As filed with the Securities and Exchange Commission on October 25, 2010
   UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 20-F
  o
    
    REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
 OR
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended June 30, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 OR
 o
    
    SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Date of event requiring this shell company report
 For the transition period from      to
 Commission file number: 001  31545
 HARMONY GOLD MINING COMPANY LIMITED
 (Exact name of registrant as specified in its charter)
 REPUBLIC OF SOUTH AFRICA
 (Jurisdiction of incorporation or organization)
 RANDFONTEIN OFFICE PARK, CNR WARD AVENUE AND MAIN REEF ROAD,
RANDFONTEIN, SOUTH AFRICA, 1760
 (Address of principal executive offices)
  khanya.maluleke@harmony.co.za
 (Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person
  (Title of Class)
 (Title of Class)
  (Title of Class)
 (Title of Class)
     þ o
  o þ
  þ o
  o o
  Large accelerated filer þ
Accelerated filer o
Non-accelerated filer o(Do not check if a smaller reporting company)
Smaller reporting company o  U.S. GAAP  o
    
    International Financial Reporting Standards as issued
    
    Other  oby the International Accounting Standards Board   þ
  o þ
  o þ
  þ o
 
 *
    
    Not for trading, but only in connection with the registration of American Depositary Shares,
pursuant to the requirements of the Securities and Exchange Commission.




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TABLE OF CONTENTS
 Part I
    
    
    4Item 1. Identity of Directors, Senior Management and Advisors
    
    
    4Item 2. Offer Statistics and Expected Timetable
    
    
    4Item 3. Key Information
    
    
    4Item 4. Information on the Company
    
    
    19Item 4A. Unresolved Staff Comments
    
    
    88Item 5. Operating and Financial Review and Prospects
    
    
    88Item 6. Directors, Senior Management and Employees
    
    
    114Item 7. Major Shareholders and Related Party Transactions
    
    
    129Item 8. Financial Information
    
    
    131Item 9. The Offer and Listing
    
    
    133Item 10. Additional Information
    
    
    136Item 11. Quantitative and Qualitative Disclosures About Market Risk
    
    
    152Item 12. Description of Securities Other than Equity Securities
    
    
    154Part II
    
    
    160Item 13.Defaults, Dividend Arrearages and Delinquencies
    
    
    160Item 14. Material Modifications to the Rights of Security and Use of Proceeds
    
    
    161Item 15. Disclosure Controls and Procedures
    
    
    162Item 16A. Audit Committee Financial Expert
    
    
    163Item 16B. Code of Ethics
    
    
    163Item 16C. Principal Accountant Fees and Services
    
    
    164Item 16D. Exemptions from Listing Standards for Audit Committees
    
    
    164Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
    
    
    164Item 16F. Change in Registrants Certifying Accountant
    
    
    164Item 16G. Corporate Governance
    
    
    165Part III
    
    
    166Item 17. Financial Statements
    
    
    166Item 18. Financial Statements
    
    
    167Item 19. Exhibits
    
    
    168SIGNATURE
    
    
    170INDEX TO FINANCIAL STATEMENTS
    
    
    F-1EX-2.1EX-4.14EX-4.15EX-4.16EX-4.17EX-4.18EX-4.19EX-4.20EX-12.1EX-12.2EX-13.1EX-13.2
  1




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USE OF TERMS AND CONVENTIONS IN THIS ANNUAL REPORT
 Harmony South Africa we us our Group
 R Rand c A$ K Kina $ US$ U.S. dollars
 Item 3. Key
Information  Risk Factors  Harmonys gold reserve figures are estimated based on a number of
assumptions, including assumptions as to mining and recovery factors, future cash costs or
production and the price of gold and may yield less gold under actual production conditions than
currently estimated.
  PRESENTATION OF FINANCIAL INFORMATION
 IFRS SEC U.S. GAAP
 Item 5 Operating and Financial Review and Prospects  Costs 
Reconciliation of Non-GAAP Measures
  2




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FORWARD-LOOKING STATEMENTS
 Item 4. Information on
the Company, Item 5. Operating and Financial Review and Prospects Item 11. Quantitative and
Qualitative Disclosures About Market Risk Exchange
Act
  
    
    overall economic and business conditions in South Africa and elsewhere;
    
    the ability to achieve anticipated efficiencies and other cost savings in connection with
past and future acquisitions;
    
    fluctuations in the market price of gold;
    
    the occurrence of hazards associated with underground and surface gold mining;
    
    the occurrence of labor disruptions;
    
    availability, terms and deployment of capital;
    
    changes in government regulation, particularly mining rights and environmental
regulation;
    
    fluctuations in exchange rates;
    
    currency devaluations/appreciations and other macroeconomic monetary policies; and
    
    socio-economic instability in South Africa and other countries in which we operate.
  3




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PART I
 
 Item 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS
  
 Item 2. OFFER STATISTICS AND EXPECTED TIMETABLE
  
 Item 3. KEY INFORMATION
 SELECTED FINANCIAL DATA
 The selected consolidated financial data below should be read in conjunction with, and are
qualified in their entirety by reference to, our consolidated financial statements and the notes
thereto and with Item 5. Operating and Financial Review and Prospects, both included elsewhere in
this annual report. Historical results are not necessarily indicative of results to be expected for
any future period.
 SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
 .
   Rand Uranium Ramelius Item 4 Information of the Company  Business  International Operations Information of the Company
 Business  Orkney Operations, Item 4 Information of the Company  Business  Cooke
Operations
 4




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Fiscal year ended June 30,2010
    
    2009
    
    2008
    
    2007
    
    2006($ in millions, except per share amounts)Income Statement DataRevenue
    
    
    1,489
    
    
    
    1,277
    
    
    
    1,269
    
    
    
    1,116
    
    
    
    937Operating profit/(loss)
    
    
    22
    
    
    
    236
    
    
    
    73
    
    
    
    154
    
    
    
    (104
    )Profit/(loss) from associates
    
    
    7
    
    
    
    1
    
    
    
    (11
    )
    
    
    (3
    )
    
    
    (17
    )Profit/(loss) from continuing operations before taxation
    
    
    24
    
    
    
    238
    
    
    
    (39
    )
    
    
    156
    
    
    
    (91
    )Taxation
    
    
    (44
    )
    
    
    (22
    )
    
    
    (65
    )
    
    
    (39
    )
    
    
    (22
    )(Loss)/profit from continuing operations
    
    
    (20
    )
    
    
    216
    
    
    
    (104
    )
    
    
    117
    
    
    
    (113
    )(Loss)/profit from discontinued operations
    
    
    (4
    )
    
    
    95
    
    
    
    74
    
    
    
    (66
    )
    
    
    22Net (loss)/profit
    
    
    (24
    )
    
    
    311
    
    
    
    (30
    )
    
    
    51
    
    
    
    (91
    )Basic (loss)/earnings per share from continuing operations ($)
    
    
    (0.05
    )
    
    
    0.52
    
    
    
    (0.26
    )
    
    
    0.29
    
    
    
    (0.29
    )Diluted (loss)/earnings per share from continuing operations ($)
    
    
    (0.05
    )
    
    
    0.51
    
    
    
    (0.26
    )
    
    
    0.29
    
    
    
    (0.29
    )Basic (loss)/earnings per share ($)
    
    
    (0.06
    )
    
    
    0.75
    
    
    
    (0.08
    )
    
    
    0.12
    
    
    
    (0.23
    )Diluted (loss)/earnings per share ($)
    
    
    (0.06
    )
    
    
    0.74
    
    
    
    (0.08
    )
    
    
    0.12
    
    
    
    (0.23
    )Weighted average number of shares used in the computation of basic
(loss)/earnings per share
    
    
    426,381,581
    
    
    
    414,120,732
    
    
    
    400,750,167
    
    
    
    397,910,797
    
    
    
    393,727,012Weighted average number of shares used in the computation of diluted
(loss)/earnings per share
    
    
    427,846,547
    
    
    
    415,962,899
    
    
    
    402,894,248
    
    
    
    402,382,011
    
    
    
    393,727,012Dividends per share
    
    
    0.06
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other Financial DataCash cost per ounce of gold from continuing operations ($/oz) (1)
    
    
    801
    
    
    
    583
    
    
    
    600
    
    
    
    484
    
    
    
    448Total cash cost per ounce of gold ($/oz) (1)
    
    
    801
    
    
    
    586
    
    
    
    602
    
    
    
    489
    
    
    
    443Balance Sheet DataAssetsProperty, plant and equipment
    
    
    3,874
    
    
    
    3,614
    
    
    
    3,531
    
    
    
    3,484
    
    
    
    3,263Assets of disposal groups classified as held for sale
    
    
    32
    
    
    
    
    
    
    
    197
    
    
    
    182
    
    
    
    Other assets
    
    
    1,235
    
    
    
    1,311
    
    
    
    982
    
    
    
    1,494
    
    
    
    1,432Total assets
    
    
    5,141
    
    
    
    4,925
    
    
    
    4,710
    
    
    
    5,160
    
    
    
    4,695Equity and liabilitiesTotal equity
    
    
    3,828
    
    
    
    3,824
    
    
    
    3,172
    
    
    
    3,366
    
    
    
    3,249Borrowings (current and non-current)
    
    
    156
    
    
    
    47
    
    
    
    525
    
    
    
    653
    
    
    
    500Liabilities of disposal groups held for sale
    
    
    18
    
    
    
    
    
    
    
    64
    
    
    
    77
    
    
    
    Other liabilities
    
    
    1,139
    
    
    
    1,054
    
    
    
    949
    
    
    
    1,064
    
    
    
    946Total equity and liabilities
    
    
    5,141
    
    
    
    4,925
    
    
    
    4,710
    
    
    
    5,160
    
    
    
    4,695
 
 (1)
    
    Total cash costs and total cash costs per ounce are non-GAAP measures.
Previously, we calculated cash costs per ounce by dividing total cash costs, as determined using
the guidance previously provided by the Gold Institute, by gold ounces sold. During fiscal 2009, we
changed the calculation, using gold produced as the denominator and therefore excluded the effect
of the movement in the gold inventory from the cash cost amount. We believe that this change
provides a better indication of the cash generating capabilities of our operations and also allows
for a better comparison with other companies. The cash costs and cash cost per ounce have been
re-presented for all periods prior to fiscal 2009. The Gold Institute was a non-profit industry
association comprised of leading gold producers, refiners, bullion suppliers and manufacturers.
This institute has now been incorporated into the National Mining Association. The guidance was
first issued in 1996 and was revised in November 1999. Total cash costs, as defined in the guidance
previously provided by the Gold Institute, include mine production costs, transport and refinery
costs, applicable general and administrative costs, ongoing environmental rehabilitation costs as
well as transfers to and from deferred stripping and costs associated with royalties. Ongoing
employee termination costs are included, however, employee termination costs associated with major
restructuring and shaft closures are excluded. Total cash costs have been calculated on a
consistent basis for all periods presented. Changes in cash costs per ounce are affected by
operational performance, as well as changes in the currency exchange rate between the Rand and the
U.S. dollar. Because total cash costs and total cash costs per ounce are non-GAAP measures, they
should therefore not be considered by investors in isolation or as an alternative to production
costs, cost of sales, or any other measure of financial performance calculated in accordance with
IFRS. While the Gold Institute has provided a definition for the calculation of total cash costs
and total cash costs per ounce, the calculation of cash costs per ounce may vary from company to
company and may not be comparable to other similarly titled measures of other companies. However,
we believe that cash costs per ounce is a useful indicator to investors and management of a mining
companys performance as it provides (1) an indication of the cash generating capacities of the
mining operations, (2) the trends in cash costs as the companys operations mature, (3) a measure
of a companys performance, by comparison of cash costs per ounce to the spot price of gold and (4)
an internal benchmark of performance to allow for comparison against other companies. For further
information, see Item 5. Operating and Financial Review and Prospects  Costs  Reconciliation
of non-GAAP measures. 5




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EXCHANGE RATES
  (1)
  Fiscal Year EndedJune 30,
    
    Average
    
    Period End2006
    
    
    6.36
    (2)
    
    
    7.172007
    
    
    7.20
    (2)
    
    
    7.042008
    
    
    7.26
    (2)
    
    
    7.802009
    
    
    9.00
    (3)
    
    
    7.722010
    
    
    7.58
    (3)
    
    
    7.63
 Month of
    
    High
    
    LowMay 2010
    
    
    7.95
    
    
    
    7.41June 2010
    
    
    7.82
    
    
    
    7.50July 2010
    
    
    7.75
    
    
    
    7.29August 2010
    
    
    7.38
    
    
    
    7.19September 2010
    
    
    7.26
    
    
    
    6.94October 2009 (through October 18, 2010)
    
    
    7.00
    
    
    
    6.78
 
 (1)
    
    Based on the interbank rate as reported by Reuters.(2)
    
    The average of the noon buying rates on the last day of each full month during the
relevant period as certified for customs purposes by the Federal Reserve Bank of New York.(3)
    
    The daily average of the closing rate during the relevant period as reported by
Reuters. ADSs
 6




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CAPITALIZATION AND INDEBTEDNESS
  REASONS FOR THE OFFER AND USE OF PROCEEDS
  RISK FACTORS
 In addition to the other information included in this annual report and the exhibits, you
should also carefully consider the following factors related to our ordinary shares and ADSs. There
may be additional risks that we do not currently know of or that we currently deem immaterial based
on information currently available to us. Although Harmony has a formal risk policy framework in
place, the maintenance and development of which is undertaken on an ongoing basis so as to help
management address systematic categories of risk associated with its business operations, any of
these risks could have a material adverse effect on our business, financial condition or results of
operations, leading to a decline in the trading price of our ordinary shares or our ADSs. The risks
described below may, in retrospect, turn out to be incomplete and therefore may not be the only
risks to which we are exposed. Additional risks and uncertainties not presently known to us or that
we now believe are immaterial (and have therefore not been included), could also adversely affect
our businesses, results of operations or financial condition. The order of presentation of the risk
factors below does not indicate the likelihood of their occurrence or the magnitude or the
significance of the individual risks. The risks described below could occur individually or
cumulatively and intensify in case of a cumulative occurrence.
 Risks Relating to Our Business and the Gold Mining Industry
 The profitability of our operations, and the cash flows generated by those operations, are affected
by changes in the Rand price of gold, such that a fall in the price of gold below our cash cost of
production for any sustained period may lead us to experience losses and to curtail or suspend
certain operations.
  
    
    the demand for gold for industrial uses and for use in jewelry;
    
    international or regional political and economic trends;
    
    the strength or weakness of the U.S. dollar (the currency in which gold prices generally
are quoted) and of other currencies;
    
    financial market expectations regarding the rate of inflation;
    
    interest rates;
    
    speculative activities;
    
    actual or expected purchases and sales of gold bullion held by central banks or other
large gold bullion holders or dealers;
    
    forward sales by other gold producers; and
    
    the production and cost levels for gold in major gold-producing nations, such as South
Africa, China, the United States and Australia.
  7




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Price per ounceCalendar Year
    
    High
    
    Low
    
    Average($)
    
    ($)
    
    ($)2000
    
    
    313
    
    
    
    264
    
    
    
    2822001
    
    
    293
    
    
    
    256
    
    
    
    2712002
    
    
    332
    
    
    
    278
    
    
    
    3092003
    
    
    412
    
    
    
    322
    
    
    
    3612004
    
    
    427
    
    
    
    343
    
    
    
    3892005
    
    
    476
    
    
    
    411
    
    
    
    4342006
    
    
    725
    
    
    
    525
    
    
    
    6042007
    
    
    841
    
    
    
    608
    
    
    
    6952008
    
    
    1,011
    
    
    
    713
    
    
    
    8722009
    
    
    1,212
    
    
    
    810
    
    
    
    9722010 (through October 18, 2010)
    
    
    1,373
    
    
    
    1,058
    
    
    
    1,188
   As the majority of our production costs are incurred in Rand and other non-U.S. currencies, and
gold is sold in U.S. dollars, our financial condition could be materially harmed by an appreciation
in the value of the Rand and other non-U.S. currencies against the U.S. dollar.
  As we currently do not enter into forward sales, commodity derivatives or hedging arrangements with
respect to our future gold production, we are exposed to the impact of any significant decrease in
the gold price.
  Estimations of our gold reserves are based on a number of assumptions, including assumptions as to
mining and recovery factors, future cash costs of production and the price of gold and may yield
less gold under actual production conditions than currently estimated.
  
    
    future cash costs (which in some cases are assumed to decrease significantly);
    
    future gold prices; and
    
    future currency exchange rates.
 8




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In order to maintain gold production beyond the expected lives of our existing mines or to increase
production materially above projected levels, we will need to access additional reserves through
exploration or discovery.
  
    
    locating orebodies;
    
    identifying the metallurgical properties of orebodies;
    
    estimating the economic feasibility of mining orebodies;
    
    developing appropriate metallurgical processes;
    
    obtaining necessary governmental permits; and
    
    constructing mining and processing facilities at any site chosen for mining.
  
    
    future gold and other metal prices;
    
    anticipated tonnage, grades and metallurgical characteristics of ore to be mined and
processed;
    
    anticipated recovery rates of gold and other metals from the ore; and
    
    anticipated total costs of the project, including capital expenditure and cash costs.
 Actual cash costs of exploration, production and economic returns may differ significantly from
those anticipated by our feasibility studies for new development projects.
  
    
    the availability and timing of necessary environmental and governmental permits;
    
    the timing and cost of constructing mining and processing facilities, which can be
considerable;
    
    the availability and cost of skilled labor, power, water and other materials;
    
    the accessibility of transportation and other infrastructure, particularly in remote
locations;
    
    the availability and cost of smelting and refining arrangements; and
    
    the availability of funds to finance construction and development activities.
 PNG
 9




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The costs associated with the pumping of water inflows from closed mines adjacent to our operations
could adversely affect our results of operations.
  The supply of electricity and increases in the cost of power may adversely affect our results of
operations and our financial condition.
 ECS
 NERSA
 Item 5. Electricity in South Africa.
 We may experience problems in identifying, financing and managing new acquisitions and integrating
them with our existing operations.
  
    
    our ability to identify appropriate assets for acquisition and/or to negotiate
acquisitions on favorable terms;
    
    obtaining the financing necessary to complete future acquisitions;
    
    difficulties in assimilating the operations of the acquired business;
    
    difficulties in maintaining our financial and strategic focus while integrating the
acquired business;
    
    problems in implementing uniform standards, controls, procedures and policies;
    
    increasing pressures on existing management to oversee a rapidly expanding company; and
    
    to the extent we acquire mining operations outside South Africa or Australasia,
encountering difficulties relating to operating in countries in which we have not previously
operated.
  Certain factors may affect our ability to support the carrying value of our property, plant and
equipment, goodwill and other assets on our balance sheet.
  10




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Given the nature of mining and the type of gold mines we operate, we face a material risk of
liability, delays and increased cash costs of production from environmental and industrial
accidents and pollution.
  
    
    rock bursts;
    
    seismic events;
    
    underground fires;
    
    cave-ins or falls of ground;
    
    discharges of gases and toxic chemicals;
    
    release of radioactive hazards;
    
    flooding;
    
    pillar mining;
    
    accidents; and
    
    other conditions resulting from drilling, blasting and the removal and processing of
material from a deep-level mine.
  
    
    flooding of the open-pit;
    
    collapse of the open-pit walls;
    
    accidents associated with the operation of large open-pits and rock transportation
equipment; and
    
    accidents associated with the preparation and ignition of large-scale open-pit blasting
operations.Hazards associated with waste-rock mining include:
    
    accidents associated with operating a waste dump and rock transportation; and
    
    production disruptions caused by weather.
  The nature of our mining operations presents safety and security risks.
 Item 4. Regulation  Health
and Safety Matters
 Our insurance coverage may prove inadequate to satisfy future claims against us.
  11




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Our operations may be negatively impacted by inflation.
 Item 5. Electricity in South Africa
   The socio-economic framework in the regions in which we operate may have an adverse effect on our
operations and profits.
  Actual and potential shortages of production inputs may have an adverse effect on our operations
and profits.
  Our financial flexibility could be materially constrained by exchange control regulations as
imposed by SARB.
  
    
    generally not permitted to export capital from South Africa, to hold foreign currency or
incur indebtedness denominated in foreign currencies without the approval of the South
African exchange control authorities;
    
    generally not permitted to acquire an interest in a foreign venture without the approval
of the South African exchange control authorities and first having complied with the
investment criteria of the South African exchange control authorities;
    
    generally required to repatriate to South Africa profits of foreign operations; and
 12




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##### 




    
    limited in our ability to utilize profits of one foreign business to finance operations
of a different foreign business.
   We compete with mining and other companies for key human resources
 HDSAs Item 6. Employees
 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.
  Item 6. Employees
   HIV & AIDS poses risks to us in terms of productivity and costs.
 Item 4. Regulation 
Health & Safety Matters
 The cost of occupational healthcare services may increase in the future.
 MRA
  13




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Mine
Health and Safety Act
   Laws governing mineral rights affect our business.
 MPRDA Item 4. Regulation South Africa
 Mining Charter
  DMR
 (i)
    
    facilitate local beneficiation of mineral commodities;(ii)
    
    procure a minimum of 40% of capital goods, 70% of services and 50% of consumer goods from
HDSA suppliers (i.e. suppliers of which a minimum of 25% + 1 vote of their share capital must
be owned by HDSAs) by 2014. These targets will however be exclusive of non-discretionary
procurement expenditure;(iii)
    
    achieve a minimum of 40% HDSA demographic representation by 2014 at executive management
(board) level, senior management (EXCO) level, core and critical skills, middle management
level and junior management level;(iv)
    
    invest up to 5% per cent of annual payroll in essential skills development activities; and(v)
    
    implement measures to improve the standards of housing and living conditions for mineworkers
by converting or upgrading mineworkers hostels into family units, attaining an occupancy rate
of one person per room and facilitating home ownership options for all mineworkers in
consultation with organised labour, all of which must be achieved by 2014.
 14




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the Scorecard
    Item 4. Regulation
 We are subject to extensive environmental regulations.
     Item 4. Regulation 
Environmental Matters
 15




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##### 



Our operations in South Africa are subject to water use licenses, which could impose significant
costs and burdens.
   Compliance with emerging climate change regulations could result in significant costs to the Group,
and climate change may present physical risks to our operations.
 GHGs
     Item 4. Environmental Matters
 16




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##### 



We may have potential exposure to rehabilitate ground water and radiation that may exist where we
have operated and/or continue to operate.
  MNA
 Investors in the United States may have difficulty bringing actions, and enforcing judgments,
against us, our directors and our executive officers based on the civil liabilities provisions of
the federal securities laws or other laws of the United States or any state thereof.
  
    
    the court that pronounced the judgment had jurisdiction to entertain the case according
to the principles recognized by South African law with reference to the jurisdiction of
foreign courts;
    
    the judgment is final and conclusive;
    
    the judgment has not lapsed;
    
    the recognition and enforcement of the judgment by South African courts would not be
contrary to public policy, including observance of the rules of natural justice which
require that the documents initiating the United States proceeding were properly served on
the defendant and that the defendant was given the right to be heard and represented by
counsel in a free and fair trial before an impartial tribunal;
    
    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 99 of 1978, as amended, of the Republic of South Africa.
 Compliance with new and changing corporate governance and public disclosure requirements adds
uncertainty to our compliance policies and increases our costs of compliance.
  Item 15 Disclosure Controls and Procedures
 17




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##### 



Sales of large quantities of our ordinary shares and ADSs, or the perception that these sales may
occur, could adversely affect the prevailing market price of such securities
  Because we have a significant number of outstanding share options, our ordinary shares are subject
to dilution.
  We may not pay dividends or make similar payments to our shareholders in the future.
   18




---



##### 



Item 4. INFORMATION ON THE COMPANY
 BUSINESS
 History and Development
  Item 4. Information on the
Company  Business  Harmonys Mining Operations  Overview Item 4. Information on the Company  Regulation Item 10.
Additional Information Memorandum and Articles of Association
  Pamodzi FS Item 4. Disposals
  South African Operations
   19




---



##### 



Item 4 Harmonys Management Structure
  
    
    Bambanani (includes Steyn 1 and 2 shafts), Doornkop, Evander, Joel, Kusasalethu
(previously known as Elandsrand), Masimong, Phakisa, Target (includes Loraine 3, now known
as Target 3), Tshepong and the Virginia operations (the Cooke operations were considered to
be a reportable segment in fiscal 2008 and have been disclosed under discontinued operations
until the time of its disposal in November 2008); and
    
    All other shafts and surface operations, including those that treat historic
sand dumps, rock dumps and tailings dams, are grouped together under Other  Underground
and Other  Surface.
 International Operations
  PNG operations
 Morobe Consolidated Goldfields Wafi MEL HGEL
 Newcrest
 Australian operations
 ASX Dioro
   20




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##### 



Strategy
   
    
    growth in production ounces, by delivering into production the South African
growth projects and by fully exploiting growth opportunities in PNG. An important
element of this growth objective is the pursuit of geographic diversity;
    
    exploring and expanding into new geographic regions, developing mines, acquiring
low-cost assets and entering into joint ventures;
    
    increasing levels of operational efficiency and productivity, to which end
capital projects are being commissioned and achievable operational plans have been
compiled; and
    
    optimizing our asset portfolio, so as to yield lower-cost, more profitable,
high-margin ounces. To this end our portfolio was reviewed and restructured.
  
  Safety
   21




---



##### 



Increasing production
   Adding to our asset portfolio
   Restructuring for efficiency
  Competitive Strengths
  Leading market position in the attractive gold industry
 
    
    We believe that our size and leading market position enables us to undertake exploration
and simultaneously develop multiple projects around the world, as well as secure capital on
competitive terms.
    
    The global gold industry offers a number of attractive industry fundamentals from which
we benefit. This includes the absence of available substitutes, relatively high barriers to
entry, and increasing gold producer concentration.
    
    We are developing new mines at a planned lower cost per ounce than our current
operations, which we believe will help make them robust enough to survive any margin squeeze
and to withstand any reversal in the gold price. We expect the gold price to continue its
upward trend in the medium term.
 Significant reserves with long mine lives
 
    
    Our mineral reserves as of June 30, 2010 amounted to 48.1 million ounces of gold spread
across our assets in South Africa and PNG. This mineral reserve base is sufficient to
support our existing production profile in excess of 10 years at current production levels.
There has been a 0.1 million ounces year-on-year negative variance in mineral reserves due
to normal depletion of 1.7 million ounces. Mine closures, the exclusion of projects
previously included in reserves (Evander South), geology and scope changes resulted in a
decrease of 2.6 million ounces. On the positive side, there is a net addition of 4.3 million
ounces of mineral reserves from new acquisitions, Rand Uranium (attributable interest of
40%), surface projects and other positive adjustments from the operations.
 22




---



##### 




    
    Of our 48.1 million ounces of reserves, 38.2 million ounces are classified as above
infrastructure and 9.9 million ounces re classified as below infrastructure (reserves for
which capital expenditure has still to be approved).
 Highly attractive project pipeline
 
    
    We have a diverse portfolio of gold development projects spread across South Africa and
PNG. These projects include Kusasalethu, Doornkop, Tshepong and Phakisa in South Africa, and
Hidden Valley in PNG, which, when developed, could deliver up to 1.1 million ounces of
production by 2013.
    
    We believe the relatively higher grade of these South African deposits and/or lower cost
base will result in these ounces being produced at highly competitive cash costs. This in
turn may result in a reduction in our overall cash cost position as these new projects are
commissioned.
    
    In addition to these projects, we have a number of additional development prospects that
are being considered and progressed, including the processing of sand dumps and tailings
dams in our tailings projects, the processing of rock dumps, and developing the Wafi-Golpu
copper/gold deposit in PNG, which, when all developed, could increase production.
    
    We have also expanded our exploration skill base, evidenced by our progress in PNG.
    
    We formed Rand Uranium, to which we have transferred our Cooke assets to optimize the
value of our uranium deposits.
 Positive gold market outlook
 
    
    In the midst of volatile tumultuous global investment markets, the gold market has
demonstrated great resilience and a positive upside. The price performance throughout fiscal
2010 supports our positive outlook for gold and, given our operational imperatives, we will
seek to contain costs, increase output and optimize our margins.
    
    The gold price hit a high of US$1,261 per ounce on June 28, 2010 and, subsequent to
year-end, an all-time high of US$1,373.25 on October 14, 2010. On October 18, 2010, it was
US$1,367.25 per ounce, which is 30% higher than it was for the same time the previous year.
    
    We believe the fundamental drivers behind increased demand and decreased new supply of
gold will remain in the future, which will in turn support a higher gold price over this
period. As an unhedged gold producer, we will benefit from a rising gold price environment.
 Increased focus on earnings margins and cost
 
    
    Our aim remains to improve profitability. At an operational level we have put in place an
intensive process of business planning, with benchmarks and targets we believe to be
realistic.
    
    We are committed to lower our cost base and extensively benchmark our costing parameters
both internally among our operations, and externally against other gold producers. Stringent
cost cutting and cost control programs have been implemented.
    
    We are confident that the benefits of our restructuring process and ongoing cost focus
will be sustained in the long term, and as a result, our ability to withstand any future
adverse market conditions has been significantly enhanced.
 Conservative balance sheet and low gearing
 
    
    We maintain a conservative gearing policy and seek to fund ongoing capital expenditure
(excluding growth projects) through cash generated from existing operations.
    
    Our low level of gearing should provide us with the ability to utilize debt to fund
capital and development expenditure requirements for our new projects.
 23




---



##### 



Experienced management team with significant industry expertise
 
    
    Our senior management team consists of experienced mining executives with extensive
industry backgrounds combined with geological and metallurgical expertise.
    
    Our senior management team has a proven track record in developing and managing the
operations under its control, and has demonstrated an ability to optimize underperforming
assets as well as developing new projects around the world.
 Leading Black Economic Empowerment strategy
 
    
    We are proud to be a South African company that fully embraces the countrys
transformation initiatives. We are approximately 14.6% owned by African Rainbow Minerals
Limited (ARM Limited), a black empowerment company in which our chairman, Patrice Motsepe,
owns an interest. Of our total production profile, 36% of our South African ounces are
attributed empowerment ounces.
    
    We believe that we have gone beyond the requirements of the Mining Charter by ensuring
that our HDSA partners are truly empowered, that we are largely managed by a HDSA Board, and
that we continue to engage with black shareholders and/or partners to find more
opportunities to invest in BEE transactions and involve HDSA partners.
    
    We will continue to embrace empowerment as part of our growth strategy and we acknowledge
that empowerment forms a fundamental part of our business into the future.
 Principal Investments
  Pamodzi
 AVRD
  Avoca Item 4.Disposals
 Rio Tinto
 Item 4. Disposals
 Item 4 Disposals
 24




---



##### 



Disposals
 Item 8. Recent Developments
  BBGO Fulcrum
   PRF
     Hedging Policy
   25




---



##### 



Description of Mining Business
 Exploration
   
    
    on-mine exploration, which looks for resources within the economic radius of existing
mines, and
    
    new mine exploration, which is the global search for early to advanced stage projects.
   Mining
  
    
    Accessing the orebody.In our South African underground mines, access to the orebody is by means of shafts sunk from
the surface to the lowest economically and practically mineable level. Horizontal development
at various intervals of a shaft (known as levels) extends access to the horizon of the reef to
be mined. On-reef development then provides specific mining access. Horizontal development at
various intervals of the decline extends access to the horizon of the mineral to be mined. The
declines are advanced on a continuous basis to keep ahead of the mining taking place on the
levels above. In our open-pit mines, access to the orebody is provided by overburden
stripping, which removes the covering layers of topsoil or rock, through a combination of
drilling, blasting, loading and hauling, as required.
    
    Mining the orebody.The process of ore removal starts with drilling and blasting the accessible ore. The blasted
faces are then cleaned, and the ore is transferred to the transport system. In open-pit mines,
gold-bearing material may require drilling and blasting, and is usually collected by
bulldozers or shovels to transfer it onto trucks, which transport it to the mill.
  Processing
   
    
    Comminution.Comminution is the process of breaking up the ore to expose and liberate the gold and make it
available for treatment. Conventionally, this process occurs in multi-stage crushing and
milling circuits, which include the use of jaw and gyratory crushers and rod and tube and ball
mills. Our more modern milling circuits include semi- or fully-autogenous milling where the ore itself is used as the
 26




---



##### 



grinding medium. Typically, ore must be ground to a
minimum size before proceeding to the next stage of treatment.
    
    Treatment.In most of our metallurgical plants, gold is extracted into a leach solution from the host ore
by leaching in agitated tanks. Gold is then extracted onto activated carbon from the solution
using the CIL or CIP processes. Gold in solution at one of our plants is recovered using zinc
precipitation. Recovery of the gold from the loaded carbon takes place by elution and
electro-winning. Cathode sludge or dore bars produced from electro- winning is now currently
sent directly to the Rand Refinery. Most of the South African plants no longer use smelting to
produce rough gold bars (dore). Our South African zinc precipitation plants continue to smelt
precipitate to produce rough gold bars. These bars are then transported to the Rand Refinery,
which is responsible for refining the bars to a minimum of good delivery status.
  Item 4. Information on the Company  Regulation  Mineral Rights.
 Harmonys Management Structure
  HVJVM WGMJV MEJV owners
 JVC
 operator co. board
 .
 Capital Expenditures
  27




---



##### 



Business  Harmonys Mining Operations
 Reserves
  
    
    normal depletion of 1.7 million ounces;
    
    mine closures, the exclusion of projects previously included in reserves (Evander South),
geology and scope changes resulted in a decrease of 2.6 million ounces; and
    
    a net addition of 4.3 million ounces of mineral reserves from new acquisitions, Rand
Uranium (attributable interest of 40%), surface projects and other positive adjustments from
the operations.
 SAMREC Code JORC
   
    
    the database of measured and indicated resource blocks (per operation);
    
    an assumed gold price which, for this mineral reserve statement, was taken as R250,000
per kilogram;
    
    planned production rates;
    
    the mine recovery factor which is equivalent to the mine call factor (MCF) multiplied
by the plant recovery factor; and
    
    planned cash costs (cost per tonne).
   28




---



##### 



29




---



##### 



Mineral Reserves statement (Imperial) as at June 30, 2010
 OPERATIONS
    
    PROVEN RESERVES
    
    
    PROBABLE RESERVES
    
    
    TOTAL RESERVESGOLD
    
    Tons
    
    
    Grade
    
    
    Gold oz(1)
    
    
    Tons
    
    
    Grade
    
    
    Gold oz(1)
    
    
    Tons
    
    
    Grade
    
    
    Gold oz(1)(million)
    
    
    (oz/ton)
    
    
    (000)
    
    
    (million)
    
    
    (oz/ton)
    
    
    (000)
    
    
    (million)
    
    
    (oz/ton)
    
    
    (000)South Africa UndergroundBambanani
    
    
    4.8
    
    
    
    0.294
    
    
    
    1,406
    
    
    
    0.1
    
    
    
    0.202
    
    
    
    25
    
    
    
    4.9
    
    
    
    0.292
    
    
    
    1,431Joel
    
    
    1.3
    
    
    
    0.182
    
    
    
    240
    
    
    
    1.6
    
    
    
    0.163
    
    
    
    264
    
    
    
    2.9
    
    
    
    0.172
    
    
    
    504Masimong
    
    
    6.0
    
    
    
    0.149
    
    
    
    894
    
    
    
    2.1
    
    
    
    0.148
    
    
    
    306
    
    
    
    8.1
    
    
    
    0.149
    
    
    
    1,200Phakisa
    
    
    0.7
    
    
    
    0.136
    
    
    
    94
    
    
    
    21.3
    
    
    
    0.237
    
    
    
    5,065
    
    
    
    22.0
    
    
    
    0.234
    
    
    
    5,159Target
    
    
    5.5
    
    
    
    0.173
    
    
    
    954
    
    
    
    12.5
    
    
    
    0.148
    
    
    
    1,847
    
    
    
    18.0
    
    
    
    0.156
    
    
    
    2,801Tshepong
    
    
    14.5
    
    
    
    0.155
    
    
    
    2,247
    
    
    
    10.4
    
    
    
    0.156
    
    
    
    1,626
    
    
    
    24.9
    
    
    
    0.156
    
    
    
    3,873Virginia
    
    
    3.0
    
    
    
    0.134
    
    
    
    407
    
    
    
    1.7
    
    
    
    0.135
    
    
    
    223
    
    
    
    4.7
    
    
    
    0.134
    
    
    
    630Doornkop
    
    
    1.7
    
    
    
    0.092
    
    
    
    160
    
    
    
    2.7
    
    
    
    0.103
    
    
    
    277
    
    
    
    4.4
    
    
    
    0.098
    
    
    
    437Kusasalethu
    
    
    13.8
    
    
    
    0.195
    
    
    
    2,680
    
    
    
    25.8
    
    
    
    0.187
    
    
    
    4,834
    
    
    
    39.6
    
    
    
    0.190
    
    
    
    7,514Evander
    
    
    2.5
    
    
    
    0.210
    
    
    
    520
    
    
    
    1.8
    
    
    
    0.266
    
    
    
    470
    
    
    
    4.3
    
    
    
    0.234
    
    
    
    990Evander(below infrastructure)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    46.6
    
    
    
    0.212
    
    
    
    9,895
    
    
    
    46.6
    
    
    
    0.212
    
    
    
    9,895Rand Uranium (2)
    
    
    2.4
    
    
    
    0.122
    
    
    
    299
    
    
    
    4.8
    
    
    
    0.100
    
    
    
    484
    
    
    
    7.2
    
    
    
    0.108
    
    
    
    783Total South Africa Underground
    
    
    56.2
    
    
    
    0.176
    
    
    
    9,901
    
    
    
    131.4
    
    
    
    0.193
    
    
    
    25,316
    
    
    
    187.6
    
    
    
    0.188
    
    
    
    35,217South Africa SurfaceKalgold
    
    
    24.1
    
    
    
    0.024
    
    
    
    575
    
    
    
    8.3
    
    
    
    0.031
    
    
    
    258
    
    
    
    32.4
    
    
    
    0.026
    
    
    
    833Free State Surface
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,021.3
    
    
    
    0.007
    
    
    
    7,212
    
    
    
    1,021.3
    
    
    
    0.007
    
    
    
    7,212Evander Surface
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    223.7
    
    
    
    0.008
    
    
    
    1,897
    
    
    
    223.7
    
    
    
    0.008
    
    
    
    1,897Rand Uranium Surface (2)
    
    
    33.8
    
    
    
    0.008
    
    
    
    286
    
    
    
    9.7
    
    
    
    0.013
    
    
    
    127
    
    
    
    43.5
    
    
    
    0.010
    
    
    
    413Total South Africa Surface
    
    
    57.9
    
    
    
    0.015
    
    
    
    861
    
    
    
    1,263.0
    
    
    
    0.008
    
    
    
    9,494
    
    
    
    1,320.9
    
    
    
    0.008
    
    
    
    10,355Total South Africa
    
    
    114.1
    
    
    
    
    
    
    
    10,762
    
    
    
    1,394.4
    
    
    
    
    
    
    
    34,810
    
    
    
    1,508.5
    
    
    
    
    
    
    
    45,572Papua New Guinea(3)Hidden Valley
    
    
    4.2
    
    
    
    0.062
    
    
    
    260
    
    
    
    26.8
    
    
    
    0.052
    
    
    
    1,382
    
    
    
    31.0
    
    
    
    0.053
    
    
    
    1,642Hamata
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.2
    
    
    
    0.061
    
    
    
    196
    
    
    
    3.2
    
    
    
    0.061
    
    
    
    196Golpu
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39.0
    
    
    
    0.018
    
    
    
    694
    
    
    
    39.0
    
    
    
    0.018
    
    
    
    694Total Papua New Guinea
    
    
    4.2
    
    
    
    0.062
    
    
    
    260
    
    
    
    69.0
    
    
    
    0.033
    
    
    
    2,272
    
    
    
    73.2
    
    
    
    0.035
    
    
    
    2,532GRAND TOTAL
    
    
    118.3
    
    
    
    
    
    
    
    11,022
    
    
    
    1,463.4
    
    
    
    
    
    
    
    37,082
    
    
    
    1,581.7
    
    
    
    
    
    
    
    48,104
 30




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##### 



SILVER
    
    Tons
    
    
    Grade
    
    
    Silver oz (1)
    
    
    Tons
    
    
    Grade
    
    
    Silver oz (1)
    
    
    Tons
    
    
    Grade
    
    
    Silver oz (1)(million)
    
    
    (oz/ton)
    
    
    (000)
    
    
    (million)
    
    
    (oz/ton)
    
    
    (000)
    
    
    (million)
    
    
    (oz/ton)
    
    
    (000)Papua New Guinea (3)Hidden Valley
    
    
    4.2
    
    
    
    1.038
    
    
    
    4,320
    
    
    
    26.8
    
    
    
    1.036
    
    
    
    27,726
    
    
    
    31.0
    
    
    
    1.036
    
    
    
    32,046
 COPPER
    
    Tons
    
    
    Grade
    
    
    Cu lb (1)
    
    
    Tons
    
    
    Grade
    
    
    Cu lb (1)
    
    
    Tons
    
    
    Grade
    
    
    Cu lb (1)(million)
    
    
    (%)
    
    
    (million)
    
    
    (million)
    
    
    (%)
    
    
    (million)
    
    
    (million)
    
    
    (%)
    
    
    (million)Papua New Guinea (3)Golpu
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39.0
    
    
    
    1.025
    
    
    
    882
    
    
    
    39.0
    
    
    
    1.025
    
    
    
    882
 MOLYBDENUM
   
    Tons
    
    
    Grade
    
    
    Mo lb (1)
    
    
    Tons
    
    
    Grade
    
    
    Mo lb (1)
    
    
    Tons
    
    
    Grade
    
    
    Mo lb (1)(million)
    
    
    (lb/ton)
    
    
    (million)
    
    
    (million)
    
    
    (lb/ton)
    
    
    (million)
    
    
    (million)
    
    
    (lb/ton)
    
    
    (million)Papua New Guinea (3)Golpu
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39.0
    
    
    
    0.231
    
    
    
    9
    
    
    
    39.0
    
    
    
    0.231
    
    
    
    9
 
 (1)
    
    Metal figures are fully inclusive of all mining dilutions and gold losses, and are
reported as mill delivered tons and head grades. Metallurgical recovery factors have not been
applied to the reserve figures.(2)
    
    Represents Harmonys attributable interest of 40%(3)
    
    Represents Harmonys attributable interest of 50%   31




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##### 



Worldwide Operations
 Description of Property
  
 32




---



##### 



Hectares
    
    
    AcresDoornkop
    
    
    2,941
    
    
    
    7,267Kusasalethu
    
    
    5,113
    
    
    
    12,634Free State (includes Masimong and Virginia operations)
    
    
    22,583
    
    
    
    55,802Tshepong and Phakisa
    
    
    10,799
    
    
    
    26,683Bambanani
    
    
    2,356
    
    
    
    5,821Joel
    
    
    2,162
    
    
    
    5,342St Helena
    
    
    5,856
    
    
    
    14,471Kalgold
    
    
    615
    
    
    
    1,520Evander
    
    
    36,898
    
    
    
    91,174Target (includes Loraine)
    
    
    7,952
    
    
    
    19,649Total
    
    
    97,275
    
    
    
    240,363
  Hectares
    
    
    AcresMount Magnet (sold in July 2010)
    
    
    39,885
    
    
    
    98,560PNG
    
    
    344,522
    
    
    
    851,329Total International Operations
    
    
    384,407
    
    
    
    949,889TOTAL
    
    
    481,682
    
    
    
    1,190,252
   Geology
    33




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##### 



Harmonys Mining Operations  Overview
  
    
    Bambanani (includes Steyn 1 & 2 Shafts from February 2010);
    
    Doornkop;
    
    Evander (consists of Evander 2 & 5, 7 and 8);
    
    Joel;
    
    Kusasalethu (formerly Elandsrand);
    
    Masimong;
    
    Phakisa;
    
    Target (consists of Target 1, and as of February 2010 Loraine 3 (now Target 3) and Freddies 7 & 9 shafts);
 
 
    
    Tshepong; and
    
    Virginia operations (consists of Harmony 2, Merriespruit 1 & 3, Unisel and Brand 3 & 5).
   
    
    Evander;
    
    Free State (also known as Phoenix);
    
    Freegold;
    
    Kalgold;
    
    Target.
     
    
    Mount Magnet  The site was put on care and maintenance at the end of December 2007. A
decision was taken by management during May 2010 to sell the operation and in July 2010 the
disposal was finalized  See Item 8Recent Developments.
    
    South Kalgoorlie  we finalized the sale of this operation with Dioro on November 30,
2007  See Disposals above.
  34




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##### 




    
    an overview of our South African mining operations with a discussion and production
analysis of each of our operating segments; and
    
    an overview of our International (Australian and PNG) operations.
 Item 3 Selected Financial Data  Selected
Historical Consolidated Financial Data
  South African Mining Operations
 Unless indicated otherwise, the discussions below are for continuing operations.
 
 35




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##### 



Underground
 Bambanani
 Introduction: Anglogold ARMgold
 History:
 PSGM
 Geology:
 Mining Operations:




---



##### 



Safety: LTIFR
  Plants:
  Average Milled forProcessing
    
    the Fiscal YearPlant
    
    Capacity
    
    Ended June 30, 2010(tons/month)
    
    (tons/month)FS 1
    
    
    463,000
    
    
    
    429,000
  Production analysis:
 Fiscal Year Ended June 30,Bambanani
    
    2010
    
    
    2009
    
    
    2008ProductionTons (000)
    
    
    582
    
    
    
    570
    
    
    
    912Recovered grade (ounces/ton)(1)
    
    
    0.227
    
    
    
    0.213
    
    
    
    0.170Gold produced (ounces)(1)
    
    
    133,007
    
    
    
    121,530
    
    
    
    154,879Gold sold (ounces)(1)
    
    
    134,165
    
    
    
    119,665
    
    
    
    158,985Results of operations($)Product sales (000)
    
    
    146,971
    
    
    
    102,645
    
    
    
    128,346Cash cost (000)
    
    
    98,289
    
    
    
    72,343
    
    
    
    101,962Cash profit (000)
    
    
    48,682
    
    
    
    30,302
    
    
    
    26,384Cash costsPer ounce of gold ($)(1)
    
    
    723
    
    
    
    611
    
    
    
    639Capex(000) ($)
    
    
    27,300
    
    
    
    5,779
    
    
    
    14,737
 
 (1)
    
    1,061 ounces were produced by Steyn 2 and sold. The revenue has been credited
against capital expenditure as the shaft is not in production yet. The cost of these ounces has not
been included in the cash cost per ounce amount. The calculation of grade also excludes these
ounces.   37




---



##### 



Capital Expenditure:
 Doornkop
 Introduction Randfontein
 History
 Geology
   Mining Operations:
 38




---



##### 



Safety
  Plants
  Average Milled for theProcessing
    
    Fiscal Year EndedPlant
    
    Capacity
    
    June 30, 2010(tons/month)
    
    (tons/month)Doornkop
    
    
    242,500
    
    
    
    146,429
  Production analysis:
 Fiscal Year Ended June 30,Doornkop
    
    2010
    
    
    2009
    
    
    2008ProductionTons (000)
    
    
    595
    
    
    
    605
    
    
    
    494Recovered grade (ounces/ton)
    
    
    0.105
    
    
    
    0.070
    
    
    
    0.089Gold produced (ounces)
    
    
    62,694
    
    
    
    42,150
    
    
    
    44,038Gold sold (ounces)
    
    
    62,275
    
    
    
    43,211
    
    
    
    44,143
 39




---



##### 



Fiscal Year Ended June 30,Doornkop
    
    2010
    
    
    2009
    
    
    2008Results of operations($)Product sales (000)
    
    
    68,169
    
    
    
    38,128
    
    
    
    35,489Cash cost (000)
    
    
    54,042
    
    
    
    31,253
    
    
    
    31,014Cash profit (000)
    
    
    14,127
    
    
    
    6,875
    
    
    
    4,475Cash costsPer ounce of gold ($)
    
    
    822
    
    
    
    804
    
    
    
    749Capex(000) ($)
    
    
    45,097
    
    
    
    43,918
    
    
    
    48,039
        Capital Expenditure:
 Evander Operations
 Introduction:
 History:
 40




---



##### 



Geology:
 Mining Operations:
        
    
    The exploration drilling program was completed and the pre-feasibility study re-done.
    
    The pre-feasibility study gave a negative net present value and it was decided not to
proceed to the feasibility study at this stage.
  
    
    Project at exploration stage following the geological study.
    
    Underground development, to be used as an underground drilling platform, advanced 233
meters (or 19%). This is intended for investigation of the 7 Shaft flank of the postulated
2010 payshoot.
    
    Feasibility study to follow, pending confirmation of the mineral resource in this area.
    
    This project is on hold following the closure of the shaft.
  
    
    Joint Venture with the African Precious Minerals (APM) was formed to explore these
two target areas.
    
    APM may earn in a 52% equity stake upon completion of the full bankable feasibility
study for each area.
    
    A conceptual study was completed and approval given during fiscal 2010 for the project
to proceed to pre-feasibility.
    
    Surface drilling will commence in fiscal 2011.
    
    Subsequent to year-end, we entered into an agreement with Taung Gold Mining Limited for
the sale of these assets. Refer to Item 8.Recent Developments.
 41




---



##### 




    
    This is a future mining area on the down-dip extension of the 8 shaft payshoot.
    
    Synergies with the current 8 Shaft deepening are being considered.
  
    
    Surface exploration drilling is required to bring this project into the full bankable
feasibility study.
    
    Surface drilling was started in fiscal 2010 and is continuing throughout 2011.
    
    Results from the drilling will be used to update the pre-feasibility study.
  Safety:
 Plants:
  Average Milled for theProcessing
    
    Fiscal Year EndedPlant
    
    Capacity
    
    June 30, 2010(tons/month)
    
    (tons/month)Kinross
    
    
    220,460
    
    
    
    97,788
  Production analysis:
 Fiscal Year Ended June 30,Evander operations
    
    2010
    
    
    2009
    
    
    2008ProductionTons (000)
    
    
    869
    
    
    
    1,241
    
    
    
    1,447Recovered grade (ounces/ton)
    
    
    0.129
    
    
    
    0.153
    
    
    
    0.160Gold produced (ounces)
    
    
    111,724
    
    
    
    190,075
    
    
    
    231,799Gold sold (ounces)
    
    
    111,499
    
    
    
    195,668
    
    
    
    240,037Results of operations($)Product sales (000)
    
    
    120,092
    
    
    
    168,180
    
    
    
    192,978Cash cost (000)
    
    
    113,327
    
    
    
    110,869
    
    
    
    125,995Cash profit (000)
    
    
    6,765
    
    
    
    57,311
    
    
    
    66,983Cash costsPer ounce of gold ($)
    
    
    1,018
    
    
    
    572
    
    
    
    526Capex(000) ($)
    
    
    23,100
    
    
    
    23,352
    
    
    
    33,388
   42




---



##### 



Capital Expenditure:
 Joel
 Introduction:
 History:
 Geology
 Mining operations
   
    
    changing the winder from sinking to production mode;
    
    installing larger skips; ensuring that emergency egress is available; raise boring the
lift shaft from 121 to 129 level; and
    
    improving cleaning arrangements at the shaft bottom.
    43




---



##### 



Safety
 Plants:
  Average Milled for theProcessing
    
    Fiscal Year EndedPlant
    
    Capacity
    
    June 30, 2010(tons/month)
    
    (tons/month)Joel Plant
    
    
    88,185
    
    
    
    71,378
  Production analysis:
 Fiscal Year Ended June 30,Joel
    
    2010
    
    
    2009
    
    
    2008ProductionTons (000)
    
    
    484
    
    
    
    566
    
    
    
    449Recovered grade (ounces/ton)
    
    
    0.133
    
    
    
    0.116
    
    
    
    0.133Gold produced (ounces)
    
    
    64,495
    
    
    
    65,684
    
    
    
    59,557Gold sold (ounces)
    
    
    63,788
    
    
    
    64,784
    
    
    
    61,215Results of operations($)Product sales (000)
    
    
    69,150
    
    
    
    55,862
    
    
    
    51,557Cash cost (000)
    
    
    50,017
    
    
    
    40,649
    
    
    
    39,131Cash profit (000)
    
    
    19,133
    
    
    
    15,213
    
    
    
    12,426Cash costsPer ounce of gold ($)
    
    
    792
    
    
    
    636
    
    
    
    638Capex(000) ($)
    
    
    11,587
    
    
    
    6,183
    
    
    
    5,375
      44




---



##### 



Capital Expenditure:
 Kusasalethu (formerly Elandsrand)
 Introduction:
 History:
 Geology:
 Mining Operations:
  45




---



##### 



Safety
 Plants:
  Average Milled for theProcessing
    
    Fiscal YearPlant
    
    Capacity
    
    June 30, 2010(tons/month)
    
    (tons/month)Kusasalethu Plant
    
    
    203,925
    (1)
    
    
    102,753
 
 (1)
    
    Processing capacity will reach its optimal capacity upon completion of the
Kusasalethu New Mine Project.  Production analysis:
 Fiscal Year Ended June 30,Kusasalethu
    
    2010
    
    
    2009
    
    
    2008ProductionTons (000)
    
    
    1,141
    
    
    
    1,061
    
    
    
    981Recovered grade (ounces/ton)
    
    
    0.153
    
    
    
    0.164
    
    
    
    0.167Gold produced (ounces)
    
    
    175,029
    
    
    
    174,321
    
    
    
    164,215Gold sold (ounces)
    
    
    168,244
    
    
    
    183,676
    
    
    
    158,631Results of operations($)Product sales (000)
    
    
    183,603
    
    
    
    157,956
    
    
    
    132,699Cash cost (000)
    
    
    143,985
    
    
    
    117,321
    
    
    
    103,351Cash profit (000)
    
    
    39,618
    
    
    
    40,635
    
    
    
    29,348Cash costsPer ounce of gold ($)
    
    
    857
    
    
    
    660
    
    
    
    652Capex(000) ($)
    
    
    56,687
    
    
    
    46,915
    
    
    
    43,830
  46




---



##### 



Capital Expenditure:
  Masimong
 Introduction:
 History:
 Geology:
 Mining Operations:
 47




---



##### 



Safety
 Plants Item
4.Information of the Company  Business  Bambanani
 Production analysis:
 Fiscal Year Ended June 30,Masimong Shaft Complex
    
    2010
    
    
    2009
    
    
    2008ProductionTons (000)
    
    
    991
    
    
    
    981
    
    
    
    892Recovered grade (ounces/ton)
    
    
    0.157
    
    
    
    0.157
    
    
    
    0.131Gold produced (ounces)
    
    
    155,609
    
    
    
    154,034
    
    
    
    116,424Gold sold (ounces)
    
    
    153,937
    
    
    
    154,581
    
    
    
    117,575Results of operations($)Product sales (000)
    
    
    168,439
    
    
    
    135,025
    
    
    
    96,147Cash cost (000)
    
    
    92,571
    
    
    
    73,494
    
    
    
    87,630Cash profit (000)
    
    
    75,868
    
    
    
    61,531
    
    
    
    8,517Cash costsPer ounce of gold ($)
    
    
    602
    
    
    
    476
    
    
    
    756Capex(000) ($)
    
    
    23,407
    
    
    
    14,479
    
    
    
    15,686
       48




---



##### 



Capital Expenditure:
 Phakisa
 Introduction:
 History:
 Geology:
 Mining Operations:
     49




---



##### 



Safety:
 Plants: Item
4.Information of the Company  Business  Bambanani
 Fiscal Year Ended June 30,Phakisa
    
    2010
    
    
    2009
    
    
    2008ProductionTons (000)
    
    
    374
    
    
    
    204
    
    
    
    34Recovered grade (ounces/ton)
    
    
    0.118
    
    
    
    0.109
    
    
    
    0.118Gold produced (ounces)
    
    
    44,079
    
    
    
    22,216
    
    
    
    4.024Gold sold (ounces)
    
    
    44,496
    
    
    
    21,477
    
    
    
    4,212Results of operations ($)Product sales (000)
    
    
    49,458
    
    
    
    19,009
    
    
    
    3,891Cash cost (000)
    
    
    43,040
    
    
    
    11,903
    
    
    
    2,348Cash profit (000)
    
    
    6,418
    
    
    
    7,106
    
    
    
    1,543Cash costsPer ounce of gold ($)
    
    
    953
    
    
    
    555
    
    
    
    497Capex (000) ($)
    
    
    64,106
    
    
    
    51,210
    
    
    
    40,335
       Capital Expenditure:
 Target operation
 Introduction:
 50




---



##### 



History:
  Geology:
     Mining operations:
    51




---



##### 



Safety:
  Plants:
    Average Milled For theProcessing
    
    Fiscal Year EndedPlant
    
    Capacity
    
    June 30, 2010(tons/month)
    
    (tons/month)Target Plant
    
    
    105,000
    
    
    
    101,935
  52




---



##### 



Production analysis:
 Fiscal Year Ended June 30,Target (includes Target 1 and 3)
    
    2010
    
    
    2009
    
    
    2008ProductionTons (000)
    
    
    857
    
    
    
    710
    
    
    
    686Recovered grade (ounces/ton)(1)
    
    
    0.128
    
    
    
    0.123
    
    
    
    0.116Gold produced (ounces) (1)
    
    
    113,782
    
    
    
    87,225
    
    
    
    79,602Gold sold (ounces) (1)
    
    
    110,598
    
    
    
    87,611
    
    
    
    85,006Results of operations($)Product sales (000)
    
    
    115,772
    
    
    
    76,435
    
    
    
    69,469Cash cost (000)
    
    
    87,563
    
    
    
    59,599
    
    
    
    51,463Cash profit (000)
    
    
    28,209
    
    
    
    16,836
    
    
    
    18,006Cash costsPer ounce of gold ($)(1)
    
    
    783
    
    
    
    645
    
    
    
    716Capex(000) ($)
    
    
    50,446
    
    
    
    37,994
    
    
    
    35,307
 
 (1)
    
    3,762 ounces were produced by Target 3 and sold. The revenue has been credited against
capital expenditure as the shaft is not in production yet. The costs and ounces were not
used in the cash cost per ounce calculation. The ounces were also excluded from the grade
calculation.  
    
    infrastructural problems with the belts, fridge plants and other environmental
infrastructure, resulting in higher face temperatures and lower efficiencies;
    
    water handling; and
    
    low availability of massive stopes.
         53




---



##### 



Capital Expenditure:
 Tshepong
 Introduction:
 History:
 Geology:
 Mining Operations:
     54




---



##### 



Safety:
 Plants: Item 4. Information of the Company  Business  Bambanani
 Production analysis:
 Fiscal Year Ended June 30,Tshepong
    
    2010
    
    
    2009
    
    
    2008ProductionTons (000)
    
    
    1,674
    
    
    
    1,516
    
    
    
    1,649Recovered grade (ounces/ton)
    
    
    0.130
    
    
    
    0.152
    
    
    
    0.161Gold produced (ounces)
    
    
    216,986
    
    
    
    230,778
    
    
    
    265,914Gold sold (ounces)
    
    
    219,332
    
    
    
    227,113
    
    
    
    273,119Results of operations($)Product sales (000)
    
    
    240,473
    
    
    
    197,726
    
    
    
    223,185Cash cost (000)
    
    
    151,382
    
    
    
    108,605
    
    
    
    124,720Cash profit (000)
    
    
    89,091
    
    
    
    89,121
    
    
    
    98,465Cash costsPer ounce of gold ($)
    
    
    677
    
    
    
    483
    
    
    
    455Capex(000)($)
    
    
    34,402
    
    
    
    27,711
    
    
    
    26,834
     55




---



##### 



Capital Expenditure:
 Virginia operations
 Introduction:
 History:
 Geology:
      Mining Operations:
 56




---



##### 



Item 8.Recent Developments.
    Safety:
 Plants:
  Average Milledfor the Fiscal YearProcessing
    
    EndedPlant
    
    Capacity
    
    June 30, 2010(tons/month)
    
    (tons/month)Central
    
    
    185,190
    
    
    
    152,120
  Production analysis:
 Fiscal Year Ended June 30,Virginia operations
    
    2010
    
    
    2009
    
    
    2008ProductionTons (000)
    
    
    1,826
    
    
    
    2,493
    
    
    
    2,349Recovered grade (ounces/ton)
    
    
    0.093
    
    
    
    0.104
    
    
    
    0.106Gold produced (ounces)
    
    
    170,013
    
    
    
    258,170
    
    
    
    247,820Gold sold (ounces)
    
    
    173,035
    
    
    
    259,070
    
    
    
    250,324Results of operations($)Product sales (000)
    
    
    186,649
    
    
    
    225,897
    
    
    
    204,807Cash cost (000)
    
    
    176,774
    
    
    
    165,274
    
    
    
    180,133Cash profit (000)
    
    
    9,875
    
    
    
    60,623
    
    
    
    24,674Cash costsPer ounce of gold ($)
    
    
    1,036
    
    
    
    638
    
    
    
    726Capex(000) ($)
    
    
    23,744
    
    
    
    22,133
    
    
    
    20,868
   57




---



##### 



Capital Expenditure
 Other  Surface
 Introduction
 Kalgold
 Introduction:
 History:
 Geology:
 Mining Operations:
  58




---



##### 



Safety:
 Plants:
  Average Milled for theProcessing
    
    Fiscal Year EndedPlant
    
    Capacity
    
    June 30, 2010(tons/month)
    
    (tons/month)CIL
    
    
    165,345
    
    
    
    141,681Heap Leach(1)
    
    
    
    
    
    
    
 
 (1)
    
    Active use of heap leaching was discontinued in July 2001.  Production analysis:
 Fiscal Year Ended June 30,Kalgold
    
    2010
    
    
    2009
    
    
    2008ProductionTons (000)
    
    
    1,873
    
    
    
    1,700
    
    
    
    1,687Recovered grade (ounces/ton)
    
    
    0.026
    
    
    
    0.038
    
    
    
    0.055Gold produced (ounces)
    
    
    49,063
    
    
    
    64,784
    
    
    
    92,229Gold sold (ounces)
    
    
    48,097
    
    
    
    66,841
    
    
    
    93,172Results of operations($)Product sales ($) (000)
    
    
    51,437
    
    
    
    56,915
    
    
    
    76,685Cash cost ($) (000)
    
    
    36,162
    
    
    
    32,390
    
    
    
    38,272Cash profit ($) (000)
    
    
    15,275
    
    
    
    24,525
    
    
    
    38,413Cash costsPer ounce of gold ($)
    
    
    748
    
    
    
    506
    
    
    
    404Capex($) (000)
    
    
    1,389
    
    
    
    1,090
    
    
    
    1,347
      59




---



##### 



Capital Expenditure:
 Phoenix
 Introduction
 History
 Safety:
 Plant:
  Average Milledfor the Fiscal YearProcessing
    
    EndedPlant
    
    Capacity
    
    June 30, 2010(tons/month)
    
    (tons/month)Saaiplaas
    
    
    551,155
    
    
    
    507,063
  Mining operations
 TSFs
    60




---



##### 



Production analysis:
 Fiscal Year Ended June 30,Free State (Phoenix)
    
    2010
    
    
    2009
    
    
    2008ProductionTons (000)
    
    
    6,083
    
    
    
    6,578
    
    
    
    7,033Recovered grade (ounces/ton)
    
    
    0.003
    
    
    
    0.003
    
    
    
    0.005Gold produced (ounces)
    
    
    20,801
    
    
    
    22,345
    
    
    
    32,215Gold sold (ounces)
    
    
    20,801
    
    
    
    22,345
    
    
    
    32,215Results of operations($)Product sales (000)
    
    
    22,723
    
    
    
    19,448
    
    
    
    26,247Cash cost (000)
    
    
    15,856
    
    
    
    11,924
    
    
    
    12,286Cash profit (000)
    
    
    6,867
    
    
    
    7,524
    
    
    
    13,961Cash costsPer ounce of gold ($)
    
    
    762
    
    
    
    534
    
    
    
    381Capex(000) ($)
    
    
    0.660
    
    
    
    0.279
    
    
    
    0.492
     Capital Expenditure:
 Cooke operations
 Introduction
  Geology
  61




---



##### 



Mining Operations:
   Plants:
  Production analysis:
 Fiscal Year Ended June 30,Cooke operations
    
    2010
    
    
    2009(1)
    
    
    2008ProductionTons (000)
    
    
    
    
    
    
    1,419
    
    
    
    3,905 Underground
    
    
    
    
    
    
    514
    
    
    
    1,322 Surface
    
    
    
    
    
    
    905
    
    
    
    2,583Recovered grade (ounces/ton)
    
    
    
    
    
    
    0.057
    
    
    
    0.060 Underground
    
    
    
    
    
    
    0.137
    
    
    
    0.152 Surface
    
    
    
    
    
    
    0.011
    
    
    
    0.013Gold produced (ounces)
    
    
    
    
    
    
    80,377
    
    
    
    236,170 Underground
    
    
    
    
    
    
    70,378
    
    
    
    201,884 Surface
    
    
    
    
    
    
    9,999
    
    
    
    34,286Gold sold (ounces)
    
    
    
    
    
    
    85,746
    
    
    
    236,242 Underground
    
    
    
    
    
    
    75,747
    
    
    
    201,939 Surface
    
    
    
    
    
    
    9,999
    
    
    
    34,305Results of operations($)Product sales (000)
    
    
    
    
    
    
    68,204
    
    
    
    193,613Cash cost (000)
    
    
    
    
    
    
    49,625
    
    
    
    121,978Cash profit (000)
    
    
    
    
    
    
    18,579
    
    
    
    71,635Cash costsPer ounce of gold ($)
    
    
    
    
    
    
    644
    
    
    
    511 Underground
    
    
    
    
    
    
    613
    
    
    
    545 Surface
    
    
    
    
    
    
    868
    
    
    
    525Capex (000)($)
    
    
    
    
    
    
    9,655
    
    
    
    22,357
 
 (1)
    
    As the operations were sold on November 21, 2008, the results are for the five
months then ended and are not comparable with the prior years.  Other  Discontinued operations
 Introduction: Western Australia
  62




---



##### 



Introduction:
 History:
 Geology:
 Mining operations:
  Plants: VRO
 Production analysis:
 Fiscal Year Ended June 30,Orkney operations
    
    2010
    
    
    2009
    
    
    2008(1)ProductionTons (000)
    
    
    
    
    
    
    
    
    
    
    571Recovered grade (ounces/ton)
    
    
    
    
    
    
    
    
    
    
    0.100Gold produced (ounces)
    
    
    
    
    
    
    
    
    
    
    46,655Gold sold (ounces)
    
    
    
    
    
    
    
    
    
    
    57,132Results of operations($)Product sales (000)
    
    
    
    
    
    
    
    
    
    
    42,810Cash cost (000)
    
    
    
    
    
    
    
    
    
    
    51,482Cash (loss)/profit (000)
    
    
    
    
    
    
    
    
    
    
    (8,672
    )Cash costsPer ounce of gold ($)
    
    
    
    
    
    
    
    
    
    
    1,093Capex($)
    
    
    
    
    
    
    
    
    
    
    3,579
 
 (1)
    
    The results are for the eight months ended February 2008.  63




---



##### 



International Mining Operations
 Western Australia Operations
 Corporate Action  Mount Magnet and Big Bell Operations
 BBGO Monarch
       Mount Magnet Operations
 Introduction:
 History:
 Geology:
 Mining Operations: .
 64




---



##### 



Plant
  Production analysis:
 Fiscal Year Ended June 30,Mount Magnet
    
    2010
    
    
    2009
    
    
    2008ProductionTons (000)
    
    
    
    
    
    
    
    
    
    
    966Recovered grade (ounces/ton)
    
    
    
    
    
    
    
    
    
    
    0.080Gold produced (ounces)
    
    
    
    
    
    
    
    
    
    
    75,297Gold sold (ounces)
    
    
    
    
    
    
    
    
    
    
    77,097Results of operations($)Product sales (000)
    
    
    
    
    
    
    
    
    
    
    56,215Cash cost (000)
    
    
    
    
    
    
    
    
    
    
    41,405Cash profit (000)
    
    
    
    
    
    
    
    
    
    
    14,810Cash costsPer ounce of gold ($)
    
    
    
    
    
    
    
    
    
    
    545Capex(000) ($)
    
    
    
    
    
    
    
    
    
    
    3,909
  Capital Expenditure:
 Exploration:
 65




---



##### 



South Kalgoorlie Operations
 Introduction:
  History:
 Geology:
 Mining Operations:
 Item 3. Key Information  Risk Factors  Risks Relating to Our
Business and Our Industry  To maintain gold production beyond the expected lives of Harmonys
existing mines or to increase production materially above projected levels, Harmony will need to
access additional reserves through development or discovery.
 Plant: .
 Production analysis:
 Fiscal Year Ended June 30,South Kalgoorlie
    
    2010(1)
    
    2009(1)
    
    2008(1)ProductionTons (000)
    
    
    
    
    
    
    
    
    
    
    477Recovered grade (ounces/ton)
    
    
    
    
    
    
    
    
    
    
    0.058Gold produced (ounces)
    
    
    
    
    
    
    
    
    
    
    27,778Gold sold (ounces)
    
    
    
    
    
    
    
    
    
    
    27,778
 66




---



##### 



Fiscal Year Ended June 30,South Kalgoorlie
    
    2010(1)
    
    2009(1)
    
    2008(1)Results of operations($)Product sales (000)
    
    
    
    
    
    
    
    
    
    
    18,858Cash cost (000)
    
    
    
    
    
    
    
    
    
    
    14,453Cash profit (000)
    
    
    
    
    
    
    
    
    
    
    4,405Cash costsPer ounce of gold($)
    
    
    
    
    
    
    
    
    
    
    517Capex(000) ($)
    
    
    
    
    
    
    
    
    
    
    12,526
 
 (1)
    
    The South Kal Operations sales process was concluded on November 30, 2007. The results for
fiscal 2008 are for the five months ended November 2007. 67




---



##### 



Papua New Guinean Operations and Exploration
 Overview
 Introduction:
 1.
    
    the Hidden Valley Operation;2.
    
    the Wafi-Golpu Project; and3.
    
    an Exploration Joint Venture on the surrounding tenement package.
  1.
    
    Mount Hagen in the Western Highlands2.
    
    Amanab in the Sandaun Province3.
    
    Two tenement applications in the Central Province4.
    
    Two tenement applications in the Southern Highlands Province
    68




---



##### 



Hidden Valley Operation
 Introduction: HVK
    History:
 Project Overview:
     Geology:
  HVZ KCZ
 Reserves: Item 4. Reserves.
 69




---



##### 



Site Access:
 Power Supply: PPL
  Customs and Excise:
 Environment:
  EMP AMD
 TSF
 Community affairs/landowner discussions: MCG MOA
  Mining and Mining Fleet:
  70




---



##### 



Plant:
 (a)
    
    a primary crushing, grinding (with the incorporation of a gravity gold recovery circuit),
CIL, Merrill-Crowe zinc precipitation, goldroom and tailings detox plant for the low silver
Hamata ores, and(b)
    
    will revert to a primary and secondary crushing, grinding, flotation, concentrate
regrind, counter-current decantation circuit with Merrill-Crowe zinc precipitation,
flotation concentrate and tailing CIL, goldroom and tailings detox for the high silver
oxide/transition ores, and(c)
    
    then a similar circuit without flotation tail CIL for high silver sulphide ores from
Hidden valley/Kaveroi ores.
   Government royalty and other rights:
  Third Party Royalties:
  Production analysis:
 Capital Expenditure:
 71




---



##### 



Wafi-Golpu Project
 Introduction:
 Geography:
 Mining Reserves Item 4. Reserves
   1.
    
    The PFS is completed to industry accepted standards for a PFS (±20-25% accuracy). The
outcome of further more detailed studies may affect the reserve.2.
    
    The location for the tailings storage facility has not been finalized, however potential
sites proximal to the project have been defined.3.
    
    There are outstanding issues associated with traditional land owners required to be
resolved before the project is able to be constructed.4.
    
    The board has not yet committed to completing subsequent phases of study, or to project
construction.
   Government Royalty and Other Rights
 Third Party Royalties
 Capital Expenditures:
 72




---



##### 



Concept Study:
  
    
    Outline the key drivers and major development options;
    
    Define at least one technically and commercially viable business case; and
    
    Establish further value building opportunities and a work plan for Prefeasibility;
      
    
    Expansion of the Golpu resources to the north;
 
 
    
    Improved Wafi resource recovery through enhanced resource modeling;
    
    Development of Wafi at depth and the Western zone adjacent to Wafi A zone;
    
    Further refractory process development and enhancement; and
    
    Produce a Molybdenum concentrate from Golpu copper concentrate.
   Wafi Gold Projects
 Introduction:
 Geology:
   73




---



##### 



Project Status:
 Golpu Copper-Gold Project
 Introduction:
 Geology:
   Project Status:
 
    
    previous work carried out by Harmony (at PFS level) in 2007;
    
    further study work carried out by the MMJV during mid 2009 and early 2010;
    
    mine re-design using a new integrated geological model extrapolated based on new drill
results from Golpu deposit extensions in February 2010;
    
    process re-design and thinking to process Wafi refractory ores; and
    
    re-evaluation of hydropower generation.
    74




---



##### 



CIR
 Additional Prospects and Exploration Potential:
 Wafi Transfer Structure & Regional Targets
 Introduction:
 Geology:
 Project Status:
    Mount Hagen Project (Harmony 100%)
 Introduction:
 Project Status:
  75




---



##### 



Amanab Project (Harmony 100%)
 Introduction:
 Project Status:
  Hidden Valley ML Exploration
 Introduction:
 Project Status:
    Kerimenge and the broader prospect potential
 Introduction:
 Project Status:
 76




---



##### 



Tenement Location Map
 
 Morobe Coast Exploration License
 Introduction:
 Wiwo and Giu Prospect
  Project Status:
 77




---



##### 



REGULATION
 Mineral Rights
 South Africa
  
    
    to recognize the internationally accepted right of the state of South Africa to exercise
full and permanent sovereignty over all the mineral and petroleum resources within South
Africa;
    
    to give effect to the principle of South Africas custodianship of its mineral and
petroleum resources;
    
    to promote equitable access to South Africas mineral and petroleum resources to all the
people of South Africa;
    
    to substantially and meaningfully expand opportunities for HDSAs including women, to
enter the mineral and petroleum industry and to benefit from the exploitation of South
Africas mineral and petroleum resources;
    
    to promote economic growth and mineral and petroleum resources development in South
Africa;
    
    to promote employment and advance the social and economic welfare of all South Africans;
    
    to provide security of tenure in respect of prospecting, exploration, mining and
production operations;
    
    to give effect to Section 24 of the South African Constitution by ensuring that South
Africas mineral and petroleum resources are developed in an orderly and ecologically
sustainable manner while promoting justifiable social and economic development; and
    
    to ensure that holders of mining and production rights contribute towards socio-economic
development of the areas in which they are operating.
    (i)
    
    facilitate local beneficiation of mineral commodities;
 78




---



##### 



(ii)
    
    procure a minimum of 40% of capital goods, 70% of services and 50% of consumer goods
from HDSA suppliers (i.e. suppliers of which a minimum of 25% + 1 vote of their share
capital must be owned by HDSAs) by 2014. These targets will however be exclusive of
non-discretionary procurement expenditure;(iii)
    
    achieve a minimum of 40% HDSA demographic representation by 2014 at executive
management (board) level, senior management (EXCO) level, core and critical skills, middle
management level and junior management level;(iv)
    
    invest up to 5% per cent of annual payroll in essential skills development activities;
and(v)
    
    implement measures to improve the standards of housing and living conditions for
mineworkers by converting or upgrading mineworkers hostels into family units, attaining an
occupancy rate of one person per room and facilitating home ownership options for all
mineworkers in consultation with organised labour, all of which must be achieved by 2014.
      
    
    give effect to the Ministers stated intention to promote investment in the South African
mining industry;
    
    establish objective criteria for compliance with the MPRDAs socio- economic objectives;
    
    remove the technical deficiencies of the MPRDA;
    
    align the MPRDA with the Promotion of Administrative Justice Act, 2000; and
    
    coordinate the environmental requirements between the MPRDA and the National
Environmental Management Act.
 Papua New Guinea
  79




---



##### 



Environmental Matters
 South Africa
   
    
    managing the business with environment as an integral part of the business processes;
    
    focusing relentlessly on effectiveness of risk controls;
    
    radically reducing the environmental liability in the organisation;
    
    create a sharing, learning, challenging and innovative enviromental culture.
  
    
    ComplianceWe will strive to comply with all applicable municipal, provincial and national laws and
regulations, as well as the other requirements to which the company subscribes that are
relevant to the environmental aspects of our activities.
    
    Continual ImprovementWe will evaluate and continually improve the effectiveness of our Environmental Management
System (EMS) through periodic audits and management reviews, and we will review our
environmental policy on an annual basis.
    
    Pollution PreventionWe will actively design our operations and undertake our mining activities so as to prevent
pollution. We will strive towards the continual reduction of adverse environmental effects and
support the principle of sustainable development.
 80




---



##### 




    
    AwarenessWe will communicate our environmental policies to our employees, contractors and suppliers,
and will provide appropriate training to all employees to ensure their continuing awareness of
our environmental responsibilities.
  
    
    ComplianceThe Company will reduce the number of significant incidents to zero.
    
    Air PollutionAll sites with emissions >100,000 tonnes per year CO2 equivalent is required to have and
maintain energy conservation plans by 2012.Harmonys aggregate group target for reduction in energy consumption per ton milled is 10% by
2013 based on a 2005 base year.Harmonys aggregate group target for reduction in GHG per ton milled is 5% by 2013 based on a
2005 base year.
    
    BiodiversityAll sites will have a biodiversity action plan by 2012.
    
    Water ManagementThe aggregate group target for increased affected water consumption per ton milled is a 5%
improvement by 2013 based on a 2008 base year.The aggregate group target for reducing fresh water consumption per ton milled is a 2%
improvement by 2013 based on a 2008 base year.
    
    RecyclingAll steel, plastic and timber waste to be handled through designated areas, to improve levels
of recycling, and 50% of all oil and grease to be recycled.
    
    Land UseThe aggregate group target is a 5% reduction in the land available for rehabilitation.
 Environmental performance
 ISO14001 implementation
  
    
    Doornkop  shaft achieved certification in fiscal 2010; Doornkop plant is
scheduled for certificate in November 2010;
    
    Kusasalethu  Certification audit planned for March 2011;
    
    Evander 8 Shaft  Certification audit planned for October 2010;
    
    Kalgold  Certification audit planned for October 2010; and
    
    Free State Harmony 1 plant  December 2011.
 81




---



##### 



EMPR
   Significant environmental incidents
  
    
    localised sewage spill onto adjacent land (one incident);
    
    localised slimes spillage into the Winkelhaakspruit (two incidents);
    
    overflow of affected water from a water containment facility into a tributary stream as
a result of flash floods (one incident); and
    
    overflow of affected water from a water containment facility into the adjoining storm
water facility (one incident).
 Financial provision
    Papua New Guinea
    82




---



##### 



SBMS
 Significant environmental incidents
  83




---



##### 



Health and Safety Matters
 South Africa
 The Mine Health and Safety Act
  
    
    to protect the health and safety of employees and other persons at mines;
    
    to promote a culture of health and safety;
    
    to require employers and employees to identify hazards and eliminate, control and
minimize the risks relating to health and safety at mines;
    
    to give effect to the public international law obligations of South Africa that concern
health and safety at mines;
    
    to provide for employee participation in matters of health and safety through health and
safety representatives and health and safety committees at mines;
    
    to provide for the effective monitoring of health and safety conditions at mines;
    
    to provide for the enforcement of health and safety measures at mines; and
    
    to foster and promote co-operation and consultation on health and safety between the DMR,
employers, employees and their representatives.
  
    
    Training records to be kept
    
    Employer investigations
    
    Permanent committees of the MHSC
    
    Health and Safety Management system
    
    Administrative fines increased from R200,000 to R1million
    
    Offences  applicable to the Employer
   84




---



##### 



Criminal mining
  Healthcare services
   Occupational health
  MBOD RMA
 NIHL TB
 HIV & AIDS Policy
 HCT Item 3. Key Information  Risk Factors  Risks Relating to Our Business and Our
Industry  HIV & AIDS poses risks to Harmony in terms of productivity and costs Item 3. Key
Information  Risk Factors  Risks Relating to Our Business and Our Industry  The cost of
occupational healthcare services may increase in the future
 NUM UASA
 85




---



##### 



Management of HIV & AIDS & Tuberculosis (TB)
  
    
    At a clinical level, the symptoms of the illness are managed by the Groups health care
services.
    
    Company-wide and mine-specific initiatives are conducted. Shaft-based HIV & AIDS
committees form an integral part of the Health and Safety Committees, which meet on a
monthly basis.
    
    Group policy and practice is overseen by a specialist health care professional.
   
    
    Concerted efforts will be made to enhance and sustain the groups Voluntary Counselling
and Testing (VCT) programs.
    
    Enhanced education and counselling will be provided to employees who are HIV-negative.
    
    Anti-retroviral therapy (ART) will be introduced at an earlier stage, which is expected
to have a significant impact on reducing HIV & AIDS incidence rates.
    
    In addition, efforts will be made to intensify case findings, introduce isoniazid
preventative treatment and improve infection control with further infection control measures
such as the use of masks, ultra-violet lights, etc.
 HIV & AIDS performance
  Australia
   86




---



##### 



Papua New Guinea
  Item 3. Key Information  Risk Factors  Risks Relating to Our Business and Our Industry 
HIV/AIDS poses risks to Harmony in terms of productivity and costs Item 3. Key Information 
Risk Factors  Risks Relating to Our Business and Our Industry  The cost of occupational
healthcare services may increase in the future
 87




---



##### 



Item 4A. UNRESOLVED STAFF COMMENTS
  
 Item 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
 You should read the following discussion and analysis together with the consolidated financial
statements, including the related notes, appearing elsewhere in this annual report.
 Overview
       Critical Accounting Policies and Estimates
  Item 18. Financial Statements
 Gold mineral reserves
    88




---



##### 



Item 3. Key Information  Risk Factors 
Harmonys gold reserve figures are estimated based on a number of assumptions, including
assumptions as to mining and recovery factors, future cash costs of production and the price of
gold and may yield less gold under actual production conditions than currently estimated.
 Impairment of Property, Plant and Equipment
     Carrying Value of Goodwill
  89




---



##### 



Provision for environmental rehabilitation
  Deferred taxes
 Results of OperationsContinuing
OperationsIncome and Mining Taxes
    Revenue
 Item 3. Key Information  Risk Factors  The profitability of Harmonys operations,
and the cash flows generated by those operations, are affected by changes in the market price for
gold, which in the past has fluctuated widely.
  90




---



##### 



Harmonys Realized Gold Price
 Item 3. Key Information Risk Factors  The profitability of Harmonys operations, and the cash flows generated by those
operations, are affected by changes in the market price for gold, which in the past has fluctuated
widely.
  Fiscal Year EndedJune 30,2010
    
    2009
    
    2008($/oz)Average
    
    
    1,089
    
    
    
    874
    
    
    
    821High
    
    
    1,261
    
    
    
    989
    
    
    
    1,011Low
    
    
    908
    
    
    
    713
    
    
    
    649Harmonys average sales price  continuing operations(1)
    
    
    1,092
    
    
    
    867
    
    
    
    818
 
 (1)
    
    Our average sales price differs from the average gold price due to the timing of
our sales of gold within each year. Costs
   Item 5. Operating and Financial Review and Prospects
 Exchange Rates. Item 3. Key Information  Risk Factors  Because most of Harmonys production costs are in Rand
and other non-U.S. currencies, while gold is generally sold in U.S. dollars, Harmonys financial
condition could be materially harmed by an appreciation in the value of the Rand and other non-U.S.
currencies.
  Reconciliation of Non-GAAP Measures
    91




---



##### 



Continuing operations
  Fiscal year ended June 30,2010
    
    2009
    
    2008(in $ millions, except per ounce amounts)Total cost of sales from continuing operations  under IFRS
    
    
    1,383
    
    
    
    1,083
    
    
    
    1,122Depreciation and amortization expense
    
    
    (181
    )
    
    
    (139
    )
    
    
    (117
    )Rehabilitation costs
    
    
    (4
    )
    
    
    (1
    )
    
    
    (1
    )Care and maintenance costs of restructured shafts
    
    
    (8
    )
    
    
    (5
    )
    
    
    (10
    )Employment termination and restructuring costs
    
    
    (27
    )
    
    
    (4
    )
    
    
    (29
    )Share-based payments
    
    
    (20
    )
    
    
    (13
    )
    
    
    (6
    )Impairment of assets
    
    
    (43
    )
    
    
    (71
    )
    
    
    (40
    )Reversal/(provision) for post retirement benefits
    
    
    3
    
    
    
    
    
    
    
    (1
    )Gold inventory movement
    
    
    
    
    
    
    2
    
    
    
    (4
    )Total cash costs from continuing operations  using Gold Institute guidance
    
    
    1,103
    
    
    
    852
    
    
    
    914Per ounce calculation:Ounces produced (1)
    
    
    1,377,499
    
    
    
    1,460,831
    
    
    
    1.524,557Total cash cost per ounce from continuing operations  using Gold
Institute guidance
    
    
    801
    
    
    
    583
    
    
    
    600
 
 (1)
    
    The ounces produced for fiscal 2010 exclude ounces from Hidden Valley, Target 3 and
Steyn 2 for the period in which these shafts were not in production. The associated costs
have been capitalized. 92




---



##### 



Discontinued operations
  Fiscal year ended June 30,2010
    
    2009
    
    2008(in $ millions, except per ounce amounts)Total cost of sales from discontinued operations  under IFRS
    
    
    1
    
    
    
    71
    
    
    
    237Depreciation and amortization expense
    
    
    
    
    
    
    (28
    )
    
    
    (7
    )Rehabilitation costs
    
    
    
    
    
    
    (2
    )
    
    
    (1
    )Care and maintenance costs of restructured shafts
    
    
    (1
    )
    
    
    (1
    )
    
    
    Employment termination and restructuring costs
    
    
    
    
    
    
    
    
    
    
    (4
    )Share-based payments
    
    
    
    
    
    
    
    
    
    
    Reversal of impairment of assets
    
    
    
    
    
    
    10
    
    
    
    5Gold inventory movement
    
    
    
    
    
    
    2
    
    
    
    6Total cash costs from discontinued operations  using Gold Institute guidance
    
    
    
    
    
    
    52
    
    
    
    236Per ounce calculation:Ounces produced
    
    
    
    
    
    
    80,377
    
    
    
    385,900Total cash cost per ounce from discontinued operations  using Gold
Institute guidance
    
    
    
    
    
    
    644
    
    
    
    612
 Total Harmony  Continuing and discontinued operations
  Fiscal year ended June 30,2010
    
    2009
    
    2008(in $ millions, except per ounce amounts)Total production costs  under IFRS
    
    
    1,384
    
    
    
    1,154
    
    
    
    1,359Depreciation and amortization expense
    
    
    (181
    )
    
    
    (167
    )
    
    
    (124
    )Rehabilitation costs
    
    
    (4
    )
    
    
    (3
    )
    
    
    (2
    )Care and maintenance costs of restructured shafts
    
    
    (9
    )
    
    
    (6
    )
    
    
    (10
    )Employment termination and restructuring costs
    
    
    (27
    )
    
    
    (4
    )
    
    
    (33
    )Share-based payments
    
    
    (20
    )
    
    
    (13
    )
    
    
    (6
    )(Impairment)/reversal of impairment of assets
    
    
    (43
    )
    
    
    (61
    )
    
    
    (35
    )Reversal/(provision) for post retirement benefits
    
    
    3
    
    
    
    
    
    
    
    (1
    )Gold inventory movement
    
    
    
    
    
    
    4
    
    
    
    2Total cash costs  using Gold Institute guidance
    
    
    1,103
    
    
    
    904
    
    
    
    1,150Per ounce calculation:Ounces produced
    
    
    1,377,499
    
    
    
    1,541,208
    
    
    
    1,910,457Total cash cost per ounce  using Gold Institute guidance
    
    
    801
    
    
    
    586
    
    
    
    602
  Item 4 Information on the Company  Business  Strategy
 Exchange Rates
   93




---



##### 



Item 3 Key Information  Risk
Factors  Because most of Harmonys production costs are in Rand and other non-U.S. currencies,
while gold is generally sold in U.S. dollars, Harmonys financial condition could be materially
harmed by an appreciation in the value of the Rand and other non-U.S. currencies
 Inflation
   Item 3. Key Information  Risk Factors  Our operations may be negatively
impacted by inflation
 South African Socio-Economic Environment
 Item 3. Key Information  Risk Factors 
Socio-economic instability in South Africa or regionally may have an adverse effect on Harmonys
operations and profits.
 Item 10.
Additional Information  Exchange Controls.
   94




---



##### 



Royalties
   Cost control
    Conops
    Productivity
  Electricity in South Africa
 Supply
 ECS
 95




---



##### 



NMD
  Cost
 MYPD
 Renewable energy
   Results of Operations
 Years Ended June 30, 2010 and 2009
 Continuing Operations
 Revenues
    96




---



##### 



Cost of sales
  Production costs (cash costs)
  PercentageYear Ended June 30,
    
    Year Ended June 30,
    
    (Increase)/decrease2010
    
    2009
    
    in Cash(oz)
    
    ($/oz)
    
    (oz)
    
    ($/oz)
    
    Costs per ounceSOUTH AFRICABambanani(1)
    
    
    133,007
    
    
    
    723
    
    
    
    121,530
    
    
    
    611
    
    
    
    (18.3
    )Doornkop
    
    
    62,694
    
    
    
    822
    
    
    
    42,150
    
    
    
    804
    
    
    
    (2.2
    )Evander
    
    
    111,724
    
    
    
    1,018
    
    
    
    190,075
    
    
    
    572
    
    
    
    (78.0
    )Joel
    
    
    64,495
    
    
    
    792
    
    
    
    65,684
    
    
    
    636
    
    
    
    (24.3
    )Kusasalethu (2)
    
    
    175,029
    
    
    
    857
    
    
    
    174,321
    
    
    
    660
    
    
    
    (29.8
    )Masimong
    
    
    155,609
    
    
    
    602
    
    
    
    154,034
    
    
    
    476
    
    
    
    (26.5
    )Phakisa
    
    
    44,079
    
    
    
    953
    
    
    
    22,216
    
    
    
    555
    
    
    
    (71.7
    )Target(3)
    
    
    113,782
    
    
    
    783
    
    
    
    87,225
    
    
    
    645
    
    
    
    (21.4
    )Tshepong
    
    
    216,986
    
    
    
    677
    
    
    
    230,778
    
    
    
    483
    
    
    
    (40.2
    )Virginia
    
    
    170,013
    
    
    
    1,036
    
    
    
    258,170
    
    
    
    638
    
    
    
    (62.4
    )Other  surface
    
    
    119,954
    
    
    
    680
    
    
    
    114,648
    
    
    
    521
    
    
    
    (30.5
    )INTERNATIONALPNG (4)
    
    
    61,173
    
    
    
    1,003
    
    
    
    
    
    
    
    
    
    
    
    (100
    )Total continuing operations
    
    
    1,428,544
    
    
    
    
    
    
    
    1,460,831Weighted average
    
    
    
    
    
    
    801
    
    
    
    
    
    
    
    583
    
    
    
    (37.4
    )
 
 (1)
    
    Includes 1,061 ounces from President Steyn 2 shaft, which have not been
included in the cash cost calculation as the shaft was not in production.(2)
    
    Previously known as Elandsrand.(3)
    
    Includes 3,762 ounces from Target 3, which have not been included in the
cash cost calculation as the shaft was not in production.(4)
    
    Includes 46,223 ounces for the period ended April 2010, which have not been
included in the cash cost calculation as the operation was not in production during that period.  97




---



##### 



Depreciation and amortization
  Employment termination and restructuring costs
  Impairment of assets
  98




---



##### 



Share based compensation
  Corporate, administration and other expenditure
  Corporate social investment expenditure
  Profit on sale of property, plant and equipment
  Other expenses  net
  Profit from associates
  Impairment of investment in associate
  Loss on sale of investment in subsidiary
  99




---



##### 



Net gain/(loss) on financial instruments
  Investment income
  Finance costs
  Income and Mining Taxes
 South Africa.
 STC
 Income and Mining Tax
    
    2010
    
    2009Effective tax rate expense
    
    
    183
    %
    
    
    9
    %
   Critical Accounting
Policies and Estimates  Deferred taxes.
 100




---



##### 



Australia
   PNG
     Discontinued Operations
 Revenues
  Costs
  Reversal of impairment
  Profit on sale of shares
  101




---



##### 



Income and Mining Taxes
 South Africa Income and Mining Taxes Continuing Operations
  Australia
 Continuing and discontinued operations
 Net (loss)/profit
  Years Ended June 30, 2009 and 2008
 Continuing Operations
 Revenues
          102




---



##### 



Cost of sales
  Production costs cash costs
  PercentageYear Ended June 30,
    
    Year Ended June 30,
    
    (Increase)/decrease2009
    
    2008
    
    in Cash(oz)
    
    ($/oz)
    
    (oz)
    
    ($/oz)
    
    Costs per ounceSOUTH AFRICABambanani
    
    
    121,530
    
    
    
    611
    
    
    
    154,879
    
    
    
    639
    
    
    
    4.4Doornkop
    
    
    42,150
    
    
    
    804
    
    
    
    44,038
    
    
    
    749
    
    
    
    (7.3
    )Evander
    
    
    190,075
    
    
    
    572
    
    
    
    231,799
    
    
    
    526
    
    
    
    (8.7
    )Joel
    
    
    65,684
    
    
    
    636
    
    
    
    59,557
    
    
    
    638
    
    
    
    Kusasalethu
    
    
    174,321
    
    
    
    660
    
    
    
    164,215
    
    
    
    652
    
    
    
    (1.2
    )Masimong
    
    
    154,034
    
    
    
    476
    
    
    
    116,424
    
    
    
    756
    
    
    
    37.0Phakisa
    
    
    22,216
    
    
    
    555
    
    
    
    4,024
    
    
    
    497
    
    
    
    (11.7
    )Target
    
    
    87,225
    
    
    
    645
    
    
    
    79,602
    
    
    
    716
    
    
    
    9.9Tshepong
    
    
    230,778
    
    
    
    483
    
    
    
    265,914
    
    
    
    455
    
    
    
    (6.2
    )Virginia
    
    
    258,170
    
    
    
    638
    
    
    
    247,820
    
    
    
    726
    
    
    
    12.1Other  underground
    
    
    
    
    
    
    
    
    
    
    8,305
    
    
    
    1,565
    
    
    
    (100
    )Other  surface
    
    
    114,648
    
    
    
    521
    
    
    
    147,980
    
    
    
    378
    
    
    
    (37.8
    )INTERNATIONALPNG
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total continuing operations
    
    
    1,460,831
    
    
    
    
    
    
    
    1,524,557Weighted average
    
    
    
    
    
    
    583
    
    
    
    
    
    
    
    600
    
    
    
    2.8
       103




---



##### 



Depreciation and amortization
  Employment termination and restructuring costs
  Impairment of assets
  Share based compensation
  Corporate, administration and other expenditure
  Profit on sale of property, plant and equipment
  Other expenses  net
  104




---



##### 



Profit/(loss) from associates
  Impairment of investment in associate
  Net (loss)/gain on financial instruments
  Loss on sale of listed investments
  Investment income
  Finance costs
  Income and Mining Taxes
 South Africa.
 STC
 105




---



##### 



Income and Mining Tax
    
    2009
    
    2008Effective tax rate expense
    
    
    9
    %
    
    
    (167
    %)
   Critical Accounting
Policies and Estimates  Deferred taxes.
 Australia
    PNG
    106




---



##### 



Discontinued Operations
 Revenues
  Costs
  Reversal of impairment
  Profit on sale of shares
  Profit on sale of property, plant and equipment
  Income and Mining Taxes
 South Africa Income and Mining Taxes Continuing Operations
  Australia
 Continuing and discontinued operations
 Net profit/(loss)
  Recent Accounting Pronouncements
 IFRS 1 (Amendment): First-time Adoption of International Financial Reporting Standards 
Additional Exemptions for First-time Adopters (effective for periods beginning on or after January
1, 2010).
 IFRS 1 (Amendment): First-time Adoption of International Financial Reporting Standards 
Limited Exemptions from Comparative IFRS 7 Disclosures for First-time Adopters (effective for
periods beginning on or after July 1, 2010).
 107




---



##### 



IFRS 2 (Amendment)  Group cash-settled and share-based payment transactions (effective from
periods beginning January 1, 2010).
 IFRS 5 (Amendment)  Measurement of non-current assets (or disposal groups) classified as held
for sale (effective from periods beginning January 1, 2010). IASB
 IFRS 9  Financial instruments (effective from periods beginning January 1, 2013).
 IAS 1 (Amendment)  Presentation of financial statements (effective from periods beginning
January 1, 2010).
 IAS 7 (Amendment)  Statement of cash flows (effective from periods beginning January 1,
2010).
 IAS 17 (Amendment)  Leases (effective from periods beginning January 1, 2010).
 IAS 24 (Revised)  Related-party disclosures (effective from periods beginning January 1,
2011).
 IAS 32 (Amendment)  Classification of rights issues (effective from periods beginning
February 1, 2010).
 IAS 36 (Amendment)  Impairment of Assets (effective from periods beginning January 1, 2010).
 IAS 38 (Amendment)  Intangible assets (effective from periods beginning January 1, 2010).
 108




---



##### 



IAS 39 (Amendment)  Financial instruments: Recognition and measurement (effective from
periods beginning January 1, 2010).
    IFRIC 14 (Amendment): The Limit on a Defined Benefit Asset, Minimum Funding Requirements and
their Interaction  Prepayment of Minimum Funding Requirements (effective for financial periods
beginning on or after January 1, 2011).
 IFRIC 19  Extinguishing financial liabilities with equity instruments (effective from periods
beginning July 1, 2010).
 Improvements projects
 Liquidity and Capital Resources
  Cash Resources
 Fiscal year ended June 30,2010
    
    2009
    
    2008($ in millions)Continuing operationsOperating cash flows
    
    
    216
    
    
    
    246
    
    
    
    165Investing cash flows
    
    
    (453
    )
    
    
    (108
    )
    
    
    (313
    )Financing cash flows
    
    
    85
    
    
    
    (233
    )
    
    
    78Foreign exchange differences
    
    
    6
    
    
    
    8
    
    
    
    5Total cash flows from continuing operations
    
    
    (146
    )
    
    
    (87
    )
    
    
    (65
    )Discontinued operationOperating cash flows
    
    
    (6
    )
    
    
    8
    
    
    
    71Investing cash flows
    
    
    
    
    
    
    202
    
    
    
    (16
    )Financing cash flows
    
    
    
    
    
    
    
    
    
    
    Foreign exchange differences
    
    
    
    
    
    
    77
    
    
    
    (7
    )Total cash flows from discontinued operations
    
    
    (6
    )
    
    
    287
    
    
    
    48
 Operations
   109




---



##### 



Investing
   Financing
   Outstanding Credit Facilities and Other Borrowings
 Nedbank JIBAR
  Recently Retired Credit Facilities and Other Borrowings
  110




---



##### 



Contractual Obligations and Commercial Commitments
  Contractual Obligations on the Balance Sheet
  Payments Due by PeriodLess Than
    
    12-36
    
    36-60
    
    After 6012 Months
    
    Months
    
    Months
    
    MonthsJuly 1, 2010
    
    July 1, 2011
    
    July 1, 2013
    
    Subsequentto June 30,
    
    to June 30,
    
    To June 30,
    
    June 30,Total
    
    2011
    
    2013
    
    2015
    
    2015($million)
    
    ($million)
    
    ($million)
    
    ($million)
    
    ($million)Nedbank facility (1)
    
    
    181
    
    
    
    37
    
    
    
    106
    
    
    
    38
    
    
    
    Westpac Bank(1)
    
    
    12
    
    
    
    4
    
    
    
    8
    
    
    
    
    
    
    
    Post retirement health care(2)
    
    
    20
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20Environmental obligations(3)
    
    
    222
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    222Total contractual obligations
    
    
    435
    
    
    
    41
    
    
    
    114
    
    
    
    38
    
    
    
    242
 
 (1)
    
    See Item 5. Operating and Financial Review and Prospects  Liquidity and
Capital Resources  Credit Facilities and Other Borrowings  Outstanding Credit Facilities and
Other Borrowings.(2)
    
    This liability relates to post-retirement medical benefits of former employees who
retired prior to December 31, 1996 and is based on actuarial valuations conducted during fiscal
2010.(3)
    
    We make provision for environmental rehabilitation costs and related liabilities
based on managements interpretations of current environmental and regulatory requirements. See
Item 5. Operating and Financial Review and Prospects  Critical Accounting Policies. 111




---



##### 



Contractual Obligations off the Balance Sheet
  Capital Expenditure
  $millionAuthorized and contracted for (1)
    
    
    44Authorized but not yet contracted for
    
    
    132Total
    
    
    176
 
 (1)
    
    Including our share of the PNG joint ventures capital expenditure of US$27 million. Commercial Commitments
  Amount of Commitments Expiring by PeriodLessThan 12
    
    12-36
    
    36-60Months
    
    Months
    
    Months
    
    After 60July 1,
    
    July 1,
    
    July 1,
    
    Months2010 to
    
    2011 to
    
    2013 to
    
    SubsequentJune 30,
    
    June 30,
    
    June 30,
    
    to June 30,Total
    
    2011
    
    2013
    
    2015
    
    2015($million)
    
    ($million)
    
    ($million)
    
    ($million)
    
    ($million)Guarantees(1)
    
    
    70
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    70Capital commitments(2)
    
    
    44
    
    
    
    44
    
    
    
    
    
    
    
    
    
    
    
    Total commitments expiring by period
    
    
    114
    
    
    
    44
    
    
    
    
    
    
    
    
    
    
    
    70
 
 (1)
    
    Amount of Commitments Expiring by Period.(2)
    
    Capital commitments consist only of amounts committed to external suppliers,
although a total of US$132 million has been approved by the board for capital expenditures. Trend Information
 Item 4 Information on the
Company  Business  Strategy  Results of Operations
 Working Capital and Anticipated Financing Needs
  Capital Expenditures Item 4. Information on the Company  Business  Harmonys
Mining Operations. Item 3. Key Information  Risk Factors  Harmonys strategy
depends on its ability to make additional acquisitions. Item
10. Additional Information  Memorandum and Articles of Association  Directors  Borrowing
Powers. Item 10. Additional Information  Exchange
Controls.
 112




---



##### 



Other Financial Information
 Export Sales
  113




---



##### 



Item 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
 Directors and Senior Management
  Board of directors
 Name
    
    Date of appointmentPatrice Motsepe(1)
    
    September 23, 2003Frank Abbott (1)(2)
    
    October 1, 1994Graham Briggs
    
    August 6, 2007Joaquim Chissano (1)
    
    April 20, 2005Fikile De Buck(1) (3)(4)
    
    March 30, 2006Ken Dicks (1) (3)
    
    February 13, 2008Cheick Diarra (1) (3)
    
    March 5, 2008Dr Simo Lushaba (1) (3)
    
    October 18, 2002Cathie Markus (1) (3)
    
    May 31, 2007Harry Ephraim Mashego
    
    February 24, 2010Hannes Meyer
    
    November 1, 2009Modise Motloba (1) (3)
    
    July 30, 2004Cedric Savage(1) (3)
    
    September 23, 2003André Wilkens (1)
    
    August 7, 2007
 
 (1)
    
    Non-executive directors(2)
    
    Frank Abbott served as a non-executive director until August 20, 2007 and was appointed
interim financial director on August 21, 2007. Frank retired at the end of July 2010, and was
appointed as non-executive director on August 1 , 2010 .(3)
    
    Independent(4)
    
    Appointed lead independent director after June 30, 2010. Non-Executive Chairman
 Patrice Motsepe (48) BA (Legal), LLB. Avmin ARM
 Executive Directors
 Frank Abbott (55), BCom, CA (SA), MBL.
 Graham Briggs (57), BSc (Hons) (Geology), PrSciNat, Chief Executive Officer.
 Harry Ephraim Mashego Mashego (46), BA Ed, BA (Hons), GEDP, JMDP, Executive: Organizational
Development and Transformation.
 114




---



##### 



Hannes Meyer (40), CA (SA), BCom (Hons), Financial Director. TEAL
 Non-Executive Directors
 Joaquim Chissano (70), Non-Executive Director.
 Fikile De Buck (49), BA (Economics), FCCA (UK), Lead independent Non-Executive Director.
 Dr Cheick Diarra (58), PhD (Mechanical and Aerospace Engineering), Independent Non-Executive
Director.
 Ken Dicks (71), Mine Managers Certificates (Metalliferous and Fiery Coal Mines), Management
Development Diploma and Management Diploma, Independent Non-Executive Director.
 Dr Simo Lushaba (44), BSc (Hon), MBA and DBA, Independent Non-Executive Director.
 Cathie Markus (53), BA LLB, Independent Non-Executive Director.
 Modise Motloba (44), BSc, Diploma in Strategic Management, Independent Non-executive Director.
 115




---



##### 



Cedric Savage (71), BSc (Eng), MBA, ISMP (Harvard), Independent Non-executive Director.
 André Wilkens (61), Mine Managers Certificate of Competency, MDPA, RMIIA, Non-Executive
Director.
 Management
  Bob Atkinson (58), NHD (Metalliferous Mining), Executive: New Business and Projects.
 Jaco Boshoff (41), BSc (Hons), MSc (Geology), MBA, PrSciNat, Executive: Reserves and
Resources.
 Matthews Pheello Dikane (44), LLB, LLM (Labor Law), Postgraduate Diploma In Management
Practice, Postgraduate Diploma in Corporate Law, Executive: Legal and Compliance
 Leon le Roux (54), NHD (Mechanical and Electrical Engineering), Executive: Risk Management and
Engineering.
 Jackie Mathebula (40), B Admin Honours, MBA, Master of Management (MM, HR), Executive:
Corporate Affairs.
 Melanie Naidoo-Vermaak (36), MSc (Sustainable Development), Executive: Environment.
 116




---



##### 



Alwyn Pretorius (39), BSc Mining Engineering, BSc Industrial Engineering, Chief Operating
Officer: North Region.
 Tom Smith (54), NHD (Mine Surveying and Metalliferous Mining), Chief Operating Officer: South
Region.
 Marian van der Walt (37), BCom (Law), LLB, Higher Diploma in Tax, Diploma in Corporate
Governance, Diploma in Insolvency Law, Certificate in Business Leadership; Executive: Corporate and
Investor Relations.
 Johannes van Heerden (38), BCompt (Hons), CA(SA), Chief Executive Officer: South East Asia
 Abre van Vuuren (50), BComm, MDP, DPLR, Executive: Services. Grootvlei
 Board Practices
    117




---



##### 



Executive Management Committee
   Graham Briggs
    
    Chief Executive OfficerHannes Meyer
    
    Financial DirectorHarry Ephraim Mashego
    
    Executive Director: Organisational Development and TransformationFrank Abbott
    
    Executive Director (1)Bob Atkinson
    
    New Business and ProjectsJaco Boshoff
    
    Reserves and ResourcesJackie Mathebula
    
    Corporate AffairsAlwyn Petorius
    
    Chief Operating Officer North Operations South AfricaTom Smith
    
    Chief Operating Officer South Operations South AfricaMarian van der Walt
    
    Corporate and Investor RelationsJohannes van Heerden
    
    Chief Executive Officer: South East AsiaAbre van Vuuren
    
    Services (2)Leon le Roux
    
    Risk Management and Engineering (2)Melanie Naidoo-Vermaak
    
    EnvironmentMatthews Dikane
    
    Legal and Compliance
 
 (1)
    
    Frank Abbott retired as executive director on July 31, 2010 and was appointed
non-executive director on August 1, 2010.(2)
    
    In September 2010 Leon le Roux was deployed to the South East Asian operations and Risk
and Insurance were added to Abre van Vuurens portfolio. Audit Committee
 Members
  Cedric Savage
    
    Chairman; appointed to the committee on January 26, 2004
and chairman as from August 5, 2005Fikile De Buck
    
    Appointed to the committee on March 30, 2006Dr. Simo Lushaba
    
    Appointed to the committee on January 24, 2003Modise Motloba
    
    Appointed to the committee on July 30, 2004
  Frequency of meetings
  118




---



##### 



Purpose and function
     Independence/compliance
   Empowerment Committee
 Members
  Joaquim Chissano
    
    Chairman; appointed as chairman with effect from May 3, 2006Modise Motloba
    
    Appointed to the committee on May 3, 2006Cathie Markus
    
    Appointed to the committee on October 29, 2007
  Frequency of meetings
  Purpose and function
   119




---



##### 



Independence/compliance
  Investment Committee
 Members
  Dr. Simo Lushaba
    
    Chairman; appointed to the committee on January 26, 2004
and as Chairman with effect from August 5, 2005)Fikile De Buck
    
    Appointed to the committee on May 3, 2006Ken Dicks
    
    Appointed to the committee on February 13, 2008Cathie Markus
    
    Appointed to the committee on October 29, 2007Cedric Savage
    
    Appointed to the committee on January 26, 2004André Wilkens
    
    Appointed to the committee on August 7, 2007
  Frequency of meetings
  Purpose and function
  Independence/compliance
  Nomination Committee
 Members
  Patrice Motsepe
    
    Chairman; appointed to the committee on October 24, 2003Frank Abbott
    
    Appointed to the committee August 5, 2005Joaquim Chissano
    
    Appointed to the committee on May 3, 2006
  Frequency of meetings
  120




---



##### 



Purpose and function
  Independence/compliance
  Remuneration Committee
 Members
  Cedric Savage
    
    Chairman; appointed to the committee on January 24, 2004, and as chairman from May 3, 2006Simo Lushaba
    
    Appointed to the committee on August 5, 2005André Wilkens
    
    Appointed to the committee on August 7, 2007
  Frequency of meetings
  Purpose and function
   Independence/compliance
  121




---



##### 



Sustainable Development Committee
 Members
  Modise Motloba
    
    Chairman; appointed as chairman on August 5, 2005Joaquim Chissano
    
    Appointed to the committee on May 3, 2006Fikile De Buck
    
    Appointed to the committee on May 3, 2006
  Frequency of meetings
  Purpose and function
   Independence/compliance
  Technical Committee
 Members
  Andre Wilkens
    
    Chairman; appointed as chairman on January 22, 2008Fikile De Buck
    
    Appointed to the committee on July, 14, 2008Ken Dicks
    
    Appointed to the committee on February 13, 2008Modise Motloba
    
    Appointed to the committee on January 22, 2008Cedric Savage
    
    Appointed to the committee on January 22, 2008
  Frequency of meetings
  Purpose and function
  122




---



##### 



Independence/compliance
  Compensation of Directors and Senior Management
  RetirementContributionsDirectors
    
    Salaries and
    
    during
    
    Bonusesfee
    
    Benefits
    
    the year
    
    Paid
    
    Total($000)
    
    ($000)
    
    ($000)
    
    ($000)
    
    ($000)Name
    
    2010
    
    2010
    
    2010
    
    2010
    
    2010Non-executivePatrice Motsepe
    
    
    105
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    105Joaquim Chissano
    
    
    49
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49Fikile De Buck
    
    
    60
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    60Cheick Diarra
    
    
    20
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20Ken Dicks
    
    
    41
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41Dr Simo Lushaba
    
    
    49
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49Cathie Markus
    
    
    33
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33Modise Motloba
    
    
    63
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    63Cedric Savage
    
    
    85
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    85Andre Wilkens
    
    
    52
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    52ExecutiveGraham Briggs
    
    
    
    
    
    
    665
    
    
    
    
    
    
    
    206
    
    
    
    871Hannes Meyer (1)
    
    
    
    
    
    
    219
    
    
    
    
    
    
    
    19
    
    
    
    238Harry Ephraim Mashego (2)
    
    
    
    
    
    
    79
    
    
    
    7
    
    
    
    18
    
    
    
    104Frank Abbott
    
    
    
    
    
    
    365
    
    
    
    18
    
    
    
    68
    
    
    
    451TOTAL
    
    
    557
    
    
    
    1,328
    
    
    
    25
    
    
    
    311
    
    
    
    2,221
 
 1)
    
    November 2009 - June 2010 (appointed November 1, 2009)2)
    
    March 2010 to June 2010 (appointed February 24, 2010) Directors Terms of Employment
      123




---



##### 



Annual FeeBoard
    
    R 150,000 annually (US$19,800)Audit Committee
    
    R 75,000 annually (US$9,895)Empowerment Committee
    
    R 50,000 annually (US$6,596)Investment Committee
    
    R 50,000 annually (US$6,596)Nomination Committee
    
    R 50,000 annually (US$6,596)Remuneration Committee
    
    R 50,000 annually (US$6,596)Sustainable Development Committee
    
    R 65,000 annually (US$8,575)Technical Committee
    
    R 65,000 annually (US$8,575)Chairman of board
    
    R 700,000 annually (US$92,348)Chairman of board committees
    
    Double the amount that the individual
board committee member received annually
  Share Options
  AverageNumber of
    
    StrikeDirectors and
    
    Share
    
    Price
    
    ExpirationSenior Management
    
    Options
    
    (R)
    
    DatesGraham Briggs
    
    
    91,938
    
    
    
    48.55
    
    
    
    2014 - 2015Hannes Meyer
    
    
    
    
    
    
    
    
    
    
    Harry Ephraim Mashego
    
    
    
    
    
    
    
    
    
    
    Frank Abbott
    
    
    
    
    
    
    
    
    
    
    Senior Management (as a group)
    
    
    314,150
    
    
    
    52.67
    
    
    
    2013 - 2015Total
    
    
    406,088
    
    
    
    51.73
    
    
    
    2013 - 2015
  Shares issued in terms of the Harmony 2006 Share Plan
  PSDirectors and
    
    Share Appreciation
    
    Weighted
    
    Performance Shares
    
    Price
    
    ExpirationSenior Management
    
    Rights (SAR)
    
    SAR Price (R)
    
    (PS)
    
    (R)
    
    DatesGraham Briggs
    
    
    251,774
    
    
    
    78.09
    
    
    
    227,424
    
    
    
    
    
    
    
    2010 - 2015Hannes Meyer
    
    
    8,557
    
    
    
    77.28
    
    
    
    27,902
    
    
    
    
    
    
    
    2015Frank Abbott
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Harry Ephraim Mashego
    
    
    62,310
    
    
    
    74.81
    
    
    
    67,912
    
    
    
    
    
    
    
    2010 - 2015Senior management (as a group)
    
    
    658,891
    
    
    
    73.64
    
    
    
    656,063
    
    
    
    
    
    
    
    2010 - 2015
  Share Ownership
  124




---



##### 



OrdinaryOrdinary
    
    
    
    
    
    SharesShares Number
    
    
    
    
    
    Number as atas at
    
    
    
    
    
    OctoberHolder
    
    June 30, 2010
    
    Percentage
    
    18, 2010
    
    PercentageNon-executive chairmanPatrice Motsepe (1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Directors Non-executiveFikile De Buck
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Joaqium Chissano
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Dr Cheick Diarra
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Ken Dicks
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Dr. Simo Lushaba
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cathie Markus
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Modise Motloba
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cedric Savage
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    André Wilkens
    
    
    101,303
    
    
    
    (2)
    
    
    
    101,303
    
    
    
    (2)Executive DirectorsGraham Briggs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Hannes Meyer
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Frank Abbott
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Harry Ephraim Mashego
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Directors (14 persons)
    
    
    101,303
    
    
    
    
    
    
    
    101,303
    
    
    
    
 
 (1)
    
    Patrice Motsepe, our Chairman, has an indirect holding through ARM(2)
    
    Less than 1%. Employees
 General
  Harmony Employees at
    
    Outside Contractors atJune 30,
    
    June 30,2010
    
    2009
    
    2008
    
    2010
    
    2009
    
    2008South Africa
    
    
    35,788
    
    
    
    37,316
    
    
    
    40,751
    
    
    
    4,331
    
    
    
    4,962
    
    
    
    6,309International
    
    
    1,105
    
    
    
    979
    
    
    
    862
    
    
    
    1,373
    
    
    
    2,482
    
    
    
    846Grand total
    
    
    36,893
    
    
    
    38,295
    
    
    
    41,543
    
    
    
    5,704
    
    
    
    7,390
    
    
    
    7,155
  South Africa
  
    
    minimum conditions of employment (note there is no prescribed basic minimum wage, but
laws cover most aspects of employment, from hours of work to prohibitions on child labor);
    
    trade union access and membership;
    
    training and development;
    
    mandatory compensation in the event of termination for operational reasons;
 125




---



##### 




    
    affirmative action policies and programs;
    
    compensation for occupational illness and injury;
    
    mechanisms for collective bargaining;
    
    procedures for the resolution of disputes; and
    
    regulation of strikes and dismissals.
   NUM UASA
 NUM
    
    
    75
    %UASA
    
    
    9
    %Solidarity
    
    
    2
    %Collective Bargaining Fund
    
    
    2
    %Non-union
    
    
    12
    %
      126




---



##### 



ESOP
 Work Stoppages
   CCMA
 Women in mining
   Australia
  Papua New Guinea
   ERC MOA
 127




---



##### 



Long Term Incentive Schemes
  The 2001 and 2003 share option schemes
  Broad-Based Employee Share Scheme ( ESOP )
  The Harmony 2006 Share Plan
 the Plan
    inter alia
  Annual incentive scheme
   128




---



##### 



Item 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
 Major Shareholders
   Related Party Transactions.
  Number ofHolder
    
    Shares
    
    Percentage1. Bank of New York (1)
    
    
    114,814,698
    
    
    
    26.82. ARM Ltd. (2)
    
    
    63,632,922
    
    
    
    14.63. Allan Gray
    
    
    56,670,554
    
    
    
    13.34. Blackrock Investment Management (UK) Ltd.
    
    
    41,074,797
    
    
    
    9.6
 
 (
1)
    
    Depository with respect to the ADRs held on the U.S. register.(2)
    
    Patrice Motsepe, our Chairman, has an indirect holding in ARM Limited.  Capital Raising
   Related Party Disclosure and Transactions
     129




---



##### 



BEE Trust
 INTERESTS OF EXPERTS AND COUNSEL
  130




---



##### 



Item 8. FINANCIAL INFORMATION
 CONSOLIDATED STATEMENTS
 Item 18. Financial Statements
 Legal Proceedings
  Class Action
  ArcelorMittal South Africa Limited (ArcelorMittal)
  Dividends and Dividend Policy
   Recent Developments
 Closure of Merrespuit 1
  Sale of Mount Magnet Gold in Australia
  Dividends
  131




---



##### 



Merriespruit South region and Freegold option
 Wits Gold Freegold
  Evander 6 and Twistdraai
 Taung
 Closure of Merriespruit 1
  132




---



##### 



Item 9. THE OFFER AND LISTING
 Markets
 Stock Exchange Listings and Ticker Codes
  JSE Limited
    
    HARNew York Stock Exchange
    
    HMYLondon Stock Exchange
    
    HRMEuronext Brussels
    
    HMYBerlin Stock Exchange
    
    HAM1
 Offering and Listing Details
  Harmony OrdinaryShares(Rand per OrdinaryShare)High
    
    LowFiscal year ended June 30, 2008First Quarter
    
    
    104.05
    
    
    
    60.00Second Quarter
    
    
    83.05
    
    
    
    63.00Third Quarter
    
    
    118.50
    
    
    
    69.00Fourth Quarter
    
    
    104.41
    
    
    
    82.98Full Year
    
    
    118.52
    
    
    
    60.00Fiscal year ended June 30, 2009First Quarter
    
    
    97.00
    
    
    
    54.99Second Quarter
    
    
    103.75
    
    
    
    62.50Third Quarter
    
    
    129.50
    
    
    
    92.50Fourth Quarter
    
    
    104.40
    
    
    
    75.50Full Year
    
    
    129.50
    
    
    
    54.99Fiscal year ended June 30, 2010First Quarter
    
    
    87.51
    
    
    
    69.05Second Quarter
    
    
    87.00
    
    
    
    74.00Third Quarter
    
    
    80.77
    
    
    
    68.80Fourth Quarter
    
    
    81.40
    
    
    
    68.65Full Year
    
    
    87.51
    
    
    
    68.65Month ofJuly 2010
    
    
    81.10
    
    
    
    71.90August 2010
    
    
    80.50
    
    
    
    73.00September 2010
    
    
    83.80
    
    
    
    74.69As of October 18, 2010
    
    
    81.40
    
    
    
    76.80
  133




---



##### 



NYSE
    
    NASDAQHarmony ADRs
    
    Harmony ADRs($ per ADR)
    
    ($ per ADR)High
    
    Low
    
    High
    
    LowFiscal year ended June 30, 2008First Quarter
    
    
    15.27
    
    
    
    8.42
    
    
    
    15.27
    
    
    
    8.41Second Quarter
    
    
    11.90
    
    
    
    9.35
    
    
    
    11.90
    
    
    
    9.35Third Quarter
    
    
    14.56
    
    
    
    9.34
    
    
    
    14.56
    
    
    
    9.34Fourth Quarter
    
    
    13.20
    
    
    
    10.45
    
    
    
    13.20
    
    
    
    10.45Full Year
    
    
    15.27
    
    
    
    8.42
    
    
    
    15.27
    
    
    
    8.74Fiscal year ended June 30, 2009First Quarter
    
    
    12.51
    
    
    
    6.39
    
    
    
    12.47
    
    
    
    6.40Second Quarter
    
    
    10.97
    
    
    
    5.58
    
    
    
    10.97
    
    
    
    5.54Third Quarter
    
    
    13.06
    
    
    
    9.12
    
    
    
    13.07
    
    
    
    9.13Fourth Quarter
    
    
    12.10
    
    
    
    8.17
    
    
    
    12.03
    
    
    
    8.20Full Year
    
    
    13.06
    
    
    
    5.58
    
    
    
    13.07
    
    
    
    5.54Fiscal year ended June 30, 2010First Quarter
    
    
    11.75
    
    
    
    8.50
    
    
    
    11.78
    
    
    
    8.50Second Quarter
    
    
    11.98
    
    
    
    9.73
    
    
    
    11.94
    
    
    
    9.74Third Quarter
    
    
    11.11
    
    
    
    8.79
    
    
    
    11.10
    
    
    
    8.81Fourth Quarter
    
    
    10.57
    
    
    
    9.04
    
    
    
    10.54
    
    
    
    9.03Full Year
    
    
    11.98
    
    
    
    8.50
    
    
    
    11.94
    
    
    
    8.50Month ofJuly 2010
    
    
    10.71
    
    
    
    9.72
    
    
    
    n/a
    
    
    
    n/aAugust 2010
    
    
    11.02
    
    
    
    9.95
    
    
    
    n/a
    
    
    
    n/aSeptember 2010
    
    
    11.74
    
    
    
    10.10
    
    
    
    n/a
    
    
    
    n/aAs of October 18, 2010
    
    
    11.87
    
    
    
    11.20
    
    
    
    n/a
    
    
    
    n/a
  The Securities Exchange in South Africa
    History
  SENS STRATE
 134




---



##### 



STRATE Settlement
  PLAN OF DISTRIBUTION
  SELLING SHAREHOLDERS
  DILUTION
  EXPENSES OF THE ISSUE
  135




---



##### 



Item 10. ADDITIONAL INFORMATION
 Memorandum and Articles of Association
 This section summarizes certain material provisions of Harmonys Memorandum and Articles of
Association, the Companies Act and the JSE listings requirements, each as currently in effect.
These descriptions do not purport to be complete and are qualified in their entirety by reference
to all of the provisions of those sources. Directions on how to obtain a complete copy of Harmonys
Articles of Association are provided under  Documents on Display below.
 General
 Item 4 Information on the
Company Regulation
 Objects and Purposes
  
    
    to acquire by purchase, cession, grant, lease, exchange or otherwise any movable or
immovable property, mines, mineral property, claims, mineral rights, mining rights, mining
leases, mining titles, mynpachts, lands, farms, buildings, water rights, concessions, grants,
rights, powers, privileges, surface rights of every description, servitudes or other limited
rights or interests in land and mineral contracts of every description; and any interest
therein and rights over the same; and to enter into any contract, option or prospecting
contract in respect thereof, and generally to enter into any arrangement that may seem
conducive to our objects or any of them;
    
    to carry out all forms of exploration work and in particular to search for, prospect,
examine, explore and obtain information in regard to mines, mineral properties, claims,
mineral rights, mining rights, mining leases, mining titles, mynpachts, mining districts or
locations and ground and soil supposed to contain or containing precious stones, minerals or
metals of every description;
    
    to open, work, develop and maintain gold, silver, diamond, copper, coal, iron and other
mines, mineral and other rights, properties and works, and to carry on and conduct the
business of raising, crushing, washing, smelting, reducing and amalgamating ores, metals,
minerals and precious stones, and to render the same merchantable and fit for use and to
carry on all or any of the businesses of miners, mineralogists, metallurgists, amalgamators,
geophysicists, smelters, quarry owners, quarrymen and brickmakers;
    
    to buy, sell, refine and deal in bullion, specie, coin and precious and base metals, and
also precious stones and other products of mining; and
    
    to employ and pay mining experts, agents and other persons, partnerships, companies or
corporations, and to organize, equip and dispatch expeditions for prospecting, exploring,
reporting on, surveying, working and developing lands, farms, districts, territories and
properties in any part of the world, whether the same are our property or otherwise.
 Directors
 Disclosure of Interests
  
    
    any arrangement for giving the director a security or indemnity in respect of money lent,
or an obligation undertaken, by such director for our benefit;
    
    any arrangement by which we give any security to a third party in respect of our debt or
obligation for which the director himself or herself has assumed responsibility, in whole or
in part, whether under a guarantee or indemnity or by the deposit of a security;
 136




---



##### 




    
    any contract by the director to subscribe for or underwrite our shares or debentures;
    
    any contract or arrangement with a company other than us, in which the director holds or
controls, directly or indirectly, no more than 1% of shares representing either (i) any class
of the equity share capital of that company or (ii) the overall voting rights of that
company; or
    
    any retirement scheme or fund which relates to both directors and to employees (or a class
of employees) and does not accord to any director, as such, any privilege or advantage not
generally accorded to the employees to which such scheme or fund relates.
    Compensation
  Borrowing Powers
   Rotation
   137




---



##### 



Qualifications
  Share Capital
  Description of Ordinary Shares
 This section summarizes the material provisions of Harmonys ordinary shares as set out in
Harmonys Memorandum and Articles of Association, the Companies Act and the JSE listings
requirements, each as currently in effect. It does not purport to be complete and is qualified in
its entirety by reference to all of the provisions of those sources.
 Dividends
     138




---



##### 



Voting Rights
  Distribution of Assets on Liquidation
  Redemption/Purchase of Shares
     139




---



##### 



Issue of Additional Shares and Pre-emptive Rights
   
    
    pursuant to an employee share incentive scheme the terms of which have been approved by the
holders of the relevant class of shares in a general meeting;
    
    for the acquisition of an asset, provided that if the issue is more than 30% of the
companys issued share capital, a simple majority of holders of ordinary shares present and
voting, must vote in favor of the acquisition;
    
    to raise cash by way of a general issue in the discretion of the directors (but not to
related parties) of up to 15% of the issued share capital in any one fiscal year at an issue
price with a discount not exceeding 10% of the 30-day weighted average trading price prior to
the determination date, provided that the holders of ordinary shares, present and voting at a
general meeting, must approve the granting of such authority to the directors by a 75% vote;
or
    
    to raise cash by way of a specific issue of a specified number or a maximum number of
 shares for cash provided that the holders of ordinary shares, other than controlling
shareholders, present and voting, vote in favor of the resolution to issue the shares at a
general meeting by a 75% vote. In terms of JSE listings requirements, the circular to be sent
to all shareholders informing them of the general meeting must include, inter alia:
    
    details of the persons to whom the shares are to be issued if such persons fall into the
following categories or other categories identified by the JSE: directors of the company or
its subsidiaries or their associates; trustees of employee or directors share scheme or
pension funds; any person having the right to nominate directors of the company; and certain
shareholders holding more than 10% of the issued share capital;
    
    if the persons to whom the shares are to be issued are related parties, an independent
experts opinion that the issue price is fair and reasonable; and
    
    should the maximum size of the issue equal or exceed 30% of the companys issued share
capital, full listing particulars, which include, inter alia, a reporting accountants report
and, in the case of a mining company, a competent persons report setting out technical
details of the companys operations and assets.
 Transfer of Shares
   Rights of Minority Shareholders and Fiduciary Duties
   140




---



##### 



Variation of Rights
 pari passu
 Changes in Capital or Objects and Powers of Harmony
  
    
    increase our authorized or paid-up share capital;
    
    consolidate and divide all or any part of our shares into shares of a larger amount;
    
    increase the number of our no par value shares without an increase of our stated capital;
    
    sub-divide all or any part of our shares having a par value;
    
    convert all of our ordinary or preference share capital consisting of shares having a par
value into stated capital constituted by shares of no par value and vice versa;
    
    convert our stated capital constituted by ordinary or preference shares of no par value
into share capital consisting of shares having a par value;
    
    vary the rights attached to any shares whether issued or not yet issued;
    
    convert any of our issued or unissued shares into shares of another class;
    
    convert any of our paid-up shares into stock, and reconvert any stock into any number of
paid-up shares of any denomination;
    
    convert any of our issued shares into preference shares which can be redeemed;
    
    cancel shares which, at the date of passing of the resolution, have not been taken or
agreed to be taken by any person, and diminish the amount of the authorized share capital by
the amount of the shares so cancelled; or
    
    reduce the authorized share capital.We may by ordinary resolution:
    
    reduce our issued share capital;
    
    reduce our stated capital; or
    
    reduce our capital redemption reserve fund and share premium account.
 141




---



##### 



Meetings of Shareholders
   
    
    to every member of Harmony except any member who has not supplied to Harmony a registered
address for the giving of notices;
    
    to every person entitled to a share in consequence of the death or insolvency of a member;
    
    to the directors and auditor for the time being of Harmony; and
    
    by advertisement to the holders of share warrants to bearer.
    
    
    the consideration of the annual financial statements and report of the auditors;
    
    the election of directors;
    
    the appointment of auditors; and
    
    any business arising from the annual financial statements considered at the meeting.
  142




---



##### 



Title to Shares
  
    
    that the registered holder or holders hold such shares upon trust for, or as the nominee
of, any other person; or
    
    that any person, other than the registered holder or holders, holds any contingent, future
or partial interest in such shares or any interest in any fractional part of any of such
 shares.
   Non-South African Shareholders
  Disclosure of Interest in Shares
  Changes in Control
  Register of Members
   
    
    the names and address of the members;
 143




---



##### 




    
    the shares held by each member, distinguishing each share by its denoting number, if any,
by its class or kind, and by the amount paid or deemed to be paid thereon;
    
    the date on which the name of any person was entered in the register as a member; and
    
    the date on which any person ceased to be a member.
 Annual Report and Accounts
    Material Contracts
 Item 4.
Information on the Company  Business Item 5. Operating and Financial Review and Prospects  Liquidity and Capital
Resources
 Exchange Controls
 Introduction
  SARB
     144




---



##### 



Government Regulatory Considerations
 Shares
   Loans
   Investments
  Dividends
    Certain South African Tax Considerations
 U.S. Treaty
 145




---



##### 



Dividends
 STC
  Capital Gains Tax
 CGT
  
    
    80% or more of the market value of the equity shares at the time of disposal thereof
is attributable directly or indirectly to immovable property held otherwise than as
trading stock; and
    
    The person directly or indirectly holds at least 20% of the equity share capital of
that company.
  Security Transfer Tax
 STT
    146




---



##### 



Interest
  Capitalization Shares
  Voting Rights
  Certain United States Federal Income Tax Considerations
   
    
    an individual who is a citizen or resident of the United States;
    
    a U.S. domestic corporation, or other entity treated as a domestic corporation for U.S.
federal income tax purposes;
    
    an estate whose income is subject to U.S. federal income tax regardless of its source; or
    
    a trust if a U.S. court can exercise primary supervision over the trusts administration
and one or more U.S. persons are authorized to control all substantial decisions of the
trust.
      147




---



##### 



Taxation of Dividends
     Capital Gains
   transfer or withdrawal of ordinary shares as described
under  Certain South African Tax Considerations  Security Transfer Tax
 148




---



##### 



Medicare Tax on Unearned Income
  Non-U.S. Holders
   PFIC Rules
   
    
    at least 75% of our gross income for the taxable year is passive income; or
    
    at least 50% of the value, determined on the basis of a quarterly average, of our assets is
attributable to assets that produce or are held for the production of passive income.
   
    
    any gain you realize on the sale or other disposition of your ordinary shares; and
    
    any excess distribution that we make to you (generally, any distributions to you during a
single taxable year that are greater than 125% of
 149




---



##### 



the average annual distributions received by you in respect of the ordinary shares
during the three preceding taxable years or, if shorter, your holding period for the ordinary
 shares).Under these rules:
    
    the gain or excess distribution will be allocated ratably over your holding period for the
ordinary shares;
    
    the amount allocated to the taxable year in which you realized the gain or excess
distribution will be taxed as ordinary income;
    
    the amount allocated to each prior year, with certain exceptions, will be taxed at the
highest tax rate 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 each such year.
     U.S. Information Reporting and Backup Withholding Rules
  Recently Enacted Legislation Related to Disclosure of Information with Respect to Foreign Financial
Assets
  THE PRECEDING DISCUSSION OF CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES IS INTENDED
FOR GENERAL INFORMATION ONLY AND DOES NOT CONSTITUTE TAX ADVICE. ACCORDINGLY, EACH INVESTOR SHOULD
CONSULT ITS OWN TAX ADVISER AS TO PARTICULAR TAX CONSEQUENCES TO IT OF PURCHASING, HOLDING AND
DISPOSING OF THE ORDINARY SHARES, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL OR
FOREIGN LAWS, AND PROPOSED CHANGES IN APPLICABLE LAWS
 150




---



##### 



DIVIDENDS AND PAYING AGENTS
  STATEMENTS BY EXPERTS
  DOCUMENTS ON DISPLAY
  
 www.sec.gov.
 SUBSIDIARY INFORMATION
  151




---



##### 



Item 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 General
    
    
    in the case of a hedge of an anticipated future transaction, there is a high probability
that the transaction will occur.
 Foreign Currency Sensitivity
  Item 3. Key Information  Exchange
Rates and Item 3. Key Information  Risk Factors  Because most of Harmonys production costs
are in Rand and other non-U.S. currencies, while gold is generally sold in U.S. dollars, Harmonys
financial condition could be materially harmed by an appreciation in the value of the Rand and
other non-U.S. currencies.
  Commodity Price Sensitivity
 General
  Item 3. Key Information  Risk Factors  The
profitability of Harmonys operations, and the cash flows generated by those operations, are
affected by changes in the market price for gold, which in the past has fluctuated widely.
 Harmonys Hedging Policy
 Item 4. Information on the Company  Business  Hedge
Policy.
 Commodity Sales Agreements
  152




---



##### 



Interest Rate Sensitivity
  Sensitivity analysis
  June 30,2010
    
    
    2009
    
    
    2008($ in millions)Increase in 100 basis points
    
    
    2
    
    
    
    
    
    
    
    3Decrease in 100 basis points
    
    
    (2
    )
    
    
    
    
    
    
    (3
    )
   153




---



##### 



Item 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
  154




---



##### 



GLOSSARY OF MINING TERMS
 The following explanations are not intended as technical definitions, but rather are intended to
assist the general reader in understanding certain terms as used in this annual report.
 Alluvial:
 Arenaceous:
 Auriferous:
 Beneficiation:
 By-products
 Calc-silicate rock
 Carbon in leach (CIL)
 Carbon In Pulp (CIP):
 Carbon In Solution (CIS):
 Cash cost:
 Conglomerate:
 Crosscut:
 Cut and fill:
 Cut-off grade:
 Cyanide leaching:
 Decline:
 Deferred Stripping:
 Depletion:
 Development:
 155




---



##### 



Electro-winning:
 Elution:
 Exploration:
 Fabricated gold:
 Fatal injury frequency rate:
 Fluvial:
 Footwall:
 Forward purchase:
 Forward sale:
 Gold reserves:
 Gold lease rate swap:
 Grade:
 Greenfield:
 Greenstone:
 Grinding:
 Head grade:
 Heap leaching:
 Leaching:
 Level:
 Littoral:
 Longhole sub-level caving:
 Lost time injury frequency rate:
 156




---



##### 



Measures:
 Metric unit
    
    
    
    U.S. equivalent1 tonne
    
    = 1 t
    
    = 1.10231 short tons1 gram
    
    = 1 g
    
    = 0.03215 ounces1 gram per tonne
    
    = 1 g/t
    
    = 0.02917 ounces per short ton1 kilogram per tonne
    
    = 1 kg/t
    
    = 29.16642 ounces per short ton1 kilometer
    
    = 1 km
    
    = 0.621371 miles1 meter
    
    = 1 m
    
    = 3.28084 feet1 centimeter
    
    = 1 cm
    
    = 0.3937 inches1 millimeter
    
    = 1 mm
    
    = 0.03937 inches1 hectare
    
    = 1 ha
    
    = 2.47105 acres
 Metallurgical plant:
 Mill delivered tons:
 Milling/mill:
 Mineable:
 Mineralization:
 Mineralized material:
 Morphology:
 Open-pit/Open cast/Open cut:
 Ore:
 Ore grade:
 Mineral reserves:
 
    
    development of additional reserves;
    
    depletion of existing reserves through production;
    
    actual mining experience; and
    
    price forecasts.
  Orebody:
 Ounce:
 Overburden:
 Overburden tons:
 157




---



##### 



Palaeotopography:
 Pay limit:
 Placer:
 Precipitate:
 Probable reserves:
 Prospect:
 Prospecting license:
 Proven reserves:
 Pyrite:
 Quartz:
 Recovery grade:
 Reef:
 Refining:
 Rehabilitation:
 Sampling:
 Shaft:
 Slimes:
 Slurry:
 Smelting:
 Spot price:
 Stockpile:
 Stockwork:
 Stope:
 158




---



##### 



Stripping:
 Sulphide:
 Syncline:
 Tailings:
 Tailings dam (slimes dam)
 Ton:
 Tonnage:
 Tonne:
 Trend:
 Unconformity:
 Waste:
 Waste rock:
 Yield:
 Zinc precipitation:
 159




---



##### 



PART II
 
 Item 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
  160




---



##### 



Item 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
 MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS
    USE OF PROCEEDS
  161




---



##### 



Item 15. DISCLOSURE CONTROLS AND PROCEDURES
 (a) Disclosure Controls and Procedures
 CEO CFO
 (b) Managements Annual Report on Internal Control over Financial Reporting
   Internal Control  Integrated Framework COSO
  (c) Attestation Report of the Registered Public Accounting Firm
  (d) Changes in Internal Control over Financial Reporting
  162




---



##### 



Item 16A. AUDIT COMMITTEE FINANCIAL EXPERT
  Item 7. Directors and
Management  Board Practices  Audit Committee.
 
 Item 16B. CODE OF ETHICS
  163




---



##### 



Item 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
 AUDIT FEES
  Fiscal year ended June 30, 2009
    
    US$1.631 millionFiscal year ended June 30, 2010
    
    US$2.128 million
 AUDIT-RELATED FEES
  Fiscal year ended June 30, 2009
    
    US$0.331 millionFiscal year ended June 30, 2010
    
    US$0.413 million
  TAX FEES
  Fiscal year ended June 30, 2009
    
    US$0.038 millionFiscal year ended June 30, 2010
    
    US$0.107 million
  ALL OTHER FEES
  Fiscal year ended June 30, 2009
    
    US$0.300 millionFiscal year ended June 30, 2010
    
    US$0.066 million
 AUDIT COMMITTEE APPROVAL
  
 Item 16D. EXEMPTIONS FROM LISTING STANDARDS FOR AUDIT COMMITTEES
  
 Item 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
  
 Item 16F. CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT
  164




---



##### 



Item 16G. CORPORATE GOVERNANCE
 Significant ways in which Harmonys corporate governance practices differ from practices
followed by publicly-listed US companies.
       165




---



##### 



PART III
 
 Item 17. FINANCIAL STATEMENTS
  166




---



##### 



Item 18. FINANCIAL STATEMENTS
 Financial Statements
  167




---



##### 



Item 19. EXHIBITS
 1.1
    
    Memorandum of Association of Harmony, as amended (incorporated by reference to Harmonys Registration
Statement (file no. 333-13516) on Form F-3 filed on June 21, 2001).1.2
    
    Articles of Association of Harmony, as amended (incorporated by reference to Harmonys Annual Report on
Form 20-F for the fiscal year ended June 30, 2005, filed on November 3, 2005).*2.1
    
    Notice to shareholders dated
October 26, 2009 in respect of the Annual General Meeting held on
November 23, 2009.2.2
    
    Deposit Agreement among Harmony, 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 September 15, 1998 (incorporated by reference to Post-Effective Amendment No. 1
to Harmonys Registration Statement (file no. 333-5410) on Form F-6 filed on May 17, 2001).2.3
    
    Form of ADR (included in Exhibit 2.2).4.1
    
    Harmony (2003) Share Option Scheme, as amended (incorporated by reference to Harmonys Annual Report on
Form 20-F for the fiscal year ended June 30, 2005, filed on November 3, 2005).4.2
    
    Harmony 2006 Share Scheme (incorporated by reference to Harmonys Annual Report on Form 20-F for the fiscal
year ended June 30, 2007, filed on December 7, 2007).4.3
    
    Draw Down Facility Agreement with Westpac Bank dated June 27, 2007 (incorporated by reference to Harmonys
Annual Report on Form 20-F for the fiscal year ended June 30, 2007, filed on December 7, 2007).4.4
    
    Sale Agreement with Randfontein Estates Limited, Clidet No. 726 (Proprietary) Limited and Clidet No. 770
(Proprietary) Limited dated December 18, 2007 (incorporated by reference to Harmonys Annual Report on Form
20-F for the fiscal year ended June 30, 2008, filed on October 29, 2008).4.5
    
    Shareholders Agreement between ARMGold/Harmony Joint Investment Company (Proprietary) Limited, Clidet No.
770 (Proprietary) Limited and Clidet No. 726 (Proprietary) Limited dated December 18, 2007 (incorporated by
reference to Harmonys Annual Report on Form 20-F for the fiscal year ended June 30, 2008, filed on October
29, 2008).4.6
    
    Sale of Shares and Claim Agreement with Randfontein Estates Limited, ARMGold/Harmony Joint Investment
Company (Proprietary) Limited and Clidet No. 770 (Proprietary) Limited dated December 18, 2007
(incorporated by reference to Harmonys Annual Report on Form 20-F for the fiscal year ended June 30, 2008,
filed on October 29, 2008).4.7
    
    Deed of Extinguishment of Royalty (Hidden Valley Project) dated May June 11, 2008 (incorporated by
reference to Harmonys Annual Report on Form 20-F for the fiscal year ended June 30, 2008, filed on October
29, 2008).4.8
    
    Senior Facility Agreement with Nedbank Limited dated September 28, 2007 (incorporated by reference to
Harmonys Annual Report on Form 20-F for the fiscal year ended June 30, 2008, filed on October 29, 2008).4.9
    
    Master Lease Facility Agreement between Morobe Consolidated Goldfields Limited and Westpac Bank PNG Limited
(Hidden Valley Project) dated June 14, 2007 (incorporated by reference to Harmonys Annual Report on Form
20-F for the fiscal year ended June 30, 2008, filed on October 29, 2008).4.10
    
    Deed of Extinguishment of Royalty (Wafi-Golpu Project) dated February 16, 2009.4.11
    
    Master Purchase and Farmin Agrement dated May 22, 2008 between Morobe Consolidated Goldfields Limited, Wafi
Mining Limited, Morobe Exploration Limited, Newcrest PNG 1 Limited, Newcrest PNG 2 Limited and Newcrest PNG
1 Limited.4.12
    
    Hidden Valley Joint Venture Agreement dated May 22, 2008 between Morobe Consolidated Goldfields Limited,
Newcrest PNG 1 Limited and Hidden Valley Services Limited.4.13
    
    Master Co-operation Agreement dated on or about August 5, 2008 between Hidden Valley Services Limited,
Wafi-
 168




---



##### 



Golpu Services Limited, Morobe Exploration Services Limited, Harmony Gold (PNG Services) Pty Limited
and Newcrest Mining Limited.*4.14
    
    Administration Expenses Agreement dated August 11, 2009 between Pamodzi Gold Free State (Proprietary)
Limited (in provisional liquidation) and Harmony Gold Mining Company Limited*4.15
    
    Sale of Assets Agreement (South) dated September 8, 2009 between Pamodzi Gold Free State (Proprietary)
Limited (in provisional liquidation) and Harmony Gold Mining Company Limited*4.16
    
    Sale of Assets Agreement (Waste Rock Dump) dated September 8, 2009 between Pamodzi Gold Free State
(Proprietary) Limited (in provisional liquidation) and Avgold Limited*4.17
    
    Sale of Assets Agreement (North) dated September 8, 2009 between Pamodzi Gold Free State (Proprietary)
Limited (in provisional liquidation), Avgold Limited and Harmony Gold Mining Company Limited*4.18
    
    Sale of Assets Agreement (Plant) dated September 8, 2009 between Pamodzi Gold Free State (Proprietary)
Limited (in provisional liquidation) and Harmony Gold Mining Company Limited*4.19
    
    Facilities Agreement dated December 11, 2009 between Nedbank Limited, Harmony Gold Mining Company Limited
and the Guarantors listed in Schedule 2*4.20
    
    Amended and Restated Sale Agreement dated March 18, 2010 between Harmony Gold Mining Company Limited,
Africa Vanguard Resources (Doornkop) (Proprietary) Limited and Randfontein Estates Limited8.1
    
    Significant subsidiaries of Harmony Gold Mining Company Limited (incorporated by reference to Harmonys
Annual Report on Form 20-F for the fiscal year ended June 30, 2009, filed on October 26, 2009).*12.1
    
    Certification of the principal executive officer required by Rule 13a-14(a) or Rule 15(d)-14(a), pursuant
to Section 302 of the Sarbanes Oxley Act of 2002.*12.2
    
    Certification of the principal financial officer required by Rule 13a-14(a) or Rule 15(d)-14(a), pursuant
to Section 302 of the Sarbanes Oxley Act of 2002.*13.1
    
    Certification of the principal executive officer, pursuant to Section 906 of the Sarbanes Oxley Act of 2002.*13.2
    
    Certification of the principal financial officer, pursuant to Section 906 of the Sarbanes Oxley Act of 2002.
 
 *
    
    Filed herewith 169




---



##### 



SIGNATURE
  HARMONY GOLD MINING COMPANY LIMITEDBy:
    /s/ Graham BriggsGraham BriggsChief Executive OfficerDate: October 25, 2010 170




---



##### 



Index to Financial Statements
 PageHarmony Gold Mining Company LimitedReport of the Independent Registered Public Accounting Firm
    
    
    F-2Consolidated Income Statements for the years ended June 30, 2010, 2009 and 2008
    
    
    F-3Consolidated Statements of Other Comprehensive Income for the years ended June 30, 2010, 2009 and 2008
    
    
    F-4Consolidated Balance Sheets at June 30, 2010 and 2009
    
    
    F-5Consolidated Statements of Changes in Shareholders Equity for the years ended June 30, 2010, 2009 and 2008
    
    
    F-6Consolidated Cash Flow Statements for the years ended June 30, 2010, 2009 and 2008
    
    
    F-7Notes to the Consolidated Financial Statements
    
    
    F-8
 F-1




---



##### 



Report of Independent Registered Public Accounting Firm
     PricewaterhouseCoopers Inc
 F-2




---



##### 



Consolidated income statements
  US DollarFigures in million
    
    Note
    
    
    2010
    
    
    2009 *
    
    
    2008 *Continuing operationsRevenue
    
    
    
    
    
    
    1,489
    
    
    
    1,277
    
    
    
    1,269Cost of sales
    
    
    5
    
    
    
    (1,383
    )
    
    
    (1,083
    )
    
    
    (1,122
    )Production costs
    
    
    
    
    
    
    (1,103
    )
    
    
    (850
    )
    
    
    (918
    )Amortization and depreciation
    
    
    
    
    
    
    (181
    )
    
    
    (139
    )
    
    
    (117
    )Impairment of assets
    
    
    
    
    
    
    (43
    )
    
    
    (71
    )
    
    
    (40
    )Employment termination and restructuring costs
    
    
    
    
    
    
    (27
    )
    
    
    (4
    )
    
    
    (29
    )Other items
    
    
    
    
    
    
    (29
    )
    
    
    (19
    )
    
    
    (18
    )Gross profit
    
    
    
    
    
    
    106
    
    
    
    194
    
    
    
    147Corporate, administration and other expenditure
    
    
    
    
    
    
    (50
    )
    
    
    (36
    )
    
    
    (30
    )Social investment expenditure
    
    
    
    
    
    
    (11
    )
    
    
    (4
    )
    
    
    (1
    )Exploration expenditure
    
    
    
    
    
    
    (29
    )
    
    
    (29
    )
    
    
    (28
    )Profit on sale of property, plant and equipment
    
    
    6
    
    
    
    14
    
    
    
    114
    
    
    
    Other expenses  net
    
    
    7
    
    
    
    (8
    )
    
    
    (3
    )
    
    
    (15
    )Operating profit
    
    
    8
    
    
    
    22
    
    
    
    236
    
    
    
    73Profit/(loss) from associates
    
    
    21
    
    
    
    7
    
    
    
    1
    
    
    
    (11
    )Impairment of investment in associate
    
    
    21
    
    
    
    
    
    
    
    (14
    )
    
    
    (12
    )Loss on sale of investment in subsidiary
    
    
    9
    
    
    
    (3
    )
    
    
    
    
    
    
    Net gain/(loss) on financial instruments
    
    
    10
    
    
    
    5
    
    
    
    (10
    )
    
    
    (58
    )Investment income
    
    
    11
    
    
    
    25
    
    
    
    49
    
    
    
    39Finance cost
    
    
    12
    
    
    
    (32
    )
    
    
    (24
    )
    
    
    (70
    )Profit/(loss) before taxation
    
    
    
    
    
    
    24
    
    
    
    238
    
    
    
    (39
    )Taxation
    
    
    13
    
    
    
    (44
    )
    
    
    (22
    )
    
    
    (65
    )Net (loss)/profit from continuing operations
    
    
    
    
    
    
    (20
    )
    
    
    216
    
    
    
    (104
    )Discontinued operations(Loss)/profit from discontinued operations
    
    
    14
    
    
    
    (4
    )
    
    
    95
    
    
    
    74Net (loss)/profit
    
    
    
    
    
    
    (24
    )
    
    
    311
    
    
    
    (30
    )Attributable to:Owners of the parent
    
    
    
    
    
    
    (24
    )
    
    
    311
    
    
    
    (30
    )Non-controlling interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (Loss)/earnings per ordinary share (cents):
    
    
    15(Loss)/earnings from continuing operations
    
    
    
    
    
    
    (5
    )
    
    
    52
    
    
    
    (26
    )(Loss)/earnings from discontinued operations
    
    
    
    
    
    
    (1
    )
    
    
    23
    
    
    
    18Total (loss)/earnings for the period
    
    
    
    
    
    
    (6
    )
    
    
    75
    
    
    
    (8
    )Diluted (loss)/earnings per ordinary share (cents):
    
    
    15(Loss)/earnings from continuing operations
    
    
    
    
    
    
    (5
    )
    
    
    51
    
    
    
    (26
    )(Loss)/earnings from discontinued operations
    
    
    
    
    
    
    (1
    )
    
    
    23
    
    
    
    18Total diluted (loss)/earnings for the period
    
    
    
    
    
    
    (6
    )
    
    
    74
    
    
    
    (8
    )
 *
    
    The comparative periods have been re-presented for a change in discontinued operations. Refer to note 14.  F-3




---



##### 



Consolidated statements of other comprehensive income
  US DollarFigures in million
    
    Note
    
    
    2010
    
    
    2009
    
    
    2008Net (loss)/profit for the year
    
    
    
    
    
    
    (24
    )
    
    
    311
    
    
    
    (30
    )Other comprehensive income/(loss) for the year, net
of income tax
    
    
    
    
    
    
    25
    
    
    
    111
    
    
    
    (204
    )Foreign exchange translation
    
    
    26
    
    
    
    25
    
    
    
    105
    
    
    
    (246
    )Fair value movement of available-for-sale investments
    
    
    26
    
    
    
    
    
    
    
    6
    
    
    
    42Total comprehensive income/(loss) for the year
    
    
    
    
    
    
    1
    
    
    
    422
    
    
    
    (234
    )Attributable to:Owners of the parent
    
    
    
    
    
    
    1
    
    
    
    422
    
    
    
    (234
    )Non-controlling interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
  F-4




---



##### 



Consolidated balance sheets
 US DollarFigures in million
    
    Note
    
    
    2010
    
    
    2009AssetsNon-current assetsProperty, plant and equipment
    
    
    16
    
    
    
    3,874
    
    
    
    3,614Intangible assets
    
    
    17
    
    
    
    290
    
    
    
    288Restricted cash
    
    
    18
    
    
    
    19
    
    
    
    21Restricted investments
    
    
    19
    
    
    
    228
    
    
    
    212Investment in financial assets
    
    
    20
    
    
    
    2
    
    
    
    7Investment in associates
    
    
    21
    
    
    
    50
    
    
    
    43Deferred tax asset
    
    
    13
    
    
    
    246
    
    
    
    222Inventories
    
    
    23
    
    
    
    28
    
    
    
    Trade and other receivables
    
    
    24
    
    
    
    10
    
    
    
    10Total non-current assets
    
    
    
    
    
    
    4,747
    
    
    
    4,417Current assetsInventories
    
    
    23
    
    
    
    129
    
    
    
    134Trade and other receivables
    
    
    24
    
    
    
    122
    
    
    
    115Income and mining taxes
    
    
    
    
    
    
    10
    
    
    
    6Cash and cash equivalents
    
    
    
    
    
    
    101
    
    
    
    253362
    
    
    
    508Assets of disposal groups classified as held for sale
    
    
    14
    
    
    
    32
    
    
    
    Total current assets
    
    
    
    
    
    
    394
    
    
    
    508Total assets
    
    
    
    
    
    
    5,141
    
    
    
    4,925Equity and liabilitiesShare capital and reservesShare capital
    
    
    25
    
    
    
    4,027
    
    
    
    4,004Other reserves
    
    
    26
    
    
    
    (40
    )
    
    
    (72
    )Accumulated loss
    
    
    
    
    
    
    (159
    )
    
    
    (108
    )Total equity
    
    
    
    
    
    
    3,828
    
    
    
    3,824Non-current liabilitiesDeferred tax
    
    
    13
    
    
    
    709
    
    
    
    643Provision for environmental rehabilitation
    
    
    27
    
    
    
    222
    
    
    
    198Retirement benefit obligation and other provisions
    
    
    28
    
    
    
    22
    
    
    
    22Borrowings
    
    
    29
    
    
    
    129
    
    
    
    14Total non-current liabilities
    
    
    
    
    
    
    1,082
    
    
    
    877Current liabilitiesBorrowings
    
    
    29
    
    
    
    27
    
    
    
    33Income and mining taxes
    
    
    
    
    
    
    1
    
    
    
    2Trade and other payables
    
    
    30
    
    
    
    185
    
    
    
    189213
    
    
    
    224Liabilities of disposal groups classified as held for sale
    
    
    14
    
    
    
    18
    
    
    
    Total current liabilities
    
    
    
    
    
    
    231
    
    
    
    224Total equity and liabilities
    
    
    
    
    
    
    5,141
    
    
    
    4,925
  F-5




---



##### 



Consolidated statements of changes in shareholders equity
 Number ofordinary
    
    
    
    
    
    Share
    
    
    Accumulated
    
    
    Othershares issued
    
    

Share capital
    
    
    premium
    
    
    loss
    
    
    reserves
    
    
    TotalFigures in million (US Dollar)Note
    
    
    
    
    
    
    25
    
    
    
    
    
    
    
    
    
    
    
    26Balance  June 30, 2007
    
    
    399,608,384
    
    
    
    32
    
    
    
    3,720
    
    
    
    (388
    )
    
    
    2
    
    
    
    3,366Dividends declared
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    (1
    )Issue of shares- Exercise of employee share options
    
    
    1,786,213
    
    
    
    
    
    
    
    12
    
    
    
    
    
    
    
    
    
    
    
    12- Exchange for PNG Royalty
    
    
    1,859,159
    
    
    
    
    
    
    
    20
    
    
    
    
    
    
    
    
    
    
    
    20Share-based payments
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    6
    
    
    
    9Total comprehensive loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (30
    )
    
    
    (204
    )
    
    
    (234
    )Balance  June 30, 2008
    
    
    403,253,756
    
    
    
    32
    
    
    
    3,755
    
    
    
    (419
    )
    
    
    (196
    )
    
    
    3,172Issue of shares- Exercise of employee share options
    
    
    1,322,964
    
    
    
    
    
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    7- Exchange for PNG Royalty
    
    
    3,364,675
    
    
    
    
    
    
    
    23
    
    
    
    
    
    
    
    
    
    
    
    23- Capital raising
    
    
    18,045,441
    
    
    
    1
    
    
    
    186
    
    
    
    
    
    
    
    
    
    
    
    187Share-based payments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13
    
    
    
    13Total comprehensive income for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    311
    
    
    
    111
    
    
    
    422Balance  June 30, 2009
    
    
    425,986,836
    
    
    
    33
    
    
    
    3,971
    
    
    
    (108
    )
    
    
    (72
    )
    
    
    3,824Issue of shares- Exercise of employee share options
    
    
    505,584
    
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    3- Issued for AVRD investment
    
    
    2,162,359
    
    
    
    
    
    
    
    21
    
    
    
    
    
    
    
    
    
    
    
    21Share-based payments
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    20
    
    
    
    19Repurchase of equity interest (note 26(f))
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13
    )
    
    
    (13
    )Total comprehensive income for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (24
    )
    
    
    25
    
    
    
    1Dividends paid (1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (27
    )
    
    
    
    
    
    
    (27
    )Balance  June 30, 2010
    
    
    428,654,779
    
    
    
    33
    
    
    
    3,994
    
    
    
    (159
    )
    
    
    (40
    )
    
    
    3,828
 (1)
    
    Dividend per share is disclosed under the earnings per share note. Refer to note 15
  F-6




---



##### 



Consolidated cash flow statements
 US DollarFigures in million
    
    Notes
    
    
    2010
    
    
    2009
    
    
    2008Cash flow from operating activitiesCash generated by operations
    
    
    31
    
    
    
    214
    
    
    
    319
    
    
    
    268Interest received
    
    
    
    
    
    
    25
    
    
    
    51
    
    
    
    38Dividends received
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5Interest paid
    
    
    
    
    
    
    (12
    )
    
    
    (31
    )
    
    
    (57
    )Income and mining taxes paid
    
    
    
    
    
    
    (17
    )
    
    
    (85
    )
    
    
    (18
    )Cash generated by operating activities
    
    
    
    
    
    
    210
    
    
    
    254
    
    
    
    236Cash flow from investing activitiesIncrease in amounts invested in environmental trusts
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    (11
    )Decrease/(increase) in restricted cash
    
    
    
    
    
    
    2
    
    
    
    (9
    )
    
    
    28Proceeds on disposal of Big Bell operation
    
    
    31
    
    
    
    3
    
    
    
    
    
    
    
    Acquisition of Steyn 2 and Target 3
    
    
    31
    
    
    
    (36
    )
    
    
    
    
    
    
    Proceeds on disposals of Papua New Guinea joint venture
    
    
    31
    
    
    
    
    
    
    
    235
    
    
    
    Proceeds on disposals of Randfontein Cooke assets
    
    
    31
    
    
    
    
    
    
    
    209
    
    
    
    Proceeds on disposal of South Kal Mine operation
    
    
    31
    
    
    
    
    
    
    
    
    
    
    
    18Proceeds on disposal of available-for-sale financial assets
    
    
    
    
    
    
    7
    
    
    
    
    
    
    
    184Increase in intangible assets
    
    
    
    
    
    
    (2
    )
    
    
    (4
    )
    
    
    (3
    )Decrease/(increase) in other non-current investments
    
    
    
    
    
    
    1
    
    
    
    (4
    )
    
    
    (11
    )Proceeds on disposal of property, plant and equipment
    
    
    
    
    
    
    16
    
    
    
    6
    
    
    
    18Additions to property, plant and equipment
    
    
    
    
    
    
    (443
    )
    
    
    (339
    )
    
    
    (552
    )Cash (utilised)/generated by investing activities
    
    
    
    
    
    
    (453
    )
    
    
    94
    
    
    
    (329
    )Cash flow from financing activitiesBorrowings raised
    
    
    
    
    
    
    168
    
    
    
    
    
    
    
    323Borrowings paid
    
    
    
    
    
    
    (57
    )
    
    
    (427
    )
    
    
    (256
    )Ordinary shares issued
    
    
    
    
    
    
    3
    
    
    
    194
    
    
    
    12Dividends paid
    
    
    
    
    
    
    (29
    )
    
    
    
    
    
    
    (1
    )Cash generated/(utilised) by financing activities
    
    
    
    
    
    
    85
    
    
    
    (233
    )
    
    
    78Foreign currency translation adjustments
    
    
    
    
    
    
    6
    
    
    
    85
    
    
    
    (2
    )Net (decrease)/increase in cash and equivalents
    
    
    
    
    
    
    (152
    )
    
    
    200
    
    
    
    (17
    )Cash and equivalents  beginning of period
    
    
    
    
    
    
    253
    
    
    
    53
    
    
    
    70Cash and equivalents  end of period
    
    
    
    
    
    
    101
    
    
    
    253
    
    
    
    53
  F-7




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##### 



Notes
to the consolidated financial statements
 1
    
    General information
 Harmony Gold Mining Company Limited (the
Company) and its subsidiaries (collectively
 Harmony
or the group) are engaged in gold mining and related activities, including exploration, extraction and processing. Gold
bullion, the groups principal product, is currently produced at its operations in South Africa and Papua New Guinea, where the construction of the Hidden Valley Mine is substantially complete. Hidden Valley Mine
reached commercial levels of production during May 2010.The Company is a public company, incorporated and domiciled in South Africa. The address of its registered office is Randfontein Office Park, Corner Main Reef Road and Ward Avenue, Randfontein, 1759.The consolidated financial statements were authorized for issue by the board of directors on October 11, 2010
 2
    
    Accounting policiesThe principal accounting policies applied in the preparation of the consolidated financial statements are set out below. These policies have been consistently applied in all years presented, unless otherwise stated.
 2.1
    
    Basis of preparationThe financial statements of the group have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards
Board (IFRS), IFRIC Interpretations and the Companies Act of South Africa applicable to companies reporting under IFRS. The financial statements have been prepared under the
historical cost convention, as modified by the revaluation of available-for-sale financial assets and financial assets and financial liabilities at fair value through profit
or loss.The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its
judgement in the process of applying the groups accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates
are significant to the consolidated financial statements are disclosed in note 3.New standards, amendments to standards and interpretations to existing standards adopted by the group:
 *
    
    The following amendment to a standard has become effective and the effect has been disclosed by the group:
 IFRS 7 (Amendment)  Financial Instruments disclosures: Improving Disclosures about Financial Instruments (effective from periods beginning January 1, 2009).The amendment increases the disclosure requirements about fair value measurement and reinforces existing principles for disclosure about liquidity risk. The amendment
introduces a three-level hierarchy for fair value measurement disclosure and requires some specific quantitative disclosures for financial instruments in the lowest level in
the hierarchy. In addition, the amendment clarifies and enhances existing requirements for the disclosure of liquidity risk primarily requiring a separate liquidity risk
analysis for derivative and non-derivative financial liabilities. The effect of the amendment has been disclosed in note 4, Financial Risk Management.
 *
    
    The following standards or amendments to standards have become effective but was not relevant to the group:
 IFRS 1 and IAS 27 (Amendment)  IFRS 1 First-Time Adoption of International Financial Reporting Standards and IAS 27 Consolidated and Separate Financial Statements: Cost of
an Investment in a Subsidiary, Jointly Controlled Entity or Associate.IAS 39 (Amendment)  IAS 39 Financial Instruments: Recognition and Measurement Exposures Qualifying for Hedge Accounting.IFRIC 15  Agreements for the Construction of Real Estate.
 *
    
    The following standards or amendments to standards have become effective but had no impact on the results of the group:
 IFRS 2 (Amendment)  Share-Based Payment: Vesting Conditions and Cancellations (effective from periods beginning January 1, 2009).The amendment deals with two matters. It clarifies that vesting conditions are service conditions and performance conditions only. Other features of a share-based payment are
not vesting conditions. It also specifies that all cancellations, whether by the entity or by other parties, should receive the same accounting treatment.IFRS 3 (Revised)  Business Combinations (effective from periods beginning July 1, 2009).The new standard continues to apply the acquisition method to business combinations, with some significant changes. For example, all payments to purchase a business are to be
recorded at fair value at the acquisition date, with some contingent payments subsequently re-measured at fair value through income. Goodwill may be calculated based on the
parents share of net assets or it may include goodwill related to the minority interest. All transaction costs will be expensed.
 F-8




---



##### 



Notes
to the consolidated financial statements
 IAS 18 (Amendment)  Revenue (no effective date, amendment is made to the appendix which is not part of the standard, effective on date of publication)The amendment is part of the International Accounting Standards Board (IASB) annual improvements project published in April 2009. An additional paragraph has been added to
the appendix to IAS 18, providing guidance on whether an entity is acting as principal or agent.IAS 27 (Revised)  Consolidated and separate financial statements (effective from periods beginning July 1, 2009)The revised standard requires the effects of all transactions with non-controlling interests to be recorded in equity if there is no change in control. They will no longer
result in goodwill or gains and losses. The standard also specifies the accounting when control is lost. Any remaining interest in the entity is re-measured to fair value and
a gain or loss is recognized in profit or loss. A corresponding amendment to IAS 21 was made as a result of IAS 27 (Revised) that clarifies that upon partial disposal of a
subsidiary that includes a foreign operation, the group is required to re-attribute the proportionate share of the cumulative exchange differences recognized in other
comprehensive income to the non-controlling interests in that foreign operation (i.e. the transaction is recognized in equity). Only upon loss of control of a subsidiary that
includes a foreign operation is the cumulative amount of exchange differences relating to that foreign operation reclassified from other comprehensive income to profit or
loss.IAS 32 and IAS 1 (Amendment)  IAS 32 Financial Instruments: Presentation and IAS 1 Presentation of financial statements: Puttable Financial Instruments and Obligations
Arising on Liquidation (effective from periods beginning January 1, 2009).The amendments require entities to classify the following types of financial instruments as equity, provided they have particular features and meet specific conditions: a)
puttable financial instruments (for example, some shares issued by co-operative entities); b) instruments, or components of instruments, that impose on the entity an
obligation to deliver to another party a pro rata share of the net assets of the entity only on liquidation (for example, some partnership interests and some shares issued by
limited life entities). Additional disclosures are required about the instruments affected by the amendments.IFRIC 9 and IAS 39  Embedded Derivatives (effective from periods beginning 1 July 2009)The amendment results in a mandatory assessment of an embedded derivative following reclassification of a financial assets out of the fair value through profit or loss
category. The assessment will not have taken place at initial recognition, as the entire asset was accounted for at fair value. The amendment is necessary to ensure that,
following a reclassification from the fair value category, entities apply the requirements for the separation of an embedded derivative that is not closely related to the host
contract. The assessment should be made on the basis of the circumstances that existed when the entity first became a party to the contract. In addition, if the fair value of
the embedded derivative that would have to be separated cannot be reliably measured, the hybrid financial asset in its entirety should remain in the fair value through profit
or loss category.IFRIC 16  Hedges of a Net Investment in a Foreign Operation (effective from periods beginning October 1, 2008)IFRIC 16 provides guidance on identifying the foreign currency risks that qualify as a hedged risk (in the hedge of a net investment in a foreign operation). It secondly
provides guidance on where, within a group, hedging instruments that are hedges of a net investment in a foreign operation can be held to qualify for hedge accounting.
Thirdly, it provides guidance on how an entity should determine the amounts to be reclassified from equity to profit or loss for both the hedging instrument and the hedged
item.IFRIC 17  Distributions of Non-cash Assets to Owners (effective from periods beginning July 1, 2009)IFRIC 17 applies to the accounting for distributions of non-cash assets (commonly referred to as dividends in specie) to the owners of the entity. The interpretation
clarifies that: a dividend payable should be recognized when the dividend is appropriately authorized and is no longer at the discretion of the entity; an entity should
measure the dividend payable at the fair value of the net assets to be distributed; and an entity should recognize the difference between the dividend paid and the carrying
amount of the net assets distributed in profit or loss.IFRIC 18  Transfers of assets from customers (effective from periods beginning July 1, 2009)The interpretation clarifies the accounting treatment for transfers of property, plant and equipment received from customers. This Interpretation applies to agreements with
customers in which the entity receives cash from a customer when that amount of cash must be used only to construct or acquire an item of property, plant and equipment and the
entity must then use the item of property, plant and equipment either to connect the customer to a network or to provide the customer with on-going access to a supply of goods
and services, or to do both.Improvements projectsThese amendments are the result of conclusions the Board reached on proposals made in its annual improvement project. Unless otherwise specified, the amendments are effective
for annual accounting periods beginning on or after January 1, 2009, although entities are permitted to adopt them earlier. The group does not expect the new or revised
statements and revised interpretations to have a significant effect on the financial statements.
 F-9




---



##### 



Notes to
the consolidated financial statements
 Standards, amendments to standards and interpretations to existing standards that are not yet effective and have not been early adopted by the group:At the date of authorization of these financial statements, the standards, amendments to standards and interpretations listed below were in issue but not yet effective. These
new standards and interpretations 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 all of them, as management is still in the process of determining the impact of these standards and interpretations on future financial statements. The group plans on
adopting these standards, amendments to standards and interpretations on the dates when they become effective.IFRS 1 (Amendment): First-time Adoption of International Financial Reporting Standards  Additional Exemptions for First-time Adopters (effective for periods beginning on or
after January 1, 2010)The amendment addresses the retrospective application of IFRSs to particular situations including: the use of deemed cost for oil and gas assets; determination of whether an
arrangement contains a lease; and decommissioning liabilities included in the cost of property, plant and equipment and is aimed at ensuring that the entities applying IFRSs
will not face undue cost or effort in the transition process. This amendment will not have an impact on the group.IFRS 1 (Amendment): First-time Adoption of International Financial Reporting Standards  Limited Exemptions from Comparative IFRS 7 Disclosures for First-time Adopters
(effective for periods beginning on or after July 1, 2010)The additional amendment relieves first-time adopters of IFRSs from presenting comparative information for new three level classification disclosures required by the March
2009 amendments to IFRS 7 Financial Instruments: Disclosures. It thereby ensure that first-time adopters benefit from the same transition provisions that amendments to IFRS
7 provides to current IFRS preparers. This amendment will not have an impact on the group.IFRS 2 (Amendment)  Group cash-settled and share-based payment transactions (effective from periods beginning January 1, 2010)The amendment provide a clear basis to determine the classification of share based payments in consolidated and separate financial statements. In addition to incorporating
IFRIC 8, Scope of IFRS 2, and IFRIC 11, IFRS 2  group and treasury share transactions, the amendment also expand on the guidance in IFRIC 11 to address group arrangements
that were not considered by that interpretation. The group does not have a cash settled share based payments scheme.IFRS 5 (Amendment)  Measurement of non-current assets (or disposal groups) classified as held for sale (effective from periods beginning January 1, 2010)The amendment is part of the IASBs annual improvements project published in April 2009. The amendment provides clarification on disclosures required in respect of non-current
assets (or disposal groups) classified as held for sale or discontinued operations. It also clarifies that the general requirement of IAS 1 still apply, particularly paragraph
15 (to achieve a fair presentation) and paragraph 125 (sources of estimation uncertainty). The group is still in process of determining the effect of this amendment on the
financial statements.IFRS 9  Financial instruments (effective from periods beginning January 1, 2013)IFRS 9 simplifies accounting for financial assets as requested by many constituents and stakeholders. In particular, it replaces multiple measurement categories in IAS 39 with
a single principle-based approach to classification. IFRS 9 removes complex rule-driven embedded derivative guidance in IAS 39 and requires financial assets to be classified
in their entirety. IFRS 9 eliminates the need for multiple impairment models, such that only one impairment model for financial assets carried at amortized cost will be
required. The group is still in the process of determining the effect of this standard on the financial statements.IAS 1 (Amendment)  Presentation of financial statements (effective from periods beginning January 1, 2010)The amendment is part of the International Accounting Standards Boards (IASB) annual improvements project published in April 2009. The amendment provides clarification that
the potential settlement of a liability by the issue of equity is not relevant to its classification as current or non current. By amending the definition of current
liability, the amendment permits a liability to be classified as non-current (provided that the entity has an unconditional right to defer settlement by transfer of cash or
other assets for at least 12 months after the accounting period) notwithstanding the fact that the entity could be required by the counterparty to settle in shares at any
time.IAS 7 (Amendment)  Statement of cash flows (effective from periods beginning January 1, 2010)The amendment is part of the IASBs annual improvements project published in April 2009. The amendment clarifies that only expenditure that results in a recognized asset in
the statement of financial position can be classified as a cash flow from investing activities. The group currently does not expect the amendment to impact the financial
statements.
 F-10




---



##### 



Notes
to the consolidated financial statements
 IAS 17 (Amendment)  Leases (effective from periods beginning January 1, 2010)The amendment is part of the IASBs annual improvements project published in April 2009. The amendment deletes relevant guidance regarding classification of leases of land, so
as to eliminate inconsistency with the general guidance on lease classification. As a result, leases of land should be classified as either finance or operating, using the
general principles of IAS 17.IAS 24 (Revised)  Related-party disclosures (effective from periods beginning January 1, 2011)The revised standard removes the requirement for government-related entities to disclose details of all transactions with the government and other government-related entities.
It also clarifies and simplifies the definition of a related party.IAS 32 (Amendment)  Classification of rights issues (effective from periods beginning February 1, 2010)The amendment recognizes that the previous requirement to classify foreign-currency denominated rights issued to all existing shareholders on a pro rata basis as derivative
liabilities is not consistent with the substance of the transaction, which represents a transaction with owners acting in their capacity as such. The amendment therefore
creates an exception to the fixed for fixed rule in IAS 32 and requires rights issues within the scope of the amendment to be classified as equity.IAS 36 (Amendment)  Impairment of Assets (effective from periods beginning January 1, 2010)The amendment is part of the IASBs annual improvements project published in April 2009. The amendment clarifies that the largest cash generating unit (or group of units) to
which goodwill should be allocated for the purposes of impairment testing is an operating segment as defined by paragraph 5 of IFRS 8  Operating segments, that is; before
the aggregation of segments with similar economic characteristics permitted by paragraph 12 of IFRS 8.IAS 38 (Amendment)  Intangible assets (effective from periods beginning January 1, 2010)The amendment is part of the IASBs annual improvements project published in April 2009. The amendment clarifies the description of valuation techniques commonly used by
entities when measuring the fair value of intangible assets acquired in a business combination, where there is no active market. The effect of the amendment will be recorded
in future periods when such transactions are entered into.IAS 39 (Amendment)  Financial instruments: Recognition and measurement (effective from periods beginning January 1, 2010)There were 3 amendments made to IAS 39 as part of the IASBs annual improvements project published in April 2009.
 (i)
    
    The scope exemption within IAS 39.2(g) was amended to clarify that it only applies to forward contracts that
will result in a business combination at a future date, as long as the term of the forward contract does not
exceed a reasonable period normally necessary to obtain any required approvals and to complete the
transaction.(ii)
    
    Clarification that amounts deferred in equity are only reclassified to profit or loss when the underlying
hedged cash flows affect profit or loss.(iii)
    
    An additional example of a closely related embedded prepayment option in a debt instrument was added to the
adoption guidance in IAS 39 AG 30. Wording with respect to the assessment of put and call features in
convertible instruments was clarified.
 IFRIC 14 (Amendment): The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction  Prepayment of Minimum Funding Requirements (effective for
financial periods beginning on or after January 1, 2011).This amendment applies in the limited circumstances when an entity is subject to minimum funding requirements and makes an early payment of contributions to cover those
requirements. The amendment permits such an entity to treat the benefit of such an early payment as an asset. The group does not believe the amendment will have an impact on
the group.IFRIC 19  Extinguishing financial liabilities with equity instruments (effective from periods beginning July 1, 2010)This interpretation addresses the accounting by an entity when the terms of a financial liability are renegotiated and result in the entity issuing equity instruments to a
creditor of the entity to extinguish all or part of the financial liability. It does not address the accounting by the creditor, nor does it apply to situations where the
liability may be extinguished with equity instruments in accordance with the agreed terms of the instrument (for example, convertible bonds). The group currently does not
expect this interpretation to have a material effect on the financial statements.Improvements projectsCertain improvements to IFRS 2009 (periods beginning on or after January 1, 2010) and IFRS 2010 (each has its own effective date, the earliest being periods beginning on or
after July 1, 2010).
 F-11




---



##### 



Notes to the consolidated financial statements
 2.2
    
    ConsolidationThe consolidated financial information includes the financial statements of the Company, its subsidiaries, its proportionate interest in joint ventures, special purpose
entities (SPEs) and its interests in associates.
 (i)
    
    Subsidiaries,which are those entities in which the group generally has an interest of more than one half of
the voting rights or otherwise has power to govern the financial and operating policies, are consolidated.
Subsidiaries are consolidated from the date on which control is transferred to the group and are no longer
consolidated when control ceases. The purchase method of accounting is used to account for the acquisition of
subsidiaries. The cost of an acquisition is measured as the fair value of the assets given, shares issued or
liabilities assumed at the date of exchange plus costs directly attributable to the exchange. Identifiable
assets acquired and liabilities and contingent liabilities assumed in a business combination are measured
initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling
interests. Non-controlling interests are carried at a proportion of the net identifiable assets acquired.The excess of the cost of acquisition over the fair value of the groups share of the identifiable net assets
acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of
the subsidiary acquired, the difference is recognized directly in the income statement.In situations of successive share purchases when control already existed at the date of further acquisition,
no fair value adjustment is made to the identifiable net assets acquired and any excess/deficit purchase price
over the carrying value of non-controlling interests acquired is accounted for in equity.Intercompany transactions, balances and unrealized gains on transactions between group companies are
eliminated on consolidation. Unrealized losses are also eliminated and may provide evidence of an impairment
that should be recognized. Where necessary, accounting policies of subsidiaries have been changed to ensure
consistency with the policies adopted by the group.(ii)
    
    Associatesare those entities over in which the group has significant influence, but not control over
operational and financial policies, generally accompanying a shareholding of between 20% and 50% of the voting
rights.Investments in associates are accounted for by using the equity method of accounting, and are initially
recognized at cost. The cost of an acquisition is measured as the fair value of the assets given, shares
issued or liabilities assumed at the date of exchange plus costs directly attributable to the acquisition.The groups share of the associates post-acquisition profits or losses is recognized in the income statement,
and its share of post-acquisition movement in reserves is recognized in other reserves. Cumulative
post-acquisition movements are adjusted against the carrying amount of the investment. When the groups shares
of losses in an associate equals or exceeds its interest in the associate, including any other unsecured
receivables, the group does not recognize further losses, unless it has incurred obligations or made payments
on behalf of the associate.The groups investment in associates includes goodwill identified on acquisition, net of any accumulated
impairment losses.The carrying value of an associate is reviewed on a regular basis and, if an impairment in the carrying value
has occurred, it is written off in the period in which such impairment is identified.Unrealized gains on transactions between the group and its associates are eliminated to the extent of the
groups interest in the associates. Unrealized losses are also eliminated unless the transaction provide
evidence of an impairment that should be recognized.Accounting policies of associates have been reviewed to ensure consistency with the policies adopted by the
group.(iii)
    
    Joint ventureentities are those entities in which the group holds an interest and shares joint control over
strategic, financial and operating decisions with one or more other ventures under a contractual arrangement.
The groups interest in jointly controlled entities is accounted for by proportionate consolidation. Under
this method, the group includes its share of the joint ventures individual income and expenses, assets and
liabilities and cash flows on a line-by-line basis with similar items in the groups financial statements.The group recognizes the portion of gains or losses on the sale of assets by the group to the joint venture
that is attributable to the other ventures. The group does not recognize its share of profits or losses from
the joint venture that result from the purchase of assets by the group from the joint venture until it resells
the assets to an independent party. However, if a loss on the transaction provides evidence of a reduction in
the net realizable value of current assets or an impairment loss, the loss is recognized immediately.
 F-12




---



##### 



Notes to the consolidated financial statements
 Joint ventures operations and assets: The group and company has contractual arrangements with other
participants to engage in joint activities or invest in joint assets other than through a separate entity. The
group and company includes its assets, liabilities and share of income and expenditure in such joint venture
operations with similar items in its financial statements.(iv)
    
    Special purpose entities(SPEs) are those undertakings that are created to satisfy specific business needs of
the group, These are consolidated where the group has the right to the majority of the benefits of the SPE
and/or is exposed to the majority of the risk thereof. SPEs are consolidated in the same manner as
subsidiaries when the substance of the relationship indicates that the SPE is controlled by the group.(v)
    
    Transactions with non-controlling interests. The group applies a policy of treating transactions with minority
interests as transactions with equity owners of the group. For purchases from non-controlling interests, the
difference between any consideration paid and the relevant share acquired of the carrying value of net assets
of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also
recorded in equity.
 2.3
    
    Foreign currency translation
 (i)
    
    Functional and presentation currency: Items included in the financial statements of each of the groups
entities are measured using the currency of the primary economic environment in which the entity operates (the
functional currency). The consolidated financial statements are presented in South African Rand and US dollars
for the benefit of local and international users. The Companys financial statements are presented in its
functional currency, being South African Rand.For translation of the Rand financial statement items to US dollar, the average of R7.58 (2009 :R9.00) (2008:
R7.26) per US$1 was used for income statement items (unless this average was not a reasonable approximation of
the cumulative effect of the rates prevailing on the transaction dates, in which case these items were
translated at the rate on the date of the transactions) and the closing rate of R7.63 (2009: R7.72) per US$1
for asset and liability items. Equity items were translated at historic rates.References to A$ refers to Australian currency, R to South African currency, $ or US$ to United States
currency and K or Kina to Papua New Guinean currency.(ii)
    
    Transactions and balances:Foreign currency transactions are translated into the functional currency using the
exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from
the settlement of such transactions and from the translation to year-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognized in the income statement, except where deferred in
equity as qualifying cash flow hedges and qualifying investment hedges. Gains and losses recognized in the
income statement are included in the determination of other expenses  net.Changes in the fair value of monetary securities denominated in a foreign currency classified as available for
sale are analyzed between translation differences resulting from changes in the amortized cost of the
security, and other changes in the carrying amount of the security. Translation differences related to the
changes in amortized cost are recognized in profit or loss, and other changes in carrying amount are
recognized in other comprehensive income.Translation differences on non-monetary financial assets and liabilities such as equities held at fair value
through profit or loss are recognized in profit or loss as part of the fair value gain or loss. Translation
differences on non-monetary financial assets such as equities classified as available for sale are included in
other comprehensive income.(iii)
    
    Group companies:The results and financial position of all group entities (none of which has the currency of a
hyperinflationary economy) that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
 a) assets and liabilities for each balance sheet presented are translated at the closing rate at the date of
that balance sheet;b) income and expenses for each income statement are translated at average exchange rates (unless this average
is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates,
in which case income and expenses are translated at the rate on the date of the transactions);c) all resulting exchange differences are recognized as
a separate component of other comprehensive income;d) equity items are translated at historic rates.
 F-13




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Notes to the consolidated financial statements
 On consolidation, exchange differences arising from the translation of the net investment in foreign
operations, and of borrowings and other currency instruments designated as hedges of such investments, are
taken to other comprehensive income. When a foreign operation is sold or control is otherwise lost, exchange
differences that were recorded in other comprehensive income are recognized in profit or loss in the period in
which the foreign operation is sold or control is otherwise lost.Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets
and liabilities of the foreign entity and translated at the closing rate.
 2.4
    
    Segmental reportingOperating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker has been
identified as the executive committee. Refer to note 38 for detailed guidance on the identification of an operating and reportable segment.2.5
    
    Property, plant and equipment
 (i)
    
    Mining assetsincluding mine development costs and mine plant facilities are initially recorded at cost, where
after it is measured at cost less accumulated depreciation and impairment. Costs includes expenditure that is
directly attributable to the acquisition of the items. Subsequent costs are included in the assets carrying
amount or recognized as a separate assets as appropriate only when it is probable that future economic
benefits associated with the item will flow to the group and the cost of the item can be measured reliably.At the groups surface mines, when it has been determined that a mineral property can be economically
developed as a result of establishing proved and probable reserves, costs incurred to develop the property are
capitalized as incurred until the mine is considered to have moved into the production phase. These costs
include costs to further delineate the ore body and remove overburden to initially expose the ore body.
Stripping costs incurred during the production phase to remove waste ore are deferred and charged to
production costs on the basis of the average life-of-mine stripping ratio. The average stripping ratio is
calculated as the number of tonnes of waste material removed per tonne of ore mined. The average life-of-mine
ratio is revised annually in the light of additional knowledge and change in estimates. The cost of excess
stripping is capitalized as mine development costs when the actual stripping ratio exceeds the average
life-of-mine stripping ratio. Where the average life-of-mine stripping ratio exceeds the actual stripping
ratio, the cost is charged to the income statement.At the groups underground mines, all costs incurred to develop the property, including costs to access
specific ore blocks or other areas of the underground mine, are capitalized to the extent that such costs will
provide future economic benefits. These costs include the cost of shaft sinking and access, the costs of
building access ways, lateral development, drift development, ramps, box cuts and other infrastructure
development.During the development stage, the group may enter into arrangements whereby it agrees to transfer a part of
its mineral interest in consideration for an agreement by another party (the farmee) to meet certain
expenditure which would otherwise have to be undertaken by the group. Such arrangements, referred to as
farm-in transactions, are accounted for as executory contracts  particularly when the expenditures to be
incurred by the farmee are discretionary in nature, and the mineral interest to be transferred may vary
depending upon such discretionary spend. At the date of completion of each partys obligations under the
farm-in arrangement, the group derecognizes the proportion of the mining assets and liabilities associated
with the joint venture that it has sold to the farmee, and recognizes its interest in the capital expenditure
(consideration received) at fair value within operating assets. The difference between the net disposal
proceeds and the carrying amount of the asset disposed of is recognized in profit or loss.Borrowing costs are capitalized to the extent that they are directly attributable to the acquisition and
construction of qualifying assets. Qualifying assets are assets that take a substantial time to get ready for
their intended use. These costs are capitalized until the asset moves into the production phase. Other
borrowing costs are expensed.The net assets of operations placed on care and maintenance are impaired to their recoverable amount.
Expenditure on the care and maintenance of these operations is charged against income, as incurred.Where a depreciable asset is used in the construction or extension of a mine, the depreciation is capitalized
against the mines cost.(ii)
    
    Non-mining assets:Land is shown at cost and not depreciated. Other non-mining fixed assets are shown at cost
less accumulated depreciation and accumulated impairment losses.
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Notes to the consolidated financial statements
 (iii)
    
    Undeveloped propertiesare initially valued at the fair value of resources obtained through acquisitions. The
carrying value of these properties are annually tested for impairment. Once development commences, these
properties are transferred to mining properties and accounted for in accordance with the related accounting
policy.(iv)
    
    Mineral and surface use rightsrepresent mineral and surface use rights for parcels of land both owned and not
owned by the group. Mineral and surface rights include acquired mineral use rights in production, development
and exploration phase properties. The amount capitalized related to a mineral and surface right represents its
fair value at the time it was acquired, either as an individual asset purchase or as part of a business
combination, and is recorded at cost of acquisition.Production phase mineral interests represent interests in operating properties that contain proved and
probable reserves. Development phase mineral interests represent interests in properties under development
that contain proved and probable reserves. Exploration phase mineral interests represent interests in
properties that are believed to potentially contain (i) other mineralized material such as inferred material
within pits; measured, indicated and inferred material with insufficient drill spacing to qualify as proved
and probable reserves; (ii) around-mine exploration potential such as inferred material not immediately
adjacent to existing reserves and mineralization but located within the immediate mine infrastructure; (iii)
other mine-related exploration potential that is not part of measured, indicated or inferred material and is
comprised mainly of material outside of the immediate mine area; or (iv) greenfield exploration potential that
is not associated with any production, development or exploration phase property as described above.The groups mineral use rights are enforceable regardless of whether proved or probable reserves have been
established. In certain limited situations, the nature of a use changes from an exploration right to a mining
right upon the establishment of proved and probable reserves. the group has the ability and intent to renew
mineral use rights where the existing term is not sufficient to recover all identified and valued proved and
probable reserves and/or undeveloped mineral interests.(v)
    
    Leased assets:The group leases certain property, plant and equipment. Leases of property, plant and equipment
where the group has substantially all the risks and rewards of ownership are classified as finance leases. The
assets are capitalized at the leases commencement at the lower of the fair value of the leased property and
the present value of the minimum lease payments.Finance lease payments are allocated using the rate implicit in the lease, which is included in finance costs,
and the capital repayment, which reduces the liability to the lessor. The corresponding rental obligations,
net of finance charges, are included in non current Borrowings, with the current portion included under
Current Liabilities.Capitalized lease assets are depreciated over the shorter of their estimated useful lives and the lease terms.(vi)
    
    Depreciation and amortizationof mineral property interests, mineral and surface rights, mine development
costs and mine plant facilities are computed principally by the units of production method over the life of
mine based on estimated quantities of economically recoverable proved and probable reserves, which can be
recovered in future from known mineral deposits.In most instances, proved and probable reserves provide the best indication of the useful life of the Groups
mines (and related assets). However, in some instances, proved and probable reserves may not provide a
realistic indication of the useful life of the mine (and related assets). This may be the case, for example,
where management is confident that further resources will be converted into reserves and are approaching
economic decisions affecting the mine on this basis, but has chosen to delay the work required to designate
them formally as reserves. Managements confidence in the economical recovery of such resources may be based
on historical experience and available geological information. In instances where management is able to
demonstrate the economic recovery of such resources with a high level of confidence, such additional
resources, as well as the associated future development costs of accessing those resources, are included in
the calculation of depreciation and amortization.Changes in managements estimates of economically recoverable reserves and resources impact depreciation and
amortization on a prospective basis. During fiscal 2010, the Group revised its estimate of the useful lives of
the Doornkop and Masimong operations to include certain resources in addition to proved and probable reserves.
The inclusion of such resources resulted from increased confidence in the economic extraction of resources due
to additional surface and underground drilling undertaken in the current year. The effect of including such
resources in the useful life of these operations decreased annual depreciation by approximately US$1 million.
 F-15




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##### 



Notes
to the consolidated financial statements
 (vii)
    
    Depreciation and amortization of non-mining fixed assets:Other non-mining fixed assets are depreciated on a
straight line basis over their estimated useful lives as follows:
 
    
    Vehicles at 20% per year;
    
    Computer equipment at 33.3% per year; and
    
    Commercial, off-the-shelf software at 50% per year; and
    
    Furniture and equipment at 16.67% per year.
 The assets residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet
date.Gains and losses on disposals are determined by comparing proceeds with carrying amount and are recognized in
the income statement.(viii)
    
    Depreciation and amortization of mineral and surface use rights:Mineral rights associated with production
phase mineral interests are amortized over the life of mine using the units-of-production method in order to
match the amortization with the expected underlying future cash flows. Mineral interests associated with
development and exploration phase mineral interests are not amortized until such time as the underlying
property is converted to the production stage.
 For details on the groups accounting policy on impairments, refer to note 2.8.
 2.6
    
    Exploration costsThe group expenses all exploration and evaluation expenditures until it is concluded that a future economic benefit is more likely to be realized than not, i.e. probable.
The information used to make that determination depends on the level of exploration as well as the degree of confidence in the ore body.Exploration and evaluation expenditure on greenfield sites, being those where the group does not have any mineral deposits which are already being mined or developed, is
expensed as incurred until a final feasibility study has been completed, after which the future pre-commercial production expenditure is capitalized within development costs
if the final feasibility study demonstrates that future economic benefits are probable. Capitalization of pre-production cost ceases when commercial levels of production are
reached. Commercial levels of production is discussed under
production start date in note 3.12.Exploration and evaluation expenditure on brownfield sites, being those adjacent to mineral deposits which are already being mined or developed, is expensed as incurred until
the group is able to demonstrate that future economic benefits are probable through the completion of a feasibility study, after which the expenditure is capitalized as mine
development cost. A feasibility study consists of a comprehensive study of the viability of a mineral project that has advanced to a stage where the mining method, in the
case of underground mining, or the pit configuration, in the case of an open pit, has been established, and which, if an effective method of mineral processing has been
determined, includes a financial analysis based on reasonable assumptions of technical, engineering, operating economic factors and the evaluation of other relevant factors.
The feasibility study, when combined with existing knowledge of the mineral property that is adjacent to mineral deposits that are already being mined or developed, allows the
group to conclude that it is more likely than not that it will obtain future economic benefit from the expenditures.Exploration and evaluation expenditure relating to extensions of mineral deposits which are already being mined or developed, including expenditure on the definition of
mineralization of such mineral deposits, is capitalized as a mine development cost following the completion of an economic evaluation equivalent to a feasibility study. This
economic evaluation is distinguished from a feasibility study in that some of the information that would normally be determined in a feasibility study is instead obtained from
the existing mine or development. This information when combined with existing knowledge of the mineral property already being mined or developed allow the directors to
conclude that more likely than not the group will obtain future economic benefit from the expenditures.Exploration properties acquired are recognized in the balance sheet within development cost and are shown at cost less provisions for impairment determined in accordance with
the groups accounting policy on impairment of non-financial
assets (note 2.8).2.7
    
    Intangible assetsIntangible assets consist of all identifiable non-monetary assets without physical substance. They are stated at cost less accumulated amortization and accumulated impairment
losses, if any. The following are the main categories of intangible assets:
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##### 



Notes to the consolidated financial statements
 (i)
    
    Intangible assets with an indefinite useful lifeIntangible assets with an indefinite useful life are not amortized but tested for impairment on an annual
basis. Goodwill represents the excess of the cost of an acquisition over the fair value of the groups share
of the net identifiable assets of the acquired subsidiary, associate, joint venture or business at the date of
acquisition. Goodwill on acquisition of subsidiaries, joint ventures and businesses are included in intangible
assets. Goodwill on acquisition of associates is included in investments in associates and tested for
impairment as part of the overall balance.Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Impairment
losses on goodwill are recognized immediately in the income statement and are not reversed. The impairment
testing is performed annually on June 30 or when events or changes in circumstances indicate that it may be
impaired.Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made
to those cash-generating units or groups of cash-generating units that are expected to benefit from the
business combination in which the goodwill arose. If the composition of one or more cash-generating units to
which goodwill has been allocated changes due to a re-organization, the goodwill is re-allocated to the units
affected.The gain or loss on disposal of an entity includes the carrying amount of goodwill relating to the entity sold.(ii)
    
    Intangible assets with a finite useful lifeAcquired computer software licenses that requires further internal development are capitalized on the basis of
costs incurred to acquire and bring to use the specific software. Cost to bring to use the specific software,
includes software development employee costs and attributable overheads. Development expenditure incurred that
will not likely generate probable future economic benefits and cannot be reliability measured are recognized
as an expense as incurred. Intangible assets with a finite useful life are amortized on a straight line basis
of over their estimated useful lives, which are reviewed annually, as follows:
 
    
    Computer software at 20% per year.
 2.8
    
    Impairment of non-financial assetsAssets that have an indefinite useful life are not subject to amortization and are tested annually for impairment.Assets that are subject to amortization are reviewed annually on June 30 for impairment or whenever events or changes in circumstances indicate that the carrying amount may
not be recoverable.An impairment loss is recognized in the income statement for the amount by which the assets carrying amount exceeds its recoverable amount. The recoverable amount is the
higher of an assets fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash flows (cash generating units). Each operating shaft, along with allocated common assets such as plants and administrative offices, is considered
to be a cash generating unit as each shaft is largely independent from the cash flows of other shafts and assets belonging to the group.Fair value less cost to sell is generally determined by using discounted estimated future cash flows. Future cash flows are estimated based on quantities of recoverable
minerals, expected gold prices (considering current and historical prices, price trends and related factors), production levels and cash costs of production, all based on
life-of-mine plans. Future cash flows are discounted to their present value using a post tax discount rate that reflect current market assessments of the time value of money
and risk specific to the asset.The term recoverable minerals refers to the estimated amount of gold that will be obtained from reserves and resources and all related exploration stage mineral interests
(except for other mine-related exploration potential and greenfields exploration potential discussed separately below) after taking into account losses during ore processing
and treatment. Estimates of recoverable minerals from such related exploration stage mineral interests will be risk adjusted based on managements relative confidence in such
materials. In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of cash flows from
other asset groups. With the exception of other mine-related exploration potential and greenfields exploration potential, estimates of future undiscounted cash flows are
included on an area of interest basis, which generally represents an individual operating mine, even if the mines are included in a larger mine complex.In the case of mineral interests associated with other mine-related exploration potential and greenfields exploration potential, cash flows and fair values are individually
evaluated based primarily on recent exploration results and recent transactions involving sales of similar properties, if any. Assumptions underlying future cash flow
estimates are subject to significant risks and uncertainties.
 F-17




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##### 



Notes to the consolidated financial statements
 Non-financial assets other than goodwill that suffered an impairment are reviewed annually for possible reversal of the impairment at June 30. Reversal of impairments is also
considered when there is objective evidence to indicate that the asset is no longer impaired. Where an impairment subsequently reverses, the carrying amount of the asset or
CGU is increased to the revised estimate of its recoverable amount, but not higher than the carrying value that would have been determined had no impairment been recognized in
prior years.2.9
    
    Financial instrumentsFinancial instruments are initially measured at fair value when the group becomes a party to their contractual arrangements. Transaction costs are included in the initial
measurement of financial instruments, with the exception of financial instruments classified as at fair value through profit or loss. The subsequent measurement of financial
instruments is discussed below.A financial asset is derecognized when the right to receive cash flows from the asset has expired or the group has transferred its rights to receive cash and either (a) has
transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has
transferred control of the assets.A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expires.On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss recognized in
equity is recognized in profit and loss.On derecognition of a financial liability, the difference between the carrying amount of the liability extinguished or transferred to another party and the amount paid is
recognized in profit or loss.Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and
there is an intention to settle on a net basis, or realize the asset and settle the liability simultaneously.Financial assetsThe group classifies its financial assets in the following categories: loans and receivables, available-for-sale, held-to-maturity and at fair value through profit or loss.
The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial
recognition.Purchases and sales of financial assets are recognized on trade-date, the date on which the group commits to purchase or sell the asset.
 (i)
    
    Loans and receivables,are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. They arise when the group provides money, goods or services directly to a debtor
with no intention of trading the receivable. Loans and receivables are subsequently measured at amortized cost
using the effective interest method. They are included in current assets, except for those with maturities
greater than 12 months after the balance sheet date which are classified as non-current assets. Loans and
receivables include trade and other receivables (excluding VAT and prepayments), restricted cash and cash and
cash equivalents.Cash and cash equivalentsCash and cash equivalents are defined as cash on hand, deposits held at call with banks and short-term highly
liquid investments with original maturities of three months or less. Cash and cash equivalents exclude
restricted cash (discussed below).Restricted cashRestricted cash consists of cash collateral posted for guarantees and performance bonds related to
environmental rehabilitation and as security deposits on mining tenements.Trade and other receivablesTrade and other receivables are recognized initially at fair value and subsequently measured at amortized cost
using the effective interest method, less provision for impairment. If collection is expected in one year or
less, they are classified as current assets. If not, they are presented as non-current assets. A provision for
impairment of receivables is established when there is objective evidence that the group will not be able to
collect all amounts due according to the original terms of receivables. Significant financial difficulties of
the debtor, probability that the debtor will enter bankruptcy or financial reorganization, and default or
delinquency in payments are considered indicators that the trade receivable is impaired. The amount of the
provision is the difference between the assets carrying amount and the present value of estimated future cash
flows, discounted at the effective interest rate. The carrying amount of the asset is reduced through the use
of a provision for impairment (allowance account) and the amount of the loss is recognized in the income
statement. When a trade receivable is uncollectible, it is written off against the allowance account for trade
receivables. Subsequent recoveries of amounts previously written off are credited in the income statement.
 F-18




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##### 



Notes to the consolidated financial statements
 (ii)
    
    Available-for-sale financial assets, are non-derivatives that are either designated in this category or not
classified in any of the other categories. They are included in non-current assets unless the investment
matures or management intends to dispose of the investment within 12 months of the balance sheet date.Available-for-sale financial assets are subsequently carried at fair value. Changes in the fair value of
monetary securities denominated in a foreign currency and classified as available for sale are analyzed
between translation differences resulting from changes in amortized cost of the security and other changes in
the carrying amount of the security. The translation differences on monetary securities are recognized in
profit or loss, while translation differences on non-monetary securities are recognized in other comprehensive
income. Changes in the fair value of monetary and non-monetary securities classified as available for sale are
recognized in other comprehensive income.When securities classified as available for sale are sold or impaired, the accumulated fair value adjustments
recognized in other comprehensive income are reclassified in the income statement as profit or loss from
investment securities. Dividends on available-for-sale equity instruments are recognized in the income
statement as part of investment income when the groups right to receive payments is established. Interest on
available-for-sale securities calculated using the effective interest method is recognized in the income
statement as part of investment income.The fair values of quoted investments are based on current bid prices. If the value for a financial instrument
cannot be obtained from an active market, the group establishes 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. The valuation techniques make maximum use of market inputs and rely as little
as possible on entity-specific inputs.The group assesses at each balance sheet date whether there is objective evidence that a financial asset or a
group of financial assets is impaired. In the case of equity securities classified as available for sale, a
significant or prolonged decline in the fair value of the security below its cost is considered in determining
whether the securities are impaired. If considered impaired, the cumulative loss  measured as the difference
between the acquisition cost and the current fair value, less any impairment loss on that financial asset
previously recognized in profit or loss  is removed from other reserves and recognized in the income
statement. Subsequent increases in the fair value are recognized in equity  impairment losses recognized in
the income statement on equity instruments are not reversed through the income statement.(iii)
    
    Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed
maturities that the groups management has the positive intention and ability to hold to maturity. The groups
held-to-maturity investments are subsequently measured at amortized cost using the effective interest method.A portion of restricted investments held by the trust funds (refer note 19) are classified as held-to-maturity
investments.The group assesses at the end of each reporting period whether there is objective evidence that a
held-to-maturity investment is impaired as a result of an event. The amount of the loss is measured as the
difference between the assets carrying amount and the present value of estimated future cash flows (excluding
future credit losses that have not been incurred) discounted at the held-to-maturity investments original
effective interest rate. The assets carrying amount of the asset is reduced and the amount of the loss is
recognized in the consolidated income statement. If a held-to-maturity investment has a variable interest
rate, the discount rate for measuring any impairment loss is the current effective interest rate determined
under the contract.If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related
objectively to an event occurring after the impairment was recognized, the reversal of the previously
recognized impairment loss is recognized in the consolidated income statement.(iv)
    
    Financial assets at fair value through profit or loss have two sub-categories:financial assets held for
trading, and those designated at fair value through profit or loss at inception. A financial asset is
classified in this category if acquired principally for the purpose of selling in the short term or if so
designated by management in terms of specified criteria. Derivatives are also categorized as held for trading
unless they are designated as hedges. Assets in this category are classified as current assets if they are
either held for trading or are expected to be realized within 12 months of the balance sheet date. These
assets are subsequently measured at fair value with gains or losses arising from changes in fair value
recognized in the income statement in the period in which they arise. Dividend income from these assets is
recognized in the income statement as part of investment income when the groups right to receive payment is
established.
 F-19




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##### 



Notes
to the consolidated financial statements
 Financial liabilitiesBorrowingsBorrowings are initially recognized at fair value net of transaction costs incurred and subsequently measured at amortized cost, comprising original debt less principal
payments and amortization, using the effective yield method. Any difference between proceeds (net of transaction cost) and the redemption value is recognized in the income
statement over the period of the borrowing using the effective interest rate method.Fees paid on the establishment of loan facilities are capitalized as a pre-payment and amortized over the period of the facility to which it relates.Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the balance
sheet date.Trade and other payablesTrade and other payables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method. Payables are classified as
current liabilities if payment is due within a year or less. If not, they are presented as non-current liabilities.2.10
    
    InventoriesInventories which include bullion on hand, gold in process, gold in lock-up, ore stockpiles and stores and materials, are measured at the lower of cost and net realizable
value after appropriate allowances for redundant and slow moving items. Cost of bullion, gold in process and gold in lock-up is determined by reference to production cost,
including amortization and depreciation at the relevant stage of production. Ore stockpiles are valued at average production cost. Stockpiles and gold in lock-up are
classified as a non current asset where the stockpile exceeds current processing capacity and where a portion of static gold in lock-up is expected to be recovered more than
12 months after balance sheet date.Stores and materials consist of consumable stores and are valued at weighted average cost.Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and the estimated cost necessary to perform the
sale.Gold in process inventories represent materials that are currently in the process of being converted to a saleable product. Conversion processes vary depending on the nature
of the ore and the specific mining operation, but include mill in-circuit, leach in-circuit, flotation and column cells, and carbon in-pulp inventories. In-process material is
measured based on assays of the material fed to process and the projected recoveries at the respective plants. In-process inventories are valued at the average cost of the
material fed to process attributable to the source material coming from the mine, stockpile or leach pad plus the in-process conversion costs, including the applicable
depreciation relating to the process facility, incurred to that point in the process. Gold in process includes gold in lock-up which is generally measured from the plants
onwards. Gold in lock-up is estimated as described under the section dealing with critical accounting estimates and judgements (refer to note 3). It is expected to be
extracted when plants are demolished at the end of its useful lives, which is largely dependant on the estimated useful life of the operations feeding the plants. Where
mechanized mining is used in underground operations, in-progress material is accounted for at the earliest stage of production when reliable estimates of quantities and costs
are capable of being made. Given the varying nature of the groups open pit operations, gold in process represents either production in broken ore form or production from the
time of placement on heap leach pads.2.11
    
    Non-current assets or disposal group held for sale and discontinued operationsA non-current asset or disposal group (a business grouping of assets and their related liabilities) is designated as held for sale and stated at lower of carrying value and
fair value less cost to sell, when its carrying amount will be recovered principally through a sale transaction rather than through continuing use. The classification as held
for sale of a non-current asset or disposal group occurs when it is available for immediate sale in its present condition and the sale is highly probable. A sale is
considered highly probable if management is committed to a plan to sell the non-current asset or disposal group, an active divestiture programme has been initiated, the
non-current assets or disposal group is marketed at a price reasonable to its fair value and the disposal will be completed within one year from classification.Upon classification of a non-current asset or disposal group as held for sale, it is reviewed for impairment. The impairment charged to the income statement is the excess of
the carrying value of the non-current asset or disposal group over its expected net selling price (fair value less costs to sell). At each subsequent reporting date, the
carrying values are remeasured for possible impairment. A reversal of impairment is recognized for any subsequent increase in net selling price but not in excess of the
cumulative impairment loss already recognized.No depreciation is provided on non-current assets from the date they are classified as held for sale.
 F-20




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##### 



Notes to the consolidated financial statements
 When a disposal group is classified as held for sale it is also necessary to assess whether or not the criteria for discontinued operations are met. If the criteria are met,
the results of the disposal group are classified as discontinued operations in the income statement and the comparative amounts restated for all periods presented. No
restatement of balance sheet comparative amounts are done.If a non-current asset or disposal group is classified as held for sale but the criteria for classification as held for sale are no longer met, the disclosure of such
non-current asset or disposal group as held for sale is ceased.On ceasing such classification, the non-current assets are reflected at the lower of:
 
    
    the carrying amount before classification as held for sale adjusted for any depreciation or amortization that
would have been recognized had the assets not been classified as held for sale; or
    
    the recoverable amount at the date the classification as held for sale ceases. The recoverable amount is the
amount at which the asset would have been recognized after the allocation of any impairment loss arising on
the cash generating unit as determined in accordance with the groups policy on impairment of non-financial
assets.
 Any adjustment required to be made on reclassification is charged to the income statement on reclassification, and included in income from continuing operations.Where the disposal group was also classified as a discontinued operation, the subsequent classification from held for sale also requires that the discontinued operation be
included in continuing operations. Comparative information in the income statement and cash flow note disclosures relating to the classification as a discontinued operation
is re-presented accordingly. Comparative information in the balance sheet is not re-presented for this change.2.12
    
    Environmental obligationsEstimated long-term environmental obligations, 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.Based on disturbances to date, the net present value of expected rehabilitation cost estimates are recognized and provided for in full in the financial statements. The
estimates are reviewed annually and are discounted using a pre-tax risk-free rate that is adjusted to reflect the current market assessments of the time value of money and the
risks specific to the obligation.Annual changes in the provision consist of finance costs relating to the change in the present value of the provision and inflationary increases in the provision estimate, as
well as changes in estimates. The present value of environmental disturbances created are capitalized to mining assets against an increase in the rehabilitation provision. If
a decrease in liability exceed the carrying amount of the asset, the excess is recognized immediately in the income statement. If the asset value is increased and there is an
indication that the revised carrying value is not recoverable, an impairment test is performed in accordance with the accounting policy dealing with impairments of non
financial assets. Rehabilitation projects undertaken, included in the estimates are charged to the provision as incurred. The cost of on-going current programmes to prevent
and control pollution is charged against income as incurred. Over time, the liability is increased to reflect an interest element, and the capitalized cost is depreciated over
the life of the related asset.2.13
    
    Environmental trust fundsContributions are made to the groups trust funds, created in accordance with statutory requirements, to fund the estimated cost of pollution control, rehabilitation and mine
closure at the end of the life of the groups mines. The trusts are consolidated into the group as the group exercises full control of the trust. Income earned on investments
classified as held-to-maturity is accounted for as investment income and accrues on a time proportion basis. Fair value movements on investments designated as fair value
through profit or loss are reflected in the net gain/(loss) on financial instruments. The funds in the trust funds are included under restricted investments on the balance
sheet.2.14
    
    ProvisionsProvisions are recognized when the group has a present legal or constructive obligation as a result of past events where it is probable that an outflow of resources embodying
economic benefits will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made.The amount recognized as a provision is the present value of the best estimate of the expenditure required to settle the present obligation at balance sheet date using a
pre-tax rate that reflects current market assessment of the time value of money and the risks specific to the obligation. This estimate takes into account the associated risks
and uncertainties. The increase in the provision due to the passage of time is recognized as interest expense.Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic benefits will be
required, the provision is reversed.
 F-21




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##### 



Notes to the consolidated financial statements
 2.15
    
    Current and deferred taxationThe current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the group operates
and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulations is subject to
interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.The group follows the comprehensive liability method of accounting for deferred tax using the balance sheet approach. Under this method deferred income taxes are recognized
for the tax consequences of temporary differences by applying expected tax rates to the differences between the tax base of all assets or liabilities and its balance sheet
carrying amount, except to the extent that deferred tax arises from the initial recognition of an asset or liability in a transaction that is not a business combination and
does not affect the accounting or taxable profit or loss at the time of the transaction. Deferred tax is charged to profit or loss, except where the tax relates to items
recognized in other comprehensive income or directly in equity in which case the tax is also recognized in other comprehensive income or directly in equity. The effect on
deferred tax of any changes in tax rates is recognized in the income statement, except to the extent that it relates to items previously charged or credited directly to
equity.The principal temporary differences arise from amortization and depreciation on property, plant and equipment, provisions, post retirement benefits, unutilized tax losses and
unutilized capital allowances carried forward. Deferred tax assets relating to the carry forward of unutilized tax losses and unutilized capital allowances are recognized to
the extent that it is probable that future taxable profit will be available against which the unutilized tax losses and unutilized capital allowances can be utilized.Deferred income tax is provided on temporary differences arising from investments in subsidiaries, joint ventures and associates, except where the timing of the reversal of
the temporary difference is controlled by the group and it is probable that the temporary difference will not reverse in the foreseeable future.Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the
deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities where
there is an intention to settle the balances on a net basis.2.16
    
    Employee benefits
 (i)
    
    Pension and provident plans are funded through annual contributions. The group pays fixed contributions into a
separate entity in terms of the defined contribution pension and provident plans which is charged to the
income statement in the year to which they relate. The groups liability is limited to its annually determined
contributions and has no further liability, legally or constructive if the fund does not hold sufficient
assets to pay all employees the benefits relating to employee service in the current and prior periods.(ii)
    
    Medical plans:The group provides medical cover to current employees and certain retirees through certain
funds. The medical accounting costs for the defined benefit plan are assessed using the projected unit credit
method. The health care obligation is measured as the present value of the estimated future cash outflows
using high quality government bond interest rates consistent with the term and risks of the obligation less
the fair value of plan assets together with adjustments for unrecognized past service cost. Actuarial gains
and losses as a result of these valuations are recognized in the income statement at revaluation date. The
future liability for current and retired employees and their dependents is accrued in full based on actuarial
valuations obtained annually.(iii)
    
    Equity compensation benefits:The group operates an equity-settled, share-based payments plan, where the group
grants share options to certain employees in exchange for services received. Equity share-based payments are
measured at fair value that includes market performance conditions but excluded the impact of any service and
non market performance conditions of the equity instruments at the date of the grant. The share-based payments
are expensed over the vesting period, based on the groups estimate of the shares that are expected to
eventually vest. the group used an appropriate option pricing model in determining the fair value of the
options granted. Non-market vesting conditions are included in assumptions about the number of options that
are expected to vest. At each balance sheet date, the estimates of the number of options that are expected to
become exercisable are revised. The impact of the revision of original estimates, if any, are recognized in
the income statement, with a corresponding adjustment to equity. The proceeds received net of any directly
attributable transaction costs are credited to share capital (nominal value) and share premium when the
options are exercised.(iv)
    
    Termination benefitsare payable when employment is terminated before the normal retirement date, or whenever
an employee accepts voluntary redundancy in exchange for these benefits. the group recognizes termination
benefits when it is demonstrably committed to either: terminating the employment of current employees
according to a detailed formal plan without possibility of withdrawal; or providing termination benefits as a
result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after
balance sheet date are discounted to present value.
 F-22




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##### 



Notes to the consolidated financial statements
 (v)
    
    Leave pay:The group accrues for the cost of the leave days granted to employees during the period in which
the leave days accumulate.
 2.17
    
    Share capitalOrdinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from
the proceeds.2.18
    
    LeasesLeases in which a significant portion of the risk and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases
(net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the period of the lease.For the groups policy on finance leases, refer to note 2.5 (v).2.19
    
    Revenue recognition
 (i)
    
    Revenuearising from gold sales is recognized when the price is determinable, the product has been delivered
in accordance with the terms of the contract, the significant risks and rewards of ownership have been
transferred to the customer and collection of the sales price is reasonably assured. These criteria are
typically met when the gold arrives at the refinery.Revenue further excludes value-added tax. Revenues from silver and other by-products sales are credited to
production costs as a by-product credit.(ii)
    
    Interest income: Interest is recognized on a time proportion basis, taking into account the principal
outstanding and the effective rate over the period to maturity, when it is determined that such income will
accrue to the group.(iii)
    
    Dividend incomeis recognized when the shareholders right to receive payment is established. This is
recognized at the last date of registration.
 2.20
    
    Dividends declaredDividends declared are recognized in the period in which they are approved by the Board of directors. Dividends are payable in South African Rand.
 3
    
    Critical accounting estimates and judgements
 The preparation of the financial statements in conformity with IFRS requires the groups management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.The resulting accounting estimates may differ from actual results. 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:
 3.1
    
    Impairment of mining assetsThe recoverable amount of mining assets is generally determined utilizing discounted future cash flows. Management also considers such factors as the quality of the individual
orebody, market risk, asset specific risks and country risk in determining the fair value.Key assumptions for the calculations of the mining assets recoverable amounts are the gold price, marketable discount rates (cost-to-sell), exchange rates and the annual
life-of-mine plans. In determining the gold price to be used, management assess the long-term views of several reputable institutions on the gold price and based on this,
derive the gold price. The life-of-mine plans are based on the proved and probable reserves as included in the Reserve Declaration, which are determined in terms of SAMREC and
JORC, as well as resources where management has high confidence in the ore-body and economical recovery of gold, based on historic and similar geological experience. The
marketable discount rate was estimated at 2%.
 F-23




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##### 



Notes to the consolidated financial statements
 During the year under review, the group calculated the recoverable amounts (generally fair value less costs to sell) based on updated life of mine plans, a gold price of R275
000 per kilogram (US$1050 per ounce) and a post tax real discount rate, which ranges between 5.92% and 10.72% depending on the asset (2009: R225 000 per kilogram (US$750 per
ounce) and a 9.34% discount rate) (2008: R180 000 per kilogram (US$750 per ounce) and a discount rate of 11.36%). Cash flows used in the impairment calculations are based on
life-of-mine plans which exceed five years for the majority of the mines. Refer to note 5 for details of impairments recorded.Should managements estimate of the future not reflect actual events, further impairments may be identified. Factors affecting the estimates include:
 
    
    changes to proved and probable ore reserves;
    
    economical recovery of resources
    
    the grade of the ore reserves may vary significantly from time to time;
    
    review of strategy;
    
    differences between actual commodity prices and commodity price assumptions;
    
    unforeseen operational issues at the mines;
    
    changes in capital, operating mining, processing and reclamation costs.
 Sensitivity analysisOne of the most significant assumptions that influence the life-of-mine plans and therefore impairments is the expected gold price. A 10% decrease in the gold price at June
30, 2010 would have resulted in an additional impairment at Steyn 2 Shaft of US$1.8 million. This analysis assumes that all other variables remain constant.
 3.2
    
    Impairment of investment in associateThe investments in associates are evaluated annually for impairment by comparing the entire carrying value of the investment to the recoverable amount, which is the higher of
value in use or fair value less costs to sell.3.3
    
    Valuation of available-for-sale financial assetsIf the value of financial instruments cannot be obtained from an active market, the group establishes 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. When considering indications of an impairment, management considers a prolonged decline to be longer than 12 months. The significance of the
decline is assessed for each security individually.3.4
    
    Estimate of exposure and liabilities with regard to rehabilitation costsEstimated long-term environmental obligations, 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.Significant judgement is applied in estimating ultimate rehabilitation cost that will be required in future to rehabilitate the groups mines. Ultimate cost may significantly
differ from current estimates.Management used an inflation rate of 6.23% (2009: 6%) (2008: short-term (two years): 9% and long term: 6%) and the expected life of the mines according to the life-of-mine
plans in the calculation of the estimated net present value of the rehabilitation liability. The discount rates used for the calculation are dependant on the shafts life of
mine and are as follows: for 12 months  6.75% (2009: 6.75%) (2008: 12.25%); for 1  5 years  8% (2009: 8.25%) (2008: 11.75%); for 6  9 years  8.5% (2009: 8.25%) (2008:
10.5%) and for 10 years or more  9% (2009: 8.75%) (2008: 10.25%). These estimates were based on recent yields determined on government bonds.3.5
    
    Estimate of employee benefit liabilitiesAn updated actuarial valuation is carried out at the end of each financial year. Assumptions used to determine the liability included a discount rate of 10.3%, no increases in
employer subsidies (in terms of the agreement) and mortality rates according to the SA 1956/62 mortality table ( SA a mf tables) (60 years) and a medical inflation rate of
8.14% (2009: discount rate of 10%, 60 years and 7.8% inflation rate) (2008: discount rate of 12%, 60 years and 9.8% inflation rate).Management determined the discount rate by assessing financial instruments with similar terms to the liability. The changes to the discount rate and medical inflation rate are
similar to changes in interest and inflation rates in South Africa.3.6
    
    Estimate of taxationThe group is subject to income tax in numerous jurisdictions. Significant judgement is required in determining the worldwide provision for 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 audit queries based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters are different from the amounts that were initially
recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.
 F-24




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##### 



Notes to the consolidated financial statements
 Management has to exercise judgement with regards to deferred tax assets. Where the possibility exists that no future taxable income may flow against which these assets can be
offset, the deferred tax assets are not recognized.Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled. When
different tax rates apply to different levels of taxable income, deferred tax assets and liabilities are measured using the average tax rates that are expected to apply to the
taxable profit (tax loss) of the periods in which the temporary differences are expected to reverse. At the groups South African operations, such average tax rates are
directly impacted by the profitability of the relevant mine. The deferred tax rate is therefore based on the current estimate of future profitability of an operation when
temporary differences will reverse, based in tax rates and tax laws that have been enacted at the balance sheet date.The future profitability of each mine, in turn, is determined by reference to the Life-of-Mine (LoM) plan for that operation. The LoM plan is influenced by factors as
disclosed in note 3.1, which may differ from one year to the next and ultimately result in the deferred tax rate changing from one year to the next. Refer to note 13 for
further detail.3.7
    
    Fair value of share-based paymentsThe fair value of options granted are being determined using either a binominal, Black-Scholes or a Monte Carlo valuation model. The significant inputs into the model are:
vesting period, risk free interest rate, volatility, price on date of grant and dividend yield. (Refer to note 34 for detail on each of the share option schemes.)3.8
    
    Impairment of goodwillDue to the wasting nature of mining assets and the finite life of a mines reserves, the allocation of goodwill to a shaft will eventually result in an impairment charge for
the goodwill. The group tests annually whether separately identifiable goodwill has suffered any impairment, in accordance with the accounting policy stated in note 2.8. These
calculations require the use of estimates as stated in note 3.1.3.9
    
    Gold in lock-upGold in lock-up is estimated based on the expected volumes treated and calculated plant call factor. Plant call factor is the efficiency measurement of the percentage of gold
extracted from the ore. Management need to exercise judgement with regards to lock-up volumes, life-of-mine plans, gold prices, exchange rates and post tax real discount
rates.3.10
    
    Assessment of contingenciesContingencies will only realize when one or more future events occur or fail to occur. The exercise of significant judgement and estimates of the outcome of future events are
required during the assessment of the impact of such contingencies.3.11
    
    Gold mineral reserves and resourcesGold mineral reserves and resources are estimates of the amount of ounces that can be economically and legally extracted from the groups properties. In order to calculate the
gold mineral reserves and resources, estimates and assumptions are required about a range of geological, technical and economic factors, including quantities, grades,
production techniques, recovery rates, production costs, commodity prices and exchange rates.Estimating the quantities and/or grade of the reserves and resources requires the size, shape and depth of the 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 judgements and calculations to interpret the data.Because the economic assumptions used to estimate the gold mineral reserves and resources change from year to year, and because additional geological data is generated during
the course of operations, estimates of the mineral reserves and resources may change from year to year. Changes in the reserves and resources may affect the groups financial
results and financial position in a number of ways, including:
 
    
    asset carrying values may be affected due to changes in estimated cash flows;
    
    depreciation and amortization charged in the income statement may change as they are calculated on the
units-of-production method; and
    
    environmental provisions may change as the timing and/or cost of these activities may be affected by the
change in mineral reserves.
 At the end of each financial year, the estimate of proved and probable gold mineral reserves and resources is updated. Depreciation of mining assets is prospectively adjusted,
based on these changes.
 F-25




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##### 



Notes
to the consolidated financial statements
 3.12
    
    Production start dateVarious relevant criteria are considered in order to assess when the mine is substantially complete and ready for its intended use and moves into the production phase. Some of
the criteria would include but are not limited to the following:
 
    
    the level of capital expenditure compared to the total project cost estimates;
    
    the ability to produce gold in a saleable form (where more than an insignificant amount of gold has been
produced); and
    
    the ability to sustain the on-going production of gold.
 F-26




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##### 



4
    
    Financial risk managementThe groups financial instruments expose it to a variety of financial risks: market
risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and other price risk),
credit risk and liquidity risk. The group may use derivative financial instruments to hedge certain risk exposures.The groups financial instruments are set out below:
 Available-
    
    
    
    
    
    
    
    
    
    
    Financialfor-sale
    
    
    Held-to-
    
    
    Fair value
    
    
    liabilities atLoans and
    
    
    financial
    
    
    maturity
    
    
    through profit
    
    
    amortizedFigures in million (US Dollar)
    
    receivables
    
    
    assets
    
    
    investments
    
    
    or loss
    
    
    costAt June 30, 2010Restricted cash
    
    
    19
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Restricted investments
    
    
    
    
    
    
    
    
    
    
    53
    
    
    
    175
    
    
    
    Investments in financial assets
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    Trade and other receivables
    
    
    97
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cash and cash equivalents
    
    
    101
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Borrowings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    156Trade and other payables
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    59At June 30, 2009Restricted cash
    
    
    21
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Restricted investments
    
    
    
    
    
    
    
    
    
    
    212
    
    
    
    
    
    
    
    Investments in financial assets
    
    
    
    
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    Trade and other receivables
    
    
    90
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cash and cash equivalents
    
    
    253
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Borrowings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    47Trade and other payables
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    71
 The carrying amount of loans and receivables, held-to-maturity investments and financial liabilities at amortized cost approximate their fair value.Risk management is carried out by a central treasury department (group treasury) under policies approved by the Board of Directors. Group treasury identifies, evaluates and hedges certain
selected financial risks in close co-operation with the groups operating units. The Board provides written principles for overall risk management, as well as written
policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative
financial instruments and non-derivative financial instruments, and the investment of excess liquidity.
 (a)
    
    Market risk
 (i) Foreign exchange risk
 The group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US dollar (US$). Foreign exchange risk arises from future commercial transactions, recognized assets and liabilities and net investments in foreign operations. Foreign exchange risk arises when future commercial transactions or recognized assets or liabilities are denominated in a
currency that is not the entitys functional currency. Harmonys revenues are sensitive to the R/US$ exchange rate as all revenues are generated by gold sales denominated in US$. Harmony generally does not enter into forward sales, derivatives or other hedging arrangements to establish exchange rates in advance for the sale of its future gold production.The group is exposed to foreign exchange risk arising from intercompany loans denominated in a currency other than the functional currency of that entity. Harmony generally does not enter into forward sales, derivatives or other hedging arrangements to manage this risk.
 F-27




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##### 



Sensitivity analysisThe group has reviewed its foreign currency exposure on financial assets and financial liabilities and has identified the following sensitivities for a 10% change in the exchange rate.
 US DollarFigures in million
    
    2010
    
    
    2009A$ against US$Increase by ten percent
    
    
    1
    
    
    
    1Decrease by ten percent
    
    
    (1
    )
    
    
    (1
    )Closing rate
    
    
    0.85
    
    
    
    0.81Kina against A$Increase by ten percent
    
    
    30
    
    
    
    17Decrease by ten percent
    
    
    (30
    )
    
    
    (17
    )Closing rate
    
    
    2.31
    
    
    
    2.71
 (ii) Other price riskThe group is exposed to the risk of fluctuations in the fair value of the available-for-sale financial assets as a result of changes in market prices (other than changes in interest rates and foreign currencies). Harmony generally does not use any derivative instruments to manage this risk.Sensitivity analysisA one percent increase in the share price at the reporting date, with all other variables held constant, would have increased other comprehensive income by US$1.8 million (2009: US$0.1 million); an equal change in the opposite direction would have decreased other comprehensive income by US$1.8 million (2009: US$0.1 million). The analysis is performed on the same basis for 2009.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. Harmony generally does not enter into forward sales, derivatives or other hedging arrangements to establish a price in advance for the sale of future gold production.(iii) Cash flow and fair value Interest rate riskThe groups interest rate risk arises mainly from long-term borrowings. The group has variable interest rate borrowings. Variable rate borrowings expose the group to cash flow interest rate risk. The group has not entered into interest rate swap agreements.Sensitivity analysisA change of 100 basis points in interest rates at the reporting date would have increased/(decreased) profit or loss before tax by the amounts shown below. This analysis assumes that all other variables remain constant. The analysis is performed on the same basis for 2009.
 US DollarFigures in million
    
    2010
    
    
    2009Increase by 100 basis points
    
    
    2
    
    
    
    Decrease by 100 basis points
    
    
    (2
    )
    
    
    
 (b)
    
    Credit riskCredit risk is the risk that a counterparty may default or not meet its obligations timeously. Financial instruments, which subject the group to concentrations of credit risk, consist predominantly of restricted cash, restricted investments, trade and other receivables (excluding non-financial instruments) and cash and cash equivalents.Exposure to credit risk on trade and other receivables is monitored on a regular basis. The credit risk arising from restricted cash, cash and cash equivalents and restricted investments is managed by ensuring amounts are only invested with financial institutions of good credit quality. The group has policies that limit the amount of credit exposure to any one financial institution.
 F-28




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##### 



Cash and cash equivalents and restricted cashFinancial institutions credit rating by exposure:
 US DollarFigures in million
    
    2010
    
    
    2009Credit ratingSouth African operationsAAA
    
    
    57
    
    
    
    92AA(1)
    
    
    7
    
    
    
    13AA-(1)
    
    
    25
    
    
    
    81A+
    
    
    5
    
    
    
    47A
    
    
    2
    
    
    
    Total South African operations
    
    
    96
    
    
    
    233International operationsAA(1)
    
    
    24
    
    
    
    40Total International operations
    
    
    24
    
    
    
    40Total cash and cash equivalents and restricted cash
    
    
    120
    
    
    
    273(1) Includes restricted cashAA
    
    
    7
    
    
    
    9AA-
    
    
    12
    
    
    
    12Total restricted cash
    
    
    19
    
    
    
    21
 It is the policy of the group to renegotiate credit terms with long-standing customers who have a good credit history with the group. These customers are monitored on an ongoing basis to ensure that the customer remains within the renegotiated terms.The groups maximum exposure to credit risk is
represented by the carrying amount of all financial assets determined
to be exposed to credit risk, amounting to US$445.5 million as at June 30, 2010 (2009: US$575.8 million).(c)
    
    Liquidity RiskPrudent liquidity risk management implies maintaining sufficient cash and marketable securities, and the availability of funding through an adequate amount of committed credit facilities.In the ordinary course of business, the group receives cash from its operations and is required to fund working capital and capital expenditure requirements. The cash is managed to ensure that surplus funds are invested in a manner to achieve market-related returns and to provide sufficient liquidity at the minimum risk. The group is able to actively source financing at competitive rates.
 F-29




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##### 



The following are the contractual maturities of financial liabilities (including principle and interest payments):
 US DollarMore thanFigures in million
    
    Current
    
    
    1 year2010Borrowings(1)(2)(3)
    
    
    41
    
    
    
    152Trade and other payables (excluding non-financial liabilities)
    
    
    59
    
    
    
    100
    
    
    
    1522009Borrowings(1)(2)
    
    
    33
    
    
    
    15Trade and other payables (excluding non-financial liabilities)
    
    
    71
    
    
    
    104
    
    
    
    15
 
 (1)
    
    US$21 million is due between 0 to 6 months. (2009: nil).(2)
    
    US$20 million is due between 6 to 12 months. (2009: US$32.9 million).(3)
    
    US$40 million is due between 1 to 2 years. (2009: US$4.6 million). (d)
    
    Capital risk managementThe primary objective of managing the groups capital is to ensure that there is sufficient capital available to support the funding requirements of the group, in a way that optimizes the cost of capital and matches the current strategic business plan.The group manages and makes adjustments to the capital structure, which consists of debt and equity as and when borrowings mature or when funding is required. This may take the form of raising equity, market or bank debt or hybrids thereof. The group may also adjust the amount of dividends paid, sell assets to reduce debt or schedule projects to manage the capital structure.There were no changes to the groups approach to capital management during the year.(e)
    
    Fair value determinationEffective July 1, 2009, the group adopted the amendment to IFRS 7 for financial instruments that are measured in the balance sheet at fair value. This requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:
 1) Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).2) Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2).3) Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).
 The following table presents the groups assets and liabilities that are measured at fair value at June 30, 2010.
 Figures in million
    

US DollarAssets
    
    Level 1
    
    
    Level 2
    
    
    Level 3Available-for-sale financial assets
    
    
    
    
    
    
    
    
    
    
    2Fair value through profit or loss
    
    
    
    
    
    
    175
    
    
    
    
 The following table presents the groups assets and liabilities that are measured at fair value at June 30, 2009.
 Figures in million
    
    US DollarAssets
    
    Level 1
    
    
    Level 2
    
    
    Level 3Available-for-sale financial assets
    
    
    
    
    
    
    6
    
    
    
    1Fair value through profit or loss
    
    
    
    
    
    
    
    
    
    
    
 F-30




---



##### 



US DollarFigures in million
    

2010
    
    

2009
    
    

2008
 5
    
    Cost of sales
 Production costs (a)
    
    
    1,103
    
    
    
    850
    
    
    
    918Amortization and depreciation of mining properties, mine development costs and mine plant facilities
    
    
    175
    
    
    
    130
    
    
    
    107Amortization and depreciation of assets other than mining and mining related assets (b)
    
    
    6
    
    
    
    9
    
    
    
    10Rehabilitation expenditure (c)
    
    
    4
    
    
    
    1
    
    
    
    1Care and maintenance cost of restructured shafts
    
    
    8
    
    
    
    5
    
    
    
    10Employment termination and restructuring costs (d)
    
    
    27
    
    
    
    4
    
    
    
    29Share-based payments (e)
    
    
    20
    
    
    
    13
    
    
    
    6Impairment of assets (f)
    
    
    43
    
    
    
    71
    
    
    
    40Provision for post retirement benefits (g)
    
    
    (3
    )
    
    
    
    
    
    
    1Total
cost of sales
    
    
    1,383
    
    
    
    1,083
    
    
    
    1,122
 (a)
    
    Production costs include mine production, transport and refinery costs,
applicable general and administrative costs, movement in inventories and ore
stockpiles and ongoing environmental rehabilitation costs as well as transfers to
and from deferred stripping. Ongoing employee termination costs are included,
however employee termination costs associated with major restructuring and shaft
closures are excluded. Production costs, analyzed by nature, consist of the
following:
 US DollarFigures in million
    

2010
    
    

2009
    
    

2008Labor costs, including contractors
    
    
    762
    
    
    
    540
    
    
    
    632Stores and materials
    
    
    302
    
    
    
    215
    
    
    
    229Water and electricity
    
    
    160
    
    
    
    93
    
    
    
    90Insurance
    
    
    24
    
    
    
    25
    
    
    
    19Transportation
    
    
    19
    
    
    
    15
    
    
    
    9Changes in inventory
    
    
    (3
    )
    
    
    (2
    )
    
    
    11Capitalization of mine development costs
    
    
    (157
    )
    
    
    (106
    )
    
    
    (109
    )Deferred stripping
    
    
    1
    
    
    
    
    
    
    
    By-products sales
    
    
    (5
    )
    
    
    (3
    )
    
    
    (4
    )Royalty expense
    
    
    4
    
    
    
    
    
    
    
    Other
    
    
    (4
    )
    
    
    73
    
    
    
    41Total production cost
    
    
    1,103
    
    
    
    850
    
    
    
    918
 (b)
    
    Amortization and depreciation of assets other than mining and mining related
assets consist of the following:
 US DollarFigures in million
    

2010
    
    

2009
    
    

2008Other non-mining assets
    
    
    2
    
    
    
    1
    
    
    
    4Intangible assets
    
    
    4
    
    
    
    3
    
    
    
    2Amortization of issue costs
    
    
    
    
    
    
    5
    
    
    
    4Total amortization and depreciation
    
    
    6
    
    
    
    9
    
    
    
    10
 (c)
    
    For the assumptions used to calculate the rehabilitation costs, refer to note 3.4.This expense includes the change in estimate for the rehabilitation provision as
well as ongoing rehabilitation cost.
 F-31




---



##### 



US DollarFigures in million
    
    2010
    
    
    2009
    
    
    2008
 (d)
    
    Employment termination and restructuring costs consist of the following:
 Harmony Gold Mining Company Limited (Harmony)
    
    
    9
    
    
    
    1
    
    
    
    10Randfontein Estates Limited (Randfontein)
    
    
    1
    
    
    
    1
    
    
    
    5Evander Gold Mines Limited (Evander)
    
    
    15
    
    
    
    1
    
    
    
    3ARMGold/Harmony Freegold Joint Venture Company (Proprietary) Limited (Freegold)
    
    
    2
    
    
    
    1
    
    
    
    10Avgold Limited (Avgold)
    
    
    
    
    
    
    
    
    
    
    1Total employment termination and restructuring cost
    
    
    27
    
    
    
    4
    
    
    
    29
 During fiscal 2010 certain shafts in Virginia (included in Harmony) and Evander were closed
and placed on care and maintenance. These closures was due to mining no longer being economically
viable as a result of the current economic situation. The group also engaged in a voluntary
retrenchment process during the year, resulting in retrenchment costs for various operations.(e)
    
    Refer to note 34 for details on the share-based payments schemes operated by the group.(f)
    
    Impairment consist of the following:
 US DollarFigures in million
    
    2010
    
    
    2009
    
    
    2008Virginia
(1)
    
    
    33
    
    
    
    7
    
    
    
    Target
(1)
    
    
    1
    
    
    
    31
    
    
    
    Evander
(1)
    
    
    9
    
    
    
    33
    
    
    
    16Kalgold
(1)
    
    
    
    
    
    
    
    
    
    
    8Other
underground  assets
(2)
    
    
    
    
    
    
    
    
    
    
    3Other
underground  goodwill
(2)
    
    
    
    
    
    
    
    
    
    
    13Total impairment of assets
    
    
    43
    
    
    
    71
    
    
    
    40
 
 (1)
    
    During fiscal 2010 impairments to the value of US$40 million were recognized mainly as a
result of the shaft closures discussed under note 5(d) above. The remaining balance for 2010 and
the impairment recognized in 2009 resulted from revised business (life-of-mine) plans, which are
completed in June of each year and included increases in electricity cost and labor cost. Included
in the business plans in 2009 for Evander and Target was additional capital expenditure that was
needed to access reserve ounces in areas where geological anomalies have been discovered.These adjustments impacted negatively on the recoverable amount of property, plant and
equipment and contributed to the recognition of the impairments at the shafts. Impairment tests
were performed as required by IAS 36, Impairment of Assets, and as a result these impairments were
recorded. For assumptions used to calculate the recoverable amount, refer to note 3.1.(2)
    
    During 2008 certain underground operations, classified as Other  underground, was also
impaired. For further details on the allocation of goodwill, refer to note 17. F-32




---



##### 



(g)
    
    The net credit of US$2.5 million is a result of curtailments in 124 members post
employment subsidies due to renegotiation of employment contracts. These members were transferred
from Freegold employment conditions to Harmony employment conditions.
 US DollarFigures in million
    
    2010
    
    
    2009
    
    
    2008
 6
    
    Profit on sale of property, plant and equipment
 Profit on sale of property, plant and equipment
    
    
    14
    
    
    
    114
    
    
    
    
 During fiscal 2010 the group concluded the sale of the Jeanette prospecting rights to Taung
Gold Limited for a total consideration and profit of US$10 million.During June 2010 the group concluded a sale of royalty rights in Australia to Regis Resources
Limited for a total consideration and profit of US$3.5 million.Included in the total for 2009 is US$111.9 million profit on sale of 50% of Harmonys gold
and copper assets in Morobe province, PNG, to Newcrest Mining Limited (Newcrest) in terms of the
Master Purchase and Farm-in agreement. The sale was concluded in three stages. Refer to note 22.
 US DollarFigures in million
    
    2010
    
    
    2009
    
    
    2008
 7
    
    Other expenses  net
 Foreign exchange loss/(gain)  net (a)
    
    
    10
    
    
    
    (14
    )
    
    
    (13
    )Loss on financial instruments
    
    
    
    
    
    
    
    
    
    
    1Bad debts provision (credit)/expense (b)
    
    
    (2
    )
    
    
    11
    
    
    
    14Bad debts written off (b)
    
    
    4
    
    
    
    3
    
    
    
    Other (income)/expenses  net
    
    
    (4
    )
    
    
    3
    
    
    
    13Total other expenses  net
    
    
    8
    
    
    
    3
    
    
    
    15
 (a)
    
    (i) During fiscal 2010, foreign exchange losses relating to the Australasian intercompany
loans amounting to US$12.2 million (2009: loss of US$22.3 million) (2008: gain of US$15.3 million)
were recognized in the consolidated income statement.During fiscal 2008, two intercompany loans, previously designated as forming part of the net
investment of the groups international operations, were de-designated, mainly as a result of the
expected repayment of these loans. In accordance with the groups accounting policies, accumulated
exchange gains that arose while the loans were considered to form part of the groups net
investment in its international operations remain in equity and are only reclassified to the
consolidated income statements as and when the loans are repaid. The repayment of these loans
resulted in an exchange gain of US$53.1 million being recognized in the consolidated income
statement in the 2009 financial year. Following the adoption of the amendment to IAS 21, The
Effects of Changes in Foreign Exchange Rates,on 1 July 2009, the remaining accumulated exchange
reserves relating to these de-designated loans will remain in equity until the Australian and or
PNG operations are sold, or control is otherwise lost.
 F-33




---



##### 



(ii) In fiscal 2010 foreign exchange gains amounting to US$2.9 million were realized on the
liquidation of Harmony Gold Peru SA and Harmony Precious Metal Services SAS, wholly owned
subsidiaries of Harmony.(iii) During fiscal 2009, foreign exchange losses of US$30.0 million were recognised relating
to the exchange movements on the US$ denominated Pamodzi Resources Fund 1 LLP (PRF) loan for the
Cooke transaction. Refer to note 21 for further detail.In anticipation of the receipt of the purchase consideration for the Cooke assets, the group
arranged a forward exchange contract, allowing the group to sell the proceeds at R10.27 per US$1
on 21 April 2009. The gain on this arrangement was US$21.1 million.(b)
    
    In 2010 financial year, trade debt and loans of US$3.8 million) (2009: US$3.4 million)
was written off as the group considered the debts irrecoverable. During 2010 a net credit to the
doubtful debt provision of US$2.1 million was made, where debt was no longer considered doubtful.
During the 2009 financial year a provision of US$11.2 million was made where the group considered
the recoverability of the debts to be doubtful. Refer to note 24.The provision amount in 2008 includes a provision for the outstanding balance of US$6.4
million on the sale of Deelkraal to Ogoerion Construction CC.
 US DollarFigures in million
    
    2010
    
    
    2009
    
    
    2008
 8
    
    Operating profitThe following have been included in operating profit:
 Auditors remuneration
    
    
    3
    
    
    
    3
    
    
    
    4ExternalFees  current year
    
    
    2
    
    
    
    2
    
    
    
    2Fees  prior year under provision
    
    
    
    
    
    
    
    
    
    
    Fees  other services
    
    
    
    
    
    
    
    
    
    
    1InternalFees  current year
    
    
    1
    
    
    
    1
    
    
    
    1
 9
    
    Loss on sale of investment in subsidiary
 Loss on sale of Big Bell Operations (Proprietary) Limited
    
    
    3
    
    
    
    
    
    
    
    
 During January 2010 the group concluded the sale of Big Bell Operations (Proprietary) Limited
(Big Bell), an operation in Western Australia, for a total consideration of US$3.2 million. The
group realized a net loss of US$3.3 million after recycling a foreign currency reserve of US$4
million on disposal date from other comprehensive income to the consolidated income statement. An
amount of US$3.0 million was released to the group as a result of the performance bonds being
replaced by the purchaser.
 F-34




---



##### 



US DollarFigures in million
    
    2010
    
    
    2009
    
    
    2008
 10
    
    Net gain/(loss) on financial instruments
 Available-for-saleImpairment recognized in profit or loss (a)
    
    
    
    
    
    
    (12
    )
    
    
    Loss on sale of investments (b)
    
    
    
    
    
    
    
    
    
    
    (63
    )Realized portion of fair value movement (b)
    
    
    1
    
    
    
    2
    
    
    
    1
    
    
    
    (10
    )
    
    
    (63
    )Fair value through profit or lossFair value gain on environmental trust funds
    
    
    4
    
    
    
    
    
    
    
    Fair value adjustment (c)
    
    
    
    
    
    
    
    
    
    
    54
    
    
    
    
    
    
    
    5Total net gain/(loss) on financial instruments
    
    
    5
    
    
    
    (10
    )
    
    
    (58
    )
 (a)
    
    The impairment in the 2010 and 2009
financial years relates to the
portion of fair value losses
reclassified from other reserves to
the income statement when certain
investments were considered to be
permanently impaired. The amount in
2010 relates to several small
investments, while the amount in
2009 relates to the Dioro
Exploration NL (Dioro) investment.(b)
    
    The group disposed of its entire
shareholding in Avoca Resources
Limited (Avoca), Alloy Resources
Limited (Alloy) and various other
smaller investments during the 2010
financial year for a total
consideration of US$6.6 million.
Total fair value gains of US$1
million relating to these
investment were reclassified from
other reserves to the income
statement. Refer to note 20 and 26
in this regard.The amount in the 2009 financial
year relates to the realised
portion of the fair value gains
reclassified from other reserves to
the income statement on the
disposal of the Dioro investment.
Refer to note 20(b) and 26 for
further detail.During the 2008 financial year the
group disposed of its remaining
investment (7 348 079 shares) in
Gold Fields Limited for a loss of
US$63 million, which was acquired
in December 2006 in exchange for
its interest in Western Areas
Limited.(c)
    
    The sale agreement of African
Rainbow Minerals Limited (ARM)
shares gave rise to a
non-derivative financial instrument
that was designated as at fair
value through profit or loss. The
fair value movement recognized is
equivalent to the interest paid on
the Nedbank loans, which were
guaranteed by the group. These
guarantees were cancelled in
September 2007.
 US DollarFigures in million
    
    2010
    
    
    2009
    
    
    2008
 11
    
    Investment income
 Interest received
    
    
    25
    
    
    
    49
    
    
    
    34Loans and receivables
    
    
    3
    
    
    
    10
    
    
    
    5Held-to-maturity investments
    
    
    10
    
    
    
    19
    
    
    
    18Cash and cash equivalents
    
    
    12
    
    
    
    20
    
    
    
    11Dividend income on available-for-sale investments
    
    
    
    
    
    
    
    
    
    
    5Total investment income
    
    
    25
    
    
    
    49
    
    
    
    39
 F-35




---



##### 



US DollarFigures in million
    
    2010
    
    
    2009
    
    
    2008
 12
    
    Finance costs
 Financial liabilitiesBank and short-term facilities
    
    
    
    
    
    
    2
    
    
    
    5Convertible unsecured fixed rate bonds
    
    
    
    
    
    
    15
    
    
    
    22Nedbank Limited
    
    
    11
    
    
    
    23
    
    
    
    38Westpac Bank
    
    
    
    
    
    
    
    
    
    
    Rand Merchant Bank
    
    
    
    
    
    
    
    
    
    
    2Other creditors
    
    
    
    
    
    
    
    
    
    
    1Total finance costs from financial liabilities
    
    
    11
    
    
    
    40
    
    
    
    68Non-financial liabilitiesPost-retirement benefits
    
    
    2
    
    
    
    2
    
    
    
    1Time value of money and inflation component of rehabilitation costs
    
    
    17
    
    
    
    11
    
    
    
    15South African Revenue Services (SARS)
    
    
    2
    
    
    
    2
    
    
    
    8Total finance costs from non-financial liabilities
    
    
    21
    
    
    
    15
    
    
    
    24Total finance cost before interest capitalized
    
    
    32
    
    
    
    55
    
    
    
    92Interest capitalized
    
    
    
    
    
    
    (31)
    
    
    
    (22)Total finance costs
    
    
    32
    
    
    
    24
    
    
    
    70
 The capitalization rate used to determine the amount of borrowing costs eligible for capitalization during
the year is 10.6% (2009: 12.3% and 2008: 11.7%).
 US DollarFigures in million
    
    2010
    
    
    2009
    
    
    2008
 13
    
    Taxation
 SA normal taxationMining tax (a)- current year
    
    
    6
    
    
    
    14
    
    
    
    5- prior year
    
    
    
    
    
    
    5
    
    
    
    15Non-mining tax (b)- current year
    
    
    5
    
    
    
    18
    
    
    
    1- prior year
    
    
    
    
    
    
    1
    
    
    
    1Deferred tax (c)- deferred tax
    
    
    48
    
    
    
    40
    
    
    
    55Foreign normal taxation- deferred tax (d)
    
    
    (15
    )
    
    
    (56
    )
    
    
    (12
    )Total normal taxation
    
    
    44
    
    
    
    22
    
    
    
    65
 (a)
    
    Mining tax on gold mining income in South Africa is determined according to a
formula, based on the taxable income from mining operations. Gold mining
companies within the group that have elected to be exempt from Secondary Tax
on Companies (STC) are taxed at higher rates than those that have not made
the election.All qualifying mining capital expenditure is deducted from taxable mining
income to the extent that it does not result in an assessed loss. Accounting
depreciation is eliminated when calculating the South African mining tax
income. Excess capital expenditure is carried forward as unredeemed capital
to be claimed from future mining taxable income. The group has several tax
paying entities in South Africa. In terms of the mining ring-fencing
application, each ring-fenced mine is treated separately and deductions can
normally only be utilized against mining income generated from the relevant
ring-fenced mine.
 F-36




---



##### 



The formulas for determining the South African gold mining tax rates for the
2008, 2009 and 2010 financial years are:Y = 43 - 215/X (entities whom elected not to pay STC)Y = 34 - 170/X (entities whom did not make the election)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
so derived, expressed as a percentage.(b)
    
    Non-mining income is taxed at 35% (exempt from STC) and 28% (no election
made). Non-mining companies are taxed at the statutory corporate rate of 28%.(c)
    
    The deferred tax rate used to calculate deferred tax is based on the current
estimate of future profitability when temporary differences will reverse,
based on tax rates and tax laws that have been enacted at balance sheet date.
Depending on the profitability of the operations, the deferred tax rate can
consequently be significantly different from year to year.(d)
    
    Mining and non-mining income of Australian and PNG operations are taxed at a
standard tax rate of 30%.Income and mining tax ratesThe tax rates remained unchanged for the 2010 and 2009 financial years.Major items causing the groups income tax provision to differ from the
maximum mining statutory tax rate of 43% (2009: 43% and 2008: 43%) were:
 US DollarFigures in million
    
    2010
    
    
    2009
    
    
    2008Tax on net profit from continuing operations at the maximum mining statutory
tax rate
    
    
    (10
    )
    
    
    (102
    )
    
    
    17Non-allowable deductions
    
    
    (19
    )
    
    
    (33
    )
    
    
    (93
    )Profit/(loss) from associates
    
    
    3
    
    
    
    1
    
    
    
    (5
    )Difference between effective mining tax rate and statutory mining rate on
mining income
    
    
    2
    
    
    
    14
    
    
    
    4Difference between non-mining tax rate and statutory mining rate on
non-mining income
    
    
    3
    
    
    
    11
    
    
    
    Effect on temporary differences due to changes in effective tax rates
    
    
    (95
    )
    
    
    53
    
    
    
    (10
    )Prior year adjustment  mining and non-mining tax
    
    
    
    
    
    
    (5
    )
    
    
    (16
    )Capital allowance, sale of business and other rate differences
    
    
    72
    
    
    
    39
    
    
    
    38Income and mining taxation
    
    
    (44
    )
    
    
    (22
    )
    
    
    (65
    )Effective income and mining tax rate
    
    
    183
    %
    
    
    9
    %
    
    
    -167
    %
 F-37




---



##### 



Notes to the consolidated financial statements
 US DollarFigures in million
    
    2010
    
    
    2009
 Deferred taxDeferred tax liabilities and assets on the balance sheet as
at June 30, 2010 and June 30, 2009 relate to the
following:
 Gross deferred tax liability
    
    
    711
    
    
    
    643Amortization and depreciation
    
    
    709
    
    
    
    620Product inventory not taxed
    
    
    
    
    
    
    12Other
    
    
    2
    
    
    
    11Gross deferred tax asset
    
    
    (248
    )
    
    
    (222
    )Unredeemed capital expenditure
    
    
    (198
    )
    
    
    (183
    )Provisions, including non-current provisions
    
    
    (35
    )
    
    
    (30
    )Tax losses
    
    
    (15
    )
    
    
    (9
    )Disposal groups classified as held for sale
    
    
    
    
    
    
    Net deferred tax liability
    
    
    463
    
    
    
    421
 Movement in the net deferred tax liability recognized in the balance sheet is as follows:
 Balance at beginning of year
    
    
    421
    
    
    
    383Total charge per income statement
    
    
    33
    
    
    
    29Foreign currency translation
    
    
    9
    
    
    
    9Tax directly charged to equity
    
    
    
    
    
    
    Balance at end of year
    
    
    463
    
    
    
    421
 The following amounts that is expected to realize or be
recovered in the next 12 months have been included in the
deferred tax liabilities and assets:
 Deferred tax liabilities
    
    
    37
    
    
    
    15Deferred tax assets
    
    
    (25
    )
    
    
    (12
    )Net current deferred tax liability
    
    
    12
    
    
    
    3
 As at June 30, certain subsidiaries in the group had the following tax credits:
 Unredeemed capital expenditure available for utilization against future mining taxable income1,783
    
    
    
    1,586Tax losses carried forward utilizable against taxable income
    
    
    52
    
    
    
    25Capital Gains Tax (CGT) losses available to be utilized against future CGT gains.
    
    
    61
    
    
    
    74As at June 30, the group has not recognized the following deferred tax asset amounts386
    
    
    
    379
 The unrecognized temporary differences are:
 Unredeemed capital expenditure
    
    
    1,070
    
    
    
    926Tax losses
    
    
    15
    
    
    
    27CGT losses
    
    
    61
    
    
    
    74Temporary differences relating to investments in associates
    
    
    156
    
    
    
    154
 Secondary Taxation on CompaniesSTC is a tax levied on South African companies at a rate of 10% with effect from October 1, 2007 on dividends
distributed.
 F-38




---



##### 



Notes to the consolidated financial statements
 Current and deferred tax are measured at the tax rate applicable to undistributed income and therefore only take
STC into account to the extent that dividends have been received or paid.On declaration of a dividend, the Company includes the STC on this dividend in its computation of the income tax
expense in the period of such declaration.
 US DollarFigures in million
    
    2010
    
    
    2009Available STC credits at end of year
    
    
    18
    
    
    
    35
 On August 13, 2010, the Board of Directors approved a final dividend for the 2010 financial year of 50 SA cents
per share. The total dividend amounts to US$29.3 million As the dividends declared exceed the STC credits
available, STC on the amount of US$9.6 million is payable at a rate of 10%.
 14
    
    Disposal groups classified as held for sale and discontinued operationsi) The assets and liabilities relating to the Mount Magnet operation (operation in Western Australia) have been presented as held
for sale following the approval of the groups management on May 17, 2010, on which date the formal process was started to find a
willing buyer. These operations also met the criteria to be classified as discontinued operations. Consequently, the consolidated
income statements, earnings per share and related notes for comparative periods have been re-presented to include income and
expenses relating to the Mount Magnet operation in discontinued operations.The conditions precedent for the sale of Mount Magnet assets were fulfilled and the transaction became effective on July 20, 2010.
Refer to note 37.ii) The assets and liabilities relating to the Cooke 1, Cooke 2, Cooke 3, Cooke plant and relating surface operations (operations in
the Gauteng province) have been presented as held for sale following the approval of the groups management on October 16, 2007 to
sell these assets to Rand Uranium (Proprietary) Limited (Rand Uranium). These operations were also deemed to be discontinued
operations. The two part sale was concluded on November 21, 2008 and April 22, 2009. Refer to note 21.(iii) During 2008, the assets and liabilities related to South Kal (operation in Australia) and Orkney operations (operations in
Northwest province) have been presented as held for sale following approval of the groups management and Board of Directors on
April 20, 2007. The operations met the criteria to be classified as discontinued operations and were reported in the Discontinued
Operations  other segment in the segment report.On December 6, 2007, the sale relating to the South Kal operation (operation in Australia) was concluded at a loss, net of tax, of
US$7.6 million and the assets were derecognized.On February 27, 2008, the sale relating to the Orkney operations (operations in the Northwest province) was concluded at a profit of
US$8.9 million and the assets were derecognized.
 F-39




---



##### 



Notes to the consolidated financial statements
 The assets and liabilities for the operations classified as held for sale at the reporting dates are as follows:
 US DollarFigures in million
    
    2010
    
    
    2009Balance sheetAssets of disposal groups classified as held for saleProperty, plant and equipment
    
    
    29
    
    
    
    Deferred income tax
    
    
    2
    
    
    
    Inventories
    
    
    1
    
    
    
    Total assets of disposal groups classified as held for sale
    
    
    32
    
    
    
    Balance sheetLiabilities of disposal groups classified as held for saleDeferred income tax
    
    
    2
    
    
    
    Provision for environmental rehabilitation
    
    
    16
    
    
    
    Trade and other payables
    
    
    
    
    
    
    Total liabilities of disposal groups classified as held for sale
    
    
    18
    
    
    
    
 The analysis of the results and cash flows of discontinued operations are disclosed in the tables below:
 US DollarFigures in million
    
    2010
    
    
    2009
    
    
    2008Income statementRevenue
    
    
    
    
    
    
    69
    
    
    
    312Reversal of impairment (a)
    
    
    
    
    
    
    28
    
    
    
    5Expenses  net
    
    
    (4
    )
    
    
    (103
    )
    
    
    (251
    )Profit on sale of shares
    
    
    
    
    
    
    171
    
    
    
    9Profit on sale of property, plant and equipment
    
    
    
    
    
    
    2
    
    
    
    4(Loss)/profit from discontinued operations before tax
    
    
    (4
    )
    
    
    167
    
    
    
    79Taxation
    
    
    
    
    
    
    (72
    )
    
    
    (5
    )(Loss)/profit for the year from discontinued operations
    
    
    (4
    )
    
    
    95
    
    
    
    74Cash flowsOperating cash flows
    
    
    (6
    )
    
    
    8
    
    
    
    71Investing cash flows
    
    
    
    
    
    
    202
    
    
    
    (16
    )Foreign exchange translation adjustment
    
    
    
    
    
    
    77
    
    
    
    (7
    )Total cash flows
    
    
    (6
    )
    
    
    287
    
    
    
    48
 a) Mount Magnet was previously classified as held for sale for a period until June 2009. On ceasing to be classified as held for
sale, the carrying value was re-measured as per IFRS 5 (see note 2.11) and depreciation amounting to US$28 million was recorded in
2009. This also lead to the recording of a reversal of impairment of US$28 million.
 15
    
    (Loss)/earnings per shareBasic (loss)/earnings per share is calculated by dividing the net income attributable to shareholders by the weighted number of
ordinary shares in issue during the year.
 US DollarFigures in million
    
    2010
    
    
    2009
    
    
    2008Weighted average number of ordinary shares in issue (000)
    
    
    426,382
    
    
    
    414,121
    
    
    
    400,750Net (loss)/profit from continuing operations
    
    
    (20
    )
    
    
    216
    
    
    
    (104
    )Net (loss)/profit from discontinued operations
    
    
    (4
    )
    
    
    95
    
    
    
    74Total net (loss)/profit attributable to shareholders
    
    
    (24
    )
    
    
    311
    
    
    
    (30
    )
 F-40




---



##### 



Notes to the consolidated financial statements
 US DollarFigures in million
    
    2010
    
    
    2009
    
    2008Basic (loss)/earnings per share from continuing operations (cents)
    
    
    (5
    )
    
    
    52
    
    
    (26
    )Basic (loss)/earnings per share from discontinued operations (cents)
    
    
    (1
    )
    
    
    23
    
    
    18Total basic (loss)/earnings per share (cents)
    
    
    (6
    )
    
    
    75
    
    
    (8
    )
 Fully diluted (loss)/earnings per shareFor diluted earnings per share, the weighted average number of ordinary shares in issue is
adjusted to assume conversion of all potential dilutive ordinary shares as a result of share
options granted to employees under the share option schemes in issue. A calculation is performed
to determine the number of shares that could have been acquired at fair value, determined as the
average annual market share price of the Companys shares, based on the monetary value of the
subscription rights attached to the outstanding share options. The number of shares calculated as
above is compared with the number of shares that would have been issued assuming the exercise of
the share options.
 US DollarFigures in million
    
    2010
    
    
    2009
    
    2008Weighted average number of ordinary shares in issue (000)
    
    
    426,382
    
    
    
    414,121
    
    
    400,750Potential ordinary shares (000)
    
    
    1,465
    
    
    
    1,842
    
    
    2,144Weighted average number of ordinary shares for fully diluted earnings per
share (000)
    
    
    427,847
    
    
    
    415,963
    
    
    402,894Fully diluted (loss)/earnings per share from continuing operations (cents)
    
    
    (5
    )
    
    
    51
    
    
    (26
    )Fully diluted (loss)/earnings per share from discontinued operations (cents)
    
    
    (1
    )
    
    
    23
    
    
    18Total fully diluted (loss)/earnings per share (cents)
    
    
    (6
    )
    
    
    74
    
    
    (8
    )
 The inclusion of share options issued to employees, as potential ordinary
shares, has a dilutive effect on the earnings per share.Dividend per share
 Dividend declared in terms
of dividend notice no. 79
to all registered
shareholders on the
recording date of August
13, 2009.
    
    6.2 US cents
    
    
    
    
    
    
    
 US DollarFigures in million
    
    2010
    
    
    2009
 16
    
    Property, plant and equipment
 Mining properties, mine development costs and mine plant facilities
    
    
    2,910
    
    
    
    1,628Mining assets under construction
    
    
    108
    
    
    
    725Undeveloped properties
    
    
    839
    
    
    
    1,253Deferred stripping
    
    
    9
    
    
    
    Other non-mining assets
    
    
    8
    
    
    
    8Total property, plant and equipment
    
    
    3,874
    
    
    
    3,614
 F-41




---



##### 



Notes to the consolidated financial statements
 US DollarFigures in million
    
    2010
    
    2009
 Mining properties, mine development costs and mine plant facilities
 CostBalance at beginning of year
    
    
    3,236
    
    
    
    2,521Acquisition  Pamodzi Gold Free State (Proprietary) Limited (Pamodzi FS) assets (a)
    
    
    37
    
    
    
    Additions
    
    
    379
    
    
    
    219Disposals
    
    
    (52
    )
    
    
    (324
    )Adjustment to rehabilitation asset
    
    
    24
    
    
    
    27Transfers and other movements
    
    
    1,060
    
    
    
    160Translation
    
    
    82
    
    
    
    (113
    )Net reclassification (to)/from held for sale
    
    
    (226
    )
    
    
    746Balance at end of year
    
    
    4,540
    
    
    
    3,236Accumulated depreciation and impairmentsBalance at beginning of year
    
    
    1,608
    
    
    
    989Impairment of assets
    
    
    43
    
    
    
    71Disposals
    
    
    (17
    )
    
    
    (141
    )Depreciation (b)
    
    
    175
    
    
    
    153Depreciation capitalized to mining assets under construction
    
    
    6
    
    
    
    5Translation
    
    
    35
    
    
    
    (89
    )Net reclassification (to)/from held for sale
    
    
    (220
    )
    
    
    620Balance at end of year
    
    
    1,630
    
    
    
    1,608Net book value
    
    
    2,910
    
    
    
    1,628
 Mining assets under construction
 CostBalance at beginning of year
    
    
    725
    
    
    
    561Additions (c)
    
    
    51
    
    
    
    300Finance costs capitalized
    
    
    
    
    
    
    31Disposals
    
    
    
    
    
    
    (186
    )Transfers and other movements
    
    
    (667
    )
    
    
    13Translation
    
    
    (1
    )
    
    
    6Book value
    
    
    108
    
    
    
    725
 Undeveloped property
 CostBalance at beginning of year
    
    
    1,320
    
    
    
    1,436Additions
    
    
    
    
    
    
    23Disposals
    
    
    (9
    )
    
    
    (39
    )Transfers and other movements
    
    
    (393
    )
    
    
    (173
    )Translation
    
    
    15
    
    
    
    (40
    )Net reclassification (to)/from held for sale
    
    
    (28
    )
    
    
    113Balance at end of year
    
    
    905
    
    
    
    1,320Accumulated depreciation and impairmentBalance at beginning of year
    
    
    67
    
    
    
    2Reversal on impairment of assets (b)
    
    
    
    
    
    
    (10
    )Translation
    
    
    3
    
    
    
    (12
    )Net reclassification (to)/from held for sale
    
    
    (4
    )
    
    
    87Balance at end of year
    
    
    66
    
    
    
    67Net book value
    
    
    839
    
    
    
    1,253
 F-42




---



##### 



Notes to the consolidated financial statements
 US DollarFigures in million
    
    2010
    
    2009
 Deferred stripping
 CostBalance at beginning of year
    
    
    
    
    
    
    Additions
    
    
    10
    
    
    
    Transferred to production cost
    
    
    (1
    )
    
    
    Book value
    
    
    9
    
    
    
    
 Other non-mining assets
 CostBalance at beginning of year
    
    
    49
    
    
    
    44Additions
    
    
    3
    
    
    
    4Disposals
    
    
    (1
    )
    
    
    Translation
    
    
    1
    
    
    
    Net reclassification from held for sale
    
    
    
    
    
    
    1Balance at end of year
    
    
    52
    
    
    
    49Accumulated depreciation and impairmentsBalance at beginning of year
    
    
    41
    
    
    
    40Disposals
    
    
    
    
    
    
    Depreciation for the year
    
    
    2
    
    
    
    1Impairment of fixed assets
    
    
    
    
    
    
    Translation
    
    
    1
    
    
    
    Balance at end of year
    
    
    44
    
    
    
    41Net book value
    
    
    8
    
    
    
    8Total net book value
    
    
    3,874
    
    
    
    3,614
 (a)
    
    During the 2010 financial year the group concluded separate purchase agreements with the
liquidators of Pamodzi FS for the purchase of its Free State assets and inventories (refer to note
23). The consideration paid for the mining assets was US$36.6 million and US$16.0 million was paid
for the inventories.(b)
    
    For 2009 and 2010 the amounts include both continuing and discontinued operations.(c)
    
    On 1 December 2008, Harmony issued 3.4 million shares to Rio Tinto Limited to cancel the
Rio Tinto royalty rights over Wafi-Golpu in Papua New Guinea. The value of the issued shares were
US$23.4 million.(d)
    
    Additional disclosures
 US DollarFigures in million
    
    2010
    
    
    2009
 Leased assets
 Carrying value of capitalized leased assets
(included in mining properties, mine
development costs and mine plant
facilities)
    
    
    14
    
    
    
    17Cost
    
    
    21
    
    
    
    21Accumulated depreciation
    
    
    (7
    )
    
    
    (4
    )Finance lease additions
    
    
    2
    
    
    
    1
 Except for the leased assets mentioned above, none of the assets listed above have been
pledged or otherwise committed as security for any liabilities.
 F-43




---



##### 



Notes to the consolidated financial statements
 US DollarFigures in million
    
    2010
    
    
    2009
 17
    
    Intangible assets
 Goodwill
 CostBalance at beginning of year
    
    
    307
    
    
    
    304Acquired through purchase of subsidiaries
    
    
    
    
    
    
    Translation
    
    
    4
    
    
    
    3Balance at end of year
    
    
    311
    
    
    
    307Accumulated amortization and impairmentsBalance at beginning of year
    
    
    27
    
    
    
    27Translation
    
    
    1
    
    
    
    Balance at end of year
    
    
    28
    
    
    
    27Net book value (a)
    
    
    283
    
    
    
    280
 Computer software (b)
 CostBalance at beginning of year
    
    
    13
    
    
    
    8Acquired during the year
    
    
    2
    
    
    
    4Translation
    
    
    1
    
    
    
    1Balance at end of year
    
    
    16
    
    
    
    13Accumulated amortization and impairmentsBalance at beginning of year
    
    
    5
    
    
    
    2Amortization charge for the year
    
    
    4
    
    
    
    3Balance at end of year
    
    
    9
    
    
    
    5Net book value
    
    
    7
    
    
    
    8Total net book value
    
    
    290
    
    
    
    288
 (a)
    
    The net book value of goodwill has been allocated to the cash generating units:
 Bambanani
    
    
    29
    
    
    
    29Tshepong
    
    
    73
    
    
    
    72Phakisa
    
    
    174
    
    
    
    172Joel
    
    
    5
    
    
    
    5Other
    
    
    2
    
    
    
    2283
    
    
    
    280
 (b)
    
    The amount relates to the implementation of an Oracle ERP software application.
 US DollarFigures in million
    
    2010
    
    
    2009
 18
    
    Restricted cash
 Environmental guarantees call account (a)
    
    
    15
    
    
    
    15Security deposits (b)
    
    
    
    
    
    
    Cash management account (c)
    
    
    4
    
    
    
    6Total restricted cash
    
    
    19
    
    
    
    21
 (a)
    
    The amount relates to funds set aside for guarantees made to the Department of
Mineral Resources in South Africa for environmental and rehabilitation
obligations.(b)
    
    The amount relates to security deposits on mining tenements.
 F-44




---



##### 



Notes to the consolidated financial statements
 (c)
    
    The amount relates to funds set aside by the international operations for
guarantee related performance bonds for Australia environmental obligations.
Following the sale of Mount Magnet this cash will again be available for
general corporate purposes. Refer to note 37.
 US DollarFigures in million
    
    2010
    
    
    2009
 19
    
    Restricted investments
 Investments held by Environmental Trust Funds (a)
    
    
    223
    
    
    
    207Investments held by Social Trust Fund (b)
    
    
    5
    
    
    
    5Total restricted investments
    
    
    228
    
    
    
    212
 (a)
    
    Environmental Trust Funds consist of:
 - Held-to-maturity financial assets
    
    
    48
    
    
    
    207- Fair value through profit or loss financial assets
    
    
    175
    
    
    
    Total Environmental Trust Funds
    
    
    223
    
    
    
    207
 The environmental trust funds are irrevocable trusts under the groups
control. Contributions to the trusts are invested in interest-bearing short
term investments or medium term equity-linked notes issued by commercial banks
that provide guaranteed interest and additional interest or growth linked to
the growth of the Shareholder Weighted Top 40 index (SWIX 40) of the JSE. The
equity-linked notes are designated fair value through profit or loss
investments and recorded at fair value whilst the interest-bearing short term
investments are classified as held-to-maturity and recorded at amortized cost.
These investments provide for the estimated cost of rehabilitation at the end
of the life of the groups mines. Income earned on the investments is retained
in the funds and reinvested.Reconciliation of the movement in the Environmental Trust Funds:
 US DollarFigures in million
    
    2010
    
    
    2009Balance at beginning of year
    
    
    207
    
    
    
    206Interest income
    
    
    9
    
    
    
    21Fair value movement
    
    
    4
    
    
    
    Disposal of business
    
    
    
    
    
    
    (20
    )Contributions made
    
    
    1
    
    
    
    Translation
    
    
    2
    
    
    
    Balance at end of year
    
    
    223
    
    
    
    207
 (b)
    
    The social trust fund is an irrevocable trust under the groups control and is
classified as a held to maturity investment. The group has undertaken to
donate over a period of 10 years to The Harmony Gold Mining Group Social Plan
Trust in terms of an agreement signed on 3 November 2003. An initial donation
of R19 million (US$2.7 million) was made during the 2004 year. Thereafter
installments of R3.5 million (US$0.45 million) per annum was and will be made
with the final installment to be made in 2013. The purpose of the Trust is to
fund the social plan to reduce the negative effects of restructuring on the
groups workforce, to put measures in place to ensure that the technical and
life skills of the groups workforce are developed and to develop the groups
workforce in such a manner to avoid or minimize the effect of job losses and a
decline in employment through turnaround or redeployment strategies.
 F-45




---



##### 



Notes to the consolidated financial statements
 US DollarFigures in million
    
    2010
    
    
    2009
 Reconciliation of the movement in the Social Trust Fund:
 Balance at beginning of year
    
    
    5
    
    
    
    5Contributions made*
    
    
    1
    
    
    
    Interest accrued*
    
    
    
    
    
    
    Claims paid*
    
    
    (1
    )
    
    
    Balance at end of year
    
    
    5
    
    
    
    5
 *
    
    Please note that for the 2009 financial year when these amounts were
translated into US dollars, the amounts were less than US$0.5 million and were
rounded down, resulting in no movement being shown for the year.
 US DollarFigures in million
    
    2010
    
    
    2009
 20
    
    Investment in financial assets
 Balance at beginning of year
    
    
    7
    
    
    
    9Additions
    
    
    
    
    
    
    8Disposals
    
    
    (6
    )
    
    
    (4
    )Fair value movement of available-for-sale investments
    
    
    
    
    
    
    (3
    )Translation
    
    
    1
    
    
    
    (3
    )Balance at end of year
    
    
    2
    
    
    
    7
 The carrying amount consists of the following:
 Available-for-sale financial assetsInvestment in Alloy (a)
    
    
    
    
    
    
    Investment in Avoca (b)
    
    
    
    
    
    
    5Investment in other listed and unlisted shares (c)
    
    
    2
    
    
    
    2Total available-for-sale financial assets
    
    
    2
    
    
    
    7
 (a)
    
    During 2006, the group received 5 million shares, valued at A$0.20 per share
in Alloy as consideration for the sale of mining tenements. During fiscal
2009, the investment was considered permanently impaired, resulting in a
cumulative loss of US$0.4 million, net of tax, recognized in other reserves,
being reclassified from other reserves to the consolidated income statement.
Subsequent to the impairment, a gain of US$0.04 million) was recognized in
other comprehensive income. Tax on this revaluation amounted to R0.1 million
(US$0.01 million), which has been charged directly to equity.During fiscal 2010 these shares were sold resulting in a net loss of US$0.1
million. Refer to note 10.(b)
    
    On 17 April 2009, the group received 3 809 524 Avoca shares, valued at A$1.50
per share, as consideration for the disposal of its Dioro shares. During
fiscal 2010 a fair value loss of US$0.3 million (2009: US$0.5 million fair
value gain) have been recognized in other comprehensive income, net of tax.During fiscal 2010 these shares were sold resulting in a net profit of US$0.1
million. Refer to note 10.
 F-46




---



##### 



Notes to the consolidated financial statements
 (c)
    
    These investments are evaluated by the directors on an annual
basis to ensure that no significant prolonged decline in the
value of the investments has occurred. During fiscal 2010 the
group disposed of certain listed investments for a net loss of
US$0.2 million. Refer to note 10. Fair value gains recognized
in other comprehensive income for the year totaled US$0.8
million (2009: Nil). During fiscal 2010 the group did not
receive any income from these investments (2009: Nil).
 21
    
    Investment in associates
 US DollarFigures in million
    
    2010
    
    
    2009Balance at beginning of year
    
    
    43
    
    
    
    19Subsidiary becoming associate
    
    
    
    
    
    
    25Share of profit after tax
    
    
    7
    
    
    
    1Impairment of share in associate
    
    
    
    
    
    
    (14
    )Translation
    
    
    
    
    
    
    12Balance at end of year
    
    
    50
    
    
    
    43
 The carrying amount consists of:
 Pamodzi Gold Limited (a)
    
    
    
    
    
    
    Rand Uranium (Proprietary) Limited (b)
    
    
    50
    
    
    
    43Total investment in associates
    
    
    50
    
    
    
    43
 (a)
    
    On February 27, 2008, Pamodzi Gold Limited (Pamodzi) bought
the Orkney operations from the group for a consideration of 30
million Pamodzi shares. This resulted in Harmony owning 32.4%
of Pamodzi valued at US$46.5 million being US$1.54 per share
on acquisition date. Pamodzi was listed on the JSE and had
interests in operating gold mines in South Africa.An impairment of the investment in associate of US$12.3
million was recognized at June 30, 2008, as the market value
of the share had decreased to US$0.62 per share. The fair
value of the investment was US$18.6 million. For the four
months to June 30, 2008, the group recognized US$10.6 million
as its share of losses from associates.On September 30, 2008, an impairment test was performed and an
impairment of US$13.5 million was recorded, bringing the total
impairment recorded on the investment to date to US$25.8
million. After taking into account the Groups share of losses
of US$3.7 million, the carrying value at December 31, 2008 was
R0. Total share in losses to date was US$14.3 million.
Subsequently, the Group has not recognized its share of any
further losses. Pamodzi was placed in liquidation and the
trading of its shares on the JSE was suspended.At the time of this report being finalized no audited
financial statements were available for years ending December
31, 2009 and 2008. The extract below represents unaudited
information for the nine months ended March 31, 2009. No
financial information subsequent to this date is available,
and therefore no information has been disclosed for 2010.
 F-47




---



##### 



Notes
to the consolidated financial statements
 US DollarFigures in million
    
    2010
    
    
    2009100
    %Revenue
    
    
    
    
    
    
    69Production costs
    
    
    
    
    
    
    (89
    )Operating loss
    
    
    
    
    
    
    (20
    )Net loss
    
    
    
    
    
    
    (40
    )
 The financial position as at March 31, 2009 is disclosed below:
 Non-current assets
    
    
    
    
    
    
    260Current assets
    
    
    
    
    
    
    18Total assets
    
    
    
    
    
    
    278Current liabilities
    
    
    
    
    
    
    241Non-current liabilities
    
    
    
    
    
    
    62Total liabilities
    
    
    
    
    
    
    303
 (b)
    
    The group owns a 40% share of Rand Uranium, which is an
unlisted company registered in South Africa, with gold mining
operations in the Gauteng province of South Africa.The groups interest was obtained by the completion of two
transactions, discussed below.On November 21, 2008, the companys wholly-owned subsidiary
Randfontein Estates Limited disposed of its Randfontein Cooke
assets to a newly formed wholly-owned subsidiary Rand Uranium,
for a consideration of US$328 million, settled with Rand
Uranium shares. In a related transaction on the same date, 60%
of these shares were sold to PRF for US$197 million. US$40
million was paid on the effective date and the balance of
US$157 million was paid on April 20, 2009. Interest was
charged on the outstanding balance at 5% per annum, resulting
in US$3.3 million being recognized in the income statement.
The interest was also received on April 20, 2009.The conditions precedent for the second part of the Rand
Uranium transaction relating to the sale of the Old
Randfontein assets to Rand Uranium were fulfilled on April 22,
2009. These assets were valued at US$20 million. Additional
            shares were issued in settlement and 60% of these shares were
sold to PRF in terms of the agreement. PRF paid its portion of
the purchase price, US$12 million, in cash on April 20, 2009.The shareholders agreement includes certain restrictions on
the groups ability to dispose of its shares in Rand Uranium
for a period of up to four years from the effective date,
being November 21, 2008. In addition, PRF has the right, for a
period of up to four years after the effective date, to have
first claim on the proceeds, up to a specified amount, in the
event of a disposal of the operations. Harmony has first right
of refusal in such an event. However due to the contingent
nature of the provision, the group has made no adjustments to
the associates carrying amount.The group recognised a profit of US$171.1 million (before tax)
on these transactions during the 2009 year. This profit is
included in the profit from discontinued operations. Refer to
note 14.
 F-48




---



##### 



Notes to the consolidated financial statements
 The group recognized its share of the post-acquisition profits
of US$7 million (7 months ending June 30, 2009: US$5.1
million).Rand Uranium has a year end of June 30. The audited financial
information of Rand Uranium for the years ended June 30, 2010
and at June 30, 2010 and June 30, 2009 are as follows:
 US DollarFigures in million
    
    2010
    
    
    2009100
    %
    
    
    100
    %Revenue
    
    
    223
    
    
    
    101Production costs
    
    
    (172
    )
    
    
    (75
    )Gross profit
    
    
    51
    
    
    
    26Net profit
    
    
    18
    
    
    
    12Non-current assets
    
    
    612
    
    
    
    577Current assets
    
    
    27
    
    
    
    29Total assets
    
    
    639
    
    
    
    606Current liabilities
    
    
    23
    
    
    
    24Non-current liabilities
    
    
    100
    
    
    
    91Total liabilities
    
    
    123
    
    
    
    115
 22
    
    Investment in Joint Venture
 Morobe Mining Joint Venture (MMJV) Partnership agreement (50%)The group has a 50% interest in gold and copper assets located
in the Morobe province. Newcrest owns the remaining 50%
interest in these assets. This partnership was formed during
the 2009 financial year through a range of transactions, which
are discussed below.On April 22, 2008 Morobe Consolidated Goldfields Limited and
Wafi Mining Limited, subsidiaries of Harmony Australia,
entered into a Master Purchase and Farm-in Agreement with
Newcrest. This agreement provided for Newcrest to purchase a
30.01% participating interest (stage 1) and a further farm-in
of an additional 19.99% participating interest in Harmonys
Morobe gold and copper assets, giving them a 50% interest. The
total value of the transaction was estimated at US$530
million.On July 16, 2008, the conditions to the Master Purchase and
Farm-in agreement were finalized, which included regulatory
and statutory approvals by the PNG Government. Stage 1
completion took place on July 31, 2008, and a total
consideration of US$229.8 million was received on August 7,
2008, of which US$50.0 million was placed in a jointly
controlled escrow account. This amount was subsequently
released to Harmony following confirmation of approval of an
exploration license during September 2008 by the PNG Mining
authorities.Harmony recognized a profit of US$57.9 million on the
completion of stage 1, which represented a sale of a 30.01%
undivided interest of Harmonys PNG gold and copper assets and
liabilities comprising the joint venture.
 F-49




---



##### 



Notes to the consolidated financial statements
 During the farm-in period, Harmony agreed to transfer a
further 19.99% interest to Newcrest in consideration for an
agreement by Newcrest to meet certain expenditure which would
otherwise have to be undertaken by Harmony. The interest to
be transferred was conditional on the level of capital
expenditures funded by Newcrest at certain milestones, and by
the end of February 2009, Newcrest acquired another 10%
through the farm-in arrangement. The final 9.99% was acquired
by June 30, 2009.At the date of completion of each partys obligations under
the farm-in arrangement, Harmony derecognized the proportion
of the mining assets and liabilities in the joint venture that
it had sold to Newcrest, and recognized its interest in the
capital expenditure at fair value. The difference between the
net disposal proceeds and the carrying amounts of the asset
disposed of during the farm-in arrangement amounted to a gain
of US$54 million, which has been included in the consolidated
income statement for 2009.The following are the groups effective share of income,
expenses, assets and liabilities, which are included in the
2010 consolidated financial statements:
 US DollarFigures in million
    
    2010
    
    
    200950
    %
    
    
    50
    %Revenue
    
    
    10
    
    
    
    Production costs
    
    
    (8
    )
    
    
    Gross profit
    
    
    2
    
    
    
    Other costs
    
    
    (40
    )
    
    
    (12
    )Net loss
    
    
    (38
    )
    
    
    (12
    )Non-current assets
    
    
    382
    
    
    
    185Current assets
    
    
    48
    
    
    
    44Total assets
    
    
    430
    
    
    
    229Non-current liabilities
    
    
    22
    
    
    
    161Current liabilities
    
    
    19
    
    
    
    36Total liabilities
    
    
    41
    
    
    
    197
 US DollarFigures in million
    
    2010
    
    
    2009
 23
    
    Inventories
 Gold in lock-up
    
    
    27
    
    
    
    37Gold in process, ore stockpiles and bullion on hand
    
    
    68
    
    
    
    43Stores and materials at weighted average cost
    
    
    63
    
    
    
    54Total inventories
    
    
    158
    
    
    
    134Non-current portion of gold in lock-up and gold in-process
    
    
    (28
    )
    
    
    130
    
    
    
    134Net reclassification to held for sale
    
    
    (1
    )
    
    
    Total current portion of inventories
    
    
    129
    
    
    
    134
 Included in the balance above is:
 Inventory valued at net realizable value
    
    
    27
    
    
    
    30
 During the year the group acquired a waste rock dump valued at US$2.7 million and a gold plant
containing gold in lock-up valued at US$13.3 million from Pamodzi FS, which have been included in
the cost of inventory.
 F-50




---



##### 



Notes to the consolidated financial statements
 During the year, US$3.9 million (2009:US$0.6 million) was provided for slow moving stock. The total provision at
June 30, 2010 was US$7.5 million (2009:US$3.6 million).
 US DollarFigures in million
    
    2010
    
    
    2009
 24
    
    Trade and other receivables
 CurrentFinancial assets:Trade receivables (gold)
    
    
    44
    
    
    
    33Other trade receivables (a)
    
    
    30
    
    
    
    34Provision for impairment
    
    
    (13
    )
    
    
    (15
    )Trade receivables  net
    
    
    61
    
    
    
    52Loans to associates and joint ventures (b)
    
    
    5
    
    
    
    15Interest and other receivables (c)
    
    
    12
    
    
    
    11Employee receivables
    
    
    2
    
    
    
    2Insurance claims receivable (d)
    
    
    7
    
    
    
    Non-financial assets:Prepayments
    
    
    9
    
    
    
    10Value added tax
    
    
    26
    
    
    
    25Total current trade and other receivables
    
    
    122
    
    
    
    115Non-currentFinancial assets:Loans to associates (e)
    
    
    23
    
    
    
    24Other loans receivable
    
    
    2
    
    
    
    2Provision for impairment (f)
    
    
    (15
    )
    
    
    (16
    )Total non-current trade and other receivables
    
    
    10
    
    
    
    10
 (a)
    
    Included in other trade receivables is an amount of
US$0.7 million (2009: US$9.1 million) owed by Rand
Uranium.(b)
    
    An amount of US$5 million (2009: US$4.8 million) is due
from Rand Uranium for services and goods supplied in
terms of the service level agreements entered into
between the group and Rand Uranium. Also included in 2009
is an amount of US$9.7 million receivable by Harmonys
Australian operations, from Newcrest for their portion of
the loan to the MMJV companies.(c)
    
    Included in interest and other receivables is an amount
of US$2.2 million owing by Pamodzi FS in terms of the
asset purchase agreements, for rehabilitation trust funds
to be released to the group.(d)
    
    The insurance claim receivable of US$7.1 million relates
to damage caused by an underground fire at the Bambanani
operation. The claim was settled subsequent to the 2010
financial year end.(e)
    
    Included in the balance for 2010 is a loan of US$8.3
million (2009: US$8.5 million) to Rand Uranium. The loan
bears interest at a 3 month JIBAR plus 250 basis points
and is repayable on November 21, 2015. The loan has been
subordinated. Also included in this balance is a loan of
US$15.2 million, (2009: US$15.0 million) owed by Pamodzi.
The loan bore interest at prime rate until March 2009
when Pamodzi was placed into liquidation. Harmony is a
concurrent creditor in the Pamodzi Orkney liquidation.
 F-51




---



##### 



Notes to the consolidated financial statements
 (f)
    
    Included in this balance is the amount of US$15.2
million, (2009: US$15.0 million) relating to the loan
owed by Pamodzi. In 2009 an amount of US$1.1 million
relating to the loan owed by Ubuntu, included in other
loans receivable, was also provided for and subsequently
written off during the 2010 financial year. Interest of
US$1.5 million was charged on these loans in fiscal 2009.
No interest was charged in fiscal 2010.The movement in the provision for impairment of trade
receivables during the year was as follows:
 US DollarFigures in million
    
    2010
    
    
    2009Balance at beginning of year
    
    
    15
    
    
    
    17Provision for impairment of receivables
    
    
    2
    
    
    
    4Unused amounts reversed
    
    
    (4
    )
    
    
    (6
    )Receivables written off during the year
    
    
    
    
    
    
    Balance at end of year
    
    
    13
    
    
    
    15
 The movement in the provision for impairment of loans
receivables during the year was as follows:
 Balance at beginning of year
    
    
    16
    
    
    
    2Provision for impairments of loans
    
    
    
    
    
    
    13Loans written off during the year
    
    
    (1
    )
    
    
    (1
    )Translation
    
    
    
    
    
    
    2Balance at end of year
    
    
    15
    
    
    
    16
 The ageing of trade receivables at the reporting date was:
 Gross
    
    
    ImpairmentJune 30, 2010Fully performing
    
    
    55
    
    
    
    Past due by 1 to 30 days
    
    
    3
    
    
    
    Past due by 31 to 60 days
    
    
    2
    
    
    
    Past due by 61 to 90 days
    
    
    1
    
    
    
    Past due by more than 90 days
    
    
    4
    
    
    
    4Past due by more than 361 days
    
    
    9
    
    
    
    974
    
    
    
    13
 Gross
    
    
    ImpairmentJune 30, 2009Fully performing
    
    
    35
    
    
    
    Past due by 1 to 30 days
    
    
    14
    
    
    
    Past due by 31 to 60 days
    
    
    1
    
    
    
    Past due by 61 to 90 days
    
    
    1
    
    
    
    Past due by more than 90 days
    
    
    7
    
    
    
    6Past due by more than 361 days
    
    
    9
    
    
    
    967
    
    
    
    15
 The ageing of loans receivable at the reporting date was:
 Gross
    
    
    ImpairmentJune 30, 2010Fully performing
    
    
    10
    
    
    
    Past due by 1 to 30 days
    
    
    
    
    
    
    Past due by 31 to 60 days
    
    
    
    
    
    
    Past due by 61 to 90 days
    
    
    
    
    
    
    Past due by more than 90 days
    
    
    
    
    
    
    Past due by more than 361 days
    
    
    15
    
    
    
    1525
    
    
    
    15
 F-52




---



##### 



Notes
to the consolidated financial statements
 US DollarFigures in million
    
    2010
    
    
    2009
 Gross
    
    
    ImpairmentJune 30, 2009Fully performing
    
    
    10
    
    
    
    Past due by 1 to 30 days
    
    
    
    
    
    
    Past due by 31 to 60 days
    
    
    
    
    
    
    Past due by 61 to 90 days
    
    
    
    
    
    
    Past due by more than 90 days
    
    
    2
    
    
    
    2Past due by more than 361 days
    
    
    14
    
    
    
    1426
    
    
    
    16
 Based on past experience, the group believes that no
impairment allowance is necessary in respect of fully
performing receivables as the amount relates to customers
that have a good track record with the group. Similarly,
the other loans and receivables noted above, other than
those provided for, are fully performing and considered
to be a low credit risk.During fiscal 2008, the balance of US$6 million due from
Ogoerion Construction CC for the purchase of the
Deelkraal surface assets was impaired. In fiscal 2009,
the deal was renegotiated and the Deelkraal plant was
excluded from the transaction. The purchase price was
revised and as a result, the balance due and the related
provision for impairment of trade receivables was
reversed.During fiscal 2010 and 2009 there was no renegotiation of
the terms of any receivable, other than as discussed
above.As at June 30, 2010 and June 30, 2009, there was no
collateral pledged or held for any of the receivables.
 25
    
    Share capital
 Authorized
 1 200 000 000 (2008: 1 200 000 000) ordinary shares of SA 50 cents each10 958 904 (2009: 10 958 904) redeemable convertible preference shares of SA 50 cents each
 Issued428 654 779 (2009: 425 986 836) ordinary shares of SA 50 cents each. All issued shares are fully paid.
 Included in the total of issued shares is an amount of 2 314 shares held by Lydenburg Exploration Limited, a
wholly owned subsidiary of the Company.10% of the authorised but unissued shares are under the control of the directors until the forthcoming annual
general meeting. Note 34 set out details in respect of the share option scheme and shares held in trust for
employees of the group.The directors of the Company has a general authority to issue shares for cash up to a maximum of 5% of the issued
share capital in any one financial year. This is in terms of the annual general meeting of shareholders on
November 23, 2009 and valid until the forthcoming annual general meeting. The general authority is subject to the
Listings Requirements of the JSE Securities Exchange South Africa and the Companies Act no 61 of 1973 of South
Africa, as amended.
 F-53




---



##### 



Notes
to the consolidated financial statements
 Share issues2010 Financial year
 On March 19, 2010, Harmony concluded an agreement with Africa Vanguard Resources (Doornkop) (Proprietary)
Limited (AVRD) for the purchase of its 26% share of the mining titles on the Doornkop South Reef. Part of the
purchase consideration was the issuance of 2 162 359 Harmony shares to AVRD. In terms of the purchase agreement
975 419 Harmony shares are held in escrow until May 1, 2014. Refer to note 262009 Financial yearOn December 1, 2008, Harmony issued 3 364 675 shares to Rio Tinto. The Harmony shares were issued to cancel the
Rio Tinto royalty rights over Wafi-Golpu in PNG. The value of issued shares was US$23 million at R71.98 per
share.Harmony engaged in capital raising by issuing two tranches of shares following the resolution passed by
shareholders at the Annual General Meeting held on November 24, 2008. The first tranche was issued into the open
market between November 25, 2008 and December 19, 2008. In this tranche, 10 504 795 Harmony shares were issued at
an average subscription price of R93.20, resulting in US$97.9 million before costs being raised. The cost of the
issue was US$1.9 million, or 1.5%, of the value of shares issued.A second tranche of shares was issued for cash into the open market between February 10, 2009 and March 6, 2009.
This tranche consisted of 7 540 646 Harmony shares at an average subscription price of R124.45, resulting in
US$93.5 million before costs being raised. The cost of the issue was US$1.6 million or 1.6% of the value of shares issued. The combined share issue amounts to US$192 million, or 4.5%, of the issued share capital as at
September 30, 2008.
 US DollarFigures in million
    
    2010
    
    
    2009
 26
    
    Other reserves
 Foreign exchange translation reserve (a)
    
    
    (86
    )
    
    
    (111
    )Fair value movement of available-for-sale financial assets (b)
    
    
    4
    
    
    
    4Equity component of convertible bond (c)
    
    
    41
    
    
    
    41Acquisition of non-controlling interest in subsidiary (d)
    
    
    (57
    )
    
    
    (57
    )Share-based payments (e)
    
    
    75
    
    
    
    55Repurchase of equity interest (f)
    
    
    (13
    )
    
    
    Other
    
    
    (4
    )
    
    
    (4
    )Total other reserves
    
    
    (40
    )
    
    
    (72
    )
 The different categories of other reserves are made up as follows:
 Foreign exchange translation reserveBalance at beginning of year
    
    
    (111
    )
    
    
    (216
    )Realized portion reclassified through profit or loss
    
    
    1
    
    
    
    (53
    )Current years foreign exchange movement
    
    
    24
    
    
    
    158Balance at end of year
    
    
    (86
    )
    
    
    (111
    )
 F-54




---



##### 



Notes
to the consolidated financial statements
 US DollarFigures in million
    
    2010
    
    
    2009
 Fair value movement of available-for-sale financial assetsBalance at beginning of year
    
    
    4
    
    
    
    (2
    )Impairment recognized in profit or loss
    
    
    
    
    
    
    12Tax on impairment
    
    
    
    
    
    
    (3
    )Realized portion reclassified through profit or loss
    
    
    (1
    )
    
    
    (2
    )Tax on realized portion
    
    
    
    
    
    
    Fair value movement  unrealized
    
    
    
    
    
    
    (3
    )Tax on fair value movement
    
    
    
    
    
    
    1Translation
    
    
    1
    
    
    
    1Balance at end of year
    
    
    4
    
    
    
    4Equity component of convertible bondBalance at beginning/end of year
    
    
    41
    
    
    
    41Acquisition of non-controlling interest in subsidiaryBalance at beginning/end of year
    
    
    (57
    )
    
    
    (57
    )Share-based paymentsBalance at beginning of year
    
    
    55
    
    
    
    42Share-based payments expensed
    
    
    20
    
    
    
    13Balance at end of year
    
    
    75
    
    
    
    55Repurchase of equity interestAcquired equity interest during the year
    
    
    (13
    )
    
    
    Balance at end of year
    
    
    (13
    )
    
    
    Other reservesBalance at beginning/end of year
    
    
    (4
    )
    
    
    (4
    )
 (a)
    
    The balance of the foreign exchange translation reserve movement represents the
cumulative translation effect of the groups off-shore operations. The US dollar
amount includes the translation effect from Rand to US dollar.The realized portion reclassified through profit or loss relates to the sale of Big
Bell operations in Australia and the liquidation of Harmony Gold Peru SA and Harmony
Precious Metal Services SAS. Refer to note 7 for further detail.(b)
    
    The balance of the fair value movement reserve represents the movement in the fair
value of the available-for-sale financial assets. For details on the movement, refer
to note 20. For details regarding the realised portion reclassified to profit or
loss refer to note 10(b).(c)
    
    On May 24, 2004, the group issued a convertible bond. The amount representing the
value of the equity conversion component is included in other reserves, net of
deferred income taxes. The equity conversion component is determined on the issue of
the bonds and is not changed in subsequent periods.(d)
    
    On March 15, 2004 Harmony announced that it had made an off market cash offer to
acquire all the ordinary shares, listed and unlisted options of Abelle, held by
non-controlling interests. The excess of the purchase price of US$86.5 million over
the carrying amount of the non-controlling interest acquired, amounting to US$55
million, has been accounted for under other reserves.
 F-55




---



##### 



Notes
to the consolidated financial statements
 (e)
    
    The group issues equity-settled instruments to certain qualifying
employees under an Employee Share Option Scheme to purchase shares in
the Companys authorised but unissued ordinary shares. Equity
share-based payments are measured at the fair value of the equity
instruments at the date of the grant. Share-based payments are
expensed over the vesting period, based on the groups estimate of the shares that are expected to eventually vest. During fiscal 2010 a
share-based payment expense of US$19.5 million (2009: US$12.6 million)
was charged to the income statement. (Refer to note 34 for more
detail).(f)
    
    On March 19, 2010, Harmony Gold Mining Company Limited concluded an
agreement with AVRD, for the purchase of its 26% share of the mining
titles of the Doornkop South Reef. From an accounting perspective, the
sale of the 26% share in the mining titles was never recognized and
accounted for as an in-substance call option by AVRD over the 26%
mineral right. This was due to AVRD not being exposed to any losses
relating to the Doornkop mineral right, and entitled at any point in
time to repay the Nedbank loan guaranteed by Harmony  thereby
becoming unconditionally entitled to the upside in the mineral
right. The agreement to purchase AVRDs 26% interest during fiscal
2010 is therefore considered to be a repurchase of the option (equity
interest). The difference between the value of the shares issued of
US$20.5 million (see note 25), the liability to African Vanguard
Resources (Proprietary) Limited (see note 29(a)) and transaction
costs, have been taken directly to equity.
 27
    
    Provision for environmental rehabilitation
 The groups mining and exploration activities are subject to extensive environmental laws and regulations. These
laws and regulations are continually changing and are generally becoming more restrictive. The group has made,
and expects to make in the future, expenditures to comply with such laws and regulations, but cannot predict the
full amount of such future expenditures. Estimated future reclamation costs are based principally on legal and
regulatory requirements. The following is a reconciliation of the total liability for environmental
rehabilitation:
 US DollarFigures in million
    
    2010
    
    
    2009Provision raised for future rehabilitationBalance at beginning of year
    
    
    198
    
    
    
    196Disposal of assets
    
    
    (6
    )
    
    
    (32
    )Change in estimate  Balance sheet
    
    
    7
    
    
    
    27Change in estimate  Income statement
    
    
    4
    
    
    
    Additions to assets
    
    
    17
    
    
    
    Time value of money and inflation component of rehabilitation costs (a)16
    
    
    
    13Translation
    
    
    2
    
    
    
    (6
    )Balance at end of year
    
    
    238
    
    
    
    198Disposal groups classified as held for sale
    
    
    (16
    )
    
    
    Total provision for environmental rehabilitation
    
    
    222
    
    
    
    198
 (a)
    
    Includes both continuing and discontinued operations. During fiscal 2010 the group recognized time value of
money credit adjustments of US$2.2 million relating to both the sale of Big Bell and reclassification of Mount
Magnet to held for sale.While the ultimate amount of rehabilitation costs to be incurred
 F-56




---



##### 



Notes
to the consolidated financial statements
 in the future is uncertain, the group has estimated that, based on current environmental and regulatory requirements, the total cost for the mines, in
current monetary terms, is approximately US$346.6 million (2009: US$285.4 million). Refer to note 3.4 for the
estimations and judgements used in the calculations.Included in the charge to the income statement is an amount of US$3 million (2009: US$4 million) relating to the
time value of money.
 US DollarFigures in million
    
    2010
    
    
    2009Future net obligationsUltimate estimated rehabilitation cost
    
    
    347
    
    
    
    285Amounts invested in environmental trust funds (Refer to note 19)
    
    
    (223
    )
    
    
    (207
    )Total future net obligations
    
    
    124
    
    
    
    78
 The group intends to finance the ultimate rehabilitation costs from the money invested in environmental trust
funds, ongoing contributions, as well as the proceeds on sale of assets and gold from plant clean-up at the time
of mine closure. The group has guarantees in place relating to the environmental liabilities. Refer to notes 19
and 36.
 US DollarFigures in million
    
    2010
    
    
    2009
 28
    
    Retirement benefit obligation and other provisions
 Non-currentRetirement benefit obligation (Refer to note 32)
    
    
    20
    
    
    
    20Other
    
    
    2
    
    
    
    2Total non-current provisions
    
    
    22
    
    
    
    22
 29
    
    Borrowings
 Unsecured borrowingsAfrica Vanguard Resources (Proprietary) Limited (a)
    
    
    
    
    
    
    4Total unsecured non-current borrowings
    
    
    
    
    
    
    4Secured borrowingsNedbank Limited (b)
    
    
    
    
    
    
    Liability amount
    
    
    
    
    
    
    29Less: current portion
    
    
    
    
    
    
    (29
    )Westpac Bank (c)
    
    
    8
    
    
    
    10Liability amount
    
    
    12
    
    
    
    14Less: current portion
    
    
    (4
    )
    
    
    (4
    )Nedbank Limited (d)
    
    
    121
    
    
    
    Principal amount
    
    
    146
    
    
    
    Less: unamortized issue costs
    
    
    (2
    )
    
    
    Less: current portion
    
    
    (23
    )
    
    
    Total secured non-current borrowings
    
    
    129
    
    
    
    10Total non-current borrowings
    
    
    129
    
    
    
    14Total current portion of borrowings
    
    
    27
    
    
    
    33Total borrowings
    
    
    156
    
    
    
    47
 F-57




---



##### 



Notes
to the consolidated financial statements
 (a)
    
    The loan to AVRD from its holding company African Vanguard Resources
(Proprietary) Limited has been derecognized during the year. Refer to
note 26(f). The loan was unsecured and interest free.(b)
    
    On July 30, 2003, AVRD partially funded the purchase of an undivided
26% share of the Mining titles relating to the Doornkop South Reef
project, with a R140 million (US$19.1 million) Nedbank term loan
facility. This facility to AVRD was guaranteed by Harmony and certain
of its subsidiaries. As a result of this guarantee and other factors,
the company was required to consolidate AVRD into the group.On March 31, 2010, the company settled this facility as part of the
purchase consideration. Refer to note 26(f). Interest on the loan
facility accrued at a variable rate equal to JIBAR plus 2% and was
payable on settlement of the loan amount. Interest accrued and
capitalized during the year, up to settlement date, amounted to US$2.2
million (2009: US$3.3 million).Following the settlement of the loan facility Harmony is no longer
required to consolidate AVRD as part of the group.(c)
    
    In July 2007, Morobe Consolidated Goldfields (MCG) entered into a
finance lease agreement with Westpac Bank for the purchase of mining
fleet to be used on the Hidden Valley project.During the 2009 financial year, MCG sold 50% of the finance lease
liability to Newcrest in terms of the Master Purchase and Farm-In
agreement.Interest is charged at US  LIBOR plus 1.25% per annum. Interest is
accrued monthly and lease installments are repayable quarterly
terminating June 30, 2013. The mining fleet financed is used as
security for these loans.The future minimum lease payments are as follows:
 US DollarFigures in million
    
    2010
    
    
    2009Due within one year
    
    
    4
    
    
    
    4Due between one and two years
    
    
    5
    
    
    
    5Due between two and five years
    
    
    3
    
    
    
    612
    
    
    
    15Future finance charges
    
    
    
    
    
    
    (1
    )12
    
    
    
    14
 (d)
    
    On December 11, 2009, the Company entered into a loan facility with
Nedbank Limited, comprising a term facility of R900 million (US$119.4
million) and a revolving credit facility of R600 million (US$79.6
million). The facility was utilized to fund the acquisition of the
Pamodzi FS assets (refer note 16) as well as the groups major capital
projects and working capital requirements. Interest accrues on a day
to day basis over the term of the loan at a variable interest rate,
equal to 3 month JIBAR plus 3.5%. Interest is repayable quarterly.The term facility is repayable bi-annually in equal installments of
R90 million (US$11.8 million) over five years. The revolving credit
facility is repayable after three years. The term facility is fully
drawn and R300 million (US$40.5 million) was drawn on the revolving
credit facility.
 F-58




---



##### 



Notes to the consolidated financial statements
 (e)
    
    On November 12, 2009 the Australian operations raised a new loan with
BMW Finance of US$3.6 million for insurance premium funding. A deposit
of US$0.7 million was paid. The loan bore interest at 6.1% and was
repayable monthly in equal installments of US$0.4 million with the
last installment paid in June 2010.
 US DollarFigures in million
    
    2010
    
    
    2009
 The exposure of the groups borrowings to changes in interest rates
and contractual repricing is as follows:
 Variable
    
    
    156
    
    
    
    10Current
    
    
    
    
    
    
    33Between 1 to 2 years
    
    
    
    
    
    
    Between 2 to 5 years
    
    
    
    
    
    
    Over 5 years
    
    
    
    
    
    
    4Total borrowings
    
    
    156
    
    
    
    47Variable
    
    
    100.0
    %
    
    
    21.6
    %Current
    
    
    0.0
    %
    
    
    69.6
    %Between 1 to 2 years
    
    
    0.0
    %
    
    
    0.0
    %Between 2 to 5 years
    
    
    0.0
    %
    
    
    0.0
    %Over 5 years
    
    
    0.0
    %
    
    
    8.8
    %Total borrowings
    
    
    100.0
    %
    
    
    100.0
    %
 The maturity of borrowings is as follows:
 Current
    
    
    27
    
    
    
    33Between 1 to 2 years
    
    
    28
    
    
    
    4Between 2 to 5 years
    
    
    101
    
    
    
    6Over 5 years
    
    
    
    
    
    
    4Total borrowings
    
    
    156
    
    
    
    47
 The effective interest rates at the balance sheet date were as follows:
 Africa Vanguard Resources (Proprietary) Limited (a) #
    
    
    0.0
    %
    
    
    0.0
    %Nedbank Limited (b)*
    
    
    0.0
    %
    
    
    11.9
    %Westpac Bank (c)
    
    
    2.0
    %
    
    
    2.0
    %Nedbank Limited (d)
    
    
    10.1
    %
    
    
    0.0
    %BMW Financing (e) *
    
    
    0.0
    %
    
    
    0.0
    %
 
 #
    
    Derecognized as AVRD is no longer a SPE*
    
    Loan repaid in full Other borrowingsThe level of the Harmonys borrowing powers, as determined by its
Articles of Association, shall not except with the consent of the
Harmonys general meeting, exceed R40 million or the aggregate from
time to time of the issued and paid-up share capital of the company,
together with the aggregate of the amounts standing to the credit of
all distributable and non-distributable reserves (including minority
interests in subsidiary companies and provisions for deferred
taxation) and any share premium accounts of the group.
 F-59




---



##### 



Notes to the consolidated financial statements
 30
    
    Trade and other payables
 US DollarFigures in million
    
    2010
    
    
    2009Financial liabilities:Trade payables
    
    
    54
    
    
    
    63Other liabilities
    
    
    5
    
    
    
    8Non-financial liabilities:Payroll accruals
    
    
    44
    
    
    
    39Leave liabilities
    
    
    34
    
    
    
    31Shaft related accruals
    
    
    21
    
    
    
    20Other accruals
    
    
    23
    
    
    
    27Value added tax
    
    
    4
    
    
    
    1185
    
    
    
    189Disposal groups classified as held for sale
    
    
    
    
    
    
    Total trade and other payables
    
    
    185
    
    
    
    189
 Leave liabilityEmployee entitlements to annual leave are recognized on an ongoing basis. An accrual is made for the estimated
liability for annual leave as a result of services rendered by employees up to the balance sheet date. The
movement in the liability recognized in the balance sheet is as follows:
 US DollarFigures in million
    
    2010
    
    
    2009Balance at beginning of year
    
    
    31
    
    
    
    29Benefits paid
    
    
    (35
    )
    
    
    (27
    )Movement due to sale of business
    
    
    
    
    
    
    (2
    )Translation
    
    
    
    
    
    
    (1
    )Total expense per income statement
    
    
    38
    
    
    
    3234
    
    
    
    31Disposal groups classified as held for sale
    
    
    
    
    
    
    Balance at end of year
    
    
    34
    
    
    
    31
 31
    
    Cash generated by operations
 All amounts disclosed include discontinued operations.Reconciliation of profit before taxation to cash generated by operations:
 US DollarFigures in million
    
    2010
    
    
    2009
    
    
    2008Profit before taxation (1)
    
    
    20
    
    
    
    405
    
    
    
    33Adjustments for:Amortization and depreciation
    
    
    181
    
    
    
    167
    
    
    
    123Impairment of assets
    
    
    43
    
    
    
    61
    
    
    
    36Loss on financial instruments
    
    
    
    
    
    
    
    
    
    
    1Profit on sale of mining assets
    
    
    (14
    )
    
    
    (287
    )
    
    
    (15
    )Net (decrease)/increase in provision for post retirement benefits
    
    
    (3
    )
    
    
    1
    
    
    
    1Net increase in provision for environmental rehabilitation
    
    
    2
    
    
    
    
    
    
    
    2(Profit)/loss from associates
    
    
    (7
    )
    
    
    (1
    )
    
    
    11Impairment of investment in associate
    
    
    
    
    
    
    14
    
    
    
    12Share-based payments
    
    
    20
    
    
    
    13
    
    
    
    6Net (gain)/loss on financial instruments
    
    
    (5
    )
    
    
    10
    
    
    
    59Loss on sale of investment of subsidiary
    
    
    3
    
    
    
    
    
    
    
    Dividends received
    
    
    
    
    
    
    
    
    
    
    (5
    )Interest received
    
    
    (25
    )
    
    
    (51
    )
    
    
    (38
    )Interest paid
    
    
    30
    
    
    
    26
    
    
    
    76Provision for doubtful debts
    
    
    (2
    )
    
    
    11
    
    
    
    Bad debts written off
    
    
    4
    
    
    
    3
    
    
    
    Other non cash transactions
    
    
    8
    
    
    
    
    
    
    
    Effect of changes in operating working capital items:Receivables
    
    
    (13
    )
    
    
    (15
    )
    
    
    4Inventories
    
    
    (20
    )
    
    
    (20
    )
    
    
    7Accounts payable and accrued liabilities
    
    
    (8
    )
    
    
    (18
    )
    
    
    (45
    )Cash generated by operations
    
    
    214
    
    
    
    319
    
    
    
    268
 F-60




---



##### 



(1)
    
    Includes discontinued operations Additional cash flow informationThe income and mining taxes paid in the statement of cash flow represents actual cash paid less refunds received.Acquisitions and disposals of Subsidiaries / Businesses:For the financial year ended June 30, 2010
 (a)
    
    Disposal of Big Bell OperationsDuring January 2010 the group concluded the sale of Big Bell Operations (Proprietary)
Limited, a wholly owned subsidiary and operation in Western Australia, for a total
consideration of US$3.2 million.The aggregate fair values of assets and liabilities sold were:
 US DollarFigures in million
    
    2010
    
    
    2009
    
    
    2008Property, plant and equipment
    
    
    8
    
    
    
    
    
    
    
    Rehabilitation liability
    
    
    (6
    )
    
    
    
    
    
    
    Profit on disposal
    
    
    1
    
    
    
    
    
    
    
    Proceeds received in cash
    
    
    3
    
    
    
    
    
    
    
    
 (b)
    
    Acquisition of Pamodzi FS assetsOn February 18, 2010 the group concluded the acquisition of the Pamodzi FS assets for a
total consideration of R405 million (US$53 million), of which R280 million (US$36
million) is attributable to property, plant and equipment and R120 million (US$16
million) to inventories.
 The principal non-cash transactions for the year were the issue of shares for the acquisition of 26% share of the mining titles on
Doornkop South Reef from AVRD (refer to note 25) and the share based-payments (refer to note 34).For the financial year ended June 30, 2009
 (a)
    
    Disposal of Randfontein Cooke AssetsDuring the year, the group disposed of its Cooke and Old Randfontein assets to Rand
Uranium, a wholly owned subsidiary. In a related transaction, 60% of Rand Uranium shares
were disposed of to PRF in two tranches. For detail, refer to note 21(b).The aggregate fair value of the assets and liabilities sold were:
 US DollarFigures in million
    
    2010
    
    
    2009
    
    
    2008Transaction oneProperty, plant and equipment
    
    
    
    
    
    
    42
    
    
    
    Environmental trust fund
    
    
    
    
    
    
    3
    
    
    
    Rehabilitation liability
    
    
    
    
    
    
    (4
    )
    
    
    Other costs
    
    
    
    
    
    
    (2
    )
    
    
    Foreign exchange movements
    
    
    
    
    
    
    5
    
    
    
    Profit on disposal
    
    
    
    
    
    
    153
    
    
    
    Proceeds received in cash
    
    
    
    
    
    
    197
    
    
    
    
 F-61




---



##### 



US DollarFigures in million
    
    2010
    
    
    2009
    
    
    2008Transaction twoProperty, plant and equipment
    
    
    
    
    
    
    1
    
    
    
    Environmental trust fund
    
    
    
    
    
    
    8
    
    
    
    Rehabilitation liability
    
    
    
    
    
    
    (13
    )
    
    
    Foreign exchange movements
    
    
    
    
    
    
    (2
    )
    
    
    Profit on disposal
    
    
    
    
    
    
    18
    
    
    
    Proceeds received in cash
    
    
    
    
    
    
    12
    
    
    
    
 (b)
    
    MM Joint VentureDuring the year Harmony and Newcrest entered into a joint venture agreement, which
provided that Newcrest would purchase a 30.01 participating interest and a further
buy-out of an additional 19.99% participating interest in Harmonys MMJV gold and copper
assets.The aggregate fair value of the assets and liabilities sold were:
 US DollarFigures in million
    
    2010
    
    
    2009
    
    
    2008Stage 1: 30.01% Participating interestProperty, plant and equipment
    
    
    
    
    
    
    185
    
    
    
    Trade and other receivables
    
    
    
    
    
    
    6
    
    
    
    Inventory
    
    
    
    
    
    
    1
    
    
    
    Non-current loans
    
    
    
    
    
    
    (10
    )
    
    
    Rehabilitation liability
    
    
    
    
    
    
    
    
    
    
    Foreign exchange movements
    
    
    
    
    
    
    (11
    )
    
    
    Profit on disposal
    
    
    
    
    
    
    58
    
    
    
    Proceeds received in cash
    
    
    
    
    
    
    229
    
    
    
    Stage 2: 10% Participating interestProperty, plant and equipment
    
    
    
    
    
    
    52
    
    
    
    Trade and other receivables
    
    
    
    
    
    
    1
    
    
    
    Inventory
    
    
    
    
    
    
    1
    
    
    
    Non-current loans
    
    
    
    
    
    
    (3
    )
    
    
    Trade and other payables
    
    
    
    
    
    
    (5
    )
    
    
    Rehabilitation liability
    
    
    
    
    
    
    
    
    
    
    Profit on disposal
    
    
    
    
    
    
    44
    
    
    
    Disposal proceeds
    
    
    
    
    
    
    90
    
    
    
    Proceeds received in cash
    
    
    
    
    
    
    
    
    
    
    Proceeds received by way of the farm-in agreement
    
    
    
    
    
    
    90
    
    
    
    Stage 3: 9.99% Participating interestProperty, plant and equipment
    
    
    
    
    
    
    72
    
    
    
    Trade and other receivables
    
    
    
    
    
    
    2
    
    
    
    Inventory
    
    
    
    
    
    
    3
    
    
    
    Non-current loans
    
    
    
    
    
    
    (3
    )
    
    
    Trade and other payables
    
    
    
    
    
    
    (6
    )
    
    
    Rehabilitation liability
    
    
    
    
    
    
    (3
    )
    
    
    Profit on disposal
    
    
    
    
    
    
    10
    
    
    
    Disposal proceeds
    
    
    
    
    
    
    75
    
    
    
    Proceeds received in cash
    
    
    
    
    
    
    (6
    )
    
    
    Proceeds received by way of the farm-in agreement
    
    
    
    
    
    
    69
    
    
    
    
 The principal non-cash transactions for the year were the acquisition of PNG royalty agreement (refer to note 16(c), share-based
payments (refer to note 34) and share exchange of Dioro for Avoca (refer to note 20(b)).
 F-62




---



##### 



For the financial year ended June 30, 2008
 (a)
    
    On December 6, 2007, the group disposed of its assets and liabilities in South Kal Mine
to Dioro. The aggregate fair value of the assets and liabilities sold were:
 US DollarFigures in million
    
    2010
    
    
    2009
    
    
    2008Property, plant and equipment
    
    
    
    
    
    
    
    
    
    
    50Consumables
    
    
    
    
    
    
    
    
    
    
    3Shares
    
    
    
    
    
    
    
    
    
    
    3Rehabilitation liability
    
    
    
    
    
    
    
    
    
    
    (8
    )Loss on disposal
    
    
    
    
    
    
    
    
    
    
    (12
    )Disposal proceeds
    
    
    
    
    
    
    
    
    
    
    36Proceeds received by way of shares
    
    
    
    
    
    
    
    
    
    
    (18
    )Proceeds received in cash
    
    
    
    
    
    
    
    
    
    
    18
 (b)
    
    On February 27, 2008, the group disposed of its assets and liabilities in its Orkney
operations to Pamodzi Gold Limited. The aggregate fair value of assets and liabilities
sold were:
 US DollarFigures in million
    
    2010
    
    
    2009
    
    
    2008Property, plant and equipment
    
    
    
    
    
    
    
    
    
    
    38Environmental trust fund
    
    
    
    
    
    
    
    
    
    
    4Leave liability
    
    
    
    
    
    
    
    
    
    
    (2
    )Rehabilitation liability
    
    
    
    
    
    
    
    
    
    
    (7
    )Profit on disposal
    
    
    
    
    
    
    
    
    
    
    13Disposal proceeds
    
    
    
    
    
    
    
    
    
    
    46Proceeds received by way of shares
    
    
    
    
    
    
    
    
    
    
    (46
    )Cash and cash equivalent at disposal
    
    
    
    
    
    
    
    
    
    
    
 The principal non-cash transactions for the year were the acquisition of the PNG royalty agreement (refer to note 16(b)),
share-based payments (refer to note 34) and the purchase of assets under finance lease (refer to note 27).32
    
    Retirement benefit obligations
 (a)
    
    Pension and provident funds:The group contributes to several pension and provident
funds governed by the Pension Funds Act, 1956 for the employees of its South African
subsidiaries. The pension funds are multi-employer industry plans. The groups liability
is limited to its annually determined contributions.The provident funds are funded on the money accumulative basis with the members and
employers contributions having been fixed in the constitution of the funds.The Australian group companies make contributions to each employees Superannuation
(pension) funds in accordance with the Superannuation Guarantee Scheme (SGS). The SGS is
a Federal Government initiative enforced by law which compels employers to make regular
payments to regulated funds providing for each employee on their retirement. The SGS
were set at a minimum of 9% of gross salary and wages for the 2010 financial year (2009:
9%). The fund is a defined contribution plan.Substantially all the groups employees are covered by the above mentioned retirement
benefit plans. Funds contributed by the group for the 2010 financial year amounted to
US$55.2 million (2009: US$39.8 million).
 F-63




---



##### 



(b)
    
    Post-retirement benefits other than pensions: Most of the supervisory and managerial
workers in South Africa participate in the Minemed medical scheme, as well as other
medical schemes. The group contributes to these schemes on behalf of current employees
and retired employees who retired prior to December 31, 1996 (Minemed scheme). The
annual contributions for these retired employees are fixed. The groups contributions to
these schemes on behalf of current employees amounted to US$13.9 million for 2010 and
US$8.6 million for 2009.Harmony inherited a post-retirement medical benefit obligation, which existed at the
time of the Freegold acquisition in 2002. The groups obligation in this regard is to
pay a subsidy of 2% for every completed year of employment up to a maximum of 50% of
total medical aid contributions, commencing on date of retirement. Should the employee
die, either in service or after retirement, this benefit will transfer to his/her
dependents. The medical aid tariffs are based on the Minemed medical scheme options.
Except for the pre-mentioned employees, Harmony has no other post-retirement obligation
for the other group employees.Assumptions used to determine this liability include, a discount rate of 10.3%, a
mortality rate according to the SA 1956/62 mortality table and a medical inflation rate
of 8.1%. It is also assumed that all members will retire at the age of 60 and will
remain on the current benefit option.The liability is based on an actuarial valuation conducted during the financial year
ended June 30, 2010, using the projected unit credit method. The next actuarial
valuation will be performed on June 30, 2011.
 US DollarFigures in million
    
    2010
    
    
    2009Present value of unfunded obligations
    
    
    20
    
    
    
    20Movement in the liability recognized in the balance sheetBalance at beginning of year
    
    
    20
    
    
    
    17Contributions paid
    
    
    (1
    )
    
    
    Other expenses included in staff costs/current service cost
    
    
    1
    
    
    
    1Interest cost
    
    
    2
    
    
    
    2Net actuarial loss recognized during the year (1)
    
    
    1
    
    
    
    Curtailments (2)
    
    
    (3
    )
    
    
    Balance at end of year
    
    
    20
    
    
    
    20
 
 (1)
    
    The net actuarial loss recognized during the 2008 financial year was US$2 million, in
the 2007 financial year a gain of US$2 million and in the 2006 financial year a loss of
US$1.3 million.(2)
    
    The terms of employment of 124 members changed, resulting in a reduction of the
liability of US$2.8 million. F-64




---



##### 



The principal actuarial assumptions used for accounting purposes were:
 US DollarFigures in million
    
    2010
    
    
    2009Discount rate
    
    
    10.3
    %
    
    
    10.0
    %Healthcare inflation rate
    
    
    8.1
    %
    
    
    7.8
    %Normal retirement age
    
    
    60
    
    
    
    60The net liability of the defined benefit plan is as follows:Present value of defined benefit obligation
    
    
    20
    
    
    
    20Fair value of plan assets
    
    
    
    
    
    
    Net liability
    
    
    20
    
    
    
    20
 The present value of the defined benefit obligation was US$17 million in the 2008
financial year, US$15.2 million in the 2007 financial year and US$14.9 million in 2006
financial year.The effect of a one percentage point increase and decrease in the assumed medical cost
trend rates is as follows:
 1%
    
    
    1%Increase
    
    
    IncreaseEffect on:Aggregate of service cost and interest cost
    
    
    1
    
    
    
    Defined benefit obligation
    
    
    4
    
    
    
    3
 1%
    
    
    1%Decrease
    
    
    DecreaseEffect on:Aggregate of service cost and interest cost
    
    
    1
    
    
    
    Defined benefit obligation
    
    
    4
    
    
    
    3
 The group expects to contribute approximately US$0.6 million to its benefit plan in 2011.
 US DollarFigures in million
    
    2010
    
    
    2009
 33
    
    Employee benefits
 Number of permanent employees as at June 30:South African operations*
    
    
    36,204
    
    
    
    37,316International operations**
    
    
    1,105
    
    
    
    979Total number of permanent employees
    
    
    37,309
    
    
    
    38,295Aggregated earningsThe aggregate earnings of employees including directors were:Salaries and wages and other benefits
    
    
    716
    
    
    
    509Retirement benefit costs
    
    
    55
    
    
    
    40Medical aid contributions
    
    
    14
    
    
    
    9Total aggregated earnings
    
    
    785
    
    
    
    558
 
 *
    
    There was no employees attributable to the discontinued operations at June 30, 2010 (2009: 0; 2008: 3 618).**
    
    The total employees at Australian operations at June 30, 2010 was 56 (2009: 48, 2008: 873). Of this total, 12 employees (2009:
0; 2008: 0) were attributable to the discontinued operations. The total for the international operations includes the MMJV
employees. During fiscal 2010, US$5 million (2009: US$2 million; 2008: US$0.7 million) was included in the payroll cost for termination costs.
This excludes the cost for voluntary retrenchment process (refer to note 5).
 F-65




---



##### 



Directors remunerationDuring fiscal 2010, the directors received remuneration of US$1.8 million, comprising of US$1.3 million for salaries, US$0.03
million for retirement contributions and US$0.31 million for bonuses. The non-executive directors received US$0.6 million in
directors fees. The aggregate of remuneration received by senior management was US$3.2 million.During fiscal 2009, the directors received remuneration of US$1.1 million, comprising of US$0.74 million for salaries, US$0.03
million for retirement contributions and US$0.33 million for bonuses. The non-executive directors received US$0.4 million in
directors fees. The aggregate of remuneration received by senior management was US$2.7 million.
 34
    
    Share option schemeThe group currently has the 2001, 2003 schemes and the 2006 share plan that are active. The objective of these schemes is to recognise the contributions of senior staff to the groups financial position and performance and to retain key employees.The options granted under the 2001 and 2003 schemesA fifth of the options granted under the 2001 and 2003 schemes are exercisable annually from the grant date with an expiry date of 10 years from the grant date. The offer price of these options equaled the closing market price of the underlying shares on the trading date
immediately preceding the granting of the options.On resignation and retirement, share options which have not yet vested will lapse and share options which have vested may be taken up at the employees election before the last day of service. Payment of shares forfeited will therefore not be required. On death, all
options vest immediately and the deceased estate has a period of twelve months to exercise these options.Following the introduction of the 2006 share plan, no further options are expected to be allocated under these two schemes.
 Number of share options relating to
the 2001 and 2003 option schemes
    
    2010
    
    
    2009Share options granted
    
    
    28,442,420
    
    
    
    28,442,420Exercised
    
    
    19,133,887
    
    
    
    18,570,971Vested but not exercised
    
    
    2,264,585
    
    
    
    1,791,215Unvested
    
    
    
    
    
    
    1,059,343Forfeited and lapsed
    
    
    7,043,948
    
    
    
    7,020,891Vesting
periods of unvested sharesWithin one year
    
    
    
    
    
    
    1,059,343Total number of shares unvested
    
    
    
    
    
    
    1,059,343
 No options were granted in fiscal 2010 and 2009 for the 2001 and 2003 option schemes.
 F-66




---



##### 



Weightedaverageoption priceActivity on share options granted but not yet exercised
    
    Shares
    
    
    (SA Rand)For the year ended June 30, 2010Balance at beginning of year
    
    
    2,850,558
    
    
    
    47.58Options exercised
    
    
    (562,916
    )
    
    
    44.16Options forfeited and lapsed
    
    
    (23,057
    )
    
    
    43.75Balance at end of year
    
    
    2,264,585
    
    
    
    48.47For the year ended June 30, 2009Balance at beginning of year
    
    
    4,528,239
    
    
    
    49.14Options exercised
    
    
    (1,321,303
    )
    
    
    51.42Options forfeited and lapsed
    
    
    (356,378
    )
    
    
    53.12Balance at end of year
    
    
    2,850,558
    
    
    
    47.58
 At June
    
    
    Option price
    
    
    RemainingList of options granted but not yet exercised (listed by grant date)
    
    30, 2010
    
    
    (SA Rand)
    
    
    life (years)April 24, 2001
    
    
    17,000
    
    
    
    36.50
    
    
    
    0.8November 20, 2001
    
    
    167,901
    
    
    
    49.60
    
    
    
    1.4September 23, 2002
    
    
    
    
    
    
    66.00
    
    
    
    2.2March 27, 2003
    
    
    125,300
    
    
    
    91.60
    
    
    
    2.7August 10, 2004
    
    
    482,967
    
    
    
    66.15
    
    
    
    4.1April 26, 2005
    
    
    1,471,417
    
    
    
    39.00
    
    
    
    4.8Total option granted but not yet exercised
    
    
    2,264,585
  List of options granted but not yet vested (listed by grant date)
    
    2010
    
    
    2009August 10, 2004
    
    
    
    
    
    
    316 498April 26, 2005
    
    
    
    
    
    
    742 845Total options granted but not yet vested
    
    
    
    
    
    
    1,059,343US DollarFigures in million
    
    2010
    
    
    2009Average market price options traded during the year
    
    
    6
    
    
    
    11Average fair value of share options vested during
the year
    
    
    8
    
    
    
    14Share based cost recognised
    
    
    
    
    
    
    1
 The share based cost is calculated using the binominal valuation model based on the following assumptions at grant date:
 Option allocationAugust 10,
    
    
    April 26,2004
    
    
    2005Price at date of grant (SA Rand per share)
    
    
    66.15
    
    
    
    39.00Risk-free interest rate:
    
    
    9.9
    %
    
    
    8.4
    %Expected volatility:
    
    
    40.0
    %
    
    
    35.0
    %Expected dividend yield:
    
    
    0.0
    %
    
    
    0.0
    %Vesting period:
    
    5 years
    
    5 years
    F-67




---



##### 



The shares granted under the 2006 share plan
      
    
    First the maximum number conditionally awarded is pro-rated for the time period until the termination date;   
    Then this adjusted number is reduced to a third on the assumption that Harmonys performance was a median one with one
third vesting, after taking into account any portion of shares that have banked already in terms of the 2009 issue;
    
    And then settled in shares sold on the market for cash, and paid to the participant after the deduction of any tax payable.
  Number of shares relating to the 2006 share plan at June 30,
    
    2010
    
    
    2009Shares granted
    
    
    12,353,960
    
    
    
    9,002,627Vested
    
    
    185,473
    
    
    
    Performance shares
    
    
    
    
    
    
    Share appreciation rights
    
    
    185,473
    
    
    
    Unvested
    
    
    10,082,512
    
    
    
    7,854,749Performance shares
    
    
    3,492,402
    
    
    
    3,302,163Share appreciation rights
    
    
    6,590,110
    
    
    
    4,552,586Shares forfeited
    
    
    2,085,975
    
    
    
    1,147,878Performance shares
    
    
    869,536
    
    
    
    415,964Share appreciation rights
    
    
    1,216,439
    
    
    
    731,914Vesting periods of unvested shares:Within one year
    
    
    1,550,416
    
    
    
    503,589One to two years
    
    
    3,463,496
    
    
    
    1,651 892Two to three years
    
    
    2,728,330
    
    
    
    3,675 954Three to four years
    
    
    1,492,598
    
    
    
    1,329 960Four to five years
    
    
    847,672
    
    
    
    693,354Total number of unvested shares
    
    
    10,082,512
    
    
    
    7,854,749
 F-68




---



##### 



2010
    
    
    2009Weighted
    
    
    
    
    
    
    Weightedaverage
    
    
    
    
    
    
    averageFor the year ended June 30,
    
    
    
    
    
    option price
    
    
    
    
    
    
    option priceActivity on PS and SARs granted but not yet exercised
    
    Shares
    
    
    (SA Rand)
    
    
    Shares
    
    
    (SA Rand)Balance at beginning of year
    
    
    7,854,749
    
    
    
    
    
    
    
    4,236,938Performance shares
    
    
    3,302,164
    
    
    
    n/a
    
    
    
    1,341,444
    
    
    
    n/aShare appreciation rights
    
    
    4,552,585
    
    
    
    79.38
    
    
    
    2,895,494
    
    
    
    81.04Options granted
    
    
    3,351,333
    
    
    
    
    
    
    
    4,325 907Performance shares
    
    
    643,810
    
    
    
    n/a
    
    
    
    2,206,026
    
    
    
    n/aShare appreciation rights
    
    
    2,707,523
    
    
    
    77.28
    
    
    
    2,119,881
    
    
    
    77.81Options lapsed
    
    
    (938,097
    )
    
    
    
    
    
    
    (708,096
    )Performance shares
    
    
    (453,572
    )
    
    
    n/a
    
    
    
    (245,306
    )
    
    
    n/aShare appreciation rights
    
    
    (484,525
    )
    
    
    78.54
    
    
    
    (462,790
    )
    
    
    92.79Options vested
    
    
    (185,473
    )
    
    
    
    
    
    
    Performance shares
    
    
    
    
    
    
    n/a
    
    
    
    
    
    
    
    Share appreciation rights
    
    
    (185,473
    )
    
    
    112.64
    
    
    
    
    
    
    
    Balance at end of year
    
    
    10,082,512
    
    
    
    
    
    
    
    7,854,749Performance shares
    
    
    3,492,402
    
    
    
    n/a
    
    
    
    3,302,164
    
    
    
    n/aShare appreciation rights
    
    
    6,590,110
    
    
    
    77.65
    
    
    
    4,552,585
    
    
    
    79.38
 At June 30,
    
    
    Strike price
    
    
    RemainingList of shares granted but not yet exercised (listed by grant date)
    
    2010
    
    
    (SA Rand)
    
    
    life (years)Performance sharesNovember 15, 2007
    
    
    777,910
    
    
    
    n/a
    
    
    
    0.40March 07, 2008
    
    
    12,308
    
    
    
    n/a
    
    
    
    0.70December 05, 2008
    
    
    2,058,372
    
    
    
    n/a
    
    
    
    1.40November 15, 2009
    
    
    643,810
    
    
    
    n/a
    
    
    
    2.40Share appreciation rightsNovember 15, 2006
    
    
    336,552
    
    
    
    112.64
    
    
    
    2.38November 15, 2007
    
    
    1,729,611
    
    
    
    70.54
    
    
    
    3.38March 07, 2008
    
    
    46,154
    
    
    
    102.00
    
    
    
    3.69December 05, 2008
    
    
    1,934,780
    
    
    
    77.81
    
    
    
    4.44November 16, 2009
    
    
    2,543,015
    
    
    
    77.28
    
    
    
    5.40Total options granted but not yet exercised
    
    
    10,082,512
 US DollarFigures in million
    
    2010
    
    
    2009Average fair value of share options vested during the year
    
    
    3
    
    
    
    0Share based cost recognised
    
    
    19
    
    
    
    12
 F-69




---



##### 



Performanceshares
    
    
    SARsPrice at date of grant (SA Rand per share)- November 15, 2006 share allocation
    
    
    n/a
    
    
    
    112.64- November 15, 2007 share allocation (valuation date December 21, 2007)
    
    
    n/a
    
    
    
    68.44- November 15, 2007 share allocation (valuation date April 21, 2008)
    
    
    n/a
    
    
    
    92.25- March 7, 2008 share allocation
    
    
    n/a
    
    
    
    102.00- December 5, 2008 share allocation (valuation date December 5, 2008)
    
    
    n/a
    
    
    
    77.81- December 5, 2008 share allocation (valuation date February 16, 2009)
    
    
    n/a
    
    
    
    116.90- November 16, 2009 share allocation (valuation date November 27, 2009)
    
    
    n/a
    
    
    
    81.50- November 16, 2009 share allocation (valuation date December 23, 2009)
    
    
    n/a
    
    
    
    75.60- November 16, 2009 share allocation (valuation date May 3, 2010)
    
    
    n/a
    
    
    
    72.14Risk-free interest rate:- November 15, 2006 share allocation
    
    
    9.58
    %
    
    
    8.79
    %- November 15, 2007 share allocation (valuation date December 21, 2007)
    
    
    10.81
    %
    
    
    9.84
    %- November 15, 2007 share allocation (valuation date April 21, 2008)
    
    
    11.71
    %
    
    
    10.68
    %- March 7, 2008 share allocation
    
    
    11.04
    %
    
    
    10.44
    %- December 5, 2008 share allocation (valuation date December 5, 2008)
    
    
    8.55
    %
    
    
    8.43
    %- December 5, 2008 share allocation (valuation date February 16, 2009)
    
    
    8.18
    %
    
    
    8.30
    %- November 16, 2009 share allocation (valuation date November 27, 2009)
    
    
    0.00
    %
    
    
    8.63
    %- November 16, 2009 share allocation (valuation date December 23, 2009)
    
    
    0.00
    %
    
    
    8.57
    %- November 16, 2009 share allocation (valuation date May 3, 2010)
    
    
    7.29
    %
    
    
    0.00
    %Expected volatility*:- November 15, 2006 share allocation
    
    
    34.71
    %
    
    
    26.37
    %- November 15, 2007 share allocation (valuation date December 21, 2007)
    
    
    46.32
    %
    
    
    35.10
    %- November 15, 2007 share allocation (valuation date April 21, 2008)
    
    
    49.52
    %
    
    
    41.72
    %- March 7, 2008 share allocation
    
    
    50.49
    %
    
    
    54.50
    %- December 5, 2008 share allocation (valuation date December 5, 2008)
    
    
    56.62
    %
    
    
    48.61
    %- December 5, 2008 share allocation (valuation date February 16, 2009)
    
    
    70.86
    %
    
    
    49.03
    %- November 16, 2009 share allocation (valuation date November 27, 2009)
    
    
    
    
    
    
    49.29
    %- November 16, 2009 share allocation (valuation date December 23, 2009)
    
    
    
    
    
    
    49.21
    %- November 16, 2009 share allocation (valuation date May 3, 2010)
    
    
    37.34
    %
    
    
    
 Expected dividend yield:- for all allocations
    
    
    0.00
    %
    
    
    0.00
    %Vesting period (from grant date):- for all allocations
    
    3 years
    
    
    5 years





|  |  |                                                                                                                                                                                                                                                                                                          
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* |  | The volatility is measured as an annualised standard deviation of historical share price
returns, using an exponentially
weighted moving average (EWMA) model, with a lambda of 0.99. The volatility is calculated on
the grant date, and takes
into account the previous three years of historical data.

F-70



---



##### 



Share based costs are measured at the fair value of the equity instruments at the date of the
grant as defined in IFRS 2. The grant date is the date of which the entity and counterparty have a
shared understanding of the terms and conditions of the share-based payment arrangement. The cost
is expensed over the vesting period, based on the groups estimate of the options that are
expected to eventually vest, within the rules of IFRS2.For November 15, 2006, November 15, 2007 and March 7, 2008 issue:The performance criteria imposed by the board and which must be satisfied before settlement
of any PS under these awards are linked to the Companys TSR in comparison to the Philadelphia XAU
index of international gold and precious metal mining companies (50%) and the JSE Gold Mining
index (50%).The following performance criteria was imposed per the Harmony (2006) Share Plan which must
be satisfied before the settlement of any SARs:
 
    
    that the Companys headline earnings per share have grown since the allocation date by a
minimum of CPI plus 3%;
    
    that the Companys performance has since the allocation date been a satisfactory
achievement in terms of the Companys sustainability index.
 For December 5, 2008 issue:The Performance Criteria imposed by the Board and which must be satisfied before the
Settlement of any PS under this Award are linked to the Companys TSR (Total Shareholder Return)
in comparison to the SA Gold Index (50%) and the SA Resource Index (50%);The following performance criteria was imposed per the Harmony (2006) Share Plan which must
be satisfied before the settlement of any SARs:
 
    
    that the Companys headline earnings per share have grown since the allocation date by
more than the CPI.
 For November 16, 2009 issue:The Performance Criteria imposed by the Board, and which must be satisfied before the
Settlement of any Performance Shares under this Award, are as follows:
 
    
    50% of the number shares awarded are to be linked to the annual gold production of the
company in relation to the targets set annually.
    
    50% of the number shares awarded are linked to the Companys TSR (Total Shareholder
Return) in comparison to the South African Gold peers.
 The following performance criteria was imposed per the Harmony (2006) Share Plan which must
be satisfied before the settlement of any SARs:
 
    
    the Companys headline earnings per share should grow, since the allocation date, by more
than the CPI.
 For options granted during the year, the following fair values were used as a basis to
recognise share-based payment cost:
 
    
    For options measured on November 27, 2009, the value is R44.52 per share for SARs.
    
    For options measured on December 23, 2009, the value is R39.26 for SARs.
    
    For options measured on May 3, 2010, the value is R38.49 for PS.
 35
    
    Related parties
 None of the directors or major shareholders of Harmony or, to the knowledge of Harmony, their
families, had interest, direct or indirectly, in any transaction since July 1, 2007 or in any
proposed transaction that has affected or will materially affect Harmony or its subsidiaries,
other than as stated below.Key management personnel are those persons having authority and responsibility for planning,
directing and controlling the activities of the group, directly or indirectly, including any
director (whether executive or otherwise) of the group.Directors and executive managements remuneration is disclosed in note 33.African Rainbow Minerals Limited (ARM) currently holds 14.6% of Harmonys shares. Patrice
Motsepe, Andre Wilkens, Joaquim Chissano and Frank Abbott are directors of ARM.
 Harmony currently holds 40% of the shares of Rand Uranium. Graham Briggs, Hannes Meyer and
Fikile De Buck are directors of Rand Uranium. Dr Simo Lushaba is a member of the Rand Uranium
Investment Committee.A list of the groups subsidiaries, associates and joint ventures has been included in
Annexure A.
 F-71




---



##### 



Material transactions with associates and joint ventures:Besides the transactions disclosed below, the group concluded the following transactions with
related parties:
 
    
    Pamodzi  Refer to note 16.
    
    AVRD  Refer to note 26.
    
    On July 10, 2008, the group disposed of its interest in Village Reef Gold Mining Company to
To the Point Growth Specialists Investments 2 (Pty) Ltd (To the Point). Bernard Swanepoel was an
executive director of both Harmony and To the Point during 2008.
 US DollarFigures in million
    
    2010
    
    
    2009Sales and services rendered to related partiesAssociates
    
    
    58
    
    
    
    24Joint Venture
    
    
    1
    
    
    
    59
    
    
    
    24Purchases and services acquired from related partiesAssociates
    
    
    4
    
    
    
    1Outstanding balances due by related partiesAssociates
    
    
    16
    
    
    
    22Joint Ventures
    
    
    130
    
    
    
    10146
    
    
    
    32Outstanding balances due to related partiesAssociates
    
    
    4
    
    
    
    
 Refer to note 24 for detail on the items relating to the loans to/(from) associates and joint
ventures and provisions raised against these loans.
 US DollarFigures in million
    
    2010
    
    
    2009
 36
    
    Commitments and Contingencies
 Capital expenditure commitmentsContracts for capital expenditure
    
    
    17
    
    
    
    32Share of Joint Ventures contract for capital expenditure
    
    
    27
    
    
    
    30Authorised by the directors but not contracted for
    
    
    132
    
    
    
    95Total capital commitments
    
    
    176
    
    
    
    157
 This expenditure will be financed from existing resources and where appropriate, borrowings.The group is contractually obliged to make the following payments in respect of operating
leases, including for land and buildings, and for mineral tenement leases:
 US DollarFigures in million
    
    2010
    
    
    2009Within one year
    
    
    4
    
    
    
    5Between one year and five years
    
    
    1
    
    
    
    15
    
    
    
    6
 This includes US$0.9 million for the MMJV. For details on the groups finance leases, refer
to note 29.
 US DollarFigures in million
    
    2010
    
    
    2009Contingent liabilitiesGuarantees and suretyships
    
    
    3
    
    
    
    3Environmental guarantees (i)
    
    
    67
    
    
    
    3970
    
    
    
    42
 (i)
    
    Included in the balance for fiscal 2010 is an amount of US$17.0 million (2009: US$16.8
million) relating to guarantees provided for the Rand Uranium transaction. These guarantees will
be cancelled once Rand Uranium puts its own guarantees in place. US$14.6 million has been pledged
as collateral for environmental guarantees in favour of certain financial institutions. Refer to
note 18.
 F-72




---



##### 



Contingent liability(a)
    
    Class action:On April 18, 2008, Harmony Gold Mining Company Limited was made aware that it
has been named or may be named as a defendant in a lawsuit filed in the U.S. District Court in the
Southern District of New York on behalf of certain purchasers and sellers of Harmonys American
Depository Receipts (ADRs) and options with regard to certain of its business practices. Harmony
has retained legal counsel.During January 2009, the plaintiff filed an Amended Complaint with the United States District
Court (Court). Subsequently, the Company filed a Motion to Dismiss all claims asserted in the
Class Action Case. On March 19, 2010 the Court denied the Companys application for dismissal and
subsequently the Company filed a Motion for Reconsideration in which it requested the Court to
reconsider its judgement. This matter was heard on April 27, 2010 and the Companys request for
reconsideration of judgement was denied. The Company is defending the matter and the legal process
is taking its course. It is currently not possible to estimate if there will be a financial
effect, or what that effect might be.(b)
    
    The group may have a potential exposure to rehabilitate groundwater and radiation that may
exist where the group has and/or continues to operate. The group has initiated analytical
assessments to identify, quantify and mitigate impacts if and when (or as and where) they arise.
Numerous scientific, technical and legal studies are underway to assist in determining the
magnitude of the contamination and to find sustainable remediation solutions. The group has
instituted processes to reduce future potential seepage and it has been demonstrated that
Monitored Natural Attenuation (MNA) by the existing environment will contribute to improvement in
some instance. The ultimate outcome of the matter cannot presently be determined and no provision
for any liability that may result has been made in the financial statements. Should the Group
determine that any part of these contingencies require them being recorded and accounted for as
liabilities, i.e. where they become quantifiable and probable, it could have a material impact on
the financial status of the Group.(c)
    
    Due to the interconnected nature of mining operations, any proposed solution for potential
flooding and potential rdecant risk posed by deep groundwater needs to be a combined one,
supported by all the mines located in these goldfields. As a result, the Department of Mineral
Resource and affected mining companies are involved in the development of a Regional Mine Closure
Strategy. In view of the limitation of current information for the accurate estimation of a
liability, no estimate can be made for the obligation.(d)
    
    On December 1, 2008, the group issued 3 364 675 to Rio Tinto for the purchase of Rio Tintos
rights to the royalty agreement entered into prior ro the groups acquisition of the Wafi deposits
in PNG. The shares were valued at US$23 million on the transaction date. An additional US$10
million in cash will be payable when the decision to mine is made. Of this amount, Harmony is
responsible for paying the first US$6 million, with the balance of US$4 million being borne
equally by the joint venture partners.(e)
    
    In terms of the sale agreements entered into with Rand Uranium (refer note 14), Harmony
retained financial exposure relating to environmental disturbances and degradation caused by the
group before the effective date, in excess of US$10 million of potential claims. Rand Uranium is
therefore liable of all claims up to US$10 million and retains legal liability. The likelihood of
potential claims cannot be determined presently and no provision for any liability has been made
in the financial statements.37
    
    Subsequent eventsSale of Mount MagnetOn July 20, 2010, the group concluded an agreement with Ramelius Resources Limited to sell
its 100% share in Mount Magnet Gold NL (Mount Magnet) for a total consideration of US$35 million.
The group recognised a profit of US$18.4 million. Refer to note 14 in this regard.
 F-73




---



##### 



DividendsOn August 13, 2010, the Board of Directors approved a final dividend for the 2010 financial year of 50 SA cents per share. The total dividend amounts to US$29.3 million. As this dividend was declared after the reporting date, it has not been reflected in the financial statements for the period ended June 30, 2010. The dividend
was paid on September 20, 2010.Merriespruit South region and Freegold optionOn September 3, 2010, Harmony Gold Mining Company Limited (Harmony) concluded two transactions with Witwatersrand Consolidated Gold Resources Limited (Wits Gold), in which Wits Gold will obtain a prospecting right over Harmonys Merriespruit South area and the option held by ARMGold/Harmony Freegold Joint Venture Company
(Proprietary) Limited (Freegold), a wholly owned subsidiary of Harmony. The option was to acquire a beneficial interest of up to 40% in any future mines established by Wits Gold on certain properties in the Southern Free State (Freegold option), which will be cancelled. Harmony will abandon a portion of its mining right in
respect of the Merriespruit South area to enable Wits Gold to include this area in its prospecting right, which is located immediately south of the Merriespruit South area.The total consideration was US$47 million, (US$9 million for the prospecting area and US$38 million for the cancellation of the option agreement), which will be settled in cash or in a combination of cash and shares in Wits Gold, when all remaining conditions precedent to the transaction have been fulfilled.Evander 6 and TwistdraaiOn September 10, 2010, Harmony concluded a sale of assets agreement with Taung Gold Limited (Taung), in which Taung acquired the Evander 6 shaft, the related infrastruture and surface right permits as well as a mining right over the Evander 6 and Twistdraai areas. The total purchase consideration is US$29 million, which will
be settled in cash when all remaining conditions precedent to the transaction have been fulfilled.Closure of Merriespruit 1On October 4, 2010, the decision was made to finally close Merriespruit 1 shaft, under the Section 189 (of the Labour Relations Act) already in place. The closure was postponed in terms of an agreement reached with organized labour to keep the shaft open while it remained profitable.38
    
    Segment reportThe group has only one product, being gold. In order to determine operating and reportable segments, management reviewed various factors, including geographical location as well as managerial structure. It was determined that an operating segment consists of a shaft or a group of shafts managed by a single general manager and
management team.After applying the quantitative thresholds from IFRS 8, the reportable segments were determined as:Bambanani, Doornkop, Evander, Joel, Kusasalethu, Masimong, Phakisa, Target, Tshepong, Virginia, Papua New Guinea and Mount Magnet (classified as held for sale and discontinued operation). In 2008 and 2009 the Cooke operations were also classified as held for sale and discontinued operations. All other operating segments have
been grouped together under All other surface operations, under their classification as either continuing or discontinued.When assessing profitability, the chief operating decision maker (CODM) considers the revenue and production costs of each segment. The net of these amounts is the operating profit or loss. Therefore, operating profit has been disclosed in the segment report as the measure of profit or loss.The CODM does not consider depreciation or impairment and therefore these amounts have not been disclosed in the segment report, but does consider capital expenditure which has been disclosed.Segment assets consist of mining assets included under property, plant and equipment which can be attributed to the shaft or group of shafts. Current and non-current group assets that are not allocated at a shaft level, form part of the reconciliation to total assets.A reconciliation of the segment totals to the group financial statements has been included in note 39.
 F-74




---



##### 



Notes
to the consolidated financial statements
 Segment report  2010 (US dollar)
 Production
    
    
    Production
    
    
    Mining
    
    
    Capital
    
    
    Ounces
    
    
    TonsRevenue
    
    
    cost
    
    
    profit
    
    
    assets
    
    
    expenditure
    
    
    produced*
    
    
    milled*US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    oz
    
    
    t000Continuing operationsSouth AfricaUndergroundBambanani
    
    
    147
    
    
    
    98
    
    
    
    49
    
    
    
    125
    
    
    
    28
    
    
    
    133,007
    
    
    
    582Doornkop
    
    
    68
    
    
    
    54
    
    
    
    14
    
    
    
    372
    
    
    
    45
    
    
    
    62,694
    
    
    
    595Evander operations
    
    
    120
    
    
    
    113
    
    
    
    7
    
    
    
    121
    
    
    
    23
    
    
    
    111,724
    
    
    
    869Joel
    
    
    69
    
    
    
    50
    
    
    
    19
    
    
    
    23
    
    
    
    10
    
    
    
    64,495
    
    
    
    484Kusasalethu
    
    
    184
    
    
    
    144
    
    
    
    40
    
    
    
    390
    
    
    
    57
    
    
    
    175,029
    
    
    
    1,141Masimong
    
    
    168
    
    
    
    93
    
    
    
    75
    
    
    
    105
    
    
    
    23
    
    
    
    155,609
    
    
    
    991Phakisa
    
    
    50
    
    
    
    43
    
    
    
    7
    
    
    
    533
    
    
    
    64
    
    
    
    44,079
    
    
    
    374Target
    
    
    116
    
    
    
    88
    
    
    
    28
    
    
    
    333
    
    
    
    51
    
    
    
    113,782
    
    
    
    857Tshepong
    
    
    241
    
    
    
    151
    
    
    
    90
    
    
    
    478
    
    
    
    35
    
    
    
    216,986
    
    
    
    1,674Virginia operations
    
    
    187
    
    
    
    177
    
    
    
    10
    
    
    
    89
    
    
    
    24
    
    
    
    170,013
    
    
    
    1,826SurfaceAll other surface operations
    
    
    129
    
    
    
    84
    
    
    
    45
    
    
    
    17
    
    
    
    11
    
    
    
    119,954
    
    
    
    10,077Total South Africa
    
    
    1,479
    
    
    
    1,095
    
    
    
    384
    
    
    
    2,586
    
    
    
    371
    
    
    
    1,367,372
    
    
    
    19,470InternationalPapua New Guinea
    
    
    10
    
    
    
    8
    
    
    
    2
    
    
    
    494
    
    
    
    71
    
    
    
    61,173
    
    
    
    335Total international
    
    
    10
    
    
    
    8
    
    
    
    2
    
    
    
    494
    
    
    
    71
    
    
    
    61,173
    
    
    
    335Total continuing operations
    
    
    1,489
    
    
    
    1,103
    
    
    
    386
    
    
    
    3,080
    
    
    
    442
    
    
    
    1,428,545
    
    
    
    19,805Discontinued operationsMount Magnet
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29
    
    
    
    
    
    
    
    
    
    
    
    Total discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29
    
    
    
    
    
    
    
    
    
    
    
    Total operations
    
    
    1,489
    
    
    
    1,103
    
    
    
    386
    
    
    
    3,109
    
    
    
    442
    
    
    
    1,428,545
    
    
    
    19,805Reconciliation of the segment information to the
consolidated income statement and balance sheet (refer to
note 39)
    
    
    
    
    
    
    
    
    
    
    
    2,0321,489
    
    
    
    1,103
    
    
    
    
    
    
    
    5,141
 *
    
    Production statistics are unaudited.
 F-75




---



##### 



Notes to the consolidated financial statements
 Segment report  2009 (US dollar)
 Production
    
    
    Production
    
    
    Mining
    
    
    Capital
    
    
    Ounces
    
    
    TonsRevenue
    
    
    cost
    
    
    profit
    
    
    assets
    
    
    expenditure
    
    
    produced*
    
    
    milled*US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    oz
    
    
    t000Continuing operationsSouth AfricaUndergroundBambanani
    
    
    103
    
    
    
    72
    
    
    
    31
    
    
    
    91
    
    
    
    6
    
    
    
    121,530
    
    
    
    570Doornkop
    
    
    38
    
    
    
    31
    
    
    
    7
    
    
    
    330
    
    
    
    44
    
    
    
    42,150
    
    
    
    605Evander operations
    
    
    168
    
    
    
    111
    
    
    
    57
    
    
    
    122
    
    
    
    24
    
    
    
    190,075
    
    
    
    1,241Joel
    
    
    56
    
    
    
    41
    
    
    
    15
    
    
    
    31
    
    
    
    6
    
    
    
    65,684
    
    
    
    566Kusasalethu
    
    
    158
    
    
    
    117
    
    
    
    41
    
    
    
    352
    
    
    
    47
    
    
    
    174,321
    
    
    
    1,061Masimong
    
    
    135
    
    
    
    73
    
    
    
    62
    
    
    
    86
    
    
    
    14
    
    
    
    154,034
    
    
    
    981Phakisa
    
    
    19
    
    
    
    12
    
    
    
    7
    
    
    
    474
    
    
    
    51
    
    
    
    22,216
    
    
    
    204Target
    
    
    76
    
    
    
    60
    
    
    
    16
    
    
    
    287
    
    
    
    38
    
    
    
    87,225
    
    
    
    710Tshepong
    
    
    198
    
    
    
    109
    
    
    
    89
    
    
    
    471
    
    
    
    28
    
    
    
    230,778
    
    
    
    1,516Virginia operations
    
    
    226
    
    
    
    165
    
    
    
    61
    
    
    
    116
    
    
    
    22
    
    
    
    258,170
    
    
    
    2,493SurfaceAll other surface operations
    
    
    100
    
    
    
    59
    
    
    
    41
    
    
    
    18
    
    
    
    9
    
    
    
    114,648
    
    
    
    9,778Total South Africa
    
    
    1,277
    
    
    
    850
    
    
    
    427
    
    
    
    2,378
    
    
    
    289
    
    
    
    1,460,831
    
    
    
    19,725InternationalPapua New Guinea
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    458
    
    
    
    198
    
    
    
    
    
    
    
    Total international
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    458
    
    
    
    198
    
    
    
    
    
    
    
    Total continuing operations
    
    
    1,277
    
    
    
    850
    
    
    
    427
    
    
    
    2,836
    
    
    
    487
    
    
    
    1,460,831
    
    
    
    19,725Discontinued operationsCooke operations
    
    
    69
    
    
    
    50
    
    
    
    19
    
    
    
    
    
    
    
    10
    
    
    
    80,377
    
    
    
    1,419Mount Magnet
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    34
    
    
    
    
    
    
    
    
    
    
    
    Total discontinued operations
    
    
    69
    
    
    
    50
    
    
    
    19
    
    
    
    34
    
    
    
    10
    
    
    
    80,377
    
    
    
    1,419Total operations
    
    
    1,346
    
    
    
    900
    
    
    
    446
    
    
    
    2,870
    
    
    
    497
    
    
    
    1,541,208
    
    
    
    21,144Reconciliation of the segment
information to the consolidated
income statement and balance sheet
(refer to note 39)(69
    )
    
    
    (50
    )
    
    
    
    
    
    
    2,0551,277
    
    
    
    850
    
    
    
    
    
    
    
    4,925
 *
    
    Production statistics are unaudited.
 F-76




---



##### 



Notes
to the  consolidated financial statements
 Segment report  2008 (US dollar)
 Production
    
    
    Production
    
    
    Mining
    
    
    Capital
    
    
    Ounces
    
    
    TonsRevenue
    
    
    cost
    
    
    profit
    
    
    assets
    
    
    expenditure
    
    
    produced*
    
    
    milled*US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    oz
    
    
    t000Continuing operationsSouth AfricaUndergroundBambanani
    
    
    128
    
    
    
    102
    
    
    
    26
    
    
    
    98
    
    
    
    15
    
    
    
    154,879
    
    
    
    912Doornkop
    
    
    35
    
    
    
    31
    
    
    
    4
    
    
    
    273
    
    
    
    48
    
    
    
    44,038
    
    
    
    494Kusasalethu
    
    
    133
    
    
    
    103
    
    
    
    30
    
    
    
    304
    
    
    
    44
    
    
    
    164,215
    
    
    
    981Evander operations
    
    
    193
    
    
    
    127
    
    
    
    66
    
    
    
    131
    
    
    
    33
    
    
    
    231,799
    
    
    
    1,447Joel
    
    
    52
    
    
    
    39
    
    
    
    13
    
    
    
    16
    
    
    
    5
    
    
    
    59,557
    
    
    
    449Masimong
    
    
    96
    
    
    
    88
    
    
    
    8
    
    
    
    94
    
    
    
    16
    
    
    
    116,424
    
    
    
    892Phakisa
    
    
    4
    
    
    
    2
    
    
    
    2
    
    
    
    312
    
    
    
    40
    
    
    
    4,024
    
    
    
    34Target
    
    
    69
    
    
    
    51
    
    
    
    18
    
    
    
    275
    
    
    
    35
    
    
    
    79,602
    
    
    
    686Tshepong
    
    
    223
    
    
    
    125
    
    
    
    98
    
    
    
    404
    
    
    
    27
    
    
    
    265,914
    
    
    
    1,649Virginia operations
    
    
    204
    
    
    
    180
    
    
    
    24
    
    
    
    107
    
    
    
    20
    
    
    
    247,820
    
    
    
    2,349Other operations
    
    
    6
    
    
    
    13
    
    
    
    (7
    )
    
    
    13
    
    
    
    1
    
    
    
    8,305
    
    
    
    86SurfaceAll other surface operations
    
    
    126
    
    
    
    57
    
    
    
    69
    
    
    
    19
    
    
    
    19
    
    
    
    147,980
    
    
    
    9,524Total South Africa
    
    
    1,269
    
    
    
    918
    
    
    
    351
    
    
    
    2,046
    
    
    
    303
    
    
    
    1,524,557
    
    
    
    19,503InternationalPapua New Guinea
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    580
    
    
    
    197
    
    
    
    
    
    
    
    Total international
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    580
    
    
    
    197
    
    
    
    
    
    
    
    Total continuing operations
    
    
    1,269
    
    
    
    918
    
    
    
    351
    
    
    
    2,626
    
    
    
    500
    
    
    
    1,524,557
    
    
    
    19,503Discontinued operationsCooke operations
    
    
    194
    
    
    
    123
    
    
    
    71
    
    
    
    86
    
    
    
    22
    
    
    
    236,170
    
    
    
    3,906Mount Magnet
    
    
    56
    
    
    
    41
    
    
    
    15
    
    
    
    66
    
    
    
    4
    
    
    
    75,297
    
    
    
    966Other operations
    
    
    59
    
    
    
    66
    
    
    
    (7
    )
    
    
    
    
    
    
    16
    
    
    
    74,433
    
    
    
    1,048Total discontinued operations
    
    
    309
    
    
    
    230
    
    
    
    79
    
    
    
    152
    
    
    
    42
    
    
    
    385,900
    
    
    
    5,920Total operations
    
    
    1,578
    
    
    
    1,148
    
    
    
    430
    
    
    
    2,778
    
    
    
    542
    
    
    
    1,910,457
    
    
    
    25,423Reconciliation of the segment
information to the consolidated
income statement and balance sheet
(refer to note 39)(309
    )
    
    
    (230
    )
    
    
    
    
    
    
    1,9321,269
    
    
    
    918
    
    
    
    
    
    
    
    4,710
 *
    
    Production statistics are unaudited.
 F-77




---



##### 



Notes
to the consolidated financial statements
 39
    
    Reconciliation of segment information to consolidated income statements and balance
sheet:The reconciliation of segment data to consolidated financials line item in the
segment reports is broken down into the following elements, to give a better
understanding of the differences between the income statement, balance sheet and the
segment report.Revenue from:
 US DollarFigures in million
    
    2010
    
    
    2009
    
    
    2008Discontinued operations
    
    
    
    
    
    
    69
    
    
    
    309Production costs from:Discontinued operations
    
    
    
    
    
    
    50
    
    
    
    230
 Reconciliation of cash operating profit to consolidated profit/(loss) before
taxation and discontinued operations:
 Total segment revenue
    
    
    1,489
    
    
    
    1,346
    
    
    
    1,578Total segment production costs
    
    
    (1,103
    )
    
    
    (900
    )
    
    
    (1,148
    )Cash operating profit
    
    
    386
    
    
    
    446
    
    
    
    430Less discontinued operations
    
    
    
    
    
    
    (19
    )
    
    
    (79
    )386
    
    
    
    427
    
    
    
    351Cost of sales items other than production costs
    
    
    (280
    )
    
    
    (233
    )
    
    
    (204
    )Amortisation and depreciation of mining properties, mine development cost and mine plant facilities

 
    
    (175
    )
    
    
    (130
    )
    
    
    (107
    )Amortisation and depreciation of other than mining and mining related assets
    
    
    (6
    )
    
    
    (9
    )
    
    
    (10
    )Rehabilitation expenditure
    
    
    (4
    )
    
    
    (1
    )
    
    
    (1
    )Care and maintenance cost of restructured shafts
    
    
    (8
    )
    
    
    (5
    )
    
    
    (10
    )Employment termination and restructuring costs
    
    
    (27
    )
    
    
    (4
    )
    
    
    (29
    )Share-based payments
    
    
    (20
    )
    
    
    (13
    )
    
    
    (6
    )Impairment of assets
    
    
    (43
    )
    
    
    (71
    )
    
    
    (40
    )Provision for post retirement benefits
    
    
    3
    
    
    
    
    
    
    
    (1
    )Gross profit
    
    
    106
    
    
    
    194
    
    
    
    147Corporate, administration and other expenditure
    
    
    (50
    )
    
    
    (36
    )
    
    
    (30
    )Social investment expenditure
    
    
    (11
    )
    
    
    (4
    )
    
    
    (1
    )Exploration expenditure
    
    
    (29
    )
    
    
    (29
    )
    
    
    (28
    )Profit on sale of property, plant and equipment
    
    
    14
    
    
    
    114
    
    
    
    Other expenses  net
    
    
    (8
    )
    
    
    (3
    )
    
    
    (15
    )Operating profit
    
    
    22
    
    
    
    236
    
    
    
    73Profit/(loss) from associates
    
    
    7
    
    
    
    1
    
    
    
    (11
    )Impairment of investment in associate
    
    
    
    
    
    
    (14
    )
    
    
    (12
    )Loss on sale of investment in subsidiary
    
    
    (3
    )
    
    
    
    
    
    
    Net gain/(loss) on financial instruments
    
    
    5
    
    
    
    (10
    )
    
    
    (58
    )Investment income
    
    
    25
    
    
    
    49
    
    
    
    39Finance cost
    
    
    (32
    )
    
    
    (24
    )
    
    
    (70
    )Profit/(loss) before taxation and discontinued operations
    
    
    24
    
    
    
    238
    
    
    
    (39
    )
 F-78




---



##### 



Notes
to the consolidated financial statements
 Reconciliation of total segment assets to consolidated assets includes the following:
 US DollarFigures in million
    
    2010
    
    
    2009
    
    
    2008Non-current assetsProperty, plant and equipment
    
    
    794
    
    
    
    744
    
    
    
    906Intangible assets
    
    
    290
    
    
    
    288
    
    
    
    283Restricted cash
    
    
    19
    
    
    
    21
    
    
    
    10Restricted investments
    
    
    228
    
    
    
    212
    
    
    
    188Investment in financial assets
    
    
    2
    
    
    
    7
    
    
    
    9Investment in associates
    
    
    50
    
    
    
    43
    
    
    
    19Deferred tax asset
    
    
    246
    
    
    
    222
    
    
    
    190Inventories
    
    
    28
    
    
    
    
    
    
    
    Trade and other receivables
    
    
    10
    
    
    
    10
    
    
    
    18Current assetsInventories
    
    
    129
    
    
    
    134
    
    
    
    89Trade and other receivables
    
    
    122
    
    
    
    115
    
    
    
    112Income and mining taxes
    
    
    10
    
    
    
    6
    
    
    
    11Cash and cash equivalents
    
    
    101
    
    
    
    253
    
    
    
    53Restricted cash
    
    
    
    
    
    
    
    
    
    
    Assets of disposal groups classified as held for sale
    
    
    3
    
    
    
    
    
    
    
    442,032
    
    
    
    2,055
    
    
    
    1,932
 F-79