and safety of our employees and communities living around these dams could be jeopardized. In the event of damage to our tailings facilities, our operations will be adversely affected and this in turn could have a material adverse effect on our business, operating results and financial condition.
 Due to the nature of our business, our operations face extensive health and safety risks.
  personal injury, to employees. Regrettably one person died in a work-related incident during fiscal 2012. The employee died after he lit a fire in a closed shelter while on duty. According to section 54 of the Mine, Health and Safety Act of 1996, if an inspector believes that any occurrence, practice or condition at a mine endangers or may endanger the health or safety of any person at the mine, the inspector may give any instruction necessary to protect the health or safety of persons at the mine. These instructions could include the suspension of operations at the whole or part of the mine. These incidents could lead to mine operations being halted and that will increase our unit production costs, due to loss of production. This could have a material adverse effect on our business, operating results and financial condition.
 
 Events may occur for which we are not insured which could affect our cash flows and profitability.
   are unable to insure, including those in respect of past mining activities. Our existing property, business interruption and otherinsurance contains certain exclusions and limitations on coverage. We have insured property, including loss of profits due to business interruption in the amount of approximately R6.4 billion. Claims for each and every event are limited by the insurers to R500 million. Business interruption is only covered from the time the loss actually occurs and is subject to time and amount deductibles that vary between categories.
   pollution related accidents, for which coverage is not available. If we are required to meet the costs of claims which exceed our insurance coverage, this could have a material adverse effect on our business, operating results and financial condition.


10
 If we are unable to attract and retain key personnel our business may be harmed.
   technical personnel including our Chief Executive Officer and our Chief Financial Officer who has resigned effective January 1,2014. In addition, we compete with mining and other companies on a global basis to attract and retain key human resources at alllevels with appropriate technical skills and operating and managerial experience necessary to operate the business. Factors critical to retaining our present staff and attracting additional highly qualified personnel include our ability to provide these individuals with competitive compensation arrangements, equity participation and other benefits. If we are not successful in retaining or attracting highly qualified individuals in key management positions, our business may be harmed. We do not maintain “key man” life insurancepolicies on any members of our executive team. The loss of any of our key personnel, our Chief Financial Officer, could delay the execution of our business plans, which may result in decreased production, increased costs and decreased profitability.
 Our flotation and fine-grind project faces the risk of a start-up project.
   gold contained within the sulfides of the tailings material by subjecting the treated material to a flotation circuit, further regrinding and a leach circuit. This project is forecast to be completed during the second quarter of fiscal 2014. The flotation and fine-grindproject is exposed to numerous risks associated with similar start-up projects, including operational down time due to unplannedmaintenance, destruction of infrastructure, spillages, higher than expected operating costs, or lower than expected production which could have a material adverse effect on our business, operating results and financial condition.
 
 Conditions precedent for completion of the Blyvoor sale have not been satisfied and if they are not satisfied or waived
 prior to the relevant end dates our business may be harmed.
   See Item 5A.: “Operating Results - Recent developments” for a more detailed discussion. The conditions precedent for Part A weresatisfied and Part A was completed on June 1, 2012. However, the Part B conditions for the mining right conversion and Ministerialapproval of the transfer of the mining rights owned by Blyvoor may be refused by the Department of Mineral Resources, or DMR, under the Mineral and Petroleum Resources Development Act of 2002, which may result in specified restitution steps taken by eachparty. The sale agreement provides for the possibility that mining right conversion, or Ministerial approval is not obtained. Should either circumstance occur, the sale agreement envisages a number of outcomes which are primarily determined by reference to thereasons for the failure of mining right conversion, or Ministerial approval. On July 30, 2013, Village Main Reef Limited suspended financial assistance to Blyvoor and on August 6, 2013, Blyvoor was placed into provisional liquidation. If the conditions precedentfor Part B of the transaction are not satisfied, or waived by both parties and there is any resulting legal action or dispute, then such legal action or dispute could have an adverse effect on our business, operating results and financial condition.
 Risks related to the gold mining industry
 A change in the price of gold, which in the past has fluctuated widely, is beyond our control.
   · the physical supply of gold from world-wide production and scrap sales, and the purchase, sale or divestment by central  banks of their gold holdings; · the demand for gold for investment purposes, industrial and commercial use, and in the manufacturing of jewelry; · speculative trading activities in gold;  · the overall level of forward sales by other gold producers;  · the overall level and cost of production of other gold producers;  · international or regional political and economic events or trends;  · the strength of the dollar (the currency in which gold prices generally are quoted) and of other currencies;  · financial market expectations regarding the rate of inflation;  · interest rates;  · gold hedging and de-hedging by gold producers; and · actual or expected gold sales by central banks and the International Monetary Fund.


11
 Current economic conditions may adversely affect the profitability of the Group’s operations.
  future economic environment is likely to be less favorable than that of prior years. Since September 2008, the global financial system has experienced difficult credit and liquidity conditions and disruptions resulting in major financial institutions consolidating or going out of business, tightened credit markets, reduced liquidity, and extreme volatility in fixed income, credit, currency and equity markets. These conditions may adversely affect the Group’s business. For example, tightening credit conditions may make it moredifficult for the Group to obtain financing on commercially acceptable terms or make it more likely that one or more of our keysuppliers may become insolvent and lead to a supply chain breakdown. In addition, general economic indicators have deteriorated,including declining consumer sentiment, increased unemployment, declining economic growth and uncertainty regarding corporate earnings. To the extent the current economic downturn worsens or the economic environment in which the Group operates does not recover, the Group could experience a material adverse effect on its business, results of operations and financial condition.
 The exploration of mineral properties is highly speculative in nature, involves substantial expenditures, and is frequently
 unproductive.
   depend, in part, on our ability to identify and acquire additional mineral rights, and on the costs and results of our continuedexploration and development programs. Gold mining companies may undertake exploration activities to discover gold mineralization, which in turn may give rise to new gold bearing ore bodies. Exploration is highly speculative in nature and requires substantial expenditure for drilling, sampling and analysis of ore bodies in order to quantify the extent of the gold reserve. Many gold exploration programs, including some of ours, do not result in the discovery of mineralization and any mineralizationdiscovered may not be of sufficient quantity or quality to be mined profitably. If we discover a viable deposit, it usually takes several years from the initial phases of exploration until production is possible.
   professional geologists, geophysicists, and engineers for estimates in determining whether to commence or continue mining. These estimates generally rely on scientific and economic assumptions, which in some instances may not be correct, and could result in the expenditure of substantial amounts of money on a deposit before it can be determined with any degree of accuracy whether or not the deposit contains economically recoverable mineralization. Uncertainties as to the metallurgical recovery of anygold discovered may not warrant mining on the basis of available technology. As a result of these uncertainties, we may not successfully acquire additional mineral rights, or identify new Proven and Probable Ore Reserves in sufficient quantities to justify commercial operations in any of our mines. Our mineral exploration rights may also not contain commercially exploitable reserves of gold. The costs incurred on unsuccessful exploration activities are, as a result, not likely to be recovered and we could incur a write-down on our investment in that interest or the irrecoverable loss of funds spent.
 There is uncertainty with our Ore Reserve estimates.
   stated and are reported in accordance with the requirements of Industry Guide 7 of the SEC. These estimates may be imprecise and may not reflect actual reserves or future production.
   examinations, reserve estimates may have to be adjusted and mining plans may have to be altered in a way that might ultimately cause our reserve estimates to decline. Moreover, if the price of gold declines, or stabilizes at a price that is lower than recent levels, or if our production costs, and in particular our labor, water, steel and electricity costs, increase or recovery rates decrease, it may become uneconomical to recover Ore Reserves containing relatively lower grades of mineralization. Under these circumstances, wewould be required to re-evaluate our Ore Reserves. Short-term operating factors relating to the Ore Reserves, such as the need for sequential development of ore bodies and the processing of new or different grades, may increase our production costs and decrease our profitability during any given period. These factors have and could result in reductions in our Ore Reserve estimates, whichcould in turn adversely impact upon the total value of our mining asset base and our business, operating results and financial condition.


12
 Gold mining is susceptible to numerous events that could have an adverse impact on a gold mining business.
  personal injury to, employees, the loss of mining equipment, damage to or destruction of mineral properties or production facilities, monetary losses, delays in production, environmental damage, loss of the license to mine and potential legal claims. The risks and events associated with the business of gold mining include:
 · environmental hazards and pollution, including dust generation, toxic chemicals, discharge of metals, pollutants, radioactive  materials and other hazardous material into the air and water; · flooding, landslides, sinkhole formation, ground subsidence, ground and surface water pollution, and waterway  contamination; · a decrease in labor productivity due to labor disruptions, work stoppages, disease, slowdowns or labor strikes; · unexpected decline of ore grade; · metallurgical conditions and gold recovery; · failure of unproven or evolving technologies; · mechanical failure or breakdowns and ageing infrastructure; · energy and electrical power supply interruptions; · injuries to employees or fatalities resulting from falls from heights and accidents relating to mobile machinery or  electrocution; · activities of illegal or artisanal miners; · material and equipment availability; · legal and regulatory restrictions and changes to such restrictions; · social or community disputes or interventions; · accidents caused from the collapse of tailings dams; · pipeline failures and spillages; · safety-related stoppages; and · corruption, fraud and theft including gold bullion theft.
   Risks related to doing business in South Africa
 
 Political or economic instability in South Africa may reduce our production and profitability.
   economic risks relating to South Africa could have a significant effect on our production and profitability. Large parts of the South African population are unemployed and do not have access to adequate education, health care, housing and other services, including water and electricity. Government policies aimed at alleviating and redressing the disadvantages suffered by the majority of citizens under previous governments may increase our costs and reduce our profitability. In recent years, South Africa has experienced high levels of crime. These problems have impeded fixed inward investment into South Africa and have prompted emigration of skilled workers. As a result, we may have difficulties attracting and retaining qualified employees.
 Inflation can adversely affect us.
   high by comparison with developed countries, and foreign currency reserves have been low relative to other emerging market countries.  The inflation rate in South Africa is relatively high compared to developed, industrialized countries. As of June 2013, the Consumer Price Inflation Index, or CPI, stood at 5.5%, flat compared to 5.5% in June 2012, and up from 5.3% in June 2011. The relatively high inflation rate continued at 6.5% as at September 30, 2013. Continuing high levels of inflation in South Africa for prolonged periods, without a concurrent devaluation of the rand or increase in the price of gold, could result in an increase in our costs which could reduce our profitability.
 
 Power stoppages or increases in the cost of power could negatively affect our results and financial condition.
  As a result of a substantial increasing demand and insufficient generating capacity, South Africa has faced significant disruptions in electricity supply in the past and Eskom has warned that the country could continue to face significant disruptions in electrical power


13
 supply in the foreseeable future. The available generating capacity of electricity was constrained mainly as a result of unplanned maintenance at some of Eskom’s power stations, insufficient supply of coal to the coal fired plants and skills shortages. On January 25, 2008, Eskom announced that they could no longer guarantee the supply of electricity to the South African mining industry. Eskom subsequently cut off power supply to the mining industry for five days in fiscal 2008 and a number of power outages followed over several months thereafter. Eskom did manage to contain electricity stoppages but the country’s current reserve capacity isinsufficient and the risk of electricity stoppages is expected to continue through 2014. Apart from the five-day closure in 2008, our production has not been affected, however further power supply stoppages or power cost increases could have an adverse effect onour operating results and financial condition. Eskom have indicated that they do not have sufficient funding required for planned infrastructure development, and have imposed the following average tariff increases: from April 1, 2011 an average tariff increase of 25.8%, from April 1, 2012 an average tariff increase of 16.7% and from April 1, 2013 an average tariff increase of 8.0%. These increases have had an adverse affect on our production costs and could have a material adverse effect on our business, operatingresults and financial condition.
 AIDS poses risks to us in terms of productivity and costs.
   and is exacerbated in the presence of HIV/AIDS, represents a very serious health care challenge in the mining industry. Human Immunodeficiency Virus, or HIV, is the virus that causes AIDS and South Africa has one of the highest HIV infection rates in theworld. It is estimated that approximately 30% - 35% of the mining industry workforce in South Africa are HIV positive. The exactextent to which our mining workforce within South Africa is infected with HIV/AIDS is unknown at this stage. The existence of the disease poses a risk to us in terms of the potential reduction in productivity and increase in health and safety costs due to the Company’s social responsibility programs.
 The treatment of occupational health diseases and the potential liabilities related to occupational health diseases may
 have an adverse effect on the results of our operations and our financial condition.
  tuberculosis (TB). We provide occupational health services to our employees and continue to improve preventive occupational hygiene initiatives. The costs associated with providing such occupational health services could increase significantly.
  lung diseases to sue their current or former employers for damages outside the statutory compensation scheme, we could be subject to claims against us from previous or current employees, including a potential class action or similar group claim. In January 2013, DRDGOLD, ERPM and 23 other mining companies were served with a court application for a class action issued in the South Gauteng High Court by alleged former mineworkers and dependents of deceased mineworkers. In the pending application, the applicants allege that DRDGOLD, ERPM and other mining companies conducted underground mining operations in such a negligent manner that resulted in the former mineworkers contracting silicosis. We will assess all such claims, if and when filed, on their merits. Liability associated with such claims and expenses of dealing with them could have a material adverse effect on our business, operating results and financial condition.
 Increased theft at our work sites, particularly of copper, may result in greater risks to employees or interruptions in
 production.
   commodity has resulted in the increased theft of copper cable. Our operations experience high incidents of copper cable theft despite the implementation of security measures. In addition to the general risk to employees’ lives in an area where theft occurs, we may suffer production losses and incur additional costs as a result of power interruptions caused by cable theft and theft of bolts used for the pipeline.
 Possible scarcity of water may negatively affect our operations.
  were 4% lower than estimated in 1995 which may lead to the revision of water usage strategies by several sectors in the South African economy, including electricity generation and municipalities. This may result in rationing or increased water costs in the future. Such changes would adversely impact our surface retreatment operations, which use water to transport the slimes or sand from reclaimed areas to the processing plant and to the tailings facilities. In addition, as our gold plants and piping infrastructure were designed to carry certain minimum throughputs, any reductions in the volumes of available water may require us to adjust production at these operations. We are currently considering a project which envisages the pumping of underground water at ERPM and effluent water for use by our surface retreatment operations which is intended to reduce water consumption, but this may not be successful.


14
 Government Regulation
 
 Government policies in South Africa may adversely impact our operations and profits.
   government’s administrative bodies. These involve directives in respect of health and safety, the mining and exploration of minerals, and managing the impact of mining operations on the environment. A variety of permits and authorities are required to mine lawfully, and the government enforces its regulations through the various government departments. The formulation or implementation of government policies may be unpredictable on certain issues, including changes in laws relating to mineral rights, ownership of mining assets and the rights to prospect and mine, additional taxes on the mining industry and in extreme cases, nationalization. A change in regulatory or government policies could adversely affect our business.  New order rights obtained under the Mineral and Petroleum Resources Development Act, 2002 may not be equivalent toour old mining rights.On May 1, 2004, the new Minerals and Petroleum Resources Development Act, or the MPRD Act, came into effect, which
places all mineral and petroleum resources under the custodianship of the state. Private title and ownership in minerals, or the “old 
order rights,” are to be converted to “new order rights,” essentially the right to mine.

  

  Where new order rights are obtained under the MPRD Act, these rights will not be equivalent to our existing property rights.
The new order rights will only be transferable subject to the approval of the Minister of Mineral Resources. Mining or
prospecting must commence within one year or 120 days, respectively, of the mining right or prospecting right becoming effective, 
and must be conducted continuously and actively thereafter. The new rights can be suspended or cancelled by the Minister of Mineral 
Resources in the event of a breach or, in the case of mining rights, non-optimal mining in accordance with the mining work program. 
The MPRD Act states that the conversions must be granted by the minister if all requirements are completed but it does not stipulate 
any time frame. The MPRD Act also provides for holders of old order rights to continue to operate under the terms and conditions of 
such rights until conversions under the MPRD Act have been completed. See Item 4B. “Business Overview”.  The implementation of the MPRD Act has resulted in significant adjustments to our property ownership structure. We have
lodged applications to convert all of our old order rights, however, to the extent that we are unable to convert some of our old order 
rights to new order rights, and that the exclusive rights to minerals we enjoyed under the previous statutory regime are diminished, 
this will result in significant adjustments to our property ownership structure, which in turn could have a material adverse effect on 
the underlying value of our operations. To the extent that we are unable to convert some of our old order rights, we may have a claim 
for compensation based on expropriation. It is not possible to forecast with any degree of certainty whether a claim will be 
enforceable against the DMR, and if enforceable, the level of compensation we will receive, if any. As at September 30, 2013, a
substantial portion of our old order mining rights have been converted into new order rights under the terms of the MPRD Act but
await registration at the Mineral and Petroleum Titles Registration Office of the
DMR.  Mining royalties and other taxation reform could have an adverse affect on the business, operating results and financialcondition of our operations.  The Mineral and Petroleum Resources Royalty Act, No.28 of 2008 was enacted on November 21, 2008 and was published
in the South African Government Gazette on November 24, 2008. The Mineral and Petroleum Resources Royalty Act 
(Administration), No.29 of 2008, published on November 26, 2008, became effective from March 1, 2010. These acts provide for the
payment of a royalty, calculated through a royalty rate formula (using rates of between 0.5% and 5.0%) applied against gross revenue 
per year, payable half yearly with a third and final payment thereafter. The royalty is tax deductible and the cost after tax amounts to a 
rate of between 0.33% and 3.3% at the prevailing marginal tax rates applicable to the taxed entity. The royalty is payable on old 
unconverted mining rights and new converted mining rights. Based on a legal opinion the Company obtained, mine dumps created 
before the enactment of the MPRD Act fall outside the ambit of this royalty and consequently the Company does not pay any royalty
on any dumps created prior to the MPRD Act. Introduction of further revenue based royalties or any adverse future tax reforms 
would have an adverse effect on the business, operating results and financial condition of our operations.  Ring-fencing of unredeemed capital expenditure for South African mining tax purposes could have an adverse affect onthe business, operating results and financial condition of our operations.  The Income Tax Act No 58 of 1962, or the ITA, contains certain ring-fencing provisions in section 36 specifically relating
different mines regarding the deduction of certain capital expenditure and the carry over thereof to subsequent years. After the


restructuring of the surface operations, effective July 1, 2012, Ergo is treated as one taxpaying operation pursuant to the relevant ring-
  fencing legislation. In the event that we are unsuccessful in confirming our position or should the South African Receiver of Revenue 
  have a different interpretation of section 36 of the ITA, it could have an adverse effect on the business, operating results and financial 
  condition of our operations.  The implementation of carbon or other climate change related to taxes might have a direct or indirect negative costimpact on our operations.  Climate change is a global problem that requires both a concentrated international response and national efforts to reduce
greenhouse gas, or GHG, emissions. The United Nations Framework Convention on Climate Change is the main global response to 
climate change. The associated Kyoto Protocol is an international agreement that classifies countries by their level of industrialization 
and commits certain countries to GHG emission reduction targets. Although South Africa is not one of these countries identified, it 
ranked among the top 20 countries measured by absolute carbon dioxide emissions. During the 2009 Copenhagen climate change 
negotiations, South Africa voluntarily announced that it would act to reduce domestic GHG emissions by 34% by 2020 and 42% by 
2025, subject to the availability of adequate financial, technological and other support. The two main economic policy instruments
available for setting a price on carbon and curbing GHG emissions are carbon taxation and emissions trading schemes. In a 
discussion paper on carbon taxation by the National Treasury of the South African Government released in June 2013 different 
methods of carbon taxation were discussed.  The implementation of these carbon taxes have been postponed until the 2014 national
budget proposal. Should these taxes be implemented, they might have a direct or indirect negative cost impact on our operations
which could have an adverse effect on the business, operating results and financial condition.  Failure to comply with the requirements of the Broad Based Socio-Economic Empowerment Charter could have anadverse affect on our business, operating results and financial condition of our operations.  The Broad Based Socio-Economic Empowerment Charter for the South African Mining Industry, or Mining Charter
(effective from May 1, 2004), established certain numerical goals and timeframes to transform equity participation in the mining
industry in South Africa. The goals set by the Mining Charter include that each mining company must achieve 15% ownership by 
historically disadvantaged South Africans, or HDSA, of its South African mining assets within five years and 26% ownership within 
ten years, in each case, from May 1, 2004. This is to be achieved by, among other methods, the sale of assets to historically 
disadvantaged persons on a willing seller/willing buyer basis at market value.  In September 2010, the DMR released amendments to the Mining Charter. The intention behind the amendments to the
Mining Charter was to clarify certain ambiguities and uncertainties which existed under the Mining Charter and to provide more 
specific targets. However, there are a number of matters that still require clarification and discussions in respect of interpretations of 
the requirements are in progress with the DMR. The goals set by the amendments to the Mining Charter include: minimum 26% 
HDSA ownership by March 2015; procurement of a minimum 40% of capital goods, 50% of consumer goods and 70% of services 
from Black Economic Empowerment, or BEE, entities by March 2015; minimum 40% HDSA representation at each of executive 
management level, senior management level, middle management level, junior management level and core and critical skills levels;
minimum 3% investment of annual payroll in skills training; investment in community development; and attain an occupancy rate of
one person per room in on-site accommodation. When considering applications for the conversion of existing rights, the relevant regulator will take a “scorecard”
approach, evaluating the commitments of each company to the different facets of promoting the objectives of the Mining Charter.
Failure on our part to comply with the requirements of the Mining Charter and the “scorecard” could subject us to negative 
consequences. There is also no guarantee that any steps we might take to comply with the Mining Charter would ensure that we 
could successfully acquire new order mining rights in place of our existing rights. In addition, the terms of such new order rights 
may not be as favorable to us as the terms applicable to our existing rights. In addition, we may incur expenses in giving 
additional effect to the Mining Charter and the “scorecard”, including costs which we may incur including the risk of losing our
mining rights if we do not comply with the requirements stipulated in facilitating the financing of initiatives towards ownership by 
historically disadvantaged persons. Any of the foregoing could have an adverse affect on our business, operating results and 
financial condition.  Land claims relating to our properties could have a material adverse affect on our rights to such companies and prevent 
us from exploiting our Ore Reserves located there.  Our privately held land and mineral rights in South Africa could be subject to land restitution claims under the Restitution of
Land Rights Act, 1994 (as amended), or Land Rights Act. Under the Land Rights Act, any person who was dispossessed of rights to
land in South Africa as a result of past racially discriminatory laws or practices is granted certain remedies, including the restoration 
of the land. The initial deadline for such claims was December 31, 1998. We have not been notified of any land claims, but it is
possible that administrative delays in the processing of claims could have delayed such notification. Any claims of which we are
notified in the future could have a material adverse effect on our right to the properties to which the claims relate and prevent us from 
using that land and exploiting any Ore Reserves located there, which could have an adverse affect on our business, operating results and
financial condition.
                                                                                                                                                                                                                      
15
 background imageThe implementation of carbon or other climate change related to taxes might have a direct or indirect negative cost
impact on our
  operations.

restructuring of the surface operations, effective July 1, 2012, Ergo is treated as one taxpaying operation pursuant to the relevant
  ring-
  fencing legislation. In the event that we are unsuccessful in confirming our position or should the South African Receiver of Revenue 
 have a different interpretation of section 36 of the ITA, it could have an adverse effect on the business, operating results and financial 
 condition of our operations.



Climate change is a global problem that requires both a concentrated international response and national efforts to reduce
greenhouse gas, or GHG, emissions. The United Nations Framework Convention on Climate Change is the main global response to climate change. The associated Kyoto Protocol is an international agreement that classifies countries by their level of industrialization and commits certain countries to GHG emission reduction targets. Although South Africa is not one of these countries identified, it ranked among the top 20 countries measured by absolute carbon dioxide emissions. During the 2009 Copenhagen climate change negotiations, South Africa voluntarily announced that it would act to reduce domestic GHG emissions by 34% by 2020 and 42% by 2025, subject to the availability of adequate financial, technological and other support. The two main economic policy instrumentsavailable for setting a price on carbon and curbing GHG emissions are carbon taxation and emissions trading schemes. In a discussion paper on carbon taxation by the National Treasury of the South African Government released in June 2013 different methods of carbon taxation were discussed.  The implementation of these carbon taxes have been postponed until the 2014 nationalbudget proposal. Should these taxes be implemented, they might have a direct or indirect negative cost impact on our operationswhich could have an adverse effect on the business, operating results and financial condition.
Failure to comply with the requirements of the Broad Based Socio-Economic Empowerment Charter could have an
adverse affect on our business, operating results and financial condition of our operations.

The Broad Based Socio-Economic Empowerment Charter for the South African Mining Industry, or Mining Charter
(effective from May 1, 2004), established certain numerical goals and timeframes to transform equity participation in the miningindustry in South Africa. The goals set by the Mining Charter include that each mining company must achieve 15% ownership by historically disadvantaged South Africans, or HDSA, of its South African mining assets within five years and 26% ownership within ten years, in each case, from May 1, 2004. This is to be achieved by, among other methods, the sale of assets to historically disadvantaged persons on a willing seller/willing buyer basis at market value.

In September 2010, the DMR released amendments to the Mining Charter. The intention behind the amendments to the
Mining Charter was to clarify certain ambiguities and uncertainties which existed under the Mining Charter and to provide more specific targets. However, there are a number of matters that still require clarification and discussions in respect of interpretations of the requirements are in progress with the DMR. The goals set by the amendments to the Mining Charter include: minimum 26% HDSA ownership by March 2015; procurement of a minimum 40% of capital goods, 50% of consumer goods and 70% of services from Black Economic Empowerment, or BEE, entities by March 2015; minimum 40% HDSA representation at each of executive management level, senior management level, middle management level, junior management level and core and critical skills levels;minimum 3% investment of annual payroll in skills training; investment in community development; and attain an occupancy rate ofone person per room in on-site accommodation.

When considering applications for the conversion of existing rights, the relevant regulator will take a “scorecard”
approach, evaluating the commitments of each company to the different facets of promoting the objectives of the Mining Charter.Failure on our part to comply with the requirements of the Mining Charter and the “scorecard” could subject us to negative consequences. There is also no guarantee that any steps we might take to comply with the Mining Charter would ensure that we could successfully acquire new order mining rights in place of our existing rights. In addition, the terms of such new order rights may not be as favorable to us as the terms applicable to our existing rights. In addition, we may incur expenses in giving additional effect to the Mining Charter and the “scorecard”, including costs which we may incur including the risk of losing ourmining rights if we do not comply with the requirements stipulated in facilitating the financing of initiatives towards ownership by historically disadvantaged persons. Any of the foregoing could have an adverse affect on our business, operating results and financial condition.
Land claims relating to our properties could have a material adverse affect on our rights to such companies and prevent us from exploiting our Ore Reserves located there.

Our privately held land and mineral rights in South Africa could be subject to land restitution claims under the Restitution of
Land Rights Act, 1994 (as amended), or Land Rights Act. Under the Land Rights Act, any person who was dispossessed of rights toland in South Africa as a result of past racially discriminatory laws or practices is granted certain remedies, including the restoration of the land. The initial deadline for such claims was December 31, 1998. We have not been notified of any land claims, but it ispossible that administrative delays in the processing of claims could have delayed such notification. Any claims of which we arenotified in the future could have a material adverse effect on our right to the properties to which the claims relate and prevent us from using that land and exploiting any Ore Reserves located there, which could have an adverse affect on our business, operating results and financial condition. 
                                                                                                                                                                                                                      
  15 background image16

Since our South African labor force has substantial trade union participation, we face the risk of disruption from labor
disputes and new South African labor laws.

Labor costs constituted 17% of our production costs for fiscal 2013, 32% for fiscal 2012 and 35% for fiscal 2011. As of
June 30, 2013, we employed and contracted 2,752 people, of whom approximately 61% are members of trade unions or employee associations. We have entered into various agreements regulating wages and working conditions at our mines. Unreasonable wage demands could increase production costs to levels where our operations are no longer profitable. This could lead to accelerated mine closures and labor disruptions. In addition, we are subject to strikes by workers from time to time, which result in disruptions to our mining operations.

In recent years, labor laws in South Africa have changed in ways that significantly affect our operations. In particular, laws
that provide for mandatory compensation in the event of termination of employment for operational reasons and that impose largemonetary penalties for non-compliance with the administrative and reporting requirements of affirmative action policies could result in significant costs to us. In addition, future South African legislation and regulations relating to labor may further increase our costs or alter our relationship with our employees. Labor cost increases could have an adverse effect on our business, operating results and financial condition.
Labor unrest and xenophobia could affect production.

We may experience labor unrest at our operations. During October and November 2002, ERPM experienced some labor
unrest during which several striking contract workers were wounded and two workers were killed by employees of a private securitycompany. Furthermore, during fiscal 2008, South Africa fell victim to a slew of xenophobic attacks when a series of riots started in the township of Alexandra situated in Johannesburg. This violence of locals attacking migrants from other African countries had a direct impact on our operations at ERPM. Three employees died and attendance was down at the operation for several days.

During August and September 2012, there have been a number of illegal (according to current labor legislation) strikes at
several mining companies in South Africa and events related to these strikes resulted in 45 people being killed. These strikes called for above inflation wage increases and better working conditions.
Such events at our operations or elsewhere could have an adverse effect on our business, operating results and financial
condition.

Our financial flexibility could be materially constrained by South African currency restrictions.
South African law provides for exchange control regulations, which restrict the export of capital from the Common
Monetary Area, including South Africa. The Exchange Control Department of the South African Reserve Bank, or SARB, is responsible for the administration of exchange control regulations. In particular, South African companies:
· are generally not permitted to export capital from South Africa or to hold foreign currency without the approval of SARB; · are generally required to repatriate, to South Africa, profits of foreign operations; and · are limited in their ability to utilize profits of one foreign business to finance operations of a different foreign business.

While the South African Government has relaxed exchange controls in recent years, it is difficult to predict whether or
how it will further relax or abolish exchange control measures in the future. For further information see Item 10D.: “Exchange Controls.”
Risks related to ownership of our ordinary shares or ADSs
Sales of large volumes of our ordinary shares or ADSs or the perception that these sales may occur, could adversely
affect the prevailing market price of such securities.
The market price of our ordinary shares or ADSs could fall if substantial amounts of ordinary shares or ADSs are sold by
our stockholders, or there is the perception in the marketplace that such sales could occur. Current holders of our ordinary sharesor ADSs may decide to sell them at any time. Sales of our ordinary shares or ADSs, if substantial, or the perception that thesesales may occur to be substantial, could exert downward pressure on the prevailing market prices for our ordinary shares or ADSs,causing their market prices to decline. Trading activity of hedge funds and the ability to borrow script in the market place willincrease trading volumes and may place our share price under pressure. background image17
Dividend tax, which is a withholding tax, will reduce the amount of dividends received by beneficial owners.
On April 1, 2012, the South African Government replaced Secondary Tax on Companies (then 10%) with a 15%
withholding tax on dividends and other distributions payable to shareholders. Although this may reduce the tax payable by the Company or our subsidiaries, the withholding tax will reduce the amount of dividends or other distributions received by our shareholders.
Your rights as a shareholder are governed by South African law, which differs in material respects from the rights of
shareholders under the laws of other jurisdictions.
Our Company is a public limited liability company incorporated under the laws of the Republic of South Africa. The
rights of holders of our ordinary shares, and therefore many of the rights of our ADS holders, are governed by our memorandum of incorporation and by South African law. These rights differ in material respects from the rights of shareholders in companiesincorporated elsewhere, such as in the United States. In particular, South African law significantly limits the circumstances under which shareholders of South African companies may institute litigation on behalf of a company.
It may not be possible for you to effect service of legal process, enforce judgments of courts outside of South Africa or
bring actions based on securities laws of jurisdictions other than South Africa against us or against members of our board.
Our Company, certain members of our board of directors and executive officers are residents of South Africa. In
addition, our cash producing assets are located outside the United States and a major portion of the assets of members of our board of directors and executive officers are either wholly or substantially located outside the United States. As a result, it may not be possible for you to effect service of legal process, within the United States or elsewhere including in South Africa, upon most of our directors or officers, including matters arising under United States federal securities laws or applicable United States state securities laws.

Moreover, it may not be possible for you to enforce against us or the members of our board of directors and executive
officers judgments obtained in courts outside South Africa, including the United States, based on the civil liability provisions of the securities laws of those countries, including those of the United States. A foreign judgment is not directly enforceable in South Africa, but constitutes a cause of action which will be enforced by South African courts provided that:
· the court which pronounced the judgment had jurisdiction to entertain the case according to the principles recognized bySouth African law with reference to the jurisdiction of foreign courts;  · the judgment is final and conclusive (that is, it cannot be altered by the court which pronounced it);  · the judgment has not lapsed;  · the recognition and enforcement of the judgment by South African courts would not be contrary to public policy, includingobservance of the rules of natural justice which require that no award is enforceable unless the defendant was duly servedwith documents initiating proceedings, that he was given a fair opportunity to be heard and that he enjoyed the right to belegally represented in a free and fair trial before an impartial tribunal;  · the judgment was not obtained by fraudulent means;  · the judgment does not involve the enforcement of a penal or revenue law; and · the enforcement of the judgment is not otherwise precluded by the provisions of the Protection of Business Act, 1978 (asamended), of South Africa.

It is the policy of South African courts to award compensation for the loss or damage actually sustained by the person to
whom the compensation is awarded. Although the award of punitive damages is generally unknown to the South African legal systemthat does not mean that such awards are necessarily contrary to public policy. Whether a judgment was contrary to public policydepends on the facts of each case. Exorbitant, unconscionable, or excessive awards will generally be contrary to public policy. South African courts cannot enter into the merits of a foreign judgment and cannot act as a court of appeal or review over the foreign court. South African courts will usually implement their own procedural laws and, where an action based on an international contract isbrought before a South African court, the capacity of the parties to the contract will usually be determined in accordance with South African law. It is doubtful whether an original action based on United States federal securities laws may be brought before SouthAfrican courts. A plaintiff who is not resident in South Africa may be required to provide security for costs in the event of proceedings being initiated in South Africa. Furthermore, the Rules of the High Court of South Africa require that documents executed outside South Africa must be authenticated for the purpose of use in South African courts. It is not possible therefore for an investor to seek to impose criminal liability on us in a South African court arising from a violation of United States federal securities laws. background image18
ITEM 4. INFORMATION ON THE COMPANY
4A. HISTORY AND DEVELOPMENT OF THE COMPANY
Introduction

DRDGOLD Limited, or DRDGOLD, is a South African gold mining company engaged in surface gold tailings retreatment
including exploration, extraction, processing and smelting. Our main subsidiary is Ergo Mining Operations Proprietary Limited, orEMO, in which we hold a 74% interest. Our black economic empowerment partners are Khumo Gold SPV Proprietary Limited, or Khumo Gold and an employee trust (known as the DRDSA Empowerment Trust), which hold 20% and 6% respectively in EMO.  On June 1, 2012, we sold our entire interest and claims against Blyvoor to Business Venture Investment No 1557 Proprietary Limited, a wholly owned subsidiary of Village Main Reef Limited, or Village.

On July 1, 2012, all the group’s surface operations, including Crown Gold Recoveries Proprietary Limited, or Crown, all
the surface assets and liabilities of East Rand Proprietary Mines Limited, or ERPM, and ErgoGold (formerly called Elsburg Gold Mining joint venture), were restructured into Ergo Mining Proprietary Limited, or Ergo Mining. As at June 30, 2013, EMO wholly owned and operated Crown, Ergo Mining, and ERPM. Ergo Mining, Crown, ErgoGold and ERPM’s Cason operation are collectively referred to as Ergo.

DRDGOLD is also a 49% partner in Chizim Gold (Pvt) Limited, or Chizim Gold, an early-stage gold exploration project on
Zimbabwe’s Greenstone Belt.

We are a public limited liability company, incorporated on February 16, 1895, as Durban Roodepoort Deep Limited, and our
shares were listed on the JSE in that same year. In 1898, our milling operations commenced with 30 stamp mills and in that year we treated 38,728 tons of ore and produced 22,958 ounces of gold. On December 3, 2004, the company changed its name from Durban Roodepoort Deep Limited to DRDGOLD Limited. Our operations have focused on South Africa's West Witwatersrand Basin, which has been a gold producing region for over 100 years.

Our shares and/or related instruments trade on the JSE, New York Stock Exchange, the Marche Libre on the Paris Bourse,
the Brussels Bourse in the form of International Depository Receipts, the Over The Counter, or OTC, market in Berlin and Stuttgartand the Regulated Unofficial Market on the Frankfurt Stock Exchange.

Our registered office and business address is 1
st
Floor, Building 1, Quadrum Office Park, 50 Constantia Boulevard,
Constantia Kloof Ext. 28, Roodepoort, South Africa. The postal address is P.O. Box 390, Maraisburg 1700, South Africa. Our telephone number is (+27 11) 470-2600 and our facsimile number is (+27 11) 470-2618. We are registered under the South African Companies Act, 1973 (as amended) under registration number 1895/000926/06. The South African Companies Act, 1973 has been superseded by the South African Companies Act 71, 2008 which had been promulgated as from May 1, 2011. For our ADSs, the Bank of New York, at 101 Barclay Street, New York, NY 10286, United States, has been appointed as agent.
South African operations
Ergo

Ergo Mining was formed in June 2007, primarily to recover and treat – over a period of 12 years – approximately 186
million tonnes (Mt) of surface tailings contained in the Elsburg Tailings Complex for gold. As a second-phase development, in conjunction with a new pipeline linking Ergo with Crown, the Ergo plant’s second carbon-in-leach (CIL) circuit was refurbished to increase capacity from 1.2 million tonnes per month (Mtpm) to 1.8Mtpm. Ergo Mining is licensed to produce uranium and sulphuricacid, and a feasibility study to assess the potential of these by-products from the Ergo resource will be completed in fiscal 2014. On July 1, 2012, Ergo Mining acquired the mining assets and certain liabilities of Crown and all the surface assets and liabilities of ERPM as part of the restructuring of our surface operations. Also as part of this restructuring, Ergo Mining acquired DRDGOLD's35% interest in ErgoGold for R200 million.

Crown was acquired on September 14, 1998, in exchange for 5,925,139 of our ordinary shares. Crown, which is located
within the Witwatersrand Basin, exploits various surface sources, including sand and slime tailings deposited as part of previousmining operations. On July 1, 2012, Crown sold its mining assets, mining and prospecting rights and certain liabilities to Ergo Mining in exchange for shares in Ergo Mining as part of the restructuring of our surface operations.

ERPM, which consists of the original underground mine which is under care and maintenance, the Cason Dump surface
retreatment operation and ERPM Extension 1 and 2 exploration tenements, was acquired on October 10, 2002. Underground mining at ERPM was halted in October 2008. On July 1, 2012, ERPM sold its surface mining assets, and its 65% interest in ErgoGold to Ergo Mining in exchange for shares in Ergo Mining as part of the restructuring of our surface operations. background image19
Blyvoor (discontinued operation)

We acquired Blyvoor in September, 1997, in exchange for 12,693,279 of our ordinary shares. Blyvoor is a predominantly
underground operating mine located within the Witwatersrand Basin, exploiting gently to moderately dipping gold bearing quartz pebble conglomerates in addition to certain surface sources. In June 2012 we sold our entire interest in Blyvoor to Village. See Item 5A.: “Operating Results - Recent developments” for a more detailed discussion.
Zimbabwe exploration
Chizim Gold

Chizim Gold was established in December 2009 as a 50:50 joint venture with Chizim Investments (Pvt) Limited, or Chizim
Investments, to conduct feasibility studies on certain gold exploration tenements in Zimbabwe’s Greenstone Belt extending over an area of more than 21,000 hectares. On June 7, 2013 DRDGOLD reduced its holding to 49%. As underground mining is not in line with DRDGOLD’s strategy, we intend to dispose of our exploration assets in Zimbabwe.
Important Events in Our Development Generally and in the Current Year
Restructuring of the surface operations
In order to improve synergies, effect cost savings and a simpler group structure, DRDGOLD announced, on July 3, 2012,
the restructuring of the group’s surface operations into Ergo Mining (effective July 1, 2012). Ergo Mining is a wholly-owned subsidiary of EMO.
On July 1, 2012, Ergo Mining acquired the mining assets and certain liabilities of Crown and all the surface assets and
liabilities of ERPM as part of the restructuring of our surface operations. Also as part of this restructuring, Ergo Mining acquired DRDGOLD's 35% interest in ErgoGold for R200 million. All conditions for DRDGOLD’s disposal of its 35% direct ErgoGold interest to Ergo Mining have been met. The ERPM and Crown disposals are subject to the consent of the Minister of Mineral Resources in terms of section 11 of the MPRD Act.
Exploration in Zimbabwe
Exploration activities through our joint venture Chizim Gold indicated underground mining potential at the various sites.
As underground mining is not in line with DRDGOLD’s strategy, we intend to dispose of our exploration assets in Zimbabwe.
DRDGOLD and TCTA agree terms on acid mine drainage
In December 2012, EMO, Ergo Mining and ERPM (collectively referred to as the Ergo Group) entered into heads of
agreement with Trans-Caledon Tunnel Authority (TCTA), aimed at laying a foundation for a self-sustainable solution to acid minedrainage (AMD) in the Central Witwatersrand Basin.
Pursuant to this heads of agreement, TCTA, acting through directives issued by the Minister of Water and Environmental
Affairs and the Department of Water Affairs, is to construct pumping and treatment facilities to intercept rising acid mine drainage, or AMD, and to prevent it from reaching the so-called ‘environmental critical level’.
In terms of the heads of agreement, the Ergo Group grants TCTA:
· access to land for the construction of a water treatment plant; · access to the South West Vertical Shaft of ERPM to construct and operate a pump station to pump AMD to surface; · the right to construct a sludge pipeline, using servitudes owned by Ergo Group members; · shared use of an Ergo Group residue pipeline; and · partial use of the Ergo Group tailings dams for the deposition of up to 4.167m3 of sludge per day, emanating from thewater treatment plant.
Also in terms of the heads of agreement, EMO has an option, at its election, to acquire from TCTA, for its operations, up to
30 mega litres of untreated or partially treated AMD per day, which can be used in our surface operation.
For further information on other capital investments, divestures, capital expenditure and capital commitments, see Item
4D.: “Property, Plant and Equipment,” and Item 5B.: “Liquidity and Capital Resources.” background image20
4B. BUSINESS OVERVIEW
Description of Our Mining Business
Surface tailings retreatment

Surface tailings retreatment involves the extraction of gold from old mine dumps, comprising the waste material from earlier
underground gold mining activities. This is done by reprocessing sand dumps and slimes dams along the reefs that stretch from east to west just to the south of Johannesburg’s central business district (CBD). Sand dumps are the result of the less efficient stamp-milling process employed in earlier times. They consist of coarse-grained particles which generally contain higher quantities of gold. Sand dumps are reclaimed mechanically using front end loaders that load sand onto conveyor belts. The sand is fed onto a screenwhere water is added to wash the sand into a sump, from where it is pumped to the plant. Most sand dumps have already been retreated using more efficient milling methods. Lower grade slimes dams are also the result of the old treatment methods but do not require milling. This material has become economically more viable to process owing to improved treatment methods and a higher gold price. The material from the slimes dams is broken down using monitor guns that spray jets of high pressure water at the target area. The resulting slurry is then pumped to a treatment plant for processing.
Underground mining

Our underground mining operations, which have now either been sold or closed down, comprised relatively mature assets
and the principal mining method used was the extraction of Ore Reserves from previously mined-out areas, which required a high degree of opening up, development and retreatment of these Ore Reserves.
Exploration

Exploration activities are focused on the extension of existing ore bodies and identification of new ore bodies both at
existing sites and at undeveloped sites. Once a potential ore body has been discovered, exploration is extended and intensified in order to enable clearer definition of the ore body and the portions with the potential to be mined. Geological techniques are constantly refined to improve the economic viability of exploration and exploitation.
Our Metallurgical Plants and Processes

A detailed review of the metallurgical plants and processes for each of the mining operations is provided under Item 4D.:
“Property, Plant and Equipment.”
Market

The gold market is relatively liquid compared to other commodity markets, with the price of gold generally quoted in
dollars. Physical demand for gold is primarily for manufacturing purposes, and gold is traded on a world-wide basis. Refined gold has a variety of uses, including jewelry, electronics, dentistry, decorations, medals and official coins. In addition, central banks, financial institutions and private individuals buy, sell and hold gold bullion as an investment and as a store of value (due to the tendency of gold to retain its value in relative terms against basic goods and in times of inflation and monetary crises).
The use of gold as a store of value and the large quantities of gold held for this purpose in relation to annual mine production
have meant that historically the potential total supply of gold has been far greater than demand. Thus, while current supply anddemand play some part in determining the price of gold, this does not occur to the same extent as in the case of other commodities. Instead, the gold price has from time to time been significantly affected by macro-economic factors such as expectations of inflation, interest rates, exchange rates, changes in reserve policy by central banks, and global or regional political and economic crises. In times of inflation and currency devaluation, gold is often seen as a safe haven, leading to increased purchases of gold and support for its price.
The gold market was strong but remained volatile in fiscal 2013, trading between a low of $1,192 per ounce and a high of
$1,792 per ounce. The average spot price was 4% lower than in the previous fiscal year, at $1,606 per ounce. Amid continuing global economic uncertainty, investors turned once more to gold (notably to safe-haven products such as Exchange Traded Funds) and this,together with more de-hedging activity and a slowdown in new mine supply, particularly from South Africa, saw demand exceed supply. The average gold price received by us for fiscal 2013 was R458,084 per kilogram which was 9% higher than the previous year at R418,538 per kilogram. background image21
Looking ahead, we believe that the global economic environment, including economic uncertainty and other factors, will
continue to make gold attractive to investors. The supply side shortfall is likely to continue because of circumstances including operational challenges and delays in opening new mines and the challenge, particularly to South African producers such as ourselves, of maintaining profitable production in the face of rising costs, which may affect production levels, with all of our revenues generated by our operations in South Africa.
Our total revenue by geographic market was as follows:
Year ended June 30,
2013
2012
2011
R’000
R’000
R’000
South Africa
  ................................................................................................
2,076,496
3,004,264 2,565,319
2,076,496
3,004,264 2,565,319

All gold we produce is sold on our behalf by Rand Refinery Proprietary Limited, or Rand Refinery, in accordance with a
refining agreement entered into in October 2001. The gold bars which we produce consist of approximately 85% gold, 7-8% silver and the balance comprises copper and other common elements. The gold bars are sent to Rand Refinery for assaying and final refining where the gold is purified to 99.9% and cast into troy ounce bars of varying weights. Rand Refinery then usually sells the gold on the same day as delivery, for the London afternoon fixed Dollar price, with the proceeds remitted to us in rand within two days. In exchange for this service, we pay Rand Refinery a variable refining fee plus fixed marketing, loan and administration fees. We currently own 11% (fiscal 2012: 4%) of Rand Refinery.  Mr. T.J. Gwebu, our Executive Officer Compliance, is a director of Rand Refinery, a member of Rand Refinery's Remuneration Committee and chairman of  Rand Refinery's  Social and Ethics Committee and Mr. M. Burrell, our Financial Director Ergo Mining, is an alternate director of Rand Refinery and is also a member of Rand Refinery's Audit Committee.
Ore Reserves
The tables below set out the Proven and Probable Ore Reserves of the Group as of June 30, 2013, and 2012, in both
imperial and metric units. Our Ore Reserves are comprised of our attributable Ore Reserves.
Ore Reserve estimates in this Annual Report are reported in accordance with the requirements of the SEC’s Industry
Guide 7. Accordingly, as of the date of reporting, all reserves are planned to be mined out under the life of mine business plans within the period of our existing rights to mine, or within the time period of assured renewal periods of our rights to mine. Inaddition, as of the date of reporting, all reserves are covered by required permits and governmental approvals. See Item 4D.: “Property, Plant and Equipment” for a description of the rights in relation to each mine.
In South Africa, we are legally required to publicly report Ore Reserves and Mineral Resources in compliance with the
South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves, or SAMREC Code. The SEC’s Industry Guide 7 does not recognize Mineral Resources. Accordingly, we do not include estimates of Mineral Resources in this Annual Report.
Ore Reserve calculations are subject to a review conducted in accordance with SEC Industry Guide 7. Components of the
calculations included in the geological models and input parameters of the reserve estimation procedures, were checked. In addition, visual inspection of the planning to deliver an individual block to the metallurgical plant, and the recovery, and deposition of the tailings, took place. A check is also made of the financial input into the costs and revenue to affirm that they are within reasonable limits.

The Ore Reserves are inclusive of diluting materials and allow for losses that may occur when the material is mined. Ore
Reserve tons, grade and content are quoted as delivered to the gold plant. There are two types of methods available to select ore for mining. The first is pay-limit, which includes cash operating costs, including overhead costs, to calculate the pay-limit grade. The second is the cut-off grade which includes cash operating costs, excluding fixed overhead costs, to calculate the cut-off grade,resulting in a lower figure than the full pay-limit grade. The cut-off grade is based upon direct costs from the mining plan, taking into consideration production levels, production efficiencies and the expected costs. We use the pay-limit to determine which areas to mine, as an overhead inclusive amount that is indicative of the break-even position.

The pay-limit approach is based on the minimum in-situ grade of ore blocks, for which the production costs, which includes
all overhead costs, including head office charges, are equal to a three-year historical average gold price per ounce for that year. This calculation also considers the previous three years’ mining and milling efficiencies, which includes metallurgical and other miningfactors and the production plan for the next twelve months. Only blocks above the pay-limit grade are considered for mining. Thepay-limit grade is higher than the cut-off grade, because this includes overhead costs, which indicates the break-even position of the operation. background image22





When delineating the economic limits to the ore bodies, we adhere to the following guidelines:
· The potential ore to be mined is well defined by an externally verified and approved geological model created using our    mining software;  · The potential ore, which is legally allowed to be mined, is also confined by the mine's lease boundaries; and · A full life of mine business plan (physical 5 year plan) is prepared to mine the ore from existing infrastructure.

Our Ore Reserves figures are estimates, which may not reflect actual reserves or future production. We have prepared these
figures in accordance with industry practice, converting mineral deposits to an Ore Reserve through the preparation of a mining plan. The Ore Reserve estimates contained herein inherently include a degree of uncertainty and depend to some extent on statistical inferences which may ultimately prove to have been unreliable.

Reserve estimates require revisions based on actual production experience or new information. Should we encounter
mineralization or formations different from those predicted by past drilling, sampling and similar examinations, reserve estimates may have to be adjusted and mining plans may have to be altered in a way that might adversely affect our operations. Moreover, if the price of gold declines, or stabilizes at a price that is lower than recent levels, or if our production costs increase or recovery rates decrease, it may become uneconomical to recover Ore Reserves containing relatively lower grades of mineralization.

Our Ore Reserves are prepared using three year average gold prices at the time of reserve determination. In light of the
significant increase in gold prices, since fiscal 2006 the Company prepares its life of mine business plans using the prevailing gold price at the time of the reserve determination, which is at the end of the fiscal year.
Gold prices and exchange rates used for Ore Reserves and for our business plan are outlined in the following table.
2013
2012
Three-year average
Business Plan     
  Three-year average
Business Plan
Reserve gold price –$/oz
1,559
1,192
1,388
1,651
Reserve gold price –R/kg
390,973
378,158
331,792
408,381
Exchange rate –R/$
7.80
9.87
7.44
7.69
In fiscal 2013, our attributable Ore Reserves (imperial) decreased by 8% from 1.8 million ounces at June 30, 2012, to
1.7 million ounces at June 30, 2013, primarily as a consequence of mining activity.
Based on the life of mine business plans, the life of mine for our operations at June 30, 2013, are set out in the table
below.
Surface
Mine

2013
2012
Ergo
1
............................................................


9 years
10 years

1
Ergo has been restated to include Ergo Mining, ErgoGold, Crown and ERPM’s surface retreatment operation. background image23
Our Ore Reserves as of June 30, 2013 and 2012 are set forth in the tables below.
Ore Reserves: Imperial
At June 30, 2013
At June 30, 2012
Proven Ore Reserves
Probable Ore Reserves
Proven Ore Reserves
Probable Ore Reserves
Tons
Grade
Gold
Content
Tons
Grade
Gold
Content
Tons
Grade
Gold
Content
Tons
Grade
Gold
Content
(mill)
(oz/ton)
('000 ozs)
(mill)
(oz/ton)   
  ('000 ozs)
(mill)   
  (oz/ton)
('000 ozs)
(mill)
(oz/ton)    
  ('000 ozs)













Ergo
1












Surface
.......................................................... 123.296 0.01 1,181
37.69 0.01
  495
135.23
0.01 1,281
51.21
  0.01 544
Total
2
............................................................... 123.296           
  0.01
1,181
37.69
0.01
495
135.23        
  0.01
1,281
51.21
0.01
544
Ore Reserves: Metric
At June 30, 2013
At June 30, 2012
Proven Ore Reserves
Probable Ore Reserves
Proven Ore Reserves
Probable Ore Reserves
Tonnes       
  Grade
Gold
Content   
  Tonnes        Grade
Gold
Content    
  Tonnes        Grade
Gold
Content
Tonnes
Grade
Gold
Content
(mill)    
  (g/tonne)        (tonnes)    
  (mill)    (g/tonne)       (tonnes)     
  (mill)   (g/tonne)    (tonnes)
(mill)
(g/tonne)
(tonnes)












Ergo
1












Surface
.......................................................... 111.854
0.33
36.739 34.192
0.45
15.388 122.68
0.32
39.83 46.46
0.36 16.92
Total
2
............................................................... 111.854             
  0.33           36.739
34.192          
  0.45           15.388
122.68           
  0.32
39.83
46.46          
  0.36
16.92

1
Ergo’s Ore Reserves include the Elsburg and Benoni tailings complexes which are being processed by Ergo, however the mining rights for these tailings are owned by ERPM. Crown has been included under
Ergo for fiscal 2013 and 2012.
2
The Ore Reserves listed in the above table are estimates of what can be legally and economically recovered from operations, and, as stated, are estimates of tons delivered to the mill. background image24
The measurement and classification of our Proven and Probable Ore Reserves are sensitive to an extent to the fluctuation of
the gold price. If we had used different gold prices than the three-year average prices at the time of reserve determination, as of June 30, 2013 and 2012 respectively, we would not have had significantly different reserves as of those dates. Using the same methodology and assumptions as were used to estimate Ore Reserves but with different gold prices, our attributable Ore Reserves as of June 30, 2013 and 2012 would be as follows:
Year ended June 30, 2013
Three-year
average price
Business Plan
at prevailing
price
10% Below
prevailing
price
10% Above
prevailing
price
Rand gold price per kilogram

390,973
378,158
340,342
415,974
Dollar gold price per ounce
1,599
1,192
1,073
1,311
Attributable ore reserves (million ounces)
1.7
1.7
1.7
1.7
Year ended June 30, 2012
Three-year
average price
Business Plan
at prevailing
price
10% Below
prevailing
price
10% Above
prevailing
price
Rand gold price per kilogram
  .........................................
331,792
408,381
367,543
449,219
Dollar gold price per ounce
  ............................................
1,388 1,651 1,486 1,816
Attributable ore reserves (million ounces) ......................
1.8
1.8
1.8
2.1
The approximate mining recovery factors for the 2013 ore reserves shown in the above table are as follows:
Surface
Mine



Mine Call Factor
(%)
Metallurgical and
recovery factor
(%)
Ergo .............................
100.0
50.6
The approximate mining recovery factors for the 2012 ore reserves shown in the above table are as follows:

Surface
Mine
Mine Call Factor
(%)
Metallurgical and
recovery factor
(%)





Crown ..........................

100.0
59.1
Ergo .............................

100.0
38.4





The following table shows the average drill/sample spacing (rounded to the nearest foot), as at June 30, 2013 and 2012, for
each category of Ore Reserves at our mines calculated based on a three year average dollar price of gold.
Mine
Proven
Reserves
Probable
Reserves
Ergo ...........................................................................................................................
328 ft. by 328 ft.
328 ft. by 328 ft.
The pay-limit grades based on the three year average dollar price for gold and costs used to determine reserves as of
June 30, 2013, are as follows:
Surface
Mine
Pay-limit grade
(g/t)
Costs used to
determine pay-
limit grade (R/t)
Ergo ..............................................................................
0.30 58.37 background image25
The pay-limit grades and costs used to determine reserves as of June 30, 2012, are as follows:
Surface
Mine
Pay-limit grade
(g/t)
Costs used to
determine pay-
limit grade (R/t)




Crown ...........................................................................

0.27
64.91
Ergo ..............................................................................

0.19
29.42
We apply the pay-limit approach to the mineralized material database of our business in order to determine the tonnage and
grade available for mining.
Governmental regulations and their effects on our business
Common Law Mineral Rights and Statutory Mining Rights

Prior to the introduction of the Minerals and Petroleum Resources Development Act, or MPRD Act, in 2002, ownership in
mineral rights in South Africa could be acquired through the common law or by statute. With effect from May 1, 2004, all minerals have been placed under the custodianship of the South African government under the provisions of the MPRD Act, and old order proprietary rights were required to be converted to new order rights of use within certain prescribed periods, as dealt with in more detail below.
Old Order Rights - Mining Authorizations

Schedule II of the MPRD Act allows the Minister to grant, on application, appropriate rights over the same mineral on the
same land which is the subject of the old order right. By way of example, holders of unused old order rights had for a period of one year from the effective date of the MPRD Act the exclusive right to apply for an appropriate right in terms of item 8 of Schedule II. Once an old order right is lodged for conversion at the Department of Mineral Resources (DMR), it remains in force until it is converted.
Conversion of Rights under the Mineral and Petroleum Resources Development Act, 2002

Existing old order rights were required to be converted into new order rights in order to ensure exclusive access to the
mineral for which rights existed at the time of the enactment of the MPRD Act. In respect of used old order mining rights, the DMR is obliged to convert the rights if the applicant complies with certain statutory criteria. These include the submission of a mining works program, demonstrable technical and financial capability to give effect to the program, provision for environmental management and rehabilitation, and compliance with certain black economic empowerment criteria and the social and labor plan. These applications had to be submitted within five years after the promulgation of the MPRD Act on May 1, 2004. Similar procedures apply where we hold prospecting rights and a prospecting permit and conduct prospecting operations. Under the MPRD Act, mining rights are not perpetual, but endure for a fixed period, namely a maximum period of thirty years, after which they may be renewed for a further period of thirty years. Prospecting rights are limited to five years, with one further period of renewal of three years. Applications for conversion of our old order rights were submitted to the DMR within the requisite time periods. During this period, we are permitted to continue to operate under the terms and conditions of the old order rights which we hold. As at September 30, 2013, a substantial portion of our old order mining rights have been converted into new order rights under the terms of the MPRD Act but await registration at the Mineral and Petroleum Titles Registration Office of the  DMR.
Mining royalties
Effective March 1, 2010, royalties from mining activities became payable to the state under provisions contained in the
Mineral and Petroleum Resources Royalty Act, or the Royalty Act. The most significant feature of the Royalty Act is that the royalty is to be determined in accordance with a formula based system and no longer to be a predetermined specific rate for thedifferent types of minerals. The royalty is deductible for normal income tax purposes.
The Royalty Act defines the tax base as gross sales excluding the transportation and handling costs of the final product.
The final product can be either the “refined” or “unrefined” mineral depending on the nature of the mineral in question. There has been general consensus that a formula derived mineral royalty rate regime is more equitable and provides the necessary relief for mines during times of difficulties, e.g. low commodity prices and mines that become marginal due to low grades. The formula-based mineral royalty rate regime also ensures that the State shares in the benefits of higher commodity prices. The State thusshares in the downside risks, when mines become marginal, and in the upside benefits during times of high commodity prices. Based on comments received, the formulae were adjusted to take into account the capital intensive nature of certain mining operations, especially Gold mining and Oil and Gas. The formulae use earnings before income tax, or EBIT, with 100 percent capital expensing. background image26
Given that a distinction is drawn between refined and unrefined minerals, the mineral royalty percentage rates (Y%) is
based on the following formulae:
· For refined minerals: Y (%) = 0.5 + [(EBIT divided by (Gross Sales multiplied by 12.5)) multiplied by 100]. This rate iscapped at a maximum of 5.0% with a minimum of 0.5%.
· For unrefined minerals: Y (%) = 0.5 + [(EBIT divided by (Gross Sales multiplied by 9.0)) multiplied by 100]. This rate iscapped at a maximum of 7.0% with a minimum of 0.5%.
For the purpose of calculating the royalty percentage rates a negative EBIT will be set equal to zero.
The Broad Based Socio-Economic Empowerment Charter

In order to promote broad based participation in mining revenue, the MPRD Act provides for a Mining Charter to be
developed by the Minister within six months of commencement of the MPRD Act, beginning May 1, 2004. The Mining Charter was initially published in August 2004 and was subsequently amended in September 2010. Its objectives include:
· increased direct and indirect ownership of mining entities by qualifying parties as defined in the Mining Charter; · expansion of opportunities for persons disadvantaged by unfair discrimination under the previous political dispensation;  · expansion of the skills base of such persons, the promotion of employment and advancement of the social and economicwelfare of mining communities; and  · promotion of beneficiation.
The Mining Charter sets certain goals on equity participation (amount of equity participation and time frames) by
historically disadvantaged South Africans of South African mining assets. It recommends that these are achieved by, among othermethods, disposal of assets by mining companies to historically disadvantaged persons on a willing seller, willing buyer basis at fair market value. The goals set by the Mining Charter require each mining company to achieve 15 percent ownership by historically disadvantaged South Africans of its South African mining assets within five years and 26 percent ownership by May 1, 2014. It alsosets out guidelines and goals in respect of employment equity at management level with a view to achieving 40 percent participation by historically disadvantaged persons in management and ten percent participation by women in the mining industry, each within fiveyears from May 1, 2004. Compliance with these objectives is measured on the weighted average “scorecard” approach in accordancewith a scorecard which was first published in or around August 2010.

The Mining Charter and the related scorecard are not legally binding and, instead, simply state a public policy. However,
the DMR places significant emphasis on the compliance therewith. The Mining Charter and scorecard, have a decisive effect on administrative action taken under the MPRD Act.

In recognition of the Mining Charter’s objectives of transforming the mining industry by increasing the number of black
people in the industry to reflect the country’s population demographics, to empower and enable them to meaningfully participatein and sustain the growth of the economy, thereby advancing equal opportunity and equitable income distribution, we have achieved our commitment to ownership compliance with the MPRD Act through our existing black economic empowerment structure with Khumo Gold and the DRDSA Empowerment Trust. Our black economic empowerment partners, Khumo Gold and the DRDSA Empowerment Trust, hold 20% and 6%, respectively, in our operating subsidiary, EMO. (See Item 4A.: “History and Development of the Company”). background image27
Mine Health and Safety Regulation

The South African Mine Health and Safety Act, 1996 (as amended), or the Mine Health and Safety Act, came into effect in
January 1997. The principal object of the Mine Health and Safety Act is to improve health and safety at South African mines and to this end, imposes various duties on us at our mines, and grants the authorities broad powers to, among other things, close unsafe mines and order corrective action relating to health and safety matters. In the event of any future accidents at any of our mines,regulatory authorities could take steps which could increase our costs and/or reduce our production capacity. The 2009 amendments to the Act dealt with inter alia the stoppage of production and increase punitive measures including increased financial fines and legal liability of mine management. Some of the more important new provisions in the 2009 amendment bill are the insertion of a new section 50(7A) that obliges an inspector to impose a prohibition on the further functioning of a sitewhere a person’s death, serious injury or illness to a person, or a health threatening occurrence has occurred; a new section 86A(1) creating a new offence for any person who contravenes or fails to comply with the provisions of the Mine Health and Safety Act thereby causing a person’s death or serious injury or illness to a person. Subsection (3) further provides that (a) the “fact that the person issued instructions prohibiting the performance or an omission is not in itself sufficient proof that all reasonable steps were taken to prevent the performance or omission”; and that (b) “the defense of ignorance or mistake by any person accused cannot bepermitted”; or that (c) “the defense that the death of a person, injury, illness or endangerment was caused by the performance or an omission of any individual within the employ of the employer may not be admitted”; a new section 86A(2) creating an offence of vicarious liability for the employer where a Chief Executive Officer, manager, agent or employee of the employer committed an offence and the employer either connived at or permitted the performance or an omission by the Chief Executive Officer, manager, agent or employee concerned; or did not take all reasonable steps to prevent the performance or an omission. The maximum fines have also been increased. Any owner convicted in terms of section 86 or 86A may be sentenced to “withdrawal or suspension of the permit” or to a fine of R3 million or a period of imprisonment not exceeding five years or to both such fine and imprisonment, while the maximum fine for other offences and for administrative fines have all been increased, with the highest being R1 million. The President assented to the amendment bill in April 2009. The amendment Act was proclaimed and came into law in May 2009.

Under the South African Compensation for Occupational Injuries and Diseases Act, 1993 (as amended), or COID Act,
employers are required to contribute to a fund specifically created for the purpose of compensating employees or their dependants for disability or death arising in the course of their work. Employees who are incapacitated in the course of their work have no claim for compensation directly from the employer and must claim compensation from the COID Act fund. Employees are entitled to compensation without having to prove that the injury or disease was caused by negligence on the part of the employer, although if negligence is involved, increased compensation may be payable by this fund. The COID Act relieves employers of the prospect of costly damages, but does not relieve employers from liability for negligent acts caused to third parties outside the scope of employment. In fiscal 2013, we contributed approximately R2.2 million under the COID Act to a multi-employer industry fund administered by Rand Mutual Assurance Limited.

Under the Occupational Diseases in Mines and Works Act, 1973 (as amended), or the Occupational Diseases Act, the multi-
employer fund pays compensation to employees of mines performing “risk work,” usually in circumstances where the employee is exposed to dust, gases, vapors, chemical substances or other working conditions which are potentially harmful, or if the employeecontracts a “compensatable disease,” which includes pneumoconiosis, tuberculosis, or a permanent obstruction of the airways. Noemployee is entitled to benefits under the Occupational Diseases Act for any disease for which compensation has been received or is still to be received under the COID Act. Currently the Group is compliant with these payment requirements, which are based on acombination of the employee costs and claims made during the fiscal year.

Uranium and radon are often encountered during the ordinary course of gold mining operations in South Africa, and present
potential risks for radiation exposure of workers at those operations and the public to radiation in the nearby vicinity. We monitor our uranium and radon emissions and believe that we are currently in compliance with all local laws and regulations pertaining to uranium and radon management and that we are within the current legislative exposure limits prescribed for workers and the public, under the Nuclear Energy Act, 1999 (as amended) and Regulations from the National Nuclear Regulator.
Environmental Regulation
Managing the impact of mining on the environment is extensively regulated by statute in South Africa. Recent statutory
enactments set compliance standards both generally, in the case of the National Environmental Management Act, and in respect ofspecific areas of environment impact, as in the case of the Air Quality Act 2004, the National Water Act (managing effluent), and the Nuclear Regulator Act 1999. Liability for environmental damage is also extended beyond the corporate veil to impose personal liability on managers and directors of mining corporations that are found to have violated applicable laws.
The impact on the environment by mining operations is extensively regulated by the MPRD Act. The MPRD Act has
onerous provisions for personal liability of directors of companies whose mining operations have an unacceptable impact on the environment. background image28
Mining companies are also required to demonstrate both the technical and financial ability to sustain an ongoing
environmental management program, or EMP, and achieve ultimate rehabilitation, the particulars of which are to be incorporated in an EMP. This program is required to be submitted and approved by the DMR as a prerequisite for the issue of a new order mining right. Various funding mechanisms are in place, including trust funds, guarantees and concurrent rehabilitation budgets, to fund the rehabilitation liability.
The MPRD Act imposes specific, ongoing environmental monitoring and financial reporting obligations on the holders of
mining rights.

Our environmental risks have been addressed in EMPs which have been submitted to the DMR for approval. Additionally,
key environmental issues have been prioritized and are being addressed through active management input and support as well as progress measured in terms of activity schedules and timescales determined for each activity.

Our existing reporting and controls framework is consistent with the additional reporting and assessment requirements of the
MPRD Act.
Financial Provision for Rehabilitation

We are required to make financial provision for the cost of mine closure and post-closure rehabilitation, including
monitoring once the mining operations cease. We have funded these environmental rehabilitation costs by making contributions overthe life of the mine to environmental trust funds established for each operation and funds held in insurance instruments. Funds are irrevocably contributed to trusts that function under the authority of trustees that have been appointed by, and who owe a statutory duty of trust, to the Master of the High Court of South Africa. The funds held in these trusts are invested primarily in interest bearing debt securities. As of June 30, 2013, we held a total of R86.4 million (2012: R106.3 million) in trust, the balance held in each fund being Rnil (2012: R24.3 million) for Durban Deep, R78.6 million (2012: R59.6 million) for Ergo, R7.7 million (2012: R22.4 million) for ERPM. Trustee meetings are held as required, and quarterly reports on the financial status of the funds, are submitted to our board of directors.

The financial provisions for West Wits and Durban Deep have been consolidated into a single rehabilitation trust. The West
Wits financial provision has been derecognized as at June 30, 2011, 2012 and 2013 and the Durban Deep financial provision as atJune 30, 2013, because it will be transferred along with the rehabilitation liability over the West Wits mining rights which have been disposed of.

We address shortfalls in the funds by accruing trust investment income for the benefit of the funds by replenishing it with
the proceeds from the sale of redundant mining equipment at the end of the life of the mine and gold from mine cleanup. If any of the operations are prematurely closed, the rehabilitation funds may be insufficient to meet all the rehabilitation obligations of those operations.

Whereas the old Minerals Act allowed for the establishment of a fully funded rehabilitation fund over the life of mine, the
MPRD Act assumes a fully compliant fund at any given time in the production life of a mine. The DMR appears to have taken a practical approach in dealing with this change, and has indicated that the traditional ring fencing of funds may, for investmentpurposes be relaxed, and that insurance instruments may also be received subject to the DMR’s consent, to make up the shortfall in available cash funds. The Company has subsequently made use of approved insurance products for a portion of its rehabilitation liabilities. As of June 30, 2013, we held a total of R90.7 million (2012: R59.3 million) in funds held in insurance instruments.

The aggregate group rehabilitation, reclamation and closure cost provision was R524.3 million at June 30, 2013, compared
to R504.3 million at June 30, 2012. This has been included in the provision for environmental rehabilitation in our financial statements as at June 30, 2013. background image29
4C. ORGANIZATIONAL STRUCTURE

The following chart shows our principal subsidiaries as of September 30, 2013. All of our subsidiaries are incorporated in
South Africa. We hold the majority of the investments directly or indirectly as indicated below. Refer to Exhibit 8.1 for a list of our significant subsidiaries. In addition, DRDGOLD holds a 49% joint venture interest in Chizim Gold which is incorporated in Zimbabwe.
4D. PROPERTY, PLANT AND EQUIPMENT
DRDGOLD OPERATIONS SEPTEMBER 30, 2013 background image30
Description of Significant Subsidiaries, Properties and Mining Operations
Witwatersrand Basin Geology

Ergo, consists of the ErgoGold, Crown and ERPM’s Cason operations, located on surface close to the Witwatersrand Basin.
Crown exploits various surface sources, including sand and slime tailings deposited as part of historical mining operations. ERPM, halted its underground mining operation in October 2008. Ergo is a surface retreatment operation which is currently processing slimetailings from the Elsburg tailings facility, which were historically deposited by ERPM’s underground mining operation.

The Witwatersrand Basin comprises a 4 mile (6 kilometers) vertical thickness of sedimentary rocks situated within the
Kaapvaal Craton, extending laterally for approximately 186 miles (299 kilometers) East-Northeast and 62 miles (100 kilometers) South-Southeast. The sedimentary rocks generally dip at shallow angles towards the center of the basin, though locally this may vary. The Witwatersrand Basin is Achaean in age and the sedimentary rocks are considered to be approximately 2.7 to 2.8 billion years old.

Gold mineralization in the Witwatersrand Basin occurs within horizons termed reefs. These occur within seven separate
goldfields located along the eastern, northern and western margins of the basin. These goldfields are known as the Evander Goldfield, the East Rand Goldfield, the West Rand Goldfield, the Far West Rand Goldfield, the Central Rand Goldfield, the Klerksdorp Goldfield and the Free State Goldfield. As a result of faulting and other primary controls of mineralization, the goldfields are not continuous and are characterized by the presence or dominance of different reef units. The reefs are generally less than 6 feet (2 meters) thick but, in certain instances, these deposits form stacked clastic wedges which are hundreds of feet thick.

The gold generally occurs in native form within the various reefs, often associated with pyrite and carbon.

Blyvoor, which was sold on June 1, 2012, was predominantly an underground operating mine located within the
Witwatersrand Basin, exploiting gold bearing reefs in addition to certain surface sources.
Ergo
Overview

We own 74% of EMO, which in turn owns 100% of Ergo. Ergo is a surface tailings retreatment operation consisting of
the Ergo Mining, Crown, ERPM’s Cason operation and ErgoGold business units which are collectively referred to as Ergo. ERPM’s Cason Dump surface tailings retreatment operation is expected to continue to operate until 2014 under the management of Ergo based on the current rate of retreatment of approximately 186,000 tpm. Ergo undertakes the retreatment of surface sourcesdeposited as tailing from non-operating mining sites across central and east Johannesburg. In order to improve synergies, effect cost savings and a simpler group structure, DRDGOLD restructured the group’s surface operations (Crown, ErgoGold and surface assets of ERPM) into Ergo Mining with effect from July 1, 2012.
At June 30, 2013, Ergo had 2,659 employees, including specialized service providers such as Frase Alexander Tailings.
Properties

Ergo's operations are located approximately 43 miles (70 kilometers) east of the Johannesburg’s central business district in
the province of Gauteng. Access to the Brakpan plant is via the Ergo Road on the N17 Johannesburg-Springs motorway.

Crown is situated on the outskirts of Johannesburg, South Africa and consists of three separate locations. It has mining
rights to 5,787 acres (2,342 hectares) and has the right to occupy 1,490 acres (603 hectares) of freehold property. Crown is in the process of converting these old order rights to new order rights under the MPRD Act. At Crown, the Lycaste dump prospecting rightand  the Top Star dump, City Deep, Crown Mines, Consolidated Main Reef and Knights mining rights have been approved. An application has been submitted to the DMR for the Crown mining rights to be consolidated.

The Crown Central operation is located on the West Wits line within the Central Goldfield of the Witwatersrand Basin,
approximately 6 miles (10 kilometers) west of the Johannesburg central business district in the province of Gauteng. Access is via Xavier Road on the M1 Johannesburg-Kimberley-Bloemfontein highway.

The City Deep operation is located on the West Wits line within the Central Goldfields of the Witwatersrand Basin,
approximately 3 miles (5 kilometers) south-east of the Johannesburg central business district in the province of Gauteng. Access is via the Heidelberg Road on the M2 Johannesburg-Germiston motorway.

The Knights operation is located at Stanley and Knights Road Germiston off the R29 Main Reef Road. background image31
History of Ergo
2005
Anglo American Corporation commissioned the Ergo plant in Brakpan in 1977. The operation became part of AngloGold Ashanti in 1998 and was closed by that company in 2005.
2007
Ergo was founded by EMO (owned by DRDGOLD at the time) and Mintails SA as a joint venture. On August 6, 2007, the joint venture parties entered into an agreement with AngloGold Ashanti, pursuant to which it acquired the remaining assets of the Ergo plant for consideration of R42.8 million. Additional agreements were concluded with AngloGold Ashanti on November 14, 2007 for the acquisition by Ergo of additional tailings properties and the Withok deposition complex for consideration of R45.0 million.
2008
Ergo Phase 1 was launched comprising the refurbishment and recomissioning of the Ergo plant’s first CIL circuit and the retreatment of the Elsburg and Benoni tailings complexes. DRDGOLD acquires Mintails SA’s stake in ErgoGold for R277.0 million.
2009
Ergo Phase 1 commissioning continues; first feeder line to the Ergo Plant from Elsburg tailings complex comes into operation. Ergo Phase 2 exploration drilling for gold, uranium and acid completed.
2010
DRDGOLD acquired control of Ergo Mining through the acquisition of Mintails SA’s 50% in Ergo for R82.1 million. Ergo Phase 1 production ramp-up nears completion with the installation of the second Elsburg tailings complex feeder line to the Ergo plant. Construction of the Crown/Ergo pipeline commenced.
2011
Construction of the Crown/Ergo pipeline continued and the second CIL circuit of the Ergo plant was refurbished as part of the Crown/Ergo pipeline project.
2012
The construction of the Crown/Ergo pipeline and second CIL circuit of the Ergo plant was completed. Construction of the Ergo flotation/fine-grind plant commenced and is expected to be fully commissioned by December 2013.
2013
In order to improve synergies, effect cost savings and a simpler group structure DRDGOLD restructured the group’s surface operations into Ergo Mining on July 1, 2012, which consisted of Crown, the surface operations of ERPM and ErgoGold.
History of Crown (consolidated into Ergo on July 1, 2012)
1979
Rand Mines Limited directors approved the formation of the company Rand Mines Milling and Mining Limited (RM3) to treat the surface gold tailings created from the underground section of the original Crown Mines, which had been in operation since the start of gold mining on the Witwatersrand in the late 1800's.
1982
First plant commissioned at Crown Mines to process surface material.
1986
Second plant commissioned at City Deep to process surface material.
1997
Randgold Exploration Limited and Continental Goldfields of Australia entered into a joint venture with the intention to establish a company that would acquire dump retreatment operations on the Witwatersrand. This resulted in the formation of Crown Consolidated Gold Recoveries Limited, or CCGR, which was incorporated as a public company in South Africa in May 1997. Crown was a wholly owned subsidiary of CCGR and consists of the surface retreatment operations of Crown Central, City Deep and Knights.
1998
We purchased 100% of CCGR.
2002
Khumo Bathong Holdings Proprietary Limited (KBH) purchased 60% of Crown. We were appointed as joint manager of the operation with KBH.
2005
On July 6, 2005 we signed a Memorandum of Understanding with KBH regarding the acquisition by Khumo Gold of a 15% stake in our then South African operations. On October 27, 2005, our board of directors approved the transaction with Khumo Gold. The new structure resulted in Khumo Gold acquiring a 15% interest in a newly created vehicle, EMO, which included 100% of ERPM, Crown and Blyvoor. As a result we owned an 85% interest in EMO.
2006
On December 11, 2006, Khumo Gold, on behalf of itself and an employee trust, exercised the option granted by us pursuant to the option agreement concluded between us and Khumo Gold in October 2005 to acquire a further 11% in EMO.On August 28, 2006, Crown concluded an agreement with AngloGold Ashanti to purchase the Top Star Dump.
2008
The Department of Mineral Resources issued in favour of Crown a mining right for gold recovery over the Top Star Dump.
2009
The reclamation of the Top Star Dump commenced in December 2008. Crown also commenced with the reduction of volumes to 400,000 tpm to implement the planned Crown Tailings Deposition Facility closure plan.
2010
The surface circuit of ERPM was incorporated into Crown for reporting purposes.  Board approval was obtained to construct a pipeline to the Ergo tailings deposition site to enable Crown to restore its deposition capacity to 600,000tpm. Restored deposition capacity provides the operation with the opportunity to bring to account potential new ore reserves.
2011
Construction of the pipeline to the Ergo tailings deposition site continued and was scheduled for completion in December 2011.
2012
Construction of the pipeline to the Ergo tailings deposition site was completed.
2013
On July 1, 2012, Crown sold its mining assets, mining and prospecting rights and certain liabilities to Ergo Mining in exchange for shares in Ergo Mining. background image32
Mining and Processing
Ergo undertakes the retreatment of surface sources deposited as tailings from non-operational mining sites from east to
west, just to the south of Johannesburg’s central business district.
Material processed by Ergo is sourced from numerous secondary surface sources namely, sand and slime. The surface
sources have generally undergone a complex depositional history resulting in grade variations associated with improvements in plant recovery over the period of time the material was deposited. Archive material is a secondary source of gold bearing material. This material is generally made up of old gold metallurgical plant sites as well as “river bed” material.

Our four metallurgical plants, known as Ergo, Crown Mines, City Deep and Knights, have an installed capacity to treat
approximately 24.0 million tons of material per year. All of the plants have undergone various modifications during recent yearsresulting in significant changes to the processing circuits.

In addition to the four metallurgical plants, Ergo’s assets include: access to some 750Mt to 900Mt of tailings deposited
across the western, central and eastern Witwatersrand; the Crown milling and pump station close to the Johannesburg central business district; a 50km pipeline; and tailings deposition facilities including the significant Brakpan tailings facility.

The feed stock is made up of sand and slime which are reclaimed separately. Sand is reclaimed using mechanical front-
end loaders, re-pulped with water and pumped to the plant. Slime is reclaimed using high pressure water monitoring guns. The re-pulped slime is pumped to the plant and the reclaimed material is treated using screens, cyclones, ball mills and Carbon-in-Leach, or CIL, technology to extract the gold.
Set forth below is a description of each of our plants:
Ergo Plant:  The expansion of the gold plant by refurbishing the second CIL circuit has increased the capacity to treat an estimated 21Mt per year. The Ergo flotation/fine-grind plant project, which will be fully commissioned by December 2013, will assist in liberating the gold particles currently encapsulated in the sulphides. The circuit will enable the Ergo plant toachieve improved gold recoveries of between 16% and 20%.
CityDeepPlant:  Commissioned in 1987, this surface/underground plant comprises a circuit including screening, primary,
secondary and tertiary cycloning in closed circuit milling, thickening, oxygen preconditioning, CIL, elution and zinc precipitation followed by calcining and smelting to doré. Retreatment continued at the City Deep Plant until the plant was decommissioned in August 2013 to operate as a milling and pump station and is pumping material to the Ergo Plant for retreatment.
CrownMinesPlant:  Commissioned in 1982, this surface/underground plant has already been modified and comprises a
circuit including screening, primary cycloning, open circuit milling, thickening, oxygen preconditioning, CIP and CIL, elution, zinc precipitation followed by calcining and smelting to doré. In June 2012, the gold extraction portion of the Crown plant was discontinued and all material is now only screened, milled and thickened. This material is then pumped to the Ergo plant for the final extraction of gold.
KnightsPlant:  Commissioned in 1988, this surface/underground plant comprises a circuit including screening, primary
cycloning, milling in closed circuit with hydrocyclones, thickening, oxygen preconditioning, CIL, elution, electro-winning and smelting to doré. The Knights plant, although historically part of the Crown operation, is located further east and considerably closer to the Brakpan Tailings Facility. Knights is therefore continuing to treat the nearby Cason dump and due to its location, is able to access the Brakpan tailings facility to deposit waste.
Electricity to the Ergo plant is supplied from various Eskom supply points for the reclamation units and the tailings
storage facilities. The plant is supplied from the national power grid via a secured source from the Ekurhuleni Council of 11,000 volts. Plant sub stations are stepped down to 6,600 volts before being further reduced to 525 volts for the motor control purposes. For the Ergo plant the average annual power consumption is about 149 GWHr and the maximum demand is about 32.0MVA.
Electricity is supplied to the Crown Mines and City Deep plants from separate substations referred to as Jupiter and No.
15 Shaft Crown Mines, and for Knights by the Ekhurhuleni Town Council. Electricity is supplied directly from the national powergrid to the substation and town council at 44,000 volts. Substations, located on mine sites, transform the power to 6,600 volts for direct supply to the plants. The power supply is further reduced to 525 volts for smaller devices and equipment. For Crown Minesand City Deep, the average annual power consumption is about 54 GWHr and 80GWHr, respectively and the maximum demand are about 15.0MVA and 13.0MVA, respectively. For Knights the average annual power consumption is about 60 GWHr and the maximum demand is about 14.2MVA.

As of June 30, 2013, the net book value of Ergo’s mining assets was R1,729.5 million.

During fiscal 2013, capital expenditure was mainly directed towards the Ergo flotation/fine-grind plant project. The Ergo
flotation/fine-grind plant is expected to improve gold recoveries by between 16% and 20%. background image33
The following capital expenditure was incurred at Ergo in fiscal 2013, 2012 and 2011:
Year ended June 30,
2013
2012
2011
R’000
R’000
R’000
Crown/Ergo Pipeline Project ................................................................................
-
33,869 119,731
CMR dump ............................................................................................................
-
57 2,069
Crown 3A2 Slime and steel work upgrade
  ..............................................................
1,586
- -
Knights residue pipeline
  ........................................................................................
13,870
- -
Knights girth gear and pinion
  ................................................................................
1,536
- -
4A11 dump
  ...........................................................................................................
-
- 10,232
Angelo Pan reclamation
  .......................................................................................
17,636
2,995
  -
Angelo Pan to Rosherville water pipeline
  .............................................................
12,805
- -
Vehicles and equipment ........................................................................................
-
112 489
Tailings management
  ...........................................................................................
19
14,196 15,567
New water line to Angelo Pan and Rocsherville
  ...................................................
889
35,068
  -
Crown/City Slurry line upgrade
  .............................................................................
-
13,916 -
Benoni Slurry line
  ................................................................................................
8,370
-
  -
Refurbishment of the Ergo plant and second leach
  section....................................
-
15,460 29,379
Ergo flotation/fine-grind plant
  .............................................................................
261,470
38,510
  -
Brakpan tailings facility
  .......................................................................................
11,702
50,733 27,705
IT Infrastructure
  .................................................................................................
1,091
-
  -
Tower crane
  ........................................................................................................
1,910
5,573 -
Ekurhuleni Business Development Academy (EBDA) training facility
  .................
- 189
-
Cason high grade plant
  ........................................................................................
20,459
  -
  -
Other
  ..................................................................................................................
2,500 7,194 161
355,843
217,872 205,333
Exploration and Development

Exploration and development activity at Ergo involves the drilling of existing surface dumps and evaluating the potential
gold bearing surface material owned by third parties that could be processed on a full treatment basis or purchased outright by Ergo. Exploration drilling has been done to define the uranium potential of the Elsburg complex. Independent competent person reportson uranium, sulphur and gold for the Elsburg Proven and Probable Ore Reserves have been compiled.
Environmental and Closure Aspects

Ergo operates at sites located in close proximity to significant municipal infrastructure, commercial and residential
development. The major environmental risks are associated with dust from various recovery sites, and effective management of relocated process material on certain tailings dams. The impact of windblown dust on the surrounding environment and community isaddressed through a scientific monitoring and evaluation process, with active input from Professor H. Annagran from the University of Johannesburg and appropriate community involvement. Environmental management programs, addressing a wide range of environmental issues, have been prepared by specialist environmental consultants and applied specifically to each dust sample recovery monitoring site and integrated into Ergo’s internal environmental assessment process. Although Ergo completed a projectfor thickening re-processed tailings, there also remains a risk of localized sloughing which can result in that section of the tailings dam required to be closed temporarily, with repair work being done to the dam wall. Water pollution is controlled by means of acomprehensive system of return water dams which allow for used water to be recycled for use in Ergo’s metallurgical plants. Overflows of return water dams may, depending on their location, pollute surrounding streams and wetlands. Ergo has an ongoing monitoring program to ensure that its water balances (in its reticulation system, on its tailings and its return water dams) aremaintained at levels that are sensitive to the capacity of return water dams.

Dust pollution is controlled through an active environmental management program for the residue disposal sites and
chemical and organic dust suppression on recovery sites. Short-term dust control is accomplished through ridge ploughing the topsurface of dormant tailings dams. Additionally, environmentally friendly dust suppressants, such as molasses, are applied. Dust fall-out is also monitored. In the long-term, dust suppression and water pollution is managed through a program of progressive vegetation of the tailings followed by the application of lime, to reduce the natural acidic conditions, and fertilizer to assist in the growth of vegetation planted on the tailings dam.

A program of environmental restoration that provides for the rehabilitation of areas affected by mining operations during the
life of the mine is in place. The surface reclamation process at Ergo has several environmental merits as it has removed a potentialpollution source and opens up land for development. background image34
While the ultimate amount of rehabilitation costs to be incurred in the future is uncertain, as at June 30, 2013 we estimated
that the total cost for Ergo, is approximately R501.1 million. As at June 30, 2013, a total of R78.6 million has been contributed to the Crown Rehabilitation Trust Fund, while a total of R44.6 million has been contributed by Ergo to funds held in insurance instruments. The Crown Rehabilitation Trust Fund is an irrevocable trust, managed by specific responsible people who we nominated and who areappointed as trustees by the Master of the High Court of South Africa.
Ore Reserves and Life of Mine

As at June 30, 2013, our 74% share of the Proven and Probable Ore Reserves of Ergo was 1.7 million ounces. In fiscal 2012,
our 74% share of Proven and Probable Ore Reserves of Ergo was 1.8 million ounces. A Mineral Resource competent person is appointed at each operation to review our Ore Reserve calculations for accuracy. For Ergo, Mr. Vivian Labuschagne and Mr. Gary John Viljoen are the appointed Mineral Resource competent persons. The current life of mine business plan is estimated to be nineyears.
Production

In fiscal 2013, production increased  to 146,381 ounces from 135,708 ounces in fiscal 2012 as a result of an 8% increase in
throughput to 23,254,000 tonnes from 21,603 000 tonnes. Grade was slightly up from 0.195g/t to 0.196g/t.

Cash operating costs in fiscal 2013 stayed flat at $1,094 per ounce compared to $1,094 per ounce in fiscal 2012, due mainly
to the higher gold production which off-set above inflation increases in the cost of electricity and labor.

The following table details our attributable share of the production results from Ergo for the past fiscal year:
2013
2012
2011
Production (imperial)  Ore mined ('000 tons)
  ................................................................................................
25,632
23,811 22,407
Recovered grade (oz/ton)
  ...........................................................................................
0.006
0.006 0.006
Gold produced (ounces)...............................................................................................
146,381
135,708 144,065
Results of Operations Revenue (R‘000)
  ........................................................................................................
2,076,496
1,764,191
  1,379,459
Operating costs (R‘000)
  .............................................................................................
1,397,177
1,141,973
  972,479
Cash operating cost (R‘000)
1
....................................................................................
1,414,904
1,151,400 980,746
Cash operating cost per ounce of gold ($)1
  .................................................................
1,094
1,094 974
All-in sustaining cost per ounce of gold ($)1
  ...............................................................
1,260
1,271 1,078
All-in cost per ounce of gold ($)1
  ...............................................................................
1,497
1,442 1,258

See Item 5A. “Operating Results – Capital expenditure (cash)” for a discussion on capital expenditure.
ERPM
Overview

We own 74% of ERPM, which is consolidated as a subsidiary, through our 74% holding in EMO. ERPM consists of an
underground section and the Cason Dump surface retreatment operation. Underground mining at ERPM was halted in October 2008 and is included in ‘Corporate head-office and all other’ in the financial statements for segmental reporting purposes for all three years preserved. The Cason Dump surface retreatment operation will continue to operate until June 2014 under the management of Ergo based on the current rate of production of approximately 186,000tpm and has been included under Ergo in the financial statements for segmental reporting purposes.

At June 30, 2013, ERPM had 71 employees, including specialized service providers.

1
Cash operating cost, cash operating cost per ounce, all-in sustaining cost per ounce and all-in cost per ounce of gold are financial measures of
performance that we use to determine cash generating capacities of the mines and to monitor performance of our mining operations. For a reconciliation of operating costs see Item 5A.: “Operating Results.” background image35
Property
ERPM is situated on the Central Rand Goldfield located within and near the northern margin of the Witwatersrand Basin
in the town of Boksburg, 20 miles (32 kilometers) east of Johannesburg. Access is via Jet Park Road on the N12 Boksburg-Benoni highway. Historically underground mining and recovery operations comprised relatively shallow remnant pillar mining in the central area and conventional longwall mining in the south-eastern area. Surface reclamation operations including the treatment of sand from the Cason Dump, is conducted through the Knights metallurgical plant, tailings deposition facilities andassociated facilities. Until underground mining was halted in October 2008, the mine exploited the conglomeratic South Reef, Main Reef Leader and Main Reef in the central area and the Composite Reef in the south-eastern area. ERPM operates under mining license ML5/1997 in respect of statutory mining and mineral rights.

At June 30, 2013, the net book value of ERPM’s mining assets was Rnil due to the transfer of ERPM’s related surface
mining assets to Ergo as part of the restructuring which took place on July 1, 2012.
History
1895
Formation of East Rand Proprietary Mines Limited.
1991
The FEV shaft was commissioned.
1999
East Rand Proprietary Mines Limited was liquidated in August 1999. The mine was run by a small number of employees during liquidation. Underground flooding continued during liquidation.
2000
KBH took over control of the mine in January 2000. Operating as Enderbrooke Investments Proprietary Limited, or Enderbrooke, and employing an outside contractor, the mine re-commenced mining operations in February 2000.
2002
Crown purchased 100% of ERPM, from Enderbrooke.
2003
An underground fire occurred at FEV Shaft, in February 2003. There was also the loss of Hercules Shaft in June 2003 and the loss of a secondary outlet at the FEV shaft in November 2003.
2004
In July 2004 it was determined that the underground section would undergo a controlled closure program ending March 2005. The closure program was prevented by a reduction in costs and improved productivity at the mine.
2005
Central Shaft placed on care and maintenance. On July 6, 2005, we signed a Memorandum of Understanding with KBH regarding the acquisition by Khumo Gold of a 15% stake in our South African operations. On October 27, 2005, our board of directors approved the transaction with Khumo Gold. The new structure resulted in Khumo Gold acquiring a 15% interest in a newly created vehicle, EMO, which includes 100% of ERPM, Crown and Blyvoor. We owned an 85% interest in EMO.
2006
On December 11, 2006, Khumo Gold, on behalf of itself and an employee trust, exercised the option granted by us pursuant to the option agreement concluded between us and Khumo Gold in October 2005 to acquire a further 11% in EMO.A prospecting right covering an area of 1,252 hectares (3,093 acres) of the neighboring Sallies lease area, referred to as ERPM Extension 1 was granted by the DMR.
2007
A prospecting right, incorporating the southern section of the old Van Dyk mining lease area and a small portion of Sallies, was granted by the DMR. Known as ERPM Extension 2, the additional area is 5,500ha (13,590 acres).
2008
On April 25, 2008, ERPM gave notice of intention to restructure the work force due to operational requirements and 239 employees were retrenched during June 2008.  On October 23, 2008, ERPM announced the suspension of drilling and blasting operations underground, following the cessation of pumping of underground water at the South West Vertical shaft on October 6, 2008 for safety reasons following the deaths of two employees. On November 19, 2008, we announced our intention to place on care and maintenance the underground operations of ERPM, and to proceed with a consultation process in terms of Section 189A of the Labor Relations Act to determine the future of the mine’s 1,700 employees.
2009
In January 2009, consultations in terms of Section 189A of the Labor Relations Act regarding the future of employees affected by the placing on care and maintenance of the underground operations were concluded and 1,335 employees were retrenched. In August 2009 the care and maintenance of the underground operations was discontinued.
2010
ERPM’s surface operation, the Cason Dump, was incorporated into Crown for reporting purposes.
2013
On July 1, 2012, ERPM sold all of its surface mining assets (excluding its 50% interest in Ergo) and its 65% interest in ErgoGold to Ergo Mining in exchange for shares in Ergo Mining.
Mining and Processing

Underground mining operations at ERPM comprised of two vertical shafts known as FEV Shaft and the Central Shaft.
There were also three additional shafts namely the South East Vertical Shaft, or SEV Shaft, used for the transport of employees and materials and the hoisting of rock, the South West Vertical, or SWV, Shaft and the Hercules Shaft that were used for water pumping only. The Cason Dump was used for the retreatment of surface material mined from the defunct Cason shaft.
On October 23, 2008, drilling and blasting operations were suspended after the cessation of pumping of underground water
at SWV Shaft on October 6, 2008 for safety reasons following the deaths of two employees at the shaft on September 19, 2008. background image36
On November 19, 2008, we announced our intention to place on care and maintenance the underground operations of
ERPM, and to proceed with a consultation process in terms of Section 189A of the Labor Relations Act to determine the future ofthe mine’s 1,700 employees. In January 2009, the consultations were concluded and 1,335 employees were retrenched. On August 20, 2009, care and maintenance of the underground operations was stopped.
Electricity to ERPM is provided to the Cason Dump, SEV and FEV Shafts from the Bremmer substation, located in close
proximity to the mine in Boksburg. Transmission is at the rate of 88,000 volts. The Simmer Pan substation, located approximately10 miles (16 kilometers) away from the mine site in Germiston, supplies the SWV and Hercules Shafts. Transmission is at the rateof 44,000 volts. The two substations, located on mine site, transform the power to 6,600 volts for direct supply to the shaft winder and air compressors. The power supply is further reduced to 525 volts for smaller devices and equipment used on the mine. The average annual power consumption has reduced to about 105 GWHr and the maximum demand to about 24 MW. The on-mine substations are older in nature and undergo annual infrared testing to identify hot connections which are potential fire hazards and are subject to regular maintenance which includes the inspection of the settings, blades and changing the transformer oil in thecircuit breakers.
Exploration and Development

ERPM has a prospecting right covering an area of 1,252ha (3,094 acres) of the adjacent Sallies mine, referred to as ERPM
Extension 1. The regional geology of the area indicates that there will be a strike change due to faulting associated with an East-West trending sinistral tear fault. In order to confirm the anticipated change in the geological structure and hence payshoot orientation, it is envisaged that prospecting will take place through development situated 50m in the footwall. Owing to high induced stress experienced at depth, there will be concurrent over-stoping (that is stoping taking place concurrently with development) on the reef plane for safety reasons. Prior to this prospecting right in respect of ERPM Ext. 1 lapsing, an application for a mining right in respect of the same prospecting footprint was made in terms of the provisions of the MPRDA. The said mining right was approved and granted and the registration thereof took place in March 2012. The mining right expires in January 2042.
An additional application to extend ERPM’s existing prospecting right eastwards into the Rooikraal/Withok area,
incorporating the southern section of the old Van Dyk mining lease area and a small portion of Sallies, was granted by the DMR infiscal 2007. Known as ERPM Extension 2, the additional area is 5,500ha (13,590 acres). This prospecting right was initially granted for a period of 4 years and expired in March 2011. An application for renewal thereof was made in terms of the provisions of theMPRDA. The renewal in respect thereof was granted for a period of 3 years and as such, the prospecting right will now lapse in March 2014.
Environmental and Closure Aspects

There is a regular ingress of water into the underground workings of ERPM, which was contained by continuous pumping
from the underground section. Studies on the estimates of the probable rate of rise of water have been inconsistent, with certaintheories suggesting that the underground water might reach a natural subterranean equilibrium, whilst other theories maintain that the water could decant or surface. A program is in place to routinely monitor the rise in water level in the various underground compartments and there has been a substantial increase in the subsurface water levels.

ERPM’s SWV Shaft was used until October 6, 2008 to manage the rising water level on the Central Witwatersrand Basin.
Some 60 megalitres of water were pumped daily from a depth of approximately 1,000 meters.

On October 6, 2008, pumping of underground water at the South West Vertical Shaft was stopped for safety reasons
following the death of two employees at the shaft on September 19, 2008. Management concluded that the project to upgrade the totalpumping capacity at South West Vertical Shaft with a more efficient system as part of an Eskom-funded demand-side management project was not economically viable.

While the ultimate amount of rehabilitation costs to be incurred in the future is uncertain, we have estimated that the total
cost for ERPM, in current monetary terms as at June 30, 2013, is R23.2 million. A total of R7.7 million has been contributed to the ERPM Rehabilitation Trust Fund and R41.8 million in insurance instruments. This is an irrevocable trust, managed by specific responsible people who we nominated and who are appointed as trustees by the Master of the High Court of South Africa.
Ore Reserves and Life of Mine

Our 74% share of Proven and Probable Ore Reserves of ERPM are included under Ergo. As at June 30, 2013 the total
surface Ore Reserves comprise 0.07 million ounces from the Cason Dump and 1.2 million ounces from the Elsburg and Benoni tailings complexes, which will be processed over the next one and nine years, respectively. A Mineral Resource competent person is appointed at each operation to review our Ore Reserve calculations for accuracy. For ERPM, Mr. Vivian Labuschagne is the appointed Mineral Resource competent person. background image37
Current Production

Although ERPM is under care and maintenance, 418 ounces of gold was produced from clean-up activities during fiscal
2013.
Blyvoor (Discontinued operation)
Overview

Until June 1, 2012, when we sold our entire interest and claims against Blyvoor to Business Venture Investment No 1557
Proprietary Limited, a wholly owned subsidiary of Village, we owned 74% of Blyvoor, which in turn owns 100% of the Doornfontein Gold Mining Company Limited. The consolidated mining operation, referred to as Blyvoor, consists of the adjacent mines of Blyvooruitzicht and Doornfontein which are located within the Far West Rand Goldfield on the northwestern edge of the Witwatersrand Basin. Blyvoor was the first mine in the “West Wits” line. Together, these two operations produced over 38 millionounces of gold since inception in 1937, of which over 2.4 million ounces were produced while Blyvoor was owned by DRDGOLD.
Property

Blyvoor is located on the West Wits line within the Far West Rand Goldfield on the northwestern rim of the Witwatersrand
Basin, near the town of Carletonville, Gauteng Province, about 50.0 miles (80.5 kilometers) south-west of Johannesburg and is reached via the R528 road to Carletonville on the N12 Johannesburg-Potchefstroom-Kimberly highway.

The climate of the Highveld area (at an elevation of 5,249 feet (1,600 meters) above mean sea level), where the mine is
situated, is humid continental with warm summers and cold winters. Temperatures range from a minimum of 23 degrees Fahrenheit (-5 degrees Celsius) in June and July, to a maximum of 93 degrees Fahrenheit (34 degrees Celsius) in December and January.

The operating facilities are all situated on property belonging to Blyvoor, and include the shaft complexes, administrative
offices for the managerial, administrative, financial and technical disciplines, extensive workshops and consumable stores, themetallurgical plants, tailings dams and waste rock dumps. Blyvoor also houses the majority of its employees in Blyvoor-owned houses on the property and in the town of Carletonville. The normal support structures, including training, security, sport andrecreational facilities, schools and churches are situated on the property. Blyvoor has mining title to 16,242 acres (6,573 hectares) and owns 5,138 acres (2,079 hectares) of freehold property.

Blyvoor consists of one mining license, ML46/99, in respect of statutory mining rights and mineral rights held by Blyvoor.
Blyvoor is in the process of converting these old order mining rights to new order rights under the MPRD Act.
History
1937
Blyvooruitzicht Gold Mining Company Limited was incorporated and registered as a public company in South Africa on June 10, 1937.
1942
Gold production commenced.
1995
Blyvoor acquired the Doornfontein Gold Mining Company Limited in November 1995.
1996
Blyvoor acquired the mineral rights representing the Western Deep Levels tribute area.
1997
We acquired the entire share capital of Blyvoor on September 15, 1997.
2001
Implementation of the Blyvoor expansion project.
2003
Commissioning of No. 4 and 5 Slimes Dam retreatment facility at a cost of R48.0 million.
2004
On June 28, 2004, we entered into a 60-day review period on Blyvoor. The 60-day review was extended to September 13, 2004. By October 5, 2004, 1,619 employees had been retrenched at a cost of approximately R19.0 million.
2005
In August 2005, our Board of Directors approved No. 2 Sub-Shaft Project (now called the WAP Project) and the Slimes Dam Project to establish mining operations from the No. 2 Shaft and expansion to further improve plant efficiency, respectively.  On July 6, 2005, we signed a Memorandum of Understanding with Khumo Bathong Holding Proprietary Limited, or KBH, regarding the acquisition by Khumo Gold SPV Proprietary Limited, or Khumo Gold, of a 15% stake in our then South African operations. On October 27, 2005, our Board of Directors approved the transaction with Khumo Gold. The new structure resulted in Khumo Gold acquiring a 15% interest in a newly created vehicle, EMO, which owns ERPM, Crown and Blyvoor. We owned an 85% interest in EMO.
2006
On December 11, 2006, Khumo Gold, on behalf of itself and an employee trust, exercised the option granted by us pursuant to the option agreement concluded between us and Khumo Gold in October 2005 to acquire a further 11% in EMO.
2007
After completion of a drilling program to define the uranium resource in Blyvoor’s slimes dam material, a 17.5 million pound uranium and 0.8 million ton sulphur resource was declared in November 2007. background image38
2008
In January 2008, electricity supply to the mine was interrupted by the South African electricity company Eskom which is government owned and production suspended for a week due to safety concerns.
2009
In January 2009, a direct lightning strike to No. 5 shaft Eskom sub-station interrupted production at No. 5 shaft and other areas drawing power from this supply. Employees underground at the time remained in the underground refuge bays until hoisted to safety once the shaft feeder power had been restored. No injuries were recorded. In May and June 2009, three seismic events in excess of 3.5 magnitude took place at No. 5 shaft. As these events affected the highest grade carbon leader mining area, production from these areas was expected to resume in the third quarter of the 2010 fiscal year and was back in full production since May 2010. On November 9, 2009, we announced that, in a bid to save our Blyvoor mine from liquidation, we intended applying to the High Court of South Africa for a provisional judicial management order over the operation. A provisional judicial management order was granted by the High Court of South Africa on November 10, 2009. In December 2009, Aurora Empowerment Systems Proprietary Limited proposed a transaction to purchase 60% of Blyvoor for R295 million.
2010
In April 2010, the High Court of South Africa agreed to lift, with immediate effect, the provisional judicial management order in place since November 10, 2009. By mutual agreement between DRDGOLD and Aurora, Aurora’s offer to purchase 60% of Blyvoor was withdrawn.
2011
In June 2011, DRDGOLD's Board of Directors decided to suspend financial assistance to Blyvoor.  The Blyvoor Board of Directors, in response to the DRDGOLD Board’s decision, resolved to begin business rescue proceedings for Blyvoor in terms of Chapter 6 of the South African Companies Act.
2012
On June 1, 2012, we sold our entire interest and claims against Blyvoor to Business Venture Investment No 1557 Proprietary Limited a wholly owned subsidiary of Village.
Geology and Mineralization

Blyvoor exploits the two gold-bearing pebble horizons in the Central Rand Goldfields, the Carbon Leader, which is one
of the principal ore bodies in the goldfield, and the Middelvlei Reef horizons which occur in discrete channels over parts of thelease area approximately 246 feet (75 meters) vertically above the Carbon Leader Reef horizon. The Carbon Leader Reef is the principal economic horizon across the lease area and is a planar single sheet conglomerate. The Carbon Leader Reef typically comprises basal carbon seam, overlain by a thin, small pebble conglomerate, enriched in carbon in the lower portion. The grade of the Carbon Leader Reef is higher than the Middelvlei Reef. The Middelvlei Reef consists of a variable number of polymictic quartz conglomerate bands, inter-bedded with coarse grain quartzite. The grade of the Middelvlei Reef is more erratic, with distinctive pay shoots forming as southward-orientated linear zones.

Blyvoor was established in 1937 to exploit the rich Carbon Leader Reef but by the late 1980s had reached a position where
continued existence of mining operations was dependent upon the mining of scattered Carbon Leader Reef remnants and limited sections of the lower grade Middelvlei Reef.
Mining and Processing

Access from the surface to the current underground workings of the mines is through a system of vertical and incline shafts
situated at the Blyvoor and Doornfontein mines. Doornfontein was previously a separate mine adjacent to the Blyvoor mine but hassince been merged to form Blyvoor. The shaft system consists of four vertical shafts from the surface, thirteen sub-incline shafts and two sub-vertical shafts underground. Of the thirteen sub-incline shafts, only nine are in operation and are used for the conveyance of personnel, pumping and hoisting of mined ore and waste.
Two levels have been holed between the previous Doornfontein mine and workings within the Blyvoor lease extension
(purchased in 1996 from Western Deep Levels Limited) to allow ore from the bottom of the Blyvoor workings to be trammed across and hoisted up via the Blyvoor No. 5 Shaft, from where it is trucked to the gold plant. The average mining depth at Blyvoor is 10,541 feet (3,213 meters) and 5,292 feet (1,613 meters) below mean sea level.

Mining of the reef takes place in stope panels. Holes are drilled into the solid rock and are charged with explosives and
blasted. The loosened rock is removed from the stope panels and is conveyed to the shaft, tipped into the ore-pass systems, hoisted to the surface and transported to the metallurgical plant for gold extraction.

Metallurgical processing facilities at Blyvoor are comprised of a single metallurgical plant. The process route is based on a
conventional flow sheet comprising multi-stage crushing, open circuit primary and closed circuit secondary milling with hydro cyclones, thickening and cyanide leaching in a Carbon-in-Pulp, or CIP, carousel arrangement. The gold is recovered through electro-winning followed by smelting to doré. The circuit was recently modified by the closure of the filtration system and the commissioning of a modern carbon Kemix pumpcell plant. As at June 30, 2011, the overall plant utilization was 90%. background image39
Electricity for South Africa is provided by Eskom, which is government owned. Eskom is the largest producer of electricity
in Africa. In South Africa, Eskom operates a national power supply grid consisting of 24 power stations across the country. Electricity to Blyvoor is provided from the West Wits substation outside Carletonville at 44,000 volts. Further substations, located on mine site, transform the power to 6,600 volts or 22,000 volts for direct supply to the shaft winder and air compressors. The power supply is further reduced to 525 volts for smaller devices and equipment used on the mine. The average annual power consumption is about 432 GWHr and the maximum demand is about 66 MW.
In fiscal 2008, electricity supply to the mine was interrupted by Eskom, as a result of which production suspended for a
week due to safety concerns. The situation did improve during March 2008, the operation was however at the date of sale still on a six hour standby notice, in the event that power supply becomes unstable in the area. Eskom has requested all of its “Key Customers” to reduce power consumption by 10%. Blyvoor managed to adhere to this request and continued during fiscal 2010, 2011 and 2012 tosave the maximum amount of energy possible.
In fiscal 2009, seventeen production days were lost because of Section 54 closures imposed by the Department of
Mineral Resources following fatalities suffered after seismic events occurring and a further six production shifts were lost at No. 5 Shaft following a lightning strike at the shaft’s electrical substation. In May and June 2009, three seismic events in excess of 3.5 magnitude took place at No. 5 shaft. As these events affected the highest grade carbon leader mining area, production from theseareas was expected to resume in the third quarter of the 2010 fiscal year and was back to full production since May 2010.
During fiscal 2010, mining ramp-up continued towards the 2,500m
2
per month targeted at the WAP Project, and by fiscal
year-end had reached some 1,750 m
2
per month. On August 26, 2009, DRDGOLD announced that it had advised unions of its
intention to right-size the Blyvoor operation. Blyvoor proceeded with a 60-day facilitated consultation process in terms of Section 189A of the South African Labor Relations Act to determine the future of affected employees. The consultation process was completed on October 26, 2009 and 330 employees were retrenched. Furthermore, on November 9, 2009, in a bid to save our Blyvoor mine from liquidation, we applied to the High Court of South Africa for a provisional judicial management order over theoperation. A provisional judicial management order was granted by the High Court of South Africa on November 10, 2009. In April2010, after Blyvoor had returned to profitability, the High Court of South Africa agreed to lift the provisional judicial management order in place since November 10, 2009. Refer to Item 4A.: “History and Development of the Company” for a more detailed discussion.

In fiscal 2011, efforts were directed mainly towards the opening and development of mining areas to ensure more
flexibility. On June 23, 2011, DRDGOLD announced that it had suspended financial assistance to Blyvoor. The decision followed the promulgation of the new South African Companies Act which requires directors of parent companies to seek the consent of theparent company’s shareholders and then to consider the effects on the solvency and liquidity of the parent company as conditionsprecedent to the provision of financial assistance to subsidiaries. Blyvoor’s production had been trending down in the last quarter of fiscal 2011 as a result of a drop in grade, attributable to a substitute explosive used for the fourth quarter of fiscal 2011, due to major overhaul repairs at our regular explosive supplier’s manufacturing plant, public holiday interruptions and seismicity-related work stoppages, while costs had increased due mainly to higher electricity charges, and particularly power utility Eskom’s wintertariff, which added R11 million a month to overhead costs. The Board of Directors of Blyvoor had, in response to DRDGOLD’s decision, resolved to begin business rescue proceedings for Blyvoor in terms of Chapter 6 of the Companies Act. The business rescue process provided for in Chapter 6 replaces the judicial management process in the previous Act. Refer to Item 4A.: “History and Development of the Company” for a more detailed discussion.

In fiscal 2012, the Business Rescue Practitioner terminated the business rescue proceedings with effect from
November 10, 2011, following his conclusion that there were no longer grounds to believe that Blyvoor was financially distressed.At the beginning of February 2012, Blyvoor suspended mining from its Number 4 and 6 shafts as part of a process to reduce costs.On June 1, 2012, we sold our entire interest and claims against Blyvoor to a wholly owned subsidiary of Village. Refer to Item 4A.: “History and Development of the Company” for a more detailed discussion.
The following capital expenditure was incurred at Blyvoor in fiscal 2012 and  2011:
Year ended June 30,
2012
2011
R’000
R’000
Slimes pump stations and residue deposition ..............................................................
381
3,080
15/29 incline shaft equipping
  ....................................................................................
-
119
Ice plant retrofit and upgrade
  ...................................................................................
8
1,649
Safety related equipment and expansion of seismic monitoring
  network....................
- 28
Opening up and development
  ...................................................................................
50,315
57,248
Mining and engineering equipment
  ............................................................................
23,326
25,277
Other
  ........................................................................................................................
8,909 8,282
82,939 95,683 background image40
Environmental and Closure Aspects

The predominantly dolomitic geology of the area in and around Blyvoor, and the resultant occasional occurrence of
sinkholes and subsidences, exposes Blyvoor to relatively unique environmental risks and costs associated with the remediation andfilling of these sinkholes.

Blyvoor has to maintain a rate of pumping of fissure water sufficient to keep the rate of rise of underground water below the
level of underground workings. The required rate is in the order of 2 million gallons (8 million liters) per day. Water not used in the operations is discharged into the Wonderfontein Spruit (a stream adjacent to the Blyvoor mine). In order to address the risk ofcontamination of ground water, streams and wetlands, water is sampled and the level of contaminants monitored in accordance withBlyvoor’s water management plan. Fissure water at Blyvoor is generally of a good quality, therefore we believe that the contribution of this water to pollution of water in the area is minimal.
Blyvoor is a member of the Mining Interest Group consisting of all mines operating in the Wonderfontein Spruit
catchment area. This group was formed to coordinate efforts and studies in the Wonderfontein Spruit and to liaise with government departments to determine what action if any is required in cleaning the stream. The government has also established aspecialist task team to determine what needs to be done. At this stage there is no clear solution. The Mining Interest Group is also represented on the various catchment forums where Non-Governmental Organizations, or NGO’s and other interested and affected parties are present. Blyvoor continues to meet with the Potchefstroom municipality on a monthly basis where the quality of Blyvoor’s discharge water is assessed. Blyvoor remains in compliance with the Potchefstroom agreement.

Sinkholes are caused by ground water seeping into the underground dolomitic structures, which dissolve and weaken
causing a collapse in the rock structure. Dolomitic rock could be dissolved, resulting in an increased risk of sinkholes and possible pollution of fresh water resources stored in the dolomitic formations. The occurrence of sinkholes is limited to a particular area of Blyvoor, which requires an active program in water management and control. Water from leaking pipes is reported to a monitoringcommittee and the necessary repairs are undertaken promptly. Ground subsidence surveys are undertaken to timely identify any possible sinkholes. Sinkholes that do occur are filled to prevent further inflow of surface water and potential enlargement of the hole. Sinkholes which form outside of our property are repaired by the Far West Rand Dolomitic Water Association.

Pollution from slime dams is controlled by dust suppression and water management programs. Short-term dust control is
accomplished through ridge ploughing the top surface of dormant tailings dams. Environmentally friendly dust suppressants, such as molasses, are also applied when deemed necessary. In the long-term, dust suppression and water pollution is managed through a program of progressive vegetation of the tailings complexes followed by the application of lime, to neutralize the natural acidic conditions, and fertilizer as the organic growth medium.

Blyvoor has updated its EMP to meet the new requirements of the MPRD Act. The EMP was submitted to the DMR for
approval. Blyvoor is currently demolishing and rehabilitating redundant surface infrastructures. Blyvoor completed the demolishing of its uranium plant in fiscal 2011. background image41
Production in fiscal 2012 and 2011

Blyvoor produced a total of 96,645 ounces of gold for the period July 1, 2011 to May 31, 2012 of fiscal 2012, with
73,048 ounces from underground areas and 23,597 ounces from surface areas. This represented 42% of our total production from operations for fiscal 2012 of 232,353 ounces.

Cash operating costs of $1,404 per ounce in fiscal 2012 increased from $1,290 per ounce in fiscal 2011.

The following table details the operating and production results from Blyvoor for fiscal 2012 and fiscal 2011.

Year ended June 30,
2012
2011
Production (imperial) Surface Operations   Ore mined ('000 tons)
  ..................................................................................
3,004
3,448
Recovered grade (oz/ton)
..........................................................................
0.008
0.009
Gold produced (ounces) ................................................................................
23,597
29,645
Underground Operations   Ore mined ('000 tons)
  ...................................................................................
627
807
Recovered grade (oz/ton)
...........................................................................
0.117
0.113
Gold produced (ounces)
.............................................................................
73,048
91,469
Total ounces produced
  ...................................................................................
96,645
121,114
Results of Operations Revenue (R'000)
  ............................................................................................
1,240,073
1,185,860
Operating costs (R'000)
  .................................................................................
1,046,914
1,115,820
Cash operating cost (R'000)
1
........................................................................
1,052,197
1,091,941
Cash operating cost per ounce of gold ($)
1
....................................................
1,404 1,290
All-in sustaining cost per ounce of gold ($)1
  ...................................................
1,543
1,470
All-in cost per ounce of gold ($)1 ...................................................................
1,603
1,471
Durban Deep
Overview
The Durban Deep mine was the original gold mine of the Group. Durban Deep is situated on the northern edge of the
Witwatersrand Basin immediately to the west of Johannesburg. Mining took place within the lease area since the discovery of theWitwatersrand Goldfield in 1886 at nearby Langlaagte.

As of August 2000, we ceased all underground and open pit mining operations at Durban Deep. Following the withdrawal
of our underground pumping subsidy, the deeper sections of the mine were flooded. On a combined basis, Durban Deep produced more than 37 million ounces of gold prior to the cessation of operations.

We concluded an agreement with M5 on July 21, 2005, in terms of which M5, against payment of a non-refundable fee of
R1.5 million, was granted an option to acquire Durban Deep’s mine village for R15.0 million. The option lapsed on November 19, 2005. On the exercising of the option the option fee would be deemed part payment of the purchase consideration. If not, the option fee would be forfeited to us.

On November 18, 2005, M5 exercised the option and provided a guarantee for payment. Prior to the registration of the
transfer occurring, we were notified by Rand Leases Properties Limited (formerly JCI Properties Limited) of an alleged pre-emptive right in respect of the property in terms of an agreement dated December 1996, pursuant to which the property should be sold to them on similar terms. We subsequently repudiated our agreement with M5 and notified Rand Leases Properties Limited that we did not intend offering the property to them. Both parties indicated to us their intentions to institute legal proceedings for the sale and transfer of the property. On December 12, 2006, Rand Leases Properties Limited issued a summons against us and we filed an Appearance toDefend. A trial date was allocated by the High Court of South Africa for April 25, 2008, but the case was postponed. Dino PropertiesProprietary Limited (previously called M5) instituted action against the Company seeking to enforce an agreement of sale of theDRD Village entered into on July 21, 2005, or alternatively payment of R195 million which was alleged to represent the market value of the property. DRDGOLD entered into an agreement with Rand Leases Properties and purchased the pre-emptive right for an amount of R21.8 million. The sale agreement with Dino Properties was executed and the transfer of the property into the name ofDino Properties effected October 18, 2012. Both cases were withdrawn by Dino Properties and Rand Leases Properties. Refer to “Legal Proceedings- Legal proceedings relating to an agreement to sell Durban Deep’s mine village” below for more details.

1
Cash operating costs, cash operating cost per ounce, all-in sustaining costs per ounce and all-in cost per ounce of gold are financial measures of
performance that we use to determine cash generating capacities of the mines and to monitor performance of our mining operations. background image42
Property

Durban Deep is located within the Central Witwatersrand Basin which stretches from Durban Deep in the west to ERPM in
the east. Durban Deep is situated 9.3 miles (15 kilometers) west of Johannesburg and contains mining title to 14,262 acres (5,772hectares) and owns 3,667 acres (1,484 hectares) of freehold property. These include administrative buildings, hospital, recreationcomplexes, housing in both hostel and free-standing houses and a security complex. We have title to substantial land tracts on the outskirts of the City of Roodepoort, which is located in this section. We do not intend to convert our rights under the MPRD Act.
Mining and Processing

Five different ore bodies have been mined at Durban Deep. Ore was mined from outcrops at the surface down to a
maximum depth of 9,200 feet (2,804 meters) and the reefs are known to persist to 13,000 feet (3,962.4 meters) below the surfacewithin the lease area.
Environmental and Closure Aspects

Rehabilitation and other responsibilities like the National Nuclear Regulator Certificate of Registration requirements
have been taken over by DRD Proprietary Limited, which is owned by Mintails. The official liability transfer in terms of section58 of the MRPD Act has been granted by the DMR.
In fiscal 2013, the Company transferred the environmental rehabilitation liabilities in respect of mining rights over the
Durban Deep mining license area which was disposed of. A total of R25.6 million previously contributed to the Environmental TrustFund has been relinquished to DRD Proprietary Limited as a result of the transfer of the liability.
West Wits

We own 100% of West Witwatersrand Gold Holdings Limited, or WWGH, which holds West Witwatersrand Gold
Mines Limited, or West Wits. We acquired the entire share capital of WWGH, as well as Consolidated Mining Corporation Limited'sloan to WWGH, on April 1, 1996. We also acquired the entire issued share capital and the shareholders' claim and loan account ofEast Champ d'Or Gold Mine Limited, a gold mining company with mining title in the West Rand. The mining assets were sold to Bophelo Trading Proprietary Limited, subsequently renamed, Mogale Gold Proprietary Limited, or Mogale, during fiscal 2004, effectively leading to the closure of the mining operation.
Environmental and Closure Aspects
Responsibility for the mine, including the environmental rehabilitation liability, has been taken over contractually by
Mintails although the legal transfer thereof would be dependent on the DMR's assessment of Mintails' financial capability. DRDGOLD therefore still has a contingent liability until such legal transfer is affected. Management of the West Rand Consolidated Mines' tailings dams have been taken over by Mintails which plans to reprocess them. An EMP for the balance of the area has beensubmitted to the DMR as part of the conversion process of ML9/2000. The execution of the conversion is imminent.
The DMR and affected mining companies are involved in the development of a ‘Regional Mine Closure Strategy’ in the
gold fields’ area. The government has appointed Trans-Caledon Tunnel Authority to propose solutions for the various basins. Theyhave also provided funding for the interim solution in the Western and Central Basins.
In fiscal 2010, the Company transferred the environmental rehabilitation liabilities in respect of mining rights over the West
Wits mining license area which was disposed of. A total of R19.9 million previously contributed to the Environmental Trust Fund has been relinquished to Mintails as a result of the transfer of the liability. background image43
Legal Proceedings
Litigation regarding environmental issues
On August 2, 2006 and September 4, 2006, two applications were brought against DRDGOLD and its directors for relief
under the MPRD Act by the Legal Resources Centre on behalf of the residents of two communities, Davidsonville and Kagiso, who reside adjacent to tailings deposition sites of the now dormant Durban Roodepoort Deep mine and the West Witwatersrand mine, respectively. While no financial compensation is sought, the communities are seeking orders for the revision of the environmentalmanagement programs of both sites, and for the sites to be rehabilitated and closed in accordance with the standards of the MPRDAct. DRDGOLD has filed its Appearance to Defend and Answering Affidavits in respect of both matters in the High Court of South Africa. The responsibility rests with the respondent's attorneys to either apply to the High Court for a date of hearing or file replying affidavits.
Lawsuit by French shareholders
In August 2008, the Company received by post a summons issued in the Tribunal De Grande Instance District Court of Paris
by the Association for the Defense of the Shareholders of East Rand (the association) against EMO.
The claim was based on the following allegations:· that the members of the association were shareholders of ERPM; · that the non-audited ERPM results of the six-month period from July to December 1998 were misleading regarding the
'healthiness' of ERPM prior to its winding up in 1999;
· that the 1999 liquidation of ERPM was fraudulently approved by 15% of shareholders who were representatives of the
South African state against the interests of French shareholders; and
· that the subsequent scheme of arrangement to remove ERPM from liquidation in 1999 was approved by 15% of
shareholders without consultation with French shareholders.
On the basis of these allegations, the association was claiming a payment of 5 million euros in damages, 10,000 euros for
costs and costs of suit. EMO raised the point that the French Courts lack jurisdiction to hear the matter and also filed its defenses on the merits of the case. On May 24, 2011 the Court refused the association’s application for postponement and the case was struck off the roll. In view of the fact that a period of more than two years has passed since the case was struck off the roll, the proceedings have lapsed.
Legal proceedings relating to an agreement to sell Durban Deep’s mine village

We concluded an agreement with M5 on July 21, 2005, pursuant to which M5, against payment of a non-refundable fee of
R1.5 million, was granted an option to acquire Durban Deep’s mine village for R15.0 million. On November 18, 2005, M5 exercisedthe option and provided a guarantee for payment. Prior to the registration of the transfer occurring, we were notified by Rand Leases Properties Limited (formerly JCI Properties Limited) of an alleged pre-emptive right in respect of the property in terms of an agreement dated December 1996, pursuant to which the property should be sold to them on similar terms. We subsequently repudiated our agreement with M5 and notified Rand Leases Properties Limited that we did not intend offering the property to them. Both parties indicated to us their intentions to institute legal proceedings for the sale and transfer of the property. On December 12, 2006, Rand Leases Properties Limited issued a summons against us and we filed an Appearance to Defend and were issued an interdict by the High Court prohibiting us to sell the property in fiscal 2008. The Company bought back the pre-emptive right in June 2012 and Rand Leases Properties withdrawn the interdict against us to sell the property.
Dino Properties Proprietary Limited (previously M5) (“Dino Properties”) instituted action against us seeking to enforce an
agreement of sale of Durban Deep’s mine Village entered into on July 21, 2005, or alternatively payment of R195 million which was alleged to represent the market value of the property. On October 18, 2012 Dino Properties withdrew their action on the basis that each party pays its own costs.
Claim for alleged damages at Blyvoor
Duffuel Proprietary Limited and Paul Frederick Potgieter are suing DRDGOLD, EMO, Blyvoor and the latter's directors for
alleged pollution of peat reserves which they claim to sell to the mushroom industry.  The amounts claimed against DRDGOLD, EMO, Blyvoor and the latter's directors are as follows:
· R41,051,000 for loss of peat reserves; · R23,657,910 for removal and transportation of the polluted peat; · R2,025,000 for required permits and authorizations; · R1,650,000 for installation of pipelines; and · R192,000 for importation of clean water for domestic use. background image44
The defendants are defending this action and a plea setting out the basis of our defense has been filed at Court. The trial date
allocated by the Court was October 9, 2013. However, on November 27, 2012, the Parties settled the matter and the Plaintiff withdrew their claims on the basis that each party bears its own costs on December 10, 2012.
Dispute with the Ekurhuleni Municipality
The Ekurhuleni Metropolitan Municipality issued summons in October 2010 against ERPM claiming an amount of R42
million. As at June 30, 2013 the difference between the invoiced amount and ERPM’s calculations amounted to R53 million in respect of outstanding rates and taxes. The alleged outstanding amount is in respect of the valuation of surface right permits of which ERPM is the registered holder.  ERPM has entered an appearance to defend this action.
Appeal hearing against valuation of properties by the Ekurhuleni Municipality
ERPM is involved in a further dispute with the Ekurhuleni Metropolitan Municipality in respect of the valuation of various
freehold properties of which ERPM is the registered owner. The aggregate valuation of these properties is approximately R400 million. ERPM has appealed against these valuations in terms of the provisions of the Local Government: Municipal Property RatesAct, 6 of 2004 on the basis of inter alia the calculation methodology employed by the Municipal Valuer on behalf of the Municipality. The hearings in respect of the appeal were heard in June 2013 and ERPM still awaits a final outcome from the Valuation Appeal Board.
Silicosis Litigation
As a result of the South African Constitutional Court decision permitting individuals employed as miners with occupational
lung diseases to sue their current or former employers for damages outside the statutory compensation scheme, we could be subject to claims against us from previous or current employees, including a potential class action or similar group claim. In January 2013, DRDGOLD, ERPM and 23 other mining companies were served with a court application for a class action issued in the South Gauteng High Court by alleged former mineworkers and dependents of deceased mineworkers. In the pending application, the applicants allege that DRDGOLD, ERPM and other mining companies conducted underground mining operations in such a negligent manner that resulted in the former mineworkers contracting silicosis and other related diseases. We will assess all such claims, if and when filed, on their merits. Liability associated with such claims and expenses of dealing with them could have a material adverseeffect on our business, operating results and financial condition. DRDGOLD and ERPM have instructed Malan Scholes Attorneys to defend the case.
ITEM 4A. UNRESOLVED STAFF COMMENTS
None. background image45
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The following Operating and Financial Review and Prospects section is intended to help the reader understand the factors
that have affected the Company's financial condition and results of operations for the historical period covered by the financial statements and management's assessment of factors and trends which are anticipated to have a material effect on the Company's financial condition and results in future periods. This section is provided as a supplement to, and should be read in conjunction with, our audited financial statements and the other financial information contained elsewhere in this Annual Report. Our financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). Our discussion contains forward looking information based on current expectations that involve risks and uncertainties, such as our plans, objectives and intentions. Our actual results may differ fromthose indicated in such forward looking statements.
The Operating and Financial Review and Prospects include the following sections:
· Operating results:
-
Business overview, a general description of our business.
-
Key drivers of our operating results and principal factors affecting our operating results, a general description of the principal uncertainties and variables facing our business and the primary factors that have a significant impact on our operating performance.
-
Recent developments, a description of the recent acquisitions, disposals and other transactions that have impacted, or will impact, our performance.
-
Key financial and operating indicators, a presentation of the key financial measures we use to track our operating performance.
-
Application of critical accounting policies, a discussion of accounting policies that require critical judgments and estimates.
-
Operating results, an analysis of our consolidated results of operations during the three fiscal years presented in our financial statements. The analysis is presented both on a consolidated basis, and by operating segment.
· Liquidity and capital resources, an analysis of our cash flows, borrowings and our anticipated funding requirements andsources.
· Research and development, patents and licenses, etc.
· Trend information, a review of the outlook for, and trends affecting our business.
· Off-balance sheet arrangements.
· Tabular disclosure of contractual obligations, being the numerical review of our contractual future cash obligations.
· Safe harbor. background image46
5A. OPERATING RESULTS
Business overview
We are a South African gold mining company engaged in surface gold tailings retreatment, including exploration,
extraction, processing and smelting. Our surface tailings retreatment operations, including the requisite infrastructure and metallurgical processing plants, are located in South Africa. On June 1, 2012, we disposed of our last operating underground operation, Blyvooruitzicht Gold Mining Company Limited, or Blyvoor. Blyvoor has therefore been classified as a discontinued operation in fiscal 2012 in the comparative periods in this Annual Report. In fiscal 2010, the Group broadened its activities toinclude initial exploration activities on a small scale in Zimbabwe through a joint venture in which we currently own 49%. The initial feasibility studies in Zimbabwe indicate potential underground mining assets, which does not fit with our current strategy of surface gold mining. We have therefore decided not to continue with our Zimbabwe exploration activities.
Our strategy is to enhance shareholder value in the short and medium term by continuing to produce gold from our
surface resources while simultaneously:
· reducing risk and creating opportunities; · controlling costs; · maximizing margins; and · assuming our social and environmental responsibilities.
This strategy involves using our various capitals – human, financial, intellectual and manufactured – to extract gold from
extensive surface resources in the safest and most efficient manner, thus ensuring the sustainability of our social and environmental capital.
It also involves realizing the value of the underground gold associated with ERPM Extensions 1 and 2, an asset that no
longer fits our strategy and is for sale.
DRDGOLD’s long-term strategy is to improve gold recovery so that, in future, zero gold is returned to tailings deposition
facilities along with the waste material and to growing our reclamation business by:
· the use of technology and continuing research and development to improve reclamation efficiency and effectiveness; · acquiring additional surface resources on the Witwatersrand and, possibly, other areas; · using existing expertise and skills to expand into the reclamation of other minerals from waste material.
During the fiscal years presented in this Annual Report, all of our operations took place in one geographic region, namely
South Africa.
Ergo (Continuing operation):
· Ergo Mining Proprietary Limited (the entity is referred to as Ergo Mining, however the operating segment is called Ergo)– surface tailings retreatment; and · East Rand Proprietary Mines Limited (ERPM) – ERPM Extension 1 and 2 exploration tenements. ERPM’s undergroundmining operation has been discontinued and is included under ‘Corporate head-office and all other’ in our financialstatements’ operating segments.
Blyvoor (discontinued operation):
· Blyvooruitzicht Gold Mining Company Limited (Blyvoor) – underground mining and surface tailings retreatmentdisposed on June 1, 2012.
In fiscal 2013, the profit from continuing operations was R100.1 million (fiscal 2012: R253.0 million and fiscal 2011:
R83.5 million) and profit from discontinued operations was Rnil (fiscal 2012: R124.0 million profit and fiscal 2011: R498.9 million loss).
As at June 30, 2013, we had attributable Ore Reserves of approximately 1.7 million ounces, compared to 1.8 million
ounces as at June 30, 2012 and 6.3 million ounces as at June 30, 2011. The decrease in fiscal 2012 was attributable to the disposal of Blyvoor which represented 4.3 million ounces of the 6.3 million ounces of our reserves as at June 30, 2011. background image47
Key drivers of our operating results and principal factors affecting our operating results
The principal uncertainties and variables facing our business and, therefore, the key drivers of our operating results are:
· The price of gold, which fluctuates widely both in terms of dollars and rands; · The production tonnages and gold content thereof, impacting on the amount of gold we produce at our operations; · The cost of producing gold, including the effects of mining efficiencies; and · General economic factors, such as exchange rate fluctuations and inflation, and factors affecting mining operations  inSouth Africa.
Gold price
Our revenues are derived primarily from the sale of gold produced at our surface tailings retreatment operations. As a
result, our operating results are directly related to the price of gold, which can fluctuate widely and is affected by numerousfactors beyond our control, including industrial and jewelry demand, expectations with respect to the rate of inflation, the strength of the U.S. dollar (the currency in which the price of gold is generally quoted) and of other currencies, interest rates, actual or expected gold sales by central banks, forward sales by producers, global or regional political or economic events, and production and cost levels in major gold-producing regions such as South Africa. In addition, the price of gold is often subject to rapid short-term changes because of speculative activities. The demand for and supply of gold may affect gold prices, but not necessarily inthe same manner that supply and demand affect the prices of other commodities. The supply of gold consists of a combination of new production from mining and existing stocks of bullion and fabricated gold held by governments, public and private financialinstitutions, industrial organizations and private individuals. As a general rule we sell the gold produced at market prices to obtain the maximum benefit from prevailing gold prices and we don't hedge against changes in gold prices.
The following table indicates data relating to the dollar gold spot price for the 2013, 2012 and 2011 fiscal years:
2013 fiscal year
2012 fiscal year
% change
Opening gold spot price on July 1,
  ...................................
$1,599 per ounce
$1,506 per ounce
6%
Closing gold spot price on June 30, ..................................
$1,192 per ounce
$1,599 per ounce
(25%)
Lowest gold spot price during the fiscal year ...................
$1,192 per ounce
$1,483 per ounce
(20%)
Highest gold spot price during the fiscal year ...................
$1,792 per ounce
$1,895 per ounce
(5%)
Average gold spot price for the fiscal year .......................
$1,606 per ounce
$1,673 per ounce
(4%)
2012 fiscal year
2011 fiscal year
% change
Opening gold spot price on July 1,
  ...................................
$1,506 per ounce
$1,244 per ounce
21%
Closing gold spot price on June 30, ..................................
$1,599 per ounce
$1,506 per ounce
6%
Lowest gold spot price during the fiscal year ...................
$1,483 per ounce
$1,157 per ounce
28%
Highest gold spot price during the fiscal year ...................
$1,895 per ounce
$1,553 per ounce
22%
Average gold spot price for the fiscal year .......................
$1,673 per ounce
$1,369 per ounce
22%
2011 fiscal year
2010 fiscal year
% change
Opening gold spot price on July 1,
  ...................................
$1,244 per ounce
$935 per ounce
33%
Closing gold spot price on June 30, ..................................
$1,506 per ounce
$1,244 per ounce
21%
Lowest gold spot price during the fiscal year ...................
$1,157 per ounce
$909 per ounce
27%
Highest gold spot price during the fiscal year ...................
$1,553 per ounce
$1,261 per ounce
23%
Average gold spot price for the fiscal year .......................
$1,369 per ounce
$1,089 per ounce
26%
Our production has been sourced from South Africa, and as a result, the impact of movements in relevant exchange rates
is significant to our operating results. The average gold price in rand (based on average spot prices for the year) increased fromR9,565 per ounce in fiscal 2011 (a 15% increase from fiscal 2010), to R12,970 per ounce in 2012 (a 36% increase from fiscal 2011) and R14,185 per ounce in 2013 (a 9% increase from fiscal 2012).
Based on our forecast gold price of
  R410,473 per kilogram for fiscal 2014, a 10% increase in the rand gold price received
will increase our forecast profit for the year by
  R177.1 million and a 10% decrease in the rand gold price received will decreaseour profit for the year by
  R177.6 million. background image48
Gold production and operating costs

Gold production from our continuing and discontinued operations totaled 146,381 ounces during fiscal 2013, compared
to 232,353 ounces during fiscal 2012, and 265,179 ounces in fiscal 2011. Gold production from continuing operations totaled 146,381 ounces during fiscal 2013, compared to 135,708 ounces during fiscal 2012, and 144,065 ounces in fiscal 2011. The 9% increase (fiscal 2012: 36% increase) in the average rand gold price received in fiscal 2013 was partially offset by an increase in average cash operating costs per kilogram of 2% for continuing and discontinued operations (fiscal 2012: 21%). Average operating costs were higher due to high average price increases in operating costs components.

In fiscal 2013, production decreased to 146,381 ounces (produced from 23.3 million tonnes milled at an average yield of
0.20g/t) from 232,353 ounces in fiscal 2012 (produced from 24.9 million tonnes milled at an average yield of 0.29g/t). Productiondecreased to 232,353 ounces in fiscal 2012 from 265,179 ounces in fiscal 2011 (produced from 24.2 million tonnes milled at an average yield of 0.34g/t). The reasons for the movements in production are explained below.
Our continuing operation, Ergo, produced 146,381 ounces (from 23.3 million tonnes milled at an average yield of
0.20g/t) in fiscal 2013, in comparison with 135,708 ounces (from 21.6 million tonnes milled at an average yield of 0.20g/t) in fiscal 2012 and 144,065 ounces (from 20.3 million tonnes milled at an average yield of 0.22g/t) in fiscal 2011. The increase inproduction was due to a rise in throughput, resulting from the Crown/Ergo pipeline being fully operational during fiscal 2013. The decrease in production in fiscal 2012 was due to a decrease in average grade, resulting from the depletion of previous higher grade surface material being processed from the Top Star and Mennells dumps.
Our discontinued operation, Blyvoor, produced 96,645 ounces (from 3.3 million tonnes milled at an average yield of
0.91g/t) in fiscal 2012, in comparison with 121,114 ounces (from 3.9 million tonnes milled at an average yield of 0.98g/t) in fiscal 2011. The decrease in production in fiscal 2012 compared to fiscal 2011, was mainly due to the suspension of Blyvoor’s Number 4 and 6 shafts on February 6, 2012 and due to only eleven months of production being included in fiscal 2012 as a result of thedisposal of Blyvoor on June 1, 2012.

Our costs and expenses consist primarily of operating costs and depreciation. Operating costs include labor, specialized
service providers, stores, electricity and other related costs, incurred in the production of gold. ‘Consumables and other’ and'specialized services' are the largest components of operating costs, constituting respectively, 46% and 19% of operating costs for fiscal 2013. “Consumables and other’ and 'labor' constituted 48% and 18%, respectively, of our operating costs from continuing operations for fiscal 2012. For fiscal 2013, none, fiscal 2012, 31% and fiscal 2011 35% of our mining operations, based on kilograms of gold produced, involved deep level underground mining from our discontinued operation, Blyvoor, which is more labor intensive.
General economic factors
All our operations are located in South Africa. We are exposed to a number of factors, which could affect our
profitability, such as exchange rate fluctuations, inflation and other risks relating to South Africa. In conducting mining operations, we recognize the inherent risks and uncertainties of the industry, and the wasting nature of the assets.
Effect of exchange rate fluctuations
For the year ended June 30, 2013, all of our revenues were generated from South Africa, all of our operating costs were
denominated in rand and we derived all of our revenues in dollars. As the price of gold is denominated in dollars and we realizeour revenues in dollars, the appreciation of the dollar against the rand increases our profitability, whereas the depreciation of the dollar against the rand reduces our profitability. Based upon average exchange rates during the respective years, the rand weakened by 14% against the dollar in fiscal 2013, compared to a weakening of 11% against the dollar in fiscal 2012 and a strengthening by 8% against the dollar in fiscal 2011. The weakening of the rand against the dollar in fiscal 2013 and 2012 contributed to the increase in the average rand gold price received of 9% and 36%, respectively. The strengthening of the rand against the dollar in fiscal 2011 limited the increase in the average rand gold price received to only 17%.
As an unhedged gold producer, we do not enter into forward gold sales contracts to reduce our exposure to market
fluctuations in the dollar gold price or the exchange rate movements. If revenue from gold sales falls for a substantial periodbelow our cost of production at our operations, we could determine that it is not economically feasible to continue commercial production at any or all of our plants or to continue the development of some or all of our projects. background image49
Our weighted average cash operating costs per kilogram for our operations was R310,763 per kilogram of gold produced
in fiscal 2013, R304,912 per kilogram of gold produced in fiscal 2012 and R251,296 per kilogram of gold produced in fiscal 2011.Our weighted average cash operating costs per kilogram for our continuing operation was R310,763 per kilogram of gold produced in fiscal 2013, R272,778 per kilogram of gold produced in fiscal 2012 and R218,868 per kilogram of gold produced in fiscal 2011. For fiscal 2012, our weighted average cash operating costs per kilogram for our discontinued operation was R350,032per kilogram of gold produced  and R289,870 per kilogram of gold produced in fiscal 2011. The average gold price received from operations was R458,084 per kilogram of gold produced in fiscal 2013, R418,538 per kilogram of gold produced in fiscal 2012 and R308,220 per kilogram of gold produced in fiscal 2011.
Effect of inflation
In the past, our operations have been materially adversely affected by inflation. If there is a significant increase in
inflation in South Africa without a concurrent devaluation of the rand or an increase in the price of gold, our costs will increase, negatively affecting our operating results.
The movements in the rand/dollar exchange rate, based upon average rates during the periods presented, and the local
annual inflation rate for the periods presented, as measured by the South African Consumer Price Index, or CPI, are set out in the table below:











Fiscal year ended
Year ended June 30,
2013
(%)
2012
(%)
2011
(%)
The average rand/dollar exchange rate weakened/(strengthened) by .............................................
14
11
(8.2)
CPI (inflation rate)
  .....................................................................................................................
5.5 5.5 5.3
The South African CPI inflation rate stabilized in fiscal 2013, 2012 and fiscal 2011 after a significant decrease from 6.9%
in fiscal 2009 and as at September 30, 2013, it was at 6.5%.
South African political, economic and other factors
We are a South African company and all our revenue producing operations are based in South Africa. As a result, we are
subject to various economic, fiscal, monetary and political factors that affect South African companies generally, including exchange control regulations. Governmental officials have from time to time stated their intentions to lift South Africa’s exchange control regulations when economic conditions permit such action. Over the last few years, certain aspects of exchange controls for companies and individuals have been incrementally relaxed. It is, however, impossible to predict when, if ever, the South African Government will remove exchange controls in their entirety. South African companies remain subject to restrictions on their ability to export and deploy capital outside of the Southern African Common Monetary Area, unless dispensation has been granted by the South African Reserve Bank. For a detailed discussion of exchange controls, see Item 10D.: “Exchange controls.”
On May 1, 2004, the Mineral and Petroleum Resources Development Act (MPRD Act) became effective. Prior to the
introduction of the MPRD Act, private ownership in mineral rights and statutory mining rights in South Africa could be acquiredthrough the common law or by statute. Now, all mineral rights have been placed under the custodianship of the South African Government under the provisions of the MPRD Act, and "old order" proprietary rights need to be converted to "new order" rights of use within certain prescribed periods. We have submitted certain applications in this regard. This process is described in more detail under Item 4B.: “Business Overview – Governmental regulations and their effects on our business - South Africa - Common Law Mineral Rights and Statutory Mining Rights.” background image50
Recent developments
Ergo (includes Ergo Mining, ErgoGold, Crown and ERPM’s Cason dump)
On July 1, 2012, DRDGOLD restructured the group’s surface operations into Ergo Mining in order to improve synergies,
affect cost savings and implement a simpler group structure. Ergo Mining is a wholly-owned subsidiary of Ergo Mining Operations Proprietary Limited, or EMO. EMO is 74% held by DRDGOLD, 20% by its black economic empowerment (BEE) partner, Khumo Gold SPV Proprietary Limited (Khumo Gold) and 6% by the DRDSA Empowerment Trust.
Various transactions to give effect to the restructuring have been entered into, in terms of which:
· DRDGOLD has sold its 35% direct interest in the ErgoGold unincorporated partnership to Ergo Mining for R200million on loan account;  · Crown Gold Recoveries Proprietary Limited, or Crown has sold its mining assets (excluding its 50% interest inErgo Mining), mining and prospecting rights and certain liabilities to Ergo Mining in exchange for shares in ErgoMining;  · ERPM sold all of its surface mining assets (excluding its 50% interest in Ergo Mining) and its 65% interest inErgoGold to Ergo Mining in exchange for shares in Ergo Mining; and  · Crown and ERPM will distribute their entire holdings in Ergo Mining to sole shareholder EMO.
Consequently, EMO will hold 100% directly of Ergo Mining.
The ERPM and Crown disposals are subject to the consent of the Minister of Mineral Resources in terms of section 11 of
the MPRD Act.
Blyvoor
On September 14, 2010, Blyvoor, then a subsidiary of EMO, was transferred from EMO to DRDGOLD and became a
direct subsidiary of DRDGOLD. This was done in order to separate the Company’s underground and surface operations in two investment vehicles; the first being Blyvoor, involved in underground operations at a higher risk, marginal gold mine with a high potential upside if the rand gold price reaches more favorable levels and the second being EMO, involved in surface operations ata lower risk, higher margin gold mine. Following this restructuring, DRDGOLD’s Board of Directors announced in April, 2011 that Blyvoor no longer fit within the Company’s strategic focus and that the mine would be sold.
On June 23, 2011, DRDGOLD announced that its Board of Directors had decided to suspend financial assistance to
Blyvoor. The decision followed the promulgation of the new Companies Act of South Africa which requires directors of parent companies to seek the consent of the parent company shareholders and then to consider the effects on the solvency and liquidity of the parent company as conditions precedent to the provision of financial assistance to subsidiaries. Blyvoor’s production had been trending down as a result of a drop in grade and seismicity-related work stoppages, while costs had increased due mainly to higherelectricity charges, and particularly power utility Eskom’s winter tariff which added R11 million a month to overhead costs. Theboard of directors of Blyvoor had, in response to the DRDGOLD Board’s decision, resolved to begin business rescue proceedings for Blyvoor in terms of Chapter 6 of the Companies Act. The business rescue process provided for in Chapter 6 replaced the judicial management process in the previous Companies Act.

On August 17, 2011, DRDGOLD announced that Blyvoor had been granted an extension by the Southern Gauteng High
Court of South Africa (Johannesburg) until November 1, 2011, to publish a business rescue plan.

On November 10, 2011, the Business Rescue Practitioner terminated the business rescue after concluding that there were
no longer grounds to believe that Blyvoor was financially distressed in terms of Chapter 6 of the South African Companies Act, 2008.
On February 11, 2012, DRDGOLD, Village Main Reef Limited (Village), Blyvoor and Business Venture Investments
No 1557 Proprietary Limited (a wholly owned subsidiary of Village) (Purchaser) entered into a sale of shares and claims agreement. Pursuant to terms of the Agreement, DRDGOLD agreed to sell its entire shareholding in Blyvoor (which amounts to 74% of the total issued ordinary share capital of Blyvoor) (Sale Shares) and its working capital and shareholder loan claims against Blyvoor, or the  Sale Claims to the Purchaser, the Transaction. The Transaction is divided into the Part A Sale and the Part B Sale. In terms of the Part A Sale, the Sale Claims are sold to the Purchaser, and in terms of the Part B Sale, the Sale Shares are sold to the Purchaser. The purchase consideration payable in respect of the Sale Claims and the Sale Shares shall be discharged by Village through the issue of 85,714,286 new ordinary shares in Village (Village Shares) to DRDGOLD and an amount of R1 payable in cash by Village, respectively. background image51
The Part A Sale was completed on June 1, 2012, at which time 65,714,286 of the Village Shares were issued directly to DRDGOLD and 20,000,000 are held in escrow (Escrow Shares) pending completion of the Part B Sale.

The Part B Sale is subject to the fulfillment, or waiver (if applicable), of the following conditions precedent:
· by not later than the second anniversary of the signature date of the Agreement, the Department of Mineral Resources(DMR) has granted the conversion of Blyvoor's old order mining right and the new order mining right has been notariallyexecuted and registered in the Mining Titles Office or Conversion; and  · by not later than the third anniversary of the signature date of the Agreement, the DMR has unconditionally approved thetransfer of DRDGOLD's interest in Blyvoor to the Purchaser in terms of section 11 of the Mineral & PetroleumResources Development Act, No 28 of 2002 or conditionally approved it on terms and conditions which each ofDRDGOLD and the Purchaser confirms to be acceptable (Section 11 Approval).

Upon fulfillment of the Part B Conditions Precedent, the Escrow Shares together with any accrued dividends thereon will
be released to DRDGOLD and the Sale Shares will be transferred to the Purchaser.

If Conversion does not occur in accordance with the terms of the Agreement, or Conversion occurs but Section 11
Approval is not obtained, any one, or more, of the following may occur:
· the sale of the Sale Shares is implemented and the Sale Shares are transferred to the Purchaser;  · a portion of the Sale Claims revert to DRDGOLD;  · the Escrow Shares together with any accrued dividends thereon are released to DRDGOLD or to the Purchaser;  · the appointment of the Purchaser as DRDGOLD’s agent to render corporate services on behalf of DRDGOLD to Blyvoorcontinues or is terminated; and/or  · the DRDGOLD’s right to receive dividends in respect of the Sale Shares is reinstated. background image52
Key financial and operating indicators
The table below presents the key performance measurement data for the past three fiscal years: The financial results for
the years ended June 30, 2013, 2012 and 2011 below are stated in accordance with IFRS as issued by the IASB. The table also includes the key performance measures for the growth of our business and its profitability, which are gold revenue, production,operating costs, cash operating costs per kilogram, all-in sustaining costs per kilogram and all-in costs per kilogram, capitalexpenditure and Ore Reserves.
Operating data
Total operations
Year ended June 30,
2013
2012
2011
Revenue (R'000)
  .........................................................................................................
2,076,496 3,004,264 2,565,319
Gold production (ounces)
  ............................................................................................
146,381
232,353 265,179
Gold production (kilograms)
  .......................................................................................
4,553
7,227 8,248
Revenue (R/kilogram)
  .................................................................................................
456,072
415,700 311,023
Average gold price received (R/kilogram) ...................................................................
458,084
418,538
308,220
Operating costs (R'000)
  ..............................................................................................
1,397,177
  2,188,887 2,088,299
Cash operating costs (R'000)
  ......................................................................................
1,414,904
2,203,597 2,072,687
Cash operating costs (R/kilogram)
1
............................................................................
310,763
304,912
251,296
All-in sustaining costs (R/kilogram)1 ...........................................................................
365,569
353,863
  291,066
All-in costs (R/kilogram)1
  ............................................................................................
436,638 390,064 318,743
Capital expenditure - cash (R'000) ...............................................................................
382,424
333,175 317,250
Ore Reserves (ounces) ..................................................................................................
1,676,000
  1,825,000 6,336,000
Continuing operations
Year ended June 30,
2013
2012
2011
Revenue (R'000)
  ..........................................................................................................
2,076,496 1,764,191 1,379,459
Gold production (ounces) .............................................................................................
146,381
135,708 144,065
Gold production (kilograms) ........................................................................................
4,553
4,221
  4,481
Revenue (R/kilogram)
  .................................................................................................
456,072
417,956 307,846
Average gold price received (R/kilogram) ...................................................................
458,084
418,849
308,880
Operating costs (R'000)
  ..............................................................................................
1,397,177
  1,141,973
  972,479
Cash operating costs (R'000)
  .......................................................................................
1,414,904
1,151,400 980,746
Cash operating costs (R/kilogram)1 ..............................................................................
310,763
272,779 218,868
All-in sustaining costs (R/kilogram)1 ...........................................................................
365,569
331,978 258,247
All-in costs (R/kilogram)1
  ............................................................................................
436,638 383,294 308,868
Capital expenditure - cash (R'000) ...............................................................................
382,424
250,237 221,567
Ore Reserves (ounces) ..................................................................................................
1,676,000
  1,825,000
  1,997,000
Discontinued operation
Year ended June 30,
2013
2012
2011
Revenue (R'000)
  .........................................................................................................
n/a
1,240,073 1,185,860
Gold production (ounces)
  ............................................................................................
n/a
96,645 121,114
Gold production (kilograms) ........................................................................................
n/a
3,006
3,767
Revenue (R/kilogram)
  .................................................................................................
n/a
412,533
  314,802
Average gold price received (R/kilogram) ...................................................................
n/a
418,096
307,457
Operating costs (R'000)
  ..............................................................................................
n/a
1,046,914 1,115,820
Cash operating costs (R'000)
  ......................................................................................
n/a
1,052,197 1,091,941
Cash operating costs (R/kilogram)1
  .............................................................................
n/a
350,032
289,870
All-in sustaining costs (R/kilogram)1 ...........................................................................
n/a
384,689
330,105
All-in costs (R/kilogram)1
  ...........................................................................................
n/a
399,572 330,491
Capital expenditure - cash (R'000)
  ..............................................................................
n/a
82,938
95,683
Ore Reserves (ounces)
  .................................................................................................
n/a
n/a 4,339,000

1
Cash operating costs, all-in sustaining costs and all-in costs are non-IFRS financial measures of performance that we use to determine cash
generating capacities of the mines and to monitor performance of our mining operations. For a reconciliation of those measures to operating costs, see Item 5A.: “Operating Results” - “Reconciliation of cash cost per kilogram, all-in sustaining costs per kilogram, all-in costs per kilogram and capital expenditure (cash).” background image53
Revenue
Revenue is derived from the sale of gold. The following table analyzes our revenue for the periods under review for
continuing and discontinued operations:
Year ended June 30,
2013
R'000
2012
R'000
2011
R'000
Continuing operations



Ergo.................................................................................................................................. 2,076,496 1,764,191 1,379,459
Discontinued operation



Blyvoor
  ...........................................................................................................................
n/a 1,240,073 1,185,860
Total
  .................................................................................................................................. 2,076,4963,004,2642,565,319
Revenue decreased from R3,004.3 million in fiscal 2012 to R2,076.5 million in fiscal 2013 mainly as a result of the
disposal of Blyvoor on June 1, 2012. The increase in revenue from continuing operations was due to an 8% increase in throughputfrom the Crown/Ergo pipeline which was operational for the whole of fiscal 2013 and a 9% increase in the rand dollar price.
Revenue increased from R2,565.3 million in fiscal 2011 to R3,004.3 million in fiscal 2012 mainly as a result of the 36%
higher rand gold price received. The increase in revenue was partially offset by a decrease in production at Ergo of 6% due to adecrease in grade resulting from the depletion of Top Star and Mennells higher grade dumps. The increase in revenue was also offset by the suspension of Blyvoor's Number 4 and 6 shafts at the start of February 2012 and because only eleven months of Blyvoor's revenue was included in fiscal 2012 following the disposal of Blyvoor on June 1, 2012.
Gold production
The following table analyzes the production for the periods under review for continuing and discontinued operations:
Year ended June 30
2013
2012
2011
OuncesKilogramsOuncesKilogramsOuncesKilograms
Continuing operations
Ergo............................................................
146,381
  4,553 135,708 4,221 144,065 4,481
Discontinued operation
Blyvoor
.....................................................
-
- 96,645 3,006
121,114 3,767
Surface operations .....................................
-
-
23,597
734
29,645
922
Underground operations ............................
-
-
73,048
2,272
91,469
2,845
Total production
  ........................................
146,3814,553232,3537,227265,1798,248
Our total gold production in fiscal 2013 decreased by 85,972 ounces, or 37%, to 146,381 ounces from 232,353 ounces
produced in fiscal 2012. At Ergo, total gold production was 8% higher at 146,381 ounces (fiscal 2012: 135,708 ounces). This reflected an 8% rise in throughput to 23,254,000 tonnes (fiscal 2012: 21,603,000 tonnes) and a constant average grade of 0.20g/t(fiscal 2012: 0.20g/t).
For fiscal 2012, our total gold production decreased by 32,826 ounces, or 12%, to 232,353 ounces from 265,179 ounces
produced in fiscal 2011. At Ergo, total gold production was 6% lower at 135,708 ounces (fiscal 2011: 144,065 ounces). This reflected a 6% rise in throughput to 21,603,000 tonnes (fiscal 2011: 20,326,000 tonnes) and a 9% reduction in average grade to 0.20g/t (fiscal 2011: 0.22g/t), resulting from the depletion of the Top Star and Mennells higher grade dumps. At Blyvoor, totalgold production for the year was 96,645 ounces, down by 20% from 121,114 ounces in fiscal 2011, primarily due to the suspension of Blyvoor’s Number 4 and 6 shafts at the start of February 2012 and the inclusion of eleven months of Blyvoor production for fiscal 2012. background image54
Cash operating costs
1
, all-in sustaining costs and all-in costs per kilogram1
For fiscal 2013, cash operating costs from continuing and discontinued operations increased to R310,763 per kilogram of
gold from R304,912 per kilogram of gold in fiscal 2012. All-in sustaining costs per kilogram increased to R365,569 per kilogramof gold in fiscal 2013 from R353,863 per kilogram of gold in fiscal 2012. All-in costs per kilogram increased to R436,638 per kilogram of gold in fiscal 2013 from R390,094 per kilogram of gold in fiscal 2012. The increase in cash operating costs and all-in sustaining costs per kilogram of gold produced in fiscal 2013 was due to above inflation increases in prices of key consumables,labor and electricity. The increase in all-in costs per kilogram was primarily due to the foregoing and the non-recurring increase in non-sustaining capital relating to the flotation and fine-grind project. For fiscal 2012, cash operating costs from total operations increased to R304,912 per kilogram of gold from R251,296 per kilogram of gold in fiscal 2011. All-in sustaining costs per kilogram increased to R353,863 per kilogram of gold in fiscal 2012 from R291,066 per kilogram of gold in fiscal 2011. All-in costs per kilogram increased to R390,064 per kilogram of gold in fiscal 2012 from R318,743 per kilogram of gold in fiscal 2011.The increase in cash operating costs and all-in sustaining costs per kilogram of gold produced in fiscal 2012 was due to above inflation increases in prices of key consumables, labor and electricity as well as the 12% decrease in production. The increase in all-in costs per kilogram was primarily due the foregoing and to the non-recurring R43.7 million retrenchment costs relating toBlyvoor recorded in fiscal 2012.
Ergo's cash operating costs for fiscal 2013 increased to R310,763 per kilogram of gold from R272,779 per kilogram of gold
in fiscal 2012. All-in sustaining costs per kilogram increased to R365,569 per kilogram of gold in fiscal 2013 from R331,978 perkilogram of gold in fiscal 2012. All-in costs per kilogram increased to R436,638 per kilogram of gold in fiscal 2013 from R390,064 per kilogram of gold in fiscal 2012. The increase in cash operating costs and all-in sustaining costs per kilogram were due to above inflation increases in prices of key consumables, labor and electricity and, for all-in sustaining costs, the increase in corporate costs relating to a new business unit aimed specifically at researching new business opportunities. The increase in all-in costs per kilogram was primarily due to the foregoing and to the non-recurring increase in non-sustaining capital relating to the flotationand fine-grind project. Ergo's cash operating costs per kilogram for fiscal 2012 increased to R272,779 per kilogram of gold fromR218,868 per kilogram of gold in fiscal 2011. All-in sustaining costs per kilogram increased to R331,978 per kilogram of gold infiscal 2013 from R258,247 per kilogram of gold in fiscal 2011. All-in costs per kilogram increased to R383,294 per kilogram of goldin fiscal 2012 from R308,868 per kilogram of gold in fiscal 2011. The increases were due to above inflation increases in prices of key consumables, labor and electricity as well as the decrease in production.
Blyvoor's cash operating costs for fiscal 2012 increased to R350,032 per kilogram of gold from R289,870 per kilogram of
gold in fiscal 2011. All-in sustaining costs per kilogram increased to R384,689 per kilogram of gold in fiscal 2012 from R330,105 per kilogram of gold in fiscal 2011. All-in sustaining costs per kilogram increased to R399,572 per kilogram of gold in fiscal 2012 from R330,491 per kilogram of gold in fiscal 2011. The increase in all-in sustaining costs and all-in costs per kilogram were due to R43.7 million retrenchment costs.
Reconciliation of cash operating costs per kilogram, all-in sustaining costs per kilogram, all-in costs per kilogram and capitalexpenditure (cash)
Cash operating costs of production include costs for all mining, processing, administration, royalties and production
taxes, but exclude depreciation, depletion and amortization, rehabilitation, retrenchment costs and corporate administration costs.Cash operating costs per kilogram are calculated by dividing cash operating costs by kilograms of gold produced. Cash operatingcosts per kilogram have been calculated on a consistent basis for all periods presented.
All-in sustaining costs per kilogram is a measure on which guidance were provided by the World Gold Council and
include cash operating costs of production plus, on-site general and administrative costs, royalties and production taxes, sustaining capital, sustaining exploration, the accretion of rehabilitation costs, but excludes depreciation, retrenchment costs, finance costs, depletion and amortization, reclamation and closure costs. All-in sustaining costs per kilogram are calculated by dividing all-insustaining costs by kilograms of gold produced. All-in sustaining costs per kilogram have been calculated on a consistent basis for all periods presented.
All-in costs per kilogram is a measure on which guidance were provided by the World Gold Council and include total
operating costs, plus all-in sustaining costs, non-sustaining capital costs relating to projects, retrenchment costs, capital recoupment relating to non-sustaining capital, ongoing rehabilitation expenditure, and non-operating costs, but exclude taxation,minority interest, finance costs, profit or loss from associates and the cumulative effect of accounting adjustments. All-in costs per kilogram are calculated by dividing all-in costs by kilograms of gold produced. All-in costs per kilogram have been calculated ona consistent basis for all periods presented.

1
Cash operating costs, all-in sustaining costs and all-in costs per kilogram are non-IFRS financial measures of performance that we use to
determine cash generating capacities of the mines and to monitor performance of our mining operations. background image55
Cash operating costs per kilogram, all-in sustaining costs per kilogram and all-in costs per kilogram are non-IFRS
financial measures that should not be considered by investors in isolation or as alternatives to operating costs, net profit/(loss)attributable to equity owners of the parent, profit/(loss) before tax and other items or any other measure of financial performance presented in accordance with IFRS or as an indicator of our performance. While the World Gold Council provided guidance for the calculation of cash operating costs, the calculation of cash operating costs per kilogram, all-in sustaining costs and all-in costs per kilogram may vary significantly among gold mining companies, and these definitions by themselves do not necessarily provide a basis for comparison with other gold mining companies. However, we believe that cash operating costs per kilogram, all-in sustaining costs per kilogram and all-in costs per kilogram are useful indicators to investors and our management of an individual mine's performance and of the performance of our operations as a whole as they provide:
· an indication of a mine’s profitability and efficiency;  · the trend in costs; · a measure of a mine's margin per kilogram, by comparison of the cash operating costs per kilogram by mine to the priceof gold; and · a benchmark of performance to allow for comparison against other mines and mining companies.
Capital expenditure (cash) is the actual cash flow for the particular fiscal period as taken from the statement of cash flows
for additions to property, plant and equipment under investing activities.
A reconciliation of cash operating costs to operating costs as per our operating segment, all-in sustaining costs and all-in
costs for each of the three years ended June 30, 2013, 2012 and 2011 is presented below. In addition, we have also provided below details of the amount of gold produced by each mine for each of those periods. background image56
For the year ended June 30, 2013(in R'000, except as otherwise noted)
Continuing Operations
Discontinued
operation
1
Ergo
ERPM
2
Other
2
Total

Total
Cash operating costs
3
...............................................................
1,414,904
-
-
1,414,904
-
1,414,904
Movement in gold in process ....................................................
(17,727)
-
-
(17,727)
-
(17,727)
Net operating costs
1,397,177
-
-
1,397,177
-
1,397,177
Plus:
Administration expenses, general costs and other ..................
68,950
21,201
24,028
114,179
-
114,179
Movement in provision for environmental  rehabilitation
  ........................................................................
35,694
22
(20,382)
15,334
-
15,334
Unwinding of rehabilitation provision
  .....................................
31,982
1,555
-
33,537
-
33,537
Sustaining capital
  ....................................................................
95,071
9,052
86
104,209
-
104,209
All-in sustaining costs
  ........................................................
1,628,874
31,830
3,732
1,664,436
-
1,664,436
Plus:
Retrenchment costs
  ..............................................................
-
-
565
565
-
565
Care and maintenance costs
  ..................................................
-
20,251
-
20,251
-
20,251
Ongoing rehabilitation expenditure
  .......................................
45,444
-
-
45,444
-
45,444
Capital recoupment
  ..............................................................
(131)
(11,356)
(15,000)
(26,487)
-
(26,487)
Non-sustaining capital
  ...........................................................
261,470
-
22,337
283,807
-
283,807
All-in costs
  ............................................................................
1,935,656
40,725
11,634
1,988,016
-
1,988,016
Gold produced (ounces) .............................................................
146,381
-
-
146,381
-
146,381
Gold produced (kilograms) ........................................................
4,553
-
-
4,553
-
4,553
Cash operating costs per kilogram (R per kilogram)
  .................
310,763
-
-
310,763
-
310,763
All-in sustaining costs per kilogram (R per kilogram)
  ...............
357,758
-
-
365,569
-
365,569
All-in costs per kilogram (R per kilogram) ...............................
425,139
-
-
436,638
-
436,638

1
Fiscal 2013 had no discontinued operations.
2
Relates to other non-core operating entities within the Group and is included under ‘Corporate head office and other’ in our segmental reporting.
3
Cash operating costs equate to cash operating costs of production. background image57
For the year ended June 30, 2012(in R'000, except as otherwise noted)
Continuing Operations
Discontinued
operation
Ergo
1
ERPM
2
Other
2
TotalBlyvoor
3

Total
Cash operating costs
4
...............................................................
1,151,400
-
-
1,151,400
1,052,197
2,203,597
Movement in gold in process ....................................................
(9,427)
-
-
(9,427)
(5,283)
(14,710)
Net operating costs
1,141,973
-
-
1,141,973
1,046,914
2,188,887
Plus:
Administration expenses, general costs/(income) and other ..
64,105
(277)
33,797
97,625
25,613
123,238
Movement in provision for environmental  rehabilitation
  ........................................................................
48,292
9,861
1,333
59,486
(301)
59,185
Unwinding of rehabilitation provision ....................................
5,153
928
-
6,081
1,211
7,292
Sustaining capital
  .................................................................... 77,578
25
18,513 96,116
82,939
179,055
All-in sustaining costs
  .......................................................
1,337,101
10,537
53,643
1,401,281
1,156,376
2,557,657
Plus:
Retrenchment costs
  ..............................................................
-
-
-
-
43,747
43,747
Care and maintenance costs
  ...................................................
-
29,299
-
29,299
-
29,299
Ongoing rehabilitation expenditure
  .......................................
39,445
7,702
148
47,295
990
48,285
Capital recoupment
  ...............................................................
-
(287)
-
(287)
-
(287)
Non-sustaining capital
  ...........................................................
140,294
-
-
140,294
-
140,294
Total costs
  ..............................................................................
1,516,840
47,251
53,791
1,617,882
1,201,113
2,818,995
Gold produced (ounces) .............................................................
135,708
-
-
135,708
96,645
232,353
Gold produced (kilograms) ........................................................
4,221
-
-
4,221
3,006
7,227
Cash operating costs per kilogram (R per kilogram)
  ..................
272,779
-
-
272,779
350,032
304,912
All-in sustaining costs per kilogram (R per kilogram)
  ................
316,774
-
-
331,978
384,689
353,863
All-in costs per kilogram (R per kilogram)
  ................................
359,356
-
-
383,294
399,572
390,064

1
Ergo include Ergo, ErgoGold, Crown and ERPM’s surface Cason operation.
2
Relates to other non-core operating entities within the Group and is included under ‘Corporate head office and other’ in our segmental reporting.
3
Blyvoor was sold on June 1, 2012, and has been classified as a discontinued operation. Comparable prior year numbers have been adjusted to distinguish between continuing- and discontinued operations where
relevant.
4
Cash operating costs equate to cash operating costs of production. background image58
For the year ended June 30, 2011(in R'000, except as otherwise noted)
Continuing Operations
Discontinued
operation
Ergo
1
ERPM
2
Other
2
Total
Continuing
OperationsBlyvoor
3
Total
Group
Cash operating costs
4
...............................................................
980,746
-
-
980,746
1,091,941
2,072,687
Movement in gold in process ....................................................
(8,267)
-
-
(8,267)
23,879
15,612
Operating costs
972,479
- -
972,479
1,115,820
2,088,299
Plus:
Administration expenses, general costs and other ..................
12,588
15,243
39,720
67,551
26,620
94,171
Movement in provision for environmental  rehabilitation
  .........................................................................
36,352
11,049
(483)
46,918
5,649
52,567
Unwinding of rehabilitation provision
  ......................................
7,303
1,053
-
8,356
1,049
9,405
Sustaining capital
  ...................................................................
56,223
207
5,473
61,903
94,367
156,270
All-in sustaining costs
  .........................................................
1,084,945
27,552 44,710 1,157,207
1,243,505
2,400,712
Plus:
Retrenchment costs
  ...............................................................
-
839
-
839
-
839
Care and maintenance costs
  ...................................................
-
24,892
-
24,892
-
24,892
Ongoing rehabilitation expenditure ........................................
32,311
9,047
167
41,525
1,453
42,978
Capital addition/(recoupment)
  ...............................................
-
-
10,464
10,464
-
10,464
Non-sustaining capital
  ............................................................
149,110
-
-
149,110
-
149,110
All-in costs
  .............................................................................
1,266,366
62,330 55,341 1,384,037
1,244,958
2,628,995
Gold produced (ounces) .............................................................
144,065
-
-
144,065
121,114
265,179
Gold produced (kilograms) ........................................................
4,481
-
-
4,481
3,767
8,248
Cash operating costs per kilogram (R per kilogram)
  .................
218,868
-
-
218,868
289,870
251,296
All-in sustaining costs per kilogram (R per kilogram)
  ...............
242,121
-
-
258,247
330,105
291,066
All-in costs per kilogram (R per kilogram) ...............................
282,608
-
-
308,868
330,491
318,743

1
Ergo include Ergo, ErgoGold, Crown and ERPM’s surface Cason operation.
2
Relates to other non-core operating entities within the Group and is included under ‘Corporate head office and other’ in our segmental reporting.
3
Blyvoor was sold on June 1, 2012, and has been classified as a discontinued operation. Comparable prior year numbers have been adjusted to distinguish between continuing- and discontinued operations where
relevant.
4
Cash operating costs equate to cash operating costs of production. background image59
Capital expenditure (cash)
During fiscal 2013, total capital expenditure (cash) was R382.4 million, compared to R333.2 million in fiscal 2012, an
increase of 15%. Capital expenditure increased primarily as a result of the new flotation and fine-grind project. In fiscal 2013, Ergo spent R261.5 million on the flotation and fine-grind project, R11.7 million on the Brakpan tailings facility, R20.5 million on the Cason high grade plant, R30.4 million on the Angelo Pan reclamation and pipeline, R26.3 million on infrastructure upgrades and R5.5 million on other equipment. The corporate head office had capital expenditure amounting to R13.5 million relating to the exploration in Zimbabwe. For a detailed summary of capital expenditure, see Item 4D.: “ Property, Plant and Equipment”.
During fiscal 2012, total capital expenditure (cash) was R333.2 million, compared to R317.3 million in fiscal 2011, an
increase of 5%. Capital expenditure increased primarily as a result of the new flotation and fine-grind project and the completion of the Crown/Ergo pipeline project. In fiscal 2012, Ergo spent R33.9 million on the Crown/Ergo pipeline project, R50.7 million onthe extension of the Brakpan tailings facility, R15.5 million on the refurbishment of the Ergo plant, R38.5 million on the new flotation and fine-grind project, R49.0 million on infrastructure upgrades equipment, R14.2 million on the tailings facilities and R16.1 million to replace old equipment and acquire new equipment. Blyvoor spent R50.3 million on opening up and development, R23.3 million on equipment and R9.3 million on other equipment and the tailings facilities. The corporate head office had capitalexpenditure amounting to R21.7 million relating to property, R7.8 million relating to the exploration in Zimbabwe and R2.9 million on other equipment. For a detailed summary of capital expenditure, see Item 4D.: “ Property, Plant and Equipment”.
Subsequent to June 30, 2013 and up to September 30, 2013 we spent R52.4 million on capital expenditure relating mainly
to:
· Ergo's construction of the flotation plant amounting to R43.8 million, the Benoni slurry line  amounting to R3.1 million, theBrakpan tailings facility amounting to R2.7 million, the Daggafontein rehabilitation expenditure amounted to R1.5 millionand security fencing upgrading amounted to R1.3 million.
Ore Reserves

As at June 30, 2013, our Ore Reserves were estimated at 1.7 million ounces, as compared to 1.8 million ounces at
June 30, 2012, representing an 8% decrease. The decrease was mainly due to depletion. As at June 30, 2012, our Ore Reserves wereestimated at 1.8 million ounces, as compared to approximately 6.3 million ounces at June 30, 2011, representing a 71% decrease. The decrease was due to the disposal of Blyvoor which comprised 68% of the 6.3 million reserves at the end of fiscal 2011.

We seek to increase our attributable Ore Reserves through exploration and to acquire additional new Ore Reserves.
Year ended June 30,
2013
2012
2011
OuncesKilograms
Ounces
Kilograms
Ounces
Kilograms
‘000
‘000
‘000





Continuing operations





Ergo
1
.........................................................
1,676
52,127 1,825 56,961 1,997 62,111
Discontinued operation





Blyvoor
  ....................................................
-
-
  - -
4,339
134,963
Total Ore Reserves
  ...................................
1,67652,127
1,82556,9616,336197,074








Our Ore Reserves presented in Item 4B.: “Business Overview” and above are prepared using three year average gold prices
at the time of reserve determination for each year presented. For purposes of our financial statements, depreciation and impairment of property, plant and equipment is determined based upon our "recoverable minerals", which means Proven and Probable Ore Reserves, which are calculated using our life of mine business plans and the gold price at the end of each financial year.

1 After the restructuring,
Ergo’s Ore Reserves include the Elsburg and Benoni tailings complexes which are being processed by Ergo,
  however the mining rights for these tailings are owned by ERPM. Crown's Ore Reserves have also been included under Ergo. background image60
Application of critical accounting policies

Some of our significant accounting policies require the application of significant judgment by management in selecting the
appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty and are based on our historical experience, terms of existing contracts, management's view on trends in the gold mining industry and information from outside sources.

Management believes the following critical accounting policies involve the more significant judgments and estimates used
in the preparation of our consolidated financial statements and could potentially impact our financial results and future financialperformance:
· Property, plant and equipment · Impairment of property, plant and equipment · Deferred income and mining taxes · Reclamation and environmental costs · Financial instruments
Management has discussed the development and selection of each of these critical accounting policies with the Board of
Directors and the Audit Committee, both of which have approved and reviewed the disclosure of these policies. Our significant accounting policies relating to our accounting estimates and judgments are described in more detail in note 1 to the consolidated financial statements. Refer to Item 18.: “Financial statements’’. This discussion and analysis should be read in conjunction with the consolidated financial statements and related notes included in Item 18.: “Financial statements’’.
Property, plant and equipment

Actual expenditures incurred for mineral property interests, mine development costs, mine plant facilities and equipment are
capitalized to the specific mine to which the cost relates. Depreciation is calculated on a mine-by-mine basis using the units ofproduction method. Other assets are depreciated using the straight-line method over the expected life of these assets. Under the units of production method, we estimate the depreciation rate based on actual production over total Proven and Probable Ore Reserves ofthe particular mine, which are calculated using our life of mine business plans and a gold price at the end of each financial year. This rate is then applied to actual costs capitalized to date to arrive at the depreciation expense for the period. Proven and Probable Ore Reserves of the particular mine reflect estimated quantities of economically and legally recoverable reserves. Changes in management’s estimates of the quantities of economically recoverable reserves impact depreciation on a prospective basis. The estimate of the total reserves of our mines could be materially different from the actual gold mined due to changes in the factors used in determining our Ore Reserves, such as the gold price, foreign currency exchange rates, labor costs, engineering evaluations of assay values derived from sampling of drill holes and other openings. Any change in management’s estimate of the total Proven and Probable Ore Reserves would impact the depreciation charges recorded in our consolidated financial statements. The prevailing market price of gold at the end of the financial year was R328,155, R408,381 and R378,158 per kilogram for the fiscal years ended June 30, 2011, 2012 and 2013, respectively.
Impairment of property, plant and equipment
The carrying amounts of assets, other than inventories and deferred tax assets are reviewed at each reporting date to
determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Future cash flows are estimated based on quantities of recoverable minerals, expected gold prices, production levels and cash operating costs of production, all based on life of mine business plans. The term “recoverable minerals” means Proved and Probable Ore Reserves, which are calculated using our life of mine business plans and a gold price at the end of each financial year. The prevailing market price of gold at the end of the financial year was R328,155, R408,381 and R378,158 per kilogram for the fiscal years ended June 30, 2011, 2012 and 2013, respectively. For the purpose of impairment testing, assets are grouped together into the smallest group of assets which generatescash inflows from continuing use that is largely independent of the cash inflows of other assets or groups of assets, or the cash-generating unit. An impairment loss is recognized directly against the carrying amount of the asset whenever the carrying amount of an asset, or its cash generating unit, exceeds its recoverable amount. Impairment losses are recognized in profit or loss.
The recoverable amount of property, plant and equipment is generally determined utilizing discounted future cash flows. We
also consider such factors as our market capitalization, the quality of the individual ore body and country risk in determining the recoverable amount. During fiscal 2013, R110.2 million (fiscal 2012: Rnil, and fiscal 2011: R546.6 million) was recorded as an impairment at a specific asset level. background image61
In fiscal 2013, we calculated the recoverable amount based on updated life-of-mine business plans, a gold price of R410,473
per kilogram in year one escalating at 6.7% per annum, and a discount rate of 14.9%. With a 10% reduction in the gold price to R369,425 per kilogram, an impairment of R1,097.4 million would be raised, or at an increase in the discount rate of 1.9 percentagepoints (13%) to 16.8%, the group would begin impairment of the mining assets. The increase in discount rate from 14.4% in fiscal2012 to 14.9% in fiscal 2013, was mainly as a result of the increase in the group’s risk premium from 9.6% in fiscal 2012 to 10.1% in fiscal 2013. The increase in the escalation rate from 5.3% in fiscal 2012 to 6.7% in fiscal 2013 was a result of a 22% weaker  exchange rate forecast of the rand against the dollar from R9.1150 in fiscal 2012 to R11.0952 in fiscal 2013 .
In fiscal 2012, we calculated the recoverable amount based on updated life-of-mine business plans, a gold price of R441,936
per kilogram in year one escalating at 5.3% per annum, and a discount rate of 14.4%. With a 10% reduction in the gold price to R397,742 per kilogram, an impairment of R914.8 million would be raised, or at an increase in the discount rate of 8.5 percentagepoints (59%) to 22.9%, the group would begin impairment of the mining assets. The increase in discount rate from 13.9% in fiscal2011 to 14.4% in fiscal 2012, was mainly as a result of the increase in the group’s risk premium from 8.1% in fiscal 2011 to 9.6% in fiscal 2012.
The R110.2 million impairment in fiscal 2013, consisted of R52.4 million against Ergo's property, plant and equipment
(R40.0 million for surface dumps and R12.4 million for plant equipment), R8.6 million against ERPM’s plant equipment and R49.2 million to Chizim Gold's exploration assets.
The R546.6 million impairment in fiscal 2011, related to Blyvoor which represented one cash generating unit. A discount
rate of 14.4%, together with further risk adjustments to future cash flows were used in determining the impairment. Management also took into consideration as part of their reasonableness assessment, a sensitivity analysis and the fact that Blyvoor was under businessrescue proceedings, with the business rescue plan not being approved as at the end of fiscal 2011. Further considerations included the group's market capitalization, which were lower than the group's net asset value before the impairment had been raised.
Deferred income and mining taxes

Deferred taxation is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred tax is not recognized for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences, based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, and based on the laws that have been enacted or substantively enacted by the reporting date.

The amount recognized as a deferred tax asset is generally determined utilizing discounted future cash flows. We consider
all factors that could possibly affect the probability that future taxable profit will be available against which unused tax credits can be utilized. These factors included profitability of the operations and an estimate of the gold price. The amount recognized as a deferred tax asset is sensitive to the current gold spot price. As at June 30, 2013 we recognized a deferred tax asset of R2.9 million (June 30, 2012: R38.3 million and June 30, 2011: R69.2 million). The amount recognized at June 30, 2013 was based on a future gold price receivable of R410,473 per kilogram in year one, escalating at an average of 6.7% per annum.
Reclamation and environmental costs

The decommissioning provision for environmental rehabilitation represents the cost that will arise from rectifying damage
caused before production commenced. Accordingly an asset is recognized and included within mining properties. Provisions for environmental rehabilitation are provided at the present value of the expenditures expected to settle the obligation, using estimated cash flows based on current prices. The unwinding of the obligation is included in profit or loss. Estimated future costs of environmental rehabilitation are reviewed regularly and adjusted as appropriate for new circumstances or changes in law or technology. Changes in estimates are capitalized or reversed against the related asset but taken to profit or loss if there is no related asset left. Gains or losses from the expected disposal of assets are not taken into account when determining the provision.

Estimated provisions for environmental rehabilitation, comprising pollution control rehabilitation and mine closure, are
based on our environmental management plans in compliance with current technological, environmental and regulatory requirements.An average discount rate of 7.6%, average inflation rate of 5.4% and expected life of mines according to the life-of-mine plans were utilized in the calculation of the estimated net present value of the rehabilitation liability (fiscal 2012: average discount rate of 7.3%, average inflation rate of 5.4% and fiscal 2011: average discount rate of 8.5% and inflation rate of 6.0%). During fiscal 2013 there was a net decrease in the provision of R6.4 million which was credited to property, plant and equipment for Ergo, and a reduction amounting to R22.5 million for rehabilitation costs incurred (during fiscal 2012 there was a net increase in the provision of R13.4 million which was capitalized to property, plant and equipment for Ergo, representing an increase in its respective footprints and a reduction amounting to R19.8 million for rehabilitation costs incurred). As a result of the disposal of Blyvoor the provision for environmental rehabilitation decreased by R46.0 million in fiscal 2012. background image62
The restoration provision for environmental rehabilitation represents the costs of restoring site damage after the start of
production. Increases in the provision are recognized in profit or loss as a cost of production. Gross restoration liabilities areestimated at the present value of the expenditures expected to settle the obligation.

Charges to profit or loss for the environmental rehabilitation of R15.3 million, R59.2 million and R52.6 million were raised
in fiscal 2013, 2012 and 2011, respectively. Unwinding of the provisions amounting to R33.5 million, R7.3 million and R9.4 million were recorded in fiscal 2013, 2012 and 2011, respectively.

In South Africa, annual contributions are made to dedicated Rehabilitation Trust Funds and investments in funds held in
insurance instruments, which are to be used to fund the estimated cost of rehabilitation during and at the end of the life of the relevant mine.
Financial instruments
Financial instruments recognized on the statement of financial position include investments, trade and other receivables,
cash and cash equivalents, long- and short-term interest-bearing borrowings, trade and other payables, and bank overdrafts. Financial instruments are initially recognized at fair value and include any directly attributable transaction costs, except those financial instruments measured at fair value through profit or loss.
If the value of the financial instrument cannot be obtained from an active market, we have established fair value by using
valuation techniques. These include the use of recent arm’s length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis and option pricing models, refined to reflect the issuer’s specific circumstances. Listed shares are measured at fair value based on the market close price at the reporting date and applying a discount factor for liquidity constraints pertaining to the relevant listed shares.
Operating results
Comparison of financial performance for the fiscal year ended June 30, 2013 with fiscal year ended June 30, 2012
Revenue
The following table illustrates the year-on-year change in revenue by evaluating the contribution of each segment to the
total change on a consolidated basis for fiscal 2013 in comparison to fiscal 2012:

Impact of change in volume



R’000
Total
revenue
2012Disposals
Internal
growth/
(decline)
Impact of
change in
priceNet
change
Total
revenue
2013
Ergo
1
.........................................
1,764,191 -
138,761
173,544 312,305
2,076,496
Blyvoor
2
...................................
1,240,073
(1,240,073)
-
-
(1,240,073)
-
Total Operations
  ...................
3,004,264
(1,240,073)
138,761
173,544
(927,768)
2,076,496
Revenue for fiscal 2013 decreased by R927.8 million, or 31%, to R2,076.5 million, mainly due to the disposal of Blyvoor
on June 1, 2012. The increase in revenue for Ergo was largely due to a 9% increase in the average rand gold price received amounting to R458,084 per kilogram and an 8% increase in gold produced from continuing operations.
Net operating costs
The following table illustrates the year-on-year change in net operating costs by evaluating the contribution of each
segment to the total change on a consolidated basis for fiscal 2013 in comparison to fiscal 2012:
Impact of change in volume

R’000
Net
operating
costs
2012Disposals
Internal
growth/
(decline)
Impact of
change in
costsNet
change
Net
operating
costs
2013
Ergo
1
.........................................
1,141,973
-
89,821
165,383
255,204
1,397,177
Blyvoor
2
....................................
1,046,914 (1,046,914) - -
(1,046,914) -
Total
  .........................................
2,188,887(1,046,914)
89,821
165,383(791,710)1,397,177

1
Due to the restructuring on July 1, 2012 ErgoGold, Ergo Mining, Crown and the surface retreatment operation of ERPM have all been
transferred into Ergo Mining. However, this did not result in a change in the Ergo operating segment.
2
Blyvoor was sold on June 1, 2012. background image63
The following table lists the major components of operating costs for each of the years set forth below:
Years ended June 30,
Costs
2013
2012
Labor
  .............................................................................................................................................
17% 32%
Specialized service providers ..........................................................................................................
19% 12%
Consumables and other  ...................................................................................................................
46%
37%
Electricity and water
  .......................................................................................................................
18%
19%

Operating costs are linked directly to the level of production of a specific fiscal year. Operating costs in fiscal 2013
decreased by 36% to R1,397.2 million compared to operating costs of R2,188.9 million in fiscal 2012. This decrease was mainly as a result of the disposal of Blyvoor on June 1, 2012.
Rehabilitation provision and amounts contributed to environmental trust funds
As of June 30, 2013, we estimate our total rehabilitation provision, being the discounted estimate of future costs, to be
R524.3 million as compared to R504.3 million at June 30, 2012. The increase in the provision for environmental rehabilitation infiscal 2013 was due to changes in discount and inflation rate assumptions, changes in estimates resulting from changes to the life-of-mines and additional environmental damage incurred which was off-set by a R22.5 million reduction in the provision resulting fromrehabilitation work conducted during fiscal 2013. In fiscal 2013, an expense of R15.3 million (fiscal 2012: R59.2 million) and the unwinding of the provision of R33.5 million (fiscal 2012: R7.3 million) was recorded in profit or loss.
A total of R86.4 million was invested in our various environmental trust funds as at the end of fiscal 2013, as compared
to R106.3 million for fiscal 2012. The decrease is attributable to the derecognition of the DRDGOLD rehabilitation trust fund, amounting to R25.6 million, due to the relinquishment of the fund to the buyer of the relating mining rights over the Durban Roodepoort Deep mine area. The decrease was partially offset by a R5.6 million increase for interest received on these funds during fiscal 2013. A total of R90.7 million was invested in funds held in insurance instruments to provide financial guarantees to the DMR through an insurance cell captive company, the Guardrisk Cell Captive. The shortfall between the invested funds and theestimated provisions is expected to be financed by ongoing contributions to the Guardrisk Cell Captive, over the remaining production life of the respective mining operations, the proceeds on the disposal of remaining assets and gold from plant clean-up.
Depreciation
Depreciation charges were R143.8 million for fiscal 2013 compared to R120.9 million for fiscal 2012. The increase was
mainly attributable to the completion of the Crown/Ergo pipeline project during May 2012, which was depreciated for a full yearin fiscal 2013.
Retrenchment costs
Retrenchment costs decreased to R0.6 million in fiscal 2013 from R43.7 million in fiscal 2012. In fiscal 2012, these costs
related to the closure of the Number 4 and 6 shafts at Blyvoor, resulting in the retrenchment of 1,542 employees.
Impairments
In fiscal 2013, an impairment amounting to R238.0 million was recognized. The impairment consisted of R110.2 million
against property, plant and equipment at a specific asset level, R101.3 million against our investment in Village and R25.6 million for the derecognition of the DRDGOLD rehabilitation trust fund.
Administration expenses and general costs
The administration expenses and general costs decreased in fiscal 2013 to R78.1 million from R121.5 million in fiscal
2012, a decrease of R43.4 million. In fiscal 2013, administration expenses and general costs included a non-recurring gain on disposal of property amounting to R19.3. In fiscal 2012, administration expenses and general costs included a non-recurring lossof approximately R9.6 million relating to the loss on the sale of property, plant and equipment.
Finance income
Finance income increased from R33.4 million in fiscal 2012 to R66.0 million in fiscal 2013. The increase was mainly due
to dividends received from available-for-sale financial assets in fiscal 2013, amounting to R32.5 million. background image64
Finance expenses
Finance expenses increased from R17.7 million in fiscal 2012 to R42.0 million in fiscal 2013. The increase was mainly
attributable to the unwinding of the rehabilitation provision amounting to R33.5 million in fiscal 2013 compared to R7.3 millionin fiscal 2012. In addition, the interest paid on the Domestic Medium Term Note Program (see Item 5B. “Liquidity and Capital Resources – Borrowings and Funding”) increased with the increase in borrowings from R30.7 million in fiscal 2012 to R167.6 million in fiscal 2013.
Income tax
The net tax charge of R44.9 million for fiscal 2013 consisted of a current taxation credit of R8.7 million which includes a
R12.8 million prior year over provision and a deferred tax charge of R53.6 million. This compares to a net tax charge of R8.0 million for fiscal 2012 consisting of a current taxation charge of R12.5 million, a deferred tax credit of R9.0 million andsecondary tax on companies amounting to R4.5 million. The year-on-year increase in the net tax charge was mainly due to the increased profitability of Ergo.
Comparison of financial performance for the fiscal year ended June 30, 2012 with fiscal year ended June 30, 2011
Revenue
The following table illustrates the year-on-year change in revenue by evaluating the contribution of each segment to the
total change on a consolidated basis for fiscal 2012 in comparison to fiscal 2011:

Impact of change in volume



R’000
Total
revenue
2011Disposals
Internal
growth/
(decline)
Impact of
change in
priceNet
change
Total
revenue
2012
Ergo
1
.........................................
1,379,459
  -
(80,040)
464,772 384,732
1,764,191
Blyvoor
2
....................................
1,185,860
(112,734)
(126,830)
293,777
54,213
1,240,073
Total Operations
  ....................
2,565,319
(112,734)
(206,870)
758,549
438,945
3,004,264
Revenue for fiscal 2012 increased by R438.9 million, or 17%, to R3,004.3 million, mainly due to the 36% higher average
gold price received. The average gold price increased from R311,023 per kilogram in fiscal 2011 to R415,700 per kilogram in fiscal 2012. The increase in revenue was partially offset by a decrease in production at Ergo of 6% due to a decrease in grade resulting from the completion of Top Star and Mennells higher grade dumps. The increase in revenue was also offset by the suspension of Blyvoor's Number 4 and 6 shafts at the start of February 2012 and because only eleven months of Blyvoor's revenuewas included following the disposal of Blyvoor on June 1, 2012.
Net operating costs
The following table illustrates the year-on-year change in net operating costs by evaluating the contribution of each
segment to the total change on a consolidated basis for fiscal 2012 in comparison to fiscal 2011:

Impact of change in volume



R’000
Net
operating
costs
2011Disposals
Internal
growth/
(decline)
Impact of
change in
costsNet
change
Net
operating
costs
2012
Ergo
1
.........................................
972,479
-
(56,426)
225,920
169,494
1,141,973
Blyvoor
2
...................................
1,115,820
(95,174)
  (130,241) 156,509 (68,906)
1,046,914
Total
  ........................................
2,088,299(95,174)(186,667)382,429100,588
2,188,887
The following table lists the major components of operating costs for each of the years set forth below:
Years ended June 30,
Costs
2012
2011
Labor
  .............................................................................................................................................
32%
35%
Specialized service providers ..........................................................................................................
12%
12%
Consumables and other
  ..................................................................................................................
37%
35%
Electricity and water
  ......................................................................................................................
19%
18%

1
Ergo includes ErgoGold , Ergo Mining, Crown and the surface retreatment operation of ERPM.
2
Blyvoor was sold on June 1, 2012. background image65
As gold mining in South Africa is very labor intensive, labor costs and specialized service providers are one of the largest
components of operating costs. Operating costs are linked directly to the level of production of a specific fiscal year. Operating costs in fiscal 2012 increased by 5% to R2,188.9 million compared to operating costs of R2,088.3 million in fiscal 2011. This increase was mainly as a result of above inflation increases in labor, electricity and consumable costs at both Ergo and Blyvoor.The increase in operating costs was partially offset by the closure of Number 4 and 6 shafts at Blyvoor and the fact that only eleven months of Blyvoor's operating costs are included due to the disposal of Blyvoor on June 1, 2012.
Rehabilitation provision and amounts contributed to environmental trust funds
As of June 30, 2012, we estimate our total rehabilitation provision, being the discounted estimate of future costs, to be
R504.3 million as compared to R490.2 million at June 30, 2011. The increase in the provision for environmental rehabilitation infiscal 2012 was due to changes in discount and inflation rate assumptions, changes in estimates resulting from changes to the life-of-mines and additional environmental damage incurred which had been off-set by a R46.0 million reduction in the provision resultingfrom the disposal of Blyvoor on June 1, 2012. In fiscal 2012, an expense of R59.2 million (fiscal 2011: R52.6 million) includingthe unwinding of the provision of R7.3 million (fiscal 2011: R9.4 million) was recorded in profit or loss.
A total of R106.3 million was invested in our various environmental trust funds as at the end of fiscal 2012, as compared
to R134.2 million for fiscal 2011. The decrease is attributable to the disposal of Blyvoor on June 1, 2012, which reduced the trust funds by R35.1 million. The decrease was partially offset by an R8.3 million increase for interest received on the investment ofthese funds during fiscal 2012. A total of R59.3 million was invested in funds held in insurance instruments to provide financial guarantees to the DMR through an insurance cell captive company called, Guardrisk Cell Captive. The shortfall between the invested funds and the estimated provisions is expected to be financed by ongoing contributions to the Guardrisk Cell Captive, over the remaining production life of the respective mining operations, the proceeds on the disposal of remaining assets and gold from plant clean-up.
Depreciation
Depreciation charges were R120.9 million for fiscal 2012 compared to R130.9 million for fiscal 2011. The decrease is
mainly attributable to the classification of Blyvoor as held-for-sale in accordance with IFRS 5 – Non-current Assets Held of Saleand Discontinued Operations, on December 31, 2011, at which date depreciation ceased. This was followed by the disposal of Blyvoor on June 1, 2012.
Retrenchment costs
Retrenchment costs increased to R43.7 million in fiscal 2012 from R0.8 million in fiscal 2011. In fiscal 2012, these costs
related to the closure of the Number 4 and 6 shafts at Blyvoor, resulting in the retrenchment of 1,542 employees.
Impairments
In fiscal 2012, an impairment amounting to R1.1 million was taken against the West Witwatersrand Gold Mines
Proprietary Limited rehabilitation trust fund, due to the disposal of the relating mining rights over the West Wits mining leasearea.
Administration expenses and general costs
The administration expenses and general costs increased in fiscal 2012 to R121.5 million from R88.1 million in fiscal
2011, an increase of R33.4 million. In fiscal 2012, administration expenses and general costs included a non-recurring cost of approximately R9.6 million relating to the loss on the sale of property, plant and equipment. In fiscal 2011, administration expenses and general costs included a non-recurring credit of approximately R5.7 million as a result of a decrease in the provision for post-retirement medical benefits. Other than inflation-related increases, these were the main reasons for the year-on-year increase.
Finance income
Finance income decreased from R52.8 million in fiscal 2011 to R33.4 million in fiscal 2012. The decrease was mainly
due to a non-recurring net gain on financial liabilities measured at amortized cost in fiscal 2011, amounting to R24.8 million.
Finance expenses
Finance expenses decreased from R22.0 million in fiscal 2011 to R17.7 million in fiscal 2012. The decrease was mainly
attributable to the unwinding of discount on financial liabilities measured at amortized cost, which decreased from R7.7 million in fiscal 2011 to R0.7 million in fiscal 2012. background image66
Income tax
The net tax charge of R8.0 million for fiscal 2012 comprises a current taxation charge of R12.5 million, a deferred tax
credit of R9.0 million and secondary tax on companies amounting to R4.5 million. This compares to a net tax charge of R32.2 million for fiscal 2011, which comprises a current taxation charge of R1.2 million, a deferred tax charge of R25.9 millionand secondary tax on companies amounting to R5.1 million. The year-on-year decrease in the net tax charge was mainly due to recognition of a R26.9 million deferred tax asset attributable to Ergo Mining for tax losses previously not recognized.
5B. LIQUIDITY AND CAPITAL RESOURCES
Cash flows from operating activities

Net cash of R502.3 million (fiscal 2012: R621.2 million and fiscal 2011: R324.0 million) was generated by operating
activities for fiscal 2013. During fiscal 2013, the net working capital movement represented an outflow of cash of R42.2 million,compared to an inflow of R63.5 million in fiscal 2012 and an outflow of R3.3 million in fiscal 2011. Cash generated from operatingactivities decreased largely due to the disposal of Blyvoor on June 1, 2012, which represented R137.1 million of the cash generated from operating activities in fiscal 2012. Cash generated from operating activities in fiscal 2012 increased largely due to the 36% increase in the average rand gold price, which resulted in a significant rise in the group’s revenue.
Cash flows from investing activities
Net cash utilized by investing activities amounted to R429.4 million in fiscal 2013 compared to R413.3 million in fiscal
2012 and R335.2 million in fiscal 2011.
In fiscal 2013, cash utilized by investing activities mainly consisted of R382.4 million in additions to property, plant and
equipment, R58.3 million in acquisition of investments and R22.5 million spent on environmental rehabilitation payments. In fiscal 2012, cash utilized by investing activities mainly consisted of R333.2 million in additions to property, plant and equipment, R63.2 million in acquisitions of investments, and R19.8 million spent on environmental rehabilitation payments. In fiscal 2011, cash utilized by investing activities mainly consisted of R317.3 million in additions to property, plant and equipment, of which R176.8 million related to the Crown/Ergo pipeline project. In addition, R22.6 million was spent on environmental trust funds and rehabilitation payments.
Total capital expenditure (cash) for fiscal 2013 was R382.4 million. Capital expenditure was predominantly on the Flotation
and fine-grind project, Ore Reserve development, new infrastructure and new mining equipment at our operations. Significant capital projects for fiscal 2013 included:
· Ergo spent R261.5 million on the flotation and fine-grind project, R11.7 million on the Brakpan tailings facility, R20.5million on the Cason high grade plant, R30.4 million on the Angelo Pan reclamation and pipeline, R26.3 million oninfrastructure upgrades equipment, and R5.5 million on other equipment.  · The corporate head office had capital expenditure amounting to R13.5 million relating to the exploration in Zimbabwe.
Total capital expenditure (cash) for fiscal 2012 was R333.2 million. Capital expenditure was predominantly on the
Crown/Ergo pipeline project, Ore Reserve development, new infrastructure and new mining equipment at our operations. Significantcapital projects for fiscal 2012 included:
· Ergo spent R33.9 million on the Crown/Ergo pipeline project, R50.7 million on the extension of the Brakpan tailingsfacility, R15.5 million on the refurbishment of the Ergo plant, R38.5 million on the new floatation and fine-grind project,R49.0 million on infrastructure upgrades and equipment, R14.2 million on the tailings facilities and R16.1 million toreplace old equipment and acquire new equipment. · Blyvoor for opening up and development amounting to R50.3 million, equipment replacement amounting to R23.3 millionand R9.3 million for other equipment and the tailings facilities. background image67
Total capital expenditure (cash) for fiscal 2011 was R317.3 million. Capital expenditure was predominantly on the
Crown/Ergo pipeline project, Ore Reserve development, new infrastructure and new mining equipment at our operations. Significantcapital projects for fiscal 2011 included:
· Ergo for construction, long-lead items relating to the Crown/Ergo pipeline project amounting to R119.7 million,construction, commissioning and refurbishment of the second CIL circuit amounting to R29.4 million, expansion of thetailing complex amounting to R27.7 million and for tailings deposition site maintenance R27.9 million. · Blyvoor for opening up and development amounting to R57.2 million, equipment replacement amounting to R25.3 millionand R13.2 million for other equipment and the tailings facilities.

We anticipate decreasing our capital expenditure in fiscal 2014 by about 58% compared to fiscal 2013. We expect to
incur R150.7 million on capital expenditure for mining equipment, upgrading of current metallurgical plants and tailings facilities as follows:
· Ergo – R148.8 million; and · Other – R1.9 million.
Cash flows from financing activities
Net cash inflow from financing activities was R5.7 million in fiscal 2013 compared to a net cash outflow of R168.6 million
in fiscal 2012 and the net cash inflow of R81.3 million in fiscal 2011.
During fiscal 2013, the net cash inflow consisted of R163.3 million raised through a Domestic Medium Term Note Program,
which has been offset by R30.7 million repayments of loans and borrowings, R24.1 million share option buy-out and a dividend payment of R103.1 million.
During fiscal 2012, the net cash outflow consisted of R96.2 million for repayments of loans and borrowings, R58.2 million
for the acquisition of treasury shares and a dividend payment of R28.9 million, which were offset by proceeds of R13.5 million ondisposal of treasury shares.
During fiscal 2011, the net cash inflow consisted of R108.0 million raised through a Domestic Medium Term Note Program,
which had been offset by an R8.3 million repayment of borrowings and a dividend payment of R19.2 million.
Cash and cash equivalents

Cash and cash equivalents as at June 30, 2013 amounted to R377.2 million compared to R298.5 million in fiscal 2012 and
R259.1 million in fiscal 2011. This included $0.6 million as at June 30, 2013 compared to $1.1 million in fiscal 2012 and $2.5 million in fiscal 2011, the remainder of the cash and cash equivalent balances were denominated in South African rand. Surplus cash is held in low-risk, high interest bearing products with various large financial institutions.
Borrowings and funding

Borrowing and funding requirements are not seasonal and there are no legal or economic restrictions on the transfer of funds
from subsidiaries.
Our external sources of capital include the issuance of debt, bank borrowings, loan notes and the issuance of equity
securities, which include the following:
On October 1, 2010 EMO established a R500 million Domestic Medium Term Note Program, or DMTN Program, under
which it could from time to time issue notes. On October 1, 2010, EMO issued R108 million in notes under the DMTN Program and maturity dates of 12 and 24 months from the date of issue and interest set at the three month JIBAR rate plus a margin rangingfrom 4% to 5% per annum. The loan notes with a 12 month maturity, amounting to R78.0 million, were repaid on October 3, 2011. The remaining loan notes with a 24 month maturity, amounting to R30.0 million, were repaid on October 3, 2012. The EMO DMTN Program was cancelled and has been replaced by the DRDGOLD DMTN Program below.
On July 2, 2012, DRDGOLD established a R2.0 billion DMTN Program under which it may from time to time issue
notes. This DMTN Program replaces the DMTN Program established by EMO on October 1, 2010. In July and September 2012, DRDGOLD issued R165 million in notes under the DMTN Program and maturity dates of 12, 24 and 36 months from the date of issue and bearing interest at the three month JIBAR rate plus a margin ranging from 4% to 5% per annum. The loan notes with a 12 month maturity, amounting to R54.0 million, are repayable on September 15, 2013. The remaining loan notes with a 24 and 36 month maturity, amounting to R66.0 million and R45.0 million, respectively, are repayable on July 3, 2014 and July 3, 2015, respectively. background image68
Anticipated funding requirements and sources

At June 30, 2013, we had cash and cash equivalents of R377.2 million, and positive working capital (defined as current
assets less current liabilities) of R359.1 million, compared to cash and cash equivalents of R298.5 million and positive workingcapital of R209.7 million at June 30, 2012 and cash and cash equivalents of R259.1 million and positive working capital of R100.0 million at June 30, 2011. At September 30, 2013, our cash and cash equivalents were R331.3 million.

Our management believes that existing cash resources, net cash generated from operations and the availability of
negotiated funding facilities will be sufficient to meet our anticipated commitments for fiscal 2014 as described above.

Our estimated working capital, capital expenditure and other funding commitments, as well as our sources of liquidity,
would be adversely affected if:
· our operations fail to generate forecasted net cash flows from operations; ·there is an adverse variation in the price of gold or foreign currency exchange rates in relation to the US dollar,particularly with respect to the rand; or ·our operating results or financial condition are adversely affected by the uncertainties and variables facing our businessdiscussed under Item 5A.: “Operating Results” or the risk factors described in Item 3D.: “Risk Factors.”

In such circumstances, we could have insufficient capital to meet our current obligations in the normal course of
business, which would have an adverse impact on our financial position and our ability to continue operating as a going concern.We would need to reassess our operations, consider further restructuring and/or obtain additional debt or equity funding. Therecan be no assurance that we will obtain this additional or any other funding on acceptable terms or at all.
5C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.

Currently and for the last three years the costs associated with our research and development is not significant and we have
no registered patents or licenses.
5D. TREND INFORMATION

During the first quarter of fiscal 2014, we produced 33,597 ounces at average cash cost of R373,433 per kilogram from our
operations. Gold production from our operations for the second quarter of fiscal 2014 is expected to be in line with the first quarterresults. Cash operating costs for the second quarter of fiscal 2014 are expected to be slightly lower due to winter tariffs for electricity applying for two months of the first quarter of fiscal 2014.

For the full year fiscal 2014, we are expecting gold production from our operations of 140,000 to 150,000 ounces at cash
operating costs of approximately R350,000 per kilogram, based on an exchange rate assumption of approximately $1.00/R10.04. Ourability to meet the full year’s production target could be impacted by, amongst other factors, lower grades, failure to achieve the targets set at Ergo and failure to timely complete the flotation and fine-grind project. We are also subject to cost pressures due to above inflation increases in labor costs, electricity and water prices; increases in crude oil, steel, unforeseen changes in ore grades and recoveries; unexpected changes in the quality or quantity of reserves; technical production issues; environmental and industrialaccidents; gold theft; environmental factors; and pollution, which could adversely impact the cash operating costs for fiscal 2014.
5E. OFF-BALANCE SHEET ARRANGEMENTS
The Company does not engage in off-balance sheet financing activities, and does not have any off-balance sheet debt
obligations, unconsolidated special purposes entities or unconsolidated affiliates. background image69
5F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS

Estimated and actual payments due by period
Total
Less than
1 year
Between
1-3 years
Between
3-5 years
More than 5
years
R’000
R’000
R’000
R’000
R’000
Loan notes (including interest)
  .............................................
188,841
28,142
160,699 -
-
Purchase obligations – contracted capital expenditure
1
........
12,460
12,460
- -
-
Environmental rehabilitation, reclamation and closure costs
2
....................................................................................
524,322
24,570
- 176,592
323,160
Operating leases
  ..................................................................
3,429
1,648
1,781 -
-
Total contractual cash obligations
  .................................
729,052
66,820
162,480176,592
323,160
5G. SAFE
HARBOR

See “Special Note regarding Forward-Looking Statements.”
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
6A. DIRECTORS AND SENIOR MANAGEMENT
Directors and Executive Officers

Our board of directors may consist of not less than four and not more than twenty directors. As of June 30, 2013 and as of
June 30, 2012, our board consisted of six directors.

In accordance with JSE listing requirements and our Memorandum of Incorporation, or MOI, one third of the directors
comprising the board of directors, on a rotating basis, are subject to re-election at each annual general shareholders’ meeting.Additionally, all directors are subject to election at the first annual general meeting following their appointment. Retiring directors normally make themselves available for re-election.

The address of each of our Executive Directors and Non-Executive Directors is the address of our principal executive
offices.
Executive Directors
Daniël Johannes Pretorius (46) Chief Executive Officer. Mr. D.J. Pretorius was appointed as Chief Executive Officer
Designate on August 21, 2008. On January 1, 2009 he succeeded Mr. John William Cornelius Sayers as Chief Executive Officer. Mr.Pretorius holds a B Proc, LLB degree and was appointed Group Legal counsel for the Company in September 2004, he was appointed as Chief Executive Officer of Ergo Mining Operations in July 2006. He has 20 years of experience in the mining industry.

Craig Clinton Barnes (43) Chief Financial Officer. Mr. C.C. Barnes joined the Company in August 2004 as Group Financial
Accountant. A Chartered Accountant, he has a B Com degree from the University of the Witwatersrand, or Wits University, and a BCom Honors degree from the University of South Africa, or Unisa. Prior to joining the Company, he was head of financial reportingfor Liberty Group Limited and he has over 19 years financial experience. He was appointed as Chief Financial Officer of Ergo Mining Operations in July 2006 and as Chief Financial Officer of DRDGOLD in May 2008. Mr. C.C. Barnes has resigned as executive director and Chief Financial Officer with effect January 1, 2014. The Company is in the process of selecting its new Chief Financial Officer and an appropriate announcement will be made when the process is finalized.

1
Represents planned capital expenditure for which contractual obligations exist.
2
Operations of gold mining companies are subject to extensive environmental regulations in the various jurisdictions in which they operate. These
regulations establish certain conditions on the conduct of our operations. Pursuant to environmental regulations, we are also obliged to close our operations and reclaim and rehabilitate the lands upon which we have conducted our mining and gold recovery operations. The estimated closure costs at existing operating mines and mines in various stages of closure are reflected in this table. For more information on environmental rehabilitation obligations, see Item 4D.: “Property, Plant and Equipment” and Note 17 “Provision for environmental rehabilitation, reclamation and closure costs” under Item 18.: “Financial Statements”. background image70
Non-Executive Directors

Geoffrey Charles Campbell (52). Mr. G.C. Campbell was appointed as Non-Executive Director in 2002, as a Senior
Independent Non-Executive Director in December 2003 and as Non-Executive Chairman in October 2005. A qualified geologist, he has worked on gold mines in Wales and Canada. He then spent 15 years first as a stockbroker and afterwards as a fund manager, during which time he managed the Merrill Lynch Investment Manager’s Gold and General Fund, one of the largest gold mining investment funds. He was also Research Director for Merrill Lynch Investment Managers. Mr. G.C. Campbell is also a director of Oxford Abstracts.

Robert Peter Hume (73). Mr. R.P. Hume was appointed as a Non-Executive Director in 2001. He has 43 years experience in
the field of auditing, including 18 years as a partner in the East London (South Africa) office of KPMG. Since retiring from KPMG in 1999, he has been an Investment Manager at Nvest Securities Proprietary Limited (formerly Sasfin Frankel Pollak) in East London.

James Turk (66). Mr. J. Turk was appointed a Non-Executive Director in October 2004. He is the founder and a director of
GoldMoney Network Limited, formerly G.M. Network Limited (also known as GoldMoney.com), the operator of a digital gold currency payment system. Since graduating from George Washington University with a BA degree in International Economics in 1969, he has specialized in international banking, finance and investments. After starting his career with Chase Manhattan Bank (now J.P. Morgan Chase) he joined RTB Inc., a private investment and trading company of a prominent precious metals trader in 1980. Hemoved to the United Arab Emirates in 1983 as Manager of the Commodity Department of the Abu Dhabi Investment Authority. Since resigning from this position in 1987, he has written frequently on money and banking.
Edmund Jeneker (51). Mr. E.A. Jeneker (IEDP (Wits), M.Inst.D., SAIPA,) was appointed a Non-Executive Director on
November 1, 2007. He trained as an accountant and has over 22 years’ experience in finance, taxation, business strategy and general management at Grant Thornton, SwissReSA, World Bank Competitiveness Fund and Deloitte. He is active in community development and serves as a member of the Provincial Development Commission of the Western Cape Provincial Government. He currently holds the position of Managing Director – Absa AllPay Consolidated Investment Holdings at Absa Group Limited.
Senior Management

Wilhelm Jacobus Schoeman (39)Executive Officer Business Development. Mr. W.J. Schoeman (Dip Analytical Chemistry,
BTech Analytical Chemistry) joined DRDGOLD on October 1, 2011 to focus on expanding the group’s surface retreatment business and extracting maximum value from existing resources. He also has a chief executive role at Western Utilities (which recently listed on the JSE AltX as Mine Restoration Investments).

David Johannes Botes (56)Group Risk Manager. Mr. D.J. Botes (Dip Comm, HDip Tax) joined DRDGOLD on
September 7, 1988 as Group Financial Manager. He was appointed Group Risk Manager on February 1, 2003. He has 30 years of financial management experience.

Jacob Hendrik Dissel (55)Group Financial Manager. Mr. J.H. Dissel (B Comm Hons) joined DRDGOLD as Group
Financial Manager in October 1999. He has 30 years experience in the mining industry.

Themba John Gwebu (49) Executive Officer: Legal, Compliance and Company Secretary. Mr. T.J. Gwebu (B Iuris, LLB,
LLM) is a qualified attorney who worked as a magistrate prior to joining the Company in April 2004 as Assistant Legal Advisor. Hewas appointed to the position of Company Secretary in April 2005 and Executive Officer: Legal, Compliance and Company Secretary on January 1, 2007.
Henry Gouws (44) Managing Director: Ergo. Mr. H. Gouws graduated from Technicon Witwatersrand and obtained a
National Higher Diploma in Extraction Metallurgy in 1991. He completed a MDP in 2003 through Unisa School of Business Leadership. He was appointed Operations Manager of Crown in January 2006 and General Manager in July 2006. He was appointed to this current position with effect from October 1, 2011. He has 26 years experience in the mining industry.
Mark Burrell (51) Financial Director: Ergo. Mr. M. Burrell holds a BComm Accounting degree and completed a
Management Development Programme. Mr. M. Burrell joined DRDGOLD in 2004 on a consulting basis and later that year was appointed as Financial Manager of the Blyvooruitzicht operation. He was appointed as Financial Director of Ergo Mining in January2012 and has 15 years experience in the mining sector.

Kevin Peter Kruger (45)Technical Director: Ergo. Mr. K.P. Kruger holds a BSc degree in mechanical engineering from
Wits University and joined the Company in 1994. Previously the Engineering Manager at the Company’s North West Operations and Managing Director at Chizim Gold, he was appointed to his current position with effect from September 1, 2013.
Charles Methley Symons (59)Chief Operating Officer. Mr. C.M. Symons commenced his career in the mining industry in
February 1977 and joined Crown in January 1986 where he was appointed General Manager in 1995. He holds a Masters degree in Business Leadership and a B Comm degree from Unisa, and he also has a National Diploma in Extractive Metallurgy. He was appointed Executive Officer: Surface Operations on January 1, 2008, Executive Officer: Operations on May 11, 2010 and Chief Operating Officer with effect from October 1, 2011. background image71
Martin Bruce Ebell (55)Manager Metallurgical Technical Services. Mr. M.B. Ebell joined the Company in 2008 as
Manager Metallurgical Technical Services. He was previously employed by Bateman Minerals and Metals, Alex Steward Assayers, Dowding Reynard and Associates, Millsell/Henry Gould and Rand Mines, and has 32 years of experience in the field of extractive metallurgy in various managerial, consulting and project engineering positions. He is registered professional engineer and a member of SAIMM and MMMA and holds a MEng (MEM) USA, BSc (Eng) Minerals Processing, B Comm degrees and a MDP certificate.
Barry Gordon de Blocq (51) General Manager Corporate Services. Mr. de Blocq joined DRDGOLD in September 1998
from AngloGold, where he was Divisional Industrial Relations Manager. He holds a B Soc Sc, degree and was promoted to his current position on January 1, 2010. He has 26 years experience in the mining industry.
Reneiloe
Masemene
(32)
Senior Legal Advisor. Ms R Masemene (LLB, LLM) is a qualified attorney who joined the
Company in January 2009 as Legal Advisor. She was appointed to the position of Senior Legal Advisor in October 2011 and Prescribed Officer of Ergo on June 29, 2012.
There are no family relationships between any of our executive officers or directors. There are no arrangements or
understandings between any of our directors or executive officers and any other person by which any of our directors or executive officers has been so elected or appointed.
6B. COMPENSATION

Our MOI provide that the directors' fees should be determined from time to time in a general meeting or by a quorum of
Non-Executive Directors. The total amount of directors' remuneration paid and or accrued for the year ended June 30, 2013 was R21.6 million. Non-Executive Directors receive the following fees:
· Base fee as Non-Executive Chairman of R1,212,892 per annum; · Base fee as Non-Executive Directors of R539,063 per annum; · Annual fee for Audit Committee Chairman of R53,908; · Annual fee for Audit Committee member of R26,954; · Annual fee for Nominations Committee Chairman of R20,216; · Annual fee for Nominations Committee member of R10,108; · Annual fee for the chairman of Remuneration Committee, Risk Committee, and Social and Ethics Committee of R40,430; · Annual fee for members of Remuneration Committee, Risk Committee and Social and Ethics Committee of R20,216 each; · Daily fee of R20,216 and hourly rate of R2,695;  · Half-day fee for participating by telephone in special board meetings; and · The Chairman of the board to receive committee fees.

Non-executive directors’ fees are adjusted annually on the basis of the consumer price index. background image72
The following table sets forth the compensation for our directors and prescribed officers for the year ended June 30, 2013:
Directors
Basic
salary/board
fees
(R'000)
Retirement fund
contributions/
bonus and
performance
related
payments
(R'000)
Share option
scheme
gains
(R'000)
Total
(R'000)
ExecutiveD.J. Pretorius .....................................................
4,664
4,238
2,423
11,325
C.C. Barnes ........................................................
3,367
931
2,505
6,803
Subtotal
  ...........................................................
8,031
5,169
4,92818,128
Non-ExecutiveG.C. Campbell ...................................................
1,348
-
4
1,352
R. Hume
  ............................................................
703
-
5
708
J. Turk
  ..............................................................
647
-
-
647
E.A. Jeneker
729
-
-
729
Subtotal
  ...........................................................
3,427
-
93,436
Prescribed officers
1
C.M. Symons .....................................................
2,209
1,571
2,043
5,823
T.J. Gwebu.................................................... W.J. Schoeman...............................................
2,0752,830
1,1811,340
1,132
389
4,3884,559
Subtotal
  ............................................................
7,114
4,092
3,56414,770
Total ..................................................................
18,572
9,261
8,50136,334
See also Item 6E.: “Share Ownership” for details of share options held by directors.
Compensation of senior management
Our senior management comprises of executive directors, prescribed officers and executive officers. Under the JSE
Listing Rules we are not required to, and we do not otherwise, disclose compensation paid to individual senior managers other than executive directors, non-executive directors and prescribed officers. However, the aggregate compensation paid to senior management, excluding compensation paid to Executive Directors, in fiscal 2013 was R26.4 million (fiscal 2012: R22.4 million), representing eleven executive officers in fiscal 2013 and nine executive officers in fiscal 2012.

Bonuses or incentives are paid based upon performance against predetermined key performance indicators. Should an
Executive Director meet all the targets set in terms of such predetermined key performance indicators, he will be entitled to a bonus of up to 50%, 75% or 100% of his remuneration package, depending on his particular agreement. Should an Executive Director not meet all the targets set in terms of the predetermined key performance indicators, he will be entitled to a lesser bonus as determined by the Remuneration Committee in its discretion.
Service Agreements

Service contracts negotiated with each executive and non-executive director incorporate their terms and conditions of
employment and are approved by our Remuneration Committee.

The Company’s executive directors, Mr. D.J. Pretorius and Mr. C.C. Barnes, entered into agreements of employment
with us, on January 1, 2009 and May 5, 2008, respectively. Mr. C.C. Barnes’ service contract has been renewed for another threeyears, effective from May 5, 2011, by our Remuneration Committee at a meeting held in August 2011. Mr. C.C. Barnes has resigned with effect of January 1, 2014. Mr. D.J. Pretorius’s service contract has been renewed for another three years, effective January 1, 2012, by our Remuneration Committee at a meeting held in February 2012. These agreements regulate the employment relationship with Messrs. D.J. Pretorius and C.C. Barnes.

1
The Companies Act, 2008 (Act 71 of 2008), under section 30, requires the remuneration of prescribed officers, as defined in regulation 38 of
Company Regulations 2008, to be disclosed with that of directors of the Company. A person is a prescribed officer if they have general executive authority over the company, general responsibility for the financial management or management of legal affairs, general managerial authority over the operations of the company or directly or indirectly exercise or significantly influence the exercise of control over the general management and administration of the whole or a significant portion of the business and activities of the company. background image73
Mr. D.J. Pretorius receives from us a remuneration package of R4.7 million per annum. Mr. D.J. Pretorius is eligible
under his employment agreement, for an incentive bonus of up to 100% of his annual remuneration package in respect of one bonus cycle per annum over the duration of his appointment, on condition that DRDGOLD achieves certain key performance indicators. In addition, Mr. D.J. Pretorius’ employment agreement requires DRDGOLD to issue to Mr. D.J. Pretorius 100,000 ordinary DRDGOLD shares as a mining right conversion bonus. DRDGOLD issued 50,000 of these shares on the signing of the agreement, while the remaining tranche of the conversion of mining rights bonus of 50,000 shares will become due on the date that the conversion of mining rights of DRDGOLD’s South African operations is completed.
Mr. C.C. Barnes receives from us a remuneration package of R3.4 million per annum. Mr. C.C. Barnes is eligible under
his employment agreement, for an incentive bonus of up to 75% of his annual remuneration package in respect of one bonus cycle per annum over the duration of his appointment, on condition that DRDGOLD achieves certain key performance indicators. As a further consideration for agreeing to remain in the employment of the Company, the Company issues Mr. C.C. Barnes with, up to 50% of his annual remuneration package, in share options in DRDGOLD Limited, calculated in accordance with DRDGOLD’s share option scheme rules and principals, on an annual basis.

Each service agreement with our directors provides for the provision of benefits to the director where the agreement is
terminated by us in the case of our executive officers, except where terminated as a result of certain action on the part of the director, or upon the director reaching a certain age, or by the director upon the occurrence of a change of control of us. A termination of a director's employment upon the occurrence of a change of control of us is referred to as an “eligible termination.” Upon an eligible termination, the director is entitled to receive a payment equal to at least one year's salary or fees, but not more than three years salary for Executive Directors or two years fees for Non-Executive Directors, depending on the period of time that the director has been employed.

Messrs. R.P. Hume, J. Turk and E.A. Jeneker each have service agreements which run for fixed periods until
September 30, 2014, October 31, 2014, and October 31, 2013 respectively. After expiration of the initial two year periods, the agreements continue indefinitely until terminated by either party on not less than three months prior written notice. Mr. G.C. Campbell has a service agreement which continues indefinitely until terminated by either party on not less than three months priorwritten notice.

The Company does not administer any pension, retirement or any other similar scheme in which the directors receive a
benefit.
6C. BOARD PRACTICES
Board of Directors
As at September 30, 2013, the board of directors comprises two Executive Directors (Mr. D.J. Pretorius and
Mr. C.C. Barnes), and four Non-Executive Directors (Messrs. G.C. Campbell, R.P. Hume, J. Turk and E.A. Jeneker). The Non-Executive Directors are independent under the New York Stock Exchange, or NYSE, requirements (as affirmatively determined by the Board of Directors) and the South African King III Report, or the King III Report.
In accordance with the King III Report on corporate governance, as encompassed in the JSE Listings Requirements, and
in accordance with the United Kingdom Combined Code, the responsibilities of Chairman and Chief Executive Officer are separate. Mr. G.C. Campbell is the Non-Executive Chairman, Mr. D.J. Pretorius is the Chief Executive Officer and Mr. C.C. Barnes is the Chief Financial Officer. The board has established a nominations committee, and it is our policy for details of aprospective candidate to be distributed to all directors for formal consideration at a full meeting of the board. A prospectivecandidate would be invited to attend a meeting and be interviewed before any decision is taken. In compliance with the NYSE rules a majority of independent directors will select or recommend director nominees.
The board’s main roles are to create value for shareholders, to provide leadership of the Company, to approve the
Company’s strategic objectives and to ensure that the necessary financial and other resources are made available to management to enable them to meet those objectives. The board retains full and effective control over the Company, meeting on a quarterly basis with additional ad hoc meetings being arranged when necessary, to review strategy and planning and operational and financial performance. The board further authorizes acquisitions and disposals, major capital expenditure, stakeholder communication and other material matters reserved for its consideration and decision under its terms of reference. The board also approves the annual budgets for the various operational units.
The board is responsible for monitoring the activities of executive management within the company and ensuring that
decisions on material matters are referred to the board. The board approves all the terms of reference for the various subcommittees of the board, including special committees tasked to deal with specific issues. Only the executive directors are involved with the day-to-day management of the Company. background image74
To assist new directors, an induction program has been established by the Company, which includes background
materials, meetings with senior management, presentations by the Company’s advisors and site visits. The directors are assessedannually, both individually and as a board, as part of an evaluation process, which is driven by an independent consultant. In addition, the Remuneration and Nominations Committees formally evaluate the executive directors on an annual basis, based on objective criteria.
All directors, in accordance with the Company’s MOI, are subject to retirement by rotation and re-election by
shareholders. In addition, all directors are subject to election by shareholders at the first annual general meeting following their appointment by directors. The appointment of new directors is approved by the board as a whole. The names of the directors submitted for re-election are accompanied by sufficient biographical details in the notice of the forthcoming annual general meeting to enable shareholders to make an informed decision in respect of their re-election.
All directors have access to the advice and services of the Company Secretary, who is responsible to the board for
ensuring compliance with procedures and regulations of a statutory nature. Directors are entitled to seek independent professional advice concerning the affairs of the Company at the Company’s expense, should they believe that course of action would be in thebest interest of the Company.
Two of the Non-Executive Directors (Messrs. G.C. Campbell and R.P. Hume) had share options under the Company’s
share option scheme of which the remaining balance were bought out during the year by the Company through a general share option buy-out. We do not believe that this compromised their independence. No new share options have been issued to Non-Executive Directors since June 2005.
Board meetings are held quarterly in South Africa and abroad. The structure and timing of the Company’s board
meetings, which are scheduled over two or three days, allows adequate time for the Non-Executive Directors to interact without the presence of the Executive Directors. The board meetings include the meeting of the Risk Committee, Audit Committee, Remuneration Committee, Nominations Committee and Social and Ethics Committee which act as subcommittees to the board. Each subcommittee is chaired by one of the Independent Non-Executive Directors, except for the Risk Committee which is chaired by the Chief Executive Officer, each of which provides a formal report back to the board. Each subcommittee meets for approximately half a day. Certain senior members of staff are invited to attend the subcommittee meetings.
The board sets the standards and values of the Company and much of this has been embodied in the Company’s Code of
Ethics and Conduct, a copy of which is available on our website at www.drdgold.com. The Code of Ethics and Conduct applies to all directors, officers and employees, including the principal executive, financial and accounting officers, in accordance withSection 406 of the US Sarbanes-Oxley Act of 2002, the related US securities laws and the NYSE rules. The Code contains provisions under which employees can report violations of Company policy or any applicable law, rule or regulation, including US securities laws.
A description of the significant ways in which our corporate governance practices differ from practices followed by U.S.
companies listed on the NYSE can be found in Item 16G. “Corporate Governance”.
Directors' Terms of Service

The following table shows the date of appointment, expiration of term and number of years of service with us of each of the
directors as at June 30, 2013:
Director
Title
Year first appointed
Term of
current
office
Unexpired
term of
current office
G.C. Campbell
Non-Executive Director
2002
2 years
4 months
D.J. Pretorius
1

Chief Executive Officer
2008
3 years
18 months
C.C. Barnes
2
Chief
Financial
Officer
2008
3 years
10 months
R.P. Hume
Non-Executive Director
2001
2 years
15 months
E.A. Jeneker
Non-Executive Director
2007
2 years
4 months
J. Turk
Non-Executive Director
2004
2 years
16 months
1Mr. D.J. Pretorius’s service contract has been renewed for another three years, effective January 1, 2012, in the Remuneration Committee meeting held in
February 2012.
2
Mr. C.C. Barnes’ service contract has been renewed for another three years, effective from May 5, 2011 in the Remuneration Committee meeting held in August 2011.
Mr. C.C. Barnes resigned as Chief Financial Officer with effect January 1, 2014. background image75
Executive Committee

As at June 30, 2013 and September 30, 2013, the Executive Committee consisted of Mr. D.J. Pretorius (Chairman), Mr.
C.C. Barnes, Mr. C.M. Symons, Mr W.J. Schoeman and Mr. T.J. Gwebu.
The Executive Committee meets on a weekly basis to review current operations, develop strategy and policy proposals for
consideration by the board of directors. Members of the Executive Committee, who are unable to attend the meetings in person, areable to participate via teleconference facilities, to allow participation in the discussion and conclusions reached.
Board Committees
The board has established a number of standing committees to enable it to properly discharge its duties and
responsibilities and to effectively fulfill its decision-making process. Each committee acts within written terms of reference which have been approved by the board and under which specific functions of the board are delegated. The terms of reference for all committees can be obtained by application to the Company Secretary at the Company’s registered office. Each committee has defined purposes, membership requirements, duties and reporting procedures. Minutes of the meetings of these committees are circulated to the members of the committees and made available to the board. Remuneration of Non-Executive Directors for their services on the committees concerned is determined by the board. The committees are subject to regular evaluation by the board with respect to their performance and effectiveness.
The following information reflects the composition and activities of these committees.
Committees of the Board of Directors
Remuneration Committee

As at June 30, 2013 and September 30, 2013, the Remuneration Committee consisted of Mr. E.A. Jeneker (Chairman), Mr.
G.C. Campbell, Mr. R.P. Hume and Mr. J. Turk.
The Remuneration Committee, which is comprised of Non-Executive Directors, has been appointed by the board of
directors. The committee meets quarterly, but may meet more often on an ad hoc basis if required. The Remuneration Committee is governed by its terms of reference and is responsible for approving the remuneration policies of the Company, the terms and conditions of employment, and the eligibility and performance measures of the DRDGOLD Phantom Share Scheme and DRDGOLD (1996) Share Option Scheme applicable to executive directors and senior management.
The committee’s objective is to evaluate and recommend to the board competitive packages which will attract and retain
executives of the highest caliber and encourage and reward superior performance. The committee also aims to ensure that criteriaare in place to measure individual performance. The committee approves the performance-based bonuses of the executive directors based on such criteria. The General Manager Corporate Services provides the committee with access to comparative industry surveys, which assist in formulating remuneration policies. As and when required the committee may also engage the services of independent consultants to evaluate and review remuneration policies and related issues and brief members on pertinent issues. The committee has in the past year engaged the services of such consultants to review the employment contractsof the executive directors.
The remuneration policy, relating to the remuneration of directors and senior executives, is based on a reward system
comprising four principal elements:
· Basic remuneration, as benchmarked against industry norms; · Bonuses or incentives, which are measured against agreed outcomes or Key Performance Indicators, or KPIs; · Short-term rewards for exceptional performance; and · Long-term retention of key employees based on scarcity of skill and strategic value, using phantom share options grantedunder the DRDGOLD Phantom Share Scheme.
A copy of the policy is available by application to the Company Secretary at the Company’s registered office.
Nominations Committee

The board resolved to separate the Nominations Committee from the Remunerations Committee. The Nominations
Committee is chaired by the Chairman of the board, Mr. G.C. Campbell. The terms of reference were approved in August 2008. Its duties include: background image76
· making recommendations to the board on the appointment of new Executive and Non-Executive directors, includingmaking recommendations on the composition of the board generally and the balance between Executive and Non-Executive directors appointed to the board; · regular reviewing of the board structure, size and composition and making recommendations to the board with regard toany adjustments that are deemed necessary; · identifying and nominating candidates for the approval of the board to fill board vacancies as and when they arise as wellas putting in place plans for succession, in particular for the Chairman and Chief Executive Officer; and · making recommendations on directors who are retiring by rotation to be put forward for re-election.
As at June 30, 2013 and September 30, 2013, the members of the Nominations Committee consisted of Mr. G.C. Campbell
(Chairman) and Mr. R.P. Hume.
Audit and Risk Committees
On February 11, 2005, the Audit and Risk Committees started conducting joint meetings in respect of the quarterly
meetings. The members meet and the business of each committee is handled in joint deliberations taking place on the issues raised. The Audit Committee is chaired by Mr. R.P. Hume and the Risk Committee by Mr. D.J. Pretorius. The reason for the joint sittings is that there is a great deal of overlap between the financial risks discussed at Audit Committee level and at Risk Committee level. The joint sittings of the Committees bring about better disclosure and ensure that the Company conforms more closely to the process prescribed by the US Sarbanes-Oxley Act of 2002.
Audit Committee

As at June 30, 2013 and September 30, 2013, the Audit Committee consisted of Mr. R.P. Hume (Chairman), Mr. J. Turk and
Mr. E.A. Jeneker.
The Audit Committee is comprised solely of Non-Executive Directors, all of whom are independent. See Item 16G.:
“Corporate Governance”. The primary responsibilities of the Audit Committee, as set out in the Audit Committee charter, is to assist the board in carrying out its duties relating to accounting policies, internal financial control, financial reporting practices and the preparation of accurate financial reporting and financial statements in compliance with all applicable legal requirements and accounting standards. A copy of the charter is available by application to the Company Secretary at the Company’s registered office.
The Audit Committee meets quarterly with the external auditors, the Company’s internal audit practitioner, the Chief
Financial Officer and the Internal Audit and Compliance Manager to review the audit plans of the internal auditors, to ascertainthe extent to which the scope of the internal audits can be relied upon to detect weaknesses in the internal controls and to review the annual and interim financial statements prior to approval by the board. The Audit Committee reviews our annual results, theeffectiveness of our system of internal financial controls, internal audit procedures and legal and regulatory compliance. The committee also reviews the scope of work carried out by our internal auditors and holds regular discussions with the external auditors and internal auditors.
The committee appoints, re-appoints and removes the external auditors and approves the remuneration and terms of
engagement of the external auditors. The committee is required to pre-approve, and has pre-approved, non-audit services providedby our external auditors. The Company’s external audit function is currently being undertaken by KPMG Inc.
The Company’s internal and external auditors have unrestricted access to the chairman of the Audit Committee and,
where necessary, to the Chairman of the board and Chief Executive Officer. All important findings arising from audit proceduresare brought to the attention of the committee and, if necessary, to the board.
Risk Committee

As at June 30, 2013 and September 30, 2013, the Risk Committee consisted of Mr. D.J. Pretorius (Chairman), Mr. J. Turk,
Mr. G.C. Campbell, Mr. E.A. Jeneker, Mr. R.P. Hume and Mr. C.C. Barnes.
The Risk Committee was established in January 2004 and currently comprises four Non-Executive Directors and two
Executive Directors. Its overall objective is to assist the board in its duties relating to risk management and control responsibilities, assurance issues, health, safety and environmental compliance, and the monitoring and reporting of all these matters. The Risk Committee facilitates communication between the board, the Audit Committee, internal auditors and other parties engaged in risk management activities. The terms of reference of the Risk Committee can be obtained by application to the Company Secretary at the Company’s registered office. background image77
The Risk Committee’s role is to ensure that: · an effective risk management program is implemented and maintained; · risk management awareness is promoted amongst all employees;  · risk programs (financing/insurance) adequately protect the Company against catastrophic risks;  · regular risk assessments are conducted;  · total cost of risk in the long term is reduced;  · the protection of the Group's assets is promoted throughout the Group; · the health and safety and well being of all stakeholders is improved; and · the Company’s activities are carried out in such a way so as to ensure the safety and health of employees.
The Risk Committee meets quarterly and reports to the board. Additional ad hoc meetings may be arranged as and when
required. Certain members of executive management are occasionally invited to attend Risk Committee meetings, such as the Internal Audit and Compliance Manager, the Group Risk Manager, the Group Financial Manager, the Operational Managers and the Group Legal Counsel.
The system to manage risk involves all significant business and operational risks which could undermine the
achievement of business objectives and undermine the preservation of shareholder value. The significant risks facing the Group including those at operations have been identified and have been included in Item 3D.: “Risk factors.” Individuals have been appointed to address each risk and the results thereof are reviewed by senior management through regular risk meetings. The aimof the internal control systems is for management to provide reasonable assurance that the objectives will be met. In addition to the above initiatives the Group also employs third party consultants to benchmark our operations against other mining operationsthroughout South Africa and worldwide.
An important aspect of risk management is the transfer of risk to third parties to protect the Company from any major
disaster. We have embarked on a program to ensure that our major assets and potential business interruption and liability claimsare covered by group insurance policies that encompass our operations. The majority of the cover is through reputable insurancecompanies in London and continental Europe and the insurance programs are renewed on an annual basis. A cell captive insurance company has been established to enable further reduction in annual insurance premiums.
Social and Ethics Committee
As at June 30, 2013 and September 30, 2013, the Social and Ethics Committee consisted of Mr. E.A. Jeneker (Chairman),
Mr. D.J. Pretorius and Mr. C.C. Barnes.
The board, taking into account that all the group’s operations are based in South Africa and in order to achieve the triple
bottom line espoused in the King III Report and in order to reach the empowerment goal to which it is committed, establishing acommittee, the focus of which will be transformation and sustainable development. The terms of reference were approved by the board at the August 2008 meeting. The board resolved to convert the Transformation and Sustainable Development Committee into the Social and Ethics Committee which the Company is required to set up in terms of the Companies Act, 2008 of South Africa. The objectives of this committee are:
· promoting transformation within the company and the economic empowerment of previously disadvantagedcommunities, particularly within areas where the company conducts business; · striving towards achieving the goal of equality as the South African constitution and other legislation require within thecontext of the demographics of the country at all levels of the company and its subsidiaries; and · conducting business in a manner which is conducive to internationally acceptable environmental and sustainabilitystandards.
6D. EMPLOYEES
Employees

The geographic breakdown of our employees (including specialized service providers who are contracted employees
employed by third parties), was as follows at the end of each of the past three fiscal years:

Year ended June 30
2013
2012
2011
South Africa
  ..............................................................................................................................................
2,752 2,222
6,875

The total number of employees at June 30, 2013, of 2,752 comprises 1,740 specialized service providers and 1,012
employees who are directly employed by us and our subsidiary companies. As of September 30, 2013, we had 2,443 employees (including 1,441 contract employees). The increase in the number of employees in fiscal 2013 is mainly due to the introduction of the flotation and fine-grind circuit at Ergo. background image78
As of June 30, 2013, the breakdown of our employees by main categories of activity for the periods below was as follows:

Year ended June 30,
Category of Activity
2013
2012
2011
Mining - Our Employees
  ....................................................................................................................
71 30
2,719
Mining - Specialized service
  providers.................................................................................................
1,740 1,430
1,715
Engineering
  ........................................................................................................................................
427 311
1,164
Metallurgy
  .........................................................................................................................................
311
  318
687
Mineral Resources
  ..............................................................................................................................
6 10
92
Administration
  ..................................................................................................................................
129
  70
134
Environmental
  ..................................................................................................................................
7 9
71
Human Resources
  ..............................................................................................................................
50 15
245
Medical and Safety
  ............................................................................................................................
11 29
48
Total
  ................................................................................................................................................
2,752 2,222
6,875
Labor Relations

As at June 30, 2013, we employed and contracted 2,752 people in South Africa. Approximately 61% of our South African
employees are members of trade unions or employee associations. South Africa's labor relations environment remains a platform forsocial reform. The National Union of Mineworkers, or NUM, the main South African mining industry union, is influential in the tripartite alliance between the ruling African National Congress, the Congress of South African Trade Unions, or COSATU, and theSouth African Communist Party as it is the biggest affiliate of COSATU. The relationship between management and labor unions remains cordial. The DRDGOLD and NUM coordinating forum meets regularly to discuss matters pertinent to both parties at a EMO level, while operations level forums continue to deal with local matters.
In October 2013, the NUM rejected the company’s offer of a 8.0% increase for categories 4 -5 and a 7.5% increase for
categories 6 – 15 for Ergo and ERPM. The NUM also rejected the 10% increases in the living out allowances for fiscal 2013 and fiscal 2014. The NUM was granted strike certificates in respect of the two operations and strike action started with the morningshift on Tuesday, October 8, 2013.
On October 9, 2013, Ergo and ERPM signed a two year wage settlement agreement with effect from July 1, 2013, with
NUM and UASA, which provides for average annual compensation increases in year one of 10% for categories 4 – 5, 9% for categories 6 – 7 and 8% for categories 8 – 15; and in year two 8% for categories 4 – 5 and 7.5% for categories 6 – 15.
The Company is placing a greater emphasis on its Corporate Social Responsibility by becoming increasingly involved in
appropriate projects that give effect to the ideals of the Mining Charter and good corporate governance. We recognize the need for transformation and have put structures in place to address this at both management and board level.
By statute we are required to pay each employee who is dismissed for reasons based on the operational requirements of
our operations, a severance package of not less than one week’s remuneration for every completed year of service. In specific agreements with organized labor we undertook, as in the past, to pay packages equal to two weeks basic pay for every completed year of service as part of a balancing compromise with the labor unions between the high additional costs of non-financial itemsand incentive payments (which are deemed part of remuneration), and an additional one week benefit based on basic pay. These employees were provided with counseling services and the opportunity to undergo skills training to be able to find employment outside the mining industry.
AIDS represents a very serious threat to us and the gold mining industry as a whole in terms of the potential reduced
productivity and increased medical costs. The exact extent of infection in our workforce is not known at present, although it isroughly estimated by the industry that the prevalence of HIV, the virus that causes AIDS, in the South African industry is currently approximately 30% to 35%. We have several AIDS awareness campaigns in place at our operations. background image79
Safety statistics

Due to the importance of our labor force, we continuously strive to create a safe and healthy working environment. The
following are our 2013 overall safety statistics for our operations:
(Per million man hours)
Year ended June 30,
2013
2012
Lost time injury frequency rate (LTIFR)
1
...............................................................................................
4.35 15.09
Reportable incidence
1
.............................................................................................................................
1.69 4.48
Fatalities
1
................................................................................................................................................
0.00 0.05
Number of fatalities (average per month) ................................................................................................
0.00
  0.08
6E. SHARE OWNERSHIP
As of September 30, 2013, options to purchase ordinary shares held by directors were as follows:
Directors
Options at
June 30,
2012
Average
strike
price
(R)
Options
bought back
during the
year
Average
Gain on
buy
back
(R)
Options
lapsed
during
the
year
Options at
September
30,
2013
Average
Strike
price
(R)
Expiration
Dates
2



Non-ExecutiveG.C. Campbell
  .........
37,994
19.74
(29,394)
0.14
(8,600)
-
-
R.P. Hume ...............
39,157
19.93
(28,457)
0.19 (10,700)
-
-
ExecutiveC.C. Barnes .............
1,453,667
4.84
(1,219,163)
2.05
-
234,504
4.56 10/18/2015
-
11/02/2016
D.J. Pretorius ..........
1,283,486
6.19
(1,283,486)
1.89
-
-
-
Prescribed
Officers
C.M. Symons ..........
1,282,976
5.44
(1,064,626)
1.92
(6,300)
212,050
4.84 10/18/2015
-
11/02/2016
T.J. Gwebu ..............
958,158
5.01
(765,508)
1.85
-
192,650
4.68 10/18/2015
-
11/02/2016
W.J Schoeman ........
396,700
5.12
(198,350)
1.96
-
198,350
5.12 2/11/2016

Each option is representative of a right to acquire one ordinary share at a predetermined exercise price.

Closed periods apply to share trading by directors and other employees, whenever certain employees of the Company
become or could potentially become aware of material price sensitive information, such as information relating to an acquisition, quarterly results etc., which is not in the public domain. When these employees have access to this information an embargo is placed on share trading for those individuals concerned. The embargo need not involve the entire Company in the case of an acquisition and may only apply to the board of directors, executive committee, and the financial and new business teams, but inthe case of quarterly results the closed-period is group-wide.

Under the listings requirements of the JSE, we are not required to disclose, and we do not otherwise disclose or ascertain,
share ownership of individual officers in our share capital. However, to the best of our knowledge, we believe that our ordinaryshares held by executive officers, in aggregate, do not exceed one percent of the Company’s issued ordinary share capital. For details of share ownership of directors and prescribed officers see Item 7A.: “Major Shareholders.”

1
Calculated as follows: actual number of instances divided by the total number of man hours worked multiplied by one million.
2
Certain Directors hold options which expire at various times. For those directors, a range is provided indicating the earliest and latest expiration
dates. background image80
DRDGOLD (1996) Share Option Scheme, or the Scheme

We operate a securities option plan as an incentive tool for our Executive Directors and senior employees whose skills and
experience are recognized as being essential to the Company’s performance. Two of our Non-Executive Directors (Messrs. G.C. Campbell and R.P. Hume) had share options under the Scheme which has all been bought out by the Company through a general buy-out; no new share options have been issued to Non-Executive Directors since December 2004. In compliance with JSE Listing Requirements, options awarded to an individual employee are subject to a cumulative upper limit of 2.0 million options,which is lower than the previous 2% of the Company’s issued share capital. In addition, a maximum of 40.0 million options are available for utilization under the share option scheme, which is lower than the previous 15% of the issued ordinary shares. As at September 30, 2013, the number of issued and exercisable share options was approximately 0.93% of our issued ordinary share capital, representing 3.6 million share options. In November 2012 the Remuneration Committee suspended the share option scheme and approved a share buyback. A general offer was made to all participant of the Scheme to buy-back all vested share options as part of the transition to the new DRDGOLD Phantom Share Scheme. Not all share options were bought back and at June 30, 2013, 715,378 vested share options remained outstanding. The participants in the Scheme are fully taxed based on individualtax directives obtained from the South African Revenue Service on any gains realized on the exercise of share options.

The price at which an option may be  granted will be, in respect of each share which is the subject of the option, the volume
weighted average price of a share on the JSE for the seven days on which the JSE is open for trading, preceding the day on which the employee is granted the option. The allocation date will be the date when the directors approve allocation of share options. Each option remains in force for five years after the date of grant (ten years if issued prior to 2009), subject to the terms of the option plan. Options granted under a plan vest primarily according to the following schedule over a maximum of a three year period:





Percentage vested in each period
Period after the original date of the option grant
25%                                                                                                6
months
25%                                                                                                  1
year
25%                                                                                                  2
years
25%                                                                                                  3
years

Any options not exercised within five years (issued prior to 2009: ten years) from the original date of the option grant will
expire and may not thereafter be exercised. The previous bi-annual allocation of options was changed in April 2006 to an annualallocation.

Options to purchase a total of 3,655,357 ordinary shares were outstanding on June 30, 2013, of which 715,378 options to
purchase ordinary shares were currently exercisable. In fiscal 2013, a total of 37 employees and 7 ex-employees participated in the Scheme, including Executive Directors and other senior employees. The outstanding options are exercisable at purchase prices that range from R3.50 to R19.36 per share and expire five years (issued prior to 2009: ten years) from the date of issue to the participants.

In August 2012, the board of directors decided to replace the Scheme with a cash-settled phantom share scheme. The new
phantom share scheme was approved by the board of directors in October 2012. In November 2012 the Remuneration Committee suspended the Scheme and approved the share option buy back. The advantages presented by the suspension of the Scheme and shareoption buy back are inter alia:
-
avoidance of dilution of current shareholders; and
-
avoidance of short vesting periods.
DRDGOLD Phantom Share Scheme
In fiscal 2013 we established the DRDGOLD Phantom Share Scheme, The scheme, replaces the DRDGOLD (1996)
Share Option Scheme, which is part of the long-term retention strategy intended to grow the company. The phantom share scheme is operated as an incentive tool for our executive directors and senior employees whose skills and experience are recognized asbeing essential to the Company’s performance. The scheme is cash settled. In terms of the phantom share scheme rules, 50% of the phantom shares granted will be valued based on the Group meeting certain pre-determined performance criteria and the remaining 50% to defined retention periods. The maximum incentive pay-out per annum to any single employee may not exceed 75% of that employee’s gross remuneration package. The participants in the scheme are fully taxed at their marginal rate on anygains realized on the exercise of their phantom shares. background image81
The phantom share granted has a zero base value, however the number of phantom shares granted by the Remuneration
Committee is determined by the price in respect of each share which is the subject of the phantom share, the volume weighted average price of a share on the JSE for the seven days on which the JSE is open for trading, preceding the day on which the employee is granted a phantom share. The allocation date will be the date when the directors approve allocation of the phantom shares. Each phantom share remains in force until the date of vesting, subject to the terms of the scheme rules. Phantom sharesgranted under the phantom share scheme vest primarily according the following schedule over a maximum of a three year period:
Percentage vested in each period grant:




Period after the original date of grant









of the option:
Performance criteria


Retention criteria
33%
0%one
year
33%
50%two
years
33%
50%three
years
Any phantom shares not exercised on the date of vesting will expire and may not thereafter be exercised. The phantom
shares granted in the current financial year, being the first year of the phantom share scheme exists, were 3,019,549 phantom shares.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
7A. MAJOR SHAREHOLDERS

As of September 30, 2013, our issued capital consisted of:
· 385,383,767 ordinary shares of no par value; and  · 5,000,000 cumulative preference shares.

To our knowledge, we are not directly or indirectly owned or controlled by another corporation or any person or foreign
government and there are no arrangements, the operation of which may at a subsequent date result in a change in control of us.

Based on information available to us, as of September 30, 2013:
· there were 5,958 record holders of our ordinary shares in South Africa, who held approximately 121,963,206 orapproximately 31.6% of our ordinary shares; · there was one record holder of our cumulative preference shares in South Africa, who held 5,000,000 or 100% of ourcumulative preference shares; · there were no US record holders of our ordinary shares, excluding those shares which are held as part of our ADR program;and· there were 771 registered holders of our ADRs in the United States, who held approximately 175,291,256 (17,529,125ADRs) or approximately  45.5% of our ordinary shares.

The following table sets forth information regarding the beneficial ownership of our ordinary shares as of September 30,
2013 by:
· each of our directors and prescribed officers; and  · any person whom the directors are aware of as at September 30, 2013 who is interested directly or indirectly in 5% or moreof our ordinary shares. There was significant change in the percentage ownership of the major shareholders over thepreceding three years. background image82
Shares
Beneficially
Owned
Holder
Number
Percent of
outstanding
ordinary
shares
D.J. Pretorius
  ......................................................................................................................................
211,167 *
C.C. Barnes
  .........................................................................................................................................
None None
J. Turk
  ................................................................................................................................................
243,000
*
G.C. Campbell
  .....................................................................................................................................
100,000
*
R.P. Hume
  ..........................................................................................................................................
150,000
*
E.A. Jeneker
  .......................................................................................................................................
None
None
W.J. Schoeman
  ...................................................................................................................................
None None
C.M. Symons
  ......................................................................................................................................
None None
T.J. Gwebu
  ..........................................................................................................................................
None
None
Public Investment Corporation
  ..........................................................................................................
19,399,080 5.0%
Bank of New York ADRs
  ...................................................................................................................101 Barclay Street New York, NY 10011
173,998,270 45.1%
* Indicates share ownership of less than 1% of our outstanding ordinary shares.

Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment
power with respect to securities. Ordinary shares issuable pursuant to options, to the extent the options are currently exercisable or convertible within 60 days of September 30, 2013, are treated as outstanding for computing the percentage of any other person. As of September 30, 2013, we are not aware of anyone owning 5% or more of our ordinary shares other than the Bank of New York which holds 45.1% of our issued ordinary shares through our ADR program and Public Investment Corporation which holds 5.0%. Unless otherwise noted, each person or group identified possesses sole voting and investment power with respect to the shares, subject to community property laws where applicable. No shareholder has voting rights which differ from the voting rights of any other shareholder. Unless indicated otherwise, the business address of the beneficial owner is: DRDGOLD Limited, 50 Constantia Boulevard, Constantia Kloof Ext. 28, Roodepoort, 1709, South Africa.
Cumulative Preference Shares

Randgold and Exploration Company Limited, or Randgold, owns 5,000,000 (100%) of our cumulative preference shares.
Randgold's registered address is Third Floor, Sandton City Office Tower, 158 Fifth Street, Sandton, 2196, South Africa.

The holders of cumulative preference shares do not have voting rights unless any preference dividend is in arrears for more
than six months. The terms of issue of the cumulative preference shares are that they carry the right, in priority to the Company'sordinary shares, to receive a dividend equal to 3% of the gross future revenue generated by the exploitation or the disposal of the Argonaut mineral rights acquired from Randgold in September 1997. Additionally, holders of cumulative preference shares may voteon resolutions which adversely affect their interests and on the disposal of all, or substantially all, of our assets or mineral rights. There is currently no active trading market for our cumulative preference shares. Holders of cumulative preference shares will only obtain their potential voting rights once the Argonaut Project becomes an operational gold mine, and dividends accrue to them. The prospecting rights have since expired and the Argonaut Project terminated. . The Department of Mineral Resources (DMR) granted DRDGOLD a prospecting right over an area which was going to be too small to mine. When an application for a greater area was lodged, the DMR stated that the additional area is in an urban location and an application for a prospecting right cannot be granted. We are in the process, together with Randgold, of cancelling these preference shares. background image83
7B. RELATED PARTY TRANSACTIONS
Rand Refinery Proprietary Limited (Rand Refinery) agreement

On October 12, 2001, we entered into an agreement with Rand Refinery for the refining and sale of all of our gold produced
in South Africa. Under the agreement, Rand Refinery performs the final refining of our gold and casts it into troy ounce bars. Rand Refinery then usually sells the gold on the same day as delivery, for the London afternoon close price. In exchange for this service, we pay Rand Refinery a variable refining fee plus fixed marketing, loan and administration fees. We received a dividend distribution as part of the settlement reached with Simmers and Jack Mines Limited of R6.8 million during fiscal 2013 however, we received nodividend during fiscal 2012. Mr. T.J. Gwebu, Executive Officer: Legal, Compliance and Company Secretary of DRDGOLD is a director of Rand Refinery and a member of their Remuneration Committee and chairman of their Social and Ethics Committee. Mr. M. Burrell, Financial Director of Ergo, is an alternate director of Rand Refinery and a member of their Audit Committee. The Company currently owns 11.3% (Fiscal 2012: 4%) of Rand Refinery (which is jointly owned by South African mining companies). The movement in shareholding is due to the settlement that was reached with Simmers and Jack Mines Limited, before the matter could reach legal proceedings, relating to a further 6.22% in Rand Refinery.
Guardrisk Insurance Cell Captive (Guardrisk)

Insurance premiums were paid to Guardrisk amounting to R21.0 million by Ergo (2012: R41.8 million by ERPM and R21.0
million by Ergo). As at June 30, 2013 financial guarantees amounting to R304.9 million have been issued to the DMR by Guardrisk.Guardrisk is a cell captive which is consolidated as a special purpose entity for financial reporting purposes.
Management service agreements

We provide management services for EMO, Blyvoor (until June 1, 2012 when Blyvoor was sold), Ergo, Crown and ERPM
(until July 1, 2012 when Crown and the surface assets included in ERPM were restructured into Ergo) under management service agreements entered into with each of them. These services include financial management, treasury services, gold administration,technical and engineering services, mineral resource services and other management related services. We own a 74% interest in EMOand until June 1, 2012 for management service and management control purposes, we owned 74% of Blyvoor. Ergo, Crown and ERPM are wholly-owned subsidiaries of EMO. These arrangements allow us to monitor and provide input on the management of these companies in which we have an investment.
The management services at Ergo, Crown and ERPM are provided by EMO. Crown and the surface assets in ERPM were
restructured into Ergo on July 1, 2012. EMO’s management fee for services performed in fiscal 2013 at Ergo was R53.7 million (2012: Rnil), Crown Rnil (2012: R16.6 million) and ERPM Rnil (2012: R16.6 million). Management fees recovered from EMO were R25.1 million (2012: R21.6 million) and from Blyvoor Rnil (2012: until June 1, 2012 when Blyvoor was sold R15.2 million).
EMO paid interest on inter-company loans to Ergo and received interest from Crown and ERPM. EMO’s interest paid to
Ergo in fiscal 2013 was R2.2 million (2012: Rnil) and interest received in fiscal 2013 from ERPM R21.5 million (2012: R29.5 million) and Crown Rnil (2012: R1.9 million). Interest recovered from EMO was R23.0 million (2011: R26.6 million) and from ErgoR32.2 million (since the restructuring on July 1, 2012) (2012: Rnil).
Consultancy agreement
On June 23, 2008, EMO entered into a consultancy agreement with Khumo Gold SPV Proprietary Limited, or Khumo Gold,
which owns 20% of EMO and Blyvoor, to provide guidance and participate in the Company’s transformation initiatives set by the Mineral and Petroleum Resources Development Act of South Africa. The agreement provides for a monthly retainer of R216,000 (2012: R200,000)
.
Treasury shares
During the year ended June 30, 2013, EMO acquired no (2012: 9,852,800) ordinary shares (held as treasury shares for
consolidation purposes) in DRDGOLD. 62,614 (2012: 3,584,627) of the treasury shares held by EMO were used to settle share options exercised by key management personnel. As at June 30, 2013, EMO held 6,205,559 (2012: 6,268,173) treasury shares.
Subordination agreements and letters of support to subsidiaries
In October 2013, DRDGOLD Limited entered into a subordination agreement with EMO, subordinating a loan made to
EMO amounting to R544.7 million, for the benefit of EMO’s third party creditors. Consecutively, DRDGOLD Limited issued a letterof support to EMO committing to support EMO financially for 367 days from July 1, 2013, or until all other liabilities are paid, or the total assets of EMO, fairly valued, exceeds its total liabilities, fairly valued, and that DRDGOLD Limited will not call for therepayment of its loan within that period. background image84
7C. INTERESTS OF EXPERTS AND COUNSEL
Not applicable.
ITEM 8. FINANCIAL INFORMATION
8A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION
1. Please refer to Item 18.: "Financial Statements."
2. Please refer to Item 18.: "Financial Statements."
3. Please refer to Item 18.: "Financial Statements."
4. The last year of audited financial statements is not older than 15 months.
5. Not applicable.
6. Not applicable.
7. See under Item 4D.: "Property, plant and equipment—Legal Proceedings."
8. Please see Item 10B.: "Memorandum and Articles of Association."
8B. SIGNIFICANT CHANGES
For a discussion of significant changes that have occurred since June 30, 2013, the date of the last audited financial
statements included in this Annual Report, please see Note 30 “Subsequent Events” under Item 18.: "Financial Statements," whichdescribes post balance sheet (statement of financial position) events.
ITEM 9. THE OFFER AND LISTING
9A. OFFER AND LISTING DETAILS

The following tables set forth, for the periods indicated, the high and low market sales prices and average daily trading
volumes of our ordinary shares on the JSE and ADSs on the New York Stock Exchange and Nasdaq Capital Market. On December 29, 2011, we transferred our listing from the Nasdaq Capital Market to the New York Stock Exchange.
Price
Per
Ordinary Share
R
Price Per
ADS
1
$
Average Daily
Trading
Volume
Year Ended
High
Low
High
Low
Ordinary
Share
ADSs
1
June 30, 2009 ...........................................................................................
9.55
2.86
10.59
2.85
932,905
186,575
June 30, 2010 ...........................................................................................
6.98
3.20
9.00
4.07
691.256
209,087
June 30, 2011 ...........................................................................................
4.00
2.80
6.23
3.92
558,675
113,932
June 30, 2012 ...........................................................................................
6.28
2.97
8.16
4.21
1,090,043
97,107
June 30, 2013 ...........................................................................................
7.55
4.49
8.59
4.90
631,264
78,400

1
Note that with effect from July 23, 2007, we changed our ADS ratio to reflect one ADS for ten of our ordinary shares. background image85
Price
Per
Ordinary Share
R
Price Per
ADS
1
$
Average Daily
Trading
Volume
Quarter
High
Low
High
Low
Ordinary
Share
ADSs
1
Q1 July – September 2011 ...................................................................... 4.89
2.97
5.79
4.21 912,881
135,675
Q2 October – December 2011 ................................................................
5.95
3.66
7.27
4.93
1,211,099
111,431
Q3 January – March 2012 .......................................................................
6.28
4.46
8.16
5.28
1,618,230
93,431
Q4 April – June 2012 ..............................................................................
5.84
4.70
7.43
5.60
610,278
47,116
Q1 July – September 2012 ......................................................................
5.49
4.49
6.71
5.35
380,536
37,224
Q2 October – December 2012 ................................................................
7.05
5.30
8.09
6.46
714,592
56,943
Q3 January – March 2013 .......................................................................
7.55
6.14
8.59
6.76
648,849
111,095
Q4 April – June 2013 ..............................................................................
7.18
4.60
7.85
4.90
785,537
108,424
Q1 July – September 2013 ......................................................................
6.64
4.81
6.47
4.89
377,790
69,694
Price
Per
Ordinary Share
R
Price Per
ADS
$
Average Daily
Trading Volume
Month Ended
High
Low
High
Low
Ordinary
Share
ADSs
April 30, 2013 ..........................................................................................
7.18
5.55
7.85
6.16
1,004,521
113,034
May 31, 2013 ...........................................................................................
6.09
4.60
6.76
5.05
647,458
106,673
June 30, 2013 ...........................................................................................
6.50
4.60
6.50
4.90
703,383
105,278
July 31, 2013 ............................................................................................
6.00
5.10 6.08
4.96
277,201
62,073
August 31, 2013 .......................................................................................
6.64
4.81
6.22
4.89
476,867
75,709
September 30, 2013 .................................................................................
6.40
5.51
6.47
5.23
389,436
71,461
The cumulative preference shares are not traded on any exchange.

There have been no trading suspensions with respect to our ordinary shares on the JSE during the past three years ended
June 30, 2013, nor have there been any trading suspensions with respect to our ADRs on the Nasdaq Capital Market from June 30, 2010 until December 29, 2011 and the New York Stock Exchange since our listing on that market. background image86
9B. PLAN OF DISTRIBUTION
Not
applicable.
9C. MARKETS
Nature of Trading Markets

The principal trading market for our equity securities is the JSE (symbol: DRD) and our ADSs that trade on the New York
Stock Exchange (symbol: DRD). Our ordinary shares also trade on the Marche Libre on the Paris Bourse (symbol: DUR) and Brussels Bourse (symbol: DUR) in the form of International Depository Receipts. The ordinary shares also trade on the over the counter markets in Berlin, Stuttgart and the Regulated Unofficial Market on the Frankfurt Stock Exchange. The ADRs are issued byThe Bank of New York, as depositary. Each ADR represents one ADS and each ADS represents ten of our ordinary shares. Until July 23, 2007, each ADS represented one of our ordinary shares. Prior to December 29, 2011, our ADSs traded on the Nasdaq National Market.
9D. SELLING SHAREHOLDERS
Not
applicable.
9E. DILUTION
Not
applicable.
9F. EXPENSES OF THE ISSUE
Not
applicable.
ITEM 10. ADDITIONAL INFORMATION
10A. SHARE CAPITAL
Not
applicable.
10B. MEMORANDUM OF INCORPORATION
Description of Our Memorandum and Articles of Association and Ordinary Shares

As of June 30, 2013, we had authorized for issuance 600,000,000 (as of September 30, 2013: 600,000,000) ordinary shares,
no par value, and 5,000,000 (as of September 30, 2013: 5,000,000) cumulative preference shares, R0.10 par value. On that date, we had issued 385,383,767 (as of September 30, 2013: 385,383,767) ordinary shares and 5,000,000 (as of September 30, 2013: 5,000,000) cumulative preference shares.

Set out below are brief summaries of certain provisions of our Memorandum of Incorporation, or our MOI, the South
African Companies Act, 2008 (as amended), or the Companies Act, and the  JSE Listings Requirements, all as in effect on September30, 2013. The summary does not purport to be complete and is subject to and qualified in its entirety by reference to the full text of the MOI, the Companies Act, and the JSE Listings Requirements.

We are registered under the Companies Act of South Africa under registration number 1895/000926/06. As set forth in our
Memorandum of Incorporation, the main object and business of our company is mining and exploration for gold and other minerals.
Borrowing Powers

Our directors may from time to time borrow for the purposes of the company, such sums as they think fit and secure the
payment or repayment of any such sums, or any other sum, as they think fit, whether by the creation and issue of securities, mortgage or charge upon all or any of the property or assets of the company. The directors shall procure that the aggregate principal amount at any one time outstanding in respect of monies so borrowed or raised by the company and all the subsidiaries for the time being of the company shall not exceed the aggregate amount at that time authorized to be borrowed or secured by the company or the subsidiaries for the time being of the company (as the case may be).
Share Ownership Requirements

Our directors are not required to hold any shares to qualify or be appointed as a director. background image87
Voting by Directors

A director may authorize any other director to vote for him at any meeting at which neither he nor his alternate director
appointed by him is present. Any director so authorized shall, in addition to his own vote, have a vote for each director by whom he is authorized.

The quorum necessary for the transaction of the business of the directors is a majority of the directors present at a meeting
before a vote may be called at any meeting of directors.

Directors are required to notify our board of directors of interests in companies and contracts.  If a director has a personal
financial interest in respect of a matter to be considered at a meeting of the board he or she must disclose the interest and its nature, any material information relating to the matter and thereafter leave the meeting immediately after making the disclosure. Such director must not take part in consideration of the matter. He is not to be regarded as being present for the purpose of determining whether a resolution has sufficient support to be adopted.

The King Report on Corporate Governance for South Africa (King III Report) which came into effect on March 1, 2010,
sets out guidelines to promote the highest standards of corporate governance among South African companies. The board of directors believes that our business should be conducted according to the highest legal and ethical standards. In accordance with the board practice, all remuneration of executive directors is approved by the Remuneration Committee, and the shareholders approve remuneration of non-executive directors.

DRDGOLD commits itself to observing the provision of the King III Report and enforcing these to the extent possible
within the context of the report’s ‘apply or explain’ principle.

Under South African common law, directors are required to comply with certain fiduciary duties to the company and to
exercise proper care and skill in discharging their responsibilities. These common law duties have now been codified by the Companies Act.
Age Restrictions

There is no age limit for directors.
Election of Directors

Each director shall be appointed by election by way of an ordinary resolution of shareholders at a general or annual meeting
of company (“elected director (s)”) and no appointment of a director by way of a written circulated shareholders resolution in termsof section 60 of the Companies Act shall be competent.

One third of our non-executive directors, on a rotating basis, are subject to re-election at each annual general shareholder’s
meeting. Retiring directors usually make themselves available for re-election. An amendment to the MOI which is intended to subject executive directors to re-election by rotation will be proposed at the 2013 annual general meeting.
General Meetings

On the request of  any shareholder or shareholders holding not less than 10 percent  of our share capital which carries the
right of voting at general meetings, we shall  issue a notice to shareholders convening a general meeting for a date not less than 15 days  from the date of the notice. Directors may convene general meetings at any time.

Our annual general meeting and a meeting of our shareholders for the purpose of passing a special resolution may be called
by giving 15 days advance written notice of that meeting. For any other general meeting of our shareholders, 15 days advance written notice is required.

Our MOI provides that if at a meeting convened upon request by our shareholders, a quorum is not present within fifteen
minutes after the time selected for the meeting, such meeting shall be postponed for one week. However the chairman has the discretion to extend the fifteen minutes for a reasonable period on certain grounds. The necessary quorum is three members present in person or represented by proxy. background image88
Voting Rights

The holders of our ordinary shares are generally entitled to vote at general meetings and on a show of hands have one vote
per person and on a poll have one for every share held. The holders of our cumulative preference shares are not entitled to vote at a general meeting unless any preference dividend is in arrears for more than six months at the date on which the notice convening the general meeting is posted to the shareholders. Additionally, holders of cumulative preference shares may vote on resolutions which adversely affect their interests and on resolutions regarding the disposal of all or substantially all of our assets or mineral rights. When entitled to vote, holders of our cumulative preference shares are entitled to one vote per person on a show of hands and that portion of the total votes which the aggregate amount of the nominal value of the shares held by the relevant shareholder bears to the aggregate amount of the nominal value of all shares issued by us.
Dividends

We may, in a general meeting, or our directors may, from time to time, declare a dividend to be paid to the shareholders in
proportion to the number of shares they each hold. No dividend shall be declared except out of our profits. Dividends may be declared either free or subject to the deduction of income tax or duty in respect of which we may be charged. Holders of ordinaryshares are entitled to receive dividends as and when declared by the directors.
Ownership Limitations

There are no limitations imposed by our MOI or South African law on the rights of shareholders to hold or vote on our
ordinary shares or securities convertible into our ordinary shares.
Winding-up

If we are wound-up, then the assets remaining after payment of all of our debts and liabilities, including the costs of
liquidation, shall be applied to repay to the shareholders the amount paid up on our issued capital and thereafter the balance shall be distributed to the shareholders in proportion to their respective shareholdings. On a winding up, our cumulative preference shares rank, in regard to all arrears of preference dividends, prior to the holders of ordinary shares. As of September 30, 2013, no such dividends have been declared. Except for the preference dividend and as described in this Item our cumulative preference shares are not entitled to any other participation in the distribution of our surplus assets on winding-up.
Reduction of Capital

We may, by special resolution, reduce the share capital authorized by our MOI, or reduce our issued share capital including,
without limitation, any stated capital, capital redemption reserve fund and share premium account by making distributions and buying back our shares.
Amendment of theMOI

Our MOI may be altered by the passing of a special resolution or in compliance with a court order. The Company may also
amend the MOI by increasing or decreasing the number of authorized shares, classifying or reclassifying shares, or determining the terms of shares in a class. A special resolution is passed when the shareholders holding at least 25% of the total votes of all the members entitled to vote are present or represented by proxy at a meeting and, if the resolution was passed on a show of hands, at least 75% of those shareholders voted in favor of the resolution and, if a poll was demanded, at least 75% of the total votes to which those shareholders are entitled were cast in favor of the resolution.
Consent of the Holders of Cumulative Preference Shares

The rights and conditions attaching to the cumulative preference shares may not be cancelled, varied or added, nor may we
issue shares ranking, regarding rights to dividends or on winding up, in priority to or equal with our cumulative preference shares, or dispose of all or part of the Argonaut mineral rights without the consent in writing of the registered holders of our cumulativepreference shares or the prior sanction of a resolution passed at a separate class meeting of the holders of our cumulative preference shares.
Distributions

We are authorized to make payments in cash or in specie to our shareholders in accordance with the provisions of the
Companies Act and other consents required by law from time to time. We may, for example, in a general meeting, upon recommendation of our directors, resolve that any surplus funds representing capital profits arising from the sale of any capital assets and not required for the payment of any fixed preferential dividend, be distributed among our ordinary shareholders. However, nosuch profit shall be distributed unless we have sufficient other assets to satisfy our liabilities and to cover our paid up share capital. We also need to consider the solvency and liquidity requirements stated in the Companies Act of South Africa. background image89
Directors’ power to vote compensation to themselves

The remuneration of non-executive directors may not exceed in aggregate in any financial year the amount fixed by the
Company in general meeting. The Companies Act requires that remuneration to non-executive directors may be paid only in accordance with a special resolution approved by shareholders within the previous two years.
Time limit for dividend entitlement

All unclaimed monies that are due to any shareholder/s shall be held by the company in trust for an indefinite period until
lawfully claimed by such shareholder/s, subject to the Prescription Act, 1968 as amended or any other law which governs the law of prescription.
Staggered director elections & cumulative voting
At each annual general meeting of the Company one-third of the directors shall retire and be eligible for re-election. No
provision is made for cumulative voting.
Sinking fund provisions and liability to further capital calls

There are no sinking fund provisions in the MOI attaching to any class of the company shares, and the company does not
subject shareholders to liability to further capital calls.
Provision that would delay/prevent change of control

The Companies Act provides that companies which propose to merge or amalgamate must enter into a written agreement
setting out the terms thereof. They must prove that upon implementation of the amalgamation or merger each will satisfy the solvency and liquidity test. Companies involved in disposals, amalgamations or mergers, or schemes of arrangement must obtain acompliance certificate from the Takeover Regulation Panel, pass special resolutions and in some instances they must obtain an independent expert report.
10C. MATERIAL CONTRACTS

ZAR2,000,000,000 Domestic Medium Term and High Yield Note Programme (“DMTN Programme”) agreement
entered into between DRDGOLD Limited (“Issuer”), Crown Gold Recoveries Proprietary Limited (“Crown”), East Rand Proprietary Mines Limited (“ERPM”), Ergo Mining Operations Proprietary Limited (“EMO”), Ergo Mining Proprietary Limited (“Ergo”) and ABSA Bank Limited (“ABSA”) dated June 30, 2012.

Under this agreement the Issuer may from time to time issue loan notes to certain investors. The maximum aggregate
nominal amount of all such notes from time to time outstanding under the DMTN Programme may not exceed R2,000,000,000 (two billion South African Rand). Crown, ERPM, EMO and Ergo (“Guarantors”) are joint and several guarantors in favour of the Issuer. The Guarantors guarantee to the holders of the notes the due and punctual performance by the Issuer of its payment obligations under the DMTN Programme. The notes may be listed on the JSE Limited. ABSA Capital, a division of ABSA Bank Limited, has been appointed dealer and arranger of the notes.

Sale of Shares and Claims Agreement entered into by Village Main Reef Limited (“Village”), DRDGOLD Limited
(“DRDGOLD”) (“Seller”), Business Venture Investments No 1557 Proprietary Limited (“Purchaser”) and Blyvooruitzicht Gold Mining Company Limited (“Blyvoor”) dated February 11, 2012.

Under this agreement the Seller agreed to sell its entire shareholding in Blyvoor and its working capital and shareholder
loan claims against Blyvoor to the Purchaser. The purchase consideration is discharged by Village through the issue of 85,714,286 new ordinary shares in Village. Refer to Item 5A.: “Operation Results - Recent developments” for a more detailed discussion.

Sale of Interest Agreement between DRDGOLD Limited (“DRDGOLD”) and Ergo Mining Proprietary Limited
(“Ergo Mining”) dated June 29, 2012.

Under this agreement DRDGOLD sells and Ergo Mining purchases DRDGOLD’s 35% participation interest in the assets
and liabilities of the unincorporated joint venture, called ErgoGold (previously called the Elsburg JV), between DRDGOLD and East Rand Proprietary Mines Limited. The purchase price payable is R200,000,000 (two hundred million South African rand). The purchase price was advanced by DRDGOLD to Ergo on loan account. background image90
Heads of Agreement entered into by Trans-Caledon Tunnel Authority (“TCTA’), Ergo Mining Operations Proprietary
Limited (“EMO”), East Rand Proprietary Mines Limited (“ERPM”) and Crown Gold Recoveries Proprietary Limited (“CGR”) (collectively CGR, EMO and ERPM are called “the Ergo Group”) dated  November 28, 2012.

Under this agreement the Ergo Group grants TCTA access to land  for the construction of a water treatment plant,  access
to the South West Vertical Shaft of ERPM to construct and operate a pump station to pump the acid mine drainage (“AMD”) to surface, the right to construct a sludge pipeline using servitudes owned by the Ergo Group members, shared use of an Ergo Groupresidue pipeline and partial use of the Ergo tailings dams for the deposition of up to 4 167m3 of sludge per day, emanating fromthe water treatment plant. EMO has an option to acquire from TCTA, for its operations up to 30 mega litres of untreated or partially treated AMD per day.
10D. EXCHANGE CONTROLS

The following is a summary of the material South African exchange control measures, which has been derived from
publicly available documents. The following summary is not a comprehensive description of all the exchange control regulations.The discussion in this section is based on the current law and positions of the South African Government. Changes in the law mayalter the exchange control provisions that apply, possibly on a retroactive basis.
Introduction

Dealings in foreign currency, the export of capital and revenue, payments by residents to non-residents and various other
exchange control matters in South Africa are regulated by the South African exchange control regulations, or the Regulations. The Regulations form part of the general monetary policy of South Africa. The Regulations are issued under Section 9 of the Currencyand Exchanges Act, 1933 (as amended). In terms of the Regulations, the control over South African capital and revenue reserves, as well as the accruals and spending thereof, is vested in the Treasury (Ministry of Finance), or the Treasury.

The Treasury has delegated the administration of exchange controls to the Exchange Control Department of the South
African Reserve Bank, or SARB, which is responsible for the day to day administration and functioning of exchange controls. SARBhas a wide discretion. Certain banks authorized by the Treasury to co-administer certain of the exchange controls, are authorized by the Treasury to deal in foreign exchange. Such dealings in foreign exchange by authorized dealers are undertaken in accordance with the provisions and requirements of the exchange control rulings, or Rulings, and contain certain administrative measures, as well as conditions and limits applicable to transactions in foreign exchange, which may be undertaken by authorized dealers. Non-residentshave been granted general approval, in terms of the Rulings, to deal in South African assets, to invest and disinvest in South Africa.

The Regulations provide for restrictions on exporting capital from the Common Monetary Area consisting of South Africa,
Namibia, and the Kingdoms of Lesotho and Swaziland. Transactions between residents of the Common Monetary Area are not subject to these exchange control regulations.

There are many inherent disadvantages to exchange controls, including distortion of the price mechanism, problems
encountered in the application of monetary policy, detrimental effects on inward foreign investment and administrative costs associated therewith. The South African Finance Minister has indicated that all remaining exchange controls are likely to be dismantled as soon as circumstances permit. Since 1998, there has been a gradual relaxation of exchange controls. The gradual approach to the abolition of exchange controls adopted by the Government of South Africa is designed to allow the economy to adjust more smoothly to the removal of controls that have been in place for a considerable period of time. The stated objective of the authorities is equality of treatment between residents and non-residents with respect to inflows and outflows of capital. The focus of regulation, subsequent to the abolition of exchange controls, is expected to favor the positive aspects of prudential financialsupervision.

The present exchange control system in South Africa is used principally to control capital movements. South African
companies are not permitted to maintain foreign bank accounts without SARB approval and, without the approval of SARB, are generally not permitted to export capital from South Africa or hold foreign currency. In addition, South African companies are required to obtain the approval of SARB prior to raising foreign funding on the strength of their South African statements of financial position, which would permit recourse to South Africa in the event of defaults. Where 75% or more of a South African company's capital, voting power, power of control or earnings is directly or indirectly controlled by non-residents, such a corporation isdesignated an “affected person” by SARB, and certain restrictions are placed on its ability to obtain local financial assistance. We are not, and have never been, designated an “affected person” by SARB.

Foreign investment and outward loans by South African companies are also restricted. In addition, without the approval of
SARB, South African companies are generally required to repatriate to South Africa profits of foreign operations and are limited in their ability to utilize profits of one foreign business to finance operations of a different foreign business. South African companies establishing subsidiaries, branches, offices or joint ventures abroad are generally required to submit financial statements on these operations as well as progress reports to SARB on an annual basis. As a result, a South African company's ability to raise and deploycapital outside the Common Monetary Area is restricted. background image91

Although exchange controls have been gradually relaxed since 1998, unlimited outward transfers of capital are not permitted
at this stage. Some of the more salient changes to the South African exchange control provisions over the past few years have been as follows:
· corporations wishing to invest in countries outside the Common Monetary Area, in addition to what is set out below, applyfor permission to enter into corporate asset/share swap and share placement transactions to acquire foreign investments. Thelatter mechanism entails the placement of the locally quoted corporation's shares with long-term overseas holders who, inpayment for the shares, provide the foreign currency abroad which the corporation then uses to acquire the targetinvestment; · corporations wishing to establish new overseas ventures are permitted to transfer offshore up to R500 million to financeapproved investments abroad and up to R500 million to finance approved new investments in African countries on anannual bases. Approval from SARB is required in advance for investments in excess of R500 million. On application toSARB, corporations are also allowed to use part of their local cash holdings to finance up to 10% of approved new foreigninvestments where the cost of these investments exceeds the current limits; · as a general rule, SARB requires that more than 10% of equity of the acquired off-shore venture is acquired within apredetermined period of time, as a prerequisite to allowing the expatriation of funds. If these requirements are not met,SARB may instruct that the equity be disposed of. In our experience SARB has taken a commercial view on this, and has onoccasion extended the period of time for compliance; and · remittance of directors' fees payable to persons permanently resident outside the Common Monetary Area may be approvedby authorized dealers, in terms of the Rulings.

Authorized dealers in foreign exchange may, against the production of suitable documentary evidence, provide forward
cover to South African residents in respect of fixed and ascertained foreign exchange commitments covering the movement of goods.

Persons who emigrate from South Africa are entitled to take limited amounts of money out of South Africa as a settling-in
allowance. The balance of the emigrant's funds will be blocked and held under the control of an authorized dealer. These blockedfunds may only be invested in:
· blocked current, savings, interest bearing deposit accounts in the books of an authorized dealer in the banking sector;  · securities quoted on the JSE and financial instruments listed on the Bond Exchange of South Africa which are depositedwith an authorized dealer and not released except temporarily for switching purposes, without the approval of SARB.Authorized dealers must at all times be able to demonstrate that listed or quoted securities or financial instruments which aredematerialized or immobilized in a central securities depository are being held subject to the control of the authorized dealerconcerned; or · mutual funds.

Aside from the investments referred to above, blocked rands may only be utilized for very limited purposes. Dividends
declared out of capital gains or out of income earned prior to emigration remain subject to the blocking procedure. It is not possible to predict when existing exchange controls will be abolished or whether they will be continued or modified by the South African Government in the future.
Sale of Shares

Under present exchange control regulations in South Africa, our ordinary shares and ADSs are freely transferable outside
the Common Monetary Area between non-residents of the Common Monetary Area. In addition, the proceeds from the sale of ordinary shares on the JSE on behalf of shareholders who are not residents of the Common Monetary Area are freely remittable tosuch shareholders. Share certificates held by non-residents will be endorsed with the words “non-resident,” unless dematerialized.
Dividends

Dividends declared in respect of shares held by a non-resident in a company whose shares are listed on the JSE are freely
remittable.

Any cash dividends paid by us are paid in rands. Holders of ADSs on the relevant record date will be entitled to receive any
dividends payable in respect of the shares underlying the ADSs, subject to the terms of the deposit agreement entered on August 12, 1996, and as amended and restated, between the Company and The Bank of New York, as the depository. Subject to exceptions provided in the deposit agreement, cash dividends paid in rand will be converted by the depositary to dollars and paid by the depositary to holders of ADSs, net of conversion expenses of the depositary, in accordance with the deposit agreement. The depositary will charge holders of ADSs, to the extent applicable, taxes and other governmental charges and specified fees and other expenses. background image92
Voting rights

There are no limitations imposed by South African law or by our MOI on the right of non-South African shareholders to
hold or vote our ordinary shares.
10E. TAXATION
Material South African Income Tax Consequences

The following is a summary of material income tax considerations under South African income tax law. No representation
with respect to the consequences to any particular purchaser of our securities is made hereby. Prospective purchasers are urged to consult their tax advisers with respect to their particular circumstances and the effect of South African or other tax laws to which they may be subject.

South Africa imposes tax on worldwide income of South African residents. Generally, South African non-residents do not
pay tax in South Africa except in the following circumstances:
Income Tax and withholding tax on dividends

Non-residents will pay income tax on any amounts received by or accrued to them from a source within (or deemed to be
within) South Africa. Interest earned by a non-resident on a debt instrument issued by a South African company will be regarded as being derived from a South African source but will be regarded as exempt from taxation in terms of Section 10(1)(i) of the SouthAfrican Income Tax Act, 1962 (as amended), or the Income Tax Act. This exemption applies to so much of any interest and dividends (which are not otherwise exempt) received from a South African source not exceeding (a) R33,000 if the taxpayer is 65years of age or older or (b) R22,800 if the taxpayer is younger than 65 years of age at the end of the relevant tax year.

No withholding tax is deductible in respect of interest payments made to non-resident investors.
In 1993, all existing gold mining companies had the option to elect to be exempt from secondary tax on companies, or
STC. If the election was made, a higher tax rate would apply for both mining and non-mining income. With the introduction of dividends tax at a rate of 15% which replaced STC with effect from April 1, 2012, the election on STC is not applicable anymore.These amendments are set out in Part VIII in Chapter II of the Income Tax Act. Section 64F of the amendments, sets out beneficialowners who are exempt from the dividend tax, which includes, resident companies receiving a dividend after the effective date, being April 1, 2012. The Convention between the United States of America and the Republic of South Africa for the Avoidance of DoubleTaxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital Gains, or the Tax Treaty, would limit the rate of this tax with respect to dividends paid on ordinary shares or ADSs to a US resident (within the meaning of the Tax Treaty) to 5% of the gross amount of the dividends if such US resident is a company which holds directly at least 10% of our voting stock and15% of the gross amount of the dividends in all other cases.
The above provisions shall not apply if the beneficial owner of the dividends is resident in the US, carries on business in
South Africa through a permanent establishment situated in South Africa, or performs in South Africa independent personal services from a fixed base situated in South Africa, and the dividends are attributable to such permanent establishment or fixed base.
In fiscal years 2013 and 2012, the corporate tax rates for taxable mining and non-mining income were 34% and 28%,
respectively. For the fiscal year 2011 companies that elected the STC exemption were taxed at a rate of 43% and 35%, respectively. During those same years prior to fiscal 2012 the tax rates for companies that did not elect the STC exemption forfiscal 2011 were 34% and 28%, respectively. The Company, is subject to 34% tax on mining income and 28% for non-mining income. For fiscal years prior to the introduction of the new dividends tax (prior to fiscal year 2011), Crown was our only subsidiary that elected not to be exempt from STC.

No income tax over and above the dividends tax is payable on dividends paid to residents or non-residents, in terms of
Section 10(1)(k) of the Income Tax Act, except in respect of foreign dividends received by or accrued to residents of South Africa. Accordingly, only the 15% dividends tax (or lower applicable treaty rate) is withheld on dividends received by or accrued to non-resident shareholders of companies listed in South Africa and non-residents will receive the same dividend as South African residentshareholders (prior to fiscal year 2012 there was no dividend tax). Prior to fiscal 2012, the Company paid STC at a rate of 10%(before October 1, 2007 12.5%) of the excess of dividends declared over dividends received in a dividend cycle but the full amount of the dividend declared was paid to shareholders. background image93
Capital Gains Tax

Non-residents are generally not subject to Capital Gains Tax, or CGT, in South Africa. They will only be subject to CGT on
gains arising from the disposal of capital assets if the assets disposed of consist of:
· immovable property owned by the non-residents situated in South Africa, or any interest or right in or to immovableproperty. A non-resident will have an interest in immovable property if it has a direct or indirect shareholding of at least20% in a company, where 80% or more of the net assets of that company (determined on a market value basis) areattributable directly or indirectly to immovable property; or  · any asset of a permanent establishment of a non-resident in South Africa through which a trade is carried on.

If the non-residents are not subject to CGT because the assets disposed of do not fall within the categories described above,
it follows that they will also not be able to claim the capital losses arising from the disposal of the assets.
Material United States Federal Income Tax Consequences

The following is a summary of material US federal income tax consequences to US holders (as defined below) of the
purchase, ownership and disposition of ordinary shares or ADSs. It deals only with US holders who hold ordinary shares or ADSs as capital assets for US federal income tax purposes. This discussion is based upon the provisions of the Internal Revenue Code of 1986, as amended, or the Code, published rulings, judicial decisions and the Treasury regulations, all as currently in effect and all of which are subject to change, possibly on a retroactive basis. This discussion has no binding effect or official status of any kind; we cannot assure holders that the conclusions reached below would be sustained by a court if challenged by the Internal Revenue Service.

This discussion does not address all aspects of US federal income taxation that may be applicable to holders in light of their
particular circumstances and does not address special classes of US holders subject to special treatment (such as dealers in securities or currencies, partnerships or other pass-through entities, banks and other financial institutions, insurance companies, tax-exemptorganizations, certain expatriates or former long-term residents of the United States, persons holding ordinary shares or ADSs as part of a “hedge,” “conversion transaction,” “synthetic security,” “straddle,” “constructive sale” or other integrated investment, personswho acquired the ordinary shares or ADSs upon the exercise of employee stock options or otherwise as compensation, persons whosefunctional currency is not the US dollar, or persons that actually or constructively own ten percent or more of our voting stock). This discussion addresses only US federal income tax consequences and does not address the effect of any state, local, or foreign tax laws that may apply, the alternative minimum tax or the application of the federal estate or gift tax.

A “US holder” is a beneficial owner of ordinary shares or ADSs that is, for US federal income tax purposes:
· a citizen or resident of the US;  · a corporation or other entity subject to tax as a corporation that is created or organized under the laws of the US or anypolitical subdivision thereof;  · an estate, the income of which is subject to US federal income tax without regard to its source; or  · a trust, if a court within the US is able to exercise primary supervision over the administration of the trust and one or moreUS persons have the authority to control all substantial decisions of the trust or if the trust has made a valid election to betreated as a US person.

If a partnership (or an entity treated as a partnership for US federal income tax purposes) holds any ordinary shares or ADSs,
the tax treatment of a partner will generally depend on the status of the partner and on the activities of the partnership. Partners in partnerships holding any ordinary shares or ADSs are urged to consult their tax advisors.

Because individual circumstances may differ, US holders of ordinary shares or ADSs are urged to consult their tax
advisors concerning the US federal income tax consequences applicable to their particular situations as well as any consequences to them arising under the tax laws of any foreign, state or local taxing jurisdiction. background image94
Ownership of Ordinary Shares or ADSs

For purposes of the Code, a US holder of ADSs will be treated for US federal income tax purposes as the owner of the
ordinary shares represented by those ADSs. Exchanges of ordinary shares for ADSs and ADSs for ordinary shares generally will notbe subject to US federal income tax.

Subject to the discussion below under the heading “Passive Foreign Investment Company”, distributions with respect to the
ordinary shares or ADSs, other than distributions in liquidation and distributions in redemption of stock that are treated as exchanges,will be taxed to US holders as ordinary dividend income to the extent that the distributions do not exceed our current and accumulated earnings and profits. For US federal income tax purposes, the amount of any distribution received by a US holder willequal the dollar value of the sum of the South African rand payments made (including the amount of South African income taxes, if any, withheld with respect to such payments), determined at the “spot rate” on the date the dividend distribution is includable in such US holder's income, regardless of whether the payment is in fact converted into dollars. Generally, any gain or loss resulting from currency exchange fluctuations during the period from the date a US holder includes the dividend payment in income to the date such holder converts the payment into dollars will be treated as ordinary income or loss. Distributions, if any, in excess of our current and accumulated earnings and profits will constitute a non-taxable return of capital and will be applied against and reduce the holder'sbasis in the ordinary shares or ADSs. To the extent that these distributions exceed the US holder's tax basis in the ordinary shares or ADSs, as applicable, the excess generally will be treated as capital gain, subject to the discussion below under the heading “Passive Foreign Investment Company”. We do not intend to calculate our earnings or profits for US federal income tax purposes. US holders should therefore assume that any distributions with respect to our ordinary shares or ADSs will constitute dividend income.

“Qualified dividend income” received by individual US holders (as well as certain trusts and estates) generally will be taxed
at a maximum US federal income tax rate applicable to capital gains. This reduced rate generally would apply to dividends paid by us if, at the time such dividends are paid, either (i) we are eligible for benefits under a qualifying income tax treaty with the US or (ii) our ordinary shares or ADSs with respect to which such dividends were paid are readily tradable on an established securitiesmarket in the US. However, this reduced rate is subject to certain important requirements and exceptions, including, without limitation, certain holding period requirements and an exception applicable if we are treated as a passive foreign investment company as discussed under the heading “Passive Foreign Investment Company”. US holders are urged to consult their tax advisors regarding the US federal income tax rate that will be applicable to their receipt of any dividends paid with respect to the ordinary shares and ADSs.

For purposes of this discussion, the “spot rate” generally means a rate that reflects a fair market rate of exchange available to
the public for currency under a “spot contract” in a free market and involving representative amounts. A “spot contract” is a contract to buy or sell a currency on or before two business days following the date of the execution of the contract. If such a spot rate cannot be demonstrated, the US Internal Revenue Service has the authority to determine the spot rate.

Dividend income derived with respect to the ordinary shares or ADSs will not be eligible for the dividends received
deduction generally allowed to a US corporation under Section 243 of the Code. Dividend income will be treated as foreign sourceincome for foreign tax credit and other purposes. In computing the separate foreign tax credit limitations, dividend income shouldgenerally constitute “passive category income,” or in the case of certain US holders, “general category income.”
Disposition of Ordinary Shares or ADSs

Subject to the discussion below under the heading “Passive Foreign Investment Company”, upon a sale, exchange, or other
taxable disposition of ordinary shares or ADSs, a US holder will recognize gain or loss in an amount equal to the difference between the US dollar value of the amount realized on the sale or exchange and such holder's adjusted tax basis in the ordinary shares orADSs. Subject to the application of the “passive foreign investment company” rules discussed below, such gain or loss generally will be capital gain or loss and will be long-term capital gain or loss if the US holder has held the ordinary shares or ADSs for more than one year. The deductibility of capital losses is subject to limitations. Gain or loss recognized by a US holder on the taxable disposition of ordinary shares or ADSs generally will be treated as US-source gain or loss for US foreign tax credit purposes.

In the case of a cash basis US holder who receives rands in connection with the taxable disposition of ordinary shares or
ADSs, the amount realized will be based on the spot rate as determined on the settlement date of such exchange. A US holder whoreceives payment in rand and converts rand into US dollars at a conversion rate other than the rate in effect on the settlement date may have a foreign currency exchange gain or loss that would be treated as ordinary income or loss.

An accrual basis US holder may elect the same treatment required of cash basis taxpayers with respect to a taxable
disposition of ordinary shares or ADSs, provided that the election is applied consistently from year to year. Such election may not be changed without the consent of the Internal Revenue Service. In the event that an accrual basis holder does not elect to be treated as a cash basis taxpayer, such US holder may have a foreign currency gain or loss for US federal income tax purposes because of the differences between the US dollar value of the currency received prevailing on the trade date and the settlement date. Any suchcurrency gain or loss will be treated as ordinary income or loss and would be in addition to gain or loss, if any, recognized by such US holder on the disposition of such ordinary shares or ADSs. background image95
Passive Foreign Investment Company

A special and adverse set of US federal income tax rules apply to a US holder that holds stock in a passive foreign
investment company, or PFIC. We would be a PFIC for US federal income tax purposes if for any taxable year either (i) 75% or moreof our gross income, including our pro rata share of the gross income of any company in which we are considered to own 25% or more of the shares by value, were passive income or (ii) 50% or more of our average total assets (by value), including our pro rata share of the assets of any company in which we are considered to own 25% or more of the shares by value, were assets that produced or were held for the production of passive income. If we were a PFIC, US holders of the ordinary shares or ADSs would be subject to special rules with respect to (i) any gain recognized upon the disposition of the ordinary shares or ADSs and (ii)  any receipt of an excess distribution (generally, any distributions to a US holder during a single taxable year that is greater than 125% of the average amount of distributions received by such US holder during the three preceding taxable years in respect of the ordinary shares orADSs or, if shorter, such US holder's holding period for the ordinary shares or ADSs). Under these rules:
· the gain or excess distribution will be allocated ratably over a US holder's holding period for the ordinary shares or ADSs, asapplicable;  · the amount allocated to the taxable year in which a US holder realizes the gain or excess distribution will be taxed asordinary income;  · the amount allocated to each prior year (other than a pre-PFIC year), with certain exceptions, will be taxed at the highest taxrate in effect for that year; and  · the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to eachsuch year (other than a pre-PFIC year).

Although we generally will be treated as a PFIC as to any US holder if we are a PFIC for any year during a US holder's
holding period, if we cease to satisfy the requirements for PFIC classification, the US holder may avoid PFIC classification forsubsequent years if such holder elects to recognize gain based on the unrealized appreciation in the ordinary shares or ADSs through the close of the tax year in which we cease to be a PFIC.

A US holder of a PFIC are required to file an annual report with the Internal Revenue Service containing such information
as the US Secretary of Treasury may require.

A US holder of the ordinary shares or ADSs that are treated as “marketable stock” under the PFIC rules may be able to
avoid the imposition of the special tax and interest charge described above by making a mark-to-market election. Pursuant to thiselection, the US holder would include in ordinary income or loss for each taxable year an amount equal to the difference as of the close of the taxable year between the fair market value of the ordinary shares or ADSs and the US holder's adjusted tax basis in such ordinary shares or ADSs. Losses would be allowed only to the extent of net mark-to-market gain previously included by the US holder under the election for prior taxable years. If a mark-to-market election with respect to ordinary shares or ADSs is in effect on the date of a US holder's death, the tax basis of the ordinary shares or ADSs in the hands of a US holder who acquired them from a decedent will be the lesser of the decedent's tax basis or the fair market value of the ordinary shares or ADSs. US holders desiring to make the mark-to-market election are urged to consult their tax advisors with respect to the application and effect of making theelection for the ordinary shares or ADSs.

In the case of a US holder who holds ordinary shares or ADSs and who does not make a mark-to-market election, the
special tax and interest charge described above will not apply if such holder makes an election to treat us as a “qualified electing fund” in the first taxable year in which such holder owns the ordinary shares or ADSs and if we comply with certain reporting requirements. However, we do not intend to supply US holders with the information needed to report income and gain pursuant to a“qualified electing fund” election in the event that we are classified as a PFIC.
We believe that we were not a PFIC for our 2013 fiscal year ended June 30, 2013. However, under the PFIC rules income
and assets are require to be measured and classified in accordance with US federal income tax principles. Our analysis is based on our financial statements as prepared in accordance with IFRS, which may substantially differ from US federal income tax principles.Therefore, no assurance can be given that we were not a PFIC for our 2013 fiscal year ended June 30, 2013. Furthermore, the tests for determining whether we would be a PFIC for any taxable year are applied annually and it is difficult to make accurate predictions of future income and assets, which are relevant to this determination. In addition, certain factors in the PFIC determination, such as reductions in the market value of our capital stock, are not within our control and can cause us to become a PFIC. Accordingly, there can be no assurance that we will not become a PFIC.
The rules relating to PFICs are very complex. US holders are urged to consult their tax advisors regarding the application of the PFIC rules to their investments in our ordinary shares or ADSs. background image96
Information Reporting and Backup Withholding

Payments made in the United States or through certain US-related financial intermediaries of dividends or the proceeds of
the sale or other disposition of our ordinary shares or ADSs may be subject to information reporting and US federal backup withholding if the recipient of such payment is not an “exempt recipient” and fails to supply certain identifying information, such as an accurate taxpayer identification number, in the required manner. Generally, individuals are not exempt recipients, whereas corporations and certain other entities generally are exempt recipients. The backup withholding tax rate is currently 28%. Paymentsmade with respect to our ordinary shares or ADSs to a US holder must be reported to the Internal Revenue Service, unless the USholder is an exempt recipient or otherwise establishes an exemption. Any amount withheld from a payment to a US holder under thebackup withholding rules is refundable or allowable as a credit against the holder's US federal income tax, provided that the required information is furnished to the Internal Revenue Service.

Under the Hiring Incentives to Restore Employment Act enacted on March 18, 2010, in taxable years beginning after the
date of enactment, a US holder may be required to submit to the Internal Revenue Service certain information with respect to such US holder's beneficial ownership of ordinary shares or ADSs, if such ordinary shares or ADSs are not held on such US holder's behalf by a financial institution. This new law also imposes penalties if a US holder is required to submit such information to the Internal Revenue Service and fails to do so.

US holders should consult their tax advisors regarding application of the information reporting and backup withholding
rules.
10F. DIVIDENDS AND PAYING AGENTS

On August 20, 2013, we declared a dividend which, in total, amounted to R54.0 million (14.0 cents per ordinary share).
Dividends tax is 15% of the dividend paid, lower rates can apply for foreign beneficial owners and there are also certain exemptions that apply. The dividends tax will be withheld from the dividend payment. There are no dividend restrictions.
Date of entitlement:


October 11, 2013
Approximate date of conversion:

October 18, 2013
Approximate payment date:

October 21, 2013
Paying agents:



Link Market Services (US and SA)





St James’s Corporate Services Limited (UK)





Computershare (Australia)
10G. STATEMENT BY EXPERTS
Not
applicable.
10H. DOCUMENTS ON DISPLAY

You may request a copy of our US Securities and Exchange Commission filings, at no cost, by writing or calling us at
DRDGOLD Limited, P.O. Box 390, Maraisburg, Johannesburg, South Africa 1700. Attn: Group Company Secretary. Tel No. +27-11-470-2600. A copy of each report submitted in accordance with applicable United States law is available for public review at ourprincipal executive offices.

A copy of each document concerning us that is referred to in this Annual Report on Form 20-F, is available for public view
at our principal executive offices at DRDGOLD Limited, Quadrum Office Park, Building 1, 50 Constantia Boulevard, Constantia Kloof Ext.28, South Africa 1709.
10I. SUBSIDIARY INFORMATION
Not
applicable. background image97
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
General

In the normal course of our operations, we are exposed to market risk, including commodity price, foreign currency, interest
and credit risks. We do not hold or issue derivative financial instruments for speculative purposes, nor do we hedge forward goldsales.

Refer to Item 18. ‘‘Financial Statements - Note 27 - Financial instruments’’ of the consolidated financial statements for a
qualitative and quantitative discussion of our exposure to these market risks.
Commodity price risk

The market price of gold has a significant effect on our results of operations, our ability and the ability of our subsidiaries to
pay dividends and undertake capital expenditures, and the market price of our ordinary shares or ADSs. Historically, gold prices have fluctuated widely and are affected by numerous industry factors over which we have no control. The aggregate effect of these factors on the gold price is impossible for us to predict. The price of gold may not remain at a level allowing us to economically exploit our reserves. It is our policy not to hedge this commodity price risk.
Concentration of credit risk
Credit risk is the risk of financial loss to us if a customer or counterparty to a financial instrument fails to meet its
contractual obligations, and arises principally from our receivables from customers and investment securities
.

Our financial instruments do not represent a concentration of credit risk, because we deal with a variety of major banks and
financial institutions located in South Africa after evaluating the credit ratings of the representative financial institutions.Furthermore, our trade receivables and loans are regularly monitored and assessed for recoverability. Where it is appropriate, an impairment loss is raised. In addition, our South African operations deliver their gold to Rand Refinery Proprietary Limited (Rand Refinery), which refines the gold to saleable purity levels and then sells the gold, on behalf of the South African operations, on the bullion market. The gold is sold by Rand Refinery usually on the same day as it is delivered and settlement is made within two days.
Foreign currency risk

Our reporting currency is the South African rand. Although gold is sold in US dollars, the Company is obliged to convert
this into rands. We are thus exposed to fluctuations in the US dollar/ rand exchange rate. Foreign exchange fluctuations affect the cash flow that we will realize from our operations as gold is sold in US dollars, while production costs are incurred primarily in rands. Our results are positively affected when the US dollar strengthens against the rand and adversely affected when the US dollar weakens against the rand. Our cash and cash equivalent balances are held in US dollars and rands; holdings denominated in othercurrencies are relatively insignificant.
Long-term debt
Set out below is an analysis of our debt as at June 30, 2013, analyzed between fixed and variable interest rates. All of our
long-term debt is denominated in South African rand.


Total

R'000
Interest rateVariable rate
  ......................................................................................................

167,626
Weighted average interest rate ..........................................................................
9.1% - 10.2%
Fixed rate
  ..........................................................................................................

-
Weighted average interest rate ..........................................................................

-
Total
  .................................................................................................................
167,626
Repayment period2014
  ..................................................................................................................

24,294
2015
  ..................................................................................................................

143,332
Total
  .................................................................................................................
167,626

Based on our fiscal 2013 financial results, a hypothetical 10% (increase)/decrease in interest rate activity would
(increase)/decrease our interest expense by R1.7 million. background image98
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
12A. DEBT SECURITIES
Not
applicable.
12B. WARRANTS AND RIGHTS
Not
applicable.
12C. OTHER SECURITIES
Not
applicable.
12D. AMERICAN DEPOSITARY SHARES
Depositary Fees and Charges

DRDGOLD’s American Depository Shares, or ADSs, each representing ten of DRDGOLD’s ordinary shares, are traded on
the New York Stock Exchange, or NYSE under the symbol “DRD” (until December 29, 2011 our ADSs were traded on the Nasdaq Capital Market under the symbol “DROOY”). The ADSs are evidenced by American Depository Receipts, or ADRs, issued by The Bank of New York Mellon, as Depository under the Amended and Restated Deposit Agreement dated as of August 12, 1996, as amended and restated as of October 2, 1996, as further amended and restated as of August 6, 1998, as further amended and restated July 23, 2007, among DRDGOLD Limited, The Bank of New York Mellon and owners and beneficial owners of ADRs from time to time. ADR holders may have to pay the following service fees to the Depositary:
Service
Fees (USD)
Issuance of ADSs, including issuances resulting from a distribution of ordinary shares or rights
  ......................................................................................................
$5.00 (or less) per 100 ADSs (or
portion thereof)
1
Cancellation of ADSs for the purpose of withdrawal, including if the Deposit Agreement terminates
  ...........................................................................................
$5.00 (or less) per 100 ADSs (or
portion thereof)
1
Distribution of cash dividends or other cash distributions
  ....................................... 2 cents (or less) per ADS (or portion
thereof)
2
Distribution of securities distributed to holders of deposited securities which are distributed by the Depositary to ADS registered holders
$5.00 (or less) per 100 ADSs (or
portion thereof)
2
In addition, ADR holders are responsible for certain fees and expenses incurred by the Depositary on their behalf including
(1) taxes and other governmental charges, (2) such registration fees as may from time to time be in effect for the registration of transfers of ordinary shares generally on the share register and applicable to transfers of ordinary shares to the name of the Depositary or its nominee or the Custodian or its nominee on the making of deposits or withdrawals, (3) such cable, telex and facsimile transmission expenses as are expressly provided in the Deposit Agreement, and (4) such expenses as are incurred by the Depositary in the conversion of foreign currency to U.S. Dollars.
The Depositary collects its fees for delivery and surrender of ADSs directly from investors depositing or surrendering ADSs
for the purpose of withdrawal or from intermediaries acting for them. The Depositary, collects fees for making distributions toinvestors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The Depositary may collect its annual fee for depositary services by deductions from cash distributions or by directly billing investors or by charging the book-entry system accounts of participants acting for them. The Depositary may generally refuse to provide fee-attracting services until its fees for those services are paid.
Depositary Payments for Fiscal 2013
For the fiscal year ended June 30, 2013, The Bank of New York Mellon, as Depositary, has agreed to reimburse DRDGOLD
an amount of $483,680.81 mainly for contributions towards the Company’s investor relations activities (including investor meetings,conferences and fees of investor relations service vendors).

1
These fees are typically paid to the Depositary by the brokers on behalf of their clients receiving the newly-issued ADSs from the Depositary
or delivering the ADSs to the Depositary for cancellation. The brokers in turn charge these transaction fees to their clients.
2
In practice, the Depositary has not collected these fees. If collected, such fees are offset against the related distribution made to the ADR
holder. background image99
PART II
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

There have been no material defaults in the payment of principal, interest, a sinking or purchase fund installment, or any
other material defaults with respect to any indebtedness of ours.
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
Not
  applicable.

ITEM 15. CONTROLS AND PROCEDURES
15A. Disclosure Controls and Procedures
As of June 30, 2013, our management, with the participation of our Chief Executive Officer and Chief Financial Officer
has evaluated the effectiveness of our disclosure controls and procedures (as this term is defined under the rules of the SEC). Our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of June 30, 2013.
Our disclosure controls and procedures are designed to provide reasonable assurance that information required to be
disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the applicable rules and forms and that such information required to be disclosed by us in the reports we file or submit under the Securities Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.
There are inherent limitations in the effectiveness of any system of disclosure controls and procedures. These limitations
include the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, any suchsystem can only provide reasonable assurance of achieving the desired control objectives.
15B. Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting.
Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer and effected by our board, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. Under Section 404 of the Sarbanes Oxley Act of 2002, management is required to assess our internal controls surrounding the financial reporting process asat the end of each fiscal year. Based on that assessment, management is to determine whether or not our internal controls over financial reporting are effective.
Internal control over financial reporting includes those policies and procedures that:
· pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and   
  dispositions of our assets; · provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements   
  in accordance with IFRS, and that our receipts and expenditures are being made only in accordance with   
  authorizations of our management and board; and · provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition   
  of our assets that could have a material effect on our financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Instead, it must be noted that even those systems that management deems to be effective can only provide reasonable assurance with respect to the preparation and presentation of our financial statements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or the degree of compliance with the policies and procedures.
Our management assessed the effectiveness of our internal control over financial reporting as of June 30, 2013. In
making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on our assessment and those criteria, our management concluded that as of June 30, 2013 our internal control over financial reporting was effective. background image100
15C. Independent Auditor’s Attestation Report
The effectiveness of internal control over financial reporting as of June 30, 2013 was audited by KPMG Inc.,
independent registered public accounting firm, as stated in their report on page F-1 of this Form 20-F.
15D. Changes in Internal Control Over Financial Reporting
Changes that have materially affected, or are reasonably likely to materially affect, our internal control over financial
reporting during the period covered by the annual report, need to be identified and reported as required by paragraph (d) of Rule13a-15.
During the year ended June 30, 2013, there have not been any changes in our internal control over financial reporting that
have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

Mr. R.P. Hume, Chairman of the Audit Committee, has been determined by our board to be an audit committee financial
expert within the meaning of the Sarbanes-Oxley Act, in accordance with the Rules of the New York Stock Exchange, or NYSE, and rules promulgated by the SEC and independent both under the New York Stock Exchange Rules and the South African Johannesburg Stock Exchange Rules. The board is satisfied that the skills, experience and attributes of the members of the auditcommittee are sufficient to enable those members to discharge the responsibilities of the audit committee.
ITEM 16B. CODE OF ETHICS
We have adopted a Code of Ethics and Conduct that applies to all senior executives including our Non-Executive
Chairman, the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and the Group Financial Manager and Financial Manager at each mining operation as well as all other employees. The Code of Ethics was last updated on February 9, 2012. The Code of Ethics and Conduct can be accessed on the Company’s website at www.drdgold.com.
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

KPMG Inc. has served as our independent public accountant for the fiscal years ending June 30, 2013, 2012 and 2011, for
which audited financial statements appear in this Annual Report. The Annual General Meeting elects the auditors annually.

The following table presents the aggregate fees for professional audit services and other services rendered by KPMG Inc. to
us in fiscal 2013 and 2012:
Auditors' remuneration
Year ended June
30,
20132012
R’000
R’000
Audit fees
  .......................................................................................................................................................... 6,702
10,019
Audit-related fees
  ..............................................................................................................................................-- Tax fees
  ............................................................................................................................................................-- All other fees
  ....................................................................................................................................................458
-
7,160 10,019
Audit Fees
Audit fees billed for the annual audit services engagement, which are those services that the external auditor reasonably can
provide, include the company audit; statutory audits; comfort letters and consents; attest services; and assistance with and review of documents filed with the SEC.
Audit-Related Fees
For fiscal 2013 and fiscal 2012, no audit-related fees were incurred.
Tax Fees

For fiscal 2013 and fiscal 2012, no fees have been billed for tax compliance, tax advice or tax planning services. background image101
All Other Fees

All other fees consist of all fees billed which are not included under audit fees, audit related fees or tax fees. The other
fees billed in 2013 related to agreed upon procedures consisting of a gap analysis on our Integrated Report for fiscal 2013, which is an annual report required by King III and provides an account of our operational, financial, economic, social and environmental performance, as well our governance, and limited assurance on specified items contained in our Sustainable Development Report for fiscal 2013, which is an annual report in line with the Global Reporting Initiative and provides an account of our economic,social and environmental performance. There were no such fees billed for in fiscal 2012.

The Audit Committee is directly responsible for recommending the appointment, re-appointment and removal of the
external auditors as well as the remuneration and terms of engagement of the external auditors. The committee pre-approves, andhas pre-approved, all non-audit services provided by the external auditors. The Audit Committee considered all of the fees mentioned above and determined that such fees are compatible with maintaining KPMG Inc.’s independence.
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Notapplicable.
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
Notapplicable.
ITEM 16F. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT
Notapplicable.
ITEM 16G. CORPORATE GOVERNANCE

As a foreign private issuer with shares listed on the NYSE, we are subject to corporate governance requirements imposed by
NYSE. Under section 303A.11 of the NYSE Listing Standards, a foreign private issuer such as us may follow its home country corporate governance practices in lieu of certain of the  NYSE Listing Standards on corporate governance. The following paragraphs summarize the significant differences between our corporate governance practices and those followed by U.S. companies listed onthe NYSE:
Independence of audit committee members
NYSE Listing Standards require a NYSE listed company to have an audit committee composed of at least three independent
members. A foreign private issuer may be exempted from the requirement that all members of the audit committee qualify as independent under NYSE Listing Standards Rules provided, among other requirements, that the members of the audit committee are independent under Exchange Act Rule 10A-3. As at September 30, 2013 all of our audit committee members are independent both under the NYSE Listing Standards and the South African Johannesburg Stock Exchange Rules.
Shareholder meeting quorum requirements
Section 310.00 of the NYSE Listing Standards provides that the quorum required for any meeting of holders of common
stock should be sufficiently high to insure a representative vote. Consistent with the practice of companies incorporated in South Africa, our Memorandum of Incorporation only requires a quorum of three members and we have elected to follow country rule.
Executive Sessions
Section 303A.03 of the NYSE Listing Standards provides that “non-management” directors of listed companies must meet
at regularly scheduled executive sessions in the absence of management. The JSE Listings Requirements makes no provision for such meetings, however the non-executive directors of DRDGOLD do meet without management on a regular basis but in an informal setting and no minutes are prepared.
Nominations Committee
Section 303A.04 of the NYSE Listing Standards provides listed companies must have a nominating/corporate governance
committee composed entirely of independent directors. The JSE Listings Requirements only require that the members of such a committee be non-executive directors, the majority of whom must be independent. DRDGOLD has such a nominations committee whose members are independent under both the NYSE Listings Standards and the JSE Listings Requirements.
ITEM 16H. MINE SAFETY DISCLOSURES
Not applicable. background image102
PART III
ITEM 17. FINANCIAL STATEMENTS
Not
  applicable.
ITEM 18. FINANCIAL STATEMENTS

The following annual financial statements and related auditor’s reports are filed as part of this Annual Report.
Page
Report of the independent registered public accounting firm ................................................................................................
F-1
Consolidated statement of profit or loss and other comprehensive income for the years ended June 30, 2013, 2012
and 2011
  ..........................................................................................................................................................................
F-2 to F-3
Consolidated statement of financial position at June 30, 2013 and 2012.
  ............................................................................
F-4
Consolidated statement of changes in equity for the years ended June 30, 2013, 2012 and 2011.
  ........................................
F-5
Consolidated statement of cash flows for the years ended June 30, 2013, 2012 and 2011.
  ...................................................
F-6
Notes to the financial statements.
  .......................................................................................................................................
F-7  to  F-71 background imageF-1
Report of the Independent Registered Public Accounting Firm
The Board of Directors and Shareholders of DRDGOLD Limited.We have audited the accompanying consolidated statement of financial position of DRDGOLD Limited and its subsidiaries as of June 30, 2013 and 2012, and the related consolidated statements of profit or loss and other comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended June 30, 2013. We also have audited DRDGOLD Limited’s internal control over financial reporting as of June 30, 2013, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). DRDGOLD Limited’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on these consolidated financial statements and an opinion on DRDGOLD Limited’s internal control over financial reporting based on our audits.
  We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Thosestandards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
  A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with International Financial Reporting Standards. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with International Financial Reporting Standards, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
  Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
  In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of DRDGOLD Limited and subsidiaries as of June 30, 2013 and 2012, and the results of their operations and cash flows for each of theyears in the three-year period ended June 30, 2013, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. Also in our opinion, DRDGOLD Limited maintained, in all material respects, effective internal control over financial reporting as of June 30, 2013, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
/s/ KPMG Inc. KPMG Inc. Registered Accountants and Auditors Johannesburg, Republic of South Africa October 25, 2013 background imageF-2
DRDGOLD Limited   CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME   for the year ended June 30, 2013
Continuing operations
Discontinued operations
1
Total
operations
2013
2012
2011
2013
2012
2011
201320122011
NoteR'000
R'000
R’000
R'000
R'000
R’000
R'000R'000R'000
Revenue 3
2,076,496
1,764,191
1,379,459
-
1,240,073
1,185,860
2,076,496
3,004,264
2,565,319
Cost of sales

(1,639,377)
(1,400,268)
(1,179,430)
-
(1,101,594)
(1,164,118)
(1,639,377)
(2,501,862) (2,343,548)
Operating costs

(1,497,439)
(1,231,020)
(1,041,658)
-
(1,061,770)
(1,101,953)
(1,497,439)
(2,292,790) (2,143,611)
Depreciation 9
(143,766)
(119,189)
(98,281)
-
(1,661)
(32,638)
(143,766)
(120,850) (130,919)
Retrenchment costs
4
(565)
-
(839)
-
(43,747)
-
(565)
(43,747) (839)
Movement in provision for environmental rehabilitation
17
(15,334)
(59,486)
(46,918)
-
301
(5,649)
(15,334)
(59,185)
(52,567)
Movement in gold in progress

17,727
9,427
8,266
-
5,283
(23,878)
17,727
14,710 (15,612)
Gross profit from operating activities437,119
363,923
200,029
-
138,479
21,742
437,119
502,402 221,771
Impairments 4
(238,001)
(1,100)
(1,090)
-
-
(546,566)
(238,001)
(1,100) (547,656)
Administration expenses and general costs

(78,070)
(110,619)
(86,305)
-
(10,918)
(1,781)
(78,070)
(121,537) (88,086)
Results from operating activities
121,048
252,204
112,634
-
127,561
(526,605)
121,048
379,765 (413,971)
Finance income
5
65,968
24,446
17,064
-
8,994
35,728
65,968
33,440
52,792
Finance expenses
6
(41,975)
(15,678)
(16,606)
-
(2,028)
(5,441)
(41,975)
(17,706)
  (22,047)
Profit/(loss) before taxation
145,041
260,972
113,092
-
134,527
(496,318)
145,041
395,499 (383,226)
Income tax
7
(44,941)
(8,010)
(29,593)
-
-
(2,559)
(44,941)
(8,010)
  (32,152)
Profit/(loss) before loss on disposal of discontinued operation100,100
252,962
83,499
-
134,527
(498,877)
100,100
387,489 (415,378)
Loss on disposal of discontinued operations11
-
-
-
-
(10,532)
-
-
(10,532)
-
Profit/(loss) for the year
100,100
252,962
83,499
-
123,995
(498,877)
100,100
376,957 (415,378)
Attributable to:Equity owners of the parent

59,194
217,301
67,070
-
91,374
(354,985)
59,194
308,675 (287,915)
Non-controlling interest

40,906
35,661
16,429
-
32,621
(143,892)
40,906
68,282
(127,463)
Profit/(loss) for the year
100,100
252,962
83,499
-
123,995
(498,877)
100,100
376,957
  (415,378)

1
The discontinued operations relate to the disposal of Blyvooruitzicht Gold Mining Company Limited (Blyvoor) on June 1, 2012. background imageF-3
DRDGOLD Limited   CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (continued)   for the year ended June 30, 2013
Continuing operations
Discontinued operations
1
Totaloperations


2013
2012
2011
2013
2012
2011
2013
2012
2011
Note
R'000
R'000
R'000
R'000
R'000
R'000
R'000
R'000
R'000
Other comprehensive income, net of tax Items that are or may be reclassified subsequently to profit or loss




Net foreign exchange translation reserve
9,134
(3,999)
747
-
-
-
9,134
(3,999)
747
Foreign exchange profit/(loss) on translation
9,134
(3,999)
747
-
-
-
9,134
(3,999)
747
Deferred taxation thereon
-
-
-
-
-
-
-
-
-
Net fair value adjustment on available-for-sale investment
34,570
16,480
116
-
2,703
159
34,570
19,183
275
Fair value adjustment on available-for-sale investment
(72,113)
20,572
96
-
2,328
118
(72,113)
22,900
214
Impairment of available-for-sale investment reclassified to profit or loss
101,261
-
-
-
-
-
101,261
-
-
Non-controlling interest in fair value adjustment on available-for-sale investment
951
379
20
-
375
41
951
754
61
Deferred taxation thereon
4,471
(4,471)
-
-
-
-
4,471
(4,471)
-
Net gain on disposal of available-for-sale financial assets reclassified to profit or loss
-
-
-
-
(6,656)
-
-
(6,656)
-
Net gain on disposal of available-for-sale financial assets
-
-
-
-
(4,925)
-
-
(4,925)
-
Non-controlling interest in net gain on disposal of available-for-sale financial assets
-
-
-
-
(1,731)
-
-
(1,731)
-
Deferred taxation thereon
-
-
-
-
-
-
-
-
-
Total comprehensive income for the year
143,804
265,443
84,362
-
120,042
(498,718)
143,804
385,485
(414,356)
Attributable to:Equity owners of the parent
101,947
229,403
67,913
-
88,777
(354,867)
101,947
318,180
(286,954)
Non-controlling interest
41,857
36,040
16,449
-
31,265
(143,851)
41,857
67,305
(127,402)
Total comprehensive income for the year
143,804
265,443
84,362
-
120,042
(498,718)
143,804
385,485
(414,356)



Earnings per share attributable to equity owners of the parent



Basic earnings/(loss) per share (cents)
8
16
57
17
-
23
(92)
16
80
(75)
Diluted earnings/(loss) per share (cents)
8
16
56
17
-
24
(92)
16
80
(75)
The accompanying notes are an integral part of these consolidated financial statements.

1
The discontinued operations relate to the disposal of Blyvoor on June 1, 2012. background imageF-4
DRDGOLD LimitedCONSOLIDATED STATEMENT OF FINANCIAL POSITION at June 30, 2013
20132012
Note
R’000R’000
ASSETS Non-current assets
2,066,292
2,021,594
Property, plant and equipment
9
1,756,333
1,641,557
Non-current investments and other assets
10
307,070
341,752
Deferred tax asset
19
2,889
38,285
Current assets
604,853
470,695
Inventories
14
138,847
105,840
Trade and other receivables
15
82,745
61,896
Current tax asset

6,092
4,453
Cash and cash equivalents
24
377,169
298,506
Total assets
2,671,145
2,492,289
EQUITY AND LIABILITIES Equity
1,648,269
1,633,921
Equity of the owners of the parent
16
1,427,035
1,497,192
Non-controlling interest

221,234
136,729
Non-current liabilities
777,073
597,331
Provision for environmental rehabilitation
17
524,323
504,327
Post-retirement and other employee benefits
18
8,653
5,972
Deferred tax liability
19
100,765
87,032
Loans and borrowings
20
143,332
-
Current liabilities
245,803
261,037
Trade and other payables

220,491
227,511
Loans and borrowings
20
24,294
30,690
Post-retirement and other employee benefits
18
1,018
-
Current tax liability
-
2,836
Total equity and liabilities
2,671,145
2,492,289
The accompanying notes are an integral part of these consolidated financial statements. background imageF-5




DRDGOLD Limited CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended June 30, 2013
Number
of
ordinary
shares
Number of
cumulative
preference
shares
Share capital
R’000
Cumulative
preference
share
capital
R’000
Revaluation
and other
reserves
1
R’000
Retained
earnings
R’000
Equity of the
owners of the
parent
R’000
Non-
controlling
interest
R’000
Total equity
R’000
Balance at June 30, 2010
384,884,379
5,000,000
4,133,318
500
198,869
(2,782,056)
1,550,631
99,330
1,649,961
Share issue expense


(714)
(714)
(714)
Share-based payments




3,519
3,519
3,519
Dividend on ordinary share capital




(19,244)
(19,244)
(19,244)
Total comprehensive income for the year2




961
(287,915)
(286,954)
(127,402)
(414,356)
Balance at June 30, 2011
384,884,379
5,000,000
4,132,604
500
203,349
(3,089,215)
1,247,238
(28,072)
1,219,166
Staff options exercised
499,388
1,818
1,818
1,818
Share issue expenses
(555)
(555)
(555)
Share-based payments
4,133
4,133
4,133
Non-controlling interest on disposal of subsidiary
97,496
97,496
Transfer of reserves on disposal of subsidiary
(11,469)
11,469
-
-
Treasury shares acquired through subsidiary
(58,228)
(58,228)
(58,228)
Treasury shares disposed of by subsidiary
13,478
13,478
13,478
Dividend on ordinary share capital
(28,872)
(28,872)
(28,872)
Total comprehensive income for the year2
9,062
309,118
318,180
67,305
385,485
Balance at June 30, 2012
385,383,767
5,000,000
4,089,117
500
205,075
(2,797,500)
1,497,192
136,729
1,633,921
Share issue expenses
(180)

(180)
(180)
Share-based payments

1,166
1,166
1,166
Share option buy-out

(24,052)
(24,052)
(24,052)
Non-controlling interest on disposal of subsidiary

(58,384)
(58,384)
58,384
-
Treasury shares disposed of by subsidiary
350

350
350
Dividend on ordinary share capital

(91,004)
(91,004)
(15,736)
(106,740)
Total comprehensive income for the year2

42,753
59,194
101,947
41,857
143,804
Balance at June 30, 2013
385,383,767
5,000,000
4,089,287
500
224,942
(2,887,694)
1,427,035
221,234
1,648,269
The accompanying notes are an integral part of these consolidated financial statements.

1
Revaluation and other reserves comprise share-based payment reserves, foreign currency translation reserve and asset revaluation reserves. The foreign exchange difference arises on the translation of a foreign joint venture in
Zimbabwe.   2 Refer to the consolidated statement of profit or loss and other comprehensive income for a detailed analysis of total comprehensive income for the year. background imageF-6
DRDGOLD Limited CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended June 30, 2013

2013
2012
2011
Note
R’000
R’000R’000
CASH FLOWS FROM OPERATING ACTIVITIESCash received from sales of precious metals

2,076,496
3,004,264 2,565,319
Cash paid to suppliers and employees

(1,634,128)
(2,380,681) (2,249,516)
Cash generated by operations
21
442,368
623,583 315,803
Finance income

27,337
18,243 13,384
Dividends received

32,470
34 6,013
Finance expenses

(4,097)
(3,382) (4,975)
Income tax received/(paid)

4,185
(17,308) (6,212)
Net cash inflow from operating activities
502,263
621,170
  324,013
CASH FLOWS FROM INVESTING ACTIVITIES



Acquisition of investments

(58,292)
(63,226)
  -
Cash flow on disposal of investments

1,839
- -
Additions to property, plant and equipment

(382,424)
(333,175) (317,250)
Proceeds on disposal of property, plant and equipment

31,970
12,470
  4,662
Environmental rehabilitation payments

(22,476)
(19,766) (22,577)
Cash flow on disposal of subsidiaries, net of cash disposed
22
-
(9,584) -
Net cash outflow from investing activities

(429,383)
(413,281) (335,165)
CASH FLOWS FROM FINANCING ACTIVITIES



Proceeds from the issue of shares

-
1,818
  -
Share issue expenses

(180)
(555)
  (714)
Acquisition of treasury shares

-
(58,228)
  -
Proceeds on disposal of treasury shares

350
13,478 -
Advances of loans and borrowings

163,332
- 109,636
Repayments of loans and borrowings

(30,690)
(96,194)
  (8,332)
Share option buy-out
(24,052)
- -
Dividends paid

(103,063)
(28,872)
  (19,244)
Net cash inflow/(outflow) from financing activities

5,697
(168,553)
  81,346
NET INCREASE IN CASH AND CASH EQUIVALENTS78,577
39,336
  70,194
Cash and cash equivalents at beginning of the year

298,506
259,112 188,152
Foreign exchange movements
86
58 766
Cash and cash equivalents at the end of the year
24
377,169
298,506 259,112
The accompanying notes are an integral part of these consolidated financial statements. background imageF-7
NOTES TO THE FINANCIAL STATEMENTSfor the year ended June 30, 2013
1. ACCOUNTING POLICIES
DRDGOLD Limited (‘the company’) is a company domiciled in South Africa. The consolidated financial statements of the company for the year ended June 30, 2013 comprise the company and its subsidiaries (together referred to as the group) and the group’s interests in an associate and a jointly controlled entity.
STATEMENT OF COMPLIANCE
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and its interpretations adopted by the International Accounting Standards Board (IASB).
The financial statements were approved by the Board of Directors on September 16, 2013.
BASIS OF MEASUREMENT
The financial statements are prepared on the historical cost basis, unless otherwise stated.
FUNCTIONAL AND PRESENTATION CURRENCY
The consolidated financial statements are presented in South African Rands, which is the company's functional currency. All financial information presented in South African Rands has been rounded to the nearest thousand.
USE OF ESTIMATES AND JUDGMENTS
The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the reporting date, and the reported amounts of revenues and expenses during the reporting period. The determination of estimates requires the exercise of judgment based on various assumptions and other factors such as historical experience, current and expected economic conditions, and in some cases actuarial techniques. Actual results could differ from those estimates.
  The estimates and underlying assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable in the circumstances. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.
  The judgments that management has applied in the application of accounting policies, and the estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below:
(a)Recoverable amount of mining assets and depreciation
The recoverable amounts of mining assets are generally determined utilizing discounted future cash flows. Management also considers such factors as the market capitalization of the group, the quality of the individual ore body and the country risk in determining the recoverable amount.  During the year under review, the group calculated a recoverable amount based on updated life-of-mine plans, a gold price of R410,473  per kilogram (2012:  441,936  per kilogram) in year one escalating at an average of 6.7%  (2012:  5.3%) per year, and a discount  rate of 14.9% (2012: 14.4%). At a 10% lower gold price received of R369,425 per kilogram, a R1,097.4 million impairment would be recognized and at a 1.9 percentage points (13%) increase in the discount rate to 16.8%, the group would  begin impairment  of the mining  assets (refer to note 9).
  The calculation of the units-of-production rate of depreciation could be affected if actual production in the future is different from current forecast production based on proved and probable Ore Reserves.  This would generally arise when there are significant changes in any of the factors or assumptions used in estimating Ore Reserves.  Factors could include:
· changes in proved and probable Ore Reserves; · the grade of Ore Reserves may vary significantly from time to time; · differences between actual commodity prices and commodity price assumptions; · unforeseen operational issues at mine sites; · changes in capital, operating, mining processing and reclamation costs, discount rates and foreign exchange rates;and · changes in Ore Reserves which could similarly affect the useful lives of assets depreciated on the straight-line basis,where those lives are limited to the life of the mine. background imageF-8
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
1. ACCOUNTING POLICIES (continued)
USE OF ESTIMATES AND JUDGMENTS (continued)
(b)Valuation of financial instruments
If the value of a financial instrument cannot be obtained from an active market, the group has established fair value by using valuation techniques. These include the use of recent arm’s-length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis and option pricing models, refined to reflect the issuer’s specific circumstances.
(c)Estimate of exposure and liabilities with regard to rehabilitation costs
Estimated provisions for environmental rehabilitation, comprising pollution control rehabilitation and mine closure, are based on the group’s environmental management plans in compliance with current technological, environmental and regulatory requirements. An average discount rate of 7.6%, average inflation rate of 5.4% and expected life of mine according to the life-of-mine plans were utilized in the calculation of the estimated net present value of the rehabilitation liability (2012: discount rate of 7.3% and inflation rate of 5.4%) (refer note 17).
(d)Estimate of taxation
The group is subject to income tax in South Africa and Zimbabwe. Significant judgment is required in determining income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The group recognizes liabilities for anticipated tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will have an impact on the income tax and deferred tax provisions in the period in which such determination is made.
(e)Fair value of share-based compensation
The fair value of options granted is determined using the Black-Scholes option pricing model. The significant inputs into the model are: vesting period and conditions, risk-free interest rate, volatility, market price on date of grant and issue price of grant. Other inputs are: performance criteria and employee retention rate (Refer to notes 18 for detail on the share option scheme and phantom share scheme.)
(f)Gold in process
Gold in process in certain plants is estimated based on the metallurgist’s best estimate of the gold content and grade thereof.
(g)Assessment of contingencies
Contingencies will realize only when one or more future events occur or fail to occur. The exercise of significant judgment and estimates of the outcome of future events are required during the assessment of the impact of such contingencies.
(h)Ore Reserves estimate
At the end of each financial year, the estimate of proved and probable Ore Reserves is updated.  Depreciation of mining assets is prospectively adjusted, based on these changes.
  Ore Reserves are estimates of the amount of product that can be economically and legally extracted from the group’s properties.  In order to calculate Ore Reserves, estimates and assumptions are required about a range of geological, technical and economic factors, including but not limited to quantities, grades, production techniques, recovery rates, production costs, transport costs, commodity demand, commodity prices and exchange rates. background imageF-9
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
1. ACCOUNTING POLICIES (continued)
USE OF ESTIMATES AND JUDGMENTS (continued)
(h)Ore Reserves estimate (continued)
Estimating the quantity and/or grade of Ore Reserves requires the size, shape and depth of ore bodies to be determined by analyzing geological data such as the logging and assaying of drill samples. This process may require complex and difficult geological judgments and calculations to interpret the data.
  Because the economic assumptions used to estimate Ore Reserves change from period to period and because additional geological data is generated during the course of operations, estimates of Ore Reserves may change from period to period.  Changes in reported Ore Reserves may affect the group’s financial results and financial position in a number of ways including the following:
· asset carrying values may be affected due to changes in estimated future cash flows; · depreciation, depletion and amortization charged in profit or loss may change where such charges are determinedby the units-of-production method, or where the useful economic lives of assets change; · decommissioning, site restoration and environmental provisions may change where changes in estimated OreReserves affect expectations about the timing or cost of these activities; and · the carrying value of deferred tax assets may change due to changes in estimates of the likely recovery of the taxbenefits.
These adjustments are made prospectively where relevant.
(i)Estimate of deferred taxation
The amount recognized as a deferred tax asset is generally determined utilizing discounted future cash flows aligned to estimates used in the calculation of depreciation and rehabilitation liabilities. Management considers all factors that could possibly affect the probability that future taxable profit will be available against which unused tax credits can be utilized. These factors include profitability of operations and an estimate of the gold price. The amount recognized as a deferred tax asset is sensitive to the current gold spot price. The amount recognized at June 30, 2013 is based on a future gold price received of R410,473 per kilogram (2012: R441,936 per kilogram) in year one, escalating at an average of 6.7% (2012: 5.3%) per year.
SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently by all entities in the group to all periods presented, except as explained below under ‘New standards, interpretations and amendments to standards and interpretations adopted’.
New standards, interpretations and amendments to standards and interpretations adopted
The group adopted the following new standards, amendments to standards and interpretations, which are applicable to the group:
IAS 1 amendments – Presentation of Item of Other Comprehensive IncomeThe amendments:
· require that an entity presents separately the items of other comprehensive income that would be reclassified to profit orloss in the future if certain conditions are met, from those that would never be classified to profit or loss; and · change the title of the statement of profit or loss and other comprehensive income to the statement of profit or loss andother comprehensive income. An entity, however, is still allowed to use other titles.
The amendments do not address which items are presented in other comprehensive income or which items need to be reclassified. The requirements of other IFRSs continue to apply in this regard.These amendments did not have any effect on the financial position or financial performance of the group. background imageF-10
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
1. ACCOUNTING POLICIES (continued)
New accounting standardsCertain new accounting standards and amendments to accounting standards have been published that have various effective dates. These new standards and amendments to accounting standards have not been early adopted by the group and a reliable estimate of the impact of the adoption thereof for the group cannot yet be determined for some standards.
  At the date of authorization of these financial statements, the following relevant standards and amendments to accounting standards were in issue but not yet effective. The group expects to adopt the standards and amendments to accounting standards when effective:
Standard/interpretationEffective
date
IFRS 13
Fair Value Measurement
Annual periods commencing on or after January 1, 2013 1
IFRS 10, IFRS 11 and IFRS 12
Consolidated Financial Statements, Joint Arrangements and disclosure of interests in other entities
Annual periods commencing on or after January 1, 2013 1
IAS 19 amended 2011
Employee Benefits
Annual periods commencing on or after January 1, 2013
(2)
IAS 28
Investments in Associates and Joint Ventures (2011)
Annual periods commencing on or after January 1, 2013 1
IFRS
7
amendment
Disclosures – offsetting financial assets and financial liabilities
Annual periods commencing on or after January 1, 2013 1
IFRIC 20
Stripping Costs in the Production Phase of a Surface Mine
Annual periods commencing on or after January 1, 2013 1
IAS 32
Offsetting Financial Assets and Financial Liabilities
Annual periods commencing on or after January 1, 2014 1
IAS 36
Recoverable amount disclosures for non-financial assets
Annual periods commencing on or after January 1, 2014 1
IFRS 9
Financial Instruments
Annual periods commencing on or after January 1, 2015 1
(1)The impact of this is under investigation. (2)The group’s accounting policy is to recognize actuarial gains/losses in profit or loss. When the amendments come into effect the
accounting policy will have to be changed to recognize the actuarial gains/losses in other comprehensive income. The impact of the other amendments has not been assessed.
Each of these standards and interpretations is described briefly below:IFRS 13 – Fair Value MeasurementIFRS 13 replaces the fair value measurement guidance contained in individual IFRSs with a single source of fair value measurement guidance. It defines fair value, establishes a framework for measuring fair value and sets out disclosure requirements for fair value measurements. It explains how to measure fair value when it is required or permitted by other IFRSs.It does not introduce new requirements to measure assets or liabilities at fair value, nor does it eliminate the applicability of exceptions to fair value measurements that currently exist in certain standards. background imageF-11
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
1. ACCOUNTING POLICIES (continued)
IFRS 10 -  Consolidated Financial Statements, IFRS 11 - Joint Arrangements,  IFRS 12 -  Disclosures of  Interests in  Other EntitiesIFRS 10 introduces a single control model to determine whether an investee should be consolidated. As a result the group may need to change its consolidation conclusion in respect of its investees, which may lead to changes in the current accounting forthese investees.
Under IFRS 11, the structure of the joint arrangement, although still an important consideration, is no longer the major factor in determining the type of joint arrangement and therefore the subsequent accounting.
· The group’s interest in a joint operation, which is an arrangement in which the parties have rights to the assets andobligations for the liabilities, will be accounted for on the basis of the group’s interest in those assets and liabilities. · The group’s interest in a joint venture which is an arrangement in which the parties have rights to the net assets, will beequity accounted.
The group may need to reclassify its joint arrangements, which may lead to changes in the current accounting for these interests.IFRS 12 brings together in a single standard all the disclosure requirements about an entity’s interests in subsidiaries, jointarrangements, associates and unconsolidated structured entities. The group is currently assessing the disclosure requirements for interests in subsidiaries, interests in joint arrangements and associates and unconsolidated structured entities in comparison with the existing disclosures. IFRS 12 requires the disclosure of information about the nature, risks and financial effects of theseinterests.
IAS 19 amended 2011 – Employee BenefitsThe amended IAS 19 includes the following requirements:
· actuarial gains and losses are recognized immediately  in other comprehensive income; this change will remove thecorridor method and eliminate  the ability for entities to recognize  all changes  in the defined  benefit obligation  and inplan assets in profit or loss, which  currently is allowed under IAS 19; and · expected return on plan assets recognized in profit or loss is calculated based on the rate used to discount the definedbenefit obligation.
IAS 28 – Investments in Associates and Joint VenturesIAS 28 (2011)   supersedes IAS 28 (2008)   and makes the following amendments:
· IFRS 5 applies to an investment, or a portion of an investment, in an associate or a joint venture that meets the criteria tobe classified as held-for-sale; and · on cessation of significant influence or joint control, even if an investment in an associate becomes an investment in ajoint venture or vice versa, the entity does not remeasure the retained interest.
Amendments to IFRS 7 - Financial Instruments: Disclosures: Offsetting Financial Assets and Financial LiabilitiesThe amendments contain new disclosure requirements for financial assets and financial liabilities that are offset in the statement of financial position, or are subject to enforceable master netting arrangements or similar agreements. Where the group appliesoffsetting in the financial statements, it will be required to provide additional disclosures in this regard.IFRIC 20 – Stripping Costs in the Production Phase of a Surface MineThe   interpretation sets out principles for the recognition of production stripping costs in the statement of financial position. It is recognized that some production stripping in surface mining activity will benefit production in future periods and sets out criteria for capitalizing such costs.IAS 32 – Offsetting Financial Assets and Financial LiabilitiesThe amended IAS 32 requires disclosure of the actual and potential effects of netting arrangements on the entity’s financial positioning, clarifies current offsetting criteria and addresses inconsistencies in their application. background imageF-12
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
1. ACCOUNTING POLICIES (continued)
New accounting standards (continued)IAS 36 amendment - Recoverable Amount Disclosures for Non-Financial AssetsThe amendments reverse the unintended requirement in IFRS 13 Fair Value Measurement to disclose the recoverable amount of every cash-generating unit to which significant goodwill or indefinite-lived intangible assets have been allocated. Under the amendments, the recoverable amount is required to be disclosed only when an impairment loss has been recognized or reversed.IFRS 9 – Financial InstrumentsIFRS 9 deals with classification and measurement of financial assets and will replace the relevant sections of IAS 39.
ClassificationThe standard requires that financial assets be classified as either measured at:
· amortised  cost; or · fair value.
A financial asset is measured at amortized cost if:
· the objective of the business model is to hold assets in order to collect contractual  cash flows; and · the contractual terms give rise, on specified dates, to cash flows that are solely payments of principal and interest on theprincipal outstanding.
All other financial assets are measured at fair value, with fair value changes recognized in profit or loss. The standard eliminates the existing IAS 39 categories of held-to-maturity, available-for-sale and loans and receivables. Classification takes place oninitial recognition and subsequent changes are expected to be rare and subject to certain conditions. Embedded derivatives are no longer separated from hybrid contracts that have a financial asset host. Instead, the entire hybrid contract is assessed for classification using the principles above. IAS 39 continues to apply to derivatives embedded in financial liabilities.Fair value optionsAn entity may designate a financial instrument on initial recognition as measured at fair value through profit or loss only if iteliminates or significantly reduces a measurement or recognition inconsistency (accounting mismatch).Investments in equity instrumentsInvestments in equity instruments are generally measured at fair value with gains and losses recognized in profit or loss. For an investment in an equity instrument that is not held-for-trading, an entity may on initial recognition elect to present all fair value changes from the investment in other comprehensive income (OCI).  No amount recognized in OCI is ever reclassified to profit orloss at a later date. Dividends on such investments are recognized in profit or loss, rather than OCI, in accordance with             IAS 18 Revenue unless they clearly represent a recovery of the cost of the investment.
  IFRS 9 eliminates the exception in IAS 39 that allows investments in unquoted equity instruments, and related derivatives, for which a fair value cannot be determined reliably, to be measured at cost. These instruments are now measured at fair value although the standard notes that in some limited circumstances cost may be an appropriate estimate of fair value. The guidance inIAS 39 on impairments of financial assets and on hedge accounting continues to apply. However, as a result of the simplified classification requirements, the numerous impairment methods in IAS 39 have been reduced to a single impairment method.Financial liabilitiesUnder IFRS 9, the classification and measurement requirements of financial liabilities are the same as per IAS 39, except for the following two aspects:
· fair value changes  for financial liabilities (other  than financial guarantees and  loan  commitments)   designated at fairvalue through  profit or  loss, that are attributable to the changes  in the credit risk of the liability, will  be presented inOCI.  The  remaining      amount      of    the    fair    value    change    is    recognized    in    profit    or    loss.    However,      if    thisrequirement   creates  or enlarges  an  accounting   mismatch   in  profit  or  loss,  then  the  whole   fair  value  change  ispresented  in  profit  or  loss. The determination as to whether such presentation would create or enlarge an accountingmismatch is made on initial recognition and is not subsequently reassessed. · Under IFRS 9 derivative liabilities that are linked to and must be settled by delivery of an unquoted equity instrumentwhose fair value cannot be reliably measured, are measured at fair value.
IFRS 9 incorporates the guidance in IAS 39 dealing with fair value measurement and accounting for derivatives embedded in a host contract that is not a financial asset, as well as the requirements of IFRIC 9 Reassessment of Embedded Derivatives. background imageF-13
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
1. ACCOUNTING POLICIES (continued)
BASIS OF CONSOLIDATION
SubsidiariesSubsidiaries are entities controlled by the group. Control exists when the group has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that are currently exercisable or convertible are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.
  Changes in the group’s interest in a subsidiary which do not lead to loss of control are recorded as a transaction with equity owners in their capacity as equity owners and no profit or loss is recognized. Subsequent changes to an exercise price of an option or forward price forming part of the aforementioned transaction is recognized in profit or loss. When control is lost, the gain or loss is recognized in profit or loss and any remaining interest is recorded at the fair value on the transaction date, which is deemed to be the cost price, and, depending on the nature of the remaining investment, is either recognized as an associate, joint venture or as a financial instrument.
  Subsidiaries with a year-end on a date other than June 30 are included in the consolidated financial statements using the most recent financial results with no more than a three-month difference if it is impracticable to prepare financial statements at the group reporting date. Adjustments are made for material transactions and events between the group and subsidiary in the intervening period.The accounting policies of subsidiaries have been changed, where necessary, to align them with the policies adopted by the group.Special purpose entitiesThe group has established a special purpose entity for investment purposes. A special purpose entity is consolidated if, based on evaluation of the substance of its relationship with the group and the special purpose entity’s risks and rewards, the group concludes that it controls the special purpose entity. The special purpose entity controlled  by the group was established underterms that impose strict limitations on the decision-making  powers of the special purpose entity’s management  and that result in the group receiving the majority of the benefits related to the special purpose entity’s operations and net assets, being exposed to the majority of risks incident to the special purpose entity’s activities, and retaining the majority of the residual or ownership  risks relating to the special purpose entity or its assets. background imageF-14
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
1. ACCOUNTING POLICIES (continued)
BASIS OF CONSOLIDATION (continued)AssociatesAssociates are those entities in which the group has significant influence, but not control, over the financial and operating policies. Significant influence is presumed to exist when the group holds between 20% and 50% of the voting power of another entity. Associates are accounted for using the equity method and are initially recognized at cost. The group's investment in associates includes goodwill identified on acquisition and is presented net of any accumulated impairment losses. The consolidated financial statements include the group's share of the total recognized income and expenses and equity movements ofassociates, after adjustments to align the accounting policies with those of the group, from the date that significant influencecommences until the date that significant influence ceases.
  When the group's share of losses exceeds its interest in an associate, the group's carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the group has incurred legal or constructive obligations or made payments on behalf of an associate.Joint venturesJointly controlled entities are those entities for which the group has joint control over their activities. They are established by contractual agreement and require unanimous consent for strategic financial and operating decisions. The consolidated financialstatements include the group’s proportionate share of the entities’ assets, liabilities, revenue and expenses, with items of a similar nature on a line-by-line basis, from the date that joint control commences until the date that joint control ceases.Transactions eliminated on consolidationIntra-group balances, transactions and any unrealized gains and losses or income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealized gains arising from transactions withassociates and jointly controlled entities are eliminated to the extent of the group's interest in the entity. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.Acquisitions from entities under common controlBusiness combinations arising from transfers of interests in entities that are under the control of the shareholder which controls the group is accounted for as if the acquisitions had occurred at the beginning of the earliest comparative year presented or, if later, at the date that common control was established. For this purpose comparatives are restated. The assets and liabilities acquired are recognized at the carrying amounts recognized previously in the group controlling shareholder’s consolidated financial statements. Any excess (shortfall) of the purchase consideration over the net asset value acquired is recognized in equity as a notional distribution to (contribution by) owners.Allocation of losses to non-controlling interestsIn the absence of an agreement with non-controlling interest shareholders’ applicable losses in subsidiaries are allocated to non-controlling interest even if doing so causes the non-controlling interest to have a deficit balance. background imageF-15
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
1. ACCOUNTING POLICIES (continued)
FOREIGN CURRENCY
  Functional currencyThe functional currency is the currency of the primary economic environment in which the entity operates. This is determined byall companies in the group after analyzing all sources and influences of various currencies on their respective financial position and performance, in order to establish the currency with the most dominant influence as its functional currency.
  Each entity in the group has determined its own functional currency in accordance with the above process. The functional currency of the company is the South African Rand.Foreign currency transactionsTransactions in foreign currencies undertaken by group entities are translated at the foreign exchange rates ruling at the dates of these transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to the functional currency at the foreign exchange rate ruling at that date. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies, measured at fair value, are translated at foreign exchange rates ruling at the date that the fair value was determined. Foreign exchange differences arising on translation are recognized in profit or loss.Foreign operationsThe assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into South African Rands at the foreign exchange rates ruling at the reporting date. The revenues and expenses of foreign operations are translated to South African Rands at rates approximating the foreign exchange rates ruling at the dates of the transactions. Foreign exchange differences arising on retranslation are recognized in other comprehensive income and presented within equity in the foreign exchange translation reserve. When a foreign operation is disposed of the relevant amount in the foreign exchange translation reserve is transferred to profit or loss as part of the profit or loss on disposal. On partial disposal of a subsidiary that includes a foreign operation, the relevant portion of such cumulative amount is reattributed to non-controllinginterest.Net investment in foreign operationsForeign exchange gains and losses arising from a monetary item receivable from or payable to a foreign operation, the settlementof which is neither planned nor likely in the foreseeable future, are considered to form part of a net investment in a foreign operation and are recognized in other comprehensive income and presented within equity in the foreign exchange translation reserve in the consolidated financial statements. background imageF-16
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
1. ACCOUNTING POLICIES (continued)FINANCIAL INSTRUMENTSFinancial instruments recognized in the statement of financial position include investments, available-for-sale financial instruments, trade and other receivables, cash and cash equivalents, long- and short-term interest-bearing borrowings, trade andother payables and bank overdrafts. Financial instruments are initially recognized at fair value and include any directly attributable transaction costs, except those financial instruments measured at fair value through profit or loss. Subsequent to initial recognition, financial instruments are measured as described below.
  Financial assets and liabilities are off-set and the net amount presented in the statement of financial position when, and onlywhen, the group or company has the legal right to off-set the amounts, and intends either to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.
  Financial assets are derecognized when the contractual rights to the cash flows from the financial asset expire or to the extent that the group or company transfers substantially all the risks and rewards of ownership of the financial asset. Financial liabilities are derecognized when the obligation specified in the contract is discharged or cancelled or has expired. Any gain or loss on derecognition is taken to profit or loss.Loans and receivablesLoans and receivablesLoans and receivables (which include trade and other receivables) are measured at amortized cost, using the effective interest method, less any impairment losses.Cash and cash equivalentsCash and cash equivalents comprise cash on hand, demand deposits, and highly liquid investments which are readily convertible to known amounts of cash and subject to insignificant risk of changes in value. Subsequent to initial recognition, cash and cashequivalents are measured at amortized cost, which is equivalent to their fair value. Bank overdrafts that are repayable on demand and form an integral part of the group’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. Cash and cash equivalents include restricted cash which are short term in nature. Restricted cash which is long term in nature is classified as non-current and is similar in nature to rehabilitation trust funds. Restricted cash would typically be long term in nature when it is expected not to be able to be utilized for at least 12 months after the reporting date.Available-for-sale financial assetsThe group's investments in equity securities and certain debt securities are classified as available-for-sale financial assets.Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses and foreignexchange gains and losses on available-for-sale monetary items, are recognized in other comprehensive income and presented within equity in the revaluation and other reserves. When an investment is derecognized, the cumulative gain or loss in other comprehensive income is transferred to profit or loss.Other liabilitiesInterest-bearing borrowingsInterest-bearing borrowings (including preference share liabilities) are subsequently measured at amortized cost with any difference between the initial amount and the redemption value being recognized in profit or loss over the period of the borrowings on an effective interest basis. If the group revises its estimates of payments, the carrying amount of the liability is adjusted to reflect actual and revised estimated cash flows. The carrying amount is recalculated by computing the current value of estimated future cash flows at the liability's original effective interest rate. The adjustment is recognized as income or expense in profit or loss.Trade and other payablesSubsequent to initial recognition, trade and other payables are measured at amortized cost, using the effective interest method. background imageF-17
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
1. ACCOUNTING POLICIES (continued)PROPERTY, PLANT AND EQUIPMENT
  Owned assetsThe group's property, plant and equipment consist mainly of mining assets which comprise mining properties (including mineral rights), mine development, mine plant facilities, exploration assets and equipment and vehicles.
  Development costs, which are capitalized, consist primarily of expenditure that gives access to proved and probable Ore Reserves. Capitalized development costs include expenditure incurred to develop new ore bodies, to define future mineralizationin existing ore bodies and to expand the capacity of a mine. Mine development costs to maintain production are expensed as incurred. Where funds have been borrowed specifically to finance a project, the amount of interest capitalized represents the actual borrowing costs incurred (refer to accounting policy on borrowing costs capitalized). Mine development costs capitalizedinclude acquired proved and probable Ore Reserves at the acquisition date.
  Exploration and evaluation costs, including the costs of acquiring licenses, property and qualifying borrowing costs, are capitalized as exploration assets on a project-by-project basis, pending determination of the technical feasibility and commercialviability of the project. The capitalized costs are presented as tangible assets according to the nature of the assets acquired. When a license is relinquished or a project is abandoned, the related costs are recognized in profit or loss immediately. Pre-license costs are recognized in profit or loss as incurred.Items of property, plant and equipment are measured at cost, less accumulated depreciation and accumulated impairment losses.Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labor, any other costs directly attributable to bringing an asset to a working condition for itsintended use, as well as the costs of dismantling and removing an asset and restoring the site on which it is located.
  Where parts of an item of property, plant and equipment, with costs that are significant in relation to the total cost of the item, have different useful lives, they are accounted for as separate items of property, plant and equipment.
  Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the net proceeds from disposal with the carrying amount of property, plant and equipment, and are recognized in profit or loss. When assets are sold which have been revalued on acquisition for consolidation purposes, the amounts included in the revaluation reserve are transferred to retained earnings (refer note 16).Leased assetsLeases in terms of which the group assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition, the leased asset and liability are measured at amounts equal to the lower of the fair value of the leased asset and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in thesame manner as owned property, plant and equipment.Subsequent costsThe group recognizes in the carrying amount of an item of property, plant and equipment, the cost of replacing part of an item when that cost is incurred, if it is probable that the future economic benefits embodied within the part will flow to the group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other costs are recognized in profit or loss as an expense as incurred. background imageF-18
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
1. ACCOUNTING POLICIES (continued)
PROPERTY, PLANT AND EQUIPMENT (continued)DepreciationDepreciation of mining properties (including mineral rights), mine development and mine plant facilities relating to undergroundoperations are computed using the units-of-production method based on estimated proved and probable Ore Reserves, which are calculated using the group’s life-of-mine business plans and a gold price at the end of each financial year. Proved and probableOre Reserves reflect estimated quantities of economically recoverable reserves which can be recovered in the future from known mineral deposits. Exploration assets that are available for use are depreciated over their estimated useful lives. Changes in management’s estimates of the quantities of the economically recoverable reserves impact depreciation on a prospective basis. The prevailing market price of gold at the end of the financial year was R328,155, R408,381 and R378,158 per kilogram for the fiscal years ended June 30, 2011, 2012 and 2013, respectively.
  Other assets are depreciated using the straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their estimated useful lives, unless it is reasonably certain that the group will obtain ownership by the end of the lease term. Land is not depreciated.The current estimated useful lives for the current and comparative periods are:
•
mining properties – life of mine for each operation, currently between 8 (2012: 3 and 2011: 7) and 10 (2012: 11 and 2011: 30) years;
•
mine development – life of mine for each operation, currently between 8 (2012: 3 and 2011: 7) and 10 (2012: 11 and 2011: 30) years;
•
mine plant facilities – life of mine for each operation, currently between 1.5 (2012: 3 and 2011: 7) and 10 (2012: 11 and 2011: 30) years; and
•
equipment and vehicles – 3 to 5 years.
The residual values, estimated useful lives and depreciation methods are reassessed annually and adjusted if appropriate.INTANGIBLE ASSETS
  Acquisitions and goodwill arising thereonThe group measures goodwill as the fair value of the consideration transferred, including the recognized amount of any non-controlling interest in the acquiree, less the net recognized amount (generally fair value) of the identifiable assets acquired and liabilities assumed, all measured as of the acquisition date. In the case of a bargain purchase, the resulting gain is recognized in profit or loss on the acquisition date. Goodwill relating to equity-accounted investments is included within the carrying value of the investment and tested for impairment when indicators exist.
  When the company already has control, acquisitions of non-controlling interests are accounted for as transactions with equity holders in their capacity as equity holders and therefore no goodwill is recognized as a result of such transactions.
  Goodwill relating to subsidiaries is tested annually for impairment and measured at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to cash-generating units for the purposes of impairment testing.IMPAIRMENT
  Financial assetsA financial asset is assessed at each reporting date to determine whether there is any objective evidence (e.g. delinquency of adebtor and indications that a debtor will enter bankruptcy) that it is impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset.Financial assets measured at amortized costAn impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the original effective interest rate, that is, theeffective interest rate computed at initial recognition of these financial assets. background imageF-19
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
1. ACCOUNTING POLICIES (continued)IMPAIRMENT (continued)Available-for-sale financial assetsAn impairment loss in respect of an available-for-sale financial asset is calculated by reference to its fair value. When a decline in the fair value of an available-for-sale financial asset has been recognized directly in other comprehensive income, and there isobjective evidence (e.g. significant or prolonged decline in the fair value below the cost of the investment) that the asset isimpaired, the cumulative loss that had been recognized in other comprehensive income is recognized in profit or loss even thoughthe financial asset has not been derecognized. The amount of the cumulative loss that is recognized in profit or loss is the difference between the acquisition cost and current fair value, less any impairment loss on that financial asset previously recognized in profit or loss. Financial assets that are individually significant are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics. All impairment losses are recognized in profit or loss.
  An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognized. For financial assets measured at amortized cost and available-for-sale financial assets that are debt securities, the reversal is recognized in profit or loss. For available-for-sale financial assets that are equity securities, the reversal is recognized in other comprehensive income.Non-financial assetsThe carrying amounts of the group's assets, other than inventories and deferred tax assets are reviewed at each reporting date todetermine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated.
  The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate thatreflects current market assessments of the time value of money and the risks specific to the asset. Future cash flows are estimated based on quantities of recoverable minerals, expected gold prices, production levels and cash operating costs of production, allbased on life of mine business plans. The term "recoverable minerals" means proved and probable Ore Reserves which are calculated using our life of mine business plans and a gold price at the end of each financial year. The prevailing market price of gold at the end of the financial year was R328,155, R408,381 and R378,158 per kilogram for the fiscal years ended June 30, 2011, 2012 and 2013, respectively. For purposes of impairment testing, assets are grouped together into the smallest group of assets which generates cash flows from continuing use that is largely independent of the cash inflows of other assets or groups of assets (‘cash-generating units’).
  An impairment loss is recognized directly against the carrying amount of the asset whenever the carrying amount of an asset, orits cash-generating unit, exceeds its recoverable amount. Impairment losses are recognized in profit or loss. Impairment lossesrecognized in respect of cash-generating units are allocated to the carrying amounts of the assets in the unit (group of units) on a pro ratabasis. Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation, if no impairment loss had been recognized.Exploration assetsExploration assets are assessed for impairment if facts and circumstances suggest that the carrying amount exceeds the recoverable amount. For purposes of impairment testing, exploration assets are allocated to cash-generating units consistent withthe determination of reportable segments. The technical feasibility and commercial viability of extracting a Mineral Resource isconsidered to be determinable when proven Ore Reserves are determined to exist. Upon the determination of proven Ore Reserves, exploration assets attributable to those Reserves are first tested for impairment and then reclassified from exploration assets to a separate category within tangible assets. Expenditure deemed to be unsuccessful is recognized in profit or loss immediately.INVENTORIESGold in process is stated at the lower of cost and net realizable value. Costs are assigned to gold in process on a weighted average cost basis. Costs comprise all costs incurred to the stage immediately prior to smelting, including costs of extraction and processing as they are reliably measurable at that point. Selling, refining and general administration costs are excluded from inventory valuation. background imageF-20
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
1. ACCOUNTING POLICIES (continued)
INVENTORIES (continued)Consumable stores are stated at the lower of cost and net realizable value. Cost of consumables is based on the weighted averagecost principle and includes expenditure incurred in acquiring inventories and bringing them to their existing location and condition.
  Bullion is stated at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and selling expenses.TAXATIONIncome tax expense comprises current and deferred tax. Income tax is recognized in profit or loss except to the extent that it
  relates to a business combination, or to items recognized directly in equity or other comprehensive income.Current taxationCurrent taxation is the expected tax payable on the taxable income for the year, using tax rates enacted, or substantively enacted, at the reporting date, and any adjustment to tax payable in respect of previous years.Deferred taxationDeferred taxation is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts recognized for taxation purposes. Deferred tax is not recognized for the followingtemporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit; and differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred tax is not recognized for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that areexpected to be applied to the temporary differences, based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, and based on the laws that have been enacted or substantively enacted by the reporting date.
  Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, if these relate to income taxes levied by the same tax authority on the same taxable entity or on different tax entities; if the companyintends to settle current tax liabilities and assets on a net basis; or if their tax assets and liabilities will be realized simultaneously.
  A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
  Additional income taxes that arise from the distribution of dividends, such as secondary tax on companies (STC), are recognizedat the same time as the liability to pay the related dividend is recognized. STC has been replaced by dividends tax with effectfrom April 1, 2012. Dividends tax transfers the liability for taxes on the distribution of dividends on the beneficial owner of the shares. The company or authorized intermediary is required to withhold the tax and pay it over to the South African Receiver ofRevenue.SHARE CAPITAL
  Ordinary share capitalOrdinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognized as a deduction from equity, net of any tax effect.Preference share capitalPreference share capital is classified as equity if it is non-redeemable, or redeemable only at the company's option, and any dividends are discretionary. Dividends on preference share capital classified as equity are recognized as distributions within equity. Preference share capital is classified as a liability if it is redeemable on a specified date or at the option of the shareholders, or if dividend payments are not discretionary. Dividends thereon are recognized as interest expense in profit or loss as accrued.DividendsDividends are recognized as a liability in the period in which they are declared. background imageF-21
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
1. ACCOUNTING POLICIES (continued)EMPLOYEE BENEFITS
  Defined contribution plansA defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and has no legal or constructive obligation to pay further amounts. Pension plans, which are multi-employer plans in thenature of defined contribution plans, are funded through monthly contributions to these defined contribution plans. Obligationsfor contributions are recognized as an employee benefit expense in profit or loss as incurred.Long-service benefitsThe group makes long-service bonus payments (long-service awards) for certain eligible employees, under the Chamber of Mines of South Africa Long Service Award Scheme. The amount of the award is based on both the employee's skill level and years of service with gold mining companies that qualify for the scheme. The obligation is accrued over the service life of the employeesand is calculated using a projected unit credit method. Any actuarial gains or losses are recognized in profit or loss in the period in which they arise.Post-retirement medical benefitsPost-retirement medical benefits in respect of qualifying employees are recognized as an expense over the expected remaining service lives of relevant employees and the remaining life expectancies of retirees. The group has an obligation to provide medical benefits to certain of its pensioners and dependants of ex-employees. These liabilities are provided in full, calculated on an actuarial basis and discounted using the projected unit credit method. The discount rate is the yield at the reporting date on corporate bonds that have maturity dates approximating the terms of the group's obligations and that are denominated in the samecurrency in which the benefits are expected to be paid. Periodic valuation (currently every three years) of these obligations iscarried out by independent actuaries using appropriate mortality tables, long-term estimates of increases in medical costs and appropriate discount rates. The fair value of any plan assets is deducted. Actuarial gains and losses are recognized immediately in profit or loss. When the calculation results in a benefit to the group, the recognized asset is limited to the net total of anyunrecognized past service costs and the present value of any future refunds from the plan or reductions in future contributions to the plan.
  When the benefits of a plan are improved, the portion of the increased benefit relating to past service by employees is recognized in profit or loss on a straight-line basis over the average period until the benefits become vested. To the extent that the benefits vest immediately, the expense is recognized immediately in profit or loss.Termination benefitsTermination benefits are recognized as an expense when the group is demonstrably committed, without realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide terminationbenefits as a result of an offer made to encourage voluntary redundancy. Termination benefits for voluntary redundancies are recognized as an expense if the group has made an offer for voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated reliably. If benefits are payable more than 12 months after the reporting period,they are discounted to their present value.Share-based payment transactionsEquity settled share based payment awardsThe group grants share options to certain employees under an employee share plan to acquire shares of the company. The fair value of options granted is recognized as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and spread over the period during which the employees become unconditionally entitled to the options. The fair value of the options granted is measured using the Black-Scholes option pricing model, taking into account the terms andconditions upon which the options were granted. The amount recognized as an expense is adjusted to reflect the actual number ofshare options that vest, except where forfeiture is only due to market conditions such as share prices not achieving the thresholdfor vesting.Cash settled share based payment awardsThe fair value of the amount payable to employees in respect of share appreciation rights, which are settled in cash, is recognized as an expense with a corresponding increase in liabilities, over the period that the employees become unconditionally entitled to payment. The liability is remeasured at each reporting date and at settlement date based on the fair value of the share appreciation rights. Any changes in the liability are recognized as employee benefit expenses in profit or loss. The fair value of the options granted is measured using the Black-Scholes option pricing model at each reporting date. background imageF-22
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
1. ACCOUNTING POLICIES (continued)PROVISIONSA provision is recognized in the statement of financial position when the group has present legal or constructive obligations resulting from past events that can be estimated reliably and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.Decommissioning liabilitiesThe provision for decommissioning represents the cost that will arise from rectifying damage caused before production commenced. Accordingly, an asset is recognized and included within mining properties. Decommissioning liabilities are measured at the present value of the expenditures expected to settle the obligation, using estimated cash flows based on currentprices. The unwinding of the decommissioning obligation is included in profit or loss. Estimated future costs of decommissioningobligations are reviewed regularly and adjusted as appropriate for new circumstances or changes in law or technology. Changes inestimates are capitalized or reversed against the relevant asset. Gains or losses from the expected disposal of assets are not taken into account when determining the provision.Restoration liabilitiesThe provision for restoration represents the cost of restoring site damage after the start of production. Increases in the provision are recognized in profit or loss as a cost of production. Gross restoration liabilities are estimated at the present value of the expenditures expected to settle the obligation.Rehabilitation trust fundsAnnual contributions are made to dedicated rehabilitation trust funds to cover the estimated cost of rehabilitation during and at the end of the life of the relevant mine. These contributions are recognized as a right to receive reimbursement from the fund and measured at the lower of the amount of the decommissioning obligation recognized and the fair value of the fund assets. Changesin the carrying value of the fund assets, other than contributions to and payments from the fund, are recognized in profit or loss.REVENUE RECOGNITION
  Gold bullion and by-productsThe group recognizes revenue from the sale of gold bullion and by-products is measured at the fair value of the consideration received or receivable. Revenue is recognized in profit or loss when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs can be estimated reliably, there is nocontinuing management involvement with the goods, and the amount of revenue can be measured reliably.Government grantsGovernment grants are not recognized until there is reasonable assurance that the entity will comply with the conditions attaching to them and the grant will be received. Grants that compensate the group for expenses incurred are recognized in profit or loss as a deduction against the related expense.Finance incomeFinance income includes dividends received, interest received, growth in the environmental rehabilitation trust funds, net gains on financial instruments measured at amortized cost, net foreign exchange gains, and other profits and losses arising on disposal ofinvestments.
  Dividends are recognized when the group's right to receive payment is established. Interest is recognized on a time proportion basis taking account of the principal outstanding and the effective rate to maturity on the accrual basis. background imageF-23
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
1. ACCOUNTING POLICIES (continued)EXPENSES
  Operating lease paymentsPayments made under operating leases are recognized in profit or loss on a straight-line basis over the period of the lease.Finance lease paymentsMinimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remainingbalance of the liability.Finance expensesFinance expenses comprise interest payable on borrowings calculated using the effective interest method, unwinding of the discount of the provision for environmental rehabilitation, net foreign exchange losses, net losses on financial instruments measured at amortized cost, and interest on finance leases.Borrowing costs capitalizedInterest on borrowings relating to the financing of qualifying major capital projects under construction is capitalized during the construction phase as part of the cost of the project. Such borrowing costs are capitalized over the period during which the asset is being acquired or constructed and borrowings have been incurred. Capitalization ceases when construction is interrupted for an extended period or when the asset is substantially complete. Other borrowing costs are expensed as incurred.SEGMENT REPORTINGOperating segments are identified on the basis of internal reports that the group’s Chief Operating Decision Maker (CODM) reviews regularly in allocating resources to segments and in assessing their performance. The CODM for the group has been identified as the group’s Executive Committee. Reportable segments are identified based on quantitative thresholds of revenue, profit or loss, and assets. The amounts disclosed for each reportable segment are the measures reported to the CODM, which are not necessarily based on the same accounting policies as the amounts recognized in the financial statements. Aggregation of operating segments is implemented where disclosure of information enables users of the group’s financial statements to evaluatethe nature and effects of the business activities in which it engages and the economic environment in which it operates, where the operating segments have characteristics so similar that they can be expected to have essentially the same future prospects and where they are similar in the following respects:
· the nature of products and services; · the nature of the production process; · the type or class of customer for their products and services; · the methods used to distribute their products or provide their services; and · if applicable, the nature of the regulatory environment. background imageF-24
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
1. ACCOUNTING POLICIES (continued)NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONSA held-for-sale asset is classified as such if it is a non-current asset, or disposal group comprising assets and liabilities, that is expected to be recovered primarily through sale rather than through continuing use. Immediately before classification as held-for-sale, the assets (or components of a disposal group) are remeasured in accordance with the group's accounting policies. Thereafter, the non-current assets or disposal groups are measured at the lower of carrying amount and fair value less costs to sell. Impairment losses on initial classification as held-for-sale are included in profit or loss. The same applies to gains and losses on subsequent measurement. Gains are not recognized in excess of any cumulative impairment loss.
  A discontinued operation in the group is a component of the group's business that represents a separate major line of business, a geographical area of operations which has been disposed of or is held-for-sale, or a subsidiary acquired exclusively for resale.When an operation is classified as a discontinued operation, the comparative statement of profit or loss and other comprehensiveincome is restated as if the operation had been discontinued from the start of the comparative period.EARNINGS OR LOSS PER SHAREThe group presents basic and diluted earnings per share data for its ordinary shares. Basic earnings or loss per share is calculated based on the net profit or loss after taxation for the year attributable to ordinary shareholders of the company, divided by theweighted average number of ordinary shares in issue during the year. Diluted earnings or loss per share is presented when the inclusion of ordinary shares that may be issued in the future, which comprise share options granted to employees, has a dilutiveeffect on earnings or loss per share.2. OPERATING SEGMENTSThe following summary describes the operations in each of the group’s reportable operating segments:
· Ergo: is a surface retreatment operation and treats old slime and sand dumps  to the south of Johannesburg’s centralbusiness district as well as the east and central Rand goldfields. The operation consists of four plants: Brakpan, Crown(now decommissioned), City and Knights. Ergo is evaluating the viability of processing surface uranium-and sulphur-bearing tailings on the east and central Rand goldfields of South Africa. · Blyvoor: incorporates the Doornfontein mine, situated on the north-western edge of the Witwatersrand basin. The minehas underground and surface operations. Blyvoor was disposed of during the year ended June 30, 2012 and the segmenttherefore reflect the results of Blyvoor until the effective date of June 1, 2012 (refer to note 11).
The reportable segments, as described above, are the group’s strategic divisions. The strategic divisions reflect different operational locations reported on separately to the executive committee (CODM). The group’s revenue stream consists of the saleof gold bullion. background imageF-25
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
2. OPERATING SEGMENTS (continued)
2013
Ergo
R’000
Corporate head
office and all
other (2)
R’000
Total
R’000
Financial performanceSegmental revenue
2,076,496
-
2,076,496
Cash operating costs
(1,414,904)
-
(1,414,904)
Movement in gold in process
17,727
-
17,727
Operating profit
679,319
-
679,319
Interest and other investment income
3,187
53,311
56,498
Interest expense
(175)
(19,209)
(19,384)
Retrenchment costs
-
(565)
(565)
Administration expenses and general costs
(25,150)
(52,920)
(78,070)
Taxation charge (1)
(87)
8,746
8,659
Working profit/(loss) before capital expenditure
657,094
(10,637)
646,457
Capital expenditure
(368,395)
(13,533)
(381,928)
Working profit/(loss) after capital expenditure
288,699
(24,170)
264,529
(1) The taxation charge excludes deferred tax. (2) Corporate head office and all other expenses are included in the disclosure here to reconcile segment data to the consolidated financial statements and do therefore not represent a separate segment. background imageF-26
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
2. OPERATING SEGMENTS (continued)
2013
Ergo
Corporate head
office and all
other (1)Total
Operating results (2)Ore milled

t’000
23,254
-23,254
Average yield

g/t
0.20
-0.20
Gold produced

kg
4,553
-4,553
oz
146,381
-
146,381
Cash operating costs
R/kg
310,763
-310,763
$/oz
1,094
-1,094
All-in sustaining cost
R/kg
365,569
-365,569
$/oz
1,284
-1,284
All-in cost
R/kg
436,638
-436,638
$/oz
1,535
-1,535
Gold price received - revenue
R/kg
456,072
-456,072
-
revenue
$/oz
1,613
-1,613
R’000
R’000
R’000
Reconciliation of assetsReportable segment assets
1,729,482
26,851
1,756,333
Other assets
348,645
566,167
914,812
Total assets
2,078,127
593,018
2,671,145
Reconciliation of liabilities



Reportable segment liabilities
682,034
240,077
922,111
Taxation and deferred taxation
100,765
-
100,765
Total liabilities
782,799
240,077
1,022,876
(1) Corporate head office and all other are included in the disclosure here to reconcile segment data to the consolidated financial statements and do therefore not represent a separate segment. (2) Unaudited background imageF-27
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
2. OPERATING SEGMENTS (continued)
2013
Ergo
R’000
Corporate head
office and all
other (1)
R’000
Total
R’000
Other material information



Depreciation
(143,606)
(160)
(143,766)
Impairment of assets
(61,043)
(176,958)
(238,001)
Reconciliation of revenues



Total revenues for reportable segments
2,076,496
-
2,076,496
Statement of cash flows



Cash flows from operating activities
543,234
(40,971)
502,263
Cash flows from investing activities
(372,805)
(56,578)
(429,383)
Cash flows from financing activities
-
5,697
5,697
Reconciliation of profit/(loss)Segment working profit/(loss) before capital expenditure
657,094
(10,637)
646,457
- Depreciation
(143,606)
(160)
(143,766)
- Movement in provision for environmental rehabilitation
(35,694)
20,360
(15,334)
- Impairments
(61,043)
(176,958)
(238,001)
- Growth in environmental rehabilitation trust funds and guarantees
3,933
5,537
9,470
- Profit on disposal of property, plant and equipment
69
19,198
19,267
- Unwinding of provision for environmental rehabilitation
(31,982)
(1,555)
(33,537)
- Borrowing costs capitalized
514
10,432
10,946
- Ongoing rehabilitation expenditure
(45,444)
-
(45,444)
- Net other operating costs
(31,857)
(24,501)
(56,358)
- Deferred tax
(50,863)
(2,737)
(53,600)
Profit/(loss) for the year
261,121
(161,021)
100,100
(1) Corporate head office and all other are included in the disclosure here to reconcile segment data to the consolidated financial statements and do therefore not represent a separate segment. background imageF-28
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
2. OPERATING SEGMENTS (continued)
2013

Revenues
Non-
current
assets
R’000R’000

Geographical Information


South Africa
2,076,4961,756,333

Zimbabwe
--
Total
2,076,4961,756,333

Information about major customers
The group has only one major customer regarding the sale of gold ore in each geographical area due to regulatory authority. background imageF-29
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
2. OPERATING SEGMENTS (continued)
2012
Blyvoor
R’000
Ergo
R’000
Corporate head
office and all
other (2)
R’000
Total
R’000
Financial performanceSegmental revenue
1,240,073
1,764,191
-
3,004,264
Cash operating costs
(1,052,197)
(1,151,400)
-
(2,203,597)
Movement in gold in process
5,283
9,427
-14,710
Operating profit
193,159
622,218
-
815,377
Interest and other investment income
732
777
14,63816,147
Interest expense
(817)
(18)
(7,497)(8,332)
Retrenchment costs
(43,747)
-
-
(43,747)
Administration expenses and general costs
(10,918)
(40,172)
(70,447)(121,537)
Taxation charge (1)
-
(172)
(16,855)
(17,027)
Working profit/(loss) before capital expenditure
138,409
582,633
(80,161)
640,881
Capital expenditure
(82,938)
(244,650)
(7,594)(335,182)
Working profit/(loss) after capital expenditure
55,471
337,983
(87,755)305,699
(1) The taxation charge excludes deferred tax. (2) Corporate head office and all other are included in the disclosure here to reconcile segment data to the consolidated financial statements and do therefore not represent a separate segment. background imageF-30
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
2. OPERATING SEGMENTS (continued)
2012
Blyvoor
Ergo
Corporate head
office and all
other (1)Total
Operating results (2)Ore milled
- underground
t’000569
-
-
569
-
surface
t’0002,725
21,603
-24,328
-
total
t’0003,294
21,603
-24,897
Average yield
- underground
g/t3.99
-
-
3.99
-
surface
g/t0.27
0.20
-
0.20
-
total
g/t0.91
0.20
-
0.29
Gold dispatched
-
  underground
kg2,272
-
-
2,272
-
surface
kg734
4,221
-4,955
-
total
kg3,006
4,221
-
7,227
-
underground
oz73,048
-
-
73,048
-
surface
oz23,597
135,708
-159,305
-
total
oz96,645
135,708
-232,353
Cash operating costs - underground
R/kg416,540
-
-
416,540
-
surface
R/kg144,166
272,778
-
253,727
-
total
R/kg350,032
272,778
-
304,912
-
underground
$/oz1,671
-
-
1,671
-
surface
$/oz578
1,096
-1,018
-
total
$/oz1,404
1,096
-
1,223
All-in sustaining cost
R/kg384,689
331,978
-
353,863
$/oz1,543
1,271
-
1,332
All-in cost
R/kg399,572
383,294
-
390,064
$/oz1,603
1,442
-
1,565
Gold price received - revenue
R/kg412,533
417,956
-
415,700
-
revenue
$/oz1,677
1,682
-
1,679
R’000
R’000
R’000
R’000
Reconciliation of assetsReportable segment assets
-
1,569,148
72,409
1,641,557
Other assets
-
296,696
554,036
850,732
Total assets
-
1,865,844
626,445
2,492,289
Reconciliation of liabilities



Reportable segment liabilities
-
592,966
175,534
768,500
Taxation and deferred taxation
-
85,206
4,662
89,868
Total liabilities
-
678,172
180,196
858,368
(1) Corporate head office and all other are included in the disclosure here to reconcile segment data to the consolidated financial statements and do therefore not represent a separate segment. (2) Unaudited background imageF-31
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
2. OPERATING SEGMENTS (continued)
2012
Blyvoor
R’000
Ergo
R’000
Corporate head
office and all
other (1)
R’000
Total
R’000
Other material information



Depreciation
(1,661)
(117,457)
(1,732)
(120,850)
Impairment of assets
-
-
(1,100)
(1,100)
Reconciliation of revenues



Total revenues for reportable segments
1,240,073
1,764,191
-3,004,264
Statement of cash flows



Cash flows from operating activities
137,068
558,706
(74,604)621,170
Cash flows from investing activities
(82,938)
(236,145)
(94,198)(413,281)
Cash flows from financing activities
-
-
(168,553)
(168,553)
Reconciliation of profit/(loss)Segment working profit/(loss) before capital expenditure
138,409
582,633
(80,161)640,881
- Depreciation
(1,661)
(117,457)
(1,732)
(120,850)
- Movement in provision for environmental rehabilitation
301
(48,292)
(11,194)
(59,185)
- Impairments
-
-
(1,100)
(1,100)
- Net gain on disposal of available-for-sale financial assets reclassified from equity
6,656
-
-6,656
- Growth in environmental rehabilitation trust funds
1,606
3,138
5,89310,637
- Net loss on financial liabilities measured at amortized cost
-
-
(6,372)
(6,372)
- Unwinding of provision for environmental rehabilitation
(1,211)
(5,153)
(928)(7,292)
- Borrowing costs capitalized
-
1,696
2,594
4,290
- Loss on disposal of property, plant and equipment
-
-
(9,556)
(9,556)
- Actuarial loss on post-retirement and other employee benefits
-
(67)
-
(67)
- Loss on disposal of subsidiary
(10,532)
-
-(10,532)
- Ongoing rehabilitation expenditure
(990)
(39,445)
(7,850)
(48,285)
- Net other operating (costs)/income
(8,583)
(23,931)
1,229(31,285)
- Deferred tax
-
9,083
(66)
9,017
Profit/(loss) for the year
123,995
362,205
(109,243)376,957
(1) Corporate head office and all other are included in the disclosure here to reconcile segment data to the consolidated financial statements and do therefore not represent a separate segment. background imageF-32
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
2. OPERATING SEGMENTS (continued)
2012

Revenues
Non-
current
assets
R’000R’000

Geographical Information


South Africa
3,004,2641,614,573

Zimbabwe
-26,984

Total
3,004,2641,641,557

Information about major customers
The group has only one major customer regarding the sale of gold ore in each geographical area due to regulatory authority. background imageF-33
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
2. OPERATING SEGMENTS (continued)
2011
Blyvoor
R’000
Ergo
R’000
Corporate head
office and all
other (2)
R’000
Total
R’000
Financial performanceSegmental revenue
1,185,860
1,379,459
-
2,565,319
Cash operating costs
(1,091,941)
(980,746)
-
(2,072,687)
Movement in gold in process
(23,878)
8,266
-
(15,612)
Operating profit
70,041
406,979
-477,020
Interest and other investment income
3,103
1,942
14,54819,593
Interest expense
(842)
(20)
(10,533)(11,395)
Retrenchment costs
-
-
(839)
(839)
Administration expenses and general costs
(1,781)
(11,394)
(74,911)(88,086)
Taxation charge (1)
(27)
(222)
(6,010)(6,259)
Working profit/(loss) before capital expenditure
70,494
397,285
(77,745)390,034
Capital expenditure
(95,683)
(205,330)
(9,981)(310,994)
Working (loss)/profit after capital expenditure
(25,189)
191,955
(87,726)
79,040
(1) The taxation charge excludes deferred tax. (2) Corporate head office and all other are included in the disclosure here to reconcile segment data to the consolidated financial statements and do therefore not represent a separate segment. background imageF-34
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
2. OPERATING SEGMENTS (continued)
2011
Blyvoor
Ergo
Corporate head
office and all
other (1)
Total
Operating results (2)Ore milled
- underground
t’000732
-
-
732
-
surface
t’0003,129
20,326
-23,455
-
total
t’0003,861
20,326
-24,187
Average yield
  - underground
g/t3.89
-
-
3.89
-
surface
g/t0.29
0.22
-
0.23
-
total
g/t0.98
0.22
-
0.34
Gold dispatched
- underground
kg2,845
-
-
2,845
-
surface
kg922
4,481
-5,403
-
total
kg3,767
4,481
-
8,248
-
underground
oz91,469
-
-
91,469
-
surface
oz29,645
144,065
-173,710
-
total
oz121,114
144,065
-
265,179
Cash operating costs
  - underground
R/kg342,123
-
-
342,123
-
surface
R/kg128,636
218,868
-
203,470
-
total
R/kg289,870
218,868
-
251,296
-
underground
$/oz1,523
-
-
1,523
-
surface
$/oz573
973
-
906
-
total
$/oz1,290
973
-
1,119
All-in sustaining cost
R/kg330,105
258,247
-
291,066
$/oz1,470
1,078
-
1,301
All-in cost
R/kg330,491
308,868
-
318,743
$/oz1,471
1,258
-
1,419
Gold price received
  - revenue
R/kg314,802
307,846
-
311,023
-
revenue
$/oz1,369
1,375
-
1,372
(1) Corporate head office and all other are included in the disclosure here to reconcile segment data to the consolidated financial statements and do therefore not represent a separate segment. (2) Unaudited background imageF-35
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
2. OPERATING SEGMENTS (continued)
2011
Blyvoor
R’000
Ergo
R’000
Corporate head
office and all
other (1)
R’000
Total
R’000
Reconciliation of assetsReportable segment assets
34,175
1,457,285
58,642
1,550,102
Other assets
139,967
264,730
333,862738,559
Total assets
174,142
1,722,015
392,5042,288,661
Reconciliation of liabilities



Reportable segment liabilities
174,115
529,320
243,299946,734
Taxation and deferred taxation
27
122,521
213
122,761
Total liabilities
174,142
651,841
243,5121,069,495
Other material information



Depreciation
(32,638)
(98,164)
(117)(130,919)
Impairment of assets
(546,566)
-
(1,090)(547,656)
Reconciliation of revenues



Total revenues for reportable segments
1,185,860
1,379,459
-2,565,319
Statement of cash flows



Cash flows from operating activities
89,400
329,601
(94,988)324,013
Cash flows from investing activities
(94,323)
(230,896)
(9,946)(335,165)
Cash flows from financing activities
-
-
81,346
81,346
Reconciliation of profit/(loss)



Segment working profit/(loss) before capital expenditure
70,494
397,285
(77,745)390,034
- Depreciation
(32,638)
(98,164)
(117)(130,919)
- Movement in provision for environmental rehabilitation
(5,649)
(36,352)
(10,566)(52,567)
- Impairments
(546,566)
-
(1,090)(547,656)
- Net gain/(loss) on financial liabilities measured at amortized cost
30,856
-
(6,048)24,808
- Growth in environmental rehabilitation trust funds
1,769
3,096
3,5268,391
- Profit/(loss) on disposal of property, plant and equipment
43
(80)
3,292
3,255
- Unwinding of provision for environmental rehabilitation
(1,049)
(7,303)
(1,053)(9,405)
- Unwinding of discount on financial liabilities measured at amortized cost
(3,550)
-
(4,117)(7,667)
- Borrowing costs capitalized
-
1,011
5,409
6,420
- Ongoing rehabilitation expenditure
(1,453)
(32,311)
(9,214)(42,978)
- Actuarial gain on post-retirement and other employee benefits
-
5,651
-
5,651
- Net other operating costs
(8,602)
(1,193)
(27,057)(36,852)
- Deferred tax
(2,532)
34,830
(58,191)(25,893)
(Loss)/profit for the year
(498,877)
266,470
(182,971)(415,378)
(1) Corporate head office and all other are included in the disclosure here to reconcile segment data to the consolidated financial statements and do therefore not represent a separate segment. background imageF-36
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
2. OPERATING SEGMENTS (continued)
2011

Revenues
Non-
current
assets
R’000R’000

Geographical Information


South Africa
2,565,3191,534,428

Zimbabwe
-15,674

Total
2,565,3191,550,102

Information about major customers
The group has only one major customer regarding the sale of gold ore in each geographical area due to regulatory authority.
. background imageF-37
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
201320122011
R’000
R’000R’000
3. REVENUE

Revenue consists of the following principal categories:
Gold revenue
2,073,340
2,982,290 2,541,226
By-product revenue
3,156
21,974 24,093
Total revenue
2,076,496
3,004,264 2,565,319
4. RESULTS FROM OPERATING ACTIVITIES       include the following:
Auditors' remuneration
(7,160)
(10,019)
  (10,065)
Audit fees – current year
(6,702)
(10,019) (10,065)
Fees for other services
(458)
-
  -
Management, technical, administrative and secretarial service fees
(9,072)
(14,187) (3,671)
Staff costs Included in staff costs are:
(287,908)
(826,017)
  (763,826)
Salaries and wages
(265,950)
(724,049) (714,832)
Share-based payments
(4,515)
(4,133) (3,519)
Retrenchment costs
(565)
(43,747)
  (839)
Post-retirement and other employee benefit contributions
(16,878)
(54,088)
  (44,636)
Profit/(loss) on disposal of property, plant and equipment
19,267
(9,556)
  3,255
Impairments
(238,001)
(1,100)
  (547,656)
Property, plant and equipment
(110,186)
- (546,566)
Other impairments
(992)
-
  -
Impairment of available-for-sale financial asset reclassified from other comprehensive income
(101,261)
-
  -
Rehabilitation trust fund
(25,562)
(1,100)
  (1,090)
During the year ended June 30, 2013, the group recorded an impairment of R110.2 million against property, plant and equipment at a specific asset level.   R61.1 million was recorded against the Ergo operating segment based on the recoverable amount (value in use) of these assets being lower than their carrying amount. The impairment was due to the reassessment of the viability of these assets and projects (R40.1 million for surface dumps, R12.4 million for plant equipment and R8.6 million against shaft andinfrastructure).  R49.1 million was recorded against Chizim Gold (Pvt) Limited (Chizim Gold) which are included in Corporate head office and all other. The impairment was determined based on the recoverable amount (fair value less cost to sell) being lower than the carrying value of the exploration assets and was due to a decision by management to sell the Zimbabwean investment. The group recorded an impairment of R101.3 million against available-for-sale financial assets based on the recoverable amount (fair value less cost to sell) of the financial asset being significantly lower than its original cost price for a prolonged period. This relates to the company's investment in Village Main Reef Limited (Village). The group derecognized the DRDGOLD rehabilitation trust fund of R25.6 million due to the relinquishment of the fund to the buyer of the relating mining rights over the Durban Roodepoort Deep mine area.
  During the year ended June 30, 2012,  the group derecognized R1.1 million (2011: R1.1 million) against West Witwatersrand Gold Mines Proprietary Limited’s rehabilitation trust fund due to the relinquishment of the fund to the buyer of the relating mining rights over the West Wits mining lease area.
  During the year ended June 30, 2011, the group recorded an impairment of R546.6 million against Blyvoor’s property, plant and equipment (recoverable amount determined based on value in use) due to the uncertainties pertaining to Blyvoor’s distressed financial position as at June 30, 2011. Blyvoor represents one cash generating unit. A discount rate of 14.4%, together with further risk adjustments to future cash flows were used in determining the impairment. Management also took into consideration as part of their reasonableness assessment, a sensitivity analysis and the fact that Blyvoor was under business rescue proceedings, with the business rescue plan not being approved as at June 30, 2011.  Further considerations included the fact that the group’smarket capitalization in comparison to the group’s net asset value as at June 30, 2011. background imageF-38
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
2013
2012
2011
R’000
R’000
R’000
4. RESULTS FROM OPERATING ACTIVITIES
include the following: (continued)
Operating leases
(2,021)
(1,939)
(1,456)
Mining royalties
(30)
(4,739)
(4,365)
5. FINANCE INCOME
Dividends received
32,470
38
6,013
Interest received
24,028
16,109
13,580
Net gain on financial liabilities measured at amortized cost
-
-
24,808
Net gain on disposal of available-for-sale financial asset reclassified from other comprehensive income
-
6,656
-
Growth in environmental rehabilitation trust funds and investments for guarantees (refer note 10)
9,470
10,637
8,391
65,968
33,440
52,792
6. FINANCE EXPENSES
Interest paid on loans and bank overdrafts
(19,384)
(7,673) (11,395)
Unwinding of provision for environmental rehabilitation (refer note 17)
(33,537)
(7,292)
  (9,405)
Unwinding of discount on financial liabilities measured at amortized cost
-
(659) (7,667)
Net loss on financial liabilities measured at amortized cost
-
(6,372)
  -
Borrowing costs capitalized (refer note 9)
10,946
4,290 6,420
(41,975)
(17,706)
  (22,047) background imageF-39
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
201320122011
R’000R’000R’000
7.INCOME TAX
Mining tax
(53,264)
13,079 (28,940)
Non-mining tax
8,323
(16,545) 1,882
Secondary tax on companies
-
(4,544) (5,094)
(44,941)
(8,010) (32,152)
Comprising: South African

Current tax - current year
(4,187)
(12,483) (1,197)
- prior year
12,846
- 32
Deferred tax
(53,600)
9,017
  (25,893)
Secondary tax on companies
-
(4,544) (5,094)
(44,941)
(8,010) (32,152)
In South Africa, mining tax on mining income is determined based on a formula which takes into account the profit and revenue from a gold mining company during the year. Non-mining income, which consists primarily of interest, is taxed at a standard rateof 28% (2012: 28% and 2011: 28%).
  The tax rates applicable to mining and non-mining income of a gold mining company previously depended on whether the company elected to be exempt from Secondary Tax on Companies (STC). STC was a tax on dividends declared, which  was payable by the company declaring the dividend  of which  the STC  tax rate was equal to 10%  (2012:  10% and 2011: 10%)  of the amount of income declared as a dividend. In 1993, all existing gold mining companies had the option to elect to be exempt from STC. If the election was made, a higher tax rate would apply to both mining and non-mining income. With the exception of Crown, all of the South African subsidiaries elected not to be exempt from STC. On April 1, 2012, STC was replaced by a dividend tax of 15%, which is levied on the beneficial owner of the share. As a result of the new dividends tax there is now a single mining and non-mining tax rate for gold mining companies for the year ended June 30, 2012 onwards.
  In 2013 and 2012, the tax rates for taxable, mining and non-mining income for companies were 34% and 28% respectively. In 2011, the tax rates for taxable mining and non-mining income for companies that elected the STC exemption were 43% and 35% respectively (no STC exemption: 34% and 28% respectively).
The formula for determining the South African gold mining tax rate for both fiscal 2013 and 2012 are:
Y = 34 – 170/X
The formulae for determining the South African gold mining tax rates for fiscal 2011 is:
Y = 43 – 215/X (elect not to pay STC) Y = 34 – 170/X (elect to pay STC)
Where Y is the percentage rate of tax payable and X is the ratio of taxable income, net of any qualifying capital expenditure that bears to mining income derived, expressed as a percentage. background imageF-40
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
7. INCOME TAX (continued)
For deferred tax purposes the group applies the expected average effective tax rate. The average effective tax rates for the respective operations are based on the group’s current estimate of when temporary differences will reverse. Based on changes inestimates, the tax rate can be different from year to year. If a one percentage point increase in the average effective tax rate is applied it would increase the movement in profit or loss by R5.7 million to R59.3 million debit.Each company is taxed as a separate entity and no tax set-off is allowed between the companies.All mining capital expenditure is deducted to the extent that it does not result in an assessed loss and depreciation is ignoredwhen calculating the mining income. Capital expenditure not deducted from mining income is carried forward as unredeemed capital expenditure to be deducted from future mining income. After the restructuring of the surface operations, effective July 1, 2012, Ergo is treated as one taxpaying operation pursuant to the relevant ring-fencing legislation.
2013
20122011
R’000
R’000R’000
Estimated unredeemed capital expenditure at year-end (available for deduction against future mining income)
1,629,438
1,693,444 2,183,572
Estimated gross capital losses (available to reduce future capital gains)
1,394,339
1,399,339 1,081,785
Estimated assessed tax losses at year-end (available to reduce future taxable income)
86,107
128,350
  203,078
Estimated tax losses and unredeemed capital expenditure carried forward
3,109,884
3,221,133 3,468,435
Tax reconciliationMajor items causing the group's income tax provision to differ from the statutory rate were:

Taxation on net (profit)/loss before taxation at the South African corporate tax rate of 28%
(40,611)
(110,740) 107,303
Rate adjustment to reflect the actual realized company tax rates
27,101
34,273 19,018
Deferred tax rate adjustment
(9,354)
15,940 3,083
Non-deductable expenditure (a)
(46,323)
(7,339)
  (1,746)
Exempt income (b)
16,006
8,034
  9,095
Additional tax benefit relating to the prior year
12,846
25,367
  3,658
Tax incentives
1,291
439
  410
Secondary tax on companies
-
(4,544) (5,094)
Temporary differences including tax losses recognized for which deferred tax assets were previously unrecognized
2,197
28,343 525
Current year losses for which no deferred tax was recognized (c)
(13,070)
(2,702)
  (166,642)
Other
4,976
4,919 (1,762)
Taxation charge
(44,941)
(8,010) (32,152)
(a) Included in the group’s non-deductable expenditure for the year ended June 30, 2013, is the non-deductable portion of
R101.3 million relating to the impairment of the available-for-sale investment in Village and R49.1 million relating to the impairment of the exploration asset in Zimbabwe.
(b) Included in the group’s exempt income for the year ended June 30, 2013, is an amount of R32.5 million relating to the
dividends received from local companies.
(c) The group’s current year losses for which no deferred tax was recognized for the year ended June 30, 2011, relates to the
impairment of Blyvoor (refer note 4). background imageF-41
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
8. EARNINGS PER SHARE
BasicThe calculation of earnings per ordinary share is based on the following:


Basic earnings/(loss) attributable to equity owners of the parent
59,194
308,675
  (287,915)
Basic earnings from continuing operations attributable to equity owners of the parent
59,194
217,301
  67,070
Weighted average number of ordinary shares in issue adjusted for treasury shares
379,178,208384,169,915 384,884,379
DilutedBasic earnings/(loss) attributable to equity owners of the parent
59,194
308,675 (287,915)
Dilutive effect on earnings
-
- -
Diluted basic earnings/(loss)
59,194
308,675 (287,915)
Reconciliation of weighted average number of ordinary shares to diluted weighted average number of ordinary sharesWeighted average number of ordinary shares in issue
379,178,208384,169,915 384,884,379
Number of staff options allocated
802,224
589,693 -
Diluted weighted average number of ordinary shares
379,980,432384,759,608 384,884,379
Basic earnings/(loss) per ordinary share (cents)
16
80
  (75)
Diluted earnings/(loss) per ordinary share (cents)
16
80
  (75)
Basic earnings from continuing operations per ordinary share (cents)
16
57
  17
Diluted earnings from continuing operations per ordinary share (cents)
16
56 17
At June 30, 2013, 0.7 million options (2012: 17.0 million and 2011: 21.6 million) were excluded from the diluted weighted average number of ordinary shares calculation as their effect would have been anti-dilutive.
2013
20122011
R’000
R’000R’000 background imageF-42
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
20132012
R’000R’000
9. PROPERTY, PLANT AND EQUIPMENTTotal Cost
2,581,481
2,212,866
Opening balance
2,212,866
3,558,578
Additions
381,928
335,182
Borrowing costs capitalized
10,946
4,290
Disposals
(26,486)
(30,465)
Disposed through the disposal of subsidiary
-
(1,665,341)
Change in estimate
(6,399)
13,390
Foreign exchange movement
8,626
(2,768)
Accumulated depreciation and impairment
(825,148)
(571,309)
Opening balance
(571,309)
(2,008,476)
Depreciation
(143,766)
(120,850)
Impairment (refer note 4)
(110,186)
-
Disposals
113
-
Disposed through disposal of subsidiary
-
1,558,017
Carrying value
1,756,333
1,641,557 background imageF-43
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
20132012
R’000R’000
9. PROPERTY, PLANT AND EQUIPMENT (continued)
Mining property and development Cost
1,266,171
1,264,163
Opening balance
1,264,163
2,437,380
Additions
26,332
148,264
Disposals
(26,356)
(30,465)
Change in estimate
2,032
9,772
Disposed through disposal of subsidiary
-
(1,300,788)
Accumulated depreciation and impairment
(427,617)
(333,858)
Opening balance
(333,858)
(1,457,045)
Depreciation
(85,164)
(85,026)
Impairment
(8,595)
-
Disposed through disposal of subsidiary
-
1,208,213
Carrying value
838,554
930,305
Mine plant facilities

Cost
1,093,574
743,444
Opening balance
743,444
917,564
Additions
339,184
170,861
Borrowing costs capitalized
10,946
4,290
Disposed through disposal of subsidiary
-
(349,271)
Accumulated depreciation and impairment
(332,963)
(224,459)
Opening balance
(224,459)
(530,291)
Depreciation
(56,056)
(33,300)
Impairment
(52,448)
-
Disposed through disposal of subsidiary
-
339,132
Carrying value
760,611
518,985 background imageF-44
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
20132012
R’000R’000
9. PROPERTY, PLANT AND EQUIPMENT (continued)
Equipment and vehicles Cost
20,068
17,319
Opening balance
17,319
30,622
Additions
2,879
1,979
Disposals
(130)
-
Disposed through disposal of subsidiary
-
(15,282)
Accumulated depreciation and impairment
(15,425)
(12,992)
Opening balance
(12,992)
(21,140)
Depreciation
(2,546)
(2,524)
Disposals
113
-
Disposed through disposal of subsidiary
-
10,672
Carrying value
4,643
4,327
Exploration Assets (a) Cost
201,668
187,940
Opening balance
187,940
173,012
Additions
13,533
14,078
Change in estimate
(8,431)
3,618
Foreign exchange movement
8,626
(2,768)
Accumulated depreciation and impairment
(49,143)
-
Opening balance
-
-
Impairment
(49,143)
-
Carrying value
152,525
187,940
(a) Exploration assets relate to phase two of the Ergo project and include property, plant and the tailings complex as well as
exploration costs incurred in Zimbabwe.
Borrowing costs are capitalized to qualifying assets at the rate applicable to the specific financing obtained (refer note 20). background imageF-45
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
20132012
R’000R’000
10. NON-CURRENT INVESTMENTS AND OTHER ASSETS
Listed investments
34,071
151,303
Opening balance
151,303
135,332
Fair value adjustment
(117,232)
15,971
Unlisted investments
93,384
20,426
Loan to DRDSA Empowerment Trust (a)
2,592
4,431
Investments in environmental rehabilitation guarantees (b)
90,667
59,264
Opening balance
59,264
-
Contributions
27,522
56,944
Growth (refer note 5)
3,881
2,320
Investments in environmental rehabilitation trust funds (c)
86,356
106,328
Opening balance
106,328
134,247
Impairment
(25,562)
(1,100)
Disposed through disposal of subsidiary
-
(35,136)
Growth (refer note 5)
5,590
8,317
Total non-current investments and other assets
307,070
341,752
Fair
Carrying
Carrying
Numbervaluevaluevalue
of201320132012
% Held
shares
R'000
R'000
R'000
Listed investments consist of:


Village Main Reef Limited
8
85,714,286
34,071
34,071
151,303




Unlisted investments consist of:


Rand Mutual Assurance Company Limited
†
1
-
-
1
Rand Refinery Limited
11
44,438
93,320
93,320
20,386
Chamber of Mines Building Company Proprietary Limited
2
32,676
64
64
39

93,384
93,384
20,426
† Represents a less than 1% shareholding.





(a) The terms and conditions of the loan to the DRDSA Empowerment Trust are linked to the payments of dividends from
Ergo Mining Operations Proprietary Limited.
(b) This investment relates to funds invested for financial guarantees provided to the Department of Mineral Resources
(DMR) for environmental and rehabilitation obligations (refer note 17). The entire amount is invested in a cell captive called the Guardrisk Cell Captive which is consolidated as a special purpose entity (SPE).
(c)
  The monies in the environmental rehabilitation trust funds are invested primarily in low-risk interest-bearing debt
securities and may be used only for environmental rehabilitation purposes (refer note 17). background imageF-46
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
11. INVESTMENT IN SUBSIDIARIES
Part disposal of subsidiaryErgoGoldDuring the year ended June 30, 2013, DRDGOLD disposed of its 35% interest in ErgoGold to Ergo Mining Proprietary Limited (Ergo Mining) as part of the group restructuring on July 1, 2012 for R200.0 million. Through the disposal, the non-controlling interest obtained an additional 9.1% effective interest in ErgoGold accounted for as a movement in equity.Disposal of subsidiaryBlyvoorOn February 11, 2012,  DRDGOLD, Village and Business Venture Investments No  1557  Proprietary Limited (a wholly owned subsidiary of Village) (Purchaser) entered into a sale of shares and claims agreement (the Agreement), for the acquisition of DRDGOLD’s entire interest in and claims against Blyvoor for R1 and 85,714,286  new ordinary shares of Village.
  The Agreement consists of two parts. Part A was completed on June 1, 2012 (date of disposal: which is the date control passed toVillage).  Part B has certain conditions precedent which can be waived in full by Village. These include the successful conversion of Blyvoor’s old order mining right to a new order mining right under the Mineral and Petroleum Resources Development Act (Act No. 28  of 2002),  as well as obtaining the consent of the DMR for the sale.
  Pending the outcome of Part B conditions precedent, 20,000,000 of the newly issued ordinary shares in Village will be kept in escrow.
  The fair value of the proceeds on disposal has been determined after taking into consideration the market close price of Village on June 1, 2012, of R1.61 per share.
As at
May 31, 2012
R’000
Calculation of loss on disposal of Blyvoor

Fair value of proceeds on disposal
135,332
Less: Consolidated carrying amount attributable to equity owners of the parent
(138,638)
Less: Directly attributable costs
(7,226)
Loss on disposal of discontinued operation
(10,532) background imageF-47
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
20132012
R’000R’000
12. INVESTMENT IN JOINT VENTURE
The joint venture for which the statement of profit or loss and other comprehensive income and statement of financial position have been proportionately consolidated is as follows:Chizim Gold (Pvt) Limited – percentage held
49%
50%
Chizim Gold (Pvt) Limited - ZimbabweDuring the year ended June 30, 2011 the group acquired a 50% interest in Chizim Gold (Pvt) Limited (Chizim Gold) for a nominal cash consideration, pursuant to a joint venture agreement entered into on December 9, 2009. On June 7, 2013, a shareholders agreement was entered into reducing the group’s shareholding to 49%. On June 30, 2013, Chizim Gold stopped conducting feasibility studies on certain exploration tenements in Zimbabwe. The group has a contingent liability as at June 30, 2013, amounting to Rnil (2012: R31.4 million) in terms of the funding requirements as per the joint venture agreement and capital commitments amounting to Rnil (2012: R9.3 million).
  The group’s policy is to capitalize exploration costs. Chizim Gold was purely in an exploration phase up until June 30, 2013, therefore the group’s effective share in income and expenses of the joint venture is Rnil (2012:
  Rnil).
  The group’s effective share of assets and liabilities in the joint venture, which are included in the consolidated financial statements, are as follows:
Statement of financial position

Non-current assets
-
26,984
Current assets
518
1,149
Total assets
518
28,133
Shareholders’ equity
313
27,367
Current liabilities
205
766
Total equity and liabilities
518
28,133
13. INVESTMENT IN ASSOCIATE
West Wits SA Proprietary Limited – percentage held
28.33%
28.33%
Investment in associate – at cost
2,700
2,700
Impairment of investment in associate
(2,700)
(2,700)
Carrying value of investment in associate
-
- background imageF-48
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
20132012
R’000R’000
14. INVENTORIESGold in process
35,037
32,820
Consumable stores
73,428
58,149
Finished stock - bullion
30,382
14,871
138,847
105,840
Inventory includes gold in process carried at net realizable value amounting to R31.7 million (2012: Rnil) and finished stock –bullion amounting to R21.9 million (2012: R0.9 million).
20132012
R’000R’000
15. TRADE AND OTHER RECEIVABLES
Trade receivables (gold)
30,415
2,082
Value added tax
17,110
30,044
Prepayments
403
1,022
Receivables from related parties
177
614
Interest receivable
1,646
1,074
Disposal of property and other receivables
39,354
34,880
Allowance for impairment
(6,360)
(7,820)
82,745
61,896 background imageF-49
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
20132012
2011
R’000R’000
R’000
16. EQUITY OF THE OWNERS OF THE PARENT
Details of equity of the owners of the parent are provided in the statements


of changes in equity on page F-5.



Authorized share capital



600,000,000 (2012: 600,000,000) ordinary shares of no par value



5,000,000 (2012: 5,000,000) cumulative preference



shares of 10 cents each
500
500 500
Issued share capital

385,383,767 (2012: 385,383,767) ordinary shares of no par value
4,133,687
4,133,867 4,132,604
6,205,559 (2012: 6,268,173) treasury shares held within the group
(44,400)
(44,750) -
5,000,000 (2012: 5,000,000) cumulative preference shares of 10 cents each
500
500 500
4,089,787
4,089,617
  4,133,104
Share capital Unissued sharesIn terms of an ordinary resolution passed at the previous annual general meeting, the remaining unissued ordinary shares in thegroup are under the control of the directors until the next general meeting.Cumulative preference sharesThe terms of issue of the cumulative preference shares were that they carried the right, in priority to the company's ordinary shares, to receive a dividend equal to 3% of the gross future revenue generated by the exploitation or the disposal of Argonaut'smineral rights acquired from Randgold and Exploration Company Limited in September 1997. The Department of Mineral Resources (DMR) granted DRDGOLD a prospecting right over an area which was going to be too small to mine. When an application for a greater area was lodged, the DMR stated that the additional area is in an urban location and an application for a prospecting right cannot be granted. The company is in the process of consulting with the relevant preference shareholder to cancel these preference shares.Option instrumentsThe company currently has one class of options authorized but not issued, namely Durban Deep ‘C’ options. There are 10,000,000 authorized option instruments at year-end which entitle the holder to subscribe for one ordinary share per option instrument at a subscription price of R15 per ordinary share, which are exercisable at any time during the period from the date on which the option is issued by the company to a date no later than five years from the date of issue.
20132012
2011
R’000R’000
R’000
Revaluation and other reserves
Foreign exchange translation reserve (a)
5,882
(3,252) 747
Asset revaluation reserve (b)
186,459
152,840 143,049
Share-based payments reserve (c)
32,601
55,487 59,553
224,942
205,075
  203,349 background imageF-50
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
16. EQUITY OF THE OWNERS OF THE PARENT (continued)(a) The foreign exchange translation reserve represents the cumulative translation effect arising on the translation of the financial statements of the group’s foreign investment in Zimbabwe (refer note 12).
  (b)  On the acquisition of ErgoGold in the year ending June 30, 2009, an amount of R133.3 million was taken to the asset revaluation reserve. This amount represented the increase in the fair value of ErgoGold's net assets after the acquisition of the group's initial interest, which is attributable to that initial interest.
  The fair value adjustment on the available-for-sale instruments relating to the investment in Village amounted to R117.2 millionloss (2012: R11.5 million gain and 2011: Rnil). The cumulative fair value adjustment has been reclassified as impairment throughprofit or loss amounting to R101.3 million.
  The cumulative fair value adjustment on the available-for-sale instruments relating to the investment in Rand Refinery ProprietaryLimited (Rand Refinery) as at June 30, 2013, amounted to R53.2 million (2012: R8.0 million and 2011: R7.7 million).
  (c) The company issues equity-settled instruments to certain qualifying employees under an employee share option scheme to purchase shares in the company’s authorized but unissued ordinary shares. Equity share-based payments are measured at the fair value of the equity instruments at the date of the grant. Deferred share-based compensation is expensed over the vesting period,based on the company’s estimate of the shares that are expected to eventually vest. During the year ended June 30, 2013, the company offered participants to buy-out all vested share options. The buy-out amounted to R24.1 million (2012: Rnil and 2011: Rnil).
201320122011
R’000
R’000R’000
DividendsThe following dividends were declared and paid by the group: 24.0 cents per qualifying ordinary share (2012: 7.5 cents and 2011: 5.0 cents)
(91,004)
(28,872)
  (19,244)
After June 30, 2013, a dividend of 14 cents per qualifying share (R54.0 million) was approved by the directors as a final dividendfor 2013. The company has no STC credits to utilize against the dividends tax. Dividend tax is levied at 15% (2012: 15%) (certain exemptions apply) and will be withheld from the dividend depending on the classification of the beneficial owner of the relevantshare.
20132012
R’000R’000
17. PROVISION FOR ENVIRONMENTAL REHABILITATION
Opening balance
504,327
490,225
Disposed through disposal of subsidiary
-
(45,999)
(Decrease)/increase in provision (refer note 9)
(6,399)
13,390
Unwinding of provision (refer note 6)
33,537
7,292
Utilization of provision
(22,476)
(19,766)
Charge to profit or loss
15,334
59,185
Closing balance
524,323
504,327
Amounts have been contributed to irrevocable trusts and guarantees have been provided to the DMR (refer to note 10).The group intends to fund the ultimate rehabilitation costs from the money invested with the trust funds together with the Guardrisk Cell Captive as well as, at the time of mine closure, the proceeds on sale of remaining assets and gold from plant clean-up. The rehabilitation is expected to occur progressively towards the end of life of the respective dumps mined. background imageF-51
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
18. POST-RETIREMENT AND OTHER EMPLOYEE BENEFITS
20132012
R’000R’000
Liability for post-retirement medical benefits (a)
6,322
5,972
Liability for long-term employee incentive scheme (b)
2,331
-
8,653
5,972
Contribution funds
The group participates in a number of multi-employer, industry-based retirement plans. All plans are governed by the Pension Funds Act, 1956.
The group pays fixed contributions to external institutions and will have no legal or constructive obligation to pay further amounts.
2013
2012
R’000
R’000
Amounts recognized in profit or loss are as follows:


Contribution payments
(16,246)
(53,425)
(a) Post-retirement medical benefits
A provision for post-retirement medical benefits has been raised, based on the latest calculations using a projected unit creditmethod, of independent actuaries performed as at June 30, 2012. Post-retirement medical benefits are actuarially valued every three years. The obligation is unfunded.
20132012
R’000R’000
Amounts recognized in the statement of financial position are as follows:
Opening balance
5,972
5,540
Current service cost
92
84
Actuarial loss
-
67
Benefits paid
(282)
(231)
Interest costs
540
512
Closing balance
6,322
5,972
Amounts recognized in profit or loss are as follows:
Current service cost and interest
(92)
(84)
Net actuarial loss
-
(67)
Interest costs
(540)
(512)
(632)
(663)
Principal actuarial assumptions at the reporting date:Health care cost inflation
7.8%
7.8%
Discount rate
8.8%
8.8%
Real discount rate
0.9%
0.9%
Normal retirement age
60
60
Expected average retirement age
60.3
60.3
Spouse age gap
3 years
3 years
Continuation at retirement
100%
100%
Proportion married at retirement
85%
85% background imageF-52
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
18. POST-RETIREMENT AND OTHER EMPLOYEE BENEFITS (continued)
Historical information:
2013201220112009
2008
R’000R’000R’000R’000
R’000
Unfunded liability
6,322
5,972
5,540
12,507
42,498
Actuarial loss/(gain)
-
67
(5,651)
(35,290)
18,226
There are currently no long-term assets set aside in respect of post-retirement medical benefit liabilities.
Assuming all other variables remain constant a one percentage point change in the stated assumptions would have the following effects:
Sensitivity analysis:
Variation
Health care cost
inflation
Mortality
Resignation
rate
R’000
R’000R’000
Effect on the aggregate
+1%
70
(61)
(4)
service and interest cost
-1%
(60)
72
3
Effect in past-service
+1%
733
(645)
(32)
contractual liability
-1%
(626)
752
32
The group expects to pay contributions of R0.3 million during 2014.
(b) Liability for long-term employee incentive scheme
Phantom share scheme
20132012
R’000R’000
Amounts recognized in the statement of financial position are as follows:
Opening balance
-
-
Increase in liability current year
3,349
-
Total liability of employee incentive scheme
3,349
-
Short-term portion of employee incentive scheme
(1,018)
-
Lon-term portion of employee incentive scheme
2,331
-
Details of the schemeThe company operates the DRDGOLD Phantom Share Scheme, as an incentive tool for its executive directors and senior employees whose skills and experience are recognized as being essential to the company's performance. The Phantom Share Scheme was introduced during the year ended June 30, 2013 and is classified as cash settled. In terms of the Phantom Share Scheme rules, 50% of the phantom shares granted will be valued based on the group meeting certain pre-determined performance criteria and the remaining 50% to defined retention periods. The maximum incentive pay-out per annum to any single employee may not exceed 75% of that employee's gross remuneration package. The participants in the scheme are fully taxed at their marginal tax rate on any gains realized on the exercise of their phantom shares.
  The phantom share granted has a zero base value however, the number of phantom shares granted by the Remuneration Committee is determined by price in respect of each share which is the subject of the phantom shares, the volume weighted average price of a share on the JSE for the seven days on which the JSE is open for trading, preceding the day on which the employee is granted the phantom share. The allocation date will be the date when the directors approve allocation of phantom shares. Each phantom share remains in force until date of vesting, subject to the terms of the scheme. background imageF-53
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
18. POST-RETIREMENT AND OTHER EMPLOYEE BENEFITS (continued)
Phantom share scheme (continued)
Phantom shares granted under the Phantom Share Scheme vest primarily according to the following schedule over a maximum of a three year period:
Percentage vested in each period grant:
Period after the original date of the option:
Performance criteria
Retention criteria

33.3% 0%
1
year
33.3% 50%
2
years
33.3% 50%
3
years
On October 31, the group granted 3,019,549 phantom shares to its executive directors and senior employees, to entitle them to acash payment after each vesting period stated above. The cash payment is determined based on performance and retention criteriaas set out in this note.
  Phantom shares granted are initially measured at fair value on grant date and subsequently on each reporting date. This fair value is recognized as an employee expense over the vesting period, adjusted to reflect actual levels of vesting, with the corresponding credit to an employee benefit liability, which is part of non-current and current liabilities.
  The fair value of the phantom shares granted is measured using the Black-Scholes valuation model, taking into account the termsand conditions upon which the phantom shares were granted and management's best estimate of the performance criteria being met at each reporting date.
Analysis of phantom shares:
Year granted
Years
Vested
Unvested
to expiry
June 30, 2013
June 30, 2014
June 30, 2015
June 30, 2016
2013 1
–
3
-
503,265
1,258,156
1,258,128 background imageF-54
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
18. POST-RETIREMENT AND OTHER EMPLOYEE BENEFITS (continued)
Phantom share scheme (continued)
2013
2012
The fair value of the phantom shares determined using the  Black - Scholes option pricing model.
Significant inputs into the model were:
Market price at date of grant (Rand per share)

October 31, 2012 grant
5.92
Vesting periods (years)

October 31, 2012 grant
3
Option strike price (Rand per share)October 31, 2012 grant
5.48
Risk-free rate

October 31, 2012 grant
5.85%
Volatility
(1)
October 31, 2012 grant
16%
The performance criteria of the phantom shares determined  against the group performance:
Return on equity (minimum required)

October 31, 2012 grant
15%
Headline earnings per share (minimum required) (cent per share)

October 31, 2012 grant
0.64
Share price performance (minimum required) (JSE Gold index)October 31, 2012 grant
J150
Free cash flow margin (minimum required)

October 31, 2012 grant
10%
(1)
The volatility is measured at the standard deviation of the expected share price returns and is based on statistical analysis of daily share prices over the last three years.
Share option scheme
Details of the scheme
The company operated a share option scheme, DRDGOLD (1996) Share Scheme, (the Share option scheme), as an incentive tool for its executive directors and senior employees whose skills and experience are recognized as being essential to the company’sperformance. In terms of the Scheme rules, a maximum of 40 million of the issued ordinary shares of the company are reserved for issuance there under and no participant may hold options at any time, which if exercised in full, would exceed 2 million of the company’s issued share capital at that time.
  During the year ended June 30, 2013, the company introduced a new incentive tool called the DRDGOLD Phantom Share Scheme which will replace the Share option scheme and no new share options will be granted under the replaced scheme. The company made an offer to buy-out all vested share options during the year ended June 30, 2013, at fair value based on the Black-Scholes option valuation model amounting to R24.1 million (2012:
  Rnil).
  Options granted under the Share option scheme vest primarily according to the following schedule over a maximum of a three year period:
Percentage vested in each period grant:
Period after the original date of the option:
25% 6
months
25% 1
year
25% 2
years
25% 3
years background imageF-55
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
18. POST-RETIREMENT AND OTHER EMPLOYEE BENEFITS (continued)
Share option scheme (continued)
Any options not exercised within a period of 5 years (issued prior to 2009: 10 years) from the original date of the option willexpire and may not thereafter be exercised.
Share options activity in respect of the DRDGOLD (1996) Share Scheme was as follows:
OutstandingVested
Average

Average

price per
price per
Number of
share
Number of
share
shares
Rshares
R
Balance at July 1, 2011
21,582,927
7.30
16,011,187
12.13
Granted 5,084,563
5.12


Exercised (5,394,749)
3.94


Forfeited/lapsed (1,648,156)
11.38


Balance at June 30, 2012
19,624,585
7.32
13,966,866
8.36
Exercised
(14,699,280)
6.61

Forfeited/lapsed
(1,269,948)
17.36

Balance at June 30, 2013
3,655,357
6.68
715,37814.67
Options to acquire the company’s ordinary shares that were granted post November 7, 2002 and which remain unvested at January 1, 2005, are measured at fair value at grant date. This fair value is recognized as an employee expense over the vestingperiod, adjusted to reflect actual levels of vesting, with the corresponding credit to a revaluation and other reserve, which is part of equity.
  The fair value of the options granted is measured using the Black–Scholes option pricing model, taking into account the terms andconditions upon which the options were granted.Analysis of share options:
Range of exercise prices
Years
Vested
Unvested
to expiry
June 30, 2013
June 30, 2014
June 30, 2015
June 30, 2016
R5< 2-3
-
789,246
-
-
R5>R10 2-4
102,278
1,075,365
1,075,368
-
R10>R15 1-2
177,500
-

-
-
R15>R20 0-1
435,600
-
-
-
715,378
1,864,6111,075,368
- background imageF-56
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
18. POST-RETIREMENT AND OTHER EMPLOYEE BENEFITS (continued)
2013
2012
The fair value of the options determined using the Black - Scholes option pricing model.
Significant inputs into the model were:
Market price at date of grant (Rand per share)

October 18, 2010 option grant
3.66
3.66
November 2, 2011 option grant
5.26
5.26
Vesting periods (years)

October 18, 2010 option grant
3
3
November 2, 2011 option grant
3
3
Option strike price (Rand per share)October 18, 2010 option grant
3.69
3.69
November 2, 2011 option grant
5.12
5.12
Risk-free rate

October 18, 2010 option grant
6.74%
6.74%
November 2, 2011 option grant
6.75%
6.75%
Volatility
(1)
October 18, 2010 option grant
31%
31%
November 2, 2011 option grant
34%
34%
(1) The volatility is measured at the standard deviation of the expected share price returns and is based on statistical analysis of daily share prices over the last
three years. background imageF-57
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
19. DEFERRED TAX
20132012
R’000R’000
Balances arose from the following temporary differences:
Deferred tax assetProperty, plant and equipment
(5)
(5,460)
Provisions, including rehabilitation provision
2,894
29,247
Estimated assessed losses
-
16,836
Investments
-
(4,472)
Other temporary differences
-
2,134
2,889
38,285
Deferred tax liability

Property, plant and equipment
(185,832)
(118,972)
Provisions, including rehabilitation provision
81,358
31,965
Other temporary differences
3,709
(25)
(100,765)
(87,032)
Net deferred mining and income tax liability
(97,876)
(48,747)
Reconciliation between deferred taxation opening and closing balances

Opening balance
(48,747)
(53,293)
Recognized in other comprehensive income
4,471
(4,471)
Investments
4,471
(4,471)
Profit or loss (expense)/credit
(53,600)
9,017
Property, plant and equipment
(61,405)
14,148
Provisions, including rehabilitation provision
23,040
14,382
Estimated assessed losses
(16,836)
(21,624)
Other temporary differences
1,601
2,111
Closing balance
(97,876)
(48,747)
The group provides for deferred tax at the rates which are expected to apply for temporary differences. The group uses the expected average effective tax rates, resulting from the mining tax formula for mining income based on forecasts per individualentity. If a one percentage point increase in the effective tax rate is applied, the deferred tax liability would amount to R103.6 million compared to the current R97.9 million.
  Deferred tax assets have not been recognized in respect of tax losses of R24.1 million (2012: R10.9 million), unredeemed capitalexpenditure of R275.6 million (2012: R177.7 million) and capital losses of R260.3 million (2012: R261.2 million).
  The deferred tax relating to the company’s investment in subsidiaries, joint venture and associate is Rnil (2012: Rnil) resulting from the fact that these investments are to be realized through dividend distributions which are exempt under current tax legislation. As a result there are also no temporary differences. background imageF-58
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
20. LOANS AND BORROWINGS
20132012
R’000R’000
UnsecuredDomestic Medium Term Note Programme (a)
167,626
30,690
167,626
30,690
Less: payable within one year included under current liabilities
(24,294)
(30,690)
143,332
-
Loans and borrowings expected repayment schedule for capital amounts payable inthe twelve months to:June 30, 2013
-
30,690
June 30, 2014
24,294
-
June 30, 2015
143,332
-
167,626
30,690
Analysis of gross loans and borrowings by currency:South African Rand
167,626
30,690
Effective interest rates:Absa Domestic Medium Term Note Programme
9.1%-10.2%
10.6%
(a) During June 2012 the group entered into a Domestic Medium Term Note Programme (DMTN Programme) with ABSA
Capital, a division of ABSA Bank Limited, under which DRDGOLD may from time to time issue notes. R165.0 million was raised during July 2012 and September 2012. The different notes issued mature 12 (R20.0 million),  24 (R69.5 million) and 36 (R75.5 million) months from the date of issue and bear interest at the three month Johannesburg Inter-bank Acceptance Rate (JIBAR) plus a margin ranging from 4% to 5% per annum. The DMTN Programme is unsecured but does have certain covenants attached to it regarding acquiring additional indebtedness, significant disposal of assets and in the form of a guarantor coverage threshold. During the year ended June 30, 2013, the group settled the last unsecured notes issued under the previous DMTN Programme which had a 24 month term and carried interest at the three month JIBAR plus 5%.
21. CASH GENERATED BY OPERATIONS
201320122011
R’000R’000R’000
Profit/(loss) before taxation
145,041
395,499
  (383,226)
Adjusted for:

Depreciation
143,766
120,850
  130,919
Movement in provision for environmental rehabilitation
15,334
59,185 52,567
Movement in gold in process
(17,727)
(14,710) 15,612
Impairments
238,001
1,100 547,656
(Profit)/loss on disposal of property, plant and equipment
(19,267)
9,556 (3,255)
Share-based payments
4,515
4,133 3,519
Rehabilitation trust fund adjustment
-
- 339
(Reversal of impairment)/impairment loss on trade receivables
(1,412)
554
  (5,617)
Actuarial loss/(gain) on post-retirement and employee benefits
-
67
  (5,651)
Post-retirement and other employee benefits
350
(389) (3,038)
Dividends received
(32,470)
(38)
  (6,013)
Finance income
(33,498)
(33,402)
  (46,779)
Finance expenses
41,975
17,706 22,047
Operating cash flows before working capital changes
484,608
560,111 319,080
Working capital changes
(42,240)
63,472
  (3,277)
Change in trade and other receivables
(19,317)
33,583 (56,087)
Change in inventories
(19,510)
(3,328) (10,417)
Change in trade and other payables
(3,413)
33,217 63,227
Cash generated by operations
442,368
623,583 315,803 background imageF-59
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
22. CASH FLOW ON DISPOSAL OF SUBSIDIARIES, NET OF CASH DISPOSED
2013
20122011
R’000
R’000R’000
Total net cash flow on disposal of subsidiary

Blyvoor
-
(9,584) -
-
(9,584) -
Disposal of BlyvoorOn June 1, 2012, DRDGOLD disposed of its 74% shareholding in and loan claims against Blyvoor.
Effect of disposal on the financial position of the group:

Property, plant and equipment

-
114,374 -
Non-current investments and other assets

-
46,989
  -
Inventories
-
36,508 -
Trade and other receivables

-
32,679
  -
Cash and cash equivalents

-
2,358
  -
Provision for environmental rehabilitation

-
(46,001)
  -
Post-retirement and employee benefits

-
(568)
  -
Trade and other payables

-
(145,197)
  -
Consolidated carrying value at time of disposal

-
41,142
  -
Directly attributable costs

-
(7,226)
  -
Less: cash and cash equivalents of disposed entity

-
(2,358)
  -
Cash flow on disposal of subsidiary net of cash disposed
-
(9,584) - background imageF-60
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
23. CASH FLOW ON ACQUISITION OF JOINT VENTURES, NET OF CASH
2013
2012
2011
R’000
R’000
R’000
Acquisition of Chizim Gold
During the year ended June 30, 2011, the group entered into a 50:50 joint venture in a start-up company called Chizim Gold for a nominal cash consideration amounting to $1 (refer note 12). Cash flow on acquisition of joint venture
-
-
-
24. CASH AND CASH EQUIVALENTS
Included in cash and cash equivalents is restricted cash of R18.2 million (2012: R68.6 million) in a form of guarantees of which Rnil (2012: R43.0 million) relates to a guarantee given to AngloGold Ashanti Limited.
Cash and cash equivalents
377,169
298,506 259,112
377,169
298,506 259,112
25. CASH FLOWS RELATING TO EXPLORATION ASSETS

Investing cash flow
(13,533)
(14,078)
(17,210)
20132012
R’000R’000
26. COMMITMENTS AND CONTINGENT LIABILITIES
Capital commitmentsContracted for but not provided for in the annual financial statements
12,460
93,015
Authorized by the directors but not contracted for
17,587
201,273
30,047
294,288
This capital expenditure will be financed from existing cash resources, cash generated from operations and negotiated funding facilities.Operating lease commitmentsThe group leases its office building in terms of an operating lease. The group does not have an option to acquire the building at the termination of the lease. There is an escalation of 8% per annum imposed by the lease agreement.
  Ergo leases its vehicles under various operating leases. There is an average escalation of 2.5% per annum imposed by these leaseagreements.
20132012
R’000R’000
The future minimum lease payments under non-cancellable operating leases are as follows:

Not later than 1 year
1,648
1,733
Between 1 and 5 years
1,781
2,653 background imageF-61
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
26. COMMITMENTS AND CONTINGENT LIABILITIES (continued)
Contingent liabilities
EnvironmentalAt Durban Roodepoort Deep mine, rehabilitation and other responsibilities like the National Nuclear Regulator Certificate of Registration requirements have been taken over by DRD Proprietary Limited (a subsidiary of Mintails SA Proprietary Limited). An official liability transfer in terms of section 58 of the Mineral and Petroleum Resources Development Act, 2002, has been submitted to the DMR. The DRD Village has been sold to a property developer (Dino Properties). The legal transfer of the liability would be dependent on the DMR’s assessment of Mintail’s financial capability. DRDGOLD therefore still has a contingent  liability until such legal transfer is effected, amounting to R63.4 million less the trust fund amount of R25.6 million. We are still awaiting formal registration of this transfer.
  Mine residue deposits have a potential pollution impact on ground water through seepage, known as acid mine drainage (AMD). The group has taken certain preventative actions as well as remedial actions in an attempt to minimize the group’s exposure to environmental contamination.
  The flooding of the Western and Central basins has the potential to cause pollution due to AMD contaminating the ground water. The government has appointed Trans-Caledon Tunnel Authority (TCTA) to construct a partial treatment plant to prevent the ground water being contaminated. This plant is due to be commissioned by January 2014. They will then consider options for the long term sustainable solution to treating and reusing this water.
  In December 2012, EMO, Ergo and ERPM (collectively referred to as the Ergo Group) entered into heads of agreement with Trans-Caledon Tunnel Authority (TCTA), aimed at laying a foundation for a self-sustainable solution to acid mine drainage (AMD) in the Central Witwatersrand Basin. TCTA, acting through directives issued by the Minister of Water and Environmental Affairs and the Department of Water Affairs, is to construct pumping and treatment facilities to intercept rising AMD, and to prevent it from reaching the so-called ‘environmental critical level’. In terms of the heads of agreement, the Ergo Group grantsTCTA:
· access to land for the construction of a water treatment plant; · access to the South West Vertical Shaft of East Rand Proprietary Mines Limited (ERPM) to construct and operate apump station to pump AMD to surface; · the right to construct a sludge pipeline, using servitudes owned by Ergo Group members; · shared use of an Ergo Group residue pipeline; and · partial use of the Ergo tailings dams for the deposition of up to 4 167m3 of sludge per day, emanating from the watertreatment plant.
Also in terms of the heads of agreement EMO has an option, at its election, to acquire from TCTA, for its operations, up to 30 mega litres of untreated or partially treated AMD per day. While these heads of agreement should not be seen as an unqualified endorsement of the State’s AMD solution, and do not affect our right to either challenge future directives or to implement our own initiatives should it become necessary, they are an encouraging development. In particular if the spirit of cooperation that led to its conclusion is taken into the implementation and management of the project, this initiative has every chance of success.
  DRDGOLD, through its participation in the Western Utilities Corporation initiative, provided the government with a solution fora sustainable long term solution to AMD. This solution would not have cost the mines or Government anything. In view of the limitation of current information for the accurate estimation of a potential liability, no reliable estimate can be made for thepossible obligation. background imageF-62
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
26. COMMITMENTS AND CONTINGENT LIABILITIES (continued)Occupational health - SilicosisIn January 2013 DRDGOLD, ERPM and 23 other mining companies were served with a court application for a class action issued in the South Gauteng High Court by alleged former mineworkers and dependents of deceased mineworkers. In the pending application the applicants allege that DRDGOLD, ERPM and other mining companies conducted underground mining operations in such a negligent manner that the former mineworkers contracted silicosis.  The applicants have not yet quantified the amountswhich they would like the mining companies to pay as damages. DRDGOLD and ERPM have instructed Malans Scholes Attorneys to defend the case. The companies are currently gathering information in preparation for the matter.
  Taking into account that the silicosis claim is still at certification stage and should anyone bring similar claims against DRDGOLD or any of its subsidiaries in future, those claimants would need to provide evidence proving that silicosis was contracted while in the employment of the company and that it was contracted due to negligence on the company’s part. The link between the cause (negligence by the company while in its employ) and the effect (the silicosis) will be an essential part of anycase. It is therefore uncertain as to whether the company will incur any costs related to silicosis claims in the future and due to the limited information available on any claims and potential claims and the uncertainty of the outcome of these claims, no reliableestimation can be made for the possible obligation.Dispute with the Ekurhuleni MunicipalityThe Ekurhuleni Municipality has brought an action against ERPM claiming an amount of R42.0 million in respect of outstanding rates and taxes which are allegedly owing. As at June 30, 2013, the difference between the invoiced amount and ERPM’s calculations amounted to R52.8 million. ERPM has employed experts to investigate the allegations and it appears that this claimis unfounded. ERPM is defending this action and has employed Norton Rose Attorneys to represent it. There are sufficient defences to repel the claim, therefore the probability of an outflow of resources is not probable.27. FINANCIAL INSTRUMENTSOverviewThe group has exposure to credit risk, liquidity risks, as well as other market risks from its use of financial instruments. This note presents information about the group’s exposure to each of the above risks, the group’s objectives and policies and processes for measuring and managing risk. The group’s management of capital is disclosed in note 28. Further quantitative disclosures are included throughout these consolidated financial statements.Risk management frameworkThe Board of Directors has overall responsibility for the establishment and oversight of the group's risk management framework.The board has established the Risk Committee, which is responsible for developing and monitoring the group's risk management policies. The committee reports regularly to the Board of Directors on its activities.
  The group's risk management policies are established to identify and analyze the risks faced by the group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly toreflect changes to market conditions and the group's activities. The group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles andobligations.
  The Audit Committee oversees management’s monitoring of compliance with the group's risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the group. The Audit Committee is assisted in its oversight role by the internal audit function. The internal audit function undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.CREDIT RISKCredit risk is the risk of financial loss to the group if a customer or counterparty to a financial instrument fails to meet itscontractual obligations, and arises principally from the group’s receivables from customers and investment securities.
  The group's financial instruments do not represent a concentration of credit risk, because the group deals with a variety of major banks and financial institutions located in South Africa after evaluating the credit ratings of the representative financial institutions. Furthermore, its trade receivables and loans are regularly monitored and assessed for recoverability. Where appropriate, an impairment loss is raised.
  In addition, the group's operations all deliver their gold to Rand Refinery Proprietary Limited (Rand Refinery), which refines the gold to saleable purity levels and then sells the gold, on behalf of the South African operations, on the bullion market. The gold is usually sold by Rand Refinery on the same day as it is delivered and settlement is made within two days. background imageF-63
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
27. FINANCIAL INSTRUMENTS (continued)
The following represents the maximum exposure to credit risk for all financial assets at June 30:
Carrying
Carrying
value
value
2013
2012
R'000
R'000



Financial assets


Listed investments (refer note 10)
34,071
151,303
Unlisted investments (refer note 10)
93,384
20,426
Loans to DRDSA Empowerment Trust (refer note 10)
2,592
4,431
Investments in environmental rehabilitation guarantees (refer note 10)
90,667
59,264
Investments in environmental rehabilitation trust funds (refer note 10)
86,356
106,328
Trade and other receivables
65,232
30,830
Cash and cash equivalents (refer note 24)
377,169
298,506
749,471
671,088
The following represents the maximum exposure to credit risk for trade and other receivables at June 30:
Carrying
Carrying

value
value
2013
2012
R'000
R'000
Trade receivables (gold) (refer note 15)
30,415
2,082
Receivables from related parties (refer note 15)
177
614
Other receivables
34,640
28,134
65,232
30,830
The ageing of trade and other receivables at June 30:
GrossImpair-
GrossImpair-
valuement
valuement
20132013
20122012
R'000R'000
R'000R'000
Not past due
62,665(67)
9,320
  (91)
Past due 0-30 days
652(57)
2,441
  (186)
Past due 31-120 days
1,302(1,117)
17,082
  (923)
More than 120 days
6,973(5,119)
9,807 (6,620)
71,592(6,360)
38,650
  (7,820)
Impairments were raised due to the uncertainty around the recoverability and timing of the cash flows.
Movement in the allowance for impairment in respect of trade and other receivables during the year was as follows:
ImpairmentImpairment
20132012
R'000
R'000
Balance at July 1
(7,820)
(7,266)
Impairment reversed/(recognized)
1,460
(554)
Balance at June 30
(6,360)
(7,820)
The group has no significant credit risk as the majority of the group’s receivables are from debtors with a good track record. The impairment raised for debtors older than 120 days largely relates to the leasing of hostels. background imageF-64
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
27. FINANCIAL INSTRUMENTS (continued)
LIQUIDITY RISK
Liquidity risk is the risk that the group will not be able to meet its financial obligations as they fall due. The group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the group’s reputation.
  The group ensures that it has sufficient cash on demand to meet expected operational expenses, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such asnatural disasters.
  Unless otherwise stated, the following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements:
CarryingContractual
6 months
6-12
More than
amount
cash flows
or less
months
2-5 years
5 years
R’000R’000
R’000
R’000
R’000
R’000
June 30, 2013






Unsecured





Domestic Medium Term Note Programme
167,626
(188,841)
(28,142)
-
(160,699)
-
Trade and other payables
219,601
(219,601)
(219,601)
-
-
-
387,227
(408,442)
(247,743)
-
(160,699)
-






June 30, 2012






Unsecured






Domestic Medium Term Note Programme30,690
(30,802)
(30,802)
-
-
-
Trade and other payables
227,392
(227,392)
(227,392)
-
-
-
258,082
(258,194)
(258,194)
-
-
- background imageF-65
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
27. FINANCIAL INSTRUMENTS (continued)
FAIR VALUE OF FINANCIAL INSTRUMENTS
The following table represents the carrying amounts and fair values of the group's financial instruments at June 30:
Carrying
Fair
Carrying
Fair
value
value
value
value
2013
2013
2012
2012
R’000
R’000
R’000
R’000
Financial assets


Listed investments (refer note 10)
34,071
34,071
151,303
151,303
Unlisted investments (refer note 10)
93,384
93,384
20,426
20,426
Loans to DRDSA Empowerment Trust (refer note 10)
2,592
2,592
4,431
4,431
Investments for environmental rehabilitation guarantees (refer note 10)
90,667
90,667
59,264
59,264
Investments in environmental rehabilitation trust funds (refer note 10)
86,356
86,356
106,328
106,328
Trade and other receivables
65,232
65,232
30,830
30,830
Cash and cash equivalents
377,169
377,169
298,506
298,506
749,471
749,471
671,088
671,088
Financial liabilities


Loans and borrowings (refer note 20) – non-current
143,332
143,332
-
-
– current
24,294
24,294
30,690
30,690
Trade and other payables
219,601
219,601
227,392
227,392
387,227
387,227
258,082
258,082
The fair value of a financial instrument is defined as the amount at which the instrument could be exchanged between knowledgeable, willing parties in an arm's length transaction.Fair valuesListed investmentsThe fair value of listed investments is determined with reference to published price quotations from recognized securities exchanges and adjusted with a discount factor for any liquidity constraints where appropriate.Unlisted investmentsThe valuations are based on the net asset values of these investments and constitute the investments’ fair value as most of theassets in these investment companies are carried at fair value. The valuations have been compared to recent transactions in theunderlying investments with external parties.Loans to black empowerment entitiesThe fair value of these loans cannot be reliably estimated due to the unavailability of market information and are therefore carried at cost.Cash and cash equivalents, environmental trust funds and environmental guaranteesThe carrying value of cash and cash equivalents approximates their fair value due to the short-term maturity of these deposits.The carrying value of the environmental trust funds and investments for environmental rehabilitation guarantees approximate their fair value due to these investments being cash in nature.Trade and other receivablesThe fair value approximates the carrying value due to their short-term maturities.Loans from Domestic Medium Term Note ProgrammeFair value is calculated by reference to quoted prices from floating interest instruments.Trade and other payablesThe fair value approximates the carrying value due to their short-term maturities. background imageF-66
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
27. FINANCIAL INSTRUMENTS (continued)
FAIR VALUE OF FINANCIAL INSTRUMENTS(continued)MARKET RISKMarket risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the group's income or the value of its holding of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing returns.Commodity price sensitivityThe profitability of the group's operations, and the cash flows generated by those operations, are affected by changes in the market price of gold which is predominantly sold in US Dollar. DRDGOLD does not enter into forward sales, derivatives or other hedging arrangements to establish a price in advance for the sale of future gold production.Interest rate riskFluctuations in interest rates impact on the value of short-term cash investments and financing activities, giving rise to interest rate risks. In the ordinary course of business, the group receives cash from its operations and is obliged to fund working capital and capital expenditure requirements. This cash is managed to ensure surplus funds are invested in a manner to achieve maximum returns while minimizing risks. Funding deficits for the group's mining operations have been financed through the issue of additional shares and external borrowings. Lower interest rates result in lower returns on investments and deposits and may alsohave the effect of making it less expensive to borrow funds at then current rates. Conversely, higher interest rates result in higher interest payments on loans and overdrafts.The following represents the interest rate risk profile for the group's interest-bearing financial instruments:
CarryingCarrying
valuevalue
20132012
R’000R’000
Variable interest rate instrumentsFinancial assets
554,192
464,098
Financial liabilities
(167,626)
(30,690)
386,566
433,408
Cash flow sensitivity analysis for variable rate instruments:
A change of 100 basis points (bp) in interest rates at the reporting date would have increased/(decreased) equity and profit/(loss) by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.The analysis is performed on the same basis for 2012.
20132012
Equity and profit or loss
Equity and profit or loss
100 bp
100 bp
100 bp
100 bp
increasedecreaseincreasedecrease
June 30
R’000
R’000
R’000
R’000
Variable interest rate instruments
3,866(3,866)4,334 (4,334)
Cash flow sensitivity
3,866(3,866)4,334 (4,334) background imageF-67
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
27. FINANCIAL INSTRUMENTS (continued)Foreign currency riskThe group’s reporting currency is the South African Rand. Although gold is sold in US Dollars, the group is obliged to convert this into South African Rand. The group is thus exposed to fluctuations in the US Dollar/South African Rand exchange rate. The group conducted its operations in South Africa during the current year. Foreign exchange fluctuations affect the cash flow that it will realize from its operations as gold is sold in US Dollars, while production costs are incurred primarily in South African Rands. The group's results are positively affected when the US Dollar strengthens against the Rand and adversely affected when the US Dollar weakens against the Rand.
  The group does not hedge against foreign currency fluctuations and considers the risk to be low due to foreign currency normallybeing disposed of on the same day. The group is also exposed to certain by-product commodity price risk. The group's cash and cash equivalent balances are held in US Dollars and South African Rands; holdings denominated in other currencies are relativelyinsignificant.The following represents the exposure to foreign currency risks:
USDUSD 20132012
’000’000
Cash and cash equivalents
746
57
Trade and other receivables
3,082
334
Trade and other payables
(21)
(93)
Net statement of financial position exposure
3,807
298
The following significant exchange rates applied during the year:
Spot rate at year-end
Average rate
2013201220132012
1 US Dollar
9.8675
8.2700
8.8328
7.7523
Sensitivity analysis
A 10% strengthening of the Rand against the currencies mentioned at June 30, would have increased/(decreased) equity and profit/(loss) by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the same basis for 2012.
Impact
20132012
R’000R’000
Equity
31
39
Loss
3,726
(285)
A 10% weakening of the Rand against the above currencies at June 30, would have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant. background imageF-68
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
27. FINANCIAL INSTRUMENTS (continued)Other market price riskEquity price risk arises from available-for-sale equity securities fair value adjustments accounted for in other comprehensive income. Investments within the portfolio are managed on an individual basis and all buy and sell decisions are approved by the Risk Committee when significant.CATEGORIES OF FINANCIAL INSTRUMENTSThe following table represents the carrying amounts and net gain/(loss), finance income and finance expense per category of financial instruments at June 30:
Net gain/loss,
finance income

Net gain/loss,
finance income
Carrying
value
and finance
expense
Carrying
value
and finance
expense
2013
2013
20122012
R'000
R'000
R'000R'000
Financial assetsAvailable-for-sale financial assets
127,455
32,470
171,729 6,694
Loans and receivables
622,016
33,498
499,359 25,104
749,471
65,968
671,088 31,798
Financial liabilitiesFinancial liabilities measured at amortized cost
387,227
8,438
258,082 (8,772)
387,227
8,438
258,082 (8,772)
FAIR VALUE HIERARCHY
The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:
-
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
-
Level 2: inputs other than quoted prices included within Level 1 that are observed for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
-
Level 3: inputs for the asset or liability that are not based on observed market data (unobserved inputs).
Level 1
Level 2
Level 3
Total
R'000
R'000
R'000R'000
June 30, 2013Available-for-sale financial assets
29,571
4,500
93,384127,455
29,571
4,500
93,384127,455
June 30, 2012Available-for-sale financial assets
-
151,303
20,426 171,729
-
151,303
20,426 171,729
There has been a transfer between level 2 and level 1 as indicated in the table below (2012: no transfers in either direction). background imageF-69
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
27. FINANCIAL INSTRUMENTS (continued)
FAIR VALUE HIERARCHY (continued)
Reconciliation of fair value measurements in Level 2 and Level 3 during the year:
2013
2012
Level 2
Level 3
Level 2
Level 3
R'000R'000R'000R'000
Available-for-sale financial assets




Balance at beginning of year
151,30320,426
- 14,987
Purchases during the year
-26,866135,332
  9,609
(Loss)/gain on fair value adjustment
(117,232)46,09415,971 7,683
Transfer to level 1
(29,571)-- -
Disposed through the disposal of subsidiary
--- (11,853)
Balance at end of year
4,500
93,386
151,303 20,426
(Loss)/gains recognized in profit or loss
(101,261)-- 6,656
(Loss)/gains recognized in other comprehensive income
(11,499)46,09411,499 1,027
Losses)/gains recognized in other comprehensive income
(112,760)46,09411,499 7,683
Losses/(gains) released to profit or loss
101,261-- (6,656)
(112,760)46,09411,499 7,683
The gain or loss on the fair value adjustment is recognized in other comprehensive income net of deferred tax.The available-for-sale financial assets level 2 comprise investments in listed shares for which an index related factor has beenapplied for liquidity of the share. The available-for-sale financial assets level 3 comprises investments in unlisted shares for which no reasonable alternative measure for fair value is available. Therefore no sensitivity analysis has been prepared. The fair value of Rand Refinery’s unlisted shares is a director’s valuation, which was made by using the net asset value of the company which hasbeen compared to recent market transactions with external parties. The Rand Mutual Assurance Company’s fair value is also based on a director’s valuation of which the value per share is fixed at R0.20 between shareholders.28. CAPITAL MANAGEMENTThe primary objective of the board of directors (the board) in managing the group's capital is to ensure that there is sufficient capital available to support the funding requirements of the group, including capital expenditure, in a way that optimizes the cost of capital, maximizes shareholders' returns, and ensures that the group remains in a sound financial position. There were no changes to the group's overall capital management approach during the current year. The group manages and makes adjustments to the capital structure as opportunities arise in the market place, as and when borrowings mature, or as and when funding is required. This may take the form of raising equity, market or bank debt or hybrids thereof.
  The board monitors the return on capital, which the group defines as net operating income divided by total shareholders' equity,excluding non-redeemable preference shares and non-controlling interest from continuing operations, and seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position. The board decides the level of dividends to ordinary shareholders.The group’s net debt to equity ratio as at June 30, was as follows:
20132012
R’000R’000
Total liabilities
1,022,876
858,368
Less: Cash and cash equivalents
(377,169)
(298,506)
Net liabilities
645,707
559,862
Total equity
1,648,269
1,633,921
Net debt to equity ratio at June 30
0.39
0.34
The DMTN Programme also does not place any restrictions on the incurrence of financial indebtedness if there is no breach in theterms of the DMTN Programme which includes certain covenants. background imageF-70
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
29. RELATED PARTY TRANSACTIONS
201320122011
R’000R’000R’000
Key management personnel remuneration

Short-term benefits
Salaries, bonuses and performance payments
76,405
78,114 67,625
End of contract payments
-
-
  -
Long service awards
Share-based payment expense
4,515
4,133 3,519
Post-retirement medical benefits
282
231
  364
81,202
82,478
  71,508
The group has related party relationships with its associate, joint venture, subsidiaries and with its directors and key management personnel. Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the company, directly or indirectly, including any director (whether executive or otherwise) of the company.  During the year ended June 30, 2013, 62,614 (2012: 3,584,627 and 2011: none) treasury shares were used to settle share options exercised by key management personnel.
  Post-retirement medical benefits and long-term employee incentive scheme balances for key management personnel as at June 30, 2013 amounts to R6.3 million (2012: R6.0 million and 2011: R5.5 million) and R3.3 million (2012: Rnil and 2011:
  Rnil), respectively.
  Prior to the awarding of a contract to a related party for the supply of goods and services the group procurement manager reviews both the pricing, quality and the reliability of that party. The contract terms are compared to similar suppliers of goods and services to ensure that the contract is on market-related terms.Transactions with associates, joint ventures and subsidiary companiesDuring the year ended June 30, 2013, the company earned management fees from EMO amounting to R25.1 million (2012: R21.6 million and 2011: R23.3 million) and interest of R23.0 million (2012: R26.6 million and 2011: R26.8 million), and from Blyvoor amounting to Rnil (2012: R15.2 million and 2011: R12.3 million) and received interest amounting to Rnil (2012: R2.6 million and 2011: R3.2 million), respectively.
  Insurance premiums were paid to Guardrisk Cell Captive amounting to R21.0 million by Ergo, respectively (2012: R41.8 million by ERPM and R21.0 million by Ergo). Guardrisk contractually guarantees an amount of R304.9 million of which R304.9 million worth of guarantees have been issued to the
  DMR.
  During the year ended June 30, 2013, EMO acquired no (2012: 9,852,800 and 2011: none) ordinary shares (held as treasury shares for consolidation purposes) in the company. As at June 30, 2013, EMO held 6,205,559 (2012: 6,268,173 and 2011: none) treasury shares. background imageF-71
NOTES TO THE FINANCIAL STATEMENTS (continued)for the year ended June 30, 2013
29. RELATED PARTY TRANSACTIONS (continued)
Subsidiaries
The following information relates to the group’s financial interest in its subsidiaries at June 30:
ISSUED ORDINARY
SHARE CAPITAL
SHARES AT
COST
LESS
IMPAIRMENTS
R’000
INDEBTEDNESS
NET OF
IMPAIRMENTS
2013
R’000
INDEBTEDNESS
NET OF
IMPAIRMENTS
2012
R’000
NUMBER OF
SHARES
% HELD
South Africa





Argonaut Financial Services Proprietary Limited
100
100
-
(1,055)
(1,055)
Crown Consolidated Gold Recoveries Limited
51,300,000
100
-
(245,316)
(245,316)
Ergo Mining Operations Proprietary Limited
1
1,000,00074113,1771,207,159
917,867
Hartebeestfontein Gold Mining Company Limited
1
100
-
-
-
Rand Leases (Vogelstruisfontein) Gold Mining





Company Limited
118,505,000
100
-
(42,092)
(42,092)
Roodepoort Gold Mine Proprietary Limited
1
100
-
-
-
West Witwatersrand Gold Holdings Limited
99,000,000
100
-
(22,996)
(22,996)
Guardrisk Insurance Company Limited2
20
100
100
-
-
ErgoGold-
-
-
-
56,907
Total

113,277
895,700
663,315
1
Ergo Mining Operations Proprietary Limited holds the following investments: 100% of East Rand Proprietary Mines Limited (ERPM), 100% of Crown Gold
Recoveries Proprietary Limited (Crown) and 100% of Ergo Mining Proprietary Limited (Ergo). The ErgoGold joint venture (unincorporated) was dissolved on July 1, 2012, when Ergo Mining Operations Proprietary Limited’s 65% interest and DRDGOLD Limited’s 35% interest were disposed of to Ergo as part of the internal restructuring done by the group. 2Guardrisk Insurance Company Limited is consolidated as a special purpose entity (SPE).
Joint VenturesThe joint ventures for which the statement of profit or loss and other comprehensive income and statement of financial positionhave been proportionately consolidated are disclosed in note 12. The company provided extended a loan to Chizim Gold amounting to R44.6 million (2012: R30.6 million) which the company has impaired in its separate set of financial statements.Rand Refinery agreementThe group has entered into an agreement with Rand Refinery Limited (Rand Refinery), for the refining and sale of all of its goldproduced in South Africa.  Under the agreement, Rand Refinery performs the final refining of the group’s gold and casts it intotroy ounce bars.  The gold is usually sold on the same day as it is delivered for the London afternoon fixed price.  In exchange for this service, the group pays Rand Refinery a variable refining fee plus fixed marketing, loan and administration fees.  Mr. T.J.Gwebu, Executive Officer: Legal, Compliance and Company Secretary of DRDGOLD, is a director of Rand Refinery and a member of the Remuneration Committee and chairman of the Social and Ethics Committee. Mr. D.J. Pretorius, CEO of DRDGOLD, was replaced during the year ended June 30, 2012, as an alternate director of Rand Refinery by Mr. M. Burrell, financial director of Ergo and a member of Rand Refinery’s Audit Committee. The group currently owns shares in Rand Refinery (which is jointly owned by South African mining companies) (refer note 10).  Trade receivables to the amount of R30.4 million (2012: R2.0 million) relate to metals sold.  The group received a dividend of R6.8 million (2012: Rnil and 2011: R6.0 million) from Rand Refinery.Consultancy agreementOn June 23, 2008 EMO approved a consultancy agreement with Khumo Gold, which owns 20% of EMO and Blyvoor. The agreement provides for a monthly retainer of R216,000 (2012: R200,000 and 2011: R200,000).30. SUBSEQUENT EVENTSThere were no significant subsequent events between the yearend reporting date of June 30, 2013, and the date of issue of thesefinancial statements. background image103


103

ITEM 19. EXHIBITS

The following exhibits are filed as a part of this Annual Report:
1.1
(1)

Memorandum of Association of DRDGOLD Limited.
1.2
(7)

Articles of Association of DRDGOLD Limited, as amended on November 8, 2002.
1.3
(1)

Excerpts of relevant provisions of the South African Companies Act.
1.4
(2)

Durban Roodepoort Deep (1996) Share Option Scheme as amended.
1.5
(13)

Memorandum of Incorporation, as amended on November 30, 2012.
2.1
(1)

Excerpts of relevant provisions of the Johannesburg Stock Exchange Listings Requirements.
2.2
(5)

Indenture between DRDGOLD Limited, as Issuer, and The Bank of New York, as Trustee, dated November 12, 2002.
4.1
(3)

Deposit Agreement among DRDGOLD Limited, The Bank of New York as Depositary, and owners and holders of American Depositary Receipts, dated as of August 12, 1996, as amended and restated as of October 2, 1996, as further amended and restated as of August 6, 1998, as further amended and restated July 23, 2007.
4.2
(4)

Form of Non-Executive Employment Agreement.
4.3
(4)

Form of Executive Employment Agreement.
4.4
(5)

Agreement between DRDGOLD Limited and Rand Refinery Limited, dated October 12, 2001.
4.5
(6)

Term Sheet concluded between DRDGOLD Limited and Khumo Bathong Holdings Proprietary Limited (KBH), dated July 6, 2005.
4.6
(6)

Option Agreement entered into by and between DRDGOLD Limited and M5 Developments Proprietary Limited, dated July 21, 2005.
4.7
(7)

Subscription Agreement between DRDGOLD Limited and DRDGOLD South African Operations Proprietary Limited, dated November 9, 2005.
4.8
(7)

Share Sale Agreement between Crown Consolidated Gold Recoveries Limited and DRDGOLD South African Operations Proprietary Limited, dated November 14, 2005.
4.9
(7)

Subscription Agreement between DRDGOLD South African Operations Proprietary Limited and Khumo Gold SPV Proprietary Limited, dated November 18, 2005.
4.10
(7)

Subscription Agreement between DRDGOLD Limited and Khumo Gold SPV Proprietary Limited, dated November 18, 2005.
4.11
(7)

Cession Agreement between DRDGOLD Limited and Khumo Gold SPV Proprietary Limited and Khumo Bathong Holdings Proprietary Limited, dated November 18, 2005.
4.12
(7)

Option Agreement between DRDGOLD Limited and Khumo Gold SPV Proprietary Limited and DRDGOLD South African Operations Proprietary Limited, dated November 18, 2005.
4.13
(7)

Offer of Class A Preference Share between Khumo Gold SPV Proprietary Limited and East Rand Proprietary Mines Limited, dated November 18, 2005.
4.14
(7)

Offer of Class A Preference Share between Khumo Gold SPV Proprietary Limited and Blyvooruitzicht Gold Mining Company Limited, dated November 18, 2005.
4.15
(7)

Offer of Class A Preference Share between Khumo Gold SPV Proprietary Limited and Crown Gold Recoveries Proprietary Limited, dated November 18, 2005.
4.16
(7)

Shareholders’ Agreement between DRDGOLD Limited and Khumo Gold SPV Proprietary Limited and DRDGOLD South African Operations Proprietary Limited, dated November 24, 2005.
4.17
(8)

Option Exercise Agreement between DRDGOLD Limited, Khumo Gold SPV Proprietary Limited and the Trustees for the time being of the DRDSA Empowerment Trust dated October 10, 2006.
4.18
(8)

Class B Preference Share Subscription Agreement between DRDGOLD Limited and Khumo Gold SPV Proprietary Limited dated October 24, 2006.
4.19
(8)

Three Class B Preference Share Subscription Agreements between Khumo Gold SPV Proprietary Limited and Blyvooruitzicht Gold Mining Company Limited, Crown Gold Recoveries Proprietary Limited and East Rand Proprietary Mines Limited, dated October 24, 2006.
4.20
(8)

Three Class C Preference Share Subscription Agreements between the Trustees for the time being of the DRDSA Empowerment Trust and Blyvooruitzicht Gold Mining Company Limited, Crown Gold Recoveries Proprietary Limited and East Rand Proprietary Mines Limited, dated October 24, 2006.
4.21
(9)

Third Addendum to Memorandum of Agreement between AngloGold Ashanti Limited (“AGA”), Ergo Mining Proprietary Limited  (formerly called Friedshelf 849 Proprietary Limited) (“Ergo”), DRDGOLD South African Operations Proprietary (“DRDGOLD SA”) Mintails South Africa Proprietary Limited dated November 14, 2007.
4.22
(9)

Fifth Addendum to Memorandum of Agreement between AngloGold Ashanti Limited (“AGA”), Ergo Mining Proprietary Limited  (formerly called Friedshelf 849 Proprietary Limited (“Ergo”), DRDGOLD South African Operations Proprietary (“DRDGOLD SA”) Mintails South Africa Proprietary Limited dated May 22, 2008.
4.23
(9)

Mining User Contract between Crown Gold Recoveries Proprietary Limited (“Crown”), East Rand Proprietary Mines Limited (“ERPM”), Elsburg Gold Mining Joint Venture (“Elsburg JV”), Ergo Mining Proprietary Limited (“Ergo”), Ergo Uranium Proprietary Limited (“Ergo Uranium”) and Mogale Gold Proprietary Limited (“Mogale Gold”) dated August 15, 2008
4.24
(9)

Ergo Uranium Sale Agreement of Brakpan Plants to Ergo Mining between Ergo Uranium Proprietary Limited (“Ergo Uranium”) and Ergo Mining Proprietary Limited (“Ergo”) dated August 15, 2008. background image104
4.25
(9)

Ergo Mining Shareholders’ Agreement between Crown Gold Recoveries Proprietary Limited (“Crown”) and Ergo Uranium Proprietary Limited (“Ergo Uranium”) dated August 15, 2008.
4.26
(9)

Elsburg Gold Mining Joint Venture (“Elsburg JV”) Agreement between East Rand Proprietary Mines Limited (“ERPM”) and Mogale Gold Proprietary Limited (“Mogale Gold”) dated August 15, 2008.
4.27
(9)

Mogale Sale of Part Venture Interest in the Elsburg Gold Mining Joint Venture (“Elsburg JV”) between East Rand Proprietary Mines Limited (“ERPM”) and Mogale Gold Proprietary Limited (“Mogale Gold”) dated September 29, 2008.
4.28
(10)

Heads of Agreement entered into by Mintails Limited, Mogale Gold Proprietary Limited (“Mogale Gold”), Ergo Mining Proprietary Limited (“Ergo Joint Venture”), DRDGOLD Limited (“DRDGOLD”) and East Rand Proprietary Mines Limited (“ERPM”), dated December 8, 2008.
4.29
(10)

Loan Facility entered into by Mintails South Africa Proprietary Limited (“Borrower”), DRDGOLD Limited (“Lender”), Mintails Limited (“Borrower’s Guarantor”), Mogale Gold Proprietary Limited (Mogale Gold”) Ergo Uranium Proprietary Limited (“Ergo Uranium”) dated December 8, 2008.
4.30
(10)

Subscription and shareholders’ Agreement entered into by Mintails SA Proprietary Limited (“Mintails SA”), Witfontein Mining Proprietary Limited (“Witfontein”) and Argonaut Financial Services Proprietary Limited (“Argonaut”) dated December 9, 2008.
4.31
(10)
4.32
(11)
4.33
(11)
4.34
(11)
Facility Agreement between Investec Bank limited (“the Lender”) and DRDGOLD Limited (“the Borrower”) dated March 31, 2009. Final Heads of Agreement between Chizim Investments (Pvt) Limited (“Chizim”) and DRDGOLD Limited (“DRDGOLD”) dated December 9, 2009. Memorandum of Agreement between Ergo Uranium Proprietary Limited (“Ergo Uranium”) and East Rand Proprietary Mines Limited (“ERPM”) dated January 21, 2010. Heads of Agreement between East Rand Proprietary Mines Limited (“ERPM”) and Aurora Empowerment System Proprietary Limited (“Aurora”) dated January 22, 2010.
4.35
(11)

Domestic Medium Term Note Programme (“Programme”) entered into by DRDGOLD South African Operations Proprietary Limited (“Issuer”) and DRDGOLD Limited (“guarantor’) dated September 30 2010.
4.36
(12)

Domestic Medium Term Note ) and High Yield Programme (“DMTN Programme”)  Agreement entered into by DRDGOLD  Limited (“Issuer”)  Crown Gold Recoveries Proprietary Limited  (“Crown Gold”), East Rand Proprietary Mines Limited (“ERPM”), Ergo Mining Operations Proprietary Limited (“EMO”) )and  ABSA Bank  Limited (“ABSA”) ) dated  June 30, 2012.
4.37
(12)

Sale of Shares and Claims Agreement entered into by Village Main Reef Limited (“Village”), DRDGOLD Limited (“DRDGOLD”) (“Seller”), Business Venture Investments No 1557 Proprietary Limited (“Purchaser”) and Blyvooruitzicht Gold Mining Company Limited (“Blyvoor”) dated February 11, 2012.
4.38
(12)

Sale of Interest Agreement between DRDGOLD Limited (“DRDGOLD”) and Ergo Mining Proprietary Limited (“Ergo”) dated June 29, 2012.
4.39
(13)

Heads of Agreement entered into by Trans-Caledon Tunnel Authority (“TCTA’), Ergo Mining Operations Proprietary Limited (“EMO”), East Rand Proprietary Mines Limited (“ERPM”) and Crown Gold Recoveries Proprietary Limited (“CGR”) (collectively CGR, EMO and ERPM are called “the Ergo Group”) dated November 28, 2012.
8.1
(13)
ListofSubsidiaries.
11.1
(13)

Code of Ethics, as amended February 9, 2012.
12.1
(13)

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
12.2
(13)

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
13.1
(13)

Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
13.2
(13)

Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
___________
(1)
Incorporated by reference to our Registration Statement (File No. 0-28800) on Form 20-F.
(2)
Incorporated by reference to our Annual Report on Form 20-F for the fiscal year ended June 30, 1997.
(3)
Incorporated by reference to Amendment No. 1 to our Registration Statement (File No.
333-140850) on Form F-6.
(4)
Incorporated by reference to our Annual Report on Form 20-F for the fiscal year ended June 30, 2000.
(5)
Incorporated by reference to our Annual Report on Form 20-F for the fiscal year ended June 30, 2002.
(6)
Incorporated by reference to our Annual Report on Form 20-F for the fiscal year ended June 30, 2005.
(7)
Incorporated by reference to our Annual Report on Form 20-F for the fiscal year ended June 30, 2006.
(8)
Incorporated by reference to our Annual Report on Form 20-F for the fiscal year ended June 30, 2007.
(9)
Incorporated by reference to our Annual Report on Form 20-F for the fiscal year ended June 30, 2008.
(10)
Incorporated by reference to our Annual Report on Form 20-F for the fiscal year ended June 30, 2009.
(11)
Incorporated by reference to our Annual Report on Form 20-F for the fiscal year ended June 30, 2010.
(12)
Incorporated by reference to our Annual Report on Form 20-F for the fiscal year ended June 30, 2012.
(13)
Filed herewith. background image105
SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and
authorized the undersigned to sign this annual report on its behalf.



DRDGOLD
  LIMITED
By:    
  /s/ D.J. Pretorius
D.J. Pretorius Chief Executive Officer

By:    
  /s/ C.C. Barnes
C.C. Barnes Chief Financial Officer
Date: October 25, 2013